ACC 331 Mod 6 Spreadsheet Exam CH 13

ACC 331 Mod 6 Spreadsheet Exam CH 13 - associated with the...

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Unformatted text preview: associated with the alternatives are listed below: ALT M ALT N Supplies costs 43000 43000 not a relevant cost Assembly costs 43000 56000 relevant cost Power costs 26000 26000 not a relevant cost Inspection costs 19000 26000 relevant cost Required: a. Which costs are relevant and which are not relevant in the choice between Supplies costs and power costs are irrelevant costs because they do not chan ALT M is $20,0000 less than ALT N. 1. Saalfrank Corporation is considering two alternatives that are code-named b. What is the differential cost between the two alternatives? differental cost $0-$13,000 $0-$7,000-$20,000 these two alternatives? nge between the two alternatives. Assembly costs and inspection costs are relevant b M and N. Costs because they differ between the two alternatives Store A Store B Total Sales $400,000 $600,000 $1,000,000 Variable expenses 160,000 420,000 580,000 Contribution margin 240,000 180,000 420,000 Traceable fixed expenses 100,000 200,000 300,000 Store segment margin 140,000 (20,000) 120,000 Common fixed expenses 20,000 30,000 50,000 Net opreating income $120,000 $(50,000) $70,000 Due to its poor showing, consideration is being given to closing Store B. Studies show that if S is closed, one-fourth of its traceable fixed expenses will continue unchanged. The studies also that closing Store B would result in a 10 percent decrease in sales in Store A. The company a common fixed expenses to the stores on the basis of sales dollars. Required: Store B loss 180000 Store A loss 24000 Total lost contribution margin 204000 Fixed cost avoided if store is closed 150000 Net disadvantage of closing 54000 2. The most recent monthly income statement for Benner Stores is given below:2....
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ACC 331 Mod 6 Spreadsheet Exam CH 13 - associated with the...

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