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please help me with this question and also please explain part B and D as well. thanks in advance. d. Why might some mannagers prefer
please help me with this question and also please explain part B and D as well. thanks in advance.
d. Why might some mannagers prefer the 31. Product Line Declsion, The following segmented annual income statement is for Hathaway Manufacturing, Inc. Product Lines Total Supplies Computers Furniture $1,500,000 825,000 $ 675,000 480,000 $375,000 150,000 $225,000 105,000 37 500 $ 82,500 Sales revenue $1,125,000 480,000 s 645,000 650,000 $3,000,000 1455,000 $1.545,000 1,235,000 300,000 $ 10,000 Variable costs Contribution margin Direct foxed costs Allocated fixed costs 112,500 $(117,500) 150,000 45,000 Profit (loss) Management is concerned about the significant losses associated with the computers product line and would like to drop this product line. Allocated fixed costs are assigned to product lines based on sales. If the computers product line is eliminated, total allocated fixed costs are assigned to the remaining product lines, and all variable and direct fixed costs for the computers product line will be eliminated Required: a. Perform differential analysis using the format presented in Figure 7.6. Assume keeping all product lines is Alternative 1, and dropping the computers product line is Altemative 2. b. Which alternative is best? Explain. C. Summarize the result of dropping the computer product line using the format presented in Figure 7.7 Shot on OnePlusto the profitability of the furniture product line as a result of dropping the line Pawered by Dual Camera 22 Customer Decicion The folla Review Page Layout Formulas Dala Draw Home insert X A A Wiap Text Arial 11 6 1Merge & C Font Alignment ard X H G K D Product Line Decision Alternative 1 (Keep all product lines) Product Lines Furniture Supplies Total Computers Sales revense 1,455,000 Variable costs Contribation margin Direct fixed costs Allocated fixed costs Profit (loss) Alternative 2 (Drop computers product line) Product Lines Furniture Supplies Total Sales revenue Variable costs Contribution margin 585,000 Direct fixed costs Allocated fixed costs Profit (loss) Differential Aualysis (Keep all product lines) Computers) Alternative 1 Alternative 2 Differential (Drop Alternaive 1 Shot on OnePlus Total Amount Powered by Dual Camera Profit (om) Differential Analyzis (Keep all product lines) Computers) Alternative 1 Alternative 2 Drop Alternative 1 Differential Amount is: Total Total Sales revenue Variable costs Contribution margin Direct fixed costs Allocated fixed costs 5,000) (S Profit (loss) Lower Shot on OnePlus Pawered by Dual Camera 11 EXERCISES: Set A (continued) 31. Product Line Decision (continued) Resalt of Dropping Computers Product Line ($1,125,000) Sales revenne lost d. Shot on OnePlus Pawered by Dual Cmer Exer Exercise Set A 32 Fxercise Set A 31 cont. Exercice Set A 31Step by Step Solution
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