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Valentin [98]
3 years ago
7

Product U23N has been considered a drag on profits at Jinkerson Corporation for some time and management is considering disconti

nuing the product altogether. Data from the company’s budget for the upcoming year appear below:Sales.................................................................$730,000Variable expenses.............................................$350,000Fixed manufacturing expenses.........................$234,000Fixed selling and administrative expenses........$161,000In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $144,000 of the fixed manufacturing expenses and $93,000 of the fixed selling and administrative expenses are avoidable if product U23N is discontinued. The financial advantage (disadvantage) for the company of eliminating this product for the upcoming year would be:
Business
1 answer:
STALIN [3.7K]3 years ago
6 0

Answer:

                                 Product U23N

                                                                                          $

        Sales                                                                     730,000

Less: Variable cost                                                        350,000

         Contribution                                                          380,000

Less: Avoidable fixed manufacturing expenses           144,000

         Avoidable fixed selling and administrative cost  <u>93,000</u>

         Net contribution                                                    <u> 143,000</u>

Product U23N should not be discontinued because it has a positive contribution. If the company discontinued the product, the total profit of the company reduces by $143,000.

Explanation:

In this case, we need to determine the net contribution of the product.  Net contribution is the excess of sales over variable cost and avoidable fixed cost. Product U23N should not be discontinued because it has a positive net contribution. If the product is deleted, there will be a reduction in total profit of the company by $143,000.

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Answer:

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c. Questioned management about likely total uncollectible accounts.

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d. Watched the accounting clerk record the daily deposit of cash receipts.

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e. Examined invoice to obtain evidence in support of the ending recorded balance of a customer.

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f. Compared a sample of sales invoices to credit files to determine whether the customers were on the approved customer list.

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4 0
3 years ago
In your opinion, what is the riskiest stage of new product development?
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The following transactions relate to the General Fund of the City of Buffalo Falls for the year ended December 31, 2020: Beginni
melamori03 [73]

Answer:

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a. Journal Entries:

Beginning balances:

Jan.1, 2020 :

Description                 Debit                Credit

Cash                        $93,000

Taxes Receivable  $189,500

Accounts Payable                              $52,250

Fund Balance                                   $230,250

To record opening balances of the General Fund.

Transactions during the year:

Description                 Debit                Credit

Taxes Receivable      $1,230,000

Estimated Revenue                         $1,230,000

To record the estimated revenue for the year.

General Government  $1,227,400

Accounts Payable                            $1,227,400

To record the estimated appropriations for the year.

Property taxes receivable $915,000

Other revenue receivable $315,000

Estimated revenue                              $1,230,000

Cash Account                  $1,182,500

Property taxes receivable                     $885,000

Other revenue receivable                    $297,500

To record the cash receipts.

Contracts                                  $95,250

Accounts Payable                                      $95,250

To record contracts for services.

Debit General Government  $963,500

Credit Accounts Payable                        $963,500

To record the other expenditures.

Debit Accounts Payable      $1,092,500

Credit Cash Account                              $1,092,500

To record payment on account.

b. Statement of Revenues, Expenditures, and Changes in Fund Balance for the General Fund:

Estimated Revenue   $1,230,000

less Expenditure:

Contracts                          95,250

Other expenditures       963,500

Change in fund             $171,250

Fund balance b/f           230,250

Fund balance c/f          $401,500

c. Balance Sheet for the General Fund:

Cash                              $183,000

Taxes Receivable           237,000

Total assets                 $420,000

Accounts Payable            $18,750

Fund balance                  401,500

Total liabilities + Fund $420,250

Explanation:

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Property taxes                   885,000

Other revenue                  297,500

less Accounts payable   1,092,500

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b) Taxes Receivable

Beginning balance           $189,500

Estimated Revenue        1,230,000

less Receipts:

Property taxes                  885,000

Other revenue                 297,500

Ending balance             $237,000

c) Accounts Payable

Beginning balance        $52,500

Other expenditure        963,500

Contracts                        95,250

Less payments           1,092,500

Ending balance              $18,750

4 0
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tia_tia [17]

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So, in the process of marketing there is exchange process which take place among the client and the company.

In this case, the marketing will not happen or occur in this condition or situation as there is nothing to exchange or exchange is missing.

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Answer:

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= $57.6 million

Now the debt to capital ratio would be

= $57.6 million ÷ $120 million

= 48.00%

7 0
3 years ago
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