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3 years ago

The following data have been collected for four different cost items.

Business

1 answer:

gregori [183]3 years ago

8 0

Answer:

Option (B) is correct.

Explanation:

For finding the variable expenses = change in the cost ÷ change in the quantity

= (10,560 - 8,000) ÷ (140 - 100)

= 2560 ÷ 40

= 64 per unit

total variable expenses for 100 units 64 × 100 = 6400

fixed expenses = 8000 - 6400

= 1600 so it is of MIXED

Here at even different quantity cost is same so it is of fixed expenses

For variable expenses = (9100-6500) ÷ (140-100)

= 65 per unit

for variable expenses = 65 × 100

= 6,500

so it is of fully variable expenses

variable expenses = (8,580 - 6,700) ÷ (140 - 100)

= 47 per unit

= 47 × 100

= 4,700

so it is of mixed expenses

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Read 2 more answers

Boots Plus has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow: If $25,

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Answer:

The missing part of the question is found below:

Boots Plus has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow:

Total Hiking Fashion

Sales revenue $480,000 $340,000 $140,000

Variable expenses 355,000 235,000 120,000

Contribution margin 125,000 105,000 20,000

Fixed expenses 76,000 38,000 38,000

Operating income (loss) $49,000 $67,000 $(18,000)

Answer

By discontinuing fashion line of business operating income would increase by $5,000

Explanation:

The impact of eliminating Fashion line is evident in the revised Income statement below:

Hiking

Sales revenue $340,000

Variable expenses ($235,000)

Contribution margin 105,000

Fixed expenses($76,000-$25,000) ($51,000)

Operating income $54,000

By discontinuing the fashion line of business,the operating income would increase by $5,000 ($54,000-$49,000) from $49,000 when operating the two lines of business to $54,000 when fashion is closed up.

The most appropriate action is to concentrate on the hiking line which might mean that Boots plus has a competitive edge in the Hiking business sector.

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