Business, 27.12.2020 15:50 nika0001

Novak Company has four operating divisions. During the first quarter of 2017, the company reported aggregate income from operations of $200,300 and the following divisional results. Division
I II III IV
Sales $253,000 $198,000 $495,000 $447,000
Cost of goods sold 198,000 190,000 303,000 254,000
Selling and administrative expenses 74,700 65,000 56,000 52,000
Income (loss) from operations $(19,700) $(57,000) $136,000 $141,000

Analysis reveals the following percentages of variable costs in each division.

I II III IV
Cost of goods sold 68% 90% 79% 75%
Selling and administrative expenses 37 60 49 61

Discontinuance of any division would save 50% of the fixed costs and expenses for that division. Top management is very concerned about the unprofitable divisions (I and II). Consensus is that one or both of the divisions should be discontinued.

Required:
Prepare a columnar condensed income statement for Novak Company, assuming Division II is eliminated. Division II’s unavoidable fixed costs are allocated equally to the continuing divisions.

Answers: 2

Show answers

Another question on Business

Business, 22.06.2019 02:00

Greater concern for innovation and quality has shifted the job trend to using more broadly defined jobs. t/f

Answers: 1

Answer

Business, 22.06.2019 03:20

Yael decides that she no longer enjoys her job, and she quits to open a gluten-free, dairy-free kosher bakery. she pays a monthly rent for her store of $2,000. her labor costs for one month are $4,500, and she spends $6,000 a month on nut flours, sugar, and other supplies. yael was earning $2,500 a month working as a bank teller. these are her only costs. her monthly revenue is $14,000. which of the following statements about yael’s costs and profit are correct? correct answer(s) an accountant would say she is earning a monthly profit of $1,500. her implicit costs are $2,500 a month. an economist would tell her that she is experiencing a loss. her total costs are $12,500 a month. her explicit costs include the labor, rent, and supplies for her store. her economic profit is $1,500 a month.

Answers: 3

Answer

Business, 22.06.2019 08:20

Suppose that jim plans to borrow money for an education at texas a& m university. jim will need to borrow $25,000 at the end of each year for the next five years (total=$125,000). jim wishes his parents could pay for his education but they can’t. at least, he qualifies for government loans with a reduced interest rate while he is in school. he has a special arrangement with aggiebank to lend him the money at a subsidized rate of 1% over five years without having to make a payment until the end of the fifth year. however, at the end of the fifth year, jim agrees to pay off the loan by borrowing from longhorn bank. longhorn bank will lend him the money he needs at an annual interest rate of 6%. jim agrees to pay back the longhorn bank with 20 annual payments and the payments will be uniform (equal annual payments including principal and interest). (i) calculate how much money jim has to borrow at the end of 5 years to pay off the loan with aggiebank. a. $121,336 b. $127,525 c. $125,000 d. $102,020 e. none of the above

Answers: 2

Answer

Business, 22.06.2019 08:30

Sonic corp. manufactures ski and snowboarding equipment. it has estimated that this year there will be substantial growth in its sales during the winter months. it approaches the bank for credit. what is the purpose of such credit known as? a. expansion b. inventory building c. debt management d. emergency maintenance

Answers: 3

Answer

You know the right answer?

Novak Company has four operating divisions. During the first quarter of 2017, the company reported a...

Questions