Compute overall company net income

Assignment Help Financial Accounting
Reference no: EM139615

Western Apparel Company owns two stores and management is considering eliminating the East store due to declining sales.  Segmented contribution income statements are as follows and common fixed costs are allocated on the basis of sales.

 

West

East

Total

Sales

$525,000

90,000

$615,000

Variable costs

262,500

45,000

307,500

Direct fixed costs

62,500

25,000

87,500

Segment margin

200,000

20,000

220,000

Allocated fixed costs

137,500

35,000

172,500

Net Income

$62,500

($15,000)

$47,500

Western feels that if they eliminate the East store that sales in the West store will decline by 25%.  If they close the East store, overall company net income will:

a) decline by $90,000.

b) decline by $62,000.

c) decline by $85,625.

d) decline by $20,000.

Reference no: EM139615

Questions Cloud

Computation of current value of shares at the historic rate : Computation of current value of shares of a stock under given dividend growth rate and Dividends are expected to continue growing at the historic rate for the foreseeable future.
Are these gambling or illegal activities : At work, Wilson is approached by his coworkers and asked to participate in a football pool. "It's totally based upon skill," his friends claim. In addition, Wilson's philanthropic club is holding a raffle in which an individual could win a new car. T..
Evaluate the selling price per unit : Evaluate the selling price per unit. Which of the following is not a difference between financial accounting and managerial accounting?
Computation of current value of shares of a given stock : Computation of current value of shares of a stock under given dividend growth rate and are expected to continue growing at this rate for the foreseeable future
Compute overall company net income : Western feels that if they eliminate the East store that sales in the West store will decline by 25%.  If they close the East store, Compute overall company net income
Compute revenue associated with accepting the special order : Anderson Manufacturing makes a single product.  Budget information regarding the current period
Computation of current value of shares of a stock : computation of current value of shares of a stock under given dividend growth rate and This growth rate is expected to continue for the foreseeable future
What is the incremental income and revenue : What is the incremental income (loss) and revenue associated with accepting the special order?
Computation of compound annual dividend growth rate : Computation of compound annual dividend growth rate and current stock price and The chairman of Heller Industries told a meeting of financial analysts

Reviews

Write a Review

Financial Accounting Questions & Answers

  Write the appropriate journal entries to record wages

Write the appropriate journal entries to record wages and salaries expense and payroll tax expense for the January 2013 pay period.

  Prepare a value analysis and an evaluation and distribution

Prepare a value analysis and an evaluation and distribution of excess schedule for the investment in Salmon.

  Inventory value using both the temporal and existing method

Evaluate the inventory value using both the temporal and existing methods. Show how this may be reflected on Royal Tea's statements and the consolidated statements of U.S. Beverages.

  Prepare the lower portion of the 2013 income statement

Prepare the lower portion of the 2013 income statement beginning with pretax income from continuing operations. Ignore EPS disclosures.

  Evaluate the cash payback period for each proposal

Evaluate the cash payback period for each proposal. Arrange a differential analysis report, dated 15 th November of the present year, on whether the equipment should be leased or sold.

  Advance financial accounting questions.

Which part of the value of the stock is due to growth? Explain your answer. Totla 5 questions based on Advance Financial Accounting.

  How much does differ from the actual variable overhead cost

What variable overhead cost could have been incurred to fill the orders for the 120,000 items? How much does this differ from the actual variable overhead cost?

  Evaluate the breakeven point in number of oil changes

Using the high low method, evaluate utility costs. In addition, evaluate the variable costs per unit and total fixed costs. and evaluate the breakeven point in number of oil changes and sales dollars.

  Prepare journal entries using the completed contract method

Prepare journal entries for 2010 using the Completed-contract method.

  Evaluate the number of pans

Evaluate the number of pans that must be sold for Prachi to break even. Conceptual Connection: Evaluate the unit variable cost? Determine the unit variable manufacturing cost?

  Show the role accounting plays in this situation

Recognize who, other than O'Conner, could be harmed by this theft. In what ways would they be harmed? Show the role accounting plays in this situation.

  Determine interest expense on the 2012 income statement

Evaluate net cash flow from operating activities would be reported on the 2012 cash flow statement? Determine interest expense would be reported on the 2012 income statement?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd