costacctg13_sm_ch05

50 milk fruit juice 3milk fruit juice302 bakedgoods

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Unformatted text preview: tually mean reducing the number of sect ions in each grade and letting teachers go, and if this invo lves the loss of experienced teachers, that could cause long­term damage to the school. Unrelated to the excess capacit y issue, but with the aim o f improving the school’s economics, he should consider doing away wit h expensive activit ies like the ice hockey program which raises the cost per student substantially, even after a large fee is charged fro m students who choose to play the sport. 5­13 5­23 (30 min.) ABC, retail product­line profitability. 1. The simple costing system (Panel A of Solut ion Exhibit 5­23) reports the fo llowing: Baked Milk & Frozen Goods Fruit Juice Products Total Revenues $57,000 $63,000 $52,000 $172,000 Costs Cost of goods sold 38,000 47,000 35,000 120,000 Store support (30% of COGS) 11,400 14,100 10,500 36,000 Total costs 49,400 61,100 45,500 156,000 Operating inco me $ 7,600 $ 1,900 $ 6,500 $ 16,000 Operating inco me ÷ Revenues 2. 13.33% 3.02% 12.50% 9.30% The ABC system (Panel B o f Solut ion Exhibit 5­23) reports the fo llowing: Baked Milk & Frozen Goods Fruit Juice Products Total Revenues $57,000 $63,000 $52,000 $172,000 Costs Cost of goods sold 38,000 47,000 35,000 120,000 Ordering ($100 × 30; 25; 13) 3,000 2,500 1,300 6,800 Delivery ($80 × 98; 36; 28) 7,840 2,880 2,240 12,960 Shelf­stocking ($20 × 183; 166; 24) 3,660 3,320 480 7,460 Customer support ($0.20 × 15,500; 20,500; 7,900) 3,100 4,100 1,580 8,7...
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This note was uploaded on 10/11/2010 for the course ACCT 321 taught by Professor Cole during the Spring '10 term at University of Miami.

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