A study indicates that 372000 of the fixed expenses being

Assignment Help Accounting Basics

Reference no: EM13572489

Boyle's Home Center, a retailing company, has two departments, Bath and Kitchen. The company's most recent monthly contribution format income statement follows:

			Department
	Total		Bath			Kitchen
Sales	$	4,300,000	$	1,120,000		$	3,180,000
Variable expenses		1,353,000		413,000			940,000

Contribution margin		2,947,000		707,000			2,240,000
Fixed expenses		2,200,000		850,000			1,350,000

Net operating income (loss)	$	747,000	$	(143,000	)	$	890,000

A study indicates that $372,000 of the fixed expenses being charged to the Bath Department are sunk costs or allocated costs that will continue even if the Bath Department is dropped. In addition, the elimination of the Bath Department would result in a 15% decrease in the sales of the Kitchen Department.

Required:

If the Bath Department is dropped, what will be the effect on the net operating income of the company as a whole? (Input the amount as a positive value. Omit the "$" sign in your response.)

(Click to select)DecreaseIncrease in net operating income

Reference no: EM13572489

Questions Cloud

Wong corporation sold 2534000 7 5-year bonds on january 1 : wong corporation sold 2534000 7 5-year bonds on january 1 2012. the bonds were dated january 1 2012 and pay interest on

Andrew davis is the bookkeeper for cheyenne company andrew : andrew davis is the bookkeeper for cheyenne company. andrew has been trying to get the balance sheet of cheyenne

Calculate the effect on the companys total net operating : masse corporation uses part g18 in one of its products. the companys accounting department reports the following costs

Brian is a 25 partner in the bc partnership on january 1 bc : brian is a 25 partner in the bc partnership. on january 1 bc distributes 20000 cash and land with a 16000 fair value

A study indicates that 372000 of the fixed expenses being : boyles home center a retailing company has two departments bath and kitchen. the companys most recent monthly

In psychology social psychology is the scientific study of : in psychology social psychology is the scientific study of how peoples thoughts feelings and behaviors are influenced

Kathy is a 25 partner in the kdp partnership and receives : kathy is a 25 partner in the kdp partnership and receives 120000 cash in complete liquidation of her partnership

Income tax is a on income and not on receipt discuss this : income tax is a on income and not on receipt? discuss this statement and keep the main feature of the

Oklahoma manufacturing company uses a standard cost : oklahoma manufacturing company uses a standard cost accounting system. in 2012 the company produced 28300 units. each

User Account

All Pages