Answered: The fixed costs incurred by a…

The fixed costs incurred by a automotive shop are $200,000 per year. Variable costs are 60% of the annual revenue. If annual revenue is $300,000, determine the annual profit (loss).

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter11: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 4CDQ: How would each of the following costs be classified if units produced is the activity base? a....

See similar textbooks

Related questions

Q: TROPA Inc. was incorporated on January 1, 2020, Information about its authorized shares is shown bel...

A: Total shareholders equity will consists of Equity share capital and securities premium and reserves ...

Q: On December 31, 2021, LJK Co. classified its building with a historical cost of P1,700,000 and accum...

A: Impairment Loss on Held for sale Non current Assets According to PFRS 5 there are some rules and reg...

Q: Your audit of Banayoyo Corporation counts Receivable account consists of the following: year ended D...

A: The answer is stated below:

Q: XX, YY and ZZ formed a partnership on January 1, 2015. Each contributed P120,000 Salaries were to be...

A: Introduction Partnership is the association of two or more persons who have agreed to share profit a...

Q: Is participative budget more favorable than impose budget? Justify your answer

A: Introduction:- Participative budgeting is an essential budgeting method that allows organizations to...

Q: nterest?

A: D,E and F are Partner in a partnership firm and sharing profit in the ratio of 1:3:6.

Q: Wally withdraws from the partnership and accepts P60,000 cash. Assuming the assets have been properl...

A: There are three golden rules in accounting for recording the transaction : Debit what comes in , C...

Q: 29. Your audit disclosed that on December 31, 2010, the accounts receivable control account of Alile...

A: Accounts receivable includes the amounts which are yet to be paid by debtors for the purchases made ...

Q: Bakery co. make these assumptions for valuation purposes: a. The firm consists of a single asset th...

A: CASH FLOWS TO FIRM PRE TAX 3000000 LESS : TAX @ 25% 750000 CASH FLOWS TO FIRM AFTER TAX 22...

Q: An increase in interest rates would mostly harm the ___. 1. creditors

A: Creditors : It refers to the party which has delivered a product or service on credit . Debtors : I...

Q: 1. When an error is discovered after closing the nominal accounts, one of the accounts to be credite...

A: Ans. All the accounting treatments are based on principles of accounting. They are to be followed in...

Q: B. Higgins, J. Mayo, and N. Rice have capital balances of $87,500, $80,000, and $66,000, respectivel...

A: Journal Entry: Journal entry is the act of keeping records of transactions in an accounting journal....

Q: Dzeko Company began operations on December 1, 2020. Presented below is selected information related ...

A: Income statement: The income statement shows the company's revenues and expenses earned during the p...

Q: In relation to your audit of the financial statements of the Rocky Mountain High for the fiscal year...

A: A cutoff bank reconciliation statement is a BRS prepared by the auditor for a short duration of time...

Q: On January 1, 2021, Mama Company purchased a machine for P2,750,000. The machine was depreciated usi...

A: Depreciation - Depreciation is computed every year due to wear and tear of the assets, for the purpo...

Q: On December 31, 2019, Ana Inc. sold merchandise for P750,000 to Ysa Inc. The terms of the sales were...

A: As per the shipping terms, inventory is considered delivered when it is shipped to customer. As per ...

Q: Blossom Inc. produces three separate products from a common process costing $100,300. Each of the pr...

A: NET INCOME IF ALL PRODUCTS SOLD AT SPLIT OFF POINT : = TOTAL SALES VALUE AT SPLIT OFF POINT - TOTAL...

Q: 1. $ land for the next year" should be capitalized in the Land How much of the "property taxes on th...

A: Solution:- 1)Calculation of the "property taxes on the land for the next year" should be capitalized...

Q: Hilda received a research grant from the University of Timberland in amounts of $10,000 for her time...

A: As per our guidelines we are supposed to answer 1 question at a time. Please ask the other remaining...

Q: B. Selected unadjusted account balance from the trial balance of Jim Crickets Cleaners for the year ...

A: Sno Account Titles Debit Credit a Rent Expense 52,800 Prepaid rent 52,8...

Q: Carbonel and Dimaano formed a partnership and agreed to divide initial capital equally, even though ...

A: Under the bonus method, the partners invested may or may not equal the book value of the capital int...

Q: The balance sheet for Campbell Corporation follows: Current assets $233,000 763,000 Long-term assets...

A: Working capital = Current assets - Current liabilities Current ratio = Current assets / Current li...

Q: Austin Company reports the following components of stockholders' equity on January 1. Common stock-$...

A: The journal entries are prepared to record day to day transactions of the business. The loss on sale...

Q: A loan of $400,000 with

A: This is used in case of lump-sum money accumulates in the future if interest is charged on periodic...

Q: The following trial balance was extracted from the books of Movies To The Max Ltd at July 31, the en...

A: The following trial balance was extracted from the books of Movies To The Max Ltd at July 31, the en...

Q: Jim and Joe are partners agreeing to share profits and losses in a 2:6 ratio, respectively. Business...

A: The sharing of profit and loss in accordance with the profit and loss sharing ratio.it completely de...

Q: The audit risk model includes the four risks listed below. Match the type of risk with the related d...

A: Audit risk is the risk that financial statements are material misstatement and audit opinion states ...

Q: Davis Stores sells clothing in 15 stores located around the southwestern United States. The managers...

A: This is an accounting question in which we have to find the costs based on the regression relationsh...

Q: Apple states in Note 3 that there were no customers that individually represented 10% or more of the...

A: Information regarding the majority as well as the minority regarding a single person holding such sh...

Q: A prior period error is not included in profit or loss but treated as an adjustment of the beginning...

A: Lets understand the basics. Prior period error is a accounting error or omission which are detected ...

Q: During an acquisition, when should intangible assets NOT be recognized apart from Goodwill? A. The a...

A: The correct answer is Option (d)The assets have been accounted for by the subsidiary but have no Fai...

Q: ABC Company leases equipment to its customers under non-cancelable leases. On January 1,2019, ABC Co...

A: It is an arrangement between two parties in which one party (lessor) allows another party (lessee) t...

Q: Philadelphia Company has the following information for March: Sales $484,918 Variable cost of goods ...

A: Manufacturing margin is referred to as the margin after considering all fixed and variable manufactu...

Q: On January 1,2020, ABC Company leased its equipment to DEF Company under a 3 year operating lease at...

A: Base Rent on operating lease is recognized on a straight line basis over the period of lease. Contin...

Q: od Company manufactures two products—15,000 units of Product Y and 7,000 units of Product Z. The com...

A: A batch level cost is a cost incurred in the manufacturing of goods in batches. The batches determin...

Q: The following transactions took place during January 2022 Jan 4 Purchased 24,000 shares of its own C...

A: Treasury shares are the shares which are bought back by the company which was previously issued. It ...

Q: ABC Company leases equipment to its customers under non-cancelable leases. On January 1,2019, ABC Co...

A: Workings: We know the formulas: Gross investment in the lease: It refers to the total amount of MLP ...

Q: Explain The various employee benefits in an organization: 1-Social Security : 2-Workers' Compensat...

A: The payments which is made by employers to its employees that are beyond the wages paid. Typically, ...

Q: 5. AA, BB and CC are partners with average capital balances during 20xx of P472,500, P238,650 and P1...

A: AA BB CC Interest on Partners' Capital (P 472,500 X 10%) 47,250 (P...

Q: Ellie, together with their respective profit and loss ratios, were as follows: 6. On June 30, 2020, ...

A: The partnership comes into existence when two or more persons agree to do the business and further s...

Q: Shady Rest Nursing Home has 1

A: The total cost of production of a good comprises of the total fixed cost of production and the total...

Q: Which of the following would NOT be included in the acquisition cost?

A: The acquistion cost is the total cost incurred in the acuistion of asset/asset...

Q: Company Y purchases a controlling interest in Company Z on January 1, 2019. Which of the following w...

A: Ans. C Company Y's Shareholders' Equity as well as Company Y's proportional share ofCompany Z's net...

Q: On January 1, 2021,

A: In this question, we have to calculate discontinued Operations.

Q: The balances for A and for B on July 1, 1987 are as follows A ($) B ($) Cash 100,000 50,00...

A: CALCULATION OF GOODWILL PURCHASE CONSIDERATION 70000 NCI ( 77500*20%) 15500 85500 IDENTI...

Q: Work through the NZ Corporate Governance Code and identify any concern in the following case Jo...

Q: Preliminary course. Classify each of the following accounts as an asset, liability, equity, revenue ...

A: let's understand some basics Expenses= An expense is the cost of operations that a company incurs to...

Q: Chuck Wagon Grills, Incorporated, makes a single product-a handmade specialty barbecue grill that it...

A: Fixed manufacturing overhead cost per unit = Total Fixed manufacturing overhead cost / Units produc...

Q: ABC Manufacturing Co. Balance sheet December 31, 2020 Assets Liabilities and Capital Cash 240,000 Ac...

A: ratio is calculated by each company in the industry and comparison is done at the various ratio with...

Q: Which of the following regarding the preparation of Consolidated Financial Statement is correct? A. ...

A: As per IFRS 10 consolidated financial statements are to be prepared to enable users to get overall u...

Question

The fixed costs incurred by a automotive shop are $200,000 per year. Variable costs are 60% of the annual revenue. If annual
revenue is $300,000, determine the annual profit (loss).

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1 : Working notes

VIEW

Step 2 : Calculation of annual profit or loss

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

A company is spending 70,000 per year for inspecting, 60,000 per year for purchasing, and 56,000 per year for reworking products. What is a good estimate of non-value-added costs? a. 126,000 b. 70,000 c. 56,000 d. 130,000
Describe the cost formula for a strictly fixed cost such as depreciation of 15,000 per year.
Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90. The companys monthly fixed expenses are $180,000. What is the companys break-even point in units? What is the companys break-even point in dollars? Prepare a contribution margin income statement for the month of October when they will sell 10,000 units. How many units will Cadre need to sell in order to realize a target profit of $300,000? What dollar sales will Cadre need to generate in order to realize a target profit of $300,000? Construct a contribution margin income statement for the month of August that reflects $2,400,000 in sales revenue for Cadre, Inc.
The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include: Fixed costs (salaries, tools): 64,900 per year Variable costs (supplies): 1.35 per maintenance hour Estimated usage by: Actual usage by: Required: 1. Calculate a single charging rate for the Maintenance Department. 2. Use this rate to assign the costs of the Maintenance Department to the user departments based on actual usage. Calculate the total amount charged for maintenance for the year. 3. What if the Assembly Department used 4,000 maintenance hours in the year? How much would have been charged out to the three departments?
How would each of the following costs be classified if units produced is the activity base? a. Salary of factory supervisor ($120,000 per year) b. Straight-line depreciation of plant and equipment c. Property rent of $11,500 per month on plant and equipment
The fixed cost at Harley motors are $1M annually. The main product has a revenue of $9.90 per unit and $4.50 variable cost What is the annual profit (or loss) if 150,000 units are sold?
Given problem: A company is going to buy a new machine for manufacturing its product. Four different machines are available. Money is worth 17% before taxes to the company. Using the annual cost method, what is the total annual cost of machine C?
The fixed costs within a machine shop are $3.4M annually. The main product this shop produces is priced at $15.00 per unit. Costs for material and labor are $6.50 per unit. What is the annual profit (or loss) if 300,000 units are sold?
Given problem: A company is going to buy a new machine for manufacturing its product. Four different machines are available. Money is worth 17% before taxes to the company. Using the annual cost method, what is the total annual cost of machine D?
Johnson's Plumbing's fixed costs are $700,000 and the unit contribution margin is $18. What amount of units must be sold in order to realize an operating income of $100,000?
A company has $25 per unit selling price, $7.00 per unit in variable manufacturing cost and $2.00 per unit in variable selling and administrative cost. The annual fixed manufacturing cost is $400,000. The annual fixed selling and administrative cost is $50,000.Complete the table below for each year. Assume a FIFO flow.
21) The initial cost for a factory is $ 6M. The major product of the factory has revenue of $100 per unit and $55 per unit as a variable cost. Based on the given, find the following: (a) QBE per year. (b) the annual profit if the expected sales between 100,000 and 200,000.