Ivanhoe Trivia Co. manufactures and sells two trivia products, the Square Trivia Game and the Round Trivia Game. Last quarter’s operating profits, by product, and for the company as a whole, were as follows: Square Round Total Sales revenue $12,800 $6,670 $19,470 Variable expenses 4,980 2,930 7,910 Contribution margin 7,820 3,740 11,560 Fixed expenses 2,810 4,200 7,010 Operating income $ 5,010 $(460 ) $ 4,550 Forty percent of the Round Game’s fixed costs could have been avoided if the game had not been produced or sold. If the Round Game had been discontinued before the last quarter, what would operating income have been for the company as a whole? Operating income without round $ _______
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Ivanhoe Trivia Co. manufactures and sells two trivia products, the Square Trivia Game and the Round Trivia Game. Last quarter’s operating profits, by product, and for the company as a whole, were as follows:
| Square | Round | Total | ||||||
| Sales revenue | $12,800 | $6,670 | $19,470 | |||||
| Variable expenses | 4,980 | 2,930 | 7,910 | |||||
| Contribution margin | 7,820 | 3,740 | 11,560 | |||||
| Fixed expenses | 2,810 | 4,200 |
|
7,010 | ||||
| Operating income | $ 5,010 | $(460 | ) | $ 4,550 |
Forty percent of the Round Game’s fixed costs could have been avoided if the game had not been produced or sold.
If the Round Game had been discontinued before the last quarter, what would operating income have been for the company as a whole?
| Operating income without round | $ _______
|
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