d. $100,000 Explanation: Ronaldo Soccer Shop Income Statement Sales $100,000; Cost of goods sold $46,000, Operating expenses $34,000, Interest expense $15,000, Income tax expense $2,000, and Net Income $3,000. To perform the vertical analysis, each item on the income statement is divided by the total sales. Vertical Analysis (income Statement) = (Income Statement Item/Total Sales) * 100.
Response:
The lowest acceptable price is $960 per unit
Explanation:
According to the available information:
The Engine Division, which is currently functioning at full capacity, has a unit sale price of $2,550 and corresponding variable and fixed costs of $1,050 and $750 per unit, respectively. The Production Division is paying an external supplier $2,400 per unit. Internal sales would result in saving $90 per unit due to reduced selling expenses.
Considering the presence of excess capacity, fixed costs will not factor into our considerations.
Variable cost is calculated as 1,050 - 90= $960
Thus, the minimum price is set at $960
A. The fixed overhead that is deferred in inventories totals $60,000.
Unit product cost
Year 1
Year 2
Direct materials
$12
$12
Direct labor
$5
$5
Variable manufacturing overhead
$5
$5
Fixed overhead
$48
$36
($432,000 ÷ 9,000)
($432,000 ÷ 12,000)
unit product cost
$70
$58
Fixed overhead deferred (1,000 × $48)
$48,000
Fixed overhead released
-$48,000
Fixed overhead deferred (3,000 × $36)
$108,000
Net
$48,000
$60,000.
The fixed overhead deferred in inventories amounts to $60,000.
