ACC 560 Week 5 Assignment
E8-2 LasikLook is involved in producing and selling high-end golf equipment. The company has recently been involved in developing various types of laser guns to measure yardages on the golf course. One small laser gun, called LittleLasik, appears to have a very large potential market. Because of competition, LasikLook does not believe that it can charge more than $90 for LittleLasik. At this price, LasikLook believes it can sell 100,000 of these laser guns. LittleLasik will cost $8,500,000 to manufacture, and the company wants an ROI of 20%.
Determine the target cost for one LittleLasik.
Click here for the solution: LasikLook is involved in producing and selling high-end golf equipment
Showing posts with label selling. Show all posts
Showing posts with label selling. Show all posts
Sunday, October 4, 2015
Friday, September 25, 2015
Edington Company combines its operating expenses for budget purposes in a selling and administrative expense budget
ACC 560 Week 6 Assignment
E9-9 Edington Company combines its operating expenses for budget purposes in a selling and administrative expense budget. For the first 6 months of 2008, the following data are available.
1. Sales: 20,000 units quarter 1; 22,000 units quarter 2.
2. Variable costs per dollar of sales: Sales commissions 5%, delivery expense 2%, and advertising 3%.
3. Fixed costs per quarter: Sales salaries $10,000, office salaries $6,000, depreciation $4,200, insurance $1,500, utilities $800, and repairs expense $600.
4. Unit selling price: $20.
Instructions
Prepare a selling and administrative expense budget by quarters for the first 6 months of 2008.
Click here for the solution: Edington Company combines its operating expenses for budget purposes in a selling and administrative expense budget
E9-9 Edington Company combines its operating expenses for budget purposes in a selling and administrative expense budget. For the first 6 months of 2008, the following data are available.
1. Sales: 20,000 units quarter 1; 22,000 units quarter 2.
2. Variable costs per dollar of sales: Sales commissions 5%, delivery expense 2%, and advertising 3%.
3. Fixed costs per quarter: Sales salaries $10,000, office salaries $6,000, depreciation $4,200, insurance $1,500, utilities $800, and repairs expense $600.
4. Unit selling price: $20.
Instructions
Prepare a selling and administrative expense budget by quarters for the first 6 months of 2008.
Click here for the solution: Edington Company combines its operating expenses for budget purposes in a selling and administrative expense budget
Thursday, September 10, 2015
Digital Tunes Inc. is in the business of developing, promoting, and selling musical talent on compact disc (CD)
PR 19-5A Digital Tunes Inc. is in the business of developing, promoting, and selling musical talent on compact disc (CD). The company signed a new group, called Smashing Britney, on January 1, 2010. For the first six months of 2010, the company spent $4,000,000 on a media campaign for Smashing Britney and $1,200,000 in legal costs. The CD production began on February 1, 2010.
Digital Tunes uses a job order cost system to accumulate costs associated with a CD title. The unit direct materials cost for the CD is:
Blank CD…………. $1.80
Jewel case………….. 0.60
Song lyric insert…… 0.60
The production process is straightforward. First, the blank CDs are brought to a production area where the digital soundtrack is copied onto the CD. The copying machine requires one hour per 2,400 CDs.
After the CDs are copied, they are brought to an assembly area where an employee packs the CD with a jewel case and song lyric insert. The direct labor cost is $0.25 per unit.
The CDs are sold to record stores. Each record store is given promotional materials, such as posters and aisle displays. Promotional materials cost $40 per record store. In addition, shipping costs average $0.25 per CD.
Total completed production was 1,000,000 units during the year. Other information is as follows:
Number of customers (record stores)………………….. 42,500
Number of CDs sold………………………………….. 850,000
Wholesale price (to record store) per CD…………………. $16
Factory overhead cost is applied to jobs at the rate of $1,200 per copy machine hour. There were an additional 25,000 copied CDs, packages, and inserts waiting to be assembled on December 31, 2010.
Instructions
1. Prepare an annual income statement for the Smashing Britney CD, including supporting calculations, from the information above.
2. Determine the balances in the work in process and finished goods inventory for the Smashing Britney CD on December 31, 2010.
Click here for the solution: Digital Tunes Inc. is in the business of developing, promoting, and selling musical talent on compact disc (CD)
Digital Tunes uses a job order cost system to accumulate costs associated with a CD title. The unit direct materials cost for the CD is:
Blank CD…………. $1.80
Jewel case………….. 0.60
Song lyric insert…… 0.60
The production process is straightforward. First, the blank CDs are brought to a production area where the digital soundtrack is copied onto the CD. The copying machine requires one hour per 2,400 CDs.
After the CDs are copied, they are brought to an assembly area where an employee packs the CD with a jewel case and song lyric insert. The direct labor cost is $0.25 per unit.
The CDs are sold to record stores. Each record store is given promotional materials, such as posters and aisle displays. Promotional materials cost $40 per record store. In addition, shipping costs average $0.25 per CD.
Total completed production was 1,000,000 units during the year. Other information is as follows:
Number of customers (record stores)………………….. 42,500
Number of CDs sold………………………………….. 850,000
Wholesale price (to record store) per CD…………………. $16
Factory overhead cost is applied to jobs at the rate of $1,200 per copy machine hour. There were an additional 25,000 copied CDs, packages, and inserts waiting to be assembled on December 31, 2010.
Instructions
1. Prepare an annual income statement for the Smashing Britney CD, including supporting calculations, from the information above.
2. Determine the balances in the work in process and finished goods inventory for the Smashing Britney CD on December 31, 2010.
Click here for the solution: Digital Tunes Inc. is in the business of developing, promoting, and selling musical talent on compact disc (CD)
Sunday, September 6, 2015
Last year, Douthett Inc. had sales of $2,400,000, based on a unit selling price of $600
PR21-4A Last year, Douthett Inc. had sales of $2,400,000, based on a unit selling price of $600. The variable cost per unit is $440, and fixed costs were $544,000. The maximum sales within Douthett's relevant range are 5,000 units. Douthett is considering a proposal to spend an additional $80,000 on billboard advertising during the current year in an attempt to increase sales and utilize and unused capacity.
INSTRUCTIONS:
1. Construct a cost volume profit chart indicating the break-even sales for last year. Verify your answer, using the break-even equation.
2. Using the cost volume profit chart prepared in part (1) determine (a) the income from operations for last year and (b) the maximum income from operations that could have been realized during the year. Verify your answers arithmetically.
3. Construct a cost volume profit chart indicating the break even sales for the current year, assuming that a noncancelable contract is signed price or other costs. Verify your answer, using the break-even equation.
4. Using the cost volume profit chart prepared in part (3), determine (a)the income from operations if sales total 4,00 units and (b) the maximum income from operations that could be realized during the year. Verify your answers arithmetically.
Click here for the solution: Last year, Douthett Inc. had sales of $2,400,000, based on a unit selling price of $600
INSTRUCTIONS:
1. Construct a cost volume profit chart indicating the break-even sales for last year. Verify your answer, using the break-even equation.
2. Using the cost volume profit chart prepared in part (1) determine (a) the income from operations for last year and (b) the maximum income from operations that could have been realized during the year. Verify your answers arithmetically.
3. Construct a cost volume profit chart indicating the break even sales for the current year, assuming that a noncancelable contract is signed price or other costs. Verify your answer, using the break-even equation.
4. Using the cost volume profit chart prepared in part (3), determine (a)the income from operations if sales total 4,00 units and (b) the maximum income from operations that could be realized during the year. Verify your answers arithmetically.
Click here for the solution: Last year, Douthett Inc. had sales of $2,400,000, based on a unit selling price of $600
Saturday, August 1, 2015
The common stock of Warner Inc. is currently selling at $110 per share
E15-13 (Stock Split and Stock Dividend) The common stock of Warner Inc. is currently selling at $110 per share. The directors wish to reduce the share price and increase share volume prior to a new issue. The per share par value is $10; book value is $70 per share. Five million shares are issued and outstanding.
Instructions
Prepare the necessary journal entries assuming the following.
(a) The board votes a 2-for-1 stock split.
(b) The board votes a 100% stock dividend.
(c) Briefly discuss the accounting and securities market differences between these two methods of increasing the number of shares outstanding.
Click here for the solution: The common stock of Warner Inc. is currently selling at $110 per share
Instructions
Prepare the necessary journal entries assuming the following.
(a) The board votes a 2-for-1 stock split.
(b) The board votes a 100% stock dividend.
(c) Briefly discuss the accounting and securities market differences between these two methods of increasing the number of shares outstanding.
Click here for the solution: The common stock of Warner Inc. is currently selling at $110 per share
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