1. Suppose that depreciation expense is 3.000.000 $ and profit is 15.000.000 $. Contribution margin percentage is 60%. Breakeven revenue is 25.000.000 $. Under these conditions, what would be the profit margin?

a) 30%

b) 40%

c) 50%

d) 60%

e) Other:

2. Suppose that total fixed costs are 800.000 $ and the contribution margin percentage is 40%. What would be the degree of operating leverage in case a sales revenue of 3.000.000 $ is generated?

a) 2

b) 3

c) 4

d) 5

e) Other:

3. Suppose that total fixed costs are 800.000 $ and the contribution margin percentage is 40%. What would be the profit in case a sales revenue of 3.000.000 $ is generated?

a) 200.000 $

b) 300.000 $

c) 400.000 $

d) 500.000 $

e) Other:

Variable Costing Income Statement for a Service Company

East Coast Railroad Company transports commodities among three routes (city-pairs): Atlanta/Baltimore, Baltimore/Pittsburgh, and Pittsburgh/Atlanta. Significant costs, their cost behavior, and activity rates for April are as follows:

Operating statistics from the management information system reveal the following for April:

a. Prepare a contribution margin by route report for East Coast Railroad Company for the month of April. Compute the contribution margin ratio. Rounded to one decimal place. If required, use the minus sign to indicate a negative contribution margin.

Compute the cost of the ending inventory and the cost of goods sold under FIFO and average-cost.

Importance of recording commitments, loss contigencies and estiamted liabilities in a financial statement

Create a journal entry for the following question:

X is renting out one room to Y for $300 each month. On September 29th, 2019 Y paid for the rent from October through December 2019. At the end of the year, Y pays for another 2months from January 1, 2020 to February 2021.

Consolidated Industries is a diversified manufacturer with business units organized as divisions, including the Reigis Steel Division. Consolidated monitors its divisions on the basis of both unit contribution and return on investment (ROI), with investment defined as average operating assets employed. All investments in operating assets are expected to earn a minimum return of 10% before income taxes.

Reigis’s cost of goods sold is considered to be entirely variable; however, its administrative expenses do not depend on volume. Selling expenses are a mixed cost with one-third attributed to sales volume. The 2019 operating statement for Reigis follows. The division’s operating assets employed were $114,250,000 at November 30, 2019, unchanged from the year before.

Required:

1. Calculate Reigis Steel Division’s unit contribution if it produced and sold 1,700,000 units during the year ended November 30, 2019. (Round your answer to 2 decimal places.)

2. Calculate the following performance measures for 2019 for Reigis:

a. Pretax ROI, based on average operating assets employed. (Round your answer to 2 decimal places.)

b. Residual income (RI), calculated on the basis of average operating assets employed. (Enter your answer in whole dollars, not in thousands.)

The most recent financial statements for Martin, Inc., are shown here:

Assets and costs are proportional to sales. Debt and equity are not. A dividend of $1,075 was paid, and Martin wishes to maintain a constant payout ratio. Next year’s sales are projected to be $31,200. What is the external financing needed? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

EFN:

Below is the trial balance of Tom’s Tents at 5 April 2018.

The following information is relevant.

1.     The closing inventory at 5 April 2018 is valued at £143,000.

2.     On 5 January 2018 Tom sold a motor vehicle for £12,000. The customer was due to pay Tom’s Tents on 5 April 2018 but had not paid at the year end. This disposal has not been recorded in the accounts. This motor vehicle had been bought on 6 April 2015 for £25,000.

3.     On 6 January 2018, Tom bought a new motor vehicle on credit for £30,000. At the year-end Tom had still not paid for this motor vehicle and the transaction had not been recorded in the accounts.

4.     Depreciation on motor vehicles is provided at 20% per annum using the reducing balance basis on a monthly pro-rata basis. Depreciation on fixtures and fittings is provided at 10% per annum on the straight line basis, assuming no residual value. There were no purchases or disposals of fixtures and fittings during the year.

5.     Tom estimates that £6,000 due from customers will be irrecoverable and must be written off.

6.     The allowance for receivables is to be set at 5% of net receivables at 5 April 2018.

7.     Rent includes a prepayment of £2,000.

8.     Insurance includes a prepayment of £700.

9.     The heating bill will arrive on 5 May 2018 and about £500 is expected to relate to the period until 5 April 2018.

10.  The long-term loan is repayable in 5 years’ time. Interest payable on the loan is 6% and will be paid once per year.

Required:

a.Prepare the income statement for Tom’s Tents for the period ended 5 April 2018. Show your workings, including a full non-current assets note.

b.Prepare the balance sheet for Tom’s Tents as at 5 April 2018. Show your workings.

Costs per Equivalent Unit

The following information concerns production in the Baking Department for March. All direct materials are placed in process at the beginning of production.

a. Based on the above data, determine each cost listed below. Round "cost per equivalent unit" answers to the nearest cent.

b. Assuming that the direct materials cost is the same for February and March, did the conversion cost per equivalent unit increase, decrease, or remain the same in March?

on January 2, 2019, another of Smith’s subsidiaries, Johnson, entered into an operating lease for four years, with semi-annual lease payments as follows: payments 1 to 3 = $25,000; payments 4 to 6 = $30,000; and payments 7 and 8 = $35,000. Payments are to be made on the inception date and every June 30 and December 31 thereafter. The lessor’s interest rate is 6%. Provide the amortization table for the lease and the journal entries required at the inception of the lease and the lease payment on June 30, 2020. The lessee records amortization expense each time a lease payment is made.

On January 2, 2018, Smith Co. leased equipment, with a fair value of $750,000, under a capital lease calling for seven annual lease payments of $130,000 beginning January 2, 2018. Smith's incremental borrowing rate on the date of the lease was 10%. However, the lessor's implicit rate, which was known by Smith, was 8%. Provide the amortization table for the lease and the journal entries required for year ended 2018 and 2020.

Entries for Bonds Payable, including bond redemption

The following transactions were completed by Montague Inc., whose fiscal year is the calendar year:

1. Journalize the entries to record the foregoing transactions. If an amount box does not require an entry, leave it blank. When required, round amounts to the nearest dollar.

2. Indicate the amount of the interest expense in (a) 20Y1 and (b) 20Y2.

3. Determine the carrying amount of the bonds as of December 31, 20Y2.
$

Hereford Company is planning to introduce a new product with an 80 percent learning rate for production for batches of 1000 unites. The variable labor costs are $30 per unit for the first 1000-unit batch. Each batch requires 100 hours. There are $10,000 in fixed costs not subject to learning. What is the cumulative total time (labor hours) to produce 2,000 units based on the cumulative average-time learning curve?

I know that the answer is 160 hours but I don't understand how to get that answer.

Each of the following items listed below indicate how it would be reported on the statement of cash flows, using the following legend (assume the company uses the indirect method for operating activities

A Operating activity add to income

B Operating activity deduct from income

C Cash provided by investing activities

D Cash used for investing activities

E cash provided by financing activies

F Cash used for financing activities

___ 1. Purchase acme co common stock (purchase stock of own company) for $100,000

___ 2. Sold truck with book value of $7,000 for $3,000

___ 3. Declared cash dividends on common stock of $15,000 to be paid next year

___ 4. Redemption of company bonds for $95,000: the bonds had a carrying and face value of $100,000. (we retired-paid of debt)

___ 5. Recorded $49,000 of amortization for an intangible asset

___ 6. Purchased a new truck for $29,000: installment purchase, no cash down payment

___ 7. increase in accounts receivable from beginning to end of year of $12,000

___ 8. Collected $26,000 in cash from customer's payments on account receivables. Of that amount $20,000 related to sales made in the previous year