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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 $ 7,900,000 2,100,000 1,087,500 $4,712,500 145,000 2,926,000 $ 1,641,500 Magazine Division $3,342,300 1,046,900 1,225,800 $ 1,069,600 212,700 1,194,600 $ (337,700) Total $ 11,242,300 3,146,900 2,313,300 $5,782,100 357,700 4,120,600 $ 1,303,800 Only 20 percent of the fixed manufacturing costs and 60 percent of the fixed operating expenses are directly attributable to each diuicions

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 $ 7,900,000 2,100,000 1,087,500 $4,712,500 145,000 2,926,000 $ 1,641,500 Magazine Division $3,342,300 1,046,900 1,225,800 $ 1,069,600 212,700 1,194,600 $ (337,700) Total $ 11,242,300 3,146,900 2,313,300 $5,782,100 357,700 4,120,600 $ 1,303,800 Only 20 percent of the fixed manufacturing costs and 60 percent of the fixed operating expenses are directly attributable to each diuicions

FINANCIAL ACCOUNTING
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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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 Required 1 Required 2 Sales revenue Variable costs Book Division $ 7,900,000 Complete this question by entering your answers in the tabs below. 2,100,000 1,087,500 $4,712,500 Manufacturing costs 145,000 2,926,000 $ 1,641,500 Onemtina avannen 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: 1. Present the financial information in the form of a segmented income statement (using the contribution margin approach). 2. What will be the impact on net income if the Magazine Division is eliminated? $ Book Division Magazine Division $ 3,342,300 Present the financial information in the form of a segmented income statement (using the contribution margin approach). Magazine Division 7,900,000 $ 2,100,000 145 000 < Prev 1,046,900 1,225,800 $ 1,069,600 3,342,000 212,700 1,194,600 $ (337,700) 1,046,900 212 700 2 of 4 Total $ 11,242,300 3,146,900 Total $ 11,242,300 www www www 3,146,900 2,313,300 $5,782,100 257 700 357,700 4,120,600 $ 1,303,800 Next >
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 Required 1 Required 2 Sales revenue Variable costs Book Division $ 7,900,000 Complete this question by entering your answers in the tabs below. 2,100,000 1,087,500 $4,712,500 Manufacturing costs 145,000 2,926,000 $ 1,641,500 Onemtina avannen 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: 1. Present the financial information in the form of a segmented income statement (using the contribution margin approach). 2. What will be the impact on net income if the Magazine Division is eliminated? $ Book Division Magazine Division $ 3,342,300 Present the financial information in the form of a segmented income statement (using the contribution margin approach). Magazine Division 7,900,000 $ 2,100,000 145 000 < Prev 1,046,900 1,225,800 $ 1,069,600 3,342,000 212,700 1,194,600 $ (337,700) 1,046,900 212 700 2 of 4 Total $ 11,242,300 3,146,900 Total $ 11,242,300 www www www 3,146,900 2,313,300 $5,782,100 257 700 357,700 4,120,600 $ 1,303,800 Next >
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