19th Edition

ISBN: 9781947172685

Author: OpenStax

Publisher: OpenStax College

Concept explainers

Cost Volume Profit (CVP) analysis is a cost accounting method that analyses the effect of fluctuating cost and volume on the operating profit. Also known as break-even analysis, CVP determines the break-even point for varying volumes of sales and cost st…

Marginal Costing

Marginal cost is defined as the change in the total cost which takes place when one additional unit of a product is manufactured. The marginal cost is influenced only by the variations which generally occur in the variable costs because the fixed costs r…

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Textbook Question

Chapter 12, Problem 2PA

Stork Enterprises delivers care packages for special occasions. They charge $45 for a small package, and $80 for a large package. The sales tax rate is 6%. During the month of May, Stork delivers 38 small packages and 22 large packages.

A. What is the total tax charged to the customer per small package? What is the overall charge per small package?

B. What is the total tax charged to the customer per large package? What is the overall charge per large package?

C. How much sales tax liability does Stork Enterprises have for the month of May?

D. What accounts are used to recognize this tax situation for the month of May?

E. When Stork remits payment to the sales tax governing body, what happens to the sales tax liability?

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Chapter 12, Problem 1PA

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