Decision to Discontinue a Product
On the basis of the following data, the general manager of...
Decision to Discontinue a Product
On the basis of the following data, the general manager of
Foremost Footwear Inc. decided to discontinue Children’s Shoes
because it reduced income from operations by $10,000. What is the
flaw in this decision if it is assumed that fixed costs would not
be materially affected by the discontinuance?
Foremost Footwear Inc.
Product-Line Income Statement
For the Year Ended April 30, 20Y7
Children's Shoes
Men's Shoes
Women's Shoes
Total
Sales
$165,000
$300,000
$500,000
$965,000
Costs...
On the basis of the following data, the general manager of
Featherweight Shoes Inc. decided to...
On the basis of the following data, the general manager of
Featherweight Shoes Inc. decided to discontinue Children’s Shoes
because it reduced income from operations by $17,000.
Featherweight Shoes Inc.
Product-Line Income Statement
For the Year Ended April 30, 20Y8
1
Children’s Shoes
Men’s Shoes
Women’s Shoes
Total
2
Sales
$235,000.00
$300,000.00
$500,000.00
$1,035,000.00
3
Costs of goods sold:
4
Variable costs
$130,000.00
$150,000.00
$220,000.00
$500,000.00
5
Fixed costs
41,000.00
60,000.00
120,000.00
221,000.00
6
Total cost of goods sold
$171,000.00...
On the basis of the following data, the general manager of
Featherweight Shoes Inc. decided to...
On the basis of the following data, the general manager of
Featherweight Shoes Inc. decided to discontinue Children’s Shoes
because it reduced income from operations by $17,000.
Featherweight Shoes Inc.
Product-Line Income Statement
For the Year Ended April 30, 20Y8
1
Children’s Shoes
Men’s Shoes
Women’s Shoes
Total
2
Sales
$235,000.00
$300,000.00
$500,000.00
$1,035,000.00
3
Costs of goods sold:
4
Variable costs
$130,000.00
$150,000.00
$220,000.00
$500,000.00
5
Fixed costs
41,000.00
60,000.00
120,000.00
221,000.00
6
Total cost of goods sold
$171,000.00...
On the basis of the following data, the general manager of
Featherweight Shoes Inc. decided to...
On the basis of the following data, the general manager of
Featherweight Shoes Inc. decided to discontinue Children’s Shoes
because it reduced income from operations by $17,000.
Featherweight Shoes Inc.
Product-Line Income Statement
For the Year Ended April 30, 20Y8
1
Children’s Shoes
Men’s Shoes
Women’s Shoes
Total
2
Sales
$235,000.00
$300,000.00
$500,000.00
$1,035,000.00
3
Costs of goods sold:
4
Variable costs
$130,000.00
$150,000.00
$220,000.00
$500,000.00
5
Fixed costs
41,000.00
60,000.00
120,000.00
221,000.00
6
Total cost of goods sold
$171,000.00...
Discontinue a Segment
Product AG52 has revenues of $193,800, variable cost of goods
sold of $115,600,...
Discontinue a Segment
Product AG52 has revenues of $193,800, variable cost of goods
sold of $115,600, variable selling expenses of $33,300, and fixed
costs of $59,900, creating a loss from operations of $15,000.
a. Prepare a differential analysis as of
October 7 to determine if Product AG52 should be continued
(Alternative 1) or discontinued (Alternative 2), assuming fixed
costs are unaffected by the decision. If an amount is zero, enter
"0". Use a minus sign to indicate a loss.
Analysis...
Product
Wham
Blam
sales
300,000
200,000
less variable cost
180,000
130,000
contribution margin
120,000
70,000
less...
Product
Wham
Blam
sales
300,000
200,000
less variable cost
180,000
130,000
contribution margin
120,000
70,000
less Fixed cost
90,000
60,000
Income (loss) from operations
30,000
10,000
Management is considering the discontinuance of the manufacture
and sale of Blam at the beginning of the current year. The
discontinuance would have no effect on the total fixed costs and
expenses or on the sales of Wham
What is the amount of change in net income for the current year
that will result...
Discontinue a Segment
Product A has revenue of $195,100, variable cost of goods sold
of $116,500,...
Discontinue a Segment
Product A has revenue of $195,100, variable cost of goods sold
of $116,500, variable selling expenses of $32,400, and fixed costs
of $61,400, creating a loss from operations of $15,200.
Prepare a differential analysis as of May 9, to determine
whether Product A should be continued (Alternative 1) or
discontinued (Alternative 2), assuming fixed costs are unaffected
by the decision. If an amount is zero, enter "0". For those boxes
in which you must enter subtracted or...
Discontinue a Segment
Product T has revenue of $193,800, variable cost of goods sold
of $115,800,...
Discontinue a Segment
Product T has revenue of $193,800, variable cost of goods sold
of $115,800, variable selling expenses of $33,800, and fixed costs
of $59,800, creating a loss from operations of $15,600.
Prepare a differential analysis as of May 9, to determine
whether Product T should be continued (Alternative 1) or
discontinued (Alternative 2), assuming fixed costs are unaffected
by the decision. If an amount is zero, enter "0". For those boxes
in which you must enter subtracted or...
Discontinue a Segment
Product AG52 has revenues of $193,000, variable cost of goods
sold of $113,700,...
Discontinue a Segment
Product AG52 has revenues of $193,000, variable cost of goods
sold of $113,700, variable selling expenses of $31,700, and fixed
costs of $58,200, creating a loss from operations of $10,600.
a. Prepare a differential analysis as of
October 7 to determine if Product AG52 should be continued
(Alternative 1) or discontinued (Alternative 2), assuming fixed
costs are unaffected by the decision. If an amount is zero, enter
"0". Use a minus sign to indicate a loss.
Differential...
Discontinue a product
or segment
French Hyros (pronounced Hero’s) is chain or fast food
restaurant specializing...
Discontinue a product
or segment
French Hyros (pronounced Hero’s) is chain or fast food
restaurant specializing in gyros with a French flavor profile. The
three following are the most popular gyros sold. Below is an
average store for one year.
Bellanger Depardieu Zidane Total
Sales $720,000 $2,330,000 $950,000 $4,000,000
Cost of gyros
Variable $520,000 $1,200,000 $360,000 $2,080,000
Fixed $120,000 $140,000 $160,000 $420,000
Total
COGS $640,000 $1,340,000 $520,000 $2,500,000
Gross
Margin $80,000 $990,000 $430,000 $1,500,000
Expenses
Variable $80,000 $90,000 $30,000
$200,000
Fixed $75,000 $150,000 $50,000
$275,000
Total
Expenses $155,000 $240,000 $80,000
$475,000
Income from
operations -$75,000 $750,000 $350,000 $1,025,000
Since the Bellanger
gyro is losing money should French Hyros discontinue the
Bellanger?
Write an essay discussing why...