Answer:
Total payments for purchases on account $38,400
Explanation:
September Payments for Purchases include
40% of September Sales60% of August SalesSchedule of Cash Payments for Purchases For the Month Ending September
September Sales ($36,000×40%) = $14,400
August Sales ($40,000×60%) = $24,000
Total = $38,400
Answer:
Th e cash payments in the month of September is $38,400
Explanation:
August September
Cash payment $16,000 $14,400
balance of August purchases $24,000
September total payments $38,400
In August 40% of $40,000 would be paid since $40,000 was the worth of the purchases in August i,e $40000*40%=$16,000
In September the remaining 60% of $40,000 is due for payment i.e $40,000*60%=$24,000
In September 40% of the month purchases is due for payment,that is $36,000*40%=$14,400
The balance of 60% of $36,000 would be paid in October.
7. Problems and Applications Q7 Your cousin Vinnie owns a painting company with fixed costs of $200 and the following schedule for variable costs: Quantity Variable Cost Average Fixed Cost Average Variable Cost Average Total Cost (Houses Painted per Month) (Dollars) (Dollars) (Dollars) (Dollars) 1 10 2 20 3 40 4 80 5 160 6 320 7 640 The efficient scale is houses.
Answer:
4 houses per month.
Explanation:
Note: See the attached file for the calculation.
Efficient scale of production is can be described as the number of units of production where average total cost (ATC) of production is lowest.
From the attached file, the ATC of $70 is the lowest at 4 houses per month and 4 houses per month is therefore the efficient scale.
At the beginning of a year, a company predicts total direct materials costs of $1,020,000 and total overhead costs of $1,300,000. If the company uses direct materials costs as its activity base to allocate overhead, what is the predetermined overhead rate it should use during the year?
Answer:
127.45%
Explanation:
Data provided
Total overhead cost = $1,300,000
Total direct material cost = $1,020,000
The calculation of predetermined overhead rate is given below:-
Predetermined Overhead rate = Total overhead cost ÷ Total direct material cost × 100
= $1,300,000 ÷ $1,020,000 × 100
= 127.45%
So, for calculating the predetermined overhead rate we simply applied the above formula.
At year-end (December 31), Chan Company estimates its bad debts as 0.40% of its annual credit sales of $882,000. Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $441 account of P. Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off.
Prepare the journal entries for these transactions.
1. Record the estimated bad debts expense.
2. Record the entry to write off P. Park's account as uncollectible.
3. Record the reinstatement of Park's previously written off account.
4. Record the cash received on account.
Answer:
1. Debit Bad debt expense $3528
Credit Allowance for doubtful debt $3528
Being entries to record bad debt estimates.
2. Debit Allowance for doubtful debt $441
Credit Accounts receivable $441
Being entries to record receivables gone bad.
3. Debit Accounts receivable $441
Credit Allowance for doubtful debt $441
Being entries to reinstate receivables written off.
4. Debit Cash account $441
Credit Bad debt expense $441
Being entries to record amount received on accounts
Explanation:
When a company makes sales on account, debit accounts receivable and credit sales. Based on assessment, some or all of the receivables may be uncollectible.
To account for this, debit bad debit expense and credit allowance for doubtful debt. Should the debt become uncollectible (i.e go bad), debit allowance for doubtful debt and credit accounts receivable.
Where a debit that had previously been determined to have gone bad gets settled, debit cash and credit bad debt expense.
Amount of bad debt estimates
= 0.4% * $882,000
= $3528
Firms such as IKEA and The Home Depot are known for their use of __________ because they set reasonably low prices but still offer high-quality products and adequate customer services.
Answer:
Value Based pricing.
Explanation:
Value based pricing is something which IKEA and The Home Depot are know for using because this is a way of pricing through which prices are set based on the customer's perception and what he/she thinks of it in his mind. This is also know as customer based/focused pricing because they sell items on prices which customer's believe how exactly it should be.
Thankyou.
Goodluck.
IKEA and The Home Depot employ business strategies that offer high-quality products and customer service at low prices, a principle similar to Walmart's 'everyday low prices.' IKEa uses flat organizational structures to encourage employee engagement, while Amazon's efficient production and cost models allow for competitive pricing.
Stores like IKEA and The Home Depot are known for their successful business strategies which encompass providing high-quality products and adequate customer services while maintaining reasonably low prices. The philosophy behind this approach is akin to the strategy used by Walmart, known as 'everyday low prices.' By targeting a market with elastic demand, these companies find that a slight decrease in prices leads to a significant increase in sales volume, often resulting in overall higher profitability.
IKEA, specifically, employs flat organizational structures within its stores to enhance employee involvement and instill a sense of ownership among its staff. This management strategy contributes to the company's ability to maintain cost-effective operations while fostering a workplace culture that is conducive to delivering value to its customers.
Moreover, companies like Amazon have executed similar principles through efficient production models and cost structures, enabling them to offer lower prices than competitors even when including shipping costs. These business practices highlight the importance of operational excellence in attracting and retaining customers who prioritize cost, convenience, and quality when making purchasing decisions.
Savvy Styles, your salon business, is starting to turn a solid profit. Since you have been operating out of a shared space, you decide it is time to move to a larger salon space of your own and purchase some new chairs and equipment. You get a small business loan from your local bank. Now you should plan to:___________
a. Repay the loan, including interest, over a predetermined amount of time
b. Write the bank a thank you note and put a positive review on Yelp
c. Pay the total interest upfront
d. Pay the minimum payment on the loan to the bank each month
Answer:
I would choose A.
Explanation:
Savvy styles after getting a small business loan from a local bank should plan to repay the loan, including interest, over a predetermined amount of time. Therefore option a is correct.
What is an amortized loan?An amortized loan can be defined as a type of loan that is with scheduled and periodic patents applied to the loan's both principal amount and interest accrued. Here the interest portion of the payments in this type of loan decreases while the principal portion increases.
At first, it pays the relevant interest expense for that particular period and then after that, the remainder of the payment is put toward curtailing the principal amount.
Generally, amortized loans are normally paid off over an extended period with equal amounts paid for each payment period. But there is another option, a person can pay more which further leads to reducing the principal amount they owe.
Types of amortized loans are home loans, auto loans, and personal loans for small projects.
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Residual income is the:A. difference between the net sales that the analyst expects the firm to generate and the required earnings of the firm. B. difference between the net income that the analyst expects the firm to generate and the required earnings of the firm. C. difference between the common stock that the analyst expects the firm to issue and the required earnings of the firm. D. difference between the expenses that the analyst expects the firm to generate and the required earnings of the firm.
Answer:
The correct answer is letter "D": difference between the expenses that the analyst expects the firm to generate and the required earnings of the firm.
Explanation:
Residual income represents the amount that is left after a company has paid all its capital costs. It is the result of acquiring assets to generate steady revenue over time. Real state, bonds, or stocks are examples of corporate and individual residual income.
Therefore, we could say that residual income is calculated by subtracting the expenses of a firm from its expected earnings out of different sources.
financial calculator Bruno's Lunch Counter is expanding and expects operating cash flows of $23,900 a year for 5 years as a result. This expansion requires $66,000 in new fixed assets. These assets will be worthless at the end of the project. In addition, the project requires $5,600 of net working capital throughout the life of the project. What is the net present value of this expansion project at a required rate of return of 12 percent?
Final answer:
The net present value of Bruno's Lunch Counter's expansion project is calculated by finding the present value of expected operating cash flows, and then subtracting the required fixed asset investment and the net working capital. The discount rate used for the present value calculation is 12 percent, and the cash flows are expected to occur annually over a period of 5 years.
Explanation:
The question asks for the net present value (NPV) of an expansion project for Bruno's Lunch Counter, which requires calculating the present value of future operating cash flows and adjusting for the initial investment costs and the working capital required throughout the project. We will follow these steps:
Calculate the present value of the annual operating cash flows.Subtract the initial fixed asset investment and the net working capital requirement.Sum these values to find the NPV at the required rate of return of 12 percent.The NPV formula we will apply is NPV = Σ (Ct / (1 + r)^t) - I - W, where Ct represents the cash flows in each period t, r is the discount rate (12%), I is the initial fixed asset investment, and W is the net working capital requirement.
Assuming that the operating cash flows occur at the end of each year for 5 years, and that the initial investment and working capital are required at the start, we use the present value formula for an annuity to compute the present value of the operating cash flows and then subtract the costs of investment and working capital to reach our final NPV.
Assume we have a firm's per-day production data: one person can produce 8 units, 2 people can produce 15 units, 3 people can produce 18 units, and 4 people can produce 20 units. If the per-unit price of the good produced is $5 and daily per-person wages are $27, how many people should the firm hire?
Answer:
1 person.
Explanation:
For one person;
Wage =$27
Total Cost of units = 8×5 = $40
Per unit profit = (40-27)/8 = $1.625 per unit
For two people;
Wage =$27 × 2 = $54
Total Cost of units = 15×5 = $75
Per unit profit = (75-54)/15 = $1.4 per unit
For three people;
Wage =$27 × 3 = $81
Total Cost of units = 18×5 = $90
Per unit profit = (90-81)/18 = $0.5 per unit
For four people;
Wage =$27 × 4 = $108
Total Cost of units = 20×5 = $100
Per unit profit = (100-108)/20 = -$0.4 per unit
Therefore, for the four cases the maximum profit per unit is $1.625, with one person. And since there is no production limits (minimum). So, the firm should hire 1 person.
This year William provided $4,200 of services to a large client on credit. Unfortunately, this client has recently encountered financial difficulties and has been unable to pay William for the services. Moreover, William does not expect to collect for his services. William has "written off" the account and would like to claim a deduction for tax purposes.a. What amount of deduction for bad debt expense can William claim this year if he uses the accrual method?b. What amount of deduction for bad debt expense can William claim this year if he uses the cash method?
Answer:
a. $,4,200
b. $0
Explanation:
a. What amount of deduction for bad debt expense can William claim this year if he uses the accrual method?
Account receivable that is partially or totally uncollectible can be claimed under accrual method since income and losses are recognized when earned or uncured.
Since there is no expectation that William will collect for his services which he has written its account receivable off, the full amount of $4,200 which he has included in the income is allowed to deducted by him under accrual method.
b. What amount of deduction for bad debt expense can William claim this year if he uses the cash method?
No amount of bad debt can be claimed under cash method since William has not recognized the income for his services in the income.
Therefore, $0 will be claimed.
The asset account "office supplies" has a balance of $800 at the beginning of the year. The amount on hand at the end of the year is $500. The company has calculated the Office Supplies expense for the year to be $3,500. Based on this information, what amount of office supplies was purchased during the year
Answer:
Purchases= $3,200
Explanation:
Giving the following information:
The asset account "office supplies" has a balance of $800 at the beginning of the year. The amount on hand at the end of the year is $500. The company has calculated the Office Supplies expense for the year to be $3,500.
To calculate the number of purchases, we need to use the following formula:
Purchases= expense of the year + ending balance - beginning balance
Purchases= 3,500 + 500 - 800= $3,200
On October 5, Cullumber Company buys merchandise on account from Marin Company. The selling price of the goods is $6,650, and the cost to Marin Company is $3,010. On October 8, Cullumber returns defective goods with a selling price of $840 and a scrap value of $430. Record the transactions on the books of Marin Company, assuming a perpetual approach.
Answer:
October 5 entries
Debit Accounts receivable $6,650
Credit Sales Revenue $6,650
To record sales
Debit Cost of goods sold $3,010
Credit Inventory $3,010
To record the cost of sales
October 8 entries
Debit Sales return $840
Credit Accounts receivable $840
To record sales reversal due to sales return
Debit Inventory $430
Credit Cost of goods sold $430
Explanation:
The perpetual inventory system is the one that ensures that the book balance for inventory is adjusted for every purchase, sale or return of inventory.
When inventory is sold on account, the entries required are debit accounts receivable and credit revenue then Debit cost of goods sold and credit inventory.
Kenny, Inc., is looking at setting up a new manufacturing plant in South Park. The company bought some land six years ago for $8.9 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent facilities elsewhere. The land would net $11.7 million if it were sold today. The company now wants to build its new manufacturing plant on this land; the plant will cost $22.9 million to build, and the site requires $1,040,000 worth of grading before it is suitable for construction. Required: What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars (e.g., 1,234,567).)
Answer:
The proper cash flow amount to use as the initial investment in fixed assets when evaluating this project is $35,640,000.
Explanation:
Cash flow = Opportunity costs + cost + upgrdation
= $11.7 million + $22.9 million + $1,040,000
= $35,640,000
Therefore, The proper cash flow amount to use as the initial investment in fixed assets when evaluating this project is $35,640,000.
Swifty Industries had sales in 2016 of $7,520,000 and gross profit of $1,261,000. Management is considering two alternative budget plans to increase its gross profit in 2017. Plan A would increase the selling price per unit from $8.00 to $8.40. Sales volume would decrease by 10% from its 2016 level. Plan B would decrease the selling price per unit by $0.50. The marketing department expects that the sales volume would increase by 115,000 units. At the end of 2016, Swifty has 45,000 units of inventory on hand. If Plan A is accepted, the 2017 ending inventory should be equal to 5% of the 2017 sales. If Plan B is accepted, the ending inventory should be equal to 66,000 units. Each unit produced will cost $1.80 in direct labor, $1.40 in direct materials, and $1.20 in variable overhead. The fixed overhead for 2017 should be $1,553,000.
1. Prepare a sales budget for 2017 under each plan.
2. Prepare a production budget for 2017 under each plan.
3. Compute the production cost per unit under each plan.
4. Compute the gross profit under each plan.
5. Which plan should be accepted?
Answer:Kindly check explanation
Explanation:
2016 volume = 7520000 ÷ 8 = 940,000
Plan A volume = 940,000 - (0.1×940000) = 846000
Plan A selling price = $8.40
Plan B selling price = $(8 - 0.5) = $7.5
Plan B volume = $940,000 + 115,000 = 1,055,000
SALES BUDGET ;
—-------------------------- Plan A. PlanB
Expected unit sale-846,000; 1055000
Unit selling price - $8.40. ; $7.50
Total sales - $7,106,400; $7,912,500
PRODUCTION BUDGET ;
------------------------------- PlanA. PlanB
Expected unit sales- 846000. 1055000
Add:
ending inventory - 42,300. 66,000
Total required unit - 888300. 1,121,000
Less:
Beg. finished goods - 45000. 45000
Tot. required goods - 843,300. 1,076,000
C.
Variable cost = $(1.80+1.40+1.20) = $4.40
Variable cost(PlanA) = $4.40 × 843300 = $3,710,520
Variable cost(PlanB) = $4.40 × 1076000 = $4,734,400
--------------------------------- PlanA. PlanB
Variable cost 3,710,520. 4,734,400
Fixed cost 1553000. 1553000
Total cost(c) 5,263,520. 6,287,400
Total unit(u). 843,300. 1,076,000
Unit cost (c/u) $6.24. $5.84
D.) GROSS PROFIT
Cost of goods sold(PlanA) = $6.24 × 846000 = $5,279,040
Cost of goods sold(PlanB) = $5.84 × 1055000 = $6,161,200
--------------------------------- PlanA. PlanB
SALES. $7,106,400 $7,912,500
Cost of goods sold. $5,279,040. $6,161,200
Gross profit. $1,827,360 $1,751,300
E.) Plan A should be accepted due to it's higher gross profit margin
A company's common stock shares are expected to bring a 13 % return to their investors in case of "recession" state of the economy, 6 % return in case of "normal" state of the economy, and result in a 4 % loss in case of "boom" state of the economy. The probability of "boom" is 5 % and the probability of "recession" is 45 %. Calculate the expected rate of return on this company's common stock.
Answer:
The expected rate of return is 8.65%
Explanation:
The expected return on a stock can be calculated by multiplying the return in each scenario by the probability of that scenario. This will provide the expected value of the return based on all these scenarios. Thus, the rate of return is,
Rate of return = rA * pA + rB * pB + rC * pC
Where,
r represents the return in each scenariop represents the probability of each scenarioThe probability of normal state is = 1 - 0.45 - 0.05 = 0.5
Rate of return = 0.13 * 0.45 + 0.06 * 0.5 + (-0.04) * 0.05
Rate of return = 0.0865 or 8.65%
The following information is for a collateralized mortgage obligation (CMO). Tranche A of $50 million receives quarterly payments at 9 percent per year, tranche B of $100 million receives quarterly payments at 10 percent per year, and tranche C of $50 million receives quarterly payments at 11 percent per year.If at the end of the first quarter, the CMO trustee receives total cash flows of $8 million, how are they distributed among the three tranches? (0.2 points)5. What is the principal outstanding on Tranche A, Tranche B, and Tranche C after the end of year payment in the previous question? (0.2 points)
Tano issues bonds with a par value of $180,000 on January 1, 2016. The bonds' annual contract rate is 8%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 10%, and the bonds are sold for $170,862. 1. What is the amount of the discount on these bonds at issuance
Answer:
The discount on the bonds issuance is $9,138.00
Explanation:
discount on bonds at issuance=bonds face value-bonds cash proceeds
bonds face value is $180,000
bonds cash proceeds =$170,862
Discount on bonds at issuance=$180,000-$170,862
Discount on bonds at issuance=$9,138.00
The necessary journal entries to record the bonds issuance are follows:
Dr Cash $170,862.00
Dr discount on bonds issue $9,138.00
Cr Bonds payable $180,000
The discount on the bonds would amortized over relevant years
Issuing bonds is termed as the way for companies to raise the funds for the company. It is referred to as the broad function between the investor and the firm or the corporate. The investor agrees to invest some amount of money in the firm with the guarantee to get a fixed interest in return.
The discount on issuance of the bonds is $9,138.00
Discount on bonds at issuance=bonds face value-bonds cash proceeds
bonds face value is $180,000
bonds cash proceeds =$170,862
[tex]\text{Discount on bonds at issuance}=\$180,000-\$170,862[/tex]
Discount on bonds at issuance=$9,138.00
The necessary journal entries to record the issuance of the bonds have been attached below.
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The 2016 financial statements of CVS Health Corporation reported the following information (in millions): 2016 2015 Net sales $177,526 $153,290 Cost of sales 148,669 126,762 Inventories, net 14,760 14,001 The inventory turnover ratio for 2016 is: A. 9.22 B. 11.48 C. 9.33 D. 10.34 E. None of the above
Answer:
D. 10.34
Explanation:
The computation of inventory turnover ratio is shown below:-
For computing the inventory turnover ratio first we need to find out the average inventory
Average inventory = (Opening stock + Closing stock) ÷ 2
= ($14,760 + $14,001) ÷ 2
= 14380.50
Inventory turnover ratio = Cost of goods sold ÷ Average inventory
= $148,669 ÷ 14380.50
= 10.34
You are considering upgrading from your current inkjet printer to a laser printer. Your old printer cost $350. The new printer costs $600. Print cartridges for the old printer cost $80 each, and print cartridges for the new printer cost $120 each. Cartridges for both printers last for approximately 500 sheets of printing. Your roommate has offered to purchase your old printer for $50. Which cost is a sunk cost
Answer:
$300 i.e irrecoverable cost of old printer
Explanation:
Sunk costs refer to those costs incurred in the past which can no longer be recovered. Such costs are considered as irrelevant in decision making process since they have no current or future implications.
For example, research and development costs incurred by an enterprise in the past represent sunk costs since those costs can no longer be recovered and secondly have no current or future implications w.r.t investment decisions.
In the given case, the cost incurred in purchase of old printer is a sunk cost, incurred in the past. The irrecoverable part of the said cost i.e $350 less $50 i.e $300 represents sunk cost. Also, the expenditure on old printer's cartridges which costed $80 apiece would be regarded as a sunk cost.
This cost of $300 cannot be recovered and would be considered irrelevant w.r.t the decision of purchasing a new advanced printer.
An oil company has agreed to buy oil from Russia at 1,800 Rubles per barrel. Have it shipped to Amsterdam by a Norwegian shipping line for 20 Kroner per barrel. The oil will be refined in Rotterdam for 20 Euros per barrel. Finally, a Philippine shipping line will bring gasoline to Miami for 200 Philippine pesos per barrel. What is the landed cost in dollars of this four-part transaction
Answer:
Landing cost = 56.49 dollars per barrel.
Explanation:
Buying Cost of oil barrel = 1,800 Rubles, which is equal to 27.50 USD per barrel.
Shipping Cost = 20 Krones, which is equal to 2.35 USD per barrel.
Refining Cost = 20 Euros, which is equal to 22.82 USD per barrel.
Transportation Cost = 200 Philippine peso, which is equal to 3.82 USD per barrel.
Therefore, to find landing cost of the above mentioned transaction = 27.50 + 2.35 + 22.82 + 3.82 = 56.49 USD per barrel.
A product normally sells for $200 per unit. A special price of $180 is offered for the export market. The variable production cost is $160 per unit. An additional export tariff of 10% of revenue must be paid for all export products. What is incremental net income per unit from accepting this special order?
Answer:
Effect on income= $2 increase per unit
Explanation:
Giving the following information:
A special price of $180 is offered for the export market. The variable production cost is $160 per unit. An additional export tariff of 10% of revenue must be paid for all export products.
We need to calculate the effect on income using the following formula:
Effect on income= sales - unitary variable costs
Effect on income= 180 - (160 + 180*0.1)= $2 increase per unit
Riverside Manufacturing designs and manufactures bathtubs for home and commercial applications. Riverside recorded the following data for its commercial bathtub production line during the month of March: Standard DL hours per tub 5 Standard variable overhead rate per DL hour $ 4.00 Standard variable overhead cost per unit $ 20.00 Actual variable overhead costs $ 18 comma 500 Actual DL hours 3 comma 700 Actual variable overhead cost per machine hour $ 5.00 Actual tubs produced 1 comma 200 What is the variable manufacturing overhead efficiency variance in March?
Answer:
The variable manufacturing overhead efficiency variance is 9,000 Favorable.
Explanation:
According to the given data we have the following:
actual DL hours=3,700
standard hours= Actual tubs produced×Standard DL hours per tub
standard hours=1,200×5=6,000
standard rate=$4
Therefore, to calculate the variable manufacturing overhead efficiency variance, we would have to use the following formula:
Variable efficiency variance= (actual hrs - standard hrs)*standard rate
Variable efficiency variance= (3,700 - 6,000)*4
Variable efficiency variance=-$9,000 Favorable
The payroll register of Heritage Co. indicates $4,200 of social security withheld and $1,050 of Medicare tax withheld on total salaries of $70,000 for the period. Earnings of $12,000 are subject to state and federal unemployment compensation taxes at the federal rate of 0.8% and the state rate of 5.4%.
Provide the journal entry to record the payroll tax expense for the period. If an amount box does not require an entry, leave it blank.
a. Payroll Tax Expense
b. Social Security Tax Payable
c. Medicare Tax Payable
d. State Unemployment Tax Payable e. Federal Unemployment Tax Payable
Answer:
General Journal Debit Credit
Payroll Tax expense $ 5,994
Social Security tax Payable $ 4,200
Medicare Tax Payable $ 1,050
State Unemployment Tax Payable $ 648
Federal Unemployment Tax Payable $ 96
the attached image is additional, well formatted
The payroll tax expense is calculated by adding Social Security tax, Medicare tax, state unemployment tax, and federal unemployment tax. The total tax payable comes to $5,994 which is allocated among the four categories.
Explanation:In order to record the payroll tax expense for the period, we would debit the payroll tax expense for the total amount of taxes withheld. This includes Social Security, Medicare, state unemployment tax, and federal unemployment tax.
The detailed calculation of the taxes are as follows:
Social Security Tax Payable: Already provided as $4,200
Medicare Tax Payable: Already provided as $1,050
State Unemployment Tax Payable: Calculated as $12,000 * 5.4% = $648
Federal Unemployment Tax Payable: Calculated as $12,000 * 0.8% = $96
So the journal entry to record the payroll tax expense is:
Payroll Tax Expense $5,994
Social Security Tax Payable $4,200
Medicare Tax Payable $1,050
State Unemployment Tax Payable $648
Federal Unemployment Tax Payable $96
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Baker Company uses the weighted-average method in its process costing system. The Assembly Department started the month with 8,000 units in its beginning work-in-process inventory that were 90% complete with respect to conversion costs. An additional 95,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 11,000 units in the ending work-in-process inventory of the Assembly Department that were 90% complete with respect to conversion costs. What were the equivalent units of production for conversion costs in the Assembly Department for the month
Answer:
the equivalent units of production for conversion costs in the Assembly Department for the month are 101,900
Explanation:
Step 1 Calculate the Units Completed and Transferred to Finished Goods
Units Completed and Transferred to Finished Goods = units in beginning work-in-process inventory+ units were transferred in from the prior department-units in the ending work-in-process inventory
therefore, Units Completed and Transferred to Finished Goods = 8,000+95,000-11,000 = 92,000
Step 2 Calculate the equivalent units of production for conversion costs
Note : work-in-process inventory of the Assembly Department that were 90% complete with respect to conversion costs
Work-in-process inventory (11,000× 90%) = 9,900
Units Completed and Transferred Out (92,000× 100%) = 92,000
Total equivalent units of production = 101,900
Answer:
Equivalent unit of production = 101,900 units
Explanation:
Calculating the unit transfer to next department using the formula;
Unit transfer to next department = unit in beginning work in progress+unit started into production -unit in ending work in progress
Unit transfer to next department = 8000+95000-11000
= 92,000
Calculating the conversion unit, we have;
Conversion = 11,000*90%
= 9900
Therefore,
Equivalent unit of production = Unit transfer to next department + Conversion
= 92,000+9900
= 101,900 units
Equivalent unit of production = 101,900 units
Greener Pastures Corporation borrowed $1,800,000 on November 1, 2015. The note carried a 8 percent interest rate with the principal and interest payable on June 1, 2016. (a) The note issued on November 1. (b) The interest accrual on December 31. 1. Indicate the effects of the amounts for the above transactions. (Enter any decreases to account balances with a minus sign. Do not round intermediate calculations.)
Answer:
Dr cash $1,800,000
Cr Notes payable $1,800,000
Interest accrual:
Dr Interest expense $24,000
Cr Interest payable $24,000
Assets =liabilities + shareholders'equity
+Cash $1,800,000 =+loan $1800,000
=+liabilities $24,000 + -retained earnings $2400
Explanation:
The issue of notes payable on November 1 2015 implies that there is cash inflow of $1,800,000 while current liabilities also increased by $1,800,000,as result cash is debited with the $1,800,000 and credit is posted notes payable.
On 31st December ,interest of two months would been incurred and should be accrued in the accounts with amount below:
$1,800,000*8%*2/12=$24,000
This should be debited to interest expense and credited to interest payable account
(a) On Nov 1
Cash
To Note Payable
(Being the note issued is recorded)
(b) On Dec 31
Interest expense $24,000 (8% of $1,800,000 × 2 ÷ 12)
To Interest payable $24,000
(Being interest expense is recorded)
Now the impacts are as follows:Assets = Liabilities + Equity
+ Cash + Note payable ($1,800,000)
($1,800,000) + Interest payable ($24,000) - Interest expense ($24,000)
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The major prediction of the lemons model is that:
a. asymmetric information reduces the average quality of goods offered for sale.
b. a used car in good condition can be sold for a higher-than-average price.
c. people will generally choose "low-hanging fruit".
d. used cars offered for sale are generally in better-than-average condition.
Answer:
A) asymmetric information reduces the average quality of goods offered for sale.
Explanation:
The lemons model or problem refers to investing or purchase related problems due to the fact that investors/buyers have different information about securities/products than the sellers.
Since investors/buyers know that there are lemons (bad products) up for sale, but do not know which of them are actually bad, they will be willing to pay a lower price for high quality investments/goods than if only high quality investments/goods were sold without any lemons mixed with them.
Southeastern Bell stocks a certain switch connector at its central warehouse for supplying field service offices. The yearly demand for these connectors is 15 comma 000 units. Southeastern estimates its annual holding cost for this item to be $25.00 per unit. The cost to place and process an order from the supplier is $75.00. The company operates 300 days per year, and the lead time to receive an order from the supplier is 2 working days. a) What is the economic order quantity? nothing units (round your response to the nearest whole number). b) What are the annual holding costs? $ nothing (round your response to the nearest whole number). c) What are the annual ordering costs? $ nothing (round your response to the nearest whole number). d) What is the reorder point? nothing units (round your response to the nearest whole number).
Answer:
EOQ= 300 units
Annual ordering cost= $3750
Annual holding cost =$3750
Re-order point =100 units
Explanation:
The Economic Order Quantity (EOQ) is the order size that minimizes the balance of ordering cost and holding cost. At the EOQ, the carrying cost is equal to the holding cost.
It is computed using he formulae below
EOQ = √ (2× Co× D)/Ch
EOQ = √ (2× 75× 15,000)/25
EOQ = 300 units
Annual holding cost
= EOQ/2 × holding cost per unit
= 300/2 × $25
=$3750
Annual ordering cost
= Annul demand/EOQ × ordering cost per order
=( 15,000/300)× $75
= $3750
Re-order Point
Maximum consumption × maximum lead time
=( 15,000/300)× 2 = 100 units
Bledsoe Company received $28,000 cash from the issue of stock on January 1, 2013. During 2013 Bledsoe earned $9,800 of revenue on account. The company collected $8,600 cash from accounts receivable and paid $6,700 cash for operating expenses. Based on this information alone, during 2013.
o Total assets increased by $39,700.
o Total assets increased by $1,900.
o Total assets increased by $31,100.
o Total assets did not change.
Answer:
During 2013:
Total assets increased by $31,100.
Explanation:
Bledsoe Company received $28,000 cash from the issue of stock on January 1, 2013. Total assets increased by $28,000
Bledsoe earned $9,800 of revenue on account. Account receivable increased by $9,800. Total assets increased by $9,800
The company collected $8,600 cash from accounts receivable. Cash account increased by $8,600 and Account receivable decreased by $8,600. Total assets did not change.
The company paid $6,700 cash for operating expenses. Cash account decreased by $6,700. Total assets decreased by $6,700
During 2013:
Total assets increased = $28,000 + $9,800 - $6,700 = $31,100
Based on the provided information, during 2013, the total assets increased by $1,900. So, the correct option is B.
To determine the change in total assets, we can analyze the impact of various financial transactions. Bledsoe Company received $28,000 cash from the issuance of stock, which is considered an inflow of assets, increasing the total assets by $28,000.
Next, the company earned $9,800 of revenue on account, indicating an increase in accounts receivable (an asset) by $9,800. When the company collected $8,600 cash from accounts receivable, this increased the cash account by $8,600 but reduced accounts receivable by the same amount. Therefore, there was no net change in total assets from this transaction.
Finally, the company paid $6,700 cash for operating expenses, which decreased the cash account by $6,700. However, since this is an expense and not an asset, it does not directly impact the total assets.
Adding up the changes, $28,000 (issuance of stock) - $6,700 (operating expenses) = $21,300, and $21,300 + $9,800 (revenue) - $8,600 (collection of accounts receivable) = $1,900. Therefore, the total assets increased by $1,900 during 2013.
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there are a 140 pounds of flour in inventry on october 1. 1400 loaves are to be produced in october and 1500 loaves in november. flour costs $3 per pound and 1/2 pound is used per loaf. with the policy of 20% of next month's needs being in ending inventory, what is the budget for flour purchases in october
Answer:
The budgeted floor purchases for October is 710 pounds and the cost of 710 pounds of flour is $2130
Explanation:
The flour needed to meet the October's production requirement for loaves is,
1400 * 1/2 = 700 pounds
The desired ending inventory of flour in October = 1500 * 1/2 * 0.2 = 150 pounds
The purchases for October should be enough to meet the desired ending inventory for October and the remaining Production requirement for October after adjusting for opening inventory .
Purchases = Closing Inventory + Production - Opening Inventory
Purchases = 150 + 700 - 140 = 710 pounds
The cost of purchases = 710 * 3 = $2130
The planned flour purchases for October are 710 pounds and the cost for total flour is $2130.
Given that,
Opening stock is 140 pounds.Flour cost $3 per pound and 1/2 pound is used per loaf.In October, production are 1400 loaves and in November, production will be 1500 loaves.Safety stock of 20% of next month needs to be maintained.According to the scenario, computation of given data are as follows,
Flour needs for October production = 1,400 loaves [tex]\times[/tex] 1/2 pound
= 700 pounds
Flour needs for 20% of November production = (1,500 loaves [tex]\times[/tex] 1/2 pounds) [tex]\times[/tex] 20%
= 150 pounds
So, total purchase of flour in October will be as follows,
Purchases = 20% Inventory of Nov. + Current month production - Opening stock
By putting the value, we get,
Purchases = 150 Pounds + 700 pounds - 140 Pounds
= 710 pounds
So, cost of 710 pound flour purchases = 710pounds [tex]\times[/tex] $3
= $2,130
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Assume that the standard deviation of the U.S. market portfolio is 18.2%, the standard deviation of the world portfolio is 17.1%, and the correlation between the U.S. and nonU.S. market portfolios is .47. Suppose you invest 25% of your money in the U.S. stock market and the other 75% in the nonU.S. portfolio. What is the standard deviation of your portfolio?
Answer:
15.5%
Explanation:
The computation of the standard deviation of your portfolio is shown below:
Standard deviation of portfolio = weight of US Market portfolio ^2 × Standard deviation of US Market portfolio ^2 + weight of Non US Market portfolio^ 2 × Standard deviation of Non US Market portfolio^2 + 2 × weight of US Market portfolio × weight of Non US Market portfolio × Standard deviation of US Market portfolio × Standard deviation of Non US Market portfolio × correlation
= [0.25^2 × 18.2^2 + 0.75^2 × 17.1^ 2 + 2 × 0.25 × 0.75 × 18.2 × 17.1 × 0.47]
= (0.0625 × 331.24 + 0.5625 × 292.41 + 54.852525
= 20.7025 + 164.480625 + 54.852525
= 240.03565
Now take the square root of 240.03565 i.e 15.5%
We simply applied the above formula
b) The standard deviation of the portfolio is approximately 15.5%.
To find the standard deviation of a portfolio with multiple assets, you can use the formula for the standard deviation of a two-asset portfolio:
σp = √[(w₁² × σ₁²) + (w₂² × σ₂²) + (2 × w₁ × w₂ × σ₁ × σ₂ × ρ₁₂)]
Where: σp = standard deviation of the portfolio, w₁ and w₂ = weights of the assets in the portfolio, σ₁ and σ₂ = standard deviations of the assets, and ρ₁₂ = correlation between the assets.
Given: σ₁ (U.S.) = 18.2%, σ₂ (Non-U.S.) = 17.1%, ρ₁₂ = 0.47, w₁ = 0.25, w₂ = 0.75
Plugging in the values:
σp = √[(0.25² × 18.2²) + (0.75² × 17.1²) + (2 × 0.25 × 0.75 × 18.2 × 17.1 × 0.47)]
= √[(0.0625 × 331.24) + (0.5625 × 292.41) + (2 × 0.25 × 0.75 × 18.2 × 17.1 × 0.47)]
= √[20.7025 + 164.10525 + 54.78585]
= √[239.5936]
≈ 15.48%
Therefore, the standard deviation of the portfolio is approximately 15.5% (closest to option b).
Complete question
Assume the standard deviation of the U.S. market portfolio is 18.2%, the standard deviation of the non-U.S. portion of the world portfolio is 17.1%, and the correlation between the U.S. and non-U.S. market portfolios is .47. Suppose you invest 25% of your money in the U.S. stock market and the other 75% in the non-U.S. portfolio. What is the standard deviation of your portfolio?
a) 16.7%
b) 15.5%
c) 17.1%
d) 18.6%
Calculate the values for each of the questions. Assume that in each country there are no taxes, international trade, or inflation and that interest rates are fixed. The Italian government decides to stimulate the economy by sending checks worth $70 billion to Italian consumers. If the government spending multiplier is 1.5 , calculate the MPC to determine the final change in Italy's real GDP due to the transfer. Please give your answer as a whole number in billions of dollars. $ billion The Greek government decides to introduce new austerity measures, which reduce government direct spending by $16 billion. Greece has a marginal propensity to consume of 0.6 . What will be the final change in real GDP as a result of this decreased spending
Answer:
The answer is:
For italy: $35 billion
For Greece: -$40 billion
Explanation:
Injection into the economy = $70 billion.
Government spending multiplier is 1.5.
MPC = $70billion x 1.5
=$105 billion.
Change in Italy's real GDP due to the transfer = $105 billion - $70 billion
= $35 billion.
Greek Government.
Multiplier effect = 1 ÷ (1-MPC)
1 ÷ (1-0.6)
1÷ 0.4
-2.5.
It is negative because it is a reduction in government spending.
Therefore, the final change in real GDP as a result of this decreased spending is
-2.5 x $16 billion
= -$40 billion