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Ahat [919]
2 years ago
11

PM Industries has two service departments (Administration and Maintenance) and two operating departments. Departmental costs bef

ore allocations are $950,000 for Administration and $1,650,000 for Maintenance. Maintenance costs are allocated on the basis of the number of LPM employees. Administration has 450 employees; Maintenance has 750 employees; Operating Department 1 has 1,350 employees and Operating Department 2 has 1,200 employees. Using the step-down method, how much of the cost from the Maintenance Department will be allocated to Administration
Business
1 answer:
Nutka1998 [239]2 years ago
6 0

Answer:

The answer is " 873,529.412"

Explanation:

Following are the equation which the administration would be responsible for the costs of the maintenance departments:

\to 1,650,000 \times  \frac{1,350}{(1,350+1,200)}\\\\\to 1,650,000 \times  \frac{1,350}{2,550}\\\\\to 1,650,000 \times  \frac{135}{255}\\\\\to 1,650,000 \times  \frac{27}{51}\\\\\to 1,650,000 \times  \frac{9}{17}\\\\\to \frac{14,850,000}{17}\\\\\to 873,529.412

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Answer:

2021 2020 Income Statement Information

Sales revenue $ 8,400,000 $ 7,900,000

Cost of goods sold 5,535,600 5,400,000

Net income 332,500 198,000

Balance Sheet Information

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Long-term assets 2,150,000 1,850,000

Total assets $ 3,700,000 $ 3,300,000

Current liabilities $ 1,150,000 $ 850,000

Long-term liabilities 1,550,000 1,550,000

Common stock 750,000 750,000

Retained earnings 250,000 150,000

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<h2>1. </h2>

Calculate the following profitability ratios for 2021: (Round your answers to 1 decimal place.)

The four main profitability ratios are:

  1. gross profit margin = (revenue - COGS) / revenue = ($8,400,000 - $5,535,600) / $8,400,000 = 0.341 or 34.1%
  2. net profit margin = net profit / revenue = $332,500 / $8,400,000 = 0.03958 or 3.96%
  3. return on assets = net income / average total assets = $332,500 / [($3,700,000 + $3,300,000)/2] = $332,500 / $3,500,000 = 0.095 or 9.5%
  4. return on equity = net income / shareholders equity = $332,500 / $1,000,000 = 0.3325 or 33.25%

<h2>2. </h2>

Determine the amount of dividends paid to shareholders in 2021.

retained earnings 2021 - retained earnings 2020 = net income - dividends

$250,000 - $150,000 = $332,500 - dividends

$100,000 + dividends = $332,500

dividends = $332,500 - $100,000 = $232,500

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<h3>What is cooperate stocks?</h3>

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