Keep-or-Drop Decision Charlevoix Company produces three products: Torch, Elk, and Walloon. A segmented income statement follows:...
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Keep-or-Drop Decision Charlevoix Company produces three products: Torch, Elk, and Walloon. A segmented income statement follows: Sales revenue Less: Variable expenses Contribution margin Less direct fixed expenses: Depreciation Advertising Torch $1,280 $185 1,115 45 $165 $140 50 107,000 X 95 2. Should Petoskey keep or drop Walloon? Keep Elk $20 15 85 Walloon $40 Total $345 $1,810 276 1,436 $374 $69 12 Segment margin Direct fixed expenses consist of depreciation and advertising. All depreciation on the equipment is dedicated to the product lines. None of the equipment can be sold. Assume that each of the three products has a different marketing campaign whose advertising would remain if the associated product were dropped. Required: 76 77 $(19) 256 $41 1. Conceptual Connection: Estimate the impact on profit that would result from dropping Wallon. Enter amount in full, rather than in thousands. For example, "15000" rather than "15". Decrease Keep-or-Drop Decision Charlevoix Company produces three products: Torch, Elk, and Walloon. A segmented income statement follows: Sales revenue Less: Variable expenses Contribution margin Less direct fixed expenses: Depreciation Advertising Torch $1,280 $185 1,115 45 $165 $140 50 107,000 X 95 2. Should Petoskey keep or drop Walloon? Keep Elk $20 15 85 Walloon $40 Total $345 $1,810 276 1,436 $374 $69 12 Segment margin Direct fixed expenses consist of depreciation and advertising. All depreciation on the equipment is dedicated to the product lines. None of the equipment can be sold. Assume that each of the three products has a different marketing campaign whose advertising would remain if the associated product were dropped. Required: 76 77 $(19) 256 $41 1. Conceptual Connection: Estimate the impact on profit that would result from dropping Wallon. Enter amount in full, rather than in thousands. For example, "15000" rather than "15". Decrease
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Managerial Accounting The Cornerstone Of Business Decision Making
ISBN: 9780357715345
8th Edition
Authors: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
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