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Jobisdone [24]
2 years ago
12

Butler Automotive developed a new diagnostic testing procedure that is expected to increase sales by $10,000 per month. As more

drivers bring in their vehicles, Butler expects to also do more oil changes and brake repairs. As a result, inventory levels of oil and brake parts must be increased by $5,000. Revenues from oil changes and brake jobs are expected to increase by $4,000 per month. An example of an increase in net working capital requirements from the new diagnostic testing procedure is the
A) increase in inventory levels of oil and brake parts of $5,000.
B) increase in revenue of $10,000 per month for the diagnostic testing.
C) increase in revenues from oil changes and brake jobs of $4,000 per month.
D) increase in all activities totaling $19,000 per month.
Business
1 answer:
Bas_tet [7]2 years ago
6 0

Answer:

A

Explanation:

Working capital are the components of the current assets that represents liquidity , readily available for day to day business operation.

It is made up of cash , receivable , payable , inventory balance .

Due to the new development in the business of Butler automotive , there is an upsurge in the demand for oil which has led to the increase in the oil inventory to the tune of $5,000

This means that the required working capital of Butler also has to increase to meet up with the demand.

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Willow Wanderer Cameras Inc. reported the following results for the year ending October 31, 20Y9: Retained earnings, November 1,
ANTONII [103]

Answer:

The statement would be:

Date: October 31, 2019

Net Income                $680,700

Cash dividends           $50,000

Stock dividends         $127,000

Retained earnings     $503,700

The retained earnings are equal to the sum of declared dividends substracted  from the net income.

3 0
3 years ago
Amortization related to overvalued equipment Select one: A. increases consolidated net income. B. increases the parent's reporte
Kruka [31]

Answer: D. Both A and B are correct.

Explanation: Amortization is the reduction or paying off debt over time in a series of payments of interest and principal sufficient to repay the loan in full by its maturity date.  As an accounting technique, it is used to periodically lower the book value of a loan or intangible asset over a period of time. Amortization related to overvalued equipment increases consolidated net income and under the equity method (a method used in the valuation of a firm's investment in another when it holds significant influence over the firm being invested in), it increases the parent's reported net income.

4 0
3 years ago
Indiana Co. began a construction project in 2021 with a contract price of $150 million to be received when the project is comple
Over [174]

Answer:

Recognize $ 1.50 millions gross profit in 2022

Explanation:

 

                                        Year end 2021         Year end 2022

A  Contract Price               $150.00                          $150.00

B  Cost Incurred to Date    $36.00                             $94.50

                                                                                ($36 + $58.50)

C  Estimated cost yet to be

incurred to complete

the contract                        $84.00                              $0.50

Total Cost                          $120.00                              $135.00

D = B+C  

Percentage of Completion  30.00%                            70.00%

E = (B ÷ D) × 100

Revenue to date                  $45.00                             $105.00

F = A × E

G  Revenue of Previous year    $-                                $45.00

Net Revenue this year            $45.00                         $60.00

H = F - G

Cost to date                            $36.00                           $94.50

I (=B)

J  Cost to date of previous year $-                               $36.00

Net Cost for the year               $36.00                           $58.50

K = I - J

Gross Profits                              $9.00                            $1.50

L = H - K

Therefore the correct answer is Recognize $ 1.50 millions gross profit in 2022 hence, option is not available.

3 0
3 years ago
To maintain good citizenship as a company and to make a fair profit on current operations are examples of _____. values
Radda [10]
Those are examples of values.
Values is a set of standard that held by certain individuals or group that would be a crucial factor in creating their moral codes.
Different companies may held completely different values based on what they want to achieve as their goals and identity.
7 0
3 years ago
Units Produced 20,000
Alexeev081 [22]

Answer:

Instructions are below.

Explanation:

Giving the following information:

Units Produced 20,000

Units Sold 17,000

Unit Sales Price $ 240

Full Manufacturing Cost Per Unit $97

<u>Under the absorption costing method, the fixed manufacturing overhead is part of the product cost.</u>

Income statement:

Sales= (17,000*240)= 4,080,000

Cost of goods sold= (17,000*97)= (1,649,000)

Gross profit= 2,431,000

Variable Selling Expenses=  (71,000)

Fixed General and Administrative Costs= (88,000)

Net operating income= 2,272,000

3 0
3 years ago
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