Answer:
The risk will be reduced by 0.109
Explanation:
Standard deviation for stock A = 49%
Standard deviation for stock B = 49%
Correlation = 0.2
Let's use the standard deviation of portfolio equation:
[tex]= \sqrt{w_A^2 \sigma _A^2 + w_B^2 \sigma _B^2 + 2w_A w_B \sigma _A \sigma _B * C}[/tex]
Where[tex] w_B [/tex] = 100% - 56% = 44%
[tex]= \sqrt{(0.56^2 * 0.49^2) + (0.44^2 * 0.49^2) + (2*0.56*0.44*0.49*0.49)0.2}[/tex]
= 0.381 = 38.1%
The risk will be reduced by:
(0.56*0.49)+(0.44*0.49)-0.381
= 0.109
Kramer Enterprises reports year-end information from 2015 as follows: Sales (160,000 units) $960,000 Cost of goods sold 640,000 Gross margin 320,000 Operating expenses 260,000 Operating income $60,000 Kramer is developing the 2016 budget. In 2016 the company would like to increase selling prices by 12.5%, and as a result expects a decrease in sales volume of 9%. All other operating expenses are expected to remain constant. Assume that cost of goods sold is a variable cost and that operating expenses are a fixed cost. What is budgeted sales for 2016
Answer:
Budgeted sales for 2016 is $982,800 (145,600 units)
Cost of goods sold: $582,400
Gross margin: $400,400
Operating expenses: $260,000 (fixed cost and remained constant)
Operating income: $140,400
Explanation:
In 2015:
Selling prices = $960,000/160,000 = $6
Cost of goods sold per unit = $640,000/160,000 = $4
In 2016, the company would like to increase selling prices by 12.5%, and as a result expects a decrease in sales volume of 9%.
Selling prices = $6 x (1 + 12.5%) = $6.75
Sales volume = 160,000 x (1-9%) = 145,600 units
Total sales = 145,600 x $6.75 = $982,800
Cost of goods sold = 145,600 x $4 = $582,400
Gross margin = $982,800 - $582,400 = $400,400
Operating expenses $260,000 (fixed cost and remained constant)
Operating income = Total sales - Cost of goods sold - Operating expenses = $982,800 - $582,400 - $260,000 = $140,400
The payroll register of Heritage Co. indicates $3,900 of social security withheld and $975 of Medicare tax withheld on total salaries of $65,000 for the period. Earnings of $10,000 are subject to state and federal unemployment compensation taxes at the federal rate of 0.8% and the state rate of 5.4%.
Provide the journal entry to record the payroll tax expense for the period. If an amount box does not require an entry, leave it blank.
a. Payroll Tax Expense
b. Social Security Tax Payable
c. Medicare Tax Payable
d. State Unemployment Tax Payable
e. Federal Unemployment Tax Payable
The following are budgeted data:January February March Sales in units 16,600 23,200 19,600Production in units 19,600 20,600 19,300One pound of material is required for each finished unit. The inventory of materials at the end of each month should equal 25% of the following month's production needs. Purchases of raw materials for February would be budgeted to be:
Answer:
The purchases of raw material for February are budgeted to be 20275 pounds.
Explanation:
The opening inventory of raw material in February should be equal to 25% of the production requirement for the month of February. Thus, the opening balance of raw material is,
Opening balance- Raw material = 0.25 * 20600 = 5150 pounds
Similarly, the closing inventory for raw material for the month of February should be equal to the 25% of production requirement for the month of March. Thus, the closing inventory of raw material in the month of February is,
Closing balance = 0.25 * 19300 = 4825 pounds
Purchases of raw material should be enough to produce enough units to meet February's production requirement after using the opening inventory of raw material along with having enough desired closing inventory of raw material. So, the purchases of raw material are,
Purchases = Closing inventory + Production - Opening Inventory
Purchases = 4825 + 20600 - 5150
Purchases = 20275 pounds
On September 1, Tacht Company lent $ 82,000 to L. Kalra on a 90-day, 2% note.
1. Journalize for Tacht Company the lending of the money on September 1.
2. Journalize the collection of the principal and interest at maturity. Specify the date. Round interest to the nearest dollar.
Answer and Explanation:
The journal entries are shown below:
On Sep 1
Note receivable Dr $82,000
To Cash $82,000
(Being the lending of the money is recorded)
On Sep 1 to 90 days it is December 1
29 days in September + 31 days in October + 30 days in November
On December 1
Cash $82,410
To Interest revenue $410
To Note receivable $82,000
(Being the collection of the principal and interest at maturity is recorded)
The computation is shown below:
= $82,000 × 2% × 90 days ÷ 360 days
= $410
All of the following are the primary goals of research ethics committees, EXCEPT:
A) Protect the 'human subjects' who will participate in observational or experimental studies or whose personal information will be examined by researchers
B) Oversee research carried out on animals
C) Legally protect the researcher's institution from the liability that could occur as a result of research activities
D) Protect researchers by preventing them from engaging in activities that could cause harm
Answer: Oversee research carried out on animals
Explanation: Research ethics committees is a body responsible for the critical evaluation of research proposals to ensure that they meet the highest ethical standard.
One of their primary goals is to protect the 'human subjects' who will participate in observational studies. Their primary goal is not to look after research carried out on animals.
In 2018, borland semiconductors entered into the transactions described below. In 2015, borland had issued 215 million shares of its $1 par common stock at $47 per share.
Required: Assuming that Borland retires shares it reacquires, record the appropriate journal entry for each of the following transactions:
a. On january 2, 2018, borland reacquired 11 million shares at $45.00 per share.
b. On march 3, 2018, borland reacquired 11 million shares at $50 per share.
c. On august 13, 2018, borland sold 1 million shares at $55 per share.
d. On december 15, 2018, borland sold 2 million shares at $50 per share.
Answer:
Kindly check attached picture
Explanation:
In 2018, borland semiconductors entered into the transactions described below. In 2015, borland had issued 215 million shares of its $1 par common stock at $47 per share.
Required: Assuming that Borland retires shares it reacquires, record the appropriate journal entry for each of the following transactions:
a. On january 2, 2018, borland reacquired 11 million shares at $45.00 per share.
b. On march 3, 2018, borland reacquired 11 million shares at $50 per share.
c. On august 13, 2018, borland sold 1 million shares at $55 per share.
d. On december 15, 2018, borland sold 2 million shares at $50 per share.
Kindly check attached picture for detailed explanation
To record the appropriate journal entry for each transaction, Borland must understand the concept of stock retirement and follow the correct accounting entries. The entries involve debiting the Treasury Stock account and crediting the Cash account. Transactions a to d are explained with the respective journal entries.
Explanation:To record the appropriate journal entry for each transaction, we need to understand the concept of stock retirement. When a company buys back its own shares, it is considered a retirement of shares. The journal entry for the retirement of shares includes debiting the Treasury Stock account and crediting the Cash account. Let's go through each transaction:
a. On January 2, 2018, Borland reacquired 11 million shares at $45.00 per share. The journal entry would be: Debit Treasury Stock for $495 million and credit Cash for $495 million.
b. On March 3, 2018, Borland reacquired 11 million shares at $50 per share. The journal entry would be: Debit Treasury Stock for $550 million and credit Cash for $550 million.
c. On August 13, 2018, Borland sold 1 million shares at $55 per share. The journal entry would be: Debit Cash for $55 million and credit Treasury Stock for $55 million.
d. On December 15, 2018, Borland sold 2 million shares at $50 per share. The journal entry would be: Debit Cash for $100 million and credit Treasury Stock for $100 million.
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Auditing standards define ________ as the magnitude of misstatements that individually, or when aggregated with other misstatements, could reasonably be expected to influence the economic decisions of users made on the basis of the financial statements.
A) fraud
B) inherent risk
C) materiality
D) significant
You are an economic consultant and have been contacted by an official from a developing country. She tells you that her country’s economy is currently growing at 2 percent per year. She asks you how long it will take for her country’s economy to double in size; you tell her it will take 35 years. She then asks you what the government can do to shorten the time necessary to double the size of the country’s economy. What should you tell her?
Answer:
Encourage the development of growth-positive institutions.
Explanation:
Base on the scenario been described in the question, when she ask you She then asks you what the government can do to shorten the time necessary to double the size of the country’s economy, the best answer you can give to her is to encourage the development of growth-positive institutions. Because this is what will shorten shorten the time necessary to double the size of the country’s economy.
In the textbook by Kathleen Allen, she describes a sample protection net for an integrated circuit by describing 15 different items that firms can use to protect its intellectual property. Three of these 15 items include product trademark, circuit patents, and software copyrights. Please list three other items that the semiconductor firm can use to further protect its intellectual property.
1. ________
2. ________
3. ________
Answer:
The answer to this question can be defined as follows:
Explanation:
In option 1, Design safety for IP- It is the enrollment of design gives its designer to its exclusive privilege to use and enable others to be using the layout, which includes the right to produce, offer, market, import, use, or store for such reasons, an item where the design is implemented. Its design wind safety results vary between 5 and 25 years from region to region. In option 2, Trade protection- A trade secret is a kind of industrial assets in the form of a non-publicly recognized and reasonably analyzable system, process, method, layout, tool, pattern, collection. It ensures a competitive edge because of its holders. Its proprietor should keep it private if a company's mystery is to be efficient. In option 3, Its technology License for making a production comes which other rivals can not use to produce a semi-driver of this kind.2017 Sold $1,351,700 of merchandise (that had cost $981,800) on credit, terms n/30. Wrote off $21,500 of uncollectible accounts receivable. Received $670,400 cash in payment of accounts receivable. In adjusting the accounts on December 31, the company estimated that 3.00% of accounts receivable will be uncollectible. 2018 Sold $1,586,800 of merchandise on credit (that had cost $1,326,300), terms n/30. Wrote off $25,300 of uncollectible accounts receivable. Received $1,182,900 cash in payment of accounts receivable. In adjusting the accounts on December 31, the company estimated that 3.00% of accounts receivable will be uncollectible. Required: Prepare journal entries to record Liang’s 2017 and 2018 summarized transactions and its year-end adjustments to record bad debts expense. (The company uses the perpetual inventory system and it applies the allowance method for its accounts receivable.) (Round your intermediate calculations to the nearest dollar amount.)
Answer and Explanation:
The Journal entry is shown below:-
1. Accounts receivable Dr, $1,351,700
To Sales revenue $1,351,700
(Being merchandise on credit is recorded)
Cost of goods sold Dr, $981,800
To Merchandise inventory $981,800
(Being cost of goods sold is recorded)
2. Allowance for Uncollectible accounts Dr, $21,500
To Accounts receivable $21,500
(Being Uncollectible accounts is receivable is recorded)
3. Cash account Dr, $670,400
To Accounts receivable $670,400
(Being cash is recorded)
4. Bad debts expenses Dr, $41,294
To Allowance for uncollectible accounts $41,294
(Being bad debt expenses is recorded)
Working Note
Accounts receivable ($1,351,700 - $21,500 - $670,400) $659,800
Required balance 3% $19,794
Add: Debit balance $21,500
Bad debt expenses $41,294
5. Accounts receivable Dr, $1,586,800
To Sales revenue $1,586,800
(Being merchandise on credit is recorded)
Cost of goods sold Dr, $1,326,300
To Merchandise inventory $1,326,300
(Being cost of goods sold is recorded)
6. Allowance for Uncollectible accounts Dr, $25,300
To Accounts receivable $25,300
(Being uncollectible accounts receivable is recorded)
7. Cash account Dr,$1,182,900
To Accounts receivable $1,182,900
(Being cash is recorded)
8. Bad debts expenses Dr, $36,658
To Allowance for uncollectible accounts $36,658
(Being bad debt expenses is recorded)
Working Note
Accounts receivable-Gross $659,800
Add: Sales $1,586,800
Less: Collections $1,182,900
Less: Amount write off $25,300
Balance $1,038,400
Required balance 3% $31,152
Allowance Balance $19,794
Less: Amount written off $25,300
Debit balance $5,506
Add: Required balance $31,152
Bad debts expenses $36,658
To record Liang’s transactions and adjustments for bad debts expense for 2017 and 2018, journal entries need to be made for sales on credit, cost of goods sold, uncollectible accounts write-offs, cash collections, and bad debt expense adjustments using the allowance method for accounts receivable.
Journal Entries for 2017 and 2018
The journal entries to record the summarized transactions and year-end adjustments for bad debts expense using the allowance method for accounts receivable for 2017 and 2018 are as follows:
2017 Transactions
Sales on Credit: Debit Accounts Receivable $1,351,700; Credit Sales $1,351,700.Cost of Goods Sold: Debit Cost of Goods Sold $981,800; Credit Inventory $981,800.Write-Off: Debit Allowance for Doubtful Accounts $21,500; Credit Accounts Receivable $21,500.Cash Collection: Debit Cash $670,400; Credit Accounts Receivable $670,400.Year-End Adjustment: To record the estimated uncollectible accounts, calculate 3% of the ending balance of accounts receivable after write-offs and cash collection, then Debit Bad Debt Expense and Credit Allowance for Doubtful Accounts by the calculated amount.2018 Transactions
Sales on Credit: Debit Accounts Receivable $1,586,800; Credit Sales $1,586,800.Cost of Goods Sold: Debit Cost of Goods Sold $1,326,300; Credit Inventory $1,326,300.Write-Off: Debit Allowance for Doubtful Accounts $25,300; Credit Accounts Receivable $25,300.Cash Collection: Debit Cash $1,182,900; Credit Accounts Receivable $1,182,900.Year-End Adjustment: Similarly, compute 3% of the ending balance of accounts receivable for 2018 and make the necessary adjustment by Debiting Bad Debt Expense and Crediting Allowance for Doubtful Accounts.Please note, the actual figures for year-end adjustment will depend on the ending balance of accounts receivable when these calculations are made. The provided examples are for illustrative purposes only.
Monty Corp. receives $180,000 when it issues a $180,000, 10%, mortgage note payable to finance the construction of a building at December 31, 2019. The terms provide for annual installment payments of $30,000 on December 31. Prepare the journal entries to record the mortgage loan and the first two payments. (Round answers to 0 decimal places, e.g. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Answer:
December 31, 2019
Dr. Cash $180,000
Cr. Mortgage Payable $180,000
December 31, 2020
Dr. Mortgage Payable $12,000
Dr. Interest Expense $18,000
Cr. Cash $30,000
December 31, 2021
Dr. Mortgage Payable $13,200
Dr. Interest Expense $16,800
Cr. Cash $30,000
Explanation:
Mortgage Loan
Installment of Mortgage loan includes the interest expense and principal value. As Cash of $180,000 received, so we need to debit the cash with this value. On the other hand there is a liability arise from this event. A mortgage payable account will be credited because it has credit nature.
First Loan Payment
Installment Payment = $30,000
Interest portion of Installment = $180,000 x 10% = $18,000
Interest portion of Installment = $30,000 - $18,000 = $12,000
First Loan Payment
Installment Payment = $30,000
Interest portion of Installment = ($180,000-12,000) x 10% = $16,800
Interest portion of Installment = $30,000 - $16,800 = $13,200
First Loan Payment
Installment Payment = $30,000
Interest portion of Installment = $180,000 x 10%
Interest portion of Installment = $18,000
Interest portion of Installment = $30,000 - $18,000
Interest portion of Installment = $12,000
Second Loan Payment
Installment Payment = $30,000
Interest portion of Installment = ($180,000-12,000) x 10%
Interest portion of Installment = $16,800
Interest portion of Installment = $30,000 - $16,800
Interest portion of Installment = $13,200
Date Account titles Debit Credit
Dec 31, 2019 Cash $180,000
Mortgage Payable $180,000
Dec 31, 2020 Mortgage Payable $12,000
Interest Expense $18,000
Cash $30,000
Dec 31, 2021 Mortgage Payable $13,200
Interest Expense $16,800
Cash $30,000
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Whole milk is one of the joint products in a joint manufacturing process. Management is considering whether to sell the whole milk at the split-off point or to process it further into cheese. The following data have been gathered:
I. Selling price of the whole milk
II. Variable cost of processing the whole milk into cheese
III. The avoidable fixed costs of processing the whole milk into cheese
IV. The selling price of cheese
V. The joint cost of the process from which the whole milk is produced
Which of the above items are relevant in a decision of whether to sell the whole milk as is or process it further into cheese?
a. I, II, and IV
b. I, II, III, and IV
c. I, II, III, and V
d. I, III, and V
Answer:
Option (b) : I, II, III, and IV
Explanation:
As per the data given in the question,
In order to evaluate weather a product is sold at a split-off point or can be further processed, the joint processing costs that have already been obtained will have no effect on the decision because the costs and revenues that will be acquired and obtained after consideration will have to be decided whether to continue processing or not. The sunken cost is the cost of processing jointly. Therefore it will not affect the decision to process further or not.
Hence, Option (b) : I, II, III, and IV is correct answer
A small nation of 10 people idolizes the TV show The Voice. All they produce and consume are karaoke machines and CDs, in the following amounts: Karaoke Machines CDs Quantity Price Quantity Price (Dollars) (Dollars) 2017 20 50 60 5 2018 21 70 80 6 Using a method similar to that used to calculate the consumer price index, the percentage change in the overall price level is . (Note: Use 2017 as the base year, and fix the basket at 2 karaoke machine and 6 CDs.)
Answer:35.38%
Explanation: Using basket at 2 karaoke machine and 6 CDS
Value of market basket o in 2017 = ($50 * 2) + ($5 * 6) = $130
Value of market basket in 2018 = ($70 * 2) + ($6 * 6) = $176
-Using 2017 as base year
Customer Price Index in 2017 = ($130 / $130) * 100 = 100
CPI in 2018 = ($176 / $130) * 100 = 135.38
% change in overall price = 135.38- 100= 35.38%
or
Percentage change in overall price=base index- new index / base index X 100
= $176 - $130/ 130= 46/130= 0.3538 x 100 = 35.38%.
8. A company increased the selling price of its product from $1.00 to $1.10 a unit when total fixed costs increased from $400,000 to $480,000 and variable cost per unit remained unchanged. How will these changes affect the breakeven point? A. These changes will increase the breakeven point B. These changes will decrease the breakeven point C. These changes will not affect the breakeven point D. The effect cannot be determined
Answer:
C. These changes will not affect the breakeven point
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.
As such, the net operating income/loss is the difference between the sales and the total costs
Let the number of units to break even be u, the variable cost per units be v
then before the increase,
u(1 - v) = 400,000
u = 400,000/(1 - v)
After the increase
u(1.1 - v) = 480,000
u = 480,000/(1.1 - v)
Assuming a random figure of $0.50 for the variable cost per unit, the units required to breakeven before the changes made
= 400000/(1-0.5)
= 800,000 units
After the changes made the units required to breakeven
= 480,000/(1.1 - 0.5)
= 480,000/0.6
= 800,000 units
Wholemark is an Internet order business that sells one popular New Year's greeting card. The cost of the paper on which the card is printed is $0.10 per card, and the cost of printing is $0.42 per card. The company receives $2.40 per card sold. Since the cards have the current year printed on them, unsold cards have no salvage value. Based on past data, the number of customers from Los Angeles is normally distributed with a mean of 2,500 and a standard deviation 600. What is the optimal production quantity for the card for Los Angeles, if Wholemark only makes a one-time production for this area?
Answer:
Optimal production quantity = 2970
Explanation:
As per the data given in the question,
Cost of card (c) = $0.10 + $0.42 = $0.52
Selling price (p) = $2.40
Salvage value (v) = 0
So,Critical ratio (Z)
= (p - c) ÷ (p - v)
= ($2.40 - $0.52) ÷ ($2.40 - 0)
=0.7833
Z(0.7833) = NORMSINV (0.7833)
Z(0.7833) = 0.783387
n = no. of city = 1
μ = n × mean demand = 1 × 2,500 = 2,500
Optimal production quantity = μ + Z (0.7833) × standard deviation
= 2,500 + 0.783387 × 600
= 2970.03
= 2970
We simply applied the above formula
Renaissance Technologies (RenTech) is a good example of a hedge fund that has benefited from the ________________ to the financial sector. Select one: a. migration of low-level talent b. migration of high-level talent c. migration of entry-level MBA talent d. migration of large amount of cash
Answer:
The correct option is D) migration of high level talent
Explanation:
Renaissance Technologies (RenTech) is a good example of a hedge fund that has benefited from the migration of high level talent to the financial sector.
Known for their continued success and almost impenetrable fortress, Renaissance Technologies (RenTech) continues to thrive with a net worth of US$ 110 billion as of June 30, 2019.
Their mode of operation is uncommon and their human resource was drawn from a bunch of mathematicians and very skilled scientists.
This hedge fund specializes in systematic trading using quantitative models derived from mathematical and statistical analyses.
Their success is not unconnected with the migration of high level talent into the financial sector.
On January 1, 2021, Harrington, Inc. signed a 10-year noncancelable lease for a heavy duty drill press from Jones Equipment Inc. The lease stipulated annual payments of $260,000 starting at the beginning of the first year, with title passing to Harrington at the expiration of the lease. Harrington treated this transaction as a finance lease. The drill press has an estimated useful life of 15 years, with no salvage value. Harrington uses straight-line amortization for all of its plant assets. Aggregate lease payments were determined to have a present value of $1,668,591, based on implicit interest of 9%. In its 2021 income statement, what amount of amortization expense should Harrington report from this lease transaction
Answer: $126,773.19
Explanation:
First the $260,000 must be subtracted from the present value.
= 1,668,591 - 260,000
= $1,408,591
This was done because the $260,000 was paid in the beginning of the year and has thus reduced the liability.
The amortization expense will therefore be,
= 1,408,591 * 0.09
= $126,773.19
In its 2021 income statement, Harrington should report $126,773.19 as amortization expenses.
On January 4, 2019, Kiley Co. leased a building to Dodd Corp. for a ten-year term at an annual rental of $200,000. At the beginning of the lease, Kiley received $800,000 covering the first two years' rent of $400,000 and a security deposit of $400,000. This deposit will not be returned to Dodd upon expiration of the lease but will be applied to payment of rent for the last two years of the lease.What portion of the $800,000 should be shown as a current and long-term liability in Kiley's December 31, 2019 balance sheet? Current Liability Long-term Liabilitya. $0 $800,000b. $200,000 $400,000c. $400,000 $400,000d. $400,000 $200,000
Answer:
b. $200,000 $400,000
Explanation:
As it given that $800,000 received by Kiley, out of which $400,000 is the security deposit amount and remaining $400,000 represents the current year and the next year rent
So we assume $200,000 is the current year rent revenue and the other $200,000 represents the unearned rent revenue which is reflected as a current liability
And, the security amount is shown as a long term liability
Seaside Developments Inc. has $200,000 of no par value 4% cumulative preferred shares, and 12,000 shares of no par value common shares outstanding. In its first three years of operation, the company paid cash dividends as follows: Year 1: $8,000; Year 2: $18,000; and Year 3: $24,000.
The amount of dividends received by the preferred shareholders in year 2 was ____.
Answer:
$8,000
Explanation:
The computation of the amount of dividend received by the preferred shareholders in year 2 is shown below:
Annual preferred dividend = Par value of preferred stock × Dividend rate on preferred stock
= 200,000 × 4%
= $8,000
By multiplying the par value with the dividend rate we can get the amount of dividend received and the same is shown above
Many proposers in the ultimatum game offer half to the responder with whom they are paired. This behavior could be motivated by: Instructions: You may select more than one answer. Click the box with a check mark for correct answers and click to empty the box for the wrong answers. a. Fear that an unequal split might be rejected by a fair-minded responder.b. A desire to induce the responder to reject the offer.c. A strong sense of fairness on the part of the proposers.d.Unrestrained greed on the part of the proposers.
Answer: option C is the most correct answer. A strong sense of fairness on the part of the proposers.
Explanation: The ultimatum game is a type of game that is used to experiment the economy, which comprise of two players, which are the proposers and the responder. In this game, the proposer is given a sum of money, which he has to decide the amount which the responder will receive. The proposer will only want to share the amount in equal part, just to be fair to the responder in the game. It's either the responder accepts the money or rejects it.
Concord Corporation is planning to sell 500 boxes of ceramic tile, with production estimated at 470 boxes during May. Each box of tile requires 44 pounds of clay mix and a 0.25 hour of direct labor. Clay mix costs $0.40 per pound and employees of the company are paid $17 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Concord has 4600 pounds of clay mix in beginning inventory and wants to have 5000 pounds in ending inventory.
What is the total amount to be budgeted for manufacturing overhead for the month?
The project will require an initial investment of $20,000, but the project will also be using a company-owned truck that is not currently being used. This truck could be sold for $14,000, after taxes, if the project is rejected. What should Black Sheep Broadcasting do to take this information into account
Answer and Explanation:
Given that
Initial investment = $20,000
Sale value of the truck = $14,000
Based on the information given, the amount of initial investment should be increased by sale value of the truck i.e $14,000 as it denotes the opportunity cost i.e to be lost not the sunk cost
Therefore, in this case the amount of the initial investment should be increased by $14,000
As applied to mortgage loans, which of the following statements is FALSE? By increasing the number of payments per year you increase your effective borrowing rate. Advertised rates are annual percentage rates. A spreadsheet uses the periodic interest rate, not the annual percentage rate. You can find a monthly payment by dividing the annual payment by 12.
Answer:
The statement that is false about mortgage loans is Advertised rates are annual percentage rates.
Explanation:
Mortgage loan refers to a loan that uses real estate as collateral to receive cash upfront to be redeemed after the loan repayment is completed. if the loan is not remitted as at when due , the lender lays claim to the real estate property.
By increasing the number of payments per year you increase your effective borrowing rate.
When you use a spreadsheet to calculate your interest rates, it uses the periodic interest rate, not the annual percentage rate.
You can find a monthly payment by dividing the annual payment by 12.
However, advertised interest rate are not the same as your loan's annual percentage rate (APR) because other charges like mortgage insurance, closing costs, discount points and loan origination fees apply.
Hanung Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $360,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $110,000 are allocated based on the number of employees. The costs of operating departments A and B are $188,000 and $282,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows
Support Production
Departments Departments
Maintenance Personnel
Department Department A B
Budgeted costs $360,000 $110,000 $188,000 $282,000
Budgeted maintenance-hours NA 880 1230 680
Number of employees 60 NA 290 630
Using the direct method, what amount of Maintenance Department costs will be allocated to Department B?
a. $100,398
b. $128,168
c. $87,742
d. $167,330
Answer:
b. $128,168
Explanation:
Hanung Corp
Service Departments
Maintenance Department Personnel Department
Costs $360,000 $110,000
Cost Driver budgeted maintenance-hours number of employees
Budgeted
Maintenance-hours NA 880
Number of employees 60 NA
Production Departments
Department A Department B
Budgeted Costs $188,000 $282,000
Budgeted
Maintenance-hours 1230 680
Number of employees 290 630
First we find the rate by dividing the total budgeted cost of Maintenance with the budgeted maintenance hours then we multiply it with the maintenance hours of Department to B to get Department B maintenance Costs.
Using the direct method, the amount of Maintenance Department costs will be allocated to Department B
=($ 360,000/ 1230+680 )*680=($ 360,000/ 1910 )*680=$ 128167.53
= $ 128167
So choice B is the correct answer.
Cullumber, Inc. produces three types of balloons—small, medium, and large—with the following characteristics: Small Medium Large Selling price per unit $6 $8 $10 Variable cost per unit 3 5 6 Contribution margin per unit $3 $3 $4 Machine hours per unit 1 2.4 3 Demand in units 600 1,190 880 The company has only 2,000 machine hours available each month. How many units of each type of balloon should the company make to maximize its total contribution margin? (Round answers to 0 decimal places, e.g. 5,275.)
Answer: Small Balloons - 600 units
Medium Balloons - 0 units
Large Balloons - 467 units
Explanation:
To solve this question, the Contribution margin per hour must be ascertained to find out which product is manufactured more efficiently in relation to machine hours.
Small Balloon.
= Contribution margin per unit/ Machine hours per unit
= 3/1
= 3
Medium Balloon.
= Contribution margin per unit/ Machine hours per unit
= 3/2.4
= 1.25
Large Balloon
= Contribution margin per unit/ Machine hours per unit
= 4/3
= 1.33
From the above we can rank the most efficient.
Efficiency Ranking
Small Balloon - 1
Large Balloon - 2
Medium - Balloon 3
As a rule, it is better that a company produces goods it is more efficient at first,
Small Balloons will be produced first and have a demand of 600 units.
With a cost of 1 unit therefore, producing 600 would be,
= 600 * 1
= 600 machine hours.
With Small Balloons taking 600 hours and with a limit of 2,000 hours we are left with,
= 2,000 - 600
= 1,400 hours.
Next in production is Large Balloons at a demand of 880 units with each unit costing $3,
= 880 * 3
= 2,640 machine hours
Seeing as we only have 1,400 machine hours left all these hours will be converted to used for Large Balloons which means the following number of units will be produced,
= 1,400/3
= 466.67
= 467 units.
The Company should produce in the following order to maximise its total contribution margin.
Small Balloons - 600 units
Medium Balloons - 0 units
Large Balloons - 467 units
The Heather Honey Company purchases honeycombs from beekeepers for $2.00 a pound. The company produces two main products from the honeycombs%u2014honey and beeswax. Honey is drained from the honeycombs, and then the honeycombs are melted down to form cubes of beeswax. The beeswax is sold for $1.50 a pound.
The honey can be sold in raw form for $3.00 a pound. However, some of the raw honey is used by the company to make honey drop candies. The candies are packed in a decorative container and are sold in gift and specialty shops. A container of honey drop candies sells for $4.40.
Each container of honey drop candies contains three quarters of a pound of honey. The other variable costs associated with making the candies are as follows:
Decorative container $0.40
Other ingredients 0.25
Direct labor 0.20
Variable manufacturing overhead 0.10
Total variable manufacturing cost $0.95
The monthly fixed manufacturing overhead costs associated with making the candies follow:
Master candy maker%u2019s salary $3,880
Depreciation of candy making equipment 400
Total fixed manufacturing cost $4,280
The master candy maker has no duties other than to oversee production of the honey drop candies. The candy making equipment is special-purpose equipment that was constructed specifically to make this particular candy. The equipment has no resale value and does not wear out through use.
A salesperson is paid $2,000 per month plus a commission of 5% of sales to market the honey drop candies.
The company had enjoyed robust sales of the candies for several years, but the recent entrance of a competing product into the marketplace has depressed sales of the candies. The management of the company is now wondering whether it would be more profitable to sell all of the honey rather than converting some of it into candies.
Required:
1.What is the incremental contribution margin per container from further processing the honey into candies?
2.What is the minimum number of containers of candy that must be sold each month to justify the continued processing of honey into candies?
The incremental contribution margin per container from further processing the honey into candies is $0.98.
The incremental contribution margin per container will be calculated thus:
= $4.40 - $0.95 - $4.4 × 5% - 3 × 3 / 4
= $0.98
On the other hand, the minimum number of containers of candy sold each month will be:
=($2,000 + $3,880) / $0.98
= 6,000 containers
Therefore, the minimum number of containers of candy that must be sold each month is 6000.
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Final answer:
To continue producing honey drop candies profitably, the Heather Honey Company needs an incremental contribution margin of $1.20 per container and must sell at least 8,467 containers monthly to cover fixed and variable costs.
Explanation:
The financial viability of continuing to produce honey drop candies in the face of competition, considering the incremental contribution margin per container and the minimum number of containers that must be sold to justify production. First, to calculate the incremental contribution margin per container of candy, we consider the selling price of the candies ($4.40) minus the cost of honey ($3.00 × 0.75 = $2.25) and the total variable manufacturing costs ($0.95) linked to the production of candies. This results in an incremental contribution margin of $1.20 per container. To determine the break-even point for candy production, considering both fixed and variable costs, we include the fixed manufacturing overhead ($4,280), the salary of the master candy maker ($3,880), and the salesperson's fixed compensation ($2,000). Knowing the fixed costs ($10,160) and the incremental contribution margin per container ($1.20), the Heather Honey Company must sell a minimum of 8,467 containers per month (rounded up from 8466.6667) to cover these costs and justify the continued processing of honey into candies.
hich one of the following statements is correct? Question 13 options: A longer payback period is preferred over a shorter payback period. The payback rule states that you should accept a project if the payback period is less than one year. The payback period ignores the time value of money. The payback rule is biased in favor of long-term projects. The payback period considers the timing and amount of all of a project's cash flows.
Answer:
The payback period ignores the time value of money.
Explanation:
The Payback period calculates the amount of time it takes to recover the amount invested in a project from its cumulative cash flows.
The shorter the payback period, the more desirable a project is.
The company determines the maximum pay back period, it can be a year or more than a year of even less.
The Payback period doesn't account for the time value of money. The discounted playback period corrects for this limitation.
The Payback period method ignores cash flows after the payback period has been reached.
I hope my answer helps you
You buy a seven-year bond that has a 5.75% current yield and a 5.75% coupon (paid annually). In one year, promised yields to maturity have risen to 6.75%. What is your holding-period return? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Answer :
Holding period return = 0.95%
Explanation :
As per the data given in the question,
Years of maturity = 7
Coupon rate = 5.75%
Current yield = 5.75%
Per value of bond = $1000.00
Coupon payment = Par value × Coupon rate
=1,000 ×5.75%
= $57.50
Current yield = Coupon payment ÷ price of bond
0.575 = $57.50 ÷ Price per bond
Price per bond = $1,000
In 1 year the yield to maturity increases to = 6.75%
Price of bond after 1 year = $951.96
The formula is shown below:
=-PV(RATE;NPER;PMT:FV:0)
where
Rate = 6.75%
FV = $1,000
PMT = $57.5
NPER = 7 - 1 = 6 years
Please find the attachment below:
Holding period return = (Price of bond after one year - Current bond price + Coupon payment) ÷ Current bond price
= 0.95%
Use the information given below to answer the questions that follow.
True Nutri Inc. sells performance enhancing foods and beverages for athletes and health-conscious people. In a recent product development meeting, Mike suggested that True Nutri Inc. should acquire a new technology developed by One Health Corp. for infusing vitamin and mineral blends into food. He believed it would be easier to acquire the technology directly from One Health Corp. Justin felt that the method of infusing blends into food should be developed within True Nutri Inc. itself. He knows it may take longer but feels that the competitive advantage it would provide was worth the wait. Lara suggested that True Nutri Inc. should use its resources and work jointly with One Health Corp. to develop an entirely new product.
Based on the scenario, which method of acquiring technology does Justin favor?Question 1 options:
1-internal development
2-licensing
3-contracted development
4-franchising
5-research partnership
Answer:
1. Internal development.
Explanation:
From the write up, Justin felt that the method of infusing blends into food should be developed within True Nutri Inc. itself. He knows it may take longer but feels that the competitive advantage it would provide was worth the wait.
Based on the scenario, Justin favors internal development as a method of acquiring technology.
Internal development describes a growth strategy that focuses on developing an organization by making use of its own resources and capabilities.
Basically, internal development helps to expand businesses, boost productivity and sales, increase efficiency etc.
Swifty Inc. has three divisions which are operated as profit centers. Actual operating data for the divisions listed alphabetically are as follows. Compute the missing amounts. Operating Data Women’s Shoes Men’s Shoes Children’s Shoes Contribution margin $304,020 $ (3) $202,680 Controllable fixed costs 112,600 (4) (5) Controllable margin (1) 101,340 106,970 Sales 675,600 506,700 (6) Variable costs (2) 360,320 281,500 Prepare a responsibility report for the Women’s Shoes Division assuming (1) the data are for the month ended June 30, 2020, and (2) all data equal budget except variable costs which are $5,630 over budget. SWIFTY INC. Women’s Shoe Division Responsibility Report For the Month Ended June 30, 2020 Difference Budget Actual Favorable Unfavorable Neither Favorable nor Unfavorable $ $ $ $ $ $
Answer:
(1) Controllable margin $ 191420
(2) Variable Costs$ 371580
(3) Contribution Margin $ 146380
(4)Controllable fixed costs $45,040
(5) Controllable fixed costs $ 95710
(6) Sales $ 484,180
Explanation:
The workings have been done to show the results.
Swifty Inc.
Women’s Shoes Men’s Shoes Children’s Shoes
Sales 675,600 506,700 (6) $ 484180
Variable costs (2)$ 371580 360,320 281,500
C. Margin $304,020 $ (3)146380 $202,680
(2) Variable Costs = Sales - Contribution Margin= 675600- 304020=
$ 371580
(3) Contribution Margin= Sales - Variable Costs = 506,700-360,320 = $ 146380
(6) Sales = Contribution Margin + Variable Costs= 281,500 +$202,680 = $ 484,180
Swifty Inc.
Women’s Shoes Men’s Shoes Children’s Shoes
Sales 675,600 506,700 $ 484180
Variable costs $ 371580 360,320 281,500
C. Margin $304,020 $ 146380 $202,680
Controllable
fixed costs 112,600 (4) $45,040 (5) $ 95710
Controllable margin (1) $ 191420 101,340 106,970
(1) Controllable margin=Contribution Margin-Controllable fixed costs
= $ 304,020 -112,600 =$ 191420
(4) Contribution Margin- Controllable margin=Controllable fixed costs
$ 146380 - 101,340 = $45,040
(5) Contribution Margin- Controllable margin=Controllable fixed costs
$202,680 - 106,970 = $ 95710