(1)
The ratio of cost to net sales shows the efficiency of a business in production. This ratio should always be low. Cost to sale ratio also shows the total cost of goods sold against total sale amount.
To compute:
The ratio of cost to sales ratio for company A.
(2)
The ratio of cost to net sales shows the efficiency of a business in production. This ratio should always be low. Cost to sale ratio also shows the total cost of goods sold against total sale amount.
To compute:
The ratio of cost to sales ratio for company G.
(3)
The ratio of cost to net sales shows the efficiency of a business in production. This ratio should always be low. Cost to sale ratio also shows the total cost of goods sold against total sale amount. Higher ratio of cost to sale shows that the total cost is against the sales.
To discuss:
Company with higher cost ratio.
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Managerial Accounting
- This cost data from Hickory Furniture is for the year 2017. Using the high-low method, express the companys utility costs as an equation where X represents number of tables produced. Predict the utility costs if 800 tables are produced. Predict the utility costs if 600 tables are produced. Using Excel, create a scatter graph of the cost data and explain the relationship between number of tables produced and utility expenses.arrow_forwardUsing the information for Lighthizer Trading Company, prepare the income statement to include all costs, but separate out uncontrollable costs. Insert subtotals where appropriate (include one for operating income) before the uncontrollable costs. Income tax expense should be based on all expenses (that is, it will be the same amount as in the previous exercise). Calculate net income, profit margin, ROI, and RI excluding uncontrollable expenses. Prepare a short response to accompany the income statement that explains why uncontrollable costs are separated in the income statement.arrow_forwardWachowski Company reported these cost data for the year 2017. Use the data to complete the following table. Total prime costs Total manufacturing overhead costs Total conversion costs Total product costs Total period costsarrow_forward
- The contribution margin income statementa. reports expenses based on cost behavior pattern rather than cost function.b. unitizes fixed costs.c. shows contribution margin rather than operating income as the bottom line.d. is sometimes used for financial reporting purposes.e. none of the above.Use the following information for Questions 9 and 10.O’Brien, Inc.’s, 2013 contribution margin income statement shows thefollowing:Sales @ $10 per unit . . . . . . . . . . . . . $ 160,000Less: Variable expense . . . . . . . . . . . (128,000)Contribution margin. . . . . . . . . . . . . . $ 32,000Less: Fixed expenses . . . . . . . . . . . . (44,000)Operating income (loss) . . . . . . . . . . . $ (12,000)arrow_forwardGoogle has many types of costs. What is an out-of-pocket cost? What is an opportunity cost? Are opportunity costs recorded in the accounting records?arrow_forwardFor CVP analysis calculations, which of the following statements is correct? A. In target profit calculations, sales revenue is less than total costs. B. CVP analysis relies on our knowledge of cost function to express relationships among costs, sales volume, and profit. OC. A company's sales mix is ultimately determined by the management of a company. D. The Break-even point is the point at which operating income is greater than $0. O E. If sales volume is expected to be higher than the indifference point, management should choose the cost structure with the higher fixed costs.arrow_forward
- Preparing a standard cost income statement Use the following information to prepare a standard cost income statement for Mitchell Company. for 2018.arrow_forwardThe line that begins at the origin on a CVP graph represents total expenses. total fixed expenses. total sales revenues. both the total expenses and the total sales revenues. Which of the following best describes the concept of a "constraint?" Expected future costs that differ among alternatives. None of the items in this list of answers. A benefit foregone by choosing one alternative course over another. The distribution of all products to be sold.arrow_forwardRefer to the pictur ebelow: Find: 1. Total Cost of Product A under ABC System2. Total Cost of Product B under ABC System3. Selling Price per unit of Product B assuming profit margin of 20% above costarrow_forward
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- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College