The condensed income statement for a business for the past year is presented as follows: Product F G H Total Sales Less Variable Cost Contribution Margin Less Fixed Cost $200,000 $180,000 $320,000 $700,000 120,000 160,000 200,000 480,000 $80,000 $20,000 $120,000 $220,000 25,000 30,000 40,000 95,000 Income (Loss) From Operation $55,000 ($10,000) $80,000 $125,000 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 of in net income for the current year that will result from the discontinuance of Product G? a. $10,000 decrease b. $20,000 increase c. $10,000 increase d. $20,000 decrease e. none of the listed responses is the correct answer

The condensed income statement for a business for the past year is presented as follows: Product F G H Total Sales Less Variable Cost Contribution Margin Less Fixed Cost $200,000 $180,000 $320,000 $700,000 120,000 160,000 200,000 480,000 $80,000 $20,000 $120,000 $220,000 25,000 30,000 40,000 95,000 Income (Loss) From Operation $55,000 ($10,000) $80,000 $125,000 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 of in net income for the current year that will result from the discontinuance of Product G? a. $10,000 decrease b. $20,000 increase c. $10,000 increase d. $20,000 decrease e. none of the listed responses is the correct answer

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 2MC: The following information is available for Cooke Company for the current year: The gross margin is...

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Accounting Gosnell Company produces two products: squares and circles. The projected income for thecoming year, segmented by product line, follows:Squares Circles TotalSales P300,000 P2,500,000 P2,800,000Less: Variable expenses 100,000 500,000 600,000Contribution margin P200,000 P2,000,000 P2,200,000Less: Direct fixed expenses 28,000 1,500,000 1,528,000Product margin P172,000 P 500,000 P 672,000Less: Common fixedexpenses100,000Operating expenses P 572,000The selling prices are P30 for squares and P50 for circles.1. Compute the number of units of each product that must be sold for Gosnell Companyto break even.2. Assume that the marketing manager changes the sales mix of the two products sothat the ratio is three squares to five circles. Repeat Requirement 13. Refer to the original data. Suppose that Gosnell can increase the sales of squares withincreased advertising. The extra advertising would cost an additional P45,000, andsome of the potential purchasers of circles would switch to…
Assume a company reported the following results: Sales $ 400,e00 Variable expenses Contribution margin Fixed expenses 260,e00 140,000 96,e00 Net operating income $ 44,000 Average operating assets $ 350, 000 The margin is closest to: Muitiple Choice 12.9%. 35.0%. 114.3%.
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A company has following details for this yearDetails Total sales($) Total cost($) Details Total sales($) Total cost($)Year ended 31/12/2018 35,78,998 25,89,709Year ended 31/12/2019 48,90,742 31,67,984 Calculate P/V ratio, Fixed cost, break even sales, Margin of safety 2018/2019, Variable cost 2018/2019and percent of fixed cost 2018/2019
How much is controllable margin?
Subject: accounting