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?
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- Seal Financial Advisors provides accounting and finance assistance to customers in the retail business. Seal has four professionals on staff and an office with six clerical staff. Total compensation, including benefits, for the professional staff runs about $573,000 per year, and normal billable hours are 8,300 hours per year. The professional staff keep detailed time sheets organized by client number. The total office and administrative costs for the year are $755,000. Seal allocates office and administrative costs to clients monthly, using a predetermined overhead allocation rate based on billable hours. What is the predetermined overhead allocation rate that Seal will use for office and administrative costs? (Round your answer to the nearest cent.) A. $69.04 per hour B. $21.93 per hour C. $160.00 per hour D. $90.96 per hourR&R Savings Bank finds that its basic transaction account, which requires a $1000 minimum balance, costs this savings bank an average of $3.25 per month in servicing costs (including labor and computer time) and $1.25 per month in overhead expenses. The savings bank also tries to build in a $0.50 per month profit margin on these accounts. Further analysis of customer accounts reveals that for each $100 above the $500 minimum in average balance maintained in its transaction accounts, R&R Savings saves about 5 percent in operating expenses with each account. (Note: If the bank saves about 5 percent in operating expenses for each $100 held in balances above the $500 minimum, then a customer maintaining an average monthly balance of $1,000 should save the bank 25 percent in operating costs) For a customer who consistently maintains an average balance of $1,200 per month, how much should the bank charge in order to protect its profit margin? 05.00 4.68 O 0.32 325Cal’s Carpentry is considering outsourcing its accountsreceivable function. Currently, Cal employs two full-time clerksand one part-time clerk to manage accounts receivable. Each fulltime clerk has an annual salary of $36,000 plus fringe benefitscosting 30 percent of their salary. The part-time clerk makes$18,000 per year but has no fringe benefits. Total salary plus fringecost is $111,600. Cal estimates that each account receivable incursa $10 variable cost. The Small Business Accounts ReceivablesGroup (SBARG) specializes in handling accounts receivable forsmall- to medium-size companies. Doris Roberts from SBARGhas offered to do the accounts receivable for Cal’s Carpentry ata fixed cost of $75,000 per year plus $30 per account receivable.Next year, Cal expects to have 2000 accounts receivable.(a) Calculate the cost for Cal’s Carpentry to continue doingaccounts receivable in-house.(b) Calculate the cost for Cal’s Carpentry to use SBARG tohandle the accounts receivable.(c) If the fixed…
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- Ganja Motors is a small car dealership. On average, it sells a car for $54,000, which it purchases from the manufacturer for $46,000. Each month, Ganja Motors pays $96,400 in rent and utilities and $136,000 for salespeople’s salaries. In addition to their salaries, salespeople are paid a commission of $1200 for each car they sell. Ganja Motors also spends $26,000 each month for local advertisements. Its tax rate is 40%. How many cars must Ganja Motors sell each month to break even? Ganja Motors has a target monthly net income of $102,000. What is its target monthly operating income? How many cars must be sold each month to reach the target monthly net income of $102,000?Brenda Sheldon, CPA, pays her new staff accountant, Abby , a salary equivalent to $21 per hour while Brenda receives a salary equivalent to $37 per hour. The firm's predetermined indirect cost allocation rate for the year is $11 per hour. Sheldon bills for the firm's services at 34% over cost. Assume Brenda works 6 hours and Abby works 8 hours preparing a tax return for Mikayla Touchstone. 1. What is the total cost of preparing Touchstone's tax return? 2. How much will Brenda bill Touchstone for the tax work?Lisa Claussen, CPA, pays her new staff accountant, Gina, a salary equivalent to $27 per hour while Lisa receives a salary equivalent to $39 per hour. The firm's predetermined indirect cost allocation rate for the year is $16 per hour. Claussen bills for the firm's services at 25% over cost. Assume Lisa works 1 hours and Gina works 16 hours preparing a tax return for Mikayla Jones. 1. What is the total cost of preparing Jones's tax return? 2. How much will Lisa bill Jones for the tax work? 1. What is the total cost of preparing Jones's tax return? Enter the direct and indirect costs for preparing Jones's tax return. Direct Cost: Lisa's time Direct Cost: Gina's time Total Direct Cost: Indirect Cost: Total cost of preparing tax return hrs. hrs. hrs.
- McCafe Inc.has built a separate car parking area having parking space of 1,000 cars.$1/hour is charged for each car as parking fee whereas, the parking area operates for 2,600 hours/year. Normally, customers use the parking area as an average fortwo hours. McCafe has rented this parking area for $7,500/month from a construction company There arefive employees who look after the parking area who are paid for 50 weeks; $350/week. These employees are allowed two-week holidaysand an additional compensation of $600are paidto each employee duringthese holidays. All five employees work during the months when traffic load is high whereas, four employees handle all the matters when traffic load is lesser. The overall workload is managed byaManager who is paid $25,000/year. Maintenance and other operating costs of parking area include fixed costs of $2,500 per month whereas 7cents/parking-space/hour is included in variable cost.Required:(i) Calculate the annual break-even point in dollars (Car…Planning Specialists Investors is opening an office in Atlanta, Georgia. Fixed monthly expenses are office rent ($2,500), depreciation on office furniture ($260), utilities ($250), special telephone lines ($600), a subscription to an online brokerage service ($640), and the salary of a financial planner ($1,750). Variable expenses include payments to the financial planner (10% of revenue), advertising (5% of revenue), supplies and postage (2% of revenue), and usage fees for the telephone lines and computerized brokerage service (8% of revenue). Read the requirements. Requirement 1. Compute the investment firm's breakeven revenue in dollars. If the average trade leads to $500 in revenue for Planning Specialists, how many trades must it make to breakeven? First identify the formula to calculate the breakeven point in dollars. (Contribution margin per unit ▼ + Requirements 1. Compute the investment firm's breakeven revenue in dollars. If the average trade leads to $500 in revenue for…Schoenen Motors is a small car dealership. On average, it sells a car for $27,000, which it purchases from the manufacturer for $23,000. Each month, Schoenen Motors pays $48,200 in rent and utilities and $68,000 for salespeople's salaries. In addition to their salaries, salespeople are paid a commission of $600 for each car they sell. Schoenen Motors also spends $13,000 each month for local advertisements. Its tax rate is 40%. Read the requirements. Requirement 1. How many cars must Schoenen Motors sell each month to break even? Schoenen Motors must sell cars each month to break even Requirement 2. Schoenen Motors has a target monthly net income of $51,000. What is its targeted monthly operating income? How many cars must be sold each month to reach the target monthly net income of $51,000? The target monthly operating income is They would need to sell cars to reach the target monthly income of $51,000.