Frisco Company is a headphones manufacturer. Frisco is considering eliminating its wired earbuds division because its $100,170expenses are higher than its $93,210 sales. The company reports the following expenses for this division.Cost of goods soldDirect expensesIndirect expensesService department costsWired Earbuds Division is:SalesExpenses:AvoidableExpenses$ 70,5009,75089011,800Should the division be eliminated? (Any loss amount should be indicated with minus sign.)Total expensesNet income (loss)Revenues from wired earbuds divisionAvoidable expensesRevenues are greater than (less than)avoidable expenses byUnavoidableExpensesKept$ 2,1502,4002,680Eliminated

Answer:- Revenue is calculated by multiplying this same average sales price even by the number of…

Answered: Frisco Company is a headphones…

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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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
A.4
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
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Granfield Company is considering eliminating its backpack division, which reported a loss for the recent year of $46,500 as shown below. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) If the backpack division is dropped, all $484,000 of its variable costs are avoidable, and $216,200 of its fixed costs are avoidable. The impact on Granfield's income from eliminating this business segment would be: Multiple Choice $494,000 decrease $216,200 increase $277,800 decrease $ 978,000 484,000 494,000 540,500 $ (46,500) $494,000 increase
Marin Company makes several products, including canoes. The company reports a loss from its canoe segment (see below). All its variable costs are avoidable, and $330,000 of its fixed costs are avoidable. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $ 1,097, 600 784,000 313,600 376,000 $ (62,400) (a) Compute the income increase or decrease from eliminating this segment. (b) Should the segment be continued or eliminated?
Listmann Corporation processes four different products that can either be sold as is or processed further. Listed below are sales and additional cost data: Sales Value with no further Additional Processing Sales Value after further Product Processing Costs processing Premier $ 1,350 $ 900 $ 2,700 Deluxe 450 225 630 Super 900 450 Basic 90 45 1,800 180 Which product(s) should not be processed further?

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