Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Accounting Basics Expert

Q1) Austin's Shooters, Inc. operates paintball course where customers can come to play paintball games and stage organized matches with their friends. Their accountant, Denny Dinsdale, has made income statement (presented below) depicting their first year's operating data in contribution margin format. News is not good, given loss of $30,000. Though, Denny describes that this is the reason that presentation is in this format. That is, Austin Douglas, owner and manager of Austin's Shooters, Inc. can utilize statement to find out what will occur next year given changes in volume.

Income Statement For the Year Ended December 31, 2004
Revenue:  
Admission fees (1,600 shooters) $80,000
Supplies and Concessions $24,000
Total Revenue ($65 per unit) $104,000
Variable Costs:  
Cost of supplies & Concessions Sold $14,000
Electricity (purchased per KWH) $30,000
Wages of Games Coordinators (DL) $40,000
Liability Insurance (based on # of customers) $10,000
Total Variable Costs $94,000
Contribution Margin $10,000
Fixed Costs:  
Depreciation - Bldg & Fixtures $12,000
Advertising $3,000
Heat and Light for Bldg. $5,000
Property Taxes $20,000
Total Fixed Costs $40,000
Operating Income $<30,000>

After careful review, Austin tells Denny that classifications are not all correct. Austin enumerates three issues as follows:

1. Electricity cost is simply for lighting rather large area of land for play at night and is always on after sunset regardless of how many shooters are on site.

2. Though wages of games coordinators are hourly, they are needed to be present during all working hours to help make sure safety of shooters. Number of workers is adequate for up to 4,000 customers annually.

3. As liability insurance amount is based on number of shooters it does differ with volume, but it only increases for increments of every extra 5,000 shooters. Volume is expected to increase to 2,500 shooters next year, but 5,000 shooters clearly exceed relevant range of expected operations for foreseeable future.

Denny has assured Austin that information is correct and that expenses are properly categorized.

Suppose Denny is right, compute the expected income for upcoming year? Suppose Austin is right, determine expected income for upcoming year?

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M918734

Have any Question? 


Related Questions in Accounting Basics

Question 1which entry would record the payment of a utility

Question 1 Which entry would record the payment of a utility bill? A. Debit Utilities Expense; credit Cash B. Debit Cash; credit Utilities Expense C. Debit Utilities Expense; credit Accounts Payable D. Debit Accounts Rec ...

Harmon helmets purchased equipment for 62000 cash sold

Harmon Helmets purchased equipment for $62,000 cash, sold equipment costing $36,000 with a book value of $22,000 at a loss, and declared dividends during 2013. No new notes payable were issued during the year. Financial ...

Question 1the production manager of rordan corporation has

Question 1: The production manager of Rordan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:                                             1st Quarter      ...

Accounting questions1 if cash is 2345 in 20x2 and 3671 in

Accounting Questions 1. If Cash is $2,345 in 20X2 and $3,671 in 20X1, what is the percentage of increase or (decrease) from 20X1 to 20X2? A. 56.55%******* B. (56.55%) C. 36.12% D. (36.12%) 2. Gross profit by department a ...

Problem 1the following information relates to billy bobs

Problem 1 "The following information relates to Billy Bob's Donuts defined benefit pension plan during the current reporting year (All the amounts are in millions): Plan Assets at the beginning of the year $350 Expected ...

Accountingcase to assess assurance of learning goal ethical

Accounting Case to assess Assurance of Learning Goal (Ethical Perspectives) Michael Greer is the Marketing Vice President for Atlantic Lubricants headquartered in Boston with extensive operations in New York City that se ...

Problem -a list of transactions appears below indicate

Problem - A list of transactions appears below. Indicate which accounting elements of the business are affected by placing in the respective columns the amount and the + (increasing) - (decrease) sign or NA, if the eleme ...

Assignment question 1 -impulse pty ltd impulse is an

Assignment Question 1 - Impulse Pty Ltd (Impulse) is an entertainment system manufacturer that was established in 2005. Your audit firm King & Queen have been the auditor of Impulse since its formation. The audit report ...

Decide upon an initiative you want to implement that would

Decide upon an initiative you want to implement that would increase sales over the next five years, (for example, market another product, corporate expansion, and so on). Using the sample financial statements, create pro ...

Discussionpart 1 please respond the following question no

Discussion Part 1 please respond the following question no less then 350 words (original work, no plagiarism, 1 reference "learning experience and application of knowledge" please respond to the following: • Assume you h ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro