is cengageNowv2[Online × Accounting question ICX -> d v2.cengagenow.com/ilrn/ta
ID: 2595436 • Letter: I
Question
is cengageNowv2[Online × Accounting question ICX -> d v2.cengagenow.com/ilrn/ta takeAssignmentMain.do?invoker= assignments&t; n Locator= assignment-take&inprogress-false; Chapter 10 Assignment Calculator Differential Analyzis for a Discontinued Product The condensed product-line income tatement for Dish N' D : Company for the month of Marchas follows Dish N' Dat Company Product-Line Income Statement For the Month Ended March 31 plates 90,000 32,800 57,200 Cups 27,700 13,900 $13,800 salea Cost of geods sold Gross proft Selling and administretive expenses ncome from operations Fixed costs are 15% of the co t of goods sold and 36% of the se ling and admino rative expenses. Dtsh N Dat assumes that fixed costs would not be material y affected the Cups ine were discontinued a. Propare a dffarantial analysis dated March 31 to dararmine if Cupa should be continued (Altemative 1) or discontinued (A ternatve 2). If an amount s zaro, enter zaro ".Usa a minus aign to indicato a loss 25.400 $40,100 28.500 $11.600 $22.800 900) Differential Anslysis Continue Cups (Alt. 1) or Discontinue Cups (Alt. 2) Coninue Cupe (Atamativ) DiEconcnua Cp(Aarnative 2) Dfferantal Effect on Incoma Altamaive 2) Verisble cost of goods sold Varisble sling and sdmin, expence Fixed coets Income (Loss b. should tha Cups Ina be retained? Check My Work 2 more Check My Work uses remaining Previous Next signment Score: 17.35% All work saved. Save and Exit Submit Assignment for Erading O Type here to search 12/12/2017Explanation / Answer
Solution:
From above differential analysis we can say that if we will discontinue cup line then our income will decreased by $6,477. Therefore Cups line should be retained.
Product Line Income Statement - Marginal Costing Particulars Bowls Plates Cups Total Sales (A) $65,500.00 $90,000.00 $27,700.00 $183,200.00 Variable Cost: Variable cost of goods sold (85% of COGS) $21,590.00 $27,880.00 $11,815.00 $61,285.00 Variable Selling Expenses (64% of Selling expenses) $18,240.00 $22,016.00 $9,408.00 $49,664.00 Total Variable Cost (B) $39,830.00 $49,896.00 $21,223.00 $110,949.00 Contribution (C = A-B) $25,670.00 $40,104.00 $6,477.00 $72,251.00 Fixed Cost: Fixed cost of goods sold (15% of COGS) $3,810.00 $4,920.00 $2,085.00 $10,815.00 Fixed Selling Expenses (36% of Selling expenses) $10,260.00 $12,384.00 $5,292.00 $27,936.00 Total Fixed Cost (D) $14,070.00 $17,304.00 $7,377.00 $38,751.00 Income (E = C-D) $11,600.00 $22,800.00 -$900.00 $33,500.00Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.