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Product | ||
T | U | |
Sales | $680,000 | $320,000 |
Costs: | ||
Variable costs | $540,000 | $220,000 |
Fixed costs | 145,000 | 40,000 |
Total costs | $685,000 | $260,000 |
Income (loss) | $ (5,000) | $ 60,000 |
Management is considering the discontinuance of the manufacture and sale of Product T at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Product U. What is the amount of change in net income for the current year that will result from the discontinuance of Product T?
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- Youngstown Construction plans to discontinue its rooting segment. Last year, this segment generated a contribution margin of $65.000 and incurred $70.000 in fixed costs. Discontinuing the segment will allow the company to avoid half of the fixed costs. What effect is expected to occur to the companys overall profit? A. a decrease of $5,000 B. a decrease of $30,000 C. a decrease of $5,000 D. an increase of $30,000The condensed income statement for Monroe Corp. for the past year is as follows: Product C Sales $720,000 $320,000 Costs: Variable costs $610,000 $ 220,000 Fixed costs 120,000 40,000 Total costs $730,000 $260,000 Income (loss) $ (10,000) $ 60,000 Management is considering the discontinuance of the manufacture and sale of Product B at the beginning of the current year. The discontinuance would have no effect on the total fixed costs'and expenses or on the sales of Product C. What is the amount of change in net income for the current year that will result from the discontinuance of Product B? O $10,000 increase O $110,000 decrease O $110,000 increase O $10,000 decreaseThe condensed income statement for Hayden Corp. for the past year is as follows: Product T U Sales $ 680,000 $320,000 Costs: Variable costs $(540,000) $(220,000) Fixed costs (145,000) (40,000) Total costs $(685,000) $(260,000) Income (loss) $ (5,000) $ 60,000 Management is considering the discontinuance of the manufacture and sale of Product T at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Product U. The amount of change in profit for the current year that will result from the discontinuance of Product T is a
- The condensed income statement for a Hayden corp. For the past year Product T. U Sales: $680,000. $320,000 Costs: Variable costs: 540,000. 220,000 Fixed costs: 145,000. 40,000 Total costs: $685,000 . $260,000 Income loss: (f5,000) $60,000 Mangement is considering the discontinuance of the manufacture and sale of product T at the beginning of the current year. The discontinuance will have no effect on the total fixed costs and expenses or the sales of product U. What is the amount of change in net income for the current year that will result from the discontinuance of product T?The condensed income statement for a business for the past year is as follows: Product A Z Sales $660,000 $320,000 Less variable costs 540,000 220,000 Contribution margin $ 120,000 $100,000 Less fixed costs 145,000 40,000 Income (loss) from operations $ (25,000) $ 60,000 Management is considering the discontinuance of the manufacture and sale of Product A at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Product Z. What is the amount of change in net income for the current year that will result from the discontinuance of Product A (amount and increase or decrease)?The condensed income statement for a business for the past year is as follows: Product T Product U Sales $500,000 $750,000 Less variable costs 400,000 550,000 Contribution margin 100,000 200,000 Less fixed costs 135,000 120,000 Income (loss) from operations $(35,000) $ 80,000 Management is considering discontinuing the manufacture and sale of Product T starting at the beginning of the current year. Discontinuing T will have no effect on total fixed costs or on the sales and expenses of Product U. What…
- Below is the condensed income statement for Jay Tools for the past year: Product T1 T2 Sales $340,000 $160,000 Costs: Variable costs $270,000 $110,000 Fixed costs 80,000 20,000 Total costs $350,000 $130,000 Income (loss) $(10,000) $ 30,000 Since product T1 is not giving profit, Jay is considering discontinuing product T1 at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Product T2. What is the amount of change in net income for the current year that will result from the discontinuance of Product T1? Select one: a. $70,000 increase. b. $50,000 increase. c. $50,000 decrease. d. $70,000 decrease. e. None of the above answers is correct.The condensed income statement for a Fletcher Inc. for the past year is as follows: Product F G H Total Sales $300,000 $210,000 $340,000 $850,000 Costs: Variable costs $180,000 $180,000 $220,000 $580,000 Fixed costs 50,000 50,000 40,000 140,000 Total costs $230,000 $230,000 $260,000 $720,000 Income (loss) $ 70,000 $(20,000) $ 80,000 $130,000 Management is considering the discontinuance of the manufacture and sale of Product G at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Products F and H. What is the amount of change in net income for the current year that will result from the discontinuance of Product G? a.$30,000 decrease b.$30,000 increase c.$20,000 decrease d.$20,000 increaseThe income statement of product Hammer, one of the several product being sold Tony Companyshows a sales revenue of P184,000 and a total cost and expenses amounting to P211,600. Fixedcosts amounted to P86,480, P49,680 of which are unavoidable regardless of whether the product willbe dropped or not. a. What is the product elimination point (shutdown) point (round to nearest hundred thousand)? b. If in the next year, it is estimated that the revenue from Product Hammer would only be P100,000,should the company continue or drop the product line?
- The condensed income statement for a Fletcher Inc. for the past year is as follows: Product F G H Total Sales $300,000 $210,000 $340,000 $850,000 Costs: Variable costs $(180,000) $(180,000) $(220,000) $(590,000) Fixed costs (50,000) (50,000) (40,000) (140,000) Total costs $(230,000) $(230,000) $(260,000) $(730,000) Income (loss) $70,000 $(20,000) $80,000 $120,000 Management is considering the discontinuance of the manufacture and sale of Product G at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Products F and H. The amount of change in profit for the current year that will result from the discontinuance of Product G is aThe condensed income statement for a Fletcher Inc. for the past year is as follows: Product F G H Total Sales $300,000 $210,000 $340,000 $850,000 Costs: Variable costs $(180,000) $(180,000) $(220,000) $(580,000) Fixed costs (50,000) (50,000) (40,000) (140,000) Total costs $(230,000) $(230,000) $(260,000) $(720,000) Income (loss) $70,000 $(20,000) $80,000 $130,000 Management is considering the discontinuance of the manufacture and sale of Product G at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Products F and H. The amount of change in profit for the current year that will result from the discontinuance of Product G is a a.$20,000 decrease b.$30,000 increase c.$20,000 increase d.$30,000 decreaseManagement and accounting Spencer Company is considering closing one of its product lines. Current data on the product line is as follows:DescriptionSales revenue $20,000Variable costs$17,000Direct avoidable fxed costs $7,000Indirect allocated fxed costs $5,000Net Income Loss on the product line ($9,000) *The direct avoidable fxed costs will be eliminated if the product line is closed. **The indirect allocated fxed costs will remain the same whether the product line is continued or closed.In addition, if Spencer closes the product line, Spencer can sublease its production facility to another company and earn subleaserevenue of $2,700 per year. Assume that Spencer decides to discontinue this product line. By how much will overall company net income change? Company net income will INCREASE by $9000Company net income will DECREASE by $9000Company net income will DECREASE by $6700Company net income will INCREASE by $6700