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3 years ago

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Kara was out jogging and, despite being tired, decided to run one more mile. based on her actions, economists would conclude tha

t kara:

1 answer:

Contact [7]3 years ago

7 0

Pushes herself and is determined to finish something she started.

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Required information The Foundational 15 [LO6-1, LO6-2, LO6-3, LO6-4, LO6-5] [The following information applies to the questions

Vsevolod [243]

Answer:

Results are below.

Explanation:

<u>The absorption costing </u>method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.

<u>The variable costing method</u> incorporates all variable production costs (direct material, direct labor, and variable overhead).

<u>Variable costing income statement:</u>

Total unitary variable production cost= (24 + 16 + 2 + 3)= $45

Sales= 73*51,000= 3,723,000

Total variable cost= 51,000*45= (2,295,000)

Contribution margin= 1,428,000

Fixed manufacturing overhead= (784,000)

Fixed selling and administrative expense= (672,000)

Net operating income= (28,000)

<u>Absorption costing income statement:</u>

Unitary production cost= (24 + 16 + 2) + (784,000/56,000)

Unitary production cost= $56

Sales= 73*51,000= 3,723,000

COGS= 51,000*56= (2,856,000)

Gross profit= 867,000

Total selling and administrative= 672,000 + 3*51,000= (825,000)

Net operating income= 42,000

<u>The difference between both methods is the fixed manufacturing overhead allocated in ending inventory.</u>

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3 years ago

Charlie’s Furniture Store has been in business for several years. The firm's owners have described the store as a "high-price, h

wolverine [178]

Answer:

a. Calculate current sales and ROI for Charlie’s Furniture Store.

asset turnover formula = net sales / average assets

0.4 = net sales / $800,000

net sales = $320,000

ROI = net income / investment

net income = $320,000 x 34% = $108,800

ROI = $108,800 / $800,000 = 13.6%

b. Assuming that the new strategy would reduce margin to 20%, and assuming that average total assets would stay the same, calculate the sales that would be required to have the same ROI as Charlie’s currently earns.

net income = net sales x 20% (new margin)

net sales = $108,800 / 20% = $544,000

c. Suppose you presented the results of your analysis in parts a and b of this problem to Charlie, and he replied, "What are you telling me? If I reduce my prices as planned, then I have to practically double my sales volume to earn the same return?" Given the results of your analysis, what is the actual amount of increase in sales required?

sales increase = ($544,000 - $320,000) / $320,000 = 70% increase

d. Now suppose Charlie says, "You know, I'm not convinced that lowering prices is my only option in staying competitive. What if I were to increase my marketing effort? I'm thinking about kicking off a new advertising campaign after conducting more extensive market research to better identify who my target customer groups are." In general, explain to Charlie what the likely impact of a successful strategy of this nature would be on margin, turnover, and ROI.

An extensive market research and a "successful" marketing campaign are generally expensive. Even if the marketing campaign is really successful in increasing sales, costs would also increase. So the equation may or may not change, depending if the contribution margin of the additional units sold will be able to cover the expenses of a complex marketing campaign. If you spend $100 to earn $100 more, your situation hasn't changed at all. Which means that net income may or may not increase, therefore, the profit margin, ROI and asset turnover may not change.

7 0

3 years ago

Myrtle Beach Pro-Shop receives information that requires the company to increase its expectations of uncollectible accounts rece

Lera25 [3.4K]

Answer:

b. Accounts receivables (gross) is reduced

Explanation:

As we know that

The journal entry to record the bad debt expense is

Bad debt expense A/c Dr

To Allowance for doubtful debts

(Being allowance of uncollectible accounts are recorded)

By passing this journal entry, both bad debt expense and the allowance for doubtful debts which result in a decrease in the net income and the balance of account receivable but the gross of account receivable would remain the same.

3 0

3 years ago

On December 10, you receive your bank statement showing a balance of $2,979.94. Your checkbook shows a balance of $2,778.88. Out

babunello [35]

Answer:

See below

Explanation:

Balance per bank statement $2,979.94

Add: Interest earned $126.83

Less:

Check book balance $2,788.88

Add: Oustanding checks

($381.83 + $171.57)

6 0

3 years ago

The following information is available for Concord Corporation and Skysong, Inc.: (in millions) Concord Corporation Skysong, Inc

Aleonysh [2.5K]

Answer:

Earnings per share of Concord Corporation for the year 2022 = $2.83

Explanation:

As for the information provided we have,

Earning per share to be computed for Concord Corporation for 2022

Note: Earning per share is computed for a period, and not for the particular date as it relates to the return on investment.

Therefore, Earnings per share for equity = Earnings for equity for the year concerned/Average number of shares outstanding

Average number of shares outstanding = (Opening equity + Closing Equity)/2

Equity shares in the beginning of 2022 = 180 million

Since no information for losing shares given thus, assumed same as of beginning.

Net income for equity = Net income - Pref dividend = $535 - $26 = $509 million

Earnings per share = $509 million/180 million

= $2.83 per share

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3 years ago