Income statement : The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement. Service department charges : These are the indirect expenses incurred by profit center. These are charged for the services received by the department or division, based on the activity base of the service department. Profit margin : This ratio gauges the operating profitability by quantifying the amount of income earned from business operations from the sales generated. Formula of profit margin: Profit margin = Income from operations Sales To prepare : The income statements for E, W, and C Divisions of Incorporation TR for the quarter ended December 31, 2016.

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Answer 1

Question

Chapter 23, Problem 23.2APR

(1)

To determine

Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

Service department charges: These are the indirect expenses incurred by profit center. These are charged for the services received by the department or division, based on the activity base of the service department.

Profit margin: This ratio gauges the operating profitability by quantifying the amount of income earned from business operations from the sales generated.

Formula of profit margin:

Profit margin=Income from operationsSales

To prepare: The income statements for E, W, and C Divisions of Incorporation TR for the quarter ended December 31, 2016.

(2)

To determine

Profit margin and indicate the most profitable division.

(3)

To determine

To recommend: The chief executive officer to use better measure to evaluate the performance or profitability of the division.

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Please make a trial balance, adjusted trial balance, Income statement. end balance ,owners equity statement, Balance sheet , Cash flow statement ,Cash end balance

Activity Based Costing - practice problem Fontillas Instrument, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 50 range instruments and 300 pressure gauges were produced, and overhead costs of $89,500 were estimated. An analysis of estimated overhead costs reveals the following activities. Activities 1. Materials handling 2. Machine setups Cost Drivers Number of requisitions Number of setups Total cost $35,000 27,500 3. Quality inspections Number of inspections 27,000 $89.500 The cost driver volume for each product was as follows: Cost Drivers Instruments Gauge Total Number of requisitions 400 600 1,000 Number of setups 200 300 500 Number of inspections 200 400 600 Insructions (a) Determine the overhead rate for each activity. (b) Assign the manufacturing overhead costs for April to the two products using activity-based costing.

Bodhi Company has three cost pools and two doggie products (leashes and collars). The activity cost pool of ordering has the cost drive of purchase orders. The activity cost pool of assembly has a cost driver of parts. The activity cost pool of supervising has the cost driver of labor hours. The accumulated data relative to those cost drivers is as follows: Expected Use of Estimated Cost Drivers by Product Cost Drivers Overhead Leashes Collars Purchase orders $260,000 70,000 60,000 Parts 400,000 300,000 500,000 Labor hours 300,000 15,000 10,000 $960,000 Instructions: (a) Compute the activity-based overhead rates. (b) Compute the costs assigned to leashes and collars for each activity cost pool. (c) Compute the total costs assigned to each product.

Answer 2

Question

Chapter 23, Problem 23.2APR

(1)

To determine

Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

Service department charges: These are the indirect expenses incurred by profit center. These are charged for the services received by the department or division, based on the activity base of the service department.

Profit margin: This ratio gauges the operating profitability by quantifying the amount of income earned from business operations from the sales generated.

Formula of profit margin:

Profit margin=Income from operationsSales

To prepare: The income statements for E, W, and C Divisions of Incorporation TR for the quarter ended December 31, 2016.

(2)

To determine

Profit margin and indicate the most profitable division.

(3)

To determine

To recommend: The chief executive officer to use better measure to evaluate the performance or profitability of the division.

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Answer 3

Question

Chapter 23, Problem 23.2APR

(1)

To determine

Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

Service department charges: These are the indirect expenses incurred by profit center. These are charged for the services received by the department or division, based on the activity base of the service department.

Profit margin: This ratio gauges the operating profitability by quantifying the amount of income earned from business operations from the sales generated.

Formula of profit margin:

Profit margin=Income from operationsSales

To prepare: The income statements for E, W, and C Divisions of Incorporation TR for the quarter ended December 31, 2016.

(2)

To determine

Profit margin and indicate the most profitable division.

(3)

To determine

To recommend: The chief executive officer to use better measure to evaluate the performance or profitability of the division.

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Answer 4

Question

Chapter 23, Problem 23.2APR

(1)

To determine

Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

Service department charges: These are the indirect expenses incurred by profit center. These are charged for the services received by the department or division, based on the activity base of the service department.

Profit margin: This ratio gauges the operating profitability by quantifying the amount of income earned from business operations from the sales generated.

Formula of profit margin:

Profit margin=Income from operationsSales

To prepare: The income statements for E, W, and C Divisions of Incorporation TR for the quarter ended December 31, 2016.

(2)

To determine

Profit margin and indicate the most profitable division.

(3)

To determine

To recommend: The chief executive officer to use better measure to evaluate the performance or profitability of the division.

Expert Solution & Answer

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Answer 5

Chapter 23, Problem 23.2APR

(1)

To determine

Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

Service department charges: These are the indirect expenses incurred by profit center. These are charged for the services received by the department or division, based on the activity base of the service department.

Profit margin: This ratio gauges the operating profitability by quantifying the amount of income earned from business operations from the sales generated.

Formula of profit margin:

Profit margin=Income from operationsSales

To prepare: The income statements for E, W, and C Divisions of Incorporation TR for the quarter ended December 31, 2016.

(2)

To determine

Profit margin and indicate the most profitable division.

(3)

To determine

To recommend: The chief executive officer to use better measure to evaluate the performance or profitability of the division.

Answer 6

Chapter 23, Problem 23.2APR

(1)

To determine

Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

Service department charges: These are the indirect expenses incurred by profit center. These are charged for the services received by the department or division, based on the activity base of the service department.

Profit margin: This ratio gauges the operating profitability by quantifying the amount of income earned from business operations from the sales generated.

Formula of profit margin:

Profit margin=Income from operationsSales

To prepare: The income statements for E, W, and C Divisions of Incorporation TR for the quarter ended December 31, 2016.

Answer 7

Chapter 23, Problem 23.2APR

(1)

To determine

Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

Service department charges: These are the indirect expenses incurred by profit center. These are charged for the services received by the department or division, based on the activity base of the service department.

Profit margin: This ratio gauges the operating profitability by quantifying the amount of income earned from business operations from the sales generated.

Formula of profit margin:

Profit margin=Income from operationsSales

To prepare: The income statements for E, W, and C Divisions of Incorporation TR for the quarter ended December 31, 2016.

Answer 8

(2)

To determine

Profit margin and indicate the most profitable division.

Answer 9

(2)

To determine

Profit margin and indicate the most profitable division.

Answer 10

(3)

To determine

To recommend: The chief executive officer to use better measure to evaluate the performance or profitability of the division.

Answer 11

(3)

To determine

To recommend: The chief executive officer to use better measure to evaluate the performance or profitability of the division.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 23 - Prob. 1DQ Ch. 23 - Differentiate between a profit center and an...Ch. 23 - Weyerhaeuser developed a system that assigns...Ch. 23 - What is the major shortcoming of using income from...Ch. 23 - In a decentralized company in which the divisions...Ch. 23 - How does using the return on investment facilitate...Ch. 23 - Why would a firm use a balanced scorecard in...Ch. 23 - Prob. 8DQ Ch. 23 - When is the negotiated price approach preferred...Ch. 23 - When using the negotiated price approach to...

Solution Summary: The author explains how to prepare divisional income statements for E, W, and C Divisions of Incorporation TR for the quarter ended December 31, 2016.

Profit margin and indicate the most profitable division.

To recommend: The chief executive officer to use better measure to evaluate the performance or profitability of the division.

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Chapter 23 Solutions