Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

last 5 years and Anderson is considering eliminating that division. Anderson's information about the two divisions is as follows: Book Division $ 8.000.000 Magazine Division

image text in transcribed
image text in transcribed
image text in transcribed
last 5 years and Anderson is considering eliminating that division. Anderson's information about the two divisions is as follows: Book Division $ 8.000.000 Magazine Division $ 3,384,600 Total $ 11,384,600 Sales Revenue Cost of Goods sold Variable costs Fixed costs Gross Profit Operating Expenses Variable Fixed Net Income 2,200,000 1,097,500 $ 4,702,500 1,096,700 1,251.500 $ 1,036,400 3,296,700 2,349,000 $ 5,738,900 155,000 2,936,000 $1,611,500 227,300 1,200,200 (391, 100) 382,300 4,136,200 $1,220,400 $ Only 20 percent of the fixed manufacturing costs and 60 percent of the fixed operating expenses are directly attribute to each division. The remainder are comnion or shared between the two divisions. Required: 1. Present the financial information in the form of a segmented income statement (using the contribution margin approach), 2. What will be the impact on net income if the Magazine Division is eliminated? Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Present the financial Information in the form of a segmented income statement (using the contribution margin approach). Book Division Magazine Division $ 3,384,600 Sales revenue Total $ 11,384,600 $ 8,000,000 Variable costs Cost of goods sold Operating expenses (2,200,000) (155,000) (1,096,700) (227,300) (3,296,700) (382,300) 5,645,000 2,060,600 7,705,600 Contribution margin Direct fixed costs Manufacturing costs Operating expenses (219,500) (1,761,600) (250.300) (720,120) (469,800) (2,481,720) 3,663,900 1,090,180 4,754,080 Segment margin Common fixed costs Manufacturing costs Operating expenses (2,818,800) 1,654,480 Net income (loss) $ 280,800 Required Required 2 > percent of the fixed manufacturing costs and 60 percent of the fixed operating expenses are directly attribute to each division. The remainder are common or shared between the two divisions. Required: 1. Present the financial information in the form of a segmented income statement (using the contribution margin approach). 2. What will be the impact on net income if the Magazine Division is eliminated? Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 What will be the impact on net income if the Magazine Division is eliminated? Impact on net income increase

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Recommended Textbook for

Accounting The Ultimate Guide To Accounting For Beginners

Authors: Greg Shields

1st Edition

1546332820, 978-1546332824

More Books

Students also viewed these Accounting questions

Question

Show enthusiasm for the position (but not too much).

Answered: 1 week ago