The answer is: A) to reflect the current business environment
Pro forma financial statement refers to the financial statement that is made based on assumption or projection. This mean that the financial planning is made based on how the future would look like according to our own opinion.
Current business environment cannot be considered as pro forma financial statement because it represent the situation that already happen. We does not need any projection to state current business environment.
Answer:
$593,000
Explanation:
Net income before debt in second year:
= Reported net income + wrote off accounts as uncollectible
= 600,000 + 34,000
= $634,000
Net income = Net income before debt in second year - Bad debts expense
= $634,000 - (1% of 4,100,000)
= $634,000 - 41,000
= $593,000
Answer:
Product ABC
Explanation:
Calculation to determine the maximize profit, they should first fill the demand for if the company's constraint is machine hours.
Product ABC's CM per unit= $10/5 minutes
Product ABC's CM per unit=$2 per minute of machine time
Product XYZ's CM per unit=$15/10 minutes
Product XYZ's CM per unit= $1.50 per minute of machine time
Therefore If the company's constraint is machine hours, to maximize profit, they should first fill the demand for PRODUCT ABC because it has the HIGHEST CM PER UNIT.
Answer: The answer is as follows:
Explanation:
Opportunity cost refers to the benefit of a commodity that is forgone to produce one extra unit of some other commodity.
It is also refers to the value of next best alternative that is given up by choosing some other alternative.
Here, if Dexter accepts the laser printer as payment then the opportunity cost of this exchange is the value of next best alternative and that is television.
Answer:
A. the company's gross margin is $100,000, while its contribution margin is $60,000.
Explanation:
Under the gross margin, the net income would be
= Sales - cost of goods sold
= $300,000 - $200,000
= $100,000
Under the contribution margin, the net income would be
= Sales - cost of goods sold - variable operating expenses
= $300,000 - $200,000 - $40,000
= $60,000
Under the gross margin, no operating expenses would be considered whereas for contribution margin, only the variable operating expenses is considered
