Reference no: EM13979070
(Product line) Gilfeather Food Service sells high-quality ice cream and steaks via overnight delivery. Income statements showing revenues and costs of fiscal year 2010 for each product line are as follows.
|
Ice Cream
|
Steaks
|
Sales
|
$4,000,000
|
$2,000,000
|
Less: Cost of merchandise sold
|
(2,600,000)
|
(1,500,000)
|
Commissions to salespeople
|
(200,000)
|
(150,000)
|
Delivery costs
|
(600,000)
|
(120,000)
|
Depreciation on equipment
|
(200,000)
|
(100,000)
|
Salaries of division managers
|
(80,000)
|
(75,000)
|
Allocated corporate costs
|
(100,000)
|
(100,000)
|
Net income (loss)
|
$ 220,000
|
$ (45,000)
|
Management is concerned about profitability of steaks and is considering dropping the line and estimates that the equipment currently used to process steaks could be rented to a competitor for $8,500 annually. If the steaks line is dropped, allocated corporate costs would decrease from a total of $200,000 to $170,000, and all employees, including the manager of the product line, would be dismissed. The depreciation would be unaffected by the decision, but $105,000 of the delivery costs charged to the steaks line could be eliminated if it is dropped.
a. Recast the preceding income statements in a format that provides more information in making this decision regarding the steaks product line.
b. What is the net advantage or disadvantage (change in total company pre-tax profits) of continuing sales of steaks?
c. Should the company be concerned about losing sales of ice cream products if it drops the steaks line? Explain.
d. How would layoffs that would occur as a consequence of dropping the steaks line adversely affect the whole company?
How tall is the specimen
: A lab specimen is 15.2 mm from a converging lens. The image is 4.0 mm tall and 9.0 cm from the lens. How tall is the specimen?
|
What is minimum angle a for which ladder will remain stable
: A ladder of mass M and length L is propped up at an angle A. The coeffcient of static friction between the ground and the ladder is U= 0:43, and the wall against which the ladder is resting is smooth and frictionless. What is the minimum angle A fo..
|
Prepare both companies income statements
: Write an investment letter to address the following questions for your clients: Which company appears to be more profitable? Which company has more cash to invest in new projects? Which company would you prefer to invest in? Why?
|
How the dual court system operates in the united states
: Write a 1,400- to 2,100-word paper in which you include the following: An explanation of how the dual court system operates in the United States. A description of the historical development of the U.S. court system
|
Management is concerned about profitability of steaks
: Recast the preceding income statements in a format that provides more information in making this decision regarding the steaks product line.
|
What is work that has been done on block by applied force
: What are the work that has been done on the block by the applied force, and the work that has been done on the block by the spring force? During the block's displacement?
|
Determine the cost of goods available for sale
: Determine the cost of goods available for sale. Determine (1) the ending inventory and (2) the cost of goods sold under each of the assumed cost flow methods (FIFO, LIFO, and average-cost). Prove the accuracy of the cost of goods sold under the FIF..
|
Compute the rate and efficiency variances
: The president was elated when he saw that actual costs exceeded standard costs by only $0.30 per football. He stated, ?oI was afraid that our unit cost might get out of hand when we gave out those raises last year in order to stimulate output. But..
|
At the end of june there were no materials inventories
: Summertime, Inc. manufactures changeable type-heads for use on industrial printers. Each type-head is in a set consisting of the lead alloy type-head itself, a cover for the key on the printer keyboard, and a container box to hold the two items.
|