part d

Current Attempt in Progress A value-driven car manufacturer, Waterway, started its business more than 50 years ago, making and selling a sedan body style. Sedans were popular at the time, and this one drove the success of Waterway for years due to its practical yet stylish nature. As times changed, Waterway designed models in different body styles, and those models have outpaced sedans, as follows. The income statements above reflect the second consecutive year the sedan category has lost money. Waterway is concerned about dropping this vehicle, however, since the company's success was originally built on it. (a) Your answer is correct. Waterway believes it can save $612,000 in fixed costs associated with the sedans if it drops that vehicle category. Should the company seriously consider dropping it? How much better or worse off, financially, would it be by dropping the sedan? Waterway would be by $ Your answer is correct. Assume that 75% of the fixed costs shown in the original information, for all product lines, are direct fixed costs. The remaining fixed costs are common fixed costs, allocated to the product lines according to their sales volumes. Recast the product-line income statements detailing the direct and allocated fixed costs for each, including a subtotal for segment margin and an overall total column. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) (d1) Based on your analysis for part (c), what will happen to the allocated costs if Waterway drops the sedans? Recast product-line income statements, including a subtotal for segment margin and an overall total column, if Waterway drops the sedan line. Assume Sales (and sales volumes) for the three remaining divisions remains the same as presented. (Round proportions to 4 decimal places, e.g. 0.2513 and final answers to 2 decimal places, e.g. 5,125.76.) (d2) What happens to overall operating income? (Round proportions to 4 decimal places, e.g. 0.2513 and final answers to 2 decimal places, e.g. 5,125.76.) (d3) Are any of the other vehicle lines now in jeopardy of losing money? eTextbook and Media Current Attempt in Progress A value-driven car manufacturer, Waterway, started its business more than 50 years ago, making and selling a sedan body style. Sedans were popular at the time, and this one drove the success of Waterway for years due to its practical yet stylish nature. As times changed, Waterway designed models in different body styles, and those models have outpaced sedans, as follows. The income statements above reflect the second consecutive year the sedan category has lost money. Waterway is concerned about dropping this vehicle, however, since the company's success was originally built on it. (a) Your answer is correct. Waterway believes it can save $612,000 in fixed costs associated with the sedans if it drops that vehicle category. Should the company seriously consider dropping it? How much better or worse off, financially, would it be by dropping the sedan? Waterway would be by $ Your answer is correct. Assume that 75% of the fixed costs shown in the original information, for all product lines, are direct fixed costs. The remaining fixed costs are common fixed costs, allocated to the product lines according to their sales volumes. Recast the product-line income statements detailing the direct and allocated fixed costs for each, including a subtotal for segment margin and an overall total column. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) (d1) Based on your analysis for part (c), what will happen to the allocated costs if Waterway drops the sedans? Recast product-line income statements, including a subtotal for segment margin and an overall total column, if Waterway drops the sedan line. Assume Sales (and sales volumes) for the three remaining divisions remains the same as presented. (Round proportions to 4 decimal places, e.g. 0.2513 and final answers to 2 decimal places, e.g. 5,125.76.) (d2) What happens to overall operating income? (Round proportions to 4 decimal places, e.g. 0.2513 and final answers to 2 decimal places, e.g. 5,125.76.) (d3) Are any of the other vehicle lines now in jeopardy of losing money? eTextbook and Media