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Vlad1618 [11]
3 years ago
5

Todrick Company is a merchandiser that reported the following information based on 1,000 units sold: Sales $ 315,000 Beginning m

erchandise inventory $ 21,000 Purchases $ 210,000 Ending merchandise inventory $ 10,500 Fixed selling expense $ ? Fixed administrative expense $ 12,600 Variable selling expense $ 15,750 Variable administrative expense $ ? Contribution margin $ 63,000 Net operating income $ 18,900 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:
prohojiy [21]3 years ago
7 0

Answer:

Instructions are listed below

Explanation:

Giving the following information:

Q=1000

Sales= $ 315,000

Beginning merchandise inventory= $21,000

Purchases= $210,000

Ending merchandise inventory= $10,500

Fixed selling expense= $ ?

Fixed administrative expense= $12,600

Variable selling expense= $15,750

Variable administrative expense= $ ?

Contribution margin= $63,000

Net operating income= $18,900

First, we have to calculate the variable administrative expense:

Contribution margin= sales - cost of goods sold - variable selling expense - variable administrative expense

63000= 315000 - (beginning inventory + purchase - ending inventory) - 15750 - variable administrative expense

variable administrative expense= 315000 - (21000+210000-10500)-15750-63000

variable administrative expense= $15750

Now, we can calculate the fixed selling expense:

Net operating income= contribution margin - fixed selling expense - fixed administrative expense

18900= 63000 - fixed selling expense - 12600

fixed selling expense= 63000-12600-18900

fixed selling expense= 31500

A)Sales= 315,000

Variable costs:

Cost of good sold= 220,500

Variable selling expense= 15,750

Variable administrative expense= 15,750

Total variable cost= 252,000

Contribution margin=$63000

Fixed costs:

Fixed selling expense= 31,500

Fixed administrative expense= 12,600

Total fixed cost= $44,100

Net profit= $18,900

B) Revenue= 315,000

COGS= 220,500 (-)

Gross porfit= 94500

Selling expense= (15750+31500)= 47,250

Administrative expense= (15750+12600)= 28,350

EBITDA= 18,900

C) Selling price per unit= 315,000/1000= $315

D) Variable cost per unit= total variable cost/q= 252000/1000= $252

E) Contribution margin per unit= 63000/1000= $63

F) The contribution format income statement, because you can easily analyze the effect of each unit in the cost structure and net income.

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Loss of network audience and the rise of cable have resulted in a new way for affiliates to receive compensation. _____________
murzikaleks [220]

Answer:

The correct answer is letter "C": Reverse compensation.

Explanation:

Reverse compensation is the practice by which television stations pay a television network for its affiliation to the network. This approach performed in the <em>U.S. broadcasting system</em> is called reverse because it aims to compensate networks for the advertising time used by the television stations while their programming is on the air.

5 0
3 years ago
wist Corp. has a current accounts receivable balance of $330,800. Credit sales for the year just ended were $3,804,200. a. What
Alex17521 [72]

Answer:

Receivables turnover = 11.50 times

Days' sales in receivables = 31.74 days

Average collection period = 31.74 days

Explanation:

<u>Receivables Turnover Ratio</u>

Receivables turnover = Credit Sales / Receivables

                                    = $3,804,200 / $330,800

                                     = 11.50 times

Receivables turnover ratio measures how many times a company's receivables are converted to cash in a period. A high receivables turnover ratio can indicate that a company’s collection of accounts receivable is efficient and that the company has a high proportion of quality customers that pay their debts quickly.

<u>Days' sales in Receivables/ Average Collection Period</u>

Days' sales in receivables = 365 days / Receivables turnover

                                            = 365 / 11.50

                                            = 31.74 days

On average, credit customers took 31.74 days to pay off their accounts.

The days' sales in receivable ratio which is also known as the average collection period tells you the number of days it took on average to collect the company's accounts receivable during the past year.

6 0
2 years ago
2.1: A debit is A : a decrease to an account. B : an entry on the left side of an account. C : an entry on the right side of an
Luba_88 [7]

Answer:

B : an entry on the left side of an account.

Explanation:

There are two terms i.e debit and credit.  

The accounts that reported as an expense, losses, assets are recorded in the left-hand side of an account as it contains the debit balance.

While the account reported as a revenue, gains, liabilities & stockholder equity are recorded in the right-hand side of an account as it contains the credit balance.

7 0
3 years ago
John Daniel opened a medical practice in Sacramento, California, and had the following transactions during the month of January.
spayn [35]

Answer:

Explanation:

The journal entries are shown below:

1. Cash A/c Dr $34,000

       To Common stock A/c $34,000

(Being the cash is received in exchange of common stock)

2. Medical supplied A/c Dr $17,000

          To Account payable A/c $17,000

(Being the medical supplies are purchased on account)

3. Cash A/c Dr $1,600

        To Service Revenue A/c $1,600

(Being the cash is received for service performed)

4. Office Rent Expenses A/c Dr $3,000

           To Cash A/c $3,000

(Being the office rent expense is paid for cash)

5. Accounts Receivable A/c Dr $7,000

            To Service revenue A/c $7,000

(Being the service revenue is recorded)

4 0
3 years ago
After the amount due on a sale of $30,400, terms 2/10, n/eom, is received from a customer within the discount period, the seller
Elenna [48]

Answer:

a. The amount refund owed to the customer is : $29,792

b. To record the refund and the return of merchandise:

Dr Sales returned and Allowances     $30,400

Cr Sales Discounts                              $608

Cr Cash                                                $29,792

(to record the refund of $30,400 sales with sales discount of $608 made)

Dr Merchandise Inventory                    $13,060

Cr Cost of Merchandise sold               $13,060

(to record the impact of the $30,400 sales refund on cost of merchandise sold and merchandise inventory)

Explanation:

- Further explanation for sell discounts calculation:

As the terms is 2/10, total discount had been given as calculated below:

$30,400 x 2% = $608.

3 0
3 years ago
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