Fabulous Finds sold $17,790 of merchandise in 20Y5, with the cost of the merchandise totaling $2,250. Fabulous Finds had the following expenses: sales salaries, $2,100; office salaries, $3,000; advertising expense, $1,200; office supplies, $700; office utilities, $1,400; depreciation on store equipment, $1,070; depreciation on office equipment, $1,800; delivery expense, $950; and insurance expense, $1,200. The company also had interest revenue of $2,200 and investment expense of $900. Prepare the company’s income statement for the fiscal year ended March 31.

QUESTION ONE

a. You are presented with the following information for Unilever Ghana Ltd.

            Fixed costs                             GH¢150,000

            Total costs                               GH¢ 400,000

            Sales (50,000 units)                 GH¢ 500,000

            Required:

            Calculate the following:

            (a) Break-even point in value terms and in units. (5marks)

            (b) Margin of safety in value and in units. (5marks)

            (c) Budgeted Profit for the period. (3marks)

            (d) What is the relationship between sales revenue and margin of safety? (2marks)   

b. State five (5) uses of the Cost- Volume- Profit (CVP) Analysis. (5marks)

In 2013, the Plumbing Company entered into a contract to construct a road for San Diego County for $12,000,000. The road was completed in 2015. Information related to the contract is as follows:

Calculate the amount of revenue and gross profit to be recognized in each of the years (2013, 2014, and 2015).

Suppose that Tomorrowland Speedway Incorporated is estimating cash flows for a new project.  The projections for the first year are as follows:

If the tax rate facing the firm is 34%, what is the project cash flow for the first year?

At the end of Wildhorse Co.’s fiscal year on November 30, 2019, these accounts appeared in its adjusted trial balance. Freight-In $7,600 Inventory 40,900 Purchases 585,200 Purchase Discounts 5,900 Purchase Returns and Allowances 2,800 Sales Revenue 1,164,700 Sales Returns and Allowances 20,000 Additional facts: 1. Merchandise inventory on November 30, 2019, is $51,800. 2. Wildhorse Co. uses a periodic system. Prepare an income statement through gross profit for the year ended November 30, 2019.

1. Draw the market for trash pick-up by local government monopoly provider. Qd = 3000 – P. The Marginal Revenue for the provider is 3000 – 2Q. Marginal Cost = Q. NOTE P is measured in cents.
   1. What price would maximize total surplus?
   2. If the government were to privatize the trash collection
      1. What Quantity will the new monopolist produce? What will be the price?
      2. Show the profits (producer surplus) of the new private monopoly.
      3. Show the dead weight loss created by the monopolist.
      4. Why might the government do this given your answers above?

1. Draw the market for trash pick-up by local government monopoly provider. Qd = 3000 – P. The Marginal Revenue for the provider is 3000 – 2Q. Marginal Cost = Q. NOTE P is measured in cents.
   1. What price would maximize total surplus?
   2. If the government were to privatize the trash collection
      1. What Quantity will the new monopolist produce? What will be the price?
      2. Show the profits (producer surplus) of the new private monopoly.
      3. Show the dead weight loss created by the monopolist.
      4. Why might the government do this given your answers above?

Aji Fatou can produce either apples or oranges on her farm and the explicit cost of production is the same for both. At the moment she’s growing apples. Her accountant tells her that she is making money. Aji Fatou’s friend, who is an economist, also tells her that she is making profits. This must mean that the revenue from growing apples is greater than

a.The explicit cost of growing apples

b.The revenues from growing oranges

c.The opportunity cost of growing apples

d.All of the above

Aji Fatou can produce either apples or oranges on her farm and the explicit cost of production is the same for both. At the moment she’s growing apples. Her accountant tells her that she is making money. Aji Fatou’s friend, who is an economist, also tells her that she is making profits. This must mean that the revenue from growing apples is greater than

a.The explicit cost of growing apples

b.The revenues from growing oranges

c.The opportunity cost of growing apples

d.All of the above