Cornell Enterprises currently produces several products. Model L78 is showing a net operating loss as indicated...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Cornell Enterprises currently produces several products. Model L78 is showing a net operating loss as indicated by the following condensed income statement prepared for the year ended December 31. Cornell Enterprises Model L78 Condensed Income Statement For the Year Ended December 31 Sales (1.500 units at $320) Variable costs (1.500 units at $240) Contribution margin Fixed costs Operating loss $480,000 $360,000 $120,000 $125.000 S(5.000) You have been hired by Cornell. Enterprises to help analyze the decision as to whether to eliminate Model L78. Upon investigation, you discover that if Model L78 is eliminated, $20,000 of the fixed costs shown on the above condensed income statement can be eliminated. The rest of the fixed costs allocated to Model L78 are common fixed costs that will be allocated to the remaining two products produced by Cornell Enterprises. Determine if Cornell Enterprises should discontinue Model L78. Cornell Enterprises currently produces several products. Model L78 is showing a net operating loss as indicated by the following condensed income statement prepared for the year ended December 31. Cornell Enterprises Model L78 Condensed Income Statement For the Year Ended December 31 Sales (1.500 units at $320) Variable costs (1.500 units at $240) Contribution margin Fixed costs Operating loss $480,000 $360,000 $120,000 $125.000 S(5.000) You have been hired by Cornell. Enterprises to help analyze the decision as to whether to eliminate Model L78. Upon investigation, you discover that if Model L78 is eliminated, $20,000 of the fixed costs shown on the above condensed income statement can be eliminated. The rest of the fixed costs allocated to Model L78 are common fixed costs that will be allocated to the remaining two products produced by Cornell Enterprises. Determine if Cornell Enterprises should discontinue Model L78.
Expert Answer:
Answer rating: 100% (QA)
Answer Cornell Enterprises should not discontinue Model L78 If Cornell Enterprises is discontin... View the full answer
Related Book For
Posted Date:
Students also viewed these general management questions
-
You have been hired by XYZ Company to automate its fraud-detection process. Analyze the process of fraud detection automation. Based on your analysis, propose an automation plan to XYZ and include...
-
You have been hired as a consultant to design BCP for SanGrafix, a video and PC game design company. SanGrafix's newest game has become a hot seller, and the company anticipates rapid growth. It's...
-
You have been hired as a consultant to Kulpa Fishing Supplies (KFS), a company that is seeking to increase its value. The companys CEO and founder, Mia Kulpa, has asked you to estimate the value of...
-
Explain how the structure of the balance sheet corresponds to the accounting equation.
-
Explain with an example the difference between dependent and independent demand.
-
Wood Corporation made three long-term intercorporate investments on January 2. Data relating to these investments for the year appear next. Give the journal entries to record the acquisition of these...
-
\(\sqrt{74}+(-\sqrt{74})=0\) Identify the property of real numbers that is being illustrated.
-
Golden Corp., a merchandiser, recently completed its 2013 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3)...
-
9 What is the balance of the Accounts Receivable account at the end of January? 10 What is the net income for the month of January before corrections and adjustments?
-
In 20X2, ABBA Fabrics, Inc., elected to change its method of valuing inventory to the weighted average cost (WAC) method, whereas in all prior years inventory was valued using the last-in, firstout...
-
. 2. Reconsidering the final music product line segmentation scheme displayed in Figure 8.20 of Chapter 8, answer the following questions regarding segment #4.~ a) Assume the product manager in...
-
Define revenues and expenses. What other sorts of gain are there?
-
What are property, plant and equipment (PPE) assets? What are the major classes of PPE assets? At what value should PPE assets be recorded?
-
Why is it not easy to define and measure profit?
-
What are the two main types of leases?
-
Examine the idea of accountability in relation to an organization with which you are familiar (e.g. a university, a church, a football club, a national government).
-
A child educator has just completed curriculum experience plans on children in her care for 3 year olds. The educator is to have a group meeting with fellow educators and have a critical reflection...
-
How can a promoter avoid personal liability for pre-incorporation contracts?
-
Hugo Medical Supply has applied for a loan. Pacific Commerce Bank has requested a budgeted balance sheet as of April 30 and a combined cash budget for April. As Hugo Medical Supply's controller, you...
-
Financial statement data of Pacific Traveler magazine include the following items (dollars in thousands): Cash...
-
For each of the following items, identify whether the item would be classified under the Labor Practices and Decent Work, Human Rights, Society, or Product Responsibility subcategory of the Social G4...
-
The time value of money Consider the following cash flows from today (year zero) to year 3 in pounds sterling: Your interest rate (or discount rate) in pounds is 10 percent. a Compute the net present...
-
Balance sheet hedging Gateaux Antoinette, SA, a subsidiary of Antoinette Cakes Inc., New York, had cash of 100,000 and accounts receivable of 100,000 each on its books (or 200,000 in total) when the...
-
The equilibrium exchange rate Consider the following quantity of dollars demanded and supplied daily in millions as a function of the dollars peso price, S: a. Solve for the equilibrium exchange rate...
Study smarter with the SolutionInn App