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Jim Wright is considering opening a Kwik Oil Change Center. He estimates that the following costs will be incurred during his first year of operations: Rent $6000, Depreciation on equipment $7000, Wages $16,400,Motor oil $1.80 per quart. He estimates that each oil change will require 5 quarts of oil. Oil filters will cost $3.00 each. He must also pay the Kwik Corporation a franchise fee of $1.40 per oil change, since he will operate the business as a franchise. In addition, utility costs are expected to behave in relation to the number of oil changes as follows:Number of Oil Changes Utility Costs4000 60006000 73009000 960012000 1260019000 15000
Mr. Wright anticipates that he can provide the oil change service with a filter at $20.00 each.
(a) using the high low method, determine utility costs. In addition, determine the variable costs per unit and total fixed costs.(b) 1. Determine the break even point in number of oil changes and sales dollars.2. If the current level of oil changes is 6600, by what percentage can the number of oil changes decrease before Jim has to worry about having a net loss?
A corporation had 50,000 shares of $20 per value common stock outstanding on July 1. Later that day the board of directors declared a 10% stock dividend when the market value of each share was $27. The entry to record this dividend is:
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The Federal Circuit Court has ruled that wholesale distribution and retail sales, even of the same product, constitutes distinct businesses. In a case involving a taxpayer from another circuit, the Tax Court has ruled that such costs invariably sh..
An introduction to internal controls, explaining in your own words the two primary goals of internal control.
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Would the use of accelerated depreciation in the financial statements be more conservative or less conservative than the current practice of using the straight-line method? Explain.
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Analysts often take a short cut in estimating a firm's cash from operations: they just add depreciation back to net income. What is the greatest shortcoming of this approach?
On jan 1 07 daniels company contained these liability accts. Accts payable 42,500 Sales tax payable 6,600 Unearned service revenue 19,000 During january
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Prepare the Journal Entries in the General Journal, Post Journal Entries to the General Ledger, Post Adjusting Entries to the General Ledger
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