Anderson Publishing has two divisions: Book Publishing and Magazine Publishing. The Magazine division has been losing money for the last five years and Anderson is considering eliminating that division. Anderson’s information about the two divisions is as follows: Book DivisionMagazine DivisionTotalSales Revenue$ 8,160,000$ 3,452,300$ 11,612,300Cost of Goods sold Variable manufacturing costs2,360,0001,176,5003,536,500Fixed manufacturing costs1,113,5001,292,7002,406,200Gross Profit$ 4,686,500$ 983,100$ 5,669,600Operating Expenses Variable operating expenses171,000250,800421,800Fixed operating expenses2,952,0001,209,1004,161,100Net income$ 1,563,500$ (476,800)$ 1,086,700Only 20 percent of the fixed manufacturing costs and 60 percent of the fixed operating expenses are directly attributable to each division. The remaining are common or shared between the two divisions.Required:Compute the contribution margin and the segment margin of each division and the company as a whole.What will be the impact on net income if the Magazine Division is eliminated?Please dont give solution plagiarised and image based thanku

Common costs are those costs which are not incurred on any specific division or department. These…

Answered: Anderson Publishing has two divisions:…

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ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

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Anderson Publishing has two divisions: Book Publishing and Magazine Publishing. The Magazine division has been losing money for the last five years and Anderson is considering eliminating that division. Anderson’s information about the two divisions is as follows:

	Book Division	Magazine Division	Total
Sales Revenue	$ 8,160,000	$ 3,452,300	$ 11,612,300
Cost of Goods sold
Variable manufacturing costs	2,360,000	1,176,500	3,536,500
Fixed manufacturing costs	1,113,500	1,292,700	2,406,200
Gross Profit	$ 4,686,500	$ 983,100	$ 5,669,600
Operating Expenses
Variable operating expenses	171,000	250,800	421,800
Fixed operating expenses	2,952,000	1,209,100	4,161,100
Net income	$ 1,563,500	$ (476,800)	$ 1,086,700

Only 20 percent of the fixed manufacturing costs and 60 percent of the fixed operating expenses are directly attributable to each division. The remaining are common or shared between the two divisions.

Required:

Compute the contribution margin and the segment margin of each division and the company as a whole.
What will be the impact on net income if the Magazine Division is eliminated?

Please dont give solution plagiarised and image based thanku

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