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)SalesVariable costsContribution marginFixed costsIncome (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 onGranfield's income from eliminating this business segment would be:Multiple Choice$494,000 decrease$216,200 increase$277,800 decrease$ 978,000484,000494,000540,500$ (46,500)$494,000 increase

An entity may have multiple divisions. The company can decide to eliminate the division which is…

Answered: Granfield Company is considering…

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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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)
The Alligator segment of Wildhorse Specialty Meats is operating at a loss and has the following data: Sales Variable expenses Fixed expenses $7320007 512400 366000 If the Alligator segment is eliminated, what will be the effect on the remaining company? Assume that 50% of the fixed expenses will be eliminated and the rest will be allocated to the segments of the remaining company. O $439200 increase. O $36600 decrease. O $36600 increase. O $183000 increase.
Please solve this problem
The Alligator segment of Carla Vista Specialty Meats is operating at a loss and has the following data: Sales S 576000 Variable expenses 403200 Fixed expenses 288000 If the Alligator segment is eliminated, what will be the effect on the remaining company? Assume that 50% of the fixed expenses will be eliminated and the rest will be allocated to the segments of the remaining company. Select answer from the options below $28800 increase. $28800 decrease. $345600 increase. $144000 increase.
Coronado Division has the following data: Sales Variable expenses Fixed expenses $509000 231000 286000 The fixed costs are not avoidable and must be allocated to profitable divisions if the segment is eliminated. What will be the incremental effect on net income if Coronado Division is eliminated? O $223000 increase O $278000 decrease O $286000 decrease Cannot be determined from the data provided
None
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?
Subject-Acounting
Pepper’s Automotive (see Brief Exercise 18-19) has further analyzed the exhaust systemdivision into three products: exhaust pipes, intake valves, and intake pipes. The incomestatement is available below.If intake valves were dropped, what would be the change in profits in the short run and thelong run, respectively?[LO 18-4]Exhaust Pipes Intake Valves Intake PipesNet revenues $500,000 $300,000 $200,000Variable costs 50,000 150,000 100,000Contribution margin 450,000 150,000 100,000Controllable fixed costs 50,000 50,000 0Controllable margin 400,000 100,000 100,000Noncontrollable fixed costs 100,000 150,000 50,000Contribution by profit center $300,000 $ (50,000) $ 50,000a. Short run: $100,000 decrease; long run: $50,000 increaseb. Short run: $150,000 increase; long run: $50,000 decreasec. Short run: $100,000 increase; long run: $50,000 decreased. Short run: $50,000 increase; long run: $100,000 decrease

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