ABC Corporation has hired you to help with their accounting. ABC is a wilderness adventure company in Whitehorse, YT. They operate from May 1st to September 30th each year, providing tourists with guided wilderness adventures. The owner, Daniel, asks you to help develop pricing for the new season because last year he made less money then he thought. Daniel gives you the following information he used to come up with pricing:
Labour (5 x 3 + 3 x 7) x 200 + 36 x 4 x 10 |
8,640 |
Food (36 x 4 x 35) |
5,040 |
Equipment |
15,000 |
Profit |
25,000 |
Total |
53,640 |
Total days and people 144 |
372.50 per day |
3 day adventure $372.50 x 3 |
$1,117.50 |
7 day adventure $372.50 x 7 |
$2,607.50 |
You just finished preparing the financial statements for ABC Company which were as follows. The sales were less than originally expected. There were 16 x 3 day adventures and 4 x 7 day adventures. It totalled 4 separate 3 day adventures and 1 separate 7 day adventure
ABC Company
Income Statement
For the year ending December 31, 2019
Revenue $28,310
Labour 4,560
Food 2,850
Depreciation 3,000
Profit $17,900
Daniel thinks he should raise his prices so he can reach his target of $25,000 profit this year. You charge Daniel $12,000 per year for accounting ($1,000 per month).
To help attract customers, Daniel only charges 10% of his fees up front. Daniel collected from customers as follows: 70% at 30-60 days and 20% 60-90 days.
Daniel has agreed to pay his labour the day the group returns. And has to pay for food before the adventure begins. Contracts remain the same for the current season.
Tourists gave great reviews last year and Daniel is already receiving bookings for the upcoming season. There is 2 groups of 4 people that have booked 3 day adventures and 1 group of 5 people that booked a 7 days adventure. Daniel expected to book a total of 24 x 3 day adventures and 13 x 7 day adventures.
Prepare a memo to Daniel with a recommendation. Provide support for your recommendation.
Hint: Marks will be awarded for providing 2 concepts from the course, showing a detailed analysis, providing a recommendation, and supporting your recommendation.
{this is full question now we just need to pick any concept and solve it. like any journal entries, PE ratio, if we need more people to make our business into profit or hire more employees or could be something else
i need any kind of general entries from it
i need any kind of ratio from it
this business is in loss and i want to make it into profit. and it can be anyhow from any method we need to make it into profit with any accounting theory with any accounting principal}
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[LO2, LO3, LO4]
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Other overhead costs
163,000
Total overhead costs
$
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Activity Cost Pool
Activity Measure
Total Activity
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DLHs
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Number of orders
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orders
Customer support
Number of customers
120
customers
Other
These costs are not allocated
to products or customers
NA
Distribution...