Question
Alberta Gauge Company, Ltd., a small manufacturing company in Calgary, Alberta, manufactures three types of electrical gauges used in a variety of machinery. For many
Alberta Gauge Company, Ltd., a small manufacturing company in Calgary, Alberta, manufactures three types of electrical gauges used in a variety of machinery. For many years the company has been profitable and has operated at capacity. However, in the last two years, prices on all gauges were reduced and selling expenses increased to meet competition and keep the plant operating at capacity. Second-quarter results for the current year, which follow, typify recent experience.
ALBERTA GAUGE COMPANY, LTD.
Income Statement
Second Quarter
(in thousands)
|
| Q Gauge | E Gauge | R Gauge | Total |
| Sales | $1600 | $900 | $900 | $3400 |
| Cost of Goods Sold | $1048 | $770 | $50 | $2768 |
| Gross Margin | $552 | $130 | $-50 | $632 |
| Selling and Admin exp | $370 | $185 | $135 | $690 |
| Income before taxes | $182 | $-55 | $-185 | $-58 |
Alice Carlo, the company
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started