Purchase Solution

Variable Cost, Break-Even, Net Income, Inventory Calculation

Not what you're looking for?

Ask Custom Question

1. During 2005, the Latrex Corporation had cash and credit sales of $47,000 and $45,500 respectively. The company also collected accounts receivable of $26,700 and incurred expenses of $68,500, 80 percent of which were paid during the year. In addition, Latrex paid $24,000 for a 12-month building rental, beginning on July 1, 2005. What was Latrex's accrual-basis net income (loss) for 2005?

2. If a firm's beginning inventory is $70,000, goods purchased during the period cost $260,000, and the cost of goods sold is $300,000, what is the ending inventory?

3. During the year, Samson Company earned revenues of $228,000 and incurred $196,000 for various operating expenses. There are 2,500 shares of stock outstanding. What is Earnings per share?

4. Goliath Company had the following account balances: Sales Revenue, $150,000; Sales Returns and Allowances, $3,000; Sales Discounts, $3,600; and Bad Debts, $600. Given these balances, what is the amount of net sales?

5. If variable costs are $20 per unit, revenues are $40 per unit, and fixed costs are $10,000, what is the break-even point in units?

6. During June, Bezold Corporation produced 12,000 units and sold them for $20 per unit. Total fixed costs for the period were $154,000, and the operating profit was $26,000.What was the variable cost per unit in June?

7. If demand is 10,000 units, cost of carry is $2 per unit, and cost of placing an order is $100, what is the EOQ?

8. What is the economic order quantity for an automobile dealer selling 2,000 cars per year, at a cost of $750 per order, and a carrying cost of $300 per automobile?

Purchase this Solution

Solution Summary

This solution is comprised of a detailed explanation and calculation to find variable cost, breakeven, net income, and inventory calculations.

Solution Preview

1. During 2005, the Latrex Corporation had cash and credit sales of $47,000 and $45,500 respectively. The company also collected accounts receivable of $26,700 and incurred expenses of $68,500, 80 percent of which were paid during the year. In addition, Latrex paid $24,000 for a 12-month building rental, beginning on July 1, 2005. What was Latrex's accrual-basis net income (loss) for 2005?

First, you need to find the sales during 2005, which will include both cash and credit sales. Accounts receivable collected will not be recorded in the income statement. For the expenses, we need to include all as it is accrual-basis. However, for the rental expense, we will calculate only for the rental expense from July 1, 2005 until Dec. 31, 2005 (6 months).

Sales (47,000 + 45,500) 92,500
Less: Expenses 68,500
Rental Expense (24,000/12 x 6) 12,000 80,500
Net Income 12,000

2. If a firm's beginning ...

Purchase this Solution


Free BrainMass Quizzes
Lean your Process

This quiz will help you understand the basic concepts of Lean.

Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce