C. ABC Company has 3 stores. The following data were made available in March 20X3: Sales Variable Costs Contribution Margin Traceable Controllable Fixed Cost Performance Margin Traceable Non-Controllable Fixed Cost Segment Margin Store 1 650,000 390,000 260,000 80,000 180,000 100,000 80,000 2. Store 2 1,200,000 780,000 420,000 200,000 220,000 120,000 100,000 Store 3 800,000 400,000 400,000 180,000 220,000 110,000 110,000 Additional information: 1. Store 1 is the oldest branch. Stores 1 and 3 are both in a sub-urban area, while Store 2 is the newest branch and is in a highly urbanized city. The company is considering an additional advertising cost for P21,000 to boost sales. The following alternatives are being considered: a. Advertise all the stores which will increase individual store's sales by 5%. b. Advertise Store 1 to increase its sales by P300,000 but will decrease sales of Store 3 by P200,000. REQUIRED: Determine which of the 2 alternatives, a or b, will benefit ABC Company more. Support your recommendation by showing the segmented income statement and the total income statement for ABC Company.

C. ABC Company has 3 stores. The following data were made available in March 20X3: Sales Variable Costs Contribution Margin Traceable Controllable Fixed Cost Performance Margin Traceable Non-Controllable Fixed Cost Segment Margin Store 1 650,000 390,000 260,000 80,000 180,000 100,000 80,000 2. Store 2 1,200,000 780,000 420,000 200,000 220,000 120,000 100,000 Store 3 800,000 400,000 400,000 180,000 220,000 110,000 110,000 Additional information: 1. Store 1 is the oldest branch. Stores 1 and 3 are both in a sub-urban area, while Store 2 is the newest branch and is in a highly urbanized city. The company is considering an additional advertising cost for P21,000 to boost sales. The following alternatives are being considered: a. Advertise all the stores which will increase individual store's sales by 5%. b. Advertise Store 1 to increase its sales by P300,000 but will decrease sales of Store 3 by P200,000. REQUIRED: Determine which of the 2 alternatives, a or b, will benefit ABC Company more. Support your recommendation by showing the segmented income statement and the total income statement for ABC Company.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 46E: Lotts Company produces and sells one product. The selling price is 10, and the unit variable cost is...

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TB Problem 12-90 Midtown Retail operates a retail store... Midtown Retail operates a retail store in Kansas City, MO., and St. Louis, MO. The following information relates to the Kansas City facility: • The store sold 61,800 units at $34.00 each, after having purchased the units from various suppliers for $26.50. Kansas City salespeople are paid a 1% commission based on gross sales dollars. • Kansas City's sales manager oversees the placement of local advertising contracts, which totaled $70,000 for the year. Local property taxes amounted to $30,500. • The sales manager's $81,000 salarv is set by Kansas City's store manager. In contrast, the store manager's $150,000 salary is determined by Midtown's vice president. • Kansas City incurred $14,800 of other noncontrollable costs. • Nontraceable (common) corporate overhead totaled $84,000. ok nt ences Midtown's corporate headquarters is located in St. Louis, and the company uses responsibility accounting to evaluate performance. Required:…
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On the cost-volume-profit graph, the area between the total cost line and the sales line after the break-even point represents: O a. The contribution margin per unit O b. The profit area O c. The variable cost amount O d. The fixed cost amount O e. The loss area US PAGE NEXT PAGE nere to search O W 19:09 A O D a d) ENG 07-04-2021 hp prt sc delete home end & 9 + backspace num lock R T P home D F G H K enter レ pause ↑ shift 11 end alt ctrl
32.The following data were related to ABC Corp. COST RETAILInventory, beg 5,000 6,000Purchases 69,000 90,000Freight 6,000Purchase returns 4,000 4,800Net mark-up 8,000Sales 100,000Sales returns 12,000How much is the cost ratio under the FIFO method? (Round in 5 decimal places) 75.23% 76.10% 76.18% 77.85%
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Use the data to prepare the cost statement and income statement by use the variable cost . The production capacity ( 8 000 )unit , the seal price ( 2000 ) to unit . Direct materials ( 176000) Direct wages ( 128000 ). Direct expenses ( 132000 ) Indirect expenses ( 132000 ). ( 100 000 v. , 32 000 f. ). Marketing cost v. ( 100 000 )D. Administration cost 60000 D. Indirect marketing f. ( 100 000). The balance of f. g. f. ( 2500 ) unit , and the balance of f. g. l. ( 1000 ) unit . The number of sales unit ( ? ) unit
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QUESTION 2 (a) Explain the following terms: (1) margin of safety (ii) contribution margin (b) contribution to sales ratio (ii) (iv) (c) cost behaviour in a linear function (v) (d) break even analysis The Income statement for the year ending 31 December 2020 for Hagemaru Manufacturing is as follows: RM'000 RM'000 Sales (22,000 units) 3,300 Direct materials 726 Direct labour 374 Production overheads 798 (1,898) Gross profit 1,402 Selling overheads (1,042) Net profit 360 The variable production overheads were RM9 per unit while the variable selling overheads were RM11 per unit. Required: (i) Calculate contribution margin per unit. (i) (ii) Calculate breakeven point in units and in RM. (i) Calculate margin of safery in units for the latest financial year. The company has a capacity of 30,000 units per year. Management is not happy with the financial performance for the last year, and two courses of (iv) (v) (vi) action for the coming year were proposed in the recent management meeting:…
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