Casas Modernas of Juarez, Mexico, is contemplating a major change in its cost structure. Currently, all of its drafting work is performed by skilled draftsmen. Rafael Jiminez, Casas' owner, is considering replacing the draftsmen with a computerized drafting system. However, before making the change, Rafael would like to know the consequences of the change, since the volume of business varies significantly from year to year. Shown below are CVP income statements for each alternative. Sales Variable costs Contribution margin Fixed costs Net income Manual System $1,800,000 1,440,000 360,000 120,000 $240,000 Computerized System $1,800,000 720,000 1,080,000 840,000 $240,000
Q: a) Estimated profit and loss account (Profit and loss budget) b) Cash budget c) Estimated balance…
A: Computation of accounts receivables at the end of Year Accounts Receivables at 31.12.201X = Turnover…
Q: n engineer intends to travel abroad to take a postgraduate course at a maternity hospital. He…
A: Value would he need to have today to make his plans viable = $72.688.7
Q: uring 2020, Ma
A: Shareholders also invest money in the company and in return they become the owners in proportion to…
Q: Tetros bros producing oxygen valves and it was leading in market share for its oxygen new gen kit…
A: Bonds was used to raise money for the business for various purposes in which the company will pay…
Q: A business purchased a new car at the start of October for $16,800 cash. The car has a useful life…
A: Introduction: Depreciation: Decreasing value of fixed assets over its useful life period called as…
Q: 1. Calculate the normal tax consequences arising from the above distributions for Sehari (Pty) Ltd’s…
A: The tax slab rate as applicable is as follows: Taxable Income (R) Tax Rate R1 - R216,200 18%…
Q: Equity Investments: Less than 20% ownership On September 12, 3,600 shares of Denver Company’s…
A: Journal entries means the entry in prime book with chronological sequence. Share has been valued at…
Q: On January 1, ABC, DEF and GHI admitted JKL as a new partner. The partners were sharing profits in a…
A: The capital balance of the partners after the admission of partners are adjusted as per the balance…
Q: Study the information provided below and calculate the expected value of closing inventory as at 31…
A: The cost of goods sold includes the total cost of goods that are sold during the period. Cost of…
Q: Bal. 1/1 Bal. 12/31 Bal. 1/1 Direct material Direct labor Manufacturing overhead Bal. 12/31…
A: Raw material inventory :- raw material inventory describe about, how much raw material in inventory,…
Q: If JoBlo Inc., has a retained earnings opening balance of $50,000 at the beginning of the year, and…
A: Introduction: Retained Earnings: Retained Earnings are shareholder funds. Profit is retained with…
Q: A primary advantage of using generalized audit software packages to audit the financial statements…
A: The primary advantage of using a prepacked audit system is determine by the use cases.
Q: Partners ABC, DEF and GHI share profits and losses in the ratio of 2:3:5, respectively. At the end…
A: Liquidation means where the business is shut down , assets are sold out and liabilities are paid…
Q: 1 2 3 5. 6. 7. Lacson invested P100,000 cash in the business Paid P5,000 for office rent for the…
A: Introduction:- Journal entry is the first stage of accounting process. Journal entry used to record…
Q: 4. Find the compound amount and interest on P360,000 for 8 years and 6 months at 10% compounded…
A: Compound Amount = P x (1 + r)^n Interest = Compound Amount - Principal
Q: NTJ Distributors Ltd has has an annual demand for an airport metal detector of 1400 units. The cost…
A: Lets understand the basics. Economic order quantity is a quantity at which carrying cost and…
Q: Required information [The following information applies to the questions displayed below.] Lamonte…
A: The income statement includes all the revenue and expenses. The resulted amount after deducting…
Q: Kegler Bowling buys scorekeeping equipment with an invoice cost of $185,000. The electrical work…
A: The equipment cost includes all those expenses that are incurred to make the equipment ready to use.…
Q: The cost of a manufactured product (product cost) generally consists of which of the following?…
A: Product Cost - Product Cost is the cost incurred by the organization for the product of the entity.…
Q: Sky Company is unable to reconcile the bank balance at January 31. Sky's reconciliation is as…
A: A bank reconciliation statement is prepared by the management to match the company's cash balance…
Q: During her lifetime, Elaine made several property transfers, including the following: a) The…
A: As per the Federal rules any gift given in the year 2022 exceeding $16,000 to a single person will…
Q: Partners ABC, DEF and GHI share profits and losses in the ratio of 2:3:5, respectively. At the end…
A: Partnership is formed by two or more persons who have decided to share profit and loss in their…
Q: In how many months will money become three times itself at 9% compounded semiannually? Solution:
A: Future Value = Present Value x (1 + r)^n Rearranging the formula, we get (1 + r)^n = Future Value /…
Q: On January 15, Ross Furniture, Inc., accepts a $5,000, 180-day, 10 percent note from a customer at…
A: Introduction: Journals: 1 ) Journals are book of prime records. 2 ) All the business transactions…
Q: Macaron Corporation is making a $96,400 investment in equipment with a 5-year life. The company uses…
A: Lets understand the basics. Depreciation is a reduction in value of asset due to wear and tear…
Q: Zachary Company has 600,000 shares of common stock outstanding. Perette Corporation purchases…
A: Introduction: Common stock outstanding: It shows the number of share issued by the company which are…
Q: The Dorilane Company produces a set of wood patio furniture consisting of a table and four customer…
A: Cost is classified into two categories: Fixed: It is the cost that remains same as a whole but…
Q: If Kim buys a car for $30,000 with an estimated life of 5 years, with a residual value of $5,000,…
A: Introduction: Depreciation: Decreasing value of fixed assets over its useful life period called as…
Q: Machinery Purchased for $ 800000 Accumulated depreciation value is $ 600000 Sold for $400000…
A: The depreciation expense is charged on fixed assets as reduced value of the fixed asset with usage…
Q: . Which of the following business units has the highest beta factor?
A: Banks or any other business has one the feature or we can say a disadvantage which is the risk which…
Q: If the company sells 4,900 units, its total contribution margin should be closest to: (Do not round…
A: Contribution margin is that portion of sales, which comes after subtracting total variable cost from…
Q: direct materials mix variance for this problem
A: The benchmark is established in advance, and actual performance is assessed in comparison to it.…
Q: Gibson Boot Co. sells men’s, women’s, and children’s boots. For each type of boot sold, it operates…
A: Calculation of above requirement are as follows
Q: Which of the following statement is correct about the statement of affairs?
A: choice questions kindly resubmit remaining question. Companies whenever went for the liquidation…
Q: What is the journal entry to record a sale of a completed job for $10,000 with terms of n/60. Group…
A: Job Order: The job ad, also known as the requisition, is referred to as the job order. Once a…
Q: On January 1, 2020, Surf Company purchased the debt instruments of Smooth Company with a face value…
A: Unrealized gain/(loss)=Fair market value of investment-Book value of investment
Q: Your company declared $13,800 cash dividends on stock. dividends payable at the beginning of the…
A: The cash flow statement is prepared to record the cash flow from various activities during the…
Q: Record the journal entries for the 2 listed events below. 1. On June 13, 2022, Best Buy issued…
A: Introduction: A journal entry is a record of a business transaction in an accounting system. Journal…
Q: Pulsar Plc is considering of exporting its products to the Swedish market. It expects to earn an…
A: Formula = Economic profit / ( loss) = Revenue Less : opportunity cost Less : explicit cost
Q: Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8…
A: Depreciation Expenses - Depreciation Expenses are the expense incurred on the wear and tear of the…
Q: If money is worth 8% annually, what annual payment is required to raise ₱ 18,811 after 2 years if…
A: Future Value of Annuity Due = (1 + r) x P x [{(1 + r)^n} - 1] / r
Q: a. Production schedule by product. Note: Use a negative sign in your schedule to indicate that an…
A: Budgeting is a process by which a business entity make its financial plans and set targets. Budgets…
Q: Nature of Transaction 1. Cash payment on hydro bill that arrived today 2. Cash sale 3. Bank interest…
A: Introduction: Journals: All the business transactions are to be recorded in Journals. Journals also…
Q: Cash Flow from Operating Activities (Indirect Method) The Arcadia Company owns no plant assets and…
A: Under indirect method of cash flow statement, net income will be adjusted to the non cash expenses…
Q: Martinez Company’s relevant range of production is 7,500 units to 12,500 units. When it produces and…
A: The incremental cost is also known as marginal cost. It is an additional cost incurred due to an…
Q: Zannel plc is considering a new project to produce a revolutionary surveillance device. The initial…
A: NPV (Net Present Value) represents the difference between the present value of future expected cash…
Q: 2.1 Use the information provided below to calculate the number of units of Product Tex that must be…
A: Given that, Estimated Sales volume for ; June = 25 000 units July = 21 000 units August = 30 000…
Q: Arca Company reports the following for its product for its first year of operations. Direct…
A: Given that, Selling price per unit = $390 Units produced = 2,580 units Units sold = 2,180 units…
Q: ABC Corporation is experiencing difficulty in paying its bills and is considering filing for…
A: The net free assets are the amount of realized value of an asset after secured creditor and…
Q: a. The market value of the comps should be available. b. The valuation object should be compared…
A: d. The prices of the comps should be standardized, meaning a price ratio instead of the absolute…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- Asbury Coffee Enterprises (ACE) manufactures two models of coffee grinders: Personal and Commercial. The Personal grinders have a smaller capacity and are less durable than the Commercial grinders. ACE only recently began producing the Commercial model. Since the Introduction of the new product, profits have been steadily declining, although sales have been increasing. The management at ACE belleves that the problem might be in how the accounting system allocates costs to products. The current system at ACE allocates manufacturing overhead to products based on direct labor costs. For the most recent year, which Is representative, manufacturing overhead totaled $2,091,000 based on production of 30,000 Personal grinders and 10,000 Commercial grinders. Direct costs were as follows: Direct materials Direct labor Personal $ 1,448,200 1,034,000 Commercial $ 661,000 708,500 Total $ 2,109,200 1,742,500 Management has determined that overhead costs are caused by three cost drivers. These…Asbury Coffee Enterprises (ACE) manufactures two models of coffee grinders. Personal and Commercial. The Personal grinders have a smaller capacity and are less durable than the Commercial grinders. ACE only recently began producing the Commercial model. Since the introduction of the new product, profits have been steadily declining, although sales have been increasing. The management at ACE believes that the problem might be in how the accounting system allocates costs to products. The current system at ACE allocates manufacturing overhead to products based on direct labor costs. For the most recent year, which is representative, manufacturing overhead totaled $1,929,000 based on production of 30,000 Personal grinders and 10,000 Commercial grinders. Direct costs were as follows: Direct materials Direct labor Cost Driver Number of production runs Quality tests performed Shipping orders processed Total overhead Management has determined that overhead costs are caused by three cost…Asbury Coffee Enterprises (ACE) manufactures two models of coffee grinders: Personal and Commercial. The Personal grinders have a smaller capacity and are less durable than the Commercial grinders. ACE only recently began producing the Commercial model. Since the introduction of the new product, profits have been steadily declining, although sales have been increasing. The management at ACE believes that the problem might be in how the accounting system allocates costs to products. The current system at ACE allocates manufacturing overhead to products based on direct labor costs. For the most recent year, which is representative, manufacturing overhead totaled $2,037,000 based on production of 30,000 Personal grinders and 10,000 Commercial grinders. Direct costs were as follows: Personal Commercial Total Direct materials $ 1,445,000 $ 620,000 $ 2,065,000 Direct labor 1,030,000 667,500 1,697,500 Management has determined that overhead costs are caused by three cost…
- Asbury Coffee Enterprises (ACE) manufactures two models of coffee grinders: Personal and Commercial. The Personal grinders have a smaller capacity and are less durable than the Commercial grinders. ACE only recently began producing the Commercial model. Since the introduction of the new product, profits have been steadily declining, although sales have been increasing. The management at ACE believes that the problem might be in how the accounting system allocates costs to products. The current system at ACE allocates manufacturing overhead to products based on direct labor costs. For the most recent year, which is representative, manufacturing overhead totaled $2,023,500 based on production of 30,000 Personal grinders and 10,000 Commercial grinders. Direct costs were as follows: Personal Commercial Total Direct materials $ 1,444,200 $ 609,750 $ 2,053,950 Direct labor 1,029,000 657,250 1,686,250 Management has determined that overhead costs are caused by three cost…Asbury Coffee Enterprises (ACE) manufactures two models of coffee grinders: Personal and Commercial. The Personal grinders have a smaller capacity and are less durable than the Commercial grinders. ACE only recently began producing the Commercial model. Since the introduction of the new product, profits have been steadily declining, although sales have been increasing. The management at ACE believes that the problem might be in how the accounting system allocates costs to products. The current system at ACE allocates manufacturing overhead to products based on direct labor costs. For the most recent year, which is representative, manufacturing overhead totaled $1,902,000 based on production of 30,000 Personal grinders and 10,000 Commercial grinders. Direct costs were as follows: Direct materials Direct labor Personal $ 1,437,000 1,020,000 Commercial $ 517,500 565,000 Total $ 1,954,500 1,585,000 Management has determined that overhead costs are caused by three cost drivers. These…Maggie Co manufactures two video consoles: handheld and home. The handheld are smaller and less expensive than the home consoles. Since the intro of the home model profits have been steadily declining. Management believes it is because of the inaccurate allocation of costs to the products, particularly since the volume of home console sales have been increasing. Upon investigation, you find that overhead cost is currently assigned to products based on their direct labor costs. Data showed that overhead last year was $1,440,000 based on 28,000 handheld consoles and 10,000 home consoles. Direct materials and direct labor costs were as follows: HANDHELD HOME TOTAL Direct Materials $ 750,000 $ 684,000 $ 1,434,000 Direct Labor 1,160,400 439,600 1,600,000 Management, after a careful study, has determined that overhead are caused by three cost drivers. These cost drivers and their costs for last year are as follows: COST DRIVER ASSIGNED COSTS…
- Howard Cooper, the president of Thornton Computer Services, needs your help. He wonders about the potential effects on the firm's net income if he changes the service rate that the firm charges its customers. The following basic data pertain to fiscal Year 3. Standard rate and variable costs Service rate per hour Labor cost Overhead cost Selling, general, and administrative cost Expected fixed costs Facility maintenance Selling, general, and administrative Required: a. Prepare the pro forma income statement that would appear in the master budget if the firm expects to provide 42,000 hours of services in Year 3. b. A marketing consultant suggests to Mr. Cooper that the service rate may affect the number of service hours that the firm can achieve. According to the consultant's analysis, if Thornton charges customers $79 per hour, the firm can achieve 48,000 hours of services. Prepare a flexible budget using the consultant's assumption. c. The same consultant also suggests that if the…Suppose that you have been given a summer job as an Intern at Issac Alrcams, a company that manufactures sophisticated spy cameras for remote-controlled millitary reconnalssance alrcraft. The company, which is privately owned, has approached a bank for a loan to help finance its growth. The bank requires financlal statements before approving the loan. Requlred: Classify each cost listed below as elther a product cost or a perlod cost for the purpose of preparing financial statements for the bank. Costs Product Cost or Period Cost 1. Depreciation on salespersons' cars. 2. Rent on equipment used in the factory. 3. Lubricants used for machine maintenance. 4. Salaries of personnel who work in the finished goods warehouse. 5. Soap and paper towels used by factory workers at the end of a shift. 6. Factory supervisors' salaries. 7. Heat, water, and power consumed in the factory. 8. Materials used for boxing products for shipment overseas. (Units are not normally boxed.) 9. Advertising costs.…CleanTech manufactures equipment to mitigate the environmental effects of waste. (a) If Product A has fixed expenses of $15,000 per year and each unit of product has a $0.20 variable cost, and Product B has fixed expenses of $5000 per year and a $0.50 variable cost, at what number of units of annual production will A have the same overall cost as B? (b) As a manager at CleanTech what other data would you need to evaluate these two products?
- Howard Cooper, the president of Stuart Computer Services, needs your help. He wonders about the potential effects on the firm's net income if he changes the service rate that the firm charges its customers. The following basic data pertain to fiscal Year 3. Standard rate and variable costs Service rate per hour Labor cost Overhead cost Selling, general, and administrative cost Expected fixed costs Facility maintenance Selling, general, and administrative Required: a. Prepare the pro forma income statement that would appear in the master budget if the firm expects to provide 30,000 hours of services in Year 3. b. A marketing consultant suggests to Mr. Cooper that the service rate may affect the number of service hours that the firm can achieve. According to the consultant's analysis, if Stuart charges customers $80 per hour, the firm can achieve 36,000 hours of services. Prepare a flexible budget using the consultant's assumption. c. The same consultant also suggests that if the firm…Hudson Corporation is considering three options for managing its data warehouse: continuing with its own staff, hiring an outside vendor to do the managing, or using a combination of its own staff and an outside vendor. The cost of the operation depends on future demand. The annual cost of each option (in thousands of dollars) depends on demand as follows: If the demand probabilities are 0.2, 0.5, and 0.3, which decision alternative will minimize the expected cost of the data warehouse? What is the expected annual cost associated with that recommendation? Construct a risk profile for the optimal decision in part (a). What is the probability of the cost exceeding $700,000?Bannister Company, an electronics firm, buys circuit boards and manually inserts various electronic devices into the printed circuit board. Bannister sells its products to original equipment manufacturers. Profits for the last two years have been less than expected. Mandy Confer, owner of Bannister, was convinced that her firm needed to adopt a revenue growth and cost reduction strategy to increase overall profits. After a careful review of her firms condition, Mandy realized that the main obstacle for increasing revenues and reducing costs was the high defect rate of her products (a 6 percent reject rate). She was certain that revenues would grow if the defect rate was reduced dramatically. Costs would also decline as there would be fewer rejects and less rework. By decreasing the defect rate, customer satisfaction would increase, causing, in turn, an increase in market share. Mandy also felt that the following actions were needed to help ensure the success of the revenue growth and cost reduction strategy: a. Improve the soldering capabilities by sending employees to an outside course. b. Redesign the insertion process to eliminate some of the common mistakes. c. Improve the procurement process by selecting suppliers that provide higher-quality circuit boards. Required: 1. State the revenue growth and cost reduction strategy using a series of cause-and-effect relationships expressed as if-then statements. 2. Illustrate the strategy using a strategy map. 3. Explain how the revenue growth strategy can be tested. In your explanation, discuss the role of lead and lag measures, targets, and double-loop feedback.