looking for answers for 1 and 2a The company has an extremely effective lean production system, so there are no beginning or ending work in process or finishedgoods inventories.Required:1. What is the company's overall break-even point in dollar sales?2. Of the total fixed expenses of $272,000, $27,040 could be avoided if the Velcro product is dropped, $117,600 if the Metal product isdropped, and $37,600 if the Nylon product is dropped. The remaining fixed expenses of $89,760 consist of common fixed expensessuch as administrative salaries and rent on the factory building that could be avoided only by going out of business entirely.a. What is the break-even point in unit sales for each product?b. If the company sells exactly the break-even quantity of each product, what will be the overall profit of the company? Cheryl Montoya picked up the phone and called her boss, Wes Chan, the vice president of marketing at Piedmont FastenersCorporation: "Wes, I'm not sure how to go about answering the questions that came up at the meeting with the president yesterday.""What's the problem?""The president wanted to know the break-even point for each of the company's products, but I am having trouble figuring them out.""I'm sure you can handle it, Cheryl. And, by the way, I need your analysis on my desk tomorrow morning at 8:00 sharp in time for thefollow-up meeting at 9:00."Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina. Dataconcerning these products appear below:Nylon287,000$1.00$0.80VelcroMetal111,000$2.30$1.00217,000$1.40$0.70Annual sales volumeUnit selling priceVariable expense per unithozo

Break-even units: The point of sales where the situation of no Profit no Loss comes is called the…

Cheryl Montoya picked up the phone and called her boss, Wes Chan, the vice president of marketing at Piedmont Fasteners Corporation: “Wes, I'm not sure how to go about answering the questions that came up at the meeting with the president yesterday." "What's the problem?" “The president wanted to know the break-even point for each of the company's products, but I am having trouble figuring them out." "I'm sure you can handle it, Cheryl. And, by the way, I need your analysis on my desk tomorrow morning at 8:00 sharp in time for the follow-up meeting at 9:00." Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina. Data concerning these products appear below: Nylon 287,000 $1.00 Velcro Metal Annual sales volume Unit selling price Variable expense per unit 111,000 $2.30 $1.00 217,000 $1.40 $0.70 $0.80

Cheryl Montoya picked up the phone and called her boss, Wes Chan, the vice president of marketing at Piedmont Fasteners Corporation: “Wes, I'm not sure how to go about answering the questions that came up at the meeting with the president yesterday." "What's the problem?" “The president wanted to know the break-even point for each of the company's products, but I am having trouble figuring them out." "I'm sure you can handle it, Cheryl. And, by the way, I need your analysis on my desk tomorrow morning at 8:00 sharp in time for the follow-up meeting at 9:00." Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina. Data concerning these products appear below: Nylon 287,000 $1.00 Velcro Metal Annual sales volume Unit selling price Variable expense per unit 111,000 $2.30 $1.00 217,000 $1.40 $0.70 $0.80

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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Cheryl Montoya picked up the phone and called her boss, Wes Chan, the vice president of marketing at Piedmont Fasteners Corporation: "Wes, l'm not sure how to go about answering the questions that came up at the meeting with the president yesterday." "What's the problem?" “The president wanted to know the break-even point for each of the company's products, but I am having trouble figuring them out." “I'm sure you can handle it, Cheryl. And, by the way, I need your analysis on my desk tomorrow morning at 8:00 sharp in time for the follow-up meeting at 9:00." Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina. Data concerning these products appear below: Velcro Metal Nylon Annual sales 100,000 200,000 400,000 volume Unit selling price Variable $1.65 $1.50 $0.85 $1.25 $0.70 $0.25 expense per unit Total fixed expenses are $400,000 per year. All three products are sold in highly competitive markets, so the company is…
Cheryl Montoya picked up the phone and called her boss, Wes Chan, the vice president of marketing atPiedmont Fasteners Corporation: “Wes, I’m not sure how to go about answering the questions that came upat the meeting with the president yesterday.”“What’s the problem?”“The president wanted to know the break-even point for each of the company’s products, but I amhaving trouble figuring them out.”“I’m sure you can handle it, Cheryl. And, by the way, I need your analysis on my desk tomorrowmorning at 8:00 sharp in time for the follow-up meeting at 9:00.”Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facilityin North Carolina. Data concerning these products appear below:Velcro Metal NylonNormal annual sales volume ............ 100,000 200,000 400,000Unit selling price ............................... $1.65 $1.50 $0.85Variable cost per unit ........................ $1.25 $0.70 $0.25Total fixed expenses are $400,000 per year.All three products are…
You were recently hired to work in the controller's office of the Balboa Lumber Company. Your boss, Alfred Eagleton, took you to lunch during your first week and asked a favor. "Things have been a little slow lately, and we need to borrow a little cash to tide us over. Our inventory has been building up and the CFO wants to pledge the inventory as collateral for a short-term loan. But I have a better idea." Mr. Eagleton went on to describe his plan. "On July 1, 2021, the first day of the company's third quarter, we will sell $100,000 of inventory to the Harbaugh Corporation for $160,000. Harbaugh will pay us immediately and then we will agree to repurchase the merchandise in two months for $164,000. The $4,000 is Harbaugh's fee for holding the inventory and for providing financing. I already checked with Harbaugh's controller and he has agreed to the arrangement. Not only will we obtain the financing we need, but the third quarter's before-tax profits will be increased by $56,000, the…
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Matt Holmes recently joined Klax Company as a staff accountant in the controller’s office. Klax Company provides warehousing services for companies in several midwestern cities. The location in Dubuque, Iowa, has not been performing well due to increased competition and the loss of several customers that have recently gone out of business. Matt’s department manager suspects that the plant and equipment may be impaired and wonders whether those assets should be written down. Given the company’s prior success, this issue has never arisen in the past, and Matt has been asked to conduct some research on this issue. Instructions If your school has a subscription to the FASB Codification, log in and prepare responses to the following. Provide Codification references for your responses. a. What is the authoritative guidance for asset impairments? Briefly discuss the scope of the standard (i.e., explain the types of transactions to which the standard applies). b. Give several examples of…
The CEO of the Baker Inc, wants to implement a new accounting system, to improve work flow through the company’s sales, cash receipts, accounts payable, and cash disbursement procedures. The CEO is, however, concerned about the potential disruption that the implementation will have on operations. In an announcement letter to Baker’s employees, the CEO stated that: “I have contracted Flybynight Consulting Group to do the needs analysis, system selection, and design work. The programming and implementation will be performed in-house using existing IT department staff. The development process will be unobtrusive to user departments because Flybynight knows what needs to be done. They will work independently, in the background, and will not disrupt departmental and internal audit work flow with time consuming interviews, surveys, and questionnaires. This promises to be an efficient process that will produce a system that will be appreciated by all users.” Required: Draft a memo from George…
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A new systems development project is being planned for Reindeer Christmas Supplies Company. The invoicing, cash receipts, and accounts payable modules are all going to be updated. The controller, Kris K. Ringle, is a little anxious about this project. The last systems development project that affected his department was not very successful, and the employees in the accounting department did not accept the new system very well at first. He feels that the systems personnel did not interact sufficiently with the users of the systems in the accounting department.Prepare a memo from Ringle to the head of the information systems department, Sandy Klaus. In this memo, provide some suggestions for including the accounting personnel in the systems development project. Give persuasive arguments as to why prototyping would be helpful to the workers in the accounting department.
Jason Kemp was torn between conflicting emotions. On the one hand, things were going so well. He had just completed 6 months as the assistant financial manager in the Electronics Division of Med-Products Inc. The pay was good, he enjoyed his coworkers, and he felt that he was part of a team that was making a difference in American health care. On the other hand, his latest assignment was causing some sleepless nights. Mel Cravens, his boss, had asked him to “refine” the figures on the division’s latest project—a portable imaging device code—named ZM. The original estimates called for investment of $15.6 million and projected annual income of $1.87 million. Med-Products required an ROI of at least 15% for new project approval. So far, ZM’s rate of return was nowhere near that hurdle rate. Mel encouraged him to show increased sales and decreased expenses in order to get the projected income above $2.34 million. Jason asked for a meeting with Mel to voice his concerns. Jason: Mel, I’ve…
Jason Kemp was torn between conflicting emotions. On the one hand, things were going so well. He had just completed 6 months as the assistant financial manager in the Electronics Division of Med-Products Inc. The pay was good, he enjoyed his coworkers, and he felt that he was part of a team that was making a difference in American health care. On the other hand, his latest assignment was causing some sleepless nights. Mel Cravens, his boss, had asked him to “refine” the figures on the division’s latest project—a portable imaging device code—named ZM. The original estimates called for investment of $15.6 million and projected annual income of $1.87 million. Med-Products required an ROI of at least 15% for new project approval. So far, ZM’s rate of return was nowhere near that hurdle rate. Mel encouraged him to show increased sales and decreased expenses in order to get the projected income above $2.34 million. Jason asked for a meeting with Mel to voice his concerns. Jason: Mel, I’ve…