Ellie Mosk, CEO of X-Space Industries, decided to expand the company’s product offering beyond the core model rocket business. After investigation, she decided to set up a separate division to design and manufacture products for the drone market. Several companies were interested in having X-Space develop these drones, and financial results, to date, have been encouraging. Revenue was $4 million, gross margins have been running about 40%, and the customer sales and support costs were $1 million. However, there is a growing concern that some customers require a disproportionate share of the sales and support resources, and the true profitability of the customers is unknown. Data were collected to support an analysis of customer profitability:

Required:

1. Management felt the easiest way to allocate the sales and support costs was based on the total revenue. Using total revenue as the allocation base, determine the profitability of each of the five customers.

2. Management felt that because the data revealed some customers require a disproportionate share of sales and support resources, activity-based costing should be used to determine customer profitability. Use ABC to prepare a customer profitability analysis.

Ellie Mosk, CEO of X-Space Industries, decided to expand the company’s product offering beyond the core model rocket business. After investigation, she decided to set up a separate division to design and manufacture products for the drone market. Several companies were interested in having X-Space develop these drones, and financial results, to date, have been encouraging. Revenue was $4 million, gross margins have been running about 40%, and the customer sales and support costs were $1 million. However, there is a growing concern that some customers require a disproportionate share of the sales and support resources, and the true profitability of the customers is unknown. Data were collected to support an analysis of customer profitability: Activity Cost Driver Total Cost Sales visits Sales visit days $ 478,000 Product modifications Number of modifications 268,000 Phone calls Number of minutes 92,800 E-mail/electronic communications Number of communications 170,000 $ 1,008,800 Customer Revenue Gross Profit Visit Days Modifications Phone Minutes Electronic Communications A $ 392,000 $ 142,000 15 15 1,110 625 B 492,000 192,000 25 15 1,200 875 C 592,000 222,000 40 40 1,450 1,080 D 1,080,000 412,000 90 60 1,800 2,080 E 1,420,000 582,000 100 70 2,200 2,330 Totals $ 3,976,000 $ 1,550,000 270 200 7,760 6,990 Required: 1. Management felt the easiest way to allocate the sales and support costs was based on the total revenue. Using total revenue as the allocation base, determine the profitability of each of the five customers. 2. Management felt that because the data revealed some customers require a disproportionate share of sales and support resources, activity-based costing should be used to determine customer profitability. Use ABC to prepare a customer profitability analysis.

tarcups Coffee Company is launching a new sustainability initiative that would reward customers for purchasing a reusable cup. During the cup promotion, customers would pay an extra $1.00 for the reusable cup and would receive a 30% discount each time they return with the cup to buy a cup of coffee.

Each week Starcups serves 57,000 customers who purchase an average of 2.50 cups of coffee per week (142,500 cups total). Starcups’s contribution margin income statement for a typical week is shown below:

Assume the new cup promotion is expected to impact sales volume, revenue, fixed, and variable costs as follows:

• Starcups estimates that 25% of its current customers (14,250) will participate in the promotion. The remainder of its existing customer base (42,750) will continue to buy an average of 2.50 cups of coffee per week.
• Starcups expected to attract 6,700 new customers to participate in the promotion.
• Customers who participate in the promotion will pay an additional $1.00 for the reusable cup. They will then receive a 30% discount on repeat visits when they bring back their reusable cup.
• The additional variable cost of purchasing the reusable cup is $3.20. The variable cost savings of the paper cup is $.40.
• Starcups expects that customers who participate in the reusable cup promotion will visit an average of 4 times per week, including the first purchase of the reusable cup.
• Starcups will spend a total of $27,000 per week advertising the reusable cup promotion.

Required:

1. Prepare a contribution margin income statement to predict how the reusable cup promotion will impact weekly net operating income.

2. Compute the difference in total revenue, total variable costs, total contribution margin, total fixed costs, and total operating income before and after the promotion.

3. How will this sustainability initiative impact the company’s triple bottom line?

Problem 5-49 Customer Profitability Analysis [LO 5-1, 5-6]

Ellie Mosk, CEO of X-Space Industries, decided to expand the company’s product offering beyond the core model rocket business. After investigation, she decided to set up a separate division to design and manufacture products for the drone market. Several companies were interested in having X-Space develop these drones, and financial results, to date, have been encouraging. Revenue was $4 million, gross margins have been running about 40%, and the customer sales and support costs were $1 million. However, there is a growing concern that some customers require a disproportionate share of the sales and support resources, and the true profitability of the customers is unknown. Data were collected to support an analysis of customer profitability:

Required:

1. Management felt the easiest way to allocate the sales and support costs was based on the total revenue. Using total revenue as the allocation base, determine the profitability of each of the five customers.

2. Management felt that because the data revealed some customers require a disproportionate share of sales and support resources, activity-based costing should be used to determine customer profitability. Use ABC to prepare a customer profitability analysis.

Problem 5-49 Customer Profitability Analysis [LO 5-1, 5-6]

Ellie Mosk, CEO of X-Space Industries, decided to expand the company’s product offering beyond the core model rocket business. After investigation, she decided to set up a separate division to design and manufacture products for the drone market. Several companies were interested in having X-Space develop these drones, and financial results, to date, have been encouraging. Revenue was $4 million, gross margins have been running about 40%, and the customer sales and support costs were $1 million. However, there is a growing concern that some customers require a disproportionate share of the sales and support resources, and the true profitability of the customers is unknown. Data were collected to support an analysis of customer profitability:

Required:

1. Management felt the easiest way to allocate the sales and support costs was based on the total revenue. Using total revenue as the allocation base, determine the profitability of each of the five customers.

2. Management felt that because the data revealed some customers require a disproportionate share of sales and support resources, activity-based costing should be used to determine customer profitability. Use ABC to prepare a customer profitability analysis.

Problem 5-49 Customer Profitability Analysis [LO 5-1, 5-6]

Ellie Mosk, CEO of X-Space Industries, decided to expand the company’s product offering beyond the core model rocket business. After investigation, she decided to set up a separate division to design and manufacture products for the drone market. Several companies were interested in having X-Space develop these drones, and financial results, to date, have been encouraging. Revenue was $4 million, gross margins have been running about 40%, and the customer sales and support costs were $1 million. However, there is a growing concern that some customers require a disproportionate share of the sales and support resources, and the true profitability of the customers is unknown. Data were collected to support an analysis of customer profitability:

Required:

1. Management felt the easiest way to allocate the sales and support costs was based on the total revenue. Using total revenue as the allocation base, determine the profitability of each of the five customers.

2. Management felt that because the data revealed some customers require a disproportionate share of sales and support resources, activity-based costing should be used to determine customer profitability. Use ABC to prepare a customer profitability analysis.

Every time a company prepares financial statements, adjusting entries are required. Generally, financial statements are prepared at the end of each month, the end of each quarter and at the end of each year.

Each adjusting entry affects a balance sheet account and an income statement account. For example, Adjusting Entries for Prepaid Assets or Fixed Assets involve decreasing the asset account and increasing the expense account. Adjusting entries are made in order properly follow GAAP.

1. Based on your review of Section 1 of Chapter 5, describe an adjusting journal entry that is needed at the end of an accounting period.
2. Why are adjusting entries important and how do they contribute to accurate financial reporting?
3. Accrual accounting is required under U.S. GAAP. One of the main principles of accrual accounting is the Matching Principle, also known as the Revenue Recognition Principle and the Expense Recognition Principle. Consult are liable resource online and in your own words, explain the difference between accrual basis accounting and cash basis accounting. How does this relate to the Matching Principle?

Morrisom National Bank has requested an analysis of checking account profitability by customer type. Customers are categorized according to the size of their account: low balances, medium balances, and high balances. The activities associated with the three different customer categories and their associated annual costs are as follows: Opening and closing accounts $300,000 Issuing monthly statements 450,000 Processing transactions 3,075,000 Customer inquiries 600,000 Providing automatic teller machine (ATM) services 1,680,000 Total cost $6,105,000 Additional data concerning the usage of the activities by the various customers are also provided: Account Balance Low Medium High Number of accounts opened/closed 22,500 4,500 3,000 Number of statements issued 675,000 150,000 75,000 Processing transactions 27,000,000 3,000,000 750,000 Number of telephone minutes 1,500,000 900,000 600,000 Number of ATM transactions 2,025,000 300,000 75,000 Number of checking accounts 57,000 12,000 6,000 Required: 1. Calculate a cost per account per year by dividing the total cost of processing and maintaining checking accounts by the total number of accounts. Round your answer to the nearest cent. $per account per year What is the average fee per month that the bank should charge to cover the costs incurred because of checking accounts? Round your answer to the nearest cent. $per month 2. Calculate a cost per account by customer category by using activity rates. Round your answers to the nearest cent. Cost Per Account Low $ Medium $ High $ 3. Currently, the bank offers free checking to all of its customers. The interest revenues average $90 per account; however, the interest revenues earned per account by category are $80, $100, and $165 for the low-, medium-, and high-balance accounts, respectively. Calculate the average profit per account (average revenue minus average cost from Requirement 1). Round your answer to the nearest cent. $per account Also calculate the profit per account by using the revenue per customer type and the unit cost per customer type calculated in Requirement 2. Round to the nearest cent. Use the minus sign to indicate a loss. Low-balance customers $per account Medium-balance customers $per account High-balance customers $per account

An air compressor rapidly fills a 0.3m3 tank (there is no heat transfer through the tank walls), initially containing air at 27 ?C, 1 atm, with air drawn from the atmosphere at 27? ?C, 1 atm. During filling, the relationship between the pressure and specific volume of the air in the tank is pv1.4 = constant. You can model the air as an ideal gas with constant specific heats at 300K.

Calculate (and show your work) the tank’s pressure and temperature, and the

work input to the compressor for the case of m/m1 = 1.5, where m1 is the initial mass in the tank and m is the mass in the tank at any time after filling starts

Plot the pressure, in atm of the air within the tank versus the ratio of m/m1

Plot the temperature, in ?C, of the air within the tank versus the ratio of m/m1

Plot the compressor work input, in Btu, versus m/m1.

For all three graphs, let m/m1 vary from 1 to 3 in increments of 0.1

An air compressor rapidly fills a 0.3m3 tank (there is no heat transfer through the tank walls), initially containing air at 27 ?C, 1 atm, with air drawn from the atmosphere at 27? ?C, 1 atm. During filling, the relationship between the pressure and specific volume of the air in the tank is pv1.4 = constant. You can model the air as an ideal gas with constant specific heats at 300K.

Calculate (and show your work) the tank’s pressure and temperature, and the

work input to the compressor for the case of m/m1 = 1.5, where m1 is the initial mass in the tank and m is the mass in the tank at any time after filling starts

Plot the pressure, in atm of the air within the tank versus the ratio of m/m1

Plot the temperature, in ?C, of the air within the tank versus the ratio of m/m1

Plot the compressor work input, in Btu, versus m/m1.

For all three graphs, let m/m1 vary from 1 to 3 in increments of 0.1

Consider an electron confined in a one-dimensional infinite potential well having a width
of 0.4 nm. (a) Calculate the values of three longest wavelength photons emitted by the
electron as it transitions between the energy levels inside the well [3 pts.]. (b) When the
electron undergoes a transition from the n = 2 to the n = 1 level, what will be its emitted
energy and wavelength [2 pts.]. To which region of the electromagnetic spectrum does
this wavelength belong?

here are the constant and values provided

h = 6.62 × 10 -34 J – s; q = 1.602 × 10 -19 C; c = 3 × 10 8 m/s; ħ = h/2π; m e = 9.11 x 10 -31 kg; m p =
1.67 x 10 -27 kg; m n = 1.674929 x 10 -27 kg; 1 eV = 1.602 × 10 -19 J; 1 Å = 1 × 10 -10 m;
1 nm = 1 × 10 -9 m