3. Dropping or Retaining a Segment Bed & Bath, a retailing company, has two departments, Hardware and Linens. The company's most recent monthly contribution format income statement follows: Department Total Hardware Linens 2$ 1,050,000 : $4,100,000 1,396,000 3,050,000 981,000 Sales 415,000 Variable expenses Contribution margin Fixed expenses 2,704,000 2,240,000 2,069,000 1,390,000 635,000 850,000 Net operating income (loss) : $ 464,000 679,000 2$ (215,000) A study indicates that $374,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 12% decrease in the sales of the Hardware Department. Required: If the Linens Department is dropped, what will be the effect on the net operating income of the company as a whole? Show your computations. %24 %24

3. Dropping or Retaining a Segment Bed & Bath, a retailing company, has two departments, Hardware and Linens. The company's most recent monthly contribution format income statement follows: Department Total Hardware Linens 2$ 1,050,000 : $4,100,000 1,396,000 3,050,000 981,000 Sales 415,000 Variable expenses Contribution margin Fixed expenses 2,704,000 2,240,000 2,069,000 1,390,000 635,000 850,000 Net operating income (loss) : $ 464,000 679,000 2$ (215,000) A study indicates that $374,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 12% decrease in the sales of the Hardware Department. Required: If the Linens Department is dropped, what will be the effect on the net operating income of the company as a whole? Show your computations. %24 %24

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

Please help me
Contribution Margin and Contribution Margin Ratio For a recent year, McDonald's Company-owned restaurants had the following sales and expenses (in millions): Sales $40,800 Food and packaging $11,004 Payroll 10,300 Occupancy (rent, depreciation, etc.) 12,376 General, selling, and administrative expenses 5,900 $39,580 Income from operations $1,220 Assume that the variable costs consist of food and packaging, payroll, and 40% of the general, selling, and administrative expenses. a. What is McDonald's contribution margin? Round to the nearest million. (Give answer in millions of dollars.)$________ million b. What is McDonald's contribution margin ratio?________% c. How much would income from operations increase if same-store sales increased by $2,400 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million.$_________ million
Please do not give solution in image format thanku
hsd.1
Please do not give solution in image format thanku
Please do not give solution in image format thanku
Please do not give solution in image format thanku
Please do not give solution in image format thanku
(Discontinue or Continue Operating Segment) Beauty and Ugly, a retailing company, has two departments, Hardware and Linens. A recent monthly contribution format income statement for the company follows: Department TotalHardwareLinensSalesP4,000,000
A28
Please do not give solution in image format thanku
Please do not give solution in image format and show all calculation thanku