manufacturing overhead is treated as a product cost and hence is an asset until products are sold. Under variable costing, fixed manufacturing overhead is treated as a period cost and is expensed on the current period’s income statement. 7-2 Selling and administrative expenses are treated as period costs under both variable costing and absorption costing. 7-3 Under absorption costing, fixed manufacturing overhead costs are included in product costs, along with direct materials, direct labor, and
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case the business fails, it may tarnish the cordial relationship. It can as well leads to unnecessary interference with efforts to control the business. To put things right, an agreement can be entered into. Enhanced earning is the ploughing of the profit into the business after running it for a year. The enhanced earning should be after the payment of every deduction and tax. Its advantages lie on its readily availability, cheaper than external equity, no ownership dilution and its positive
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Units sold Units produced Fixed production costs Variable production costs per unit Selling price per unit 15,000 15,000 $750,000 $ 150 $ 250 2012 15,000 20,000 $750,000 $ 150 $ 250 $220,000 2013 15,000 10,000 $750,000 $ 150 $ 250 $220,000 Total 45,000 45,000 Fixed selling and administrative expense $220,000 Required a. Calculate profit and the value of ending inventory for each year using full costing. b. Explain why profit fluctuates from year to year even though the number of units sold, the
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EXERCISE 8-5: (a) Inventory December 31, 2014 (unadjusted) $234,890 Transaction 2 13,420 Transaction 3 12,800 Transaction 4
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CHAPTER 1 Mini-Exercises 1-1 | (5) IFRS = International Financial Reporting Standards | 1-2 | (2) F, (8) G | 1-3 | (2) I, (9) E | 1-4 | (7) L, BS | 1-5 | (3) A, BS | 1-6 | (8) SE, BS | 1-7 | (10) A, BS | 1-8 | (3) R, I/S | 1-9 | (4) A | 1-10 | (5) (I) | 1-11 | (4) (F) | 1-12 | Retained earnings 12/31/13=$50,000 | 1-13 | (c) $75,(f) $59,(i) $63 | 1-14 | (c) $80, (f) $60, (i) $700 | 1-15 | (a) $(300), (b) $70, (c) $3,900 | 1-16 | (3) Total assets=$15,463, (4) Financed
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Ratios: Profit Margin Analysis In the income statement, there are four levels of profit or profit margins - gross profit, operating profit, pre-tax profit and net profit. The term "margin" can apply to the absolute number for a given profit level and/or the number as a percentage of net sales/revenues. Profit margin analysis uses the percentage calculation to provide a comprehensive measure of a company's profitability on a historical basis (3-5 years) and in comparison to peer companies and industry
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THE SPORTS GUY 1. CASE SYNOPSIS The Sports Guy is a small sporting goods store located in a small town in the Greater Toronto Area and owned by Bob Rhodes (“Rocky”). Ten years back Rocky decided to start his own sporting goods business, of which he owns 60% and family members and friends 40%. Rocky purchased a land in town, with his startup capital and mortgage loan. Nearly 70% of the sales consist of equipment and uniforms bought by the local teams and the other 30% is consisting of wide range
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are itemised summaries of company income and expenses for a given period. It provides a concrete, organised, and easily understood breakdown of how much money a particular company can forecast coming in and how much going out in terms of expenditure. It is an invaluable tool to help prioritise the management of finance. In this report I have been tasked with analysing budgets and making appropriate decisions. Using relevant information from a children’s computer company “KidGenius” I will be explaining
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Sales = $181,500 (71,900+109,600) B) Cost of Goods Sold= 41,200 (71,200-30,000) C) Gross profit = 38,000 (108,000-70,000) D) Operating expenses = 17,900 (30,000-12,100) E) Operating expenses = 8,500 (38,000-29,500) F) Net income = 63,400 (109,600-46,200) Brief Exercise 5-2 Pocras Company Inventory 900 Accounts Payable 900 Wedell Company Accounts Receivable 900 Sales 900 Cost of Goods Sold 590 Inventory 590 Brief
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Kausar Dhahir | March 12,2015 | | Summary: John Atherley is the owner of Atherley Furniture Company located near Orillia, Ontario. Until 1998 the chairs division results and profits has been declining because of economic performance. From the year 1995 to 1998 John Atherley total profits have begun to suffer from $340,000 in 1995 to 260,000 in 1998mean 24% loss in it time span. The company chair division have three models of chair “Caledonia”, “Atherley”, and “Parkdale”. Sales from “Atherley”
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