Sales $ 15,000,000 Cost of goods sold Gross profit (10,800,000) $ 4,200,000 (8,000,000) $ (3,800,000) Operating expenses Operating loss
Q: Presented here is the income statement for Fairchild Co. for March: Sales $ 81,500 Cost…
A: A contribution margin income statement subtracts all variable expenses from sales to calculate the…
Q: Given the following cost and activity observations for Smithson Company's utilities, use the…
A: Under high low method total costs at highest and lowest level of activity are considered for…
Q: Cullumber Beauty Corporation manufactures cosmetic products that are sold through a network of sales…
A: BREAKEVEN POINTBreak Even means the volume of production or sales where there is no profit or…
Q: Thalassines Kataskeves, S.A., of Greece makes marine equipment. The company has been experiencing…
A: Due to the fact that income and expenses differ depending on the kind of business or operations,…
Q: Determine the amount of sales (units) that would be necessary under Break-Even Sales Under Present…
A: Step 1: Compute the unit variable cost as shown below: Thus, unit variable cost is $31.41
Q: Suppose Grainy Day is considering discontinuing its tasty loops product line. Assume that during the…
A: Variable FixedCost of goods sold $ 38,40,000.00 $ 25,60,000.00 $ 64,00,000.00Operating…
Q: Determine the amount of sales (units) that would be necessary under Break-Even Sales Under Present…
A: Step 1: Income from operations is the income earned after deducting all the expenditures incurred…
Q: Determine the amount of sales (units) that would be necessary under Break-Even Sales Under Present…
A: Step 1: Compute the unit variable cost as shown below: Thus, unit variable cost is $31.41
Q: Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for…
A: A financial statement type that divides costs into variable and fixed components is the contribution…
Q: Norenberg Corporation manufactures a variety of products. The following data pertain to the…
A: Absorption costing: Absorption costing is also called traditional costing. This method of costing…
Q: Determine the amount of sales (units) that would be necessary under Break-Even Sales Under Present…
A: Step 1: Compute the unit variable cost as shown below: Thus, unit variable cost is $31.41
Q: Differential analysis for a discontinued product The condensed product-line income statement for…
A: Management accounting is a very important technique of determining and analyzing that if there is an…
Q: Required Information [The following information applies to the questions displayed below.] Oak Mart,…
A: VARIABLE COSTINGVariable Costing is a Cost Managerial Accounting Method in which all Variable Cost…
Q: A manufacturer's contribution margin income statement for the year follows. Sales ($10 per unit x…
A: Since you have posted two different questions, we will do the first one for you. Please post the…
Q: Required: 1-a. Prepare contribution format segmented income statements for the total company broken…
A: A contribution format income statement provides a breakdown of a company's revenues, costs, and…
Q: Vulcan Company’s contribution format income statement for June is as follows: Vulcan Company…
A: Company Nothern Southern $ $ $ Sales 900000 500000 400000 Variable expenses 400000 200000…
Q: Fanelli Corporation, a merchandising company, reported the following results for July: Number of…
A: Under the traditional format of an income statement gross profit is computed by deducting the cost…
Q: Thalassines Kataskeves, S.A., of Greece makes marine equipment. The company has been experiencing…
A: Only relevant costs should be considered while making decisions regarding adding or dropping a…
Q: ecision to Discontinue a Product On the basis of the following data, the general manager of…
A: The discontinuity of an activity is determined with the effect on profitability if activity is…
Q: Trez Company began operations this year. During this year, the company produced 100,000 units and…
A: VARIABLE COSTINGVariable Costing is a Cost Managerial Accounting Method in which all variable cost…
Q: L.L. Bean sells one product, its waterproof hiking boot. It began operations in the current year and…
A: Absorption costing is a method of costing that takes into account all manufacturing costs.…
Q: Differential Analysis for a Discontinued Product A condensed income statement by product line for…
A: A) Continue Discontinue Differentiated effect on income Sales 390,000 0 (390,000)…
Q: Prepare a differential analysis dated January 21 to determine whether Star Cola should be continued…
A: Requirement a: Differential Analysis: Differential analysis refers to the analysis of differential…
Q: Norwood Company has the following information for September: Sales $490,000 Variable cost of goods…
A: Computation of the Norwood Company for the month of September are as follows:
Q: Differential Analysis for a Discontinued Product A condensed income statement by product line for…
A: Under differential analysis, total costs and revenues at both the alternatives are compared to know…
Q: Required: 1-a. Prepare contribution format segmented income statements for the total company broken…
A: The contribution format segmented income statements is the format on which the each segment of the…
Q: Required information [The following information applies to the questions displayed below.] Hudson…
A: Sales revenue = units sold * sales per unit = 12,200 * $280 = $3,416,000 Total variable Cost =…
Q: Determine the amount of sales (units) that would be necessary under Break-Even Sales Under Present…
A: Hey, since there are multiple sub-parts posted, we will answer the three sub-parts. If you want any…
Q: For the past year, WoolCorp has experimented with its third product, extra-thick rug yarn. The…
A: Lets understand the basics. When management needs to choose between whether to continue any business…
Q: Benjamin Company had the following results of operations for the past year: Sales (17,600 units at…
A: In order to determine the contribution margin per unit, the variable cost per units are required to…
Q: A condensed income statement by product line for British Beverage Inc. indicated the following for…
A: a. Differential Analysis Continue Royal Cola (Alt. 1) or Discontinue Royal Cola (Alt. 2)…
Q: Winter Corporation, which only has one product, has provided the following data concerning its most…
A: As per the absorption costing method, the product cost includes fixed and variable manufacturing…
Q: The company has been experiencing losses for many months. In an effort to improve performance,…
A: The contribution segment income statement is a statement that is helpful in finding our contribution…
Q: Determine the amount of sales (units) that would be necessary under Break-Even Sales Under Present…
A: Step 1: Compute the unit variable cost as shown below: Thus, unit variable cost is $31.41
Q: Vulcan Company's contribution format income statement for June is as follows: Vulcan Company Income…
A: Variable costs are costs that vary with the change in the level of output whereas fixed costs are…
Q: The contribution margin income statement of Unique Donuts for August 2024 follows (Click the icon to…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: Differential Analysis for a Discontinued Product A condensed income statement by product line for…
A: Variable Cost :— It is the cost that changes with change in units. Variable cost per unit is…
Q: Differential Analysis for a Discontinued Product A condensed income statement by product line for…
A: Differential analysis is a decision-making technique that examines the benefits and costs associated…
Q: On the basis of the following data, the general manager of Foremost Footwear Inc. decided to…
A: Discontinue decisions should be made based on the contribution margin lost and avoidable fixed…
Q: A condensed income statement by product line for Lavonia Beverage Inc. indicated the following for…
A: It is the process of making decisions that involve the management of costs in order to achieve…
Q: Marley Company has the following information for March: Sales $912,000 Variable cost of goods sold…
A: CVP analysis is considered a decision-making tool that helps management to make strategies and take…
Q: Fanelli Corporation, a merchandising company, reported the following results for July: Number of…
A: the income statement can be prepared using various methods as traditional method and contribution…
A condensed income statement by product line for Warrick Reverage Inc.indicated the following for mango Cola for the past years
It is estimated that 30% of the cost of goods sold represents fixed
a. Prepare a differential analysis dated February 29 to determine whether Mango Cola should be continued (alternative 1) or discontinued (alternative 2)
b. Should Mango Cola be retained? Explain
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- Applying Differential Analysis to Profitability Scenarios Assume that Company A and Company B sell a microwave popcorn popper for $20. Although the companies have different cost structures, both companies currently show a profit of $21,000 based on sales of 14,000 units as shown in the following financial statements for the month of June. Both companies hold no inventory and sell contractual orders in the month. For the Month of June Company A Company B Sales ($20) $280,000 $280,000 Variable cost of goods sold ($5.00, 7.50, Company A and B, respectively) 70,000 105,000 Variable selling and administrative costs ($2.00, $4.00, Company A and B, respectively) 28,000 56,000 Contribution margin 182,000 119,000 Fixed cost of goods sold 105,000 70,000 Fixed selling and administrative costs 56,000 28,000 Profits Before-Tax $21,000 $21,000 For each company, determine the impact on monthly profit using differential analysis for each of the following separate scenarios.1.…The annual data that follow pertain to Carl's Crazy Eyewear, a manufacturer of swimming goggles. (Carl's Crazy Eyewear had no beginning Finished Goods Inventory in January.) (Click the icon to view the data.) Read the requirements. Data table Number of goggles produced Number of goggles sold Sales price per unit Variable manufacturing cost per unit Sales commission cost per unit Fixed manufacturing overhead Fixed selling and administrative costs Print Done $ 235,000 195,000 30 7 3 940,000 230,000 Requirements 1. Prepare both conventional (absorption costing) and contribution margin (variable costing) income statements for Carl's Crazy Eyewear for the year ended December 31. 2. Which statement shows the higher operating income? Why? 3. Carl's Crazy Eyewear's marketing vice president believes a new sales promotion that costs $360,000 would increase sales to 225,000 goggles. Should the company go ahead with the promotion? Give your reasoning. Print Done - X ember 31. (Round intermediary! Required information [The following information applies to the questions displayed below.] O'Brien Company manufactures and sells one product. The following information pertains to each of the company's first three years of operations: Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses a. Compute the unit product cost for Year 1, Year 2, and Year 3. b. Prepare an income statement for Year 1, Year 2, and Year 3. During its first year of operations, O'Brien produced 98,000 units and sold 74,000 units. During its second year of operations, it produced 80,000 units and sold 99,000 units. In its third year, O'Brien produced 90,000 units and sold 85,000 units. The selling price of the company's product is $78 per unit. Req 4A 4. Assume the company uses absorption costing and a LIFO inventory flow assumption (LIFO…
- Determine the amount of sales (units) that would be necessary under Break-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 83,700 units at a price of $48 per unit during the current year. Its income statement for the current year is as follows: Sales $4,017,600 Cost of goods sold 1,984,000 Gross profit $2,033,600 Expenses: Selling expenses $992,000 Administrative expenses 992,000 Total expenses 1,984,000 Income from operations $49,600 The division of costs between fixed and variable is as follows: Variable Fixed Cost of goods sold 70% 30% Selling expenses 75% 25% Administrative expenses 50% 50% Management is considering a plant expansion program that will permit an increase of $336,000 in yearly sales. The expansion will increase fixed costs by $33,600, but…A company reports the following contribution margin income statement. Contribution Margin Income Statement For Year Ended December 31 Sales (19,200 units at $22.50 each) Variable costs (19,200 units at $18.00 each) Contribution margin. Fixed costs Income The manager believes the company can increase sales volume to 22,000 total units by increasing advertising costs by $16,200. Required A Required B Complete this question by entering your answers in the tabs below. Contribution Margin Income Statement For Year Ended December 31 $ 432,000 345,600 Prepare a contribution margin income statement assuming the company incurs the additional advertising costs and sales volume increases to 22,000 units. Sales Variable costs Contribution margin 86,400 64,800 $ 21,600 Fixed costs Incomeulcan Company's contribution format income statement for June is as follows: Vulcan Company Income Statement For the Month Ended June 30 Sales Variable expenses Contribution margin Fixed expenses Net operating income $ 900,000 408,000 492,000 455,000 $ 37,000 Management is disappointed with the company's performance and is wondering what can be done to improve profits. By examining sales and cost records, you have determined the following: a. The company is divided into two sales territories-Northern and Southern. The Northern Territory recorded $400,000 in sales and $208,000 in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern Territory. Fixed expenses of $164,000 and $125,000 are traceable to the Northern and Southern Territories, respectively. The rest of the fixed expenses are common to the two territories. b. The company is the exclusive distributor for two products-Paks and Tibs. Sales of Paks and Tibs totaled $150,000 and…
- Differential Analysis for a Discontinued Product A condensed income statement by product line for Lavonia Beverage Inc. indicated the following for Vim Cola for the past year: Sales $234,600 Cost of goods sold (111,000) Gross profit $123,600 (144,000) $(20,400) Operating expenses Operating loss It is estimated that 15% of the cost of goods sold represents fixed factory overhead costs and that 23% of the operating expenses are fixed. Because Vim Cola is only one of many products, the fixed costs will not be materially affected if the product is discontinued. a. Prepare a differential analysis dated November 2 to determine whether Viem Cola should be continued (Alternative 1) or discontinued (Alternative 2). If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. Differential Analysis Continue (Alt. 1) or Discontinue (Alt. 2) Vim Colo November 2 Line Item Description Revenues Costs: Variable cost of goods sold Variable operating expenses Fixed costs Profit…Differential Analysis for a Discontinued Product A condensed income statement by product line for Warrick Beverage Inc. indicated the following for Mango Cola for the past year: Sales $15,000,000 Cost of goods sold (10,800,000) Gross profit $4,200,000 Operating expenses (8,000,000) >) Operating loss $(3,800,000) It is estimated that 30% of the cost of goods sold represents fixed factory overhead costs and that 25% of the operating expenses are fixed. Because Mango Cola is only one of many products, the fixed costs will not be materially affected if the product is discontinued. a. Prepare a differential analysis dated February 29 to determine whether Mango Cola should be continued (Alternative 1) or discontinued (Alternative 2). If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. Differential Analysis Continue (Alt. 1) or Discontinue (Alt. 2) Mango Cola February 29 Continue Discontinue Differential Mango Cola Effects Mango Cola (Alternative 1) (Alternative…Determine the amount of sales (units) that would be necessary under Break-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 83,700 units at a price of $48 per unit during the current year. Its income statement for the current year is as follows: Sales $4,017,600 Cost of goods sold 1,984,000 Gross profit $2,033,600 Expenses: Selling expenses $992,000 Administrative expenses 992,000 Total expenses 1,984,000 Income from operations $49,600 The division of costs between fixed and variable is as follows: Variable Fixed Cost of goods sold 70% 30% Selling expenses 75% 25% Administrative expenses 50% 50% Management is considering a plant expansion program that will permit an increase of $336,000 in yearly sales. The expansion will increase fixed costs by $33,600, but…
- Philadelphia Company has the following information for March: Sales $484,795 Variable cost of goods sold 205,574 Fixed manufacturing costs 76,273 Variable selling and administrative expenses 52,568 Fixed selling and administrating expenses 35,254 a. Determine the March manufacturing margin.$fill in the blank 1 b. Determine the March contribution margin.$fill in the blank 2 c. Determine the March income from operations for Philadelphia Company.$fill in the blank 3Morning Company reports the following information for March: E (Click the icon to view the data.) Read the requirements. Requirement 1. Calculate the gross profit and operating income for March using absorption costing. Morning Company Income Statement (Absorption Costing) For the Month Ended March 31 Data Table Net Sales Revenue 67,850 Variable Cost of Goods Solłd 19,300 Operating income Fixed Cost of Goods Sold 8,400 Variable Selfing and Administrative Costs 16,500 Requirements Fixed Selling and Administrative Costs 3,800 1. Calculate the gross profit and operating income for March using absorption costing. 2. Calculate the contribution margin and operating income for March using variable costing. Print DoneProduct Alpha has revenue of $101,590, variable cost of goods sold of $51,430, variable selling expenses of $21,010, and fixed costs of $36,680, creating a loss from operations of $7,530. Required: 1. Prepare a differential analysis as of December 10 to determine whether Product Alpha should be continued (Alternative 1) or discontinued (Alternative 2), assuming that fixed costs are unaffected by the decision. Refer to the list of Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required. 2. Determine if Product Alpha should be continued (Alternative 1) or discontinued (Alternative 2). Prepare a differential analysis as of December 10 to determine whether Product Alpha should be continued (Alternative 1) or discontinued (Alternative 2), assuming that fixed…