8QS 23-13 Segment elimination LO P4ntsA division of a large company reports the Information shown below for a recent year. Variable costs and direct fixed costs areavoidable, and 40% of the Indirect fixed costs are avoidable. Based on this Information, should the division be eliminated?eBookSalesVariable costsFixed costsDirectIndirect$ 275,000199,37541,25068,750HintOperating loss口eferences$ (34,375)1-a. Compare the amounts of total revenues and total avoidable expenses.1-b. Based on this information, should the division be eliminated?Complete this question by entering your answers in the tabs below.Required 1A Required 18Compare the amounts of total revenues and total avoidable expenses.RevenuesAvoidable expensesRevenues are greater than (less than) avoidable expenses by

Sure. Revenues are greater than avoidable expenses by $6,883.0.Here's the breakdown:Revenues:…

Answered: 8 QS 23-13 Segment elimination LO P4…

Financial & Managerial Accounting

14th Edition

ISBN:9781337119207

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter24: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 24.2BE

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Problem 6-19 (Algo) Variable Costing Income Statement; Reconciliation [LO,6-1, LO6-2, LO6-3] During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 $1,220,000 $1,830,000 780,000 1,170,000 440,000 313,000 $ 127,000 Sales (@ $61 per unit) Cost of goods sold (@ $39 per unit) Gross margin Selling and administrative expenses* Net operating income * *$3 per unit variable; $253,000 fixed each year. The company's $39 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($450,000 ÷ 25,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Units produced Units sold Year 1 25,000 20,000 Year 2 25,000 30,000 660,000 343,000 $ 317,000 $7 10 4 18 $ 39 Required: 1. Using variable costing, what is the unit product cost for both years? 2. What is the variable costing net operating income…
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QS 18-4 (Algo) Measuring costs using high-low method LO P1 The following information is available for a company's maintenance cost over the last seven months. Month Units Produced June 110 July 170 August 138 September 160 October 220 November December 250 70 Maintenance Cost $ 5,050 6,850 5,650 6,550 8,350 9.250 3,850 Using the high-low method, estimate both the fixed and variable components of its maintenance cost. High-Low method - Calculation of variable cost per unit produced Total cost at the high point Variable costs at the high point: Volume at the high point Variable cost per unit produced Total variable costs at the high point Total fixed costs Total cost at the low point Variable costs at the low point: Volume at the low point: Variable cost per unit produced Total variable costs at the low point Total fixed costs
hsd.4
Question:49 Brush Industries reports the following information for May: Sales Fixed cost of goods sold Variable cost of goods sold Fixed selling and administrative costs Variable selling and administrative costs $ 9,50,000 1,10,000 2,60,000 1,10,000 1,35,000 Calculate the operating income for May under absorption costing? a. $690,000 b. $335,000 c. $555,000 d. $580,000
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Exercise 19-15 (Algo) Absorption costing and overproduction LO C1 A manufacturer reports direct materials of $6 per unit, direct labor of $3 per unit, and variable overhead of $5 per unit. Fixed overhead Is $156,000 per year, and the company estimates sales of 15,600 units at a sales price of $26 per unit for the year. The company has no beginning finished goods inventory. 1. If the company uses absorption costing, compute gross profit assuming (a) 15,600 units are produced and 15,600 units are sold and (b) 19,500 units are produced and 15,600 units are sold. 2. If the company uses variable costing, how much would contribution margin differ if the company produced 19,500 units instead of producing 15,600? Assume the company sells 15,600 units. Hint: Calculations are not required. Complete this question by entering your answers in the tabs below. Required 1 Required 2 If the company uses absorption costing, compute gross profit assuming (a) 15,600 units are produced and 15,600 units are…
Exercise 19-22A (Algo) Converting variable costing Income to absorption costing Income LO A2 A manufacturer reports the following Information for the past three years. Variable costing income Beginning finished goods inventory (units) Ending finished goods Inventory (units) Fixed overhead (FOH) per unit Year 1 $125,000 130,400 Year 3 $131,450 1,788 1,200 1,700 1,200 1,388 $ 3.20 $3.20 $3.20 Compute Income for each of the three years using absorption costing. Hint Fixed overhead In Inventory equals the FOH per unit * Units In Inventory. (Amounts to be deducted should be indicated with a minus sign.) Answer is not complete. Year 1 Year 2 Year 3 Variable costing income $125.000 $ 130,400 $131,450 Fixad overhead in beginning FG Inventory 0 Fixed overhead in ending FG Inventory Absorption costing income
Problem 6-21 (Algo) Segment Reporting and Decision Making [LO6-4] Vulcan Company's contribution format income statement for June is as follows: Vulcan Company Income Statement For the Month Ended June 30 Sales. Variable expenses Contribution margin Fixed expenses Net operating income $ 800,000 300,000 500,000 460,000 $ 40,000 Management wants to improve profits and gathered the following data: a. The company is divided into two sales territories-Northern and Southern. The Northern Territory recorded $400,000 in sales and $208,000 in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern Territory. Fixed expenses of $172,000 and $88,000 are traceable to the Northern and Southern Territories, respectively. The rest of the fixed expenses are common to the two territories. b. The company is the exclusive distributor for two products-Paks and Tibs. Sales of Paks and Tibs totaled $125,000 and $275,000, respectively, in the Northern territory…
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Exercise 6-13A (Algo) Outsourcing decision affected by opportunity costs LO 6-3 Rooney Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,300 containers follows. Unit-level materials Unit-level labor Unit-level overhead Product-level costs* Allocated facility-level costs $ 5,100 6,700 3,400 8,700 27,500 *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Rooney for $2.50 each. Required a. Calculate the total relevant cost. Should Rooney continue to make the containers? b. Rooney could lease the space it currently uses in the manufacturing process. If leasing would produce $12,300 per month, calculate the total avoidable costs. Should Rooney continue to make the containers? a. Total relevant cost a. Should Rooney continue to make the containers? b. Total avoidable cost Yes b. Should Rooney continue to make the…

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