(Solved):Q: Pottery land Inc…

Question

Pottery land Inc. has been manufacturing its own finials for its curtain rods. The company is currently operating at 100% of capacity, and variable manufacturing overhead is charged to production at the rate of 70% of direct labor cost. The direct materials and direct labor cost per unit to make a pair of finials are $4 and $5, respectively. Normal production is 30,000 curtain rods per year.

A supplier offers to make a pair of finials at a price of $12.95 per unit. If Pottery land accepts the supplier’s offer, all variable manufacturing costs will be eliminated, but the $45,000 of fixed manufacturing overhead currently being charged to the finials will have to be absorbed by other products.

(a)

Prepare the incremental analysis for the decision to make or buy the finials. 

   

Make

 

Buy

 

Net Income
Increase (Decrease)

 

Direct materials

 

 

 

 

Direct labor

             

Variable overhead costs

             

Fixed manufacturing costs

             

Purchase price

             

Total annual cost

 

 

 

 


(b)

Should Pottery land buy the finials?


(c)

Would your answer be different in (b) if the productive capacity released by not making the finials could be used to produce income of $20,000?

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(Solved):Q: Required Annuity…

Question

Required Annuity Payments

Assume that your father is now 50 years old, plans to retire in 10 years, and expects to live for 25 years after he retires - that is, until age 85. He wants his first retirement payment to have the same purchasing power at the time he retires as $50,000 has today. He wants all of his subsequent retirement payments to be equal to his first retirement payment. (Do not let the retirement payments grow with inflation: Your father realizes that if inflation occurs the real value of his retirement income will decline year by year after he retires). His retirement income will begin the day he retires, 10 years from today, and he will then receive 24 additional annual payments. Inflation is expected to be 3% per year from today forward. He currently has $150,000 saved and expects to earn a return on his savings of 7% per year with annual compounding. To the nearest dollar, how much must he save during each of the next 10 years (with equal deposits being made at the end of each year, beginning a year from today) to meet his retirement goal? (Note: Neither the amount he saves nor the amount he withdraws upon retirement is a growing annuity.) Do not round intermediate steps.

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(Solved):Q: Bovine Company, …

Question

Bovine Company, a wholesale distributor of umbrellas, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement:
 

  
  Sales $ 2,070,000  
  Variable expenses   895,880  
        
  Contribution margin   1,174,120  
  Fixed expenses   1,319,000  
        
  Operating loss $ (144,880 )
        
 

 
In an effort to isolate the problem, the president has asked for an income statement segmented by geographic market. Accordingly, the Accounting Department has developed the following:
 

  Geographic Market
   
  South Central North
  Sales $ 607,000   $ 806,000   $ 657,000  
  Variable expenses as a percentage of sales   50 %   36 %   46 %
  Traceable fixed expenses $ 320,000   $ 480,000   $ 307,000  
 


Required:
1. Prepare a contribution format income statement segmented by geographic market, as requested by the president.

 

2-a. The company’s sales manager believes that sales in the Central geographic market could be increased by 10% if monthly advertising is increased by $32,000. Calculate the incremental net operating income.

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(Solved):Q: Exercise 18-10 I…

Question
Exercise 18-10
In the month of March, Style Salon services 610 clients at an average price of $ 140 . During the month, fixed costs were $ 21,462 and variable costs were 65 % of sales.
Determine the contribution margin in dollars, per unit, and as a ratio. (Round answers to O decimal places, e.g. 1,225.)
Contribution margirn
Contribution margin per unit
Contribution margin ratio
LINK TO TEXT
VIDEO: APPLIED SKILLS
Using the contribution margin technique, compute the break-even point in dollars and in units. (Round answers to O decimal places, e.g. 1,225.)
Break-even sales
Break-even sales
s
units

Image Transcription

Exercise 18-10 In the month of March, Style Salon services 610 clients at an average price of $ 140 . During the month, fixed costs were $ 21,462 and variable costs were 65 % of sales. Determine the contribution margin in dollars, per unit, and as a ratio. (Round answers to O decimal places, e.g. 1,225.) Contribution margirn Contribution margin per unit Contribution margin ratio LINK TO TEXT VIDEO: APPLIED SKILLS Using the contribution margin technique, compute the break-even point in dollars and in units. (Round answers to O decimal places, e.g. 1,225.) Break-even sales Break-even sales s units

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(Solved):Q: Problem #2  The …

Question

Problem #2

 The following information was taken from the accounts and records of the Helping Hands Foundation, a private, not-for-profit organization classified as a VHWO. All balances are as of June 30, 2018, unless otherwise noted.

 

Unrestricted Support - Contributions                                         $2,000,000

Unrestricted Support - Membership Dues                                     640,000

Unrestricted Revenues - Investment Income                                  80,000

Temporarily restricted gain on sale of investments                         25,000

Expenses - Program Services                                                        1,860,000

Expenses - Supporting Services                                                      350,000

Expenses - Supporting Services                                                      550,000

Temporarily Restricted Support - Contributions                             640,000

Temporarily Restricted Revenues - Investment Income                   60,000

Permanently Restricted Support - Contributions                           100,000

Unrestricted Net Assets, July 1, 2013                                             450,000

Temporarily Restricted Net Assets, July 1, 2017                           2,100,000

Permanently Restricted Net Assets, July 1, 2017                            60,000

 

The unrestricted support from contributions was received in cash during the year. The expenses included $1,350,000 paid from temporarily-restricted cash donations.

 

Required:

Prepare Helping Hands' Statement of Activities for the fiscal year ended June 30, 2018.

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