9).Data concerning Cincinnati Supply Corp.'s, a supplier to Kraft Foods, single product appear below:
Selling price per unit: $150.00
Variable expense per unit: $49.50
Fixed expense per month: $138,690
The break-even in monthly dollar sales is closest to:
Group of answer choices
a). $207,000 b). $138,690 c). $420,273 d).$255,321
10).Data for March for Cincinnati Supply Corp., a supplier to Proctor and Gamble, and its two major divisions, Hair Care and Skin Care, appear below:
Sales revenue, Hair Care $500,000
Variable expenses, Hair Care $300,000
Sales revenue, Skin Care $750,000
Variable expenses, Skin Care $325,000
In addition, total fixed expenses are $ 500,000. Of that amount $75,000 is traceable to the Hair Care division and $150,000 is traceable to the Skin Care division.
The breakeven in sales dollars of the Hair Care division is:
Group of answer choices
a). $125,000 b).$187,500 c).$263,158 d).$200,000
11).Data for March for Cincinnati Supply Corp., a supplier to Proctor and Gamble, and its two major divisions, Hair Care and Skin Care, appear below:
Sales revenue, Hair Care $500,000
Variable expenses, Hair Care $300,000
Sales revenue, Skin Care $750,000
Variable expenses, Skin Care $325,000
In addition, total fixed expenses are $ 500,000. Of that amount $75,000 is traceable to the Hair Care division and $150,000 is traceable to the Skin Care division.
The segment margin of the Skin Care division is:
Group of answer choices
a). $275,000 b).$125,000 c).$425,000 d).$200,000
12).Cincinnati Supply Corp., a supplier to Kraft Foods, has two divisions: the Alpha Division and the Charlie Division. The Alpha Division has sales of $230,000, variable expenses of $131,100, and traceable fixed expenses of $63,300. The Charlie Division has sales of $540,000, variable expenses of $291,600 and traceable fixed expenses of $120,700. The total amount of common fixed expenses not traceable to the individual divisions is $119,200. What is the breakeven in sales for Charlie division?
Group of answer choices:
a).$147,209 b).$262,391 c).$521,522 d).$340,509
In: Accounting
|
AirQual Test Corporation provides on-site air quality testing services. The company has provided the following data concerning its operations: |
|
Fixed Component per Month |
Variable Component per Job |
Actual Total for February |
||||
| Revenue | $ | 276 | $ | 27,610 | ||
| Technician wages | $ | 8,200 | $ | 8,050 | ||
| Mobile lab operating expenses | $ | 4,900 | $ | 29 | $ | 8,250 |
| Office expenses | $ | 2,300 | $ | 4 | $ | 2,590 |
| Advertising expenses | $ | 1,570 | $ | 1,640 | ||
| Insurance | $ | 2,890 | $ | 2,890 | ||
| Miscellaneous expenses | $ | 980 | $ | 1 | $ | 395 |
|
The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,900 plus $29 per job, and the actual mobile lab operating expenses for February were $8,250. |
| The company expected to work 110 jobs in February, but actually worked 106 jobs. |
| Required: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Complete the flexible budget performance report showing AirQual Test Corporation’s revenue and spending variances and activity variances for February. (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.) |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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In: Accounting
Washington County’s Board of Representatives is considering the construction of a longer runway at the county airport. Currently, the airport can handle only private aircraft and small commuter jets. A new, long runway would enable the airport to handle the midsize jets used on many domestic flights. Data pertinent to the board’s decision appear below.
| Cost of acquiring additional land for runway | $ | 88,500 | |
| Cost of runway construction | 300,000 | ||
| Cost of extending perimeter fence | 10,180 | ||
| Cost of runway lights | 49,000 | ||
| Annual cost of maintaining new runway | 24,500 | ||
| Annual incremental revenue from landing fees | 67,500 | ||
In addition to the preceding data, two other facts are relevant to the decision. First, a longer runway will require a new snowplow, which will cost $200,000. The old snowplow could be sold now for $20,000. The new, larger plow will cost $19,000 more in annual operating costs. Second, the County Board of Representatives believes that the proposed long runway, and the major jet service it will bring to the county, will increase economic activity in the community. The board projects that the increased economic activity will result in $136,000 per year in additional tax revenue for the county.
In analyzing the runway proposal, the board has decided to use a 10-year time horizon. The county’s hurdle rate for capital projects is 25 percent.
Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.)
In analyzing the runway proposal, the board has decided to use a 10-year time horizon. The county’s hurdle rate for capital projects is 25 percent. The County Board of Representatives believes that if the county conducts a promotional effort costing $30,000 per year, the proposed long runway will result in substantially greater economic development than was projected originally. However, the board is uncertain about the actual increase in county tax revenue that will result.
Required:
Suppose the board builds the long runway and conducts the promotional campaign. What would the increase in the county’s annual tax revenue need to be in order for the proposed runway’s internal rate of return to equal the county’s hurdle rate of 25 percent? (Round intermediate and final answer to the nearest dollar amount.)
Required increased tax reveune_________________
In: Accounting
P2-2 (you can complete using journal entry or T-account format)
Darlene Cook Company engaged in the following transactions during the month of
July:
July 1 Acquired land for $10,000. The company paid cash.
8. Billed customers for $3,000. This represents an increase in revenue. The customer has
been billed and will pay at a later date. An asset, accounts receivable, has been created.
12. Incurred a repair expense for repairs of $600. Darlene Cook Company agreed to pay in 60 days. This transaction involves an increase in accounts payable and repair expense.
15. Received a check for $500 from a customer who was previously billed. This is a reduction in accounts receivable.
20. Paid $300 for supplies. This was previously established as a liability, account payable. Paid wages in the amount 24. of $400. This was for work performed during July.
Required Record the transactions, using T-accounts.
P2-3 (you can complete using journal entry or T-account format)
Gaffney Company had these adjusting entry situations at the end of December.
1. On July 1, Gaffney Company paid $1,200 for a one-year insurance policy. The policy was for the period July 1 through June 30. The transaction was recorded as prepaid insurance and a reduction in cash.
2. On September 10, Gaffney Company purchased $500 of supplies for cash. The purchase was recorded as supplies. On December 31, it was determined that various supplies had been consumed in operations and that supplies costing $200 remained on hand.
3. Gaffney Company received $1,000 on December 1 for services to be performed in the following year. This was recorded on December 1 as an increase in cash and as revenue. As of December 31, this needs to be recognized as Unearned Revenue, a liability account.
4. As of December 31, interest charges of $200 have been incurred because of borrowed funds. Payment will not be made until February. A liability for the interest needs to be recognized, as does the interest expense.
5. As of December 31, a $500 liability for salaries needs to be recognized.
6. As of December 31, Gaffney Company had provided services in the amount of $400 for
Jones Company. An asset, Accounts Receivable, needs to be recognized along with the revenue.
Required Record the adjusting entries at December 31, using T-accounts.
In: Accounting
During 2020, Flint Company started a construction job with a contract price of $1,610,000. The job was completed in 2022. The following information is available.
|
2020 |
2021 |
2022 |
||||
|---|---|---|---|---|---|---|
|
Costs incurred to date |
$393,900 | $760,380 | $1,059,000 | |||
|
Estimated costs to complete |
616,100 | 341,620 | –0– | |||
|
Billings to date |
299,000 | 905,000 | 1,610,000 | |||
|
Collections to date |
268,000 | 818,000 | 1,421,000 |
Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used.
|
Gross profit recognized in 2020 |
$enter a dollar amount |
|
|---|---|---|
|
Gross profit recognized in 2021 |
$enter a dollar amount |
|
|
Gross profit recognized in 2022 |
$enter a dollar amount |
List of Accounts
Prepare all necessary journal entries for 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. For costs incurred use account Materials, Cash, Payables.)
|
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|
|
enter an account title to record cost of construction |
enter a debit amount |
enter a credit amount |
|
enter an account title to record cost of construction |
enter a debit amount |
enter a credit amount |
|
(To record cost of construction.) |
||
|
enter an account title to record progress billings |
enter a debit amount |
enter a credit amount |
|
enter an account title to record progress billings |
enter a debit amount |
enter a credit amount |
|
(To record progress billings.) |
||
|
enter an account title to record collections |
enter a debit amount |
enter a credit amount |
|
enter an account title to record collections |
enter a debit amount |
enter a credit amount |
|
(To record collections.) |
||
|
enter an account title to recognize revenue |
enter a debit amount |
enter a credit amount |
|
enter an account title to recognize revenue |
enter a debit amount |
enter a credit amount |
|
enter an account title to recognize revenue |
enter a debit amount |
enter a credit amount |
|
(To recognize revenue.) |
List of Accounts
Compute the amount of gross profit to be recognized each year, assuming the completed-contract method is used.
|
2020 |
2021 |
2022 |
||||
|---|---|---|---|---|---|---|
|
Gross profit |
$enter a dollar amount |
$enter a dollar amount |
$enter a dollar amount |
In: Accounting
During 2020, Nash Company started a construction job with a contract price of $1,620,000. The job was completed in 2022. The following information is available.
|
2020 |
2021 |
2022 |
||||
|---|---|---|---|---|---|---|
|
Costs incurred to date |
$444,400 | $867,420 | $1,060,000 | |||
|
Estimated costs to complete |
565,600 | 230,580 | –0– | |||
|
Billings to date |
301,000 | 904,000 | 1,620,000 | |||
|
Collections to date |
272,000 | 814,000 | 1,411,000 |
Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used.
|
Gross profit recognized in 2020 |
$enter a dollar amount |
|
|---|---|---|
|
Gross profit recognized in 2021 |
$enter a dollar amount |
|
|
Gross profit recognized in 2022 |
$enter a dollar amount |
List of Accounts
Question Part Score
--/9
Prepare all necessary journal entries for 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. For costs incurred use account Materials, Cash, Payables.)
|
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|
|
enter an account title to record cost of construction |
enter a debit amount |
enter a credit amount |
|
enter an account title to record cost of construction |
enter a debit amount |
enter a credit amount |
|
(To record cost of construction.) |
||
|
enter an account title to record progress billings |
enter a debit amount |
enter a credit amount |
|
enter an account title to record progress billings |
enter a debit amount |
enter a credit amount |
|
(To record progress billings.) |
||
|
enter an account title to record collections |
enter a debit amount |
enter a credit amount |
|
enter an account title to record collections |
enter a debit amount |
enter a credit amount |
|
(To record collections.) |
||
|
enter an account title to recognize revenue |
enter a debit amount |
enter a credit amount |
|
enter an account title to recognize revenue |
enter a debit amount |
enter a credit amount |
|
enter an account title to recognize revenue |
enter a debit amount |
enter a credit amount |
|
(To recognize revenue.) |
List of Accounts
Question Part Score
--/6
Compute the amount of gross profit to be recognized each year, assuming the completed-contract method is used.
|
2020 |
2021 |
2022 |
||||
|---|---|---|---|---|---|---|
|
Gross profit |
$enter a dollar amount |
$enter a dollar amount |
$enter a dollar amount |
In: Accounting
You have been hired as a project management consultant to assist the Acme Company in evaluating two different project proposals they are considering. Proposal A calls for the construction of a new plant which will require three years to complete and will have much greater capacity than the old plant. Because the plant will have to be built on the current site, the old plant will have to be razed. Proposal B involves the renovation of this plant. This renovation will require two years to complete, but the plant can remain in operation in a reduced capacity during this upgrade. Once the renovation is complete revenue will be increased by 25% per year, however annual maintenance will be 50% higher than Proposal A.
Proposal A: Build New Plant
Year1 Year2 Year3 Year4 Year5 Year6 Year7 Year8 Year9 Year10
Revenue 0 0 0 400 800 800 800 800 800 800
Expense 800 600 600 50 50 50 50 50 50 50
Proposal B: Renovate Existing Plant
Year1 Year2 Year3 Year4 Year5 Year6 Year7 Year8 Year9 Year10
Revenue 100 100 350 350 350 350 350 350 350 350
Expense 500 500 75 75 75 75 75 75 75 75
Questions:
a. What is the profit associated with the project carried out in Proposal A? Proposal B?
b. When does payback occur on the project carried out in Proposal A? Proposal B?
c. What is the present value of revenue for the project carried out in Proposal A? Proposal B? (In computing present value, do not discount the value for the first year being examined.) (Assume i = 0.10)
d. What is the present value of expense for the project carried out in Proposal A? Proposal B? (In computing present value, do not discount the value for the first year being examined.) (Assume i = 0.10)
e. What is net present value for the project described in Proposal A? Proposal B? (In computing present value, do not discount the value for the first year being examined.) (Assume i = 0.10)
f. What is the internal rate of return for the project described in Proposal A? Proposal B?
g. Which project would you recommend? Why? What are the merits? What are the risks?
In: Finance
Luke Corporation produces a variety of products, each within their own division. Last year, the managers at Luke developed and began marketing a new chewing gum, Bubbs, to sell in vending machines. The product, which sells for $5.60 per case, has not had the market success that managers expected and the company is considering dropping Bubbs.
The product-line income statement for the past 12 months follows:
| Revenue | $ | 14,692,650 | ||||
| Costs | ||||||
| Manufacturing costs | $ | 14,443,895 | ||||
| Allocated corporate costs (@5%) | 734,633 | 15,178,528 | ||||
| Product-line margin | $ | (485,878 | ) | |||
| Allowance for tax (@20%) | 97,175 | |||||
| Product-line profit (loss) | $ | (388,703 | ) | |||
All products at Luke receive an allocation of corporate overhead costs, which is computed as 5 percent of product revenue. The 5 percent rate is computed based on the most recent year’s corporate cost as a percentage of revenue. Data on corporate costs and revenues for the past two years follow:
| Corporate Revenue | Corporate Overhead Costs | ||||
| Most recent year | $ | 113,750,000 | $ | 5,687,500 | |
| Previous year | $ | 76,900,000 | 4,902,595 | ||
Roy O. Andre, the product manager for Bubbs, is concerned about whether the product will be dropped by the company and has employed you as a financial consultant to help with some analysis. In addition to the information given above, Mr. Andre provides you with the following data on product costs for Bubbs:
| Month | Cases | Production Costs |
| 1 | 213,500 | $1,151,328 |
| 2 | 220,700 | 1,173,828 |
| 3 | 218,400 | 1,182,481 |
| 4 | 234,500 | 1,198,023 |
| 5 | 250,400 | 1,200,327 |
| 6 | 243,500 | 1,221,173 |
| 7 | 223,700 | 1,196,199 |
| 8 | 250,700 | 1,239,274 |
| 9 | 242,300 | 1,237,726 |
| 10 | 256,100 | 1,249,825 |
| 11 | 253,700 | 1,254,260 |
| 12 | 262,700 | 1,284,951 |
1. Calculate the break-even for Bubbs in cases per month based on production fixed costs and the Contribution Margin calculated above.
2. Write out a profit formula for Bubbs using Q, CM, and FC as in the prior question. For the desired profit note the after tax profit is .05 P Q / (1-TX), where P is the selling price per case and TX is the tax rate. Now solve for Q to determine the number of case Bubbs must produce and sell per month to earn a 5% return on revenues
In: Accounting
Required information [The following information applies to the questions displayed below.] Washington County’s Board of Representatives is considering the construction of a longer runway at the county airport. Currently, the airport can handle only private aircraft and small commuter jets. A new, long runway would enable the airport to handle the midsize jets used on many domestic flights. Data pertinent to the board’s decision appear below. Cost of acquiring additional land for runway $ 82,500 Cost of runway construction 280,000 Cost of extending perimeter fence 19,908 Cost of runway lights 45,000 Annual cost of maintaining new runway 22,500 Annual incremental revenue from landing fees 57,500 In addition to the preceding data, two other facts are relevant to the decision. First, a longer runway will require a new snowplow, which will cost $180,000. The old snowplow could be sold now for $18,000. The new, larger plow will cost $16,000 more in annual operating costs. Second, the County Board of Representatives believes that the proposed long runway, and the major jet service it will bring to the county, will increase economic activity in the community. The board projects that the increased economic activity will result in $94,000 per year in additional tax revenue for the county. In analyzing the runway proposal, the board has decided to use a 10-year time horizon. The county’s hurdle rate for capital projects is 18 percent. Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) In analyzing the runway proposal, the board has decided to use a 10-year time horizon. The county’s hurdle rate for capital projects is 18 percent. The County Board of Representatives believes that if the county conducts a promotional effort costing $28,000 per year, the proposed long runway will result in substantially greater economic development than was projected originally. However, the board is uncertain about the actual increase in county tax revenue that will result. Required: Suppose the board builds the long runway and conducts the promotional campaign. What would the increase in the county’s annual tax revenue need to be in order for the proposed runway’s internal rate of return to equal the county’s hurdle rate of 18 percent? (Round intermediate and final answer to the nearest dollar amount.)
In: Accounting
1. These items are taken from the financial statements of
Grouper Corporation for 2022.
|
Retained earnings (beginning of year) |
$33,280 | |
|
Utilities expense |
2,110 | |
|
Equipment |
68,280 | |
|
Accounts payable |
22,570 | |
|
Cash |
15,070 | |
|
Salaries and wages payable |
5,840 | |
|
Common stock |
12,000 | |
|
Dividends |
12,000 | |
|
Service revenue |
69,290 | |
|
Prepaid insurance |
6,340 | |
|
Maintenance and repairs expense |
1,690 | |
|
Depreciation expense |
3,490 | |
|
Accounts receivable |
15,970 | |
|
Insurance expense |
2,310 | |
|
Salaries and wages expense |
38,290 | |
|
Accumulated depreciation—equipment |
22,570 |
Prepare a classified balance sheet as of December 31, 2022. (List Current Assets in order of liquidity.)
2. You are provided with the following information for Ayayai
Enterprises, effective as of its April 30, 2022,
year-end.
|
Accounts payable |
$844 | |
|
Accounts receivable |
910 | |
|
Accumulated depreciation—equipment |
670 | |
|
Cash |
1,370 | |
|
Common stock |
1,200 | |
|
Cost of goods sold |
1,070 | |
|
Depreciation expense |
325 | |
|
Dividends |
335 | |
|
Equipment |
2,520 | |
|
Income tax expense |
175 | |
|
Income taxes payable |
145 | |
|
Insurance expense |
220 | |
|
Interest expense |
410 | |
|
Inventory |
1,067 | |
|
Land |
3,200 | |
|
Mortgage payable |
3,600 | |
|
Notes payable (due March 31, 2023) |
161 | |
|
Prepaid insurance |
70 | |
|
Retained earnings (beginning) |
1,600 | |
|
Salaries and wages expense |
690 | |
|
Salaries and wages payable |
232 | |
|
Sales revenue |
5,200 | |
|
Stock investments (short-term) |
1,290 |
Prepare a classified balance sheet for Ayayai Enterprises as of April 30, 2022. (List Current Assets in order of liquidity.)
3. These financial statement items are for Pharoah Corporation
at year-end, July 31, 2022.
|
Salaries and wages payable |
$ 3,880 | |
|
Salaries and wages expense |
59,200 | |
|
Supplies expense |
17,000 | |
|
Equipment |
20,300 | |
|
Accounts payable |
4,100 | |
|
Service revenue |
67,800 | |
|
Rent revenue |
9,900 | |
|
Notes payable (due in 2025) |
2,900 | |
|
Common stock |
16,000 | |
|
Cash |
30,900 | |
|
Accounts receivable |
10,880 | |
|
Accumulated depreciation—equipment |
7,600 | |
|
Dividends |
4,000 | |
|
Depreciation expense |
5,600 | |
|
Retained earnings (beginning of the year) |
35,700 |
Prepare a classified balance sheet at July 31. (List Current Assets in order of liquidity.)
In: Accounting