You are on page 1of 2

P1.

10
o 4 items are not rev or exp
o Net loss ($57,400)
CHAPTER 4:
Internal control procedurespages 45-47
4 ratios need to know for exam
o Debt-to-equity, Current, return on sales,
o P2.7
Current ratio=current assets/current liabilities
(22,000+41,500+72,000)/(24,000+3,500+6,750)
=$3.96
Return on Sales ratio=NI/Sales
27,500/400,000=6.88%
Return on OE ratio=NI/average OE
(27,500)/((166,500+209,250))/2=14.64%
Accounts Receivable Turnover ratio=Sales/average A/R
400,000/((39,000+41,500)/2)=9.94 times collected A/R
365/9.94=Every 36.72 days collected A/R
Relevant range-normal range of activity in the short run
Fixed cost: fixed in total, varies per unit
Variable cost: fixed per unit, varies in total
E3.11
o Cost of shipping crates-skip
o If manufacturing co. all materials it takes to make a product=VC
o If merchandising co. all costs associated with selling product=VC
o Salary will always be FC
o Wages will always be VC
Wont focus much on linear regression in this class
o Q3.22
Advantages:
1.) Uses all of historical data
2.) Get statistics that tell us how reliable the cost or revenue line
(equation) is.
Disadvantages:
1.) Harder
2.) Need linear regression software
Read pages 100-110 to Ch.4 only
Special order=new customer wants to pay a lower price than normal because they want to buy
in bulk
If not at full capacity:
o Relevant revenues and costs
o Reject: Everything = $0
If at full capacity
o Only relevant revenue matters, not relevant costs
Make or buy: Only costs relevantpick lowest
o Josey: DM: 50,20
o 60,42
o 20,16
o 0,60
o 130,138
o 3250000,3450000
o 250000,0
o 3500000,3450000
Just need to know characteristics of JIT
o First two methods only for calculating bonus in textbook
NI before bonus and taxes
NI before taxes (after bonus)
Not NI (after bonus and taxes!)
1788i1429 (slide before to do list)
Chapter 6:
Revenue, Conversion Expenditure ProcessLook at D2L attachment Chart
Marketing & Distribution, Administrative, and DL & MOH Budget are NOT Calculated for this
class.
DM Purchase budget March EI given
Journalizing-Recording an accounting event in the general journal

You might also like