1. Prepare a contribution format income statement segmented by divisions.2-a. The Marketing Department believes increasing the West Division's monthly advertising by $24,000 will increase that division'ssales by 11%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if theproposal is implemented?2-b. Would you recommend the increased advertising?Complete this question by entering your answers in the tabs below.Req 1Req 2AReq 2BPrepare a contribution format income statement segmented by divisions.< Req 1Total CompanyEastReq 2A >DivisionCentralWest Exercise 6-11 (Algo) Segmented Income Statement [LO6-4]Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses as shown by its most recent monthlycontribution format income statement:SalesVariable expensesContribution marginFixed expensesNet operating income (loss)$ 1,535,000631,600903,400994,00$ (90,600)In an effort to resolve the problem, the company wants to prepare an income statement segmented by division. Accordingly, theAccounting Department provided the following information:SalesVariable expenses as a percentage of salesTraceable fixed expensesEast$ 375,000$ 287,00056%DivisionCentral$ 660,00026%$ 336,000West$ 500,00050%$ 205,000Required:1. Prepare a contribution format income statement segmented by divisions.2-a. The Marketing Department believes increasing the West Division's monthly advertising by $24,000 will increase that division'ssales by 11%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if theproposal is implemented?2-b. Would you recommend the increased advertising?

The contribution margin is calculated as the difference between the sales and variable costs. The…

1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department believes increasing the West Division's monthly advertising by $24,000 will increase that division's sales by 11%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented? 2-b. Would you recommend the increased advertising? Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B

1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department believes increasing the West Division's monthly advertising by $24,000 will increase that division's sales by 11%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented? 2-b. Would you recommend the increased advertising? Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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am. 103.
3. If management desires a minimum acceptable return on investment of 10%, determine the residual income for each division.
Assume a retailing company has two departments-Department A and Department B. The company's most recent contribution format income statement follows: Department A $ 350,000 120,000 230,000 140,000 Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) Multiple Choice O $(133,800) The company says that $110,000 of the fixed expenses being charged to Department B are sunk costs or allocated costs that will continue if the segment is discontinued. However, if Department B is discontinued the sales in Department A will drop by 6%. What is the financial advantage (disadvantage) of discontinuing Department B? O $(128,000) $(113,800) Total $ 800,000 320,000 480,000 400,000 $ 80,000 O $(124,000) Department B $ 450,000 200,000 250,000 260,000 $90,000 $ (10,000)
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Assume a retailing company has two departments-Department A and Department B. The company's most recent contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) Multiple Choice O The company says that $110,000 of the fixed expenses being charged to Department B are sunk costs or allocated costs that will continue if the segment is discontinued. However, if Department B is discontinued the sales in Department A will drop by 12%. What is the financial advantage (disadvantage) of discontinuing Department B? O O O $(148,000) $(152,000) $(147,600) Total $ 800,000 320,000 $(127,600) 480,000 400,000 $ 80,000 Department A Department B $ 350,000 $ 450,000 120,000 200,000 230,000 250,000 260,000 140,000 $ 90,000 $ (10,000)
H1.
Categorize each of the following activities as to which management responsibility it fulfills: planning, directing, or controlling. Some activities may fulfill more than one responsibility. (Select an "X" in the input field if the management responsibility is fulfilled. If the management responsibility is not fulfilled, leave the input field empty.) Question content area bottom Part 1 Activity Management Responsibility Planning Directing Controlling a. Management decides to increase sales growth by 20% next year. b. Management analyzes the impact of a recent advertising campaign by comparing budgeted sales to actual sales. c. Management reviews hourly sales reports to determine the level of staffing needed to staff the customer service desk. d. Management uses information on product costs to determine sales prices. e. To lower production costs, management moves production to China.
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