Stuff-2

#1

Cosgrove Company, Inc. is a wholesaler that distributes a single product. The company's revenues and expenses for the last three months are given below:

Cosgrove Company Traditional Format Income Statement For the Three Months Ended June 30
	April	May	June
Sales in Units	3,000	3,750	4,500
Sales Revenue	420,000	525,000	630,000
Cost of Goods Sold	168,000	210,000	252,000
Gross Margin	252,000	315,000	378,000
Selling and Administrative Expenses:
Shipping Expense	44,000	50,000	56,000
Advertising Expense	70,000	70,000	70,000
Salaries and Commissions	107,000	125,000	143,000
Insurance Expense	9,000	9,000	9,000
Depreciation Expense	42,000	42,000	42,000
Total Selling and Administrative Expenses	272,000	296,000	320,000
Net Operating Income (Loss)	$(20,000)	$19,000	$58,000

Required:

a.   Identify the fixed and variable costs associated with Cosgrove.

b.   Calculate the average costs per month.

There is not a word length requirement for this question; however, you must show your work.

#2

A partial listing of costs incurred at SueBelle Corporation during October appears below:

Direct Materials	$195,000
Utilities, Factory	$9,000
Sales Commission	$75,000
Administrative Salaries	$113,000
Indirect Labor	$30,000
Advertising	$119,000
Depreciation of Production Equipment	$28,000
Direct Labor	$105,000
Depreciation of Administrative Equipment	$44,000

Based on the information provided, answer the following questions:

a.   What is the total amount of product cost listed above? Show your work.

b.   What is the total amount of period cost listed above? Show your work.

There is not a word length requirement for this question; however, you must show your work.

#3

Bell Corporation reports that at an activity level of 8,700 units, its total variable cost is $653,109, and its total fixed cost is $658,416. Required: For the activity level of 8,800 units, assume this level is within the relevant range. Compute:

a. the total variable cost,

b. the total fixed cost,

c. the total cost,

d. the average variable cost per unit,

e. the average fixed cost per unit, and

f.  the average total cost per unit.

There is not a word length requirement for this question; however, you must show your work.

#4

Based on your reading in this unit, explain how sunk costs create a barrier to entry into the market place. Your response must be at least 200 words in length.

#5

As a managerial accountant, you would have the opportunity to work for company that classifies itself as either service, merchandising, or manufacturing. Based on what you have learned from this unit, and based on your personal preferences, identify which type of company for which you would prefer to work as a managerial accountant. Be sure to provide specific reasoning to support your answer. Your response must be at least 200 words in length.