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 $ 4.10 Kitchen staff $ 6,070 Utilities $ 690 $ 0.10 Delivery person $ 2.90 Delivery vehicle $ 710 $ 2.30 Equipment depreciation $ 464 Rent $ 2,030 Miscellaneous $ 810 $ 0.05 In November, the pizzeria budgeted for 1,800 pizzas at an average selling price of $15 per pizza and for 220 deliveries. Data concerning the pizzeria’s actual results in November appear below: Actual Results Pizzas 1,900 Deliveries 200 Revenue $ 29,130 Pizza ingredients $ 8,650 Kitchen staff $ 6,010 Utilities $ 925 Delivery person $ 580 Delivery vehicle $ 1,002 Equipment depreciation $ 464 Rent $ 2,030 Miscellaneous $ 838

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.)

Competency

Evaluate accounting-related legal and ethical business implications.

Scenario

During your weekly meeting, the Director of Accounting has shared with you the topics discussed at a recent Association of Certified Fraud Examiners (ACFE) meeting. Of particular interest was the agenda item about how some companies have gotten in regulatory trouble with the SEC over their revenue and expense recognition practices. While you both are confident that there are no issues relating to this at your company, you both decided that you wanted to learn more about these cases.

The Director of Accounting wants you to research two such cases and write a summary report to present at the next Accounting Department meeting. The director believes that understanding what has happened to other companies in this area of accounting can help prevent issues in your company.

The Director provides you with the SEC website that they have used in the past to do article searches: www.sec.gov

Instructions

You are asked to select two recent SEC actions against companies (not individuals) that relate to revenue and expense recognition and Prepare a Word document that:

1. summarizes reasons for the SEC actions.
2. identifies the SEC issues related to accounting data and/or operations and the remedial actions assigned and/or penalties given to the company.
3. critiques the remedial actions/penalties.
4. Gives an opinion as to whether you believe they will be effective in preventing future violations by the company.

Runner Interiors, an interior design company, has experienced a drop in business due to an increase in interest rates and a corresponding slowdown in remodeling projects. To stimulate business, the company is considering exhibiting at the Middleton Home and Garden Expo. The exhibit will cost the company $14,990 for space. At the show, Runner Interiors will present a slide show on a laptop, pass out brochures that were printed previously (the company printed more than needed), and show its portfolio of previous jobs.

The company estimates that revenue will increase by $40,020 over the next year as a result of the exhibit. For the previous year, profit was as follows:

Calculate the impact of the exhibit on company profit. (Round intermediate calculations to 4 decimal places, e.g. 0.3215 and final answer to 0 decimal places, e.g. 125.)

Company profit will Increase or Decrease? By____________

Should the company exhibit at the home show?

The company Should or Should not? exhibit at the home show.

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.

Data concerning the pizzeria’s costs appear below:

In November, the pizzeria budgeted for 1,560 pizzas at an average selling price of $15 per pizza and for 220 deliveries.

Data concerning the pizzeria’s operations 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.)

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 1,620 pizzas at an average selling price of $17 per pizza and for 240 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.)

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 1,980 pizzas at an average selling price of $13 per pizza and for 200 deliveries.

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

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.)

1. Check all the following that are true.

2. Check all the following that lead to cost inefficiencies in monopoly.

3. Check all of the following that apply to oligopolies.

4. Check each of the following that apply to oligopolies.

Required information

[The following information applies to the questions displayed below.]

Alexandria Aluminum Company, a manufacturer of recyclable soda cans, had the following inventory balances at the beginning and end of 20x1.

During 20x1, the company purchased $250,000 of raw material and spent $400,000 on direct labor. Manufacturing overhead costs were as follows:

Sales revenue was $1,112,000 for the year. Selling and administrative expenses for the year amounted to $110,000. The firm’s tax rate is 40 percent.

QUESTIONS!!

2. Prepare a schedule of cost of goods sold

ALEXANDRIA ALUMINUM COMPANY

Schedule of Cost of Goods Sold

For the Year Ended December 31, 20x1

Finished-goods inventory, January 1 ???

Add: Cost of goods manufactured ???

Cost of goods available for sale ???

Less: Finished-goods inventory, December 31 ???

Cost of goods sold ???

Prepare Income statement

Which of the following is true of sole proprietorships in the United States?

Taxes collected on the basis of the benefits-received principle:

Which of the following is true of sole proprietorships in the United States?

Which of the following is true of a recession?​

4. A. A consumer has $360. Good X costs $4 each. Good Y costs $8 each. Draw the budget line. Label it “budget line

A.” Preferences are perfect complements: utility = min{X,Y}. Both X and Y are normal goods. Numerically solve the consumer’s budget choice. Label it on the diagram, including the indifference curve, and all solved numbers. B. A consumer has $400. Good X costs $6 each. Good Y costs $7 each. Draw a new budget line, on a new graph. Label it “budget line B.” Once again, preferences are perfect complements: utility = min{X,Y}. Both are normal goods. Numerically solve the consumer’s budget choice. Label it on the diagram, including the indifference curve, and all solved numbers. C. Herman Cain ran for president in the year 2000. He made the following policy proposal: Reduce the federal income tax, and make up the federal revenue shortfall with a new national sales tax charged, in addition to the state and local sales tax. Total federal tax revenue would be unchanged. Herman Cain stated that the average person would be better off. Use the objective of the consumer (utility maximization, as illustrated in parts A and B) to explain and evaluate if Herman Cain was right or wrong.