Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please help with requirements 1-3 Homework: Ch 8 HW 3 of 6 (0 complete) Score: 0 of 2 pts E8-25A (similar to) Top managers of
please help with requirements 1-3
Homework: Ch 8 HW 3 of 6 (0 complete) Score: 0 of 2 pts E8-25A (similar to) Top managers of Carolina Flooring are alarmed by their operating losses. They are considering dropping the laminate floc decision: (Click the icon to view the analysis.) Total fixed costs will not change if the company stops selling laminate flooring. Read the requirements. Requirement 1. Prepare an incremental analysis to show whether Carolina Flooring should discontinue the laminate floori (Enter a "O" in an input field if there is no expected change as a result of discontinuing the laminate flooring product in this Total i Requirements Incremental Analysis for Discontinuation Decision Contribution margin lost if laminate flooring product line is dropped Less: Fixed cost savings if laminate flooring product line is dropped Operating income if laminate flooring is dropped 1. Prepare an incrementa product line. Will disco 2. Assume that the comp. product line (these cos analysis to show wheth 3. Now, assume that all of avoided if the company sales would be adverse the same supplier). Woc Choose from any list or enter any number in the input fields and then click Check Answer 6 parts Clear All remaining Save HW Score: 0%, 0 of 14 pts 3 of 6 (0 complete) Question Help They are considering dropping the laminate flooring product line. Company accountants have prepared the following analysis to help make this Bring na Flooring should discontinue the laminate flooring product line. Will discontinuing laminate flooring add $27,000 to operating income? Explain discontinuing the laminate flooring product in this scenario.) Total Requirements 1. Prepare an incremental analysis to show whether Carolina Flooring should discontinue the laminate flooring product line. Will discontinuing laminate flooring add $27,000 to operating income? Explain 2. Assume that the company can avoid $30,000 of fixed expenses by discontinuing the laminate flooring product line (these costs are direct fixed costs of the laminate flooring product lino). Prepare an incremental analysis to show whether the company should stop selling laminate flooring 3. Now, assume that all of the fixed costs assigned to laminate flooring are direct fixed costs and can be avoided if the company stops selling laminate flooring. However, marketing has concluded that wood flooring sales would be adversely affected by discontinuing the laminate flooring line (retailers want to buy both from the same supplier). Wood flooring production and sales would decline 10%. What should the company do? Print Done en click Check Answer Clear Al Check Answer Gabriela Alexis RO 3 of 6 (0 complete) have prepared the Data Table ps D B Ite flooring add to sli cha aation uct lin duct lid minate 1 Carolina Flooring 2 Product Line Contribution Margin Income Statement 3 For the Year 4 Product lines Laminate 5 Wood flooring flooring Company Total 6 Sales revenue $ 303,000 $ 124,000 $ 427,000 7 Less: Variable expenses 156,000 80,000 236,000 8 Contribution margin $ 147,000 $ 44,000 $ 191,000 9 Less fixed expenses: 10 Manufacturing 73,000 62,000 135,000 51 Marketing and administrative 56,000 9,000 65.000 12 Operating income (loss) $ 18,000 $ (27,000) $ (9,000) Print Done in the ing Clear All Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started