Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement, which follows: Sales $1,603,000 635,970 Variable expenses 967,030 Contribution margin 1,064,000 Fixed expenses Net operating income (loss) $ (96,970) In an effort to isolate the problem, the president has asked for an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division West Central $393,000 $610,000 $600,000 East Sales Variable expenses as a percentage of sales Traceable fixed expenses 21% $280,000 $322,000 $ 190,000 59% 46% Required: 1. Prepare a contribution format income statement segmented by divisions, as desired by the president. Division Total East Central West Company 2- As a result of a marketing study, the president believes that sales in the a. West Division could be increased by 15% if monthly advertising in that division were increased by $26,000. Calculate the incremental net operating income. Incremental net operating income

Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement, which follows: Sales $1,603,000 635,970 Variable expenses 967,030 Contribution margin 1,064,000 Fixed expenses Net operating income (loss) $ (96,970) In an effort to isolate the problem, the president has asked for an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division West Central $393,000 $610,000 $600,000 East Sales Variable expenses as a percentage of sales Traceable fixed expenses 21% $280,000 $322,000 $ 190,000 59% 46% Required: 1. Prepare a contribution format income statement segmented by divisions, as desired by the president. Division Total East Central West Company 2- As a result of a marketing study, the president believes that sales in the a. West Division could be increased by 15% if monthly advertising in that division were increased by $26,000. Calculate the incremental net operating income. Incremental net operating income

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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For a recent year, Wicker Company-owned restaurants had the following sales and expenses (in millions): Sales $20,400 Food and packaging $5,940 Payroll 5,100 Occupancy (rent, depreciation, etc.) 5,750 General, selling, and administrative expenses 3,000 $19,790 Income from operations $610 Assume that the variable costs consist of food and packaging, payroll, and 40% of the general, selling, and administrative expenses. a. What is Wicker Company's contribution margin? Round to the nearest million. (Give answer in millions of dollars.)$fill in the blank 1 million b. What is Wicker Company's contribution margin ratio? Round to one decimal place.fill in the blank 2 % c. How much would income from operations increase if same-store sales increased by $1,200 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million.$fill in the blank 3 million
Hancock Company manufactures and sells two lines of furniture, case goods and upholstery, During the most recent accounting period, the Case Goods and Upholstery Divisions sold 17,400 and 2,360 units, respectively. The company's most recent financial statements are shown below. Sales Less cost of goods sold: Unit-level production cost Depreciation, production equipment Gross margin Less operating expenses: Case Goods Upholstery $1,852,000 $472,000 1,156,000 276,000 $420,000 283,200 70,800 $118,000 Unit-level selling and administrative costs Corporate-level facility expenses (fixed) Net income (loss) If unit sales for both divisions increased 10% the company would report which of the following? 69,600 64,000 $286,400 59,000 64,000 $(5,000)
Marinara Sdn.Bhd. (MSB) makes marine equipment. MSB has been experiencing losses for one of its product line called bilge pump. The most recent quarterly income statement for the bilge pump is as follows: RM RM Sales revenue Less: variable costs Manufacturing costs Sales commissions Shipping Total variable costs Contribution margin 850,000 330,000 42,000 18,000 (390,000) 460,000 Less: Fixed costs 270,000 Advertising Depreciation of Equipment General factory overhead Salary-line supervisors Insurance on inventories Purchasing department expense |Total fixed costs Net operating loss 80,000 105,000 32,000 8,000 45,000 (540,000) (80,000) Discontinuing the bilge pump product line would not affect sales of other product lines and would have no effect on the company’s total general factory overhead or total purchasing department expenses. The equipment used in this production line cannot be used elsewhere and it has no resale value. REQUIRED: (a) State the basic rule in making decision to…
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Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) $ 1,600,000 700,400 899,600 990,000 $ (90,400) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Sales Variable expenses as a percentage of sales. Traceable fixed expenses East $ 440,000 $ 280,000 52% Division Central $ 620,000 $ 320,000 36% West $ 540,000 46% $ 195,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department has proposed increasing the West Division's monthly advertising by $21,000 based on the belief that it would increase that division's sales by 15%. Assuming these estimates are accurate, how much…
Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format Income statement: sales variable expenses Contribution margin Fixed expenses $ 1,610,000 551,400 Net operating income (loss) 1,058,600 1,164,000 $ (105,400) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following Information: Sales East $410,000 Division Central $ 670,000 West $530,000 Variable expenses as a percentage of sales Traceable fixed expenses 52% 22% 36% $ 278,000 $ 326,000 $ 200,000 Required: 1. Prepare a contribution format Income statement segmented by divisions. 2-8. The Marketing Department has proposed increasing the West Division's monthly advertising by $27,000 based on the belief that it would increase that division's sales by 13%. Assuming these estimates are accurate, how much…
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Rowan coffee co. Incurs a loss from operations for the standard coffee line. Sales revenue for the line total $72,000 while incurring variable cost of goods sold of $19,500, variable selling expenses of 17,400 and a fixed cost of $ 49,000. How do I determine if the standard coffee line should be continued or discontinued??
Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses as shown by its most recent monthly contribution format Income statement: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) $ 1,601,000 530,090 1,070,910 1,178,000 $ (107,090) In an effort to resolve the problem, the company wants to prepare an Income statement segmented by division. Accordingly, the Accounting Department provided the following Information: Sales Variable expenses as a percentage of sales Traceable fixed expenses East $ 401,000 49% $ 293,000 Required 1 Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 2B Prepare a contribution format income statement segmented by divisions. Required: 1. Prepare a contribution format Income statement segmented by divisions. 2-a. The Marketing Department belleves increasing the West Division's monthly advertising by $30,000 will increase that division's sales…
Whipple Company has sales revenue of $585,000. Cost of goods sold before adjustment is $335,000. The company uses machine hours to allocate manufacturing overhead and estimated 10,450 machine hours would be used during the year. For the year, manufacturing overhead was under-allocated by $13,400. The company's actual manufacturing overhead is $91,000. What is the actual gross profit? Select one: a. $250,000 b. $159,000 c. $236,600 d. $104,400 e. $263,400