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Helga [31]
3 years ago
13

Goshen Company's contribution format income statement for the most recent month is given below: Sales (42,000 units) $ 1,218,000

Variable expenses 852,600 Contribution margin 365,400 Fixed expenses 292,320 Net operating income $ 73,080 The industry in which Goshen Company operates is quite sensitive to cyclical movements in the economy. Thus, profits vary considerably from year to year according to general economic conditions. The company has a large amount of unused capacity and is studying ways of improving profits.Required:New equipment has come on the market that would allow Goshen Company to automate a portion of its operations. Variable expenses would be reduced by $8.70 per unit. However, fixed expenses would increase to a total of $657,720 each month. Prepare two contribution format income statements, one showing present operations and one showing how operations would appear if the new equipment is purchased. (Input all amounts as positive values except losses which should be indicated by minus sign.)
Business
1 answer:
scoundrel [369]3 years ago
8 0

Answer:

Sales Revenue        1,218,000 1,218,000

Variable Cost                  852,600 487,200

Contribution margin   365,400 730,800

Fixed Cost                  292,320 657,720

Operating Income            73,080 73,080

Explanation:

Variable cost 852,600 / 42,000 units = 20.3 then - 8.7 for the decrease due to nex equipment = 11.6  Then 11.6 x 42,000 = 487,200

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Identify which of the following statements is true.
JulijaS [17]

Answer:

A.

Explanation:

Organizational expense amortized over fifteen years for purposes of determining taxable income results in an upper adjustment in the initial years to book income on the Schedule Minus−1 when the expense is being amortized over ten years for book income purposes.

4 0
3 years ago
Windsor Windows manufactures and sells custom storm windows for enclosed porches. Windsor also provides installation service for
Alina [70]

Answer:

June 1, 2021

No entry – neither party has performed under the contract.

August 1,2021

Dr.  Cash                                        $4,000

Dr.  Accounts Receivable            $700

Cr.  Unearned Service Revenue  $1,085

Cr.  Sales revenue                        $3,615

Dr.  Cost of goods Sold                $2,300

Cr.  Inventory                                 $2,300

Explanation:

As no one performed under the contract on June 1, 2021, so there will be no entry on this day.

On August 1, 2021, Windsor has 2 performance obligations

First: Delivery of the windows

&

Second: Installation of the windows

Fair value of Windows = $4,000

Fair value of Installation services = $1,200

Fair Value of Contract  = $4,000 + $1,200 = $5,200

Allocation of to revenue is based on the ratio of fair value of each performance to the total fair value of contract, As below

Windows  = ($4,000 / $5,200) X $4,700 = $3,615 (round to nearest dollar)

Installation services = ($1,200/$5,200) X $4,700 = $1,085 (round to nearest dollar)

Total Revenue recognized = $4,700

8 0
3 years ago
Black Diamond Company produces snow skis. Each ski requires 2 pounds of carbon fiber. The company’s management predicts that 6,1
frutty [35]

Answer:

Production for the third quarter   159,500

Explanation:

Sales for the period           161,000

Desired ending inventory    4,600

Total production needs     165,600

Beginning Inventory             (6,100)

Production for the third quarter   159,500

The sales for the period and the desired ending inventory are the total units we need for the quarted.

the beginning inventory reduces the production because are units we already have

5 0
3 years ago
Franklin Company deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of b
N76 [4]

Answer:

Adjusted balance = $23,387

Explanation:

                    Franklin Company

        Bank Reconciliation statement

Bank balance as of August 31                 $21,837

Add: Deposit in transit          <u>                   $ 7,350</u>

                                                                 $29,187

<u>Less: Outstanding check                        $(5,800)</u>

Adjusted cash balance                          $23,387

Cash balance as of August 31                $22,662

Add: Collection of Note receivable     <u>   $     870</u>

                                                                 $23,532

<u>Less: Bank service charge                      $(    145)</u>

Adjusted cash balance                          $23,387

6 0
3 years ago
What is a popular model for the formation of an atoll?
kipiarov [429]
<span>a volcanic island forms and subsides</span>
3 0
2 years ago
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