Answer:
$32,000
Explanation:
Cost of goods sold refers to all direct expenses incurred in producing goods and excludes all selling and indirect costs.
Cost of goods sold = Sales value - Gross Profit
Gross profit = Sales value - Direct costs - overhead costs
Gross profit per unit = $120 - ($50 + $ 20 + $10)
Gross profit per unit = $40 per unit
Gross profit in value = $40 per unit × No of units = $40 × 400 units = $16,000
Budgeted sales value = Selling price per unit × Budgeted sales units
= $120 × 400 chairs = $48000
Thus, budgeted cost of goods sold = Budgeted sales value - Gross Profit in value
= $48000 - $16000 = $32000
<u>Note</u>: While computing gross profit, selling and administrative expenses would be excluded since those are used while computing net income. Also, cost of goods sold excludes selling and administrative i.e . indirect costs.
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Answer:
Dr Bad Debt Expense $18,450
Cr Allowance for Doubtful Accounts
$18,450
Explanation:
Preparation of the appropiate adjusting journal entry that the company should make at the end of the current year to record its estimated bad debts expense
Dr Bad Debt Expense $18,450
Cr Allowance for Doubtful Accounts
$18,450
($18,000+Debit balance$450)
(Being to record estimated bad debts expense)
Answer:
$296,969.70
Explanation:
Days of sales outstanding = number of days in a period / receivables turnover
Receivables turnover = revenue / average receivables
33 = 365 / receivables turnover
receivables turnover = 11.060606
11.060606 = revenue / $350,000
revenue = $3,871,212.12
with the new policy and same revenue :
28 = 365 / receivables turnover
receivables turnover = 13.035714
13.035714 = $3,871,212.12 / average receivables
= $296,969.70
Answer:
1) See the attached excel file for the analysis of the possible operating income for Classic Limo, Inc.
2) The scenario with the highest operating profit $280,500 which is Excellent with $40 Contribution Margin and 10,500 Numbers of Customers.
Explanation:
1) Using the above information, construct an Excel spreadsheet to prepare an analysis of the possible operating income for Classic Limo, Inc.
Note: See the attached excel file for the analysis of the possible operating income for Classic Limo, Inc.
2) If you were manager of Classic Limo, Inc. and had to choose only one budget scenario to use for planning for the year, which one of the nine scenarios would you choose?
The scenario that would be chosen is the scenario with the highest operating profit $280,500 which is Excellent with $40 Contribution Margin and 10,500 Numbers of Customers.
