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Nicklin Corporation is considering two alternatives, code-named M and N. Costs associated with the alternatives are listed below: Alternative Alternative 61,000 s 47,000 Supplies costs
Nicklin Corporation is considering two alternatives, code-named M and N. Costs associated with the alternatives are listed below: Alternative Alternative 61,000 s 47,000 Supplies costs Power costs $ Inspection 28,000 28,000 12,00022,000 costs Assembly costs $ S 21,000 12,000 Required: Which costs are relevant and which are not relevant in the choice between these two alternatives? a. Supplies costs Power costs Inspection costs Assembly costs Bed & Bath, a retailing company, has two deparments, Hardware and Linens. The company's most recent monthly contribution format income statement follows: Department Sales Variable expenses Total Hordware Linens 4,280,000$3,170,000 $1,110,000 1,302,000 897,000 405,000 Contribution margin Fixed expenses 2,978,000 2,273,000 705,000 2,360,000 1,460,000 900,000 Net operating income 618,000$ 813,000$(195,000) (loss) A study indicates that $374,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 16% decrease in the sales of the Hardware Department Required: If the Linens Department is dropped, what will be the effect on the net operating income of the company as a whole? in net operating income
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