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Benson and Jencks is a manufacturing company that specializes in writing instruments. The past year was a difficult one for the company, as it sought to retain its share in a market in which the largest competitors were also rapid innovators. Benson and Jencks introduced a new product late in the year, even though testing was not complete. It was a pen designed with two cartridges: one supplying ink and the other correction fluid. A person could then switch easily between writing and correcting errors. It was priced fairly high, and was never heavily advertised. Even so, the Correct-O-Pen, as the product was named, was an overwhelming success. The success of the product has Fern Donald, the manager of the New Products division, worried, however. She was concerned that quality problems would begin occurring, since the longevity of the pen and stability of the correction fluid formulation had not been tested. She did not want sales personnel to get the bonuses that appeared to be indicated, since they might aggressively promote a product that would fail in use. She preferred to complete testing of the pen first, so that more confidence could be placed in the results. Top management, however, declined the tests. Ms. Donald then instructed you, the accountant, not to prorate payroll taxes or rent expense for the rest of the year, but to show them as current expenses in total. In this way, the new product would appear to be only slightly profitable. Required:
1. Describe the alternatives that you as an accountant would have in this situation.
2. Indicate which alternative is best
Evaluate the unit contribution margin and the contribution margin ratio - Armstrong Helmet Company manufactures a unique model of bicycle helmet.
Assume that Snap Fitness estimates that each location incurs $4,000 per month in fixed operating expenses plus $2,000 to lease equipment.
Waters, Inc., acquired 10 % of Denton Corporation on 1 st January, 2012, for $297,400 though Denton's book value on that date was $2,380,000.
Write the appropriate journal entries to record wages and salaries expense and payroll tax expense for the January 2013 pay period.
The total cost was $20,000, and Anne deducted $13,000 as medical expenses. Find what is Anne's realized gain?
Broadway changed to sum-of-years'-digits depreciation for this equipment. What depreciation would Broadway record for the year 2011 on this equipment?
When finished goods inventory decreases during a period, a manufacturing company's absorption costing net operating income for that period will usually be greater than its variable costing net operating income.
Evaluate individually the increase or decrease in total income arising from the company's errors in evaluating or entering depreciation or in recording transactions affecting trucks, ignoring income tax considerations.
Compute the book-value weights for each source of capital and Compute the market-value weights for each source of capital.
If a company does not monitor notes payable for due dates and interest payment dates in relation to financial statement dates, what misstatements can appear in the financial statements?
Experience has shown that payment for the credit sales is received as follows: 15% in the month of sale, 60% in the first month after sale, 20% in the second month after sale, and 5% is uncollectible. How much cash can Lara Company expect to coll..
Shula’s 347 Grill has budgeted the following costs for a month in which 1,600 steak dinners will be produced and sold: Evaluate what is the budgeted total variable cost?
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