I been on this for hours please help me. please mheducat tprox 0.241948544767922

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I been on this for hours please help me. please

mheducat tprox 0.2419485447679226 1 --a cookbook, a travel guide, and a handy speler Each book sells for $13. The pubishing compary's met recent monthly income statoment is givan below Total Sales $ 360,000 $130,000 $1/0,000 60 000 Expenses Printing cos Advertising General sales Salaries Equipment depreciation Sales commissions General adminiatration Warehouse rent Dapreciation-office facilfes 119,000 44,000 70,000 5.000 42000 2100D 180003,00D 21,6007802 10.200 3,60 34 000 19.00310,7004.300 10800 3600 3,6003600 3500 13.00 170 600 47,100 15,700 15,700 15,700 14,400 5,200 6 2,400 8,100 2,700 27002,703 Totsl expenses 333,000 132 00D 154,700 46.300 Net operating income(loss) $ 27,000 s(2000) s 15.300 s 13700 The following addtional information is availabla about the company a. Only printing costs and salea commissions are variabie, al athar costs are food The printing coets b The same equipment is used to producs all three books, so tha equipment depreciston cost hras been c. The warehbuse is used to stora fnished units of product so the rental cost has been alacanos o tha inckide materials, labor. and variable averheadi are traceatie to tha threa product ines as shcom in the statement above S-les commissons nre 10% of sales for any proud allocated equaly among the thres product lines An analysis of the company's activities indicates that the eapment is used 25% of da ime to pouco 25% of the time to produce handy spellers colt oski S0% of the are io produce tave pida and nantal cost is 53 per square foot per year Tho product ines on the basis of sales dolars. Th warchouse conlains 57 600 square fest of space of which 10 600 square feet &sed; by the cookboo ine. 27, 400 square feet by the traval guide ine and 19 620 squere faat by the handy apofoer Ine warehouse traceable to any speciic preduct Sos This coat has been allod to the product ines an the basis of sales dolars d The ganeral sales cost above includes Pe salary of the sales manager and other sales cuas na

Explanation / Answer

1.

Workings:

Warehouse rent is allocated to the three product lines on the basis of the space occupied by each.

Cook book: $14400 x 10600 / 57600 = $2650

Travel Guide: $14400 x 27400 / 57600 = $6850

Handy Speller: $14400 x 19600 / 57600 = $4900

2a. NO

The cook book product line is generating a contribution margin of $73000 and a segment margin of $27650 and hence should not be eliminated.

b-1.

b-2. NO

Total Company Cook Book Travel Guide Handy Speller Sales 360000 130000 170000 60000 Variable expenses: Printing costs 119000 44000 70000 5000 Sales commissions 36000 13000 17000 6000 Total variable expenses 155000 57000 87000 11000 Contribution margin 205000 73000 83000 49000 Traceable fixed expenses: Equipment depreciation 10800 2700 5400 2700 Warehouse rent 14400 2650 6850 4900 Advertising 42000 21000 18000 3000 Salaries 34000 19000 10700 4300 Total traceable fixed expenses 101200 45350 40950 14900 Segment margin 103800 27650 42050 34100 Common fixed expenses: General sales 21600 General administration 47100 Depreciation-office facilities 8100 Total common fixed expenses 76800 Net operating income 27000

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