The departmental contribution margin income statement

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 24, Problem 7E

Requirement-1

To determine

To Prepare:

The departmental contribution margin income statement

Requirement-1

Expert Solution

Answer to Problem 7E

The departmental contribution margin income statement is as follows:

Contribution Margin Income Statement
For the year ended Dec. 31, 2019

	Acoustic	Electric
Sales	$ 112,500	$ 105,500
Less: Variable Expenses:
Cost of Goods Sold	$ (55,675)	$ (66,750)
Salaries Expense	$ (17,300)	$ (13,500)
Supplies Expense	$ (2,030)	$ (1,700)
Contribution Margin	$ 37,495	$ 23,550

Less: Overheads (Fixed):
Advertising	$ (8,075)	$ (6,250)
Depreciation expense- Equipment	$ (10,150)	$ (9,000)
Rent	$ (6,105)	$ (5,950)
Utilities	$ (3,045)	$ (2,550)

Net Income (Loss)	$ 10,120	$(200)

Explanation of Solution

The departmental contribution margin income statement is prepared as follows:

Contribution Margin Income Statement
For the year ended Dec. 31, 2019

	Acoustic	Electric
Sales	$ 112,500	$ 105,500
Less: Variable Expenses:
Cost of Goods Sold	$ (55,675)	$ (66,750)
Salaries Expense	$ (17,300)	$ (13,500)
Supplies Expense	$ (2,030)	$ (1,700)
Contribution Margin	$ 37,495	$ 23,550

Less: Overheads (Fixed):
Advertising	$ (8,075)	$ (6,250)
Depreciation expense- Equipment	$ (10,150)	$ (9,000)
Rent	$ (6,105)	$ (5,950)
Utilities	$ (3,045)	$ (2,550)

Net Income (Loss)	$ 10,120	$(200)

Concept Introduction:

Contribution Margin Income Statement:

Contribution Margin Income Statement is a format of income statement used for cost volume profit analysis. This statement shows the Variable costs and fixed costs as separate items. It calculates the contribution margin and Net income as well.

Requirement-2

To determine

If the Electric Division should be eliminated

Requirement-2

Expert Solution

Answer to Problem 7E

Electric Division should not be eliminated.

Explanation of Solution

The departmental contribution margin income statement is prepared as follows:

Contribution Margin Income Statement
For the year ended Dec. 31, 2019

	Acoustic	Electric
Sales	$ 112,500	$ 105,500
Less: Variable Expenses:
Cost of Goods Sold	$ (55,675)	$ (66,750)
Salaries Expense	$ (17,300)	$ (13,500)
Supplies Expense	$ (2,030)	$ (1,700)
Contribution Margin	$ 37,495	$ 23,550

Less: Overheads (Fixed):
Advertising	$ (8,075)	$ (6,250)
Depreciation expense- Equipment	$ (10,150)	$ (9,000)
Rent	$ (6,105)	$ (5,950)
Utilities	$ (3,045)	$ (2,550)

Net Income (Loss)	$ 10,120	$(200)

Based on the above contribution margin income statement, Electric division as positive contribution for the overhead, hence this division should not be eliminated.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Question 4Waterfront Inc. wishes to borrow on a short-term basis withoutreducing its current ratio below 1.25. At present its current assetsand current liabilities are $1,600 and $1,000 respectively. How muchcan Waterfront Inc. borrow?

Question 6During 2019, Bitsincoins Corporation had EBIT of $100,000, a changein net fixed assets of $400,000, an increase in net current assets of$100,000, an increase in spontaneous current liabilities of $400,000,a depreciation expense of $50,000, and a tax rate of 30%. Based onthis information, what is Bitsincoin’s free cash flow?

Cariveh Co sells automotive supplies from 25 different locations in one country. Each branch has up to 30 staff working there, although most of the accounting systems are designed and implemented from the company's head office. All accounting systems, apart from petty cash, are computerised, with the internal audit department frequently advising and implementing controls within those systems.Cariveh has an internal audit department of six staff, all of whom have been employed at Cariveh for a minimum of five years and some for as long as 15 years. In the past, the chief internal auditor appoints staff within the internal audit department, although the chief executive officer (CEO) is responsible for appointing the chief internal auditor.The chief internal auditor reports directly to the finance director. The finance director also assists the chief internal auditor in deciding on the scope of work of the internal audit department.You are an audit manager in the internal audit department…

Answer 2

Question

Chapter 24, Problem 7E

Requirement-1

To determine

To Prepare:

The departmental contribution margin income statement

Requirement-1

Expert Solution

Answer to Problem 7E

The departmental contribution margin income statement is as follows:

Contribution Margin Income Statement
For the year ended Dec. 31, 2019

	Acoustic	Electric
Sales	$ 112,500	$ 105,500
Less: Variable Expenses:
Cost of Goods Sold	$ (55,675)	$ (66,750)
Salaries Expense	$ (17,300)	$ (13,500)
Supplies Expense	$ (2,030)	$ (1,700)
Contribution Margin	$ 37,495	$ 23,550

Less: Overheads (Fixed):
Advertising	$ (8,075)	$ (6,250)
Depreciation expense- Equipment	$ (10,150)	$ (9,000)
Rent	$ (6,105)	$ (5,950)
Utilities	$ (3,045)	$ (2,550)

Net Income (Loss)	$ 10,120	$(200)

Explanation of Solution

The departmental contribution margin income statement is prepared as follows:

Contribution Margin Income Statement
For the year ended Dec. 31, 2019

	Acoustic	Electric
Sales	$ 112,500	$ 105,500
Less: Variable Expenses:
Cost of Goods Sold	$ (55,675)	$ (66,750)
Salaries Expense	$ (17,300)	$ (13,500)
Supplies Expense	$ (2,030)	$ (1,700)
Contribution Margin	$ 37,495	$ 23,550

Less: Overheads (Fixed):
Advertising	$ (8,075)	$ (6,250)
Depreciation expense- Equipment	$ (10,150)	$ (9,000)
Rent	$ (6,105)	$ (5,950)
Utilities	$ (3,045)	$ (2,550)

Net Income (Loss)	$ 10,120	$(200)

Concept Introduction:

Contribution Margin Income Statement:

Contribution Margin Income Statement is a format of income statement used for cost volume profit analysis. This statement shows the Variable costs and fixed costs as separate items. It calculates the contribution margin and Net income as well.

Requirement-2

To determine

If the Electric Division should be eliminated

Requirement-2

Expert Solution

Answer to Problem 7E

Electric Division should not be eliminated.

Explanation of Solution

The departmental contribution margin income statement is prepared as follows:

Contribution Margin Income Statement
For the year ended Dec. 31, 2019

	Acoustic	Electric
Sales	$ 112,500	$ 105,500
Less: Variable Expenses:
Cost of Goods Sold	$ (55,675)	$ (66,750)
Salaries Expense	$ (17,300)	$ (13,500)
Supplies Expense	$ (2,030)	$ (1,700)
Contribution Margin	$ 37,495	$ 23,550

Less: Overheads (Fixed):
Advertising	$ (8,075)	$ (6,250)
Depreciation expense- Equipment	$ (10,150)	$ (9,000)
Rent	$ (6,105)	$ (5,950)
Utilities	$ (3,045)	$ (2,550)

Net Income (Loss)	$ 10,120	$(200)

Based on the above contribution margin income statement, Electric division as positive contribution for the overhead, hence this division should not be eliminated.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 24, Problem 7E

Requirement-1

To determine

To Prepare:

The departmental contribution margin income statement

Requirement-1

Expert Solution

Answer to Problem 7E

The departmental contribution margin income statement is as follows:

Contribution Margin Income Statement
For the year ended Dec. 31, 2019

	Acoustic	Electric
Sales	$ 112,500	$ 105,500
Less: Variable Expenses:
Cost of Goods Sold	$ (55,675)	$ (66,750)
Salaries Expense	$ (17,300)	$ (13,500)
Supplies Expense	$ (2,030)	$ (1,700)
Contribution Margin	$ 37,495	$ 23,550

Less: Overheads (Fixed):
Advertising	$ (8,075)	$ (6,250)
Depreciation expense- Equipment	$ (10,150)	$ (9,000)
Rent	$ (6,105)	$ (5,950)
Utilities	$ (3,045)	$ (2,550)

Net Income (Loss)	$ 10,120	$(200)

Explanation of Solution

The departmental contribution margin income statement is prepared as follows:

Contribution Margin Income Statement
For the year ended Dec. 31, 2019

	Acoustic	Electric
Sales	$ 112,500	$ 105,500
Less: Variable Expenses:
Cost of Goods Sold	$ (55,675)	$ (66,750)
Salaries Expense	$ (17,300)	$ (13,500)
Supplies Expense	$ (2,030)	$ (1,700)
Contribution Margin	$ 37,495	$ 23,550

Less: Overheads (Fixed):
Advertising	$ (8,075)	$ (6,250)
Depreciation expense- Equipment	$ (10,150)	$ (9,000)
Rent	$ (6,105)	$ (5,950)
Utilities	$ (3,045)	$ (2,550)

Net Income (Loss)	$ 10,120	$(200)

Concept Introduction:

Contribution Margin Income Statement:

Contribution Margin Income Statement is a format of income statement used for cost volume profit analysis. This statement shows the Variable costs and fixed costs as separate items. It calculates the contribution margin and Net income as well.

Requirement-2

To determine

If the Electric Division should be eliminated

Requirement-2

Expert Solution

Answer to Problem 7E

Electric Division should not be eliminated.

Explanation of Solution

The departmental contribution margin income statement is prepared as follows:

Contribution Margin Income Statement
For the year ended Dec. 31, 2019

	Acoustic	Electric
Sales	$ 112,500	$ 105,500
Less: Variable Expenses:
Cost of Goods Sold	$ (55,675)	$ (66,750)
Salaries Expense	$ (17,300)	$ (13,500)
Supplies Expense	$ (2,030)	$ (1,700)
Contribution Margin	$ 37,495	$ 23,550

Less: Overheads (Fixed):
Advertising	$ (8,075)	$ (6,250)
Depreciation expense- Equipment	$ (10,150)	$ (9,000)
Rent	$ (6,105)	$ (5,950)
Utilities	$ (3,045)	$ (2,550)

Net Income (Loss)	$ 10,120	$(200)

Based on the above contribution margin income statement, Electric division as positive contribution for the overhead, hence this division should not be eliminated.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 24, Problem 7E

Requirement-1

To determine

To Prepare:

The departmental contribution margin income statement

Requirement-1

Expert Solution

Answer to Problem 7E

The departmental contribution margin income statement is as follows:

Contribution Margin Income Statement
For the year ended Dec. 31, 2019

	Acoustic	Electric
Sales	$ 112,500	$ 105,500
Less: Variable Expenses:
Cost of Goods Sold	$ (55,675)	$ (66,750)
Salaries Expense	$ (17,300)	$ (13,500)
Supplies Expense	$ (2,030)	$ (1,700)
Contribution Margin	$ 37,495	$ 23,550

Less: Overheads (Fixed):
Advertising	$ (8,075)	$ (6,250)
Depreciation expense- Equipment	$ (10,150)	$ (9,000)
Rent	$ (6,105)	$ (5,950)
Utilities	$ (3,045)	$ (2,550)

Net Income (Loss)	$ 10,120	$(200)

Explanation of Solution

The departmental contribution margin income statement is prepared as follows:

Contribution Margin Income Statement
For the year ended Dec. 31, 2019

	Acoustic	Electric
Sales	$ 112,500	$ 105,500
Less: Variable Expenses:
Cost of Goods Sold	$ (55,675)	$ (66,750)
Salaries Expense	$ (17,300)	$ (13,500)
Supplies Expense	$ (2,030)	$ (1,700)
Contribution Margin	$ 37,495	$ 23,550

Less: Overheads (Fixed):
Advertising	$ (8,075)	$ (6,250)
Depreciation expense- Equipment	$ (10,150)	$ (9,000)
Rent	$ (6,105)	$ (5,950)
Utilities	$ (3,045)	$ (2,550)

Net Income (Loss)	$ 10,120	$(200)

Concept Introduction:

Contribution Margin Income Statement:

Contribution Margin Income Statement is a format of income statement used for cost volume profit analysis. This statement shows the Variable costs and fixed costs as separate items. It calculates the contribution margin and Net income as well.

Requirement-2

To determine

If the Electric Division should be eliminated

Requirement-2

Expert Solution

Answer to Problem 7E

Electric Division should not be eliminated.

Explanation of Solution

The departmental contribution margin income statement is prepared as follows:

Contribution Margin Income Statement
For the year ended Dec. 31, 2019

	Acoustic	Electric
Sales	$ 112,500	$ 105,500
Less: Variable Expenses:
Cost of Goods Sold	$ (55,675)	$ (66,750)
Salaries Expense	$ (17,300)	$ (13,500)
Supplies Expense	$ (2,030)	$ (1,700)
Contribution Margin	$ 37,495	$ 23,550

Less: Overheads (Fixed):
Advertising	$ (8,075)	$ (6,250)
Depreciation expense- Equipment	$ (10,150)	$ (9,000)
Rent	$ (6,105)	$ (5,950)
Utilities	$ (3,045)	$ (2,550)

Net Income (Loss)	$ 10,120	$(200)

Based on the above contribution margin income statement, Electric division as positive contribution for the overhead, hence this division should not be eliminated.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 24, Problem 7E

Requirement-1

To determine

To Prepare:

The departmental contribution margin income statement

Requirement-1

Expert Solution

Answer to Problem 7E

The departmental contribution margin income statement is as follows:

Contribution Margin Income Statement
For the year ended Dec. 31, 2019

	Acoustic	Electric
Sales	$ 112,500	$ 105,500
Less: Variable Expenses:
Cost of Goods Sold	$ (55,675)	$ (66,750)
Salaries Expense	$ (17,300)	$ (13,500)
Supplies Expense	$ (2,030)	$ (1,700)
Contribution Margin	$ 37,495	$ 23,550

Less: Overheads (Fixed):
Advertising	$ (8,075)	$ (6,250)
Depreciation expense- Equipment	$ (10,150)	$ (9,000)
Rent	$ (6,105)	$ (5,950)
Utilities	$ (3,045)	$ (2,550)

Net Income (Loss)	$ 10,120	$(200)

Explanation of Solution

The departmental contribution margin income statement is prepared as follows:

Contribution Margin Income Statement
For the year ended Dec. 31, 2019

	Acoustic	Electric
Sales	$ 112,500	$ 105,500
Less: Variable Expenses:
Cost of Goods Sold	$ (55,675)	$ (66,750)
Salaries Expense	$ (17,300)	$ (13,500)
Supplies Expense	$ (2,030)	$ (1,700)
Contribution Margin	$ 37,495	$ 23,550

Less: Overheads (Fixed):
Advertising	$ (8,075)	$ (6,250)
Depreciation expense- Equipment	$ (10,150)	$ (9,000)
Rent	$ (6,105)	$ (5,950)
Utilities	$ (3,045)	$ (2,550)

Net Income (Loss)	$ 10,120	$(200)

Concept Introduction:

Contribution Margin Income Statement:

Contribution Margin Income Statement is a format of income statement used for cost volume profit analysis. This statement shows the Variable costs and fixed costs as separate items. It calculates the contribution margin and Net income as well.

Requirement-2

To determine

If the Electric Division should be eliminated

Requirement-2

Expert Solution

Answer to Problem 7E

Electric Division should not be eliminated.

Explanation of Solution

The departmental contribution margin income statement is prepared as follows:

Contribution Margin Income Statement
For the year ended Dec. 31, 2019

	Acoustic	Electric
Sales	$ 112,500	$ 105,500
Less: Variable Expenses:
Cost of Goods Sold	$ (55,675)	$ (66,750)
Salaries Expense	$ (17,300)	$ (13,500)
Supplies Expense	$ (2,030)	$ (1,700)
Contribution Margin	$ 37,495	$ 23,550

Less: Overheads (Fixed):
Advertising	$ (8,075)	$ (6,250)
Depreciation expense- Equipment	$ (10,150)	$ (9,000)
Rent	$ (6,105)	$ (5,950)
Utilities	$ (3,045)	$ (2,550)

Net Income (Loss)	$ 10,120	$(200)

Based on the above contribution margin income statement, Electric division as positive contribution for the overhead, hence this division should not be eliminated.

Answer 6

Chapter 24, Problem 7E

Requirement-1

To determine

To Prepare:

The departmental contribution margin income statement

Requirement-1

Expert Solution

Answer to Problem 7E

The departmental contribution margin income statement is as follows:

Contribution Margin Income Statement
For the year ended Dec. 31, 2019

	Acoustic	Electric
Sales	$ 112,500	$ 105,500
Less: Variable Expenses:
Cost of Goods Sold	$ (55,675)	$ (66,750)
Salaries Expense	$ (17,300)	$ (13,500)
Supplies Expense	$ (2,030)	$ (1,700)
Contribution Margin	$ 37,495	$ 23,550

Less: Overheads (Fixed):
Advertising	$ (8,075)	$ (6,250)
Depreciation expense- Equipment	$ (10,150)	$ (9,000)
Rent	$ (6,105)	$ (5,950)
Utilities	$ (3,045)	$ (2,550)

Net Income (Loss)	$ 10,120	$(200)

Explanation of Solution

The departmental contribution margin income statement is prepared as follows:

Contribution Margin Income Statement
For the year ended Dec. 31, 2019

	Acoustic	Electric
Sales	$ 112,500	$ 105,500
Less: Variable Expenses:
Cost of Goods Sold	$ (55,675)	$ (66,750)
Salaries Expense	$ (17,300)	$ (13,500)
Supplies Expense	$ (2,030)	$ (1,700)
Contribution Margin	$ 37,495	$ 23,550

Less: Overheads (Fixed):
Advertising	$ (8,075)	$ (6,250)
Depreciation expense- Equipment	$ (10,150)	$ (9,000)
Rent	$ (6,105)	$ (5,950)
Utilities	$ (3,045)	$ (2,550)

Net Income (Loss)	$ 10,120	$(200)

Concept Introduction:

Contribution Margin Income Statement:

Contribution Margin Income Statement is a format of income statement used for cost volume profit analysis. This statement shows the Variable costs and fixed costs as separate items. It calculates the contribution margin and Net income as well.

Answer 7

Chapter 24, Problem 7E

Requirement-1

To determine

To Prepare:

The departmental contribution margin income statement

Answer 8

Requirement-1

Expert Solution

Answer to Problem 7E

The departmental contribution margin income statement is as follows:

Contribution Margin Income Statement
For the year ended Dec. 31, 2019

	Acoustic	Electric
Sales	$ 112,500	$ 105,500
Less: Variable Expenses:
Cost of Goods Sold	$ (55,675)	$ (66,750)
Salaries Expense	$ (17,300)	$ (13,500)
Supplies Expense	$ (2,030)	$ (1,700)
Contribution Margin	$ 37,495	$ 23,550

Less: Overheads (Fixed):
Advertising	$ (8,075)	$ (6,250)
Depreciation expense- Equipment	$ (10,150)	$ (9,000)
Rent	$ (6,105)	$ (5,950)
Utilities	$ (3,045)	$ (2,550)

Net Income (Loss)	$ 10,120	$(200)

Answer 9

Requirement-1

Expert Solution

Answer 10

Requirement-1

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

The departmental contribution margin income statement is prepared as follows:

Contribution Margin Income Statement
For the year ended Dec. 31, 2019

	Acoustic	Electric
Sales	$ 112,500	$ 105,500
Less: Variable Expenses:
Cost of Goods Sold	$ (55,675)	$ (66,750)
Salaries Expense	$ (17,300)	$ (13,500)
Supplies Expense	$ (2,030)	$ (1,700)
Contribution Margin	$ 37,495	$ 23,550

Less: Overheads (Fixed):
Advertising	$ (8,075)	$ (6,250)
Depreciation expense- Equipment	$ (10,150)	$ (9,000)
Rent	$ (6,105)	$ (5,950)
Utilities	$ (3,045)	$ (2,550)

Net Income (Loss)	$ 10,120	$(200)

Concept Introduction:

Contribution Margin Income Statement:

Contribution Margin Income Statement is a format of income statement used for cost volume profit analysis. This statement shows the Variable costs and fixed costs as separate items. It calculates the contribution margin and Net income as well.

Answer 13

Requirement-2

To determine

If the Electric Division should be eliminated

Requirement-2

Expert Solution

Answer to Problem 7E

Electric Division should not be eliminated.

Explanation of Solution

The departmental contribution margin income statement is prepared as follows:

Contribution Margin Income Statement
For the year ended Dec. 31, 2019

	Acoustic	Electric
Sales	$ 112,500	$ 105,500
Less: Variable Expenses:
Cost of Goods Sold	$ (55,675)	$ (66,750)
Salaries Expense	$ (17,300)	$ (13,500)
Supplies Expense	$ (2,030)	$ (1,700)
Contribution Margin	$ 37,495	$ 23,550

Less: Overheads (Fixed):
Advertising	$ (8,075)	$ (6,250)
Depreciation expense- Equipment	$ (10,150)	$ (9,000)
Rent	$ (6,105)	$ (5,950)
Utilities	$ (3,045)	$ (2,550)

Net Income (Loss)	$ 10,120	$(200)

Based on the above contribution margin income statement, Electric division as positive contribution for the overhead, hence this division should not be eliminated.

Answer 14

Requirement-2

To determine

If the Electric Division should be eliminated

Answer 15

Requirement-2

Expert Solution

Answer to Problem 7E

Electric Division should not be eliminated.

Answer 16

Requirement-2

Expert Solution

Answer 17

Requirement-2

Expert Solution

Answer 18

Expert Solution

Answer 19

Explanation of Solution

The departmental contribution margin income statement is prepared as follows:

Contribution Margin Income Statement
For the year ended Dec. 31, 2019

	Acoustic	Electric
Sales	$ 112,500	$ 105,500
Less: Variable Expenses:
Cost of Goods Sold	$ (55,675)	$ (66,750)
Salaries Expense	$ (17,300)	$ (13,500)
Supplies Expense	$ (2,030)	$ (1,700)
Contribution Margin	$ 37,495	$ 23,550

Less: Overheads (Fixed):
Advertising	$ (8,075)	$ (6,250)
Depreciation expense- Equipment	$ (10,150)	$ (9,000)
Rent	$ (6,105)	$ (5,950)
Utilities	$ (3,045)	$ (2,550)

Net Income (Loss)	$ 10,120	$(200)

Based on the above contribution margin income statement, Electric division as positive contribution for the overhead, hence this division should not be eliminated.