Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss). Total $4,320,000 1,280,000 3,040,000 2,250,000 $ 790,000 Department. Hardware $ 3,170,000 860,000 2,310,000 1,430,000 $ 880,000 Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department? Linens $ 1,150,000 420,000 730,000 820,000 $ (90,000) A study indicates $372,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 13% decrease in the sales of the Hardware Department.

Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss). Total $4,320,000 1,280,000 3,040,000 2,250,000 $ 790,000 Department. Hardware $ 3,170,000 860,000 2,310,000 1,430,000 $ 880,000 Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department? Linens $ 1,150,000 420,000 730,000 820,000 $ (90,000) A study indicates $372,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 13% decrease in the sales of the Hardware Department.

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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Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) Total $ 4,360,000 1,375,000 2,985,000 2,220,000 $ 765,000 Department Hardware $ 3,160,000 962,000 2,198,000 1,320,000 $ 878,000 Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department? Linens $ 1,200,000 413,000 787,000 900,000 $ (113,000) A study indicates that $371,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 13% decrease in the sales of the Hardware Department.
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Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Total Department Hardware Linens Sales $4,200,000 $3,090,000 $1,110,000 Variable expenses 1,240,000 840,000 400,000 Contribution margin 2,960,000 2,250,000 710,000 Fixed expenses 2,300,000 1,470, 000 830,000 Net operating income (loss) $ 660,000 $ 780,000 $ (120,000) A study indicates that $379,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 11% decrease in the sales of the Hardware Department. Required: What is the financial advantage ( disadvantage) of discontinuing the Linens Department?
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The following is the year ended data for Tiger Company: Sales Revenue $58,000 Cost of Goods Manufactured 21,000 Beginning Finished Goods Inventory 1,100 Ending Finished Goods Inventory 2,200 Selling Expenses 15,000 Administrative Expenses 3,900 What is the gross profit? A. $22,100 B. $38,100 C. $19,200 D.
Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) Total $ 4,130,000 1,223,000 2,907,000 2,160,000 $ 747,000 Department Hardware $ 3,060,000 814,000 2,246,000 1,310,000 $936,000 Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department? Financial (disadvantage) Linens $ 1,070,000 409,000 661,000 850,000 $ (189,000) A study indicates that $377,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 18% decrease in the sales of the Hardware Department.