Answer:
The correct option is B,$6,710 million
Explanation:
First and foremost,one needs to be aware that net operating profit margin(NOPM) of 3.6% was computed by dividing operating profit after tax by the total revenue for 2016,hence we use same formula to determine the net operating profit after tax for 2017 by merely changing the subject of the formula.
NOPM=net operating profit after/total revenue
net operating profit after tax=NOPM*total revenue
NOPM remains at 3.6%
total revenue for 2017=total revenue for 2016*(1+growth rate)
total revenue for 2016 is $177,526 million
growth rate is 5%
total revenue for 2017= $177,526*(1+5%)=$ 186,402.30 million
Net operating profit after tax= 186,402.30 *3.6%=$ 6,710.48 million
Approximately $6710 million
Jones Excavation Company is planning an investment of $125,000 for a bulldozer. The bulldozer is expected to operate for 1,000 hours per year for five years. Customers will be charged $90 per hour for bulldozer work. The bulldozer operator costs $30 per hour in wages and benefits. The bulldozer is expected to require annual maintenance costing $7,500. The bulldozer uses fuel that is expected to cost $15 per hour of bulldozer operation.
Determine the equal annual net cash flows from operating the bulldozer.
Answer:
net cash flows = $37,500 per year
Explanation:
initial investment $125,000
operate 1,000 hours per year for 5 years
price per hour $90
direct labor costs $30 per hour
direct materials (fuel) $15 per hour
annual maintenance $7,500
the annual cash flows from operating the bulldozer = [($90 (price per hour) - $45 (total variable costs per hour) x 1,000 hours] - $7,500 (annual maintenance cost) = $45,000 - $7,500 = $37,500 per year
the cash flows should be the same for years 1 through 5.
The equal annual net cash flows from operating the bulldozer are $37,500.
Explanation:The equal annual net cash flows from operating the bulldozer can be calculated by subtracting the costs of operating the bulldozer from the revenue generated. In this case, the revenue is the customer charge per hour multiplied by the number of operating hours per year. The costs include the operator wages, annual maintenance costs, and fuel costs per hour. Let's calculate the net cash flows:
Revenue per year: $90/hour x 1,000 hours/year = $90,000Operator costs per year: $30/hour x 1,000 hours/year = $30,000Maintenance costs per year: $7,500Fuel costs per year: $15/hour x 1,000 hours/year = $15,000Total costs per year: $30,000 + $7,500 + $15,000 = $52,500Net cash flows per year = Revenue per year - Total costs per year = $90,000 - $52,500 = $37,500Therefore, the equal annual net cash flows from operating the bulldozer are $37,500.
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MC Qu. 93 Schrank Company is trying to decide how... Schrank Company is trying to decide how many units of merchandise to order each month. The company's policy is to have 25% of the next month's sales in inventory at the end of each month. Projected sales for August, September, and October are 37,000 units, 27,000 units, and 47,000 units, respectively. How many units must be purchased in September
Answer:
Units to be purchased in September = 32,000 units
Explanation:
The units to be be purchased = Sales for the current month + closing inventory - opening inventory
Closing inventory for September = 25% × October sales
= 25% × 47,000 = 11,750
Opening inventory in September = closing inventory of August
Closing inventory of August =25% × September sales
= 25% × 27,000 = 6750
Units to be purchased i September =
27,000 +11,750 - 6,750 = 32,000 units
Heavy Metal Corporation is expected to generate the following free cash flows over the next five years: Year 1 2 3 4 5 FCF ($ million) 53 68 78 75 82 After 5 years, the free cash flows are expected to grow at the industry average of 4% per year. Using the discounted free cash flow model and a weighted average cost of capital of 14%: Estimate the enterprise value of Heavy Metal. If Heavy Metal has no excess cash, debt of $300 million, and 40 million shares outstanding, estimate its share price.
Answer:
Enterprise Value of Heavy Metal =$820
Share price of Heavy Metal = $9.53
Explanation:
Base on the scenario been describe in the question, we can use the following method to solve the given problem.
a)Terminal Value
= 82 / (14% – 4%) = $820
Enterprise Value of Heavy Metal
Terminal Value= 53 / 1.14 + 68/1.14^2 + 78 / 1.14^3 + (75 + 820) / 1.14^4 =$681
b) Share price of Heavy Metal
=(Enterprise value + cash – Debt) / Shares outstanding
Share price of Heavy Metal= (681 + 0 – 300)/40 = $9.53
To estimate the enterprise value and share price of Heavy Metal Corporation, we use the discounted free cash flow model and a weighted average cost of capital (WACC) of 14%. The enterprise value is calculated by finding the present value of the projected free cash flows over the next five years, plus a perpetual growth rate applied to the last cash flow. To calculate the share price, we subtract the debt from the enterprise value and divide by the number of shares outstanding.
Explanation:To estimate the enterprise value of Heavy Metal Corporation, we will calculate the present value of the projected free cash flows. In this case, we have free cash flows for the first five years, and then a perpetual growth rate of 4% is applied to the last cash flow. Using the discounted free cash flow model and a weighted average cost of capital (WACC) of 14%, we can calculate the present value of each cash flow. Adding these present values together will give us the enterprise value.
To estimate the share price, we need to subtract the debt from the enterprise value and divide by the number of shares outstanding. In this case, the debt is $300 million and there are 40 million shares outstanding. Dividing the enterprise value minus the debt by the number of shares gives us the share price.
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Lily Company sells automatic can openers under a 75-day warranty for defective merchandise. Based on past experience, Lily estimates that 4% of the units sold will become defective during the warranty period. Management estimates that the average cost of replacing or repairing a defective unit is $20. The units sold and units defective that occurred during the last 2 months of 2020 are as follows.
Months Units Sold Units Defective Prior to December 31
November 37,300 746
December 39,300 491
Prepare the journal entries to record the estimated liability for warranties and the costs incurred in honoring 1,237 warranty claims.
Answer and Explanation:
The journal entries are shown below:
a. On November
Warranty expense Dr $29,840 (37,300 units × 4% × $20)
To Estimated warranty payable $29,840
(Being the warranty expense is recorded)
For recording this we debited the expense as it increase the expense and credited the estimated warranty payable as it increased the liabilities
On December
Warranty expense Dr $31,440 (39,300 units × 4% × $20)
To Estimated warranty payable $31,440
(Being the warranty expense is recorded)
For recording this we debited the expense as it increase the expense and credited the estimated warranty payable as it increased the liabilities
For cost incurred
Accrued Warranty Expense $24,740
To Cash $24,740
(Being the cash is paid)
For recording this we debited the expense as it increase the expense and credited the cash as it reduced the assets
Harry Trading Company must choose its optimal capital structure. Currently, the firm has a 20 percent debt ratio and the firm expects to generate a dividend next year of $5.64 per share. Dividends are expected to remain at this level indefinitely. Stockholders currently require a 12.3 percent return on their investment. Harry is considering changing its capital structure if it would benefit shareholders. The firm estimates that if it increases the debt ratio to 30 percent, it will increase its expected dividend to $5.92 per share. Again, dividends are expected to remain at this new level indefinitely. However, because of the added risk, the required return demanded by stockholders will increase to 13.6 percent. Based on this information, should Harry make the change?
Answer:
They should not make the change because the price of the stocks will decrease.
Explanation:
the current price of the stocks using the perpetuity formula = dividend / required rate of return
current price with current capital structure = $5.64 / 0.123 = $45.85
if the company changes its capital structure by increasing debt, the price of the stocks will be
$5.92 / 0.136 = $43.53
since the price of the stocks would actually decrease if the capital structure changes, the change should not be made. The stockholders' wealth is measured by the price of the stocks, and if the price of the stocks decreases, then the stockholders' wealth also decreases.
Assume that you manage a risky portfolio with an expected rate of return of 12% and a standard deviation of 39%. The T-bill rate is 6%. Your risky portfolio includes the following investments in the given proportions: Stock A 23% Stock B 32% Stock C 45% Your client decides to invest in your risky portfolio with a proportion (y) of his investment budget with the rest in a T-bill (MMF) money market fund so that the overall portfolio will have an expected return of 9%. What is the proportion y
Answer:
y = 50 %
Explanation:
As per the data given in the question, computation are as follows:
Expected return = y × expected rate of return for portfolio + (1 - y) × rate of T-bills
By putting the value from the given data in the above formula, we get
0.09 = y×0.12 + (1 - y)×0.06
0.09 = 0.12y + 0.06 - 0.06y
0.03 = 0.06 y
y = 0.50
= 50%
Final answer:
The client should invest 50% of their investment budget in the risky portfolio to achieve an expected return of 9% when the risky portfolio's expected return is 12% and the T-bill rate is 6%.
Explanation:
The student is interested in understanding the proportion of investment (y) that must be invested in a risky portfolio to achieve an overall expected return of 9%, given that the risky portfolio has an expected return of 12% and the T-bill rate is 6%. To calculate this, we can use the formula of a combination of a risky asset and a risk-free asset to determine the overall expected return:
Expected Return of Overall Portfolio = y * Expected Return of Risky Portfolio + (1 - y) * Risk-Free Rate
Plugging in the values:
0.09 = y * 0.12 + (1 - y) * 0.06
Solving for y:
y = (0.09 - 0.06) / (0.12 - 0.06)
y = 0.03 / 0.06
y = 0.5
Therefore, the client should invest 50% of the investment budget in the risky portfolio and the rest in T-bills to achieve the desired expected return of 9%.
. Wholesale Banners pays $ 300 comma 000 cash for a group purchase of land, building, and equipment. At the time of acquisition, the land has a market value of $ 33 comma 000, the building $ 264 comma 000, and the equipment $ 33 comma 000. Journalize the lump-sum purchase.
Answer:
Land $30,000
building $240,000
Equipment $30,000
To Cash $300,000
(Being the lump sum purchase is recorded)
Explanation:
For journalizing the lump sum purchase entry first we need to compute the allocated cost assigned to each asset which is shown below
(A) (B) (A × B)
Asset Market value Percentage of total value Purchase price Assigned value
Land $33,000 10% $300,000 $30,000
Building $264,000 80% $300,000 $240,000
Equipment $33,000 10% $300,000 $30,000
Total value $330,000
Now the journal entry is
Land $30,000
building $240,000
Equipment $30,000
To Cash $300,000
(Being the lump sum purchase is recorded)
We simply debited the assets as it increased the asset account and at the same time the cash is paid so it decreased the asset account
he Assembly Department of ByteSize, Inc., manufacturer of computers, incurred $ 260 comma 000 in direct material costs and $ 70 comma 000 in conversion costs. The equivalent units of production for direct materials and conversion costs are 1 comma 000 and 600, respectively. The weightedminusaverage method is used. The cost per equivalent unit of production (EUP) for conversion costs is
Answer:
Cost per equivalent unit for conversion cost = $116.66
Explanation:
Under the weighted average method of valuation, to account for completed units, it is assumed that the entire degree of work required to a complete a set of work is done in the period under consideration.So there is no separation of the completed units into opening inventory and fully worked.
To determine the cost per equivalent unit, we use the formula below:
Cost per equivalent unit = $70,000/600
= $116.66
Answer:
$ 166.67
Explanation:
The Concept of Equivalent units measures the number of units completed in terms of completion in input elements of materials and conversion costs.
cost per equivalent unit = Total conversion cost / total equivalent units of conversion
= $ 70,000 / 600
= $ 166.67
Therefore, cost per equivalent unit of production (EUP) for conversion costs is $ 166.67 .
"financing activities" Creative Sound Systems sold investments, land, and its own common stock for $35.0 million, $15.5 million, and $41.0 million, respectively. Creative Sound Systems also purchased treasury stock, equipment, and a patent for $21.5 million, $25.5 million, and $12.5 million, respectively.
Answer:
The flow of cash of C Company from investing activity is $12.5 million
Explanation:
Recall that
The statement of cash flows comprises of three activities. The ones associated with the general operations of the company are refereed to as operating activities.
investing activities refers various investments in assets, their sale or purchase. while financing activities refers to activities that affect the capital with liabilities.
The Computation of cash flows from investing activity is given below:
Statement showing cash flow of activities from investing activities of Creating sound systems company
Particulars Amount (In millions)
The sale of investment 35
The sale of land 15.5
Purchase of equipment - 25.5
Purchase of Patent - 12.5
The flow of cash from investing
activities 12.5
Therefore,
The cash flow of investing activities C company is 12. 5 million
or we can compute as follows:
Cash flow from investing activities = Sale of investment + sale of land - purchase of equipment = Purchase of potent
which is
= $ 35 million + $15 million - $ 25 million - 12.5 million
= $ 12.5 million
Therefore, the flow of cash from investing activity is $12.5 million.
Which of the following management actions is permissible during a union certification election? Promising benefits to employees if they reject the union Requiring all employees to attend "captive audience" speeches in the company auditorium regarding the union organizing effort Requiring small groups of employees to meet with management in a supervisor’s conference room to discuss the organizing effort Asking employees in advance of the election how they feel about the union
Answer:
Requiring all employees to attend “captive audience” speeches in the company auditorium regarding the union organizing effort
Explanation:
In simple words, union certification election refers to the electoral process under which the labor force of an organisation chooses its leader for a fixed period of time as determined by the rules. This process is usually seen in large organisations where a thousands of labor workforce is included.
Just like any other process, in these elections also the candidates are supposed to present themselves against the voters and tell them their ideas and the works they are going to perform.
Calculate Payroll An employee earns $44 per hour and 1.5 times that rate for all hours in excess of 40 hours per week. Assume that the employee worked 55 hours during the week, and that the gross pay prior to the current week totaled $63,800. Assume further that the social security tax rate was 6.0%, the Medicare tax rate was 1.5%, and federal income tax to be withheld was $633.
Answer: $1750
Explanation:
Given Data
Earnings = $44/ hr
Overtime Earnings = 1.5 times Of $44
= $66
Hours worked during the week = 55 hrs
Social security tax rate = 6.0%
Medicare tax rate = 1.5%
Federal income tax = $633
Therefore:
Gross pay = Normal pay + overtime pay
Normal pay
= $44 * 40 hrs
= $1760
Overtime pay
= $66 * 15 hrs
= $990
Gross pay = $1760 + $990
= $1750
Social security tax
= 0.06 * $2750
= $165
Medicare tax
= 0.015 * $2750
= $41.25
Total tax
= $633 + $41.25 + $165
= $839.25
Net pay
= $2750 - $839.25
= $1910.75
Tell Her I Said So, Ltd. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. Inputs Standard Quantity or Hours per Unit of Output Standard Price or Rate Direct materials 4.2 grams $ 2.95 per gram Direct labor 1.25 hours $ 10.00 per hour Variable manufacturing overhead 1.25 hours $ 4.00 per hour The company planned to produce 10,800 units of output during June and has reported the following actual results for the product for June: Actual output 11,250 Units Raw materials purchased/used 46,000 grams Actual price of raw materials $ 3.05 per gram Actual direct labor-hours 16,875 Hours Actual direct labor rate $ 9.00 per hour Actual variable overhead rate $ 4.50 per hour Assume all of the materials purchased was used during the month to produce the 11,250 units. Calculate: a. The DM activity variance b. The DM spending variance c. The DM price variance d. The DM quantity variance
Answer:
Explanation:
Given details:
Standard Quantity ()SQ = Expected Consumption for Actual output=4.2 gms p.u of output
Standard price p.u of material consumed (SP)= $2.95 per gram
The actual quantity of material consumed(AQ)=46000 grams
Actual price p.u of material consumed(AP)= $ 3.05 per gram
Purchase Quantity (PQ)=46000 grams
Standard Hours (SH)=Expected time for Actual output=1.25 hours p.u
Actual Rate per hour (AR)=$ 9 ph
Actual hours paid for (AH)=16875 hours
Standard rate ph (SR)=$10 ph
a Direct material Activity variance=SQXSP-BQXSP
= (11250X4.2X2.95)-(10800X4.2X2.95)
= $5575.5
b Direct Material Spending Variance=AQXAP-AQXSP
= (46000 X 3.05)-(46000 X 2.95)
= 140300-135700
= $ 4600
c Direct Material Price Variance=AQXSP-AQXAP
= (46000 X 2.95)-(46000 X 3.05)
= 135700 -140300
= $ 4600
d Direct Material Quantity Variance=SQXSP-AQXSP
= (11250 X4.2 X2.95)-(46000 X 2.95)
=139387.5-135700
= $3687.5
Selected information from Peridot Corporation's accounting records and financial statements for 2021 is as follows ($ in millions): Cash paid to acquire machinery $ 38 Reacquired Peridot common stock 56 Proceeds from sale of land 96 Gain from the sale of land 46 Investment revenue received 71 Cash paid to acquire office equipment 86 In its statement of cash flows, Peridot should report net cash outflows from investing activities of:
Answer:
$43 million
Explanation:
The cash flow statement categories the company's transactions in a financial period into 3 groups; these are operating, investing and financing.
The net profit/loss, depreciation, changes in current assets (other than cash) and liabilities are considered as operating activities including income taxes.
The sale of assets, interest received, purchase of investments are examples of investing activities while the issuance of stocks, debt principal deduction (loan settlement), issuance of debt securities etc are examples of financing activities.
An increase in assets other than cash is an outflow while an increase in liabilities is an inflow. Depreciation and other non-cash expenses deducted in the income statements are added back while the non-cash income such gain on asset are deducted from net income.
Peridot's Net cash outflows from investing activities (in millions)
= -$38 + $96 + $71 - $86
= $43
The gain from the disposal of land will be deducted from the net income under the cash flows from operating activities while the requisition of own shares is a financing activity.
Maben Company was started on January 1, Year 1, and experienced the following events during its first year of operation:
1. Acquired $35,000 cash from the issue of common stock.
2. Borrowed $47,000 cash from National Bank.
3. Earned cash revenues of $63,000 for performing services.
4. Paid cash expenses of $52,500.
5. Paid a $2,500 cash dividend to the stockholders.
6. Acquired an additional $35,000 cash from the issue of common stock.
7. Paid $12,000 cash to reduce the principal balance of the banknote.
8. Paid $46,000 cash to purchase land.
9. Determined that the market value of the land is $64,000.
Required:
Show the effects of the events on the financial statements using a horizontal financial statements model. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, and NC for net change in cash. (Enter any decreases to account balances with a minus sign. Not all cells in the "Statement of Cash Flows" column may require an input - leave cells blank if there is no corresponding input needed.)
Answer: kindly check attached picture
Explanation:
Kindly view the attached picture for complete financial statement.
Final answer:
The effects of Maben Company's first-year transactions include various cash inflows and outflows categorized under operating, investing, and financing activities, leading to a net cash increase of $67,000 by the end of the year.
Explanation:
Effects of Maben Company's Events on Financial Statements
The following horizontal financial statements model showcases the effects of Maben Company’s transactions:
Acquired $35,000 cash from the issue of common stock. (FA)
Borrowed $47,000 cash from National Bank. (FA)
Earned cash revenues of $63,000 for performing services. (OA)
Paid cash expenses of $52,500. (OA)
Paid a $2,500 cash dividend to the stockholders. (FA)
Acquired an additional $35,000 cash from the issue of common stock. (FA)
Paid $12,000 cash to reduce the banknote. (FA)
Paid $46,000 cash to purchase land. (IA)
Determined that the market value of the land is $64,000. (No cash flow effect)
Now let’s translate those events into the financial statement effects:
Net Increase in Cash: = ($35,000 FA + $47,000 FA + $63,000 OA - $52,500 OA - $2,500 FA + $35,000 FA - $12,000 FA - $46,000 IA) = $67,000
Cash and cash equivalents - beginning of year = $0 (since the company started)
Cash and cash equivalents - end of year = $67,000
This model uses the cash flow designations OA, IA, and FA to reflect operating, investing, and financing activities, respectively. Balance sheet accounts like cash and cash equivalents and liabilities, specifically the banknote, have been affected by these transactions.
Wilcox Electronics uses sales journal, purchases journal, cash receipts journal, cash payments journal, and general journal. Identify the journal in which each transaction should be recorded. a. Sold merchandise on credit. e. Sold merchandise for cash. b. Purchased shop supplies on credit. f. Purchased merchandise on credit. c. Paid an employee’s salary in cash. g. Purchased inventory for cash. d. Borrowed cash from the bank. h. Paid cash to a creditor. (Page 278).
Each transaction is to be recorded in a specific journal: Sales Journal for selling merchandise on credit, Purchases Journal for buying supplies or merchandise on credit, Cash Payments Journal for paying an employee's salary, buying inventory, or paying a creditor all in cash, General Journal for borrowing cash, and Cash Receipts Journal for selling merchandise for cash.
Explanation:The transactions in the question should be recorded in the following journals:
Sold merchandise on credit: This would be recorded in the Sales Journal.Purchased shop supplies on credit: This would be recorded in the Purchases Journal.Paid an employee’s salary in cash: This would go in the Cash Payments Journal.Borrowed cash from the bank: This would be recorded in the General Journal.Sold merchandise for cash: This would be recorded in the Cash Receipts Journal.Purchased merchandise on credit: This should be logged in the Purchases Journal.Purchased inventory for cash: This would go in the Cash Payments Journal.Paid cash to a creditor: This would be recorded in the Cash Payments Journal.Learn more about Journal Entries here:https://brainly.com/question/33762471
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During May, Joliet Fabrics Corporation manufactured 530 units of a special multilayer fabric with the trade name Stylex. The following information from the Stylex production department also pertains to May.
Direct material purchased: 18,300 yards at $1.41 per yard $ 25,803
Direct material used: 9,800 yards at $1.41 per yard 13,818
Direct labor: 2,400 hours at $9.18 per hour 22,032
The standard prime costs for one unit of Stylex are as follows:
Direct material: 20 yards at $1.38 per yard $ 27.60
Direct labor: 4 hours at $9.00 per hour 36.00
Total standard prime cost per unit of output $ 63.60
Required: Compute the following variances for the month of May. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance).
Answer:
Direct material price variance = -$294 Unfavorable
Direct material quantity variance = $1,104 Favorable
Direct material purchase price variance = 549 Unfavorable
Direct labor rate variance = $432 Unfavorable
Direct labor efficiency variance = -$2,520 Unfavorable
Explanation:
The computation of given question is shown below:-
Standard hours = 530 × 4
= 2,120
Direct material price variance = (Standard price - Actual price) × Actual quantity
= ($1.38 - $1.41) × 9,800
= -$0.03 × 9,800
= -$294 Unfavorable
Direct material quantity variance = (Standard quantity - Actual quantity) × Standard price
= (530 × 20 - 9,600) × $1.38
= (10,600 - 9,800) × $1.38
= 800 × $1.38
= $1,104 Favorable
Direct material purchase price variance = (Standard price - Actual price) × Actual quantity
= ($1.38 - $1.41) × 18,300
= -$0.03 × 18,300
= $549 Unfavorable
Direct labor rate variance = (Standard rate - Actual rate) × Actual hours
= ($9 - $9.18) × 2,400
= -$0.18 × 2,400
= $432 Unfavorable
Direct labor efficiency variance = (Standard hours - Actual Hours) × Standard rate
= (2,120 - 2,400) × $9.00
= -280 × $9.00
= -$2,520 Unfavorable
1. Direct Material Price Variance: $549 Unfavorable. 2. Direct Material Quantity Variance: $1,104 Favorable 3. Direct Labor Rate Variance: $432 Unfavorable 4. Direct Labor Efficiency Variance: $2,520 Unfavorable
To compute the variances for the month of May for Joliet Fabrics Corporation, we need to calculate the following:
1. Direct Material Price Variance
2. Direct Material Quantity Variance
3. Direct Labor Rate Variance
4. Direct Labor Efficiency Variance
1. Direct Material Price Variance (DMPV)
[tex]\[ \text{DMPV} = (\text{Actual Price} - \text{Standard Price}) \times \text{Actual Quantity Purchased} \][/tex]
[tex]\[ \text{Standard Price} = \$1.38 \, \text{per yard} \][/tex]
[tex]\[ \text{Actual Price} = \$1.41 \, \text{per yard} \][/tex]
[tex]\[ \text{Actual Quantity Purchased} = 18,300 \, \text{yards} \][/tex]
[tex]\[ \text{DMPV} = (\$1.41 - \$1.38) \times 18,300 = \$0.03 \times 18,300 = \$549 \, \text{Unfavorable} \][/tex]
2. Direct Material Quantity Variance (DMQV)
[tex]\[ \text{DMQV} = (\text{Actual Quantity Used} - \text{Standard Quantity Allowed}) \times \text{Standard Price} \][/tex]
[tex]\[ \text{Standard Quantity Allowed}[/tex] = [tex]\text{Standard Quantity per Unit}[/tex] [tex]\times[/tex] Actual Output}
Standard Quantity per Unit = 20 [tex]\text{yards/unit}[/tex]
Actual Output = 530 , [tex]\text{units}[/tex]
[tex]\[ \text{Standard Quantity Allowed} = 20 \times 530 = 10,600 \, \text{yards} \][/tex]
[tex]\[ \text{Actual Quantity Used} = 9,800 \, \text{yards} \][/tex]
[tex]\[ \text{DMQV} = (9,800 - 10,600) \times \$1.38 = (-800) \times \$1.38 = -\$1,104 \, \text{Favorable} \][/tex]
3. Direct Labor Rate Variance (DLRV)
[tex]\[ \text{DLRV} = (\text{Actual Rate} - \text{Standard Rate}) \times \text{Actual Hours Worked} \][/tex]
[tex]\[ \text{Standard Rate} = \$9.00 \, \text{per hour} \][/tex]
[tex]\[ \text{Actual Rate} = \$9.18 \, \text{per hour} \][/tex]
[tex]\[ \text{Actual Hours Worked} = 2,400 \, \text{hours} \][/tex]
[tex]\[ \text{DLRV} = (\$9.18 - \$9.00) \times 2,400 = \$0.18 \times 2,400 = \$432 \, \text{Unfavorable} \][/tex]
4. Direct Labor Efficiency Variance (DLEV)
[tex]\[ \text{DLEV} = (\text{Actual Hours Worked} - \text{Standard Hours Allowed}) \times \text{Standard Rate} \][/tex]
[tex]\[ \text{Standard Hours Allowed}[/tex] =[tex]\text{Standard Hours per Unit}[/tex] [tex]\times[/tex] Actual Output
Standard Hours per Unit= 4 hours/unit
Actual Output} = 530units
Standard Hours Allowed = 4 ×530 = 2,120 hours
Actual Hours Worked = 2,400hours
DLEV = (2,400 - 2,120) × $9.00 = 280 × $9.00 = $2,520 Unfavorable
CarMax Inc. reports sales of $15,875,118 thousand and cost of sales of $13,691,824 thousand for the year ended February 28, 2017. The gross profit for the year is: A. $2,183,294 thousand B. $1,464,362 thousand C. 86.2% D. 13.8% E. There is not enough information to determine gross profit.
Answer: A. $2,183,294 thousand
Explanation:
Gross Profit is calculated by deducting the Cost of Goods sold from the Sales figure.
In this case therefore the Gross Profit would be,
Gross Profit = 15,875,118 - 13,691,824
Gross Profit = $2,183,294 thousand.
$2,183,294 is the Gross Profit for year therefore Option A is correct.
2. A company has been successful in reducing the amount of sales returns and allowances. At the same time, a credit card company reduced the credit card discount from 3% to 2%. What effect will these changes have on the company's net sales, all other things equal? a. Net sales will not change. b. Net sales will increase. c. Net sales will decrease. d. Either (b) or (c).
Answer:
B) Net sales will increase.
Explanation:
Net sales = total sales - sales returns and allowances
If the percentage of sales returns and allowances is reduced, then total net sales should increase. E.g. total sales are $100, sales returns and allowances are $4, then net sales = $96. If sales returns and allowances decreases to $2, then net sales will be $98.
Also, if the fee that credit cards charge decreases by 1%, net sales will also increase. Credit card fees decrease total sales, e.g. you sell $50 using credit card and the credit card company charges you $1.50, your total sales will be $48.50, but if the credit card company only charges $1, then total sales will be $49.
Freeland Company sells Popits for $20. The following is the projected Income Statement for 2018. Variable costs are the cost of the Popits, $10 each, plus a 10% sales commission paid to the worker. Sales $300,000 Cost of Popits Sold 150,000 Gross Margin 150,000 Operating Expenses Salaries and Commissions 60,000 Rent 24,000 Other Fixed Expenses 10,000 Total Operating Expenses 94,000 Net Income $ 56,000 For Freeland, the number of Popits she needs to sell to break even are A. 6,620 B. need more information to calculate this C. 9,074 D. 8,000 E. 11,750
Answer:
D. 8,000
Explanation:
The computation of break even is shown below:-
Variable cost per unit = Cost of Popits per unit + Sales commission per unit
= $10 + (10% × $20)
= $10 + $2
= $12
Contribution margin per unit = Sales per unit - Variable cost per unit
= $20 - $12
= $8
Total fixed Cost = Salaries + Rent + Other fixed cost
= ($60,000 - $30,0000) + $24,000 + $10,000
= $30,000 + $24,000 + $10,000
= $64,000
Now,
Break-even units = Fixed cost ÷ Contribution per unit
= $64,000 ÷ 8
= 8,000
Therefore for computing the break-even units we simply applied the above formula.
In her first few weeks at the marketing division of Rolland Retails, Judith Cox realized that Joshua, Doug, and Carl were closer to her manager, Eric Scott, than the other five team members. Eric, Joshua, Doug, and Carl came to work at the same time, were seen together at the cafeteria, and stayed late and worked when the need arose. While Judith was in training, she received very good feedback from Eric, and as she transitioned to the floor, she felt that Eric was giving her interesting projects, allowing her more freedom, and seeking her opinion frequently. The information provided in the scenario supports the prediction that ________. Joshua, Doug, and Carl will display low trust propensity in Judith Judith will become a part of Eric's ingroup in the marketing division Judith will have lower levels of identification-based trust with Eric when compared to other trainees Eric's ingroup will remain a reference group for Judith permanently Judith will develop low trust propensity toward Eric
Answer:
Judith will become a part of Eric's in-group in the marketing division.
in-group
Explanation:
in-group are said to be a social group containing some amount of individuals whereby an individual identifies himself/herself as a member of the group. they are a set of people who are together just to achieve a common goal/objectives
Final answer:
Based on the information provided, it's likely that Judith will become a part of Eric's ingroup in the marketing division due to the preferential treatment and trust shown towards her.
Explanation:
The scenario presented suggests that Judith Cox is being integrated into the ingroup of her manager, Eric Scott. Given her positive feedback during training, the interesting projects she's been assigned, the freedom in her work, and the frequency with which Eric seeks her opinion, it supports the prediction that Judith will become a part of Eric's ingroup in the marketing division. Such dynamics indicate that Eric trusts Judith and values her contributions, which leads to closer working relationships resembling those he has with Joshua, Doug, and Carl.
Moreover, the scenario does not provide any indication that Joshua, Doug, and Carl would display low trust propensity in Judith. If anything, their inclusion in the ingroup suggests a higher likelihood of acceptance, if Judith aligns with the group's norms and performs well. Similarly, the notion of Eric's ingroup remaining a reference group for Judith permanently is inconclusive, as group dynamics can change over time. Trust propensity toward Eric on Judith's part can only be speculated upon, but given the positive interactions thus far, lower levels of trust propensity seem unlikely unless future events suggest otherwise. Lastly, there's no given reason to believe that Judith will have lower levels of identification-based trust with Eric than other trainees, especially since she is receiving favorable treatment akin to those in Eric's trusted circle.
2. You can spend spring break either working at home for $80/day for 5 days or go to Florida for the week. If you stay home, your expenses will total about $100. If you go to Florida, the airfare, hotel, food and miscellaneous expenses will total about $700. What is the opportunity cost of going to Florida? Bonus point: What is the definition of opportunity cost?
Answer:
-$1,000
-The opportunity cost refers to the benefit that you don't receive when you choose an option over another one.
Explanation:
The opportunity cost of going to Florida would include the amount you won't spend on the trip that is $700. Also, it includes the benefit of staying at home that is working for $80/day for 5 days that is equal to $400 minus the expenses that are $100. According to this, the opportunity cost is: $700+$300= 1,000.
Suppose that the duopolists Carl and Simon face an inverse demand function for pumpkins of P = 400 - Q, where Q = Qs + Qc is the total number of pumpkins that reach the market and P is the price of pumpkins. Suppose further that Simon's cost function is Cs(Qs) = Qs2 and Carl's cost function is Cc(Qc) = 30Qc + Qc2. In the Cournot-Nash equilibrium, Simon's production is
Answer:
the Cournot-Nash equilibrium, Simon's production is 82 units
Explanation:
The Cournot-Nash Equilibrium for Simon's production is calculated as follows:
[tex]P = 400 - Q \\ \\ Q = Q_s + Q_c[/tex]
Reaction function of Carl is as follows:
Carl maximize profit at [tex]HR_c = HC_c[/tex]
[tex]TR_c = P*Q_c[/tex]
[tex]TR_c = (400 -Q_s -Q_c)Q_c[/tex]
[tex]TR_c = 400Q_c -Q_sQ_c -Q_c^2[/tex]
⇒ [tex]HR_c = \delta TR_c/ \delta Q_c[/tex]
[tex]HR_c =400 -Q_s -2 Q_c[/tex]
[tex]C_c = 30 Q_c + Q_c^2[/tex]
⇒ [tex]HC_c = \delta C_c/ \delta Q_c[/tex]
[tex]HC_c =30+2Q_c[/tex]
Set [tex]HR_c = HC_c[/tex]
[tex]400 - Q_s - 2 Q_c = 30 - 2Q_c \\ \\ 400 - Q_s -30 = 2Q_c + 2Q_c \\\\(370 Q_s) = 4 Q_c \\ \\ Q_c = (370-Q_s)/4 \\ \\ Q_c = 92.5 - 0.25 Q_s \to Reaction \ function \ of \ Carl --- equation (1)[/tex]
Reaction function of Simon
Since Simon maximize profit at [tex]HR_s = HC_s[/tex]
[tex]TR_s = PQ_s \\ \\ TR_s = (400-Q_c -Q_s)Q_s \\ \\ TR_s = 400 Q_s - Q_cQ_s - Q_s^2[/tex]
[tex]HR_s = \delta TR_s/ \delta Q_s[/tex]
[tex]HR_s =400 - Q_c -2Q_s[/tex]
[tex]C_s = Q_s^2[/tex]
[tex]HC_s= \delta C_s/ \delta Q_s[/tex]
[tex]HC_s=2Q_s[/tex]
Set [tex]HR_s = HC_s[/tex]
[tex]400- Q_c - 2Q_s = 2Q_s \\ \\ 400 - Q_c = 2Q_s+2Q_s \\ \\ 4Q_s = 400 - Q_c \\ \\ Q_s = (4000- Q_c)/4 \\ \\ Q_s = 100 -0.25 Q_c --- Reaction \ function \ of \ Simon \ -- equation (2)[/tex]
Substituting equation (1) into equation (2)
[tex]Q_s =100 -0.25Q_c \\ \\ Q_s = 100 - 0.25(92.5-0.25 Q_s) \\ \\ Q_s = 100 -23.125 +0.0625Q_s \\ \\ (Q_s-0.0625Q_s) = 76.375 \\ \\ 0.9375 Q_s = 76.875 \\ \\ Q_s = 76.375/0.9375 \\ \\ Q_s = 82[/tex]
Thus; the Cournot-Nash equilibrium, Simon's production is 82 units
How do insurance companies make money
Answer: They make money from monthly payments by customers.
Explanation:
Insurance companies make money primarily from insurance premiums paid by their clients and from investment income by investing unused funds. Actuaries help predict claims and set premium rates to ensure profits. These companies need to balance providing affordable premiums with high enough rates to cover potential claims and generate profits.
Insurance companies generate revenue through two main sources: insurance premiums and investment income. Clients pay premiums in exchange for coverage, which collectively allows the insurer to negotiate lower service rates and cover claims.
Actuaries within these companies predict possible claims based on historical patterns and set premium rates that cover these claims while still ensuring profitability.
Beyond premiums, insurers invest the funds they accumulate — that aren't immediately needed to pay out claims — in safe, liquid assets. These investments must be readily accessible, so they are typically quite conservative. However, this investment strategy still yields returns, contributing additional revenue to the insurance company.
Despite careful planning, unexpected events like natural disasters can result in substantial losses for insurance companies. Nevertheless, adequately set premiums and investment strategies generally let an insurance company cover its losses, pay out dividends to shareholders, and maintain a profitable business model.
On January 1, 2021, Tru Fashions Corporation awarded restricted stock units (RSUs) representing 15 million of its $1 par common shares to key personnel, subject to forfeiture if employment is terminated within three years. After the recipients of the RSUs satisfy the vesting requirement, the company will distribute the shares. On the grant date, the shares had a market price of $6.00 per share.1. Determine the total compensation cost pertaining to the RSUs.2. Prepare the appropriate journal entry to record the award of RSUs on January 1, 2018.3. Prepare the appropriate journal entry to record compensation expense on December 31, 2018.4. Prepare the appropriate journal entry to record compensation expense on December 31, 2019.5. Prepare the appropriate journal entry to record compensation expense on December 31, 2020.6. Prepare the appropriate journal entry to record the lifting of restrictions on the RSUs and issuing shares at December 31, 2020.
Answer and Explanation:
1. The Computation of compensation expenses is shown below:-
Compensation cost = Restricted stock units × Market price
= 15 million × $6.00
= $90.00 million
The Journal entry is shown below:-
2. No Journal entry is required
3. Compensation expenses Dr, $30 million
(15 million × $6.00) ÷ 3))
To paid in capital-restricted stock $30 million
(Being compensation expense is recorded)
4. Compensation expenses Dr, $30 million
(15 million × $6.00) ÷ 3))
To paid in capital-restricted stock $30 million
(Being compensation expense is recorded)
5. Compensation expenses Dr, $30 million
(15 million × $6.00) ÷ 3))
To paid in capital-restricted stock $30 million
(Being compensation expense is recorded)
6. Paid in capital-restricted stock $105 million
To common stock $15 million
To paid in capital - excess of par $90 million
(15 million × $6.00)
(Being common stock issued at grant date is recorded)
The following selected transactions were completed by Interlocking Devices Co., a supplier of zippers for clothing: 2017 Dec. 7. Received from Unitarian Clothing & Bags Co., on account, a $75,000, 60-day, 3% note dated December 7. 31. Recorded an adjusting entry for accrued interest on the note of December 7. 31. Recorded the closing entry for interest revenue. 2018 Feb. 5. Received payment of note and interest from Unitarian Clothing & Bags Co. Journalize the entries to record the transactions. If an amount box does not require an entry, leave it blank. Assume 360 days in a year.
Answer:
The journal entry to record receiving the note would be:
December 7, 2017, promissory note received from Unitarian Clothing & Bags Co.
Dr Notes receivable 75,000
Cr Accounts receivable 75,000
Adjusting entry to record accrued interest:
December 31, 2017, accrued interest from notes receivable
Dr Interest receivable ($75,000 x 3% x 24/360 days) 150
Cr Interest revenue 150
December 31, 2017, closing entry for interest revenue
Dr Interest revenue 150
Cr income summary 150
The entry to record the collection of the note receivable:
Dr Cash ($75,000 + $75,000 x 3% x 60/360) 75,375
Cr Notes receivable 75,000
Cr Interest receivable 150
Cr Interest revenue 225
The transactions between Interlocking Devices Co. and Unitarian Clothing & Bags Co. involved receiving a note, recording accrued interest, closing entries for revenue, and receiving payment for the note with interest. These transactions were journalized with the relevant debit and credit entries to corresponding accounts.
Explanation:The transactions involving Interlocking Devices Co. and Unitarian Clothing & Bags Co. can be journalized as follows:
2017 Dec 7: Debit: Accounts Receivable - $75,000 Credit: Sales - $75,000 (Upon receiving the note) 2017 Dec 31: Debit: Interest Receivable - $250 Credit: Interest Revenue - $250 (To record accrued interest, calculated as [$75,000 * 3% * 24 days] / 360) 2017 Dec 31: Debit: Retained Earnings - $250 Credit: Interest Revenue - $250 (Closing entry to transfer Revenue to Retained Earnings) 2018 Feb 5: Debit: Cash - $75,750 Credit: Accounts Receivable - $75,000 Credit: Interest Receivable - $250 Credit: Interest Revenue - $500 (Receive payment for both the note and the interest, where the remaining interest is calculated as [$75,000 * 3% * 36 days] / 360) Learn more about Accounting Transactions here:https://brainly.com/question/34190871
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Nathan is working on the operating budgets for his company. He has already done the sales and production budgets, and he is now working on the direct materials, direct labor, and manufacturing overhead budgets. He decides to do the direct labor budget first, then the manufacturing overhead budget, then the direct materials budget. Do you think this is an appropriate way to prepare the budgets
Answer:
Yes that is an appropriate way ti prepare an operating budget.
Explanation:
An operating budget is a financial statement that reflects reflects operating activities and its cost implications.
It outlines other budgets like ending fines the financial plan for each operating sub sector such as sales, production, direct labor, manufacturing overhear, etc. for a particular period.
Nathan's method of preparing the operating budget for his company is appropriate because he is following the correct sequence.
To prepare an operating budget, the sales and production budgets are captured first, followed by direct materials, direct labor, manufacturing overhead, direct labor, direct materials and other other additional budget before the budgeted income statement is prepared.
Final answer:
Nathan's approach to preparing the direct labor, manufacturing overhead, and direct materials budgets can be suitable, especially if direct labor costs influence manufacturing overhead. However, the sequence might differ based on the company's operational needs and the flexibility required for the budgets to reflect actual conditions.
Explanation:
When Nathan is working on the operating budgets for his company and decides to prepare the direct labor budget, manufacturing overhead budget, and then the direct materials budget, his approach can be considered appropriate depending on the interdependencies of those budgets. Since direct labor costs can directly influence manufacturing overhead through labor-related expenses such as payroll taxes and benefits, it is reasonable to calculate labor costs first. However, it is essential that other elements, such as direct materials, are not overlooked since they may also affect both labor and overhead costs.
According to best practices in budgeting, flexible budgeting can be beneficial. A flexible budget allows for sensitivity analysis and can be adjusted to reflect actual operating conditions, providing managers with a tool to manage costs effectively under different scenarios. By following a flexible budget approach, Nathan ensures that the budget will remain dynamic and adaptable, reflecting changes in demand, resource consumption, and costs.
It's also essential to consider that each company might have different requirements on budget sequence based on their operational workflow. In some cases, the need for materials might dictate labor and overhead, suggesting another sequence could be more appropriate. Ultimately, cost accounting and understanding the specific needs of the company are crucial to ensure the efficiency of the budgeting process.
Garland Company uses a standard cost system. The standard for each finished unit of product allows for 3 pounds of plastic at $0.72 per pound. During December, Garland bought 4300 pounds of plastic at $0.75 per pound, and used 4000 pounds in the production of 1300 finished units of product. What is the direct materials purchase price variance for the month of December
Answer:
Direct material price variance= $129 unfavorable
Explanation:
Giving the following information:
The standard for each finished unit of the product allows $0.72 per pound. During December, Garland bought 4300 pounds of plastic at $0.75 per pound.
To calculate the direct material price variance, we need to use the following formula:
Direct material price variance= (standard price - actual price)*actual quantity
Direct material price variance= (0.72 - 0.75)*4,300
Direct material price variance= $129 unfavorable
The highest value of total cost was $ 710 comma 000 in June for Horchata Beverages, Inc. Its lowest value of total cost was $ 550 comma 000 in December. The company makes a single product. The production volume in June and December were 13 comma 000 and 5 comma 000 units, respectively. What is the fixed cost per month? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.) A. $ 450 comma 000 B. $ 5 comma 000 C. $ 160 comma 000 D. $ 550 comma 000
Answer:
A. $ 450 comma 000
Explanation:
In order to compute the fixed cost per month first we have to determine the variable cost per unit which is shown below.
Variable cost per hour = (High total cost - low total cost) ÷ (High production volume - low production volume)
= ($710,000 - $550,000) ÷ (13,000 units - 5,000 units )
= $160,000 ÷ 8,000 units
= $20
Now the fixed cost equal to
= High total cost - (High production volume × Variable cost per unit)
= $710,000 - (13,000 units × $20)
= $710,000 - $260,000
= $450,000
We simply applied the above formula
MC Qu. 122 Marian Corporation has two... Marian Corporation has two separate divisions that operate as profit centers. The following information is available for the most recent year: Black Division Navy Division Sales (net) $ 400,000 $ 350,000 Salary expense 23,000 43,000 Cost of goods sold 140,000 154,000 The Black Division occupies 22,000 square feet in the plant. The Navy Division occupies 33,000 square feet. Rent is an indirect expense and is allocated based on square footage. Rent expense for the year was $55,000. Compute departmental income for the Black and Navy Divisions, respectively. (Do not round your intermediate computations)
Answer: Black Division $215,000
Navy Division $120,000
Explanation:
The other expenses are straightforward except for the Rent Expense so I'll tackle that first.
The Black Division occupies 22,000 square feet in the plant. The Navy Division occupies 33,000 square feet. Rent is an indirect expense and is allocated based on square footage.
Total square feet is,
= 22,000 + 33,000
= 55,000 square feet.
Black Division's percentage of the rent will be,
= 22,000/55,000
= 0.4
Navi Division's percentage of the rent will be
= 33,000/55,000
= 0.6
Total rent is $55,000.
Black Division is therefore apportioned,
= 0.4 * $55,000
= $22,000
Navy is apportioned,
= 0.6 * $55,000
= $33,000
Black Division Departmental Income is therefore,
= Sales - Cost of Goods sold - Salary - Rent
= 400,000 - 140,000 - 23,000 - 22,000
= $215,000
Black Division's Departmental Income is $215,000
Navy Division's Departmental Income is,
= Sales - Cost of Goods sold - Salary - Rent
= 350,000 - 154,000 - 43,000 - 33,000
= $120,000
Navy Division's Departmental Income is $120,000
Identify whether the market supply curve will shift right or left or will stay the same for the following: a. Firms in an industry are required to pay a fine for their carbon dioxide emissions. b. Companies are sued for polluting the water in a river. c. Power plants in a specific city are not required to address the impact of their air quality emissions. d. Companies that use fracking to remove oil and gas from rock are required to clean up the damage.
Answer:
1. In first example, supply curve moves to the left. Delivery curve moves to the left as supply is heading downward due to variables apart from rate change. In this scenario, the cost of output rises due to the current penalty, and vendors will be able to produce less at the same amount.
2. In second scenario, businesses are prosecuted for contaminating river water, rises in manufacturing prices and vendors will be able to produce worse at the same amount. The output curve then shifts for its left.
3. In third case the output curve will remain the same. That's since the quantities given does not change.
4. In this situation, the harm done by drilling must be cleaned up by the businesses. Hence, production cost rises, and vendors will be willing to provide worse at the provided price. The supply curves then shifts to the left.