BBBC is considering a similar mail campaign in the Midwest where it has data for 50,000 customers. Such mailings typically promo

Answer:

a) With a cost of $11, the operating income amounts to $660,000

b) If the cost is set at $9, the operating income is $540,000

c) Indeed, the manager is concerned with the chosen price. The Cutting Division operates as a cost center.  

Explanation:

a)                                              Cutting                          Assembly

Revenue                              $660,000                       $2,500,000

Cost of services

Incurred                               $660,000                        $360,000

Transferred-in                           $0                              $660,000

Total                                    $660,000                        $1,020,000

Operating income                    $0                              $1,480,000

At a cost of $11, operating income is calculated as 60,000 cords × $11 = $660,000

b)                                            Cutting                            Assembly

Revenue                               $540,000                       $2,500,000

Cost of services

Incurred                               $660,000                        $360,000

Transferred-in                           $0                              $540,000

Total                                    $660,000                        $900,000

Operating income              ($120,000)                       $1,600,000

At a cost of $9, the operating income is 60,000 cords × $9 = $540,000  

Answer:

A general ledger adjustment should reflect: 1. Debit Bank Fee Expense $45 and Credit Bank Account $45.

Explanation:

The discrepancies between the Cash Book Bank Balance and the Bank Statement Balance often arise due to Unrecorded Items.

The bank's charge of $45 appears in the Bank Statement but was not documented in the Cash Book.

Thus, the appropriate adjustment is to reduce the Cash Book - Bank Balance and acknowledge this expense in the Income statement pertaining to these Bank Charges.