In:

Submitted By dionico49
Words 360
Pages 2
Exercise 1-2A

| Product Cost | Selling, General, and Administrative Cost | a. | | X | b. | X | | c. | | X | d. | | X | e. | | X | f. | | X | g. | X | | h. | X | | i. | | X | j. | | X |

Exercise 1-7A

a. Payroll costs that would be classified as selling, general, and administrative expense include the following:

Salary of the company president | \$ 40,000 | Salary of the chief financial officer | 20,000 | Salary of the vice president of marketing | 18,000 | Salaries of administrative secretaries | 60,000 | Commissions paid to sales staff | 252,000 | Total | \$390,000 | | |

b. Payroll costs that would be classified as product cost include the following:

Salary of the vice president of manufacturing | \$ 25,000 | Salary of middle managers in manufacturing plant | 196,000 | Wages of production workers | 938,000 | Salaries of engineers and maintenance crew | 178,000 | Total | \$1,337,000 | | |
Since 3,600 units of 4,000 finished products were sold, 90% (i.e. 3,600 ÷ 4,000) of the product cost would be classified as cost of goods sold. Therefore, the payroll cost that would be included in cost of goods sold is determined as follows:

\$1,337,000 x 90% = \$1,203,300

Alternatrive computation for the same result follows :

(\$1,337,000 ÷ 4,000) X 3,600 = \$1,203,300

Problem 1-20B

Event | | Assets | = | Equity | | Income Statement | | | | | | | | Manuf. | | Office | | Com. | | | | | | | | | | No. | | Cash | + | Invent. | + | Equip*. | + | Furn.* | = | Stk. | + | Ret. Ear. | | Rev. | – | Exp. | = | Net Inc. | | 1. | | | + | | + | | + | | = | | + | | | | – | | = | | | 2. | | | + | | + | | + | | = | | + | | | |

### Similar Documents

Free Essay

Words: 2257 - Pages: 10

Words: 1127 - Pages: 5

Words: 605 - Pages: 3

...CRADDOCK CUP Laura Regus THE CRADDOCK CUP Mr. Rivaldo: Upon review of the allocations, we have determined that the salary (J. Rivaldo), rent and utilities allocations to the Craddock Cup are irrelevant, as these are sunk costs that will be inquired despite of the tournament. Also, we have noted that the “city field rental” expense should be eliminated, as this is an irrelevant cost that CYSL cannot avoid by cancelling the tournament. Subtracting these costs lets CYSL generate a profit of \$6,502.00 (Exhibit 2A). Therefore we recommend that the Craddock Cup be continued. By expanding the tournament to include 32 more teams, CYSL will see an increase in their profits of \$2,572 (Exhibit 3A). In order to breakeven with the increases in marketing and advertising, college recruiters and 20 additional face books, the new registration fee should be \$350.00 per team. Recommendations Our recommendations upon reviewing the information provided will consist in ways of maximizing your potential profit. First, we recommend that the Craddock Cup is continued and also that you expand to include the additional 32 teams. By doing this, you will be generating a profit of \$9,074.00, which will allow you to fund the field-acquisition program and still have spare income. Second, we suggest that you increase the markup of the concessions to 115 percent, which will generate an additional \$1,296.00 in revenue. This will not be a dramatic increase for the participants of the tournament, so...

Words: 315 - Pages: 2

...Memorandum Literature Review: Before a recommendation can be made, it is important to understand the different factors that play a role in your situation. One of the first aspects we analyzed was cost behavior, which is how a specific cost reacts to change in activity levels. We also accounted for relevant costs.  These costs eliminate any unnecessary data that has the potential to complicate the decision-making process for management. Data Analysis: Craddock Cup generates total revenue of \$49,840 for 32 teams from registration fees, T-shirts, concessions, soccer clinic, and contributions. It is currently incurring a total expense of \$53,538. However, the total irrelevant cost of \$3,400 decreases the total expense, which includes the city field rental for \$1,200 Rivaldo’s salary of \$6,300, and rent expense of \$2,700, these costs will be incurred whether CYSL drops or keeps the Craddock cup. As a result, Craddock Cup generates an incremental profit of \$6,502. Craddock Cup will generate an additional \$10,132 by adding 32 more teams to the tournament. Most sources of revenues will double except for contributions for a total of \$85,680. Relevant expenses such as registration with state YSL, hotels, face book, marketing and advertising, and salary remain unchanged. These costs remain unchanged due to recruiters’ interest in only High School teams, and no further plans for marketing and advertising, and no salary increase. However, relevant variable expenses double as...

Words: 534 - Pages: 3

...Question 1: After reviewing the overhead-expense allocations made from CYSL to the Craddock Cup we have determined that the allocations made must be revised. The allocations currently in place are based solely on direct labor hours; however, this does not lead to the most accurate allocation of expenses. For Rivaldo and Renne Jansten’s salary allocations direct labor hours makes is correct because the amount of hours they work on the tournament should be a reflection of how much they are costing the tournament. The rent and utilities on the other hand cannot be based on direct labor hours of Rivaldo because this leads to a false allocation of expenses. This cost driver depends on what work takes place in the office space. Since each player that participated in the tournament needs to be insured and registered, one potential cost driver can be the amount of players participating in the tournament. The more participants in the tournament the more paper work there is to complete which leads to more time in the office. Another potential cost driver can be the number of games played because there are records of the games before and after the game take place. The paper work before the game may be related to which team is playing and which players from the teams will be playing. The paper work after the game will be related to the result of the game such as the score, the number of substitutions, and the number penalties. Therefore the more games that occur the more time must...

Words: 729 - Pages: 3

Words: 442 - Pages: 2

Words: 3504 - Pages: 15

Words: 638 - Pages: 3

#### Solution for Craddock Cup Case Study

...Chapter 5 1- You want to find the time value of the annuity below at end of year 3 (t=3). What should you calculate? A) PV of a 4 year annuity due B) FV of a 4 year annuity due C) FV of a 3 year annuity due D) FV of a 4 year ordinary annuity E) FV of a 3 year ordinary annuity 0 1 2 3 4 2- Moe is looking at an annuity that makes five \$10,000 payments with the first annuity payment occurring 11 years from today. What is the present value of this annuity if Moe’s interest rate is 9% compounded annually? A) 16,430.30 B) 13,558.23 C) 15,987.86 D) 12,897.67 E) 17,987.89 3- You want to buy a car, and a local bank will lend you \$30,000. The loan would be fully amortized over 5 years (60 months) and the nominal interest rate would be 12% with interest paid monthly. What would be the monthly loan payment? Assume payments start next period A) 430.89 B) 520.89 C) 667.33 D) 444.89 E) 430.89 4- Your sister turned 30 today and she is planning to save \$4000 per year for retirement with the first deposit to be made one year from today (her last deposit will be made at age 60). She will invest in a mutual fund, which she expects to provide a return of 10% per year. She plans to retire 30 years from today, when she turns 60, and she expects to live for 30 years after retirement, to age 90. Under these assumptions, how much can she spend in each year after she retires? Her first withdrawal will be made at the end of her first retirement year (she will also make her last withdrawal...

Words: 869 - Pages: 4

#### Mr. Sanders

Words: 283 - Pages: 2

#### Itt Tech Linux Assignment 3.1

Words: 283 - Pages: 2

#### Cleaning Pennies

...trials the orange juice cleaned the pennies better than the vinegar on a 24 hour period.I expected the vinegar to clean the pennies instead it made it rusty in the last trial when it was for 24 hours. Experiment Hypothesis Orange juice on one set of pennies and vinegar on another set of pennies in separate containers will make you ask which liquid will clean the pennies is it the orange juice or vinegar? Answer to testable question: I mention before we did three trials of this experiment and I noticed that the orange juice gave the pennies a cleaning effect on all three trials. The vinegar seems to give the pennies a hard on trial #3 after 24 hours. Experiment Details Independent Variables On Trial#1 we started off with glass cups and the results were the Simply Orange juice and the Heinz vinegar actually cleaned the pennies. Trial #2 The Simply Orange Juice and the Family Gourmet vinegar cleaned the pennies and Trial #3 the Simply Orange Juice cleaned the pennies while the Family Gourmet vinegar rusted the pennies. Dependent Variables The time it took for these pennies to show a cleaning effect on all three trials was 24 hours based on the types of liquids that were being used. Controlled Variables The variables we kept the same on all...

Words: 1593 - Pages: 7

Free Essay