Answer: $1,017,000
Explanation:
In calculating product costs we take the following, Direct materials and direct labor, Other variable manufacturing costs, Depreciation of factory building and manufacturing equipment and Other fixed manufacturing costs.
We add all of those with the result being the Product cost.
Calculating therefore would give us,
= 770,000 + 135,000 + 87,000 + 25,000
= $1,017,000
$1,017,000 is the amount that should be considered product costs for external reporting purposes.
If you need any clarification do comment.
The product costs for external reporting purposes in the Shoal Company's manufacturing costs for the third quarter of 2019 include direct materials, direct labor, other variable manufacturing costs, and depreciation of factory building and manufacturing equipment.
Explanation:The product costs for external reporting purposes in the Shoal Company's manufacturing costs for the third quarter of 2019 include direct materials, direct labor, other variable manufacturing costs, and depreciation of factory building and manufacturing equipment. These costs are considered product costs because they directly relate to the production of goods.
Therefore, the product costs for external reporting purposes would be:
Direct materials and direct labor: $770,000 Other variable manufacturing costs: $135,000 Depreciation of factory building and manufacturing equipment: $87,000The total product costs for external reporting purposes would be $992,000.
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Consider two stocks, Stock D, with an expected return of 19 percent and a standard deviation of 35 percent, and Stock I, an international company, with an expected return of 10 percent and a standard deviation of 15 percent. The correlation between the two stocks is –0.04. What is the weight of each stock in the minimum variance portfolio?
Answer:
[tex]W_D=0.0843\\W_I=0.9157[/tex]
Explanation:
A minimum variance portfolio is a portfolio that consists of individually assets which are risky, hedged when traded together, thereby producing the lowest possible risk for the rate of expected return. It reduces the risk of assets by hedging and trading them together.
Given that for stock D:
expected return([tex]E_d[/tex]) = 19% = 0.19 and a standard deviation ([tex]S_d[/tex])= 35% = 0.35
For stock I
expected return ([tex]E_i[/tex]) = 10% = 0.10 and a standard deviation ([tex]S_i[/tex]) = 15% = 0.15
Correlation = -0.04
The weight of stock D ([tex]W_D[/tex]) is given as:
[tex]W_D=\frac{S_i^2-(S_d*S_i*c)}{S_d^2+S_i^2-(2*S_d*S_i*c)} =\frac{0.1^2-(0.35*0.1*-0.04)}{0.35^2+0,1^2-(2*0.35*0.1*-0.04)}=0.0843[/tex]
[tex]W_I=1-W_D=1-0.0843=0.9157[/tex]
Final answer:
The weights of Stock D and Stock I in the minimum variance portfolio are calculated using the formula that takes into account their individual variances and the correlation between them. The resulting weights will balance the portfolio to minimize overall risk.
Explanation:
To calculate the weights of each stock in the minimum variance portfolio, we use the formula for the weights of two assets in such a portfolio:
Weight of Stock D (
wD) = (\sigmaI2 - \rhoDI\sigmaD\sigmaI) / (\sigmaD2 + \sigmaI2 - 2\rhoDI\sigmaD\sigmaI)
Weight of Stock I (
wI) = (\sigmaD2 - \rhoDI\sigmaD\sigmaI) / (\sigmaD2 + \sigmaI2 - 2\rhoDI\sigmaD\sigmaI)
Using the given values for Stock D and Stock I:
Expected return of Stock D: 19%Standard deviation of Stock D: 35%Expected return of Stock I: 10%Standard deviation of Stock I: 15%Correlation between Stock D and I: –0.04Substituting the values into the formulas gives us:
wD = (0.152 - (-0.04)(0.35)(0.15)) / (0.352 + 0.152 - 2(-0.04)(0.35)(0.15))wI = (0.352 - (-0.04)(0.35)(0.15)) / (0.352 + 0.152 - 2(-0.04)(0.35)(0.15))After calculations, we find the weights in the minimum variance portfolio:
wD: Weight of Stock D in the portfoliowI: Weight of Stock I in the portfolioMarin Inc. purchased a tractor trailer for $138000. Marin uses the units-of-activity method for depreciating its trucks and expects to drive the truck 1000000 miles over its 10-year useful life. Salvage value is estimated to be $16000. If the truck is driven 80000 miles in its first year, how much depreciation expense should Marin record?
Answer:
$9,760
Explanation:
For computing the depreciation expense first we have to find out the depreciation rate which is shown below:
The computation of the depreciation per miles under the units-of-production method is shown below:
= (Original cost - residual value) ÷ (estimated miles)
= ($138,000 - $16,000) ÷ (1,000,000 miles)
= ($122,000) ÷ (1,000,000 miles)
= $0.122 per miles
Now for the first year, it would be
= Miles driven in first year × depreciation per miles
= 80,000 miles × $0.122 per miles
= $9,760
On January 1, Year 1, Friedman Company purchased a truck that cost $41,000. The truck had an expected useful life of 100,000 miles over 8 years and an $8,000 salvage value. During Year 2, Friedman drove the truck 20,000 miles. Friedman uses the units-of-production method. What is depreciation expense in Year 2
Answer:
$6,600
Explanation:
The units-of-production depreciation expense = (miles driven in year 2 / total estimated miles) × (cost of asset - Salvage value)
(20,000 / 100,000) x ($41,000 - $8,000)
0.2 x $33,000 = $6,600
I hope my answer helps you
Sunland Construction Company uses the percentage-of-completion method of accounting. In 2021, Sunland began work on a contract it had received which provided for a contract price of $31500000. Other details follow: 2021 Costs incurred during the year $15600000 Estimated costs to complete as of December 31 9600000 Billings during the year 13500000 Collections during the year 8900000 What should be the gross profit recognized in 2021
Answer:
$3900000
Explanation:
The gross profit is the difference between the revenue earned during the year and the cost of sales. The percentage of completion method is one in which the revenue is recognized based on the cost incurred to date on the project.
Revenue to be recognized in 2021
= $15600000/($15600000 + $9600000) * $31500000
= $19500000
Though the billings for the year is lower, the difference may be recognized as unbilled receivable.
As such, the gross profit for the year
= $19500000 - $15600000
= $3900000
Final answer:
To calculate the gross profit recognized by Sunland Construction Company in 2021, the percentage of the project completed is first determined. This percentage is then used to recognize revenue, and the gross profit is calculated by subtracting the costs incurred from the recognized revenue. Sunland Construction Company should recognize a gross profit of $3,898,500 for the year 2021.
Explanation:
How to Calculate Gross Profit Recognized in 2021
The percentage-of-completion method for accounting requires estimating the percentage of the project that has been completed in the fiscal year to recognize revenue and corresponding gross profit accordingly. The gross profit is calculated based upon the costs incurred, estimated total costs, and the contract price.
The formula for the percentage of completion is:
Percentage of Completion = Costs Incurred to Date / (Costs Incurred to Date + Estimated Costs to Complete)
Then, we calculate the revenue to be recognized by:
Revenue Recognized = Contract Price * Percentage of Completion
Finally, we get the gross profit recognized by subtracting the costs incurred from the revenue recognized:
Gross Profit Recognized = Revenue Recognized - Costs Incurred
Using the provided information, the calculation steps are as follows:
Calculate the percentage of completion:
Percentage of Completion = $15,600,000 / ($15,600,000 + $9,600,000) = 0.619
Calculate the revenue to be recognized:
Revenue Recognized = $31,500,000 ×0.619 = $19,498,500
Calculate the gross profit recognized:
Gross Profit Recognized = $19,498,500 - $15,600,000 = $3,898,500
Therefore, Sunland Construction Company should recognize a gross profit of $3,898,500 for the year 2021.
The local government removes a tax on the production of beer in Riverside in an effort to stimulate the economy. At the same time, UC Riverside students (beer consumers) return from Spring Break ready to party in the new quarter. Given these two effects, what can we say about the equilibrium price and quantity of beer in Riverside?
a. Equilibrium price will decrease, equilibrium quantity will increase.
b. Equilibrium quantity will decrease; the effect on price is ambiguous.
c. Equilibrium price will increase; the effect on quantity is ambiguous.
d. Eaulibaum ammtitv will increase: the effect on orice is ambiguous.
Answer:
Equilibrium quantity will increase; Equilibrium price is ambiguous.
Explanation:
If the government removes a tax on the production of beer then as a result the producers of beer will increase their production level and this will increase the supply of beer in an economy. Therefore, there is a rightward shift in the supply curve of beer.
Simultaneously, the students are ready to party in the new quarter which indicates that the demand for beer increases. This will shift the demand curve for beer rightwards.
As a result of these shift in the demand curve and in the supply curve of beer, the equilibrium quantity of beer increases and the effect on equilibrium price of beer is ambiguous because that will be dependent upon the magnitude of the shift in the demand and supply curve.
The income statement, balance sheet, and additional information for Video Phones, Inc., are provided.
VIDEO PHONES, INC.
Income Statement
For the Year Ended December 31, 2015
Net sales $3,136,000
Expenses:
Cost of goods sold $ 2,050,000
Operating expenses 878,000
Depreciation expense 29,000
Loss on sale of land 8,200
Interest expense 16,000
Income tax expense 50,000
Total expenses 3,031,200
Net income $104,800
VIDEO PHONES, INC.
Balance Sheet
December 31
2015 2014
Assets
Current assets:
Cash $ 179,720 $160,760
Accounts receivable 83,200 62,000
Inventory 105,000 137,000
Prepaid rent 12,480 6,240
Long-term assets:
Investments 107,000 0
Land 212,000 244,000
Equipment 274,000 212,000
Accumulated depreciation (71,400) (42,400)
Total assets $902,000 $779,600
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $67,800 $83,000
Interest payable 6,200 10,400
Income tax payable 15,200 14,200
Long-term liabilities:
Notes payable 289,000 227,000
Stockholders' equity:
Common stock 320,000 320,000
Retained earnings 203,800 125,000
Total liabilities and stockholders’ equity $902,000 $779,600
Additional Information for 2015:
1. Purchase investment in bonds for $107,000.
2. Sell land costing $32,000 for only $23,800, resulting in a $8,200 loss on sale of land.
3. Purchase $62,000 in equipment by borrowing $62,000 with a note payable due in three years. No cash is exchanged in the transaction.
4. Declare and pay a cash dividend of $26,000.
Required:
a. Prepare the statement of cash flows for Video Phones, Inc., using the direct method. Disclose any noncash transactions in an accompanying note.
Answer:
Net increase in cash position is $18,960
From operations $128,160
From investing activities -$83,200
From Finance activities -$26,000
Explanation:
The income statement has been uploaded for your benefit.
The schedules attached tagged "workings" explains how we arrived at each change in cash flow by line item.
The cash flow statement is one of the most important forms of the financial statement being prepared at the end of the financial period to record the inflow and outflow of the cash by various business activities. It can be prepared either by direct or indirect method.
It bifurcates the transactions into three activities: Operating activity, investing activity, and financing activity.
The cash flow statement by the direct method is attached below in the image.
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The Filling Department of Eve Cosmetics Company had 3,900 ounces in beginning work in process inventory (90% complete). During the period, 64,600 ounces were completed. The ending work in process inventory was 3,200 ounces (80% complete). What are the total equivalent units for direct materials if materials are added at the beginning of the process
Answer:
67,800 ounces
Explanation:
The amount of units produced by the manufacturer in a period is called equivalent units of production. It is calculated for the unit under process. We use the percentage of completion to calculate this. It includes the completed units and partially completed units.
In respect of Material
Units completed = 64,600 ounces
Partially completed = 3,200 (80% completed)
Equivalent Units = Unit completed and transferred to Finished goods + Units in Work in Process x Completion percentage
Because the material is added at the beginning so all the units are considered as Equivalent units
Equivalent Units = 64,600 + 3,200= 67,800 ounces
Answer:
The total equivalent units for direct materials if materials are added at the beginning of the process =
63,900
Explanation:
Since the direct materials are added at the beginning of the process, it simply means they are 100% complete
• Units started and completed=
(64,600-3,900) * 100%
= 60,700 * 100%
= 60,700
• Ending work in progress =
3,200 * 100%
= 3,200
Total equivalent units for direct materials if the materials are added at the beginning of the process=
60,700 + 3200
= 63,900
Before Sarah makes any changes based on the Budget Performance Report for September, she wants to be sure she understands the results, and has the following questions for you. Answer the following questions (1) and (2). All questions pertain to the September data. 1. What caused the total cost variance for direct materials
Complete Question:
Sarah has learned a lot from you over the past two months, and has compiled the following data for Sole Purpose Shoe Company for September using the techniques you taught her. She would like your help in preparing a Budget Performance Report for September. The company produced 3,000 pairs of shoes that required 10,500 units of material purchased at $8.20 per unit and 8,100 hours of labor at an hourly rate of $8.90 per hour during the month. Actual factory overhead during September was $25,200. When entering variances, use a negative number for a favorable cost variance, and a positive number for an unfavorable cost variance.
Use the data in the following table to prepare the Budget Performance Report for Sole Purpose Shoe Company for September.
Manufacturing Costs Standard Price Standard Quantity Standard Cost Per Unit
Direct materials $8.40 per unit 3.6 units per pair $30.24
Direct labor $8.50 per hour 2.8 hours per pair 23.80
Factory overhead $2.80 per hour 2.8 hours per pair 7.84
Total standard cost per pair $61.88
Sole Purpose Shoe Company
Budget Performance Report
For the Month Ended September 30
1 Manufacturing Costs Actual Costs Standard Cost at Actual Volume
Cost Variance - (Favorable) Unfavorable
2 Direct materials
3 Direct labor
4 Factory overhead
5 Total manufacturing costs
Before Sarah makes any changes based on the Budget Performance Report for September, she wants to be sure she understands the results, and has the following questions for you.
Answer the following questions (1) and (2). All questions pertain to the September data.
1. What caused the total cost variance for direct materials? Check all that apply.
The actual quantity of direct materials per unit was less than the standard quantity.
A factor other than those listed caused the total cost variance for direct materials.
The actual price for direct materials per unit was less than the standard price.
The favorable price variance dominated the unfavorable quantity variance, causing the total cost variance for direct materials to be favorable.
The unfavorable quantity variance dominated the favorable price variance, causing the total cost variance for direct materials to be unfavorable.
2. What caused the total cost variance for direct labor? Check all that apply.
The actual rate for labor hours per unit was less than the standard rate.
The actual number of labor hours per unit was less than the standard number.
A factor other than those listed caused the total cost variance for direct labor.
The unfavorable rate variance was larger than the favorable time variance, causing the total cost variance for direct labor to be unfavorable.
The favorable time variance was larger than the unfavorable rate variance, causing the total cost variance for direct labor to be favorable.
Answer and explanation:
Sole purpose shoe company
Budget performance report
For the month ended September 30
check the attached image for a well formatted table
A project to build a new bridge seems to be going very well since the project is well ahead of schedule and costs seem to be running very low. A major milestone has been reached where the first two activities have been totally completed and the third activity is 75% complete. The planners were expecting to be only55% through the third activity at this time. The first activity involves prepping the site for the bridge. It was expected that this would cost $1,435,000 and it was done for only $1,315,000. The second activity was the pouring of concrete for the bridge. This was expected to cost $10,515,000 but was actually done for $9,015,000. The third and final activity is the actual construction of the bridge superstructure. This was expected to cost a total of $8,515,000. To date, they have spent $5,015,000 on the superstructure. Calculate the schedule variance, schedule performance index, and cost performance index for the project to date.
Answer:
Explanation:
Attached is the solution
The schedule variance is $83,000, the schedule performance index is approximately 1.005, and the cost performance index is approximately 1.090.
To calculate the schedule variance (SV), schedule performance index (SPI), and cost performance index (CPI) for the project to date, we need to use the following formulas:
1. Schedule Variance (SV): SV = (Earned Value) - (Planned Value)
2. Schedule Performance Index (SPI): SPI = (Earned Value) / (Planned Value)
3. Cost Performance Index (CPI): CPI = (Earned Value) / (Actual Cost)
First, we need to determine the Earned Value (EV), Planned Value (PV), and Actual Cost (AC) for each activity and for the project as a whole.
For the first activity (prepping the site):
- EV = AC = $1,315,000 (since the activity is 100% complete)
- PV = $1,435,000 (as planned)
For the second activity (pouring concrete):
- EV = AC = $9,015,000 (since the activity is 100% complete)
- PV = $10,515,000 (as planned)
For the third activity (construction of the bridge superstructure):
- EV = $8,515,000 x 0.75 = $6,386,250 (since the activity is 75% complete)
- PV = $8,515,000 x 0.55 = $4,683,250 (as planned)
- AC = $5,015,000 (as spent)
Now, we can calculate the total EV, PV, and AC for the project:
- Total EV = [tex]EV1 + EV2 + EV3[/tex] = $1,315,000 + $9,015,000 + $6,386,250 = $16,716,250
- Total PV =[tex]PV1 + PV2 + PV3[/tex] = $1,435,000 + $10,515,000 + $4,683,250 = $16,633,250
- Total AC = [tex]AC1 + AC2 + AC3[/tex] = $1,315,000 + $9,015,000 + $5,015,000 = $15,345,000
Now we can calculate the SV, SPI, and CPI:
1. Schedule Variance (SV): SV = Total EV - Total PV
SV = $16,716,250 - $16,633,250 = $83,000
2. Schedule Performance Index (SPI): SPI = Total EV / Total PV
SPI =[tex]$16,716,250 / $16,633,250 ≈ 1.005[/tex]
3. Cost Performance Index (CPI): CPI = Total EV / Total AC
CPI = [tex]$16,716,250 / $15,345,000 ≈ 1.090[/tex]
Therefore, the schedule variance is $83,000, the schedule performance index is approximately 1.005, and the cost performance index is approximately 1.090. This indicates that the project is slightly ahead of schedule and under budget.
Rayya Co. purchases and installs a machine on January 1, 2017, at a total cost of $201,600. Straight-line depreciation is taken each year for four years assuming a seven-year life and no salvage value. The machine is disposed of on July 1, 2021, during its fifth year of service.
Prepare entries to record the partial year's depreciation on July 1, 2021, and to record the disposal under the following separate assumptions:
(1) The machine is sold for $63,000 cosh.
(2) An Insurance settlement of $52.920 is received due to the machine's total destruction in a fire.
Answer:
Debit Depreciation expense $14,400
Credit Accumulated depreciation $14,400
(1) Debit Other income/disposal account (p/l) $201,600
Credit Fixed Asset account $201,600
Debit Accumulated depreciation account $129,600
Credit Other income/disposal account (p/l) $129,600
Debit Cash account $63,000
Credit Other income/disposal account (p/l) $63,000
(2) Debit Other income/disposal account (p/l) $201,600
Credit Fixed Asset account $201,600
Debit Accumulated depreciation account $129,600
Credit Other income/disposal account (p/l) $129,600
Debit Cash account $52,920
Credit Other income (p/l) $52,920
Explanation:
Depreciation is the systematic allocation of the cost of an asset to the income statement over the estimated useful life of that asset.
It is determined as the depreciable value of the asset over the estimated useful life of the asset where the depreciable value is the difference between the cost and salvage value of the asset
Mathematically,
Depreciation = (Cost - Salvage value)/Estimated useful life
Annual Depreciation = $201,600/7
= $28,800
Between January and July 1 is 6 months hence depreciation
= 6/12 * $28800
= $14,400
Accumulated depreciation at time of sale/destruction
= 4*$28800 + $14400
= $129,600
When the amount received from the disposal of an asset is higher than the carrying value of the asset, the company makes a gain on disposal. The proceed from the disposal of an asset may be recorded in the disposal or other income account.
On disposal, the carrying amount of the asset is derecognized by
Debit Other income/disposal account (p/l)
Credit Asset account
with the cost of the asset, then,
Debit Accumulated depreciation account
Credit Other income/disposal account (p/l)
With the accumulated depreciation of the asset at the date of disposal,
Furthermore,
Debit Cash account
Credit Other income/disposal account (p/l)
with the amount received from the disposal or sale of the asset
Answer:
Entries to record the partial year's depreciation on July 1, 2021:
Debit Depreciation expense ($28,800x0.5) $14,400
Credit Accumulated depreciation $14,400
(To record accumulated depreciation - Jan. 1 - July 1, 2021)
(1) The following journals apply, if the machine is sold for $63,000 cash:
Debit Accumulated depreciation $129,600
Debit Loss on asset disposal $9,000
Debit Cash $63,000
Credit Machine cost (fixed asset) $201,600
(To record asset disposal)
(1) The following journals apply, if there was an insurance settlement of $52,920:
Debit Accumulated depreciation $129,600
Debit Loss on asset disposal ($52,920 - $72,000) $19,080
Debit Cash $52,920
Credit Machine cost (fixed asset) $201,600
(To record asset disposal)
Explanation:
Under straight-line method, depreciation is an allocation of the cost of an asset over its estimated useful life and it is expressed with this formula: (cost - residual value) / No of years = ($201,600 - 0) / 7 years = $28,800 yearly depreciation expense.
Accumulated depreciation on July 1, 2021 (4.5 Years) is $28,800 x 4.5 years $129,600.
So, the net book value (NBV) of the asset (expressed as Cost - Accumulated depreciation) is $201,600 - $129,600 = $72,000
Gain or loss on disposal = Sales proceed - NBV = $63,000 - $72,000 = $9,000 (loss)
EcoMart establishes a $1,050 petty cash fund on May 2. On May 30, the fund shows $312 in cash along with receipts for the following expenditures: transportation-in, $120; postage expenses, $369; and miscellaneous expenses, $240. The petty cashier could not account for a $9 shortage in the fund. The company uses the perpetual system in accounting for merchandise inventory Prepare the (1) May 2 entry to establish the fund, (2) May 30 entry to reimburse the fund, and (3) June 1 entry to increase the fund to $1,200.
Answer:
See the explanation below:
Explanation:
(1) May 2 entry to establish the fund
Details Dr ($) Cr ($)
Petty cash account 1,050
Cash 1,050
To record the establishment of petty cash fund
(2) May 30 entry to reimburse the fund
Details Dr ($) Cr ($)
Transportation-in 120
Postage expenses 369
Miscellaneous expenses 240
Shortage of fund 9
Petty cash account 738
To record petty cash transactions during May
Petty cash account 738
Cash 738
To record the reimbursement of the petty cash fund.
(3) June 1 entry to increase the fund to $1,200.
Additional amount to add = 1,200 - 1,050 = $150
The journal entries will be as follows:
Details Dr ($) Cr ($)
Petty cash account 150
Cash 150
To record the increase of the petty cash fund to N1,200
In 2019, Morley, a single taxpayer, had an AGI of $30,000 before considering the following items: Loss from damage to rental property ($6,000) Loss from theft of bonds (3,000) Personal casualty gain 4,000 Personal casualty loss (after $100 floor) (9,000) The personal casualties occurred in a Federally declared disaster area. Determine the amount of Morley's itemized deduction from the losses.
Answer:
$5,600
Explanation:
AGI after casualties = AGI before casualties - Loss from damage to rental property + Personal casualty gain + Personal casualty loss = $30,000 - $6,000 + $4,000 - $4,000 = $24,000
AGI limit on casualty loss = $24,000 × 10% = $2,400
Itemized deductions = Casualty Loss - AGI limit on casualty loss + Loss from theft of bonds = $5,000 -$2,400 + $3,000 = $5,600
Dreary Credit Agency uses a standard cost system for the processing of its credit applications. The labor standard at Dreary is 10 applications per 8 hour day at a standard cost of $15 per hour. During the last pay period, Dreary's credit agents worked 1,920 hours and processed 2,500 applications. The total labor cost for the agents during this period was $29,184. What was Dreary's labor efficiency variance for this last pay period
Answer:
The labor efficiency variance for this last pay period was $1,200 Favorable.
Explanation:
In order to calculate Dreary's labor efficiency variance for this last pay period, we have to calculate first the standard hours allowed for actual work using the following formula:
Standard hours
allowed for actual work= ( Total number of applications ) × number of
Standard number of applications hours worked
= (2.500 applications)× 8 hours
10 applications
=2,000 hours
After having calculated the Standard hours allowed for actual work, we can calculate the labor efficiency variance using the following formula:
labor efficiency variance= (Actual hours worked-Standard hours allowed for actual work)× standard rate
= (1,920-2,000)×$15
=-$1,200
The Labor efficiency variance is $1,200 Favorable.
Eaton Electronics uses a periodic inventory system. On March 31, Eaton has two plasma TVs on hand at a cost of $1,800 each (serial numbers 11534892 and 11534894). In April, the company purchases four more identical TVs from Toshiba for $1,600 each (serial numbers 11542631 through 11542634). In May, the company purchases five more identical TVs for $1,900 each (serial numbers 11550964 through 11550968). In June, Eaton sells two of these TVs (serial numbers 11534894 and 11542631). There were no additional purchases or sales during the remainder of the year.
Eaton Electronics uses the specific identification method. What is its cost of goods sold?
a. $3,800
b. $3,533
c. $3,600
d. $3,400
Answer:
The cost of goods sold is $3400 and option D is the correct answer.
Explanation:
Specific identification method is a method for valuing ending inventory which requires a detailed physical count to determine what units of inventory are available to the company as closing inventory.
The cost of goods sold will be the sum of the costs of the specified inventory units which are sold.
The cost of goods sold for Eaton will include a TV from the beginning inventory for serial no 11534894 at a cost of $1800 and a TV from the April purchases with serial no 11542631 at a cost of $1600.
The cost of goods sold is thus = 1800 + 1600 = $3400
if you’ve just recovered from prostate cancer within the last few years, an insurance company might require you to pay a 20% extra premium on your net premium for 3 years. Calculate the gross monthly premium during this 3 years, if the monthly gross premium after the 3 years is $100 and the monthly net premium among this $100 is $70
Final answer:
The gross monthly premium during the first 3 years after recovering from prostate cancer, with a 20% extra premium, is $114. This is calculated by adding the 20% extra charge of $14 to the stated gross premium of $100 that applies after the 3 years.
Explanation:
To calculate the gross monthly premium for the first 3 years after recovering from prostate cancer, where there is a 20% extra premium on the net premium, you can use the provided information about the net and gross premiums after those 3 years.
The given monthly net premium is $70, and an additional 20% of that is $14 (20% of $70). So, for the first 3 years, the additional cost will be $14 per month on top of the net premium, making the total monthly premium $84 ($70 + $14).
However, this is not the final gross premium. The question states that the gross monthly premium, after the 3 years, is $100. This $100 includes the net premium plus any additional fees or costs the insurance company adds to the net premium to get to the gross premium. Since we do not have information about other fees or costs, we have to assume that the 20% extra premium is the only additional cost. Therefore, to get the gross premium during the first 3 years, you add the additional cost ($14) to the stated gross premium after three years ($100), resulting in a total gross premium of $114 ($100 + $14) for the first 3 years.
Pittsboro Corporation produces and sells a single product. Data for that product are:Sales price per unit$500Variable cost per unit$320Fixed expenses for the month$1,000,000Currently selling4,000 unitsManagement is discussing increasing the price to $525 to cover an increase in fixed expenses of $80,000. Management believes they might lose 2% of sales per month. What should be the overall effect on the company's monthly operating income if this change is implemented?
Answer:
Increase in operating income $ 3,600
Explanation:
The impact on operating income will be done using incremental analysis.
Here we consider only the impact of the proposed change on the income
This is done as follows: $
Contribution before (4,000 × $(500- 320) = 720,000
Contribution after - (98%× 4,000)× (525-320) = 803,600
Increase in contribution 83600
Increase in Fixed expenses ( 80,000)
Increase in operating income 3,600
On January 1, Snipes Construction paid for earth-moving equipment by issuing a $320,000, 3-year note that specified 4% interest to be paid on December 31 of each year. The equipment’s retail cash price was unknown, but it was determined that a reasonable interest rate was 7%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
what amount should Snipes record the equipment and the note?
Answer:
$294,803.84
Explanation:
The computation of the equipment and the note is shown below:
Rate = 7% and the time = 3 years
Cash flow Table Value Amount Present Value
Par (Maturity) Value 0.81629 $320,000 $261,212.80
Interest (Annuity)
($320,000 × 4%) 2.6243 $12,800 $33,591.04
Price of equipment $294,803.84
The 0.81629 is
= 1 ÷ 1.07^3
And, the 2.6243 is the PVIFA factor
Final Answer:
Snipes Construction should record the equipment and the note at $294,720.
Explanation:
To determine the amount Snipes should record for the equipment and the note, we need to find the present value of the note payable using the appropriate interest factor from the tables provided. Since the note is a 3-year, 4% interest-bearing instrument, we use the PV of $1 table for a 3-year period and 4% interest rate. The present value factor for this combination is 0.786.
Present Value of Note Payable = $320,000 × 0.786 = $251,520
Next, we need to find the present value of the note's interest payments. Since the interest is paid annually, we use the PVAD of $1 table for a 3-year period and 7% interest rate, as the equipment's retail cash price is considered to have an implied interest rate of 7%. The present value annuity factor for this combination is 2.676.
Present Value of Interest Payments = $320,000 × 4% × 2.676 = $43,200
The total present value of the note and interest payments is $251,520 + $43,200 = $294,720. Therefore, Snipes Construction should record the equipment and the note at $294,720.
For the current year ending January 31, Ringo Company expects fixed costs of $178, 500 and a unit variable cost of $41.50. For the coming year, a new wage contract will increase the unit variable cost to $45. The selling price of $50 per unit is expected to remain the same. Compute the break-even sales (in units) for the current year. Compute the anticipated break-even sales (in units) for the coming year, assuming the new wage contract is signed.
Answer:
The break-even sales (in units u) for the current year is 210,000 units.
The anticipated break-even sales (in units t) for the coming year, assuming the new wage contract is signed is 357,000 units.
Explanation:
The BEP which is the break even point is the point where the company's sales or revenue generated is equal to the cost incurred. As such, the BEP is the number of units that must be sold for the company to make neither a profit nor a loss.
Both sales and variable cost are dependent on the number of units sold.
The sales less the variable cost gives the contribution margin. The contribution margin less the fixed cost gives the net operating income.
The break-even sales (in units u) for the current year
50u - 41.5u - 1785000 = 0
8.5u = 1785000
u = 1785000/8.5
= 210,000 units
The anticipated break-even sales (in units t) for the coming year, assuming the new wage contract is signed
50u - 45u - 1785000 = 0
5u = 1785000
u = 1785000/5
= 357,000 units
The manufacturing overhead budget at Foshay Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 7,200 direct labor-hours will be required in May. The variable overhead rate is $8.90 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $134,640 per month, which includes depreciation of $24,880. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for May should be:
Answer:
The predetermined overhead rate for May should be: $18.70 per direct labor hour
Explanation:
Predetermined Overhead rate is the rate that is used to allocate Overheads to Departments or Jobs.
Predetermined Overhead rate = Budgeted Overheads / Budgeted Activity
= $134,640/7,200
= $18.70 per direct labor hour
You buy one Home Depot June $60 call contract and one June $60 put contract. The call premium is $5 and the put premium is $3. At expiration, you break even if the stock price is equal to
Answer:
if price increases above $68 or decreases below $52, a profit is realized
Explanation:
At expiration, the break even if the stock price is equal to Call is :
-$60 + (-$5) + $3 = $68 (break even)
Put: -$3+ $60 + (-$5) = $52 (break even)
Therefore At expiration, your break even if the stock price is equal to:
if price increases above $68 or decreases below $52, a profit is realized.
For example, electricity costs are $1,300 per month plus $0.08 per car washed. The company expected to wash 8,400 cars in August and to collect an average of $6.40 per car washed. The company actually washed 8,500 cars in August.
Answer:
Explanation:
Revenue ($6.40 × 8,500) = $54,400
Cleaning supplies ($0.80 × 8,500) = $6,800
Electricity ($1,300 + ($0.15 × 8,500)) = $2,575
Maintenance ($0.20 × 8,500) = $1,700
Wages and salaries ($5,000 + ($0.30 × 8,500)) = $7,550
Administrative expenses ($4,000 + ($0.10 × 8,500)) = $4,850
Suppose that the market demand for 32-oz. wide mouth Nalgene bottles is Q = 50,000p^-1.076, where Q is the quantity of bottles per week and p is the price per bottle. The market supply is Q = 0.01p^7.208. What is the equilibrium price and quantity? What is the consumer surplus? What is the producer surplus?
Final answer:
To find the equilibrium price and quantity for Nalgene bottles, set the demand and supply functions equal and solve for the price, then plug that into either function. Consumer surplus is the difference between what consumers are willing to pay versus what they pay, while producer surplus is what producers get over their minimum acceptable price.
Explanation:
To find the equilibrium price and quantity for 32-oz. wide mouth Nalgene bottles, we need to set the market demand function Q = 50,000p^-1.076 equal to the market supply function Q = 0.01p^7.208 and solve for p. Once we find the equilibrium price, we substitute it back into either the demand or supply function to find the equilibrium quantity.
Consumer surplus is the difference between what consumers are willing to pay and what they actually pay, and producer surplus is the difference between the price at which producers are willing to sell and the price they actually receive.
To calculate consumer and producer surplus, we would need to determine the area above the supply curve and below the demand curve up to the equilibrium price. This involves integrating the demand function from zero to the equilibrium price for consumer surplus and integrating the supply function from zero to the equilibrium price for producer surplus.
Michelle's Monopoly Mutant Turtle (MMMT) has the exclusive right to sell Mutant t-shirts in the United States. The demand for these t-shirts is Qequals=StartFraction 22 comma 500 Over Upper P squared EndFraction 22,500 P2. The firm's short-run cost is SRTCequals=10761076plus+66Q, and its long-run cost is LRTCequals=77Q. What quantity should MMMT sell to maximize profit in the short run?
Complete Question:(in order)
Michelle's Monopoly Mutant Turtle (MMMT) has the exclusive right to sell Mutant t-shirts in the United States. The demand for these t-shirts is
[tex]Q = \frac{22,500}{P^2}[/tex]
The firm's short-run cost is
SRTC = 1641 + 4Q,
and its long-run cost is
RTC-7Q
What quantity should MMMT sell to maximize profit in the short run?
MMMT should sell 351.56 units. (Enter a numeric response rounded to two decimal places,)
What price should MMMT charge in the short run?
MMMT should charge a price of $ 7.95. Enter a numeric response rounded to two decimal places)
How much profit does it make?
Profit equals $-234.740. (Enter a numeric response rounded to three decimal
Would it be better off shutting down in the short run?
The firm would be better off producing in the short run.
What quantity should MMMT sell in the long run?
MMMT should sell 114.80 units. (Enter a numeric response rounded to two decimal placos)
What price should MMMT charge in the long run?
MMMT should charge a price of $ (Enter a numeric response rounded to two decimal places)
Answer:
From the given parameters
the demand for these t-shirts is
[tex]Q = \frac{22500}{P^2}[/tex]
The firms short run cost is SRTC = 1641 + 4Q
Long run cost is LRTC = 7Q
[tex]=> Q = \frac{22500}{P^2}=> P^2 = \frac{22500}{Q}\\=> P = \sqrt{\frac{22500}{Q}} = \frac{150}{\sqrt{Q}} = 150(Q)^{1/2}\\[/tex]
Thus revenue on the product of price and quantity becomes
[tex]PQ = 150Q^{-1/2}Q = 150Q{1-1/2} = 150Q^{1/2}[/tex]
Check the attached files for additional solution
Penland Corporation is authorized to issue both preferred and common stock. The par value of the preferred is $50. During the first year of operations, the company had the following events and transactions pertaining to its preferred stock.
Feb. 1 Issued 40,000 shares for cash at $51 per share.
July 1 Issued 60,000 shares for cash at $56 per share.
Instructions
(a) Journalize the transactions.
(b) Post to the stockholders' equity accounts. (Use T‐accounts.)
(c) Discuss the statement presentation of the accounts.
Answer and Explanation:
a. The journal entries are shown below:
Cash Dr $2,040,000 (40,000 shares × $51)
To Preferred stock $2,000,000 (40,000 shares × $50)
To Paid in capital in excess of par - Preferred stock $40,000
(Being the issuance of preferred stock is recorded)
Since the cash is increased so it would be debited along with it the stockholder equity is also increased so preferred stock is credited and the remaining balance is transferred to the paid in capital
Cash Dr $3,360,000 (60,000 shares × $56)
To Preferred stock $3,000,000 (60,000 shares × $50)
To Paid in capital in excess of par - Preferred stock $360,000
(Being the issuance of preferred stock is recorded)
Since the cash is increased so it would be debited along with it the stockholder equity is also increased so preferred stock is credited and the remaining balance is transferred to the paid in capital
b. The posting is as follows
Preferred Stock
Date Debit Date Credit
1-Feb $2,000,000
1-Jul $3,000,000
Paid in capital in excess of par - Preferred stock
Date Debit Date Credit
1-Feb $40,000
1-Jul $360,000
c. As we know that the stockholder equity comprises of common stock, preferred stock, retained earning, treasury stock, etc
So, the presentation of the accounts is
Preferred stock, $50 par value, 100000 outstanding and issued - $5,000,000
Paid in capital in excess of par - Preferred stock - $400,000
These amount are a sum of preferred stock and paid in capital in excess of par
Final answer:
Journal entries for Penland Corporation's preferred stock issuance record cash inflows and the value of the stock at par, along with additional paid-in capital representing the premium over the par value. T-accounts reflect these transactions in stockholders' equity. The preferred stock would be presented in the equity section of the balance sheet, showing both the par value and the premium.
Explanation:
The student's question relates to journalizing and posting the preferred stock transactions for Penland Corporation and discussing the statement presentation of the preferred stock accounts.
Journal Entries:
Feb. 1 - Cash $2,040,000Preferred Stock $2,000,000Paid-in Capital in Excess of Par, Preferred $40,000(To record issuance of 40,000 shares of preferred stock at $51)
July 1 - Cash $3,360,000
Preferred Stock $3,000,000Paid-in Capital in Excess of Par, Preferred $360,000(To record issuance of 60,000 shares of preferred stock at $56)
T-Accounts for Stockholders' Equity
Account - Credit
Preferred Stock $5,000,000
Paid-in Capital in Excess of Par, Preferred $400,000
The statement presentation of the preferred stock would show the par value times the number of shares issued, with an additional line item for the 'Paid-in Capital in Excess of Par' representing the premium over the par value paid by investors. The total stockholders' equity would include these amounts as part of the total equity.
Blowing Sand Company has just received a one-time offer to purchase 9,400 units of its Gusty model for a price of $30 each. The Gusty model normally sells for $38 and costs $34 to produce ($24 in variable costs and $10 of fixed overhead). Because the offer came during a slow production month, Blowing Sand has enough excess capacity to accept the order. 1. Should Blowing Sand accept the special order
Answer:
Net income from special order = $56,400
Blowing Sand Company should accept the order because it will increase net income by $56,400
Explanation:
In order to carry out an incremental analysis, only relevant cash flows should be considered.
The relevant cash flows from accepting the special order are the variable costs and the sales revenue.
Please, note that the fixed costs are not relevant for this decision. Simply because they would be incurred either way.
1. The sales revenue from the order- $30 × 9400 = $282,000
2. the variable cost of production $24 per unit × 9,400 = $225,600
The contribution from the special order would be determined as follows:
Contribution from special order = sales revenue - variable cost
= $282,000 - $225,600
= $56,400
Blowing Sand Company should accept the order
Clementine Company makes skateboards. They prepare master and flexible budgets and then perform variance analysis after the budget plan period elapses. Their data is as follows: Budget Actual Selling price per unit $109 $103 Variable cost per unit $59 $55 Quantity sold 948 935 What is the Clementine's flexible budget variance for VARIABLE COSTS? If the variance is unfavorable put a minus sign in front of your answer. Enter your answer without commas or decimals.
Answer:
$3,740 favorable
Explanation:
The computation of the flexible budget variance for VARIABLE COSTS is shown below:
= Standard variable cost - actual variable cost
where,
Standard variable cost is
= 935 units × $59
= $55,165
And, the actual cost is
= 935 units × $55
= $51,425
So the flexible budget variance for variable cost is
= $55,165 - $51,425
= $3,740 favorable
Since the standard cost is more than the actual cost which leads to favorable variance
The flexible budget variance for variable costs for Clementine Company, calculated by subtracting the actual variable cost from the budget and then multiplying it by the actual quantity sold, is $3,740. This is a favorable variance as actual costs were below budget.
Explanation:The flexible budget variance for variable costs refers to the difference between the budgeted variable cost and the actual variable cost during a specific period. According to the provided figures, we can calculate the variance by multiplying the difference in unit variable costs ($59 budgeted - $55 actual) by the actual quantity of units sold (935 units).
So, Flexible Budget Variance for Variable Costs = (Budgeted Variable Cost per Unit - Actual Variable Cost per Unit) × Actual Quantity Sold.
Applying values, we have Flexible Budget Variance for Variable Costs = ($59 - $55) × 935 = $3,740. Hence, the flexible variance for variable costs for Clementine Company is $3,740. As actual costs were less than budgeted, we don't need to put a minus sign in front of our answer. This is considered a favorable variance because the actual costs for the company were less than what was budgeted.
Learn more about Flexible Budget Variance here:https://brainly.com/question/36840009
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Consider a no-load mutual fund with $580 million in assets and 20 million shares at the start of the year and with $630 million in assets and 21 million shares at the end of the year. During the year investors have received income distributions of $6 per share and capital gain distributions of $0.50 per share. Assuming that the fund carries no debt, and that the total expense ratio is 2%, what is the rate of return on the fund
Answer: 25.86%
Explanation:
Solving this question requires that we use all gains made and divide it by the original Nat Asset Value.
Here goes,
Opening NAV
NAV = Total Assets / No. Of shares
NAV = 580/20
Opening NAV = $29
Closing NAV
NAV = Total Assets / No. Of shares
NAV = 630/21
Closing NAV = $30
Rate of Return.
Calculating the rate of return will be as follows,
= (Closing NAV - Opening NAV + Capital gains distributions + income distributions) / Opening NAV
= (30 - 29 + 6 + 0.5) / 29
= 0.25862068965
= 25.86%
The rate of return on the fund is 25.86%
Takelmer Industries has a different WACC for each of three types of projects. Lowminusrisk projects have a WACC of 8.00%, averageminusrisk projects a WACC of 10.00%, and highminusrisk projects a WACC of 12%. Which of the following projects do you recommend the firm accept?Project Level of Risk IRRA Low 9.50%B Average 8.50%C Average 7.50%D Low 9.50%E High 14.50%F High 17.50%G Average 11.50%
Answer:
A,D,E,F &G
Explanation:
IRR is the discount rate at which the Net Present value of a project becomes zero and over this rate the Net present value become negative. All the Projects with IRR Less than the relevant WACC will not be acceptable.
WACC
High = 12%
Average = 10%
Low = 8%
Compare all of the above WACC with each of the relevant WACC to find whether a project is acceptable or not.
Project Level of Risk IRR Relevant WACC Acceptable
A Low 9.50% 8% Yes
B Average 8.50% 10% No
C Average 7.50% 10% No
D Low 9.50% 8% Yes
E High 14.50% 12% Yes
F High 17.50% 12% Yes
G Average 11.50% 10% Yes
Suppose that a company needs 1,500,000 items during a year and that preparation for each production run costs $900. Suppose also that it costs $22 to produce each item and $3 per year to store an item. Use the inventory cost model to find the number of items in each production run so that the total costs of production and storage are minimized.
Answer:
30,000 units
Explanation:
According to the inventory cost model, the production run size that minimizes costs is given by:
[tex]P = \sqrt{\frac{2*D*S}{H}}[/tex]
Where D is the annual demand (1,500,000 items), S is the cost of each production run ($900) and H is the holding cost per unit ($3). Applying the given data:
[tex]P = \sqrt{\frac{2*1,500,000*900}{3}}\\P=30,000\ units[/tex]
Each production run should consist of 30,000 units.
You run a regression of a stock’s excess return on the market excess return and obtain the following results: E left square bracket R subscript i vertical line space R subscript M right square bracket space equals space 0.4 plus 0.7 asterisk times R subscript M With an R-square of 0.12. The alpha of the stock is
Answer:
7%
Explanation:
Data provided as per the question
Risk free rate = 0.4
Beta = 0.7
The computation of alpha of the stock is shown below:-
Expected return = Risk free rate + (Beta × Market rate of return)
Expected return = 0.4 + (0.7 × Market rate of return)
= 0.7
or 7%
Therefore for computing the alpha of the stock, we have applied the above formula.
Final answer:
In the regression equation for a stock's excess return, the alpha or the y-intercept is 0.4, signifying the stock's expected excess return when market excess return is zero. The R-square of 0.12 tells us that 12 percent of the stock's return variation is explained by the market's return variation.
Explanation:
The alpha of a stock, in a regression of the stock's excess return on the market excess return, represents the intercept of the regression equation. Given the regression equation E[Ri | RM] = 0.4 + 0.7*RM, the alpha of the stock is 0.4. This value indicates the expected excess return of the stock when the market excess return is zero. The value of alpha can provide insight into the stock's performance independent of the market's movements.
The R-square value of 0.12 or 12 percent indicates that only this percentage of the stock's excess return variation is explained by the market's excess return variation. Thus, the majority, that is, 88 percent (1 - R-square), of the variation in the stock's excess return is not explained by the market's excess return within this model.