Results for January are listed below: a. b. C. d. Units sold Revenue Variable departmental costs...

 

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Results for January are listed below: a. b. C. d. Units sold Revenue Variable departmental costs Avoidable fixed costs Unavoidable fixed costs Net income Chinese Style American Style 400 450 $36,000 $22,500 14,000 6,000 8,000 Japenese style 350 $35,000 13,500 17,500 4,000 5,000 9,000 7,000 $ 8,000 ($ 4,000) $5.500 Total 1,200 $93,500 45,000 15,000 24,000 $9.500 If American style is discontinued, management estimates that sales of Chinese Style will increase by 20%. In good form, prepare an incremental analysis to determine if American style should be discontinued. What qualitative factors should be considered relating question (a)? Should American style be discontinued based solely on quantitative aspects? Briefly justify your response. Without creating new income statements, and using your results from your analysis in part A, determine the amount of the company's new net income if American style is discontinued. Show your calculations. Results for January are listed below: a. b. C. d. Units sold Revenue Variable departmental costs Avoidable fixed costs Unavoidable fixed costs Net income Chinese Style American Style 400 450 $36,000 $22,500 14,000 6,000 8,000 Japenese style 350 $35,000 13,500 17,500 4,000 5,000 9,000 7,000 $ 8,000 ($ 4,000) $5.500 Total 1,200 $93,500 45,000 15,000 24,000 $9.500 If American style is discontinued, management estimates that sales of Chinese Style will increase by 20%. In good form, prepare an incremental analysis to determine if American style should be discontinued. What qualitative factors should be considered relating question (a)? Should American style be discontinued based solely on quantitative aspects? Briefly justify your response. Without creating new income statements, and using your results from your analysis in part A, determine the amount of the company's new net income if American style is discontinued. Show your calculations.

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a If American Style is Discontinued Particulars Units Sold 2 Revenue 3 Variable Dep Costs 4 Avoidabl... View the full answer