Discontinue a SegmentProduct A has revenue of $195,700, variable cost of goods sold of $114,800, variable selling expenses of $31,100, and fixed costs of $60,200, creating a lossfrom operations of $10,400.Prepare a differential analysis as of May 9, to determine whether Product A should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixedcosts are unaffected by the decision. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minussign.Differential AnalysisContinue Product A (Alt. 1) or Discontinue Product A (Alt. 2)May 9Differential EffectDiscontinue ProductA (Alternative 2)Continue ProductA (Alternative 1)on Income(Alternative 2)RevenuesCosts:Variable cost of goods soldVariable selling expensesFixed costsContinuedDiscontinuedct A should be continued (Alternative 1) or discontinued (Alternative 2)De

Calculate the differential effect on income.

Answered: Discontinue a Segment Product A has…

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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In which scenario would an adjusted sales value be used to assign costs? a. If abnormal losses occur during production of joint products b. If a joint product is to be processed further after the point of separation c. If one of the joint products has negligible market value d. If joint products are separately identifiable before split-off point
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Management and accounting Spencer Company is considering closing one of its product lines. Current data on the product line is as follows:DescriptionSales revenue $20,000Variable costs$17,000Direct avoidable fxed costs $7,000Indirect allocated fxed costs $5,000Net Income Loss on the product line ($9,000) *The direct avoidable fxed costs will be eliminated if the product line is closed. **The indirect allocated fxed costs will remain the same whether the product line is continued or closed.In addition, if Spencer closes the product line, Spencer can sublease its production facility to another company and earn subleaserevenue of $2,700 per year. Assume that Spencer decides to discontinue this product line. By how much will overall company net income change? Company net income will INCREASE by $9000Company net income will DECREASE by $9000Company net income will DECREASE by $6700Company net income will INCREASE by $6700
URGENT Show Transcribed Text wwwwww 32. Management is considering dropping product line C. If it is discontinued, (1) $3,000 of its fixed costs are unavoidable fixed costs (common FC) and (2) the selling price of Product B would increase by 30%. The discontinuation of product line C would: a. Decrease net income by $4.000 b. Decrease net income by $4,500. c. Decrease net income by $5,000. d. Decrease net income by $5,500. e. Decrease net income by $6,000. Sictions: On Sales Variable costs Contribution margin Fixed costs Net income Tremaine Inc. has three product lines: A, B, and C. A B a. $10,000 b. $20,000 c. $30,000 d. $40,000 Show Transcribed Text $50,000 30,000 20,000 23.000 $ (3,000) J Accessibility: Investigate C S a. Decrease net income by $5,000 b. Decrease net income by $10,000. c. Decrease net income by $15,000. d. Decrease net income by $20,000. e. Decrease net income by $25,000. a. Decrease net income by $4,000 b. Decrease net income by $4,500. c. Decrease net income by…
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Discontinue a Segment Product Tango has revenue of $1,150,000, variable cost of goods sold of $850,000, variable selling expenses of $275,000, and fixed costs of $125,000, creating an operating loss of $(100,000). a. Prepare a differential analysis as of February 13 to determine if Product Tango should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are unaffected by the decision. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. Differential Analysis Continue Product Tango (Alt. 1) or Discontinue Product Tango (Alt. 2) February 13 Revenues Costs: Variable cost of goods sold Variable selling and admin. expenses Fixed costs Profit (Loss) Continue Discontinue Product Product Tango Tango (Alternative 1) (Alternative 2) 0000 Differential Effects (Alternative 2)
A manufacturer is considering eliminating a segment because it shows the following $6,300 loss. All $21,100 of its variable costs are avoidable, and $38,500 of its fixed costs are avoidable. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) (a) Compute the income increase or decrease from eliminating this segment. (b) Should the segment be eliminated? Complete this question by entering your answers in the tabs below. Required A $ 63,300 21,100 42,200 48,500 (6,300) Required B Compute the incomo
In average cost method the new average price is calculated: a) after the whole period, b) after each shipment, c) before the whole period, d) none of the choices is correct after the whole period after each shipment before the whole period none of the choices is correct
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be discontinued. The special equipment used to produce the trampolines has A common fixed cost that is allocated on the basis of sales pesos. supervisors assigned to the model would be discharged.. Management is concerned about the continued losses shown by the round trampolines and wants a recommendation as to whether or not the line should no resale value. If the round trampoline model is dropped, the two line Problem 2, page 313-Crystal Sports Equipment (Eliminate or Retain Product Line) Requirement: Compute the increase/decrease in net operating income if the production and sale of the round trampolines is continued. Problem 2 (Eliminate or Retain a Product Line) Crystal Sports Equipment manufactures round, rectangular, and octagonal trampolines. Data on sales and expenses for the past month follow: Round P140,000 60,000 80,000 Trampoline Rectangular Octagonal P500,000 200,000 300,000 Total Sales Less variable expenses. Contribution margin.. Less fixed expenses: P360,000 P1,000,000…

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