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

Assignmentair france-klm af a franco-dutch company prepares

Assignment Air France-KLM (AF), a Franco-Dutch company, prepares its financial statements according to International Financial Reporting Standards. AF's financial statements and disclosure notes for the year ended Decemb ...

Assignmenttravel-r-us inc travel is a publicly-traded

Assignment Travel-R-Us, Inc. (Travel) is a publicly-traded company with annual revenue of $370 million and a fiscal year ending May 31. Travel owns and operates three cruise ships serving Alaska, the Mediterranean, and t ...

Accounting discussionbulldiscuss the advantages of

Accounting Discussion • Discuss the advantages of understanding accounting as it relates to your current or future position. (Consider careers in management, sales, business operations, finance, and business ownership.)

Illustrative question- shane brookson july 1 2015 shane

Illustrative Question- Shane Brooks On July 1, 2015, Shane Brooks established an interior decorating business, Premium Designs. During the month, the following transactions are completed: July  1. Transferred cash from a ...

Assignment intermediate accountinginstructionsbulluse the

Assignment: Intermediate Accounting Instructions: • Use the answer sheet provided. • For the multiple choice answers, use upper case letters. • Only submit you answer sheet in the Assignment Folder NLT No late examinatio ...

Watch accounting witts video titled cash and accrual -

Watch Accounting WITT's video titled "Cash and Accrual - Conceptual": https://www.youtube.com/watch?v=aPwdgUDXkkE&feature=youtu.be Based on the video, explain two (2) advantages and two (2) disadvantages in using both th ...

Accounting assignment1 the standard direct labor time for

Accounting Assignment 1. The standard direct labor time for producing one pair of original Crocs is 0.6 hours and the direct labor rate for producing one pair of original Crocs is $18.50 per hour. During February, 10,000 ...

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 ...

1 a psychologist studied the number of puzzles subjects

1. A psychologist studied the number of puzzles subjects were able to solve in a five minute period while listening to soothing music. Let X be the number of puzzles completed successfully by a subject. X had the followi ...

Assignmentguidelines for individual case assignment cutting

Assignment Guidelines for Individual Case Assignment: Cutting Edge Instructions This is an individual assignment and therefore must be completed by the individual student without outside assistance. In order to complete ...

  • 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

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

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen