Answer:
1,304 copies
Explanation:
Overage cost (Co) means like cost of over ordering
Co = Cost price - Salvage value
Co = $1.50 - $0 (No salvage value)
Co = $1.50
Underage cost (Cu) means like cost of under ordering
Cu = Selling price - Cost price
Cu = $5.00 - $1.50
Cu = $3.50
Service level = Cu / (Cu + Co)
Service level = $3.50 / ($3.50 + $1.50)
Service level = $3.50 / $5.00
Service level = 0.7
Z-value = NORMSINV (Service level), Using Ms Excel
Z-value = NORMSINV (0.7)
Z-value = 0.52
Optimal Order Quantity (Q) = Mean Demand + (Z-value*Standard deviation)
Optimal Order Quantity Q = 1,200 + (0.52*200)
Optimal Order Quantity Q = 1,200 + 104
Optimal Order Quantity Q = 1,304 copies
Johnson and Gomez, Inc. is a small firm involved in the production and sale of electronic business products. The company is well known for its attention to quality and innovation.
During the past 15 months, a new product has been under development that allows users improved access to e-mail and video images. Johnson and Gomez code named the product the Wireless Wizard and has been quietly designing two models: Basic and Enhanced. Development costs have amounted to $183,000 and $264,000, respectively. The total market demand for each model is expected to be 41,000 units, and management anticipates being able to obtain the following market shares: Basic, 20 percent; Enhanced, 15 percent. Forecasted data follow.
Basic Enhanced
Projected Selling Price $350.00 $450.00
Per-unit productions costs:
Direct material 43.00 69.00
Direct labor 23.00 31.00
Variable overhead 37.00 49.00
Marketing and advertising (fixed but avoidable) 196,000 305,000
Sales commissions* 15% 10%
*Computed on the basis of sales dollars.
Since the start of development work on the Wireless Wizard, advances in technology have altered the market somewhat, and management now believes that the company can introduce only one of the two models. Consultants confirmed this fact not too long ago, with Johnson and Gomez paying $34,600 for an in-depth market study. Sales salaries (excluding commission) will be $86,000 no matter which product is sold. The marketing and advertising costs indicated for each product are incurred only if that product is sold. Other fixed overhead is expected to be the same, regardless of which product is introduced.
Required:
1. Compute the unit contribution margin for both models. (Round your answers to 2 decimal places.)
2. Which of the following should be ignored in making the product-introduction decision? (You may select more than one answer.)
a. Development costs
b. Market study
c. Marketing and Advertising
d. Fixed manufacturing overhead
e. Variable manufacturing overhead
f. Sales salaries
3-a. Prepare a financial analysis and determine which of the two models should be introduced.
3-b. The company would be advised to select the Enhanced model or Basic model?
4. What other factors should Johnson and Gomez, Inc. consider before a final decision is made? (You may select more than one answer.)
a. Possibility of merger of the firm with a bigger player
b. Growth potential of the Basic and Enhanced models
c. Competitive products in the marketplace
d. Aesthetic differences between the two products
e. Break-even points
f. Data validity
g. Previous years' sales trends
h. Production feasibility
i. Effects, if any, on existing product sales
Answer:
1) contribution margin for each product
basic: $ 194.50
enhanced $ 256.00
2)
we could ignore the sunk cost of development and market study
as they were already incurred.
3) we should introduce the basic model as their operating income is greater than enhanced.
3-b)
b. Growth potential of the Basic and Enhanced models
e. Break-even points
f. Data validity
i. Effects, if any, on existing product sales
Explanation:
1)
Basic:
materials 43
labor 23
variable 37
sales commissions 15% 52.5
total variable cost 155.5
CM 194.5
CMR 0.555714286
Enhanced:
Sales Price 450
Materials 69
Labor 31
Variable MO 49
sales com. 10% 45
total variable cost 194
CM 256
CMR 0.568888889
3)
Market 41000 41000
Share 0 0.15
Sales Volume 8,200 6,150
[tex]\left[\begin{array}{cccc}&Basic&Enhanced&Differential\\Sales Volume&8200&6150&\\CM_{unit}&194.5&256&49792\\ CM_{Total}&1594900&1574400&20500\\S.A&-282000&-391000&109000\\Operating&1398900&1269400&129500\\\end{array}\right][/tex]
On January 1, 2018, Surreal Manufacturing issued 600 bonds, each with a face value of $1,000, a stated interest rate of 3 percent paid annually on December 31, and a maturity date of December 31, 2020. On the issue date, the market interest rate was 4 percent, so the total proceeds from the bond issue were $583,352. Surreal uses the effective-interest bond amortization method and adjusts for any rounding errors when recording interest in the final year.
Required:
1. Prepare a bond amortization schedule 2-5.
2. Prepare the journal entries to record the bond issue, the interest payments on December 31, 2018 and 2019, the interest and face value payment on December 31, 2020 and the bond retirement.
Answer:
Period Bonds Interest Cash Increase in Bonds payable
Payable Expenses Paid Bonds payable at the end
2018 583352 23334.08 18000 5334.08 588686.1
2019 588686.1 23547.44 18000 5547.44 594233.5
2020 594233.5 23766.48 18000 5766.48 600000
Journal entries
Jan 01 2018
Cash account Dr $583352
Discount on Bonds Payable Dr $16648
Bonds payable Cr $600000
Dec 31 2018
Interest expense Dr $23334.08
Cash account Cr $18000
Discount on bonds Payable Cr $5334.08
Dec 31 2019
Interest expense Dr $23547.44
Cash account Cr $18000
Discount on bonds Payable Cr $5547.44
Dec 31 2020
Interest expense Dr 23766.48
Cash account Cr $18000
Discount on bonds Payable Cr $5766.48
Dec 31 2020
Bonds Payable Dr $600000
Cash account Cr $600000
01.01.2020 (Redemption at 101)
Bonds Payable Dr $600000
Loss on redemption of bonds Dr $11766.48
Cash account (600000*101%) Cr $606000
Discount on bonds payable Cr $5766.48
1. Surrel Manufacturing's bond amortization schedule is as follows:
Bond Amortization Schedule
Date Cash Payment Interest Expense Amortization Carrying Value
Jan. 1, 2018 $583,352
Dec. 31, 2018 $18,000 $23,334 $5,334 $588,686
Dec. 31, 2019 $18,000 $23,547 $5,547 $594,233
Dec. 31, 2020 $18,000 $23,767 $5,767 $600,000
2. Journal Entries to record the bond issuance, interest payments are as follows:
January 1, 2018
Debit Cash $583,352
Debit Bonds Discounts $16,648
Credit Bonds Payable $600,000
To record the issuance of the bonds at a discount.December 31, 2018
Debit Interest Expense $23,334
Credit Bonds Discounts $5,334
Credit Cash $18,000
To record the payment of interest and discount amortization.December 31, 2019
Debit Interest Expense $23,547
Credit Bonds Discounts $5,547
Credit Cash $18,000
To record the payment of interest and discount amortization.December 31, 2020
Debit Interest Expense $23,767
Credit Bonds Discounts $5,767
Credit Cash $18,000
To record the payment of interest and discount amortization.December 31, 2020
Debit Bonds Payable $600,000
Credit Cash $600,000
To record the retirement of the bonds payable.Data and Calculations:
Face value of bonds issued = $600,000 (600 x $1,000)
Bonds proceeds = $583,352
Bonds discounts = $16,648
Coupon interest rate = 3%
Market interest rate = 4%
Maturity period = 3 years
Issuance date = January 1, 2018
Maturity date = December 31, 2020
December 31, 2018:
Cash payment = $18,000 ($600,000 x 3%)
Interest Expense = $23,334 ($583,352 x 4%)
Amortization of discounts = $5,334 ($23,334 - $18,000)
Carrying value of bond = $588,686 ($583,353 + $5,334)
December 31, 2019:
Cash payment = $18,000 ($600,000 x 3%)
Interest Expense = $23,547 ($588,686 x 4%)
Amortization of discounts = $5,547 ($23,547 - $18,000)
Carrying value of bond = $594,233 ($588,686 + $5,547)
December 31, 2020:
Cash payment = $18,000 ($600,000 x 3%)
Interest Expense = $23,767 ($594,233 x 4%)
Amortization of discounts = $5,767 ($23,767 - $18,000)
Carrying value of bond = $600,000 ($594,233 + $5,767)
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b. A Venezuelan-style economic collapse would be less likely in a mixed economy like the United States because
a. corruption is less likely when economic power is more diffused.
b. private industry has strong financial incentives to produce efficiently.
c. mixed economies like the United States usually have a more equal distribution of income.
d. inflation is always low in a mixed economy.
Answer:
a. corruption is less likely when economic power is more diffused. b. private industry has strong financial incentives to produce efficiently.Explanation:
Venezuela is a planned / command economy which means that the government directs production of goods and services in the country. This can lead to corruption as those in government would become quite powerful and engage in activities that would make them richer at the expense of the nation because they will have the required access to do so.
As the government directs most things, there is less private industry and competition. With a lack of competition, companies will not see the need to compete and would end up being inefficient.
These are what happened in Venezuela.
What stock should I buy
Two important group outcomes or consequences of the interactive
process that unfolds between a leader, follower, and the situation
include:
Answer:
task performance and group maintenance.
Explanation:
Leadership can be defined as a process which typically involves motivating, encouraging and inspiring employees working under an individual to be innovative and create positive changes that will foster growth and enhance the success of a business firm or company in the future.
This ultimately implies that, beyond an individual possessing the traits or qualities of a leader, leadership in itself is a process that revolves around the activities or happenings between the leader and those who he or she is leading, which are the followers. Thus, leadership is simply a continuous process and it's transactional in nature because it occurs between a leader and the followers.
A leader can be defined as an individual who is saddled with the responsibility of controlling, managing and maintaining a group of people under him or her.
Some types of power expressed by leaders are referent power, coercive power, etc.
Hence, two important group outcomes or consequences of the interactive process that unfolds between a leader, follower, and the situation include task performance and group maintenance.
Leaders are saddled with the responsibility of ensuring that the follower performs his or her duties or tasks as stated in the contract and to foster cohesion among the various team members.
Ann lives in Princeton, New Jersey, and commutes by train each day to her job in New York City (20 round trips per month). When the price of a round trip goes up from $10 to $20, she responds by consuming exactly the same number of trips as before, while spending $200 per month less on restaurant meals. Does the fact that her quantity of train travel is completely unresponsive to the price increase imply that Ann is not a rational consumer
Answer:
Yes
Explanation:
Use the following data to calculate the current ratio.
Skysong, Inc. Balance Sheet December 31, 2017
Cash $65500 Accounts payable $131500
Accounts receivable 93000 Salaries and wages payable 17500
Inventory 148000 Mortgage payable 173000
Prepaid insurance 87500 Total liabilities $322000
Stock Investments 194500 Land 185500
Buildings $219500 Common stock $216500
Less: Accumulated depreciation (72500) 147000 Retained earnings 483500
Trademarks 101000 Total stockholders' equity $700000
Total assets $1022000 Total liabilities and stockholders' equity $1022000
a. 2 : 1
b. 2.64 : 1
c. 2 : 1
d. 3 : 1
Answer:
b. 2.64 : 1
Explanation:
Current ratio = Current assets/Current liabilities
Current assets = Cash + Account Receivables + Inventory + Prepaid insurance
Current assets = $65500 + $93000 + $148000 + $87500
Current assets = $394,000
Current liabilities = Accounts payable + Salaries and wages payable
Current liabilities = $131500 + $17500
Current liabilities = $149,000
Hence, Current ratio = $394,000/$149,000
Current ratio = 2.644295
Current ratio = 2.64 : 1
Fedoras (F)
Very Very Bad-inators (B)
Perry
6/hr
4/hr
Dr. Doofenshmirtz
2/hr
10/hr
Graph the production possibilities frontier per hour for both Perry’s and Dr. Doofenshmirtz’s. (4 points)
Perry’s PPF
Dr. Doofenshmirtz’s PPF
Based on production per hour calculated in b., determine per unit opportunity costs of producing Fedoras and Bad-inators. Show your calculations for both Perry’s and Dr. Doofenshmirtz’s.
Who has comparative advantage in F? (1 point)
Determine a price range that is suitable for trade for both Fedoras and Bad-inators. (4 points)
Price range for Fedoras: 1F = ( , )
Price range for Bad-inators: 1 B = ( , )
If the trade price is 1F = 1B do both Perry and Dr. Doofenshmirtz gain from trade? Why?
(4 points)
Determine the new consumption possibilities frontier (CPF) with trade at the trade price of 1F = 1S for both Perry’s and Dr. Doofenshmirtz’s. Show the area of gains from trade in your graphs if it exists. (6 points)
Some people know how it works but 1+1 is 5
Mcewan Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on 48,000 direct labor-hours, total fixed manufacturing overhead cost of $307,200, and a variable manufacturing overhead rate of $2.80 per direct labor-hour. Job X941, which was for 50 units of a custom product, was recently completed. The job cost sheet for the job contained the following data:
Total direct labor-hours 300
Direct materials $600
Direct labor cost $6,400
Required:
Calculate the selling price for Job X941 if the company marks up its unit product costs by 20%.
Answer:
$234.24 per unit
Explanation:
The computation of the selling price for Job X941 is shown below:
But before that following calculations need to be determined
The Predetermined overhead rate is
= Variable overhead per DLH + Fixed overhead per DLH
= $2.80 + ($307,200 ÷ 48,000)
= $9.2 per DLH
Now the Total cost of Job X941 is
= Direct materials + Direct labor + Overhead applied
= $600 + $6,400 + (300 × $10)
= $9,760
And, finally
The Selling price per unit of Job X941 is
= Unit product costs × 120%
= ($9,760 ÷ 50) × 120%
= $234.24 per unit
Seth Erkenbeck, a recent college graduate, has just completed the basic format to be used in preparing the statement of cash flows (indirect method) for ATM Software Developers. All amounts are in thousands (000s).
ATM SOFTWARE DEVELOPERS Statement of Cash Flows For the year ended December 31, 2021
Cash Flows from Operating Activities
Net income
Adjustments to reconcile net income to net cash flows from operating activities:
Net cash flows from operating activities
Cash Flows from Investing Activities
Net cash flows from investing activities
Cash Flows from Financing Activities
Net cash flows from financing activities
Net increase (decrease) in cash $1,725
Cash at the beginning of the period 8,215
Cash at the end of the period $9,940
Listed below in random order are line items to be included in the statement of cash flows.
Cash received from the sale of land $8,590
Issuance of common stock 12,925
Depreciation expense 5,435
Increase in account receivable 4,030
Decrease in account payable 1,730
Issuance of long-term notes payable 16,345
Purchase of equipment 39,715
Decrease in inventory 1,445
Decrease in prepaid rent 875
Payment of divivdends 6,310
Net income 11,800
Purchase of treasury stock 2,585
Required:
Prepare the statement of cash flows for ATM software developers using the indirect method. List cash outflows and any decrease in cash as negative amounts. Enter the answer in thousands.
Answer:
See below
Explanation:
Statement of cash flow for ATM SOFTWARE
• The figures seems to be in thousands already.
Cash flow from operating activities
Net income
$11,800
Increase in Account receivable
($4,030)
Decrease in Account payable
($1,730)
Depreciation expense
$5,435
Decrease in inventory
$1,445
Decrease in prepaid rent
$875
Net cash flow from operating activities
$13,795
Cash flow from investing activities
Sale of land
$8,590
Purchase of equipment
($39,715 )
Net cash flow from financing activities
($31,125)
Cash flow from financing activities
Issuance of stock
$12,925
Long term note payable
$16,345
Purchase of treasury stock
($2,585 )
Payments of dividends
($6,310)
Net cash flow from financing activities
$20,375
Net increase in cash
$1,725
Cash at the beginning
$8,215
Cash at the end
$9,940
Crowding-out is the notion that:_________
a. Since tax revenues vary directly with GDP, a rise in the level of GDP will increase the budget surplus and limit expansion
b. Deficit financing will increase the demand for money, increase the interest rate, and reduce the level of investment spending in the economy
c. The standardized budget is the best indicator of whether a budget deficit crowds out investment
d. The actual budget is the best indicator of whether a budget deficit crowds out saving
Answer:
B
Explanation:
The theory of crowding out is that as government spending and borrowing increases, the demand for money would increase. This would lead to an increase in interest rate. As a result, the level of investment spending would decline. The theory submits that increased government spending would drive down private spending
The manager at Jerome Mobility, Inc. reported the following information for 2019: Actual Results Static Budget Units sold 1,700 units 1,500 units Revenues $221,000 $195,000 Variable costs Direct materials 70,000 60,000 Direct manufacturing labor 36,500 31,500 Variable manufacturing overhead 16,000 13,500 Total variable costs 122,500 105,000 Contribution margin 98,500 90,000 Fixed costs 51,000 50,000 Operating income $47,500 $40,000 What is the static-budget variance for operating income for Jerome Mobility Inc. for 2019
Answer:
$7,500 F
Explanation:
Calculation to determine the static-budget variance for operating income for Jerome Mobility Inc. for 2019
Using this formula
2019 Static budgeted variance for operating income = Actual result - Static budget amount
Let plug in the formula
2019 Static budgeted variance for operating income= $47,500 - $40,000
2019 Static budgeted variance for operating income= $7,500 F
Therefore the static-budget variance for operating income for Jerome Mobility Inc. for 2019 will be $7,500 F
Jayden has one hour for his part of customer service training for new employees. Which is the best way to reinforce the learning? Have a quiz at the end of the session. Have a quiz at the end of the session. Use PowerPoint slides for each separate concept. Use PowerPoint slides for each separate concept. Put the sales associates on the floor for one hour. Put the sales associates on the floor for one hour. Set aside some partnered role play time with employees.
Answer:
Have a quiz at the end of the session.
Explanation:
Kaspar Corporation makes a commercial-grade cooking griddle. The following information is available for Kaspar Corporation's anticipated annual volume of 27,900 units.
Per Unit Total
Direct materials $16
Direct labor $10
Variable manufacturing overhead $16
Fixed manufacturing overhead $502,200
Variable selling and administrative expenses $6
Fixed selling and administrative expenses $111,600
The company uses a 40% markup percentage on total cost.
Required:
Compute the total cost per unit.
Answer:
$62.40
Explanation:
Cost per unit = Total manufacturing cost + 40 % markup
therefore
Total manufacturing cost = $16 + $10 + $16 + ($502,200 ÷ 27,900)
= $60
Cost per unit = $60 + ($60 x 40 %)
= $62.40
Conclusion
The total cost per unit is $62.40
A car repair shop has two hoists where cars can be lifted for repair work. Currently customers come in at the rate of 4 per hour and are processed at a similar rate. On average 8 cars are waiting to be processed, 4 needing routine repairs and 4 needing major repairs. People are served on a first come first serve basis. Now: The repair shop owner feels that he is losing many customers needing routine repair because of the long wait. He dedicates one hoist for routine repair and one for major repairs. A study indicates that routine repairs are processed at the rate of 3 per hour and major repairs at the rate of 1 per hour. There are now 5 people waiting on average for routine repairs and 3 waiting on average for major repairs. With the new system, what is the average waiting time over all customers
Answer:
The Cars wait an average of 1.67 hours before being served at routine repairs.
The Cars wait an average of 3 hours before being served at major repairs.
Explanation:
At the routine repair hoist, 5 people waiting on average hence the Inventory (I) = 5 cars. The cars are processed at a rate of 3 per hour, hence the Throughput (R) = 3 cars per hour.
Therefore the Flow time (T) = I/R = 5/3 = 1.67 hours.
The Cars wait an average of 1.67 hours before being served at routine repairs.
At the major repair hoist, 3 people waiting on average hence the Inventory (I) = 3 cars. The cars are processed at a rate of 1 per hour, hence the Throughput (R) = 1 cars per hour.
Therefore the Flow time (T) = I/R = 3/1 = 3 hours.
The Cars wait an average of 3 hours before being served at major repairs.
The cars will wait an average of 1.67 hours before being served at routine repairs while they'll wait an average of 3 hours before being served at major repairs.
From the information given, at the routine repair hoist, 5 people waiting on average and the cars are processed at a rate of 3 per hour, therefore the flow time (T) will be:
= I/R = 5/3 = 1.67 hours.
Also, at the major repair hoist, 3 people wait on average and the cars are processed at a rate of 1 per hour. Therefore, the Flow time (T) will be:
= I/R = 3/1 = 3 hours.
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If a firm offers a service that is valuable, rare, and costly to imitate, but a substitute exists for the service, the firm will: a. achieve competitive parity. b. have a competitive disadvantage. c. have a temporary competitive advantage. d. gain a sustainable competitive advantage.
Answer:
c. have a temporary competitive advantage
Explanation:
In this case, it is correct to say that the company has a temporary competitive advantage, as there is a substitute for its valuable, rare and expensive service to imitate.
The company gained a competitive advantage in the market for being the only one to offer that service, which by the attributes confer barriers of entry for new competitors, but when there is a substitute for the service and that have the same characteristics, it is correct to say that the company it will lose its competitive advantage in a matter of time, because with more competitors in the market it is common for there to be some loss of market share, so in this case it is ideal for the company to adapt and seek new attributes to innovate, generate more value for consumers and so seek a differential that will guarantee you a higher position in the market.
True or False: The largest companies performed the best over the past 12 months. Give evidence to support your answer.
The largest companies performed the best over the past twelve months, this given statement is false because over the last twelve months companies have faced huge losses due to pandemic.
What losses did businesses face during the Pandemic?Businesses have reduced employment, supply chain have got affected, lack of storage, less demand for products and services, human resource loss, productivity loss, and increased expenditures of the firms, these are some of the major losses faced by the companies during the pandemic.
Thus, the given statement is false.
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National defense is a good that is non excludable and nonrival in consumption. Suppose that, instead of national defense being paid with tax dollars, national defense is paid by voluntary contributions from (potentially) all individuals within Latvia.
Alan, who is a Latvian citizen, must decide whether he wants to contribute to the national defense budget Further, suppose that there are a total of 10 citizens, including Alan. For the optimal amount of safety, each citizen should pay $10. Every $1 contributed (by anyone) to the national defense, leads to increased security, which each person values at $0.25. This means that every dollar spent on defense is worth $2.50 to Latvia as a whole.
Suppose that, instead of relying on voluntary contributions, the government simply levies a tax of $10 on each person to pay for national defense. How much better or worse off would Alan be if everyone (including himself) were taxed $10 instead of contributing voluntarily?
If Alan is worse off, be sure to put a negative sign in front of the number.
Answer:
Alan is better off by $15
Explanation:
the number of citizens in latvia = 10
if citizens were levied $10 each, total amount
= 10*10
=$100
each persons valuation = 100*0.25
= $25
$25 is also Alans valuation sice he is a part of this population.
since he contribited $10, his net gain would be
$25.00 - $10.00
= $15.00
Alan is better of by $15 in the tax system.
The corporate charter of Alpaca Co. authorized the issuance of 10 million, $1 par common shares. During 2021, its first year of operations, Alpaca had the following transactions:
January 1 sold 8 million shares at $15 per share
June 3 retired 2 million shares at $18 per share
December 28 sold 2 million shares at $20 per share
What amount should Alpaca report as additional paid-in capital—excess of par, in its December 31, 2021, balance sheet?
A. $104 million
B. $6 million
C. $52 million
D. $208 million
Answer:
Alpaca Co.
The amount that Alpaca should report as additional paid-in capital, in excess of par, in its December 31, 2021 balance sheet is:
= $116 million
Explanation:
a) Data and Calculations:
Authorized share capital = 10 million, $1 par common shares
Transactions during the year:
Date Number of shares issued Price Common Stock Additional
January 1 sold 8 million shares at $15 $8 million $112 million
June 3 retired 2 million shares at $18 (2 million) (34 million)
December 28 sold 2 million shares $20 2 million 38 million
Total $10 million $116 million
b) Additional paid-in capital represents the excess capital that is received above the par value of the shares issued. When the retired shares (treasury stock) are accounted for using the cash method, the additional capital is stated less the treasury stock's excess issue value. When the par value method is used, a treasury stock account is created separately so that the two adjustments to the treasury stock account are reflected differently.
Rinehart Corporation purchased from its stockholders 5,000 shares of its own previously issued stock for $255,000. It later resold 2,000 shares for $54 per share, then 2,000 more shares for $49 per share, and finally 1,000 shares for $43 per share.
Prepare journal entries for the purchase of the treasury stock and the three sales of treasury stock.
Answer:
Dr Treasury Stock $255,000
Cr Cash $255,000
Dr Cash $108,000
Cr Treasury Stock $98,000
Cr Additional paid-in-capital (treasury stock)$10,000
Dr Cash $98,000
Cr Additional paid-in-capital (treasury stock)$10,000
Cr Treasury Stock $88,000
Dr Cash $43,000
Cr Common Stock $43,000
Explanation:
Preparation of the journal entries for the purchase of the treasury stock and the three sales of treasury stock.
Purchase
Dr Treasury Stock $255,000
Cr Cash $255,000
(Being to record purchase from stockholders)
Sale 1
Dr Cash $108,000
(2000*54)
Cr Treasury Stock $98,000
(2000*49)
Cr Additional paid-in-capital (treasury stock)$10,000
($108,000-$98,000
(Being To record sales of shares at $54 per share.)
Sale 2
Dr Cash $98,000
Cr Additional paid-in-capital (treasury stock)$10,000
Cr Treasury Stock $88,000
($98,000-$10,000)
(Being to record sale of shares at 49 per share )
(2000*49)
Sale 3
Dr Cash $43,000
Cr Common Stock $43,000
(1,000 shares for $43 per share)
At December 31, 2020, the available-for-sale debt portfolio for Blossom, Inc. is as follows.
Security Cost Fair Value Unrealized Gain (Loss)
A $17,900 $15,200 $(2,700)
B 11,000 15,000 4,000
C 24,000 26,500 2,500
Total $52,900 $56,700 3,800
Previous fair value adjustment balance—Dr. 400
Fair value adjustment—Dr. $3,400
On January 20, 2021, Blossom, Inc. sold security A for $15,300. The sale proceeds are net of brokerage fees. Blossom, Inc. reports net income in 2020 of $123,000 and in 2021 of $142,000. Total holding gains (including any realized holding gain or loss) equal $41,000 in 2021.
Prepare a statement of comprehensive income for 2020, starting with net income.
Prepare a statement of comprehensive income for 2021, starting with net income.
Answer:
a. Blossom Inc
Statement of Comprehensive Income
For the Year Ended December 31, 2020
Particulars Amount
Net income $123,000
Other comprehensive income:
Add: Unrealized holding gain $3,400
Comprehensive income $126,400
b. Blossom Inc
Statement of Comprehensive Income
For the Year Ended December 31, 2021
Particulars Amount
Net income $142,000
Other comprehensive income:
Total holding gains in 2021 $41,000
Add: Reclassification adjustment- $2,700
for loss included in net income $38,300
Comprehensive income $180,300
Note:
Particulars Amount
Net amount received from the sale of Security A $17,900
Less: Cost of Security A $15,200
Loss on the sale of Security A ($2,700)
On September 12, Vander Company sold merchandise in the amount of $3,950 to Jepson Company, with credit terms of 2/10, n/30. The cost of the items sold is $2,725. Vander uses the periodic inventory system and the gross method of accounting for sales. On September 14, Jepson returns some of the merchandise. The selling price of the merchandise is $340 and the cost of the merchandise returned is $240. Jepson pays the invoice on September 18, and takes the appropriate discount. The journal entry that Vander makes on September 18 is:
Answer:
Date Account Debit Credit
September 18 Cash $3,537.80
Sales discount $ 72.20
Accounts Receivable $3,610
Explanation:
Net merchandise sold = 3,950 - 340
= $3,610
Sales discount is 2% if paid in 10 days which Jepson did.
= 2% * 3,610
= $72.20
Cash = Net sales - discount
= 3,610 - 72.20
= $3,537.80
Alice MeyerMeyer?,owner of Flower DirectFlower Direct?, operates a local chain of floral shops. Each shop has its own delivery van. Instead of charging a flat delivery? fee,
MeyerMeyer wants to set the delivery fee based on the distance driven to deliver the flowers. MeyerMeyer wants to separate the fixed and variable portions of her van operating costs so that she has a better idea how delivery distance affects these costs. She has the following data from the past 7? months:
February and May are always Flower DirectFlower Direct?'s biggest months because of? Valentine's Day and? Mother's Day, respectively. Use the? high-low method to determine
Flower DirectFlower Direct?'s cost equation for van operating costs. Use your results to predict van operating costs at a volume of 16 comma 00016,000 kilometres.
? / ? = variable cost (slope)
? - ? = fixed cost
Use the? high-low method to determine Flower DirectFlower Direct?'s operating cost equation. ?(Round the variable cost to the nearest cent and the fixed cost to the nearest whole? dollar.)
Y = $?x + $?
Use the operating cost equation you determined above to predict van operating costs at a volume of 16 comma 00016,000 kilometres
the operating costs at a volume of 16 comma 00016,000 kilometres is ?$ ?
Table :
Month Kilometres Driven Van Operating Costs
January 16,000 $5,490
February 17,500 5,700
March 14,900 4,910
April 16,200 5,340
May 16,900 5,820
June 15,100 5,410
July 14,500 4,920
Answer:
Flower Direct1. Operating cost equation = $0.26x + $1,150
2. Prediction of operating costs at a volume of 16,000 is:
= $5,310
Explanation:
a) Data and Calculations:
Month Kilometres Driven Van Operating Costs
January 16,000 $5,490
February 17,500 5,700
March 14,900 4,910
April 16,200 5,340
May 16,900 5,820
June 15,100 5,410
July 14,500 4,920
High-Low Method:
February 17,500 5,700
July 14,500 4,920
Difference 3,000 780
Variable cost per unit = $780/3,000 = $0.26
Total variable cost at February figures = $4,550 (17,500 * $0.26)
Total fixed costs at February figures = $1,150 ($5,700 - $4,550)
Operating cost equation = $0.26x + $1,150
Operating cost at a volume of 16,000 = $1,150 + $0.26 * 16,000
= $1,150 + 4,160
= $5,310
You are interested in valuing a 2-year semi-annual corporate coupon bond using spot rates but there are no liquid strips available. However, you do find the following 4 comparable semi-annual bonds (below) maturing over the next 2 years. Using the bootstrap approach, calculate the 12-month spot rate.
Time remaining to maturity Coupon Bond price
6 months 0.000% 99.000
1 year 1.250% 98.000
18 months 1.500% 97.000
2 years 1.250% 96.000
a. 1.668%
b. 3.335%
c. 4.167%
d. 4.189%
e. 4.204%
Answer:
Following are the solution to this question:
Explanation:
Assume that [tex]r_1[/tex] will be a 12-month for the spot rate:
[tex]\to 1.25 \% \times \frac{100}{2} \times 0.99 + \frac{(1.25\% \times \frac{100}{2}+100)}{(1+\frac{r_1}{2})^2}=98\\\\\to \frac{1.25}{100} \times \frac{100}{2} \times 0.99 + \frac{(\frac{1.25}{100} \times \frac{100}{2}+100)}{(1+\frac{r_1}{2})^2}=98\\\\\to \frac{1.25}{2} \times 0.99 + \frac{(\frac{1.25}{2} +100)}{(1+\frac{r_1}{2})^2}=98\\\\\to 0.61875 + \frac{( 0.625 +100)}{(\frac{2+r_1}{2})^2}=98\\\\\to 0.61875 + \frac{( 100.625)}{(\frac{2+r_1}{2})^2}=98\\\\\to 0.61875 + \frac{402.5}{(2+r_1)^2}=98\\\\[/tex]
[tex]\to 0.61875 + \frac{402.5}{(2+r_1)^2}=98\\\\\to 0.61875 -98 = \frac{402.5}{(2+r_1)^2}\\\\\to -97.38125= \frac{402.5}{(2+r_1)^2}\\\\\to (2+r_1)^2= \frac{402.5}{ -97.38125}\\\\\to (2+r_1)^2= -4.13\\\\ \to r_1=3.304\%[/tex]
Assume that [tex]r_2[/tex] will be a 18-month for the spot rate:
[tex]\to 1.5\% \times \frac{100}{2} \times 0.99+1.5\% \times \frac{100}{2} \times \frac{1}{(1+ \frac{3.300\%}{2})^2}+\frac{(1.5\% \times \frac{100}{2}+100)}{(1+\frac{r_2}{2})^3}=97\\\\\to \frac{1.5}{100} \times \frac{100}{2} \times 0.99+\frac{1.5}{100} \times \frac{100}{2} \times \frac{1}{(1+ \frac{\frac{3.300}{100}}{2})^2}+\frac{(\frac{1.5}{100} \times \frac{100}{2}+100)}{(1+\frac{r_2}{2})^3}=97\\\\[/tex]
[tex]\to \frac{1.5}{2} \times 0.99+\frac{1.5}{2}\times \frac{1}{(1+ \frac{\frac{3.300}{100}}{2})^2}+\frac{(\frac{1.5}{2} +100)}{(1+\frac{r_2}{2})^3}=97\\\\\to 0.7425+0.75 \times \frac{1}{(1+ \frac{\frac{3.300}{100}}{2})^2}+\frac{(0.75 +100)}{(1+\frac{r_2}{2})^3}=97\\\\\to 1.4925 \times \frac{1}{(1+0.0165)^2}+\frac{(100.75 )}{(1+\frac{r_2}{2})^3}=97\\\\\to 1.4925 \times \frac{1}{(1.033)}+\frac{(100.75 )}{(1+\frac{r_2}{2})^3}=97\\\\[/tex]
[tex]\to 1.4925 \times 0.96+\frac{(100.75 )}{(1+\frac{r_2}{2})^3}=97\\\\\to 1.4328+\frac{(100.75 )}{(1+\frac{r_2}{2})^3}=97\\\\\to 1.4328-97= \frac{(100.75 )}{(1+\frac{r_2}{2})^3}\\\\\to -95.5672= \frac{(100.75 )}{(1+\frac{r_2}{2})^3}\\\\\to (1+\frac{r_2}{2})^3= -1.054\\\\\to r_2=3.577\%[/tex]
Assume that [tex]r_3[/tex] will be a 18-month for the spot rate:
[tex]\to 1.25\% \times \frac{100}{2} \times 0.99+1.25\% \times \frac{100}{2} \times \frac{1}{(1+\frac{3.300\%}{2})^2}+1.25\%\times\frac{100}{2} \times \frac{1}{(1+\frac{3.577\%}{2})^3}+(1.25\% \times \frac{\frac{100}{2}+100}{(1+\frac{r_3}{2})^4})=96\\\\[/tex]
to solve this we get [tex]r_3=3.335\%[/tex]
1) In the TOPCASH model, Analytics considerations include:
a. Is the analytics installation reliable?
b. The potential value of including specific goal tracking
c. All of the above
Answer:
b. The potential value of including specific goal tracking.
Explanation:
Top cash model is the one which prioritizes the cash value as compared to the product features. The potential value of a product is identified and then the price for the product is set. This creates value for money for customers.
Grant Industries, a manufacturer of electronic parts, has recently received an invitation to bid on a special order for 20,500 units of one of its most popular products. Grant currently manufactures 41,000 units of this product in its Loveland, Ohio, plant. The plant is operating at 50% capacity. There will be no marketing costs on the special order. The sales manager of Grant wants to set the bid at $13 because she is sure that Grant will get the business at that price. Others on the executive committee of the firm object, saying that Grant would lose money on the special order at that price.
Units 41,000 61,500
Manufacturing costs:
Direct materials $123,000 $184,500
Direct labor 164,000 246,000
Factory overhead 328,000 430,500
Total manufacturing costs$615,000 $861,000
Unit cost $15 $14
Required:
1. What is the relevant cost per unit and the bid price?
2. What would the total opportunity cost be if by accepting the special order the company lost sales of 6,500 units to its regular customers?
Answer:
Missing word "What would the total opportunity cost be if by accepting the special order the company lost sales of 6,500 units to its regular customers? Assume the above facts plus a normal selling price of $24 per unit."
Variable factory overhead per unit = (430,500 - 328,000) / 20,500 = $5
Direct materials per unit = $123,000 / 41,000 = $3
Direct labor per unit = 164,000 / 41,000 = $4
1. Relevant cost per unit = Direct materials per unit + Direct labor per unit + Variable factory overhead
Relevant cost per unit = $5 + $4 + $3
Relevant cost per unit = $12
So, the bid price should be above $10 per unit
2. Total opportunity cost would be the total contribution margin lost for the lost sales to the regular customer
Total opportunity cost = Loss of regular sales revenue - Total relevant cost for lost sales
Total opportunity cost = (6,500*$24) - (6,500*$12)
Total opportunity cost = $156,000 - $78,000
Total opportunity cost = $78,000
1. The relevant cost per unit for Grant Industries is $7.00 ($123,000 + $164,000)/41,000 or ($184,500 + $246,000)/61,500.
2. The total opportunity cost of accepting the special order when the company lost sales of 6,500 units from its regular customers is $12,500.
What are the relevant costs and opportunity costs?The relevant costs describe the avoidable costs that could be stopped if a decision is taken.
For example, if Grant Industries decides to take the special order, the relevant decision-making cost is $7 per unit and not $14 per unit.
The opportunity costs are costs that are not incurred based on taking an alternative decision. It also describes the lost revenue when some sales are lost for the special order.
For example, the total opportunity costs incurred by Grant Industries for taking the special order instead of attending to the regular customers with 6,500 units demand is $12,500.
Data and Calculations:Special order = 20,500 units
Current production = 41,000 units
Current operational capacity = 50%
Total capacity = 82,000 (41,000/50%)
Bid price = $13 per unit
New production based on special order = 61,500 (41,000 + 20,500)
Production Data Per Unit Per Bid
Units 41,000 61,500
Manufacturing costs:
Direct materials $123,000 $184,500
Direct labor 164,000 246,000
Factory overhead 328,000 430,500
Total manufacturing costs $615,000 $861,000
Unit cost $15 $14
Question 2 Completion:Assume the above facts plus a normal selling price of $24 per unit."
The opportunity cost of lost sales:Lost sales units = 6,500
Contribution per unit = $17 ($24 - $7)
Total contribution margin = $110,500 ($6,500 x $17)
Contribution margin from special order = $123,000 ($13 - $7 x 20,500)
Thus, the opportunity cost of lost sales is $12,500 ($123,000 - $110,500).
Learn more about relevant and opportunity costs at https://brainly.com/question/14184614 and https://brainly.com/question/8846809
Mark Brandt, an employee of Mueller Corp., earned 3 weeks of compensated vacation time during the current year, but only took 2 weeks of vacation. His employer permits that 1 week of vacation can be carried forward to the following year. Mark fully intends to remain at his current employer and plans to take his vacation during the following year. His current weekly salary is $2,000. Mueller Corp. expects to grant a general salary increase of 5% effective at the beginning of the next year. What amount should Mueller accrue during the current year relating to Mark Brandt's carried-forward vacation
Answer:
Mark Brandt of Mueller Corporation
The amount that Mueller should accrue during the current year relating to Mark Brandt's carried-forward vacation is:
= $2,100
Explanation:
a) Data and Calculations:
Current weekly salary = $2,000
Expected general salary increase = 5%
The amount that Mueller should accrue during the current year relating to Mark Brandt's carried-forward vacation is:
= $2,000 * 1.05
= $2,100
b) $2,100 is the amount that will be paid in cash for cash settlement of Mark Brandt's carried-forward vacation, assuming he does not take it the following year.
Given the following information, which of the following firms has the lowest required rate of return? Group of answer choices
a. Schuldig Co. has a current share price of $5.50, an expected dividend of $1.05 per share, and a negative growth rate of 10%.
b. Iccarus Inc. has a current share price of $275.80, an expected dividend of $3.10, and a growth rate of 14%
c. Simpson, LLC. has a current share price of 94.30, an expected dividend of $3.00, and a growth rate of 10%.
d. I don't know that!
Answer:
Shuldig Co. has the lowest required rate of return
Explanation:
Shuldig Co.
$5.50 = $1.05 / (Re + 10%)
Re = 19% - 10% = 9%
Iccarus Inc.
$275.80 = $3.10 / (Re - 14%)
Re = 1.1% + 14% = 15.1%
Simpson LLC.
$94.30 = $3.00 / (Re - 10%)
Re = 3.2% + 10% = 13.2%
these are the choices fill in the blanks.
asset backed security.
bank run
credit default swap.
capital
bond.
credit
common stock.
credit crunch
mortgage-backed securities.
debt
mutual fund.
default
option.
equity
futures contract.
foreclosure
subprime mortgage.
leverage
central bank.
liquidity
commercial bank.
liquidity risk
hedge fund.
moral hazard
investment bank.
mortgage
fannie mae/ freddie mac.
nationalization
federal deposit insurance corporation.
regulation
federal reserve system.
return
private equity fund
risk
securitization
Assume that a company cannot determine the market value of equipment acquired by reference to a similar purchase for cash. Explain how the company determines the cost of equipment purchased by exchanging it for each of the following 3 items: Bonds having an established market price. Bonds that do not have an established market price. Common stock not having an established market price. Similar equipment having a determinable market value.
Solution :
Let us suppose that a company cannot predict the market value of an equipment that acquired by the reference to the similar purchase for the cash. Thus the company finds cost of purchased of the equipment by exchanging :
-- the market price of the bonds when they have an established price in the market.
-- the market price of the bonds when the common stocks does not have a established market price.
-- market price of the equipment when the similar kind of an equipment have a determinable value in the market.