ACCOUTING PRIN SET LL INCLUSIVE
14th Edition
ISBN: 9781119815327
Author: Weygandt
Publisher: WILEY
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Chapter 23, Problem 16E
a.
To determine
Concept Introduction:
Incremental analysis is a decision-making technique used to identify the financial data that changes in different courses of action. It is a useful tool in decision making such as the decision to accept special orders, make or buy decisions, sell or further process decisions, repair or replace decisions, and decisions related to the elimination of unprofitable business segments.
The Net income for CC.
b.
To determine
Concept Introduction:
Incremental Analysis is a decision-making technique used to identify the financial data that changes in different courses of action. It is a useful tool in decision making such as the decision to accept special orders, make or buy decisions, sell or further process decisions, repair or replace decisions, and decisions related to the elimination of unprofitable business segments.
The net income by product line and its total if CC discontinues the stunner product line.
c.
To determine
Concept Introduction:
Incremental Analysis is a decision-making technique used to identify the financial data that changes in different courses of action. It is a useful tool in decision making such as the decision to accept special orders, make or buy decisions, sell or further process decisions, repair or replace decisions, and decisions related to the elimination of unprofitable business segments.
The decision to regarding the stunner product line.
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Students have asked these similar questions
Cawley Company makes three models of tasers. Information on the three products is given below.
Blossom Company makes three models of tasers. Information on the three products is given below.
Sales
Variable expenses
Contribution margin
Fixed expenses
Net income
(a)
Tingler
Shocker
Stunner
$296,000 $504,000 $200,000
145.000 190,000
151,000 314,000
114,840
225,160
$36,160 $88,840
Net income
Fixed expenses consist of $290,000 of common costs allocated to the three products based on relative sales, as well as direct fixed
expenses unique to each model of $29,000 (Tingler). $79.000 (Shocker), and $34,000 (Stunner). The common costs will be incurred
regardless of how many models are produced. The direct fixed expenses would be eliminated if that model is phased out.
James Watt, an executive with the company, feels the Stunner line should be discontinued to increase the company's net income.
Compute current net income for Blossom Company.
135,000
65,000
92,000
$(27,000)
Cullumber Company makes three models of tasers. Information on the three products is given below.
Sales
Variable expenses
Contribution margin
Fixed expenses
Net income
(a)
Net income $
(b)
Shocker Net Income
Tingler
$300,000 $500,000
Tingler Net Income $
Total Net Income
(c)
Why or why not?
Compute current net income for Cullumber Company.
ta
Net income would
151,400
148,600
$
119,400
S
$29,200
Fixed expenses consist of $298,000 of common costs allocated to the three products based on relative sales, as well as direct fixed
expenses unique to each model of $30,000 (Tingler), $80,800 (Shocker), and $34,300 (Stunner). The common costs will be incurred
regardless of how many models are produced. The direct fixed expenses would be eliminated if that model is phased out.
James Watt, an executive with the company, feels the Stunner line should be discontinued to increase the company's net income.
Shocker
197,000
303,000
229,800
$73,200
Compute net income by product line and in total for…
Chapter 23 Solutions
ACCOUTING PRIN SET LL INCLUSIVE
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