Exercise 7-4 (Algo) Basic Segmented Income Statement [LO7-4]Royal Lawncare Company produces and sells two packaged products-Weedban and Greengrow. Revenue and cost informationrelating to the products follow:Selling price per unitVariable expenses per unitTraceable fixed expenses per yearProductSalesVariable expensesWeedban$ 12.00$ 2.20$ 137,000Last year the company produced and sold 41,000 units of Weedban and 17,500 units of Greengrow. Its annual common fixed expensesare $104,000.Contribution marginTraceable fixed expensesProduct line segment marginCommon fixed expenses not traceable to productsNet operating incomeRequired:Prepare a contribution format income statement segmented by product lines.Greengrow$ 34.00$ 12.00$ 35,000$TotalCompanyPrev0Product Line0Weedban0 $1 of 2m0Greengrow0 $Next >00

Income statement :— It is one of the financial statements that shows profitability, total revenue…

Answered: Exercise 7-4 (Algo) Basic Segmented…

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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Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 70 49 $ 21 Fixed expenses are $74,000 per month and the company is selling 4,400 units per month. Req 2A 2-a. Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher-quality components that increase the variable expense by $4 per unit and increase unit sales by 25%. 2-b. Should the higher-quality components be used? Req 2B Percent of Sales Complete this question by entering your answers in the tabs below. 100% 70 30% by Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher- quality components that increase the variable expense by $4 per unit and increase unit sales by 25%. Net operating income
Unit sales (a) Selling price per unit Variable cost per unit Traceable fixed expense TB MC Qu. 12A-46 Woodridge Corporation manufactures numerous... Woodridge Corporation manufactures numerous products, one of which is called Alpha-32. The company has provided the following data about this product Multiple Choice $1,375,220 77,000 76.00 61.00 $1,323,000 $52.220 Help $ $ Management is considering increasing the price of Alpha-32 by 5%, from $76.00 to $79.80. The company's marketing managers estimate that this price hike would decrease unit sales by 5%, from 77,000 units to 73,150 units Assuming that the total traceable fixed expense does not change, what net operating income will product Alpha-32 earn at a price of $79.80 if this sales forecast is correct? Save & Exit
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Required information [The following information applies to the questions displayed below.] Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): $ 15,000 9,000 6,000 3,120 Sales Variable expenses Contribution margin Fixed expenses Net operating income $ 2,880 6. If the selling price increases by $2 per unit and the sales volume decreales by 100 units, what would be the net operating income? $ 3,000 Net operating income
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Problem 12-21 (Algo) Prepare a contribution margin format income statement; answer what-if questions LO 12-7, 12-8, 12-9 Shown here is an income statement in the traditional format for a firm with a sales volume of 7,500 units. Cost formulas also are shown: Revenues Cost of goods sold ($5,900 + $2.25/unit) Gross profit Operating expenses: Selling ($1,200 + $0.10/unit) Administrative ($3,500 + $0.20/unit) Operating income $34,400 22,775 $ 11,625 1,950 5,000 $ 4,675 Required: a. Prepare an income statement in the contribution margin format. b. Calculate the contribution margin per unit and the contribution margin ratio. c. Calculate the firm's operating income (or loss) if the volume changed from 7,500 units to 1. 11,250 units. 2. 3,750 units. d. Refer to your answer to part a for total revenues of $34,400. Calculate the firm's operating income (or loss) if unit selling price and variable expenses per unit do not change and total revenues 1. Increase by $14,500. 2. Decrease by $3,000.
Keep-or-Drop Decision Charlevoix Company produces three products: Torch, Elk, and Walloon. A segmented income statement, with amounts given in thousands, follows: Line Item Description Torch Elk Walloon Total Sales revenue $1,280 $185 $315 $1,780 Less: Variable expenses 1,115 45 252 1,412 Contribution margin $165 $140 $63 $368 Less direct fixed expenses: Depreciation 50 15 10 75 Advertising 95 85 76 256 Segment margin $20 $40 $(23) $37 Direct fixed expenses consist of depreciation and advertising. All depreciation on the equipment is dedicated to the product lines. None of the equipment can be sold. Assume that, each of the three products has a different marketing campaign whose advertising would be eliminated if the associated product were dropped. Assume that 30% of the Torch customers choose to buy from Charlevoix because it offers a full range of products, including Walloon. If Walloon were no longer available from Charlevoix, these customers…
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Royal Lawncare Company produces and sells two packaged products—Weedban and Greengrow. Revenue and cost information relating to the products follow: Product Weedban Greengrow Selling price per unit $ 9.00 $ 37.00 Variable expenses per unit $ 3.00 $ 13.00 Traceable fixed expenses per year $ 134,000 $ 36,000 Last year the company produced and sold 45,000 units of Weedban and 17,000 units of Greengrow. Its annual common fixed expenses are $107,000. Required: Prepare a contribution format income statement segmented by product lines.
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