Bed & Bath, a retaling company, has two departments-Hardware and Linens. The company's most recent monthly contribution formatIncome statement follows:DepartnentLinens$ 4, 290,000 $ 3,130,000 $ 1,160,000414, 000TotalHardwaresalesvariable expenses1,364,00095e, eeeContribution marginFixed expenses2,926, 0002,160, 0002,180, e001,318, eee870, 000 s (104, eee)746, 00085e, e00Net operating incone (loss)766,000 $A study indicates that $378.000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continueeven if the Linens Department is dropped. in addition, the ellmination of the Linens Department will result in a 14% decrease in thesales of the Hardware Department.Required:What is the financial advantage (disadvantage) of discontinuing the Linens Department?

Name: Bed & Bath, a retaling company, has two departments-Hardware and Line
Uploaded: 2024-03-20T06:32:49.000Z
Channel: Bartleby
Description: Bed & Bath, a retaling company, has two departments-Hardware and Linens. The company's most recent monthly contribution formatIncome statement follows:DepartnentLinens$ 4, 290,000 $ 3,130,000 $ 1,160,000414, 000TotalHardwaresalesvariable expenses1,3

SOLUTION- CONTRIBUTION IS THE AMOUNT OF EARNINGS REMAINING AFTER ALL DIRECTS COST HAVE BEEN…

Business

Accounting

Bed & Bath, a retailing company. has two departments-Hardware and Linens. The company's most recent monthly contribution format Income statement follows: Departnent Total Hardware Linens $ 4,290, 000 S 3,130,000 S 1,160, 000 95e, 000 2,180, e00 1,310,000 sales 1,364,000 2,926, 00 variable expenses 414, 000 746,000 850,000 Contribution nargin Fixed expenses 2,160,000 Net operating incone (loss) 766,000 S 870,000 s (104,000) A study Indicates that $378.000 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 14% decrease in the sales of the Hardware Department. Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department?

Bed & Bath, a retailing company. has two departments-Hardware and Linens. The company's most recent monthly contribution format Income statement follows: Departnent Total Hardware Linens $ 4,290, 000 S 3,130,000 S 1,160, 000 95e, 000 2,180, e00 1,310,000 sales 1,364,000 2,926, 00 variable expenses 414, 000 746,000 850,000 Contribution nargin Fixed expenses 2,160,000 Net operating incone (loss) 766,000 S 870,000 s (104,000) A study Indicates that $378.000 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 14% decrease in the sales of the Hardware Department. Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

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 $ 4,000,000 $ 3,000,000 $ 1,000,000 Variable expenses 1,300,000 900,000 400,000 Contribution margin 2,700,000 2,100,000 600,000 Fixed expenses 2,200,000 1,400,000 800,000 Net operating income (loss) $ 500,000 $ 700,000 $ (200,000) A study indicates that $340,000 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 10% decrease in the sales of the Hardware Department. Based on the visualization: The relevant fixed cost in the decision to discontinue the Linens Department is: multiple choice 1 $340,000. $460,000. $800,000. $600,000. The total foregone contribution margin associated with dropping…
Accounting Alta Ltd. is manufacturing three products : A, B and C. The costs of manufacture are as follows Fixed costs of Alta Ltd. is $15,000. Calculate profit and do a CVP Analysis for Alta Ltd. Products Raw Material Labour Overheads Sales A 16,000 14,000 10,000 60,000 B 20,000 17,000 12,000 70,000 C 26,000 18,000 14,000 80,000
Sandhill Company makes three models of tasers. Information on the three products is given below. Tingler Shocker Stunner Sales $296,000 $504,000 $200,000 Variable expenses 151,700 207,900 138,200 Contribution margin 144,300 296,100 61,800 Fixed expenses 117,800 231,800 95,000 Net income $26,500 $64,300 $(33,200) Fixed expenses consist of $300,000 of common costs allocated to the three products based on relative sales, as well as direct fixed expenses unique to each model of $29,000 (Tingler), $80,600 (Shocker), and $35,000 (Stunner). The common costs will be incurred regardless of how many models are produced. The direct fixed expenses would be eliminated if that model is phased out. James Watt, an executive with the company, feels the Stunner line should be discontinued to increase the company's net income. (a) Compute current net income for Sandhill Company. Net income A
Bed & Bath, a retalling 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 $ 4,220,000 1,220,000 3,000,000- 2,340,000 5.660,000 Department Hardware $ 3,200,000 819,000 2,381,000 1,490,000 $ 891,000 Linens $1,020,000 401,000 619,000 850,000 $ (231,000) A study indicates $375,000 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 17% decrease in the sales of the Hardware Department. Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department? Financial (disadvantage)
Following is relevant information for Philly's Sandwich Shop, a small business that serves sandwiches: Total fixed cost per month Variable cost per sandwich $1,020.00 1.50 Sales price per sandwich 5.75 During the month of June, Philly's sold 580 sandwiches. Required: Complete the contribution margin income statement for the month of June. Note: Round your final answers to the nearest whole dollar. Philly's Sandwich Shop Contribution Margin Income Statement Month of June Contribution margin Net Operating income
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 $4,250,000 1,215,000 3,035,000 2,330,000 $ 705,000 Department Hardware $ 3,100,000 803,000 2,297,000 1,480,000 $ 817,000 Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department? Linens $1,150,000 412,000 738,000 850,000 $ (112,000) A study indicates that $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 18% decrease in the sales of the Hardware Department.
Please help me
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 $ 4,070,000 1,273,000 2,797,000 2,220,000 $ 577,000 Financial (disadvantage) I Department Hardware $ 3,060,000 870,000 2,190,000 1,370,000 $ 820,000 Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department? A study indicates that $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 18% decrease in the sales of the Hardware Department. Linens $ 1,010,000 403,000 607,000 850,000 $ (243,000)
TARGET SALES UNITS Determine the number of cakes a bakery must sell to gerate $1,100 in profit based on the following information: Price per cake $14.71 Variable Cost per cake Ingredients $2.25 Direct Labor $ 1.02 Overhead $.25 Fixed Cost Per Month $4,476
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.
Crane Trivia Co. manufactures and sells two trivia products, the Square Trivia Game and the Round Trivia Game. Last quarter's operating profits, by product, and for the company as a whole, were as follows: Square Round Total Sales revenue $11,000 $6,860 $17,860 Variable expenses 5,000 2,910 7,910 Contribution margin 6,000 3,950 9,950 Fixed expenses 2,750 4,200 6,950 Operating income $ 3,250 $(250) $ 3,000 Forty percent of the Round Game's fixed costs could have been avoided if the game had not been produced or sold. If the Round Game had been discontinued before the last quarter, what would operating income have been for the company as a whole? Operating income without round $
Maryland Novelties Company produces and sells souvenir products. Monthly income statements for two activity levels are provided below: Unit volumes Revenue Less cost of goods sold Gross margin Less operating expenses Salaries and commissions Advertising expenses Administrative expenses Total operating expenses Net income Required 22,000 units $ 165,000 66,000 $ 99,000 22,000 33,000 13,750 68,750 $ 30,250 Required A Required B Required C 33,000 units $ 247,500 99,000 $ 148,500 a. Identify each of the following expenses as fixed, variable, or mixed. b. Use the high-low method to separate the mixed costs into variable and fixed components. c. Prepare a contribution margin income statement at the 22,000-unit level. 27,500 33,000 13,750 74,250 $ 74,250 Complete this question by entering your answers in the tabs below.