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emmainna [20.7K]
3 years ago
15

Cullumber Inc. had sales of $2,300,000 for the first quarter of 2020. In making the sales, the company incurred the following co

sts and expenses. Variable Fixed Cost of goods sold $941,000 $474,000 Selling expenses 104,000 77,000 Administrative expenses 108,000 102,000 Prepare a CVP income statement for the quarter ended March 31, 2020.
Business
1 answer:
yarga [219]3 years ago
7 0

Answer:

<u>Net Income  $ 494,000</u>

Explanation:

Cullumber Inc.

CVP income statement

For the Quarter Ended March 31, 2020.

Sales of $2,300,000

Variable

Cost of goods sold $941,000

Selling expenses 104,000

Administrative expenses 108,000

Total Variable Expenses      $1153,000

Contribution Margin             $ 1147,000    

Fixed

Cost of goods sold $474,000

Selling expenses 77,000

Administrative expenses 102,000

Total Fixed Costs       $ 653,000        

Net Income  $ 494,000

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The following transactions are for Oriole Company.
shepuryov [24]

Answer:

Journal 1 ;

Account Receivable - Cullumber Co. $ 492200 (debit), Revenue $ 492200

Journal 2;

Cost of Sales $325000 (debit) , Merchandise $325000

Journal 3

Discount Allowed $22900 (debit),  Accounts Receivable - Cullumber Co $22900 (credit)

Journal 4

Bank or Cash $469300 (debit), Account Receivable - Cullumber Co (credit)

Explanation:

Journal 1

Revenue is being recognized on sale of Merchandise to Cullumber Co.Since this is not a credit transaction ( the merchandise was sold on credit 2/10, n/30), we recognize an Asset in the Account Receivable - Cullumber for future economic benefits expected to flow to Oriole.

Journal 2

Company uses perpetual inventory system. Which means cost of merchandise is recorded at each sale and not after a certain period (periodic).Thus cost of merchandise is matched to the revenue.Note that Merchandise Account is decreasing (Credit) while the Cost od Sale is increasing (Debit)

Journal 3

The Asset element in the Account Receivable - Cullumber is decreasing due to allowance granted to them.Therefore Culumber is credited.An expense account - Discount Allowed has been created to reflect a decrease in future economic benefit due to grant of the allowance.

Journal 4

The Recognition of Payment through Bank or Cash. Asset of Cash or Bank are increasing as a result of the payment while assets of Accounts Receivable are decreasing due to Cullumber Co. settling their debt. The settled amount is net of allowance granted to them $469300 (492200-22900)

4 0
3 years ago
GNP accounts avoid double counting by including only the value of final goods and services sold on the market. Should the measur
bija089 [108]

Answer:

C.

Explanation:

The Gross national product (GNP) is a tool used to measure the nation's total economic activity. Therefore it can be said that these accounts should not only include imports and exports of final goods and services received from and sold to other countries instead the total values and imports and exports should be included in the calculation of the GNP

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Varvara68 [4.7K]

Answer:

Overall cost leadership.

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Cost leadership can be defined as to lowest cost that is available in an industry. A cost leader in an industry has achieved a competitive advantage by being able to give the lowest price compared to other businesses in the market

Even where there is high competition businesses with low cost advantage perform well and have good profit margins.

So to avoid overall cost leadership firms convince rivals not to enter a price war, protection from customer pressure to lower prices, and the ability to better withstand cost increases from suppliers.

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Ronch [10]
Good things
1. Government can control market failure
2. It help optimize social welfare
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Bad things
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True is the correct answer
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