Problem 22-3B Departmental income statements P3 Bonanza has two operating departments (Movies and Video Games) and one service department (Office). Its departmental income statements follow. Indirect expenses and service department expenses consist of rent, utilities, and office department expenses. For Year Ended December 31 Sales Cost of goods sold Gross profit Expenses Departmental Income Statements Sales salaries Supplies used Depreciation Equipment Rent Utilities Share of office department expenses Total expenses Income (loss) Movies $600,000 420,000 180,000 49,500 4,000 4,500 41,000 7,380 56,250 162,630 $17,370 Required 1. Prepare a departmental contribution to overhead report (see Exhibit 22.12). 2. Should the video games department be eliminated? Explain. Video Games $200,000 154,000 46,000 21,000 1,000 3,000 9,000 1,620 18,750 54,370 $ (8,370) Combined $800,000 574,000 226,000 70,500 5,000 7,500 50,000 9,000 75,000 217,000 $9,000

Problem 22-3B Departmental income statements P3 Bonanza has two operating departments (Movies and Video Games) and one service department (Office). Its departmental income statements follow. Indirect expenses and service department expenses consist of rent, utilities, and office department expenses. For Year Ended December 31 Sales Cost of goods sold Gross profit Expenses Departmental Income Statements Sales salaries Supplies used Depreciation Equipment Rent Utilities Share of office department expenses Total expenses Income (loss) Movies $600,000 420,000 180,000 49,500 4,000 4,500 41,000 7,380 56,250 162,630 $17,370 Required 1. Prepare a departmental contribution to overhead report (see Exhibit 22.12). 2. Should the video games department be eliminated? Explain. Video Games $200,000 154,000 46,000 21,000 1,000 3,000 9,000 1,620 18,750 54,370 $ (8,370) Combined $800,000 574,000 226,000 70,500 5,000 7,500 50,000 9,000 75,000 217,000 $9,000

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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6 7 8 9 10 11 12 13 01 14 15 16 17 Sales 18 Cost of Goods Sold 19 Gross Profit 20 SG&A Expenses 21 Operating Profit 22 Interest Expense 23 Taxable Income 24 Income Tax 25 Net Income A 26 27 Sales use the sales from sales budget in week 3. Cost of Goods sold use the rate of $41.50125 per unit from the sales budge from week 3. SG&A expenses are from the SG&A budget from week 4 total SGA. 28 29 30 31 Husky Co. Budgeted Income Statement by Quarter For the Year Ended Dec 31, 2021 QI $420,000 -290,509 $129,491 ($108,200) $21,291 SO D $21,291 ($6,387) $14,904 E ($720) Q2 Q3 Q4 $480,000 $720,000 $960,000 -332,010 $110,800 $121,200 $131,600 ($10,020) ($18,030) F Annual $2,580,000 $323,645
Room Revenue Room Profit Rooms Sold Actual $695,000 Average Room Rate $67.50 $500,000 Catering Revenue 10,300 Occupancy Percent 83.1% Budget Last Year $680,000 $240,000 $486,000 $68.00 10,000 Restaurant Revenue $126,000 $125,000 80.1% $250,000 $650,000 $460,000 Gift Shop Revenue $23,000 $22,000 $65.66 Beverage Revenue $48,000 $50,000 $47,000 9,900 79.8% $124.000 $245,000 Total F&B Revenue $414,000 $425,000 $416,000 $21,000 Total Revenues $1,132,000 $1,127,000 $1,087,000
Part 2 – CVP Analysis The condensed income statement of the Happy Valley Inn is as follows" Variable Costs $1,800,000 1,250,000 200,000 $3,250,000 Fixed Costs Department Income $3,300,000 200,000 150,000 S3,650,000 900,000 1,400,000 1,350,000 472,500 Department Revenue S6,000,000 2,500,000 500,000 $9,000,000 Room $900,000 1,050,000 150,000 $2,100,000 Food and Bev Other Total Other Variable Other Fixed Costs Pre-Tax Income Tax Net Income 877,500 1) What is the contribution ratio for the Happy Valley Inn? 2) What is the break-even level of Sales for the Happy Valley Inn? 3) What level of sales are needed to earn $1,000,000 in net income? 4) What level of Room Sales are needed to earn S1,000,000 in net income? 5) What would be the projected net income at $10,000,000 in Sales?
Question 3 Phoenix Partners provides management consulting services to government and corporate clients. Phoenix has two support departments-administrative services (AS) and information systems (IS) and two operating departments- government consulting (GOVT) and corporate consulting (CORP). For the first quarter of 2017, Phoenix's cost records indicate the following: SUPPORT OPERATING AS IS GVT CORP TOTAL Budgeted overhead costs $600,000 $2,400,000 $8,756,000 $12,452,000 $24,208,000 before any inter-department cost allocations Support work supplied by 25% 40% 35% 100% AS (budgeted head count) Support work supplied by 10% IS (budgeted time) computer 30% 60% 100% Required: 1. Allocate the two support departments' costs to the two operating departments using the following methods: a. Direct method b. Step-down method (allocate AS first) c. Step-down method (allocate IS first) 2. Compare and explain differences in the support-department costs allocated to each operating department.
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PROBLEM 2–21 Schedule of Cost of Goods Manufactured; Income Statement; Cost Behavior [LO2, LO3, LO4, LO5, LO6] Selected account balances for the year ended December 31 are provided below for Superior Company: Selling and administrative salaries $110,000 Purchases of raw materials $290,000 Direct labor Advertising expense Manufacturing overhead 8 80,000 $270,000 $ 50,000 Sales commissions Inventory balances at the beginning and end of the year were as follows: Beginning of the Year End of the Year Raw materials $ 40,000 $ 10,000 Work in process. Finished goods ? $35,000 $ 50,000 ? The total manufacturing costs for the year were $683,000; the goods available for sale totaled $740,000; and the cost of goods sold totaled $660,000. Required: 1. Prepare a schedule of cost of goods manufactured and the cost of goods sold section of the company's income statement for the year. 2. Assume that the dollar amounts given above are for the equivalent of 40,000 units produced during the year. Compute…
Question 19
Expenses Advertising 1,200 Employees 7,680 License 1,100 Merchandise 1,500 Utilities 3,800 Liability Insurance (monthly) 88.08 Total Expenses $15,368 Gross Income 29800 15% Income Tax ? Net Profit ? Revenue = $33,610 Identify 15% income tax (show work) Identify Net Profit (show work) Identify at least 6 fix costs and 8 variable costs List the second income statement to show you cut 15% cost either fix or variable or both SHOW WORK and EXPLAIN
Room Revenue Room Profit Rooms Sold Actual $695,000 Average Room Rate $67.50 $500,000 Catering Revenue 10,300 Occupancy Percent 83.1% Budget Last Year $680,000 $240,000 $486,000 $68.00 10,000 Restaurant Revenue $126,000 $125,000 80.1% $250,000 $650,000 $460,000 Gift Shop Revenue $23,000 $22,000 $65.66 Beverage Revenue $48,000 $50,000 $47,000 9,900 79.8% $124.000 $245,000 Total F&B Revenue $414,000 $425,000 $416,000 $21,000 Total Revenues $1,132,000 $1,127,000 $1,087,000
PROBLEM 4 Marquess Corporation has provided the following partial listing of costs incurred during May: Marketing salaries. $39,000 $8,000 Property taxes, factory Administrative travel. $102,000 $73,000 $31,000 $197,000 $145,000 $39,000 $78,000 Sales commissions Indirect labor. Direct materials. Advertising. Depreciation of production equipment....... Direct labor.... Required: a. What is the total amount of product cost listed above? Show your work. b. What is the total amount of period cost listed above? Show your work.