X Question ensed monthly operating income data for Cosmo Inc. for November is pr

Question

X Question ensed monthly operating income data for Cosmo Inc. for November is presented below Additional information regarding Cosmo's operations follows the statement. Total Mall Store Town Store Sales Variable expenses Contribution margin Traceable fixed expese00 $200,000 $80,000 $120,000 84,00048,000 36, 24,000 2%,000 4.000) 2000 40.0 nent margin . (4,000) Common fixed expenses Net operating income Cosmo allocates common fixed expenses to each store on the basis of sales dollars. Management estimates that closing the Town Store would result in a ,5% decrease in Mall Store's sales. The operating results for November are represer Town Store would result in a monthly increase (decrease) in Cosmo's net opecrating income eof tative of all months. A decision by Cosmo Inc. to close the A. $4,000 B. S(4,000) C. S(200) D. S(3.200) E. S(13,200) 14. Farnsworth Television makes and sells portable television sets. Each television regularly sells for S200. The following cost data per television are based on a full capacity of 12,000 televisions produced each period: Direct materials.... S75 S55 Direct labor. $48 Manufacturing overhead (75% variable, 25% unavoidable fixed) A special order has been received by Farnsworth for a sale of 2,500 televisions to an overseas customer. The only selling costs that would be incurred on this order would be $5 per television for shipping. Farnsworth is now selling 7,200 televisions through regular distributors each period. What should be the minimum selling price per television in negotiating a price for this special order? B. S166 C. $178 D. $176 E. S181.

Explanation / Answer

13

14

Cosmo loss -36,000 -( 48,000 * .15 )+ 40,000 * 3/4 = - ($13,200) Ans E 13200

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