Cullumber provides environmentally friendly lawn services for homeowners. Its operating costs are as follows.Depreciation (straight-line)AdvertisingInsurance$1,400 per month$300 per month$3,130 per monthWeed and feed materials$14 per lawnDirect laborFuel$12 per lawn$2 per lawnCullumber charges $70 per treatment for the average single-family lawn. For the month ended July 31, 2027, the company had totalsales of $8,400.(a)Prepare a CVP income statement for the month ended July 31, 2027.CULLUMBER$TotalCVP Income Statement$$Per UnitPercent of Sales

Step 1: Computation of the total fixed cost for the month of July:Total fixed for the month =…

Answered: Cullumber provides environmentally…

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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All That Blooms provides environmentally friendly lawn services for homeowners. Its operating costs are as follows. Depreciation $ 1,400 per month Advertising $970 per month Insurance $2,000 per month Weed and feed materials $ 15 per lawn Direct labor $ 12 per lawn Fuel $3 per lawn All That Blooms charges $ 68 per treatment for the average single-family lawn. Determine the company's break-even point in number of lawns serviced per month. lawns Break-even point
Magic Realm, Incorporated, has developed a new fantasy board game. The company sold 38,000 games last year at a selling price of $61 per game. Fixed expenses associated with the game total $665,000 per year, and variable expenses are $41 per game. Production of the game is entrusted to a printing contractor. Variable expenses consist mostly of payments to this contractor. Required: 1-a. Prepare a contribution format income statement for the game last year. 1h Compute the
Carla Vista Company purchases sails and produces sailboats. It currently produces 1,250 sailboats per year, operating at normal capacity, which is about 80% of full capacity. Carla Vista purchases sails at $262 each, but the company is considering using the excess capacity to manufacture the sails instead. The manufacturing cost per sail would be $94 for direct materials, $84 for direct labor, and $90 for overhead. The $90 overhead is based on $77,500 of annual fixed overhead that is allocated using normal capacity. The president of Carla Vista has come to you for advice. "It would cost me $268 to make the sails," she says, "but only $262 to buy them. Should I continue buying them, or have I missed something?" (a) Prepare a per unit analysis of the differential costs. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Direct material Direct labor Variable overhead Purchase price Total unit cost Make Sails Carla Vista should tA…
AC-Delco makes auto batteries available to General Motors dealers through privately owned distributorships. In general, batteries are stored throughout the year, and a 5% cost increase is added each year to cover the inventory carrying charge for the distributorship owner. Assume you own the City Center Delco facility. Make the calculations necessary to show which of the following statements are true and which are false about battery costs.a. The amount of $98 now is equivalent to a cost of $105.60 one year from now.b. A truck battery cost of $200 one year ago is equivalent to $205 now.c. A $38 cost now is equivalent to $39.90 one year from now.d. A $3000 cost now is equivalent to $2887.14 one year ago.e. The carrying charge accumulated in 1 year on an investment of $2000 worth of batteries is $100.
2. Patterson Co. values, advertises and sells residential property on behalf of the customers. The co. has been in business for only a short time and is preparing a cash budget for the first four months of 2016. Expected sales of residential properties are as follows: 2016 Year Month Unit Sold 2015 December 10 January 10 2016 February 15 2016 Page 8 of 10 March 25 2016 April 30 The average price of each property is $180,000 and Patterson Co. charges a fee of 3% of the value of each property sold. Patterson Co. receives 1% in the month of sales and the remaining 2% in the month after sales. The Company has nine employees who are paid on a monthly basis. The average salary per employees is $35,000 per year. If more than 20 properties are sold in a given month, each employee is paid in that month a bonus of $140 for each additional property sold. Variable expenses are incurred at the rate of 0.5% of the value of each property sold and these expenses are paid in the month of sales. Fixed…
Siren Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2020, the company incurred the following costs. Variable Costs per Unit Direct materials $10.50 Direct labor $4.83 Variable manufacturing overhead $8.12 Variable selling and administrative expenses $5.46 Fixed Costs per Year Fixed manufacturing overhead $322,000 Fixed selling and administrative expenses $294,140 Siren Company sells the fishing lures for $35.00. During 2020. the company sold 79.000 lures and produced 92,000 lures. (a) Assuming the company uses variable costing, calculate Siren's manufacturing cost per unit for 2020. (Round answer to 2 decimal places, e.g. 10.50.) Manufacturing cost per unit
Elliott Trophies makes three types of awards for organizations to give employees or team members. The following are its prices and costs: Price per Unit Variable Cost per Unit Units Sold per Year Sport $ 24 $ 16 36,000 Employee 80 60 9,000 Celebrity 656 516 3,000 Fixed costs of $432,000 per year include building and equipment costs, marketing costs, and the costs of administration. Elliott Trophies is subject to a 21 percent tax rate on income. Required: Given this information, how much will Elliott Trophies earn each year after taxes? Assuming the given sales mix is the same at the break-even point, at what sales revenue does Elliott Trophies break even? Assuming the given sales mix, at what sales revenue will the company earn $276,500 per year after taxes? Elliott Trophies is concerned about the future of the Celebrity trophy market, given recent cost-cutting by companies and is considering becoming more specialized in the Sport and Employee market. If Elliott…
Tommy’s Tile Service is planning on purchasing new tile cleaning equipment that will improve their ability to remove tough stains from ceramic tiles. The company’s contribution margin is 25% and its current break-even point is $409,200 in sales revenue. Purchasing the new equipment will increase fixed costs by $9,500. Required: 1. Determine the company’s current fixed costs. 2. Determine the company’s new break-even point in sales. 3. After the purchase of the equipment, how much revenue does the company need to generate a profit of $120,000?
Lakeside Inc. produces a product that currently sells for $60 per unit. Current production costs per unit include direct materials, $16; direct labor, $18; variable overhead, $11; and fixed overhead, $11. Product engineering has determined that certain production changes could refine the product quality and functionality. These new production changes would increase material and labor costs by 20% per unit. Lakeside has received an offer from a nonprofit organization to buy 9,200 units at $46 per unit. Lakeside currently has unused production capacity. Required: a. Calculate the effect on Lakeside's operating income of accepting the order from the nonprofit organization. Increase in operating income
Williams Company bottles and distributes Supe Juice, a soft drink. The beverage is sold for 50 cents per 16-ounce bottle to retailers, who charge customers 75 cents per bottle. For the year 2022, management estimates the following revenues and costs. Sales: $1,800,000 Selling expenses—variable: $70,000 Direct materials: 430,000 Selling expenses—fixed: 65,000 Direct labor: 360,000 Administrative expenses—variable: 20,000 Manufacturing overhead—variable: 380,000 Administrative expenses—fixed: 60,000 Manufacturing overhead—fixed: 280,000 What is the variable cost per bottle? What is the Break even cost in units? What are the sales dollars required to earn net income of $180,000?
Finch Modems has excess production capacity and is considering the possibility of making and selling paging equipment. The following estimates are based on a production and sales volume of 1,600 pagers. Unit-level manufacturing costs are expected to be $26. Sales commissions will be established at $1.60 per unit. The current facility- level costs, including depreciation on manufacturing equipment ($66,000), rent on the manufacturing facility ($56,000), depreciation on the administrative equipment ($13,800), and other fixed administrative expenses ($74,950), will not be affected by the production of the pagers. The chief accountant has decided to allocate the facility-level costs to the existing product (modems) and to the new product (pagers) on the basis of the number of units of product made (i.e., 5,600 modems and 1,600 pagers). Required a. Determine the per-unit cost of making and selling 1,600 pagers. (Do not round intermediate calculations. Round your answer to 3 decimal places.)…

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