Keith Inc. has 4 product lines: sour cream, ice cream, yogurt, and butter. Demand of individual products is not affected by changes in other product lines. 30% of the fixed costs are direct, andthe other 70% are allocated. Results of June follow:Units soldRevenueVariable departmental costsFixed costsNet income (loss)Sour Cream2,000$ 10,0006,0005,000$ (1,000)Ice Cream500$ 20,000$13,0002,0005,000Yogurt$400$ 10,0004,2003,0002,800Butter200$ 20,0004,8007,000$ 8,200Total3,100$ 60,00028,00017,000$ 15,000Prepare an incremental analysis of the effect of dropping the sour cream product line. (Ent negative amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).)SUPPORT

The incremental analysis is performed to analyze the effect of decision on the business or its…

Answered: Keith Inc. has 4 product lines: sour…

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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REQUIRED: How much is the company's overall income?
Pathways Careers, Inc. has two products-Resume Reader and Cover Letter Cure. Financial data for both the products follow: Resume Cover Letter Reader Cure 2,600 units 1,300 units Units sold Sales price per unit Variable manufacturing cost per unit Sales commission (% of sales) $600 320 6% $1,000 650 4% Pathways has two sales representatives-Curtis Muller and Willow Brown. Each sales representative sold a total of 1,950 units during the month of March. Curtis had a sales mix of 60% Resume Reader and 40% Cover Letter Cure. Willow had a sales mix of 80% Resume Reader and 20% Cover Letter Cure. Based on the above information, calculate Willow's total contribution to company profits. OA. $380,640 O B. $120,900 OC. $501,540 OD. $573,300
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Sandhill Inc. has 4 product lines: sour cream, ice cream, yogurt, and butter. Demand of individual products is not affected by changes in other product lines. 30% of the fixed costs are direct, and the other 70% are allocated. Results of June follow: Sour Cream Ice Cream Yogurt Butter Total Units sold 2,400 600 480 240 3,720 Revenue $12,000 $24,000 $12,000 $24,000 $72,000 Variable departmental costs 7,200 15,600 5,040 5,760 33,600 Fixed costs 6,000 2,400 3,600 8,400 20,400 Net income (loss) $(1,200) $6,000 $3,360 $9,840 $18,000 Prepare an incremental analysis of the effect of dropping the sour cream product line. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
ulcan Company's contribution format income statement for June is as follows: Vulcan Company Income Statement For the Month Ended June 30 Sales Variable expenses Contribution margin Fixed expenses Net operating income $ 900,000 408,000 492,000 455,000 $ 37,000 Management is disappointed with the company's performance and is wondering what can be done to improve profits. By examining sales and cost records, you have determined the following: a. The company is divided into two sales territories-Northern and Southern. The Northern Territory recorded $400,000 in sales and $208,000 in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern Territory. Fixed expenses of $164,000 and $125,000 are traceable to the Northern and Southern Territories, respectively. The rest of the fixed expenses are common to the two territories. b. The company is the exclusive distributor for two products-Paks and Tibs. Sales of Paks and Tibs totaled $150,000 and…
Cullumber Company makes 2 products, sleep masks and sleep socks. Additional information follows: Sleep Socks 2,800 $34,000 10,004 Units Sales Variable costs Fixed costs Net income Profit per unit Sleep Masks Sleep Masks 4,300 $69,000 38,986 11,954 $18,060 Sleep Socks $4.20 Compute the Contribution margin per unit. (Round answers to 2 decimal places, e.g. 15.25.) 12,012 $ $11,984 $4.28 Contribution margin per unit
Ramirez Corp. has two customers, C1 and C2. Ramirez Corp currently allocates indirect costs to customers at a rate of 5% of customer revenue. Data for C1 and C2 are as follows: C1 C2 Selling Price per Unit $20.00 $20.00 Units Sold 50,000 12,000 Manufacturing Cost per unit $15.00 $15.00 Number of Purchase Orders 112 27 Number of deliveries 105 68 Number of Inspection 77 50 Customer Visits 40 35 A. Using the current costing system to allocate support costs, calculate Operating Income for customers C1 and C2. Ramirez Corp.'s Management Accountant has gathered the following ABC rate information: ABC Cost Rate Number of purchase orders $40 per purchase order $85 per delivery $200 per expedited delivery Number of deliveries Number of inspections Number of customer visits $400 per customer visit b. Calculate the total support cost allocated to C1 & C2 using the Activity Based Costing (ABC) system. c. Comparing the indirect cost allocated in part a. to the indirect cost allocated in part b.…
Crane Corporation produces and sells two products, Basic and Super. Data for activity during March are as follows: Basic Super Sales $213,000 $263,000 Contribution margin 25% 28% Total fixed costs $78,000 $78,000 Prepare a segment margin income statement. Omit the heading. Common fixed costs of $38,000 are allocated Basic and $43,000 to Super. (If the amount is negative then enter with a negative sign preceding the number, e.g. -5,125 or parenthesis, e.g. (5,125).) Basic Super Total $ $ $ tA
Annual cash inflows from two competing investment projects are given below: Investment A $ 4,000 5,000 6,000 7,000 $ 22,000 Year 1234 The discount rate is 10%. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: Compute the present value of the cash inflows for each investment. Year 1 2 3 4 $ Investment B $ 7,000 6,000 5,000 4,000 $ 22,000 Present Value of Cash Flows Investment A 0 $ Investment B 0 M ...
A28
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