PROBLEM 2 Stuart Manufacturing produces metal picture frames. The company's income statements for the last two years are given below: Last year 50.000 Units sold Sales Cost of goods sold.. Gross margin. Selling and administrative expense. Net operating income. The company has no beginning or ending inventories. Required: This year 70,000 $800,000 $1,120,000 550.000 710,000 250,000 410,000 150.000 190.000 $100.000 $ 220.000 a. Estimate the company's total variable cost per unit and its total fixed costs per year. (Use high Low method to compute for fixed and variable component of Cost of Goods Sold. Do the same for Selling and Administrative Expense) b. Compute the company's contribution margin for this year.

PROBLEM 2 Stuart Manufacturing produces metal picture frames. The company's income statements for the last two years are given below: Last year 50.000 Units sold Sales Cost of goods sold.. Gross margin. Selling and administrative expense. Net operating income. The company has no beginning or ending inventories. Required: This year 70,000 $800,000 $1,120,000 550.000 710,000 250,000 410,000 150.000 190.000 $100.000 $ 220.000 a. Estimate the company's total variable cost per unit and its total fixed costs per year. (Use high Low method to compute for fixed and variable component of Cost of Goods Sold. Do the same for Selling and Administrative Expense) b. Compute the company's contribution margin for this year.

Name: PROBLEM 2Stuart Manufacturing produces metal picture frames. The comp
Uploaded: 2024-03-20T06:32:37.000Z
Channel: Bartleby
Description: PROBLEM 2Stuart Manufacturing produces metal picture frames. The company's income statements for thelast two years are given below:Last year50.000$800,000 $1,120,000550.000710,000250,000410,000150.000190.000$100.000 $ 220.000This year70.000Units sol

Corporate Financial Accounting

14th Edition

ISBN:9781305653535

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter14: Financial Statement Analysis

Section: Chapter Questions

Problem 14.5EX: Horizontal analysis of the income statement Income statement data for Winthrop Company for two...

See similar textbooks

Similar questions

1. Year one income statement by months ( sales by year 3 $2.7m 2.7 m /3 = $900,000 average each year sales 900,000 / 12 = $75,000 sales each month Revenues: Net sales $75,000 each month Expenses and loses Costs of goods sold 1,786 x $15.60 = $27,863.78 Capital expenses $1,150 / 12= $95.83 Location expenses $76,415/ 12 = $6,367.92 Advertising / Promotional expenses $78,285/ 12 = $6,523.75 CalculateTotal expenses Depreciation expense is straight line for this project ?. Use the market value of the asset divided by monthly expected life of the asset, We will not use salvage value in calculating depreciation expense.
Question 3Study the scenario and complete the questions that follow:Nonna Greco LimitedNonna Greco Limited manufactures and sells Italian HIP sunglasses. The following information relatesto January 2020:Units manufactured and sold: 500Income statement:RSales 261 500Less: Manufacturing costs 223 000Material 75 000Labour 50 000Manufacturing overheads (@ R20 per machine hour) 98 00038 500Less: Selling and administrative expenses (60% fixed) 17 500Net profit 21 000The following changes will come into effect on 1 February 2020: A sales price increase of 10%, resulting in a 5% decrease in sales volume. Due to negotiations with the labour union, the labour rate per hour will increase by 6%. It is expected that material costs will increase by 10%.The variable budget for manufacturing overheads indicates a total cost ofR94 400 at a capacity utilisation of 4 600 hours.Source: Hunde, T. (2020)Required:3.1 Calculate the total marginal income and marginal income per unit for the year ended 1…
Q5 Libscomb Technologies' annual sales are $6,879,896 and all sales are made on credit, it purchases $3,179,857 of materials each year (and this is its cost of goods sold). Libscomb also has $565,311 of inventory, $545,421 of accounts receivable, and $422,365 of accounts payable. Assume a 365 day year. What is Libscomb’s Operating Cycle (in days)?
1. Using the Goal Seek Tool find the Net Income breakeven point for both years changing the units sold while price remains fixed at $25.00 2. Using the Goal Seek Tool find the price each year that creates an income 1200 in 2018 and 2019 holding sales at 3500 units 2018 2019 Total Revenue 61436 63644 Cost of Goods Sold 46077 47733 Gross Profit 15359 15911 General & Admin 12,884 13,411 Depreciation 1250 1,250 Rent 650 650 Operating Expenses 14,784 15,311 EBIT 575 600 Interest Expense 575 600 Earnings Before Taxes 0 0 Income Tax Expense 0 0 Net Income 0 0 Units Sold 2,457 2,546 Price 25.00 25.00 Tax Rate 40.0% 40.0% Cost of Good Sold 75.0% 75.0%
Year 1 Year 2 Year 3 Year 4 $ % $ % $ % $ % Net Sales $ 500,000.00 100.00% $ 540,000.00 100.00% $ 577,800.00 100.00% $ 612,468.00 100.00% Cost of goods 265,000.00 53.00% $ 283,500.00 52.50% $ 300,456.00 52.00% $ 321,545.70 52.50% Gross Margin 235,000.00 47.00% $ 256,500.00 47.50% $ 277,344.00 48.00% $ 290,922.30 47.50% Operating expenses 210,000.00 42.00% $ 226,800.00 42.00% $ 245,565.00 42.50% $ 257,236.56 42.00% Operating proft 25,000.00 5.00% $ 29,700.00 5.50% $ 31,779.00 5.50% $ 33,685.74 5.50% Supposing that Mr. Ptolemy achieved his Year 3 and Year 4 performance goals as planned, compare the Year 1 through Year 4 yearly results. Hint: Calculate ‘ trends’ from Year 1 to Year 2, from Year 2 to Year 3, and from Year 3 to Year 4 in terms of NS, COGS, GM,OE and profit. Show your calculations and interpret the meaning of the obtained trend figures. Year 1-2…
Subject: Business Economics QUESTION – 3The following data have been taken from the book of Ubaida Company Ltd. For the year 2002-03.Inventories July 1 June 30Raw Materials Rs. 36,000 Rs. 75,000Goods In Process 90,000 75,000Finished Goods 50,000 75,000 Data for the YearSales Rs. 960,000 Purchases ( Raw Materials ) Rs. 410,000Purchase discount 15,000 Direct Labour incurred 175,000Purchase Return 20,000 Transportation Inward 10,000Rent (Factory) 35,000 Fuel & Power 55,000Rent (Office) 3,000 Utility (Factory) 13,000Utility (Office) 1,500 Transportation Outward 15,000Factory Supervisor Salary 8,000 Depreciation ( Furniture) 10,000Depreciation( Machines) 20,000…
Item 3 Item 3 10 points Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this year follows. Manufacturing costs Direct materials $ 40 per unit Direct labor $ 60 per unit Overhead costs Variable $ 30 per unit Fixed $ 7,000,000 (per year) Selling and administrative costs for the year Variable $ 770,000 Fixed $ 4,250,000 Production and sales for the year Units produced 100,000 units Units sold 70,000 units Sales price per unit $ 350 per unit 1. Prepare an income statement for the year using variable costing.2. Prepare an income statement for the year using absorption costing.
I'm trying to see what am I doing wrong on this spreadshit: Year 1 Year 2 Year 3 Year 4 $ % $ % $ % $ % Net sales $500,000.00 100.00% 540,000.00 100.00% 577,800.00 100.00% 612,468.00 100.00% Cost of goods 265,000.00 Gross margin 235,000.00 Operating expenses 210,000.00 Operating profit 25,000.00
Question 5 (Marks: 30)Consider the info provided below as well as the financial statements and answer the questionsthat follow. Pearson & Litt is a manufacturing company in the Eastern Cape. Their factory manufactures glasswine bottles for the Blue Valley Beer Co. 2019 2020Sales price per unit R15 R19Variable cost per unit R6 R7Fixed cost (FC) per annum R650 000 R 855 500Fixed cost per unit R3 R4 Current assets R450 600 R560 700Current liabilities R510 000 R780 000Retained profit R21 809 R17 600Net Sales R2 900 320 R 3 100 100Cost of sales R390 000 R475 00018; 19; 20 2020© The Independent Institute of Education (Pty) Ltd 2020Page 11 of 12Q.5.1Q.5.1.1 Calculate the break‐even point for Pearson & Litt for 2019 and 2020. (7)Q.5.1.2 Compare the results of the 2019 and 2020 break‐even point and explainwhy there might be a difference.(3)Q.5.2 The current ratio reflects the relationship between the value of the current assetsand the extent of the current liabilities of a business.…
Q # 1: The income statement for the Stylo Company for the past year is: Sales (150000 units @ $30) $4,500,000 Cost of Goods Sold: Materials $1,050,000 Labour 1,500,000 Variable FOH 450,000 Fixed FOH 500,000 3,500,000 Gross Profit $1,000,000 Variable Marketing Expenses $ 135,000 Fixed Marketing Expenses 185,000 Fixed Administrative Expenses 180,000 500,000 Income before Tax $ 500,000 Income Tax 250,000 Net Inco me $ 250,000 Woodstock is preparing its budget for the coming year and has made the following predictions about cost increases: material 5%, labour 8%, all other costs including fixed 6%. Productive capacity is 200,000 units. The president has been offered various proposals by the division managers as follows: Maintain the present volume and sales price Produce and sell at capacity and reduce the unit price $28. Raise the unit price to $32,…