Help please... also for 2b.) $(41,000) **Security Check: Income Statement for the Year Ended May 31, 2024**This income statement provides a detailed breakdown of the financial performance for Security Check, specified by product lines: Industrial Systems and Household Systems. The statement includes figures for Net Sales Revenue, Cost of Goods Sold, Gross Profit, Selling and Administrative Expenses, and Operating Income for the fiscal year.**Product Line Analysis:**1. **Net Sales Revenue:** - Industrial Systems: $360,000 - Household Systems: $380,000 - Total: $740,0002. **Cost of Goods Sold:** - **Variable Costs:** - Industrial Systems: $37,000 - Household Systems: $47,000 - Total Variable Costs: $84,000 - **Fixed Costs:** - Industrial Systems: $260,000 - Household Systems: $63,000 - Total Fixed Costs: $323,000 - **Total Cost of Goods Sold:** - Industrial Systems: $297,000 - Household Systems: $110,000 - Total: $407,0003. **Gross Profit:** - Industrial Systems: $63,000 - Household Systems: $270,000 - Total Gross Profit: $333,0004. **Selling and Administrative Expenses:** - **Variable Expenses:** - Industrial Systems: $64,000 - Household Systems: $73,000 - Total Variable Expenses: $137,000 - **Fixed Expenses:** - Industrial Systems: $44,000 - Household Systems: $26,000 - Total Fixed Expenses: $70,000 - **Total Selling and Administrative Expenses:** - Industrial Systems: $108,000 - Household Systems: $99,000 - Total: $207,0005. **Operating Income (Loss):** - Industrial Systems: $(45,000) - Household Systems: $171,000 - Total Operating Income: $126,000**Summary:**The statement showcases the profitability of each product line, with Household Systems generating a significant operating income while Industrial Systems reported a loss. This financial document assists in evaluating the cost structures and profitability of different product segments within the company. **Study on the Industrial Systems Product Line****Background:**Members of the board are surprised that the industrial systems product line is not profitable. They commission a study to determine whether the company should drop the line. Company accountants estimate that dropping industrial systems will decrease the fixed cost of goods sold by $80,000 and decrease fixed selling and administrative expenses by $12,000.**Requirements:**1. **Differential Analysis:** - Prepare a differential analysis to determine if Security Check should discontinue the industrial systems product line.2. **Contribution Margin Income Statements:** - Create contribution margin income statements to determine Security Check’s total operating income under two scenarios: - (a) With the industrial systems line. - (b) Without the industrial systems line. - Compare the income differences between the two scenarios to your answer from the differential analysis in requirement 1.

Contribution margin income statement:Under this income statement, both the variable and fixed costs of the business are shown bifurcated. All the variable costs like cost of goods sold, and variable operating expenses are deducted from the sales revenue to arrive at the contribution margin. From the contribution margin, all the fixed costs are deducted to calculate the net income.

Business

Accounting

SECURITY CHECK Income Statement For the Year Ended May 31, 2024 Product Line Industrial Systems Household Systems Total Net Sales Revenue S 360,000 $ 380,000 $ 740,000 Cost of Goods Sold: Variable 37,000 47,000 84,000 Fixed 260,000 63,000 323,000 Total Cost of Goods Sold 297,000 110,000 407,000 Gross Profit 63,000 270,000 333,000 Selling and Administrative Expenses: Variable 64,000 73,000 137,000 Fixed 44,000 26,000 70,000 Total Selling and Administrative Expenses 108,000 99,000 207,000 Operating Income (Loss) S (45,000) $ 171,000 $ 126,000

SECURITY CHECK Income Statement For the Year Ended May 31, 2024 Product Line Industrial Systems Household Systems Total Net Sales Revenue S 360,000 $ 380,000 $ 740,000 Cost of Goods Sold: Variable 37,000 47,000 84,000 Fixed 260,000 63,000 323,000 Total Cost of Goods Sold 297,000 110,000 407,000 Gross Profit 63,000 270,000 333,000 Selling and Administrative Expenses: Variable 64,000 73,000 137,000 Fixed 44,000 26,000 70,000 Total Selling and Administrative Expenses 108,000 99,000 207,000 Operating Income (Loss) S (45,000) $ 171,000 $ 126,000

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter25: Departmental Accounting

Section: Chapter Questions

Problem 9SPA: INCOME STATEMENT WITH DEPART MENTAL DIRECT OPERATING MARGIN AND TOTAL OPERATING INCOME Durwood...

See similar textbooks

Similar questions

Calculate the profit margin (net income or net profit/total sales)for Rock Castle construction for this fiscal year. What’s the percentage
Solve this following requirements on these general accounting question
Security First Income Statement For the Year Ended May 31, 2018 Product Line Industrial Household Systems Systems Total Net Sales Revenue $310,000 $330,000 $640,000 Cost of Goods Sold: Variable 35,000 43,000 78,000 Fixed 240,000 64,000 304,000 Total Cost of Goods Sold 275,000 107,000 382,000 Gross Profit 35,000 223,000 258,000 Selling and Administrative Expenses: Variable 68,000 70,000 138,000 Fixed 40,000 22,000 62,000 Total Selling and Administrative Expenses 108,000 92,000 200,000 Operating Income (Loss) $(73,000) $131,000 $58,000 Members of the board of directors of Security First have received the following operating income data for the year ended may 31, 2018. Requirement 1. Prepare a differential analysis to show whether Security First should…
K Find online the annual 10-K report for Costco Wholesale Corporation (COST) as of August 30, 2020. a. Compute Costco's net profit margin, total asset turnover, and equity multiplier. b. Verify the DuPont Identity for Costco's ROE. c. Repeat the analysis from parts (a) and (b) using Walmart Stores (WMT) instead. Specifically, use Walmart's data as of January 31, 2020. Based on the DuPont Identity, what explains the difference between the two firms' ROE? a. Compute Costco's net profit margin, total asset turnover, and equity multiplier. The net profit margin is%. (Round to two decimal places.) (Round to two decimal places.) The total asset turnover is The total asset turnover is The equity multiplier is b. Verify the DuPont Identity for Costco's ROE. The ROE is%. (Round to two decimal places.) c. Repeat the analysis from parts (a) and (b) using Walmart Stores (WMT) instead. Specifically, use Walmart's data as of January 31, 2020. The net profit margin is%. (Round to two decimal places.)…
Need Ans? ? General Accounting
An extract from an outdoor equipment company's 2021 financial statements follows: Income statement Year ended December 31, 2021 Year ended December 31, 2020 Sales 27,764 26,982 Net income 1,132 (322) What was the company's profitability ratio for 2021? O A. 13.7% OB. 8.8% O C. 4.08% O D. 7.9%
Create a common-sized income statement given the following income statement data for the General Machine Truck Co. for the year ending December 31, 2021: Percent of Sales Sales $236,000 Cost of goods sold $150,980 Gross profit $85,020 Operating expenses $63,400 Operating profit $21,620 Interest expense $5,390 Pretax profit $16,230 Income taxes $4,058 Net income $12,172
View Policies Current Attempt in Progress Assume Sunland Company has the following reported amounts: Sales revenue $1,000,000, Sales returns and allowances $29,000, Cost of goods sold $649.599, and Operating expenses $215,600. (a) Compute net sales. Net sales $ (b) Compute gross profit. Gross profit S (c) Compute income from operations.
INCOME STATEMENT WITH DEPART MENTAL DIRECT OPERATING MARGIN AND TOTAL OPERATING INCOME Durwood Thomas operates the business Thomas Security that sells security equipment for commercial property and residential homes. The following information is provided for the year ended December 31, 20--: REQUIRED 1. Prepare an income statement showing departmental direct operating margin and total operating income. 2. Calculate departmental direct operating margin percentages.
Customers as a Cost Object Morrisom National Bank has requested an analysis of checking account profitability by customer type. Customers are categorized according to the size of their account: low balances, medium balances, and high balances. The activities associated with the three different customer categories and their associated annual costs are as follows: Additional data concerning the usage of the activities by the various customers are also provided: Required: (Note: Round answers to two decimal places.) 1. Calculate a cost per account per year by dividing the total cost of processing and maintaining checking accounts by the total number of accounts. What is the average fee per month that the bank should charge to cover the costs incurred because of checking accounts? 2. Calculate a cost per account by customer category by using activity rates. 3. Currently, the bank offers free checking to all of its customers. The interest revenues average 90 per account; however, the interest revenues earned per account by category are 80, 100, and 165 for the low-, medium-, and high-balance accounts, respectively. Calculate the average profit per account (average revenue minus average cost from Requirement 1). Then calculate the profit per account by using the revenue per customer type and the unit cost per customer type calculated in Requirement 2. 4. CONCEPTUAL CONNECTION After the analysis in Requirement 3, a vice president recommended eliminating the free checking feature for low-balance customers. The bank president expressed reluctance to do so, arguing that the low-balance customers more than made up for the loss through cross-sales. He presented a survey that showed that 50% of the customers would switch banks if a checking fee were imposed. Explain how you could verify the presidents argument by using ABC.
Classify each of the following actions as either being associated with the financial accounting information system (FS) or the cost management information system (CMS): a. Determining the total compensation of the CEO of a public company b. Issuing a quarterly earnings report c. Determining the unit product cost using TDABC d. Calculating the number of units that must be sold to break even e. Preparing a required report for the SEC f. Preparing a sales budget g. Using cost and revenue information to decide whether to keep, or drop, a product line h. Preparing an annual statement of financial position that conforms to generally accepted accounting principles (GAAP) i. Using cost and revenue information to decide whether to invest in a new production system or not j. Reducing costs by improving the overall quality of a product k. Using a debt-equity ratio and liquidity ratios from a balance sheet to assess the likelihood of bankruptcy l. Using a public companys financial statements to decide whether or not to buy its stock
Financial information for BDS Enterprises for the year-ended December 31, 20xx, was gathered from an accounting intern, who has asked for your guidance on how to prepare an income statement format that will be distributed to management. Subtotals and totals are included in the information, but you will need to calculate the values. A. In the correct format, prepare the income statement using the following information: B. Calculate the profit margin, return on investment, and residual income. Assume an investment base of $100,000 and 6% cost of capital. C. Prepare a short response to accompany the income statement that explains why uncontrollable costs are included in the income statement.