Bobby's Inc. operates a chain of restaurants across North Carolina. Each restaurant employs ten people; one is a manager paid asalery plus a bonus equal to 2 percent of sales.Other employees three cooks, one dishwasher, and five servers, are paid salaries.Each manager is budgeted $4,000 per month for advertising costs.RequiredClassify each of the following costs incurred by Bobby's Inc. as fixed, variable, or mixed:a Advertising costs relative to the number of customers for a particular restaurant.b. Rental costs relative to the number of restaurantsc. Cooks' salaries at a particular location relative to the number of customers.Cost of supplies (cups, plates, spoons, etc.) relative to the number of customers.Manager's compensation relative to the number of customers.Servers salaries relative to the number of restaurants.

Variable costs are costs that vary with the change in the level of output whereas fixed costs are…

Bobby's Inc. operates a chain of restaurants across North Carolina. Each restaurant employs ten people: one is a mane salery plus a bonus equal to 2 percent of sales. Other employees three cooks, one dishwasher, and five servers, are paid salaries. Each manager is budgeted $4,000 per month for advertising costs. Required Classify each of the following costs incurred by Bobby's Inc. as fixed, variable, or mixed: & Advertising costs relative to the number of customers for a particular restaurant. b Rental costs relative to the number of restaurants Cooks' salaries at a particular location relative to the number of customers. & Cost of supplies (oups, plates, spoons, etc.) relative to the number of customers. Manager's compensation relative to the number of customers. Servers salaries relative to the number of restaurants paid a

Bobby's Inc. operates a chain of restaurants across North Carolina. Each restaurant employs ten people: one is a mane salery plus a bonus equal to 2 percent of sales. Other employees three cooks, one dishwasher, and five servers, are paid salaries. Each manager is budgeted $4,000 per month for advertising costs. Required Classify each of the following costs incurred by Bobby's Inc. as fixed, variable, or mixed: & Advertising costs relative to the number of customers for a particular restaurant. b Rental costs relative to the number of restaurants Cooks' salaries at a particular location relative to the number of customers. & Cost of supplies (oups, plates, spoons, etc.) relative to the number of customers. Manager's compensation relative to the number of customers. Servers salaries relative to the number of restaurants paid a

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Sagar
McNulty, Inc., produces desks and chairs. A new CFO has just been hired and announces a new policy that if a product cannot earn a margin of at least 20 percent, it will be dropped. The margin is computed as product gross profit divided by reported product cost. Manufacturing overhead for year 1 totaled $800,000. Overhead is allocated to products based on direct labor cost. Data for year 1 show the following. Chairs Desks Sales revenue $ 1,150,000 $ 2,105,000 Direct materials 584,000 800,000 Direct labor 160,000 340,000 Required: a-1. Based on the CFO's new policy, calculate the profit margin for both chairs and desks. a-2. Which of the two products should be dropped? b. Regardless of your answer in requirement (a), the CFO decides at the beginning of year 2 to drop the chair product. The company cost analyst estimates that overhead without the chair line will be $650,000. The revenue and costs for desks are expected to be the same as last…
Eaton Manufacturing currently produces 1,000 bicycles per month. The following per unit data apply for sales to regular customers: 8 Direct materials $50 Direct manufacturing labor Variable manufacturing overhead $12 Fixed manufacturing overhead $15 Total manufacturing costs $85 The plant has capacity for 3,000 bicycles and is considering expanding production to 2,000 bicycles. What is the per unit cost of producing 2,000 bicycles?
Sacramento Company has two service departments (A and B) and two producing departments (C and D). Last year, direct costs were A P80,000; B P60,000; C P15,000 and D P20,000. A provides services to B 10%, C 60% and D 30% while B provides services to A 30%, C 20% and D 50%. Using the algebraic method, Dept. A's allocation to Dept. C was * P60,619. P14,021. P21,031. P35,051.
Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two operating departments using different allocation bases. The following information is available for the current period: Office Expenses Total Salaries $ 30,000 20,000 40,000 Depreciation Advertising Department Drilling Grinding Total Multiple Choice Allocation Base Number of employees Cost of goods sold Percentage of total sales Number of employees 1,000 1,500 2,500 $20,000. Sales $ 325,000 475,000 $ 800,000 The amount of depreciation that should be allocated to Drilling for the current period is: Cost of goods sold $ 75,000 125,000 $ 200,000
a. Yountz Company budgets sales of $1,130,000, fixed costs of $68,600, and variable costs of $305,100. What is the contribution margin ratio for Yountz Company? (Enter your answer as a whole number.)fill in the blank 1 % b. If the contribution margin ratio for Vera Company is 38%, sales were $809,000, and fixed costs were $224,420, what was the income from operations?$fill in the blank 2
Patrick’s Water Pets Inc. makes 100-gallon plexiglass aquariums. They reported the following financial information for last year: Direct labor: 4,200 hours @ $20 per hr. Production manager salary: $35,000 Factory rent: $16,800 Equipment maintenance: $7,000 (considered a variable expense) Equipment depreciation: $7,000 Production for the year: 12,000 units Total Revenue: $700,000 Total aquariums sold during the period: 10,000 units Operating Income under absorption costing (after non-production expenses): $142,800 Assume that the fixed costs were the same on a per-unit basis during the prior period.What would Operating Income be under absorption costing? (Round per-unit costs to the nearest cent.) Select one: a. $133,000 b. $153,760 c. None of these options are correct. d. $131,840 e. $152,600
Intricate Computer Solutions provides services to corporate and individual customers. During the month of June, the corporate business segment provided services to 400 customers and earned $60,000 in revenue. The individual business segment provided services to 200 customers and earned $35,000 in revenue. The variable costs for the corporate and individual business segments amounted to $33,000 and $25,300, respectively. Inaddition, the fixed costs of the company amounted to $8,000. Calculate the contribution margin from each corporate customer. (Round your answer to the nearest cent.)
McNulty, Inc., produces desks and chairs. A new CFO has just been hired and announces a new policy that if a product cannot earn a margin of at least 25 percent, it will be dropped. The margin is computed as product gross profit divided by reported product cost. Manufacturing overhead for year 1 totaled $885,000. Overhead is allocated to products based on direct labor cost. Data for year 1 show the following. Chairs Desks Sales revenue $ 1,341,600 $ 2,392,000 Direct materials 593,000 890,000 Direct labor 210,000 380,000 Required: a-1. Based on the CFO's new policy, calculate the profit margin for both chairs and desks. a-2. Which of the two products should be dropped? b. Regardless of your answer in requirement (a), the CFO decides at the beginning of year 2 to drop the chair product. The company cost analyst estimates that overhead without the chair line will be $740,000. The revenue and costs for desks are expected to be the same as last…
Crane Co. estimates that it will incur $805000 of overhead costs each year in its three main departments, machining ($460000), inspections ($230000) and packing ($115000). The machining department works 4000 hours per year, there are 600 inspections per year, and the packing department packs 1000 orders per year. Information about Crane's two products and their estimated use of cost drivers is as follows: Machining hours Inspections Orders packed Direct labor hours Product X 1000 100 350 1700 Product Y 3000 500 650 1800 If traditional costing based on direct labor hours is used, how much overhead will be assigned to Product X?
Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two operating departments using different allocation bases. The following information is available for the current period: Office Expenses Total Allocation Base Salaries $ 30,000 Number of employees Depreciation 20,000 Cost of goods sold Advertising 40,000 Percentage of total sales Department Number of employees Sales Cost of goods sold Drilling 1,000 $ 325,000 $ 75,000 Grinding 1,500 475,000 125,000 Total 2,500 $ 800,000 $ 200,000 The amount of salaries that should be allocated to Grinding for the current period is:
ABC Corporation has three service department with the following costs and activity base: Service Department Cost Activity Base for Allocation Graphics Production $200,000 Number of Copies Accounting 500,000 Number of invoices processed Personnel Department 400,000 Number of employees ABC has three operating divisions (organized as profit centers), mirco, macro, and super. Their revenue, cost and activity information are-as follows: Mirco Macro Super Direct Revenues $700,000 $850,000 $650,000 Direct operating expenses 50,000 70,000 100,000 Number of copies 20,000 30,000 50,000 Number of invoices 700 800 500 processed Number of employees 130 145 125 How much of the $500,000 total cost from the accounting department would be allocated to the super division?