Accounting exercises

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P16-22A

Accounting, 9e
P16-22A	Calculating income and unit cost for a service company
LO 1,2, 4 [15-20 minutes]
		Students please fill-in areas that are shaded
Student Name
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The Windshield People repair chips in car windshields in the company’s home
county. Rocky Chip, the owner, incurred the following operating costs for the
month of February 2012:
	Salaries and wages . . . . . . . . . . . . . . . . . . . . .		$ 9,000
	Windshield repair materials . . . . . . . . . . . . . .		4,900
	Depreciation on truck . . . . . . . . . . . . . . . . . .		250
	Depreciation on building and equipment . . . .		800
	Supplies expense . . . . . . . . . . . . . . . . . . . . . . .		600
	Gasoline and utilities . . . . . . . . . . . . . . . . . . .		2,130
The Windshield People earned $26,000 in revenues for the month of February by
repairing 500 windshields. All costs shown are considered to be directly related to
the repair service.
Requirements
1.	Prepare an income statement for the month of February. Compute the ratio of
	total operating expense to total revenue and operating income to total revenue.
2.	Compute the per unit cost of repairing one windshield.
3.	The manager of The Windshield People must keep unit operating cost below
	$50 per windshield in order to get his bonus. Did he meet the goal?
4.	What kind of system could The Windshield People use to integrate all its data?
Test Your Knowledge
P16-22A
Req. 1
	The Windshield People
	Income Statement
	Month Ended February 29, 2012
	Sales revenue		$ 26,000
	Salaries and wages		9,000
	Windshield repair materials		4,900
	Depreciation on truck		250
	Depreciation on buildings and equipment		800
	Supplies expense		600
	Gasoline and utilities		2,130
	Total operating expenses		$ 17,680
	Net operating income		$ 8,320
Req. 2	Answer here
Req. 3	Answer here
Req. 4	Answer here

Student. test