Management finds the variation in quarterly unit product costs to be confusing. It has been suggested that the problem lies with manufacturing overhead because it is the largest element of total manufacturing cost. Accordingly, you have been asked to find a more appropriate way of assigning manufacturing overhead cost to units of product. Required: 1. Assuming the estimated variable manufacturing overhead cost per unit is $0.60, what must be the estimated total fixed manufacturing overhead cost per quarter? 2. Assuming the assumptions about cost behavior from the first three quarters hold constant, what is the estimated unit product cost for the fourth quarter? 3. What is causing the estimated unit product cost to fluctuate from one quarter to the next? 4. Assuming the company computes one predetermined overhead rate for the year rather than computing quarterly overhead rates, calculate the unit product cost for all units produced during the year.

Answers

Answer 1

Question Completion:

Company A makes a single product that is subject to wide seasonal variations in demand.  The company uses a job-order costing system and computes predetermined overhead rates on a quarterly basis, using the number of units to be produced as the allocation base.  Its estimated costs, by quarter, for the coming year are given below:

                                                                             Quarters

                                                   First            Second     Third          Fourth

Direct materials                      $240,000   $120,000   $60,000   $180,000

Direct labor                                 96,000       48,000      24,000      72,000

Manufacturing overhead         228,000     204,000    192,000         ?

Total manufacturing costs    $564,000   $372,000 $276,000         ?

Number of units produced        80,000       40,000     20,000      60,000

Estimated unit product cost     $7.05          $9.30       $13.80           ?

Answer:

Company A

1. Total fixed manufacturing overhead cost per quarter:

                                                                             Quarters

                                                   First            Second     Third          Fourth

Fixed manufacturing o/h       $180,000    $180,000   $180,000   $180,000

2. Estimated unit product cost for the fourth quarter:

= Total manufacturing costs divided by estimated units produced

= $468,000/60,000 = $7/80

3. The fluctuation in the estimated unit product cost is caused by the fixed manufacturing overhead vis-a-vis the units produced.  When more units are produced, the fixed manufacturing overhead per unit is less than when less units are produced.

4. Calculation of the unit product cost for all units produced during the year = total manufacturing costs divided by total units produced

= $1,680,000/200,000

= $8.40

Explanation:

Data and Calculations:

a) Estimated variable cost = $0.60

                                                                             Quarters

                                                   First            Second     Third          Fourth

Direct materials                      $240,000   $120,000   $60,000   $180,000

Direct labor                                 96,000       48,000      24,000      72,000

Manufacturing overhead         228,000     204,000    192,000     216,000

Total manufacturing costs    $564,000   $372,000 $276,000  $468,000

Number of units produced        80,000       40,000     20,000      60,000

Estimated unit product cost     $7.05          $9.30       $13.80         $7.80

b) Variable manufacturing overhead = $0.60 * units produced

                                                                             Quarters

                                                   First            Second     Third          Fourth

Number of units produced        80,000       40,000     20,000     60,000

Variable manufacturing

 overhead (units * $0.60)       $48,000     $24,000     $12,000     $36,000

c) Fixed manufacturing overhead = Total manufacturing overhead minus variable manufacturing overhead

Manufacturing overhead       $228,000   $204,000   $192,000   $216,000

Variable overhead                    $48,000     $24,000     $12,000     $36,000

Fixed manufacturing o/h        $180,000    $180,000   $180,000   $180,000

d) Total manufacturing costs per annum:

Total manufacturing costs    $564,000   $372,000 $276,000  $468,000

= $1,680,000

Number of units produced        80,000       40,000     20,000      60,000

Total units produced = 200,000 units


Related Questions

*Will award Brainliest if correct!*

The time you define as being busy on the device.

(A) Active hours
(B) My time
(C) Windows schedule

Answers

Answer: it would active hours

Explanation: Simply, that is your active hours on your computer

The correct answer is: (A) Active hours

What are energetic hours on a computer?

Energetic hours discover the time frame while you anticipate the device to be in use. automated restarts after an update will arise outdoor during the energetic hours. via default, lively hours are from eight AM to 5 PM on pcs and from 5 AM to eleven PM on phones. customers can trade the active hours manually.

It is referred to as energetic hours. active hours are a time variety you could set to permit your computer to recognize whilst you're commonly the usage of your tool, so it might not restart robotically throughout the one's instances.

What is the means of energetic hours in home windows 10?

Energetic hours allow home windows to understanding while you're typically at your laptop. we'll use that data for agenda updates and restarts when you're no longer the usage of the pc.

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Problem-6; (chapter 3) SS Ltd. obtained significant influence over YY Ltd by buying 30% of Y's 100,000 outstanding ordinary shares at a cost of Br 18 per share on January 1, 2022. On May 15, YY declared and paid a cash dividend of Br 150,000. On December 31, YY reported net income of Br 270,000 for the year. (a) record acquisition of shares (a) record revenue and dividends​

Answers

(a) Record acquisition of shares: Investment in YY Ltd. Dr. Br 540,000, Cash Cr. Br 540,000.

(a) Record revenue and dividends: Dividend Receivable Dr. Br 45,000, Revenue from Investment in YY Ltd. Cr. Br 45,000; Investment in YY Ltd. Dr. Br 81,000, Revenue from Investment in YY Ltd. Cr. Br 81,000.

(a) To record the acquisition of shares by SS Ltd. on January 1, 2022:

Investment in YY Ltd. (30% of 100,000 shares * Br 18) Dr. Br 540,000

Cash Cr. Br 540,000

This journal entry records the purchase of 30% of YY Ltd.'s outstanding shares for a total cost of Br 540,000.

(b) To record revenue and dividends for the year:

On May 15, YY Ltd. declared and paid a cash dividend of Br 150,000. This dividend represents the portion of the company's earnings that will be distributed to its shareholders.

Dividend Receivable Dr. Br 45,000 (30% of Br 150,000)

Revenue from Investment in YY Ltd. Cr. Br 45,000

This entry recognizes the dividend revenue earned by SS Ltd. from its investment in YY Ltd.

On December 31, YY Ltd. reported net income of Br 270,000 for the year. As SS Ltd. has significant influence over YY Ltd., it needs to adjust its investment account for its share of the net income.

Investment in YY Ltd. Dr. Br 81,000 (30% of Br 270,000)

Revenue from Investment in YY Ltd. Cr. Br 81,000

This entry records the revenue earned by SS Ltd. from its share of YY Ltd.'s net income.

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If you expect to get a substantial raise six months from now, and you are like most people, it will

Answers

If you expect to get a substantial raise six months from now, it will not affect your current consumption because you haven't received the money yet.------ False

What does substantive use mean?

Substantial use means that the creator of the intellectual property receives more than normal support for the project or is given time and/or resources dedicated to the project.

What are the Substantial changes?

Common "significant changes in circumstances" include:Job loss or acquisition, sudden change in either party's finances, relocation of the party or a child, death, change in child's wishes, etc.

What is substantial force?

Significant impact means that, based on current scientific data and knowledge,  a species or native plant or animal community falls below a level at which it can sustain itself on a national or regional basis, or  a species is threatened with extinction. endangered or endangered.

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I a carry trade you borrow in low interest rate currencies and invest in high interest rate currencies. Returns are exclusively due to appreciation of the high interest rate currencies. True or false

Answers

If you engage in a carry trade and borrow and invest based on the interest rates of currencies, returns are based on the difference in rates so this is FALSE.

What does a Carry trade involve?

A carry trade involves borrowing in a currency where the interest rates are low and then investing in a place where the rate is high.

The returns/ profits come from the difference in interest rates because you would be borrowing at a low rate and gaining returns at a high rate.

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Selected transactions for the Joel Berges Company are presented in journal form below.

Date Account Titles and Explanation Ref. Debit Credit
5-May Accounts Receivable 4,100
      Service Revenue 4,100
        (Billed for services performed)
12 Cash 2,400
     Accounts Receivable 2,400
       (Received cash in payment of account)
15 Cash 3,000
     Service Revenue 3,000
        (Received cash for services performed)

Required:
Post the transactions to T-accounts and determine each account's ending balance.

Answers

Answer:

1.                             Cash

Date            Amount      Date      Amount

12 May         $2,400

15 May         $3,000

Ending Bal. $5,400

2.                Account Receivables

Date            Amount      Date      Amount

5 May          $4,100        12 May    $2,400

                                      Bal C/D   $1,700

                    $4,100                        $4,100

Ending Bal. $1,700

3.                  Service Revenue

Date            Amount      Date      Amount

                                        5 May     $4,100

                                        15 May    $3,000

                                        End Bal. $7,100

Given the previously calculated Enterprise Value, what is the NTM EV/EBITDA multiple for Alibaba Group Holdings Limited?

Answers

The Alibaba Group Holding's EV-to-EBITDA for today is 12.26.

What is a EV-to-EBITDA?

This is an accounting tool that measure the value of a company and are often used in conjunction the PE Ratio to determine the fair market value of a company.

In 2022, the company's Group Holding's stock price is $102.24 and its PE Ratio for today is 33.13.

However, because the EV-to-EBITDA is much better in capturing debt and net cash than the PE Ratio, we will have to state it.

Hence, the Alibaba Group Holding's EV-to-EBITDA for today is 12.26.

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Traditional marketing revolves around the 4 Ps:

Answers

Traditional marketing revolves around the 4 Ps, which are Product, Price, Place, and Promotion.

These elements form the foundation of a marketing strategy for businesses.

Product: Refers to the goods or services that a company offers to its customers. It involves defining the features, design, and quality of the product.

Price: Involves determining the cost of the product or service and finding the right pricing strategy that aligns with customer expectations and market conditions.

Place: Focuses on selecting the distribution channels and locations where the product will be available for customers to purchase. It includes decisions related to retail outlets, online platforms, or direct sales.

Promotion: Involves the activities undertaken to promote and create awareness about the product. It includes advertising, public relations, sales promotions, and other marketing communication strategies.

These 4 Ps provide a framework for businesses to analyze and optimize their marketing efforts to meet customer needs, increase sales, and achieve overall business objectives.

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Free Cash Flow

100

Growth rate

2%

Tax Rate

1%

Cost of Capital

5%

Debt-to-total value

50%

Given the data in the above, what is the terminal value of the business (using the growing perpetuity formula)?

Answers

Answer:

Explanation:

Terminal value of business Formula = FCF (1+g)/(WACC- g)

Where:

FCF= current free cash flow = 100  

g= Growth rate = 2%  

WACC = Weighted average cost of capital = Cost of capital = 5%

Terminal Value of the business= FCF (1+g)/(WACC- g)

Terminal Value of the business= 100 (1+2%)/(5%- 2%)

Terminal Value of the business= 3,400

Mason worked 48 hours last week. His hourly rate is $11.00. He has the following deductions taken from his pay: Social Security Tax at the rate of 6.2%, Medicare tax at the rate of 1.45%, federal income tax withheld at the rate of 10%, and 401k (retirement savings) contributions of 5% gross pay. Match the correct amount to each number below. 57.20 132 129.55 442.45 440 35.46 8.29 28.60 572

Answers

To calculate the deductions from Mason's pay, we can use the given information:

Social Security Tax at the rate of 6.2%:

Calculation: 48 hours * $11.00 * 0.062

Amount: $17.09

Medicare tax at the rate of 1.45%:

Calculation: 48 hours * $11.00 * 0.0145

Amount: $7.96

Federal income tax withheld at the rate of 10%:

Calculation: 48 hours * $11.00 * 0.10

Amount: $52.80

401k (retirement savings) contributions of 5% gross pay:

Calculation: 48 hours * $11.00 * 0.05

Amount: $26.40

Therefore, the correct matches are:

$17.09: Social Security Tax at the rate of 6.2%

$7.96: Medicare tax at the rate of 1.45%

$52.80: Federal income tax withheld at the rate of 10%

$26.40: 401k (retirement savings) contributions of 5% gross pay

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Question 2 of 10
What is one benefit of buying preferred stocks?
A. Preferred stocks are easy to evaluate.
B. Preferred stocks are low risk.
C. Preferred stocks have a predictable long-term performance.
D. Preferred stocks tend to grow with the economy.

Answers

Preferred stocks have a predictable long-term performance. Option C

The benefit of buying preferred stocks

Preferred stocks offer several benefits compared to common stocks, and one of them is their predictable long-term performance.

Preferred stocks typically have a fixed dividend rate, which means that the investors know in advance the amount of dividend they will receive. This predictability can be appealing to investors who prefer a stable income stream.

.

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Georgia has a list of employees selected for an employee development program. She is identifying which ones should participate in each activity. Which activity should she have the most experienced managers participate
in?
A. Feedback focusing on weaknesses
B. Assignment to a lower-level employee
C. One-on-one sessions with an executive coach
D. Introductions to management situations

Answers

The activity she should she have which the most experienced managers participate in is one-on-one sessions with an executive coach. The OPtion C

Which activity should she have?

Most experienced managers should participate the most in one-on-one sessions with an executive coach. The one-on-one sessions with an executive coach are a valuable opportunity for managers to further develop their skills and leadership capabilities.

These sessions provide personalized guidance and support allowing managers to enhance their strengths and address areas for improvement. The experienced managers can benefit greatly from the insights and expertise of an executive coach who can offer valuable perspectives challenge their thinking and provide strategies for growth.

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What happens when the price of a good increases

Answers

Answer:

the value of good increases (goes up)

You sell accessories. A customer is delighted with an enormous pair of sparkly hoop earrings. She wants to know where it's appropriate to wear them. Based on traditional fashion rules, which of these recommendations should you make?


"Earrings like these work in any situation."


"These will make you memorable at your next job interview."


"Wear them to work so you'll feel great on a Monday morning!"


"They'd be perfect to wear to a nightclub."

Answers

"Earrings like these work in any situation." What recommendations ought you to offer. Customer testimonials and referrals are typically the foundation of the best marketing you can have.

When someone compliments your business, you make sales as a result. On average, a business receives 60 percent of its new customers from recommendations from its existing clientele. A customer is any person or organization that makes a purchase from another firm. Because they provide revenue, customers are essential to businesses because they would not exist otherwise. The use of customer testimonials for a particular business is a part of recommendation marketing

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As a corporation, you want to distribute money to shareholders as a dividend. If the dividend is taxed at a rate of 20% and the dividend is $1 per share, how much money will a shareholder of 10,000 shares get after-tax? a) $8,000 b) $8,250 c) $8,400 d) $9,000

Answers

Answer:

a) $8,000

Explanation:

The tax rate is 20% of the dividend. If the dividend is $1 per share, the actual tax per share is 20 percent of $1.

=20/100 x $1

=0.2 x$1

=20cents per share

A shareholder will receive $1- 20 cents as dividends per share

=80 cents or $0.80 per share.

A shareholder with 10,000 shares will get

=10,000 x $.80

=$8,000

Answer:

$8000

Explanation:

Government control of resources and centralized decision-making are characteristics of:

Answers

Answer:

Command economy

Explanation:

An economic system where the means of production are owned by the government and economic activity is managed by a central body that sets quantitative production targets and distributes raw materials to productive businesses

businesses do not maximise outputs from the given inputs​

Answers

Answer:

Businesses that do not maximise outputs from the given inputs are inefficient, and probably have diseconomies of scale, the opposite of economies of scale, that ocurrs when output increases proportionally less than the inputs that are invested.

This situation arises as a result of an economic law, the law of diminishing retuns. According to this economic law, there is a point in the production process in which the use of additional units of input do not result in a proportional yield, in other words, when a business presents diminishing returns, the more inputs it adds, the less output grows in proportion to the inputs.

If a good or service is scarce, consumers will usually be?

Answers

Answer:

B) willing to pay money to get it.

Multiple-choice options for the question

A) unwilling to buy it.

B) willing to pay money to get it.

C) uninterested in owning it.

D) able to get as much of as they want.

B) willing to pay money to get it.

Explanation:

A good or service is said to be scarce if its demand outweighs the supply. Consequently, not every customer willing to buy the product will find it in the market. Scarcity will lead to a 'scramble' for the products every time buyers locate it. The 'scramble' will make customers who greatly desire the products offer higher prices to the sellers. Scarcity makes prices go up as suppliers take advantage of making higher profits.

6. Suppose that the consensus forecast of security analysts of your favorite company is that earnings next year will be $5.00 per share. The company plows back 50% of its earnings and if the Chief Financial Officer (CFO) estimates that the company's return on equity (ROE) is 16%. Assuming the plowback ratio and the ROE are expected to remain constant forever: Suppose that you are confident that 10% is the required rate of return on the stock. What does the market price of $50.00 per share imply about the market's estimate of the company's expected return on equity? (please give a number) 1 point​

Answers

10.0000%, market price of $50.00 per share imply about the market's estimate of the company's expected return on equity.

The given amount is;

The market price of $50.00 per share.The company's expected return on equity is 10%.ROE x blowback ratio16.0000% x 50.0000%8.0000%

Because the needed rate of return to the stock is 10%, the market's assessment of the company's expected return on equity is greater than that derived using the plowback ratio and the ROE.

As a result, the significance of the market price of $50.00 per share imply about the market's estimate of the company's expected return on equity are the aforementioned.

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Jayleen Company makes two products: Carpet Kleen and Floor Deodorizer. Operating information from the previous year follows. Carpet Kleen Floor Deodorizer Units produced and sold 6,000 5,000 Machine hours used 6,000 2,000 Sales price per unit $ 8 $ 13 Variable cost per unit $ 6 $ 10 Fixed costs of $38,000 per year are presently allocated equally between both products. If the product mix were to change, total fixed costs would remain the same. The contribution margin per machine hour for Floor Deodorizer is:

Answers

Answer:

$7.50 per machine hour

Explanation:

Calculation to determine what The contribution margin per machine hour for Floor Deodorizer is:

First step is to calculate the CM

CM = $13 – 10

CM= $3/ unit

Second step is to calculate Hours/ unit

Hours/ unit= 2,000 / 5,000

Hours/ unit= 0.4 hours

Now calculate the contribution margin per machine hour

Contribution margin per machine hour=$3/ 0.4 hours

Contribution margin per machine hour= $7.50 per machine hour

Therefore The contribution margin per machine hour for Floor Deodorizer is:$7.50 per machine hour

Households with net worth in the negative or zero have the highest average credit card debt.Why do you think this is?

Answers

Households with net worth in the negative or zero may have the highest average credit card debt because they face financial difficulties on account of lower incomes.

Why do lower net worth households have debt ?

It's possible that these households experience financial hardships or lower incomes which restrict them in building savings and assets. Hence, they end up resorting to credit cards as means of survival, and this may be a key reason behind their increased level of credit card debt.

Moreover, it is likely that households with negative or no net worth confront limited access to alternative forms of credit, like loans or lines of credit. Consequently, these people probably feel compelled to rely on credit cards increasingly for borrowing purposes. In turn, this tendency could augment their level of credit card debt.

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6. Choose a well-known company that you are familiar with, and explain how that company could use each of the five P's of the marketing mix to achieve its brand image and sales goals. (1-8 sentences. 5.0 points)HELP

Answers

The general example of how a company could use the five P's of the marketing mix to achieve its brand image and sales goals.

The marketing mix refers to a set of tools and strategies that a company uses to promote its products or services to its target market.

The company could use each of the five P's of the marketing mix:

1. Product: The company could offer a wide range of products to the target market's preferences and needs.

2. Price: The company could use a pricing strategy that emphasizes the high-quality of its products.

3. Place: The company could distribute its products through various channels, such as online retail platforms, etc.

4. Promotion: The company could use various promotion strategies to build brand awareness and attract customers.

5. People: The company could employ knowledgeable, and helpful staff who can provide expert advice and the benefits of using their products.

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According to the Smith text, what must be maintained to ensure the success of a nonprofit organization's sponsorship program?

a. the development of relationships with vendors
b. a solid financial plan
c. a close alliance between the theme of the sponsorship program and the mission of the organization
d. location, location, location

Answers

Answer:

c

Explanation:

if you have identified a risk, you have?
(a) figured it out how to eliminate it.
(b) recognized that it exists.
(c) publically announced it is a problem.
(d) decided not to reveal it

Answers

Answer:

B

Explanation:

you have recognized that it exists, you have not yet eliminated it or made any other decisions.

Westco Company issued 14-year bonds a year ago at a coupon rate of 8 percent. The bonds make semiannual payments and have a par value of $1,000. If the YTM on these bonds is 6.3 percent, what is the current bond price in dollars?

Answers

The current bond price in dollars is approximately $1,137.49.

To calculate the current bond price, we can use the present value of the bond's cash flows. Since the bond has a 14-year maturity and makes semiannual payments, it will have a total of 28 (14 years multiplied by 2) coupon payments.

The coupon rate is 8 percent, which means the bond pays $80 (8 percent of $1,000) in interest annually, or $40 per semiannual period. The bond also returns the face value of $1,000 at maturity.

To calculate the present value of the bond's cash flows, we discount each cash flow to its present value using the yield to maturity (YTM) of 6.3 percent. The YTM represents the market's required rate of return for the bond.

Using a financial calculator or spreadsheet software, we can discount each cash flow and sum them up to find the current bond price. The formula to calculate the present value of a bond's cash flows is:

PV = C * (1 - (1 + r)^(-n)) / r + F / (1 + r)^n

Where PV is the present value, C is the coupon payment, r is the YTM per period, n is the total number of periods, and F is the face value.

Plugging in the values for the given bond, we have:

C = $40

r = 6.3% / 2 = 0.0315 (semiannual YTM)

n = 28

F = $1,000

Using the formula and calculating the present value, we find that the current bond price is approximately $1,137.49.

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True or False
A contract comes to an end when both parties fulfill their respective duties by performing the acts they have promised.

Answers

Answer:

True

Explanation:

Who are the main participants in a business?

Answers

Answer:

its owners, employees, and customers

QUESTIONS

1. Explain how the procurement process is handled by the city of Copenhagen

Answers

Answer:um

Explanation:

The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company. Nelson company uses a perpetual inventory system. It categorizes the following accounts as selling expenses: Depreciation Expense—Store Equipment, Sales Salaries Expense, Rent Expense—Selling Space, Store Supplies Expense, and Advertising Expense. It categorizes the remaining expenses as general and administrative.

NELSON COMPANY Unadjusted Trial Balance January 31


Debit Credit
Cash $22,150
Merchandise inventory 13,000
Store supplies 5,100
Prepaid insurance 2,800
Store equipment 42,800
Accumulated depreciation—Store equipment $19,250
Accounts payable 17,000
Common stock 4,000
Retained earnings 25,000
Dividends 2,100
Sales 115,900
Sales discounts 2,100
Sales returns and allowances 2,000
Cost of goods sold 38,000
Depreciation expense—Store equipment 0
Sales salaries expense 12,900
Office salaries expense 12,900
Insurance expense 0
Rent expense—Selling space 8,000
Rent expense—Office space 8,000
Store supplies expense 0
Advertising expense 9,300
Totals $181,150 $181,150


Additional Information:
a. Store supplies still available at fiscal year-end amount to $2,550.
b. Expired insurance, an administrative expense, for the fiscal year is $1,720.
c. Depreciation expense on store equipment, a selling expense, is $6,500 for the fiscal year.
d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,720 of inventory is still available at fiscal year-end.

Required:
a. Compute the current ratios as of January 31, 2017.
b. Prepare a multiple-step income statement for the year ended January 31.
c. Prepare a single-step income statement for the year ended January 31.

Answers

Answer:

a. Store supplies still available at fiscal year-end amount to $2,550.

Dr Supplies expense 2,550

    Cr Supplies 2,550

b. Expired insurance, an administrative expense, for the fiscal year is $1,720.

Dr Insurance expense 1,720

    Cr Prepaid insurance 1,720

c. Depreciation expense on store equipment, a selling expense, is $6,500 for the fiscal year.

Dr Depreciation expense 6,500

    Cr Accumulated depreciation, equipment 6,500

d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,720 of inventory is still available at fiscal year-end.

Dr Cost of goods sold 2,280

    Cr Merchandise inventory 2,280

Cash $22,150

Merchandise inventory 10,720

Store supplies 2,550

Prepaid insurance 1,080

Store equipment 42,800

Accumulated depreciation—Store equipment $25,750

Accounts payable 17,000

Common stock 4,000

Retained earnings 25,000

Dividends 2,100

Sales 115,900

Sales discounts 2,100

Sales returns and allowances 2,000

Cost of goods sold 40,280

Depreciation expense—Store equipment 6,500

Sales salaries expense 12,900

Office salaries expense 12,900

Insurance expense 1,720

Rent expense—Selling space 8,000

Rent expense—Office space 8,000

Store supplies expense 2,550

Advertising expense 9,300

Totals $187,425 $187,425

a) current ratio = current assets / current liabilities = $36,050 / $17,000 = 2.12

c)  Nelson company

Income Statement

For the month ended January 31, 202x

Revenues:

Net sales                                                               $111,800

Expenses:

Cost of goods sold $40,280 Depreciation expense - equipment $6,500Sales salaries expense $12,900 Office salaries expense $12,900 Insurance expense $1,720 Rent expense - Selling space $8,000 Rent expense - Office space $8,000 Store supplies expense $2,550 Advertising expense $9,300                             ($102,150)

Operating income                                                           $9,650

b)  Nelson company

Income Statement

For the month ended January 31, 202x

Sales:

Total sales $115,900 Sales discounts ($2,100 )Sales returns and allowances ($2,000 )                   $111,800

Cost of goods sold                                                           ($40,280)

Gross profit                                                                         $71,520

Selling expenses:

Depreciation expense - equipment $6,500Sales salaries expense $12,900 Rent expense - Selling space $8,000 Store supplies expense $2,550 Advertising expense $9,300                                    ($39,250)

S&A expenses:

Office salaries expense $12,900 Insurance expense $1,720 Rent expense - Office space $8,000                       ($22,620)

Operating income                                                                 $9,650

Dale is a guitar teacher and Terrence is a tile layer. If Dale teaches Terrence's daughter to play the guitar in
exchange for Terrence tiling Dale's kitchen floor,
a. only Dale is made better off by trade.
O b. both Dale and Terrence are made better off by trade.
c. neither Dale nor Terrence are made better off by trade.
O d. only Terrence is made better off by trade.

Answers

If Dale teaches Terrence's daughter to play the guitar in exchange for Terrence tiling Dale's kitchen floor Option B.  both Dale and Terrence are made better off by trade.

In this scenario, Dale is a guitar teacher and Terrence is a tile layer. Dale teaches Terrence's daughter how to play the guitar in return for Terrence tiling Dale's kitchen floor. It is a classic example of trade and bartering. Dale, the guitar teacher, would have had to pay for tile installation if he hadn't bartered with Terrence, the tile layer. Terrence, on the other hand, would have had to pay for guitar lessons if he hadn't traded with Dale.

Both Dale and Terrence, therefore, benefit from the trade, and they are both better off as a result. Because Dale receives tile installation in exchange for teaching guitar lessons, and Terrence receives guitar lessons in exchange for tile installation, both benefit.

In conclusion, the answer is (b) both Dale and Terrence are made better off by trade. When both parties are better off after a trade, it is known as a mutually beneficial trade. Trade, in general, promotes mutual gains by allowing people to concentrate on what they do best and exchange their output with others for goods and services that they desire. Therefore, the correct option is B.

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How would implementing the cost-volume-profit analysis benefit a company? As a manager, which income statement format do you find more useful - the traditional financial accounting method or the contribution margin method? Why?

Answers

It provides insights into the relationship between sales volume, costs, and profitability, helping managers make informed decisions about pricing, production levels, and cost management.

CVP analysis allows managers to determine the breakeven point, the level of sales needed to cover all costs, and to assess the impact of changes in sales volume, costs, or prices on the company's profitability. This analysis can guide strategic planning, budgeting, and resource allocation.

As a manager, I find the contribution margin method of income statement format more useful than the traditional financial accounting method. The contribution margin method separates costs into fixed and variable components, allowing for a clearer understanding of how changes in sales volume affect profitability.

It highlights the contribution margin ratio, which indicates the proportion of each sales dollar available to cover fixed costs and contribute to profits.

This format enables managers to analyze cost behavior, identify cost-saving opportunities, and evaluate the financial impact of different sales scenarios. It provides a more focused view of the underlying profitability drivers and aids in decision-making related to pricing, product mix, and cost control.

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