Answer:
$51,700
Explanation:
The computation of ending inventory cost is shown below:-
Product cost per unit = Direct material + Direct labor + Variable factory overhead + Fixed factory overhead
= $20 + $15 + $8 + $4
= $47
Ending inventory, February = 10,000 + 10,000 - 9,500 - 9,400
= 1,100
Ending inventory value under absorption costing = Product cost per unit × Ending inventory, February
= $47 × 1,100
= $51,700
Therefor for computing the ending inventory value under absorption costing we simply applied the above formula.
The risk-free rate, average returns, standard deviations, and betas for three funds and the S&P 500 are given below. Fund Avg Std Dev Beta A 17.5 % 26.5 % 1.35 B 12.5 % 23.5 % 1.10 C 13.5 % 20.5 % 1.15 S&P 500 10 % 15 % 1 rf 4.0 % If these portfolios are subcomponents that make up part of a well-diversified portfolio, then portfolio ______ is preferred.
Answer:
Portfolio A is preferred.
Explanation:
Given the following sorted data from the question:
Fund Avg Std Dev Beta
A 17.5% 26.5% 1.35
B 12.5% 23.5% 1.10
C 13.5% 20.5% 1.15
S&P 500 10% 15% 1
rf 4.0%
To determine the preferred portfolio, the Treynor measure for each portfolio is estimated as follows:
Treynor measure = (Avg - rf rate) / beta
Therefore, we have:
Treynor measure of Portfolio A = (17.5% - 4.0%) / 1.35 = 10.00%
Treynor measure of Portfolio B = (12.5% - 4.0%) / 1.10 = 7.73%
Treynor measure of Porfolio C = (13.5% - 4.0%) / 1.15 = 8.26%
Since the 10% Treynor measure of Portfolio A is the highest, Portfolio A is preferred.
The Assembly Department started the month with 78,000 units in its beginning Work in Process Inventory. An additional 254,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 21,000 units in the ending Work in Process Inventory of the Assembly Department.
How many units were transferred to the next processing department during the month?
Answer:
Outflow from assembly= 311,000 units
Explanation:
The assembly department in this scenario handles the work in process part of production.
Production involves different stages that includes: Raw material, work in process, finished goods.
Products flow through these different stages.
To calculate the amount transferred out we need to first calculate total WIP within the month
Total WIP= Inflow of product + Beginning inventory
Total WIP= 254,000 + 78,000
Total WIP= 332,000
Outflow from assembly= Total WIP - Ending WIP
Outflow from assembly= 332,000 - 21,000
Outflow from assembly= 311,000 units
Final answer:
To calculate the number of units transferred to the next processing department, subtract the Ending Work in Process Inventory from the sum of the Beginning Work in Process Inventory and the units added. A total of 311,000 units were transferred out during the month.
Explanation:
To determine the number of units transferred to the next processing department during the month, we should use the following formula for units in production:
Units Transferred Out = Units at the beginning + Units added - Ending Work in Process Inventory
In this case:
Units at the beginning (Beginning Work in Process Inventory) = 78,000 unitsUnits added (transferred in from the prior department) = 254,000 unitsEnding Work in Process Inventory = 21,000 unitsTo calculate:
Units Transferred Out = 78,000 + 254,000 - 21,000
Units Transferred Out = 311,000 units
Therefore, 311,000 units were transferred to the next processing department during the month.
Concord Corporation sells a product for $50 per unit. The fixed costs are $760000 and the variable costs are 60% of the selling price. As a result of new automated equipment, it is anticipated that fixed costs will increase by $120000 and variable costs will be 50% of the selling price. The new break-even point in units is:
Answer:
35,200
Explanation:
The BEP which is the break even point is the point where the company's sales or revenue generated is equal to the cost incurred. As such, the BEP is the number of units that must be sold for the company to make neither a profit nor a loss.
Both sales and variable cost are dependent on the number of units sold.
The sales less the variable cost gives the contribution margin. The contribution margin less the fixed cost gives the net operating income.
With the purchase of the new equipment,
Fixed costs = $760000 + $120000
= $880,000
Variable cost per units
= 50% * $50
= $25
Let the number of units to break even be t
t(50 - 25) = 880,000
t = 880,000/25
= 35,200 units
In 2020, Sandhill Co. reported a discontinued operations loss of $1160000, net of tax. It declared and paid preferred stock dividends of $120000 and common stock dividends of $355000. During 2020, Sandhill had a weighted average of 500000 common shares outstanding. As a result of the discontinued operations loss, net of tax, the earnings per share would decrease by
Answer:
$2.32
Explanation:
Data provided
Discontinued operations loss = $1,160,000
Common shares outstanding = 500,000
The computation of earnings per share is shown below:-
Decrease in earning per share due to loss in discontinued operations = Discontinued operations loss ÷ common shares outstanding
= $1,160,000 ÷ 500,000
= $2.32
Therefore for computing the decrease earning per share we simply appplied the above formula.
Answer:
The correct answer is 2.32.
Explanation:
According to the scenario, computation of the given data are as follow:-
We can calculate the decrease in earning per share due to loss in disconnected operations by using following formula:-
Decrease in Earning Per Share Due to Loss in Disconnected Operations = Discontinued Operation Loss ÷ Weighted Average Common Share Outstanding
By putting the value, we get
=$1,160,000 ÷ $500,000
= 2.32
Maxim manufactures a cat food product called Green Health. Maxim currently has 10,000 bags of Green Health on hand. The variable production costs per bag are $3.20 and total fixed costs are $10,000. The cat food can be sold as it is for $8.55 per bag or be processed further into Premium Green and Green Deluxe at an additional $2,600 cost. The additional processing will yield 10,000 bags of Premium Green and 3,600 bags of Green Deluxe, which can be sold for $7.55 and $5.55 per bag, respectively. If Green Health is processed further into Premium Green and Green Deluxe, the total gross profit would be:
Answer: $92,880
Explanation:
The Gross Profit can be calculated by simply removing the cost from the sales amount.
It is stated that the additional processing will yield 10,000 bags of Premium Green and 3,600 bags of Green Deluxe, which can be sold for $7.55 and $5.55 per bag.
Sales figure is therefore,
= (10,000 * 7.55) + (3,600 * 5.55)
= 75,500 + 19,980
= $95,480
Subtracting the cost to get,
= 95,480 - 2,600
= $92,880
The total gross profit would is $92,880.
A $1,000 par value bond was issued 25 years ago at a 12 percent coupon rate. It currently has 15 years remaining to maturity. Interest rates on similar obligations are now 10 percent. Assume Ms. Bright bought the bond three years ago when it had a price of $1,060. Further assume Ms. Bright paid 40 percent of the purchase price in cash and borrowed the rest (known as buying on margin). She used the interest payments from the bond to cover the interest costs on the loan.
a. What is the current price of the bond? (Input answer to 2 decimal places.)
b. What is her dollar profit based on the bond's current price? (Do not round intermediate calculations and round answer to 2 decimal places.)c. How much of the purchase price of $1,060 did Ms. Bright pay in cash? (Do not round intermediate calculations and round answer to 2 decimal places.)
Answer:
A.) $1,152.12
B.) $92.12
C.) $424.00
Explanation:
Given
period (t) = 15 years
Coupon rate = 12%
Rate (r) = 10%
Par value = $1000
Purchase price = $1060
A.) Current price of bond :
Price = Coupon payment × [(1 - (1 + r)^-t) /r] + [par value / (1+r)^t]
Coupon payment = 12% × 1000 = $120
Plugging our values
Price = 120 × [(1-(1+0.1)^-15)/0.1] + [1000/1.1^15]
Price = $1,152.12
B.) Dollar profit on bond
Dollar profit = Current price - Purchase price
Dollar profit = $1,152.12 - $1060 = $92.12
C.)Amount paid in cash
40% of purchase amount was paid in cash
0.4 × 1060 = $424.00
Answer:
a) $1,153.72
b) $93.72
c) $424
Explanation:
Given:
Original bond was issued at 12%
YTM = 10%
Years left, N = 15 years.
a) The current price of bond:
Using Excel function, we have:
=PV(10%/2,2*15,-12%*1000/2,-1000)
= $1153.72
The current price of bond is $1,153.72
b) Dollar profit based on bond's current price will be calculated as:
Bond's current price - purchase price
= $1,153.72 - $1,060
= $93.72
Dollar profit = $93.72
c) The purchase price of $1,060 Ms. Bright paid in cash will be:
$1,060 * 40%
= $424
The manufacturing overhead budget at Rost Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 2,800 direct labor-hours will be required in September. The variable overhead rate is $7.00 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $43,120 per month, which includes depreciation of $3,640. All other fixed manufacturing overhead costs represent current cash flows. The September cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:
Answer:
Total overhead cash disbursement= $59,080
Explanation:
Giving the following information:
Estimated direct labor hours= 2,800
The variable overhead rate is $7.00 per direct labor-hour.
Estimated fixed manufacturing overhead= $43,120 per month
Includes depreciation of $3,640
To calculate the cash disbursement, we need to deduct from the fixed manufacturing overhead the depreciation expense because it is not a cash disbursement.
Variable overhead= 7*2,800= 19,600
Fixed overhead= 43,120-3,640= 39,480
Total overhead cash disbursement= $59,080
Final answer:
The September cash disbursements for manufacturing overhead on the manufacturing overhead budget should be $62,720.
Explanation:
The September cash disbursements for manufacturing overhead on the manufacturing overhead budget should be calculated by multiplying the budgeted direct labor-hours by the variable overhead rate and adding the fixed manufacturing overhead.
In this case, the budgeted direct labor-hours for September is 2,800 and the variable overhead rate is $7.00.
So, the variable overhead cost is 2,800 x $7.00 = $19,600.
The fixed manufacturing overhead is $43,120 per month, which includes depreciation of $3,640.
So, the September cash disbursements for manufacturing overhead will be $19,600 + $43,120 = $62,720.
If you wanted your organizational unit to create a new product that is essentially an entirely new industry, what type of innovation would you encourage? A radical innovation A systems innovation An incremental innovation Choose the answer that best completes each sentence. Because workgroups develop their own , intranets build a common cultural foundation that can help unify employees in different units and locations around common company values.
Answer:
1. A radical innovation.
2. Subcultures
Explanation:
If you wanted your organizational unit to create a new product that is essentially an entirely new industry, you will encourage a radical innovation.
A radical innovation also known as the disruptive innovation is an innovative approach aimed at destroying or supplanting old business strategies and models with an invention to breakthrough and change the whole industries by creating new products.
Because workgroups develop their own subcultures, intranets build a common cultural foundation that can help unify employees in different units and locations around common company values.
YZ Corporation, located in the United States, has an account payable of 750-million yen payable in one year to a bank in Tokyo. The current spot rate is yen 116 per $ and the one year forward rate is yen 109 per $. The annual interest rate is 3 percent in Japan and 6 percent in the United States (assume the same lending and borrowing rates). The future (in one year) dollar cost of meeting this obligation using the money market hedge is:
Answer:
Dollar cost of the foreign payable = $ 6,653,833.28
Explanation:
The money market hedge would be set up as follows:
Step 1: Deposit in Yen (Tokyo)
Deposit an amount in Yen equal to
Amount to be deposited= Payable/(1+deposit rate)
= 750,000,000/(1.03)
= Yen 728,155,339.8
Step 2 : Convert the sum
Convert Yen 728,155,339.8 at the spot rate of yen 116 per $
Dollar amount = 728,155,339.8 / 116
= $ 6,277,201.205
Step 3: Borrow at home (US)
Borrow $ 6,277,201.205 for one year at an interest rate of 6%
Amount due (inclusive of interest) = Amount borrowed × 1.06
=$ 6,277,201.205 × 1.06
= $ 6,653,833.28
Dollar cost of the foreign payable = $ 6,653,833.28
Consider the following balance sheet for TD. Assets Liabilities Reserves 493 Deposits 2900 Loans 2407 4. Suppose that TD is a typical bank and keeps only the required reserves. Given this data, what is the money multiplier? 5. Suppose that TD is a typical bank and keeps only the required reserves. In addition, suppose that someone deposited $700. Given this data, what is the total change in the M1 Money Supply? 6. Suppose that someone deposited $700 at TD Bank. Given this data, what is the minimum amount by which the money supply will increase?
The money multiplier represents how much money the banking system can generate from each dollar of bank reserves. The money multiplier in this case is 2900. The total change in the M1 money supply when someone deposits $700 at TD Bank is $2,030,000.
Explanation:The money multiplier is a concept that shows how much money the banking system can generate from each dollar of bank reserves. It is calculated by dividing 1 by the reserve ratio, which is the fraction of deposits that a bank keeps as reserves. In this case, since the bank keeps only the required reserves, the reserve ratio is 1/2900. Therefore, the money multiplier would be 1 divided by 1/2900, which is equal to 2900.
To calculate the total change in the M1 money supply when someone deposits $700 at TD Bank, we use the formula:
Total Change in the M1 Money Supply = New Deposits x Money Multiplier
So, the total change in the M1 money supply would be $700 x 2900 = $2,030,000.
The minimum amount by which the money supply will increase when someone deposits $700 at TD Bank is $700 x 1 = $700, as the money multiplier is always greater than or equal to 1.
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The money multiplier is calculated as 1 divided by the reserve ratio. For TD Bank, which keeps only the required reserves, the money multiplier would be 1. Depositing $700 can lead to an increase in the M1 money supply by the same amount, though the final increase can vary due to several factors.
Explanation:To calculate the money multiplier, we use the formula 1 / reserve ratio. In this case, given that the bank only keeps the required reserves, we can assume a reserve ratio of 1 (if all reserves are kept), so the money multiplier would be 1.
With regard to the changes in the M1 money supply due to a deposit of $700, it will affect how much the bank can lend out. Since TD keeps only required reserves, it can lend out all of the $700. As a result, bank credit (and therefore the M1 money supply) could increase by $700.
The minimum increase in the money supply is harder to define due to several factors, including withdrawal of cash from the banking system. However, at least the amount deposited ($700) will be added to the money supply immediately.
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Dave Krug contributed $1,800 cash along with inventory and land to a new partnership. The inventory had a book value of $1,600 and a market value of $3,600. The land had a book value of $2,200 and a market value of $6,600. The partnership also accepted a $3,800 note payable owed by Krug to a creditor. Prepare the partnership’s journal entry to record Krug’s investment.
Answer and Explanation:
The Journal entry is shown below:-
Cash Dr, $1,800
Inventory Dr, $3,600
Land Dr, $6,600
To Notes payable $3,800
To Krug's Capital $8,200
(Being Krug’s investment is recorded)
Therefore to record the
Here the assets are increasing so we debited the cash, inventory and land while the liabilities and stakeholder equity also increase so we credited the notes payable and Krug's capital.
Coronado Industries has 4760000 shares of common stock outstanding on December 31, 2020. An additional 198000 shares are issued on April 1, 2021, and 477000 more on September 1. On October 1, Coronado issued $6050000 of 8% convertible bonds. Each $1,000 bond is convertible into 40 shares of common stock. No bonds have been converted. The number of shares to be used in computing basic earnings per share and diluted earnings per share on December 31, 2021 is
Answer:
BEPS Shares = 5,067,500
DEPS Shares = 5,309,500
Explanation:
Basic Earnings per Share (BEPS) = Earnings Attributable to Holders of Common Stock / Weighted Average Number of Common Shares.
Weighted Average Number of Common Shares
Outstanding Common Shares 4,760,000
Additional Shares: April( 9/12 × 198000) 148,500
Additional Shares: April( 4/12 × 477000) 159,000
Total Weighted Average Number of Common Shares 5,067,500
Diluted Earnings per Share (DEPS) =Adjusted Earnings Attributable to Holders of Common Stock /Adjusted Weighted Average Number of Common Shares.
Adjusted Weighted Average Number of Common Shares
Basic Earnings per Share Common Shares 5,067,500
Convertible Bonds ($6,050,000/$1,000 × 40) 242,000
Total Weighted Average Number of Common Shares 5,309,500
You will receive annual payments of $20,000 to be paid at the end of each of the next 4 years. The appropriate discount rate is 15% What is the present value of the payments? Future Value of 1 (15%, 4 periods) = 1.74901 Future Value of an Annuity of 1 (15%, 4 periods) = 4.99338 Present Value of 1 (15%, 4 periods) = 0.57175 Present Value of an Annuity of 1 (15%, 4 periods) = 2.85498 Group of answer choices $57,099.60 $80,000.00 $31,470.30 $72,095.60
Answer:
Present Value = $57,099.57
Explanation:
The Present Value of a series of future equal amount is the amount the sum in today's terms that would make one to be indifferent . It is the future series of cash flows discounted at the opportunity cost rate of return.
Present Value = A × ( 1-(1+r)^(-n))/r
A- annual cash flow- 20,000, r- discount rate - 15%, n number of years- 4
PV = 20,000 × (1- 1.15^(-4))/0.15
= 20,000 × 2.85498
= $57,099.57
Since we use GDP to determine a nation’s health, we can only add the market value of the goods and services produced in the United States (domestic production) for a single year. We also do not add the value of intermediate goods, ingredients/items used to produce final products. We only count the value of final goods and services which have been produced within the year. Including the value of both the intermediate goods and the final goods and services would lead to double counting and increase the value of GDP.Directions: For each item place either an "I" if the scenario is an intermediate product, or an "F" if it is a final product.
a. Shampoo is bought and used by a hair stylist in the mall.
b. A family buys some finger paint for their child to use.
c. A person buys a tire to replace to flat one on their car.
d. A hotel chain buys a box of pens.
e. Flour is bought and used to bake a cake to be sold at a bakerySomeone buys a steak to grill at home.
f. An accounting firm buys calculators for its accountants.
g. A person buys shampoo to use at home.
h. Flour is bought and used to bake a cake for a birthday.
i. A student buys a pack of pens to do their homework.
j. A restaurant prepares a steak for its customers.
k. A factory buys tires to place on their cars.
l. An artist buys paints for a painting, with the intention of keeping it.
m. A calculator is bought and used for mathematics homework.
n. An artist buys paints for a landscape painting, with the intention of selling it.
Answer:
a. Shampoo is bought and used by a hair stylist in the mall. - F
It is a final product bought by the final consumer (the hair sytlist). It is part of GDP.
b. A family buys some finger paint for their child to use. - F
It is a final product bought by the final consumer (the family). It is part of GDP.
c. A person buys a tire to replace to flat one on their car. - F
It is a final product bought by the final consumer (the person who will replace the flat tire). It is part of GDP.
d. A hotel chain buys a box of pens. - F
It is a final product bought by the final consumer (the hotel). It is part of GDP.
e. Flour is bought and used to bake a cake to be sold at a bakerySomeone buys a steak to grill at home. - I
It is an intermediate product, because the flour will be made into cakes, that will then be sold, taking into account the value of the flour itself. It is not part of GDP.
f. An accounting firm buys calculators for its accountants. - F
It is a final product bought by the final consumer (the firm). It is part of GDP.
g. A person buys shampoo to use at home. - F
It is a final product bought by the final consumer (the person). It is part of GDP.
h. Flour is bought and used to bake a cake for a birthday. - F
It is final good because the flour will be made into a birthday cake, but the cake will be conumed at home. If the birthday cake is later sold, then, the flour is an intermediate good.
i. A student buys a pack of pens to do their homework. - F
It is a final product bought by the final consumer (the student). It is part of GDP.
j. A restaurant prepares a steak for its customers. - F
The steak is a final product, it will be consumed by customers for a value that the restaurant has set. This value is part of GDP.
k. A factory buys tires to place on their cars. -I
The tires are intermediate goods because they will be put in cars that they factory will later sell. The tires are not part of GDP.
l. An artist buys paints for a painting, with the intention of keeping it. - F
The painting is a final good because they customer has bought it to keep it a home. It is part of GDP.
m. A calculator is bought and used for mathematics homework. - F
It is a final product bought by the final consumer (the person doing math work). It is part of GDP.
n. An artist buys paints for a landscape painting, with the intention of selling it. - I
The paints are intermediate because their value will be put into the making of the landscape painting, which will be sold for a price that will take into account the cost of the paints. The paints are not part of GDP.
Final answer:
In GDP calculations, it is essential to differentiate intermediate goods, which are used in producing other goods, from final goods that are ready for consumption. This measure prevents double counting in the economy and reflects the true size of a nation's output and income.
Explanation:
When calculating the Gross Domestic Product (GDP), it is crucial to differentiate between intermediate and final goods to avoid the problem of double counting. GDP measures the value of all final goods and services produced in a nation in a year.
F - Shampoo bought and used by a hair stylist in the mall (final consumer)
F - A family buys some finger paint for their child to use (final consumer)
F - A person buys a tire to replace the flat one on their car (final consumer)
I - A hotel chain buys a box of pens (intermediate, pens will be used in business operations)
I - Flour bought and used to bake a cake to be sold at a bakery (intermediate, the cake is the final product)
F - Someone buys a steak to grill at home (final consumer)
I - An accounting firm buys calculators for its accountants (intermediate, used in providing services)
F - A person buys shampoo to use at home (final consumer)
I - Flour is bought and used to bake a cake for a birthday (intermediate, the cake is the final product)
F - A student buys a pack of pens to do their homework (final consumer)
F - A restaurant prepares a steak for its customers (final product)
I - A factory buys tires to place on their cars (intermediate, the car is the final product)
F - An artist buys paints for a painting, with the intention of keeping it (final consumer)
F - A calculator is bought and used for mathematics homework (final consumer)
I - An artist buys paints for a landscape painting, with the intention of selling it (intermediate, the painting is the final product).
Final goods are those that are at the furthest stage of production and are ready for sale to the end consumer, while intermediate goods are used to produce final goods and are not included in GDP calculations.
company used straight-line depreciation for an item of equipment that cost $20,300, had a salvage value of $5,600 and a six-year useful life. After depreciating the asset for three complete years, the salvage value was reduced to $2,030 but its total useful life remained the same. Determine the amount of depreciation to be charged against the equipment during each of the remaining years of its useful life:
Answer:
$3,640
Explanation:
Straight line method of depreciation, measures same amount of depreciation over the useful life of the asset.
Depreciation Charge = Cost - Salvage Value / Number of Useful Life
Depreciation for the each of the First 3 years :
Depreciation Charge = Cost - Salvage Value / Number of Useful Life
= ($20,300 - $5,600) / 6
= $2,450
Accumulated Depreciation = $2,450 × 3
= $7,350
New Depreciation Charge After 3 years:
Depreciation Charge = (Cost - Sum of Previous Depreciation Charges - New Salvage Value) / Number of Remaining Useful Life
= ($20,300 - $7,350 - $2,030) / 3
= $3,640
Therefore, the amount of depreciation to be charged against the equipment during each of the remaining years of its useful life would be $3,640 .
A company began construction of a new warehouse on Jan 1, 2018. The building was finished and ready for use on Sept 30, 2019. Expenditures on the project were as follows: January 1, 2018 $ 313,000 September 1, 2018 $ 465,000 December 31, 2018 $ 465,000 March 31, 2019 $ 465,000 September 30, 2019 $ 313,000 The company had $5,500,000 in 15% bonds outstanding through both years. The capitalized interest in 2018 was:
Answer:
$70,200
Explanation:
the formula to determine the amount of interest capitalized is:
$313,000 x 15% x 1 (whole 2018) = $46,950$465,000 x 15% x 4/12 (Sept.-Dec.) = $23,250total $70,200US GAAP allows companies to treat the cost of borrowing (interests) during the project's inception period as part of the original capital investment amount.
The Paris Company provides catering services. The cost of catering supplies is $300 per month plus $100 per job catered plus $25 per meal served. A typical job involves serving a number of meals to guests at a corporate function or at a host's home. The company budget for May was 27 jobs to be catered and 160 meals to be served. The actual activity for May was 26 jobs catered and 192 meals served, and the actual cost of catering supplies was $7,620.
The cost of catering supplies in Paris' planning budget for the month of May was:
a. $6,700
b. $7,700
c. $7,400
d. $7,000
Answer:
d. $7,000
Explanation:
The computation of the cost of catering supplies in case of planning budget is shown below:
= Cost of catering supplies + cost per job × number of jobs + cost per meal served × number of meals
= $300 + $100 × 27 jobs + $25 × 160 meals
= $300 + $2,700 + $4,000
= $7,000
We simply applied the above formula so that the cost of catering supplies for planning budget could come
Bulluck Corporation makes a product with the following standard costs: Standard Quantity or HoursStandard Price or Rate Direct materials 5.20grams$2.70per gram Direct labor 0.70hours$28.00per hour Variable overhead 0.70hours$3.70per hour The company reported the following results concerning this product in July. Actual output 4,700units Raw materials used in production 13,070grams Actual direct labor-hours 3,060hours Purchases of raw materials 13,800grams Actual price of raw materials purchased$2.90per gram Actual direct labor rate$13.10per hour Actual variable overhead rate$3.80per hour The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The variable overhead efficiency variance for July is:
Answer:
Efficiency variance = $851 favorable
Explanation:
Variable overhead efficiency variance: A variance is the difference between a standard cost and the actual cost. Variable overhead efficiency variance aims to determine whether or not their exist savings or extra cost incurred on variable overhead as a result of workers being faster or slower that expected.
Since the variable overhead is charged using labour hours, any amount by which the actual labour hours differ from the standard allowable hours would result in a variance
To calculate this variance, we do as follows:
Hours
4,700 should have taken(4,700 × 0.70 hrs) 3,290
but did take (i.e actual hours) 480 3,060
Efficiency variance in hours 70 unfavorable 230 favourable
Standard variable overhead rate × $3.70
Efficiency variance 851
Efficiency variance = $851 favorable
During 2020 the Blossom Company had a net income of $84000. In addition, selected accounts showed the following changes: Accounts Receivable $2500 increase Accounts Payable 800 increase Buildings 3800 decrease Depreciation Expense 1300 increase Bonds Payable 7000 increase What was the amount of cash provided by operating activities? $91800. $85300. $83600. $84000.
Answer:
The amount of cash provided by operating activities was $83,600
Explanation:
The amount of cash provided by operating activities is calculating by using following formula:
Net Income + Non-Cash Expenses (Depreciation, Depletion & Amortization Expense) + Non-Operating Losses (Loss on Sale of Non-Current Assets) − Non-Operating Gains (Gain on Sale of Non-Current Assets) + Decrease in Current Assets − Increase in Current Assets + Increase in Current Liabilities − Decrease in Current Liabilities.
In the Blossom Company,
The amount of cash provided by operating activities = Net Income + Depreciation Expense - Increase in Accounts Receivable + Increase in Accounts Payable = $84,000 + $1,300 - $2,500 + $800 = $83,600
You have been asked by the CEO of your company to manage a really important project. The CEO suggested five employees to be on your project team. You now think about the right organizational structure. Under what project management structure would these five employees face the least trade-offs with their current responsibilities?
a. A dedicated project team
b. A heavyweight project manager
c. An advisory team
d. A matrix organization
Your family owns an upscale car dealership called Jaguar Territory (JT) which sells Jaguars. Because you study marketing, your father asked you to develop an advertisement for the store. You know that it is important for consumers to pay attention to your ad or else the money you've spent on media exposure is wasted. Define attention, discuss how five of the several stimulus factors (ie. Size, Intensity, Color and Movement, etc.) influence attention to a stimulus, and explain how you can use each in your advertisement
Answer:
Consideration relates to the arbitrary ratio of the effectiveness of an product in the excitement that the company offers for a viewer of the item appears. Adverts stick out for us by very defined images and include a placed picture of the object such that the institution 's function and emblem draws into account for the customers.
Stimuli influences are essentially the stimuli' physical characteristics, there are different features of change that stick out for us, depending mostly on the person brand.
I) Size and stimulation authority. Of starters, the automobile manufacturer should have a full-page advertising in the paper that would rely on the attention of more people as opposed to a half-page advertising in a comparable article.
ii) Isolated onset, template that car seller receives the dealership commercial once a month which would have less effect as comparison to have regurgitated throughout 10 days or 15 days.
iii) advertorial-premium automotive paint blends by and wide provide a superb coloring that is used in print advertisements.
iv) The location of the promotional object is similarly important. The car being promoted should be in the central focus of the camera.
V) Isolation means the partitioning of stimuli items from separate objects, multiple papers are drained away and attention is difficult to generate. Within, the automobile commercial will place a short note.
You are a professional financial analyst that is employed to help evaluate possible merger and acquisition candidates. You have already reviewed the numbers, and the company seems solid on paper. You are unable to make a visit to the company yourself and are instead sending one of your direct reports to conduct the visit on your behalf. This is his first site visit, and he wants to review the work you have already done to familiarize himself with the company and asks for advice on things to look for. You offer to give advice on ways to find out if the company is "cooking its books" and what to look for when you conduct a "smell test."
What financial ratios should he be looking at and what do they tell you?
Answer:
Explanation:
Below are some of the financial ratios he should consider:
a) Financial leverage ratios: This is used to measure the company earnings to service debt payments.
b) Return on investment: This is the ratio that is used to evaluate the profitability of the firm and the profit that is available to the stakeholders after all payments have been made.
c) Price to Earnings Ratio: This is an indicator of the price of the company's stock concerning the earnings per share. It is used to analyze if the stock price is over-priced or under-priced.
You are given the following information about Palmer Golf Shop, Inc. The 2018 balance sheet of Palmer Golf Shop, Inc., showed long-term debt of $2.5 million, and the 2019 balance sheet showed long-term debt of $2.35 million. The 2019 income statement showed an interest expense of $175,000. What was the firm’s cash flow to creditors during 2019? The 2018 balance sheet of Palmer Shop, Inc., showed $725,000 in the common stock account and $3.75 million in the additional paid-in surplus account. The 2019 balance sheet showed $955,000 and $3.6 million in the same two accounts, respectively. If the company paid out $635,000 in cash dividends during 2019, what was the cash flow to stockholders for the year? What is cash flow from assets? Suppose you also know that the firm’s net capital spending for 2019 was $500,000 and that the firm increased its net working capital investment by $65,000. What was the firm’s 2019 operating cash flow, or OCF?
Answer and Explanation:
The computation is shown below:
a. Cash Flow to Creditors
Cash Flow to Creditors = Interest Expenses Paid – Net Increase in Long term debt
= Interest Expenses Paid – [Long term debt at the end – Long term Debt at the Beginning]
= $175,000 – [$2,350,000 - $2,500,000
= $175,000 - (-$150,000)
= $325,000
b. Cash Flow to Stockholders
Cash Flow to Stockholders = Dividend Paid – Net New Equity
= Dividend Paid – [(Ending common stock balance + Additional paid-in surplus account at the end) - (Beginning common stock balance + Additional paid-in surplus account at the beginning)
= $635,000 – [($955,000 + $3,600,000) – ($725,000 + $3,750,000)]
= $635,000 – [$4,555,000 - $4,475,000]
= $635,000 - $80,000
= $555,000
c. Cash Flow from assets
Cash Flow from assets = Cash Flow to Creditors + Cash Flow to Stockholders
= $325,000 + $555,000
= $880,000
d. Operating Cash Flow
As We know that,
Cash flow from assets = Operating Cash flows – Change in Net Working capital – Net Capital Spending
$880,000 = Operating cash flow - ($65,000) - $500,000
So,
Operating cash flow = $880,000 + $65,000 + $500,000
= $1,445,000
A chocolatier, Alain, in Belgium conducted extensive market research and focus groups, to understand the perfect chocolate for a distinct group of consumers. The perfect piece of chocolate would have a target weight of 60 grams. The voice of the specific consumers prefers a specification of +/- 2 grams. Alain has targeted a selling price of 15 Euros a piece. A box of dozen would be 150 Euros, gift wrapped for special occasions. Alain searched for a depositor that would give the most accurate fill weight, with a tight tolerance, a machine that would not only make elegant shapes of chocolate with precise caramel filling and clean impression. A confectionery machinery maker, Mod d’Art has several models. Model A. costs $5,000 and could produce fill weights at average of 60.50 grams, and standard deviation of 1.5 grams. Model B. costs $15,000, but with a standard deviation of 0.95 grams, with 59.95 grams average fill weight. Model C. runs $25,000; this deluxe model has standard deviation of 0.60 grams, average fill weight of 60.15 grams.
Answer :
Voice of consumer = 4
Cpk of Model A= 0.333
Cpk of Model B= 0.7017
Cpk of Model C= 1.1388
Explanation :
As per the data given in the question,
Voice of consumer = Upper limit - Lower limit
= 62 - 58
= 4
Cp of Model A = Voice of consumer ÷ (6 × Standard deviation)
= 4 ÷ (6 × 1.5)
= 0.4444
Cpk of Model A = Min(Cpl, Cpu)
and Cpl = (Mean-lower limit) ÷ (3 × standard deviation)
Cpu = (Upper limit- Mean) ÷ (3 × standard deviation)
So, Cpk of Model A = Min((60.5 - 58) ÷ (3 × 1.5), (62 - 60.5) ÷ (3 × 15))
= Min(0.555, 0.333)
Hence, , Cpk of Model A = 0.333
Cp of Model B = (62-58) ÷ (6 × 0.95)
= 0.7017
Cpk of Model B = Min((59.95 - 58) ÷ (3 × 0.95), (62 - 59.95) ÷ (3 ×0.95))
Cpk of Model B = 0.6842
Cp of Model C = (62 - 58) ÷ (6 × 0.60)
= 1.111
Cpk of Model C = Min((60.15 - 58) ÷ (3 × 0.60), (62 - 59.95) ÷ (3 ×0.60))
= 1.1388
n 2013, a federal judge ruled that Apple colluded with five major U.S. publishers to artificially drive up the prices of e-books (which could be read on Apple's iPad). Apple collects a 30% commission on the price of a book from the publisher. Why would Apple want to help publishers raise their price? Given Apple's commission, what price would a book cartel want to set? (Hint: The marginal cost of an e-book is virtually zero.) Apple wants to help publishers raise their price because Apple's profits are
Answer:
(1). The reason is Because Apple's Profit are maximized where the publishers profits are maximized.
(2). Check last paragraph.
Explanation:
To be sincere really, Apple is not really helping the publishers. From the question above we can see that the company that is Apple do collects a 30% commission on the price of a book from each of the United States of America publishers. Therefore, IF the price is INCREASED, Apple will make more commission/profit.
The answer to the second part of the question is that; With Apple's commission, the price that a book cartel will want to set will be be done make making sure that OUTPUT are RESTRICTED to where Marginal revenue is zero that is to say profit plus the 30% commission.
Precision Tool is trying to decide whether to lease or buy some new equipment for its tool and die operations. The equipment costs $1.2 million has a 7-year life, and will be worthless after the 7 years. The pre-tax cost of borrowed funds is 8 percent and the tax rate is 32 percent. The equipment can be leased for $242,500 a year. What is the value of the lease? Should the firm purchase the asset via debt-financing or sign a long-term financial lease agreement?
Answer:
-$51,566.
Explanation:
So, we are given the following parameters in the question above;
Cost of equipment = $1.2 million, pre-tax cost of borrowed funds = 8 percent, tax rate = 32 percent and the equipment can be leased for = $242,500 a year.
Step one : Calculate the After-Tax lease payment .
The After-Tax lease payment = ($242,500) × (1 - 0.32) = $164,900.
Step two: Calculate the Annual Depreciation Tax-Shield.
Annual Depreciation Tax-Shield = ($1,200,000/7) × (0.32) = $54,857.
Step three: Calculate the After-Tax Discount Rate.
The After-Tax Discount Rate = 0.08 × (1 - 0.32) = 5.44%.
Step four: Calculate the Net Advantage to Leasing.
The Net Advantage to Leasing = $1,200,000 - ($164,900 + $54,857.14) × (PVIFA 5.44%, 7).
= -$51,566
Pretzelmania, Inc., issues 7%, 10-year bonds with a face amount of $64,000 for $64,000 on January 1, 2021. The market interest rate for bonds of similar risk and maturity is 7%. Interest is paid annually on December 31. Required: 1. & 2. Record the bond issue and first interest payment on December 31, 2021. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
Answer and Explanation:
The Journal entries is shown below:-
The Journal entry to record the bond issue is here below:-
January 1, 2021
Cash Dr, $64,000
To Bonds payable $64,000
(Being issue of bonds is recorded)
The Journal entry to record the interest payment is shown below:-
December 31, 2021
Interest Expenses Dr, $2,240
($64,000 × 7% × 6 ÷ 12)
To Cash $2,240
(Being interest payment of bond is recorded)
Powell Warehouse distributes hardback books to retail stores and extends credit terms of 4/10, n/30 to all of its customers. During the month of June, the following merchandising transactions occurred.
June 1 Purchased books on account for $2,840 (including freight) from Catlin Publishers, terms 4/10, n/30.
3 Sold books on account to Garfunkel Bookstore for $1,050. The cost of the merchandise sold was $700.
6 Received $40 credit for books returned to Catlin Publishers.
9 Paid Catlin Publishers in full.
15 Received payment in full from Garfunkel Bookstore.
17 Sold books on account to Bell Tower for $1,050. The cost of the merchandise sold was $750.
20 Purchased books on account for $700 from Priceless Book Publishers, terms 2/15, n/30.
24 Received payment in full from Bell Tower.
26 Paid Priceless Book Publishers in full.
28 Sold books on account to General Bookstore for $2,600. The cost of the merchandise sold was $750.
30 Granted General Bookstore $260 credit for books returned costing $65.
Journalize the transactions for the month of June for Powell Warehouse, using a perpetual inventory system
Answer:
June 1
Dr Inventory 2840
Cr Accounts Payable 2840
June 3
Dr Accounts receivable 1050
Cr sales revenue 1050
Dr Cost of goods sold 700
Cr nventory 700
June 6
Dr Accounts payable40
Cr Inventory40
June 9
Dr Accounts payable 2,800
Cr Cash 2,744
Cr Inventory 56
June 15
Dr Cash 1050
Cr Accounts receivable 1050
June 17
Dr Accounts receivable 1050
Cr Sales revenue 1050
Dr Cost of Goods sold 750
Cr Inventory 750
June 20
Dr Inventory 700
Cr Accounts payable 700
June 24
Dr Cash 1029
Dr sales discounts 21
Cr Account receivable 1050
June 26
Dr Account payable 700
Cr Inventory 14
Cr Cash 686
June 28
Dr Account Receiveable 2600
Cr Sales Revenue 2600
Dr Cost of goods sold 750
Cr Inventory 750
June 30
Dr Sales return and allowance 260
Cr Account receivable 260
Dr Inventory 65
Cr Cost of goods sold 65
Explanation:
Powell Warehouse Journal entries
June 1
Dr Inventory 2840
Cr Accounts Payable 2840
June 3
Dr Accounts receivable 1050
Cr sales revenue 1050
Dr Cost of goods sold 700
Cr nventory 700
June 6
Dr Accounts payable40
Cr Inventory40
June 9
Dr Accounts payable 2,800
(2,840-40)
Cr Cash 2,744
Cr Inventory 56
(2%×2,800)
June 15
Dr Cash 1050
Cr Accounts receivable 1050
June 17
Dr Accounts receivable 1050
Cr Sales revenue 1050
Dr Cost of Goods sold 750
Cr Inventory 750
June 20
Dr Inventory 700
Cr Accounts payable 700
June 24
Dr Cash 1029
Dr sales discounts 21
(2%×1050)
Cr Account receivable 1050
June 26
Dr Account payable 700
Cr Inventory (2%×700) 14
Cr Cash 686
June 28
Dr Account Receiveable 2600
Cr Sales Revenue 2600
Dr Cost of goods sold 750
Cr Inventory 750
June 30
Dr Sales return and allowance 260
Cr Account receivable 260
Dr Inventory 65
Cr Cost of goods sold 65
The town of Podunk is considering building a new downtown parking lot. The land will cost $25,000 and the construction cost of the lot is estimated to be $150,000. Each year costs associated with the lot are estimated to be $17,500. The income from the lot is estimated to be $18,000 the first year and increase by $3,500 each year for the twelve year expected life of the lot. Determine the B/C ratio if Podunk uses a cost of money of 4%.
Answer:
The B/C ratio if Podunk uses a cost of money of 4% is 0.99
Explanation:
In order to calculate the B/C ratio if Podunk uses a cost of money of 4%, we would have to use the following formula:
B/C ratio = PW BENEFITS / PWCOSTS
PW BENEFITS = $18,000 (P/A, 4%,12) + $3,500(P/G, 4%, 12) = $334,298
PW COSTS = $175,000 + $17,500(P/A. 4%,12) = $339,238
Therefore, B/C ratio = $334,298 / $339,238
B/C ratio = 0.99
Answer:
The B/C ratio if Podunk uses a cost of money of 4% is going to be $ 0.99
Explanation:
Base on the scenario been described in the question, we can be able to use the following formula in calculation of the B/C ratio if Podunk uses a cost of money.
B/C ratio = Benefits of PW/ Costs of PW
Substituting the values we have ;
Benefits of PW = $18,000 (P/A, 4%,12) + $3,500(P/G, 4%, 12)
Benefits of PW = $334,298
Costs of PW = $175,000 + $17,500(P/A. 4%,12)
Costs of PW = $339,238
B/C ratio = Benefits of PW/ Costs of PW
B/C ratio = $334,298 / $339,238
B/C ratio = $0.99
On January 1, 2017, Shay issues $330,000 of 12%, 15-year bonds at a price of 97.00. Six years later, on January 1, 2023, Shay retires 20% of these bonds by buying them on the open market at 104.50. All interest is accounted for and paid through December 31, 2022, the day before the purchase. The straight-line method is used to amortize any bond discount. 7. Prepare the journal entry to record the bond retirement at January 1, 2023.
Answer and Explanation:
As per the data given in the question, Journal entries are as follows:
Jan 1
Bonds payable A/C Dr. $66,000
Loss on bonds' redemption A/c Dr. $4,158
To Discount on bonds payable A/c $1,188
($5,940*20%)
To Cash A/c $68,970
($66,000*104.5%)
(To record retirements of bonds before maturity)
Computation
Discount on bonds = $330,000 × 3% = $9,900
Amortized bond discount = $9,900 ÷ 15 × 6
= $3,960
Unamortized bond discount = $9,900 - $3,960
= $5,940
Face value of bonds retired = $330,000 × 20%
= $66,000