Include contribution Margin PRThe budgets of four companies yield the following information:Company$680,000$445,000$224,000Target sales170,000270,000Variable expenses$159,000$ 93,000Fixed expensesOperating income (loss)$150,0002$24$133,000106,80012,50018,000Units soldContribution margin per unit$6.25$248.96$ 35.00Contribution margin ratio0.60Requirements1. Fill in the blanks for each company.2. Compute breakeven, in sales dollars, for each company. Which company has the low-est breakeven point in sales dollars? What causes the low breakeven point?P7-62A Find broale

1) Filling the blanks Q R S T Target Sales 680000 445000 224000 900000 Variable Expenses…

The budgets of four companies yield the following information: Company R. $445,000 $224,000 $680,000 Target sales Variable expenses 170,000 270,000 $159,000 $ 93,000 Fixed expenses Operating income (loss) $150,000 $133,000 ...... .

The budgets of four companies yield the following information: Company R. $445,000 $224,000 $680,000 Target sales Variable expenses 170,000 270,000 $159,000 $ 93,000 Fixed expenses Operating income (loss) $150,000 $133,000 ...... .

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter14: Decentralized Operations

Section: Chapter Questions

Problem 3SEQ: Division A of Kern Co. has sales of $350,000, cost of goods sold of $200,000, operating expenses of...

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DJH Enterprises has 3 departments. Operating results for 2019 are as follows: Department 1 Department 2 Department 3 Sales $938,000 $450,800 $1,198,400 Variable Costs 623,000 401,800 842,800 Contribution Margin $315,000 $49,000 $355,600 Direct fixed expenses $168,000 $37,800 $228,200 Common fixed expenses 105,000 42,000 131,600 Total fixed expenses $273,000 $79,800 $359,800 Operating income (loss) $42,000 $(30,800) $(4,200) DJH is considering eliminating the departments that show losses. Assume that the direct fixed expenses could be avoided if the department is eliminated.What effect would elimination of Department 2 have on DJH’s total operating income? Select one: a. It would increase total operating income by $42,000. b. It would decrease total operating income by $7,000. c. It would decrease total operating income by $49,000. d. It would increase total operating income by $30,800. e. It would decrease total operating income by $11,200.
The operations of Smits Corporation are divided into the Child Division and the Jackson Division. Projections for the next year are as follows: ChildDivision JacksonDivision Total Sales revenue $250,000 $180,000 $430,000 Variable expenses 90,000 100,000 190,000 Contribution margin $160,000 $80,000 $240,000 Direct fixed expenses 75,000 62,500 137,500 Segment margin $85,000 $17,500 $102,500 Allocated common costs 35,000 27,500 62,500 Total relevant benefit (loss) $50,000 $(10,000) $40,000 Operating income for Smits Corporation as a whole if the Jackson Division were dropped would be a.$50,000. b.$40,000. c.$60,000. d.$22,500.
Suresh Co. expects its five departments to yield the following income for next year. Dept. M $77,000 Dept. O $70,000 Dept. N Dept. P Dept. T Total Sales $ 39,000 $56,000 $ 38,000 $ 280,000 Expenses Avoidable Unavoidable 21,600 5,200 26,800 19,000 14,800 55,800 42,400 18,600 46,800 16,800 144,600 139,600 43, 200 Total expenses 70,600 61,000 62, 200 63,600 284, 200 Net income (loss) $ 6,400 $(22,000) $43, 200 $(6,200) $( 25,600) $ (4,200) Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios. (2) Management eliminates departments with sales dollars that are less than avoidable expenses. DEPARTMENTS WITH LESS SALES THAN AVOIDABLE EXPENSES ELIMINATED Dept. M Dept. N Dept. O Dept. P Dept. T Total Sales Expenses: Avoidable Unavoidable Total expenses Net income (loss)
DJH Enterprises has 3 departments. Operating results for 2019 are as follows: Department 1 Department 2 Department 3 Sales $837,500 $402,500 $1,070,000 Variable Costs 556,250 358,750 752,500 Contribution Margin $281,250 $43,750 $317,500 Direct fixed expenses $150,000 $33,750 $203,750 Common fixed expenses 93,750 37,500 117,500 Total fixed expenses $243,750 $71,250 $321,250 Operating income (loss) $37,500 $(27,500) $(3,750) DJH is considering eliminating the departments that show losses. Assume that the direct fixed expenses could be avoided if the department is eliminated. What effect would elimination of Department 3 have on DJH’s total operating income? Select one: a. It would decrease total operating income by $113,750. b. It would decrease total operating income by $317,500. c. None of these options are correct. d. It would increase total operating income by $117,500. e. It would decrease total operating income by $3,750.
Division A of Kern Co. has sales of $350,000, cost of goods sold of $200,000, operating expenses of $30,000, and invested assets of $600000. What is the return on investment for Division A? A. 20% B. 25% C. 33% D. 40%
For its three investment centers, Monty Company accumulates the following data. 11 $1,960,000 $3,920,000 Controllable margin 1,470,000 2,116,800 Average operating assets 4,900,000 7,840.000 Sales Compute the return on investment (ROI) for each center. Return on investment Madla % ||| $3,920,000 3,724,000 9,800,000 % 111
Shown as follows is a segmented income statement for Drexel-Hall during the current month. Profit Centers Drexel-Hall Store 1 Store 2 Store 3 Dollars % Dollars % Dollars % Dollars % Sales $ 1,800,000 100 % $ 600,000 100 % $ 600,000 100 % $ 600,000 100 % Variable costs 1,080,000 60 372,000 62 378,000 63 330,000 55 Contribution margin $ 720,000 40 % $ 228,000 38 % $ 222,000 37 % $ 270,000 45 % Traceable fixed costs: controllable 432,000 24 120,000 20 102,000 17 210,000 35 Performance margin $ 288,000 16 % $ 108,000 18 % $ 120,000 20 % $ 60,000 10 % Traceable fixed costs: committed 180,000 10 48,000 8 66,000 11 66,000 11 Store responsibility margin $ 108,000 6 % $ 60,000 10 % $ 54,000 9 % $ (6,000 ) (1 )…
Kyle Corporation provides the following information for the Product Division and Service Division for the year. Product Division Service Division 420,000 $ 650,000 195,000 245,000 640,000 610,000 14.0% 14.0% Net sales Operating income Average total assets Target rate of return $ Requirement 1. Calculate the return on investment for each division. (Enter answers as a percent rounded to the nearest hundredth percent, X.XX%) The return on investment for the Product Division is The return on investment for the Service Division is Requirement 2. Which division has the highest ROI? % % Requirement 3. Calculate the residual income for each division. (Round answers to the nearest whole dollar.) The residual income for the Product Division is The residual income for the Service Division is Requirement 4. Which division has the highest residual income?
Noventis Corporation prepared the following estimates for the four quarters of the current year: FirstQuarter SecondQuarter ThirdQuarter FourthQuarter Sales $ 1,275,000 $ 1,530,000 $ 1,785,000 $ 2,040,000 Cost of goods sold 434,000 514,000 584,000 634,000 Administrative costs 500,000 280,000 285,000 295,000 Advertising costs 0 140,000 0 0 Executive bonuses 0 0 0 104,000 Provision for bad debts 0 0 0 60,000 Annual maintenance costs 78,000 0 0 0 Additional Information First-quarter administrative costs include the $180,000 annual insurance premium. Advertising costs paid in the second quarter relate to television advertisements that will be broadcast throughout the entire year. No special items affect income during the year. Noventis estimates an effective income tax rate for the year of 40 percent. Assuming that actual results do not vary from the…
Given the following data: $720,000 $ 51,840 $432,000 $250, 560 $188,800 Average operating assets Total liabilities Sales Contribution margin Net operating income Return on investment (ROI) is: Multiple Cholce 25.0% 15.0% 58.0% O 34.8%
Assume a retailing company has two departments-Department A and Department B. The company's most recent contribution format income statement follows: Total Department A Department B Sales $ 800,000 $ 350,000 $ 450,000 Variable expenses 320,000 120,000 200,000 Contribution margin 480,000 230,000 250,000 Fixed expenses 400,000 140,000 260,000 Net operating income (loss) $ 80,000 $ 90,000 $ (10,000) The company says that $120,000 of the fixed expenses being charged to Department B are sunk costs or allocated costs that will continue if the segment is discontinued. However, if Department B is discontinued the sales in Department A will drop by 12%. What is the financial advantage (disadvantage) of discontinuing Department B?
Assume a retailing company has two departments-Department A and Department B. The company's most recent contribution format income statement follows: Total Department A Department B $ 800,000 350,000 450,000 $ 350,000 250,000 Sales $ 450,000 Variable expenses Contribution margin 100,000 100,000 350,000 Fixed expenses 400,000 140,000 260,000 Net operating income (loss) $ 50,000 $ (40,000) $ 90,000 The company says that $60,000 of the fixed expenses being charged to Department A are sunk costs or allocated costs that will continue if the segment is discontinued. However, if Department A is discontinued the sales in Department B will drop by 18%. What is the financial advantage (disadvantage) of discontinuing Department A? Multiple Choice $(103,000) $(83,000) $(92,000) $(101,000)