The management of Wengel Corporation is considering dropping product B90D. Data from the company's accounting system appear below: Sales Variable expenses Fixed manufacturing expenses Fixed selling and administrative expenses All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $179,000 of the fixed manufacturing expenses and $155,200 of the fixed selling and administrative expenses are avoidable if product B90D is discontinued. Required: What would be the financial advantage (disadvantage) of dropping B90D? Should the product be dropped? Net operating income (loss) would $ 745,000 $ 387,000 $ 253,400 $ 216, 200 decline increase by if product B90D were dropped. Therefore, the product dropped

The management of Wengel Corporation is considering dropping product B90D. Data from the company's accounting system appear below: Sales Variable expenses Fixed manufacturing expenses Fixed selling and administrative expenses All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $179,000 of the fixed manufacturing expenses and $155,200 of the fixed selling and administrative expenses are avoidable if product B90D is discontinued. Required: What would be the financial advantage (disadvantage) of dropping B90D? Should the product be dropped? Net operating income (loss) would $ 745,000 $ 387,000 $ 253,400 $ 216, 200 decline increase by if product B90D were dropped. Therefore, the product dropped

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Little Cory Corporation is considering dropping product G41O. Data from the company's accounting system appear below: All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $117,000 of the fixed manufacturing expenses and $46,000 of the fixed selling and administrative expenses are avoidable if product G41O is discontinued.Required:a. According to the company's accounting system, what is the net operating income earned by product G41O? b. What would be the effect on the company's overall net operating income of dropping product G41O? Should the product be dropped? There is not a word length requirement for this question; however, you must show your work. sales 450,000 variable expenses 185,000 fixesd manufacturing expenses 149,000 fixed selling and administered expenses 113,000
The management of Wengel Corporation is considering dropping product B90D. Data from the company's accounting system appear below: Sales Variable expenses Fixed manufacturing expenses Fixed selling and administrative expenses $803, 200 $417,300 $273,000 $233,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $193,000 of the fixed manufacturing expenses and $167,300 of the fixed selling and administrative expenses are avoidable if product B90D is discontinued. Required: 1. What would be the financial advantage (disadvantage) of dropping B90D? 米 2. Should B90D be dropped? O Yes O No
The management of Wengel Corporation is considering dropping product B90D. Data from the company's accounting system appear below Sales Variable expenses Fixed manufacturing expenses Fixed selling and administrative expenses $ 807,500 $ 419,500 $274,400 $ 234,200 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $194,000 of the fixed manufacturing expenses and $168,200 of the fixed selling and administrative expenses are avoidable if product B900 is discontinued. Required: What would be the financial advantage (disadvantage) of dropping 890D? Should the product be dropped? Not operating income (loss) would by it product B90D were dropped Therefore, the product dropped Show All Items
The management of M Corporation has been concerned for some time with the financial performance of its product I54J and has considered discontinuing it on several occasions. Data from the company's accounting system appear below: Sales $ 650,000 Variable Expenses $ 293,000 Fixed manufacturing expense $ 221,000 Fixed selling and administrative expense $ 150,000 In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $95,000 of the fixed manufacturing expenses and $85,000 of the fixed selling and administrative expenses are avoidable if product I54J is discontinued. According to the company's accounting system, what is the net operating income earned by product I54J? A. $14,000 B. ($357,000) C. ($14,000) D. $357,000
The management of Bonga Corporation is considering dropping product D74F. Data from the company's accounting system for this product for last year appear below: Sales Variable expenses Fixed manufacturing expenses Fixed selling and administrative expenses $ 927,000 $ 407,500 $ 341,000 $ 248,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $209,500 of the fixed manufacturing expenses and $120,500 of the fixed selling and administrative expenses are avoidable if product D74F is discontinued. What would be the financial advantage (disadvantage) from dropping product D74F? Multiple Choice $189,500 ($69,500)
The management of Bonga Corporation is considering dropping product D74F. Data from the company's accounting system for this product for last year appear below: Sales $ 933,000 Variable expenses $ 410,500 Fixed manufacturing expenses $ 347,000 Fixed selling and administrative expenses $ 254,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $212,500 of the fixed manufacturing expenses and $123,500 of the fixed selling and administrative expenses are avoidable if product D74F is discontinued. What would be the financial advantage (disadvantage) from dropping product D74F?
The management of Bonga Corporation is considering dropping product D74F. Data from the company's accounting system for this product for last year appear below: Sales Variable expenses $ 937,000 $ 416,000 $ 351,000 Fixed manufacturing expenses Fixed selling and administrative expenses $ 258,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $218,000 of the fixed manufacturing expenses and $129,000 of the fixed selling and administrative expenses are avoidable if product D74F is discontinued. According to the company's accounting system, what is the net operating income (loss) earned by product D74F? Include all costs in this calculation-whether relevant or not. $88,000 ($521,000) ($88,000) $521,000
Your Company is considering discontinuing a product. Data from the company's accounting system appear below: Sales $240,000 Variable costs $101,000 Fixed manufacturing costs $ 94,000 Fixed selling & administrative costs $ 55,000 $41,000 of the fixed manufacturing expenses and $25,000 of the fixed selling and administrative expenses cannot be avoided if the product is discontinued. What would be the effect on the company's overall net operating income if the product were dropped?
A company spent P10,000.00 in training its employees to use the new online Accounting System. The system turns out to be heavily unreliable and cannot be used with the current recording standards. The management wants to discontinue the use of the new system. The P10,000.00 spent to train the employees is a: Omarginal cost discretionary cost sunk cost opportunity cost
Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: Sales Variable expenses Contribution margin Fixed expenses $ 1,575, 000 659, 400 915, 600 1,007, 000 $ (01, 400) Net operating income (loss) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division East $435, 000 West $540, 000 Sales Variable expenses as a percentage of sales Traceable fixed expenses S600, 000 40% $326, 000 48% 39% $264, 000 $197,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department has proposed increasing the West Division's monthly advertising by $28,000 based on the belief that it would increase that division's sales by 12%. Assuming these estimates are accurate, how much would…
Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) $ 1,559,000 567,150 991,850 1,091,000 $ (99,150) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Sales Variable expenses as a percentage of sales Traceable fixed expenses East $ 359,000 $ 291,000 45% Division Central $ 640,000 24% $ 329,000 West 560,000 45% $ 204,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department has proposed increasing the West Division's monthly advertising by $22,000 based on the belief that it would increase that division's sales by 12%. Assuming these estimates are accurate, how much would…
Req 1 Req 2A Req 2B Prepare a contributlon format Income statement segmented by dlvislons. Division Total Company East Central West Req 1 Req 2A Req 2B The Marketing Department has proposed increasing the West Division's monthly advertising by $22,000 based on the belief that it would increase that division's sales by 13%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented? (Do not round intermediate calculations.) Net operating income will by Req 1 Req 2A Req 2B Would you recommend the increased advertising? OYes No