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Segmented Income Statement, Management Decision MakingFunTime Company produces three lines of greeting cards: scented, musical, and regular. Segmented income statements for the past year are
Segmented Income Statement, Management Decision MakingFunTime Company produces three lines of greeting cards: scented, musical, and regular. Segmented income statements for the past year are as follows: ScentedMusicalRegularTotalSales$ $$$Less: Variable expensesContribution margin$ $ $$Less: Direct fixed expensesSegment margin$ $ $ $ Less: Common fixed expenses Operating income loss $Kathy Bunker, president of FunTime, is concerned about the financial performance of her firm and is seriously considering dropping both the scented and musical product lines. However, before making a final decision, she consults Jim Dorn, FunTimes vice president of marketing.Required:Question Content Area Jim believes that by increasing advertising by $$ for the scented line and $ for the musical line sales of those two lines would increase by Prepare segmented income statements based on Jim's assumptions. Note: Enter all amounts as positive numbers except subtotals, if applicable.FunTimeSegmented Income StatementblankScentedMusicalRegularTotalblankSales$fill in the blank cbffd$fill in the blank cbffd$fill in the blank cbffd$fill in the blank cbffdblankLess: Variable expensesfill in the blank cbffdfill in the blank cbffdfill in the blank cbffdfill in the blank cbffdblankContribution margin$fill in the blank cbffd$fill in the blank cbffd$fill in the blank cbffd$fill in the blank cbffdblankLess: Direct fixed expensesfill in the blank cbffdfill in the blank cbffdfill in the blank cbffdfill in the blank cbffdblankSegment margin$fill in the blank cbffd$fill in the blank cbffd$fill in the blank cbffd$fill in the blank cbffdblankLess: Common fixed expensesblankblankblankfill in the blank cbffdblankOperating income lossblankblankblank$fill in the blank cbffdblankQuestion Content AreaIf you were Kathy, how would you react to this information?Kathy should this proposal. The sales increase, coupled with the increased advertising, the loss. Both scented and musical productline profits increase. However, more must be done. If the scented and musical product margins remain negative, the two products may need to be dropped.Question Content Area Jim warns Kathy that eliminating the scented and musical lines would lower the sales of the regular line by Prepare an income statement for Fun Time assuming the Scented and Musical greeting card lines are dropped. Note: Enter all amounts as positive numbers except subtotals, if applicable.FunTimeIncome StatementRegular Greeting Cards onlySales$fill in the blank dbafcaLess: Variable expensesfill in the blank dbafcaContribution margin$fill in the blank dbafcaLess: Fixed expensesfill in the blank dbafcaOperating income loss$fill in the blank dbafcaQuestion Content AreaGiven this information, would it be profitable to eliminate the scented and musical lines?While dropping the two lines results in of $fill in the blank ebaaf it is than the alternative offered in Requirement Question Content Area Suppose that eliminating either line reduces sales of the regular cards by Would a combination of increased advertising the option described in Requirement and eliminating one of the lines be beneficial? Prepare segmented income statements assuming the Musical line is dropped and advertising is increased. Note: Enter all amounts as positive numbers except subtotals, if applicable.FunTimeSegmented Income StatementblankScentedRegularTotalSales$fill in the blank bdafff$fill in the blank bdafff$fill in the blank bdafffLess: Variable expensesfill in the blank bdaffffill in the blank bdaffffill in the blank bdafffContribution margin$fill in the blank bdafff$fill in the blank bdafff$fill in the blank bdafffLess: Direct fixed expensesfill in the blank bdaffffill in the blank bdaffffill in the blank bdafffSegment margin$fill in the blank bdafff$fill in the blank bdafff$fill in the blank bdafffLess: Common fixed expensesblankblankfill in the blank bdafffOperating income lossblankblank$fill in the blank bdafffQuestion Content AreaBased on your calculations above, identify the best combination for the firm.
Segmented Income Statement, Management Decision MakingFunTime Company produces three lines of greeting cards: scented, musical, and regular. Segmented income statements for the past year are as follows: ScentedMusicalRegularTotalSales$ $$$Less: Variable expensesContribution margin$ $ $$Less: Direct fixed expensesSegment margin$ $ $ $ Less: Common fixed expenses Operating income loss $Kathy Bunker, president of FunTime, is concerned about the financial performance of her firm and is seriously considering dropping both the scented and musical product lines. However, before making a final decision, she consults Jim Dorn, FunTimes vice president of marketing.Required:Question Content Area Jim believes that by increasing advertising by $$ for the scented line and $ for the musical line sales of those two lines would increase by Prepare segmented income statements based on Jim's assumptions. Note: Enter all amounts as positive numbers except subtotals, if applicable.FunTimeSegmented Income StatementblankScentedMusicalRegularTotalblankSales$fill in the blank cbffd$fill in the blank cbffd$fill in the blank cbffd$fill in the blank cbffdblankLess: Variable expensesfill in the blank cbffdfill in the blank cbffdfill in the blank cbffdfill in the blank cbffdblankContribution margin$fill in the blank cbffd$fill in the blank cbffd$fill in the blank cbffd$fill in the blank cbffdblankLess: Direct fixed expensesfill in the blank cbffdfill in the blank cbffdfill in the blank cbffdfill in the blank cbffdblankSegment margin$fill in the blank cbffd$fill in the blank cbffd$fill in the blank cbffd$fill in the blank cbffdblankLess: Common fixed expensesblankblankblankfill in the blank cbffdblankOperating income lossblankblankblank$fill in the blank cbffdblankQuestion Content AreaIf you were Kathy, how would you react to this information?Kathy should this proposal. The sales increase, coupled with the increased advertising, the loss. Both scented and musical productline profits increase. However, more must be done. If the scented and musical product margins remain negative, the two products may need to be dropped.Question Content Area Jim warns Kathy that eliminating the scented and musical lines would lower the sales of the regular line by Prepare an income statement for Fun Time assuming the Scented and Musical greeting card lines are dropped. Note: Enter all amounts as positive numbers except subtotals, if applicable.FunTimeIncome StatementRegular Greeting Cards onlySales$fill in the blank dbafcaLess: Variable expensesfill in the blank dbafcaContribution margin$fill in the blank dbafcaLess: Fixed expensesfill in the blank dbafcaOperating income loss$fill in the blank dbafcaQuestion Content AreaGiven this information, would it be profitable to eliminate the scented and musical lines?While dropping the two lines results in of $fill in the blank ebaaf it is than the alternative offered in Requirement Question Content Area Suppose that eliminating either line reduces sales of the regular cards by Would a combination of increased advertising the option described in Requirement and eliminating one of the lines be beneficial? Prepare segmented income statements assuming the Musical line is dropped and advertising is increased. Note: Enter all amounts as positive numbers except subtotals, if applicable.FunTimeSegmented Income StatementblankScentedRegularTotalSales$fill in the blank bdafff$fill in the blank bdafff$fill in the blank bdafffLess: Variable expensesfill in the blank bdaffffill in the blank bdaffffill in the blank bdafffContribution margin$fill in the blank bdafff$fill in the blank bdafff$fill in the blank bdafffLess: Direct fixed expensesfill in the blank bdaffffill in the blank bdaffffill in the blank bdafffSegment margin$fill in the blank bdafff$fill in the blank bdafff$fill in the blank bdafffLess: Common fixed expensesblankblankfill in the blank bdafffOperating income lossblankblank$fill in the blank bdafffQuestion Content AreaBased on your calculations above, identify the best combination for the firm.
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