Answer:
1. What was the issue price on January 1 of this year?
since the coupon rate was 6% and the market rate was the same, the bonds will be sold at par, so their issue price = $240,000
2. What amount of interest expense should be recorded on June 30 and December 31 of this year?
interest expense = coupon rate = $7,200 (for both June 30 and December 31)
3. What amount of cash is owed to investors on June 30 and December 31 of this year?
Face value = $240,000
4. What is the book value of the bonds on December 31 of this year, December 31 of next year?
Face value = $240,000
The issue price is $240,000, interest expenses will be $7,200 each time. the company owes the investor the interest and the book value is $240,000.
What is face value?Face value is the original cost with which the shares are shown/ registered on the stock exchange. It is the amount that the company has to pay to the holder of the bonds in maturity, it is the par value for bonds.
1. The issue price of 6% coupon rate bonds is $240,000.
2. The amount of interest expense that should be recorded on June 30 and December 31
$240,000 X 6%=$14,400annually
but it is paid semi-annually so=$14,400/2= $7,200 for each time
3. The amount owed to the investor by the company will be the interest amount i.e $7,200 each on June 30 and December 31.
4. The book value of the bond will be the face value for which it was issued i.e $240,000.
Therefore the above statements aptly explain the facts.
Learn more about face value here:
https://brainly.com/question/14294215
When is the only time to abbreviate on a job application?
Question 3 options:
In the Personal Information section
In the Position & Availability section
Only when space is limited
Signature section
Current Attempt in Progress
Cullumber Company entered into these transactions during May 2022, its first month of operations.
1. Stockholders invested $42,500 in the business in exchange for common stock of the company.
2. Purchased computers for office use for $31,900 from Ladd on account.
3. Paid $2,900 cash for May rent on storage space.
4. Performed computer services worth $17,900 on account.
5. Performed computer services for Wharton Construction Company for $5,400 cash.
6. Paid Western States Power Co. $8,300 cash for energy usage in May.
7. Paid Ladd for the computers purchased in (2).
8. Incurred advertising expense for May of $1,600 on account.
9. Received $14,000 cash from customers for contracts billed in (4).
Create a tabular analysis, show the effect of each transaction on the accounting equation. Put explanations for changes to Stockholders' Equity in the far right column. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.)
Answer:
Assets = Liabilities + Stockholders' Equity = $68,600
Explanation:
Note: See the attached excel file for the tabular analysis of the effect of each transaction on the accounting equation.
From the attached excel file, we have:
Assetes = Total assets balance = = $18,800 + $17,900 + 31,900 = $68,600
Liabilities = Total liabilities balance = $1,600
Stockholders' Equity = Total Common Stock balance + Total Net Income balance = $42,500 + $25,500 = $67,000
Liabilities + Stockholders' Equity = $1,600 + $67,000 = $68,600
Therefore, we have:
Assets = Liabilities + Stockholders' Equity = $68,600
The Razooks Company, which manufactures office equipment, is ready to introduce a new line of portable copiers. The following copier data are available:
Variable manufacturing cost $195
Applied fixed manufacturing cost 105
Variable selling and administrative cost 75
Allocated fixed selling and administrative cost 90
1) What price will the company charge if the firm uses cost-plus pricing based on variable manufacturing cost and a markup percentage of 210%?
a) $409.50.
b) $567.00.
c) $604.50.
d) $672.00.
e) None of these.
2) What price will the company charge if the firm uses cost-plus pricing based on total variable cost and a markup percentage of 165%?
a) $163.64.
b) $445.50.
c) $433.64.
d) $715.50.
e) None of these.
3) What price will the company charge if the firm uses cost-plus pricing based on absorption manufacturing cost and a markup percentage of 120%?
a) $594.00.
b) $825.00.
c) $660.00.
d) $850.22.
e) None of these.
Answer:
Results are below.
Explanation:
Giving the following information:
Variable manufacturing cost $195
Applied fixed manufacturing cost 105
Variable selling and administrative cost 75
Allocated fixed selling and administrative cost 90
1)
Unitary variable cost= $195
Selling price= 195*2.1
Selling price= $409.5
2)
Total variable cost= 195 + 75= $270
Selling price= 270*1.65
Selling price= $445.5
3)
The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.
Total absorption cost= 195 + 105= $300
Selling price= 300*1.2
Selling price= $360
Each service starts on a different date because the services depend on each other. Enter the starting dates for the remaining services as follows:
a. In cell D6, enter a formula without using a function that adds 4 days to the value in cell 06.
b. In cell E6, enter a formula without using a function that subtracts 3 days from the value in cell C6
c. In cell F6, enter a formula without using a function that adds 2 days to the value in cell E6
d. In cell G6, enter a formula without using a function that adds 2 days to the value in cell C6.
Answer:
a. Copy the range of cell D7:D9 then select cell D6 and paste the selection with date format selected. The function will be represented in formula bar with adding +4;365 days.
b. Copy the range of cell D7:D9 then select cell D6 and paste the selection with date format selected. The function will be represented in formula bar with adding -3;365 days.
c. In the formula bar type =365 days; +2 : E6
d. In the formula bar type =365 days ; +2 : C6
Explanation:
Excel is a software which helps the users to easily calculate complex calculation with just one function input. The users can create worksheets using the excel and then link those worksheets with each other. The data can be displayed in the form of table or simple text. It has multiple options to create annual day wise filtered worksheets.
All of the following are organization-directed benefits associated with offering unconditional guarantees except: a. the guarantee provides a means to avoid bankruptcy. b. the guarantee forces the firm to focus on the customer's definition of good service. c. offering the guarantee forces the firm to examine its entire service delivery system for failure points. d. the guarantee can be a source of pride and provide a motive for team building within the firm. e. the guarantee states a clear performance goal that is communicated to employees.
Answer:
All of the following are organization-directed benefits associated with offering unconditional guarantees except:
a. the guarantee provides a means to avoid bankruptcy.
Explanation:
Providing or offering customers unconditional guarantees does not help the company to avoid bankruptcy. Bankruptcy arises from inadequate financing resulting from overtrading. Importantly, offering guarantees to customers communicates a clear performance goal to employees to improve service delivery to customers.
A machine purchased three years ago for $306,000 has a current book value using straight-line depreciation of $190,000; its operating expenses are $38,000 per year. A replacement machine would cost $222,000, have a useful life of eleven years, and would require $10,000 per year in operating expenses. It has an expected salvage value of $76,000 after eleven years. The current disposal value of the old machine is $86,000; if it is kept 11 more years, its residual value would be $10,000. Required Calculate the total costs in keeping the old machine and purchase a new machine. Should the old machine be replaced
Answer:
A. Total Cost Old machine $424,000
Total Cost New machine $256,000
B. Yes
Explanation:
A..Calculation to determine the total costs in keeping the old machine and purchase a new machine.
OLD MACHINE NEW MACHINE
Opportunity cost/Purchase value=
(86,000-10,000) = $76,000 (222,000-76,000) = $146,000
Operating cost
(38,000*11) = 348,000 (10,000*11) = 110,000
Total Cost $424,000 $256,000
Old machine=($76,000+348,000=$424,000)
New machine=($146,000+$110,000=$156,000)
Therefore the total costs in keeping the old machine is $424,000 and purchasing a new machine is $256,000
2. Yes based on the above calculation the old machine should be replaced as the cost is higher.
Park Co. is considering an investment that requires immediate payment of $27,215 and provides expected cash inflows of $8,400 annually for four years. Assume Park Co. requires a 8% return on its investments. 1-a. What is the net present value of this investment
Answer:
the net present value is $606.64
Explanation:
The computation of the net present value is shown below:
But before that the present value of annual cash inflows is to be determined i.e.
Present value = annual cash flows × PVIFA(8%,4years)
= $8,400 × 3.3121
= $27,821.64
Now
Net present value = Present value of cash flows - initial investment
= $27,821.64 - $27,215
= $606.64
Hence, the net present value is $606.64
According to the standard cost card, each helmet should require 0.52 kilograms of plastic, at a cost of $8.00 per kilogram. Required: 1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 3,400 helmets? 2. What is the standard materials cost allowed (SQ × SP) to make 3,400 helmets? 3. What is the materials spending variance? 4. What is the materials price variance and the materials quantity variance?
Answer:
Please find the complete question in the attached file and its solution can be defined as follows:
Explanation:
The standard kgs permitted[tex]= 3100 \times 0.62 = 1922[/tex]
Current production Standard cost permitted [tex]=1922\times 7= 13454[/tex]
Variance of materials for expenditure [tex]= 13708-13454= 254 \ \ \ U[/tex]
Outlined various of materials [tex]= 13708-(2077\times 7)= 831 \ \ \ F[/tex]
Variability of additional channel [tex]= 7\times (2077-1922)= 1085\ \ \ U[/tex]
What would it cost an insurance company to replace a family's personal property that originally cost $25,000? The replacement costs
for the items have increased 15 percent.
Answer:
the replacement cost is $28,750
Explanation:
The computation of the replacement cost is shown below:
= Cost of the personal property × (1 + increased percentage)
= $25,000 × (1 + 0.15)
= $25,000 × 1.15
= $28,750
Hence, the replacement cost is $28,750
We simply applied the above formula so that the correct value of the replacement cost could come
Morris Company applies overhead based on direct labor costs. For the current year, Morris Company estimated total overhead costs to be $452,000, and direct labor costs to be $2,260,000. Actual overhead costs for the year totaled $419,000, and actual direct labor costs totaled $1,930,000. At year-end, the balance in the Factory Overhead account is a: Multiple Choice $452,000 Credit balance. $386,000 Debit balance. $33,000 Debit balance. $33,000 Credit balance. $419,000 Debit balance.
Answer:
As overhead was underapplied, the balance in overhead will be $33,000 credit.
Explanation:
First, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 452,000 / 2,260,000
Predetermined manufacturing overhead rate= $0.2 per direct labor dollar
Now, we can allocate costs:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 0.2*1,930,000
Allocated MOH= $386,000
Finally, we determine the over/under allocation:
Under/over applied overhead= real overhead - allocated overhead
Under/over applied overhead= 419,000 - 386,000
Underapplied overhead= $33,000
As overhead was underapplied, the balance in overhead will be $33,000 credit.
7x+5=80 please help pleaseeeeee
Satka Fishing Expeditions, Inc., recorded the following transactions in July
1. Provided an ocean fishing expedition for a credit customer, payment is due August 10
2. Paid Marine Service Center for repairs to boats performed in June. (In June, Satka Fishing Expeditions, Inc., had received and properly recorded the invoice for these repairs.)
3. Collected the full amount due from a credit customer for a fishing expedition provided in June.
4. Recelved a bill from Baldy's Bait Shop for bait purchased and used in July. Payment is due August 3
5. Purchased a new fishing boat on July 28, paying part cash and issuing a note payable for the balance. The new boat is first scheduled for use on August 5
6. Declared and paid a cash dividend on July 31
Indicate the effects that each of these transactions will have upon the following six total amounts in the company's financial statements for the month of July.
Choose I for increase, D for decrease, and NE for no effect in the column headings below to show the effects of the above transactions.
Answer:
Satka Fishing Expeditions, Inc.
Indication of the effects that each of these transactions will have upon the following six total amounts in the company's financial statements for the month of July:
Transaction Income Statement Balance Sheet
Revenue - Expenses = Net Income Assets = Liabilities + Equity
1. I NE I I I
Accounts Receivable and Sales Revenue
2. NE NE NE D D NE
Accounts Payable and Cash
3. NE NE NE NE (I and D) NE NE
Cash and Accounts Receivable
4. NE I D NE I D
Supplies Expenses and Accounts Payable
5. NE NE NE I/D I NE
Boat Purchased, Cash and Note Payable
6. NE NE D NE NE D
Retained Earnings and Cash
Explanation:
a) Data and Transaction Analysis:
1. Accounts Receivable and Sales Revenue
2. Accounts Payable and Cash
3. Cash and Accounts Receivable
4. Supplies Expenses and Accounts Payable
5. Boat Purchased, Cash and Note Payable
6. Retained Earnings and Cash
b)
Key:
I = increase
D = decrease
NE = no effect
No. 3 will increase the assets (cash) by the amount and decrease the assets (accounts receivable) by the same amount. Overall, there will be no effect as the increase cancels the decrease equally.
Activity 1 Explain the importance of giving accurate information to customers.
Jacob Suppliers has not paid out any dividend in the last three years. It does not expect to pay dividends in the next two years either as it recovers from an economic slowdown. Three years from now it expects to pay a dividend of $1.75 and then $2.80 in the following two years. What is the present value of the dividends to be received over the next five years if the discount rate is 14.5 percent
Answer:
3.78
Explanation:
Javier is a department manager at a big box store. Over the last month, sales have slumped, and he has lots of inventory going unsold. Now it’s time to put in his orders to restock for next month. a. How, if at all, should Javier adjust his orders for new products? Javier should place his orders according to his initial estimates. The inventory buildup is not an equilibrium. Javier should respond by cutting back on his orders. Javier should wait and see what happens next month, and if his inventory runs out, then he can place an order. b. How will his suppliers respond to this decision? They will produce according to their initial demand estimates. They will cut back on production. They will not be affected. They will expand their output. c. Most other businesses are experiencing a similar decline in sales. Which
Question Completion:
c. Most other businesses are experiencing a similar decline in sales. Which of the following are is likely to occur as a result of the decline in sales?
Aggregate expenditure will fall.
Aggregate expenditure will rise.
Output will not be affected, and eventually, sales will rise to bring the economy back to equilibrium.
Output will fall in response to the decline, as businesses adjust their production.
Answer:
a. How Javier should adjust his orders for new products:
The inventory buildup is not an equilibrium. Javier should respond by cutting back on his orders.
b. How the suppliers will respond to Javier's decision:
They will cut back on production.
c. The consequences of the decline in sales are:
Aggregate expenditure will fall.
Output will fall in response to the decline, as businesses adjust their production.
Explanation:
Aggregate Expenditure determines the total amount spent by firms and households on goods and services during a specific period of time. Inventory management is one of the duties of Javier at the department store. This involves ordering, warehousing, and processing inventory to achieve maximum customer satisfaction.
You are a financial analyst for Loch Motor Company and have been asked to determine the impact of alternative depreciation methods. For your analysis, you have been asked to compare methods based on a machine that cost $246,000. The estimated useful life is 10 years, and the estimated residual value is $62,000. The machine has an estimated useful life in productive output of 230,000 units. Actual output was 35,000 in year 1 and 31,000 in year 2.
Required:
For years 1 and 2 only, prepare separate depreciation schedules assuming:
a. Straight-line method.
b. Units-of-production method.
c. Double-declining-balance method.
Answer:
a. Straight-line method.
depreciable value = $246,000 - $62,000 = $184,000
deprecaition expense per year = $184,000 / 10 = $18,400
year depreciation expense book value
1 $18,400 $227,600
2 $18,400 $209,200
b. Units-of-production method.
depreciable value = $246,000 - $62,000 = $184,000
deprecaition expense per unit = $184,000 / 230,000 = $0.80
year depreciation expense book value
1 $28,000 $218,000
2 $24,800 $193,200
c. Double-declining-balance method.
depreciation expense year 1 = $246,000 x 1/10 x 2 = $49,200
depreciation expense year 2 = $196,800 x 1/10 x 2 = $39,360
year depreciation expense book value
1 $49,200 $196,800
2 $39,360 $157,440
Assigning manufacturing overhead costs and other indirect costs is called a:
Answer:
Cost allocation
Explanation:
Cost allocation means the process where the identification, aggregation, and the allocating of the cost is made to the various cost objects. It plays an important role as the cost i.e. incurred for generating a particular product or rendering a service would be determined
So if the manufacturing overhead cost assigned and the other indirect cost so this we called cost allocation
J.Crew is planning a new line of jackets for fall. It plans to sell the jackets for $100. It is having the jackets produced in the Dominican Republic. Although J. Crew does not own the factory, its product development and design costs are $400,000. The total cost of the jacket, including transportation to the stores, is $45.
1. What is the breakeven quantity for this item? That is, the number that J. Crew will need to sell in order to not lose money?(Treat product development and design costs [$400,000] as fixed, cost of each jacket including transportation [$45] as unit variable cost)
a. 6.846 jackets
b. 7,273 jackets
c. 9,118 jackets
d. 8,435 jackets
2. What is the breakeven point, in sales revenue dollars?
a. $727,300
b. $684,600
c. $843,500
d. $911,800
Answer:
Results are below.
Explanation:
To calculate the break-even point in units and dollars, we need to use the following formulas:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 400,000 / (100 - 45)
Break-even point in units= 7,273
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 400,000 / 0.55
Break-even point (dollars)= $727,300
Contribution margin ratio= contribution margin / selling price per unit
Contribution margin ratio= 55 / 100= 0.55
Sales promotions that provide consumers an incentive to buy a product, such as a cents-off coupons or a discount, are widely used, especially for the type of products we buy in the grocery store. For the company offering the discounts and coupons, one of the risks with such a strategy is that _______________.it is challenging to track usage of the couponsit will not provide a believable messageretailers are typically not interested in helping out with such campaignsconsumers who typically buy other brands will switch to the promoted brandit might only appeal to already loyal customers who stockpile the product when it is on sale for later consumption
Answer:
it is challenging to track usage of the coupons
Explanation:
Coupons are defined as an instrument that is used to obtain a discount or rebate when making a purchase.
Stores usually give out coupons to customers as an incentive to by products.
However there will be challenge of tracking the coupons as well as the discount on each coupon.
Coupons are given at different discount rates at different times, so it is cumbersome to track a particular coupon out of the many issued when customer wants to redeem it
Charlie Manufacturing Company has two production departments, Melting and Molding. Direct general plant management and plant security costs benefit both production departments. Charlie allocates general plant management costs on the basis of the number of production employees and plant security costs on the basis of space occupied by the production departments. In November, the following overhead costs were recorded:
Melting Department direct overhead $350,000
Molding Department direct overhead 600,000
General plant management 180,000
Plant security 70,000
Melting Molding
Number of employees 50 90
Space occupied (square feet) 20,000 80,000
Machine hours 10,000 2,000
Direct labor hours 4,000 20,000
Required:
Prepare a schedule allocating general plant management costs and plant security costs to the Melting and Molding Departments.
Answer:
Charlie Manufacturing Company
A Schedule Allocating Service Costs to the Melting and Molding Departments:
General Plant Plant Melting Molding Total
Management Security
Direct overhead $180,000 $70,000 $350,000 $600,000 $1,200,000
General plant mgt -180,000 0 64,286 115,714 0
Plant security -70,000 14,000 56,000 0
Total costs after $0 $0 $428,286 $771,714 $1,200,000
Explanation:
a) Data and Calculations:
Overheads:
General Plant Plant Melting Molding Total
Management Security
Direct overhead $180,000 $70,000 $350,000 $600,000 $1,200,000
Number of employees 50 90 140
Space occupied (square feet) 20,000 80,000 100,000
Machine hours 10,000 2,000 12,000
Direct labor hours 4,000 20,000 24,000
General plant mgt -180,000 0 64,286 115,714 0
Plant security -70,000 14,000 56,000 0
General Plant management (Production Employees):
Melting = $64,286 ($180,000 * 50/140)
Molding = $115,714 ($180,000 * 90/140)
Plant Security (Space Occupied):
Melting = $14,000 ($70,000 * 20,000/100,000)
Molding = $56,000 ($70,000 * 80,000/100,000)
Eastwood Enterprises offers horseback riding lessons. During the month of June, the company provides lessons on account totaling $5,100. By the end of the month, the company received on account $4,500 of this amount. In addition, Eastwood received $500 on account from customers who were provided lessons in May. Determine the amount of operating cash flows Eastwood will report as received from customers in June.
Answer:
$5,000
Explanation:
Calculation to Determine the amount of operating cash flows Eastwood will report as received from customers in June.
Using this formula
Operating cash flows=Receipts for lessons in June+Receipts for lessons in May
Let plug in the formula
Operating cash flows=$4,500+$500
Operating cash flows=$5,000
Therefore the amount of operating cash flows Eastwood will report as received from customers in June is $5,000
Wildhorse Corporation factors $266,800 of accounts receivable with Kathleen Battle Financing, Inc. on a with recourse basis. Kathleen Battle Financing will collect the receivables. The receivables records are transferred to Kathleen Battle Financing on August 15, 2020. Kathleen Battle Financing assesses a finance charge of 2% of the amount of accounts receivable and also reserves an amount equal to 4% of accounts receivable to cover probable adjustments.
Assume that the conditions are met for the transfer of receivables with recourse to be accounted for as a sale. Prepare the journal entry on August 15, 2014, for Beyoncé to record the sale of receivables, assuming the recourse liability has a fair value of $4,650. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Date Account Titles and Explanation Debit Credit August 15, 2014
Answer:
Denit Cash for $250,792; Debit Due from factors for $10,672; Debit Loss on Sale of receivables for $9,986; Credit Recourse liability for $4,650; and Credit Accounts receivable for $266,800.
Explanation:
The following are calculated first before preparing the journal entry:
Cash received = Factored amount * (100% - Finance charge percentage - Percentage reserved for probable adjustments) = $266,800 * (100% - 2% - 4%) = $250,792
Due from factors = Factored amount * Percentage reserved for probable adjustments = $266,800 * 4% = $10,672
Loss on Sale of receivables = (Factored amount * Finance charge percentage) + Fair value of recourse liability = ($266,800 * 2%) + $4,650 = $9,986
The journal entry will now appear as follows:
Date Account Titles and Explanation Debit ($) Credit ($)
15 Aug 2014 Cash 250,792
Due from factors 10,672
Loss on Sale of receivables 9,986
Recourse liability 4,650
Accounts receivable 266,800
(To record the sale of receivables.)
Peng Company is considering an investment expected to generate an average net income after taxes of $2,000 for three years. The investment costs $45,300 and has an estimated $7,500 salvage value.
Assume Peng requires a 15% return on its investments. Compute the net present value of this investment. Assume the company uses straight-line depreciation. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Negative amounts should be indicated by a minus sign.)
Peng Company is considering an investment expected to generate an average net income after taxes of $2,000 for three years. The investment costs $45,300 and has an estimated $7,500 salvage value.
Assume Peng requires a 15% return on its investments. Compute the net present value of this investment. Assume the company uses straight-line depreciation. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Negative amounts should be indicated by a minus sign.)
Cash Flow Select Chart Amount x PV Factor = Present Value
Annual cash flow Present Value of an Annuity of 1 =
Residual value Present Value of 1 =
Net present value
Answer:
$-7033.54
Explanation:
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
Cash flow = net income + deprecation
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
($45,300 - $7,500) / 3 = $12,600
Cash flow = $12,600 + $2000 = $14,600
Cash flow in year 0 = $-45,300
Cash flow in year 1 = $14,600
Cash flow in year 2 = $14,600
Cash flow in year 3 = $14,600 + $7,500 = $22,100
I = 15%
NPV = $-7033.54
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
1. A part is produced in lots of 1,000 units. It is assembled from two components worth $50 total. The value added in production (for labor and variable overhead) is $60 per unit, bringing total costs per completed unit to $110. The average lead time for the part is 6 weeks and annual demand is 3,800 units, based on 50 business weeks per year. a. How many units of the part are held, on average, in cycle inventory
Answer:
A. Average cycle inventory 500 units
Value of cycle inventory $55,000
B. Average pipeline inventory 456 units
Value of the pipeline inventory $36,480
Explanation:
a. Calculation to determine How many units of the part are held, on average, in cycle inventory
Calculation for Average cycle inventory
Average cycle inventory=1000/2
Average cycle inventory=500 units
Therefore the Average cycle inventory is 500 units
Calculation for Value of cycle inventory
Value of cycle inventory=(500 units) *($50+$60)
Value of cycle inventory=(500 units*$110)
Value of cycle inventory=$55,000
Therefore the Value of cycle inventory is $55,000
b. Calculation to determine Avarage Pipeline inventory and Value of the pipeline inventory
First step is to calculate the unit cost using this formula
Unit cost = Material + 50%of labor and variable overhead
Let plug in the formula
Unit cost=$50+(50%*$60)
Unit cost= $50 + $30
Unit cost= $80
Now let calculate the Average pipeline inventory
Average pipeline inventory = = [(3800 units/year)/(50wks/yr)] x (6 weeks)
Average pipeline inventory= 456 units
Therefore Average pipeline inventory is 456 units
Calculation to determine Value of the pipeline inventory
Value of the pipeline inventory = (456 units) x ($50+$30)
Value of the pipeline inventory=456 units×$80
Value of the pipeline inventory= $36,480
Therefore the Value of the pipeline inventory is $36,480
The next dividend payment by Hoffman, Inc., will be $3.10 per share. The dividends are anticipated to maintain a growth rate of 6.25 percent forever. Assume the stock currently sells for $49.80 per share. a. What is the dividend yield
Answer:
6.2249%
Explanation:
Dividend yield = next dividend paid / price of the stock
Dividend yield is one of the components used in calculating the total return of a stock.
Total return = price return + dividend yield
price return is the return on a stock as a result of price appreciation
Dividend yield = $3.10 / $49.80 = 0.062249 = 6.2249%
The cost function for Acme Laundry is
C(q) = 20 + 30q + q2
where q is tons of laundry cleaned. What q should the firm choose so as to maximize its profit if the market price is p?
The output level at which the firm's profit is maximized as a function of p is____.
If p = 100, then Acme Laundry should____produce units.
Answer:
Explanation:
The profit function will be:
π = Total revenue - Total cost
where,
Total revenue = price × quantity= pq
Total cost = 20 + 30q + q²
π = pq - (20 + 30q + q²)
π = pq - 20 - 30q - q²
Then we maximize profit with respect to q which will be:
dπ/dq = p - 30 - 2q
We then equate the profit function to 0.
p - 30 - 2q = 0
p - 2q = 30
2q = p - 30
q = (p - 30)/2
When p = 100, the number of units that should be produced will be:
= (p - 30)/2
= (100 - 30)/2
= 70/2
= 35 units
Edith Carolina is president of the Deed Corporation. The company is decentralized, and leaves investment decisions up to the discretion of the division managers. Michael Sanders, manager of the Cosmetics Division, has had a return on investment of 14% for his division for the past three years and expects the division to have the same return in the coming year. Sanders has the opportunity to invest in a new line of cosmetics which is expected to have a return on investment of 12%. The company's minimum required rate of return is 8%. If the Deed Corporation evaluates managerial performance using residual income based on the corporate minimum required rate of return of 8%, what decision would be preferred by Edith Carolina and Michael Sanders?
Carolina Sanders
A) accept reject
B) reject accept
C) accept accept
D) reject reject
A. Choice A.
B. Choice B.
C. Choice C.
D. Choice D.
Answer: A. Choice A.
Explanation:
When using the residual income based on a corporate minimum required rate of return, an investment that provides a return higher than the required return should be accepted.
Edith Carolina would therefore accept this investment as it offers an ROI of 12% which is higher than the company required rate of return of 12%.
Michael Sanders would however reject it as it falls short of the 14% ROI that he expects his division to maintain.
Assume that last year, Cliff Consulting, a firm in Berkeley, CA, had the following contribution income statement:
CLIFF CONSULTING
Contribution Income Statement
For the Year Ended September 30
Sales revenue $ 1,200,000
Variable costs
Cost of services $ 480,000
Selling and administrative 60,000 540,000
Contribution margin 660,000
Fixed Costs -selling and administrative 440,000
Before-tax profit 220,000
Income taxes (21%) 46,200
After-tax profit $ 173,800
(a) Determine the annual break-even point in sales revenue.
(b) Determine the annual margin of safety in sales revenue.
(c) What is the break-even point in sales revenue if management makes a decision that increases fixed costs by $80,000?
(d) With the current cost structure, including fixed costs of $440,000, what dollar sales revenue is required to provide an after-tax net income of $250,000?
(e) Prepare an abbreviated contribution income statement to verify that the solution to requirement (d) will provide the desired after-tax income.
Answer:
Cliff Consulting
a) Annual Break-even point in sales revenue is:
= $800,000
b) Annual margin of safety is:
= $400,000
c) If fixed costs increases by $80,000, the break-even point in sales revenue
= $945,455
d) Dollar Sales Revenue required to provide an after-tax net income of $250,000 is:
= $1,375,375
e) Abbreviated Contribution Income Statement
Sales revenue $1,375,375
Variable costs = 618,919
Contribution = $756,456
Fixed costs 440,000
Before tax income 316,456
Income tax (21%) 66,458
After-tax income $249,998
equivalent to $250,000
Explanation:
a) Data and Calculations:
CLIFF CONSULTING
Contribution Income Statement
For the Year Ended September 30
Sales revenue $ 1,200,000
Variable costs
Cost of services $ 480,000
Selling and administrative 60,000 540,000
Contribution margin 660,000
Fixed Costs -selling and administrative 440,000
Before-tax profit 220,000
Income taxes (21%) 46,200
After-tax profit $ 173,800
Break-even point in sales revenue = Fixed costs/Contribution margin ratio
= $440,000/0.55
= $800,000
Annual margin of safety = normal sales revenue minus break-even sales revenue
= $1,200,000 - $800,000
= $400,000
Contribution margin ratio = contribution margin/sales revenue * 100
= $660,000/$1,200,000 * 100 = 55%
If fixed costs increases by $80,000, the break-even point in sales revenue
= ($440,000 + $80,000)/0.55 = $520,000/0.55 = $945,455
To achieve after-tax net income of $250,000, the required dollar sales revenue:
Net income after-tax = $250,000
Tax rate = 21%
Net income before tax = $250,000/1-21%
= $250,000/0.79 = $316,456
Sales dollars to achieve target profit = (Fixed costs + Target Profit/1 - 0.21)/Contribution margin
= ($440,000 + ($250,000/0.79))/0-55
= ($440,000 + $316,456)/0.55
= $756,456/0.55
= $1,375,375
Abbreviated Contribution Income Statement
Sales revenue $1,375,375
Variable costs = 618,919
Contribution = $756,456
Fixed costs 440,000
Before tax income 316,456
Income tax (21%) 66,458
After-tax income $249,998
After-tax income is equivalent to $250,000
what does Gdp measure, and what are the four components of gdp?
Answer:
Gdp is the value of goods and services it's calculated by adding the money spent by consumers and businesses in a certion period.The 4 components are personal expenditures,business investments,government spending and exports of goods and services.
f-1. Assume that no intra-entity inventory or land sales occurred between Placid Lake and Scenic. Instead, on January 1, 2020, Scenic sold equipment (that originally cost $170,000 but had a $84,000 book value on that date) to Placid Lake for $118,000. At the time of sale, the equipment had a remaining useful life of five years. What worksheet entries are made for a December 31, 2021, consolidation of these two companies to eliminate the impact of the intra-entity transfer
Answer:
Journal 1
Debit : Other Income $34,000
Credit : Equipment $34,000
Journal 2
Debit : Accumulated depreciation $6,800
Credit : depreciation $6,800
Explanation:
Step 1 : Eliminate the Income resulting from sale and the additional value of equipment sitting in the buyer books
Income = Selling Price - Carrying Amount
where,
Carrying Amount = Cost - Accumulated depreciation
= $84,000
therefore,
Income = $118,000 - $84,000 = $34,000
Journal;
Debit : Other Income $34,000
Credit : Equipment $34,000
Step 2 : Eliminate the unrealized profit as a result of additional asset value
unrealized profit = income ÷ remaining useful life
= $34,000 ÷ 5
= $6,800
Journal;
Debit : Accumulated depreciation $6,800
Credit : depreciation $6,800