CONTINUE OR DISCONTINUE OPERATING A BUSINESS SEGMENTBeth Neri Enterprises sells three products, Skinny, Bony and Thinny. Beth, the proprietor, isconcerned about the losses incurred by Thinny, and is considering to discontinue its production andsales.Sales and costs data about Beth Neri's three products are as follows:SkinnyP 5BonyP 7ThinnyP 9TotalP 21SalesVariable cost per unitContribution margin12429.Fixed cost per unitProfit (loss) per unitР 2P 2P( 1)P 3Fixed costs are allocated among the three products based on the floor area they occupy.Beth is thinking that if she would eliminate Thinny, its loss of P1 per unit would likewise beeliminated thereby increasing her total profit per unit from P3 [P2 + P2 - P1] to P4 [P2 + P2]. Is Beth'sanalysis correct?

Under keep or drop decision if the savings in cost is more than the revenue lost then the entity…

CONTINUE OR DISCONTINUE OPERATING A BUSINESS SEGMENT Beth Neri Enterprises sells three products, Skinny, Bony and Thinny. Beth, the proprietor, is concerned about the losses incurred by Thinny, and is considering to discontinue its production and sales. Sales and costs data about Beth Neri's three products are as follows: Skinny P 5 2 Bony P 7 Thinny P 9 7 Total P 21 12 Sales Variable cost per unit Contribution margin Fixed cost per unit Profit (loss) per unit 3 4 2 9 P 2 P 2 6 P 3 P( 1) Fixed costs are allocated among the three products based on the floor area they occupy. Beth is thinking that if she would eliminate Thinny, its loss of P1 per unit would likewise be eliminated thereby increasing her total profit per unit from P3 [P2 + P2 - P1] to P4 [P2 + P2]. Is Beth's analysis correct?

CONTINUE OR DISCONTINUE OPERATING A BUSINESS SEGMENT Beth Neri Enterprises sells three products, Skinny, Bony and Thinny. Beth, the proprietor, is concerned about the losses incurred by Thinny, and is considering to discontinue its production and sales. Sales and costs data about Beth Neri's three products are as follows: Skinny P 5 2 Bony P 7 Thinny P 9 7 Total P 21 12 Sales Variable cost per unit Contribution margin Fixed cost per unit Profit (loss) per unit 3 4 2 9 P 2 P 2 6 P 3 P( 1) Fixed costs are allocated among the three products based on the floor area they occupy. Beth is thinking that if she would eliminate Thinny, its loss of P1 per unit would likewise be eliminated thereby increasing her total profit per unit from P3 [P2 + P2 - P1] to P4 [P2 + P2]. Is Beth's analysis correct?

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

Please don't provide answer in image format thank you
Please don't answer in handwritten ..thanku
Please do not give solution in image format thanku
Holding other factors constant, a company's contribution margin per unit will increase with: O a. any decrease in quantity sold. O b. increase in its total fixed costs c. O c. any decrease in the selling price per unit O d. any increase in variable cost per unit O e. None answers given are correct. 14:0 nere to search W A a 10) ENG 15-04-2 prt sc delete home end $ 96 & 6. num 8. + backspace lock V E T P home D F J K enter pause C 1 shift end alt ctrl
Choose the product that will have the largest loss if sales greatly decrease. Letter Co. produces and sells two products, T and O. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 50,000 units of each product. Sales and costs for each product follow.
Subject : accounting
Please don't provide handwritten solution ....
Current business segment operations for Whitman, a mass retailer, are presented below. Merchandise Automotive Restaurant Total $500,000 $400,000 $100,000 $1,000,000 200,000 300,000 70,000 570,000 Sales Variable costs Fixed costs 50,000 250,000 Operating income (loss) $100,000 $100,000 $-20,000 $180,000 Management is contemplating the discontinuance of the Restaurant segment because "it is losing money." If this segment is discontinued, $30,000 of its fixed costs will be eliminated. In addition, Merchandise and Automotive sales will decrease 5% from their current levels. What will Whitman's total contribution margin be if the Restaurant segment is discontinued? Select one: a. $380,000 b. $367,650 X c. $160,000 d. $220,000 100,000 100,000
Marin Company makes several products, including canoes. The company reports a loss from its canoe segment (see below). All its variable costs are avoidable, and $330,000 of its fixed costs are avoidable. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $ 1,097, 600 784,000 313,600 376,000 $ (62,400) (a) Compute the income increase or decrease from eliminating this segment. (b) Should the segment be continued or eliminated?
Please do not give solution in image format ? And Fast Answering Please ? And Please explain proper steps by Step.
None
Classify costsSeymour Clothing Co. manufactures a variety of clothing types fordistribution to several major retail chains. The following costs areincurred in the production and sale of blue jeans: a. Shipping boxes used to ship ordersb. Consulting fee of $200,000 paid to industry specialist for marketingadvicec. Straight-line depreciation on sewing machines d. Salesperson's salary, $10,000 plus 2% of the total salese. Fabricf. Dye g. Threadh. Salary of designersi. Brass buttons j. Legal fees paid to attorneys in defense of the company in a patentinfringement suit.$50,000 plus 587 per hour k. Insurance premiums on property, plant, and equipment, $70,000 peryear plus $5 per 530,000 of insured value over $8,000,0001. Rental costs of warehouse, $5,000 per month plus $4 per square foot ostorage used m. Suppliesn. Leather for patches identifying the brand on individual pieces ofapparelo. Rent on plant equipment, $50,000 per year p. Salary of production vice presidentq. Janitorial services,…