A delivery company is considering adding another vehicle to its delivery fleet; each vehicle is rented for $100 per day. Assume that the additional vehicle would be capable of delivering 1,500 packages per day and that each package that is delivered brings in ten cents in revenue. Also assume that adding the delivery vehicle would not affect any other costs.

Required:
a. What is the MRP? What is the MRC? Should the firm add this delivery vehicle?
b. Now suppose that the cost of renting a vehicle doubles to S200 per day. What are the MRP and MRC? Should the firm add a delivery vehicle under these circumstances?
c. Next suppose that the cost of renting a vehicle falls back down to SIOO per day but, due to extremely congested freeways, an additional vehicle would only be able to deliver 750 packages per day. What are the MRP and MRC in this situation? Would adding a vehicle under these circumstances increase the firm's profits?

Answers

Answer 1

Answer:

a. What is the MRP? What is the MRC? Should the firm add this delivery vehicle?

marginal revenue product = marginal product of labor x marginal revenue per output unit

MRP = 1,500 packages x $0.10 per package = $150

marginal resource cost (MRC) = $100 (the cost of renting the delivery truck)

The company should add the delivery truck because MRP is higher than MRC.

b. Now suppose that the cost of renting a vehicle doubles to $200 per day. What are the MRP and MRC in this situation?

MRP = $150 (doesn't change from question a)

MRC = $200 (the cost of renting the delivery truck)

The company should not add the delivery truck because MRP is less than MRC.

c. Next suppose that the cost of renting a vehicle falls back down to $100 per day, but, due to extremely congested freeways, an additional vehicle would only be able to deliver 750 packages per day. What are the MRP and MRC in this situation? Would adding a vehicle under these circumstances increase the firm's profits?

MRP = 750 packages x $0.10 per package = $75

MRC = $100

The company should not add the delivery truck because MRP is less than MRC.


Related Questions

Sunshine LLC sold furniture for $75,650. Sunshine bought the furniture for $89,870 several years ago and has claimed $24,935 of depreciation expense on the machine. What is the amount and character of Sunshine's gain or loss

Answers

Answer:

The gain is $10,715

Explanation:

Solution

Given that:

The cost of furniture =$89,870

Accumulation of depreciation = $24,935

Thus

The book value of furniture= $89,870 - $24,935

=$64,935

The sale value of the furniture = $75,650

Now,'

The gain on sale of the furniture is given below:

Gain on sale of furniture = sale price - book value

= $75,650 -  $64,935

=$10,715

The gain is The long term capital gain on sale of furniture is $10,715

The required return on the stock of Moe's Pizza is 10.8 percent and aftertax required return on the company's debt is 3.40 percent. The company's market value capital structure consists of 69 percent equity. The company is considering a new project that is less risky than current operations and it feels the risk adjustment factor is minus 1.9 percent. The tax rate is 39 percent. What is the required return for the new project? rev: 12_20_2018_QC_CS-152115 Multiple Choice 10.41% 6.19% 8.51% 9.99% 6.61%

Answers

Answer:

The required return for the new project is 6.87%

Explanation:

In order to calculate the required return for the new project we would have to calculate the Weighted Average Cost of Capital (WACC) adjusted by risk adjustment factor .

The Weighted Average Cost of Capital (WACC) = [After Tax Cost of Debt x Weight of Debt] + [Cost of equity x Weight of Equity]

After -tax Cost of Debt = 3.40%

Cost of Equity = 10.80%

Weight of Debt = 0.39

Weight of Equity = 0.69

Therefore, the Weighted Average Cost of Capital (WACC) = [After Tax Cost of Debt x Weight of Debt] + [Cost of equity x Weight of Equity]

= [3.40% x 0.39] + [10.80% x 0.69]

= 1.32% + 7.45%

= 8.77%

The required return for the new project = Weighted Average Cost of Capital – Risk Adjustment Factor

= 8.77% - 1.90%

= 6.87%

The required return for the new project is 6.87%

The expected average rate of return for a proposed investment of $636,800 in a fixed asset with a useful life of 4 years, straight-line depreciation, no residual value, and an expected total net income of $191,560 for the 4 years is (round to two decimal points)

Answers

Answer: 15.96

Explanation:

The expected rate of return will be the Average income divided by the average cost.

It is stated that the asset has a useful life of 4 years with no residual value so at the end of 4 years it will be worth $0.

The Average Cost/ Value of the Asset is calculated as;

= (Beginning Asset value - Ending Asset Value) / 2

= (600,000 - 0) /2

= 300,000

Total Income of $191,560 for the 4 years so Average income will be,

= 191,560/4

= $47,890

Expected Average Rate of Return = 47,890/300,000

= 15.96%

You work for a marketing agency advising a client considering whether to drop prices during an economic downturn. The client, a manufacturer of children's outdoor swing sets, believes that reducing prices would lead to more sales. The client is aware that lower prices would yield less revenue per sale. However, the client is unaware of any other possible negative consequences of dropping prices.
1. Advise the client of some of those possible consequences. Include a description of the psychological issues at play in dropping a brand's price.
2. Identify and evaluate price-adjustment strategies beyond a straightforward reduction in retail price that the client should consider.

Answers

Explanation:

1- One of the pieces of advice I could give the customer about lowering the balance sheet price is that this could generate different interpretations for the potential consumer, as there may be a perception that the price reduction of the product occurred due to the loss of product quality in relation to competing products.

2- There are other effective strategies for managing an economic crisis in addition to a direct reduction in the retail price, such as the psychological price strategy, which are the marketing techniques used by salespeople so that consumers respond emotionally to the product, and not a logical way, which generates a perception of greater benefit for the consumer, which can lead to increased sales without having to lower the price of the product.

Rafael has decided to retire once he has $1,000,000 in his retirement account. At the end of each year, he will contribute $7,000 to the account, which is expected to provide an annual return of 6.2%. How many years will it take until he can retire

Answers

Answer:

38 years

Explanation:

in order to determine the amount of years that it will take Rafael to retire, we can use the future value annuity formula:

future value = payment x annuity factor

we know:

future value = $1,000,000payment = $7,000

annuity factor = $1,000,000 / $7,000 = 142.8571

the formula to calculate an annuity factor = [(1 + r)ⁿ - 1] / r

142.8571 = [(1 + 0.062)ⁿ - 1] / 0.062

8.8571 = (1.062)ⁿ - 1

9.8571 = (1.062)ⁿ

using a scientific calculator, we can determine the value of n = 38.0389491 years ≈ 38 years

Your uncle is about to retire, and he wants to buy an annuity that will provide him with $75,000 of income a year for 20 years, with the first payment coming immediately. The going rate on such annuities is 5.25%. How much would it cost him to buy the annuity today

Answers

Answer:

The annuity will cost him $963,212.95.-

Explanation:

Giving the following information:

Cash flow= $75,000

Interest rate= 0.0525

n= 20

First, we need to calculate the final value. We will use the following formula:

FV= {A*[(1+i)^n-1]}/i + {[A*(1+i)^n]-A}

A= annual cash flow

FV= {75,000*[(1.0525^20) - 1]/0.0525} + {[75,000*(1.0525^20)] - 75,000}

FV= 2,546,491.88 + 133,690.82= $2,680,182.70

Now, the present value:

PV= FV/(1+i)^n

PV= 2,680,182.70/(1.0525^20)

PV= $963,212.95

Determine the total equivalent units for direct materials, assuming that the first-in, first-out method is used to cost inventories. Assume that all direct materials are placed in the process at the beginning of production.

Answers

Answer:

37,000 units

Explanation:

The computation of the total equivalent units for direct material is shown below:

= Transferred to finished goods during the month of July + Ending work in process during the month of July - Inventory in process, July 1

= 37,500 units + 3,500 units - 4,000 units

= 41,000 units - 4,000 units

= 37,000 units

We simply applied the above formula so that the total equivalent units for direct materials could come

Compute net income for 2019 by comparing total equity amounts for these two years and using the following information: During 2019, the owner invested $33,000 additional cash in the business (in exchange for common stock) and the company paid a $36,000 cash dividend.
Equity, December 31, 2018
Equity, December 31, 2019
The accounting records of Nettle Distribution show the following assets and liabilities as of December 31, 2018 and 2019.
December 31 2018 2019
Cash $55,530 $10,900
Accounts receivable 30,142 23,632
Office Supplies 4,755 3,483
Office equipment 145,958 155,473
Trucks 57, 115 66, 115
Building 0 190, 398
Land 0 47,511
Accounts payable 79,245 39,303
Note payable 0 137,909

Answers

Answer:

net income during 2019 = $109,045

Explanation:

total stockholder equity 2018 = assets - liabilities = $293,500 - $79,245 = $214,255

total stockholder equity 2019 = assets - liabilities = $497,512 - $177,212 = $320,300

change in equity from 2018 to 2019 = $106,045

$33,000 can be explained by additional capital invested, and the remaining  $73,045 corresponds to change in retained earnings

change in retained earnings = net income - dividends distributed

$73,045 = net income - $36,000

net income = $109,045

Prepare summary journal entries to record the following transactions for a company in its first month of operations.
1. Raw materials purchased on account, $86,000.
2. Direct materials used in production, $38,500. Indirect materials used in production, $23,000.
3. Paid cash for factory payroll, $50,000. Of this total, $38,000 is for direct labor and $12,000 is for indirect labor.
4. Paid cash for other actual overhead costs, $7,375.
5. Applied overhead at the rate of 125% of direct labor cost.
6. Transferred cost of jobs completed to finished goods, $62,600.
7. Sold jobs on account for $90,000 g(2). The jobs had a cost of $62,600 g(1).

Answers

Answer:

1.

Raw Materials $86,000 (debit)

Accounts Payable $86,000 (credit)

2.

Work In Process : Direct Materials $38,500 (debit)

Work In Process : Indirect Materials $23,000 (debit)

Raw Materials $61,500 (credit)

3.

Work In Process : Direct Labor $38,000 (debit)

Work In Process : Indirect Labor $12,000 (debit)

Cash $50,000 (credit)

4.

Overheads $7,375 (debit)

Cash $7,375 (credit)

5.

Work In Process $47,500 (debit)

Overheads $47,500 (credit)

6.

Finished Goods $62,600 (debit)

Work In Process $62,600 (credit)

7.

Accounts Receivable $90,000 (debit)

Cost of Sales $62,600 (debit)

Sales Revenue $90,000 (credit)

Finished Goods $62,600 (credit)

Explanation:

The costs of manufacture are accumulated in the Work In Process Account as was shown above.

Note that only Applied Overheads not Overheads incurred are included in Work In Process Account.

The Costs of Goods Transferred is Eliminated from The Work In Process Account and Included in the Finished Goods Account.

Journal 7 Records Both the Revenue and Cost of Goods Sold on Account.

For each of the following separate transactions: Sold a building costing $38,500, with $23,400 of accumulated depreciation, for $11,400 cash, resulting in a $3,700 loss. Acquired machinery worth $13,400 by issuing $13,400 in notes payable. Issued 1,340 shares of common stock at par for $2 per share. Note payables with a carrying value of $41,700 were retired for $50,400 cash, resulting in a $8,700 loss. (a) Prepare the reconstructed journal entry. (b) Identify the effect it has, if any, on the investing section or financing section of the statement of cash flows.

Answers

Answer:

Both requirements are solved below

Explanation:

REQUIREMENT A:

Sale of a building                        Debit      Credit

Cash                                           $11,400

Acc Depreciation                       $23,400

Loss on disposal                        $3700

Building                                                        $38,500

Acquisition of Machinery                   Debit      Credit

Machinery                                         $13,400

Notes                                                                  $13,400

Issuance of share                         Debit      Credit

Cash(1340x2)                            $2,680

Share Capital                                             $2,680

Retired Debt                        Debit         Credit

Note payable                      $41,700

Loss on retirement            $8,700

Cash                                                      $50,400

REQUIREMENT B:

Cash flow from investing activities

Gain on disposal of building                    $11,400

Net cash flow from investing activities    $11,400

Cash flow from financing activities

Cash received from issuing shares             $2,680

Cash paid for retirement of debt                 ($50,400)

Net cash flow from investing activities        ($47,720)

Gould Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: Activity Cost Pool Activity Rate Setting up batches $ 59.71 per batch Processing customer orders $ 73.05 per customer order Assembling products $ 4.40 per assembly hour Data concerning two products appear below: Product K91B Product F65O Number of batches 92 63 Number of customer orders 42 56 Number of assembly hours 496 903 How much overhead cost would be assigned to Product K91B using the activity-based costing system

Answers

Answer:

Product K91B= $10,743.82

Explanation:

Giving the following information:

Activity Cost Pool Activity Rate

Setting up batches $ 59.71 per batch

Processing customer orders $ 73.05 per customer order

Assembling products $ 4.40 per assembly hour

Product K91B

Number of batches 92

Number of customer orders 42

Number of assembly hours 496

We were given the allocation rates, all we need to do is allocate based on actual allocation base:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Product K91B= 59.71*92 + 73.05*42 + 4.4*496

Product K91B= $10,743.82

Huprey Co. is the defendant in the following legal claims. For each of following claims, does Huprey (a) record a liability, (b) disclose in notes, or (c) have no disclosure. 1. Huprey can resonably estimate that a pending lawsuit will result in damages of $1,280,000it is probable that Huprey will lose the case. Have no disclosure. Record a liability. Disclose in notes. 2. It is reasonably possible that Huprey will lose a pending lawsuit. The loss cannot be estimable. Have no disclosure. Disclose in notes. Record a liability. 3. Huprey is being sued for damages of $2,400,000. It is very unlikely (remote) that Huprey will lose the case. Have no disclosure. Record a liability. Disclose in notes. rev: 02_07_2018_QC_CS-117158

Answers

Answer:

1. Huprey can resonably estimate that a pending lawsuit will result in damages of $1,280,000, it is probable that Huprey will lose the case.

Record a liability.  

2. It is reasonably possible that Huprey will lose a pending lawsuit. The loss cannot be estimable.

Disclose in notes.

3. Huprey is being sued for damages of $2,400,000. It is very unlikely (remote) that Huprey will lose the case.

Have no disclosure.

Explanation:

Contingent liabilities must be recorded only when it is probable that the liability will happen and you can estimate the associated costs.

When contingent liabilities are only reasonably possible or you cannot estimate the amount, they must be included in the footnotes of the financial statements.

When contingent liabilities are not reasonably possible, nothing needs to be disclosed.

Debbie and Alan open a web-based bookstore together. They have been friends for so long that they start their business on a handshake after discussing how they will share both work and profits or losses from the business. Have Debbie and Alan formed a real partnership given that they have signed no written partnership agreement?

Answers

Answer:

Yes

Explanation:

Debbie and Alan have formed a real partnership even though they have signed no written partnership agreement because partnership does not require legal Documentation.

Many partnerships are formed naturally because the people who are involved in the business share similar goals, so their partnerships don't need formation documents to exist. 

Beginning and ending work in process inventories are negligible, so they are omitted from the cost of production report. The flavor changeover cost represents the cost of cleaning the bottling machines between production runs of different flavors. Determine the cost per case for each of the four flavors. Round your answers to two decimal places.

Answers

Answer and Explanation:

The cost per case for each of the four flavors are shown below:

Particulars                    Orange    Cola Lemon Lime Root Beer

Total Cost Transferred

to finished goods (a)  $19,125       $391,800  $324,000 $36,000

No. of Cases (b)              2,500        60,000  50,000         4,000

Cost Per Case

(a ÷ b)                                $7.65         $6.53   $6.48           $9

By dividing the total cost from the number of cases we can get the cost per case for each of the four flavors

Decision Making Mystic Bottling Company bottles popular beverages in the Bottling Department. The beverages are produced by blending concentrate with water and sugar. The concentrate is purchased from a concentrate producer. The concentrate producer sets higher prices for the more popular concentrate flavors. A simplified Bottling Department cost of production report separating the cost of bottling the four flavors follows:
A B C D E
1 Orange Cola Lemon-Lime Root Beer
2 Concentrate $ 4,625 $129,000 $ 105,000 $ 7,600
3 Water 1,250 30,000 25,000 2,000
4 Sugar 3,000 72,000 60,000 4,800
5 Bottles 5,500 132,000 110,000 8,800
6 Flavor changeover 3,000 4,800 4,000 10,000
7 Conversion cost 1,750 24,000 20,000 2,800
8 Total cost transferred to finished goods $19,125 $391,800 $324,000 $36,000
9 Number of cases 2,500 60,000 50,000 4,000
10 Beginning and ending work in process inventories are negligible, so they are omitted from the cost of production report. The flavor changeover cost represents the cost of cleaning the bottling machines between production runs of different flavors.
Determine the cost per case for each of the four flavors. Round your answers to two decimal places
Orange Cola Lemon-Lime Root Beer
per case $_____ $_____ $_____ $_____

Answers

Answer and Explanation:

As per the scenario the solution of cost per case for each of the four flavors is shown below:-

Particulars                 Orange      Cola        Lemon Lime     Root Beer

Total Cost

transferred to

finished goods a        $19,125     $391,800  $324,000        $36,000

Number of cases b      2,500        60,000    50,000              4,000

Cost Per Case               $7.65         $6.53        $6.48               $9

(c = a ÷ b)

Therefore we divide the total cost transferred to finished out by number of cases to figure out the cost per case.

Suppose a consumer has the following utility function defined over the 2 goods X and Y: a. If this consumer originally consumed 10 units of X and 24 units of Y, and if the consumption of X were increased to 12 units, how much Y would be would the consumer be willing to give up and maintain the initial level of satisfaction

Answers

Answer:

Y = 22 units (Approx)

Explanation:

Note:

The utility function is not given, the utility function is as follows.

U(X ,Y) = 2X + [tex]16Y^{1/2}[/tex]

So,

U(X ,Y) = 2X + [tex]16Y^{1/2}[/tex]

When X = 10 and Y = 24 units

U(10 ,24) = 2(10) + [tex]16(24)^{1/2}[/tex]

U(10 ,24) = 98.4

U(10 ,24) = 99 Units (Approx)

So,

U(X ,Y) = 2X + [tex]16Y^{1/2}[/tex]

When X = 12 Find Y

99 units = 2(12) + [tex]16Y^{1/2}[/tex]

75 = [tex]16Y^{1/2}[/tex]

Y = 21.97

Y = 22 units (Approx)

In the business gift-giving world, if a company gives a gift to a potential client for the purpose of influencing their behavior in their favor, it is unethical. What are the three criteria and dimensions of evaluating a business gift? Multiple Choice Question

Answers

Answer:

Context, culture and content

Explanation:

Gift giving in business is common and also contentious. Business gifts are often for advertising, sales promotion, and marketing communication medium.

These kind of gifts are for the following reasons:

1. In appreciation.

2. In the hopes of creating a positive first impression.

3. Returning a favor or expecting a favor in return for something.

When it comes to considering appropriate business gifts it is helpful for one to think about the content of the gift, the context of the gift, and the culture in which it will be received.

Giving a gift to a potential client for the purpose of influencing their behavior is a form of Bribery.

Vargas Company uses the perpetual inventory method. Vargas purchased 800 units of inventory that cost $9.00 each. At a later date the company purchased an additional 1,200 units of inventory that cost $10.00 each. Vargas sold 900 units of inventory for $13.00. If Vargas uses a FIFO cost flow method, the amount of cost of goods sold appearing on the income statement will be:

Answers

Answer:

$8200

Explanation:

FIFO means first in first out. It means that it is the first purchased inventory that is the first to be sold.

The cost of the 900 units sold, would be:

800 x 9 = $7200

100 × $10 = $1000

Total = $8200

I hope my answer helps you

Zaid's Tent Company has total fixed costs of $300,000 per year. The firm's average variable cost is $65 for 10,000 tents. At that level of output, the firm's average total costs equal Group of answer choices $65 $75 $85 $95

Answers

Answer:

$95

Explanation:

average variable cost per unit = $65

average fixed cost per unit = $300,000 / 10,000 = $30

average total cost per unit = $95

Fixed costs do not vary if the production output changes, while variable costs move in the same direction as the production output, e.g. if output increases, variable costs increase as well.

Record adjusting journal entries 100 of the following for year ended December 31
Assume no other adjusting entries are made during the year

Salaries Payable.: At year-end, salaries expense of $24,000 has been incurred by the company, but is not yet paid to employees.
Interest Payable: At its December 31 year-end, the company owes $675 of interest on a line-of-credit loan. That interest will not be paid until sometime in January of the next year.
Interest Payable: At its December 31 year-end, the company holds a mortgage payable that has incurred $1,300 in annual interest that is neither recorded nor paid. The company intends to pay the interest on January 7 of the next year.

Answers

Answer:

Salaries Payable :

Salaries Expense $24,000 (debit)

Salaries Payable $24,000 (credit)

Interest Payable:

Interest Expense $675 (debit)

Interest Payable $675 (credit)

Interest Payable:

Interest Expense $1,300 (debit)

Interest Payable $1,300 (credit)

Explanation:

When an amount is incurred but is deferred to another period for payment, a liability is recognized.

A liability is a present legal obligation arising from a past event, the settlement of which will result in outflow of economic benefits (Cash) from the entity.

Sherry and John Enterprises are using the kaizen approach to budgeting for 2018. The budgeted income statement for January 2018 is as follows: Sales (168,000 units) $1,010,000 Less: Cost of goods sold 690,000 Gross margin 320,000 Operating expenses 400,000 (includes $55,000 of fixed costs) Operating income -$80,000 Under the kaizen approach, cost of goods sold and variable operating expenses are budgeted to decline by 1% per month. What is the budgeted operating income for March 2018

Answers

Answer:

February Kaizen Budgeted Operating income -$ 69,650

March Kaizen Budgeted Operating income-$ 59,405.5

Explanation:

The Kaizen costing primarily focuses on production processes and in it the cost reductions are obtained through increasing efficiency.

Sales (168,000 units) $1,010,000

Less: Cost of goods sold 690,000

Gross margin 320,000

Operating expenses 400,000 (includes $55,000 of fixed costs)

Operating income -$80,000

Calculations For February

Decrease by 1% of COGS  $ 690,000= $ 690,000-$6900=$ 683,100

Decrease by 1% of Variable Expenses $ 345000= $ 345000-3450= $ 341550

Budgeted Operating Income Under Kaizen Costing For February

Sales (168,000 units) $1,010,000

Less: Cost of goods sold 683,100

Gross margin 326,900

Operating expenses

Variable Expenses $ 341550

Fixed Costs $55,000

Operating income -$ 69,650

Calculations For March

Decrease by 1% of COGS  $ 683,100= $ 683,100-$6831=$ 676,269

Decrease by 1% of Variable Expenses $ 341 550= $ 341550-3415.5= $ 338134.5

Budgeted Operating Income Under Kaizen Costing For March

Sales (168,000 units) $1,010,000

Less: Cost of goods sold $ 676,269

Gross margin 333,731

Operating expenses

Variable Expenses $ 338134.5

Fixed Costs $55,000

Operating income -$ 59,405.5

Fill in the missing numbers for the following income statement. (Do not round intermediate calculations.)

Sales $668,600
Cost 431,300
Depreciation 103,700
EBIT
Taxes (24%)
Net Income

a. Calculate the OCF. (Do not round intermediate calculations.)
b. What is the depreciation tax shield?

Answers

Answer:

a. $205,236

b. $24,888

Explanation:

a. The computation of OCF is shown below:-

EBIT = Sales - Cost - Depreciation

= $668,600 - $431,300 - $103,700

= $133,600

Net income = EBIT - Taxes

= $133,600 - ($133,600 × 24%)

= $133,600 - $32,064

= $101,536

Operating cash flow = EBIT - Taxes + Depreciation

= $133,600 - $32,064 + $103,700

= $205,236

b. The computation of depreciation tax shield is shown below:-

Depreciation tax shield = Depreciation × Tax

= $103,700 × 24%

= $24,888

For a Marketing course: What skills from this course would you use to create a three-paragraph promotional tool that explains the value of a chosen product and a sales pitch aimed at individual buyers

Answers

Answer:

After taking a Marketing Course, I should be armed with the following promotional skills:

Innovation Skills: It is expected that a marketing professional should be able to think differently, energise creativity in  the business and craft maverick ways of gaining the attention of the market and transform that attention to patronage.Market Development Skills: One is also expected to gain the ability to identify and articulate latent  customer needs (even before the customers become aware of them), spot socioeconomic  trends as well as technological  developments which create opportunities for the company as well as for the customer.Pricing Technology: Pricing is an art and a science. It involves accounting, economics and psychology. Marketing deals with the economics and psychology bit of it. Armed with this information, one is able to get into the mind of the individual buyers and them to firm up their buying decision.

Cheers!

To create a promotional tool that explains the value of a product and a sales pitch aimed at buyers, its characteristics and benefits could be cited, such as innovation, price and added benefits.

For a company to be well positioned in the market, it is necessary to create value for its consumers, which is identified from:

How much the customer is willing to pay for your products and services.

Marketing skills therefore must identify the strengths of the company and opportunities from the external environment, to satisfy consumer needs through:

IdentificationQualityAvailabilityCompatible priceBenefitsRelationship

Therefore, to create value, a company must reduce production costs or generate differentiation in order to be able to charge a premium price in relation to competitors.

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O.K. Company uses a job order cost accounting system and allocates its overhead on the basis of direct labor costs. O.K. expects to incur $2,000,000 of overhead during the next period and expects to use 50,000 labor hours at a cost of $10.00 per hour. What is O.K. Company's overhead application rate

Answers

Answer:

Predetermined manufacturing overhead rate= $0.4 per direct labor dollar

Explanation:

Giving the following information:

O.K. expects to incur $2,000,000 of overhead during the next period and expects to use 50,000 labor hours for $10.00 per hour.

To calculate the predetermined manufacturing overhead rate we need to use the following formula:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 2,000,000/ (50,000*10)

Predetermined manufacturing overhead rate= $0.4 per direct labor dollar

On August 31,the balance sheet of La Brava Veterinary Clinic showed cash $9,000,Account receivable$1700,supplies $600,equipments $6000,account payable $3600,common stock $13,00 and retained earings $700. During september,the following transaction occur
1. paid $2900 cash for accounts payable
2. collected $1,300 of accounts receivable
3. purchased additional equipments for $2100,paying $800 in cash and the balance on account
4. recognized revenue of $7300 of which $1500 is collected in cash and balance due in october
5. declared and paid $400 cash dividend
6. paid salaries $1700 rent for september $900,and advertising expense $200
7. Incurred utilities expense for month on account $170
8. Received $10,000 from capital bank on 6 month note payable
a. prepare a tabular analysis of september transactions begin with august 31 balances.column headings: cash,account receivable,supplies,equipments,account payable,common stock,retain earnings with separate column for revenues,expenses,dividends.Including margin explanation changes in retain earnings. Revenue is called Service Revenueb. prepare an income statements for september,a retained earnings statements for september,and a balance sheet at september 30.

Answers

Answer:

Brava Veterinary Clinic

a) Tabular Analysis of September Transactions:

see attached.

b1) Income Statement for September:

Service Revenue  $7,300

Expenses:

Salaries      $1,700

Rent               900

Advertising   200

Utilities          170 ($2,970)

Net Income         $4,330

b2) Retained Earnings Statements for September

Net Income                               $4,330

Beginning Retained Earnings    $700

Dividends                                   ($400)

Ending Retained Earnings     $4,630

b3) Balance Sheet at September 30:

Assets:

Cash                                    $14,900

Accounts Receivable             6,200

Supplies                                    600

Equipment                              8,100

Total Assets                     $29,800

Liabilities + Equity:

Accounts Payable              $12,170

Common Stock                   13,000

Retained Earnings               4,630

Total Liabilities + Equity  $29,800

Explanation:

Financial Statements (Income Statement and Balance Sheet) are prepared at the end of a period to show the financial performance (Net Income) and the financial position (Assets = Liabilities + Equity) of a business entity.

A tabular statement of transactions illustrates the changes that have taken place during the period as a result of transactions.  Transactions affect the Assets and Liabilities and Equity equally.  The excess of revenue over expenses gives a net income.

Answer:

For a better visualization of the answer the first point was attached as an image.

Income Statement

Sales Revenues       7300

Salaries expense     (1700)

Rent Expense           (900)

Advertising Expense (200)

Utilities expense        (170)

Net Income             4,330

Retained Earnings  

Beginning   700

Income     4,330

Dividends   (400)

Ending      4,630

Balance Sheet

Cash                         14,900

Account Receivables 6,200

Supplies                        600

Current                      21,700

Equipment                   8,100

Total Assets               29,800

Liablities  

Account Payable 2,170

Note Payable     10,000

Total Liabilities   12,170

Equity

Common Stock    13,000

Retained Earnings  4,630

Total Equity           17,630

Total Liabilities + Equity 29,800

Explanation:

The dividends paid are not considered an expense.

We consider revenues and expense using the accrual basis rather than cash basis so we also recognize accrued expense (utilities ) and accrued revenues (sales which weren't paid right away)

For the Balance sheet the equipment is considered long.temr asset as their usefil life exceed a year.

The note payable while it is different from account payable is also a current liaiblity as it is due within the one-uyear window.

Cane Company manufactures two products called Alpha and Beta that sell for $195 and $150, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 123,000 units of each product. Its unit costs for each product at this level of activity are given below
Alpha Beta
Direct materials $40 $15
Direct labor 34 28
Variable manufacturing overhead 22 20
Traceable fixed manufacturing overhead 30 33
Variable selling expenses 27 23
Common fixed expenses 30 25
Total cost per unit $183 $144
The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are deemed unavoidable and have been allocated to products based on sales dollars.
1) What contribution margin per pound of raw material is earned by Alpha and Beta?
2) Assume that Cane's customers would buy a maximum of 95,000 units of Alpha and 75,000 units of Beta. Also, assume that the company's raw material available for production is limited to 245,000 pounds. How many units of each product should Cane produce to maximize its profits?
3) Assume that Cane's customers would buy a maximum of 95,000 units of Alpha and 75,000 units of Beta. Also, assume that the company's raw material available for production is limited to 245,000 pounds. What is the maximum contribution margin Cane Company can earn given the limited quantity of raw materials?
4) Assume that Cane's customers would buy a maximum of 95,000 units of Alpha and 75,000 units of Beta. Also, assume that the company's raw material available for production is limited to 245,000 pounds. Up to how much should it be willing to pay per pound for additional raw materials?

Answers

Answer:

Explanation:

Alpha = $195

Beta = $150

total production capacity = 123,000 pounds

raw materials = $5 per pound

Production costs per unit                        Alpha                Beta

direct materials                                          $40                   $15

direct labor                                                 $34                   $28

variable manufacturing overhead            $22                   $20  

fixed manufacturing overhead                 $30                   $33

variable selling expenses                         $27                   $23

common fixed expenses                          $30                   $25  

total cost per unit                                     $183                  $144

1) What contribution margin per pound of raw material is earned by Alpha and Beta?

                                                                Alpha                Beta

contribution margin                                  $72                  $64

contribution margin per pound               $9                  $21.33

2) Assume that Cane's customers would buy a maximum of 95,000 units of Alpha and 75,000 units of Beta. Also, assume that the company's raw material available for production is limited to 245,000 pounds. How many units of each product should Cane produce to maximize its profits?

                                                                Alpha                Beta

contribution margin                                  $72                  $64

contribution margin per pound                $9                  $21.33

production (in units)                                2,500              75,000

profits                                                    $30,000          $450,000

total profits                                                   $480,000

3) Assume that Cane's customers would buy a maximum of 95,000 units of Alpha and 75,000 units of Beta. Also, assume that the company's raw material available for production is limited to 245,000 pounds. What is the maximum contribution margin Cane Company can earn given the limited quantity of raw materials?

                                                                Alpha                Beta

contribution margin                                  $72                  $64

contribution margin per pound                $9                  $21.33

production (in units)                                2,500              75,000

contribution margin                             $180,000      $4,800,000

total contribution margin                            $4,980,000

4) Assume that Cane's customers would buy a maximum of 95,000 units of Alpha and 75,000 units of Beta. Also, assume that the company's raw material available for production is limited to 245,000 pounds. Up to how much should it be willing to pay per pound for additional raw materials?

If it wants to increase the production of Alpha, it could pay as much as ($195 - $183) / 8 = $1.50 extra per pound if it wants to maximize profits. Maximum price = $6.50 per pound. At this point, marginal revenue = price.

1. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the first-in, first-out method and the periodic inventory system. Inventory, June 30 $ Cost of goods sold $ 2. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the last-in, first-out method and the periodic inventory system. Inventory, June 30 $ Cost of goods sold $ 3. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the weighted average cost method and the periodic inventory system. Note: Round the weighted average unit cost to the nearest dollar and final answers to the nearest dollar. Inventory, June 30 $ Cost of goods sold $ 4. Compare the gross profit and June 30 inventories using the following column headings. For those boxes in which you must enter subtracted or negative numbers use a minus sign. FIFO LIFO Weighted Average Sales $ $ $ Cost of goods sold Gross profit $ $ $ Inventory, June 30 $ $ $

Answers

Complete Question:

The beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are as follows: Date Transaction Number of Units Per Unit Total Apr. 3 Inventory 25 $1,200 $30,000 8 Purchase 75 1,240 93,000 11 Sale 40 2,000 80,000 30 Sale 30 2,000 60,000 May 8 Purchase 60 1,260 75,600 10 Sale 50 2,000 100,000 19 Sale 20 2,000 40,000 28 Purchase 80 1,260 100,800 June 5 Sale 40 2,250 90,000 16 Sale 25 2,250 56,250 21 Purchase 35 1,264 44,240 28 Sale 44 2,250 99,000

Required: 1. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the first-in, first-out method and the periodic inventory system. Inventory, June 30 $ Cost of goods sold $

2. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the last-in, first-out method and the periodic inventory system. Inventory, June 30 $ Cost of goods sold $

3. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the weighted average cost method and the periodic inventory system. Note: Round the weighted average unit cost to the nearest dollar and final answers to the nearest dollar. Inventory, June 30 $ Cost of goods sold $

4. Compare the gross profit and June 30 inventories using the following column headings. For those boxes in which you must enter subtracted or negative numbers use a minus sign. FIFO LIFO Weighted Average Sales $ $ $ Cost of goods sold Gross profit $ $ $ Inventory, June 30 $ $ $

Answer:

Dunne Co.

1. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the first-in, first-out method and the periodic inventory system:

a) Inventory, June 30  = $32,864 (26 x $1,264)

b) Cost of goods sold = Cost of goods available for sale - Ending Inventory = $310,776 ($343,640 - $32,864)

2. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the last-in, first-out method and the periodic inventory system:

a) Inventory, June 30 =  $31,240

Beginning Inventory 25 units at $1,200 = $30,000

Purchase on April 8, 1 unit at $1,240               1,240

Total Ending Inventory                                $31,240

b)Cost of goods sold = Cost of goods available for sale - Ending Inventory

= $311,400 ($343,640 - $32,240)

3. Determination of the inventory on June 30 and the cost of goods sold for the three-month period, using the weighted average cost method and the periodic inventory system. Note: Round the weighted average unit cost to the nearest dollar and final answers to the nearest dollar:

a) Inventory, June 30 = $32,500 (26 x $1,250)

b) Cost of goods sold = $311,250 (249 x $1,250)  

4. Comparison of the Gross Profit and June 30 inventories using the following column headings:

                                         FIFO                  LIFO         Weighted Average

Sales                            $525,250         $525,250         $525,250

Cost of goods sold        -310,776            -311,400              -311,150

Gross profit                  $214,474           $213,850           $214,100

Inventory, June 30       $32,864             $31,240            $32,489.60

Explanation:

a) Data on Purchase and Sale Transactions with the Quarter:

Date     Transaction     Number of Units    Per Unit             Total

                                         In        Out                              Cost      Sales

Apr. 3    Inventory          25                        $1,200       $30,000

     8      Purchase          75                          1,240          93,000

    11      Sale                                40           2,000                          80,000

   30     Sale                                30           2,000                          60,000

May 8   Purchase          60                         1,260           75,600

    10     Sale                               50           2,000                         100,000

    19    Sale                                20           2,000                          40,000

   28    Purchase          80                         1,260         100,800

June 5 Sale                               40           2,250                          90,000

       16 Sale                               25           2,250                          56,250

       21 Purchase         35                         1,264           44,240

      28 Sale                               44           2,250                          99,000

b) Goods Available   275                                         $343,640

Cost of goods sold   249                                   See calculations

Sales                                       249                                          $525,250

Ending Inventory        26          See Calculations

c) Average cost of goods = Cost of goods available for sale/Quantity of goods available for sale = $343,640/275 = $1,249.60

d) Under the periodic inventory system:

1) FIFO assumes that the goods bought first are sold first.

2) LIFO assumes that the goods bought last are sold first

3) Weighted Average takes for granted that the cost of goods available for sale and inventory can be determined with the weighted average.  

Using the period inventory system, it is when physical count is taken of inventory that one can estimate its value.  Unlike the perpetual inventory system, the periodic inventory system waits till a financial period ends to value stock.  The results for ending inventory under the weighted average method, using the perpetual inventory system differs from the results under the same method, using the periodic inventory system.

Russell Co. received a $680 utility bill for the current month's electricity. It is not due until the end of the next month which is when they intend to pay it. Which of the following general journal entries will Russell Co. make to record the receipt of the bill?

a. Utilities Expense 400
Accounts Payable 400

b. Accounts Payable 400
Utilities Expense 400

c. No journal entry is required.

d. Cash 400
Utilities Expense 400

e. Utilities Expense 400
Accounts Receivable 400

Answers

The correct options are :

a. Utilities Expense 680

Accounts Payable 680

b. Accounts Payable 680

Utilities Expense 680

c. No journal entry is required.

d. Cash 680

Utilities Expense 680

e. Utilities Expense 680

Accounts Receivable 680

Answer:

a. Debit Utilities Expense $680

Credit Accounts Payable $680

Explanation:

Russel Co has received a utility bill for the current month but they intend to pay next month.

Since the expense is for this month it must be recognised now. So there will be a debit to the Utilities Expense account for $680.

The payment is not being made now but in the next month. This is an amount the business owes so it will be recorded as a credit to Accounts Payable of $680

Accounts payable is used to record monies that the business owes its creditors. Payments are due at a future date.

Answer:

Debit Utilities Expense 680

Credit Accounts Payable 680

Explanation:

Russell Co. Journal entry to record the receipt of the bill will be:

Debit Utilities Expense 680

Credit Accounts Payable 680

Since Russell Co. received a $680 utility bill which is not yet due until the end of the next month which means we have to Debit Utilities Expense with 680 which is the amount not yet due and Credit Accounts Payable with the same amount .

A team is working on a cutting-edge technology, and does not have a lot of familiarity with the technical environment. As a result, it is struggling to estimate a complex story because the approach itself is not clear. How should the team proceed

Answers

Answer:

The answer is "Writing a SPIKE (a non-technical nonstory) as well as the period box until you accept your system planning article".

Explanation:

The working of the team is on state-of-the-art technology and its understanding of the relevant setting, and its main purpose of removing technological complexity is to conduct experiments-this is what a SPIKE tale is about. Whenever a story could not be predicted as the manager wants an experiment, it's indeed best to read a piece before continuing to work on the storyline.

Assume the following data for Lusk Inc. before its year-end adjustments: Debit CreditSales $3,600,000 Cost of Merchandise Sold $2,100,000Estimated Returns Inventory 1800Customer Refunds Payable 900Estimated cost of merchandise that Will be returned in the next year 15,000Estimated percent of refunds for current year sales 0.8%Journalize the adjusting entries for the following: a. Estimated customer allowances b. Estimated customer returns

Answers

Answer:

a. Estimated customer allowances

December 31, 202x. estimated customer allowance

Dr Sales 27,900

    Cr Customer refunds payable 27,900

total estimated refunds payable = $3,600,000 x 0.8% = $28,800 - $900 (account balance) = $27,900

b. Estimated customer returns

December 31, 202x. estimated customer returns

Dr Estimated returns inventory 13,200

    Cr Cost of merchandise sold 13,200

total estimated returns $15,000 - $1,800 = $13,200

Explanation:

Sales $3,600,000

Cost of Merchandise Sold $2,100,000

Estimated Returns Inventory $1800

Customer Refunds Payable $900

Estimated cost of merchandise that Will be returned in the next year $15,000

Estimated percent of refunds for current year sales 0.8%

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