Question
In: Finance
Segmented Income Statements, Product-Line Analysis Alard Company produces blenders and coffee makers. During the past year,...
Segmented Income Statements, Product-Line Analysis
Alard Company produces blenders and coffee makers. During the past year, the company produced and sold 65,000 blenders and 75,000 coffee makers. Fixed costs for Alard totaled $340,000, of which $184,000 can be avoided if the blenders are not produced and $142,500 can be avoided if the coffee makers are not produced. Revenue and variable cost information follows:
| Blenders | Coffee Makers | |
| Selling price per appliance | $24 | $29 |
| Variable expenses per appliance | 18 | 27 |
Required:
1. Prepare segmented income statements. Separate direct and common fixed costs. Enter all amounts as positive numbers.
| Alard Company | ||||
| Segmented Income Statement | ||||
| Blenders | Coffee Makers | Total | ||
| $ | $ | $ | ||
| $ | $ | $ | ||
| $ | $ | $ | ||
| $ | ||||
2. What would the effect be on Alard’s profit if the coffee maker line is dropped? The blender line?
If the coffee maker line is dropped, profits will by $, the segment margin. If the blender line is dropped, profits will by $.
3. What would the effect be on firm profits if an additional 10,000 blenders could be produced (using existing capacity) and sold for $21.50 on a special-order basis? Existing sales would be unaffected by the special order. Enter all amounts as positive numbers.
| Alard Company | ||||
| Segmented Income Statement | ||||
| Blenders | Coffee Makers | Total | ||
| $ | $ | $ | ||
| Contribution margin | $ | $ | $ | |
| Segment margin | $ | $ | $ | |
| $ | ||||
Expert Answer
- Anonymous answered this
Was this answer helpful?
0
1
3 answers
1-Segment income Statement
65000 untis 75000 untis TOTAL Details Blenders Coffe Makers Sales 1,560,000.00 2,175,000.00 3,735,000.00 Costs Fixed 340,000.00 Variable 1,170,000.00 2,025,000.00 3,195,000.00 Profit 390,000.00 150,000.00 200,000.00 2.
Only blenders,Coffee maker dropped 65000 untis Details Blenders Sales 1,560,000.00 Costs Fixed 197,500.00 Variable 1,170,000.00 Profit 192,500.00 3.
Only Coffee,blenders dropped 75000 untis Details Coffe Makers Sales 2,175,000.00 Costs Fixed 156,000.00 Variable 2,025,000.00 Profit (6,000.00) 4.Special order case with existng Capacity.
View comments (1)65000 untis+10,000 Unts 75000 untis TOTAL Details Blenders Coffe Makers Sales-Regular 1,560,000.00 2,175,000.00 3,735,000.00 Sales-Special order 215,000.00 - 215,000.00 Total Sales 1,775,000.00 2,175,000.00 3,950,000.00 Costs Fixed 340,000.00 Variable 1,350,000.00 2,025,000.00 3,375,000.00 Profit 425,000.00 150,000.00 235,000.00
Up next for you in Accounting
Weighted Average
Method, Unit Cost,
Valuing Inventories
Applegate Enterprises
produces premier
raspberry jam. Output is
measured in pints.
Applegate uses the
weighted average meth…
See answer
Understanding the
Relationship between
Cost Flows, Inventories,
and Cost of Goods Sold…
See answer
See more questions for subjects you study
Questions viewed by other students
Q:
AudioMart is a retailer of radios, stereos, and televisions. The store carries two portable sound systems that have radios, tape players, and speakers. System A, of slightly higher quality than System B, costs $19 more. With rare exceptions, the store also sells a headset when a system is sold. The headset can be used with either system. Variable-costing income statements for the...
A:
See answer
Post a question
Answers from our experts for your tough homework questions
Solutions
Expert Solution
| 1 | Segmented Income Statement | ||||||||
| Blenders | Coffee Makers | Total | |||||||
| a | Units sold | 65000 | 75000 | ||||||
| b | Unit Selling Price | $24 | $29 | ||||||
| c | Unit Variable cost | $18 | $27 | ||||||
| d=a*b | Sales Revenue | $1,560,000 | $2,175,000 | $3,735,000 | |||||
| e=a*c | Variable Cost | $1,170,000 | $2,025,000 | $3,195,000 | |||||
| f=d-e | Contribution margin | $390,000 | $150,000 | $540,000 | |||||
| g | Fixed Cost | $184,000 | $142,500 | $326,500 | |||||
| h | Un allocated common Fixed cost | $13,500 | (340000-184000-142500) | ||||||
| Income | $206,000 | $7,500 | $200,000 | ||||||
| Profit | |||||||||
| 2 | If the Coffee maker Line is dropped: | $192,500 | (200000-7500) | ||||||
| If the Blender Line is dropped: | ($6,000) | (200000-206000) | |||||||
| 3 | If additional 10,000 blenders are produced | ||||||||
| Additional Sales Revenue= | $215,000 | (10000*21.50 | |||||||
| Total Sales Revenue=215000+1560000 | $1,775,000 | ||||||||
| Additional Variable cost= | $180,000 | (10000*18) | |||||||
| Total Variable Cost=1170000+180000 | $1,350,000 | ||||||||
| Blenders | Coffee Makers | Total | |||||||
| Sales Revenue | $1,775,000 | $2,175,000 | $3,950,000 | ||||||
| Variable Cost | $1,350,000 | $2,025,000 | $3,375,000 | ||||||
| Contribution margin | $425,000 | $150,000 | $575,000 | ||||||
| Fixed Cost | $184,000 | $142,500 | $326,500 | ||||||
| Un allocated common Fixed cost | $13,500 | ||||||||
| Income | $241,000 | $7,500 | $235,000 | ||||||
jeff jeffy answered 2 years agoRelated Solutions
Question 1 SEGMENTED INCOME STATEMENTS, PRODUCT-LINE ANALYSIS (LO2) Walker Company produces blenders and coffeemakers. During the...
Question 1
SEGMENTED INCOME STATEMENTS, PRODUCT-LINE ANALYSIS
(LO2)
Walker Company produces blenders and coffeemakers. During the
past year, the company produced and sold 100,000 blenders and
25,000 coffeemakers. Fixed costs for Walker totalled $250,000, of
which $90,000 can be avoided if the blenders are not produced and
$45,000 can be avoided if the coffee makers are not produced.
Revenue and variable cost information follow:
Blenders Coffeemakers
Variable expenses per appliance $20
$43
Selling price per appliance
22
...
Alard Company produces blenders and coffee makers. During the past year, the company produced and sold...
Alard Company produces blenders and coffee makers. During the
past year, the company produced and sold 65,000 blenders and 75,000
coffee makers. Fixed costs for Alard totaled $340,000, of which
$184,000 can be avoided if the blenders are not produced and
$142,500 can be avoided if the coffee makers are not produced.
Revenue and variable cost information follows:
Blenders
Coffee Makers
Selling price per appliance
$24
$29
Variable expenses per appliance
18
27
Required:
1. Prepare segmented income statements.
Separate...
Income Statements Segmented by Territory Script, Inc., has two product lines. The September income statements of...
Income Statements Segmented by Territory
Script, Inc., has two product lines. The September income
statements of each product line and the company are as follows:
SCRIPT, INC.
Product Line and Company Income Statements
For Month of September
Pens
Pencils
Total
Sales
$25,000
$30,000
$55,000
Less variable expenses
(10,000)
(12,000)
(22,000)
Contribution margin
15,000
18,000
33,000
Less direct fixed expenses
(10,000)
(9,000)
(19,000)
Product margin
$5,000
$9,000
$14,000
Less common fixed expenses
(6,000)
Net income
$8,000
Pens and pencils are sold...
Income Statements Segmented by Territory Script, Inc., has two product lines. The September income statements of...
Income Statements Segmented by Territory
Script, Inc., has two product lines. The September income
statements of each product line and the company are as follows:
SCRIPT, INC.
Product Line and Company Income Statements
For Month of September
Pens
Pencils
Total
Sales
$25,000
$30,000
$55,000
Less variable expenses
(10,000)
(12,000)
(22,000)
Contribution margin
15,000
18,000
33,000
Less direct fixed expenses
(8,000)
(6,000)
(14,000)
Product margin
$7,000
$12,000
$19,000
Less common fixed expenses
(6,000)
Net income
$13,000
Pens and pencils are sold...
Differential Analysis for a Discontinued Product The condensed product-line income statement for Rhinebeck Company for the...
Differential Analysis for a Discontinued Product
The condensed product-line income statement for Rhinebeck
Company for the month of October is as follows:
Rhinebeck Company
Product-Line Income Statement
For the Month Ended October 31
Hats
Gloves
Mufflers
Sales
$65,700
$88,500
$27,100
Cost of goods sold
(25,300)
(32,000)
(14,700)
Gross profit
$40,400
$56,500
$12,400
Selling and administrative expenses
(29,200)
(35,700)
(16,200)
Operating income (loss)
$11,200
$20,800
$(3,800)
Fixed costs are 14% of the cost of goods sold and 35% of the
selling...
Four Finger Appliance Company manufactures small kitchen appliances. The product line consists of blenders and toaster...
Four Finger Appliance Company manufactures small kitchen
appliances. The product line consists of blenders and toaster
ovens. Four Finger Appliance presently uses the multiple production
department factory overhead rate method. The factory overhead is as
follows:
1
Assembly Department
$186,000.00
2
Test and Pack Department
120,000.00
3
Total
$306,000.00
The direct labor information for the production of 7,500 units
of each product is as follows:
Department
Assembly
Test and Pack
Blender
750 dlh
2,250 dlh
Toaster oven
2,250
750
Total...
Common-Size Income Statements and Horizontal Analysis Income statements for Mariners Corp. for the past two years...
Common-Size Income Statements and Horizontal Analysis
Income statements for Mariners Corp. for the past two years are
as follows:
(amounts in thousands
of dollars)
2017
2016
Sales revenue
$60,000
$50,000
Cost of goods sold
42,000
30,000
Gross profit
$18,000
$20,000
Selling and administrative expense
9,000
5,000
Operating income
$9,000
$15,000
Interest expense
2,000
2,000
Income before tax
$7,000
$13,000
Income tax expense
2,000
4,000
Net income
$5,000
$9,000
Required:
1. Using the format in Example 13-5, prepare
common-size comparative income...
Common-Size Income Statements and Horizontal Analysis Income statements for Mariners Corp. for the past two years...
Common-Size Income Statements and Horizontal Analysis
Income statements for Mariners Corp. for the past two years are
as follows:
(amounts in thousands
of dollars)
2017
2016
Sales revenue
$60,000
$50,000
Cost of goods sold
42,000
30,000
Gross profit
$18,000
$20,000
Selling and administrative expense
9,000
5,000
Operating income
$9,000
$15,000
Interest expense
2,000
2,000
Income before tax
$7,000
$13,000
Income tax expense
2,000
4,000
Net income
$5,000
$9,000
Required:
1. Using the format in Example 13-5, prepare
common-size comparative income...
Common-Size Income Statements and Horizontal Analysis Income statements for Mariners Corp. for the past two years...
Common-Size Income Statements and Horizontal Analysis
Income statements for Mariners Corp. for the past two years are
as follows:
(amounts in thousands
of dollars)
2017
2016
Sales revenue
$60,000
$50,000
Cost of goods sold
42,000
30,000
Gross profit
$18,000
$20,000
Selling and administrative expense
9,000
5,000
Operating income
$9,000
$15,000
Interest expense
2,000
2,000
Income before tax
$7,000
$13,000
Income tax expense
2,000
4,000
Net income
$5,000
$9,000
Required:
1. Using the format in Example 13-5, prepare
common-size comparative income...
Differential Analysis for a Discontinued Product The condensed product-line income statement for Dish N’ Dat Company...
Differential Analysis for a Discontinued Product
The condensed product-line income statement for Dish N’ Dat
Company for the month of March is as follows:
Dish N’ Dat Company
Product-Line Income Statement
For the Month Ended March 31
Bowls
Plates
Cups
Sales
$65,000
$90,000
$27,300
Cost of goods sold
27,300
31,900
14,100
Gross profit
$37,700
$58,100
$13,200
Selling and administrative expenses
30,100
35,200
15,300
Income from operations
$7,600
$22,900
$(2,100)
Fixed costs are 13% of the cost of goods sold and...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- MARGI sells different types of wine. Customers place orders to the most popular “Summer Wine” at...
- A firm's bonds have a maturity of 8 years with a $1,000 face value, have an...
- Naive reasoning suggests that a string theory vacuum with cosmological constant Lambda1 is always unstable as...
- I. Design and code a class Rectangle that has the following properties: Two private members double...
- A bond has a $1,000 par value, 10 years to maturity, and an 8% annual coupon...
- The following are the monthly rates of return for Madison Cookies and for Sophie Electric during...
- 1.) Think back to August 6, 1945. The United States has just dropped an atomic weapon...
ADVERTISEMENT