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I am needing assistance with the following. Please advise. 7. Thornton Transport Company divides its operations into four divisions. A recent income statement for its
I am needing assistance with the following. Please advise.
7.
Thornton Transport Company divides its operations into four divisions. A recent income statement for its West Division follows, THORNTON TRANSPORT COMPANY West Division Income Statement for Year 3 Revenue S 650,333 Salaries for drivers (513,333) Fuel expenses (65,033) Insurance (86,333) Divisionlevel facilitysustaining costs (55,033) Companywide facility-sustaining costs (146,333) Net 1055 $ (284,399) Required a. By how much would companywide income increase or decrease if West Division is eliminated? Should West Division be eliminated? b. Assume that West Division is able to increase its revenue to $750,000 by raising its prices. Determine the amount of the contribution to profit by West Division. Should West Division be eliminated if revenue is $750,000? c. What is the minimum amount of revenue required tojustify continuing the operation of West Division? Required A Required 5 Required C By how much would companywide income increase or decrease if West Division is eliminated? Should West Division be eliminated? Should West Division be eliminated? - Required A Required B Required C Assume that West Division is able to increase its revenue to $750,000 by raising its prices. Determine the amount of the contribution to profit by West Division. Should West Division be eliminated if revenue is $750,000? Income would by Should West Division be eliminated?Required A Required B Required C What is the minimum amount of revenue required to justify continuing the operation of West Division? Minimum amount of revenueFanning Corporation is considering the elimination of one of its segments. The segment incurs the following xed costs. If the segment is eliminated, the building it uses will be sold. Advertising expense 3 94,663 Supervisory salaries 172,066 Allocation of companywide facility-level costs SBJBBB Historical cost of building 124,863 Book value of building 61,668 Market value of building 92396 Maintenance costs on equipment 75,883 Real estate taxes on building 7,668 Required Based on this information, determine the amount of avoidable cost associated with the segment. :I Tesla management are trying to decide whether to keep an older piece of machinery or buy a replacement. Management was presented with the following information to assist in their decision: - The old machine was purchased three years ago for $313,000 and has a current book value using straight-line depreciation of $194,000. - The old machine incurs operating expenses of $39,000 per year. a The current disposal value ofthe old machine is $77,000; if it is kept nine more years, its remaining value would be $10,000. . The replacement machine would cost $235,000 and have a useful life of nine years. - The replacement machine has an expected salvage value of $67,000 after nine years. - The replacement machine would require $10,000 per year in operating expenses. Required Calculate the total costs in keeping the old machine and purchase a new machine. Should the old machine be replaced? Total costs Should the old machine be replaced? Sweet Taste has the capacity to produce either 41.000 corncob pipes or 19,000 cornhusk dolls per year. The pipes cost $4.00 each to produce and sell for $9.50 each. The dolls sell for $12.00 each and cost $5.00 to produce. Required Calculate the contribution margin per unit and the total contribution margin for Pipes and Dolls. Assuming that Sweet Taste can sell all it produces of either product, shcuuld it produce the corncob pipes or the cornhusk dolls? Note: Round "Contribution margin per unit" answers to 2 decimal places. |Contribution margin per unit ITotal contribution margin [Should it produce the corncob pipes or the oomhusk dollsStep by Step Solution
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