Question
In: Accounting
The management Accounting outcome on 31st/12/2017 of BAC limited were as follows: &nb
- The management Accounting outcome on 31st/12/2017 of BAC limited were as follows:
Kshs kshs
Turnover (sh.50 per unit) 4,000,000
Less: raw materials 1,600,000
Direct Labour 640,000
Variable overhead 400,000
Fixed cost 600,000 3,240,000
Net profit 760,000
During 2017, the factory has been working at halfway its production capacity and the strategic manager has estimated that the quantity sold could be doubled in 2018 if the selling price was reduced to Kshs 40/=per unit. All other aspects of costs remained constant except that fixed cost increased by Kshs 100,000/=
Required:
Evaluate the viability of the strategic manager’s proposal of 2018 and justify your answer
Solutions
ekkarill92 answered 1 year agoRelated Solutions
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Management at Caribo Limited were monitoring their cash flow. They requested their accountant to prepare a...
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They requested their accountant to prepare a cash budget for the
four months ending 30 April 2016. (i) The following sales figures
are for the months of November 2015 to June 2016. The figures from
January 2016 onward are estimated:
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December 2015 64,000
Forecasted Sales:
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Feb 2016 70,000
march 2016 72,500
April 2016 76,250
May 2016 80,000
June 2016 78,750
Half the...
Management at Caribo Limited were monitoring their cash flow. They requested their accountant to prepare a...
Management at Caribo Limited were monitoring their cash flow.
They requested their accountant to prepare a cash budget for the
four months ending 30 April 2016.
Actual Sales
$
November 2015
60000
December 2015
64000
Forcast sales:
January 2016
65000
Feb 2016
70000
March 2016
72500
April 2016
76250
May 2016
80000
(i) The following sales figures are for the months of November
2015 to June 2016. The figures from January 2016 onward are
estimated:
Half the sales are normally...
Management at Caribo Limited were monitoring their cash flow. They requested their accountant to prepare a...
Management at Caribo Limited were monitoring their cash flow.
They requested their accountant to prepare a cash budget for the
four months ending 30 April 2016.
Actual Sales
$
November 2015
60000
December 2015
64000
Forcast sales:
January 2016
65000
Feb 2016
70000
March 2016
72500
April 2016
76250
May 2016
80000
(i) The following sales figures are for the months of November
2015 to June 2016. The figures from January 2016 onward are
estimated:
Half the sales are normally...
Management at Caribo Limited were monitoring their cash flow. They requested their accountant to prepare a...
Management at Caribo Limited were monitoring their cash flow.
They requested their accountant to prepare a cash budget for the
four months ending 30 April 2016.
Actual Sales
$
November 2015
60000
December 2015
64000
Forcast sales:
January 2016
65000
Feb 2016
70000
March 2016
72500
April 2016
76250
May 2016
80000
(i) The following sales figures are for the months of November
2015 to June 2016. The figures from January 2016 onward are
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Half the sales are normally...
Balance sheet accounts for Thin Man Securities on 12/31/2017 are as follows: Cash  
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Marketable
Securities 374,000
Accounts Receivable,
Net 240,000
Inventory 260,000
Prepaid
Expenses 42,000
Total Current
Assets $1,022,000
Accounts
Payable 290,000
Other Accrued
Liabilities 75,000
Short Term
Debt 130,000
Total
Current
Liabilities $
495,000
A. Calculate the working capital, current ratio and acid test
ratio for Thin Man Securities
B. In a separate set of calculations, show the “Total effect” of
all the transactions below in a new balance sheet. Then,
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1. Credit sales...
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Prepare the correcting entry necessary when these errors are
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On January 1 2017 the balance sheets of Potter Co. and Hogwarts Co. were as follows:...
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Hogwarts
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1,000,000
50,000
equipment
1,000,000
100,000
a/d equip
100,000
10,000
Land
2,000,000
20,000
building
3,000,000
100,000
a/d building
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30,000
patent
50,000
50,000
total assets
5,950,000
280,000
accounts payable
1,000,000
40,000
notes payable
1,000,000
40,000
common stock $5 par
3,000,000
150,000
apic c/s
100,000
0
r/e
850,000
50,000
On January 2nd Potter acquired
80% of the stock of Hogwarts by issuing 50,000...
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the balance sheets of Potter Co. and Hogwarts Co. were as
follows:
Potter
Hogwarts
cash
1,000,000
50,000
equipment
1,000,000
100,000
a/d equip
100,000
10,000
Land
2,000,000
20,000
building
3,000,000
100,000
a/d building
1,000,000
30,000
patent
50,000
50,000
total assets
5,950,000
280,000
accounts payable
1,000,000
40,000
notes payable
1,000,000
40,000
common stock $5 par
3,000,000
150,000
apic c/s
100,000
0
r/e
850,000
50,000
On January 2nd Potter acquired
all of the stock of Hogwarts by issuing 50,000...
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