Answer:
1. bad debt expense debit 7940
allowance for bad debt credit 7940
2. allowance for bad debt debit 397
account receivable credit 397
3. account receivable debit 397
allowance for bad credit 397
4. cash debit 397
account receivable credit 397
Explanation:
the allowance will be the 1% of 794,000
then recognize the allowance for that ammount along with the bad debt expense
total write-off an account we decrease both, the allowance and account receivable
total reinstate the Parks account we do the previous entry backwards
lastly we post like any other collection from Account Receivable
6. A promoter: A. may have liability on the contracts he negotiates on behalf of the prospective corporation. B. does not hold any liability to third parties on preincorporation contracts. C. automatically becomes one of the initial directors of the corporation. D. is not liable on a preincorporation contract after the corporation’s adoption of the contract.
Answer:
The correct answer is A. may have liability on the contracts he negotiates on behalf of the prospective corporation.
Explanation:
The function of the promoter is basically to do a preliminary work incidental to the formation of a company, in which it is included the promotion, incorporation, and flotation, and this person is also in charge of soliciting people to invest money in the company, usually when the company is starting the business.
On September 30, World Co. borrowed $1,000,000 on a 9% note payable. World paid the first of four quarterly payments of $264,200 when due on December 30. In its income statement for the year, what amount should World report as interest expense?
Answer:
It would report 21,778 on interest expense
Explanation:
Because it is the first payment, we can use the compoun interest formula
[tex]Principal * (1+ r)^{time} = Amount[/tex]
[tex]$Amount - Principal = Interest Paid[/tex]
[tex]1,000,000 * (1+ 0.09)^{1/4} =1,021,778 [/tex]
[tex]1,021,778- 1,000,000= 21,778[/tex]
The rest of the cuota would be amortization of the principal
It is important to do not split the interest in four because the interest are decreasing over the course of the note life. That's because along with the interest accrued during the period World Co. is also paying a portion of the principal
The interest expense reported at the end of the year by World Co. would be $14,200, which is the interest portion of the first quarterly payment. Only this payment is considered as this is the only payment made in the year.
Explanation:The question asks for the amount that World Co. should report as an interest expense in its income statement for the year. World Co. borrowed $1,000,000 on a 9% note payable. This results in a total of $90,000 in interest for the year ( $1,000,000 * 0.09). Each quarterly payment includes both principal and interest. If the first payment was $264,200, subtracting the principal repayment ($1,000,000/4, which is $250,000), we get an interest payment of $14,200 ($264,200 - $250,000) for the first quarter. As World Co. only made a payment in the first quarter, the interest expense reported at the end of the year would be $14,200.
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George's Chemicals allocates overhead based on machine hours. Selected data for the most recent year follow. Estimated manufacturing overhead cost $235,300 Actual manufacturing overhead cost $244,800 Estimated machine hours 20,000 Actual machine hours 22,700 The estimates were made as of the beginning of the year, while the actual results were for the entire year. The predetermined manufacturing overhead rate per machine hour is closest to (Round your answer to the nearest cent.)
Answer:
Overehad Rate $11.765
Explanation:
[tex]\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate[/tex]
Estimated manufacturing overhead cost $235,300
Estimated machine hours 20,000
Overehad Rate $11.765
This means for every hours the machine are working, 11.76 dollars of MOH are generated.
The question if for the predeterminated rate, all the actual data is irrelevant.
Remember : The overhead rate is done by the dividision of the cost over a cost driver, which generally is labor hours or cost or machine hours.
The predetermined manufacturing overhead rate per machine hour is calculated by dividing the estimated manufacturing overhead cost by the estimated machine hours, which in this case is $11.77 per machine hour.
The question is asking to calculate the predetermined manufacturing overhead rate per machine hour. To find this, we need to divide the estimated manufacturing overhead cost by the estimated machine hours.
The formula to calculate the predetermined overhead rate is:
Estimated Manufacturing Overhead Cost ÷ Estimated Machine Hours = Predetermined Overhead Rate
Using the data provided:
$235,300 ÷ 20,000 hours = $11.77 per machine hour
Therefore, the predetermined manufacturing overhead rate per machine hour is $11.77, rounded to the nearest cent.
The following income statement was drawn from the records of Joel Company, a merchandising firm: JOEL COMPANY Income Statement For the Year Ended December 31, 2018 Sales revenue (2,000 units × $125) $ 250,000 Cost of goods sold (2,000 units × $65) (130,000 ) Gross margin 120,000 Sales commissions (10% of sales) (25,000 ) Administrative salaries expense (30,000 ) Advertising expense (20,000 ) Depreciation expense (24,000 ) Shipping and handling expenses (2,000 units × $1.00) (2,000 ) Net income $ 19,000 Required Reconstruct the income statement using the contribution margin format. Calculate the magnitude of operating leverage. Use the measure of operating leverage to determine the amount of net income Joel will earn if sales increase by 10 percent.
Answer:
(I)
[tex]\left[\begin{array}{cc}Sales&250,000\\Variable \: Cost&-157,000\\Contribution \: Margin&93,000\\Admin \: expense&-30,000\\adv \: expense&-20,000\\depreciation \: expense&-24,000\\Net \: Income&19,000\\\end{array}\right][/tex]
(II)
Net income will be of 28,300 if sales increase by 10%
Explanation:
(I)
Variable cost:
65 unit cost
+12.5 sales commision (125 x 10%)
+1 shipping and handling epxneses
78.5 total variable cost
78.5 x 2000 = 157,000 variable cost
(II)
[tex]\frac{ContributionMargin}{Profit} = $Operating Leverage\\[/tex]
[tex]Sales \: Revenue - Variable \: Cost = Contribution \: Margin[/tex]
250,000 - 157,000 = 93,000
93,000/19,000 = 4.894736842 = 4.895
10% increase in revenue will ncrease the net income by 148.95%
19,000 x 148.95% = 28300.05
Joel's revised income statement shows a contribution margin of $93,000 and net income of $19,000. The degree of operating leverage is 4.89, implying an increase in net income by 48.9% to $28,291 if sales grew by 10%.
Explanation:The contribution margin income statement contrasts with traditional income statements as it groups costs into variable and fixed costs rather than into product and period costs. First, let's reconstruct the income statement in the contribution margin format:
Sales revenue (2,000 units x $125) = $250,000 Variable costs = Cost of Goods Sold (2,000 units x $65) + Sales Commissions (10% of sales) + Shipping and Handling Expenses (2,000 units x $1) = $130,000 + $25,000 + $2,000 = $157,000 Contribution margin = Sales Revenue - Variable Costs = $250,000 - $157,000 = $93,000 Fixed costs = Administrative Salaries Expense + Advertising Expense + Depreciation Expense = $30,000 + $20,000 + $24,000 = $74,000 Net Income = Contribution Margin - Fixed Costs = $93,000 - $74,000 = $19,000The operating leverage measures the degree to which a firm uses fixed costs in its operations. The higher the degree of operating leverage, the more the firm's income will change for a given change in volume. The formula for the degree of operating leverage is contribution margin divided by net income. Therefore, the degree of operating leverage = $93,000 / $19,000 = 4.89. If sales increase by 10%, net income will increase by 4.89 times 10%, or 48.9%. Therefore, the new net income would be $19,000 x 1.489 = $28,291.
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If the discount rate is 10% and the cost of a project is $100 investment today with an expected payoff of $50 at the end of year 1 and an expected payoff $80 in year 2, should the project be undertaken?
Answer:
Yes, the project should be accepted.
Explanation:
We will calculate Net Present Value (NPV) of the project. For that cash inflows will be discounted at the rate given i.e. 10%
Current outflow = $100
Inflow at end of year 1 = $50, discounted value =
[tex]{\frac{1}{1+0.1}^1[/tex] X $50 = $45.45
Inflow at end of year 2 = $80, discounted value =
[tex]{\frac{1}{1+0.1}^2[/tex] X $80 = $66.115
NPV = Net inflow - Net outflow = $45.45 + $66.115 - $100 = $11.565
Since NPV is positive,
The project should be accepted.
Used Car Problems. ABC Motors sold a used car to Frank, who wrote a bad check for the car and left town but not before he sold the car to Betty, who paid $1,100 (a fair price for the car) believing that Frank had all rights to sell it. ABC Motors asked Frank to return the car, but he told them that he already sold it to Betty. What kind of title did Frank have?
Answer:
Frank had a voidable title, since he committed fraud by paying for the car with a bad check.
Explanation:
A voidable title is a title that can be voided by the grantee (ABC Motors) but is a valid title until voided. The grantee can void the title if some irregularity occurred during the transaction, e.g. fraud by paying with a bad check.
But the title passed to Betty is a good title, since she was an innocent good faith buyer and when she purchased the car the title had not been voided.
Database Systems is considering expansion into a new product line. Assets to support expansion will cost $750,000. It is estimated that Database Systems can generate $2,150,000 in annual sales, with an 7 percent profit margin. What would net income and return on assets (investment) be for the year? (Input your return on assets answer as a percent rounded to 2 decimal places.)
Answer:
The net income is $150,500 and the return on assets is 20.06 %
Explanation:
The formula for computing net income and return on assets is shown below and the computation is also made.
Net income = Sales revenue × Profit margin
= $2,150,000 × 7%
= $150,500
Return on assets = Net income ÷ total assets
= $150,500 ÷ $750,000
= 0.2006
= 20.06 %
Thus, the net income is $150,500 and the return on assets is 20.06 %
The net income for the year would be $150,500 and the return on assets would be 20%.
Explanation:First, let's calculate the net income:
Net income = Sales revenue * Profit margin
Net income = $2,150,000 * 0.07
Net income = $150,500
Now, let's calculate the return on assets:
Return on assets (ROA) = Net income / Total assets
ROA = $150,500 / $750,000
ROA = 0.20 or 20%
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Assume that you are considering the purchase of a 15-year bond with an annual coupon rate of 9.5%. The bond has face value of $1,000 and makes semiannual interest payments. If you require an 11.0% nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond?
Answer:
We are going to pay $892.137 or less for the bonds.
Explanation:
We need to calculate the present value of the bond at 11% interet rate
Cashflow from the bond:
Principal x interest = interest service
1,000 x 9.5% = 95
Present value of annuity of 95 during 15 year at 11%
[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
[tex]95 * \frac{1-(1+.11)^{-15} }{.11} = PV\\[/tex]
Present value of the interest service 683,1326097
Second we have to calculate the present value of the 1,000 principal in 15 years
[tex]\frac{Amount}{(1+rate)^{time}} ) = PV[/tex]
[tex]\frac{1,000}{(1+0.11)^{15}} ) = PV[/tex]
209.0043467
Finally we add both together for the present value fothe bond at our rate
209.0043467+ 683,1326097 = 892.1369564 = 892.137
Common stock value long dash Variable growth Personal Finance Problem Home Place Hotels, Inc., is entering into a 3-year remodeling and expansion project. The construction will have a limiting effect on earnings during that time, but when it is complete, it should allow the company to enjoy much improved growth in earnings and dividends. Last year, the company paid a dividend of $2.30. It expects zero growth in the next year. In years 2 and 3, 3% growth is expected, and in year 4, 16% growth. In year 5 and thereafter, growth should be a constant 11% per year. What is the maximum price per share that an investor who requires a return of 15% should pay for Home Place Hotels common stock
Answer: Current stock price ([tex]P_{0}[/tex]) = $ 51.71
Explanation:
First we'll calculate the dividends for the next 5 years and the respective Terminal value in [tex]5^{th}[/tex] year .
i.e. ,
[tex]D_{0}[/tex] = $ 2.30
[tex]D_{1}[/tex] = [tex]D_{0}[/tex] [tex]\times[/tex] (1 + [tex]Growth rate_{year 1}[/tex])
[tex]D_{1}[/tex] = $ 2.30 × ( 1 + 0%) = $ 2.30
[tex]D_{2}[/tex] = [tex]D_{1}[/tex] [tex]\times[/tex] (1 + [tex]Growth rate_{year 2}[/tex])
[tex]D_{2}[/tex] = $ 2.30 × ( 1 + 3%) = $ 2.36
[tex]D_{3}[/tex] = [tex]D_{2}[/tex] [tex]\times[/tex] (1 + [tex]Growth rate_{year 3}[/tex])
[tex]D_{3}[/tex] = $ 2.36 × ( 1 + 3%) = $ 2.43
[tex]D_{4}[/tex] = [tex]D_{3}[/tex] [tex]\times[/tex] (1 + [tex]Growth rate_{year 4}[/tex])
[tex]D_{4}[/tex] = $ 2.43 × ( 1 + 16%) = $ 2.819
[tex]D_{5}[/tex] = [tex]D_{4}[/tex] [tex]\times[/tex] (1 + [tex]Growth rate_{year 5}[/tex])
[tex]D_{5}[/tex] = $ 2.819 × ( 1 + 11%) = $ 3.129
∵ The growth rate after [tex]5^{th}[/tex] year = 11%
Required rate of return (r) = 15%
∴ Terminal value ([tex]P_{5}[/tex]) = [tex]\frac{D_{5} \times (1 + Growth rate)}{Required rate of return - Growth rate}[/tex]
Terminal value ([tex]P_{5}[/tex]) = [tex]\frac{ 3.129 \times (1 + 0.11)}{0.15 - 0.11}[/tex]
Terminal value ([tex]P_{5}[/tex]) = $ 86.85
Now, we'll compute the price per share :
Current stock price ([tex]P_{0}[/tex]) = [tex]\left [ \frac{D_{1}}{(1 + r)^{n}} + \frac{D_{2}}{(1 + r)^{n}} +\frac{D_{3}}{(1 + r)^{n}} + \frac{D_{4}}{(1 + r)^{n}} + \frac{D_{5}}{(1 + r)^{n}} + \frac{P_{5}}{(1 + r)^{n}}\right ][/tex]
where;
n = respective years
r = required rate of return
∴ Current stock price ([tex]P_{0}[/tex]) = [tex]\left [ \frac{2.30}{(1 + 0.15)^{1}} + \frac{2.36}{(1 + 0.15)^{2}} +\frac{2.43}{(1 + 0.15)^{3}} + \frac{2.819}{(1 + 0.15)^{4}} + \frac{3.129}{(1 + 0.15)^{5}} + \frac{86.85}{(1 + 0.15)^{5}}\right ][/tex]
Current stock price ([tex]P_{0}[/tex]) = ( 2 + 1.78 + 1.59 + 1.611 + 1.55 + 43.18)
Current stock price ([tex]P_{0}[/tex]) = $ 51.71
Final answer:
To determine the maximum price per share, present value calculations using the Dividend Discount Model (DDM) for the expected dividends with variable growth rates are needed. Since not all details are provided, a numerical answer cannot be given.
Explanation:
To calculate the maximum price per share that an investor who requires a return of 15% should pay for Home Place Hotels common stock, we would need to discount the future dividends at the investor's required rate of return and then sum these present values. The dividends are expected to be $2.30 with no growth in the first year, followed by 3% growth for the next two years, then a jump to 16% growth in the fourth year, and finally stabilizing at 11% growth from the fifth year onwards. We use the dividend discount model (DDM) for variable growth rates to calculate the present value of dividends, adjusting for growth, and then discount those values back to the present at the investor's required rate of return.
However, as the detailed information needed to perform these calculations is not provided in the question, we cannot provide a numerical answer. Accordingly, an investor's willingness to pay for a share would depend on their required rate of return and the dividends forecasted by Home Place Hotels common stock, taking into account the various growth stages of the company's expansion project. In practice, factors such as market conditions, the company's overall financial health, investor sentiment, and external economic events would also impact the stock's value.
The unemployment rate:A. is measured by the number of people who are unemployed divided by the labor force.B. is never zero.C. measures what percentage of our population is currently looking for a job and can't find one.D. All of these are true.
The unemployment rate measures the percentage of the population that is actively seeking employment but can't find a job.The correct option is D.
Explanation:The correct answer is D. All of these are true.The unemployment rate is a measure of the number of people who are unemployed divided by the labor force. It is never zero because there will always be some level of unemployment in an economy.
It also represents the percentage of the population that is currently looking for a job but can't find one.
This means that it does not include people who are not actively seeking employment, such as retired individuals or those who have given up searching for work.The correct option is D.
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The unemployment rate is A. measured by the number of people who are unemployed divided by the labor force and it is never zero. It reflects the percentage of the population currently looking for a job and unable to find one.
Explanation:The unemployment rate is a key economic indicator that measures the percentage of the labor force without a job and actively seeking employment. It reflects the health of the job market and overall economy. The rate is calculated by dividing the number of unemployed individuals by the total labor force and is often reported monthly by government agencies.
Different types of unemployment, such as frictional, structural, and cyclical, can affect the overall rate, influencing government policy and economic decision-making. The unemployment rate is measured by the number of people who are unemployed divided by the labor force. It is never zero and measures what percentage of our population is currently looking for a job and can't find one.
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1. On a $375,000 home loan, you can either finance at 5.6% for 20 or 30 years. Find the monthly payment and the total paid over each loan. Which loan do you pay more interest on. How much more interest is paid? Are you shocked at the difference?
Answer:
(20 years) Cuota = 2,600.80
Interest 249,192
(30 years) Cuota 2,152.80
Interest 400,008
Diference: 400,008 - 249,192 = 150,816
30 year loan paid 150,816 more interest expense
Explanation:
(20 years)
[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
[tex]PV \div \frac{1-(1+r)^{-time} }{rate} = C\\[/tex]
[tex]375,000 \div \frac{1-(1+0.056/12)^{-240} }{0.056/12} = C\\[/tex]
monthly interest .056/12
time 20 years x 12 month a year = 240
Cuota = 2,600.80
Interest
Cuota x payment - principal = interest
240 x 2600.8 - 375,000 = 249,192
(30 years)
[tex]375,000 \div \frac{1-(1+0.056/12)^{-360} }{0.056/12} = C\\[/tex]
monthly interest .056/12
time 30 years x 12 month a year = 360
Cuota 2,152.80
Interest
Cuota x payment - principal = interest
360 x 2152.8 - 375,000 = 400,008
Project A has a predicted payback period of 2.5 and Project B has a predicted payback period of 5. Based on this information we can conclude that Select one: A. more information should be gathered before deciding on which project, if either, is desirable. B. Project A is preferred to Project B. C. Project B provides twice the return of Project A. D. Project B is preferred to Project A, but it is not necessarily twice as profitable.
Answer:
A. more information should be gathered before deciding on which project, if either, is desirable.
Explanation:
The lower Payback Period is not sufficient information to decide which project is more profitable. The payback period indicates when in the life of a project the initial investment principal cash flow is achieved.
But to decide about a certain project it is better to know the interest yield, it is also important to get the life of the project and other information.
For example:
a.- 250 investment 100 per year payback in 2.5-year life 3 years
b.- 500 investment 100 per year payback in 5-year life 20 years
While A payback occurs before project B is better
On June 30, 2018, K Co. had outstanding 10%, $19,000,000 face value bonds maturing on June 30, 2023. Interest is payable semiannually every June 30 and December 31. On June 30, 2018, after amortization was recorded for the period, the unamortized bond premium was $69,000. On that date, K acquired all its outstanding bonds on the open market at 99 and retired them. At June 30, 2018, what amount should K Co. recognize as gain on redemption of bonds before income taxes?
Answer:
K Co would recognize $259,000 as gain on redemption of bonds before income taxes.
Explanation:
Given information available to us -
Face value of the bond@10% = $19,000,000 (on June 30,2018)
Unamortized bond premium = $69,000
Interest is payable semi annually on every June 30 and December 31
On June 30 K acquired all outstanding bonds at 99% from the open
market and retired them.
So for calculating the gain the first would be to calculate the face value of the bonds on June 30, 2018, which would be equal to =
Face value of the bond + unamortized bond premium
Book value of the bonds = $19,000,000 + $69,000
= $19,069,000
and now we will subtract the redemption price from the book value to see how much gain will come,
GAIN= Book value of bonds - 99% of the face value of the bonds
= $19,069,000 - $18,810,000
= $259,000
Final answer:
K Co. should recognize a gain of $259,000 on the redemption of the bonds before income taxes, calculated by subtracting the bond repurchase price at 99% of face value from the carrying amount with the unamortized bond premium.
Explanation:
To determine the gain on redemption of bonds before income taxes, we need to consider the carrying amount of the bonds and the price at which they were repurchased. K Co.'s bonds had a face value of $19,000,000 and an unamortized bond premium of $69,000, giving them a carrying amount of $19,069,000 ($19,000,000 + $69,000). On June 30, 2018, K Co. repurchased the bonds at 99% of their face value, which means they paid 99% of $19,000,000, equaling $18,810,000.
To calculate the gain, subtract the repurchase price from the carrying amount: $19,069,000 - $18,810,000 = $259,000. Therefore, K Co. should recognize a gain of $259,000 on the redemption of the bonds before income taxes.
On January 1, 2014, Howe Company's Accounts Receivable balance was $11,400 and the balance in the Allowance for Doubtful Accounts was $570. On January 5, 2014, a $340 uncollectible account was written-off as uncollectible. Assuming that no other transactions related to accounts receivable had occurred, the net realizable value of accounts receivable immediately after the write-off was Multiple Choice A) $11,400. B) $10,830. C) $10,490. D) $11,060.
Answer:
B) $10,830.
Explanation:
AR 11400
Allowance 570
net 10830
allowane 340
AR 340
AR 11060
Allowance 230
net 10830
The is no change in the net account receivable
Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows. Indirect labor $1.20 Indirect materials 0.50 Utilities 0.20 Fixed overhead costs per month are Supervision $4,400, Depreciation $1,500, and Property Taxes $500. The company believes it will normally operate in a range of 7,700–10,700 direct labor hours per month. Prepare a monthly manufacturing overhead flexible budget for 2017 for the expected range of activity, using increments of 1,000 direct labor hours.
Answer:
[tex]\left[\begin{array}{cccccc}-&rate&7,700&8,700&9,700&10,700\\IL&1.2&9,240&10,440&11,640&12,840\\IM&0.5&4620&5,220&5,820&6,420&Utilities&0.2&924&10,44&1,164&1,284&Total \: Variable&1.9&14,784&16,704&18,624&20,544&Fixed&6,100&6,100&6,100&6100&6,100&MO&-&20,884&22,804&24724&26,644&\end{array}\right][/tex]
Explanation:
You have to apply the rate to each activity level.
for example
DL rate 1.20 x 7700 = 9240
The fixed cost remains constant.
An increase in cost (fixed cost or variable cost) tends to increase the operating breakeven point, whereas an increase in the sales price per unit will decrease the operating breakeven point.
True or false ?
Answer:
TRUE
Explanation:
Let's see the BEP formula:
[tex]\frac{Fixed Cost}{Sales - Variable Cost} = BEP[/tex]
Notice that Fixed cost are being divide by the contribution margin, which is sales - variable cost
Let's see each statment and check if there is true.
Remember all of them must be true
if fixed cost increase, then the ammount to cover is higher, so the BEP increase:
Imagine you are sharing candies to some kinds and suddently 10 more kind arrives, you are gonna need more candies to share to each children the same ammount.
TRUE
IF variable cost decrease:
the contribution margin decrease, because more portion of the sale is used to pay the variable cost, which makes the effort of paying the fixed cost higher.
like when you are saving for a certain ammount, let's say $100 per month to achieve $1,000 If an unexpected expense happens and you save $50 per month, you going to take more time.
TRUE
If Sales Increase, then the contribution margin increase, so it makes the effort to pay the fixed cost more easy, like if in the previous example instead of going down we went up to $200. The 1,000 goal would be more achievable.
TRUE
All statment are true so the sentence is TRUE
Elephant, Inc.'s cost of goods sold for the year is $2,000,000, and the average merchandise inventory for the year is $129,000. Calculate the inventory turnover ratio of the company. (Round your answer to two decimal places.)
Answer:
15.50
Explanation:
Stock turnover or inventory turnover can be defined as the ratio of the number of times a company has sold or replaced inventory during a given period , generally a year, .
.
It can be computed as follows -
=[tex]\frac{cost of goods sold}{average stock}[/tex]
therefore,
=[tex]\frac{2,000,000}{129,000}[/tex]
= 15.50
A grocery store chain recently rolled out a customer loyalty program that sends the customer a $5 coupon towards their next purchase for every $250 they spend at the store. This is an example of strategic use of bargaining power of suppliers True False
Answer:
False
Explanation:
The bargaining power of suppliers (Term of Michael Porter) is a force that shapes the competitive structure of a market.
It represents the way of put pressure by raising the prices or lowering the quality or quantity of the product. This power makes the buyer profits decrease.
In your case, this is a policy set to the customer, and it is not increasing the price, decreasing quantity or lowering the quality.
It is more policy to induct loyalty from the customer to purchase again from the grocery store.
A grocery store chain recently rolled out a customer loyalty program that sends the customer a $5 coupon towards their next purchase for every $250 they spend at the store. This is an example of strategic use of bargaining power of suppliers is the false statement.
Supplier bargaining power, to use Michael Porter's term, is a factor that affects how a market is competitively structured.
It stands for the method of applying pressure by raising prices or diminishing the product's quality or quantity. The buyer earnings fall as a result of this power. In this case, this is a customer-set policy; a price increase, a decrease in supply, or a drop in quality are not involved.
It is increasingly common practice to reward customers for their loyalty by having them make additional grocery purchases.
Thus, it is a false statement.
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LBC Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 3.0 hours of direct labor at the rate of $26.00 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June. The company plans to sell 49,000 units of Product WZ in June. The finished goods inventories on June 1 and June 30 are budgeted to be 610 and 170 units, respectively. Budgeted direct labor costs for June would be:
Answer:
The Budgeted direct labor costs for June would be $1,262,560
Explanation:
For computing the direct labor cost, first we have to calculate how many units of production is used. The equation is shown below :
Total Production Units = Ending finished goods inventories + sales units - opening finished goods inventories
= 170 + 49,000 - 610
= 48,560 units
Now, multiply these units with direct labor hour rate which equals to
= Units produced × direct labor hour rate
= 48,560 × $26.00
= $1,262,560
Thus, Budgeted direct labor costs for June would be $1,262,560
A firm’s net cash flow from operating activities includes: A) Cash received from sale of equipment B) Cash received from issuance of common stock C) Cash received from sale of merchandise D) Cash received as payment of loan from a borrower
A firm’s net cash flow from operating activities includes: Cash received from sale of merchandise
Answer: Cash received from sale of merchandise- C)
A firm’s net cash flow from operating activities includes cash received from sale of merchandise.
Andy invests in Orelon Corp., a plastic manufacturing company. As a stockholder, he owns a part of the company and he holds the right to vote on company issues. However, he is entitled to dividends only when the company's board of directors decides to. According to the company policies, if Orelon Corp. faces dissolution in the future, Andy will receive his assets only after the company satisfies the claim of the preferred stockholders. Based on the given information, it can be concluded that Andy is a _____ stockholder.
Answer:
Andy is a common stockholder
Explanation:
In case of dissolution, the company must pay his creditors in a specific order.
Based on the given information, we can say that Andy is a common stock holder, because they are the last in line for the company's assets . This means that the corporation must pay all creditors and bondholders first, then preferred shareholders and last, common stockholders
Given the facts, Andy is a common stockholder of Orelon Corp. He has voting rights proportional to his ownership, but his dividends and claim on assets are secondary to those of preferred stockholders.
Explanation:Based on the given information, it can be concluded that Andy is a common stockholder in Orelon Corp. Common stockholders, also known as shareholders, are individuals who own shares of stock in a public company, which gives them a partial ownership claim on the company. However, they have less claim on the company's assets and earnings than preferred stockholders.
Common stockholders have the right to vote for the company's board of directors and their votes are usually proportional to the amount of stock they own. The board of directors then hire top executives to run the company on a daily basis. And as Andy only receives dividends when they are approved by the board, and his assets are only returned after the claims of preferred stockholders are satisfied, his status as a common stockholder is confirmed.
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Manipulation Manufacturing's (AMM) standards anticipate that there will be 5 pounds of raw material used for every unit of finished goods produced. AMM began the month of MayMay with 8,000 pounds of raw material, purchased 25,500 pounds for $ 15,300 and ended the month with 7,400 pounds on hand. The company produced 4,9004,900 units of finished goods. The company estimates standard costs at $ 1.10 per pound. The materials price and efficiency variances for the month of MayMay were:
Answer:
price variance: 13,050 favorable
quantity variance: -1,760 unfavorable
Explanation:
standard quantity 5
standard price 1.1 per pound
actual quantity for 4900 units
[tex] beginning \: inventory + purchases = ending \: inventory + used[/tex]
8000 + 25,500 -7,400 = 26,100 pounds
standard quantity 4,900*5= 24,500
actual price 15,300/25,500 = 0.60
standard price = 1.10
[tex]price \: var = actual \: pounds(STD \: price - actual \: price)[/tex]
[tex]26100(1.1 - 0.6) = 13050 \: favorable[/tex]
Because actual is lower than STD the company saved money spending. It is favorable.
[tex]quantity \: var = STD \: price(STD \: quantity - actual \: quantity)[/tex]
[tex]1.10(24500 - 26100) = - 1760 \: unfavored[/tex]
Because the company used more pounds than STD the quantity variance is unfavorable
The materials price variance for Manipulation Manufacturing for the month of May was -$13,410 unfavorable, while the materials efficiency variance was -$1,760 unfavorable.
Explanation:To calculate the materials price and efficiency variances, we first need to determine the standard cost for the actual amount of raw materials used. The total amount of materials used during May is the starting inventory (8,000 lbs) plus purchases (25,500 lbs) minus ending inventory (7,400 lbs), which equals 26,100 lbs. The standard cost for this is $1.10 per pound, so the total standard cost is $28,710.
The actual cost of the raw materials purchased in May was $15,300, so the materials price variance is the actual cost minus the standard cost, or $15,300 - $28,710 = -$13,410, which is an unfavorable variance because the actual cost was higher than expected.
Next, we calculate the materials efficiency variance. The standard amount of materials expected for the production of 4,900 units is 5 lbs per unit, or 24,500 lbs. The actual quantity used was 26,100 lbs, so the efficiency variance is (24,500 lbs - 26,100 lbs) * $1.10 = -$1,760, which means the company used worse than expected amounts of raw materials, hence it's also unfavorable.
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Flynn, Inc. is considering a four- year project that has an initial outlay or cost of $80,000. The future cash inflows from its project are $40,000, $40,000, $30,000, and $30,000 for years 1, 2, 3 and 4, respectively. Flynn uses the internal rate of return method to evaluate projects. What is the approximate IRR for this project?
Answer:
The IRR for this project is 28.88%
Explanation:
The Internal Rate of Return (IRR) is that rate of return in which the Net present value (NPV) of the project is zero.
Where, Net Present value is that value in which the initial investment and cash outflows after applying discount factor is equal.
The Internal rate of return is calculated by using the Excel formula:
= IRR (-initial investment, all cash outflows)
The computation is shown in the attachment sheet.
Thus, the IRR for this project is 28.88%
Several months after the reorganization, Jim Umpleby checks in with department managers to see how their employees are handling the changes Several managers comment that everything must be okay because they haven't heard anything from their employees about the reorganization. Which of the following are methods that Caterpillar could implement in order to hear what employees throughout the organization are thinking and feeling? Check all that apply. Plan surprise visits to office locations Hold town hall meetings with employees Send a voice message to all employees providing updates on the successes of the reorqanization Write a blog which allows for reader comments
Caterpillar could implement town hall meetings, a blog with reader comments, and surprise office visits to hear what employees think and feel after the reorganization.
Explanation:Caterpillar could implement several methods to hear what employees throughout the organization are thinking and feeling after the reorganization. They can hold town hall meetings with employees to provide a platform for open communication and gather feedback. They can also write a blog that allows for reader comments, giving employees an opportunity to share their thoughts. Moreover, they can plan surprise visits to office locations to interact with employees directly.
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Caterpillar could implement surprise visits to offices, town hall meetings, and a blog which allows for comments to hear employee thoughts after reorganization. Additional method could also include regular internal surveys.
Explanation:There are several methods Caterpillar could implement to understand the thoughts and feelings of employees post-reorganization. Firstly, the idea to plan surprise visits to office locations could be effective. These visits could provide a chance for unfiltered conversation between management and employees, offering insights into the effect of the changes. Secondly, holding town hall meetings with employees is a well-known method for hearing broad concerns and ideas. These meetings could be a platform for open-ended conversation about the reorganization. Thirdly, writing a blog with the ability for reader comments would also provide an outlet for candid feedback.
However, a strategy that was not mentioned in the question but could also be beneficial is distributing regular internal surveys to garner candid feedback about the reorganization. This would accommodate for employees who may not feel comfortable voicing their thoughts in public.
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Which of the following would most likely be treated as an activity in an activity-based costing system? direct materials cost sales revenues machine processing direct labor cost
Answer: the correct answer is machine processing
Explanation:
Activity-based costing (ABC) is an accounting method that identifies and assigns costs to overhead activities and then assigns those costs to products. Indirect costs, such as management and office staff salaries, are sometimes difficult to assign to a product.
Department A had no work in process at the beginning of the period, 16,000 units were started during the period, 2,000 units were 40% completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period (assuming the company uses FIFO): Assuming that all direct materials are placed in process at the beginning of production, what are the conversion cost equivalent units?
Answer:
Conversion Cost Equivalent Units = 14,800
Explanation:
Beginning WIP = 0
Started 16,000
Ending 2,000 at 40%
Equivalent cost for conversion
[tex]Started\: Units - Ending \: units \times (1-completion)[/tex]
[tex]16,000 - 2,000 \times (1-0.40) = 16,000 - 2,000 \times 0.6 = \\16,000 - 1,200 = 14,800[/tex]
There was none beginning inventory and the direct materials information is not relevant to calculate the conversion cost.
You are given the following information for Thrice Corp.: Decrease in inventory $ 630 Decrease in accounts payable 265 Increase in notes payable 250 Increase in accounts receivable 280 Did cash go up or down? By how much?
Answer:
The cash balance would increase by $335
Explanation:
The given question shows the operating activities of the cash flow statement which deals in increasing and decrease of current assets and liabilities.
1. Decrease in inventory $ 630 increase the cash balance.
2. Decrease in accounts payable $265 decrease the cash balance. As payment would be made regarding purchase
3. Increase in notes payable $250 increase the cash balance because cash is received.
4. Increase in accounts receivable $280 decrease the cash balance because there is not any surety of cash.
After considering these cash effects, we get to know whether cash would be increased or decreased by applying the equation which is shown below:
Cash balance = Decrease in inventory + Increase in notes payable - Decrease in accounts payable - Increase in accounts receivable
= $ 630 + $250 - $265 - $280
= $335
These effects show the source and use of cash funds.
Thus, the cash balance would increase by $335.
Cash balance refers to the amount of money which is hold by the bank on a specific period of time.
The amount of cash balance would go up by $335 during the year.
What is cash balance?A cash balance shows that a company has cash on hand and can use that cash however it wishes. Cash includes more than just the physical conventional bills and coins.
Computation of cash balance:
[tex]\text{Decrease in Inventory} + \text{Increase in notes payable} - \text{Decrease in AP} - \text{Increase in AR}\\\\\\\text{Cash Balance} = \$ 630 + \$250 - \$265 - \$280\\\\\\\text{Cash Balance} =\$335[/tex]
Where,
AP = Accounts Receivable, and
AR = Accounts Receivable.
In the above case, The increasing and decreasing items, are:
1. Decrease in inventory by $630, increase the cash balance.
2. Decrease in accounts payable by $265 also decrease the cash balance.
3. Increase in notes payable by $250 also increase the cash balance because cash is obtained.
4. Increase in accounts receivable by $280, decrease the cash balance because there is not any sure thing of cash.
Therefore, the amount of cash balance would go up by $335.
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A business student conjectures that the Internet caused companies to become more profitable, since many transactions previously handled “face-to-face” could now be completed online. The student compares earnings from a sample of companies from the 1980s to a sample from the 2000s. Explain why this is an observational study. If indeed profitability increased, can she conclude the Internet was the cause? Why or why not?
The study is observational because it compares profitability between the 1980s and 2000s without altering any variables. Increased profitability cannot be solely attributed to the Internet due to numerous other potential contributing factors, which means causation cannot be established from this correlation.
Explanation:The study conducted by the business student is an observational study because it examines data from existing records of company earnings without manipulating any of the variables such as internet usage or other business practices. The student simply observes the differences in profitability before and after the widespread use of the internet.
If profitability did indeed increase in the time frame that coincides with the adoption of the Internet, the student cannot conclusively attribute the rise in profitability solely to the Internet. This is because observational studies do not establish causation but rather show correlation. There could be other contributing factors such as globalization, changes in consumer behavior, or improvements in business processes that may have influenced the companies' profitability.
Furthermore, the increased competition and the ability to reach a global market, both outcomes of advances in technology and globalization, could have spurred companies to optimize productivity, resulting in higher profits. This observation supports the idea that while the Internet may have been one of the contributing factors to increased profitability, it cannot be declared as the definitive cause without ruling out other variables.
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Paige Company estimates that unit sales will be 10,700 in quarter 1, 13,100 in quarter 2, 14,200 in quarter 3, and 18,300 in quarter 4. Using a sales price of $84 per unit. Prepare the sales budget by quarters for the year ending December 31, 2017. PAIGE COMPANY Sales Budget Quarter 1 2 3 4 Year Expected unit sales Unit selling price $ $ $ $ $ Total sales $ $ $ $ $
To prepare the sales budget, multiply the estimated unit sales for each quarter by the selling price per unit. Total sales for the year is the sum of all the quarters' sales.
Explanation:To prepare the sales budget for Paige Company, you multiply the estimated unit sales for each quarter by the unit selling price.
For Quarter 1, this is 10,700 units * $84/unit = $898,800.
For Quarter 2, this is 13,100 units * $84/unit = $1,100,400.
For Quarter 3, this is 14,200 units * $84/unit = $1,192,800.
For Quarter 4, this is 18,300 units * $84/unit = $1,537,200.
The total sales for the year is the sum of each quarter's sales: $898,800 + $1,100,400 + $1,192,800 + $1,537,200 = $4,729,200.
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The sales budget for Paige Company for the year ending December 31, 2017 can be calculated based on the projected unit sales and the unit price. For each quarter, multiply the projected unit sales by the unit price of $84, and then sum up the total sales for all quarters. The total sales for the year is $4,731,200.
Explanation:The sales budget for Paige Company can be calculated by multiplying the estimated unit sales for each quarter by the sales price per unit which is $84.
For Quarter 1: Unit sales = 10,700, Total Sales = 10,700 * $84 = $898,800.
For Quarter 2: Unit sales = 13,100, Total Sales = 13,100 * $84 = $1,102,400.
For Quarter 3: Unit sales = 14,200, Total Sales = 14,200 * $84 = $1,192,800.
For Quarter 4: Unit sales = 18,300, Total Sales = 18,300 * $84 = $1,537,200.
Adding up the total sales for each quarter will give the total sales for the year, which is $898,800 + $1,102,400 + $1,192,800 + $1,537,200 = $4,731,200. Thus, the total sales budget for Paige Company for the year ending December 31, 2017 is $4,731,200.
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The poverty rate in the United States is defined as the proportion of the population that fails to earn a ____ absolute income standard. Poverty rates in the United States have largely ____ since the year 2000.
Answer:
The correct answer is : minimum; risen.
Explanation:
The poverty rate can be defined as the rate of population in a certain age gap who fail to earn a given minimum absolute income.
The census bureau updates the poverty threshold annually. People below this threshold level are considered poor.
According to the data from US census bureau the poverty rate in 2000 was 11.3%. In 2010, it was 15.1%. Though it fell to 13.5% in 2015 it is still higher than that in 2000.
So, we can conclude that poverty rate has increased largely since the year 2000.