工LL%24Epsilon Company is trying to decide whether or not to close Division A. The total contribution margin forDivision A is $450,000 and the total fixed costs are $600,000, of which $200,000 are allocated and would haveto be absorbed by other divisions in the company.What is the effect on total net income for Epsilon if Division A is closed?Select one:O $50,000 decreaseO $150,000 decreaseO none of theseO $150,000 increaseClear my choiceNext pagepageype here to searchメ直 of581米&002.%23249.1/41/23.4.R.

Contribution Margin Lost if Division A is closed -$4,50,000 Fixed Cost decreased if Division A is…

Answered: 工 LL %24 Epsilon Company is trying to…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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QUESTION 7 Quiet Corp. currently makes 2000 subcomponents a year in one of its factories. The unit costs to produce are: Description Per unit Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead $4 4 2 IMI An outside supplier has offered to provide Quiet Corp. with the 2000 subcomponents at a $17 per unit price. Fixed overhead is not avoidable. If Quiet Corp. decides to buy from the outside supplier, the impact to net income will be ? If positive, enter the number, if negative, place a-sign before your number
QUESTION 20 Total Per unit Sales Revenue (30,000 units) $750,000 $25 Variable Costs A $450,000 $15 Contribution Margin $300,000 Fixed Costs $150,000 Operating Income $150,000 Now assume that this company's selling price per unit and variable cost per unit stay the same while total fixed costs increases by $100,000 per year. This company's breakeven point will: O increase O decrease remain the same
None
13 XYZ Company is considering eliminating a department that has an annual contribution margin of $35,000 and $70,000 in annual fixed costs. Of the fixed costs, $20,000 cannot be avoided. The annual financial advantage (disadvantage) for the company of eliminating this department would be $15,000 ($35,000) $35,000 ($15,000)
20 Sales Contribution margin Fixed costs (1) Compute the degree of operating leverage (DOL) for each company. (2) Which company is expected to produce a greater percent increase in income from a 10% increase in sales? Required 1 Required 2 $ 7,825,600 6,375,600 4,989,600 Complete this question by entering your answers in the tabs below. Skittles's DOL Starburst's DOL Compute the degree of operating leverage (DOL) for each company. Degree of Operating Leverage $ Contribution margin $ Numerator: $ 3,828,000 1,428,000 918,000 Answer is complete but not entirely correct. 6,375,600 1,428,000 I $ 1 $ Denominator: Income II 2,910,000 = = 2,836,000 = Ratio Degree of Operating Leverage 2.25 0.49
Robinson Products Company has two service departments (S1 and S2) and two production departments (P1 and P2). The distribution of each service department's efforts (In percentages) to the other departments is: From 51 52 S1 S1 S2 P1 P2 20% $ 250,000 80,000 67,000 205,000 To S2 20% P1 • P2 30% ? The direct operating costs of the departments (including both variable and fixed costs) are: ?% 48 Production department 1 Production department 2 Required: 1. Determine the total cost of P1 and P2 using the direct method. 2. Determine the total cost of P1 and P2 using the step method. 3. Determine the total cost of P1 and P2 using the reciprocal method. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the total cost of P1 and P2 using the direct method. (Do not round intermediate calculations.) Total Cost Allocated Required 3
QUESTION 10 Randall has received a special order for 4300 units of its product at a special price of $20. The product normally sells for $34 and has the following manufacturing costs: AZ Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Per unit 2 3 3 2 Assume that Randall has sufficient capacity to fill the order. If Randall accepts the order, what effect will the order have on the company's short-term profit? *** If a decrease, place a sign before your answer. For example, a decrease of $1,000 would be answered -1,000.
10:13W WSP □ s25-7 Annual leasing fee for software Annual maintenance of trucks Priscilla Smiley manages a fleet of 250 delivery trucks for Daniels Corporation. Smiley must decide whether the company should outsource the fleet management function. If she outsources to Fleet Management Services (FMS), FMS will be responsible for maintenance and scheduling activities. This alternative would require Smiley to lay off her five employees. However, her own job would be secure; she would be Daniels's liaison with FMS. If she continues to manage the fleet, she will need fleet-management software that costs $9,500 per year to lease. FMS offers to manage this fleet for an annual fee of $300,000. Smiley performed the following analysis: Total annual salaries of five laid- off employees Fleet Management Service's annual fee Total differential cost of ⠀⠀⠀ со Retain In- House $ 9,500 147,000 185,000 $ 341,500 1409/ 1480 C QAA Outsource to FMS Word >> Bit Q5G 71% Ę $ 300,000 Difference $9,500…
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