Susan Hansen is the manager of American Autos. American Autos provides three types of services, Sales, Repairs, and Rebuilds, Susan needs to provide a profit analysis to the CEO at the end of the current fiscal year so the pricing and marketing strategies can be adjusted as needed. She has gathered the following information for the company. Cost # of employees Maint Hours HR Hours Revenue Marketing $219,000 Sales $992,000 5 50 100 Support Departments Maintenance. $320,000 Repairs $1,302,000 7 300 25 HR $49,000 Rebuilds $2,108,000 2 25 180 Operating Units Repairs $364,000 $870,000 Sales 12 800 1,200 16 1,900 850 Rebuilds $1,098,000 6 2,600 800

Susan Hansen is the manager of American Autos. American Autos provides three types of services, Sales, Repairs, and Rebuilds, Susan needs to provide a profit analysis to the CEO at the end of the current fiscal year so the pricing and marketing strategies can be adjusted as needed. She has gathered the following information for the company. Cost # of employees Maint Hours HR Hours Revenue Marketing $219,000 Sales $992,000 5 50 100 Support Departments Maintenance. $320,000 Repairs $1,302,000 7 300 25 HR $49,000 Rebuilds $2,108,000 2 25 180 Operating Units Repairs $364,000 $870,000 Sales 12 800 1,200 16 1,900 850 Rebuilds $1,098,000 6 2,600 800

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Tom & Jerry Publishers (TJP) is a publisher for books for children. It has four departments viz. HR, Finance , Printing and Packaging. TJP treats first two as support departments and other two as production departments. The company uses Asset Value as a driver for finance department and employee Head Count as a driver for HR department allocation. Following is the data available with regards to April 20X1. Specifics HR Finance Printing Packaging Asset Value $150,000 $250,000 $1,400,000 $350,000 Head Count 7 10 35 15 Department Costs $150,000 $200,000 $1,200,000 $200,000 Calculate the final costs of all the four departments for the month of April after allocation to Printing and packaging using: a. Direct method b. Sequential method assuming that HR is primary support department c. Reciprocal method Please need true help with all work so that…
Merton Electronics operates two retail outlets in Port Wren, one downtown and the other in Docklands. The stores share the use of a corporate staff responsible for functions such as personnel, IT, marketing, purchasing, and so on. The cost of the corporate activities for last year was $162,000. The following are the operating results for the two stores for the year: Downtown Docklands Sales revenue $ 720,000 $ 900,000 Number of employees 45 30 Required: Allocate the cost of the corporate activities to the two stores based on: Number of employees. store revenue.
The following cost data pertain to the operations of Montgomery Department Stores, Incorporated, for the month of July. Corporate legal office salaries Apparel Department cost of sales-Evendale Store Corporate headquarters building lease Store manager's salary-Evendale Store Apparel Department sales commission-Evendale Store Store utilities-Evendale Store Apparel Department manager's salary-Evendale Store Central warehouse lease cost Janitorial costs-Evendale Store $ 56,000 $ 90,000 $ 48,000 $ 12,000 $ 7,000 $ 11,000 $ 8,000 $ 15,000 $ 9,000 The Evendale Store is one of many stores owned and operated by the company. The Apparel Department is one of many departments at the Evendale Store. The central warehouse serves all of the company's stores. Required: 1. What is the total amount of the costs listed above that are direct costs of the Apparel Department? 2. What is the total amount of the costs listed above that are direct costs of the Evendale Store? 3. What is the total amount of…
Marathon Running Shop has two service departments (advertising and administrative) and two operating departments (shoes and clothing). The table that follows shows the direct expenses incurred and square footage occupied by all four departments, as well as total sales for the two operating departments for the year 2019. Direct Expenses Square Feet 500 Sales Department Advertising Administrative $ 15,000 27,000 103,000 13,000 700 4,100 4,700 $124,000 186,000 Shoes Clothing The advertising department developed and distributed 190 advertisements during the year. Of these, 38 promoted shoes and 152 promoted clothing. Utilities expense of $74,000 is an indirect expense to all departments. Complete a departmental expense allocation spreadsheet for Marathon Running Shop. The spreadsheet should assign (1) direct expenses to each of the four departments, (2) the $74,000 of utilities expense to the four departments on the basis of floor space occupied, (3) the advertising department's expenses…
You are the division president of Stable Division of Gigabit Inc. Your best friend is the division of Giga’s Turmoil Division. Each division has 5,000 employees. Last year Stable Division had a turnover of 1,000 employees and Turmoil Division had a turnover of 4,000 employees. Giga’s personnel department only provides service to Stable and Turmoil Divisions. The total annual cost of the personnel department is $100,000. Required: As president of Stable Division how would you allocate the cost of the personnel department? How do you think your best friend, the president of Turmoil Division, would allocate the cost of the personnel department? You are going to be transferred to Turmoil Division but before are transferred you are asked by the CEO to recommend an allocation method. What do you recommend? Is it ethical to recommend different allocation methods depending on which division you will be heading?
Ben Johnson is the manager of the jewelry department of a large chain of department stores. The department store has succeeded on the basis of customer service and quality of merchandise. As a manager, Ben is compensated with a salary of $270,000 and a bonus based on his unit's operating income. The bonus pool is 10% of company-wide operating income. When the unit's return on invested assets exceeds the rate of return of the whole company, the unit manager is included in the bonus pool, which is divided evenly among the managers who qualify for the bonus. In the current period, 25 managers qualified for the bonus, including Ben. Jewelry Department Whole Company $ 45 $ 17,200,000 $ 288,200,000 Stock price Operating income Assets invested $ 1,968,000 $ 23,200,000 Customer service Quality of service Total revenue $ 3,570,000 $ 124,300,000 Required: Based on the above information, what is the amount of total compensation for Ben? $270,000 $341,550 $338,800 $350,800
Subject:
Naper Inc. manufactures power equipment. Naper has two primary products-generators and air compressors. The following report was prepared by the controller for Naper's senior marketing management for the year ended December 31: Generators Air Compressors Total $ 4,200,000 (2,940,000) $ 1,260,000 $ 3,000,000 $ 7,200,000 (5,040,000) $ 2,160,000 (610,000) $ 1,550,000 Revenue Cost of goods sold Gross profit Selling and administrative expenses Operating income (2,100,000) $ 900,000 The marketing management team was concerned that the selling and administrative expenses were not traced to the products. Marketing management believed that some products consumed larger amounts of selling and administrative expense than did other products. To verify this, the controller was asked to prepare a complete product profitability report, using activity-based costing. The controller determined that selling and administrative expenses consisted of two activities: sales order processing and post-sale…
ABC Manufacturing is a producer of a local product used in house cleaning, called Agent C. The production manager is required to present a production report for the month August, however he got no idea on what information he needed for the report, and what analysis could be made to help the top management on their decision-making. The production manager sought your expertise on the subject matter and gave to you the following information: Sales (in Pesos) 4,957,875.00 22,500.00 Sales Volume Variable Costs: Cost of Direct Raw Materials 895,000.00 530,000.00 124,200.00 Cost of Direct Labor Cost of Packaging Materials Fixed Costs: Monthly Depreciation Monthly Rent of Warehouse Fixed Monthly Allowance for Electricity Other Fixed Manufacturing Overhead 650,000.00 100,000.00 675,000.00 146,700.00 Required: SENSITIVITY ANALYSIS If the selling price per unit is increased by 20% of its current price while the variable cost per unit is also increased by 30%, compute the following: d. How many…
hello I was looking to get help with this