Answer:
1) Traditional Income Statement
Particulars Value Total Amount
Sales 20,000 units @ $30 = $600,000
Less: Manufacturing Expenses
Cost of goods sold $24,000 + $180,000 - $44,000 $160,000
Gross Margin $440,000
Less: Operating Expenses
Administrative Expense $70,000
Selling expense $120,000 $190,000
Operating Income $250,000
Note: In traditional statement fixed and variable are not segregated and only direct cost associated is subtracted to calculate cost of goods sold, then gross margin is calculated. After that selling and administration expenses are deducted to calculate net operating income.
2) Contribution format income Statement
Particulars Total Amount
Sales 20,000 units @ $30 = $600,000
Less : Variable Costs
Cost of goods sold $24,000 + $180,000 - $44,000 $160,000
Variable selling expense $4 X 20,000 $80,000
Variable Administrative Cost $2 X 20,000 $40,000
Contribution Margin $320,000
Less: Fixed Cost
Fixed Selling expense $40,000
Fixed Administration Expense $30,000
Net operating Income $250,000
Note: In contribution statement fixed and variable expenses are segregated and firstly after deducting variable expense contribution margin on sales is calculated, and then after that deducting fixed cost we get net operating income.
Here, we are going to Prepare the traditional income statement and contribution format income statement.
Traditional Income Statement
Particulars Amount Amount
Sales $600,000
(20,000 units * $30)
Less: Manufacturing Expenses
Cost of goods sold $160,000
($24,000 + $180,000 - $44,000)
Gross Margin $440,000
Less: Operating Expenses
Administrative Expense $70,000
Selling expense $120,000 $190,000
Operating Income $250,000
Contribution format income Statement
Particulars Amount Amount
Sales $600,000
(20,000 units*$30)
Less: Variable Costs
Cost of goods sold $160,000
($24,000 + $180,000 - $44,000)
Variable selling expense $80,000
($4 X 20,000)
Variable Administrative Cost $40,000 $280,000
($2 X 20,000)
Contribution Margin $320,000
Less: Fixed Cost
Fixed Selling expense $40,000
Fixed Administration Expense $30,000
Net operating Income $250,000
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The most recent financial statements for Bello Co. are shown here: Income Statement Balance Sheet Sales $ 19,500 Current assets $ 11,820 Debt $ 16,060 Costs 13,300 Fixed assets 28,800 Equity 24,560 Taxable income $ 6,200 Total $ 40,620 Total $ 40,620 Taxes (23%) 1,426 Net income $ 4,774 Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 45 percent dividend payout ratio. What is the internal growth rate?
Answer:
IGR = 9.1640%
Explanation:
[tex]IGR = \frac{ROA \times retention}{1-(ROA \times retention)}[/tex]
.45 dividend payout ratio
1 - .45 = .55 retention ratio
ROA = Return on Assets
[tex]\frac{Earning \: before\: interest\:and\: taxes}{Toal \: Assets}[/tex]
Income before taxes 6,200
Assets 11,820 + 28,800 = 40,620 Total Assets
ROA 6,200 / 40,620 = 0.15263417
[tex]IGR = \frac{ROA \times retention}{1-(ROA \times 0.retention)}[/tex]
[tex]IGR = \frac{0.15263471 \times .55}{1-(0.15263471 \times 0.55)}[/tex]
IGR = 0.09164031 = 9.1640%
The internal growth rate is the maximum growth rate a company can achieve with its own financing. For Bello Co., it is calculated using the retention ratio derived from the dividend payout ratio and the return on assets from the financial statements.
The internal growth rate of a company is calculated to determine how much a company can grow using its own resources without needing to finance growth through debt or equity. For Bello Co., we start by calculating the retention ratio, which is the opposite of the dividend payout ratio. Since the company maintains a constant 45 percent dividend payout ratio, the retention ratio is 55 percent (100% - 45%). The net income is reinvested into the company at this rate. Next, we apply the formula for the internal growth rate (IGR), which is IGR = (Retention Ratio * ROA) / (1 - Retention Ratio * ROA), where ROA (Return on Assets) is Net Income / Total Assets. From the given information, Bello Co.'s Net Income is $4,774 and Total Assets are $40,620, leading to a ROA of $4,774 / $40,620. The internal growth rate formula can then be used to find the maximum growth Bello Co. can sustain without external financing.
Bateman Corporation sold an office building that it used in its business for $800,950. Bateman bought the building ten years ago for $599,525 and has claimed $201,425 of depreciation expense. What is the amount and character of Bateman's gain or loss?
Answer:
The amount of Bateman's gain is $402,850, in character of profits from the sale of property and equipment
Explanation:
The gain of selling an asset is determined by the formula: Sale price minus Book value. The book value of the building is Cost minus accumulated depreciation. So, the book value is [tex]599,525 - 201,425 = 398,100[/tex]
Then, the amount of Bateman's gain is equal to [tex]800,950 - 398,100 = 402,850[/tex].
Bateman Corporation has a gain of $402,850 on the sale of its office building. This gain is considered a Section 1231 gain, which is usually taxed at lower capital gains tax rates.
Explanation:To understand the amount and character of Bateman's gain or loss, we need to calculate the adjusted basis of the property, which is original cost less depreciation, and then compare this with the selling price. In Bateman's case, the company bought the property for $599,525 and has claimed $201,425 in depreciation.
Thus, the adjusted basis of the property is $599,525 - $201,425, which equals $398,100.
Bateman then sold this property for $800,950. To calculate the gain or loss, we subtract the adjusted basis ($398,100) from the selling price ($800,950). This gives us $800,950 - $398,100 = $402,850.
Therefore, Bateman Corporation has a gain of $402,850 on the sale of the office building. Since this property was used in the business, the gain is considered a Section 1231 gain, which is generally taxed at favorable capital gains tax rates.
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Rosewood Company made a loan of $8,600 to one of the company's employees on April 1, Year 1. The one-year note carried a 6% rate of interest. The amount of interest revenue that Rosewood would report during the years ending December 31, Year 1 and Year 2, respectively, would be:
The interest revenue that Rosewood Company would report during the years ending December 31, Year 1 and Year 2 is $387 and $516 respectively.
Explanation:The subject of this question is the calculation of interest revenue for a loan. The Rosewood Company made a loan of $8,600 to an employee on April 1 in Year 1 with a 6% interest rate. Interest for a period is calculated by multiplying the principal amount by the interest rate and the time the money is lent. Hence, for Year 1, the interest period is from April 1 to December 31 (9 months or 0.75 years). So, the interest for Year 1 is $8600 * 6/100 * 0.75 = $387. For Year 2, the interest period is for the entire year. Therefore, the interest revenue for Year 2 is $8600 * 6/100 * 1 = $516. In conclusion, Rosewood will report an interest revenue of $387 for Year 1 and $516 for Year 2.
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A 37.0-$kg$ body is moving in the direction of the positive x axis with a speed of 342 $m/s$ when, owing to an internal explosion, it breaks into three pieces. One part, whose mass is 5.0 $kg$, moves away from the point of explosion with a speed of 311 $m/s$ along the positive y axis. A second fragment, whose mass is 4.0 $kg$, moves away from the point of explosion with a speed of 402 $m/s$ along the negative x axis. What is the speed of the third fragment? Ignore effects due to gravity.
Answer: [tex]v_{3}[/tex] = 512.3 m/s
Explanation:
Given:
M = 37 kg
v = 342 m/s
[tex]m_{1}[/tex] = 5 kg
[tex]v_{1}[/tex] = 311 m/s
[tex]m_{2}[/tex] = 4 kg
[tex]v_{2}[/tex] = 402 m/s
∴ [tex]m_{3}[/tex] = M - [tex]m_{1}[/tex] - [tex]m_{2}[/tex]
[tex]m_{3}[/tex] = 28 kg
Now, to compute the speed of third fragment we will apply conservation of momentum:
M[tex]\times[/tex]v = [tex]m_{1}\times v_{1}[/tex] + [tex]m_{2}\times v_{2}[/tex] +[tex]m_{3}\times v_{3}[/tex]
Putting values in the equation given above:
37[tex]\times[/tex](342)[tex]\hat{i}[/tex] = 5[tex]\times[/tex](311)[tex]\hat{j}[/tex] + 4[tex]\times[/tex](402)[tex]\hat{-i}[/tex] + 28[tex]\times v_{3}[/tex]
[tex]v_{3}[/tex] = 509.3 m/s [tex]\hat{i}[/tex] - 55.53 m/s [tex]\hat{j}[/tex]
Now, the magnitude of velocity of the third particle is;
[tex]v_{3}[/tex] = [tex]\sqrt{509.3^{2} + 55.53^{2} }[/tex]
[tex]v_{3}[/tex] = 512.3 m/s
The problem talks about the conservation of momentum, where the total momentum of an isolated system remains constant if no external forces act on it. It requires finding the velocity of the third piece after the explosion by setting up and solving an equation based on afore-mentioned principle.
Explanation:The subject matter of this question pertains to the physics principle known as conservation of momentum. In the question, when the body breaks into three pieces, the momentum before the explosion is equal to the momentum after the explosion. This is due to the fact that no external forces are acting upon the system, thus, the total momentum of the system is conserved.
Mathematically, we calculate it as follows:
Momentum before the explosion will be the mass of the body times its velocity, i.e., (37.0 kg)(342 m/s), on the positive x axis.
After explosion, momentum is the vector sum of the momenta of all the parts. The fragments moving on the y-axis have no effect on the total momentum on the x-axis. Therefore, the third fragment's velocity (v) can be calculated from the equation: (37.0 kg)(342 m/s) = (5.0 kg)(311 m/s) + (4.0 kg)(-402 m/s) + (28.0 kg)(v), where we got 28.0 kg as the mass of the third fragment by subtracting the known masses from the total mass. By solving this equation, we can find the velocity of the third fragment.
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The market basket used to calculate the CPI in Aquilonia is 4 loaves of bread, 6 gallons of milk, 2 shirts, and 2 pairs of pants. In 2005, bread cost $1.00 per loaf, milk cost $1.50 per gallon, shirts cost $6.00 each, and pants cost $10.00 per pair. In 2006, bread cost $1.50 per loaf, milk cost $2.00 per gallon, shirts cost $7.00 each, and pants cost $12.00 per pair. Using 2005 as the base year, what was Aquilonia’s inflation rate in 2006?
Final answer:
The inflation rate in Aquilonia for 2006, using 2005 as the base year, is calculated by comparing the total cost of a market basket of goods for each year. The inflation rate is found to be approximately 24.44%.
Explanation:
To calculate the inflation rate in Aquilonia for 2006 using 2005 as the base year, we first need to compute the total cost of the market basket for each year. The cost of the market basket in the base year (2005) is the sum of the products of the quantities and the respective prices of the goods:
4 loaves of bread at $1.00 each = $4.006 gallons of milk at $1.50 each = $9.002 shirts at $6.00 each = $12.002 pairs of pants at $10.00 each = $20.00The total cost of the market basket in 2005 is $4.00 + $9.00 + $12.00 + $20.00 = $45.00.
Next, we calculate the total cost of the market basket in 2006:
4 loaves of bread at $1.50 each = $6.006 gallons of milk at $2.00 each = $12.002 shirts at $7.00 each = $14.002 pairs of pants at $12.00 each = $24.00The total cost of the market basket in 2006 is $6.00 + $12.00 + $14.00 + $24.00 = $56.00.
The inflation rate can now be calculated using the formula:
Inflation rate = ((Cost in current year - Cost in base year) / Cost in base year) * 100%
Inflation rate = (($56.00 - $45.00) / $45.00) * 100% = (11 / 45) * 100% ≈ 24.44%
Therefore, the inflation rate in Aquilonia for 2006, using 2005 as the base year, is approximately 24.44%.
Girls between the ages of 8 and 15 are one of the growing markets for high-end shoe manufacturers, and podiatrists say the trend is leading to many stylish young girls with grown-up foot problems. To many parents and podiatrists, shoe manufacturers who develop and market adult-styled shoes to this group are not operating at a(n) _____ responsibility level.
Answer:
Shoe manufacturers are not operating at an corporate social responsibility level.
Explanation:
Corporate social responsibility is that kind of business model which is self regulating in the nature. This is also know as corporate citizenship , according to this model company's try to operate their business in such ways that do no harm to the environment or negatively affect the society but here the motto of the company's are to enhance the society, environment , and the customer satisfaction. Company's working on this approach try to be accountable for their actions towards the consumer and society . In this question shoe manufacturers are not operating at an corporate social responsibility level.
Answer: Ethical
Explanation: The shoe manufacturers who develop and market adult-styled shoes to this group are not operating at an ethical responsibility level of the pyramid of corporate social responsibility. The ethical aspect deals with going to great extents across legal requirements to meet the expectations of society. Social responsibility is the duty of business to do no harm to society. In other words, in their daily operations, the shoe makers were not concerned about the welfare of their customers and were not mindful of how their actions affected them later on. Therefore, they weren't operating at an ethical level.
. ___________________________ are formal written policies describing employee behavior when using company computer and network systems. A. Mitigating controls B. Nondisclosure agreements C. Confidentiality agreements D. Acceptable use policies
Answer:
D - Acceptable use policies
Explanation:
High SchoolBusiness 5 points
The human resources department of french quarter seafood conducted a training workshop on setting and achieving organization goals. alex, the store manager of the new orleans location, has been working with his managers to set objectives that are clearly defined, focused on achieving specific results, and can be accomplished with a given amount of resources. Which aspect of smart goals is missing?
Answer: The aspect of the SMART goal that is missing is Deadlines or Target date.
Explanation:
Here SMART is abbreviated as Specific, Measurable, Attainable, Result oriented and Time bound. The aspect of the time bound has not been included in this respective scenario.
As you track your progress, you'll act, observe, adjust, and then
A. act again. B. announce the results. C. react. D. study the results..19
Answer:
A.
Act again
Explanation:
Makes sense when you think about it.
In the question, it's asking you what would be the next step after adjust when you track your progress.
When you're tracking progress, the most important thing to do is keep consistent with what you're doing until you hit the goal.
Answer: A). Act AgainThis answer would be the most reasonable in this context, due to the fact that you would need to repeat the act, possibly improve the act, when you're tracking your progress to see if anything changed.
If you stop "acting" on the progress you're trying to track, then the data that you would receive from tracking the progress would not be consistently increasing in a business stand point. In a business, if you observe and notice that something is not right, you would adjust whatever is wrong and would "repeat" the act, or act again, in order to see if progress has been made form the previous act.
I hope this helps you outGood luck on your academicsHave a great rest of your day!As the number of firms in an oligopoly ____, the oligopoly becomes more ____.A. decreases; competitive B. decreases; like a monopoly C. increases; like a monopoly D. increases; like perfect competition E. both b. and d.
Answer:
E. both b. and d.
Explanation:
As the number of firms in an oligopoly decreases and increases, the oligopoly becomes more like a monopoly and like perfect competition.
Five years ago, repairs were made to the building which cost $80,000. The building has a current market value of $424,000 and a current book value of $399,000. The building is completely paid for and solely owned by the firm. If the company decides to assign this building to a new project, what value, if any, should be included in the initial cash flow of the project for this building?
Answer:
The initial cash flow of the project for this building should include the current market value of $424,000.
Explanation:
The $80,000 cost involved in the repairs made in the building can not be included in the new project. Because this cost was incurred five years ago, it should not be included in new project, since the financial statements is different for separate projects. So, the initial cash flow will include only the current market value which is $424,000.
WJ Group Inc., a large multinational conglomerate, had begun to experience declining revenues over the years. The top management at the headquarters of the company decided that it was important for the company to avoid deviating from its core competencies. Thus, a few of the company's key businesses like energy, telecommunications, and automobiles were centralized, giving the top management more control over them. Also, relatively newer businesses like beverages and food processing were divested. In this scenario, WJ Group is involved in
Answer: WJ Group is involved is Restructuring.
Explanation:
Restructuring is a reorganization of a company with a view to attaining greater efficiency and profit, or to adapt to a changing market.
Sam died with a gross estate equal to $3,000,000. In his will, Sam provided for the following outright transfers: $1,000,000 to his wife; $1,000,000 to his daughter; and $1,000,000 to charity. What is Sam's taxable estate for estate tax purposes?
Answer:
$0
Explanation:
In 2018, one individual could give up to $5.6 million in gifts before any estate or gift taxes were applied. This means that Sam would not have to pay a single penny to the government as long as his will does not exceed $5.6 million.
The Assembly Department started the month with 25,100 units in its beginning work in process inventory. An additional 310,100 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 30,100 units in the ending work in process inventory of the Assembly Department. How many units were transferred to the next processing department during the month
Answer:
315,000 Transferred-out
Explanation:
25,100 beginning WIP
+310,100 transferred in
-30,100 ending WIP
315,000 Transferred-out
The tranferred-in are units that comes into this process from a previous process.
Transferrred-out are the units that leave the process to another process or to finished goods inventory.
305,100 units were transferred to the next processing department during the month. By using the formula (Beginning WIP + Units Transferred in) - Ending WIP, we calculate that 305,100 units were transferred out to the next processing department during the month.
The formula for this calculation is as follows:
Units transferred out = (Beginning work in process inventory + Units transferred in) - Ending work in process inventory
According to the provided data:
Beginning work in process inventory = 25,100 unitsUnits transferred in = 310,100 unitsEnding work in process inventory = 30,100 unitsApplying these figures to the formula:
Units transferred out = (25,100 + 310,100) - 30,100 = 335,200 - 30,100 = 305,100 units
Therefore, 305,100 units were transferred to the next processing department during the month.
Amy was in charge of reading through the collected customer feedback in the company’s website feedback center and conveying the pertinent information she discovered to the rest of the marketing team. What components of marketing information was she using in this example?
Answer: the correct answer is marketing research and information systems .
Explanation: Marketing research is "the process or set of processes that links the producers, customers, and end users to the marketer through information used to identify and explain marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of the market in general.
An information system is the information and communication technology (ICT) that a company or organization can use, and also the way in which people interact with this technology in support of business processes. Some authors make a clear distinction between information systems, computer systems, and business processes.
Geneva Company manufactures dolls that are sold to various customers. The company works at full capacity for half the year to meet peak demand, and operates at 80% capacity for the other half of the year. The following information is provided: Units produced and sold 600,000 units Selling price $ 35 / unit Variable manufacturing costs $ 20 / unit Fixed manufacturing costs $ 1,200,000 / yr. Variable selling and administrative costs $ 6 / unit Fixed selling and administrative costs $ 950,000 / yr. Geneva receives a purchase order to make 5,000 dolls as a one-time event. The good news is that this order is during a period when Geneva does have excess capacity. What is the lowest selling price Geneva should accept for this purchase order?
Answer: So, the minimum selling price will be $26.
Explanation:
The fixed cost are incurred regardless of the production volume, they're tangential to decision making.
Now,
Minimum selling price that should be accepted for the product is given as follow:
Variable manufacturing cost = $20
Variable selling and admin = $6
Total cost incurred = Variable manufacturing cost + Variable selling and admin = $26.
So, the minimum selling price will be $26.
Answer:
The answer is $26
Explanation:
Please see attachment.
For each item listed below, indicate in the space to the right whether the item would be considered a product cost or a period cost for a manufacturing company. 1. Factory supervisory salaries 2. Sales commissions 3. Income tax expense 4. Indirect materials used 5. Indirect labor 6. Office salaries expense 7. Property taxes on factory building 8. Sales manager's salary 9. Factory wages expense 10. Direct materials used
Answer:
1. Factory supervisory salaries Production Cost Factory Overhead
2. Sales commissions Period Cost Selling expense
3. Income tax expense Period Cost tax expense
4. Indirect materials used Production Cost Factory Overhead
5. Indirect labor Production Cost Factory Overhead
6. Office salaries expense Period Cost Administrative expense
7. Property taxes on factory building Production Cost Factory Overhead
8. Sales manager's salary Period Cost Selling expense
9. Factory wages expense Production Cost Direct Labor
10. Direct materials used Production Cost Direct Materials
Explanation:
A period cost is any cost that cannot be capitalized into prepaid expenses, inventory, or fixed assets
Period cost goes straight to expense account
While
Production Cost do capitalizes through Inventory and later recognize as cost of goods sold.
Clarifying the distinction between product costs and period costs for a manufacturing company.
Explanation:Product Costs:
Direct materials usedIndirect materials usedIndirect laborPeriod Costs:
Factory supervisory salariesSales commissionsIncome tax expenseOffice salaries expenseProperty taxes on factory buildingSales manager's salaryFactory wages expensePharmco incurred the following costs while manufacturing its product: Materials used in production, $120,000; factory depreciation, $60,000; property taxes on the administrative offices, $12,000; labor costs of assembly-line workers, $95,000; factory supplies used, $8,000; advertising expense, $13,000; property taxes on the factory, $20,000; delivery expense, $23,000; salaries of the sales staff, $53,000; and sales commissions, $17,000. Total product costs for Pharmco area.$303,000.b.$315,000.c.$391,000.d. $421,000.
Answer:
Total product costs for Pharmco are a. $303,000
Explanation:
Product cost comprises all the factory costs incurred, which are directly related to production.
Here Product costs will be as follows:
Materials used = $120,000
Add: Factory Depreciation = $60,000
Add: Labor costs = $95,000
Add: Factory Supplies = $8,000
Add: Property taxes on factory = $20,000
Total Product costs = $303,000
Baltimore Company uses a job order cost system and applies overhead based on estimated rates. The overhead application rate is based on total estimated overhead costs of $280,000 and direct labor hours of 25,000. During the month of February 2019, Job 2-1 incurred direct labor of 450 hours. Use this information to prepare the end of the month application General Journal entry (without explanation) of factory overhead for Job 2-1 for the month. If no entry is required then write "No Entry Required."
Answer:
WIP 5,040
Factory Overhead 5,040
Explanation:
[tex]\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate[/tex]
280,000/25,000 = 11.2 per labour hor
Job labour hors x rate = overhead applied
450 x 11.2 = 5,040
We will increase the work in process, because there is no information about the job being complete.
And we will use the factory overhead account to post the applied overhead
To create the General Journal entry for Job 2-1, we calculate the overhead rate per direct labor hour, and then apply that to the direct labor hours of Job 2-1 to find the overhead cost. The entry will then be 'Work In Process $5,040' and 'Overhead $5,040'.
Explanation:To prepare the General Journal entry for the factory overhead for job 2-1, we must first determine the overhead rate per direct labor hour using the formula overhead rate = total estimated overhead / total estimated direct labor hours. From the problem, it is specified that the total estimated overhead is $280,000 and the total estimated direct labor hours are 25,000.
Then we calculate: Overhead rate = $280,000 / 25,000 = $11.2 per labor hour.
Next, we find out the overhead cost for Job 2-1 which is overhead rate * direct labor hours of the job, where in this case it is $11.2 * 450 hours (direct labor hours for Job 2-1) = $5,040.
Therefore, the General Journal entry would look as below:
Work In Process........$5,040
Overhead..............$5,040.
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How does a manager's mindset that sees employees as an expense to be controlled affect the ways that he or she sees their human resource strategy? How would this change if the manager's mindset saw staff as an appreciating asset to be invested in? Describe your experiences in an organization that saw either or both of these mindsets, and your perspective on working for that organization.
Answer: The first approach is short run oriented while the second approach is long run oriented.
Explanation: This can be explained as follows.
In the former approach where the manager consider employees to be as an expense the focus on HR is mainly on recruitment and selection and very low or no emphasis is put on training and development. Only qualified employees who can give desired results with limited resources provided can work under such management.
In the later approach the emphasis of management is on continuous training and development of employee for future benefit of the firm. Such managers considers employees as the most valuable asset of the organisation.
.
I worked in an organisation where management has the later approach, we were constantly motivated for providing results but at the same time mental comfort of employees was taken into consideration.
Saran Company has contacted Crane with an offer to sell it 5,100 of the wickets for $16 each. If Crane makes the wickets, variable costs are $14 per unit. Fixed costs are $8 per unit; however, $5 per unit is unavoidable. Should Crane make or buy the wickets?
Answer:Crane should buy the wicket as it result in saving of $ 1100
Explanation:
Given:
Quantity = 5,100
Price = $16
Variable cost = $14 per unit
Fixed costs = $8 per unit
Buying Cost = 5100 * 16 = $ 81,600
Making Cost = Variable Costs + Avoidable Fixed Costs
Making Cost = 14 * 5100 + (8 - 5) * 5100 = $ 86,700
Crane should buy the wicket as it result in saving of $ 1100 ($86,700 - $81,600).
When comparing the costs of making versus buying the wickets, it's cheaper for Crane to buy the wickets from Saran Company by $1 per unit after considering avoidable costs. This decision is based on cost analysis in production.
Explanation:To make a decision on whether Crane should make or buy the wickets, we must compare the costs associated with each. To buy the wickets from Saran Company, Crane would pay $16 per wicket. To make the wickets themselves, variable costs are $14 per unit, and fixed costs are $8 per unit, though $5 of these fixed costs are unavoidable. Therefore, the total cost per unit to make the wickets is $14 (variable) + $3 (avoidable fixed) = $17.
Given these costs, it is cheaper by $1 per wicket for Crane to buy the wickets from Saran Company rather than making them internally. The calculation we performed is a basic example of cost analysis in production decisions. Under these circumstances, it would be more cost-effective for Crane Company to buy the wickets rather than making them.
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At Bargain Electronics, it costs $30 per unit ($16 variable and $14 fixed) to make an MP3 player at full capacity that normally sells for $51. A foreign wholesaler offers to buy 3,580 units at $28 each. Bargain Electronics will incur special shipping costs of $3 per unit. Assuming that Bargain Electronics has excess operating capacity, indicate the net income (loss) Bargain Electronics would realize by accepting the special order. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Should the order be accepted or rejected?
Answer:
(17,900) net loss
Explanation:
51 - 16 = 35
Special order Contribution margin
28 sales price - 16 variable cost - 3 shipping cost = 9
Total contribution for the order
3,580 units x 9 CM= 32,220
3,580 x 14 fixed cost = (50,120)
(17,900) net loss
We should assume the fixed cost will increase because we are at full capacity.
Bargain Electronics would realize a loss of $17,300 by accepting the special order.
Explanation:To determine the net income (loss) from accepting the special order, we need to calculate the cost of producing the units, including both variable and fixed costs, and subtract it from the revenue generated from selling the units to the foreign wholesaler. The cost to produce each unit is $16 variable cost + $14 fixed cost + $3 shipping cost = $33. So, the total cost to produce 3,580 units is $33 × 3,580 = $117,540.
The revenue from selling the units to the wholesaler would be 3,580 × $28 = $100,240. The net income (loss) is calculated by subtracting the total cost from the revenue: $100,240 - $117,540 = ($17,300). Therefore, Bargain Electronics would realize a loss of $17,300 by accepting the special order.
The primary topic of this question is calculating net income (loss) for a business.
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Purchase-Related Transactions Warwick’s Co., a women's clothing store, purchased $27,000 of merchandise from a supplier on account, terms FOB destination, 2/10, n/30. Warwick’s returned $4,100 of the merchandise, receiving a credit memo, and then paid the amount due within the discount period. a. Journalize Warwick’s Co.'s entry to record the purchase. b. Journalize Warwick’s Co.'s entry to record the merchandise return. c. Journalize Warwick’s Co.'s entry to record the payment.
Answer: Explanation:
inventory 27,000
account payable 27,000
to record purchase on account
account payable 4,100
inventory 4,100
to recordreturn of goods
account payable 22,900 (27,000 - 4,100)
discount received 458 (22,900 x 2%)
cash 22,442 (22,900 - 458)
to record payment within discount period
Major E. has just opened a cooking school focusing on basic meals for new cooks. Each student pays $15 per class and receives all the ingredients necessary to prepare dinner using the recipes demonstrated in the class. Major’s cost to provide the ingredients is $6 per student for each class. Major employs two assistants and pays each of them $1,200 per month. Major’s monthly salary is $1,800. The depreciation on equipment is $1,000 per month and utilities and insurance are $240 per month. Next month, Major plans to earn net income of $1,760. How many students does Major plan to enroll next month?
Answer:
It will need to collect 800`s $15 class
Assuming 4 clases per month
200 student
Explanation:
[tex]Sales \: Revenue - Variable \: Cost = Contribution \: Margin[/tex]
15 - 6 = 9 Contribution Margin
Fixed Cost
2 employee 2,400
mayor salari 1,800
equipment dep 1,000
utilities 240
Total fixed 5,440
[tex]\frac{Fixed\:Cost + Target\: Profit}{Contribution \:Margin \:Ratio} = Sales\: to\: Profit{dollars}[/tex]
(5,440+1,760)/9 = 800
Final answer:
Major plans to enroll 800 students next month to achieve the desired net income of $1,760, after accounting for all costs including salaries, equipment depreciation, and the cost of ingredients.
Explanation:
The question asks how many students Major plans to enroll next month to earn a net income of $1,760. To solve this, we must first calculate Major's total monthly costs and then determine the revenue needed to achieve the desired net income. Major's monthly costs include the salary for two assistants ($1,200 each), Major’s salary ($1,800), depreciation on equipment ($1,000), and utilities and insurance ($240). The cost to provide ingredients is $6 per student per class. The total fixed costs sum up to $1,200 + $1,200 + $1,800 + $1,000 + $240 = $5,440. For Major to achieve a net income of $1,760, the total revenue minus the total cost (including the cost of ingredients per student) must equal $1,760. Thus, we calculate the necessary total revenue: Total Revenue = Total Costs + Desired Net Income => Total Revenue = $5,440 + $1,760 = $7,200. Major charges $15 per student. Thus, we calculate the number of students required to meet the revenue goal: $(15 - $6) x Number of Students = $7,200. Solving this, the Number of Students = $7,200 / $(15 - $6) = $7,200 / $9 = 800.
The following selected amounts are reported on the year-end unadjusted trial balance report for a company that uses the percent of sales method to determine its bad debts expense. Accounts receivable $ 435,000 Debit Allowance for Doubtful Accounts 1,250 Debit Net Sales 2,100,000 Credit All sales are made on credit. Based on past experience, the company estimates 1% of credit sales to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?
The company calculates the Bad Debts Expense as $21,000, which is 1% of the net sales of $2,100,000. The company makes an adjusting entry of debiting the Bad Debts Expense by $21,000 and crediting the Allowance for Doubtful Accounts by $21,000. This reflects an increase in the estimated uncollectible accounts receivable.
Explanation:The company should calculate the Bad Debts Expense as 1% of the net credit sales, based on its experience. The net sales are $2,100,000, so the Bad Debts Expense is $2,100,000 * 1% = $21,000.
The entry to record the estimated bad debts expense is:
This entry increases the Bad Debts Expense and the Allowance for Doubtful Accounts, the latter of which is a contra asset that reduces accounts receivable. It's an estimation of the accounts receivable the company expects to be uncollectible.
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Imagine that you are training a male client who has a medium sized build, is more muscular, and has a considerably amount of lean mass. What would portion control look like for this individual
Explanation:
First of all, I would take Body Mass Index of the male client to have clear idea about the amount of weight he is above or below the healthy weight bracket. Then I would take the fat test to have a knowledge about the excess of less fat in his body.
If he would be below the desirable fat level in his body, I would recommend him with a portion in which he would likely to take more good fats in order to develop healthy fats in his body. Similarly, if his fats are above the healthy range, i would restrict him to take bad fats like oils, creams, etc in his diet.
Now as in this question, the client has a muscular lean body, which means he is in the pretty healthy body type, so i would suggest him to eat everything including carbs, good fats, proteins, etc, but in small quantities.
Newship Inc. has borrowed from its bank at a rate of 8 percent and will repay the loan with interest over the next five years. Its scheduled payments, starting at the end of the year are as follows—$450,000, $560,000, $750,000, $875,000, and $1,000,000. What is the present value of these payments?
To find the present value of the scheduled payments, we need to discount each payment back to its present value using the appropriate interest rate.
Explanation:To find the present value of the scheduled payments, we need to discount each payment back to its present value using the appropriate interest rate. The formula used to calculate present value is:
Present Value = Payment / (1 + Interest Rate)^n
Where Payment is the future payment amount, Interest Rate is the discount rate, and n is the number of periods from now until the payment is received.
Using this formula, we can calculate the present value of each payment and sum them up to find the total present value.
For example, for the first payment of $450,000 at the end of the year, the present value would be:
Present Value = $450,000 / (1 + 0.08)^1 = $450,000 / 1.08 = $416,666.67
Repeat this process for the remaining payments and add up the present values to find the total present value of the payments.
A large hospital has an annual demand for 70.000 booklets on healthy eating. It cost $.75 to store one booklet for a year, and it costs $80 to place an order for a new batch of booklets. Find the optimum number of copies per order.
Answer:
It will order 3,865 booklets
Explanation:
We need to use the formula for Economic Optimal Quantity
[tex]Q_{opt} = \sqrt{\frac{2DS}{H}}[/tex]
Where:
D = annual demand
S= supply cost = ordering cost
H= Holding Cost
[tex]Q_{opt} = \sqrt{\frac{2*70,000*80}{.75}}[/tex]
[tex]Q_{opt} =3,864.37[/tex]
It will order 3,865 booklets
How to Remember:
Demand per year and order cost goes in the dividend.
Holding cost goes in the divisor.
The optimum number of booklets the hospital should order per batch to minimize costs, given an annual demand for 70,000 booklets, an ordering cost of $80, and a holding cost of $0.75, is approximately 3,865 booklets. This is calculated using the Economic Order Quantity (EOQ) model.
Explanation:The subject of this question is in the area of business operations, specifically inventory management. It deals with how to ascertain the optimal number of booklets to order per batch so as to minimize cost.
To find this, we apply the Economic Order Quantity (EOQ) model formula: EOQ = √[(2DS) / H] where D is annual demand, S is ordering cost per order, and H is the annual holding cost per unit.
In this case, the annual demand D=70,000 booklets, the ordering cost S=$80 and the holding cost H=$0.75. Substituting these values into the EOQ formula we get EOQ = √[(2*70000*80) / 0.75] = √[11200000 / 0.75] = √[14933333.33] ≈ 3,865. So the optimum number of copies per order is approximately 3,865 booklets.
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If the U.S. economy went into a recession next year (where incomes and wealth falls), there would be a(n) ____________________ in the ______________________. A) Increase; quantity of cars demanded. B) Decrease; demand for cars. C) no change; demand for cars. D) rightward shift; demand curve for cars. E) right shift; quantity of cars demanded.
Answer: Option B
Explanation: Correct answer is decrease in demand for cars. As the wealth and income of consumer falls their sources of expenditure decreases leading to a decrease in demand in general, this effect is called INCOME EFFECT. The decrease in wealth and income may not severely affect demand of necessary products like daily household consumption products but cars is not a necessity and is considered a luxury item thus its demand will decrease.
You work as an assistant coach on the university basketball team and earn $14 per hour. One day, you decide to skip the hour-long practice and go to the movie theater instead, which has an admission fee of $9. The total cost (valued in dollars) of skipping practice and going to the movies (including the opportunity cost of time) is
Answer: The total cost (valued in dollars) of skipping practice and going to the movies (including the opportunity cost of time) is $23
Explanation: Opportunity cost is the cost of any activity measured in terms of the value of the next best alternative forgone (that is not chosen).
Here , you choose to skip work which pays $14 per hour and instead decide to attend a hour-long movie at an admission fee of $9. Therefore the total cost of skipping practice and going to movies is $14+$9=$23.