The following revenue and expense figures relate to the first year of the rodeo.
Receipts
Contributions from sponsors $22,000
Receipts from ticket sales $28,971
Share of concession profits $1,513
Sale of programs $600
Total receipts $53,084
Expenses
Livestock contractor $26,000
Prize money $21,000
Contestant hospitality $3,341*
Sponsor signs for arena $1,900
Insurance $1,800
Ticket printing $1,050
Sanctioning fees $925
Entertainment $859
Judging fees $750
Port-a-potties $716
Rent $600
Hay for horses $538
Programs $500
Western hats to first 500 children $450
Hotel rooms for stock contractor $325
Utilities $300
Sand for arena $251
Miscellaneous fixed costs $105
Total expenses $61,410
Net loss $ (8,326)
*The club contracted with a local caterer to provide a tent and food for the contestants. The cost of the food was contingent on the number of contestants each evening. Information concerning the number of contestants and the costs incurred are as follows:
Contestants Total Cost
Friday 68 $998
Saturday 96 $1,243
Sunday 83 $1,100
$3,341
Break-even point in Dollars is fixed cost / contribution margin ratio
Since the variable is at 4% total revenue, the contribution margin ratio is 96% or .96
$51,000/ .96 = $53,125
Contributions from sponsors = $25,600
Amount from ticket sales for break-even = $27,525
Compute the break-even point in dollars of ticket sales assuming Adrian and Jonathan's assumptions are correct as given in the case. This requirement is to calculate break even in dollars. The amount you calculate will be from all sources of revenue including contributions from sponsors. The requirement is for ticket sales only. Contributions from sponsors is stated in the case as $25,600. As an example, let's say that using the break even formula you calculate break even in dollars as $60,000. This is not the answer for the requirement. You need the amount of ticket sales which would be the $60,000 less $25,600 or $34,400 in ticket sales. It is critical that you account for the contributions from the sponsors. The rest of the case deals with ticket sales revenue. If you don't calculate ticket sales correctly, all of the other case answers you get will be wrong.
Note: The case states that variable costs are 4% of total revenue. What must the contribution margin ratio be if variable costs are 4% of total revenue?
Section 2
Shelley has just learned you are calculating the break-even point in dollars of ticket sales. She is still convinced the Club can make a profit using the assumptions above (second bullet point above).
Calculate the dollars of ticket sales needed to earn a target profit of $6,000.
Calculate the dollars of ticket sales needed to earn a target profit of $12,000.
Are the facilities at the fairgrounds adequate to handle crowds needed to generate ticket revenues calculated above (third bullet point above) to earn a $6,000 profit? Show calculations to support your answers.
In: Accounting
Job Costs Using a Plantwide Overhead Rate Naranjo Company designs industrial prototypes for outside companies. Budgeted overhead for the year was $280,000, and budgeted direct labor hours were 16,000. The average wage rate for direct labor is expected to be $35 per hour. During June, Naranjo Company worked on four jobs. Data relating to these four jobs follow: Job 39 Job 40 Job 41 Job 42 Beginning balance $22,400 $35,100 $17,100 $1,900 Materials requisitioned 19,200 21,800 12,700 12,100 Direct labor cost 10,300 18,900 7,350 3,000 Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 110 percent of cost. (Naranjo had originally developed Job 40 to order for a customer; however, that customer was near bankruptcy and the chance of Naranjo being paid was growing dimmer. Naranjo decided to hold Job 40 in inventory while the customer worked out its financial difficulties. Job 40 is the only job in Finished Goods Inventory.) Jobs 41 and 42 remain unfinished at the end of the month.
Required:
1. Calculate the overhead rate based on direct labor cost.
% of direct labor cost
2. Set up a simple job-order cost sheet for all jobs in process during June.
Naranjo Company Job-Order Cost Sheets
Job 39 Job 40 Job 41 Job 42
Balance, June 1 $ $ $ $
Direct materials $ $ $ $
Direct Labor $ $ $ $
Total $ $ $ $
3. What if the expected direct labor rate at the beginning of the year was $28 instead of $35? What would the overhead rate be? If required, round your overhead rate answer to one decimal place.
New budgeted direct labor cost = $
New overhead rate = % of direct labor cost
In: Accounting
The General Manager of The Cougar Hotel would like you to take the balances for 20X7 and
20X8 and;
1. Prepare a comparative Summary Operating Statement that is in compliance with the USALI 11th Edition (i.e. make sure it is in the correct format, use the template found in the Income Statement module or in the “Other Course Resources” folder).
2. Once the Summary Operating Statement has been completed, perform a vertical and horizontal analysis of the statement.
THE COUGAR HOTEL 20X7 20X8
Administrative and General 1,426,678 1,460,830
Beverage Revenue 1,333,039 1,337,700
Building Wall Rent Received 250,000
Cell Tower Rent Received 500,000
Food and Beverage 3,999,116 4,122,300
Food and Beverage Expenses 4,265,724 4,340,000
Gain on Sale of Equipment 150,000
Inforamation and Telecommunications Systems 281,813 267,225
Insurance 264,200 285,040
Loss on Sale of Equipment 200,000
Management Fees 528,399 534,450
Miscellaneous Income 447,213 385,000
Property and Other Taxes 704,532 694,785
Property Operating and Maintenance 563,626 623,525
Recreation Department 440,333 450,450
Recreation Department Expenses 577,937 567,000
Replacement Reserve 1,409,065 1,425,200
Room Revenue 10,733,112 10,815,000
Rooms Department Expenses 2,992,887 3,010,000
Sales and Marketing 1,268,158 1,371,755
Spa Expenses 385,291 378,000
Spa Revenue 660,499 704,550
Utilities 792,599 748,230
CHECK FIGURES:
These are totals that you can use to check and see if your math is correct and also check if you have figures placed correctly.
20X7 20X8
Total Departmental Profit 9,391,473 9,520,000
Gross Operating Profit 5,058,599 5,048,435
EBITDA Less Replacement Reserve 2,452,403 2,508,960
In: Accounting
ABC Merchandise Sales completed the following transactions during the month of March (terms of all sales on credit are 2/10, n30):
March 2: Purchased merchandise inventory on credit from Johnson Industries, $57,200.
Invoice dated March 2, terms 2/10, n30.
March 3: Received a credit memo from Johnson Industries for unsatisfactory merchandise inventory purchased on March 2 and returned for credit, $700.
March 4: Sold merchandise inventory on credit to Farmers Supply, invoice #100,
$16,850 (cost of goods sold, $7,580).
March 7: Sold merchandise inventory on credit to The Country Store for $9,300; invoice #101 (cost of goods sold, $4,770).
March 10: Borrowed $25,000 cash by signing a long-term note payable with a local bank.
March 12: Issued cheque #302 to Johnson Industries in payment of the balance regarding the
March 2nd invoice, less the return of March 3rd.
March 17: Received payment from The Country Store regarding the sale of March 7.
March 18: Purchased store equipment on credit from Furnishing Inc. at a cost of $ 8,600, invoice dated March 15, terms n/30.
March 20: Sold merchandise inventory on credit to Miracle Mart for $17,365; invoice #102.
(cost of goods sold, $7,815).
March 22: Purchased merchandise inventory on credit from Smith Company, $41,370.
Invoice dated March 18, terms 2/10, n/30.
March 24: Sold merchandise inventory on credit to The Country Store for $4,300; invoice #103 (cost of goods sold, $ 1,935).
March 26: Miracle Mart returned defective merchandise purchased on credit on March 20 for $375. The merchandise was not returned to inventory.
March 30: Received payment from Farmers Supply regarding the sale of March 4.
March 31: Cash sales for the month of March were $12,300; cost of goods sold was $5,530.
March 31: Issued cheque # 303 to Payroll Bank to cover the payroll for March, $ 14,250.00.
Required
Prove the accuracy of the subsidiary ledgers. Prepare a Schedule of Accounts Receivable and a Schedule of Accounts Payable as at March 31, 2019.
In: Accounting
The Sai Kung Inn is a small family-run hotel in the New Territories. As a family-owned business, it relies mainly on traveler recommendations and on visitors to local Sai Kung residents. In particular, it ranks in the top 10% of TripAdvisor’s accommodations in Sai Kung. The Sai Kung Inn has 12 guest rooms, and to keep the operation running efficiently it employs two full-time reception staff, and three morning housekeeping staff.
Winnie is the hotel manager and the daughter of the property owner. She is considering to adopt a balanced scorecard approach for performance evaluation. She has identified a number of potential performance measures:
1) Number of items on hotel restaurant menu
2) Revenue
3) Percentage of reception staff completing hospitality and customer satisfaction course
4) Customer satisfaction with dining options
5) Average percentage occupancy
6) Number of restaurant staff completing cooking training courses
7) Percentage of cleaning staff completing housekeeping and hygiene courses
8) Average TripAdvisor rating
9) Number of guest complaints about room cleanliness
10) Average number of minutes taken to process guests’ check-in
11) Total profits
12) Frequency and quality of room cleaning
Required:
(a) Using the 12 performance measures suggested above, draw a balanced scorecard diagram for The Sai Kung Inn with the four main categories of the balanced scorecard, classifying each of the performance measures into one of the four categories. Draw arrows between individual performance measures to show causal links and indicate with a “+” or “–” whether the performance measure should increase or decrease.
(b) Winnie believes that The Sai Kung Inn’s occupancy rate is lower than her competitors because The Sai Kung Inn charges slightly higher prices and does not attract guests who prefer cheaper accommodation. Winnie believes that in order to improve the financial performance of The Sai Kung Inn, the company should focus on improving customer satisfaction to justify higher prices, instead of reducing costs to compete on price. She would like to improve the rank on TripAdvisor to be the top-rated accommodation in Sai Kung, by focusing on operational and staff improvements. Help Winnie develop two new performance measures to build into her balanced scorecard. For each performance measure you suggest, identify which category it would fit into, how to measure it, and how it relates to the organization goal.
In: Finance
|
Per month |
Per Sandwich |
||
|
Monthly fixed costs: |
Variable expenses: |
||
|
Wages of cook |
$ 1,200 |
Bread |
$0.20 |
|
Other |
$ 300 |
Vegetables |
$0.60 |
|
Total |
$ 1,500 |
Total |
$0.80 |
Mac planned a selling price of $1.20 per sandwich to lure many customers. He thinks atleast 60 extra bottles of orange juice can be sold each day because he has sanwiches available. Assume 30 days in a month.
How many sandwiches should he sell on average each day for it to be worthwhile for Mac to expand into sandwiches?
In: Accounting
Accrued Product Warranty
Lachgar Industries disclosed estimated product warranty payable for comparative years as follows:
( in millions)
Year 2 Year 1
Current estimated product warranty payable $12,333 $11,824
Noncurrent estimated product warranty payable 7,501 6,611
Total $19,834 $18,435
Presume that Lachgar’s sales were $160,705 million in Year 2. Assume that the total paid on warranty claims during Year 2 was $12,714 million.
a. The distinction between short- and long-term liabilities is important to creditors in order to accurately evaluate the near-term cash demands on the business relative to the quick current assets and other longer-term demands .
Feedback
Review the need for a classified balance sheet.
b. Provide the journal entry for the Year 2 product warranty expense.
Product Warranty Expense
Product Warranty Payable
In: Accounting
[The following information applies to the questions displayed below.] The following data pertain to the Aquarius Hotel Supply Company for the year just ended. Budgeted sales revenue
|
Budgeted sales revenue |
$ |
200,000 |
|
Budgeted manufacturing overhead |
364,000 |
|
|
Budgeted machine hours (based on practical capacity) |
10,000 |
|
|
Budgeted direct-labor hours (based on practical capacity) |
20,000 |
|
|
Budgeted direct-labor rate per hour |
13 |
|
|
Actual manufacturing overhead |
338,000 |
|
|
Actual machine hours |
11,000 |
|
|
Actual direct-labor hours |
18,000 |
|
|
Actual direct-labor rate per hour |
17 |
Required: 1. Compute the firm’s predetermined overhead rate for the year using each of the following common cost drivers: a. machine hours b. direct labor hours c. direct labor dollars
2. Calculate the overapplied or underapplied overhead for the year using each of the following cost drivers. a. machine hours b. direct labor hours c. direct labor dollars
In: Accounting
1. Watch the TED Talk by Bashar Wali, president of Provenance Hotel Group. Do you agree or disagree with what he discussed in his talk? Share your overall impressions and thoughts about what he had to share. Your response should be at least one full paragraph.
In: Nursing
In: Finance