Homework Answers
A. Solomon Company
| Solomon Company | |
| Income Statement | |
| Sales Revenue (170*120) | $20,400 |
| Variable cost (170*0) | $0 |
| Contribution Margin | $20,400 |
| Fixed Cost | $14,875 |
| Net Income (loss) | $ 5,525 |
Rooney Company
| Rooney Company | |
| Income Statement | |
| Sales Revenue (170*120) | $20,400 |
| Variable cost (170*175) | $29,750 |
| Contribution Margin | ($ 9,350) |
| Fixed Cost | $ 0 |
| Net Income (loss) | ($ 9,350) |
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The following income statements illustrate different cost structures for two competing companies: 85 Income Statements Company...
The following income statements illustrate different cost structures for two competing companies: Income Statements Company Name...
The following income statements illustrate different cost structures for two competing companies: Income Statements Company Name Stuart Solomon Number of customers (a) 82 82 Sales revenue (a * $220) $ 18,040 $ 18,040 Variable cost (a * $185) N/A (15,170) Variable cost (a * $0) 0 N/A Contribution margin 18,040 2,870 Fixed cost (15,170) 0 Net income $ 2,870 $ 2,870 Required a. Reconstruct Stuart's income statement, assuming that it serves 164 customers when it lures 82 customers away from...
The following income statements illustrate different cost structures for two competing companies: Income Statements Company Name...
The following income statements illustrate different cost structures for two competing companies: Income Statements Company Name Zachary Walton Number of customers (a) 83 83 Sales revenue (ax $210) $ 17,430 $17.430 Variable cost (a X $180) N/A (14,940) Variable cost (a x $0) N/A Contribution margin 17.430 2,490 Fixed cost (14,940) Net Income $ 2,490 $ 2.490 Required a. Reconstruct Zachary's income statement, assuming that it serves 166 customers when it lures 83 customers away from Walton by lowering the...
The following income statements show equal net income even though quite different cost structures exist for...
The following income statements show equal net income even though quite different cost structures exist for the two companies: Note: "N/A" means not applicable to that particular company. Income Statements Company Name Baird Adams Number of customers (a) (a 86 86 Sales revenue (a x $220) $ 18,920 $ 18,920 Variable cost (a * $175) N/A (15,050) Variable cost (a * $0) 0 N/A Contribution margin 18,920 3,870 Fixed cost (15,050) 0 Net income $ 3,870 $ 3,870 Required a....
The following income statements show equal net income even though quite different cost structures exist for...
The following income statements show equal net income even though quite different cost structures exist for the two companies: Note: "N/A" means not applicable to that particular company. Income Statements Company Name Benson Baird Number of customers (a) 88 88 Sales revenue (a * $210) $ 18,480 $ 18,480 Variable coat (a * $175) N/A (15,400) Variable cont (a $0) 0 N/A Contribution margin 18,480 3,080 Fixed cost (15,400) 0 Net income $ 3,080 $ 3,080 Required a. Reconstruct Benson's...
The following income statements show equal net income even though quite different cost structures exist for...
The following income statements show equal net income even though quite different cost structures exist for the two companies: Note: "N/A" means not applicable to that particular company. Income Statements Company Name Rundle Perez Number of customers (a) 87 Sales revenue (a * $240) $ 20,880 $ 20,880 Variable cost (a * $185) N/A (16,095) Variable cost (a * $0) 0 N/A Contribution margin 20,880 4,785 Fixed cost (16,095) 0 Net income $ 4,785 $ 4,785 87 Required a. Reconstruct...
86 Number of customers (a) Sales revenue (a x $200) Variable cost (a x $185) Variable...
86 Number of customers (a) Sales revenue (a x $200) Variable cost (a x $185) Variable cost (a * $0) Contribution margin Fixed cost Net income Company Name Franklin Finch 86 $ 17,200 $ 17,200 N/A (15,910) 0 N/A 1,290 (15,910) $ 1,290 $ 1,290 DA 17,200 Required a. Reconstruct Franklin's income statement, assuming that it serves 172 customers when it lures 86 customers away from Finch by lowering the sales price to $100 per customer. . Reconstruct Finch's income...
Company Name Franklin Finch Number of customers (a) Sales revenue (a x $200) Variable cost (a...
Company Name Franklin Finch Number of customers (a) Sales revenue (a x $200) Variable cost (a x $185) Variable cost (a x $0) Contribution margin 86 86 $ 17,200 $ 17,200 N/A (15,910) N/A 17,200 (15,910) 1,290 Fixed cost 2$ 1,290 1,290 Net income Required a. Reconstruct Franklin's income statement, assuming that it serves 172 customers when it lures 86 customers away from Finch by lowering the sales price to $100 per customer. ɔ. Reconstruct Finch's income statement, assuming that...
Solomon Corporation sells hammocks; variable costs are $58 each, and the hammocks are sold for $138...
Solomon Corporation sells hammocks; variable costs are $58 each, and the hammocks are sold for $138 each. Solomon incurs $499,000 of fixed operating expenses annually. Required a1. Determine the sales volume in units and dollars required to attain a $77,000 profit. a 2. Prepare an income statement using the contribution margin format. b. Solomon is considering implementing a quality improvement program. The program will require a $6 increase in the variable cost per unit. To inform its customers of the...
The following income statement applies to Solomon Company for the current year: Income Statement Sales revenue...
The following income statement applies to Solomon Company for the current year: Income Statement Sales revenue (420 $15,960 units x $38) Variable cost (420 (9,660) units x $23) Contribution margin 6,300 Fixed cost (4,800) Net income $ 1,500 Required a. Use the contribution margin approach to calculate the magnitude of operating leverage. b. Use the operating leverage measure computed in Requirement a to determine the amount of net income that Solomon Company will earn if it experiences a 15 percent...
The following income statement was drawn from the records of Gibson Company, a merchandising firm: GIBSON COMPANY Incom...
The following income statement was drawn from the records of Gibson Company, a merchandising firm: GIBSON COMPANY Income Statement For the Year Ended December 31, 2018 Sales revenue (7,000 units X $162) $1,134,000 Cost of goods sold (7,000 units * $85) (595,000 Gross margin 539,000 Sales commissions (108 of sales) (113,400) Administrative salaries expense (87,000) Advertising expense (37,000) Depreciation expense 41,000) Shipping and handling expenses (7,000 units X $2) Net income 246,600 Required a. Reconstruct the income statement using the...
The following income statements illustrate different cost structures for two competing companies: Income Statements Company Name Stuart Solomon Number of customers (a) 82 82 Sales revenue (a * $220) $ 18,040 $ 18,040 Variable cost (a * $185) N/A (15,170) Variable cost (a * $0) 0 N/A Contribution margin 18,040 2,870 Fixed cost (15,170) 0 Net income $ 2,870 $ 2,870 Required a. Reconstruct Stuart's income statement, assuming that it serves 164 customers when it lures 82 customers away from...
The following income statements illustrate different cost structures for two competing companies: Income Statements Company Name Zachary Walton Number of customers (a) 83 83 Sales revenue (ax $210) $ 17,430 $17.430 Variable cost (a X $180) N/A (14,940) Variable cost (a x $0) N/A Contribution margin 17.430 2,490 Fixed cost (14,940) Net Income $ 2,490 $ 2.490 Required a. Reconstruct Zachary's income statement, assuming that it serves 166 customers when it lures 83 customers away from Walton by lowering the...
The following income statements show equal net income even though quite different cost structures exist for the two companies: Note: "N/A" means not applicable to that particular company. Income Statements Company Name Baird Adams Number of customers (a) (a 86 86 Sales revenue (a x $220) $ 18,920 $ 18,920 Variable cost (a * $175) N/A (15,050) Variable cost (a * $0) 0 N/A Contribution margin 18,920 3,870 Fixed cost (15,050) 0 Net income $ 3,870 $ 3,870 Required a....
The following income statements show equal net income even though quite different cost structures exist for the two companies: Note: "N/A" means not applicable to that particular company. Income Statements Company Name Benson Baird Number of customers (a) 88 88 Sales revenue (a * $210) $ 18,480 $ 18,480 Variable coat (a * $175) N/A (15,400) Variable cont (a $0) 0 N/A Contribution margin 18,480 3,080 Fixed cost (15,400) 0 Net income $ 3,080 $ 3,080 Required a. Reconstruct Benson's...
The following income statements show equal net income even though quite different cost structures exist for the two companies: Note: "N/A" means not applicable to that particular company. Income Statements Company Name Rundle Perez Number of customers (a) 87 Sales revenue (a * $240) $ 20,880 $ 20,880 Variable cost (a * $185) N/A (16,095) Variable cost (a * $0) 0 N/A Contribution margin 20,880 4,785 Fixed cost (16,095) 0 Net income $ 4,785 $ 4,785 87 Required a. Reconstruct...
86 Number of customers (a) Sales revenue (a x $200) Variable cost (a x $185) Variable cost (a * $0) Contribution margin Fixed cost Net income Company Name Franklin Finch 86 $ 17,200 $ 17,200 N/A (15,910) 0 N/A 1,290 (15,910) $ 1,290 $ 1,290 DA 17,200 Required a. Reconstruct Franklin's income statement, assuming that it serves 172 customers when it lures 86 customers away from Finch by lowering the sales price to $100 per customer. . Reconstruct Finch's income...
Company Name Franklin Finch Number of customers (a) Sales revenue (a x $200) Variable cost (a x $185) Variable cost (a x $0) Contribution margin 86 86 $ 17,200 $ 17,200 N/A (15,910) N/A 17,200 (15,910) 1,290 Fixed cost 2$ 1,290 1,290 Net income Required a. Reconstruct Franklin's income statement, assuming that it serves 172 customers when it lures 86 customers away from Finch by lowering the sales price to $100 per customer. ɔ. Reconstruct Finch's income statement, assuming that...
Solomon Corporation sells hammocks; variable costs are $58 each, and the hammocks are sold for $138 each. Solomon incurs $499,000 of fixed operating expenses annually. Required a1. Determine the sales volume in units and dollars required to attain a $77,000 profit. a 2. Prepare an income statement using the contribution margin format. b. Solomon is considering implementing a quality improvement program. The program will require a $6 increase in the variable cost per unit. To inform its customers of the...
The following income statement applies to Solomon Company for the current year: Income Statement Sales revenue (420 $15,960 units x $38) Variable cost (420 (9,660) units x $23) Contribution margin 6,300 Fixed cost (4,800) Net income $ 1,500 Required a. Use the contribution margin approach to calculate the magnitude of operating leverage. b. Use the operating leverage measure computed in Requirement a to determine the amount of net income that Solomon Company will earn if it experiences a 15 percent...
The following income statement was drawn from the records of Gibson Company, a merchandising firm: GIBSON COMPANY Income Statement For the Year Ended December 31, 2018 Sales revenue (7,000 units X $162) $1,134,000 Cost of goods sold (7,000 units * $85) (595,000 Gross margin 539,000 Sales commissions (108 of sales) (113,400) Administrative salaries expense (87,000) Advertising expense (37,000) Depreciation expense 41,000) Shipping and handling expenses (7,000 units X $2) Net income 246,600 Required a. Reconstruct the income statement using the...
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