None Exercise 23-8 (Algo) Segment elimination LO P4Marin Company makes several products, including canoes. The company reports a loss from its canoe segment (see below). All itsvariable costs are avoidable, and $322,500 of its fixed costs are avoidable.Segment Income (Loss)SalesVariable costsContribution marginFixed costsIncome (loss)$ 1,068,200763,000305,200367,000$ (61,800)(a) Compute the income increase or decrease from eliminating this segment.(b) Should the segment be continued or eliminated?Answer is complete but not entirely correct.Complete this question by entering your answers in the tabs below.Required A Required BCompute the income increase or decrease from eliminating this segment.Segment EliminationContinueEliminateIncome Increase(Decrease)AnalysisSales$ 1,068,200 S 322,500 XVariable costs✓763,000322,500XContribution margin305,2000Fixed costs367,000322,500 XIncome (loss)$ (61,800)$ (322,500)$(260,700)Required ARequired B>

Cost-Volume-Profit (CVP) analysis is a managerial accounting technique used to examine the…

Answered: (a) Compute the income increase or…

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter12: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 1SEQ: Mario Company is considering discontinuing a product. The costs of the product consist of $20,000...

See similar textbooks

Similar questions

Mario Company is considering discontinuing a product. The costs of the product consist of $20,000 fixed costs and $15,000 variable costs. The variable operating expenses related to the product total $4,000. What is the differential cost? A. $19,000 B. $15,000 C. $35,000 D. $39,000
Required Information Problem 18-4A (Algo) Break-even analysis, different cost structures, and income calculations LO C2, A1, P2 [The following information applies to the questions displayed below.] Henna Company produces and sells two products, Carvings and Mementos. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 42,000 units of each product. Income statements for each product follow. Sales Variable costs Contribution margin Fixed costs Income Problem 18-4A (Algo) Part 3 Contribution margin 3. Assume that the company expects sales of each product to increase to 56,000 units next year with no change in unit selling price. Prepare a contribution margin Income statement for the next year (as shown above with columns for each of the two products). (Rour "per unit" answers to 2 declmal places.) Fixed costs Sales Variable cost Carvings $ 47,600 523,320 224,280 108,280 $ 116,000 Mementos…
S Required information Problem 5-4A (Algo) Break-even analysis, different cost structures, and income calculations LO C2, A1, P2 [The following information applies to the questions displayed below.] Henna Company produces and sells two products, Carvings and Mementos. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 52,000 units of each product. Income statements for each product follow. Sales Variable costs Contribution margin Fixed costs Income Problem 5-4A (Algo) Part 3 Contribution margin 3. Assume that the company expects sales of each product to increase to 66,000 units next year with no change in unit selling price. Prepare a contribution margin income statement for the next year (as shown above with columns for each of the two products). Note: Round "per unit" answers to 2 decimal places. Income (loss) Carvings $ 842,400 Mementos $ 842,400 673,920 168,480 168,480 673,920 26,…
Problem 17-2 (LO 17-1) A service company has the... A service company has the following financial information (in millions of $) Sales $510 210 Cost of outsourced facilitating goods Cost of in-house services provided Administrative costs 199 77 Pretax earnings 24 (Round answers to 1 decimal place.) a. What is the profit leverage effect of reducing the cost of the facilitating goods in this company? b. It has been suggested that the in-house services costs could be reduced by 10 percent in the coming year by implementing lean systems. What effect would this have on earnings increase in percentage? c. What is the profit leverage effect of in-house services relative to profits?
Exercise 13-2 (Algo) Dropping or Retaining a Segment [LO13-2] The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Total $ 923,000 467,000 456, 000 Required 1 Advertising, traceable. Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* Total fixed expenses Net operating income (loss) *Allocated on the basis of sales dollars. Management is concerned about the continued losses shown by the racing bikes and wants a recommendation as to whether or not the line should be discontinued. The special equipment used to produce racing bikes has no resale value and does not wear out. Required 2 Required 3 70, 500 44, 100 Dirt Bikes $ 265,000 111, 000 154,000 114, 500 184, 600 413, 700 $ 42,300 Complete this question by entering your answers in the tabs…
1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department believes increasing the West Division's monthly advertising by $24,000 will increase that division's sales by 11%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented? 2-b. Would you recommend the increased advertising? Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Prepare a contribution format income statement segmented by divisions. Division Central West
TB MC Qu. 15-51 (Algo) Division X makes a part that it... Division X makes a part that It sells to customers outside of the company. Data concerning this part appear below Selling price to outside customers Variable cost per unit Total fixed costs %$4 78 $4 44 $470,000 32,000 Capacity in units Division Y of the same company would like to use the part manufactured by Division X in one of its products. Division Y currently purchases a similar part made by an outside company for $77 per unit and would substitute the part made by Division X. Division Y requires 7,800 units of the part each period. Division X can sell all of the units it makes to outside customers. What is the lowest acceptable transfer price from the standpoint of the selling division? %24
Кееp-or-Drop Decision Petoskey Company produces three products: Alanson, Boyne, and Conway. A segmented income statement, with amounts given in thousands, follows: Alanson Вoyne Conway Total Sales revenue $1,280 $185 $345 $1,810 Less: Variable expenses 1,115 45 276 1,436 Contribution margin $165 $140 $69 $374 Less direct fixed expenses: Depreciation 50 15 10 75 Salaries 95 85 88 268 Segment margin $20 $40 $(29) $31 Direct fixed expenses consist of depreciation and plant supervisory salaries. All depreciation on the equipment is dedicated to the product lines. None of the equipment can be sold. Assume that each of the three products has a different supervisor whose position would remain if the associated product were dropped. Required: CONCEPTUAL CONNECTION: Estimate the impact on profit that would result from dropping Conway. Enter amount in full, rather than in thousands. For example, "15000" rather than "15". Decrease Should Petoskey keep or drop Conway? Keep Feedback Check My Work…
Ch. 7 Incremental Analysis pg 467 Segment Income Statement Please provide the answer and explain the answer to the following question with the information given below. "Big Tent Company is trying to decide whether to keep or drop one of its outdoor wedding tents. The company's segmented income statement shows that this product is generating a net loss as follows:" Sales Revenue: $100,000 Less: Variable Costs $70,000 Contribution Margin $30,000 Less: Direct Fixed Costs $10,000 Segment Margin $20,000 Less: Allocated common fixed costs $30,000 Net Operating Income $(10,000) The company estimates that eliminating this product line will increase the contribution margin on a related product line by $25,000. Based on this information, what impact would dropping the line have on the company's overall profitability?
Exercise 23-8 Segment elimination P4 Marin Company makes several products, including canoes. The company reports a loss from its canoe segment (see below). All its variable costs are avoidable, and $300,000 of its fixed costs are avoidable. (a) Compute the income increase or decrease from eliminating this segment. (b) Should the segment be eliminated? Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $980,000 700,000 280,000 340,000 $ (60,000) Page 923
Exercise 11-2 (Algo) Dropping or Retaining a Segment [LO11-2] The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* Total fixed expenses Net operating income (loss) *Allocated on the basis of sales dollars. Total $ 923,000 483,000 440,000 69,300 43,300 Required 1 114,400 184,600 411,600 $ 28,400 Required 2 Required 3 Dirt Bikes $ 264,000 119,000 145,000 8,500 20, 200 40,500 52,800 122,000 $ 23,000 Complete this question by entering your answers in the tabs below. Mountain Bikes $ 403,000 204,000 199,000 Management is concerned about the continued losses shown by the racing bikes and wants a recommendation as to whether or not the line should be discontinued. The special…
Required information Problem 18-4A (Static) Break-even analysis, different cost structures, and income calculations LO C2, A1, P2 [The following information applies to the questions displayed below.] Henna Company produces and sells two products, Carvings and Mementos. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 50,000 units of each product. Income statements for each product follow. Sales Variable costs. Contribution margin Fixed costs Income Problem 18-4A (Static) Part 3 Sales Variable cost Contribution margin Carvings $ 2,000,000 1,600,000 400,000 125,000 $ 275,000 3. Assume that the company expects sales of each product to increase to 60,000 units next year with no change in unit selling price. Prepare a contribution margin income statement for the next year (as shown above with columns for each of the two products). Fixed costs Income (loss) Units Mementos $ 2,000,000…

SEE MORE QUESTIONS

Recommended textbooks for you

Survey of Accounting (Accounting I)

Accounting

ISBN:

9781305961883

Author:

Carl Warren

Publisher:

Cengage Learning

Survey of Accounting (Accounting I)

Accounting

ISBN:

9781305961883

Author:

Carl Warren

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS

(a) Compute the income increase or decrease from eliminating this segment. (b) Should the segment be continued or eliminated?