[The following information applies to the questions displayed below] National Retail has two departments, Housewares and Sporting. Indirect expenses for the period follow. Rent Advertising Insurance Total $45,000 25,000 10.000 $80,000 The company occupies 4,000 square feet of a rented building. In prior periods, the company divided the $80,000 of indirect expenses by 4,000 square feet to find an average cost of $20 per square foot, and then allocated indirect expenses to each department based on the square feet it occupied. The company now wants to allocate indirect expenses using the allocation bases shown below. Department Sporting Hotal Square Feet 1,400 2,600 4,000 Value of Insured 40,000 $100,000 Problem 22-2A (Algo) Part 1 Required: 1. Allocate indirect expenses to the two departments using the allocation method used in prior periods. Department Square Footage Sparting Total

[The following information applies to the questions displayed below] National Retail has two departments, Housewares and Sporting. Indirect expenses for the period follow. Rent Advertising Insurance Total $45,000 25,000 10.000 $80,000 The company occupies 4,000 square feet of a rented building. In prior periods, the company divided the $80,000 of indirect expenses by 4,000 square feet to find an average cost of $20 per square foot, and then allocated indirect expenses to each department based on the square feet it occupied. The company now wants to allocate indirect expenses using the allocation bases shown below. Department Sporting Hotal Square Feet 1,400 2,600 4,000 Value of Insured 40,000 $100,000 Problem 22-2A (Algo) Part 1 Required: 1. Allocate indirect expenses to the two departments using the allocation method used in prior periods. Department Square Footage Sparting Total

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...

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Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Refer to Exercise 2.21. Last calendar year, Ellerson recognized revenue of 1,312,000 and had selling and administrative expenses of 204,600. Required: 1. What is the cost of goods sold for last year? 2. Prepare an income statement for Ellerson for last year.
Use the following information for Brief Exercise: Morning Smiles Coffee Company manufactures Stoneware French Press coffee makers and sold 8,000 coffee makers during the month of March at a total cost of 612,500. Each coffee maker sold at a price of 100. Morning Smiles also incurred two types of selling costs: commissions equal to 5% of the sales price and other selling expense of 45,000. Administrative expense totaled 47,500. 2-33 Income Statement Percentages Refer to the information for Morning Smiles Coffee Company on the previous page. Required: Prepare an income statement for Morning Smiles for the month of March and calculate the percentage of sales revenue represented by each line of the income statement. (Note: Round answers to one decimal place.)
Park and West, LLC, provides consulting services to retail merchandisers in the Midwest. In 2019, they generated $720,000 in service revenue. Their total cost (fixed and variable) per client was $2,500 and they served 115 clients during the year. If operating expenses for the year were $302,000 what was their net income?
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.
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Cunningham’s Drug Store, a medium-size drugstore located in Milwaukee, Wisconsin, is owned and operatedbyRichardCunningham.Cunningham’s sells pharmaceuticals, cosmetics, toiletries, magazines, and various novelties. Cunningham’s most recent annual net income statement is as follows: Sales revenue 200,000 Rent 120,000 Depreciation 60,000 Utilities 40,000 Miscellaneous 30,000 Total Costs 1,710,000 Net profit before tax $90,000 $1,800,000 Total costs 1,710,000 Cost of goods sold Wages and salaries Rent Depreciation Utilities Miscellaneous $1,260,000 200,000 120,000 60,000 40,000 30,000 Total costs Net profit before tax $90,000 Cunningham’ssales and expenses have remained relatively constant over the past few years and are expected to continue unchanged in the near future. To increase sales, Cunningham is considering using some floor space for a small soda fountain. Cunningham would operate the soda fountain for an initial three-year period and then would…
The unallocated income statement of de Souza Motel is shown below: Rooms F&B Total Revenue 257,000 130,000 387,000 Cost of Sales 48,000 48,000 Payroll and Related Expenses 60,000 30,000 90,000 Other Direct Expenses 40,000 12,000 52,000 Total Expenses 100,000 90,000 190,000 Departmental Income 157,000 40,000 197,000 Administrative &General 60,000 Sales& Marketing 25,000 POM& Utility costs 20,000 GOP 92,000 Insurance 10,000 Depreciation 12,000 Total Fixed Charges 22,000 Income Before Income Taxes 70,000 Income Taxes 30,000 Net income 44,000 Additional Information: Square Footage: Rooms: 120,000 F&B 80,000 Answers: (Correct or Wrong) Rooms department income before taxes is 67,600 F&B department income before taxes is (2,000) The De Souza Motel…
This year, Lambert Company will ship 1,500,000 pounds of goods to customers at a cost of $1,200,000. If a customer orders 10,000 pounds and produces $200,000 of revenue( total revenue is $20million), The amount of shipping cost assigned to the customer by using ABC would be a. Unable to be determined. b.$8,000($0.80per pound shipped) c.$24, 000(2% of the shipping cost) d. $12,000(1% of the shipping cost) e. None of these
Stay Handy company is a large company providing door to door delivery service forgroceries and other daily need items. In the most recent year, company had 60 millionmembers, through which provided it a revenue of $33,347 in the most recent year. Thedetails relating to Costs and expenses for the year were as follows:ParticularsCost of revenueSelling, general, and administrative expensesDepreciation and amortizationAmount (S in millions)§14 958S§7 9948,150Form the total cost of revenue 30% was fixed and the selling, general and administrativeexpenses are fixed to the extent of 70% to the number of members. How manymemberships does the company need to break-even? (All interim calculations and finalanswers should be rounded off to one decimal place)
Gloden Company operates a retail store in Faith, Hope, and Love. Golden Company’s corporate headquarters is located in Manila, and the company uses responsibility accounting to evaluate performance. The following information relates to the Faith facility:· The store sold 100,000 units at P20.00 each, after having purchased the units from various suppliers for P13. Faith salespeople are paid a 10% commission based on gross sales pesos.· Faith’s sales manager oversees the placement of local advertising contracts, which cost P88,000 and 5% of gross sales pesos. Local property taxes amounted to P15,000.· The sales manager’s P95,000 salary is set by Faith’s store manager. In contrast, the store manager’s P120,000 salary is determined by National Company’s vice president.· Faith incurred P20,000 of other noncontrollable costs along with P10,000 of income tax expense.· Nontraceable (common) corporate overhead totaled P68,000.The income that will be used to evaluate the manager of Faith…
Lalia rents 110,000 square feet of store space for $358,000 per year. The amount of square footage by department is shown below: Department A 45,000 square feet Department B 30,000 square feet Department C 18,000 square feet Department D 17,000 square feet Help allocate the annual rent expense among the four departments on the basis of relative square feet of floor space occupied.
Forchen, Inc., provided the following information for two of its divisions for last year: Small AppliancesDivision Cleaning ProductsDivision Sales $34,670,000 $31,320,000 Operating income 2,773,600 1,252,800 Operating assets, January 1 6,394,000 5,600,000 Operating assets, December 31 7,474,000 6,000,000 Required: 3. What if operating income for the small appliances division was $2,000,000? How would that affect average operating assets? Margin? Turnover? ROI? Calculate any changed ratios (round to four significant digits).