Managerial Accounting: Tools for Business Decision Making
7th Edition
ISBN: 9781118334331
Author: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Publisher: WILEY
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Textbook Question
Chapter 10, Problem 10.21E
Presenled below is selected financial information for two divisions of Samberg Brewing.
| Lager | Lite Lager | |
| Contribution margin | $500,000 | $ 300,000 |
| Controllable margin | 200,000 | (c) |
| Average operating assets | (a) | $1,200,000 |
| Minimum |
(b) | 11% |
| 16% | (d) | |
| Residual income | $100,000 | $ 204,000 |
Instructions
Supply the missing information for the lettered items.
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Presented below is selected financial information for two divisions of Samberg Brewing.Supply the missing information for the lettered items. (Round minimum rate of return and ROI to 1 decimal place, e.g. 10.5% and round average operating assets to 0 decimal places e.g. 58,971.)
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Â
Lager
Â
Lite Lager
Contribution margin
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$499,700
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Â
Â
$299,500
Â
Â
Controllable margin
Â
199,300
Â
Â
Â
Â
Â
 (c)
Average operating assets
Â
$Â
Â
 (a)
Â
$1,200,000
Â
Â
Minimum rate of return
Â
Â
 %
 (b)
Â
11
 %
Â
Return on investment
Â
20
 %
Â
Â
Â
 %
 (d)
Residual income
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$100,400
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Â
Â
$204,400
Zachary Transport Company divides its operations into four divisions. A recent income statement for its West Division follows.
ZACHARY TRANSPORT COMPANY
West Division
Income Statement for Year 3
Revenue
$ 690,000
(540,000)
(69,000)
(89,000)
(59,000)
(149,000)
Salaries for drivers
Fuel expenses
Insurance
Division-level facility-sustaining costs
Companywide facility-sustaining costs
Net loss
$(216,000)
Required
a. By how much would companywide income increase or decrease if West Division is eliminated? Should West Division be eliminated?
b. Assume that West Division is able to increase its revenue to $780,000 by raising its prices. Determine the amount of the increase or
decrease that would occur in companywide net income if the segment were eliminated. Should West Division be eliminated if
revenue were $780,000?
c. What is the minimurn amount of revenue required to justify continuing the operation of West Division?
Complete this question by entering your answers in the tabs below.…
Zachary Company operates three segments Income statements for the segments imply that profitability could be improved if Segment
A were eliminated.
ZACHARY COMPANY
Income Statements for Year 2
Segment
Sales
Cost of goods sold
Sales commissions
Contribution margin
General fixed operating expenses (allocation of president's salary)
Advertising expense (specific to individual divisions)
Net income (loss)
Required
a. Prepare a schedule of relevant sales and costs for Segment A
A
$ 168,000
(126,000)
(20,000)
22,000
(34,000)
(6,000)
B
$ 235,000
(79,000)
(32,000)
124,000
(51,000)
(19,000)
$ (18,000)
$ 54,000
$ 253,000
(82,000)
(28,000)
143,000
(34,000)
$ 109,000
b. Prepare comparative income statements for the company as a whole under two alternatives (1) the retention of Segment A and (2)
the elimination of Segment A
Complete this question by entering your answers in the tabs below..
Required A Required B
Prepare a schedule of relevant sales and costs for Segment A.
Relevant Revenue and Cost…
Chapter 10 Solutions
Managerial Accounting: Tools for Business Decision Making
Ch. 10 - Prob. 1QCh. 10 - The following purposes are part of a budgetary...Ch. 10 - How may a budget report for the second quarter...Ch. 10 - Ken Bay questions the usefulness of a master sales...Ch. 10 - Under what circumstances may a static budget be an...Ch. 10 - A flexible budget is really a series of static...Ch. 10 - The static manufacturing overhead budget based on...Ch. 10 - A static overhead budget based on 40,000 direct...Ch. 10 - Megan Pedigo is confused about how a flexible...Ch. 10 - Call Company has prepared a graph of flexible...
Ch. 10 - The flexible budget formula is fixed costs 50,000...Ch. 10 - What is management by exception? What criteria may...Ch. 10 - What is responsibility accounting? Explain the...Ch. 10 - Prob. 14QCh. 10 - Distinguish between controllable and...Ch. 10 - How do responsibility reports differ from budget...Ch. 10 - Prob. 17QCh. 10 - Distinguish among the three types of...Ch. 10 - Prob. 19QCh. 10 - Prob. 20QCh. 10 - Prob. 21QCh. 10 - Prob. 22QCh. 10 - Prob. 23QCh. 10 - Prob. 24QCh. 10 - Prob. 25QCh. 10 - Prob. 26QCh. 10 - For the quarter ended March 31, 2017, Croix...Ch. 10 - Data for Croix Company are given in BE10-1. In the...Ch. 10 - In Rooney Company, direct labor is 20 per hour....Ch. 10 - Gundy Company expects to produce 1,200,000 units...Ch. 10 - Data for Gundy Company are given in BE10-4. In...Ch. 10 - In the Assembly Department of Hannon Company,...Ch. 10 - Torres Company accumulates the following summary...Ch. 10 - For the year ending December 31, 2017, Cobb...Ch. 10 - Prob. 10.9BECh. 10 - Prob. 10.10BECh. 10 - Prob. 10.11BECh. 10 - Prob. 10.12BECh. 10 - Wade Company estimates that it will produce 6,000...Ch. 10 - In Pargo Company's flexible budget graph, the...Ch. 10 - Prob. 10.3DICh. 10 - Prob. 10.4DICh. 10 - Connie Rice has prepared the following list of...Ch. 10 - Crede Company budgeted selling expenses of 30,000...Ch. 10 - Myers Company uses a flexible budget for...Ch. 10 - Using the information in E10-3. assume that in...Ch. 10 - Fallon Company uses flexible budgets to control...Ch. 10 - The actual selling expenses incurred in March 2017...Ch. 10 - Appliance Possible Inc. (AP) is a manufacturer of...Ch. 10 - Rensing Groomers is in the dog-grooming business....Ch. 10 - As sales manager, Joe Batista was given the...Ch. 10 - Chubbs Inc.'s manufacturing overhead budget for...Ch. 10 - UrLink Company is a newly formed company...Ch. 10 - Venetian Company has two production departments....Ch. 10 - Fey Company's Organization chart includes the...Ch. 10 - The Mixing Department manager of Malone Company is...Ch. 10 - Horatio Inc. has three divisions which are...Ch. 10 - The Sports Equipment Division of Harrington...Ch. 10 - The South Division of Wiig Company reported the...Ch. 10 - The Dinkle and Frizell Denial Clinic provides both...Ch. 10 - The Ferrell Transportation Company uses a...Ch. 10 - Presented below is selected information for three...Ch. 10 - Presenled below is selected financial information...Ch. 10 - Bumblebee Company estimates that 300,000 direct...Ch. 10 - Zelmer Company manufactures tablecloths. Sales...Ch. 10 - Ratchet Company uses budgets in controlling costs....Ch. 10 - Clarke Inc. operates the Patio Furniture Division...Ch. 10 - Optimus Company manufactures a variety of tools...Ch. 10 - Durham Company uses a responsibility reporting...Ch. 10 - Sentinel Industries has manufactured prefabricated...Ch. 10 - CURRENT DESIGNS The Current Designs staff has...Ch. 10 - Green Pastures is a 400-acre farm on the outskirts...Ch. 10 - Prob. 10.2BYPCh. 10 - Prob. 10.3BYPCh. 10 - The manufacturing overhead budget for Fleming...Ch. 10 - Ethics Case American Products Corporation...Ch. 10 - Considering Your Costs and Benefits Preparing a...
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