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Joleen Harmon & The Donal Company

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Question;1. Joleen Harmon, CPA, has two clients. Client A requires 20 hours of partner time and 100 hours of staff time. Client B will use 12 hours of partner time and 80 hours of staff time. Partners are paid $85 an hour and bill support time at 60% of their hourly rate. Staff are paid $25 an hour and bill support time at $20 per billable hour.;On a separate sheet of paper, calculate the total charge to each of these clients if profit is added at 20% over cost. Label each answer carefully and show all of your work. (This question is worth 10 points.);2. The Tijama Manufacturing Company has determined the cost of manufacturing a unit of product to be as follows, based on annual production of 50,000 units per year;Direct materials $20.00;Direct labor 15.00;Variable factory overhead 10.00;Fixed factory overhead 12.00;Operating statistics for the month of August and September are as follows;August September;Units produced 4,200 3,500;Units sold 3,500 4,200;Selling and administrative expenses $25,000 $35,000;The selling price is $75 a unit. There were no inventories on August 1, and there is no work in process at September 30.;Prepare comparative income statements for each month under both absorption costing and direct costing. Use the forms at the end of this examination to complete this problem.;(This question is worth 25 points.);3. The Donal Company has sales of $800,000, variable costs of $300,000, and fixed costs of $250,000.On a separate sheet of paper, compute the following. Label each answer carefully and show all of your work.;a. Contribution margin ratio;b. Break-even sales volume;c. Margin of safety ratio;d. Net income as a percentage of sales;(This question is worth 20 points, 5 points for each part.)

 

Paper#44546 | Written in 18-Jul-2015

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