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.

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.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 13RE: CoolShoes sells its elite tennis shoes to sports retailers throughout the country. When introducing...

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Cover Rugs is holding a 2-week carpet sale at Josh’s Club, a local warehouse store. Cover Rugs plans to sell carpets for $950 each. The company will purchase the carpets from a local distributor for $760 each, with the privilege of returning any unsold units for a full refund. Josh’s Club has offered Cover Rugs two payment alternatives for the use of space. ■ Option 1: A fixed payment of $7,410 for the sale period ■ Option 2: 10% of total revenues earned during the sale period Assume Cover Rugs will incur no other costs. Q1. Calculate the breakeven point in units for (a) Option 1 and (b) Option 2. Q2. At what level of revenues will Cover Rugs earn the same operating income under either option? a. For what range of unit sales will Cover Rugs prefer Option 1? b. For what range of unit sales will Cover Rugs prefer Option 2? Q3. Calculate the degree of operating leverage at sales of 65 units for the two rental options. 4. Briefly explain and interpret your answer to requirement 3.
Magical Memories sells Florida theme park vacation packages to various customers throughout the United States. Magical Memories receives a 5% commission based on the total price of the vacation package. A customer purchased the Deluxe Package valued at $15,000. Required: Prepare Magical Memories’s journal entries to record sale of the vacation package, the receipt of cash from the customer, and the remittance to the theme park.
Marquette has an opportunity to sell its product through an online retailer. To begin selling through this online platform, they are required to ship 2,000 units to the retailers’ order fulfillment warehouse. The other condition of this offer is that they pay a one-time vendor marketing fee of $5,000. To get the units to the fulfillment warehouse by the deadline Marquette will need to pay for expedited shipping at a cost of $10 per unit. What is the minimum price Marquette should charge the retailer for this initial order of 2,000 units? (Show all supporting calculations). (NOTE: ignore taxes or other costs not specifically mentioned in the questions.)
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Mrs. Tannenbaum is going to sell Christmas tree lights for $40 a box. The lights cost Mrs. Tannenbaum $10 a box and any unsold lights can be returned for a full refund. She is planning to rent a booth at the upcoming Happy Holidays Convention, which offers three options: 1. paying a fixed fee of $3,000, or 2. paying a $1,000 fee plus 10% of revenues made at the convention, or 3. paying 25% of revenues made at the convention. Which of the following statements is FALSE? Her decision will determine the risk she faces. Contribution margin will vary depending upon the option chosen. One of the options will allow Mrs. Tannebaum to break even, even if she doesn't sell any lights. Operating income will be the greatest for Option 3.
TGL furniture house has approved your application for credit. The maximum payment they have approved is $130 a month for 60 months. The APR is 14.9%. How much furniture can you afford to purchase using the credit offered by the store? TGL furniture house has approved your application for credit. The maximum payment they have approved is $130 a month for 60 months. The APR is 14.9%. How much furniture can you afford to purchase using the credit offered by the store?
A furniture company allows customers to purchase household furnishings with an in-store loan, pay with cash or a credit card, or Rent-To-Own with a lease agreement. A customer chooses furniture worth $3,225.00 including tax and chooses to Rent-To-Own. Rent to Own Furniture Warehouse No down payment is required. The monthly lease payment is $156.99 for 2 years. Calculate the total cost to own the furniture using the Rent-To-Own option. What is the amount of the finance charge on this purchase? What simple interest percentage rate is this finance charge? Recall:
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The business manager of an RSO has a choice of purchasing T-shirts for 500 students from two suppliers. Alpha T offers the shirt to be acquired at P300 each with print 500 pieces and silk screen cost of P1,000 for 500 pieces. If the RSO will buy less than 500 pieces, it will be charged at P315each. Beta T, another supplier offers the T-shirt at P187 each, charges printing at P10,000 at a higher level of printing technology for every 300 pieces, and P75/shirt for ink and labor. Record shows that sales come from 75% of the students buy T-shirts. If only 80% of the students are targeted to serve, which supplier will you choose? a) Alpha T b) Beta T c) Either of the two supplier d) none of the supplier
Kane Candy Company sells candy bars for $1 each. In addition, Kane offers its customers a coffee mug in exchange for $2 and 10 candy wrappers. A coffee mug costs Kane $2.40, and the company estimates that customers will redeem 60 percent of the candy wrappers. During 2020, Kane purchased 720,000 mugs, sold 5,600,000 candy bars, and redeemed 2,800,000 candy wrappers. Instructions: 1. Prepare the journal entry to record the purchase of the coffee mugs. 2. Prepare the entry to record the sale of the candy bars. 3. Prepare the entry to record the redemption of candy wrappers, the receipt of $2 per 10 wrappers, and the delivery of the coffee mugs. 4. Prepare the adjusting entry to record additional premium expense and the estimated premium liability at Dec. 31, 2020. L
Kane Candy Company sells candy bars for $1 each. In addition, Kane offers its customers a coffee mug in exchange for $2 and 10 candy wrappers. A coffee mug costs Kane $2.40, and the company estimates that customers will redeem 60 percent of the candy wrappers. During 2020, Kane purchased 720,000 mugs, sold 5,600,000 candy bars, and redeemed 2,800,000 candy wrappers. Instructions: 1. Prepare the journal entry to record the purchase of the coffee mugs. 2. Prepare the entry to record the sale of the candy bars. 3. Prepare the entry to record the redemption of candy wrappers, the receipt of $2 per 10 wrappers, and the delivery of the coffee mugs. 4. Prepare the adjusting entry to record additional premium expense and the estimated premium liability at Dec. 31, 2020.