1) Introduction: Business Activities and Nature of Costs in Fast Food Business • There are several business activities that take place right from when a customer enters the organization up until when he leaves after successfully placing and receiving an order. • Some of the activities are contributory to costs and profits and some are non-monetary items. However the non-monetary items also have a contribution to the bottom line as they indirectly influence the revenues and profits. • Examples of Value Added activities are: Process of Preparation of Order, Packaging and Delivery of goods etc. • Examples of Non Value Added activities are: Waiting time to process customers’ orders To Determine: Business activities from the time a customer arrives to the time the customer departs.

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Answer 1

Question

Chapter 18, Problem 8BTN

To determine

1)

Introduction:

Business Activities and Nature of Costs in Fast Food Business

• There are several business activities that take place right from when a customer enters the organization up until when he leaves after successfully placing and receiving an order.

• Some of the activities are contributory to costs and profits and some are non-monetary items. However the non-monetary items also have a contribution to the bottom line as they indirectly influence the revenues and profits.

• Examples of Value Added activities are: Process of Preparation of Order, Packaging and Delivery of goods etc.

• Examples of Non Value Added activities are: Waiting time to process customers’ orders

To Determine:

Business activities from the time a customer arrives to the time the customer departs.

To determine

2)

Introduction:

Cost Classification

• The time taken from the start of the sale process, i.e. the receipt of a confirmed sales order, to the completion of the transfer of goods or services, i.e. dispatch of goods consists of several activities and costs. Components of costs are Costs of Value added activities comprising of Variable costs and manufacturing costs and Costs of Value added activities such as fixed costs.

• Variable costs refer to the costs of manufacture that have a direct co-relation with the volume of the goods manufactured, i.e. the costs increase with an increase in the goods produced. Examples are costs of direct material and direct labor.

• Manufacturing costs are costs that are directly incurred in connection with manufacture of goods. Examples are Direct materials and Manufacturing Overhead

• Fixed costs refer to the costs of manufacture that have an inverse co-relation with the volume of the goods manufactured, i.e. the costs decrease with an increase in the goods produced. Examples are costs of factory rent, depreciation on plant and equipment

To Determine:

Costs from Business activities from the time a customer arrives to the time the customer departs.

To determine

3)

Introduction:

Cost Classification

• The time taken from the start of the sale process, i.e. the receipt of a confirmed sales order, to the completion of the transfer of goods or services, i.e. dispatch of goods consists of several activities and costs. Components of costs are Costs of Value added activities comprising of Variable costs and manufacturing costs and Costs of Value added activities such as fixed costs.

• Variable costs refer to the costs of manufacture that have a direct co-relation with the volume of the goods manufactured, i.e. the costs increase with an increase in the goods produced. Examples are costs of direct material and direct labor.

• Manufacturing costs are costs that are directly incurred in connection with manufacture of goods. Examples are Direct materials and Manufacturing Overhead

• Fixed costs refer to the costs of manufacture that have an inverse co-relation with the volume of the goods manufactured, i.e. the costs decrease with an increase in the goods produced. Examples are costs of factory rent, depreciation on plant and equipment

To Determine:

Costs from Business activities from the time a customer arrives to the time the customer departs as Variable or Fixed

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On January 1, 2024, Wright Transport sold four school buses to the Elmira School District. In exchange for the buses, Wright received a note requiring payment of $532,000 by Elmira on December 31, 2026. The effective interest rate is 8%. Note: Use appropriate factor(s) from the tables provided. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: How much sales revenue would Wright recognize on January 1, 2024, for this transaction? Prepare journal entries to record the sale of merchandise on January 1, 2024 (omit any entry that might be required for the cost of the goods sold), the December 31, 2024, interest accrual, the December 31, 2025, interest accrual, and receipt of payment of the note on December 31, 2026.

Johnson Company calculates its allowance for uncollectible accounts as 10% of its ending balance in gross accounts receivable. The allowance for uncollectible accounts had a credit balance of $28,000 at the beginning of 2024. No previously written-off accounts receivable were reinstated during 2024. At 12/31/2024, gross accounts receivable totaled $466,700, and prior to recording the adjusting entry to recognize bad debts expense for 2024, the allowance for uncollectible accounts had a debit balance of 51,300. Required: Assume Johnson made no other adjustment of the allowance for uncollectible accounts during 2024. Determine the amount of accounts receivable written off during 2024. If Johnson instead used the direct write-off method, what would bad debt expense be for 2024?

Johnson Company calculates its allowance for uncollectible accounts as 10% of its ending balance in gross accounts receivable. The allowance for uncollectible accounts had a credit balance of $28,000 at the beginning of 2024. No previously written-off accounts receivable were reinstated during 2024. At 12/31/2024, gross accounts receivable totaled $466,700, and prior to recording the adjusting entry to recognize bad debts expense for 2024, the allowance for uncollectible accounts had a debit balance of 51,300. Required: What was the balance in gross accounts receivable as of 12/31/2023? What journal entry should Johnson record to recognize bad debt expense for 2024? Assume Johnson made no other adjustment of the allowance for uncollectible accounts during 2024. Determine the amount of accounts receivable written off during 2024. If Johnson instead used the direct write-off method, what would bad debt expense be for 2024?

Answer 2

Question

Chapter 18, Problem 8BTN

To determine

1)

Introduction:

Business Activities and Nature of Costs in Fast Food Business

• There are several business activities that take place right from when a customer enters the organization up until when he leaves after successfully placing and receiving an order.

• Some of the activities are contributory to costs and profits and some are non-monetary items. However the non-monetary items also have a contribution to the bottom line as they indirectly influence the revenues and profits.

• Examples of Value Added activities are: Process of Preparation of Order, Packaging and Delivery of goods etc.

• Examples of Non Value Added activities are: Waiting time to process customers’ orders

To Determine:

Business activities from the time a customer arrives to the time the customer departs.

To determine

2)

Introduction:

Cost Classification

• The time taken from the start of the sale process, i.e. the receipt of a confirmed sales order, to the completion of the transfer of goods or services, i.e. dispatch of goods consists of several activities and costs. Components of costs are Costs of Value added activities comprising of Variable costs and manufacturing costs and Costs of Value added activities such as fixed costs.

• Variable costs refer to the costs of manufacture that have a direct co-relation with the volume of the goods manufactured, i.e. the costs increase with an increase in the goods produced. Examples are costs of direct material and direct labor.

• Manufacturing costs are costs that are directly incurred in connection with manufacture of goods. Examples are Direct materials and Manufacturing Overhead

• Fixed costs refer to the costs of manufacture that have an inverse co-relation with the volume of the goods manufactured, i.e. the costs decrease with an increase in the goods produced. Examples are costs of factory rent, depreciation on plant and equipment

To Determine:

Costs from Business activities from the time a customer arrives to the time the customer departs.

To determine

3)

Introduction:

Cost Classification

• The time taken from the start of the sale process, i.e. the receipt of a confirmed sales order, to the completion of the transfer of goods or services, i.e. dispatch of goods consists of several activities and costs. Components of costs are Costs of Value added activities comprising of Variable costs and manufacturing costs and Costs of Value added activities such as fixed costs.

• Variable costs refer to the costs of manufacture that have a direct co-relation with the volume of the goods manufactured, i.e. the costs increase with an increase in the goods produced. Examples are costs of direct material and direct labor.

• Manufacturing costs are costs that are directly incurred in connection with manufacture of goods. Examples are Direct materials and Manufacturing Overhead

• Fixed costs refer to the costs of manufacture that have an inverse co-relation with the volume of the goods manufactured, i.e. the costs decrease with an increase in the goods produced. Examples are costs of factory rent, depreciation on plant and equipment

To Determine:

Costs from Business activities from the time a customer arrives to the time the customer departs as Variable or Fixed

Expert Solution & Answer

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Answer 3

Question

Chapter 18, Problem 8BTN

To determine

1)

Introduction:

Business Activities and Nature of Costs in Fast Food Business

• There are several business activities that take place right from when a customer enters the organization up until when he leaves after successfully placing and receiving an order.

• Some of the activities are contributory to costs and profits and some are non-monetary items. However the non-monetary items also have a contribution to the bottom line as they indirectly influence the revenues and profits.

• Examples of Value Added activities are: Process of Preparation of Order, Packaging and Delivery of goods etc.

• Examples of Non Value Added activities are: Waiting time to process customers’ orders

To Determine:

Business activities from the time a customer arrives to the time the customer departs.

To determine

2)

Introduction:

Cost Classification

• The time taken from the start of the sale process, i.e. the receipt of a confirmed sales order, to the completion of the transfer of goods or services, i.e. dispatch of goods consists of several activities and costs. Components of costs are Costs of Value added activities comprising of Variable costs and manufacturing costs and Costs of Value added activities such as fixed costs.

• Variable costs refer to the costs of manufacture that have a direct co-relation with the volume of the goods manufactured, i.e. the costs increase with an increase in the goods produced. Examples are costs of direct material and direct labor.

• Manufacturing costs are costs that are directly incurred in connection with manufacture of goods. Examples are Direct materials and Manufacturing Overhead

• Fixed costs refer to the costs of manufacture that have an inverse co-relation with the volume of the goods manufactured, i.e. the costs decrease with an increase in the goods produced. Examples are costs of factory rent, depreciation on plant and equipment

To Determine:

Costs from Business activities from the time a customer arrives to the time the customer departs.

To determine

3)

Introduction:

Cost Classification

• The time taken from the start of the sale process, i.e. the receipt of a confirmed sales order, to the completion of the transfer of goods or services, i.e. dispatch of goods consists of several activities and costs. Components of costs are Costs of Value added activities comprising of Variable costs and manufacturing costs and Costs of Value added activities such as fixed costs.

• Variable costs refer to the costs of manufacture that have a direct co-relation with the volume of the goods manufactured, i.e. the costs increase with an increase in the goods produced. Examples are costs of direct material and direct labor.

• Manufacturing costs are costs that are directly incurred in connection with manufacture of goods. Examples are Direct materials and Manufacturing Overhead

• Fixed costs refer to the costs of manufacture that have an inverse co-relation with the volume of the goods manufactured, i.e. the costs decrease with an increase in the goods produced. Examples are costs of factory rent, depreciation on plant and equipment

To Determine:

Costs from Business activities from the time a customer arrives to the time the customer departs as Variable or Fixed

Expert Solution & Answer

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Answer 4

Question

Chapter 18, Problem 8BTN

To determine

1)

Introduction:

Business Activities and Nature of Costs in Fast Food Business

• There are several business activities that take place right from when a customer enters the organization up until when he leaves after successfully placing and receiving an order.

• Some of the activities are contributory to costs and profits and some are non-monetary items. However the non-monetary items also have a contribution to the bottom line as they indirectly influence the revenues and profits.

• Examples of Value Added activities are: Process of Preparation of Order, Packaging and Delivery of goods etc.

• Examples of Non Value Added activities are: Waiting time to process customers’ orders

To Determine:

Business activities from the time a customer arrives to the time the customer departs.

To determine

2)

Introduction:

Cost Classification

• The time taken from the start of the sale process, i.e. the receipt of a confirmed sales order, to the completion of the transfer of goods or services, i.e. dispatch of goods consists of several activities and costs. Components of costs are Costs of Value added activities comprising of Variable costs and manufacturing costs and Costs of Value added activities such as fixed costs.

• Variable costs refer to the costs of manufacture that have a direct co-relation with the volume of the goods manufactured, i.e. the costs increase with an increase in the goods produced. Examples are costs of direct material and direct labor.

• Manufacturing costs are costs that are directly incurred in connection with manufacture of goods. Examples are Direct materials and Manufacturing Overhead

• Fixed costs refer to the costs of manufacture that have an inverse co-relation with the volume of the goods manufactured, i.e. the costs decrease with an increase in the goods produced. Examples are costs of factory rent, depreciation on plant and equipment

To Determine:

Costs from Business activities from the time a customer arrives to the time the customer departs.

To determine

3)

Introduction:

Cost Classification

• The time taken from the start of the sale process, i.e. the receipt of a confirmed sales order, to the completion of the transfer of goods or services, i.e. dispatch of goods consists of several activities and costs. Components of costs are Costs of Value added activities comprising of Variable costs and manufacturing costs and Costs of Value added activities such as fixed costs.

• Variable costs refer to the costs of manufacture that have a direct co-relation with the volume of the goods manufactured, i.e. the costs increase with an increase in the goods produced. Examples are costs of direct material and direct labor.

• Manufacturing costs are costs that are directly incurred in connection with manufacture of goods. Examples are Direct materials and Manufacturing Overhead

• Fixed costs refer to the costs of manufacture that have an inverse co-relation with the volume of the goods manufactured, i.e. the costs decrease with an increase in the goods produced. Examples are costs of factory rent, depreciation on plant and equipment

To Determine:

Costs from Business activities from the time a customer arrives to the time the customer departs as Variable or Fixed

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 5

Chapter 18, Problem 8BTN

To determine

1)

Introduction:

Business Activities and Nature of Costs in Fast Food Business

• There are several business activities that take place right from when a customer enters the organization up until when he leaves after successfully placing and receiving an order.

• Some of the activities are contributory to costs and profits and some are non-monetary items. However the non-monetary items also have a contribution to the bottom line as they indirectly influence the revenues and profits.

• Examples of Value Added activities are: Process of Preparation of Order, Packaging and Delivery of goods etc.

• Examples of Non Value Added activities are: Waiting time to process customers’ orders

To Determine:

Business activities from the time a customer arrives to the time the customer departs.

To determine

2)

Introduction:

Cost Classification

• The time taken from the start of the sale process, i.e. the receipt of a confirmed sales order, to the completion of the transfer of goods or services, i.e. dispatch of goods consists of several activities and costs. Components of costs are Costs of Value added activities comprising of Variable costs and manufacturing costs and Costs of Value added activities such as fixed costs.

• Variable costs refer to the costs of manufacture that have a direct co-relation with the volume of the goods manufactured, i.e. the costs increase with an increase in the goods produced. Examples are costs of direct material and direct labor.

• Manufacturing costs are costs that are directly incurred in connection with manufacture of goods. Examples are Direct materials and Manufacturing Overhead

• Fixed costs refer to the costs of manufacture that have an inverse co-relation with the volume of the goods manufactured, i.e. the costs decrease with an increase in the goods produced. Examples are costs of factory rent, depreciation on plant and equipment

To Determine:

Costs from Business activities from the time a customer arrives to the time the customer departs.

To determine

3)

Introduction:

Cost Classification

• The time taken from the start of the sale process, i.e. the receipt of a confirmed sales order, to the completion of the transfer of goods or services, i.e. dispatch of goods consists of several activities and costs. Components of costs are Costs of Value added activities comprising of Variable costs and manufacturing costs and Costs of Value added activities such as fixed costs.

• Variable costs refer to the costs of manufacture that have a direct co-relation with the volume of the goods manufactured, i.e. the costs increase with an increase in the goods produced. Examples are costs of direct material and direct labor.

• Manufacturing costs are costs that are directly incurred in connection with manufacture of goods. Examples are Direct materials and Manufacturing Overhead

• Fixed costs refer to the costs of manufacture that have an inverse co-relation with the volume of the goods manufactured, i.e. the costs decrease with an increase in the goods produced. Examples are costs of factory rent, depreciation on plant and equipment

To Determine:

Costs from Business activities from the time a customer arrives to the time the customer departs as Variable or Fixed

Answer 6

Chapter 18, Problem 8BTN

To determine

1)

Introduction:

Business Activities and Nature of Costs in Fast Food Business

• There are several business activities that take place right from when a customer enters the organization up until when he leaves after successfully placing and receiving an order.

• Some of the activities are contributory to costs and profits and some are non-monetary items. However the non-monetary items also have a contribution to the bottom line as they indirectly influence the revenues and profits.

• Examples of Value Added activities are: Process of Preparation of Order, Packaging and Delivery of goods etc.

• Examples of Non Value Added activities are: Waiting time to process customers’ orders

To Determine:

Business activities from the time a customer arrives to the time the customer departs.

Answer 7

Chapter 18, Problem 8BTN

To determine

1)

Introduction:

Business Activities and Nature of Costs in Fast Food Business

• There are several business activities that take place right from when a customer enters the organization up until when he leaves after successfully placing and receiving an order.

• Some of the activities are contributory to costs and profits and some are non-monetary items. However the non-monetary items also have a contribution to the bottom line as they indirectly influence the revenues and profits.

• Examples of Value Added activities are: Process of Preparation of Order, Packaging and Delivery of goods etc.

• Examples of Non Value Added activities are: Waiting time to process customers’ orders

To Determine:

Business activities from the time a customer arrives to the time the customer departs.

Answer 8

To determine

2)

Introduction:

Cost Classification

• The time taken from the start of the sale process, i.e. the receipt of a confirmed sales order, to the completion of the transfer of goods or services, i.e. dispatch of goods consists of several activities and costs. Components of costs are Costs of Value added activities comprising of Variable costs and manufacturing costs and Costs of Value added activities such as fixed costs.

• Variable costs refer to the costs of manufacture that have a direct co-relation with the volume of the goods manufactured, i.e. the costs increase with an increase in the goods produced. Examples are costs of direct material and direct labor.

• Manufacturing costs are costs that are directly incurred in connection with manufacture of goods. Examples are Direct materials and Manufacturing Overhead

• Fixed costs refer to the costs of manufacture that have an inverse co-relation with the volume of the goods manufactured, i.e. the costs decrease with an increase in the goods produced. Examples are costs of factory rent, depreciation on plant and equipment

To Determine:

Costs from Business activities from the time a customer arrives to the time the customer departs.

Answer 9

To determine

2)

Introduction:

Cost Classification

• The time taken from the start of the sale process, i.e. the receipt of a confirmed sales order, to the completion of the transfer of goods or services, i.e. dispatch of goods consists of several activities and costs. Components of costs are Costs of Value added activities comprising of Variable costs and manufacturing costs and Costs of Value added activities such as fixed costs.

• Variable costs refer to the costs of manufacture that have a direct co-relation with the volume of the goods manufactured, i.e. the costs increase with an increase in the goods produced. Examples are costs of direct material and direct labor.

• Manufacturing costs are costs that are directly incurred in connection with manufacture of goods. Examples are Direct materials and Manufacturing Overhead

• Fixed costs refer to the costs of manufacture that have an inverse co-relation with the volume of the goods manufactured, i.e. the costs decrease with an increase in the goods produced. Examples are costs of factory rent, depreciation on plant and equipment

To Determine:

Costs from Business activities from the time a customer arrives to the time the customer departs.

Answer 10

To determine

3)

Introduction:

Cost Classification

• The time taken from the start of the sale process, i.e. the receipt of a confirmed sales order, to the completion of the transfer of goods or services, i.e. dispatch of goods consists of several activities and costs. Components of costs are Costs of Value added activities comprising of Variable costs and manufacturing costs and Costs of Value added activities such as fixed costs.

• Variable costs refer to the costs of manufacture that have a direct co-relation with the volume of the goods manufactured, i.e. the costs increase with an increase in the goods produced. Examples are costs of direct material and direct labor.

• Manufacturing costs are costs that are directly incurred in connection with manufacture of goods. Examples are Direct materials and Manufacturing Overhead

• Fixed costs refer to the costs of manufacture that have an inverse co-relation with the volume of the goods manufactured, i.e. the costs decrease with an increase in the goods produced. Examples are costs of factory rent, depreciation on plant and equipment

To Determine:

Costs from Business activities from the time a customer arrives to the time the customer departs as Variable or Fixed

Answer 11

To determine

3)

Introduction:

Cost Classification

• The time taken from the start of the sale process, i.e. the receipt of a confirmed sales order, to the completion of the transfer of goods or services, i.e. dispatch of goods consists of several activities and costs. Components of costs are Costs of Value added activities comprising of Variable costs and manufacturing costs and Costs of Value added activities such as fixed costs.

• Variable costs refer to the costs of manufacture that have a direct co-relation with the volume of the goods manufactured, i.e. the costs increase with an increase in the goods produced. Examples are costs of direct material and direct labor.

• Manufacturing costs are costs that are directly incurred in connection with manufacture of goods. Examples are Direct materials and Manufacturing Overhead

• Fixed costs refer to the costs of manufacture that have an inverse co-relation with the volume of the goods manufactured, i.e. the costs decrease with an increase in the goods produced. Examples are costs of factory rent, depreciation on plant and equipment

To Determine:

Costs from Business activities from the time a customer arrives to the time the customer departs as Variable or Fixed

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 18 - Prob. 1DQ Ch. 18 - Prob. 2DQ Ch. 18 - Prob. 3DQ Ch. 18 - Prob. 4DQ Ch. 18 - Prob. 5DQ Ch. 18 - Prob. 6DQ Ch. 18 - Prob. 7DQ Ch. 18 - Prob. 8DQ Ch. 18 - Prob. 9DQ Ch. 18 - Prob. 10DQ

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