Answer:
The break-even sales (in units u) for the current year is 210,000 units.
The anticipated break-even sales (in units t) for the coming year, assuming the new wage contract is signed is 357,000 units.
Explanation:
The BEP which is the break even point is the point where the company's sales or revenue generated is equal to the cost incurred. As such, the BEP is the number of units that must be sold for the company to make neither a profit nor a loss.
Both sales and variable cost are dependent on the number of units sold.
The sales less the variable cost gives the contribution margin. The contribution margin less the fixed cost gives the net operating income.
The break-even sales (in units u) for the current year
50u - 41.5u - 1785000 = 0
8.5u = 1785000
u = 1785000/8.5
= 210,000 units
The anticipated break-even sales (in units t) for the coming year, assuming the new wage contract is signed
50u - 45u - 1785000 = 0
5u = 1785000
u = 1785000/5
= 357,000 units
Darlington Inc., permits any of its employees to buy shares directly from the company. There are no brokerage fees and shares can be purchased at a 10% discount. During May, employees purchased 14,000 shares at a time when the market price of the shares was $10 per share. Prepare the appropriate journal entry for the May purchase. (
Answer: Please refer to Explanation
Explanation:
The following is the appropriate journal entry.
DR Bank Account (14,000 * 10 - 10%) $126,000
DR Employee Compensation Expense (10% * $140000) $14,000
CR Share Capital Account $140,000
(To record issue of shares to employees)
If you need any clarification do comment.
Answer:
Dr Cash 126,000
Dr Compensation expense 14,000
Cr Common stock 14,000
Cr Paid-in capital—in excess of par 126,000
Explanation:
Darlington Inc Journal entry
Dr Cash ($10 x 14,000 x 90%) 126,000
Dr Compensation expense ($10 x 14,000 x 10%) 14,000
Cr Common stock ($1 x 14,000) 14,000
Cr Paid-in capital—in excess of par ($9 x 14,000) 126,000
E16 13B (L0 3) (Accounting for Restricted Stock) Holt Company issues 10,000 shares of restricted stock to its new CEO, on January 1, 2020. The stock has a fair value of $260,000 on this date. The service period related to this restricted stock is 5 years. Vesting occurs if the CEO stays with the company for 5 years. The par value of the stock is $1. At December 31, 2021, the fair value of the stock is $180,000.Instructions(a)Prepare the journal entries to record the restricted stock on January 1, 2020 (the date of grant) and December 31, 2021.(b)On February 22, 2022, the CEO leaves the company. Prepare the journal entry (if any) to account for this forfeiture.
Answer and Explanation:
The journal entries are shown below:
a. Unearned compensation $260,000
To Common stock $10,000 (10,000 shares × $1)
To Paid in capital in excess of par - common stock $250,000
(Being the unearned compensation is recorded)
It increased the common stock and the remaining balance is transferred to the paid in capital so these account are credited while on the other hand the contra equity is decreased so unearned compensation is debited
Compensation expenses $52,000 ($260,000 ÷ 5 years)
To Unearned compensation $52,000
(being the compensation expense is recorded)
Since there is a compensation expense so the expense account is debited as it increased the expenses while on the other hand we credited the unearned compensation
b. Common stock 10,000
Paid in capital in excess of par - common stock $250,000
To Compensation expenses $104,000 ($52,000 × 2 years)
To Unearned compensation $156,000
(Being the forfeiture is recorded)
This entry reflects the reversing of the entry with related to the common stock, paid in capital, and compensation expense
Rafner Manufacturing identified the following budgeted data in its two production departments.
Assembly Finishing
Manufacturing overhead costs $1,200,000 $600,000
Direct labor hours 12,000 DLH 20,000 DLH
Machine hours used 6,000 MH 16,000 MH
What are the company's departmental overhead rates if the assembly department assigns overhead based on direct labor hours and the finishing department assigns overhead based on machine hours?
Answer:
$137.5
Explanation:
The Rafner Manufacturing assigns its manufacturing overheads cost on machine and labor hours. The assembly department assigns its overheads based on direct labor hours. The overhead rate will be,
$1,200,000 / 12,000 = $100 / labor hour
The finishing department assigns its overheads based on machine hours,
$600,000 / 16,000 Machine hours = 37.5
The Assembly department's overhead rate is $100 per direct labor hour, while the Finishing department's overhead rate is $37.5 per machine hour.
Explanation:
The overhead rate for each department can be calculated by dividing the total overhead costs by the appropriate base (direct labor-hours for the Assembly department and machine hours for the Finishing department).
For the Assembly department, the overhead rate is $1,200,000 / 12,000 direct labor hours = $100 per direct labor hour.
For the Finishing department, the overhead rate is $600,000 / 16,000 machine hours = $37.5 per machine hour.
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An industrial manufacturer that works with one or a few large clients and develops products that only these clients will use is most likely to implement a(n) ________ strategy.
Answer: Custom marketing
Explanation: A custom marketing strategy will most likely be employed by an industrial manufacturer that works with one or a few large clients and develops products that only these clients will use. Marketing creates, communicates, and delivers value, and it involves the management of customer relationships. A custom marketing strategy is one in which a manufacturer customizes and develops products that are unique to the needs of his customers and thus is an essential strategy for delivering a personalized customer experience to each segment of clients, thereby increasing loyalty and customer satisfaction.
Which axiom of service-dominant logic applies to this statement? Customers don't buy a car (product)—they buy the company's ability to add value through a defined set of benefits. Multiple Choice Service is the fundamental basis of exchange. Value is co-created by multiple parties, including the company and the customer. A unique experience is created when the customer interacts with the company’s marketing efforts and product. Value is defined by the customer. A customer-centric approach has been supplanted by a newer service-dominant approach.
Answer:
The correct answer is letter "B": Value is co-created by multiple parties, including the company and the customer
Explanation:
Value refers to the qualification an individual provides to a good or service based on the need it provides to the individual. It does not necessarily mean that the more valuable a product is the more expensive than good will be. It represents that an individual values more that product because it satisfies for him or her a need that must be covered.
Then, if a carmaker provides additional benefits to its customers and those benefits represent values the consumers are looking for, a purchase is likely to take place. Then, both producers and consumers can add value to a product or service.
Yields on short-term bonds tend to be more volatile than yields on long-term bonds. Suppose that you have estimated that the yield on 20-year bonds changes by 10 basis points for every 21-basis-point move in the yield on 5-year bonds. You hold a $1.5 million portfolio of 5-year maturity bonds with modified duration 4 years and desire to hedge your interest rate exposure with T-bond futures, which currently have modified duration 9 years and sell at F0 = $70. How many futures contracts should you sell? (Do not round intermediate calculations. Round your final answer to the nearest whole number.)
Answer:
The yield on momentary securities tends to be more eccentric than yields on long haul securities. In the event that it is assessed that the yield on 20-year securities changes by 10 premise focuses for each 15-premise point move in the yield on 5-year securities. One is holding a $1 million arrangement of 5-year development securities with changed length 4 years and ready to support his loan cost introduction with T-bond prospects. T-bond fates as of now have adjusted term 9 years and sell at $95 (F0).
The quantity of prospects gets that he should sell can be determined as demonstrated as follows: according to the assumption the portfolio misfortune considering the given data would be:
P = Portfolio esteem =$1,000.000
D = Modified length =4 years
Ay =Bond portfolio yield =15 premise
Misfortune on the Portfolio = P x Ay =$1,000,000 x 0.15%x 4 = $6,000
The adjustment in the fates cost (per $100 standard worth) will be as determined underneath:
$95 x 0.0001x 9 = $0.0855
This is a difference in $85.50 on a $100,000 standard worth agreements. Along these lines you should sell: $6,000/$85.50= 70
Hence, he ought to go short is 70 contracts.
Suppose that a well-respected study published in Child Psychology Today finds that a very high proportion of children raised by stay-at-home fathers are accepted to Harvard University. If a large number of previously working fathers quit their jobs and become stay-at-home dads, which of the following will occur, all else equal? (i) The unemployment rate will decrease. (ii) The size of the labor force will decrease. (iii) The number of unemployed people will increase. (iv) The unemployment rate will increase.
Answer:
(ii) and (iv) only
(ii) The size of the labor force will decrease.
(iv)The unemployment rate will increase.
If many fathers become stay-at-home dads, the size of the labor force will decrease because these men are not engaged in paid work. The unemployment rate and the number of unemployed people will not increase because these men are not searching for work, but have chosen to be out of the workforce.
Explanation:If a large number of fathers leave their jobs to become stay-at-home dads, multiple impacts could happen, all else being equal. Firstly, the size of the labor force would decrease as these men are choosing not to engage in paid work. Secondly, the number of unemployed people would not necessarily increase as they aren't searching for work; instead, they have opted out of the workforce. As these men are not technically unemployed, but out of the workforce, they do not contribute to the unemployment rate, and hence it's incorrect to state that the unemployment rate would increase.
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Early in 2018, the Excalibur Company began developing a new software package to be marketed. The project was completed in December 2018 at a cost of $14,000,000. Of this amount, $11,000,000 was spent before technological feasibility was established. Excalibur expects a useful life of five years for the new product with total revenues of $15,000,000. During 2019, revenue of $6,000,000 was recognized. Required: 1. Prepare a journal entry to record the 2018 development costs. 2. Calculate the required amortization for 2019. 3. At what amount should the computer software costs be reported in the December 31, 2019, balance sheet
Answer:
The answer is given below;
Explanation:
1.Software Package Dr.$3,000,000
Project expenses Cr.$3,000,000
2.Amortization 3,000,000/5 $600,000
3. Software Package be reported in balance sheet(3,000,000-600,000)= $2,400,000
The $11,000,000 will be charged out as research cost and will be reported in Profit and loss account because after this amount technological feasibility was established that asset will yield returns for the business and can be used for the business. The remaining amount $3,000,000 will be reported as development cost.
Thomasson Air uses two measures of activity, flights and passengers, in the cost formulas in its budgets and performance reports. The cost formula for plane operating costs is $36,160 per month plus $2,038 per flight plus $1 per passenger. The company expected its activity in April to be 73 flights and 223 passengers, but the actual activity was 72 flights and 228 passengers. The actual cost for plane operating costs in April was $179,020. The activity variance for plane operating costs in April would be closest to:
A)$6,137 U
B)$6,137 F
C)$2,033 U
D)$2,033 F
Answer:
D)$2,033 F
Explanation:
The formula for perating costs is:
[tex]C= 36,100 +2,038F+1P[/tex]
Where 'F' is the number of flights and 'P' is the number of passengers.
If the company expected 73 flights and 223 passengers, expected costs were:
[tex]E= 36,160 +2,038*73+1*223\\E=\$185,157[/tex]
If the company had an activity of 72 flights and 228 passengers, the actual costs were:
[tex]C= 36,160 +2,038*72+1*228\\C=\$183,064[/tex]
The operating cost variance is:
[tex]C=\$185,157-\$183,064\\C=\$2,033[/tex]
Since actual costs are lower than expected costs, the variance is favorable. Therefore, the answer is D)$2,033 F.
In 2021, its first year of operations, Kimble Corp. has a $900,000 net operating loss when the tax rate is 20%. In 2022, Kimble has $250,000 taxable income and the tax rate remains 20%. Assume the management of Kimble Corp. thinks that it is more likely than not that the loss carryforward will not be realized in the near future because it is a new company (this is before results of 2022 operations are known). (a) What are the entries in 2021 to record the tax effects of the loss carryforward
Answer and Explanation:
Kimble Corp entries in 2021 to record the tax effects of the loss carryforward
a)Dr Deferred Tax Asset ($900,000 × 20%) 180,000
Cr Benefit Due to Loss Carryforward $180,000
Dr Benefit Due to Loss Carryforward $180,000
Cr Allowance to Reduce Deferred Tax Asset to Expected Realizable Value $180,000
(b)
Dr Income Tax Expense ($250,000 × 20%) $50,000
Cr Deferred Tax Asset $50,000
Dr Allowance to Reduce Deferred Tax Asset to Expected Realizable value $50,000
Cr Benefit Due to Loss Carryforward $50,000
Shore Co. sells two products, kayaks and motors. Last year, Shore sold 12,600 units of kayaks and 23,400 units of motors. Related data are as follows: Product Unit Selling Price Unit Variable Cost Unit Contribution Margin Kayaks $120 $80 $40 Motors 80 60 20 Assuming that last year's fixed costs totaled $910,035, what was Shore Co.'s break-even point in units
Answer:
Break-even points in units is 33,705.00
Explanation:
Break-even point in units=fixed costs/weighted average selling price-weighted average variable cost
Kayaks 12,600
Motors 23,400
total 36,000
kayaks sales mix=12,600/36,000=0.35
Motors sales mix =23,400/36,000=0.65
weighted average selling price=$120*0.35+$80*0.65
=$42+$52
=$94
weighted average variable cost=$80*0.35+$60*0.65
=$28+$39
=$67
fixed costs is $910,035
break-even points in units=$910,035/($94-$67)
= 33,705.00
The mix of both Kayaks and Motors that would gives no profit no loss is 33,705.00
The break-even point calculation requires the overall contribution margin per unit, which is derived by subtracting unit variable cost from unit selling price. For Shore Co., the calculation requires the sales mix of kayaks and motors, which is not provided. Using the given examples, we illustrate how to calculate the break-even point with a fictitious firm's data, highlighting the relevance of knowing both average variable cost and average fixed cost.
Break-Even Point Calculation
To calculate the break-even point in units for Shore Co., we need to determine the overall contribution margin per unit and divide the total fixed costs by that amount. However, since Shore Co. sells two different products, we need to work with a weighted average contribution margin per unit. This approach requires knowing the proportion in which the two products are sold, which isn't provided in the question. In order to proceed with the information given, we would need to make assumptions or have additional information about the sales mix.
Under the simplified scenario with the provided reference data, the formula to calculate the break-even point in units is:
Total Fixed Costs / (Total Revenue - Total Variable Costs) per unit
With the provided example:
The firm's quantity is 1,000 unitsTotal fixed cost is $1,200Total cost is $4,000Total variable cost is $2,800The break-even price point is $4.00The short-run shutdown price point is $2.80In this scenario, the average variable cost is $2.80, and the average fixed cost is $1.20 (calculated by dividing the total fixed costs by the number of units). The break-even point in this case would be 300 units, calculated as follows: $1,200 total fixed costs / ($4.00 selling price - $2.80 variable cost per unit).
(a) A local bookseller is considering expanding store space to increase his capacity for books.
The rent for the additional space would cost $3000 per year. The bookseller predicts that the
added space will pull in an additional profit of $4000 per year. The current interest rate is 12%.
Should the bookseller invest in the extra space?
The book seller should invest in the extra space.
Explanation:
As per the given data:
rent for the additional space given is $300 per year, the additional profit that will be pulled by adding on the space = $4000 per year, the current rate of interest given is = 12%
In order to calculate about the decision, the present values needs to be calculated first
The present value of the investment = (- $ 3000 plus $ 4000) by 1.121
The present value of the investment = $ 571.43
The present value of the investment is positve, hence the book seller should invest in the extra space.
Suppose a competitive market is comprised of firms that face identical cost curves. The firms experience an increase in demand that results in positive profits for the firms. Which of the following events are then most likely to occur?(i)New firms will enter the market.(ii)In the short run, price will rise; in the long run, price will rise further.(iii)In the long run, all firms will be producing at their efficient scale.
Answer:
(i)New firms will enter the market.
(iii)In the long run, all firms will be producing at their efficient scale
Explanation:
A perfect competition is characterised by many buyers and sellers of homogenous goods and services. Market price is set by the forces of demand and supply.
If firms are earning positive profits, in the long run new firms would enter into the industry and this woold drive positive profits to zero. As a result , firms would be operating at the efficient scale.
I hope my answer helps you
Answer:
I) New firms will enter the market, III)In the long run, all firms will be producing at their efficient scale.
Explanation:
In Microeconomics, this has already happened before. In most recent years, we have seen this For Flat Screen TVs and Smartphones. This is dynamic because the demand may or may not keep on increasing.
In addition to this, another important variable is the supply. The Cost curve is identical to both of them but this is also dynamical. But all of the firms will work harder and harder to lower the Cost curve, so they'll become more efficient.
Finally, in the long run the product retail price will inevitably fall.
Ramirez Corporation sells two types of computer chips. The sales mix is 30% (Q-Chip) and 70% (Q-Chip Plus). Q-Chip has variable costs per unit of $60 and a selling price of $100. Q-Chip Plus has variable costs per unit of $70 and a selling price of $130. Ramirez’s fixed costs are $540,000. How many units of Q-Chip would be sold at the break-even point?
A
3,000
B
3,522
C
5,000
D
7,000
Answer:
The correct answer is A.
Explanation:
Giving the following information:
The sales mix is 30% (Q-Chip) and 70% (Q-Chip Plus).
Q-Chip has variable costs per unit of $60 and a selling price of $100.
Q-Chip Plus has variable costs per unit of $70 and a selling price of $130.
Ramirez’s fixed costs are $540,000.
First, we need to calculate the break-even point in units for the whole company.
Break-even point (units)= Total fixed costs / Weighted average contribution margin ratio
Weighted average contribution margin ratio= (weighted average selling price - weighted average unitary variable cost)
weighted average selling price= (0.3*100 + 0.7*130)= $121
weighted average unitary variable cost= (0.3*60 + 0.7*70)= $67
Weighted average contribution margin ratio= 540,000 / (121 - 67)
Weighted average contribution margin ratio= 10,000 units
Break-even for each product line:
Q-Chip= 0.3*10,000= 3,000 units
Q-Chip Plus= 0.7*10,000= 7,000 units
To determine the break-even number of Q-Chip units, we calculate the contribution margin for both products, the weighted average contribution margin, and then the total units needed to break-even. Applying the sales mix for Q-Chip yields 3,000 units to break-even, making option A the correct answer.
To calculate the number of Q-Chip units Ramirez Corporation must sell to break-even, we need to use the weighted average contribution margin method because there is a sales mix for two different products. The steps are as follows:
Calculate the contribution margin per unit for each product: Selling price minus variable cost.Calculate the weighted average contribution margin.Divide the total fixed costs by the weighted average contribution margin to get the total number of units (of the mix) needed to break even.Since we want the number of Q-Chip units, we need to use the sales mix percentages to find the proportion.Contribution margin for Q-Chip = $100 - $60 = $40.
Contribution margin for Q-Chip Plus = $130 - $70 = $60.
Weighted average contribution margin = (30% × $40) + (70% ×$60) = $12 + $42 = $54.
Total units to break even = $540,000 / $54 = 10,000 units (combined).
Number of Q-Chip units = 30% of 10,000 = 3,000 units.
Therefore, the correct answer is A, 3,000 units of Q-Chip must be sold for the Ramirez Corporation to reach the break-even point.
If the expected return on the market is 11% and the expected return of investing in Merck is 10.35%, then the riskminus−free rate must be: A. 5.0% B. 4.0% C. 3.0% D. 4.5%
Answer:
The answer is given below;
Explanation:
Ra=Rf+(Rm-Rf)*Ba
Rm=11%
Ra=10.35%
Ba=.9 it is assumed that beta is .9 for merck
Rf=?
By putting values in above formula we get
10.35%=Rf+(11%-Rf)*.9
10.35%=Rf+.9*11%-.9Rf
10.35%=.1Rf+.099
.1Rf=10.35%-9.9%
Rf=.45%/.1
Rf=4.5%
Louise Fulkerson is president of the Student Marketing Association at Baylor University. Louise and the otherofficers want to conduct a short survey to determine the type of programming they should offer for theupcoming year. Their population is defined as "students in the College of Business." One of the officerssuggests that each of them go into their classes, mostly seniors, and conduct the survey. "We can do it easilyand fast, and our professors will be glad to help the association out by giving us a few minutes to conduct thesurvey," says one of the officers. But Louise is worried about the sample. "Most of us are marketing majorsand we are all seniors taking senior classes. I would prefer to ask the Department Chairperson if we cansurvey students taking Fundamentals of Marketing because all majors have to take this course, and most ofthe future members of the Association will be coming from these Fundamentals classes." Louise is suggestingwhich one of the following sampling methods?
A) quota sample
B) purposive sample
C) stratified sample
D) representative sample
E) systematic sample
Answer:
B) purposive sample
Explanation:
A purposive sample is a non-probability sample that is selected based on the characteristics of a population and the objective of the study. Purposive sampling is different from convenience sampling and is also known as judgmental, selective, or subjective sampling.
Several subtypes of purposive sampling exist:
Homogeneous Sampling: collecting a very specific set of participants. For example, age 20-24, college-educated, male.
Maximum Variation Sampling: collecting a wide range of participants with different viewpoints to study a certain phenomenon.
The main goal of purposive sampling is to focus on particular characteristics of a population that are of interest, which will best enable you to answer your research questions.
One of Modular Products (MP) customers would like to obtain a 6-month option to purchase 500,000 tables for $119 each. These tables currently sell for $110 each. Assume u equals 1.0994 and d equals .9096. What price should MP charge for this option if the annual risk-free rate is 3.2 percent
Group of answer choices
a. $338,400
b. $421,900
c. $598,100
d. $479,900
e. $533,600
Answer:
Option E is correct one.
$533,600
Explanation:
% increase = u − 1
% increase = 1.0994 − 1
% increase = .0994, or 9.94%\large % increase = u − 1
% decrease = d − 1
% decrease = .9096 − 1
% decrease = −.0904, or −9.04%
Price with increase = $110(1.0994)
Price with increase = $120.934
Price with decrease = $110(.9096)
Price with decrease = $100.056
rf = Probability of rise(Increase percent) + (1 − Probability of rise)(Decrease percent)
.032(6/12) = Probability of rise(.0994) + (1 − Probability of rise)(−.0904)
Probability of rise = .5606, or 56.06%
Probability of fall = 1 − .5606
Probability of fall = .4394, or 43.94%
Payoff if price increases = $120.934 − 119
Payoff if price increases = $1.934
Payoff if price decreases = $0
Expected payoff = .5606($1.934) + .4394($0)
Expected payoff = $1.0842
Option value = $1.0842/[1 + .032(6/12)]
Option value = $1.0671
Contract value= Option to purchase*Option value
Contract value = 500,000($1.0671)
Contract value = $533,600
Problem 4-4 Calculation of Gain or Loss (LO 4.3) Jocasta owns an apartment complex that she purchased 6 years ago for $750,000. Jocasta has made $50,000 of capital improvements on the complex, and depreciation claimed on the building to date is $128,700. Calculate Jocasta's adjusted basis in the building.
Answer:
$671,300
Explanation:
The calculation of adjusted basis in the building is shown below:-
Adjusted basis = Original cost of the property + Cost of capital improvements - Depreciation claimed
= $750,000 + $50,000 - $128,700
= $800,000 - $128,700
= $671,300
Therefore for computing the adjusted basis we simply add original cost of the property with cost of capital improvements and deduct depreciation claimed.
The following 3 questions are based on this information. Kings Department Store has 625 rubies, 800 diamonds, and 700 emeralds from which they will make bracelets and necklaces that they have advertised in their Christmas brochure. Each of the rubies is approximately the same size and shape as the diamonds and the emeralds. Kings will net a profit of $250 on each bracelet, which is made with 2 rubies, 3 diamonds, and 4 emeralds, and $500 on each necklace, which includes 5 rubies, 7 diamonds, and 3 emeralds. How many of each should Kings make to maximize its profit?
Answer:
129 bracelets and 59 necklaces.
Explanation:
Kings departments store wants to maximize profit by making a combination of its two products necklaces and bracelets. The King store should use a strategy so that it can generate maximum profit with its available rubies, diamonds and emeralds.
$250a + $500b = Maximum Profit
For rubies : 2a + 5b = 625
For Diamonds : 3a + 7b = 800
For Emeralds: 4a + 3b = 700
Solving the equation we get maximum profit value of $61,750.The King departments stores should make 129 bracelets and 59 necklaces which will bring maximum profit to the store.
Additional Information A $30,000 note payable is retired at its $30,000 carrying (book) value in exchange for cash. The only changes affecting retained earnings are net income and cash dividends paid. New equipment is acquired for $71,600 cash. Received cash for the sale of equipment that had cost $62,600, yielding a $3,400 gain. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement. All purchases and sales of inventory are on credit. (2) Compute the company’s cash flow on total assets ratio for its fiscal year 2019.
Answer:
The cash flow statement guides a company in understanding its true use and source of cash funding.
It helps breakdown the Net income and give confidence or allow an analyst/investor heighten his risk profile of the business returns on Invested funds.
The attached documents show details of the full questions which are missing from the submitted question and the Cash flow statement .
A company has preferred stock that can be sold for $28 per share. The preferred stock pays an annual dividend of 5% based on a par value of $100. Flotation costs associated with the sale of preferred stock equal $1.50 per share. The company's marginal tax rate is 35%. Therefore, the cost of preferred stock is;
Answer:
18.87%
Explanation:
The computation of the cost of preferred stock is shown below:
As we know that
The cost of preferred stock = Preferred dividend ÷ (issue price per share - flotation costs per share)
where,
Preferred dividend is
= 100 × 5%
= $5
Issued price per share is $28
And, the flotation cost is $1.50
So, the cost of preferred stock is
= $5 ÷ ($28 - $1.50)
= 18.87%
We simply applied the above formula
Consumers who use Yelp reviews to measure the tradeoff between quality and price of different restaurants are using what type of consumer decision rule? Multiple Choice noncompensatory multiattribute heuristic compensatory determinant
Answer:
Compensatory
Explanation:
Compensatory decision rule can be evaluated as when the consumer is evaluating alternatives and trades off one characteristics against another, such that good characteristics compensate for the bad ones.
There is tremendous opportunity in influencing consumers at the alternative evaluation and selection phase. This phase, along with research, is often the most time consuming in the decision making process.
Compensatory rule dictates that a consumer makes decision in terms of each relevant attribute and computes a weighted or summated score for each brand.
Bailey, a single taxpayer, obtains permission to change from a calendar year to a fiscal year ending June 30, 2019. During the six months ending June 30, 2019, she earns $40,000 and has $8,000 of itemized deductions. What is the amount of her annualized income?
a.$32,000
b.$28,000
c.$64,000
d.$56,000
Answer:
Correct option is c.$64,000
Explanation:
given data
earn = $40,000
deductions = $8,000
time = 6 month
solution
we get here amount of her annualized income that is express as
amount of her annualized income = ( earn - deduction ) × time duration
amount of her annualized income = ( $40,000 - $8,000 ) × [tex]\frac{6}{12}[/tex]
amount of her annualized income = $64,000
so correct option is c.$64,000
Each of the following factors affects the weighted average cost of capital (WACC) equation. Which of the following factors are outside a firm’s control? Check all that apply. The general level of stock prices The effect of the tax rate on the cost of debt in the weighted average cost of capital equation The firm’s dividend payout ratio The impact of a firm’s cost of capital on managerial decisions Consider the following case: International Imports (I2) has two divisions, L and H. Division L is the company’s low-risk division and would have a weighted average cost of capital of 8% if it was operated as an independent company. Division H is the company’s high-risk division and would have a weighted average cost of capital of 14% if it was operated as an independent company. Because the two divisions are the same size, the company has a composite weighted average cost of capital of 11%. Division L is considering a project with an expected return of 9.5%. Should International Imports (I2) accept or reject the project? Accept the project Reject the project On what grounds do you base your accept–reject decision? Division L’s project should be accepted, because its return is less than the risk-based cost of capital for the division. Division L’s project should be accepted, since its return is greater than the risk-based cost of capital for the division.
Answer:
The general level of stock prices
The effect of the tax rate on the cost of debt in the weighted average cost of capital equation
The project should be accepted.
Division L’s project should be accepted, since its return is greater than the risk-based cost of capital for the division.
Explanation:
The company can determinate their payout ratio and the cost of capital of their equity the rest of the option are determined by either the market or the government.
It should be accepted as the return is based on the division which WACC is 8% therefore, it will make a good use of the capital as is above the expected capital cost
Factors outside a firm's control affecting WACC include stock prices and tax rate effects on cost of debt. A firm's dividend policy and capital cost impact on decisions are controllable. For International Imports, Division L's project should be accepted because its return exceeds its cost of capital.
The factors affecting the weighted average cost of capital (WACC) that are outside a firm's control include:
The general level of stock pricesThe effect of the tax rate on the cost of debt in the weighted average cost of capital equationFactors such as the firm's dividend payout ratio and the impact of a firm's cost of capital on managerial decisions are within the firm's control.
Considering the case of International Imports (I2) and its two divisions, L and H, with WACCs of 8% and 14% respectively, we address the project for Division L. Since Division L's project has an expected return of 9.5%, which is greater than its risk-based cost of capital of 8%, the project should be accepted. The return exceeds the cost, making it a financially viable project for Division L.
Some consumers like to buy products on-line, some consumers don't. Do YOU like to shop and buy on-line? Think about your opinion of on-line shopping and your experiences buying on-line. Is there a product that you would prefer/always buy on-line? What is it and why do you like buying it on-line? Is there a product that you would NOT/never buy online? What is it and what's your concern about buying it on-line?
Answer to Question 1:
I'm am indifferent. Sometimes I shop online for convenience.
In my experience however, getting my products and or purchases and the best price possible and at the best quality possible prevails over convenience as sometimes, people courier orders which are completely different from what was requested.
Answer to Question 2:
Of course, I could purchase books, data, and other products whose quality and quantity cannot be manipulated in anyway.
Answer to Question 3 & 4:
I would never purchase cooked food online.
I once purchased grilled fish online only to discover that it was not properly cooked on the inside. The interior of the fish was raw with blood in it. It was disgusting.
Cheers!
Skinner Company began business on June 30, 2018. At that time, it issued 18,000 shares of $50 par value, 6% cumulative preferred stock and 90,000 shares of $10 par value common stock. Through the end of 2020, there has been no change in the number of preferred and common shares outstanding. a. Assume that Skinner declared and paid cash dividends of $63,000 in 2018, $0 in 2019, and $378,000 in 2020. Compute the total cash dividends and the dividends per share paid to each class of stock in 2018, 2019, and 2020
Answer:
2018
Preferred Dividend = $54,000
Common Stockholders = $9,000
2019
Preferred Dividend arrears =$54,000
Common Stockholders = $0
2020
Preferred Dividend = $54,000
Common Stockholders = $270,000
Explanation:
Preferred stockholders has an advantage that they are paid first when there is any dividend is announced. The residual dividend will be divided into the common stockholders. Any prior years due dividend and current years dividend associated with preferred share will be paid first.
As per given data
Preferred shares = 18,000 x $50 = $900,000
Preferred Dividend = $900,000 x 6% = $54,000
2018
Dividend Declared = $63,000
Dividend Allocated to Common Stockholders = Dividend Declared - Preferred Dividend = $63,000 - $54,000 = $9,000
2019
Dividend Declared = $0
Preferred Dividend Arrears = $54,000
2020
Dividend Declared = $378,000
Preferred Dividend Arrears = $54,000
Dividend Allocated to Common Stockholders = Dividend Declared - Preferred Dividend - Preferred Dividend Arrears = $378,000 - $54,000 - $54,000 = $270,000
For example, the sticky-price theory asserts that the output prices of some goods and services adjust slowly to changes in the price level. Suppose firms announce the prices for their products in advance, based on an expected price level of 100 for the coming year. Many of the firms sell their goods through catalogs and face high costs of reprinting if they change prices. The actual price level turns out to be 90. Faced with high menu costs, the firms that rely on catalog sales choose not to adjust their prices. Sales from catalogs will _______(Remain the same/fall/rise), and firms that rely on catalogs will respond by _______ (Increasing/Reducing) the quantity of output they supply. If enough firms face high costs of adjusting prices, the unexpected decrease in the price level causes the quantity of output supplied to ______ (Fall below/Rise above) the natural rate of output in the short run.
Answer:
1. Fall
2. Reducing
3. Fall Below
Explanation:
1. FALL. Due to the Menu Costs (costs to suppliers of having to constantly update prices) of inflation being too high for the Catalogue sellers. They leave the prices where they are at 100. Prices have fallen to 90 though so people will therefore buy less from catalogues as they will be considered more expensive.
2. REDUCING. Firms dealing with Catalogues will respond by reducing output. The more output they supply, the more variable costs they deal with. Seeing as their Demand has fallen leading to a reduction in profitability, they will scale back operations to try to spend less and also because less people are buying output.
3. Fall Below. The Quantity of output supplied was dependant on a price level of 100. That was where the natural rate was. Now as prices have fallen and quantity supplied have gone with them, the effect would be a fall Below the Natural Output Level.
If you need any clarification do react or comment.
On July 1, 2019, Pharoah Company purchased new equipment for $80,000. Its estimated useful life was 8 years with a $16,000 salvage value. On January 1, 2022, before making its depreciation entry for 2022, the company estimated the remaining useful life to be 10 years beyond December 31, 2022. The new salvage value is estimated to be $5,000. (a) Correct answer iconYour answer is correct. Prepare the journal entry to record depreciation on December 31, 2019.
Final answer:
The straight-line depreciation for Pharoah Company's equipment acquired on July 1, 2019, for the year ending December 31, 2019, is $8,000. This is recorded with a debit to Depreciation Expense and a credit to Accumulated Depreciation - Equipment.
Explanation:
To calculate depreciation for the equipment purchased by Pharoah Company, we will use the straight-line method. Initially, the equipment had a useful life of 8 years and a salvage value of $16,000. The straight-line depreciation expense can be calculated using the initial cost minus the salvage value, divided by the useful life:
Initial Depreciation Expense = (Cost - Salvage Value) / Useful Life
= ($80,000 - $16,000) / 8 years
= $64,000 / 8 years
= $8,000 per year
The journal entry to record depreciation on December 31, 2019, would be:
This entry represents the first year of depreciation for the equipment.
Final answer:
The depreciation expense for Pharoah Company for the year ending on December 31, 2019, is $4,000, calculated using the straight-line method on a prorated basis. The necessary journal entry would include a debit to Depreciation Expense and a credit to Accumulated Depreciation - Equipment for this amount.
Explanation:
To prepare the journal entry to record depreciation on December 31, 2019, for Pharoah Company, we first need to calculate the depreciation expense for the year using the straight-line method. The depreciation expense is calculated by subtracting the salvage value from the cost of the equipment and then dividing by the useful life of the equipment.
The initial cost of the equipment is $80,000 and the initial salvage value is $16,000, leaving a depreciable base of $64,000. The useful life of the equipment was 8 years. So the annual depreciation expense is calculated as ($80,000 - $16,000) / 8 = $8,000.
Since the equipment was purchased on July 1, 2019, only half of the year's depreciation applies for 2019. Therefore, for 2019, the depreciation expense is $8,000 / 2 = $4,000.
The journal entry dated December 31, 2019, would be:
Debit Depreciation Expense: $4,000
Credit Accumulated Depreciation - Equipment: $4,000
This entry reflects the decrease in value for half a year's use of the new equipment.
Analysis of an income statement, balance sheet, and additional information from the accounting records of Gadgets, Inc., reveals the following items. Required:
1. Purchase of patent
2. Depreciation expanse
3. Decrease in account receivable
4. Increase in inventory
5. purchase of equipment
Indicate on which section of statement of the cash flow each of the item shoul be reported: operating activities (indirect method), investing activities, financing activities, or a separate noncash activities note.
Answer and Explanation:
There are three categories of cash flow statement activities which are described below:
1. Operating activities: This involves all transactions that after net income impact the working capital. It will subtract the rise in current assets and a reduction in current liabilities, while adding the decline in current assets and a rise in current liabilities.
This will change those changes in working capital. For addition, the depreciation expenses are applied to the net profit and the loss on the selling of assets is added, while the gain on the sale of assets is deducted
2. Investing activities: it tracks operations that involve purchasing and selling long-term properties. Purchase is cash outflow while selling is cash inflow
3. Financing operations: it tracks transactions that have an effect on long-term debt and equity balance of shareholders. Share issue is a cash inflow while redemption and dividend are cash outflows.
Based on this, the classification are as follows
1. Purchase of patent = Investing activities
2. Depreciation expanse = Operating activities
3. Decrease in account receivable = Operating activities
4. Increase in inventory = Operating activities
5. purchase of equipment = Investing activities
If these transactions are held in cash
Assume that Product Z is made of two units of A and three units of B. A is made of three units of C and four of D. D is made of two units of E Lead times for purchase or fabrication of each unit to final assembly are: Z takes two weeks; A, B, C, and D take one week each; and E takes three weeks. Sixty eight units of Product Z are required in Period 10. (Assume that there is currently no inventory on hand of any of these items.) b. Develop an MRP planning schedule showing gross and net requirements and order release and order receipt dates.
Answer and explanation:
a). The product structure tree is as given in the attached image 1
Z
A B
C D
E
b) The MRP schedule are also attached in the subsequent images
An MRP schedule for Product Z requires backward calculation from the due date, considering lead times of Z, A, B, C, D, and E to determine when each component needs to be ordered or manufactured. E needs to be ordered by Period 4, components of A by Period 7, and the assembly of Product Z starts by Period 8.
Explanation:To develop an MRP (Material Requirements Planning) schedule for Product Z, given the consumption rates and lead times for each component and sub-component, we must work backward from the due date for Product Z. The lead times indicate how long before the due date each component and sub-component must be ordered or manufactured to ensure timely completion.
Product Z requires two units of A and three units of B.Component A is composed of three units of C and four of D.Component D requires two units of E for completion.Now, considering the lead times:
Product Z takes two weeks to assemble.Components A, B, C, and D each take one week.Component E takes three weeks.Since we need 68 units of Product Z by Period 10, we must start assembling them by Period 8 (taking into account the two-week assembly time for Z). Therefore, we need all units of A and B at the latest by Period 8. The components of A (C and D) thus must be ordered by Period 7, and since D is made of E which takes three weeks, we need to order E by Period 4.
The MRP schedule will show the gross and net requirements for each component by period, as well as the order release and receipt dates to meet the demand for 68 units of Product Z by Period 10. This includes the calculation of quantities required, considering no initial inventory is on hand.