Which costing method should be presented

Assignment Help Financial Accounting
Reference no: EM132940238

Stacy Lynn, Inc. (SLI) is a manufacturer of rice cookers. The rice cookers sell for $45 per unit; the sales were 3,600 units in the current year. SLI has 400 units available for sale at the end of the current year and is projecting sales of 4,400 units next year. SLI is planning the same production level for the current year as last year - 4,000 units. The variable manufacturing costs for SLI are $16 and the variable selling costs are only $.50 per unit. The fixed manufacturing costs are $100,000 per year and the fixed selling costs are only $500 per year. Assume that beginning inventory was -0-.

Stacy Ann Lynn, the great granddaughter of the company's founder is the current CEO/President of the company, which is still a family-owned business. The past several years have been especially difficult due to price-pressure from Chinese imports. At the moment, all that Stacy believes she can do is to try to keep the company running until the economy improves. But, the company needs an immediate infusion of cash. So, she has decided to ask her bank for a large line of credit to maintain operating viability for the foreseeable future.

Based on the information provided in the narrative above, and the financial statements below, post a response to each Part below:

Problem 1:  If Stacy Lynn wants to show the bank the maximum profit over the previous 2-year period, which costing method should be presented?

Problem 2:  But, the bank requires that all financial statements conform to Generally Accepted Accounting Principles (GAAP). Based on that requirement, which costing method should be presented?

 

Reference no: EM132940238

Questions Cloud

What is the balance sheet and types of accounts : What is the balance sheet and types of accounts listed on the balance sheet? What is the differences in current and long-term assets
What other actions could take to achieve the planned : If the vendor states that the cost for the T-shirts will be $5.00, what other actions could you take to achieve the planned markup percentage?
What are the monthly payments : If we take out a $240,000, 30-year mortgage, what are the monthly payments at 4.2% compounded monthly?
Give six examples of policies designed to maintain security : The organisation must act within the legislative, Give six examples of policies and procedures designed to maintain security and confidentiality of information.
Which costing method should be presented : If Stacy Lynn wants to show the bank the maximum profit over the previous 2-year period, which costing method should be presented?
Determine the amount of depreciation expense : Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2 and Year 3 by (a) the straight-line method
Show how the available cash would be distributed : The partners decide to liquidate the partnership. Assuming that P650,000 is available for the first distribution, show how available cash would be distributed
What is annual total inventory management costs of cheese : Cheeseburger and Taco Company purchases 14,121 boxes of cheese each year.What is the annual total inventory management costs of cheese inventory.
Prepare a table of cash flows and discount factors : Prepare a table of cash flows , discount factors and present values as relevant for calculation of the net present value (NPV), and calculate the project's NPV

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd