12. During 2020, Thor Lab supplied hospitals with a comprehensive diagnostic kit for P1,200. At a volume of 8,000 kits, Thor had fixed costs of P1,000,000 and a profit before income taxes of P200,000. Due to an adverse legal decision, Thor's 2021 liability insurance increased by P1,200,000 over 2020. Assuming the volume and other costs are unchanged, what should the 2021 price be if Thor is to make the same P200,000 profit before income taxes? c. P1,500 d. P2,400 a. P1,200 e. None of these; b. P1,350 answer is

12. During 2020, Thor Lab supplied hospitals with a comprehensive diagnostic kit for P1,200. At a volume of 8,000 kits, Thor had fixed costs of P1,000,000 and a profit before income taxes of P200,000. Due to an adverse legal decision, Thor's 2021 liability insurance increased by P1,200,000 over 2020. Assuming the volume and other costs are unchanged, what should the 2021 price be if Thor is to make the same P200,000 profit before income taxes? c. P1,500 d. P2,400 a. P1,200 e. None of these; b. P1,350 answer is

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 13E: On March 1, 2019, Elkhart enters into a new contract to build a specialized warehouse for 7 million....

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12.During last year, Thor Lab supplied hospitals with a comprehensive diagnostic kit for €120. At a volume of 80,000 kits, Thor had fixed costs of €1,000,000 and net income of €200,000. Because of an adverse legal decision, Thor's liability insurance expenses this year will be €480,000 more than they were last year. Assuming that the volume and other costs are unchanged, what should be the price this year if Thor is to make the same €200,000 net income? a) €120 b) €122 c) €124 d) €126 13.Plucky Company recently entered into a contract in which Plucky charges a price of actual cost plus 20%. If the price charged based on this formula is less than the target price of $4,500,000, Plucky is entitled to also receive 50% of the difference between the actual cost and the cost that would lead to the formula price equaling the target price. Plucky incurred an actual cost of $3,600,000. How much will Plucky make from the contract? a) $4,320,000 b) $4,395,000 c) $4,410,000 d) $4,500,000…
An outpatient surgery center performs 10,000 procedures in 2020 and incurs a total cost for utilities equal to $20,000. In 2021, the center performs 12,000 procedures and incurs a utilities cost equal to $22,000. The total fixed cost of utilities (either year) is _____________ .
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In 2018, the Port of Spain General Hospital purchases a scanner at a cost of $ 100,000. The scanner has a useful life of 5 years with no residual value. It is depreciated using the straight line method and its annual operating costs are $ 120,000. In 2019 the hospital is approached by another supplier to purchase a more modern machine for $ 115,000. This new machine has a life span of 4 years and will save $ 25,000 in annual operating costs. The new supplier is willing to buy the old scanner for $ 30,000. Required: Compute the gain or loss if the old scanner is replaced in 2019. 2. Advise the hospital on the purchase of the new scanner.
the hospital must decide whether or not to purchase new respirators. These respirators will help patients of covid – 19, and it will reduce the costs to patients at an estimated value of 100,000 Php. The prices of these 3 respirators are 500,000 Php for the first year, 550,000 Php for the second year, and 600,000 Php for the third year. If the interest rate for the acquisition of these respirators is 12%, determine the net present value for these respirators. Using the formula NPV=FV-OCW
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Sitaram Company manufactures and sells adjustable canopies that attach to motor homes and trailers. The market covers both new unit purchasers as well as replacement canopies. Sitaram developed its 2019 business plan based on the assumption that canopies would sell at a price of ₹400 each. The variable costs for each canopy were projected to be ₹200, and the annual fixed costs were budgeted at ₹100,000. The goal for Sitaram's after-tax operating profits was ₹240,000; the company's effective tax rate is 40%. While Sitaram's sales usually rise during the second quarter, the May financial statements reported that sales were not meeting expectations. For the first five months of 2019, only 350 units had been sold at the established price, with variable costs as planned. It was clear that the 2019 after-tax operating profit goal would not be reached unless some corrective actions were taken. Sitaram's president assigned a management committee to analyse the situation and develop several…
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