the most recent year follow: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Total $480,000 Hiking $340,000 Fashion $140,000 368,000 235,000 133,000 112,000 105,000 7,000 76,000 38,000 38,000 $36,000 $67,000 $(31,000) Assuming fixed costs remain unchanged, how would discontinuing the Fashion line affect operating income? A. Increase in total operating income of $112,000 B. Decrease in total operating income of $7,000 C. Decrease in total operating income of $140,000 D. Increase in total operating income of $29,000

the most recent year follow: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Total $480,000 Hiking $340,000 Fashion $140,000 368,000 235,000 133,000 112,000 105,000 7,000 76,000 38,000 38,000 $36,000 $67,000 $(31,000) Assuming fixed costs remain unchanged, how would discontinuing the Fashion line affect operating income? A. Increase in total operating income of $112,000 B. Decrease in total operating income of $7,000 C. Decrease in total operating income of $140,000 D. Increase in total operating income of $29,000

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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The Biscuits Crunch Company had the following information available regarding last year's operations: Sales (100,000 units) Variable costs Contribution margin Fixed costs Net Income $200,000 100,000 100,000 50,000 50,000 If sales were to increase by 200 units, what would be the effect on net income? A) 400 increase B) 200 increase C) 100 increase D) 200 loss E) 150 increase
A segment has the following data: Sales $790000 Variable expenses 345000 Fixed expenses 550000 What will be the incremental effect on net income if this segment is eliminated, assuming the fixed expenses will be allocated to profitable segments? $345000 increase $445000 decrease Cannot be determined from the data provided $5750 decrease
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Assume a retailing company has two departments-Department A and Department B. The company's most recent contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) Multiple Choice O The company says that $110,000 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? O O O $(148,000) $(152,000) $(147,600) Total $ 800,000 320,000 $(127,600) 480,000 400,000 $ 80,000 Department A Department B $ 350,000 $ 450,000 120,000 200,000 230,000 250,000 260,000 140,000 $ 90,000 $ (10,000)
The following is yearly information on two main sources for the company profit: Row material Labor cost Unit made Demand price cost PRODUCT A $30 $100 3000 1850 250 PRODUCT B $45 $78 2500 2100 170 The fixed cost is estimated to be $1000 annually. Based on the above information find the following: 1- The company yearly profit 2- Use goal seek to find the following a. At what PRODUCT B demand both products will generate the same revenuc? b. How much they should produce from each Product A and B, to reach a profit of $500,00, if the demand of them is equal to .75 of the production and Product A should be 50% of Product B. 3- If the company will sell the same amount from Product A and Product B which represents 65% for Product A and 76% for Production B, how much they should produce from both the get profit of $750,000
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Consider the following Income Statement. Assets were $500,000. What is the ROA? Sales Variable expenses 6,000,000 Contribution margin 40% Fixed expenses:Traceable and controllable Segment performance margin 3,400,000 Fixed expenses:Traceable NOT controllable 11% Segment margin Fixed expenses: Common 3% Net income Group of answer choices 16 20 4 None of the other answers are correct 3.2
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Subject: accounting