Goods that are produced by one firm for use in further processing by another firm is

Select one:

a. Intermediate Goods
b. Natural Goods
c. Disposable Goods
d. All of Above

Goal:
Please answer the questions below. The main goal of this homework is to see if you can calculate the profit maximization point for this small wedding cake business. I hope that you will be able to merge your knowledge of basic accounting and microeconomic theory in order to calculate the profit maximization point, make comments about efficiency, and make logical recommendations to the firm's management to ensure their future success.

Current Situation:
The local wedding cake business was very competitive during 2012. Delicious Deserts was the only wedding cake bakery in the entire county of two million people for several years. They often charged as much as $300 to $500 for each wedding cake. But a new competitor recently came into the market and started selling "discount wedding cakes" for less than $150. The quality and the taste of the discount wedding cakes were acceptable for most of their customers. Both businesses operated in a low-to moderate-income county in California where the average household income was not much higher than $40,000 per year.

The Challenge For Delicious Deserts:
At first the news of a low-cost competitor was terrible news for Delicious Deserts. They had no choice. They had to charge from $300 to $500 per wedding cake to cover their high costs. However, because of this new competition, the husband and wife owners of Delicious Deserts decided to make the business more efficient and lower costs. They invested in better ovens and created better tasting cakes using special ingredients. Their customers went crazy over their new and unique 80 proof Italian Rum Wedding cake that actually got people slightly drunk if they ate more than three slices.

To boost sales during 2012 they hired part-time telemarketers and social media experts. They also increased their advertising in traditional media such as local wedding magazines. They also displayed eye-catching ads in local churches, entertainment centers and jewelry stores.

They also experimented with a new pricing model in which they lowered prices each quarter. Indeed, they found that as they lowered their prices, they sold more cakes. They hired an "A" student who took a microeconomics class with Professor Ed Torres to do an elasticity analysis. The student estimated that the price elasticity for wedding cakes was 1.25 (elastic) and that the income elasticity was 2.10 (a luxury good). The owners of Delicious Deserts were not aware of this information. The student told them that they made a huge pricing strategy error for many years by charging high prices on an elastic good within a low-to moderate-income county.

The profit and loss statement below shows that Delicious Deserts made a Total Revenue of $275,000 and sold 1,375 wedding cakes. During 2012, they made three times (3X) more than they did versus 2011. Of course, because they invested in new ovens, made more cakes, and hired new part-time staff, the cost of doing business also rose. The net profit for 2012 was a slim $32,175. The salary for a professional desert baker averaged $70,000 per year in California.

Please examine the profit and loss statement on the next page, then answer the questions on pages 4 through 6.  

Delicious Deserts, Incorporated
Income Statement For The Year Ending December 31, 2012

Revenues

Gross Sales....................................................................$275,000
Less: Sales Discounts ..................................................$ 2,500
Less: Returns (Cancelled Weddings)...........................$ 2,000
Net Sales...............................................................................................$270,500

Cost of Goods Sold

Beginning Inventory (January 1).................................$ 18,000
Cost Of Ingredients To Bake Cakes............................$109,500
Total Cost of Goods For Sale......................................$127,500
Less: Ending Inventory December 31.........................$ 15,000
Cost of Goods Sold..............................................................................$112,500

Gross Profit.....................................................................................................$158,000

Operating Expenses
Selling Expenses
Sales Commissions........................................$ 31,000
Advertising...................................................$ 16,000
Other Selling Expenses (Internet).................$ 18,000
Total Selling Expenses...............................................$ 65,000

General and Administrative Expenses
Professional & Office Salaries.................................$ 20,500
Utilities....................................................................$ 5,000
Office Supplies........................................................$ 1,500
Bank Interest Paid on Loans....................................$ 3,600
Insurance.................................................................$ 2,500
Rent (Fixed Cost)....................................................$ 17,000
Total General & Administrative Expense.............................$ 50,100
Total Operating Expenses..................................................$115,100

Net Profit Before Taxes..............................................................................$ 42,900
Less: Federal/State/Local Taxes................................................................$ 10,725
NET PROFIT.............................................................................................$ 32,175

   

Question #1:
What was the Total Fixed Cost of running this business?

Free Answer:
The rent was the only fixed cost that Delicious Deserts had. They paid $17,000 per year or $1,416.66 per month for rent. All other expenses were variable costs.

Question #2:
What was the Total Variable Cost of running this business?

Answer: $________________________________________

Clue:
Add up Cost of Goods Sold, Total Operating Expenses (less Rent), Income Tax Expense and include the write-off losses from Sales Discounts & Wedding Cancellations.


Question #3:
Assuming that Delicious Deserts sold 150 cakes during Q1, 300 cakes during Q2, 450 cakes during Q3, and 475 cakes during Q4, what was the Total Revenue during each quarter assuming the prices were: Q1 - $275 per cake, Q2 - $240 per cake, Q3 - $180 per cake and Q4 - $170 per cake?    

Q1 - Total Revenue = $____________________________

Q2 - Total Revenue = $____________________________

Q3 - Total Revenue = $____________________________

Q4 - Total Revenue = $____________________________

The "A" student did a quarterly cost breakdown analysis for Delicious Deserts. A month-to-month analysis would have been better, but the owners just wanted a quick quarterly analysis. Q1 = 150 cakes sold, Q2 = 300 cakes sold, Q3 = 450 cakes sold and Q4 = 475 sold.   

Challenge Question #4:
Hint: Use the instructions on page 7 of the Excel 2016 handout.

Can you plot a nice-looking graph to show how the demand curve, the average total cost, marginal cost, and marginal revenue curves look like? Paste it on this page or attach a separate page to this homework.   

Question #5
What is the MC=MR Profit Maximization point? What quantity should Delicious Deserts be producing at 'and' what price should they be charging to maximize their profits?

Question #6
Why isn't it a good idea for them to produce and sell as many cakes as they can? Is it more profitable to sell less cakes at this current stage of their business?

Question #7
Do you have any other recommendations for Delicious Deserts to increase their revenues, profits, market share, and client retention?

1)what is accounting

2) What is difference between financial accounting and cost accounting

3) What are the parts of financial statement

4) what is the difference between income statement and balance sheet

5 ) sales 100,000 cost of goods sold 50,000 operating exp 10,000 ( compute net income for the company

6) sales return 10,000 sales discount 25,000 net sales 200,000 ( compute the gross sales )

7 ) beginning inventory 10,000 total cost of purchases 200,000 ending inventory 50,000 ( compute cost of goods sold )

8) cost of goods sold 50,000 ending inventory 10,000 total cost purchases 45,000 ( compute cost of beginning inventory )

9) net profit 20,000 operating exp 10,000 cost of goods sold 50,000 ( compute total sales )

10) cost of goods sold 50,000 operating exp 30,000 net profit 20,000 ( compute total sales )

11) cost of raw material used 20,000 direct labor 10,000 Factory over head 20,000 ( compute manufacturing cost - prime cost - conversion cost )

12 ) Manufacturing cost 100,000 cost of work in process beginning 20,000 and cost of work in process ending 30,000 ( cost of goods manufactured )

13 ) what is the difference between cost of goods manufactured and cost of goods sold

14) finished goods beginning 10,000 cost of goods manufactured 50,000 cost of finished goods ending 30,000 ( cost of goods sold )

15 ) cost of goods sold 100,000 cost of goods manufactured 70,000 cost of finished goods ending 20,000 ( cost of finished goods beginning )

Primare Corporation has provided the following data concerning last month’s manufacturing operations.

Required:

1. Prepare a schedule of cost of goods manufactured for the month.

2. Prepare a schedule of cost of goods sold for the month. Assume the underapplied or overapplied overhead is closed to Cost of Goods Sold.

Prepare a schedule of cost of goods manufactured for the month.

Prepare a schedule of cost of goods sold for the month. Assume the underapplied or overapplied overhead is closed to Cost of Goods Sold.

Assume during the quarter ending December 31 of the current year, Cox Security Systems had 13 weekly paydays and three monthly paydays. The names of the employees of Cox Security Systems and their regular salaries are shown in the following payroll register. Note that Hall and Short are paid monthly on the last payday, while all others are paid weekly.

*Monthly

In addition to the regular salaries, the company pays an annual bonus based on the amount of earnings for the year. For the current year, the bonus amounts to 8% of the annual salary paid to each employee. The bonus is to be paid along with the regular salaries on December 28, but the amount of the bonus and the amount of the regular salary will be shown separately on each employee's earnings statement. Assume that all employees received their regular salary during the entire year.

The payroll register for the period ending December 28th is shown reflecting the following for each employee:

The wage-bracket method is used to withhold federal income tax from the regular salaries.

A flat 25% is withheld on the annual bonus.

Total salaries and bonuses are subject to a 2% state income tax and a 1% city income tax.

For Period Ending December 28, 20--

Complete the following form to show:

a. Total earnings paid during the quarter, including both the regular and the supplemental earnings.

b. Total amount of FICA taxes withheld during the quarter.

c. Total amount of federal income taxes withheld during the quarter.

d. Total amount of state income taxes withheld during the quarter.

e. Total amount of city income taxes withheld during the quarter.

f. Total net amount paid each employee during the quarter.

When computing withholding, round each amount to the nearest cent. If applicable, use rounded amount in subsequent computations. And use final rounded amount to determine the total.

the Wage-Bracket Method Tables.

Part 1: understanding the AS-AD framework

Understand how aggregate supply and aggregate demand determine macroeconomic equilibrium.

1) Draw AD and AS curves where macroeconomic equilibrium occurs at an output of $25 trillion. On your graph, indicate the equilibrium price level (you can assign an exact value). Indicate on the graph where macroeconomic equilibrium occurs. Make sure to label each part of the graph.

Part 2: applying the AS-AD framework

Evaluate the forces that shape the total quantity of goods and services that purchasers want to buy.

Evaluate the forces that shape the total quantity of goods and services that businesses want to supply.

2-1) For each of the following, using a graph to show the shift in aggregate demand and explain your reasoning.

a) How do poor numbers from several economic indicators (for example, today the retail sales for March 2020 were much lower and the manufacturing numbers were also lower) affect businesses?

b) Congress passes the relief package of $2 trillion dollars (Payment Protection Plan) and the Fed promised to add additional $2.3 trillion dollars the payments.

c) The U.S. government eliminates the tariffs it charges on goods imported from China (like recently medical supplies).

2-2) Illustrate how each of the following will impact aggregate supply and explain your reasoning.

a) The implementation of artificial intelligence in manufacturing.

b) The novel Coronavirus has put tens of millions workers out of work.

c) The U.S. dollar depreciates relative to the Chinese yuan.

2-3) Forecast how the economy will respond to changing conditions.

a) To combat the current recession, the U.S. government enacts expansionary fiscal policy (well, although the U.S. did announce some infrastructure projects, the example here isn't really a fact, I'm making up this policy for you to practice with the model.), which increase government spending by $2 trillion dollars. Illustrate the impact of this expansionary fiscal policy on the U.S. economy using an AS-AD graph. How will the price level change?

b) The Fed quickly announced a rate cut (the federal funds rate) to basically zero on March 13 amid concerns of a looming recession due to the novel Coronavirus. And the latest data on consumer confidence and business confidence dropped significantly. Forecast how prices and output will change by drawing an AS-AD graph, and explain your answers.

The transactions relating to the formation of Blue Co. Stores Inc., and its first month of operations follow.

1. The firm was organized and the stockholders invested cash of $8,700.
2. The firm borrowed $5,500 from the bank; a short-term note was signed.
3. Display cases and other store equipment costing $1,750 were purchased for cash. The original list price of the equipment was $1,940, but a discount was received because the seller was having a sale.
4. A store location was rented, and $1,400 was paid for the first month's rent.
5. Inventory of $16,000 was purchased; $8,200 cash was paid to the suppliers, and the balance will be paid within 45 days.
6. During the first week of operations, merchandise that had cost $3,900 was sold for $5,800 cash.
7. A newspaper ad costing $120 was arranged for; it ran during the second week of the store's operations. The ad will be paid for in the next month.
8. Additional inventory costing $4,250 was purchased; cash of $1,350 was paid, and the balance is due in 30 days.
9. In the last three weeks of the first month, sales totaled $13,750, of which $9,100 was sold on account. The cost of the goods sold totaled $9,200.
10. Employee wages for the month totaled $2,000; these will be paid during the first week of the next month.
11. The firm collected a total of $3,450 from the sales on account recorded in transaction i.
12. The firm paid a total of $4,900 of the amount owed to suppliers from transaction e.

Required:

1. Record each transaction in the appropriate columns. Indicate the financial statement effect.
2. Calculate the total assets, liabilities, and stockholders' equity at the end of the month and calculate the amount of net income for the month.
3. After completing parts a through l, prepare an income statement for Blue Co. Stores Inc. for the month presented and a balance sheet at the end of the month.

Cost of Goods Sold, Profit margin, and Net Income for a Manufacturing Company

The following information is available for Gonzalez Manufacturing Company for the month ending July 31, 2016:

For the month ended July 31, 2016, determine Gonzalez's (a) cost of goods sold, (b) gross profit, and (c) net income.

Labels & Amount descriptions

Finished goods inventory, July 1, 2016

Finished goods inventory, July 31, 2016

Sales

Selling Expenses

Cost of finished goods available for sale

Cost of goods manufactured

Cost of goods sold

Gross profit

Administrative expenses

Net Income

Less administrative expenses

Less Finished goods inventory, July 1, 2016

Less Finished goods inventory, July 31, 2016

1. (a)

   Gonzalez Manufacturing Company
   Cost of Goods Sold
   July 31, 2016
   	$
   	$
   	$

   (b)

   Gonzalez Manufacturing Company
   Gross Profit
   July 31, 2016
   	$
   	$

   (c)

   Gonzalez Manufacturing Company
   Net Income
   July 31, 2016
   		$_________
   Operating expenses:
   	$ ______
   	______
   Total operating expenses		______
   		$______

ThreePoint Sports Inc. manufactures basketballs for the Women’s National Basketball Association (WNBA). For the first 6 months of 2020, the company reported the following operating results while operating at 80% of plant capacity and producing 118,800 units.

Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $227,000.

In July, normally a slack manufacturing month, ThreePoint Sports receives a special order for 10,000 basketballs at $29 each from the Greek Basketball Association (GBA). Acceptance of the order would increase variable selling and administrative expenses $0.73 per unit because of shipping costs but would not increase fixed costs and expenses.

(a) Prepare an incremental analysis for the special order. (Round all per unit computations to 2 decimal places, e.g. 15.25. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

(b) Should ThreePoint Sports Inc. accept the special order?

                                                                      NoYes

eTextbook and Media

What is the minimum selling price on the special order to produce net income of $5.08 per ball? (Round answer to 2 decimal places, e.g. 15.25.)

On July 31, 2016, the end of the first month of operations, Rhys Company prepared the following income statement, based on the absorption costing concept:

B. Reconcile the absorption costing income from operations of $1,489,250 with the variable costing income from operations previously determined.