Watson Incorporated: Absorption And Variable Costing Methods

Research and development – totaled $98,280.00 in year 7, and in years 7 to 8 decreased -16.3% or $15,996.00. This is weakness in sales and performance, but a smart decision because of the cut in R&D saved -16.3% or $15,996.00 that would have been looked at as profit. They were able to use the previous year’s investment on R&D.

I would now like to examine Wal-marts financial data. Wal-Mart’s revenue improved over these three years by $39,736 million which is a gross increase of 9.1%. Additionally the Cost of Sales climbed from

When an error of overstatement like this one happens, the financial statements have to be restated in order(ed) to bring net income to the correct amount. The Cost of goods sold should’ve been increased by $8 million and the same

Total profit show a positive increase from 18% in 2013 to 31% in 2015, far reaching the brothers’ preference of $1.1 M in 2015, Appendix 3 showed $1.4 M net profit

Only the incremental costs and benefits are relevant. In particular, only the variable manufacturing overhead and the cost of the special tool are relevant overhead costs in this situation. The other manufacturing overhead costs are fixed and are not affected by the decision.

* On Income Statement for December 31, 2010, the number of Revenues, Cost of Goods Sold, Expenses and Net Income will go up if we use the Non-GAAP approach.

I was pretty confident that our sales would justify the additional office and salary expense. However, as I looked at the pro forma statements it became very apparent that the sales force would sell more unit than the plant could produce. In hindsight, I should have increase production in Quarter 2 so I could keep up with future sales in Quarter 4. As a result, I did not hire new sales people but I fine tuned my advertising by copying my competitors and increased the advertising budget from $198,598 to $311,897. The pro forma income statement showed total revenues at $8,280,065 which was jump from $6,888,870. My operating profit also increased from $1,104,794 to $1,658,769. I was content with the slow but steady growth.

5. Regardless of the allocation system used, the total net income for the year will not change because the overall manufacturing overhead cost does not change. However, it is important to use a more accurate allocation method because it allows company’s to make decisions based on specific areas that might be driving costs up that may not show up when costs are allocated based on one driver.

Revenue: Net sales between years 6 and 7 demonstrate a 33.3% increase or an increase in approximately $1.5 million.

Between years 6 and 7 CBI’s Net Sales increased by 33.3% for a change of $1,495,000. The increase of 33% indicates strength for the company because it means that the

Compute the incremental net income of the investment for each year. (Do not round intermediatecalculations.)

If more is produced when it comes to the budget, the fixed cost would be favorable. I believe that the each unit would lower cost when it comes to production in units. But since the total fixed overhead is extended over a huge amount of units, this will cause a lower production in unit. Lastly, it will increase the

Glaser Health Products manufactures medical items for the health care industry. Production involves machining, assembly and painting. Finished units are then packed and shipped. The financial controller is interested to introduce an activity-based costing (ABC) system to allocate (or distribute) indirect costs to products. Indirect costs, as distinct from direct costs, cannot be unambiguously linked to specific products. The controller would like to calculate product costs based on ABC for planning and control, not inventory valuation.

The current method of apportioning production overheads based on direct labour hours can be described as a traditional approach to product costing. In a manufacturing company’s financial statements, each item produced must be allocated some of the production overheads to make the statements compliant. Sometimes the individual costs of these items can be calculated incorrectly based on overall production overhead and the system of allocating in place, however the overall financial statement can still be accurate. This traditional method of allocating the production

the  strategic  management  accounting  technique  used  and  Carlianne will provide  an  analysis of our results.  Courtney