Profits have been decreasing for several years at Pegasus Airlines. In an effort to improve the company's p thinking about dropping several flights that appear to be unprofitable. A typical income statement for one round-trip of one such flight (flight 482) is as follows:
Q: Yarmouth Company produces a liquid solvent in two departments: Mixing and Finishing. Accounting…
A: The FIFO method considers the work done on the beginning inventory in the last period and completes…
Q: When setting a flexible budget, it is important to know the expected profit that a firm requires.…
A: A flexible budget is a budget that adjusts to the activity or volume levels of a company.
Q: Riverbed Company's Small Motor Division manufactures a number of small motors used in household and…
A: SOLUTION ;-ans 1Mimimum transfer price=Variabl cost per unit+opportunity cost$11+0ans $11As it has…
Q: The sales and cost data for two companies in the transportation industry are as follows: X…
A: CVP analysis is used to identify the changes in costs and volume affect a company's operating…
Q: On July 1, 2024, Clearwater Incorporated purchased 7,200 shares of the outstanding common stock of…
A: 01-Jul-247200 share purchase$ 152,000Total number of shares of Mountain corporation$ 36,000% of…
Q: Double Company produces three products - DBB-1, DBB-2, and DBB-3 from a joint process. Each product…
A: Net realisable value (NRV) = Future sales - further processing costsJoint cost = $ 4,120,000
Q: Builder Products, Incorporated, uses the weighted-average method in its process costing system. It…
A: Under weighted- average method the units in beginning work in process inventory are not considered…
Q: Required information [The following information applies to the questions displayed below.] The first…
A: FIFO METHOD :— Under this method, equivalent units is calculated by adding equivalent units in…
Q: Wildhorse Company uses the allowance method for estimating uncollectible accounts. Prepare journal…
A: The journal entries are prepared to record the transactions on regular basis. The allowance for…
Q: 2. Beluga Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4% when the…
A: Step 1The bonds are the debt instrument, the government or corporation generally issues these…
Q: Carlberg Company has two manufacturing departments, Assembly and Painting. The Assembly department…
A: Weighted average method is the method where for calculating the equivalent units of production the…
Q: Staley Co. manufactures computer monitors. The following is a summary of its basic cost and revenue…
A: Degree of operating leverage (DOL): DOL reflects the variable and fixed cost relationship of an…
Q: Bonita Co. sells product P-14 at a price of $47 a unit. The per-unit cost data are direct materials…
A: The net income or loss is calculated as difference between revenue and expenses. The fixed costs are…
Q: The straight-line method Question: Cost $134,400 Estimated Residual Value $12,500 Estimated Useful…
A: Straight Line Method of depreciation:In this this method, a fixed amount of depreciation would be…
Q: Compute the revised annual depreciation on each asset in 2022. Revised annual depreciation eTextbook…
A: DEPRECIATION EXPENSEDepreciation means gradual decrease in the value of an asset due to normal wear…
Q: Dividends Per Share Windborn Company has 10,000 shares of cumulative preferred 1% stock, $150 par…
A: Preferred Dividend :— It is calculated by multiplying face value of preferred stock with dividend…
Q: Determine the missing amounts. Total Manufacturing Costs Work in Process (January 1) Work in Pro (1)…
A: Manufacturing costs are the charges experienced by a business in converting raw materials or…
Q: What was the change in Cash?
A: Non-Current Assets are assets held by the organization for more than one accounting period for the…
Q: Carbex, Inc., produces cutlery sets out of high-quality wood and steel. The company makes a Standard…
A: When calculating a break-even point based on sales dollars, the following factors should be…
Q: Joe's Company produces a single product and has prepared this standard cost sheet for one unit of…
A: Lets understand the basics.Material price variance is a variance between the ratr at which material…
Q: Blend Inc. issued 500, $1,000 bonds at 102. Each bond was issued with two detachable stock warrants.…
A: A journal entry's goal is to show how a transaction changed the accounting equation, which reads:…
Q: Shortt Company has been approached by a customer who is offering a one-time-only special order to…
A: It is applicable only in the case of special customers/orders (Customers/orders which are not…
Q: Instructions a. Journalize the transactions. b. Post to the equity accounts. (Use J5 as the posting…
A: Authorized Ordinary Share: 500,000 (Face Value HK$20)Authorized 8% Preference Share: 10,000 (Face…
Q: Subject : Accounting
A: ABSORPTION COSTINGAbsorption Costing is a Cost managerial Accounting method in which All Cost…
Q: Cole England operates The Herbal Center, a marijuana dispensary, in Sacramento, California, as a…
A: Schedule C is used to report Profit or Loss from a sole proprietorship business or a profession in a…
Q: Q: From the following particulars, prepare the Profit and Loss Account of Bank of Community, for the…
A: The profit and loss statement refers to the financial statement used for calculating the profit or…
Q: Compute the ending inventory for Splish Company for 2022 through 2027 using the dollar-value LIFO…
A: LIFO is the method of determining the ending balance of inventory where the cost of inventory is…
Q: pute the MIRR statistic for Project I if the appropriate cost of capital is 12 percent. (Do not…
A: In this question, we will find out the MIRR (Modified internal rate of return) here we will find out…
Q: ww ances Financial data for Joel de Paris, Incorporated, for last year follow: Joel de Paris,…
A: Average operating assets :— It is calculated by dividing sum of beginning operating asset and ending…
Q: Lansing, Inc. provides the following information for one of its department's operations for June (no…
A: The production cost is prepared following five steps: -(1) Flow of Physical Units(2) Equivalent Unit…
Q: Miller & Miller sold bonds at a premium for $525,000 (premium of $25,000) eight years ago. a. The…
A: Journal Entry: Journal entry is the act of keeping records of transactions in an accounting journal.…
Q: Required: 1. Prepare a contribution format income statement. 2. Prepare a traditional format…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: Wildhorse Industries uses a process cost system. Products are processed first by Department A, then…
A: Work-in-progress is the term used to describe semi-finished goods, or partially finished goods that…
Q: Explain the concept of cash flow statement and its importance in assessing a company's liquidity and…
A: The cash flow statement is a type of financial statement that details a company's cash inflows and…
Q: Youngston Company (a massachusetts employer) wants to give a holiday bonus check of $750 to each…
A: In the given question we are provided with the data of Youngston Company which is a Massachusetts…
Q: In 2021, Margaret and John Murphy (age 66 and 68, respectively) are married taxpayers who file a…
A: AGI stands for aggregate gross income which is the sum total of income gained by an entity after…
Q: (a) Calculate the predetermined overhead rate for 2022, assuming Cullumber Manufacturing estimates…
A: The predetermined overhead rate is calculated as estimated overhead cost divided by estimated base…
Q: Using the following information, prepare a trial balance. Assume all asset, dividend, and expense…
A: Trial Balance: Trial balance is a statement in which closing balance of all ledger accounts are…
Q: Cycle Accessories manufacturers cellphone holders that can be mounted on the handle bars of most…
A: The least-square regression method computes the variable cost per unit (b) as follows: -X is the…
Q: Marvel Parts, Incorporated, manufactures auto accessories. One of the company's products is a set of…
A: Answer:- Formulas:- 1. Material price variance = (Actual price - standard price) x Actual quantity…
Q: In its 2014 income statement, Tow Inc., reported proceeds from an officer's life insurance policy of…
A: A tax obligation known as a deferred tax liability results from momentary discrepancies between the…
Q: product x has a contribution margin of $18 (20% of the sales price) and product Y has a contribution…
A: Break even point (BEP): Breakeven is the point where total expenses are equal to total revenue. at…
Q: Due to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Inc., has…
A: Total variable expenses$132,000Number of units 13,200Variable expenses per unit ($132,000…
Q: What is accrual accounting and why is it the preferred method for most organisations?
A: The following are two methods used for financial reporting as follows under:-.Cash accountingAccrual…
Q: a. What is the payback period on this project? 5 years b. What is the net present value, assuming a…
A: Net present value method : It is defined as the difference between the present value of cash inflows…
Q: Carlberg Company has two manufacturing departments, Assembly and Painting. The Assembly department…
A: The equivalent units are calculated on the basis of the percentage of the work completed during the…
Q: Due to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Inc., has…
A: The difference between the sales (or revenue) generated by your company and the variable costs…
Q: Provide the key factor auditors will have to review when deciding on the inherent risk within the…
A: Answer:- Inherent risk meaning:- The risk created by a financial statement inaccuracy or omission…
Q: Daniel Company uses a periodic inventory system. Data for the current year: beginning merchandise…
A: Under FIFO method the oldest products in inventory have been sold first.Under LIFO method the newest…
Q: Calculate the hourly ownership cost for the second year of operation of the 465-horsepower twin-…
A: The element of equipment cost is classified into ownership costs and operating costs. Ownership…
33.
Subject : - Accounting
Step by step
Solved in 3 steps with 2 images
- Profits have been decreasing for several years at Pegasus Airlines. In an effort to improve the company’s performance, the company is thinking about dropping several flights that appear to be unprofitable. A typical income statement for one round-trip of one such flight (flight 482) is as follows: Ticket revenue (170 seats × 40% occupancy × $220 ticket price) $ 14,960 100.0 % Variable expenses ($15.00 per person) 1,020 6.8 Contribution margin 13,940 93.2 % Flight expenses: Salaries, flight crew $ 1,500 Flight promotion 790 Depreciation of aircraft 1,650 Fuel for aircraft 5,300 Liability insurance 4,800 Salaries, flight assistants 1,400 Baggage loading and flight preparation 1,900 Overnight costs for flight crew and assistants at destination 600 Total flight expenses 17,940 Net operating loss $ (4,000 ) The…Profits have been decreasing for several years at Pegasus Airlines. In an effort to improve the company’s performance, the company is thinking about dropping several flights that appear to be unprofitable. A typical income statement for one round-trip of one such flight (flight 482) is as follows: Ticket revenue (165 seats × 40% occupancy × $220 ticket price)$ 14,520100.0%Variable expenses ($20.00 per person)1,3209.1Contribution margin13,20090.9%Flight expenses: Salaries, flight crew$ 1,800 Flight promotion760 Depreciation of aircraft1,800 Fuel for aircraft5,400 Liability insurance5,100 Salaries, flight assistants1,200 Baggage loading and flight preparation1,750 Overnight costs for flight crew and assistants at destination700 Total flight expenses18,510 Net operating loss$ (5,310) The following additional information is available about flight 482: Members of the flight crew are paid fixed annual salaries, whereas the flight assistants are paid based on the number of round trips…Profits have been decreasing for several years at Pegasus Airlines. In an effort to improve the company’s performance, the company is thinking about dropping several flights that appear to be unprofitable. A typical income statement for one round-trip of one such flight (flight 482) is as follows: Ticket revenue (175 seats × 40% occupancy × $240 ticket price) $ 16,800 100.0 % Variable expenses ($18.00 per person) 1,260 7.5 Contribution margin 15,540 92.5 % Flight expenses: Salaries, flight crew $ 2,000 Flight promotion 790 Depreciation of aircraft 1,700 Fuel for aircraft 5,500 Liability insurance 5,100 Salaries, flight assistants 1,300 Baggage loading and flight preparation 1,950 Overnight costs for flight crew and assistants at destination 500 Total flight expenses 18,840 Net operating loss $ (3,300 ) The…
- Dropping or Retaining a Flight Profits have been decreasing for several years at Pegasus Airlines. In an effort to improve the company’s performance, the company is thinking about dropping several flights that appear to be unprofitable. A typical income statement for one round-trip of one such flight (flight 482) is as follows: The following additional information is available about flight 482: a. Members of the flight crew are paid fixed annual salaries, whereas the flight assistants are paid based on the number of round trips they complete. b. One-third of the liability insurance is a special charge assessed against flight 482 because in the opinion of the insurance company, the destination of the flight is in a “high-risk” area. The remaining two-thirds would be unaffected by a decision to drop flight 482. c. The baggage loading and flight preparation expense is an allocation of ground crews’ salaries and depreciation of ground equipment. Dropping flight 482 would have no effect on…Profits have been decreasing for several years at Pegasus Airlines. In an effort to improve the company’s performance, consideration is being given to dropping several flights that appear to be unprofitable. A typical income statement for one such flight (Flight 482) follows:Ticket revenue (175 seats × 40% occupancy × $400 ticket price) $ 28,000 100.0%Less: Variable expenses ($15 per person) 2,100 7.5 Contribution margin 25,900 92.5%Less: Flight expenses: Salaries, flight crew 3,600 Flight promotion 1,500 Depreciation of aircraft 3,100 Fuel for aircraft 13,600 Liability insurance 8,400 Salaries, flight attendants 1,000 Baggage loading and flight preparation 3,400 Overnight costs for flight crew and attendants at destination 600Total flight expenses 35,200Net operating loss $ (9,300)The following additional information is available about Flight 482:a. Members of the flight crew are paid fixed annual salaries, whereas the…Due to heavy rains brought by La Niña, the management of the company is contemplating to close club operations of the airline temporarily. The expected demand for the club was reduced, which is expected to last for four (4) months. Assume the typical monthly operating revenues and costs of the club operations: Selling price per membership Variable costs per membership Contribution margin Fixed costs per month Fixed costs avoided if stop operations Additional costs during the shutdown period for four (4) months Estimated restarting costs P400 270 130 P150,000 70,000 25,000 50,000 If they continue operating, the company will be forced to reduce the membership selling price by 12.50%. The demand for the club is 4,000 memberships. 7. Shutdown costs 8. Shutdown savings 9. Shutdown point 12 Task Performance 1 *Property of STI Page 2 of 3 STI BM2021 10. Net advantage of continued/shut down operations 11. Should the club operations shut down or continue?
- Due to heavy rains brought by La Niña, the management of the company is contemplating to close club operations of the airline temporarily. The expected demand for the club was reduced, which is expected to last for four (4) months. Assume the typical monthly operating revenues and costs of the club operations: Selling price per membership Variable costs per membership Contribution margin Fixed costs per month Fixed costs avoided if stop operations Additional costs during the shutdown period for four (4) months Estimated restarting costs P400 270 130 P150,000 70,000 25,000 50,000 If they continue operating, the company will be forced to reduce the membership selling price by 12.50%. The demand for the club is 4,000 memberships. 7. Shutdown costs 8. Shutdown savings 9. Shutdown pointThe Draper Company is considering dropping its Dream bug toy due to continuing losses. Revenue and cost data on the toy for the past year follow: Sales of 15,000 units P 150,000 Variable expenses 120,000 Contribution margin 30,000 Fixed expenses 40,000 Net operating loss (P 10,000) If the toy were discontinued, then Draper could avoid P8,000 per year in fixed costs. 1. Under the given conditions, the change in annual operating income from discontinuing the production and sale of Doombugs would be: 2. Assuming all other conditions stay the same, at what level of annual sales of Doombugs (in units) should Draper be indifferent to discontinuing Doombugs or continuing the production and sale of Doombugs? 3. Suppose that if the Doombug toy is dropped, the production and sale of other Draper toys would increase so as to generate a P16,000 increase in the contribution margin received from these…Pac Coast Airlines has been incurring losses for the past few years. In an attempt to improve the overallfinancial performance of the company, the general manager is considering discontinuing several of theflights. Flight 102 from Atlanta, Georgia to Paris, France is one such flight. The contribution marginstatement for this particular flight is shown below.Pac Coast AirlinesContribution Margin Statement For the Year Ended December 31, 2019Flight 102 Revenue $2,000,000Less: Variable Costs 1,500,000Contribution Margin 500,000Less: Fixed Costs 800,000Income from Operations ($300,000) The following additional information is also available regarding flight 102: 80% of the segments fixed costs will remain with the company if the flight is discontinued. The remaining20% of the fixed costs will no longer be incurred by the company if the flight is discontinued. If the flight is discontinued, contribution margin will increase by a total of $200,000 in other segments ofPac Coast Airlines.Should…
- The Draper Company is considering dropping its Dream bug toy due to continuing losses. Revenue and cost data on the toy for the past year follow: Sales of 15,000 units P 150,000 Variable expenses 120,000 Contribution margin 30,000 Fixed expenses 40,000 Net operating loss (P 10,000) If the toy were discontinued, then Draper could avoid P8,000 per year in fixed costs. 1. Under the given conditions, the change in annual operating income from discontinuing the production and sale of Doombugs would be: A) P 30,000 decrease B) P 10,000 increase C) P 22,000 decrease D) P 18,000 increase 2. Assuming all other conditions stay the same, at what level of annual sales of Doombugs (in units) should Draper be indifferent to discontinuing Doombugs or continuing the production and sale of Doombugs? A) 20,000 B) 18,000 C) 6,000 D) 4,000…Bovine Company, a wholesale distributor of umbrellas, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: Sales $ 2,070,000 Variable expenses 895,880 Contribution margin 1,174,120 Fixed expenses 1,319,000 Operating loss $ (144,880 ) In an effort to isolate the problem, the president has asked for an income statement segmented by geographic market. Accordingly, the Accounting Department has developed the following: Geographic Market South Central North Sales $ 607,000 $ 806,000 $ 657,000 Variable expenses as a percentage of sales 50 % 36 % 46 % Traceable fixed expenses $ 320,000 $ 480,000 $ 307,000 Required:1. Prepare a contribution format income statement segmented by geographic market, as requested by the president. 2-a. The company’s sales manager believes that sales in the Central…A typical income statement for one round-trip of one such flight (flight 482) is as follows: Ticket revenue (195 seats x 40% occupancy x $220 ticket price) Variable expenses ($18.00 per person) Contribution margin Flight expenses: Salaries, flight crew Flight promotion Depreciation of aircraft Fuel for aircraft Liability insurance Salaries, flight assistants Baggage loading and flight preparation Overnight costs for flight crew and assistants at destination Total flight expenses Net operating loss $ 17,160 1,404 15,756 $ 1,900 770 1,600 5,500 5,100 1,200 1,800 Financial (disadvantage) 700 18,570 $ (2,814) 100.0% 8.2 91.8% The following additional information is available about flight 482: a. Members of the flight crew are paid fixed annual salaries, whereas the flight assistants are paid based on the number of round trips they complete. b. One-third of the liability insurance is a special charge assessed against flight 482 because in the opinion of the insurance company, the…