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1) Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Prepare a contribution format income statement segmented
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Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Prepare a contribution format income statement segmented by divisions. Division Total Company East Central West 0 0 0 S 0 0 S 0 0Req 1 Req 2A Req 23 The Marketing Department has proposed increasing the West Division's monthly advertising by $26,000 based on the belief that it would increase that division's sales by 15%. 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.) :I:| \fWingate 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 :5 1,525,999 Variable expenses 514,666 Contribution margin 1,616,466 Fixed expenses 1,111,666 Net operating income (loss) $ (166,666) 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 Central West Sales $ 365,666 $ 646,666 $ 526,666 Variable expenses as a percentage of sales 66% 21% 31% Traceable fixed expenses $ 252,666 $ 327,666 $ 263,666 Required: 1. Prepare a contribution format income statement segmented by divisions. Za. The Marketing Department has proposed increasing the West Division's monthly advertising by $26,000 based on the beliefthat it would increase that division's sales by 15%. Assuming these estimates are accurate, how much would the company's net operating income increase {decrease} if the proposal is implemented? 2b. Would you recommend the increased advertising? Req 1A Req 1B Req 2A Req 2B Determine the unit product cost. Assume that the company uses absorption costing. Unit product costReq 1A Req 1B Req 2A Req 2B Prepare an income statement for May. Assume that the company uses absorption costing. High Country, Incorporated Absorption Costing Income Statement 0 0Determine the unit product cost. Assume that the company uses variable costing. _:| Req 1A Req 1B Req 2A Req 2B Prepare a contribution format income statement for May. Assume that the company uses variable costing. High Country, Incorporated Variable Costing Income Statement 0 0 OHigh Country. Incorporated. produces and sells many recreational products. The company hasjust opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May. the first month ofthe plant's operation: Beginning inventory 6 Units produced 38,886 Units sold 33,886 Selling price per unit $ 84 Selling and administrative expenses: Variable per unit $ 3 Fixed (per month) $ 569,866 Manufacturing costs: Direct materials cost per unit $ 15 Direct labor cost per unit $ 7 Variable manufacturing overhead cost per unit $ 1 Fixed manufacturing overhead cost (per month) $ 722,866 Management is anxious to assess the profitability ofthe new camp cot during the month of May. Required: 1. Assume that the company uses absorption costing. a. Calculate the unit product cost. b. Prepare an income statement for May. 2. Assume that the company uses variable costing. a. Calculate the unit product cost. b. Prepare a contribution format income statement for May. Ba. Calculate the breakeven point in unit sales for each product using method 1. 3b. If the company sells exactly the breakeven quantity of each product, what will be the overall profit for the company using method 1? 4a. Calculate the breakeven point in unit sales for each product using method 2. 4b. If the company sells exactly the breakeven quantity of each product, what will be the overall profit for the company using method 2? 5. Which method should the company use to calculate each product's breakeven point in unit sales? Complete this question by entering your answers in the tabs below. Req l Req 2 Reg 3a and 3b Req 4a and 4b Req 5 Using data from the most recent period, prepare a contribution format segmented income statement. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3a and 3b Req 4a and 4b Req 5 What is the company's overall breakeven point in dollar sales? (Round your intermediate calculations to 4 decimal places and final answer to the nearest whole number.) :| Req 1 Req 2 Req 3a and 3b Req 4a and 4b Req 5 3a. Calculate the break-even point in unit sales for each product using method 1. (Do not round intermediate calculations and round your final answers to the nearest whole number.) 3b. If the company sells exactly the breakeven quantity of each product what will be the overall profit for the company using method 1? Show less A 3a. Velcro's Breakeven point in units _l 3a. Metal's Breakeven point in units _l 3a. Nylon's Breakeven point in units _ 3b. Overall profit (loss) _| Req 1 Req 2 Req 3a and 3b Req 4a and 4b Req 5 4a. Calculate the break-even point in unit sales for each product using method 2. 4b. If the company sells exactly the break-even quantity of each product what will be the overall profit for the company using method 2? 4a. Velcro's Break-even point in units 4a. Metal's Break-even point in nits 4a. Nylon's Break-even point in units 4b. Overall profit (loss)Req 1 Req 2 Req 3a and 3b Req 4a and 4b Req 5 Which method should the company use to calculate each product's break-even point in unit sales? OMethod 1 OMethod 2Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina. All three products are sold in highly competitive markets, so the company is unable to raise prices without losing an unacceptable number of customers. Data from the most recent period concerning these products appear below: Velcro Metal Nylon Annual sales volume 102, 800 205, 600 411, 200 Unit selling price $ 1.65 $ 1.50 $ 0.85 Variable expense per unit $ 1.25 $ 0.70 $ 0.25 Contribution margin per unit $ 0.40 $ 0.80 $ 0.60 Total fixed expenses are $411,200 per period. Of the total fixed expenses, $20,000 could be avoided if the Velcro product is dropped, $80,000 if the Metal product is dropped, and $60,000 if the Nylon product is dropped. The remaining fixed expenses of $251,200 consist of common fixed expenses such as administrative salaries and rent on the factory building that could be avoided only by going out of business entirely. The company's managers would like to compute the break-even point in dollar sales for the company as a whole, and the break-even point in unit sales for each product. They are considering two methods for computing each product's break-even point unit sales: Method #1: Include each product's traceable fixed costs and an allocated share of the common fixed costs in the numerator of each break-even calculation. The common fixed costs would be allocated to the three products using sales dollars as the allocation base. Method #2: Only include each product's traceable fixed costs in the numerator of each break-even calculation. Required: 1. Using data from the most recent period, prepare a contribution format segmented income statement. 2. What is the company's overall break-even point in dollar sales? 3a. Calculate the break-even point in unit sales for each product using method 1. 3b. If the company sells exactly the break-even quantity of each product, what will be the overall profit for the company using method 1? 4a. Calculate the break-even point in unit sales for each product using method 2. Ah If tho comnanu calle overtly the brooks avon quantity of each product what will ha the nuorall profit for the camnanu Icing mothAdStep by Step Solution
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