Total Glass Company repairs chips in car windshields in the companys home county. Gary White, the owner,

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Total Glass Company repairs chips in car windshields in the company’s home county. Gary White, the owner, incurred the following operating costs for the month of July 2012:
Salaries and wages . . . . . . . . . . . . . . . . . . . . . . . . $ 11,000
Windshield repair materials . . . . . . . . . . . . . . . . . . . 4,800
Depreciation on truck . . . . . . . . . . . . . . . . . . . . . . . . . 550
Depreciation on building and equipment . . . . . . . . . 1,200
Supplies expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300
Gasoline and utilities . . . . . . . . . . . . . . . . . . . . . . . . 2,620

Total Glass Company earned $23,000 in revenues for the month of July by repairing 200 windshields. All costs shown are considered to be directly related to the repair service.
Requirements
1. Prepare an income statement for the month of July. Compute the ratio of total operating expense to total revenue and operating income to total revenue.
2. Compute the per unit cost of repairing one windshield.
3. The manager of Total Glass Company must keep unit operating cost below $70 per windshield in order to get his bonus. Did he meet the goal?
4. What kind of system could Total Glass Company use to integrate all its data?

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Financial and Managerial Accounting

ISBN: 978-0132497978

3rd Edition

Authors: Horngren, Harrison, Oliver

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