CASE 4-33 ACCOUNTING | 15% Commission | 20% Commission | Own Sales Force @ 7.5% | Sales | $ 16‚000‚000 | 100% | $ 16‚000‚000 | 100% | $ 16‚000‚000 | 100% | Variable Expenses: | | | | | | | Manufacturing | $ 7‚200‚000 | | $ 7‚200‚000 | | $ 7‚200‚000 | | Commissions | $ 2‚400‚000 | | $ 3‚200‚000 | | $ 1‚200‚000 | | Total Variable Expenses | $ 9‚600‚000 | 60% | $ 10‚400‚000 | 65% | $ 8‚400‚000 | 52.5% | Contribution
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References: Warren‚ C.‚ Reeve‚ J.‚ and Duchac‚ J (2007). Accounting. 23rd ed South-Western‚ cengage learning in thousands except share data | January 3‚ 2009 | December 29‚ in thousands except share data | December 29‚ 2007 | December30‚
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fixed cost does not change with volume. 3.2 Theweighted average contribution margin per unit is calculated only when performing CVP analysis for multiple products. There are two ways to calculate it: (1) Calculate the total contribution of all products by subtracting total variable costs from total revenues. Then calculate the weighted average contribution margin per unit by dividing the total contribution margin by the total number of units (the sum of units for all products). (2) Calculate
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materials used in production. At the beginning of the year‚ the following estimates were made as a basis for computing the predetermined overhead rate: manufacturing overhead cost‚$186‚000; direct materials cost‚$155‚000. The following transactions took place during the year (all purchases and services were acquired on account): a. b. c. d. Raw materials purchased‚$96‚000. Raw materials requisitioned for use in production (all direct materials)‚ $88‚000. Utility bills incurred in the factory‚$17‚000
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Harnischfeger Corp I. Introduction In 1984 Harnischfeger Corporation was a leading producer of construction equipment. During the decade of the 1970s the company experienced tremendous growth. Annual sales grew from $150 million in 1970 to $646 million in 1981. However the company began to experience financial trouble in 1979. This was caused by a variety of factors: the company wasted a large amount of resources on an unsuccessful merger‚ the government of Iran defaulted on a $20 million order
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Table of Contents Case 1 Introduction Jill’s business is expanding while the up going GST prevent her from gaining more profits. The idea of replacing the labor with the help of new equipment will bring about an unprofitable break-even point. However Jill still insist on borrowing from bank to invest in the equipment regardless of the CVP analysis result‚ which raised some ethical issues. Analysis Question 1 Defining the stakeholders There are 5 major stakeholders arising
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labor. Overhead cost appears to be driven by factors such as product diversity and complexity as well as by volume‚ for which direct labor has served as a convenient measure. 8-3 Top managers provide leadership that is needed to properly motivate all employees to embrace the need to implement ABC. Top managers also have the authority to link ABC data to the employee evaluation and reward system. Cross-functional employees are also important because they possess intimate knowledge of operations that
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Harnischfeger Corp case study 1. Describe clearly the accounting changes Harnischfeger made in 1984 as stated in Note 2 of its financial statements. Note 2 (pg. 17) states that in 1984 Harnischfeger changed their depreciation method that was being used to expense their plants‚ machinery and equipment from the direct method to the straight-line method for financial reporting purposes. An adjustment of the residual values on certain machinery and equipment was made. Harnischfeger also included
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between accrual-basis accounting and cash-basis accounting? The variation between accrual basis accounting and cash basis accounting‚ is how cash is documented. Cash basis is an accounting basis that is used when expenses and revenue are paid out or received. This is when the transaction will be recorded. In accrual-basis accounting‚ transactions are recorded when they actually happen. Payment does not need to be made for the transaction to be recognized in accrual-basis accounting unlike cash-basis
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1.0 Introduction According to The Environment Agency in the United Kingdom (2006)‚ Environmental Accounting can be defined as: “The collection‚ analysis and assessment of environmental and financial performance data obtained from business management information systems‚ environmental management and financial accounting systems. The taking of corrective management action to reduce environmental impacts and costs plus‚ where appropriate‚ the external reporting of the environmental and financial
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