The management accountant for the Katy Market prepared the following segmented income statement for the most current year.
Question:
The management accountant for the Katy Market prepared the following segmented income statement for the most current year.
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GroceryBakeryProduceFish/MeatTotal
Sales $130,000 $120,000 $80,000 $70,000 $270,000
Variable expenses 60,000 75,000 45,000 25,000 $205,000
Contribution margin 70,000 45,000 35,000 45,000 $195,000
Other costs 22,000 24,000 25,000 21,000 $92,000
Segment margin 48,000 21,000 10,000 24,000 $103,000
Allocated avoidable costs 6,000 3,000 4,000 5,000 $18,000
Segment income 42,000 18,000 6,000 19,000 $85,000
Allocated corporate costs 13,000 12,000 9,000 7,000 $41,000
  Corporate profit $29,000 $6,000 ($3,000) $12,000 $44,000
(Required)
a) Katy Market is thinking of dropping Produce because it is reporting an operating loss. Assuming the company drops "Produce" and does not replace it, operating income for the firm will:
b) Assuming that "Produce" is discontinued and the space formerly devoted to this line is used for "Grocery", operating income for the company will:
c) Assuming that "Produce" is discontinued and the space formerly devoted to this line is rented for $4,000 per year, operating income for the company will:
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Answers
Status NEW
Posted 11 Jun 2017 09:06 AM
My Price 12.00
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file 1497172463-594484_1_operating-income.docx preview (234 words )
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