None The condensed income statement for a business for the past year is presented as follows:ProductFGHTotalSales$200,000 $180,000 $320,000 $700,000Less Variable CostContribution MarginLess Fixed Cost120,000 160,000 200,000 480,000$80,000 $20,000 $120,000 $220,00025,000 30,000 40,000 95,000Income (Loss) From Operation $55,000 ($10,000) $80,000 $125,000Management is considering the discontinuance of the manufacture and sale of Product Gat the beginning of the current year. The discontinuance would have no effect on the totalfixed costs and expenses or on the sales of Products F and H.What is the amount of change of in net income for the current year that will result fromthe discontinuance of Product G?a. $10,000 decreaseb. $20,000 increasec. $10,000 increased. $20,000 decreasee. none of the listed responses is the correct answer

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Answered: The condensed income statement for a…

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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The condensed income statement for a Fletcher Inc. for the past year is as follows: Product F G H Total Sales $300,000 $210,000 $340,000 $850,000 Costs: Variable costs $180,000 $180,000 $220,000 $580,000 Fixed costs 50,000 50,000 40,000 140,000 Total costs $230,000 $230,000 $260,000 $720,000 Income (loss) $ 70,000 $(20,000) $ 80,000 $130,000 Management is considering the discontinuance of the manufacture and sale of Product G at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Products F and H. What is the amount of change in net income for the current year that will result from the discontinuance of Product G? a.$30,000 decrease b.$30,000 increase c.$20,000 decrease d.$20,000 increase
INCOME STATEMENT Hermann Industries is forecasting the following income statement:Sales $8,000,000Operating costs excluding depr. & amort. 4,400,000EBITDA $3,600,000Depreciation & amortization 800,000EBIT $2,800,000Interest 600,000EBT $2,200,000Taxes (40%) 880,000Net income $1,320,000The CEO would like to see higher sales and a forecasted net income of $2,500,000. Assumethat operating costs (excluding depreciation and amortization) are 55% of sales and thatdepreciation and amortization and interest expenses will increase by 10%. The tax rate, whichis 40%, will remain the same. What level of sales would generate $2,500,000 in net income?
The following information is for Gable, Inc. and Harlowe, Inc. for the recent year. Harlowe, Inc. $800,000 200,000 600,000 400,000 $200,000 Sales Variable costs. Contribution margin Fixed costs Income from operations Gable, Inc. $800,000 400,000 400,000 200,000 $200,000 What total amount of net income will Harlowe, Inc. earn if it experiences a 10 percent increase in revenue?
The condensed income statement for a business for the past year is as follows: Product A Z Sales $660,000 $320,000 Less variable costs 540,000 220,000 Contribution margin $ 120,000 $100,000 Less fixed costs 145,000 40,000 Income (loss) from operations $ (25,000) $ 60,000 Management is considering the discontinuance of the manufacture and sale of Product A at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Product Z. What is the amount of change in net income for the current year that will result from the discontinuance of Product A (amount and increase or decrease)?
The income statement for Huerra Company for last year is provided below: Total Unit Sales $ 43,200,000 $ 432.00 Less: Variable expenses 25,920,000 259.20 Contribution margin 17,280,000 172.80 Less: Fixed expense 8,640,000 86.40 Net operating income 8,640,000 86.40 Less: Income taxes @ 30% 2,592,000 25.92 Net income $ 6,048,000 $ 60.48 The company had average operating assets of $18,000,000 during the year. Required: 1. Compute the company’s ROI for the period using the ROI formula stated in terms of margin and turnover. (Round intermediate calculation to 2 decimal places. Enter your percentage answer rounded to 2 decimal places (i.e., 0.1234 should be entered as 12.34).) 2. Consider each of the following questions separately and then compute the new ROI figure. Indicate whether the ROI will increase, decrease, or remain unchanged as a result of the events described. a. By using JIT, the company is able to…
What is the Residual Income for Stevenson Corporation, given the following info: Invested Assets = $550,000 Sales = $660,000 Income from Operations = $99,000 Desired minimum rate of return = 15.0% O $16,500 O $17,280 O $14,850 O $0
The area of the graph labeled as (a) would be most representative of the Dollars $25,000 $20,000 $15,000 $10,000 $5,000 $0 (b) A Breakeven point B) Profit area 200 400 600 800 1,000 1,200 1,400 1600 1800 2,000 2,200 2,400 Units produced and sold Production area (c) Loss area (d). (0)

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