Patterson Company operates three segments. Income statements for the segmentsimply that profitability could be improved if Segment A were eliminated.PATTERSON COMPANYIncome Statements for the Year 2014SegmentSalesAВC$162,000 $242,000 $263,000(84,000)(30,000)(80,000)(31,000)Cost of goods soldSales commissions(128,000)(18,000)Contribution marginGeneral fixed oper. exp. (allocation ofpresident's salary)Advertising expense (specific to individualdivisions)16,000128,000152,000(35,000)(39,000)(33,000)(3,000)(15,000)(26,000) $ 78,000 119,000Net incomeRequired:a. Prepare a schedule of relevant sales and costs for Segment A.Relevant Rev. and Cost items for Segment AEffect on incomeb. Prepare comparative income statements for the company as a whole under twoalternatives: (1) the retention of Segment A and (2) the elimination of Segment APATTERSON COMPANYComparative Income Statements for the Year 2014Eliminate Seg. AKeep Seg. ADecisionSalesCost of goods soldSales commissionsContribution marginGen. fixed operating expensesAdvertising expenseNet Income

a) Prepare the schedule of relevant revenue and costs for Segment A:

Answered: Patterson Company operates three…

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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Using the data below for the Ace Guitar Company: A Region B Region Sales $521,500 $968,500 Cost of goods sold 198,200 368,000 Selling expenses 125,200 232,400 Service department expenses Purchasing $250,300 Payroll accounting 166,900 Allocate service department expenses proportional to the sales of each region. Determine the divisional income from operations for the A and B regions. For interim calculations, round percentages to one decimal place. A Region $ B Region $
Buckley Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. BUCKLEY COMPANY Income Statements for Year 2 Segment A B C Sales $ 330,000 $ 480,000 $ 500,000 Cost of goods sold (242,000 ) (184,000 ) (190,000 ) Sales commissions (30,000 ) (44,000 ) (44,000 ) Contribution margin 58,000 252,000 266,000 General fixed operating expenses (allocation of president’s salary) (92,000 ) (92,000 ) (92,000 ) Advertising expense (specific to individual divisions) (6,000 ) (20,000 ) 0 Net income (loss) $ (40,000 ) $ 140,000 $ 174,000 Required Prepare a schedule of relevant sales and costs for Segment A. Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment A and (2) the elimination of Segment A. Options for required A table are: Advertising…
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Gough Corporation has two divisions. Domestic and Foreign. Data from the most recent month appears below: 6. Total Company $668,000 Domestic Foreign $321,000 147,660 173,340 134,000 $ 39,340 Sales... Variable expenses. Contribution margin. Traceable fixed expenses. 220,530 447,470 335,000 112,470 $347,000 72,870 274,130 201,000 $ 73,130 Segment margin.. Common fixed expenses.. 73,480 $ 38,990 Net operating income.. The break-even in sales dollars for the company as a whole is closest to: A. $502,579 B. $107,216 C. $436,424 D. $609,794
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Severo S.A. of Sao Paulo, Brazil, is organized into two divisions. The company's contribution format segmented income statement (in terms of the Brazilian currency, the real, R) for last month is given below: Sales Variable expenses Contribution margin Traceable fixed expenses: Advertising Selling and administrative Depreciation Total traceable fixed expenses Divisional segment margin Common fixed expenses Operating income Sales Traceable fixed expenses: Total Company R 3,675,000 1,745,500 1,929,500 Traceable fixed expenses: R Advertising Selling and administrative Depreciation Variable expenses as a percentage of sales Total traceable fixed expenses 634,000 449,000 233,000 1,316,000 Common fixed expenses: Top management can't understand why the Leather Division has such a low segment margin when its sales are only 25% less than sales in the Cloth Division. As one step in isolating the problem, management has directed that the Leather Division be further segmented into product lines.…
White has a reportable segment if the segment's revenue will total to what amount? The following information pertains to the White Company and its divisions for the year ended December 31, 2014: Sales to unaffiliated customers P10,000,000 Inter-segment sales of products similar to those sold to unaffiliated customers 2,000,000 White Company and all of its divisions are engaged solely in manufɛcturing operations. Your answer
Vikram Bhai

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