ParagraphStyles1. Materials-handing labor costs vary with the number of units of furniture shipped to customers.2. Different areas of the warehouse stock furniture for different customers. Materials-handlingequipment in an area and amortization costs on the equipment are identified with individualcustomer accounts. Any equipment not used remains idle. The equipment has a one-year usefullife and zero disposal price.3. Scenario allocates rent to each customer account on the basis of the amount of warehousespace occupied by the products to be shipped to that customer.4. Marketing costs vary with the number of sales visits made to customers.5. Purchase order costs vary with the number of purchase orders received; delivery processingcosts vary with the number of shipments made.6. Scenario allocates fixed general administration costs to customers on the basis of dollar salesmade to each customer.Required:1. What are the relevant costs and relevant revenues when Scenario company considers droppingthe Victor Inc. as a custom because of COVID-19?2. Please calculate the operating income(loss) if Scenario drop Victor Inc. as a custom.3. Should Scenario keep Victor as a customer or just drop it? Why?Question 5: dy)A PSAaBbCcAaBbCcAaBbCcAaBbCcFindAaBbCcNo Spacingab x, x' Aa v Iv A vE E TNormalHeading 1Heading 2Heading 3ReplaFontParagraphStylesEditingQuestion 4:Scenario company supplies furniture to three local retailers, Danny, Penner, and Victor Inc. Thefollowing exhibit presents representative revenues and costs of Scenario by customers for the year2019. Additional information on Scenario's costs for different activities at various levels of the costhierarchy is as follows:DannyPennerVictorTotalSales$540,000$340,000$450,000$1,330,000$970,000Cost of goods sold370,000220,000380,000Materials-handling labour47,00020,00037,000$104,000Materials-handling equipment (Costwritten off as amortization)$24,000$36,000$32,00010,0006,0008,000Rent14,0008,00014,000Marketing support12,0009,00011,000Purchase orders and delivery processing13,000$32,000$48,000$1,246,0007,00012,000Geneadr20,00012,00016,000Total operating costs486,000282,000478,000Operating income$54,000$58,000-$28,000$84,0001. Materials-handing labor costs vary with the number of units of furniture shipped to customers.2. Different areas of the warehouse stock furniture for different customers. Materials-handlingequipment in an area and amortization costs on the equipment are identified with individualcustomer accounts. Any equipment not used remains idle. The equipment has a one-year usefullife and zero disposal price.3.Scenario allocates rent to each customer account on the basis of the amount of warehouseText Predictions: On22°C Partly su.DELL

1. Materials-handing labor costs vary with the number of units of furniture shipped to customers. 2. Different areas of the warehouse stock furniture for different customers. Materials-handling equipment in an area and amortization costs on the equipment are identified with individual customer accounts. Any equipment not used remains idle. The equipment has a one-year useful life and zero disposal price. 3. Scenario allocates rent to each customer account on the basis of the amount of warehouse space occupied by the products to be shipped to that customer. 4. Marketing costs vary with the number of sales visits made to customers. 5. Purchase order costs vary with the number of purchase orders received; delivery processing costs vary with the number of shipments made. 6. Scenario allocates fixed general administration costs to customers on the basis of dollar sales made to each customer.

1. Materials-handing labor costs vary with the number of units of furniture shipped to customers. 2. Different areas of the warehouse stock furniture for different customers. Materials-handling equipment in an area and amortization costs on the equipment are identified with individual customer accounts. Any equipment not used remains idle. The equipment has a one-year useful life and zero disposal price. 3. Scenario allocates rent to each customer account on the basis of the amount of warehouse space occupied by the products to be shipped to that customer. 4. Marketing costs vary with the number of sales visits made to customers. 5. Purchase order costs vary with the number of purchase orders received; delivery processing costs vary with the number of shipments made. 6. Scenario allocates fixed general administration costs to customers on the basis of dollar sales made to each customer.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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