Business, 12.03.2021 15:30 bultron1966

The Fantastic Ice Cream Shoppe sold 8,800 servings of ice cream during June for Dollar 5 per serving. The shop purchases the ice cream in large tubs from the Deluxe Ice Cream Company. Each tub costs the shop $14 and has enough ice cream to fill 28 ice cream cones. The shop purchases the ice cream cones for $0.15 each from a local warehouse club. The Fantastic Ice Cream Shoppe is located in a strip mall, and rent for space is $2,050 per month. The shop expenses $220 a month for the depreciation of the shop's furniture and equipment. During June, the shop incurred an additional $2,800 of other operating expenses (75% of these were fixed costs). Required:
a. Prepare the Fantastic Ice Cream Shoppe's June income statement using a traditional format.
b. Prepare the Fantastic Ice Cream Shoppe's June income statement using a contribution margin format

Answers: 2

Show answers

Answers

Answer from: lolsmaster3951

The Fantastic Ice Cream Shoppe

a) Fantastic Ice Cream Shoppe

June Income Statement, using traditional format

Sales Revenue $44,000

Cost of goods sold 5,720

Gross profit $38,280

Expenses:

Rent expense 2,050

Depreciation exp. 220

Other operating exp. 2,800

Total expenses $5,070

Net Income $33,210

b) Fantastic Ice Cream Shoppe

June Income Statement, using contribution margin format

Sales Revenue $44,000

Direct materials 5,720

Operating expense 700

Total variable expense 6,420

Contribution margin $37,580

Fixed expenses:

Rent expense 2,050

Depreciation exp. 220

Other operating exp. 2,100

Total expenses $4,370

Net income $33,210

Explanation:

a) Data and Calculations:

Sales of ice cream during June = 8,800 servings

Price per serving = $5

Sales revenue = $44,000 ($5 * 8,800)

Purchase cost of ice cream in large tubs = $14 * 8,800/28 = $4,400

Purchase cost of ice cream cones = $0.15 * 8,800 = $1,320

Total cost of direct materials = $5,720

Fixed costs:

Rent = $2,050 per month

Depreciation = $220

Other operating expenses:

Fixed operating expense = $2,100 ($2,800 * 75%)

Variable operating expense = $700 ($2,800 * 25%)

Answer from: Quest

if i need to borrow money for anything, it would be for something like a house or an apartment but, that depend on the situation.

is this good enough?

Answer from: Quest

Secured loans are protected by collateral security. examples: title loans where the borrower uses the car title as collateral security interest rates are lower and repayments are longer therefore risk is low as a collateral security is given as guarantee to the bank in case of failure to pay the loanunsecured loans are not protected by collateral security but it is given on the creditworthiness of the borrower, trusting that she/he will pay on time. examples; payday loans is a short term loan where the borrower lends money from the bank and pays is back when the borrower receives his/her wages.interest rates are high and repayments are shorter. but the risk is high as no collateral security is given as a guarantee to the bank for payment of the loan

Another question on Business

Business, 23.06.2019 00:00

Which of the following is not a factor to consider when deciding whether to accept a special order? whether this order will hurt the brand name of the company whether other potential orders would be more profitable whether additional fixed costs would need to be incurred whether the offered price is sufficient to cover prime costs and fixed overhead allocated all of the above

Answers: 2

Answer

Business, 23.06.2019 00:30

Activity-based costing (abc) is not truly a cost collection mechanism as much as it is an inventory valuation method. the main purpose for implementing an activity-based cost system is to try to overcome some of the cost distortions that occur in traditional costing from product differences when there are variations in size and complexity. however, one of the disadvantages of utilizing abc is that the additional information gathering necessary to implement costing with that level of detail might be beyond the reach of some companies with resource or financial constraints. with this in mind, what kinds of industries or companies do you think would benefit most from using activity-based costing and why? in designing or modifying an accounting system to capture appropriate costs for abc, what considerations do you think would need to be made?

Answers: 3

Answer

Business, 23.06.2019 01:10

Atariff on avocadoes the price of avocadoes, consumers' surplus for avocado buyers, producers' surplus of avocado growers and tariff revenue. because the loss to is more than the gain to there is a net loss to society.raises; decreases; increases; generates; consumers; producers and government raises; increases; decreases; does not generate; producers and government; consumers lowers; increases; decreases; does not generate; producers and government; consumers raises; increases; decreases; generates; producers; consumers and government

Answers: 2

Answer

Business, 23.06.2019 01:30

How is systematic decision making related to being financially responsible

Answers: 1

Answer

You know the right answer?

The Fantastic Ice Cream Shoppe sold 8,800 servings of ice cream during June for Dollar 5 per serving...

Questions