Example: A store with four departments is considering closing one of its departments based on the following departmental income statement: Sample Company Income Statement (000 omitted) Departments Total A B D Sales $130 $40 $40 $30 $20 Variable Costs 86 21 21 26 15 Segment Contribution Margin 44 19 16 Fixed Costs: Direct Costs 19 2 3* Segment Margin 25 12 Allocated Common Costs* 12 4 4 1 Departmental Net Income (Loss) $13 $8 $5 $1 $(1) * $1,000 depreciation, $2,000 salaries ** Allocated based on space occupied Would closing Department D improve overall company profitability? (Assume that the equipment is retained but that personnel are laid off.) 2.

Example: A store with four departments is considering closing one of its departments based on the following departmental income statement: Sample Company Income Statement (000 omitted) Departments Total A B D Sales $130 $40 $40 $30 $20 Variable Costs 86 21 21 26 15 Segment Contribution Margin 44 19 16 Fixed Costs: Direct Costs 19 2 3* Segment Margin 25 12 Allocated Common Costs* 12 4 4 1 Departmental Net Income (Loss) $13 $8 $5 $1 $(1) * $1,000 depreciation, $2,000 salaries ** Allocated based on space occupied Would closing Department D improve overall company profitability? (Assume that the equipment is retained but that personnel are laid off.) 2.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

C. ABC Company has 3 stores. The following data were made available in March 20X3: Sales Variable Costs Contribution Margin Traceable Controllable Fixed Cost Performance Margin Traceable Non-Controllable Fixed Cost Segment Margin Store 1 650,000 390,000 260,000 80,000 180,000 100,000 80,000 2. Store 2 1,200,000 780,000 420,000 200,000 220,000 120,000 100,000 Store 3 800,000 400,000 400,000 180,000 220,000 110,000 110,000 Additional information: 1. Store 1 is the oldest branch. Stores 1 and 3 are both in a sub-urban area, while Store 2 is the newest branch and is in a highly urbanized city. The company is considering an additional advertising cost for P21,000 to boost sales. The following alternatives are being considered: a. Advertise all the stores which will increase individual store's sales by 5%. b. Advertise Store 1 to increase its sales by P300,000 but will decrease sales of Store 3 by P200,000. REQUIRED: Determine which of the 2 alternatives, a or b, will benefit ABC Company…
Please do not give solution in image format thanku
Please do not give solution in image format thanku
Please do not give solution in image format thanku
Please do not give solution in image format thanku
Please do not give solution in image format and don't provide excel work thanku
Please do not give solution in image format thanku
Cost-Based Pricingand Markups with Variable CostsCompu Services provides computerized inventory consulting. The office and computer expenses are $600,000 annually and are not assigned to specific jobs. The consulting hours available for the year total 20,000, and the average consulting hour has $30 of variable costs.(a) If the company desires a profit of $160,000, what should it charge per hour?$Answer(b) What is the markup on variable costs if the desired profit is $240,000?Answer %(c) If the desired profit is $60,000, what is the markup on variable costs to cover (1) unassigned costs and (2) desired profit?Markup to cover unassigned costs Answer %Markup to cover desired profits Answer %
Service Emphasis The following analysis of selected data is for each of the two services Rockville Corporation provides. Service G Service H Per-unit data at 10,000 services Sales price Service costs: Variable Fixed Selling and administrative expenses: Variable Fixed $ Revenue Less: Variable cost Contribution margin Labor hours per unit Contribution margin per labor hour $ $36 $ 19 6 G 5 3 In the Rockville's operation, labor capacity is the company's constraining resource. Each unit of G requires 3 hours of labor, and each unit of H requires 1 hours of labor. Assuming that all service can be sold at a normal price, prepare an analysis showing which of the two services should be provided with any unused productive capacity that Rockville might have. Service $23 36 $ 25 X 11 * $ 3 3.67 × $ 15 4 2 1 H 23 19 x 4 x 1 4 × Any unused capacity should be devoted to Service H, which has $2 less contribution margin per labor hour than does Service G. Any unused capacity should be devoted to…
Macee Store has three operating departments, and it conducts advertising that benefits all departments. Advertising costs are $108,000. Sales for its operating departments follow. Department 2 Sales $ 272,500 523, 200 294,300 How much advertising cost is allocated to each operating department If the allocation is based on departmental sales? (Do not round your intermediate calculations.) Department Sales Percent of Total 1 2 3 Total % % % % Cost Allocated
A28
4