Fabri Corporation is considering eliminating a department that has an annual contribution margin of $28,000 and $72,000 in annual fixedcosts. Of the fixed costs, $15,000 cannot be avoided. The annual financial advantage (disadvantage) for the company of eliminating thisdepartment would be:Multiple ChoiceO ($44,000)O$44,000O ($29,000)O$29,000

Incremental analysis:— This analysis shows the comparison between two different alternatives. A…

Answered: Fabri Corporation is considering…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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pls show solutions Manor Company plans to discontinue a department that has a contribution margin of $25,000 and $50,000 in fixed costs. Of the fixed costs, $21,000 cannot be eliminated. The effect on the profit of Manor Company ofdiscontinuing this department would be an increase or decrease of how much?
Your Company is considering eliminating a department that has a contribution margin of $35,000 and $60,000 in fixed costs. Of the fixed costs, $15,000 cannot be avoided. What is the effect of eliminating this department on overall net operating income?
ABC Co. plans to discontinue a department that has a contribution margin of P60,000 and P100,000 in fixed costs. Of the fixed costs, P60,000 would still continue even if the department is closed. The effect of this discontinuance on Indian’s overall net operating income would be A. Zero effect B. increase of P20,000 C. decrease of P20,000 D. increase of P40,000 Answer with explanation please. Thank you
The following information is for X Company's two products - A and B: Sales Total contribution margin Fixed costs: Submit Angus Tres 012 Tring Avoidable Unavoidable Profit Product A $93,000 39,990 21,000 5,000 $13,990 Product B $92,000 36,800 26,500 30,000 $-19,700 The company is considering dropping Product B because of the $19,700 loss. If X Company drops Product B, it will use the freed-up resources to increase sales of Product A by $16,000. If X Company drops Product B and increases sales of A, firm profits will change by
13 XYZ Company is considering eliminating a department that has an annual contribution margin of $35,000 and $70,000 in annual fixed costs. Of the fixed costs, $20,000 cannot be avoided. The annual financial advantage (disadvantage) for the company of eliminating this department would be $15,000 ($35,000) $35,000 ($15,000)
Your Corporation is considering eliminating a department that has a contribution margin of $30,000 and $60,000 in fixed costs. Of the fixed costs, $15,000 cannot be avoided. What is the effect of eliminating this department on overall net operating income?
Central Industries has three product lines: A, B, and C. The information given below is available. Central Industries is thinking about dropping Product C because it is reporting a loss. Assume Central Industries drops Product C ?and does not replace it. What will happen to operating income Sales Variable costs Contribution margin. Avoidable fixed costs Unavoidable fixed costs Operating income(loss) Product A $100,000 76.000 24,000 9,000 6.000 $9.000 Product B S90,000 48,000 42,000 18,000 9.000 $15.000 Product C $44,000 35,000 9,000 3,000 7.700 S(1.700) increase by $600 increase by S1,700 () decrease by S6,000 decrease by S9,000 ) increase by S2,400 ()
B. C. D&R Corporation has annual revenues of $375,000, an average contribution margin ratio of 32%, and fixed expenses of $150,000. Required: a. Management is considering adding a new product to the company's product line. The new item will have $9.52 of variable costs per unit. Calculate the selling price that will be required if this product is not to affect the average contribution margin ratio. b. If the new product adds an additional $26,880 to D&R's fixed expenses, how many units of the new product must be sold at the price calculated in part a to break even on the new product? c. If 16,000 units of the new product could be sold at a price of $15.50 per unit, and the company's other business did not change, calculate D&R's total operating income and average contribution margin ratio. Complete this question by entering your answers in the tabs below. Required A Required B Management is considering adding a new product to the company's product line. The new item will have $9.52 of…
Blowing Sand Company produces the Drafty model fan, which currently has a net loss of $36,000 as follows: Drafty Model $300,000 210,000 $ 90,000 84,000 $6,000 42,000 $(36,000) Sales revenue Less: Variable costs Contribution margin Less: Direct fixed costs Segment margin Less: Common fixed costs Net operating income (loss) Eliminating the Drafty product line would eliminate $84,000 of direct fixed costs. The $42,000 of common fixed costs would be redistributed to Blowing Sand's remaining product lines. Will Blowing Sand's net operating income increase or decrease if the Drafty model is eliminated? By how much? Total Profit by
Bryson Company's western territory's forecasted income statement for the upcoming year is as follows: Sales revenue $700,000 Variable costs 600,000 Contribution margin $100,000 Fixed costs 496,000 Operating income (loss) $(396,000) Bryson Company's management is considering dropping the western territory. If the company eliminates $396,000 of fixed costs by dropping the segment, the segment should be dropped.
XYZ Company is facing changes in its cost structure so that fixed costs will decrease from $600,000 to $500,000, but variable costs will increase from $12 per unit to $14 per unit. If it were to implement these changes at its current production level of 50,000 units (with no change to selling price), profit would not change. What would happen to the ?company's profit if the changes were implemented, and production decreased to 45,000 units It will decrease .a O none of the given answers.b O .It will stay the same .c O It will increase d O
A company has three product lines, one of which has the following results: Sales $214000 Variable expenses 127000 Contribution margin 87000 Fixed expenses 130000 Net loss $ (43000) If this product line is eliminated, 60% of the fixed expenses will be eliminated and the other 40% will be allocated to other product lines. If management decides to eliminate this product line, the company’s net income will

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