Fundamentals Of Cost Accounting (6th Edition)
6th Edition
ISBN: 9781259969478
Author: WILLIAM LANEN, Shannon Anderson, Michael Maher
Publisher: McGraw Hill Education
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Textbook Question
Chapter 2, Problem 56E
Value Income Statement
Ralph’s Restaurant has the following information for year 2, when several new employees were added to the waitstaff:
- a. 5 percent of this cost was for food that was not used by the expiration date and 10 percent was for food that was incorrectly prepared because of errors in orders taken.
- b. 15 percent of this cost was for time spent by cooks to reprepare orders that were incorrectly prepared because of errors in orders taken.
- c. 20 percent of this cost was time taken to address customer complaints about incorrect orders.
- d. 80 percent of the building was used.
Required
- a. Using the traditional income statement format, prepare a value income statement.
- b. What value would there be to Ralph from preparing the same information in year 3?
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A quality control activity analysis indicated the following four activity costs of a hotel.
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For a recent year, McDugal's company-owned restaurants had the following sales and expenses (in millions):
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$34,200
Food and packaging
$11,734
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9,100
Occupancy (rent, depreciation, etc.)
8,166
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5,200
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Assume that the variable costs consist of food and packaging, payroll, and 40% of the general, selling, and administrative expenses.
a. What is McDonald's contribution margin? Enter your answer in million, rounded to one decimal place.$fill in the blank 1 million
b. What is McDonald's contribution margin ratio? Round your percentage answer to one decimal place.fill in the blank 2 %
c. How much would operating income increase if same-store sales increased by $2,100 million for the coming year, with no change in the contribution margin ratio or fixed costs?$fill in the blank 3 million
d. What would have been the operating…
Contribution Margin and Contribution Margin Ratio
For a recent year, McDugal's company-owned restaurants had the following sales and expenses (in millions):
Sales
Food and packaging
Payroll
Occupancy (rent, depreciation, etc.)
General, selling, and admin. expenses
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$4,310
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%
$14,500
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Assume that the variable costs consist of food and packaging, payroll, and 40% of the general,
a. What is McDonald's contribution margin? Enter your answer in million, rounded to one decimal place.
million
b. What is McDonald's contribution margin ratio? Round your percentage answer to one decimal place.
and
nistrative expenses.
c. How much would operating income increase if same-store sales increased by $900 million for the coming year, with no change in the contribution
margin ratio or fixed costs?
Chapter 2 Solutions
Fundamentals Of Cost Accounting (6th Edition)
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Ch. 2 - What do the terms step costs and semivariable...Ch. 2 - What do the terms variable costs and fixed costs...Ch. 2 - How does a value income statement differ from a...Ch. 2 - Why is a value income statement useful to...Ch. 2 - Materials and labor are always direct costs, and...Ch. 2 - Prob. 16CADQCh. 2 - In evaluating product profitability, we can ignore...Ch. 2 - Prob. 18CADQCh. 2 - The friend in question 2-18 decides that she does...Ch. 2 - Consider a digital music service such as those...Ch. 2 - Consider a ride-sharing service such as Uber or...Ch. 2 - Pick a unit of a hospital (for example, intensive...Ch. 2 - The dean of Midstate University Business School is...Ch. 2 - Prob. 24CADQCh. 2 - Prob. 25CADQCh. 2 - Basic Concepts For each of the following...Ch. 2 - Basic Concepts For each of the following costs...Ch. 2 - Basic Concepts For each of the following costs...Ch. 2 - Basic Concepts Place the number of the appropriate...Ch. 2 - Basic Concepts Intercontinental, Inc., provides...Ch. 2 - Prob. 31ECh. 2 - For each of the following costs incurred in a...Ch. 2 - Basic Concepts For each of the following costs...Ch. 2 - Basic Concepts The following data apply to the...Ch. 2 - Cost AllocationEthical Issues In one of its...Ch. 2 - Cost AllocationEthical Issues Star Buck, a coffee...Ch. 2 - Prepare Statements for a Manufacturing Company The...Ch. 2 - Prepare Statements for a Service Company Chucks...Ch. 2 - Prepare Statements for a Service Company Where2...Ch. 2 - Prepare Statements for a Service Company The...Ch. 2 - Prepare Statements for a Service Company Lead!...Ch. 2 - Prepare Statements for a Manufacturing Company The...Ch. 2 - Basic Concepts The following data refer to one...Ch. 2 - Basic Concepts The following data refers to one...Ch. 2 - Prepare Statements for a Merchandising Company The...Ch. 2 - Prepare Statements for a Merchandising Company...Ch. 2 - Cost Behavior and Forecasting Dayton, Inc....Ch. 2 - Sophia’s Restaurant served 5,000 meals last...Ch. 2 - Prob. 49ECh. 2 - Components of Full Costs Madrid Corporation has...Ch. 2 - Prob. 51ECh. 2 - Components of Full Costs Larcker Manufacturings...Ch. 2 - Prob. 53ECh. 2 - Gross Margin and Contribution Margin Income...Ch. 2 - Gross Margin and Contribution Margin Income...Ch. 2 - Value Income Statement Ralphs Restaurant has the...Ch. 2 - Value Income Statement DeLuxe Limo Service has the...Ch. 2 - Cost Concepts The following information comes from...Ch. 2 - Cost Concepts The controller at Lawrence...Ch. 2 - Cost Concepts Columbia Products produced and sold...Ch. 2 - Prepare Statements for a Manufacturing Company...Ch. 2 - Prepare Statements for a Manufacturing Company...Ch. 2 - Prepare Statements for a Manufacturing Company The...Ch. 2 - Cost Allocation with Cost Flow Diagram Coastal...Ch. 2 - Cost Allocation with Cost Flow Diagram Wayne...Ch. 2 - Cost Allocation with Cost Flow Diagram The library...Ch. 2 - Greenfield Consultants conducts analyses of public...Ch. 2 - Consider the Business Application, “Indirect Costs...Ch. 2 - Find the Unknown Information After a computer...Ch. 2 - Find the Unknown Information Just before class...Ch. 2 - Cost Allocation and Regulated Prices The City of...Ch. 2 - Koufax Materials Corporation produces plastic...Ch. 2 - Reconstruct Financial Statements San Ysidro...Ch. 2 - Westlake, Inc., produces metal fittings for the...Ch. 2 - Finding Unknowns Marys Mugs produces and sells...Ch. 2 - Finding Unknowns BST Partners has developed a new...
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