57.Assume that Major Manuscripts, Inc. is currently operating at 97 percent of capacity and that sales are projected to increase
to $20,000. What is the projected addition to fixed assets
1 answer:
Complete Question:
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Answer:
The projected addition to fixed assets is $1,533.33
Explanation:
Sales at 100% percent = Sales at current capacity/Current operating capacity
Since the Major Manuscripts, Inc. is currently operating at 97 percent of capacity of the net sales of $17,100
Sales at maximum capacity = 17,100/0.97
Sales at maximum capacity = $17,628.87
Projected to fixed assets = ([Current net fixed assets/Sales at maximum capacity]*Increase in sales) - Current net fixed assets
Projected addition to fixed assets = ([$11,400/17,628.87]*20,000) - 11,400 Projected addition to fixed assets = ([$11,400/17,628.87]*20,000) - 11,400 Projected addition to fixed assets = 12,933.33 - 11,400
Projected addition to fixed assets = 1,533.33
The projected addition to fixed assets is $1,533.33
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Answer: $300,000
Explanation:
Total expected costs = cost incurred to date + estimated cost to complete
= 1,200,000 + 3,600,000
= 4,800,000
= 0.25
= 25%
Profit = contract revenue - Total expected costs
= $6,000,000 - 4,800,000
= $1,200,000
Cumulative gross profit = Profit × Percentage of completion
= $1,200,000 × 0.25
= $300,000
Therefore, Red Builders should have recognized profit at the end of year 1 in the amount of $300,000.