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Lisa earns a bonus set at 5% of her product line's actual operating income. How much is she currently expecting for her bonus? If sales in the chrome line and the iron line turn out as expected, how much will Lisa's bonus be if the crystal line is dropped? Current expected bonus Bonus if the crystal line is dropped $ 12050 6150

Lisa earns a bonus set at 5% of her product line's actual operating income. How much is she currently expecting for her bonus? If sales in the chrome line and the iron line turn out as expected, how much will Lisa's bonus be if the crystal line is dropped? Current expected bonus Bonus if the crystal line is dropped $ 12050 6150

FINANCIAL ACCOUNTING
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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Lisa earns a bonus set at 5% of her product line's actual operating income. How much is she currently expecting for her bonus? If sales in the chrome line and the iron line turn out as expected, how much will Lisa's bonus be if the crystal line is dropped? Current expected bonus 16 Bonus if the crystal line is dropped $ 12050 6150
Transcribed Image Text:Lisa earns a bonus set at 5% of her product line's actual operating income. How much is she currently expecting for her bonus? If sales in the chrome line and the iron line turn out as expected, how much will Lisa's bonus be if the crystal line is dropped? Current expected bonus 16 Bonus if the crystal line is dropped $ 12050 6150
Lisa currently manages the polished chrome division of Whispering Broadway, a business that specializes in ceiling light fixtures. Its performance has been stable for the past few years. However, the crystal division has been losing market share, while the rustic iron and chrome divisions have been growing. For the most part, executives feel that these changes are a result of customer preferences and current trends versus the quality or prices of their products. While they expect preferences to return to the crystal product line in the next five years, a short-term decision must be made now. Budgeted financial information for Whispering Broadway's upcoming fiscal year is presented below for each division Sales Variable costs Contribution margin Fixed costs Operating income Chrome $1,230,000 753,000 477,000 236.000 $241.000 Crystal $424.000 298,000 126.000 236,000 $(110,000) Iron $752,000 313,000 439,000 2:36,000 $203.000 All foxed costs are currently assigned evenly to all divisions.
Transcribed Image Text:Lisa currently manages the polished chrome division of Whispering Broadway, a business that specializes in ceiling light fixtures. Its performance has been stable for the past few years. However, the crystal division has been losing market share, while the rustic iron and chrome divisions have been growing. For the most part, executives feel that these changes are a result of customer preferences and current trends versus the quality or prices of their products. While they expect preferences to return to the crystal product line in the next five years, a short-term decision must be made now. Budgeted financial information for Whispering Broadway's upcoming fiscal year is presented below for each division Sales Variable costs Contribution margin Fixed costs Operating income Chrome $1,230,000 753,000 477,000 236.000 $241.000 Crystal $424.000 298,000 126.000 236,000 $(110,000) Iron $752,000 313,000 439,000 2:36,000 $203.000 All foxed costs are currently assigned evenly to all divisions.
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