Running Head: THE SCOOTER COMPANY CASE STUDY PART A: How many units of TEES and ROOS would the company have to produce and sell to the above customer in order to maintain the normal operating income after taxes ($275‚000)? Note: Contribution Margin/Unit = Revenue/Unit – Variable Costs/Unit In this case‚ Overhead Costs‚ Direct Materials‚ Direct Labor‚ and Machine Hours are all Variable Costs TEES: ROOS: Revenue/Sales $95.00/unit $100.00/unit Variable Costs: “B” Coefficient (Production/Overhead
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Ch.17 1. The building blocks of financial statement analysis include: Liquidity and Efficiency‚ Solvency‚ Profitability‚ Market Prospects. 2. The ability to meet short-term obligations and to efficiently generate revenues is called: Liquidity and Efficiency 3. The ability to generate future revenues and meet long-term obligations is referred to as: Solvency 4. The ability to provide financial rewards sufficient to attract and retain financing is called: Profitability 5. The ability to generate
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Financial District Branch James McGaran was manager of the most important of the 31 branches in the Los Angeles area. Located in Los Angeles’s financial district‚ James’s branch had a staff of 15 people‚ revenues of $6 million‚ and $4.3 million in profit margin. The customer base was very diverse. Individual customers ranged from people who worked in the financial district with sophisticated retail banking needs to less informed individuals banking for convenience. Business customers were sophisticated buyers
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to be $111‚000. The company’s contribution margin ratio is 65% and its fixed monthly expenses are $64‚000. Required: Estimate the company’s net operating income for January‚ assuming that the fixed monthly expenses do not change. Show your work! | | | Student Answer: | | Construct the Variable Costing Income Statement Year 1 Sales $111‚000 Variable expenses: Variable cost of goods sold Variable selling and administrative expenses - 0 Contribution margin (.65*111000) - 72150 Fixed expenses:
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powerful tool for planning and decision making. Operating Income = Total revenue – Total Expense Contribution margin is the difference between sales and variable expense. It is the amount of sales revenue left over after all the variable expenses are covered that can be used to contribute to fixed expense and operating income. Contribution Margin = Price – Variable cost per unit Contribution Margin Ratio = Break-even point in number of units and in total sales dollars: At breakeven‚ total
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year. How do you expect the costs identified in part 1 to change‚ if at all? 3. Based on your answer to part 2‚ can Polaris use the contribution margin ratio to predict how income will change in response to increases in Polaris’s services revenues? Use the following Research Paper Format: Times New Roman‚ with 12-point font size Double Spaced 1-inch report margins Your Research Paper will be graded based upon the Writing Rubric (PDF) and receive a maximum of 100 points. Variable costs: A variable
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312 Quiz 1-SOLUTIONS 1. A tile manufacturer has supplied the following data: Answer a and b. [pic] a. What is the company’s contribution margin ratio? 1‚128‚000-456‚000-156‚000=516‚000/1‚128‚000= %45.74 b. What is the company’s marfin of safety in %? BE Sales= (320‚000+96‚000)/%45.74= 909‚488$ Margin of Safety= (1‚128‚000-909‚488)/1‚128‚000=%19.37 2. City Corporation produces and sells a single product. Data concerning that product appear
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Sales per period 1‚000 units Selling price $40 per unit Variable manufacturing cost $12 per unit Selling expenses $5‚100 plus 5% of selling price Administrative expenses $3‚000 plus 20% of selling price 3. The margin of safety would be: A) $18‚000. B) $28‚560. C) $24‚000. D) $10‚000. E) None of the above. 4. The salaries of a manufacturing plant’s management are said to arise from: A) unit-level activities. B) batch-level activities.
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Prestige Telephone Company Scott Johnson‚ Nicole Phillips‚ Ashton Shuler‚ & Brandy Watts February 25th‚ 2014 Group Contributions Responded to all texts‚ discussion boards‚ and emails Participated in online chat and conference call Answered question 3 Provided the framework of how the case would be set up Suggested new ideas for later projects on how to discuss our topic Responded to all texts‚ discussion boards‚ and emails Participated in online chat and conference call Answered
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CHAPTER 14 Sample Exam Questions 1. Which of the following is not a primary purpose given in the text for allocating costs? A. To provide information for economic decisions B. To motivate managers and other employees C. To measure income and assets for reporting to external parties D. To foster cost awareness among managers to improve decisions 2. Which of the following is considered more of an objective than a criterion? A. Cause-and-effect B. Benefits received C. Fairness or equity D. Ability to
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