Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Dear teachers, I calculated Requires C, but the answer was 22,800, not correct. Please teach me how to calculate it. Sincerely. ozto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&iaunchurahttps%253A%252F%252Furtumassonline.net%252Fwebapps%252Fportal2.. TAL MI Dinimal

Dear teachers,
I calculated Requires C, but the answer was 22,800, not correct. Please teach me how to calculate it. Sincerely. image text in transcribed
image text in transcribed
image text in transcribed
ozto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&iaunchurahttps%253A%252F%252Furtumassonline.net%252Fwebapps%252Fportal2.. TAL MI Dinimal Ford TERIM Marbuoto inom 22A Swed Help Save & Exit Submit Check my work 1 Exercise 22.7 (Static) Closing an Unprofitable Business Unit (LO22-1, LO22-2, LO22-3, LO22-5) Shown as follows is a segmented income statement for Drexel Hall during the current month. Sales Variable costs Contribution margin Traceable fixed costs: controllable Performance margin Traceable fixed costs: committed Store responsibility margin Common fixed costs Income from operations 40N Drexel Hall Dollars $1,800,000 100% 1.080,000 60 $ 720,000 432.000 24 $ 288,000 16% 180.000 10 $ 108,000 6% 36,000 2 $ 72,000 496 Store 1 Dollars S600,000 372,000 $228,000 120,000 $108,000 48,000 $ 60,000 Profit Centers Store 2 Dollars 96 $600,000 100% 378,000 63 $222.000 37% 102,000 17 $120,000 20% 66,000 11 $ 54,000 9% 100% 62 38% 20 1896 8 1096 Store 3 Dollars W $600,000 100% 330,000 SS $270,000 45 % 210,000 35 $ 60,000 10 9 66,000 11 $ (6,000) () All stores are similar in size, carry similar products, and operate in similar neighborhoods Store 1 was established first and was built at a lower cost than were Stores 2 and 3. This lower cost results in less depreciation expense for Store 1. Store 2 follows a policy of minimizing both costs and sales prices. Store 3 follows a policy of providing extensive customer service and charges slightly higher prices than the other two stores Top management of Drexel-Hall is considering closing Store 3. The three stores are close enough together that management estimates closing Store 3 would cause sales at Store 1 to increase by $60,000, and sales at Store 2 to increase by $120,000. Closing Store 3 is not expected to cause any change in common fixed costs Compute the increase or decrease that closing Store 3 should cause in a. Total monthly sales for Drexel-Hall stores. Prey 1 of 3 !!! Next > heducation.com/ext/map/index.html?_conacon&external_browser=0&launchUrl=http%253A%252F%252Fuml.umassonline.net%2b2Fwebapps%252 Toutsumi, L My UML, QTNine En for Student Microsoft Microsoolo In Linkedin Saved Help prices than the other two stores. Top management of Drexel-Hall is considering closing Store 3. The three stores are close enough together that management estimates closing Store 3 would cause sales at Store 1 to increase by $60,000, and sales at Store 2 to increase by $120,000. Closing Store 3 is not expected to cause any change in common fixed costs. Compute the increase or decrease that closing Store 3 should cause in a. Total monthly sales for Drexel-Hall stores. b. The monthly responsibility margin of Stores 1 and 2. c. The company's monthly income from operations, Complete this question by entering your answers in the tabs below. Required A Required B Required C The company's monthly income from operations. Expected increase in monthly operating income

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

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

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

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

Get Started

Students also viewed these Accounting questions