Cane company has two offices. A segmented contribution format income statement for the company's most recent...
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Cane company has two offices. A segmented contribution format income statement for the company's most recent month is as follows: Office Winnipeg $50,000 100% 40 Brandon $40,000 24,000 16,000 10.400 $5,600 Total Company $90,000 100% 48.9 100% 60 40 Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses Operating income 44.000 20.000 46,000 51.1 30,000 60 27 400 17 000 $13,000 34 26 30 4 26 14 20.7 18,600 9.000 $9.600 Required: 1. Assuming no change in cost behaviours, by how much would the company's operating income increase if Brandon increased its sales by $3,000. (2 marks) 2. A new owner would like to see the common fixed expenses allocated to each office in proportion to their sales The owner wants all segments to help cover all of the costs. Do you agree or disagree with the owner? Provide two reasons to support your response. (3 marks) Cane company has two offices. A segmented contribution format income statement for the company's most recent month is as follows: Office Winnipeg $50,000 100% 40 Brandon $40,000 24,000 16,000 10.400 $5,600 Total Company $90,000 100% 48.9 100% 60 40 Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses Operating income 44.000 20.000 46,000 51.1 30,000 60 27 400 17 000 $13,000 34 26 30 4 26 14 20.7 18,600 9.000 $9.600 Required: 1. Assuming no change in cost behaviours, by how much would the company's operating income increase if Brandon increased its sales by $3,000. (2 marks) 2. A new owner would like to see the common fixed expenses allocated to each office in proportion to their sales The owner wants all segments to help cover all of the costs. Do you agree or disagree with the owner? Provide two reasons to support your response. (3 marks)
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Related Book For
Managerial accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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