
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Please solve with details and do not give solution in image format otherwise give down vote

Transcribed Image Text:Thalassines Kataskeves, S.A., of Greece makes marine equipment. The company has been experiencing losses on its bilge pump
product line for several years. The most recent quarterly contribution format income statement for the bilge pump product line follows:
Sales
Variable expenses:
Variable manufacturing expenses
Sales commissions.
Shipping
Total variable expenses
Contribution margin
Fixed expenses:
Advertising (for the bilge pump product line).
Depreciation of equipment (no resale value)
General factory overhead
Salary of product-line manager
Insurance on inventories
Purchasing department.
Thalassines Kataskeves, S.A.
Income Statement-Bilge Pump
For the Quarter Ended March 31
Total fixed expenses
Net operating loss
*Common costs allocated on the basis of machine-hours.
+Common costs allocated on the basis of sales dollars.
$ 120,000
48,000
22,000
Financial (disadvantage)
27,000
104,000
50,000*
126,000
9,000
58,000*
$ 420,000
190,000
230,000
374,000
$ (144,000)
Discontinuing the bilge pump product line would not affect sales of other product lines and would have no effect on the company's
total general factory overhead or total Purchasing Department expenses.
Required:
What is the financial advantage (disadvantage) of discontinuing the bilge pump product line?

Transcribed Image Text:Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format
income statement follows:
Sales
Variable expenses.
Contribution margin
Fixed expenses
Net operating income (loss)
Total
$ 4,210,000
1,308,000
2,902,000
2,370,000
$ 532,000
Financial (disadvantage)
Department
Hardware
$ 3,180,000
905,000
2,275,000
1,480,000
$ 795,000
Required:
What is the financial advantage (disadvantage) of discontinuing the Linens Department?
A study indicates that $379,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue
even if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 18% decrease in the
sales of the Hardware Department.
Linens
$ 1,030,000
403,000
627,000
890,000
$ (263,000)
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution
Trending nowThis is a popular solution!
Step by stepSolved in 3 steps

Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all workingarrow_forwardPlease answer questions correctlyarrow_forwardHow would I calculate this problem? I just guessed on which answer made sense to me. Please help. thank you in advance.arrow_forward
- Please answer G part with explanation. Answer was incoorect in previous solutionarrow_forwardhelp please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all workingarrow_forwardLutoSave 日 Off UnitlILabAssignment_Question1 O Search (Alt-Q) Protected View Home Insert Draw Page Layout Formulas Data Review View Help PROTECTED VIEW Be careful-files from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View. Enable Editing fx Formula: Multiply, Subtract; Cell Referencing A D E F G H. K Formula: Multiply, Subtract; Cell Referencing Using Excel to Record Stock Entries Student Work Area PROBLEM Required: Provide input into cells shaded in yellow in this template. Select account names from the drop-down lists. Use cell references to the data area. Use mathematical formulas to calculate any amounts not given. On May 10, Jack Corporation issues common stock for cash. Shares of stock issued Par value per share 2,000 24 %24 10.00 Amount at which stock issued 18.00 Journalize the issuance of the stock. 10 11 Date Debit Credit 12 May 10 13 14 15 16 17 18 19 20 21 22 23 25 26 27 28 29 30 31 32 33 Enter Answer Ready 24arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education


Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,

Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON

Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education

Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education