Scottish Company manufactures a variety of toys and games. J…

Scottish Company manufactures a variety of toys and games. John Chisholm, president, is disappointed in the sales of a new board game. The game sold only 10,000 units in the current year when 30,000 were projected. Sales for next year look no better. At $100 per game, it is not a hot seller. Direct costs of the board game are $56 variable cost and $100,000 fixed. John is considering several options. Option 1: Cut the price to $70 and perhaps sell 15,000 units. Option 2: Cut the price to $60, reduce material costs by $10, and cut advertising by $60,000. Anticipated volume for this option is 10,000 units. Option 3: Cut the price to $80 and include a $10 mail-in rebate offer. It is anticipated that 15,000 units could be sold and only 30% of the rebate coupons would be redeemed. ​ What is the profit (loss) from Option 3?

Magenta Company has two divisions that produce two different…

Magenta Company has two divisions that produce two different products. Following is information pertaining to its two divisions for the month of June: ​ Division Gold Division Silver Variable selling and administrative expenses $  30,000 $  20,000 Direct fixed manufacturing expenses   12,000     9,000 Sales 150,000 120,000 Direct fixed selling and administrative expenses   20,000   15,000 Variable manufacturing expenses   60,000   50,000 ​ Common expenses are $8,000 for the month of June. Compute the segment margin for Division Silver.