Financial Accounting
14th Edition
ISBN: 9781305088436
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 3, Problem 9E
To determine
Determine the effects on the
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Scarce resource; discontinued product lines; negative contribution marginThe officers of Bardwell Company are reviewing the profitability of the company’s four products and the potential effects of several proposals for varying the product mix. The following is an excerpt from the income statement and other data.
Total
Product P
Product Q
Product R
Product S
Sales
$62,600
$10,000
$18,000
$12,600
$22,000
Cost of goods sold
(44,274)
(4,750)
(7,056)
(13,968)
(18,500)
Gross profit
$18,326
$5,250
$10,944
$(1,368)
$3,500
Operating expenses
(12,004)
(1,990)
(2,968)
(2,826)
(4,220)
Income before taxes
6,322
$3,260
$7,976
$(4,194)
$(720)
Units sold
1,000
1,200
1,800
2,000
Sales price per unit
$10.00
$15.00
$7.00
$11.00
Variable cost of goods sold
2.50
3.00
6.50
6.00
Variable operating expenses
1.17
1.25
1.00
1.20
Each of the following proposals is to be considered independently of the other proposals. Consider only the product changes stated in each…
Analyzing one company's make or buy and special order proposals
OneCo is a retail organization in the Northeast that sells upscale clothing. Each year, store managers (in consultation with their supervisors) establish financial goals; a monthly reporting system captures actual performance.
OneCo Inc. produces a single product. Cost per unit, based on the manufacture and sale of 10,000 units per month at full capacity, is shown below.
Product costs
Direct materials
$4.00
Direct labor
1.30
Variable overhead
2.50
Fixed overhead
3.40
Sales commission
0.90
$12.10
The $0.90 sales commission is paid for every unit sold through regular channels. Market demand is such that OneCo is operating at full capacity, and the firm has found it can sell all it can produce at the market price of $16.50.
Currently, OneCo is considering two separate proposals:
· Gatsby, Inc. has offered to buy 1,000 units at $14.35 each. Sales commission would be $0.35 on this special order.
·…
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[The following information applies to the questions displayed below.]
The first production department in a process manufacturing system reports the following unit data.
Beginning work in process inventory
Units started and completed
35,200 units
52,800 units
Units completed and transferred out
Ending work in process inventory
88,000 units
17,900 units
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Exercise 16-4 (Algo) Weighted average: Computing equivalent units LO P1
Prepare the production department's equivalent units of production for direct materials under each of the following three separate
assumptions using the weighted average method for process costing.
Equivalent Units of Production (EUP)-Weighted Average Method
1. All direct materials are added to products when…
Chapter 3 Solutions
Financial Accounting
Ch. 3 - How are revenues and expenses reported on the...Ch. 3 - Is the matching concept related to (a) the cash...Ch. 3 - Why are adjusting entries needed at the end of an...Ch. 3 - What is the difference between adjusting entries...Ch. 3 - Identify the four different categories of...Ch. 3 - If the effect of the debit portion of an adjusting...Ch. 3 - Prob. 7DQCh. 3 - Does every adjusting entry affect net income for a...Ch. 3 - Prob. 9DQCh. 3 - Prob. 10DQ
Ch. 3 - Indicate with a Yes or No whether or not each of...Ch. 3 - Indicate with a Yes or No whether or not each of...Ch. 3 - Classify the following items as (1) prepaid...Ch. 3 - Classify the following items as (1) prepaid...Ch. 3 - The supplies account had a beginning balance of...Ch. 3 - The prepaid insurance account had a beginning...Ch. 3 - The balance in the unearned fees account, before...Ch. 3 - Prob. 4PEBCh. 3 - At the end of the current year, 23,570 of fees...Ch. 3 - At the end of the current year, 17,555 of fees...Ch. 3 - We-Sell Realty Co. pays weekly salaries of 11,800...Ch. 3 - Prospect Realty Co. pays weekly salaries of 27,600...Ch. 3 - Prob. 7PEACh. 3 - The estimated amount of depreciation on equipment...Ch. 3 - For the year ending August 31, 2016, Mammalia...Ch. 3 - For the year ending April 30, 2016, Urology...Ch. 3 - For each of the following errors, considered...Ch. 3 - For each of the following errors, considered...Ch. 3 - Prob. 10PEACh. 3 - Prob. 10PEBCh. 3 - Classify the following items as (a) prepaid...Ch. 3 - The following accounts were taken from the...Ch. 3 - The balance in the supplies account, before...Ch. 3 - The supplies and supplies expense accounts at...Ch. 3 - At March 31, the end of the first month of...Ch. 3 - The balance in the prepaid insurance account,...Ch. 3 - The prepaid insurance account had a balance of...Ch. 3 - The balance in the unearned fees account, before...Ch. 3 - Prob. 9ECh. 3 - At the end of the current year, 22,650 of fees...Ch. 3 - The balance in the unearned fees account, before...Ch. 3 - The adjusting entry for accrued fees was omitted...Ch. 3 - Ocular Realty Co. pays weekly salaries of 16,600...Ch. 3 - Prob. 14ECh. 3 - Accrued salaries owed to employees for October 30...Ch. 3 - Assume that the error in Exercise 3-15 was not...Ch. 3 - Art Imaging Company was organized on April 1 of...Ch. 3 - The estimated amount of depreciation on equipment...Ch. 3 - The balance in the equipment account is...Ch. 3 - Prob. 20ECh. 3 - For a recent period, the balance sheet for Costco...Ch. 3 - Prob. 22ECh. 3 - The accountant for Healthy Life Company, a medical...Ch. 3 - If the net income for the current year had been...Ch. 3 - On December 31, a business estimates depreciation...Ch. 3 - The unadjusted and adjusted trial balances for...Ch. 3 - The accountant for Evas Laundry prepared the...Ch. 3 - The following data (in millions) are taken from...Ch. 3 - Prob. 29ECh. 3 - On March 31, 2016, the following data were...Ch. 3 - Selected account balances before adjustment for...Ch. 3 - Reliable Repairs Service, an electronics repair...Ch. 3 - Good Note Company specializes in the repair of...Ch. 3 - Rowland Company is a small editorial services...Ch. 3 - At the end of April, the first month of...Ch. 3 - Prob. 1PBCh. 3 - Selected account balances before adjustment for...Ch. 3 - Crazy Mountain Outfitters Co., an outfitter store...Ch. 3 - The Signage Company specializes in the maintenance...Ch. 3 - Reece Financial Services Co., which specializes in...Ch. 3 - At the end of August, the first month of...Ch. 3 - The unadjusted trial balance that you prepared for...Ch. 3 - Daryl Kirby opened Squid Realty Co. on January 1,...Ch. 3 - Prob. 2CPCh. 3 - Prob. 3CP
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