Splish Brothers Inc. issues $257,000, 10-year, 8% bonds at 99. Prepare the journal entry to record the sale of these bonds on March 1, 2022.
Answer:
Par value of bonds = $257,000
Issue price of bonds = 99
Cash receipts from issue of bonds = 257,000 x 99% = 254,430
Discount on bonds payable = Par value of bonds - Cash receipts from issue of bonds
= 257,000-254,430
= $2,570
Date Account Titles and Explanation Debit Credit
March 1 Cash $254,430
Discount on bonds payable $2,570
Bonds payable $257,000
(To record issuance of bonds)
The following information is available for Robstown Corporation for 20Y8: Inventories January 1 December 31 Materials $351,000 $435,800 Work in process 625,200 590,400 Finished goods 607,400 571,000 December 31 Advertising expense $ 296,600 Depreciation expense-office equipment 43,560 Depreciation expense-factory equipment 55,880 Direct labor 669,000 Heat, light, and power-factory 22,060 Indirect labor 76,000 Materials purchased 658,200 Office salaries expense 183,300 Property taxes-factory 18,300 Property taxes-office building 31,200 Rent expense-factory 32,500 Sales 3,011,000 Sales salaries expense 417,000 Supplies-factory 16,000 Miscellaneous costs-factory 9,200 Required: a. Prepare the 20Y8 statement of cost of goods manufactured. For those boxes in which you must enter subtracted or negative numbers use a minus sign\.\* b. Prepare the 20Y8 income statement. *Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.
Answer:
Robstown Corporation
Statement of Cost of Goods Manufactured
For the Year Ended December 31, 20Y8
Work in process inventory, January 1, 20Y8 $625,200
Direct materials:
Materials inventory, January 1, 20Y8 $351,000
Purchases $658,200
Cost of materials available for use $1,009,200
Materials inventory, Dec 31, 20Y8 ($435,800)
Cost of direct materials used in $573,400 $573,400
production
Direct labor $669,000
Factory overhead
Depreciation expense-factory $55,880
equipment
Heat, light, and power-factory $22,060
Indirect labor $76,000
Miscellaneous costs-factory $9,200
Property taxes-factory $18,300
Rent expense-factory $32,500
Supplies-factory $16,000
Total factory overhead $229,940
Total manufacturing costs $1,472,340
incurred in 20Y8
Total manufacturing costs $2,097,540
Work in process inventory, December 31, 20Y8 ($590,400)
Cost of goods manufactured $1,507,140
Robstown Corporation
Income Statement
For the Year Ended December 31, 20Y8
Sales $3,011,000
Cost of goods sold:
Finished goods inventory, Jan 1, 20Y8 $607,400
Cost of goods manufactured $1,507,140
Cost of finished goods available for sale $2,114,540
Finished goods inventory, Dec. 31, 20Y8 ($571,000)
Cost of Goods Sold $1,543,540
Gross Profits $1,467,460
Operating expenses:
Administrative expenses:
Depreciation expense-office equipment $43,560
Office salaries expense $183,300
Property taxes-office building $31,200 $258,060
Selling expenses:
Sales salaries expense $417,000
Advertising expense $296,600 $713,600
Total operating expenses $971,660
Net income $495,800
You are given the following information for Bowie Pizza Co.: Sales = $64,000; Costs = $30,700; Addition to retained earnings = $5,700; Dividends paid = $1,980; Interest expense = $4,400; Tax rate = 22 percent. Calculate the depreciation expense. (Do not round intermediate calculations and round your answer to the nearest dollar.)
Answer:
$18554
Explanation:
The formula for addition to retained earnings can be used to determine the amount of depreciation expense as shown below:
addition to retained earnings=sales-costs-depreciation expense-interest expense-tax paid-dividends
addition to retained earnings=net income-dividends
5700=net income-1980
net income=5700+1980=7680
if tax 22%,net income is 1-22%=0.78
profit before tax=7680 /0.78= 9,846.15
tax = 9,846.15*22%= 2,166.15
using the long formula,we have depreciation expense
5700=64000-30700-depreciation expense-4400-2666.15-1980
depreciation expense=64000-30700-4400-2666.15-1980-5700
depreciatio expense=$18553.85
Consider a market for a specific kind of used cars, say 2009 Honda Civic. Suppose that in use these cars have proved to be either trouble free and reliable (peach) or have many things go wrong (lemon). The buyers are willing to pay $8,000 for a peach and $4,000 for a lemon. Each seller, on the other hand, values his/her car at $6,000 if it is a peach, and $2,000 if it is a lemon. The information about quality of any given car is not symmetric between its owner and potential buyers. The owner of the car knows perfectly well whether it is a peach or a lemon, whereas potential buyers don’t. The buyers only know that 60% of the Civics are peaches and the remaining 40% are lemons.
Required:
a. What will be the market price for a Civic? Which cars will be traded? (For definiteness, suppose that there is a limited stock of used Civics and a larger number of potential buyers.) Assume that the example above takes place in month 0. Every month that passes, all sellers of Civics – regardless of type – are willing to accept $100 less than they were the month before. Also, with every passing month buyers are willing to pay $400 less for a peach than they were the previous month and $200 less for a lemon.
b. What will be the market price for a Civic in month 1? Which cars will be traded?
c. What will be the market price for a Civic in month 2? Which cars will be traded?
Answer:
a. What will be the market price for a Civic? Which cars will be traded?
market price = $6,400all cars would be traded since the market price exceeds the selling price of peaches (and lemons).b. What will be the market price for a Civic in month 1? Which cars will be traded?
market price = $6,080all cars would be traded since the market price exceeds the selling price of peaches (and lemons).c. What will be the market price for a Civic in month 2? Which cars will be traded?
market price = $5,760only lemons would be traded since the market price exceeds the selling price of lemons but not peaches.Explanation:
month 0
buyers expected cost:
peaches $8,000 x 60% = $4,800
lemons $4,000 x 40% = $1,600
total expected cost = $6,400
sellers expected price:
peaches $6,000
lemons $4,000
month 1
buyers expected cost:
peaches $7,600 x 60% = $4,560
lemons $3,800 x 40% = $1,520
total expected cost = $6,080
sellers expected price:
peaches $5,900
lemons $3,900
month 2
buyers expected cost:
peaches $7,200 x 60% = $4,320
lemons $3,600 x 40% = $1,440
total expected cost = $5,760
sellers expected price:
peaches $5,800
lemons $3,800
In cell N2, enter a formula using the IF function and a structured reference to determine if Alison Simoneau is eligible for tuition remission.
a. The IF function should first determine if the staff member's Service Years 11 is greater than 1. Remember to use a structured reference to the Service Years column.
b. The function should return the text Eligible if the staff member's Service Years is greater than 1.
c. The function should return the text Not Eligible if the staff member's Service Years is not greater than 1.
Answer:
In cell N2, enter a formula using the IF function and a structured reference to determine if Alison Simoneau is eligible for tuition remission.
=IF([Service Years]>
a. The IF function should first determine if the staff member’s Service Years is greater than 1. A structured reference to the Service Years column:
=IF([Service Years]>1,
b. The function should return the text Eligible if the staff member’s Service Years is greater than 1.
=IF([Service Years]>1,"Eligible"
c. The function should return the text Not Eligible if the staff member’s Service Years is not greater than 1.
=IF([Service Years]>1,"Eligible","Not Eligible")
Motor Sales sold its old office furniture for $ 8 comma 500. The original cost was $ 18 comma 000, and at the time of sale, accumulated depreciation was $ 10 comma 000. What is the effect of this transaction?
Answer:
$1,500
Explanation:
For the computation of effect of the transaction first we need to find out the book value sold for which is shown below:-
Book Value sold for = Original cost of the furniture - Accumulated depreciation
= $18,000 - $10,000
= $8,000
Gain = $9,500 - $8,000
= $1,500
Therefore for computing the effect of the transaction we simply applied the above formula and as we can see that there is gain of $1,500
The merger of two firms producing personal computers is an example of a __________ merger. Group of answer choices
Answer:
Horizontal merger
Explanation:
The merger of two firms producing personal computers is an example of a horizontal merger
A horizontal merger is a merger or business collaboration that happens between firms that operate in the same industry. The products being sold are similar and in the same market
Suppose in 2012 in New Zealand, there are deflationary pressures and prices drop by 20 percent throughout the economy. All else being equal, expectations of increasing deflation should:
Answer: B. shift the AD curve to the left
Explanation:
When people expect that deflation which is the general reduction in prices, will occur, they will try to take advantage of it by reducing their consumption in the present so that they can resume consumption when prices are lower so as to reduce their cost of consumption.
This will have the effect of reducing Aggregate Demand which will force the Aggregate Demand curve to the Left which will further exacerbate the effects because prices will then fall to the new point of intersection between AD and the Aggregate Supply curve.
When the prices are fall by 20 percent throughout the economy so here it should be shifted to AD curve to the left hand side.
Impact on deflation:In the case when there is deflation that means reduction in the price so here there should be decreased in the consumption also it decrease the consumption cost.
Due to this the Aggregate Demand should be decreased due to this, it should be shifted to the left hand side because of the decreasing in the price
Therefore, When the prices are fall by 20 percent throughout the economy so here it should be shifted to AD curve to the left hand side.
This question is incomplete.The options for this question are;
A. Cause a movement along an AD curve or a change in quantity of AD
B. shift the AD curve to the left
C. leave the AD curve unchanged
D. shift the AD curve to the right
Learn more about price here: https://brainly.com/question/24304293
if a credit life policy lapses for nonpayment before the debt is satisfied., with how many days must the creditor either refund the premium paid or apply it against the debt?
Answer:
60 days.
Explanation:
A credit life policy is a type of life insurance policy that pays an outstanding debt being owed by a borrower in the event that the he or she dies, is maimed or permanently disabled, critically ill or when he loses his job. Generally, the premium or face value on the credit life policy decreases proportionately with an outstanding loan amount as its is being paid off over time until they both (debt and premium) reaches a zero value.
A credit life policy is more expensive than other regular life insurance policy and is commonly used on mortgage and auto loans.
According to the insurance regulations, if a credit life policy lapses for nonpayment before the debt is satisfied, within 60 days the creditor must either refund the premium paid or apply it against the debt.
1. A stock has an expected return of 10.2 percent, the risk-free rate is 4.1 percent, and the market risk premium is 7.2 percent. What must the beta of this stock be?
Answer:
Beta is 0.85
Explanation:
The value of Beta can de derived from the CAPM formula of expected return
expected return=risk-free rate+Beta*market risk premium
expected return is 10.2%
risk-free rate is 4.10%
market risk premium is 7.2%
Beta is unknown
10.20%=4.10%+Beta*7.20%
10.20%-4.10%=Beta*7.20%
6.10% ==Beta*7.20%
Beta=6.10% /7.20%
Beta= 0.85
In a long-run equilibrium where firms have identical costs, it is possible that some firms in a competitive market are making a positive economic profit.
a) true
b) false
Ireland Corporation obtained a $40,000 note receivable from a customer on June 30, 2011. The note, along with interest at 6%, is due on June 30, 2012. On September 30, 2011, Ireland discounted the note at Cloverdale bank. The bank's discount rate is 10%. What amount of cash did Ireland receive from Cloverdale Bank
Answer:
$39,220
Explanation:
The maturity value of the note receivable on June 30, 2012
= Principal + Interest
= $40,000 + $40,000 x 6%
= $40,000 + $2,400
= $ 42,400
The note is discounted on September 30, 2011. Time period remaining to go till maturity as on September 30, 2011
= 12 - 3 months ( July, Aug and Sep)
= 9 months.
Amount of deduction
= $ 42,400 x 10% x 9/12
= $ 3,180
Finally, the Cash received by Ireland will be
= Maturity value - Discount
= $42,400 - $ 3,180
= $39,220
2. Source attractiveness encompasses similarity, familiarity, and likability. How persuasive do you think this campaign is to its receivers, based on these characteristics
Answer:
highly persuasive
Explanation:
In simple words, Desirability, which includes resemblance, knowledge, and liability, is a source indicative routinely used by marketers. Source attraction contributes to convincing via an association mechanism, in which the recipient is encouraged to pursue some kind of connexion mostly with source but therefore also embraces similar values , behaviours, desires, or behaviour.
Marketers agree that compelling messages recipients are much more interested in attending and associate with individuals they consider likeable or close to oneself.
Identify the trade-restraining practice that this example demonstrates.
Company A and Company B both work in the candy industry. They agree that Company A will only sell chocolate to Company C and Company B will only sell fruit candies to Company C.
it demonstrates Division of Markets
In December 2015, General Electric (GE) had a book value of equity of $ 98.2 billion, 9.6 billion shares outstanding, and a market price of $ 28.32 per share. GE also had cash of $ 103.4 billion, and total debt of $ 199.1 billion.
A. What was GE's market capitalization? What was GE's market-to-book ratio?
B. What was GE's book debt-equity ratio? What was GE's market debt-equity ratio?
C. What was GE's enterprise value?
Answer:
A. Market capitalization =$272 billion
Market-to-book ratio=2.76%
B.Book debt-equity ratio=2.02%
Market debt-equity ratio=0.731
C.GE's enterprise value=$367.7 billion
Explanation:
A. Computation for GE's market capitalization
Using this formula
($billion)
Market capitalization= Share outstanding*Market price per share
Let plug in the formula
9.6 billion*$ 28.32 per share
Market capitalization =$272
Computation for GE's market-to-book ratio
Using this formula
Market-to-book ratio=Market capitalization /book value of equity
Let plug in the formula
Market-to-book ratio=$272/$98.2 billion
Market-to-book ratio=2.76%
B. Computation for GE's book debt-equity ratio
Using this formula
Book debt-equity ratio=Total debt /book value of equity
Let plug in the formula
Book debt-equity ratio=$ 199.1 billion/$98.2
Book debt-equity ratio=2.02%
Computation for market debt-equity ratio
Market debt-equity ratio
=Total debt/Market Capitalization
Let plug in the formula
Market debt-equity ratio=$199.1 billion/272
Market debt-equity ratio=0.731
C. Computation for GE's enterprise value
Using this formula
GE's enterprise value= Market capitalization +Total debt -Cash
Let plug in the formula
GE's enterprise value=$272+$199.1-$ 103.4
GE's enterprise value=$367.7 billion
Graphical Designs is offering 10-10 preferred stock. The stock will pay an annual dividend of $10 with the first dividend payment occurring 10 years from today. The required return on this stock is 5.20 percent. What is the price of the stock today
Answer:
PV of the stock today = $115.83
Explanation:
We will use the discounted cash flows approach to calculate the price of the stock today. This approach values the stock by accumulating the present value of all the expected future cash flows from the stock/asset.
As the preferred stock pays a constant dividend after equal intervals of time and for an indefinite period, it can also be treated as a perpetuity. Thus, the formula for the present value of perpetuity will be used to calculate the price of the stock at year 10 that we will discount back to today.
Present value of perpetuity = Cash flow / expected rate of return
PV of stock at Year 10 = 10 / 0.052
PV of stock at Year 10 = 192.3076923
The value of the today will be,
PV of the stock today = 192.3076923 / (1+0.052)^10
PV of the stock today = $115.83
Acme Inc. has the following information available:
Actual price paid for material $1.00
Standard price for material $0.90
Actual quantity purchased and used in production 100
Standard quantity for units produced 110
Actual labor rate per hour $ 15
Standard labor rate per hour $ 16
Actual hours 200
Standard hours for units produced 220
1. Compute the material price and quantity, and the labor rate and efficiency variances.
2. Describe the possible causes for this combination of favorable and unfavorable variances.
Answer:
1. Computation of variances
a. Material Price Variance = (Actual Price - Standard Price) x Actual Quantity
= ($1 - $0.9) x 100
= $10 U
b. Material Quantity Variance = (Actual Quantity - Standard Quantity) x Standard Price
= (100 - 110) x $0.9
= $9 F
c. Labor Rate Variance = (Actual Rate - Standard Rate) x Actual hours
= ($15 - $16) x 200
= $200 F
d. Labor Efficiency Variance = (Actual hours - Standard hours) x Standard Rate
= (200 - 220) x $16
= $320 F
2. Description of the possible causes for this combination of these variances
a. This could be due to scarcity of resources or major demand for this material, thus prices increasing in the market. Or could be purchase of high quality material than budgeted.
b. This could be because of purchase of higher quality material thus lower damages and could also be due to the efficiency of manufacturing plants.
c.This could be because of the use of less qualified cheap labor.
d.This could be due to good management of labors and strict overseeing, co-ordination of their work activities.
Question 3
You are the Chief Operations Officer responsible for overall company operations in ATCHULO Company Ltd, a large courier company in Ghana. Your company has 16 regional offices (terminals) scattered around the country in each of the regional capitals and a main office (hub) located in the capital city of the country. Your operations are strictly domestic. You do not accept international shipments.
The day at each terminal begins with the arrival of packages from the hub. The packages are loaded onto trucks for delivery to customers during morning hours. In the afternoon, the same trucks pick up packages that are returned to the terminal in late afternoon and then shipped to the hub where shipments arrive from the terminals into the late evening and are sorted for delivery early the next day for the terminals.
Examiner: Dr. Abubakari Atchulo Page 1 of 2
Each terminal in your company is treated as an investment centre and prepares individual income statements each month. Each terminal receives 30% of the revenue from packages that it picks up and 30% of the revenue from the packages it delivers. The remaining 40% of the revenue from each transaction goes to the hub. Each terminal accumulates its own costs. All costs relating to travel to and from the hub are charged to the hub. The revenue per package is based on size and service type and not the distance the package travels. (There are two services: overnight and ground delivery, which takes between 1 and 7 days, depending on the distance traveled).
All customer service is done through a central service group located in the hub. Customers access this service centre through a toll-free telephone number. The most common calls to customer service include requests for package pickup, requests to trace an overdue package, and requests for billing information. The company has invested in complex and expensive package tracking equipment that monitors the package’s trip through the system by scanning the bar code placed on every package. The bar code is scanned when the package is picked up, enters the originating terminal, leaves the originating terminal, arrives at the hub, leaves the hub, arrives at the destination terminal, and is delivered to the customers. All scanning is done with hand held wands that transmit the information to the regional and then central computer.
The major staff functions in each terminal are administrative (accounting, clerical, and executive), marketing (the sales staff), courier (the people who pick up and deliver the shipments and the equipment they use), and operations (the people and equipment who sort packages in the terminal).
This organisation takes customer service very seriously. The revenue for any package that fails to meet the organisation’s service commitment to the customer is not assigned to the originating and destination terminals.
All company employees receive a wage and a bonus based on the terminal’s economic value added. This system has promoted many debates about the sharing rules for revenues, the inherent inequity of the existing system, and the appropriateness of the revenue share for the hub. Service problems have arisen primarily relating to overdue packages. The terminals believe that most of the service problems relate to wrong sorting in the hub, resulting in packages being sent to the wrong terminals.
Required:
A) Explain why an investment centre is or not an appropriate organisational design in ATCHULO Company Ltd. (15 marks)
B) Assuming that ATCHULO Company Ltd is committed to the current design, how would you improve it? (15 marks)
C) Assuming that ATCHULO Company Ltd has decided that the investment centre model is
unacceptable, what model to performance evaluation would you recommend and why? (15 marks)
Answer:
ATCHULO Company Ltd
A) ATCHULO Company Ltd, as it is currently being operated should not be using an investment center as the appropriate organizational design when a profit center structure could have been applied. However, if it wants to continue the use of the investment center model as a preferred organizational structure, then it should implement the structure fully. For one, an investment center is a division in ATCHULO company that is supposed to be in control of all its investment activities (assets), and is responsible for generating profits (revenue and costs) for its sustenance. Its performance will then be evaluated based on the revenue it generates less the expenses, including the capital costs incurred for generating the revenue.
B) For a better operation of the investment center, revenues generated by the investment centers should be assigned to the investment centers and all their costs will be assigned as well. The investment centers should have their operational assets and make the necessary decisions regarding their use.
The hub should not be sorting packages for the investment centers as each investment center could handle the sorting at their various centers and route packages to appropriate destinations, accordingly. The investment centers should operate their own trucks or outsource such services at some costs. Since packages are sent from one center to the other and vice versa, they can charge for the services they provide for one another. In this way, each investment center's performance will be more accurately evaluated.
C) The investment center approach would have been the best for ATCHULO Company Ltd if it were being properly implemented, both in terms of operational activities and performance evaluation.
However, since ATCHULO Company has decided to change the model, I recommend the centers to be operated as profit centers, because this is the next best thing in terms of performance evaluation. However, each center must be able to make its own revenue and cost decisions, so that it can be assessed based on profit performance.
Explanation:
An investment center in ATCHULO Company should be a unit of the firm that is responsible for its revenue, cost, and investment decisions, with its performance judged based on the overall outcome achieved or the value added to the company.
A profit center in ATCHULO Company is a unit that is only responsible for its revenue and cost decisions, while investment activities are handled from the headquarters. Its performance is evaluated on profits without consideration of the capital costs incurred in generating the profits.
The economy is at a point below the production possibilities curve. What is the most likely explanation for this?
a. All resources are not being utilized or a technical inefficiency exists in the production process
b. A technical efficiency exists in a production process
c. All of the above
d. All resources are being utilized
Answer:
a. All resources are not being utilized or a technical inefficiency exists in the production process
Explanation:
The production possibility frontier shows the two combinations of good an economy can produce when its resources are fully utilised.
Production point on the curve are efficient
Points inside the curve means production is inefficient ortechnical inefficiency exists.
Points outside the curve are unattainable given the economy's resocurces and technology
On January 1, 20X5, Playa Company acquires 90 percent ownership in Seaside Corporation for $180,000. The fair value of the noncontrolling interest at that time is determined to be $20,000. Seaside reports net assets with a book value of $200,000 and fair value of $200,000. Playa Company reports net assets with a book value of $480,000 and a fair value of $525,000 at that time, excluding its investment in Seaside. What will be the amount of consolidated net assets that would be reported immediately after the combination?
Answer:
$680,000
Explanation:
Since Playa Company owns 90% of Seaside Corporation, it is considered Seaside's parent company and it must include all of Seaside's assets when it presents its consolidated balance sheet.
Total net assets reported = $480,000 (Playa's net assets at book value) + $200,000 (Seaside's net assets) = $680,000
HUD, Co. had a beginning retained earnings of $30,995. For the year, the company had net income of $7,590 and paid dividends of $3,120. The company also issued $5,320 in new stock during the year. What is the ending retained earnings balance?
Answer:
$35,465
Explanation:
Calculation for Ending Retained Earnings
Using this formula
Retained earnings = Beginning retained earnings +(Net income- Dividend)
Let plug in the formula
Retained earnings = $30,995 + ($7,590 − $3,120)
Retained earnings =$30,995 +$4,470
Retained earnings =$35,465
Therefore the the ending retained earnings balance will be $35,465
Martin Company paid $900,000 for equipment. Martin uses straight-line depreciation. Currently the Accumulated Depreciation account shows a balance of $180,000. If the asset has no residual value and an estimated life of 10 years, how many years has the asset been depreciated? (Round your final answer to the nearest year.)
Answer:
2 years
Explanation:
900,000/10=90,000
180,000/90,000=2
The tables show the spending and revenue for Littleland in 2010. Use the tables and other information to answer the questions. Spending category Value (millions) education $320 welfare and Social Security $890 health care $270 defense $120 payments on debt $170* other $240 *This payment covers total interest owed only. Revenue category Value (millions) income tax $800 sales tax $270 corporate tax $300 social insurance $340 GDP in 2010: $7.3 billion Total debt as of 2009: $3.5 billion How much money (in millions) did Littleland need to borrow in 2010 to finance its government spending
Answer:
$300 million
Explanation:
The computation of debt is shown below:-
But before that we need to determine the following amounts
Total Expenditure = Spending on Education + Spending on Welfare and social security + Spending on Healthcare + Spending on Defense + Payments on Debt + Other Spending
= $320 + $890 + $270 + $120 + $170 + $240
= $2,010 million
Total Revenue = Income Tax + Sales Tax + Corporate Tax + Social Insurance
= $800 + $270 + $300 + $340
= $1710 million
Debt or borrowed amount =Total expenditure - Total revenue
= $2,010 - $1,710
= $300 million
three examples of foreign companies operating in Fiji and a type of service they provide
Answer:
Three foreign companies operating in Fiji:
Bank of Baroda: a multinational, financial services companies from India. It offers banking services in Fiji, and is one of the five international banks that operate in that country.Coca Cola: this American multinational beverages corporation from Atlanta, Georgia, also operates in Fiji. It sells consumer goods, specially beverages.Marriott: the American multinational hotel corporation has one hotel in Fiji: the Fiji Marriott Resort Momi Bay.
The CEOs of two pharmaceutical companies are having lunch. They discuss the unfair costs of ordering from a manufacturer that supplies to both companies. The CEOs decide that they will no longer work with the unfair pricing of the manufacturer. What is this strategy called?
Answer:
Group boycott
Explanation:
Group boycott is when competitors agree to not buy or sell to a supplier or customer or do it only under certain conditions. According to this, the answer is that the strategy is called group boycott because the CEOs of the two companies agree not to work with the manufacturer.
Mario and Johnny want to start a business. They have very little capital. They are new partners and largely unfamiliar with each other’s management practices. They are happy, however, to be organizing a business together in order to avoid full liability for the business. Which detail of this situation is a good reason for Mario and Johnny to create a general partnership?
Answer:
Third sentence
Explanation:
Even though they have little capital and new business partners it states in the third sentence that the two are happy to be organizing a business together to avoid liability. So if they take the time to learn about each other and to find each others strengths and weaknesses they will be able to work together and become a stronger team.
Hope this helps.
At the beginning of the year, manufacturing overhead for the year was estimated to be $859,200. At the end of the year, actual direct labor-hours for the year were 36,300 hours, the actual manufacturing overhead for the year was $830,000, and manufacturing overhead for the year was overapplied by $41,200. If the predetermined overhead rate is based on direct labor-hours, then the estimated direct labor-hours at the beginning of the year used in the predetermined overhead rate must have been: (Round your intermediate calculations to 2 decimal places.)
Answer:
estimated direct labor hours= 35,800
Explanation:
Giving the following information:
The estimated manufacturing overhead= $859,200
The actual direct labor-hours= 36,300 hours
The actual manufacturing overhead= $830,000
Manufacturing overhead for the year was overapplied by $41,200
To calculate the estimated direct labor-hours, we need to reverse engineer the allocated overhead process.
Under/over applied overhead= real overhead - allocated overhead
-41,200= 830,000 - allocated overhead
allocated overhead= 871,200
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
871,200= Estimated manufacturing overhead rate*36,300
Estimated manufacturing overhead rate= $24 per direct labor hour
Finally, the estimated direct labor hours:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
24= 859,200/estimated direct labor hours
estimated direct labor hours= 859,200/24
estimated direct labor hours= 35,800
Dog Up! Franks is looking at a new sausage system with an installed cost of $460,000. This cost will be depreciated straight-line to zero over the project's five-year life, at the end of which the sausage system can be scrapped for $55,000. The sausage system will save the firm $155,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $29,000. If the tax rate is 21 percent and the discount rate is 10 percent, what is the NPV of this project?
Answer:
The Net Present Value (NPV) of this project is $93,405.59.
Explanation:
Note: Find attached the excel file for the calculation of the NPV of this project.
Net present value (NPV) refers to the present value of cash inflows minus the present value of cash outflows over a specified period of time.
On its own, present value (PV) refers the value that a future sum of money or stream of cash flows has now or currently given a specified rate of return. The formula for calculating the PV is given as follows:
PV = FV / (1 + r)^n
Where,
FV = Future value
r = discount rate. This is given as 10% in this question
n = Relevant period, e.g. year
The above explanation and formula together with other stated formulae in the attached excel file is used in calculating the NPV of this project.
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a rate of 4.4%. The probability distribution of the risky funds is as follows:
Expected Return Standard Deviation
Stock fund (S) 14% 34%
Bond fund (B) 5 28
The correlation between the fund returns is 0.14.
Solve numerically for the proportions of each asset and for the expected return and standard deviation of the optimal risky portfolio. (Do not round intermediate calculations and round your final answers to 2 decimal places. Omit the "%" sign in your response.)
Portfolio invested in the stock %
Portfolio invested in the bond %
Expected return %
Standard deviation %
Answer:
The answer to this question can be defined as follows:
Explanation:
The risk-free rate of T-bill is (r f), which is 4.4% = 0.044. The fund for stocks (S) An expected 14% = 0.14 return and the value of the standard deviation is 34% = 0.34. The Announcement fund of (B) and the estimated 5% = 0.05 return, with a standard deviation 28% = 0.28 .
following are the formula for the equation is:
[tex]E(R)=E(r)-r_f \ \ \ \ \ \ \ \ \ \ \ \ where, \\\\E(R)= \ Expected \ return\\E (r) = \ Expected \ return \ on \ stock \\(r_f)= \ Risk-free \ rate[/tex]
Using the formula to measure the projected return for bond and stock fund:
[tex]E(R_s)=E(r_s)-r_f\\[/tex]
[tex]=0.14-0.044\\ =0.096\\[/tex]
[tex]E(R_B)=E(r_B)-r_f[/tex]
[tex]= 0.05-0.044\\= 0.006[/tex]
Measure mass with optimized risk for stock index fund (S) and Bond Fund (B), Introduce to investment as follows:
[tex]W_s=\frac{E(R_s)\sigma_{B}^2-E(R_B) Cov(r_s,r_s)}{E(R_s)\sigma_B^2+E(R_B)\sigma_s^2-[E(R_s)+E(R_s)]Cov(r_s,r_s)}[/tex]
[tex]W_s = \ Stock \ Fund \ weight \\ W_B = \ Bond \ Fund \ weight \\[/tex]
[tex]\sigma_s[/tex][tex]= \ de fault \ stock \ found \ variance\\[/tex]
[tex]\sigma_{B}= \ Bond \ Fund \ standard \ deviation \\r_s = \ Stock \ fund \ planned \ return \\r_B = \ Bond \ fund's \ projected \ return\\ Cov(r_s, r_B)= \ Pension \ and \ bond \ fund \ covariance\\[/tex]
Measure the portfolio and bond fund covariance according to:
Bond and equity fund covariance [tex]= \ Bond \ and \ stocks \ fund \ correlation \times \sigma_s \times \sigma_B[/tex]
[tex]= 0.14 \times 0.34 \times 0.28\\= 0.013328\\[/tex]
Measure the mass of the stock and bond fund as follows:
[tex]W_s=\frac{E(R_s)\sigma_{B}^2-E(R_B) Cov(r_s,r_s)}{E(R_s)\sigma_B^2+E(R_B)\sigma_s^2-[E(R_s)+E(R_s)]Cov(r_s,r_s)}[/tex]
[tex]=\frac{0.096 \times 0.28^2-0.006\times 0.013328}{0.096 \times 0.28^2+0.006\times 0.34^2-[0.096+0.006]\times 0.013328}[/tex]
[tex]=\frac{0.0075264-0.000079968}{0.0075264+0.0006936-0.001359456}\\\\=\frac{0.007446432}{0.006860544}\\\\=1.085\\[/tex]
[tex]W_B=1-W_s\\\\[/tex]
[tex]=1-1.085\\\\=-0.85[/tex]
The correspondence(p) here is 0.14. Calculate the norm for the maximum risky as follows:
[tex]\ deviation \ of \ portfolio \ =\sqrt{(W_s)^2 (\sigma_s)^2+(W_B)^2 (\sigma_B)^2+ 2(W_s)(W_B)(\sigma_s) (\sigma_B) (P)}[/tex]
[tex]=\sqrt{(1.05)^2 (0.34)^2+(-0.0854)^2 (0.28)^2+ 2(1.0854)(-0.0854)(0.34) (0.28) (0.14)}\\=\sqrt{0.13428852416704}\\=0.366453986\\=36.65%[/tex]
The standard deviation for the optimal risky portfolio is 36.65%
[tex]\ Expected \ return \ portfolio = (\ mass \ of \ stock \ found \times \ expected \ return \ on\ stock)+ ( mass \ of \ bond\ found \times \ expected \ return \ on\ bond)[/tex][tex]=(1.085\times 0.14)+(-0.0854 \times 0.05)\\= 0.151956-0.00427\\=0.1477\\=14.77%\\[/tex]
The optimal risk portfolio is 14.77%
Bailliere Company recorded cash sales of $300,000 and cost of goods sold relating to those sales of $120,000 on its Excel spreadsheet during the month of June. At the end of June, the company closed its underapplied overhead in the amount of $5,000 to cost of goods sold and reflected that transaction on its spreadsheet. What is the amount of cost of goods sold that will be reported on the company's income statement for the month of June?
a) $120,000
b) $125,000
c) $115,000
d) $175,000
Answer:
Option B
Cost of goods reported =$ 125,000
Explanation:
Overheads are charged to units produced by the means of using an estimated overhead absorption rate. This rate is computed using budgeted overhead and budgeted activity level.
As a result of this, overhead charged to total units product might be over or under absorbed compared to the actual amount incurred.
The under applied overhead implies that the applied overhead is less than the actual overhead.
This implies that the cost of the goods are under valued. Hence, to accurately valued them, the under applied overhead would be added to the cost of the goods.
Cost of goods reported = cost of goods + under applied overhead
= 120,000 + 5,000 = 125,000
Cost of goods reported =$ 125,000