Accounting Homework Help

2. (6 points) Seventh Heaven takes tourists on helicopter tours of Hawaii. Each tourist buys a $150 ticket; the variable costs average $60 per person. Seventh Heaven has annual fixed costs of $702,000. Required: A. How many tours must the company conduct in a month to break even? B. Compute the sales revenue needed to produce a target net profit of $36,000 per month. C. Calculate the contribution margin ratio. D. Determine whether the actions that follow will increase, decrease, or not affect the company's break-even point. 1. A decrease in tour prices. 2. The termination of a salaried clerk (no replacement is planned). 3. A decrease in the number of tours sold.  

3. (6 points) Lamar & Co., makes and sells two types of shoes, Plain and Fancy. Data concerning these products are as follows:     Sixty percent of the unit sales are Plain, and annual fixed expenses are $45,000.

A. The weighted-average unit contribution margin is:  B. Assuming that the sales mix remains constant, the total number of units that the company must sell to break even is:  C. Assuming that the sales mix remains constant, the number of units of Plain that the company must sell to break even is:  D. Assuming that the sales mix remains constant, the number of units of Fancy that the company must sell to break even is: 

4. (6 points) High Point Corporation reported sales revenues of $1,850,000 for the period just ended. Cost of goods sold, selling expenses, and administrative expenses totaled $1,200,000, $280,000, and $170,000, respectively. A detailed analysis of the latter three amounts revealed respective fixed cost components of $780,000, $60,000, and $130,000. Required: A. Determine the amounts, if any, that High Point would report on a traditional income statement for (1) gross margin, (2) contribution margin, and (3) net income. B. Determine the amounts, if any, that High Point would report on a contribution income statement for (1) gross margin, (2) contribution margin, and (3) net income. C. Which of the two income statements (traditional or contribution) is more useful for studying a company's cost-volume-profit relationships. 

5. (6 points) . Santorini Corporation has experienced a number of out-of-stock situations with respect to its finished-goods inventories. Inventory at the end of May, for example, was only 50 units—an all-time low. Management desires to implement a policy whereby finished-goods inventory is 70% of the following month's sales. Budgeted sales for June, July, and August are expected to be 5,000 units, 5,600 units, and 5,500 units, respectively. Required: Determine the number of units that Santorini must produce in June and July. 

 6. (12 points) Braston Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: Sales are budgeted at $350,000 for November, $330,000 for December, and $340,000 for January. Collections are expected to be 70% in the month of sale, 26% in the month following the sale, and 4% uncollectible. The cost of goods sold is 70% of sales. The company purchases 50% of its merchandise in the month prior to the month of sale and 50% in the month of sale. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $20,100. Monthly depreciation is $22,000. Ignore taxes.   

A. Expected cash collections in December are:  B. The cost of December merchandise purchases would be:  C. December cash disbursements for merchandise purchases would be:  D. The excess (deficiency) of cash available over disbursements for December would be: