Answer:
a. Traditional Income Statement
Sales ($125 x 140) $17,500
Cost of Sales ($60 x 140) <u>($8,400)</u>
Gross Profit $9,100
Salaries ($1,300)
Rent ($1,000)
Sales Commission ($17,500 x 5%) <u>($875) </u>
Net income <u>$5,925</u>
b. Contribution Margin Income Statement
Sales ($125 x 140) $17,500
Less: variable Costs
Cost of Sales ($60 x 140) ($8,400)
Sales Commission ($17,500 x 5%) <u>($875) </u>
Contribution Margin $8,225
Less: Fixed Costs
Salaries ($1,300)
Rent <u>($1,000)</u>
Net income <u>$5,925</u>
Explanation:
a.
Traditional Income statement calculates the gross profit after deducting the cost of goods sold from the revenue. After that it deduct all the operating expenses to calculate the Net Income.
b.
Contribution margin income statement consider all the variable expenses as cost of product cost and calculates the contribution margin, after that the fixed costs are deducted calculate the net income.
Answer:
The correct answer is: D. The supply increases more than the demand increases.
Explanation:
The law of supply and demand is the basic principle on which a market economy is based. This principle reflects the relationship between the demand for a product and the quantity offered of that product taking into account the price at which Sell the product.
Thus, depending on the price in the market of a good, the bidders are willing to manufacture a certain number of that good. Like the plaintiffs they are willing to buy a certain number of that good, depending on the price. The point where there is a balance because the plaintiffs are willing to buy the same units that the bidders want to manufacture, for the same price, is called the market equilibrium or breakeven point.
According to this theory, the law of demand states that, keeping everything else constant, the quantity demanded of a good decreases when the price of that good increases. On the other hand, the law of supply indicates that, keeping everything else constant, the quantity offered of a good increases when its price does.
Answer:
B. The payback is approximately three years
Explanation:
The computation of payback period for this equipment purchase is shown below:-
<u>Year Cash flow Cumulative cash flow</u>
0 -$600,000 -$600,000
1 $250,000 -$350,000
2 $200,000 -$150,000
($250,000 - $50,000)
3 $150,000 0
($200,000 - $50,000)
4 $100,000 $100,000
($150,000 - $50,000)
5 $50,000 $150,000
($100,000 - $50,000)
Here, Cumulative cash flow in the year o is -$600,000 and as we can see that cumulative cash flow in year 3 is 0.
Therefore the payback period lies in 3 years.
Without reading to far into it the answer will be C
Answer: c. Foster Inc.'s assets will decrease by a net amount of $30,000.
d. The Company's liabilities will increase by $30,000.
Explanation:
From the question, Foster, Inc., bought a truck by paying $5,000 and then borrowed the remaining $30,000 that was required to complete the transaction.
Since the company borrowed $30,000, this will lead to an increase in the liability of the company by $30,000. Also, it will lead to a reduction in the net assets of the company by a net amount of $30,000
