Please help me with show all calculation thanku A study has been conducted to determine if one of the departments in Tempest Corporation should bediscontinued. The contribution margin in the department is $60,000 per year. Fixed expenses charged to thedepartment are $75,000 per year. It is estimated that $45,000 of these fixed expenses could be eliminated ifthe department is discontinued. These data indicate that if the department is discontinued, the company'soverall net operating income would:O decrease by $26,000 per yearO increase by $26,000 per yearO decrease by $15,000 per yearO increase by $15,000 per year

The differential analysis is performed to compare the different alternatives available with the…

Answered: A study has been conducted to determine…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 12MC: Youngstown Construction plans to discontinue its rooting segment. Last year, this segment generated...

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A study has been conducted to determine if one of the departments in Carry Corporation should be discontinued. The contribution margin in the department is $80,000 per year. Fixed expenses charged to the department are $95,000 per year. It is estimated that $50,000 of these fixed expenses could be eliminated if the department is discontinued. These data indicate that if the department is discontinued, the yearly financial advantage (disadvantage) for the company would be: Multiple Choice O ($30,000) ($15,000) $15,000 $30,000
Carla Vista Corporation is considering a eliminating a department that has incurred losses over the past several years. The department has a contribution margin of $33000 per year. The fixed costs charged to the department total $39000. $17000 of the fixed costs is avoidable. If the department is eliminated, what would be the effect on the corporation's operating income? O $39000 decrease O $16000 decrease O $22000 increase O $17000 increase
Patel Corporation is considering discontinuing one of its product lines. This product line generates a contribution margin of $330,000 per year. Fixed expenses allocated to the product line are $420,000 per year. It is estimated that $255,000 of these fixed expenses could be eliminated if the product line is discontinued. Based on this data, what is the financial advantage or disadvantage of discontinuing the product line? Multiple Choice Financial disadvantage of $75,000 per year. Financial advantage of $165,000 per year. Financial advantage of $75,000 per year.
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Manor Homes plans to discontinue a segment which last year generated a contribution margin of $65,000 and incurred $40,000 in fixed costs. If the segment is discontinued, half of the fixed costs will not be avoided. If Manor Homes decides to discontinue this segment the overall effect on profits will be: - a decrease of $65,000 - a decrease of $25,000 - a decrease of $45,000 - an increase of $45,000
A company is planning to invest $75,000 (before taxes) in a personnel training program. The $75,000 outlay will be charged off as an expense by the firm this year (year 0). The returns estimated from the program in the form of greater productivity and a reduction in employee turnover are as follows (on an after-tax basis):Years 1–10: $7,500 per yearYears 11–20: $22,500 per yearThe company has estimated its cost of capital to be 15 percent. Assume that the entire $75,000 is paid at time zero (the beginning of the project). The marginal tax rate for the firm is 40 percent.Based on the NPV criterion, should the firm undertake the training program?
A company is planning to invest $75,000 (before taxes) in a personnel training program. The $75,000 outlay will be charged off as an expense by the firm this year (year 0). The returns estimated from the program in the form of greater productivity and a reduction in employee turnover are as follows (on an after-tax basis): Years 1–5: $7,500 per year Years 6–10: $22,500 per year The company has estimated its cost of capital to be 15 percent. Assume that the entire $75,000 is paid at time zero (the beginning of the project). The marginal tax rate for the firm is 40 percent. Complete the following table to compute the net present value (NPV) of the program. (Hint: When calculating cash flow for Year 0, consider the tax effects of charging off the initial outlay as an expense.) Year Cash Flow PV Interest Factor at 15% Present Value (PV) ($) ($) 0 1.00000 1 0.86957 2 0.75614 3 0.65752 4 0.57175 5…
Trebecker Construction plans to discontinue its roofing segment which last year generated a contribution margin of $65,000 and incurred $90,000 in fixed costs. If the segment is discontinued, half of the fixed costs will be avoided. What effect is expected to occur to the company’s overall profit? A decrease of $20,000 A decrease of $15,000 An increase of $15,000 An increase of $20,000 An increase of $30,000
The Carioco Company has two divisions that operate independently of one another. The financial data for the year 2022 reported the following results: Alpha Beta Sales $3,000,000 $2,500,000 Operating income 750,000 550,000 Taxable income 650,000 375,000 Investment 6,000,000 5,000,000 The company's desired rate of return is 10%. Income is defined as operating income. Required: What are the respective residual incomes for the Alpha and Beta Divisions? a. $150,000 and $50,000 b. $150,000 and $30,000 c. $50,000 and a negative $150,000 d. $30,000 and $50,000
A company is planning to invest $100,000 (before tax) in a personnel training program. The $100,000 outlay will be charged off as an expense by the firm this year (year 0). The returns from the program in the form of greater productivity and a reduction in employee turnover are estimated as follows (on an after-tax basis): Years 1-10: $10,000 per year Years 11-20: $22,000 per year The company has estimated its cost of capital to be 12 percent. Assume that the entire $100,000 is paid at time 0 (the beginning of the project). The marginal tax rate for the firm is 40 percent. Should the firm undertake the training program? Why or why not?
Hanshaben
A study has been conducted to determine if Product A should be dropped. Sales of the product total $500,000; variable expenses total $340,000. Fixed expenses charged to the product total $210,000. The company estimates that $60,000 of these fixed expenses are not avoidable even if the product is dropped. If Product A is dropped, the annual financial advantage (disadvantage) for the company of eliminating this product should be: Multiple Choice ($10,000) $10,000 ($50,000) $50,000 Next

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