Porter Company shows the following accounts in its partial unadjusted trial balance at December 31, 2017. Dr Cr Cash $71,300 Accounts receivable 40,000 Trading securities 7,000 Available for sale securities 50,000 Allowance for Doubtful accounts 2,000 Furniture and Fixtures 181,000 Accumulated depreciation – F&F 14,000 Accounts Payable 10,800 Common Stock 104,000 Retained Earnings 75,000 Service Revenue 324,100 Insurance expense 11,300 Salaries Expense 149,700 Rent Expense 15,600 TOTALS $527,900 $527,900 Additional Information 1. On May 1, 2017, the company paid $8,700 to renew its comprehensive insurance coverage for one year. The premium on the previous 1-year policy, which expired on April 30, 2017, was $7,800. 2. Bad debts are estimated at 10% of gross accounts receivable. 3. On December 1, 2017, the company paid $2,400, for two months of rent, beginning on that date. 4. The company received $12,000 on November 1, 2017 from a customer for 3 months’ worth of services which will be provided by Porter in 2018. The company recorded the entire $12,000 in Service Revenue. 5. Employees are paid bi-weekly on Friday. December 31st fell on a Sunday. Employees average $1,000 for a five day work week. All salaries were paid in full on Friday, December 22nd for the week ended December 22nd.   

Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home delivery services. The pizzeria’s owner has determined that the shop has two major cost drivers—the number of pizzas sold and the number of deliveries made.

The pizzeria’s cost formulas appear below:

In November, the pizzeria budgeted for 1,770 pizzas at an average selling price of $14 per pizza and for 210 deliveries.

Data concerning the pizzeria’s actual results in November appear below:

Required:

1. Complete the flexible budget performance report that shows both revenue and spending variances and activity variances for the pizzeria for November. (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.)

Problem 9-19 More Than One Cost Driver [LO9-2, LO9-3]

Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home delivery services. The pizzeria’s owner has determined that the shop has two major cost drivers—the number of pizzas sold and the number of deliveries made.

The pizzeria’s cost formulas appear below:

In November, the pizzeria budgeted for 1,710 pizzas at an average selling price of $20 per pizza and for 190 deliveries.

Data concerning the pizzeria’s actual results in November appear below:

Required:

1. Compute the revenue and spending variances for the pizzeria for November. (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.)

The results for July for Brahms & Sons follow:  

Required:

Prepare a profit variance analysis for Brahms & Sons. ( Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)

Waves Corp., which has a calendar fiscal year, purchased its only depreciable capital asset on 1 January 2013. Information related to the asset:

   Original cost $900,000

Estimated residual value 107,000

Depreciation method Declining balance

Depreciation rate 30%

In 2015, Waves decreased the estimated residual value to $33,800, and increased the depreciation rate to 40%. Both changes are the result of experience with the asset and revised expectations about the pattern of usage.

Additional information:

Required:
1-a. Calculate the ending 2015 balance of accumulated depreciation.
1-b. Prepare the 2015 entry for depreciation. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
2. Provide the condensed comparative statement of comprehensive income for 2015, including disclosures related to the accounting change.

The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses in its budgeting and performance reports—the number of courses and the total number of students. For example, the school might run two courses in a month and have a total of 64 students enrolled in those two courses. Data concerning the company’s cost formulas appear below:

For example, administrative expenses should be $3,600 per month plus $43 per course plus $4 per student. The company’s sales should average $870 per student.

The company planned to run four courses with a total of 64 students; however, it actually ran four courses with a total of only 56 students. The actual operating results for September appear below:

Required:

1. Prepare the company’s planning budget for September.

Prepare the company’s planning budget for September.

3. Calculate the revenue and spending variances for September.

EZ-Tax is a tax accounting practice with partners and staff members. Each billable hour of partner time has a $550 budgeted price and $270 budgeted variable cost. Each billable hour of staff time has a budgeted price of $130 and a budgeted variable cost of $60. For the most recent year, the partnership budget called for 8,700 billable partner-hours and 34,600 staff-hours. Actual results were as follows:

Required:

a. Compute the sales price variance. (Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)

b. Compute the total sales activity variance. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)

c. Compute the total sales mix variance. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)

d. Compute the total sales quantity variance. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)

Natalie had a very busy December. At the end of the month, after journalizing and posting the December transactions and adjusting entries, Natalie prepared the following adjusted trial balance.

Using the information in the adjusted trial balance, do the following.

1 ) Prepare an income statement for the 2 months ended December 31, 2019

2 ) Prepare an retained earnings statement for the 2 months ended December 31, 2019.

3 ) Prepare a classified balance sheet at December 31, 2019. The note payable has a stated interest rate of 6%, and the principal and interest are due on November 16, 2018

4 ) Natalie has decided that her year-end will be December 31, 2019. Prepare closing entries as of December 31, 2019

5 ) Prepare a post closing trial balance

You are the manager of a theater. At present, the theater charges the same admission price of $8 to all customers, regardless of age. You propose a two-tier pricing scheme: $5 for children under the age of 12 and $10 for adults. You tell your supervisor that your proposal is likely to increase revenue. "What must be true about the price elasticity of demand if your proposal is to achieve its goal of raising revenue?

1) Explain the concepts of cross-price elastic of demand, using one of the examples in the table above. What does a positive or negative value indicate? When doing elasticity of demand what is the sign always for a normal good?

2)Explain the concepts of income elasticity using one of the items in the table above. What does a positive value indicate? What about a negative value indicate?

3) When the price of Bob’s Coffee House increased by 8 percent, the quantity demanded of Alex’s Coffee House increased by 10 percent. What would be the cross- price elastic of demand between Bob’s & Alex’s coffee? What is the relationship between these two goods (are they compliments?)

4) Suppose the current price of oil is $90 a barrel and the quantity supplied is 800 million barrels per day. If the price elasticity of supply for oil in the short run is estimated at 0.5, use the midpoint formula to calculate the percentage change in quantity supplied when the price of oil rises to $98 a barrel.

Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home delivery services. The pizzeria’s owner has determined that the shop has two major cost drivers—the number of pizzas sold and the number of deliveries made. The pizzeria’s cost formulas appear below: Fixed Cost per Month Cost per Pizza Cost per Delivery Pizza ingredients $ 4.70 Kitchen staff $ 5,970 Utilities $ 640 $ 0.60 Delivery person $ 3.40 Delivery vehicle $ 660 $ 1.80 Equipment depreciation $ 424 Rent $ 1,930 Miscellaneous $ 760 $ 0.06 In November, the pizzeria budgeted for 1,650 pizzas at an average selling price of $18 per pizza and for 250 deliveries. Data concerning the pizzeria’s actual results in November appear below: Actual Results Pizzas 1,750 Deliveries 230 Revenue $ 32,080 Pizza ingredients $ 7,750 Kitchen staff $ 5,910 Utilities $ 900 Delivery person $ 782 Delivery vehicle $ 992 Equipment depreciation $ 424 Rent $ 1,930 Miscellaneous $ 808 Required: 1. Complete the flexible budget performance report that shows both revenue and spending variances and activity variances for the pizzeria for November. (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.)