Assuming that we are in December 2016, we have the following information about a company that sells shirts and shoes (the data is in thousands of dollars). The company has a second warehouse (B) to save their products. In the Real Estate market, the rental of this store is $900 per month, or what is the same as $10.800 per year. Finally, if the owner wouldnât have inherited this business, he would have earned $25.000 a year as an employee (assume that the owner inherited the company and, therefore, had to give up his job).
Find for each year
a) the explicit cost (explicit cost) and the implicit cost (implicit cost).
2014
2015
2016
Income from sales of shirts
$120
$120
$150
Income from sales of shoes
20
20
30
Income from Warehouse rent (A)
25
25
25
Maintenance of sewing machines
20
35
45
Payroll Payments
50
60
65
Tax Payment
34
35
37
Bank Tax Payment
10
11
12
Assuming that we are in December 2016, we have the following information about a company that sells shirts and shoes (the data is in thousands of dollars). The company has a second warehouse (B) to save their products. In the Real Estate market, the rental of this store is $900 per month, or what is the same as $10.800 per year. Finally, if the owner wouldnât have inherited this business, he would have earned $25.000 a year as an employee (assume that the owner inherited the company and, therefore, had to give up his job).
Find for each year
a) the explicit cost (explicit cost) and the implicit cost (implicit cost).
| 2014 | 2015 | 2016 | |
| Income from sales of shirts | $120 | $120 | $150 |
| Income from sales of shoes | 20 | 20 | 30 |
| Income from Warehouse rent (A) | 25 | 25 | 25 |
| Maintenance of sewing machines | 20 | 35 | 45 |
| Payroll Payments | 50 | 60 | 65 |
| Tax Payment | 34 | 35 | 37 |
| Bank Tax Payment | 10 | 11 | 12 |
Related textbook solutions
Related questions
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Now that operations for outdoor clinics and TEAM events are running smoothly, Suzie thinks of another area for business expansion. She notices that a few clinic participants wear multiuse (MU) watches. Beyond the normal timekeeping features of most watches, MU watches are able to report temperature, altitude, and barometric pressure. MU watches are waterproof, so moisture from kayaking, rain, fishing, or even diving up to 100 feet won't damage them. Suzie decides to have MU watches available for sale at the start of each clinic. The following transactions relate to purchases and sales of watches during the second half of 2016. All watches are sold for $303 each. |
| Jul. | 17 | Purchased 53 watches for $8,109 ($153 per watch) on the account. |
| Jul. | 31 | Sold 43 watches for $13,029 cash. |
| Aug. | 12 | Purchased 43 watches for $7,009 ($163 per watch) cash. |
| Aug. | 22 | Sold 33 watches for $9,999 on the account. |
| Sep. | 19 | Paid for watches ordered on July 17. |
| Sep | 27 | Received full payment for watches sold on account on August 22. |
| Oct. | 27 | Purchased 83 watches for $14,359 ($173 per watch) cash. |
| Nov. | 20 | Sold 93 watches for $28,179 cash. |
| Dec. | 4 | Purchased 106 watches for $19,398 ($183 per watch) cash. |
| Dec. | 8 | Sold 43 watches for $13,029 on the account. |
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Calculate sales revenue, cost of goods sold and ending inventory as of December 31, 2016, assuming Suzie uses FIFO to account for inventory. |
Sales Revenue: _____?______
Cost of Goods Sold: ______?________
Ending Inventory: ________?_________
Prepare the gross profit section of a partial income statement for transactions related to MU watches.
GREAT ADVENTURES, INC.
Partial Income Statement
For the Year Ended December 31, 2016
Sales Revenue: _______?_________
Cost of Goods Sold: _________?___________
Gross Profit: ______?________
