Sheridan Mars, a recent graduate of Bell's accounting program, evaluated the operating performance of Dunn Company's...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Sheridan Mars, a recent graduate of Bell's accounting program, evaluated the operating performance of Dunn Company's six divisions. Sheridan made the following presentation to Dunn's board of directors and suggested the Percy Division be eliminated. "If the Percy Division is eliminated," she said, "our total profits would increase by $26.400. Sales Cost of goods sold Gross profit Operating expenses Net income The Other Five Divisions $1,663,000 977,200 685,800 528,500 $157,300 Percy Division $100,400 77,000 23,400 49,800 $(26,400) Total $1,763,400 1,054,200 709,200 578,300 $130,900 In the Percy Division, cost of goods sold is $60,600 variable and $16,400 fixed, and operating expenses are $30,900 variable and $18,900 fixed. None of the Percy Division's fixed costs will be eliminated if the division is discontinued. In the Percy Division, cost of goods sold is $60,600 variable and $16,400 fixed, and operating expenses are $30,900 variable and $18,900 fixed. None of the Percy Division's fixed costs will be eliminated if the division is discontinued. Is Sheridan right about eliminating the Percy Division? Prepare a schedule to support your answer. (Enter negative amounts using either negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Sales Variable costs Cost of goods sold Operating expenses Total variable Contribution margin Fixed costs Cost of goods sold Operating expenses Total fixed Net income (loss) $ $ Eliminate (Decrease) -100,400 Sheridan Mars, a recent graduate of Bell's accounting program, evaluated the operating performance of Dunn Company's six divisions. Sheridan made the following presentation to Dunn's board of directors and suggested the Percy Division be eliminated. "If the Percy Division is eliminated," she said, "our total profits would increase by $26.400. Sales Cost of goods sold Gross profit Operating expenses Net income The Other Five Divisions $1,663,000 977,200 685,800 528,500 $157,300 Percy Division $100,400 77,000 23,400 49,800 $(26,400) Total $1,763,400 1,054,200 709,200 578,300 $130,900 In the Percy Division, cost of goods sold is $60,600 variable and $16,400 fixed, and operating expenses are $30,900 variable and $18,900 fixed. None of the Percy Division's fixed costs will be eliminated if the division is discontinued. In the Percy Division, cost of goods sold is $60,600 variable and $16,400 fixed, and operating expenses are $30,900 variable and $18,900 fixed. None of the Percy Division's fixed costs will be eliminated if the division is discontinued. Is Sheridan right about eliminating the Percy Division? Prepare a schedule to support your answer. (Enter negative amounts using either negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Sales Variable costs Cost of goods sold Operating expenses Total variable Contribution margin Fixed costs Cost of goods sold Operating expenses Total fixed Net income (loss) $ $ Eliminate (Decrease) -100,400
Expert Answer:
Answer rating: 100% (QA)
A Answer Incrmental analysis Sales Variable cost Cost of goods sold Operating expenses Tota... View the full answer
Related Book For
Accounting Principles
ISBN: 978-1118875056
12th edition
Authors: Jerry Weygandt, Paul Kimmel, Donald Kieso
Posted Date:
Students also viewed these accounting questions
-
A recent graduate of an accounting program went to work for a large international accounting firm and noted that the firm sets audit risk at 5% for all major engagements. What does a literal...
-
Judy Herzog, a recent graduate of Rollings accounting program, evaluated the operating performance of Klumpe Companys six divisions. Judy made the following presentation to the Klumpe board of...
-
Gaby Rodriquez, a recent graduate of State??s accounting program, evaluated the operating performance of Schultz Company??s six divisions. Gaby made the following presentation to the Schultz board of...
-
JinsAppliances has a return-on-assets (investment) ratio of 8 percent. a. If the debt-to-total-assets ratio is 40 percent, what is the return on equity? b. If the firm had no debt, what would the...
-
Ray Dolby started Dolby Laboratories nearly 40 years ago and since then has been a leader in the entertainment industry and consumer electronics. Closely held since its founding in 1965, Dolby...
-
A steel ball will drop 16t2 feet in t seconds. Such a ball is dropped from a height of 64 feet at a horizontal distance 10 feet from a 48-foot street light. How fast is the ball's shadow moving when...
-
Stock markets are merely casinos allowing speculators to get rich while doing nothing for ordinary people like you and me. Write an essay explaining why you agree or disagree with this statement.
-
Your initial design was good, but the team leader wants you to try another approach. She put these questions to you: Should corrective maintenance get a higher priority than other types of...
-
A company uses a standard costing system and is analyzing its costs for the most recent period. With respect to materials, the company uses the following standards: Standard Quantity of material...
-
EYE SPY sells sophisticated video surveillance equipment. EYE SPY sells the equipment and computer integration services together. It does not sell these separately. The equipment cannot operate...
-
you will create a design and procedure using the following information. Please see the Research Rubric for specific details required for your submission: Topic: The effect of heat on aggression...
-
The growth of digital marketing and social media has ushered in a new era with many distinct trends that require changes to the way marketers organize their efforts and deliver value to their...
-
400-SMC-1011.1.2 (F101: Strategic Change) 400-SMC-1011.1.4 (F103: Developing Army Organizational capability) 400-SMC-1011.1.5 (F104: Planning, Programming, Budgeting, and Execution (PPBE) Process and...
-
The ground pushes against a 1,351 kg car's tires, doing 268,217 J of work. If it started from rest, how fast is the car moving after this work is done?
-
Julia has strictly convex preferences and she allocates all of her income to the purchase of good X and good Y. At her current income of $3000 per month, with price of X being $20 per unit and price...
-
You have decided to purchase a house in Vancouver east, which currently is selling at $1,200,000. You have $200,000 in your savings account to use as your downpayment. You have been approved to...
-
Derive the kinematic and dynamic equations for the Euler axis and angle representation
-
Derive Eq. (18.33) from Eq. (18.32).
-
As an auditor for the CPA firm of Hinkson and Calvert, you encounter the following situations in auditing different clients. 1. LR Corporation is a closely held corporation whose stock is not...
-
The adjusted trial balance for Karr Farm Corporation at the end of the current year contained the following accounts. Interest Payable $ 9000 Lease Liability 89,500 Bonds Payable, due 2019 180,000...
-
Peck Corporation is authorized to issue 20,000 shares of $50 par value, 10% preferred stock and 125,000 shares of $5 par value common stock. On January 1, 2017, the ledger contained the following...
-
Under U.S. GAAP, the interest cost associated with borrowings used in the self-construction of a business asset may be capitalized to the balance sheet as part of the self-constructed assets cost...
-
Users of financial statements often describe depreciation expense, depletion expense, and amortization expense as sources of operating cash flows. Discuss the accuracy of this assertion.
-
On December 2, 2006, Pfizer Inc. announced that it was immediately discontinuing clinical trials of its Torcetrapib drug. Subsequent clinical results showed that patients taking the drug suffered a...
Study smarter with the SolutionInn App