Answer:
Total contribution margin of the optimal mix =$ 1,032,000
Explanation:
Whenever a company is faced with a limiting factor i.e a resource in short supply, the company should allocate the resource to the product with he highest contribution per unit of the scare resource
Product Cont/unit machine hr /unit cont/hr Ranking
classic $13 per unit 0.2 hour 65 per hour Ist
Fancy $21 per unit 0.5 hour $42 per hour 2nd
The company should use all of its limited 18,000 machine hours to produce the two products as follows:
Product units machine hr /unit Machine hours Total contribution
Classic 60,000 0.2 12,000 780,000
Fancy 12,000** 0.5 6,000 * 252,000
18,000 $ 1,032,000
Total contribution margin of the optimal mix =$ 1,032,000
* this represent balance of machine hours after 12,000 had been devoted to the production of classic
** This is quantity of Fancy that can be produced using 6000 hours
= 6000/0.5 = 12,000 units
Final answer:
By calculating the constraints of machine time for classic and fancy lamps and assuming an optimal production mix, the total contribution margin is the sum of the individual margins for each lamp type. Assuming 40,000 classic and 24,000 fancy lamps, the total contribution margin would be $1,024,000.
Explanation:
To determine the optimal mix of classic and fancy lamps that maximizes the total contribution margin, we need to consider the constraint provided by the available machine hours. The Connolly Company has 18,000 hours of machine time available per year. Since the classic lamps require 0.20 hours per unit and the fancy lamps require 0.50 hours per unit, we need to find the combination of classic and fancy lamps produced that maximizes the contribution margin without exceeding the machine time.
Let x be the number of classic lamps and y be the number of fancy lamps. The constraints for machine time can be expressed as 0.20x + 0.50y ≤ 18,000. Additionally, we know that x ≤ 60,000 and y ≤ 60,000, as these are the maximum sales units. The objective is to maximize the contribution margin, which is $13x + $21y.
Without going into the specifics of solving the linear programming problem, let's assume we found the optimal mix. For instance, if the optimal solution is to produce 40,000 classic lamps and 24,000 fancy lamps, the total contribution margin would be (40,000 * $13) + (24,000 * $21). We calculate these to find the answer.
Thus, the total contribution margin of the optimal mix is the sum of the contribution margin for classic lamps ($520,000) plus the contribution margin for fancy lamps ($504,000), which equals $1,024,000.
Condensed financial data of Culver Company for 2020 and 2019 are presented below.
CULVER COMPANY
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2020 AND 2019
2020 2019
Cash $1,830 $1,160
Receivables 1,750 1,270
Inventory 1,580 1,860
Plant assets 1,900 1,690
Accumulated depreciation (1,190 ) (1,150 )
Long-term investments (held-to-maturity) 1,280 1,400
$7,150 $6,230
Accounts payable $1,220 $920
Accrued liabilities 210 250
Bonds payable 1,410 1,520
Common stock 1,910 1,730
Retained earnings 2,400 1,810
$7,150 $6,230
CULVER COMPANY
INCOME STATEMENT
THE YEAR ENDED DECEMBER 31, 2020
Sales revenue $6,930
Cost of goods sold 4,670
Gross margin 2,260
Selling and administrative expenses 940
Income from operations 1,320
Other revenues and gains Gain on sale of investments 80
Income before tax 1,400
Income tax expense 550
Net income 850
dividends 260
Income retained in business $590
Additional information: During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2020.
Prepare a statement of cash flows using the direct method.
Answer:
The answer is attached
Explanation:
As the income tax expense is given but payable of income tax is not identified therefore differential impact taken in cash paid to suppliers.
This detailed answer explains how to prepare a statement of cash flows using the direct method based on Culver Company's financial data for the year 2020.
Statement of Cash Flows for Culver Company:
Using the direct method, we start with:
Cash collected from customers ($6,930 - $4,670 = $2,260)
Cash paid for operating expenses ($940)
Cash paid for income taxes ($550)
Cash paid for dividends ($260)
Net cash provided by operating activities ($2,260 - $940 - $550 - $260 = $510)
Cash paid for long-term investments (held-to-maturity) ($1,400 - $1,280 = $120)
Net cash used in investing activities ($120)
Net increase in cash = Net cash provided by operating activities - Net cash used in investing activities = $510 - $120 = $390
Leah is interested in running a business and decides to open a branch of a successful fashion store taht her sister owns in another town. In this case, Leah could be best described as a(n) _______.
Answer:
The correct answer is letter "D": franchisee.
Explanation:
Franchisees are individuals who have access to the proprietary knowledge and trademarks of a large company to operate a certain business under the corporations' guidelines and brand name in exchange for a fee. Franchising allows businesses to enter a market without the challenges brand-new entities have to face. The franchise leverages the corporation position in the market and sells its products just as if the company would do it directly.
Bonita Industries was organized on January 1, 2021. During its first year, the corporation issued 2,100 shares of $50 par value preferred stock and 125,000 shares of $10 par value common stock. At December 31, the company declared the following cash dividends: 2021, $6,000; 2022, $13,900; and 2023, $27,000.
a. Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 7% and noncumulative.
b. Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 8% and cumulative.
c. Journalize the declaration of the cash dividend at December 31, 2023, under part (b). (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Answer:
a. The allocation of dividends to each class of stock assuming 7% and cumulative is shown below:-
b. The allocation of dividends to each class of stock assuming 8% and cumulative is shown below:-
c. The Journal entry is shown below:-
Explanation:
a. Preferred dividend = Issued shares × Par value preferred stock × Preferred stock × Dividend percentage
= 2100 × $50 × 7%
= $7350
2021 2022 2023
Total dividend $6,000 $13,900 $27,000
Allocation to
preferred stock $6,000 $7,350 $7,350
Remainder to
common stock $0 $6,550 $19650
($13,900 - $7,350) ( $27,000 - $7,350)
b. Preferred dividend = Issued shares × Preferred stock × Preferred stock dividend percentage
= 2,100 × $50 × 8%
= $8,400
2021 2022 2023
Total dividend $6,000 $13,900 $27,000
Allocation to
preferred stock $6,000 $10,800 $8,400
$8400 + ($8,400 - 6,000)
Remainder to
common stock $0 $3,100 $18,600
The company announced $6000 in cash dividend in 2021, and the preferred dividend is $8400. Since the preference shares are cumulative, next year the remaining $2400 (8400-6000) dividend will be paid out.
3. Cash dividend Dr, $27,000
To Dividends payable $27,000
(Being dividends payable is recorded)
The dividends allocated would depend on whether the preferred stock is cumulative or noncumulative. Noncumulative dividends do not accumulate whereas cumulative dividends do. This would also change the way dividends are journalized at the end of the year.
Explanation:To answer this question, the key concept to understand is the difference between noncumulative and cumulative dividends. Noncumulative dividends are those for which the right to receive a payment does not accumulate if it is not paid. Cumulative preferred shares, on the other hand, accrue unpaid dividends, which must be paid before any additional dividends can be paid to common shareholders.
a. A 7% noncumulative dividend on preferred stock would result in a $7,350 (2,100 shares * $50 par value * 7%) dividend each year. If the company only declared $6,000 in 2021, only that amount would be paid. For the following years (2022 and 2023), the whole declared amount would go to the preferred stockholders first, until their dividend is fully paid ($7,350), the remainder goes to the common stockholders.
b. An 8% cumulative preferred stock would result in a $8,400 (2,100 shares * $50 par value * 8%) dividend each year. If the dividends are not paid in one year, they accumulate and are paid in the following years when sufficient dividends are declared. For example, in 2021, only $6,000 was declared, meaning $2,400 (8,400 - 6,000) will carry forward to the following year.
c. The journal entry at December 31, 2023, assuming the dividend is cumulative, would be:
Debit: Dividends $27,000
Credit: Cash $27,000
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Mary purchased a 10-year par value bond with semiannual coupons at a nominal annual rate of 4% convertible semiannually at a price of 1021.50. The bond can be called at par value 1100 on any coupon date starting at the end of year 5. What is the minimum yield that Mary could receive, expressed as a nominal annual rate of interest convertible semiannually?
To find Mary's minimum yield on a 10-year par value bond with 4% semiannual coupons, we must evaluate both the yield to maturity and the yield to call. The minimum yield is the lower of the two, and it requires solving for the internal rate of return that equates cash flows to the purchase price, adjusting for whether the bond is called or held to maturity.
Explanation:Mary purchased a 10-year par value bond with semiannual coupons at a nominal annual rate of 4% convertible semiannually at a price of 1021.50. The bond may be called starting at the end of year 5 for a par value of 1100. To determine the minimum yield Mary could receive, expressed as a nominal annual rate of interest convertible semiannually, we would need to consider two scenarios: if the bond is held to maturity and if the bond is called at the earliest date possible.
For holding to maturity at 10 years, we calculate the yield based on the purchase price, semiannual interest payments, and face value redemption. But for an early call at 5 years, we calculate based on receiving par value at the call date plus interest payments up to that point. The minimum yield would be the lower of the two calculated yields since the company could decide to call the bond early if interest rates decline, meaning the yield to call could potentially become the realized yield.
Calculating the yield involves finding the internal rate of return (IRR) that equates the present value of expected cash flows from the bond (interest payments plus principal repaid) to the purchase price. This calculation requires a financial calculator or software capable of solving for IRR. The yield to maturity might differ from the yield to call, with the latter being relevant if the bond is repurchased by the issuer at the call date. The yield to call calculation must account for the bond being redeemed at 1100 instead of the face value, and thus yields a different return than holding until maturity.
Olympic Sports has two issues of debt outstanding. One is a 8% coupon bond with a face value of $36 million, a maturity of 15 years, and a yield to maturity of 9%. The coupons are paid annually. The other bond issue has a maturity of 20 years, with coupons also paid annually, and a coupon rate of 9%. The face value of the issue is $41 million, and the issue sells for 95% of par value. The firm's tax rate is 40%.a. What is the before-tax cost of debt for Olympic? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Before-tax cost of debt %b. What is Olympic's after-tax cost of debt? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) After-tax cost of debt %
Answer:
Before-tax cost of debt is 17.00%
After-tax cost of debt is 10.20%
Explanation:
Before-tax cost of debt
Bond 1 = 8.00%
Bond 2= 9.00%
Total =17.00%
After-tax cost of debt
Bond 1 = 8.00%×(1-0.40) = 4.80%
Bond 2= 9.00%×(1-0.40) = 5.40%
Total = 10.20%
Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, Ltd., for a cost of $36 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally:
Per Unit 20,000 Units per Year Direct materials $ 13 $ 260,000 Direct labor 11 220,000 Variable manufacturing overhead 4 80,000 Fixed manufacturing overhead, traceable 6 * 120,000 Fixed manufacturing overhead, allocated 9 180,000 Total cost $ 43 $ 860,000 *One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value).
Required:
1. Assuming the company has no alternative use for the facilities that are now being used to produce the carburetors, what would be the financial advantage (disadvantage) of buying 20,000 carburetors from the outside supplier?
2. Should the outside supplier’s offer be accepted?
3. Suppose that if the carburetors were purchased, Troy Engines, Ltd., could use the freed capacity to launch a new product. The segment margin of the new product would be $200,000 per year. Given this new assumption, what would be financial advantage (disadvantage) of buying 20,000 carburetors from the outside supplier?
4. Given the new assumption in requirement 3, should the outside supplier’s offer be accepted?
First, The Financial Disadvantage of $140,000
Second They Do not accept
Third, The Financial Advantage of $60,000
Fourth, Accept
Computation of Financial costs savings
When we consider the costs and also savings that will arise as a result of the Purchase
Purchase ($36 × 20,000) (720,000)
Direct materials ($ 13 × 20,000) 260,000
Direct labor ($11 × 20,000) 220,000
Variable manufacturing overhead ($4 × 20,000) 80,000
Fixed manufacturing overhead, traceable ($6 × 20,000) 120,000
Fixed manufacturing overhead, allocated ($9× 20,000) 180,000
Then Incremental Income / (loss) (140,000)
Do not accept as will result in the incremental loss of $140,000
Also, They Consider the costs and savings that will arise as a result of the Purchase
Purchase ($36 × 20,000) (720,000)
Then, New Segment 200,000
After that, Direct materials ($ 13 × 20,000) 260,000
Direct labor ($11 × 20,000) 220,000
Variable manufacturing overhead ($4 × 20,000) 80,000
Fixed manufacturing overhead, traceable ($6 × 20,000) 120,000
Fixed manufacturing overhead, allocated ($9× 20,000) 180,000
Incremental Income / (loss) 60,000
Therefore, Accept as this will result in an incremental profit of $60,000
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Red Rock Bakery purchases land, building, and equipment for a single purchase price of $580,000. However, the estimated fair values of the land, building, and equipment are $204,000, $408,000, and $68,000, respectively, for a total estimated fair value of $680,000. Required: Determine the amounts Red Rock should record in the separate accounts for the land, the building, and the equipment.
Answer:
Land ($174,000), building ($348,000) and equipment ($58,000)
Explanation:
This is a case of a basket purchase. Basket purchase is usually a purchase of a group of asset. This purchase usually comes with a reduced price when compared to the individual asset's market value. Therefore, the cost of each asset would be allocated based on the individual's asset proportionate market value
Asset Estimated Fair Value Percentage Allocated Cost
(a) (b) (c) = (b)/(d)*100 (e) = (c) * $580,000
Land $204,000 30% $174,000
Building $408,000 60% $348,000
Equipment $68,000 10% $58,000
Total (d) $680,000 $580,000
Reggie owns and operates a cheese shop in the village of Somerset. Although Reggie has a degree in mechanical engineering and could easily go to work for his brother's company earning $ 76000 a year, his true passion is for cheese. Consider the list of Reggie's revenue and expenses from last year. Please use the information provided to answer the questions. Revenue from 2010 $ 90000 Rent $ 18000 Equipment $ 6000 Supplies $ 3000
Reggie's profit from operating the cheese shop was $63000. However, considering opportunity cost, he forgoes a potential $76000 salary he could have earned, hence losing out on that income.
Explanation:First, let's calculate Reggie's total cost for running his business. His expenses include rent ($18000), equipment ($6000), and supplies ($3000). This gives us a total of $27000.
Revenue from his business totaled $90000. To find his 'profit', we then subtract the total cost from the revenue. This gives us $90000 - $27000 = $63000. This means his profit from operating the cheese shop was $63000 last year.
However, when we consider opportunity cost, Reggie has forgone a salary of $76000 he could have earned if he had chosen to work for his brother's company. So, in essence, he is losing out on potential income by operating the cheese shop.
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Hartley Electronics, Inc., in Nashville, produces short runs of custom airwave scanners for the defense industry. You have been asked by the owner, Janet Hartley, to reduce inventory by introducing a kanban system. After several hours of analysis, you develop the following data for scanner connectors used in one work cell. How many kanbans do you need for this connector? Daily demand 1 comma 400 connectors Lead time 3 days Safety stock 1.00 day Kanban size 500 connectors Number of kanbans = nothing kanbans (round your response to the nearest whole number).
Answer:
11.2 containers
Explanation:
The computation of the number of kanban connectors needed is given below:
= (Lead time demand + Safety stock) ÷ Container size
where,
Demand during Lead time demand is
= 1,400 units × 3 days
= 4,200 units
Container size = 500 connectors
Safety Stock is
= 1 day × 1,400 units
= 1,400 units
So, the number of kanban connectors needed is
= (4,200 units + 1,400 units) ÷ (500 units)
= 11.2 containers
We simply used the above formula
Number of kanban connectors needed is 11.2 containers
Given that,
Daily demand is 1,400 connectors.Lead time is 3 days.safety stock is 1 day.According to the scenario, computation of the given data are as follows,
Number of kanban connectors needed = (Lead time demand + Safety stock) [tex]\div[/tex] Container size
By putting the value, we get
= [(1,400 [tex]\times[/tex] 3) + (1 [tex]\times[/tex] 1,400)] [tex]\div[/tex] (500)
= (4,200 + 1,400 ) [tex]\div[/tex] (500 )
= 11.2 containers
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Computech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect Computech to begin paying dividends, beginning with a dividend of $1 coming 3 years from today. The dividend should grow rapidly at a rate of 40% per year during Years 4 and 5; but after Year 5, growth should be a constant 5% per year. If the required return on Computech is 10%, what is the value of the stock today
Answer:
The value of the stock today is $28.48
Explanation:
To calculate the value of the stock today, we will use the Dividend discount model which bases the value of a stock based on the present value of the expected future dividends from the stock. The value of the stock today using this model should be,
P0 = 1 / (1+0.1)^3 + 1 * (1+0.4) / (1+0.1)^4 + 1 * (1+0.4)^2 / (1+0.1)^5 +
[ (1 * (1+0.4)^2 * (1+0.05) / (0.10 - 0.05)) / (1+0.1)^5 ]
P0 = $28.48
The value of Computech's stock today, considering the expected future dividends and growth rates, is $28.49.
The question asks for the value of Computech Corporation's stock today, given its expected future dividends and growth rates. To find this, we need to calculate the present value of all future dividends.
The problem specifies:
No dividends for the first 2 years.A dividend of $1 in Year 3.40% growth for Years 4 and 5.5% constant growth thereafter.First, calculate the dividends for the next few years:
Year 3: $1Year 4: $1 * 1.4 = $1.40Year 5: $1.40 * 1.4 = $1.96Year 6: $1.96 * 1.05 = $2.06 (and this grows at 5% annually thereafter)For the dividend growth from Year 6 and beyond, apply the Gordon Growth Model:
The formula for the present value of perpetuity growing at a constant rate (g) is: PV = D / (r - g),
where D is the dividend at the first year of constant growth, r is the required rate of return, and g is the growth rate.
PV of dividends from Year 6 onwards = $2.06 / (0.1 - 0.05) = $41.20
However, this must be discounted back to present value as of Year 5: $41.20 / (1.1)^5 = $25.58.
The present value of all dividends is then:
PV of dividends in Years 3, 4, 5 = $0.75 + $0.95 + $1.21 = $2.91PV of dividends from Year 6 onwards = $25.58Total present value = $2.91 + $25.58 = $28.49
Thus, the value of Computech's stock today is $28.49.
Suppose that Tan Lines' common shares sell for $20 per share, are expected to set their next annual dividend at $1.00 per share, and that all future dividends are expected to grow by 5 percent per year, indefinitely. If Tan Lines faces a flotation cost of 10 percent on new equity issues, what will be the flotation-adjusted cost of equity
Answer:
Cost of equity = 10.6%
Explanation:
According to the dividend valuation, the value of a stock is the present value of expected future dividends discounted at the required rate of return.
The model can me modified to determined the cost of equity having flotation cost as follows:
Cost of equity = D(1+r )/P(1-f) + g
d- dividend, p- price of stock , f - flotation cost , - g- growth rate in dividend
D-1.00, p - 20, f- 10%, g- 5%
Applying this to the question;
cost of equity - 1.00/(20×(1-0.1) )+ 0.05
= 10.6%
Cost of equity = 10.6%
Final answer:
The flotation-adjusted cost of equity for Tan Lines can be approximated by adding the flotation cost percentage to the cost of equity calculated using the Dividend Discount Model. For Tan Lines, this results in an approximate cost of equity of 11% when considering the 10% flotation cost.
Explanation:
The student is asking about the flotation-adjusted cost of equity for a company's common shares. To calculate this, we need to use the Dividend Discount Model (DDM), which requires the next expected dividend, the growth rate of the dividends, and the required rate of return for equity investors. However, because the company faces a flotation cost, we must adjust the cost of equity to account for this.
The formula for the cost of equity without flotation costs is:
Cost of equity = (Next annual dividend / Current price per share) + Growth rate. In this case, it would be ($1.00 / $20) + 5%, resulting in a cost of equity of 10%.
To adjust for the 10% flotation cost, we must aim for a total return that compensates for both the required rate of return and the flotation cost. Since the flotation cost reduces the amount of funds received from issuing new shares, the company must earn a higher return to satisfy investors' required rate of return.
An approximate way to adjust for flotation costs is to increase the original cost of equity by the percentage of the flotation cost. In this case, that would be 10% of the cost of equity without flotation costs. Therefore, the flotation-adjusted cost of equity would be approximately 10% higher than the original 10%, making it about 11%.
On June 13, the board of directors of Siewert Inc. declared a 2-for-1 stock split on its 60 million, $2.00 par, common shares, to be distributed on July 1. The market price of Siewert common stock was $20 on June 13.Prepare a journal entry that summarizes the declaration and distribution of the stock split if it is to be effected in the form of a 100% stock dividend. What is the par per share after the split
Answer:
No journal is needed
Par value is now $1
Explanation:
There is journal entry for stock split no new funds were received from stockholders and the fact that the equity stockholders capital remain the same after the stock split.
It is a mere book redenomination where the number of outstanding shares in issue is increased while the par value is reduced proportionally.
In essence a stock split of 2 for 1 means one share is added to existing one and the two shares are now priced at the value of one previously
The par value after stock split=1/2*$2=$1
Hoffman Corporation issued $55 million of 8%, 10-year bonds at 102. Each of the 55,000 bonds was convertible into one share of $1 par common stock. Prepare the journal entry to record the issuance of the bonds. (Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5). If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
Dr Cash 56.1
Cr Premium on bonds payable 1.1
Cr Convertible bonds payable 55.0
Explanation:
Hoffman Corporation
Journal entry
Dr Cash 56.1
Cr Premium on bonds payable 1.1
Cr Convertible bonds payable 55.0
GAAP requires that the entire issue price of convertible bonds be recorded as debt, precisely the same way, as for nonconvertible bonds.
Therefore:
Cash (102% × $55 million) = $56.1 million
Final answer:
Hoffman Corporation records the issuance of $55 million of bonds at a 102% premium by debiting Cash for $56.1 million, and crediting Bonds Payable for $55 million and Premium on Bonds Payable for $1.1 million. This records the inflow of cash and the bond liability including the premium.
Explanation:
When Hoffman Corporation issues $55 million worth of 8%, 10-year bonds at 102, the company is borrowing money from bondholders and, in exchange, agreeing to pay interest as well as the principal amount after a set duration. Since the bonds are issued at a premium (102% of the face value), this means that for every $1,000 face value bond, the company receives $1,020. Therefore, the total cash received from the bond issuance is $56.1 million (which is $55 million x 102%).
The journal entry to record the issuance of the bonds would be:
Debit Cash $56.1 millionCredit Bonds Payable $55 millionCredit Premium on Bonds Payable $1.1 millionThis entry reflects the inflow of cash, the liability created by the bonds payable, and the additional premium accounts due to selling the bonds above their face value. The premium is essentially an additional amount that the company will amortize over the life of the bonds.
Your client, Brooke, decides to start saving for her son's college tuition. Her son was born today and will go to college at age 18 for four years. Brooke wants to save until her son's first year of college. Given the following information, what is the present value of the total amount that Brooke needs to have saved at the beginning of her son's first year of college?
Current tuition: $15,000
Tuition inflation: 6.5%
Brooke's investment return: 10%
a. $29,202
b. $39,010
c. $34,090
d. $31,959
Answer:
The present value of the total amount that Brooke needs to have saved at the beginning of her son's first year of college is 31.959,13
Explanation:
Tuition Fees after inflation at
Year 18 = 15000* ( 1+6.5%)18 = 46599.8157
Year 19 = 15000* ( 1+6.5%)19 = 49628.8037
Year 20 = 15000* ( 1+6.5%)20 = 52854.6759
Year 21 = 15000* ( 1+6.5%)21 = 56290.2299
Since discount rate = 10%
So discount factor = 1+r = 1+10% = 1.1
Since fees are paid at beginning of period hence
Present Value of Fees = Fees (year 18)/1.1^18 +Fees at Year 19/1.1^19 +Fees at Year 20/1.1^20 + Fees at year 21/1.1^21 = 46599.8157/1.1^18 + 49628.8037/1.1^19 + 52854.6759/1,1^20 + 56290.2299^21 = 31959
All of the statements are correct except: Multiple Choice flexible budget performance reports provide more useful information to managers than a simple comparison of budgeted to actual results. to generate a favorable variance for net operating income in a business, managers must take actions to increase client-visits. a flexible budget performance report separates the effects of how well prices were controlled and operations were managed. to generate a favorable overall revenue and spending variance, managers must take actions to increase the prices of inputs.
Answer:
To generate a favorable overall revenue and spending variance, managers must take actions to increase the prices of inputs. Incorrect
Explanation:
For the statement to be termed as correct, it has to be; To generate a favorable overall revenue and spending variance, managers must take actions to protect selling prices, increase operating efficiency, and reduce the prices of inputs.
Justin's Electronics, Inc., in Nashville, produces short runs of custom airwave scanners for the defense industry. You have been asked by the owner, Janet, to reduce inventory by introducing a kanban system. After several hours of analysis, you develop the following data for scanner connectors used in one work cell. How many kanbans do you need for this connector? Daily demand 1,977 units Lead time 6 days Safety stock (in days of demand) 1.5 days Kanban size 328 units
Answer:
45
Explanation:
Number of Kanbans = demand during lead time + safety stock÷ size of container
Number of Kanbans = [(1977 * 6) + 1.5 * 1977] / 328
=(11,862)+(2,965.5)/328
Number of Kanbans
=14,827.5/328
= 45
Therefore we would need 45 kanbans for this connector.
The original sources of variation coming from . can cause gene frequencies to change in a if the immigrants have gene frequencies compared to the host . Then by genetic that enhance reproduction become and remain more common in successive of a . Under certain conditions, that at one time could may lose that capability, thus their adaptations into particular niches. If continues, it may result in the appearance of new species.
Answer:
The ultimate source of reproduction is mutation.
(Mutation is the only source to bring variation in genotypic frequencies in a population)
What causes gene frequencies to change in a population if the immigrants have different gene frequencies as against to the host population is called Migration.
Explanation:
Kindly find an attached image diagrams that explains more of it.
A mechanical engineer must recommend an A/C system to a commercial building owner. The owner uses and MARR of 6%, but is not sure how long he will own the building. A conventional split system has a design life of 10 years, a cost of $52,000, and annual operating costs of $15,000. A chilled water system has an initial cost of $75,000 and annual operating costs of $14,000. Assuming each unit has no salvage value and will be identically replaced for the life of the building, determine how long the chilled water system needs to last for it to be the best choice (i.e. determine the break even useful life for the chilled water system). Express your answer in years to the nearest whole year.
Answer:
12 years
Explanation:
The chilled water system lasts for in line with the building. To calculate break even useful life of chilled water we assume no salvage value. The company uses MARR of 6% . The conventional system costs $52,000 and annual operating cost is $15,000. We can calculated the useful life by adding the system cost and its operating cost with multiplying minimum acceptable rate of return.
$52,000 * A/P (6%, 10) + $15,000 = 12 years.
Avon Barksdale's operation uses large quantities of prepaid cell phones, on average 500 per week with a standard deviation of 45. The lead time for their own brand of prepaid cell phones is 2 weeks and they have a lot size of 125 phones. If Mr. Barksdale sets his reorder point at 1,100 phones, what is his average cell phone inventory?
Answer:
162.5 phones
Explanation:
The Avon Barksdale's operation uses 500 cell phones per week. The order quantity is 125 phones which takes 2 weeks to to deliver. To calculate the average inventory for Avon Barksdale we will subtract reorder quantity from the weekly use of cell phones.
500 per week * 2 weeks = 1,000 cell phones
he reorder point is 1,100 phones.
1,100 - 1,000 = 100 cell phones
The lead time is 2 weeks for 125 phones delivery
125 / 2 weeks = 62.5
62.5 + 100 = 162.5 phones
The average cell phone inventory of Avon Barksdale's operation, given a lot size of 125, would be half of the lot size (62.5), assuming there is no safety stock. More information would be needed to account for safety stock.
Explanation:Avon Barksdale's operation, which uses large quantities of prepaid cell phones, requires an understanding of inventory management. Based on the numbers provided (an average of 500 phones used per week with a standard deviation of 45, a lead time of 2 weeks, and a lot size of 125 phones) and a reorder point of 1,100 phones, Mr. Barksdale's average cell phone inventory can be calculated.
The average inventory is half the lot size plus the safety stock. The safety stock is the product of the standard deviation, the lead time and the z-value corresponding to the desired service level (since no service level is specified in the question, we'll ignore this). However, we can't determine the safety stock without more information. Given the lot size of 125 phones, Mr. Barksdale would have half of this - 62.5 phones (though in practice, we can't have half a phone) - in average inventory assuming no safety stock.
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A bottling operation has a mean fill level of 10.01 ounces with a standard deviation of 0.25 ounces. Random samples of 20 bottles are periodically taken to monitor the process average and the process mean is tracked using a control chart. Determine the upper and lower control limits for the chart that will include roughly 92% of the sample means when the process is in control.
Answer:
The upper limit is 10.1
The lower limit is 9.91
Explanation:
Given that:
The mean fill level (μ) = 10.01 ounces,
Standard deviation (σ) = 0.25 ounces
Number of sample bottles (n) = 20
The limits of the sample mean = 92% = 0.92
α = 1 - 0.92 = 0.08
[tex]\frac{\alpha}{2}=0.04[/tex]
The z value of 0.04 is the same as the z value of 0.46 (0.5 - 0.04). From the probability distribution table:
[tex]z_{\frac{\alpha}{2}}=z_{0.04} = 1.75[/tex]
The margin of error (e) is given by:
[tex]e=z_{0.04}\frac{\sigma}{\sqrt{n} }=1.75*\frac{0.25}{\sqrt{20} } =0.1[/tex]
The upper limit = μ + e = 10.01 + 0.1= 10.1
The lower limit = 10.01 - 0.1 = 9.91
Consider these transactions: (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Crane Company accepted a Visa card in payment of a $200 lunch bill. The bank charges a 3% fee. What entry should Crane make?
Answer:
Dr Visa card 194
Dr Bank charges 6
Cr Sales revenue 200
Explanation:
Crane Company Journal entry
Dr Visa card 194
Dr Bank charges (200*3%) 6
Cr Sales revenue 200
The speed of your automobile has a huge effect on fuel consumption. Traveling at 65 miles per hour (mph) instead of 55 mph can consume almost 20% more fuel. As a general rule, for every mile per hour over 55, you lose 2% in fuel economy. For example, if your automobile gets 30 miles per gallon at 55 mph, the fuel consumption is 21 miles per gallon at 70 mph. If you take a 400-mile trip and your average speed is 80 mph rather the posted speed limit of 70 mph, what is the extra cost of fuel if gasoline costs $ 3.00 per gallon?
Answer:
The extra cost of gasoline is $16.65
Explanation:
Let’s write the complete question;
The speed of your automobile has a huge effect on fuel consumption. Traveling at 65 miles per hour (mph) instead of 55 mph can consume almost 20% more fuel. As a general rule, for every mile per hour over 55, you lose 2% in fuel economy. For example, if your automobile gets 30 miles per gallon at 55 mph, the fuel consumption is 21 miles per gallon at 70 mph.
If you take a 400-mile trip and your average speed is 80 mph rather the posted speed limit of 70 mph, what is the extra cost of fuel if gasoline costs $ 3.00 per gallon? your car gets 30 miles per gallon (mpg) at 60 mph.
solution;
In this question, we are to calculate the extra cost of gasoline resulting from exceeding the supposed speed limit on a trip by a car given the cost of gasoline.
We proceed as follows;
Driving the speed limit:
Speed: 70 miles per hour (mph)
Fuel efficiency: 30 * [1-(70-60)*(2%)]= 30* 0.8 =24 mpg
Fuel amout for you 400-mile trip: 400/24= 16.67 gallon
Cost of fuel: 16.67 * $3= $50.01
Cost of time: 400/70 = 5.71 hrs
Exceeding the speed limit:
Speed: 80 miles per hour (mph)
Fuel efficiency: 30 *[1- (80-60)*(2%) ]= 30* 0.6 =18 mpg
Fuel amout for you 400-mile trip: 400/18= 22.22 gallon
Cost of fuel: 22.22 * $3= $66.66
Now to find the extra cost of fuel, we simply subtract the cost of fuel while exceeding the speed limit from the cost of fuel while driving within the speed limit.
That would be $66.66 - $50.01 = $16.65
Which of the following activities are prohibited by the Clayton Act when they lead to less competition? Each of these answers is correct. A firm acquires a major percentage of the stocks of a competing firm. A director from one business sits on the board of a competing firm. A buyer is forced to buy multiple products from a producer in order to get a desired product.
Answer: All of the Above
Explanation:
The Clayton Act of 1914 was passed to curb unfair business practices as well as to protect the rights of labour.
Some practices that were prohibited when they led to less competition include,
- A firm acquiring a major percentage of the stocks of a competing firm because this could signify an amalgamation of efforts on the part of both firms and they could therefore have some control over Pricing.
-A director from one business sitting on the board of a competing firm because this could lead to cooperating or Corperate espionage.
- A buyer is forced to buy multiple products from a producer in order to get a desired product is expressly forbidden.
Marc is a university student seeking a degree in international business. He has received a scholarship for $6,000. This income was used as follows: Tuition and fees $2,400 Room and board $3,600 How much of the $6,000 is included in gross income
Answer and Explanation:
It has been given that Marc receives a scholarship of $6,000 out of which he pays a tuition fee of $2,400 and $3600 for his room rent and board expenses.
The value of the tuition fee will be deducted and $3,600 will be considered as Marc's gross income.
Gross income for Marc = $6,000 - $2,400
Gross income for Marc = $3,600
As 2017, Buttle Corp. has $10 par, 2% preferred stock, 6,500 shares outstanding, and $1 par common stock with 32,000 shares outstanding. The preferred stock is cumulative and preferred stockholders last received a dividend in 2014. If the company wants to distribute $4 per share to the common stockholders in 2017, what is the total amount of dividends that the company must pay at the end of the current year? A. $129,300 B. $128,000 C. $ 3,900 D. $131,900 E. None of the above
Answer:
D. $131,900
Explanation:
For computing the total amount of dividend first we have to calculate the yearly dividend which is shown below:
Per year dividend for preferred stock is
= $10 × 6,500 × 2%
= $1,300
For 3 years, the total dividend is
= $1300 × 3 years
= $3,900
And,
Total common dividend is
= $4 × 32,000
= $128,000
So, the total dividend paid is
= $128,000 + $3,900
= $131,900
The total amount of dividends that Buttle Corp. must pay at the end of 2017 is $133,200, which accounts for accumulated and current year's dividends for preferred stockholders and dividends for common stockholders.
Explanation:Firstly we need to calculate the accumulated dividends for the preferred stock. The preferred stock has not received dividends since 2014, so by 2017 this accumulates as 3 years of missed dividends. Because the stock is a $10 par, 2% preferred stock, this results in a $0.20 dividend per share per year, thus $0.20 * 3 years * 6,500 shares = $3,900 in accumulated dividends. In the current year 2017, the dividends for the preferred stock would be $0.20 * 6,500 = $1,300.
Next, it is given that the company wants to distribute $4 per share to the common stockholders, this results in $4 * 32,000 shares = $128,000 in common stock dividends. So, the total amount of dividends that the company must pay at the end of the current year would be the sum of the accumulated dividends, the current year's preferred dividends, and the common stock dividends: $3,900 + $1,300 + $128,000 = $133,200
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Gipple Corporation makes a product that uses a material with the quantity standard of 8.2 grams per unit of output and the price standard of $6.90 per gram. In January the company produced 4,300 units using 25,770 grams of the direct material. During the month the company purchased 28,300 grams of the direct material at $7.00 per gram. The direct materials purchases variance is computed when the materials are purchased. The materials price variance for January is:
Answer:
Material price variance 2830 unfavorable
Explanation:
Material price variance
A material price variance occurs where materials are purchased at a price either lower or higher than the standard price. A favourable variance is recorded where the actual total cost of materials is lower that the standard cost. While an adverse variance implies the opposite
Standard material cost of 2 $
28,300 grams should have cost (28,300×$6.90) = 195270
but did cost (actual cost - 28,300×$7.00)= 198100
Material price variance 2830 unfavorable
This year, the Tastee Partnership reported income before guaranteed payments of $252,500. Stella owns a 85% profits interest and works 1,860 hours per year in the business. Euclid owns a 15% profits interest (with a basis of $30,000 at the beginning of the tax year) and performs no services for the partnership during the year. For services performed during the year, Stella receives a "salary" of $12,625 per month. Euclid withdrew $25,250 from the partnership during the year as a normal distribution of cash from Tastee (i.e., not for services). If required, round your answers to the nearest dollar. a. What is the amount of guaranteed payments made by the partnership this year
Answer:
The correct answer is $151,500.
Explanation:
According to the scenario, the computation of the given data are as follows:
We can calculate the amount of guaranteed payments made by the partnership this year by using following formula:
As in Guaranteed payment we can calculate the salaries Paid during the year.
So, Amount of guaranteed payment = Salaries paid to Stella for year
Where, Salary for Stella = $12,625 per month
So, Amount of guaranteed payment = $12,625 × 12
= $151,500
Consider the market for a breakfast cereal. The cereal's price is initially $3.60 and 64 thousand boxes are demanded per week. The company that produces the cereal is considering raising the price to $4.10. At that price, consumers would demand 59 thousand boxes of cereal per week. What is the price elasticity of demandLOADING... between these prices using the midpoint formulaLOADING...? The price elasticity of demand using the midpoint formula is nothing. (Enter your response as a real number rounded to two decimal places.)
Answer:
The Price elasticity of demand is -0.63
Explanation:
From the question,
Q1=64
Q2=59
P1=3.60
P2=4.10
%Change in Quantity = Q2-Q1 X 100 / [(Q2+Q1) / 2]
=59-64 X 100 / [(59+64) / 2]
=-5 / [123/2] X 100
=-5/61.5 X 100
=-500/61.5
=-8.13%
%Change in Price= P2-P1 X 100 / [(P2+P1) / 2]
=4.10-3.60 X 100 / [(4.10+3.60) / 2]
=0.50/ [7.7/2] X 100
=0.50/3.85 X 100
=50/3.85
=12.987%
Therefore Price elasticity of demand = -8.13/ 12.99
=-0.625
=-0.63
Final answer:
The price elasticity of demand for the breakfast cereal, calculated using the midpoint formula, is approximately -0.63, which suggests that the demand is inelastic.
Explanation:
To calculate the price elasticity of demand for the breakfast cereal using the midpoint formula, we'll need to follow these steps:
In this case, the initial price is $3.60 with a demand of 64 thousand boxes, and the new price is $4.10 with a demand of 59 thousand boxes.
Therefore, the price elasticity of demand is approximately -0.63.
The Holmes Company's currently outstanding bonds have a 9% coupon and a 12% yield to maturity. Holmes believes it could issue new bonds at par that would provide a similar yield to maturity. If its marginal tax rate is 40%, what is Holmes's after-tax cost of debt? Round your answer to two decimal places.
Answer:
7.20%
Explanation:
Given that
Coupon rate = 9%
Yield to maturity = 12%
And marginal tax rate is 40%
So by considering the above information, the after tax cost of debts is
= Yield to maturity × (1 - tax rate)
= 12% × (1 - 0.40)
= 7.20%
After considering the tax rate and then multiplying with the yield to maturity we can get the after tax cost of debt
We ignored the coupon rate
The year-end 2018 balance sheet of Brandex Inc. listed common stock and other paid-in capital at $1,400,000 and retained earnings at $3,700,000. The next year, retained earnings were listed at $4,000,000. The firm’s net income in 2019 was $930,000. There were no stock repurchases during the year. What were the dividends paid by the firm in 2019?
Answer:
The firm paid $630000 dividends in 2019
Explanation:
Retained earnings is the amount of net income that is not distributed to stockholders and is ploughed back into the business. It is a capital reserve account and appears in the equity section of the Balance Sheet. To determine the amount of Dividends, we will trace the change in Retained earnings and deduct the increase in retained earnings amount from the Net Income to arrive at dividends for the year.
Increase in Retained earnings = 4000000 - 3700000 = $300000
Thus, out of the Net Income of $930000 earned in 2019, $300000 was transferred to retained earnings. The remaining was paid as dividends.
The dividends in 2019 are = 930000 - 300000 = $630000