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Ket [755]
2 years ago
15

Todrick Company is a merchandiser that reported the following information based on 1,000 units sold: Sales $ 360,000 Beginning m

erchandise inventory $ 24,000 Purchases $ 240,000 Ending merchandise inventory $ 12,000 Fixed selling expense $ ? Fixed administrative expense $ 14,400 Variable selling expense $ 18,000 Variable administrative expense $ ? Contribution margin $ 72,000 Net operating income $ 21,600 Required: 1. Prepare a contribution format income statement. 2. Prepare a traditional format income statement. 3. Calculate the selling price per unit. 4. Calculate the variable cost per unit. 5. Calculate the contribution margin per unit. 6. Which income statement format (traditional format or contribution format) would be more useful to managers in estimating how net operating income will change in responses to changes in unit sales?
Business
1 answer:
Maurinko [17]2 years ago
5 0

Answer:

<u>1. a contribution format income statement</u>

Sales                                                                                           $ 360,000

Less Cost of Sales (Variable Cost)

Opening Merchandise Inventory    $ 24,000

Add Purchases                               $ 240,000

Less Closing Inventory                    ($ 12,000)  ($ 252,000)

Less Variable Selling Expense                             ($ 18,000)

Less Variable administrative expense                    (18,000)   ($288,000)

Contribution                                                                                 $ 72,000

Less Fixed Expenses ;

Fixed selling expense                                          ($36,000)

Fixed administrative expense                              ($ 14,400)       (50,400)

Net Operating Income                                                                 $ 21,600

<u>2.  a traditional format income statement.</u>

Sales                                                                                           $ 360,000

Less Cost of Sales (Variable Cost)

Opening Merchandise Inventory                        $ 24,000

Add Purchases                                                   $ 240,000

Less Closing Inventory                                        ($ 12,000)   ($ 252,000)

Gross Profit                                                                                 $ 108,000

Less Expenses ;

Selling Expenses

Variable Selling Expense                                    ($ 18,000)

Fixed selling expense                                          ($36,000)

Administrative Expenses

Variable administrative expense                           (18,000)

Fixed administrative expense                             ($ 14,400)       (86,400)

Net Operating Income                                                                $ 21,600

3. $ 360

4. $288

5. $72

6. contribution format

Explanation:

Selling price per unit = Total Sales Revenue / Units Sold

                                   =  $ 360,000 / 1,000 units

                                   =  $ 360

variable cost per unit = Total Variable Cost / units sold

                                    = $288,000 / 1,000 units

                                    = $288

contribution margin per unit = Selling price per unit - variable cost per unit

                                               = $ 360 - $288

                                               = $72

Contribution format is more useful to managers because its shows separately the changes in variable costs and contribution with any change in units sales

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Missionary selling:
Valentin [98]

Missionary selling is often an entry position for higher level sales and marketing jobs.

Option D

<u>Explanation: </u>

An inventive missionary retailer can sell a business two or three times. Missionary sales jobs are often a road to orders.

Missionary selling is a type of sales by which a salesperson advises a person who affects the purchase decision. The purpose is not to end a sale but simply to obtain information from the main decision-maker. It is an indirect sale method.

Missionary employment in scientific, pharmacy and textbook sales is quite common.

Professional companies such as IBM and Xerox depend on missionary vendors for program specialists. Systems specialists collaborate with clients to overcome scientific or organizational challenges. Salespeople tell about innovative items that offer alternatives in the process of finding solutions. A technical expert who advises an organization to minimize its product shipping time may, for example, suggest a software program that simplifies the shipping process.

5 0
3 years ago
4.An important feature of a is that the holder has the right, but not the obligation, to buy or sell currency.(a)swap(b)foreign
Ratling [72]

Answer:

(c) Foreign exchange option

Explanation:

Derivatives refer to those securities whose value is derived from the underlying asset. Examples being currency derivatives, commodity derivatives, etc.

Foreign exchange option refers to a derivative instrument whereby the holder has the right but not the obligation to buy or sell a currency at a future date at a  predetermined rate fixed today.

In a call option, the holder has the right but not the obligation to buy a currency while in a put option the holder has the right but not the obligation to sell a currency.

The predetermined price at which the holder can buy or sell a currency is referred to as the strike price or exercise price.

5 0
2 years ago
If a student records his or her verbal participation everytime it occurs during a class period, the student is using ___ recordi
maks197457 [2]
Event recording and direct observation methods
4 0
2 years ago
Kellyanne hired Joshua from Southwest University. He was an amazing employee and exceeded all her expectations. The next year, s
Anastasy [175]

Answer:

Representativeness heuristic bias

Explanation:

Representativeness heuristic bias occurs when there are similar events whose probability of occurrence is assumed to be the same. People mistakenly assume there is a close relationship between the two events than there really is.

For example of John is a lawyer, he is judged to be a lawyer because of expression of various traits associated with lawyers.

Kellyanne hired Joshua from Southwest University. Because of his outstanding performance, it is assumed that other considered from Southwest University will also perform outstandingly.

This is a form of representativeness heuristic bias

7 0
2 years ago
On January 1 of this year, Avaya Corporation issued bonds with a face value of $ 2,000,000 and a coupon rate of 6 percent. The b
ra1l [238]

Bonds Payable amount reflected in balance sheet = $2192890

Face Value = $2000000

Coupon Rate = 10%

Maturity Period = 10 years

Number of compounding = 2

Interest = $2000000 * 10% * 6/12 = $100000

Period = 2 * 10 = 20

Maturity Value = Face Value = $2000000

Market Interest Rate semiannually = 0.085 / 2 = 0.0425

Market Value = Present Value of Future Cash Flows

= PV of Interest + PV of maturity value

= (Interest * PVAF (4.25%, 20)) + (Maturity Value * PVIF (4.25%, 20))

= (100000 * 13.29437) + (2000000 * 0.434989)

= $1329437 + $869978

= $2199415

Since market value is greater than face value, we can say that bonds are issued at a premium.

Premium = $2199415 - $2000000 = $199415

Journal Entry to record the issuance of bonds:

Cash a/c                                               Dr          $2199415

     To Bonds Payable a/c                                 $2000000                            

     To Premium on the issue of bonds            $199415

Bonds Payable amount is a liability account that carries the quantity owed to bondholders by way of the company. This account usually seems in the lengthy-term liabilities section of the stability sheet, on account that bonds usually mature in more than one year.

Learn more about Bonds Payable amount here: brainly.com/question/7158291

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