True or false: An EAP only contains information on what happens during an emergency.

Lusk Corporation produces and sells 10,000 units of Product X each month. The selling price of Product X is $40 per unit, and va

melisa1 [442]

Answer:

There is a financial disadvantage of ($30,000).

Explanation:

The discontinuity of product X would result in the contribution lost.

Sales that would be lost = $40 × 10,000 units = $400,000

Relevant variable cost with the production of product X that would be saved = $32 × 10,000 units = $320,000

Contribution lost = Sales lost - Variable cost saved

Contribution lost = $400,000 - $320,000

Contribution lost = $80,000

Saving in fixed costs = $120,000 - $70,000 (this would not be incurred) = $50,000

However, still contribution lost is more than the saving in fixed costs

Therefore, the financial disadvantage = $80,000 - $50,000 = ($30,000)

3 0

3 years ago

The account balances of Sentinel Travel Service for the year ended August 31, 2019, are listed below:

Yanka [14]

Answer:

Explanation:

The preparation of the report form balance sheet as of August 31, 2019 is presented below:

Sentinel Travel Service

Report form balance sheet

For the year ended August 31, 2019

Assets

Cash $143,125

Account receivable $54,240

Supplies $9,300

Land $248,000

Total assets $454,665

Liabilities

Account payable $19,370

Owner equity

Ending capital $435,295

Total liabilities

And owners equity $454,665

The net income would be

= Fees earned - Office expense - Miscellaneous expense - Wages expense

= $774,800 - $178,205- $15,495 - $371,905

= $209,195

And, the ending capital would be

= Opening capital - withdrawn amount + net income - additional cpiatl

= $209,000 - $29,400 + $209,195 + $46,500

= $435,295

7 0

3 years ago

On January 1, 20X1, the Moody Company entered into a transaction for 100% of the outstanding common stock of Osorio Company. To

Paha777 [63]

Answer:

B. $1,760

Explanation:

Given that:

Liabilities = $400, shares = 40 shares, par value = $1 per share, undervalued building asset = $60, net building amount = $1260

amount of consolidated buildings (net) at date of acquisition = net amount for buildings + amount of undervalued building asset + $400 + ($1.00 x 40 shares)

amount of consolidated buildings (net) at date of acquisition = $1260 + $60 + $400 + $40 = $1760

3 0

3 years ago

Why net profit will be higher if increases average prices to customers?

vampirchik [111]

Answer:

Higher prices with same sales quantity will mean greater profit.

Explanation:

Let's hold some variables constant. If a business sells books, and they take the prices up, if they sell the same quantity (at higher prices) this would increase revenues. Higher revenues, less the same cost structure (variable and fixed costs) will lead to a greater profit generation. Of course in the real world, price elasticity of demand comes in play when prices are changed. If prices go up, typically sales quantity will decrease and there may be a net effect in revenue and hence profit. In the simple case where prices go up and sales quantity is unaffected, net profit will rise.

6 0

3 years ago

Assume Shamrock estimates bad debts based on 5% of the Accounts Receivables ending balance (as of Dec. 31, 20x2). Determine Bad

a_sh-v [17]

Answer:

Bad Debt Expense for 20x2 is $50,245

Explanation:

Note: The full question is attached as picture below

Ending balance = Beginning balance + Sales on account or credit sales - Cash collected - Uncollected accounts

Beginning balance of Accounts receivable (given) = $850000

Credit sales in 20X2 = 80% * $3125000 = $2500000

Cash collections (given) = $2400000

Uncollectible accounts (given) = $52100

Ending balance = $850000 + $2500000 - $2400000 - $52100 = $897900

Allowance required to be made for 20X2 = 5% of Accounts receivables ending balance on 20X2 = 5% * $897900 = $44895

First we will write off uncollectible accounts of $52100 from the beginning balance of allowance for uncollectible accounts. (Beginning balance of allowance for doubtful accounts = $46750 ).

Difference = Beginning balance of allowance account - Uncollectible accounts = $46750 - $52100 = - $5350

It means that there is a shortfall of $5350 in the allowance for doubtful accounts. And, also a total of $44895 should be there in the credit of Allowance for doubtful accounts at the end of 20X2. Allowance needed in 20X2 = $44895 + $5350 = $50,245 . So, the Bad debt expense for 20X2 is $50,245.

7 0

3 years ago