he 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)

he 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)

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 12MC: Youngstown Construction plans to discontinue its rooting segment. Last year, this segment generated...

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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…
The 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 decrease
The 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
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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 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 $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 increase
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?
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The following summarized data are shown in the projected income statement of Rachel Inc. for two of its product lines X and Y: Projected Income Statement Name of the product lines X Y Sales 370,000 190,000 Costs: Variable costs (230,000) (140,000) Fixed costs (70,000) (60,000) Total costs (300,000) (200,000) Income (loss) 70,000 (10,000) Management is considering shutting down the production and sale of Product Y. The shutdown would have no effect on the total fixed costs and on the sales of Product X. What would be the amount of expected change in profit that would result from the shutting down of Product Y? Group of answer choices Profit would be decreased by $50,000 Profit would be increased by $50,000 Profit would be decreased by $10,000 Profit would be increased by $10,000
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 a
Suppose Grainy Day is considering discontinuing its tasty loops product line. Assume that during the past year, the tasty loops' product line income statement showed the following: A B 1 Sales revenue $7,550,000 2 Less: Cost of goods sold 6,400,000 3 Gross profit 1,150,000 4 Less: Operating expenses 1,650,000 5 Operating income (loss) $(500,000) Fixed manufacturing overhead costs account for 40% of the cost of goods, while only 30% of the operating expenses are fixed. Since the tasty loops line is just one of the company's cereal operations, only $780,000 of direct fixed costs (the majority of which is advertising) will be eliminated if the product line is discontinued. The remainder of the fixed costs will still be incurred by the company. If the company decides to discontinue the product line, what will happen to the company's operating income? Should Grainy Day discontinue the tasty loops product line?

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bartleby, a Learneo, Inc. business

	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