Gladwell Company enters into a contract to build specialized production equipment for Malcolm Manufacturing for $1,250,000. Malcolm would like the equipment delivered as soon as possible so it offers Gladwell a performance bonus for early delivery of the equipment. According to the contract, Malcolm will pay a performance bonus of $100,000 if Gladwell is able to complete the equipment by March 1, 20X6. The performance bonus is reduced by 20% for each of the first three weeks after March 1, 20X6. If the completion is delayed more than three weeks, then Gladwell forfeits the entire performance bonus.
Gladwell's prior experience with performance bonuses on similar contracts indicates the following probabilities of completion outcomes:

Completed by Probability
March 1, 20X6 50%
March 8, 20X6 20%
March 15, 20X6 10%
March 22, 20X6 15%
March 22, 20X6 5%

How much should Gladwell record as the transaction price of the contract?

a) $1,328,000 b) $1,250,000 c) $1,265,500 d) $1,350,000

Aproduct has a demand of 4000 units per year. ordering cost is $20, and holding cost is $4 per unit per year. the cost-minimizing solution for this product is to order: ? a. 200 units per order. b. all 4000 units at one time. c. every 20 days. d. 10 times per year. e. none of the above

2. which of the following statements about interest is true? a. interest is a one-time fee that you pay for lending money. b. interest is expressed as a percentage of the amount you are borrowing. c. because interest rates tend to be small numbers, they typically don't have much effect on the price of the goods you're purchasing. d. interest is a penalty that you pay when you don't pay your bills on time.

Exercise 6-2 variable costing income statement; explanation of difference in net operating income [lo6-2] ida sidha karya company is a family-owned company located on the island of bali in indonesia. the company produces a handcrafted balinese musical instrument called a gamelan that is similar to a xylophone. the gamelans are sold for $970. selected data for the company’s operations last year follow: units in beginning inventory 0 units produced 200 units sold 180 units in ending inventory 20 variable costs per unit: direct materials $ 130 direct labor $ 300 variable manufacturing overhead $ 30 variable selling and administrative $ 15 fixed costs: fixed manufacturing overhead $ 63,000 fixed selling and administrative $ 25,000 the absorption costing income statement prepared by the company’s accountant for last year appears below: sales $ 174,600 cost of goods sold 139,500 gross margin 35,100 selling and administrative expense 27,700 net operating income $ 7,400 required: 1. under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. prepare an income statement for last year using variable costing.