Sales (45,000 units at $10 per unit).. Less cost of goods sold: $450,000 Direct materials Direct labor. Manufacturing overhead $90,000 78,300 98,500 266,800 Gross margin .... Less operating expenses: Selling expenses: 183,200 Variable: Sales commissions $27,000 Shipping 5,400 32,400 .. Fixed (advertising, salaries) Administrative: 120,000 Variable (billing and other) Fixed (salaries and other) 1,800 48,000 202,200 Net operating loss $ (19,000)

Sales (45,000 units at $10 per unit).. Less cost of goods sold: $450,000 Direct materials Direct labor. Manufacturing overhead $90,000 78,300 98,500 266,800 Gross margin .... Less operating expenses: Selling expenses: 183,200 Variable: Sales commissions $27,000 Shipping 5,400 32,400 .. Fixed (advertising, salaries) Administrative: 120,000 Variable (billing and other) Fixed (salaries and other) 1,800 48,000 202,200 Net operating loss $ (19,000)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Your latest project involves the development of a death ray. Initial estimates predict that the project has a 50% chance of failure, with a potential loss of $1,000,000. However, you could hire an expert for $450,000. This is likely to reduce the chance of failure to 20% and the potential loss to $300,000. Questions: a) What is the dollar value of the net benefit of hiring the expert? Should you hire the expert? (Show all calculations for credit) b) As the skeptical accountant, do you have any concerns with this analysis? Be specific in order to receive credit
4
The owner of a small local flea market rents tables to vendors every Sunday. His only expense is the purchase of the building in which the flea market operates at a cost of $450,000. The owner expects to rent about 20 tables per week (1000 per year), and wishes to receive a 12% annual return on his investment in the building. What gross margin (in dollars) should the owner use?
Nikul
great lakes clinic has been asked to provide exclusive healthcare services for next year's world exposition. although flattered by the request, the clinic's managers want to conduct a financial analysis of the project. there will be an up front cost of $160,000 to get the clinic in operation. then, a net cash inflow of $1 million is expected from operations in each of the two years of the exposition. however, the clinic has to py the organizers of the exposition a fee for the marketing value of the opportunity. this fee, which must be paid at th end of the second year, is $2 million.a. what are the cash flows associated with the project?b. what is the project's IRR?c. assuming a project cost of capital of 10 percent, what is the project's NPV?
Ginny Trueblood is considering an investment which will cost her $120,000. The investment produces no cash flows for the first year. In the second year the cash inflow is $35,000. This inflow will increase to $55,000 and then $75,000 for the following two years before ceasing permanently. Ginny requires a 10 % rate of return and has a required payback period of three years. Should Ginny accept this project? Justify your response. What are the major drawbacks of the Payback method ? What other method would you recommend to use and why?