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ACC310_Week1_Discussion1 - one closes then these costs...

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Beige Computers, City Division Divisional Income Statement Differential Revenues and Costs For the Year Ended January 31 Sales Revenue $12,900,000  Costs    Advertising 525,000     Cost of Goods Sold 6,450,000     Divisional Administrative Salaries 870,000     Selling Costs (Sales Commissions) 1,730,000     Rent 2,215,000     Share of Corportate Administration        Total Costs $11,790,000  Net Differential Gain Before Income Tax $1,110,000  Tax Expense at 40% Rate 444,000  Net Differential Gain from Store $666,000  All of these costs, except for the share of corporate administration, are probably differential. However, if customers switch to other divisions of the company when this
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Unformatted text preview: one closes then these costs would not be differential. Also if the advertising is not specific to this division and is applicable to other divisions as well, then this cost would not be differential. a. Energy to run machines producing units of output in the factory V,M b. Depreciation on buildings for administrative staff offices F,P c. Bonuses of top executives in the company F,P d. Overtime pay for assembly workers V,M e. Transportation-in costs on materials purchased V,M f. Assembly line workers’ wages V,M g. Sales commissions for sales personnel V,P h. Administrative support for sales supervisors F,P i. Controller’s office rental F,P j. Cafeteria costs for the factory F,M...
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