MSI's information related to the Toddle Town Tours collection follows: Segmented Income Statement for MSI's Toddle Town Tours Product Lines Pet Store Grocery Getaway Post Office Polka Parade $ 50,000 23,000 $ 27,000 4,800 $ 22,200 14,400 Total Sales revenue Variable costs Contribution margin Less: Direct Fixed costs Segment margin Less: Common fixed costs* Net operating income (loss) $ 45,000 19,000 26,000 3,100 15,000 $110,000 5,000 $ 58,000 22,900 12,960 11,400 1,500 $ 46,600 31,680 4,320 (2,820) $ 14,920 7,800 *Allocated based on total sales revenue.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Homework Question 8
MSI is considering eliminating a product from its ToddleTown Tours collection. This collection is aimed at children one to three years of age and includes “tours” of a hypothetical town. Two products, The Pet Store Parade and The Grocery Getaway, have impressive sales. However, sales for the third CD in the collection, The Post Office Polka, have lagged the others. Several other CDs are planned for this collection, but none is ready for production.
MSI’s information related to the ToddleTown Tours collection follows is attached.
1. Calculate the incremental effect on profit if the POP product is eliminated.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images