Contribution Margin Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin. To Prepare: The contribution margin by state report for Company TS.

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Answer 1

Question

Chapter 20, Problem 20.5CP

(1)

To determine

Contribution Margin

Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin.

To Prepare: The contribution margin by state report for Company TS.

(2)

To determine

The additional profit for each state, if the sales amount increased by 20% and decrease in advertising expenses.

(3)

To determine

To Identify: Which state will provide the greatest profit return for a $42,200 increasing in advertising expenses?

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Assume that TDW Corporation (calendar-year-end) has 2024 taxable income of $952,000 for purposes of computing the §179 expense. The company acquired the following assets during 2024: (Use MACRS Table 1, Table 2, Table 3, Table 4, and Table 5.) Asset Machinery Computer equipment Furniture Total Placed in Service September 12 February 10 April 2 Basis $ 2,270,250 263,325 880,425 $ 3,414,000 b. What is the maximum total depreciation, including §179 expense, that TDW may deduct in 2024 on the assets it placed in service in 2024, assuming no bonus depreciation? Note: Round your intermediate calculations and final answer to the nearest whole dollar amount. Maximum total depreciation deduction (including §179 expense)

Evergreen Corporation (calendar-year-end) acquired the following assets during the current year: (Use MACRS Table 1 and Table 2.) Date Placed in Asset Machinery Service October 25 Original Basis $ 120,000 Computer equipment February 3 47,500 Used delivery truck* August 17 Furniture April 22 60,500 212,500 The delivery truck is not a luxury automobile. Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. b. What is the allowable depreciation on Evergreen's property in the current year if Evergreen does not elect out of bonus depreciation and elects out of §179 expense?

Lina purchased a new car for use in her business during 2024. The auto was the only business asset she purchased during the year, and her business was extremely profitable. Calculate her maximum depreciation deductions (including §179 expense unless stated otherwise) for the automobile in 2024 and 2025 (Lina doesn't want to take bonus depreciation for 2024) in the following alternative scenarios (assuming half-year convention for all): (Use MACRS Table 1, Table 2, and Exhibit 10-10.) a. The vehicle cost $40,000, and business use is 100 percent (ignore §179 expense). Year Depreciation deduction 2024 2025

Answer 2

Question

Chapter 20, Problem 20.5CP

(1)

To determine

Contribution Margin

Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin.

To Prepare: The contribution margin by state report for Company TS.

(2)

To determine

The additional profit for each state, if the sales amount increased by 20% and decrease in advertising expenses.

(3)

To determine

To Identify: Which state will provide the greatest profit return for a $42,200 increasing in advertising expenses?

Expert Solution & Answer

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Answer 3

Question

Chapter 20, Problem 20.5CP

(1)

To determine

Contribution Margin

Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin.

To Prepare: The contribution margin by state report for Company TS.

(2)

To determine

The additional profit for each state, if the sales amount increased by 20% and decrease in advertising expenses.

(3)

To determine

To Identify: Which state will provide the greatest profit return for a $42,200 increasing in advertising expenses?

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 4

Question

Chapter 20, Problem 20.5CP

(1)

To determine

Contribution Margin

Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin.

To Prepare: The contribution margin by state report for Company TS.

(2)

To determine

The additional profit for each state, if the sales amount increased by 20% and decrease in advertising expenses.

(3)

To determine

To Identify: Which state will provide the greatest profit return for a $42,200 increasing in advertising expenses?

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 5

Chapter 20, Problem 20.5CP

(1)

To determine

Contribution Margin

Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin.

To Prepare: The contribution margin by state report for Company TS.

(2)

To determine

The additional profit for each state, if the sales amount increased by 20% and decrease in advertising expenses.

(3)

To determine

To Identify: Which state will provide the greatest profit return for a $42,200 increasing in advertising expenses?

Answer 6

Chapter 20, Problem 20.5CP

(1)

To determine

Contribution Margin

Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin.

To Prepare: The contribution margin by state report for Company TS.

Answer 7

Chapter 20, Problem 20.5CP

(1)

To determine

Contribution Margin

Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin.

To Prepare: The contribution margin by state report for Company TS.

Answer 8

(2)

To determine

The additional profit for each state, if the sales amount increased by 20% and decrease in advertising expenses.

Answer 9

(2)

To determine

The additional profit for each state, if the sales amount increased by 20% and decrease in advertising expenses.

Answer 10

(3)

To determine

To Identify: Which state will provide the greatest profit return for a $42,200 increasing in advertising expenses?

Answer 11

(3)

To determine

To Identify: Which state will provide the greatest profit return for a $42,200 increasing in advertising expenses?

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 20 - What types of costs are customarily included in...Ch. 20 - Which type of manufacturing cost (direct...Ch. 20 - Which of the following costs would be included in...Ch. 20 - In the variable costing income statement, how are...Ch. 20 - Since all costs of operating a business are...Ch. 20 - Discuss how financial data prepared on the basis...Ch. 20 - Why might management analyze product...Ch. 20 - Explain why rewarding sales personnel on the basis...Ch. 20 - Discuss the two factors affecting both sales and...Ch. 20 - How is the quantity factor for an increase or a...

Solution Summary: The author explains that contribution margin is the excess of manufacturing margin above selling and administrative expenses.

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The additional profit for each state, if the sales amount increased by 20% and decrease in advertising expenses.

To Identify: Which state will provide the greatest profit return for a $42,200 increasing in advertising expenses?

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