Below is information about the three product lines that make up MAG's Construction Materials Company. Sales...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Below is information about the three product lines that make up MAG's Construction Materials Company. Sales -Variable Costs Contribution Margin -Fixed Costs NOI Blocks $500,000 $250,000 $250,000 Bricks $800,000 $480,000 Houp $320,000 $90,000 $230,000 Tile $150,000 $140,000 $10,000 Total $1,450,000 $870,000 $580,000 $100,000 $55,000 $245,000 $150,000 ($45,000) $335,000 MAG is considering dropping the Tile product line. Traceable fixed costs associated with the Tile product line are $10,000 in advertising expenses and $35,000 in supervisor salaries, which would be eliminated if they dropped the Tile product line. The remaining fixed costs are allocated to the Tile product line based on production floor space utilized. If MAG drops the Tile product line, they estimate that sales of Blocks will decrease by 10% and sales of Bricks will decrease by 8%. Will MAG's Net Operating Income (NOI) increase or decrease if they drop the Tile product line, and by how much? Below is information about the three product lines that make up MAG's Construction Materials Company. Sales -Variable Costs Contribution Margin -Fixed Costs NOI Blocks $500,000 $250,000 $250,000 Bricks $800,000 $480,000 Houp $320,000 $90,000 $230,000 Tile $150,000 $140,000 $10,000 Total $1,450,000 $870,000 $580,000 $100,000 $55,000 $245,000 $150,000 ($45,000) $335,000 MAG is considering dropping the Tile product line. Traceable fixed costs associated with the Tile product line are $10,000 in advertising expenses and $35,000 in supervisor salaries, which would be eliminated if they dropped the Tile product line. The remaining fixed costs are allocated to the Tile product line based on production floor space utilized. If MAG drops the Tile product line, they estimate that sales of Blocks will decrease by 10% and sales of Bricks will decrease by 8%. Will MAG's Net Operating Income (NOI) increase or decrease if they drop the Tile product line, and by how much?
Expert Answer:
Related Book For
Managerial Accounting An Introduction to Concepts Methods and Uses
ISBN: 978-0324639766
10th Edition
Authors: Michael W. Maher, Clyde P. Stickney, Roman L. Weil
Posted Date:
Students also viewed these mathematics questions
-
Below is information about ABC Ltd., a chemical producer, for the month of June: Work in process, beginning inventory ............................... 25,000 units Transferred-in units-100% complete...
-
Below is information about Gandalf Corp., a chemical producer, for October: Work in process, beginning inventory..................................................50,000 units Transferred...
-
Problem I: (15 pts) Below is information about the products that a company has in its ending inventory. The company will be using the lower of cost or market method (LCM) to determine the inventory...
-
Research about the competitive and comparative advantage of the Argentina in terms of physical and human resources and how it is making use of these resources for international trade purpose. 3....
-
A Peruvian investor buys 150 shares of a U.S. stock for $7,500 ($50 per share). Over the course of a year, the stock goes up by $4 per share. a. If there is a 10 percent gain in the value of the...
-
Dubuc produces electronic calculators. Suppose Dubucs standard cost per calculator is $27 for materials and $63 for conversion costs. The following data apply to August production: Requirements 1....
-
Larry Riley formed a rental agreement for a self-storage unit with Iron Gate Self Storage in December 2003. The agreement stated that a maximum of \($5,000\) of personal property could be stored in...
-
Imagine that Howard has asked you to write some queries to help him make better use of his data. For each information request below, write a single query that provides the answer set. When a task...
-
what are the benefits of the relational model relationships and ERD ( entity-relationship model)?
-
The neural structure of the sea slug Aplysia has been widely studied (first by Nobel Laureate Eric Kandel) because it has only about 20,000 neurons, most of them large and easily manipulated....
-
Outline the specific functions provided by MYOB software. Discuss the problems of using a manual accounting system. Outline the benefits of using an online accounting software tool. Discuss three...
-
1.What was the premise behind the Recording Industry Association of Americas lawsuit against Napster? 2.Based on your knowledge of how Napster works, if you downloaded a copy of a song from a friends...
-
11) Short-term liquidity refers to an organization's ability to generate enough cash to repay long-term debts as they mature. 12) Long-term solvency refers to an organization's ability to meet...
-
Discuss the principles of pharmacogenomics and personalized medicine, highlighting how genetic variation influences drug metabolism, efficacy, and adverse reactions, and its implications for...
-
Ingrid Lederhaas-Okun was arrested on July 2, 2013, at her home in Connecticut on charges of wire fraud and interstate transportation of stolen property. She is accused of stealing jewelry from...
-
Find the length of a 75 arc of a circle whose radius is 6 cm. b. Explain why the arc length in part (a) is longer or shorter in centimeters if the radius had been 11 cm. c. Find the arc length when...
-
In the series connection below, what are the respective power consumptions of R, R2, and R3? R R www 4 V=6V P1-3 W; P2=3W; and P3= 3 W OP10.5 W; P2-1 W; and P3= 1.5 W P1=1.5 W; P2=1 W; and P3= 0.5 W...
-
The return on investment measure may be biased in favor of divisions with older plant and equipment. Explain.
-
Meyers Company has a commissary with two operating departments: P1, food inventory control, and P2, paper goods inventory control. It has two service departments: S1, computer services, and S2,...
-
Princeton Corporations research and development department is presenting a proposal for new product research. The new product will require research, development, and design investments of $6 million...
-
The required rate of return is 12%, and the expected rate of inflation over the life of the project is forecast to remain steady at 3%. Should you invest in this project?
-
For your answer to Problem 3.11, construct an argument as to why this selection process is useful for deciding which project is best. Now, construct a counterargument to criticize this choice. In...
-
Scoring Model. Suppose the information in Problem 3.13 was supplemented by importance weights for each of the four assessment criteria, where 1 = low importance and 4 = high importance: Assume, too,...
Study smarter with the SolutionInn App