Problem #1: Cost Estimation Anna Martinez, manager of the Casa Real restaurant, wants to see whether her
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Problem #1: Cost Estimation | ||||||||
Anna Martinez, manager of the Casa Real restaurant, wants to see whether her new advertising campaign is | ||||||||
working to increase sales. She obtained the following data for the last 10 months. | ||||||||
month | advertising | revenues | ||||||
jan | $2,100 | $35,200 | ||||||
feb | $2,900 | $39,850 | ||||||
mar | $1,600 | $35,700 | ||||||
apr | $3,300 | $41,300 | ||||||
may | $1,100 | $33,100 | ||||||
jun | $1,850 | $37,550 | ||||||
jul | $1,350 | $33,900 | ||||||
aug | $4,200 | $38,800 | ||||||
sep | $2,400 | $35,050 | ||||||
oct | $2,850 | $40,150 | ||||||
average | $2,365 | $37,060 | ||||||
-1 | What is the incremental revenue per dollar of advertising? (2 points) | |||||||
-2 | What is revenue without any advertising? (2 points) | |||||||
-2 | The contribution margin for the restaurant is | 28.5% | What is the minimum revenue per dollar of | |||||
advertising required to make the advertising profitable? (2 points) | ||||||||
-3 | What is expected revenue with | $2,850 | of advertising? (2 points) | |||||
Problem #1: Standard Costing | |||||||
Ultra, Inc. manufactures and sells a full line of sunglasses. The company uses a standard cost system. Department | |||||||
managers' are held responsible for the explanation of the variances in their department performance reports. | |||||||
Recently, the variances in the Prestige line of sunglasses have been of concern. Data for the month of August is | |||||||
presented below. Assume beginning and ending inventory levels for WiP and FG are zero. | |||||||
Static Budget | Actual | ||||||
revenues | $600,000 | $575,000 | |||||
DM | $150,000 | $145,000 | |||||
DL | $135,000 | $142,000 | |||||
FOH (cost driver = DL hours) | $114,000 | $111,000 | |||||
gross profit | $201,000 | $177,000 | |||||
selling price per Prestige sunglass | $76.923 | $78.767 | |||||
DM (total # ounces) | 15,600 | 16,000 | |||||
DL rate ($ per DL hour) | $18.00 | $14.20 | |||||
-1 | Prepare the journal entry for the purchase of DM. (2 points) | ||||||
DM inventory | |||||||
DM spending variance | |||||||
accounts payable |
Related Book For
Management Accounting Information for Decision-Making and Strategy Execution
ISBN: 978-0137024971
6th Edition
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young
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