college Managerial accounting

Problem 47

Simon Hinson Company operates two divisions: Gordon and Ronin. A segmented income statement for the company’s most recent year is as follow:

Total Company
Gordon Division
Ronin Division


Less variable expense

Contribution margin

Less traceable fixed costs

Division segment margin

Less common fixed cost

Net income


A. If the Gordon Division increased its sales by $85,000 per year, how much would the company’s net income change? Assume that all cost behavior patterns remained constant.

B. Assume that the Ronin Division increased sales by $100,000, the Gorgon Division sales remained the same, and there was no change in fixed costs.

1. Calculate the net income amounts for each division and the total company.

2. Calculate the segment margin ratios before and after these changes and comment on the results. Explain the changes.

C. How do the sales increases and decreases impact divisional contribution marhin ratio and segment margin ratio?

  1. 👍
  2. 👎
  3. 👁

Respond to this Question

First Name

Your Response

Similar Questions

  1. Principles of Finance HELP!!!

    Problem 16-7. Pro forma income statement At the end of last year, Roberts Inc. reported the following income statement (in millions of dollars): Sales 3000 Operating costs excluding depreciation 2450 EBITDA 550 Depreciation 250

  2. ECON

    You’ve recently learned that the company where you work is being sold for $500,000. The company’s income statement indicates current profits of $25,000, which have yet to be paid out as dividends. Assuming the company will

  3. business Maths

    Gordon Rosel went to his bank to find out how long it will take for $1,900 to amount to $2,420 at 7.8% simple interest. Please solve Gordon’s problem. (Round your answer to 1 decimal place.)

  4. science

    Which of the following groups would an animal with an exoskeleton, segmented body, and jointed appendages belong to? A. mollusks B. segmented worms C. cnidarians D. arthropods

  1. Finance 200

    11. The Sterling Tire Company’s income statement for 2008 is as follows: Given this income statement, compute the following: STERLING TIRE COMPANY Income Statement For the Year Ended December 31, 2008 Sales (20,000 tires at $60

  2. Accounting

    Accounts receivable will appear on which of the following financial statements? Statement of changes in stockholders’ equity Statement of cash flows Balance sheet Income statement

  3. accounting

    During Denton Company’s first two years of operations, the company reported absorption costing net operating income as follows: Year 1 Year 2 Sales (@ $64 per unit) $ 1,216,000 $ 1,856,000 Cost of goods sold (@ $32 per unit)

  4. accounting280

    Instructions Enter the trial balance on a worksheet and complete the worksheet. E4-2 The adjusted trial balance columns of the worksheet for Goode Company are as follows. GOODE COMPANY Worksheet (partial) For the Month Ended April

  1. Accounts

    The financial statement that shows business results in terms of revenue and expenses is __________. an income statement a balance sheet a statement of owner's equity the statement of cash flows Answer A

  2. accounting

    describe a balance sheet, income statement, retained earnings statement, and statement of cash flows? How does a company use these financial statements to make future business decisions?

  3. accounting

    Cournot Company sells 100,000 wrenches for $12 a unit. Fixed costs are $300,000, and net income is $200,000. What should be reported as variable expenses in the CVP income statement? (a) $700,000. (c) $500,000. (b) $900,000. (d)

  4. algebra

    In 2010 a company reported a net income loss of 23.8 million. In 2011 the company reported a net income gain of 10.4 million. How much more income did the company earn in 2011 than in 2010

You can view more similar questions or ask a new question.