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3 years ago

Campus Stop, Inc., is a student co-op. Campus Stop uses a perpetual inventory system.

Business

1 answer:

Zanzabum3 years ago

8 0

Answer:

Campus Stop, Inc.

Partial Income Statement

Sales revenue $323,300

Sales returns ($1,730)

Sales discounts and allowances ($2,270)

Net sales $319,300

Cost of goods sold ($172,870)

Gross profit $146,430

Gross profit margin = $146,430 / $319,300 = 45.86%

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Your supervisor has come to you with the following list of expenditures for the year and is asking you whether they should be ca

ivanzaharov [21]

Answer:

1. Repainted the office building: This should be capitalized.

2. Added a new wing onto the office building: This should be capitalized.

3. Took their fleet of cars in for servicing (changing the oil, etc.).: This should be expensed.

5. Had an engine rebuilt in one of their fleet cars: This should be capitalized.

4. Added newer electronic locks on the doors in the production building: This should be expensed.

Explanation:

1. Repainted the office building: This should be capitalized. This is because repainting is a repair that will restore the physical structure of the office building and significantly improve it. Since it is a capital improvement cost, it should be capitalized and depreciated like other fixed assets.

2. Added a new wing onto the office building: This should be capitalized and depreciated like other fixed assets since it is a capital expenditure that significantly added to the structure of the office building.

3. Took their fleet of cars in for servicing (changing the oil, etc.).: This falls under repair and should be expensed.

4. Added newer electronic locks on the doors in the production building: This should be expensed. Cost of locks and keys are ordinary expenses that do not improve the physical structure of the production building.

5. Had an engine rebuilt in one of their fleet cars: This should be capitalized. It is a tangible improvement to the fleets of cars and this kind of costs fall under capital expenditures.

8 0

3 years ago

Read 2 more answers

Activity based costing _____________

Ilia_Sergeevich [38]

Answer:

1. groups costs into meaningful buckets that are then distributed based on the activity or product they support.

Explanation:

Activity based costing basically categorizes various overheads into different activities, that leads to charge of overheads based on different activities.

In this manner overheads that shall be charged on some standard products based on the activities involved is charged accordingly, and not based on standard overhead allocation rate.

Basically the overheads are divided into various activities and then distributed to each product based on the volume of activity in the manufacturing process of such activity.

7 0

3 years ago

Talks-A-Lot, Inc. sells cell phones to customers and expects that 10% of phones sold will be returned for repair under its warra

Gnom [1K]

Answer:

Product warrant liability to be reported as on 31.12.2021* is $3.124

*The procedures are attached in a microsof excel document.

Explanation:

This amount will be recognized as a liability only if product warranty amount can be rmeasured reliabily and there is probability that there will be an outflow of funds.

Download xlsx

6 0

3 years ago

7. Problems and Applications Q7 Your cousin Vinnie owns a painting company with fixed costs of $200 and the following schedule f

In-s [12.5K]

Answer:

4 houses per month.

Explanation:

Note: See the attached file for the calculation.

Efficient scale of production is can be described as the number of units of production where average total cost (ATC) of production is lowest.

From the attached file, the ATC of $70 is the lowest at 4 houses per month and 4 houses per month is therefore the efficient scale.

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