Answer and Explanation:
1. Land Dr $350,000 ($12,500 × $100 × $400,000 ÷ $2,400,000)
Building Dr $1,050,000 ($12,500 × $100 × $1,200,000 ÷ $2,400,000)
Machinery and equipment Dr $700,000 ($12,500 × $100 × $800,000 ÷ $2,400,000)
To Common stock ($12,500 × $100) $1,250,000
To Paid in capital in excess of par $850,000
(Being the acquisition is recorded)
2. Building Dr ($105,000 + $161,000) $261,000
Machinery and equipment Dr $135,000
Land improvement Dr $122,000
Land Dr $18,000
To Cash $541,000
(being the cash paid is recorded)
3. Machinery and equipment Dr $256,300 ($260,000 × 98%)
To cash
,(being cash paid is recorded)
Under the laws of agency, partners of a CPA firm may be liable for the work of others on whom they rely. This would not include:
Answer: employees of the audit client.
Explanation:
The options to the question are:
A. employees of the CPA firm.
B) employees of the audit client.
C) other CPA firms engaged to do part of the audit work.
D) specialists employed by the CPA firm to provide technical advice on the audit.
Agency law simply means the agent-principal relationships which is a relationship whereby one party has a legal authority to act and represent the other party.
Based on the above question, the partners of CPA firm are liable for the work of the firm that they are representing. In this case, they'll be liable for the employees of the CPA firm, other CPA firms engaged to do part of the audit work and the specialists employed by the CPA firm to provide technical advice on the audit.
Therefore, the employees of the audit client is not part of the people that them. Hence, this is the answer.
If a new restaurant owner determines that she does not have sufficient funds to open a new location, where does this determination belong in her SWOT analysis?
Answer:
This determination belongs to "W" in SWOT analysis.
Explanation:
SWOT is an analyzing technique of the organizations. It stands for Strength, Weakness, Opportunities, and Threats. Here, strength includes various resources in which the company is doing better whereas weaknesses include the inefficiency of the company. Opportunity refers to various other alternatives for the company and threat includes various possibilities or situations that can harm the company, for example, emerging competition. Therefore, we can say that not having sufficient funds is a part of “W” in the SWOT analysis.
Pronghorn Company purchased equipment for $251,930 on October 1, 2017. It is estimated that the equipment will have a useful life of 8 years and a salvage value of $14,160. Estimated production is 40,300 units and estimated working hours are 20,100. During 2017, Pronghorn uses the equipment for 530 hours and the equipment produces 1,100 units. Compute depreciation expense under each of the following methods. Pronghorn is on a calendar-year basis ending December 31. (Round rate per hour and rate per unit to 2 decimal places, e.g. 5.35 and final answers to 0 decimal places, e.g. 45,892.)
Answer:
Pronghorn Company
Depreciation Expense under Production Hours & Production Units:
c) Production Unit:
Depreciation Rate =Depreciable amount/Production hours
= $5.90 per unit
for 1,100 units, Depreciation expense = 1,100 x $5,90 = $6,490
b) Production hours:
Depreciation Rate = Depreciable amount/Production hours
= $237,770/20,100 = $11.83 per hour
For 530 hours, depreciation expense = 530 x $11.83 = $6,270
Explanation:
1. Data:
Pronghorn Company:
October 1, 2017
Purchase of Equipment for $251,930
Salvage value 14,160
Depreciable amount $237,770
2. Depreciation Expenses based on production hours and hours are some of the methods to depreciate an equipment used for production. Using these methods, the depreciation rate is determined and then multiplied by usage (hours or units) to obtain the depreciation expense for the period. The methods are simple and logical for depreciating production equipment.
the nominal interest rate is 7 percent and the expected inflation rate is 4 percent. the real interest rate is
Answer:
2.88%
Explanation:
According to the fisher equation :
(1 + Nominal interest ) = (1 + real interest) (1 + inflation rate)
(1.07) = (1.04) x (1 + real interest)
(1.07) / (1.04) = (1 + real interest)
1.028846
real interest rate = 2.88%
Determine the ending inventory using the periodic inventory system and the weighted average cost method (rounded to the nearest cent), assuming that 18 units were sold at a price of $14. Date Item Units Cost Total June 1 Beginning inventory 6 $5 $30 June 12 Purchase 10 6 60 June 18 Purchase 8 7 56 Totals 24 — $146 a.$36.48 b.$109.44 c.$145.92 d.$56.00
Answer:
The ending inventory using the periodic inventory system and the weighted average cost method is $36.48
Explanation:
Weighted Average Method.
The average cost of goods held is recalculated each time a new delivery of goods is received. Issues are then priced out at this weighted average cost.
First Calculate the average cost per unit
average cost per unit = Total cost / total units
= ($30 + $60 + $56) / 24
= $6.08
Then calculate ending inventory cost
ending inventory cost = units at hand × average cost per unit
= 6 units × $6.08333
= $36.48
Conclusion :
The ending inventory using the periodic inventory system and the weighted average cost method is $36.48
Park Co. is considering an investment that requires immediate payment of $27,000 and provides expected cash inflows of $9,000 annually for four years. If Park Co. requires a 10% return on its investments. What is the internal rate of return
Answer:
IRR = 12.92%
Explanation:
The IRR is the discount rate that equates the present value of cash inflows to that of cash outflows. At the IRR, the Net Present Value (NPV) of a project is equal to zero
If the IRR greater than the required rate of return , we accept the project for implementation
If the IRR is less than that the required rate , we reject the project for implementation
A project that provides annual cash flows of $24,000 for 9 years costs $110,000 today. Under the IRR decision rule, is this a good project if the required return is 8 percent?
Lets Calculate the IRR
Step 1: Use the given discount rate of 10% and work out the NPV
NPV = 9000× (1-1.10^(-4)/0.1) - 27,000 =1528.78
Step 2 : Use discount rate of 20% and work out the NPV (20% is a trial figure)
NPV = 9000× 1- 1.20^(-4)/0.2 - 27000 = -3701.38
Step 3: calculate IRR
IRR = a% + ( NPVa/(NPVa + NPVb)× (b-a)%
IRR = 10% + 1528.78/(1528.78+3701.38)× (20-10)%= 0.12923
= 0.129230153 × 100
IRR = 12.92%
A total asset turnover ratio of 5.1 indicates that: Multiple Choice For every $1 in sales, the firm acquired $5.1 in assets during the period. For every $1 in assets, the firm produced $5.1 in net sales during the period. For every $1 in assets, the firm earned gross profit of $5.1 during the period. For every $1 in assets, the firm earned $5.1 in net income. For every $1 in assets, the firm paid $5.1 in expenses during the period.
Answer:
For every $1 in assets, the firm produced $5.1 in net sales during the period.
Explanation:
The formula to compute the total asset turnover ratio is shown below:
Total Asset turnover ratio = Net Sales ÷ Average Total Asset
where,
Net sales come after deducting the sales discounts, and other expenses
And, the average total assets could be computed by taking an average of opening and closing total assets
So, the total asset turnover shows that for every $1 of assets would create $5.1 of sales
Hence, the first option is correct
Consider the following income statement for the Heir Jordan Corporation:
HEIR JORDAN CORPORATION
Income Statement
Sales $ 46,200
Costs 34,200
Taxable income $ 12,000
Taxes (30%) 3,600
Net income $ 8,400
Dividends $ 2,800
Addition to retained earnings 5,600
The balance sheet for the Heir Jordan Corporation follows. Based on this information and the income statement, supply the missing information using the percentage of sales approach. Assume that accounts payable vary with sales, whereas notes payable do not. (Leave no cells blank - be certain to enter "0" whenever the item is not a constant percentage of sales. Enter each answer as a percent rounded 2 decimal places, e.g., 32.16.)
HEIR JORDAN CORPORATION
Balance Sheet
Percentage of Sales Percentage of Sales
Assets Liabilities and Owners’ Equity
Current assets Current liabilities
Cash $ 2,450 Accounts payable $ 4,000
Accounts receivable 4,000 Notes payable 8,400
Inventory 9,000
Total $ 15,450 Total $ 12,400
Long-term debt $ 21,000
Owners’ equity
Common stock and paid-in surplus $ 14,000
Retained earnings 5,650
Fixed assets
Net plant and equipment $ 37,600 Total $ 19,650
Total assets $ 53,050 Total liabilities and owners’ equity $ 53,050
Answer and Explanation:
The preparation of the balance sheet is prepared below:-
Assets Amount Percentage Liabilities Amount Percentage
Cash 2,450 5.30% Payable 4,000 8.66%
Receivables 4,000 8.66% Notes 8,400 0
Inventory 9,000 19.48% Total Current 12,400 0
Total 15,450 33.44% Debt 21,000 0
Fixed
Assets 37,600 81.39% Common Stock 14,000 0
Total 53,050 114.83% Retained Earnings 5,650 0
Total Equity 19,650 0
Total Liabilities & OE 53,050 0
In this question, the total assets and the account payable are varied with the sales while on the other hand there is no requirement for liabilities and equity
Moreover, we divided all assets and account payable with sales of $46,200 and in other columns we put 0 as shown above
Phoenix Company's 2015 master budget included the following fixed budget report. It is based on an expected production and sales volume of 15,000 units
PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2015
Sales $ 3,150,000
Cost of goods sold
Direct materials $975,000
Direct labor 240,000
Machinery repairs (variable cost) 60,000
Depreciation-plant equipment
(straight-line) 315,000
Utilities ($60,000 is variable) 180,000
Plant management salaries 190,000 1,960,000
Gross profit 1,190,000
Selling expenses
Packaging 75,000
Shipping 105,000
Sales salary (fixed annual amount) 235,000 415,000
General and administrative expenses
Advertising expense 100,000
Salaries 230,000
Entertainment expense 80,000 410,000
Income from operations $365,000
1&2. Prepare flexible budgets for the company at sales volumes of 14,000 and 16,000 units and classify all items listed in the fixed budget as variable or fixed.
3. The company's business conditions are improving. One possible result is a sales volume of approximately 18,000 units. The company president is confident that this volume is within the relevant range of existing capacity. How much would operating income increase over the 2015 budgeted amount of $365,000 if this level is reached without increasing capacity?
Answer:
Explanation:
15,000 14,000 16,000 Unit cost
Sales 3,150,000 2,940,000 3,360,000 210
Cost of goods
Direct materials 975,000 910,000 1,040,000 65
Direct labor 240,000 224,000 256,000 16
Machinery repairs 60,000 56,000 64,000 4
Utilities 60,000 56,000 64,000 4
Packaging 75,000 70,000 80,000 5
Shipping 105,000 98,000 112,000 7
Total variable expenses 1,515,000 1,414,000 1,616,000 101
Contribution 1,635,000 1,526,000 1,744,000 109
Fixed cost
Depreciation 315,000 315,000 315,000
Utilities 120,000 120,000 120,000
Plant salary 190,000 190,000 190,000
Sales salary 235,000 235,000 235,000
Advertising 100,000 100,000 100,000
salaries 230,000 230,000 230,000
Entertainment 80,000 80,000 80,000
Total fixed expenses 1,270,000 1,270,000 1,270,000
Profit 365,000 256,000 474,000
For 18,000 units
Sales - 18,000* 210 3,780,000
Variable cost (109*18) = 1,962,000
Fixed cost 1,270,000
Operating income 548,000
Increase over 2015 = 365,000 - 548,000= 183,000
The placing of direct materials into the production process is recorded by an entry debiting:_________.A. Materials Expense.
B. Raw Materials Inventory.
C. Work in Process Inventory.
D. Finished Goods Inventory.
Answer: C. Work in Process Inventory.
Explanation:
When Raw Materials are purchased they are simply put into the Materials Account.
When the company needs to start working on them however, they will transfer the raw materials to the Work in Progress account which records the Direct Materials and Direct Labor that are used in the Production process. By Debuting this account they indicate that the materials in it have increased.
n January, Marigold company requisitions raw materials for production as follows: Job 1 $920, Job 2 $1,600, Job 3 $720, and general factory use (indirect materials) $700. Prepare a summary journal entry to record raw materials used. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Answer and Explanation:
The summarized journal entry for using the raw material is shown below:
Work in process inventory $3,240 ($920 + $1,600 + $720) Dr
Manufacturing overhead 700 Dr
To Raw material inventory $3,940
(Being the raw material used is recorded)
For recording this we debited the work in process and factory overhead as it increased the assets and expenses and credited the raw material inventory as it decreased the assets
In Japan, the _____ helps small companies identify potential export opportunities.
a. MITI
b. IMF
c. WTO
d. ITA
e. USEAC
Answer:
a. MITI
Explanation:
In Japan, the MITI helps small companies identify potential export opportunities
The full meaning of MITI his Ministry of International Trade and Industry which is the ministry which is responsible for always on the lookout for export opportunities and they are as well responsible for industry, investment, productivity as well as small and medium enterprise.
Lastly MITI also help in controlling Japan's foreign trade as well as helping to supervise the international commerce and ensuring the smooth flow of goods and service in the national economy.
One of the limitations of aggregate accounting is that: Multiple Choice it includes market transactions that should be excluded. it doesn't take depreciation into account. it measures market activity, not social welfare. there isn't enough data available in most developed countries to have national income accounts.
Answer:
The correct answer is: it measures market activity, not social welfare.
Explanation:
Aggregate accounting is the process of collecting different data from almost all financial accounts of a family or individual in a single location.
Therefore, although this is an efficient indicator for measuring a country's economic activity, it cannot be used as a measure of social well-being, as it does not understand essential aspects that promote human well-being. One of its limitations is that the index does not include non-market transactions, the degree of social income inequality, environmental degradation, the negative externalities of the productive system, etc.
How can you avoid spending more than what is in your
bank account?
Check your bank statement once a month.
Ask your financial institution to notify you when you
are close to $0 in your account.
Keep your own records to compare with your
financial institution's records.
None of the above
Answer:
Check your bank statement once a month.
Ask your financial institution to notify you when you are close to $0 in your account.
Keep your own records to compare with your financial institution's records.
Explanation:
The three statements above represent ways that can be used to avoid spending more than what is in one's bank account.
Cheking one's bank statement once a month is the most effective method: by doing so, one can get informed about the exact amount of money left in the account.
Asking one's financial institution to notify you when you are close to $0 is also a good measure, although it could be dangerous to depend on that warning in case one has a tendency to overspend, and the notification comes too early in the month.
Finally, keeping personal records to compare with the records of the bank is more like a learning excercise, that also helps, but it is less effective because it is the bank record that will be right all of the time.
Answer: check your bank statement once a month
Explanation:
Compared to _____% in 1977, the labor force participation rate for men is now approximately ______% and is expected to decrease through 2024 to _____%
Answer: 59; 53; 52
Explanation: Compared to 59% in 1977, the labor force participation rate for men is now approximately 53% and is expected to decrease through 2024 to 52%.
What is the value of zero-coupon bond with a par value of $1,000 and a yield to maturity of 5.20%? The bond has 12 years to maturity.
Answer:
$544.265
Explanation:
Given:
FV = $1,000
Yield to maturity = 5.2%
N = 12 years
Required:
Find the value of the zero coupon bond.
Use the formula:
PV = FV * PVIF(I/Y, N)
Thus,
PV = 1000 * PVIF(5.2%, 12)
= 1000 * 0.544265
= $544.265
The value of the zero coupon bond is $544.3
The next dividend payment by Savitz, Inc., will be $2.12 per share. The dividends are anticipated to maintain a growth rate of 8 percent forever. If the stock currently sells for $43 per share, what is the required return?
Answer:
The answer is 12.9%
Explanation:
This question will be solved using the Dividend Discount Model(DDM).
Po = D1/r - g
Po is the current worth of stocks
D1 is the next dividend paid
r is the rate of return
g is the growth rate
$43 = $2.12/ r - 0.08
43r - 3.44 = 2.12
43r = 5.56
r = 5.56/43
=0.129
Expressed as a percentage:
The required return for Savitz, Inc., is therefore 12.9%
Suppose you're in charge of establishing economic policy for this small island country. Which of the following policies would lead to greater productivity in the weaving industry? Check all that apply. Sharply increasing the interest rate on student loans to people pursuing advanced degrees in weaving Imposing restrictions on foreign ownership of domestic capital Encouraging saving by allowing workers to set aside a portion of their earnings in tax-free retirement accounts Imposing a tax on looms
Answer:
Encouraging saving by allowing workers to set aside a portion of their earnings in tax-free retirement
Imposing restrictions on foreign ownership of domestic capital
Explanation:
Hiram’s Lakeside is a popular restaurant located on Lake Washington in Seattle. The owner of the restaurant has been trying to better understand costs at the restaurant and has hired a student intern to conduct an activity-based costing study. The intern, in consultation with the owner, identified three major activities and then completed the first-stage allocations of costs to the activity cost pools. The results appear below: Activity Cost Pool Activity Measure Total Cost Total Activity Serving a party of diners Number of parties served $ 33,000 6,000 parties Serving a diner Number of diners served $ 138,000 15,000 diners Serving a drink Number of drinks ordered $ 24,000 10,000 drinks The above costs include all of the costs of the restaurant except for organization-sustaining costs such as rent, property taxes, and top-management salaries. Some costs, such as the cost of cleaning the linens that cover the restaurant's tables, vary with the number of parties served. Other costs, such as washing plates and glasses, depends on the number of diners served or the number of drinks served. Prior to the activity-based costing study, the owner knew very little about the costs of the restaurant. She knew that the total cost for the month (including organization-sustaining costs) was $240,000 and that 15,000 diners had been served. Therefore, the average cost per diner was $16.
Required:
1. According to the activity-based costing system, what is the total cost of serving each of the following parties of diners? (Round your intermediate calculations and final answers to 2 decimal places.)
a. A party of four dinners who order three drinks-?
b. A party of two dinners who do not order any drinks-?
c. A party of one dinner who order two drinks-?
2. Convert the total costs you computed in (1) above to costs per diner. In other words, what is the average cost per diner for serving each of the following parties? (Round your intermediate calculations to 2 decimal places and final answers to 3 decimal places.)
a. A party of four dinners who order three drinks-?
b. A party of two dinners who do not order any drinks-?
c. A party of one dinner who order two drinks-?
Answer:
Kindly check attached picture
Explanation:
Required:
1. According to the activity-based costing system, what is the total cost of serving each of the following parties of diners? (Round your intermediate calculations and final answers to 2 decimal places.)
a. A party of four dinners who order three drinks-?
b. A party of two dinners who do not order any drinks-?
c. A party of one dinner who order two drinks-?
2. Convert the total costs you computed in (1) above to costs per diner. In other words, what is the average cost per diner for serving each of the following parties? (Round your intermediate calculations to 2 decimal places and final answers to 3 decimal places.)
a. A party of four dinners who order three drinks-?
b. A party of two dinners who do not order any drinks-?
c. A party of one dinner who order two drinks-?
Kindly check attached picture for detailed explanation.
Average cost per dinner is $12.375, $11.95, $19.50 respectively
Average cost based problem:Computation:
1.A.
Activity pool Activity rate Activity Activity cost
Parties $5.5 1 $5.5
Dinners $9.2 4 $36.8
Drinks $2.4 3 $7.2
Total $49.50
1.B.
Activity pool Activity rate Activity Activity cost
Parties $5.5 1 $5.5
Dinners $9.2 2 $18.4
Drinks $2.4 0 0
Total $23.9
1.C.
Activity pool Activity rate Activity Activity cost
Parties $5.5 1 $5.5
Dinners $9.2 1 $9.2
Drinks $2.4 2 $4.8
Total $19.50
2. Average cost per dinner
A = 49.50 / 4 = $12.375 per dinner
B =23.9 / 2 = $11.95 per dinner
C = 19.50 / 1 = $19.50 per dinner
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Hitzu Co. sold a copier costing $7,500 with a two-year parts warranty to a customer on August 16, 2017, for $15,000 cash. Hitzu uses the perpetual inventory system. On November 22, 2018, the copier requires on-site repairs that are completed the same day. The repairs cost $107 for materials taken from the repair parts inventory. These are the only repairs required in 2018 for this copier. Based on experience, Hitzu expects to incur warranty costs equal to 4% of dollar sales. It records warranty expense with an adjusting entry at the end of each year. 1. How much warranty expense does the company report in 2017 for this copier
Answer:
$600
Explanation:
The computation of the warranty expense for the year 2017 is shown below:
Warranty expense is
= Sales value in dollars × warranty cost percentage
= $15,000 × 4%
= $600
By multiplying the sales value with the warranty cost percentage so that the warranty expense could come and the same is to be considered
Therefore the other items values are not considered as they are not relevant
Investors expect the market rate of return this year to be 14.50%. The expected rate of return on a stock with a beta of 1.2 is currently 17.40%. If the market return this year turns out to be 12.10%, how would you revise your expectation of the rate of return on the stock?
Answer:
14.52%
Explanation:
The computation of the rate of return on the stock is shown below:-
The expected rate of return on the stock = Beta × (Rate of return - Market rate of return)
= 1.2 × (0.121 - 0.145)
= - 2.88%
So, the expected rate of return on the stock = Current percentage - expected rate of return on the stock
= 0.174 - 0.0288
= 14.52%
Therefore we simply applied the above formulas
When analyzing stages of economic development in the United States, it appears that we have entered the "tertiary stage." This is a stage marked by a shift toward:_______
A) agriculture.B) manufacturing.C) services.D) population increases.
Answer:
C) services.
Explanation:
This is easily explained to be the stepping in to a tertiary stage. As it is explained that economic development analysis stages consists of different phases and levels. This services that is been denoted in this growth in the US plays a key role in financial services, humanity, health and other visible relevant parts which help in the building and aiding of economic growth of a country's economy.
Information technology and educational services in a product offering. These services are seen to boost different parts of an economy especially in developing countries is mostly concentrated in financial services, hospitality, retail, health and human services.
The manufacturing of semiconductor chips produces 2% defective chips. Assume the chips are independent and that a lot contains 1000 chips.
(a) Approximate the probability that more than 25 chips are defective.
(b) Approximate the probability that between 20 and 30 chips are defective.
Answer:
P(X>25)=0.107488
P(20<X<30)= 0.440427
0r 0.53490
Explanation :
Given from the question that the percentage of defective chips produced in the manufacturing of semiconductor is 2%
We are to Assume that the chips are independent and that a lot contains 1000 chips.
Then the following probabilities are to be estimated
a)More than 25 chips are defective
b)Between 20 and 30 chips are defective.
The percentage of defective chips produced in the manufacturing of semiconductor is 2%, therefore, our p=0.02.
The total number of chips, hence our n=1000.
Let X denote the number of defective chips in the manufacturing of semiconductor. So we will be able to calculate our mean
So the mean of X,
np= (10000.02). = 20
The variance of X can also be calculated as
np(1-p)= (10000.020.98). = 19.6
nq= n(1-p)=1000(1-0.2)=980 >5
Since np>5 and n(1-p)>5, then the requirements are satisfied
a) the z- score which is the value decreased by the mean value np and divided by the standard deviation now = np(1-p)
Z=
can be determined here
Z= x-np/√np(1-p)
z= [25.5-1000(0.02)]/√[1000(0.02)(1-0.02)]
z=1.24
if we check the normal distribution table using P(X>25)= P(X>25.5) = P(z>1.24) then we have the value of 0.107488
b) z= 20.5-1000(0.2)/√1000(0.02)(1-0.02)
z= 0.11
z= x-np/√np-(1-np)
z= 29.5-1000(0.2)/√1000(0.02)(1-0.02) = 2.15
CHECK THE ATTACHMENT TO COMPLETE THE SOLUTION
Probabilities are used to determine the chances of events
The given parameters are:
[tex]p = 2\%[/tex] --- the proportion of defective chips[tex]n =1000[/tex] --- the number of defective chipsStart by calculating the mean and the standard deviation
[tex]\bar x = np[/tex]
[tex]\bar x = 2\% \times 1000[/tex]
[tex]\bar x = 20[/tex] --- the mean
[tex]\sigma = \sqrt{\bar x \times (1 -p)}[/tex]
[tex]\sigma = \sqrt{20 \times (1 -2\%)}[/tex]
[tex]\sigma = 4.43[/tex] ---the standard deviation
(a) The probability that more than 25 chips are defective
Using continuity correction, the probability is represented as:
[tex]P(x > 25) = P(x > 25.5)[/tex]
Start by calculating the z-score using:
[tex]z = \frac{x - \bar x}{\sigma}[/tex]
So, we have:
[tex]z = \frac{25.5 - 20}{4.43}[/tex]
[tex]z = \frac{5.5}{4.43}[/tex]
[tex]z = 1.241[/tex]
The probability is then represented as:
[tex]P(x > 25) = P(z > 1.241)[/tex]
Using z probability calculator, we have:
[tex]P(x > 25) = 0.1073[/tex]
Hence, the probability that more than 25 chips are defective is 0.1073
(b) The probability that between 20 and 30 chips are defective
Using continuity correction, the probability is represented as:
[tex]P(20 < x < 30) = P(20.5 < x < 29.5)[/tex]
Start by calculating the z-scores for both x values:
[tex]z = \frac{x - \bar x}{\sigma}[/tex]
So, we have:
[tex]z = \frac{20.5 - 20}{4.43}[/tex]
[tex]z = \frac{0.5}{4.43}[/tex]
[tex]z = 0.113[/tex]
[tex]z = \frac{29.5 - 20}{4.43}[/tex]
[tex]z = \frac{9.5}{4.43}[/tex]
[tex]z = 2.144[/tex]
The probability is then represented as:
[tex]P(20 < x < 30) = P(0.113 < z < 2.144)[/tex]
Rewrite as:
[tex]P(20 < x < 30) =P( z < 2.144) - P(z < 0.113 )[/tex]
Using z probability calculator, we have:
[tex]P(20 < x < 30) =0.98398 - 0.54498[/tex]
[tex]P(20 < x < 30) =0.4390[/tex]
Hence, the probability that between 20 and 30 chips are defective is 0.4390
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On April 1, 10,000 shares of $20 par common stock were issued at $24.
Required:
Illustrate the effects on the accounts and the financial statements.
Answer:
The journal entry to record this transaction would be:
April 1, 10,000 shares issued
Dr Cash 240,000
Cr Common stock 200,000
Cr Additional paid in capital 40,000
The balance sheet is affected:
Assets = Liabilities + Stockholders' equity
Cash = NA Common stock APIC
$240,000 $200,000 + $40,000
increases increases increases
The cash flow statement is also affected since cash from financing activities increases by $240,000. The statement of shareholders' equity is also affected because equity increases by $240,000.
The income statement is not affected.
The present value of the following cash flow stream is $7151.29 when discounted at 11 percent annually. What is the value of the missing cash flow?
year cashflow
1 $2000
2 ?
3 $1750
4 $1250
Answer:
The value of the missing cash flow is $4000.
Explanation:
The present value of a stream of cash flows can be calculated using the following formula for present value.
Present Value = Cash Flow 1 / (1+r) + Cash Flow 2 / (1+r)^2 + ... + Cash Flow N / (1+r)^N
Where,
r is the discount rateN is the nth number/period of cash flowAs we already know the present value and the other cash flow, we will plug in these values in the formula to calculate the missing cash flow.
Let the missing cash flow be x.
7151.29 = 2000 / (1+0.11) + x / (1+0.11)^2 + 1750 / (1+0.11)^3 +
1250 / (1+0.11)^4
7151.29 = 1801.801802 + x / (1+0.11)^2 + 1279.584917 + 823.4137177
7151.29 - 3904.800437 = x / (1.11)^2
3246.489563 * (1.11)^2 = x
x = $3999.999791 rounded off to $4000
Thus the value of the missing cash flow is $4000.
Corporation had net income for 2016 of $ 42 comma 000. GAZ had 16 comma 000 shares of common stock outstanding at the beginning of the year and 14 comma 000 shares of common stock outstanding as of December 31, 2016. During the year, GAZ declared and paid preferred dividends of $ 4 comma 500. Therefore, GAZ's earnings per share for 2016 is $ 2.50. Assume the market price of GAZ's common stock is $ 12 per share. Compute GAZ's price/earnings ratio. Select the formula, then enter the amounts to calculate the company's price/earnings ratio as of December 31, 2016. (Abbreviations used: Ave. = average, OS = outstanding, SE = stockholders' equity, shrs = shares. Round the ratio to two decimal places.) / = Price/earnings ratio / =
Answer:
GAZ's price/earnings ratio is 4.8
Explanation:
In order to calculate GAZ's price/earnings ratio we would have to calculate the following formula:
GAZ's price/earnings ratio=market value per share/earnings per share
market value per share= $ 12
earnings per share=net income- preferred dividend/Average number of common shares
earnings per share=$42,000-$4,500/(16,000+14,000)/2
earnings per share=$2.50
Therefore, GAZ's price/earnings ratio= $ 12/$2.50
GAZ's price/earnings ratio=4.8
GAZ's price/earnings ratio is 4.8
Moody Corporation uses a job-order costing system with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates:
Machine-hours required to support estimated production 155,000
Fixed manufacturing overhead cost $ 653,000
Variable manufacturing overhead cost per machine-hour $ 4.70
Required:
1. Compute the plantwide predetermined overhead rate.
2. During the year, Job 400 was started and completed. The following information was available with respect to this job:
Direct materials $ 390
Direct labor cost $ 220
Machine-hours used 37
Compute the total manufacturing cost assigned to Job 400.
3. If Job 400 includes 60 units, what is the unit product cost for this job?
4. If Moody uses a markup percentage of 120% of its total manufacturing cost, then what selling price per unit would it have established for Job 400?
find- Predetermined overhead rate =
total manufacturing cost=
If Job 400 includes 60 units, what is the unit product cost for this job?
If Moody uses a markup percentage of 120% of its total manufacturing cost, then what selling price per unit would it have established for Job 400?
Answer:
Instructions are below.
Explanation:
Giving the following information:
Machine-hours required to support estimated production 155,000
Fixed manufacturing overhead cost $ 653,000
Variable manufacturing overhead cost per machine hour $ 4.70
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= (653,000/155,000) + 4.7
Predetermined manufacturing overhead rate= $8.91 per machine hour
Job 400:
Direct materials $ 390
Direct labor cost $ 220
Machine-hours used 37
To allocate overhead, we need to use the following formula:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 8.91*37= $329.67
Now, we can calculate the total cost and unitary cost:
Total cost= 390 + 220 + 329.67= 939.67
Unitary cost= 939.67/60= $15.66
Finally, the selling price for Job 400:
Selling price0 939.67*1.2= $1,127.6
Suppose that a firm makes two products, A and B. The sales mix in units for the period is 70% for A and 30 % for B. If the unit contribution margin for A is $8.04 and the unit contribution margin for B is $5.92, then the weighted-average unit contribution margin is:
Answer:
The weighted-average unit contribution margin is $7.40
Explanation:
The weighted average unit contribution margin is given by the below formula:
weighted-average unit contribution margin=Wa*Margin of A+Wb*Margin of B
Wa is the weight of product A=70% or 0.70
Margin of product A is $8.04
Wb is the weight of product B =30% or 0.30
Margin of product B is $5.92
weighted-average unit contribution margin=(0.70*$8.04)+(0.30*$5.92)
weighted-average unit contribution margin=$ 7.40
The weighted-average unit contribution margin is $7.40
What is the weighted-average unit?Although, The weighted average unit contribution margin is given by the below formula:
weighted-average unit contribution margin=Wa*Margin of A+Wb*Margin of B Wa is that the weight of product A=70% or 0.70
The margin of product A is $8.04
Wb is that the weight of product B =30% or 0.30
The margin of product B is $5.92
weighted-average unit contribution margin=(0.70*$8.04)+(0.30*$5.92)
weighted-average unit contribution margin=$ 7.40
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Classy Cruiseline offers nightly dinner cruises departing from several cities on the eastern coast of the United States including Charleston, Baltimore, and Alexandria. Dinner cruise tickets sell for $ 80 per passenger. Classy Cruiseline's variable cost of providing the dinner is $ 40 per passenger, and the fixed cost of operating the vessels (depreciation, salaries, docking fees, and other expenses) is $ 360 comma 000 per month. The company's relevant range extends to 16 comma 000 monthly passengers. Use this information to compute the following: a. What is the contribution margin per passenger? b. What is the contribution margin ratio? c. Use the unit contribution margin to project operating income if monthly sales total 13 comma 000 passengers. d. Use the contribution margin ratio to project operating income if monthly sales revenue totals $ 775 comma 000.
Answer:
a. Contribution margin per passenger = $40
b. Contribution margin ratio = 50%
c. Operating Income = $160,000
d. Operating Income = $27,500
Explanation:
a. Contribution margin per passenger = Ticket price per passenger - Variable cost per passenger
Contribution margin per passenger = $80 - $40
Contribution margin per passenger = $40
b. Contribution margin ratio = Contribution margin per passenger / Ticket price per passenger
Contribution margin ratio = $40 / $80
Contribution margin ratio = 0.5
Contribution margin ratio = 50%
c. Contribution margin per passenger = $40
Sales (in units) = 13,000 Passengers
Total Contribution = $520,000
Fixed Costs = $360,000
Operating Income = $160,000
d. Sales revenue = $775,000
Contribution margin ratio = 50%
Total Contribution =$387,500 ($775,000 * 50%)
Fixed Costs = $360,000
Operating Income = $27,500
Spiro Hospital is investigating the possibility of investing in new dialysis equipment. Two local manufacturers of this equipment are being considered as sources of the equipment. After-tax cash inflows for the two competing projects are as follows: Year Puro Equipment Briggs Equipment 1 $320,000 $120,000 2 280,000 120,000 3 240,000 320,000 4 160,000 400,000 5 120,000 440,000 Both projects require an initial investment of $560,000. In both cases, assume that the equipment has a life of 5 years with no salvage value. Required: Round present value calculations and your final answers to the nearest dollar. 1. Assuming a discount rate of 12%, compute the net present value of each piece of equipment.
Answer:
NPV for puro = $289,529.95
NPV for briggs = $374,450.85
Explanation:
Net present value is the present value of after tax cash flows from an investment less the amount invested.
net present value can be calcuated using a financal calcuatopr
Puro Equipment
cash flow in year 0 = $-560,000
cash flow in year 1= $320,000
cash flow in year 2 = $280,000
cash flow in year 3 = $240,000
cash flow in year 4 = 160,000
cash flow in year 5 = 120,000
I = 12%
NPV = $289,529.95
Briggs Equipment
cash flow in year 0 = $-560,000
cash flow in year 1= $120,000
cash flow in year 2= $120,000
cash flow in year 3= $320,000
cash flow in year 4= 400,000
cash flow in year 5= 440,000
I = 12%
NPV = $374,450.85
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
The computation of the net present values of the two equipment are as follows:
Puro Equipment Briggs Equipment
Initial investment ($560,000) ($560,000)
Present value of cash inflows $849,600 $934,520
Net present value $289,600 $374,520
Data and Calculations:
Estimated useful life = 5 years
Discount factor = 12%
Initial cash outlay in each equipment = $560,000
Year Puro Equipment
Cash Flows PV Factor Present Value
0 ($560,000) 1 ($560,000)
1 $320,000 0.893 285,760
2 280,000 0.797 223,160
3 240,000 0.712 170,880
4 160,000 0.636 101,760
5 120,000 0.567 68,040
Total present value of cash inflows $849,600
Net present value = $289,600
Year Briggs Equipment
Cash Flows PV Factor Present Value
0 ($560,000) 1 ($560,000)
1 $120,000 0.893 107,160
2 120,000 0.797 95,640
3 320,000 0.712 227,840
4 400,000 0.636 254,400
5 440,000 0.567 249,480
Total present value of cash inflows $934,520
Net present value = $374,520
Thus, the net present value of Puro Equipment is $289,600 while that of Briggs Equipment is $374,520.
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