Abel Company produces three versions of baseball bats: wood, aluminum, and hard rubber. A condensed segmented income statement for a recentperiod follows:WoodAluminumHard RubberTotal$500,000$200,000$65,00058,000$765,000523,000SalesVariable expensesContribution marginFixed expenses325,000140,000175,00060,0007,000242,00075,000132,000$110,00035,00022,000Net income (loss)$100,000$ 25,000$(15,000)Assume none of the fixed expenses for the hard rubber line are avoidable. What will be total net income if the line is dropped?Select one:a. $103,000O b. $140,000c. $125,000d. $105,000

Introduction:- Calculation of total net income if the line is dropped as follows under:-

Answered: Assume none of the fixed expenses for…

Assume none of the fixed expenses for the hard rubber line are avoidable. What will be total net income if the line is dropped? Select one: O a. $103,000 O b. $140,000 O c. $125,000 O d. $105,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: 6. A B C $70,000 $97,000 $23,000 Sales Variable costs 37,000 51,000 15,000 Contribution margin…

A: Cost is divided into two - Fixed Cost and Variable Cost. Variable cost is the one that changes as…

Q: With regards to Sing's price, cost, and product, what can be concluded from Scenario #2?

A: Decision about the scenarios is based upon the analysing of each scenarios and its impact on the…

Q: What will be Abado’s breakeven point in sales dollars ?

A: Break even refers to the situation of no profit and no loss. At the point of break even, business is…

Q: A В Total 100 $ 20 $ Sales Revenue 160 $ 260 Less V.C. 140 160 C.M. 80 20 100 Less Direct F.C.…

A: CVP format is the format wherein the costs are bifurcated into fixed and variable costs. Relevant…

Q: How do you calcuate the Lower-of-Cost-or-Market ? Problem : If cost is $13 Replacement…

A: Answer and calculations are given below

Q: Requirement 4. Which method would you recommend Tupper and Victory use to share the fees? I would…

A: Standalone Method :— In this method, Common cost is allocated between the performance obligations on…

Q: If the amount of contribution margin is not enough to cover all fixed expenses, the business will…

A: Contribution is the amount which is obtained after deducting the variable costs from sales.

Q: Your manager has asked you to determine the impact of certain costs on profits and communicate this…

A: Variable cost: Variable cost means cost which depends on number of units produced. Variable cost…

Q: Assume the following (1) total sales = $200,000 (2) breakeven sales = $120,000, and (3) total fixed…

A: The break-even sales are the sales where the business earns no profit or loss during the period. The…

Q: When the contribution margin is not sufficient to cover fixed expenses: Multiple Choice total profit…

A: The contribution margin is calculated as difference between sales and variable costs. The excess of…

Q: Need help with this question

A: Step 1: Introduction to the Gross ProfitThe gross profit is the surplus of sales revenue over the…

Q: Harold McWilliams owns and manages a general merchandise store in a rural area of Virginia. Harold…

A: Margin of safety is the difference between total sales revenue and the break-even point in sales…

Q: Pottery Ranch Inc. has been manufacturing its own finials for its curtain rods. The company is…

A: Making the choice to produce goods or services internally (make) or to buy them from outside vendors…

Q: Darius is the financial advisor for his company and is considering the purchase of excavation…

A: An investment opportunity's whole value is intended to be captured by the financial term known as…

Q: Prepare the incremental analysis for the decision to make or buy the lampshades. (Round answers to O…

A: The process of deciding whether to produce a product or service in-house or to acquire it from an…

Q: Determine expected profit: p= 0.95, present value of $1,260 for revenues, present value of $1,000…

A: The present value of revenue is $1,260. The present value of cost after increase is $1,110. The…

Q: The margin of safety in the Flaherty Company is $28,400. If the company's sales are $129,000 and its…

A: Break even sales = Total Sales - Margin of safety salesTherefore, we can get fixed cost by reducing…

Q: Assume that sales are predicted to be $15,000, the expected contribution margin is $6,000, and a net…

A: Break even point: It is calculated by dividing the fixed cost by the contribution margin ratio of…

Q: When the delivery price of the long forward contract is $65 and the actual price at the time of…

A: Forward Contract. Forward Contract is agreement entered into to buy or sell specified asset on a…

Question

Abel Company produces three versions of baseball bats: wood, aluminum, and hard rubber. A condensed segmented income statement for a recent
period follows:
Wood
Aluminum
Hard Rubber
Total
$500,000
$200,000
$65,000
58,000
$765,000
523,000
Sales
Variable expenses
Contribution margin
Fixed expenses
325,000
140,000
175,000
60,000
7,000
242,000
75,000
132,000
$110,000
35,000
22,000
Net income (loss)
$100,000
$ 25,000
$(15,000)
Assume none of the fixed expenses for the hard rubber line are avoidable. What will be total net income if the line is dropped?
Select one:
a. $103,000
O b. $140,000
c. $125,000
d. $105,000

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Discontinuing operations for a product or a service line

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Need answer of this Question with explanation
True (t) or False (f) ______ Use of LIFO provides a tax benefit in an industry where unit costs tent to decrease as production increases.
Find the break-even point and the operating loss. Operating Expense Cost $49 $17 Break-even Point $? Reduced Price $52 Operating Loss $? Absolute Loss none
If accounting profit is $400,000 greater than economic profit, what do implicit costs equal?
h7
2. If I have a 100,000 sf building that has a 25% loss factor and gross rents are $1.50 psf, what are my net rents psf? a. $150,000 b. $1.5 c. $75,000 d. $2.00 e. There is not enough information to solve this f. None of the above
Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $ 255,000 178,500 76,500 107,000 (30,500) (a) Compute the income increase or decrease from eliminating this segment. (b) Should the segment be eliminated?
Calculating Break-Even In each of the following cases, find the unknown variable.Ignore taxes. Accounting Break-Even Unit Price Unit Variable Cost Fixed Costs Depreciation 95,800 $ 42 $ 30 $ 820.000 ? 143,806 ? 64 2,750,000 $ 1.150.000 7,835 97 ? 245,000 105,000