Varmit-B-Gone is a pest control service that operates in a suburban neighborhood. The company attempts to make service calls at least once a month to all homes that subscribe to its service. It makes more frequent calls during the summer. The number of subscribers also varies with the season. The number of subscribers and the average number of calls to each subscriber for the months of interest follow:
Subscribers Service Calls
(per subscriber)
March 600 0.6
April 700 0.9
May 1,400 1.5
June 1,600 2.5
July 1,600 3.0
August 1,500 2.4
The average price charged for a service call is $80. Of the service calls, 30 percent are paid in the month the service is rendered, 60 percent in the month after the service is rendered, and 8 percent in the second month after. The remaining 2 percent is uncollectible.
Varmit-B-Gone estimates that the number of subscribers in September should fall 10 percent below August levels, and the number of service calls per subscriber should decrease by an estimated 20 percent. The following information is available for costs incurred in August. All costs except depreciation are paid in cash.
Service costs
Variable costs $ 24,000
Maintenance and repair 22,000
Depreciation (fixed) 42,000
Total $ 88,000
Marketing and administrative costs
Marketing (variable) $ 14,500
Administrative (fixed) 55,000
Total $ 69,500
Total costs $ 157,500
Variable service and marketing costs change with volume. Fixed depreciation will remain the same, but fixed administrative costs will increase by 5 percent beginning September 1. Maintenance and repair are provided by contract, which calls for a 1 percent increase in September.
Required:
Prepare a budgeted income statement for September. (Do not round intermediate calculations.)
VARMIT-B-GONE
Budgeted Income Statement
For the Month of September
Less service costs:
Total service costs
Marketing and administrative:
Total marketing and administrative costs
Total costs
Answers
Answer
The answer and procedures of the exercise are attached in the following images.
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in 2 sheets with the formulas indications.
To calculate the budgeted income statement for September for Varmit-B-Gone, we adjust the number of subscribers and service calls to estimate revenues, adjust variable costs proportionally, take into account fixed cost increases, and subtract total costs from revenue to find net income.
Explanation:Calculating the Budgeted Income Statement for Varmit-B-GoneTo prepare a budgeted income statement for September for Varmit-B-Gone, we need to calculate the expected revenue and costs for the month. First, we estimate the number of subscribers in September, which is 10 percent lower than in August. With 1,500 subscribers in August, September would have 1,350 (1,500 - 10% of 1,500). The number of service calls per subscriber in September would be 20 percent lower than in August, leading to an average of 1.92 calls (2.4 - 20% of 2.4) per subscriber. With an average price of $80 per service call, the revenue for September is estimated to be 1,350 subscribers × 1.92 calls/subscriber × $80/call.
Next, we calculate the total service costs. Variable costs will change with volume, therefore we must adjust them according to the change in the number of service calls from August to September. We assume that the $24,000 variable costs in August were for 1,500 subscribers × 2.4 calls/subscriber, and therefore we calculate the new variable cost for 1,350 subscribers × 1.92 calls/subscriber. Maintenance and repair costs will increase by 1 percent, changing from $22,000 to $22,220 (22,000 × 1.01). Depreciation is fixed and remains $42,000.
For marketing and administrative costs, the variable marketing costs will change with volume and are calculated similarly to variable service costs. Administrative costs are fixed but will increase by 5 percent, making them $57,750 (55,000 × 1.05) in September. Adding up all these costs will give us the total costs for the month. The budgeted income statement can then be finalized by subtracting the total costs from the revenue to find the net income for Varmit-B-Gone in September.
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Related Questions
Divine Apparel has 4,000 shares of common stock outstanding. On October 1, the company declares a $0.75 per share dividend to stockholders of record on October 15. The dividend is paid on October 31. Record all transactions on the appropriate dates for cash dividends.
Answers
The declaration of a dividend initially reduces retained earnings and creates a liability. When the dividend is paid, the liability is removed, and cash is reduced accordingly.
On October 1, the date of declaration, the following journal entry is made:
[tex]\[ \text{Dividends Payable} \quad 3,000 \][/tex]
[tex]\[ \text{Retained Earnings} \quad -3,000 \][/tex]
On October 15, the date of record, no journal entry is required since the dividends payable have already been recorded on the declaration date.
On October 31, the date of payment, the following journal entry is made:
[tex]\[ \text{Dividends Payable} \quad -3,000 \][/tex]
[tex]\[ \text{Cash} \quad 3,000 \][/tex]
When a company declares a cash dividend, it affects the company's financial statements. The declaration of a dividend creates a liability for the company, which is the amount that the company owes to its shareholders. This liability is recorded in an account called Dividends Payable.
On October 1, Divine Apparel declares a $0.75 per share dividend on 4,000 shares of common stock. To calculate the total amount of the dividend:
[tex]\[ \text{Total Dividend} = \text{Dividend per Share} \times \text{Number of Shares} \][/tex]
[tex]\[ \text{Total Dividend} = \$0.75 \times 4,000 \][/tex]
[tex]\[ \text{Total Dividend} = \$3,000 \][/tex]
The journal entry on October 1 records the dividend as a liability (Dividends Payable) and reduces the Retained Earnings by the same amount, since the dividend represents a distribution of the company's earnings to shareholders.
On October 15, the date of record, the company verifies which shareholders will receive the dividend. However, this does not require a journal entry because the liability was already recorded on the declaration date.
Finally, on October 31, when the dividend is paid, the company removes the liability by debiting Dividends Payable and crediting Cash for the same amount, which is $3,000. This reflects the cash outflow to pay the dividend to the shareholders.
Webster Corporation's budgeted sales for February are $334,000. Webster pays sales representatives a commission of 6% of sales dollars. The company pays a sales manager a monthly salary of $5,300 and expects advertising expense of $2,900 per month. Compute the total budgeted selling expenses for February.
O $28,240.
O $20,040.
O $8,200.
O $25,340.
O $22,940.
Answers
Answer:
Compute the total budgeted selling expenses for February.
O $28,240.
Explanation:
$ 334,000 Sales
$ 20,040 Sales representatives a commission
$ 5,300 Sales manager salary
$ 2,900 Advertising expense
Total Budgeted Selling Expenses : $20,040 + $5,300 + $2,900 = $28,240
On January 1, the Matthews Band pays $66,000 for sound equipment. The band estimates it will use this equipment for four years and perform 200 concerts. It estimates that after four years it can sell the equipment for $1,000. During the first year, the band performs 45 concerts. Compute the first-year depreciation using the straight-line method.
Answers
Answer:
Annual depreciation= $16,250
Explanation:
Giving the following information:
On January 1, the Matthews Band pays $66,000 for sound equipment. The band estimates it will use this equipment for four years and perform 200 concerts. It estimates that after four years it can sell the equipment for $1,000.
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (66,000 - 1,000)/4= $16,250
The first-year depreciation using the straight-line method is $16,250.
Explanation:The first-year depreciation using the straight-line method can be calculated by subtracting the estimated salvage value from the initial cost of the equipment and then dividing the result by the estimated useful life of the equipment. In this case, the initial cost is $66,000, the estimated salvage value is $1,000, and the estimated useful life is 4 years.
To find the first-year depreciation, we use the formula: (Initial cost - Salvage value) / Useful life.
Therefore, the first-year depreciation is ($66,000 - $1,000) / 4 = $16,250.
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Consider the following information about a business Diane opened last year: price = $20, quantity sold = 25,000; implicit cost = $255,000; explicit cost = $360,000. Assuming that all relevant costs and revenue are noted, what was Diane's accounting profit?
Answers
Answer:
Explanation: $140,000
Accounting profit is the difference between revenue and explicit cost.
Explicit costs are the actual costs incurred in the running of the business.
Revenue = price × quantity sold
= $20 × 25000 = $500,000
$500,000 - $360,000 = $140,000
Implicit costs are also referred as opportunity cost. They are used in calculating the economic profit.
Economic profit = Accounting profit - implicit cost
Twenty-two-year-old Chad has just graduated from college. He wants to buy a new car to celebrate. He expects to be able to make payments through his new job. His parents tell him that they will help him out, if he has difficulty making payments down the road, so he buys the car. Shortly thereafter, he loses his job, and can’t make the car payment. He tells the dealer that his parents have agreed to cover for him, but they have had unexpected home repair expenses, and it would be a hardship for them to cover for Chad. Which of the following is true?A. The dealer cannot legally require the parents to make the payment.B. The dealer can legally require the parents to make the payment.C. Only Chad can legally require his parents to make the payment.D. none of the above.
Answers
Answer:
A. The dealer cannot legally require the parents to make the payment.
Explanation:
According to the law the dealer cannot legally require the parents to make the payment because the merchandise is not legal, therefore there is no legal contract.
Cynthia Knott's oyster bar buys fresh Louisiana oysters for $5 per pound and sells them for $9 per pound. Any oysters not sold that day are sold to her cousin, who has a nearby grocery store, for $2 per pound. Cynthia believes that demand follows the normal distribution, with a mean of 100 pounds and a standard deviation of 15 pounds. How many pounds should she order each day?
Answers
Answer:
103
Explanation:
Please see attachment .
The number of pounds to be ordered each day is 103 pounds. This is calculated using the news vendor model.
What is the news vendor model?The news vendor model is used to determine the optimum inventory level in case of uncertainties. The level of inventory is calculated using z score of the probability. The probability under this model can be calculated as:
[tex]\rm P = \dfrac{Co}{Cu+Co}[/tex]
Where Co is the cost of actual Utilization, and Cu is the cost of under Utilization.
[tex]\rm Co = Selling\:price - Cost\\\\\rm Cu = Cost - Receipt\:from\:sale\:of \:unsold\:stock[/tex]
The quantity can be calculated as:
[tex]\rm Quantity = Mean + (Standard \:deviation \times z\: score\: of \:probability)[/tex]
The z score of probability can be calculated from the table.
Given:
Mean is 100
Standard deviation is 15
Cost is $5
Selling price is $9
Selling price of unsold stock is $2
Therefore Co and Cu will be:
[tex]\rm Co = Selling\:price - Cost\\\\Co = \$9 - \$5\\\\Co= \$4[/tex]
And,
[tex]\rm Cu = Cost - Receipt\:from\:sale\:of \:unsold\:stock\\\\ Cu = \$5 - \$2\\\\ Cu = \$3[/tex]
The probability will be:
[tex]\rm P = \dfrac{Co}{Cu+Co}\\\\\rm P =\rm \dfrac{\rm Co}{\rm Cu+Co}\\\\\rm P = 0.5914[/tex]
The z score of this probability is 0.18
Therefore the quantity will be:
[tex]\rm Quantity = Mean + (Standard \:deviation \times z\: score\: of \:probability)\\\\\rm Quantity = 100+ (15\times 0.18)\\\\\rm Quantity = 100+ 2.7\\\\\rm Quantity = 102.7 \\\\\rm Quantity = 103\:pound[/tex]
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JacksonJackson Bank lends JabbourJabbour Clothing Company $125 comma 000125,000 on September 1. JabbourJabbour signs a $125 comma 000125,000, 6%, six-month note. The journal entry made by JabbourJabbour on December 31, its fiscal year-end, is
Answers
Answer:
Explanation:
The journal entry is shown below:
Interest expense A/c Dr $3,000
To Interest payable A/c $3,000
(Being interest is recorded)
The computation of the interest expense is shown below:
= Principal × rate of interest × number of months ÷ total number of months in a year
= $125,000 × 6% × (4 months ÷ 12 months)
= $2,500
The four-month is calculated from the September 1 to December 31
On October 1, 2018, Parker Company made a loan to one of its customers. The customer signed a 9-month note for $150,000 at 13%. Calculate the maturity value of the note. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
Answers
Answer:
Maturity value = $164,625
Explanation:
given data
time = 9 month
principal = $150,000
rate = 13%
to find out
maturity value
solution
we get here Maturity value that is express as
Maturity value = Principle + interest ........................1
put here value we get Maturity value
Maturity value = $150,000 + ( $150,000 × 13% × [tex]\frac{9}{12}[/tex] )
Maturity value = $150,000 + $14,625
Maturity value = $164,625
Final answer:
The maturity value of the 9-month note for $150,000 at a 13% annual interest rate is $164,625 when rounded to the nearest dollar.
Explanation:
To calculate the maturity value of the note for Parker Company's customer, we must compute both the principal and the interest accrued over the 9-month period. The interest can be determined using the formula:
Interest = Principal imes rate imes time
In this case:
Principal = $150,000
Annual Interest Rate = 13%
Time = 9 months (9/12 of a year)
Firstly, we transfrom the annual interest rate into a monthly interest rate and then apply it to the 9 months:
Interest = $150,000 imes 0.13 imes (9/12)
Following the calculations to two decimal places:
Interest = $150,000 imes 0.13 imes 0.75 = $14,625
The total maturity value is found by adding the principal to the interest:
Maturity Value = Principal + Interest
Maturity Value = $150,000 + $14,625
Maturity Value = $164,625
Round to the nearest dollar:
Maturity Value = $164,625
Gregory Trout has just received a memo explaining that because of his department's success with the newly developed Trout, Inc., that his request for three new employees has been approved. Gregory now faces the challenge of working with the areas of human resource management in recruiting, selecting, training and maintaining eFective employees. In recruiting and selecting employees for the new positions, Gregory will apply which human resource management goal?
a. Implementing strategies
b. Managing talent
c. Maintaining the company mission
d. finding the right people
e. Controlling strategies
Answers
Answer:
d. finding the right people
Explanation:
As the George's department had successfully satisfied the needs of the new developed Trout , Inc. IT might happen that work will be extended. This will require Goerge to increase the workforce those are having skill sets that matches the Trout, Inc. needs.
Thus, while recruiting and seelcting for the new positon Georgy will apply HRM goal of finding the right set of people for the required project.
The component of a firm's service quality information system that is used specifically to assess employee performance is:
a. employee surveys.
b. customer focus group interviews.
c. solicitation of customer complaints.
d. total market service quality survey.
e. mystery shopping.
Answers
Answer:d. total market service quality survey.
Explanation:
The analysis of the total market service quality survey helps to provide details information on the product performance, personal contributions to success, company competitor performance, and other market related results.
Employee survey will not give information on the product nor customers evaluation, customer focused interview will miss out other vital information like competitors market performance, solicitation of customers complain may be bias and mystery shopping may not be adequate to be used for evaluation.
They really don’t purchase much, but they like the recreation the outing provides. Which type of shopping activity is this? Group of answer choices acquisitional shopping epistemic shopping experiential shopping impulsive shopping habitual shopping
Answers
Answer:
experiential shopping
Explanation:
Experiential Shopping is done in order to avoid the boredom and get engaged in an activity, basically for moving out of the room and finally having a view and enjoying it. The goods are purchased without any planning, and only because you saw them and you like them.
This is done in order to recreate peace.
This is done by people to create happiness and internal satisfaction. Shopping do not provide happiness to them unlike impulsive shopping, but the mere thought to go out and enjoy do provides them the happiness they intend to have.
Answer:
Andrea Amati invent?
A. The viol
B. The violin
C. The flute sanfijasionasi
D. The lute
Explanation:s dkgsjlg
Andrea Amati invent?
A. The viol
B. The violin
THSJND
C. The flute
YEAG
D. The lute
Van Den Borsh Corp. has annual sales of $68,735,000, an average inventory level of $15,012,000, and average accounts receivable of $10,008,000. The firm's cost of goods sold is 85% of sales.
The company makes all purchases on credit and has always paid on the 30th day.
However, it now plans to take full advantage of trade credit and to pay its suppliers on the 40th day. The CFO also believes that sales can be maintained at the existing level but inventory can be lowered by $1,946,000 and accounts receivable by $1,946,000.
What will be the net change in the cash conversion cycle, assuming a 365-day year?
Round to the nearest whole day.
a. –25 days
b. –31 days
c. –27 days
d. –32 days
Answers
Answer:
The answer is d. -32 days.
Explanation:
*The before change cash conversion cycle = Days of inventory outstanding + Days of receivables outstanding - Days of payable outstanding.
in which:
Days of inventory outstanding = Average inventory / Cost of good sold x 365 = ( 15,012,000 / ( 68,735,000 x 0.85) ) x 365 = 94 days
Days of receivables outstanding = Average Receivables / Revenue x 365 = ( 10,008,000 / 68,735,000 x 365 = 53 days
Days of payable = 30 days
=> Before change cash conversion cycle = 117 days.
* The after-change cash conversion cycle is calculated with the same formula, however with estimated changes be applied in the formula as followed:
Days of inventory outstanding = Average inventory / Cost of good sold x 365 = ( (15,012,000 - 1,946,000) / ( 68,735,000 x 0.85) ) x 365 = 82 days
Days of receivables outstanding = Average Receivables / Revenue x 365 = ( (10,008,000 - 1,946,000) / 68,735,000 x 365 = 43 days
Days of payable = 40 days
=> After-change cash conversion cycle = 82 + 43 - 40 = 85 days
=> Net change is 85 - 117 = -32 days
Final answer:
The net change in the Cash Conversion Cycle for Van Den Borsh Corp., after adjusting for inventory and accounts receivable reductions and the extended payment period to suppliers, is a decrease of 31 days which directly influences cash flows. This is computed by calculating the initial and new Days Inventory Outstanding and Days Sales Outstanding, along with the change in Days Payable Outstanding, and comparing the initial and new CCC values. The correct answer is option (B).
Explanation:
The Cash Conversion Cycle (CCC) measures the time taken between the outlay of capital and the collection of revenue from the sales of goods. It is calculated by adding the Days Inventory Outstanding (DIO), Days Sales Outstanding (DSO), and subtracting the Days Payable Outstanding (DPO). In this case, we need to first calculate these components using the provided information:
Days Inventory Outstanding (DIO) is calculated as (Average Inventory / Cost of Goods Sold) * 365. Days Sales Outstanding (DSO) is calculated as (Average Accounts Receivable / Total Sales) * 365. Days Payable Outstanding (DPO) is currently 30 days, since the company pays on the 30th day, and will become 40 days after they decide to pay on the 40th day.
Once we have the initial CCC value using the original inventory and receivables levels, we compute a new CCC value using the reduced levels. The net change in the CCC will inform us about the impact on the cash flows. Let's calculate each component:
Cost of goods sold (COGS) = $68,735,000 * 85% = $58,424,750
Original DIO = ($15,012,000 / $58,424,750) * 365 = 93.8 days (rounded to nearest whole day)
New DIO with reduced inventory ($15,012,000 - $1,946,000):
New Inventory = $15,012,000 - $1,946,000 = $13,066,000
New DIO = ($13,066,000 / $58,424,750) * 365 = 81.6 days (rounded to nearest whole day)
Original and new DSO are calculated using total sales and average accounts receivable:
Original DSO = ($10,008,000 / $68,735,000) * 365 = 53.2 days (rounded to nearest whole day)
New DSO with reduced receivables ($10,008,000 - $1,946,000):
New Receivables = $10,008,000 - $1,946,000 = $8,062,000
New DSO = ($8,062,000 / $68,735,000) * 365 = 42.8 days (rounded to nearest whole day)
Change in DPO = 40 days - 30 days = +10 days
Initial CCC = DIO + DSO - DPO = 93 days + 53 days - 30 days = 116 days
New CCC = New DIO + New DSO - New DPO = 82 days + 43 days - 40 days = 85 days
Net change in the CCC = New CCC - Initial CCC = 85 days - 116 days = -31 days. Therefore, the correct answer is b. – 31 days.
In vendor-managed inventory systems,A. corporations send information to retail customers, bypassing wholesalers and retailers.B. companies send information to cooperatives.C. customers send information to retailers.D. manufacturers send sales information to the retailer.E. retailers send sales information to the manufacturer.
Answers
Answer: Option (E)
Explanation:
Vendor-Managed Inventory is referred to as the theory which is based and inspired by the assimilation in the supply chain management in association with the system ambulation. Vendor managed inventory is being utilized under the inventory management in order to equip oneself with the effect of bullwhip effect .
Yard Tools manufactures lawnmowers, weed-trimmers, and chainsaws. Its sales mix and unit contribution margin are as follows.
Sales Mix Unit Contribution Margin
Lawnmowers 20 % $32
Weed-trimmers 50 % $24
Chainsaws 30 % $45
Yard Tools has fixed costs of $4,944,500.
Compute the number of units of each product that Yard Tools must sell in order to break even under this product mix. (Use the Weighted-Average Unit Contribution Margin Ratio rounded to 2 decimal places e.g. 0.25 and round final answers to 0 decimal places, e.g. 2,510.)
Answers
Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Sales Mix Unit Contribution Margin
Lawnmowers 20 % $32
Weed-trimmers 50 % $24
Chainsaws 30 % $45
Break-even point (units)= Total fixed costs / (weighted average selling price - weighted average variable expense)
Break-even point (units)= 4,944,500/ ( 0.20*32 + 0.5*24 + 0.30*45)
Break-even point (units)= 155,000 units
Each product:
Lawnmowers= 0.20*155,000= 31,000
Weed-trimmers= 0.50*155,000= 77,500
Chainsaws= 0.30*155,000= 46,500
A fall in the price level:____________.
A. reduces the value of money in peoples' pockets, so people buy less goods.
B. reduces the value of money in peoples' pockets, so people buy more goods.
C. increases the value of money in peoples' pockets, so people buy more goods.
D. increases the value of money in peoples' pockets, so people buy less goods.
Answers
Answer:
C. increases the value of money in peoples' pockets, so people buy more goods.
Explanation:
If there is a general decline in price levels, there is a deflation.
When there's a fall in price, the same amount of money can buy more goods and services. Therefore, the value of money has increased and aggregate demand will increase.
Franco converted a building from personal to business use in May 2016 when the fair market value was $72,500. He purchased the building in July 2013 for $116,000. On December 15 of this year, Franco sells the building for $58,000. On the date of sale, the accumulated depreciation on the building is $7,315. What is Franco’s recognized gain or loss on the sale?
Answers
Answer:
Total loss will be equal to $7185
Explanation:
We have given market value of the building = $72500
He sells the building at $58000
Accumulated depreciation = $7315
We have to find the loss or gain
In this case there will be loss as the market value is greater than the sell value
So loss will be equal to
Loss = Market value of building - sale value - accumulated depreciation
So loss = $72500-$5800-$7315 = $7185
So loss will be equal to $7185
Franco experiences a recognized loss of $50,685 on the sale of the building, calculated from the sale price minus the adjusted basis.
Explanation:When Franco converted the building from personal to business use in May 2016, the fair market value was $72,500. However, by the time he sold the building, it had depreciated, so he only received $58,000 for it. In order to evaluate his gain or loss, you need to calculate the adjusted basis which is the purchase price ($116,000) minus the accumulated depreciation ($7,315).
So, the adjusted basis would be $116,000 - $7315 = $108,685.
Then, the recognized gain or loss can be calculated as the sale price ($58,000) minus the adjusted basis ($108,685). Therefore, the recognized loss Franco experiences is $58,000 - $108,685 = -$50,685.
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Given a relevant range, which ONE of the following statements is TRUE? Group of answer choices
a. A fixed cost is fixed in total and decreases per unit as the number of units increases.
b. A variable cost is fixed in total and decreases per unit as the number of units increases.
c. A variable cost is variable in total and decreases per unit as the number of units increases.
d. A variable cost is variable in total and increases per unit as the number of units increases.
Answers
Final answer:
The correct statement regarding costs within a relevant range is that a variable cost is variable in total and decreases per unit as the number of units increases. Fixed costs remain constant in total, while variable costs such as labor and raw materials vary directly with the level of output.
Explanation:
When discussing costs within a relevant range, it is important to understand how different types of costs behave in relation to production levels. Answer choice (a) states that a fixed cost is fixed in total and decreases per unit as the number of units increases. This is correct, as fixed costs, such as rent or salaries, do not change with the level of output; therefore, when more units are produced, the cost allocated to each unit of product becomes less.
Answer choices (b) and (d) incorrectly describe variable costs. Variable costs change in total depending on the level of production, but they do not decrease per unit as the number of units increases, nor do they increase per unit as the output increases. Instead, as indicated in choice (c), a variable cost is variable in total and decreases per unit as the volume of production increases, due to economies of scale and the spreading of fixed costs over more units. Therefore, option (c) is the correct answer.
Labor and raw materials are examples of variable costs because they vary directly with the level of output. The more goods or services produced, the more labor and raw materials are generally required, thus increasing the variable costs.
Which of the following is least likely to be considered a risk assessment procedure?A. Analytical procedures.B. Inspection of documents.C. Observation of the counting of inventory.D. Observation of the performance of certain accounting procedures.
Answers
Answer:
C. Observation of the counting of inventory.
Explanation:
Risk assessment procedures involve all the steps that represent the evaluation of procedures which are company specific and not individual item specific.
These assessments are done in order to ensure the accounting procedures are fair that are followed by the company.
Thus, the observation of counting of inventory is substantative in nature and not investigating like, risk assessment test.
All other steps mentioned are part of risk assessment procedure.
Final answer:
Among the choices given for risk assessment procedures, observation of the performance of certain accounting procedures is least likely to be considered a direct risk assessment method as it is more about monitoring existing controls rather than identifying new risks.
Explanation:
The question asks which of the listed options is least likely to be considered a risk assessment procedure. In the context of a risk assessment process, which involves identifying and quantifying potential risks, certain procedures are standard. These include analytical procedures, inspection of documents, and observation of various activities such as the counting of inventory or the performance of accounting procedures. Among the options given:
Analytical procedures (A) are often used to understand financial data and spot inconsistencies or potential areas of risk.
Inspection of documents (B) is crucial for verifying the accuracy of records and identifying discrepancies that might indicate risk.
Observation of the counting of inventory (C) helps ensure the physical assets match the records, revealing potential risk of loss or theft.
Observation of the performance of certain accounting procedures (D) can identify inefficiencies or irregularities that may pose financial risk.
However, when comparing these options, observation of the performance of certain accounting procedures (D) is less a direct "risk assessment" method and more a procedure for ensuring that existing controls are being followed. It is more about monitoring than assessing new risks. Therefore, it is considered least likely to be a risk assessment procedure compared to the others listed.
Robert Lewis Stevenson’s story, Imp in the Bottle, features a fabulous bottle whose owner will be granted any wish by the imp who lives within the bottle. The problem is that anyone who buys the bottle must sell it at a lower price or else suffer eternity in hell. [If you do not believe in hell, assume that you do for the purposes of this question.] Assuming the smallest possible unit of currency is one cent, would you buy the bottle if it were offered to you for $1,000? Explain your reasoning.
Answers
Answer:
Yes.
Explanation:
I would buy the bottle as anything can be asked for from the bottle and it will come true. Hence once the bottle is bought anything can be wished for and then the bottle can be sold off at a lower price than $1000.
Brutus Inc is considering the purchase of a new machine for $500,000. It is expected that the equipment will generate annual cash inflows of $100,000 and annual cash outflows of $37,500 over its 10 year life. Annual depreciation is $50,000. Compute the cash payback period.
Answers
Answer:
8 years
Explanation:
Given: Cost of new machine= $500000.
Annual cash inflow= $100000.
Annual cash outflow= $37500.
First, we will calculate annual payback or cash inflow.
Annual payback= [tex](cash\ inflow - cash\ outflow)[/tex]
∴Annual payback= [tex](\$ 100000 - \$ 37500)= \$ 62500[/tex]
Now computing cash payback period.
Cash payback period= [tex]\frac{initial\ investment}{annual\ payback}[/tex]
Cash payback period= [tex]\frac{500000}{62500} = 8\ yrs[/tex]
∴ Cash payback period is 8 years.
When payback period is short then investment is more attractive.
The softbank telecommunications and internet corporation prides itself on being a forward-thinking, innovative company.To market its various products, Softbank coordinates many marketing tools such as sales promotions, digital marketing, advertising, public relations campaigns, and even some guerrilla marketing with its corporate and marketing strategic message. What impact does a coordinated message have on Softbank's target markets?
a. it reinforces the company's culture and marketing message across a variety of platforms and creates a more efficient and effective means to impact customers' perceptions and behavior.
b. it communicates messages across a variety of platforms and creates fractured marketing communication that impacts customers' perceptions and behavior.
c. it delivers a variety of messages across various platforms and creates confusion among its target market customers' perceptions and behavior.
Answers
Answer:
(A). It reinforces the company's culture and marketing message across a variety of platforms and creates a more efficient and effective means to impact customers' perceptions and behavior.
Explanation:
Coordination ensures resources are fully utilized and wastages are reduced. As such, it leads to efficiency and effectiveness in an organization.
Coordination in marketing ensures a consistent message across all the organization's marketing platforms.
By coordinating its corporate and strategic message with its marketing tools, Softbank Telecommunications and Internet Corporation, focuses on achieving its goals and objectives, while also communicating its values and culture to its customers in various target markets.
A coordinated message reinforces Softbank's culture and marketing message across platforms, creating an efficient and effective means to impact customers' perceptions and behavior.
Explanation:A coordinated message has a positive impact on Softbank's target markets because it reinforces the company's culture and marketing message across a variety of platforms. This creates a more efficient and effective means to impact customers' perceptions and behavior. By using various marketing tools such as sales promotions, digital marketing, advertising, public relations campaigns, and guerrilla marketing, Softbank ensures a consistent and cohesive message that resonates with its target market.
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A company works 320 days per year and has an annual demand of 2080 units of product desires to set an reorder point that will cover demand during lead time. If the lead time is 4 working days, what should the reorder point be? Group of answer choices
6.5 units
14 units
20 units
26 units
160 units
Answers
Answer:
D. Re-order point = 26 days
Explanation:
Given,
Annual Demand, D = 2,080 units
Number of working days = 320 days
Lead time = 4 days
We know,
Re-order point = (Annual demand/Number of working days)*Lead Time
Re-order point = (Annual demand/Number of working days)*Lead Time
Re-order point = (2,080/320)*4
Re-order point = (6.5*4)
Re-order point = 26 days
Therefore, the answer choice is D.
As there is no maximum and average lead time and no replenishment stock, I exclude the safety stock from the re-order point calculation.
How does a bond issuer decide on the appropriate coupon rate to set on its bonds?
Explain the difference between the coupon rate and the required return on a bond.
Answers
Answer
The answer and procedures of the exercise are attached in the following image.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
The rise of Walmart as one of the world's largest corporations has brought the concept of:
A) reverse auctions
B) target return on investment pricing
C) price points
D) high/low pricing
E) everyday low pricing
Answers
Answer:
correct option is E) everyday low pricing
Explanation:
solution
Rise of Walmart brought the concept of Everyday low pricing as we all aware everyone need good quality product in low price and Walmart is one the world largest corporation that give almost everyday attractive offer to their customers Incredible Prices on many different quality brands
they giver offer according to trends for autumn winter to attract all customers
so we can that here correct option is E) everyday low pricing
Under Armour, Inc. is an American supplier of sportswear and casual apparel. Following are selected financial data for the company for the period 2009â2013.2009 2010 2011 2012 2013Profit margin (%) 5.6 6.5 6.7 7.1 7.1 Retention ratio (%) 100.0 100.0 100.0 100.0 100.0 Asset turnover (X) 1.6 1.6 1.6 1.6 1.5 Financial leverage (X) 1.7 1.7 1.9 1.8 1.9 Growth rate in sales (%) 18.7 24.8 39.0 25.2 27.7 Calculate Under Armourâs annual sustainable growth rate for the years 2009 through 2013. (Round your answers to 1 decimal place.)
Answers
The sustainable growth rate (SGR) can be calculated using the formula SGR=(Retention ratio*Return on Equity). ROE is derived from the combination of profit margin, asset turnover, and financial leverage. By applying the provided data for Under Armour, Inc. ranging from 2009 to 2013, calculated values range from 15.1% to 20.3%
Explanation:The sustainable growth rate (SGR) for a company is the rate at which the company can grow its sales, earnings, and dividends while maintaining its current financial structure. It's typically calculated using the formula: SGR=(Retention ratio*Return on Equity), given as a percentage. The return on equity (ROE) can be derived from the combination of profit margin, asset turnover, and financial leverage (the formula for which is ROE=Profit margin*Asset turnover*Financial leverage).
Now, applying the given data:
2009: SGR = 100.0% * (5.6% * 1.6 * 1.7) = 15.2%2010: SGR = 100.0% * (6.5% * 1.6 * 1.7) = 17.7%2011: SGR = 100.0% * (6.7% * 1.6 * 1.9) = 20.3%2012: SGR = 100.0% * (7.1% * 1.6 * 1.8) = 20.4%2013: SGR = 100.0% * (7.1% * 1.5 * 1.9) = 20.2%These values are approximate and should be rounded to the nearest decimal point in any professional financial report.
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Acme Company has an agreement with a major credit card company which calls for cash to be received immediately upon deposit of Acme customers' credit card sales receipts. The credit card company receives 3.5% of card sales as its fee. If Acme has $2,000 in credit card sales, which of the following statements is true?a. Acme debits Cash $2,000b. Acme debits Cash $1,930c. Acme debits Accounts Receivable - Credit Card Co $2,000d. Acme debits Accounts Receivable - Credit Card Co $1,930e. Acme credits Sales $1,930
Answers
Answer:
b. Acme debits Cash $1,930
Explanation:
Before passing the journal entry, first we have to do the calculations which his shown below
= Credit card sales - Credit card sales × fee percentage
= $2,000 - $2,000 × 3.5%
= $2,000 - $70
= $1,930
The journal entries are shown below:
Cash A/c Dr $1,930
To Sales A/c $1,930
(Being cash is received after applying the fee percentage)
Raytheon's State College location had a gross income of $20,000,000 in 2018. In 2018 they also paid $3,000,000 in employee salaries, $4,000,000 in operating and maintenance costs, $800,000 in depreciation expense, and $210,000 in insurance for manufacturing facilities. Calculate the net income of Raytheon State College for 2018.
Answers
Answer:
$11,990,000
Explanation:
In the income statement, the total revenues and the total expenses are recorded.
If the total revenues are more than the total expenditure then the company earns net income
And, If the total revenues are less than the total expenditure then the company have a net loss
This net income or net loss would reflect in the statement of the retained earning account.
The computation of the net income is shown below:
= Gross income - employee salaries - operating and maintenance costs - depreciation expense - insurance for manufacturing facilities
= $20,000,000 - $3,000,000 - $4,000,000 - $800,000 - $210,000
= $11,990,000
The payroll register of Charbroil Company indicates $1,200 of social security tax withheld and $300 of Medicare tax withheld on total salaries of $20,000 for the period. Assume earnings subject to state and federal unemployment compensation taxes are $7,000, at the federal rate of 0.8% and the state rate of 5.4%. What is the total amount of payroll tax expense?a. $1,878b. $1,500c. $1,556d. $1,934
Answers
Answer:
d. $1,934
Explanation:
Total amount of payroll tax expense=Social security tax withheld+Medicare tax withheld +State and federal unemployment compensation taxes on earnings=1200+300+.062*7000=$1934 (d. $1,934)
In the short run, the quantity of output that firms supply can deviate from the natural rate of output if the actual price level in the economy deviates from the expected price level. Several theories explain how this might happen.For example, the sticky-price theory asserts that the output prices of some goods and services adjust slowly to changes in the price level. Suppose firms announce the prices for their products in advance, based on an expected price level of 100 for the coming year. Many of the firms sell their goods through catalogs and face high costs of reprinting if they change prices. The actual price level turns out to be 90. Faced with high menu costs, the firms that rely on catalog sales choose not to adjust their prices. Sales from catalogs will _______(Remain the same/fall/rise), and firms that rely on catalogs will respond by _______ (Increasing/Reducing) the quantity of output they supply. If enough firms face high costs of adjusting prices, the unexpected decrease in the price level causes the quantity of output supplied to ______ (Fall below/Rise above) the natural rate of output in the short run.
Answers
Answer:
The actual price level turns out to be 90. Faced with high menu costs, the firms that rely on catalog sales choose not to adjust their prices. Sales from catalogs will remain the same, and firms that rely on catalogs will respond by increasing the quantity of output they supply.
If enough firms face high costs of adjusting prices, the unexpected decrease in the price level causes the quantity of output supplied to rise above the natural rate of output in the short run.
Explanation:
The inputs are based on the sticky-price theory, with explaination as below:
"In the short run, the quantity of output that firms supply can deviate from the natural rate of output if the actual price level in the economy deviates from the expected price level. Several theories explain how this might happen. For example, the sticky-price theory asserts that the output prices of some goods and services adjust slowly to changes in the price level."
Using the information below for Singing Dolls, Inc., determine cost of goods manufactured for the year:
Work in Process, January 1 $ 53,800
Work in Process, December 31 38,900
Total Factory overhead 7,400
Direct materials used 14,400
Direct labor used 28,400"
Answers
Answer:
COGS= $65,100
Explanation:
Giving the following information:
Using the information below for Singing Dolls, Inc., determine cost of goods manufactured for the year:
Work in Process, January 1 $ 53,800
Work in Process, December 31 38,900
Total Factory overhead 7,400
Direct materials used 14,400
Direct labor used 28,400
cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
cost of goods manufactured= 53,800 + 14,400 + 28,400 + 7,400 - 38,900= 65,100
COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory
COGS= $65,100