Accounting

Cost of Goods Sold – totaled $3,294,000.00 for year 6, and from years 6 to 7 grew +32.8% or $1,048,000.00.

1- The total unit cost = Total Variable Cost + Production Fixed Expenses + Advertising Expense + Selling and Administrative Expense = 3.23 + 1.20 + 0.30 + 0.19 = 4.92.

In our second assumption, instead of using the cost of goods per cases in 1986, we try to use the percentage it counts in the total expenses which is 50.4% and to find the sales needed to break-even. The detail of the calculation is shown in the answer for questions d. The result is that 95,635, a little bit higher than the estimated sales of 90,000.

Account W/P Common Common # Title Ref. Balance Size Balance Size Amount Percentage REVENUE 40000 Sales 246,172,918.44 102.33% 245,213,452.88 106.40% -959,465.56 -0.39% 41000 Sales Returns 4,497,583.20 1.87% 13,600,220.89 5.90% 9,102,637.69 202.39% 42000 Warranty Exp 1,100,281.48 0.46% 1,158,128.47 0.50% 57,846.99 5.26% Net Sales 240,575,053.76 100.00% 230,455,103.52 100.00% (10,119,950.24) -4.21% EXPENSES 50000 COGS 141,569,221.61 58.85% 130,246,645.26 56.52% (11,322,576.35) -8.00% Gross Margin 99,005,832.15 41.15% 100,208,458.26 43.48% 1,202,626.11 1.21% GA-7.4

If Marlene Herbert were to discontinue place mats, he would miss $270,000 that will go toward Mendel paper company fixed cost. The company currently has a plant overhead that is estimated at $420,000 for the quarter. In addition to the fixed plant overhead, the plant incurs fixed selling and administrative expenses per quarter of $118,000. This draws the company to a total fixed cost of $538,000. If Marlene Herbert were to discontinue the second highest contributor to the fixed cost, he would need to increase the volume of computer paper and lower material cost to help pull the contribution margin of the lowest product up to help support the lost of a whole product line.

Peter’s Peripherals assembles multimedia upgrade kits --- sets of components for adding sound and video to desktop computers. The demand for their kits for the next four quarters is estimated in the table below. Unit manufacturing cost for each kit is $160. Holding costs on each kit is $80 per quarter. Any kit that must be delivered late is assessed a backorder cost of $120. Each worker is capable of finishing 10 kits per quarter. If the company chooses to vary work force levels, it will incur costs of $400 for each additional worker; $600 for each termination. The company currently has 28 employees.

The revenue is $600,600*1.2= $720,720. The variable cost changes as sales increases and fixed cost stays the same, the gross profit is $175,500. After tax, the net income is $100,557.

As a result we can see that only one of the four above criteria is met and it is a fixed price. Based on these findings we can advise to change WAG’s policy on revenue recognition upon the delivery of the product. This will lower the sales revenue by $50,000, as well as cost of goods sold and net income.

Key Keyboard Inc.’s (KKI) gross profit margin is 31.1%. ($7,669,000/$24,650,000) They are able to use 31.1 cents in the business and the COGS is 68.9 cents, however as they have larger revenues, they can still thrive and be successful.

Firstly, it is strategically beneficial for the company to continue to produce products A, C, and D. However, you should discontinue production of product B, as it is unprofitable and is losing the company money. Product B has been losing the company $2,307 per reel. If the company deems it is essential to keep producing product B in order to retain their customer base, we recommend changing the production schedule. For example, during times of lower demand, you can produce products such as B that do not make as much money, but you will still retain your customers’ business and satisfy their needs. During times of higher demand, by discontinuing the production of product B, the company will be able to produce the more profitable products such as A, C, and D.

Profit= 42360,739 + 1703,305 MTenure -4,57 MTenureSquared+ 3780,703 CTenure - 60,526 CTenureSquared + 3,997 Pop - 26561,276 Comp + 18091,05 Visibility + 36639,014 PedCount+ 58429,513

$2,000,000 + No. of employees * $500,000 = No. of employees * Volume of sales * Selling Price

Table of Contents ................................................................................................................................................ 1 Assignment Background .................................................................................................................................. 2 Bigg-Glowbell Overview ...................................................................................................................................... 3 The Company History ...................................................................................................................................... 3

To dig deeper, the first number we need to know is how many computer hours PDS has to sale to break even. We will assume the intercompany hours billed at $400 will average 205 per month. There are a few variable costs, such as power, parts of operation wages, and materials. Next, we calculate the unit contribution, which is (sales – variable cost). The average cost for power is the total 3 month power cost divided by the total time computers were used during this time(total revenue plus service hours) or 5028/1110=$4.53.

This equation is solved for the sales volume in units. c. In the graphical approach, sales revenue and total expenses are graphed. The break-even point occurs at the intersection of the total revenue and total expense lines. 8-2 The term unit contribution margin refers to the contribution that