Answer:
$20.
Explanation:
Given that
Selling price per unit is $50
Variable cost per unit is $30
And, the fixed cost per unit is $5
As we know that the profit would be
= Selling price per unit - variable cost per unit - fixed cost per unit
It is given that if the company sells one unit extra so the profit would remain the same i.e $20 because the fixed cost remains the same
Hence, the correct option is B
Final answer:
The profit for selling one unit in excess of the break-even volume, given the costs and sales price provided, is $15.
Explanation:
If Sanderson sells a single product for $50 that has a variable cost of $30, and fixed costs amount to $5 per unit when anticipated sales targets are met, we can calculate the profit for selling one unit in excess of the break-even volume. First, let's determine the profit per unit.
The selling price minus the variable cost gives us a contribution margin of $20 per unit ($50 - $30). When one unit is sold beyond the break-even point, fixed costs are already covered, so the profit for that extra unit would simply be the contribution margin minus the fixed cost per unit. Thus, profit = $20 (contribution margin) - $5 (fixed cost per unit) = $15.
Darlington Inc., permits any of its employees to buy shares directly from the company. There are no brokerage fees and shares can be purchased at a 10% discount. During May, employees purchased 14,000 shares at a time when the market price of the shares was $10 per share. Prepare the appropriate journal entry for the May purchase. (
Answer: Please refer to Explanation
Explanation:
The following is the appropriate journal entry.
DR Bank Account (14,000 * 10 - 10%) $126,000
DR Employee Compensation Expense (10% * $140000) $14,000
CR Share Capital Account $140,000
(To record issue of shares to employees)
If you need any clarification do comment.
Answer:
Dr Cash 126,000
Dr Compensation expense 14,000
Cr Common stock 14,000
Cr Paid-in capital—in excess of par 126,000
Explanation:
Darlington Inc Journal entry
Dr Cash ($10 x 14,000 x 90%) 126,000
Dr Compensation expense ($10 x 14,000 x 10%) 14,000
Cr Common stock ($1 x 14,000) 14,000
Cr Paid-in capital—in excess of par ($9 x 14,000) 126,000
One disadvantage of a functional structure is that _____.
1.it does not allow the setting up of cross-functional teams
2.it cannot be converted into an ambidextrous structure
3.it does not facilitate rich and extensive communication between members of the same department
4.it frequently lacks effective communication channels across departments
Answer:
It frequently lacks effective communication channels across department.
Explanation:
A functional structure is an organizational structure that is used to coordinate employees on the basis of their various skills. It helps in the categorizing of workers into smaller groups based on their area of specialty.
Advantages of functional structure include:
1) The grouping of workers into their area of specialty makes the work more efficient.
2) The individuals in a group share their various knowledge to make productivity faster.
Diasvantages of functional structure include:
1) There could be a lack of coordination among the workers.
2) Competition may arise between individuals in a group.
1. Universal Claims Processors processes insurance claims for large national insurance companies, most claim processing is done by a large pool of computer operators, some of whom are permanent and some of whom are temporary. The company has 40 computer workstations for operators. A permanent operator can process 16 claims per day, whereas a temporary operator can process 12 per day. On average, the company processes at least 450 claims each day. A permanent operator generates about 0.5 errors per day, whereas a temporary operator generates about 1.4 errors per day. The company wants to limit claims with error to 25 per day. A permanent operator is paid $64 per day and a temporary operator is paid $42 per day. The company wants to determine the number of permanent and temporary operators to hire to minimize costs.
Find the attachments for step by step solution
Figure Help
The given linear programming problem consists of feasible region.
Explanation
The points are plotted on coordinate axes and obtain the feasible region and optimum solution.
The question involves finding the optimal allocation of permanent and temporary workers for a claim processing company using the techniques of linear programming. The aim is to minimize cost while also meeting daily processing requirements and keeping errors within acceptable levels.
Explanation:This question can be framed as a problem of linear programming, which is a mathematical model used in operations research. The objective function here is cost minimization for Universal Claims Processors, provided they meet the minimum output of 450 claims per day and do not exceed 25 errors. Therefore, the company needs to balance the number of permanent and temporary operators per day based on their productivity (16 and 12 claims respectively), error rates (0.5 and 1.4 errors respectively), and salaries ($64 and $42 respectively).
Let's denote the number of permanent operators as p and the number of temporary operators as t. We need to solve the following equations to minimize costs:
Constraintsp + t ≤ 40 (due to the number of workstations)16p + 12t ≥ 450 (to meet the claim processing requirement)0.5p + 1.4t ≤ 25 (to maintain an acceptable error rate)Objective FunctionMinimize C = 64p + 42t (to minimize costs)
This problem can be solved using linear programming techniques.
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When we compare the factors of production in wealthy and poor nations, we find: A. poor nations have plenty of land and knowledge, but very little labor.B. poor and wealthy nations (both) have an abundance of knowledge, it is the land that varies, with rich nations always having more.C.wealthy nations have knowledge and entrepreneurial opportunities, while poor nations are often lacking in these areas.D. wealthy nations have land and labor, while poor nations have capital and entrepreneurship
Answer:
C.wealthy nations have knowledge and entrepreneurial opportunities, while poor nations are often lacking in these areas
Explanation:
Factors of production includes:
1. Land - land includes all natural resources
2. Capital - includes machinery, tools used in the production of goods and services
3. Labour - includes all human effort expended in the production of goods and services
4. Entrepreneurship - coordinates all factors of production.
Poor countries have high levels of illiteracy, so they don't have an abundance of knowledge. Poor countries are usually overpopulated, so they usually have high Quanitity of labour.
On the other hand, rich countries have high literacy levels, so, they have an abundance of knowledge.
I hope my answer helps you
Wealthy nations tend to have access to advanced knowledge and entrepreneurial opportunities, utilizing the latest production technologies and enjoying robust education and infrastructure. Poor nations often lack these resources. The concept of comparative advantage shows that wealthy nations are usually capital-rich relative to their labor force, affecting their economic performance.
When looking at the factors of production in wealthy and poor nations, a significant difference lies in access to knowledge and entrepreneurial opportunities. Wealthy nations typically have access to advanced production technologies and state-of-the-art machinery, as well as sophisticated education systems and infrastructure. This provides them with a technology frontier where they use the most advanced production techniques available. In contrast, poor nations often lack these resources, and their factories may not use modern machinery or sophisticated production techniques, which are crucial for productivity and economic growth.
Additionally, the concept of comparative advantage and factor endowments suggests that wealthy countries, like the United States, are often well endowed with physical capital relative to their labor force. In contrast, many less developed countries have larger labor forces with less physical capital. This contributes to the differences in economic performance, as rich countries can produce capital-intensive goods more efficiently, while poorer countries might specialize in labor-intensive goods.
The disparity in capital availability also means that wealthy nations, surprisingly, may still attract investment despite poorer nations having a higher return on investment potential, due to other inputs such as human capital, social infrastructure, and natural resources that influence economic outcomes.
On July 1, 2019, Pharoah Company purchased new equipment for $80,000. Its estimated useful life was 8 years with a $16,000 salvage value. On January 1, 2022, before making its depreciation entry for 2022, the company estimated the remaining useful life to be 10 years beyond December 31, 2022. The new salvage value is estimated to be $5,000. (a) Correct answer iconYour answer is correct. Prepare the journal entry to record depreciation on December 31, 2019.
Final answer:
The straight-line depreciation for Pharoah Company's equipment acquired on July 1, 2019, for the year ending December 31, 2019, is $8,000. This is recorded with a debit to Depreciation Expense and a credit to Accumulated Depreciation - Equipment.
Explanation:
To calculate depreciation for the equipment purchased by Pharoah Company, we will use the straight-line method. Initially, the equipment had a useful life of 8 years and a salvage value of $16,000. The straight-line depreciation expense can be calculated using the initial cost minus the salvage value, divided by the useful life:
Initial Depreciation Expense = (Cost - Salvage Value) / Useful Life
= ($80,000 - $16,000) / 8 years
= $64,000 / 8 years
= $8,000 per year
The journal entry to record depreciation on December 31, 2019, would be:
This entry represents the first year of depreciation for the equipment.
Final answer:
The depreciation expense for Pharoah Company for the year ending on December 31, 2019, is $4,000, calculated using the straight-line method on a prorated basis. The necessary journal entry would include a debit to Depreciation Expense and a credit to Accumulated Depreciation - Equipment for this amount.
Explanation:
To prepare the journal entry to record depreciation on December 31, 2019, for Pharoah Company, we first need to calculate the depreciation expense for the year using the straight-line method. The depreciation expense is calculated by subtracting the salvage value from the cost of the equipment and then dividing by the useful life of the equipment.
The initial cost of the equipment is $80,000 and the initial salvage value is $16,000, leaving a depreciable base of $64,000. The useful life of the equipment was 8 years. So the annual depreciation expense is calculated as ($80,000 - $16,000) / 8 = $8,000.
Since the equipment was purchased on July 1, 2019, only half of the year's depreciation applies for 2019. Therefore, for 2019, the depreciation expense is $8,000 / 2 = $4,000.
The journal entry dated December 31, 2019, would be:
Debit Depreciation Expense: $4,000
Credit Accumulated Depreciation - Equipment: $4,000
This entry reflects the decrease in value for half a year's use of the new equipment.
Consumers who use Yelp reviews to measure the tradeoff between quality and price of different restaurants are using what type of consumer decision rule? Multiple Choice noncompensatory multiattribute heuristic compensatory determinant
Answer:
Compensatory
Explanation:
Compensatory decision rule can be evaluated as when the consumer is evaluating alternatives and trades off one characteristics against another, such that good characteristics compensate for the bad ones.
There is tremendous opportunity in influencing consumers at the alternative evaluation and selection phase. This phase, along with research, is often the most time consuming in the decision making process.
Compensatory rule dictates that a consumer makes decision in terms of each relevant attribute and computes a weighted or summated score for each brand.
Thomasson Air uses two measures of activity, flights and passengers, in the cost formulas in its budgets and performance reports. The cost formula for plane operating costs is $36,160 per month plus $2,038 per flight plus $1 per passenger. The company expected its activity in April to be 73 flights and 223 passengers, but the actual activity was 72 flights and 228 passengers. The actual cost for plane operating costs in April was $179,020. The activity variance for plane operating costs in April would be closest to:
A)$6,137 U
B)$6,137 F
C)$2,033 U
D)$2,033 F
Answer:
D)$2,033 F
Explanation:
The formula for perating costs is:
[tex]C= 36,100 +2,038F+1P[/tex]
Where 'F' is the number of flights and 'P' is the number of passengers.
If the company expected 73 flights and 223 passengers, expected costs were:
[tex]E= 36,160 +2,038*73+1*223\\E=\$185,157[/tex]
If the company had an activity of 72 flights and 228 passengers, the actual costs were:
[tex]C= 36,160 +2,038*72+1*228\\C=\$183,064[/tex]
The operating cost variance is:
[tex]C=\$185,157-\$183,064\\C=\$2,033[/tex]
Since actual costs are lower than expected costs, the variance is favorable. Therefore, the answer is D)$2,033 F.
Which of the following is true about the equilibrium federal funds rate? A. The equilibrium federal funds rate is constant because of structural forces. B. The Fed can increase the equilibrium federal funds rate by decreasing reserve demand. C. The Fed can increase the equilibrium federal funds rate by decreasing the supply of reserves. D. The equilibrium federal funds rate is determined at the point where money demand exceeds money supply.
Answer:
C) The Fed can increase the equilibrium federal funds rate by decreasing the supply of reserves.
Explanation:
The Federal fund rate is the interest rate at which the banks use to lend money to each other overnight. It can simply be called the interest rate for interbank reserve loans. It can also be the interest rate which is used to conduct monetary policies.
Here, money demanded is equal to the amount of money supplied. The Fed can change the equilibrum funds rate by decreasing the money supplied to the banks, which in turn, makes the federal fund demand increase and the federal also fund rate increases.
Yields on short-term bonds tend to be more volatile than yields on long-term bonds. Suppose that you have estimated that the yield on 20-year bonds changes by 10 basis points for every 15-basis-point move in the yield on 5-year bonds. You hold a $1 million portfolio of 5-year maturity bonds with modified duration 4 years and desire to hedge your interest rate exposure with T-bond futures (20 year maturity), which currently have modified duration 9 years and sell at F0 = $95. How many futures contracts should you sell?
To hedge the interest rate risk, one needs to sell around 4444 futures contracts. This is so that the change in the bond portfolio's value when interest rates move is offset by the change in the futures contracts' value.
Explanation:To hedge interest rate exposure, one needs to make sure the change in the value of the bond portfolio is offset by the change in the value of the short positions in the bond futures. This can be achieved through duration matching. The modified duration of a bond is a measure of the percentage change in the bond price for a unit change in yield. You hold a portfolio of 5 year bonds with a face value of $1 million and a modified duration of 4 years. Hence, a 1% increase in yield would result in about a $40,000 decrease in value. On the other hand, you are considering shorting T-bond futures which have a modified duration of 9 years. So a 1% increase in yield would lead to a $9 change in the price of each future contract. Number of futures contracts to sell can be calculated by dividing the change in the value of the bond portfolio by change in price of one future contract. Therefore you should sell approximately 4444 futures contracts to hedge your interest rate risk.
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Shore Co. sells two products, kayaks and motors. Last year, Shore sold 12,600 units of kayaks and 23,400 units of motors. Related data are as follows: Product Unit Selling Price Unit Variable Cost Unit Contribution Margin Kayaks $120 $80 $40 Motors 80 60 20 Assuming that last year's fixed costs totaled $910,035, what was Shore Co.'s break-even point in units
Answer:
Break-even points in units is 33,705.00
Explanation:
Break-even point in units=fixed costs/weighted average selling price-weighted average variable cost
Kayaks 12,600
Motors 23,400
total 36,000
kayaks sales mix=12,600/36,000=0.35
Motors sales mix =23,400/36,000=0.65
weighted average selling price=$120*0.35+$80*0.65
=$42+$52
=$94
weighted average variable cost=$80*0.35+$60*0.65
=$28+$39
=$67
fixed costs is $910,035
break-even points in units=$910,035/($94-$67)
= 33,705.00
The mix of both Kayaks and Motors that would gives no profit no loss is 33,705.00
The break-even point calculation requires the overall contribution margin per unit, which is derived by subtracting unit variable cost from unit selling price. For Shore Co., the calculation requires the sales mix of kayaks and motors, which is not provided. Using the given examples, we illustrate how to calculate the break-even point with a fictitious firm's data, highlighting the relevance of knowing both average variable cost and average fixed cost.
Break-Even Point Calculation
To calculate the break-even point in units for Shore Co., we need to determine the overall contribution margin per unit and divide the total fixed costs by that amount. However, since Shore Co. sells two different products, we need to work with a weighted average contribution margin per unit. This approach requires knowing the proportion in which the two products are sold, which isn't provided in the question. In order to proceed with the information given, we would need to make assumptions or have additional information about the sales mix.
Under the simplified scenario with the provided reference data, the formula to calculate the break-even point in units is:
Total Fixed Costs / (Total Revenue - Total Variable Costs) per unit
With the provided example:
The firm's quantity is 1,000 unitsTotal fixed cost is $1,200Total cost is $4,000Total variable cost is $2,800The break-even price point is $4.00The short-run shutdown price point is $2.80In this scenario, the average variable cost is $2.80, and the average fixed cost is $1.20 (calculated by dividing the total fixed costs by the number of units). The break-even point in this case would be 300 units, calculated as follows: $1,200 total fixed costs / ($4.00 selling price - $2.80 variable cost per unit).
Swifty Company had net credit sales during the year of $1450000 and cost of goods sold of $700000. The balance in accounts receivable at the beginning of the year was $200000, and the end of the year it was $90000. What was the accounts receivable turnover
Answer:
Account Receivable Ratio = 10
Explanation:
Account Receivable Turnover Ratio:
The Account Receivable Turnover Ratio is an accounting measure that indicates the effectiveness of company's ability to collect its receivables from its customers.
A high turnover ratio represents good credit policy and aggressive collections department with good portfolio of customers.
A low turnover ratio indicates excess amount of old receivables being tied up in working capital.
Formula: Net Credit Sales ÷ (Opening receivable + closing receivable/2)
Receivable Turnover Ratio = $ 1,450,000 ÷ ( $200,000+$90,000/2)
=$1,450,000 ÷ $145,000
= 10
Synergy Inc. produces plastic grocery bags. Synergy has developed a static budget for the month of July based on 10,000 direct labor hours. During the quarter, the actual activity was 12,000 direct labor hours. Data for July are summarized as follows: Static budget (10,000 hours) Actual costs (13,000 hours) Direct materials cost $ 86,000 $108,000 Power 30,000 37,000 Salary of plant supervisor 7,000 7,000 Total $123,000 $152,000 Direct materials cost and power are variable costs. Salary of plant supervisor is a fixed cost. What is the flexible budget amount for July?
Answer:
$146,200
Explanation:
Synergy Inc
Flexible budget amount for July:
Direct materials cost [($86,000 / 10,000 hours) × 12,000 hours] $103,200
Power [($30,000 / 10,000 hours) × 12,000 hours] $36,000
Salary of plant supervisor
$7,000
Total flexible budget amount $146,200
Therefore the flexible budget amount for July is $146,200
The following 3 questions are based on this information. Kings Department Store has 625 rubies, 800 diamonds, and 700 emeralds from which they will make bracelets and necklaces that they have advertised in their Christmas brochure. Each of the rubies is approximately the same size and shape as the diamonds and the emeralds. Kings will net a profit of $250 on each bracelet, which is made with 2 rubies, 3 diamonds, and 4 emeralds, and $500 on each necklace, which includes 5 rubies, 7 diamonds, and 3 emeralds. How many of each should Kings make to maximize its profit?
Answer:
129 bracelets and 59 necklaces.
Explanation:
Kings departments store wants to maximize profit by making a combination of its two products necklaces and bracelets. The King store should use a strategy so that it can generate maximum profit with its available rubies, diamonds and emeralds.
$250a + $500b = Maximum Profit
For rubies : 2a + 5b = 625
For Diamonds : 3a + 7b = 800
For Emeralds: 4a + 3b = 700
Solving the equation we get maximum profit value of $61,750.The King departments stores should make 129 bracelets and 59 necklaces which will bring maximum profit to the store.
The Closed Fund is a closed-end investment company with a portfolio currently worth $195 million. It has liabilities of $20 million and 5 million shares outstanding. a. What is the NAV of the fund? (Round your answer to 2 decimal places.) b. If the fund sells for $40 per share, what is its premium or discount as a percent of net asset value? (Input the amount as a positive value. Round your answer to 2 decimal places.)
Answer:
NAV is $35 per share
premium is 14.30%
Explanation:
The formula for net asset value can be used in calculating the NAV of thi closed fund before comparing the NAV with selling price of the fund in order to ascertain whether a discount or premium has been recorded on the fund as shown below:
NAV=Total assets- total liabilities/number of shares
total fund assets is worth $195 million
total fund liabilities is $20 million
there are 5 million shares outstanding
NAV=$195 million-$20 million/5 million
=$175 million/5 million
=$35.00 per share
Premium on the fund=($40-$35)/$35
=$5/$35
=14.30% premium
The fund has 14.30% premium
Problem 4-4 Calculation of Gain or Loss (LO 4.3) Jocasta owns an apartment complex that she purchased 6 years ago for $750,000. Jocasta has made $50,000 of capital improvements on the complex, and depreciation claimed on the building to date is $128,700. Calculate Jocasta's adjusted basis in the building.
Answer:
$671,300
Explanation:
The calculation of adjusted basis in the building is shown below:-
Adjusted basis = Original cost of the property + Cost of capital improvements - Depreciation claimed
= $750,000 + $50,000 - $128,700
= $800,000 - $128,700
= $671,300
Therefore for computing the adjusted basis we simply add original cost of the property with cost of capital improvements and deduct depreciation claimed.
Early in 2018, the Excalibur Company began developing a new software package to be marketed. The project was completed in December 2018 at a cost of $14,000,000. Of this amount, $11,000,000 was spent before technological feasibility was established. Excalibur expects a useful life of five years for the new product with total revenues of $15,000,000. During 2019, revenue of $6,000,000 was recognized. Required: 1. Prepare a journal entry to record the 2018 development costs. 2. Calculate the required amortization for 2019. 3. At what amount should the computer software costs be reported in the December 31, 2019, balance sheet
Answer:
The answer is given below;
Explanation:
1.Software Package Dr.$3,000,000
Project expenses Cr.$3,000,000
2.Amortization 3,000,000/5 $600,000
3. Software Package be reported in balance sheet(3,000,000-600,000)= $2,400,000
The $11,000,000 will be charged out as research cost and will be reported in Profit and loss account because after this amount technological feasibility was established that asset will yield returns for the business and can be used for the business. The remaining amount $3,000,000 will be reported as development cost.
An industrial manufacturer that works with one or a few large clients and develops products that only these clients will use is most likely to implement a(n) ________ strategy.
Answer: Custom marketing
Explanation: A custom marketing strategy will most likely be employed by an industrial manufacturer that works with one or a few large clients and develops products that only these clients will use. Marketing creates, communicates, and delivers value, and it involves the management of customer relationships. A custom marketing strategy is one in which a manufacturer customizes and develops products that are unique to the needs of his customers and thus is an essential strategy for delivering a personalized customer experience to each segment of clients, thereby increasing loyalty and customer satisfaction.
Additional Information A $30,000 note payable is retired at its $30,000 carrying (book) value in exchange for cash. The only changes affecting retained earnings are net income and cash dividends paid. New equipment is acquired for $71,600 cash. Received cash for the sale of equipment that had cost $62,600, yielding a $3,400 gain. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement. All purchases and sales of inventory are on credit. (2) Compute the company’s cash flow on total assets ratio for its fiscal year 2019.
Answer:
The cash flow statement guides a company in understanding its true use and source of cash funding.
It helps breakdown the Net income and give confidence or allow an analyst/investor heighten his risk profile of the business returns on Invested funds.
The attached documents show details of the full questions which are missing from the submitted question and the Cash flow statement .
QUESTION 47 Standard, Inc. reported EBIT of $42.00 million for last year. Depreciation expense totaled $20 million and capital expenditures came to $7 million. The company increased net working capital by $2 million. Free cash flow is expected to grow at a rate of 6.10% for the foreseeable future. Standard faces a 40% tax rate and has a 0.40 debt to equity ratio with $200 million (market value) in debt outstanding. Standard's equity beta is 1.24, the risk-free rate is currently 5% and the market risk premium is estimated to be 6%. What is the current total value of Standard, Inc. (in millions)? What is the current value (in millions) of Standard's equity?
Answer:
Equity Value = $634.72 mn
Explanation:
Given Data:
Market value in debt outstanding = $200 million
Depreciation expense totaled = $20 million
capital expenditures = $7 million
Free cash flow rate = 6.10%
Standard's equity beta = 1.24
Risk-free rate = 5%
Market risk premium = 6%
The current value of standard equity is calculated using the formula;
Equity Value = Firm Value - Market Value of Debt---------1
But,
Firm Value = FCFF*(1+g)/(r-g) ------------------------2
FCFF = EBIT(1-t) + Depreciation - Capital Expenses - Changes in NWC. -------3
FCFF = 42*0.6 + 20 - 7 - 5
= $33.2 mn
Putting the value obtained from equation 3 into equation 2, we have;
Firm Value = FCFF*(1+g)/(r-g)
Firm Value = 33.2 x (1.061)/(0.1032 - 0.061)
= $834.72 mn
Putting the value obtained from equation 2 into equation 1, we have;
Equity Value = Firm Value - Market Value of Debt
= 834.72 - 200
= $634.72 mn
Ramirez Corporation sells two types of computer chips. The sales mix is 30% (Q-Chip) and 70% (Q-Chip Plus). Q-Chip has variable costs per unit of $60 and a selling price of $100. Q-Chip Plus has variable costs per unit of $70 and a selling price of $130. Ramirez’s fixed costs are $540,000. How many units of Q-Chip would be sold at the break-even point?
A
3,000
B
3,522
C
5,000
D
7,000
Answer:
The correct answer is A.
Explanation:
Giving the following information:
The sales mix is 30% (Q-Chip) and 70% (Q-Chip Plus).
Q-Chip has variable costs per unit of $60 and a selling price of $100.
Q-Chip Plus has variable costs per unit of $70 and a selling price of $130.
Ramirez’s fixed costs are $540,000.
First, we need to calculate the break-even point in units for the whole company.
Break-even point (units)= Total fixed costs / Weighted average contribution margin ratio
Weighted average contribution margin ratio= (weighted average selling price - weighted average unitary variable cost)
weighted average selling price= (0.3*100 + 0.7*130)= $121
weighted average unitary variable cost= (0.3*60 + 0.7*70)= $67
Weighted average contribution margin ratio= 540,000 / (121 - 67)
Weighted average contribution margin ratio= 10,000 units
Break-even for each product line:
Q-Chip= 0.3*10,000= 3,000 units
Q-Chip Plus= 0.7*10,000= 7,000 units
To determine the break-even number of Q-Chip units, we calculate the contribution margin for both products, the weighted average contribution margin, and then the total units needed to break-even. Applying the sales mix for Q-Chip yields 3,000 units to break-even, making option A the correct answer.
To calculate the number of Q-Chip units Ramirez Corporation must sell to break-even, we need to use the weighted average contribution margin method because there is a sales mix for two different products. The steps are as follows:
Calculate the contribution margin per unit for each product: Selling price minus variable cost.Calculate the weighted average contribution margin.Divide the total fixed costs by the weighted average contribution margin to get the total number of units (of the mix) needed to break even.Since we want the number of Q-Chip units, we need to use the sales mix percentages to find the proportion.Contribution margin for Q-Chip = $100 - $60 = $40.
Contribution margin for Q-Chip Plus = $130 - $70 = $60.
Weighted average contribution margin = (30% × $40) + (70% ×$60) = $12 + $42 = $54.
Total units to break even = $540,000 / $54 = 10,000 units (combined).
Number of Q-Chip units = 30% of 10,000 = 3,000 units.
Therefore, the correct answer is A, 3,000 units of Q-Chip must be sold for the Ramirez Corporation to reach the break-even point.
Each of the following factors affects the weighted average cost of capital (WACC) equation. Which of the following factors are outside a firm’s control? Check all that apply. The general level of stock prices The effect of the tax rate on the cost of debt in the weighted average cost of capital equation The firm’s dividend payout ratio The impact of a firm’s cost of capital on managerial decisions Consider the following case: International Imports (I2) has two divisions, L and H. Division L is the company’s low-risk division and would have a weighted average cost of capital of 8% if it was operated as an independent company. Division H is the company’s high-risk division and would have a weighted average cost of capital of 14% if it was operated as an independent company. Because the two divisions are the same size, the company has a composite weighted average cost of capital of 11%. Division L is considering a project with an expected return of 9.5%. Should International Imports (I2) accept or reject the project? Accept the project Reject the project On what grounds do you base your accept–reject decision? Division L’s project should be accepted, because its return is less than the risk-based cost of capital for the division. Division L’s project should be accepted, since its return is greater than the risk-based cost of capital for the division.
Answer:
The general level of stock prices
The effect of the tax rate on the cost of debt in the weighted average cost of capital equation
The project should be accepted.
Division L’s project should be accepted, since its return is greater than the risk-based cost of capital for the division.
Explanation:
The company can determinate their payout ratio and the cost of capital of their equity the rest of the option are determined by either the market or the government.
It should be accepted as the return is based on the division which WACC is 8% therefore, it will make a good use of the capital as is above the expected capital cost
Factors outside a firm's control affecting WACC include stock prices and tax rate effects on cost of debt. A firm's dividend policy and capital cost impact on decisions are controllable. For International Imports, Division L's project should be accepted because its return exceeds its cost of capital.
The factors affecting the weighted average cost of capital (WACC) that are outside a firm's control include:
The general level of stock pricesThe effect of the tax rate on the cost of debt in the weighted average cost of capital equationFactors such as the firm's dividend payout ratio and the impact of a firm's cost of capital on managerial decisions are within the firm's control.
Considering the case of International Imports (I2) and its two divisions, L and H, with WACCs of 8% and 14% respectively, we address the project for Division L. Since Division L's project has an expected return of 9.5%, which is greater than its risk-based cost of capital of 8%, the project should be accepted. The return exceeds the cost, making it a financially viable project for Division L.
Suppose that a well-respected study published in Child Psychology Today finds that a very high proportion of children raised by stay-at-home fathers are accepted to Harvard University. If a large number of previously working fathers quit their jobs and become stay-at-home dads, which of the following will occur, all else equal? (i) The unemployment rate will decrease. (ii) The size of the labor force will decrease. (iii) The number of unemployed people will increase. (iv) The unemployment rate will increase.
Answer:
(ii) and (iv) only
(ii) The size of the labor force will decrease.
(iv)The unemployment rate will increase.
If many fathers become stay-at-home dads, the size of the labor force will decrease because these men are not engaged in paid work. The unemployment rate and the number of unemployed people will not increase because these men are not searching for work, but have chosen to be out of the workforce.
Explanation:If a large number of fathers leave their jobs to become stay-at-home dads, multiple impacts could happen, all else being equal. Firstly, the size of the labor force would decrease as these men are choosing not to engage in paid work. Secondly, the number of unemployed people would not necessarily increase as they aren't searching for work; instead, they have opted out of the workforce. As these men are not technically unemployed, but out of the workforce, they do not contribute to the unemployment rate, and hence it's incorrect to state that the unemployment rate would increase.
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E16 13B (L0 3) (Accounting for Restricted Stock) Holt Company issues 10,000 shares of restricted stock to its new CEO, on January 1, 2020. The stock has a fair value of $260,000 on this date. The service period related to this restricted stock is 5 years. Vesting occurs if the CEO stays with the company for 5 years. The par value of the stock is $1. At December 31, 2021, the fair value of the stock is $180,000.Instructions(a)Prepare the journal entries to record the restricted stock on January 1, 2020 (the date of grant) and December 31, 2021.(b)On February 22, 2022, the CEO leaves the company. Prepare the journal entry (if any) to account for this forfeiture.
Answer and Explanation:
The journal entries are shown below:
a. Unearned compensation $260,000
To Common stock $10,000 (10,000 shares × $1)
To Paid in capital in excess of par - common stock $250,000
(Being the unearned compensation is recorded)
It increased the common stock and the remaining balance is transferred to the paid in capital so these account are credited while on the other hand the contra equity is decreased so unearned compensation is debited
Compensation expenses $52,000 ($260,000 ÷ 5 years)
To Unearned compensation $52,000
(being the compensation expense is recorded)
Since there is a compensation expense so the expense account is debited as it increased the expenses while on the other hand we credited the unearned compensation
b. Common stock 10,000
Paid in capital in excess of par - common stock $250,000
To Compensation expenses $104,000 ($52,000 × 2 years)
To Unearned compensation $156,000
(Being the forfeiture is recorded)
This entry reflects the reversing of the entry with related to the common stock, paid in capital, and compensation expense
Assume that Product Z is made of two units of A and three units of B. A is made of three units of C and four of D. D is made of two units of E Lead times for purchase or fabrication of each unit to final assembly are: Z takes two weeks; A, B, C, and D take one week each; and E takes three weeks. Sixty eight units of Product Z are required in Period 10. (Assume that there is currently no inventory on hand of any of these items.) b. Develop an MRP planning schedule showing gross and net requirements and order release and order receipt dates.
Answer and explanation:
a). The product structure tree is as given in the attached image 1
Z
A B
C D
E
b) The MRP schedule are also attached in the subsequent images
An MRP schedule for Product Z requires backward calculation from the due date, considering lead times of Z, A, B, C, D, and E to determine when each component needs to be ordered or manufactured. E needs to be ordered by Period 4, components of A by Period 7, and the assembly of Product Z starts by Period 8.
Explanation:To develop an MRP (Material Requirements Planning) schedule for Product Z, given the consumption rates and lead times for each component and sub-component, we must work backward from the due date for Product Z. The lead times indicate how long before the due date each component and sub-component must be ordered or manufactured to ensure timely completion.
Product Z requires two units of A and three units of B.Component A is composed of three units of C and four of D.Component D requires two units of E for completion.Now, considering the lead times:
Product Z takes two weeks to assemble.Components A, B, C, and D each take one week.Component E takes three weeks.Since we need 68 units of Product Z by Period 10, we must start assembling them by Period 8 (taking into account the two-week assembly time for Z). Therefore, we need all units of A and B at the latest by Period 8. The components of A (C and D) thus must be ordered by Period 7, and since D is made of E which takes three weeks, we need to order E by Period 4.
The MRP schedule will show the gross and net requirements for each component by period, as well as the order release and receipt dates to meet the demand for 68 units of Product Z by Period 10. This includes the calculation of quantities required, considering no initial inventory is on hand.
New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is incorrect. Maloney's, Inc. has found that its cost of common equity capital is 17 percent and its cost of debt capital is 6 percent. The firm is financed with $3,000,000 of common shares (market value) and $2,000,000 of debt. What is the after-tax weighted average cost of capital for Maloney's, if it is subject to a 40 percent marginal tax rate
Answer:
The WACC is 11.64%
Explanation:
The weighted average cost of capital or WACC is the cost to firm of raising its total capital based on its capital structure. The capital structure of the firm can contain debt, preferred stock and common stock. The WACC take the weight of each component as a proportion of total value of assets and multiply it by the rate of return or cost of each component.
WACC = wD * rD * (1-tax rate) + wE *rE
Where,
wD and wE represent the weights of debt and equity as a proportion of total assetsrD and rE are the cost of debt and cost of equityWe multiply rD by (-tax rate) because we take after tax cost of debt for WACC calculationWeight of debt = 2000000 / (2000000 + 3000000) = 2/5 or 0.4
Weight of equity is = 1 - 0.4 = 0.6
WACC = 0.4 * 0.06 * (1-0.4) + 0.6 * 0.17
WACC = 0.1164 or 11.64%
Merger Co. has 10 employees, each of whom earns $1,950 per month and has been employed since January 1. FICA Social Security taxes are 6.2% of the first $128,400 paid to each employee, and FICA Medicare taxes are 1.45% of gross pay. FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,000 paid to each employee. Prepare the March 31 journal entry to record the March payroll taxes expenses.
Answer: Please refer to Explanation
Explanation:
March 31
DR Payroll Taxes Expenses
$2,661.75
CR FICA Social Security taxes (6.2% * 1,950 *10) $1,209
CR FICA Medicare taxes (1.45% *1,950 * 10) $282.75
CR FUTA taxes (0.6% * 1,950 * 10) $117
CR SUTA taxes ( 5.4% * 1,950 * 10) $1,053
(To record Employer Payroll Taxes for month of March)
If you need any clarification do react or comment.
The total expenditure for the company's payroll taxes for the month of March would be a total of $5,691.75, consisting of $1,209 for FICA Social Security, $282.75 for FICA Medicare, $420 for FUTA and $3780 for SUTA.
Explanation:
To solve this, you would need to calculate the FICA Social Security taxes, FICA Medicare taxes, FUTA taxes and SUTA taxes for each of the 10 employees at Merger Co. for the month of March.
For the FICA Social Security taxes, since each employee earns $1,950 per month and the rate is 6.2% of the pay, each employee would pay $1,950 * 6.2% = $120.90. Since there are 10 employees, the total for the company would be $120.90 * 10 = $1,209. The FICA Medicare taxes would be calculated similarly, using the rate of 1.45%, which gives $1,950 * 1.45% = $28.28 per employee and $282.75 in total for the company.
Next, the FUTA taxes would be the first $7,000 of each employee's pay multiplied by 0.6% which gives $7,000 * 0.6% = $42 each for FUTA and $420 for the company. SUTA is calculated similarly and provides $7,000 * 5.4% = $378 each for SUTA and $3780 for the company. Thus, the journal entry on March 31 to record the March payroll taxes expenses would show a total expenditure of $1,209 (FICA Social Security) + $282.75 (FICA Medicare) + $420 (FUTA) + $3780 (SUTA) = $5,691.75.
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Yields on short-term bonds tend to be more volatile than yields on long-term bonds. Suppose that you have estimated that the yield on 20-year bonds changes by 10 basis points for every 21-basis-point move in the yield on 5-year bonds. You hold a $1.5 million portfolio of 5-year maturity bonds with modified duration 4 years and desire to hedge your interest rate exposure with T-bond futures, which currently have modified duration 9 years and sell at F0 = $70. How many futures contracts should you sell? (Do not round intermediate calculations. Round your final answer to the nearest whole number.)
Answer:
The yield on momentary securities tends to be more eccentric than yields on long haul securities. In the event that it is assessed that the yield on 20-year securities changes by 10 premise focuses for each 15-premise point move in the yield on 5-year securities. One is holding a $1 million arrangement of 5-year development securities with changed length 4 years and ready to support his loan cost introduction with T-bond prospects. T-bond fates as of now have adjusted term 9 years and sell at $95 (F0).
The quantity of prospects gets that he should sell can be determined as demonstrated as follows: according to the assumption the portfolio misfortune considering the given data would be:
P = Portfolio esteem =$1,000.000
D = Modified length =4 years
Ay =Bond portfolio yield =15 premise
Misfortune on the Portfolio = P x Ay =$1,000,000 x 0.15%x 4 = $6,000
The adjustment in the fates cost (per $100 standard worth) will be as determined underneath:
$95 x 0.0001x 9 = $0.0855
This is a difference in $85.50 on a $100,000 standard worth agreements. Along these lines you should sell: $6,000/$85.50= 70
Hence, he ought to go short is 70 contracts.
Corporations must hold meetings for stockholders and keep accurate records of business transactions. How are these regulations beneficial for the corporation’s stockholders?
Answer:
These regulations are not only beneficial for the corporation's stockholders but also encourages them to keep their money invested in the company's stocks. This way the stock holders feel a sense a security about their invested money when they see the accurate records of the business transactions of the company.
Hope this clear things up
Good luck.
Corporations are required to hold meetings for stockholders and keep accurate records of business transactions, which bring benefits to the stockholders through transparency, protection of rights, and shareholder value.
Explanation:The regulations requiring corporations to hold meetings for stockholders and keep accurate records of business transactions are beneficial for the corporation's stockholders in several ways:
Transparency and Accountability: Holding meetings and maintaining records provide transparency to stockholders, allowing them to make informed decisions about their investments. It also ensures accountability from the corporation's management.Protection of Rights: Regulations help protect stockholders' rights by ensuring their voices are heard and their interests are represented in decision-making processes.Shareholder Value: Accurate records and regular meetings can contribute to the overall success and stability of the corporation, ultimately benefiting the stockholders by preserving and increasing their investments' value.Learn more about Regulations for Corporations here:https://brainly.com/question/35453552
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Bailey, a single taxpayer, obtains permission to change from a calendar year to a fiscal year ending June 30, 2019. During the six months ending June 30, 2019, she earns $40,000 and has $8,000 of itemized deductions. What is the amount of her annualized income?
a.$32,000
b.$28,000
c.$64,000
d.$56,000
Answer:
Correct option is c.$64,000
Explanation:
given data
earn = $40,000
deductions = $8,000
time = 6 month
solution
we get here amount of her annualized income that is express as
amount of her annualized income = ( earn - deduction ) × time duration
amount of her annualized income = ( $40,000 - $8,000 ) × [tex]\frac{6}{12}[/tex]
amount of her annualized income = $64,000
so correct option is c.$64,000
If the expected return on the market is 11% and the expected return of investing in Merck is 10.35%, then the riskminus−free rate must be: A. 5.0% B. 4.0% C. 3.0% D. 4.5%
Answer:
The answer is given below;
Explanation:
Ra=Rf+(Rm-Rf)*Ba
Rm=11%
Ra=10.35%
Ba=.9 it is assumed that beta is .9 for merck
Rf=?
By putting values in above formula we get
10.35%=Rf+(11%-Rf)*.9
10.35%=Rf+.9*11%-.9Rf
10.35%=.1Rf+.099
.1Rf=10.35%-9.9%
Rf=.45%/.1
Rf=4.5%