Recast the income statements to reflect the correct amounts, taking the inventory error into consideration.

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Answer 1

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Chapter 7, Problem 7.9P

1.

To determine

Recast the income statements to reflect the correct amounts, taking the inventory error into consideration.

2.

To determine

Compute the gross profit percentage for each year before and after the correction.

3.

To determine

Compute the effect that an error would have on the income tax expenses, assuming a 30% average rate.

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Florida Kitchens produces high-end cooking ranges. The costs to manufacture and market the ranges at the company’s volume of 3,000 units per quarter are shown in the following table: Unit manufacturing costs Variable costs $ 1,440 Fixed overhead 720 Total unit manufacturing costs $ 2,160 Unit nonmanufacturing costs Variable 360 Fixed 840 Total unit nonmanufacturing costs 1,200 Total unit costs $ 3,360 The company has the capacity to produce 3,000 units per quarter and always operates at full capacity. The ranges sell for $4,000 per unit. Required: a. Florida Kitchens receives a proposal from an outside contractor, Burns Electric, who will manufacture 1,200 of the 3,000 ranges per quarter and ship them directly to Florida’s customers as orders are received from the sales office at Florida. Florida would provide the materials for the ranges, but Burns would assemble, box, and ship the ranges. The variable manufacturing costs would be…

Answer 2

Question

Chapter 7, Problem 7.9P

1.

To determine

Recast the income statements to reflect the correct amounts, taking the inventory error into consideration.

2.

To determine

Compute the gross profit percentage for each year before and after the correction.

3.

To determine

Compute the effect that an error would have on the income tax expenses, assuming a 30% average rate.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 7, Problem 7.9P

1.

To determine

Recast the income statements to reflect the correct amounts, taking the inventory error into consideration.

2.

To determine

Compute the gross profit percentage for each year before and after the correction.

3.

To determine

Compute the effect that an error would have on the income tax expenses, assuming a 30% average rate.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 7, Problem 7.9P

1.

To determine

Recast the income statements to reflect the correct amounts, taking the inventory error into consideration.

2.

To determine

Compute the gross profit percentage for each year before and after the correction.

3.

To determine

Compute the effect that an error would have on the income tax expenses, assuming a 30% average rate.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 7, Problem 7.9P

1.

To determine

Recast the income statements to reflect the correct amounts, taking the inventory error into consideration.

2.

To determine

Compute the gross profit percentage for each year before and after the correction.

3.

To determine

Compute the effect that an error would have on the income tax expenses, assuming a 30% average rate.

Answer 6

Chapter 7, Problem 7.9P

1.

To determine

Recast the income statements to reflect the correct amounts, taking the inventory error into consideration.

Answer 7

Chapter 7, Problem 7.9P

1.

To determine

Recast the income statements to reflect the correct amounts, taking the inventory error into consideration.

Answer 8

2.

To determine

Compute the gross profit percentage for each year before and after the correction.

Answer 9

2.

To determine

Compute the gross profit percentage for each year before and after the correction.

Answer 10

3.

To determine

Compute the effect that an error would have on the income tax expenses, assuming a 30% average rate.

Answer 11

3.

To determine

Compute the effect that an error would have on the income tax expenses, assuming a 30% average rate.

Answer 12

Expert Solution & Answer

Answer 13

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Answer 14

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Answer 15

Ch. 7 - Why is inventory an important item to both...Ch. 7 - Prob. 2Q Ch. 7 - Prob. 3Q Ch. 7 - Prob. 4Q Ch. 7 - Prob. 5Q Ch. 7 - The chapter discussed tour inventory costing...Ch. 7 - Prob. 7Q Ch. 7 - Contrast the effects of LIFO versus FIFO on...Ch. 7 - Contrast the income statement effect of LIFO...Ch. 7 - Prob. 10Q

Recast the income statements to reflect the correct amounts, taking the inventory error into consideration.

Solution Summary: The author explains how to recast the income statements to reflect the correct amounts, taking the inventory error into consideration.

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Recast the income statements to reflect the correct amounts, taking the inventory error into consideration.

Compute the gross profit percentage for each year before and after the correction.

Compute the effect that an error would have on the income tax expenses, assuming a 30% average rate.

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Chapter 7 Solutions