Higado Confectionery Corporation has a number of store locations throughout North America. In income statements segmented by store, which of the following would be considered a common fixed cost with respect to the stores? Multiple Choice cost of goods sold at each store store manager salaries store building depreciation expense the cost of corporate advertising aired during the Super Bo

Higado Confectionery Corporation has a number of store locations throughout North America. In income statements segmented by store, which of the following would be considered a common fixed cost with respect to the stores? Multiple Choice cost of goods sold at each store store manager salaries store building depreciation expense the cost of corporate advertising aired during the Super Bo

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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Bath Bath Co is a company specialising in the manufacture and sale of baths. Each bath consists of a main unit plus a set of bath fittings. The company is split into two divisions, A and B. Division B manufactures the bath and Division A manufactures sets of bath fittings, which are both sold externally and transferred to Division B. Both of the divisions are treated as profit centres. The following data is available for both divisions: Division A Division B External selling price of items £80 £450 Transfer price £75 Internal standard variable costs per item £20 £245 Annual fixed costs £4,400,000 £7,440,000 Annual production capacity 200,000 80,000 Maximum external demand 180,000 80,000 The transfer price charged by Division A to Division B was negotiated some years ago between the previous divisional managers, who have both now been replaced by new managers. Head Office only allows Division B to purchase its fittings…
Assume you are the department B manager for Marley's Manufacturing. Marley's operates under a cost-based transfer structure. Assume you receive the majority of your raw materials from department A, which sells only to department B (they have no outside sales). The income statement for Marley's Manufacturing is shown below: Marley's Manufacturing Income Statement Month Ending August 31, 2018 Dept. A Dept. B Sales $23,000 $51,000 Cost of goods sold 11,040 27,030 Gross profit $11,960 $23,970 Utility expenses 1,150 3,060 Wages expense 5,750 10,710 Costs allocated from corporate 2,070 14,790 Total expenses $8,970 $28,560 Operating income/(loss) in dollars $2,990 -$4,590 Operating income/(loss) in percentage 13 % % 6- Assume the market price for the items your department purchase is 15% below what you are being charged by department A of Marley's Manufacturing. Determine the operating income for department B, assuming department A "sold" department B 1,000 units during the month and…
The Evendale Store is one of many stores owned and operated by the company. The Apparel Department is one of many departments at the Evendale Store. The central warehouse serves all of the company’s stores. Required: 1. What is the total amount of the costs listed above that are direct costs of the Apparel Department? 2. What is the total amount of the costs listed above that are direct costs of the Evendale Store? 3. What is the total amount of the Apparel Department’s direct costs that are also variable costs with respect to total departmental sales?
Need help with these two problems. Thanks!
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Most businesses sell several products at varying prices. The products often have different unit variable costs. Thus, the total profit and the breakeven point depend on the proportions in which the products are sold. Sales mix is the relative contribution of sales among various products sold by a firm. Assume that the sales of Jordan Incorporated for a typical year are as follows: Product Units Sold Sales Mix A 18,320 80% B 4,580 20 Total 22,900 100% Assume the following unit selling prices and unit variable costs: Product Selling Price Variable Cost Contribution Margin A $ 90 $ 75 $ 15 B 150 110 40 Fixed costs are $420,000 per year. Assume that the sales mix, expressed in terms of relative physical units sold, is constant as sales volume changes. Determine the overall breakeven point in terms of sales dollars based on the weighted-average contribution margin ratio (CMR). (Hint: The weights for calculating the weighted-average CMR are based on relative…
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