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23 Apr 2019

***This is a classmates discussion that they posted my onlyassignment is to comment on it 150 words minium***

1. The company's inventory at the 2016 year end had a value of$4,864,000.

2. The amount of cost of goods for the fiscal year of 2016 had avalue of $30,150,000,000 including depreciation (D) andamortization (A). The value was $29,490,000,000 excluding D andA.

3. Best Buy uses a multi-step income statement. The incomestatement begins with sales/revenue, cost of goods sold, and grossincome. There is another section that lists the selling, general,and administrative expense for the company. This includes incometax along with interest expenses. The net income is stated afterthese entries.

4. Gross profit percentage is found by subtracting the cost ofgoods sold by the total revenue. So for Best Buy this would be$39,400,000,000-$30,150,000,000 which equal a gross profit of$9,250,000,000. The final step to get the gross profit percentageis to divide gross profit by the total revenue and multiply by 100.Plugging Best Buy's data into the equation, I got$9,250,000,000/$39,400,000,000 which equals 0.235. Multiply by 100to get a percentage makes Best Buy's gross profit percentage23.5%.

5. The gross profit percentage in 2015 for Best Buy was 23.0%.The gross profit percentage increased by 0.5% from 2015 to 2016.That concludes that the gross profit percentage for Best Buy heldfairly steady from 2015 to 2016.

6. Best Buy's gross profit percentage is considerably lower thanother companies in the industry. For example, Apple's gross profitpercentage for 2016 was 38.6%. That is 15% higher than BestBuy's.

7. I calculated the company's inventory turnover ratio bydividing the value of cost of goods sold by the value of inventory;$30,150,000,000/$4,860,000,000 which came out to a ratio of 6.2. Tocalculate the days sales in inventory I took the the inventoryturnover ratio and divided 365 by the number; 365/6.2 which equals58.9 days. These ratios mean that Best Buy sells is averageinventory 6 times per year or about every 2 months during a year.Best Buy also has about a 59 day supply of inventory available atall times. These numbers indicate that Best Buy does not encountermany problems when selling their inventory.

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Related questions

SEC 10K: Income Statement - COSTCO

Locate the income statement in your company’s most recent 10-K,and respond to the following questions. Sometimes the incomestatement is called Consolidated Statements of Earnings,Consolidated Statements of Operations, or somethingsimilar.

http://phx.corporate-ir.net/phoenix.zhtml?c=83830&p=irol-SECText&TEXT=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9maWxpbmcueG1sP2lwYWdlPTEwNTI0MTM0JkRTRVE9MCZTRVE9MCZTUURFU0M9U0VDVElPTl9FTlRJUkUmc3Vic2lkPTU3#sD5DA86177F33EC84CEA9D3EF14FC1730

By the way, you should ignore the Statement of ComprehensiveIncome because that's a financial statement covered in moreadvanced accounting classes. We won't be doing anything with thatstatement in our introductory accounting class.

Category: Revenue and Net Income

Identify the following amounts for the two most recentyears:

Net Sales (or Total Sales if your company has more than onesource of revenue) Some companies use the term Revenue instead ofSales.

Cost of Goods Sold (aka Cost of Products, Cost of Sales, Cost ofServices, etc.)

Gross Profit (aka Gross Margin)

Category: Analysis

Calculate the following ratios (show and label yourcalculations) for the two most recent years and comment on theresults of your ratio analysis.

Gross profit margin = Gross profit ÷ Net sales × 100

Net profit margin = Net income ÷ Net sales × 100

Example: Johnson & Johnson (J&J)

Use this example as a guide for answering these discussionquestions for your company. For this example, please refer to theJ&J's Consolidated Statements of Earnings on page 21of its 2014 10-K.

2014 2013 Calculation
Sales to customers $74,331 $71,312 amount given in 10-K
Cost of products sold 22,746 22,342 amount given in 10-K
Gross profit $51,585 $48,970 Sales − Cost of products sold

And here are J&J’s ratios:

2014 2014 Calculation 2013 2013 Calculation
Gross profit margin 69.4% 51,585 ÷ 74,331 × 100 68.7% 48,970 ÷ 71,312 × 100
Profit margin 22.0% 16,323 ÷ 74,331 × 100 19.4% 13,831 ÷ 71,312 × 100

Hello,

When attempting to access the Study Guide/Workbook to AccompanyManagerial Accounting (1st edition), I need assistance. In thet-tables, h. is showing to be $46,700. However when I read h. atthe top for given data, it reads "completed all jobs but one; thejob cost sheet for this job shows $2100 for direct materials $2000for direct labor $4100 applied overhead". Can you please help me tounderstand where the $46700 is coming from? Is there a formula? Iam trying to complete the work in process inventory and finishedgoods inventory t-tables.

Thank you in advance for your assistance.

Question:

Study Guide/Workbook to accompany Managerial Accounting (1stEdition)

Chapter 2, Problem 5PSA

Problem

Recording Manufacturing Costs and AnalyzingManufacturing Overhead

Christopher’s Custom Cabinet Company uses a job order costingsystem with overhead applied as a percentage of direct labor costs.Inventory balances at the beginning of 2009 follow:

Raw materials inventory

$15,000

Work in process inventory

5,000

Finished goods inventory

20,000

The following transactions occurred during January:

(a) Purchased materials on account for $26,000.

(b) Issued materials to production totaling $22,000, 90percent of which was traced to specific jobs and the remaindertreated as indirect materials.

(c) Payroll costs totaling $15,500 were recorded asfollows:

$10,000 for assembly workers

3,000 for factory supervision

1,000 for administrative personnel

1,500 for sales commissions

(d) Recorded depreciation: $6,000 for machines, $1,000for office copier.

(e) Had $2,000 in insurance expire, allocated equallybetween manufacturing and administrative expenses.

(f) Paid $6,500 in other factory costs in cash.

(g) Applied manufacturing overhead at a rate of 200percent of direct labor cost.

(h) Completed all jobs but one; the job cost sheet forthis job shows $2,100 for direct materials, $2,000 for directlabor, and $4,000 for applied overhead.

(i) Sold jobs costing $50,000; the company usescost-plus pricing with a markup of 30 percent.

Required:

1.Set up T-accounts, record the beginningbalances, post the January transactions, and compute the finalbalance for the following accounts:

Raw Materials Inventory

Work in Process Inventory

Finished Goods Inventory

Cost of Goods Sold

Manufacturing Overhead

Selling and Administrative Expenses

Sales Revenue

Other accounts (Cash, Payables, etc.)

2. Determine how much gross profit the companywould report during the month of January beforeany adjustment is made for the overhead balance.

3. Determine the amount of over–or underappliedoverhead.

4. Compute adjusted gross profit assuming thatany over–or underapplied overhead balance is adjusted directly toCost of Goods Sold.

Step-by-step solution

Step 1 of 1

Req. 1

Raw Materials Inventory

Work in Process Inventory

Finished Goods Inventory

1/1 15,000

b. 22,000

1/1 5,000

h. 46,700

1/1 20,000

i. 50,000

a. 26,000

b. 19,800

h. 46,700

Bal. 19,000

c. 10,000

Bal. 16,700

g. 20,000

Bal. 8,100

Cost of Goods Sold

Manufacturing Overhead

Selling and Administrative Expenses

i. 50,000

b. 2,200

g. 20,000

c. 2,500

c. 3,000

d. 1,000

d. 6,000

e. 1,000

e. 1,000

Bal. 4,500

f. 6,500

Bal. 1,300 Overapplied

Sales Revenue

Other Accounts

(Cash, Payables, etc.)

i. 65,000

i. 65,000

a. 26,000

c. 15,500

d. 7,000

e. 2,000

f. 6,500

Bal. 8,000

Supporting Calculations:

b. Direct Materials $22,000 x 90% = $19,800;

Indirect Materials $22,000 x 10% =$2,200

c. Selling and administrative salaries = $1,000 + $1,500 =$2,500

g. Applied manufacturing overhead = $10,000 X 200% = $20,000

h. Ending Balance in WIP = $2,100 + $2,000 + $4,000 = $8,100

Cost of Goods Manufactured = $5,000 +$19,800 + $10,000 + $20,000 - $8,100 =

$46,700

i. Sales Revenue = $50,000 X 1.3 = $65,000

Req. 2

Unadjusted gross profit = $65,000 - $50,000 = $15,000

Req. 3

Manufacturing overhead is $1,300 overapplied.

Req. 4

Adjusted gross profit = $65,000 – ($50,000 - $1,300) =$16,300

Comment

Part 01:

The Catty Wampus Clothing Division manufactures footballjerseys. Catty’s, named after the company’s founder, primarycustomers are sporting goods stores that supply uniforms to youthfootball teams. Following is the Catty Wampus income statement for2016:

Catty Wampus Clothing Division IncomeStatement
Year Ended December 31, 2016

Sales Revenue 1500000

Cost of Goods Sold 700000

Gross Profit 800000
Selling and Administrative Expenses 500000

Operating Income 300,000

300,000

Case 04 Due: April 21, 2017 75 points

Part 01
Due Beginning of Class Tuesday, April 11

Current Status

In 2016, Catty produced and sold 200,000 football jerseys. Ofthe Cost of Goods Sold, $150,000 is fixed; 80% of the Selling andAdministrative Expenses are fixed. Since the business is highlyseasonal there were no beginning inventories on January 1,2016.

Option 1

The division is operating at 100,000 jerseys below fullproduction capacity and is considering increasing advertising toincrease sales to the production capacity level. The marketingdirector predicts that an additional $100,000 expenditure foradvertising would increase sales to 300,000 jerseys per year.

Option 2

The sales manager has been negotiating with buyers for severalnational sporting goods retailers and recommends the divisionexpand production capacity to 400,000 jerseys in order to securelong-term contracts. The expansion is expected to increase fixedmanufacturing costs by $200,000 per year.

Additionally, since the retailers would be signing long termcontracts to purchase jerseys they are requesting a higher-qualityjersey, and the changes to the jersey materials and manufacturingprocess would increase variable manufacturing costs by $1 perjersey for the additional 200,000 jerseys. (The original 200,000jerseys manufactured and sold would not be affected by thischange.)

3. Assume Catty had actually made 215,000 jerseys during 2016and had a remaining inventory of 15,000 units in stock. a. Preparenew absorption and variable costing income statements for 2016 andassume the 215,000 jerseys produced were within the relevant range.b. Comment on the reason for the difference in net income betweenthe variable and absorption income statements and reconcile thedifference.

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