Answer:
NET INCOME $392,681.25
Explanation:
To find net income we need to first calculate the pre-tax income and then calculate the tax and subtract
[tex]pretax \: income = revenue \: - expenses[/tex]
sales 1,681,000
(COGS) (812,300)
GROSS PROFIT 868,700
(Depreciation expense) (175,000)
(Interest expense) (89,575)
pre-tax income 604,125
[tex]pretax \: income \times rate = income \: tax \: expense[/tex]
tax income
604,125* 0.35= (211,443.75)
net income = 392,681.25
Martinez Corp. has 2,800 shares of 9%, $103 par value preferred stock outstanding at December 31, 2017. At December 31, 2017, the company declared a $121,000 cash dividend. Determine the dividend paid to preferred stockholders and common stockholders under each of the following scenarios. 1. The preferred stock is noncumulative, and the company has not missed any dividends in previous years.
Answer:
dividend for preference shareholder is $25,956 and for common shareholder is $95,044
Explanation:
Preference stock and common stock are almost same but with difference that when a company issues preferential shares to some investors, they give those preference shareholders some preferential rights , such as when a company is declaring dividend , they will give dividends first to preference shareholders first and then common stockholders.
Here it is given that the preference stock are non cumulative which means that if company has given some dividends in the past and some preference shareholders haven't got those dividends , these shareholders don't have any right to ask company for those unpaid dividends.
For calculating the dividend for preference shareholder we will use =
Par value of stock x Rate of interest x Number of preference stock
= $103 x 9% x 2800
= $103 x .09 x 2800
= $25,956
Therefore the value of dividends given to preference shareholders is $25,956,
Given amount dividends by company - $121,000
which means the rest of the dividend is for common shareholders,
dividend for common shareholder = $121,000 - $25,956
= $95,044
In the scenario given, preferred stockholders will receive $25,956 worth of dividends and common stockholders will receive $95,044, assuming the company's preferred stock is noncumulative and the company has not missed any dividends in previous years.
Explanation:Under the given scenario, we first need to calculate the dividends for the preferred stockholders. Martinez Corp. has 2,800 shares of 9%, $103 par value preferred stock. The dividend per preferred stock is calculated by multiplying the par value with the dividend rate, which would be $103 * 0.09 = $9.27 per share. Total preferred dividends would therefore be $9.27 * 2800 = $25,956.
Now, since in the scenario, the preferred stocks are noncumulative (which means they do not accumulate unpaid dividends), and the company has not missed any dividends in the past years, the preferred stockholders will be paid first. This means, out of the total cash dividend of $121,000 declared, preferred stockholders will receive their full share of $25,956. The rest will go to the common stockholders.
The dividend for the common stockholders will then be the total dividend minus the dividend for preferred stockholders. So, common stockholders would receive $121,000 - $25,956 = $95,044. Thus, in this scenario, preferred stockholders receive $25,956 and common stockholders receive $95,044.
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Ricky's Repair Shop has a monthly target profit of $ 28,000. Variable costs are 80 % of sales, and monthly fixed costs are $ 12,000. Requirements 1. Compute the monthly margin of safety in dollars if the shop achieves its income goal. 2. Express Ricky's margin of safety as a percentage of target sales.
Answer: Margin of Safety(MOS) in dollars= $1,40,000
Margin of Safety(MOS) as a percentage of target sales = 70%
Explanation:
Given:
Target profit = $28000
Variable costs = 80 % of sales
Contribution = 20 % of sales
Fixed Costs = $12000
Required sales in units = [tex]\frac{Fixed Costs +Target profit }{Contribution margin per unit}[/tex]
Using the given in above formula;
Required sales in dollars = [tex]\frac{12000+0}{20}[/tex]
=$60000
Target sales = [tex]\frac{(Fixed Costs + Target profit)}{Contribution}[/tex]
Target sales = $200000
Margin of Safety(MOS) in dollars = Target Sales - Break-even point sales
Margin of Safety(MOS) in dollars = $200000 - $60000 = $140000
Margin of Safety(MOS) as a percentage of target sales = [tex](\frac{140000}{200000})\times 100[/tex]
=70%
Final answer:
To answer the student's question, we first calculate the sales needed to meet the profit target. However, due to the lack of actual sales data, we are unable to compute the margin of safety in dollars or as a percentage of target sales.
Explanation:
The student is asking how to compute the margin of safety in dollars and express it as a percentage of target sales for Ricky's Repair Shop. First, we need to determine the sales required to achieve the target profit. Since variable costs are 80% of sales, the contribution margin is 100% - 80% = 20% of sales. To reach the $28,000 profit target, we need to cover the $12,000 fixed costs and the $28,000 profit, which is a total of $40,000. We divide this by the contribution margin percentage to get the required sales: $40,000 / 20% = $200,000.
Now, we calculate the margin of safety by subtracting the target sales from the actual sales. Since we don't have the actual sales amount in the question, we can't complete this step. If we were given actual sales, we would use: Margin of Safety in dollars = Actual Sales - Target Sales.
Finally, the margin of safety as a percentage of target sales is calculated by: Margin of Safety percentage = (Margin of Safety in dollars / Actual Sales) × 100. Again, since we don't have the actual sales figure, we can't compute this percentage. Without additional data, the student's question cannot be fully answered.
Stemway Company requires a new manufacturing facility. It found three locations; all of which would provide the needed capacity, the only difference is the price. Location A may be purchased for $500,000. Location B may be acquired with a down payment of $100,000 and annual payments at the end of each of the next twenty years of $50,000. Location C requires $40,000 payments at the beginning of each of the next twenty-five years. Assuming Stemway borrowing costs are 8% per annum, which option is the least costly to the company?
Answer:
Location C costs least to the company as it only costs $461,160
Explanation:
We will evaluate all the three proposals
Location A Cost = $500,000
Location B
Down payment = $100,000
Annual year end payment = $50,000 for upcoming 20 years
Present value @ 8% = ([tex]{\sum \frac{1}{(1+0.08){^1}}+ \frac{1}{(1+0.08){^2}}+ ........ \frac{1}{(1+0.08){^2^0}}}) \times $50,000[/tex] = 9.818 X $50,000 = $490,900
Net Present Value = $100,000 + $490,900 = $590,900
Location C
Payment of $40,000 at the beginning of each year, which means first payment will not be discounted and remaining 24 payments will be discounted.
Thus Present Value = $40,000 +( [tex]{\sum \frac{1}{(1+0.08){^1}}+ \frac{1}{(1+0.08){^2}}+ ........ \frac{1}{(1+0.08){^2^4}}}) \times $40,000[/tex] = $40,000 + 10.529 X $40,000 = $40,000 + $421,160 = $461,160
Thus Location C costs least to the company as it only costs $461,160
A data safety monitoring board report for an investigator-initiated investigational drug study indicates a significantly higher than anticipated rate of an expected adverse event. This event required revision of the informed consent form to disclose the higher rate. A change in the eligibility criteria of the protocol to reduce the risk was implemented. Current subjects would be reconsented. What type of problem does this present
Answer:
This can be classified as an unanticipated problem.
Explanation:
During an investigational drug study the rate of risk of expected adverse events is indicated to be greater than what was initially expected. The current subjects need to be reconsented and the consent form needs to be updated to include this higher rate
Since the rate of an expected adverse event is greater than what was anticipated in the beginning and puts subjects and others at risk, this poses an unanticipated problem.
The scenario presents a research ethics problem requiring revisions to the informed consent form and eligibility criteria to reflect an unexpected increase in the rate of an adverse event, guaranteeing that current and future participants can make an informed decision about their involvement.
Explanation:The situation described presents a research ethics problem specifically related to informed consent and participant safety in clinical trials. When adverse events occur at higher rates than expected, it's imperative to revise the informed consent documentation to accurately reflect new risk information and reconsent current subjects. This ensures they are making an informed choice about their continued participation. Additionally, adjusting the eligibility criteria is a prudent step to mitigate risk for future participants.
The informed consent form is essential in communicating the risks, benefits, and other important information about a study. Institutional Review Boards (IRBs) are responsible for overseeing the ethical aspects of clinical trials, including the informed consent process, to protect the rights and welfare of participants. Amendments to the study protocol, like changes in risk profile and eligibility criteria, need to be updated in the Investigational New Drug (IND) application and reviewed and approved by the IRB.
Post-approval, the drug must continue to be monitored for safety through a robust pharmacovigilance system. Any new findings during this phase may lead to further amendments, restrictions, or additional clinical trials (Phase IV) to ensure the continued safety of the drug users.
The Muffin House produces and sells a variety of muffins. The selling price per dozen is $15, variable costs are $9 per dozen, and total fixed costs are $4,200. How many dozen muffins must The Muffin House sell to breakeven?
Your question asks how many muffins the Muffin House needs to sell in order to breakeven
Answer: 700 MuffinsIn order to find the answer to your question, we first need to gather important information from the question.
Important Information:
Selling price/ per muffin = $15Variable costs (cost to make)/ per muffin = $9Total fixed cost = $4,200With the information above, we can find the answer to the question.
The Muffin House spends $9 to make a muffin, but sells it for $15. So the Margin is $6 (profit).
We would only make profit from the Margin price, so we need to get the Margin price to $4,200.This means we would need to divide 4200 by 6 to get our answer. Since they want to breakeven with the fixed cost, they need to sell as much muffins for the Margin to add up to $4,200 at the end to breakeven.
[tex]4200 \div 6=700[/tex]
When you're done solving, you should get 700.
This means that The Muffin House must sell 700 muffins in order to break even.
I hope this helps!Best regards,MasterInvestorTyler has a 28 percent marginal tax rate. His employer is willing to provide health insurance coverage for Tyler if he will agree to a salary reduction. The insurance will cost the employer $5,040. If Tyler pays that same amount for health insurance premiums, he will need $7,000 in order to pay the premiums and the taxes on the compensation. How much of a cash flow savings is available to the company if it pays $5,040 for Tyler's health insurance, rather than $7,000 in compensation assuming the company has a 35 percent tax rate?
Answer:
The cash flow saving will be of $1,274 considering the taxes
Explanation:
Company pays 5040 with income tax saving = 1764 total = 3276
instead of:
7,000 in compensation with income tax saving = 2450 total = 4,550
4,550 - 3,276 = 1,274
Suppose that the U.S. government decides to charge wine consumers a tax. Before the tax, 20 million bottles of wine were sold every month at a price of $5 per bottle. After the tax, 14 million bottles of wine are sold every month; consumers pay $8 per bottle (including the tax), and producers receive $2 per bottle. The amount of the tax on a bottle of wine is $ per bottle. Of this amount, the burden that falls on consumers is $ per bottle, and the burden that falls on producers is $ per bottle. True or False: The effect of the tax on the quantity sold would have been the same as if the tax had been levied on producers. True False
Answer: The answer is as follows:
Explanation:
Before the tax,
20 million bottles of wine were sold every month at a price of $5 per bottle
After the tax,
14 million bottles of wine are sold every month; consumers pay $8 per bottle (including the tax), and producers receive $2 per bottle.
The amount paid by consumers after tax is $8 per bottle and amount paid by producers is $2 per bottle.
∴ The amount of tax on wine = $8 - $2 = $6 per bottle
Tax burden on consumers = Price paid after tax - price paid before tax
= 8 - 5
=$3 per bottle
Tax burden on Producers = Price received before tax - price received after tax
= 5 - 2
=$3 per bottle
∴ The burden of tax falls equally on both consumers and producers of $3 per bottle each.
The statement is true. Whether the tax is levied on consumer or producer, the effect of the tax on the quantity sold is the same.
The effect of tax on quantity sold is dependent on the elasticity of demand and supply. While the tax was levied on consumers, both consumers and producers shared the burden. The incidence of tax and its effect would likely be different if it was levied on producers depending on elasticity conditions.
Explanation:In this scenario, the U.S. government imposed a tax on wine consumers. Before the tax, consumers were buying 20 million bottles of wine every month at a price of $5 per bottle. After the tax was imposed, this quantity reduced to 14 million bottles sold per month, and the price paid by consumers rose to $8, implying a $6 tax on each bottle of wine. The burden of this tax was shared by both consumers and producers; consumers paid $3 more per bottle, and producers received $3 less per bottle. The effect of this tax effectively reduced the quantity of wine sold.
With regard to whether the effect would be the same if the tax had been levied on producers, this is largely dependent on the elasticity of demand and supply. If the demand for wine is more elastic than supply, consumers would bear less of the tax burden and a larger proportion of the tax would be borne by producers, which could have led to a more significant reduction in quantity. However, if supply is more elastic than demand, a tax on producers might not result in the same reduction in quantity, as producers could more easily absorb the cost of the tax.
In this case, it's crucial to understand that both demand elasticity and supply elasticity determine who actually pays the tax or the ultimate incidence of the tax. While the government can dictate who hands over the tax, market forces determine who really pays.
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The market price of a security is $26. Its expected rate of return is 13%. The risk-free rate is 5% and the market risk premium is 7.0%. What will be the market price of the security if its correlation coefficient with the market portfolio doubles (and all other variables remain unchanged)? Assume that the stock is expected to pay a constant dividend in perpetuity. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Final answer:
The new market price of the security after the correlation coefficient with the market portfolio doubles cannot be accurately determined based on the information provided. One would need to know the security's beta or dividend growth rate, which is not mentioned in the question.
Explanation:
The market price of a security is influenced by its expected rate of return and its correlation with the market portfolio. If the correlation coefficient of the security with the market portfolio doubles, it implies a higher risk associated with the security. Using the Capital Asset Pricing Model (CAPM), we can understand that as risk (beta) increases, so does the required rate of return. However, without a formula directly correlating market price and beta in the given scenario, we cannot precisely calculate the new market price without additional information on the security's beta or its cash flows such as dividends.
It is also important to note that when the security promises a constant dividend in perpetuity, the price can be figured out using the Gordon Growth Model (assuming constant growth rate for dividends), but this requires the growth rate, which hasn't been provided in the question. Therefore, based on the given information, we cannot accurately determine what the new market price of the security would be if its correlation coefficient with the market were to double.
Varghese is a high level administrator at an organization. Consistently, he calls employees into his office to point out their mistakes and to inform them of flaws within their performance; however, he never praises his employees nor informs them of positive feedback. Varghese most likely has which of the Dark Triad?
Answer: Varghese most likely has Machiavellianism.
Explanation:
All three dark triad traits are conceptually distinct although empirical evidence shows them to be overlapping. They are associated with a callous-manipulative interpersonal style.
Narcissism is characterized by grandiosity, pride, egotism, and a lack of empathy.
Machiavellianism is characterized by manipulation and exploitation of others, an absence of morality, and a higher level of self interest.
Psychopathy is characterized by continuous antisocial behavior, impulsivity, selfishness, callousness, and remorselessness.
Varghese most actually and generally likely has Machiavellianism.
What does Machiavellianism denotes in the passage?Every one of the three dark triad traits are adroitly particular albeit experimental proof shows them to cover.
They are related with a hard manipulative relational style. Narcissism is portrayed by self importance, pride, pretention, and an absence of compassion. Machiavellianism is portrayed by control and double-dealing of others, a shortfall of profound quality, and a more elevated level of personal circumstance.
People who are estimated to have an elevated degree of Machiavellianism will generally have low suitability and uprightness. Machiavellianism is likewise corresponded with psychopathy. The first distributed variant of the Mach-IV is the most generally involved measure in experimental examination.
Since Machiavellianism is related with flippant inclinations and criticism, connecting a genuine Machiavellian character with "great." Instead, it is ideal to consider when high-Mach traits are valuable and appropriate can be hard.
Therefore in the passage Varghese actually have Machiavellianism.
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The actual and planned data for Underwater University for the Fall term were as follows: Actual Planned Enrollment 4,500 4,125 Tuition per credit hour $120 $135 Credit hours 60,450 43,200 Registration, records, and marketing cost per enrolled student $275 $275 Instructional costs per credit hour $64 $60 Depreciation on classrooms and equipment $825,600 $825,600 Registration, records, and marketing costs vary by the number of enrolled students, while instructional costs vary by the number of credit hours. Depreciation is a fixed cost. a. Prepare a variable costing income statement showing the contribution margin and income from operations for the Fall term.
Answer:
Variable Costing Income Statement
Sales Revenue = 60,450 X $120 = $7,254,000
Less: Variable Cost
Reg, records, marketing = $275 X 4,500 = $1,237,500
Instructional cost = $64 X 60,450 = $3,868,800
Contribution Margin = $2,147,700
Less:
Fixed Cost
Depreciation $825,600
Net Operating Income = $$1,322,100
To prepare a variable costing income statement, calculate tuition revenue, variable costs, contribution margin, and subtract fixed costs to find income from operations. For Underwater University, the income from operations for the Fall term would be $1,322,100.
Variable Costing Income Statement
To prepare a variable costing income statement for Underwater University, we need to calculate the total tuition revenue, total variable costs (registration, records, marketing, and instructional costs), and subtract fixed costs to determine the income from operations for the Fall term.
Total Variable Costs = Variable Costs Per Enrolled Student + Instructional Costs = $1,237,500 + $3,868,800 = $5,106,300
Contribution Margin = Tuition Revenue - Total Variable Costs = $7,254,000 - $5,106,300 = $2,147,700
Fixed Costs: Depreciation on Classrooms and Equipment = $825,600
Income from Operations = Contribution Margin - Fixed Costs = $2,147,700 - $825,600 = $1,322,100
This is the income from operations Underwater University would have for the Fall term based on the given actual data and the costing method applied.
noted the following: Units Work-in-process, August 1 (50% complete) 4,000 Units started during the month of August 20,500 Work-in-process, August 31 8,000 Materials are added at the beginning of the process. Tukka Toy uses the weighted average method; equivalent units of production for August were 19,500. Therefore, the percent complete of the work-in-process at August 31 was ________.
Answer:
Percent complete of work in process at August 31 was 60%
Explanation:
In this case opening WIP = 4,000 units which were 50 % complete
During the month we created additional 20,500 units of Work In Process
Additional 8,000 units of raw material were added.
Total units = 4,000 + 20,500 +8,000 = 32,500
Equivalent units completed = 19,500
Percentage of complete work in process at month end = ( 19,500/32,500 )[tex]\times[/tex] 100 = 60%
Final answer:
The percent complete of the work-in-process at August 31 was 25%, calculated by determining the equivalent units of production, subtracting the units completed, and dividing by the ending work-in-process.
Explanation:
The student's question is asking how to calculate the percent completion of work-in-process (WIP) for the month of August using the weighted average method. We're given the number of units in WIP at the start of August (4,000 units at 50% complete), the units started during the month (20,500), and the units in WIP at the end of August (8,000). Additionally, the equivalent units of production for August were 19,500. Equivalent units of production take into account both the completed units and the percentage of completion for the units still in process at the end of the period.
Step-by-Step Calculation
As materials are added at the beginning of the process, the 8,000 units in WIP at August 31 are 100% complete concerning materials.
To find the percentage of completion for conversion costs, we need to calculate how many units were completed and transferred out. This can be found by taking the total equivalent units (19,500) and subtracting the equivalent units for the units in beginning WIP (2,000 equivalent units, because they were 50% complete). The remaining equivalent units represent the work done in August, including the completed units and the percentage completion of the ending WIP.
Using the information from step 2, calculate the completed units: 19,500 equivalent units - 2,000 equivalent units from beginning WIP = 17,500 units completed and transferred out during August.
The number of units started and completed in August equals completed units minus beginning WIP plus ending WIP:
17,500 units completed - 4,000 units beginning WIP + 8,000 units ending WIP = 21,500 units started and completed.
To find the percentage completion of the ending WIP, we use the formula:
(Equivalent units of production - Units completed)/Ending WIP = Completion percentage for the ending WIP:
(19,500 - 17,500)/8,000 = 25%
Therefore, the percent complete of the work-in-process at August 31 was 25%.
Nakatomi Corporation produces 10,000 units of Product A at a cost of $20 per unit. A detailed breakup of the cost is below. Choose the correct answer from the options provided. Per Unit Variable costs $ 12 Allocated manufacturing overhead costs 3 Allocated general administrative costs 5 $ 20 Outside supplier's offer $ 17 What are the total relevant cost of producing the units internally? $150,000 $120,000 $200,000 $170,000
Answer:
Correct option is B) $120,000
Explanation:
Relevant cost are the cost which will not be incurred in case the product is not manufactured, that includes the direct manufacturing or variable cost only. The other allocated costs will still be incurred even in case no manufacturing is done of Product A but might not be allocated to Product A.
Here, direct variable cost = $12
Total relevant cost per unit = $12
Total Relevant cost = $12 X 10,000 units = $120,000
Correct option is B) $120,000
The total relevant cost of producing 10,000 units of Product A internally by Nakatomi Corporation is $150,000.
Explanation:The total relevant cost of producing Product A internally by Nakatomi Corporation is the sum of the variable costs and the allocated manufacturing overhead costs, ignoring the allocated general administrative costs as they are not relevant in this scenario. The variable costs per unit are $12 and the manufacturing overhead costs are $3 per unit. Thus, the total relevant costs per unit is $12 + $3 = $15. Since Nakatomi Corporation is producing 10,000 units, the total relevant cost of producing the units internally is $15 * 10,000 = $150,000.
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A new manager has just arrived at your firm, and she has just finished taking an operations management class. Your company produces widgets on a moving assembly line. Most of the employees have specialized on one specific task on the assembly line, and they are good at performing their assigned task. However, as she walks around the production floor, she notices that many of the employees do not seem to be very satisfied with their job. She has a great idea on how to improve the quality of work life and thinks that the employees should be allowed to move from one specialized job to another.What type of job expansion would this be considered? __________
Answer:
In this situation job rotation is the kind of job expansion that should be considered.
Explanation:
Job rotation can be defined as a management approach in which employees at regular intervals are shifted between two or more jobs. It has a number of advantages.
This eliminates boredom and monotony from work. It helps employers in realizing what an employee is best at.It also helps in improving the skill set of employees. They become aware of different operations and it widens their work experience.Job rotation is the type of job expansion where a new manager wants to allow employees to move between different specialized tasks to improve job satisfaction and skill variety. This approach can reduce boredom and monotony on the production line and has been successfully used in various industries and organizational levels.
Job rotation is an early alternative to job specialization, involving the periodic movement of employees between different jobs to relieve the monotony associated with specialized tasks. This approach to job design has been shown to have multiple benefits, including reduced employee boredom and stress levels, improved job satisfaction, and the acquisition of a broader range of skills among employees.
Organizations that have implemented job rotation can also experience greater flexibility in task assignments, knowledge transfer between departments, and increased innovation. It's important to note that job rotation is used not only for lower-level positions but across various tiers in an organization, contributing to managerial training and bringing fresh perspectives to different areas.
Suppose you take out a home mortgage for $180.000 at a monthly interest rate of 0.4%. If you make payments of $1000/month, after how many months will the loan balance be zero? Estimate the answer by graphing the sequence of loan balances and then obtain an exact answer.
Answer:
time = 318.77
It will be after 318 months
Explanation:
We are asked to find the time of an annuity of 1,000 monthly payment
which present value is 180,000
[tex]C * \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
C = 1000
rate = 0.004
time ??
PV = 180,000
[tex]1,000 \times \frac{1-(1+0.004)^{-time} }{0.004} = 180,000\\[/tex]
We clear out the dividend:
[tex]1-(1+0.004)^{-time} = \frac{180,000\times 0.004}{1,000}\\[/tex]
Then we clear the power up, notice it is negative, so we have to multiply by (-1)
[tex](-1) \times (-(1+0.004)^{-time}) = (-1) \times (0.72 - 1)}\\[/tex]
[tex]1.004^{-time} = 0.28[/tex]
We now use logarithmics to solve for time
[tex]log_{1.004}0.28 = \frac{log0.28}{log1.004} = -318.87 =-time[/tex]
time = 319
Listed here are the total costs associated with the 2017 production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for $528 each. Costs 1. Plastic for casing—$21,000 2. Wages of assembly workers—$81,000 3. Property taxes on factory—$8,000 4. Accounting staff salaries—$37,000 5. Drum stands (1,000 stands purchased)—$38,000 6. Rent cost of equipment for sales staff—$24,000 7. Upper management salaries—$215,000 8. Annual flat fee for factory maintenance service—$16,000 9. Sales commissions—$13 per unit 10. Machinery depreciation, straight-line—$40,000 Required: 1. Classify each cost and its amount as (a) either variable or fixed and (b) either product or period. (The first cost is completed as an example.)
Answer:
1. Classifying each cost as Variable or Fixed
When total cost changes with change in output then it is variable in nature and when it remains constant then it is fixed cost.
Plastic for casing = (a) Variable cost (b) Product as will depend on number of casing. = $21,000 / 1000 units = $21 per casing if casing is per unit done individually.Wages of assembly workers = (a) Variable Costs (b) Period it will depend on number of hours worked, in piece rate system it will depend on number of units, but generally it is based on number of hours so it is period.Property taxes on factory = (a) Fixed Costs (b) Period as this does not depend on number of units produced it is fixed in nature, with time duration.Accounting staff salaries = (a) Fixed Costs (b) Period as this is not related to number of units produced and will be fixed for a month.Drum Stands = (a) Variable cost (b)Product as will be required for each drum individually manufactured.Rent cost of equipment for sales staff = (a) Fixed Cost (b) Period as rented is fixed for a specified period generally paid monthly and is not based on number of units produced.Upper management salaries = (a) Fixed Cost (b) Period as this is fixed annually and not based on number of units produced.Annual flat fee for factory maintenance service = (a) Fixed Cost (b) Period as this is fixed annually and has no relation with number of units produced.Sales commissions = (a) Variable Costs (b) Product as this is based on number of units sold and defined per unit.Machinery depreciation, straight-line = (a) Fixed Cost (b) Period as this is not based on number of units produced and is fixed annually.Tech Solutions is a consulting firm that uses a job-order costing system. Its direct materials consist of hardware and software that it purchases and installs on behalf of its clients. The firm’s direct labor includes salaries of consultants that work at the client’s job site, and its overhead consists of costs such as depreciation, utilities, and insurance related to the office headquarters as well as the office supplies that are consumed serving clients. Tech Solutions computes its predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 60,000 direct labor-hours would be required for the period’s estimated level of client service. The company also estimated $390,000 of fixed overhead cost for the coming period and variable overhead of $0.50 per direct labor-hour. The firm’s actual overhead cost for the year was $409,300 and its actual total direct labor was 67,450 hours. Required: 1. Compute the predetermined overhead rate. 2. During the year, Tech Solutions started and completed the Xavier Company engagement. The following information was available with respect to this job:
Answer:
(A) $7 overhead rate per labor hour
Explanation:
[tex]\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate[/tex]
We have to distribute the fixed overhead over the cost drivr
390,000/60,000 = 6.5 fixed overhead rate
then 6.5 + 0.5 variable = 7 overhead rate per labor hour
Pre-determined overhead rate is the rate that is calculated based on the activity base. This rate is used to allocate manufacturing overheads. The predetermined overhead rate is $9 per direct labor hour.
Job cost sheet: The job cost sheet records the details about direct materials cost, direct labor cost, and manufacturing overheads. It shows the total cost of the job work and completion details.
Variable overhead costs: These costs are directly proportional to the level of activity. If there is a change in the activity level by 10% then there would be a change in the variable cost by 10% in either direction. Variable cost is directly proportional to the volume of the production. Variable cost per unit remains constant.
Fixed overhead costs: These costs do not vary with changes in the level of activity. Fixed cost remains the same for the period. If there is an increase in the activity level, then the fixed cost per unit decreases, and if there is a decrease in the activity level then the fixed cost per unit increases. Fixed cost per unit changes with the change in the activity level.
Pre-determined overhead rate: It is the rate that is calculated based on the activity base. This rate is used to allocate manufacturing overheads.
The predetermined overhead rate as follows:
overhead rate = expected annual overhead cost ÷ expected annual operating activity
Total job cost is calculated by adding all cost incurred for the completion of the job i.e. direct materials cost, direct labor cost, and overheads cost.
1. Variable overhead rate is $0.50 per direct labor hour, the total estimated fixed overhead is $680,000, and the estimated direct labor hour is 80,000.
The predetermined overhead rate as follows: -
pre-determined overhead rate = variable overhead rate + fixed overhead rate
$0.50 + ($680,000 ÷ 80,000)
=$9.00
Therefore, the predetermined overhead rate is $9 per direct labor hour.
The variable overhead rate and fixed overhead have been added together to find the predetermined overhead rate as $9 per direct labor hour. The predetermined overhead rate is the sum of the variable overhead rate and fixed overhead. Fixed overhead per direct labor hour has been found out by dividing the total estimated fixed overhead by the estimated direct labor hour.
2. Variable overhead rate is $0.50 per direct labor hour, the total actual fixed overhead is $692,000, and the estimated direct labor hour is 83,000.
Determine the total job cost as follows: -
Total job cost + Direct materials + direct labour + overhead cost
= $38,000+$21,000+ ($9 × 280)
=$61,520
Therefore, the total job cost is $61,520.
The total job cost has been found out by adding the direct materials cost, direct labor cost, and the overheads cost. The overhead cost has been allocated based on the estimated overhead expenses.
Therefore, The predetermined overhead rate is $9 per direct labor hour.
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Nazaro's Boot Company makes specialty boots for the rodeo circuit. On December 31, 2016, the company had (a) 300 pairs of boots in finished goods inventory and (b) 1,200 heels at a cost of $8 each in raw materials inventory. During 2017, the company purchased 35,000 additional heels at $8 each and manufactured 16,600 pairs of boots. Determine the unit and dollar amounts of raw materials inventory in heels at December 31. 2017.
Answer:
Ending inventory 3,000 units
Ending Inventory $24,000
Explanation:
I'm going to assume 2 heels are use to get a pair of boots complete
16,600 boots x 2 = 33,200 heels used in production
Then:
[tex]$$Beginning Inventory + Purchase - used = Ending Inventory [/tex]
beginning 1,200 at 8
purchase 35,000 at 8
used in production (33,200)
Ending Inventory 3,000 at 8 = 24,000
The following information applies to Jasmine, who is single, for 2017:Salary $56,000Interest income from First Bank of Lexington 1,500Dividends from Watters Company stock 3,000Contribution to a traditional IRA 4,000Loan repayment from her friend 1,000Capital loss from sale of personal vehicle (2,300)Number of potential dependents ?Age 44Jasmine maintains a household for her sister, who has $9,000 from Social Security. In addition, Jasmine's aunt lives with her and has income of $3,000.The personal exemption amount for 2017 is $4,050.Calculate Jasmine's Taxable Income for 2017.
Answer:
Jasmine's taxable income for the year 2017 is $ 42,050
Explanation:
we are going to do a step wise calculation for taking out the taxable income of Jasmine,
the first step is to take out the gross income of Jasmine,
GROSS INCOME =
Salary + interest income from first bank of Lexington + Dividend income
= $56,000 + $1500 + $ 3000
= $60,500
Next step is to take out adjusted gross income by subtracting contribution to IRA from gross income,
ADJUSTED INCOME =
gross income - contribution to IRA
= $60,500 - $4000
= $56,500
Next step would be to subtract standard deduction ($6350 as of 2017) and personal exemption ( $8100 - $4050 x 2, multiplied by 2 because Jasmine's aunt live with her) from adjusted gross income,
TAXABLE INCOME =
=$56,500 - $ 6350 - $8100
= $ 42,050
When Julius hears that there are going to be cutbacks in his department, he immediately calls his supervisor and asks for an appointment. During that meeting he presents a very straightforward list of the ways in which he has been an asset to the company, proposes ways that he can help the company overcome its economic difficulties, and emphasizes his dedication and loyalty to the company. Julius is using ____-focused coping to deal with his employment uncertainty.
Answer:
maladaptive coping
Explanation:
Transfer prices are _____. A. costs of the segment producing the product or service B. revenues of the segment acquiring the product or service C. revenues of the segment producing the product or service D. none of these answers is correct
Answer: the correct answer is D. none of these answers is correct.
Explanation: A transfer price exists for accounting purposes when diverse divisions on a multy entity company are in charge of their own revenues.
Banyan Co.’s common stock currently sells for $53.25 per share. The growth rate is a constant 8%, and the company has an expected dividend yield of 2%. The expected long-run dividend payout ratio is 20%, and the expected return on equity (ROE) is 10.0%. New stock can be sold to the public at the current price, but a flotation cost of 15% would be incurred. What would be the cost of new equity? Do not round intermediate calculations. Round your answer to two decimal places.
Answer:Cost of New Equity ([tex]K_{e}[/tex]) = 20.75%
Explanation:
Banyan Company’s common stock currently sells([tex]P_{0}[/tex]) = $53.25
Growth rate is constant (g) = 8%
Expected dividend yield = 2%
Expected long-run dividend payout ratio = 20%
Expected return on equity (ROE) = 10%
Flotation cost(F) = 15%
We know that ;
Growth rate = (1-Dividend payout ratio) (ROE)
8% = (1-0.20)[tex]\times[/tex](0.10)
Cost of new equity (ke) = [tex][\frac{D_{1} }{P_{0}\times (1 - F) }] + g[/tex]
where;
F = Flotation cost
([tex]D_{1}[/tex]) = Expected Dividend
([tex]P_{0}[/tex]) = Current Stock price
g = Dividend growth rate
Calculating expected dividend:
Dividend yield = [tex][\frac{D_{1} }{P_{0}}[/tex]
15% = [tex][\frac{D_{1} }{53.25}[/tex]
[tex]D_{1}[/tex] = 15%[tex]\times[/tex] 53.25
Expected Dividend ([tex]D_{1}[/tex]) = $7.9875
Cost of New Equity ([tex]K_{e}[/tex]) = [tex][\frac{7.9875}{53.25\times (1 - 0.15) }] + 0.08[/tex]
= [tex][\frac{7.9875}{62.64}] + 0.08[/tex]
= 0.207 (or) 20.75%
Cost of New Equity ([tex]K_{e}[/tex]) = 20.75%
Actually Investors required rate of return i.e. ROE = 10% on the stock, but because of flotation costs the company must earn more than 10%.
With only a part-time job and the need for a professional wardrobe, Rachel quickly maxed out her credit card the summer after graduation. With her first full-time paycheck in August, she vowed to pay $270 each month toward paying down her $8 comma 368 outstanding balance and not to use the card. The card has an annual interest rate of 18 percent. How long will it take Rachel to pay for her wardrobe? Should she shop for a new card? Why or why not?
Final answer:
To determine the time to pay off an $8,368 credit card balance at 18% interest with $270 monthly payments, a financial calculator or specific formula is needed due to compounding interest. Additionally, considering a new card with a lower interest rate could save money.
Explanation:
Rachel needs to figure out how long it will take to pay off her outstanding credit card balance of $8,368 with an annual interest rate of 18%. The problem can be solved by calculating the amortization of the credit card debt, considering she's making a fixed payment of $270 every month. However, to do this, we need a more complex mathematical formula or a financial calculator since credit card interest is compounded monthly, and the balance changes every month after each payment and the application of interest.
Given the high interest rate of 18%, it would also be wise for Rachel to consider shopping for a new credit card with a lower interest rate. This could potentially save her a lot of money by reducing the amount of interest she pays over time. Financial institutions often offer balance transfer options with lower interest rates, sometimes even with introductory rates of 0% for a certain period, which could be greatly beneficial.
Final answer:
Rachel should consider transferring her balance to a new card with a lower interest rate to pay off her debt faster. With her current card's 18% interest and a $270 monthly payment, much of her payments will initially cover interest rather than the principal. The exact time to pay off the debt depends on the calculation using the amortization formula.
Explanation:
Calculating Credit Card Debt Payoff Time-
Rachel has an outstanding credit card balance of $8,368, with an annual interest rate of 18%. She plans to pay $270 each month to pay down her debt. To calculate the time it will take to pay off the debt, we need to use the amortization formula, which takes into account the principal amount, the monthly payment amount, and the monthly interest rate.
The monthly interest rate is 18% per year, which is 1.5% per month (18% divided by 12 months). Applying this to her balance monthly means her payments need to cover the interest before paying off the principal. This situation is not ideal, as most of her initial payments will go towards interest rather than decreasing the principal balance significantly.
To answer the second part of the question: Yes, she should shop for a new card. If Rachel were to transfer her balance to a card with a lower interest rate, she would pay less in interest, and more of her payment would go towards the principal. This could help her pay off the debt faster. A typical credit card interest rate ranges from 12% to 18% per year. Shopping for a credit card with an interest rate at the lower end of this spectrum or finding a card with a 0% introductory rate for balance transfers would be beneficial.
Given that Americans pay tens of billions of dollars every year in credit card interest, reducing the interest rate can provide significant savings and should be a priority for anyone carrying a balance. However, without the exact amortization formula and a calculator or spreadsheet to do the computations, we cannot provide a precise number of months it will take for Rachel to pay off her professional wardrobe.
As Jake began his market research, he discovered that there wasn't another retail boating supply business for more than 100 miles. In fact, there was no large lake or river, either. Jake concluded that
A. he would have to offer lower prices. B. his marketing should stress quality and service. C. the competition gave up too soon. D. there was no market for his product.19.
Answer:
As Jake began his market research, he discovered that there wasn't another retail boating supply business for more than 100 miles. In fact, there was no large lake or river, either. Jake concluded that there was no market for his product.- D.
______ reduces theoretical capacity for unavoidable operating interruptions.Practical capacityTheoretical capacityMaster-budget capacity utilizationNormal capacity utilization
Answer:
Practical capacity
Explanation:
Practical capacity reduces theoretical capacity for unavoidable operating interruptions.
Adam Kane wants to sell office supplies to as many customers as possible, in as many markets as possible. His plan is
A. a proven way to maximize his profit margin. B. a poor market strategy. C. the best way to succeed. D. a time-consuming way to find 4.
Answer:
A. a proven way to maximize his profit margin.
Explanation:
A is the only answer that makes sense in this scenario. If there is a proven way to maximize profit margin, it would mostly have a profit, yet the price would be low enough for their to be a large customer base. As many people like to join the 'bandwagon', a large customer base with high rating would potentially draw more customers, regardless if they need it or not.
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Suppose a farmer in Georgia begins to grow peaches. He uses $1,000,000 in savings to purchase land, he rents equipment for $90,000 a year, and he pays workers $150,000 in wages. In return, he produces 200,000 baskets of peaches per year, which sell for $3.00 each. Suppose the interest rate on savings is 5 percent and that the farmer could otherwise have earned $35,000 as a shoe salesman. What is the farmer's economic profit? The peach farmer earns economic profit of
Answer: The farmer's economic profit is $2,75,000.
Explanation:
Cost Incurred for Growing peaches (Explicit Cost) :
Rents equipment = $90,000 a year
Paid Wages = $1,50,000
Total Explicit cost = $2,40,000
Total Revenue(TR) Earned:
TR = Number of baskets of peaches produced per year × selling price of each peaches
= 2,00,000 × $3.00
= $6,00,000
Opportunity Cost (Implicit Cost):
Interest rate on savings ( 5 %) = 5% of $1,000,000
= $50,000
Farmer earn as a shoe salesman = $35,000
Total implicit cost = $85,000
Economic Profit:
Economic Profit = Total Revenue - Implicit cost - Explicit cost
= $6,00,000 - $85000 - $2,40,000
= $2,75,000
Thirty percent of households say they would feel secure if they had $50,000 in savings. You randomly select 8 households and ask them if they would feel secure if they had $50,000 in savings. Find the probability that the number that say they would feel secure is (a) exactly five, (b) more than five, and (c) at most five
Answer: a) 0.04667544
b) 0.01129221
c) 0.98870779
Explanation:
Binomial probability formula :-
[tex]P(x)=^nC_xp^x(1-p)^x[/tex], where P(x) is the probability of getting success in x trials, n is the total number of trials and p is the probability of getting success in each trial.
Given : The probability of households say they would feel secure if they had $50,000 in savings = 0.30
Total number of households selected = 8
a) The probability that the number that say they would feel secure is exactly five will be :-
[tex]P(5)=^8C_{5}(0.30)^5(0.70)^3\\\\=56(0.3)^5(0.7)^3=0.04667544[/tex]
b) The probability that the number that say they would feel secure is more than five :-
[tex]P(x>5)=P(6)+P(7)+P(8)\\\\=^8C_{6}(0.30)^6(0.70)^2+^8C_{7}(0.30)^7(0.70)^1+^8C_{0}(0.30)^8(0.70)^0\\\\=28(0.30)^6(0.70)^2+8(0.30)^7(0.70)^1+(0.30)^8\\\\=0.01129221[/tex]
c) The probability that the number that say they would feel secure is at most five :-
[tex]P(x\leq5)=1-P(x>5)\\\\=1-0.01129221=0.98870779[/tex]
The solution relies on understanding and applying the binomial probability formula, which involves identifying number of trials (n), success probability (p), and number of successes (x). Probabilities can be calculated for specific counts, and for ranges of counts, e.g. 'at most' or 'more than'.
Explanation:This question is about calculating probabilities using the binomial distribution. The binomial probability formula is There are 8 households, hence n=8 and the given probability of success (a household feeling secure with $50,000 in savings) is 0.3, hence p=0.3.
(a) To find the probability that exactly five households would feel secure, use the binomial formula with x=5, p=0.3, and n=8.
(b) The probability that more than five households would feel secure is found by 1 minus the probability of at most five households feeling secure.
(c) To find the probability that at most five households would feel secure, calculate the sum of probabilities that 0,1,2,3,4 or 5 households would feel secure.
Remember, all these probabilities can be calculated using the binomial distribution equation.
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At year-end (December 31), Chan Company estimates its bad debts as 1.00% of its annual credit sales of $794,000. Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $397 account of P. Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off.
Prepare the journal entries for these transactions.1. Record the estimated bad debts expense.2. Record the entry to write off P. Park's account as uncollectible.3. Record the reinstatement of Park's previously written off account.4. Record the cash received on account.
Answer:
1. bad debt expense debit 7940
allowance for bad debt credit 7940
2. allowance for bad debt debit 397
account receivable credit 397
3. account receivable debit 397
allowance for bad credit 397
4. cash debit 397
account receivable credit 397
Explanation:
the allowance will be the 1% of 794,000
then recognize the allowance for that ammount along with the bad debt expense
total write-off an account we decrease both, the allowance and account receivable
total reinstate the Parks account we do the previous entry backwards
lastly we post like any other collection from Account Receivable
Code of Ethics. You have been asked to lead a group of students, alumnae, and faculty in an effort to develop a code of ethics for a student professional organization in your career field. You are reviewing in your mind key points to cover with the group as you embark on this effort.
Which of the following statements best defines the term "code of ethics" and explains its intent?
a. A code of ethics is a set of specific laws that apply to a member of an organization or group.
b. A code of ethics is a statement of specific rules that members of an organization must follow.
c. A code of ethics forms the basis for deciding what behavior is legal and what behavior is ethical.
d. A code of ethics states the principles and core values that are essential to a set of people and that govern their behavior
Answer:
d. A code of ethics states the principles and core values that are essential to a set of people and that govern their behavior.
Explanation:
A code of ethics is the document that includes the values and principles that are important for a company, its employees and any situation that may take place in their environment. It does not include rules or behavior statements, it just give the principles that will lead the decisions and actions that the workers or the company do.
The code of ethics is the document that precede the code of conduct. In the code of conduct you can find the specific rules and procedures that apply to a company, a member or a group.
Bonita Industries wants to sell a sufficient quantity of products to earn a profit of $200000. If the unit sales price is $9, unit variable cost is $8, and total fixed costs are $200000, how many units must be sold to earn income of $200000?
Answer:
400,000 units
Explanation:
we are going to add in the dividend of the BEPunits formula the target profit.
[tex] \frac{fixed \: cost + target \: profit}{cotribution \: margin \: per \: unit} = units \: to \: achieve \: target \: profit[/tex]
[tex] \frac{200000 + 200000}{9 - 8} = 400000[/tex]
contribution per unit = sales - variable
9 -8 = 1
fixed cost + target profit
200,000+200,000 = 400,000
400,000/1 =400,000