Discusses on compute of net operating income

Reference no: EM13824236

Problem-

The Rial Company's income statement for June is given below:

	Total	Division F	Division L
Sales	$476,000	$296,000	$180,000
Variable expenses	204,960	150,960	54,000
Contribution margin	271,040	145,040	126,000
Traceable fixed expenses	138,600	64,800	73,800
Segment margin	132,440	$80,240	$52,200
Common fixed expenses	44,600
Net operating income	$87,840

A proposal has been made that will lower variable expenses in Division L to 25% of sales. However, this reduction can only be accomplished by a $22,800 increase in Division L's traceable fixed expenses. If this proposal is implemented and if sales remain constant, overall company net operating income should:

a. increase by $22,800

b. increase by $31,800

c. decrease by $13,800

d. decrease by $22,800

Additional Requirement-

The problem belongs to Accounting and it discusses on compute of net operating income.

Reference no: EM13824236

Questions Cloud

Explain how technology has affected the lives of individuals : Explain how technology has affected the lives of the individuals. Describe any individuals with disabilities you have personally observed who have similar stories. How has technology affected their lives?

Report on operations and quality assessment : Report On Operations And Quality Assessment

Traditional contribution margin method : What is the profit if the traditional contribution margin method is used for determining CKC's product mix? What is the profit if the bottleneck method advocated by Troy is used for selecting the product mix?

Calculate the expected value and standard deviation : Calculate the expected value and standard deviation of this random variable X by using the probability distribution shown. (b) Describe the shape of this distribution. x P(x) 60 0.40 70 0.30 80 0.20 90 0.10 Chap 7 Remember, all z values should be ..

Discusses on compute of net operating income : The problem belongs to Accounting and it discusses on compute of net operating income

Discuss how trial scene highlights antagonistic relationship : Discuss how the trial scene highlights the antagonistic relationship between justice and mercy. Why do you think Shylock offered to lend money to Antonio at no interest?

Information provided for development of a catalog : Given the information provided for development of a catalog product return process for periods 1 through 5, assign the PV values (using the rules) to develop a baseline for the project.

How can the bis corporation validate the model : Does the model developed truly represent BIS's logistics network - How can the BIS Corporation validate the model?

Determine what supposed to be the entry : What is the best way to determined what supposed to be the entry will use, please give me an example and explained for me to understand.

User Account

All Pages