day came when a buyer for a major department store offered them a contract to produce 1,500 cakes of various flavors for $10.000. The sisters realized that it was time to get down to business. To make bookkeeping simpler, they have priced all the cakes at $8 Variable cost per unit is $6 and they have to rent a facility for $4,000 a month. 1) Calculate the breakeven. 2) Calculate their COGS on the department store order. 3) Calculate their Operating Expenses on the department store order 4)
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- Ms. Magan Dah and her sister, Ms. Supla Dah got into the cakes and pastries business almost by accident. Magan, a BSHRM graduate often bake cakes as gifts for friends: Occasionally, they would set up a booth at a trade fair and sell a few of the cakes. The day came when a buyer for a major department store offered them a contract to produce 1,500 cakes of various flavors for $10.000. The sisters realized that it was time to get down to business. To make bookkeeping simpler, they have priced all the cakes at $8 Variable cost per unit is $6 and they have to rent a facility for $4,000 a month 4) Calculate their EBIT on the department store order. 8)If the store refuses to pay more than $58.00 per unit but is willing to negotiate quantity, what quantity of cakes will result to an EBIT of $4,000?Heather and Dan Holt met while both were employed in the interior trim and upholstery department of an auto manufacturer. After their marriage, they decided to earnsomeextra income by doing small jobs involving canvas, vinyl, and upholstered products. Their work was considered excellent, and at the urging of their customers, they decided to go into business for themselves, operating out of the basement of the house they owned. To do this, they invested $120,000 cash in their business. They spent $10,500 for a sewing machine (expected life 10 years) and $12,000 for other miscelianeous tools and equipment (expected life 5 years). They undertook only custom work, with the customers purchasing the required materials, to avoid stocking any inventory other than supplies. Generally, they required an advance deposit on all jobs. The business seemed successful from the start, as the Holts received orders from many customers. But they felt something was wrong. They worked hard and charged…During their senior year at Clarkson College, two business students, Gerry Keating and Louise Lamont, began a part-time business making personal computers. They bought the various components from a local supplier and assembled the machines in the basement of a friend's house. Their only cost was $363 for parts; they sold each computer for $638. They were able to make three machines per week and to sell them to fellow students. The activity was appropriately called Keating & Lamont Computers (KLC). The product quality was good, and as graduation approached, orders were coming in much faster than KLC could fill them. A national CPA firm made Ms. Lamont an attractive offer of employment, and a large electronics company was ready to hire Mr. Keating. Students and faculty at Clarkson College, however, encouraged the two to make KLC a full-time venture. The college administration had decided to require all students in the schools of business and engineering to buy their own computers…
- During their senior year at Clarkson College, two business students, Gerry Keating and Louise Lamont, began a part-time business making personal computers. They bought the various components from a local supplier and assembled the machines in the basement of a friend's house. Their only cost was $364 for parts; they sold each computer for $633. They were able to make three machines per week and to sell them to fellow students. The activity was appropriately called Keating & Lamont Computers (KLC). The product quality was good, and as graduation approached, orders were coming in much faster than KLC could fill them. A national CPA firm made Ms. Lamont an attractive offer of employment, and a large electronics company was ready to hire Mr. Keating. Students and faculty at Clarkson College, however, encouraged the two to make KLC a full-time venture. The college administration had decided to require all students in the schools of business and engineering to buy their own computers…Review the following scenario: Scenario: Hart Nance and Jason Symington operate gift boutiques in shopping malls. The partners split profits and losses equally, and each takes an annual drawing of $80,000. To even out the workload, Nance travels around the country inspecting their properties. Symington manages the business and serves as the accountant. From time to time, they use small amounts of store merchandise for personal use. In preparing for his daughter's wedding, Symington took inventory that cost $10,000. He recorded the transactions as follows: Debit Credit Cost of Goods Sold $10,000 Inventory $10,000 Respond to the following questions and, if appropriate, include personal experience as part of your answers. How do you feel Symington should have recorded these transactions? Why? What are the ethical implications of Symington's actions?One of Natalie’s friends, Curtis Lesperance, runs a coffee shop where he sells specialty coffees and prepares and sells muffins and cookies. He is eager to buy one of Natalie’s fine European mixers, which would enable him to make larger batches of muffins and cookies. However, Curtis cannot afford to pay for the mixer for at least 30 days. He asks Natalie if she would be willing to sell him the mixer on credit. Natalie comes to you for advice. She asks the following questions. “Curtis has given me a set of his most recent financial statements. What calculations should I do with the data from these statements, and what questions should I ask him after I have analyzed the statements? How will this information help me decide if I should extend credit to Curtis?” “Is there an alternative other than extending credit to Curtis for 30 days?” “I am thinking seriously about being able to have my customers use credit cards. What are some of the advantages and disadvantages of letting my…
- One of Natalie’s friends, Curtis Lesperance, runs a coffee shop where he sells specialty coffees and prepares and sells muffins and cookies. He is eager to buy one of Natalie’s fine European mixers, which would enable him to make larger batches of muffins and cookies. However, Curtis cannot afford to pay for the mixer for at least 30 days. He asks Natalie if she would be willing to sell him the mixer on credit. Natalie comes to you for advice. She asks the following questions. “Is there an alternative other than extending credit to Curtis for 30 days?”WHAT KIND OF BUSINESS IS THIS? After graduating from college, Shelley Williams held several different jobs but found that she did not enjoy working for other people. Finally, she and Yvonne Hargrove, her college roommate, decided to start a business of their own. They rented a small building and opened a florist shop selling cut flowers such as roses and chrysanthemums that they bought from a local greenhouse. Williams and Hargrove agreed orally to share profits and losses equally, although they also decided to take no money from the operation for at least four months. No other arrangements were made, but the business did reasonably well, and after the first four months had passed, each began to draw out $500 in cash every week. At year-end, they took their financial records to a local accountant so that they could get their income tax returns completed. He informed them that they had been operating as a partnership and that they should draw up formal articles of partnership agreement…One of Natalie’s friends, Curtis Lesperance, runs a coffee shop where he sells specialty coffees and prepares and sells muffins and cookies. He is eager to buy one of Natalie’s fine European mixers, which would enable him to make larger batches of muffins and cookies. However, Curtis cannot afford to pay for the mixer for at least 30 days. He asks Natalie if she would be willing to sell him the mixer on credit. Natalie comes to you for advice. She asks you to address the questions below. Curtis has given me a set of his most recent financial statements. What calculations should I do with the data from these statements, and what questions should I ask him after I have analyzed the statements? How will this information help me decide if I should extend credit to Curtis? Is there an alternative other than extending credit to Curtis for 30 days? I am thinking seriously about being able to have my customers use credit cards. What are some of the advantages and disadvantages of letting my…
- WHAT KIND OF BUSINESS IS THIS? After graduating from college, Shelley Williams held several different jobs but found that she did not enjoy working for other people. Finally, she and Yvonne Hargrove, her college roommate, decided to start a business of their own. They rented a small building and opened a florist shop selling cut flowers such as roses and chrysanthemums that they bought from a local greenhouse. Williams and Hargrove agreed orally to share profits and losses equally, although they also decided to take no money from the operation for at least four months. No other arrangements were made, but the business did reasonably well, and after the first four months had passed, each began to draw out $500 in cash every week. At year-end, they took their financial records to a local accountant so that they could get their income tax returns completed. He informed them that they had been operating as a partnership and that they should draw up formal articles of partnership agreement…Staci Valek began dabbling in pottery several years ago as a hobby. Her work is quite creative, and it hasbeen so popular with friends and others that she has decided to quit her job with an aerospace company andmanufacture pottery full time. The salary from Staci’s aerospace job is $3,800 per month.Staci will rent a small building near her home to use as a place for manufacturing the pottery. Therent will be $500 per month. She estimates that the cost of clay and glaze will be $2 for each finishedpiece of pottery. She will hire workers to produce the pottery at a labor rate of $8 per pot. To sell herpots, Staci feels that she must advertise heavily in the local area. An advertising agency states that it willhandle all advertising for a fee of $600 per month. Staci’s brother will sell the pots; he will be paid acommission of $4 for each pot sold. Equipment needed to manufacture the pots will be rented at a costof $300 per month.Staci has already paid the legal and filing fees…Jenny operated a small shop selling hygienic supplies and bought facial masks worth $15,000 from the supplier, Amy. Jenny visited Amy’s office and gave Amy an uncrossed bearer cheque for full payment. When Amy finished her job and rushed to meet her customer by taking the MTR, she lost the cheque somewhere on the way accidentally. William found the cheque left on the floor of the MTR platform and picked it up. William was unemployed for six months and needed $15,000 to pay this month rent. After noticing the characteristic of this cheque, this was a bearer cheque. William took this bearer cheque to Isaac, his landlord, to pay this month’s rent of $15,000.Isaac deposited this cheque to her ABC Bank. The cheque was duly cleared through the Isaac’s bank and paid by Jenny’s CDE Bank. a) Explain how to apply “Holder in Due Course” (HIDC) in this case. b) Who is the true owner of this cheque from three parties of Amy, William and Isaac?c) If the cheque was crossed and the words “not…