Sunland Equipment sells equipment to sports enthusiasts. Doug Sunland, the company's president, just received the following incomestatement reporting the results of the past year.Sales revenueVariable cost of goods soldFixed cost of goods soldGross profitVariable operating expensesFixed operating expensesCommon fixed costsOperating income(a)Baseball$1,200,000eTextbook and Media814,000Save for Later110,300275,700162,80076,20057,500($20,800)SoccerBasketball$3,450,000 $2,275,0002,242,5001,825,600179,700158,5001,027,800552,00080,500124,000$271,300290,900227,50069,90092,900($99,400)Total$6,925,0004,882,100448,5001,594,400Doug is concerned that two of the company's divisions are showing a loss, and he wonders if the company should stop selling baseballand basketball gear to concentrate solely on soccer gear.942,300226,600274,400$151,100Prepare a segment margin income statement. Fixed cost of goods sold and fixed operating expenses can be traced to eachdivision. (If the amount is negative then enter with a negative sign preceding the number, eg. -5,125 or parenthesis, e.g. (5.125))BaseballSSoccerUUAttempts: 0 of 3 used Submit Answer

Income statement is the one which is prepared to report the profitability of the entity. It helps to…

Sunland Equipment sells equipment to sports enthusiasts. Doug Sunland, the company's president, just received the following income statement reporting the results of the past year. Sales revenue Variable cost of goods sold Fixed cost of goods sold Gross profit Variable operating expenses Fixed operating expenses Common fixed costs Operating income Baseball $1,200,000 814,000 110,300 275,700 162,800 eTextbook and Media 76,200 57,500 ($20,800) Save for Later Soccer Basketball $3,450,000 $2,275,000 2,242,500 1,825,600 179,700 158,500 1,027,800 290,900 552,000 227,500 80,500 69,900 124,000 92,900 $271,300 ($99,400) Doug is concerned that two of the company's divisions are showing a loss, and he wonders if the company should stop selling baseball and basketball gear to concentrate solely on soccer gear. Total $6,925.000 4,992.100 448,500 Prepare a segment margin income statement. Fixed cost of goods sold and fixed operating expenses can be traced to each division. (If the amount is negative then enter with a negative sign preceding the number, eg.-5,125 or parenthesis, eg. (5.125)) 1,594,400 942,300 226,600 274,400 $151.100 Baseball Soccer Attempts: 0 of 3 used Submit Answer

Sunland Equipment sells equipment to sports enthusiasts. Doug Sunland, the company's president, just received the following income statement reporting the results of the past year. Sales revenue Variable cost of goods sold Fixed cost of goods sold Gross profit Variable operating expenses Fixed operating expenses Common fixed costs Operating income Baseball $1,200,000 814,000 110,300 275,700 162,800 eTextbook and Media 76,200 57,500 ($20,800) Save for Later Soccer Basketball $3,450,000 $2,275,000 2,242,500 1,825,600 179,700 158,500 1,027,800 290,900 552,000 227,500 80,500 69,900 124,000 92,900 $271,300 ($99,400) Doug is concerned that two of the company's divisions are showing a loss, and he wonders if the company should stop selling baseball and basketball gear to concentrate solely on soccer gear. Total $6,925.000 4,992.100 448,500 Prepare a segment margin income statement. Fixed cost of goods sold and fixed operating expenses can be traced to each division. (If the amount is negative then enter with a negative sign preceding the number, eg.-5,125 or parenthesis, eg. (5.125)) 1,594,400 942,300 226,600 274,400 $151.100 Baseball Soccer Attempts: 0 of 3 used Submit Answer

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) Total $ 4,360,000 1,375,000 2,985,000 2,220,000 $ 765,000 Department Hardware $ 3,160,000 962,000 2,198,000 1,320,000 $ 878,000 Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department? Linens $ 1,200,000 413,000 787,000 900,000 $ (113,000) A study indicates that $371,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 13% decrease in the sales of the Hardware Department.
Crane Trivia Co. manufactures and sells two trivia products, the Square Trivia Game and the Round Trivia Game. Last quarter's operating profits, by product, and for the company as a whole, were as follows: Square Round Total Sales revenue $11,000 $6,860 $17,860 Variable expenses 5,000 2,910 7,910 Contribution margin 6,000 3,950 9,950 Fixed expenses 2,750 4,200 6,950 Operating income $ 3,250 $(250) $ 3,000 Forty percent of the Round Game's fixed costs could have been avoided if the game had not been produced or sold. If the Round Game had been discontinued before the last quarter, what would operating income have been for the company as a whole? Operating income without round $
Below are departmental income statements for a guitar manufacturer. The company classifies advertising, rent, and utilities as indirect expenses. The manufacturer is considering eliminating its Electric Guitar department because it shows a loss. Departmental Income Statements For Year Ended December 31 Acoustic Sales $ 102,900 Electric $ 84,000 Cost of goods sold Gross profit Expenses Advertising Depreciation-Equipment Salaries Supplies used Rent Utilities Total expenses 44,975 47,550 57,925 36,450 4,985 4,320 10,080 8,540 20,100 17,800 2,010 1,780 7,095 5,950 2,995 2,640 47,265 41,030 Income (loss) $ 10,660 $ (4,580) 1. Prepare a departmental contribution to overhead report. 2. Based on contribution to overhead, should the electric guitar department be eliminated?
Cymbal E-Motors is a fast-growing start-up firm that manufactures electric motors for bicycles. The following Income statement is avallable for April: Sales revenue (800 units @ $1,200 per unit) Less Manufacturing costs Variable costs Depreciation (fixed) Marketing and administrative costs Fixed costs (cash) Depreciation (fixed) Total costs Operating profits $ 960,000 60,800 54,000 124,500 62,000 $ 301,300 $ 658,700 Sales volume is expected to increase by 30 percent in May, but the sales price is expected to fall 5 percent. Varlable manufacturing costs are expected to Increase by 7.5 percent per unit in May. In addition to these cost changes, variable manufacturing costs also will change with sales volume. Marketing and administrative cash costs are expected to increase by 15 percent. All revenues and costs at Cymbal are cash transactions, except for depreciation. Cymbal maintains no Inventories. Depreciation is fixed and is forecast to remain unchanged in the next six months.…
Below are departmental income statements for a guitar manufacturer. The company classifies advertising, rent, and utilities as indirect expenses. The manufacturer is considering eliminating its Electric Guitar department because it shows a loss. Departmental Income Statements For Year Ended December 31 Acoustic Electric Sales $ 102,900 $ 83,300 Cost of goods sold 44,175 47,350 Gross profit 58,725 35,950 Expenses Advertising 4,995 4,270 Depreciation—Equipment 10,080 8,560 Salaries 19,800 17,200 Supplies used 2,000 1,700 Rent 7,055 6,030 Utilities 2,965 2,620 Total expenses 46,895 40,380 Income (loss) $ 11,830 $ (4,430) Prepare a departmental contribution to the overhead report. Based on contribution to overhead, should the electric guitar department be eliminated?
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…
Gibson Boot Co. sells men’s, women’s, and children’s boots. For each type of boot sold, it operates a separate department that has its own manager. All departments are housed in a single store. In recent years, the children’s department has operated at a net loss and is expected to continue to do so. Last year’s income statements follow. Men’s Department Women’s Department Children’s Department Sales $ 660,000 $ 480,000 $ 200,000 Cost of goods sold (269,500 ) (179,600 ) (100,875 ) Gross margin 390,500 300,400 99,125 Department manager’s salary (60,000 ) (49,000 ) (29,000 ) Sales commissions (114,200 ) (83,600 ) (31,900 ) Rent on store lease (29,000 ) (29,000 ) (29,000 ) Store utilities (12,000 ) (12,000 ) (12,000 ) Net income (loss) $ 175,300 $ 126,800 $ (2,775 ) Required a. Calculate the contribution to profit. Determine whether to eliminate the children’s…
The following income statements were drawn from the annual reports of the Atlanta Company and the Boston Company. Atlanta* $ 32,400 (15,500) 16,900 Boston* $ 87,500 (64,030) 23,470 Net sales Cost of goods sold Gross margin Less: Operating expenses Selling and administrative expenses Net income *All figures are reported in thousands of dollars. Required a-1. Compute the gross margin percentages and return-on-sales ratios of Atlanta and Boston. a-2. Ascertain which of the companies is a high-end retailer based on ratios computed. b. If Atlanta and Boston have equity of $17,800 and $20,200, respectively, which company is in the more profitable business? Complete this question by entering your answers in the tabs below. Req A1 Req A2 (12,740) (19,026) $ 4,160 $ 4,444 Req B Gross margin percentages Return-on-sales ratios Compute the gross margin percentages and return-on-sales ratios of Atlanta and Boston. (Round your answers to the nearest whole number.) Atlanta % % Boston
Sunland Equipment sells equipment to sports enthusiasts. Doug Sunland, the company's president, just received the following income statement reporting the results of the past year. Sales revenue Variable cost of goods sold Fixed cost of goods sold Gross profit Variable operating expenses Fixed operating expenses Common fixed costs Operating income (a) Baseball $1,200,000 eTextbook and Media 814,000 Save for Later 110,300 275,700 162,900 76,200 57,500 ($20,800) Soccer $3,450,000 $2,275,000 2,242,500 1,825,600 179,700 158,500 290,900 227,500 69,900 92,900 1,027,800 552,000 80,500 124,000 $271,300 Basketball Doug is concerned that two of the company's divisions are showing a loss, and he wonders if the company should stop selling baseball and basketball gear to concentrate solely on soccer gear. ($99,400) Prepare a segment margin income statement. Fixed cost of goods sold and fixed operating expenses can be traced to each division. (If the amount is negative then enter with a negative…
Tike Industries is an apparel company that makes and sells both casual wear and sportswear. Here are data for the current year: Sales revenue Variable costs Contribution margin Traceable fixed costs Segment margin Common fixed costs Operating income Total $ 1,000,000 745,000 $255.000 (80,000) $175,000 (90,000) $85,000 Casual wear $ 450,000 388,000 $62,000 (25,000) $37,000 (42,000) S(5,000) Sportswear 5 pts $ 550,000 357,000 $193,000 (55,000) $138,000 (48,000) $90,000 Tike's accountant allocated the common fixed costs between the product lines based on sales revenue. Tike plans to discontinue the production of casual wear and use the freed-up capacity to triple the production and sale of sportswear. Although this will eliminate the traceable fixed costs for casual wear, the traceable fixed costs for sportswear will double. If Tike discontinues the casual wear product line, what would be the amount of the increase in Tike's operating income? Round to the nearest whole dollar and do not…
The CVP income statement for Blossom Machine Company for 2021 appears below. BLOSSOMMACHINE COMPANY Income Statement For the Year Ended December 31, 2021 Sales (42,000 units) $1,050,000 Variable expenses Contribution margin Fixed expenses Net income (loss) (b) Answer the following independent questions. (c) What was the company's break-even sales dollars in 2021? 735,000 Your answer is correct. eTextbook and Media 315,000 360,000 ($45,000) Break-even point in sales dollars $ Additional units Your answer is correct. How many additional units would the company have had to sell in 2022 to earn a net income of $45,000? eTextbook and Medial Number of units sold 1,200,000 12,000 Attempts: 3 of 5 used If the company reduces variable costs by $2.50 per unit in 2022 while other costs and unit revenues remain unchanged, how many units will the company have to sell to earn a net income of $45,000? (Round per unit value to 2 decimal places, e.g. 52.75. Final answer to O decimal places, e.g.…
Pharoah Beauty Corporation manufactures cosmetic products that are sold through a network of sales agents. The agents are paid a commission of 22% of sales. The income statement for the year ending December 31, 2025, is as follows. PHAROAH BEAUTY CORPORATION Income Statement For the Year Ended December 31, 2025 Sales | Cost of goods sold Variable Fixed Gross profit Selling and marketing expenses Commissions Fixed costs Operating income $30,760,000 8,580,000 $16,918,000 10,070,400 $76,900,000 39,340,000 $37,560,000 26,988,400 $10,571,600 (a) ✓ Your answer is correct. Under the current policy of using a network of sales agents, calculate the Pharoah Beauty Corporation's break-even point in sales dollars for the year 2025. (b) Break-even point $ eTextbook and Media Calculate the company's break-even point in sales dollars for the year 2025 if it hires its own sales force to replace the network of agents. Break-even point $ eTextbook and Media Save for Later Attempts: 1 of 2 used The…