Cullumber Toys' management is considering eliminating product A, which has been showing a loss for several years. The company's annual income statement is as follows:| | A | B | C | Total ||-----------|-----------|-----------|-----------|--------------|| **Sales** | $2,247,000 | $1,404,000 | $1,809,300 | $5,460,300 || Variable expenses | 1,632,000 | 600,400 | 1,095,200 | 3,327,600 || **Contribution margin** | **615,000** | **803,600** | **714,100** | **2,132,700** || Advertising expense | 517,000 | 430,000 | 520,000 | 1,467,000 || Depreciation expense | 15,900 | 10,000 | 20,600 | 46,500 || Corporate expenses | 93,900 | 81,600 | 105,000 | 280,500 || **Total fixed expenses** | **626,800** | **521,600** | **645,600** | **1,794,000** || **Operating income** | **(11,800)** | **282,000** | **68,500** | **338,700** |- Advertising expense: Specific to each product.- Depreciation expense: Specific to each product; no other use available, no resale value.- Corporate expenses: Allocated based on number of employees.**(a) Restate the income statement in segment margin format.**Please note the sections under "Restate the income statement in segment margin format" need to be filled out with appropriate values not listed in the image.

Differential analysis is a management accounting technique in which we assess only the changes in revenues, costs, and profits that occur from a company's choice. Incremental Cost and Income analysis is done when there are two alternatives from which the company has to choose from. Only the difference in costs and revenues is considered to find out the differential or incremental income.Computation of the income statement in segment margin Final Answer ABCTotalSales $2,247,000$1,404,000$1,809,300$5,460,300Variable expenses$1,632,000$600,400$1,095,200$3,327,600Contribution margin $615,000$803,600$714,100$2,132,700Less: Traceable fixed expenses Advertising $517,000$430,000$520,000$1,467,000Depreciation$15,900$10,000$20,600$46,500Segment margin $82,100$363,600$173,500$619,200Less: Common expenses $280,500Net income $338,700Net Income will reduce by 82,100+15,900 = $98,000

Business

Accounting

Cullumber Toys' management is considering eliminating product A, which has been showing a loss for several years. The com annual income statement, is as follows: Sales Variable expenses Contribution margin Advertising expense Depreciation expense Corporate expenses A B $2,247.000 $1,404,000 1,632,000 600,400 $615.000 $803,600 $517,000 $430,000 10,000 15,900 93 900 81.600 Total $1,809,300 $5,460,300 1,095,200 3,327,600 $714,100 $2,132,700 $520,000 $1,467,000 46,500 C 20,600 105.000 280 500

Cullumber Toys' management is considering eliminating product A, which has been showing a loss for several years. The com annual income statement, is as follows: Sales Variable expenses Contribution margin Advertising expense Depreciation expense Corporate expenses A B $2,247.000 $1,404,000 1,632,000 600,400 $615.000 $803,600 $517,000 $430,000 10,000 15,900 93 900 81.600 Total $1,809,300 $5,460,300 1,095,200 3,327,600 $714,100 $2,132,700 $520,000 $1,467,000 46,500 C 20,600 105.000 280 500

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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Cullumber Toys' management is considering eliminating product A, which has been showing a loss for several years. The company's annual income statement, is as follows: Sales Variable expenses Contribution margin Advertising expense Depreciation expense Corporate expenses Total fixed expenses Operating income A $2,247,000 1,632,000 $615,000 $517,000 15,900 93,900 $626,800 $(11,800) B $1,404,000 600,400 $803,600 $430,000 10,000 81,600 $521,600 $282,000 C $1,809,300 1,095,200 $714,100 $520,000 20,600 105,000 $645,600 $68,500 Total $5,460,300 3,327,600 $2,132,700 $1,467,000 46,500 280,500 $1,794,000 $338,700 Advertising expense - Specific to each product. Depreciation expense - Specific to each product; no other use available, no resale value. Corporate expenses - Allocated based on number of employees.
The Alligator segment of Wildhorse Specialty Meats is operating at a loss and has the following data: Sales Variable expenses Fixed expenses $7320007 512400 366000 If the Alligator segment is eliminated, what will be the effect on the remaining company? Assume that 50% of the fixed expenses will be eliminated and the rest will be allocated to the segments of the remaining company. O $439200 increase. O $36600 decrease. O $36600 increase. O $183000 increase.
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The Alligator segment of Carla Vista Specialty Meats is operating at a loss and has the following data: Sales S 576000 Variable expenses 403200 Fixed expenses 288000 If the Alligator segment is eliminated, what will be the effect on the remaining company? Assume that 50% of the fixed expenses will be eliminated and the rest will be allocated to the segments of the remaining company. Select answer from the options below $28800 increase. $28800 decrease. $345600 increase. $144000 increase.
Manor Company plans to discontinue a department that has a contribution margin of$24,000and 548,000 in foed costs. of the fixed costs,$21,000cannot be avoided. The effect of this discontinuance on Manor's overall net operating income would be an: a increase of$24,000 b increase of$3,000 c. decrease of$3,000 d. decrease of$24,000
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Granfield Company is considering eliminating its backpack division, which reported a loss for the recent year of $46,500 as shown below. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) If the backpack division is dropped, all $484,000 of its variable costs are avoidable, and $216,200 of its fixed costs are avoidable. The impact on Granfield's income from eliminating this business segment would be: Multiple Choice $494,000 decrease $216,200 increase $277,800 decrease $ 978,000 484,000 494,000 540,500 $ (46,500) $494,000 increase
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