4 Anderson Publishing has two divisions: Book Publishing and Magazine Publishing. The Magazine division has been losing money for the last five years and Anderson is considering eliminating that division. Anderson's information about the two divisions is as follows Sales Revenue Cost of Goods sold Variable manufacturing costs Fixed manufacturing costs Gross Profit Operating Expenses Variable operating expenses Fixed operating expenses Net income Book Division $ 7,960,000 2,160,000 1,093,500 $4,706,500 151,000 2,932,000 $1,623,500 Contribution Margin Segment Margin Magazine Division $3,367,700 Book Division Complete this question by entering your answers in the tabs below. 1,076,800 1,241,200 $1,049,700 221,500 1,197,900 $ (369,700) Only 20 percent of the fixed manufacturing costs and 60 percent of the fixed operating expenses are directly attributable to each division. The remaining are common or shared between the two divisions. Required: Required 1 Required 2 Compute the contribution margin and segment margin for each division and the company as a whole. Magazine Division 1. Compute the contribution margin and the segment margin of each division and the company as a whole. 2. What will be the impact on net income if the Magazine Division is eliminated? Total Total $ 11,327,700 3,236,800 2,334,700 $5,756,200 Required 2 > 372,500 4,129,900 $ 1,253,000
4 Anderson Publishing has two divisions: Book Publishing and Magazine Publishing. The Magazine division has been losing money for the last five years and Anderson is considering eliminating that division. Anderson's information about the two divisions is as follows Sales Revenue Cost of Goods sold Variable manufacturing costs Fixed manufacturing costs Gross Profit Operating Expenses Variable operating expenses Fixed operating expenses Net income Book Division $ 7,960,000 2,160,000 1,093,500 $4,706,500 151,000 2,932,000 $1,623,500 Contribution Margin Segment Margin Magazine Division $3,367,700 Book Division Complete this question by entering your answers in the tabs below. 1,076,800 1,241,200 $1,049,700 221,500 1,197,900 $ (369,700) Only 20 percent of the fixed manufacturing costs and 60 percent of the fixed operating expenses are directly attributable to each division. The remaining are common or shared between the two divisions. Required: Required 1 Required 2 Compute the contribution margin and segment margin for each division and the company as a whole. Magazine Division 1. Compute the contribution margin and the segment margin of each division and the company as a whole. 2. What will be the impact on net income if the Magazine Division is eliminated? Total Total $ 11,327,700 3,236,800 2,334,700 $5,756,200 Required 2 > 372,500 4,129,900 $ 1,253,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Anderson Publishing has two divisions: Book Publishing and Magazine Publishing. The Magazine division has been losing money for
the last five years and Anderson is considering eliminating that division. Anderson's information about the two divisions is as follows:
Sales Revenue
Cost of Goods sold
Variable manufacturing costs
Fixed manufacturing costs
Gross Profit
Operating Expenses
Variable operating expenses
Fixed operating expenses
Net income
Book Division
$ 7,960,000
2,160,000
1,093,500
$4,706,500
151,000
2,932,000
$ 1,623,500
Contribution Margin
Segment Margin
Book Division
Magazine Division
$ 3,367,700
Complete this question by entering your answers in the tabs below.
1,076,800
1,241,200
$ 1,049,708
Only 20 percent of the fixed manufacturing costs and 60 percent of the fixed operating expenses are directly attributable to each
division. The remaining are common or shared between the two divisions
Required:
Required 1 Required 2
Compute the contribution margin and segment margin for each division and the company as a whole.
Magazine
Division
Forquired 1
221,500
1,197,900
$ (369,700)
1. Compute the contribution margin and the segment margin of each division and the company as a whole.
2. What will be the impact on net income if the Magazine Division is eliminated?
Total
Total
$ 11,327,700
3,236,800
2,334,708
$5,756,200
Required 2 >
372,500
4,129,900
$ 1,253,800
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