Operating expense

selling price, variable costs per unit, fixed costs, units sold and operating income. According to Alvis (2016), CVP analysis expands the use of information provided by breakeven analysis. Therefore, this paper is going to address Swill Chocolate Company’s CVP analysis in details which includes the contribution margin per unit, the breakeven points in units and dollars, the calculation of margin of safety and degree of operating leverage, and the assumption on…

1, The operating leases will be on balance sheet as a lease liability, which means the distinction between operating lease and the finance lease will no longer exist. 2, A corresponding asset will be recognised, separately on balance sheet, which offsets the operating lease liability. 3, Operating cash flow will no longer include cash outflow on rent, and instead, rental cash flow will be in the financing activities category as “ principal and interest expenses”. 4, the expenses of rent will…

If under these conditions as a partnership, operating income will be taxed only once, so investors will receive $500,000 x (1-0.35) = $325,000. But as a corporation, operating income will be taxed once at the corporate level and again at the personal level at the capital gains tax rate of 15% percent, so investors will receive only $500,000 x (1-0.35)(1-0.15) = $276,250. The “corporate tax wedge” will be $48,750, or 9.75 percentage points. b. Now recalculate the tax disadvantage…

1. What is an operating segment? An operating segment is a management-approach-based segment. According to GAAP, an operating segment is a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses, including intersegment revenues and expenses; whose operating results are regularly reviewed by the enterprise’s CODM; and for which discrete financial information is available (textbook p. 490). 2. What is a reportable segment according to…

The components of a comprehensive budget are divided in two categories: The operating income, which includes all forms of recurring income and expenses; and the Capital Budget, which includes nonrecurring items. The purpose of the Operating Budget is in a comprehensive budget is to make clear the forms of income that the individual can count on, on a regular basis and the expenses that have to be made for each period. On the other hand, the capital budget exists for long term purchases and…

classifications of expenses as well as any paid interest and when interest or dividends are received. Knowing where and how to classify these components create a flow for any financial statement and also add a structure for all other reporting. This paper will examine the Starbucks Corporation fiscal year end statements and the income classifications throughout the annual reports given. Harold Averkamp…

ChixChops is five hundred thousand pesos (P 500,000). 2. Salaries expense of the employees is expected to increase 2 % per annum. This is based on the inflation rate given by Bangko Sentral ng Pilipinas for the year 2016 – 2020. 3. Clothing expenses of employees are expected to increase every 2 years by 2%. 4. Utilities expense is expected to increase by 2% annually. 5. Advertising expense is expected to increase 2% annually. 6. Rent expense is expected not to increase for the first five years.…

Analysis: the Gross Income Margin increase in 2011 as a result in an increase in interest margin this means that there are enough money from the earring asset to cover the interest expense , Higher ratio represents a more effective use of assets , the net interest income increased by 22 over 2010, increase in other operating income and a little decrease in the net fees and commission by 3.5 over 2010, a decrease in the Net Gains (Losses) on Other Securities by .08, an increase in Net Gains…

for advertisement their cash flow will decrease but the account advertisements expenses can increase. Connections between an income statement and Balance sheet Each of the financial statements is on separate sheets for the annual financial report, here is a quick explanation how they working from the top to the bottom. Here is a summary which explains the lines, looking at the top and going down:  Sales acquiring expense for sales it requires businesses to maintain working balance.  To make…

The elements affected includes Asset and Expense. In the balance sheet, the cash increase due to Prepaid Rent would be recorded as an asset, however with each rent paid in advance by the business, it will be recorded as a reduction in cash. Rent being paid in advance will be recorded as operating activities for the business in the statement of cash flows. Once rent has expired, a reduction will be incurred which is then determined as Rent Expense for the business in the income statement. 4…