You own a chain of 3 dry-cleaning stores in a medium-size town. A problem in customer service has surfaced recently. When you spend the day, or even part of the day in a particular store, clerks seem to provide excellent customer service, spotters are making sure all stains are removed from garments, and pressers are doing a good job of pressing difficult items such as silk blouses. Yet during those same visits, customers complain to you about such things as stains not being removed and items being poorly pressed in some of their previous orders; indeed, several customers have brought garments in to be redone. Customers also sometimes comment on having waited too long for service on previous visits Discuss the extent to which you believe that you have a motivation problem in your stores. 2. Using concepts you have studied in this unit, design a plan to increase the motivation of clerks to provide prompt service to customers even when they are not being watched. 3. Design a plan to increase the motivation of spotters to remove as many stains as possible even when they are not being watched. 4. Design a plan to increase the motivation of pressers to do a topnotch job on all clothes they press, no matter how diff

1.

Test Company reported the following income statement for the most recent period.

Determine the breakeven point in units.

Note: Give your answer using commas. Do not include the word “units.”

Example: 12,345

2. Determine the number of units Test Company must sell to earn operating income of $20,000. Note: Give your answer using commas. Do not include the word “units.”

3.

Determine the breakeven point in dollars.

Note: Give your answer using dollar signs and commas but not decimal points (cents).

Example: $12,345

4.

Determine the sales revenue Test Company must generate to earn operating income of $30,000.

Note: Give your answer using dollar signs and commas but not decimal points (cents).

5.

Determine the margin of safety in dollars.

Note: Give your answer using dollar signs and commas but not decimal points (cents).

6.

Determine the margin of safety in units.

Note: Give your answer using commas. Do not include the word “units.”

Example: 12,345

7.

Test Company’s sales manager proposed holding a Holiday Sale. Prices would be discounted 5% and an additional $1,000 would be used for advertising to promote the event. Determine the number of units Test Company must sell during the promotion to continue earning $18,000.

Note: Give your answer using commas. Do not include the word “units.”

Example: 12,345

8.

Test Company reported sales of $250,000, variable expenses of $190,000 and fixed expenses of $48,000. Determine the sales revenue needed to break even.

Note: Give your answer using dollar signs and commas but not decimal points (cents).

Example: $12,345

ShineCar is on-demand car wash and detailing company, allowing users to schedule a wash within minutes using their website or mobile application. Once a wash is booked, a trained team of experts arrive, place the car on a proprietary mat, then perform the selected service. As the skilled workers are performing the service, they use a technician application to update customers on the status of the service. When the service is complete, customers are alerted and their keys are returned.

            Business is good but Serena, the manager, has noticed that customers complain because there are streaks on their vehicles at pickup. ShineCar warrants that each vehicle will sparkle at delivery and charges $35 for each vehicle. ShineCar washes 90 vehicles each day and last month, 50% of them required a hand finish. Each hand wash costs $15 per vehicle. Serena believes the problem can be eliminated by a prewash (costing $2 per vehicle) and an equipment calibration at the start of each day, which will reduce the number of vehicles washed each day by 10, but will decrease the vehicles requiring a hand finish from 50% to 5%.

            Besides the streak’s incidences, the company has been dealing with an increase in number of quality failure incidences. The types of incidences include service complaints by customers on the waiting time, quality of the wash, malfunction at the tunnel carwash due to lose of tunnel controller and slow flow in the process causing a long line of vehicles.

Required:

1. Evaluate whether ShineCar should consider implementing Serena’s idea. Show appropriate computation.                                                                                         

b.State FIVE nonfinancial factors that ShineCar need to consider in deciding whether to implement the new design to achieve competitive advantage.                    

(Corrected Trial Balance) The following trial balance of Wanda Landowska Company does not balance. Your review of the ledger reveals the following. (a) Each account had a normal balance. (b) The debit footings in Prepaid Insurance, Accounts Payable, and Property Tax Expense were each understated $100. (c) A transposition error was made in Accounts Receivable and Service Revenue; the correct balances for Accounts Receivable and Service Revenue are $2,750 and $6,690, respectively. (d) A debit posting to Advertising Expense of $300 was omitted. (e) A $1,500 cash drawing by the owner was debited to Owner’s Capital and credited to Cash.

Instructions

Prepare a correct trial balance. Please give explanation

Common-Size Income Statements
Consider the following income statement data from the Ross Company:

Prepare common-size income statements for each year.

Note: Round answers to one decimal place (ex: 0.2345 = 23.5%).

EXERCISE 4.9

Relationship of Adjusting Entries to Business Transactions

Among the ledger accounts used by Rapid Speedway are the following: Prepaid Rent, Rent Expense, Unearned Admissions Revenue, Admissions Revenue, Prepaid Printing, Printing Expense, Concessions Receivable, and Concessions Revenue. For each of the following items, provide the journal entry (if one is needed) to record the initial transaction and provide the adjusting entry, if any, required on May 31, assuming the company makes adjusting entries monthly.

1. On May 1, borrowed $600,000 cash from National Bank by issuing a 9 percent note payable due in three months.

2. On May 1, paid rent for six months beginning May 1 at $14,400 per month.

3. On May 2, sold season tickets for a total of $720,000 cash. The season includes 60 racing days: 15 in May, 20 in June, and 25 in July.

4. On May 4, an agreement was reached with Snack-Bars, Inc., allowing that company to sell refreshments at the track in return for 10 percent of the gross receipts from refreshment sales.

Employees at Cutting Edge disagree about the accounting for sales returns. The sales manager believes that granting more generous returns policy can give the company a competitive edge and increase sales revenue. The controller cautions that, depending on the terms granted, loose return provisions might lead to non-GAAP revenue recognition. The company CFO would like you to research the issue to provide an authoritative answer.

Required: Prepare a research report using authoritative literature addressing revenue recognition when right of return exits and describe the accounting when there is a right of return. Include what is meant by “right of return” in your report. Your research report should include a discussion of the relevant FASB Codification section (s) that you used in developing report. Summarize what you discovered in your research in your own words – do not simply quote from the Codification. The research report should be no longer than two pages in length, single-spaced, and contain proper citations following APA Style format.

Cash Budget
Wilson's Retail Company is planning a cash budget for the next three months. Estimated sales revenue is as follows:

All sales are on credit; 60 percent is collected during the month of sale, and 40 percent is collected during the next month. Cost of goods sold is 80 percent of sales. Payments for merchandise sold are made in the month following the month of sale. Operating expenses total $41,000 per month and are paid during the month incurred. The cash balance on February 1 is estimated to be $40,000.

Prepare monthly cash budgets for February, March, and April.

Use negative signs only with beginning and ending cash balances, when appropriate. Do not use negative signs with disbursement answers.

Trevorrow Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During June, the company budgeted for 5,800 units, but its actual level of activity was 5,760 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June:

Data used in budgeting:

Actual results for June:

The activity variance for net operating income in June would be closest to:

Multiple Choice

$548 F

$548 U

$4,394 U

$4,394 F