The core business of Green Apple Ltd involves the sale of anti-virus software. The following took place during the financial year ended 30 June. The company earned $25 000 000 from the sale of software; $3 000 000 from update downloads; and $50 000 in interest from investing on the short-term money market. The company also received a $2000 discount arising out of the early settlement of a liability; and issued shares in exchange for $500 000 cash during the year. Page 3 of 7 HC1010 Accounting for Business Discuss whether the foregoing five financial items would meet the definition of income to the company during the year? Give reasons for your answer. Which, if any, of the items would meet the definition of revenue to the company for the year? Give reasons for your answer.
In: Accounting
Dividend revenue and interest revenue are reported in the income statement as a component of a company's net income
True or False
In: Accounting
marginal revenue equals marginal cost to maximize total revenue
In: Economics
Describe revenue management and explain tools used by revenue managers.
In: Accounting
Look for a company that has launched a new, creative product, a new process for making, selling, or distributing products and services, a new way of marketing products or services to customers. Describe the creativity and how management of this company supported or encouraged the change. Include a URL to the company website
In: Operations Management
Division A manufactures electronic circuit boards. The boards can be sold either to Division B of the same company or to outside customers. Last year, the following activity occurred in Division A:
| Selling price per circuit board | $ | 187 |
| Variable cost per circuit board | $ | 110 |
| Number of circuit boards: | ||
| Produced during the year | 21,400 | |
| Sold to outside customers | 14,500 | |
| Sold to Division B | 6,900 | |
Sales to Division B were at the same price as sales to outside
customers. The circuit boards purchased by Division B were used in
an electronic instrument manufactured by that division (one board
per instrument). Division B incurred $230 in additional variable
cost per instrument and then sold the instruments for $600
each.
Required:
1. Prepare income statements for Division A, Division B, and the company as a whole.
2. Assume Division A’s manufacturing capacity is 21,400 circuit boards. Next year, Division B wants to purchase 7,900 circuit boards from Division A rather than 6,900. (Circuit boards of this type are not available from outside sources.) From the standpoint of the company as a whole, should Division A sell the additional 1,000 circuit boards to Division B or continue to sell them to outside customers?
In: Accounting
Division A manufactures electronic circuit boards. The boards can be sold either to Division B of the same company or to outside customers. Last year, the following activity occurred in Division A:
| Selling price per circuit board | $ | 175 |
| Variable cost per circuit board | $ | 111 |
| Number of circuit boards: | ||
| Produced during the year | 21,400 | |
| Sold to outside customers | 15,400 | |
| Sold to Division B | 6,000 | |
Sales to Division B were at the same price as sales to outside
customers. The circuit boards purchased by Division B were used in
an electronic instrument manufactured by that division (one board
per instrument). Division B incurred $270 in additional variable
cost per instrument and then sold the instruments for $690
each.
Required:
1. Prepare income statements for Division A, Division B, and the company as a whole.
2. Assume Division A’s manufacturing capacity is 21,400 circuit boards. Next year, Division B wants to purchase 7,000 circuit boards from Division A rather than 6,000. (Circuit boards of this type are not available from outside sources.) From the standpoint of the company as a whole, should Division A sell the additional 1,000 circuit boards to Division B or continue to sell them to outside customers?
In: Accounting
Division A manufactures electronic circuit boards. The boards can be sold either to Division B of the same company or to outside customers. Last year, the following activity occurred in Division A:
| Selling price per circuit board | $ | 176 |
| Variable cost per circuit board | $ | 119 |
| Number of circuit boards: | ||
| Produced during the year | 20,700 | |
| Sold to outside customers | 15,700 | |
| Sold to Division B | 5,000 | |
Sales to Division B were at the same price as sales to outside
customers. The circuit boards purchased by Division B were used in
an electronic instrument manufactured by that division (one board
per instrument). Division B incurred $210 in additional variable
cost per instrument and then sold the instruments for $680
each.
Required:
1. Prepare income statements for Division A, Division B, and the company as a whole.
2. Assume Division A’s manufacturing capacity is 20,700 circuit boards. Next year, Division B wants to purchase 6,000 circuit boards from Division A rather than 5,000. (Circuit boards of this type are not available from outside sources.) From the standpoint of the company as a whole, should Division A sell the additional 1,000 circuit boards to Division B or continue to sell them to outside customers?
In: Accounting
Division A manufactures electronic circuit boards. The boards can be sold either to Division B of the same company or to outside customers. Last year, the following activity occurred in Division A:
| Selling price per circuit board | $ | 178 |
| Variable cost per circuit board | $ | 119 |
| Number of circuit boards: | ||
| Produced during the year | 21,100 | |
| Sold to outside customers | 15,500 | |
| Sold to Division B | 5,600 | |
Sales to Division B were at the same price as sales to outside
customers. The circuit boards purchased by Division B were used in
an electronic instrument manufactured by that division (one board
per instrument). Division B incurred $200 in additional variable
cost per instrument and then sold the instruments for $610
each.
Required:
1. Prepare income statements for Division A, Division B, and the company as a whole.
2. Assume Division A’s manufacturing capacity is 21,100 circuit boards. Next year, Division B wants to purchase 6,600 circuit boards from Division A rather than 5,600. (Circuit boards of this type are not available from outside sources.) From the standpoint of the company as a whole, should Division A sell the additional 1,000 circuit boards to Division B or continue to sell them to outside customers?
In: Finance
Instructions
Phillips Brothers Printers (PBP) provides printing
services to a wide variety of customers. For most jobs, PBP submits
a bid and uses the job cost system to accumulate costs, but bills
the bid amount to the customers. They do have several customers who
routinely have "out of the ordinary" jobs and PBP bills those on a
cost-plus basis, with the customer paying the actual costs plus a
predetermined profit percentage on the total cost.
Sally Phillips, controller for PBP, is approached by the company President who asks her to look for ways to charge more of the production costs to the cost-plus jobs. His logic is that since those customers will pay all the costs plus a profit, they can improve their overall profitability by shifting costs from bid jobs to cost-plus jobs.
Answer the following questions:
Is the President correct about the increase in overall
company profits?
What classification of cost is most likely to be able
to be increased on the cost-plus jobs? Why?
Is what the President proposes ethical? Why or why
not?
What would you do if you were Sally? Why?
If Sally does go along with this proposal, are there
risks to the company? What are they?
In: Accounting