Martinez Consulting Firm had $250,000 in service revenue for the year. The company's office space normally rents for $4,000 per month, but the landlord reduced it to $3,500 in exchange for monthly financial advisory services. A client provided office furniture with a retail price of $8,000 and a fair market value of $6,000 as payment for consulting services. What is Martinez Consulting Firm's gross income for the year?

Martinez Consulting Firm had $250,000 in service revenue for the year. The company's office space normally rents for $4,000 per month, but the landlord reduced it to $3,500 in exchange for monthly financial advisory services. A client provided office furniture with a retail price of $8,000 and a fair market value of $6,000 as payment for consulting services. What is Martinez Consulting Firm's gross income for the year?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter17: Activity Resource Usage Model And Tactical Decision Making

Section: Chapter Questions

Problem 6E: Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of...

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Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of $25,750 and is capable of processing as many as 6,500 purchase orders per year. Each clerk uses a PC and laser printer in processing orders. Time available on each PC system is sufficient to process 6,500 orders per year. The cost of each PC system is $1,100 per year. In addition to the salaries, Elliott spends $27,560 for forms, postage, and other supplies (assuming 26,000 purchase orders are processed). During the year, 25,350 orders were processed. Required: 1. Which of the resources associated with purchasing can be classified as flexible resources? Forms, Postage and Supplies Which of the resources associated with purchasing can be classified as committed resources? PC system and clerks 2. Compute the total activity availability, and break this into activity usage and unused activity. Activity availability: fill in the blank 3 purchase orders Activity usage: fill in the blank…
Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of $25,750 and is capable of processing as many as 6,500 purchase orders per year. Each clerk uses a PC and laser printer in processing orders. Time available on each PC system is sufficient to process 6,500 orders per year. The cost of each PC system is $1,100 per year. In addition to the salaries, Elliott spends $27,560 for forms, postage, and other supplies (assuming 26,000 purchase orders are processed). During the year, 25,350 orders were processed. REQUIRED: 1. Classify the resources associated with purchasing as (1) flexible or (2) committed. 2. Compute the total activity availability, and break this into activity usage and unused activity. 3. Calculate the total cost of resources supplied (activity cost), and break this into the cost of activity used and the cost of unused activity. (a) Suppose that a large special order will cause an additional 500 purchase orders. What purchasing…