Answer:
Contraction
Explanation:
The business cycle refers to the fluctuations that happen in an economic activity over time. This cycle has 4 stages that are:
-Expansion is when the economy grows and employment is higher.
-Peak is a transition between expansion and contraction and it is a point in which the economy reaches its highest output.
-Contraction is a stage in which growth stops and unemploymetnt rises.
-Trough is a stage in which the economy gets to its lowest point before a rise.
According to this, the answer is that in the context of the business cycle, Bruslon is most likely going through a period of contraction because there is an economic downturn that forced Loger's to lay off many employees.
A firm produces output using capital and labor. The firm's marginal product of labor (MP Subscript Upper L) is 40 and its marginal product of capital (MP Subscript Upper K) is 28. Suppose the wage per unit of labor (w) is $6.00 and the cost per unit of capital (r) is $3.00. Is the firm minimizing the cost of production? What should the firm do, if anything, to produce the same level of output at lower cost? The firm
Answer:
a. No, the firm is not minimizing the cost of production.
b. The firm should continue to increase the units of labor by reducing the unit of capital until when the ratio of Marginal product of labor to Marginal product of capital of is equal to the ratio of w to r.
Explanation:
a. Is the firm minimizing the cost of production?
The firm minimizing the cost of production where:
Marginal product of labor / Marginal product of capital = w / r
From the question, we have:
40 / 28 = 6 / 3
1.43 = 2
Since the ratio of Marginal product of labor to Marginal product of capital of 1.43 is not equal to the ratio of w to r, the firm is not minimizing the cost of production.
b. What should the firm do, if anything, to produce the same level of output at lower cost?
The firm should continue to increase the units of labor by reducing the unit of capital until when the ratio of Marginal product of labor to Marginal product of capital of is equal to the ratio of w to r.
The closest point at which this will happen is when the Marginal product of labor is 45 and Marginal product of capital is 23 where we have:
45 / 23 = 1.96, or 2 approximately.
The firm is not minimizing the cost of production, since the ratios of marginal product to input cost for labor and capital are not equal. To minimize cost, the firm should employ more labor and less capital.
Explanation:Cost minimization in a production process requires that the ratio of the marginal product of labor to the wage (MP Subscript Upper L/w) is equal to the ratio of the marginal product of capital to the cost of capital (MP Subscript Upper K/r). In this case, the given MP Subscript Upper L is 40 and the wage is $6.00, giving a ratio of 40/6 = 6.67. Meanwhile, the MP Subscript Upper K is 28 and the cost of capital is $3.00, giving a ratio of 28/3 = 9.33.
Since the two ratios are not equal, the firm is not minimizing the cost of production. To lower costs, the firm should employ more of the input that is relatively cheaper per unit of marginal product- in this case, labor- and less of the input that is relatively more expensive per unit of marginal product- here, capital. This adjustment allows the firm to produce the same level of output at a lower cost.
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At the beginning of the month, the Painting Department of Skye Manufacturing had 40,000 units in inventory, 80% complete as to materials, and 25% complete as to conversion. The cost of the beginning inventory, $48,650, consisted of $42,400 of material costs and $6,250 of conversion costs. During the month the department started 135,000 units and transferred 150,000 units to the next manufacturing department. Costs added in the current month consisted of $329,600 of materials costs and $604,500 of conversion costs. At the end of the month, the department had 25,000 units in inventory, 40% complete as to materials and 10% complete as to conversion. If Skye Manufacturing uses the weighted average method of process costing, compute the costs per equivalent unit of materials and conversion respectively for the Painting Department.
Answer:
Material Cost per equivalent unit = $2.325
Conversion Cost per equivalent unit = $4.004
Explanation:
According to the scenario, computation of the given data are as follow:-
Particular Material cost Conversion cost
Completed and transferred out units 150,000 150,000
Work in process at the end of the month 10,000 2,500
Equivalent units per material 160,000 152,500
Cost incurred in the current month consisted $372,000 $610,750
Cost per equivalent unit $2.325 $4.004
Work in Process at the end of the Month Material Cost = Units × Percent
= 25,000 × 40÷100 = 10,000
Work in process at the end of the month conversion cost =25,000 × 10÷100
= 2,500
Material Cost incurred= $329,600 + $42,400 = $372,000
Conversion Cost incurred= $604,500 + $6,250 = $610,750
Cost Per Equivalent Unit = Cost Incurred ÷ Equivalent Unit
Material Cost per equivalent unit = 372,000 ÷ 160,000
= $2.325
Conversion Cost per equivalent unit = 610,750 ÷ 152,500
= $4.004
How do managers decide upon an ethical course of action when confronted with decisions pertaining to working conditions, human rights, corruption, and environmental pollution? From an ethical perspective, how do managers determine the moral obligations that flow from the power of a multinational? In many cases, there are no easy answers to these questions because some are very real dilemmas with no obvious correct action. Nevertheless, managers can and should do many things to make sure that basic ethical principles are adhered to and that ethical issues are routinely inserted into international business decisions.
Explanation:
Organizational ethics is a competitive advantage in organizations.
In the globalized business world, the companies that insert an ethical context in all their internal and external decisions are those with a better positioning in the market, a better image before the stakeholders and greater value for the potential audience.
Nowadays, companies are also seen as transforming agents of society, so it is important that there is ethical management for all social and environmental issues on the rise in the world, it is necessary that issues involving working conditions, human rights, corruption and environmental pollution are based on ethical policies that assist in complying with the legislation in force in a locality and that overcome it, becoming an agent that acts with transparency in favor of improving the living conditions of society.
The internationalization of companies is another factor that requires an ethical and moral positioning established through legislation, culture and values of a specific country where a multinational is established, since cultural differences can be related to ethical dilemmas whose managers must seek preventive actions so that differences and values are respected and established through an ethical inclusion policy.
The cash flows below contain the year 1 cash flows for a potential real estate investment. What is the property's operating expense ratio? Year 1 Number of Units 75 Average Rent $800 Potential Gross Income $720,000 Vacancy and Collection Losses ($72,000) Effective Gross Income $648,000 Operating Expenses ($243,389) Capital Expenditures ($19,440) Net Operating Income $385,171 Annual Debt Service ($323,301) Before-Tax Cash Flow $61,870
Answer:
37.56%
Explanation:
Data provided
Operating expenses = $243,389
Effective gross income = $648,000
The computation of property's operating expense ratio is shown below:-
Operating expenses ratio = Operating expenses ÷ Effective gross income
= $243,389 ÷ $648,000
= 0.3756
= 37.56%
Therefore for computing the operating expenses ratio we simply divide operating expenses by effective gross income.
On March 1, 2018, Mandy Services issued a 3% long-term notes payable for $15,000. It is payable over a 3-year term in $5000 principal installments on March 1 of each year, beginning March 1, 2019. Each yearly installment will include both principal repayment of $5000 and interest payment for the preceding one-year period. What is the amount of total cash payment that Mandy will make on March 1, 2019?
Answer:
$5,450.
Explanation:
Payment of Interest expenses = $15,000 * 3% = $450
Principal repayment = $5,000
Total cash payment on March 1, 2019 = $5,000 + $450 = $5,450.
Therefore, the amount of total cash payment that Mandy will make on March 1, 2019 is $5,450.
8. Fung Manufacturing, Inc. (FMI), currently has 275000 shares of stock outstanding that sell for $75 per share. Assuming no market imperfections or tax effects exist, what will the share price be after: a. RMO has a two-for-five reverse stock split? b. RMO has a 6 percent stock dividend? c. RMO has a 18 percent stock dividend? d. RMO has a nine—for-two stock split? e. Redo parts a to d and determine the new number of shares.
Final answer:
After various stock actions, FMI's share prices adjust to maintain the same total market value. A reverse stock split increases the price, while a stock dividend or a regular stock split decreases the price.
Explanation:
Fung Manufacturing, Inc. (FMI) starts with 275,000 shares worth $75 each. The share price adjustment after various stock actions are as follows:
Two-for-five reverse stock split: The number of shares will reduce to 2/5 of the original. New price = (275,000 * 2/5) shares = 110,000 shares; total market value remains the same, so the new share price = 275,000 * $75 / 110,000 = $187.50.6 percent stock dividend: The number of shares increases by 6%, but the market cap remains the same, so the new share price will decrease to factor the increase in shares. New shares = 275,000 * 1.06 = 291,500; new share price = (275,000 * $75) / 291,500 = $70.50.18 percent stock dividend: Similar to the 6% dividend, shares increase by 18%. New shares = 275,000 * 1.18 = 324,500; new share price = market cap / new number of shares = $20,625,000 / 324,500 = $63.55.Nine-for-two stock split: The number of shares becomes 9/2 times the original. New shares = 275,000 * (9/2) = 1,237,500; new share price = market cap / new number of shares = $20,625,000 / 1,237,500 = $16.67.The concept of capital gains is relevant as it represents the increase in value of stock between purchase and sale, impacting investor returns alongside dividends.
The bookkeeper prepared a check for $68 but accidentally recorded it as $86. When preparing the bank reconciliation, this should be corrected by:
A. Adding $18 to the bank balance
B. Adding $18 to the book balance
C. Subtracting $18 from the bank balance
D. Subtracting $18 from the book balance.
Answer:
B. Adding $18 to the book balance
Explanation:
Because the bookkeeper accidentally reduced the book balance in $18 by recording the check payment for $86 instead of the actual $68, this mistake can simply be corrected by adding those $18 back to the book balance when making the bank reconciliation.
hown here are annual financial data at December 31, 2017, taken from two different companies. Music World Retail Wave-Board Manufacturing Beginning inventory Merchandise $ 200,000 Finished goods $ 500,000 Cost of purchases 300,000 Cost of goods manufactured 875,000 Ending inventory Merchandise 175,000 Finished goods 225,000 Required: 1. Prepare the cost of goods sold section of the income statement at December 31, 2017, for each company in Merchandising Business and Manufacturing Business.
Answer and Explanation:
As per the data given in the question,
a)
Music World Retail
Partial Income Statement
For year ended Dec-31,2017
Cost of goods sold :
Beginning merchandise inventory $200,000
Add: Cost of purchase $300,000
Goods available for sale $500,000
Less: Ending merchandise inventory $175,000
Cost of goods sold $325,000
b)
Wave Board Manufacturing
Partial Income Statement
For year ended Dec-31,2017
Cost of goods sold :
Beginning finished goods inventory $500,000
Add: Cost of goods manufacture $875,000
Goods available for sale $1,375,000
Less: Ending finished inventory $$225,000
Cost of goods sold $1,150,000
We simply applied the above format
On September 1, 2020, Windsor Company sold at 104 (plus accrued interest) 3,840 of its 8%, 10-year, $1,000 face value, nonconvertible bonds with detachable stock warrants. Each bond carried two detachable warrants. Each warrant was for one share of common stock at a specified option price of $13 per share. Shortly after issuance, the warrants were quoted on the market for $2 each. No fair value can be determined for the Windsor Company bonds. Interest is payable on December 1 and June 1. Prepare in general journal format the entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation
Answer:
total sales value = 3,840 x $1,000 = $3,840,000 x 1.04 = $3,993,600
since each bond carried 2 detachable stock warrants, we must include in the bond issuance the value of the stock warrants = 3,840 bonds x 2 warrants x $2 per warrant = $15,360
the premium on bonds payable = total cash received - bonds payable - stock warrants = $3,993,600 - $3,840,000 - $15,360 = $138,240
the journal entry for recording the bond issuance:
September 1, 2020, 3,840 8% bonds issued
Dr Cash 3,993,600
Cr Bonds payable 3,840,000
Cr Premium on bonds payable 138,240
Cr Additional paid in capital - warrants 15,360
To record the issuance of the Windsor Company bonds with detachable stock warrants, the market value of the warrants is used to allocate a portion of the proceeds. The journal entry includes the accounts for Cash, Bonds Payable, Premium on Bonds Payable, and Stock Warrants. The Premium on Bonds Payable is adjusted to account for the value of the warrants.
To record the issuance of the bonds with detachable stock warrants by Windsor Company, we must separate the bond's value from the warrants' value. Since we do not have a fair value for the bonds, we need to use the market value of the warrants to allocate a portion of the proceeds to the warrants and the remainder to the bonds. Here is the journal entry on September 1, 2020, assuming the bonds were issued for cash:
Cash (3,840 bonds × $1,000 face value × 104%) = $3,993,600Bonds Payable (face value of the bonds) = $3,840,000Premium on Bonds Payable (the excess of cash received over the face value of the bonds) = $153,600However, this does not take into account the value of the attached warrants. To allocate value to the warrants, we can use the market value of the warrants (3,840 bonds × 2 warrants/bond × $2 per warrant = $15,360). Therefore, the journal entry would include an additional line:
Stock Warrants (value of the detachable warrants) = $15,360The Stock Warrants account reflects the value attributed to the warrants, which would then reduce the Premium on Bonds Payable by the same amount. The adjusted premium would be the original premium less the value of the warrants ($153,600 - $15,360 = $138,240).
On March 1, 2018, E Corp. issued $1,400,000 of 8% nonconvertible bonds at 101, due on February 28, 2028. Each $1,000 bond was issued with 50 detachable stock warrants, each of which entitled the holder to purchase, for $65, one share of Evan's $45 par common stock. On March 1, 2018, the market price of each warrant was $3. By what amount should the bond issue proceeds increase shareholders' equity?
Answer:
$210,000
Explanation:
No market value was been given for the bonds.
Therefore the amount attributable to the warrants (shareholders' equity) =
Market price of each warrant was $3 ×50 detachable stock warrants per bond
=$150
Issued $1,400,000/$1,000 bond
=$1,400
Hence:
$150 × 1,400 bonds
= $210,000.
Therefore the amount that the bond should issue if proceeds increase shareholders' equity is $210,000
Stuchlik Catering uses two measures of activity, jobs and meals, in the cost formulas in its budget and performance reports. The cost formula for catering supplies is $430 per month plus $80 per job plus $14 per meal. A typical job involves serving a number of meals to guests at a corporate function or at a host's home. The company expected its activity in January to be 20 jobs and 190 meals, but the actual activity was 21 jobs and 194 meals. The actual cost for catering supplies in January was $4,850. The catering supplies in the planning budget for January would be closest to:
a. $4,850
b. $4,690
c. $4,826
d. $4,619
Answer:
Total cost= $4,690
Explanation:
Giving the following information:
Fixed costs= $430
Cost per job= $80
Cost per meal= $14
The company expected its activity in January to be 20 jobs and 190 meals.
The cost that would appear in the planned budget is calculated using the estimated activity.
Total cost= 430 + 80*20 + 14*190
Total cost= $4,690
Oza has established several successful products in the competitive beverage Why has he been able to achieve this success when large organizations with more resources, such as Coca Cola and Pepsi, are forced to buy these new successful brands?
What types of unique marketing support helped to sustain Vitaminwater and Bai’s tremendous growth?
Suggest a celebrity endorsement with a beverage brand, and tell why that pairing would lead to What are the brand attributes and the reputation of the endorser that would resonate with specific consumer segments?
Answer:
1.) Rigorous marketing strategy
2.) partnerships with celebrities who found the product appealing
3.) Fifty cent, Taylor Swift, Rihanna and madonna
4.) The brand has to be a fan of a celebrity and the celebrity must also be a fan of the product
Explanation:
1.) Why has he been able to achieve this success when large organizations with more resources, such as Coca Cola and Pepsi, are forced to buy these new successful brands?
He used to take products everywhere, which were mainly bottles of Vitamin Water. He would hand the flight attendants drinks, the hostess on the gates, other people on the flight.
These people influence large amounts of society. They see thousands of a people on a regular basis and it just takes people with that reach to say they love something and recommend it to as many people as possible. In that way, he will surely win brand fans
That is how he build up a brand culture without taking just traditional routes of advertising
2.) What types of unique marketing support helped to sustain Vitaminwater and Bai’s tremendous growth?
Vitaminwater tremendously came up with different marketing approaches by forming creative partnerships with celebrities who found the product appealing
3.) Suggest a celebrity endorsement with a beverage brand, and tell why that pairing would lead to success.
Taylor's the most iconic musician and celebrity on the planet. She does what she wants and isn't deterred by the press or anyone else. She managed to influence one of the biggest corporations on the planet — Apple – that's real power. Partnering with her will definitely lead to success because she also rolls with a posse and a crew of people who are all beautiful females.
4.) What are the brand attributes and the reputation of the endorser that would resonate with specific consumer segments
It has to be a good organic fit where the brand is a fan of a celebrity and the celebrity is a fan of the product.
People need a natural fit otherwise it will be too forced. The celebrity endorsement should not be forced because people will discover that and reject it and people will tell you about it.
Oza has had successful products in the competitive beverage despite the presence of bigger companies because of the rigorous marketing strategies used.
Oza took the products with him wherever he went to. He also encouraged people to purchase his product. He used the aggressive marketing strategy to achieve his aim.The types of unique marketing support that helped to sustain Vitaminwater and the growth of Bai was the partnerships with celebrities.A celebrity endorsement with celebrities such as Drake, Ronaldo, Beyonce etc will help in the growth of one's brand. These people are well known and will have a positive impact on ones product as there'll be higher demand.In conclusion, partnership with celebrity can help one's business.
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Property taxes incurred on the factory would be considered a(n): A. Manufacturing overhead cost B. Direct cost C. Period cost D. Direct material cost Denim used to manufacture jeans would be considered a(n): A. Period cost B. Direct material cost C. Manufacturing overhead cost D. Indirect material cost Assembly line worker's wages would be considered a(n): A. Indirect cost B. Direct labor cost C. Manufacturing overhead cost D. Period cost Depreciation on printers at sales office would be considered a(n): A. Product cost B. Manufacturing overhead cost C. Period cost D. Direct cost
Answer:
a. A. Manufacturing overhead cost
b. B. Direct material cost
c. B. Direct labor cost
d. C. Period cost
Explanation:
Property taxes incurred on the factory ; Are included in manufacturing and product cost as a manufacturing overhead.
Materials to manufacture jeans : Are included in manufacturing and product cost as a direct materials cost.
Assembly line worker's wages : Are included in manufacturing and product cost as a direct labor cost
Depreciation on printers at sales office : Are expenses during the period.They are not included in product cost.
Consider two bonds, a 3-year bond paying an annual coupon of 3%, and a 20-year bond, also with an annual coupon of 3%. Both bonds currently sell at par value. Now suppose that interest rates rise and the yield to maturity of the two bonds increases to 6%. a. What is the new price of the 3-year bond?
Answer:
New price = $919.81
Explanation:
Computation of the given data are as follows:
Let Face value (FV) = $1,000
YTM (Rate ) = 6%
Time period (Nper) = 3 years
Coupon rate = 3%
Coupon payment = 3% × $1,000 = $30
So, we can calculate the new price by using financial calculator.
The attachment is attached below:
New price = $919.81
Why is it difficult for the federal government to increase or decrease spending
Answer:
here you go bruv
Explanation:
The New York Times published a chart today that succinctly explains why it is so hard to cut the federal government's spending: the programs that people want to cut don't cost very much, and the programs that cost a lot people don't want to cut.
Cooper Industries wants to replace two small delivery trucks with one larger delivery truck. The old trucks are valued at $13,000 each. The new truck will cost $52,000. If Cooper’s controllable margin is $97,000 and their operating assets were valued at $580,000 before they bought the new truck, what will their new ROI be?
A: 17.5%
B: 16.0%
C: 15.3%
D: 16.7%
The new ROI after Cooper Industries replaces two old trucks with a new one, considering their controllable margin and altered operating assets, is found to be approximately 16.0%.
Explanation:First, let's estimate the change in operating assets. Cooper Industries had old trucks valued at $13,000 each. They had two of these old trucks, so the total is $26,000. They've replaced these with a new truck costing $52,000. The net change is $52,000 - $26,000 = $26,000 increase in operating assets.
So, their total operating assets after purchasing the new truck becomes $580,000 + $26,000 = $606,000.
Return on Investment (ROI) is calculated as (Controllable Margin / Operating Assets) * 100. Therefore, the new ROI is ($97,000 / $606,000) * 100 = 16.01%, which rounds to 16.0% (Option B).
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Advanced Enterprises reports yearminusend information from 2018 as follows: Sales (160 comma 250 units) $ 963 comma 000 Cost of goods sold 641 comma 000 Gross margin 322 comma 000 Operating expenses 269 comma 000 Operating income $ 53 comma 000 Advanced is developing the 2019 budget. In 2019 the company would like to increase selling prices by 13.5%, 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 2019?
Answer:
Sales budget in 2019 $994,543.55
Explanation:
The sales budgeted shows the expected units to be sold at a particular price for forth coming accounting period, together with the total sales revenue.
Selling price in 2018= 963,000/160,250 =$6.009
Expected selling price in 2019 = 113.5%× price in 2018
= 113.5% × $6.009 = $6.820
Expected sales volume in 2019= (100- 9%)× sales volume in 2018
= 91%× 160,250
=145827.5
Sales budget for 2019 = $6.820 × 145,827.5
= $994,543.55
Shaw Company sells goods that cost $300,000 to Ricard Company for $410,000 on January 2, 2020. The sales price includes an installation fee, which has a standalone selling price of $40,000. The standalone selling price of the goods is $370,000. The installation is considered a separate performance obligation and is expected to take 6 months to complete. (a) Prepare the journal entries (if any) to record the sale on January 2, 2020.
Answer:
January 2, 2020
Dr Accounts receivable 410,000
Cr Sales revenue 370,000
Cr Unearned revenue 40,000
Dr Cost of goods sold 300,000
Cr Merchandise inventory 300,000
Accrual accounting states that revenues must be recognized during the periods that they actually occur (i.e. the earning process is completed). Since the installation process lasts 6 months, the unearned revenue will be recognized as the process is being completed.
Daniel Patrick Moynihan, the late senator from New York, once introduced a bill that would levy a 10,000 percent tax on certain hollow-tipped bullets.
True or False:
This tax won't raise much revenue because the high tax rate would likely cause the equilibrium quantity to be near zero.
Answer:
True.
Explanation:
Daniel Patrick Moynihan, the late senator from New York, once introduced a bill that would levy a 10,000 percent tax on certain hollow-tipped bullets.
However, this tax won't raise much revenue because the high tax rate would likely cause the equilibrium quantity to be near zero.
ecord adjusting journal entries for each of the following for year ended December 31. Assume no other adjusting entries are made during the year. Salaries Payable. At year-end, salaries expense of $18,500 has been incurred by the company, but is not yet paid to employees. Interest Payable. At its December 31 year-end, the company owes $400 of interest on a line-of-credit loan. That interest will not be
Answer: Please Refer to Explanation
Explanation:
Please see complete question attached to this answer.
A.
As the company has not paid the salary but they recognize it is an expense, it should be credited to Salaries payable from the salary expense account.
DR Salary Expense $ 18,500
CR Salary Payable $18,500
( To record Salary Expense incurred but not paid)
B.
As the company has not paid the interest but they recognize it is an expense, it should be credited to Interest Payable from the interest expense account until it is paid.
DR Interest Expense $400
CR Interest Payable $400
( To record interest expense on loan not paid )
C.
As the company has not paid the mortgage interest but they recognize it is an expense, it should be credited to mortgage payable from the mortgage account expense account
DR Mortgage Interest Expense $1,025
CR Mortgage Interest Payable $1,025
( To recording interest expense on mortgage not paid for the year).
Garden World uses the retail method to estimate its monthly cost of goods sold and month-end inventory. At May 31, the accounting records indicate the cost of goods available for sale during the month (beginning inventory plus purchases) totaled $500,000. These goods had been priced for resale at $860,000. Sales in May totaled $420,000. The estimated inventory at May 31 is:
Answer:
$255,815
Explanation:
Resale at $860,000
Less Sales May totaled $420,000
Total $440,000
cost of goods available for sale totaled $500,000÷Resale at $860,000
=0.58139
Hence:
$440,000×0.58139
=$255,815
Therefore the estimated inventory at May 31 is: $255,815
Crawford Company's standard fixed overhead rate is $6 per direct labor hour based on budgeted fixed costs of $600,000. The standard allows one direct labor hour per unit. Last year, Crawford produced 110,000 units of product, incurred $630,000 of fixed overhead costs, and recorded 212,000 actual hours of direct labor. What is Crawford's fixed overhead spending variance for last year
Answer:
Expenditure variance = $30,000 unfavorable
Explanation:
The fixed overhead spending variance is the amount by which the budgeted expenditure differs from the actual fixed overhead. Where the actual expenditure is less than the budgeted, the variance is favorable. An unfavorable variance implies the opposite.
$
Budgeted fixed overhead expenditure 600,000
Actual fixed overhead expenditure 630,000
Spending variance 30,000 Unfavorable
Final answer:
Crawford Company's fixed overhead spending variance for last year is $30,000. This unfavorable variance indicates that the actual fixed overhead costs were greater than the budgeted costs by this amount.
Explanation:
The fixed overhead spending variance for Crawford Company last year can be determined by comparing the budgeted fixed overhead costs to the actual fixed overhead costs incurred.
Based on the given standard fixed overhead rate of $6 per direct labor hour and the budgeted fixed costs of $600,000, the company would have expected to incur these fixed costs over 100,000 direct labor hours (since the standard allows one direct labor hour per unit and they produced 110,000 units).
However, the actual fixed overhead costs amounted to $630,000. To find the variance, we subtract the budgeted fixed overhead costs from the actual fixed overhead costs incurred: $630,000 (actual) - $600,000 (budgeted) = $30,000.
Therefore, Crawford's fixed overhead spending variance is $30,000 unfavorable because the actual costs exceeded the budgeted costs.
"Northern Region unit sales 25,200 37,200 Southern Region unit sales 27,200 28,600 Total 52,400 65,800 The finished goods inventory estimated for March 1, for the Bath and Gym scale models is 1,800 and 2,300 units, respectively. The desired finished goods inventory for March 31 for the Bath and Gym scale models is 1,300 and 2,500 units, respectively. Prepare a production budget for the Bath and Gym scales for the month ended March 31. For those boxes in which you must enter subtracted or negative numbers use a minus sign."
Answer:
The budgeted production for bath and Gym is 51900 and 66000 units
Explanation:
Production Budget
Particulars Bath Gym
Unit Sales
Northern Region 25200 37200
Southern Region 27200 28600
Total Sales 52,400 65,800
Add Desired FG Inv 1300 2500
Less Beg Inv 1800 2300
Production Budget 51900 66000
The production budget is calculated by adding the desired ending inventory to the sales and subtracting the beginning inventory from it.
Production= Sales + Desired Ending Inventory - Beginning Inventory
Javonte Co. set standards of 2 hours of direct labor per unit of product and $15.80 per hour for the labor rate. During October, the company uses 12,100 hours of direct labor at a $193,600 total cost to produce 6,400 units of product. In November, the company uses 16,100 hours of direct labor at a $258,405 total cost to produce 6,800 units of product. AH = Actual Hours SH = Standard Hours AR = Actual Rate SR = Standard Rate (1) Compute the direct labor rate variance, the direct labor efficiency variance, and the total direct labor cost variance for each of these two months. Classify each variance as favorable or unfavorable. (2) Javonte investigates variances of more than 5% of actual direct labor cost. Which direct labor variances will the company investigate further?
Answer:
October
direct labor rate variance =$2,420 unfavorable
direct labor efficiency variance =$11,060 favorable
direct labor cost variance = $ 8,640 favorable
Investigate : direct labor efficiency variance
November
direct labor rate variance = $4,025 unfavorable
direct labor efficiency variance =$ 39,500 favorable
direct labor cost variance = $35,475 favorable
Investigate : direct labor efficiency variance
Explanation:
October
direct labor rate variance = (Aq × Ap) - (Aq × Sp)
= (12,100×$16) - (12,100×$15.80)
=$2,420 unfavorable
direct labor efficiency variance = (Aq × Sp) - (Sq × Sp)
=(12,100 × $15.80) - (6,400×2 ×$15.80)
=$11,060 favorable
direct labor cost variance = direct labor rate variance + direct labor efficiency variance
= $2,420 (A) + $11,060 (F)
= $ 8,640 favorable
November
direct labor rate variance = (Aq × Ap) - (Aq × Sp)
= (16,100×$16.05) - (16,100×$15.80)
= $4,025 unfavorable
direct labor efficiency variance = (Aq × Sp) - (Sq × Sp)
=(16,100 × $15.80) - (6,800×2 ×$15.80)
=$ 39,500 favorable
direct labor cost variance = direct labor rate variance + direct labor efficiency variance
= $4,025 (A) + $ 39,500 (F)
= $35,475 favorable
The Azuza Company owns no plant assets and had the following income statement for the year:
Sales revenue $930,000
Cost of goods sold $650,000
Wages expense 210,000
Rent expense 42,000
Utilities expense 12,000 914,000
Net income $16,000
Additional information about the company includes:
End of Year Beginning of Year
Accounts receivable $67,000 $59,000
Inventory 62,000 86,000
Prepaid rent 9,000 7,000
Accounts payable 22,000 30,000
Wages payable 9,000 7,000
Required:
Use the preceding information to calculate the cash flow from operating activities using the indirect method. Remember to use negative signs with answers when appropriate.
Answer:Please see answer below
Explanation:
Solving
Net income= $16,000
Change in asset and liabilities
Accounts receivable Increased $67,000- $59,000 =- -8000
Inventory Decreased 62,000- 86,000=24,000
Prepaid rent --Increased 9,000- 7,000 = -2000
Accounts payable ---decreased 22,000 -30,000 = -8000
Wages payable ----Increased 9,000- 7,000=2000
Net cash provided by operating activity.=24,000+ 2000-(8000+2000+8000)
= $24,000
Net income= $16,000
Change in asset and liabilities
Accounts receivable--Increase -$8,000
Inventory--Decreased-- $24,000
Prepaid rent --Increased -$2,000
Accounts payable ---decreased-$8,000
Wages payable ----Increased $2,000
Net cash provided by operating activities,= $24,000
The managers of a pension fund have invested $2.5 million in U.S. government certificates of deposit (CDs) that pay interest at the rate of 2.1%/year compounded semiannually over a period of 20 years. At the end of this period, how much will the investment be worth? (Round your answer to four decimal places.)
Answer:
The answer is $3.8 million
Explanation:
The payment is semiannual i.e it will be paid twice in a year.
Present value(PV) = $2.5 million
Interest rate = 1.05%(2.1% ÷ 2)
Number of periods = 40 years(20 years x 2)
The formula is FV = PV(1 + r)^n
= $2.5 million(1 + 0.0105)^40
= $2.5 million(1.0105)^40
= $2.5 million x 1.5186
= $3.8 million
The Investment will therefore worth $3.8 million at the end of the period.
Harold Manufacturing produces denim clothing. This year, it produced 5,220 denim jackets at a manufacturing cost of $42.00 each. These jackets were damaged in the warehouse during storage. Management investigated the matter and identified three alternatives for these jackets.
1) Jackets can be sold to a secondhand clothing shop for $7.00 each.
2) Jackets can be disassembled at a cost of $32,700 and sold to a recycler for $12.00 each.
3) Jackets can be reworked and turned into good jackets. However, with the damage, management estimates it will be able to assemble the good parts of the 5,220 jackets into only 2,970 jackets. The remaining pieces of fabric will be discarded. The cost of reworking the jackets will be $101,900, but the jackets can then be sold for their regular price of $44.00 each.
Required:
Calculate the incremental income.
Answer:
First option has incremental income of $36,540
The second option has incremental income of $29,940
The third option has incremental income of $28,780
Explanation:
Incremental income=incremental revenue-incremental cost
Option 1
Incremental revenue=5,220*$7=$36,540
incremental cost is $0
incremental income=$36,540 -$0=$36,540
Option 2:
Incremental revenue=$12*5,220=$62,640
Incremental cost =$32,700
incremental income=$62,640-$32,700=$ 29,940
Option 3:
Incremental revenue=$44*2970 =$ 130,680.00
Incremental cost=$101,900
incremental income= 130,680-$101,900=$28,780
Judging from the incremental income perspective,the first option seems to the best of all three options because it has the highest incremental income od $36,450
Levered, Inc., and Unlevered, Inc., are identical in every way except their capital structures. Each company expects to earn $12.6 million before interest per year in perpetuity, with each company distributing all its earnings as dividends. Levered’s perpetual debt has a market value of $74 million and costs 5 percent per year. Levered has 3.2 million shares outstanding that sell for $90 per share. Unlevered has no debt and 4.9 million shares outstanding, currently worth $73 per share. Neither firm pays taxes. What is the value of each company's equity?
Answer: Unlevered firm Equity is worth $357,700,000.
Levered firm Equity is worth $283,700,000 going by the Modigliani-Miller Proposition I.
Explanation:
The Unlevered firm has no debt and so the value of it's equity can be calculated by simply multiplying shares outstanding by the market price.
= 4.9 million * 73
= $357,700,000
Unlevered firm Equity is worth $357,700,000.
Now according to Modigliani-Miller Proposition I, if a Levered firm and an identical Unlevered firm are not paying taxes, they should be of equal value.
This means that the Levered firm should have a value of $357,700,000 meaning that their equity should be that value minus the value of their debt.
= 357,700,000 - 74,000,000
= $283,700,000
$283,700,000 should be the value of their Equity going by the Modigliani-Miller Proposition I.
Calculating with their figures however gives,
= 3.2 million * 90
= $288,000,000
The market value of the Levered firm is more than it's value according to the Modigliani-Miller Proposition I.
This means that the Unlevered firm's Equity is UNDERVALUED and the Levered Firm's Equity is OVERVALUED.
The April 30 bank statement for Trimble Corporation shows an ending balance of $40,262. The unadjusted cash account balance was $33,750. The accountant for Trimble gathered the following information: There was a deposit in transit for $5,356. The bank statement reports a service charge of $174. A credit memo included in the bank statement shows interest earned of $815. Outstanding checks totaled $13,797. The bank statement included a $2,570 NSF check deposited in April. What is the true cash balance as of April 30?
Answer:
$36,961
Explanation:
The bank reconciliation is one done between the balance per the books and balance per the bank statement. This is usually as a result of transactions known as reconciling items. These are items that have either been recognized in books but yet to be recorded by the bank or vice versa, transactions recorded wrongly by one of the parties etc.
To know the true cash balance, we must first determine what transactions must be adjusted in the books; these are
service charge of $174 - this will be deducted from the book balancecredit memo included in the bank statement shows interest earned of $815 - this will be added to the book balancea $2,570 NSF check deposited in April - This will be added back to the book balanceHence, the true cash balance as of April 30
= $33,750 - $174 + $815 + $2570
= $36,961
Pendant Publishing is considering a new product line that has expected sales of $1,100,000 per year for each of the next 5 years. New equipment that is required to produce the new product will cost $1,200,000. The equipment has a useful life of 5 years and a $300,000 salvage value and will be sold at the end of year 5 for its’ salvage value. Total variable costs of the product line are $450,000 per year, total fixed costs (not including depreciation) will be an additional $180,000 per year and the initial working capital investment, to buy inventory, will be $15,000. The discount rate (interest rate) for the project is 10% and the company’s tax rate is 35%. What is the operating cash flow of year 1 for the company?
Answer:
The operating cash flow of year 1 for the company is $368,500
Explanation:
In order to calculate the operating cash flow of year 1 for the company first we need to calculate the Cashflow before tax and depreciation as follows:
Cashflow before tax=Sales-Variable cost-fixed cost
Cashflow before tax=$1,100,000-$450,000-$180,000
Cashflow before tax=$470,000
Depreciation = Original cost - Salvage / fixed Cost
Depreciation= $1,200,000 - $300,000 / 5
= $180,000
Therefore, to calculate the operating cash flow of year 1 for the company we would have to make the following calculation:
Operating Cash Flow=(CFBT×65%)+Depreciation×35%
Operating Cash Flow=($470,000×65%)+($180,000×35%)
Operating Cash Flow=$368,500
The operating cash flow of year 1 for the company is $368,500