A department of Company X attains sale of 50,00,000 at 75 percent of its normal capacity and its expenses are given below: Administration costs: (*) Office Salaries 900,000 General expenses 3 per cent of sales Depreciation 75,000 Rates and Taxes 90000 Selling Costs Salaries 9 per cent of sales Travelling expenses 6 per cent of sales Sales office expenses 3 per cent of sales General expenses 3 per cent of sales Distribution Costs Wages 150,000 Rent 1.5 per cent of sales Other expenses 4.5 per cent of sales PREPARE flexible administration, selling and distribution costs budget, operating at 100 per cent and 120 per cent of normal capacity.

Mitsu Division has the following results for the year:        Revenues            $1,080,000Variable expenses      440,000Fixed expenses         400,000Total divisional assets are $1,600,000.  The company's minimum required rate of return is 14 percent. What is the residual income for Scottso?

Assume a retailing company has two departments-Department A and Department B. The company's most recent contribution format income statement follows: Total Department A Department B $ 800,000 350,000 450,000 $ 350,000 250,000 Sales $ 450,000 Variable expenses Contribution margin 100,000 100,000 350,000 Fixed expenses 400,000 140,000 260,000 Net operating income (loss) $ 50,000 $ (40,000) $ 90,000 The company says that $60,000 of the fixed expenses being charged to Department A are sunk costs or allocated costs that will continue if the segment is discontinued. However, if Department A is discontinued the sales in Department B will drop by 18%. What is the financial advantage (disadvantage) of discontinuing Department A? Multiple Choice $(103,000) $(83,000) $(92,000) $(101,000)

The Consumer Division of Lewandowski Company has income from operations of $93,950 and assets of $367,000. The minimum acceptable return on assets is 8%. What is the residual income for the division?$fill in the blank 1

Noventis Corporation prepared the following estimates for the four quarters of the current year:     FirstQuarter SecondQuarter ThirdQuarter FourthQuarter Sales $ 1,275,000   $ 1,530,000   $ 1,785,000   $ 2,040,000   Cost of goods sold   434,000     514,000     584,000     634,000   Administrative costs   500,000     280,000     285,000     295,000   Advertising costs   0     140,000     0     0   Executive bonuses   0     0     0     104,000   Provision for bad debts   0     0     0     60,000   Annual maintenance costs   78,000     0     0     0       Additional Information First-quarter administrative costs include the $180,000 annual insurance premium. Advertising costs paid in the second quarter relate to television advertisements that will be broadcast throughout the entire year. No special items affect income during the year. Noventis estimates an effective income tax rate for the year of 40 percent.   Assuming that actual results do not vary from the…

Buckley Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. BUCKLEY COMPANY Income Statements for Year 2 Segment A   B   C Sales $ 330,000     $ 480,000     $ 500,000   Cost of goods sold   (242,000 )     (184,000 )     (190,000 ) Sales commissions   (30,000 )     (44,000 )     (44,000 ) Contribution margin   58,000       252,000       266,000   General fixed operating expenses (allocation of president’s salary)   (92,000 )     (92,000 )     (92,000 ) Advertising expense (specific to individual divisions)   (6,000 )     (20,000 )     0   Net income (loss) $ (40,000 )   $ 140,000     $ 174,000     Required Prepare a schedule of relevant sales and costs for Segment A. Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment A and (2) the elimination of Segment A. Options for required A table are: Advertising…

Division D of Saunders Company has sales of $350,000, cost of goods sold of $120,000, operating expenses of $58,000, and invested assets of $150,000. ​ The profit margin for Division D is   a. 49.1%   b. 42.9%   c. 83.4%   d. 65.7%

Adams Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated.  ADAMS COMPANY Income Statements for Year 2 Segment A   B   C Sales $ 166,000     $ 250,000     $ 265,000   Cost of goods sold   (126,000 )     (79,000 )     (77,000 ) Sales commissions   (22,000 )     (23,000 )     (32,000 ) Contribution margin   18,000       148,000       156,000   General fixed operating expenses (allocation of president’s salary)   (39,000 )     (50,000 )     (25,000 ) Advertising expense (specific to individual divisions)   (5,000 )     (15,000 )     0   Net income (loss) $ (26,000 )   $ 83,000     $ 131,000     Required Prepare a schedule of relevant sales and costs for Segment A. Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment A and (2) the elimination of Segment A.

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