# Quiz 1 - Quiz 1 Solutions/Mark Assignments Instructions...

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The only selling expenses were a commission of \$4 per unit sold and advertising totaling \$295,000. There were no beginning or ending finished goods inventories. Required: prepare an income statement for external users. Acer Income Statement For the Year ending December 31, 19xx Sales (200,000 x \$60) \$12,000,000 ½ Less: Cost of goods sold (\$200,000 x \$47) 9,400,000 ½ Gross margin \$ 2,600,000 ½ Less: Operating expenses Commissions (200,000 x \$4) \$800,000 ½ Advertising expenses 295,000 1,095,000 ½, ½ Income before taxes \$ 1,505,000 ½ Marks deducted for format errors. b. The Credit Valley Regional Hospital has collected data on all of its activities for the past seven months. Data for the admissions operation follows: Month Cost Hours of Operation P3-7 - 3 marks September 1998 \$139,000 3,400 October 1998 128,500 3,100 November 1998 104,000 2,400 December 1998 132,000 3,200 January 1999 166,000 3,600 February 1999 133,000 2,660 March 1999 159,000 3,400 Required: using the high-low method, calculate the variable rate per hour and the fixed cost for the admissions operations. V = (166,000 - 104,000)/(3,600 - 1,200) = \$51.67
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Quiz 1 - Quiz 1 Solutions/Mark Assignments Instructions...

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