Answer:
$3,935
Explanation:
The computation of the catering supplies are shown below:
= Catering supplies + monthly cost for each job × number of jobs + monthly cost for per meal × number of meals
= $450 + $75 × 27 jobs + $10 × 146 meals
= $450 + $2,025 + $1,460
= $3,935
We simply added the catering supplies cost, meal cost, and the job cost so that the accurate value can come
All other information which is given is not relevant. Hence, ignored it
On January 1, 2016, Martini, Inc. acquired a machine for $1,030,000. The estimated useful life of the asset is five years. Residual value at the end of five years is estimated to be $87,000. What is the book value of the machine at the end of 2017 if the company uses the straight-line method of depreciation?
Answer: $652,800
Explanation:
Straight Line Depreciation per year = (Cost – Residual Value) / Useful Life
Straight Line Depreciation per year = ($1,030,000 - $87,000) / 5
Straight Line Depreciation per year = $188,600
Accumulated Depreciation at the end of 2017 = Depreciation per year * No. of years used
Accumulated Depreciation at the end of 2017 = $188,600 * 2
Accumulated Depreciation at the end of 2017 = $377,200
Book Value at the end of 2017 = Cost – Accumulated Depreciation at the end of 2017
Book Value at the end of 2017 = $1,030,000 - $377,200
Book Value at the end of 2017 = $652,800
Final answer:
The book value of the machine at the end of 2017, using the straight-line method of depreciation, is calculated to be $652,800 after taking into account the total depreciation over two years.
Explanation:
The question asks for the book value of a machine at the end of 2017 if the company uses the straight-line method of depreciation. The initial cost of the machine is $1,030,000, with an estimated residual value of $87,000 at the end of its five-year useful life. To calculate depreciation using the straight-line method, subtract the residual value from the cost and then divide by the useful life. So, depreciation per year = ($1,030,000 - $87,000) / 5 = $188,600. By the end of 2017, which is two years from the acquisition date, the total depreciation would be $188,600 * 2 = $377,200. The book value of the machine at the end of 2017 is then the cost minus the accumulated depreciation, which equals $1,030,000 - $377,200 = $652,800.
A productivity index of 110% means that a company’s labor costs would have been 10% higher if it had not made production improvements. Now refer to the Income Statement in Baldwin's Annual Report. The direct labor costs for Baldwin were $32,558. These labor costs could have been $20,000 higher if investments in training that increased productivity had not been made. What was the productivity index for Baldwin that led to such savings?
Answer:
161.4%
Explanation:
Please see attachment
The Absolute Zero Co. just issued a dividend of $3.40 per share on its common stock. The company is expected to maintain a constant 4.5 percent growth rate in its dividends indefinitely.
If the stock sells for $53 a share, what is the company’s cost of equity?
The cost of equity for the Absolute Zero Co., calculated using the Gordon Growth Model and given a constant growth rate of 4.5% in dividends, is 6.4%.
Explanation:The cost of equity for the Absolute Zero Co. can be calculated using the Gordon Growth Model, which is used to determine the value of a stock that pays dividends. The formula for this model is D1 / (k - g), where D1 is the dividend in the next period, k is the cost of equity, and g is the growth rate of dividends.
In this case, the dividend (D1) at the next time period would be $3.40 * 1.045 ($3.55), given that the dividends are expected to grow at a constant rate of 4.5%. The cost of equity (k) can thus be found by rearranging the formula to: k = D1/P0 + g = $3.40/$53 + 0.045 = 0.064 or 6.4%.
So, the cost of equity for the Absolute Zero Co. is 6.4%.
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Horace sells equipment with an adjusted basis of $20,000 to his great-grandson, Matthew, for its fair market value of $15,000. Matthew sells the equipment to an unrelated party for $17,000. What are Matthew’s realized and recognized gains (losses) upon the sale?
Answer:
The recognized gains upon the sale is $2000.
Explanation:
As the cost of purchase of the equipment to Mathew is $15000 and the sale proceeds received is $17000. The gain is actually calculated as follows;
Gain = Sale proceeds –Cost of equipment
Gain = Matthew sells the equipment to an unrelated party for $17,000 – Matthew bought equipment for its fair market value of $15,000
Which is $1700 -$1500 = $2000
Therefore the recognized gains upon the sale is $2000.
The Buckeye Corporation expects to pay a dividend of $3.15 per share at the end of next year. The firm expects the dividend to continue growing at the rate of 8% per year for the foreseeable future. If you require a return of 13% per year, the most you should pay for this stock is ______?
Answer:
Answer is $63.
Explanation:
Price = D1/(ke- g) = 3.15/(.13 - .08) = $63
Answer is $63.
At a minimum, the sales forecast for the coming year would reflect A. the influence of any anticipated events that might materially affect the sales trend. B. any future trend in sales that is expected to begin in the new year. C. Both of the above are correct. D. Neither of the above is correct.
Answer:
C. Both of "A" and "B" above are correct.
Explanation:
A sales forecast is an estimation of future revenue to be generated from sales that can be obtained by studying past data and trends, and analysing the market. A prediction of what sales will look like within a specified period of time in future, is then made.
In sales forecasting, anticipated events that may affect sales as well as predicted future sales trend in the coming year, are taken into consideration and are reflected in the sales forecast for the coming year.
The informal communication network, or grapevine:
a. is moderately important, depending on what is happening within the organization and leadership.
b. is not important because it is unplanned and may involve rumors, untruths, and trivial topics.
c. is extremely important because it is widespread and carries information very quickly.
Answer: Option A
Explanation: In simple words, informal communication network refers to the line of communication which is not established by the management. This line is established by the employees within and does not work on specified rules and procedures.
They are moderately important as it helps to spread the information quickly and keeps the morale and satisfaction of the individuals high, But management has to keep control on it as it could be a source of rumors affecting the reputation of the business .
The informal communication network, or grapevine, is an essential part of the informal organization within a company, carrying information quickly and influencing organizational culture. It serves both as a source of social exchange and insight into management actions, despite sometimes carrying gossip. Managers and employees alike can leverage and navigate this network for beneficial outcomes in the workplace.
Explanation:The informal communication network, or grapevine, is a crucial aspect of organizational communication. Contrary to being merely a source of rumors and trivial matters, it is an essential channel through which information flows swiftly among members of an organization. The grapevine is part of the informal organization structure, which is characterized by a dynamic set of personal relationships, social networks, and communities of common interest. Through these networks, information about management actions and changes within the company often circulates rapidly, providing insight that may not be available through formal communication channels.
Moreover, the grapevine can serve as a critical source of social exchange and has a significant impact on the morale and camaraderie among employees. While it may at times carry gossip or unverified information, astute managers leverage the grapevine to informally communicate important news, understand employee sentiments, and indirectly gauge the reaction to potential changes. The strength of informal networks often plays a pivotal role in the organizational culture and can impact decision-making processes and outcomes within the company.
However, individuals should strive to share information on a need-to-know basis, get to know their peers, and avoid engaging in negative gossip or spreading rumors that might harm the workplace environment. Ultimately, understanding and navigating the informal networks can be beneficial for career development and fostering a positive workplace culture.
E21-6 (L04) EXCEL (Lessor Entries; Sales-Type Lease) Crosley Company, a machinery dealer, leased a machine to Dexter Corporation on January 1, 2017. The lease is for an 8-year period and requires equal annual payments of $35,013 at the beginning of each year. The first payment is received on January 1, 2017. Crosley had purchased the machine during 2016 for $160,000. Collectibility of lease payments is reasonably predictable, and no important uncertainties surround the amount of costs yet to be incurred by Crosley. Crosley set the annual rental to ensure an 11% rate of return. The machine has an economic life of 10 years with no residual value and reverts to Crosley at the termination of the lease.
Answer:
all transaciton made at the moment the lease begins.
lease receivables 200,001.13 debit
sales revenues 200,001.13 credit
cost of good sold 160,000 debit
inventory 160,000 credit
cash 35,013 debit
lease receivables 35,013 credit
Explanation:
Present value of the lease payments
[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
C 35,013.00
time 8
rate 0.11
[tex]35013 \times \frac{1-(1+0.11)^{-8} }{0.11} = PV\\[/tex]
PV $200,001.1278
The company will delcare this interest receivables and recognize the sales reveneue
It will also recognize the cost of good sold and decrease in inventory (it is equipment for the lessee but inventory for the lessor)
Then for each payment will recognzie a portion of interest revenue and decrease the lease receivables As the payment is at the beginning there is not interest revenue
Complete the following sentences. _______ pricing is setting a low price to drive competitors out of business with the intention of setting a monopoly price when the competition has gone.
A. Pillaging B. Predacious C. Piratical D. Predatory
The first firm to be accused of this practice was _______.
A. Standard Oil B. General Mills C. Microsoft D. Coca-Cola
Answer: The correct answers are "D. Predatory" and "A. Standard Oil".
Explanation: Predatory pricing is setting a low price to drive competitors out of business with the intention of setting a monopoly price when the competition has gone.
The first firm to be acused of this practice was Standard Oil.
Predatory prices consist of a pricing strategy that can be used by a predominant firm in the market in order to eliminate its competitors and thus secure the market monopoly. It's about reducing prices below cost.
Standard oil was the first company accused of this practice in 1958.
Palmona Co. establishes a $310 petty cash fund on January 1. On January 8, the fund shows $217 in cash along with receipts for the following expenditures: postage, $38; transportation-in, $13; delivery expenses, $15; and miscellaneous expenses, $27. Palmona uses the perpetual system in accounting for merchandise inventory.
Prepare journal entry to establish the fund on January 1, reimburse it on January 8, and reimburse the fund and increase it to $330 on January 8, assuming no entry in part 2
The journal entries include one to establish the petty cash fund on January 1st, another to reimburse it for expenditures on January 8th, and finally, an entry to increase the fund to $330 also on January 8th.
Establishing the Fund:
January 1st:
Petty Cash 310
Cash 310
To establish petty cash fund.
Reimbursing the Fund:
January 8th:
Postage Expense 38
Transportation-In Expense 13
Delivery Expenses 15
Miscellaneous Expenses 27
Cash Over and Short 3
Cash 217
(To reimburse petty cash for expenses: 38+13+15+27 = 93, and 310 - 93 - 217 = 0. Cash over and short is for balancing the entry)
Increasing the Fund:
Still on January 8th:
Petty Cash 20
Cash 20
(To increase the petty cash fund to 330)
Your company just bought a new distillation unit for $175,000 to be used for research and development. Such equipment has a 3-year MACRS classification. The MACRS percentages are 33.33 percent, 44.44 percent, 14.82 percent, and 7.41 percent, respectively. What is the book value of the distillation unit at the end of year 2?A) $12,968.00B) $38,902.50C) $49,833.50D) $77,770.00E) $116,673.50
Answer:
B) $38,902.50
Explanation:
The MACRS percentages are
First year = 33.33 percent
Second year = 44.44 percent
Third year = 14.82 percent
Fourth year = 7.41 percent
First Year 33.33% = $175,000 * 33.33/100 = $116,672.50
Second Year 44.44% = $116,672.50 - ($175,000 * 44.44/100)
= $116,672.50 - $77,770.00 = $38,902.50
On October 1, 2018, Equipment Suppliers Company made a loan to one of its customers. The customer signed a 4-month note for $110,000 at 13%. How much interest revenue did the company record in the year 2018? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
Answer:
$3,575
Explanation:
The computation of the interest revenue recorded in the year 2018 is shown below:
= Principal × rate of interest × number of months ÷ (total number of months in a year)
= $110,000 × 13% × (3 months ÷ 12 months)
= $3,575
The three months is calculated from October 1 , 2018 to December 31, 2018
We assume the books are closed on December 31, 2018
Final answer:
The Equipment Suppliers Company would record approximately $4,767 as interest revenue for the year 2018 on the 4-month note for $110,000 at a 13% annual interest rate.
Explanation:
To calculate the interest revenue recorded by the Equipment Suppliers Company for the year 2018, we need to use the simple interest formula:
I = PRT
where:
I is the interest
P is the principal amount ($110,000)
R is the annual interest rate (13% or 0.13)
T is the time in years
Since the note is for 4 months, the time in years (T) is 4/12 or 1/3 of a year. We'll now calculate the interest:
I = $110,000 × 0.13 × (4/12)
First, calculate the product of the principal and the annual interest rate:
$110,000 × 0.13 = $14,300
Then multiply the result by the time factor:
$14,300 × (4/12) = $14,300 × 1/3 ≈ $4,766.67
The interest revenue recorded in 2018 would be approximately:
$4,767 (rounded to the nearest dollar)
An economy’s relationship between short-run equilibrium output and inflation (its aggregate demand curve) is described by the equation: Y = 13,000 – 20,000π. Initially, the inflation rate is 4 percent, or π = 0.04. Potential output Y* equals 12,000.
a. The short-run equilibrium output is_____________ .
b. The rate of inflation at the long-run equilibrium is _____________.
Answer:
(a) 12,200
(b) 5%
Explanation:
(a) Y = 13,000 - 20,000 (.04)
Y = 13,000 - 800
Y = 12,200
Therefore, the short run equilibrium output is 12,200.
(b) Y = 13,000 - 20,000π
Substituting the value of y* by 12,000
12,000 = 13,000 - 20,000π
20,000π = 13,000 - 12,000
π = (1,000 ÷ 20,000 ) × 100
π = 0.05 or 5 %
Therefore, the rate of inflation at the long-run equilibrium is 5%.
The short-run equilibrium output is 12,200, found by substituting the given inflation rate into the aggregate demand equation. The rate of inflation at the long-run equilibrium is 5%, which keeps the output at its potential level.
Explanation:To find the short-run equilibrium output, we substitute the initial inflation rate π = 0.04 into the aggregate demand curve equation, Y = 13,000 - 20,000π. This yields:
Y = 13,000 - 20,000(0.04) = 13,000 - 800 = 12,200.
For part b, since the long-run equilibrium output is at the potential output level, and in the long run, the aggregate supply curve is vertical, changes in inflation do not affect the output. Therefore, the economy produces at its potential regardless of the rate of inflation. In the equation Y = 13,000 - 20,000π, for Y to be equal to the potential output Y* of 12,000, π must be:
12,000 = 13,000 - 20,000π → 20,000π = 13,000 - 12,000 → 20,000π = 1,000 → π = 1,000 / 20,000 = 0.05 or 5%
This means the rate of inflation at the long-run equilibrium is 5%.
A study finds that during blizzards, online sales are highly associated with the number of snow plows on the road; the more plows, the more online purchases. The director of an association of online merchants suggests that the organization should encourage municipalities to send out more plows whenever it snows because, he says, that will increase business. Comment on the director's conclusion.
Answer:A snow plow helps to clear the road of snow after a snow downpour, while online purchases are transactions conducted through internet services.
The Director conclusion that municipality should send more plows to increase sales is not valid for the two situation are exclusive of each other the number of plows does not determine the number of online sales, plows are used naturally to clear the snow but it's the blizzards that prevents people to physically visits stores and rather prefers to order online.
So it can be concluded that period of blizzards increases online transactions and the online transactions is not dependent on plows on the streets.
Explanation:
.According to supply-side fiscal policy, reducing tax rates on wages and profits will:
a.Group of answer choices
b.reduce both unemployment and inflation.
c.create demand-pull inflation.
d.lower the price level but may trigger a recession.
e.result in stagflation.
Answer:
The answer is C.
Explanation:
Reducing tax rate according to supply - side policy creates demand pull inflation.
Demand pull inflation is a situation whereby people have more buying power due to the availability of cash thereby leading to high demand and consequentially leading to an increase in the price of goods and services by suppliers.
That is the process where demand outplays supply due to the high purchasing power thereby causing price to increase which is the demand pull inflation effect.
The Princeville Company placed five (5) orders for Product 12B from Brookston Corporation. Brookston has the following information about Product 12B: Activity Cost Pools Activity Rate Product 12B Activity Machine Setups $ 12.00 per Machine hour 40 MHs Customer Orders $ 10.00 per Order 5 Orders What is the overhead cost assigned to Princeville for their five (5) orders of Product 12B?
A. $480
B. $530
C. $2,650
D. $990
Answer:
B. $530
Explanation:
Please see attachment
Final answer:
The total overhead cost for Princeville's five orders of Product 12B is calculated by adding the costs of Machine Setups and Customer Orders, which amounts to $530. This is found by multiplying activity rates with the respective activities required and then summing them up. The correct option is b.
Explanation:
The overhead cost assigned to Princeville for their five (5) orders of Product 12B from Brookston Corporation can be calculated using the information about activity cost pools and activity rates. We have two types of costs to consider: Machine Setups and Customer Orders.
Machine Setups cost is $12.00 per machine hour, and for Product 12B, 40 machine hours (MHs) are required. Therefore, the total Machine Setups cost is 40 MHs times $12.00/MH, which equals $480.
Customer Orders cost is $10.00 per order, and since there were 5 orders, the total cost for this activity is 5 orders times $10.00/order, which equals $50.
Add the two costs together to get the total overhead cost for Princeville: $480 (Machine Setups) + $50 (Customer Orders) = $530.
Therefore, the correct answer is B. $530.
The ACC Tutoring Service provides tutoring to accounting students. The volume of tutoring is low at the beginning of the semester and increases before exams. ACC had its highest level of service in May when they provided 4,300 hours of tutoring at a total cost of $125,000 and it lowest level of service in January when they provided 1,500 hours of tutoring at a total cost of $55,000. Using the high-low method, the estimated fixed costs are
Answer:
Estimated fixed cost is $17,500.
Explanation:
Applying the high-low method, first, we calculated the variable cost per unit of the firm: ( 125,000 - 55,000) / (4,300 - 1,500) = $25 per tutoring hour.
We have : Total cost of a firm = Variable cost per tutoring hour x tutoring hour delivered + fixed cost.
put the number in the formula, using the high point ( using low point will also result in the same result of fixed cost), we have:
125,000 = 25 x 4,300 + fixed cost <=> Fixed cost = 125,000 - 25 x 4,300 = $17,500.
To estimate fixed costs using the high-low method, first calculate the variable cost per unit. Next, to find the fixed costs, subtract the total variable costs from the total costs. In this case, the estimated fixed costs are $17,500.
Explanation:The high-low method is a cost estimation technique used in managerial accounting. It's used to separate a mixed cost into its fixed and variable components. The first step in the high-low method is to calculate the variable cost per unit.
To do this, we subtract the total cost at the lowest activity level from the total cost at the highest activity level and divide by the difference in hours. Here, it's ($125,000 - $55,000) / (4,300 hours - 1,500 hours) = $70,000 / 2,800 hours = $25/hour. This is the variable cost per hour.
Next, to find the fixed costs, we need to subtract the total variable costs at either the high or low point from the total costs at that point. Using the high point, the total variable cost is 4,300 hours * $25/hour = $107,500. So, the total fixed costs are $125,000 - $107,500 = $17,500.
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The Guitar Shoppe reports the following sales forecast: August, $130,000; and September, $230,000. Total sales include 35% cash sales, 50% of credit sales collected in the month following sale, and the remaining 15% credit sales written off as uncollectible. Prepare a schedule of cash receipts for September.
Answer:
Total= $145,500
Explanation:
Giving the following information:
The Guitar Shoppe reports the following sales forecast: August, $130,000; and September, $230,000. Total sales include 35% cash sales, 50% of credit sales collected in the month following sale, and the remaining 15% credit sales written off as uncollectible.
Cash collection:
From August= (130,000*0.50)= 65,000
September= (230,000*0.35)= 80,500
Total= 145,500
Final answer:
The total cash receipts for the Guitar Shoppe in September include cash sales from September and 50% of August's credit sales, amounting to $122,750.
Explanation:
Schedule of Cash Receipts for September
To prepare the schedule of cash receipts for September, we need to consider the sales from August and September, respectively, and apply the company's policy regarding cash and credit sales. According to the shop's policy, 35% of sales are cash, and for the remaining 65% of sales that are on credit, 50% will be collected in the month following the sale, and 15% will be considered uncollectible.
August Sales:
$130,000
September Sales:
The total cash receipts for September include the cash sales from September and 50% of the credit sales from August. Therefore, the total cash receipts for September would be the sum of $80,500 and $42,250, which equals $122,750.
Consider an economy with two labor markets—one for manufacturing workers and one for service workers. Suppose initially that neither is unionized.
a. If manufacturing workers formed a union, what impact would you predict on the wages and employment in manufacturing?
b. How would these changes in the manufacturing labor market affect the supply of labor in the market for service workers? What would happen to the equilibrium wage and employment in this labor market?
Answer:
a. Wages increase but employment decreases.
b. Wages decreases and employment increases.
Explanation:
An economy has two separate labor markets, one for manufacturing workers and one for service workers. Neither of them is initially unionized.
a. If a union is formed in the market for manufacturing workers, this will increase wages in that market. This happens because the workers will be able to get their wages raised through collective bargaining.
As their wages increase, the supply of manufacturing workers will increase but their demand will decline as hiring workers will become costlier. This will create unemployment in the market for manufacturing workers.
b. The service's labor market is still not unionized. The unemployed workers from the manufacturing labor market will join the services labor market, seeking employment.
As the supply of labor increases in the service labor market, the supply curve will shift to the right. This rightward shift will cause their wages to decline. Employment in the services labor market will increase as it becomes cheaper to hire more workers.
A. If the people shgould form a union here, the impact of such union is that it may lead to higher wages but reduction in the number of workers.
What is a union?In the labor market, the trade union is a group of organized workers that aim to have better situations for the members of the union in terms of labor.
b. The changes made by tghe people is going to increase the supply of labor that is in the economy.
This would cause the equilibrium wage and employment in the country to fall.
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Art, Inc., has 5,000 shares of 4%, $100 par value, cumulative preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31, 2018. There were no dividends declared in 2016. The board of directors declares and pays a $45,000 dividend in 2017 and in 2018. What is the amount of dividends received by the common stockholders in 2018?
$25,000
$20,000
$45,000
$0
Answer:
Dividend paid to Common Stockholders = $25000
so correct option is a. $25,000
Explanation:
given data
shares outstanding = 5,000
Par value = $100
Dividend Rate = 4%
common stock outstanding = 20,000 shares
par value = $1
dividend = $45,000
to find out
What is the amount of dividends received by the common stockholders in 2018
solution
first we get here Value of Preferred Stock that is express as
Value of Preferred Stock = Number of shares outstanding × Par value ....................1
put here value we get
Value of Preferred Stock is = 5,000 × $100
Value of Preferred Stock is = $500,000
and
Annual Dividend will be here
Annual Dividend = Value of Preferred Stock × Dividend Rate .........................2
put here value we get
Annual Dividend = $500,000 × 4%
Annual Dividend = $20,000
and
so as for 2017 Dividend paid is here as
Dividend paid to Preferred Stockholders = for 2016 + for 2017
Dividend paid to Preferred Stockholders = $20,000 + $20,000 = $40000
so Dividend paid to Common Stockholders = $45000- $40000 = $5000
and
for 2018 Dividend paid is here as
Dividend paid to Preferred Stockholders is = $20,000 for the 2018
so
Dividend paid to Common Stockholders will be = $45000 - $20000
Dividend paid to Common Stockholders = $25000
so correct option is a. $25,000
A firm that has total fixed costs of $20,000 sells its output for $150 per unit and has an average variable cost of $200. If the firm's cost and revenue curves are linear, how much output must the firm produce to break even?
(A) The firm cannot break even.
(B) 300
(C) 500
(D) 400
Answer:
A) the firm cannot breakeven.
Explanation:
Break even point is the point where the company make neither a loss nor profit (i.e. a point where profit is zero).
Break even is computed as Totatl fixed cost/Contribution Margin (ratio).
Contribution margin can be calculated as Sales - Variable Cost (Note that this can be calculated per unit or in total).
In this scenario, the contribution per unit = $150-$200 = -$50 (This means that on every one unit, the company is making a loss contribution margin.
And since the revenue and cost curve is linear (i.e. on a straight line) the loss contribution will continously be made. Hence the company can never break even.
Do It! Review 9-1 Pharoah Company purchased a delivery truck. The total cash payment was $43,222, including the following items. Negotiated purchase price $34,200 Installation of special shelving 2,810 Painting and lettering 830 Motor vehicle license 260 Annual insurance policy 3,070 Sales tax 2,052 Total paid $43,222 Calculate the cost of the delivery truck. The cost of the delivery truck $enter the cost of the delivery truck in dollars.
Answer:
$39,892
Explanation:
The computation of the cost of the truck is shown below:
= Negotiated purchase price of the delivery truck + Installation cost of special shelving + Painting and lettering cost + Sales tax
= $34,200 + $2,810 + $830 + $2,052
= $39,892
The motor vehicle license and the annual insurance policy is an annual cost expense which is not considered for computing the cost of the delivery truck. Hence, ignored it
O’Dell Vegetables purchased a harvesting machine on July 1, 2016, for $984,000. The machine was estimated to have a useful life of 8 years with an estimated salvage value of $140,000. O’Dell uses the straight-line method of depreciation. During 2019, it became apparent that the machine would become uneconomical after December 31, 2023, and that the machine would have no scrap value. What should be the charge for depreciation in 2019 under generally accepted accounting principles?
Answer:
Depreciation expense in 2019 is $144,050
Explanation:
O’Dell Vegetables uses the straight-line method of depreciation, Depreciation Expense each year is calculated by following formula:
Depreciation Expense = (Cost of machine − Salvage Value )/Useful Life
From July 1, 2016 to 2018:
Annual Depreciation Expense = ($984,000 - $140,000)/8 = $105,500
Depreciation Expense in 2016 = $105,500x6/12 = $52,750
Accumulated Depreciation (end 2018) = $52,750 + $105,500 + $105,500 = $263,750
From 2019, the machine would become uneconomical after December 31, 2023:
Salvage Value = 0 and Remaining useful life = 5 year
Depreciation Expense = (Historical Cost - Accumulated Depreciation - Salvage Value) / Remaining Useful Life = ($984,000-$263,750-0)/5 = $144,050
Depreciation in 2019 is $144,050
Colt Company owns a machine that can produce two specialized products. Production time for Product TLX is three units per hour and for Product MTV is four units per hour. The machine’s capacity is 2,100 hours per year. Both products are sold to a single customer who has agreed to buy all of the company’s output up to a maximum of 3,570 units of Product TLX and 4,000 units of Product MTV. Selling prices and variable costs per unit to produce the products follow. $s per unit Product TLX Product MTV Selling price per unit $ 12.50 $ 7.50 Variable costs per unit 3.75 4.50 Determine the company's most profitable sales mix and the contribution margin that results from that sales mix. (Round cost per unit answers to 2 decimal places.)
The sales mix that the corporation finds to be the most lucrative has a contribution margin of $13,412.5. Understanding profit margin, which is calculated as the product's profit divided by the sale price, is the key to understanding the sales mix. In order to understand your sales mix, you can then compare the profit margins of various goods.
Given
Maximum units of Product TLX = 3,570 units
Maximum units of Product MTV = 4,000 units
Machine capacity = 2,100 hours per year
Production time for Product TLX = 3 units per hour
Production time for Product MTV = 4 units per hour
Required to calculate the most profitable sales mix and the contribution margin that results from that sales mix =?
Product TLX Product MTV
Selling Price $12.50 $7.50
Variable Cost $3.75 $5
Contribution $8.75 $3.00
Unit Per hour 3 4
Max. Unit 3570 4000 Total
Max.Hour Req. 1190 1000 2190
Profitable Sale mix (Units)1190 910 2100
Contribution margin $8.75 $3.00
Total Cont. Margin $10,412.50 $2,730.00 $13,142.50
Therefore, the company's most profitable sales mix and the contribution margin that results from that sales mix is $13,412.5.
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Final answer:
The most profitable sales mix for Colt Company involves prioritizing the production of Product TLX, which has a higher contribution margin ($8.75 per unit) than Product MTV ($3.00 per unit), up to the customer's maximum purchase quantity followed by producing Product MTV with any remaining capacity.
Explanation:
Most Profitable Sales Mix and Contribution Margin Calculation
To determine the most profitable sales mix for Colt Company, we need to compare the contribution margins of Product TLX and Product MTV. The contribution margin per unit is calculated by subtracting the variable cost per unit from the selling price per unit. For Product TLX, the contribution margin is $12.50 - $3.75 = $8.75 per unit. For Product MTV, the contribution margin is $7.50 - $4.50 = $3.00 per unit.
Given that the machine has a capacity of 2,100 hours per year, we can calculate the maximum production for both products while respecting the customer's maximum purchase quantities. For Product TLX: 2,100 hours/year * 3 units/hour = 6,300 units. For Product MTV: 2,100 hours/year * 4 units/hour = 8,400 units.
To maximize profits, Colt Company should prioritize production of the product with the higher contribution margin, which is Product TLX. However, the customer will only buy up to 3,570 units of Product TLX. Once this quantity is reached, the company should use the remaining machine capacity to produce Product MTV. We can calculate the total contribution margin by multiplying the units sold by their respective contribution margins and adding them together. This yields the most profitable sales mix while respecting the customer's limits and machine capacity.
The exact numbers for the most profitable mix and resulted contribution margin will vary based on how many hours are allocated to each product's production, with the guiding principle being to utilize all available hours while respecting the demand ceiling for both products.
Suppose that a chicken farm uses a nearby stream to dispose of the wastes released by its chickens. These wastes flow downstream into a lake that has become thick with algae and polluted due to the minerals in the waste matter. The local office of a nonprofit environmental organization collects enough donations to stop the farm's pollution. Which of the following types of private solutions to the externality of pollution has occurred in this case? a. contracts b. Moral codes and social sanctions c. Integration of different types of businesses through merger or acquisition d. Charities It’s important to note that sometimes private solutions to externalities do not work. For example, this occurs when one party repeatedly holds out for a better deal. This describes the problem of (transaction cost, breakdown in bargaining, property held in common)
Answer:
The answer is letter D.
Explanation:
Charities. It’s important to note that sometimes private solutions to externalities do not work. For example, this occurs when one party repeatedly holds out for a better deal. This describes the problem of (transaction cost, breakdown in bargaining, property held in common)
The charitable actions of a local nonprofit organization represent a private solution to the externality of pollution caused by a chicken farm. This solution falls under the category of charities. The problem of one party holding out for a better deal causing a breakdown in bargaining relates to high transaction costs.
The solution to the chicken farm's pollution of the nearby stream and lake in this scenario represents a form of a charitable action to mitigate a negative externality. The local nonprofit environmental organization collected donations to stop the farm's pollution, which aligns with the concept of charities helping to fight behaviors resulting in negative externalities. Charities establish a private solution by using private funding to address externalities without requiring government intervention.
When discussing why sometimes private solutions to externalities do not work, the problem described is referred to as a breakdown in bargaining. A breakdown occurs when one party holds out for a better deal, resulting in increased transaction costs or difficulties in reaching an efficient solution to the externality.
Which of the following statements concerning ideal standards is incorrect?
Group of answer choices
A. Ideal standards generally do not provide the best motivation for workers
B. Ideal standards do not make allowances for waste, spoilage, and machine breakdowns
C. Ideal standards are better suited for cash budgeting than practical standards
D. Ideal standards may be better than practical standards when managers seek continual improvement
Answer:
C. Ideal standards are better suited for cash budgeting than practical standards
Explanation:
The standards that basically handles no work interruptions or no machine breakdown is called ideal standards.
Henry Crouch's law office has traditionally ordered ink refills 70 units at a time. The firm estimates that carrying cost is 40% of the $11 unit cost and that annual demand is about 245 units per year. The assumptions of the basic EOQ model are thought to apply. For what value of ordering cost would its action be optimal? a) For what value of ordering cost would its action be optimal? Its action would be optimal given an ordering cost of $ nothing per order (round your response to two decimal places). b) If the true ordering cost turns out to be much less than your answer to part (a), what is the impact on the firm's ordering policy?
The EOQ model is used to find the optimal order quantity that minimizes total inventory costs. By substituting the known values into the EOQ equation, we can find the optimal ordering cost. If the actual ordering cost is less, the firm should order frequently in smaller quantities to lessen total inventory costs.
Explanation:The Economic Order Quantity (EOQ) model can be used to determine the optimal order quantity that minimizes total inventory costs. The EOQ formula is: EOQ = √((2DS)/H) where D is the demand rate, S is the ordering cost (optimal value that we need to find), and H is the annual holding and storage cost per unit.
In your case, D = 245 units, H = $4.4 (40% of the $11 unit cost). Substituting the known values into the equation, we get: 70 = √((2*245*S)/4.4). By solving for S, we find the optimal ordering cost that makes ordering 70 units at a time the best strategy.
If the actual ordering cost is less than this calculated optimal cost, the firm can benefit from ordering more frequently in smaller quantities. It will reduce total inventory costs because lesser capital will be tied up in inventory, reducing holding costs.
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The EOQ model suggests an optimal order size for minimizing inventory costs considering the ordering cost, demand rate and holding costs. If the cost of placing orders is significantly lower than estimated, the firm could adjust its ordering policy to order more frequently in smaller batches to reduce carrying costs.
Explanation:The Economic Order Quantity (EOQ) model can be helpful in determining the volume and frequency of orders a firm should make to minimize its inventory costs. The model dictates that the optimal order size, given the assumptions of constant demand, constant lead time and no stockouts, will result in the lowest total inventory cost.
The EOQ is calculated as Square Root of (2DS/H) where:
D represents demand in units (given as 245 units per year)S is the setup costs or ordering costs (unknown in this scenario)H is the holding costs per unit, per year (calculated as 40% of the $11 unit cost)The firm traditionally orders 70 units. If this is indeed the optimal order size, the ordering cost, S, can be found by rearranging the EOQ formula to solve for S and substituting the provided values into the formula.
If the true ordering cost turns out to be much less than estimated, the firm may find it optimal to order in smaller, more frequent batches to minimize holding costs. The lower ordering costs would mean frequent orders would not be as costly, and thus, the firm might keep less stock on hand at any given time, reducing their carrying costs.
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With a plan for Caffè Gustoso's website in place, you turn your attention to online advertising. Although the choices seem endless, Caffè Gustoso's small budget requires that you limit your spending as much as possible. You narrow your list down to your top three online advertising choices: search advertising, online display (banner) ads, and website sponsorship. Which form of online advertising would be most useful for driving traffic to Caffè Gustoso's new locations?
Answer:
Online displays (banner) ads
Explanation:
This has the potential to appear to any website user in an unsolicited manner
Russell Corporation sold a parcel of land valued at $440,000. Its basis in the land was $294,800. For the land, Russell received $121,500 in cash in year 0 and a note providing that Russell will receive $229,000 in year 1 and $89,500 in year 2 from the buyer (plus reasonable interest on the note). (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)
a. What is Russell’s realized gain on the transaction?
b. What is Russell’s recognized gain in year 0, year 1, and year 2?
Year 0
Year 1
Year 2
Answer:
Please see attachment
Explanation:
Please see attachment
Final answer:
The realized gain on the sale of the land is $145,200. The recognized gain for Russell Corporation in year 0 is $40,068, in year 1 is $75,145, and in year 2 is $29,987. These calculations are based on the installment payments received each year as a proportion of the total sale price.
Explanation:
Realized and Recognized Gain Calculation
The student is asking about the realized and recognized gain from a real estate transaction for Russell Corporation. To find the realized gain, we subtract the basis of the land from the amount Russell will receive from the sale. The total amount Russell will receive is the sum of the cash and note payments: $121,500 (year 0) + $229,000 (year 1) + $89,500 (year 2) = $440,000. Since the land's basis was $294,800, the realized gain is $440,000 - $294,800 = $145,200.
For recognized gain, we consider the amount of money actually received each year. In year 0, Russell received $121,500, but since the full gain cannot be realized until all payments are received (considering the installment sale method), the recognized gain in year 0 is a proportion of the total gain. This is calculated as ($121,500 / $440,000) * $145,200 = $40,068. Similarly, the recognized gain in year 1 is ($229,000 / $440,000) * $145,200 = $75,145, and in year 2, ($89,500 / $440,000) * $145,200 = $29,987.
Each year's recognized gain reflects the installment received that year as a proportion of the total sale price, applied to the total realized gain.
You’ve just received a complaint from your best customer that her set of 50 new sensors is overheating and she wants her money back or a significant reduction in the cost. You showed her email to your boss who remarked, "Well, that’s not covered under the service-agreement and she’s beyond 90 days for returns. We can’t be responsible for customers who abuse the products without regard for proper use as stated clearly in the manual."
How would you best characterize this situation?
a)This is an ethical dilemma because it’s quite possible the customer will sue the company over this issue.
b)This is an ethical dilemma because both the customer and the company have legitimate concerns.
c)This is not an ethical dilemma because both proper use and return policies are clearly stated.
d)This is not an ethical dilemma because the customer has free will and was under no obligation to buy from this particular company.
Answer:
The correct answer is letter "B": This is an ethical dilemma because both the customer and the company have legitimate concerns.
Explanation:
An ethical dilemma is situation that entails an apparent mental conflict between moral legitimate concerns, in which one would transgress another. These concerns can be refuted in different ways, for instance by showing that the alleged ethical dilemma is only apparent and does not actually exist, or that the solution to the ethical dilemma involves choosing the greater good and the lesser evil.