Question 9.11When Rosana, CFO of Hydie Inc., first evaluated the segmented income statement below, he flew into his usual rage:"When are we having losses in our product lines, I would rather eliminate them."Product LinesTotalUVS75,000$47,000$28,000Sales$250,000$100,000$75,000$35.000$40,000$37,000Variable expenses$119,000$37,500Contribution margin$130,500$62,500Traceable fixed expenses*$98,000$31,000$30,000$32.900$400$4,400S(6,400)Common expenses, allocated$18,000$10,500Operating income (loss)$13.500S17.500)*These traceable expenses could be eliminated if the product lines to which they are traced were discontinued.Required:Recommend which segments, if any, should be eliminated. Prepare a report in good form to support your answer. Show allthe necessary calculations.

Management accounting is widely used by the management, government, and individuals to make various…

1When Rosana, CFO of Hydie Inc., first evaluated the segmented income statement below, he flew into his usual rage: "When are we having losses in our product lines, I would rather eliminate them." Product Lines Total U V $100,000 $37.500 Sales $250,000 $75,000 $75,000 $35.000 $40,000 $37,000 $47,000 $28,000 Variable expenses $119.000 Contribution margin $130,500 S62,500 Traceable fixed expenses* $98,000 $31,000 $30,000 Common expenses, allocated $32,900 $18.000 $10,500 $4.400 Operating income (loss) -$400 $13,500 SI7.500) $16,400) *These traceable expenses could be eliminated if the product lines to which they are traced were discontinued. Required: Recommend which segments, if any, should be eliminated. Prepare a report in good form to support your answer. Show all the necessary calculations.

1When Rosana, CFO of Hydie Inc., first evaluated the segmented income statement below, he flew into his usual rage: "When are we having losses in our product lines, I would rather eliminate them." Product Lines Total U V $100,000 $37.500 Sales $250,000 $75,000 $75,000 $35.000 $40,000 $37,000 $47,000 $28,000 Variable expenses $119.000 Contribution margin $130,500 S62,500 Traceable fixed expenses* $98,000 $31,000 $30,000 Common expenses, allocated $32,900 $18.000 $10,500 $4.400 Operating income (loss) -$400 $13,500 SI7.500) $16,400) *These traceable expenses could be eliminated if the product lines to which they are traced were discontinued. Required: Recommend which segments, if any, should be eliminated. Prepare a report in good form to support your answer. Show all the necessary calculations.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Question 6 Veronica Mars, a recent graduate of Bell’s accounting program, evaluated the operating performance of Marigold Company’s six divisions. Veronica made the following presentation to Marigold’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 $27,000.” The OtherFive Divisions PercyDivision Total Sales $1,665,000 $100,000 $1,765,000 Cost of goods sold 978,300 76,600 1,054,900 Gross profit 686,700 23,400 710,100 Operating expenses 528,100 50,400 578,500 Net income $158,600 $ (27,000 ) $131,600 In the Percy Division, cost of goods sold is $60,100 variable and $16,500 fixed, and operating expenses are $29,200 variable and $21,200 fixed. None of the Percy Division’s fixed costs will be eliminated if the division is discontinued.
Teck my A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector industry. Supply the missing data in the table below: (Loss amounts should be indicated by a minus sign. Do not round your intermediate calculations.) Sales Net operating income Average operating assets Return on investment (ROI) Minimum required rate of return: Percentage Dollar amount Residual income Company A Company B Company C $ 320,000 $ 690,000 $ 560,000 $ 36,000 $ 154,000 $ 147,000 21 % 17 % % 16% % 15 % $ 58,000 $ 7,000
Exercise 12-9 Return on Investment (ROI) and Residual Income Relations [LO12-1, LO12-2] A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector industry. Supply the missing data in the table below: (Loss amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to nearest whole number.) Company A B C Sales $310,000 $770,000 $670,000 N. Oper Inc. $45,000 Avg. Oper. Ass. $165,000 $141,000 ROI 18% 17% % Minimum required rate of return: Percentage 16% % 13% Dollar…
When Mr. Ree Active, president and chief executive of Precious Products Inc., first saw the segmented income statement below, he flew into his usual rage: “When will we ever start showing a real profit? I'm starting immediate steps to eliminate those two unprofitable lines!” Product Lines Total U V W Sales $250,000 $100,000 $75,000 $75,000 Variable expenses 119,000 37,000 35,000 47,000 Contribution margin 131,000 63,000 40,000 28,000 Traceable fixed expenses* 98,000 31,000 37,000 30,000 Common expenses, allocated 32,900 18,000 10,500 4,400 Operating income (loss) $100 $14,000 -$7,500 -$6,400 *These traceable expenses could be eliminated if the product lines to which they are traced were discontinued. Calculate: Recommend which segments, if any, should be eliminated. Prepare a report in good form to support your answer.
Exercise 10-9 Return on Investment (ROI) and Residual Income Relations [LO10-1, LO10-2] A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector industry. Supply the missing data in the table below: (Loss amounts should be indicated by a minus sign. Round your percentage answers to nearest whole percent and other amounts to whole dollars.) Company A C Sales 500,000 800,000 2$ 600,000 Net operating income 2$ 45,000 Average operating assets 2$ 162,000 145,000 Return on investment (ROI) 23 % 19 % % Minimum required rate of return: Percentage 13 % % 14 % Dollar amount $ 50,000 Residual income 7,000
Question 3 You have been presented with the following information : Customer Perspective Actual Performance $6.5 mil Targets a. Total Sales $ 10 mil b. No. of Stock Returns 10 20 Internal Business Perspective a. Maintenance Costs b. No of Workers (production) Targets $200k Actual Performance $50k 30 15 Financial Perspective Actual Performance Targets $4mil a. Net Profit $1mil b. Asset Turnover ratio 15 times 20 times Innovation & Growth Perspective Targets $100k Actual Performance $20k a. Training Costs b. No of Staff (Marketing) 20 12 Other information obtained are customers are frequently complaining and cancelling orders and machines breakdowns. Required : i) Comment on the performance. ii) Propose suggestion to improve.
Exercise 10-9 (Algo) Return on Investment (ROI) and Residual Income Relations [LO10-1, LO10-2] A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector industry. Supply the missing data in the table below: (Loss amounts should be indicated by a minus sign. Do not round your intermediate calculations.) Company A Company B Company C Sales 360,000 710,000 550,000 24 50,000 Net operating income 157.000 143,000 Average operating assets 19 % 16 % Return on investment (ROI) Minimum required rate of return: 9% 14 % Percentage 51.000 Dollar amount 7 000 Residual income %24
< ces A family friend has asked for your help in analyzing the operations of three anonymous companies. Required: Supply the missing data in the tabulation below: (Negative amounts should be indicated with a minus sign.) Sales Net operating income Average operating assets Return on investment Minimum required rate of return: Percentage Dollar amount Residual income (loss) $ 10,870,000 $ 4,120,000 17 % 15 % Company B $ 6,800,000 $ 240,000 $ 15 % 320,000 % C $ 9,400,000 $ 5,200,000 $ 23 % 156,000 %
Help Save CI Sales Operating income Invested capital $8,100,000 648,000 9,000,000 In an effort to make something out of nothing and to salvage the current year's performance, Washburn was contemplating implementation of some or all of the following four strategies: a. Write off and discard $102,000 of obsolete inventory. The company will take a loss on the disposal. b. Accelerate the collection of $132,000 of overdue customer accounts receivable. c. Stop advertising through year-end and drastically reduce outlays for repairs and maintenance. These actions are expected to save the division $237,000 of expenses and will conserve cash resources. d. Acquire two competitors that are expected to have the following financial characteristics: 18 Projected Sales $4,740,000 6,990,000 Projected Operating Expenses $3,330,000 6,350, 000 Projected Invested Capital $11,750, 000 8,000,000 Anderson Manufacturing Palm Beach Enterprises 2-a. What effect would strategy (a) have had on the Reliable's…
Knowledge Check 01 Future Corporation has a single product; the product selling price is $100 and variable costs are $60. The company's fixed expenses are $10,000. What is the company's break-even point in sales dollars? $25,000 $2,500 O $250 $16,667
QUESTION 4 WT Ltd is a large company that consists of many divisions. The following are scenarios that need to be discussed: Scenario 1: Management decided to combine the packaging department into the retail department. Management created a detailed, formal plan for restructuring and the plan was announced publicly to all the shareholders on 30 September 2022. The company has a year end of 31 December 2022 The following costs will be incurred: Implementation costs R250 000 R 50 000 Future Operating Losses Advertising R 25 000 Discuss with reference to IAS37 whether the restructuring can be recognized as a provision. Indicate the amount at which it can be recognised? Scenario 2: An employee of RT Ltd was injured at work on 15 June 2022 due to faulty equipment, He is suing RT LTD. The lawyers have advised that it is probable that the company will be held liable and the most likely outcome would be R5 000 000. Discuss with reference to IAS37 whether the restructuring can be recognized as…
9 19 of 15 1:09:55 Ok ht Required information [The following information applies to the questions displayed below.) Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses Net operating income Average operating assets $ 1,200,000 420,000 780,000 600,000 $ 180,000 $ 600,000 At the beginning of this year, the company has a $137.500 Investment opportunity with the following cost and revenue characteristics: Sales Contribution margin ratio Fixed expenses $ 220,000 60 % of sales $ 99,000 The company's minimum required rate of return is 20%. 9. If the company pursues the investment opportunity and otherwise performs the same as last year, what ROI will it earn this year? Note: Round your percentage answer to 1 decimal place (i.e., 0.1234 should be considered as 12.3%)