The following information relates to next year's projected
operating results of the Aluminum Division of Wroclaw...
The following information relates to next year's projected
operating results of the Aluminum Division of Wroclaw
Corporation:
Contribution margin......................
$1,500,000
Fixed expenses..............................
(1,700,000)
Net operating loss..........................
$(200,000)
If Aluminum Division is dropped, $1,000,000 of the above fixed
expenses would be eliminated. What will be the effect on Wroclaw's
profit next year if Aluminum Division is dropped instead of being
kept?
A) $500,000 decrease
B) $800,000 increase
C) $1,000,000 increase
D) $1,200,000 increase
Book Division
Magazine Division
Total
Sales Revenue
$
7,820,000
$
3,320,000
$
11,140,000
Cost of Goods...
Book Division
Magazine Division
Total
Sales Revenue
$
7,820,000
$
3,320,000
$
11,140,000
Cost of Goods sold
Variable costs
2,005,000
1,003,000
3,008,000
Fixed costs
77,700
202,000
279,700
Gross Profit
$
5,737,300
$
2,115,000
$
7,852,300
Operating Expenses
Variable
137,000
200,000
337,000
Fixed
3,918,000
2,191,000
6,109,000
Net income
$
1,682,300
$
(276,000
)
$
1,406,300
The variable operating expenses are directly attributable to the
division. Of the total fixed costs (manufacturing and operating),
$4,002,000 are shared between the divisions, allocated $2,813,000...
E12-15 Use
incremental analysis concerning elimination of division.
Veronica Mars, a recent
graduate of Bell's accounting...
E12-15 Use
incremental analysis concerning elimination of division.
Veronica Mars, a recent
graduate of Bell's accounting program, evaluated the operating
performance
of Dunn Company's six
divisions. Veronica made the following presentation to Dunn's board
of directors
and suggested the Percy
Division be eliminated. "If the Percy Division is eliminated," she
said, "our
total profits would increase
by $26,000."
The Other
Percy
Five Divisions
Division
Total
Sales
$1,664,200
$100,000
$1,764,200
Cost of goods sold
978,520
76,000
1,054,520
Gross Profit
685,680
24,000...
Problem 2:
Hallow Company has two divisions: North Division and South
Division. The following report is...
Problem 2:
Hallow Company has two divisions: North Division and South
Division. The following report is for the most recent operating
period:
North Division
South Division
Sales
$
235,000
$
192,000
Variable expenses
$
103,400
$
105,600
Traceable fixed expenses
$
80,000
$
58,000
Required:
a. Prepare a segmented income statement in the contribution
format for the company.
b. What is the North Division's break-even in sales dollars?
c. What is the South Division's break-even in sales dollars?
d. What...
Conrad Company is evaluating its two divisions, North Division
and South Division. Data for the North...
Conrad Company is evaluating its two divisions, North Division
and South Division. Data for the North Division include sales of
$530,000, variable costs of $290,000, and fixed costs of $260,000,
50% of which are traceable to the division. South Division’s data
include sales of $610,000, variable costs of $340,000 and fixed
costs of $290,000, 60% of which are traceable to the
division.
Required:
a) Prepare a segmented income statement showing the details for the
divisions and the company as a...
The Cook Corporation has two divisions--East and West. The
divisions have the following revenues and expenses:...
The Cook Corporation has two divisions--East and West. The
divisions have the following revenues and expenses:
East
West
Sales
$
550,000
$
489,500
Variable costs
198,000
258,500
Traceable fixed costs
169,500
194,400
Allocated common corporate costs
117,500
141,100
Net operating income (loss)
$
65,000
$
(104,500
)
The management of Cook is considering the elimination of the
West Division. If the West Division were eliminated, its traceable
fixed costs could be avoided. Total common corporate costs would be
unaffected by...
The Cook Corporation has two divisions--East and West. The
divisions have the following revenues and expenses:...
The Cook Corporation has two divisions--East and West. The
divisions have the following revenues and expenses:
East
West
Sales
$
580,000
$
474,000
Variable costs
180,000
229,300
Traceable fixed costs
172,500
208,000
Allocated common corporate costs
114,800
177,800
Net operating income (loss)
$
112,700
$
(141,100)
The management of Cook is considering the elimination of the
West Division. If the West Division were eliminated, its traceable
fixed costs could be avoided. Total common corporate costs would be
unaffected by...