Market has three divisions (Chad, Talbot, and Heather) with the following information Chad Talbot Heather Total $60,000 $50,000 $40,000 $150,000 $35.000 $28.000 $30.000 $93.000 $25,000 $22.000 $10,000 $57.000 $5.500 $4.500 $6.500 $16.500 $19.500 $17.500 $3,500 $40,500 Segment Margin Less: Common Fixed Costs $11.000 $10.500 $6.000 $27.500 Net Operating Income (Loss) $8.500 $7.000 ($2.500 $13.000 Sales Revenue Var, cost CM Less: Direct Fixed Cost Now suppose that $4.000 of the common foxed costs could be avoided if the Heather division was eliminated. Now how much will Market's net operating income increase or decrease if Heather is eliminated? $500 Increase $500 decrease O$1.500 decrease 500 incre

Market has three divisions (Chad, Talbot, and Heather) with the following information Chad Talbot Heather Total $60,000 $50,000 $40,000 $150,000 $35.000 $28.000 $30.000 $93.000 $25,000 $22.000 $10,000 $57.000 $5.500 $4.500 $6.500 $16.500 $19.500 $17.500 $3,500 $40,500 Segment Margin Less: Common Fixed Costs $11.000 $10.500 $6.000 $27.500 Net Operating Income (Loss) $8.500 $7.000 ($2.500 $13.000 Sales Revenue Var, cost CM Less: Direct Fixed Cost Now suppose that $4.000 of the common foxed costs could be avoided if the Heather division was eliminated. Now how much will Market's net operating income increase or decrease if Heather is eliminated? $500 Increase $500 decrease O$1.500 decrease 500 incre

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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The Fountain Corporation data for the current year and prior year is as follows: Current year Prior year $76,200 $60,000 $59,400 $51,200 $82,500 $38,000 $47,880 $18,420 $618,000 $478,140 $139,860 $47,860 $50,000 $92,000 $80,000 $23,000 $20,000 $69,000 $60,000 With respect to long- term liabilities, what would a horizontal analysis report? Account Current assets Account receivable Merchandise inventory Current liabilities Long-term liabilities Common stock (5,000 shares) Retained earnings Net sales revenue COGS Gross Profit Selling/General expenses Net income before taxes Income tax expense Net Income A. Long-term liabilities increased by $8,000 B. Long-term liabilities decreased by $8,000. OC. Long-term liabilities increased by 21.05%. OD. Long-term liabilities decreased by 21.05%. ithat $44,000 $40,000 $55,000 $30,000 $42,000 $17,000 $515,000 $385,000 $130,000
The following information is available for Kiss Company: $101,500 $ 95,000 $ 42,500 $ 25,500 Sales Operating expenses Operating assets Stockholder's equity Cost of capital 8% What is Kiss Company's residual income? O $3,100. O $2,040. O $4,460. O $3,400.
The Maxim Corporation reported the following operating results for its three divisions: South, West, and East. West Division $1,700,000 50,000 East Division $2,000,000 $ $ 100,000 $ 625,000 $ 800,000 Sales. After-tax income Divisional assets. Which division has the largest asset turnover? Multiple Choice O South. West. South Division $ 380,000 $ 20,000 $ 200,000 East All three divisions have the same asset turnover.
Lasky Manufacturing has two divisions: Carolinas and Northeast. Lasky has a cost of capital of 7.5 percent. Selected financial information (in thousands of dollars) for the first year of business follows: Sales revenue Income Divisional assets (beginning of year) Current liabilities (beginning of year) RAD expenditures Carolinas $1,600 160 1,000 240 800 Northeast $5,500 Complete this question by entering your answers in the tabs below. 432 1,500 240 720 R&D is assumed to benefit two periods. All R&D is spent at the beginning of the year. Required: a-1. Evaluate the performance of the two divisions assuming Lasky Manufacturing uses economic value added (EVA). a-2. Which division had the better performance?
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You are given the following information for Smashville, Incorporated. $249,000 $ 2,900 $ 394,000 $ 92,000 $ 7,400 $ 13,000 Cost of goods sold: Investment income: Net sales: Operating expense: Interest expense: Dividends: Tax rate: Current liabilities: Cash: Long-term debt: Other assets: Fixed assets: Other liabilities: Investments: Operating assets: 21% Gross margin Operating margin Return on assets Return on equity $ 22,000 $ 21,000 $9,000 $ 37,000 $ 139,000 $ 5,000 $ 13,000. $ 49,000 Calculate the gross margin, the operating margin, return on assets, and return on equity. Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. % % % %
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Required information [The following information applies to the questions displayed below.] Suresh Company reports the following segment (department) income results for the year. Sales Department M $ 68,000 Department N $ 38,000 Department 0 $ 65,000 Department P $ 47,000 Department T $ 33,000 Total $ 251,000 Expenses Avoidable 12,300 Unavoidable Total expenses Income (loss) 53,800 66,100 39,400 15,600 55,000 23,900 4,700 28,600 16,500 36,400 42,300 13,300 134,400 123,800 52,900 55,600 258,200 $ 1,900 $ (17,000) $ 36,400 $ (5,900) $ (22,600) $ (7,200) b. Compute the total increase in income if the departments with sales less than avoidable costs, as identified in part a, are eliminated. Total increase in income $ 3,700
QUESTION 15 The following financial information is available for Beasties upper and lower divisions. Upper Lower Revenues $850,000 $700,000 Operating Expenses 470,000 460,000 Operating Income $380,000 $240,000 Assets Invested $2,000,000 $1,100,000 What is the ROI for the Upper Division? 21.8% 17.9% 19.0% 24.1%
Suresh Company reports the following segment (department) income results for the year. Department M Department N Department 0 Department P $ 82,000 $ 44,000 $ 78,000 $ 65,000 Sales Expenses Avoidable Unavoidable Total expenses Income (loss) Department Department M Department N Department O Department P Department T 17,300 45,400 57,800 21,600 75, 100 67,000 $ 6,900 $ (23,000) Decision 18,000 5,700 23,700 $ 54,300 21,500 54,300 75,800 $ (10,800) Department T $ 43,000 51,300 20,300 71, 600 $ (28,600) Total $ 312,000 a. If the company plans to eliminate departments that have sales less than avoidable costs, which department(s) would be eliminated? 153,500 159, 700 313, 200 $ (1,200)