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
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...
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...
Pherrell Corporation has two divisions: Bulb Division and Seed
Division. The following report is for the...
Pherrell Corporation has two divisions: Bulb Division and Seed
Division. The following report is for the most recent operating
period:
Bulb Division Seed Division
Sales $ 238,500 $ 159,000
Variable expenses $ 62,010 $
33,390
Traceable fixed expenses $
144,480 $ 65,190
Common fixed expense $ 30,180 $
20,120
The common fixed expenses have
been allocated to the divisions on the basis of sales.
Required: a. What is the Bulb Division’s break-even in sales
dollars? b. What is the Seed...
Therrell Corporation has two divisions: Bulb Division and Seed
Division. The following report is for the...
Therrell Corporation has two divisions: Bulb Division and Seed
Division. The following report is for the most recent operating
period: Bulb Division Seed Division Sales $ 231,000 $ 154,000
Variable expenses $ 60,060 $ 32,340 Traceable fixed expenses $
161,760 $ 70,840 Common fixed expense $ 29,460 $ 19,640 The common
fixed expenses have been allocated to the divisions on the basis of
sales. Required:
a. What is the Bulb Division’s break-even in sales dollars?
b. What is the Seed...
Therrell Corporation
has two divisions: Bulb Division and Seed Division. The following
report is for the...
Therrell Corporation
has two divisions: Bulb Division and Seed Division. The following
report is for the most recent operating period:
Bulb Division
Seed Division
Sales
$
313,500
$
209,000
Variable
expenses
$
81,510
$
43,890
Traceable fixed
expenses
$
132,940
$
94,050
Common fixed
expense
$
29,880
$
19,920
The common fixed
expenses have been allocated to the divisions on the basis of
sales.
Required:
a. What is the Bulb
Division’s break-even in sales dollars?
b. What is the Seed...