Salty Pretzels Corporation has three product lines, Cinnamon, Chocolate, and Sea salt. The following information is...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Salty Pretzels Corporation has three product lines, Cinnamon, Chocolate, and Sea salt. The following information is available: Cinnamon Chocolate Sea Salt Sales $100,000 $90,000 $88,000 76,000 $24,000 Variable costs 48,000 79,000 Contribution margin $42,000 $9,000 Fixed costs: 9,000 6,000 $9,000 Avoidable 18,000 3,000 Unavoidable 9,000 9,700 Operating income $15,000 $(3,700) Requirements: b. If the Sea salt product line is discontinued and the space formerly used to produce the Sea salt product line is rented for $15,000 per year, will the operating income increase or decrease and by how much? Show your calculations. Salty Pretzels Corporation has three product lines, Cinnamon, Chocolate, and Sea salt. The following information is available: Cinnamon Chocolate Sea Salt Sales $100,000 $90,000 $88,000 76,000 $24,000 Variable costs 48,000 79,000 Contribution margin $42,000 $9,000 Fixed costs: 9,000 6,000 $9,000 Avoidable 18,000 3,000 Unavoidable 9,000 9,700 Operating income $15,000 $(3,700) Requirements: b. If the Sea salt product line is discontinued and the space formerly used to produce the Sea salt product line is rented for $15,000 per year, will the operating income increase or decrease and by how much? Show your calculations.
Expert Answer:
Answer rating: 100% (QA)
Operating profit will increase by 9000 Cinnamon Chocolate Sea salt Total Sales 1... View the full answer
Related Book For
Fundamental financial accounting concepts
ISBN: 978-0078025365
8th edition
Authors: Thomas P. Edmonds, Frances M. Mcnair, Philip R. Olds, Edward
Posted Date:
Students also viewed these accounting questions
-
The following information is available for Campus Book Sales sales on account and accounts receivable: Accounts receivable balance, January 1, 2013 ....... $ 92,500 Allowance for doubtful accounts,...
-
The following information is available for Fess Company: Credit sales during 2014 $150,000 Allowance for doubtful accounts at December 31, 2013 1,450 Accounts receivable deemed worthless and written...
-
The following information is available for Gerard Corporation (a) Compute earnings per share for 2012 and 2011 for Gerard, and comment on the change. Gerard??s primary competitor, Thorpe Corporation,...
-
/* FILE: FLIX2YOU_data-load.txt */ /* Script to populate tables for FLIX2YOU .. current schema before revision */ /* Written by Gary Heberling on July 2, 2012 */ /* For IST210 world campus Penn State...
-
Samantha is the production manager for Wentworth Company. Each year, she is involved in the companys budgeting process. Company President Leslie has asked Samantha to submit the facilitys budgeted...
-
Michael is deciding which gym membership to buy. Points (2, 112) and (4, 174) give the cost of gym membership at one gym after two and four months. Points (1, 62) and (3, 102) give the cost of gym...
-
Construct a relative frequency histogram using the frequency distribution in Exercise 17. Then determine which class has the greatest relative frequency and which has the least relative frequency....
-
The balance sheet of Watson Company as of December 31, 20X1, follows. The following information has been extracted from the firm's accounting records: All sales are made on account at $20 per unit....
-
1. From the joint distribution defined by the graphical model, determine if the conditional independence holds: ALL FIE, B, and provide brief explanation (5 points). 2. Given an undirected chain...
-
Badlands, Inc. manufactures a household fan that sells for $40 per unit. All sales are on account, with 40 percent of sales collected in the month of sale and 60 percent collected in the following...
-
(c) The following are extracts from the income statement of ABC Ltd. K 72,000 40,000 32,000 20,000 12,000 3,000 9,000 3,000 6,000 Sales Variable costs Contribution Fixed cost Operating profit...
-
Leo Lothario was having an affair with Lucy Slarom, a woman separated from her husband, Joe. One night while Lothario and Lucy were playing tennis in her backyard, Joe appeared on the scene. Lothario...
-
An intoxicated driver recklessly drove his vehicle into a car being driven by a woman who was seven months pregnant. As a result of the accident, the womans baby was born prematurely, suffered from...
-
To what extent is the English common law significant in contemporary American criminal law?
-
Several college freshmen enter the deans private office and remain there for several hours. They refuse to let the dean leave until he yields to their demands to allow unrestricted visitation in all...
-
What limitations do courts impose on police in the use of deception in interrogations of suspects?
-
1. How would you evaluate the argument between Brandon and Gabriella? Are either or both of them being exploited? If so, how? 2. How does this discussion illustrate the concepts of power, ideology,...
-
A survey of 70 college freshmen asked whether students planned to take biology, chemistry, or physics during their first year. Use the diagram to answer each question. How many of the surveyed...
-
The Cutting Edge (TCE) is one of the worlds largest lawn mower distributors. TCE is concerned about maintaining an adequate supply of the economy-line mowers that it sells in its stores. TCE...
-
A partial amortization schedule for a 10-year note payable issued on January 1, 2013, is shown below: Required a. Using a financial statements model like the one shown here, record the appropriate...
-
Ellison Co. issued a $50,000 face value discount note to National Bank on July 1, 2013. The note had a 10 percent discount rate and a one-year term to maturity. Required Prepare general journal...
-
Palm Ltd acquired a business that used a large number of assets that worked in combination to produce a product saleable in offshore markets. The assets of the business include a computer program...
-
Cellar Ltd is in the business of bottling wine, particularly for small wineries that cannot afford sophisticated technical equipment and prefer to concentrate on the growing of the grapes. The white...
-
A response to the IASB's Exposure Draft 2009/5 Fair Value Measurements, stated: In practical terms we doubt that an asset measured on any other basis than its intended use will provide more useful...
Study smarter with the SolutionInn App