Income statement Income statement, also known as Statement of revenue and expense measures company's financial performance over an accounting period (say for a year, a quarter). In this statement, total expenses are deducted from total revenues to arrive at net income or loss for the period. Variable expenses The expenses which are associated with the amount of goods produced or services provided. These vary directly with the production level i.e. company's variable cost increases as the production increases and vice-a-versa. Fixed expenses These expenses do not vary with the level of production. They do not change with the amount of goods or services a company produces. They remain same even if the company does not produce any product or provide any service during an accounting period. Requirement a: Income statement in the contribution margin format

Question

Assume that none of the fixed overhead can be avoided. However, if the robots are purchased from Tienh Inc., Crane can use the released productive resources to generate additional income of $375,000. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Direct materials Direct labor Variable overhead 1A Fixed overhead Opportunity cost Purchase price Totals Make A Buy $ SA Net Income Increase (Decrease) $ Based on the above assumptions, indicate whether the offer should be accepted or rejected? The offer

Answer 1

Question

Chapter 12, Problem 12.19P

To determine

Concept Introduction:

Income statement

Income statement, also known as Statement of revenue and expense measures company's financial performance over an accounting period (say for a year, a quarter). In this statement, total expenses are deducted from total revenues to arrive at net income or loss for the period.

Variable expenses

The expenses which are associated with the amount of goods produced or services provided. These vary directly with the production level i.e. company's variable cost increases as the production increases and vice-a-versa.

Fixed expenses

These expenses do not vary with the level of production. They do not change with the amount of goods or services a company produces. They remain same even if the company does not produce any product or provide any service during an accounting period.

Requirement a:

Income statement in the contribution margin format

To determine

Concept Introduction:

Contribution margin

It is the difference between total revenue and variable expenses. Contribution margin equals the amount that sales exceed variable costs. It measures how efficiently a company can produce products and maintain low levels of variable cost.

Contribution margin per unit= Total contribution margin/ Sales volume

Contribution margin, when expressed in percentage form is known as Contribution margin ratio and can be calculated as follows:

Contribution margin ratio= Contribution margin/ Sales revenue*100

Variable expenses

The expenses which are associated with the amount of goods produced or services provided. These vary directly with the production level i.e. company's variable cost increases as the production increases and vice-a-versa.

Requirement b:

To calculate:

Contribution margin per unit and contribution margin ratio

To determine

Concept Introduction:

Contribution margin

It is the difference between total revenue and variable expenses. Contribution margin equals the amount that sales exceed variable costs. It measures how efficiently a company can produce products and maintain low levels of variable cost.

Contribution= Number of units sold* Contribution margin per unit

Requirement c:

To calculate:

Firm's operating income (or loss) if volume changes to

12,000 units
4,000 units

To determine

Concept Introduction:

Contribution margin

It is the difference between total revenue and variable expenses. Contribution margin equals the amount that sales exceed variable costs. It measures how efficiently a company can produce products and maintain low levels of variable cost.

Contribution margin, when expressed in percentage form is known as Contribution margin ratio and can be calculated as follows:

Contribution margin ratio= Contribution margin/ Sales revenue*100

Requirement d:

To calculate:

Firm's operating income (or loss) if total revenue

Increases $12,000
Decreases $7,000

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Assume that none of the fixed overhead can be avoided. However, if the robots are purchased from Tienh Inc., Crane can use the released productive resources to generate additional income of $375,000. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Direct materials Direct labor Variable overhead 1A Fixed overhead Opportunity cost Purchase price Totals Make A Buy $ SA Net Income Increase (Decrease) $ Based on the above assumptions, indicate whether the offer should be accepted or rejected? The offer

The following is a list of balances relating to Phiri Properties Ltd during 2024. The company maintains a memorandum debtors and creditors ledger in which the individual account of customers and suppliers are maintained. These were as follows: Debit balance in debtors account 01/01/2024 66,300 Credit balance in creditors account 01/01/2024 50,600 Sunday credit balance on debtors ledger Goods purchased on credit 724 257,919 Goods sold on credit Cash received from debtors Cash paid to suppliers Discount received Discount allowed Cash purchases Cash sales Bad Debts written off Interest on overdue account of customers 323,614 299,149 210,522 2,663 2,930 3,627 5,922 3,651 277 Returns outwards 2,926 Return inwards 2,805 Accounts settled by contra between debtors and creditors ledgers 1,106 Credit balances in debtors ledgers 31/12/2024. 815 Debit balances in creditors ledger 31/12/2024.698 Required: Prepare the debtors control account as at 31/12/2024. Prepare the creditors control account…

Soln

Answer 2

Question

Chapter 12, Problem 12.19P

To determine

Concept Introduction:

Income statement

Income statement, also known as Statement of revenue and expense measures company's financial performance over an accounting period (say for a year, a quarter). In this statement, total expenses are deducted from total revenues to arrive at net income or loss for the period.

Variable expenses

The expenses which are associated with the amount of goods produced or services provided. These vary directly with the production level i.e. company's variable cost increases as the production increases and vice-a-versa.

Fixed expenses

These expenses do not vary with the level of production. They do not change with the amount of goods or services a company produces. They remain same even if the company does not produce any product or provide any service during an accounting period.

Requirement a:

Income statement in the contribution margin format

To determine

Concept Introduction:

Contribution margin

It is the difference between total revenue and variable expenses. Contribution margin equals the amount that sales exceed variable costs. It measures how efficiently a company can produce products and maintain low levels of variable cost.

Contribution margin per unit= Total contribution margin/ Sales volume

Contribution margin, when expressed in percentage form is known as Contribution margin ratio and can be calculated as follows:

Contribution margin ratio= Contribution margin/ Sales revenue*100

Variable expenses

The expenses which are associated with the amount of goods produced or services provided. These vary directly with the production level i.e. company's variable cost increases as the production increases and vice-a-versa.

Requirement b:

To calculate:

Contribution margin per unit and contribution margin ratio

To determine

Concept Introduction:

Contribution margin

It is the difference between total revenue and variable expenses. Contribution margin equals the amount that sales exceed variable costs. It measures how efficiently a company can produce products and maintain low levels of variable cost.

Contribution= Number of units sold* Contribution margin per unit

Requirement c:

To calculate:

Firm's operating income (or loss) if volume changes to

12,000 units
4,000 units

To determine

Concept Introduction:

Contribution margin

It is the difference between total revenue and variable expenses. Contribution margin equals the amount that sales exceed variable costs. It measures how efficiently a company can produce products and maintain low levels of variable cost.

Contribution margin, when expressed in percentage form is known as Contribution margin ratio and can be calculated as follows:

Contribution margin ratio= Contribution margin/ Sales revenue*100

Requirement d:

To calculate:

Firm's operating income (or loss) if total revenue

Increases $12,000
Decreases $7,000

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Answer 3

Question

Chapter 12, Problem 12.19P

To determine

Concept Introduction:

Income statement

Income statement, also known as Statement of revenue and expense measures company's financial performance over an accounting period (say for a year, a quarter). In this statement, total expenses are deducted from total revenues to arrive at net income or loss for the period.

Variable expenses

The expenses which are associated with the amount of goods produced or services provided. These vary directly with the production level i.e. company's variable cost increases as the production increases and vice-a-versa.

Fixed expenses

These expenses do not vary with the level of production. They do not change with the amount of goods or services a company produces. They remain same even if the company does not produce any product or provide any service during an accounting period.

Requirement a:

Income statement in the contribution margin format

To determine

Concept Introduction:

Contribution margin

It is the difference between total revenue and variable expenses. Contribution margin equals the amount that sales exceed variable costs. It measures how efficiently a company can produce products and maintain low levels of variable cost.

Contribution margin per unit= Total contribution margin/ Sales volume

Contribution margin, when expressed in percentage form is known as Contribution margin ratio and can be calculated as follows:

Contribution margin ratio= Contribution margin/ Sales revenue*100

Variable expenses

The expenses which are associated with the amount of goods produced or services provided. These vary directly with the production level i.e. company's variable cost increases as the production increases and vice-a-versa.

Requirement b:

To calculate:

Contribution margin per unit and contribution margin ratio

To determine

Concept Introduction:

Contribution margin

It is the difference between total revenue and variable expenses. Contribution margin equals the amount that sales exceed variable costs. It measures how efficiently a company can produce products and maintain low levels of variable cost.

Contribution= Number of units sold* Contribution margin per unit

Requirement c:

To calculate:

Firm's operating income (or loss) if volume changes to

12,000 units
4,000 units

To determine

Concept Introduction:

Contribution margin

It is the difference between total revenue and variable expenses. Contribution margin equals the amount that sales exceed variable costs. It measures how efficiently a company can produce products and maintain low levels of variable cost.

Contribution margin, when expressed in percentage form is known as Contribution margin ratio and can be calculated as follows:

Contribution margin ratio= Contribution margin/ Sales revenue*100

Requirement d:

To calculate:

Firm's operating income (or loss) if total revenue

Increases $12,000
Decreases $7,000

Expert Solution & Answer

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Answer 4

Question

Chapter 12, Problem 12.19P

To determine

Concept Introduction:

Income statement

Income statement, also known as Statement of revenue and expense measures company's financial performance over an accounting period (say for a year, a quarter). In this statement, total expenses are deducted from total revenues to arrive at net income or loss for the period.

Variable expenses

The expenses which are associated with the amount of goods produced or services provided. These vary directly with the production level i.e. company's variable cost increases as the production increases and vice-a-versa.

Fixed expenses

These expenses do not vary with the level of production. They do not change with the amount of goods or services a company produces. They remain same even if the company does not produce any product or provide any service during an accounting period.

Requirement a:

Income statement in the contribution margin format

To determine

Concept Introduction:

Contribution margin

It is the difference between total revenue and variable expenses. Contribution margin equals the amount that sales exceed variable costs. It measures how efficiently a company can produce products and maintain low levels of variable cost.

Contribution margin per unit= Total contribution margin/ Sales volume

Contribution margin, when expressed in percentage form is known as Contribution margin ratio and can be calculated as follows:

Contribution margin ratio= Contribution margin/ Sales revenue*100

Variable expenses

The expenses which are associated with the amount of goods produced or services provided. These vary directly with the production level i.e. company's variable cost increases as the production increases and vice-a-versa.

Requirement b:

To calculate:

Contribution margin per unit and contribution margin ratio

To determine

Concept Introduction:

Contribution margin

It is the difference between total revenue and variable expenses. Contribution margin equals the amount that sales exceed variable costs. It measures how efficiently a company can produce products and maintain low levels of variable cost.

Contribution= Number of units sold* Contribution margin per unit

Requirement c:

To calculate:

Firm's operating income (or loss) if volume changes to

12,000 units
4,000 units

To determine

Concept Introduction:

Contribution margin

It is the difference between total revenue and variable expenses. Contribution margin equals the amount that sales exceed variable costs. It measures how efficiently a company can produce products and maintain low levels of variable cost.

Contribution margin, when expressed in percentage form is known as Contribution margin ratio and can be calculated as follows:

Contribution margin ratio= Contribution margin/ Sales revenue*100

Requirement d:

To calculate:

Firm's operating income (or loss) if total revenue

Increases $12,000
Decreases $7,000

Expert Solution & Answer

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Answer 5

Chapter 12, Problem 12.19P

To determine

Concept Introduction:

Income statement

Income statement, also known as Statement of revenue and expense measures company's financial performance over an accounting period (say for a year, a quarter). In this statement, total expenses are deducted from total revenues to arrive at net income or loss for the period.

Variable expenses

The expenses which are associated with the amount of goods produced or services provided. These vary directly with the production level i.e. company's variable cost increases as the production increases and vice-a-versa.

Fixed expenses

These expenses do not vary with the level of production. They do not change with the amount of goods or services a company produces. They remain same even if the company does not produce any product or provide any service during an accounting period.

Requirement a:

Income statement in the contribution margin format

To determine

Concept Introduction:

Contribution margin

It is the difference between total revenue and variable expenses. Contribution margin equals the amount that sales exceed variable costs. It measures how efficiently a company can produce products and maintain low levels of variable cost.

Contribution margin per unit= Total contribution margin/ Sales volume

Contribution margin, when expressed in percentage form is known as Contribution margin ratio and can be calculated as follows:

Contribution margin ratio= Contribution margin/ Sales revenue*100

Variable expenses

The expenses which are associated with the amount of goods produced or services provided. These vary directly with the production level i.e. company's variable cost increases as the production increases and vice-a-versa.

Requirement b:

To calculate:

Contribution margin per unit and contribution margin ratio

To determine

Concept Introduction:

Contribution margin

It is the difference between total revenue and variable expenses. Contribution margin equals the amount that sales exceed variable costs. It measures how efficiently a company can produce products and maintain low levels of variable cost.

Contribution= Number of units sold* Contribution margin per unit

Requirement c:

To calculate:

Firm's operating income (or loss) if volume changes to

12,000 units
4,000 units

To determine

Concept Introduction:

Contribution margin

It is the difference between total revenue and variable expenses. Contribution margin equals the amount that sales exceed variable costs. It measures how efficiently a company can produce products and maintain low levels of variable cost.

Contribution margin, when expressed in percentage form is known as Contribution margin ratio and can be calculated as follows:

Contribution margin ratio= Contribution margin/ Sales revenue*100

Requirement d:

To calculate:

Firm's operating income (or loss) if total revenue

Increases $12,000
Decreases $7,000

Answer 6

Chapter 12, Problem 12.19P

To determine

Concept Introduction:

Income statement

Income statement, also known as Statement of revenue and expense measures company's financial performance over an accounting period (say for a year, a quarter). In this statement, total expenses are deducted from total revenues to arrive at net income or loss for the period.

Variable expenses

The expenses which are associated with the amount of goods produced or services provided. These vary directly with the production level i.e. company's variable cost increases as the production increases and vice-a-versa.

Fixed expenses

These expenses do not vary with the level of production. They do not change with the amount of goods or services a company produces. They remain same even if the company does not produce any product or provide any service during an accounting period.

Requirement a:

Income statement in the contribution margin format

Answer 7

Chapter 12, Problem 12.19P

To determine

Concept Introduction:

Income statement

Income statement, also known as Statement of revenue and expense measures company's financial performance over an accounting period (say for a year, a quarter). In this statement, total expenses are deducted from total revenues to arrive at net income or loss for the period.

Variable expenses

The expenses which are associated with the amount of goods produced or services provided. These vary directly with the production level i.e. company's variable cost increases as the production increases and vice-a-versa.

Fixed expenses

These expenses do not vary with the level of production. They do not change with the amount of goods or services a company produces. They remain same even if the company does not produce any product or provide any service during an accounting period.

Requirement a:

Income statement in the contribution margin format

Answer 8

To determine

Concept Introduction:

Contribution margin

It is the difference between total revenue and variable expenses. Contribution margin equals the amount that sales exceed variable costs. It measures how efficiently a company can produce products and maintain low levels of variable cost.

Contribution margin per unit= Total contribution margin/ Sales volume

Contribution margin, when expressed in percentage form is known as Contribution margin ratio and can be calculated as follows:

Contribution margin ratio= Contribution margin/ Sales revenue*100

Variable expenses

The expenses which are associated with the amount of goods produced or services provided. These vary directly with the production level i.e. company's variable cost increases as the production increases and vice-a-versa.

Requirement b:

To calculate:

Contribution margin per unit and contribution margin ratio

Answer 9

To determine

Concept Introduction:

Contribution margin

It is the difference between total revenue and variable expenses. Contribution margin equals the amount that sales exceed variable costs. It measures how efficiently a company can produce products and maintain low levels of variable cost.

Contribution margin per unit= Total contribution margin/ Sales volume

Contribution margin, when expressed in percentage form is known as Contribution margin ratio and can be calculated as follows:

Contribution margin ratio= Contribution margin/ Sales revenue*100

Variable expenses

The expenses which are associated with the amount of goods produced or services provided. These vary directly with the production level i.e. company's variable cost increases as the production increases and vice-a-versa.

Requirement b:

To calculate:

Contribution margin per unit and contribution margin ratio

Answer 10

To determine

Concept Introduction:

Contribution margin

It is the difference between total revenue and variable expenses. Contribution margin equals the amount that sales exceed variable costs. It measures how efficiently a company can produce products and maintain low levels of variable cost.

Contribution= Number of units sold* Contribution margin per unit

Requirement c:

To calculate:

Firm's operating income (or loss) if volume changes to

12,000 units
4,000 units

Answer 11

To determine

Concept Introduction:

Contribution margin

It is the difference between total revenue and variable expenses. Contribution margin equals the amount that sales exceed variable costs. It measures how efficiently a company can produce products and maintain low levels of variable cost.

Contribution= Number of units sold* Contribution margin per unit

Requirement c:

To calculate:

Firm's operating income (or loss) if volume changes to

12,000 units
4,000 units

Answer 12

To determine

Concept Introduction:

Contribution margin

It is the difference between total revenue and variable expenses. Contribution margin equals the amount that sales exceed variable costs. It measures how efficiently a company can produce products and maintain low levels of variable cost.

Contribution margin, when expressed in percentage form is known as Contribution margin ratio and can be calculated as follows:

Contribution margin ratio= Contribution margin/ Sales revenue*100

Requirement d:

To calculate:

Firm's operating income (or loss) if total revenue

Increases $12,000
Decreases $7,000

Answer 13

To determine

Concept Introduction:

Contribution margin

It is the difference between total revenue and variable expenses. Contribution margin equals the amount that sales exceed variable costs. It measures how efficiently a company can produce products and maintain low levels of variable cost.

Contribution margin, when expressed in percentage form is known as Contribution margin ratio and can be calculated as follows:

Contribution margin ratio= Contribution margin/ Sales revenue*100

Requirement d:

To calculate:

Firm's operating income (or loss) if total revenue

Increases $12,000
Decreases $7,000

Answer 14

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Ch. 12 - Prob. 12.1ME Ch. 12 - Prob. 12.2ME Ch. 12 - Prob. 12.3ME Ch. 12 - Prob. 12.4ME Ch. 12 - Prob. 12.5ME Ch. 12 - Prob. 12.6ME Ch. 12 - Exercise 12.7 LO 3 Cost classifications For each...Ch. 12 - Exercise 12.8 LO 3 Cost classifications For each...Ch. 12 - Prob. 12.9E Ch. 12 - Prob. 12.10E

Chapter 12 Solutions