CIA Review, Inc. provides review courses twice each year for students studying to take the CIA exam. The cos included in the registration fee. Text material requires constant updating and is useful for only one course. To and ensure availability of books on the first day of class, CIA Review has books printed and delivered to its of advance of the first class. To ensure that enough books are available, CIA Review normally orders 10 percent enrollment. Usually there is an oversupply and books are thrown away. However, demand occasionally excee than 10 percent and there are too few books available for student use. CIA Review has been forced to turn aw a lack of textbooks. CIA Review expects to enroll approximately 200 students per course. The tuition fee is $2 cost of teachers is $50,000 per course, textbooks cost $150 each, and other operating expenses are estimate course. Assume all financial statements data are prepared in accordance with GAAP. Required a. Prepare an income statement, assuming that 200 students enroll in a course. Determine the cost of wast books. b-1. Prepare an income statement, assuming that 240 students attempt to enroll in the course, but 20 student because of too few textbooks. b-2. Prepare an income statement, assuming that 240 students attempt to enroll in the course, with all being b-3. Determine the amount of lost profit resulting from the inability to serve the twenty additional students.
CIA Review, Inc. provides review courses twice each year for students studying to take the CIA exam. The cos included in the registration fee. Text material requires constant updating and is useful for only one course. To and ensure availability of books on the first day of class, CIA Review has books printed and delivered to its of advance of the first class. To ensure that enough books are available, CIA Review normally orders 10 percent enrollment. Usually there is an oversupply and books are thrown away. However, demand occasionally excee than 10 percent and there are too few books available for student use. CIA Review has been forced to turn aw a lack of textbooks. CIA Review expects to enroll approximately 200 students per course. The tuition fee is $2 cost of teachers is $50,000 per course, textbooks cost $150 each, and other operating expenses are estimate course. Assume all financial statements data are prepared in accordance with GAAP. Required a. Prepare an income statement, assuming that 200 students enroll in a course. Determine the cost of wast books. b-1. Prepare an income statement, assuming that 240 students attempt to enroll in the course, but 20 student because of too few textbooks. b-2. Prepare an income statement, assuming that 240 students attempt to enroll in the course, with all being b-3. Determine the amount of lost profit resulting from the inability to serve the twenty additional students.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter10: Evaluating Decentralized Operations
Section: Chapter Questions
Problem 2TIF
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An income statement is a financial statement that shows the income and expenses of a firm. It also reveals if a company is making or losing money during a given time period. The income statement, along with the balance sheet and cash flow statement, helps you understand the financial health of your organization.
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