May you please answer both questions (:
Extracted text: Ken Owens Construction specializes in small additions and repairs. His normal charge is $400/day plus materials. Due to his-physical condition, David, an elderly gentleman, needs a downstairs room converted to a bathroom. Ken has produced a bid for $5,200 to complete the bathroom. He did not provide David with the details of the bid. However, they are shown here. Ken's Bid Detail Dollars Direct Material $2,300 Direct Labor 1,600 Variable overhead 300 Fixed overhead 500 Profit 500 $5,200 A. The town's social services has asked Ken if he could reduce his bid to $4,200. Should Ken accept the counter offer? Current Bid New Bid Direct Material $2,300 $2,300 Direct Labor 1,600 1,600 Variable overhead 300 300 Fixed overhead 500 Profit 500 $5,200 $4,200 B. How much would his income be reduced? Previous Next
Extracted text: Extreme Sports sells logo sports merchandise. The company is contemplating whether or not to continue its custom embroidery service. All of the company's direct fixed costs can be avoided if a segment is dropped. The information is available for the segments. Custom Logo Embroidery Apparel Sales $61,000 $251,000 Variable costs 29,000 111,000 Contribution margin $32,000 $140,000 Direct fixed costs 22,000 40,000 Allocated common fixed costs 13,000 51,000 Net income $(3,000) $49,000 A. What will be the impact on net income if the embroidery segment is dropped? Net income $ B. Assume that if the embroidery segment is dropped, apparel sales will increase 10%. What is the impact on the contribution margin and net income solely for the apparel? Contribution margin Net income C. Identify one cost that is not relevant in this analysis.