9. Assuming the management chooses the first option, which amount the product lines will be eliminated?a. La-Lisab. Jenniec. Jisood. Rose_____ 10. Assuming the management chooses to discontinue the unprofitable product line, what is the net impact to the Company’s overall profit?a. P 7,000b. P 17,000c. P 13,000d. P 23,000 The Blackpink, Inc. has four product-lines namely – La-Lisa, Jennie, Jisoo, and Rose. Data on sales andexpenses for the immediately preceding year are as follows: (in thousands)9.La-LisaP 350,000 P90,000 P 150,00030,000TotalJennieJisooRoseP 60,00035,00025,000P 50,00015,00035,000SalesVariable Costs140,000210,00060,000Contribution Margin60,00090,000Fixed costs:Advertising, traceableDepreciationSalaries of product-line managers6,0008,00010,00012,00036,00030,0008,00060,00010,0006,00014,0009,00013,00030,00066,00031,00045,00070,00012,00018,00010,000Allocated common fixed costs*10,00058,000Total fixed costs206,00046,000Net operating income (loss)P4,000 P 14,000 P 24,000 (P 11,000) (P 23,000)Units sold1,5003,0002,000400*Allocated based on sales in pesoManagement is concerned about the continued losses of Jisoo and Rose and ask you a for a recommendation.Salaries of product line managers could be eliminated if the respective unprofitable product line isdiscontinued. The equipment used to produce each product can still be used for other purposes.After careful evaluation, you provided the following options for the management to decide.To discontinue the unprofitable product line and use its current equipment to produce La-Lisa which willresult to an increase in its sales by 20%.To invest in improving equipment used in the production of the unprofitable product-line to reduce itsvariable cost by 50%. The cost of improvement is P10,000, which will be depreciated on a straight-linebasis for five years. The cost of capital is 8%.To cease the production of the unprofitable product line but instead purchase its entire productrequirement from Jennie, which is currently operating at excess capacity. Jennie, however, will need toincur additional P5.00 per unit to adjust its products to the design set by the unprofitable product-line.The managers agreed at a price equal to 140% of the total relevant costs incurred by Jennie. The unusedequipment will then be used to produce Jisoo, which will result to an increase in its sales by 50%.Further, 95% of the existing variable costs of the unprofitable product line will be eliminated.

Blackpink Inc. has 4 product lines - La-Lisa, Jennie, Jisoo and Rose. Two products out of the 4 are…

9. Assuming the management chooses the first option, which amount the product lines will be eliminated? a. La-Lisa b. Jennie c. Jisoo d. Rose _____ 10. Assuming the management chooses to discontinue the unprofitable product line, what is the net impact to the Company’s overall profit? a. P 7,000 b. P 17,000 c. P 13,000 d. P 23,000

9. Assuming the management chooses the first option, which amount the product lines will be eliminated? a. La-Lisa b. Jennie c. Jisoo d. Rose _____ 10. Assuming the management chooses to discontinue the unprofitable product line, what is the net impact to the Company’s overall profit? a. P 7,000 b. P 17,000 c. P 13,000 d. P 23,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Data concerning Strite Corporation's single product appear below: Selling price per unit Variable expense per unit Fixed expense per month Assume the company's target profit is $8,000. The dollar sales to attain that target profit is closest to: (Round your intermediate calculations to 2 decimal places.) Multiple Choice $1,532,857 $429,200 $596,111 $ 150.00 $ 42.00 $ 421,200 $852,723
Smith & Chief Ltd. of Sydney, Australia, is a merchandising firm that is the sole distributor of a product that is increasing in popularity among Australian consumers. The company's income statements for the four most recent quarters follow. SMITH & CHIEF LTD. Income Statements For the Four Quarters Ending December 31 Quarter 1 Quarter 2 6,100 5.600 A$610,000 A$560,080 A$692,000 366,000 336,000 415,280 244,800 224,800 276,800 Sales in units Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses: Advertising expense Shipping expense Salaries and commissions Insurance expense Depreciation expense Total operating expenses Net income Advertising expense Shipping expense Salaries and commissions expense (Note: Smith & Chief Ltd.'s Australian-formatted income statement has been recast into the format common in Canada. The Australian dollar is denoted by A$.) S Advertising expense 22,600 22,600 22,600 40,408 42.400 42,080 87,600 81,200 97,840 94,288 7,500 7,600 7,600…
A company's sales in the last year in its three different markets were as follows$Market 1 100,000Market 2 149,000Market 3 51,000Total 300,000In a pie chart representing the proportion of sales made by each region what would be the angle of thesection representing Market 3?A 17 degreesB 50 degreesC 61 degreesD 120 degrees
Pedaci Corporation produces and sells a single product. Data concerning that product appear below: Assume the company's monthly target profit is $15,000. The unit sales to attain that target profit is closest to: 3,212B. 5,265C. 8,235D. 5,571 Assume the company's monthly target profit is $17,000. The dollar sales to attain that target profit is closest to: $387,392B. $635,069C. $671,925D. $993,313
The data during the month of an enterprise who sells product M are as follows: Sale of 2,000 units at the before-VAT price of VND 300,000/unit in the domestic market. Export 500 units at FOB price of VND 310,000/ unit. Purchase 1,000 units with before-VAT price of VND 250,000/ unit. Purchase 300 units with price of VND 280,000/unit stated on the sale invoice. Deductible Input VAT for other purchased services: VND 1,000,000. VAT rate 10%. Exported goods are supported with sufficient documents as prescribed by law The VAT amount payable is * VND 41,100,000 VND 25,600,000 VND 49,500,000 VND 34,000,000
The following is Cullumber Company’s income statement for the past year. Sales revenue $336,000 Cost of goods sold 134,400 Gross margin 201,600 Operating expenses 145,600 Operating income $56,000 If the company wants to sell a new product that costs $49 wholesale while keeping the same markup structure, what will be the price of the new product? (Use the gross margin percentage and round final answer to 2 decimal places, e.g. 25,124.25.) Price of the new product $enter the price of the new product in dollars rounded to 2 decimal places
47. Redding Company has two divisions with the following segment margins for the current year: Northern, s200,000; Southern, $400,000. Common expenses of the company are $50,000. What is Redding Company's income? OSs0.000 O sG00,000 S150,000 $550,000 48. Grey Inc. has many divisions that are evaluated on the basis of ROL. One division, Contra, makes boxes. A second division, Mantra, makes chocolates and needs 80,000 boxes per year Centra incurs the following costs for ane bax: Direct materials $0.35 Direct labor $0.60 Variable overhead $0.40 Fixed averhead $0.13 $1.48 Tolal Centra has capacity to make 700,000 boxes per year. Mantra currently buys ts boxes from an outside supplier for $1.80 cach (the same price that Centra receives). Assume that Grey Inc. mandates that any transfers take place at full manufacturing cost. What would be the transfer price if Contra transferred boxes to Mantra? O $1.35 Cannot be determined trom the information gen OS1.48 $0.90 $1.00
A company has sales of Ghc1,000. The company sell three types of goods. Sixty percent of sales are of type A. Which is sold at a mark -up of 20%. Type B goods are sold at a margin of 30%. The cost of type B sold in the year was Ghc154 and the total gross profit for the year was Ghc184. What was the gross profit for type C?
Combe Corporation has two divisions: Alpha and Beta. Data from the most recent month appear below: Alpha $165,000 S107, 250 S 89,100 Beta Sales Variable expenses Traceable fixed expenses $283, 500 $170, 900 S 87,700 The company's common fixed expenses total $86,500. The break-even in sales dollars for Alpha Division is closest to: (Round your Intermedlate calculations to 2 decimal places.) Multple Choice $5074 $254,571 $78,500 $24743
A company has sales of Gh1,000.The company sells three types of goods . Sixty percent of sales are of types A which is sold at a mark-up of 20%. Type B goods are sold at a margin of 30%.The cost of this B sold in the year was Gh 154 and total gross profit for the year was Gh 184. What wast the cost of sales for type C?
Sisyphus Inc. records total sales of $657,500 in the current period, with a cost of goods sold of $389,000 . Sisyphus expects 4% of sales to be returned. How much in net sales will Sisyphus recognize for the current period? Group of answer choices $373,400 $268,500 $631,200 $657,500 $257,760 The Sisyphus Inc’s (SSY) Company’s annual statement of cash flows reported the following (in millions): Net cash from financing activities $63,864 Net cash from investing activities -62,512 Cash at the beginning of the year 13,152 Cash at the end of the year 18,948 What did SSY report for “Net cash from operating activities” during the year? Group of answer choices $71,220 million cash inflow None of the above $4,444 million cash outflow $4,444 million cash inflow $71,220 million cash outflow
Net sales for the year were $450,000 and cost of goods sold was $297,000 for the company's existing products. A new product is presently under development and has an expected selling price of not more than $75 per unit in order to remain competitive with similar products in the marketplace. Required: a. Calculate gross profit and the gross profit ratio for the year. Net sales Cost of goods sold Gross profit $ 450,000 $ 153,000 b. What is the maximum cost per unit that can be incurred to manufacture the new product so that the product can be priced competitively and will not result in a reduction to the company's gross profit ratio? (Round your final answer to 2 decimal places.) Maximum manufacturing cost per unit