Required an income statement, assuming that 95 stadens enroll in s Prepare an eo

Question

Required an income statement, assuming that 95 stadens enroll in s Prepare an eost of Prepare an income staterment, assuming that 115 studeets atempt to euroll in the cou Notc that five students are turned away becatse of too few of lost profit resulting from the inability to serve the five additional r textbooka Determine the amoun studet Problem 1-25A CMA Review, Inc., provides review c CMA exam. The cost of textbooks is included in the registration fee Text stant updating and is useful for only one course. To minimize Using JIT to minimize waste and lost courses twice each year that textbooks can be produced throagh a high-speed copying procew thae permits ie riue foe elass to start. The cost of books made using this process however a that all books must be made using the same production process In oe e. Suppose that textbooks can be produced t opportunity fr students itudin delivery junt in ise Soe class to start $90 each. Assume t words, CMA Review cannot order some of the books using the rest using the high-speed process Prepare an income statemrnt under the IIT systern ing that 9 ncome statement prepared in Requircment a. Comment on bow the SIT ult de studying to sake de$ material equies co printing costs and ensure availability regular copy proon and the oosts and encom- re the income statement weder IIT with the system would affiect weeks in afvpoerne the cass. Io ensure that enough books are available CMA Re- i than expocted enrolliment. Usually there is an oversupply and book prolitability mally orders are thrown away. Homevet, demand occasionally exceeds expectations by more than 10 perAssume the same facts as in Requirement c with respoct to a JIT system that enables immedi and there are too few books available forstudent use. CMA Review has been forced to turn away students because of a lack of textbooks CMA Review expects to enroll approximatel dents per courne. The tuition fee is $1,500 per stadent. The cost of teachers is $36,000 per eourse.with the income statement prepared in Requinement&Comment; on how the IIT system exibuoks cost 580 each, and other oper ate delivery of books at a cost of $90 each. Prepare an income statement under the ITT sys em, assiaming that 115 students enroll in a coursc. Compase the incoese statement eoder IIT it are estimated to be $40,000 per course extbuoks cost s80 each, and other operiting espenses would affect profitability . Discuss the possible effect of the JIT system on the level of custoener satiofaction. a. 95 register b. only 110 can register b 115 can register c.95 register under JITd. 115 register under Jin S1,500r95 $142,500 Revenue 8000 Cost of textbooks Cost of teachers Other operating expenses 36,000 40,000 36,000 40,000 36,000 40,000 36,000 40,000 36,000 40,000 84.800 S77o Total expenses Net income

Explanation / Answer

c. on comparing the profits of a & c it has been that even when surplus units have been purchased in part a, profits are more than in JIT system (part c). So simple system should be followed.

d. on comparing simple system in pt b & JIT system in ptd, profits are moe in simple system. So JIT system should not be followed

e. As in JIT system textbooks are readily available. So in this system no customer would be returned back. So customer satisfaction would be higher in JIT system

a. 95 register b. only 110 can register b. 115 can register c. 95 register under JIT d. 115 register under JIT Revenue $1500*95 =$142500 $1500*110 =$165000 $1500*115 =$172500 $1500*95 =$142500 $1500*115 =$172500 Expense Cost of textbooks $80*110 =$8800 $8800 $80*115 =$9200 $90*95 =$8550 $90*115 =$10350 Cost of teachers $36000 $36000 $36000 $36000 $36000 Other opeating exp $40000 $40000 $40000 $40000 $40000 Income $75300 $80200 $87300 $57950 $86150

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