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Current Attempt in Progress Ridley and Scott Mercantile operates two stores, one on Crane Avenue and the other on Blue Road. Results for the month of May. which is representative of all months, are as follows: Crane Avenue Store Blue Road Store Total Sales revenue $81,900 $122,000 $203,900 Variable expenses 31400 85,000 114,400 Contribution margin 50,500 37,000 87.500 Direct fixed expenses 19.300 41.000 60,300 Common fixed expenses 4300 5.200 9.500 Total fixed expenses 23,600 46,200 69.900 Operating income $26,900 $(9,200) $17.700 The following information pertains to Ridley and Scott's operations. Forty percent of each store's direct fixed expenses would continue if either store were closed. Ridley and Scott allocates common fixed expenses to each store on the basis of sales dollars. • Management estimates that closing the Blue Road store would result in a 20% decrease in the Crane Avenue store's sales, while closing the Crane Avenue store would have no effect on the Blue Road store's sales. (a1) Your Answer Correct Answer * Your answer is incorrect Calculate the operating income if the Blue Road store is closed. Enter negative amount using either a negative sign preceding the number eg 45 or parentheses e.. (45) Operating income FAECO

Current Attempt in Progress Ridley and Scott Mercantile operates two stores, one on Crane Avenue and the other on Blue Road. Results for the month of May. which is representative of all months, are as follows: Crane Avenue Store Blue Road Store Total Sales revenue $81,900 $122,000 $203,900 Variable expenses 31400 85,000 114,400 Contribution margin 50,500 37,000 87.500 Direct fixed expenses 19.300 41.000 60,300 Common fixed expenses 4300 5.200 9.500 Total fixed expenses 23,600 46,200 69.900 Operating income $26,900 $(9,200) $17.700 The following information pertains to Ridley and Scott's operations. Forty percent of each store's direct fixed expenses would continue if either store were closed. Ridley and Scott allocates common fixed expenses to each store on the basis of sales dollars. • Management estimates that closing the Blue Road store would result in a 20% decrease in the Crane Avenue store's sales, while closing the Crane Avenue store would have no effect on the Blue Road store's sales. (a1) Your Answer Correct Answer * Your answer is incorrect Calculate the operating income if the Blue Road store is closed. Enter negative amount using either a negative sign preceding the number eg 45 or parentheses e.. (45) Operating income FAECO

FINANCIAL ACCOUNTING
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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Current Attempt in Progress Ridley and Scott Mercantile operates two stores, one on Crane Avenue and the other on Blue Road. Results for the month of May. which is representative of all months, are as follows: Crane Avenue Store Blue Road Store Total Sales revenue $81,900 $122,000 $203,900 Variable expenses 31400 85,000 114,400 Contribution margin 50,500 37,000 87.500 Direct fixed expenses 19.300 41.000 60,300 Common fixed expenses 4300 5.200 9.500 Total fixed expenses 23,600 46,200 69.900 Operating income $26,900 $(9,200) $17.700 The following information pertains to Ridley and Scott's operations. Forty percent of each store's direct fixed expenses would continue if either store were closed. Ridley and Scott allocates common fixed expenses to each store on the basis of sales dollars. • Management estimates that closing the Blue Road store would result in a 20% decrease in the Crane Avenue store's sales, while closing the Crane Avenue store would have no effect on the Blue Road store's sales. (a1) Your Answer Correct Answer * Your answer is incorrect Calculate the operating income if the Blue Road store is closed. Enter negative amount using either a negative sign preceding the number eg 45 or parentheses e.. (45) Operating income FAECO
Transcribed Image Text:Current Attempt in Progress Ridley and Scott Mercantile operates two stores, one on Crane Avenue and the other on Blue Road. Results for the month of May. which is representative of all months, are as follows: Crane Avenue Store Blue Road Store Total Sales revenue $81,900 $122,000 $203,900 Variable expenses 31400 85,000 114,400 Contribution margin 50,500 37,000 87.500 Direct fixed expenses 19.300 41.000 60,300 Common fixed expenses 4300 5.200 9.500 Total fixed expenses 23,600 46,200 69.900 Operating income $26,900 $(9,200) $17.700 The following information pertains to Ridley and Scott's operations. Forty percent of each store's direct fixed expenses would continue if either store were closed. Ridley and Scott allocates common fixed expenses to each store on the basis of sales dollars. • Management estimates that closing the Blue Road store would result in a 20% decrease in the Crane Avenue store's sales, while closing the Crane Avenue store would have no effect on the Blue Road store's sales. (a1) Your Answer Correct Answer * Your answer is incorrect Calculate the operating income if the Blue Road store is closed. Enter negative amount using either a negative sign preceding the number eg 45 or parentheses e.. (45) Operating income FAECO
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