The following income statements illustrate different cost structures for two competing companies: Income Statements Company Name Baird Adams Number of customers (a) Sales revenue (a x $240) Variable cost (a x $180) Variable cost (a x $0) Contribution margin 88 88 $ 21,120 (15,840) N/A $ 21,120 N/A 21,120 (15,840) $ 5,280 5,280 Fixed cost Net income $ 5,280 Required a. Reconstruct Baird's income statement, assuming that it serves 176 customers when it lures 88 customers away from Adams by lowering the sales price to $140 per customer. b. Reconstruct Adams's income statement, assuming that it serves 176 customers when it lures 88 customers away from Baird by lowering the sales price to $140 per customer. Complete this question by entering your answers in the tabs below. Required A Required B Reconstruct Baird's income statement, assuming that it serves 176 customers when it lures 88 customers away from Adams by lowering the sales price to $140 per customer. BAIRD COMPANY Income Statement Sales revenue Variable cost Contribution margin Fixed cost Net income (loss) 0. Reguird A Required B >

The following income statements illustrate different cost structures for two competing companies: Income Statements Company Name Baird Adams Number of customers (a) Sales revenue (a x $240) Variable cost (a x $180) Variable cost (a x $0) Contribution margin 88 88 $ 21,120 (15,840) N/A $ 21,120 N/A 21,120 (15,840) $ 5,280 5,280 Fixed cost Net income $ 5,280 Required a. Reconstruct Baird's income statement, assuming that it serves 176 customers when it lures 88 customers away from Adams by lowering the sales price to $140 per customer. b. Reconstruct Adams's income statement, assuming that it serves 176 customers when it lures 88 customers away from Baird by lowering the sales price to $140 per customer. Complete this question by entering your answers in the tabs below. Required A Required B Reconstruct Baird's income statement, assuming that it serves 176 customers when it lures 88 customers away from Adams by lowering the sales price to $140 per customer. BAIRD COMPANY Income Statement Sales revenue Variable cost Contribution margin Fixed cost Net income (loss) 0. Reguird A Required B >

Name: The following income statements illustrate different cost structures
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Description: The following income statements illustrate different cost structures for two competing companies:Income StatementsCompany NameBairdAdams88$ 21,120(15,840)N/A88Number of customers (a)Sales revenue (a X $240)Variable cost (a x $180)Variable cost (a x

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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Subject: acounting
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V. Prepare a CONTRIBUTION MARGIN (also known as variable costing) income statement given a traditional (also known as absorption costing) income statement Bruno Industries manufactures and sells a single product. The controller has prepared the following income statement for the most recent year: B C D 1 2 3 Bruno Industries Traditional Income Statement (Absorption Costing) For the Year Ended December 31 4 5 Sales revenue 6 Less: Cost of goods sold 7 Gross profit 8 Less: Operating expenses 9 Operating income $ 406,000 329,000 $ 77,000 73,000 $ 4,000 10 The company produced 8,000 units and sold 7,000 units during the year ending December 31. Fixed manufacturing overhead (MOH) for the year was $152,000, while fixed operating expenses were $62,000. The company had no beginning inventory. Requirements 1. Will the company's operating income under variable costing be higher, lower, or the same as its operating income under absorption costing? Why? 2. Prepare a variable costing income…
Determine the missing amounts. 1. 2. 3. $ Unit Selling Price $800 $350 (e) $ $ Unit Variable Costs $336 (c) (f) $ Unit Contribution Margin $147 $800 (a) Contribution Margin Ratio % (b) % (d) 40 %
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The following income statements illustrate different cost structures for two competing companies: Number of customers (a) Sales revenue (a x $230) Variable cost (a x $185) Contribution margin Fixed cost Net income Required Income Statements Required A Required B a. Reconstruct Gibson's income statement, assuming that it serves 178 customers when it lures 89 customers away from Franklin by lowering the sales price to $130 per customer. b. Reconstruct Franklin's income statement, assuming that it serves 178 customers when it lures 89 customers away from Gibson by lowering the sales price to $130 per customer. Complete this question by entering your answers in the tabs below. GIBSON COMPANY Income Statement Sales revenue Variable cost Contribution margin Fixed cost Net income (loss) Reconstruct Gibson's income statement, assuming that it serves 178 customers when it lures 89 customers away from Franklin by lowering the sales price to $130 per customer. $ Company Name Franklin 89 $ Gibson…
Piedmont Company segments its business into two regions-North and South. The company prepared the contribution format segmented income statement as shown: Sales Variable expenses Contribution margin Traceable fixed expenses Segment margin Common fixed expenses Net operating income Total Company $ 825,000 495,000 330,000 144,000 186,000 64,000 $ 122,000 1. Dollar sales for company to break even 2. Dollar sales for North segment to break even 3. Dollar sales for South segment to break even North $ 550,000 385,000 Required: 1. Compute the companywide break-even point in dollar sales. 2. Compute the break-even point in dollar sales for the North region. 3. Compute the break-even point in dollar sales for the South region. 165,000 72,000 $ 93,000 $ $ $ Note: For all requirements, round your intermediate calculations to 2 decimal places. Round your final answers to the nearest dollar. South $ 275,000 110,000 165,000 72,000 $ 93,000 5,200 x 2,400 X 1,200 x