Bruce Company recently reduced its advertising budget. All other costs and revenues were unchanged. Select the response that Indicates the impact of the advertising cuts on the company's break-even point and margin of safety. Margin of Safety Increase Decrease Decrease Increase Break-even Point A) Increase 8) Decrease C) Increase D) Decrease Multiple Choice O C

Bruce Company recently reduced its advertising budget. All other costs and revenues were unchanged. Select the response that Indicates the impact of the advertising cuts on the company's break-even point and margin of safety. Margin of Safety Increase Decrease Decrease Increase Break-even Point A) Increase 8) Decrease C) Increase D) Decrease Multiple Choice O C

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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Activity-Based Management, Nonvalue-Added CostsDanna Martin, president of Mays Electronics, was concerned about the end-of-the year marketingreport that she had just received. According to Larry Savage, marketing manager, a price decreasefor the coming year was again needed to maintain the company’s annual sales volume of integratedcircuit boards (CBs). This would make a bad situation worse. The current selling price of $18 perunit was producing a $2-per-unit profit—half the customary $4-per-unit profit. Foreign competitors kept reducing their prices. To match the latest reduction would reduce the price from $18 to$14. This would put the price below the cost to produce and sell it. How could these firms sell forsuch a low price? Determined to find out if there were problems with the company’s operations,Danna decided to hire a consultant to evaluate the way in which the CBs were produced and sold.After two weeks, the consultant had identified the following activities and costs:Setting…
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Discontinue a Segment Product AG52 has revenues of $193,100, variable cost of goods sold of $115,300, variable selling expenses of $32,100, and fixed costs of $60,400, creating a loss from operations of $14,700. a. Prepare a differential analysis as of October 7 to determine if Product AG52 should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are unaffected by the decision. If an amount is zero, enter "0". Use a minus sign to indicate a loss. Differential Analysis Continue Product AG52 (Alt. 1) or Discontinue Product AG52 (Alt. 2) October 7 Continue Product AG52 (Alternative 1) Discontinue Product AG52 (Alternative 2) Differential Effect on Income (Alternative 2) Revenues $fill in the blank 90a9a2fd8063fea_1 $fill in the blank 90a9a2fd8063fea_2 $fill in the blank 90a9a2fd8063fea_3 Costs: Variable cost of goods sold fill in the blank 90a9a2fd8063fea_4 fill in the blank 90a9a2fd8063fea_5 fill in the blank…
Discontinue a Segment Product Tango has revenue of $1,150,000, variable cost of goods sold of $850,000, variable selling expenses of $275,000, and fixed costs of $125,000, creating an operating loss of $(100,000). a. Prepare a differential analysis as of February 13 to determine if Product Tango should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are unaffected by the decision. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. Differential Analysis Continue Product Tango (Alt. 1) or Discontinue Product Tango (Alt. 2) February 13 Revenues Costs: Variable cost of goods sold Variable selling and admin. expenses Fixed costs Profit (Loss) Continue Discontinue Product Product Tango Tango (Alternative 1) (Alternative 2) 0000 Differential Effects (Alternative 2)
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Oriole Company's actual results reveal that it was profitable in the sale of its star product: a high-end spot-cleaning vacuum for upholstery. But it was not nearly as profitable as management had hoped. Oriole's actual income statement and master budget income statement are as follows. In order to keep the focus on product costs, SG&A costs were omitted. Units sold Revenues Variable costs DM DL Variable-MOH Contribution margin Fixed-MOH Operating income DM DL Input Variable-MOH Fixed-MOHI (a) Here are the company's standard cost cards for each product cost. Units sold Revenues Variable costs DM DL Variable-MOH Actual Results 10,000 $1,670,000 Contribution margin Fixed-MOH 560,500 Operating income 216,000 130,500 763,000 Your answer is correct. 306,000 Quantity Standards 3.0 yards $457,000 $ 1.6 hours Prepare a flexible budget for Oriole Company so management can evaluate the company's actual performance using a more appropriate benchmark. 1.6 hours 1.6 hours Flexible Budget Master…
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