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Afina-wow [57]
3 years ago
12

Astro Co. sold 20,500 units of its only product and incurred a $67,750 loss (ignoring taxes) for the current year as shown here.

During a planning session for year 2018’s activities, the production manager notes that variable costs can be reduced 40% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $155,000. The maximum output capacity of the company is 40,000 units per year. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31, 2017 Sales $ 779,000 Variable costs 584,250 Contribution margin 194,750 Fixed costs 262,500 Net loss $ (67,750 ) Required: 1. Compute the break-even point in dollar sales for year 2017. (Round your answers to 2 decimal places.)
Business
1 answer:
maksim [4K]3 years ago
3 0

Answer:

Break even point in dollar sales = $1,050,000

Explanation:

Break Even Point in dollar sales = Fixed Cost/ Contribution margin percentage

Contribution margin percentage = (Contribution margin/ Sales) X 100

Here we have for the year 2017

Contribution margin = $194,750

Sales = $779,000

Contribution margin percentage = ($194,750/$779,000) X 100 = 25%

Break even point in dollar sales = Fixed Cost $262,500/25%

= $1,050,000

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Ipatiy [6.2K]

Answer:

rework hope this helps :)

Explanation:

5 0
3 years ago
Fraud Investigators Inc. operates a fraud detection service. On March 31, 10 customers were billed for detection services totali
mr_godi [17]

Answer:

Fraud Investigators Inc.

1. Journal Entries:

March 31:  Debit Accounts Receivable $21,000

Credit Service Revenue $21,000

To record the rendering of service on account.

Oct. 31: Debit Allowance for Uncollectible Accounts $1,300

Credit Accounts Receivable $1,300

To write-off uncollectible accounts.

Dec. 15: Debit Accounts Receivable $760

Credit Allowance for Uncollectible Accounts $760

To reverse a previously written-off account.

Dec. 15: Debit Cash $760

Credit Accounts Receivable $760

To record the cash collected from the customer.

Dec. 31: Debit Bad Debts Expense $460

Credit Allowance for Uncollectible Accounts $460

To record bad debts expense for the year.

A) Debit Accounts Receivable $34,000

Credit Service Revenue $34,000

To record the rendering of service on account.

B) Debit Allowance for Uncollectible Accounts $1,950

Credit Accounts Receivable $1,950

To write off uncollectible accounts.

C1) Debit Accounts Receivable $810

Credit Allowance for Uncollectible Accounts $810

To reverse a previously written-off debt.

C2) Debit Cash $810

Credit Accounts Receivable $810

To record the receipt of cash from the customer.

D) Debit Bad Debts Expense $590

Credit Allowance for Uncollectible Accounts $590

To record bad debts expense for the year.

2. Transaction  Net Receivable  Net Sales   Income From Operation

        A                  +34,000           +34,000           +34,000

        B                  -1,950                 NE                   -1950

        C                  +/- 810                NE                    +810

        D                   NE                     NE                    -590

Explanation:

a) Data and Analysis:

March 31:  Accounts Receivable $21,000 Service Revenue $21,000

Oct. 31: Allowance for Uncollectible Accounts $1,300 Accounts Receivable $1,300

Dec. 15: Accounts Receivable $760 Allowance for Uncollectible Accounts $760

Dec. 15: Cash $760 Accounts Receivable $760

Dec. 31: Bad Debts Expense $460 Allowance for Uncollectible Accounts $460

A) Accounts Receivable $34,000 Service Revenue $34,000

B) Allowance for Uncollectible Accounts $1,950 Accounts Receivable $1,950

C1) Accounts Receivable $810 Allowance for Uncollectible Accounts $810

C2) Cash $810 Accounts Receivable $810

D) Bad Debts Expense $590 Allowance for Uncollectible Accounts $590

7 0
3 years ago
The human resources department of french quarter seafood conducted a training workshop on setting and achieving organization goa
Cloud [144]
The aspect of the SMART goal that is missing is that of TARGET DATE.
SMART goals refers to goals that are Specific, Measurable, Attainable, Result oriented and Time bound. The aspect of the time bound was not included in the scenario given in the question.
7 0
3 years ago
The purchase of treasury stock usually restricts the amount of retained earnings available for cash dividends.a. Trueb. False
DerKrebs [107]

The statement, "The purchase of treasury stock usually restricts the amount of retained earnings available for cash dividends." is true .

Option a

<u>Explanation: </u>

The stock in the bank is the term for originally sold securities that the issuing firm has retained. If a corporation sells some of its released and outstanding securities, the sale drastically alters its retained profits.  

As the balance sheet show all remaining earnings and the equity fund, sums available to pay dividends drop. The price of the stock in treasury should be reduced by the retained revenues, which reduce the amounts that the business can dividend to shareholders.

Sometimes a business needs the share-earnings ratio to be improved. If a company bought out many of its own shares, it reduces the number of released and outstanding activities raises the earnings per stake in the company and makes the assets more appealing for buyers.

6 0
3 years ago
Abraham found a $1,000 face value bond that belonged to his father. He checked The Wall Street Journal and found the bond was cu
asambeis [7]

Answer:

Premium

Explanation:

Whenever a bond sells for more than its face value, it sells at a premium, which means that the investors are willing to pay more for the bond than its face value. This happens when the coupon payment percentage on the bond are higher than the yield to maturity of the bond, because the investors required return is the yield to maturity, when the bond pays more than the required return the investors are willing to pay more for the bond.

4 0
2 years ago
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