Which of the following are relevant in Cowboy Ice Cream's decision of whether to eliminate its Retail Division? (Select all that apply) Sales Cost of Goods Sold Variable operating expenses General fixed operating expenses Question 2 0.5 pts What would Cowboy Ice Cream's net income be if it eliminated the Retail Division? Question 3 0.5 pts By how much will Cowboy Ice Cream's net income increase or decrease if the Retail Division is eliminated? (Enter an increase as a positive number or a decrease as a negative number, e.g. if profitability will decrease by $5,000, then enter"5000") What is Cowboy Ice Cream's projected Net Income assuming that 40,000 units are sold to wholesale customers? Question 5 0.5 pts By how much will Buckley Company's net income increase or decrease if Segment Ais eliminated? (Enter an increase as a positive number or a decrease as a negative number, e.g., if profitability will decrease by $5,000, then enter --5000") Question 6 0.5 pts Which of the following describe relevant costs? (Select all that apply) Only quantitative (ie, there are no relevant costs that are qualitative) Differ among alternatives Future oriented Sunk costs Crowder Transport Company has four different divisions. A recent income statement for the West Division is shown below. Revenue Salaries for drivers Fuel expenses Insurance Division-level facility costs Company-wide facility costs Net Loss $300.000 (210,000) (30,000) (42.000) (24,000) (78.000) ($84,000) Which of the following items are relevant for the decision of whether the West Division should be eliminated? Salaries for drivers Fuel expenses Insurance Revenue Division-level facility costs Company wide facility costs Question 8 Crowder Transport Company has four different divisions. A recent income statement for the West Division is shown below. Revenue $300,000 Salaries for drivers (210,000) Fuel expenses (30,000) Insurance (42,000) Division-level facility costs (24,000) Company-wide facility costs (78.000) Net Loss ($84,000) By how much will Crowder Transport Company's net income increase or decrease if the West Division is eliminated? (Enter an increase as a positive number or a decrease as a negative number, e.g., if prohtability will decrease by $5,000, then enter"5000") Rubio, Inc. is considering eliminating one of its segments. The segment Incurs the following fixed costs. If the segment is eliminated, the building it uses will be sold. Advertising expense Supervisory salaries Allocation of company wide facility costs Original cost of building Book value of building Market value of building Maintenance costs on equipment Real estate taxes on building $140.000 300,000 130.000 220,000 100,000 160,000 112,000 12,000 Identify the relevant costs associated with the segment. (Select all that apply) Real estate taxes on building Original cost of building Book value of building Supervisory Salaries Allocation of company wide facility costs Market value of building Maintenance costs on equipment Advertising expense Question 10 0.5 pts Rubio, Inc. is considering eliminating one of its segments. The segment incurs the following fixed costs. If the segment is eliminated the building it uses will be sold. Advertising expense Supervisory salaries Allocation of company-wide facility costs Original cost of building Book value of building Market value of building Maintenance costs on equipment Real estate taxes on building $140,000 300,000 130,000 220,000 100,000 160.000 112,000 12,000 What is the total amount of relevant costs associated with the segment? Before purchasing the new ice cream truck, Cowboy Ice Cream, Inc. (CIC) considered eliminating the Retail Division. This was mainly prompted by Frank's (W.T. fellow shareholder) concem that the income statements for the divisions for May-September 2017 (when the Retail Division is at full operation) imply that profitability could be improved if the Retail Division were eliminated. Division EEEE Sales E Cost of goods sold Variable operating expenses required to operate each division Contribution margin BE General fixed operating expenses (allocation of general administrative expense) Net income SENSE Required: Retail $60,000 (18,000) 131.500 1 0,500 (12,000) $ (1.500) Wholesale $160,000 190,000) 115,050) 54,950 (12.000) $ 42.950 a. Explain the effect on profitability if the Retail Division is eliminated. Relevant Revenue and Costs for the Retail Division: I b. Prepare comparative income statements of the company as a whole under two alternatives: (1) the retention of the Retail Division and (2) the elimination of the Retail Division. Decision Keep Retail Div. Eliminate Retail Div. Sales Cost of goods sold Operating expenses Contribution margin General fixed operating expenses Net income Survey of Accounting Class 17 Packet According to its original plan, CIC plans to charge its wholesale customers at $8 per unit in 2018. W.T. expects sales to reach 34,000 units at that rate. His co-shareholder, Frank, however, argues that actual results may range from 30,000 units to 40,000 units because of market uncertainty. CIC's standard variable cost for the Wholesale Division is $5.25 per unit, and its standard fixed cost is $1,100. Required: Develop budgets based on the assumptions of service levels at 30,000 units, 34,000 units, and 40,000 units. Flexible Budget 30,000 Units Flexible Budget 34,000 Units Flexible Budget 40,000 Units IN Sales ($8/unit) Variable costs ($5.25/unit.) Contribution margin Fixed costs Net income Buckley Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. Segment Sales 11 1 19 $330,000 (242,000) (30,000 58,000 192,000) Cost of goods sold Sales commissions Contribution margin General fixed operating expenses (allocation of president's salary) Advertising expense (specific to individual divisions) | Net income $480,000 (184,000) (44,000 252,000 (92,000) $500,000 (190,000) 144,000 266,000 (92,000) (6.000) (20,000) $140,000) $40,000 $174,000 ELENA NA A Required: a. Explain the effect on profitability if Segment A is eliminated. M b. Prepare comparative income statement for the company as a whole under two alternatives: (1) the retention of Segment A and (2) the elimination of Segment A Which of the following are relevant in Cowboy Ice Cream's decision of whether to eliminate its Retail Division? (Select all that apply) Sales Cost of Goods Sold Variable operating expenses General fixed operating expenses Question 2 0.5 pts What would Cowboy Ice Cream's net income be if it eliminated the Retail Division? Question 3 0.5 pts By how much will Cowboy Ice Cream's net income increase or decrease if the Retail Division is eliminated? (Enter an increase as a positive number or a decrease as a negative number, e.g. if profitability will decrease by $5,000, then enter"5000") What is Cowboy Ice Cream's projected Net Income assuming that 40,000 units are sold to wholesale customers? Question 5 0.5 pts By how much will Buckley Company's net income increase or decrease if Segment Ais eliminated? (Enter an increase as a positive number or a decrease as a negative number, e.g., if profitability will decrease by $5,000, then enter --5000") Question 6 0.5 pts Which of the following describe relevant costs? (Select all that apply) Only quantitative (ie, there are no relevant costs that are qualitative) Differ among alternatives Future oriented Sunk costs Crowder Transport Company has four different divisions. A recent income statement for the West Division is shown below. Revenue Salaries for drivers Fuel expenses Insurance Division-level facility costs Company-wide facility costs Net Loss $300.000 (210,000) (30,000) (42.000) (24,000) (78.000) ($84,000) Which of the following items are relevant for the decision of whether the West Division should be eliminated? Salaries for drivers Fuel expenses Insurance Revenue Division-level facility costs Company wide facility costs Question 8 Crowder Transport Company has four different divisions. A recent income statement for the West Division is shown below. Revenue $300,000 Salaries for drivers (210,000) Fuel expenses (30,000) Insurance (42,000) Division-level facility costs (24,000) Company-wide facility costs (78.000) Net Loss ($84,000) By how much will Crowder Transport Company's net income increase or decrease if the West Division is eliminated? (Enter an increase as a positive number or a decrease as a negative number, e.g., if prohtability will decrease by $5,000, then enter"5000") Rubio, Inc. is considering eliminating one of its segments. The segment Incurs the following fixed costs. If the segment is eliminated, the building it uses will be sold. Advertising expense Supervisory salaries Allocation of company wide facility costs Original cost of building Book value of building Market value of building Maintenance costs on equipment Real estate taxes on building $140.000 300,000 130.000 220,000 100,000 160,000 112,000 12,000 Identify the relevant costs associated with the segment. (Select all that apply) Real estate taxes on building Original cost of building Book value of building Supervisory Salaries Allocation of company wide facility costs Market value of building Maintenance costs on equipment Advertising expense Question 10 0.5 pts Rubio, Inc. is considering eliminating one of its segments. The segment incurs the following fixed costs. If the segment is eliminated the building it uses will be sold. Advertising expense Supervisory salaries Allocation of company-wide facility costs Original cost of building Book value of building Market value of building Maintenance costs on equipment Real estate taxes on building $140,000 300,000 130,000 220,000 100,000 160.000 112,000 12,000 What is the total amount of relevant costs associated with the segment? Before purchasing the new ice cream truck, Cowboy Ice Cream, Inc. (CIC) considered eliminating the Retail Division. This was mainly prompted by Frank's (W.T. fellow shareholder) concem that the income statements for the divisions for May-September 2017 (when the Retail Division is at full operation) imply that profitability could be improved if the Retail Division were eliminated. Division EEEE Sales E Cost of goods sold Variable operating expenses required to operate each division Contribution margin BE General fixed operating expenses (allocation of general administrative expense) Net income SENSE Required: Retail $60,000 (18,000) 131.500 1 0,500 (12,000) $ (1.500) Wholesale $160,000 190,000) 115,050) 54,950 (12.000) $ 42.950 a. Explain the effect on profitability if the Retail Division is eliminated. Relevant Revenue and Costs for the Retail Division: I b. Prepare comparative income statements of the company as a whole under two alternatives: (1) the retention of the Retail Division and (2) the elimination of the Retail Division. Decision Keep Retail Div. Eliminate Retail Div. Sales Cost of goods sold Operating expenses Contribution margin General fixed operating expenses Net income Survey of Accounting Class 17 Packet According to its original plan, CIC plans to charge its wholesale customers at $8 per unit in 2018. W.T. expects sales to reach 34,000 units at that rate. His co-shareholder, Frank, however, argues that actual results may range from 30,000 units to 40,000 units because of market uncertainty. CIC's standard variable cost for the Wholesale Division is $5.25 per unit, and its standard fixed cost is $1,100. Required: Develop budgets based on the assumptions of service levels at 30,000 units, 34,000 units, and 40,000 units. Flexible Budget 30,000 Units Flexible Budget 34,000 Units Flexible Budget 40,000 Units IN Sales ($8/unit) Variable costs ($5.25/unit.) Contribution margin Fixed costs Net income Buckley Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. Segment Sales 11 1 19 $330,000 (242,000) (30,000 58,000 192,000) Cost of goods sold Sales commissions Contribution margin General fixed operating expenses (allocation of president's salary) Advertising expense (specific to individual divisions) | Net income $480,000 (184,000) (44,000 252,000 (92,000) $500,000 (190,000) 144,000 266,000 (92,000) (6.000) (20,000) $140,000) $40,000 $174,000 ELENA NA A Required: a. Explain the effect on profitability if Segment A is eliminated. M b. Prepare comparative income statement for the company as a whole under two alternatives: (1) the retention of Segment A and (2) the elimination of Segment A