Which of the following liabilities usually requires the use of an estimate when it is first recorded?
Warranty obligation
Mortgage payable
Accounts payable
Unearned revenue
In: Accounting
Which one of the following accounts is closed at year-end?
Multiple Choice
Prepaid insurance
Office supplies expense
Accumulated Depreciation
Unearned revenue
In: Accounting
Which of the following are items reported on a firm's balance sheet?
Sales revenue.
Cost of goods sold.
Net income.
Current assets.
None of these are correct.
In: Finance
Briefly contrast when losses will be the smallest for a perfectly competitive firm based on total revenues with when losses for such a firm will be smallest based on marginal revenue.
In: Accounting
Briefly contrast when losses will be the smallest for a perfectly competitive firm based on total revenues with when losses for such a firm will be smallest based on marginal revenue.
In: Economics
Fiduciary funds are accounted for in a manner similar to which of the following funds?
In: Finance
In: Economics
What is Supply Side Economics? Do you think that reducing taxes and tax rates can actually increase government revenue? Why or why not??
In: Economics
write one page paper about profit margin & Annual Revenue Across 5-10 years , Annual Growth , & forecasts of Domino's Pizza.
In: Finance
| Part 1 | ||||||||||||
| Aeronautics Company designs and manufactures electronic control systems for commercial airlines. | ||||||||||||
| Aeronautics Company does contract work for the two major aircraft makers and three other companies that make the narrow-body commercial jets. | ||||||||||||
| This is a very competitive field that Aeronautics Company operates in. | ||||||||||||
| It is imperative they manage the non-manufacturing overhead costs effectively in order to achieve an acceptable net profit margin. | ||||||||||||
| With declining profit margins in recent years, the CEO has become concerned that the cost of obtaining contracts and maintaining relations with its five customers may be getting out of hand. | ||||||||||||
| You have been hired to conduct a customer profitability analysis. | ||||||||||||
| Below is applicable revenue and cost information you should include in your customer profitability analysis. | ||||||||||||
| Sales | ||||||||||||
| Customer 1 | $18,000,000 | |||||||||||
| Customer 2 | 13,000,000 | |||||||||||
| Customer 3 | 4,000,000 | |||||||||||
| Customer 4 | 5,000,000 | |||||||||||
| Customer 5 | 4,000,000 | |||||||||||
| $44,000,000 | ||||||||||||
| Cost of Good Sold (COGS) as a percentage of sales is the following: | 80% | of Total Sales generated | ||||||||||
| Aeronautics Company selling and customer support team receives the following sales commissions on each customer account: | 6% | Sales generated per customer | ||||||||||
| The accounting staff determined the additional selling and customer support expenses related to the following four activity cost pools and the cost per activity. | ||||||||||||
| Usage of cost driver per customer | ||||||||||||
| Activity | Activity Cost Driver Data | Cost per unit of activity | Customer 1 | Customer 2 | Customer 3 | Customer 4 | Customer 5 | |||||
| 1. Sales Visits | Number of visit days | $1,300 | 106 | 130 | 52 | 34 | 16 | |||||
| 2. Product adjustments | Number of adjustments | 1,250 | 23 | 36 | 10 | 6 | 5 | |||||
| 3. Phone and email contracts | Number of calls/contracts | 150 | 220 | 354 | 180 | 138 | 104 | |||||
| 4. Promotion and entertainment events | Number of events | 1,400 | 82 | 66 | 74 | 18 | 10 | |||||
| In addition to the above, the sales staff used the corporate jet for trips to customers at a cost per hour as stated below and jet hours used per customer as follows: | ||||||||||||
| There is a cost of | $900 | hour | ||||||||||
| Hours used of jet | ||||||||||||
| Customer 1 | 24 | |||||||||||
| Customer 2 | 36 | |||||||||||
| Customer 3 | 5 | |||||||||||
| Customer 4 | 0 | |||||||||||
| Customer 5 | 6 | |||||||||||
| Required: | ||||||||||||
| 1. Develop a customer profitability analysis for Aeronautics Company that shows the sales, cost of goods sold, gross profit on sales, and all costs that can be assigned to the five customers. | ||||||||||||
| Include the customer profitability ratio for each customer and the company. Make sure you use cell references to make all your calculations. | ||||||||||||
| 2. What type of actions might the company take as a result of this analysis? You need to specifically reference the different customers in the analysis you have performed in your answer to this question. | ||||||||||||
| Solution: | Make sure you use cell references to make all your calculations. | |||||||||||
In: Accounting