1. The Fresno Company manufactures slippers and sells them at $13 a pair. Variable manufacturing cost is $6.50 a pair, and allocated fixed manufacturing cost is $2.00 a pair. It has enough idle capacity available accept a one-time-only special order of 5,000 pairs of slippers at $8.50 a pair. Fresno will not incur any marketing costs as a result of the special order. What would the effect on operating income be if the special order could be accepted without affecting normal sales: (a) $0, (b) $10,000 increase, (c) $32,500 increase, or (d) $42,500 increase? Show your calculations. Begin by selecting the labels to calculate the effect on operating income and then enter in the supporting calculations. Special order price per unit Variable manufacturing cost per unit Contribution margin per unit x units in special order Effect on operating income

Distinguish between Income and Expenditure Account and Receiptand Payment Account.

Marin Inc. was opened on August 1 by Joe Marin. The following selected events and transactions occurred during August. Aug. 1   Invested $66,000 cash in the business in exchange for common stock. 3   Purchased O’Brien’s Tree Service for $43,000 cash. The price consists of land $26,000, building $13,000, and equipment $4,000. (Make one compound entry.) 5   Advertised the opening of the business, paying advertising expenses of $1,200. 6   Paid cash $1,240 for a one-year insurance policy. 10   Purchased equipment for $2,100 from Cullumber Company, payable in 30 days. 18   Received fees for services of $1,700 in cash. 25   Declared and paid a $400 cash dividend. 30   Paid wages of $1,450. 30   Paid Cullumber Company in full. 31   Received $600 of fees in cash. Marin uses the following accounts: Cash, Prepaid Insurance, Land, Buildings, Equipment, Accounts Payable, Common Stock, Dividends, Service Revenue, Advertising Expense, and Salaries and Wages…