Answer:
The store rent should be allocated to Department 2 is $18,430
Explanation:
For calculating the allocation of rent in Department 2. Following computation is required which is shown below:
1. First we have to calculate Total floor space Square feet value which is equals to
= Department 1 + Department 2 + Department 3
= 24,000 + 11,800 + 34,000
= 69,800
Thus, the total floor space is 69,800
Now calculate the per square rent which = total rent ÷ total square feet
= $109,000 ÷ 69,800
= 1.56 per square rent
After that, multiply the per square rent with department 2 floor space
= 11,800 × 1.56
= $18,430
Thus, the store rent should be allocated to Department 2 is $18,430
Penny, Inc. employs a process costing system. Direct materials are added at the beginning of the process. Here is information about July's activities: On July 1: Beginning inventories 850 units, 60% complete Direct materials cost $5,000 Conversion costs $4,000 During July: Number of units started 15,000 Direct materials added $155,000 Conversion costs added $83,520 On July 31: Ending inventories 1,600 units, 40% complete Using the FIFO method, the number of equivalent units of conversion costs was:
The number of equivalent units of conversion costs for Penny, Inc. for the month of July using the FIFO method is 14,380 units.
To calculate the number of equivalent units of conversion costs using the FIFO method, we first need to account for the work needed to complete the beginning inventory and add the work done on the units started and completed during the month. Then we calculate the equivalent units for the ending inventory.
The beginning inventory had 850 units, 60% complete. This means that they were 40% incomplete regarding conversion costs at the start of the month. To finish these units, Penny, Inc. would need to complete the remaining 40% of the conversion work on the 850 units which is 850 units * 40% = 340 equivalent units of conversion costs for the beginning inventory.
Since 15,000 units were started and the ending inventory was 1,600 units (40% complete), then 15,000 units - 1,600 units = 13,400 units were fully completed in July. So, we have 13,400 units * 100% = 13,400 equivalent units for the units started and completed during the month.
For the ending inventory, which is 1,600 units at 40% completion, we calculate the equivalent units as follows: 1,600 units * 40% = 640 equivalent units of conversion costs.
Adding these up gives us: 340 (completion of beginning inventory) + 13,400 (started and completed) + 640 (ending inventory) = 14,380 equivalent units of conversion costs for the month of July.
Which of the following is NOT an activity used in the external environmental analysis process?a. Scanningb. Decryptingc. Monitoringd. Assessing
Answer: Option B
Explanation: Studying the external factors that influence the operations of the organization is called external environment analysis.
A. Scanning in external activity refers to identifying the threats and opportunities in the environment.
C. Monitoring refers to keeping track of external factors that can affect operations.
D. Assessing involves analyzing the current trends in various kinds of relevant factors such as political, economical etc.
.
Decrypting in simple words means decoding a data that has been saved in a code language. This is not a part of external environment analysis.
Decrypting is not an activity used in the external environmental analysis process; instead, scanning, monitoring, and assessing are the typical activities involved.
The external environmental analysis typically involves scanning the environment to identify early signals of potential changes in the environment, monitoring those changes over time to assess their impact, and assessing to determine the timing and importance of the changes for the organization's strategies and their management.
The cost accountant for Kenner Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning May 1 would be $140,000, and total direct labor costs would be $100,000. During May, the actual direct labor cost totaled $13,500, and factory overhead cost incurred totaled $19,200. Required: What is the predetermined factory overhead rate based on direct labor cost?
Answer:
The 140% is the predetermined factory overhead rate based on direct labor cost.
Explanation:
The given information is shown below:
Total factory overhead cost - $140,000
Total direct labor costs - $100,000
Actual direct labor cost - $13,500
Factory overhead cost - $19,200
By using these information, it is easy to compute predetermined factory overhead rate which is based on direct labor cost. The formula is shown below:
= Total factory overhead cost ÷ Total factory overhead cost
= ($140,000 ÷ $100,000) × 100
= 1.4 × 100
= 140%
Other cost is irrelevant and thus not be considered while computing predetermined factory overhead rate.
Hence, the 140% is the predetermined factory overhead rate based on direct labor cost.
Dominic is the founder of an innovative "impromptu catering" business that provides elegant, healthy party food and decorations on less than 24 hours' notice. The company has grown by over 150 percent in the past year. Dominic credits some of the company's success to studying the strategies of prominent social entrepreneurs, such as Wikipedia's Jimmy Wales. What can Dominic do to exemplify the social entrepreneurship model?
Answer:
He should provide catered food for homeless on weekly basis.
Explanation:
Impromptu catering was founded by Dominic, who is an emerging entrepreneur in the catering business. He is famous for his deadlines which provides catering and decoration services in less than a 24 hour deadline. The company has grown to 150% in just one year. Dominic gives his success credit to the strategies of prominent social entrepreneur which he studied over the years. So he should also do something unique that would make him demonstrate or exemplify the social entrepreneurship model. So he should provide catered food to the homeless people on weekly basis. This would set an example for others as well.
Dominic can model his impromptu catering company on social entrepreneurship by adopting sustainable practices, fair employment, charitable contributions, and possibly a 'One for One' model to create social value alongside business growth.
Focusing on key principles such as sustainable sourcing, equitable employment practices, and contributing to social causes, Dominic's impromptu catering business could align with the ethos of companies like The Body Shop, Ben & Jerry's, and Newman's Own. These companies have successfully merged commercial success with a steadfast commitment to social impact, with initiatives like using natural and responsibly sourced ingredients, maintaining a fair pay scale, and donating profits to charity. Following the example of TOMS Shoes, Dominic could also consider a 'One for One' model, where for every event catered, his company provides a healthy meal to those in need, thereby turning every business transaction into a moment of social contribution.
Moreover, Dominic should consider transparency, ensuring that his customers are aware that while his business is for-profit, it operates with a strong commitment to social values. By embodying these qualities and engaging in activities that carry out substantial social change, Dominic's venture could serve as a paradigm of social entrepreneurship, thus redefining the landscape of catering services with a socially responsible business model.
Baltimore Manufacturing Company just completed its year ended December 31, 2018. Depreciation for the year amounted to $160,000: 25% relates to sales, 20% relates to administrative facilities, and the remainder relates to the factory. Of the total units produced during FY 2016: 85% were sold in 2018 and the rest remained in finished good inventory. Use this information to determine the dollar amount of the total depreciation that will be contained in Cost of Goods Sold. (Round dollar values & enter as whole dollars only.)
Answer:
70,400 accounted for Cost of Goods Sold
Explanation:
1 - 25% sales - 20% admin = 1 - 45% = 55% factory
160,000 x 55% = 88,000 accounted for Goods Produced
88,000 x 80% sold = 70,400 accounted for Cost of Goods Sold
88,000 x 20% inventory = 18,600 account through Finished Goods Inventory
A company had the following purchases and sales during its first year of operations: Purchases Sales January: 10 units at $120 6 units February: 20 units at $125 5 units May: 15 units at $130 9 units September: 12 units at $135 8 units November: 10 units at $140 13 units On December 31, there were 26 units remaining in ending inventory. Using the Periodic LIFO inventory valuation method, what is the value of cost of goods sold? (Assume all sales were made on the last day of the month.)
Answer:
Ending Inventory under LIFO $3,270
Explanation:
[tex]\left[\begin{array}{cccc}Month&Purchase&Sales&Remaining\\January&10&-6&4\\February&20&-5&15\\May&15&-9&6\\September&12&-8&1\\November&10&-13&0\\Total&67&-41&26\\\end{array}\right][/tex]
First: in LIFO you always start from the bottom line
subtracting the sales figure for each period.
Notice in nomvember the sales are greater than the amount purchased, so we decrease the september units by the diference
[tex]\left[\begin{array}{cccc}Month&Units&Cost&Subtotal\\January&4&120&480\\February&15&125&1,875\\May&6&130&780\\September&1&135&135\\November&0&140&0\\Total&26&-&3,270\\\end{array}\right][/tex]
Final answer:
Using the Periodic LIFO inventory valuation method, the value of the Cost of Goods Sold (COGS) is $4995. This is calculated by taking the cost of the most recent inventory purchases and working backward until all units sold are accounted for.
Explanation:
To calculate the Cost of Goods Sold (COGS) using the Periodic LIFO method, we need to match the most recent unit costs with the units sold. Under LIFO, the last items purchased are the first ones sold. We know there were 26 units in ending inventory on December 31. We must assume the sales were made right before the year ended, leaving the most recently purchased inventory to be sold last.
Let's calculate COGS step-by-step:
Begin with the most recent purchases and work backward until we account for the total number of units sold.
November: 10 units at $140 each
September: 8 units at $135 each
May: 9 units at $130 each
February: 5 units at $125 each
January: 6 units at $120 each
Now, calculate the value of the COGS:
November (10 units x $140) + September (8 units x $135) + May (9 units x $130) + February (5 units x $125) + January (6 units x $120)
COGS = ($1400) + ($1080) + ($1170) + ($625) + ($720)
COGS = $4995
In this case, the value of cost of goods sold is $4995 using the Periodic LIFO method.
Extreme Manufacturing Company provides the following ABC costing information: Activities Total Costs Activity-cost drivers Account inquiry $320,000 16,000 hours Account billing $220,000 4,000,000 lines Account verification accounts $182,000 80,000 accounts Correspondence letters $25,000 4,000 letters Total costs $747,000 The above activities are used by Departments A and B as follows: Department A Department B Account inquiry hours 2,200 hours 3,700 hours Account billing lines 600,000 lines 450,000 lines Account verification accounts 5,000 accounts 3,000 accounts Correspondence letters 1,000 letters 1,400 letters How much of the account billing cost will be assigned to Department B
Final answer:
The cost of account billing assigned to Department B is $24,750, calculated by finding the cost per line and multiplying it by the number of lines Department B used.
Explanation:
To determine the cost that will be assigned to Department B for account billing, we first need to calculate the cost per line for account billing by dividing the total account billing cost by the total number of billing lines.
Total cost of account billing = $220,000.
Total billing lines = 4,000,000 lines.
Cost per line = Total cost of account billing ÷ Total billing lines = $220,000 ÷ 4,000,000 lines = $0.055 per line.
Now, using the cost per line, we will multiply it by the number of lines used by Department B:
Account billing lines used by Department B = 450,000 lines.
Cost for Department B = Cost per line × Number of lines used by Department B = $0.055 × 450,000 lines = $24,750.
If there was no beginning retained earnings, net income of $30,300, and ending retained earnings of $8,000, how much were dividends?
Answer:
$22,300
Explanation:
Assuming that the net income that is stated here was after the payment of all debt obligations (e interest payment and preference share dividends) then this is all income that belongs to shareholders. This income can either be distributed as dividends or retained in the business for future projects and would increase the value of equity in the balance sheet.
Out of the $30,300 net income, if only $8,000 was retained this year then the implication is that the difference between $30,300 and $8,000 was payed out as dividends.
[tex]Dividends paid =$30,300-$8,000 = $22,800[/tex]
Final answer:
The dividends distributed were calculated to be $22,300, which is the difference between the net income of $30,300 and the ending retained earnings of $8,000.
Explanation:
If there was no beginning retained earnings and the net income is $30,300, with ending retained earnings being $8,000, the dividends paid can be calculated as follows:
Dividends = Beginning Retained Earnings + Net Income - Ending Retained Earnings
Since the beginning retained earnings are $0, we can simplify the equation to:
Dividends = $0 + $30,300 - $8,000
Dividends = $30,300 - $8,000
Dividends = $22,300
Therefore, the amount of dividends that were distributed is $22,300.
A company's income statement showed the following: net income, $122,000; depreciation expense, $34,000; and gain on sale of plant assets, $8,000. An examination of the company's current assets and current liabilities showed the following changes as a result of operating activities: accounts receivable decreased $10,200; merchandise inventory increased $22,000; prepaid expenses increased $7,000; accounts payable increased $4,200. Calculate the net cash provided or used by operating activities.
To calculate the net cash provided by operating activities, both the net income and adjustments for non-cash transactions and changes in working capital are considered. The companies net cash provided by operating activities is $133,400.
To calculate the net cash provided or used by operating activities in a company, we need to consider both net income and adjustments for non-cash transactions and changes in working capital.
In this company’s case, the net income is $122,000.
The adjustments for non-cash transactions include a depreciation expense of $34,000 (which increases net cash flow because it is a non-cash expense) and a gain on the sale of plant assets of $8,000 (which reduces net cash flow because it is a non-cash gain).
The changes in working capital are calculated by subtracting the increase in current assets and the decrease in current liabilities. Here, accounts receivable decreased by $10,200 (which increases cash flow), merchandise inventory increased by $22,000 (which decreases cash flow), prepaid expenses increased by $7,000 (which decreases cash flow), and accounts payable increased by $4,200 (which increases cash flow).
Combining all these factors, the calculation becomes:
Net income + Depreciation - Gain on Sale + Decrease in Accounts Receivable - Increase in Inventory - Increase in Prepaid Expenses + Increase in Accounts Payable
= $122,000 + $34,000 - $8,000 + $10,200 - $22,000 - $7,000 + $4,200 = $133,400
Therefore, the company’s net cash provided by operating activities amounts to $133,400.
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Jarett & Sons's common stock currently trades at $27.00 a share. It is expected to pay an annual dividend of $2.50 a share at the end of the year (D1 = $2.50), and the constant growth rate is 4% a year. What is the company's cost of common equity if all of its equity comes from retained earnings? Do not round intermediate calculations. Round your answer to two decimal places. % If the company issued new stock, it would incur a 12% flotation cost. What would be the cost of equity from new stock? Do not round intermediate calculations. Round your answer to two decimal places.
Answer:
Cost of common equity assuming equity comes from retained earning = 13.26%
Cost of common equity from new stock = 14.52%
Explanation:
From the constant growth model:[tex]P0=\frac{D1}{ke-g} \\[/tex]
where P0=$27; D1=$2.50; g = 4%
If the company is using retained earnings, it does not incur any flotation costs as it just retains earnings instead of paying them out as dividends.
therefore from the above equation, if we solve for ke, we get:
[tex]ke=\frac{D1}{P0}+g = \frac{2.5}{27} +0.04 = 13.26%[/tex]
If the company issues new stock, it will effectively receive less that $27 per share as 12% will have to go towards flotation costs. ke in this case will be:
[tex]ke=\frac{D1}{P0(1-f)} +g = \frac{2.5}{27(1-0.12)} +0.04=14.52%[/tex]
Flotation costs effectively increase cost of capital.
A __________ is what customers expect they will get by purchasing a product. A. Brand promise B. A tagline C. Warranty D. Service mindset Please select the best answer from the choices provided A B C D
Your question asks what answer choice best describes what a customer expects when purchasing a product.
Answer: A). Brand promiseThe reason why answer choice "A). Brand promise" would be the correct answer because this is what customers expect when they buy a product.
Brands like to give advertisements that promise the consumers that they will enjoy their product and will not regret buying it, and that's what customers expect when they buy and use the product
Brand promise is a "saying" or "statement" that a company/brand makes about their products that a customer will expect to experience when they have the product. It's more so like a slogan.
For example, Geico says that customers can save 15% or more on car insurance from them. This means that customers would expect to save 15% or more on car insurance if they choose Geico.
I hope this helps!Best regards,MasterInvestorA brand promise is what customers expect from a product, reflecting the essence of what the brand offers in terms of quality and experience, which is distinct from taglines, warranties, or service mindsets.
A brand promise is what customers expect they will get by purchasing a product. This is different from a tagline, which is a catchy phrase associated with the brand; a warranty, which is a promise to fix or replace the product; or a service mindset, which reflects a company's overall approach to customer service. When considering options like money-back guarantees and service contracts, these are explicit forms of reassurance that sellers provide to instill confidence in the consumer, but they are not what a brand promise entails. A brand promise is the essence of what the brand offers and what customers anticipate receiving in terms of product quality, service, and overall experience.
Bryant Company has a factory machine with a book value of $90,800 and a remaining useful life of 7 years. It can be sold for $27,200. A new machine is available at a cost of $407,400. This machine will have a 7-year useful life with no salvage value. The new machine brings annual variable manufacturing costs from $640,100 to $631,800. Prepare an analysis showing whether the old machine should be retained or replaced.
Answer:
The old machine should be retained.
Explanation:
[tex]\left[\begin{array}{cccc}&continue&replace&Differential\\Proceeds \: from \: sale&0&27,200&27,200&Cost:&&&&purchase&0&-407,400&-407,400&manufacturing\:cost&-4,480,700&-4,422,600&58,100&Total \:cost&-4,480,700&-4,830,000&-349,300&Net&-4,480,700&-4,802,800&-322,100&\end{array}\right][/tex]
The old machine should be retained.
The differential analisys shows cost will increase 322,100 if replaced.
The sale from the old machine is an income for the relacement alternative.
the cost of the new machine is an expense
the value of the 7 years of manufacturing cost show a cost saving for 58,100
this savings, along with the proceeds from the old machine, doesn't cover the acquisition of the new machine. It is a bad investment.
Based on the cost-benefit analysis, purchasing the new machine is more cost-efficient for the Bryant Company over a span of seven years. The total cost of keeping the old machine is higher than replacing it with a new one by $111,700.
Explanation:The question is asking whether the Bryant Company should replace an existing factory machine or continue to use it based on its book value, potential sale value, and the cost and benefits of a new machine. To resolve this, we need to conduct a cost-benefit analysis.
First, let's calculate the total cost of keeping the old machine: over 7 years, the remaining depreciation is the book value which is $90,800, plus, the annual manufacturing cost which is $640,100 multiplied by 7 years, equals to about $4,570,500.
Second, let's calculate the cost of replacing it with a new one: the new machine will cost $407,400, plus $27,200 (the net loss from selling the old machine), plus the new manufacturing costs (annual $631,800 multiplied by 7 years) which is about $4,458,800.
The difference between the two options (keeping the old machine and buying a new machine) is $4,570,500 - $4,458,800 = $111,700. This shows that buying a new machine is more cost-efficient by $111,700 over 7 years.
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Main Street Distributors, a wholesale firm, made sales using the following list prices and trade discounts. What amount should be recorded for each sale? List price of $3,400 and trade discounts of 20 percent and 10 percent. List price of $4,100 and trade discounts of 20 percent and 10 percent. List price of $2,450 and trade discounts of 30 percent and 20 percent.
Answer: Amount should be recorded for each sale are as follows:
Explanation:
(a) The amount should be recorded for the list price of $3,400 and trade discounts of 20 percent and 10 percent are as follows:
List price = $3400
Less 20% trade discount on $3400 = 20% × 3400 = ($680)
Balance = $2720
Less 10% trade discount on $2720 =10% × 2720 = ($272)
The amount recorded for sales = 2720 - 272 = $2448
(b) The amount should be recorded for the list price of $4,100 and trade discounts of 20 percent and 10 percent are as follows:
List price = $4,100
Less 20% trade discount on $4100 = 20% × 4100 = ($820)
Balance = $3280
Less 10% trade discount on $3280 =10% × 3280 = ($328)
The amount recorded for sales = 3280 - 328 = $2952
(c) The amount should be recorded for the list price of $2,450 and trade discounts of 30 percent and 20 percent are as follows:
List price = $2450
Less 30% trade discount on $2450 = 30% ×2450 = ($735)
Balance = $1715
Less 20% trade discount on $1715 = 20% × 1715 = ($343)
The amount recorded for sales = 1715 - 343 = $1372
1. The amount recorded for the sale with a list price of $3,400 and trade discounts of 20% and 10% is $2,448.
2. The amount recorded for the sale with a list price of $4,100 and trade discounts of 20% and 10% is $2,952.
3. The amount recorded for the sale with a list price of $2,450 and trade discounts of 30% and 20% is $1,372.
To calculate the amount recorded for each sale after applying the trade discounts, we need to apply the discounts sequentially to the list prices provided.
1. For the first sale:
List price = $3,400
Trade discounts: 20% and then 10%
Calculation:
Step 1: Apply the first discount of 20%:
Discounted price after 20% = $3,400 - (0.20 * $3,400) = $3,400 - $680 = $2,720
Step 2: Apply the second discount of 10% to the discounted price:
Final price after 10% = $2,720 - (0.10 * $2,720) = $2,720 - $272 = $2,448
Therefore, the amount recorded for the first sale is $2,448.
2. For the second sale:
List price = $4,100
Trade discounts: 20% and then 10%
Calculation:
Step 1: Apply the first discount of 20%:
Discounted price after 20% = $4,100 - (0.20 * $4,100) = $4,100 - $820 = $3,280
Step 2: Apply the second discount of 10% to the discounted price:
Final price after 10% = $3,280 - (0.10 * $3,280) = $3,280 - $328 = $2,952
Therefore, the amount recorded for the second sale is $2,952.
3. For the third sale:
List price = $2,450
Trade discounts: 30% and then 20%
Calculation:
Step 1: Apply the first discount of 30%:
Discounted price after 30% = $2,450 - (0.30 * $2,450) = $2,450 - $735 = $1,715
Step 2: Apply the second discount of 20% to the discounted price:
Final price after 20% = $1,715 - (0.20 * $1,715) = $1,715 - $343 = $1,372
Therefore, the amount recorded for the third sale is $1,372.
In each case, the calculation involves subtracting the percentage discount from the list price sequentially. This approach reflects how trade discounts are applied in practice to determine the final recorded amount for each sale in a wholesale transaction.
In the past, Human Resources (HR) was treated as a ____ function with only an indirect link to corporate strategy. Today, HR is being embedded in organizational strategy.
Answer:
Support - Staff
Explanation:
In the past, Human Resources (HR) was treated as a support - staff function with only an indirect link to corporate strategy. Today, HR is being embedded in organizational strategy.
Stanford owns and operates two dry cleaning businesses. He travels to Boston to discuss acquiring a restaurant. Later in the month, he travels to New York to discuss acquiring a bakery. Stanford does not acquire the restaurant but does purchase the bakery on November 1, 2018. Stanford incurred the following expenses: Total investigation costs related to the restaurant $33,000 Total investigation costs related to the bakery 51,400 If required, round any division to two decimal places and use in subsequent computation. Round your final answer to the nearest dollar.
Answer:
deduction available would be $4131.11
Explanation:
Here in the question we have to take out what is the maximum amount that Stanford can deduct for investigating expenses.
First of all it is important to know that the deductions in investigation expenses would be allowed only when Stanford would purchase that business( restaurant or bakery), but here it is told that the Stanford has purchased bakery not restaurant , so therefore there will be no deductions for investigation expenses related to the restaurant .
But since he has purchased bakery the deduction of only $5000 is allowed to him . Here the deduction is taken on basis of dollar for dollar expense in amount which is in excess of $50,000. So the calculation of it would be like this -
amount in excess of $50,000 = $51,400 - $50,000
= $ 1400
Now subtracting this amount from $5000, to see how much amount would be deducted now and how much would remain for to be amortized over next 180 months.
$5000 - $1400
= $3600 ( amount which will be deductible now)
now subtracting this from $51,400,
$51,400 - $3600 = $47,800
$47,800 is the amount that will be left over to be amortized over next 180 months, as PER MONTH AMOUNT WILL BE
$47,800 / 180
= 265.55
and there are only 2 months left for year to be over, so
$265.55 x 2 = $ 531.11
Now the total deduction would be =
$3600 + $531.11
= $4131.11
Stanford's $33,000 investigation cost for the failed restaurant acquisition is a sunk cost and immediately expensed. The $51,400 cost for the successful bakery acquisition can be capitalized and added to the basis of the bakery.
Explanation:In business accounting and taxation, certain acquisition-related costs are treated differently. The $33,000 that Stanford spent on investigating the restaurant acquisition, which was not completed, is considered a sunk cost and is not recoverable or capitalized, but rather, it typically is expensed in the current period. On the other hand, the $51,400 spent investigating the bakery acquisition, which was completed, can be capitalized and added to the basis of the property (i.e., the bakery). Therefore, that cost is not immediately deducted but rather will affect the calculation of gain or loss when the property is eventually disposed of.
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Financial information is presented below: Operating Expenses $ 90800 Sales Returns and Allowances 26600 Sales Discounts 11200 Sales Revenue 293000 Cost of Goods Sold 158600 Gross profit would be $96600. $107800. $123200. $134400.
Answer:
The correct answer would be option A, $96600.
Explanation:
Gross profit is the amount of profit which a company earns after deducting all the costs which incurred in the making and sale of the products of the company.
Gross profit can be found out by the following formula:
Gross Profit = Total Sales - Cost of Goods Sold
Total Sales will be Sales Revenue - Sales Return - Sales Discounts
So here total sales revenue will be = 293000 - 26600 - 11200
= 255200
Total sales Revenue: 255200
Cost of goods Sold = 158600
Gross Profit = 255200 - 158600
Gross Profit = $96600
On June 1, 2018, Blue Co. distributed to its common stockholders 180,000 outstanding common shares of its investment in Red, Inc. an unrelated party. The book value on Blue’s books of Red's $1 par common stock was $1.20 per share. Immediately after the declaration, the market price of Red's stock was $3.40 per share. In its income statement for the year ended June 30, 2018, what amount should Blue report as gain before income taxes on disposal of the stock? (Do not round your intermediate calculation.)
Answer:
Blue Co. Shall report $396,000 as gain before income taxes on disposal of the stock.
Explanation:
Book value per share of Red Inc = $1.20 per share
As the value of share is revised just after the declaration but before distribution there will be gain on sale of investment.
Net gain = Sale price - Book value
= $3.40 - $1.20 per share = $2.2 per share
Total gain for the year end on June 30 will be
= $2.2 per share X 180,000 shares = $396,000 shares
Thus Blue Co. Shall report $396,000 as gain before income taxes on disposal of the stock.
Salley Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales Selling price $ 200 100 % Variable expenses 40 20 % Contribution margin 160 80 % Fixed expenses are $1,323,000 per month. The company is currently selling 9,380 units per month. Management is considering using a new component that would increase the unit variable cost by $9. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 600 units. What should be the overall effect on the company's monthly net operating income of this change?
Answer:
The effect on the company's monthly net operating income will be positive for 6,180
Explanation:
The situation we have currently is the following:
Sales are 9,380
Each unit generates a contribution a $160
Total contribution of $1,500,800 (9,380 units x $160)
less Fixed Cost $1,323,000
Operating Income of $177,800
With the new component the data will be
Sales 9,380 + 600 = 9,980
Contribution of 160 - 9 (increase in variable cost) = $151
Total Contribution = $1,506,980
less Fixed Cost $1,323,000
Operating Income $183,980
Let's compare each operating income:
with the new component $183,980
without the component (current situation) $177,800
Change in net income $6,180
Remember:
if the variable cost increase then the contribution margin decrease the same amount (more money of the sale is used to pay the cost)if their variable cost goes down, then the contribution margin increase (fewer sales revenues go for the cost of the unit and more is left for the rest of the expenses)A firm has three different production facilities, all of which produce the same product. While reviewing the firm's cost data, Jasmin, a manager, discovers that one of the plants has a higher average cost than the other plants and suggests closing that plant. Another manager, Joshua, notes that the high-cost plant has high fixed costs but that the marginal cost for that plant is lower than in the other plants. He says that the high-cost plant should not be shut down but should expand its operations. Who is right? Just considering the short run time frame, the manager who is correct is
Answer:
Joshua statement is correct.
Explanation:
Marginal cost:
Is the cost of producing a new unit.
Average Cost:
[tex]\frac{Fixed Cost + Variable Cost}{UnitsProduced} = $Average Cost[/tex]
[tex]\frac{Fixed Cost}{UnitsProduced} + $Variable Cost Per Unit= Average Cost[/tex]
If the marginal cost of this plant is lower than their other plants, it can decrease his average cost by increasing the amount produced.
This increase in production decrease the impact of the fixed cost in the unit price. At more production the average cost will decrease. Because the variable cost keeps at the same value but the fixed cost per unit decrease.
Presented below are two independent transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) Bridgeport Restaurant accepted a Visa card in payment of a $300 lunch bill. The bank charges a 2% fee. What entry should Bridgeport make? (b) Sarasota Company sold its accounts receivable of $76,000. What entry should Sarasota make, given a service charge of 2% on the amount of receivables sold?
Answer:
Explanation:
Journal Entry : The journal entry is a recording of transactions which have two sides i.e. debit side and credit side. Debit side records all expenditures and losses, whereas credit side records income and gains.
(a) The entry which Bridgeport should make is shown below:
Cash A/c Dr $294
Bank charge expense Dr ($300 × 2%) = 6
To Sales Revenue $300
(b) The entry which Sarasota should make, given a service charge of 2% on the amount of receivables sold is shown below:
Cash A/c Dr $74,480
Bank charge expense Dr ($76,000 × 2%) = $1,520
To Accounts Receivable $76,000
Bridgeport Restaurant will record a debit to Cash for the amount received after the bank fee ($294) and a debit to Bank Service Charge Expense ($6) with a credit to Sales Revenue ($300). Sarasota Company will record a debit to Cash for the amount received after the service charge ($74,480), a credit to Accounts Receivable ($76,000), and a debit to Loss on Sale of Receivables ($1,520).
Explanation:In the case of Bridgeport Restaurant, the entry in their books will reflect a debit (increase) to Cash for the amount received after deduction of the 2% bank fee. This would be $294 [(100% - 2%) x $300]. The restaurant will also make a credit (increase) to Sales Revenue for $300. Lastly, they'll record a debit (increase) to Bank Service Charge Expense for the $6 fee [$300 x 2%].
As for the Sarasota Company, when they sell their accounts receivable of $76,000, they'll record a debit (increase) to Cash for the amount they receive after the service charge has been subtracted. This would be $74,480 [(100% - 2%) x $76,000]. They'll also have to record a credit (decrease) to Accounts Receivable for $76,000 to clear that balance. Lastly, a debit (increase) to Loss on Sale of Receivables will be recorded for the amount of the service charge, which is $1,520 [$76,000 x 2%].
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Employees earn vacation pay at the rate of one day per month. During the month of July, 30 employees qualify for one vacation day each. Their average daily wage is $105 per day. What is the amount of vacation benefit expense to be recorded for the month of July?
Answer: $3150
Explanation:
Given that,
average daily wage = $105 per day
In the month of july, 30 employees were qualify for one vacation day each.
Hence, the amount of vacation benefit expense to be recorded for the month of July as follows:
= Wage per day × Employees Qualify
= $105 × 30
= $3150
∴ The amount of vacation benefit expense to be recorded for the month of July is $3150.
Cash received before services are performed may be recorded as a debit to a Cash account and a credit to a liability account is calleda. an unearned revenueb. an accrued revenue.c. accounts payabled. None of these answer choices are correct.e. an unrecorded revenue
Answer: An unearned revenue
Explanation: When any individual or entity receives money from customers for such service which has not been performed yet, then such income is termed as unearned revenue.
Unearned revenue is considered to be the liability of the recipient and and asset for the payee.
So from the above explanation we can conclude that right option is unearned revenue.
The difference between standard costs and budgeted costs is that standard cost refers to a single unit while budgeted costs refer to the cost, at standard, for the total number of budgeted units. is calculated under ideal conditions, while budgeted costs are calculated for attainable conditions. is calculated for raw material while budgeted costs are calculated for direct labor. is part of the management accounting system, while budgets are part of the financial accounting system.
Answer:
"While budgeted costs refer to the cost, at standard, for the total number of budgeted units. "
Explanation:
The first sentence would be the correct one
The budget consist of get the revenues and costs for the business using the standard measurement for one unit.
Please be more clear in future questions, thank you =)
During the last year, Globo-Chem Co. generated $1,053 million in cash flow from operating activities and had negative cash flow generated from investing activities (-$576 million). At the end of the first year, Globo-Chem Co. had $180 million in cash on its balance sheet, and the firm had $280 million in cash at the end of the second year. What was the firm’s cash flow (CF) due to financing activities in the second year
The second-year cash flow from financing activities for Globo-Che Co. was -$377 million. This was calculated using the cash flow formula and the provided cash flows from operations, investing, and the change in cash.
Explanation:To find the cash flow from financing activities for Globo-Chem Co., we need to use the formula for cash flow, which is: Cash Flow from Operations + Cash Flow from Investing + Cash Flow from Financing = Change in Cash. We know the cash flow from operations ($1,053 million), the cash flow from investing (-$576 million), and the change in cash ($280 million - $180 million = $100 million).
Applying these values to the formula: $1,053 million - $576 million + Cash Flow from Financing = $100 million. Solving for Cash Flow from Financing, we get: Cash Flow from Financing = $100 million - $1,053 million + $576 million = -$377 million. Thus, the cash flow due to financing activities in the second year of Globo-Chem Co.'s operation was -$377 million.
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To find out as much as you can about the market for your potential business, be sure to talk to
A. the local bookstore owner. B. potential employees. C. potential customers. D. anyone who may compete with you locally.18
To find out as much as you can about the market for your potential business, be sure to talk to potential customers.
Answer:potential customers - C.
Answer:
The correct answer is letter "C": potential customers.
Explanation:
At the moment of starting a new business, it is imperative to carry out polls so we can identify what exactly the needs of our potential consumers are and if the good or service we intend to offer matches those needs. That poll will give us a clear idea or what our market will be and, if necessary, can be carried out more than once to check if possible adjustments made to our initial planned good or service would be translated in higher profits.
On March 15, Viking Office Supply agrees to accept $1,200 in cash along with a $2,800, 60-day, 15 percent note from one of its customers to settle his $4,000 past-due account. Prepare the March 15 entry for Viking Office Supply by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.
Answer:
Cash debit 1,200
Note Receivable debit 2,800
Account Receivable credit 4,000
Explanation:
The accounting will reflect the receipt of cash and the note at their principal.
The interest of the note will ge accrued with the past of time. Currently no interest was earned, so we don't have to post anything related to the interest of the note.
We just write-off the account receivable of the customer and declare how we settle.
How does bicarbonate (HCO3−) help alleviate heartburn symptoms? A. Bicarbonate solution dilutes the excess stomach acid. B. It has a soothing effect on acid-damaged tissues. C. It reacts with excess stomach acid and neutralizes it. D. It creates an antacid.
Answer:
The correct option is c) it reacts with excess stomach acid and neutralizes it.
Explanation:
Bicarbonate (HCO3-) , which is also know as sodium bicarbonate is nothing but a type of salt which includes both sodium and bicarbonate ions. Doctors recommend this in case of heartburn, as this is a very common remedy available to everyone in any pharmacy . This sodium bicarbonate consists of what we call an alkaline pH , which helps in giving relief from excess stomach acid, but it is important to remember that this is a temporary solution for the problem of stomach acid.
Bryan, who is 45 years old, had some surprise medical expenses during the year. To pay for these expenses (which were claimed as itemized deductions on his tax return), he received a $20,000 distribution from his traditional IRA (he has only made deductible contributions to the IRA). Assuming his marginal ordinary income tax rate is 15%, what amount of taxes and/or early distribution penalties will Bryan be required to pay on this distribution?
Answer:
The amount of income tax that Bryan would have to pay is $3000 and he would not pay any early distribution penalties.
Explanation:
In this question it is being told that the surprise medical expenses which Bryan had to incurred were qualified as per the IRA that's why these were claimed as itemized deductions on his tax return. Since these expenses were qualified as per IRA distribution , no penalties would taken on it. Usually there is 10% early distribution penalty but here it is not valid. So Bryan is only required to give income tax on whole $20,000.
INCOME TAX = $20,000 X 15%
= $3000
E-Gadgets is a chain of electronics stores that specializes in devices and gadgets incorporating cutting-edge technologies. The company has more than 170 stores located in large cities throughout the Southeast and Midwest. E-Gadgets has chosen the locations of its stores so that most customers living in upper middle class and wealthy neighborhoods can get to an E-Gadgets store in less than 15 minutes. E-Gadgets is providing its customers with:
A)scrambled merchandising. B)allocative utility. C)place utility. D)saturation marketing.
Answer:
The correct option is C) place utility
Explanation:
Place utility is the utility which is created for a product by making that product available to near by locations of the customers so that they can easily get access to those products. Same strategy is being applied in the question by E-gadgets , who are making their stores available to such locations , where their customers ( upper middle class and wealthy neighborhoods) can get access to the products easily( less than 15 minutes in the given case).
GoPro's earnings before interest and taxes (EBIT) was \$190$190 million. Assuming GoPro's tax rate is 35\%35%, what is their net operating profit after taxes (NOPAT) for 2014 expressed in million of dollars? *Make sure to input all currency answers without any currency symbols or commas, and use two decimal places of precision.
Answer: 123.5
Explanation: Earnings before interest and tax,that is, EBIT is sometimes used synonymously with operating income is the profits of company before deducting income tax expense and interest expense. These are used to evaluate the performance of company before tax and capital structure affecting it. NOPAT that is net operating profit after tax is calculated by deducting interest and tax from EBT.
THAT IS,
NOPAT = EBT (1- tax rate)
since there is no interest-
EBIT= EBT
Therefore,
NOPAT = 190(1- 35%)
= 123.5
To calculate GoPro's net operating profit after taxes (NOPAT) for 2014, we multiply the earnings before interest and taxes (EBIT) by (1 - the tax rate).
Explanation:To calculate net operating profit after taxes (NOPAT), we need to multiply the earnings before interest and taxes (EBIT) by (1 - tax rate). In this case, GoPro's EBIT is $190 million and the tax rate is 35%, so the calculation would be:
Calculate the tax amount by multiplying the EBIT by the tax rate: 190 million * 0.35 = 66.5 millionSubtract the tax amount from the EBIT to get the NOPAT: 190 million - 66.5 million = 123.5 millionTherefore, GoPro's net operating profit after taxes (NOPAT) for 2014 is $123.5 million.
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