Answer:
A. $93,600
Explanation:
Data provided as per the question below:-
Face value = $90,000
Quoted price = 104
The computation of selling price is shown below:-
Selling Price = Face value × Quoted price ÷ 100
= $90,000 × 104 ÷ 100
= $90,000 × 1.04
= $93,600
Therefore for computing the selling price we simply applied the above formula.
The selling price of a bond is calculated by multiplying the face value by its quoted price and dividing by 100. In this case, a bond with a face value of $90,000 and a quoted price of 104 has a selling price of $93,600.
Explanation:The selling price of a bond is calculated by multiplying the face value of the bond by its quoted price, and then dividing by 100. The quoted price of bonds is usually expressed in terms of a percentage of the face value of the bond. So in this case, to find the selling price of a bond with a face value of $ 90,000 and a quoted price of 104, you simply multiply $90,000 by 104 then divide by 100.
Therefore, the selling price is calculated as follows: $(90,000 * 104) / 100 = $93,600
This means that a bond with a face value of $90,000 and a quoted price of 104 has a selling price of $93,600, rounded to the nearest dollar. So the correct answer is A. $ 93600.
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Kieu Corporation constructs a new warehouse. It pays $100,000 for materials and $70,000 to the general contractor. Architectural fees total $18,000. The corporation pays $13,000 in interest on its loan to finance construction. The land costs $15,000, and the real estate taxes paid on the land during construction amount to $1,000. What is Kieu's initial basis in the warehouse?
Answer:
$204,000
Explanation:
Initial cost basis is the amount of cost capitalized in the purchase of an asset for tax and other purposes.It consists of purchase price , development fees , professional fees estate taxes and others.
Please note that finance cost is not included as it is recorded as expenses over the life of the loan.
Workings
Materials - $100,000
Contractor fees - $70,000
Architectural fees - $ 18,000
Cost of land $ 15,000
Estate taxes - $1000
Total cost =$204,000
Corporation sold laser pointers for $ 14 each in 2017. Its budgeted selling price was $ 13 per unit. Other information related to its performance is given below: Actual Budgeted Units made and sold 27,300 27,600 Variable costs $100,000 $5 per unit Fixed costs $52,000 $48,000 Calculate Zoar's static budget variance for (a) revenues, (b) variable costs, (c) fixed costs, and (d) operating income. Begin by determining all of the actual amounts, then the static budget amounts, and finally the static-budget variances. Label each variance as favorable (F) or unfavorable (U)
Answer:
Static budget variance
a. revenue variance = budgeted revenue - actual revenue
= ( $13*27,600 ) - ( $14*27,300)
= $358,800 - $382,200
= $23,400 F
b Variable cost variance = ($5* 27,600) - $100,000
= $138,000 - $100,000
= $38,000 F
c. fixed cost variance = $48,000 - $52,000
= $4,000 U
d. operating income = $23,400 F + $38,000 F + $4,000 U
= $57,400 F
Explanation:
On December 31, 2020, Oriole Company granted some of its executives options to purchase 153000 shares of the company's $50 par common stock at an option price of $60 per share. The Black-Scholes option pricing model determines total compensation expense to be $2940000. The options become exercisable on January 1, 2021, and represent compensation for executives' past and future services over a three-year period beginning January 1, 2021. What is the impact on Oriole's total stockholders' equity for the year ended December 31, 2020, as a result of this transaction under the fair value method?
Answer:
$2,940,000/3 = $980,000
Explanation:
First, the question is to calculate the impct of the transactions on Oriole's total stockholders' equity for the year ended December 31st 2020.
Since the fair value method is mentioned, we answer as follows
What is the fair value of the Option = $2,940,000
It is important to note that under this fair value method, over the life of an option, the total compensation for that option is to be recognized as an expense.
Based on this criteria, the amount recognized for the December 31, 2020
= Fair value of option /3
= $2,940,000/3 = $980,000
Grouper Corporation’s management wants to maintain a minimum monthly cash balance of $9,120. At the beginning of September, the cash balance is $13,988, expected cash receipts for September are $110,808, and cash disbursements are expected to be $131,100. How much cash, if any, must Grouper borrow to maintain the desired minimum monthly balance? Determine your answer by using the basic form of the cash budget. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Answer:
The answer is attached;
Explanation:
The loan will be required.
Randall Company manufactures chocolate bars. The following were among Randall's manufacturing costs during the current year: Wages Machine operators $ 300,000 Selling and Administrative personnel $ 75,000 Materials used Lubricant for oiling machinery $ 25,000 Cocoa, sugar, and other raw materials $ 225,000 Packaging materials $ 190,000 Randall's direct materials amounted to:
Answer:
$225,000
Explanation:
Direct materials:
Cocoa, sugar, and other raw materials $225,000
Therefore Randall's direct materials amounted to: $225,000 because the Direct materials costs include the costs of materials that can be easily and conveniently traced to products, such as the $225,000 of cocoa, sugar, and other raw materials.
While The lubricant for oiling machinery in the amount of $25,000 and the packaging materials in the amount of $190,000 would be classified as indirect materials because they are not easily and conveniently traced to products.
Answer:
$225,000 is the direct material cost
Explanation:
Direct cost is the cost of materials used in the production that is traceable to finished product such the flour used in making a loaf of bread,the cost of the flour is a direct material cost as the flour is traceable to the finished product-bread.
In this instance, the cocoa ,sugar and other raw materials are easily traced to the finished product- chocolate bar,hence the cost of cocoa,sugar and other materials,$225,000 is the direct material cost
Analysts predicted earnings per share (EPS) for your company to be $0.XX at the close of 20XX. How does this compare to actual EPS for 20XX? If actual EPS is higher than the analysts’ prediction, what factors contributed to the success? If actual EPS is lower than the prediction, how will you explain the shortfall to your investors? Is there anything you did or could have done to meet/exceed the prediction?
Answer and Explanation:
Earnings per Share, EPS = Net Income dividend of preferred stock
Number of stock outstanding
EPS depends on the earnings and its dilution due to increase in preferred stock also it depends on the net income earned
When EPS is higher than analyst prediction,
this may be due to increase in the net income
or
payback of common stock or preferred stock
thereby leading to reduction in the number of stock outstanding
When EPS is lower than analyst prediction
this would be due to reduction in the net income
or
increase of stock or preferred stock due to fresh issue
Insurance against issues that could lead to reduction on income and inrease in the activities that will lead to net income increase can help meet or surpass analyst prediction
Exercise 19-9 Income statement under absorption costing and variable costing LO P1, P2 IThe following information applies to the questions displayed below.J Cool Sky reports the following costing data on its product for its first year of operations. During this first year, the company produced 44,000 units and sold 36.000 units at a price of $140 per unit. Manufacturing costs 60 Direct materials per unit Direct labor per unit 22 Variable overhead per unit $528,000 Fixed overhead for the year Selling and administrative cost Variable selling and administrative cost per unit 105,000 Fixed selling and administrative cost per year
Answer:
When you are calculating variable costing, COGS only includes variable costs. All fixed costs are included as period costs at the end. Fixed costs are not carried forward either.
Income Statement (variable costing) - J Cool Sky
total sales $140 x 36,000 units sold = $5,040,000
variable COGS ($3,240,000)
variable direct costs ($60 + $22) x 36,000 = ($2,952,000)
variable overhead ($8 x 36,000) ($288,000)
manufacturing margin $1,800,000
variable administrative and selling costs ($11 x 36,000) = ($396,000)
contribution margin $1,404,000
fixed costs ($633,000)
fixed overhead = ($528,000)
administrative and selling = ($105,000)
net income $771,000
In order to prepare the income statement using absorption costing, we must first determine COGS = [(total variable manufacturing costs + total fixed manufacturing costs) / total output] x units actually sold
COGS = {[($60 + $22 + $8) x 44,000] + $528,000} / 44,000] x 36,000 = [($3,960,000 + $528,000) / 44,000] x 36,000 = $102 x 36,000 = $3,672,000
Income Statement (absorption costing) - J Cool Sky
total sales $140 x 36,000 units sold = $5,040,000
COGS ($3,672,000)
gross profit $1,368,000
variable administrative and selling costs $11 x 36,000 = ($396,000)
fixed administrative and selling costs ($105,000)
net income $867,000
The difference between both accounting methods is that variable costing includes all fixed manufacturing costs during the period and the ending inventory is carried forward only at a lower cost since it only includes variable costs. Absorption costing calculates ending inventory using the total fixed costs, that is why COGS is lower.
A plant asset was purchased on January 1st for $50,000 with an estimated salvage value of $10,000 at the end of its useful life. The current year's Depreciation Expense is $5,000 calculated on the straight-line basis and the balance of the Accumulated Depreciation account at the end of the year is $20,000. The remaining useful life of the plant asset is ________ years.
Answer:
The remaining useful life of the plant asset is 4 years.
Explanation:
Under the straight line method of depreciation, the depreciation expense charged every year on the asset remains constant. The formula for depreciation expense per year under straight line method is,
Depreciation expense = (Cost - salvage value) / estimated useful life
Using the available figures, we calculate the estimated useful life of the plant asset o be,
5000 = (50000 - 10000) / estimated useful life
Estimated useful life = 40000 / 5000
Estimated useful life is = 8 years
The accumulated depreciation tells the total depreciation that has been charged on the asset.
The numbers of years for which depreciation has already been charged are = 20000 / 5000 = 4 years
The remaining useful life of the plant asset = 8 - 4 = 4 years
PB10-1 Determining Financial Effects of Transactions Affecting Current Liabilities with Evaluation of Effects on the Debt-to-Assets Ratio [LO 10-2, LO 10-5] Tiger Company completed the following transactions. The annual accounting period ends December 31. Jan. 3 Purchased merchandise on account at a cost of $24,000. (Assume a perpetual inventory system.) Jan. 27 Paid for the January 3 purchase. Apr. 1 Received $80,000 from Atlantic Bank after signing a 12-month, 5 percent promissory note. June 13 Purchased merchandise on account at a cost of $8,000. July 25 Paid for the June 13 purchase. July 31 Rented out a small office in a building owned by Tiger Company and collected eight months’ rent in advance amounting to $8,000. Dec. 31 Determined wages of $12,000 were earned but not yet paid on December 31 (Ignore payroll taxes). Dec. 31 Adjusted the accounts at year-end, relating to interest. Dec. 31 Adjusted the accounts at year-end, relating to rent. Required: For each listed transaction and related adjusting entry, indicate the accounts, amounts, and effects on the accounting equation. For each item, indicate whether the debt-to-assets ratio is increased or decreased or there is no change. (Assume Tiger Company’s debt-to-assets ratio is less than 1.0.)
Answer:
TIGER COMPANY
Jan 3 : Liabilities( Creditors) increase by $24,000
Asset( Inventory ) Increase by $24,000
debt - to asset ratio not affected
Jan 27: Asset (Cash ) will decrease by $24,000
Liabilities ( Creditors ) will decrease by $24,000
debt - to asset ratio not affected
April 1 : Liabilities will increasec by $80,000
Asset ( Cash) will increase by $80,000
debt - to asset ratio not be affected
June 13 : Liabilities ( Creditors) will increase by $8,000
Asset(Inventory) will increase by $8,000
debt - to asset ratio not be affected
July 25: Assee(Cash) will decrease by $8,000
Liabilities( Creditors) will decrease by $8,000
debt - to asset ratio not be affected
July 31: Cash( Asset) increase by $8,000
Liabilities( Deferred income ) will increase by $8,000
debt - to= asset ratio not be affected
Dec 31: Income will decrease by $12,000
Liabilities will decrease by $12,000
debt-to-asset ratio will be increased
Explanation:
) Suppose that monetary policymakers employ the Taylor rule to set the fed funds rate. Assume that the weights on both the inflation and output gaps are 0.5, the equilibrium real fed funds rate is 2%, the inflation rate target is 2%, and the output gap is 1%. Suppose half of Fed economists forecast inflation to be 3%, and half of Fed economists forecast inflation to be 5%. If the Fed uses the average of these two forecasts as its measure of inflation, then at what target should the fed funds rate be set according to the Taylor rule
Answer:
Case 1. Federal funds rate target is 9%
Case 2. Federal funds rate target is 9%
Explanation:
As we know that:
Federal funds rate target = Inflation rate + Equation real fed funds rate +
1/2 * Inflation Gap + 1/2 * (Output Gap)
Here
Equation real fed funds rate is 2%
Output Gap is 1%
Case 1. Inflation rate target is 3%
So
Inflation Gap = 3% - 2% = 1%
So by putting values, we have:
Federal funds rate target = 3% + 2% + 1/2 * (1%) + 1/2 * (1%)
= 6%
Case 2. Inflation rate target is 5%
So
Inflation Gap = 5% - 2% = 3%
So by putting values, we have:
Federal funds rate target = 5% + 2% + 1/2 * (3%) + 1/2 * (1%)
= 9%
Answer:
The Federal Reserve seeks to control inflation by influencing interest rates. When inflation is too high, the Federal Reserve typically raises interest rates to slow the economy and bring inflation down.
Explanation:
Calculating costs Kate is working for a consulting firm making $50,000 per year but considers starting her own consulting company. Kate has determined that to launch the business, she needs to invest $80,000 of her own funds. The annual cost of running the business will include $50,000 for the rent of the office space, $180,000 for employee wages, and $8,000 for materials and utilities. Kate plans to manage the business, which means that she will have to quit her current job. Suppose that the interest rate (or rate of return) on investments in the economy is 5%.
Kate's total implicit cost per year is_____ . Kate's total cost per year is______
Answer:
Implicit cost =$54,000
Total cost = $292,000.
Explanation:
The implicit cost is the sum of value of the next best alternative sacrificed in favour of a decision.
The implicit cost for Kate includes
The job salary to be lost = $50,000
Interests lost by not depositing the sum = (5%× 80,000)= $4,000
Implicit cost
= $50,000 +$4,000
=$54,000
Implicit cost =$54,000
Total cost
Total cost i the sum of implicit cost and accounting cost
Total cost = 50,000 + 180,000 +8000 + 54,000
Total cost = $292,000.
Flapjack Corporation had 7,680 actual direct labor hours at an actual rate of $12.45 per hour. Original production had been budgeted for 1,100 units, but only 960 units were actually produced. Labor standards were 7.2 hours per completed unit at a standard rate of $13.00 per hour. Round your answer to the nearest cent. The direct labor time variance is $4,208.64 unfavorable $4,208.64 favorable $9,984.00 unfavorable $9,984.00 favorable
Final answer:
To calculate the direct labor time variance, subtract the standard cost from the actual cost. The actual cost of $95,616 exceeds the standard cost of $89,856, resulting in an unfavorable labor time variance of $5,760.
Explanation:
The student's question refers to calculating the direct labor time variance in a manufacturing setting. This variance measures the difference between the actual labor hours worked at the actual rate and the standard labor hours expected to be worked at the standard rate for the number of units produced. To find out whether the variance is favorable or unfavorable, we'll start by computing the standard hours for actual production, which is 960 units multiplied by the standard rate of 7.2 hours per unit, resulting in 6912 standard hours. We'll then multiply these standard hours by the standard rate of $13.00 per hour to get the standard cost, which is $89,856.
The actual cost is the actual hours worked multiplied by the actual rate per hour. Therefore, 7680 actual hours at $12.45 per hour result in an actual cost of $95,616. The labor time variance is found by subtracting the standard cost from the actual cost. Since the actual cost is higher, the variance is unfavorable. Calculating the difference ($95,616 - $89,856) yields $5,760 as the unfavorable labor time variance.
Final answer:
The direct labor time variance for Flapjack Corporation is $5,760 unfavorable. This was calculated by comparing the standard labor cost for actual production, which was $89,856, against the actual labor cost incurred, totaling $95,616.
Explanation:
To calculate the direct labor time variance, we need to compare the standard labor cost for actual production to the actual labor cost incurred. The standard labor cost is determined based on the labor standards set for the production of units. In this case, Flapjack Corporation had a labor standard of 7.2 hours per unit at a standard rate of $13.00 per hour. The actual production was 960 units.
Step 1: Calculate standard labor hours for actual production.
Standard hours = Actual units produced × Standard hours per unit
Standard hours = 960 units × 7.2 hours/unit = 6,912 hours
Step 2: Calculate standard labor cost for actual production.
Standard cost = Standard hours × Standard rate per hour
Standard cost = 6,912 hours × $13.00/hour = $89,856
Step 3: Calculate actual labor cost incurred.
Actual cost = Actual hours × Actual rate per hour
Actual cost = 7,680 hours × $12.45/hour = $95,616
Step 4: Calculate direct labor time variance.
Labor time variance = Actual cost - Standard cost
Labor time variance = $95,616 - $89,856 = $5,760
The direct labor time variance is $5,760 unfavorable because the actual labor cost exceeded the standard labor cost.
Willkom Corporation buys 100% of Szabo Inc. on January 1, 2018, at a price in excess of the subsidiary’s fair market value. On that date, Willkom’s equipment (10 year life) has a book value of $600,000 but a fair market value of $800,000. Szabo has equipment (10 year life) with a book value of $400,000 but a fair market value of $600,000. Willkom uses the partial equity method to record its investment in Szabo. On December 31, 2020, Willkom has equipment with a book value of $420,000 but a fair market value of $660,000. Szabo has equipment with a book value of $280,000 buy a fair market value of $540,000. What is the consolidated balance for the equipment account as of December 31, 2020?
Answer:
The consolidated balance for the equipment account as of December 31, 2020 is $652,000.
Explanation:
the original price allocation = $660,000 - $420,000
= $24000
(240000/10years)*3 years = $72,000
consolidated equipment
= book value + other company book value + original purchase price allocation - amortization of allocation
= $420,000 + $280,000 + $24000 - $72,000
= $652,000
Therefore, The consolidated balance for the equipment account as of December 31, 2020 is $652,000.
A worker is assigned three tasks, A, B, and C, each having a duration of 10 days. One approach to completing these tasks would be to focus on one at a time, complete it, and then move to the second, followed by the third. One multitasking approach would call for dividing each task in half and rotating from one to the other so that the first halves of A, B, and C are completed before the second halves of A, B, and C are completed (always in this order). What is the difference in the average completion times for the multitasked activities when compared to the one at a time approach
Answer:
There is no difference in the average completion times for the multitasked activities when compared to the one at a time approach
Explanation:
Let's consider the first approach, which involves focusing on one task at a time, complete it, and then move to the second, followed by the third. It will the worker 10 days to complete task A, another 10 days for task B and thereafter 10 days for C. So total number of days required to complete all three tasks using first approach is 10 days + 10 days + 10 days = 30 days
Let's consider the second approach which is the multitasking approach. The first task, one half of A takes 10 days/2 = 5 days, 5 days is spent next on Task B and then another 5 days on Task C. Therefore, during first 15 days one half of each task (A, B, and C) is completed. The next 15 days, following the same order of work the remaining half of each task is completed.
Total number of days to complete each tasks = Duration of completion of first half of each task + Duration of completion of the remaining second half of each task
Total number of days to complete each tasks = 15 days + 15 days = 30 days.
Therefore, the first approach and multitasking approach require the same number of days to complete each task. Therefore, there is no difference in the average completion times for the multitasked activities when compared to the one at a time approach
Final answer:
The difference in average completion times between the multitasking approach and focusing tasks one at a time is 5 days, with the multitasking approach leading to a longer average completion time of 25 days compared to 20 days for the sequential completion.
Explanation:
The scenario involves a worker assigned three tasks, A, B, and C, each with a duration of 10 days. To determine the difference in the average completion times when multitasking and focusing on tasks one at a time, we perform a simple calculation. Under the one-at-a-time approach, each task is completed sequentially, resulting in completion times of 10, 20, and 30 days for A, B, and C, respectively.
For the multitasking approach, the tasks are split in half and worked on in rotation. Thus, the first halves of A, B, and C would take 5, 10, and 15 days respectively, and the second halves would take an additional 5 days each, resulting in completion times of 20, 25, and 30 days for the full tasks of A, B, and C respectively.
To find the average completion time, you sum the completion times and divide by the number of tasks. The one-at-a-time approach has an average completion time of (10 + 20 + 30) / 3 = 20 days, while for multitasking it’s (20 + 25 + 30) / 3 = 25 days. Therefore, the difference in average completion time is 5 days, with multitasking taking longer.
In 2007, the economy slipped in a recession that many called the worst since the Great Depression. This caused people to experience a general decrease in their income levels. At the same time, there was an increase in the price of wheat used to make Ramen Noodles (an inferior good). Given these two effects, what would happen to the equilibrium price and quantity of Ramen Noodles
Answer:
an increase in equilibrium price and an indeterminate effect on equilibrium quantity.
Explanation:
An inferior good is a good whose demand increases when income falls and reduces when income rises.
If ramen is an inferior good, when income falls its demand would increase. This would lead to a rise in quantity and price.
An increase in the price of wheat would increase the cost of production of ramen. As a result, the supply of ramen would fall. Price would increase and supply would fall.
The combined effect would be an increase in equilibrium price but an indeterminate effect on equilibrium quantity.
I hope my answer helps you
Perine Company has 2,392 pounds of raw materials in its December 31, 2019, ending inventory. Required production for January and February of 2020 are 4,600 and 6,000 units, respectively. 2 pounds of raw materials are needed for each unit, and the estimated cost per pound is $9. Management desires an ending inventory equal to 26% of next month’s materials requirements.
Prepare the direct materials budget for January.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Beginning inventory= 2,392 pounds
Production:
January= 4,600 units
February= 6,000 units
2 pounds of raw materials are needed for each unit
The estimated cost per pound= $9.
Management desires an ending inventory equal to 26% of next month’s materials requirements.
To calculate the purchases for January, we need to use the following formula:
Purchases= sales + desired ending inventory - beginning inventory
First, we will determine the pounds needed for January.
Budgeted Direct material:
Production= 4,600*2= 9,200 pounds
Ending inventory= (6,000*2)*0.26= 3,120 punds
Beginning inventory= (2,392) pounds
Total= 9,928 pounds
Total direct material cost= 9,928*9= $89,352
John owns a corporate bond with a coupon rate of 8% that matures in 10 years. Bill owns a corporate bond with a coupon rate of 12% that matures in 25 years. If interest rates go down, then:
A.the value of John's bond will decrease and the value of Bill's bond will increase.
B.the value of both bonds will increase.
C.the value of Bill's bond will decrease more than the value of John's bond due to the longer time to maturity.
D.the value of both bonds will remain the same because they were both purchased in an earlier time period before the interest rate changed.
Answer:
B.the value of both bonds will increase.
Explanation:
Bonds are known to be a financial security that shows or holds a promise to repay a fixed amount of funds.
There is an oppose relationship in terms of bond and an increase in thet interest rates, will lead to drop in the value of bonds and whenor if interest rates drops, there will be a corresponding increase in the bonds value. since both the bonds owned by John, he would still receive fixed interest payments which will be higher than the interest amount available on new bonds which are issued at lower interest rates and the value of both of these bonds would increase automatically
Final answer:
Option B. The value of both John's and Bill's bonds will increase when interest rates fall, with Bill's bond increasing more due to its longer time to maturity and higher coupon rate.
Explanation:
When interest rates go down, the value of existing bonds with fixed coupon rates quite often increase. This is because the fixed interest payments of the bond become more attractive compared to the new bonds being issued at the now lower interest rates. Thus, the correct answer is B: the value of both bonds will increase.
The bond that Bill owns, with a higher coupon rate and longer time to maturity, will be affected even more due to its longer duration. This longer duration means the bond's payments are locked in for a greater period of time at a higher rate than what's currently available, making it even more valuable if interest rates drop.
It should be noted that the value of a bond is inversely related to interest rates. However, once the bond is in the investor's hands, the actual dollar amounts paid by these bonds do not change. Therefore, the change in market value does not affect existing bondholders unless they intend to sell the bond before maturity.
The records of Norton, Inc. show the following for July: Standard labor-hours allowed per unit of output 2.0 Standard variable overhead rate per standard direct labor-hour $ 35 Good units produced 60,000 Actual direct labor-hours worked 121,000 Actual total direct labor $ 5,551,000 Direct labor efficiency variance $ 45,000 U Actual variable overhead $ 4,041,000 Required: Compute the direct labor and variable overhead price and efficiency variances.
Answer:
(a) $106,000 Unfavorable
(b) $194,000 Favorable
(c) $35,000 Unfavorable
Explanation:
Given that,
Standard labor-hours allowed per unit of output = 2.0
Standard variable overhead rate per standard direct labor-hour = $ 35
Good units produced = 60,000
Actual direct labor-hours worked = 121,000
Actual total direct labor = $ 5,551,000
Direct labor efficiency variance = $45,000 U
Actual variable overhead = $4,041,000
Firstly, we need to calculate the standard rate. It is calculated by using the formula for Direct labor efficiency variance:
Direct labor efficiency variance = (Standard hour - Actual hour) × Standard rate
-$45,000 = (Standard hour* - Actual hour) × Standard rate
-$45,000 = (120,000 - 121,000) × Standard rate
($45,000 ÷ 1,000) = Standard rate
$45 = Standard rate
*Standard hours:
= Standard labor-hours allowed per unit of output × No. of units produced
= 2 × 60,000
= 120,000
(a) The direct labor rate variance is calculated by the following formula:
= (Standard rate × Actual direct labor-hours worked) - Actual total direct labor
= ($45 × 121,000) - $ 5,551,000
= $5,445,000 - $5,551,000
= $106,000 Unfavorable
(b) The variable overhead rate variance is calculated by the formula below:
= (Standard variable overhead rate per standard direct labor-hour × Actual direct labor-hours worked) - Actual variable overhead
= ($35 × 121,000) - $4,041,000
= $4,235,000 - $4,041,000
= $194,000 Favorable
(c) The Variable overhead efficiency variance is calculated by the following formula:
= (Standard hours - Actual direct labor-hours worked) × Standard Variable Overhead rate per hour
= (120,000 - 121,000) × $35
= $35,000 Unfavorable
Berry Co. produces a variety of scissors and other cutting instruments at its Rome manufacturing plant. The plant is highly automated and uses an activity-based costing system to allocate overhead costs to its various product lines. The company expects to produce 24,000 total units during the current period. The costs and cost drivers associated with four activity cost pools are given below:
ACTIVITIES: UNIT BATCH PRODUCT FACILITY
LEVEL LEVEL LEVEL LEVEL
Cost $70,000 ? $23,000 $240,000
Cost Driver 5,000 labor hrs 120 set ups % of use 30,000 units
Production of 2,000 units of a pipe-cutting tool required 600 labor hours, 16 setups, and consumed 35 % of the product sustaining activities and resulted in an overhead allocation of $34,850. What amount of batch-level overhead costs was expected during the period? (Do not round intermediate calculations.)
a. $2,400
b. $18,000
c. $32,450
d. None of these answers is correct.
Answer:
Explanation:
the solution to the problem is shown in the file attached below
The amount of batch-level overhead costs expected by Berry Co is $138,000.
Data and Calculations:
Expected production output = 24,000 units
ACTIVITIES: UNIT BATCH PRODUCT FACILITY
LEVEL LEVEL LEVEL LEVEL
Cost $70,000 ? $23,000 $240,000
Cost Driver 5,000 labor hrs 120 set ups % of use 30,000 units
Usage for 2,000 units
Actual use 600 labor hrs 16 setups 35% 2,000 units
Total overhead allocated for 2,000 units = $34,850
Overhead for 2,000 units:
Unit level overhead = $8,400 ($70,000/5,000 x 600)
Product-level overhead = $8,050 ($23,000 x 35%)
Total overhead allocated = $34,850
Batch-level overhead for 2,000 units = $18,400 ($34,850 - $8,400 - $8,050)
Thus, the amount of batch-level overhead costs expected by Berry Co is $138,000 ($18,400/16 x 120).
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Huffington Company uses a plantwide overhead rate to apply overhead. The predetermined overhead rate is based on machine hours. At the beginning of the year, the company made the following estimates: direct labor hours of 16,000, direct labor cost of $200,000, machine hours of 5,000, and total overhead costs of $25,000. On a per machine hour basis, the company's plantwide overhead rate is:__________
Answer:
The company's plantwide overhead rate on a per machine hour basis is $5 per hour.
Explanation:
Acording to the data, we have the following:
Direct Labour Cost=$200,000
Direct Labour Hours= 16,000
Total Overhead Cost= $25,000
Machine Hours= 5,000
Therefore, to calcuate the company's plantwide overhead rate on a per machine hour basis, we use the following formula:
Company's plantwide overhead rate= Total Overhead/ Machine hours
= $ 25,000 / 5000 hours
=$5 per hour
Final answer:
The company's plantwide overhead rate is calculated as $25,000 divided by 5,000 machine hours, resulting in $5 per machine hour.
Explanation:
To calculate the plantwide overhead rate based on machine hours, we use the formula:
Plantwide Overhead Rate = Total Overhead Costs / Total Machine HoursGiven that the total overhead costs are $25,000 and the total machine hours are 5,000, we can calculate the rate as follows:
Plantwide Overhead Rate = $25,000 / 5,000 = $5 per machine hour.Example Calculation:
If a job requires 100 machine hours, the overhead applied to the job would be 100 hours * $5/machine hour = $500.Initiating structure describes the following leadership behavior:
A. A leader who is task-oriented and directs subordinates' work
B. A leader who is sensitive to subordinates and respects their ideas, and feelings
C. A leader who seeks input from subordinates regarding important decisions
D. A leader who listens carefully to problems.
Answer:
The correct answer is A. A leader who is task-oriented and directs subordinates' work .
Explanation:
The starting structure: Refers to the measure by which the leader can define and structure his role and those of his subordinates, in the pursuit of goal achievement. It includes behavior that tries to organize work, work relationships, and goals.
Extensive research, based on these definitions, shows that leaders with high rates of starting structure and consideration (a "high - high" leader) tend to achieve high performance and subordinate satisfaction, more often than those who rate low either in consideration, starting structure or in both dimensions. It does not always result in positive consequences to high rates of truancy and turnover, as well as low levels of job satisfaction for workers performing routine tasks. In conclusion, the Ohio State studies emerged that "high - high style" generally produced positive results.
Initiating structure is a type of leadership behavior characterized by a leader who is task-oriented and directs the work of their subordinates. This approach can lead to high productivity levels.
Explanation:Initiating structure is a type of leadership behavior characterized by a leader who is task-oriented and directs the work of their subordinates. It is related to how a leader organizes and defines relationships within the group, and how they establish clear patterns of organization, channels of communication, and procedures. In this case, Option A is correct: 'A leader who is task-oriented and directs subordinates' work'. This approach can lead to high productivity levels and shows that the leader is actively involved in the work process.
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7. Fast Pizza hires college students who drive their own cars to deliver pizzas to customers. Fast Pizza is concerned that the company may be liable for damages caused by company employees while they are driving their cars on company business. Identify a liability coverage form that Fast Pizza could purchase to deal with this exposure.
Answer:
Business auto insurance
Explanation:
Liability coverage is a type of insurance cover that protects the purchaser from liabilities from lawsuits and other similar claims.
The purchaser is protected when the claim comes under what the liability insurance covers.
In this case FasbPizza can use vicarious liability.
Business auto insurance cover is used to cover a company for use of cars, trucks, and other vehicles in the course of carrying out its business. It covers both liability and damage incurred.
Coverage is for cars owned by business, leased, and owned by employees but used for company business
Structural unemployment Multiple Choice is also known as frictional unemployment. is the main component of cyclical unemployment. is said to occur when people are waiting to be called back to previous jobs. may involve a locational mismatch between unemployed workers and job openings.
Answer:
may involve a locational mismatch between unemployed workers and job openings
Explanation:
Structural unemployemt refers to unemployment resulting out of structural changes of the economy such as technological changes which change the dynamics of how work is performed.
This represents a mismatch between the kind of skills workers possess and the skills the economy demands and requires.
Such unemployment is also attributable to a situation wherein, in a particular region, jobs are available but the unemployed workers live too far away from such regions. This is referred to as locational mismatch, one of the causes behind structural unemployment.
In July, one of the processing departments at Okamura Corporation had beginning work in process inventory of $23,000 and ending work in process inventory of $28,000. During the month, the cost of units transferred out from the department was $158,000. In the department's cost reconciliation report for July, the total cost to be accounted for under the weighted-average method would be:
Answer:
$186,000
Explanation:
Costs to be accounted for as follows:
Cost of ending work in process inventory $ 28,000
Add Cost of units transferred out $158,000
Total cost accounted for $186,000
Therefore the total cost to be accounted for under the weighted-average method would be: $186,000
On January 1, 2021, David Mest Communications granted restricted stock units (RSUS) representing 30 million of its $1 par common shares to executives, subject to forfeiture if employment is terminated within three years. After the recipients of the RSUS satisfy the vesting requirement, the company will distribute the shares. The common shares had a market price of $18 per share on the grant date. At the date of grant, Mest anticipated that 6% of the recipients would leave the firm prior to vesting. On January 1, 2022, 5% of the RSUs are forfeited due to executive turnover. Mest chooses the option to account for forfeitures when they actually occur. Required: 1. to 3. Prepare the appropriate journal entries to record compensation expense on December 31, 2021, December 31, 2022, and December 31, 2023.
Answer:
Compensation expense for 2021 = $120 million
Compensation expense for 2022 = $108 million
Compensation expense for 2023 = $114 million
Explanation:
Check the picture attached for the calculation
Answer:
Explanation:
Explanation
1.
At January 1, 2021, the estimated value of the award is:
$ 12 estimated fair value per share
× 30 million RSUs granted
= $ 360 million total compensation
Compensation expense ($360 million ÷ 3 years) = $120 million
2.
We adjust the cumulative amount of compensation expense recorded to date in the year a forfeiture occurs.
2022
Compensation expense ([$360 − (5% × $360) × 2/3] − $120) = $108 million
3.
2023
Compensation expense ([$360 − (5% × $360) × 3/3] − $120 − $108) = $114 million
g A. Cutting the firm's dividend to increase investment will raise the stock price if, and only if, the return of new investments is higher than the cost of capital. B. We cannot use the constant dividend growth model to value the stock of a firm with rapid or changing growth. C. Total return equals earnings multiplied by the dividend payout rate. D. As firms mature, their earnings exceed their investment needs and they begin to pay dividends.
Answer:
C. Total return equals earnings multiplied by the dividend payout rate.
Stefan Ceramics is in the business of selling ceramic vases. It has two departments, molding and finishing. Molding department purchases tungsten carbide and produces ceramic vases out of it. Ceramic Vases are then transferred to finishing department, which designs it as per the requirement of the customers. During the month of July, molding department purchased 720 kgs of tungsten carbide at $280 per kg. It started manufacture of 4,200 vases and completed and transferred 3,800 vases during the month. It has 400 vases in the process at the end of the month. It incurred direct labor charges of $1,500 and other manufacturing costs of $1,300, which included electricity costs of $300. Stefan had no inventory of tungsten carbide at the end of the month. It also had no beginning inventory of vases. The ending inventory was 50% complete in respect of conversion costs. Which of the following journal entry would record the tungsten carbide purchased and used in production during July?
Answer:
The following entries would be made.
Stefan Ceramics
Sr. No Particulars Debit credit
1 Merchandise Inventory 291600
Accounts Payable/ Cash 291600
For purchase of 720 kgs of tungsten carbide at $280 per kg (720*280=291600)
Accounts Payable or cash depending on whether material was purchased for cash or through accounts payable( creditors).
2 Work In Process 291600 Dr
Merchandise Inventory 291600 Cr
For use of 720 kgs of tungsten carbide . As there is no ending inventory the whole of the material is charged to production.
Bill operates a proprietorship using the cash method of accounting, and this year he received the following: $170 in cash from a customer for services rendered this year a promise from a customer to pay $186 for services rendered this year tickets to a football game worth $215 as payment for services performed last year a check for $184 for services rendered this year that Bill forgot to cash How much income should Bill realize on Schedule C
Answer:
$569
Explanation:
Cash from a customer for services rendered $170
Tickets to a football game worth $215
Check for services rendered $184
Total $569
Therefore Bill should realized income of $569 on Schedule C because Income is realized as property is received but the promise to pay is not property (unless accompanied by a note receivable).
Borel Inc., a calendar year company, purchased on June 29, 2019 a tractor trailer for transporting racehorses. The cost of the trailer was $200,000 and is estimated to have a useful life of five years and salvage value is to be ignored. What would be the depreciation expense during the entire useful life of the asset
Answer:
In the first year 2019, the depreciation expense would be $20,000.
From 2020 to 2023, the depreciation expense would be $40,000 and then $20,000 in 2024.
Explanation:
Depreciation is the systematic allocation of the cost of an asset to the income statement over the estimated useful life of that asset.
It is determined as the depreciable value of the asset over the estimated useful life of the asset where the depreciable value is the difference between the cost and salvage value of the asset
Mathematically,
Depreciation = (Cost - Salvage value)/Estimated useful life
Annual depreciation
= $200,000/5
= $40,000
In the first year 2019, the depreciation expense would be
= 1/2 * $40,000
= $20,000
From 2020 to 2023, the depreciation expense would be $40,000 and then $20,000 in 2024
Answer:
The depreciation expense during the entire useful life of the asset is simply the same as the cost of the asset, which is $200,000. This is because there was no salvage value. The following journals apply:
Debit Depreciation expense $200,000
Credit Accumulated depreciation $200,000
(To record accumulated depreciation for the entire life of the asset)
Explanation:
There are varying methods of calculating depreciation expense like straight-line, double-declining or the unit-of-production method. The most commonly used is the straight-line method. Under this method, depreciation is an allocation of the cost of an asset over its estimated useful life and it is expressed with this formula: (cost - residual value) / No of years = ($200,000 - 0) / 5 years = $40,000 yearly depreciation expense.
Accumulated depreciation for 5 years is $40,000 x 5 years $200,000.
So, the net book value (NBV) of the asset (expressed as Cost - Accumulated depreciation) is $200,000 - $200,000 = $0.
A local farm market buys fresh fruits and vegetables from local farmers. It buys peaches from one farmer at a cost of $1.00 per pound and sells them for $2.00 per pound. The demand for peaches during the season is normally distributed with a mean of 40 pounds per day and a daily standard deviation of 6 pounds. At the end of each business day, any unsold peaches are purchased by local restaurants for $0.40 per pound (in U.S. dollars): Enter your answers to one decimal place. Determine the service level. The service level is Number %. What is the optimal stocking level for the service level deterimined in (a)
Answer:
1. The service level is 63%
2. 42 pounds
Explanation:
1. Cost Price of Peaches = $1.00 per pound
Selling Price of Peaches = $2.00 per pound
Cost of shortage = Selling Price of Peaches - Cost Price of Peaches = $2 - $1 = $1
Cost of overage = Cost Price of Peaches - salvage value = $1 - $0.4 = $0.6
Service level = Cost of shortage /(Cost of shortage + Cost of overage)
= $1/($1 + $0.6) = $1/$1.6 =0.625 = 62.5% ≈ 63%
The service level is 63%
2. The z value for this service level = 0.332
Mean = 40 pounds
Standard deviation = 6 pounds
Optimum stocking level = (Mean + z value x Standard deviation)
= 40 + 6 × 0.332 = 41.992 ≈ 42 pounds
The optimal stocking level for the service level deterimined in (a) is 42 pounds