Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

can you show me all calculation Exercise 6-26 The firm has two offices one in Chicago and one in Minneapolis. The firm classifies the direct

can you show me all calculation image text in transcribed
image text in transcribed
Exercise 6-26 The firm has two offices one in Chicago and one in Minneapolis. The firm classifies the direct costs of commulting jobs as well contribution format segmented income statement for the company's most recent year is een O Office 3. Office Total Company Chicago Minneapolis Total Company Chicago Minneapolis Rev. $450,000 100% $150,000 100% $300,000 100% VC 225.000 50% 45,000 30% 180,000 60% CM 225,000 50% 105,000 70% 120,000 40% TFC 126.000 28% 78.000 52% 48,000 16% SM 99,000 22% $27,000 18% $72,000 24% CFC_63.000 14% NOI $36,000 8% 3. Refer to the original data. Assume that sales in Chicago increase by $50,000 next year and that sales in Minneapolis remain unchanged. Assume no change in fixed costs. a) Prepare a new segmented income statement for the company using the above format. Show both amounts and percentages. b) Observe from the income statement you have prepared that the contribution margin ratio for Chicago has remained unchanged at 70% (the same as in the above data) but that the segment margin ratio has changed. How do you explain the change in the segment margin ratio? Increase sales in the Dental market by S35.000. Assume that Minneapolis sales by major market are month The campaign would cost $5.000. Marketing studies indicate that such a campaign would increase sales in the Medical market by 540.000 or Bee 6.17 The company would like to initiate an intensive advertising campaign in one of the two Minneapolis market sements during the next Market Minneapolis Medical Dental Sales $300,000 100% $200,000 100% $100,000 100% (180,000) 60% (128,000) 64% (52.000) 52% CM 120,000 40% 72,000 36% 48,000 48% TFC (33.000) 11% (12.000) 6% (21,000) 21% SM $87,000 29% $60,000 30% $27,000 27% CFC (15,000) 5% Office SM $72,000 24% VC 1. How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Medical Market? 2. How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Dental Market? 3. In which of the markets would you recommend that the company focus its advertising campaign? 4. In Exercise 6-16, Minneapolis shows $48,000 in traceable fixed expenses. What happened to the $48,000 in this exercise

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introductory Accounting A Measurement Approach For Managers

Authors: Daniel P. Tinkelman

1st Edition

9781138956216

More Books

Students also viewed these Accounting questions

Question

Explain all drawbacks of application procedure.

Answered: 1 week ago