Answer:
Common stock outstanding is 558,100
Stated value of common stock is $4.00 per share
Par value of preferred stock is $105 per share
Dividend rate on preferred stock is 6%
The arrears of $73,800 would not impact the retained earnings,they are to be declared before the impact is felt in retained earnings.
Explanation:
Common stock outstanding =issued common stock -treasury stock
=565,000-6,900
==558,100
Stated value of common stock=value of shares issued/shares issued
=$2,260,000/565,000
=$4.00 per share
Par value of preferred stock=value of shares issued/shares issued
=$787,500/7500
=$105 per share
preferred dividends=Preferred share capital *Dividend rate on preferred stock
preferred dividends is $47,250
preferred share capital is $787,500
dividend rate on preferred stock is unknown
$47,250=$787,500*Dividend rate on preferred stock
Dividend rate on preferred stock=$47,250/$787,500
=6%
The arrears of $73,800 would not impact the retained earnings,they are to be declared before the impact is felt in retained earnings.
The answers to all the parts of the question are as follows:
a) Common stock outstanding is 558,100
b) Stated value of the common stock is $4 per share
c) Par value of the preferred stock is $105 per share
d) Dividend rate is 6%
e) The arrear of $73,800 will not affect the balance of retained earnings recorded under the balance sheet.
Computations:
a) The shares of common stock outstanding are:
[tex]\begin{aligned}\text{Outstanding Common stock}&=\text{Common stock issued}-\text{Treasury stock}\\&=565,000-6,900\\&=558,100 \end{aligned}[/tex]
b) Stated value of the common stock:
[tex]\begin{aligned}\text{Stated Value of common stock}&=\frac{\text{Total value of shares issued}}{\text{Common stock issued}}\\&=\frac{\$2,260,000}{565,000}\\&=\$4\;\text{per share} \end{aligned}[/tex]
c) Par value of the preferred stock:
[tex]\begin{aligned}\text{Par value of preferred stock}&=\frac{\text{Total value of shares issued}}{\text{Preferred Shares issued}}\\&=\frac{\$7,87,500}{7,500}\\&=\$105\;\text{per share} \end{aligned}[/tex]
d) Annual dividend rate on preferred stock:
[tex]\begin{aligned}\text{Dividend rate on preferred stock}&=\frac{\text{Preferred dividend}}{\text{Preferred share capital}}\\&=\frac{\$47,250}{\$787,500}\times100\\&=6\% \end{aligned}[/tex]
e) Any amount of preferred dividend whose amount is under arrears then will not affect the balances reported for the retained earnings, this is because the amount of arrear of dividend is already under the note with the balance sheet.
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Convertible Preferred Stock, Convertible Bonds, and EPSFrancis Company has 24,000 shares of common stock outstanding at the beginning of 2016. Francis issued 3,000 additional shares on May 1 and 2,000 additional shares on September 30. It also has two convertible securities outstanding at the end of 2016. These are:Convertible preferred stock: 2,500 shares of 8.5%, $50 par, preferred stock were issued on January 2, 2013, for $60 per share. Each share of preferred stock is convertible into 3 shares of common stock. Current dividends have been declared and paid. To date, no preferred stock has been converted.Convertible bonds: Bonds with a face value of $250,000 and an interest rate of 5.5% were issued at par in 2015. Each $1,000 bond is convertible into 20 shares of common stock. To date, no bonds have been converted.Francis earned net income of $72,500 during 2016. The income tax rate is 30%.Required:1. Compute the number of shares of common stock that Francis should use in calculating basic earnings per share for 2016.Weighted average shares outstanding: shares2. Calculate basic earnings per share for 2016. If required, round your answer to two decimal places.Basic earnings per share: $3. Calculate diluted earnings per share for 2016 and the incremental EPS of the preferred stock and convertible bonds. If required, round your answers to two decimal places.Diluted earnings per share: $Incremental earnings per shareBonds:$Preferred:$4a. Assume the same facts as above except that net income included a loss from discontinued operations of $18,000 net of income taxes. Compute basic EPS. You do not have to calculate diluted EPS for this case. If required, round your answer to two decimal places.Basic earning per share: $4b. Show how the basic EPS you calculated should be reported to shareholders. You do not have to calculate diluted EPS.Francis CompanyEPS ComputationsEPS Based on:Income from continuing operations$Loss from discontinued operations$Net income$
Answer:
1. weighted average number of outstanding common share
As at Jan 24,000
New issues :
May 1 3000*8/12 2000
Sep 30 2000*3/12 500
26,500
2. Basic Earnings per share for 2016 = Net income - Preferred dividend / weighted average number of outstanding shares
= ($72,500 - 10,625)/26,500
= $2.33
Preferred stock dividend = 8.5%*2,500 *$50 = $10,625
3. Diluted Earning per share for 2016 =( Net income + after tax income saved )/ weighted average number of outstanding common stock
Dilluted EPS = $82,125/39000 = $2.11
Incremental EPS :
Bond = $9,625/5000 = $1.93
Preferred stock = $10,625/7500 = $1.42
Workings
Earnings
Net Income = $72,500
After tax saved income:
Bond(100-30%)*250,000*5.5% = 9,625
82,125
Number of common stock from conversion
Preferred stock = 2500*3 = 7,500
Bond = ($250,000/$1,000)* 20 = 5,000
weighted average number of share outstanding = 26,500+ 7500+5000
= 39,000
4a. Basi Eraning per share = ( $72,500 + 18,000)/ 26,500
= $3.42
b. Basic EPS based on
Income form continuing operation = $90,500/26,500 = $3.42
Loss from discointinued operation = -$18,000/26,500 = -$0.68
Net Income = $72,500/26500 = $2.74
=
Explanation:
The number of shares of common stock that should be used in calculating basic earnings per share (EPS) for 2016 is 26,500. The basic EPS for 2016 is $2.74, while the diluted EPS, considering convertible preferred stocks and bonds, is $1.92 per share.
Explanation:To answer this question, let's first calculate the weighted average number of outstanding common stocks for 2016. The company began the year with 24,000 shares, then issued 3,000 more on May 1 (that's 8 months of contribution) and another 2,000 on September 30 (3 months of contribution).
The weighted average is therefore: 24,000 + (3,000 * 8/12) + (2,000 * 3/12) = 26,500 shares
Next, we calculate the basic EPS by dividing the net income by the average shares calculated above. The basic EPS is: $72,500 / 26,500 shares = $2.74 per share.
For diluted EPS, both the convertible preferred stocks and the convertible bonds need to be considered. So the potential additional shares are: (2,500 shares * 3) + (250,000 / $1,000 * 20) = 12,500. Therefore, the total shares including dilution would be 26,500 + 12,500 = 39,000 shares.
To calculate diluted EPS, we need to adjust net income by adding back after-tax interest expense on the convertible bonds. The total income will be $72,500 + (250,000 * 5.5% * (1-30%)) = $74,875. Now, the diluted EPS is $74,875 / 39,000 shares = $1.92 per share.
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Thomas brothers is expected to pay a$1.00 per share dividend at the end of the year. Dividend growth rate : 9% a year. The required rate of return on the stock is 17%. What is the stock’s current value per share?
Answer:
The correct answer is $12.5.
Explanation:
According to the scenario, the computation of the given data are as follows:
Dividend = $1
Growth rate = 9%
Rate of return = 17%
So, we can calculate the current value of stock by using following formula:
Current value of stock = Dividend ÷ ( Rate of return - Growth rate )
By putting the value, we get
Current value = $1 ÷ ( 17% - 9%)
= $1 ÷ 0.08
= $12.5
Kegler Bowling buys scorekeeping equipment with an invoice cost of $190,000. The electrical work required for the installation costs $20,000. Additional costs are $4,000 for delivery and $13,700 for sales tax. During the installation, the equipment was damaged and the cost of repair was $1,850.
What is the total recorded cost of the automatic scorekeeping equipment?
The total recorded cost of the equipment is $229,550.
Explanation:To calculate the total recorded cost of the automatic scorekeeping equipment, we need to add up the invoice cost, electrical work cost, delivery cost, sales tax, and repair cost. The invoice cost is $190,000, the electrical work cost is $20,000, the delivery cost is $4,000, the sales tax is $13,700, and the repair cost is $1,850. Adding all these costs together, the total recorded cost of the automatic scorekeeping equipment is $229,550.
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The total recorded cost of Kegler Bowling's automatic scorekeeping equipment is $229,550. This includes the invoice cost, the cost of electrical work for installation, delivery charges, sales tax, and repair costs which were incurred during the installation.
Explanation:In accounting, the total recorded cost of an asset includes its purchase price and all other costs related to bringing it to its usable condition and location. In the case of the Kegler Bowling's automatic scorekeeping equipment, the total recorded cost would include the invoice cost of $190,000, the electrical work for installation $20,000, the delivery charges of $4,000, the sales tax of $13,700, and the repair costs of $1,850. All these are summed to give:
$190,000 + $20,000 + $4,000 + $13,700 + $1,850 = $229,550
Therefore, the total recorded cost of the automatic scorekeeping equipment is $229,550.
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Refer to the table below and calculate both the real and nominal rates of return on the TIPS bond in the second and third years. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Principal and Interest Payments for a Treasury Inflation Protected
Security
Time Inflation in Year Just Ended Par Value Coupon Payment + Principal Repayment = Total Payment
0 $1,000.00
1 3% $1,030.00 $51.50 0 $51.50
2 3% $1,060.90 $53.05 0 $53.05
3 1% $1,071.51 $53.58 $1,071.51 $1,125.08
Answer:
Second year :
Nominal rate = 8.15%
Real rate = 5%
Third year :
Nominal rate = 6.00%
Real rate = 4.95%
Explanation:
Nominal return =(Interest + price change) / initial price
Real rate of return = (1 + nominal rate) / (1 + inflation) - 1
Second year:
Nominal return = [53.05 + (1060.90 - 1030)]÷ 1030
(53.05 + 30.90) ÷ 1030 = 0.0815 = 8.15%
Real rate
[(1 + 0.0815) ÷ (1 + 0.03)] - 1
(1.0815 ÷ 1.03) - 1 = 0.05 = 5%
THIRD YEAR:
Nominal return = [53.58 + (1071.51 - 1060.90)]÷ 1060.90
(53.05 + 10.61) ÷ 1060.90 = 0.060 = 6.00%
Real rate
[(1 + 0.060) ÷ (1 + 0.01)] - 1
(1.060 ÷ 1.01) - 1 = 0.0495 = 4.95%
To calculate the real and nominal rates of return on the TIPS bond in the second and third years, divide the total payment in a particular year by the total payment in the previous year and subtract 1, then multiply by 100. The real rate of return is calculated by subtracting the inflation rate from the nominal rate of return.
Explanation:To calculate the real and nominal rates of return on the TIPS bond in the second and third years, we need to know the formula for the rates of return. The nominal rate of return can be calculated by dividing the total payment in a particular year by the total payment in the previous year, subtracting 1, and multiplying by 100. The real rate of return can be calculated by subtracting the inflation rate from the nominal rate of return.
For the second year, the total payment is $53.05 and the total payment in the previous year is $51.50, so the nominal rate of return is (($53.05 / $51.50) - 1) * 100 = 2.99%. Since the inflation rate is 3% for the second year, the real rate of return is 2.99% - 3% = -0.01%
For the third year, the total payment is $1,125.08 and the total payment in the previous year is $53.05, so the nominal rate of return is (($1,125.08 / $53.05) - 1) * 100 = 2,017.42%. Since the inflation rate is 1% for the third year, the real rate of return is 2,017.42% - 1% = 2,016.42%.
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Teena, Isaiahand Bart form a general partnership to sell automobiles Teenawho is responsible for ordering inventory large sport utility vehicles (SUV) great quantities of gasoline. A war breaks out in the Middle East that interrupts the supply of to the United States The for large SUV drops , and cannot inventory Which of following statements is true?
c ) Teena is not liable because the duty of care was not breached.
Explanation:
Even Teena is responsible for ordering inventory for large sport utility vehicles which uses great quantities of gasoline. The war in the Middle East happens unexpectedly and that war interrupts the supply of gasoline (oil) to the United States.,this is the main reason for decreasing the demand of large sport utility vehicles.,
Middle east region is the main and largest suppliers of oil in the world ., Here The War is the main reason for the shortage of oil and creates problem to get inventory like gasoline to united states.,Prediction of sudden wars is not a possible one. So in this case Teena is not liable because the duty of care was not breached.
Jesse and Tim form a partnership by combining the assets of their separate businesses. Jesse contributes accounts receivable with a face amount of $48,000 and equipment with a cost of $177,000 and accumulated depreciation of $104,000. The partners agree that the equipment is to be valued at $68,500, that $3,600 of the accounts receivable are completely worthless and are not to be accepted by the partnership, and that $2,500 is a reasonable allowance for the uncollectibility of the remaining accounts receivable. Tim contributes cash of $22,000 and merchandise inventory of $44,500. The partners agree that the merchandise inventory is to be valued at $48,000.
Required:
Journalize the entries to record in the partnership accounts (a) Jesse’s investment and (b) Tim’s investment. Refer to the Chart of Accounts for exact wording of account titles.
Answer:
Check the explanation
Explanation:
Journal Entries to be recorded in the books of Partnership accounts
a)Jesse's Investment
Account Name Debit($) Credit($)
Accounts Receivable(48,000-3600) 44300
Equipment(Agreed Price) 68,500
Allowance for Doubtful Debts 2500
Jesse,Capital A/c(Balancing Figure) 110300
b.Tim's Investment
Account Name Debit($) Credit($)
Cash 22000
Inventory(At Agreed price) 48000
Tim Capital 70,000
Cascade, Ltd., a merchandising firm, is preparing its cash budget for March. The following information is available concerning its inventories: Inventories at beginning of March $ 368,750 Estimated purchases for March 1,444,000 Estimated cost of goods sold for March 1,478,000 Estimated payments in March for purchases in February 363,000 Estimated payments in March for purchases prior to February 67,000 Estimated payments in March for purchases in March 70 % Required: What are the estimated cash disbursements in March?
Answer:
$1,440,800
Explanation:
The estimated cash disbursement for march is made up of estimated payment for February purchase to be settled in march, Estimated payments in March for purchases prior to February and 70% purchases in March.
The estimated cash disbursements in March
= $363,000 + $67,000 + (70% * $1,444,000)
= $1,440,800
Crane, Inc., has a bond issue maturing in seven years that is paying a coupon rate of 9.5 percent (semiannual payments). Management wants to retire a portion of the issue by buying the securities in the open market. If it can refinance at 8.0 percent, how much will Crane pay to buy back its current outstanding bonds? (Round answer to 2 decimal places, e.g. 15.25.) Crane will pa
Answer:
$1,079.22
Explanation:
The price of a bond is the present value (PV) of the future cash inflows expected from the bond discounted using the yield to maturity.
These cash flows include interest payment and redemption value
The price of the bond can be calculated as follows:
Step 1
PV of interest payment
Semi-annual coupon rate = 9.5%/2 = 4.75%
Semi-annual Interest payment =( 4.75%×$1000)= $47.5
Semi annual yield = 8%/2 = 4%
PV of interest payment
= A ×(1- (1+r)^(-n))/r
A- interest payment, r- yield - 4%, n- no of periods- 2 × 7 = 14 periods
= 47.5× (1-(1.04)^(-7×2))/0.04)
= 501.748
Step 2
PV of redemption value (RV)
PV = RV × (1+r)^(-n)
RV - redemption value- $1000, n- 7, r- 4.5%
= 1,000 × (1+0.04)^(-2×7)
= 577.475
Step 3
Price of bond = PV of interest payment + PV of RV
$ 501.7483391 + 577.4750828
=$1,079.22
Crane will pay =$1,079.22
Millennium, Inc, a leading producer of environmentally friendly cleaning agents is looking for a site for a new production facility. The company is mainly focusing on sites that are close to major highways and rail hubs and are not too far from some major population centers. This suggests that an important location consideration for Millennium is:________
a. quality of life.
b. access to cheap land.
c. reducing time to market.
d. access to low cost labor.
Answer:
c. reducing time to market
Explanation:
While deciding upon production facility, an enterprise has to take into consideration the following factors:
Infrastructure: This refers to location of the site with regard to transportation, utilities and the associated costs. This means the location should be such that, the transportation of inputs and products should be convenient i.e well connected by roads and railways.Access to supply chain and customers: The production facility should be easily accessible to suppliers for transport of inputs.Availability of labor : Labor is a factor of production and thus the location of production facility should be near to place where the laborers are available.In the given case, the company deals in environmental friendly cleaning agents and is looking for the ideal site for it's production process. It is essential that the production facility be well connected with the market for inputs required for production.
Hence it is evident that the important location consideration for the company is reducing the time to market since rail hubs and highways connectivity reduces such time and transportation cost as well.
A bond has a par value of $1,000, a time to maturity of 20 years, a coupon rate of 10% with interest paid annually, a current price of $850, and a yield to maturity of 12%. Intuitively and without using calculations, if interest payments are reinvested at 10%, the realized compound yield on this bond must be
Answer:
The answer is:
Lower than 12%
Explanation:
The realized compound yield on this bond must lower than the initial yield of 12%
This lead to what will call reinvestment risk. Reinvestment risk is more likely when interest rates are declining(going down).
When interest rate declines, an investor loses money because the real value of the money or fund will be reduced. And reinvesting the money that was initially at 12 percent interest rate will be lower.
Final answer:
The realized compound yield on a bond, with reinvestment of interest at the coupon rate, will be between the coupon rate and the yield to maturity. Without precise calculations, it's not possible to give an exact number, but the yield will be closer to the coupon rate if the reinvestment rate matches the coupon rate.
Explanation:
The question at hand deals with the concept of bond pricing, yield to maturity (YTM), and investment returns. In the given scenario, a bond with a par value of $1,000, a coupon rate of 10%, and a current price of $850 is considered. Intuitively, if the interest payments are reinvested at the same rate as the coupon rate (which is 10%), the realized compound yield should be closer to the coupon rate than the YTM, since the reinvestment rate is not as high as the YTM (which is 12%).
However, because the YTM is higher than the reinvestment rate, the actual realized compound yield would be somewhere between the coupon and the YTM, but we can't provide a precise value without additional calculations. When it comes to the bonds market value, if the market interest rate is higher than the coupon rate, the bond's price will be below par value as investors would demand a higher return, making the current bond less attractive unless it is sold at a discount.
Extreme Manufacturing Company provides the following ABC costing information: Activities Total Costs Activityminuscost drivers Account inquiry $750,000 15,000 hours Account billing $250,000 5,000,000 lines Account verification accounts $173,250 70,000 accounts Correspondence letters $42,000 7,000 letters Total costs $1,215,250 The above activities are used by Departments A and B as follows: Department A Department B Account inquiry hours 2,000 hours 3,500 hours Account billing lines 900,000 lines 750,000 lines Account verification accounts 9,000 accounts 7,000 accounts Correspondence letters 1,200 letters 1,600 letters How much of the total costs will be assigned to Department B?
Answer:
$239,425
Explanation:
In activity based costing, cost is assigned to each department based on the activity cost contributed by the department to the company's cost pool.
Given
Activities Total Costs Activityminuscost drivers
Account inquiry $750,000 15,000 hours
Account billing $250,000 5,000,000 lines
Account verification accounts $173,250 70,000accounts
Correspondence letters $42,000 7,000 letters
Total costs $1,215,250
The above activities are used by Departments A and B as follows: Department A B
Account inquiry hours 2,000 hours 3,500 hours
Account billing lines 900,000 lines 750,000 lines
Account verification accounts 9,000 accounts 7,000 accounts Correspondence letters 1,200 letters 1,600 letters
total costs will be assigned to Department B
= 3500/15000 * $750,000 + 750000/5000000 * $250,000 + 7000/70000 * $173250 + 1600/7000 * $42,000
= $175,000 + $37,500 + $17,325 + $9,600
= $239,425
Final answer:
To determine the total costs assigned to Department B, the cost per activity is computed and multiplied by the respective activity usage for Department B, resulting in a total cost of $239,425.
Explanation:
To calculate how much of the total costs will be assigned to Department B using activity-based costing (ABC), we need to compute the cost per activity and then multiply it by the activity usage for Department B. The cost per activity for each cost pool is determined by dividing the total costs by the total activity drivers. Using the provided information:
Account inquiry cost per hour: $750,000 / 15,000 hours = $50 per hour
Account billing cost per line: $250,000 / 5,000,000 lines = $0.05 per line
Account verification cost per account: $173,250 / 70,000 accounts = $2.475 per account
Correspondence cost per letter: $42,000 / 7,000 letters = $6 per letter
Now, we can sum up the total costs for Department B:
Account inquiry costs for Department B: 3,500 hours imes $50 per hour = $175,000
Account billing costs for Department B: 750,000 lines imes $0.05 per line = $37,500
Account verification costs for Department B: 7,000 accounts imes $2.475 per account = $17,325
Correspondence costs for Department B: 1,600 letters imes $6 per letter = $9,600
The total cost assigned to Department B would be the sum of the above costs: $175,000 + $37,500 + $17,325 + $9,600 = $239,425.
Joe's Taco Hut can purchase a delivery truck for $20,000 and he estimates it will generate a net income (after taxes, maintenance and operating costs) of $4,000 per year. His other option is to go to work for someone else earning net income of $3,000 per year. He should:
a) purchase the truck if the real interest rate is less than 15%.
b) not purchase the truck if the real interest rate is greater than 1%.
c) purchase the truck if the real interest rate is greater than 5%.
d) purchase the truck if the real interest rate is less than 5%.
Answer:
The correct answer is option (d).
Explanation:
According to the scenario, the given data are as follows:
Truck cost = $20,000
Net income from truck = $4,000
If work somewhere else, Net income = $3,000
If he work some where else he save $20,000.
If the interest rate is 5%, then,
Interest amount = 5% × $20,000 = $1,000
So, it means, if the interest rate is 5%, and he work some where else than his net income = $3,000 + $1,000 = $4,000.
So, If the real interest is less than 5% only than purchasing a truck is the right option.
Hence, purchase the truck if the real interest rate is less than 5% is correct.
Based on the information given, Joe should D. purchase the truck if the real interest rate is less than 5%.
When the interest rate is 5%, the interest amount will be:
= 5% × $20000
= 0.05 × $20000
= $1000
His net income after paying interest will be:
= $4000 - $1000 = $3000
When working for someone else, he'll earn a net income of $3,000 per year.
Therefore, it's better if he purchases the truck if the real interest rate is less than 5%.
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Animer Inc. provides the following information.
Corporate advertising costs = $825,000
Division A-
$4,900,000
Division B-
$7,800,000
Assume that customers with higher revenues benefited more from corporate advertising costs than customers with lower revenues. What is the allocated corporate costs for Division B?
A.
$518,269
B.
$53,593
C.
$318,307
D.
$ 506,693
Answer:
D . $506, 693.
Explanation:
The proper cost apportioning method to be used is ratio. ratio is an expression of two or more items in mathematical term expressing the proportional relationship between them
Corporate advertising cost - $825,000
Division A sales revenue -$4,900,000
Division B sales revenue - $ 7,800,000
Total revenue $12,700,000
Division Being the higher revenue earner = 7,800,000/12,700,000*825,000
= $506,693
Cash flows from operations may not be sufficient for a firm to keep up with growth-related financing needs, or the firm may not be able to always generate enough cash flow to maintain a surplus of cash. Firms prefer to borrow now to fulfill their capital requirements through means of short-term financing or long-term financing. Both methods have their advantages and disadvantages.
The following statement identifies a possible characteristic of short-term financing.
Consider this case:
Short-term loans usually have a lower cost than long-term loans.
Identify whether the preceding statement is true or false.
a. This statement is true and an advantage of short-term financing.
b. This statement is false and a disadvantage of short-term financing.
Answer:
a.true
b.false
Explanation:
The advantage of short-term financing is better seen when a capital project is financed by a non- current liability.Where the period of Investment is longer than the period the financial charge is applied to the firm
Raw materials inventory, beginning$1,200 Raw materials inventory, ending1,400 Work in process inventory, beginning7,100 Work in process inventory, ending6,800 Raw materials acquired27,800 Cost of direct materials used in production27,600 Sales commissions to sell clackers2,100 Direct labor cost20,000 Total manufacturing overhead28,900 How much is cost of goods manufactured for June
Answer:
76,800
Explanation:
Given that,
Raw materials inventory, beginning = $1,200
Raw materials inventory, ending = 1,400
Work in process inventory, beginning = 7,100
Work in process inventory, ending = 6,800
Raw materials acquired = 27,800
Cost of direct materials used in production = 27,600
Sales commissions to sell clackers = 2,100
Direct labor cost = 20,000
Total manufacturing overhead = 28,900
Cost of goods manufactured is determined the overall value of goods produced during a particular year and it is ready for sale. It includes all of the expenses that are incurred to convert the inventory in process into finished goods.
Cost of goods manufactured in June:
= Cost of direct material used in production + Direct Labor cost + Manufacturing Overhead + (Beginning work in process - Ending work in process Ending)
= 27,600 + 20,000 + 28,900 + (7,100 - 6,800)
= 76,800
Milano Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.50 direct labor-hours. The direct labor rate is $9.80 per direct labor-hour. The production budget calls for producing 6,400 units in October and 6,300 units in November. If the direct labor work force is fully adjusted to the total direct labor-hours needed each month, what would be the total combined direct labor cost for the two months
Answer:
$62,230
Explanation:
The computation of the total combined direct labor cost for the two months is presented below:
Particulars October November
A. Budgeted units to be produced 6,400 units 6,300 units
B. Direct labor hour per unit 0.50 0.50
C. Direct labor rate per hour $9.80 $9.80
D. Direct labor cost for the month (A × B × C)
$31,360 $30,870
Therefore the total combined direct labor cost is
= $31,360 + $30,870
= $62,230
We simply multiplied the number of units produced with the direct labor per unit and the direct labor rate per hour so that the direct labor cost could arrive
consider an M/M/1 queue where customers arrive at rate 1/hour and the rate of service is 2/hour. At the exit each customer will receive 3 2 i dollars, where i is the number of people that the customer leaves behind in the system (i.e., number of people that are in the system upon departure). Find the long-term expected amount of money that a customer receives.
Answer:
Check the explanation
Explanation:
in solving the question above, we need to first calculate:
∡= 1/hour
∡= 2/hour
Server Utilization(\rho) = 1/2= 0.5
Average Number of people in the system
L= ∡/π-∡
= 1/2-1= 1 person in the system in an hour
Expected money in an hour the customer gets = 32* Number of customers in the system = 32*1= 32
Multiple Choice Question 64 Concord Company had the following department information about physical units and percentage of completion: Physical Units Work in process, May 1 (65%) 60800 Completed and transferred out 181000 Work in process, May 31 (35%) 50000 If all materials are added at the beginning of the production process, what is the total number of equivalent units for materials during May
Answer:
Total Equivalent Units Materials= 231,000
Total Equivalent Units Conversion Costs= 198500
Explanation:
Concord Company
Given
Physical Units
Work in process, May 1 (65%) 60800
Completed and transferred out 181000
Work in process, May 31 (35%) 50000
All materials are added at the beginning of the production process.
Particulars Units % of Completion Equivalent Units
Mat. Conversion Costs Mat. Conversion Costs
W. I. P, May 31 50,000 100 (35%) 50,000 17500
Completed and
transferred out 181000 100 100 181000 181000
Total Equivalent Units 231,000 198500
The equivalent units are calculated by either adding the beginning work in process and units started or by adding Ending Wip and completed and transferred units.
In a macroeconomic context, choose the best definition for the term velocity. The rate at which the aggregate price level increases. The rate at which money circulates through an economy. The speed of capital accumulation. The rate at which GDP increases in a year. The rate at which the Federal Reserve increases or decreases the money supply.
Answer:
The rate at which money circulates through an economy.
Explanation:
In Macroeconomics, the term velocity refers to the speed at which money circulates in an economy, and it is a variable in a fundamental macroeconomic equation, the quantity theory of money equation:
M x V = P x T
Which states that the price of goods and services is equal to the amount of money in an economy, or its money supply (M) multiplied by the Velocity of circulation of money, which is in turn equal to price (P) multiplied by the number of transactions (T).
Soar Incorporated is considering eliminating its mountain bike division, which reported an operating loss for the recent year of $5,000. The division sales for the year were $1,052,000 and the variable costs were $862,000. The fixed costs of the division were $195,000. If the mountain bike division is dropped, 30% of the fixed costs allocated to that division could be eliminated. The impact on operating income for eliminating this business segment would be:
Eliminating the mountain bike division will result in a loss of sales revenue, but also savings on variable and some fixed costs. The net impact is a further decrease in operating income by $131,500, making it less advantageous to eliminate the division.
Explanation:To determine the impact on operating income for Soar Incorporated when considering the elimination of its mountain bike division, we need to evaluate the cost savings against the revenue that the division currently generates. The operating loss of the mountain bike division is $5,000, with sales of $1,052,000 and variable costs of $862,000. The fixed costs are $195,000, of which 30% can be eliminated if the division is dropped. Therefore, the savings in fixed costs are 0.30 x $195,000 = $58,500. If the mountain bike division is eliminated, the company would no longer incur its variable costs nor its segment of fixed costs, but it would also lose the division's sales revenue.
The calculation of the operating income impact would be as follows:
Lost revenue from division elimination: $1,052,000Saved variable costs: $862,000Saved fixed costs (30% of $195,000): $58,500The net impact on operating income is thus: $862,000 (saved variable costs) + $58,500 (saved fixed costs) - $1,052,000 (lost revenue) = - $131,500. This implies that eliminating the mountain bike division would decrease operating income by $131,500 compared to the current loss of $5,000, therefore eliminating the division will not be advantageous based on these financials alone.
Al owned all of the outstanding stock of ABC Corporation. Al transferred a building, cash, and IBM stock to ABC Corporation. The adjusted basis and the fair market value of the assets transferred to ABC Corporation, and the amount remaining on the mortgage on the building transferred, were as follows. A building was transferred by Al to ABC Corporation that had an adjusted basis to Al of $20,000, a fair market value of $50,000, and a mortgage of $40,000, that was assumed by the corporation, cash in the amount of $10,000 was transferred, and IBM stock with an adjusted basis to Al of $15,000 and a fair market value of $12,000. In exchange for the assets transferred to ABC Corporation, Al received additional stock of ABC Corporation. How much gain did Al recognize as a result of this transaction
Answer: $10,000
Explanation:
I know this question looks like a lot but it isn't. It is simply asking how much gain was made in the cash that was exchanged.
Now we see that the company acquired the building for $50,000 but acquired the mortgage on it of $40,000 and hence paid off the balance of $10,000 to Al.
So the gain was,
Cash in the amount transferred = (fair market value - mortgage)
= $50,000) - $40,000
= $10,000
$10,000 is the gain that Al should recognize as a result of this transaction.
The law firm of Barnes & Cohen purchased a new $17,600 copier. Copying costs will be shared by the purchasing, accounting, and information technology departments since those are the only departments that will have access to the machine. The company has decided to allocate the copying cost based on the number of copies made by each department. The sales person who sold the copier to the attorneys expects it will generate 1,000,000 copies. The manager of each department has estimated the number of copies that his or her department will make over the life of the copier:
Department CopiesPurchasing 150,000Accounting 450,000Information Technology 200,000How much overhead will be allocated each time a copy is made by the accounting department?A) 2.2 centsB) 3.9 centsC) 1.76 centsD) None of the above
Answer:
A. 2.2 cents
Explanation:
The computation of cost per copy for accounting department is shown below:-
Total copies = Purchase + Accounting + Information technology
= $150,000 + $450,000 + $200,000
= $800,000
Cost for accounting department = Accounting ÷ Total copies × New copier
= $450,000 ÷ $800,000 × $17,600
= $9,900
Now, Cost per copy = Cost for accounting department ÷ Accounting
= $9,900 ÷ $450,000
= 2.2 cents
Final answer:
The overhead allocated each time a copy is made by the accounting department of Barnes & Cohen's new copier is 1.76 cents, calculated based on the total cost of the copier and the total expected number of copies it will produce.
Explanation:
To calculate the overhead allocation for each copy made by the accounting department, we need to first understand the total cost of the copier and the total expected number of copies. The copier costs $17,600 and is expected to generate 1,000,000 copies over its lifespan. The overhead cost per copy can be calculated as the total cost divided by the total expected copies, which is $17,600 / 1,000,000 = $0.0176 or 1.76 cents per copy. Since the accounting department's copies are part of the total copies, the overhead allocated each time a copy is made by the accounting department is also 1.76 cents, matching option C).
Abbott Landscaping purchased a tractor at a cost of $35,000 and sold it three years later for $17,500. Abbott recorded depreciation using the straight-line method, a five-year service life, and a $2,000 residual value. Tractors are included in the Equipment account. 2. Assume the tractor was sold for $10,900 instead of $17,500. Record the sale
Answer:
Cash Dr $10,900
Accumulated depreciation $19,800
Loss on sale of equipment $4,300
To Equipment $35,000
(Being the sale is recorded)
Explanation:
The journal entry is shown below:
Cash Dr $10,900
Accumulated depreciation $19,800
Loss on sale of equipment $4,300
To Equipment $35,000
(Being the sale is recorded)
The computation is shown below:
= ($35,000 - $2,000) ÷ 5 years × 3 years
= $19,800
Since the sale is made so we debited the cash for $10,900 and along with it the accumulated depreciation is also debited plus the purchase value of equipment is credited and the balancing figure is transferred to the loss on sale of equipment
Laserspot is involved in producing and selling high-end golf equipment. The company has recently been involved in developing various types of laser guns to measure yardages on the golf course. One small laser gun, called Little Laser, appears to have a very large potential market. Because of competition, Laserspot does not believe that it can charge more than $80 for Little Laser. At this price, Laserspot believes it can sell 100,000 of these laser guns. LittleLaser will require an investment of $7,500,000 to manufacture, and the company wants an ROI of 16%. Determine the target cost for one LittleLaser.
Answer: $68
Explanation:
We will answer this question in steps yeah.
Okay.
LittleLaser requires a return on investment of 16% right.
The Investment is $7.5 million.
Then let's find out what 16% of that is.
= 16% * $7.5 million
= $1,200,000
That means the company requires an ROI of $1.2 million.
They believe they can sell 100,000 units so let's see the ROI per unit.
= $1,200,000/100,000
= $12 per unit.
Now, they believe they can sell at no more than $80 but require a $12 profit/ ROI.
The Target cost should include the profit but not exceed $80. That would mean,
= 80 - 12
= $68
The target cost for one LittleLaser given the target ROI and sales price is $68
(Ignore income taxes in this problem.) Henscheid Roofing is considering the purchase of a crane that would cost $104,972, would have a useful life of 7 years, and would have no salvage value. The use of the crane would result in labor savings of $23,000 per year. The internal rate of return on the investment in the crane is closest to:
Answer:
IRR is 12%
Explanation:
The internal rate of return on the investment can be computed using the IRR formula in excel:
=IRR(values)
The values are the cash flows for the relevant years arranged as shown below:
Years Cash flows
0 -$104,972
1 $23,000
2 $23,000
3 $23,000
4 $23,000
5 $23,000
6 $23,000
7 $23,000
=irr(values from -$104,972-$23,000 in year 7)
irr=12%
Kindly find attached excel with the computation of IRR as well
The internal rate of return is the rate of return on investment where present value of cash inflows equal the initial investment
Sludge Corporation has two bonds outstanding, each with a face value of $3.00 million. Bond A is a senior bond; bond B is subordinated. Sludge has suffered a severe downturn in demand, and its assets are now worth only $5.00 million. If the company defaults, what payoff can the holders of bond B expect
Answer:
The payoff for holders of Bond B is $2,000,000
Explanation:
The senior bond takes priority over the subordinated bond when it comes redeeming bondholders investment in the business.
The senior bond has a lower risk as it is paid first in the event of liquidation,though attracts a lower rate of return since return and risk are positive related.
The subordinated is ranked lower than the senior debt but may command a higher rate of return because of its high risk.
Assets worth $5,000,000
repayment of senior debt ($3,000,000)
Balance left for subordinated debt $2,000,000
Choose one item from the following list that you understand well enough to evaluate. Develop several criteria of evaluation that you could defend to distinguish excellence from meritocracy in the US area. Then choose an item you don’t know much about and explain the research you might perform to discover reasonable criteria of evaluation for it. Smart phones, NFL quarterbacks, fashion designers, Navajo rugs, UN secretary generals, contemporary painters, hip-hop bands, organic vegetables, athletic shoes, historic U.S. battlegrounds, breeds of dogs, former British prime ministers.
Answer:
Explanation:
Choose one item from the following list that you understand well enough to evaluate.
Develop several criteria of evaluation that you could defend to distinguish excellence from meritocracy in the US area.
First we need to understand what meritocracy and excellence are after which we can choose any topic from the list and evaluate it using these.
What is meritocracy?
Meritocracy is Governance by elites who deserve to wield power because they possess merit (defined as 'intelligence plus effort') instead of by those who merely possess wealth or belong to privileged classes.
Such a system, in theory, forms the basis of an 'equal opportunity' society. But, in practice, unrestricted meritocracy may result in a society without rules and concentrate power in only a few hands. The term was coined by the UK sociologist Michael Young in 1958 book, 'The Rise of Meritocracy.'
Hence we can infer that meritocracy is governance by elites who possess intelligence along with efforts (hard work).
Now we thing of what is governance by excellence?
Excellence means that you're indispensable. At least right now, in this moment, there's no one else I would choose but you. You, the excellent one, are so surprising, so delightful, so over-the-top.
The Governance Excellence model identifies 3 inputs that boards and senior management should strive to align to maximise performance and generate sustainable results for all stakeholders.
These inputs are Value, Capability and Support and represent the following areas of the business and organization:
Value
Capability
Support
So in order to understand the scenario with the case subjects we choose from the list the Smart phones for understanding the market share and customer preference for smartphones and is it due to excellence or meritocracy.
First we prepare the list of popular smartphones that are sold in US:
Rank
Brand
Units shipment (millions)
Market Share (%)
1
Samsung
82.8
22
2
Apple
46.7
12.4
3
Huawei
39.1
10.4
4
Oppo
30.0
8
5
Xiaomi
28
7.4
Here it can be inferred from the point of view of meritocracy as:
Meritocracy of Samsung as a brand in US market:
Launches unique products which are first in market
Advance and reliable technology
Pioneer in smartphone design and adaptability
Meritocracy of Apple as a Brand:
Apple is more inn innovative and refined than Samsung
Uses its own operating system and hardware
Unique design and brand quotient
Meritocracy of Huawei as a brand in US:
It plays in the niche market of having advance software and hardware compositions.
The built quality is not so good and smartphones manufacturing is not the prime business of the enterprise.
Meritocracy of Xiaomi as a brand in the US market:
Routine design and adapts prevalent concepts that are ongoing in the market.
Uses not so premium hardware and software.
Built quality is not so good and misses refinement.
Hence the meritocracy of these market players in the smartphone market in the US justify their market share they hold.
On the other hand when we analyze the same data with excellence as our perspective we find:
Excellence of Samsung as a brand:
Wide spread marketing and advertisement strategy.
Customer feedback and trial runs
Participation in international platforms for promotion of brand visibility.
Enduring hardware.
Wide spectrum of models available.
Efficient supply chain.
Excellence of Apple:
Manufactures only premium products with custom hardware.
Appeals to a certain range of customers.
Costly and efficient.
Research and development.
Limited models available.
Costly supply chain.
Whereas excellence of rest three brands can be assessed jointly as:
Efficient supply chain.
Good advertising and marketing.
Then choose an item you don’t know much about and explain the research you might perform to discover reasonable criteria of evaluation for it.
Hip-hop bands is an area that I don’t know much about and would like to do an extensive market research to understand the effects of excellence and meritocracy as effective in their market success.
List: Smart phones, NFL quarterbacks, fashion designers, Navajo rugs, UN secretary generals, contemporary painters, hip-hop bands, organic vegetables, athletic shoes, historic U.S. battlegrounds, breeds of dogs, former British prime ministers
Defining criteria is critical for evaluate and compare papers, to assess subjects like NFL quarterbacks or Navajo rugs. Criteria can combine universal standards and personal taste, and should be well-justified, especially when controversial.
In an evaluate and compare paper, defining criteria is essential for judging the merits and weaknesses of different subjects. To evaluate excellence in NFL quarterbacks, for example, one could assess their accuracy, leadership, agility, and records. Conversely, to understand Navajo rugs, which one may be less familiar with, research could include studying patterns, cultural significance, weaving techniques, and material quality, perhaps by consulting with experts or reading dedicated literature on the subject.
Criteria for evaluation can include universally accepted standards as well as personal preferences. These criteria provide the backbone of our judgments and ensure that our evaluations are well-rounded and can be defended. In any evaluation argument, clarifying and justifying the chosen criteria is crucial, particularly if they're subject to controversy or debate, which can be supported by citing authoritative sources or aligning them with common values.
Mr. and Mrs. Mitchell, the owners of a small secondhand store, attended an auction where they bought a used safe for $50. The safe, part of the Sumstad estate, had a locked compartment inside, a fact the auctioneer mentioned. After they bought the safe, the Mitchells had a locksmith open the interior compartment; it contained $32,000 in cash. The locksmith called the police, who impounded the safe, and a lawsuit ensued between the Mitchells and the Sumstad estate to determine the ownership of the cash. Who should get it, and why?
Answer:
Mr and Mrs Mitchell should get it
Explanation:
The reason is that during the Auctioning of the used safe, legal transfer of ownership have took place. The transfer of ownership which is legal and recognizable at law with some consideration with was the $50 has made the transactions successful. The court will call off the ensuing of Mr and Mrs Mitchell also due to be fact that they were not aware of such prior to their transaction of Aution.
However, the $32,000 can be return to the plaintiff if Mr and Mrs Mitchell wishes to do so.
It is not necessary and enforced by the law to return such money, it is at their own discretion.
Break-even analysis for a service company
Sprint Corporation (S) is one of the largest digital wireless service providers in the United States. In a recent year, it had approximately 60 million direct subscribers (accounts) that generated revenue of $33,347 million. Costs and expenses for the year were as follows (in millions):
Cost of revenue $14,958
Selling, general, and administrative expenses 7,994
Depreciation and amortization 8,150
Assume that 30% of the cost of revenue and 70% of the selling, general, and administrative expenses are fixed to the number of direct subscribers (accounts). In part (a) and (b), round all interim calculations and final answers to one decimal place.
a. What is Sprint’s break-even number of accounts, using the data and assumptions given?
million accounts
b. How much revenue per account would be sufficient for Sprint to break even if the number of accounts remained constant?
$ million per account
Answer:
I'm sorry hun! doesnt look like I know this one
Wickland Company installs a manufacturing machine in its production facility at the beginning of the year at a cost of $136,000. The machine's useful life is estimated to be 10 years, or 120,000 units of product, with a $4,000 salvage value. During its second year, the machine produces 9,600 units of product. Determine the machines' second year depreciation under the units-of-production method. (Do not round intermediate calculations.)
Answer:
$10,560
Explanation:
For computing the depreciation expense for the second year first we have to find out the depreciation per unit which is shown below:
= (Original cost - salvage value) ÷ (estimated production units)
= ($136,000 - $4,000) ÷ (120,000 units)
= ($132,000) ÷ (120,000 units)
= $1.1 per unit
Now for the second year, the depreciation expense would be
= Production units in second year × depreciation per unit
= 9,600 units × $1.1
= $10,560
The machine's second-year depreciation under the units-of-production method is $10,560.
To determine the machine's second-year depreciation under the units-of-production method, we need to calculate the depreciation per unit and then multiply it by the number of units produced in the second year. Here's the calculation:
Depreciation per unit = (Cost - Salvage Value) / Total Units of Production
Depreciation per unit = ($136,000 - $4,000) / 120,000 units
Depreciation per unit = $132,000 / 120,000 units
Depreciation per unit = $1.10 per unit
Number of units produced in the second year = 9,600 units
Second-year depreciation = Depreciation per unit * Number of units produced in the second year
Second-year depreciation = $1.10 per unit * 9,600 units
Second-year depreciation = $10,560
Learn more about depreciation here:
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