The book value of the truck at the end of Year 1, using the double-declining-balance method, is $24,750 after accounting for a depreciation expense of $8,250.
To calculate the book value of the truck at the end of Year 1 using the double-declining-balance method, we first determine the depreciation rate. The double-declining rate is twice the straight-line rate, so for an 8-year useful life, the straight-line rate is 1/8, or 12.5%. Therefore, the double-declining rate is 25%.
The annual depreciation expense for the first year is then 25% of the truck's cost, excluding the salvage value, since the double-declining-balance method does not consider the salvage value in the first year's calculation. Hence, the depreciation for the first year is 25% of $33,000, which is $8,250. To find the book value at the end of Year 1, subtract this depreciation expense from the original cost of the truck:
Original cost of the truck: $33,000Year 1 depreciation expense: $8,250Book value at the end of Year 1: $33,000 - $8,250 = $24,750Video Planet (“VP”) sells a big screen TV package consisting of a 60-inch plasma TV, a universal remote, and on-site installation by VP staff. The installation includes programming the remote to have the TV interface with other parts of the customer’s home entertainment system. VP concludes that the TV, remote, and installation service are separate performance obligations. VP sells the 60-inch TV separately for $2,040, sells the remote separately for $120, and offers the installation service separately for $240. The entire package sells for $2,300. Required: How much revenue would be allocated to the TV, the remote, and the installation service?
Answer:
TV 1,955
REMOTE 115
INSTALLATION 230
Explanation:
We are going to calculate the total sum of the element of the offer and then cross-multiply
[tex]\left[\begin{array}{ccc}$TV&2040&a\\$Remote&120&b\\$Installation&240&c\\$Total&2400&2300\\\end{array}\right][/tex]
[tex]a = \frac{2040}{2400 } * 2300 = 1,955[/tex]
[tex]b = \frac{120}{2400 } * 2300 = 115[/tex]
[tex]c = \frac{240}{2400 } * 2300 = 230[/tex]
To allocate the revenue to the TV, remote, and installation service, we use the relative standalone selling price method. The allocation for the TV is $1,950, for the remote is $115, and for the installation service is $235.
Explanation:To allocate the revenue to the TV, remote, and installation service, we need to determine the standalone selling prices of each component. The standalone selling prices are the prices at which each component is sold separately. According to the information given, the standalone selling price of the TV is $2,040, the standalone selling price of the remote is $120, and the standalone selling price of the installation service is $240.
To calculate the allocation of revenue, we can use the relative standalone selling price method. This method allocates revenue based on the proportionate value of each component in relation to the total standalone selling price of all components.
The total standalone selling price is $2,400 ($2,040 + $120 + $240). To calculate the allocation for the TV, we divide the standalone selling price of the TV by the total standalone selling price and multiply it by the total package price.
Allocation for TV = ($2,040 / $2,400) * $2,300 = $1,950
Similarly, we can calculate the allocations for the remote and installation service.
Allocation for remote = ($120 / $2,400) * $2,300 = $115
Allocation for installation service = ($240 / $2,400) * $2,300 = $235
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
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.
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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Miller Company sells several products. Sales reports show that the sales volume of its most popular product has increased the past three quarters while overall profits have decreased. How might production cost reports assist management in making decisions about this product?
Production cost reports can assist management in making decisions about the most popular product by providing information on the cost of producing and selling the product. By analyzing these reports, management can identify any cost drivers or inefficiencies in the production process, and take steps to address them.
Explanation:Production cost reports can assist management in making decisions about the most popular product by providing information on the cost of producing and selling the product. By analyzing these reports, management can identify any cost drivers or inefficiencies in the production process, and take steps to address them. For example, if the sales volume of the product has increased but overall profits have decreased, it may indicate that the cost of producing the product has also increased. Management can use the cost reports to identify areas where they can reduce costs, such as renegotiating supplier contracts or optimizing the production process.
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Splish Brothers Inc. started the year with total assets of $322000 and total liabilities of $262000. During the year the business recorded $635000 in revenues, $329000 in expenses, and dividends of $57000. Stockholders’ equity at the end of the year was:
Answer:
Ending Equity 235,000
Explanation:
assets = liabilities + equity
We post our know values to solve for equity
322,000 = 262,000 + equity
322,000 - 262,000 = equity
beginning equity 60,000
net income = revenues - expenses
635,000 - 329,000 = 232,000 net income
dividends 57,000
beginning equity + net income - dividends = ending equity
60,000 + 232,000 - 57,000 = 235,000 ending equity
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.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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Blackwelder Factory produces two similar products-small lamps and desk lamps. The total plant overhead budget is $643,000 with 503,000 estimated direct labor hours. It is further estimated that small lamp production will require 284,000 direct labor hours and desk lamp production will need 219,000 direct labor hours. Using the single plantwide factory overhead rate with an allocation base of direct labor hours, how much factory overhead will Blackwelder Factory allocate to desk lamp production if actual direct hours for the period is 188,000. a. $551,982 b. $971,340 c. $240,640 d. $402,360
Answer:
c. $240,640
Explanation:
[tex]\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate[/tex]
we have to distribute the overhead cost over the cost driver
643,000 / 503,000 = 1.27833 = 1.28 rate
then we multiply this rate by the actual hours of desk lamp production
actual desk lamp hours x rate = alllocated MO
188,000 x 1.28 = 240,640
The factory overhead allocated to desk lamp production, using the single plantwide factory overhead rate and the actual direct hours for the period of 188,000, is $240,640.
Explanation:To calculate the overhead allocated to desk lamp production using a single plantwide factory overhead rate based on direct labor hours, first determine the overhead rate per labor hour by dividing the total plant overhead budget by the estimated direct labor hours. The total plant overhead budget is $643,000 and the estimated direct labor hours are 503,000 hours. Therefore, the overhead rate is $643,000 / 503,000 = $1.28 per labor hour.
Next, we multiply this rate by the actual direct labor hours for the desk lamp production to find the allocated overhead. If the actual direct hours for desk lamp production is 188,000 hours, the allocated overhead will be 188,000 hours x $1.28 = $240,640.
Thus, the factory overhead allocated to desk lamp production is $240,640, which corresponds to option c.
Mauro Products distributes a single product, a woven basket whose selling price is $16 per unit and whose variable expense is $12 per unit. The company’s monthly fixed expense is $10,000. Required: 1. Calculate the company’s break-even point in unit sales. 2. Calculate the company’s break-even point in dollar sales. (Do not round intermediate calculations.) 3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? (Do not round intermediate calculations.)
Answer:
1. 2,500 units
2. $40,000
3. Revised Unit Sales - 2,650 units & Revised dollar sales - $42,400
Explanation:
Break even Point : The break even point is that point in which the firm has no profit or no loss or we can say that total revenue is equal to total expenditure.
1. Computation of break-even point in unit sales:
Break even point in unit sales = Fixed cost ÷ (Sales per unit - variable cost per unit)
= $10,000 ÷ ($16 - $12)
= 2,500 units
where, contribution = Sales per unit - variable cost per unit
Thus, the break-even point in unit sales is 2,500 units.
2. Calculation of break-even point in dollar sales :
The formula is shown below:
= Fixed cost ÷ Profit volume ratio
where, Profit volume ratio = (Contribution ÷ Sales) × 100
= ($4 ÷ $16) × 100
= 25%
So, Break even point in dollar sales = $10,000 ÷ 25%
= $40,000
Thus, the Break even point in dollar sales is $40,000
3. Calculation of new break-even point in unit sales is shown below:
Revised Fixed cost = $10,000 +$600 = $10,600
And, contribution is same.
So, new break-even point in unit sales = Fixed cost ÷ Contribution per unit
= $10,600 ÷ $4
= 2,650 units
Thus, new break-even point in unit sales is 2,650 units.
By applying the formula, the calculation of new break-even point in dollar sales is shown below:
New break-even point (BEP) in dollar sales = Fixed cost ÷ Profit volume ratio
Since, the Profit volume ratio remains same.
So, break-even point (BEP) in dollar sales = $10600 ÷ 25%
= $42,400
Hence, New break-even point (BEP) in dollar sales is $42,400
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%.
The most recent financial statements for Alexander Co. are shown here: Income Statement Balance Sheet Sales $ 43,100 Current assets $ 17,660 Long-term debt $ 37,120 Costs 35,600 Fixed assets 68,400 Equity 48,940 Taxable income $ 7,500 Total $ 86,060 Total $ 86,060 Taxes (22%) 1,650 Net income $ 5,850 Assets and costs are proportional to sales. The company maintains a constant 40 percent dividend payout ratio and a constant debt-equity ratio. What is the maximum dollar increase in sales that can be sustained assuming no new equity is issued? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
$3,328.61
Explanation:
In this question to find out the maximum dollar increase in sales without issuing new equity , we need to take help of sustainable growth rate, whose formula =
(Return on equity x Retention ratio) / [1 - (Return on equity x Retention ratio)]
Here we need to take out the sustainable growth rate and multiply it by total sales .
So lets take out the sustainable growth rate by first calculating its components -
Return on equity = Net income / Total equity
= $5,850 / 48,940
= .1195
Retention ratio = 1 - Dividend payout ratio
= 1 - 40%
= 1 - .4
= .6
Now calculating substantial growth rate =
(Return on equity x Retention ratio) / [1 - (Return on equity x Retention ratio)]
= (.1195 x .6) / [1 - (.1195 x .6)]
= .0717 / [1 - .0717]
= .0717 / .9283
= .07723 ( multiplying by 100 to make in percentage)
= 7.723%
Now multiplying this by total sales,
MAXIMUM INCREASE IN SALES = $43,100 X 7.723%
= $ 3,328.61
Final answer:
To calculate Alexander Co.'s maximum sustainable sales increase without new equity, first determine the retention ratio by subtracting the dividend payout ratio from one. Then, calculate the return on equity and the sustainable growth rate. Multiply the sustainable growth rate by the current sales to find the maximum dollar increase in sales.
Explanation:
The student is asking how to calculate the maximum increase in sales that can be supported without issuing new equity for Alexander Co., given its financial statements and some operational constraints that include a constant dividend payout ratio and a constant debt-equity ratio. When assets and costs are proportional to sales, we can use the sustainable growth rate formula, which is the rate at which equity grows without the need for additional external financing. To find the maximum dollar increase in sales, we calculate the sustainable growth rate (SGR) and apply it to current sales.
First, calculate the retention ratio (b) as 1 minus the dividend payout ratio. The dividend payout ratio is 40%, so b = 1 - 0.40 = 0.60. The return on equity (ROE) can be found by dividing net income by equity, ROE = $5,850 / $48,940. The sustainable growth rate (SGR) is then ROE multiplied by the retention ratio, SGR = ROE * b. Finally, the maximum increase in sales (Increase in Sales) is calculated as SGR times the current sales, Increase in Sales = SGR * $43,100. Doing these calculations gives us the maximum dollar increase in sales Alexander Co. can sustain without issuing additional equity.
How would a bicycle producer likely react to a shortage of its product?a. by holding special clearance sales of its inventoryb. by keeping storers open longer hoursc. by raising prices and reducing quantity supplyd. by raising prices and increasing quantity supply
Answer:
The correct option here is D) by raising prices and increasing quantity supply.
Explanation:
If a producer knows that the product in which he or she deals is in shortage in the overall market , then the producer will increase the prices of that product because in the market its supply is less than the demand , which means producer can increase the prices of its products and consumers would have to buy the product at that price only if they want to satisfy their need . Also producer would want to increase the quantity of its products too because with high prices and more sales, the producer would be able to book higher profits.
River Falls Manufacturing uses a normal cost system and had the following data available for 2018: Direct materials purchased on account $148,000 Direct materials requisitioned 88,000 Direct labor cost incurred 127,000 Factory overhead incurred 148,000 Cost of goods completed 299,000 Cost of goods sold 250,000 Beginning direct materials inventory 34,000 Beginning WIP inventory 70,000 Beginning finished goods inventory 55,000 Overhead application rate, as a percent of direct-labor costs 105 percent The ending balance of work-in-process inventory is
Answer:
The ending balance of work-in-process inventory is $64,000
Explanation:
Opening Raw Material = $34,000
Opening WIP Inventory = $70,000
Opening Finished Goods Inventory = $55,000
Raw material purchased = $148,000
Raw materials requisitioned = $88,000
Closing Raw Material = Opening + Purchase - Requisitioned
= $34,000 + $148,000 - $88,000 = $94,000
Closing Finished Goods Inventory = Opening + Cost of goods produced - Cost of goods sold
= $55,000 + $299,000 - $250,000 = $104,000
Expense total incurred on goods entered for production = Material requisitioned + Labor cost incurred + Factory overhead
= $88,000 + $127,000 + $148,000 = $363,000
Out of which cost of completed goods = $299,000
Thus remaining is work in process = $363,000 - $299,000 = $64,000
That is Closing WIP Inventory = $64,000
Note: It is obvious that the expense of labor and overheads incurred in this period includes expense incurred to convert opening WIP in to finished goods and the balance is closing WIP.
The ending balance of work-in-process inventory is $64,000
The ending balance of work-in-process inventory for River Falls Manufacturing is $119,350, calculated by adding the beginning WIP inventory with the total manufacturing costs and subtracting the cost of goods completed.
Explanation:To determine the ending balance of work-in-process (WIP) inventory for River Falls Manufacturing, we use the following formula:
Total manufacturing costs = Direct materials used + Direct labor + Factory overhead applied
We already have the direct materials used (which is the direct materials requisitioned), direct labor, and we calculate the factory overhead applied by using the overhead application rate given. The overhead rate is 105% of direct labor costs, so factory overhead applied would be 105% x Direct labor cost incurred.
For 2018:
Direct materials requisitioned = $88,000
Direct labor cost incurred = $127,000
Factory overhead applied = 105% x $127,000 = $133,350
Total manufacturing costs = $88,000 + $127,000 + $133,350 = $348,350
Now we total the WIP beginning balance with the total manufacturing costs and subtract the cost of goods completed to find the ending WIP inventory.
Ending WIP inventory = (Beginning WIP inventory + Total manufacturing costs) - Cost of goods completed
Ending WIP inventory = ($70,000 + $348,350) - $299,000
Ending WIP inventory = $119,350
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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
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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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.
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
Twisty Pretzel Company produces bags of pretzels that are sold in cases and retailed throughout the United States. Its normal selling price is $30 per case; each case contains 15 bags of pretzels. The variable costs are $19 per case. Fixed costs are $25,000 for a normal production run of 5,000 cases per month. Twisty Pretzel received a special order from an existing customer which it could accommodate without exceeding capacity. The order was for 1,500 units at a special price of $20 per case; a variable selling cost of $1 per case included in the variable costs would not be relevant for this order. If the order is accepted, the impact on operating income would be a(n) ________.
Answer:
The impact on operating income would be an increase in the operating income by $3000
Explanation:
Twisty pretzel company has received an order for 1500 units at a special price of $20 per case, so the revenue which twisty pretzel can make on this order is =
REVENUE = Number of units made x Selling price
= 1500 x $20
= $30,000
Now it is told to us that initial variable cost per case is $19 but here as per new order the variable selling cost of $1 included in the variable cost would now become excluded , so therefore the variable cost for this order would be $19 - $1 = $18 per case
COST = Number of units x Cost price
= 1500 x $18
= $27,000
so by subtracting the cost from revenue we get the increase in operating income,
=$30,000 - $27,000
= $3000
Answer:it would become a question
Explanation:
he following information applies to the questions displayed below:Wendell's Donut Shoppe is investigating the purchase of a new $18,600 donut-making machine. The new machine would permit the company to reduce the amount of part-time help needed, at a cost savings of $3,800 per year. In addition, the new machine would allow the company to produce one new style of donut, resulting in the sale of 1,000 dozen more donuts each year. The company realizes a contribution margin of $1.20 per dozen donuts sold. The new machine would have a six-year useful life. (Ignore income taxes.)Requirements:1. What would be the total annual cash inflows associated with the new machine for capital budgeting purposes?Total annual cash inflows $ 2. Find the internal rate of return promised by the new machine. (Round your answer to two decimal places.)Internal rate of return %3. In addition to the data given previously, assume that the machine will have a $4,125 salvage value at the end of six years. Under these conditions, compute the internal rate of return. (Round your answer to two decimal places.)Internal rate of return %
Final answer:
The total annual cash inflows associated with the new donut-making machine for Wendell's Donut Shoppe are $5,000. To find the internal rate of return, both with and without including salvage value, a financial calculator or specialized software would be required due to the complexity of the IRR calculation.
Explanation:
To calculate the total annual cash inflows associated with the new donut-making machine for Wendell's Donut Shoppe, we need to consider two factors: the cost savings from reduced part-time help and the additional revenue from the sale of the new donut style.
Cost Savings: $3,800 per year.Additional Revenue: 1,000 dozen donuts * $1.20 per dozen = $1,200 per year.Add these together to get the total annual cash inflows: $3,800 + $1,200 = $5,000 per year.
To find the internal rate of return (IRR) for the new machine without considering the salvage value, we would use the IRR formula that considers the initial outlay, annual cash inflows, and the life of the machine. The calculation would require either financial calculator or specialized software due to the complexity of the formula.
When incorporating a salvage value of $4,125 at the end of six years, the IRR calculation would change to include this end-of-period cash inflow. The calculation would become more complex, and again, a financial calculator or specialized software will be needed.
Holmes Company produces a product that can either be sold as is or processed further. Holmes has already spent $86,000 to produce 2,400 units that can be sold now for $67,500 to another manufacturer. Alternatively, Holmes can process the units further at an incremental cost of $260 per unit. If Holmes processes further, the units can be sold for $395 each. Compute the incremental income if Holmes processes further.
Answer:
The incremental income if processes further is 256,500
Explanation:
We need to compare the income on each stage:
currently
67500 revenues
- 86000 cost =
-18500 loss
further process
revenues$ 395x 2,400 units 948,000
cost
86,000 Beginning (previous stage cost)
2,400 units x $260. each
624,000 added during the process
total cost 710,000
revenues - total cost = income
948,000 - 710,000 = 238,000
incremental income
[tex]incremental \: income = next \: stage \: income - current \: stage \: income[/tex]
238,000 - (-18,500) = 256,500
When calculating the incremental income for the Holmes Company, we find that if they choose to process their product further, the incremental income would be $324,000. This is calculated by subtracting the cost to further process the units from the total revenue gained by selling the processed units.
Explanation:The Holmes Company has a decision to make regarding whether to sell their product as is, or process it further to receive a higher selling price. The cost to produce the 2400 units is $86,000, and could be sold as is for $67,500, or processed further at a cost of $260 per unit and then sold for $395 each.
First, let's calculate the incremental cost if Holmes processes the product further: The incremental cost to process the 2400 units is 2400 units * $260/unit = $624,000. If these units are then sold at $395 each, the total revenue would be 2400 units * $395/unit = $948,000.
The incremental income would then be calculated by taking the total revenue from selling the processed units and subtracting the cost to process them further. So, the incremental income would be $948,000 - $624,000 = $324,000. Therefore, if Holmes chooses to process the units further, the incremental income would be $324,000.
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The adjusted trial balance of Antoine Corporation at December 31 shows that sales revenue for the year was $ 540,000 and other revenue was $ 49,000. Cost of goods sold for that same period was $ 290,000, while other expenses totaled $ 230,000. The corporation declared and paid dividends of $ 14, 000 during the year. The balance of retained earnings before closing entries was $ 475,000. Prepare the closing entries for revenues, expenses, dividends for the year. (Record debits first, then credits. Exclude explainations from any. Begin by recording the entry to close out the revenue accounts)
Answer:
sales revenue 540,000
other revenue 49,000
income summary 589,000
to close revenue accounts
income summary 520,000
COGS 290,000
other expenses 230,000
to close expense accounts
income summary 14,000
dividends 14,000
to close dividends expense
income summary 55,000
Retained Earnings 55,000
Explanation:
We use incomme summary to close the temporary accounts.
The revenues has credit normal balance, so we debit them to close them.
The expenses has debit normal balance so we credit to close them.
We do this using the income summary account to balance the entries.
We also close dividends account against Income Summary
Finally we move the balance of income summary to retained earnings
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
Scarlett Corp. uses no debt. The weighted average cost of capital is 6.4 percent. The current market value of the equity is $27 million and the corporate tax rate is 35 percent. What is EBIT? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16)
Answer:
EBIT = 2,658,461.54
Explanation:
Assuming the Company fullfil his expected return
Equity x WACC = Net Income
27,000,000 x 0.064 = 1,728,000 Net Income
Net income x (1-tax-rate) + interest = EBIT
1,728,000 x (1-.35) + 0 = EBIT
EBIT = 2,658,461.54
If Scarlett Corp uses no debt, then thre are no interest.
Suppose that an particular economy has a real GDP of 24.0 trillion in 2004. It grows to 30.0 trillion in 2005. Meanwhile, the national debt was 16.0 trillion in 2004. In 2005 the federal government ran a budget deficit of 1.6 trillion, which was totally financed by borrowing. Given this set of circumstances the national debt as a percentage of real GDP has A. decreased. B. increased. C. remained constant. D. doubled.
Answer:
A. decreased
Explanation:
Debt / GDP ratio is one of the indicators of the health of an economy. It is the amount of a country's public debt as a percentage of its Gross Domestic Product (GDP).
For 2004 figures, in the economy in question, the ratio was 16 trillion / 24 trillion = 0.66
In 2005 GDP jumped to 30 trillion and debt increased to 17.6 trillion. Thus, the ratio was 17.6 rail / 30 rail = 0.58
The economy's debt-to-GDP ratio has declined, a good indication that the economy produces a large number of goods and services and that it probably has profits that are high enough to repay its debts.
The national debt as a percentage of real GDP has increased. So, option B is correct.
The national debt as a percentage of real GDP has increased.
To determine this, we calculate the debt/GDP ratio for both years. In 2004, the debt/GDP ratio was 16.0/24.0 = 0.67 or 67%. In 2005, it was 17.6/30.0 = 0.587 or 58.7%. Since 58.7% is less than 67%, the debt/GDP ratio has increased.
August, Inc. had the following transactions in 2018, its first year of operations:
• Issued 29,000 shares of common stock. The stock has par value of $2.00 per share and was issued at $14.00 per share.
• Issued ,500 shares of $200.00 par value preferred stock at par.
• Earned net income of $39,000. bullet• Paid no dividends.
At the end of 2018, what is total stockholders' equity?
Answer:
Total 545,000
Explanation:
29,000 x 2 = 58,000 common stock
29,000 x 12 = 348,000 additional paid-in capital
500 x 200 = 100,000 preferred stock
Net income 39,000
Dividends none
Total 545,000
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.
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.
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.
A new manager starts his work by talking with each member of his team, getting to know their strengths and weaknesses, and helps them create a plan to build their individual skills and develop their talents.According to Goleman’s model, which type of leadership is exemplified in this scenario?
Answer: the correct answer is coaching leadership.
Explanation:
The Coaching Leadership Style is a relatively new and guiding leadership style. The leader has these skills when he is able to develop and improve the performance and competences of his employees. The basis of the Coaching Leadership Style is the dynamic interaction between the leader and the employee.