The most recent monthly income statement for Your Company Is given below: total store 1 store 2 Sales $2,100,000 $1,300,000 $800,000 VC $1,260,000 $882,000 $378,000 CM $840,000 $418,000 $422,000 Traceable fixed costs $420,000 $231,000 $189,000 Segment margin $420,000 $187,000 $233,000 Common fixed costs $350,000 $210,000 $140,000 $70,000 ($23,000) $93,000 NI Your Company is considering closing Store I. If Store I is closed, one-fourth of its traceable fixed expenses would continue to be incurred. Also, the closing of Store I would result in a 20% decrease in sales in Store II. Your Company allocates common fixed expenses on the basis of sales dollars and none of these costs would be saved if a store were shut down. What is the increase or (decrease) in the net income if Store I is closed? enter an increase as a positive number and a decrease as a negative number.

The most recent monthly income statement for Your Company Is given below: total store 1 store 2 Sales $2,100,000 $1,300,000 $800,000 VC $1,260,000 $882,000 $378,000 CM $840,000 $418,000 $422,000 Traceable fixed costs $420,000 $231,000 $189,000 Segment margin $420,000 $187,000 $233,000 Common fixed costs $350,000 $210,000 $140,000 $70,000 ($23,000) $93,000 NI Your Company is considering closing Store I. If Store I is closed, one-fourth of its traceable fixed expenses would continue to be incurred. Also, the closing of Store I would result in a 20% decrease in sales in Store II. Your Company allocates common fixed expenses on the basis of sales dollars and none of these costs would be saved if a store were shut down. What is the increase or (decrease) in the net income if Store I is closed? enter an increase as a positive number and a decrease as a negative number.

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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Required Supply the missing information in the following table for Vernon Company. (Do not round intermediate calculations. Round "ROI" answer to 2 decimal places. (i.e., 0.2345 should be entered as 23.45).) Sales $369,600 ROI % Operating assets Operating income Turnover 2.1 Residual income Operating profit margin 14 % Desired rate of return 17 %
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90 Marston Corporation Statement of Income for the Year Ending December 31, 2022 Using Sales Agents Using Own Sales Force $26,000,000 Sales Cost of goods sold Variable Fixed Gross margin Marketing costs Commissions Fixed costs Operating income $11,700,000 2,870,000 4,680,000 3,420,000 $26,000,000 14,570,000 11,430,000 8,100,000 $ 3,330,000 $11,700,000 2,870,000 2,600,000 5,500,000 14,570,000 11,430,000 8,100,000 $ 3,330,000 Marston is considering hiring its own sales staff to replace the network of agents. Marston will pay its salespeople a commission of 10% and incur additional fixed costs of $2,080,000. 4 Required 1. Calculate Marston Corporation's 2022 contribution margin percentage, breakeven revenues, and degree of operating leverage under each of the two scenarios. (You will first have to recast the 2022 statement of income assuming Marston had hired its own sales staff.) 2. Describe the advantages and disadvantages of each type of sales alternative. 3. In 2023, Marston uses its…
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