Effect on the company overall net operating income

Assignment Help Accounting Basics

Reference no: EM13757475

Tjelmeland Corporation is considering dropping product S85U. Data from the company's accounting system appear below.

Sales	$360,000
Variable Expenses	$158,000
Fixed Manufacturing Expenses	$119,000
Fixed Selling and Administrative Expenses	$94,000

All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $55,000 of the fixed manufacturing expenses and $71,000 of the fixed selling and administrative expenses are avoidable if product S85U is discontinued.

Required:

i. According to the company's accounting system, what is the net operating income earned by product S85U? Show your work!

ii. What would be the effect on the company's overall net operating income of dropping product S85U? Should the product be dropped? Show your work!

Reference no: EM13757475

Questions Cloud

Write a small java application to read the file : Write a small Java program that uses the information you gained in part (a) to read the data in the database and print it to an output text file called accounts.txt

Select a current mobile operating system : Select a current mobile operating system (e.g., iOS, Android, etc.) that you believe to be the largest concern in the workplace, and explicate why you believe that to be the case

What is network footprinting : What is network footprinting

What events have shaped your life : Where you were born and raised - What influenced your early life and what events have shaped your life?

Effect on the company overall net operating income : What would be the effect on the company's overall net operating income of dropping product S85U? Should the product be dropped? Show your work!

What is an abstract base class : What is a pure virtual function. Why would you define a pure virtual function. Give an example of a pure virtual function. What is an abstract base class. What does it do. Why would you make a class abstract

Behavior of final consumers and organizational buyers : Compare and contrast the buying behavior of final consumers and organizational buyers. In what ways are they most similar and in what ways are they most different?

Relates to acquiring-consuming or disposing of the product : The government, from the national level to the local level, plays an important role in how products are acquired, consumed, and disposed. Your textbook touches on how the government makes use of consumer behaviour, as well as the role of public polic..

How might insufficient or excessive amounts of proteins : How might insufficient or excessive amounts of proteins, carbohydrates, fats, or fiber contribute to health or illness and What have you learned about your diet?

User Account

All Pages