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Franklin Manufacturing Co. produces and sells specialized equipment used in the petroleum Industry. The company's organized into three separate operating branches: D on A, which
Franklin Manufacturing Co. produces and sells specialized equipment used in the petroleum Industry. The company's organized into three separate operating branches: D on A, which manufactures and sells heavy equipment Division B. which manufactures and sells hand tools and Dyson C, which makes and sells electric motors. Each d visions housed in a separate manufacturing facity. Company headquarters is located in a separate building. In recent years, DV Son Bhas been operating at a net loss and is expected to continue to do so. Income statements for the three divisions for 2017 to ow. Division $1,200,000 Division c $4,300,000 768,000) (2,580,000) 320,000) 112,000 (600,000) 1,120,000 Division $4,000,000 Less: Cost of goods sold Unit-level manufacturing (2,500,000) coats Rent on manufacturing (510,000) faclity Cross margin 990,000 Less Operating expenses Unit-level selling and admin. (191,000) expenses Division-level fixed selling and admin. expenses (320,000) Headquarters facility-level (170,000) costa Net Income (los) $ 309,000 (53,880) (241,000) (72,000) (170,000) (317,000) (170,000) $ (183,880) $ 392,000 Required 8-1. Based on the preceding information, recommend whether to eliminate Division B. 3-2. Prepare companywide income statements before and after eliminating Division B. b. During 2017, Division B produced and sold 24,000 units of hand tools. Calculate the contribution to profit if sales and production increase to 33 000 units in 2018? c. Suppose that Solomon could sublease Division B's manufacturing facility for $450,000. Assuming that Division B currently has a production and sales volume of 33.000 units, determine whether Solomon should accept the opportunity to sublease the facility or continue production at Division B. Complete this question by entering your answers in the tabs below. Required Required Required Required A1 Based on the preceding information, recommend whether to eliminate Division B. (Negative amounts should be indicated by a minus sign.) Contributon to profit loss) Should Division B be eliminated vould lion to profie Required A1 Required A2 > Franklin Manufacturing Co. produces and sells specialized equipment used in the petroleum Industry. The company's organized into three separate operating branches: D o n A, which manufactures and sells heavy equipment Division B. which manufactures and sel s hand tools and Division C, which makes and se s electric motors. Each dvisions housed in a separate manufacturing facility. Company headquarters is located in a separate bu dingin recent years DVsion B has been operating at a net loss and is expected to continue to do so. Income statements for the three divisions for 2017 to low. Division $1,200,000 Division C $4,300,000 768,000) (2,580,000) Division $4,000,000 LOSS Coat of goods sold Unit-level manufacturing (2,500,000) coats Rent on manufacturing 510,000) facility Gross margin 990,000 Less Operating expenses Unit-level selling and admin. (191,000) expenses Division-level fixed selling and admin. expenses (320,000) Headquarters facility-level (170,000) coats Net Income (los) $ 309,000 320,000) 112,000 600,000) 1,120,000 (53,880) 241,000) (72,000) (170,000) 183,880) $ (317,000) 170,000) 392,000 $ Required a-1. Based on the preceding Information, recommend whether to eliminate Division B. a-2. Prepare companywide Income statements before and after ellminating Division B. b. During 2017, Division B produced and sold 24,000 units of hand tools. Calculate the contribution to profit if sales and production increase to 33 000 units in 2018? c. Suppose that Solomon could sublease Division B's manufacturing facility for $450,000. Assuming that Division B currently has a production and sales volume of 33.000 units, determine whether Solomon should accept the opportunity to sublease the facility or continue production at Division B. Complete this question by entering your answers in the tabs below. Required Required Required Required A2 Prepare companywide income statements before and after eliminating Division B. Keep Eliminate Companywide Income Statements Division Division Sales Less: Cost of goods sold Unit-level manufacturing costs Rent on manufacturing facility Gross margin Less: Operating expenses Unit-level seng and admin. expenses Division-level foxed seng and admin. expenses Headquarters facility-level costs Net Income (loss) Required A1 Required B > Franklin Manufacturing Co. produces and ses soecized equipment used in the petroleum industry. The company's Organized into three separate operating branches Dision A, which manufactures and se s heaw equipment Dyson B, which manufactures and ses hand tools, and Division C, which makes and se s electric motors. Each vsions housed in a separate manufacturing facility. Company headquarters is located in a separate bu dingin recent years DVsion has been operating at a net loss and is expected to continue to do so. Income statements for the three divisions for 2017 to low Division B $1,200,000 Division $4,300,000 768,000) (2,580,000) 320,000) 112,000 600,000) 1,120,000 Division $ 4,000,000 Lost Coat of goods sold Unit-level manufacturing (2,500,000) coats Rent on manufacturing (510,000) facility Gross margin 990,000 LOSS: Operating expenses Unit-level selling and admin. (191,000) expenses Division-level fixed selling and admin. expenses (320,000) Headquarters facility-level (170,000) coata Net Income (los) $ 309,000 (53,880) 241,000) (72,000) (170,000) $1183,880) $ (317,000) (170,000) 392,000 Required a-1. Based on the preceding Information, recommend whether to eliminate Division B. a-2. Prepare companywide Income statements before and after ellminating Division B. b. During 2017, Division B produced and sold 24.000 units of hand tools. Calculate the contribution to profit if sales and production increase to 33.000 units in 2018? c. Suppose that Solomon could sublease Division B's manufacturing facility for $450,000. Assuming that Division B currently has a production and sales volume of 33,000 units, determine whether Solomon should accept the opportunity to sublease the facility or continue production at Division B. Complete this question by entering your answers in the tabs below. Required Required Required Required A1 A2 B During 2017, Division B produced and sold 24,000 units of hand tools. Calculate the contribution to profit if sales and production increase to 33,000 units in 2018? (Do not round intermediate calculations.) Show less Contribution to profit (los) Should Division B be eliminated? Franklin Manufacturing Co. produces and sells specialized equipment used in the petroleum Industry. The company's organized into three separate operating branches: Dision A which manufactures and ses heaw equipment Division B. which manufactures and sel s hand tools and DVsion C, which makes and se s electric motors. Each d visions housed in a separate manufacturing facility. Company headquarters is located in a separate building. In recent years, DVOB has been operating at a net loss and is expected to continue to do so. Income statements for the three divisions for 2017 to low. Division B $1,200,000 Division $ 4,300,000 768,000) 1320,000) 112,000 (2,580,000) 600,000) 1,120,000 Division $ 4,000,000 Loss Coat of goods sold Unit-level manufacturing (2,500,000) costa Rent on manufacturing (510,000) faellty Gross margin 990,000 LOSS! Operating expenses Unit-level selling and admin. (191,000) expenses Division-level fixed selling and admin. expenses (320,000) Headquarters facility-level (170,000) conta Net Income (OS) $ 309,000 (53,880) (241,000) (72,000) (170,000) $183,880) (317,000) (170,000) 392,000 $ Required 3-1. Based on the preceding Information, recommend whether to eliminate Division B. 3-2. Prepare companywide income statements before and after eliminating Division B. b. During 2017, Division B produced and sold 24.000 units of hand tools. Calculate the contribution to profit if sales and production Increase to 33 000 units in 2018? c. Suppose that Solomon could sublease Division B's manufacturing facility for $460,000. Assuming that Division B currently has a production and sales volume of 33.000 units, determine whether Solomon should accept the opportunity to sublease the facility or continue production at Division B. Complete this question by entering your answers in the tabs below. Required Required Required Required 1 2 Suppose that Franklin could sublease Division B's manufacturing facility for $460,000, at a production and sales volume of 33,000 units. Calculate the contribution to profit of Division B. (Negative amounts should be indicated by a minus sign.) Show less Contribution to profit loss) Should Division B be eliminated? (Required B Required
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