Bluebird Mfg

question 118

Multiple Choice

Bluebird Mfg.has received a special one-time order for 15,000 bird feeders at $3 per unit.Bluebird currently produces and sells 75,000 units at $7.00 each.This level represents 80% of its capacity.These bird feeders would be marketed under the wholesaler's name and would not affect Bluebird's sales through its normal channels.Production costs for these units are $3.50 per unit,which includes $2.25 variable cost and $1.25 fixed cost.If Bluebird accepts this additional business,the incremental cost will be:

• A)$45,000.
• B)$11,250.
• C)$38,750.
• D)$7,500.
• E)$33,750.

Recognize the importance of noncash investing and financing activities and their disclosure.

Identify the presentation order of activities on the statement of cash flows.

Understand the adjustments required to reconcile net income to net cash provided by operating activities under the indirect method.

Comprehend the requirements for reporting cash and cash equivalents in the statement of cash flows.

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Definitions:

Financial Statement Analysis

The process of examining and interpreting a company’s financial statements to gauge its performance, strength, and profitability.

Circular Analysis

A method of analysis in which variables are interconnected through a series of equations, allowing for multiple variables to be solved simultaneously.

Horizontal Analysis

A financial analysis technique that involves the comparison of historical financial data over a series of reporting periods, to identify trends and growth patterns.

Income Statement

A financial statement that shows a company's revenues, expenses, and net income over a specific period, reflecting the company's financial performance.