Cullumber Inc. has 4 product lines: sour cream, ice cream, yogurt, and butter. Demand of individual products is not affected by changes in other product lines., 30% of the fixed costs are direct, and the other 70% are allocated. Results of June follow. Units sold Revenue Variable departmental costs Fixed costs Net income (loss) Sour Cream 2,120 $10,600 6,360 5,300 $(1.060) Ice Cream 530 $21,200 13,780 2.120 $5,300 Yogurt 424 $10,600 4,452 3,180 $2.968 Butter 212 $21,200 5.088 7,420 $8.692 Total 3,286 $63,600 29,680 18,020 $15,900 Prepare an incremental analysis of the effect of dropping the sour cream product line. (Enter negative amounts using either a negative sign preceding the number eg -45 or parentheses eg. (45))

Cullumber Inc. has 4 product lines: sour cream, ice cream, yogurt, and butter. Demand of individual products is not affected by changes in other product lines., 30% of the fixed costs are direct, and the other 70% are allocated. Results of June follow. Units sold Revenue Variable departmental costs Fixed costs Net income (loss) Sour Cream 2,120 $10,600 6,360 5,300 $(1.060) Ice Cream 530 $21,200 13,780 2.120 $5,300 Yogurt 424 $10,600 4,452 3,180 $2.968 Butter 212 $21,200 5.088 7,420 $8.692 Total 3,286 $63,600 29,680 18,020 $15,900 Prepare an incremental analysis of the effect of dropping the sour cream product line. (Enter negative amounts using either a negative sign preceding the number eg -45 or parentheses eg. (45))

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 3CE: Pattison Products, Inc., began operations in October and manufactured 40,000 units during the month...

See similar textbooks

Similar questions

Pattison Products, Inc., began operations in October and manufactured 40,000 units during the month with the following unit costs: Fixed overhead per unit = 280,000/40,000 units produced = 7. Total fixed factory overhead is 280,000 per month. During October, 38,400 units were sold at a price of 24, and fixed marketing and administrative expenses were 130,500. Required: 1. Calculate the cost of each unit using absorption costing. 2. How many units remain in ending inventory? What is the cost of ending inventory using absorption costing? 3. Prepare an absorption-costing income statement for Pattison Products, Inc., for the month of October. 4. What if November production was 40,000 units, costs were stable, and sales were 41,000 units? What is the cost of ending inventory? What is operating income for November?
Bradshaw Company reported sales of 5,000,000 in 20X1. At the end of the fiscal year (June 30, 20X1), the following quality costs were reported: Required: 1. Prepare a quality cost report. 2. Prepare a graph (pie chart or bar graph) that shows the relative distribution of quality costs, and comment on the distribution. 3. Assuming sales of 5,000,000, by how much would profits increase if quality improves so that quality costs are only 3% of sales?
Keith Inc. has 4 product lines: sour cream, ice cream, yogurt, and butter. Demand of individual products is not affected by changes in other product lines. 30% of the fixed costs are direct, and the other 70% are allocated. Results of June follow: Units sold Revenue Variable departmental costs Fixed costs Net income (loss) Sour Cream 2,000 $ 10,000 6,000 5,000 $ (1,000) Ice Cream 500 $ 20,000 $ 13,000 2,000 5,000 Yogurt $ 400 $ 10,000 4,200 3,000 2,800 Butter 200 $ 20,000 4,800 7,000 $ 8,200 Total 3,100 $ 60,000 28,000 17,000 $ 15,000 Prepare an incremental analysis of the effect of dropping the sour cream product line. (Ent negative amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) SUPPORT
Parino Company has three product lines in its retail stores: books, videos, and music. The allocated fixed costs are based on units sold and are unavoidable. Demand of individual products is not affected by changes in other product lines. Results of the fourth quarter are presented below: Books Music Videos Total Units sold 1,000 2,000 2,000 5,000 Revenue $24,000 $48,000 $32,000 $104,000 Variable departmental 15,000 22,000 23,000 60,000 Costs Direct fixed costs 3,000 6,000 4,000 13,000 Allocated fixed costs 4,400 8,800 8,800 22,000 Net income (loss) $1,600 $11,200 $ (3,800) $9,000 Question: The incremental decrease in profit to drop video line is…
Sandhill Inc. has 4 product lines: sour cream, ice cream, yogurt, and butter. Demand of individual products is not affected by changes in other product lines. 30% of the fixed costs are direct, and the other 70% are allocated. Results of June follow: Sour Cream Ice Cream Yogurt Butter Total Units sold 2,400 600 480 240 3,720 Revenue $12,000 $24,000 $12,000 $24,000 $72,000 Variable departmental costs 7,200 15,600 5,040 5,760 33,600 Fixed costs 6,000 2,400 3,600 8,400 20,400 Net income (loss) $(1,200) $6,000 $3,360 $9,840 $18,000 Prepare an incremental analysis of the effect of dropping the sour cream product line. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Parino Company has three product lines in its retail stores: books, videos, and music. The allocated fixed costs are based on units sold and are unavoidable. Demand of individual products is not affected by changes in other product lines. Results of the fourth quarter are presented below: Books Music Videos Total Units sold 1,000 2,000 2,000 5,000 Revenue $24,000 $48,000 $30,000 $102,000 Variable departmental costs 15,000 22,000 23,000 60,000 Direct fixed costs 3,000 6,000 4,000 13,000 Allocated fixed costs 4,400 8,800 8,800 22,000 ===== ==== = ====== ====== Net income (loss) $ 1,600 $11,200 $ (5,800) $ 7,000 Instructions Prepare an incremental analysis of the effect of dropping the Video product line.
FamaNyame Company has three divisions : Ess,Wae, and Zee. Division Ess' income statement shows the following for the year ended December 31 Sales-GHC1500000; Cost of goods sold - GHC1125000; Selling expenses- GHC125000, and administrative expenses- GHC 350000. Cost of goods sold is 80 per cent variable and 20 per cent fixed. Of the fixed costs, 50 per cent are avoidable if the division is closed. All the selling expenses relate to the division and would be eliminated if Division Ess were eliminated. Of the administrative costs, 85 per cent are applied from corporate expenses. If Division Ess were eliminated, FamaNyame's income would
Harmark has three product lines in its retail stores: kites, wind socks, and flags. Results of the fourth quarter are presented below: Kites Wind Socks Flags Total Units sold 1,000 2,000 2,000 5,000 Revenue $22,000 $40,000 $23,000 $85,000 Variable Departmental 15,000 22,000 12,000 49,000 Costs Direct fixed costs 1,000 3,000 2,000 6,000 Allocated fixed costs 8,000 8,000 8,000 28,000 Net income (loss) $(2,000) $7,000 $1,000 $6,000 The allocated fixed costs are unavoidable. Demand of individual products is not affected by changes in other product lines. Questions: What will happen to profits if Harmark discontinues the…
Morwenna, Inc. reports the following information for August: Sales Revenue Variable Cost of Goods Sold Fixed Cost of Goods Sold Variable Selling and Administrative Costs Fixed Selling and Administrative Costs $900,000 150,000 60,000 100,000 60,000 Calculate the operating income for August using absorption costing. OA. $1,060,000 O B. $370,000 OC. $530,000 D. $250,000
ed Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. Income Statements (Absorption Costing) Sales ($60 per unit) Year 1 $ Year 2 $ 1,920,000 3,960,000 Cost of goods sold ($45 per unit) 1,440,000 2,970,000 Gross profit 480,000 990,000 Selling and administrative expenses ok Income t 338,000 474,000 $ 142,000 $ 516,000 Additional Information a. Sales and production data for these first two years follow. Year 1 Year 2 nces Units Units produced 49,000 49,000 Units sold 32,000 66,000 b. Variable costs per unit and fixed costs per year are unchanged during these years. The company's $45 per unit product cost using absorption costing consists of the following. Direct materials Direct labor $ 12 19 Variable overhead Fixed overhead ($539,000/49,000 units) 3 11 Total product cost per unit $ 45 c. Selling and administrative expenses consist of the following. Selling and Administrative Expenses Variable selling and…
Mcdale Incorporated produces and sells two products. Data concerning those products for the most recent month appear below: Product I49V Product Z50U $ 15,000 $ 3,300 $ 14,000 $ 2,790 Sales Variable expenses The fixed expenses of the entire company were $18,460. The break-even point for the entire company is closest to: Multiple Choice $18,460 $24,550 $10,540 $23,367
Jayleen Company makes two products: Carpet Kleen and Floor Deodorizer. Operating information from the previous year follows. Carpet Kleen Units produced and sold Machine hours used Sales price per unit Variable cost per unit 4,000 4,000 $ 6 $4 Floor Deodorizer 3,000 1,500 $ 12 $ 10 Fixed costs of $39,000 per year are presently allocated equally between both products. If the product mix were to change, total fixed costs would remain the same. The contribution margin per machine hour for Floor Deodorizer is: