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Whitepunk [10]
3 years ago
12

Kingbird Company sells 290 units of its products for $18 each to Logan Inc. for cash. Kingbird allows Logan to return any unused

product within 30 days and receive a full refund. The cost of each product is $11. To determine the transaction price, Kingbird decides that the approach that is most predictive of the amount of consideration to which it will be entitled is the probability-weighted amount. Using the probability-weighted amount, Kingbird estimates that (1) 10 products will be returned and (2) the returned products are expected to be resold at a profit.
Required:
a. Indicate the amount of Net sales.
b. Indicate the amount of estimated liability for refunds.
Business
1 answer:
tensa zangetsu [6.8K]3 years ago
8 0

Answer:

Kingbird Company

a. The amount of Net Sales = $5,040.

b. The amount of the estimated liability for refunds = $180

Explanation:

a) Data and Calculations:

Units of products sold to Logan Inc. = 290

Selling price = $18

Sales revenue = $5,220 ($18 * 290)

Cost of each unit = $11

Expected returns = 10/290 = 0.03448

Net sales = $5,220 * (1 - 0.03448)

= $5,040

Estimated liability for refunds = $180 ($5,220 - $5,040)

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Answer:

The correct answer is (e)

Explanation:

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3 years ago
Bolding Inc.'s contribution margin ratio is 61% and its fixed monthly expenses are $47,500. Assuming that the fixed monthly expe
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Answer:

c. $36,070

Explanation:

contribution margin ratio is the ratio of the contribution to sales of an entity for a given period.

contribution margin ratio= contribution/sales

where contribution is the difference between sales and the variable cost

Given;

sales = $137,000

contribution margin ratio = 61% = 0.61

0.61 = contribution/$137,000

contribution = $137,000 × 0.61

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Answer:

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b.  In order to calculate thedays’ sales in inventory we would have to use the following formula:

days’ sales in inventory=(Ending invenory/cost of goods sold)*365

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