Reference no: EM132716137
Question - J. Murphy operates two restaurants one in Greenville and one in Cleveland. He operates under the name of Murphy's Healthy Fast Foods. Below is an income statement formatted in the traditional format. Jake would like a little more information than the traditional format provides. He has asked you, his accountant and tax advisor, to break his business down by the location so that he can see the operating results of each. You know just what he needs, which is a segmented income statement.
Below is the income statement in the traditional format.
Sales $1,000,000
Cost of goods sold 532,500
Gross margin 467,500
Sales and administrative expenses 435,000
Net operating income 32,500
After careful examination and the help of your old managerial text (you were wise and kept it) you have determined the following:
1. Cleveland sales are 65% of total sales.
2. Greenville sales are 35% of total sales.
3. The Cleveland variable expense ratio is 55%.
4. The Greenville variable expense ratio is 50%.
5. The traceable fixed costs to Cleveland are $260,000.
6. The traceable fixed costs to Greenville are $140,000.
7. Common fixed costs total $35,500.
Required -
1. Prepare a segmented income statement for Murphy's Healthy Fast Foods
2. Compute the overall contribution margin ratio.
3. Compute the overall breakeven sales dollars.
4. Compute the sales dollars needed to achieve an operating profit of $50,000.
5. Prepare a segmented income statement that results in a net operating income of $50,000.
Assume that variable expense ratios remain unchanged from the prior year. (hint, use the target profit formula for this.
Compute the pbp and arr
: Compute the 1) PBP, 2) ARR, with annual depreciation of 14,000, 3) NPV, and 4) IRR. 5) Should the equipment be bought? Explain
|
Character or disposition and emotional
: Which one of the following appeals would you focus on in order to convince your CEO that a four-day workweek is beneficial?
|
When should a firm stop using debt to finance
: Question - Using Financial Leverage Effectively. When should a firm stop using debt to finance its operations or asset purchases
|
Tighter security and ensuring business continuity
: Web server auditing can go a long way in enforcing tighter security and ensuring business continuity.
|
Compute the overall contribution margin ratio
: The Cleveland variable expense ratio is 55%. The traceable fixed costs to Greenville are $140,000. Compute the overall contribution margin ratio
|
How much is the depreciation expense
: Cambridge has a December 31 fiscal year end. Using the straight-line method, how much is the 2019 depreciation expense
|
Explain why some organizations are accepting
: Explain why some organizations are accepting and other organizations are rejecting the use of Bitcoins as a standard form of currency.
|
Prepare the journal entry to record the redemption
: On January 1, 2018, Banno Corporation issued $1,500,000 Face Value of 10% coupon bonds. Prepare the journal entry to record the redemption
|
Research emerging enterprise network applications
: Research emerging enterprise network applications and describe 3 that you think are most interesting and briefly explain why you believe this.
|