Answer: the correct answer is 324,000.
Explanation:
The requirement is to determine the number of shares to be used in computing year 2 basic earnings per share (EPS). For EPS purposes, shares of stock issued as a result of stock dividends or splits should be considered outstanding for the entire period in which they were issued. Therefore, both the original 300,000 shares and the additional 30,000 shares (10% × 300,000) are treated as outstanding for the entire year. The 10/1/Y2 purchase of 24,000 treasury shares results in a weighted-average deduction of 6,000 shares (3/12 × 24,000) because the shares were not outstanding for only 3 months during year 2. Therefore, the number of shares for EPS computations is 324,000.
One of the main disadvantages of buying a franchise is that you may end up
A. choosing a poor location. B. feeling like an employee. C. hiring a large staff. D. paying too much for operating costs. 4.
Final answer:
Buying a franchise may lead to feeling like an employee due to strict rules and guidelines from the franchisor. You have to pay franchise and royalty fees, impacting operating costs, and you might have less flexibility in business decisions. The correct option is b.
Explanation:
One of the main disadvantages of buying a franchise is that you may end up feeling like an employee. This is because, as a franchisee, you are required to follow the operational guidelines and rules that have been established by the franchisor. This can include specific procedures for marketing, staff training, and the types of products or services that can be offered. Purchasing a franchise involves paying an initial franchise fee, along with ongoing royalty fees, which can influence the total operating costs. Moreover, while franchises come with brand recognition and support, they may also limit your flexibility and creativity as a business owner.
You are the CEO of a home appliance manufacturing company and have recently undertaken a review of your company's strategy. In comparing your stock market valuation to that of your closest competitor, you note that your firm is currently valued at $50 billion, while your competitor is valued at $40 billion. How should you proceed?
Answer: As the CEO of a home appliance manufacturing company, it lies upon us to work thoroughly while reviewing our company's strategy.
If, while comparing our stock market valuation to that of our closest competitor, we note that our firm is currently valued at $50 billion, while our competitor is valued at $40 billion, even then we shouldn't work hastily and ponder upon any conclusion.
In such situation it'll be better if we, compare the current valuations with past valuations to determine if we can find a trend. We should first analyze on what made us more competitive, as this strategy will help us to sustain longer in the market.
he degree of leverage concept is designed to show how changes in sales affect earnings before interest and taxes (EBIT) and earnings per share (EPS). If a 10 percent increase in sales causes EPS to increase from $1.00 to $1.50 and if the firm uses no debt, then what is its degree of operating leverage?
Answer: 5
Explanation:
The measure used to evaluate a change in company 's operating income as a result of relative change in sales is called degree of operating leverage of the company. The operating leverage has two components that is fixed cost and variable cost.
.
Operating income of a company is denoted as EBIT, that is, earnings before interest and tax.
.
FORMULA = [tex]\frac{percentage\ change\ in\ EBIT}{percentage\ change\ in\ sales}[/tex]
= [tex]\frac{50}{10}[/tex] = 5
note :-
percentage change in EBIT = [tex]\frac{1.5-1}{1}[/tex]= 50%
On April 1, 2018, Austere Corporation issued $370,000 of 11% bonds at 106. Each $1,000 bond was sold with 40 detachable stock warrants, each permitting the investor to purchase one share of common stock for $15. On that date, the market value of the common stock was $11 per share and the market value of each warrant was $4. Austere should record what amount of the proceeds from the bond issue as an increase in liabilities?
Answer: $347,800 is the amount that will be recorded as increase in liabilities.
Explanation:
Each bond was sold for $1,000 x 1.16 = $1,070.
It should be noted that the proceeds from sale of the issue be divided between Bond and Detachable Warrants.
Number of bonds = $370,000 ÷ $1,000 = 370
Total market value = $370,000 x 106 ÷ 100 = $392,200
Market value per warrant = $4
Total market value for 30 warrants = 30 x $4 x 370 = $44,400
Using residual approach;
Market Value of Bond = Total Proceeds - Market Value of warrants
= $(392,200 - 44,400) = $347,800
$347,800 is the amount that will be recorded as increase in liabilities.
Which of the following events can cause the labor-supply curve to shift?a. a technological advance b. an increase in the price of output c. an increase in the wage rate d. an increase in the rate of immigration
Answer: The event "d. an increase in the rate of immigration" can change the labor supply curve.
Explanation: when the production price increases, the labor demand curve shifts to the right.
When a technological advance is incorporated according to the type of technology, the demand curve can shift to the left or right.
An increase in the salary rate would result in a change in the amount of work offered because the amount of work an individual offers depends on the salary rate.
An increase in the immigration rate shifts the labor supply curve because it would imply that the number of people willing to work increases.
The net present value of a project is zero. The minimum desired rate of return used to obtain the net present value is 8%. Which of the following statements is TRUE? A. The project is desirable if the minimum desired rate of return is 6%. B. The project is undesirable if the minimum desired rate of return is 6%. C. The project is desirable if the minimum desired rate of return is 6% or 10%. D. The project is desirable if the minimum desired rate of return is 10%.
Answer:
A. The project is desirable if the minimum desired rate of return is 6%.
Explanation:
If the NPV of a project is zero at an 8% rate it means it yields 8%
Remember:
PV = net cash flow at present value using a given rate - investment
So if PV = 0 then
net cash flow at given the rate = investment
Which makes the business profitable at that rate.
So if the desired minimum is 6% the project yields above that. Making it profitable and therefore, desirable
Agee Technology, Inc., issued 9% bonds, dated January 1, with a face amount of $380 million on July 1, 2018, at a price of $370 million. For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. Prepare the journal entry to record interest at the effective interest rate at December 31. What would be the amount(s) related to the bonds that Agee would report in its statement of cash flows for the year ended December 31, 2018, if it uses the direct method?
Answer:
Part 1 Journal Entry
Journal Entry to record interest
Interest Expense A/c Dr. $17.1 million
To Interest Payable A/c $17.1 million
(Interest expense of Agee Technology on bonds of face value of $380 million @9% for 6 months.)
Interest Payable A/c Dr. $17.1 million
To Cash a/c $17.1 million
(Interest paid on the bonds for 6 months)
Part 2 Cash Flow
Amount related to bonds to be reported in cash flow statement
Issue of bonds = $370 million. (Financing Activity)
Less: Interest paid on 1 July = $380 million X 9% X 6/12 = $17.1 million
Less: Interest paid on 31 December = $380 million X 9% X 6/12 = $17.1 million
Net cash inflow from financing activities = $335.8
Explanation:
Since bonds are dated 1 January though issued on 1 July interest for 6 months i.e. 1 January to 30 June will be paid.Market rate of yield does not make any impact in calculations.Interest will be calculated on face value of bonds, issue price does not matter.The interest for the period from Jan to June will be paid on issue of bonds, i.e. on 1 July 2018 itself.On 31 December interest will be paid only for 6 months.In cash flow statement under direct method there is a change of pattern in reporting operating activities, there is no change in disclosing financing activities.
To record the interest on Agee Technology, Inc.'s bonds at the effective rate, debit Interest Expense for $18.5 million, credit Discount on Bonds Payable for $1.4 million, and credit Cash for $17.1 million. On the statement of cash flows using the direct method, they would report a $17.1 million cash outflow for interest payment.
Explanation:You are asking about the journal entry for the interest payment of bonds at the effective interest rate and the reporting on the statement of cash flows using the direct method for Agee Technology, Inc. Here is how you would calculate and record these figures:
First, since the bonds were issued at a discount (price less than face value), the effective interest method is used to amortize the discount over the life of the bond. The carrying amount of the bond initially is $370 million, and the semiannual interest payment at the stated rate of 9% on the face amount of $380 million is $17.1 million (0.09 x $380 million x 1/2). The effective semiannual interest expense, however, is calculated on the carrying amount at the market rate, which is 10% or 5% semiannually on $370 million, resulting in $18.5 million (0.05 x $370 million).
To record the interest payment and the amortization of the discount, the entry at December 31, 2018, would be:
In the statement of cash flows using the direct method, Agee would report $17.1 million as an outflow under operating activities for the interest payment. The amortization of the bond discount is a non-cash adjustment and does not appear on the statement of cash flows.
A small apartment property is estimated to have potential gross income of $ 25,000. Vacancy and collection losses are expected to average 5 percent over the life of the property. Operating expenses are expected to average about 30 percent of effective gross income. An overall capitalization rate of 12 percent is derived from market transactions of similar properties. What is the market value?
Answer:
the market value of the property would be $138,542.
Explanation:
To calculate the market value of the property , we need to divide the net operating income by the capitalization rate, in the question we have been given the capitalization rate but the operating income is not available to us. So with the help of given potential gross income we will calculate the effective gross income and then from it we will calculate the net operating income, lets see how to do step wise calculation -
POTENTIAL GROSS INCOME - $25,000
(-) VACANCY AND COLLECTION LOSSES = 5% X $25,000
= $1250
EFFECTIVE GROSS INCOME = $23,750
Now from this we will subtract the operating expenses to get net operating income -
EFFECTIVE GROSS INCOME = $23,750
(-) OPERATING EXPENSES = 30% X $23,750
= $7125
NET OPERATING INCOME = $16,625
Now for calculating market value putting these value sin the formula -
NET OPERATING INCOME / MARKET CAPITALIZATION RATE
= $16,625 / 12%
= $138,541.66
= $138,542 ( APPROXIMATELY )
Flying High Company manufactures model airplanes. During the month, it manufactured 10,000 airplanes. Each one used an average of 6.5 direct labor hours and an average of 1.5 sheets of aluminum. It normally manufactures 7,500 airplanes. Materials and labor standards for making the airplanes are as follows: Direct Materials (1 sheet of aluminum @ $10.00) $10.00 Direct Materials (other accessories @ $8.75) 8.75 Direct Labor (6 hours @ $7.00) 42.00 Compute the standard number of sheets of aluminum allowed for a volume of 10,000 airplanes. a. 10,000 sheets b. 15,000 sheets c. 11,250 sheets d. 7,500 sheets
Answer:
a. 10,000
Explanation:
Standard material provided, for each plane 1 sheet of aluminium, therefore, material for 10,000 planes = 10,000 [tex]\times[/tex] 1 = 10,000
Average sheets provided for 7,500 units of 1.5 units is not to be considered as this is actual and not standard, and not important.
As the average is based on actual results, and standard is set as based on standard capacities.
Therefore final answer is 10,000 sheets.
The standard number of sheets of aluminum allowed for a volume of 10,000 airplanes is 10,000.
What is direct labor?Direct labor is defined as the production or services labor that is appointed to a particular product, work order, or cost center.
When a business makes products, direct labor is regarded to be the labor of the production units that makes goods, such as machine operators, machine line operators, painters.
One sheet of aluminum is used for Standard material of producing the 10,000 planes, with the 10000 aluminum sheets.
[tex]10,000 \text{Planes} \times 1 \text{\Aluminum sheet}= 10,000 \text{aluminum sheets}.[/tex]
Average sheets supplied for 7,500 units of 1.5 units, in the above situation is not to be looked because this is actual and not standardised, and not important.
As we know that, the average is founded on existent outcomes, and standard is set up as founded on standard capabilities.
Therefore, option a is correct.
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_____ may be daunting and perhaps risky, but the challenge of it grabs people in the gut and gets their juices flowing and creates tremendous forward momentum. Such goals are achieved through a breakthrough in the organization’s products or services.
Answer: the correct answer is BHAGs or Big Hairy Audacious Goals.
Explanation: BHAGs are those goals that can be achieved if there is a great idea or invention that makes the company move forward and stay ahead of the competition.
A business objective is aligned with a _______________ to be fulfilled by the business.
Question 3 options:
Mission Statement
Consumer Need
Environmental Statement
Owners Objectives
Answer:
The correct answer would be option B, Consumer Need.
Explanation:
Business objectives are basically the mission of the organization. Mission of the company is the purpose of the organization and the purpose of the organizations is usually to meet the customers' needs and fulfill their demands and desires through their products or services. The product or the service of the company is the way to meet and satisfy the customer's needs. Making high level products or giving high level services is the mission of the company. So it is true that a business objective is aligned with a customer need to be fulfilled by the business.
You are going to buy a new computer at a downtown store that is a 25-minute drive each way and has the computer for $900. You earn $16 per hour at your job and will have to take time off to go buy the computer. You can expect to spend 40 minutes in the store making your purchase. What is the opportunity cost of buying the computer, measured in dollars? Enter an answer such as 42.00 or 34.50, with two decimal places. Do not enter a dollar sign.
Answer: The opportunity cost of buying computer is $337.5.
Explanation:
The total time taken in travelling to buy a computer at a downtown store:
= 25 minutes for one side × 2
= 50 minutes
Given that,
expect 40 minutes spend in a store for making purchase
So,
total time taken by a individual = time taken in a store + time taken in travelling
= (50 + 40) minutes
= 90 minutes
Also given that,
a individual earns $16 per hour at job
Hence, he earns = [tex]\frac{60}{16}[/tex]
= $3.75 per minute
so,
Total opportunity cost = earning per minute × total time taken
= $3.75 × 90 minutes
= $337.5
Assume that, after analyzing its business transaction, a firm has the following ending balances: accounts payable $3,400, accounts receivable $2,000, cash $1,000, capital $3,600, equipment $3,000, prepaid rent $600, and supplies $400. What is the total amount of assets that will be reported on the firm’s balance sheet?
Answer:
Total Assets = $7,000
Explanation:
Total assets are sum of fixed and current assets
Fixed assets = Assets held for a period more than a year.
Here Equipment is fixed asset with a value of $3,000
Current Assets = Accounts Receivable, Cash balance, Prepaid rent, Supplies
= $2,000 + $1,000 + $600 + $400
=$4,000
Total assets = $3,000 + $4,000 = $7,000
The firm's total assets, which include cash, accounts receivable, equipment, prepaid rent, and supplies, amount to $7,000.
To calculate the total amount of assets that will be reported on the firm’s balance sheet, we must add up all the individual asset balances. Assets typically include cash, accounts receivable, equipment, prepaid expenses, and supplies. In this case, the ending balances for the firm's assets are: cash of $1,000, accounts receivable of $2,000, equipment of $3,000, prepaid rent of $600, and supplies of $400. These figures combine to give a total asset value.
Therefore, the total assets would be calculated as follows:
Cash + Accounts Receivable + Equipment + Prepaid Rent + Supplies
$1,000 + $2,000 + $3,000 + $600 + $400 = $7,000.
Hence, the firm will report a total of $7,000 in assets on its balance sheet.
Gundy Company expects to produce 1,200,000 units of Product XX in 2017. Monthly production is expected to range from 80,000 to 120,000 units. Budgeted variable manufacturing costs per unit are direct materials $5, direct labor $6, and overhead $8. Budgeted fixed manufacturing costs per unit for depreciation are $2 and for supervision are $1. Prepare a flexible manufacturing budget for the relevant range value using 20,000 unit increments.
Answer:
[tex]\left[\begin{array}{ccccc}-&units \: cost&V80,000&V100,000&V120,000\\DM&5&400,000&500,000&600,000\\DL&6&480,000&600,000&720,000\\Overhead&8&640,000&800,000&960,000\\Total Variable&19&1,520,000&1,900,000&2,280,000\\Depreciation&200,000&200,000&200,000&200,000\\Supervision&100,000&100,000&100,000&100,000\\Total Fixed&300,000&300,000&300,000&300,000\\Total Overhead&&1,820,000&2,200,000&2,580,000\\\end{array}\right][/tex]
Explanation:
We multiply the variable cost by each volume of production
for example direct materials 5 x 80,000 = 400,000
5 x 100,000 = 500,000
5 x 120,000 = 600,000
Then for the fixed cost:
notice the company expect to produce 1,200,000 units.
If fixed depreciation is $2 per unit then
1,200,000 x $2 = 2,400,000 depreciation per year.
we then divide this value by 12 to get the monthly fixed depreciation
2,400,000/12 = 200,000
Same procedure goes for supervision
1,200,000 units x $1 per unit = 1,200,000 per year
1,200,000/12 = 100,000 per month
Finally we add both, fixed and variable to et total overhead for the relevant range.
To prepare a flexible manufacturing budget, calculate the total variable and fixed manufacturing costs per unit and multiply by the range of production.
Explanation:To prepare a flexible manufacturing budget for the relevant range value using 20,000 unit increments, we first need to determine the total variable manufacturing costs per unit. These costs include direct materials, direct labor, and overhead. The budgeted variable manufacturing costs per unit for Product XX are direct materials $5, direct labor $6, and overhead $8, making the total variable manufacturing costs per unit $19. Next, we calculate the total fixed manufacturing costs per unit by adding the depreciation cost and the supervision cost. The budgeted fixed manufacturing costs per unit for depreciation are $2 and for supervision are $1, making the total fixed manufacturing costs per unit $3. Finally, we can calculate the flexible manufacturing budget by multiplying the total variable manufacturing costs per unit by the range of production. In this case, the range of production is 80,000 to 120,000 units per month, so the flexible manufacturing budget would range from $1,520,000 to $2,280,000 per month.
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Pisces Company manufactures sonars for fishing boats. Model 100 sells for $ 300. Pisces produces and sells 5 comma 000 units per year. Cost data are as follows: Variable manufacturing $ 95 per unit Variable selling and administrative $ 6 per unit Fixed manufacturing $ 280 comma 000 per year Fixed selling and administrative $ 120 comma 000 per year An offer has come in for a oneminustime sale of 300 units at a special price of $ 120 per unit. The marketing manager says that the sale will not affect the company's regular sales activities, and that it will not require any variable selling and administrative costs. The production manager says that there is plenty of excess capacity and the sale will not impact fixed costs in any way. What is the effect of this deal on operating income
Answer:
Revised Net operating Profit = $595,000 + $7,500 = $602,500
Thus The net impact of this deal on operating income is increase by $7,500.
Explanation:
Present operating income is as follows:
Sales = $300 X 5,000 = $1,500,000
Less: Variable Costs
Manufacturing = $95 X 5,000 = $475,000
Selling and Administrative = $6 X 5,000 = $30,000
Contribution margin = $995,000
Less: Fixed cost
Manufacturing = $280,000
Selling & Administrative = $120,000
Current Operating Income = $595,000
Provided with new order no selling & administrative cost to be incurred also fixed cost will not change as it is in the capacity fixed.
In case order is considered
Additional Revenue shall be as follows:
Sales = $120 X 300 = $36,000
Less:
Variable Manufacturing cost $95 X 300 = $28,500
Operating Profit = $7,500
Revised Net operating Profit = $595,000 + $7,500 = $602,500
Thus The net impact of this deal on operating income is increase by $7,500.
Assume that Sandhill Co. uses a periodic inventory system and has these account balances: Purchases $420,800; Purchase Returns and Allowances $11,900; Purchase Discounts $8,100; and Freight-in $17,700. Sandhill Co. has beginning inventory of $58,100, ending inventory of $92,600, and net sales of $643,000. Determine the amounts to be reported for cost of goods sold and gross profit.
Answer:
Cost of goods Sold = $384,000
Gross Profit = $259,000
Explanation:
Cost of goods sold = Opening Inventory + Net Purchase - Closing Inventory
Opening Inventory = $58,100 Closing Inventory = $92,600
Net Purchases = Purchase - Purchase Return - Discounts + Freight in
Freight in forms part of cost of purchase because without this expense inventory cannot be bought in.
Net Purchases = $420,800 - $11,900 - $8,100 + $17,700 = $418,500
Cost of goods Sold = $58,100 + $418,500 - $92,600 = $384,000
Gross Profit = Sales - Cost of Goods Sold
= $643,000 - $384,000 = $259,000.
On January 1, 2020, Blossom Company had $1,335,000 of common stock outstanding that was issued at par. It also had retained earnings of $750,500. The company issued 45,000 shares of common stock at par on July 1 and earned net income of $405,000 for the year. Journalize the declaration of a 16% stock dividend on December 10, 2020, for the following independent assumptions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) (a) Par value is $10, and market price is $19. (b) Par value is $5, and market price is $22
Answer:
(A)
Retained Earnings 527,440 debit
Common Stock 277,600 credit
Additional Paid-In 249,840 credit
(B)
Retained Earnings 1,080,640 debit
Common Stock 245,600 credit
Additional Paid-In 835,040 credit
Explanation:
1,335,000 common stock
RE 750,500
(A)
40,000 at par value = 10 = 400,000 issued stocks July 1st
Stock dividends 16%
1,735,000 x .16 = 277,600 CS
173,500 x .16 x 19 = 527,440 market value of the bond dividends
Retained Earnings 527,440 debit
Common Stock 277,600 credit
Additional Paid-In 249,840 credit
(B)
40,000 x 5 = 200,000 issued stocks July 1st
Stock dividends 16&
1,535,000 x .16 = 245,600 CS
307,000 shares x .16 x 22 = 1,080,640 market value of the bonds dividends
Retained Earnings 1,080,640 debit
Common Stock 245,600 credit
Additional Paid-In 835,040 credit
Bonds payable—various issues On July 1, 2013, $6 million face amount of 7%, 10-year bonds were issued. The bonds pay interest on an annual basis on June 30 each year. The market interest rates were slightly higher than 7% when the bonds were sold.
Required:
a. How much interest will be paid annually on these bonds?
b. Were the bonds issued at a premium or discount? Explain.
c. Will the annual interest expense on these bonds be more than, equal to, or less than the amount of interest paid each year? Explain your answer.
Answer:
(A) 420,000 cash disbursements
(B) discount.
(C) It will be more than the cash disbursements
Explanation:
6,000,000 x 0.07 = 420,000 cash disbursements
(B) the bonds were issued at discount, because the market rate was higher than 7% so the price fall below face value to match the market price.
(C) It will be more than the cash disbursements. There is adiference between face value and cash proceed from the issuance of the bonds, this diference is amortize each period increasing the interest expense of the bond.
The interest paid annually on the bonds is $420,000. The bonds were neither issued at a premium nor a discount. The annual interest expense on the bonds will be equal to the amount of interest paid each year.
Explanation:a. The interest paid annually on these bonds can be calculated by multiplying the face amount of the bonds ($6 million) by the stated interest rate (7%). Therefore, the annual interest payment is $420,000 ($6 million x 7%).
b. Whether the bonds were issued at a premium or discount depends on the market interest rates at the time of the bond issuance. If the market interest rates were lower than 7%, the bonds would be issued at a premium, and if the market interest rates were higher than 7%, the bonds would be issued at a discount.
c. The annual interest expense on these bonds will be equal to the amount of interest paid each year. This is because the stated interest rate of 7% is the same as the market interest rate at the time of issuance, so there is no premium or discount.
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A bakery is one of many that operate in the bread industry. The market demand curve for bread is downward-sloping. The bakery incurs fixed costs and has an upward-sloping marginal cost curve. Which of the following statements is correct?
a.The bakery can raise the market price by constraining its production.
b.The bakery always makes a positive economic rent.
c.The bakery's supply curve is horizontal.
d.The bakery faces a flat demand curve.
Answer: (d.)The bakery faces a flat demand curve.
Explanation:
The bakery faces a flat demand curve because a firm in a perfectly competitive market is a price taker and the demand curve for a firm is equal to the price the supply curve is a part of Marginal cost above Average variable cost , so the supply curve is upward sloping . The bakery is in the perfectly competitive market so it can earn positive, negative or zero economic profit in the short run and zero economic profit in the long run.
The correct statement is that the bakery can potentially raise market prices by constraining production, although this effect could be minimal if it's a small bakery in a highly competitive market. The other three statements each have reasons why they are not necessarily correct.
Explanation:The statement 'The bakery can raise the market price by constraining its production.' appear to be correct. This is due to the fact that the law of supply and demand asserts that as the availability of a product decreases (constrained production), the demand for it increases, forcing the price up. However, this might depend very much on the degree of market power the bakery holds. If it's a small bakery within a highly competitive market, its individual actions might not significantly affect the market price. This is characteristic of Perfect Competition market structure.
'The bakery always makes a positive economic rent.' is not necessarily correct because whether a firm makes an economic rent or not depends on a variety of factors like its costs, the price it gets for products and the competition in the market.
The statement 'The bakery's supply curve is horizontal.' is incorrect because a firm's supply curve is primarily driven by its marginal costs, which in this scenario are given as upward sloping.
'The bakery faces a flat demand curve.' is also incorrect as under perfect competition a firm faces a horizontal demand curve but here it is mentioned that market demand curve for bread is downward-sloping.
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Logan Products computes its predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 28,000 direct labor-hours would be required for the period's estimated level of production. The company also estimated $593,000 of fixed manufacturing overhead expenses for the coming period and variable manufacturing overhead of $3.00 per direct labor-hour. Logan's actual manufacturing overhead for the year was $733,264 and its actual total direct labor was 28,500 hours. Required: Compute the company's predetermined overhead rate for the year. (Round your answer to 2 decimal places.)
Answer:
Predetermined rate = $24.178
Explanation:
Company's predetermined rate for overhead = Variable + Fixed
Variable provided = $3 per hour
Fixed = $593,000/28,000 hours = $21.1786
Now for actual output fixed expenses will remain fixed = $593,000
Variable = $733,264 - $593,000 = $140,264
Variable overhead rate per hour = $140,264/28,500 = $4.9215
thus predetermined rate = ($3 X 28,000) + $593,000
= $84,000 + $593,000 = $677,000/28,000 hours (predetermined)
= $24.178
Actual = $733,264/28,500 = $25.728
Final Answer
Predetermined rate = $24.178
A company sold merchandise for $24,000 on account with terms of 5/15, n/30. The company uses a perpetual inventory system. After two days, it received defective merchandise worth $4,000. The journal entry to record the cash receipt for the sale if the payment is received within 10 days of the invoice date would include ________. A) a debit to Cash for $20,000, a credit to Merchandise Inventory for $1,000, and a credit to Sales Revenue for $19,000. B) a debit to Cash for $19,000, a debit to Sales Discount for $1,000, and a credit to Accounts Receivable for $20,000 C) a debit to Cash for $20,000, a debit to Merchandise Inventory for $4,000, and a credit to Accounts Receivable for $24,000. D) a debit to Sales Revenue for $24,000, a credit to Accounts Receivable for $20,000, and a credit to Sales Discounts for $4,000
Answer:
OPTION B
Cash debit for 19,000
Sales Discount debit for 1,000
Account receivable credit for 20,000
Explanation:
First, notice that this entry to record the payment of the invoice, so we are settlng this customer account, we are not recording the sale, that was done 10 days ago.
Same applies to the merchandise return, that was 2 days ago so we don't have to record that, only the cash payment from the customer.
The company sold merchandise for 24,000
Then the customer return 4,000
so the total value of the account at payment date is 20,000
Because it is done within 10 days it will give a 5% discount because the term are 5/15 (5% discount within the first 15 days) n/30 (nominal AKA no discount within 30 days)
So 20,000 sale x 5% discount = $1,000 discount
lastly, nominal - discount = cash outflow
$20,000 - $1,000 = $19,000
Resuming:
Cash debit for 19,000 (cash receive fro mthe customer)
Sales Discount debit for 1,000 (discount according to the sales term)
Account receivable credit for 20,000 (write-off the account)
The journal entry to record the cash receipt for the sale if the payment is received within 10 days of the invoice date would include a debit to Cash for $19,000, a debit to Sales Discount for $1,000, and a credit to Accounts Receivable for $20,000. Thus, option B is correct.
What is Journal entry?A Journal entry can be defined as an accounting record in which the transaction is being made. Every commerce has two reactions and all these are being accounted for with the help of a journal entry.
The information provided is:
The business received $24,000 for the goods it sold.
The customer then returns 4,000.
The user's account total worth at the time of payment was $20,000.
Since the term is 5/15, n/30, it will grant a 5% reduction because it is completed within 10 days
20,000 sales x 5% off is $1,000 off.
Last but not least, nominal - discount = cash outflow
$20,000 - $1,000 = $19,000
The calculation willl be:
19,000 in cash is deducted (cash receive from the customer)
For 1,000, the sales discount is debited (discount according to the sales term)
20 000 in credit for accounts receivable (write-off the account)
Therefore, option B is the correct option.
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Ray was chosen by his boss to lead a team of coworkers during a companywide project. Ray spent a lot of time getting to know each of his individual team members and fostering intergroup relationships. Throughout the project, the people on Ray's team developed a deep sense of unity and relatedness to one another. Which characteristic of servant leadership best describes Ray's methods? A. Conceptualization B. Stewardship C. Awareness D. Building community
Answer: Building community is the characteristic of servant leadership that best describes Ray's methods
Explanation:
Building community is sought out by leaders since they see the evolution of administration as diffident away from creating assemblage within workers. Having a sense of community in a administration is important because it evolves positive relation that makes completing project effortless.
Answer:
The correct answer would be option D, Building Community.
Explanation:
Servant Leadership is one of the many leadership styles. This is the type of leadership in which the main purpose of the leader is to serve the members of the group under him.
So in this example, Ray was very much serving his team members. He spent a lot of time with members to foster group relationships. So due to his efforts, the group members of Ray's team developed a deep sense of unity and relatedness to each other. So Ray's Method best describes the Building Community characteristic of Servant Leadership Style.
It took you four months to find a job, and you were almost out of money, when you finally landed your position. Today your boss asked you to do something you think is unethical, but she assures you that it is normal for this industry. You aren’t sure what the corporate culture is yet because you are new at the company. You also aren't sure if she's telling you the truth or not. How do you respond?
Answer:
research.
Explanation:
you do research on it, seperate from the company. you need to be prepared to make a decision, and not just rush into it.
Calculate the presentvalue of $5,000 received five years from today if your investments pay a. 6 percent compounded annually b. 8 percent compounded annually c. 10 percent compounded annually d. 10 percent compounded semiannually e. 10 percent compounded quarterly
Answer: 3736.30 , 3402.90 , 3104.60 , 3069.56 , 3051.35
Explanation: We can compute present values by using the following formula :-
[tex]=\:present\:value\:=\frac{future value}{\left ( 1+interest\:rate\right )^{no. of periods}}[/tex]
[tex]=\:present\:value\:=\frac{5000}{\left ( 1+o.o6\right )^{1}}[/tex] = 3736.30
[tex]=\:present\:value\:=\frac{5000}{\left ( 1+o.08\right )^{1}}[/tex] = 3402.90
[tex]=\:present\:value\:=\frac{5000}{\left ( 1+o.1\right )^{1}}[/tex] = 3104.60
[tex]=\:present\:value\:=\frac{5000}{\left ( 1+o.1\right )^{2}}[/tex] = 3069.56
[tex]=\:present\:value\:=\frac{5000}{\left ( 1+o.1\right )^{4}}[/tex] = 3051.35
A surplus or shortage in the money market is eliminated by adjustments in the price level according to classical theory, but not liquidity preference theory. liquidity preference theory, but not classical theory. neither liquidity preference theory nor classical theory. both liquidity preference theory and classical theory.
Answer:
The correct answer is option A.
Explanation:
According to the classical theory, the quantity of money is directly related to price level. So, any shortage or surplus in the money market can be corrected by increasing or decreasing price level.
According to the liquidity preference theory, however, money is demanded for transactionary, precautionary and speculative motive. So, only price level does not affects the quantity of money. Interest rates also effect the demand for money.
So, option A is the correct answer.
Final answer:
A surplus or shortage in the money market is eliminated by adjustments in the price level according to liquidity preference theory, but not classical theory.
Explanation:
In the context of the money market, a surplus or shortage is eliminated by adjustments in the price level according to liquidity preference theory, but not classical theory.
In classical theory, the money market is assumed to be in equilibrium at all times, with any surplus or shortage quickly eliminated by adjustments in the price level. However, in liquidity preference theory, changes in the money supply can lead to changes in interest rates, which in turn affect the demand for money and the equilibrium in the money market.
In summary, the correct answer is liquidity preference theory, but not classical theory.
Why are intermediate goods not included in GDP?a. to avoid counting them twice in GDPb. to make sure only nondurable goods are included in GDPc. to keep goods that are not bought and sold out of the GDPd. to ensure that only goods produced in the US are included in GDP
Answer: Option (a) is correct.
Explanation:
Correct option (a): to avoid counting them twice in GDP.
Intermediate goods are the goods which are utilize in the production of final goods. Intermediate goods are like inputs in the production of final goods.
While calculating GDP of an economy, it includes the market value all the final goods and services that are produced in an economy.
While calculating GDP from value added method, this includes the value of all the stages that are included in the production of final goods.
So, the value of intermediate goods is not included in GDP, this is happened to avoid counting them twice in GDP.
Intermediate goods are not included in GDP to prevent counting them twice. They are the goods used in production, and their value is already embodied in the final goods' price.
Explanation:The reason intermediate goods are not included in Gross Domestic Product (GDP) is option 'a', to avoid counting them twice. Intermediate goods are goods used in the production of other goods. They are part of the cost of producing the final goods. Thus, their value is already included in the final goods' market price. If we count intermediate goods separately, we would be double-counting them leading to an inflated and inaccurate measure of GDP.
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Mary, a CPA, prepared Gordon’s tax return for the current year. In preparing his return, she took a deduction that is contrary to the Code. She feels that he is entitled to this deduction because of her belief that possible confl icts exist between two sections of the Internal Revenue Code. Is Mary in conflict with the AICPA “Statements on Responsibilities in Tax Practice”?
Answer: YES, marry is in conflict.
Explanation: As being a certified public accountant it is responsibility of mary to correctly prepare the tax return for the client. However, she took a deduction that is contrary to the code hence she failed to do her work properly. Now, gordon would have to bear the additional tax in case of correction of the error in deduction made by his CPA.
Which of the following statements is true of job sequencing? a. It is the pattern where an individual steps off the career track or plateaus to accommodate the demands of raising children. b. It is a form of job rotation where employees move from one major organizational function to another. c. It allows engineering and technical professionals a chance to advance without moving into management. d. It is the primary cause of career plateaus.
Answer:
The answer is (A) it is the pattern where an individual step off the career track or plateaus to accommodate the demands of raising children.
Explanation:
Sequencing occurs, more often than not, to women who choose to bear children and take care of them at home. It refers to the idea that individuals who choose to raise children, must choose to forgo their professional pursuits by changing their focus to managing the family life, for a period of time that they have decided on. Thus, after those time period, the individual can then shift their focus again to their professional pursuits.
Liability management refers to: a bank's handling of the assets in individual trust funds. a bank's handling of loans and other assets. how a bank attracts deposits and what it pays for them. how a bank manages its accounts receivable.
Answer:
Liability management refers to how a bank handles it loans and other assets.
Explanation:
Liability management is a practice adopted by banks to keep a balance between assets and liabilities, so that they possess enough liquidity to facilitate lending and also a healthy balance sheet is maintained. Banks need to keep a balance between maturity of their assets and liabilities. It is a mechanism to address the risk of mismatch in bank's assets and liabilities.
3M Co. reports beginning raw materials inventory of $902 million and ending raw materials inventory of $855 million. 3M purchased $3,646 million of raw materials during the year. What is the amount of raw materials it used during the year
Answer:
$3693 million
Explanation: The materials used in the primary stage of production is called
raw materials. These are the basic materials used for production.
.
Raw material used is the amount of raw materials consumed by the entity
in a specific period , generally a year .
.
Raw materials used = begining invetory + purchased inventory - ending invetory
therefore,
Raw materials used = $902 million + $3646 million - $855 million
= $3693 million
To find the amount of raw materials used during the year, use the formula Beginning Inventory + Purchases - Ending Inventory.
Explanation:To find the amount of raw materials used during the year, we need to calculate the change in raw materials inventory. The beginning inventory was $902 million and the ending inventory was $855 million. The formula to calculate raw materials used is: Beginning Inventory + Purchases - Ending Inventory.
Plugging in the values, we get: $902 million + $3,646 million - $855 million = $3,693 million. Therefore, 3M Co. used $3,693 million of raw materials during the year.