On the basis of the following data, the general manager of Featherweight Shoes Inc. decided to discontinue Children’s Shoes because it reduced income from operations by $17,000. Labels Cash flows from investing activities Costs Amount Descriptions Fixed costs Gain on sale of investments Income (loss) Loss on sale of investments Revenues Total costs Variable cost of goods sold Variable selling and administrative expenses Featherweight Shoes Inc.Product-Line Income StatementFor the Year Ended April 30, 20Y81Children's ShoesMen's ShoesWomen's ShoesTotal2 Sales$235,000.00$300,000.00$500,000.00$1,035,000.003 Costs of goods sold:Variable costs$130,000.00$150,000.00$220,000.00$500,000.004Fixed costs41,000.0060,000.00120,000.00221,000.0056Total cost of goods sold$171,000.00$210,000.00$340,000.00$721,000.007 Gross profit$64,000.00$90,000.00$160,000.00$314,000.008 Selling and administrative expenses:Variable selling and admin. expenses$46,000.00$45,000.00$95,000.00$186,000.0010Fixed selling and admin. expenses35,000.0020,000.0025,000.0080,000.0011Total selling and admin. expenses$81,000.00$65,000.00$120,000.00$266,000.0012 Income (loss) from operations$(17,000.00)$25,000.00$40,000.00$48,000.00Required:What is the flaw in this decision, if it is assumed fixed costs would not be materially affected by the discontinuance? (Prepare the DifferentialAnalysis before responding to the questions.) Prepare a differential analysis to determine the flaw in the general manager's decision. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must entersubtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required.Differential AnalysisContinue (Alternative 1) or Discontinue (Alternative 2) Children's ShoesContinueDiscontinueDifferential Effect1Children's ShoesChildren's Shoeson Income(Alternative 1)(Alternative 2)(Alternative 2)34 (Label)56

Differential analysis is the analysis made by considering two alternative course of action to earn…

Prepare a differential analysis to determine the flaw in the general manager's decision. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon () will automatically appear if required. Differential Analysis Continue (Alternative 1) or Discontinue (Alternative 2) Children's Shoes Continue Discontinue Differential Effect Children's Shoes Children's Shoes on Income 2 (Alternative 1) (Alternative 2) (Alternative 2) 4 (Label) 5

Prepare a differential analysis to determine the flaw in the general manager's decision. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon () will automatically appear if required. Differential Analysis Continue (Alternative 1) or Discontinue (Alternative 2) Children's Shoes Continue Discontinue Differential Effect Children's Shoes Children's Shoes on Income 2 (Alternative 1) (Alternative 2) (Alternative 2) 4 (Label) 5

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter2: Basic Managerial Accounting Concepts

Section: Chapter Questions

Problem 4MCQ

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The MER-92566 merchandising company reported the following information for last year: Amount $. 1,312,000 $ 410 $ 46 $ 18 $ 150,000 $ 105,000 $ 75,000 $ 115,000 $310,000 Sales Selling price per unit Variable selling expense per unit Variable administrative expense per unit Total fixed selling expense Total fixed administrative expense Beginning merchandise inventory Ending merchandise inventory Merchandise purchases The MER-92566 company's contribution margin per unit is closest to: (Carry out your calculations up to 2 decimal places) O $392 O $346 O $262 O $364
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a, b, & c
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Assume the following information for a merchandising company: Number of units sold 20,000Selling price per unit $ 30Variable selling expense per unit $ 3.6Variable administrative expense per unit $ 2.6Fixed administrative expenses $ 50,000Beginning merchandise inventory $ 24,000Ending merchandise inventory $ 19,000Merchandise purchases $ 340,000 What is the contribution margin?
XYZ, Inc. reports the following information for November: Sales Revenue $800,000 Variable Cost of Goods Sold 110,000 Fixed Cost of Goods Sold 45,000 Variable Selling and Administrative Costs 100,000 Fixed Selling and Administrative Costs 70,000 Calculate the gross profit for November using absorption (traditional) costing. Question 18Select one: A. $ 730,000 B. $690,000 C. $700,000 D. $645,000
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Assume the following information for a merchandising company: Number of units sold 20,000 Selling price per unit Variable selling expense per unit Variable administrative expense per unit Fixed administrative expenses $ 30 $3.40 Beginning merchandise inventory Ending merchandise inventory Merchandise purchases $ 2.40 $ 50,000 $24,000 $ 19,000 $340, 000 What is the contribution margin?
Assume the following information for a merchandising company: Number of units sold Selling price per unit. Variable selling expense per unit Variable administrative expense per unit Fixed administrative expenses Beginning merchandise inventory Ending merchandise inventory Merchandise purchases What is the amount of total variable expenses? 20,700 $ 30 $ 3 $2 $ 50,000 $ 24,000 $ 19,000 $ 341,000
Data concerning Cutshall Enterprises Corporation's single product appear below: Selling price per unit $225 Variable expense per unit $98 Fixed expense per month $449,640 The unit sales to attain the company's monthly target profit of $32,000 is a. 3,540 units b. 2,141 units c. 4,915 units d. 3,792 units

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Labels
Cash flows from investing activities
Costs
Amount Descriptions
Fixed costs
Gain on sale of investments
Income (loss)
Loss on sale of investments
Revenues
Total costs
Variable cost of goods sold
Variable selling and administrative expenses