Varmit-B-Gone is a pest control service that operates in a suburban neighborhood.The company attempts to make service calls at least once a month to all homes thatsubscribe to its service. It makes more frequent calls during the summer. The numberof subscribers also varies with the season. The number of subscribers and the averagenumber of calls to each subscriber for the months of interest follow:Service calls(per subscriber)Subscribers1,2501,3502,0502,2502,2501,500March0.6AprilМay0.91.5June2.5JulyAugust3.02.4The average price charged for a service call is $80. Of the service calls, 30 percentare paid in the month the service is rendered, 60 percent in the month after theservice is rendered, and 8 percent in the second month after. The remaining 2 percentis uncollectible.Varmit-B-Gone estimates that the number of subscribers in September should fall 10percent below August levels, and the number of service calls per subscriber shoulddecrease by an estimated 20 percent. The following information is available for costsincurred in August. All costs except depreciation are paid in cash.Service costs$ 17,00015,000Variable costsMaintenance and repair35,000$ 67,000Depreciation (fixed)TotalMarketing and administrative costsMarketing (variable)Administrative (fixed)$ 24,0008,0$ 72,000TotalTotal costs$139,000Variable service and marketing costs change with volume. Fixed depreciation willremain the same, but fixed administrative costs will increase by 5 percent beginningSeptember 1. Maintenance and repair are provided by contract, which calls for a 1percent increase in September.Required:Prepare a budgeted income statement for September. (Round intermediatecalculations to 2 decimals places.)

Budget Statement: A budget statement is an organized outline of anticipated pay and consumption of a…

Varmit-B-Gone is a pest control service that operates in a suburban neighborhood. The company attempts to make service calls at least once a month to all homes that subscribe to its service. It makes more frequent calls during the summer. The number of subscribers also varies with the season. The number of subscribers and the average number of calls to each subscriber for the months of interest follow: Service calls TT Subscribers (per subscriber) March 1,250 0.6 April May 1,350 2,050 2,250 2,250 0.9 1.5 June 2.5 July 3.0 August 1.500 2.4

Varmit-B-Gone is a pest control service that operates in a suburban neighborhood. The company attempts to make service calls at least once a month to all homes that subscribe to its service. It makes more frequent calls during the summer. The number of subscribers also varies with the season. The number of subscribers and the average number of calls to each subscriber for the months of interest follow: Service calls TT Subscribers (per subscriber) March 1,250 0.6 April May 1,350 2,050 2,250 2,250 0.9 1.5 June 2.5 July 3.0 August 1.500 2.4

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 18E: On December 1, 2019, AwakcAllNight Inc. sells 5,000 super caffeinated candy bars to Campus Grocers....

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Varmit-B-Gone is a pest control service that operates in a suburban neighborhood. The company attempts to make service calls at least once a month to all homes that subscribe to its service. It makes more frequent calls during the summer. The number of subscribers also varies with the season. The number of subscribers and the average number of calls to each subscriber for the months of interest follow: March April May June July August Subscribers 850 950 1,650 1,850 1,850 2,000 Service calls (per subscriber) 0.6 The average price charged for a service call is $80. Of the service calls, 30 percent are paid in the month the service is rendered, 60 percent in the month after the service is rendered, and 8 percent in the second month after. The remaining 2 percent is uncollectible. Service costs 0.9 1.5 2.5 3.0 2.4 Varmit-B-Gone estimates that the number of subscribers in September should fall 10 percent below August levels, and the number of service calls per subscriber should decrease by…
Varmit-B-Gone is a pest control service that operates in a suburban neighborhood. The company attempts to make service calls at least once a month to all homes that subscribe to its service. It makes more frequent calls during the summer. The number of subscribers also varies with the season. The number of subscribers and the average number of calls to each subscriber for the months of interest follow: Subscribers Service calls (per subscriber) March 600 0.6 April 700 0.9 May 1,400 1.5 June 1,600 2.5 July 1,600 3.0 August 1,500 2.4 The average price charged for a service call is $80. Of the service calls, 30 percent are paid in the month the service is rendered, 60 percent in the month after the service is rendered, and 8 percent in the second month after. The remaining 2 percent is uncollectible. Varmit-B-Gone estimates that the number of subscribers in September should fall 10 percent below August levels, and…
Varmit-B-Gone is a pest control service that operates in a suburban neighborhood. The company attempts to make service calls at least once a month to all homes that subscribe to its service. It makes more frequent calls during the summer. The number of subscribers also varies with the season. The number of subscribers and the average number of calls to each subscriber for the months of interest follow: Service calls ITT Subscribers (per subscriber) March 450 0.6 April 650 0.9 May 1,450 1.4 June 1,550 2.5 1,500 July August 3.0 1,550 2.4 The average price charged for a service call is $60. Of the service calls, 30 percent are paid in the month the service is rendered, 60 percent in the month after the service is rendered, and 8 percent in the second month after. The remaining 2 percent is uncollectible. Required: What are Varmit-B-Gone's expected cash receipts for May, June, July, and August?
5 Varmit-B-Gone is a pest control service that operates in a suburban neighborhood. The company attempts to make service calls at least once a month to all homes that subscribe to its service. It makes more frequent calls during the summer. The number of subscribers also varies with the season. The number of subscribers and the average number of calls to each subscriber for the months of interest follow: March April May June July August Subscribers 600 550 1,300 1,600 1,350 1,600 May June Inly Service calls (per subscriber) 0.5 0.9 1.5 The average price charged for a service call is $50. Of the service calls, 40 percent are paid in the month the service is rendered, 50 percent in the month after the service is rendered, and 8 percent in the second month after. The remaining 2 percent is uncollectible. 2.5 2.9 2.0 Required: What are Varmit-B-Gone's expected cash receipts for May, June, July, and August? Cash Receipts
Cornwall Mobile Detailing (CMD) is a service that washes and details a customer's vehicle at their home or office. It operates on a membership basis. Members pay $800 dues per month, which entitle them to a complete wash and detail service monthly. Members may also order additional car washes during the month at a fee of $105. Additional washes are common in both summer and winter months. The number of members also varies with the season. The number of members and the average number of additional washes by members for the months of interest follow: Additional Washes (Average per Member) Members January February 420 1.4 480 1.7 March 1,040 1.3 April May 1,180 1.2 1,210 1,360 1.5 2.0 June Cornwall allows members to pay for dues on credit. Cornwall's experience is that 40 percent of its members pay cash for the dues, 50 percent of the members pay the dues for a month in the next month, 5 percent in the second month after. The remainder is uncollectible. Additional washes are payable in…
Cornwall Mobile Detailing (CMD) is a service that washes and details a customer's vehicle at their home or office. It operates on a membership basis. Members pay $900 dues per month, which entitle them to a complete wash and detail service monthly. Members may also order additional car washes during the month at a fee of $110. Additional washes are common in both summer and winter months. The number of members also varies with the season. The number of members and the average number of additional washes by members for the months of interest follow: Additional Washes (Average January February March April May June Members 430 per Member) 1.5 490 1.8 1,050 1.4 1,190 1.3 1,220 1,370 1.6 2.1 Cornwall allows members to pay for dues on credit. Cornwall's experience is that 40 percent of its members pay cash for the dues, 50 percent of the members pay the dues for a month in the next month, 5 percent in the second month after. The remainder is uncollectible. Additional washes are payable in…
Cornwall Mobile Detailing (CMD) is a service that washes and details a customer's vehicle at their home or office. It operates on a membership basis. Members pay $2,200 dues per month, which entitle them to a complete wash and detail service monthly. Members may also order additional car washes during the month at a fee of $175. Additional washes are common in both summer and winter months. The number of members also varies with the season. The number of members and the average number of additional washes by members for the months of interest follow: Members Additional Washes (Average per Member) January 560 2.8 February 620 3.1 March 1,180 2.7 April 1,320 2.6 May 1,350 2.9 June 1,500 3.4 Cornwall allows members to pay for dues on credit. Cornwall's experience is that 40 percent of its members pay cash for the dues, 50 percent of the members pay the dues for a month in the next month, 5 percent in the second month after. The remainder is uncollectible. Additional washes are payable in…
Kim Epson operates a full-service car wash, which operates from 8 a.m. to 8 p.m., 7 days a week. The car wash has two stations: an automatic washing and drying station and a manual interior cleaning station. The automatic washing and drying station can handle 30 cars per hour. The interior cleaning station can handle 200 cars per day. Based on a recent yearend review of operations, Kim estimates that future demand for the interior cleaning station for the 7 days of the week, expressed in average number of cars per day, would be as follows: Day Mon. Tues. Wed. Thurs. Fri. Sat. Sun. Cars 160 180 150 140 280 300 250 By installing additional equipment (at a cost of $50,000), Kim can increase the capacity of the interior cleaning station to 300 cars per day. Each car wash generates a pretax contribution of $4.00. Should Kim install the additional equipment if she expects a pretax payback period of three years or less?
Kim Epson operates a full-service car wash, which operates from 8 A.M. to 8 P.M. seven days a week. The car wash has two stations: an automatic washing and drying station that can handle 30 cars per hour and an interior cleaning station that can handle 210 cars per day. Based on a recent year-end review of operations, Kim estimates that future demand for the interior cleaning station for the seven days of the week, expressed in the average number of cars per day, would be as follows: Q i Kim should Day Cars should not Mon. 160 Tues. 180 Wed. 150 Thurs. 140 Fri. 260 By installing additional equipment (at a cost of $90,000) Kim can increase the capacity of the interior cleaning to 300 cars per day. Each car wash generates a pretax contribution of $5.00. Should Kim install the additional equipment if she expects a pretax payback period of three years or less? install the additional equipment because the payback period is years. (Enter your response rounded to two decimal places.) Sat. 270…
Westover Travel offers travel packages using both air and ocean travel. Westover offers two packages, Tourist and Premier, that differ in the accommodations, class of travel, and so on. Westover has a call center, which handles customer queries and complaints. The call center tracks the number of calls and the number of call-minutes for customers by the package they have purchased. Expected call center data for next month follow. Call center volume: Number of calls Number of call minutes Call center costs: Call-related Call minute-related Total call center costs Tourist 29,000 126,000 Required: Total $ 222,950 106,920 $ 329,870 The call center at Westover uses a two-stage cost allocation system: It uses the number of calls to allocate call-related costs and the number of call minutes to allocate call minute-related costs. Premier 16,500 198,000 a. Call related-overhead rate b. Call minute-related overhead rate c. Call center costs allocated to Tourist d. Call center costs allocated to…
Over the winter months, Sheridan Lawns Co. pre-sells fertilizing and weed control lawn services to be performed from May through September, inclusive. If payment is made in full by April 1, a 5% discount is allowed. In March, 390 customers took advantage of the discount and purchased the summer lawn service package for $740 each. In June, 320 customers purchased the package for $840, and in July, 107 purchased it for the same price. For customers who pay after May 1, service starts in the month the customer makes the payment. How much revenue should be recognized by the Sheridan Lawns Co. in each of the months of March, April, May, June, July, August, and September? (Round answers to 0 decimal places, e.g. 5,275.) March $ April $ May $ June $ July $ August $ September $
Over the winter months, Oriole Co. pre-sells fertilizing and weed control lawn services to be performed from May through September, inclusive. If payment is made in full by April 1, a 5% discount is allowed. In March, 270 customers took advantage of the discount and purchased the summer lawn service package for $760 each. In June, 220 customers purchased the package for $800, and in July, 81 purchased it for the same price. For customers who pay after May 1, service starts in the month the customer makes the payment. How much revenue should be recognized by the Oriole Co. in each of the months of March, April, May, June, July, August, and September? (Round answers to 0 decimal places, e.g. 5,275. Do not leave any answer field blank. Enter O for amounts.) March April May June July August September $ ՄԴԴԴ $