TransPacific Airlines (TPA) budgeted 110 million passenger miles, or 5% of the total market for the year just completed, at a contribution margin of 70 cents per mile. The budgeted average price was 82 cents per passenger mile. The operating data for the year show that TPA flew 95.04 million passenger miles with an average price of 60 cents per passenger mile. The terrorist activity in the early part of the year in several countries in the region decreased the total miles flown by all airlines for the year by 10%. There is no flexible-budget variance for all costs. Required: 1. In an effort to understand the operating results, you are asked to compute the following. (Do not round intermediate calculations. Enter your answers in whole dollars.) Answer is complete but not entirely correct. a. Selling price variance $ (19) Unfavorable b. Sales volume variance $(12,267,200) Unfavorable

TransPacific Airlines (TPA) budgeted 110 million passenger miles, or 5% of the total market for the year just completed, at a contribution margin of 70 cents per mile. The budgeted average price was 82 cents per passenger mile. The operating data for the year show that TPA flew 95.04 million passenger miles with an average price of 60 cents per passenger mile. The terrorist activity in the early part of the year in several countries in the region decreased the total miles flown by all airlines for the year by 10%. There is no flexible-budget variance for all costs. Required: 1. In an effort to understand the operating results, you are asked to compute the following. (Do not round intermediate calculations. Enter your answers in whole dollars.) Answer is complete but not entirely correct. a. Selling price variance $ (19) Unfavorable b. Sales volume variance $(12,267,200) Unfavorable

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 33P: Biotechtron, Inc., has two research laboratories in the Southwest, one in Yuma, Arizona, and the...

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TransPacific Airlines (TPA) budgeted 150 million passenger miles, or 5% of the total market for the year just completed, at a contribution margin of 110 cents per mile. The budgeted average price was 122 cents per passenger mile. The operating data for the year show that TPA flew 129.60 million passenger miles with an average price of 76 cents per passenger mile. The terrorist activity in the early part of the year in several countries in the region decreased the total miles flown by all airlines for the year by 10%. There is no flexible-budget variance for all costs. Required: 1. In an effort to understand the operating results, you are asked to compute the following. (Do not round Intermediate calculations. Enter your answers in whole dollars.) Answer is complete but not entirely correct. a. Selling price variance S 83 Unfavorable 1b. Sales volume variance S 2 Favorable c. Market size variance S 20 Unfavorable d. Market share variance S 80 Unfavorable
TransPacific Airlines (TPA) budgeted 105 million passenger miles, or 5% of the total market for the year just completed, at a contribution margin of 65 cents per mile. The budgeted average price was 77 cents per passenger mile. The operating data for the year show that TPA flew 90.72 million passenger miles with an average price of 58 cents per passenger mile. The terrorist activity in the early part of the year in several countries in the region decreased the total miles flown by all airlines for the year by 10%. There is no flexible-budget variance for all costs. Required: 1. In an effort to understand the operating results, you are asked to compute the following. (Do not round Intermediate calculations. Enter your answers in whole dollars.) a. Selling price variance b. Sales volume variance c. Market size variance d. Market share variance W S F2 43 20 # E F3 D 54 000 000 F4 R 70 F % 5 < Prev T MacBook Air ^ 6 3 of 3 G F6 Y & H Next U ► 11 * 8 - A K 1 0 0 F10 CH L
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Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the following sales: Quarter 1 $4,740,000 Quarter 2 5,860,000 Quarter 3 3,720,000 Quarter 4 8,580,000 In Shalimar’s experience, 10 percent of sales are paid in cash. Of the sales on account, 65 percent are collected in the quarter of sale, 25 percent are collected in the quarter following the sale, and 7 percent are collected in the second quarter after the sale. The remaining 3 percent are never collected. Total sales for the third quarter of the current year are $5,410,000 and for the fourth quarter of the current year are $7,070,000. Required: Question Content Area 1. Calculate cash sales and credit sales expected in the last two quarters of the current year, and in each quarter of next year. Quarter Cash Sales Credit Sales 3, current year $fill in the blank 9d2fe401a04bf88_1 $fill in the blank 9d2fe401a04bf88_2 4, current year fill in the blank…
Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the following sales: Quarter 1 $4,620,000 Quarter 2 5,150,000 Quarter 3 4,890,000 Quarter 4 8,480,000 In Shalimar’s experience, 10 percent of sales are paid in cash. Of the sales on account, 65 percent are collected in the quarter of sale, 25 percent are collected in the quarter following the sale, and 7 percent are collected in the second quarter after the sale. The remaining 3 percent are never collected. Total sales for the third quarter of the current year are $5,040,000 and for the fourth quarter of the current year are $7,680,000. Required: Question Content Area 1. Calculate cash sales and credit sales expected in the last two quarters of the current year, and in each quarter of next year. Quarter Cash Sales Credit Sales 3, current year $fill in the blank 1d3d12fb3fb1016_1 $fill in the blank 1d3d12fb3fb1016_2 4, current year fill in the blank…
What production level next year will be required to meet the targets?
QC Corp has the following budget amounts for the current year: $1,100,000 for prevention costs and $880,000 for appraisal costs. Internal failure equals $100 per failed item and external failure has a total budget of $660,000. The Product Testing department has proposed a new method of testing products. If management decides to implement the new method, $2.20 per unit of appraisal costs will be saved, up to a level of 150,000 tests. No additional savings are expected past the 150,000 level. The new method involves $104,500 in training costs and $71,500 in yearly testing supplies. If the new testing method is implemented what is the revised budget for appraisal costs, assuming 550,000 units are tested during the current year?
Weldon Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow: • Sales are budgeted at $360,000 for November, $380,000 for December, and $350,000 for January.• Collections are expected to be 75% in the month of sale, 20% in the month following the sale, and 5% uncollectible.• The cost of goods sold is 65% of sales.• The company desires an ending merchandise inventory equal to 60% of the cost of goods sold in the following month.• Payment for merchandise is made in the month following the purchase.• Other monthly expenses to be paid in cash are $21,900.• Monthly depreciation is $20,000.• Ignore taxes. Balance Sheet October 31 Assets: Cash $16,000 Accounts receivable (net of allowances for uncollectable accounts $74,000 Merchandise inventory $140,400 Property, plant and equipment (net of $500,000 accumulated depreciation) $1,066,000 Total Assets: $1,296,400…
Weldon Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow: • Sales are budgeted at $360,000 for November, $380,000 for December, and $350,000 for January.• Collections are expected to be 75% in the month of sale, 20% in the month following the sale, and 5% uncollectible.• The cost of goods sold is 65% of sales.• The company desires an ending merchandise inventory equal to 60% of the cost of goods sold in the following month.• Payment for merchandise is made in the month following the purchase.• Other monthly expenses to be paid in cash are $21,900.• Monthly depreciation is $20,000.• Ignore taxes. BALANCE SHEET OCTOBER 31 ASSETS Cash 16,000 Accounts Rec.(allowances for uncollected accts) 74,000 mechandise inventory 140,400 Property, plants & equipment (500,000 accumulated depreciation) 1,066,000 TOTAL ASSETS 1,296,400 Liabilities & stockholders equity Accts payable 240,000…
2. Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the following sales: Quarter 1 $4,780,000 Quarter 2 5,690,000 Quarter 3 630,000 Quarter 4 8,200,000 In Shalimar’s experience, 10 percent of sales are paid in cash. Of the sales on account, 65 percent are collected in the quarter of sale, 25 percent are collected in the quarter following the sale, and 7 percent are collected in the second quarter after the sale. The remaining 3 percent are never collected. Total sales for the third quarter of the current year are $5,080,000 and for the fourth quarter of the current year are $7,220,000. Required: Question Content Area 1. Calculate cash sales and credit sales expected in the last two quarters of the current year, and in each quarter of next year. Quarter Cash Sales Credit Sales 3, current year $fill in the blank b0590a054f99004_1 $fill in the blank b0590a054f99004_2 4, current year fill in the blank…
During the current year, OutlyTech Corp. expected to sell 24,000 telephone switches. Fixed costs for the year were expected to be $12,144,000, the unit sales price was budgeted at $3,200, and unit variable costs were budgeted at $1,440.OutlyTech's margin of safety (MOS) in sales dollars is:
BOBA Company budgeted sales of 400,000 calculators at P40 per unit last year. Variable manufacturing costs were budgeted at P16 per unit, and fixed manufacturing costs at P10 per unit. A special order for 40,000 calculators at P23 each was received by BOBA in March. BOBA has sufficient plant capacity to manufacture the additional quantity without incurring any additional fixed manufacturing costs. Acceptance of the special order would not affect BOBA’s normal sales and no selling expenses would be incurred. What would be the effect (increase/decrease) on net operating income if the special order were incur accepted?