The Central Valley Company is a manufacturing firm that produces and sells a single product. The company's revenues and expenses for the last four months are given below. Sales in units Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses Shipping expense Advertising expense Salaries & commissions Insurance expense Depreciation expense Total operating expenses Net income Central Valley Company Comparative Monthly Income Statements March COGS Shipping Salaries and commissions 5,900 $755,200 386,400 368,800 Y Y Y 68,800 79,000 April 5,400 $691,200 $787,200 359,400 394,900 331,800 392,300 64,300 79,000 157,300 9,900 48,000 358,500 May 6,150 71,800 79,000 174, 100 174,800 9,900 9,900 48,000 48,000 379,800 383,500 $(11,000) $(26,700) $8,800 X X X June 6,800 $870,400 435,000 435,400 Required: 1. Management is concerned about the losses experienced during the spring and would like to know more about the cost behaviour. Develop a cost equation for each of the costs. 75,500 79,000 189,500 9,900 48,000 401,900 $33,500 4

The Central Valley Company is a manufacturing firm that produces and sells a single product. The company's revenues and expenses for the last four months are given below. Sales in units Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses Shipping expense Advertising expense Salaries & commissions Insurance expense Depreciation expense Total operating expenses Net income Central Valley Company Comparative Monthly Income Statements March COGS Shipping Salaries and commissions 5,900 $755,200 386,400 368,800 Y Y Y 68,800 79,000 April 5,400 $691,200 $787,200 359,400 394,900 331,800 392,300 64,300 79,000 157,300 9,900 48,000 358,500 May 6,150 71,800 79,000 174, 100 174,800 9,900 9,900 48,000 48,000 379,800 383,500 $(11,000) $(26,700) $8,800 X X X June 6,800 $870,400 435,000 435,400 Required: 1. Management is concerned about the losses experienced during the spring and would like to know more about the cost behaviour. Develop a cost equation for each of the costs. 75,500 79,000 189,500 9,900 48,000 401,900 $33,500 4

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter13: Financial Statement Analysis

Section: Chapter Questions

Problem 13.3DC: Comparing Two Companies in the Same Industry: Chipotle and Panera Bread This case should be...

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Reese Manufacturing Company manufactures and sells a limited line of products made to customer order. The company uses a perpetual inventory system and keeps its accounts on a calendar year basis. A 6-column spreadsheet is presented on page 1100. Additional information needed to prepare the income statement and schedule of cost of goods manufactured is as follows: REQUIRED 1. Prepare an income statement and schedule of cost of goods manufactured for the year ended December 31,20--. 2. Prepare a statement of retained earnings for the year ended December 31,20--. 3. Prepare a balance sheet as of December 31, 20--. 4. Prepare the adjusting, closing, and reversing entries.
Cost of Goods Sold and Income Statement Schuch Company presents you with the following account balances taken from its December 31 adjusted trial balance: Additional data: 1. A physical count reveals an ending-inventory of 22,500 on December 31. 2. Twenty-five thousand shares of common stock have been outstanding the entire year. 3. The income tax rate is 30% on all items of income. Required: 1. As a supporting document for Requirements 2 and 3, prepare a separate schedule for Schuchs cost of goods sold. 2. Prepare a multiple-step income statement. 3. Prepare a single-step income statement.
Mason, Durant, and Westbrook (MDW) is a tax services firm. The firm is located in Oklahoma City and employs 15 professionals and eight staff. The firm does tax work for small businesses and well-to-do individuals. The following data are provided for the last fiscal year. (The Mason, Durant, and Westbrook fiscal year runs from July 1 through June 30.) Required: 1. Prepare a statement of cost of services sold. 2. Refer to the statement prepared in Requirement 1. What is the dominant cost? Will this always be true of service organizations? If not, provide an example of an exception. 3. Assuming that the average fee for processing a return is 850, prepare an income statement for Mason, Durant, and Westbrook. 4. Discuss three differences between services and tangible products. Calculate the average cost of preparing a tax return for last year. How do the differences between services and tangible products affect the ability of MDW to use the last years average cost of preparing a tax return in budgeting the cost of tax return services to be offered next year?
Using the information in the previous exercises about Marleys Manufacturing, determine the operating income for department B, assuming department A sold department B 1,000 units during the month and department A reduces the selling price to the market price.
Qualcomm Incorporated (QCOM) is a leading developer and manufacturer of digital wireless telecommunications products and services. Qualcomm reported the following inventories (in millions) in the notes to recent financial statements: a.Why does Qualcomm report three different inventories? b. What costs are included in each of the three inventory accounts?
Product cost concept of product pricing Based on the data presented in Exercise 12-15, assume that Willis Products Inc. uses the product cost concept of applying the cost-plus approach to product pricing. a.Determine the total manufacturing costs and the cost amount per unit for the production and sale of 200,000 units. b.Determine the product cost markup percentage per unit. Round to two decimal place. c.Determine the selling price per unit. Round to the nearest dollar.
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A company uses charging rates to allocate service department costs to the using departments. The accountant compiled the following information on one of the service departments: If Department K plans to use 1,350 hours of the service departments service in the coming year, how much of the service departments cost is allocated to Department K? a. 3,375 b. 27,300 c. 26,325 d. 23,950
Comparing Two Companies in the Same Industry: Chipotle and Panera Bread This case should be completed after responding to the requirements in Decision Case 13-2. Refer to the financial statement information of Chipotle and Panera Bread reprinted at the back of the book. Required Using the format in Example 13-5, prepare common-size comparative income statements for 2014 and 2013, for Panera Bread. Use total revenues as the base (i.e., 100%). Round all percentages to the nearest one-tenth of a percent. The common-size comparative income statements indicate the relative importance of items on the statement. Compare the common-size income statements of Panera Bread and Chipotle. What are the most important differences between the two companies income statements? Using the format in Example 13-4, prepare common-size comparative balance sheets at the end of 2014 and 2013, for Panera Bread. Round all percentages to the nearest one-tenth of a percent. The common-size comparative balance sheets indicate the relative importance of items on the statement. Compare the common-size balance sheets of Panera Bread and Chipotle. What are the most important differences between the two companies balance sheets?
The following information is available for Cooke Company for the current year: The gross margin is 40% of net sales. What is the cost of goods available for sale? a. 5840,000 b. 960,000 c. 1,200,000 d. 1,220,000
Salespersons report and analysis Walthman Industries Inc. employs seven salespersons to sell and distribute its product throughout the state. Data taken from reports received from the salespersons during the year ended December 31 are as follows: Instructions 1. Prepare a table indicating contribution margin, variable cost of goods sold as a percent of sales, variable selling expenses as a percent of sales, and contribution margin ratio by salesperson. (Round whole percent to one digit after decimal point.) 2. Which salesperson generated the highest contribution margin ratio for the year and why? 3. Briefly list factors other than contribution margin that should be considered in evaluating the performance of salespersons.