Explanation:
The computation of the fixed cost and the variable cost per hour by using high low method is shown below:
Variable cost per mile = (High Operating cost - low operating cost) ÷ (High miles - low miles)
= ($845 - $625) ÷ (3,350 miles - 2,250 miles)
= $220 ÷ 1,100 miles
= $0.2 per miles
Now the fixed cost equal to
= High operating cost - (High miles × Variable cost per miles)
= $845 - (3,350 miles × $0.2 per miles)
= $845 - $670
= $175
And, the contribution margin income statement is presented below:
Sales (1,400 × $0.6) $840
Less: Variable cost (1,400 × $0.2) ($280)
Contribution margin $560
Less: Fixed cost ($175)
Net operating income $385
Answer:
North Star
Adjusting Journal Entries:
December 31:
Rent Expense $1,280
Prepaid Rent $1,280
To accrue rent for the period.
Depreciation Expense $1,080
Accumulated Depreciation $1,080
To accrue Depreciation charge for the year.
Utilities Expense $9,800
Utilities Payable $9,800
To accrue unpaid utilities.
Income Tax Expense $470
Income Tax Payable $470
To accrue income tax liability.
Explanation:
Adjusting entries are journal entries that are made at the end of an accounting period to ensure that all expenses and incomes pertaining to the period are recognized in accordance with the accrual concept and the matching principle. These accounting concepts require that all expenses incurred whether paid for or not and income whether received or not, which relate to the period, are matched respectively.
Answer:
Inventory turnover in days = 43.59 days
Inventory turnover (No of times)= 8.37 times
Explanation:
<em>Inventory turnover days is the average length of time it takes a business to sell its inventory before replacement.</em>
Inventory turnover in days
= Average inventory /Cost of goods sold × 365 days
<em>Average inventory = (Opening Inventory + closing inventory)/2</em>
<em>Average inventory </em>
= (21,000 + 22,000)/2
= 21,500
<em>Inventory turnover in days</em>
(21,500/180,600) × 365 days
=43.597 days
Inventory turnover (No of times )
= Cost of goods sold/Average inventory
= 180,600/21,500
= 8.37 times
Answer:
Journal Entry
Date Account Titles and Explanation Debit Credit
Jan 1 Cash $511,875
Bond payable $450,000
Premium on bond payable $61,875
($450,000*13.75%)
(To record issue of bonds at premium)
