Dept. M $79,000 Dept. T $ 40,000 Dept. N Dept. O Total $ 41,000 Dept. P $60,000 $ 292,000 Sales $72,000 Expenses 15,800 56,600 72,400 $ 6,600 20,000 5,400 48,600 18, 200 66,800 $(26,800) Avoidable 43,600 19,800 20,000 46,600 148,000 146,600 294,600 $ (2,600) Unavoidable 66,600 $(6,600) Total expenses 63,400 25,400 Net income (loss) $(22,400) $46,600 Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios. ercise 25-9 Part 2 Management eliminates departments with sales dollars that are less than avoidable expenses.

Dept. M $79,000 Dept. T $ 40,000 Dept. N Dept. O Total $ 41,000 Dept. P $60,000 $ 292,000 Sales $72,000 Expenses 15,800 56,600 72,400 $ 6,600 20,000 5,400 48,600 18, 200 66,800 $(26,800) Avoidable 43,600 19,800 20,000 46,600 148,000 146,600 294,600 $ (2,600) Unavoidable 66,600 $(6,600) Total expenses 63,400 25,400 Net income (loss) $(22,400) $46,600 Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios. ercise 25-9 Part 2 Management eliminates departments with sales dollars that are less than avoidable expenses.

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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Ace Business Forms Month Current Assets Fixed Assets Total Assets January P125,000 P250,000 P375,000 February 130,000 250,000 380,000 March 135,000 250,000 385,000 April 150,000 250,000 400,000 May 150,000 250,000 400,000 June 125,000 250,000 375,000 July 115,000 250,000 365,000 August 120,000 250,000 370,000 September 115,000 250,000 370,000 October 100,000 250,000 350,000 November 110,000 250,000 360,000 December 115,000 250,000 365,000 Ace Business Forms has compiled several factors relative to its financing mix. The firm pays 8 percent on short-term funds and 10 percent on long-term funds. The firm’s monthly current, fixed and total asset requirements for the previous year are summarized in table above. Determine: 1. the annual financing costs (aggressive strategy) 2. the annual financing costs (conservative strategy)
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Hardev
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