Subject :- Accounting Middleton Associates is a consulting firm that specializes in information systems for construction and landscaping companies. The firmhas two offices-one in Toronto and one in Vancouver. The firm classifies the direct costs of consulting jobs as variable costs. Asegmented contribution format income statement for the company's most recent year is given below:SalesVariable expensesContribution margin-Traceable fixed expensesOffice segment marginCommon fixed expensesnot traceable to officesOperating incomeTotal Company$750,000 100.0%373,500 49.80376,500 50.20121,200 16.16Increase in operating incomeToronto$130,000 100% $620,000 100%32,500 25341,000 55279,000 4574,400 12255,300 34.04 $50,700 39% $204,600 33%120,000 16.00$135,300 18.04%Office97,500 7546,800 36VancouverRequired:1. By how much would the company's operating income increase if Vancouver increased its sales by $71,000 per year? Assume nochange in cost behaviour patterns. 2-a. Refer to the original data. Assume that sales in Toronto increase by $50,000 next year and that sales in Vancouver remainunchanged. Assume no change in fixed costs. Prepare a new segmented income statement for the company. (Round your percentageanswers to 2 decimal places.).Total CompanyAmount%TorontoAmountSegments%VancouverAmount%

Increase in Sales of Vancouver $71,000 Contriubution margin of Vancouver 45% Increase in…

Middleton Associates is a consulting firm that specializes in information systems for construction and landscaping companies. The firm has two offices-one in Toronto and one in Vancouver. The firm classifies the direct costs of consulting jobs as variable costs. A segmented contribution format income statement for the company's most recent year is given below: Office Sales Variable expenses Contribution margin: Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Operating income Toronto Vancouver Total Company $750,000 100.0% $130,000 100% $620,000 100% 373,500 49.80 376,500 50.20 32,500 25 341,000 55 97,500 75 279,000 45 46,800 36 121,200 16.16 74,400 12 255,300 34.04 $ 50,700 39% $204,600 33% increase in operating income 120,000 16.00 $135, 300 18.04% Required: 1. By how much would the company's operating income increase if Vancouver increased its sales by $71,000 per year? Assume no change in cost behaviour patterns.

Middleton Associates is a consulting firm that specializes in information systems for construction and landscaping companies. The firm has two offices-one in Toronto and one in Vancouver. The firm classifies the direct costs of consulting jobs as variable costs. A segmented contribution format income statement for the company's most recent year is given below: Office Sales Variable expenses Contribution margin: Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Operating income Toronto Vancouver Total Company $750,000 100.0% $130,000 100% $620,000 100% 373,500 49.80 376,500 50.20 32,500 25 341,000 55 97,500 75 279,000 45 46,800 36 121,200 16.16 74,400 12 255,300 34.04 $ 50,700 39% $204,600 33% increase in operating income 120,000 16.00 $135, 300 18.04% Required: 1. By how much would the company's operating income increase if Vancouver increased its sales by $71,000 per year? Assume no change in cost behaviour patterns.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...

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Middleton Associates is a consulting firm that specializes in Information systems for construction and landscaping companies. The firm has two offices-one in Toronto and one in Vancouver. The firm classifies the direct costs of consulting jobs as variable costs. A segmented contribution format income statement for the company's most recent year is given below. Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Connon fixed expenses not traceable to offices Operating Income Required: Office Total Company Toronto Vancouver $950,000 100.ex $190,000 100x $760,000 100% 513,000 54.00 57,000 30 456,000 60 437,000 46.00 133,000 70 384,000 40 174,800 18.40 68,400 36 106,400 14 262,200 27.60 $64,600 34% $197,600 26% 190,000 20.00 $ 72,200 7.60% 1. By how much would the company's operating Income Increase if Vancouver Increased its sales by $85,000 per year? Assume no change in cost behaviour patterns. Increase in operating income 2-a. Refer to the original…
A company uses charging rates to allocate service department costs to the using departments. The accountant compiled the following information on one of the service departments: If Department K plans to use 1,350 hours of the service departments service in the coming year, how much of the service departments cost is allocated to Department K? a. 3,375 b. 27,300 c. 26,325 d. 23,950
A manufacturing company has two service and two production departments. Human Resources and Machine Repair are the service departments. The production departments are Grinding and Polishing. The following data have been estimated for next years operations: The direct charges identified with each of the departments are as follows: The human resources department services all departments of the company, and its costs are allocated using the numbers of employees within each department, while machine repair costs are allocable to Grinding and Polishing on the basis of machine hours. 1. Distribute the service department costs, using the direct method. 2. Distribute the service department costs, using the sequential distribution method, with the department servicing the greatest number of other departments distributed first.
A manufacturing company has two service and two production departments. Building Maintenance and Factory Office are the service departments. The production departments are Assembly and Machining. The following data have been estimated for next years operations: The direct charges identified with each of the departments are as follows: The building maintenance department services all departments of the company, and its costs are allocated using floor space occupied, while factory office costs are allocable to Assembly and Machining on the basis of direct labor hours. 1. Distribute the service department costs, using the direct method. 2. Distribute the service department costs, using the sequential distribution method, with the department servicing the greatest number of other departments distributed first.
The accountant for PNW, LLC has prepared a contribution format income statement. Assume that the following information is within the relevant range. Sales (9,000 units) Variable expenses Contribution margin Fixed expenses $540,000 405,000 135,000 130,500 Net operating income $ 4,500 Assuming that the information provided is within the relevant range, the contribution margin ratio is closest to:
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The following is a summarized income statement for McClaron Manor Co.'s profit center 12608 for April: Contribution Margin $ 176,000 Period Expenses $ 12,000 Manager' s Salary $ 2,100 Corporate Expense Allocation $ 8,100 $ (22,200 ) Net Income $ 153,800 Which of the following amounts is most likely subject to the control of the profit center's manager? (CPA, adapted) Multiple Choice Contribution Margin of $176,000 and Period Expenses of $14,100. Contribution Margin of $176,000. Contribution Margin of $176,000 and Period Expenses of $22,200. Contribution Margin of $176,000 and Period Expenses of $12,000.
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Assume you are the department B manager for Marley's Manufacturing. Marley's operates under a cost-based transfer structure. Assume you receive the majority of your raw materials from department A, which sells only to department B (they have no outside sales). After calculating the operating income in dollars and operating income in percentage, analyze the following financial information to determine costs that may need further investigation. Marley's ManufacturingIncome StatementMonth Ending August 31, 2018 Dept. A Dept. B Sales $21,000 $52,000 Cost of goods sold 9,870 27,040 Gross profit $11,130 $24,960 Expenses: Utility expenses $840 $3,120 Wages expense 5,040 10,920 Costs allocated from corporate 2,100 14,560 Total expenses $7,980 $28,600 Operating income/(loss) in dollars $fill in the blank 1 $fill in the blank 2 Operating income/(loss) in percentage fill in the blank 3 % fill in the blank 4 % Department B had…
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