Accounting Work

There are 6 total questions for accounting……..You will see it when you open attached document that is attached. It a word document six different questions that needs to be solved

1.

(TCO 7) Elliot’s Escargots sells commercial and home snail extraction tools and serving pieces. Currently, the snail extraction line of products takes up approximately 50 percent of the company’s retail floor space. The CEO of Elliot’s wants to decide if the company should continue offering snail extraction tools or focus only on serving pieces. If the snail extraction tools are dropped, salaries and other direct fixed costs can be avoided and serving piece sales would increase by 13 percent. Allocated fixed costs are assigned based on relative sales.

 

 

 

 

   Other

																			Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	Snail Extraction	Serving
Tools	Pieces		Total
Sales	$1,200,000	$800,000	$2,000,000
Less cost of goods sold	700,000	500,000	1,200,000
Contribution margin	500,000	300,000	800,000
Less direct fixed costs:
Salaries	175,000	175,000	350,000
		Other	60,000	60,000	1 20,000
Less allocated fixed costs:
Rent	14,118	9,882	24,000
Insurance	3,529	2,471	6,000
Cleaning	4,117	2,883	7,000
Executive salary	76,470	53,530	130,000
7,058	4,942	12,000
Total costs	340,292	308,708	649,000
Net income	$159,708	($ 8,708)	$151,000

Prepare an incremental analysis in good form to determine the incremental effect on profit of discontinuing the snail extraction tool line.

2. Paschal’s Parasailing Enterprises has estimated that fixed costs per month are $115,600 and variable cost per dollar of sales is $0.35 (6 points).
 
What is the break-even point per month in sales?
What level of sales is needed for a monthly profit of $70,000?
For the month of August, Paschal’s anticipates sales of $600,000. What is the expected level of profit?

3. (TCO 6) Princess Cruise Lines has the following service departments; concierge, valet, and maintenance.  Expense for these departments are allocated to Mediterranean and Trans
Atlantic cruises.  Expenses for the departments are totaled (both variable and
components are combined) and as follows:
 
Concierge         $1,500,000
Valet                 $2,750,000
Maintenance      $2,250,000
 
The sea miles logged are 5,000,000 for the Mediterranean and 20,000,000 for the Trans-Atlantic voyages.
 
Based upon the sea miles logged, allocate the service department costs

4. Thurman Munster, the owner of Adams Family RVs, is considering the addition of a service center his lot. The building and equipment are estimated to cost $1,

100,000

and both the building and equipment will be depreciated over 10 years using the straight-line method. The building and equipment have zero estimated residual value at the end of 10 years. Munster’s required rate of return for this project is 12 percent. Net income related to each year of the investment is as follows:

 

 

 

 

 

 

   Other

 

 

Revenue	$450,000
Less:
Material Cost	$60,000
Labor	100,000
Depreciation	110,000
10,000	280,000
Income before taxes	170,000
Taxes at 40%	68,000
Net Income	$102,000

(A) Determine the net present value of the investment in the service center. Should Munster invest in the service center?

(B) Calculate the internal rate of return of the investment to the nearest ½ percent.

(C) Calculate the payback period of the investment.

(D) Calculate the accounting rate of return

5. The following information relates to Vice Versa Ventures for calendar year 20XX, the company’s first year of operations:

$5

Units produced	20,000
Units sold	17,000
Selling price per unit	$3 5
Direct material per unit		$5
Direct labor per unit
Variable manufacturing overhead per unit	$2
Variable selling cost per unit	$3
Annual fixed manufacturing overhead	$160,000
Annual fixed selling and administrative expense	$80,000

a. Prepare an income statement using full costing.

b. Prepare an income statement using variable costing.

6. Leekee Shipyards has a new barnacle removing product for ocean going vessels. The company invests $1,000,000 in operating assets and plans to produce and sell 300,000 units per year. Leekee wants to make a return on investment of 20% each year. Leekee needs to know what price to charge for this product.

Use the absorption costing approach to determine the markup necessary to make the desired return on investment based on the following information:

 

Total

 

 

 

 

 

 

Per Unit
Direct Materials	$2.00
Direct Labor	$1.50
Variable Manufacturing Overhead	$1.00
Fixed Manufacturing Overhead	$100,000
Variable Selling and Administrative Expense	$0.10
Fixed Selling and Administrative Expense	$100,000