Answer:
Explanation:
The journal entries are shown below:
1. Cash Dividend A/c Dr $122,838 (62,600 + 16,650) × $1.55
To Dividend payable A/c $122,838
(Being the dividend is declared)
2. Dividend payable A/c $122,838
To Cash A/c $122,838
(Being the dividend is paid)
3. Cash Dividend A/c Dr $142,97 (62,600 + 16,650 + 7,400) × $1.65
To Dividend payable A/c $142,973
(Bring dividend is recorded)
Your Memory Lane produces custom-made art prints that include graphics and icons to celebrate life’s special moments. For example, on his wedding anniversary, David had an art print produced that celebrated highlights of his ten years with his wife, Kathy. Suppose that Your Memory Lane sells the custom artwork for $500. It estimates its average variable costs to be $200 per unit produced. It figures its fixed costs to be $900,000 per year. How many prints does it have to sell to break even?
Answer:
3,000 prints
Explanation:
In this question we use the formula of break-even point in unit sales which is shown below:
= (Fixed cost) ÷ (Contribution margin per unit)
where,
Contribution margin per unit = Selling price per unit - Variable expense per unit
= $500 - $200
= $300
And, the fixed cost is $900,000
Now put these values to the above formula
So, the value would equal to
= ($900,000) ÷ ($300)
= 3,000 prints
Your Memory Lane needs to sell 3000 custom-made art prints per year to cover its total costs and reach its break-even point.
Explanation:Your Memory Lane, the company in question, can calculate its break-even point by determining how many art prints it needs to sell such that its total revenue equals its total costs. This point represents a state of 'no profit loss.' The company's fixed cost, the cost that doesn’t change regardless of the quantity of goods produced, is $900,000 per year. The variable cost, which varies as the number of goods produced changes, is $200 per unit. The selling price per unit, or the revenue per unit, is $500.
The formula for calculating the break-even point is given by Fixed Costs ÷ (Selling Price per Unit - Variable Cost per Unit). Substituting the respective values into this formula yields $900,000 ÷ ($500 - $200) = 3000 units.
So, Your Memory Lane must sell 3000 custom-made art prints in a year to cover its total costs and break-even.
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When Michael is born, four uncles decide to save money for his future in different ways: Uncle A: He deposits $50 on Michael's first birthday, and every subsequent birthday. Uncle B: He deposits $15 on Michael's first birthday, and every subsequent birthday he deposits $5 more than the previous year. Uncle C: He deposits $40 on Michael's first birthday, and every subsequent birthday he deposits 5% more than the previous year. Uncle D: At Michael's birth he deposits $300 in a savings account which offers 2.7% interest compounded quarterly. By the time Michael is 21 years old, which uncle has saved the most money for him?
Answer:
By the time Michael is 21 years old, Uncle C has saved the most money.
Explanation:
Uncle A = $50 on Michael's first birthday, and same on each birthday
When Michael is 21 years of old, His Uncle A will save = $50 x 21 = $1,050
Uncle B = $15, and $5 more than the previous year. It means 15, 20, 25...
When Michael is 21 years of old, His Uncle B will save = $1,365
Here is the sequence = (15+20+25+30+35+...............+100+105+110+115)
Uncle C = $40, and 5% more than the previous year. It means $40 x 1.05 = $42 in the 2nd year.
When Michael is 21 years of old, His Uncle C will save = $1,428.77 (See the image below to get the proper explanation)
Uncle D = $300. It offers 2.7% interest compounded quarterly. When Michael is 21 years of old, His Uncle D will save = $527.88
Using the Future value, we can determine Uncle D's savings. Hence,
FV = PV × [tex](1 + \frac{i}{m} )^{n*m}[/tex]
FV = $300 × [tex](1 + \frac{0.027}{4} )^{21*4}[/tex]
FV = $300 × 1.7596
FV = $527.88
Financial swap markets have emerged in recent years because of the following reasons:_______a. Exchange rates fluctuate widely b. Interest rates fluctuate widely c. Forward markets may not function properly d. Currency futures are available only for selected currencies e. All of the above
Answer:
E. All of the above
Explanation:
Financial swap is a treaty between the two parties, sometimes called the counterparties, to exchange the prospective cash flow between themselves.
Financial swap emerges due to the fluctuation of the exchange rate and interest rates because the exchange rate and interest rates change from time to time which might create a problem for either the buyer or the seller. The forward market does not work correctly, and some currencies are not accessible in the foreign exchange. Therefore, all the answers are valid for the emergence of a financial swap.
Financial swap markets emerged due to fluctuating exchange rates, interest rates, limitations in forward markets, and limited currency futures availability. Correct option is e. All of the above
Financial swap markets have emerged in recent years due to a combination of factors, including:
a. Exchange rates fluctuate widely:
- Fluctuating exchange rates can expose businesses to significant risks when dealing with international transactions. Financial swaps, such as currency swaps, allow companies to hedge against these fluctuations by exchanging one currency for another at a predetermined rate, reducing exchange rate risk.
b. Interest rates fluctuate widely:
- Interest rate swaps are a common type of financial swap that helps businesses manage interest rate risk. As interest rates fluctuate, companies can enter into these swaps to exchange variable-rate interest payments for fixed-rate payments or vice versa, depending on their risk preferences.
c. Forward markets may not function properly:
- Sometimes, forward markets may not provide the desired financial instruments or flexibility. Financial swaps offer customized solutions that may not be available through standardized forward contracts.
d. Currency futures are available only for selected currencies:
- Currency futures markets primarily cover major currencies, leaving smaller or less commonly traded currencies with limited hedging options. Financial swaps allow businesses to hedge exposure to a broader range of currencies.
e. All of the above:
- Financial swap markets have gained prominence because they address the combined challenges of exchange rate volatility, interest rate fluctuations, the limitations of forward markets, and the availability of currency futures. The flexibility and customization offered by swaps make them a versatile tool for managing various financial risks.
In summary, the emergence of financial swap markets can be attributed to the multifaceted challenges that businesses face in the global financial landscape, making swaps a valuable risk management tool for a wide range of financial uncertainties.
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On September 1, 2021, Middleton Corp. lends cash and accepts a $3,900 note receivable that offers 9% interest and is due in six months. How much interest revenue will Middleton Corp. report during 2021? (Do n
Answer:
$117
Explanation:
The computation of the interest revenue is shown below:
= Note receivable amount × rate of interest × number of months ÷ (total number of months in a year)
= $3,900 × 9% × (4 months ÷ 12 months)
= $117
The 4 months are from 1 September 2021 to 31 December 2021 It is assumed that the books will be closed on 31 December 2021
Leker exchanged real property that was used exclusively for business and had an adjusted tax basis of $20,000 for new real property. The new real property had a fair market value of $10,000, and Leker also received $3,000 in cash. What was Leker tax basis in the acquired real property?
Answer:
$17,000
Explanation:
Leker's Old Property Adjusted Tax Basis = $20,000
To calculate the new basis, subtract the $3000 recieved in cash from the new property.
New Tax Basis; $20,000-$3,000= $17,000
The transaction of Leker to exchange a real property for another led to a loss: Meaning a Property of $20,000 was exchanged for a property of $10,000+ $3,000 (cash)= $13,000
The Loss on the transaction= $20,000- $13,000= $7,000
Due to the loss no gain is recognized and the $3000 will reduce the basis for his new asset.
Miyose Corporation, a manufacturing company, has provided the following data for the month of June: Raw materials purchased during June totaled $67,000 and the cost of goods manufactured totaled $124,000. Inventories: Beginning Ending Raw Materials $ 23,000 $ 21,000 Finished Goods $ 32,000 $ 37,000 Required (round to nearest dollar with no decimal places) a. What was the cost of direct materials used in production during June? $ b. What was the cost of goods sold for June? Show your work. $
Answer:
a) Cost of direct material used = $69,000
b) cost of goods sold for June = $119,000
Explanation:
Data provided in the question:
Raw materials purchased during June = $67,000
Cost of goods manufactured = $124,000
Beginning Ending
Raw Materials $23,000 $21,000
Finished Goods $32,000 $37,000
Now,
a) Cost of direct material used = Raw material available - Ending raw material
= (Beginning Raw Materials + Raw materials purchased) - Ending raw material
= $23,000 + $67,000 - $21,000
= $69,000
b) cost of goods sold for June
= Cost of goods available for sale - Ending Finished Goods
= $124,000 + $32,000 - $37,000
= $119,000
Making an intentional omission of material fact when recommending a security to a ustomer would be considered fradulent if:__________.
eConnect, an online retailer, fulfills its online orders by shipping its products directly to customers in all 50 states. eConnect does not have a brick-and-mortar store presence in any state, but does operate distribution centers in various states across the country, including State X. Consistent with its practice in all 50 states, eConnect does not collect or remit sales tax to State X.In court rulings in 2005, State X had taken the position that operating a distribution center within a state constitutes nexus and thus would subject that company to collect and remit sales tax on all sales within that state.As of December 31, 2011, eConnect has operated its distribution center in State X for five years and has never collected or remitted sales tax to State X. The company considers the risk of detection to not be probable, hence no contingency needs to be recognized. However, eConnect has estimated the total amount of sales tax payable to the state for the past five years to be $50 million plus $6 million in interest and $4 million in penaltiesOn March 15, 2012, Mr. Needmoney, the governor of State X, established a tax amnesty program. The program provides that any unregistered taxpayer who voluntarily registers to collect sales tax on a prospective basis will be forgiven (1) 50 percent of all unpaid sales tax and (2) all interest and penalties on unpaid taxes. On the same date of this announcement, eConnect management decides to take advantage of this program.On June 15, 2012, eConnect completes the necessary paperwork and other actions to participate in the program and pays State X $25 million to settle its obligation through December 31, 2011.Required: (Please explain your answer!)Should eConnect restate financial statements prior to 2011 and why?What amounts, if any, should be recognized in the financial statements associated with the $25 million payment on June 15, 2012?
Answer:No, eConnect does not need to restate financial statement prior to 2011
B. No amount would be recognized in the financial statement associated with the S25million payment on June 15, 2012 but the amount should be debited to 2011 as prior year adjustment.
Explanation:
Though the S25 million payment refers to the account year preceding 2011 and 2011 but a debit to the retained earnings of 2011 will provide the same effect as debiting to the prior years before 2011.
The S25 million payment in 2012 though a direct reduction in cash asset to be debited to bank account for the year but it will only be recognized as a prior year adjustment and no other amount will be associated with it .
eConnect does not need to restate its financial statements prior to 2011 as it did not recognize any contingent liability for the potential sales tax and related penalties. The $25 million payment made on June 15, 2012, should be recognized as an expense in the financial statements for that period.
Explanation:Given the information in the question, it is not necessary for eConnect to restate its financial statements before 2011. The reasoning behind this conclusion lies in the fact that the company did not recognize any contingent liability for the potential sales tax and related penalties in those years because they estimated that the chances of detection were not probable. Therefore, no restatement of the financial statements for these previous years is required.
As for the amount to be recognized in connection with the $25 million payment on June 15, 2012, this should be recognized as an expense in the financial statements for the period in which the payment was made. Specifically, this is a liability that was incurred due to the company's past actions (i.e., sales made without collecting and remitting applicable sales tax), and it was settled during this period, so it should be reflected in the company's financial performance and position for this period.
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when an agent changes employement from one broker-dearl erot another, the agents registration must be transfered _____
Answer: Immediately
Explanation: An Agent is a legally appointed third-party to act in the place of a person or organizations.
Whenever an agent changes employment from one dealer broker to another he has to immediately transfer his registration number, the registration number of an agent is very important as it is one of the main requirements for Government regulation of an agent.
The registration number of an agent gives the agent some level of credibility and ensures that the agent has gone through the legal and valid requirement for practice.
Which incentives do interest groups engage in to overcome the free rider problem?
a. special discounts
b. subscription to a magazine
c. access to special information on the Internet
d. All of these are correct
Answer:
The correct answer is letter "D": All of these are correct.
Explanation:
The Free Rider Problem refers to someone being able to gap for less or even for free what others pay more for. The problem arises when individuals are unwilling to pay their fair share for something that most others pay for. The problem is more often while talking about public goods. To avoid this issue, some sort of special must be given to consumers such as discounts, promotions for subscriptions or special information online.
Lancelot Manufacturing is a small textile manufacturer using machineminushours as the single indirectminuscost rate to allocate manufacturing overhead costs to the various jobs contracted during the year. The following estimates are provided for the coming year for the company and for the Case High School band jacket job. Company Case High School Job Direct materials $ 47 comma 000 $ 2 comma 200 Direct labor $ 25 comma 000 $ 500 Manufacturing overhead costs $ 36 comma 000 Machineminushours 90 comma 000 mh 900 mh What amount of manufacturing overhead costs will be allocated to this job? A. $ 360 B. $ 1 comma 080 C. $ 220 D. $ 610
Answer:
Overhead absorption rate = Budgeted overhead
Budgeted machine hours
= $36,000/90,000 hrs
= $0.4 per machine hour
The amount of manufacturing overhead to be allocated to the job
= $0.4 x 900 machine hours
= $360
Explanation:
There is need to calculate the overhead absorption rate which is budgeted manufacturing overhead divided by budgeted activity level.
Then, we will multiply the overhead absorption rate by the actual machine hours of 900 hours.
Your company operates a fleet of light trucks that are used to provide contract delivery services. As the engineering and technical manager, you are analyzing the purchase of 55 new trucks as an addition to the fleet. These trucks would be used for a new contract the sales staff is trying to obtain. If purchased, the trucks would cost $21,200 each; estimated use is 20,000 miles per year per truck; estimated operation and maintenance and other related expenses (year-zero dollars) are $0.45 per mile, which is forecasted to increase at the rate of 5% per year; and the trucks are MACRS (GDS) three-year property class assets. The analysis period is four years; t= 25%; MARR = 15% per year (after taxes; includes an inflation component); and the estimated MV at the end of four years (in year-zero dollars) is 35% of the purchase price of the vehicles. This estimate is expected to increase at the rate of 2% per year. Based on an after-tax analysis, what is the uniform annual revenue required by your company from the contract to justify these expenditures before any profit is considered? This calculated amount for annual revenue is the breakeven point between purchasing the trucks and which other alternative?
Answer:
Revenues in the order of 18.170,66 dollars per truck per year will break even financially the investment with a yield of 15%
for the 55 truck $999.386,66 per year
Explanation:
F0 cash disbursement 21,200
MACRS dep dep tax shield (depreciation x tax rate)
7,065.96 1,766.49
9,423.40 2,355.85
3,139.72 784.93
1,570.92 392.73
annual cost of the truck:
20,000 x 0.45 x 5% increase per year
maintenance
first year 9000
second year: 9450
third year: 9922.5
fourth year: 10418.625
net (maintenance cost less tax shield):
net
7233.51
7094.15
9137.57
10025.895
Then, we bring this to present considering the discount rate:
[tex]\frac{cash \: flow}{(1 + rate)^{time} } = PV[/tex]
time: 1 7,233.51 6,290.01
time: 2 7,094.15 7,094.15
time: 3 9,137.57 9,137.57
time: 4 10,025.90 10,025.90
Total PV 32,547.63
We know the salvage value in todays dollar is 35% of the purchase price:
21,200 x 35% = 7,420
(the inflation is already considered in the MARR)
We knwo calculate the present worth:
-21,200 - 32,547.63 + 7,420 = -38.907,63
Know we solve for an annuity of four year to ge t the equivalent annual cost:
[tex]PV \div \frac{1-(1+r)^{-time} }{rate} = C\\[/tex]
PV 38,908
time 4
rate 0.15
[tex]38907.63 \div \frac{1-(1+0.15)^{-4} }{0.15} = C\\[/tex]
C $ 13,627.995
We have to consider taxes so:
13,628 / 0.75 = 18.170,66
Answer:
Explanation:
Your company operates a fleet of flight trucks that are used to provide contract delivery services. As the engineering and technical manager, you are analyzing the purchase of 55 new trucks as an addition to the fleet.These trucks would be used for a new contract the sales staff is trying to obtain. If purchased, the trucks would cost $21,200 each; estimated use is 20,000 miles per year per truck; estimated annual operation and maintenance and other related expenses (year-zero dollars) are $0.45per mile which is forecasted to increase at a rate of 5% per year; and estimated annual revenue (in actual $) are $20,000 per year per truck required .
The trucks are MACRS-GDS three-year property class assets.The analysis period is four years; t=38%; after-tax MARR=15% per year (after-tax; includes an inflation component) ; and the estimated MV at the end of four years (in year-zero dollars) is 35% of the purchase price of the vehicles.This estimate is expected to increase at the rate of 2% per year.
Part A: Create a spreadsheet to determine whether your company should buy the new trucks. Develop the spreadsheet for each truck (per truck).
Part B: Based on an after-tax, actual-dollar analysis, what is the annual revenue required by your company from the contract to justify these expenditures before any profit is considered?
please help me with this problem
Answer:
$25.73
Explanation:
Apples $4.25
Oranges $5.00
Cheese $4.50
Flowers $9.99
Total Purchase Before Tax $23.74
Sales Tax @8% $1.99
Total Cost $25.73
Where Sales Tax is calculated as;
$23.74 x 0.08 = $1.99
Red Raider Company uses a plantwide overhead rate with direct labor hours as the allocation base. Next year, 400,000 units are expected to be produced taking .90 direct-labor hours each. How much overhead will be assigned to each unit produced given the following estimated amounts?
Estimated: Department 1 Department 2
Manufacturing overhead costs $2,530,000 $900,000
Direct labor hours 168,000 DLH 110,000 DLH
Machine hours 30,000 MH 8,000 MH
a. $12.34 per unit
b. $63.95 per unit
c. $7.32 per unit
d. $11.11 per unit
e. $15.06 per unit
Answer:
the correct answer is d. $11.11 per unit
Explanation:
($2,530,000 + $900,000)/(168,000 + 110,000) DLH = $12.34 per DLH
$12.34 × .90 = $11.11 per unit
To calculate the overhead assigned to each unit produced, we need to determine the total overhead cost and the total number of units produced. The plantwide overhead rate is calculated by dividing the total manufacturing overhead costs by the total direct labor hours. In this case, the overhead cost assigned to each unit produced is $11.11.
Explanation:To calculate the overhead assigned to each unit produced, we need to determine the total overhead cost and the total number of units produced. The plantwide overhead rate is calculated by dividing the total manufacturing overhead costs by the total direct labor hours. In this case, the total manufacturing overhead costs are $2,530,000 for Department 1 and $900,000 for Department 2. The total direct labor hours are 168,000 DLH for Department 1 and 110,000 DLH for Department 2.
Using the given information, we can calculate the plantwide overhead rate:
Plantwide Overhead Rate = (Department 1 Overhead Costs + Department 2 Overhead Costs) / (Department 1 Direct Labor Hours + Department 2 Direct Labor Hours)
= ($2,530,000 + $900,000) / (168,000 + 110,000)
= $3,430,000 / 278,000
= $12.34 per DLH
Since each unit takes 0.90 DLH, we can multiply the plantwide overhead rate by 0.90 to find the overhead per unit:
Overhead per Unit = Plantwide Overhead Rate * Direct Labor Hours per Unit
= $12.34 * 0.90
= $11.11 per unit
The compensation committee is a _____.
(A) subgroup of the shareholders that is composed of investors who are currently the officers of the firm
(B) subgroup of the union that is composed of employees who are not officers of the firm
(C) subgroup of the management that is composed of managers who are currently the officers of the firm
(D) subgroup of the board of directors that is composed of directors who are not officers of the firm
Answer:
The correct answer is
(D) subgroup of the board of directors that is composed of directors who are not officers of the firm
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Suppose the demand function for yellow #2 pencils is represented as: Q = 5,000-1/2G + 2H. Assume that pencils are a normal good. Which one of the following statements below is true? O A. The variable H could be the price of note book paper. O B. The variable G could be the price of wood used to make pencils. OC. The vaiable H could be price of mechanical lead pencels O D. The variable G could be consumers' income.
In the given demand function, the variable H can be the price of the mechanical lead pencils which are the other form of pencils apart from the wood lead pencils.
Answer: Option C
Explanation:
The demand function shows the relation ship between the price of the goods and the quantity demanded of the goods which are inversely related to each other and show that with the increase in the price of the good, the quantity demanded falls. The number 5000 is an autonomous demand of the pencils. This means the demand of the pencils when the price of the pencils is zero.
The variable H is the price of the the pencil which is the mechanical lead pencil. It is the second form of the pencil. The first form of the pencil is the pencil made from the wood which is shown by the variable G in the following demand function in the question.
The statement that is true with regards to the given demand function is The variable H could be price of mechanical lead pencils.
What is a demand function?Demand functions show the functional relationship between quantity demanded and other determinants for a commodity.
The standard demand function can be represented as:
[tex]\rm Q = a - bP[/tex], where Q is the quantity demanded, a is the autonomous demand, b is the slope and P is the price of the commodity.
The given demand function for #2 pencil is:
[tex]\rm Q= 5,000-\dfrac{1}{2}G + 2H[/tex]
On the basis of the above demand function, we can assume that the variable H represents the price of the #2 pencil.
Therefore the correct statement is C.
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A firm is considering a simple investment project. If it goes forward, then the firm must pay $900 now, but it receives a payment of $400 in each of the following three years. Except as noted, each part of the problem is worth 5 points.(a) [16 points] You should calculate, to the nearest dollar, the present value of this project for four different scenarios. Assume that the firm’s opportunity cost of capital is simply the (risk-adjusted) market interest rate. Scenario A: The interest rate is 14%. Scenario B: The interest rate is 17%. For the second two scenarios, assume that the OCC is 20%, but there is also inflation. The effect of inflation is to increase the value of the payment received by the inflation rate, with each year that passes. The payment that would have been $400 initially exceeds $400 by the time it occurs a year later, and each year’s payment will be larger than the previous year’s payment. Scenario C: The inflation rate is 2%. Scenario D: The inflation rate is 5%.(b) In which scenarios is the project profitable? (You should briefly justify your answers.)(c) Can you find two scenarios such that the scenario with the higher interest rate also produces less investment? Can you find two scenarios such that the scenario with the higher interest rate also produces more investment?
Answer:
a) scenario A NPV positive 28.68, scenario B NPV Negative 16.16, scenario C NPV positive 664.92, scenario D NPV positive 889.72 (b) The scenario with the highest positive NPV is the most profitable (c) The scenario B with the interest rate of 17% has Negative NPV of 16.16 produces less investment (d) The scenario C with the highest interest rate of 20% has the positive NPV of 664.92 he scenario D with the highest interest rate of 20% has the highest positive NPV of 889.72, produces more investment
Explanation:
Calculation of Discount Factor
Effective rate for scenario C and D
Using the formula (1 + m/1 + i)∧n - 1 Where i = rate of inflation, m = cost of capital, n = numbers of years
For C since interest rate = 20% = 20÷100 = 0.2, since rate of inflation = 2% = 2÷100 = 0.02
(1 + 0.2/1 + 0.02)∧n - 1
= 1.2 /1.02 -1
=1.1764 -1
=0.1764 ×100 = 17.64%
Discount Factor for C using the formula ( 1 + r)∧-n -1/ r since n = 3 ,r = 0.1764
= ( 1 + 0.2)∧-3 - 1/ 0.1764
= (1.2)∧-3 -1/0.1764
=0.5787 -1
= 0.4213÷ 0.1764
= 2.3883
For D Effective rate
( 1 + 0.2)∧n - 1/(1 + 0.05)
= 1.2/1.05 -1
=1.1428 -1
= 0.1428 × 100 = 14.28%
DF for D
= (1 + 0.2)∧-3 -1 / 0.1428
=0.5787 -1 = 0.4213
=0.4213÷0.1428
=2.9503
DF for year 1 and 2 for C and D
Using the formula ( 1 + r) ∧-n
( 1 + 0.2)∧-1 = ( 1.2)∧-1 = 0.83
(1 + 0.2)∧-2 = (1.2)∧-2 = 0.694
DF for scenario A For year 1 -3 using ( 1+ r)∧-n
= ( 1 + 0.14)∧-1 = (1.14)∧-1 = 0.8772
= (1+0.14)∧-2 = (1.14)∧-2 = 0.7695
=(1+0.14)∧-3 = (1.14)∧-3 = 0.6750
DF for scenario B using the same formula
=( 1 + 0.17)∧-1 =(1.17)∧-1 = 0.8547
=(1+0.17)∧-2 = (1.17)∧-2 = 0.7305
=(1 + 0.17)∧-3 = (1.17)∧-3 = 0.6244
Scenario A
Year. C.F. DF PV
$ $
0. 900 1 (900)
1 400 0.8772 350.88
2 400 0.7695 307.8
3 400 0.6750 270
-----------
NPV positive 28.68
-------------
Workings = C F × DF = PV
Scenario B
Year. CF DF PV
$ $
0 900 1 (900)
1. 400 0.8547 341.88
2 400 0.7305 292.2
3. 400 0.6244 249.76
-------------
NPV Negative 16.16
------------------
Scenario C
Year CF DF PV
$ $
0 900 1 (900)
1 400 0.83 332
2 400 0.694 277.6
1-3 400 2.3883. 955.32
----- ---------
NPV positive 664.92
----------------
Scenario D
Year CF DF PV
$ $
0 900 1 (900)
1 400 0.83 332
2. 400 0.694 277.6
1-3 400 2.9503 1,180.12
---------------
NPV positive 889.72
-----------------
Lean AccountingModern Lighting Inc. manufactures lighting fixtures, using lean manufacturing methods. Style Omega has a materials cost per unit of $16. The budgeted conversion cost for the year is $308,000 for 2,200 production hours. A unit of Style Omega requires 18 minutes of cell production time. The following transactions took place during June:Materials were acquired to assemble 620 Style Omega units for June.Conversion costs were applied to 620 Style Omega units of production.600 units of Style Omega were completed in June.580 units of Style Omega were sold in June for $100 per unit.a. Determine the budgeted cell conversion cost per hour.$ per hourb. Determine the budgeted cell conversion cost per unit.$ per unitFeedbackc. Journalize the summary transactions (1)–(4) for June.
Answer:
(a) Conversion cost per hour:
= budgeted conversion cost ÷ production hours
= 308,000 ÷ 2,200
= $140 Per hr
Budgeted cell conversion cost per unit :
= $140 Per hr × (18 ÷ 60 )
= $42 per unit
The Journal entries are as follows:
(i) Raw and in process inventory A/c [620 × 16] Dr. $9,920
To Account Payable $9,920
(To record the Raw and in process inventory)
(ii) Raw and in process inventory A/c [620 × 42] Dr. $26,040
To Conversion cost $26,040
(To record the Conversion cost )
(iii) Finished good Inventory A/c [600 × 58] Dr. $34,800
To Raw and in process inventory $34,800
(To record the Finished good Inventory )
(iv) Account Receivable A/c [580 × 100] Dr. $58,000
To sales $58,000
(To record the sales )
(v) cost of goods sold A/c [580 × 58] Dr. $33,640
To Finished good Inventory $33,640
(To record the cost of goods sold)
conversion cost per unit = Direct Material + conversion cost
= 16 + 42
= 58
in regard to an operating budget identifiable costs may generally include _________.
Answer:
Explanation:
Identifiable costs by definition are expenses that can be identified directly with a specific facility, activity or function. Operating budgets deal with short term expenses and expenses to be incurred in the next one year. Therefore, in regard to operating budget, identifiable costs may generally include cost of inventory, cost of fixed assets like land and equipment, supporting group and the direct care group wages.
Final answer:
Identifiable costs in an operating budget generally consist of both fixed and variable costs. Fixed costs are initial, unchanging expenses for essential equipment, while variable costs fluctuate based on organizational activities such as personnel expenses and supplies.
Explanation:
In regard to an operating budget, identifiable costs may generally include fixed costs and variable costs. Fixed costs, such as purchases of essential equipment like vehicles and capture or recording equipment, are expenses that do not change with the level of activity within the organization and are typically incurred during the first year. These costs are important to factor into the budget for long-term planning and replacement scheduling. Variable costs, on the other hand, include items that fluctuate with the organization's activities, such as cumulative personnel expenses (salaries, benefits, and indirect costs), and expendable items like supplies that must be renewed regularly.
Budget planning and management require an understanding of both fixed and variable costs to ensure that they accurately reflect the organization's expenditure needs. It's also crucial for public managers to be aware of how cost structures and behaviors change in different performance scenarios, which aids in effective budgeting and management at the program level.
Snyder Computer Chips Inc. is experiencing a period of rapid growth. Earnings and dividends are expected to grow at a rate of 15% during the next two years, at 13% in the third year, and at a constant rate of 6% thereafter. Snyder's last dividend was $1.15, and the required rate of return on the stock is 12%.a. Calculate the value of the stock today.b. Calculate P1 and P2.c. Calculate the dividend yield and the expected capital gains yield for year 1.
Answer
Consider the following calculation
Explanation
D1 = 1.15*(1+0.15) = 1.3225
D2 = 1.3225*(1+0.15) = 1.52
D3 = 1.52*(1+0.13) = 1.719
D4 = 1.719*(1+0.06) = 1.82
According to dividend discount model,
P0 = D1/(R-G)
D1 - Dividend at t =1
R - Required rate
G - Growth rate
P3 = D4/(R-g) = 1.821/(0.12-0.06) = 30.36
Find P0 by discounting the future dividends and P3
P0 = 1.3225/(1+0.12) + 1.52/(1+0.12)^2 + 1.718/(1+0.12)^3 + 30.36/(1+0.12)^3 = $25.23
Current value of stock = $25.23
b. P1 = 1.52/(1+0.12)^1 + 1.718/(1+0.12)^2 + 30.36/(1+0.12)^2 = $26.93
P2 = 1.718/(1+0.12)^1 + 30.36/(1+0.12)^1 = $28.64
c. Dividend yield = Dividend/Price
For year 1, Dividend yield = 1.3225/25.23 = 0.0524 = 5.24%
Capital gains yield = (P1-P0)/P0 = (26.93-25.23)/25.23 = 0.0674 = 6.74%
The value of Snyder Computer Chips Inc.'s stock can be calculated by computing the present value of dividends and the present value of sale price. The prices P1 and P2 correspond to the price of the stock in year 1 and 2, and can be computed using the dividend discount model. The dividend yield and expected capital gains yield vary based on the stock's current price and expected future prices.
Explanation:To calculate the value of the Snyder Computer Chips Inc. stock, we need to compute the present value of dividends and the present value of sale price at the end of year 3. We use the formula for present value which factors in the dividend growth and the required rate of return.
a. D1 = $1.15*1.15 = $1.3225 is the expected dividend in year 1, D2 = $1.3225*1.15 = $1.52088 is the expected dividend for year 2, and D3 = $1.52088*1.13 = $1.7185924 is the expected dividend for year 3. We then compute the present value of these dividends. After that, we calculate the price of the stock in year 3 using the constant growth model P3 = D3*(1+g) / (required rate of return - g).
b. P1 = D2 / (required rate of return - growth rate) and P2 = D3 / (required rate of return - growth rate).
c. The dividend yield for any year is the expected dividend divided by the current price of the stock. The expected capital gains yield would be the expected price of the stock in the following year minus current price divided by the current price.
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During 2020, Sarasota Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Sarasota for a lump sum of $131,670 because it is discontinuing manufacturing operations and wishes to dispose of its entire stock. Three types of chairs are included in the carload. The three types and the estimated selling price for each are listed below.Col1 Type Lounge chairs Armchairs Straight chairsCol2 No. of Chairs 880 660 1540Col3 Estimated Selling Price Each $90 80 50During 2020, Sarasota sells 440 lounge chairs, 220 armchairs, and 264 straight chairs.
What is the amount of gross profit realized during 2020? What is the amount of inventory of unsold straight chairs on December 31, 2020?
Answer
The answer and procedures of the exercise are attached in the following archives.
Step-by-step explanation:
Gross profit = Sales - Cost of goods sold
= (440 x 90 + 220 x 80 + 264 x 50) - (440 x 56.7 + 220 x 50.4 + 264 x 31.5)
= (39,600 + 17,600 + 13,200) - (24,948 + 11,088 + 8,316)
= 70,400 - 44,352
= $26,048
Ending inventory schedule attached in the excel archive
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
If the fair value of the subsidiary's identifiable net assets exceeds both the book value and the value implied by the purchase price, the workpaper entry to eliminate the investment account :
a. debits Excess of Fair Value over Implied Value.
b. debits Difference Between Implied and Fair Value.
c. debits Difference Between Implied and Book Value.
d. credits Difference Between Implied and Book Value.
Answer:
C
Explanation:
debits Difference Between Implied and Book Value
As part of an estate settlement Mary received $1 million. She decided to use the money to purchase a small business in Anywhere, USA. If Mary would have invested the $1 million in a risk-free bond fund she could have made $100,000 each year. She also quit it her job with Lucky.Com Inc. to devote all of her time to her new business; her salary at Lucky.Com Inc. was $75,000 per year.
At the end of the first year of operating her new business, Mary's accountant reported an accounting profit of $150,000. What was Mary's economic profit?
a. $25,000 loss
b. $50,000 loss
c. $25,000 profit
d. $150,000 profit 13.
Answer:
a. $25,000 loss
Explanation:
Economic profit = revenues - explicit costs - opportunity costs
In this case, Mary's economic profit = profit from investment in new business - opportunity cost of not investing $1 million in risk-free bond - opportunity cost of quitting job
= $150,000 - $100,000 - $75,000
= ($25,000)
Which of the following would you expect to decrease the demand for tennis racquets?
A. A decrease in the price of tennis balls which are complements in consumption of tennis
B. An increase in the supply of tennis racquets
C. An increase in the price of tennis racquets
D. None of the above would decrease the demand for tennis racquets
Answer:
C) An increase in the price of tennis racquets
Explanation:
If tennis racquets become more expensive, the demand for them will decline, and people will try to supply this need with substitutes, for example, lacrosse raquets. The reason for this is that the classical supply and demand model tells us that demand and price are inversely correlated: if the price goes up, demand goes down, and viceversa.
An increase in the price of tennis racquets (Option C) is the factor that would be expected to decrease the demand for tennis racquets.
To answer the student's question regarding what would cause a decrease in the demand for tennis racquets, we must understand the factors that affect demand. Option C, 'an increase in the price of tennis racquets,' would indeed decrease demand according to the law of demand, which states that, ceteris paribus, when the price of a product rises, the quantity demanded of the product will fall.
This is because as the price goes up, the product becomes less affordable to consumers, so they will buy less of it. None of the other options provided (decrease in the price of tennis balls, increase in the supply of tennis racquets, or none of the above) are likely to decrease demand for tennis racquets. In fact, a decrease in the price of tennis balls might actually increase the demand for tennis racquets since they are complementary goods.
In the workplace, racial discrimination is a very serious issue. Consider a company in which 20% of the employees are African-American. At the end of the year, promotions are awarded to a group of employees. Out of the 40 promotions awarded, five are African-American. Given that the awarding follows the binomial distribution, B(40,.2).
Answer:
a) It is expected that 8 African-Americans get promotions.
b) There is a 8.6% probability that 5 African-Americans get promotions.
c) There is a 16.2% probability that at five or less African-Americans get promotions.
d) The company may be accused of racial discrimination because the ammount of promotions given to African-Americans is much less than expected if there were no discrimination. The expected value, if there is no discrimination, of having more than 5 promotions for African American employees is 84%.
Explanation:
The question is incomplete.
Complete question:
In the workplace, racial discrimination is a very serious issue. Consider a company in which 20% of the employees are African-American. At the end of the year, promotions are awarded to a group of employees. Out of the 40 promotions awarded, five are African-American. Given that the awarding follows the binomial distribution, B(40,.2).
a) How many African-Americans would you expect to get promotions?
b) What is the probability that five African-Americans receive promotions?
c) What is the probability that five or fewer African-Americans receive promotions?
d) Do you think the company is suspect of racial discrimination? Explain your thinking.
a) As this situation can be modeled by a binomial distribution B(40,0.2), the expected number of African-Americans that get promotions can be calculated as the expected value of the binomial distribution:
[tex]X\sim B(40,0.2)\\\\E(X)=np=40*0.2=8[/tex]
It is expected that 8 African-Americans get promotions.
b) Accordingly to the binomial distribution, we have:
[tex]P(X=5)=\frac{40!}{5!35!}*(0.2)^5*(0.8)^{35}=658008*0.00032*0.0004= 0.086[/tex]
There is a 8.6% probability that 5 African-Americans get promotions.
c) We have to calculate the probabilities for X=0,1,2,3,4 and 5.
[tex]P(X\leq5)=P(X=0)+P(X=1)+P(X=2)+P(X=3)+P(X=4)+P(X=5)\\\\\\P(X=0)=\frac{40!}{0!40!}*0.2^0*0.8^{40}=1*1*0.00013=0\\\\P(X=1)=\frac{40!}{1!39!}*0.2^1*0.8^{39}=40*0.2*0.00017=0.001\\\\P(X=2)=\frac{40!}{2!38!}*0.2^2*0.8^{38}=780*0.04*0.00021=0.007\\\\P(X=3)=\frac{40!}{3!37!}*0.2^3*0.8^{37}=9880*0.008*0.00026=0.021\\\\P(X=4)=\frac{40!}{4!36!}*0.2^4*0.8^{36}=91390*0.0016*0.00032=0.047\\\\P(X=5)=\frac{40!}{5!35!}*0.2^5*0.8^{35}=658008*0.00032*0.00041=0.086[/tex]
[tex]P(X\leq5)=P(X=0)+P(X=1)+P(X=2)+P(X=3)+P(X=4)+P(X=5)\\\\P(X\leq5)=0+0.001+0.007+0.021+0.047+0.086=0.162[/tex]
There is a 16.2% probability that at five or less African-Americans get promotions.
d) The company may be accused of racial discrimination because the ammount of promotions given to African-Americans is much less than expected if there were no discrimination. The expected value, if there is no discrimination, of having more than 5 promotions for African American employees is 84%.
Labor relations is becoming more diverse around the world because _________________________ play a much greater role in establishing employment conditions, most especially employee benefits outside the U.S.
O Government regulations
O Collective bargaining agreements
O Human resource management decisions
O Union policies and benefits
Answer: Human resource management decisions
Explanation: Administration of human capital is all about decision-making. This is not the activity that should be abandoned to opportunity or speculation to choose the best candidate for the accessible place.
The task of judgment-making in HR is difficult, and using the current technologies and recruiting tools, you will be able to take informed decisions based on an actual assessment of all variables.
Therefore, due to heavy scrutiny by human resource managers on the operations of the business the relations of employees and organisation are improving continuously and are becoming diverse.
Connecticut, Inc. uses the indirect method to prepare its statement of cash flows. Refer to the following portion of the comparative balance sheet:
Connecticut, Inc.
Comparative Balance Sheet
December 31, 2019 and 2018
2019 2018 Increase / (Decrease)
Cash $ 24,000 $ 25,000 $( 1,000 )
Accounts Receivable 34,000 37,000 (3,000)
Merchandise Inventory 53,000 25,000 28,000
Plant and Equipment 125,000 93,000 32,000
Accumulated Depreciation-Plant and Equipment (46,000) (42,000) (4,000)
Total Assets $ 190,000 $ 138,000 $ 52,000
Additional information provided by the company includes the following:
1. Equipment was purchased for $ 69,000 with cash.
2. Equipment with a cost of $ 37, 000 and accumulated depreciation of $ 7,000 was sold for $ 45,000.
Required :
1. What was the amount of net cash provided by (used for) investing activities?
Answer:
$24,000
Explanation:
Given that,
Equipment was purchased = $ 69,000 with cash.
Equipment with a cost = $ 37, 000
Accumulated depreciation = $ 7,000 was sold for $45,000
Net cash provided (used) by investing activities:
= Proceeds from sale of equipment - Equipment purchase for cash
= $ 45,000 - $69,000
= $24,000
Therefore, the amount of net cash provided by (used for) investing activities is $24,000.
A company manufactures hair dryers. It buys some of the components, but it makes the heating element, which it can produce at the rate of 860 per day. Hair dryers are assembled daily, 251 days a year, at a rate of 330 per day. Because of the disparity between the production and usage rates, the heating elements are periodically produced in batches of 2,300 units.
a. Approximately how many batches of heating elements are produced annually? (Round your answer to 2 decimal places.) Number of batches
b. If production on a batch begins when there is no inventory of heating elements on hand, how much inventory will be on hand 2 days later? Number of inventory
c.What is the average inventory of elements, assuming each production cycle begins when there are none on hand? (Do not round intermediate calculations. Round your answer to the nearest whole number.) Average inventory
d. The same equipment that is used to make the heating elements could also be used to make a component for another of the firm’s products. That job would require 3 days, including setup. Setup time for making a batch of the heating elements is a half day. Is there enough time to do this job between production of batches of heating elements?
i. No
ii. Yes
The company produces approximately 93.85 batches of heating elements annually, has an inventory of 1,060 units two days after production, and maintains an average inventory of 1,150 units. Furthermore, there is enough time to produce other products between batches of heating element production.
Explanation:To solve this problem, we first need to understand the company's production and consumption rates of the heating elements for their hair dryers.
a. The company produces elements at a rate of 860 per day and runs 251 days per year. Thus, they produce around 215,860 elements annually. As they produce elements in batches of 2,300, the number of batches produced annually will be 215,860 divided by 2,300, which is approximately 93.85. So, the company produces about 93.85 batches of heating elements annually.
b. Two days after the production of a batch, the company will have produced 2 * 860 = 1,720 elements but used 2 * 330 = 660, thus having an inventory of 1,060 units.
c. To calculate the average inventory, we take the sum of the maximum and minimum inventory (2,300 and 0, respectively) and divide by 2, leading to an average inventory of 1,150 units.
d. The time between production of batches of heating elements is the total quantity in a batch divided by the net increase per day (860-330). This equals 2,300/(860-330) approximately 4.8 days. Given that the other product takes 3 days to make, including setup, there is enough time to produce it between batches of heating elements.
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The correct answer is Yes. The company produces approximately 36.01 batches of heating elements annually. Inventory after 2 days will be 1,060 elements. The average inventory is 1,150 elements, and there is enough time to complete another job between production batches.
Let's break down the problem step-by-step:
a. Number of batches produced annually
First, calculate the total number of heating elements used annually:b. Inventory after 2 days
Two days of production at the rate of 860 elements/day:c. Average inventory
Each batch of 2,300 elements is used over approximately 6.97 days (2,300 elements ÷ 330 elements/day). The average inventory is given by the formula for the average of a linear function:d. Time for other job
The time available for other work is the time between the end of one batch and the start of the next batch, which is the total length of the usage period for a batch:Assembly department of Zahra Technologies had 200 units as work in process at the beginning of the month. These units were 45% complete. It has 300 units which are 25% complete at the end of the month. During the month, it completed and transferred 600 units. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production. Zahra uses weighted-average process-costing method. What is the number of equivalent units of work done during the month with regards to direct materials?
Answer:
700 units of work done.
Explanation:
Since all the direct materials are added at the beginning, we assume that the 200 beginning inventory was completed 100% in regards to direct materials and as such 600 - 200 = 400 units transferred were completed in respect to direct materials and 300 units in work in progress are also completed as 100% of direct materials.
So total equivalent units in respect to direct materials are 400 + 300 = 700 units of work done.
Hope that helps.
Final answer:
The number of equivalent units of work done for direct materials in the Assembly department of Zahra Technologies is 875 units for the month, calculated by adding the units completed, the beginning inventory units (since materials are added at the start), and the portion of the ending inventory that has been processed for direct materials.
Explanation:
The question seeks to determine the number of equivalent units of work done with regards to direct materials in the Assembly department of Zahra Technologies for the month, using the weighted-average process-costing method.
Since direct materials are added at the beginning of production, the equivalent units for materials will be the total number of units transferred out plus the units still in process at the end of the month. Thus, the calculation for equivalent units of direct materials is:
600 units transferred out are 100% complete with respect to direct materials.
200 units at the beginning were 100% complete since materials are added at the beginning.
For the 300 units at the end of the month, since they are 25% complete, only 300 units x 25% = 75 equivalent units of direct materials are needed for these.
Total equivalent units for direct materials would be 600 + 200 + 75 = 875 units.
If overapplied or underapplied overhead is material, it should be disposed of by allocating it to: Select one: a. Cost of goods sold and finished goods inventory. b. Finished goods inventory and work in process inventory. c. work in process inventory, finished goods inventory, and cost of goods sold. d. work in process inventory. e. Raw materials inventory, work in process inventory, and finished goods inventory.
If overapplied or underapplied overhead is material, it should be disposed of by allocating it to Cost of goods sold and finished goods inventory.
Option A
Explanation:
Fixed Overhead expenses are allotted to on the basis of predetermined overhead rate to each unit. Sometimes overhead expenses estimated and actually incurred have differences.
If the actual overhead is more than overhead applied to production than it is called under applied overhead. When actual overhead is less than applied overhead than it is called over applied overhead.
Balance of difference of these overhead is debited or credited to Cost of goods sold of company.
Material overapplied or underapplied overhead should be allocated to work in process inventory, finished goods inventory, and cost of goods sold because it mirrors the course of overhead costs better in production.
Explanation:When an overhead cost is either overapplied or underapplied and is deemed to be material, it is generally appropriate to dispose of it by allocating it to: work in process inventory, finished goods inventory, and cost of goods sold. Hence the correct answer is option c: work in process inventory, finished goods inventory, and cost of goods sold. This reflects more accurately the stages that overhead costs are incurred during the manufacturing process, from work-in-progress to the finished product ready for sale. If the amounts are immaterial, they could be written off to cost of goods sold alone. Nevertheless, the method of allocation should always align with the company's accounting policy and the principle of materiality.
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