Topic: Short-term decision making Jack Office Ltd makes and sells two lines of office chairs: standard...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Topic: Short-term decision making Jack Office Ltd makes and sells two lines of office chairs: standard and deluxe. The company has experienced operating losses during the last two months. Jack Office is considering dropping one of the office chair product lines. Last month's financial data is below. Fixed costs are allocated to product lines based on percent of retail store space; fixed costs are unavoidable and will not change if one product line is dropped. Sales Revenue Variable Expenses Contribution Margin Fixed Expenses Operating Income/(Loss) Standard $35,000 $15,000 $20,000 $16,000 $4,000 Deluxe $65,000 $55,000 $10,000 $27,000 $(17,000) Required: 1. Should Jack Office drop the Deluxe Chair product? Why or why not? 2. Assume now that Jack Office can avoid $24,000 fixed expenses if it drops Deluxe Chairs. What is your decision? Topic: Short-term decision making Jack Office Ltd makes and sells two lines of office chairs: standard and deluxe. The company has experienced operating losses during the last two months. Jack Office is considering dropping one of the office chair product lines. Last month's financial data is below. Fixed costs are allocated to product lines based on percent of retail store space; fixed costs are unavoidable and will not change if one product line is dropped. Sales Revenue Variable Expenses Contribution Margin Fixed Expenses Operating Income/(Loss) Standard $35,000 $15,000 $20,000 $16,000 $4,000 Deluxe $65,000 $55,000 $10,000 $27,000 $(17,000) Required: 1. Should Jack Office drop the Deluxe Chair product? Why or why not? 2. Assume now that Jack Office can avoid $24,000 fixed expenses if it drops Deluxe Chairs. What is your decision?
Expert Answer:
Answer rating: 100% (QA)
Here is my analysis of the shortterm decision facing Jack Office Ltd 1 Jack Office should not drop t... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0071339476
Volume 1, 6th Edition
Authors: Beechy Thomas, Conrod Joan, Farrell Elizabeth, McLeod Dick I
Posted Date:
Students also viewed these accounting questions
-
The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-5. Ivan's grandfather died and left a portfolio of municipal bonds. In 2012, they pay Ivan...
-
The following table summarizes the operating results for Bene Petits first year of operations: Bene Petit First year operating data: Single (1 serving) Dual (2 servings) Family (4 servings) Total...
-
Using quarterly data for 10 years, the regression results are given in the following table where CAR = number of new car sales per thousand population, PRICE = new car price index, INC= per-capita...
-
Write a short essay on how financial futures might reduce systemic risk, and how financial futures might increase systemic risk within financial markets.
-
Number of conduction electrons in a Fermi sphere of known radius. In a simple cubic quasi-free electron metal, the spherical Fermi surface just touches the first Brillouin zone. Calculate the number...
-
A snow-cone machine at an icecream shop costs \(\$ 15,000\). The machine is expected to generate profits of \(\$ 2,500\) each year of its 10-year useful life. At the end of the 10 years, the machine...
-
Tolbert Enterprises Inc. manufactures bathroom fixtures. The stockholders equity accounts of Tolbert Enterprises Inc., with balances on January 1,2012, are as follows: Common Stock , $10 stated value...
-
Define and comprehend the concept of data base and its types. 7. Briefly discuss Database Management Systems. 8. Enumerate and briefly discuss the key concepts of Database Management Systems....
-
Reconsider the Lockhead Aircraft Co. problem presented in Problem 16.15 regarding a project to develop a new fighter airplane for the U.S. Air Force. Management is extremely concerned that current...
-
While many bricks-and-mortar retailers are developing multichannel marketing systems by adding online options to their distribution strategies, one Canadian online retailer is moving in the other...
-
Suppose 3 people have to produce a ranking of 4 choices A, B, C and D. Their preferences are: B>C>D>A, C>D>A>B, D>A>C>B Which voting system would satisfy the principles of Unanimity and Independence...
-
Who sets the accounting standards in Australia? In South Africa? What similarities and differences do you observe between the two sets of financial statements? focus on the application of accounting...
-
On May 3, you make a $1300 sale to a customer on account. The T-Accounts shown represent the activity in the Accounts Receivable and Sales Revenue accounts for the month of May. Accounts Receivable...
-
On October 1, 2020, the Burgee's Food Corporation purchased three units of baking by issuing a four-year, 9% promissory note with face value of P2,591,760. The note and accrued interest payable in...
-
Peter, 65, and Audrey, 62, had medical expenses in 2023 of $12,000, paid eligible long-term care insurance premiums of $4,000, and paid $20,000 for Audrey's facelift. If they had an adjusted gross...
-
Which of the following would usually be found on a job cost sheet under a normal cost system? Estimated manufacturing overhead cos Yes No Yes No a. Choice B b. Choice C C. Choice D d. Choice A A) B)...
-
Explain what is meant by vicarious liability and when it is available?
-
Why is internal control over cash so important? What is a major component of internal control?
-
If a contract requires cash of $ 10 million to be paid in five years time, will $ 10 million of sale revenue be recognized? Explain.
-
What is the difference between public and private companies? What are the accounting implications of this difference in Canada?
-
For a sample of data where n = 4 given below: a. Calculate the mean, median, and mode. b. Calculate the range, variance, standard deviation, and coefficient of variation. c. Calculate the Z scores....
-
For a sample of data where n = 8 given below: a. Calculate the mean, median, and mode. b. Calculate the range, variance, standard deviation, and coefficient of variation. c. Calculate the Z score....
-
The quality inspection team at a plant for medium size vehicles intends to compare the acceptable thickness of two types of brake pads. The expected thickness of the brake pads is 12 milli meters. A...
Study smarter with the SolutionInn App