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Can you solve these two accounting questions? Excel working paper attached. HORNGREN'S ACCOUNTING - Tenth Edition E24-22 One subunit of Mountain Sorts Commpany had the

Can you solve these two accounting questions? Excel working paper attached.

image text in transcribed HORNGREN'S ACCOUNTING - Tenth Edition E24-22 One subunit of Mountain Sorts Commpany had the following financial results last month: Mountain - Subunit X Direct Materials Direct Labor Indirect Labor Utilities Depreciation Repairs and Maintenance Total Actual $28,500 $13,400 $26,200 $12,100 $26,000 $4,000 $110,200 Flexible Flexible Budget Budget Variance (F or U) $26,400 $14,100 $22,700 $11,100 $26,000 $4,900 $105,200 % Variance (F or U) Requirements Complete the performance evaluation report for this subunit. Enter 1. the variance percent as a percentage rounded to two decimal places. 2. Based on the data presented, what type of responsibility center is this subunit? Which items should be investigated if part of management's 3. decision criteria is to investigate all variances exceeding $2,500 or 10%? 4. Should only unfavorable variances be investigated? Explain. Solution: Requirement 1 MountainSubunit X Actual Flexible Budget Flexible Budget Variance (F or U) % Variance (F or U) Requirement 2 Requirement 3 Requirement 4 Chapter 24: Cost Allocation And Responsibility Accounting Page 1 of 2 HORNGREN'S ACCOUNTING - Tenth Edition E25-13 Top Managers of Movie Street are alarmed by their operating losses. They are considering dropping the DVD product ine. Company accountants have prepared the following analysis to help make this decision: Sales Revenue Variable Costs Contribution Margin Fixed Costs: Manufacturing Selling and Admin Total Fixed Expenses Operating Income (Loss) Total $432,000 $246,000 $186,000 $128,000 $67,000 $195,000 ($9,000) Blu-Ray Discs $305,000 $150,000 $155,000 $71,000 $52,000 $123,000 $32,000 DVD Discs $127,000 $96,000 $31,000 $57,000 $15,000 $72,000 ($41,000) Total fixed costs will not change if the company stops selling DVDs. Requirements 1. Prepare a differential analysis to show whether Movie Street should drop the DVD product line. 2. Will dropping DVDs add $41,000 to operating income? Explain. Solution: Requirement 1 Requirement 2 Chapter 25: Short-Term Business Decisions Page 2 of 2

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