A debit in the T-Account for 'Cash' may be balanced by a credit in which of the following?

Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all produc

Pavlova-9 [17]

Answer:

Part a 

Belmain Co.

Estimated Income statement for the year ended 2017.

Sales ($240 x 12,000) $2,880,000

Less Variable Costs :

Direct Materials ($50.00 x 12,000) ($600,000)

Direct Labor ($30.00 x 12,000) ($360,000)

Factory Overheads ($6.00 x 12,000) ($72,000)

Sales Salaries and Commissions ( $4.00 x 12,000) ($48,000)

Miscellaneous selling expenses ( $1.00 x 12,000) ($12,000)

Supplies ($4.00 x 12,000) ($48,000)

Miscellaneous administrative expenses ($1.00 x 12,000) ($12,000)

Contribution $1,728,000

Less Fixed Expenses :

Factory overhead ($350,000)

Sales salaries and commissions ($340,000)

Advertising ($116,000)

Travel ($4,000)

Miscellaneous selling expense ($2,300)

Office and officers’ salaries ($325,000)

Supplies ($6,000)

Miscellaneous administrative expense ($8,700)

Net Income ( Loss) $576,000

Part b

0.6 or 60 %

Part c

Break-even sales (units) = 8,000

Break-even sales (dollars) = $1,920,000

Part d

See attachment

Part e

Margin of safety in dollars = $960,000

Margin of safety in percentage = 33.3 %

Part f

Operating Leverage = 3.00

Explanation:

Income Statement :

Sales - Expenses = Income

Note : I have separated Variable and Fixed Expenses

Contribution Margin ratio :

Contribution Margin ratio = Contribution ÷ Sales

= $1,728,000 ÷ $2,880,000

= 0.6 or 60 %

Break-even sales ( units and dollars) :

Break-even sales (units) = Fixed Costs ÷ Contribution per unit

= $1,152,000 ÷ $144.00

= 8,000

Break-even sales (dollars) = Fixed Costs ÷ Contribution margin ratio

= $1,152,000 ÷ 0.60

= $1,920,000

Margin of safety in dollars and as a percentage of sales :

Margin of safety in dollars = Expected Sales (dollars) - Break-even sales (dollars)

= $2,880,000 - $1,920,000

= $960,000

Margin of safety in % = (Expected Sales - Break-even sales ) ÷ Expected Sales

= $960,000 ÷ $2,880,000

= 33.3 %

Operating leverage

Operating Leverage = Contribution ÷ Earnings Before Interest and Tax

= $1,728,000 ÷ $576,000

= 3.00

3 0

3 years ago

The population p, in millions, of a certain country can be calculated by p=0.83t54, where t is the time in years, and t = 0 repr

dalvyx [7]

P(t) = (0.83)t^(5/4)
2096 - 2015 = 81 
81 ^ (5/4) = 243 
243 × 0.83 = 201.69 

Population in 2096 expected to be 202 million.

3 0

3 years ago

Company Pea owns 90 percent of Company Essone which in turn owns 80 percent of Company Esstwo. Company Esstwo owns 100 percent o

ankoles [38]

Answer:

Company Pea

Consolidated financial statements should be prepared to report the financial status and results of operations for:

Essone - 90%

Esstwo = 72% (90% x 80%)

Essthree = 72% (90% x 80% x 100%)

Explanation:

Company Pea is described as the holding or parent company of Company Essone. This means that Essone is Company Pea's subsidiary. In preparing consolidated financial statements to report the financial status and results of operations for Company Essone, Company Pea will consolidate 100% of Company Essone while accounting for noncontrolling interest of 10% (effectively 90%).

When Company Essone is consolidating its financial statements, it should consolidate 80% of Company Esstwo while Esstwo consolidates 100% of Company Essthree.

But since Essthree is also a subsidiary of Company Pea, Company Pea will consolidate Esstwo and Essthree's financials to the tune of 72% respectively, while consolidating 90% of Essone's.

8 0

2 years ago

ABC company received a special order for 5000 untis at a sales price of 10 per unit. ABC normally sells these for 12 each. Each

slamgirl [31]

Answer:

The increase in pre-tax income 20,000

Explanation:

The fixed cost of production would remain the same whether or not the special order is taken, hence, irrelevant for the decision at hand.

The sale price for the special order=10

the variable cost per unit=6

contribution margin per unit from special order=10-6=4

The increase in pre-tax income=total contribution margin from special order

The increase in pre-tax income=5000*4

The increase in pre-tax income=20,000

Hence, accepting the order is worthwhile.

4 0

2 years ago

It is the goal of the managers at Trevor's company to rework the production line so that it produces as many automobile parts as

raketka [301]

Answer:

management strategy

Explanation:

By improving the companies management strategy the the manager in trevor's company would be able to gain competitive advantages and also achieve the companies objectives with the required resources.

5 0

3 years ago

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