Answer:
It will be better to pursue the soap business as it provide a 20,000 economic gain.
Explanation:
currently Natasha wages: $50,000
soap business:
sales revenue 465,000 - cost = 395,000 = 70,000 accounting profit
less 50,000 opportunity cost: 20,000 economic gain
Internet opportunity as it will compete with the local TV company shw currently works, most probably will be fired or quit the job.
3,275,000 revenues - 3,250,000 cost = 25,000 accounting profit
less 50,000 opportunity cost: (25,000) economic loss
It will be better to pursue the soap business as it provide a 20,000 economic gain.
Final answer:
Considering both accounting and implicit costs, the organic soap business offers Natasha an economic profit of $20,000, while the Internet business would result in a loss of $25,000. Hence, Natasha should pursue the organic soap business opportunity.
Explanation:
When evaluating which entrepreneurial opportunity to pursue, Natasha must consider not only the accounting profit but also the economic profit, which factors in both explicit and implicit costs. The organic soap business anticipates an annual revenue of $465,000 with expenses of $395,000, resulting in an accounting profit of $70,000. Meanwhile, the Internet-based business expects revenues of $3,275,000 against costs of $3,250,000, leaving an accounting profit of $25,000.
However, Natasha must also consider the loss of her current $50,000 salary as an implicit cost. The economic profit calculation would be the accounting profit minus the implicit cost. For the soap business, the economic profit would be $20,000 ($70,000 - $50,000), and for the Internet business, it would result in a loss of -$25,000 ($25,000 - $50,000). Thus, based on economic profit, Natasha should pursue the organic soap business opportunity.
Warner Company has the following data for the past year:
Actual overhead $470,000
Applied overhead:
Work-in-process inventory $100,000
Finished goods inventory 200,000
Cost of goods sold 200,000
Total $500,000
Warner uses the overhead control account to accumulate both actual and applied overhead.
Calculate the overhead variance for the year.
Final answer:
The overhead variance for Warner Company is a $30,000 unfavourable variance, which means the company applied $30,000 more in overhead than the actual overhead costs.
Explanation:
The overhead variance is calculated by subtracting the applied overhead from the actual overhead. In the case of Warner Company, the actual overhead for the past year was $470,000, and the total applied overhead was $500,000 (sum of applied overhead in work-in-process inventory, finished goods inventory, and cost of goods sold).
To find the overhead variance, we use the following formula:
Overhead Variance = Actual Overhead - Applied Overhead
Overhead Variance = $470,000 - $500,000
Overhead Variance = -$30,000
This result indicates that there is a $30,000 unfavourable variance, meaning that Warner Company has over-applied its overhead costs by $30,000.
Compute the total manufacturing cost for a manufacturer with the following information for the month. Raw materials purchased $ 43,200 Direct materials used 58,250 Direct labor used 14,000 Factory supervisor salary 8,800 Salesperson commissions 6,000 Depreciation expense—Factory building 3,700 Depreciation expense—Delivery equipment 3,400 Indirect materials 1,800
Answer:
Cost of good manufactured= $86550
Explanation:
To calculate the cost of manufactured goods we need to use the following formula:
Cost of good manufactured= Beginning work in progress+ direct materials of the period + direct labor + manufactured overhead - ending work in progress
Beginning work in progress= 0
Direct materials = beginning inventory + purchase - ending inventory= 58250
Direct labor= 14000
Manufactured overhead=Factory supervisor salary + Depreciation expense Factory building + Indirect materials= 8800 + 3700 + 1800= 14300
Ending work in progress= 0
Cost of good manufactured= 58250 + 14000 + 14300= $86550
The Purple Lion Beverage Company expects the following cash flows from its manufacturing plant in Palau over the next five years: Annual Cash Flows Year 1 Year 2 Year 3 Year 4 Year 5 $250,000 $37,500 $480,000 $450,000 $550,000 The CFO of the company believes that an appropriate annual interest rate on this investment is 9%. What is the present value of this uneven cash flow stream, rounded to the nearest whole dollar? $1,307,822 $767,500 $1,625,000 $2,142,500
Answer:
PV of the cash flow: $1,307,822
Explanation:
We will calculate the present value of a lump sum for each cash flow:
[tex]\frac{cashflow}{(1 + rate)^{time} } = PV[/tex]
cashflow 250,000.00
time 1.00
rate 0.09
[tex]\frac{250000}{(1 + 0.09)^{1} } = PV[/tex]
PV 229,357.80
cashflow 37,500.00
time 2.00
[tex]\frac{37500}{(1 + 0.09)^{2} } = PV[/tex]
PV 31,563.00
cashflow 480,000.00
time 3.00
rate 0.09
[tex]\frac{480000}{(1 + 0.09)^{3} } = PV[/tex]
PV 370,648.07
cashflow 450,000.00
time 4.00
rate 0.09
[tex]\frac{450000}{(1 + 0.09)^{4} } = PV[/tex]
PV 318,791.34
cashflow 550,000.00
time 5.00
rate 0.09
[tex]\frac{550000}{(1 + 0.09)^{5} } = PV[/tex]
PV 357,462.26
Then, we will add each present value:
year 1: 229,357.7982
year 2: 31,562.99975
year 3: 370,648.0704
year 4: 318,791.345
year 5: 357,462.2625
total PV 1,307,822.476
Answer:
Present value of cash flows should be $1,307,822
Explanation:
We cannot use annuity formula for this problem because the amount of cash flows occurring in each year is different and we would need to find the present value of each cash flow separately
The present value of the cash flow can be computed using the following formula
PV = FV/(1+i)^n
The rate at which the cash flows are to be discounted is 9 percent
For the first year the cash flow is $250,000 and we can compute the pressent value of the cash flow as under
250,000/(1+0.09) = 250,000/1.09 = $229,357.80
Foe the second year the cash flow is $37,500
37,500/(1+0.09)^2= 37,500/1.1881 = $31,563
The present value of the cash flows for the subsequent years are provided as under
480,000/(1+0.09)^3 = 480,000/1.295 = $370,648.07
450,000/(1+0.09)^4 = 450,000/1.4116 = $318,791.34
550,000/(1+0.09)^5 = 550,000/1.5386 = $357,462.26
Adding up all the present values computed above, gives us the present value of cash flows
229,357.8 + 31,563 + 370,648.07 + 318,791.34 + 357,462.26 = $1,307,822 approx
Marlin Corporation reported pretax book income of $1,009,000. During the current year, the net reserve for warranties increased by $26,800. In addition, book depreciation exceeded tax depreciation by $100,900. Finally, Marlin subtracted a dividends received deduction of $15,900 in computing its current year taxable income. Marlin's current income tax expense or benefit would be:
Answer:
tax benefit
Explanation:
pretax income 1,009,000
permanent difference:
non-taxable dividend (15,900)
book taxable income: 993,100
temporary difference:
book exceeded tax depreicaiton 100,900
warrant liablity 26,800
Government Taxable income 1,120,800
journal entry:
tax expense for the book income
deferred tax benefit for the temporary difference
tax payable for the government taxable income
It is a tax benefit as in some point because, the warranties will be recognize as expense an the depreication will match at the end of the useful life, the company's book taxable income be lower in some point to balance the current difference.
Costs Classification a. Annual picnic for plant employees and their families Period costs-administrative expense b. Cost of fabric used by clothing manufacturer Product costs-direct materials cost c. Cost of plastic for a toy manufacturer Product costs-direct materials cost d. Cost of sewing machine needles used by a shirt manufacturer Product costs-factory overhead cost e. Cost of television commercials
Answer:
Instructions are listed below
Explanation:
- Direct materials are those materials and supplies that are consumed during the manufacture of a product, and which are directly identified with that product.
- Direct labor is production or services labor that is assigned to a specific product, cost center, or work order.
- Manufacturing overhead refers to indirect factory-related costs that are incurred when a product is manufactured.
- Period costs are not directly tied to the production process. Overhead or sales, general, and administrative (SG&A) costs are considered period costs. SG&A includes costs of the corporate office, selling, marketing, and the overall administration of company business.
- Product costs are the direct costs involved in producing a product. A manufacturer, for example, would have production costs that include: Direct labor, Raw materials, Manufacturing supplies, Overhead that's directly tied to the production facility such as electricity.
In this exercise:
a. Annual picnic for plant employees and their families: Period costs-administrative expense.
b. Cost of fabric used by clothing manufacturer: Product costs- DM
c. Cost of plastic for a toy manufacturer: Product costs-DM
d. Cost of sewing machine needles used by a shirt manufacturer: Product costs- MOH
e. Cost of television commercials: Period cost - Selling
Initial sale price of common stock Hudson-Perry Recordings Inc has one issue of preferred stock and one issue of common stock outstanding. Given their stockholders' equity account that follows, determine the original price per share at which the firm sold its single issue of common stock. Stockholders' Equity ($000) Preferred stock $ 228 Common stock ($ 0.24 par, 1 comma 402 comma 000 shares outstanding) 336 Paid-in capital in excess of par on common stock 19 comma 466 Retained earnings 1 comma 803 Total stockholders' equity Modifying $ 21 comma 833 with double underline The original price per share is $ nothing. (Round to the nearest cent.)
Answer:
the original price from the issue of shares: 14.12 dollars
Explanation:
It will be the sum of the common stock and the paid-in capital in excess of par:
The values are expresses as thousand, so we multiply by 1,000
common stock 0.24 x 1,402,000 = 336,480
additional paid-in 19,466 x 1,000 = 19,466,000
Total 19,802,480
Price per share: 19,802,480 / 1,402,000 = 14,12410 = $14.12 This will be the original price of the price.
Fran buys 1,000 shares of stock issued by Miller Brewing. In turn, Miller uses the funds to buy new machinery for one of its breweries. In the terminology of macroeconomics....
a. Fran is investing; Miller is saving.
b. Fran is saving; Miller is investing.
c. Fran and Miller are both saving.
d. Fran and Miller are both investing.
Answer: d. Fran and Miller are both investing.
Explanation: An investment is the action of using a quantity of resources in a project or business to make a profit.
Both Fran and Miller are investing, because Fran wants to take advantage of his savings by buying the shares to make them grow and Miller wants to invest in his business, to be able to increase production or get a better result than he currently maintains.
Answer:
The correct answer is letter "B": Fran is saving; Miller is investing.
Explanation:
In Macroeconomics many points differentiate a saving from an investment. Savings are usually destined for short-term goals, allowing individuals to dispose of that money at any time. Investments are destined to be part of a long-term goal. Money cannot be cashed immediately out of investments since in most cases they are part of a production process, such as machinery in mines, for instance.
In that case, Fran is saving by buying 1000 shares of stock while Miller is investing by purchasing new machinery for one of its breweries.
Interest-only loan (regular interest payments each year and principal at maturity). Chuck Ponzi has talked an elderly woman into loaning him $35 comma 000 for a new business venture. She has, however, successfully passed a finance class and requires Chuck to sign a binding contract on repayment of the $35 comma 000 with an annual interest rate of 12% over the next 15 years. Determine the cash flow to the woman under an interest-only loan, in which Ponzi will pay the annual interest expense each year and pay the principal back at the end of the contract. What is the amount of payment that the woman will receive at the end of years 1 through 14?
Answer:
Ans. From years 1 through 14 she will receive $4,200 and ending year 15 she will receive $39,200 (which is $35,000 of the loan plus $4,200 interest)
Explanation:
Hi, this works just like a bond with a coupon, so first we need to find the amount of interest that she is going to receive every year, at the end of the year, with an annual interest rate of 12%.
[tex]Interests=Loan*(interestRate)[/tex]
[tex]Interest=35,000*0.12=4,200[/tex]
So, that is what she will receive every year at the end of the year from yr1 through 14. in year 15 she will get $39,200, which is the interest + the principal, in our case, $35,000.
Best of luck.
People, in general, do not lend money to one another to buy a house or a car because: A. they do not know about the capacity of other people to repay their debts. B. of information problems. C. they do not know about the effort other people will provide to repay their debts. D. All of the above.
Answer: People, in general, do not lend money to one another to buy a house or a car because: D. All of the above.
Explanation: It all comes down to information problems, assuming that all participants fully know the financial capacity of others would lend money because there would be no uncertainty and risk.
That is why certain requirements are requested when requesting loans at a bank.
Normative and positive statements
The following table contains statements that provide some analysis of policies that address breast cancer.
Categorize each of them as positive or normative.
Statement
Positive
Normative
Breast cancer is the fifth most common cause of cancer death.
For women aged 60 to 69, breast cancer screening significantly reduces breast cancer mortality.
Doctors should encourage women aged 60 to 69 to be screened for breast cancer.
The government should force doctors to encourage women aged 60 to 69 to be screened for breast cancer.
Answer:
1. Breast cancer is the fifth most common cause of cancer death - Positive statement
2. For women aged 60 to 69, breast cancer screening significantly reduces breast cancer mortality - Positive statement
3. Doctors should encourage women aged 60 to 69 to be screened for breast cancer - Normative statement
4. The government should force doctors to encourage women aged 60 to 69 to be screened for breast cancer - Normative statement
Final answer:
Explanation of positive and normative statements about breast cancer policies.
Explanation:
Normative:
Doctors should encourage women aged 60 to 69 to be screened for breast cancer.The government should force doctors to encourage women aged 60 to 69 to be screened for breast cancer.Positive:
Breast cancer is the fifth most common cause of cancer death.For women aged 60 to 69, breast cancer screening significantly reduces breast cancer mortality.for planning control, and decision-making purpose:
(A) fixed costs should be converted to a per unit basis
(B) discretionary fixed costs should be eliminated
(C) variable costs should be ignored
(D) mixed costs should be separated into their variable and fixed components
Answer:
D) mixed costs should be separated into their variable and fixed components
Explanation:
A mixed cost is a cost that contains both a fixed cost component and a variable cost component. It is important to understand the mix of these elements of a cost, so that one can predict how costs will change with different levels of activity. Typically, a portion of a mixed cost may be present in the absence of all activity, in addition to which the cost may also increase as activity levels increase. As the level of usage of a mixed cost item increases, the fixed component of the cost will not change, while the variable cost component will increase. The formula for this relationship is
Denson, Inc. has 10,000 shares of 7%, $100 par value, non-cumulative preferred stock and 40,000 shares of $1 par value common stock outstanding at December 31, 2014. There were no dividends declared in 2013. The board of directors declares and pays a $120,000 dividend in 2014. What is the amount of dividends received by the common stockholders in 2014?a. $0.b. $70,000.c. $120,000.d. $50,000.
Answer:
d. $50,000.
Explanation:
the preferred stock are non-cumulative so their unpaid dividends of previous year are not accumulated and carry over the following years.
10,000 shares x $100 x 7% = $70,000 dividends to preferred shares
120,000declared dividends
- 70,000 preferred dividends
50,000 available for common stock
You have been offered an investment that will pay you $10,000 in 10 years. You think a 7% annual rate compounded annually is an appropriate rate of return or interest rate for this investment. What is the most you would be willing to pay for this investment today based on this information? Round your answer to the nearest dollar.
Answer:
Explanation:
the minimun value is expressed by the present value of the investment using a 7% rate, lets recall the formula for finding present values:
[tex]PV=FV*(1+i)^{-n}[/tex]
where, PV is present value, FV is the future value, and n is time elapsed. So applying to this problem we have:
[tex]PV=10,000*(1+0.07)^{-10}[/tex]
[tex]PV=5,083.49[/tex]
So the minimun value which is profitable to pay is 5,083.49 today, in that sense you will get a return on 7% compounded after 10 years
Preston Company manufactures a product with a unit variable cost of $140 and a unit sales price of $264. Fixed manufacturing costs were $720,000 when 10,000 units were produced and sold. The company has a one-time opportunity to sell an additional 3,000 units at $210 each in a foreign market which would not affect its present sales. If the company has sufficient capacity to produce the additional units, acceptance of the special order would affect net income as follows: Select one: a. Income would increase by $156,000. b. Income would decrease by $162,000. c. Income would increase by $210,000. d. Income would increase by $6,000.
Answer:
c. Income would increase by $210,000.
Explanation:
For computing the effect of net income, first we have to compute the net income which is shown below:
Net income = Sales - variable cost - fixed cost
where,
Sales = Number of units × selling price per unit
= 10,000 units × $264
= $2,640,000
Variable cost = Number of units × variable cost per unit
= 10,000 units × $140
= $1,400,000
And, the fixed cost is $720,000
Now put these values to the above formula
So, the value would equal to
= $2,640,000 - $1,400,000 - $720,000
= $520,000
If 3,000 additional units are sell
Then, increased in the net income would be
= Additional units × (New Selling price - variable cost)
= 3,000 units × ($210 - $140)
= 3,000 units × $70
= $210,000
The Jasmine Tea Company purchased merchandise from a supplier for $46,700. Payment was a noninterest-bearing note requiring Jasmine to make five annual payments of $12,000 beginning one year from the date of purchase. What is the interest rate implicit in this agreement?
Answer:
Implicit interest= 28.48%
Explanation:
Giving the following information:
The Jasmine Tea Company purchase merchandise from a supplier for $46,700.
Payment is five annual payments of $12,000 beginning one year from the date of purchase.
The total payment is= 12000*5= $60000
Implicit interest= (60000/46700)-1= 28.48%
Thumb Ink Inc. is a publishing company based in the United States. Its marketing and supply chain activities will add value when:
a. it dispatches new quality regulations to its vendors.
b. it switches to online media because they are widely used.
c. it copies the standards of other publishing companies.
d. it enters into joint ventures.
Answer:
b. it switches to online media because they are widely used.
Country A can produce, at most, 50 olives or 25 pickles, or some combination of olives and pickles such as the 30 olives and 10 pickles it is currently producing. Country B can produce, at most, 130 olives or 65 pickles, or some combination of olives and pickles such as the 90 olives and 20 pickles it is currently producing.
a. Is there a basis for trade? If so, offer the two countries a deal they can't refuse.
Answer:
There is no basis for trade, as both country has the same opportunity cost. It will not produce benefit from trade
Explanation:
We will check if there is a comparative advantage between country's to know if there is benefit from trade:
Country A
olives opportunity cost:
25/50 = 1/2 = 0.50
Do an olive means renounce to half-unit of pickles
pickes opportunity cost:
50/25 = 2
Do a pickle cost 2 olives for country A
Country B
olives opportunity cost:
65/130 = 1/2 = 0.5
Do an olive means renounce to half-unit of pickles
pickles:
130/65 = 2
each pickle is produce at the expense of 2 olives
Jacques has plans to go to a play and already has a $50 nonrefundable, nonexchangeable, and nontransferable ticket. Now Kyoko, whom Jacques has wanted to date for a long time, asks him to a party. Jacques would prefer to go to the party with Kyoko and forgo the play, but he doesn't want to waste the $$50 he spent on the play ticket.
From the perspective of an economist, if Jacques decides to go to the party with Kyoko, what has he just done?
Answer:
evaluate under opportunity cost
Explanation:
This is an exmaple of opportunity cost:
The opportunity cost is the cost of the best alternative rejected:
Jacques opportunity cost of the date is lossing the play and the $50 dollars of the ticket
as the date and party opportunity cost is not datingthe girl
As Jacques picks the date , it will be evaluating dating as more rewarding than the play as it prefer to renounce to the play rather than the date
Which of the following requires marketing managers to decide which markets to target and determine how to position the product in the market? A. Performing a situational analysis B. Controlling the marketing functions C. Implementing a marketing plan D. Setting marketing objectives E. Developing marketing strategies
Answer: Developing marketing strategies
Explanation: In simple words, the strategy used by organisations to attract potential customers and persuading them to purchase the product is called the marketing strategy.
This strategy consists of a number of tools like advertising, discounts offering, availability in market etc.
Thus determining the target market and the position of the product comes under the purview of marketing strategy.
The asset, liabilities, and equities of Damon Design Studio have the following balances at December 31, 2018. The retained earnings was 39,000 at the beginning of the year. At year end, common stock was $ 13,000 and dividends were $ 57,000.Notes Payable $14,000Rent expense 23,000Cash 3,200Office supplies 5,100Salaries expense 65,000Property tax expense 2,200Office furniture 48,400Utilities expense 7,200Account payable 3,600Service revenue 154,600Account receivable 9,300Miscellaneous expense 3,800(a) Preparing the statement of retained earning(b) Prepare the statement of retained earning for Damon Design Studio for the year ending December 31, 2018.
Answer:
Explanation:
For computing the retained earning ending balance, first, we have to compute the net income. So, the calculation is shown below:
= Service revenue - salaries expense - property tax expense - utilities expense - miscellaneous expense - rent expense
= $154,600 - $65,000 - $2,200 - $7,200 - $3,800 - $23,000
= $53,400
So, the net income would be $53,400
Now, we have to find the ending retained earning balance which equals to
= Beginning retained earning balance + net income - dividend paid
= $39,000 + $53,400 - $57,000
= $35,400
The preparation of the statement of retained earning is presented in the spreadsheet. Kindly find the attachment below:
The statement of retained earnings for Damon Design Studio for the year ending December 31, 2018, starts with an opening balance of $39,000, adds a net income of $53,400 and subtracts dividends of $57,000, resulting in an ending balance of $35,400.
Explanation:Preparing the Statement of Retained Earnings for Damon Design StudioTo prepare the statement of retained earnings for Damon Design Studio for the year ending December 31, 2018, we must consider the beginning balance of retained earnings, add the net income (or loss), and subtract any dividends paid during the year.
The beginning retained earnings is given as $39,000. We will calculate net income by subtracting total expenses from the total service revenue. Here's the detailed calculation:
Service Revenue: $154,600Total Expenses (Rent expense + Salaries expense + Property tax expense + Utilities expense + Miscellaneous expense): $23,000 + $65,000 + $2,200 + $7,200 + $3,800 = $101,200Net Income: Service Revenue - Total Expenses = $154,600 - $101,200 = $53,400Retained Earnings at the beginning of the year: $39,000
Plus Net Income: $53,400
Minus Dividends: $57,000
Retained Earnings at the end of the year: $39,000 + $53,400 - $57,000 = $35,400
Statement of Retained Earnings SummaryDamon Design Studio
Retained Earnings, January 1, 2018: $39,000
Add: Net Income for 2018: $53,400
Less: Dividends Paid in 2018: $57,000
Retained Earnings, December 31, 2018: $35,400
Suppose GDP in this country is $1,680 million. Enter the amount for government purchases.
National Income Account Value (Millions of dollars)
Government Purchases ( G )
Taxes minus Transfer Payments ( T ) 360
Consumption ( C ) 1,000
Investment ( I ) 280
Complete the following table by using nationa income accounting identtes to nationa saving, in you calculacons use aita mom the preceding table. cakulate National saving (S) million
Answer:
G= 400
S= 280
Explanation:
Giving the following information:
GDP in this country is $1,680 million.
National Income Account Value (Millions of dollars)
Government Purchases ( G ) =?
Taxes minus Transfer Payments ( T )= 360
Consumption ( C )= 1,000
Investment ( I )= 280
The formula to calculate GDP is:
GDP=C+I+G+/-NX
GDP= C+I+G
1680= 1000 + 280 + G
G= 1680 - 1000 - 280= 400
Savings= (Y-T-C) + (T-G)
S= (1680 - 360 - 1000) + (360 - 400)
S= 280
The Government Purchases (G) can be calculated as $400 million, subtracting Consumption (C) and Investment (I) from GDP. Also, National Saving (S) is calculated as $280 million, using the formula S = GDP - C - G.
Explanation:The subject of this question is national income accounts, specifically about government purchases (G). According to the national income accounting identities, GDP (Gross Domestic Product) is the sum of Consumption (C), Investment (I), Government Purchases (G), and Net Exports (which are not mentioned in this question). In this case, the GDP is $1,680 million, Consumption is $1,000 million and Investment is $280 million. To calculate Government Purchases (G), we subtract Consumption (C) and Investment (I) from the total GDP.
So, G = GDP - C - I
Plug in the given amounts
G = $1,680 million - $1,000 million - $280 million
Hence, Government Purchases (G) = $400 million.
We also calculate National Saving (S) using the following identity: S = GDP - C - G. From our previous calculation, we know that G = $400 million, so:
S = $1,680 million - $1,000 million - $400 million
Therefore, National Saving (S) = $280 million.
Learn more about National Income Accounting here:https://brainly.com/question/33716698
An airline manufacturer incurred the following costs last month (in thousands of dollars):
a. Airplane seats . . . . . . . . . . . . . . . . . . . . . . . . . $220
b. Production supervisors' salaries . . . . . . . . . . . . . . $170
c. Depreciation on forklifts . . . . . . . . . . . . . . . . . . . . $110
d. Machine lubricants . . . . . . . . . . . . . . . . . . . . . $35
e. Factory janitors' wages . . . . . . . . . . . . . . . . . . . . . $60
f. Assembly workers' wages . . . . . . . . . . . . . . . . . . . $600
g. Property tax on corporate marketing office . . . . . $25
h. Plant utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $160
i. Cost of warranty repairs . . . . . . . . . . . . . . . . . . . . $230
j. Machine operators' health insurance . . . . . . . . . . $40
k. Depreciation on administrative offices . . . . . . . . . $60
l. Cost of designing new plant layout . . . . . . . . . . . . $165
m. Jet engines . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,700
Requirement
1. Assuming the cost object is an airplane, classify each cost as one of the following: direct material (DM), direct labor (DL), indirect labor (IL), indirect materials (IM), other manufacturing overhead (other MOH), or period cost. What is the total for each type of cost? (Enter amounts in thousands instead of dollars by omitting the $000s. Leave cells blank that do not require numerical inputs.)
DM DL IM IL MOH Period
a. Airplane seats . . . . . . . . . . . . . . .
b. Production supervisors' salaries .
c. Depreciation on forklifts . . . . . . . .
d. Machine lubricants . . . . . . . . . . .
e. Factory janitors' wages . . . . . . . .
f. Assembly workers' wages . . . . . .
Answer:
Instructions are listed below
Explanation:
- Direct materials are those materials and supplies that are consumed during the manufacture of a product, and which are directly identified with that product.
- Direct labor is production or services labor that is assigned to a specific product, cost center, or work order.
- Manufacturing overhead refers to indirect factory-related costs that are incurred when a product is manufactured.
- Period costs are not directly tied to the production process. Overhead or sales, general, and administrative (SG&A) costs are considered period costs. SG&A includes costs of the corporate office, selling, marketing, and the overall administration of company business.
In this exercise:
Direct Material:
Airplane seats . . . . . . . . . . . . . . . . . . . . . . . . . $220
Jet engines . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,700
Total= $1920
Direct labor:
Assembly workers' wages . . . . . . . . . . . . . . . . . . . $600
Machine operators' health insurance . . . . . . . . . . $40
Total= $640
Indirect labor:
Production supervisors' salaries . . . . . . . . . . . . . . $170
Factory janitors' wages . . . . . . . . . . . . . . . . . . . . . $60
Total= $230
MOH:
Machine lubricants . . . . . . . . . . . . . . . . . . . . . $35
Plant utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $160
Depreciation on forklifts . . . . . . . . . . . . . . . . . . . . $110
Total= $305
Period cost:
Property tax on corporate marketing office . . . . . $25
Cost of warranty repairs . . . . . . . . . . . . . . . . . . . . $230
Depreciation on administrative offices . . . . . . . . . $60
Cost of designing new plant layout . . . . . . . . . . . . $165
Total= $480
Fuzzy Monkey Technologies, Inc., purchased as a long-term investment $ 110 million of 10% bonds, dated January 1, on January 1, 2018. Management intends to have the investment available for sale when circumstances warrant. For bonds of similar risk and maturity the market yield was 12%. The price paid for the bonds was $94 million. Interest is received semiannually on June 30 and December 31. Due to changing market conditions, the fair value of the bonds at December 31, 2018, was $100 million. Required: 1. to 3. Prepare the relevant journal entries on the respective dates (record the interest at the effective rate). 4-a. At what amount will Fuzzy Monkey report its investment in the December 31, 2018, balance sheet? 4-b. Prepare the entry necessary to achieve this reporting objective. 5. How would Fuzzy Monkey's 2018 statement of cash flows be affected by this investment?
Answer:
investment in bonds 110 millions
discount on bonds 16 millions
cash 94 millions
to record purchase of bonds
cash 5.5 million
discount 0.14 millions
interest revenue 5.64 millions
to record cash proceeds on June 30th
cash 5.5 million
discount 0.1484 millions
interest revenue 5.6484 millions
to record cash proceeds on December 31th
Investment on Bonds
bonds 110,000,000
discount (15, 711, 600)
net 94,288,400
Cash flow:
Investing activities
purchase of bonds (94 millions)
proceeds from investmetn on bonds 11 millions
Explanation:
June 30th
110 x 10% / 2 = 110 x 5% = 5.5 millions cash proceed
94 x 12%/2 = 5.64 interest revenue
0.14 amortization
December 31th
110 x 10% / 2 = 110 x 5% = 5.5 millions cash proceed
94.14 x 0.06 = 5,6484
0.1484 amortization
Balance sheet:
will post the carring value of the bonds
Cash flow:
Will report the cash used in the purchase
and then, the cash proceed from the interest payment of June 30th December 31th
In general, individuals and nations should specialize in producing goods _________ other individuals or nations.
A. that they can produce more quickly than
B. that they can produce less quickly than
C. for which they have a lower opportunity cost compared to
D. for which they have a higher opportunity cost compared to
Answer: In general, individuals and nations should specialize in producing goods "C. for which they have a lower opportunity cost compared to" other individuals or nations.
Explanation: According to the theory of comparative advantages: Each country should specialize in what is most efficient. A comparative advantage is the ability of one country to produce using relatively less resources than another.
Arrowhead Delivery Service is owned and operated by Gates Deeter. The following selected
transactions were completed by Arrowhead Delivery Service during August:
1. Received cash from owner as additional investment, $25,000.
2. Paid creditors on account, $3,750.
3. Billed customers for delivery services on account, $22,400.
4. Received cash from customers on account, $11,300.
5. Paid cash to owner for personal use, $6,000.
Indicate the effect of each transaction on the accounting equation elements (Assets,
Liabilities,
Owner's Equity, Drawing, Revenue, and Expense). Also indicate the specific
item within the accounting equation element that is affected. To illustrate, the answer to
(1) is shown below.
(1) Asset (Cash) increases by $25,000; Owner's Equity (Gates Deeter, Capital) increases
by $25,000.
Answer
(1) Asset (Cash) increases by 25,000;
Owner's Equity (Gates Deeter, Capital) increases by 25,000.
(2) Liaiblities (Accounts Payable) decrease by 3,750
Assets (Cash ) decrease by 3,750
(3) Assets (Account Receivable ) increase by 22,400
Owner's Equity (Services revenue) increases by 22,400.
(4) Assets (Cash) increase by 11,300
Assets (Account Receivables) decrease by 11,3000
(5) Owner's Equity (Gates Deeter, Capital) decreases by 6,000.
Assets (Cash ) decrease by 6,000
Explanation:
Each transacion must have at least two accounts to explain it.
Also we must make sure that the change we made balance
so we should check if Assets = Liab + Equity
with the values, increases and decreases we post.
There is a rule of thumb which can be used as an approximation called the Rule of 72 to find interest or period of time, given the other quantity, and it is given as ni=72.If $1 is invested for 10 years, what compound rate is necessary for the money to double?
Answer:
i=7.2%
Explanation:
Giving the following information:
There is a rule of thumb which can be used as an approximation called the Rule of 72 to find interest or period, given the other quantity, and it is given as ni=72
We have $1 for 10 years. We will assume that it needs to duplicate in 10 years.
Years to double= 72/interest rate
10=72/i
i=72/10= 7.2
Control:
FV= 1*(1.072^10)= 2
Fred who is a Colts Fan paid $75 for a ticket to go to a Football game. He also spent an additional $30 for parking and bought dinner for $10. Fred took four hours off from a part time job that pays him $10 an hour to go to the game. Fred’s opportunity cost of going to the game is
(A) $155
(B) $145
(C) $105
(D) $75
(E) $135
Answer:
The correcto answer is A: $155
Explanation:
Giving the following information we need to calculate the net profit or loss:
$75 for a ticket
$30 for parking
$10 dinner
Fred took four hours off from a part-time job that pays him $10 an hour to go to the game.
Total cost of the game= $115
Total loss from nos going to work= $40
Total loss= $155
If he wouldn't have gone to the game, he would have saved $115 and gain $40
Inventory records for Dunbar Incorporated revealed the following:
Date Transaction Number
of Units Unit
Cost
Apr. 1 Beginning inventory 530 $2.37
Apr. 20 Purchase 310 2.50
Dunbar sold 640 units of inventory during the month. Cost of goods sold assuming LIFO would be
Answer:
Cost of goods sold assuming LIFO would be $474
Explanation:
Date Q U.cost Cost Sold Inventory Cost
april 1 530 2,37 1256,1 330 200 474
apri 20 310 2,5 775 310 0 0
640
Galehouse Gas Stations Inc. expects sales to increase from $1,670,000 to $1,870,000 next year. Galehouse believes that net assets (Assets − Liabilities) will represent 55 percent of sales. His firm has an 9 percent return on sales and pays 25 percent of profits out as dividends. a. What effect will this growth have on funds? b. If the dividend payout is only 5 percent, what effect will this growth have on funds?
The growth in sales is expected to increase funds by approximately $986,425.
Step 1
To determine the effect of the sales growth on funds, we first calculate the net assets and then assess the change in funds.
Net Assets:
Net Assets = 55% of Sales
= 0.55 * $1,870,000
= $1,028,500
Step 2
Return on Sales (ROS):
ROS = 9% of Sales
= 0.09 * $1,870,000
= $168,300
Step 3
Dividends Paid:
Dividends = 25% of Profits
= 0.25 * ROS
= 0.25 * $168,300
= $42,075
Step 4
Change in Funds:
Change in Funds = Net Assets - Dividends Paid
= $1,028,500 - $42,075
= $986,425
Therefore, the growth in sales from $1,670,000 to $1,870,000 will result in an increase in funds by $986,425.
The increase in sales is expected to boost funds by $986,425, calculated by subtracting dividends paid from the net assets.
Complete question : Galehouse Gas Stations Inc. expects sales to increase from $1,670,000 to $1,870,000 next year. Galehouse believes that net assets (Assets − Liabilities) will represent 55 percent of sales. His firm has an 9 percent return on sales and pays 25 percent of profits out as dividends. What effect will this growth have on funds?
Carlin Company, which uses net present value to analyze investments, requires a 10% minimum rate of return. A staff assistant recently calculated a $500,000 machine's net present value to be $86,400, excluding the impact of straight-line depreciation. FV of 1 (i=10%, n=5): 1.611 FV of a series of $1 cash flows (i=10%, n=5): 6.105 PV of $1 (i=10%; n = 5): 0.621 PV of a series of $1 cash flows (i=10%, n=5): 3.791 If Carlin ignores income taxes and the machine is expected to have a five-year service life, the correct net present value of the machine would be:
Answer:
The correct net present value of the machine would be $86,400
Explanation:
For computing the net present value, the discount factor, yearly cash inflows are required.
In the question, it is already mentioned that Carlin ignores income taxes, and for depreciation, income tax is to be considered. So, automatically the depreciation is also not be considered in calculating part which means that the net present value would remain the same.