Answer:
D. $2.67
Explanation:
On the high-low method we compare the diference between the highest level and lowest level of activity.
highest 500 dogs 3,600 (fixed + variable cost)
less
lowest 200 dogs 2,800 (fixed + variable cost)
300 dogs 800 variable cost
800/300 = variable cost per dog = 2.6666667 = (2 + 2/3) variable cost of water bill
800 x (2 + 2/3) + fixed cost = 3,600
2133,3333 + fixed cost = 3600
fixed cost = 3,600 - 2,133.33 = 1,466.66667
The variable cost per dog is calculated by finding the difference in total cost between the two given months, then dividing that by the difference in the number of dogs washed. The answer is $2.67 per dog.
Explanation:To calculate the variable cost per unit, we first need to find the difference in total cost then divide by the difference in units. The total cost difference between May and November is $3600 - $2800 = $800. Now, the difference in the number of dogs washed in May and November is 500 dogs - 200 dogs = 300 dogs. The variable cost is therefore $800 / 300 dogs = $2.67 per dog. Hence, the correct answer is D. $2.67.
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Measuring employment, unemployment, and labor force participationFor each answer the choices are Employed, Unemployed, Not in the labor force or Not in adult population
"Felix is a 27-year-old professional tennis player. When he's not competing, he works as a coach at a local tennis club.""Yvette is a famous novelist. She is spending the summer at her lake house in upstate New York, doing a little writing each day, but mostly spending her time gardening and reading.""Frances is a 37-year-old professional basketball player. She finished her last season as a player three weeks ago, and is currently interviewing for a coaching position.""Jamal is a 78-year-old retired professor. He enjoys volunteering at the local public library.""Shen is a 28-year-old who lost his job as an associate produdcer for a radio station. After spending a few weeks out of work and interviewing for several other positions, he gave up on his job search a few months ago and has decided to go back to grad school."
Answer:
Felix- Employed, Yvette- Employed, Frances- unemployed, Jamal- not in labor force, Shen- not in labor force
Explanation:
People who have a job and are currently working are considered employed. Those who don't have a job but are looking for one are unemployed. Adults who are not working and looking for jobs and those who have retired are not in the labor force. Children below 16 are not in adult population.
Felix is employed as he is working as a coach.
Yvette is working on her novel so she will be considered employed.
Frances does not have a job and is looking for one, so he is unemployed.
Jamal is retired so he is no longer in the labor force.
Shen will not be in the labor force as he is no longer looking for work.
Bradbeer Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 17,500 hours. At the end of the year, actual direct labor-hours for the year were 16,000 hours, the actual manufacturing overhead for the year was $233,000, and manufacturing overhead for the year was underapplied by $15,400. The estimated manufacturing overhead at the beginning of the year used in the predetermined overhead rate must have been:
Answer:
238,000 expected overhead
Explanation:
actual overhead - applied overhead = under if >0 or over if <0
233,000 - applied overhead = 15,400
233,000 - 15,400 = 217,600 applpied overhead
actual hours x rate = applied overhead
16,000 x rate = 217,600
rate = 13.6
expected overhead/cost driver = rate
expected overhead/ 17,500 = 13.6
13.6 x 17,500 = expected overhead
238,000 expected overhead
Final answer:
The estimated manufacturing overhead at the beginning of the year used in the predetermined overhead rate for Bradbeer Corporation was $248,400, calculated by adding the actual manufacturing overhead of $233,000 and the underapplied overhead of $15,400.
Explanation:
The estimated manufacturing overhead at the beginning of the year that was used in the predetermined overhead rate for Bradbeer Corporation can be calculated by adjusting the actual manufacturing overhead for the amount of overhead that was underapplied during the year. We are told that manufacturing overhead was underapplied by $15,400, and the actual manufacturing overhead for the year was $233,000. To find the estimated manufacturing overhead used at the beginning of the year, we need to add the underapplied overhead to the actual overhead, because underapplied means that the estimated overhead was less than the actual overhead incurred.
The calculation is as follows:
Estimated manufacturing overhead = Actual manufacturing overhead + Underapplied overhead
Estimated manufacturing overhead = $233,000 + $15,400
Estimated manufacturing overhead = $248,400
Bond Valuation with Semi-Annual Payments: Renfro Rentals has issued bonds that have a 10% coupon rate, payable semiannually. The bonds mature in 8 years, have a face value of $1,000, and a yield to maturity of 8.5%. What is the price of the bonds?
Answer:
The current Price of the bond will be 1,006.20
Explanation:
We have to calculate the present value of the bonds cash flows at a 8.5% rate
Present value ofthe interest service:
[tex]C * \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
[tex]100 * \frac{1-(1+.085)^{-10} }{0.085} = PV\\[/tex]
PV = $563.9183
Present Value of the principal
[tex]\frac{Principal}{(1 + rate)^{time} } = PV[/tex]
[tex]\frac{1,000}{(1 + 0.85)^{10} } = PV[/tex]
PV = $422.2854
Now we sum both concepts
422.2854 + 563.9183 = 1006.2037 = 1,006.20
Final answer:
To calculate the price of bonds with semi-annual payments, determine the semi-annual interest payment, find the present value of all cash flows, and discount them using the yield to maturity.
Explanation:
Bond Valuation Calculation:
Calculate the semi-annual interest payment: $1,000 face value * 10% coupon rate / 2 = $50Calculate the present value of the bond's total cash flows: $50 semi-annual payments for 16 periods and the $1,000 face value at the endDiscount these cash flows using the yield to maturity of 8.5% and sum them to find the price of the bondsWhich of the following government actions would increase the supply of cars in the United States?a. the establishment of an excise tax on carsb. an end to subsidies to automakersc. the removal of car mileage regulationsd. the establishment of quotas on imported cars
The removal of car mileage regulations could potentially increase the supply of cars in the United States. This is because these regulations impose additional costs and restrictions on car manufacturers, limiting their production capacity. However, regulatory frameworks should balance economic growth with safety and environmental sustainability. Option c.
Which of the following government actions would increase the supply of cars in the United States? By looking at the options, we can deduce that The removal of car mileage regulations would be the most likely to lead to an increase in the supply of cars.
Why so? Car mileage regulations could potentially impose additional costs and restrictions on car manufacturers which may limit their production capacity. Hence, by removing these regulations, car manufacturers may have more latitude to produce more cars, thereby increasing supply. This logic can be applied to other industries as well, for instance, if the price of steel decreases, producing a car becomes less expensive, leading to a higher quantity supplied, as demonstrated in the references provided.
However, it is equally important to note that while removal of regulations may increase supply, it should not compromise on aspects such as safety and environmental sustainability. Regulatory frameworks are there to ensure a balance between economic growth and public good.
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Coronado Industries sells two types of computer hard drives. The sales mix is 30% (Q-Drive) and 70% (Q-Drive Plus). Q-Drive has variable costs per unit of $120 and a selling price of $180. Q-Drive Plus has variable costs per unit of $135 and a selling price of $225. Coronado’s fixed costs are $1255500. How many units of Q-Drive would be sold at the break-even point?
Answer:
Break even units of Q-Drive = 4,650 units
Explanation:
To find break-even in sales ratio we have 3 units of Q Drive and 7 units of Q Plus Drive.
Calculating contribution per unit = Sales - Variable cost
Q Drive = $180 - $120 = $60
Q plus drive = $225 - $135 = $90
Contribution per sales mix = 3 [tex]\times[/tex] $60 + 7 [tex]\times[/tex] $90
= $180 + $630 = $810
Break even point in units = Fixed cost/ contribution per unit
Here firstly we will calculate contribution per sales mix = $1,255,500/$810 = 1,550 sales mix, as each sales mix has 3 units of Q-Drive, we have
Break even units of Q-Drive
Therefore units of Q-Drive = 1,550 [tex]\times[/tex] 3 = 4,650 units
Final answer:
To determine the break-even point for Q-Drive units, the weighted average contribution margin is calculated using the sales mix and contribution margins for both products. The total fixed costs are then divided by this average to find the total break-even units, which is followed by calculating 30% of that total to find the Q-Drive break-even units. Coronado Industries must sell 4,650 units of Q-Drive at the break-even point.
Explanation:
To determine how many units of Q-Drive would be sold at the break-even point, we first need to calculate the weighted average contribution margin. Here's the step-by-step explanation:
First, calculate the contribution margin per unit for each product - this is the selling price minus the variable cost.
For Q-Drive: $180 - $120 = $60 contribution margin per unit.
For Q-Drive Plus: $225 - $135 = $90 contribution margin per unit.
Next, determine the weighted average contribution margin using the sales mix percentages.
Weighted average contribution margin = (30% × $60) + (70% × $90)
Weighted average contribution margin = $18 + $63 = $81
Finally, divide the total fixed costs by the weighted average contribution margin to find the break-even point in units.
Break-even point = $1,255,500 / $81 = 15,500 total units
However, we want to find only the Q-Drive units, not the total. Since Q-Drive represents 30% of the sales mix, we calculate 30% of the total break-even units.
Q-Drive break-even units = 30% of 15,500 = 0.30 × 15,500 = 4,650 units.
To break even, Coronado Industries must sell 4,650 units of Q-Drive.
Craigmont uses the allowance method to account for uncollectible accounts. Its year-end unadjusted trial balance shows Accounts Receivable of $146,500, allowance for doubtful accounts of $1,085 (credit) and sales of $1,135,000. If uncollectible accounts are estimated to be 5% of accounts receivable, what is the amount of the bad debts expense adjusting entry?
Answer:
bad debt expense 6,240 debit
allowance for uncollectible accounts 6,240 credit
Explanation:
uncolelctible accounts balance 5% of AR
ending balance 5% of 146,500 = 7,325
allowance balance credit (1.085)
Adjustment 6,240
Notice it state the estimated balance of the uncolelctibles, so the result is the desired ending balance.
Before starting Pedigree Pajamas, the owner of the company realized that he was treating his dog as if it were a child and that a lot of his friends did the same thing. So in what he perceived as a dog-friendly environment, he launched a line of doggie pajamas—available from size 6 for Chihuahuas to size 30 for Great Danes. The ads for Pedigree Pajamas had to convince people that dogs slept better in pajamas. A product that has to create primary demand is more than likely in the _____ stage of the product life cycle.
A. pioneering
B. introductory
C. maturity
D. growth
E. revitalization
Increased demand for product A increases the demand for resources used to produce product A. What is the best explanation for the increase in the demand for resources?A. The theory of derived demand is working.B. Product A is in an expanding industry.C. The theory of the "invisible hand" is working.D. The demand for product A is highly elastic.
Answer:
A. The theory of derived demand is working
Explanation:
The derived demand is the increase in the demand of a certain good explaing it through another good.
It means the derived good is acquire for the prupose of being use to produce the second good.
This sucess on raw materials of certain goods.
Johnny has 15 toys with a total value of $125. If some of Johnny's toys are worth $5 and the others are worth $10, how many toys does Johnny have that are worth $5?
Answer:
5TOYS ARE WORTH 15
10TOYS ARE WORTH 5
Explanation:
We have to set up the equation system
we know that both kind of toys total 15 and their monetary value is 225
[tex]x + y = 15 \\ 15x + 5y = 125[/tex]
then we clear y in the first equation and replace it in the second equation
[tex]y = 15 - x \\ 15x + 5(15 - x) = 125[/tex]
we solve for x in the second:
[tex]15x - 5x = 125 -5 \times 15 \\x = 50 \div 10 = 5[/tex]
Next we solve for y in the first equation
[tex]y = 15 - x= 15 - 5 = 10[/tex]
What is inventory turnover? Explain the effect of a high inventory turnover during the Christmas shopping season.
Answer:
[tex]\frac{Sales}{Average Inventory} = $Inventory Turnover[/tex]
where:
[tex]$$Average Inventory=(Beginning Inventory + Ending Inventory)/2[/tex]
The inventory turnover represent how many times the company sales their inventory during the year or period of analysis.
A high inventory turnover during Christmas shopping seasons mean sales are higher. The inventory in the store is sold more times during this time.
Inventory turnover is a financial ratio that measures the number of times a company sells and replaces its inventory during a specific period. A high inventory turnover during the Christmas shopping season indicates efficient sales and can bring several benefits to the company.
Explanation:Inventory turnover is a financial ratio that measures the number of times a company sells and replaces its inventory during a specific period. It is calculated by dividing the cost of goods sold (COGS) by the average inventory. A high inventory turnover during the Christmas shopping season means that a company is selling its inventory quickly, which indicates efficient sales. This can be beneficial as it reduces holding costs, minimizes the risk of obsolete inventory, and generates cash flow to reinvest in new inventory or other business activities.
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At August 31, Coffman Company has this bank information: cash balance per bank $6,450; outstanding checks $2,762; deposits in transit $1,700; and a bank service charge $20. Determine the adjusted cash balance per bank at August 31, 2018.
Answer:
The adjusted cash balance per bank at August 31, 2018 is $5,388
Explanation:
Given that,
Cash balance per bank - $6,450
Outstanding checks - $2,762
Deposits in transit - $1,700
Bank service charge - $20
By using this above information, we can calculate the adjusted cash balance per bank which is shown below.
Cash balance per bank - $6,450
Add: Deposits in transit - $1,700
Less : Outstanding checks - $2,762
Adjusted cash balance per bank - $5,388
Thus, The adjusted cash balance per bank at August 31, 2018 is $5,388
Note: The deposit would increase the cash balance so it would be added whereas the outstanding check ( not cleared) would decrease the cash balance so it would be deducted
Final answer:
The adjusted cash balance per bank for Coffman Company on August 31, 2018, is $5,368, after accounting for outstanding checks, deposits in transit, and bank service charges.
Explanation:
To determine the adjusted cash balance per bank, we need to make adjustments to the cash balance per bank statement by accounting for outstanding checks and deposits in transit, as well as subtracting any bank service charges.
The calculation is as follows:
Start with the cash balance per bank: $6,450.Subtract the amount of outstanding checks: $2,762.Add the amount of deposits in transit: $1,700.Subtract any bank service charges: $20.Therefore, the adjusted cash balance per bank at August 31, 2018, is calculated like this:
$6,450 - $2,762 + $1,700 - $20 = $5,368.
This is the adjusted cash balance per bank that would be reported on the company's balance sheet at the end of August 2018.
Milden Company has an exclusive franchise to purchase a product from the manufacturer and distribute it on the retail level. As an aid in planning, the company has decided to start using a contribution format income statement. To have data to prepare such a statement, the company has analyzed its expenses and has developed the following cost formulas: Cost Cost Formula Cost of good sold $27 per unit sold Advertising expense $184,000 per quarter Sales commissions 7% of sales Shipping expense ? Administrative salaries $94,000 per quarter Insurance expense $10,400 per quarter Depreciation expense $64,000 per quarter Management has concluded that shipping expense is a mixed cost, containing both variable and fixed cost elements. Units sold and the related shipping expense over the last eight quarters follow: Quarter Units Sold Shipping Expense Year 1: First 30,000 $ 174,000 Second 32,000 $ 189,000 Third 37,000 $ 231,000 Fourth 33,000 $ 194,000 Year 2: First 31,000 $ 184,000 Second 34,000 $ 199,000 Third 44,400 $ 246,000 Fourth 41,400 $ 222,000
Final answer:
In business financial planning, it is vital to distinguish between variable costs, which vary with sales volume, and fixed costs, which do not change up to a certain point. Depreciation is a fixed cost that is calculated over an asset's lifespan. The breakeven level is where total revenues match the sum of fixed and variable costs.
Explanation:
Understanding Costs in Business
Managing expenses in business is crucial for the financial planning and sustainability of a company. Variable costs fluctuate with the volume of sales, such as cost of raw materials. On the other hand, fixed costs remain unchanged within a certain sales volume range, like the cost of machinery or rent for retail space. For example, if a retail store sells blue jeans, the variable cost is the direct cost per jeans, whereas the fixed cost might include the store's rent.
Depreciation expense is another aspect of business costs, calculated as a fixed cost and spread over the useful life of an asset. For instance, using the straight-line depreciation method, if an office furniture set costs $20,000 with a resale value of $2,500 after 10 years, the annual depreciation expense would be ($20,000
- $2,500) / 10 = $1,750.
Revenue (R) and the number of units sold (Q) directly affect a business's profitability. When calculating breakeven levels, it's essential to consider both fixed and variable costs. The breakeven level is reached when total revenues cover total fixed and variable costs, resulting in no profit or loss. Specifically, a business with a fixed cost of $40,000 and a variable cost of $0.30 per unit would need to sell a sufficient number of units at a price where its unit contribution margin - the difference between the selling price and the variable cost per unit - covers the fixed costs.
The shipping expense has a fixed cost component of $24,000 per quarter and a variable cost component of $5 per unit sold.
To calculate the fixed and variable components of the shipping expense, we can use the high-low method. This method involves using the data from the two quarters with the highest and lowest units sold to determine the variable cost per unit and the fixed cost component.
Select the quarters with the highest and lowest units sold:-
- Highest units sold: 44,400 units with a shipping expense of $246,000
- Lowest units sold: 30,000 units with a shipping expense of $174,000
:-Calculate the variable cost per unit
- Variable cost per unit = (Shipping expense at high point - Shipping expense at low point) / (Units sold at high point - Units sold at low point)
- Variable cost per unit = ($246,000 - $174,000) / (44,400 - 30,000) = $72,000 / 14,400 = $5 per unit
Calculate the fixed cost component:-
- Using the variable cost per unit, we can calculate the total fixed cost at any level of activity. Let's use the data from one of the quarters to find the fixed cost.
- For example, in the first quarter of Year 1 where 30,000 units were sold:
Fixed cost = Total shipping expense - (Variable cost per unit * Units sold)
Fixed cost = $174,000 - ($5 * 30,000) = $174,000 - $150,000 = $24,000
Therefore, the shipping expense has a fixed cost component of $24,000 per quarter and a variable cost component of $5 per unit sold.
Residual income is: A. income beyond the breakeven point determined by the product's lifecycle. B. a percentage of income received by an organization for its participation in a joint venture. C. excess income earned after budgeted income has been achieved. D. the excess of investment center income over the minimum return set by management.
Answer:
The correct option is d) the excess of investment center income over the minimum return set by management
Explanation:
Residual Income is the total amount of net income a firm generates which is in excess of the minimum required rate of return set by the firm and all the cost of capital which was used by the firm in generating the income has been paid off . Residual income is generally used to assess the performance of a business unit or department and even in the capital investment made by the firm.
In 2017, HD had reported a deferred tax asset of $126 million with no valuation allowance. At December 31, 2018, the account balances of HD Services showed a deferred tax asset of $165 million before assessing the need for a valuation allowance and income taxes payable of $98 million. HD determined that it was more likely than not that 30% of the deferred tax asset ultimately would not be realized. HD made no estimated tax payments during 2018. What amount should HD report as income tax expense in its 2018 income statement? (Round your calculations to the nearest whole million.)
Answer: 108.5 million
Explanation: As we know that :-
Total income tax expense in 2018= reduction in deferred tax asset in 2018 + income tax payable in 2018
now computing the above values :
Reduction in deferred tax asset in 2018 = deferred tax asset balance-realizable deferred tax asset
= 126million - (165million*70%)
= 126million - 115.5 million
= 10.5 million
Total income tax expense in 2018= 98 million + 10.5 million
= 108.5 million
Suppose the demand for fish tacos is given by the following equation: Qd = 12 - 2P where Qd is the quantity demanded per week of fish tacos, and P is the price of fish tacos. Suppose further that the supply of fish tacos is: Qs = 1 + 3P where Qs is the quantity supplied per week of fish tacos. What is the equilibrium market price of fish tacos? (Round your answer to 2 decimal places.)
Answer:
Q = 7.6
P= 2.2
Explanation:
[tex]\left \{ {{Qd = 12 - 2P} \atop {Qs = 1 + 3P}} \right.[/tex]
The equilibrium price makes both, supply and demand equal quantity.
we can conclude Qd = Qs
We replace quanty by their price-based expression
12 - 2P = 1 + 3P
And we can solve for price
11 = 5P
2.2 = P
Then we solve for Q
1 + 3 x 2.2 = 7.6
Mark Company’s balance sheet reported total assets of $754,000, which include: cash, $48,000; accounts receivable, $130,000; land, $200,000; inventory, $220,000; short-term notes receivable, $150,000; and prepaid expenses, $6,000. Total liabilities amounted to $408,000, which include: accounts payable, $230,000; short-term notes payable, $10,000; unearned revenue, $8,000; and long-term liabilities, $160,000. Compute Mark’s acid-test ratio. 2.23 1.85 2.00 1.32
Answer:
d) 1.32
Explanation:
The quick ratio uses only the most liquid current assets.
[tex]quick \: ratio = \frac{cash \:and \:cash \:equivalent}{current \:liabilities}[/tex]
cash 48,000
AR 130,000
Short Term receivable 150,000
Total 328,000
Important: Sometimes it is enought by subtracting inventory from current assets
Current liabilities
account payable 230,000
short-term notes payable 10,000
unearned revenue 8,000
Total 248,000
Quick Ratio
[tex]\frac{328,000}{248,000} = 1.322580645 = 1.32[/tex]
Mark Company's acid-test ratio is calculated as the sum of cash, accounts receivable, and short-term notes receivable divided by the current liabilities, which equals 1.32.
To compute Mark's acid-test ratio, we need to consider only the most liquid assets against the current liabilities. The acid-test ratio is calculated by taking the sum of cash, accounts receivable, and short-term notes receivable divided by the total current liabilities. From the given information on Mark Company's balance sheet, we calculate as follows:
Cash: $48,000
Accounts Receivable: $130,000
Short-term Notes Receivable: $150,000
Total Quick Assets: $48,000 + $130,000 + $150,000 = $328,000
Given that total liabilities are $408,000, we need to subtract long-term liabilities to get current liabilities, as the acid-test ratio does not consider long-term liabilities:
Total Liabilities: $408,000
Long-term Liabilities: $160,000
Current Liabilities: $408,000 - $160,000 = $248,000
Now we can compute the acid-test ratio:
Acid-test Ratio = Total Quick Assets / Current Liabilities
Acid-test Ratio = $328,000 / $248,000
The acid-test ratio for Mark Company is 1.32.
Sophia is a manager at a clothing store. Her superiors want to promote her because she is hardworking and responsible. They do not feel the need to constantly check on the store because they know that she is thorough with her work. In the context of personalities, Sophia can be described as being _____.
Answer: Conscientious
Explanation: As per the literal meaning Conscientious means careful. A conscientious employee will be the one who is capable as well as willing to do his or her job respectively.
As per the given case Sophia is well trusted by her employers and is considered as a hardworking and responsible employee. So we can conclude that she is described as Conscientious.
Every summer, Jasmine and Tanya have stayed in a hotel at the same location. The hotel has changed ownership three times and has had two different names during that same period, but Jasmine and Tanya still find it a convenient place to have a real connection with the area they stay in and to meet locals. Jasmine and Tanya’s relationship with the hotel exemplifies how a service provider uses ________ to support its customer retention strategy.
Answer:
Jasmine and Tanya’s relationship with the hotel exemplifies how a service provider uses social bonds to support its customer retention strategy.
Explanation:
A social bond is a form of bond in which the customer builds a bond over a period of time by the continuous usage of it. At the same time, it needs to be noted that such bonds may not provide the fixed rate of return to the investors. The social outcomes achieved performs the function of repaying the investors respectively.
Final answer:
Jasmine and Tanya's continuous patronage of the hotel, despite its changing owners and names, showcases the hotel's use of consistency and reliability in its customer retention strategy, similar to the way loyalty programs work.
Explanation:
Jasmine and Tanya’s relationship with the hotel exemplifies how a service provider uses consistency and reliability to support its customer retention strategy. Despite changes in ownership and name, the hotel's consistent quality and service provide a sense of familiarity and trustworthiness. This consistent experience is crucial for retaining customers, as it reduces the transition costs associated with switching to a new provider. Just like loyalty cards and rewards programs, offering a reliable and consistent service encourages customers to return, by minimizing the perceived benefit of switching to a competitor. This approach is akin to the strategies used by businesses like cell-phone companies, coffee chains, and airlines, which offer various incentives to deter customers from moving to their rivals.
Cost standards for one unit of product no. C77: Direct material 3 pounds at $2.50 per pound $ 7.50 Direct labor 6 hours at $7.30 per hour 43.80 Actual results: Units produced 6,800 units Direct material purchased 26,800 pounds at $2.70 $ 72,360 Direct material used 20,100 pounds at $2.70 54,270 Direct labor 41,300 hours at $7.10 293,230 Assume that the company computes variances at the earliest point in time. The standard hours allowed for the work performed are _________.
Answer:
The standard hours allowed for the work performed are 40,800
Explanation:
In the question we have been told to assume that the company computes variance at the earliest point of time, so it is important to understand what it actually means. When a company is comparing the budgeted amounts that it has set earlier with the actual amounts that have come, this process is called variance, and a company can only do this when the actual amounts have been completed.
For taking out the standard hours allowed we will multiply the total units produced by the set the direct labor hours,
6,800 x 6 = 40,800 dlh,
so therefore the standard hours allowed are 40,800.
You manage a pension fund that will provide retired workers with lifetime annuities. You determine that the payouts of the fund are going to closely resemble level perpetuities of $1 million per year. The interest rate is 10%. You plan to fully fund the obligation using 5-year and 20-year maturity zero-coupon bonds. a. How much market value of each of the zeros will be necessary to fund the plan if you desire an immunized position? (Do not round intermediate calculations. Enter your answers in millions.) b. What must be the face value of each of the two zeros to fund the plan? (Do not round intermediate calculations. Enter your answers in millions rounded to 2 decimal places.)
Final answer:
To fund the plan with an immunized position, you need to calculate the market value of each zero-coupon bond. The market value of the 5-year maturity bond is $620,921.32 and the market value of the 20-year maturity bond is $148,644.31.
Explanation:
To fund the plan with an immunized position, you need to calculate the market value of each zero-coupon bond. Let's start with the 5-year maturity bond. We'll use the formula:
Market value = Face value / (1 + interest rate)years to maturity
For the 5-year bond, the market value will be:
Market value = $1,000,000 / (1 + 0.10)5 = $620,921.32
Next, let's calculate the market value of the 20-year maturity bond:
Market value = $1,000,000 / (1 + 0.10)20 = $148,644.31
Alexander Industries is considering a project that requires an investment in new equipment of $3,200,000, with an additional $160,000 in shipping and installation costs. Alexander estimates that its accounts receivable and inventories need to increase by $640,000 to support the new project, some of which is financed by a $256,000 increase in spontaneous liabilities (accounts payable and accruals). The total cost of Alexander’s new equipment is ________ and consists of the price of the new equipment plus the ______. In contrast, Alexander’s initial investment outlay is __________.
Alexander's new equipment will cost $3,360,000. Their initial investment outlay, which includes the cost of the new equipment, shipping and installation charges, and changes in working capital, is $3,744,000.
Explanation:The total cost of Alexander’s new equipment is $3,360,000 which consists of the price of the new equipment ($3,200,000) plus the shipping and installation costs ($160,000). In contrast, Alexander’s initial investment outlay is $3,744,000. This is calculated by adding the total cost of new equipment to the increase in accounts receivable and inventories ($640,000), then subtracting the increase in spontaneous liabilities ($256,000). Thus, the initial outlay needed to finance the project is more than just the cost of the equipment as it includes additional working capital requirements as well.
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Which of the following are advantages of short-term financing (as compared to long-term financing)?
Loans can be obtained faster.
The interest rate on borrowed funds is generally lower.
Interest costs are relatively stable over time.
Answers a. and b. are both correct.
Answers a., b., and c. are all correct.
Answer:
Answers a. and b. are both correct which shows the advantages of short-term financing (as compared to long-term financing).
Explanation:
The short term financing have includes less compliance, less interest rate, contain lesser amount, speedy transactions ,and lesser time period whereas the long term financing includes more compliance, large amounts, large time period.
Thus, a. and b. are both correct which shows the advantages of short-term financing (as compared to long-term financing)
The advantages of short-term financing compared to long-term financing are faster access to loans, lower interest rates, and stable interest costs over time.
Explanation:The advantages of short-term financing compared to long-term financing are:
Loans can be obtained faster: Short-term financing options such as lines of credit or credit cards can be approved and accessed quickly, allowing businesses to address immediate financial needs.The interest rate on borrowed funds is generally lower: Short-term financing typically comes with lower interest rates compared to long-term financing options such as loans or mortgages. This can save businesses money on interest costs.Interest costs are relatively stable over time: Since short-term financing is typically repaid within a year or less, the interest costs remain relatively stable. This allows businesses to budget and plan their finances more effectively.Garfield Corporation is considering building a new plant in Canada. It predicts sales at the new plant to be 50,000 units at $5.00/unit. Below is a listing of estimated expenses. Category Total Annual Expenses % of Annual Expense that are Fixed Materials $50,000 10% Labor $90,000 20% Overhead $40,000 30% Marketing/Admin $20,000 50% A Canadian firm was contracted to sell the product and will receive a commission of 10% of the sales price. No U.S. home office expenses will be allocated to the new facility. The contribution margin ratio for Garfield Corporation is
Answer:
Contribution Margin Ratio = 0.33
Explanation:
Our first goal:
Calculate the Contribution margin:
[tex]\frac{Contribution Margin}{Sales Revenue} = $Contribution Margin Ratio[/tex]
Sales 50,000 * 5$ = 250,000
Variable Expenses
Materials 50,000 (1-10%) = 45,000
Labor 90,000 (1-20%) = 72,000
Overhead 40,000 (1-30%) = 28,000
M&Admin 20,000 (1-50%) = 10,000
Sales Commision 250,000 5% =12,500
Total Variable Cost = 167,500
Contribution Margin 250,000-167,500 = 82,500
Notice in your table you have the percent of fixed cost per line, so the rest is variable cost.
Now we calculate the CM ratio
[tex]\frac{82,500}{250,000} = 0.33[/tex]
The question involves calculating the contribution margin ratio for Garfield Corporation. To find this, subtract the variable costs from the sales revenue and divide by total sales, yielding a contribution margin ratio of 72% for the new plant.
Explanation:The student is asking about calculating the contribution margin ratio for Garfield Corporation, which is considering building a new plant in Canada. The contribution margin ratio is calculated by subtracting the variable costs from sales and dividing the result by total sales revenue. To begin with, we need to assess the sales revenue which is 50,000 units at $5.00/unit, resulting in $250,000 in total sales. Next, we calculate the variable costs, starting with the materials (10% of $50,000), labor (20% of $90,000), overhead (30% of $40,000), marketing/admin (50% of $20,000), and the sales commission which is 10% of total sales.
Total Variable Costs = (10% of $50,000) + (20% of $90,000) + (30% of $40,000) + (50% of $20,000) + (10% of $250,000 sales).
Total Variable Costs = $5,000 + $18,000 + $12,000 + $10,000 + $25,000.
Total Variable Costs = $70,000.
The contribution margin is thus $250,000 - $70,000 = $180,000, and the contribution margin ratio is $180,000 / $250,000 = 0.72 or 72%.
Dalian Company provides the following information: Price per unit: $20 Variable cost per unit: $8 Fixed costs per month: $15,000 What is the breakeven point in sales dollars? $22,750 $25,000 $18,500 $37,500
Answer:
$25,000
Explanation:
Break even point in dollars = [tex]\frac{Fixed cost}{Contribution Margin}[/tex]
Here contribution margin = Sales - Variable cost = $20- $8 = $12
Contribution margin ratio = $12/$20 = 60%
Break even point in dollars = $15,000/60% = $25,000
Else it can be calculated by using contribution per unit as follows:
BEP = $15,000/$12 = 1,250 units
Value of 1,250 units $20 X 1250 = $25,000
Break Even Point in Sales Dollar = $25,000
A bank has $132,000 in excess reserves and the required reserve ratio is 11 percent. This means the bank could have __________ in checkable deposit liabilities and __________ in (total) reserves.
Given the bank's excess reserves of $132,000 and a required reserve ratio of 11 percent, the bank could have approximately $1,200,000 in checkable deposit liabilities and $132,000 in total reserves.
Explanation:Your question is asking how much checkable deposits and total reserves this bank could have, given its $132,000 in excess reserves and a required reserve ratio of 11 percent. Excess reserves are the reserves held by the bank over and above the minimum required by the Federal Reserve, known as the reserve requirement. Given that excess reserves are additional to required reserves, to find the checkable deposit liabilities, we need to first calculate the total reserves (excess reserves + required reserves).
We can use the formula: Total Reserves = Required Reserves + Excess Reserves, and Required Reserves = Checkable Deposits * Reserve Requirement. From these formulas, we can deduce that Checkable Deposits = Total Reserves / Reserve Requirement.
To answer your question, since the reserve requirement is 11% or 0.11, and the total reserves are $132,000 (assuming that all the reserves are excess, and therefore, there is no requirement), the bank could have a total of ($132,000 / 0.11), which equals approximately $1,200,000 in checkable deposit liabilities, and its total reserves would be $132,000.
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At some point, everyone will have to deliver bad news. The bad feelings associated with this type of message can be alleviated if the receiver knows the reason for the bad news, feels the news is revealed sensitively, thinks the matter is treated seriously, and believes that the decision is fair. When applying these strategies, make sure to follow the writing process and determine whether to use a direct or an indirect pattern in your message. Determine what strategy should be used in the following situation. You are going to deliver your product 24 hours late this month.
Answer: There are several factors that need to be considered while delivering the bad news some of which are careful explanation, deadlines for change, direct message and showing of concern.
Explanation: The above points can be explained as follows :-
a. An honest explanation should be given to the receiver behind the delay in product and reasons should be mentioned .
b. The deadlines and action decided to be taken for not repeating such delay in future again should also be explained.
c. The message should be delivered in plain language that could be easily understood.
d. concern and apology should be shown while delivering the message to whom the delivery is to be made.
Effectively delivering unfavorable news of a product delay involves combining several strategies. These include a problem-and-solution approach, choice of tone relating to the audience, timing, and the use of an indirect message pattern. Choosing the appropriate strategy can help maintain your client relationship and manage their expectations.
Explanation:To effectively deliver the unfavorable news of product delay, selecting an appropriate strategy based on sensitivity and timing is essential. It should be directed towards maintaining the relationship with the client while managing their expectations.
Firstly, adopting a problem-and-solution approach can be helpful. You would identify the issue (the 24-hour delay) and then provide a solution (what steps are being taken to avoid future delays, expedite the current order, or offer compensation for this delay).
Prior to delivering the news, consider the tone relating to your audience. A professional, honest, and apologetic tone can make the audience feel respected and valued. They are more likely to react positively to your message if it is subtle yet transparent.
The timing of your message is critical as well. As noted, if there's a delay after the first message before the receiver needs to make a decision, the last point presented is more persuasive. In this case, it would be better to first provide some positive information about the product or your company before telling them about the delay.
Handling this situation sensitively using the indirect pattern, illustrated with facts and rationale, boosts your credibility, promotes honesty, and can alleviate disappointment. Summarizing all, direct, honest communication implemented with sensitivity and timely can guide to effectively managing an unfavorable situation.
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Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next month’s budget appear below: Selling price per unit $ 27 Variable expense per unit $ 13 Fixed expense per month $ 12,460 Unit sales per month 1,040 Required: 1. What is the company’s margin of safety?
Answer:
Margin of safety in units 1040 - 890 = 150
Margin of safety in dollars 28,080 - 24,030 = 4050
Margin of safety as % of sales 4050 / 28,080 = 14.4231%
Explanation:
[tex]Sales \: Revenue - Variable \: Cost = Contribution \: Margin[/tex]
27 - 13 = 14
[tex]\frac{Fixed\:Cost}{Contribution \:Margin} = Break\: Even\: Point_{units}[/tex]
12460 / 14 = 890
[tex]BEP_{units} \times unit \: sales \: price = BEP_{dolars}[/tex]
890 * 27 = 24,030
[tex]units sold \times unit \: sales \: price = Sales Revenue[/tex]
1,040 * 27 = 28,080
[tex]units \:sold - BEP_{units[/tex]
Margin of safety in units 1040 - 890 = 150
[tex]current \:sales - BEP_{USD}[/tex]
Margin of safety in dollars 28,080 - 24,030 = 4050
[tex]\frac{current \:sales - BEP_{USD}}{current \:sales} \times 100 = margin \: of \: safety[/tex]
Margin of safety as % of sales 4050 / 28,080 = 14.4231%
The margin of safety for Molander Corporation is 85.32%.
Explanation:To calculate the margin of safety for Molander Corporation, we need to find the difference between the budgeted sales and the breakeven sales. The breakeven sales can be calculated by dividing the fixed expenses by the contribution margin ratio, where the contribution margin ratio is the difference between the selling price per unit and the variable expense per unit divided by the selling price per unit. In this case, the fixed expenses are $12,460 and the contribution margin ratio is $27 - $13 / $27 = 0.5185. Therefore, the breakeven sales are $12,460 / 0.5185 = $24,008.86.
The margin of safety is then calculated by subtracting the breakeven sales from the budgeted sales and dividing the result by the budgeted sales. In this case, the budgeted sales are 1,040 units * $27 = $28,080. The margin of safety is ($28,080 - $24,008.86) / $28,080 = 0.8532, or 85.32%.
Elbert Company classifies its selling and administrative expense budget into variable and fixed components. Variable expenses are expected to be $25,220 in the first quarter, and $5,190 increments are expected in the remaining quarters of 2017. Fixed expenses are expected to be $40,680 in each quarter. Prepare the selling and administrative expense budget by quarters and in total for 2017.
Answer:
Explanation:
Variable Expense : The variable expense is that expense which is change when production level changes. Example - Direct material, labor , overhead, etc.
Fixed Expense : The fixed expense remains the same whether production level increase or decrease. Example - Rent, depreciation, etc.
As in the given equation, the fixed expense remain same in all four quarters. But the variable expenses changes.
In first quarter, it is $25,220 after that it increase by $5190 for respective quarters
The calculation is given in attachment with formulas and computation.
The display is given below:
Final answer:
Elbert Company's selling and administrative expense budget for 2017 includes variable expenses that start at $25,220 in Q1 and increase by $5,190 per quarter, reaching $40,790 in Q4. Fixed expenses are consistent at $40,680 each quarter. The total budget for the year is $294,740, with $132,020 in variable expenses and $162,720 in fixed expenses.
Explanation:
Preparing the Selling and Administrative Expense Budget for Elbert Company
The task is to create a selling and administrative expense budget for Elbert Company for the year 2017. The company's expenses are classified into variable and fixed components. Variable expenses start at $25,220 for the first quarter and increase by $5,190 each subsequent quarter. Fixed expenses are constant at $40,680 each quarter.
Determine the quarterly variable expenses:
Q1: $25,220
Q2: $25,220 + $5,190 = $30,410
Q3: $30,410 + $5,190 = $35,600
Q4: $35,600 + $5,190 = $40,790
Determine the total variable expenses for the year by adding all quarters: $25,220 + $30,410 + $35,600 + $40,790 = $132,020.
Add the fixed expenses for each quarter ($40,680) to get the total fixed expenses for the year: $40,680 x 4 = $162,720.
Combine the total variable and fixed expenses to get the total selling and administrative expense budget for the year: $132,020 (variable) + $162,720 (fixed) = $294,740.
The complete selling and administrative expense budget for Elbert Company for 2017 is $294,740, with $132,020 in variable expenses and $162,720 in fixed expenses.
What does 'charge-off as bad debt' mean?
Answer: Charge off as bad debt means that the remaining amount is considers as a bad debt but it doesn't mean that you no longer owe to the amount that is not being repaid.
Explanation:
The expression "charge off" implies that the original lender has given up on being repaid by the original terms of the credit. It believes the rest of the balance to be bad debt, yet that doesn't mean you never again owe the sum that has not been repaid.
After a record is charged off by the original creditor it is typically sent to an accumulation organization. The collection agency will at that point taking an attempt to recover the rest of of the amount with additional interest and fees.
Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of €1,000, 20 years to maturity, and a coupon rate of 7.8 percent paid annually. what is the current price of the bond?
Answer:
Market Price $985.01
Explanation:
We have to convert the US semiannually rate to annually.
[tex](1 + 0.078/2)^{2} -1 = 0.079521[/tex]
Now this is the annual rate spected for a similar US Bonds
So we are going to calculate the present value using this rate.
Present value of an annuity of 78 for 20 years at 7.9521%
[tex]C * \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
[tex]78 * \frac{1-(1+0.079521)^{-20} }{0.079521} = PV\\[/tex]
PV = 768.55
And we need to add the present value ofthe 1,000 euros at this rate
[tex]\frac{Principal}{(1 + rate)^{time} = Present Value}[/tex]
[tex]\frac{1,000}{(1 + 0.079521)^{20} = Present Value }[/tex]
Present Value = 216.4602211
Adding those two values together
$985.01
The reasoning behind this is that an american investor will prefer at equal price an US bonds because it compounds interest twice a year over the German Bonds.
To determine the current price of a bond, we can use the present value formula to calculate the present value of future cash flows.
Explanation:To determine the current price of the bond, we need to calculate the present value of the future cash flows. The bond has a par value of €1,000, a maturity of 20 years, and a coupon rate of 7.8% paid annually. We can use the present value formula to calculate the price of the bond:
Price = Coupon Payment * (1 - (1 + Interest Rate)^-Number of Periods) / Interest Rate + Par Value / (1 + Interest Rate)^Number of Periods
Plugging in the values, we get:
Price = €78 * (1 - (1 + 0.078)^-20) / 0.078 + €1,000 / (1 + 0.078)^20
Solving this equation will give us the current price of the bond.