On November 15,2012,Jacobs Co

question 43

Essay

On November 15,2012,Jacobs Co.sold a segment of its business for $2,750,000.The net book value of the segment at the time of its disposal was $3,000,000.Jacobs had pretax operating income of $1,750,000 for 2012 which included $380,000 earned by the discontinued segment prior to its disposal.Assume Jacobs' tax rate is 30%.
Required:
Prepare a partial income statement for Jacobs Co.beginning with pretax income from continuing operations. 

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Definitions:

Variable Overhead Rate

A rate used to allocate variable overhead costs to products or services, which fluctuates with changes in production or activity level.

Overhead Efficiency

Measures how well a company or organization utilizes its overhead expenses to produce goods or provide services.

Fixed Overhead Budget

A plan that outlines the expected fixed costs of operating a business or manufacturing a product, which do not change with production volume or sales levels.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to products or job orders, based on a chosen activity base such as direct labor hours.