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3 years ago

LO 2.1Explain how the income statement of a manufacturing company differs from the income statement of a merchandising company.

Business

1 answer:

marshall27 [118]3 years ago

7 0

Answer:

Revenue: The revenue of Manufacturing company comes from the sale of the products that they manufacture. However the merchandising company purchases goods from manufacturing companies and distribute them to make it easier for the customer to access the product and earn a profit on it which increases the cost of the product to end consumer. The contract between the manufacturing and merchandising company can be an agreement of principal and agent. In this case, the revenue for the merchandising company would be commission earned from manufacturing company. This commission paid to merchandising company will be cost to manufacturing company.

Cost of Sale: Now the raw material costs plus depreciation of production machinery plus direct labour plus variable Overhead cost plus if their is any commission paid for sale of finished goods will be the cost of sale for manufacturing company. Whereas in the case of Merchandising company, the cost of sale will be only the cost of goods they sold in the year. The depreciation charge will be minor in merchandising company as they don't have any production machineries.

These the are major difference between manufacturing and merchandising company.

Explanation:

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There are two machines for sale that you are considering purchasing for your sawmill to produce hardwood flooring. You want to f

vladimir2022 [97]

Answer:

1. The Cpk of machine 1 would be 0.952

2. The Cpk of machine 2 would be 1.111

3. I would buy machine 2, because the Cpk value is more than 1.

4. The Cpk would be 2.222

Explanation:

1. In order to calculate the Cpk of machine 1 we would have to use to following formula:

Process capability index: Cpk= Min [(mean-L spec)/3sd; (U spec-mean)/3sd]

According to given data:

In machine 1, mean= 48mm

L spec= 46

U spec= 50

Standard deviation sd= 0.7

Therefore, Cpk of machine 1= [0.952;0.952]= 0.952

1. In order to calculate the Cpk of machine 2 we would have to use to following formula:

Process capability index: Cpk= Min [(mean-L spec)/3sd; (U spec-mean)/3sd]

According to given data:

In machine 2, mean= 47

L spec= 46

U spec= 50

Standard deviation sd= 0.3

Therefore, Cpk of machine 2= [1.111;3.333]= 1.111

3. If my goal is to be capable, I would buy machine 2, because the Cpk value is more than 1.

4. If you combine the best of both machines to calculate the cpk we to make the following calculation:

Combination specification, mean= 48 and L spec= 46 and U spec= 50, Standard deviation sd= 0.3

Therefore, Cpk= [2.222;2.222]= 2.222

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3 years ago

Calculating the Amount for a Home Equity Loan. A few years ago, Michael Tucker purchased a home for $100,000. Today the home is

e-lub [12.9K]

Answer:

The maximum amount that Michel can borrow is 70,000 dollars.

Explanation:

Please see attachment .

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4 years ago

The market supply of cigarettes is shown in the table below.

mr_godi [17]

The answer & explanation for this question is given in the attachment below.

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3 years ago

Lightning Electronics is a midsize manufacturer of lithium batteries. The company’s payroll records for the November 1–14 pay pe

Alexeev081 [22]

Answer:

Journal entries for the following will be shown below:

Explanation:

Journal entries for the wages expense is as follows:

Wages expense A/c.........................Dr $50,000

Income Tax Payable A/c................Cr $7,000

FICA taxes payable A/c...................Cr $2,625

Cash A/c...............................................Cr $40,375

Working Note:

Cash = Wage expense - Income tax payable - FICA taxes payable

= $50,000 - $7,000 - $2,625

= $40,375

Journal entry for the payroll expenses is as follows:

Payroll tax expense A/c............................Dr $2,875

FICA taxes payable A/c............................Cr $2,625

Unemployment taxes payable A/c.........Cr $250

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