Determine what is the net operating income earned by product

Assignment Help Accounting Basics

Reference no: EM132615929

Relevant Cost/Dropping a Product

The management of Woznick Corporation has been concerned for some time with the financial performance of its product V86O and has considered discontinuing it on several occasions.

Data from the company's accounting system appear below:

Sales ................................................................ $150,000

Variable expenses ............................................ $72,000

Fixed manufacturing expenses ........................ $50,000

Fixed selling and administrative expenses ...... $33,000

In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $30,000 of the fixed manufacturing expenses and $13,000 of the fixed selling and administrative expenses are avoidable if product V86O is discontinued.

Question A. According to the company's accounting system, what is the net operating income earned by product V86O?

Question B. What would be the effect on the company's overall net operating income if product V86O were dropped?

Reference no: EM132615929

Questions Cloud

What should be his maximum CPP contribution : Charles is 65 years of age and in receipt of a CPP retirement pension. What should be his maximum CPP contribution

What is the value today : If the first payment is received six years from now and the final payment is received 20 years from now?

What is the account of the bottom line item : What is the account and the amount of the bottom line item on the Statement (or Consolidated Statement) of Comprehensive Income?

Inverse of the required reserve ratio : A high-tech start-up can sell ordinary shares to the public to raise funds easily." Is this statement true, false or uncertain? Explain.

Determine what is the net operating income earned by product : Relevant Cost/Dropping a Product, What would be the effect on the company's overall net operating income if product V86O were dropped?

Amount of operating cash flow using the top-down approach : What is the amount of the operating cash flow using the top-down approach?

Prepare the journal entries in the excel spreadsheet : Prepare the journal entries in the excel spreadsheet required on November 1, 2020, the date when Natalie and Curtis transfer the assets of their respective

Determine how much money does company make from processing : Determine how much money does the company make from processing one batch of the common input into the end products X and Y? Show your work.

Small finance bank license to urban cooperative bank convert : Why do these licenses are bagged by such entities that are already in some way or the other involved in some aspect of banking

User Account

All Pages