bvsg Rooney Company operates three segments. Income statements for the segments imply that profitability could be improved if SegmentA were eliminated.ROONEY COMPANYIncome Statements for Year 2SegmentSalesCost of goods sold$ 169,000(122,000)$239,000$262,000(88,000)(87,000)Sales commissionsContribution marginGeneral fixed operating expenses (allocation of president's salary)Advertising expense (specific to individual divisions)Net income (loss)(17,000)30,000(43,000)(26,000)(29,000)125,000146,000(7,000)$ (20,000)(32,000)(17,000)(35,000)$ 76,000 $111,000Requireda. Prepare a schedule of relevant sales and costs for Segment Ab. 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

Relevant (sales and) costs refer to all of the (sales and) costs of pursuing a product or service…

Answered: Rooney Company operates three segments.…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 37P

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Franklin Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. FRANKLIN COMPANY Income Statements for Year 2 Segment Sales Cost of goods sold Sales commissions A B C $ 167,000 $ 241,000 $ 245,000 (128,000 ) (90,000) (19,000) (23,000) (79,000) (22,000) 128,000 144,000 (38,000 ) (39,000) (35,000 ) (3,000 ) (18,000 ) 0 $ (21,000 ) $ 71,000 $ 109,000 Contribution margin General fixed operating expenses (allocation of president's salary) Advertising expense (specific to individual divisions) 20,000 Net income (loss) 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.
Lechon Company provided the following data for the current year: Sales Cost of goods sold Expenses Depreciation Income tax expense The entity has two major reportable segments, A and B. An analysis revealed that P1,000,000 of the total depreciation expense and P2,000,000 of the expenses are related to general corporate activities. The remaining expenses and sales are directly allocable to segment activities according to the following percentages: Sales Cost of goods sold Expenses Depreciation P60,000,000 28,000,000 14,000,000 4,000,000 4,000,000 Segment A 40% 35 40 40 Segment B 45% Others 15% 15 20 15 50 40 45 What amount should be reported as net income of Segment A?
An entity and its divisions reported the following for the current year: Sales to unaffiliated customers 40,000,000 Intersegment sales of product similar to those sold to unaffiliated customers 12,000,000 Interest earned on loans to other operating segments 1,000,000 The entity and all of its divisions are engaged solely in manufacturing operations. To qualify as reportable segment, the segment revenue should at least be what amount? A. 5,300,000 B. 4,100,000 C. 5,200,000 D. 4,000,000
Subject- account
s
TATUM Company, a publicly owned corporation, assess performance and makes operating decisions using the following information for its reportable segments: Total revenues P700,000 Total profit P50,000 Included in the total profit are intersegment profits of P5,000. In addition, TATUM has P1,000 of common costs for its reportable segments that are not allocated in reports used internally. For purposes of segment reporting, TATUM should report segment profit of a. P44,000 b. P51,000 c. P50,000 d. P70,000
Vincenzo Corporation is a manufacturer with four product lines. Below is some financial information about each of the four product lines. Required:Calculate, explain, and determine which of the segments are reportable based on the:a. Revenue testb. Operating profit (loss) testc. Identifiable assets testd. 75 percent combined revenue test
Under the overall size test, what is total revenues that all reportable segments must at least report so that entity is not required to identify any additional reportable segments? * MEXICO Company and all its divisions are engaged in a merchandising business. The 2021 income statement of MEXICO showed the following: Sales to unaffiliated customers 20,000,000 Gain on sale of machinery 1,500,000 Operating expenses 15.000,000) Net income 6,500,000 In the process of determining the consolidated net income, intersegment sales of P3,000,000 were eliminated.
Agustin Industries is a division of a major corporation. Data concerning the most recent year appears below: Sales Net operating income Average operating assets The division's margin is closest to: Multiple Choice O O 3.5% 19.7% 16.2% 15.0% $ 18,210,000 $ 637,350 $ 4,250,000
1. Using the data below for Ace Guitar Company: Region A Region B Sales $571,500 $698,500 Cost of goods sold 217,200 265,400 Selling expenses 137,200 167,600 Service department expenses Purchasing $213,400 Payroll accounting 142,200 Allocate service department expenses proportionally to the sales of each region, determine the divisional income from operations for the Regions A and B. For interim calculations, round the percentages to one decimal place. Region A $ Region B $
The following are the details from the income statements of division S and division C for the year ending March 2014. Figures in '000 Tshs – Sales revenue 100,000 120,000 - Operating cost - Interest cost 64,000 75,000 | 6,000 10,000 - Capital invested – Capital invested include debt - WACC - Rate of corporate tax - Required; - Calculate NOPAT as adjusted for EVA and also calculate EVA for both the divisions. Which Division performed better. 122,000 150,000 10% 12.5% 40% 44% -

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