Answer:
Nov. 1
Dr Cash Dividend 39,500
Cr Dividends Payable 39,500
Dec. 31
Dr Dividends Payable 39,500
Cr Cash 39,500
Explanation:
Martinez Corp Journal entries
Nov. 1
Dr Cash Dividend 39,500
(7,900 shares of common stock ×5 per shares)
Cr Dividends Payable 39,500
Dec. 31
Dr Dividends Payable 39,500
Cr Cash 39,500
Newton Corporation entered into the following transactions during its first year of operations. (Assume all transactions involve cash.) 1) Acquired $1,300 of capital from the owners. 2) Purchased $330 of direct raw materials. 3) Used $230 of these direct raw materials in the production process. 4) Paid production workers $430 cash. 5) Paid $230 for manufacturing overhead (applied and actual overhead are the same). 6) Started and completed 250 units of inventory. 7) Sold 80 units at a price of $6 each. 8) Paid $70 for selling and administrative expenses. The amount of net income for the year was:
Answer:
Net Income $ 125.2
Explanation:
Capital acquired and the amount of material purchased is not accounted for. Only amount of material used is accounted for .
Newton Corporation
Income Statement
Sales 80* $ 6= $ 480
Less COGS $ 284.8
Gross Profit $ 195.2
Less Selling and Administrative Expense $ 70
Net Income $ 125.2
We calculate the COGS for number of the units sold.
Calculation Of Cost Of Goods Sold
Direct Material used $ 230
Direct Labor $ 430
Production Overheads $ 230
Total Manufacturing Costs $ 890
Total units completed 250
Cost of 1 unit = Total Cost/ Total Units= $ 890/250= $ 3.56 per unit
Cost of 80 Units = $ 3.56 * 80= $ 284.8
he Gilbert Department Store uses the conventional retail inventory method. The following information is available for the month of August 2021: Cost Retail Beginning Inventory 30,000 45,000 Cost of Goods Available for Sale $150,000 $180,000 Net Markups 25,000 Net Markdowns 10,000 Sales 170,000 What was the inventory using the conventional method as of August 31, 2021
Answer:
$52,500
Explanation:
As per given data
Cost Retail
Beginning Inventory $30,000 $45,000
Cost of Goods Available for Sale $150,000 $180,000
Net Markups $25,000
Net Markdowns $10,000
Sales $170,000
As we do not have the ending inventory value, First we need to calculate it. We will make the selling price of all the available inventory at retail value then deducting the actual sales we will have the retail value of available stock. By applying the cost to retail ratio we can calculate the value of ending Inventory.
Cost Retail
Beginning Inventory $30,000 $45,000
Cost of Goods Available for Sale $150,000 $180,000
Total Goods Available for sale $180,000 $225,000
+ Net Markups $25,000
- Net Markdowns $10,000
Sales price of Goods $180,000 $240,000
- Sales $170,000
Ending Inventory at retail $70,000
Now calculate the cost to retail ratio to determine the ending value of inventory at conventional inventory method.
Cost to retail ratio = ( Sale price of goods at cost / Sale price of goods at retail ) x 100 = ( $180,000 / $240,000) x 100 = 75%
Value of Ending inventory at conventional method = $70,000 x 75% = $52,500
Lacy's Linen Mart uses the average cost retail method to estimate inventories. Data for the first six months of 2021 include: beginning inventory at cost and retail were $78,000 and $132,000, net purchases at cost and retail were $324,000 and $492,000, and sales during the first six months totaled $502,000. The estimated inventory at June 30, 2021, would be: Multiple Choice $78,080. $64,880. $81,380. $73,130.
Answer:
$78,592
Explanation:
The computation of estimated inventory is shown below:-
Cost of Goods available for sale = Beginning inventory + Net purchases
= $78,000 + $324,000
= $402,000
Retail value of goods available for sale = Retail price of beginning inventory + Retail price of purchases
= $132,000 + 492,000
= $624,000
Cost to retail percent = Cost of Goods available for sale ÷ Retail value of goods available for sale
= $402,000 ÷ $624,000
= 64.42%
Estimated ending inventory at retail = Cost of Goods available for sale at retail - Sales
= $624,000 - $502,000
= $122,000
Estimated ending inventory at cost = Estimated ending inventory at retail × Cost to retail percent
= $122,000 × 64.42%
= $78,592
Therefore the correct answer is $78,592. So, in the given question the option is not available.
Assume the following (T&M Contract): A budget has been established to install 400 ft of pipe at an estimated 150 man hours and a billable cost of $5,040 (note: bare labor cost is $3,360). The original schedule planned for 80 ft of pipe to be installed per day by a 3-man crew working an 8-hour shift. The job was scheduled to start on Monday and finish on Friday. On Monday 60 ft of pipe was installed. On Tuesday 70 ft of pipe was installed and on Wednesday 50 ft of pipe was installed. Actual cumulative man hours incurred to-date is 72 hrs. Note: Assume that $1,000 has been billed to the client to-date. What is the current earned dollar value of the work in place (completed)? a. $1.780 b. $2,268 c. $4,500.50 d. $2,800.27
Answer:
The current earned dollar value of the work in place (completed) is $2,268. The right answer is b
Explanation:
According to the given data we have the following:
total pipeline installed=60+70+50= 180 ft
total cost= $ 5,040
unite price of pipeline=$5,040/400=$12.6
Therefore, in order the current earned dollar value of the work in place completed we would have to use the following formula:
current earned value= pipeline installed*unit price of pipeline=
current earned value=180 *$12.6
current earned value=$2,268
The current earned dollar value of the work in place (completed) is $2,268
Widget Corp. is expected to generate a free cash flow (FCF) of $1,835.00 million this year (FCF₁ = $1,835.00 million), and the FCF is expected to grow at a rate of 21.40% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 2.82% per year, which will last forever (FCF₄). Assume the firm has no nonoperating assets. If Widget Corp.’s weighted average cost of capital (WACC) is 8.46%, what is the current total firm value of Widget Corp.? (Note: Round all intermediate calculations to two decimal places.) $44,347.57 million $53,217.08 million $55,008.09 million $5,705.25 million
Final answer:
The current total firm value of Widget Corp. is $39,643.09 million.
Explanation:
To calculate the current total firm value of Widget Corp., we need to find the present value of its future free cash flows. The formula for calculating the present value of a growing perpetuity is FCF / (WACC - g), where FCF is the free cash flow, WACC is the weighted average cost of capital, and g is the growth rate. Let's break down the calculation:
Year 1: Present value of FCF₁ = FCF₁ / (1 + WACC) = $1,835.00 million / (1 + 0.0846) = $1,692.49 million
Year 2: Present value of FCF₂ = FCF₂ / (1 + WACC)² = $1,835.00 million * (1 + 0.2140) / (1 + 0.0846)² = $1,835.00 million * 1.2140 / 1.0766 = $2,058.87 million
Year 3: Present value of FCF₃ = FCF₃ / (1 + WACC)³ = $1,835.00 million * (1 + 0.2140)² / (1 + 0.0846)³ = $1,835.00 million * 1.2140² / 1.0766³ = $2,268.86 million
After Year 3: Present value of perpetual cash flows = FCF₄ / (WACC - g) = $1,835.00 million * (1 + 0.0282) / (0.0846 - 0.0282) = $1,835.00 million * 1.0282 / 0.0564 = $33,623.87 million
Finally, we sum up the present values of the free cash flows:
Total firm value = Present value of FCF₁ + Present value of FCF₂ + Present value of FCF₃ + Present value of perpetual cash flows = $1,692.49 million + $2,058.87 million + $2,268.86 million + $33,623.87 million = $39,643.09 million
Therefore, the current total firm value of Widget Corp. is $39,643.09 million.
A customer owns 1,000 shares of XYZZ stock, purchased at $40 per share. The stock is now at $45, and the customer has become neutral on the stock, but believes that the stock still has good long term growth potential. The client asks her representative for a "conservative recommendation" that will give her a positive portfolio return. The client should be told to:
Answer:
The answer is "Sell 10 XYZZ 45 Call-Terms"
Explanation:
The purchaser bought the product at $40, and it is now selling at $45. The purchaser now is on product-neutral but feels it's a strong investment throughout the longterm. The product will now not be sold Unless the client offers calls against both the stock price (put option writer), the investor can generate additional profit revenue in the investment strategy.
It also a balanced approach on the profits, that is the danger here is that the product will also be called off when the product rises quickly and the purchaser will not receive the overhead profit when the product decreases, the consumer pays on both the product, offset by both the prices we pay. Loading puts will also generate high cash. If instead, the product grows, its calls expire and the product is also owned by the purchaser, but when the stock goes down, its limited sales will be executed, requiring the people to purchase the product. So, the purchaser will end up losing twice as quickly in a down market! That's not a "conservative" strategy.Swifty Camera Shop Inc. uses the lower-of-cost-or-net realizable value basis for its inventory. The following data are available at December 31. Units Cost per Unit Net Realizable Value per Unit Cameras Minolta 5 $179 $144 Canon 8 160 180 Light Meters Vivitar 12 113 109 Kodak 10 116 142 What amount should be reported on Swifty Camera Shop’s financial statements, assuming the lower-of-cost-or-net realizable value rule is applied?
Answer:
$4468
Explanation:
Using the lower-of-cost-or-net-realizable value means that the items of closing inventory should be valued at lower of purchase price(invoice price) and the net realizable value,where net realizable means the estimated selling price less estimated cost of making the sale.
Minolta would be valued at NRV of $144 i.e $144*5=$720
Cannon would be valued at cost of $160 i.e $160*8=$1280
Vivitar would be valued at NRV of $109 i.e $109*12=$1,308
Kodak would be valued at cost of $116 i.e $116*10=$1160
Total value of closing inventory on Swifty Camera's Shop financial statement=$720+$1280+$1308+$1160=$4468
Swifty Camera Shop should report a total of $4,468 for its inventory on the financial statements, calculated using the lower-of-cost-or-net realizable value method.
Explanation:To determine the amount to be reported on Swifty Camera Shop’s financial statements for its inventory, we need to apply the lower-of-cost-or-net realizable value rule. This means that for each item, we compare the cost to the net realizable value and report the lower of the two figures.
Inventory ValuationMinolta Cameras: 5 units × $144 = $720 (since $144 NRV is lower than $179 cost)Canon Cameras: 8 units × $160 = $1,280 (since $160 cost is lower than $180 NRV)Vivitar Light Meters: 12 units × $109 = $1,308 (since $109 NRV is lower than $113 cost)Kodak Light Meters: 10 units × $116 = $1,160 (since $116 cost is lower than $142 NRV)The total amount to be reported for the inventory would then be:
$720 (Minolta) + $1,280 (Canon) + $1,308 (Vivitar) + $1,160 (Kodak) = $4,468.
Check my work Check My Work button is now enabledItem 6Item 6 10 points Walton Manufacturing Company reported the following data regarding a product it manufactures and sells. The sales price is $42. Variable costs Manufacturing $ 14 per unit Selling 6 per unit Fixed costs Manufacturing $ 162,000 per year Selling and administrative $ 132,800 per year Required Use the per-unit contribution margin approach to determine the break-even point in units and dollars. Use the per-unit contribution margin approach to determine the level of sales in units and dollars required to obtain a profit of $132,000. Suppose that variable selling costs could be eliminated by employing a salaried sales force. If the company could sell 20,300 units, how much could it pay in salaries for salespeople and still have a profit of $132,000
Answer and Explanation:
According to the scenario, computation of the given data are as follow:-
A) Total Variable Cost = Variable Cost Manufacturing + Variable Cost Selling Per Unit
= $14+ $6
= $20
Contribution Margin (CM)= Sales - Total Variable Cost
= $42 - $20
= $22
Contribution Margin Ratio (CMR) = Contribution Margin ÷ Sales × 100
= $22 ÷ $42 × 100
= 52.38%
Total Fixed Cost = Fixed Manufacturing Cost + Fixed Selling And Administrative Cost
= $162,000 + $132,800
= $294,800
Break Even in Units = Total Fixed Cost ÷ Contribution Margin
= $294,800 ÷ $22
= $13,400
Break Even in Dollars = Total Fixed Cost ÷ Contribution Margin Ratio
= $294,800 ÷ 52.38%
= $562,810.23
B).
Particular Amount ($)
Desired Profit 132,000
Add: Total Fixed Cost 294,800
Total Amount 426,800
Break Even in Units (Total Amount ÷ CM) = $426800 ÷ $22 = 19,400
Break Even in Dollars(Total Amount ÷ CMR)
= $426800 ÷ 52.38%
= $814,814.81
C). Sales = Sale Unit × Selling Price Per Unit
= 20,300 × $42
= $852,600
Variable Cost = Sale Units × Variable Manufacturing Cost Per Unit
= 20,300 × $14
= $284,200
Fixed Cost = Sales - Variable Cost - Profit
= $852,600 - $284,200 - $132,000
= $436,400
Salaries for Sales People = Total Fixed Cost-Fixed Cost Manufacturing -Selling And Administrative Fixed Cost
= $436,400 - $162,000 - $132,800
= $141,600
As sales manager, Joe Batista was given the following static budget report for selling expenses in the Clothing Department of Soria Company for the month of October.
SORIA COMPANY
Clothing Department
Budget Report
For the Month Ended October 31, 2020
Difference
Budget
Actual
Favorable
Unfavorable
Neither Favorable
nor Unfavorable
Sales in units
7,900
11,000
3,100
Favorable
Variable expenses
Sales commissions
$2,054
$2,860
$806
Unfavorable
Advertising expense
869
770
99
Favorable
Travel expense
3,476
4,950
1,474
Unfavorable
Free samples given out
1,659
1,210
449
Favorable
Total variable
8,058
9,790
1,732
Unfavorable
Fixed expenses
Rent
1,900
1,900
–0–
Neither Favorable nor Unfavorable
Sales salaries
1,100
1,100
–0–
Neither Favorable nor Unfavorable
Office salaries
800
800
–0–
Neither Favorable nor Unfavorable
Depreciation—autos (sales staff)
600
600
–0–
Neither Favorable nor Unfavorable
Total fixed
4,400
4,400
–0–
Neither Favorable nor Unfavorable
Total expenses
$12,458
$14,190
$1,732
Unfavorable
As a result of this budget report, Joe was called into the president’s office and congratulated on his fine sales performance. He was reprimanded, however, for allowing his costs to get out of control. Joe knew something was wrong with the performance report that he had been given. However, he was not sure what to do, and comes to you for advice.
Prepare a budget report based on flexible budget data to help Joe. (List variable costs before fixed costs.)
Answer:
SORIA COMPANY
Clothing Department's Flexible Budgeted Report:
The report is attached herein.
The variable costs were flexed using 11,000 units sales volume instead of the budgeted 7,900 units as follows.
Workings:
1. Sales Commission = $2,054/7,900 x 11,000 = $2,860
2. Advertising = $869/7,900 x 11,000 = $770
3. Travel Expense = $3,476/7,900 x 11,000 = $4,840
4. Free Samples = $1,659/7,900 x 11,000 = $2,310
The idea is to compute the flexed amounts using unit budgeted cost (e.g. Travel Expense $3,476/7,900) to multiply the flexed volume (11,000).
The fixed costs were not similarly flexed. They are assumed to have completely displayed their nature as fixed irrespective of the level of activity or the sales volume.
Explanation:
A flexible budget is one that changes in volume according to the level of activity. It is not static. This means that the budgeted units change to the level of the actual units. This flexing affects all variable costs based on the now flexed volume while the fixed costs remain since they do not vary according to the level of activity. For example, Sales Commission could be budgeted at $400 under 10,000 volume. If the actual sales volume is 12,000, the Sales Commission has to be flexed to $480 ($400/10,000 x 12,000) to reflect the actual volume performance. Then the flexed budgeted cost is compared to the actual cost to obtain the variance or difference. Actual performance can then be compared based on like terms and not based on unlike terms.
This is the advantage of flexible budgets. They allow a manager's performance to be evaluated based on variable volumes of activity instead of static volumes.
Answer:wow cool ♂️
Explanation:
Megatron Corp. earned net income of 13 comma 000 Euros in its overseas branch at France. Its headquarters is located in the U.S. The rate of conversion during set up was $ 1.31 / Euro. What is the value of its income in its home currency if the rate is $ 1.51 / Euro at the end of a financial year and the average rate being $ 1.41 / Euro?
Answer:
$18,330
Explanation:
For translation of income statement items such net income, the applicable rate is the average rate.
Since the average rate being is $1.41 / Euro, we have:
Value of income in home currency = 13,000 euro * $1.41 = $18,330.
3. A car dealer must choose between two alternative forecasting techniques. Both techniques have been used to prepare forecasts for a six- month period. Using MAD as a criterion, which technique provides a more accurate forecast? Using MSE as a criterion, which technique provides a more accurate forecast? Month Demand Technique 1 Forecast Technique 2 Forecast 1 492 488 495 2 470 484 482 3 485 480 478 4 493 490 488 5 498 497 492 6 492 493 493
Answer:
From both criterion, MAD and MSE, technique 1 is more accurate forecast than technique 2 forecast.
Explanation:
First of all let's sort out this data:
Month . Demand . Technique 1 Forecast . Technique 2 Forecast
1 492 488 495
2 470 484 482
3 485 480 478
4 493 490 488
5 498 497 492
6 492 493 493
Now, first part is to check the accuracy of the forecast using MAD.
Where,
MAD = Mean Absolute Deviation.
Formula = (Sum of all absolute differences between demand and forecast)/ Time period
And the rule is, we will compare final MAD values of both the techniques and compare. The lower value will be considered as accurate forecast technique.
So, for Technique 1, we have:
Month . Demand(D). Technique 1 Forecast(F) |D-F|
1 492 488 4
2 470 484 -14
3 485 480 5
4 493 490 3
5 498 497 1
6 492 493 -1
(neglecting negative sign because of absolute) Total = 28
MAD = Total SUM / Time period
Time Period = 6
MAD = 28/6
MAD = 4.66
Now, let's do it for Technique 2:
Month . Demand . Technique 2 Forecast . |D-F|
1 492 495 -3
2 470 482 -12
3 485 478 7
4 493 488 5
5 498 492 6
6 492 493 -1
(neglecting negative sign because of absolute) Total = 34
MAD = Total SUM / Time period
Time Period = 6
MAD = 34/6
MAD = 5.66
Hence, Technique 1 is accurate forecast using MAD because it has lower MAD value.
Now, the second part of the question is to solve this by using MSE.
And the rule is, we will compare final MSE values of both the techniques and compare. The lower value will be considered as accurate forecast technique.
MSE = Mean Squared Error
Formula = (Sum of all squared differences between demand and forecast) /Time period
Let's do it for Technique 1:
Month . Demand(D). Technique 1 Forecast(F) (D-F) . (D-F)²
1 492 488 4 16
2 470 484 -14 . 196
3 485 480 5 . 25
4 493 490 3 9
5 498 497 1 1
6 492 493 -1 1
(Add all (D-F)² values for the total) Total = 248
MSE = Sum Total/ Time period
MSE = 248/6
MSE = 41.33
Similarly for Technique 2:
Month . Demand(D). Technique 2 Forecast(F) (D-F) . (D-F)²
1 492 495 -3 9
2 470 482 -12 . 144
3 485 478 7 . 49
4 493 488 5 25
5 498 492 6 36
6 492 493 -1 1
(Add all (D-F)² values for the total) Total = 264
MSE = Sum Total/ Time period
MSE = 264/6
MSE = 44
According to MSE as well, technique 1 forecast is accurate because it also has lower value than technique 2.
The following information pertains to Guy’s Gear Company: Sales $ 80,000 Expenses: Cost of Goods Sold $ 50,000 Depreciation Expense 6,000 Salaries and Wages Expense 12,000 68,000 Net Income $ 12,000 Accounts Receivable Decrease $ 4,000 Inventory Increase 8,000 Salaries and Wages Payable Increase 750 Required: Present the operating activities section of the statement of cash flows for Guy’s Gear Company using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)
Answer and Explanation:
The Presentation of the operating activities section of the statement of cash flows is shown below:-
Guy’s Gear Company
Statement of cash flow using the indirect method
Cash flows from operating activities:
Net income $12,000
Adjustments of net income
with cash provided by operating activities:
Depreciation expense $6,000
Changes in current assets
and current liabilities
Decrease in accounts receivable $4,000
Increase in inventories -$8,000
Increase in salaries and
wages payable $750 -$3,250
Net Cash provided by operating activities $14,750
Therefore to reach the net cash provided by operating activities we simply add net income depreciation expenses and deduct the decrease in accounts receivable, increase in inventories and wages payable.
equired: 1. Which of the two basic reporting approaches for the cash flows from operating activities did The Home Depot use? Indirect Direct 2. What amount of income tax payments did The Home Depot make during the year ended January 29, 2017? $4,623 million $3,082 million $639 million $12 million 3. In the fiscal year ended January 29, 2017, The Home Depot generated $9,783 million from operating activities. Indicate where this cash was spent by listing the two largest cash outflows. Cash Dividends ($3,404 million) and Share Repurchase ($6,880 million) Long-Term Debt Repayments ($3,045 million) and Share Repurchase ($6,880 million) Share Repurchase ($7,000 million) and Cash Dividends ($3,404 million) Share Repurchase ($6,880 million) and Capital Expenditures ($1,621 million)
Answer:
find attached missing financial statements:
Indirect method
$4,623 million
$9,783 -$3404 million cash dividends and $6,880 million share buyback
Explanation:
The company used the indirect method of preparing cash flow because the net income was adjusted to reflect cash flow from operations
Income tax payment made during the year ended is $4,623 as shown under the supplemental disclosure in the attached financial statements missing from the question.
The cash of $9,783 million generated from operations was used in paying dividends of $3,404 million as well as buying back shares to the tune of $6,880 as contained in the financial activities section of the cash flow statement.
The two most likely benefits realized from utilizing enterprise systems are improvements in ________. availability of information and increased interaction throughout the organization reduced inventory and reduced operating expenses improved compliance with standards and improved supplier integration improved customer interaction and improved supplier integration reduced lead times for manufacturing and improved customer interaction
Answer: availability of information and increased interaction throughout the organization
Explanation: An enterprise systems is described as an integrated suite of business applications for virtually every department, process, and industry, that allows companies and organizations to integrate information across operations on a company-wide basis by the use of one large database and as a result, there is an upward increase in the availability of information which leads to increased interaction across departments, processes, and industries throughout the organization.
The 2016 annual report for Mega Mills disclosed that 1 billion shares of common stock have been authorized. At the end of 2015, 770 million shares had been issued and the number of shares in treasury stock was 99 million. During 2016, the only common share transactions were that 16 million common shares were reissued from treasury and 22 million common shares were purchased and held as treasury stock. Required: Determine the number of common shares (a) issued, (b) in treasury, and (c) outstanding at the end of 2016.
Answer:
a) Share issued = 770 million
b) Treasury stock = 105 million
c) Share outstanding = 665 million
Explanation:
As per the data given in the question,
Disclosed shares = 1 billion
Share in treasure stock = 99 million
Issued share = 16 million
Purchased shares = 22 million
Issued stock is same at 770 million
Treasury stock = 99 million - 16 million + 22 million
= 105 million
Share outstanding = 770 million - 105 million
= 665 million
The minimum number of investors required to vote to change the company's top management is 3. Investors 1 and 2 cannot be certain of always getting their way in how the company will be run.
Explanation:The Darkroom Windowshade Company has 100,000 shares of stock outstanding. To determine the minimum number of investors it would take to vote to change the company's top management, we need to calculate the total number of shares held by investors other than investors 1 and 2.
Investor 1 holds 20,000 shares and investor 2 holds 18,000 shares, so the combined total of their shares is 38,000. The remaining investors hold 15,000 + 10,000 + 7,000 + (5,000 * 6) = 63,000 shares. To achieve a majority vote, we need to find the smallest number of investors who together hold more than 50,000 shares. Since the remaining investors hold a total of 63,000 shares, it would take a minimum of 3 additional investors to vote together to change the company's top management.
Investors 1 and 2 can be certain of always getting their way in how the company will be run if they have more than 50% of the total shares. To determine if they have more than 50%, we calculate the total number of shares held by all investors, which is 20,000 + 18,000 + 15,000 + 10,000 + 7,000 + (5,000 * 6) = 100,000 shares. The shares held by investors 1 and 2 represent 20,000 + 18,000 = 38,000 shares. Since 38,000 is less than 50% of 100,000, investors 1 and 2 cannot be certain of always getting their way in how the company will be run.
A commonly cited standard for one-way length (duration) of school bus rides for elementary school children is 30 minutes. A local government office in a rural area conducts a study to determine if elementary schoolers in their district have a longer average one-way commute time. If they determine that the average commute time of students in their district is significantly higher than the commonly cited standard they will invest in increasing the number of school buses to help shorten commute time. What would a Type 2 error mean in this context?
Question Options:
A. The local government decides that the average commute time is 30 minutes.
B. The local government decides that the data provide convincing evidence of an average commute time higher than 30 minutes, when the true average commute time is in fact 30 minutes.
C. The local government decides that the data do not provide convincing evidence of an average commute time higher than 30 minutes, when the true average commute time is in fact higher than 30 minutes.
D. The local government decides that the data do not provide convincing evidence of an average commute time different than 30 minutes, when the true average commute time is in fact 30 minutes.
Answer: A type 2 error in this context will mean that The local government decides that the data do not provide convincing evidence of an average commute time higher than 30 minutes, when the true average commute time is in fact higher than 30 minutes.
A type 2 error in statistics is defined as a situation where a false null hypothesis is not rejected.
In this question, a false null hypothesis would that the average commute time for the elementary school in the district is higher than the average 30 minutes.
Perry Corporation produces and sells a single product. Data for that product are: Sales price per unit $275 Variable cost per unit $210 Fixed expenses for the month $640,000 Currently selling 10,500 units Upper management is considering using a biodegradable packaging which costs $12 more per unit but it produces less waste in the long run. Management plans to increase advertising by $11,000 per month to advertise this new feature to their packaging. They believe that environmentally friendly people will switch to their product resulting in an increase in sales of 2500 units per month. How many units would the company have to sell to maintain current operating income if these changes are implemented
Answer:
13,085 units
Explanation:
The computation of the units needed to sell is shown below:
But before that first we have to compute the current operating income which is shown below:
Current operating income = Sales - variable cost - Fixed cost
= ($275 - $210) × 10,500 units - $640,000
= $42,500
Now
Increased fixed cost is
= $640,000 + $11,000
= $651,000
And,
Increased variable cost per unit is
= $210 + $12
= $222
Now
Sales needed to maintain Current operating income is
= (Fixed cost + Current operating income) ÷ (Sales price per unit - Variable cost per unit)
= ($651,000 + $42,500) ÷ ($275 - $222)
= 13,085 units
Atkinson Construction assembles residential houses. It uses a job-costing system with two direct-cost categories (direct materials and direct labor) and one indirect-cost pool (assembly support). Direct labor-hours is the allocation base for assembly support costs. In December 2016, Atkinson budgets 2017 assembly-support costs to be $8,800,000 and 2017 direct labor hours to be 220,000. At the end of 2017, Atkinson is comparing the costs of several jobs that were started and completed in 2017. Laguna Model Mission Model Construction period Feb–June 2017 May–Oct 2017 Direct material costs $106,550 $127,450 Direct labor costs $ 36,250 $ 41,130 Direct labor-hours 970 1,000 Direct materials and direct labor are paid for on a contract basis. The costs of each are known when direct materials are used or when direct labor-hours are worked. The 2017 actual assembly-support costs were $8,400,000, and the actual direct labor-hours were 200,000. MyAccountingLab Required assignment material 141 1. Compute the (a) budgeted indirect-cost rate and (b) actual indirect-cost rate. Why do they differ
Answer:
a) Budgeted indirect cost rate is $40 per direct labor- hour.
b) Actual indirect cost rate is $42 per direct labor hour.
The two indirect cost rate per direct labor hour differs because, for the calculation of budgeted indirect cost rate both the budgeted direct labor-hours and indirect cost are considered. While calculating actual indirect cost rate both actual direct labor-hours and indirect cost are considered.
Explanation:
Actual Costing:
In actual costing, product cost is calculated considering actual cost of material, actual cost of labor and actual overhead incurred which is allocated using the allocation base for incurred cost during the period.
Normal Costing:
In normal costing, product cost is calculated considering actual cost of material, actual cost of labor and overhead are calculated using a standard overhead rate which is applied to actual usage of allocation base.
a.
Compute budgeted indirect cost rate:
Budgeted indirect cost rate = Budgeted indirect cost ÷ budgeted direct labor hour
= 8,800,000 ÷ 220,000
= 40 per direct labor hour
Therefore, budgeted indirect cost rate is $40 per direct labor- hour.
b.
Compute actual indirect cost rate:
Actual indirect cost rate = Actual indirect cost ÷ Actual direct labor hour
= $8400,000 ÷ 200,000 Hours
= $42 per direct labor hour
Therefore, actual indirect cost rate is $42 per direct labor hour.
Final answer:
The budgeted indirect-cost rate for Atkinson Construction is calculated at $40 per direct labor-hour, whereas the actual indirect-cost rate is found to be $42 per direct labor-hour. The difference arises from variations in actual expenses or direct labor-hours used compared to the budgeted amounts, caused by changes in labor efficiency or costs.
Explanation:
The question involves calculating the budgeted indirect-cost rate and the actual indirect-cost rate for Atkinson Construction's job-costing system and understanding why they might differ. To compute the budgeted indirect-cost rate, divide the total budgeted assembly-support costs by the total budgeted direct labor hours. This yields:
(a) Budgeted indirect-cost rate = $8,800,000 / 220,000 hours = $40 per direct labor-hour.
To find the actual indirect-cost rate, divide the actual assembly-support costs by the actual direct labor hours, resulting in:
(b) Actual indirect-cost rate = $8,400,000 / 200,000 hours = $42 per direct labor-hour.
The difference between these rates can occur due to variations in actual expenses or the actual amount of direct labor-hours used compared to what was budgeted. Reasons for such variations include changes in labor efficiency, fluctuations in the cost of materials or assembly support resources, and unexpected operational inefficiencies or improvements.
Warren Enterprises had the following events during Year 1: The business issued $21,000 of common stock to its stockholders. The business purchased land for $13,000 cash. Services were provided to customers for $17,000 cash. Services were provided to customers for $6,000 on account. The company borrowed $17,000 from the bank. Operating expenses of $13,000 were incurred and paid in cash. Salary expense of $900 was accrued. A dividend of $5,000 was paid to the stockholders of Warren Enterprises. Assuming the company began operations during Year 1, the amount of retained earnings as of December 31, Year 1 would be:
Answer:
$4,100
Explanation:
Equity which represents the amount owed to the owners of the business includes retained earnings (which is the accumulation of the net income/loss over the years less dividends paid) and common shares.
Net income is the difference between the sales and the cost incurred by an entity.
hence the net income of Warren enterprises
= $17,000 + $6,000 - $13,000 - $900
= $9,100
The amount of retained earnings as at end of December 31, Year 1
= $9,100 - $5,000
= $4,100
1) The Herfindahl index Suppose that three firms make up the entire tire manufacturing industry. One has a 50% market share, and the other two have a 25% market share each.
The Herfindahl index of this industry is _________.
2) Tread Tough, one of the firms with a 25% market share in the tire manufacturing industry, leaves the market.
This would cause the Herfindahl index for the industry to _________.
3) The largest possible value of the Herfindahl index is 10,000 because:
a) An index of 10,000 corresponds to 100 firms with a 1% market share each.
b) An industry with an index higher than 10,000 is automatically regulated by the Justice Department.
c) An index of 10,000 corresponds to a monopoly firm with a 100% market share.
Answer:
0.375 = 37% = 3700
Increases
c) An index of 10000 corresponds to a monopoly firm with 100% market share
Explanation:
The HHI index is found by summimg the square of the concentration ratios of firms
(0.5) ^2 + (0.25)^2 + (0.25)^2 = 0.25 + 0.0625 + 0.0625 = 0.375 = 37% = 3700
If a firm leaves the industry, the hhi index increases because the market power would exist between only two firms.
If HHI is equal to 10,000, it means that the firm is a monopoly. It means the firm has 100% of the market share.
I hope my answer helps you
On March 1, the board of directors declared a cash dividend of $0.75 per common share to shareholders of record on March 10, payable March 31. There were 131,000 shares issued and outstanding on March 1 and no additional shares had been issued during the month. Record the entries for March 1, 10, and 31. The cash dividends account is used.
Answer and Explanation:
The Journal Entry is shown below:-
Mar-01
Cash dividends Dr, $98,250
(131,000 × $0.75)
To Dividends payable Dr, $98,250
(Being declaration of dividends is recorded)
Mar-10
No entry required
Mar-31
Dividends payable Dr, $98,250
To Cash $98,250
(To record payment of dividends)
f hospitals decide to increase the price of emergency appendectomies (surgery operation to remove inflamed appendix) in order to increase its revenues, Question 5 options: A) It will be successful since the demand is inelastic. B) It will be successful since the supply is inelastic. C) It will be successful since the demand is elastic. D) Then the reason that it will NOT be successful is because the demand curve is downward sloping.
Answer:
A) It will be successful since the demand is inelastic
Explanation:
Elasticity of demand measures the responsiveness of quantity demanded to changes in price.
Demand is inelastic if a change in price has little or no effect on quantity demanded.
If demand is inelastic and prices increase, total revenue would increase because there would be a negligible change in quantity demanded.
Demand is elastic if a small change in price has a greater effect on the quantity demanded.
If demand is elastic and price is increased, Quanitity demanded would fall and revenue would fall
I hope my answer helps you
The hospitals will likely be successful in increasing revenues by raising the price of emergency appendectomies due to the inelastic demand for such urgent medical procedures.
Explanation:If hospitals decide to increase the price of emergency appendectomies with the expectation to increase revenues, the outcome will depend on the price elasticity of demand for the surgery. Option A is correct because emergency appendectomies have an inelastic demand, meaning consumers are relatively unresponsive to price changes due to the urgent and life-saving nature of the surgery. People with an inflamed appendix need the procedure regardless of the cost, and since alternatives are not available, demand is inelastic. Therefore, when prices increase, the hospital is likely to see increased revenues as the quantity demanded does not significantly decrease.
Learn more about Price Elasticity of Demand here:https://brainly.com/question/31293339
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Phillip Morris USA is concerned about its declining consumer base. Every year more Americans quit smoking cigarettes and fewer and fewer are taking up the habit. They are considering buying a smokeless tobacco company and a cigar manufacturing company so that they are not entirely dependent on cigarette smokers for revenue. Furthermore, there is a slight increase in the number of people using smokeless tobacco products. If Phillip Morris does decide to acquire these companies, what type of corporate level business strategy will they be engaging in? 1. Cost-leadership 2. Focused differentiation 3. Related diversification 4. Vertical integration 5. Competitive tactics
Answer:
2. Focused differentiation
Explanation:
The business strategy of focused differentiation consists in increasing the amount of business sectors that a company operates.
In this example, Phillip Morris is using focused differentiation because it is adding 2 new business sectors to its operation, with the goal of increasing revenue. The first expansion is in the smokeless tobacco sector, and the second expansion is in the cigar manufacturing sector.
In other words, Phillip morris is trying to make smokeless tobacco products, and cigar products, focusing its differentiation strategy on the sectors it believes will produce the greatest amount of revenue.
Willetta Company purchases inventory for $22,000 with terms 2/10, n/30. It then returns $3,200 of the inventory purchased to the supplier and also receives an allowance for defective inventory of $220. The company pays the amount due within the discount period. What is the amount of the discount that will be taken? (Round your answer to the nearest dollar amount.)
a. $320
b. $436
c. $372
Answer:
c. $372
Explanation:
Terms of sale 2/10, n/30 means there is a discount of 2% is available on payment of due amount within discount period of 10 days after sale with net credit period of 30 days.
As per given data
Purchases = $22,000
Sales return = $3,200
Defective Allowance = $220
Receivable = $22,000 - $3,200 - $220 = $18,580
As the payment is made within discount period, so discount will be availed on the amount due
Discount = $18,580 x 2% = $372
Xion Co. budgets a selling price of $80 per unit, variable costs of $35 per unit, and total fixed costs of $271,000. During June, the company produced and sold 10,900 units and incurred actual variable costs of $352,000 and actual fixed costs of $286,000. Actual sales for June were $895,000. Prepare a flexible budget report showing variances between budgeted and actual results. List variable and fixed expenses separately. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance)
Answer:
Income 219,500 256,000 36,500 Favourable
Explanation:
Flexible Budget report showing variances between budgeted and actual results.
Flexible Actual Variance
Sales 872,000 894,000 22,000 Favourable
Variable expenses 381,500 352,000 29,500 Unfavorable
Contribution margin 490,500 542,000 51,500 Favourable
Fixed expenses 271,000 286,000 15000 Unfavorable
Income 219,500 256,000 36,500 Favourable
Sales $80×$10,900=$872,000
Variable $35×$10,900=$381,500
Liang Company began operations on January 1, 2017. During its first two years, the company completed a number of transactions involving sales on credit, accounts receivable collections, and bad debts. These transactions are summarized as follows. 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:
Liang Company
Journal entries to record Liang’s 2017 and 2018 summarized transactions and its year-end adjustments to record bad debts expense (using the perpetual inventory system and applying allowance method for accounts receivable)
1. 2017 Journal entries:
Debit Accounts Receivable with $1,351,700
Credit Sales Account with $1,351,700
To record sales on credit, terms n/30.
Debit Cost of Goods Sold with $981,800
Credit Inventory Account with $981,800
To record cost of goods sold.
Debit Uncollectible Expense Account with $2,150
Credit Accounts Receivable with $2,150
To write off uncollectible accounts receivable.
Debit Cash with $670,400
Credit Accounts Receivable with $670,400
To record cash received on account.
December 31:
Debit Uncollectible Expense Account with $20,374.50
Credit Allowance for Uncollectible Account with $20,374.50
To record 3% allowance for accounts receivable balance.
2. 2018 Journal entries:
Debit Accounts Receivable with $1,586,800
Credit Sales Account with $1,586,800
To record sales on credit, terms n/30.
Debit Cost of Goods Sold with $1,326,300
Credit Inventory Account with $1,326,300
To record cost of goods sold.
Debit Allowance for Uncollectible Account with $25,300
Credit Accounts Receivable with $25,300
To write off uncollectible accounts receivable.
Debit Cash with $1,182,900
Credit Accounts Receivable with $1,182,900
To record cash received on account.
December 31:
Debit Uncollectible Expense Account with $36,658
Credit Allowance for Uncollectible Account with $36,658
To bring the allowance for accounts receivable balance to 3%.
Explanation:
1. Using the perpetual inventory system where transactions are recorded to inventory immediately and not at period-end, the sales transactions will reduce the balance of the inventory account with the cost of sales and increase the cost of sales with the same amount. The Sales account is increased by sales value while the Accounts Receivable is also increased with the same amount.
2. The write-off is initially charged to the uncollectible expense account directly in 2017 but subsequently, it will be debited to the Allowance of Uncollectible account, applying the allowance method.
3. The perpetual inventory system, inventory transactions are recognized in the inventory and cost of goods sold accounts immediately and not at period-end like the periodic inventory system, which waits until inventory count to recognize transactions.
The multiplier for a futures contract on a stock market index is $50. The maturity of the contract is 1 year, the current level of the index is 1,800, and the risk-free interest rate is 0.5% per month. The dividend yield on the index is 0.2% per month. Suppose that after 1 month, the stock index is at 1,820. a. Find the cash flow from the mark-to-market proceeds on the contract. Assume that the parity condition always holds exactly. (Round intermediate calculations to 2 decimal places.)
Final answer:
The mark-to-market cash flow from the futures contract after the stock market index rises from 1,800 to 1,820 is $1,000. This is calculated using the multiplier of $50 and the change in the index level.
Explanation:
Understanding the Futures Contract
The student is seeking to calculate the mark-to-market cash flows of a futures contract on a stock market index with specific parameters given. Since the multiplier is $50, and after one month, the index has risen from 1,800 to 1,820, the mark-to-market gain would be the difference in the index levels multiplied by the multiplier. Therefore, the calculation would be (1820 - 1800) x $50 = $1,000. This would be the cash flow from the mark-to-market proceeds. A key concept to remember is that futures contracts are marked to market daily, meaning the change in value is settled between the parties at the end of each trading day.
The parity condition was also mentioned but no further calculation using this was required. Had it been necessary, the parity condition would ensure that the futures price adjusts considering the risk-free interest rate and the dividend yield on the index. However, to answer the student's question, this detail isn't needed.
Often, through government-supported programs, students may obtain "bargain" interest rates such as 6% or 8% to attend college. Frequently, payments are not due and interest does not accumulate until the student stops attending college. A student has borrowed $42 comma 000 at an annual interest rate of 6.4%. Calculate the amount of interest due 6 months after the student must begin payments.
Final answer:
The interest due 6 months after starting payments on a $42,000 loan at an annual rate of 6.4% is $1,344, based on simple interest calculations.
Explanation:
The student has borrowed $42,000 at an annual interest rate of 6.4%. To calculate the amount of interest due 6 months after the student must begin payments, we must assume that the interest is simple interest (although many student loans actually use compound interest). The formula for simple interest is I = PRT, where I is the interest, P is the principal amount, R is the rate of interest per year, and T is the time in years. In this case:
P = $42,000R = 6.4% annual interest rate, which is 0.064 when expressed as a decimalT = 6 months, which is 0.5 yearsTo calculate the interest, multiply these figures:
I = $42,000 × 0.064 × 0.5 = $1,344
Therefore, the amount of interest due 6 months after the student begins payments is $1,344.
On March 1, 2022, Blossom Company acquired real estate, on which it planned to construct a small office building, by paying $86,000 in cash. An old warehouse on the property was demolished at a cost of $9,400; the salvaged materials were sold for $1,940. Additional expenditures before construction began included $1,440 attorney’s fee for work concerning the land purchase, $5,100 real estate broker’s fee, $8,940 architect’s fee, and $15,200 to put in driveways and a parking lot.
Required:
(a) Determine the amount to be reported as the cost of the land.
Answer:
Cost of The Land = $86,000 + $9,400 - $1,940 + $1,440 + $5,100
= $100,000
Therefore, Cost of The Land is $100,000.
Explanation:
cost of constructing the building = $86,000
cost of demolishing old warehouse = $9,400
cost of salvaged materials = $1,440
Additional expenditures:
Attorney's fee = $5,100
Architects's fee = $8,940
Driveways and parking lot fee = $15,200
Answer:
Cost of The Land = $86,000 + $9,400 - $1,940 + $1,440 + $5,100
= $100,000
$100,000.
Explanation:
cost of constructing the building = $86,000
cost of demolishing old warehouse = $9,400
cost of salvaged materials = $1,440
Additional expenditures:
Attorney's fee = $5,100
Architects's fee = $8,940
Driveways and parking lot fee = $15,200
Assume the market value of Fords' equity, preferred stock and debt are $7 billion, $4 billion and $10 billion respectively. Ford has a beta of 1.4, the market risk premium is 6% and the risk-free rate of interest is 4%. Ford's preferred stock pays a dividend of $3 each year and trades at a price of $25 per share. Ford's debt trades with a yield to maturity of 8.5%. What is Ford's weighted average cost of capital if its tax rate is 35%
Answer:
WACC = 9.1%
Explanation:
The weighted Average cost of Capital(WACC) is the average cost of capital for the different sources of long-term capital available to a firm weighted according to the proportion each source of finance bears to the total capital in the pool.
cost of equity = Rf+ β×(Rm-Rf)
(Rm-Rf)= 6%, Rf- 4%, β- 1.4
=4% + (1.4×6%) = 12.4
Cost of preferred share = Dividend/price
= 3/25× 100= 12.0%
After tax cost of debt = Yield × (1-Tax rate) = 8.5%× (1-0.35)=5.53%
Type cost Market value Cost × Market Value
Equity 12.4% 7 0.868
Preferred 12% 4 0.48
Bond 5.53% 10 0.553
Total 21 1.901
WACC = 1.901 /21 × 100 =9.1%
WACC = 9.1%