Raner, Harris and Chan is a consulting firm that specializes in information systems for medical anddental clinics. The firm has two offices-one in Chicago and one in Minneapolis. The firm classifiesthe direct costs of consulting jobs as variable costs. A contribution format segmented incomestatement for the company's most recent year is given: Total Company Office ChicagoMinneapolis Sales $ 526, 500 100.00% $ 175,500 100.00% $ 351,000 100.00% Variable expenses263, 250 50.00% 52, 650 30.00 % 210, 600 60.00% Contribution margin263, 250 50.00 % 122,850 70.00% 140, 400 40.00% Traceable fixed expenses147,420 28.00% 91,260 52.00 % 56, 160 16.00% Office segment margin 115,830 22.00% $31,590 18.00% $ 84, 240 24.00% Common fixed expenses not traceable to offices 73,710 14.00%Net operating income $ 42,120 8.00% 3. Assume that sales in Chicago increase by $58, 500 nextyear and that sales in Minneapolis remain unchanged. Assume no change in fixed costs. a.Prepare a new segmented income statement for the company.

Segmented income statement helps a company make decisions related to whether to shut down a…

Answered: dental clinics. The firm 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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Solve the following two independent cases Case 1: LAC Corporation is in the process of setting a selling price for a new product it has just designed. The following data is related to this product for a budgeted volume of 20,000 units Per unit Total Direct Materials. 15 Direct Labor 13 Variable Manufacturing Overhead 19 Fixed Manufacturing Overhead 320,000 Variable Selling and Administrative Expenses 7 Fixed Selling and Administrative Expenses 180,000 The Corporation uses the cost-plus pricing to set its target selling price. The markup on total unit cost is 25% Required: Answer the following three questions - circle the correct answer The total cost per unit is: a. $79 b. $54 c. $25 d. None of the options The markup per unit is: a. $67.5 b. $19.75 c. $31.25 d. None of the options The target selling price per unit is: a. $98.75 b. $19.75 c. $13.5 d. None of the options
Swanson Manufacturing uses activity-based management to analyze the cost of non-value-added activities across its value chain. The company's annual budgeted costs in its Human Resources Department (HR) total $5 million. This amount is allocated to 3 cost pools, as follows: (1) 20% to Hiring & Recruiting; (2) 50% to Payroll; and (3) 30% to Employee Benefits. There are 3 activity cost drivers associated with HR's 3 cost pools: (1) travel; (2) information processing; and (3) professional development. These activities drive each of HR's cost pool amounts as follows: Hiring & Recruiting Cost Pool Drivers -- 70% travel activities -- 12% information processing activities -- 18% professional development activities Payroll Cost Pool Drivers -- 10% travel activities -- 65% information processing activities -- 25% professional development activities Employee Benefits Cost Pool Drivers -- 10% travel activities -- 30% information processing activities -- 60% professional development…
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Required information (The following information applies to the questions displayed below.] Raner, Harris & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices-one in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting jobs as variable costs. A contribution format segmented income statement for the company's most recent year is given: Office Total Company $ 513,000 Sales Variable expenses Contribution margin Traceable fixed expenses 100.00% 50.00% 50.00% Chicago $ 171,000 51, 300 119, 700 88,920 Minneapolis 100.00% 60.00 40.00% 16.00% $ 342,000 100.00% 30.00% 70.00% 52.00% 256, 500 205, 200 136,800 54,720 $ 82,080 256, 500 143,640 28.00% Office segment margin $ 30,780 112,860 22.00% 18.00% 24.00% Common fixed expenses not traceable to offices 71,820 $ 41,040 14.00% Net operating income 8.00% 2. By how much would the company's net operating income increase if Minneapolis increased its…
16) sector companies purchase materials and components and conve goods. A) Merchandising B) Service C) Manufacturing D) Professional
Manly Beach Enterprises projects the following information for the coming year. Sales Production 1,900 units 2,000 units Selling price per sewing machine Total variable manufacturing cost Total fixed manufacturing cost Marketing and administrative cost (40% variable based on sales) $200 $160,000 $60,000 $80,000 a. Determine the projected net income using absorption costing: $ b. Determine the projected net income using variable costing: $
! Required information [The following information applies to the questions displayed below.] Raner, Harris and Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices-one in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting jobs as variable costs. A contribution format segmented income statement for the company's most recent year is given: Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Total Company Net operating income increase $ 463,500 231,750 231,750 129,780 101,970 64,890 $ 37,080 100.00% 50.00% 50.00% 28.00% 22.00% 14.00% 8.00% Chicago $ 154,500 46,350 108,150 80, 340 $ 27,810 Office 100.00% 30.00% 70.00% 52.00% 18.00% Minneapolis $ 309,000 185,400 123,600 49,440 $ 74,160 100.00% 60.00% 40.00% 16.00% 24.00% 2. By how much would the company's net operating income increase…
14) What is operating income using variable costing? A) $52,500 B) $78,750 C) $65,750
A startup airline company out of Denver established 5 routes to Los Angeles, Las Vegas, Phoenix, Chicago, and Dallas last year and incurred total of $4,200,000 in overhead costs. The company wants to use activity-based method to allocate the indirect cost among the routes. The cost driver is identified as available seat miles (ASM). The following table presents the revenue passenger miles (RPM) and average load factor for each route. The overhead cost allocated to Los Angeles using ASM is nearest to. Route Total RPM Average Load Factor Total ASM Chicago 450,000 75% 600,000 Dallas 574,000 82% 700,000 Los Angeles 630,000 70% 900,000 Las Vegas 595,000 85% 700,000 Phoenix 480,000 80 600,000 Total ASM 3,500,000 O $450,000 $840,000 O $720,000 O $1,080,000
Subject: Acounting
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