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It says 1 and 2 are independent situations. Also, I think fixed cost remains same for the second part Below is a table that summarizes
It says "1 and 2 are independent situations". Also, I think fixed cost remains same for the second part
Below is a table that summarizes the net income of the Kouza Company for the current year. (You see total net income company-wide and to the right you see the income of each department.) Kouza has 4 departments in its facility. The fixed manufacturing cost is rent on the facility. The fixed selling and adminstrative cost is the salary of the sales manager for the company Total Dept. A Dept. B Dept. C Dept. D Sales 1,475,000 300,000 475,000 320,000 380,000 (98,000) 145,000) (267000 (30,000 (50.000 120,000) (67,000)] 168,000 (75,000) (22.000) 71,000 Variable manufacturing costs (543,000)0,000 130,000) iable sellin Contribution margin Fixed manufacturing costs Fixed selling and administrativ Net income 665,000 (225,000) (132,000) 308,000 100,000 (40,000) (25,000) 35,000 295,000 (80,000) (72,000) 143,000 102,000 (30,000) (13.000) 59,000 Questions 1 and 2 below are INDEPENDENT situations. 1. Assume sales double next year in every department. What will be the net income of Department A next year? 135000 2. Assume Kouza Company closes Department C at the beginning of next year. What will total net income be for Kouza (the whole company) next yearStep by Step Solution
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