Raneiro & Sons buys T-shirts in bulk, applies its own trendsetting silk-screen designs, and then...
Question:
Raneiro & Sons buys T-shirts in bulk, applies its own trendsetting silk-screen designs, and then sells the T-shirts to a number of retailers. Raneiro wants to be known for its trendsetting designs, and it wants every teenager to be seen in a distinctive Raneiro T-shirt. Raneiro presents the following data for its first 2 years of operations, 2011 and 2012.
| 2011 | 2012 | |
|---|---|---|
| 1. Number of T-shirts purchased | 213,060 | 253,000 |
| 2. Number of T-shirts discarded | 12,060 | 14,500 |
| 3. Number of T-shirts sold (row 1-row 2) | 201,000 | 238,500 |
| 4. Average selling price | $28 | $29 |
| 5. Average cost per T-shirt | $13 | $11 |
| 6. Administrative capacity (# of customers) | 4,300 | 4,050 |
| 7. Administrative costs | 1,419,000 | 1,377,000 |
| 8. Admin cost per customer (row 7 / row 6) | $330 | $340 |
Administrative costs depend on the number of customers that Raneiro has created capacity to support, not on the actual number of customers served. Raneiro had 3,900 customers in 2011 and 3,800 customers in 2012.
1. Calculate Raneiro's operating income in both 2011 and 2012.
2. Calculate the growth, price-recovery, and productivity components that explain the change in operating income from 2011 to 2012.
3. Comment on your answers in requirement 2. What does each of these components indicate?
Income Statement:
The income statement is also known as the profit or loss statement as a result of the operation. It will show the total sold, whether it is in cash or credit, less all the cost of good sold, taxes, and other expenses.
Answer and Explanation: 1
Become a Study.com member to unlock this answer! Create your account
View this answer1. Calculate Raneiro's operating income in both 2011 and 2012.
| 2011 | 2012 | |
| Revenue | $5,628,000 | $6,916,500 |
| Cost of T-shirts purchased | ($2,769,780) | ($2... |
See full answer below.
Ask a question
Our experts can answer your tough homework and study questions.
Ask a question Ask a questionSearch Answers
Learn more about this topic:
Get access to this video and our entire Q&A library
Operations of an Income Statement
from
Chapter 8 / Lesson 5
6.2K
An income statement demonstrates the company's income and expenses over a given timeframe, used to reflect performance. Learn the operations of income statements in multi vs single-steps and the details of the line items they use.
Related to this Question
- A. SallyMay, Inc., designs and manufactures T-shirts. It sells its T-shirts to brand name clothes retailers in lots of one dozen. SallyMay's May 2013 static budget and actual results for direct inputs
- A) A company selling t-shirts to FIU students purchases blank t-shirts for $5. They bought a machine to customize t-shirts for $10,000. Their estimate of the cost of additional material and labor to customize the shirts is $1.50 per shirt. What is the var
- Gerald/Brooke, Ltd. manufactures shirts, which it sells to customers for embroidering with various slogans and emblems. The standard cost card for the shirts is as follows. Standard Price Standard Qu
- Dino's, Inc., makes a variety of T-shirts with logos. The company has discovered a new market for sweatshirts with logos. Market research indicates that a sweatshirt like this would sell well in the m
- Gerald/Brooke, Ltd. manufactures shirts, which it sells to customers for embroidering with various slogans and emblems. The standard cost card for the shirts is as follows. Standard Price Standard Quantity Standard Cost Direct materials $1.6 per yard 1.2
- Kandy Harts manufactures custom T-shirts. Each T-shirt can be imprinted front and back with photos, company logos or other information. Each T-shirt requires 2 ounces of ink, 15 minutes of direct labo
- Rhett Corporation manufactures and sells dress shirts. Each shirt (unit) requires 3 yards of cloth. Selected data from Rhett's master budget for next quarter are shown below: || ||April||May||June |Budgeted sales (in units)|26,000|28,000|32,000 |Budgeted
- Aerotrino produces and sells popular t-shirts. Following is information about its t-shirts for 2014: Selling price $15.00 per t-shirt Variable costs $3.50 per t-shirt Production (manufacturing costs)
- Kandy Harts manufactures custom T-shirts. Each T-shirt can be imprinted front and back with photos, company logos or other information. Each T-shirt requires 2 ounces of ink, 15 minutes of direct l
- Kandy Harts manufactures custom T-shirts. Each T-shirt can be imprinted front and back with photos, company logos or other information. Each T-shirt requires 2 ounces of ink, 15 minutes of direct la
- | | |Projected Sales in Units | | |T-Shirt Sizes |Sales Price |June| July |August | Youth |$12 |350 |450 |675 |Adult-regular| 16| 650| 825| 825 |Adult-oversized |17 |400 |550 |350 Company manufactu
- Sinclair Company manufactures T-shirts printed with tourist destination logos. The following table shows sales prices and projected sales volume for the summer? months: Prepare a sales budget for Sin
- TsIzzWe (Ts) is a company that purchases T shirts from the manufacturer, Frootyluums (Frooty) and sells them to college students through the college bookstore, Rskoolstore (RSkool). Ts has hired you t
- Jersey Manufacturing uses a distribution channel that includes wholesalers to retailers to the ultimate consumers. The Jerome Widget 1000 is priced to wholesale at $250.00. Jersey earns a 30% margin on each Widget 1000 unit. Jersey's wholesalers mark
- Donnelly Corporation manufactures and sells T-shirts imprinted with college names and slogans. Last year, the shirts sold for $7.50 each, and the variable cost to manufacture them was $2.25 per unit. The company needed to sell 20,000 shirts to break even.
- The NY Memorabilia Company produces a souvenir plate which normally sells for $79.95. The company produces 1,500 plates annually but has the capacity to produce 2,000 plates. A special order for manufacturing and selling 200 plates at $49.95 has been rece
- Huddell Company, which is both a wholesaler and retailer, purchases merchandise from various suppliers. The dollar-value LIFO method is used for the wholesale inventors. Huddell determines the estimat
- Jersey Manufacturing uses a distribution channel that includes wholesalers to retailers to the ultimate consumers. The Jerome Widget 1000 is priced to wholesale at $250.00. Jersey earns a 30% margin on each Widget 1000 unit. Jersey's wholesalers markup
- Jersey Manufacturing uses a distribution channel that includes wholesalers to retailers to the ultimate consumers. The Jerome Widget 1000 is priced to wholesale at $250.00. Jersey earns a 30% margin on each Widget 1000 unit. Jersey s wholesalers markup ea
- Baskin Promotions, Inc. sells T-shirts decorated for a variety of concert performers. The company has developed the following budget for the coming year based on a sales forecast of 83,000 T-shirts: |Sales|$1,454,990 |Cost of Goods Sold|$853,240 |Gross P
- SrarDares Ltd produces personalized T-shirts. Each shirt is designed for an individual customer and is ordered over the internet. The company's operating budget for September included these data: Th
- Stratton Ltd. manufactures shirts which it sells to customers for embroidering with various slogans and emblems. The standard cost card for the shirts is as follows:
- Jersey Manufacturing uses a distribution channel that includes wholesalers to retailers to the ultimate consumers. The Jerome Widget 1000 is priced to wholesale at $250.00. Jersey earns a 30% margin on each Widget 1000 unit. Jersey's wholesalers mar
- Jersey Manufacturing uses a distribution channel that includes wholesalers to retailers to the ultimate consumers. The Jerome Widget 1000 is priced to wholesale at $250.00. Jersey earns a 30% margin on each Widget 1000 unit. Jersey's wholesalers marku
- Jersey Manufacturing uses a distribution channel that incJersey Manufacturing uses a distribution channel that includes wholesalers to retailers to the ultimate consumers. The Jerome Widget 1000 is priced to wholesale at $250.00. Jersey earns a 30% margin
- Baskin Promotions, Inc. sells T-shirts decorated for a variety of concert performers. The company has developed the following budget for the coming year based on a sales forecast of 83,000 T-shirts:
- Baskin Promotions Inc. sells T-shirts decorated for a variety of concert performers. The company has developed the following budget for the coming year based on a sales forecast of 74,000 T-shirts: S
- Baskin Promotions, Inc. sells T-shirts decorated for a variety of concert performers. The company has developed the following budget for the coming year based on a sales forecast of 80,000 T-shirts:
- Baskin Promotions, Inc. sells T-shirts decorated for a variety of concert performers. The company has developed the following budget for the coming year based on a sales forecast of 78,000 T-shirts: Sales $1,363,440 Cost of Goods Sold 797,940 Gross Profit
- 1. O'Brien Enterprises produces giant stuffed bears. Each bear consists of $12 of variable costs and $9 of fixed costs and sells for $45. A wholesaler offers to buy 8,000 bears for $14 each, of which
- Whispering Inc., a manufacturer of steel school lockers, plans to purchase a new punch press for use in its manufacturing process. After contacting the appropriate vendors, the purchasing department r
- McCormick Industries manufactures T-shirts printed with tourist destination logos. The following table shows sales prices and projected sales volume for the summer months: Projected Sales in Units
- How many t-shirts Donnelly Corporation must sell in order to breakeven in that coming year?
- Lason Company manufactures silk dresses. The standard materials cost of the silk used in a particular design is $60 based on $24 per square yard. A production run of 1,000 dresses in June resulted in usage of 2,625 square yards of silk at a cost of $22 pe
- Deporte Company produces single-colored t-shirts. Materials for the shirts are dyed in large vats. After dying the materials for a given color, the vats must be cleaned and prepared for the next batch
- The Cat Corporation manufactures a variety of doodads for retail sale. The doodads carry one of several Cat name brands, and are normally distributed through wholesalers. Normal, Inc., a large retailer, has approached Cat with an offer to purchase 60,000
- Business Budget Project Bobcat Printing makes custom t - -- shirts and other promotional products for student organizations and businesses. It is beginning its first year of operations and needs to pl
- Gutterson Wholesale Company sells merchandise to a variety of retailers. Gutterson uses different freight terms with its various customers and suppliers. All sales are made on the account. Gutterson's
- Turnadot & Sons is a small wholesaler of decorative cast iron objects. The following events, related to a special customer order, occur as described below: August 5, 2005: Turnadot receives the special order for 200 outdoor planters at a selling price of
- Granger Tees is a manufacturer of T-shirts. The standard amount of 100% cotton jersey fabric used to make each T-shirt is 3.00 yards. The standard price per yard of the fabric is $2.52. During last month, Granger purchased 6,200 yards of the jersey fabric
- Splish Inc., a manufacturer of steel school lockers, plans to purchase a new punch press for use in its manufacturing process. After contacting the appropriate vendors, the purchasing department recei
- KLK Clothing Company manufactures professional clothing for women. In order to keep costs low while still producing quality clothes, KLK conducts many R&D projects. On a current project, KLK researchers used $40,000 of cotton and $25,000 of wool from its
- A wholesaler who takes over the whole marketing job nationally for one or a few manufacturers is called a: a. merchant wholesaler. b. manufacturers' agent. c. broker. d. specialty wholesaler. e. selling agent.
- The Wildhorse Company sells sports decals that can be personalized with a player's name, a team name, and a jersey number for $7.00 each. Wildhorse buys the decals from a supplier for $2.60 each and spends an additional $0.70 in variable operating costs p
- The Robinson Company sells sports decals that can be personalized with a player's name, a team name, and a jersey number for $7 each. Robinson buys the decals from a supplier for $2.10 each and spends
- The Robinson Company sells sports decals that can be personalized with a player's name, a team name, and a jersey number for $4 each. Robinson buys the decals from a supplier for $1.20 each and spends
- The Robinson Company sells sports decals that can be personalized with a player's name, a team name, and a jersey number for $6 each. Robinson buys the decals from a supplier for $1.80 each and spends
- Levy Quilting Company makes blankets that it markets through a variety of department stores. It makes the blankets in batches of 1,000 units. Levy made 26,000 blankets during the prior accounting peri
- Levy Quilting Company makes blankets that it markets through a variety of department stores. It makes the blankets in batches of 2,000 units. Levy made 28,000 blankets during the prior accounting peri
- A consumer purchases a toaster from a retailer for $60. The retailer's markup is 20%, and the wholesaler's markup is 15%, both based on the selling price. For what price does the manufacturer sell the product to the wholesaler?
- Pappy's Iced Tea makes iced tea that is sold in grocery stores in New York, NY. The product is created in the brewing department, then is sent off to the bottling department, where it is bottled and the bottles are labeled. The following information perta
- You are the buyer of steel plates for a large steel distributor. You are looking for a supplier of steel plates that your salespeople could sell in the marketplace for $625 per metric ton. If your objective is a 30% markup based on the selling price, what
- Westile company buys plain ceramic tiles and prints different designs on them for souvenir and gift stores. It buys the tiles from a small company in Europe, so at all times it keeps on hand a stock equal to the titles needed for three months' sales. The
- Westile company buys plain ceramic tiles and prints different designs on them for souvenir and gift stores. It buys the tiles from a small company in Europe, so at all times it keeps on hand a stock e
- Mounce, Inc. produces and sells free-standing quilt frames. In budgeting for production needs, the company requires that 10% of the next month's sales be on hand at the end of each month. Budgeted sal
- A retailer buys a pair of socks that were originally priced at $1 a pair including the manufacturer's profit margin of 7%. The exporter takes only a 3% margin on the socks, the wholesaler takes a 5% m
- Wynn, Inc. manufactures beanies. The budgeted units to be produced and sold are below: (Table). It takes 18 yards of yarn to produce a beanie. The company's policy is to maintain yarn at the end of each month equal to 5% of next month's production needs a
- After marketing the jackets for several years, the company is experiencing a falloff in demand due to an economic recession. A large retail outlet will make a bulk purchase of jackets if its label is sewn in and if an acceptable price can be worked out. W
- Maxley Markets Company sells logo sports merchandise and does custom embroidery. They are trying to decide whether or not to continue embroidery. The following information is available for the segments. Assume that all direct fixed costs could be avoided
- Business Description: Your project group will assume the role of young entrepreneurs to start a small company. Your company will rent a retail cart inside the Stoneridge Mall to buy plain T-shirts an
- Ellison Inc., a manufacturer of steel school lockers, plans to purchase a new punch press for use in its manufacturing process. After contacting the appropriate vendors, the purchasing department rece
- Donovan & Parents produce soccer shorts and jerseys for youth leagues. Most of the production is done by machine. Data on operations and costs for March follow: Jerseys Shorts Total Units produced 10
- Rickie Fowler produces extremely high-quality golf shirts with Dri-Fit technology that sell for $120 each. The total fixed costs for a month are $350,000. The variable costs per shirt are $50. Find the break-even point in sales units for Rickie. a. 5,000
- Waco Printing Company specializes in printing banners on a high-quality, nylon material that can withstand extreme temperatures. The company pays sale personnel a small base salary plus a large commission on each banner sold to encourage a large sales vol
- Logo Specialties manufactures, among other things, woolen blankets for the athletic teams of the two local high schools. The company sews the blankets from fabric and sews on a logo patch purchased fr
- Waco Printing Company specializes in printing banners on a high-quality, nylon material that can withstand extreme temperatures. The company pays sales personnel a small base salary plus a large commission on each banner sold to encourage a large sales vo
- Flounder Inc., a manufacturer of steel school lockers, plans to purchase a new punch press for use in its manufacturing process. After contacting the appropriate vendors, the purchasing de
- VisBright manufactures and sells televisions. The company's upstream division, Chip Division, builds chips that are placed behind screens to control the image displayed. Chip Division sells chips to VisBright's downstream division, Screen Division, at a t
- Handy Display Company manufactures display cases to be sold to retail stores. The cases come in three sizes: large, medium, and small. Currently, Handy Display Company uses a single plant-wide overhea
- Vi Kid, a maker of electronic games for kids, has just completed its first year of operations. The company's sales growth was explosive. To encourage large national stores to carry its products, Vi Kid offered 180-day financing - meaning its largest custo
- 1. Gund Manufacturing produces Teddy Bears and sells them for $6.50 each. A foreign retailer has offered to purchase 25,000 Teddy Bears for $4.00 per Teddy. The current average manufacturing cost per
- Palmer Cheese Company is a small manufacturer of several different cheese products. One product is a cheese spread sold to retail outlets. Susan Palmer must decide how many cases of cheese spread to manufacture each month. The probability that demand will
- Levy Quilting Company makes blankets that it markets through a variety of department stores. It makes the blankets in batches of 3,500 units. Levy made 35,000 blankets during the prior accounting period. The cost of producing the blankets is summarized a
- ou have been with Zaird & Associates for approximately three months and are completing your work on the BizCaz audit. BizCaz produces pullover knit shirts to address the business casual market for bot
- Stanton Co. produces and sells two lines of t-shirts, Deluxe and Mega. Stanton provides the following data: Compute the sales price and the sales volume variances for each product.
- KidVid, a maker of electronic games for kids, has just completed its first year of operations. The company"s sales growth was explosive. To encourage large national stores to carry its products, KidVid offered 180-day financing meaning its largest custome
- Sheridan Inc., a manufacturer of steel school lockers, plans to purchase a new punch press for use in its manufacturing process. After contacting the appropriate vendors, the purchasing department re
- Draw a supply chain by picking a manufactured product you buy somewhere. Then list at least 3 different types of suppliers to that manufacturer's plant and three different types of retail outlets or
- Yakima Manufacturing purchases trees from Cheney Lumber and processes them up to the split-off point where two products (paper and pencil casings) are obtained. The products are then sold to an independent company that markets and distributes them to reta
- Crimson Quilters makes decorative comforters, quilted garments, and other products in a small sewing factory. In 2018, the company expects to make 2,000 comforters. With respect to the comforters, how would the fabric use to make the comforters be classif
- T-Comm makes a variety of products. It is organized in two divisions, North and South. South Division normally sells to outside customers but, on occasion, also sells to the North Division. When it do
- Hillcrest manufactures a variety of clothing. The company has a single line of blouses that it produces in jobs, with each job representing an order from a customer. As a job is completed, the custome
- A computer store sells two types of computers, desktops, and laptops. The supplier demands that at least 150 computers be sold a month. In order to keep profits up the number of desktops sold must be
- Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. The company sells its birdcages through an extensive network of street vendors who receive commissions on their sales. The company uses a
- Dalton Quilting Company makes blankets that it markets through a variety of department stores. It makes the blankets in batches of 1,000 units. Dalton made 20,000 blankets during the prior accounting period. The cost of producing the blankets is summarize
- Assuming Westile Company buys plain ceramic tiles and prints different designs on them for souvenir and gift stores. It buys the tiles from a small company in Europe, so at all times it keeps on hand
- Corcetti Company manufactures and sells prewashed denim jeans. Large rolls of denim cloth are purchased and are first washed in a giant washing machine. After the cloth is dried, it is cut up into jean pattern shapes and then sewn together. The completed
- Keepsake Heirlooms, Inc., manufactures personalized baby quilts. An experienced embroiderer can personalize 14 quilts per hour. Because the repetitive nature of the sewing can lead to carpal tunnel syndrome, workers take a 15-minute break after every 14 q
- Odd Wallow Drinks is considering adding a new line of fruit juices to its merchandise products. This line of juices has the following prices and costs: Selling price per case (24 bottles) of juice $75
- FlatScreen manufactures LCD displays. The displays arc sold to PC manufacturers. The following is manufacturing overhead data for FlatScreen for the year ended December 31, 2016: Manufacturing overhead Actual results Flexible budget Applied amount Variabl
- Designs Company, a custom cabinet manufacturing company, is setting standard costs for one of its products. The main material is cedarwood, sold by the square foot. The current cost of the cedarwood is $6.00 per square foot from the supplier. Delivery cos
- Crimson Quilters makes decorative comforters, quilted garments, and other products in a small sewing factory. In 2018, the company expects to make 2,000 comforters. With respect to the comforters, how would the fabric used to make the comforters be classi
- A Purchasing agent for a particular type of silicon wafer used in the production of semiconductors must decide among three sources. Source A will sell the silicon wafers for $2.1 per wafer, independently of the number of wafers ordered. Source B will sell
- Suppose that Stillwater Designs has two classes of distributors: JIT distributors and nonJIT distributors. The JIT distributor places small, frequent orders, and t
- Watt Wholesale Company purchases merchandise from a variety of manufacturers and sells the merchandise to a variety of retailers. All sales are subject to a cash discount (2/10, n/30). Watt uses a per
- XL Corp. has excess manufacturing capacity. The company has received a special order from XS Company requesting 500 of XL's computer keyboards at a price of $65 each. The keyboards will require special engraving of SX's corporate logo. XS needs the keyboa
- Spring Waters, Inc., produces bottled drinks. The New York Division acquires the water, adds carbonation, and sells it in bulk quantities to the New Jersey Division of Spring Waters and to outside buyers. The New Jersey Division buys carbonated water in b
- Tuff Kids Jeans Co. sells blue jeans wholesale to major retailers across the country. Each pair of jeans has a selling price of $30 and $21 in variable costs of goods sold. The company has fixed manuf
- Ohno Company specializes in manufacturing and selling a unique model of bicycle helmet. The model is well accepted by consumers, and the company has enough orders to keep the factory production at 10,
- Casual Essentials, Inc. manufactures two types of team shirts, the Homerun, and the Goalpost, with unit contribution margins of S5 and $15, respectively. Regardless of type, each team shirts must be fed through a stitching machine to affix the appropriate
Explore our homework questions and answers library
Browse
by subject