A company is considering the following alternatives:
Revenues: Alternative 1 $240,000 & Alternative 2 $240,000
Variable costs: Alternative 1 $120,000 & Alternative 2 $140,000
Fixed costs: Alternative 1 $70,000 & Alternative 2 $70,000
Required:
1. Which of the following are relevant in choosing between the alternatives?
A) Revenues
B) Variable costs and fixed costs
C) variable costs
D) Fixed costs

Answers

Answer 1

Answer:

The answer is C.

Explanation:

Variable cost is a relevant cost. Variable cost varies with the output i.e the total number of units produced. For example in a perfect competitive market, for a firm to be able to operate its revenue/profit must cover variable costs. Also, its revenue is dependent on the number of units produced which is directly proportional to variable cost.

Fixed cost is fixed and it is not a relevant cost in making decision. It is a sunk cost. Whether a business produces or not, fixed cost will be incurred.


Related Questions

Consumers who use Yelp reviews to measure the tradeoff between quality and price of different restaurants are using what type of consumer decision rule? Multiple Choice noncompensatory multiattribute heuristic compensatory determinant

Answers

Answer:

Compensatory

Explanation:

Compensatory decision rule can be evaluated as when the consumer is evaluating alternatives and trades off one characteristics against another, such that good characteristics compensate for the bad ones.

There is tremendous opportunity in influencing consumers at the alternative evaluation and selection phase. This phase, along with research, is often the most time consuming in the decision making process.

Compensatory rule dictates that a consumer makes decision in terms of each relevant attribute and computes a weighted or summated score for each brand.

If the expected return on the market is​ 11% and the expected return of investing in Merck is​ 10.35%, then the riskminus−free rate must​ be: A. ​5.0% B. ​4.0% C. ​3.0% D. ​4.5%

Answers

Answer:

The answer is given below;

Explanation:

Ra=Rf+(Rm-Rf)*Ba

Rm=11%

Ra=10.35%

Ba=.9 it is assumed that beta is .9 for merck

Rf=?

By putting values in above formula we get

10.35%=Rf+(11%-Rf)*.9

10.35%=Rf+.9*11%-.9Rf

10.35%=.1Rf+.099

.1Rf=10.35%-9.9%

Rf=.45%/.1

Rf=4.5%

Early in 2018, the Excalibur Company began developing a new software package to be marketed. The project was completed in December 2018 at a cost of $14,000,000. Of this amount, $11,000,000 was spent before technological feasibility was established. Excalibur expects a useful life of five years for the new product with total revenues of $15,000,000. During 2019, revenue of $6,000,000 was recognized. Required: 1. Prepare a journal entry to record the 2018 development costs. 2. Calculate the required amortization for 2019. 3. At what amount should the computer software costs be reported in the December 31, 2019, balance sheet

Answers

Answer:

The answer is given below;

Explanation:

1.Software Package            Dr.$3,000,000

Project expenses             Cr.$3,000,000

2.Amortization 3,000,000/5   $600,000

3. Software Package be reported in balance sheet(3,000,000-600,000)= $2,400,000

The $11,000,000 will be charged out as research cost and will be reported in Profit and loss account because after this amount technological feasibility was established that asset will yield returns for the business and can be used for the business. The remaining amount $3,000,000 will be reported as development cost.

When we compare the factors of production in wealthy and poor nations, we find: A. poor nations have plenty of land and knowledge, but very little labor.B. poor and wealthy nations (both) have an abundance of knowledge, it is the land that varies, with rich nations always having more.C.wealthy nations have knowledge and entrepreneurial opportunities, while poor nations are often lacking in these areas.D. wealthy nations have land and labor, while poor nations have capital and entrepreneurship

Answers

Answer:

C.wealthy nations have knowledge and entrepreneurial opportunities, while poor nations are often lacking in these areas

Explanation:

Factors of production includes:

1. Land - land includes all natural resources

2. Capital - includes machinery, tools used in the production of goods and services

3. Labour - includes all human effort expended in the production of goods and services

4. Entrepreneurship - coordinates all factors of production.

Poor countries have high levels of illiteracy, so they don't have an abundance of knowledge. Poor countries are usually overpopulated, so they usually have high Quanitity of labour.

On the other hand, rich countries have high literacy levels, so, they have an abundance of knowledge.

I hope my answer helps you

Wealthy nations tend to have access to advanced knowledge and entrepreneurial opportunities, utilizing the latest production technologies and enjoying robust education and infrastructure. Poor nations often lack these resources. The concept of comparative advantage shows that wealthy nations are usually capital-rich relative to their labor force, affecting their economic performance.

When looking at the factors of production in wealthy and poor nations, a significant difference lies in access to knowledge and entrepreneurial opportunities. Wealthy nations typically have access to advanced production technologies and state-of-the-art machinery, as well as sophisticated education systems and infrastructure. This provides them with a technology frontier where they use the most advanced production techniques available. In contrast, poor nations often lack these resources, and their factories may not use modern machinery or sophisticated production techniques, which are crucial for productivity and economic growth.

Additionally, the concept of comparative advantage and factor endowments suggests that wealthy countries, like the United States, are often well endowed with physical capital relative to their labor force. In contrast, many less developed countries have larger labor forces with less physical capital. This contributes to the differences in economic performance, as rich countries can produce capital-intensive goods more efficiently, while poorer countries might specialize in labor-intensive goods.

The disparity in capital availability also means that wealthy nations, surprisingly, may still attract investment despite poorer nations having a higher return on investment potential, due to other inputs such as human capital, social infrastructure, and natural resources that influence economic outcomes.

Shore Co. sells two products, kayaks and motors. Last year, Shore sold 12,600 units of kayaks and 23,400 units of motors. Related data are as follows: Product Unit Selling Price Unit Variable Cost Unit Contribution Margin Kayaks $120 $80 $40 Motors 80 60 20 Assuming that last year's fixed costs totaled $910,035, what was Shore Co.'s break-even point in units

Answers

Answer:

Break-even points in  units is  33,705.00  

Explanation:

Break-even point in units=fixed costs/weighted average selling price-weighted average variable cost

Kayaks       12,600

Motors        23,400

total             36,000

kayaks  sales mix=12,600/36,000=0.35

Motors sales mix  =23,400/36,000=0.65

weighted average selling price=$120*0.35+$80*0.65

                                                   =$42+$52

                                                    =$94

weighted average variable cost=$80*0.35+$60*0.65

                                                     =$28+$39

                                                     =$67

fixed costs is $910,035

break-even points in units=$910,035/($94-$67)

                                           = 33,705.00  

The mix of both Kayaks and Motors that would gives no profit no loss is  33,705.00  

The break-even point calculation requires the overall contribution margin per unit, which is derived by subtracting unit variable cost from unit selling price. For Shore Co., the calculation requires the sales mix of kayaks and motors, which is not provided. Using the given examples, we illustrate how to calculate the break-even point with a fictitious firm's data, highlighting the relevance of knowing both average variable cost and average fixed cost.

Break-Even Point Calculation

To calculate the break-even point in units for Shore Co., we need to determine the overall contribution margin per unit and divide the total fixed costs by that amount. However, since Shore Co. sells two different products, we need to work with a weighted average contribution margin per unit. This approach requires knowing the proportion in which the two products are sold, which isn't provided in the question. In order to proceed with the information given, we would need to make assumptions or have additional information about the sales mix.

Under the simplified scenario with the provided reference data, the formula to calculate the break-even point in units is:

Total Fixed Costs / (Total Revenue - Total Variable Costs) per unit

With the provided example:

The firm's quantity is 1,000 unitsTotal fixed cost is $1,200Total cost is $4,000Total variable cost is $2,800The break-even price point is $4.00The short-run shutdown price point is $2.80

In this scenario, the average variable cost is $2.80, and the average fixed cost is $1.20 (calculated by dividing the total fixed costs by the number of units). The break-even point in this case would be 300 units, calculated as follows: $1,200 total fixed costs / ($4.00 selling price - $2.80 variable cost per unit).

Suppose that a well-respected study published in Child Psychology Today finds that a very high proportion of children raised by stay-at-home fathers are accepted to Harvard University. If a large number of previously working fathers quit their jobs and become stay-at-home dads, which of the following will occur, all else equal? (i) The unemployment rate will decrease. (ii) The size of the labor force will decrease. (iii) The number of unemployed people will increase. (iv) The unemployment rate will increase.

Answers

Answer:

(ii) and (iv) only

(ii) The size of the labor force will decrease.

(iv)The unemployment rate will increase.

Final answer:

If many fathers become stay-at-home dads, the size of the labor force will decrease because these men are not engaged in paid work. The unemployment rate and the number of unemployed people will not increase because these men are not searching for work, but have chosen to be out of the workforce.

Explanation:

If a large number of fathers leave their jobs to become stay-at-home dads, multiple impacts could happen, all else being equal. Firstly, the size of the labor force would decrease as these men are choosing not to engage in paid work. Secondly, the number of unemployed people would not necessarily increase as they aren't searching for work; instead, they have opted out of the workforce. As these men are not technically unemployed, but out of the workforce, they do not contribute to the unemployment rate, and hence it's incorrect to state that the unemployment rate would increase.

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E16 13B (L0 3) (Accounting for Restricted Stock) Holt Company issues 10,000 shares of restricted stock to its new CEO, on January 1, 2020. The stock has a fair value of $260,000 on this date. The service period related to this restricted stock is 5 years. Vesting occurs if the CEO stays with the company for 5 years. The par value of the stock is $1. At December 31, 2021, the fair value of the stock is $180,000.Instructions(a)Prepare the journal entries to record the restricted stock on January 1, 2020 (the date of grant) and December 31, 2021.(b)On February 22, 2022, the CEO leaves the company. Prepare the journal entry (if any) to account for this forfeiture.

Answers

Answer and Explanation:

The journal entries are shown below:

a. Unearned compensation $260,000  

             To Common stock  $10,000 (10,000 shares × $1)

              To Paid in capital in excess of par - common stock $250,000

(Being the unearned compensation is recorded)

It increased the common stock and the remaining balance is transferred to the paid in capital so these account are credited while on the other hand the contra equity is decreased so unearned compensation is debited

Compensation expenses $52,000 ($260,000 ÷ 5 years)

              To      Unearned compensation  $52,000

(being the compensation expense is recorded)

Since there is a compensation expense so the expense account is debited as it increased the expenses while on the other hand we credited the unearned compensation

b. Common stock 10,000

Paid in capital in excess of par - common stock $250,000  

               To Compensation expenses  $104,000  ($52,000 × 2 years)

               To Unearned compensation  $156,000

(Being the forfeiture is recorded)

This entry reflects the reversing of the entry with related to the common stock, paid in capital, and compensation expense

Merger Co. has 10 employees, each of whom earns $1,950 per month and has been employed since January 1. FICA Social Security taxes are 6.2% of the first $128,400 paid to each employee, and FICA Medicare taxes are 1.45% of gross pay. FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,000 paid to each employee. Prepare the March 31 journal entry to record the March payroll taxes expenses.

Answers

Answer: Please refer to Explanation

Explanation:

March 31

DR Payroll Taxes Expenses

$2,661.75

CR FICA Social Security taxes (6.2% * 1,950 *10) $1,209

CR FICA Medicare taxes (1.45% *1,950 * 10) $282.75

CR FUTA taxes (0.6% * 1,950 * 10) $117

CR SUTA taxes ( 5.4% * 1,950 * 10) $1,053

(To record Employer Payroll Taxes for month of March)

If you need any clarification do react or comment.

Final answer:

The total expenditure for the company's payroll taxes for the month of March would be a total of $5,691.75, consisting of $1,209 for FICA Social Security, $282.75 for FICA Medicare, $420 for FUTA and $3780 for SUTA.

Explanation:

To solve this, you would need to calculate the FICA Social Security taxes, FICA Medicare taxes, FUTA taxes and SUTA taxes for each of the 10 employees at Merger Co. for the month of March.

For the FICA Social Security taxes, since each employee earns $1,950 per month and the rate is 6.2% of the pay, each employee would pay $1,950 * 6.2% = $120.90. Since there are 10 employees, the total for the company would be $120.90 * 10 = $1,209. The FICA Medicare taxes would be calculated similarly, using the rate of 1.45%, which gives $1,950 * 1.45% = $28.28 per employee and $282.75 in total for the company.

Next, the FUTA taxes would be the first $7,000 of each employee's pay multiplied by 0.6% which gives $7,000 * 0.6% = $42 each for FUTA and $420 for the company. SUTA is calculated similarly and provides $7,000 * 5.4% = $378 each for SUTA and $3780 for the company. Thus, the journal entry on March 31 to record the March payroll taxes expenses would show a total expenditure of $1,209 (FICA Social Security) + $282.75 (FICA Medicare) + $420 (FUTA) + $3780 (SUTA) = $5,691.75.

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Ramirez Corporation sells two types of computer chips. The sales mix is 30% (Q-Chip) and 70% (Q-Chip Plus). Q-Chip has variable costs per unit of $60 and a selling price of $100. Q-Chip Plus has variable costs per unit of $70 and a selling price of $130. Ramirez’s fixed costs are $540,000. How many units of Q-Chip would be sold at the break-even point?

A
3,000

B
3,522

C
5,000

D
7,000

Answers

Answer:

The correct answer is A.

Explanation:

Giving the following information:

The sales mix is 30% (Q-Chip) and 70% (Q-Chip Plus).

Q-Chip has variable costs per unit of $60 and a selling price of $100.

Q-Chip Plus has variable costs per unit of $70 and a selling price of $130.

Ramirez’s fixed costs are $540,000.

First, we need to calculate the break-even point in units for the whole company.

Break-even point (units)= Total fixed costs / Weighted average contribution margin ratio

Weighted average contribution margin ratio= (weighted average selling price - weighted average unitary variable cost)

weighted average selling price= (0.3*100 + 0.7*130)= $121

weighted average unitary variable cost= (0.3*60 + 0.7*70)= $67

Weighted average contribution margin ratio= 540,000 / (121 - 67)

Weighted average contribution margin ratio= 10,000 units

Break-even for each product line:

Q-Chip= 0.3*10,000= 3,000 units

Q-Chip Plus= 0.7*10,000= 7,000 units

To determine the break-even number of Q-Chip units, we calculate the contribution margin for both products, the weighted average contribution margin, and then the total units needed to break-even. Applying the sales mix for Q-Chip yields 3,000 units to break-even, making option A the correct answer.

To calculate the number of Q-Chip units Ramirez Corporation must sell to break-even, we need to use the weighted average contribution margin method because there is a sales mix for two different products. The steps are as follows:

Calculate the contribution margin per unit for each product: Selling price minus variable cost.Calculate the weighted average contribution margin.Divide the total fixed costs by the weighted average contribution margin to get the total number of units (of the mix) needed to break even.Since we want the number of Q-Chip units, we need to use the sales mix percentages to find the proportion.

Contribution margin for Q-Chip = $100 - $60 = $40.

Contribution margin for Q-Chip Plus = $130 - $70 = $60.

Weighted average contribution margin = (30% × $40) + (70% ×$60) = $12 + $42 = $54.

Total units to break even = $540,000 / $54 = 10,000 units (combined).

Number of Q-Chip units = 30% of 10,000 = 3,000 units.

Therefore, the correct answer is A, 3,000 units of Q-Chip must be sold for the Ramirez Corporation to reach the break-even point.

The following 3 questions are based on this information. Kings Department Store has 625 rubies, 800 diamonds, and 700 emeralds from which they will make bracelets and necklaces that they have advertised in their Christmas brochure. Each of the rubies is approximately the same size and shape as the diamonds and the emeralds. Kings will net a profit of $250 on each bracelet, which is made with 2 rubies, 3 diamonds, and 4 emeralds, and $500 on each necklace, which includes 5 rubies, 7 diamonds, and 3 emeralds. How many of each should Kings make to maximize its profit?

Answers

Answer:

129 bracelets and 59 necklaces.

Explanation:

Kings departments store wants to maximize profit by making a combination of its two products necklaces and bracelets. The King store should use a strategy so that it can generate maximum profit with its available rubies, diamonds and emeralds.  

$250a + $500b = Maximum Profit

For rubies : 2a + 5b = 625

For Diamonds : 3a + 7b = 800

For Emeralds: 4a + 3b = 700

Solving the equation we get maximum profit value of $61,750.The King departments stores should make 129 bracelets and 59 necklaces which will bring maximum profit to the store.

Yields on short-term bonds tend to be more volatile than yields on long-term bonds. Suppose that you have estimated that the yield on 20-year bonds changes by 10 basis points for every 21-basis-point move in the yield on 5-year bonds. You hold a $1.5 million portfolio of 5-year maturity bonds with modified duration 4 years and desire to hedge your interest rate exposure with T-bond futures, which currently have modified duration 9 years and sell at F0 = $70. How many futures contracts should you sell? (Do not round intermediate calculations. Round your final answer to the nearest whole number.)

Answers

Answer:

The yield on momentary securities tends to be more eccentric than yields on long haul securities. In the event that it is assessed that the yield on 20-year securities changes by 10 premise focuses for each 15-premise point move in the yield on 5-year securities. One is holding a $1 million arrangement of 5-year development securities with changed length 4 years and ready to support his loan cost introduction with T-bond prospects. T-bond fates as of now have adjusted term 9 years and sell at $95 (F0).  

The quantity of prospects gets that he should sell can be determined as demonstrated as follows: according to the assumption the portfolio misfortune considering the given data would be:

P = Portfolio esteem =$1,000.000

D = Modified length =4 years

Ay =Bond portfolio yield =15 premise  

Misfortune on the Portfolio = P x Ay =$1,000,000 x 0.15%x 4 = $6,000  

The adjustment in the fates cost (per $100 standard worth) will be as determined underneath:

$95 x 0.0001x 9 = $0.0855

This is a difference in $85.50 on a $100,000 standard worth agreements. Along these lines you should sell: $6,000/$85.50= 70  

Hence, he ought to go short is 70 contracts.

Each of the following factors affects the weighted average cost of capital (WACC) equation. Which of the following factors are outside a firm’s control? Check all that apply. The general level of stock prices The effect of the tax rate on the cost of debt in the weighted average cost of capital equation The firm’s dividend payout ratio The impact of a firm’s cost of capital on managerial decisions Consider the following case: International Imports (I2) has two divisions, L and H. Division L is the company’s low-risk division and would have a weighted average cost of capital of 8% if it was operated as an independent company. Division H is the company’s high-risk division and would have a weighted average cost of capital of 14% if it was operated as an independent company. Because the two divisions are the same size, the company has a composite weighted average cost of capital of 11%. Division L is considering a project with an expected return of 9.5%. Should International Imports (I2) accept or reject the project? Accept the project Reject the project On what grounds do you base your accept–reject decision? Division L’s project should be accepted, because its return is less than the risk-based cost of capital for the division. Division L’s project should be accepted, since its return is greater than the risk-based cost of capital for the division.

Answers

Answer:

The general level of stock prices

The effect of the tax rate on the cost of debt in the weighted average cost of capital equation

The project should be accepted.

Division L’s project should be accepted, since its return is greater than the risk-based cost of capital for the division.

Explanation:

The company can determinate their payout ratio and the cost of capital of their equity the rest of the option are determined by either the market or the government.

It should be accepted as the return is based on the division which WACC is 8% therefore, it will make a good use of the capital as is above the expected capital cost

Factors outside a firm's control affecting WACC include stock prices and tax rate effects on cost of debt. A firm's dividend policy and capital cost impact on decisions are controllable. For International Imports, Division L's project should be accepted because its return exceeds its cost of capital.

The factors affecting the weighted average cost of capital (WACC) that are outside a firm's control include:

The general level of stock pricesThe effect of the tax rate on the cost of debt in the weighted average cost of capital equation

Factors such as the firm's dividend payout ratio and the impact of a firm's cost of capital on managerial decisions are within the firm's control.

Considering the case of International Imports (I2) and its two divisions, L and H, with WACCs of 8% and 14% respectively, we address the project for Division L. Since Division L's project has an expected return of 9.5%, which is greater than its risk-based cost of capital of 8%, the project should be accepted. The return exceeds the cost, making it a financially viable project for Division L.

Darlington Inc., permits any of its employees to buy shares directly from the company. There are no brokerage fees and shares can be purchased at a 10% discount. During May, employees purchased 14,000 shares at a time when the market price of the shares was $10 per share. Prepare the appropriate journal entry for the May purchase. (

Answers

Answer: Please refer to Explanation

Explanation:

The following is the appropriate journal entry.

DR Bank Account (14,000 * 10 - 10%) $126,000

DR Employee Compensation Expense (10% * $140000) $14,000

CR Share Capital Account $140,000

(To record issue of shares to employees)

If you need any clarification do comment.

Answer:

Dr Cash 126,000

Dr Compensation expense 14,000

Cr Common stock 14,000

Cr Paid-in capital—in excess of par 126,000

Explanation:

Darlington Inc Journal entry

Dr Cash ($10 x 14,000 x 90%) 126,000

Dr Compensation expense ($10 x 14,000 x 10%) 14,000

Cr Common stock ($1 x 14,000) 14,000

Cr Paid-in capital—in excess of par ($9 x 14,000) 126,000

One disadvantage of a functional structure is that _____.

1.it does not allow the setting up of cross-functional teams
2.it cannot be converted into an ambidextrous structure
3.it does not facilitate rich and extensive communication between members of the same department
4.it frequently lacks effective communication channels across departments

Answers

Answer:

It frequently lacks effective communication channels across department.

Explanation:

A functional structure is an organizational structure that is used to coordinate employees on the basis of their various skills. It helps in the categorizing of workers into smaller groups based on their area of specialty.

Advantages of functional structure include:

1) The grouping of workers into their area of specialty makes the work more efficient.

2) The individuals in a group share their various knowledge to make productivity faster.

Diasvantages of functional structure include:

1) There could be a lack of coordination among the workers.

2) Competition may arise between individuals in a group.

Bailey, a single taxpayer, obtains permission to change from a calendar year to a fiscal year ending June 30, 2019. During the six months ending June 30, 2019, she earns $40,000 and has $8,000 of itemized deductions. What is the amount of her annualized income?

a.$32,000

b.$28,000

c.$64,000

d.$56,000

Answers

Answer:

Correct option is c.$64,000

Explanation:

given data

earn  = $40,000

deductions = $8,000

time = 6 month

solution

we get here amount of her annualized income that is express as

amount of her annualized income = ( earn - deduction ) × time duration

amount of her annualized income =  ( $40,000 - $8,000 ) × [tex]\frac{6}{12}[/tex]  

amount of her annualized income = $64,000

so correct option is c.$64,000

On July 1, 2019, Pharoah Company purchased new equipment for $80,000. Its estimated useful life was 8 years with a $16,000 salvage value. On January 1, 2022, before making its depreciation entry for 2022, the company estimated the remaining useful life to be 10 years beyond December 31, 2022. The new salvage value is estimated to be $5,000. (a) Correct answer iconYour answer is correct. Prepare the journal entry to record depreciation on December 31, 2019.

Answers

Final answer:

The straight-line depreciation for Pharoah Company's equipment acquired on July 1, 2019, for the year ending December 31, 2019, is $8,000. This is recorded with a debit to Depreciation Expense and a credit to Accumulated Depreciation - Equipment.

Explanation:

To calculate depreciation for the equipment purchased by Pharoah Company, we will use the straight-line method. Initially, the equipment had a useful life of 8 years and a salvage value of $16,000. The straight-line depreciation expense can be calculated using the initial cost minus the salvage value, divided by the useful life:

Initial Depreciation Expense = (Cost - Salvage Value) / Useful Life
= ($80,000 - $16,000) / 8 years
= $64,000 / 8 years
= $8,000 per year
The journal entry to record depreciation on December 31, 2019, would be:

Debit Depreciation Expense: $8,000Credit Accumulated Depreciation - Equipment: $8,000

This entry represents the first year of depreciation for the equipment.

Final answer:

The depreciation expense for Pharoah Company for the year ending on December 31, 2019, is $4,000, calculated using the straight-line method on a prorated basis. The necessary journal entry would include a debit to Depreciation Expense and a credit to Accumulated Depreciation - Equipment for this amount.

Explanation:

To prepare the journal entry to record depreciation on December 31, 2019, for Pharoah Company, we first need to calculate the depreciation expense for the year using the straight-line method. The depreciation expense is calculated by subtracting the salvage value from the cost of the equipment and then dividing by the useful life of the equipment.

The initial cost of the equipment is $80,000 and the initial salvage value is $16,000, leaving a depreciable base of $64,000. The useful life of the equipment was 8 years. So the annual depreciation expense is calculated as ($80,000 - $16,000) / 8 = $8,000.

Since the equipment was purchased on July 1, 2019, only half of the year's depreciation applies for 2019. Therefore, for 2019, the depreciation expense is $8,000 / 2 = $4,000.

The journal entry dated December 31, 2019, would be:

Debit Depreciation Expense: $4,000

Credit Accumulated Depreciation - Equipment: $4,000

This entry reflects the decrease in value for half a year's use of the new equipment.

In 2021, its first year of operations, Kimble Corp. has a $900,000 net operating loss when the tax rate is 20%. In 2022, Kimble has $250,000 taxable income and the tax rate remains 20%. Assume the management of Kimble Corp. thinks that it is more likely than not that the loss carryforward will not be realized in the near future because it is a new company (this is before results of 2022 operations are known). (a) What are the entries in 2021 to record the tax effects of the loss carryforward

Answers

Answer and Explanation:

Kimble Corp entries in 2021 to record the tax effects of the loss carryforward

a)Dr Deferred Tax Asset ($900,000 × 20%) 180,000

Cr Benefit Due to Loss Carryforward $180,000

Dr Benefit Due to Loss Carryforward $180,000

Cr Allowance to Reduce Deferred Tax Asset to Expected Realizable Value $180,000

(b)

Dr Income Tax Expense ($250,000 × 20%) $50,000

Cr Deferred Tax Asset $50,000

Dr Allowance to Reduce Deferred Tax Asset to Expected Realizable value $50,000

Cr Benefit Due to Loss Carryforward $50,000

An industrial manufacturer that works with one or a few large clients and develops products that only these clients will use is most likely to implement​ a(n) ________ strategy.

Answers

Answer: Custom marketing

Explanation: A custom marketing strategy will most likely be employed by an industrial manufacturer that works with one or a few large clients and develops products that only these clients will use. Marketing creates, communicates, and delivers value, and it involves the management of customer relationships. A custom marketing strategy is one in which a manufacturer customizes and develops products that are unique to the needs of his customers and thus is an essential strategy for delivering a personalized customer experience to each segment of clients, thereby increasing loyalty and customer satisfaction.

Swifty Company had net credit sales during the year of $1450000 and cost of goods sold of $700000. The balance in accounts receivable at the beginning of the year was $200000, and the end of the year it was $90000. What was the accounts receivable turnover

Answers

Answer:

Account Receivable Ratio = 10

Explanation:

Account Receivable Turnover Ratio:

The Account Receivable Turnover Ratio is an accounting measure that indicates the effectiveness of company's ability to collect its receivables from its customers.

A high turnover ratio represents good credit policy and aggressive collections  department with good portfolio of customers.

A low turnover ratio indicates excess amount of old receivables being tied up in working capital.

Formula: Net Credit Sales ÷ (Opening receivable + closing receivable/2)

Receivable Turnover Ratio = $ 1,450,000 ÷ ( $200,000+$90,000/2)

=$1,450,000 ÷ $145,000

= 10

Suppose a competitive market is comprised of firms that face identical cost curves. The firms experience an increase in demand that results in positive profits for the firms. Which of the following events are then most likely to occur?(i)New firms will enter the market.(ii)In the short run, price will rise; in the long run, price will rise further.(iii)In the long run, all firms will be producing at their efficient scale.

Answers

Answer:

(i)New firms will enter the market.

(iii)In the long run, all firms will be producing at their efficient scale

Explanation:

A perfect competition is characterised by many buyers and sellers of homogenous goods and services. Market price is set by the forces of demand and supply.

If firms are earning positive profits, in the long run new firms would enter into the industry and this woold drive positive profits to zero. As a result , firms would be operating at the efficient scale.

I hope my answer helps you

Answer:

I) New firms will enter the market, III)In the long run, all firms will be producing at their efficient scale.

Explanation:

In Microeconomics, this has already happened before. In most recent years, we have seen this For Flat Screen TVs and Smartphones. This is dynamic because the demand may or may not keep on increasing.

In addition to this, another important variable is the supply. The Cost curve is identical to both of them but this is also dynamical. But all of the firms will work harder and harder to lower the Cost curve, so they'll become more efficient.

Finally, in the long run the product retail price will inevitably fall.

QUESTION 47 Standard, Inc. reported EBIT of $42.00 million for last year. Depreciation expense totaled $20 million and capital expenditures came to $7 million. The company increased net working capital by $2 million. Free cash flow is expected to grow at a rate of 6.10% for the foreseeable future. Standard faces a 40% tax rate and has a 0.40 debt to equity ratio with $200 million (market value) in debt outstanding. Standard's equity beta is 1.24, the risk-free rate is currently 5% and the market risk premium is estimated to be 6%. What is the current total value of Standard, Inc. (in millions)? What is the current value (in millions) of Standard's equity?

Answers

Answer:

Equity Value = $634.72 mn

Explanation:

Given Data:

Market value in debt outstanding = $200 million

Depreciation expense totaled = $20 million

capital expenditures = $7 million

Free cash flow  rate = 6.10%

Standard's equity beta = 1.24

Risk-free rate = 5%

Market risk premium = 6%

The current value of standard equity is calculated using the formula;

Equity Value = Firm Value - Market Value of Debt---------1

But,

Firm Value = FCFF*(1+g)/(r-g)  ------------------------2

FCFF  = EBIT(1-t) + Depreciation - Capital Expenses - Changes in NWC. -------3

FCFF = 42*0.6 + 20 - 7 - 5

          = $33.2 mn

Putting the value obtained from equation 3 into equation 2, we have;

Firm Value = FCFF*(1+g)/(r-g)  

Firm Value = 33.2 x (1.061)/(0.1032 - 0.061)

                 = $834.72 mn

Putting the value obtained from equation 2 into equation 1, we have;

Equity Value = Firm Value - Market Value of Debt

                          = 834.72 - 200

                         = $634.72 mn

The Closed Fund is a closed-end investment company with a portfolio currently worth $195 million. It has liabilities of $20 million and 5 million shares outstanding. a. What is the NAV of the fund? (Round your answer to 2 decimal places.) b. If the fund sells for $40 per share, what is its premium or discount as a percent of net asset value? (Input the amount as a positive value. Round your answer to 2 decimal places.)

Answers

Answer:

NAV is $35 per share

premium is 14.30%

Explanation:

The formula for net asset value can be  used in calculating the NAV of thi closed fund before comparing the NAV with selling price of the fund in order to ascertain whether a discount or premium has been recorded on the fund as shown below:

NAV=Total assets- total liabilities/number of shares

total fund assets is worth $195 million

total fund liabilities is $20 million

there are 5 million shares outstanding

NAV=$195 million-$20 million/5 million

       =$175 million/5 million

         =$35.00 per share

Premium on the fund=($40-$35)/$35

                                     =$5/$35

                                      =14.30% premium

The fund has 14.30% premium

Some consumers like to buy products on-line, some consumers don't. Do YOU like to shop and buy on-line? Think about your opinion of on-line shopping and your experiences buying on-line. Is there a product that you would prefer/always buy on-line? What is it and why do you like buying it on-line? Is there a product that you would NOT/never buy online? What is it and what's your concern about buying it on-line?

Answers

Answer to Question 1:

I'm am indifferent. Sometimes I shop online for convenience.

In my experience however, getting my products and or purchases and the best price possible and at the best quality possible prevails over convenience as sometimes, people courier orders which are completely different from what was requested.

Answer to Question 2:

Of course, I could purchase books, data, and other products whose quality and quantity cannot be manipulated in anyway.

Answer to Question 3 & 4:

I would never purchase cooked food online.

I once purchased grilled fish online only to discover that it was not properly cooked on the inside. The interior of the fish was raw with blood in it. It was disgusting.

Cheers!

Problem 4-4 Calculation of Gain or Loss (LO 4.3) Jocasta owns an apartment complex that she purchased 6 years ago for $750,000. Jocasta has made $50,000 of capital improvements on the complex, and depreciation claimed on the building to date is $128,700. Calculate Jocasta's adjusted basis in the building.

Answers

Answer:

$671,300

Explanation:

The calculation of adjusted basis in the building is shown below:-

Adjusted basis = Original cost of the property + Cost of capital improvements - Depreciation claimed

= $750,000 + $50,000 - $128,700

= $800,000 - $128,700

= $671,300

Therefore for computing the adjusted basis we simply add original cost of the property with cost of capital improvements and deduct depreciation claimed.

For example, the sticky-price theory asserts that the output prices of some goods and services adjust slowly to changes in the price level. Suppose firms announce the prices for their products in advance, based on an expected price level of 100 for the coming year. Many of the firms sell their goods through catalogs and face high costs of reprinting if they change prices. The actual price level turns out to be 90. Faced with high menu costs, the firms that rely on catalog sales choose not to adjust their prices. Sales from catalogs will _______(Remain the same/fall/rise), and firms that rely on catalogs will respond by _______ (Increasing/Reducing) the quantity of output they supply. If enough firms face high costs of adjusting prices, the unexpected decrease in the price level causes the quantity of output supplied to ______ (Fall below/Rise above) the natural rate of output in the short run.

Answers

Answer:

1. Fall

2. Reducing

3. Fall Below

Explanation:

1. FALL. Due to the Menu Costs (costs to suppliers of having to constantly update prices) of inflation being too high for the Catalogue sellers. They leave the prices where they are at 100. Prices have fallen to 90 though so people will therefore buy less from catalogues as they will be considered more expensive.

2. REDUCING. Firms dealing with Catalogues will respond by reducing output. The more output they supply, the more variable costs they deal with. Seeing as their Demand has fallen leading to a reduction in profitability, they will scale back operations to try to spend less and also because less people are buying output.

3. Fall Below. The Quantity of output supplied was dependant on a price level of 100. That was where the natural rate was. Now as prices have fallen and quantity supplied have gone with them, the effect would be a fall Below the Natural Output Level.

If you need any clarification do react or comment.

Additional Information A $30,000 note payable is retired at its $30,000 carrying (book) value in exchange for cash. The only changes affecting retained earnings are net income and cash dividends paid. New equipment is acquired for $71,600 cash. Received cash for the sale of equipment that had cost $62,600, yielding a $3,400 gain. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement. All purchases and sales of inventory are on credit. (2) Compute the company’s cash flow on total assets ratio for its fiscal year 2019.

Answers

Answer:

The cash flow statement guides a company in understanding its true use and source of cash funding.

It helps breakdown the Net income and give confidence or allow an analyst/investor heighten his risk profile of the business returns on Invested funds.

The attached documents show details of the full questions which are missing from the submitted question and the Cash flow statement .

1. Universal Claims Processors processes insurance claims for large national insurance companies, most claim processing is done by a large pool of computer operators, some of whom are permanent and some of whom are temporary. The company has 40 computer workstations for operators. A permanent operator can process 16 claims per day, whereas a temporary operator can process 12 per day. On average, the company processes at least 450 claims each day. A permanent operator generates about 0.5 errors per day, whereas a temporary operator generates about 1.4 errors per day. The company wants to limit claims with error to 25 per day. A permanent operator is paid $64 per day and a temporary operator is paid $42 per day. The company wants to determine the number of permanent and temporary operators to hire to minimize costs.

Answers

Find the attachments for step by step solution

Figure Help

The given linear programming problem consists of feasible region.

Explanation

The points are plotted on coordinate axes and obtain the feasible region and optimum solution.

Final answer:

The question involves finding the optimal allocation of permanent and temporary workers for a claim processing company using the techniques of linear programming. The aim is to minimize cost while also meeting daily processing requirements and keeping errors within acceptable levels.

Explanation:

This question can be framed as a problem of linear programming, which is a mathematical model used in operations research. The objective function here is cost minimization for Universal Claims Processors, provided they meet the minimum output of 450 claims per day and do not exceed 25 errors. Therefore, the company needs to balance the number of permanent and temporary operators per day based on their productivity (16 and 12 claims respectively), error rates (0.5 and 1.4 errors respectively), and salaries ($64 and $42 respectively).

Let's denote the number of permanent operators as p and the number of temporary operators as t. We need to solve the following equations to minimize costs:

Constraintsp + t ≤ 40 (due to the number of workstations)16p + 12t ≥ 450 (to meet the claim processing requirement)0.5p + 1.4t ≤ 25 (to maintain an acceptable error rate)Objective Function

Minimize C = 64p + 42t (to minimize costs)

This problem can be solved using linear programming techniques.

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Corporations must hold meetings for stockholders and keep accurate records of business transactions. How are these regulations beneficial for the corporation’s stockholders?

Answers

Answer:

These regulations are not only beneficial for the corporation's stockholders but also encourages them to keep their money invested in the company's stocks. This way the stock holders feel a sense a security about their invested money when they see the accurate records of the business transactions of the company.

Hope this clear things up

Good luck.

Final answer:

Corporations are required to hold meetings for stockholders and keep accurate records of business transactions, which bring benefits to the stockholders through transparency, protection of rights, and shareholder value.

Explanation:

The regulations requiring corporations to hold meetings for stockholders and keep accurate records of business transactions are beneficial for the corporation's stockholders in several ways:

Transparency and Accountability: Holding meetings and maintaining records provide transparency to stockholders, allowing them to make informed decisions about their investments. It also ensures accountability from the corporation's management.Protection of Rights: Regulations help protect stockholders' rights by ensuring their voices are heard and their interests are represented in decision-making processes.Shareholder Value: Accurate records and regular meetings can contribute to the overall success and stability of the corporation, ultimately benefiting the stockholders by preserving and increasing their investments' value.

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Thomasson Air uses two measures of activity, flights and passengers, in the cost formulas in its budgets and performance reports. The cost formula for plane operating costs is $36,160 per month plus $2,038 per flight plus $1 per passenger. The company expected its activity in April to be 73 flights and 223 passengers, but the actual activity was 72 flights and 228 passengers. The actual cost for plane operating costs in April was $179,020. The activity variance for plane operating costs in April would be closest to:

A)$6,137 U
B)$6,137 F
C)$2,033 U
D)$2,033 F

Answers

Answer:

D)$2,033 F

Explanation:

The formula for perating costs is:

[tex]C= 36,100 +2,038F+1P[/tex]

Where 'F' is the number of flights and 'P' is the number of passengers.

If the company expected 73 flights and 223 passengers, expected costs were:

[tex]E= 36,160 +2,038*73+1*223\\E=\$185,157[/tex]

If the company had an activity of 72 flights and 228 passengers, the actual costs were:

[tex]C= 36,160 +2,038*72+1*228\\C=\$183,064[/tex]

The operating cost variance is:

[tex]C=\$185,157-\$183,064\\C=\$2,033[/tex]

Since actual costs are lower than expected costs, the variance is favorable. Therefore, the answer is D)$2,033 F.

Assume that Product Z is made of two units of A and three units of B. A is made of three units of C and four of D. D is made of two units of E Lead times for purchase or fabrication of each unit to final assembly are: Z takes two weeks; A, B, C, and D take one week each; and E takes three weeks. Sixty eight units of Product Z are required in Period 10. (Assume that there is currently no inventory on hand of any of these items.) b. Develop an MRP planning schedule showing gross and net requirements and order release and order receipt dates.

Answers

Answer and explanation:

a). The product structure tree is as given in the attached image 1

                                       Z

                        A                             B

             C                  D

                                  E

b) The MRP schedule are also attached in the subsequent images

Final answer:

An MRP schedule for Product Z requires backward calculation from the due date, considering lead times of Z, A, B, C, D, and E to determine when each component needs to be ordered or manufactured. E needs to be ordered by Period 4, components of A by Period 7, and the assembly of Product Z starts by Period 8.

Explanation:

To develop an MRP (Material Requirements Planning) schedule for Product Z, given the consumption rates and lead times for each component and sub-component, we must work backward from the due date for Product Z. The lead times indicate how long before the due date each component and sub-component must be ordered or manufactured to ensure timely completion.

Product Z requires two units of A and three units of B.Component A is composed of three units of C and four of D.Component D requires two units of E for completion.

Now, considering the lead times:

Product Z takes two weeks to assemble.Components A, B, C, and D each take one week.Component E takes three weeks.

Since we need 68 units of Product Z by Period 10, we must start assembling them by Period 8 (taking into account the two-week assembly time for Z). Therefore, we need all units of A and B at the latest by Period 8. The components of A (C and D) thus must be ordered by Period 7, and since D is made of E which takes three weeks, we need to order E by Period 4.

The MRP schedule will show the gross and net requirements for each component by period, as well as the order release and receipt dates to meet the demand for 68 units of Product Z by Period 10. This includes the calculation of quantities required, considering no initial inventory is on hand.

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