Late 20s to late 40s: This is almost the perfect time for would-be entrepreneurs, for many reasons: At this point in life, they know what they like, and what they don't like. They have obtained business and life skills. They have some assets and credit.
The period from late 20s to early 40s the best time for becoming an entrepreneur is the creative and innovative ideas are the used is the startup new business.
What is entrepreneur?
The term “entrepreneur” refers to the person who launches a new business at their own risk and profit basis. The starting up of a new business with a new idea and logic is called entrepreneurship. The entrepreneur's main motive is to set up a business to generate employment.
The period from the early 20s to the early 40s is ideal for an entrepreneur since technology is evolved enough to start a new business. The business owner works on websites, blogs, digital media, photo editing, television, and radio. The inventive and creative ideas that comprise the most effective company plans.
As a result, the 20s to early 40s are the best period to entrepreneur.
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Paradise Corporation Budgeted on an annual basis for it fiscal year. The following beginning and ending inventory levels (in units) are planned for next year. Beginning Inventory Raw materials 55,000 Finished goods 95,000 Ending inventory raw material 65,000 Finished goods 65,000. Three pounds of raw material are needed to produce each unit of finished product. If Paradise Corporation plans to sell 555,000 units during next year, the number of units it would have to manufacture during the year would be:________. a. 500,000 units b. 555,000 units c. 585,000 units d. 525,000 units.
Answer:
d. 525,000 units.
Explanation:
The computation of the number of units manufactured during the year is shown below:
= Number of units sold + ending finished goods inventory - beginning finished goods inventory
= 555,000 units + 65,000 units - 95,000 units
= 525,000 units
hence, the correct option is d. 525,000 units
We simply applied the above formula so that the correct value could come
And, the same is to be considered
One effective way to manage credit card debt is to:
A. exaggerate your income when applying for a credit card.
B. spend your entire credit limit before making any payments.
C. replace high-interest credit cards with low-interest options.
D. always pay only the minimum payment required each month.
Answer:
C. replace high-interest credit cards with low-interest options.
Explanation:
A credit card provides a secure and convenient way to pay for goods and services even when they do not have money. The credit card gives the user access to instant credit every time they use it. The user does not incur any charges should they pay the amount due before its due date.
Credit card interest rate charges are among the highest in the industry. If the user is late in their payment, the interest fee and other charges accumulate real quick. Shifting to cards with lower interest is one way of managing credit card debts.
Read the information about 2 competing credit cards.
Credit card 1 would be the better option if the borrow:
A. Had major expenses in the first year.
B. Spent a lot of money in the second year.
C. Used the card regularly in the long term.
D. Carried a large balance in the long term.
Answer: A. Had major expenses in the first year.
Explanation: It just makes sense and it’s also correct
What is the purpose of the FASFA4CASTER
A country has nominal GDP equal to $204.31 billion in 2018. The GDP deflator in 2018 has a value of 112.64. What was the value of real GDP, in billions of dollars. Round to two decimal places. If your answer is 3.2 billion then just enter 3.2.
Answer:
$181.38 billion
Explanation:
The computation of the value of the real GDP is shown below:
As we know that
Real GDP = (Nominal GDP ÷ GDP Deflator) × 100
= ($204.31 billion ÷ 112.64) × 100
= $181.38 billion
Hence, the value of real GDP is $181.38 billion
We simply applied the above formula so that the correct value could come
And, the same is to be considered
The following transactions were selected from among those completed by Hailey Retailers in the current year:
Nov. 20 Sold two items of merchandise to Customer B, who charged the $460 (total) sales price on her Visa credit card. Visa charges Hailey a 1 percent credit card fee.
25 Sold 14 items of merchandise to Customer C at an invoice price of $3,400 (total); terms 2/10, n/30.
28 Sold 12 identical items of merchandise to Customer D at an invoice price of $8,040 (total); terms 2/10, n/30.
30 Customer D returned one of the items purchased on the 28th; the item was defective and credit was given to the customer.
Dec. 06 Customer D paid the account balance in full.
30 Customer C paid in full for the invoice of November 25.
Required:
a. Prepare the appropriate journal entry for each of these transactions. Do not record cost of goods sold.
b. Compute Net Sales.
Answer:
Hailey Retailers
a. Journal Entries:
Nov. 20:
Debit Visa Card $455.40
Debit Card Charges $4.60
Credit Sales Revenue $460
To record the sale of goods via Visa credit card.
Nov. 25:
Debit Accounts Receivable $3,400
Credit Sales Revenue $3,400
To record the sale of goods on account, terms 2/10, n/30.
Nov. 28:
Debit Accounts Receivable $8,040
Credit Sales Revenue $8,040
To record the sale of goods on account, terms 2/10, n/30.
Nov. 30:
Debit Sales Returns $670
Credit Accounts Receivable $670
To record the return of the defective items.
Dec. 06:
Debit Cash $7,222.60
Debit Cash Discount $147.40
Credit Accounts Receivable $7,370
To record the receipt from Customer D.
Dec. 30:
Debit Cash $3,400
Credit Accounts Receivable $3,400
To record the receipt from Customer C.
b. Computation of the Net Sales:
Nov. 20: Sales Revenue $460
Nov. 25: Sales Revenue $3,400
Nov. 28: Sales Revenue $8,040
Nov. 30: Sales Returns $(670)
Net Sales = $11,230
Explanation:
Hailey Retailers' net sales equals the addition of the sales revenue minus the sales returns.
Prepare an income statement (LO1-3)
Below are the account balances for Cowboy Law Firm at the end of December.
Accounts Balances
Cash $ 5,400
Salaries expense 2,200
Accounts payable 3,400
Retained earnings 3,900
Utilities expense 1,200
Supplies 13,800
Service revenue 9,300
Common stock 6,000
Required:
Use only the appropriate accounts to prepare an income statement.
COWBOY LAW FIRM
Income Statement
For the Period Ended December 31
Expenses:
Total expenses
Answer:
$5,900
Explanation:
Preparation of an Income statement
REVENUE :
Service revenue $9,300
Less EXPENSES:
Salaries expense $2,200
Utilities expense $1,200
Total Expenses($3,400)
($2,200+$1,200)
Net income $5,900
($9,300-$3,400)
Therefore the Net income amount for the income statement will be $5,900
Luther Industries has no debt, a total equity capitalization of $20 billion, and a beta of 1.8. Included in Luther's assets are $4 billion in cash and risk-free securities. What is Luther's enterprise value?
Answer:
2400000000
Explanation:
Luther's enterprise value will be $16 billion.
The following information can be depicted from the question given:
Total equity capitalization = $20 billionBeta = 1.8It should be noted that an enterprise value is the difference between the market value and cash. Therefore, the enterprise value will be:
= $20 billion - $4 billion
= $16 billion.
In conclusion, Luther's enterprise value will be $16 billion.
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Strategic PlanningImagine that IBM has decided to diversify into the telecommunications business to provide online cloud-computing data services and broadband access for businesses and individuals. What method would you recommend that IBM pursue to enter this industry? Why?
Answer:
IBM could either diversify by the strategy of market penetration, which consists in increasing the market share in a particular sector (in this case, cloud computing) through more marketing efforts.
Or it could integrate horizontally, acquiring a possible competitor that is more advanced in the cloud-computing business. Or even a start-up with good prospects, because with the amount of capital that IBM has, it could more easily expand the start-up operation as a new internal business division.
The price of cups increased from $3.75 to $4.05 and the quantity demanded of plates decreased from 4,950 to 4,450. Calculate the cross-price elasticity of demand for plates. Round your answer to the nearest hundredth.
Answer:Cross elasticity of demand = -1.25
Explanation:
Cross elasticity of demand= Per entage change in quantity of commodity A (plates)/ Percentage change in price of commodity B(cups)
Percentage change in quantity demanded for plates = (New quantity - old quantity/ old quantity ) x 100
={ (4450-4950)/4950] ×100
=-500/4950
= - 0.10×100= - 10%
Percentage change in price of cups =(New price - old price/ old price) x 100 [(4.05-3.75)/3.75]×100
=0.3/ 3.75
= 0.08×100= 8%
Cross price elasticity of demand = - 10%/8%
= - 1.25
Here, the cross elasticity of demand for these goods of cups and plates is negative(-1.25) showing that they are complementary goods since as the price for cups increases, the demand for plates decreased.
The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Buddies, a perfectly competitive firm that produces novelty ear buds in a competitive market. The market price of ear buds is $6.00 per pair. Buddies Production CostsQuantity of Ear Buds MC ATC ($) ($)5 - 80 2 515 2.45 4.1520 3.55 425 4 430 5.5 4.2535 6 4.540 8.5 5A. If Buddies wants to maximize its profits, how many pairs of ear buds should it produce?B. At the profit-maximizing quantity, what is the total cost of producing ear buds?C. If the market price for ear buds is $6 per pair, and Buddies produces the profit-maximizing quantity of ear buds, what is Buddies weekly profit?D. If the market price is $5.50 per pair, and Buddies produces the profit-maximizing quantity of ear buds, what is Buddies weekly profit?E. Buddies earns a normal profit whena. marginal cost equals average cost at the minimum of average cost.b. marginal cost equals average cost.c. marginal cost equals marginal revenue at the minimum of marginal cost.d. average cost equals average revenue at the minimum of average cost.
Answer and Explanation:
The computation is shown below:
a. The number of pairs of ear buds that should be produced for maximizing the profits is
As we know that
MR = MC
Q = 35
And also the price is equal to the MC
Hence, the quantity that should be produced would be 35
b). The total cost of producing ear buds for maximizing the profit is
As we know that
TC = ATC × Q
= 4.5 × 35
= $157.5
c. The weekly profit is
As we know that
Profit = TR - TC
= (P - ATC) × Q
= (6 - 4.5) × 35
= $52.5
d) The weekly profit is
Profit= (5.5 - 4.25) × 30
= $37.5
e. The normal profit could be earned at the time when the marginal cost is equivalent to the average cost that contains the minimum
Hence, the option a is correct
Where do the resources come from to continue to expand the production of watermelons
Explanation:
A production of watermelons or any agrarian resource, needs specific resources to continue expanding production, because unlike an organization that produces durable goods, a company that produces watermelons needs more than machines and equipment, it primarily needs a farm with ideal land for planting and growing watermelons.
The resources also come from government subsidies, workers, equipment, investments, etc.
Barney, a manager, is very conventional, resistant to change, habitual, and does not accept new ideas very easily.This implies that Barney has:________.
A) low neuroticism.
B) low customary thinking.
C) high extraversion.
D) high agreeableness.
E) low openness to experience.
Answer:
A
Explanation:
A company had inventory on July 1 of 5 units at a cost of $16 each. On July 2, they purchased 9 units at $28 each. On July 6 they purchased 5 units at $25 each. On July 8, 8 units were sold for $58 each. Using the LIFO periodic inventory method, what was the value of the inventory on July 8 after the sale?
Answer:
$248
Explanation:
The LIFO inventory method implies that the inventory that was purchased last would be the first to be sold.
Here, we would compute the inventory units as seen below;
= 5 units + 9 units + 5 units - 8 units
= 11 units
Now, the value of inventory is;
= 5 units × $16 + 6 units × $28
= $80 + $168
= $248.
The 6 units come from
= 11 units - 5 units
= 6 units.
Therefore, the value of inventory is $248.
Ramble On Co. wishes to maintain a growth rate of 8 percent a year, a debt-equity ratio of 0.37, and a dividend payout ratio of 54 percent. The ratio of total assets to sales is constant at 1.41. What profit margin must the firm achieve?
Answer: 16.55%
Explanation:
Profit margin is the amount of earnings that a company has left when every expenses and costs have been deducted.
From the information given, firstly, we calculate the return on equity. This will be:
= Growth rate /(1 + Growth rate) × Retention ratio
= 8% / (1 + 8%) × 46%
= 0.08/(1 + 0.08) × 0.46
= 0.08/1.08 × 0.46
= 0.08/0.4968
= 0.1610
= 16.10%
Return on equity, ROE = 16.10%
We then calculate the profit margin. This will be:
= ROE / Asset turnover × Equity Multiplier
where,
Equity Multiplier = 1 + debt-equity ratio
= 1 + 0.37 = 1.37
Profit margin = ROE / Asset turnover × Equity Multiplier
= 16.10% / {(1/1.41) × 1.37}
= 16.10% / 0.71 × 1.37
= 0.1610 / 0.9727
= 0.1655
Profit margin = 16.55%
The profit margin is 16.55%,
Calculation of the profit margin:First we have to determine the return on equity.
So, it should be
= Growth rate /(1 + Growth rate) × Retention ratio
= 8% / (1 + 8%) × 46%
= 0.08/(1 + 0.08) × 0.46
= 0.08/1.08 × 0.46
= 0.08/0.4968
= 0.1610
= 16.10%
Now the profit margin is
= ROE / Asset turnover × Equity Multiplier
= 16.10% / {(1/1.41) × 1.37}
= 16.10% / 0.71 × 1.37
= 0.1610 / 0.9727
= 0.1655
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Landings Glassware Company issues $1,150,000 of 15%, 10-year bonds at 95 on February 28, 2019. The bonds pay interest on February 28 and August 31. The journal entry to record the issuance includes a ________.A. debit to Cash for $1,150,000 B. debit to Cash for $1,092,500 C. credit to Bonds Payable for $1,092,500 D. credit to Discount on Bonds Payable for $57,500
Answer:
B. debit to Cash for $1,092,500
Explanation:
The journal entry to record the issuance of the bond is shown below:
Cash Dr ($1,150,000 × 95%) $1,092,500
Discount on bond payable $57,500
To Bond payable $1,150,000
(Being the issuance of the bond is recorded)
Here the cash and discount is debited as it increased the assets and discount while the bond payable is credited as it also increased the liabilities
Therefore option B is correct
The portfolio with the lowest standard deviation for any risk premium is called the_______. A.efficient frontier portfolio B.CAL portfolio C.global minimum variance portfolio D.optimal risky portfolio
Answer:
The right approach is Option C (global minimum variance portfolio).
Explanation:
A completely-invested portfolio with either a low uncertainty factor seems to be the GMV portfolio. This same GMV portfolio corresponds to or is situated mostly on the left end including its FI-efficient frontier. Although aside from either the full-investment requirement, no restrictions are enforced, the GMV portfolio deals for analytical portrayal.The latter options offered are not relevant to something like the scenario presented. So that is indeed the correct solution.
The market demand function for corn is Qd = 5 15 - 2P and the market supply function is Qs= 5P- 6, both quantities measured in billions of bushels per year. Suppose the government wants to raise the price to $4 per bushel. What are the aggregate surplus, consumer surplus, and producer surplus at the competitive equilibrium?
Answer:
The Producer surplus = 19.6.
consumer surplus = 12.25.
Aggregate supply = 31.85.
Explanation:
Normally, the demand equilibrium function equals to supply equilibrium function will get us the price which is $3 that is Qd = Qs. Hence, if we equate both function together like;
15 - 2P = 5P - 6.
15 +6 = 5P + 2P.
21 = 7P.
P = $3.
Thus, Qd = 15 - 2P= 15 - 2(3) = 15 - 6 = 9 units.
Qs = 5P - 6 = 5(3) - 6 = 15 - 6 = 9.
Therefore, if the price is going to be Increased by $4, we will have that;
Qd = 15 - 2P= 15 - 2(4) = 15 - 8 = 7 units.
=> The Producer surplus = 1/2 × 14 (4 - 1.2) = 19.6.
=> consumer surplus = 1/2 × 7 (7.5 - 4) = 12.25.
Aggregate supply = Producer surplus + consumer surplus = 19.6 + 12.25 = 31.85.
A consumer is currently spending all of her available income on two goods: music CDs and DVDs.At her current consumption bundle she is spending twice as much on CDs as she is on DVDs.If the consumer has $120 of income and is consuming 10 CDs and 2 DVDs,what is the price of a CD?
A) $4
B) $8
C) $12
D) $20
Answer:
D) $20
Explanation:
Calculation for the price of a CD
Since the Total income is 120 then let the Income spent on DVDs be x and let them income spent on CDs be 2*x
First step
x + 2*x = $120
3*x = $120
x=$120/3
x = $40
Second step
Let the Price of one CD be y
Hence,
2*y = $40
y = $40 / 2
y = $20
Therefore the price of a CD will be $20
Why would a large publically traded corporation likely prefer issuing bonds as a way to raise new money as opposed to issuing more shares?
A. the rate of return the corporation promised will be more difficult to deliver
B. more shares will dilute the existing value of the stock, causing its market price to fall
C. the market will view the new share issue as a sign the company is in financial difficulty
D. issuing bonds is a more secure method for corporations to raise needed money
Answer:
B. more shares will dilute the existing value of the stock, causing its market price to fall
Explanation:
A bond can be defined as a debt or fixed investment security, in which a bondholder (creditor or investor) loans an amount of money to the bond issuer (government or corporations) for a specific period of time.
Generally, the bond issuer is expected to return the principal at maturity with an agreed upon interest to the bondholder, which is payable at fixed intervals.
The reason a large publicly traded corporation would likely prefer issuing bonds as a way to raise new money as opposed to issuing more shares is because more shares will dilute the existing value of the stock, causing its market price to fall and may negatively affect by reducing the value and proportional ownership of the investor's shares in the corporation.
Carla Vista Clinic purchases land for $480000 cash. The clinic assumes $4200 in property taxes due on the land. The title and attorney fees totaled $3200. The clinic had the land graded for $8100. What amount does Carla Vista Clinic record as the cost for the land?A. $476200 B. $470000. C. $484500 D. $478300.
Answer:
$495,500
Explanation:
Carla costs clinic purchases a land for $480,000
The clinic assumes $4,200 in property taxes
The title and attorney fee is $3,200
The land was graded for $8,100
Therefore the cost of the land can be calculated as follows
= $480,000 + $4,200+$3,200 + $8,100
= $495,500
In constructing a common-size income statement, depreciation will be______. A. omitted since it is a noncash expense. B. expressed as a percentage of sales. C. added back to convert net income to cash flows. D. expressed as a percentage of total assets. E. expressed as a percentage of gross fixed assets.
Answer:
B. expressed as a percentage of sales.
Explanation:
The common size income statement is the income statement where n each line the item on the income statement should be expressed as a percentage of sales
In the given options, the option B is correct as it shows that the depreciation would be expressed in sales percentage
Therefore all other options are wrong
Tumbling Haven, a gymnastic equipment manufacturer, provided the following information to its accountant. The company had current assets of $145,332, net fixed assets of $356,190, and other assets of $4,176. The firm had long-term debt of $76,445, common stock of $200,000, and retained earnings of $134,461. What amount of current liabilities did this firm have?
a. $94,792
b. $410,906
c. $171,217
d. $76,445
Answer:
a
Explanation:
Green House operates a commercial plant nursery where it propagates plants for garden centers throughout the region.
Green House has $5,100,000 in assets. Its yearly fixed costs are $650,000, and the variable costs for the potting soil, container, label, seedling, and labor for each gallon-size plant total $1.90.
Green House's volume is currently 500,000 units. Competitors offer the same plants, at the same quality, to garden centers for $4.25 each. Garden centers then mark them up to sell to the public for $9 to $12, depending on the type of plant.Read the requirements
Requirement 1.
Green House's owners want to earn an 11% return on investment on the company's assets. What is
Green House's target full product cost?
Revenue at current market price ?
Less:Desired profit ?
Target full product cost ?
Requirement 2. Given Green House's current costs, will its owners be able to achieve their target profit? Begin by calculating Green House's current full product cost.
Current variable costs ?
Plus:Current fixed costs ?
Current full product cost ?
Requirement 3. Assume Green House has identified ways to cut its variable costs to $1.75 per unit. What is its new target fixed cost? Will this decrease in variable costs allow the company to achieve its target profit?Begin by calculating Green House's new target fixed cost.
Target full product cost ?
Less:Variable costs ?
Target fixed cost ?
Requirement 4.
Green House started an aggressive advertising campaign strategy to differentiate its plants from those grown by other nurseries.
Green House does not expect volume to be affected, but it hopes to gain more control over pricing. If Green House has to spend $145,000 this year to advertise and its variable costs continue to be $1.75 per unit, what will its cost-plus price be?
Begin by calculating the cost-plus price per unit. (Round your answer to the nearest cent.)
Current variable costs ?
Plus:Fixed costs ?
Full product cost ?
Plus:Desired profit ?
Target revenue ?
Divided by:Number of units ?
Cost-plus price per unit ?
Answer:
1. Revenue at current market price $2,125,000 (500,000 units * $4.25)
Less: Desired profit $561,000 ($51,000,000 * 11%)
Target full product cost $1,564,000
2. Current variable costs $950,000 (500,000 units * $1.90)
Add: Current fixed costs $650,000
Current full product cost $1,600,000
Answer: No, the owner will not be able to meet its desired profits because the above product cost is still more than target cost of $ 1,564,000
3. Target full product cost $1,564,000
Less: Variable costs $875,000 (1.75*500,000 units)
Target fixed cost $689,000
Answer: Yes, now the company will be able to meet its target profit because the target Fixed cost calculated above is MORE than actual Fixed Cost of $ 650,000
4. Current variable costs $875,000
Add: Fixed costs $795,000
($650,000 + $145,000)
Full product cost $1,670,000
Add: Desired profit $561,000
($51,000,000 x 11%)
Target revenue $2,231,000
Cost-plus price per unit = Target revenue / Number of units
Cost-plus price per unit = $2,231,000 / 500,000 units
Cost-plus price per unit = $4.46
The stockholders' equity of Gaulin Company at the start of the current year follows: Common stock, $ 5 par value, 350,000 shares authorized; 120,000 shares issued and outstanding $ 600,000 Paid-in capital in excess of par value 600,000 Retained earnings 346,000 During the current year, the following transactions occurred: Jan. 5 Issued 10,000 shares of common stock for $12 cash per share. Jan. 18 Purchased 4,000 shares of common stock for the treasury at $14 cash per share. Mar. 12 Sold one-fourth of the treasury shares acquired January 18 for $17 cash per share. July 17 Sold 500 shares of the remaining treasury stock for $13 cash per share. Oct. 1 Issued 5,000 shares of 8%, $22 par value preferred stock for $32 cash per share. This is the first issuance of preferred shares from the 50,000 authorized shares.
(a) Use the financial statement effects template to indicate the effects of each transaction. Use negative signs with answers, when appropriate.
Balance Sheet
Transaction Cash Asset + Noncash Assets = Liabilities + Contributed Capital + Earned Capital
Jan. 5 Answer Answer Answer Answer Answer Jan. 18 Answer Answer Answer Answer Answer Mar. 12 Answer Answer Answer Answer Answer July. 17 Answer Answer Answer Answer Answer Oct. 1 Answer Answer Answer Answer Answer Income StatementRevenue - Expenses = Net IncomeAnswer Answer AnswerAnswer Answer AnswerAnswer Answer AnswerAnswer Answer AnswerAnswer Answer Answer(b) Prepare the December 31, 2014, stockholders' equity section of the balance sheet assuming that the company reports net income of $65,800 for the year.Stockholders' EquityPaid-in capital 8% Preferred stock, $25 par value, 50,000 shares authorized, 5,000 shares issued and outstanding $Answer Common stock, $5 par value, 350,000 shares authorized; 260,000 shares issued Answer $AnswerAdditional paid-in capital Paid-in capital in excess of par value-preferred stock Answer Paid-in capital in excess of par value-common stock Answer Paid-in capital from treasury stock Answer AnswerTotal paid-in capital AnswerRetained earnings AnswerAnswerLess: Treasury stock (2,500 shares) at cost AnswerTotal Stockholders' Equity $ Answer
Answer:
common stock $600,000
additional paid in capital, common stock $600,000
retained earnings $346,000
I used an excel spreadsheet because there is not enough room here
1) Dr Cash 120,000
Cr Common stock 50,000
Cr Additional paid in capital, common stock 70,000
2) Dr Treasury stocks 56,000
Cr Cash 56,000
3) Dr Cash 17,000
Cr Treasury stock 14,000
Cr Additional paid in capital, common stock 3,000
4) Dr Cash 6,500
Dr Additional paid in capital, common stock 500
Cr Treasury stock 7,000
5) Dr Cash 160,000
Cr Preferred stocks 110,000
Cr Additional paid in capital, preferred stock 50,000
Hollister Company amended its defined benefit pension plan at the beginning of 2020 and recognized prior service cost of $1,700,000.
The company has collected the following additional information for the year 2020:
Service cost $400,000
Interest on the PBO 190,000
Amortization of prior service cost 170,000
Actual and expected return on plan assets 110,000
Plan funding was $700,000
Benefit payments to retirees totaled $390,000
The net increase to the PBO for 2020 is:_________.
a. $ 770,000.
b. $ 1,900,000.
c. $ 1,730,000.
d. $ 650,000.
Answer: b. $ 1,900,000
Explanation:
The Net Increase in PBO can be calculated by the formula;
= Prior service cost + Service cost + Interest on the PBO - Benefits paid
= 1,700,000 + 400,000 + 190,000 - 390,000
= $1,900,000
Penny, Inc. employs a process costing system. Direct materials are added at the beginning of the process. Here is information about July’s activities: On July 1:
Beginning inventories 850 units, 60% complete
Direct materials cost $5,000
Conversion costs $4,000
During July:
Number of units started 15,000
Direct materials added $155,000
Conversion costs added $83,520
On July 31:
Ending inventories 1,600 units, 40% complete
Using the FIFO method and rounding cost per unit to four decimal places, the cost of goods completed and transferred out during July was:_________
Answer:
$227,270
Explanation:
The computation of the cost of goods completed and transferred out is shown below
Particulars Direct materials Conversion costs
Beginning inventories 0 340
(850 × 40%)
Units started
and completed 13400 13400
(15,000 - 1,600)
Ending inventories 1600 640
(1,600 × 40%)
Equivalent units 15000 14380
Current costs $155000 $83520
Cost per Equivalent unit $10.3333 $5.8081
Cost of goods completed and transferred out is
= ($5000 + $4000) + (340 × 5.8081) + 13400 × (10.3333 + 5.8081)
= $227,270
Pillar Company owns 70 percent of Salt Company's outstanding common stock. On December 31, 20x8, Salt sold equipment to Pillar at a price in excess of Salt's carrying amount but less than its original cost. On a consolidated balance sheet at December 31,20x8, the carrying amount of the equipment should be reported at:_______________ A) Pillar's original cost. B) Salt's original cost. C) Pillar's original cost less Salt's recorded gain. D) Pillar's original cost less 70 percent of Salt's recorded gain.
Answer:
C. Pillar's original cost less Salt's recorded gain
Explanation:
For physical assets, that is in the form of machineries or computer hardware or in this case, equipment, we can calculate the carrying cost to be the original cost minus accumulated depreciation.
in answer to this question, the carrying amount of the equipment should be reported at Pillar's original cost less Salt's recorded gain.
Talia Corp. produces digital cameras. For each camera produced, direct materials are $20, direct labor is $16, variable manufacturing overhead is $12, fixed manufacturing overhead is $28, variable selling and administrative expenses are $10, and fixed selling and administrative expenses are $24. Compute the target selling price assuming a 40% markup on total per unit cost. Target selling price
Answer:
Talia Corp.
Target Selling Price
= $154
Explanation:
a) Data and Calculations:
Direct materials = $20
Direct labor = 16
Variable manufacturing overhead = 12
Fixed manufacturing overhead = 28
Variable selling & administrative expenses = 10
Fixed selling and administrative expenses = 24
Total cost $110
40% markup on total per unit cost = 44
Target Selling Price = $154
b) Talia bases its target selling price on the addition of 40% of the total cost to the total cost (including manufacturing costs, selling, and administrative expenses).
Assuming that the price elasticity of demand for slinkys (slinkys are a metal spring-like children's toy) is 2, an increase in the price of slinkys of 15% would result in (for slinkys) ___________a. an increase in the quantity supplied of 30%b. a decrease in demand of 30%c. a decrease in the quantity demanded of 7.5%d. a decrease in the quantity demanded of 30%
Answer: d. a decrease in the quantity demanded of 30%
Explanation:
Price elasticity of a good is used to measure the magnitude of change in the quantity demanded of the good as a result of a change in price.
Price elasticity = Change in Quantity demanded / Change in Price
2 = Change in quantity demanded / 15%
Change in Quantity demanded = 2 * 15% = 30%
The elasticity is listed as positive but is supposed to be negative even though this can cause confusion. Normal goods are assumed to have a negative elasticity so unless stated otherwise, assume elasticity is negative.
This is why the change is a decrease in quantity demanded.