What is the amount of operating profits that are expected

Assignment Help Financial Accounting

Reference no: EM13906691

Al's Brake Shop had sales revenues and operating costs in 2014 of $650,000 and $525,000, respectively. In 2015, Al's plans to expand the services it provides to customers to include lubrication services. Revenues are expected to increase by $85,000 and operating costs by $50,000 as a result of this expansion. Assuming that there are no changes to the existing brake business, what is the amount of operating profits that are expected be earned in 2015?

a. $125,000

b. $85,000

c. $160,000

d. $35,000

Reference no: EM13906691

Questions Cloud

Consider when picking out an inventory accounting system : What would be the reason why LIFO is no longer allowed as an inventory accounting method under GAAP? Discuss the items to consider when picking out an inventory accounting system.

With the revenue recognition accounting principle of VSOE : With the revenue recognition accounting principle of VSOE. Give an overview of how this method affects revenue recognition for companies selling bundled contracts.

Consider the time value of money when making decisions : Why it is important for analysis purposes to consider the time value of money when making decisions.

What financial statement does it show up on : What is the Cost of Goods Sold? What financial statement does it show up on? How does it relate to the “Matching Principle” in accounting?

What is the amount of operating profits that are expected : Al's Brake Shop had sales revenues and operating costs in 2014 of $650,000 and $525,000, respectively. In 2015, Al's plans to expand the services it provides to customers to include lubrication services. Revenues are expected to increase by $85,000 a..

Acts in the best interest of the shareholders : Some people do not believe that the board of directors always acts in the best interest of the shareholders? What would you do to ensure that the board of directors acts properly with respect to the shareholders?

Pending law suits in the financial statements : Why not report the possible liabilities from pending law suits in the financial statements rather than the notes to the financial statements?

Marketing department prepared first-quarter sales forecast : Tim's Temple Tools sells small eyeglass repair tools for $1.25 each. Tim's marketing department prepared the following first-quarter sales forecast (in units): Required: Prepare Tim's sales budget for each month of the quarter. January February March..

Period-end financial reporting process : Consult Paragraphs 26–27 of PCAOB Auditing Standard No. 5. Do you believe that the period-end financial reporting process should always be evaluated by auditors as a significant and material process during an audit of internal control? Why or why not..

User Account

All Pages