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Identification of variable, semi-variable, and fixed costs.*Provide total VC/unit, total FC, and Semi-VC here as well.   q 1. Breakeven in units. q 2. Breakeven in Sales q 3. Units including Target profit q 4. Income statement as at Dec.31, 202x

Identification of variable, semi-variable, and fixed costs.*Provide total VC/unit, total FC, and Semi-VC here as well.   q 1. Breakeven in units. q 2. Breakeven in Sales q 3. Units including Target profit q 4. Income statement as at Dec.31, 202x

FINANCIAL ACCOUNTING
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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Identification of variable, semi-variable, and fixed costs.*Provide total VC/unit, total FC, and Semi-VC here as well.

 

q 1. Breakeven in units.

q 2. Breakeven in Sales

q 3. Units including Target profit

q 4. Income statement as at Dec.31, 202x

V&A Carpet cleaning (Finney Franchise)

based on units from Q3 with target profit

/dist/#/book/11981 Homepage - eCone... CASE 2: V & A CARPET CLEANING SERVICES In March 2003, Vincent and Anne-Marie Finney started their carpet-cleaning services business in Toronto. The business was geared primarily at young couples, a market that they felt was growing rapidly. Vincent and Anne-Marie had worked during the previous 10 years as salaried employees for different types of organizations. They were frustrated with the fact that their future was in the hands of employers, so they decided to start V & A Carpet Cleaning Services. After 10 years of tremendous success in the business, the couple decided to launch a franchise. They placed advertisements in different daily newspapers across Canada promoting the franchise business. Bill and Jill Robinson of Ottawa saw the advertisement and called V & A for information about the economics and advantages of managing a carpet-cleaning franchise operation. The Finneys provided the following information: ● . 0 ● ● 6 D Average revenue for cleaning carpets in each household is $120. A 20% sales commission per contract is secured by a sales representative. Other costs include the following: ● A $1,400 monthly salary for office employees. A $500 yearly expense for various insurance policies. • A $125 monthly expense for utilities and telephone. A yearly $10,000 fee for the franchise. A $5.00 franchise fee for each household cleaned. 0 Machine operators receive $30 for cleaning the carpets in each household. Average costs for gas and maintenance for trucks for each household is $5.50. Maintenance charges are $400 per machine for each 100 houses cleaned. Monthly rental charges for office and small warehouse for inventories is $1,200. Annual depreciation for the equipment is $500. Monthly salary paid to Bill and Jill would total $3,500. ●
Transcribed Image Text:/dist/#/book/11981 Homepage - eCone... CASE 2: V & A CARPET CLEANING SERVICES In March 2003, Vincent and Anne-Marie Finney started their carpet-cleaning services business in Toronto. The business was geared primarily at young couples, a market that they felt was growing rapidly. Vincent and Anne-Marie had worked during the previous 10 years as salaried employees for different types of organizations. They were frustrated with the fact that their future was in the hands of employers, so they decided to start V & A Carpet Cleaning Services. After 10 years of tremendous success in the business, the couple decided to launch a franchise. They placed advertisements in different daily newspapers across Canada promoting the franchise business. Bill and Jill Robinson of Ottawa saw the advertisement and called V & A for information about the economics and advantages of managing a carpet-cleaning franchise operation. The Finneys provided the following information: ● . 0 ● ● 6 D Average revenue for cleaning carpets in each household is $120. A 20% sales commission per contract is secured by a sales representative. Other costs include the following: ● A $1,400 monthly salary for office employees. A $500 yearly expense for various insurance policies. • A $125 monthly expense for utilities and telephone. A yearly $10,000 fee for the franchise. A $5.00 franchise fee for each household cleaned. 0 Machine operators receive $30 for cleaning the carpets in each household. Average costs for gas and maintenance for trucks for each household is $5.50. Maintenance charges are $400 per machine for each 100 houses cleaned. Monthly rental charges for office and small warehouse for inventories is $1,200. Annual depreciation for the equipment is $500. Monthly salary paid to Bill and Jill would total $3,500. ●
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