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pochemuha
3 years ago
11

Bed & Bath, a retailing company, has two departments: Hardware and Linens.

Business
1 answer:
LUCKY_DIMON [66]3 years ago
3 0

Answer:

Net Operating Income will decrease by $503,080.

Explanation:

Sales of Hardware after 12% decrease will be $3,100,000 * 88% (100 - 12) = $2,728,000

Variable Expenses of Hardware after 12% decrease 891,000 * 88% (100 - 12) = $784,080

Net Operating Income of Hardware after 12% decrease = $623,920

The sunk cost for Linens fixed cost will be deducted to find the total of net operating income

$623,920 - $375,000 = $248,920

$248,920 is the net operating income after dropping Linens

The increase or decrease is calculated by finding the difference between current and old total net operating income

$248,920 - $752,000 = $503,080

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The total sum that your company spent on expenses directly associated with the selling of goods is known as the cost of goods sold. Depending on the nature of your firm, this could also include raw materials, packaging, direct labor involved in making or selling the product, and items bought for resale.

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7 0
2 years ago
Chess Top uses the perpetual inventory system. On May 1st, the beginning inventory consisted of 480 units that cost $65 each. Du
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the amount of the cost of goods sold is $55,120

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The computation of the cost of goods sold for the month is shown below:

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