Carla Vista Toys' management is considering eliminating product A, which has been showing a loss for...
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Carla Vista Toys' management is considering eliminating product A, which has been showing a loss for several years. The company's annual income statement, is as follows: A B C Total Sales $2,243,000 $1,403,000 $1,812,600 $5,458,600 Variable expenses 1,662,000 600,700 1,084,600 3,347,300 Contribution margin $581,000 $802,300 $728,000 $2,111,300 Advertising expense $506,000 $426,000 $522,000 $1,454,000 Depreciation expense 15,200 10,800 21,500 47,500 Corporate expenses 91,900 81,400 106,500 279,800 Total fixed expenses $613,100 $518,200 $650,000 $1,781,300 Operating income $(32,100) $284,100 $78,000 $330,000 Advertising expense - Specific to each product. Depreciation expense - Specific to each product; no other use available, no resale value. Corporate expenses - Allocated based on number of employees. (d) Restate the income statement in segment margin format. A $ Advertising Common fixed expenses Contribution margin Depreciation Direct fixed expenses Operating profit Sales Revenue Segment margin Variable expenses $ $ B LA с Restate the income statement in segment margin format. A B $ $ tA LA $ C Total Carla Vista Toys' management is considering eliminating product A, which has been showing a loss for several years. The company's annual income statement, is as follows: A B C Total Sales $2,243,000 $1,403,000 $1,812,600 $5,458,600 Variable expenses 1,662,000 600,700 1,084,600 3,347,300 Contribution margin $581,000 $802,300 $728,000 $2,111,300 Advertising expense $506,000 $426,000 $522,000 $1,454,000 Depreciation expense 15,200 10,800 21,500 47,500 Corporate expenses 91,900 81,400 106,500 279,800 Total fixed expenses $613,100 $518,200 $650,000 $1,781,300 Operating income $(32,100) $284,100 $78,000 $330,000 Advertising expense - Specific to each product. Depreciation expense - Specific to each product; no other use available, no resale value. Corporate expenses - Allocated based on number of employees. (d) Restate the income statement in segment margin format. A $ Advertising Common fixed expenses Contribution margin Depreciation Direct fixed expenses Operating profit Sales Revenue Segment margin Variable expenses $ $ B LA с Restate the income statement in segment margin format. A B $ $ tA LA $ C Total
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A B C Total Sales revenue 2243000 1403000 1812600 5458600 Less variable cost 1662000 600700 108460... View the full answer
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