BUSINESS TASK 1 Start-up costs are linked and associated with setting-up a business such as legal fees, purchasing of equipment, rented property deposit. Start-up costs means a different sort of costs, which a new business owner should get in so that the business can exist. Operating costs are expenses that relate to a business activities and they are divided into fixed and variable costs. Different businesses have different costs associated with them. Variable costs are expenses which keep changing
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households to produce goods and services, the prices of those resources (rents, wages, interest, and profits) paid to households constitute the households' incomes. What firms and government pay (to households) for the resources they buy to produce goods and services will constitute their costs of production. Firms' costs of production are reflected in the prices they put on the goods and services they produce, and these costs are recovered when those goods and services are sold in the product
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Customer profitability analysis: manufacturer 1 Customer profitability analysis: Sales revenue Cost of goods sold Gross margin Selling and administrative costs: General selling costs General administrative costs Customer-related costs: Sales activity (8,6 x $1000) Order taking (15, 20 x $200) Special handling (800, 600 x $50) Special shipping (18, 20 x $500) Total selling and administrative costs Operating profit CaesarStream $190 000 80 000 110 000 24 000 19 000 8 000 3 000 40 000 9 000 $103 000 $ 7 000
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Overview Any successful business owner is constantly evaluating the performance of his or her company, comparing it with the company's historical figures, with its industry competitors, and even with successful businesses from other industries. To complete a thorough examination of your company's effectiveness, however, you need to look at more than just easily attainable numbers like sales, profits, and total assets. You must be able to read between the lines of your financial statements and make
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Period Coverage Ratios * Times Interest Earned * Net Income + Non-cash Exp / Current Portion of LT Debt Leverage Ratios * Fixed Assets / Tangible Net Worth * Debt to Tangible Net Worth | Operating Ratios and Indicators * Gross Profit Margin * EBT / Tangible Net Worth * EBT / Total Assets * Fixed Asset Turnover Ratio * Total Asset Turnover Ratio * E.B.I.T.D.A. ("Ebitda") Expense to Revenue Ratios * % Depreciation, Depletion & Amortization /
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|change |%change | |Net sales |12000 |11500 |500 |4.347 | |Cost of sales |5500 |5200 |300 |5.769 | | Gross profit |6500
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84 EXERCISE 22-2 84 EXERCISE 22-8 84 EXERCISE 22-11 84 Chapter 23 86 EXERCISE 23-11 86 EXERCISE 23-13 88 EXERCISE 23-15 90 Chapter 1 CA 1-4 It is not appropriate to abandon mandatory accounting rules and allow each company to voluntarily disclose the type of information it considered important. Without a coherent body of accounting theory and standards, each accountant or enterprise would have to develop its own theory structure and set of practices, and readers of
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answer. 3. Show all your work when requested. Case 1: John’s company currently has a 40% share of a 1 million unit market. The current price for his product is $100, but in a direct attempt to gain market share from a competitor, he is considering lowering the price of his company’s product by 10% in an attempt to increase market share to 50%. Marketing expenses and cost per unit will remain at the level of 15% of gross profit and $70, respectively. 1. Assuming no competitive response and
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track direct materials and direct labor costs to the job cost sheet. Calculate a predetermined overhead rate and use it to apply manufacturing overhead cost to jobs. Describe how costs flow through the accounting system in job order costing. Calculate and dispose of overapplied or underapplied manufacturing overhead. Calculate the cost of goods manufactured and cost of goods sold. Lecture Presentation–LP2 www.mhhe.com/whitecotton1e 36 FOCUS COMPANY: Toll Brothers Inc. “America’s Luxury
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track direct materials and direct labor costs to the job cost sheet. Calculate a predetermined overhead rate and use it to apply manufacturing overhead cost to jobs. Describe how costs flow through the accounting system in job order costing. Calculate and dispose of overapplied or underapplied manufacturing overhead. Calculate the cost of goods manufactured and cost of goods sold. Lecture Presentation–LP2 www.mhhe.com/whitecotton1e 36 FOCUS COMPANY: Toll Brothers Inc. “America’s Luxury
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