Supplier Corp. enters into a government contract during the year to provide computer equipment for $3,200,000. Thecontract consists of a single performance obligation to provide specified equipment in three years. Total costs estimated bySupplier Corp. for the contract are $2,240,000. The equipment is highly specialized and has no alternative uses. Asnegotiated in the contract, any costs incurred by Supplier Corp. plus a specified profit margin will be paid to Supplier Corp.in the event of a contract cancellation. Actual costs incurred during the first year of the contract were $1,024,000 includingunexpected cost overruns of $128,000 due to labor inefficiencies.Assume that at the end of the second year of the contract, the estimate of total costs has increased to $2,400,000 milliondue to an increase in cost of materials. Actual costs incurred to date are $1,800,000, excluding year one inefficiencies.a. Calculate (1) recognized revenue, (2) the gross profit, and (3) adjusted contract margin to be recorded in the second yearof the contract.1 Recognized revenue$2 Gross profit$3 Adjusted contract margin $000b. Calculate (1) cumulative recognized revenue, (2) cumulative gross profit, and (3) cumulative adjusted contract margin atthe end of the second year of the contract.1 Cumulative recognized revenue$2 Cumulative gross profit$3 Cumulative adjusted contract margin $Check000K

Revenue Recognition means the recording of revenues of an entity in its books. It is an accrual…

r Corp. for the contract are $2,240,000. The equipment is highly specialized and has no alte ted in the contract, any costs incurred by Supplier Corp. plus a specified profit margin will b vent of a contract cancellation. Actual costs incurred during the first year of the contract we cted cost overruns of $128,000 due to labor inefficiencies. e that at the end of the second year of the contract, the estimate of total costs has increases an increase in cost of materials. Actual costs incurred to date are $1,800,000, excluding year late (1) recognized revenue, (2) the gross profit, and (3) adjusted contract margin to be reco ontract. gnized revenue $ s profit $ sted contract margin $ 0 0 0

r Corp. for the contract are $2,240,000. The equipment is highly specialized and has no alte ted in the contract, any costs incurred by Supplier Corp. plus a specified profit margin will b vent of a contract cancellation. Actual costs incurred during the first year of the contract we cted cost overruns of $128,000 due to labor inefficiencies. e that at the end of the second year of the contract, the estimate of total costs has increases an increase in cost of materials. Actual costs incurred to date are $1,800,000, excluding year late (1) recognized revenue, (2) the gross profit, and (3) adjusted contract margin to be reco ontract. gnized revenue $ s profit $ sted contract margin $ 0 0 0

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Gallerani Corporation has received a request for a special order of 5,500 units of product A90 for $27.70 each. Product A90's unit product cost is $27.20, determined as follows: Direct materials $ 2.95 Direct labor 8.25 Variable manufacturing overhead Fixed manufacturing overhead 7.35 8.65 Unit product cost $27.20 Assume that direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like modifications made to product A90 that would increase the variable costs by $4.00 per unit and that would require an investment of $19,000 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. The annual financial advantage (disadvantage) for the company as a result of accepting this special order should be:
1. Calculate operating profit margin ratio and net profit margin ratio for the year 2015, 2016 and 2017.
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Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
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Sheffield Corp. incurs the following costs to produce 9000 units of a subcomponent: Direct materials Direct labor Variable overhead Fixed overhead $9000 O $28950 O $(3500) $8950 O $(3250) 12500 12200 20000 An outside supplier has offered to sell Sheffield the subcomponent for $2.75 a unit. No fixed overhead costs are avoidable. If Sheffield accepts the offer, by how much will net income increase (decrease)?
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enjamin Inc. produces shoes. The accountant wants to calculate the fixed and variable costs associated with the leasing of machinery. or the past four months were collected as follows: Month April May June July Lease cost $15,000 10,000 12,000 16,000 Machine hours 800 500 770 900 Using the high-low method, calculate the fixed cost of leasing. O $2,500 $5,000 O$13,500 O $7,500
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6 Helix Company has been approached by a new customer to provide 1,500 units of its regular product at a special price of $7 per unit. The regular selling price of the product is $9 per unit. Helix is operating at 80% of its capacity of 11,500 units. Identify whether the following costs are relevant to Helix's decision as to whether to accept the order at the special selling price. No additional fixed manufacturing overhead will be incurred because of this order. The only additional selling expense on this order will be a $0.70 per unit shipping cost. There will be no additional administrative expenses because of this order. Calculate the operating income from the order. a. Selling price b. Direct materials cost c. Direct labor cost d. Variable manufacturing overhead e. Fixed manufacturing overhead f. Regular selling expenses g. Additional selling expenses h. Administrative expenses Revenue (cost) per unit $ 7.00 (1.00) (2.00) (1.80) (0.75) (1.30) (0.70) (0.80) Relevant Not Relevant…