8QS 23-13 Segment elimination LO P4ntsA division of a large company reports the Information shown below for a recent year. Variable costs and direct fixed costs areavoidable, and 40% of the Indirect fixed costs are avoidable. Based on this Information, should the division be eliminated?eBookSalesVariable costsFixed costsDirectIndirect$ 275,000199,37541,25068,750HintOperating loss口eferences$ (34,375)1-a. Compare the amounts of total revenues and total avoidable expenses.1-b. Based on this information, should the division be eliminated?Complete this question by entering your answers in the tabs below.Required 1A Required 18Compare the amounts of total revenues and total avoidable expenses.RevenuesAvoidable expensesRevenues are greater than (less than) avoidable expenses by

Sure. Revenues are greater than avoidable expenses by $6,883.0.Here's the breakdown:Revenues:…

Answered: 8 QS 23-13 Segment elimination LO P4…

Financial & Managerial Accounting

14th Edition

ISBN:9781337119207

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter24: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 24.2BE

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Problem 6-19 (Algo) Variable Costing Income Statement; Reconciliation [LO,6-1, LO6-2, LO6-3] During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 $1,220,000 $1,830,000 780,000 1,170,000 440,000 313,000 $ 127,000 Sales (@ $61 per unit) Cost of goods sold (@ $39 per unit) Gross margin Selling and administrative expenses* Net operating income * *$3 per unit variable; $253,000 fixed each year. The company's $39 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($450,000 ÷ 25,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Units produced Units sold Year 1 25,000 20,000 Year 2 25,000 30,000 660,000 343,000 $ 317,000 $7 10 4 18 $ 39 Required: 1. Using variable costing, what is the unit product cost for both years? 2. What is the variable costing net operating income…
Problem 5A-8 (Algo) High-Low Method; Predicting Cost [LO5-10] Nova Company's total overhead cost at various levels of activity are presented below: Total Overhead Cost $ 170,500 $ 148,000 Month April May June July Machine-Hours 46,000 36,000 56,000 66,000 Assume the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 36,000 machine-hour level of activity is: Utilities (variable) Supervisory salaries (fixed) Maintenance (mixed) Total overhead cost $ 193,090 $ 215,500 Nova Company's management wants to break down the maintenance cost into its variable and fixed cost elements. Required 1 Required: 1. Estimate how much of the $215,500 of overhead cost in July was maintenance cost. (Hint: To do this, it may be helpful to first determine how much of the $215,500 consisted of utilities and supervisory salaries. Think about the behavior of variable and fixed costs.) 2. Using the high-low method, estimate a cost formula for…
Required information Problem 17-30 Joint Cost Allocation; Missing Data (LO 17-4) [The following information applies to the questions displayed below.] Berger Company manufactures products Delta, Kappa, and Omega from a joint process. Production, sales, and cost data for July follow. Units produced Joint cost allocation. Sales value at split-off Additional costs if processed further Sales value if processed further Problem 17-30 Part 1 Kappa Omega Delta 5,800 $ 68,400 ? $ 8,800 $160,000 Allocation of Joint Costs Kappa 3,080 Omega 1,720 ? ? $28,500 $ 6,800 $ 4,800 $70,000 $65,000 Required: 1. Assuming that joint costs are allocated using the relative-sales-value method, what were the joint costs allocated to products Kappa and Omega? (Do not round intermediate calculations.) Total 10,600 $ 96,000 $190,000 $ 20,400 $295,000
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