Question

In: Accounting

the segmented income statement for XYZ Company for the year ended December 31, 2016, follows: XYZ...

the segmented income statement for XYZ Company for the year ended December 31, 2016, follows: XYZ COMPANY Segmented Income Statement For the Year Ended December 31, 2016 Total Company Product A Product B Product C Sales $ 592,000 $ 297,000 $ 118,000 $ 177,000 Variable expenses 273,000 154,000 49,000 70,000 Contribution margin $ 319,000 $ 143,000 $ 69,000 $ 107,000 Fixed expenses 283,000 165,000 47,000 71,000 Operating income $ 36,000 $ (22,000 ) $ 22,000 $ 36,000 The company is concerned about the performance of product A, and you have been asked to analyze the situation and recommend to the president whether to continue or discontinue the product. During your investigation, you discover that certain fixed expenses are traceable directly to each product line as indicated here: Total Company Product A Product B Product C Direct fixed expenses $102,000 $74,000 $9,000 $19,000 The remaining fixed expenses are considered to be corporate-wide expenses that have been allocated to each product line based on sales revenue. Required: What will be the effect of the decision to discontinue product A on operating income, assume that product A is discontinued. Prepare a segmented income statement for the remaining products. Allocate corporate-wide fixed expenses as described, round intermediate calculations to 2 decimal places, Starting with the segmented income statement, use the information you discovered during your investigation to present a more appropriately designed segmented income statement.

Solutions

Expert Solution


Related Solutions

The segmented income statement for XYZ Company for the year ended December 31, 2016, follows: XYZ...
The segmented income statement for XYZ Company for the year ended December 31, 2016, follows: XYZ COMPANY Segmented Income Statement For the Year Ended December 31, 2016 Total Company Product A Product B Product C Sales $ 610,000 $ 305,000   $ 118,000 $ 187,000 Vari. expenses 273,000 146,000 53,000 74,000 Cont. margin $ 337,000 $ 159,000 $ 65,000 $ 113,000 Fixed expenses 283,000 164,000 49,000 70,000 Oper. income $ 54,000 $ (5,000 ) $ 16,000 $ 43,000 The company is...
The income statement for Delta-tec Inc. for the year ended December 31, 2016, was as follows
The income statement for Delta-tec Inc. for the year ended December 31, 2016, was as follows: Delta-tec Inc. Income Statement (selected items) For the Year Ended December 31, 2016   1 Income from operations $299,700.00 2 Gain on sale of investments 17,800.00 3 Less unrealized loss on trading investments 72,500.00 4 Net income $245,000.00   The balance sheet dated December 31, 2015, showed a Retained Earnings balance of $825,000. During 2016, the company purchased trading investments for the first time...
Pinnacle Manufacturing Company Income Statement For the Year ended December 31 2016 2015 2014      ...
Pinnacle Manufacturing Company Income Statement For the Year ended December 31 2016 2015 2014       Net sales $150,737,628 $148,586,037 $144,686,413 Cost of goods sold 109,284,780 106,255,499 101,988,165      Gross profit 41,452,848 42,330,538 42,698,248 Operating expenses 37,177,738 38,133,969 37,241,108      Income from operations 4,275,110 4,196,569 5,457,140 Other revenues and gains — — — Other expenses and losses 2,181,948 2,299,217 2,397,953 Income before income tax   2,093,162 1,897,352 3,059,187     Income tax 883,437 858,941 1,341,536 Net income for the year   1,209,725 1,038,411...
Rembrandt Paint Company had the following income statement items for the year ended December 31, 2016...
Rembrandt Paint Company had the following income statement items for the year ended December 31, 2016 ($ in 000s):   Net sales $ 34,000   Cost of goods sold $ 18,500   Interest income 360   Selling and administrative expenses 4,100   Interest expense 670   Restructuring costs 2,400       In addition, during the year the company completed the disposal of its plastics business and incurred a loss from operations of $3.2 million and a gain on disposal of the component’s assets of $5.2 million. 600,000 shares...
Rembrandt Paint Company had the following income statement items for the year ended December 31, 2016...
Rembrandt Paint Company had the following income statement items for the year ended December 31, 2016 ($ in 000s):   Net sales $ 20,000   Cost of goods sold $ 11,500   Interest income 220   Selling and administrative expenses 2,700   Interest expense 390   Restructuring costs 1,000       In addition, during the year the company completed the disposal of its plastics business and incurred a loss from operations of $1.8 million and a gain on disposal of the component’s assets of $2.4 million. 600,000 shares...
Rembrandt Paint Company had the following income statement items for the year ended December 31, 2016...
Rembrandt Paint Company had the following income statement items for the year ended December 31, 2016 ($ in 000s):   Net sales $ 20,000   Cost of goods sold $ 11,500   Interest income 220   Selling and administrative expenses 2,700   Interest expense 390   Restructuring costs 1,000       In addition, during the year the company completed the disposal of its plastics business and incurred a loss from operations of $1.8 million and a gain on disposal of the component’s assets of $2.4 million. 600,000 shares...
Given is the Income Statement for the year ended December 31, 20XX, Statement of Retained Earnings for the year ended December 31, 20XX
Given is the Income Statement for the year ended December 31, 20XX, Statement of Retained Earnings for the year ended December 31, 20XX and Comparative Balance Sheets for 20XW and 20XX of Maris Corporation: Maris CorporationIncome StatementYear Ended December 31, 20XX  Sales$3,800,000  Cost of goods sold2,250,000        Gross profits1,550,000  Selling and administrative expense540,000  Amortization expense200,000        Operating income810,000  Interest expense43,000        Earnings before taxes767,000  Taxes440,000        Earnings after taxes327,000    Preferred stock dividends30,000     Earnings available to common shareholders$297,000    Shares outstanding198,000  Earnings per share$1.50   Statement of...
Income statement data for Winthrop Company for two recent years ended December 31 are as follows:...
Income statement data for Winthrop Company for two recent years ended December 31 are as follows: 1 Current Year Previous Year 2 Sales $1,938,000.00 $1,700,000.00 3 Cost of goods sold 1,608,200.00 1,462,000.00 4 Gross profit $329,800.00 $238,000.00 5 Selling expenses $67,800.00 $60,000.00 6 Administrative expenses 49,280.00 44,000.00 7 Total operating expenses $117,080.00 $104,000.00 8 Income before income tax $212,720.00 $134,000.00 9 Income tax expense 13,090.00 8,500.00 10 Net income $199,630.00 $125,500.00 A. Prepare a comparative income statement with horizontal analysis,...
Income statement data for Winthrop Company for two recent years ended December 31, are as follows:...
Income statement data for Winthrop Company for two recent years ended December 31, are as follows:     Current Year     Previous Year Sales $799,100 $610,000 Cost of goods sold 665,600 520,000 Gross profit $133,500 $90,000 Selling expenses $39,930 $33,000 Administrative expenses 36,120 28,000 Total operating expenses $76,050 $61,000 Income before income tax $57,450 $29,000 Income tax expenses 23,000 11,600 Net income $34,450 $17,400 a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared...
Income statement data for Winthrop Company for two recent years ended December 31, are as follows:...
Income statement data for Winthrop Company for two recent years ended December 31, are as follows:     Current Year     Previous Year Sales $372,000 $310,000 Cost of goods sold 318,600 270,000 Gross profit $53,400 $40,000 Selling expenses $14,300 $13,000 Administrative expenses 12,980 11,000 Total operating expenses $27,280 $24,000 Income before income tax $26,120 $16,000 Income tax expenses 10,400 6,400 Net income $15,720 $9,600 a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT