question archive THE FOLLOWING TRANSACTION PERTAIN TO 2014, THE FIRST YEAR OPERATIONS OF HALL COMPANY
THE FOLLOWING TRANSACTION PERTAIN TO 2014, THE FIRST YEAR OPERATIONS OF HALL COMPANY
Subject:AccountingPrice: Bought3
THE FOLLOWING TRANSACTION PERTAIN TO 2014, THE FIRST YEAR OPERATIONS OF HALL COMPANY. ALL INVENTORIES WAS STARTED AND COMPLETED DURING 2014.ASSUME THAT ALL TRANSACTIONS ARE CASH TRANSACTIONS. 1.ACQUIRED 4000 CASH BY ISSUING COMMON STOCK. 2.PAID 720 FOR MATERIALS USED TO PRODUCE INVENTORY. 3.PAID 1800 TO PRODUCTION WORKERS. 4.PAID 540 RENTAL FEE FOR PRODUCTION EQUIPMENT. 5.PAID 180 TO ADMINISTRQATIVE EMPLOYEES. 6.PAID 144 RENTAL FEE FOR ADMINISTRATIVE OFFICE EQUIPMENT. 7.PRODUCE 300 UNITS OF INVENTORY OF WHICH 200 UNITS WERE SOLD AT A PRICE OF 12 EACH. REQUIRED:PREPARE AN INCOME STATEMENT AND A BALANCE SHEET.TARGET SYSTEMS,INC, MAKES HEAT SEEKING MISSILES. IT HAS RECENTLY BEEN OFERED A GOVERNMENT CONTRACT FROM WHICH IT MAY REALIZE A PROFIT. THE CONTRACT PERCHASE PRICE IS RS.130000 PER MISSILE, BUT THE NUMBER OF UNITS TO BE PURCHASED HAS NOT YET BEEN DECIDED. THE COMPANY’S FIXED COSTS ARE BUDGETED AT RS.3973500 AND VARIABLE COSTS ARE 68500 PER UNIT. REQUIRED: 1-COMPUTE THE NUMBER OF UNITS THE COMPANY SHOULD AGREE TO MAKE AT THE STATED CONTRACT PRICE TO EARN A PROFIT OF RS.1500000. 2-USING A LIGHTER MATERIAL, THE VARIABLE UNIT COST CAN BE REDUCED BY RS.1730 BUT TOTAL FIXED OVERHEAD WIIL INCREASE BY RS. 27500. HOW MANY UNITS MUST BE PRODUCED TO MAKE RS. 1500000 IN PROFIT? 3-GIVEN THE FIGURE IN 2, HOW MANY ADDITIONAL UNITS MUST BE PRODUCED TO INCREASE PROFIT BY RS.1264600
