Draw a straight line using the high and low activity levels from these data. If we serve 100 customers, we will need to purchase food (direct materials) for the 100 meals we serve. So if our cost of goods sold per meal is $4, we would spend $40... Read more
Overtime pay is time and one-half for hours worked over 40 per workweek. Direct students to Simulation 2-Using Your W-2 to File Your 1040EZ. Explain to students they will use information from Form W-2 to complete Form 1040EZ for Cicely King, who rec... Read more
For the second formula, we need to compute the average accounts receivable per day and the average credit sales per day. Average accounts receivable per day can be calculated as average accounts receivable divided by 365, and Average credit sales pe... Read more
Different vendors have different payment terms, so you should use this to your advantage. Every startup needs three traditional financial statements as part of their financial models. The statements need to be prepared using generally accepted accou... Read more
If the executive, manager or department cannot change or control the cost, it is an uncontrollable cost. An example of an uncontrollable cost would be an allocation of administrative expenses to each job or department. Fixed costs are not relevant b... Read more
Keep an eye on cash flow, and take the measures needed to ensure that it does not become a problem you have to deal with when it comes to your business. When using GAAP, this section also includes dividends paid, which may be included in the operati... Read more
In conclusion, the standard chart of account is useful for analyzing past transactions and using historical data to forecast future trends. You can use the following example of chart of accounts to set up the general&nbs... Read more
The net profit margin ratio is calculated as net income divided by net sales. This ratio measures the proportion of sales revenue that translates into net profit, revealing the company's overall profitability and financial performance. This ratio me... Read more
The primary goal of a cash book is to manage cash efficiently, making it easy to determine cash balances at any point in time, allowing managers and company accountants to budget their cash effectively when needed. A general ledger contains all of... Read more
Therefore, the accountant will identify any increases and decreases to asset and liability accounts that need to be added back to or removed from the net income figure, in order to identify an accurate cash inflow or outflow. If the inventory accoun... Read more
