Valber Company is considering eliminating its phone division. The company allocates fixed costs based on sales. If the phone division is dropped, $153,000 of the fixed costs allocated to that division could be eliminated. The impact on Valber's operating income from eliminating the phone division would be: Sales Variable costs Contribution margin Fixed costs Net income (loss) Desktops $365,000 204,000 161,000 74,200 86,800 Laptops $880,500 638,000 242,500 177,300 65,200 Tablets $703,000 531,000 172,000 141,800 30,200 Phones $978,000 798,000 180,000 198,000 (18,000) $8,000 decrease $153,000 increase $153,000 decrease $18,000 increase $27,000 decrease Carns Company is considering eliminating its small tools division, which reported an operating loss for the recent year of $100,000. Division sales for the year were $1,460,000 and its variable costs were $1,325,000. The fixed costs of the division were $370,000. If the kitchen division is dropped, 30% of the fixed costs allocated it could be eliminated. The impact on Carns's operating income from eliminating the small tools division would be: Multiple Choice $51,700 decrease $111,000 increase $24,000 decrease $24,000 decrease $111,000 decrease Gion Company is considering eliminating its windows division, which reported an operating loss for the recent year of $114,000. Division sales for the year were $1,200,000 and its variable costs were $1,065,000. The fixed costs of the division were $250,000. If the windows division is dropped, 60% of the fixed costs allocated to it could be eliminated. The impact on Gion's operating income from eliminating this business segment would be: $32,500 decrease $15,000 increase $150,000 decrease $150,000 increase $15,000 decrease Sammy Company is considering eliminating its commercial division. The company allocates fixed costs based on division sales. If the commercial division is dropped, $103,000 of the fixed costs allocated to it could be eliminated. The impact on Sammy's operating income from eliminating the commercial division would be: Sales Variable costs Contribution margin Fixed costs Net income (loss) Garden $684,000 375,900 308,100 250, 200 57,900 Farm $929,000 417,000 512,000 338,500 173,500 Commercial $ 701,000 652,800 48,200 255,500 (207,300) o $1,300 decrease o $27,000 increase o $54,800 increase o $9,000 increase o $54,800 decrease Pinkin Inc. needs to determine a price for a new phone model. Pinkin desires a 25% markup on the total cost of the phone. Pinkin expects to sell 50,000 phones. Additional information is as follows: Variable product cost per unit Variable administrative cost per unit Total fixed overhead Total fixed administrative $ 82 66 110,000 90,000 Using the total cost method what price should Pinkin charge? $178.08 $190.00 $152.08 $170.92 $188.75 Galla Inc. operates in a highly competitive market where the market price for its product is $187 per unit. Galla desires a $24 profit per unit. Galla expects to sell 6,700 units. Additional information is as follows: $ 20 15 Variable product cost per unit Variable administrative cost per unit Total fixed overhead Total fixed administrative 62,000 35,000 Using target costing, what is the target cost? $133.00 $168.00 $128.00 $148.00 $163.00