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Complete Exercise 1-18 and 2-19. Remember to compl...




Complete Exercise 1-18 and 2-19. Remember to complete all parts of the problems and report the results of your analysis. Do not forget to show the necessary steps and explain how your attained that outcome. 1-18 cost data for managerial purposes Beige Computers operates retail stores in both downtown (city) and suburban (mall) locations. The company has two responsibility centers: the city division, which contains stores in downtown locations, and the mall division, which contains stores in suburban locations. Beige?s CEO is concerned about the profitability of the city division, which has been operating at a loss for the last several years. The most recent income statement follows. The CEO has asked for your advice on shutting down the city divisions operations. If the city division is eliminated, corporate administration is not expected to change, nor are any other changes expected in the operations or costs of the mall division. Beige Computers, City Division Divisional income Statement For the year ending January 31 Sales revenue 12,900,000 Costs Advertising ? city division 525,000 Cost of goods sold 6,450,000 Divisional administrative salaries 870,000 Selling cost (sales commission) 1,730,000 Rent 2,215,000 Share of corporate administration 1,425,000 Total cost $13,215,000 Net loss before income tax benefit $ (315,000) Tax benefit at 40% rate 126,000 Net loss $ (189,000) Required: what revenues and costs are probably differential for the decision to discontinue City Division?s operations? What will be the effect on Beige?s profits if the division is eliminated?,please let me know about 1-18 i received 2-19 and i thank you for that .


Paper#11014 | Written in 18-Jul-2015

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