Kennedy Company is thinking about extending trade credit to new customers. This will increase the annual sales by $510,000 if credit is extended to these customers. Of the new accounts receivable related to these sales, 11% will be uncollectible. Additional collection costs will be 8% of sales. Besides, production and selling costs will be 65% of sales. The company is in a 30% tax bracket.

11. What is the amount of additional collection costs? $40,800 $56,100 $331,500 $510,000 None of the above

12. What is the profit on the new sales? $24,480 $57,120 $81,600 $510,000 None of the above

13. What is the percentage return on the new sales? 4.80% 8% 11.20% 16% None of the above

14. What is the amount of the new investment in accounts receivable if the accounts receivable are turned over 3 times a year? $110,500 $170,000 $171,360 $331,500 None of the above

15. What is the return on investment, assuming that the only new investment will be in accounts receivable? 8% 14.40% 33.60% 51.69% None of the above

Vulcan Flyovers offers scenic overflights of Mount St. Helens, the volcano in Washington State that explosively erupted in 1982. Data concerning the company’s operations in July appear below: Vulcan Flyovers Operating Data For the Month Ended July 31 Actual Results Flexible Budget Planning Budget Flights (q) 60 60 58 Revenue ($350.00q) $ 16,300 $ 21,000 $ 20,300 Expenses: Wages and salaries ($3,800 + $92.00q) 9,276 9,320 9,136 Fuel ($31.00q) 2,028 1,860 1,798 Airport fees ($800 + $33.00q) 2,660 2,780 2,714 Aircraft depreciation ($10.00q) 600 600 580 Office expenses ($240 + $1.00q) 468 300 298 Total expense 15,032 14,860 14,526 Net operating income $ 1,268 $ 6,140 $ 5,774 The company measures its activity in terms of flights. Customers can buy individual tickets for overflights or hire an entire plane for an overflight at a discount. Required: 1. Prepare a flexible budget performance report for July that includes revenue and spending variances and activity variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Vulcan Flyovers offers scenic overflights of Mount St. Helens, the volcano in Washington State that explosively erupted in 1982. Data concerning the company’s operations in July appear below:

The company measures its activity in terms of flights. Customers can buy individual tickets for overflights or hire an entire plane for an overflight at a discount.

Required:

1. Prepare a flexible budget performance report for July that includes revenue and spending variances and activity variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Vulcan Flyovers offers scenic overflights of Mount St. Helens, the volcano in Washington State that explosively erupted in 1982. Data concerning the company’s operations in July appear below: Vulcan Flyovers Operating Data For the Month Ended July 31 Actual Results Flexible Budget Planning Budget Flights (q) 57 57 55 Revenue ($355.00q) $ 16,400 $ 20,235 $ 19,525 Expenses: Wages and salaries ($3,500 + $86.00q) 8,370 8,402 8,230 Fuel ($31.00q) 1,935 1,767 1,705 Airport fees ($850 + $31.00q) 2,482 2,617 2,555 Aircraft depreciation ($11.00q) 627 627 605 Office expenses ($230 + $1.00q) 455 287 285 Total expense 13,869 13,700 13,380 Net operating income $ 2,531 $ 6,535 $ 6,145 The company measures its activity in terms of flights. Customers can buy individual tickets for overflights or hire an entire plane for an overflight at a discount. Required: 1. Prepare a flexible budget performance report for July that includes revenue and spending variances and activity variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Vulcan Flyovers offers scenic overflights of Mount St. Helens, the volcano in Washington State that explosively erupted in 1982. Data concerning the company’s operations in July appear below:

The company measures its activity in terms of flights. Customers can buy individual tickets for overflights or hire an entire plane for an overflight at a discount.

Required:

1. Prepare a flexible budget performance report for July that includes revenue and spending variances and activity variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Vulcan Flyovers offers scenic overflights of Mount St. Helens, the volcano in Washington State that explosively erupted in 1982. Data concerning the company’s operations in July appear below:

The company measures its activity in terms of flights. Customers can buy individual tickets for overflights or hire an entire plane for an overflight at a discount.

Required:

1. Prepare a flexible budget performance report for July that includes revenue and spending variances and activity variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Vulcan Flyovers offers scenic overflights of Mount St. Helens, the volcano in Washington State that explosively erupted in 1982. Data concerning the company’s operations in July appear below: Vulcan Flyovers Operating Data For the Month Ended July 31 Actual Results Flexible Budget Planning Budget Flights (q) 62 62 60 Revenue ($350.00q) $ 16,400 $ 21,700 $ 21,000 Expenses: Wages and salaries ($3,800 + $90.00q) 9,340 9,380 9,200 Fuel ($33.00q) 2,210 2,046 1,980 Airport fees ($860 + $30.00q) 2,605 2,720 2,660 Aircraft depreciation ($9.00q) 558 558 540 Office expenses ($240 + $1.00q) 470 302 300 Total expense 15,183 15,006 14,680 Net operating income $ 1,217 $ 6,694 $ 6,320 The company measures its activity in terms of flights. Customers can buy individual tickets for overflights or hire an entire plane for an overflight at a discount. Required: 1. Prepare a flexible budget performance report for July that includes revenue and spending variances and activity variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Vulcan Flyovers offers scenic overflights of Mount St. Helens, the volcano in Washington State that explosively erupted in 1982. Data concerning the company’s operations in July appear below:

The company measures its activity in terms of flights. Customers can buy individual tickets for overflights or hire an entire plane for an overflight at a discount.

Required:

1. Prepare a flexible budget performance report for July that includes revenue and spending variances and activity variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Vulcan Flyovers offers scenic overflights of Mount St. Helens, the volcano in Washington State that explosively erupted in 1982. Data concerning the company’s operations in July appear below:

The company measures its activity in terms of flights. Customers can buy individual tickets for overflights or hire an entire plane for an overflight at a discount.

Required:

1. Prepare a flexible budget performance report for July that includes revenue and spending variances and activity variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Vulcan Flyovers offers scenic overflights of Mount St. Helens, the volcano in Washington State that explosively erupted in 1982. Data concerning the company’s operations in July appear below: Vulcan Flyovers Operating Data For the Month Ended July 31 Actual Results Flexible Budget Planning Budget Flights (q) 55 55 53 Revenue ($350.00q) $ 16,400 $ 19,250 $ 18,550 Expenses: Wages and salaries ($3,600 + $91.00q) 8,563 8,605 8,423 Fuel ($31.00q) 1,873 1,705 1,643 Airport fees ($810 + $32.00q) 2,460 2,570 2,506 Aircraft depreciation ($10.00q) 550 550 530 Office expenses ($220 + $1.00q) 443 275 273 Total expense 13,889 13,705 13,375 Net operating income $ 2,511 $ 5,545 $ 5,175 The company measures its activity in terms of flights. Customers can buy individual tickets for overflights or hire an entire plane for an overflight at a discount. Required: 1. Prepare a flexible budget performance report for July that includes revenue and spending variances and activity variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)