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1. Landmark Coal operates a mine. During July, the company obtained 500 tons of ore, which yielded 250 pounds of gold and 63,700 pounds of
1. Landmark Coal operates a mine. During July, the company obtained 500 tons of ore, which yielded 250 pounds of gold and 63,700 pounds of copper. The joint cost related to the operation was $500,000. Gold sells for $325 per ounce and copper sells for $0.85 per pound. Allocate the joint costs using relative weight. With these costs, what is the profit or loss associated with Copper?
2.
Infinity Designs, an interior design company, has experienced a drop in business due to an increase in interest rates and a corresponding slowdown in remodeling projects. To stimulate business, the company is considering exhibiting at the Home and Garden Expo. The exhibit will cost the company $12,000 for space. At the show, Infinity Designs will present a slide show on a PC, pass out brochures that are printed previously, (the company printed more than needed), and show its portfolio of previous | |||||||
jobs. | |||||||
The company estimates that revenue will increase by $36,000 over the next year as a result of the exhibit. For the previous year, profit was as follows: | |||||||
Revenue | $201,000 | ||||||
Less: | |||||||
Design supplies (variable cost) | $16,000 | ||||||
Salary of Samantha Spade (owner) | 80,000 | ||||||
Salary of Kim Bridesdale (full time employee) | 55,000 | ||||||
Rent | 18,000 | ||||||
Utilities | 6,000 | ||||||
Depreciation of office equipment | 3,600 | ||||||
Printing of advertising materials | 700 | ||||||
Advertising in Middleton Journal | 2,500 | ||||||
Travel expenses other than depreciation of autos (variable cost) | $2,400 | ||||||
Depreciation of company cars | 9,000 | ||||||
Required: | |||||||
Calculate the impact of the exhibit on company profit. |
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