Monthly income statement with products

Assignment Help Accounting Basics

Reference no: EM13139826

Clinton Company sells two items , product A and product B. The company is considering dropping product B. It is expected that sales of product A will increase by 40% as a result. Dropping product B will allow the company to cancel its monthly equipment rental costing $100 per month. The other existing equipment will be used for additional production of product A. One employee earning $200 per month can be terminated if product B production is dropped. Clinton's other fixed costs are allocated and will continue regardless of the decision made. A condensed, budgeted monthly income statement with both products follows:

Product A Product B Total
Sales$10,000$ 8,000 $18,000
Direct materials 2,500 2,000 4,500
Direct labor 2,000 1,200 3,200
Equipment rental 300 2,600 2,900
Other allocated overhead 1,000 2,100 3,100
Operating income $ 4,200 $ 100 $ 4,300

Reference no: EM13139826

Questions Cloud

Thesis statement for teen suicide : A thesis statement for teen suicide. Subtopics: prevention, causes/risks, and myths.

What would happen to the amount of economic investment : What would happen to the amount of economic investment made today if firms expected the future returns to such investment to be very low ?

Probability that at most one major hurricane will strike us : Major hurricane will strike the U.S. mainland, b) at most one major hurricane will strike the U.S. mainland, and c) more than one major hurricane will strike the U.S. mainland.

What will be the final temperature of the solution : a coffee contains 100 mL of H2O. initial temperature of calorimeter is temperature 23 C.if 8.20 g of CaCl2 is added to calorimeter. what will be the final temperature of the solution in the calorimeter.

Monthly income statement with products : One employee earning $200 per month can be terminated if product B production is dropped. Clinton's other fixed costs are allocated and will continue regardless of the decision made. A condensed, budgeted monthly income statement with both product..

How is jealousy significant to human nature : hOW IS JEALOUSY SIGNIFICANT TO HUMAN NATURE

Compute probability of stock-out for order quantities : Compute the probability of a stock-out for the order quantities suggested by members of the management team.

Write a hypotheses with identifying one-tail and two-tail : how to write a hypotheses with identifying one-tail and two-tail

Determine lot size for company to minimize total annual cost : Determine the lot size for Company B that wold minimize total annual cost by using the economic production lot size model.

User Account

All Pages