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Required: 1. Complete the income statement 2. Do you advise the company to delete any product? Justify. 3. Prepare the income statement in case of deleting a product.

Required: 1. Complete the income statement 2. Do you advise the company to delete any product? Justify. 3. Prepare the income statement in case of deleting a product.

FINANCIAL ACCOUNTING
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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Question 1: The following is the income statement of Giza Co. for the period ended December 31, 2011: Required: Description Sales Revenue Variable cost Managerial Accounting - Assignment 2 Contribution margin Avoidable fixed cost - Unavoidable fixed cost Net income (loss) Product X 60,000 40000 ? 0 10,000 ? Product Y 90,000 ? 20,000 8,000 15,000 ? Product Z 50,000 34000 ? 20,000 5000 ? 1. Complete the income statement 2. Do you advise the company to delete any product? Justify. 3. Prepare the income statement in case of deleting a product. 4. If the company can increase the sales of all products by 20%, do you still advice the company to delete any product? Justify. Total
Transcribed Image Text:Question 1: The following is the income statement of Giza Co. for the period ended December 31, 2011: Required: Description Sales Revenue Variable cost Managerial Accounting - Assignment 2 Contribution margin Avoidable fixed cost - Unavoidable fixed cost Net income (loss) Product X 60,000 40000 ? 0 10,000 ? Product Y 90,000 ? 20,000 8,000 15,000 ? Product Z 50,000 34000 ? 20,000 5000 ? 1. Complete the income statement 2. Do you advise the company to delete any product? Justify. 3. Prepare the income statement in case of deleting a product. 4. If the company can increase the sales of all products by 20%, do you still advice the company to delete any product? Justify. Total
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