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NNADVOKAT [17]
3 years ago
5

The Talbot Corporation makes wheels that it uses in the production of bicycles. Talbot's costs to produce 100,000 wheels annuall

y are: Direct materials $30,000 Direct labor $50,000 Variable manufacturing overhead $20,000 Fixed manufacturing overhead $70,000 An outside supplier has offered to sell Talbot similar wheels for $1.25 per wheel. If the wheels are purchased from the outside supplier, $15,000 of annual fixed overhead could be avoided and the facilities now being used could be rented to another company for $45,000 per year. Direct labor is a variable cost. If Talbot chooses to buy the wheel from the outside supplier, then annual net operatingincome would: A. Increase by $35,000 B. Decrease by $10,000 C. Increase by $45,000 D. Increase by $70,000
Business
1 answer:
deff fn [24]3 years ago
6 0

Answer:

Increase in net annual operating income  $35,000

Explanation:  

                                                                                                    $

Variable cost of internal production

(30,000+50,000 + 20,000)                                                    100,000

Variable cost of purchase  (1.25× 100,000)                           <u>125,000</u>

Extra variable cost of buying                                                  ( 25,000)

Add savings in fixed cost from                                                15,000

Add rent from facilities                                                         <u>    45,000</u>

Increase in net annual operating income                            <u>  35,000</u>

Increase in net annual operating income  $35,000

The balance of the the fixed  cost is not relevant hence it was  not considered. This is so because whatever decision is taken, it would be incurred either way

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2 years ago
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Sysco Corporation, formed in 1969, is the largest global distributor of food service products, serving over 500,000 restaurants,
Leona [35]

Answer:

Sysco Corporation

Journal Entries:

a. Debit Buildings $450

Debit Equipment $234

Credit Cash $684

To record the purchase of long-term assets for cash.

b. Debit Cash $119

Credit Short-term Note Payable $119

To record the funds borrowed from a bank.

c. Debit Accounts receivable $23,358

Debit Cash $30,813

Credit Service Revenue $54,171

To record the provision of service to customers on account and for cash.

d. Debit Accounts Payable $129,574

Credit Cash $129,574

To record the payment on account.

e. Debit Inventory $41,983

Credit Accounts Payable $41,983

To record the purchase of merchandise on account.

f. Debit Salaries Expense $5,240

Credit Cash $5,240

To record the payment of payroll during the year.

g. Debit Cash $19,043

Credit Accounts receivable $19,043

To record the cash received from customers on account.

h. Debit Delivery Vehicles Expense $1,600

Credit Cash $1,600

To record the purchase of fuel for the delivery vehicles.

i. Debit Dividend $598

Credit Dividends Payable $598

To record the declaration of dividend.

j. Debit Utilities Expense $126

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Explanation:

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b. Cash $119 Short-term Note Payable $119

c. Accounts receivable $23,358 Cash $30,813 Service Revenue $54,171

d. Accounts Payable $129,574 Cash $129,574

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f. Salaries Expense $5,240 Cash $5,240

g. Cash $19,043 Accounts receivable $19,043

h. Delivery Vehicles Expense $1,600 Cash $1,600

i. Dividend $598 Dividends Payable $598

j. Utilities Expense $126 Cash $93 Utilities Payable $33

5 0
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Answer:

Dr Cash/ Accounts Receivables $249,050

Cr Revenue $249,050

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The customer receives a discount for purchasing the bundle of goods because the sum of the stand-alone selling prices ($300,000) exceeds the promised consideration ($293,000). There is a discount of $7,0000

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Software = $255,000/$300,000 X $7,000 = $5,950

The software sale is $255,000 - $5,950 = $249,050

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