Nining Case
Essay by lee • October 25, 2011 • 268 Words (2 Pages) • 1,468 Views
Advanced Management Accounting, R. S. Kaplan, A. A. Atkinson,
International Edition, Third Edition, Prentice Hall International, Inc, 1998
p. 486.
Required
(1) Determine the profit the K&S Construction Company for this sale.
Construction Company to Mr. Baxter.
Price of new house $200,000
Trade-in form old house 50,000
Cash(From mortgage) 150,000
Value received
Cash $150,000
Trade-in 40,000
Total $190,000
Cost of building new house 160,000
Profit $ 30,000
* Cost of repairing roof & basement are $4,000 & $2,000 should be blamed to Columbus Remodeling Company .
(2) What should the charge be for fixing up the house.
At boom season：10000+6000
off-season：16000<charge<13000
(3) Who should be charged with the fixing-up cost?Why? Are there any changes in procedures you would suggest?
Both K&S Construction Company and Columbus Remodeling Company should be charged with the fixing-up cost .Because K&S Construction Company should be responsible for the appraisal of Trade-in form old house，and Columbus Remodeling Company should be responsible for the Cost of repairing roof & basement.
Although close cooperation, they have grown to be independent and inside company compete with outside
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