BUSINESS COLLEGE

Pederson Enterprises produces giant stuffed bears. Each bear consists of $12 of variable costs and $9 of fixed costs and sells for $45. A wholesaler offers to buy 8,000 units at $14 each, of which Pederson has the capacity to produce. Pederson will incur extra shipping costs of $1 per bear. Determine the incremental income or loss that Pederson Enterprises would realize by accepting the special order.

Answers

Answer 1

Answer:

Pederson enterprise would realize $8,000 incremental income by accepting the special Oder.

Explanation:

Pederson Enterprise

Incremental revenue (8,000 ×$14)

$112,000

Incremental variable costs ($12 ×8,000). (96,000)

Incremental shipping costs

($1×8,000) (8,000)

Incremental profit if special order accepted. $8,000

Pederson enterprise would realize $8,000 incremental income by accepting the special Oder as shown in the table above.

Related Questions

The following data from the just completed year are taken from the accounting records of Mason Company: Sales$658,000 Direct labor cost$83,000 Raw material purchases$135,000 Selling expenses$106,000 Administrative expenses$46,000 Manufacturing overhead applied to work in process$202,000 Actual manufacturing overhead costs$224,000 InventoriesBeginningEnding Raw materials$8,800$10,200 Work in process$5,900$20,500 Finished goods$74,000$25,100 Required: 1. Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials. 2. Prepare a schedule of cost of goods sold. Assume that the company's underapplied or overapplied overhead is closed to Cost of Goods Sold. 3. Prepare an income statement.
The amount of money that a seller is willing to accept in exchange for a product, at a given time and under given circumstances, is called the A) revenue. B) income C) discount. price. E) breakeven quantity.
If Congress ends an investment tax credit that used to subsidize domestic investment, how would this affect the market for loanable funds in an open economy context?
One of your customers is delinquent on his accounts payable balance. you’ve mutually agreed to a repayment schedule of $500 per month. you will charge 1.40 percent per month interest on the overdue balance. if the current balance is $13,000, how long will it take for the account to be paid off?
Gebler Company sells a product for $ 70 per unit. Variable costs are $ 25 per unit, and fixed costs are $ 2 comma 500 per month. The company expects to sell 570 units in September. Prepare an income statement for September using the contribution margin format.

Accountants focus on creating financial statements, whereas finance professionals mostly use these statements to evaluate a firm and answer questions about its performance. Indicate which of the following financial statement would be the most helpful. a. How much cash is a firm generating through operating, investing, and financing activities?
b. How much debt and equity has the firm issued to finance its assets?

If compensation for senior management is based on short-term performance of the firm, in the short run the firm is likely to:

a. Overstate its earnings
b. Understate its earnings

Answers

Answer:

1. The financial statement that would be the most helpful for a finance professional to evaluate how a firm's performance is:

a. How much cash is a firm generating through operating, investing, and financing activities?

2. If compensation for senior management is based on short-term performance of the firm, in the short run the firm is likely to:

a. Overstate its earnings

Explanation:

This financial statement is provided by the Statement of Cash Flows. The statement provides the performance report about a company's liquidity and long-term solvency. The information about how much debt and equity the firm has issued to finance its assets will be obtained from the statement of financial position (known as the balance sheet). This statement does not show the performance of a firm, but its financial position as of a given date.

The Callie Company has provided the following information: Operating expenses were $244,000; Cost of goods sold was $378,000; Net sales were $940,000; Interest expense was $47,000; Gain on sale of a building was $84,000; Income tax expense was $142,000. What was Callie's gross profit

Answers

Answer:

Callie's Gross Profit is $562000

Explanation:

Gross profit is the profit earned by a business after deducting the costs associated with producing or selling its goods (for manufacturing and trading businesses) or the costs associated with providing the services (for service businesses) from the net revenue.

It is the profit from the trading section of the business before deducting the operating and financing expenses of the business and before adding any other income.

The gross profit is simply calculated as follows,

Gross Profit = Net Revenue - Cost of Goods Sold

Callie's gross profit = 940000 - 378000

Callie's Gross Profit = 562000

Supriya invested $14,320 in a highly rated ETF. At the end of four years, she had $18,434. What was her annual effective yield on this investment

Answers

Answer:

6.517%

Explanation:

Present Value PV = $14,320

Future Value FV = $18,434

Number of period Nper = 4

Annual effective yield = Rate(Nper, Pmt, Pv, -Fv)

Annual effective yield = Rate(4, 0, 14320, -18434)

Annual effective yield = 0.06517

Annual effective yield = 6.517%

Bylie Company has an old factory machine that cost $50,000. The machine has accumulated depreciation of $28,000. Bylie has decided to sell the machine. a) What entry would Bylie make to record the sale of the machine for $25,000 cash?

b) What entry would Bylie make to record the sale of the machine for $15,000 cash?

Answers

Answer:

Cash $25000 Dr

Accumulated depreciation-Machine $28000 Dr

Machine $50000 Cr

Gain on disposal $3000 Cr

Cash $15000 Dr

Accumulated depreciation-Machine $28000 Dr

Loss on disposal $7000 Dr

Machine $50000 Cr

Explanation:

The net book value of the machine is cost - accumulated depreciation.

Thus, the NBV = 50000 - 28000 = $22000

a. The gain on disposal = Cash received - NBV

Gain on disposal = 25000 - 22000 = $3000 gain

b. The gain on disposal = 15000 - 22000 = -$7000 (loss on disposal)

The Destin Company has one temporary difference of $160 caused by accelerated tax depreciation on 12/31/14. The difference will reverse evenly over the next four years. Tax Rates are 20% in 2014, 30% in 2015, and 40% in 2016 and beyond. Pretax book income in 2014 is $1,000. What is 2014 Income Tax Expense?

Answers

Answer: = $168

Explanation:

Destin Company had a $1,000 income in 2014 but also a temporary difference of $160.

This means that they were taxed on the income less the temporary difference.

= 1,000 - 160

= $840

Tax Expense = 840 * 20%

= $168

A profit margin of 10% indicates that: Multiple Choice for every $1 in net income, the company generates $0.10 in net sales. for every $1 in net income, the company generates $0.90 in net sales. for every $1 in net sales, the company generates $0.10 in net income. for every $1 in net sales, the company generates $0.90 in net income.

Answers

Answer:

A profit margin of 10% indicates that:

for every $1 in net sales, the company generates $0.10 in net income.

Explanation:

Company B's profit margin measures the degree to which the company makes extra money after deducting the expenses from the sales revenue. When expressed as a percentage, it indicates how many cents of profit has been generated for each dollar of sales.

Final answer:

A profit margin of 10% denotes that for every $1 in net sales, the company produces $0.10 in net income. It is calculated by dividing the net income by the net sales and multiplying the result by 100.

Explanation:

A profit margin of 10% indicates that for every $1 in net sales, the company generates $0.10 in net income. This is because the profit margin is calculated by dividing the net income by the net sales and then multiplying the result by 100 to get a percentage. In this case, a profit margin of 10% signifies that the company is able to generate 10 cents of profit from each dollar of sales.

Learn more about Profit Margin here:

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