Answer:
a=b=c=10
G = 800
Explanation:
a,b,c show the time(number of years)
G is the amount of increase in cash flow each year.
Northwest Hospital is a full-service hospital that provides everything from major surgery and emergency room care to outpatient clinics. The hospital's Radiology Department is considering replacing and old inefficient X-ray machine with a state-of-the-art digital X-ray machine. The new machine would provide higher quality X-rays in less time and at a lower cost per X-Ray. It would also require less power and would use a color laser printer to produce easily readable X-ray images. Instead of investing the funds in the new X-ray machine, the Laboratory Department is lobbying the hospital's management to buy a new DNA analyzer.
For each of the items below, indicate whether it should be considered a differential cost (DC), an opportunity cost (OC) or a sunk cost (SC) in the decision to replace the old X-ray machine with a new machine. If none of the categories apply for a particular item, please put (NA) next to the number for "none apply". Please list the number and the 2 digit abbreviation next to it. For example, 1.OC, 2. SC, etc.
1. Cost of the old X-ray machine
2. The salary of the head of the Radiology Department
3. The salary of the head of the Pediatrics Department
4. Cost of the new laser printer
5. Rent on the space occupied by Radiology
6. The cost of maintaining the old machine
7. Benefits from a new DNA analyzer
8. Cost of electricity to run the X-ray machines
Answer:
1. Cost of the old X-ray machine - SC
2. The salary of the head of the Radiology Department - None
3. The salary of the head of the Pediatrics Department - None
4. Cost of the new laser printer - DC
5. Rent on the space occupied by Radiology - None
6. The cost of maintaining the old machine - DC
7. Benefits from a new DNA analyzer - OC
8. Cost of electricity to run the X-ray machines - DC
Where,
SC - Sunk cost
DC - Differential cost
OC - Opportunity cost
The decision to replace an old X-ray machine with a new one involves analyzing various costs: sunk costs for the existing equipment, differential costs for the new machine and its operation, and the opportunity cost of choosing this investment over a DNA analyzer.
When considering the decision to replace an old X-ray machine with a new digital X-ray machine at Northwest Hospital, it is important to evaluate certain costs associated with the change. Here is a breakdown of these costs:
1. SC: Cost of the old X-ray machine - This is a sunk cost because it has already been incurred and cannot be recovered.2. NA: The salary of the head of the Radiology Department - This is generally considered a fixed cost and not directly affected by the decision to replace the X-ray machine.3. NA: The salary of the head of the Pediatrics Department - This is not relevant to the decision as it does not directly affect the cost of operating or replacing the X-ray machine.4. DC: Cost of the new laser printer - This is a differential cost as it is a new cost that would be incurred only if the new X-ray machine is purchased.5. NA: Rent on the space occupied by Radiology - This is most likely a fixed cost and not a differential cost associated with the decision.6. DC: The cost of maintaining the old machine - This is a differential cost, as it would be eliminated if the new machine is purchased.7. OC: Benefits from a new DNA analyzer - This represents an opportunity cost, as the hospital would forgo the potential benefits of the DNA analyzer by choosing to invest in the new X-ray machine instead.8. DC: Cost of electricity to run the X-ray machines - This would be a differential cost because the new machine is expected to use less power.Understanding these costs is important as they impact the overall cost accounting and financial planning for the hospital. Managers need to assess differential, sunk, and opportunity costs to make informed decisions on capital investments, such as upgrading to state-of-the-art digital X-ray equipment or purchasing a new DNA analyzer.
Dream House Builders, Inc. applies overhead by linking it to direct labor. At the start of the current period, management predicts total direct labor costs of $100,000 and total overhead costs of $20,000. On January 31, the direct labor for this job equals $2,700. Complete the necessary January 31 journal entry to apply overhead by selecting the account names and dollar amounts from the drop-down menus.
Answer:
Goods in Process Inventory -- Job ....... $540 Dr
Factory Overhead ................................................... $540 Cr
Explanation:
Factory Overhead = (Total Overhead Costs / Total Direct Labor Costs) x Direct Labor
Factory Overhead = ($20,000 / $100,000) x $2,700
Factory Overhead = 0.2 x $2,700
Factory Overhead = $540
On January 31, the journal entry to apply overhead is
Goods in Process Inventory -- Job ....... $540 Dr
Factory Overhead ................................................... $540 Cr
Hope this helps!
Answer:
Please see attachment
Explanation:
Please see attachment
Suppose the government spends $500 billion during the fiscal year 2014 on goods and services. In addition, the government collects tax revenues of $480 billion and makes transfer payments equal to $150 billion. Assume the economy is producing at the potential output level. The budget balance for this economy is equal to _____ and the government is running a _____. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices $170 billion; surplus -$170 billion; deficit $130 billion; surplus -$130 billion; deficit
Answer:
170 billion ; deficit
Explanation:
Given:
Amount spent by the government = $500 billion
Tax revenue collected = $480 billion
Transfer payments = $150 billion
Now,
The budget balance for government
= Tax revenue - Amount spent - Transfer payments
= $480 billion - $500 billion - $150 billion
= -170 billion
Here the negative sign depicts the deficit
Hence,
The answer is option 170 billion ; deficit
Focus on the difference between feasible alternatives (Principle 2LOADING...)! Insulated concrete forms (ICF) can be used as a substitute for conventional wood framing in building construction. Heating and cooling bills will be about 6060% less than in a similar wood-framed building in upstate New York. An ICF home will be approximately 1010% more expensive to construct than a wood-framed home. For a typical 1 comma 8001,800 ftsquared2 home costing $130130 ftsquared2 to construct in upstate New York and costing $260260 per month to heat and cool, how many months does it take for a 1 comma 8001,800 ftsquared2 ICF home to pay back its extra construction cost?
Answer:
It will need 176 months (almost 15 years) to payback without considering the time value of money
Explanation:
cost of a typical construction:
1,800 square feet x $130 per square fet = $234,000
the ICF is 10% more expensive:
$34,000 x 1.10 = $257,400
additional cost: $27,400
then the heat cost is $260 and it will be 60% less :
$260 - 60% =$260 x( 1 - 0.6) = $104
savigns $260 - $104 = $156
we now divide the additional cost over the saving per month.
$27,400 / 156 saving per month = 175,641025 = 176 months
Final answer:
The payback period for an ICF home compared to a wood-framed home can be calculated using the monthly savings in heating and cooling costs and the extra construction cost. In this case, it takes approximately 9 days for a 1,800 ft² ICF home to pay back its extra construction cost.
Explanation:
The question is asking how many months it takes for a 1,800 ft² ICF home to pay back its extra construction cost compared to a wood-framed home. With an ICF home, the heating and cooling bills are 60% less than a wood-framed home.
However, the ICF home is 10% more expensive to construct.
To calculate the payback period, we need to compare the monthly savings in heating and cooling costs to the extra construction cost.
For a wood-framed home costing $130 per ft² to construct and $260 per month to heat and cool, the monthly savings for an ICF home would be (60/100) * $260 = $156.
The extra construction cost for the ICF home would be (10/100) * $130 = $13.
Therefore, the payback period would be $13 / $156 = 0.083 months, or approximately 9 days.
State for each account whether it is likely to have debit entries only, credit entries only, or both debit and credit entries. Also, indicate its normal balance. Typical Entries Normal Balance 1. Accounts Payable 2. Cash 3. Dividends 4. Miscellaneous Expense 5. Insurance Expense 6. Fees Earned
Answer:
Account payable: both
Cash: both
Dividends: debit
Miscellaneous Expense: debit
Insurance expense: debit
Fees Earned: credit
Explanation:
Account payable will have a normal credit balance.
It will be credited when a purchases on account are made.
And debited when payment on this accounts occurs.
Cash: represent the cash of the company
It increase when collected or received. And decrease when used on payment.
Dividends: debit, only used when dividends are declared
Miscellaneous Expense: debit each time a common expense is made
Insurance expense: debit each time it is accrued through time the expired portion of the insurance policy.
Fees Earned: credit each time the company earns from providing their services.
Yancey Productions is a film studio that uses a job-order costing system. The company’s direct materials consist of items such as costumes and props. Its direct labor includes each film’s actors, directors, and extras. The company’s overhead costs include items such as utilities, depreciation of equipment, senior management salaries, and wages of maintenance workers. Yancey applies its overhead cost to films based on direct labor-dollars.At the beginning of the year, Yancey made the following estimates:Direct labor-dollars to support all productions $ 8,370,000Fixed overhead cost $ 5,022,000Variable overhead cost per direct labor-dollar $ 0.07Required:1. Compute the predetermined overhead rate.2. During the year, Yancey produced a film titled You Can Say That Again that incurred the following costs:Direct materials $ 1,420,000Direct labor cost $ 2,511,000Compute the total job cost for this particular film.
Answer:
1. predetermined overhead rate= 1.3
2. Total cost= $7,195,300
Explanation:
Giving the following information:
Direct labor-dollars to support all productions $ 8,370,000.
Fixed overhead costs $ 5,022,000.
Variable overhead cost per direct labor-dollar $ 0.07.
Yancey applies its overhead cost to films based on direct labor-dollars.
1. Compute the predetermined overhead rate.
predetermined overhead rate= Estimated total overhead cost/Estimated total amount of the allocation base
predetermined overhead rate= (0.7*8370000+5022000)/ 8370000
predetermined overhead rate= 10881000/8370000= 1.3
2. Compute the total job cost for this particular film.
Direct materials $ 1,420,000
Direct labor cost $ 2,511,000
Overhead= 2511000*1.3= 3,264,300
Total cost= $7,195,300
Job order costing refers to the method when the manufacturing unit ascertain the cost of every unit of product. This is done only when the manufacturing unit has varied product lines and are different from each other.
Predetermined overhead rate= 1.3
Total cost= $7,195,300
The following information is given:
Direct labor dollars to support all productions $ 8,370,000.
Fixed overhead costs $ 5,022,000.
Variable overhead cost per direct labor dollar $ 0.07.
Yancey applies its overhead cost to films based on direct labor dollars.
1. Compute the predetermined overhead rate.
[tex]\begin{aligned}\text{Predetermined overhead rate}&=\frac{\text{Estimated total overhead cost}}{\text{Estimated total amount of the allocation base}}\\\text{Predetermined overhead rate}&= \frac{0.7\times8,370,000+5,022,000}{8,370,000}\\\text{Predetermined overhead rate}&= \frac{10,881,000}{8,370,000}\\&= 1.3\end{aligned}[/tex]
2. Compute the total job cost for this particular film.
Direct materials =$ 1,420,000
Direct labor cost= $ 2,511,000
[tex]\text{Overhead}= 2511000\times1.3= 3,264,300[/tex]
Total cost= $7,195,300
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The accountant for Healthy Life Company, a medical services consulting firm, mistakenly omitted adjusting entries for (a) unearned revenue earned during the year ($34,900) and (b) accrued wages ($12,770). If the net income for the current year had been $196,400, what would have been the correct net income if the proper adjusting entries had been made?
Answer:
The correct net income is $218,530
Explanation:
The computation of the correct net income is shown below:
= Current year net income + unearned revenue earned - accrued wages
= $196,400 + $34,900 - $12,770
= $218,530
The unearned revenue earned should be added in the net income whereas the accrued wages is an expense which should be deducted in the net income
Chapter 3 Homework Questions 3, 4 3. Balance Sheet. Construct a balance sheet for Sophie’s Sofas given the following data. What is shareholders’ equity? (LO3-1) Cash balances = $10,000 Inventory of sofas = $200,000 Store and property = $100,000 Accounts receivable = $22,000 Accounts payable = $17,000 Long-term debt = $170,000 4. Income Statement. A firm’s income statement included the following data. The firm’s average tax rate was 20%. (LO3-1) Cost of goods sold $8,000 Income taxes paid $2,000 Administrative expenses $3,000 Interest expense $1,000 Depreciation $1,000 What was the firm’s net income? What must have been the firm’s revenues? What was EBIT?
Answer:
BALANCE SHEET
Assets Liabilities
Cash 10,000 Account Payable 17,000
Account Receivable 22,000 Long term 170,000
Inventory 200,000 Total Liab 187,000
non-current assets 100,000 Equity 145,000 (A)
total assets 332,000 Total liab + SE 332,000
Earnings before interest and taxes: 11,000 dolllars
Net income 8,000
Explanation:
(A) solve through the accounting equation
assets = laib + equity
332,000 = 187,000 + Equity = 332,000 - 187,000 = 145,000
Q4
income tax expense: 2,000
rate 20%
Earnings before taxes x 20% = 2,000
EBT = 2,000 / 0.2 = 10,000
Net income : 10,000 - 2,000 = 8,000
EBIT: EBT + interest expense
10,000 + 1,000 = 11,000
A balance sheet is an accounting tool that lists a company's assets and liabilities. Shareholders' equity is the residual interest in the assets of a company after deducting liabilities. Sophie's Sofas has shareholders' equity of $185,000. The firm's net income is $2,000 and its revenues are $10,000. The firm's EBIT is also $2,000.
Explanation:A balance sheet is an accounting tool that lists a company's assets and liabilities. Assets are things of value that a company owns, such as cash, inventory, and property. Liabilities are debts or obligations, such as accounts payable and long-term debt.
Shareholders' equity is the residual interest in the assets of a company after deducting liabilities. It represents the owners' claim on the company's assets and is calculated by subtracting total liabilities from total assets. In the case of Sophie's Sofas, the shareholders' equity would be $185,000 ($332,000 - $170,000 - $17,000).
To determine the firm's net income, we need to subtract the total expenses from the total revenues. In this case, the expenses include the cost of goods sold, income taxes paid, administrative expenses, interest expense, and depreciation. Given the information provided, the firm's net income would be $2,000 ($8,000 - $2,000 - $3,000 - $1,000 - $1,000).
The firm's revenues can be calculated by adding the cost of goods sold, net income, and interest expense. In this case, the firm's revenues would be $10,000 ($8,000 + $2,000 + $1,000).
EBIT, or Earnings Before Interest and Taxes, can be calculated by subtracting the interest expense and income taxes paid from the net income. In this case, the firm's EBIT would also be $2,000 ($2,000 - $1,000 - $1,000).
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In the initial Cournot duopoly equilibrium, both firms have constant marginal costs, m, and no fixed costs, and there is a barrier to entry. Show what happens to the best-response function of firms if both firms now face a fixed cost of F Let market demand be p-a -bQ, where a and b are positive parameters with 2 firms. Let q1 and q2 be the amount produced by firm 1 and firm 2, respectively. Assuming it is optimal for the firm one to produce, its best-response function is I. (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. Eg., a subscript can be created with the- q1 = character.)
Answer:
The best response functions are given by
[tex]q_1=\frac{a-m}{2b}-\frac{q_2}{2}[/tex]
[tex]q_2=\frac{a-m}{2b}-\frac{q_1}{2}[/tex]
Explanation:
Under no fixed costs the total costs is
[tex]CT_i= mq_i[/tex]
for i=1,2. The market demand is given by
[tex]p=a-bQ[/tex]
where [tex]Q=q_1+q_2[/tex] is the total production
Firm 1 and 2 will maximize its own profits. Since this firms are symmetric the problems are too
[tex]max\,\Pi_1=p=(a-b(q_1+q_2))q_1-mq_1[/tex]
The first order conditions (take derivative of the profit with respect to [tex]q_1[/tex] are given by
[tex]a-2 b q_1-b q_2-m=0[/tex]
Then the best-response function for Firm 1 will be
[tex]q_1=\frac{a-m}{2b}-\frac{q_2}{2}[/tex]
and the solution for Firm 2 would be the symmetric
[tex]q_2=\frac{a-m}{2b}-\frac{q_1}{2}[/tex]
Now we can add fixed costs, so total costs now look
[tex]CT_i= F+mq_i[/tex] for i=1,2
the profit maximization problem for firm 1 looks now
[tex]max\,\Pi_1=p=(a-b(q_1+q_2))q_1-F-mq_1[/tex]
The first order conditions are given by
[tex]a-2 b q_1-b q_2-m=0[/tex]
note that this equation is the same as in the absence of Fixed Costs. So the solutions would be the same. Fixed costs don't change the optimal level of production of these firms.
Note that Total Costs are given by fixed costs (F) and marginal costs (m) that depend on the production level of the firm
[tex]CT_i=F+mq_i[/tex]
for i=1,2. The market demand is given by
[tex]p=a-bQ[/tex]
where [tex]Q=q_1+q_2[/tex] is the total production, so it's the sum of each firms production
Firm 1 will maximize it's own profits
[tex]max\,\Pi_1=p=(a-b(q_1+q_2))q_1-F-mq_1[/tex]
The first order conditions (take derivative of the profit with respect to [tex]q_1[/tex] are given by
[tex]a-2 b q_1-b q_2-m=0[/tex]
Then the best-response function for Firm 1 will be
[tex]q_1=\frac{a-m}{2b}-\frac{q_2}{2}[/tex]
and the solution for Firm 2 would be symmetric.
Note that only marginal costs are relevant for getting the best-response function, so adding fixed costs (F) don't change the results
Explanation:
Which of the following is NOT an OM strategy/issue during the introduction stage of the product life cycle? A. long production runs B. limited models C. high production costs D. frequent product and process design changes
Answer:
A. long production runs
Explanation:
In the production life cycle, there are four types of stages which comprise of introduction, growth, maturity, and decline
The introduction stage refers to the stage in which the product is first time introduced in the market. It involves high production cost, less market size, changes in frequent product and process design, limited models, etc.
So, the option A is correct.
Final answer:
The correct answer is long production runs. This is not a typical Operations Management strategy during the introduction stage of a product life cycle; longer production runs are usually seen at later stages when demand is stable and refinement is complete.
Explanation:
The question asks which of the following is NOT an Operations Management (OM) strategy/issue during the introduction stage of the product life cycle: A. long production runs B. limited models C. high production costs D. frequent product and process design changes.
The correct answer is A. long production runs. During the introduction stage of a product's life cycle, companies are more likely to encounter high production costs, limited models, and frequent changes to product and process designs in response to market feedback.
Long production runs are generally associated with the maturity stage of the product life cycle, where demand is stable and companies optimize manufacturing for efficiency.
At the introduction stage, the focus is usually on tweaking the product to suit market needs and establishing a market presence, which can be hampered by lengthy production runs that reduce the company's ability to adapt quickly to market responses.
Elite Trailer Parks has an operating profit of $257,000. Interest expense for the year was $36,500; preferred dividends paid were $30,500; and common dividends paid were $38,300. The tax was $63,800. The firm has 20,100 shares of common stock outstanding. a. Calculate the earnings per share and the common dividends per share for Elite Trailer Parks.
Answer:
EPS 1.30
Dividends per Share: 1.91
Explanation:
EBIT (earning before interest and taxes) 257,000
interest expense: 36,500
tax expense: 63,800 total (100,300)
Net income 56,700
Earnings per share:
(net income - preferred dividends) / common stock outstanding
(56,700 - 30,500) / 20,100 = 1,303482 = 1.30
Dividend per share:
common stock dividends / common stock outstanding
38,300 / 20,100 = 1,90547 = 1.91
Marc and Michelle are married and earned salaries this year of $64,000 and $12,000, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $500 from corporate bonds. Marc and Michelle also paid $2,500 of qualifying moving expenses, and Marc paid alimony to a prior spouse in the amount of $1,500. Marc and Michelle have a 10-year-old son, Matthew, who lived with them throughout the entire year. Thus, Marc and Michelle are allowed to claim a $1,000 child tax credit for Matthew. Marc and Michelle paid $6,000 of expenditures that qualify as itemized deductions and they had a total of $5,500 in federal income taxes withheld from their paychecks during the course of the year. (use the 2016 tax rate schedules. )
What is the total amount of Marc and Michelle’s deductions from AGI?
What is Marc and Michelle’s taxable income?
What is Marc and Michelle’s taxable income?
The total amount of deductions Marc and Michelle are going to get is $24750.
The taxable income of Marc and Michelle is $47750.
Further Explanation:
Income Tax: It is the additional charge on an individual’s income which he/she needs to pay to the government. The taxable income is calculated by adding all the incomes and deducting all the deductions which an individual can claim on his/her income.
Compute the total amount of deductions available for Marc and Michelle:
Total Deduction Available
= Higher of Standard Deduction for MJF and Itemized Deduction + Personal and Dependency Exemptions
= Higher of $12600 and $6000 + $12150 ($4050×3)
= $12600 + $12150
=$24750.
Therefore, the total deductions available to Marc and Michelle are $24750.
Gross Income of Marc and Michelle
= Salary of Marc + Salary of Michelle + Interest Earned on Corporate Bonds
= $64000 + $12000 + 500
= $76500.
Total Taxable Income of Marc and Michelle
= Gross Income – Qualified Moving Expenses – Alimony Paid – Total Deductions
= $76500 - $2500 - $1500 - $$24750
= $47750.
Therefore, the total taxable income of Marc and Michelle is $47750.
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Answer details:
Grade: Senior School
Subject: Taxation
Chapter: Income Tax
Keywords: Taxable income, Marc and Michelle, Deductions, salary income, earned, corporate bond interest, interest on municipal bond, standard deductions, US tax brackets.
They paid $6,000 of expenditures that qualify as itemized deductions. Total Deductions from AGI: $7,000 Adjusted Gross Income: $69,850.
Given,
Marc and Michelle are married and earned salaries this year of $64,000 and $12,000, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $500 from corporate bonds. Marc and Michelle also paid $2,500 of qualifying moving expenses, and Marc paid alimony to a prior spouse in the amount of $1,500.
Required to calculate:
What is the total amount of Marc and Michelle’s deductions from AGI?
What is Marc and Michelle’s taxable income?
What is Marc and Michelle’s taxable income?
Itemized Deductions:
They paid $6,000 of expenditures that qualify as itemized deductions.
Child Tax Credit:
They can claim a $1,000 child tax credit for their son, Matthew.
Total Deductions from AGI: $6,000 (itemized deductions) + $1,000 (child tax credit) = $7,000
Total Income:
Marc's salary: $64,000
Michelle's salary: $12,000
Interest from municipal bonds: $350
Interest from corporate bonds: $500
Total Income: $64,000 + $12,000 + $350 + $500 = $76,850
Adjusted Gross Income (AGI):
AGI = Total Income - Total Deductions from AGI
AGI = $76,850 - $7,000 = $69,850
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A unique feature of partnerships (compared with publicly owned corporations) is that ______________________ .
A)They do not have to follow GAAP.
B)They are not governed by state laws.
C)Their books have to be maintained on the tax basis.
D)They do not file income tax returns.
E)None of the above.
Final answer:
In partnerships, each partner pays taxes on their share of the income, unlike corporations where the business itself is taxed. Option E) None of the above is the correct answer, as none of the provided options (A through D) describe this distinctive feature.
Explanation:
The unique feature of partnerships compared with publicly owned corporations is that each partner pays taxes on their share of the income; the business itself does not have to pay taxes. Partnerships are governed by state laws, and must generally adhere to Generally Accepted Accounting Principles (GAAP), although there can be differences in reporting when it comes to tax purposes. Unlike corporations, which are taxed at the corporate level and then again at the shareholder level when dividends are paid (double taxation), partnerships pass through the income to the partners who then report it on their individual tax returns.
Therefore, the correct answer to the question is none of the options (A through D) directly describe the unique feature of partnerships, so the correct choice is E) None of the above.
New York Bank provides Food Canning, Inc. a $250,000 line of credit with an interest rate of 1.75 percent per quarter. The credit line also requires that 1 percent of the unused portion of the credit line be deposited in a non-interest bearing account as a compensating balance. Food Canning, Inc.'s short-term investments are paying 1.2 percent per quarter. What is the effective annual interest rate on this arrangement if the line of credit goes unused all year
Answer:
effective interest rate: 2.37%
Explanation:
250,000 x 1% = 2,500
We will calcualtethe interest expense for the credit line and the interest revneue for the credit being in short-term investment through the whole year
so we got:
[tex]Principal \: (1+ r)^{time} = Amount[/tex]
Principal 250,000.00
time 4.00
rate 0.00175
[tex]250000 \: (1+ 0.00175)^{4} = Amount[/tex]
Amount 267,964.76
interst expense for the credit line 17.964.76
2,500 will be deposited
if we keep the credit line available through short term investment we will got:
[tex]Principal \: (1+ r)^{time} = Amount[/tex]
Principal 247,500.00
time 4.00
rate 0.01200
[tex]247500 \: (1+ 0.012)^{4} = Amount[/tex]
Amount 259,595.56
interest revenue 12.095,56
so we recieve 247,500
and paid 17.964.76 interest
and gain 12.095,56
interest net: 5.869,2
5,869.2/247,500 =0,02371393 = 2.37%
Portions of the financial statements for Myriad Products are provided below. MYRIAD PRODUCTS COMPANY Income Statement For the Year Ended December 31, 2018 ($ in millions) Sales $ 900 Cost of goods sold 315 Gross margin 585 Salaries expense $ 150 Depreciation expense 98 Patent amortization expense 5 Interest expense 38 Loss on sale of land 4 295 Income before taxes 290 Income tax expense 145 Net Income $ 145 MYRIAD PRODUCTS COMPANY Selected Accounts from Comparative Balance Sheets December 31, 2018 and 2017 ($ in millions) Year 2018 2017 Change Cash $ 138 $ 130 $ 8 Accounts receivable 261 277 (16 ) Inventory 465 480 (15 ) Accounts payable 203 194 9 Salaries payable 107 116 (9 ) Interest payable 57 50 7 Income taxes payable 48 40 8 Required: Prepare the cash flows from operating activities section of the statement of cash flows for Myriad Products Company using the indirect method.
Answer:
Explanation:
The preparation of the Cash Flows from Operating Activities—Indirect Method is shown below:
Cash flow from Operating activities - Indirect method
Net income $145
Adjustment made:
Add : Depreciation expense $98
Add: Loss on sale of land $4
Add: Amortization expense $5
Less: Increase in cash balance -$8 ($138 - $130)
Add: Decrease in accounts receivable $16 ($261 - $277)
Add: Decrease in inventory $15 ($465 - $480)
Add: Increase in accounts payable $9 ($203 - $194)
Less: Decrease in salaries payable -$9 ($107 - $116)
Add: Increase in interest payable $7 ($57 - $50)
Add: Increase in income tax payable $8 ($48 - $40)
Total of Adjustments $145
Net Cash flow from Operating activities $290
The cash flows from operating activities for Myriad Products Company using the indirect method is calculated by adjusting the net income for non-cash expenses, losses and gains on sales of assets, and changes in current operating assets and liabilities. The calculated cash flow from operating activities for 2018 is $298 million.
Explanation:First explain the steps involved in preparing the cash flow from operating activities section of the statement of cash flows using the indirect method, and then apply these steps to your provided financial information from Myriad Products Company.
The first step in this process is to start with the net income from the income statement, which is $145 million for Myriad Products Company.Next, we need to adjust the net income for non-cash expenses and losses and gains on sales of assets. In this case, we have a depreciation expense of $98 million, patent amortization expense of $5 million and a loss on sale of land of $4 million. So, we add these amounts back to the net income.Finally, we adjust for changes in current operating assets and liabilities. Here, we have a decrease in accounts receivable of $16 million, a decrease in inventory of $15 million, an increase in accounts payable of $9 million, a decrease in salaries payable of $9 million, an increase in interest payable of $7 million, and an increase in income taxes payable of $8 million. Decreases in current assets and increases in current liabilities are added to the net income while decreases in current liabilities are subtracted.Adding all these together, we get the cash flow from operating activities to be: $145 + $98 + $5 + $4 + $16 + $15 + $9 - $9 + $7 + $8 = $298 million
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House of Pianos, Inc., purchases pianos from a well-known manufacturer and sells them at the retail level. The pianos sell, on the average, for $3,300 each. The average cost of an piano from the manufacturer is $1,492. The costs that the company incurs in a typical month are presented below: Costs Cost Formula Selling: Advertising ......................................... $955 per month Delivery of pianos ............................... $61 per piano sold Sales salaries and commissions............. $4,823 per month, plus 4% of sales Utilities ............................................... $633 per month Depreciation of sales facilities .............. $4,944 per month Administrative: Executive salaries ................................ $13,490 per month Depreciation of office equipment .......... $943 per month Clerical ............................................... $2,499 per month, plus $37 per piano sold Insurance ........................................... $719 per month During November, the company sold and delivered 60 pianos. Required: 1. Prepare a traditional income statement for September. 2. Prepare a contribution format income statement for September. Show costs and revenues on both a total and a per unit basis down through contribution margin. 3. Refer to the income statement you prepared in (2) above. Why might it be misleading to show the fixed costs on a per unit basis?
Answer:
Sales = Units of pianos sold × Price of each piano
= 60 × $3,300
= $198,000
Cost of Goods Sold = Average cost of each piano × Units of pianos sold
= $1,492 × 60
= $89,520
Gross profit on sales = Sales - Cost of Goods Sold
= $198,000 - $89,520
= $108,480
Total selling expenses:
= Advertising + Delivery + Sales salaries + Commissions + Utilities + Depreciation
= $955 + ($61 × 60) + $4,823 + (198,000 x 4%) + $633 + $4,944
= $955 + 3,660 + $4,823 + $7,920 + $633 + $4,944
= $22,935
Total Admin Expenses:
= Executive salaries + Depreciation + Clerical + Additional clerical expense + Insurance
= $13,490 + $943 + $2,499 + (37 × 60) + $719
= $19,871
Operating Income:
= Gross profit on sales - Total selling expenses - Total Admin Expenses
= $108,480 - $22,935 - $19,871
= $65,674
Final answer:
The answer provides a traditional and contribution format income statement for House of Pianos, Inc. in September, and explains why showing fixed costs on a per unit basis can be misleading.
Explanation:
House of Pianos, Inc. Traditional Income Statement for September:
Total Sales: $198,000
Total Cost of Goods Sold: $89,520
Total Selling and Administrative Expenses: $24,454
Contribution Format Income Statement for September:
Contribution Margin: $57,360
Fixed Costs: $25,782
Net Income: $31,578
Showing fixed costs on a per unit basis can be misleading because fixed costs remain constant regardless of the number of units produced or sold. Therefore, as the number of units produced increases, fixed costs spread out over more units, reducing the fixed cost per unit.
An analyst with a leading investment bank tracks the stock of Mandalays Inc. According to her estimations, the value of Mandalays Inc.’s stock should be $78.54 per share, but Mandalays Inc.’s stock is trading at $99.25 per share on the New York Stock Exchange (NYSE). Considering the analyst’s expectations, the stock is currently:
a. In equilibrium
b. Overvalued
c. Undervalued
Answer:
b. Overvalued
Explanation:
Overvalued stocks are securities that trade higher than their fair market value, i.e. the value that the company's fundamentals, such as earnings or revenues justify.
The stock of Mandalays Inc. is currently overvalued.
Explanation:The stock of Mandalays Inc. is currently overvalued because it is trading at $99.25 per share on the NYSE, while the analyst's estimation suggests that the value should be $78.54 per share. When a stock is overvalued, it means that the market price is higher than what is considered fair value based on various factors such as earnings, growth prospects, and industry comparisons.
In the JK partnership, Jacob's capital is $140,000, and Katy's is $40,000. They share income in a 3:2 ratio, respectively. They decide to admit Erin to the partnership. Each of the following questions is independent of the others.
Refer to the information provided above. Erin invests $50,000 for a one-fifth interest in the total capital of $230,000. The journal entry to record Erin's admission into the partnership would include
A. a debit to Jacob, Capital for $2,400.
B. a credit to Erin, Capital for $50,000.
C. a credit to Katy, Capital for $1,600.
D. a credit to Cash for $50,000.
Answer:
C. a credit to Katy, Capital for $1,600.
Explanation:
In the given instance, it is provided that Erin is admitted for 1/5th share, for which he brings $50,000
Now, for a total of $230,000 share
1/5 = $230,000 [tex]\times[/tex] 1/5 = $46,000
Since Erin brings $50,000, that means there is goodwill worth $50,000 - $46,000 = $4,000
Now, as Erin brings cash of $50,000, cash will be debited by same.
For recording goodwill, Both old partners account will be credited.
$4,000 [tex]\times[/tex] 3/5 = $2,400 for Jacob
$4,000 [tex]\times[/tex] 2/5 = $1,600 for Katy.
Therefore, as old partner's account have to be credited, correct entry is
Katy's Capital account for $1,600.
The journal entries to record Erin's admission into the partnership include a credit to Erin, Capital for $50,000, reflecting the increase in her equity, and a credit to Cash for $50,000, indicating the increase in the partnership's cash account.
Explanation:The correct answer to this question is option B: a credit to Erin, Capital for $50,000, and D: a credit to Cash for $50,000. When Erin is admitted into the partnership, she invests a capital of $50,000. This amount is reflected in the journal entry by crediting Erin, Capital, indicating an increase in her equity in the partnership. Simultaneously, the cash account of the partnership also increases by $50,000 due to Erin's investment. Therefore, this is recorded as a credit to Cash. The other options are irrelevant as there is nothing in the given scenario to suggest any changes in Jacob's and Katy's capital at this instance.
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Which of the following statements is true of foreign direct investment?
a. It is the act of buying an ownership stake within a country that provides capital.
b. It is the process of investing in, controlling, and managing value-added activities in other countries.
c. It is the process of tracking an index or measuring of a foreign market.
d. It is the act of investing in a foreign-owned company within a country.
Answer: Option B
Explanation: Foreign direct investment can be defined as a situation in which a company invest in a country other than its home country. In such a case, the company starts a new setup in the new country with the same business operation.
For example an automobile company of Germany opening their car showrooms in america.
Thus, from the above we can conclude that the correct option is B.
The correct definition for foreign direct investment is the process of investing in, controlling, and managing value-added activities in other countries.
Explanation:The correct statement about foreign direct investment is: 'It is the process of investing in, controlling, and managing value-added activities in other countries'. This statement (option b) accurately describes foreign direct investment (FDI). FDI refers to an investment made by an entity based in one country into an entity or corporation based in another country. Essentially, the investor purchases business assets in the foreign country, not just shares. Therefore, the investor has significant control over the company into which the investment is made.
Options a, c, and d are not completely correct. Although buying an ownership stake (option a) and investing in a foreign-owned company (option d) can be part of FDI, they do not fully define it. Tracking an index or measure of a foreign market (option c) describes a type of portfolio investment, not FDI.
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Which of the following is an example of financial intermediation? A. A saver makes a deposit in a credit union, and the credit union makes a loan to a member for a new car. B. U.S. Treasury sells bonds to fund government spending. C. IBM issues a bond that is sold to a retired person. D. IBM issues common stock that is sold to a college student.
Answer:
A. A saver makes a deposit in a credit union, and the credit union makes a loan to a member for a new car.
Explanation:
A financial intermediation is when an institution acts as the joint-point between two parties in a financial transaction. This means, lender and borrowers, and buyer and seller.
The saver deposit in the credit union. (lender)
And the financial intermediate give a loan to a member (borrower)
This spread the risk and makes transaction more easy, as both parties deal with the credit union, not with themselves.
The credit union faces and assumes obligation with both:
for the saver to give the deposit
and with the borrower that if it meets the requirement will receive the cash for the car and will return in a pre-arrenged method with a given interest and time defined.
Wexpro, Inc., produces several products from processing 1 ton of clypton, a rare mineral. Material and processing costs total $60,000 per ton, one-fourth of which is allocated to product X15. Seven thousand units of product X15 are produced from each ton of clypton. The units can either be sold at the split-off point for $9 each, or processed further at a total cost of $9,500 and then sold for $12 each. Required: 1. What is the financial advantage (disadvantage) of further processing product X15? 2. Should product X15 be processed further or sold at the split-off point?
Answer:
Wexpro, Inc. gains $11500 (59500-48000) by processing further X15. It is a financial advantage to compete with a more complex product. X15 should be processed further.
Explanation:
Wexpro, Inc., produces several products from processing 1 ton of clypton, a rare mineral.
Material and processing costs total $60,000 per ton, one-fourth of which is allocated to product X15.
60000*0,25=$15000
Seven thousand units of product X15 are produced from each ton of clypton. The units can be sold at the split-off point for $9 each.
Sales before split-off point:
Sales 7000u*$9= $63000
Material and processing cost= $15000
Total=$48000
The units can be processed further at a total cost of $9,500 and then sold for $12 each.
Sales after split-off point:
Sales= 7000*12=$84000
Split-off cost= $9500
Material and processing cost= $15000
Total= $59500
Wexpro, Inc. gains $11500 (59500-48000) by processing further X15. It is a financial advantage to compete with a more complex product. X15 should be processed further.
The financial advantage of further processing product X15 is $21,000. Since this advantage is greater than the additional processing cost of $9,500, it is financially beneficial to continue processing X15 beyond the split-off point.
Explanation:We can begin by calculating the cost of product X15 at the split-off point. Since one-fourth of the total cost of $60,000 is allocated to product X15, the cost allocated to this product is $15,000 ($60,000 / 4). This produces 7,000 units, so the cost per unit at the split-off point is $2.14 ($15,000 / 7,000).
Now, let's consider further processing. The additional cost of processing is $9,500 which gives a total cost accounted for unit X15 of $24,500 ($15,000+$9,500). The cost per unit after further processing is $3.50 ($24,500/7000).
The selling price per unit at the split-off point is $9, and when further processed, it is $12. So, the financial advantage (disadvantage) of further processing product X15 is the difference between the selling price of the units when further processed and the selling price at the split-off point. ($12 - $9) * 7000 items = $21,000 advantage.
In conclusion, the cost of further processing ($9,500) is less than the financial advantage ($21,000), product X15 should be processed further.
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LeBlanc Company had the following department data:Physical UnitsWork in process, July 1 18,000Completed and transferred out 81,000Work in process, July 31 27,000Materials are added at the beginning of the process. What is the total number ofequivalent units for materials in July?
Answer:
FIFO 90,000
W/A 108,000
Explanation:
There are two method for process costying FIFO and Weighted Average (WA) as there is no indication we will do both:
The difference is that FIFO discriminate bwetween started and completed units and completed units. therefore, the complete beginning inventory is subtracted.
As the materials are added at the beginning of the period then both, beginning and ending are at 100%
completed units 81,000
ending WIP 27,000
beginning WIP (18,000)
equivalent units FIFO 90,000
complete units 81,000
ending WIP 27,000
equivalent untis Weighted average 108,000
The total number of equivalent units for materials in July is 108,000 units.
To determine the total number of equivalent units for materials in July for LeBlanc Company, we need to consider the process described in the given data. Here's a step-by-step method to calculate it:
Physical Units Calculation: Before Conversion
Units in Work in Process, July 1: 18,000 units
Units Completed and Transferred Out: 81,000 units
Units in Work in Process, July 31: 27,000 units
Materials Addition
Since materials are added at the beginning of the process, all units in work in process at the end of the period (July 31) will have 100% of the materials added.
Total Equivalent Units for Materials
To find the total equivalent units for materials, we add the units completed during the month to the units in the ending work in process (WIP), because they all have materials added:
{Total Equivalent Units for Materials} ={Units Completed and Transferred Out} + {Ending WIP}
{Total Equivalent Units for Materials} = 81,000 { units} + 27,000{ units}
Therefore, the total number of equivalent units for materials in July is 108,000 units.
Clemens Cars' job cost sheet for Job A40 shows that the cost to add security features to a car was $15,500. The car was delivered to the customer, who paid $20,200 in cash for the added features. What journal entries should Clemens record for the completion and delivery of Job A40?
Answer:
Cash 20,200 debit
Sales revenue 20,200
COGS 15,500
Finished Goods Invenotry 15,500
Explanation:
The revenue will be recognize by the amount billed to the customer. It is paying on cash, so our cash increases. We record that by debiting cash.
And we credit the sales revenue to increase our revenue.
Then we recognize the cost of goods sold, which are 15,500
This decrease our finished goods inventory by this ammount. Also, we post the expense for the cost of the goods sold.
Clemens Cars should make three journal entries: move the cost of the job to Finished Goods, record the sale and cash receipt, and document the cost of the sold job.
Explanation:The completion and delivery of Job A40 by Clemens Cars involves two main accounting entries. The first step is to transfer the cost of the job from Work in Process to Finished Goods. The second step is to record the sale and cash receipt from the customer.
The journal entries should be as follows:
Debit Finished Goods for $15,500 and Credit Work in Process for $15,500. This entry moves the cost of Job A40 from Work in Process to Finished Goods signifying that the job is completed.When the sale is made, debit Accounts Receivable/Cash for $20,200 and credit Sales for $20,200.Finally, when recording the cost of the sold job, Debit Cost of Goods Sold for $15,500 and Credit Finished Goods for $15,500. This entry reflects selling the completed Job A40 and earning from it.Learn more about Journal Entries here:https://brainly.com/question/33762471
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The following information pertains to Alpha Computing at the end of 2015:
Assets $980,000
Liabilities $437,500
Net Income $242,500
Common Stock $395,000
Alpha Computing's Retained Earnings account had a zero balance at the beginning of 2015.
What amount of dividends did the company pay in 2015?
Answer:
The amount of dividends the company paid in 2015 is $95000.
Explanation:
Dividends is paid from the net income of the company and the net income includes retained earnings balance at the end of each financial year.
Assers = stockholders equity(stock + retained earnings) + liabilities
$980,000 = $395,000 + retained earnings + $437,500
retained earnings = $147500
net income = dividends + retained earnings
dividends = net income - retained earnings
= $242,500 - $147500
= $95000
Therefore, the amount of dividends the company paid in 2015 is $95000.
Marginal utility is the:
A. sensitivity of consumer purchases of a good to changes in the price of that good.
B. change in total utility obtained by consuming one more unit of a good.
C. change in total utility obtained by consuming another unit of a good divided by the change in the price of that good.
D. total utility associated with the consumption of a certain number of units of a good divided by the number of units consumed.
Answer : Option b
Explanation:
In simple words, marginal utility refers to the addition to the utility satisfaction of the consumer when he or she consumes one more unit of such commodity.
If the consumer gets more satisfied after additional consumption then the marginal utility will be positive or otherwise negative.
It is calculated by dividing the difference in utility with the difference in units.
Hence from the above we can conclude that the correct option is b.
Marginal utility refers to the change in total utility that a consumer experiences from consuming one additional unit of a good or service.
Explanation:Marginal utility, a key concept in economics, is best explained as B. the change in total utility obtained by consuming one more unit of a good. In other words, it measures the satisfaction a consumer gets from consuming one additional unit of a good or service. For instance, imagine you're eating ice cream. The first scoop brings you a lot of satisfaction (utility), but with each additional scoop, the satisfaction you receive (marginal utility) may decrease, remain the same, or even become negative if you end up feeling unwell from eating too much.
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Both the chart of accounts and the ledger __________. A. list the account names and numbers of the business B. provide the balance of each account at a specific point in time C. fulfill the task of showing all of the increases and decreases in each account D. All of the statements are correct.
Answer: (A) List the account names and numbers of the business.
Explanation:
The chart of the account is basically a listing of name of an account in which the company identified availability for the recording transaction in the general ledger. The company has high flexibility for tailor its both chart of account and ledger for its need and including accounts according to its particular needs.
The charts of the accounts has large and complex as company itself. The organization chart properly serve the outline for the accounting for the chart of account and the number of business.
Both the chart of accounts and the ledger list the account names and numbers of a business, provide the balance of each account at a specific point in time, and show all increases and decreases in each account. So, all of the given statements are correct.
Explanation:The chart of accounts and the ledger in business have several roles. They list the account names and numbers of the business, providing a structured overview of every single account within that business. They also provide the balance of each account at a specific point in time, allowing for accurate financial tracking. Finally, they fulfill the task of showing all of the increases and decreases in each account, which enables precise monitoring of the financial flow. Therefore, all of the statements - A, B, C - in your question are correct.
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Robinson Manufacturing found the following information in its accounting records: $ 519 comma 800 of direct materials used, $ 226 comma 700 of direct labor, and $ 775 comma 800 of manufacturing overhead. The Work in Process Inventory account had a beginning balance of $ 72 comma 400 and an ending balance of $ 87 comma 600. Compute the company's Cost of Goods Manufactured.
Answer:
Cost of good manufactured= $1507100
Explanation:
To calculate the cost of manufactured goods we need to use the following formula:
Cost of good manufactured= Beginning work in progress+ direct materials of the period + direct labor + manufactured overhead - ending work in progress
Beginning work in progress= 72400
Direct materials = beginning inventory + purchase - ending inventory= 519800
Direct labor= 226700
Manufactured overhead= 775800
Ending work in progress= 87600
Cost of good manufactured= 72400 + 519800 + 226700 + 775800 - 87600= $1507100
Required information
Use the following information for the Problems below.
Lansing Company’s 2017 income statement and selected balance sheet data (for current assets and current liabilities) at December 31, 2016 and 2017, follow.
LANSING COMPANY
Income Statement
For Year Ended December 31, 2017
Sales revenue $ 118,200
Expenses
Cost of goods sold 49,000
Depreciation expense 15,500
Salaries expense 25,000
Rent expense 9,700
Insurance expense 4,500
Interest expense 4,300
Utilities expense 3,500
Net income $ 6,700
LANSING COMPANY
Selected Balance Sheet Accounts
At December 31 2017 2016
Accounts receivable $ 6,300 $ 7,200
Inventory 2,680 1,890
Accounts payable 5,100 6,000
Salaries payable 1,020 770
Utilities payable 360 230
Prepaid insurance 330 420
Prepaid rent 360 250
Problem 16-1A Indirect: Computing cash flows from operations LO P2
Required:
Prepare the cash flows from operating activities section only of the company’s 2017 statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)
LANSING COMPANY
Cash Flows from Operating Activities—Indirect Method
For Year Ended December 31, 2017
Cash flows from operating activities:
Adjustments to reconcile net income to net cash provided by operations:
Answer:
Explanation:
The preparation of the Cash Flows from Operating Activities—Indirect Method is shown below:
Cash flow from Operating activities - Indirect method
Net income $6,700
Adjustment made:
Add : Depreciation expense $15,500
Add: Decrease in accounts receivable $900 ($6,300 - $7,200)
Less: Increase in inventory -$790 ($2,680 - $1,890)
Less: Decrease in accounts payable -$900 ($5,100 - $6,000
Add: Increase in salaries payable $250 ($1,020 - $770)
Add: Increase in utility payable $130 ($360 - $230)
Less: Decrease in prepaid insurance -$90 ($330 - $420
Add: Increase in prepaid rent $110 ($360 - $250)
Total of Adjustments $15,110
Net Cash flow from Operating activities $21,810
_____ refers to activities to plan, organize, lead, and control the flow of products, services, finances, and information that passes through a set of entities from a source to the customer.
a. Contingency planning
b. Demand chain management
c. Supply chain management
d. Enterprise resource planning
Answer:
C.
Explanation:
Supply chain management is the management of the flow of goods and services, finances and information and includes all processes that transform raw materials into final products.
Contingency planning is designed to help an organization respond effectively to a significant future event or situation that we don't know if it will happen.
Demand chain management is similar to supply chain management but more complex, where upstream and downstream relationships between customers and suppliers need to be managed to deliver the lowest cost to the customer across the entire supply chain.
Enterprise resource planning is the integrated management of main business processes,
Answer:
The correct answer is letter "C": Supply chain management.
Explanation:
Supply chain management is the cumulative network of people, entities, activities, information, and resources involved in moving raw materials, components and finished products from original suppliers to end-users. Supply chain management is crucial for most companies and can involve hundreds of o links at large corporations.
One primary function of Harriet's job is to study individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of her company's products and services to satisfy needs and the impacts that these processes have on the consumer and society. Harriet works in the field of _____.
Answer:
consumer behavior
Explanation:
Consumer behavior refers to the study of the behaviors and the wants and needs of the customers. The actions or activities which the consumers do in the market place which highlights their behavior studies under consumer behavior. In the above case, Harriet's job is specifically included under studying consumer behavior.