Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution formatincome statement follows:SalesVariable expensesContribution marginFixed expensesNet operating income (loss)DepartmentTotal$ 4,170,000Hardware$ 3,010,000Linens$ 1,160,000407,000753,0001,325,0002,845,0002,290,000$ 555,000918,0002,092,0001,470,000$ 622,000820,000$ (67,000)A study indicates $376,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even ifthe Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 17% decrease in the sales of theHardware Department.Required:What is the financial advantage (disadvantage) of discontinuing the Linens Department?

Total contribution margin lost is to be compqred with total saving in fixed cost due to…

Answered: d & Bath, a retailing company, has two…

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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For a recent year, Wicker Company-owned restaurants had the following sales and expenses (in millions): Sales $39,300 Food and packaging $14,151 Payroll 9,900 Occupancy (rent, depreciation, etc.) 8,369 General, selling, and administrative expenses 5,700 $38,120 Income from operations $1,180 Assume that the variable costs consist of food and packaging; payroll; and 40% of the general, selling, and administrative expenses. a. What is Wicker Company's contribution margin? Round to the nearest million. (Give answer in millions of dollars.)$fill in the blank 1 million b. What is Wicker Company's contribution margin ratio? Round your answer to one decimal place.fill in the blank 2 % c. How much would income from operations increase if same-store sales increased by $2,400 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million.$fill in the blank 3 million
Faune Furniture Co. consists of two divisions, Bedroom Division and Dining Room Division. The results of operations for the most recent quarter are: BedroomDivision Dining RoomDivision Total Sales $500,000 $750,000 $1,250,000 Variable costs 225,000 450,000 675,000 Contribution margin $275,000 $300,000 $ 575,000 (a) Determine the company’s sales mix. (Round answers to 2 decimal places, e.g. 0.15.) Sales mix Bedroom Division enter a share of the division Dining Room Division enter a share of the division
Sienna Deli has provided the following relating to the most recent month (March31, 2023) of operations, for their main product, cookies. The company sold 20,000 cookies. Sales Cost of Goods Sold Fixed Selling Costs Fixed Administrative Costs Variable Selling Costs Variable Administrative Costs Show Transcribed Text REQUIRED: Total prepare a contribution margin income statement in good format. Include per unit and percentage columns where C $40,000 16,000 2,000 5,000 10% of sales 5% of sales 1- Prepare a contribution margin income statement in good format. Include per unit and percentage columns where applicable. 2- Calculate the company's breakeven point in units. 3- Calculate the company's breakeven point in sales dollars. Round to nearest whole number. 4- Calculate the company's margin of safety percentage. Round to nearest whole number.
Bacob Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $103.40 per unit. Sales volume (units) Cost of sales Selling and administrative costs O $213,590 The best estimate of the total contribution margin when 5,300 units are sold is: O $41,340 O $133,560 5,000 $315,500 $ 162,500 $56,710 6,000 $378,600 $177,600
Contribution Margin and Contribution Margin Ratio For a recent year, McDooley's, a family-owned group of restaurants, had the following sales and expenses: Sales for all restaurants Food and paper Payroll and employee benefits Occupancy and other expenses Selling, general, and administrative expenses Other operating expenses Net operating expenses Operating income (loss) $100,560 69,600 39,900 40,200 17,460 $291,000 (267,720) $23,280 Assume that the variable costs consist of food and paper, payroll and employee benefits, and 40% of the selling, general, and administrative expenses. a. What is McDooley's contribution margin? b. What is McDooley's contribution margin ratio? Round your percentage answer to one decimal place. % c. How much would operating income increase if the stores sales increased by $5,800 for the coming year, with no change in the contribution margin
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 $ 4,280,000 1,305,000 2,975,000 2,310,000 $ 665,000 Department Hardware $3,130,000 893,000 2,237,000 1,420,000 $ 817,000 Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department? Linens $ 1,150,000 412,000 738,000 890,000 $ (152,000) A study indicates that $379,000 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.
k ces 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 1,362,000 2,708,000 2,300,000 $ 408,000 Show All Items Department Hardware $ 3,040,000 952,000 2,088,000 1,410,000 $ 678,000 Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department? A study indicates $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 12% decrease in the sales of the Hardware Department. Linens $ 1,030,000 410,000 620,000 890,000 $ (270,000)
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 $ 4,130,000 1,358,000 2,772,000 2,200,000 $ 572,000 Department Hardware $ 3,070,000 956,000 2,114,000 1,320,000 $ 794,000 Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department? Linens $ 1,060,000 402,000 658,000 880,000 $ (222,000) A study indicates that $379,000 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 19% decrease in the sales of the Hardware Department.
Jake's Roof Repair has provided the following data concerning its costs: Fixed Cost Cost per per Month $ 21,200 Wages and salaries Parts and supplies Equipment depreciation Truck operating expenses Repair-Hour $15.00 $ 7.50 $ 0.50 $ 1.60 $ 2,770 $ 5,710 $ 4,680 $ 3,870 Rent Administrative expenses $ 0.40 For example, wages and salaries should be $21,200 plus $15.00 per repair-hour. The company expected to work 2,800 repair-hours in May, but actually worked 2,700 repair-hours. The company expects its sales to be $44.00 per repair-hour. Required: Compute the company's activity variances for May. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
Review the contribution margin income statements for Cover-to-Cover Company and Biblio Files Company on their respective Income Statements panels. Complete the following table from the data provided in the income statements. Each company sold 84,800 units during the year. Cover-to-Cover Company Biblio Files Company Contribution margin ratio (percent) Unit contribution margin Break-even sales (units) Break-even sales (dollars) Cover-to-Cover Company Contribution Margin Income Statement For the Year Ended December 31, 20Y7 1 Sales $424,000.00 2 Variable costs: 3 Manufacturing expense $254,400.00 4 Selling expense 21,200.00 5 Administrative expense 63,600.00 339,200.00 6 Contribution margin $84,800.00 7 Fixed costs: 8 Manufacturing expense $5,000.00 9 Selling expense…
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 $ 4,160,000 1,252,000 2,908,000 2,280,000 $ 628,000 Department Hardware $ 3,140,000 849,000 2,291,000 1,400,000 $ 891,000 Linens $ 1,020,000 403,000 617,000 880,000 $ (263,000) A study indicates that $373,000 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 16% 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: Sales Variable expenses Contribution margin Net operating income (loss) Fixed expenses Total $ 4,150,000 1,406,000 2,744,000 2,320,000 $ 424,000 Hardware $ 3,150,000 Department Linens $ 1,000,000 409,000 591,000 890,000 $ (299,000) 997,000 2,153,000 1,430,000 $ 723,000 A study indicates that $373,000 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. Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department?

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