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Pilsden also noted that Salary Experts quoted a fixed fee of $125,000 and variable processin
a. Assume Learning Toys has 14,000 employees on its payroll. Can the company save money by outso
$
$
14000 *7.50=
105,000.00 +
$75,000 +
230,000.00 +
$439,350 -
b. What are the pros and cons of outsourcing the payroll function?
Pro: Oursourcing frees up time that can be spent in your business. There is cost saving
when it comes to calculating wages, printing, and signing. There is an improvement in
security and there is also regulatory compliance.
Cons: there may be a difficulty obtaining wages anf employees data. If there is an error,
there will be delayes in corrections to payroll. There is a risk of vendor going out of
business, so may lose access to your payroll data.
$69,000 =
$ 413,350.00
$26,000.00
$183,350
$80,000
$50,000
$45,000
$325,000
$550,000
$25,000
$50,000
$75,000
$50,000
$25,000
$130,000
$50,000
$55,000
$180,000
$1,825,000
Prepare a statement of cost of goods manufactured and an income statement for the year en
General Lawnmower C
Cost of Goods Manufa
For the Year Ending Decem
Direct Materials :
Beginning Inventory
Purchases
Material Avaible for use
Less: Direct Ending Materials
Direct Materials Used
Direct Labor
Indirect Labor
Indirect Materials
Factory Rent
Utilities
Total Manufacturing Cost
Plus: Beginning Work-In-Process
Total Work-In-Process
Less: Work-In-Process
Cost of Good Manufactured
General Lawnmower C
Cost of Goods So
For the Year Ending Decem
Beginning Finished Gooods
Cost of Good Manufactured
Cost of Goods Available for Sale
Less: Ending Finished Goods
Costs of Goods Solds
General Lawnmower C
Income Stateme
For the Year Ending Decem
Sales Revenue
Costs of Goods Solds
Gross Margin
Marketing
Administrative Costs
Less: Total Marketing and Administratie Cost
Operating Profit
$330,000
$550,000
$25,000
$50,000
$80,000
$25,000
$1,060,000
$50,000
$1,110,000
($55,000)
$1,055,000
d Administratie Cost
$1,825,000
($1,030,000)
$795,000
$180,000
$130,000
($310,000)
$485,000
Per Unit
Selling price
Variable costs.
Contribution margin
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Fixed costs are $444,000 per month. The company is currently selling 7,000 u
Management is considering using a new component that would increase the
unit variable cost by $2. Since the new component would improve the
company's product, the marketing manager predicts that monthly sales would
increase by 200 units. What should be the overall effect on the company's
monthly operating profit of this change if fixed costs are unaffected?
Monthly Sales
Variable Cost
Contribution Margin
Total Contribution Margin
Current Contribution Margin
Net Operating Income
7200
128
$82
$590,400
$588,000
$2,400
$120,000
Variable costs
$1.20
60,000
Contribution
margin
Fixed costs
Operating
profit
$60,000
$80,000.00
0.6
60,000
0.6
20,000
Required: 20 Points
a. Find the break-even point in dollars.
Contribution Margin Ratio
Break-even point in terms of $
40%
125000
$75,000
c. The company is considering decreasing product A's unit sales to 80,000 and increasing pr
Product A
Sales
Variable costs
Contribution
margin
Fixed costs
Operating
profit
$96,000.00
$48,000.00
$48,000.00
I would advise adopting to this new plan because it arrange a more profita
d. Refer to (c) above. Under the new plan, find the break-even point in dollars.
35%
142,857
e. Under the new plan in (c) above, find the margin of safety in dollars.
Margin of Safety
$97,143
Per Unit
0.6
$0.20
120,000
80,000
50,000
$30,000
o 80,000 and increasing product B's unit sales to 180,000, leaving unchanged the selling price per un
Product B
$144,000.00
$108,000.00
$36,000.00
Combined
$240,000
$156,000
$84,000
50,000
$34,000
nt in dollars.
he selling price per unit, variable cost per unit, and total fixed costs. Would you advise adopting this p
75% *
$
520,000.00 +
$ 1,195,000.00 +
900,000.00
675,000.00
820,000.00
=
=
=
60% *
$ 2,015,000.00
c.
$ 2,015,000.00
-
$ 1,209,000.00
b.
$
$
$
was $820,000.
ed to Work-in-Process Inventory.
ocess. Costs assigned equally across all work-in-process.
g balances. All costs incurred were debited to the appropriate account and credited to Accounts Paya
$
675,000.00
$ 1,195,000.00
$ 2,015,000.00
$ 1,209,000.00
$
806,000.00