Answer:
A. a separate schedule.
Explanation:
This is explained to be cash flow schedule or also cash flow statement. It is explained to be on out of the three financial statement which used generally to report for cash which been generated and how this money has been totally been spent within a period or interval which could be a week, month, quarter or even probably a year.
In the statement of cash flows, the cash flows are known to be generated from investing activities section while inclusion of receipts from the sale of investments. This is why in the stated 20 year payable bond, it is known to have been recorded in statement of cash flows in a separate schedule.
The financial statement effects of the budgeting process are summarized on the cash budget and the capital expenditures budget. true or false
Answer:
true
Explanation:
Chad, a sole proprietor of a private boat charter business, purchased and placed into service ten boats for $260,000 each on May 1, Year 1. These were the only assets Chad placed into service in Year 1. Assume the boats have a 10 year MACRS recovery period. What is the maximum amount, if any, that Chad can deduct in Year 1 if he does not elect out of bonus depreciation
Answer:
The maximum amount that Chad can depreciate in yer 1 if he decides not to elect bonus depreciation is $26,000
Explanation:
MACRS 10 year depreciation rate of recovery half year convention:
Year Depreciation % Purchase cost Depreciation
1 10% $260,000 $26,000
2 18% $260,000 $46,800
3 14.40% $260,000 $37,440
4 11.52% $260,000 $29,952
5 9.22% $260,000 $23,972
6 7.37% $260,000 $19,162
7 6.55% $260,000 $17,030
8 6.55% $260,000 $17,030
9 6.56% $260,000 $17,056
10 6.55% $260,000 $17,030
11 3.28% $260,000 $8,528
Charlie’s Furniture Store has been in business for several years. The firm's owners have described the store as a "high-price, high-service" operation that provides lots of assistance to its customers. Margin has averaged a relatively high 34% per year for several years, but turnover has been a relatively low 0.4 based on average total assets of $800,000. A discount furniture Store is about to open in the area served by Charlie's, and management is considering lowering prices to compete effectively.Required:a. Calculate current sales and ROI for Charlie’s Furniture Store. (Round your "ROI" to 1 decimal place.)b. Assuming that the new strategy would reduce margin to 20%, and assuming that average total assets would stay the same, calculate the sales that would be required to have the same ROI as Charlie’s currently earns. (Do not round intermediate calculations.)c. Suppose you presented the results of your analysis in parts a and b of this problem to Charlie, and he replied, "What are you telling me? If I reduce my prices as planned, then I have to practically double my sales volume to earn the same return?" Given the results of your analysis, what is the actual amount of increase in sales required? (Do not round intermediate calculations.)d. Now suppose Charlie says, "You know, I'm not convinced that lowering prices is my only option in staying competitive. What if I were to increase my marketing effort? I'm thinking about kicking off a new advertising campaign after conducting more extensive market research to better identify who my target customer groups are." In general, explain to Charlie what the likely impact of a successful strategy of this nature would be on margin, turnover, and ROI.
Answer:
a. Calculate current sales and ROI for Charlie’s Furniture Store.
asset turnover formula = net sales / average assets
0.4 = net sales / $800,000
net sales = $320,000
ROI = net income / investment
net income = $320,000 x 34% = $108,800
ROI = $108,800 / $800,000 = 13.6%
b. Assuming that the new strategy would reduce margin to 20%, and assuming that average total assets would stay the same, calculate the sales that would be required to have the same ROI as Charlie’s currently earns.
net income = net sales x 20% (new margin)
net sales = $108,800 / 20% = $544,000
c. Suppose you presented the results of your analysis in parts a and b of this problem to Charlie, and he replied, "What are you telling me? If I reduce my prices as planned, then I have to practically double my sales volume to earn the same return?" Given the results of your analysis, what is the actual amount of increase in sales required?
sales increase = ($544,000 - $320,000) / $320,000 = 70% increase
d. Now suppose Charlie says, "You know, I'm not convinced that lowering prices is my only option in staying competitive. What if I were to increase my marketing effort? I'm thinking about kicking off a new advertising campaign after conducting more extensive market research to better identify who my target customer groups are." In general, explain to Charlie what the likely impact of a successful strategy of this nature would be on margin, turnover, and ROI.
An extensive market research and a "successful" marketing campaign are generally expensive. Even if the marketing campaign is really successful in increasing sales, costs would also increase. So the equation may or may not change, depending if the contribution margin of the additional units sold will be able to cover the expenses of a complex marketing campaign. If you spend $100 to earn $100 more, your situation hasn't changed at all. Which means that net income may or may not increase, therefore, the profit margin, ROI and asset turnover may not change.
Mary makes monthly deposits of $450 at the end of each month over 25 consecutive years to support her retirement. If the account earns an interest rate of 7.5%, which amount comes closest to the value of the deposits at the end?
a. $120,938
b. $343,343
c. $382,667
d. $394,767
e. $367,100
Answer:
d. $394,767
Explanation:
For computing the amount of deposit at the end we need to apply the future value formula i.e to be shown in the attachment
Given that,
Present value = $0
Rate of interest = 7.5% ÷ 12 months = 0.625%
NPER = 25 years × 12 months = 300 months
PMT = $450
The formula is shown below:
= -FV(Rate;NPER;PMT;PV;type)
So, after applying the above formula, the future value is $394,767
Andrea Apple opened Apple Photography on January 1 of the current year. During January, the following transactions occurred and were recorded in the company's books:
1. Andrea invested $13,500 cash in the business.
2. Andrea contributed $20,000 of photography equipment to the business.
3. The company paid $2,100 cash for an insurance policy covering the next 24 months.
4. The company received $5,700 cash for services provided during January.
5. The company purchased $6,200 of office equipment on credit.
6. The company provided $2,750 of services to customers on account.
7. The company paid cash of $1,500 for monthly rent.
8. The company paid $3,100 on the office equipment purchased in transaction #5 above.
9. Paid $275 cash for January utilities.
Based on this information, the balance in the A. Apple, Capital account reported on the Statement of Owner's Equity at the end of the month would be:__________.
a. $31,400.
b. $39,200.
c. $31,150.
d. $40,175.
e. $30,875.
Answer:
2356
Explanation:
3546478967654322 321
"In your opinion, how has social media affected customer service in a broad sense? Provide evidence that supports your opinion."
Explanation:
Social media directly impacted the relationship between consumer and company.
First, you need to consider how the internet and social media are widely used by thousands of people around the world as a way to connect with others and exchange information.
Realizing this phenomenon, companies decided to use social media as a way to interact with their customers and attract more audiences. Social media works as a space where the construction of the relationship takes place more instantly and a little less formally, which allows for more in-depth interaction and the creation of a valuable relationship between company and customer.
Through the social media it is possible that the time of an answer for example is drastically reduced, which alters the consumer perception in a positive way.
It is also possible that companies use social media as a tool to improve relationship marketing, which is the creation of value for the customer through content, photos and posts, which generate engagement, approximation, loyalty and connection with consumers.
Worldwide Logistics provides the following information: Operating income $ 1 comma 550 comma 000 Net sales $ 14 comma 000 comma 000 Average total assets $ 2 comma 000 comma 000 Management's target rate of return 30% What is the company's residual income?
Answer:
The company's residual income is $950,000.
Explanation:
Residual Income is calculated as Operating Income less Cost of Investment.
Calculation of Residual Income :
Operating income $1,550,000
Less Cost of Investment ($2,000,000 × 30%) ($600,000)
Residual Income $950,000
Conclusion :
The company's residual income is $950,000.
Chou Co. has a net income of $47,000, assets at the beginning of the year are $254,000 and assets at the end of the year are $304,000. Compute its return on assets.
Answer:
Return on assets=28.54%
Explanation:
Return on asset is the average rate of return generated by the asset investment of a business. It is the net income earned as a proportion of the average investment.
Return on assets = net income / Average assets× 100
Average asset value = (opening balance + closing balance of assets)/2
=( 254,000 + 304,000)/2= 164700
Return on assets = 47,000/164,700 × 100 =28.54%
Return on assets=28.54%
The Fridge-Air Company's preferred stock pays a dividend of $4.50 per share annually. If the required rate of return on comparable quality preferred stocks is 14 percent, calculate the value of Fridge-Air's preferred stock.
Answer:
Present value = $32.1428 rounded off to $32.14
Explanation:
The preferred stock is a stock that pays a constant dividend and after equal interval of time for an indefinite period. Thus, it is like a perpetuity. The formula for the present value of perpetuity is,
Present value = Cash flow / r
Where,
r is the required rate of returnIn case pf preferred stock, the cash flow is the dividend paid by the preferred stock.
So, the value of the preferred stock is,
Present Value = 4.5 / 0.14
Present value = $32.1428 rounded off to $32.14
In your opinion which causes of work stress, or organizational stressors, are likely to be among the most common experienced by air traffic controllers? Explain your reasoning.
Answer:
There are four types of organizational stressors: task demands, physical demands, role demands, and interpersonal demands.
For air traffic controllers, task demands are probably the most common organizational stressor that they experience.
Among the task demands, we have the need of quick decisions, critical decisions, and the fact that some information may be incomplete.
The job of an air traffic controller is complex, difficult, requires taking quick, and specially, critical decisions all the time. A bad decision by a traffic controller can be very problematic, and even prove fatal, because of the delicate nature of the job. For all these reasons, air traffic controllers are likely to be subjected to this specific organizational stressor.
Suppose the world price of cotton falls substantially. The demand for labor among cotton-producing firms in Texas will . The demand for labor among textile-producing firms in South Carolina, for which cotton is an input, will . The temporary unemployment resulting from such sectoral shifts in the economy is best described as unemployment.
Suppose the government wants to reduce this type of unemployment. Which of the following policies would help achieve this goal? Check all that apply.
a. Extending the number of weeks for which unemployed workers are eligible for unemployment insurance benefits from the government
b. Taxing the price of placing a resume or posting a job opening on job-search website
c. Establishing government-run employment agencies to connect unemployed workers to job vacancies
Answer:
Suppose the world price of cotton falls substantially. The demand for labor among cotton-producing firms in Texas will DECREASE. The demand for labor among textile-producing firms in South Carolina, for which cotton is an input, will INCREASE. The temporary unemployment resulting from such sectoral shifts in the economy is best described as STRUCTURAL unemployment.
Structural unemployment is a non voluntary type of unemployment and it occurs because the skills of the workers are not the ones needed by the employers. In this case, labor that was used for producing cotton in Texas is no longer needed due to shifts in the world price of cotton.
Suppose the government wants to reduce this type of unemployment. Which of the following policies would help achieve this goal? Check all that apply.
c. Establishing government-run employment agencies to connect unemployed workers to job vacancies
the government believes that the equilibrium price is too low and tries to help almond growers by settinga price floor at Pf. What are represents the portion of consumer surplus that have been transsferred to produce surplus as a result of the price floor.
Answer: D) B
Explanation:
The Producer Surplus refers to the area below the Price Floor but above the Supply Curve and left of the new Quantity supplied. It comprises of areas B and E.
Before the Price Floor was introduced, area A, B and C were the Consumer Surplus as they were above the price but below the Demand Curve.
After the Price Floor was introduced however, area B has become a Producer Surplus.
has 10 percent coupon bonds on the market with 19 years to maturity. The bonds make semiannual payments and currently sell for 107.8 percent of par. What is the current yield on the bonds?
Answer:
4.62%
Explanation:
we need to calculate the yield to maturity of the bond:
YTM = [coupon + (face value - market value)/n] / [(face value + market value)/2]
coupon = $50face value = $1,000market value = $1,078n = 38 semiannual paymentsYTM = [$50 + ($1,000 - $1,078)/38] / [($1,000 + $1,078)/2]
YTM = $47.95 / $1,039 = 4.615 ≈ 4.62%
To loosen credit the Federal Reserve will: A sell U.S. Government securities to bank dealers with an agreement to buy them back at a later date B buy U.S. Government securities from bank dealers with an agreement to sell them back at a later date C sell Foreign Government securities to bank dealers with an agreement to buy them back at a later date D buy Foreign Government securities from bank dealers with an agreement to sell them back at a later date
Answer:
B buy U.S. Government securities from bank dealers with an agreement to sell them back at a later date
Explanation:
The Federal reserve uses open market operations to regulate liquidity in the economy. This eases or restricts how bank dealers can give credit.
To ease credit giving ability of bank dealers the Federal Reserve will buy US Government securities from bank dealers. This gives them extra money which they can give out as loans to their customers.
On the other hand when credit needs to be tightened, the Federal Reserve will mop up cash by selling Government securities to the bank dealers
In response to the financial crisis that began in 2007, the government began to bail out banks deemed "too big to fail." Critics of this action argued that this would create the prospect of future bailouts and encourage banks to be fiscally irresponsible in the future. This illustrates
Answer:
The moral hazard problem
Explanation:
Moral hazard problem is defined as a situation where a party gets involved in a risky venture knowing that another party will incur the cost of failure.
For example if a borrower knows that he can take borrowed funds and default easily, he will tend to not pay back because the lender will bear the loss.
During the the financial crisis that began in 2007, the government began to bail out banks deemed "too big to fail."
This created fiscal irresponsibility in banks that knew if they are at risk of failing they will be bailed out by the government.
Suppose that Spain and Germany both produce rye and olives. Spain's opportunity cost of producing a crate of olives is 5 bushels of rye while Germany's opportunity cost of producing a crate of olives is 10 bushels of rye.By comparing the opportunity cost of producing olives in the two countries, you can tell that_______has a comparative advantage in the production of olives and_______has a comparative advantage in the production of rye. Suppose that Spain and Germany consider trading olives and rye with each other. Spain can gain from specialization and trade as long as it receives more than______of rye for each crate of olives it exports to Germany. Similarly, Germany can gain from trade as long as it receives more than_______of olives for each bushel of rye it exports to Spain. Which of the following prices of trade (that is, price of olives in terms of rye) would allow both Germany and Spain to gain from trade? a. 9 bushels of rye per crate of olives.b. 15 bushels of rye per crate of olives.c. 8 bushels of rye per crate of olives.d. 3 bushels of rye per crate of olives.
Answer:
1. By comparing the opportunity cost of producing olives in the two countries, you can tell that Spain has a comparative advantage in the production of olives and Germany has a comparative advantage in the production of rye.
Germany is able to produce more Rye if it is not producing olives meaning that they are more efficient in this giving them the comparative Advantage.
Spain is able to produce 2x more Olives than Germany for the same amount of Rye so they are more efficient in this manner.
2. Spain can gain from specialization and trade as long as it receives more than 5 bushels of rye for each crate of olives it exports to Germany.
If Spain can get more bushels per Olives than it can produce on it's own then they will make a gain.
3. Similarly, Germany can gain from trade as long as it receives more than ⅒ or 0.1 crate of olives for each bushel of rye it exports to Spain.
Similarly if Germany can get more crates of Olives per Rye than it can produce then it makes a gain. For each Bushel of Rye, Germany can create 0.1 crate of olives. Should they get more than this 0.1 crate then they make a gain.
4. The amount of Rye being exchanged for Olives should be between 5 and 10 bushels.
a. 9 bushels of rye per crate of olives.
c. 8 bushels of rye per crate of olives
At both 8 and 9 bushels of Rye per Olive Crate Germany would be getting more Rye per crate of olive than they can produce on their own and similarly at both 8 and 9 bushes of Rye for olives, Spain would getting more bushels than they could have gotten if they gave up olives to produce Rye.
Partners, LLC members and S Corporation shareholders are not taxed on the amount they withdraw from the entity in a nonliquidating distribution when they have sufficient basis (disregarding any other limitation).
a. True
b. False
Answer:
Partners: True
LLC: True
S Corporation: False
Explanation:
When dividends are withdrawn from a business tax is only due on a S Corporation because the tax paid for the profits of an organization is not by the stockholder withdrawing the dividends which is why when dividend is withdrawn the tax is to be paid.
When dividends are withdrawn in a partnership or and LLC then no tax is payable as tax is already paid on the profits made by the business that is why dividends are not taxable when withdrawn.
Hazel Morrison, a mutual fund manager, has a $40 million portfolio with a beta of 1.00. The risk-free rate is 4.25%, and the market risk premium is 6.00%. Hazel expects to receive an additional $60 million, which she plans to invest in additional stocks. After investing the additional funds, she wants the fund's required and expected return to be 13.00%. What must the average beta of the new stocks be to achieve the target required rate of return? a. 2.04 b. 1.68 c. 1.85 d. 1.76 e. 1.94
Answer:
The average beta of the new stocks would be 1.75 to achieve the target required rate of return
Explanation:
In order to calculate the average beta of the new stocks to achieve the target required rate of return we would have to calculate the following:
average beta of the new stocks = (Required Beta-(portfolio /total fund) *old beta)/(additional portfolio/total fund)
To calculate the Required Beta we would have to use the formula of Required rate of return as follows:
Required rate of return=Risk free return + (market risk premium)*beta
0.13=0.0425+(0.06*Required Beta)
Required Beta = (0.13-0.0425)/0.06
Required Beta = 1.45
Therefore, average beta of the new stocks =(1.45-($40/$100) *1)/($60/$100)
average beta of the new stocks =1.05/0.6
average beta of the new stocks =1.75
The average beta of the new stocks would be 1.75 to achieve the target required rate of return
Suppose a stock had an initial price of $70 per share, paid a dividend of $2.30 per share during the year, and had an ending share price of $82.
Requried:
a. Compute the percentage total return.
b. What was the dividend yield and the capital gains yield?
Answer:
Stock, Dividend, and Yield:
a) Computation of the percentage total return:
Total return = Dividend + Capital appreciation = $14.30 ($2.30 + $12)
Percentage of total return = $14.30/$70 x 100 = 20.43%
b1) Dividend yield = Dividend per share / price per share = $2.30/$70 = 0.032857 or 3.29%
b2) Capital gains yield = (Current price - initial investment)/ initial investment = ($82 - $70)/$70 = 0.1714 or 17%
Explanation:
a) The Dividend yield is a financial ratio (dividend/price) that shows how much a company pays out in dividends each year relative to its stock price.
b) Capital gains yield is the percentage price appreciation on an investment. It is calculated as the increase in the price of an investment, divided by its original acquisition cost. For instance, an equity security that is purchased for $700 and later sold for $825, the capital gains yield is 17.86%.
c) The total return from an investment is the sum of the dividend or interest received plus capital gains.
ctivity-Based Costing and Conventional Costs Compared Chef Grill Company manufactures two types of cooking grills: the Gas Cooker and the Charcoal Smoker. The Cooker is a premium product sold in upscale outdoor shops; the Smoker is sold in major discount stores. Following is information pertaining to the manufacturing costs for the current month. Gas Cooker Charcoal Smoker Units 1,000 4,000 Number of batches 60 10 Number of batch moves 80 20 Direct materials $20,000 $100,000 Direct labor $20,000 $27,000 Manufacturing overhead follows: Activity Cost Cost Driver Materials acquisition and inspection $288,000 Amount of direct materials cost Materials movement 16,900 Number of batch moves Scheduling 42,000 Number of batches $346,900 Rounding instructions: Do not round until your final answers. Round total cost answers to the nearest dollar and per unit answers to the nearest cent. (a) Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming all manufacturing overhead is assigned on the basis of direct labor dollars. HINT: Use 7.3809 for overhead rate calculations. Total cost Answer Gas Cooker Answer per unit Charcoal Smoker Answer per unit (b) Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming manufacturing overhead is assigned using activity-based costing. Total cost Answer Gas Cooker Answer per unit Charcoal Smoker Answer per unit PreviousSave AnswersNext
Answer:
(a) Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming all manufacturing overhead is assigned on the basis of direct labor dollars.
Gas Cooker:
total cost = $20,000 + $20,000 + $147,618 = $187,618
cost per unit = $187.62
Charcoal Smoker
total cost = $20,000 + $27,000 + $199,284 = $246,284
cost per unit = $61.57
(b) Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming manufacturing overhead is assigned using activity-based costing.
Gas Cooker:
total cost = $20,000 + $20,000 + $48,000 + $13,520 + $36,000 = $137,520
cost per unit = $137.52
Charcoal Smoker
total cost = $100,000 + $27,000 + $240,000 + $3,380 + $6,000 = $376,380
cost per unit = $94.10
Explanation:
Gas Cooker Charcoal Smoker
Units 1,000 4,000
Number of batches 60 10
Number of batch moves 80 20
Direct materials $20,000 $100,000
Direct labor $20,000 $27,000
Manufacturing overhead follows:
Activity Cost Cost Driver
Materials acquisition $288,000 Amount of direct
and inspection materials cost
$48,000
$240,000
Materials movement $16,900 Number of batch moves
$13,520
$3,380
Scheduling $42,000 Number of batches
$36,000
$6,000
If the interest rate is 10%, what is the present value of a security that pays you $1,500 next year, $1,400 the year after, and $1,300 the year after that?
Answer:
The present value is $3,497.3
Explanation:
In order to calculate the present value of a security that pays you $1,500 next year, $1,400 the year after, and $1,300 the year after we would have to make the following calculation:
Present Value = payment next year x P/F(10%, 1) + payment the year after x P/F(10%, 2) + payment the year after that x P/F(10%, 3)
Present Value= $1,500 x 0.9091 + $1,400 x 0.8264 + $1,300 x 0.7513
Present Value = $1,363.65 + $1,156.96 + $976.69
Present Value = $3,497.3
The present value is $3,497.3
OS Environmental provides cost-effective solutions for managing regulatory requirements and environmental needs specific to the airline industry. Assume that on July 1 the company issues a one-year note for the amount of $5.2 million. Interest is payable at maturity.
Determine the amount of interest expense that should be recorded in a year-end adjusting entry under each of the following independent assumptions:
Interest rate Fiscal year-end Interest expense
12% December 31
10% September 30
9% October 31
6% January 31
Answer:
In accrual basis accounting, expenses are recorded in the period when their matching revenues are obtained.
In this case, even if the full interest will be paid at maturity, interest expense will still be recorded in each period according to the information that we are given in the question.
Interest expense to be recorded by December 31
5,200,000 * 0.12 = 624,000 / 2 = 312,000
Interest expense to be recorded by September 30
5,200,000 * 0.10 = 520,000 * 3/12 = 130,000
Interest expense to be recorded by October 31
5,200,000 * 0.09 = 468,000 * 4/12 = 156,000
Interest expense to be recorded by January 31
5,200,000 * 0.06 = 312,000 * 7/12 = 182,000
Matthew (48 at year-end) develops cutting-edge technology for SV Inc., located in Silicon Valley. In 2018, Matthew participates in SV’s money purchase pension plan (a defined contribution plan) and in his company’s 401(k) plan. Under the money purchase pension plan, SV contributes 15 percent of an employee’s salary to a retirement account for the employee up to the amount limited by the tax code. Because it provides the money purchase pension plan, SV does not contribute to the employee’s 401(k) plan. Matthew would like to maximize his contribution to his 401(k) account after SV’s contribution to the money purchase plan.
a. Assuming Matthew's annual salary is $400,000, what amount will SV contribute to Matthew's money purchase plan? What can Matthew contribute to his 401(k) account in 2010?
b. Assuming Matthew's annual salary is S240,000, what amount will SV contribute to Matthew's money purchase plan? What can Matthew contribute to his 401(k) account in 2010?
c. Assuming Matthew's annual salary is $60,000, what amount will SV contribute to Matthew's money purchase plan? What amount can Matthew contribute to his 401(k) account in 2010?
d. Assume the same facts as c. except that Matthew is 54 years old at the end of 2010. What amount can Matthew contribute to his 401(k) account in 2010?
Answer:
Explanation:
The concept of 401 K plan refers to the taxation saving plan made by contributing a certain amount. An employer donation to his/her 401 K account can span between the range of $16,500 and $22000( for the aged from 50 and above). Also, for an employer and employee, contribution can be make into their 401 K account up to $49000 and $54000 for aged from 50 and above.
a. Assuming Matthew's annual salary is $400,000, what amount will SV contribute to Matthew's money purchase plan? What can Matthew contribute to his 401(k) account in 2010?
Given that;
Matthew is 48 years Old
His annual salary = $400,000
SV contributes 15 percent of an employee’s salary to a retirement account for the employee up to the amount limited by the tax code.
Thus;
15/100 × 400000 = 60000
However; from the tax code rule; people that are not up to age 50 and above are required to contribute $49000. So therefore; the employer will make a contribution of $49000 into Matthew's money purchase plan.
What can Matthew contribute to his 401(k) account in 2010?
He has exhausted his maximum contribution in 2010; as a result of that no contribution will be needed for that year , so he is contributing $0
b. Assuming Matthew's annual salary is $240,000, what amount will SV contribute to Matthew's money purchase plan? What can Matthew contribute to his 401(k) account in 2010?
Given that :
Matthew annual salary is $240,000
The SV contribution is 15% OF Matthew's annual salary = 15 /100 × 240,000= 36000
Since; Matthew is not up to 50 years; the maximum amount that can be deposited into his 401 K account is 49000
Thus;
SV contribution into Matthew's money purchase plan = $49000 -$36000
= $13,000
c. Assuming Matthew's annual salary is $60,000, what amount will SV contribute to Matthew's money purchase plan? What amount can Matthew contribute to his 401(k) account in 2010?
Given that :
Matthew annual salary is $60,000
The SV contribution is 15% OF Matthew's annual salary = 15 /100 × 60,000= 9000
Since; Matthew is not up to 50 years; the maximum amount that can be deposited into his 401 K account is 49000
Thus;
SV contribution into Matthew's money purchase plan = $49000 -$9000
= $40,000
d. Assume the same facts as c. except that Matthew is 54 years old at the end of 2010. What amount can Matthew contribute to his 401(k) account in 2010?
Here it is assumed that Matthew's age is 54 years, so we can say he is older than 50 years. Hence the amount that He can contribute into his 401 (k) account is = Allowed Contribution + Catch up contribution
The catch up contribution is the difference in the 401 (K) amount that can be deposited for people age above 50 and people aged below age 50
= $16500 + ( $54500 - $49000)
= $16500 + $5500
= $22,000
Which of the following is a disadvantage of using variable costing? Select one: A. Two sets of accounting records must be maintained. B. Inventory values tend to be overstated. C. CVP relationships are more difficult to determine than under absorption costing. D. Per-customer or per-product contribution margin is obscured.
Answer:
Two sets of accounting records must be maintained.
Explanation:
Variable costing is the costing in which only variable cost is considered i.e direct material cost, direct labor cost, variable manufacturing overhead cost therefore no fixed cost could be considered
Under this the disadvantage is that it recognized two accounting records sets which are to be maintained
Hence, the first option is correct
At the level of output at which a single-price monopolist maximizes profit, price is Group of answer choices
Answer:
Greater than marginal cost.
Explanation:
A monopoly is a market structure which is typically characterized by a single-seller who sells a unique product in the market by dominance. It is also known as oligopoly, wherein the seller has no competitor because he is solely responsible for the sale of unique products without close substitutes. Any individual that deals with the sales of unique products in a monopolistic market is generally referred to as a monopolist.
Also, a single-price monopolist is an individual or seller that sells each unit of its products to all its customer at the same price. Hence, a single-price monopolist doesn't engage in price discrimination among its customers (buyers).
At the level of output at which a single-price monopolist maximizes profit, price is greater than marginal cost because the marginal revenue would be below the demand curve.
However, if the marginal cost is greater than the price, the monopolist will not make any profit.
In a nutshell, profit maximization for the single-price monopolist occurs at the point where marginal cost is equal to marginal revenue (MC = MR) on the graph of price (P) against quantity (Q) of goods.
Most Company has an opportunity to invest in one of two new projects. Project Y requires a $345,000 investment for new machinery with a six-year life and no salvage value. Project Z requires a $345,000 investment for new machinery with a five-year life and no salvage value. The two projects yield the following predicted annual results. The company uses straight-line depreciation, and cash flows occur evenly throughout each year. (FV of $1, PV of $1, FVA of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.)
Project Y Project Z
Sales $ 360,000 $ 288,000
Expenses
Direct materials 50,400 36,000
Direct labor 72,000 43,200
Overhead including depreciation 129,600 129,600
Selling and administrative expenses 26,000 26,000
Total expenses 278,000 234,800
Pretax income 82,000 53,200
Income taxes (38%) 31,160 20,216
Net income $ 50,840 $ 32,984
Compute each projectâs annual expected net cash flows.
Project Y Project Z
Determine each projectâs payback period.
Payback Period
Choose Numerator: / Choose Denominator: = Payback Period
/ = Payback period
Project Y =
Project Z =
Compute each projectâs accounting rate of return.
Accounting Rate of Return
Choose Numerator: / Choose Denominator: = Accounting Rate of Return
/ = Accounting rate of return
Project Y
Project Z
Determine each projectâs net present value using 6% as the discount rate. Assume that cash flows occur at each year-end. (Round your intermediate calculations.)
Project Y
Chart values are based on:
n =
i =
Select Chart Amount x PV Factor = Present Value
=
Net present value
Project Z
Chart values are based on:
n =
i =
Select Chart Amount x PV Factor = Present Value
=
Net present value
Answer:
Project Y Project Z
(6 years) (5 years)
investment: -$345,000 -$345,000
cash flows:
net income after taxes $50,840 $32,984
+ depreciation expense $57,500 $69,000
net cash flow per year = $108,340 $101,984
payback period:
investment / NCF = 3.18 years 3.38 years
accounting rate or return:
net income / investment = 14.74% 9.56%
net present value:
NCFs discounted at 6% = $187,743 $84,594
Project Y lasts for 6 years, while project Z lasts for only 5 years, that is the reason why there NPVs are so different.
Kramer Manufacturing produces blenders. Its total fixed costs are $30,000. Its variable costs are $55.00 per blender. As production of blenders increases (within the relevant range), fixed costs will
Answer:
As the production of blenders increases, unitary fixed costs decreases.
Explanation:
Its total fixed costs are $30,000. Its variable costs are $55.00 per blender.
On unitary bases, variable costs remain constant. On the contrary, fixed costs vary at a unitary level. Now, the same amount of costs is divided by a larger number of units.
As the production of blenders increases, unitary fixed costs decreases.
can target costing be applied to the banking industry in Ghana
Answer:
The banking industry in Ghana can introduce target costing. However, its application is much more difficult due to the nature of banking services.
Introducing target costing in the banking industry in Ghana will eliminate non-value adding activities that increase the cost of banking in Ghana. It will enable Ghanaian customers to be charged competitive prices for the banking services that are rendered to them, with no more room for process wastages. The quality of services will increase coupled with lowered costs. The service processes will be improved as they will be more focused on the customers, and less on the staff, as it currently obtains in Ghana.
However, the nature of banking services makes introduction of target costing somehow difficult. These characteristics of banking services include: a) the production and consumption of banking services are coincidental, as the services are consumed when they are being produced; b) banking services are not storable like goods; c) banking services are not comparable, one unit to another; d) banking services are not tangible; e) ownership of banking services is not transferable; and f) there is not market price for banking services, except the price limits imposed by regulatory bodies.
Explanation:
Target costing in the banking industry in Ghana will take the form of first determining the market price for services that are acceptable to customers, establishing a target profit, and then designing banking services in such a manner that the costs do not exceed the target costs. The target cost will be the variance between the market price of a banking service and the target profit.
Lincoln Corporation used the following data to evaluate their current operating system. The company sells items for $12 each and used a budgeted selling price of $12 per unit. Actual Budgeted Units sold 48,000 units 34,000 units Variable costs $170,000 $156,000 Fixed costs $42,000 $57,000 What is the static−budget variance of operating income?
Answer:
Static−budget variance of operating income is $169,000F
Explanation:
Actual Budgetet
Sales $576,000 $408,000 $168,000
Variable cost $170,000 $156,000 $14,000
Contribution margin $406,000 $252,000 $154,000
Less: Fixed cost $42,000 $57,000 -$15,000
Net Income / (Loss) $364,000 $195,000 $169,000 Favourable
Workings
Sales: Actual 48,000 units * $12= 576,000
Budgeted 34,000 units * $12= 408,000
Marshall has received an inheritance and wants to invest a sum of money today that will yield $5,400 at the end of each of the next 10 years. Assuming he can earn an interest rate of 5% compounded annually, how much of his inheritance must he invest today
Answer:
$3,315.13
Explanation:
To determine the amount of inheritance Marshall should invest today, we have to calculate the present value of $5,400.
PV = FV (1 + r)^-n
FV = Future value = $5,400
P = Present value
R = interest rate 5%
N = number of years 10
$5400(1.05^-10) = $3,315.13
I hope my answer helps you