Shown below is a segmented income statement for Jin Juice Company's flavored milk product lines: Avocado...

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Shown below is a segmented income statement for Jin Juice Company's flavored milk product lines: Avocado Strawberry Orange Total Sales revenue $800,000 $650,000 $550,000 S2,000,000 Less: Variable expenses (600,000) (400,000) (500,000) (S1,500,000) Contribution margin 200,000 250,000 50,000 S500,000 Less: direct fixed expenses: Machine rent (15,000) (25,000) (20,000) (60,000) Supervision (35,000) (20,000) (35,000) (90,000) Depreciation (75,000) (35,000) (35,000) (145,000) Segment margin 75,000 170,000 (40,000) 205,000 The orange juice line has a contribution margin of $50,000 (sales of $550,000 minus total variable costs of $500,000). All variable costs are relevant. Relevant fixed costs associated with this line include $20,000 in machine rent and $35,000 in supervision salaries. Required: 1. List the alternatives being considered with respect to the orange juice product line. 2. List the relevant benefits and costs for each alternative. 3. Which alternative is more cost effective and by how much? Shown below is a segmented income statement for Jin Juice Company's flavored milk product lines: Avocado Strawberry Orange Total Sales revenue $800,000 $650,000 $550,000 S2,000,000 Less: Variable expenses (600,000) (400,000) (500,000) (S1,500,000) Contribution margin 200,000 250,000 50,000 S500,000 Less: direct fixed expenses: Machine rent (15,000) (25,000) (20,000) (60,000) Supervision (35,000) (20,000) (35,000) (90,000) Depreciation (75,000) (35,000) (35,000) (145,000) Segment margin 75,000 170,000 (40,000) 205,000 The orange juice line has a contribution margin of $50,000 (sales of $550,000 minus total variable costs of $500,000). All variable costs are relevant. Relevant fixed costs associated with this line include $20,000 in machine rent and $35,000 in supervision salaries. Required: 1. List the alternatives being considered with respect to the orange juice product line. 2. List the relevant benefits and costs for each alternative. 3. Which alternative is more cost effective and by how much?

Answer rating: 100% (QA)

Answer Explanation 1 There are 2 alternatives with resp... View the full answer