Sales Beer sales Food sales Other sales Total sales Less cost of sales Gross margin Less marketing and administrative expenses Operating profit of pursuing capital through private investors and financial insti Sales Beer sales (48% of total sales) Food sales (55% of total sales) Other sales (5% of total sales) Total sales Variable Costs Beer (15% of beer sales). Food (35% of food sales) Other (33% of other sales) Wages of employees (25% of sales) Supplies (1% of sales) Utilities (3% of sales) Other: credit card, miscellaneous (2% of sales) Total variable costs Contribution margin Fixed Costs Salaries: manager, chef, brewer Maintenance Advertising Other: cleaning, menus, miscellaneous Insurance and accounting Property taxes Depreciation $ 789,208 1,885,158 98,658 $ 1,973,000 530,738 $1,442,262 1,128,430 $ 313,832 Debt service (interest on debt) Total fixed costs Operating profit $ 789,200 1,885,158 98,650 $ 118,388 379,803 32,555 493,258 19,730 58,898 39,268 $ 135,500 30,200 20,200 48,208 41,000 24,208 95,000 131,000 $ 1,973,000 1,141,868 $ 831,132 517,300 $ 313,832

Sales Beer sales Food sales Other sales Total sales Less cost of sales Gross margin Less marketing and administrative expenses Operating profit of pursuing capital through private investors and financial insti Sales Beer sales (48% of total sales) Food sales (55% of total sales) Other sales (5% of total sales) Total sales Variable Costs Beer (15% of beer sales). Food (35% of food sales) Other (33% of other sales) Wages of employees (25% of sales) Supplies (1% of sales) Utilities (3% of sales) Other: credit card, miscellaneous (2% of sales) Total variable costs Contribution margin Fixed Costs Salaries: manager, chef, brewer Maintenance Advertising Other: cleaning, menus, miscellaneous Insurance and accounting Property taxes Depreciation $ 789,208 1,885,158 98,658 $ 1,973,000 530,738 $1,442,262 1,128,430 $ 313,832 Debt service (interest on debt) Total fixed costs Operating profit $ 789,200 1,885,158 98,650 $ 118,388 379,803 32,555 493,258 19,730 58,898 39,268 $ 135,500 30,200 20,200 48,208 41,000 24,208 95,000 131,000 $ 1,973,000 1,141,868 $ 831,132 517,300 $ 313,832

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

Subject : - Accounting
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Profit Margin, Investment Turnover, and return on investment The condensed income statement for the Consumer Products Division of Fargo Industries Inc. is as follows (assuming no service department charges): Sales $540,000 Cost of goods sold 243,000 Gross profit $297,000 Administrative expenses 135,000 Income from operations $162,000 The manager of the Consumer Products Division is considering ways to increase the return on investment. a. Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment of the Consumer Products Division, assuming that $1,350,000 of assets have been invested in the Consumer Products Division. Round the investment turnover to one decimal place. Profit margin fill in the blank 1 % Investment turnover fill in the blank 2 Rate of return on investment fill in the blank 3 % b. If expenses could be reduced by $27,000 without decreasing sales, what would be the impact on the…
Westfall Watches has two product lines: Luxury watches and Sporty watches. Income statement data for the most recent year follow: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Total $530,000 375,000 155,000 80,000 $75,000 Select one: O A. Increase $282,500 O B. Increase $362,500 O C. Increase $207,500 O D. Decrease $207,500 Luxury $400,000 255,000 145,000 40,000 $105,000 Sporty $130,000 120,000 10,000 40,000 $(30,000) Assuming the Sporty line is discontinued, total fixed costs remain unchanged, and the space formerly used to produce the Sporty line is used to increase the production of Luxury watches by 250%, how will operating income be affected?
Profit Margin, Investment Turnover, and return on investment The condensed income statement for the Consumer Products Division of Fargo Industries Inc. is as follows (assuming no service department charges): Sales $1,476,000 Cost of goods sold 664,200 Gross profit $811,800 Administrative expenses 295,200 Income from operations $516,600 The manager of the Consumer Products Division is considering ways to increase the return on investment. a. Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment of the Consumer Products Division, assuming that $2,460,000 of assets have been invested in the Consumer Products Division. Round the investment turnover to one decimal place. Profit margin fill in the blank 1 % Investment turnover fill in the blank 2 Rate of return on investment fill in the blank 3 % b. If expenses could be reduced by $73,800 without decreasing sales, what would be the impact on the…
Please help me
Need help
Castle Home Industries is looking to invest in either Company A, B, or C. Calculate the ROI and residual income for each company and based on the results, indicate which one is the best choice for Castle Home Industries. Show your calculations for full points. Company A. B. C Sales $3,600,000 $6,000,000 $1,500,000 Net Operating Income 120,000 220,000 90,000 Average Operating Assets 1,000,000 2,000,000 900,000 Minimum required rate of return: 14% 6% 10%
Companies invest in expansion projects with the expectation of increasing the earnings of its business. Consider the case of McFann Co.: McFann Co. is considering an investment that will have the following sales, variable costs, and fixed operating costs: Year 1 Year 2 Year 3 Year 4 Unit sales 4,800 5,100 5,000 5,120 Sales price $22.33 $23.45 $23.85 $24.45 Variable cost per unit $9.45 $10.85 $11.95 $12.00 Fixed operating costs $32,500 $33,450 $34,950 $34,875 This project will require an investment of $15,000 in new equipment. Under the new tax law, the equipment is eligible for 100% bonus deprecation at t = 0, so it will be fully depreciated at the time of purchase. The equipment will have no salvage value at the end of the project’s four-year life. McFann pays a constant tax rate of 25%, and it has a weighted average cost of capital (WACC) of 11%. Determine what the project’s net present value (NPV) would be under the new tax law. Which of the…
Diamond, Inc.'s most recent contribution margin income statement shows the following: Sales @ $10 per unit Less: Variable expenses Contribution margin Less: Fixed expenses Operating income (loss) $160,000 (120,000) $ 40,000 (50,000) $ (10,000) If Diamond, Inc's advertising costs increased by $5,000, by how much would sales have to increase for the company to achieve an operating income of $4,000? a. $56,000 Ob. $42,000 c. $76,000 Od. $18,000
rofit Margin, Investment Turnover, and Return on Investment The condensed income statement for the Consumer Products Division of Tri-State Industries Inc. is as follows (assuming no support department allocations): Sales $230,000,000 Cost of goods sold (126,500,000) Gross profit $103,500,000 Administrative expenses (64,400,000) Operating income $39,100,000 The manager of the Consumer Products Division is considering ways to increase the return on investment. a. Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment of the Consumer Products Division, assuming that $143,750,000 of assets have been invested in the Consumer Products Division. If required, round your answers to one decimal place. Profit margin fill in the blank 1 % Investment turnover fill in the blank 2 Return on investment fill in the blank 3 % b. If expenses could be reduced by $3,450,000 without decreasing sales, what…
Diamond, Inc.'s most recent contribution margin income statement shows the following: Sales @ $10 per unit Less: Variable expenses Contribution margin Less: Fixed expenses Operating income (loss) $160,000 (120,000) $ 40,000 (50,000) $ (10,000) If Diamond, Inc's advertising costs increased by $5,000, by how much would sales have to increase for the company to achieve an operating income of $4,000? a. $56,000 b. $42,000 c. $76,000 Od. $18,000