Question

**Question 4**

Gator Corporation manufactures several types of accessories. For
the year, the gloves and mittens line had sales of $495,000,
variable expenses of $363,000, and fixed expenses of $148,000.
Therefore, the gloves and mittens line had a net loss of $16,000.
If Gator eliminates the line, $39,000 of fixed costs will remain.
Prepare an analysis showing whether the company should eliminate
the gloves and mittens line. *(Enter negative amounts
using either a negative sign preceding the number e.g. -45 or
parentheses e.g. (45).)*

Continue |
Eliminate |
Net IncomeIncrease (Decrease) |
|||||

Sales | $ | $ | $ | ||||

Variable costs | |||||||

Contribution margin | |||||||

Fixed costs | |||||||

Net income / (Loss) | $ | $ | $ |

The analysis indicates that Gator should
eliminate/not eliminate the gloves and mittens line. |

Answer #1

Prepare an analysis showing whether the company should eliminate
the gloves and mittens line. *(Enter negative amounts
using either a negative sign preceding the number e.g. -45 or
parentheses e.g. (45).)*

Continue |
Eliminate |
Net IncomeIncrease (Decrease) |
|||||

Sales | $495000 | $0 | -495000 | ||||

Variable costs | -363000 | 0 | 363000 | ||||

Contribution margin | 132000 | 0 | -132000 | ||||

Fixed costs | -148000 | -39000 | 109000 | ||||

Net income / (Loss) | -16000 | -39000 | -23000 |

The analysis indicates that Gator should
not eliminate the gloves and mittens line. |

Gator Corporation manufactures several types of accessories. For
the year, the gloves and mittens line had sales of $501,000,
variable expenses of $367,000, and fixed expenses of $149,000.
Therefore, the gloves and mittens line had a net loss of $15,000.
If Gator eliminates the line, $38,000 of fixed costs will remain.
Prepare an analysis showing whether the company should eliminate
the gloves and mittens line. (Enter negative amounts using either a
negative sign preceding the number e.g. -45 or parentheses...

Lisah, Inc., manufactures golf clubs in three models. For the
year, the Big Bart line has a net loss of $10,000 from sales
$200,000, variable costs $180,000, and fixed costs $30,000. If the
Big Bart line is eliminated, $20,000 of fixed costs will remain.
Prepare an analysis showing whether the Big Bart line should be
eliminated. (Enter negative amounts using either a
negative sign preceding the number e.g. -45 or parentheses e.g.
(45).)
Continue
Eliminate
Net Income
Increase (Decrease)
Sales...

Brislin Company has four operating divisions. During the first
quarter of 2017, the company reported aggregate income from
operations of $218,700 and the following divisional results.
Division
I
II
III
IV
Sales
$250,000
$198,000
$499,000
$447,000
Cost of goods sold
195,000
194,000
298,000
250,000
Selling and administrative expenses
70,300
62,000
57,000
49,000
Income (loss) from operations
$ (15,300)
$ (58,000)
$144,000
$148,000
Analysis reveals the following percentages of variable costs in
each division.
I
II
III
IV
Cost of goods...

Concord Golf Accessories sells golf shoes, gloves, and a
laser-guided range-finder that measures distance. Shown below are
unit cost and sales data.
Pairs of
Shoes
Pairs of
Gloves
Range-
Finder
Unit sales price
$102
$28
$245
Unit variable costs
58
12
201
Unit contribution margin
$44
$16
$44
Sales mix
38
%
43
%
19
%
Fixed costs are $588,064.
Verify that the mix of units to be sold at the break-even point for
each product line will generate a...

Jessica Simpson, a recent graduate of Duncan accounting program,
evaluated the operating performance of Duncan's Company’s six
divisions. Jessica made the following presentation to Duncan's
board of directors and suggested the Jackson Division be
eliminated. “If the Jackson Division is eliminated,” she said, “our
total profits would increase by $26,100.”
The Other
Five Divisions
Jackson
Division
Total
Sales
$1,663,000
$100,900
$1,763,900
Cost of goods sold
977,300
76,800
1,054,100
Gross profit
685,700
24,100
709,800
Operating expenses
528,400
50,200
578,600
Net income...

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 $26,500.”
The Other
Five Divisions
Percy
Division
Total
Sales
$1,663,000
$100,000
$1,763,000
Cost of goods sold
978,100
76,800
1,054,900
Gross profit
684,900
23,200
708,100
Operating expenses
529,000
49,700
578,700
Net income...

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 $25,900.” The Other Five Divisions Percy Division
Total Sales $1,665,000 $100,600 $1,765,600 Cost of goods sold
978,500 76,600 1,055,100 Gross profit 686,500 24,000 710,500
Operating expenses 526,900 49,900 576,800 Net income...

The following CVP income statements are available for Blanc
Company and Noir Company. Blanc Company Noir
Company Sales $455,000 $455,000 Variable costs 273,000 227,500
Contribution margin 182,000 227,500 Fixed costs 159,250 204,750 Net
income $22,750 $22,750
Assuming that sales revenue increases by 20%, prepare a CVP
income statement for each company. (Enter negative
amounts using either a negative sign preceding the number e.g. -45
or parentheses e.g. (45).)
Blanc Company
Noir Company
Sales
$Enter a dollar amount
$Enter a dollar...

Lily Company manufactures toasters. For the first 8 months of
2020, the company reported the following operating results while
operating at 75% of plant capacity: Sales (358,400 units)
$4,375,000 Cost of goods sold 2,595,840 Gross profit 1,779,160
Operating expenses 837,760 Net income $941,400 Cost of goods sold
was 70% variable and 30% fixed; operating expenses were 80%
variable and 20% fixed. In September, Lily receives a special order
for 21,700 toasters at $7.97 each from Luna Company of Ciudad
Juarez....

Exercise 7-15 (Video)
Your answer is partially correct. Try again.
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 $26,600.”
The Other
Five Divisions
Percy
Division
Total
Sales
$1,664,000
$100,500
$1,764,500
Cost of goods sold
978,500
76,700
1,055,200
Gross profit...

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