Vulcan Company's contribution format income statement for June is as follows:Vulcan CompanyIncome StatementFor the Month Ended June 30SalesVariable expensesContribution marginFixed expensesNet operating income$ 900,000400,000500,000450,000$ 50,000Management wants to improve profits and gathered the following data:a. The company is divided into two sales territories-Northern and Southern. The Northern Territory recorded $400,000 in sales and$180,000 in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern Territory.Fixed expenses of $200,000 and $115,000 are traceable to the Northern and Southern Territories, respectively. The rest of the fixedexpenses are common to the two territories.b. The company is the exclusive distributor for two products-Paks and Tibs. Sales of Paks and Tibs totaled $170,000 and $230,000,respectively, in the Northern territory during June. Variable expenses are 22% of the selling price for Paks and 62% for Tibs. Costrecords show $71,400 of the Northern Territory's fixed expenses are traceable to Paks and $50,600 to Tibs, with the remaindercommon to the two products.Required:1-a. Prepare contribution format income statements for the total company segmented by sales territories.1-b. Prepare contribution format income statements for the Northern Territory segmented by product line.

The contribution-format income statement is very useful for decision-making since it explains how…

Vulcan Company's contribution format income statement for June is as follows: Vulcan Company Income Statement For the Month Ended June 30 Sales Variable expenses Contribution margin Fixed expenses Net operating income $ 900,000 400,000 500,000 450,000 $ 50,000 Management wants to improve profits and gathered the following data: a. The company is divided into two sales territories-Northern and Southern. The Northern $180,000 in variable expenses during June; the remaining sales and variable expenses

Vulcan Company's contribution format income statement for June is as follows: Vulcan Company Income Statement For the Month Ended June 30 Sales Variable expenses Contribution margin Fixed expenses Net operating income $ 900,000 400,000 500,000 450,000 $ 50,000 Management wants to improve profits and gathered the following data: a. The company is divided into two sales territories-Northern and Southern. The Northern $180,000 in variable expenses during June; the remaining sales and variable expenses

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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Gough Corporation has two divisions. Domestic and Foreign. Data from the most recent month appears below: 6. Total Company $668,000 Domestic Foreign $321,000 147,660 173,340 134,000 $ 39,340 Sales... Variable expenses. Contribution margin. Traceable fixed expenses. 220,530 447,470 335,000 112,470 $347,000 72,870 274,130 201,000 $ 73,130 Segment margin.. Common fixed expenses.. 73,480 $ 38,990 Net operating income.. The break-even in sales dollars for the company as a whole is closest to: A. $502,579 B. $107,216 C. $436,424 D. $609,794
Frinner Company has two divisions, A and B, that reported the following results for October: Sales Variable expenses as a percentage of sales .... Segment margin .......... C. d. Division A £90,000 £31,000. £62,000. £93,000. £52,000 70% £2,000 Division B £150,000 If common fixed expenses were £31,000, total fixed expenses must have been a. b. 60% £23,000
The contribution format income statement for Huerra Company for last year is given below. Total $1,006,000 603,600 Unit $ 50.30 30.18 402,400 20.12 322,400 16.12 Sales Variable expenses Contribution margin Fixed expenses Net operating income Income taxes @ 40% Net income 80,000 32,000 $ 48,000 4.00 1.60 $2.40 The company had average operating assets of $502,000 during the year. Required: 1. Compute the company's margin, turnover, and return on investment (ROI) for the period. For each of the following questions, indicate whether the margin and turnover will increase, decrease, or remain unchanged as a result of the events described, and then compute the new ROI figure. Consider each question separately, starting in each case from the data used to compute the original ROI in (1) above. 2. Using Lean Production, the company is able to reduce the average level of inventory by $93,000. 3. The company achieves a cost savings of $7,000 per year by using less costly materials. 4. The company…
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Vulcan Company Income Statement For the Month Ended June 30 Sales Variable expenses Contribution margin Fixed expenses Net operating income $ 900,000 400,000 500,000 450,000 $ 50,000 Management wants to improve profits and gathered the following data: a. The company is divided into two sales territories-Northern and Southern. The Northern Territory recorded $400,000 in sales and $180,000 in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern Territory. Fixed expenses of $160,000 and $150,000 are traceable to the Northern and Southern Territories, respectively. The rest of the fixed expenses are common to the two territories. b. The company is the exclusive distributor for two products-Paks and Tibs. Sales of Paks and Tibs totaled $150,000 and $250,000, respectively, in the Northern territory during June. Variable expenses are 30% of the selling price for Paks and 54% for Tibs. Cost records show $75,000 of the Northern Territory's fixed…
hsd.1
ulcan Company's contribution format income statement for June is as follows: Vulcan Company Income Statement For the Month Ended June 30 Sales Variable expenses Contribution margin Fixed expenses Net operating income $ 900,000 408,000 492,000 455,000 $ 37,000 Management is disappointed with the company's performance and is wondering what can be done to improve profits. By examining sales and cost records, you have determined the following: a. The company is divided into two sales territories-Northern and Southern. The Northern Territory recorded $400,000 in sales and $208,000 in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern Territory. Fixed expenses of $164,000 and $125,000 are traceable to the Northern and Southern Territories, respectively. The rest of the fixed expenses are common to the two territories. b. The company is the exclusive distributor for two products-Paks and Tibs. Sales of Paks and Tibs totaled $150,000 and…
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 $ 937,500 637,500 300,000 142,000 158,000 62,000 $ 96,000 North $ 750,000 600,000 150,000 71,000 $ 79,000 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. South $ 187,500 37,500 150,000 71,000 $ 79,000
Vulcan Company's contribution format income statement for June is as follows: Vulcan Company Income Statement Sales Variable expenses Contribution margin Fixed expenses Net operating income For the Month Ended June 30 $750,000 336,000 414,000 378,000 $ 36,000 Management wants to improve profits and gathered the following data: a. The company is divided into two sales territories-Northern and Southern. The Northern territory recorded $300,000 in sales and $156,000 in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern territory. Fixed expenses of $120,000 and $108,000 are traceable to the Northern and Southern territories, respectively. The rest of the fixed expenses are common to the two territories. b. The company is the exclusive distributor for two products-Paks and Tibs. Sales of Paks and Tibs totaled $50,000 and $250,000, respectively, in the Northern territory during June. Variable expenses are 22% of the selling price for Paks…
Severo S.A. of Sao Paulo, Brazil, is organized into two divisions. The company's contribution format segmented income statement (in terms of the Brazilian currency, the real, R) for last month is given below: Sales Variable expenses Contribution margin Traceable fixed expenses: Advertising Selling and administrative Depreciation Total traceable fixed expenses Divisional segment margin Common fixed expenses Operating income Sales Traceable fixed expenses: Total Company R 3,675,000 1,745,500 1,929,500 Traceable fixed expenses: R Advertising Selling and administrative Depreciation Variable expenses as a percentage of sales Total traceable fixed expenses 634,000 449,000 233,000 1,316,000 Common fixed expenses: Top management can't understand why the Leather Division has such a low segment margin when its sales are only 25% less than sales in the Cloth Division. As one step in isolating the problem, management has directed that the Leather Division be further segmented into product lines.…