Zeflax manufactures plastic bottles for bikes that the

Assignment Help Accounting Basics

Reference no: EM13572195

Zeflax manufactures plastic bottles for bikes that the company sells for $4.00 per bottle. Last year the company produced 230,000 bottles and soled 200,000 bottles. This year Zeflax produced 200,000 bottles and sold 230,000. In both years Zeflaxs fixed manufacturing cost was 500,00 and its variable manufacturing cost was 1.00 per bottle. The president of Zeflax commented, I don't understand these crazy financial statements. Our prices and costs didn't change, we sell more bottles this year and we show lower income. Something has gone wrong.

a. prepare income statements for Zeflax for last year and this year using absorption costing. Assume Zeflaxs only costs are the fixed and varible manufacturing costs given in the problem.

b. prepare income statements for Zeflax for last year and this year using variable costing. Assume Zeflaxxs only costs are the fixed and variable manufacturing costs given in the problem.

c. explain to the president of Zeflax in nontechnical terms why the financial statements prepared by the accountant in part a and b are not in error. In other words, explain to the president why net income fell this year from last year even though Zeflax sold more botles.

Reference no: EM13572195

Questions Cloud

A companys required rate of return on capital budgeting : 1. a companys required rate of return on capital budgeting projects is 15. the company is considering an investment

Corp x has a single facility that it uses for : corp x has a single facility that it uses for manufacturing sales and administrative activities. should the companys

Sorenson corps expected year-end dividend is d1 400 its : sorenson corp.s expected year-end dividend is d1 4.00 its required return is rs11 its dividend yield is 6 and its

A company has a decision to make between two investment : a company has a decision to make between two investment alternatives. the company requires a 10 return on investment.

Zeflax manufactures plastic bottles for bikes that the : zeflax manufactures plastic bottles for bikes that the company sells for 4.00 per bottle. last year the company

In a short essay compare and contrast childhood egocentrism : 1. in a short essay compare and contrast childhood egocentrism and adolescent egocentrism.2. in a bulleted list name

The insurance company recovered 8000 describe how the : the abc company had crime coverage in the amount of 5000. following a covered crime loss of 10000. the insurance

Summer tyme inc is considering a new 5-year expansion : summer tyme inc. is considering a new 5-year expansion project that requires an initial fixed asset investment of 1.296

You transferred any unused bond proceeds to the debt : you are a hometown accountant. the capital project fund has just been created to account for resources received and

User Account

All Pages