The operating income for each distribution channel as percentage of revenue after assigning customer level cost, distribution channel cost and corporate cost.

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Answer 1

Question

Chapter 14, Problem 14.35P

1.

To determine

To compute: The operating income for each distribution channel as percentage of revenue after assigning customer level cost, distribution channel cost and corporate cost.

2.

To determine

To identify: The distribution channel company would close.

3.

To determine

To explain: If corporate cost is allocated to division, explain the benefit of allocating corporate cost to division and actions that can be taken on the basis of this.

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Mason Manufacturing is preparing its annual profit plan. As part of its cost analysis, management estimates that $150,000 in purchasing support costs should be allocated to individual suppliers based on the number of shipments received. The company has two major suppliers: • Supplier X received 35 shipments during the year. Supplier Y received 105 shipments during the year. Compute the amount of purchasing costs allocated to Supplier Y, assuming Mason Manufacturing uses number of shipments received to allocate costs. a) $30,000 b) $45,000 c) $90,000 d) $112,500

On January 1, 2020, Superior Manufacturing Company purchased a machine for $50,000,000. Superior's management expects to use the machine for 35,000 hours over the next five years. The estimated residual value of the machine at the end of the fifth year is $60,000. The machine was used for 5,000 hours in 2020 and 6,200 hours in 2021. What is the depreciation expense for 2020 if the company uses the units of the production method of depreciation?

Answer 2

Question

Chapter 14, Problem 14.35P

1.

To determine

To compute: The operating income for each distribution channel as percentage of revenue after assigning customer level cost, distribution channel cost and corporate cost.

2.

To determine

To identify: The distribution channel company would close.

3.

To determine

To explain: If corporate cost is allocated to division, explain the benefit of allocating corporate cost to division and actions that can be taken on the basis of this.

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Answer 3

Question

Chapter 14, Problem 14.35P

1.

To determine

To compute: The operating income for each distribution channel as percentage of revenue after assigning customer level cost, distribution channel cost and corporate cost.

2.

To determine

To identify: The distribution channel company would close.

3.

To determine

To explain: If corporate cost is allocated to division, explain the benefit of allocating corporate cost to division and actions that can be taken on the basis of this.

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Answer 4

Question

Chapter 14, Problem 14.35P

1.

To determine

To compute: The operating income for each distribution channel as percentage of revenue after assigning customer level cost, distribution channel cost and corporate cost.

2.

To determine

To identify: The distribution channel company would close.

3.

To determine

To explain: If corporate cost is allocated to division, explain the benefit of allocating corporate cost to division and actions that can be taken on the basis of this.

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Answer 5

Chapter 14, Problem 14.35P

1.

To determine

To compute: The operating income for each distribution channel as percentage of revenue after assigning customer level cost, distribution channel cost and corporate cost.

2.

To determine

To identify: The distribution channel company would close.

3.

To determine

To explain: If corporate cost is allocated to division, explain the benefit of allocating corporate cost to division and actions that can be taken on the basis of this.

Answer 6

Chapter 14, Problem 14.35P

1.

To determine

To compute: The operating income for each distribution channel as percentage of revenue after assigning customer level cost, distribution channel cost and corporate cost.

Answer 7

Chapter 14, Problem 14.35P

1.

To determine

To compute: The operating income for each distribution channel as percentage of revenue after assigning customer level cost, distribution channel cost and corporate cost.

Answer 8

2.

To determine

To identify: The distribution channel company would close.

Answer 9

2.

To determine

To identify: The distribution channel company would close.

Answer 10

3.

To determine

To explain: If corporate cost is allocated to division, explain the benefit of allocating corporate cost to division and actions that can be taken on the basis of this.

Answer 11

3.

To determine

To explain: If corporate cost is allocated to division, explain the benefit of allocating corporate cost to division and actions that can be taken on the basis of this.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 14 - Prob. 14.1Q Ch. 14 - Why is customer-profitability analysis an...Ch. 14 - Prob. 14.3Q Ch. 14 - A customer-profitability profile highlights those...Ch. 14 - Give examples of three different levels of costs...Ch. 14 - What information does the whale curve provide?Ch. 14 - A company should not allocate all of its corporate...Ch. 14 - What criteria might managers use to guide...Ch. 14 - Once a company allocates corporate costs to...Ch. 14 - A company should not allocate costs that are fixed...

The operating income for each distribution channel as percentage of revenue after assigning customer level cost, distribution channel cost and corporate cost.

To compute: The operating income for each distribution channel as percentage of revenue after assigning customer level cost, distribution channel cost and corporate cost.

To identify: The distribution channel company would close.

To explain: If corporate cost is allocated to division, explain the benefit of allocating corporate cost to division and actions that can be taken on the basis of this.

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Chapter 14 Solutions