Answer:
The labor efficiency variance for this last pay period was $1,200 Favorable.
Explanation:
In order to calculate Dreary's labor efficiency variance for this last pay period, we have to calculate first the standard hours allowed for actual work using the following formula:
Standard hours
allowed for actual work= ( Total number of applications ) × number of
Standard number of applications hours worked
= (2.500 applications)× 8 hours
10 applications
=2,000 hours
After having calculated the Standard hours allowed for actual work, we can calculate the labor efficiency variance using the following formula:
labor efficiency variance= (Actual hours worked-Standard hours allowed for actual work)× standard rate
= (1,920-2,000)×$15
=-$1,200
The Labor efficiency variance is $1,200 Favorable.
Consider two countries’ situations: Country A can produce either six automobiles or twelve movies with the same amount of resources. Country B, using the same resources, can produce either five automobiles or eight movies.
a- Which theory of international trade would maximize the total production?
b- Determine which country would produce automobiles and which country would produce movies.
c- Draw the production possibilities frontier for this case.
Answer:
Please refer explanation and attached diagram
Explanation:
A. Theory of international trade: Comparative advantage
This is referred to as an individual, company, region or country's ability to produce goods and services at a lower opportunity cost than that of its trade partners. The country with the least opportunity cost has comparative advantage in that product. This is different to absolute advantage which only takes into account the ability of a country to produce a greater number of output using the same resources.
B. In order to identify which country will produce what product, the opportunity cost for each product must be found. In other words, the benefit lost from the second best alternative.
In Country A, to produce 6 automobiles, 12 movies must be sacrificed. Hence, to produce 1 automobile, 2 movies are sacrificed (12/6). On the other hand, to produce 1 movie, 0.5 of an automobile is sacrificed (6/12).
When looking at Country B, it can produce either 5 automobiles or 8 movies. Hence, when producing a single automobile, the opportunity cost it incurs is being unable to produce 1.6 movies (8/5). Similarly, to produce 1 movie, it sacrifices 0.6 of automobiles (5/8).
Hence comparatively, Country A having the lower opportunity cost in movie production, will produce movies, whilst Country B having the lower opportunity cost in producing automobiles will produce automobiles.
C. The production possibility frontier has been attached.
In order to draw the lines, at least two points are required, but the question only provides one point for each Country. However, using the opportunity cost, the other points can be derived. For example, in country A, if 2 movies are sacrificed to produce 1 automobile, then when automobile production increases from 6 to 7, movie production falls from 12 to 10.
In country B, if 0.6 automobiles are sacrificed to produce 1 movie, then when movie production rises from 8 to 9, automobile production falls from 5 to 4.4. This method can be used to find other points and draw the PPF as has been done :)
Final answer:
Comparative Advantage theory would maximize total production by having each country specialize in the goods they produce efficiently.
Explanation:
Comparative Advantage theory would maximize total production. According to this concept, each country should specialize in producing the good where it has the lowest opportunity cost, leading to increased overall production.
Country A should specialize in producing movies, while Country B should focus on producing automobiles based on their comparative advantage.To draw the production possibilities frontier (PPF), Country A's PPF would show a steeper slope for automobiles, and Country B's PPF would have a steeper slope for movies.Glinda opens a magic shop and, on Jan. 14, 2011 contracted with Fiyero to supply her with potions that can change someone's skin color. The contract stated that Fiyero, the sole supplier of the potions will sell them to Glinda exclusively so that she can advertise that only her shop sells the potions. Three years into the contract, Jan. 17, 2014, Glinda discovered that an online retailer is selling identical Fiyero potions for a lower price. Determine the likely outcome when Glinda sues Fiyero for breach of contract. In their jurisdiction, the applicable statute of limitations for breach of contract is two years. Glinda filed suit on Feb. 22, 2014.
Final answer:
The likely outcome of Glinda's lawsuit against Fiyero for breach of contract will depend on the specifics of the breach, the terms of their agreement, and the statute of limitations. The outcome will be influenced by whether the breach occurred within the two-year statutory period before filing the suit and whether the jurisdiction applies a discovery rule.
Explanation:
When Glinda sues Fiyero for breach of contract, the likely outcome is influenced by the specifics of the breach and the terms of the contract, as well as the statute of limitations governing such cases. Glinda's contract with Fiyero had an exclusivity clause, meaning Fiyero was obliged not to sell the potions to anyone else. Discovering that an online retailer was selling the same potions could indeed constitute a breach of contract, if Fiyero supplied them in violation of their agreement. However, one crucial aspect here is the statute of limitations, which in this case is two years for breach of contract claims.
Since Glinda discovered the breach on Jan. 17, 2014, and filed suit on Feb. 22, 2014, the lawsuit is within the statutory period if we consider the date of discovery as the starting point. But if the actual breach (when the potions were first sold to the retailer) occurred more than two years before she filed suit, the statute of limitations could bar her claim, assuming the jurisdiction follows a discovery rule that allows the period to begin when the breach was discovered. Courts will consider the timing of the discovery and the filing in relation to the statute of limitations.
Riche Township recorded more estimated revenues than appropriations for the coming fiscal year. In integrating its adopted budget with its financial accounting records, the town would: Group of answer choices Debit budgetary control. Debit encumbrance control. Credit budgetary control. Credit encumbrance control.
Answer:
Credit budgetary control
Explanation:
Budgetary control here has to do with a process where managers are able to set financial and performance targets with budgets, compare the generated results, and adjust performance as it is required.
Chauncey Corporation began business on June 30, 2016. At that time, it issued 20,000 shares of $50 par value, six percent, cumulative preferred stock and 90,000 shares of $10 par value common stock. Through the end of 2018, there had been no change in the number of preferred and common shares outstanding. Required a. Assume that Chauncey declared dividends of $69,000 in 2016, $0 in 2017, and $354,000 in 2018. Calculate the total dividends and the dividends per share paid to each class of stock in 2016, 2017, and 2018. Round to two decimal places. Year Preferred Stock Common Stock Preferred per share Common per share 2016 Answer Answer Answer Answer 2017 Answer Answer Answer Answer 2018 Answer Answer Answer Answer b. Assume that Chauncey declared dividends of $0 in 2016, $120,000 in 2017, and $186,000 in 2018. Calculate the total dividends and the dividends per share paid to each class of stock in 2016, 2017, and 2018. Round to two decimal places.
Answer:
See the explanation below
Explanation:
a. Assume that Chauncey declared dividends of $69,000 in 2016, $0 in 2017, and $354,000 in 2018. Calculate the total dividends and the dividends per share paid to each class of stock in 2016, 2017, and 2018. Round to two decimal places.
a1. Dividend payment of $69,000 in 2016
Total cumulative preferred dividend = 20,000 * $50 * 6% = $60,000
Cumulative preferred dividend per share = $50 * 6% = $3.00 per share
Total common stock dividend = $69,000 - $60,000 = $9,000
Common stock dividend per share = $9,000/90,000 = $0.10 per share
a2. Dividend payment of $0 in 2017
Since $0 dividend is declared, it means no dividend is paid to each class of stock in 2017.
However, cumulative preferred dividend to be carried forward to when next the dividend is paid are as follows:
Total cumulative preferred dividend = 20,000 * $50 * 6% = $60,000
Cumulative preferred dividend per share = $50 * 6% = $3.00 per share
a3. Dividend payment of $354,000 in 2018
Note that the last year cumulative preferred stock dividend will be paid together with their this year's dividend before the common stock dividends are paid as follows:
Total cumulative preferred dividend for two years (2017 and 2018) = (20,000 * $50 * 6%) × 2 = $120,000
Cumulative preferred dividend per share for 2018 alone = $50 * 6% = $3.00 per share
Cumulative preferred dividend per share for 2017 and 2018 = ($50 * 6%) × 2 = $6.00 per share
Total common stock dividend = $354,000 - $120,000 = $234,000
Common stock dividend per share = $234,000/90,000 = $2.60 per share
b. Assume that Chauncey declared dividends of $0 in 2016, $120,000 in 2017, and $186,000 in 2018. Calculate the total dividends and the dividends per share paid to each class of stock in 2016, 2017, and 2018. Round to two decimal places.
b1. Dividend payment of $0 in 2016
Since $0 dividend is declared, it means no dividend is paid to each class of stock in 2016.
However, cumulative preferred dividend to be carried forward to when next the dividend is paid are as follows:
Total cumulative preferred dividend = 20,000 * $50 * 6% = $60,000
Cumulative preferred dividend per share = $50 * 6% = $3.00 per share
b2. Dividend payment of $120 in 2017
Note that the last year cumulative preferred stock dividend will be paid together with their this year's dividend before the common stock dividends are paid as follows:
Total cumulative preferred dividend for two years (2017 and 2018) = (20,000 * $50 * 6%) × 2 = $120,000
Cumulative preferred dividend per share for 2018 alone = $50 * 6% = $3.00 per share
Cumulative preferred dividend per share for 2017 and 2018 = ($50 * 6%) × 2 = $6.00 per share
Since proffered stock has exhausted the dividend paid, no or $0 dividend will be paid to the common stock holder.
b3. Dividend payment of $186,000 in 2018
Total cumulative preferred dividend = 20,000 * $50 * 6% = $60,000
Cumulative preferred dividend per share = $50 * 6% = $3.00 per share
Total common stock dividend = $186,000 - $60,000 = $96,000
Common stock dividend per share = $96,000/90,000 = $1.07 per share.
Park Corporation is planning to issue bonds with a face value of $750,000 and a coupon rate of 7.5 percent. The bonds mature in 4 years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1 of this year. Park uses the effective-interest amortization method and also uses a discount account. Assume an annual market rate of interest of 8.5 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answer to whole dollars.) Required:
1. Prepare the journal entry to record the issuance of the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the issuance of bonds. Note: Enter debits before credits. Date General 3 Debit Credit January 01 Record entry Clear entry View general journal
Answer:
Debit cash with $750,000; and credit Bond payable also with $750,000.
Explanation:
The journal entry will appear as follows:
Date Details Dr ($) Cr ($)
Jan. 1 Cash 750,000
Bond Payable 750,000
To record the issuance of bond.
The company is currently selling 8,000 units per month. Fixed expenses are $719,000 per month. The marketing manager believes that a $20,000 increase in the monthly advertising budget would result in a 180 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change
Answer:
The following data is missing in the question which is being reproduced;
Selling price $140
Variable Cost $28
Contribution Margin $112
Explanation:
Increase in sale 180*140 $25,200
Variable Cost 180*28 ($5,040)
Net contribution margin $20,160
Advertising expense-incremental ($20,000)
Net Increase in operating income $160
The net operating income will increase with just $160 because of this change.
Cullumber Company expects to have a cash balance of $138,000 on January 1, 2022. These are the relevant monthly budget data for the first two months of 2022. 1. Collections from customers: January $213,000, February $438,000. 2. Payments to suppliers: January $120,000, February $225,000. 3. Wages: January $90,000, February $120,000. Wages are paid in the month they are incurred. 4. Administrative expenses: January $63,000, February $72,000. These costs include depreciation of $3,000 per month. All other costs are paid as incurred. 5. Selling expenses: January $45,000, February $60,000. These costs are exclusive of depreciation. They are paid as incurred. 6. Sales of short-term investments in January are expected to realize $36,000 in cash. Cullumber Company has a line of credit at a local bank that enables it to borrow up to $75,000. The company wants to maintain a minimum monthly cash balance of $60,000.
Answer and Explanation:
The preparation of cash budget is shown below:-
Cash Budget
January February
Beginning cash balance $1,38,000 $72,000
Add: Receipts:-
Collections from customers$2,13,000 $4,38,000
Sale of marketable securities$36,000 $-
Total receipts $2,49,000 $4,38,000
Total available cash $3,87,000 $5,10,000
Less: Disbursements
Direct materials $1,20,000 $2,25,000
Direct labor $90,000 $1,20,000
Selling and administrative
expenses $1,05,000 $1,29,000
Total disbursements $3,15,000 $4,74,000
Excess
(deficiency of available cash
over cash disbursements) $72,000 $36,000
Financing:
Add: Borrowings $ - $24,000
Ending cash balance $72,000 $60,000
Final answer:
The question is focused on preparing a cash budget for Cullumber Company for January and February 2022. Key figures to consider include initial cash balance, collections, payments, wages, and expenses. Depreciation is excluded from the cash calculations as it's a non-cash expense.
Explanation:
Cullumber Company Cash Budget Analysis
The Cullumber Company is creating a cash budget for the first two months of 2022 and is analyzing various budget components to maintain a minimum monthly cash balance of $60,000. The components under consideration include collections from customers, payments to suppliers, wages, administrative expenses (including depreciation), selling expenses, and the sale of short-term investments. Calculations must account for the cash balance at the beginning of the period, expected inflows, and outflows to establish the end-of-month cash positions and the need for additional financing if required.
January Cash Budget
Beginning Cash Balance: $138,000
Collections from customers: $213,000
Payments to suppliers: $120,000
Wages: $90,000
Administrative expenses (excluding depreciation): $60,000
Selling expenses: $45,000
Sale of short-term investments: $36,000
February Cash Budget
Collections from customers: $438,000
Payments to suppliers: $225,000
Wages: $120,000
Administrative expenses (excluding depreciation): $69,000
Selling expenses: $60,000
Depreciation does not affect the cash budget as it is a non-cash expense. The company should compute its net cash flows for each month and determine if there is a need to draw from the line of credit to maintain the minimum cash balance. A detailed budget will help in decision-making and ensure financial stability.
Paid $7,000 of accrued taxes at the time the plant site was acquired. choose an account title 2. Paid $200 insurance to cover a possible accident loss on new factory machinery while the machinery was in transit. choose an account title 3. Paid $850 sales taxes on a new delivery truck. choose an account title 4. Paid $21,000 for parking lots and driveways on the new plant site. choose an account title 5. Paid $250 to have the company name and slogan painted on the new delivery truck. choose an account title 6. Paid $8,000 for installation of new factory machinery. choose an account title 7. Paid $900 for a 2-year accident insurance policy on the new delivery truck. choose an account title 8. Paid $75 motor vehicle license fee on the new truck.
Answer: Please refer to Explanation
Explanation:
Hello. Your question was not complete as it lacked certain options.
I have attached it to this answer.
1.Paid $7,000 of accrued taxes at the time the plant site was acquired. LAND because it was an expense that was needed to acquire the land so it is capitalized
2. Paid $200 insurance to cover a possible accident loss on new factory machinery while the machinery was in transit. EQUIPMENT
3. Paid $850 sales taxes on a new delivery truck. EQUIPMENT.
4. Paid $21,000 for parking lots and driveways on the new plant site. choose an account title. LAND IMPROVEMENTS.
5. Paid $250 to have the company name and slogan painted on the new delivery truck. choose an account title. EQUIPMENT
6. Paid $8,000 for installation of new factory machinery. choose an account title. EQUIPMENT
7. Paid $900 for a 2-year accident insurance policy on the new delivery truck. choose an account title. PREPAID INSURANCE
8. Paid $75 motor vehicle license fee on the new truck. LICENSE EXPENSE.
A project's opportunity cost of capital is:
Multiple Choice:
O the return that shareholders could expect to earn by investing in the financial markets.
O the return earned by investing in the project.
O equal to the average return on all company projects.
O designed to be less than the project's IRR.
Answer:
the return that shareholders could expect to earn by investing in the financial markets
Explanation:
Projects are financed from a joined pool of funds. The Cost of Capital is the minimum return that a project must offer before it can be accepted and this is determined by the return that shareholders could expect to earn by investing in the financial markets.
At the beginning of the month, the Forming Department of Martin Manufacturing had 30,000 units in inventory, 30% complete as to materials, and 10% complete as to conversion. During the month the department started 80,000 units and transferred 92,000 units to the next manufacturing department. At the end of the month, the department had 18,000 units in inventory, 80% complete as to materials and 70% complete as to conversion. If Martin Manufacturing uses the weighted average method of process costing, compute the equivalent units for materials and conversion respectively for the Forming Department.
Answer:
the equivalent units for :
materials = 106,400
conversion = 104,600
Explanation:
Calculation of the equivalent units for materials
Note : Units of Ending Work In Process are 80% complete as to materials
Units of Ending Work In Process (18,000×80%) = 14,400
Units Completed and Transferred (92,000×100%) = 92,000
Total =106,400
Calculation of the equivalent units for conversion
Note : Units of Ending Work In Process are 70% complete as to conversion
Units of Ending Work In Process (18,000×70%) = 12,600
Units Completed and Transferred (92,000×100%) = 92,000
Total =104,600
A lunch packager and distributor receives a shipment of freshly cut on-the-go shaped fruit. To get the fruit ready for distribution to grocery stores, the fruit is packaged in convenient vacuum-sealed, lunch-box-size containers decorated with cartoon icons of the particular fruit all over. How has the company added value to the product?
Answer:
The vacuum-sealed packaging is the added value and the decorations with cartoon icons of the particular fruit all over.
Explanation:
The vacuum-sealed packaging is the added value.
This vacuum-sealed packaging makes sure the fruits stay fresh by providing an air-tight environment.
It also preserves the moisture in the fruit for an extended period of time and allowing one to enjoy the fruit as it will still taste fresh.
Also, vacuum-sealed packaging allows the fruit to stay longer and it wont go bad.
In addition to this vacuum-sealed packaging, the cartoon icons of the particular fruit all over lunch-box size container which is vacuum-sealed is also an addded value. This will invite customers to the product.
Chang Industries has 1,000 defective units of product that already cost $54 each to produce. A salvage company will purchase the defective units as is for $25 each. Chang's production manager reports that the defects can be corrected for $46 per unit, enabling them to be sold at their regular market price of $41. The $54 per unit is a:
Answer:
The $54 is a sunk cost. It won't vary whether you choose to sell them as it is or to continue processing. A sunk cost is a cost that already took place and has no weight in the decision process.
Explanation:
Giving the following information:
Chang Industries has 1,000 defective units of product that already cost $54 each to produce.
The $54 is a sunk cost. It won't vary whether you choose to sell them as it is or to continue processing. A sunk cost is a cost that already took place and has no weight in the decision process.
Suppose a firm's production function is given by Q = F(L,K) = 5LK, where L is the amount of labor and K is the amount of capital. The wage rate is $100 per unit of labor and the rental rate of capital is $25 per unit of capital. What is the lowest possible cost of producing 980 units of output?
Answer:
$ 9800.
Explanation:
First, we must know that the cost minimization of capital and labour is; MRTS = MPL/ MPK.
Where the marginal product of labour = dQ/dL which is equal to; 5K.
The marginal product of capital = dQ/dK = 5L.
Hence, the marginal rate of technical substitution = 5K/5L = 100/25.
K = 4L.
Next, we will substitute the value of K into Q= 5LK.
That is; Q = 5L × 4L. Where Q = 980 units.
Then, 980 = 20L.
L = 49.
If L = 49, then K = 4 × 49 = 196.
So, we will now use what we have gotten above to determine the lowest possible cost;
lowest possible cost= (100 × 49) + (25 × 196).
lowest possible cost = 4900 + 4900.
lowest possible cost= $ 9800
Peter Billington Stereo, Inc. Supplies car radios to auto manufacturers and is going to open a new plant. The company is undecided between Detroit and Dallas as the site. The fixed costs in Dallas are lower due to cheaper land costs, but the variable costs in Dallas are higher because shipping distances would increase.
Dallas Detroit
Fixed costs $560,000 $840,000
Variable costs $28/radio $24/radio
A. Based on the analysis of the volume after rounding the numbers to the nearest number, Dallas is best below and Detroit is best above _____ radios.
B. Dalla's fixed costs have increased by 10%. Based on the analysis of the volume, after rounding the numbers to the nearest whole number, Dallas is best below and Detroit is best above _____ radios.
Questions option:
1. 14,000
2. 153,993
3. 70,000
4. 67,200
5. 56,000
Answer:
Peter Billington Stereo, Inc.
A. Based on the analysis of the volume after rounding the numbers to the nearest number, Dallas is best below and Detroit is best above 70,000 radios.
B. With Dallas's fixed costs increased by 10%, Dallas is best below and Detroit is best above 56,000 radios.
Explanation:
Identify total costs at various volumes as follows:
Total costs, TC = Variable Cost, VC + Fixed Cost, FC
At 14,000 units:
a) Dallas' TC = VC = $28 x 14,000 + $560,000 = $952,000
b) Dallas' TC with 10% increase in FC = $28 x 14,000 + $616,000 = $1,008,000
c) Detroit's TC = $24 x 14,000 + $840,000 = $1,176,000
At 56,000 units:
a) Dallas' TC = $28 x 56,000 + $560,000 = $2,128,000
b) Dallas' TC with 10% increase in FC = $28 x 56,000 + $616,000 = $2,184,000
c) Detroit's TC = $24 x 56,000 + $840,000 = $2,184,000
At 67,200 units:
a) Dallas' TC = $28 x 67,200 + $560,000 = $2,441,600
b) Dallas' TC with 10% increase in FC = $28 x 67,200 + $616,000 = $2,497,600
c) Detroit's TC = $24 x 67,200 + $840,000 = $2,452,800
At 70,000 units:
a) Dallas' TC = $28 x 70,000 + $560,000 = $2,520,000
b) Dallas' TC with 10% increase in FC = $28 x 70,000 + $616,000 = $2,576,000
c) Detroit's TC = $24 x 70,000 + $840,000 = $2,520,000
At 153,993 units:
a)Dallas' TC = $28 x 153,993 + $560,000 = $4,871,804
b) Dallas' TC with 10% increase in FC = $28 x 153,933 + $616,000 = $4,927,804
c) Detroit's TC = $24 x 53,993 + $840,000 = $4,535,832
Patrick Enterprises recently installed a parking lot. The paving costs were $38,750, and the lighting costs were $20,000. In addition, the company entered into a $1,000 annual agreement with Romero Cleaning to maintain the parking lot for 3 years. What is the total cost to be included in the Land Improvements account
Answer:
$58,750
Explanation:
Paving Costs $38,750
Lighting Costs $20,000
Total cost to be included in land improvement account $58,750
Please note that cleaning agreement cost is revenue expenditure,therefore should be charged to profit and loss account not in land improvement account.
Suzanne, Kyle, and Monique have been arguing for days over how they are going to divide up the responsibilities for their group project. They finally arrive at a consensus after their instructor tells them they need to make a decision. What phase of group-decision making are they in?
Answer:
Emergence.
Explanation:
In this context, it can be said that Suzanne, Kyle and Monique are in the emergence phase of group decision making.
This phase occurs right after the conflict phase, in the emergence phase the ideas will be finally defined and there will be a consensus among the team.
At this stage it is common for the individual interests and needs of the team members to be set aside in favor of the team's interests.
Therefore, project members also tend to adopt a more softening stance and opinions with the intention of not appearing dominant in relation to the project.
In 2010, bad freezes destroyed a large portion of Florida's grapefruit crop. Explain what happened in the grapefruit market using the concepts of supply and demand in your analysis. How did this affect the equilibrium price and quantity of grapefruit
Answer: Please refer to Explanation
Explanation:
The Grapefruit market will experience an acute shortage of grapefruits because the bad freeze destroyed most of the crop that was going to be supplied.
This shortage in supply will force the price up and therefore lead to a drop in Demand as a lot of people will decide that they can't spend the new amount.
This scenario would lead to an increase in the Equilibrium price because the supply curve will be forced to the left and the new intersect with the Supply curve will be higher. The Equilibrium Quantity will also reduce because of the shortage that is being experienced as a result of a large portion of the grapefruits being destroyed.
In the graph I attached, S2 refers to the supply curve AFTER the bad freezes. Notice how the price went up to P2 and the Quantity dropped to Q2.
If you need any clarification do comment. Cheers.
You’re trying to save to buy a new $175,000 Ferrari. You have $35,000 today that can be invested at your bank. The bank pays 2.9 percent annual interest on its accounts. How long will it be before you have enough to buy the car? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
Approximately 56 years and 3 months.
Explanation:
The formula to calculate this is the same formula we use for calculating the Future Value.
Future Value = Present Value ( 1 + i ) ^ n
175000 = 35000 ( 1 + 0.029 ) ^ n
Calculating for 'n',
We get the ' n ' as 56.29 years.
Hope this Helps.
Goodluck buddy.
Answer:
56.3 years
Explanation:
Price of the Car, $175,000 is the future target value which I am trying to have by investing $35,000 at a rate of 2.9% per year.
We can calculate the numbers of years by using the Future value formula
FV = PV = ( 1 + r )^n
FV = Future Value = $175,000
PV = Present Value = $35,000
r = rate of interest = 2.9%
n = numbers of year / periods = ?
By Placing the values in the formula
$175,000 = $35,000 x ( 1 + 2.9% )^n
$175,000 / $35,000 = ( 1 + 0.029 )^n
5 = 1.029^n
Log 5 = n Log 1.029
n = Log 5 / log 1 .029 = 56.30 years
After recording depreciation for the current year, Media Mania Incorporated decided to discontinue using its printing equipment. The equipment had cost $752,000, accumulated depreciation was $554,000, and its fair value (based on estimated future cash flows from selling the equipment) was $52,000.
Determine whether the equipment is impaired.
Prepare the journal entries to record the impairment in asset if any.
Record the entry to remove accumulated depreciation.
Record the impairment loss.
Answer:
1. the printing equipment is Impaired
2. Journal
Impairement Loss $146,000 (debit)
Accumulated Impairement Loss $146,000 (credit)
3. Journal
Accumulated Depreciation $554,000 (debit)
Accumulated Impairement Loss $146,000 (debit)
Printing Equipment (credit) $700,000
Explanation:
Impairement Loss (IAS 36) happens when the Carrying Amount of an Asset Exceeds its Recoverable Amount.
Carrying Amount Calculation
Carrying Amount = Cost - Accumulated Depreciation
= $752,000 - $554,000
= $198,000
Recoverable Amount Determination
Recoverable amount of an asset is the Higher of :
Value in Use orFair Value Less Cost to SellOnly the fair value is provided, hence Recoverable amount is $52,000
Analysis for Impairment loss
Carrying Amount $198,000 > Recoverable amount $52,000
Therefore the printing equipment is Impaired
Impairement Loss $146,000 (debit)
Accumulated Impairement Loss $146,000 (credit)
Determine whether each policy below is good or bad cash management; then identify the cash management strategy violated or followed for each policy.
a. The company regularly follows up with customers who pay late.
b. Excess cash is put into short-term investments to earn extra income.
c. Cash receipts and cash payments are regularly planned and reviewed.
d. Rarely used equipment is rented rather than purchased.
e. Bills are paid as soon as they are received.
Answer: Please refer to Explanation.
Explanation:
a. The company regularly follows up with customers who pay late.
This is GOOD.
Cash Management Strategy - Collection of Accounts Receivables on time to maintain cash balance.
b. Excess cash is put into short-term investments to earn extra income.
This is GOOD.
Cash Management Strategy - Earning extra income on idle cash by investing in short-term liquid investments.
c. Cash receipts and cash payments are regularly planned and reviewed.
This is GOOD.
Cash Management Strategy - Cash Planning to establish a correct balance between payments and receipts.
d. Rarely used equipment is rented rather than purchased.
This is GOOD
Cash Management Strategy - Saving money by spending economically only when needed.
e. Bills are paid as soon as they are received.
This is BAD
Cash Management Strategy - Paying bills when due to ensure that operating cash balance is maintained at a healthy level.
If you need any clarification do comment.
Cheers.
Final answer:
The provided policies largely reflect good cash management, emphasizing the importance of liquidity in business operations. Regularly following up on late payments, optimizing short-term investments, and planning cash flow are all effective strategies. However, paying bills immediately might not always be the best approach when considering liquidity needs.
Explanation:
Assessing the policies provided requires understanding cash management strategies and how effectively they utilize a company's liquidity. The notion of liquidity is significant in cash management as it determines how readily available funds can be for use.
a. The company regularly follows up with customers who pay late. This is good cash management. It demonstrates an active approach to accounts receivable management, ensuring that cash flow is maintained and credit risk is minimized.
b. Excess cash is put into short-term investments to earn extra income. This is also good cash management. It follows the strategy of maximizing returns on idle cash without sacrificing liquidity, as short-term investments can generally be liquidated quickly.
c. Cash receipts and cash payments are regularly planned and reviewed. This is indicative of good cash management, ensuring that the company has a solid understanding of its cash flow, which is essential for maintaining liquidity.
d. Rarely used equipment is rented rather than purchased. Renting equipment as opposed to purchasing can be considered good cash management because it avoids locking in capital in rarely used assets and keeps cash available for more liquid purposes.
e. Bills are paid as soon as they are received. While paying bills promptly is generally a good practice, it might not be the best cash management strategy if it leads to low liquidity. Timing payments to avoid late fees and maintain supplier relationships while keeping cash longer might be a better approach.
Each of these policies needs to be judged in context, but they all relate to effective cash management practices by either preserving or optimizing liquidity.
The income tax rate on all forms of income is 40 percent and there is a tax of 10 percent on all consumption expenditure. The nominal interest rate is 7 percent a year and the inflation rate is 5 percent a year. What is the size of the tax wedge on wages? What is the true tax rate on interest income?
Final answer:
The tax wedge on wages is 40 percent of the gross wage earned, and the true tax rate on interest income is 50 percent.
Explanation:
The tax wedge on wages is the difference between the gross wage earned by a worker and the net wage received after taxes. In this case, the income tax rate is 40 percent.
Therefore, the tax wedge on wages would be 40 percent of the gross wage earned.
The true tax rate on interest income accounts for both income tax and consumption tax.
The income tax rate is 40 percent, and there is a tax of 10 percent on all consumption expenditure.
So, the true tax rate on interest income would be the sum of the income tax rate and the consumption tax rate, which is 40 percent + 10 percent = 50 percent.
The following standards for variable manufacturing overhead have been established for a company that makes only one product: Standard hours per unit of output 8.8 hours Standard variable overhead rate $ 15.20 per hour The following data pertain to operations for the last month: Actual hours 2,950 hours Actual total variable manufacturing overhead cost $ 45,610 Actual output 150 units What is the variable overhead efficiency variance for the month
Answer:
variable overhead efficiency variance= $24,776 unfavorable
Explanation:
Giving the following information:
Standard hours per unit of output 8.8 hours
Standard variable overhead rate $ 15.20 per hour
Actual hours 2,950 hours
Actual output 150 units
To calculate the variable overhead efficiency variance, we need to use the following formula:
variable overhead efficiency variance= (Standard Quantity - Actual Quantity)*Standard rate
Standard quantity= 150*8.8= 1,320 hours
variable overhead efficiency variance= (1,320 - 2,950)*15.2
variable overhead efficiency variance= $24,776 unfavorable
Second Link Services granted restricted stock units (RSUs) representing 16 million of its $1 par common shares to executives, subject to forfeiture if employment is terminated within four years. After the recipients of the RSUs satisfy the vesting requirement, the company will distribute the shares. The common shares had a market price of $10 per share on the grant date. 1. Ignoring taxes, what is the total compensation cost pertaining to the restricted stock units
Answer:
The total compensation cost pertaining to the restricted stock units is $160,000,000
Explanation:
In order to calculate the total compensation cost pertaining to the restricted stock units we would have to use the following formula:
Total compensation cost=Fair market value per share× Number of shares
pertaining to the restricted stock units awarded to executives
=$10×16,000,000 shares
=$160,000,000
The total compensation cost pertaining to the restricted stock units is $160,000,000
g In 2009, an agricultural company introduced a new cropping process which reduced the cost of growing some of its crops. If sales in 2008 and 2009 were steady at $30 million, but the gross margin increased from 2.8% to 3.9% between those years, by what amount was the cost of sales reduced
Answer:
$ 330000
Explanation:
Gross margin represent the amount of money remaining after the removal or subtraction of cost of product or services sold from its net sales \
Gross margin = ( total revenue - costs of good sold ) × 100
the sales in 2008 and 2009 were steady at $ 30 million dollar
the gross margin increased from 2.8% to 3.9 %
the amount the cost of sales reduced = ( $ 30 million × 0.039) - ( $ 30 million × 0.028) = $ 330000
In an option contract: a. the offeree gives the offeror something of value in exchange for a promise not to revoke the offer for a stated period of time b. the offeree is free to accept or reject the offer c. all of the above d. a separate contract is created for the limited purpose of keeping the offer open
Answer:
d. a separate contract is created for the limited purpose of keeping the offer open
Explanation:
The contract defines that it is a contract between two or more persons in which the legal agreement, offers acceptance by the offeree is there and thus it is a lawful contract which is created by mutual agreement between the parties.
If the offeree offers the offeror some value in return for a commitment not to withdraw the offer for a given period of time, a contract option was established. A choice is a separate contract with the specific intention of holding the offer open.
The following information pertains to the Moline Facility for the month of May (all materials are added at the beginning of the process): Units Material Costs Beginning work in process 54,000 $ 148,500 Started in May 144,000 475,200 Units completed 153,000 Ending work in process 45,000 Required: Compute the cost per equivalent unit for materials using the weighted-average method. (Round "Cost per equivalent unit" answer to 2 decimal places.)
Answer:
$3.15
Explanation:
The computation of the cost per equivalent unit for material is shown below:
As we know that
Cost per equivalent unit of material is
= Total cost ÷ Total equivalent units
where,
Total cost is
= $148,500 + $475,200
= $623,700
And, the
Equivalent units of materials is
= 153,000 units + 100% of 45,000 units
= 198,000 units
So,
The Cost per equivalent unit for materials is
= $623,700 ÷ 198,000 units
= $3.15
By dividing the total cost with its Equivalent units of materials we can get the cost per equivalent unit for material
Perry, a buyer for Superior Products Company, a manufacturer of bulletin boards and other office supplies, visits a lumberyard and is shown samples of cork by Monica, a salesperson. Perry agrees to buy a certain quantity based on Monica's statement that the shipment will match a selected sample. The statement is:________
a. an express warranty.
b. an implied warranty.
c. a warranty of title.
d. puffing
Answer:
The correct answer is letter "A": an express warranty.
Explanation:
An express warranty is an arrangement established by a buyer and a seller so that the seller is in charge of repairs of a good sold by the seller in case it presents failures under certain circumstances. The warranty covers the product for a specified time in the contract and must be written in case the purchase value of the product is higher than $15.
Brooke owns a sole proprietorship in which she works as a management consultant. She maintains an office in her home where she meets with clients, prepares bills, and performs other work-related tasks. The home office is 300 square feet and the entire house is 4,500 square feet. Brooke incurred the following home-related expenses during the year. Unless indicated otherwise, assume Brooke uses the actual expense method to compute home office expenses. Real property taxes $ 3,600 Interest on home mortgage 14,000 Operating expenses of home 5,000 Depreciation 12,000 Repairs to home theater room 1,000 e. Assume that Brooke uses the simplified method for computing home office expenses. If Brooke reported $2,000 of Schedule C net income before the home office expense deduction, what is the amount of her home office expense deduction and what home office expenses, if any, would she carry over to next year
Answer:
The Total expenses of the amount allocated to the home office is $35, 600, the total amount of the tier 1, 2, and 3 expenses were $2306, finally, Brooke may deduct $494 of depreciation expense and carry the remaining $306 over to the following year.
Explanation:
The first step is to know what amount each of this expenses is allocated to the home office.
Expense Amount Type Allocated to home office 6.6% of indirect
(300/4, 500 square feet.)
Real property taxes $3,600 Indirect $240
Interest on home
Mortage 14,000 Indirect 933
Operating expense
of home 5000 Indirect 333
Depreciation 12,000 Indirect 800
Repairs to home
theater room 1000 Unrelated 0
Total expenses $35,600 $2,306
The next step is to find the total amount of tier 1, tier 2, and tier 3 expenses allocated to the office.
expenses for Tier 1 : $1,173 which is $240 real property + $933 of interest home mortgage expenses for Tier 2: $333 (operating expenses of the home)expenses for ties 3 : $800 depreciation.For the last step thus saying we solve thus:
Now,
$2000 home office expense in total and $306 depreciation expense carry to the next year.
From her $2,000 of Schedule C net income before she would subtracts all $1,173 from tier 1 expenses and all $333 from tier 2 expenses. this leaves $494 ($2000- $1,173 - $333) of net income before depreciation (tier 3 expense)
Because the home office deduction can reduce net income to $0, brooke may deduct $494 of depreciation expense and carry the remaining $306 over to the following year.
For Brooke's actual expense method, after applying the proportion of the home used for her business to her home-related expenses, she can deduct $2,000 this year and carry over $308.4 to next year. Under the simplified method, she could deduct $1,500.
Explanation:To calculate Brook's home office expenses, we'll first need to determine the proportion of the house used for business purposes. In this case, it's 300 square feet out of 4,500 square feet, or 6.67% (300/4500). Next, we apply this percentage to each of her home-related expenses, but ignoring the repair costs to the home theater room as this does not apply to the business use of the home.
Her deductions would therefore be:
Real Property Taxes: $3,600 * 6.67% = $240.12 Interest on Home Mortgage: $14,000 * 6.67% = $934.38 Operating Expenses: $5,000 * 6.67% = $333.50 Depreciation: $12,000 * 6.67% = $800.40This totals $2,308.4 in deductible home office expenses. Nevertheless, since Brooke reported $2,000 of Schedule C net income before the home office expense deduction, she can only deduct up to $2,000. The remaining $308.4 can be carried over to the next year. However, if Brooke uses the simplified method for computing home office expenses, she would be able to deduct $5 per square foot of her home used for business, up to 300 square feet, the equivalent of $1,500.
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Neptune Company produces toys and other items for use in beach and resort areas. A small, inflatable toy has come onto the market that the company is anxious to produce and sell. The new toy will sell for $3 per unit. Enough capacity exists in the company’s plant to produce 16,000 units of the toy each month. Variable costs to manufacture and sell one unit would be $1.25, and fixed costs associated with the toy would total $35,000 per month.
The company’s Marketing Department predicts that demand for the new toy will exceed the 16,000 units that the company is able to produce. Additional manufacturing space can be rented from another company at a fixed cost of $2,000 per month. Variable costs in the rented facility would total $1.50 per unit, due to somewhat less efficient operations than in the main plant.
Required:
1. Compute the monthly break-even point for the new toy in unit sales and in dollar sales.
2. How many units must be sold each month to make a monthly profit of $12,000?
If the sales manager receives a bonus of 10 cents for each unit sold in excess of the break-even point, how many units must be sold each month to earn a return of 25% on the monthly investment in fixed expenses?
Answer:
1) 22,000 units; $66,000.
2) 30,000 units
3) 28,607 units
Explanation:
1)
16,000 units × $1.75 per unit = $28,000 ($3-$1.25)
Remaining unrecovered fixed cost = $7,000 ($35,000 - $28,000)
Total fixed costs to be covered by remaining sales = $9000 ($7000+$2000 addition cost).
--> ($3-$1.5=$1.5 Contribution Margin per unit)
6,000 units ($9000 divided $1.5 )
Total units = 16000+6000=22,000 units
22,000 units x $3=$66,000.
2) Target profit = $12000
CM ratio = $3-1.5=$1.5
$12000/$1.5=8,000 units.
30,000 units (22,000 units + 8,000 units )
3)
Bonus 0.10 per unit cause CM drop from $1.5 to $1.4 per unit
$9,250 -->($35,000+$2,000)]*25%
$9250/$1.4 = 6,607 units
22,000 units + 6,607 units = 28,607 units.
The correct options to the question will be (1) 22,000 units; $66,000; (2) 30,000 units; and (3) 28,607 units
The monthly break-even point for the new toy in unit sales and in dollar sales will be:
= 16,000 units × ($3 - $1.25)
= 16000 units × $1.75.
= $28000
Then, the remaining unrecovered fixed cost will be:
= $35,000 - $28,000 = $7000
Then, the total fixed costs that will be gotten from the remaining sales will be:
= $7000 + $2000 = $9000
The contribution margin per unit will be: = $3 - $1.5 = $1.5
The units will be: 9000/$1.5 = 6000
Total units will then be: = 16000+6000=22,000 units
Therefore, the dollar sales will be:
22,000 units x $3 = $66,000.
2) Target profit = $12000
Contribution Margin ratio = $3-1.5 = $1.5
Therefore, the units that must be sold each month to make a monthly profit of $12,000 will be:
= $12000/$1.5 = 8,000 units.
Number of units will be:
= 22,000 units + 8,000 units
= 30000 units
3)This will be calculated as:
= ($35,000+$2,000)] × 25%
= $37000 × 25%
= $9250.
This will then be:
= ($9250)$1.4) + 22000
= 6607 + 22000
= 28607 units
The number of units will be 28607 units
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Paola Farms, Inc. produces a crop of chickens at a total cost of $66,000. The production generates 60,000 chickens which can be sold for $1 each to a slaughtering company, or the chickens can be slaughtered in house and then sold for $2.75 each. It costs $65,000 more to turn the annual chicken crop into chicken meat. If Paola Farms slaughters the chickens, determine how much incremental profit or loss it would report.
Answer: $40,000 incremental profit
Explanation:
Total Revenue if they sell the chickens as is to a slaughter house is,
= 60,000 * 1
= $60,000
If they decide to slaughter the chickens themselves then we have the following revenue
= 2.75 (selling price) * 60,000 chickens - 65,000 ( cost to turn into meat)
= $100,000
That's the profit if they process further. To get the Incremental Profit we subtract the profit if they just sell to the Slaughter house.
= 100,000 - 60,000
= $40,000
The Incremental profit if Paola Slaughters chickens is, $40,000
Final answer:
Paola Farms would report an incremental profit of $34,000 by slaughtering the chickens in-house, which is calculated by subtracting the combined costs of initial production and additional slaughtering from the revenue obtained after slaughtering.
Explanation:
To calculate the incremental profit or loss that Paola Farms would report if they decide to slaughter their chickens in-house, we first need to measure the additional revenue against the additional costs incurred from slaughtering.
If Paola Farms sells the chickens without slaughtering, they will make $60,000 in revenue (60,000 chickens at $1 each). If they decide to slaughter the chickens in-house, they can sell them for $2.75 each, resulting in total revenue of $165,000 (60,000 chickens at $2.75 each).
The extra cost to slaughter the chickens is $65,000. Therefore, we need to subtract the initial production cost of $66,000 and the additional slaughtering cost from the total revenue after the slaughter process:
Incremental Profit = Revenue from slaughtering - (Initial production cost + Additional slaughtering cost)
Incremental Profit = $165,000 - ($66,000 + $65,000) = $34,000
Hence, by slaughtering the chickens in-house, Paola Farms would report an incremental profit of $34,000.