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Saturday, 29 November 2014

Tom’s Tax Services is a small accounting firm that offers tax services to small businesses and individuals. A local store owner has approached Tom about doing his taxes but is concerned about the fees Tom normally charges. The costs and revenues at Tom’s Tax Services are presented below: TOM’S TAX SERVICES Annual Income Statement Sales revenue $ 720,000 Costs Labor 477,000 Equipment lease 50,400 Rent 43,200 Supplies 32,400 Tom’s salary 75,000 Other costs 22,800 Total costs $ 700,800 Operating profit (loss) $ 19,200 If Tom gets the store’s business, he will incur an additional $60,000 in labor costs. Tom also estimates that he will have to increase equipment leases by about 10 percent, supplies by 5 percent, and other costs by 15 percent. Required: a. What are the differential costs that would be incurred as a result of adding this new client?

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Tom’s Tax Services is a small accounting firm that offers tax services to small businesses and individuals. A local store owner has appr...

Assume that Carmen's Cookies is preparing a budget for the month ending September 30. Management prepares the budget by starting with the actual results for April that are shown below. Then, management considers what the differences in costs will be between April and September. CARMEN'S COOKIES Retail Responsibility Center Actual Costs For the Month Ending April 30 Actual (April) Food Flour $ 1,600 Eggs 5,000 Chocolate 1,300 Nuts 2,000 Other 1,800 Total food $ 11,700 Labor Manager $ 3,000 Other 1,200 Total labor $ 4,200 Utilities 1,500 Rent 5,000 Total cookie costs $ 22,400 Number of cookies sold 25,000 Management expects cookie sales to be 15 percent greater in September than in April, and it expects all food costs (e.g., flour, eggs) to be 15 percent higher in September than in April because of the increase in cookie sales. Management expects “other” labor costs to be 28 percent higher in September than in April, partly because more labor will be required in September and partly because employees will get a pay raise. The manager will get a pay raise that will increase the salary from $3,000 in April to $3,300 in September. Utilities will be 3 percent higher in September than in April. Rent will be the same in September as in April. Now, fast forward to early October and assume the following actual results occurred in September: Required: a. Prepare a statement that compares the budgeted and actual costs. (Round your final answers to nearest whole dollar. Negative amounts should be indicated by a minus sign.)

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Assume that Carmen's Cookies is preparing a budget for the month ending September 30. Management prepares the budget by starting wit...

Tom’s Tax Services is a small accounting firm that offers tax services to small businesses and individuals. A local store owner has approached Tom about doing his taxes but is concerned about the fees Tom normally charges. The costs and revenues at Tom’s Tax Services are presented below: TOM’S TAX SERVICES Annual Income Statement Sales revenue $ 738,000 Costs Labor 466,000 Equipment lease 50,300 Rent 42,900 Supplies 32,300 Tom’s salary 74,500 Other costs 20,900 Total costs $ 686,900 Operating profit (loss) $ 51,100 If Tom gets the store’s business, he will incur an additional $59,800 in labor costs. Tomalso estimates that he will have to increase equipment leases by about 5 percent, supplies by 10 percent, and other costs by 10 percent.

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Tom’s Tax Services is a small accounting firm that offers tax services to small businesses and individuals. A local store owner has appr...

KC Services provides landscaping services in Edisont. Kate Chen,, the owner, is concerned about the recent losses the company has incurred and is considering dropping its lawn services

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KC Services provides landscaping services in Edisont. Kate Chen,, the owner, is concerned about the recent losses the company has incurr...