How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Rakhi Vasavada Your Own Question
Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 4434
Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
43581946
Type Your Finance Question Here...
Rakhi Vasavada is online now
A new question is answered every 9 seconds

The management accountant for the Martino Organics has prepared

This answer was rated:

The management accountant for the Martino Organics has prepared the following segmented income statement for the most current year.

Produce Fish & Meat Sundries Total
Sales $80,000 $120,000 $60,000 $220,000
Variable expenses 36,000 65,000 20,000 121,000
Contribution margin 44,000 55,000 40,000 99,000
Other costs 18,000 21,000 8,000 47,000
Segment margin 26,000 34,000 32,000 52,000
Allocated avoidable costs 2,000 3,000 3,000 8,000
Segment income 24,000 31,000 29,000 44,000
Allocated corporate costs 7,000 7,000 7,000 21,000
Corporate profit $17,000 $24,000 $22,000 $23,000


35) If the Produce department had been eliminated prior to this year, the company would have reported:
A) greater corporate profits.
B) the same amount of corporate profits.
C) less corporate profits.
D) resulting profits cannot be determined.

36) If the Fish & Meat department (the Martino Organics Company) had been discontinued, the short-term effect on corporate profits would be a decrease of:
A) $55,000.
B) $34,000.
C) $31,000.
D) $24,000.

37) Assume that the Sundries department (the Martino Organics Company) has been discontinued and long-term capacity of the company has had time to adjust. The projected long-term effect of this action on annual corporate profits would be a decrease of:
A) $40,000.
B) $32,000.
C) $29,000.
D) $22,000.

38) Assume an advertising campaign (the Martino Organics Company) could increase revenues for any of the products by $15,000. To maximize corporate profits, the ________ department should receive the advertising dollars. Assume the cost of the advertising campaign is less than the revenues it generates.
A) Sundries
B) FIsh & Meat
C) Produce
D) From the information given, the correct product line cannot be determined.

The Jordan Company manufacturers only one type of shoe and has two divisions, the Sole Division and the Assembly Division. The Sole Division manufactures soles and then "sells" them to the Assembly Division, which completes the shoes and sells them to retailers. The market price for the Assembly Division to purchase a pair of soles is $40. Fixed costs are per pair at 100,000 units.

Sole's costs per pair of soles are:
Direct materials $8
Direct labor $6
Variable overhead $4
Division fixed costs $2

Assembly's costs per completed pair of shoes are:
Direct materials $10
Direct labor $2
Variable overhead $2
Division fixed costs $18

39) If the cost-based transfer price is 180% of variable costs , what is the transfer price per pair of soles from the Sole Division to the Assembly Division?
A) $28.8
B) $25.20
C) $32.40
D) $57.60

40) Assume an organization's cost of capital is 10% and Division X has operating income of $3 million and uses $20 million of capital. The economic value added for Division X is:
A) $200,000.
B) $300,000.
C) $1,000,000.
D) $1,700,000.
Dear Friend,

I am highlighting the answers below:

35) If the Produce department had been eliminated prior to this year, the company would have reported:
A) greater corporate profits.
B) the same amount of corporate profits.
C) less corporate profits.
D) resulting profits cannot be determined.

36) If the Fish & Meat department (the Martino Organics Company) had been discontinued, the short-term effect on corporate profits would be a decrease of:
A) $55,000.
B) $34,000.
C) $31,000.
D) $24,000.

37) Assume that the Sundries department (the Martino Organics Company) has been discontinued and long-term capacity of the company has had time to adjust. The projected long-term effect of this action on annual corporate profits would be a decrease of:
A) $40,000.
B) $32,000.
C) $29,000.
D) $22,000.

38) Assume an advertising campaign (the Martino Organics Company) could increase revenues for any of the products by $15,000. To maximize corporate profits, the ________ department should receive the advertising dollars. Assume the cost of the advertising campaign is less than the revenues it generates.
A) Sundries
B) FIsh & Meat
C) Produce
D) From the information given, the correct product line cannot be determined.

The Jordan Company manufacturers only one type of shoe and has two divisions, the Sole Division and the Assembly Division. The Sole Division manufactures soles and then "sells" them to the Assembly Division, which completes the shoes and sells them to retailers. The market price for the Assembly Division to purchase a pair of soles is $40. Fixed costs are per pair at 100,000 units.

Sole's costs per pair of soles are:
Direct materials $8
Direct labor $6
Variable overhead $4
Division fixed costs $2

Assembly's costs per completed pair of shoes are:
Direct materials $10
Direct labor $2
Variable overhead $2
Division fixed costs $18

39) If the cost-based transfer price is 180% of variable costs , what is the transfer price per pair of soles from the Sole Division to the Assembly Division?
A) $28.8
B) $25.20
C) $32.40
D) $57.60

40) Assume an organization's cost of capital is 10% and Division X has operating income of $3 million and uses $20 million of capital. The economic value added for Division X is:
A) $200,000.
B) $300,000.
C) $1,000,000.
D) $1,700,000.

Hope this helps... Please feel free to revert for any additional queries that you may have.

Warm Regards,
Rakhi Vasavada and other Finance Specialists are ready to help you