Patty Corp., a public company, delivers 3,200 units to a customer on 1 April for $80/unit. Patty Corp. has a return policy where they allow any customer to return any unused product within 45 days and receive a full refund. The cost of each product is $64. Based on historical experience Patty estimates that customer will return 2% of the units sold. Patty expects to be able to resell any returned goods. Assume that 50 products are returned on 2 May. No additional units are returned by 15 May (the end of the return period). Required: Prepare the journal entries related to the sale of products. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet < 1 2 3 4 5 6 Prepare the journal entry required on 1 April to record the sale: Note: Enter debits before credits. Date 1 April General Journal Debit Credit

Patty Corp., a public company, delivers 3,200 units to a customer on 1 April for $80/unit. Patty Corp. has a return policy where they allow any customer to return any unused product within 45 days and receive a full refund. The cost of each product is $64. Based on historical experience Patty estimates that customer will return 2% of the units sold. Patty expects to be able to resell any returned goods. Assume that 50 products are returned on 2 May. No additional units are returned by 15 May (the end of the return period). Required: Prepare the journal entries related to the sale of products. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet < 1 2 3 4 5 6 Prepare the journal entry required on 1 April to record the sale: Note: Enter debits before credits. Date 1 April General Journal Debit Credit

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter17: Activity Resource Usage Model And Tactical Decision Making

Section: Chapter Questions

Problem 6E: Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of...

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Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of 25,750 and is capable of processing as many as 6,500 purchase orders per year. Each clerk uses a PC and laser printer in processing orders. Time available on each PC system is sufficient to process 6,500 orders per year. The cost of each PC system is 1,100 per year. In addition to the salaries, Elliott spends 27,560 for forms, postage, and other supplies (assuming 26,000 purchase orders are processed). During the year, 25,350 orders were processed. Required: 1. Classify the resources associated with purchasing as (1) flexible or (2) committed. 2. Compute the total activity availability, and break this into activity usage and unused activity. 3. Calculate the total cost of resources supplied (activity cost), and break this into the cost of activity used and the cost of unused activity. 4. (a) Suppose that a large special order will cause an additional 500 purchase orders. What purchasing costs are relevant? By how much will purchasing costs increase if the order is accepted? (b) Suppose that the special order causes 700 additional purchase orders. How will your answer to (a) change?
Markson and Sons leases a copy machine with terms that include a fixed fee each month of $500 plus a charge for each copy made. The company uses the high-low method to analyze costs. If Markson paid $360 for 5,000 copies and $280 for 3,000 copies, how much would Markson pay if it made 7,500 copies?
Blossom Company sells 320 units of its products for $20 each to Wildhorse inc. for cash. Blossom allows Wildhorse to return any unused product within 30 days and receive a full refund. The cost of each product is $11. To determine the transaction price, Blossom decides that the approach that is most predictive of the amount of consideration to which it will be entitled is the probability weighted amount. Using the probability-weighted amount. Blossom estimates that (1) 7 products will be returned, and (2) the returned products are expected to be resold at a profit. Prepare the journal entries for Blossom at the time of the sale to Wildhorse including any expected returns. The company follows IFRS. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter "0" for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Cash (To record…
Curt Rugs is holding a 2-week carpet sale at Jean's Club, a local warehouse store. Curt Rugs plans to sell carpets for $1,000 each. The company will purchase the carpets from a local distributor for $400 each, with the privilege of returning any unsold units for a full refund. Jean's Club has offered Curt Rugs two payment alternatives for the use of space. Read the requirements. Requirement 1. Calculate the breakeven point in units for (a) option 1 and (b) option 2. Begin by determining the formula to calculate the breakeven point in units. Number of units to breakeven More Info • Option 1: A fixed payment of $17,400 for the sale period • Option 2: 20% of total revenues earned during the sale period Assume Curt Rugs will incur no other costs.
Oriole Company sells 455 units for $290 each to Sheffield Inc. for cash. Oriole allows Sheffield to return any unused product within 30 days and receive a full refund. The cost of each product is $174. To determine the transaction price, Oriole decides that the approach that is most predictive of the amount of consideration to which it will be entitled is the most likely amount. Using the most likely amount, Oriole estimates that ten (10) units will be returned, the costs of recovering the units will be immaterial, and the returned units are expected to be resold at a profit. What amount of refund liability should Oriole record at the time of sale? $1740 O $2900 $1160 O $0
Edmund Supplies Company sold 3,170 metal connectors on account to Door Incorporated for $200 each on September 15. Each metal connector costs Edmund $150 to make. Door has 60 days to return the unused goods. Edmund believes that Door will ultimately return 75 of the connectors. On September 29, Door returns 50 connectors. Edmund has a September 30 fiscal year end. At year end, Edmund believes 75 connectors is a good estimate of the total that will be returned. The cost of recovering these products is immaterial. Edmund expects to be able to resell these goods for a profit. Instructions Prepare the following journal entries on the books of Edmund Company: Entries to record the initial sales on September 15. Entries to record the return of goods September 29. Entries to record the year-end adjustment based on estimated returns on September 30.
The Cycle Shoppe has decided to offer credit to its customers during the spring selling season. Sales are expected to be 330 bicycles. The average cost to the shop of a bicycle is $300. The owner knows that only 93 percent of the customers will be able to make their payments. To identify the remaining 7 percent, she is considering subscribing to a credit agency. The initial charge for this service is $540, with an additional charge of $6 per individual report. What is the amount of the net savings from subscribing to the credit agency? A. $3,790 B. $3,920 C. $4,080 D. $4,410 E. $4,950
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A home gods retailer offers a sales incentive program where customers receive credit towards future purchases based on the dollar amount of their purchases today. For every $10 spent, a customer receives a $1 credit to use in the next 30 days. Based upon historical trends, the firm estimates that 35% of the credits will be redeemed. Assume the credit associated with the sales incentive program is a separate performance obligation. If during the month the company sold $40,000 of product with a cost of $22,000, what is amount of revenue allocated to product sales? Round to the nearest dollar. $29,630 $36,364 $38,647 $40,000 None of the above
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Rosas Company started a promotional program in which for every 15 box tops returned, customers received a special mug. The entity estimated that only 60% of the box tops reaching the market will be redeemed. The entity provided the following information for the current year: