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4 Anderson Publishing has two divisions: Book Publishing and Magazine Publishing. The Magazine division has been losing money for the last five years and Anderson is considering eliminating that division. Anderson's information about the two divisions is as follows Sales Revenue Cost of Goods sold Variable manufacturing costs Fixed manufacturing costs Gross Profit Operating Expenses Variable operating expenses Fixed operating expenses Net income Book Division $ 7,960,000 2,160,000 1,093,500 $4,706,500 151,000 2,932,000 $1,623,500 Contribution Margin Segment Margin Magazine Division $3,367,700 Book Division Complete this question by entering your answers in the tabs below. 1,076,800 1,241,200 $1,049,700 221,500 1,197,900 $ (369,700) Only 20 percent of the fixed manufacturing costs and 60 percent of the fixed operating expenses are directly attributable to each division. The remaining are common or shared between the two divisions. Required: Required 1 Required 2 Compute the contribution margin and segment margin for each division and the company as a whole. Magazine Division 1. Compute the contribution margin and the segment margin of each division and the company as a whole. 2. What will be the impact on net income if the Magazine Division is eliminated? Total Total $ 11,327,700 3,236,800 2,334,700 $5,756,200 Required 2 > 372,500 4,129,900 $ 1,253,000

4 Anderson Publishing has two divisions: Book Publishing and Magazine Publishing. The Magazine division has been losing money for the last five years and Anderson is considering eliminating that division. Anderson's information about the two divisions is as follows Sales Revenue Cost of Goods sold Variable manufacturing costs Fixed manufacturing costs Gross Profit Operating Expenses Variable operating expenses Fixed operating expenses Net income Book Division $ 7,960,000 2,160,000 1,093,500 $4,706,500 151,000 2,932,000 $1,623,500 Contribution Margin Segment Margin Magazine Division $3,367,700 Book Division Complete this question by entering your answers in the tabs below. 1,076,800 1,241,200 $1,049,700 221,500 1,197,900 $ (369,700) Only 20 percent of the fixed manufacturing costs and 60 percent of the fixed operating expenses are directly attributable to each division. The remaining are common or shared between the two divisions. Required: Required 1 Required 2 Compute the contribution margin and segment margin for each division and the company as a whole. Magazine Division 1. Compute the contribution margin and the segment margin of each division and the company as a whole. 2. What will be the impact on net income if the Magazine Division is eliminated? Total Total $ 11,327,700 3,236,800 2,334,700 $5,756,200 Required 2 > 372,500 4,129,900 $ 1,253,000

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter18: Pricing And Profitability Analysis
Section: Chapter Questions
Problem 41P: Shannon, Inc., has two divisions. One produces and sells paper party supplies (napkins, paper...
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Anderson Publishing has two divisions: Book Publishing and Magazine Publishing. The Magazine division has been losing money for the last five years and Anderson is considering eliminating that division. Anderson's information about the two divisions is as follows: Sales Revenue Cost of Goods sold Variable manufacturing costs Fixed manufacturing costs Gross Profit Operating Expenses Variable operating expenses Fixed operating expenses Net income Book Division $ 7,960,000 2,160,000 1,093,500 $4,706,500 151,000 2,932,000 $ 1,623,500 Contribution Margin Segment Margin Book Division Magazine Division $ 3,367,700 Complete this question by entering your answers in the tabs below. 1,076,800 1,241,200 $ 1,049,708 Only 20 percent of the fixed manufacturing costs and 60 percent of the fixed operating expenses are directly attributable to each division. The remaining are common or shared between the two divisions Required: Required 1 Required 2 Compute the contribution margin and segment margin for each division and the company as a whole. Magazine Division Forquired 1 221,500 1,197,900 $ (369,700) 1. Compute the contribution margin and the segment margin of each division and the company as a whole. 2. What will be the impact on net income if the Magazine Division is eliminated? Total Total $ 11,327,700 3,236,800 2,334,708 $5,756,200 Required 2 > 372,500 4,129,900 $ 1,253,800
Transcribed Image Text:Anderson Publishing has two divisions: Book Publishing and Magazine Publishing. The Magazine division has been losing money for the last five years and Anderson is considering eliminating that division. Anderson's information about the two divisions is as follows: Sales Revenue Cost of Goods sold Variable manufacturing costs Fixed manufacturing costs Gross Profit Operating Expenses Variable operating expenses Fixed operating expenses Net income Book Division $ 7,960,000 2,160,000 1,093,500 $4,706,500 151,000 2,932,000 $ 1,623,500 Contribution Margin Segment Margin Book Division Magazine Division $ 3,367,700 Complete this question by entering your answers in the tabs below. 1,076,800 1,241,200 $ 1,049,708 Only 20 percent of the fixed manufacturing costs and 60 percent of the fixed operating expenses are directly attributable to each division. The remaining are common or shared between the two divisions Required: Required 1 Required 2 Compute the contribution margin and segment margin for each division and the company as a whole. Magazine Division Forquired 1 221,500 1,197,900 $ (369,700) 1. Compute the contribution margin and the segment margin of each division and the company as a whole. 2. What will be the impact on net income if the Magazine Division is eliminated? Total Total $ 11,327,700 3,236,800 2,334,708 $5,756,200 Required 2 > 372,500 4,129,900 $ 1,253,800
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