A guitar manufacturer is considering eliminating its electric guitar division because its $ 76,000 expenses are higher

Question:

A guitar manufacturer is considering eliminating its electric guitar division because its $ 76,000 expenses are higher than its $ 72,000 sales. The company reports the following expenses for this division.

Should the division be eliminated?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Fundamental accounting principle

ISBN: 978-0078025587

21st edition

Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta

See More Books

Question Posted: Nov 29, 2013 06:07 AM

See More Questions

The company reports the following data for the past three years Compute the allowance for bad debts as a percentage of accounts receivable and evaluate the quality of accounts receivable over the...
The Wright Company reports the following information for the year ended December 31, 2007: Pretax income from continuing operations ...........$160,000a Pretax gain from sale of investment...
The ABC company reports the following information for the current year. Sales $1,980 Selling expenses 350 Manufacturing overhead 460 Direct labor 400 Administrative expenses 500 Purchases of Direct...
Poppins Company has the following: If 9,000 units are on hand at December 31, the cost of the ending inventory under FIFO is: (a) $99,000. (b) $108,000. (c) $113,000. (d) $117,000. Inventory, Jan. 1...
Four companies are considering a rights offering. The data is as follows: Required: (a) Calculate the theoretical ex-rights share price for each company. (b) Calculate the value of one right for each...
Describe how we determine the ROE and EPS indifference points for a firm based on various financing alternatives, and explain why this analysis provides the firm with useful information.
5. A colleague suggests that a 6 percent growth rate is too low for revenue, profit, and cash flow growth beyond year 5. He suggests raising growth to 12 percent in the continuing-value period. If...
Soft phonon mode consider a line of ions of equal mass but alternating in charge, with e p = e(?1) p as the charge on the pth ion the inter atomic potential is the sum of two contributions (1) a...
Cordova Company manufactures T-shirts printed with tourist destination logos. The following table shows sales prices and projected sales volume for the summer months (Click the icon to view the...
In Chapter 4, you worked with data on sales for a line of skiwear that is produced by HeathCo Industries. Barbara Lynch, product manager for the skiwear, has the responsibility of providing forecasts...
Radar Company sells bikes for $ 300 each. The company currently sells 3,750 bikes per year and could make as many as 5,000 bikes per year. The bikes cost $ 225 each to make; $ 150 in variable costs...
Rory Company has a machine with a book value of $ 75,000 and a remaining five-year useful life. A new machine is available at a cost of $ 112,500, and Rory can also receive $ 60,000 for trading in...
What are the main categories of quality costs that a business may incur and why is it useful to categorise them? (R-3)
Given the following differential equation, dydx = sin ( x + y ) Find the following: ( a ) The substitution u = ( b ) The transformed differential equation dudx = ( c ) The implicit solution, given...
Consider the following type declarations TYPE Alinteger; A2 pointer to float; A3 pointer to integer; T1 structure (x: integer; } T2 structure (x: A1; next pointer to integer; } b float; } a :...
https://www.viddler.com/embed/82b62f65 Questions: How do companies decide where to locate their facilities? Why has just-in-time inventory control become a dominant production process used in the...
Adjusting Entries for Interest At December 31 of Year 1, Portland Corporation had two notes payable outstanding (notes 1 and 2). At December 31 of Year 2, Portland also had two notes payable...
We want to get an idea of the actual mass of 235U involved in powering a nuclear power plant. Assume that a single fission event releases 200 MeV of thermal energy. A 1,000 MWe electric power plant...
Why should a healthy company's rate of return on stockholders' equity exceed its rate of return on total assets?
Which internal control principle is especially diffi cult for small organizations to implement? Why?
Find the function $i(t)$ that satisfies the following differential equation and the initial condition: \[ 2000 \frac{d i(t)}{d t}+10 \mathrm{k} i(t)=0, i(0)=10 \mathrm{~mA} \]
Using your answer from Exercise 4-10, prepare a post-closing trial balance.
Bill's Roofing Services showed the following post-closing trial balance after the posting of the closing entries on June 30, 2014: Required 1. Identify the error(s) in the post-closing trial balance....
The March 31, 2014, adjusted trial balance for sopik Refrigeration Repairs is shown below with accounts in alphabetical order. 1 $5,000 of the long-term note payable is due during the year ended...
Yard Professionals Incorporated experienced the following events in Year 1, its first year of operation: Performed services for $31,000 cash. Purchased $7,800 of supplies on account. A physical count...
This question is from case # 24 of book Gapenski's Cases in Healthcare Finance, Sixth Edition Select five financial and five operating Key Performance Indicators (KPIs) to be presented at future...
assume that we have only two following risk assets (stock 1&2) in the market. stock 1 - E(r) = 20%, std 20% stock 2- E(r) = 10%, std 20% the correlation coefficient between stock 1 and 2 is 0. and...

A guitar manufacturer is considering eliminating its electric guitar division because its $ 76,000 expenses are higher

Question:

Avoldable Expenses Unavoldable Expenses Cost of goods sold. Direct expenses Indirect expenses Service department costs . . . … $56,000 9,250 470 6,000 $1,250 1.600 1.430

Step by Step Answer:

Avoidable Unavoidable Expenses Expenses Cost of goods sold ...View the full answer

Fundamental accounting principle

Students also viewed these Corporate Finance questions