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please provide answers in the form they are asked for in the question. thanks! MMV Incorporated opened a chain of businesses several years ago that
please provide answers in the form they are asked for in the question. thanks!
MMV Incorporated opened a chain of businesses several years ago that provide quick oll changes and other minor services in conjunction with a convenience operation consisting of a soup, sandwich, and snack bar. The strategy was that as customers brought autos in for oil changes, they would likely use the convenience operation to purchase a sandwich, bowl of soup, beverege, or some. other snack while they were waiting for the work to be completed on their autos. The oil change operation occupies 80% of the facility and includes three service bays. The soup, sandwich, and snack bar occupies the remaining 20%. A general manager is responsibie for the entire operation, but each segment also has a manager responsible for its individual operation. Recently, the following annual operating information for the soup, sandwich, and snack bar at one of MMV's locations caught the general manager's attention. Sales for the year were $330,000, and cost of sales (food, beverages, and snack items) are 50% of sales revenue Operating expense information for the convenience operation follows: While investigating these operating expenses, MMV incorporated determines the following: - Utilies are allocated to each segment based on square footage, however, 50xof the amount allocated to the soup, sandwich, and snack bat results from operating the food equipment. - The general manager's salary is allocated between the segments based on estimated time spent with each operation, it is determined that 15% of the general manager's time is spent with the convenience operation. - Advertising is allocoted to each segment equally but could be feduced by $4,600 if MMV decided to advertise only the auto services. - Insurance is allocated to each segment based on square footage, but only 20% of the amount allocated to the soup, sandwich, and snack bar results directly from its operation. - Property taxes and buliding depreciotion ore allocoted to each segment based on square footage. Required: a. From the preceding information, calculate the operating income or loss from the soup, sandwich, and snack bar operation that has cought the general manager's attention. b. Identify whether each of these operating expenses is relevant to the decislon of ciscontinulng the soup, sandwich, and snack bar operation, if relevant, provide the relevant values. c. If MMV discontinues the soup, sandwich, and snack bar operation, how much wil operating income increase or decrease for this location? d. Should MMV continue or discontinue the soup, sandwich, and snack bar operation at thls location? Cctiplete this question by entering your answers in the tabs below. From the preceding information, calculate the operating income or loss from the 5oup, sandwich, and snack bar operation that has caught the general manager's attention. Complete this question by entering your answers in the tabs below. Identify whether each of these operating expenses is relevant to the decision of discontinuing the soup, sandwich, and snack bar operation, if relevant, provide the relevant values. 8 Answer is not complete. Complete this question by entering your answers in the tabs below. c. If MMV descontinues the soup, sandwich, and snack bar operation, how much will operating income increase or decrease for this location? d. Should MMV continue or discontinue the soup, sandwich, and snack bar operation at this location Step by Step Solution
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