ABC Company operates three segments, of which two of them were
showing a loss.
Segment 1...
ABC Company operates three segments, of which two of them were
showing a loss.
Segment 1
Segment 2
Segment 3
Total
Sales……………………
$100,000
$200,000
$300,000
$600,000
Less Cost of goods sold
80,000
150,000
200,000
430,000
Gross margin………….
20,000
50,000
100,000
170,000
Less Operating expenses
30,000
70,000
70,000
170,000
Net operating income….
$(10,000)
$(20,000)
$30,000
$0
For each segment, 40% of its cost
of goods sold and operating expenses are variable expenses and the
remaining balances are fixed...
Section 2:
Assume the following Balance Sheet for a company:
BALANCE SHEET
ASSETS
Cash $ 5,000...
Section 2:
Assume the following Balance Sheet for a company:
BALANCE SHEET
ASSETS
Cash $ 5,000
Accounts Receivable $125,000
Inventory $200,000
Land $70,000
Buildings $200,000
Less: Accumulated Depreciation $100,000
Total Assets $500,000
LIABILITIES AND EQUITY
Accounts Payable $100,000
Income Tax Payable $50,000
Mortgage Loan $200,000
Common Stock $100,000
Retained Earnings $50,000
Total Liabilities and Equity $500,000
Compute the current ratio for this company.
Group of answer choices
3.25
2.20
3.30
2.17
Using the same Balance Sheet from the prior question,...
Total
Store A
Store B
Sales
$1,000,000
$400,000
$600,000
Variable expenses
580,000
160,000
420,000
Contribution margin...
Total
Store A
Store B
Sales
$1,000,000
$400,000
$600,000
Variable expenses
580,000
160,000
420,000
Contribution margin
420,000
240,000
180,000
Traceable fixed expenses
300,000
100,000
200,000
Store segment margin
120,000
140,000
-20,000
Common fixed expenses
50,000
20,000
30,000
Net operating income
$70,000
$120,000
($50,000)
Due to its poor showing, consideration is being given to closing
Store B. Studies show that if Store B is closed, one-fourth of its
traceable fixed expenses will continue unchanged. The studies also
show that closing Store...
Westerville Company
reported the following results from last year’s operations:
Sales
$
1,500,000
Variable
expenses
500,000...
Westerville Company
reported the following results from last year’s operations:
Sales
$
1,500,000
Variable
expenses
500,000
Contribution
margin
1,000,000
Fixed
expenses
700,000
Net operating
income
$
300,000
Average
operating assets
$
1,000,000
At the beginning of
this year, the company has a $200,000 investment opportunity with
the following cost and revenue characteristics:
Sales
$
300,000
Contribution
margin ratio
60
% of sales
Fixed
expenses
$
132,000
The company’s minimum
required rate of return is 10%.
13. If the company
pursues...
Taylor Company has current sales of 1,000 units, at a selling
price of $190 per unit,...
Taylor Company has current sales of 1,000 units, at a selling
price of $190 per unit, variable costs per unit of $76 and fixed
expenses of $96,000. The company believes sales will increase by
300 units, if the company introduces sales commissions as an
incentive for the sales staff. The change will decrease the selling
price to $175 per unit, increase variable cost per unit to $100 and
decrease fixed expenses by $20,000. What is the net operating
income after...
Given the following: Income Statement (End of Year, 2017)
Industry % of sales Net Sales 500,000...
Given the following: Income Statement (End of Year, 2017)
Industry % of sales Net Sales 500,000 100 Less: Inventory (B)
60,000 12 Gross Purchases 200,000 40 Less: discounts 20,000 4 Net
Purchases 180,000 36 Total Goods Available 240,000 48 Less:
inventory (E) 75,000 10 Total Cost of Goods Sold 165,000 38 Gross
Margin: 335,000 62 Less: Variable Expenses Sales Commissions
130,000 26 Deliveries 5,000 1 135,000 27 Contribution Margin
200,000 35 Less: Fixed Expenses Rent 50,000 10 Salaries 95,000 12...
Keep-or-Drop for Service Firm, Complementary Effects,
Traditional Analysis
Devern Assurance Company provides both property and automobile...
Keep-or-Drop for Service Firm, Complementary Effects,
Traditional Analysis
Devern Assurance Company provides both property and automobile
insurance. The projected income statements for the two products are
as follows:
Property
Insurance
Automobile
Insurance
Sales
$4,200,000
$12,000,000
Less variable expenses
3,830,000
9,600,000
Contribution margin
$370,000
$2,400,000
Less direct fixed expenses
400,000
500,000
Segment margin
$(30,000)
$1,900,000
Less common fixed expenses (allocated)
100,000
200,000
Operating income (loss)
$(130,000)
$1,700,000
The president of the company is considering dropping the
property insurance. However, some policyholders...
Vulcan Company’s contribution format income statement for June
is as follows:
Vulcan Company
Income Statement
For...
Vulcan Company’s contribution format income statement for June
is as follows:
Vulcan Company
Income Statement
For the Month Ended June 30
Sales
$
900,000
Variable expenses
400,000
Contribution margin
500,000
Fixed expenses
450,000
Net operating income
$
50,000
Management is disappointed with the company’s performance and is
wondering what can be done to improve profits. By examining sales
and cost records, you have determined the following:
The company is divided into two sales territories—Northern and
Southern. The Northern Territory recorded...