M10-Chp-02-1-Man.-Acct.-Concepts-2010-0518(2)

M10-Chp-02-1-Man.-Acct.-Concepts-2010-0518(2) - Chapter...

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1 Chapter 2- Managerial Accounting and Cost Concepts. Summer, 2010. Edited May 18, 2010. Copyright © 2010, Dr. Howard Godfrey This file contains illustrative problems that will be used in the lecture to illustrate important concepts and procedures. Copyright 2010. Dr. Howard Godfrey - M10-Chp-02-1-Man. Accounting Concepts-2010-0518
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The next few files involve problems we will be working in this chapter, and later in the semester. 2
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Fixed and Variable Costs Ener the missing information in the shaded cells. Case A Case A-2 Case B Case C Selling price per unit $8.00 $10.00 Variable cost per unit $6.00 $5.00 Contribution margin $2.00 Fixed Costs $100,000 $200,000 Number of units sold 100,000 110,000 80,000 50,000 Revenue $800,000 $500,000 Variable costs ($600,000) Contribution margin Fixed Costs ($100,000) Net income (Loss) $160,000 Basic Information Income Statement
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4 Selling price per book $150 Bookstore's cost per book $100 Books Bought this month 1,200 Books sold this month 1,000 Rent and salary exp. per mo. $45,000 Income Statement Revenue (1,000 at $150) $150,000 Cost of books purchased $120,000 Gross Profit (Margin) $30,000 Rent and salaries $45,000 Net Income (Loss) ($15,000) Do you agree Bookstore Began Business This Month
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5 Sales Cost of Goods Sold Beginning Inventory + Inventory purchased = Inventory available - Ending Inventory = Cost of goods sold Gross Profit (Margin) Bookstore
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6 Sales (Bookstore Problem) $150,000 Cost of Goods Sold Beginning Inventory $0 + Inventory purchased $120,000 Inventory Available $120,000 - Ending Inventory ($20,000) Cost of goods sold $100,000 Gross Margin $50,000 Rent and Salary Expense ($45,000) Net Income for First Month $5,000
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Repeat the bookstore problem, except assume the sales are increased by 10%. 7
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8 Sales (Bookstore Problem) $150,000 Cost of Goods Sold Beginning Inventory $0 + Inventory purchased 120,000 Inventory Available 120,000 - Ending Inventory (20,000) Cost of goods sold 100,000 Gross Margin 50,000 Rent and Salary Expense (45,000) Net Income for First Month $5,000
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M10-Chp-02-1-Man.-Acct.-Concepts-2010-0518(2) - Chapter...

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