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Question
Margin Company has total fixed costs of $360,000 and variable costs of $14 per unit. If the unit sales price is reduced from $24 to $20 and advertising is increased by $10,000, sales will increase from 40,000 to 65,000 units. Should Margin reduce its per unit sales price and pay for the additional advertising? (Support your answer with calculations.)Answer
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Related questions
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Prepare a December 31 balance sheet in proper form for Smokey River Supplies, Inc. from the following list of the accounts:Cash"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6."u00a6"u00a6"u00a6"u00a6"u00a6.........$10,000Accounts receivable"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6..8,000Supplies"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6.12,000Equipment"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6..35,000Land"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6..............18,000Accounts payable"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6..13,000Notes payable"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6."u00a6.41,000Stockholders' equity"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6."u00a6..29,000
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Prepare a April 30 balance sheet in proper form for Two Rivers Vending Service, Inc. from the following alphabetical list of the accounts at April 30:Accounts receivable"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6.$10,000Accounts payable"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6..18,000Building"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6....28,000Cash"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6."u00a6"u00a6"u00a6"u00a6"u00a6....10,000Notes payable"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6.47,000Office equipment"u00a6"u00a6"u00a6"u00a6"u00a6..."u00a6"u00a6"u00a6"u00a6"u00a6..12,000Stockholders' equity"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6.?Trucks"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6..55,000
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The following schedule reflects shows the first month's transactions of the Green Construction Company Inc. :The following schedule reflects shows the first month's transactions of the Green Construction Company Inc. : Accounts Accounts Cash+Receivable+Supplies +Equipment=Payable + Stockholders' Equity1)+20,000 +20,0002)"5,000 +5,000 3) +$1,500 +1,500 4)+3,000 +3,0005)+1,000 +1,500 +2,5006)"750 "750 7)+500 "500 8) "400 "4009)"2,000 "2,000 Provide descriptions for each transaction.
Q:
At the beginning of the period, a company had $350,000 worth of assets, $110,000 worth of liabilities, and $240,000 worth of equity. Assume the only change during the period was a $30,000 purchase of equipment by issuing a note payable. Show the accounting equation with the appropriate amounts at the end of the period.
Q:
Describe the income statement and the relation between revenues, expenses, and net income or loss.
Q:
Match each of the following terms with the most appropriate definition.a. Return on assetsb. Assetsc. Expensesd. Riske. Liabilitiesf. Dividendsg. Accounting equationh. Common stock____ 1. The uncertainty about the return to be earned.____ 2.Resources such as cash that a stockholder puts into the company.____ 3. A financial ratio stated as income divided by assets invested.____ 4. Creditor's claims on a company's assets.____ 5. Decreases in equity from costs of providing products or services to customers.____ 6.Resources such as cash that a stockholder r receives from the company for personal use.____ 7.Resources a company owns or controls that are expected to yield future benefit.____ 8. Expresses the relation of assets, liabilities and equity in a company, comparing the resources the company owns to the sources of funds to acquire the resources.
Q:
Match the following terms with the appropriate definition.a. Financial accountingb. Ethicsc. Recordkeepingd. Internal userse. Accountingf. Certified Public Accountant (CPA)g. Fraud triangleh. Managerial accountingi. External users____ 1. An information and measurement system that identifies, records and communicates relevant reliable and comparable information about an organization's business activities.____ 2. The part of accounting that involves recording transactions and events, either electronically or manually.____ 3. Persons using accounting information who are not directly involved in running the organization.____ 4. Persons using accounting information who are directly involved in managing and operating the organization.____ 5. The area of accounting that serves the decision-making needs of internal users.____ 6.The area of accounting aimed at serving external users by providing them with general-purpose financial statements.____ 7. Accounting specialists that have met educational and experience requirements, passed an examination and exhibit ethical characteristics to achieve a professional certification.____ 8. Beliefs that distinguish right from wrong, considered accepted standards of good and bad behavior.____ 9. A model that asserts the factors that must exist for a person to commit fraud.
Q:
The accounting equation for Ying Company shows a decrease in its assets and a decrease in its equity. Which of the following transactions could have caused that effect?
A.Cash was received from providing services to a customer.
B. The company paid an amount due on credit.
C.Equipment was purchased for cash.
D.A utility bill was received for the current month, to be paid in the following month.
E.Advertising expense for the month was paid in cash.
Q:
Grandmark Printing pays $2,000 rent to the landlord of the building where its facilities are located. How does this transaction affect the accounting equation for Grandmark?
A.Assets would decrease $2,000 and liabilities would decrease $2,000.
B.Assets would decrease $2,000 and equity would decrease $2,000.
C.Assets would increase $2,000 and equity would increase $2,000.
D.Assets would increase $2,000 and liabilities would increase $2,000.
E.Liabilities would decrease $2,000 and equity would increase $2,000.
Q:
Savvy Sightseeing had beginning equity of $72,000; revenues of $90,000, expenses of $65,000, and dividends to stockholders of $9,000. Calculate the ending equity.
A.$88,000.
B.$25,000.
C.$97,000.
D.$38,000.
E.$47,000.
Q:
Rico's Taqueria had cash inflows from operating activities of $27,000; cash outflows from investing activities of $22,000, and cash outflows from financing activities of $12,000. Calculate the net increase or decrease in cash.
A.$61,000 increase.
B.$37,000 increase.
C.$7,000 decrease.
D.$7,000 increase.
E.$34,000 decrease.
Q:
Zippy had cash inflows from operations $60,500; cash outflows from investing activities of $47,000; and cash inflows from financing of $25,000. The net change in cash was:
A.$38,500 increase.
B.$38,500 decrease.
C.$132,500 decrease.
D.$132,000 increase.
E.$11,500 decrease.
Q:
A company acquires equipment for $75,000 cash. This represents a(n):A.Operating activity.B.Investing activity.C.Financing activity.D.Revenue activity.E.Expense activity.
Q:
The financial statement that shows the beginning balance of retained earnings; the changes in retained earnings that resulted from , net income (or net loss); dividends; and the ending balance, is the:
A.Statement of financial position.
B.Statement of cash flows.
C.Balance sheet.
D.Income statement.
E.Statement of retained earnings.
Q:
On August 31 of the current year, the assets and liabilities of Gladstone, Inc. are as follows: Cash $30,000; Supplies, $600; Equipment, $10,000; Accounts Payable, $8,500. What is the amount of stockholders' equity as of August 31 of the current year?
A.$49,100
B.$32,100
C.$12,100
D.$10,900
E.$30,900
Q:
When expenses exceed revenues, the resulting change in equity is:
A.Net assets.
B.Negative equity.
C.Net loss.
D.Net income.
E.A liability.
Q:
A company is currently operating at 70% capacity producing 8,000 units. Cost information relating to this current production is shown in the following table:
Per Unit
Sales price $15
Direct material $3.20
Direct labor $7.10
Variable overhead $0.05
Fixed overhead $0.60
The company has been approached by a customer with a request for a special order for 1,500 units. The sales price per unit for this special order is $10. Should the company accept the special order?
Q:
What is the general procedure for converting variable costing net income to absorption costing net income?
Q:
What is the formula to compute manufacturing margin?
Q:
Direct labor X X
Q:
Variable manufacturing overhead
Q:
Direct materials
Q:
Match the following
Q:
Given the following data, calculate product cost per unit under variable costing.
Direct labor $8 per unit
Direct materials $3 per unit
Overhead
Total variable overhead $30,000
Total fixed overhead $85,000
Expected units to be produced 50,000 units
A. $7 per unit
B. $13.30 per unit
C. $11.00 per unit
D. $11.60 per unit
E. $16.50 per unit
Q:
Tim's Tools, a manufacturer of cordless drills, began operations this year. During this year, the company produced 20,000 units and sold 18,000 units. At year-end the company reported the following income statement using absorption costing:
Sales (18,000 $30) $540,000
Cost of goods sold (18,000 $14) 252,000
Gross margin $288,000
Selling and administrative expenses 90,000
Net income $198,000
Production costs per unit total $14, which consists of $12.90 in variable production costs and $1.10 in fixed production costs (based on the 20,000 units produced). 60% of total selling and administrative expenses are variable. Compute net income under variable costing.
A. $307,800
B. $198,000
C. $195,800
D. $288,000
E. $220,000
Q:
Decko Industries reported the following monthly data:
Units produced 52,000 units
Sales price $33 per unit
Direct materials $1.50 per unit
Direct labor $2.50 per unit
Variable overhead $3.50 per unit
Fixed overhead $234,000 in total
What is the company's contribution margin for this month if 50,000 units were sold?
A. $1,326,000
B. $1,716,000
C. $1,275,000
D. $1,650,000
E. $1,450,000
Q:
What is the Red and White's contribution margin for this month if 980 units were sold?
A. $38,000
B. $18,620
C. $24,500
D. $50,000
E. $21,560
Q:
Given the Cool Pools Company data, what is net income using absorption costing?
A. $1,649,480
B. $1,648,600
C. $1,627,150
D. $1,709,480
E. $1,708,600
Q:
Given the Scavenger Company data, what is net income using variable costing?
A. $201,250
B. $181,250
C. $150,000
D. $177,600
E. $276,250
Q:
Given the Galaxy, Inc. data, what is net income using absorption costing?
A. $11,275,000
B. $17,400,000
C. $16,360,000
D. $16,800,000
E. $16,220,000