Metlock Inc. sells appliances to Seasons Department Store. A recent order requires Metlock to manufacture and deliver 500 toasters at a price of $88 per unit.

Metlock’s manufacturing costs are approximately $44 per unit. The following schedule summarizes the production and delivery record of Hydra:

Year		1		2		3		Total
Toasters produced		$              200		$       200		$       100		$       500
Costs incurred		$          8,800		$    8,800		$    4,400		$  22,000
Toasters delivered		$              150		$       200		$       150		$       500
Cash received		$          8,800		$  13,200		$  17,600		$  39,600

Fill in the blanks Required:

A)

Assuming that Metlock recognizes revenue when the toasters are produced, how much revenue should be recognized in each of the three years?

Assumption 1

ANSWER HERE

Show Computations

Revenue

Year 1

$

Year 2

$

Year 3

$

B)

Assuming that Metlock recognizes revenue at delivery, how much revenue should be recognized in each of the three years?

Assumption 2

ANSWER HERE

Show Computations

Revenue

Year 1

$

Year 2

$

Year 3

$

C)

Calculate net income for the three periods under each of the two preceding assumptions.

YR 1

Yr 2

Yr 3

Net Income:

Assumption 1

ANSWER HERE

$

Assump[tion 2

$

Answer rating: 100% (QA)

Assumption 1 Revenue Revenue Working Year 1 17600 20088 Year 2 17600 20088 Year 3 8800 100... View the full answer