BMAC 5203 Accounting

• Cost would increase to $600/wafer, which would cut our gross profit by 35%. The cost calculations are given in Exhibit 1.

One of the major benefits of expansion is the reduction of fixed cost (fixed and selling). The cost is absorbed by 85,000 units instead of 80,000 units resulting in saving of $0.42 per unit.

1. Using the historical data as a guide, construct a pro forma (forecasted) profit and loss statement

We will now calculate the costs and benefits, if any, from resizing the facility to process a total of 41,000 bbl/day (i.e. increase of 5,000 bbl/day).

f) To evaluate the material misstatement in the accounts, I think both of the consolidated income statement and the three financial statements are useful. We need to use the information properly from all the financial statements. However the consolidated income statement is the most useful one. If there is a significant change in an account balance comparing with preceding two years, the auditor will examine whether there a material misstatement exists. For instance, the bad debt expense as a percent of net sales in 2011, 2010 and 2009 are 0.56%, 0.70% and 0.69%, respectively. There should

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.

QUESTION 5: Kai decides to keep his price the same and add color, increasing variable costs by $0.40 per issue. What is the percent increase in unit volume (copies per issue) required to maintain $500 profits and cover the increased fixed and variable

* We increased this costs as a percent of revenue 2.7% over the previous year for all forecasted periods

In this table, it reflects the changes in fixed plant overhead from $420,000 to $378,000. The company still has the fixed selling and administrative expense per quarter of $118,000. The new company fixed overhead is now at $496,000 from the past $538,000 ($42,000) change from past to

The rise in revenue was rapid starting from the year of operations. The key period of business was from April to September were revenues were equal to 65% of total revenue as the product was seasonal. The basis of forecasting for the year 1981 & 1982 is the expectations of sales by Mr. Turner & Mr. Rose. It is given that total sales were $ 15.80 million in first half of year 1981 and the total sales in 1981 to reach $ 30 million. Profit after tax was expected to be $ 1 million for 1st half and we assumed for the next half, profit will be in proportion to first half & expected to be amounting to $ 0.90 million. For year 1982, the sales expectation by Mr. Rose was around more than $ 71 million &

d) Break even sales change that would change the profits by the same amount as a reduction in price.

11) By how much would the profit contribution of product A has to increase before it will be profitable to produce A?

3. Increase in expenses for marketing efforts and expanded distribution even if you do not introduce a new product.

Thus, the firm should sale 44,461.54 kg at retail price of 6.85 to achieve the same profit impact as selling 30 tons at retail price of 8.20.

* Variable costs: Assumed from exhibit 6. It will increase the same 8% as the variable revenue.