ACC 331 Mod 6 Spreadsheet Exam CH 13

ACC 331 Mod 6 Spreadsheet Exam CH 13 -...

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    associated with the alternatives are listed below: ALT M ALT N Supplies costs  43,000   43,000  Assembly costs  43,000   56,000  Power costs  26,000   26,000  Inspection costs  19,000   26,000   $131,000   $151,000  Required: a. Which costs are relevant and which are not relevant in the choice between these tw All are costs are relevant, except for power costs Costs Alt M Alt N Differential Assembly costs  $43,000  -  $56,000  =  $13,000  Inspection costs  $19,000  -  $26,000  =  $7,000  Total  $151,000  -  $131,000  =  $20,000  1. Saalfrank Corporation is considering two alternatives that are code-named M and N b. What is the differential cost between the two alternatives? 
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wo alternatives? l N. Costs
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Store A Store B Sales  $400,000   $600,000  Variable expenses  160,000   420,000  Contribution margin  240,000   180,000  Traceable fixed expenses  100,000   200,000  Store segment margin  140,000   (20,000) Common fixed expenses  20,000   30,000  Net opreating income  $120,000   $(50,000) Due to its poor showing, consideration is being given to closing Store B. Studies show t is closed, one-fourth of its traceable fixed expenses will continue unchanged. The studi that closing Store B would result in a 10 percent decrease in sales in Store A. The com common fixed expenses to the stores on the basis of sales dollars. Required: Total Store A Store B Sales  $1,000,000   $400,000   $600,000  Variable expenses  580,000   160,000   420,000  Contribution margin  420,000   240,000   180,000  Traceable fixed expenses  300,000   100,000   200,000  Store segment margin  120,000   140,000   (20,000) Common fixed expenses  50,000   20,000   30,000  Net operating income  $70,000   $120,000   $(50,000) The decrease in operating income = $54,000 2. The most recent monthly income statement for Benner Stores is given below: Compute the overall increase or decrease in the company's operating income if Store B
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Total  $1,000,000   580,000   420,000   300,000   120,000   50,000   $70,000   that if Store B  ies also show  pany allocates   $360,000.0   144,000.0   $216,000.0  Results of Affect on Totals Resulting Lost Margin closing Store B Store A Store A Closing and Profits  $(600,000)  $(40,000)  $360,000   (420,000)  $(16,000)  $144,000   (180,000)  $(24,000)  $216,000   $(204,000)  (200,000)  50,000   $150,000   $150,000   -     $66,000   $(54,000)  (30,000)  30,000   $50,000   $16,000  B is closed. 
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This note was uploaded on 09/29/2011 for the course ACC 311 taught by Professor Hiles during the Spring '11 term at University of Phoenix.

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ACC 331 Mod 6 Spreadsheet Exam CH 13 -...

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