Answer:
your answer is
$160,00
Western Wear Clothing issues 1,200 shares of its $0.01 par value common stock to provide funds for further expansion. Assuming the issue price is $12 per share, record the issuance of common stock. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
The journal entry is made as follows;
Explanation:
Bank (1,200*12) Dr.$ 14,400
Common Stock (1,200*.01) Cr.$12
Paid up capital in excess of par-common stocks (14,400-12) Cr.$14,388
The Mega Millions claims its grand prize is $500 million, payable over 5 years at $100,000,000 per year. If the first payment is made immediately, what is this grand prize really worth today? Use an interest rate of 4%.
Answer:
The prize is worth $462.9895 million or 462,989,522.4 today.
Explanation:
The equal payments every period over a defined period of 5 years show that this is an annuity. The first payment is received today that is at start so it is an annuity due. We will calculate the present value of this annuity using the formula for Present value of annuity due.
Present value of Annuity due:
Using the formula, the present value is:
Present value = 100m + 100m * [(1 - (1+0.04)^-(5-1)) / 0.04]
Present value = $462.9895 million or 462,989,522.4
Bickford Company plans to sell 135,000 units in November and 180,000 units in December. Bickford's policy is that 10% of the following month's sales must be in ending inventory. On November 1, there were 14,000 units in inventory. It takes 30 minutes of direct labor time to make one unit. Direct labor wages average $17 per hour. Variable overhead is applied at the rate of $5 per direct labor hour. Fixed overhead is budgeted at $56,500 per month. What is the budgeted overhead for November
The budgeted overhead for November is $1,541,500, calculated by adding the fixed overhead cost, direct labor cost, and variable overhead cost.
Explanation:To calculate the budgeted overhead for November, we need to consider the direct labor cost and the variable overhead cost. First, we will calculate the direct labor cost. Since it takes 30 minutes of direct labor time to make one unit and there were 135,000 units planned to be sold in November, the total direct labor hours required will be 135,000 units x 30 minutes/unit ÷ 60 minutes/hour = 67,500 hours.
Next, we'll calculate the direct labor cost by multiplying the total direct labor hours by the labor wage rate of $17 per hour. The direct labor cost will be 67,500 hours x $17/hour = $1,147,500.
Now, let's calculate the variable overhead cost. Since the variable overhead rate is $5 per direct labor hour, the variable overhead cost will be 67,500 hours x $5/hour = $337,500.
Finally, to calculate the budgeted overhead for November, we'll add the fixed overhead cost of $56,500 per month to the direct labor cost and the variable overhead cost for November. The budgeted overhead for November will be $56,500 + $1,147,500 + $337,500 = $1,541,500.
Multiple Choice Question 60 A department adds all raw materials to a process at the beginning of the process and incurs conversion costs uniformly throughout the process. For the month of January, there were no units in the beginning work in process inventory; 89800 units were started into production in January; and there were 19000 units that were 35% complete in the ending work in process inventory at the end of January. What were the equivalent units of production for conversion costs for the month of January?
Answer:
Equivalent units = 77, 450 units
Explanation:
Equivalent units are notional whole units which represent incomplete work which are used to apportion costs between between work in progress and completed work.
To compute as
Equivalent Units = Degree of completion (%) × units
Completed units in the period with 100% work done is equal
= units started in the period - closing inventory
= 89,800 - 19,000
= 70,800 units
Item Equivalent units
Completed units (100% × 70,800) 70,800
Closing inventory (35% × 19,000 ) 6,650
Total equivalent units 77,450
Total equivalent units = 70,800 + 6,650 = 77, 450 units
Which of the following statements is not true? Group of answer choices U.S. export control law requires the issuance of an export license to cover the movement of controlled U.S.-origin products from India to Taiwan. The Department of Commerce will not recommend the decontrol of a product on grounds that a non-U.S. item of comparable quality is available rendering the control ineffective. The Bureau of Industry and Security has 90 days to review and rule on the application of an export license. Civil penalties may be imposed on a strict liability basis for violations of export control law without having to prove criminal intent.
Answer: Second one.
Explanation:
The Department of Commerce will not recommend the decontrol of a product on grounds that a non-U.S. item of comparable quality is available rendering the control ineffective.
The Department of Commerce does not base decontrol recommendations on non-U.S. item availability.
The statement that is not true is:
The Department of Commerce will not recommend the decontrol of a product on grounds that a non-U.S. item of comparable quality is available rendering the control ineffective.Explanation:
The other statements are accurate: export control laws require licenses for certain U.S.-origin products, the Bureau of Industry and Security has a timeline for reviewing export license applications, and civil penalties for export law violations can be imposed without proof of criminal intent.
Suppose at the end of the lease term, Sheridan receives the asset and determines that it actually has a fair value of $1,450 instead of the anticipated residual value of $0. Record the entry to recognize the receipt of the asset for Sheridan at the end of the lease term. (
Answer:
Asset under lease (Dr.) $1,450
Revaluation reserve (Cr.) $1,450
Explanation:
Capital lease is a situation where the lessee has the option to buy the asset at the end of lease term. The Sheridan receives the asset when the lease term is ended. The actual fair value of asset is $1,450 higher than anticipated value. To record the increase in fair value the asset value is debited with the amount of fair value rise. The asset is recorded at fair value in the balance sheet.
Sarah, a famous pianist, is told that she will have to undergo brain surgery that could result in partial paralysis of her right arm and leg. Before she enters the hospital, Sarah gives her Steinway piano to a good friend who is also a pianist and has the piano transported to the friend's home. The surgery is successful, and Sarah suffers no paralysis of any kind as a result of the surgery. Can Sarah revoke the gift to her friend? Explain.
Answer:
Yes, Sarah can revoke the gift to her friend.
Explanation:
Gift is the transfer of property from one person, usually the donor(giver) to another person, donee(receiver) without expecting any thing like compensation in return. Gift can be given or transfered to either an individual or organization.
A gift can be revoked by the donor in law. Such gift is called Causa Mortis Gift.
Causa Mortis Gift is a gift given or transfered in expectation of death of the donor. Where a donor gives out his/her gift during the course of undergoing major surgery, such could also be called Causa Mortis Gift. This type of gift can be revoked anytime before the donor's death or recovery from surgery or illness and cannot be revoked after his/her death.
On January 1, 20X8, William Company acquired 30 percent of eGate Company's common stock, at underlying book value of $100,000. eGate has 100,000 shares of $2 par value, 5 percent cumulative preferred stock outstanding. No dividends are in arrears. eGate reported net income of $150,000 for 20X8 and paid total dividends of $72,000. William uses the equity method to account for this investment. Based on the preceding information, what amount of investment income will William Company report from its investment in eGate for the year?$45,000$42,000$62,000$35,000
Answer:
The answer is $42,000
Explanation:
William Company's Investment will be 30 percent of eGate shares.
William company holds a non-controlling interest in eGates since the percentage holding is less than 50 percent
Share of net income is $45,000(30 percent of $150,000)
Preferred stock is 5 percent on 100,000 shares at $2 par value is $10,000
William company share out of the $10,000 is $3,000(30 percent of $10,000)
Therefore its total Investment in eGate is $42,000($45,000 - $3,000)
William Company will report $45,000 as the investment income from its 30% investment in eGate Company for the year 20X8. This is calculated by taking 30% of eGate's net income ($150,000), since there were no dividends paid to common shareholders.
William Company needs to determine the amount of investment income from its 30% stake in eGate Company. To calculate this, we first exclude preferred dividends from eGate's total dividends, since William only participates in common dividends as a common stock investor. eGate has 100,000 preferred shares with a 5% cumulative dividend on a $2 par value, which equals $100,000 total preferred dividends ($2 x 5% x 100,000). The common dividends paid are therefore $72,000 minus $100,000, which leads to negative dividends for common shareholders (showing that common dividends were not paid).
Since there were no dividends distributed to common shareholders, the equity method dictates that William's share in net income directly influences the investment income. William's share is 30% of eGate's $150,000 net income, which is $45,000 ($150,000 x 30%). So, the investment income reported by William Company from its investment in eGate for 20X8 is $45,000.
2001 was a bad year for Red Delicious apple farmers in Washington State. The market price for Red Delicious apples was $10.61 per box. As a result, many farmers decided not to pick the apples off their trees and instead let them rot. Assuming that the Red Delicious apple market was perfectly competitive, is it possible that these farmers were profit maximizing when they decided to let their apples rot in the short-run
Answer: This statement is correct. Maximizing profit refers to short run or long run process by which a businessdetermine the price, input, and output levels that lead to the highest profit possible.
By choosing not to not to pick the apples off their trees and instead let them rot the farmers are in fact maximizing profits as picking them and selling might lead to loss.
Answer:
No
Explanation:
Remember, when we say a firm is in a perfectly competitive market we imply that the firm has no overall dominance in the market but have other competitors who sell the same products.
Therefore the Delicious apple farmers would not be maximizing profit, if the Farmers deliberately left the produce to rot on the trees, as other competitors will likely supply the same products to the final consumers.
g The natural unemployment rate describes the unemployment rate when Group of answer choices real GDP is equal to potential GDP. cyclical unemployment is positive. frictional unemployment is 0. the economy is no longer in a recession.
Answer:
The correct answer is letter "A": real GDP is equal to potential GDP.
Explanation:
Natural unemployment is defined as the lowest unemployment rate and the economy will rose. It's natural because factors other than a poor economy triggers it. One aspect of natural unemployment is frictional unemployment that is induced, for example, by conditions such as recent graduates starting to pursue a job. Another part of natural unemployment is structural unemployment, where employees do not find jobs and employers do not find workers having jobs available.
The natural unemployment rate describes the unemployment rate when the real Gross Domestic Product (GDP) equals the potential GDP. The real GDP measures a country's productivity adjusted for changes in inflation while the potential GDP measures the productivity of a country considering that inflation is constant.
Assume that the market is perfectly competitive. If the cost function for John's Shoe Repair is �(�) = 100 + 10� − �) + 3 4 �4, what is the firm's marginal cost function? What is its profit-maximizing condition if the market price is p? What is its short-run supply curve?
Answer:
Explanation:
C(q) = 100+10q-q^2+(1/3)q^3
To find the firm marginal cost function:
Take the derivative with respect to q
MC = 10 - 2q + q^2
Assuming that the market price is p , then the profit maximising condition is:
MR = MC
p = 10 - 2q + q^2
The short-run supply curve is the marginal cost curve that lies above the average variable cost.
The average variable cost is:
AVC =VC/Q
AVC = (10q-q^2+(1/3)q^3)/Q
AVC = 10 - q + (1/3)*q^2
So, the short-run supply curve is:
SRS = 10 - 2q + q^2 if p > 10 - q + (1/3)*q^2
A potential investor is seeking to invest $500,000 in a venture, which currently has 1,000,000 million shares held by its founders, and is targeting a 50% return five years from now. The venture is expected to produce half a million dollars in income per year at year 5. It is known that a similar venture recently produced $1,000,000 in income and sold shares to the public for $10,000,000.a. What is the percent ownership of our venture that must be sold in order to provide the venture investor’s target return?
b. What is the number of shares that must be issued to the new investor in order for the investor to earn his target return?
c. What is the issue price per share?
d. What is the pre-money valuation?
e. What is the post-money valuation?
Answer:
a, 15%
b, 150,000
c, $ 3.30
d, = $3,333,333.33
e, $3,833,333.33
Explanation:
To solve this,
Note that we have been given a similar venture to compare to our venture.
The total shareholder's equity for the other venture (P) = $10,000,000 and the net income (E) = $1,000,000
Hence, Price/Earnings (P/E) for other venture = 10,000,000/1,000,000 = 10.0
Now for our venture, Earnings in the 5th year = $500,000
Assuming that P/E ratio for both the ventures to be equal, P/500,000 = 10.0
hence, total shareholder's value for our venture = $5,000,000 --------------- (1)
Now the investor invested $500,000 and expected 50% return after 5 years, hence the investor's value after 5 years would be equal to 500,000 * (1+50%) = $750,000 --------------- (2)
Now percent ownership of venture given to investor = (Value of investor's investment after 5 years/total value of all shareholders after 5 years)
Hence, divide (2) by (1)
percent ownership of venture given to investor = 750,000/5,000,000 = 0.15
or 15%
Therefore Answer to part 'a' is = 15%
Part (b) :For the percentage ownership given to new investor = 15%, total number of shares = 1,000,000
Hence, number of shares issued to new investor = 15% x 1,000,000 = 150,000
Hence, answer to part b = 150,000
Part (c): Amount invested by new investor = $500,000 and number of shares issued to him = 150,000
hence issue price of share = Amount invested / Number of shares issued
= 500,000/150,000 = $3.33
Hence, issue price per share = $3.33
Part (d):
The Pre money valuation is the value of the company before any external funding. In this case, the number of shares held with the founders before the new investor = 1,000,000 and the equity price = $3.33
hence, Value of the venture = 3.33 * 1,000,000 = $3,333,333.33
Hence, pre money valuation of the venture = $3,333,333.33
Part (e): Post money valuation of a company is the value of the company after external funding. In this case, investor invests $500,000 to the venture increasing the value of the company by the same amount.
Hence post money valuation = pre money valuation + Investment
= 3,333,333.33 + 500,000
= 3,833,333.33
Hence, post-money valuation of the venture = $3,833,333.33
arris Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $ 116 Units in beginning inventory 0 Units produced 9,000 Units sold 8,600 Units in ending inventory 400 Variable costs per unit: Direct materials $ 19 Direct labor $ 61 Variable manufacturing overhead $ 7 Variable selling and administrative expense $ 11 Fixed costs: Fixed manufacturing overhead $ 135,000 Fixed selling and administrative expense $ 8,900 What is the net operating income for the month under absorption costing
Answer:
$12,500
Explanation:
Absorption costing consider all the cost incurred in production either variable or fixed as production cost and all the operating costs as the period costs. It calculates the gross profit after deducting the cost of goods sold from the net sales and net income after deduction the operating costs from the gross profit.
First of all we need to calculate the product cost.
Manufacturing cost
Direct materials $19
Direct labor $61
Variable manufacturing overhead $7
Fixed manufacturing overhead $15
($135,000/9,000)
Total Product cost $102
Now We will calculate the Net Income
Sales (8,600 x $116) $997,600
Less: Cost of goods sold (8,600 x $102) $877,200
Gross Profit $120,400
Less:
Variable selling & admin expense $99,000
($11 x 9,000)
Fixed selling and admin expense $8,900
Net Income $12,500
Scenario 13-10 Jessica makes photo frames. She spends $5 on the materials for each photo frame. She can create one photo frame in an hour. She earns $10 per hour at a part-time job at the local coffee shop. She can sell a photo frame for $30 each. Refer to Scenario 13-10. An accountant would calculate the total cost for one photo frame to be: a. $5. b.$10. c. $15. d. $25.
Answer:
Option D is correct.
$25
Explanation:
An accountant would calculate the total cost for one photo frame to be $25
Accounting profit = Sale price - cost spent on materials
= 30 - 5
= $25
The following information is from White Mountain Furniture Company's financial records:
Month Sales Purchases
July $180,000 $105,000
August $165,000 $120,000
September $150,000 $90,000
October $195,000 $135,000
All sales are made on account. Collections from customers are normally 70 percent in the month of sale, 20 percent in the month following the sale, and 9 percent in the second month following the sale. The balance is expected to be uncollectible.
All purchases are on account. Management takes full advantage of the 2 percent discount allowed on purchases paid by the tenth of the following month.
Purchases for November are budgeted at $150,000, and sales for November are budgeted at $165,000.
Cash disbursements for expenses are expected to be $36,000 for the month of November. The company's cash balance on November 1 was $55,000.
Calculate the excepted cash balance on November 30
A) $34,000
B) $79,000
C) $37,000
D) $15,000
E) $54,700
Answer:
E) $54,700
Explanation:
Cash Balances are determined from Cash Budgets. Thus Prepare a cash Budget as follows :
November
Receipts :
Cash Sale (70%×165,000) $115,500
Credit Sale - October (20%) $39,000
Credit Sale - September (9%) $13,500
$168,000
Payments :
Purchases ($135,000×98%) ($132,300)
Cash disbursements ($36,000)
($168,300)
Reconciliation of Balances
Net Cash Movement ($300)
Opening Balance $55,000
Closing Balance $54,700
The expected cash balance on November 30, considering sales collections, purchases, and cash disbursements, is $34,350.
Explanation:To calculate the expected cash balance on November 30, we need to consider the sales collections and purchases for the months of November and the following months. First, we calculate the expected collections from customers for November sales. Since 70% of sales are collected in the month of sale, 20% in the following month, and 9% in the second month following the sale, we can calculate the expected collections as follows:
Next, we calculate the expected purchases for November, considering the 2% discount if they are paid by the tenth of the following month:
To calculate the expected cash balance on November 30, we start with the cash balance on November 1 and subtract cash disbursements for expenses, add the collections from customers, and subtract the purchases paid:
Now, let's calculate the expected cash balance:
The expected cash balance on November 30 is $34,350, which is closest to option A) $34,000.
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The selling price is $50 per unit, and variable costs amount to $20 per unit. Sultan's fixed costs per month total of $80,000. How many units must be sold each month to earn a monthly operating income of $25,000?
Answer:
3,500 units
Explanation:
The computation of the break even units to attain monthly operating income is shown below:
= (Fixed expenses + target profit) ÷ (Contribution margin per unit)
where,
Contribution margin per unit = Selling price per unit - Variable expense per unit
= $50 - $20
= $30
And, the other items values would remain the same
Now put these values to the above formula
So, the value would equal to
= ($80,000 + $25,000) ÷ ($30)
= ($105,000 ÷ ($30)
= 3,500 units
Light Me Up Lamps has variable expenses of 30% of sales and monthly fixed expenses of $140,000. The monthly target operating income is $70,000. What is Light Me Up Lamps' operating leverage factor at the target level of operating income?A.1.50
The operating leverage factor measures the relationship between fixed costs and operating income. It is calculated by dividing the contribution margin by the operating income.
Explanation:The operating leverage factor measures the relationship between fixed costs and operating income. It is calculated by dividing the contribution margin by the operating income. To find the contribution margin, we subtract the variable expenses from the sales. In this case, the variable expenses are 30% of sales, so the contribution margin would be 70% of sales. Let's say the sales are $X. Then, the operating leverage factor at the target level of operating income of $70,000 would be:
Contribution margin = 70% * X = 0.7 * X
Operating leverage factor = (0.7 * X) / $70,000
Since we don't have the value of X, we can't calculate the exact operating leverage factor.
Final answer:
The operating leverage factor for Light Me Up Lamps at the target level of operating income is calculated as 3.0 using the contribution margin and operating income.
Explanation:
To calculate the operating leverage factor at the target level of operating income for Light Me Up Lamps, we use the contribution margin formula and the operating leverage formula. The contribution margin (CM) is calculated as the difference between sales and variable expenses, while the operating leverage factor is the ratio of contribution margin to operating income.
Variable expenses are 30% of sales, so the contribution margin ratio is 70% (100% - 30%).Fixed expenses are $140,000, and target operating income is $70,000.Let S be the amount of sales required to achieve the target operating income.
Then, we have:
0.7S - $140,000 = $70,000
S = ($140,000 + $70,000) / 0.7
S = $300,000
Now that we have the sales value, we can find the contribution margin in dollar terms.
CM = 0.7 × $300,000 = $210,000
The operating leverage factor is then calculated as:
Operating Leverage Factor = Contribution Margin / Operating Income
Operating Leverage Factor = $210,000 / $70,000
Operating Leverage Factor = 3.0
Therefore, the operating leverage factor for Light Me Up Lamps at the target level of operating income is 3.0.
Three engineers have the same amount of schooling and work experience, but earn different wages. One is a computer engineer who designs and tests new computers for an annual wage of $54,000 per year. Another is a chemical engineer who works in a nuclear lab and performs experiments on radioactive materials for an annual wage of $80,000 per year. The third is a civil engineer who performs daily inspections of cables on a suspension bridge for an annual wage of $91,000 per year.
Answer:
Variation in income in all three types of profession is due to different skills.
Explanation:
A computer engineer whose work is less risky due to which his income is also less.
Unlike a computer engineer, a chemical engineer who works in a nuclear lab performs more risky tasks and earns a higher income.
Unlike these two, the civil engineer who handles the responsibility of bridge safety performs the riskiest tasks for which he also needs high-quality skills, due to which one can get the most income.
Differing wages among computer, chemical, and civil engineers result from industry demand, specialized skills, and job responsibilities. Factors such as competition, location, and economic conditions contribute to the nuanced variations in their annual earnings.
The varying wages among computer, chemical, and civil engineers stem from distinct industry demands, job responsibilities, and skill requirements. The computer engineer's role in designing and testing computers may align with a particular industry's demand, influencing a $54,000 annual wage.
The chemical engineer, engaged in nuclear experiments, commands an $80,000 salary, reflecting the specialized skills and potential risks associated with their work. Meanwhile, the civil engineer's high annual wage of $91,000 could be attributed to the responsibility of inspecting critical components like suspension bridge cables.
Factors like industry competitiveness, geographical location, and economic conditions contribute to the nuanced wage differences, illustrating the influence of market dynamics, expertise, and job demands on engineer compensation.
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For several years, CSK Auto, Inc., fraudulently reported inflated earnings. During this period, Maynard Jenkins was CEO. He was not involved in the fraud, however, and was never charged with a crime. Nonetheless, the SEC sought to claw back some of his earnings during this period. Is Jenkins financially responsible for the fraud that occurred on his watch, even though he did not participate? Should he be liable?
Jenkins, though not personally involved in the fraud, may be held financially responsible under the Sarbanes-Oxley Act of 2002 as the CEO during the period of misconduct. Yes, he will be held liable
Under the Sarbanes-Oxley Act of 2002, the U.S. Securities and Exchange Commission (SEC) has the authority to claw back bonuses and profits from CEOs and CFOs of companies that restate financials due to misconduct, regardless of the executive's involvement in the fraud. This is designed to ensure accountability at the highest levels of management.In the CSK Auto, Inc. case, although Maynard Jenkins was not personally involved in the fraudulent activities, he was the CEO during the period when the fraud occurred. The SEC's decision to seek clawbacks reflects the principle that top executives must be held accountable for the actions of their companies under their tenure, aiming to promote integrity and trust in financial markets.Examples of similar cases include John Stumpf of Wells Fargo, who resigned due to widespread fraudulent activities within his company, and Bernie Ebbers of WorldCom, who was held accountable despite initially not being directly implicated in the fraudulent activities.On June 1, 2014, Siebens Enterprises loaned $27,000 to Tyler Company for one year at 8 percent interest. Under the terms of the promissory note, Tyler will repay the principal and pay one year's interest on May 31, 2015. Related to this note receivable, what amount of interest income would Siebens report on its 2014 income statement? (Round your final answer to the nearest whole dollar amount.)
Answer:
$1,260
Explanation:
The computation of amount of interest income is shown below:-
Principal $27,000
Rate of interest 8%
Interest for 7 month in 2014 $1,260
($27,000 × 8% × 7 ÷ 12)
Interest for 5 months in 2015 $900
( $27,000 × 8% × 5 ÷ 12)
12 months from 1 June 2014
to 31 may 2015 12 months
Interest $2,160
($27,000 × 8%)
T will repay the principal and one year interest
on may 31, 2015
($20,000 + $2,160) $22,160
So, Interest income to be reported on its 2014 income statement is $1,260
Nelson Corporation sells three different products.The following information is available on December 31: Ch6_Q150 When applying the lower of cost or market rule to each item, what will Nelson's total ending inventory balance be? $6,900 $6,450 $7,950 $6,600
Answer:
$6,450
Explanation:
The computation of the ending inventory balance using the lower of cost or market rule to each item is shown below:
Items Cost Market value Lower cost Units Cost
per unit per unit per unit
X $4 $3.50 $3.50 300 $1,050
Y $2 $1.50 $1.50 600 $900
Z $3 $4 $3 1,500 $4,500
Total ending inventory balance $6,450
Final answer:
The lower of cost or market rule is used to value inventory at its lower cost or market value. Nelson Corporation would compare the cost and market values of each product to determine the total ending inventory balance.
Explanation:
The lower of cost or market rule is a method used to value inventory. Under this rule, inventory is valued at the lower of its cost or its market value. It ensures that inventory is not overstated on the financial statements.
To calculate the total ending inventory balance, Nelson Corporation would compare the cost and market values of each product and choose the lower value for each item. Then, they would add up the cost values of all the items to determine the total ending inventory balance. The specific amounts for each product have not been provided in the question, so it is not possible to determine the exact total ending inventory balance. Therefore, none of the given answer options can be confirmed as the correct answer.
Camping Supply Company has developed a new camping lamp that runs on solar power. The solar cells charge in the sun all day and then the lamp is ready to run when the sun goes down. The company has a standard costing system to help control costs and has established the following standards related to the new camping lamp:
Direct materials: 3 small solar cells per lamp at $0.60 per cell
Direct labour: 0.75 hours per lamp at $12 per hour
During March, the company produced 4,000 camping lights. Production data for March are as follows:
Direct materials: 20,000 small solar cells were purchased at a cost of $0.65 per cell; 6,000 of these were still in inventory at the end of the month (there was no opening inventory).
Direct labour: 3,100 direct labour-hours were worked at a cost of $35,000.
Required:
1. Compute the direct materials price and quantity variances for March. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)
2. Compute the direct labour rate and efficiency variances for March.(Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)
Answer:
1. $1,000 Unfavorable
2. $1,200 Unfavorable
3. $2,200 Favorable
4. $1,200 Unfavorable
Explanation:
Actual Quantity purchased = 20,000
Actual price per cell = $0.65
Standard Price per cell = $0.60
Direct Materials Price Variance = Actual Quantity Purchased × (Actual Price - Standard Price)
= 20,000 × ($0.65 - $0.60)
= $1,000 Unfavorable
Standard Price per cell = $0.60
Actual Quantity used = Actual quantity purchased - Ending inventory
= 20,000 - 6,000
= 14,000
Standard Quantity = 3 × 4,000
= 12,000
Direct Materials Quantity Variance = Standard Price × (Actual Quantity Used - Standard Quantity)
= $0.60 × (14,000 - 12,000)
= $1,200 Unfavorable
2. Actual hours = 3,100
Actual Direct labor cost = $35,000
Standard Rate = $12 per hour
Direct Labor Rate Variance = Actual Direct labor cost - Actual Hours × Standard Rate
Direct Labor Rate Variance
= $35,000 - 3,100 × $12
= $2,200 Favorable
Standard Rate = $12.00 per hour
Standard hours = 0.75 × 4,000
= 3,000
Actual hours = 3,100
Direct Labor Efficiency Variance = Standard Rate × (Actual hours - Standard hours)
= $12.00 × (3,100 - 3,000)
= $1,200 Unfavorable
Variance analysis is the measurement tool that determines the gap between the actual and the budgeted or the standard figures determined by the management as per the past records.
1.
The direct material price variance is $1,000 UnfavorableThe direct material quantity variance is $1,200 Unfavorable2.
The direct labor rate variance is $2,200 FavorableThe direct labor efficiency variance is $1,200 UnfavorableComputation:
1.
Given:
Actual Quantity purchased =20,000Actual price =$0.65Standard price =$0.60[tex]\text{Direct Material Price Variance}=\text{Actual Quantity Purchased}\\\times(\text{Actual Price-Standard Price})\\\\=20,000\times(\$0.65-\$0.60)\\\\=20,000\times\$0.05\\\\=\$1,000\;(\text{U})[/tex]
[tex]\text{Direct Material Quantity Variance}=\text{Standard Price}\\\times(\text{Actual Quantity used-Standard Quantity})\\\\=\$0.60\times(14,000-12,000)\\\\=\$0.60\times2,000\\\\=\$1,200\;(\text{U})[/tex]
Working Note:
Computation of Actual Quantity used:
[tex]\text{Actual Quantity used}=\text{Actual quantity purchased-Ending inventory}\\\\=20,000-6,000\\\\=14,000[/tex]
2.
Given:
Actual hours =3,100Actual Direct labor cost =$35,000Standard rate =$12 per hour[tex]\text{Direct Labor rate Variance}=\text{Actual Direct labor cost}\\-(\text{Actual Hours}\times\text{Standard rate})\\\\=\$35,000-(3,100\times\$12)\\\\=\$2,200\;(\text{F})[/tex]
[tex]\text{Direct Labor Efficiency Variance}=\text{Standard rate}\\\times(\text{Actual Hour-Standard Hour})\\\\=\$12\times(3,100-3,000)\\\\=\$1,200\;(\text{U})[/tex]
Working note:
Computation of standard hour:
[tex]\text{Standard hour}=\text{Direct labor hour}\times\text{Units produced}\\\\=0.75\times4,000\\\\=3,000[/tex]
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A monopolist's maximized rate of economic profits is $2 comma 700 per week. Its weekly output is 900 units, and at this output rate, the firm's marginal cost is $39 per unit. The price at which it sells each unit is $49 per unit. at this profit output rates, what are the firm's average total cost and marginal revenue?
Answer:
Average total cost= $46
Marginal revenue= $33
Explanation:
In this instance the monopolist's total cost is the revenue from sale of one unit less the economic profits per unit
Economic profit per unit= 2,700/900
Economic profit per unit= $3
Average total cost= (Price per unit) - (Economic profit per unit)
Average total cost= 49 - 3= $46
For this instance marginal revenue is equal to marginal cost.
Marginal revenue= Marginal cost= $39
A bond with 20 detachable warrants has just been offered for sale at $1,000. The bond matures in 20 years and has an annual coupon of $48. Each warrant gives the owner the right to purchase two shares of stock in the company at $46 per share. Ordinary bonds (with no warrants) of similar quality are priced to yield 6 percent.
What is the value of one warrant? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Value of one warrant $
Answer:
Value of one warrant = $ 6.88 (2 decimals).
Explanation:
Ordinary bond current value = pv(rate,nper,pmt,fv)
Ordinary bond current value = pv(6%,20,48,1000)
Ordinary bond current value = $ 862.36
Current Value of Bond with warrant = 1000
Warrant value = Current Value of Bond with a warrant - Ordinary bond current value
Warrant value = 1000 - 862.36
Warrant value = $ 137.64
No of Warrant with a bond = 20
Value of one warrant = Warrant value /No of Warrant with a bond
Value of one warrant = 137.64/20 = $6.882
Value of one warrant = $ 6.88 (2 decimals).
Suppose a bank already has excess reserves of $800 and the reserve ratio is 30%. If Andy deposits $1,000 of cash into his checking account and the bank lends $600 to Melanie, that bank can lend an additional:________
a. $200.
b. $1,000
c. $800.
d. $2,400.
e. $400
Answer:
The correct answer is $900.
Explanation:
According to the scenario, computation of the given data are as follows:
Reserve required = New deposits of cash × Reserve ratio%
= $1000 × 30/100
=$300
Excess reserve from Andy ‘s deposit = New deposit – Reserve required
= $1,000 – $300
= $700
Total reserve excess = New reserve excess + Old reserve excess
= $700 + $800
= $1,500
After lending to molly excess reserve = Total reserve excess – Amount lending to molly
= $1,500 - $600
= $900
The bank has only $900 excess reserve. So, Bank can only give $900 for lending.
Final answer:
After Andy deposits $1,000 in the bank, the additional reserves increase by $700. When the bank lends $600 to Melanie, it's left with $900 to lend further. The closest correct choice, accounting for a typo in the question, is $800.
Explanation:
When Andy deposits $1,000 cash into his checking account, the bank's reserves increase by that amount. Given the reserve ratio of 30%, the bank is required to keep 30% of its deposits as reserves. From this new deposit, the bank must therefore keep 30% of $1,000, which equals $300 as required reserves. The excess reserves that the bank can use to make loans is the deposit amount minus the required reserves ($1,000 - $300 = $700).
However, since the bank already has excess reserves of $800, the total excess reserves after Andy's deposit is $800 + $700 = $1,500. The bank has lent $600 to Melanie, reducing their capacity to lend further. Subtract the $600 from the total excess reserves ($1,500 - $600), and we have $900 available. The option closest to the correct amount the bank can additionally lend from the available choices is $800, but please note the exact figure should be $900. There is a typo in the question, so the closest correct answer would be option c: $800.
A producer of outdoor clothing used a focus group to obtain information about the demand for fleece jackets with built-in battery operated warming panels. At prices of $100, $90, $80, $70, $60, and $50, the focus group demanded 23, 31, 40, 44, 48, and 60 jackets, respectively. Is price statistically significantly different from zero at the 0.05 level of significance? (Hint: Use Excel's LINEST tool or, if you have the Window's version, the regression tool.)
Answer:
Yes, price is statistically different from zero at 0.05 level of significance
Explanation:
Given Data:
Price Quantity
$100 23
$90 31
$80 40
$70 44
$60 48
$50 60
These are two variables, price and quantity. The quantity is dependent variable and price is the independent variable.
Finding the regression using excel:
--In excel, click on data analysis tool button in the data tab. Within that, select regression. A box will appear. Here, fill in the following:
1. Input Y range: Cell with demand data
2. Input X range: Cell with price data
3. Select the label button and line fit plot and then click ok.
4. This will give regression result for this data.
Find attached of the regression output
Hypothesis:
H₀ : The price is not statistically different at 0.05 level of significance
HA : The price is statistically different from 0.05 level of significance
From the attached file, p-value = 0.0002∠0.05
Hence, reject H₀ and conclude that price is statistically different from zero at 0.05 level of significance
s flour in 15-pound bags. Panera Bread uses 5000 bags of flours each year. Carrying/holding costs are $20 per bag per year. Ordering costs are estimated at $5 per order. Assume that Panera Bread Chicago bakery is open 250 days a year and its daily demand is estimated at 20 bags. It takes 5 days for each order of flour to be filled. What is the minimum inventory held in a given EOQ cycle
Answer:
0 bags
Explanation:
Given that
Usage of bags per year = 5,000 bags
Carrying or holding cost per bag per year = $20
Ordering cost = $5 per order
Number of days open = 250 days
Estimated Daily demand = 20 days
Filling days required = 5 days
Based on the above information, the minimum inventory should be equal to zero as the daily demand is remains constant throughout the year. Therefore, it would be zero before replenishment
The minimum inventory held in a given EOQ cycle for Panera Bread Chicago bakery, considering a lead time of 5 days and daily demand of 20 bags, is calculated to be 100 bags. This is based on the need to have a safety stock that covers the demand during the lead time.
Explanation:The question refers to the Economic Order Quantity (EOQ) model, which is used to determine the optimal order quantity that minimizes total inventory costs, including ordering and holding costs. The EOQ model is a fundamental concept in supply chain management and operations research. To answer this question, we must calculate the EOQ and then use it to find the minimum inventory held in a given EOQ cycle. The EOQ formula is given by sqrt((2DS)/H), where D is the demand, S is the ordering cost, and H is the holding cost per unit per year. In this scenario, D=5000 bags per year, S=$5 per order, and H=$20 per bag per year. This leads to an EOQ of sqrt((2*5000*5)/20), which simplifies to sqrt(25000) or approximately 158 bags.
The minimum inventory level (also referred to as the safety stock) is dependent on the lead time and the daily demand. Given a lead time of 5 days and a daily demand of 20 bags, the minimum inventory, which serves as a buffer against variability in demand and lead time, can be calculated as daily demand multiplied by lead time. Hence, it is 20 bags/day * 5 days = 100 bags. This is not directly the result of the EOQ calculation but is related to the replenishment policy and lead time considerations in inventory management.
A company uses the indirect method to determine its cash flows from operating activities. Use the following information to determine its net cash provided or used by operating activities. Net income $15,200 Depreciation expense 10,000 Cash payment on note payable 8,000 Gain on sale of land 3,000 Increase in inventory 1,500 Increase in accounts payable 2,850
Answer:
The net cash flows from operating activities is $15,550.
Explanation:
A company
Statement of cash flows (extract)
Net income $15,200
Add Depreciation expense 10,000
Increase in accounts payable 2,850
Less Gain on sale of land (3,000)
Increase in inventory (1,500)
Cash payment on note payable (8,000)
Net cash flows from operating activities $15,550
Pawprints Paint recently went public in a best efforts offering. The company offered 145,000 shares of stock for sale at an offer price of $23 per share. The administrative costs associated with the offering were $385,000 and the underwriter's spread was 9 percent. After completing their sales efforts, the underwriters determined that they sold a total of 138,700 shares. What were the net proceeds to the company
Answer:
$2,517,991
Explanation:
Gross proceed = Number of shares sold × price per share = 138,700 × $23 = $3,190,100
Underwriter's spread = $3,190,100 × 9% = $287,109
Administrative costs = $385,000
Net proceeds = Gross proceed - Underwriter's spread - Administrative costs
= $3,190,100 - $287,109 - $385,000
Net proceeds = $2,517,991
Answer: The net proceeds to the company is $ 2,517,991
Explanation:
Net proceeds are the final amount of money that a seller is entitled to get with respect to the disposal of an asset less all the related expenses like commission, fees and others which are already paid and it is calculated by deducting all the selling costs from the sale price of an asset. For instance, If a person 1 sells his residential property to person 2, then net proceeds shall be the funds person1 is entitled to receive from person2 after all the related costs like realtor’s fees and other costs are taken into due consideration.
Net Proceeds can be derived by summing up all the expenses and deducting the same from the amount that is received as sale proceeds.
Next, this process is to identify and sum up all the expenses that are incurred and related to the transaction.
Lastly, the total costs ascertained from the sale of the asset must be necessarily deducted from the total amount that is gotten as a result of the sale. The leftover amount is the net proceeds.
From the above question,
The net proceeds to the company =Number of Shares actually sold × Offer Price ×(1-Underwriter spread) -Administrative costs.
Gross sales proceeds $ 3,190,100. =138700×23
Lesss
Administrative costs = $385000
Underwriter's spread= = $287,109
=3190100×9
Net proceeds to the company is $ 2,517,991
Suppose that a department store added domestically-produced refrigerators to its inventory in June 2016 because it expected an increase in demand for them. The store miscalculated the preferences of its customers, however, and was not able to sell the refrigerators until January 2017. The refrigerators added to the store's inventory in June 2016:1.will be counted in 2017 GDP because they were sold that year.2.will not be counted in 2016 GDP because they were intermediate goods that year.3.will be counted in 2016 GDP as part of consumption (C).4.will be counted in 2016 GDP as part of investment (I).
Answer:
1. will be counted in 2017 GDP because they were sold that year.
Explanation:
Remember, mention was made that it was in the following year the domestically-produced refrigerators weree sold by the departmental store which were bought in 2016.
Based on the definition of Gross domestic product; a measure in monetary terms of the total number of goods and services produced in a country in a period of one year, thus the monetary value was transferred when the refrigerators were sold, which is 2017.