Hong Publishing has purchased Lang Publishing. After reviewing titles from both companies, a decision must be made to determine what titles must be dropped. The following Information is available to make the decision.Title YTitle ZTitle X$99,000Sales$151,000$199,000Variable Cost51,00076,000100,000Contribution Margin$48,000$75,000$99,000Direct Fixed Cost19,00040,000Allocated Common Fixed Cost10,00021,000Net Income$19,000$38,000A. What is the total income if all titles were produced?29,00015,000$31,000B. If Title X was dropped, what would be the effect on Net Income?✔LossC. How much did Title X Contribute to Fixed Costs?D. Determine the cost and the amount that will remain even if Title X is dropped.Allocated Fixed Cost✓ SE. Which costs and amount will be eliminated If Title X is dropped?Contribution Margin✓Direct Fixed Cost$

The contribution margin is computed by deducting the sales revenue from the variable cost there is…

Hong Publishing has purchased Lang Publishing. After reviewing titles from both companies, a decision must be made to determine what titles must be dropped. The following information is available to make the decision. Title x Title Z Title Y $151,000 76,000 $75,000 29,000 15,000 $31,000 Sales $99,000 Variable Cost 51,000 Contribution Margin $48,000 Direct Fixed Cost 19,000 Allocated Common Fixed Cost 10,000 Net Income $19,000 A. What is the total income if all titles were produced? B. If Title X was dropped, what would be the effect on Net Income? Loss C. How much did Title X Contribute to Fixed Costs? $199,000 100,000 $99,000 40,000 21,000 $38,000 D. Determine the cost and the amount that will remain even if Title X is dropped. Allocated Fixed Cost E. Which costs and amount will be eliminated if Title X is dropped? Contribution Margin Direct Fixed Cost

Hong Publishing has purchased Lang Publishing. After reviewing titles from both companies, a decision must be made to determine what titles must be dropped. The following information is available to make the decision. Title x Title Z Title Y $151,000 76,000 $75,000 29,000 15,000 $31,000 Sales $99,000 Variable Cost 51,000 Contribution Margin $48,000 Direct Fixed Cost 19,000 Allocated Common Fixed Cost 10,000 Net Income $19,000 A. What is the total income if all titles were produced? B. If Title X was dropped, what would be the effect on Net Income? Loss C. How much did Title X Contribute to Fixed Costs? $199,000 100,000 $99,000 40,000 21,000 $38,000 D. Determine the cost and the amount that will remain even if Title X is dropped. Allocated Fixed Cost E. Which costs and amount will be eliminated if Title X is dropped? Contribution Margin Direct Fixed Cost

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
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A business received an offer from an exporter for 10,000 units of product at a special price of $15.50 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: Domestic unit sales price $21 Unit manufacturing costs: Variable 12 Fixed 5 What is the amount of the gain or loss from acceptance of the offer? a. $8,000 loss b. $15,000 loss c. $35,000 gain d. $30,000 gain
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Manor Company plans to discontinue a department that has a contribution margin of$24,000and 548,000 in foed costs. of the fixed costs,$21,000cannot be avoided. The effect of this discontinuance on Manor's overall net operating income would be an: a increase of$24,000 b increase of$3,000 c. decrease of$3,000 d. decrease of$24,000
Assume a retailing company has two departments-Department A and Department B. The company's most recent contribution format income statement follows: Department A $ 350,000 120,000 230,000 140,000 Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) Multiple Choice O $(133,800) The company says that $110,000 of the fixed expenses being charged to Department B are sunk costs or allocated costs that will continue if the segment is discontinued. However, if Department B is discontinued the sales in Department A will drop by 6%. What is the financial advantage (disadvantage) of discontinuing Department B? O $(128,000) $(113,800) Total $ 800,000 320,000 480,000 400,000 $ 80,000 O $(124,000) Department B $ 450,000 200,000 250,000 260,000 $90,000 $ (10,000)
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