Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The contribution format income statement for Huerra Company for last year is given below: Total Unit Sales $ 996,000 $ 49.80 Variable expenses 597,600 29.88

The contribution format income statement for Huerra Company for last year is given below:

Total Unit
Sales $ 996,000 $ 49.80
Variable expenses 597,600 29.88
Contribution margin 398,400 19.92
Fixed expenses 320,400 16.02
Net operating income 78,000 3.90
Income taxes @ 40% 31,200 1.56
Net income $ 46,800 $ 2.34

The company had average operating assets of $496,000 during the year.

5. As a result of a more intense effort by salespeople, sales are increased by 15%; operating assets remain unchanged.

6. At the beginning of the year, obsolete inventory carried on the books at a cost of $18,000 is scrapped and written off as a loss.

7. At the beginning of the year, the company uses $177,000 of cash (received on accounts receivable) to repurchase and retire some of its common stock.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

IT Auditing An Adaptive Process

Authors: Robert E. Davis

1st Edition

0557220513, 978-0557220519

More Books

Students also viewed these Accounting questions

Question

Explain the main differences between CPT and SP/A.

Answered: 1 week ago