Answer:
$1396.5
Explanation:
EOQ or economic order quantity formula is given as:
[tex]EOQ = \sqrt{\frac{2DC_o}{H_c}}[/tex]
Where, D = demand per year
C_0 = ordering cost and H_c = holding cost per unit per year
[tex]EOQ = \sqrt{\frac{2\times933\times55}{19}}[/tex]
EOQ= 73.5 units
Since, the order size is EOQ then, total holding cost
= holding cost per unit per year × EOQ
=73.5×19
=$1396.5
Nash Company purchased a computer for $8,160 on January 1, 2019. Straight-line depreciation is used, based on a 5-year life and a $1,020 salvage value. On January 1, 2021, the estimates are revised. Nash now feels the computer will be used until December 31, 2022, when it can be sold for $510. Compute the 2021 depreciation. (Round answer to 0 decimal places, e.g. 45,892.) Depreciation expense, 2021 $
Answer:
$2,397
Explanation:
Straight line method charges a fixed amount of depreciation
Depreciation Charge = (Cost - Residual Value) ÷ Estimated useful life
therefore,
Annual depreciation charge
2019
Depreciation Charge = $1,428
2020
Depreciation Charge = $1,428
2021
Depreciation Charge = ($8,160 - $1,428 - $1,428 - $510) ÷ 2
= $2,397
therefore,
Depreciation expense, 2021 is $2,397
Cooper Company currently uses the FIFO method to account for its inventory but is considering a switch to LIFO before the books are closed for the year. Selected data for the year are:
Merchandise inventory, January 1 $1,430,000
Current assets 3,603,600
Total assets (operating) 5,720,000
Cost of goods sold (FIFO) 2,230,800
Merchandise inventory, December 31 (LIFO) 1,544,400
Merchandise inventory, December 31 (FIFO) 1,887,600
Current liabilities 1,144,000
Net sales 3,832,400
Operating expenses 915,200
1. Compute the current ratio, inventory turnover ratio, and rate of return on operating assets assuming the company continues using FIFO.
2. Repeat part (a) assuming the company adjusts its accounts to the LIFO inventory method.
Answer:
Cooper Company
1. FIFO:
Current ratio
= 3.15
Inventory turnover ratio
= 1.34
Rate of return on operating assets
= 12%
2. LIFO:
Current ratio
= 2.85
Inventory turnover ratio
= 1.73
Rate of return on operating assets
= 12.8%
Explanation:
a) Data and Calculations:
Merchandise inventory, January 1 $1,430,000
Current assets 3,603,600
Total assets (operating) 5,720,000
Cost of goods sold (FIFO) 2,230,800
Merchandise inventory, December 31 (LIFO) 1,544,400
Merchandise inventory, December 31 (FIFO) 1,887,600
Current liabilities 1,144,000
Net sales 3,832,400
Operating expenses 915,200
FIFO
Merchandise inventory, December 31 (FIFO) $1,887,600
Cost of goods sold (FIFO) 2,230,800
Goods available for sale $4,118,400
Merchandise inventory, January 1 1,430,000
Purchases $2,688,400
LIFO:
Goods available for sale $4,118,400
Merchandise inventory, December 31 (LIFO) 1,544,400
Cost of goods sold (LIFO) $2,574,000
Income Statements FIFO LIFO
Net sales $3,832,400 $3,832,400
Cost of goods sold (FIFO) 2,230,800 2,574,000
Gross profit $1,601,600 $1,258,400
Operating expenses 915,200 915,200
Net income $686,400 $343,200
Merchandise inventory, December 31 (LIFO) 1,544,400
Merchandise inventory, December 31 (FIFO) 1,887,600
Difference between FIFO and LIFO = 343,200
FIFO Difference LIFO
Current assets 3,603,600 343,200 3,260,400
Total assets (operating) 5,720,000 343,200 5,376,800
Cost of goods sold (FIFO) 2,230,800 2,574,000
Merchandise inventory, January 1 1,430,000 1,430,000
Merchandise inventory, December 31 1,887,600 1,544,400
Current liabilities 1,144,000 1,144,000
Average inventory 1,658,800 1,487,200
FIFO:
Current ratio = current assets/current liabilities
= $3,603,600/$1,144,000 = 3.15
Inventory turnover ratio = Cost of goods sold/Average Inventory
= $2,230,800/$1,658,800
= 1.34
Rate of return on operating assets = Net income/Total assets * 100
= $686,400/$5,720,000 * 100
= 12%
LIFO:
Current ratio = $3,260,400/$1,144,000
= 2.85
Inventory turnover ratio = $2,574,000/$1,487,200
= 1.73
Rate of return on operating assets = $686,400/$5,376,800 * 100
= 12.8%
Joel is the sole shareholder of Manatee Corporation, a C corporation. Because Manatee’s sales have increased significantly over the last several years, Joel has determined that the corporation needs a new distribution warehouse. Joel has asked your advice as to whether (1) Manatee should purchase the warehouse or (2) he should purchase the warehouse and lease it to Manatee. What relevant tax issues will you discuss with Joel?
Answer:
If Joel purchases the warehouse, he can rent it to the corporation and charge the highest possible rent within reasonable terms. Joel can avoid double taxation and the corporation will be able to deduct rent expense.
Joel is also able to deduct depreciation expenses, real estate taxes, and other costs from his passive income.
As an individual, Joel is taxed differently for capital gains in case he sells the warehouse, and that rate is generally lower than corporate tax rates.
Twix Dots Skor
Net income $4,200 $106,000 $76,800
Depreciation expense 31,600 8,400 25,600
Accounts receivable increase (decrease) 42,200 21,000 (4,200 )
Inventory increase (decrease) (21,200 ) (10,600 ) 10,600
Accounts payable increase (decrease) 25,400 (23,400 ) 14,800
Accrued liabilities increase (decrease) (46,600 ) 12,800 (8,400 )
Required:
For each separate company, compute cash flows from operations using the indirect method. (Amounts to be deducted should be indicated by a minus sign.)
Answer:
Twix, Dots, and Skor
Twix Dots Skor
Net income $4,200 $106,000 $76,800
Depreciation expense 31,600 8,400 25,600
Accounts receivable increase (decrease) 42,200 21,000 (4,200 )
Inventory increase (decrease) (21,200 ) (10,600 ) 10,600
Accounts payable increase (decrease) 25,400 (23,400 ) 14,800
Accrued liabilities increase (decrease) (46,600 ) 12,800 (8,400 )
Cash flows from operations ($6,400) $93,400 $102,400
Explanation:
a) Data and Calculations:
Twix Dots Skor
Net income $4,200 $106,000 $76,800
Depreciation expense 31,600 8,400 25,600
Accounts receivable increase (decrease) 42,200 21,000 (4,200 )
Inventory increase (decrease) (21,200 ) (10,600 ) 10,600
Accounts payable increase (decrease) 25,400 (23,400 ) 14,800
Accrued liabilities increase (decrease) (46,600 ) 12,800 (8,400 )
b) Depreciation is added back to the net income. Increases in current assets are cash outflows, reducing cash flows, while decreases are cash inflows, increasing cash flows. On the other hand, increases in current liabilities are cash inflows, increasing cash flows, while decreases are cash outflows, reducing cash flows.
A firm with unlimited funds must evaluate five projects. Projects 1 and 2 are independent and Projects 3, 4, and 5 are mutually exclusive. The projects are listed with their returns. A ranking of the projects on the basis of their returns from the best to the worst according to their acceptability to the firm would be ________.
Answer:
4, 1, 2,
Explanation:
Here are the projects and their returns
Project Return (%)
1 14
2 12
3 10
4 15
5 12
the firm should choose the project with the highest returns
Projects are mutually exclusive if the projects cannot occur at the same time. If one project is chosen, the others cannot be chosen.
Project 3,4,5 are mutually exclusive. If one of the projects are chosen, other projects cannot be chosen.
Project 4 has the highest return, so it would be chosen first.
the next project with the next highest return is project 1 and then project 2
Hardaway Fixtures' balance sheet at December 31, 2020, included the following:
Shares issued and outstanding:
Common stock, $1 par $1,080,000
Nonconvertible preferred stock, $50 par 25,000
On July 21, 2021, Hardaway issued a 25% stock dividend on its common stock. On December 12, it paid $75,000 cash dividends on the preferred stock. Net income for the year ended December 31, 2021, was $4,800,000.
Required:
Compute Hardaway's earnings per share for the year ended December 31, 2021.
Answer:
$3.50
Explanation:
Earnings for EPS = $4,800,000 - $75,000
Earnings for EPS = $4,725,000
Weighted Average Outstanding share:
Date Number of shares Weight Weighted Average
01-01-2021 Opening 1,080,000 12/12 1,080,000
21-07-2021 Stock Dividend 270,000 12/12 270,000
(1,080,000*25%)
Total 1,350,000
Earnings per share = Earnings for EPS/Weighted Average Outstanding share
Earnings per share = $4,725,000/1,350,000
Earnings per share = $3.50
Chahana acquired and placed in service $1,185,000 of equipment on August 1, 2019 for use in her sole proprietorship. The equipment is 5-year recovery property. No other acquisitions are made during the year. Chahana elects to expense the maximum amount under Sec. 179, and bonus depreciation is not applied. Chahana's total deductions for 2019 (including Sec. 179 and depreciation) are:___________.
A) $1,020,000.
B) $237,000.
C) $1.185,000.
D) $1,053,000
Answer:
D) $1,053,000
Explanation:
Calculation to determine what Chahana's total deductions for 2019 (including Sec. 179 and depreciation) are
Sec 179 immediate expensing $1,020,000
MACRS depreciation:
Add Basis for depreciation $33,000
[($1,185,000 - $1,020,000 Sec. 179) × .20]
Total depreciation $1,053,000
($1,020,000+$33,000)
Therefore Chahana's total deductions for 2019 (including Sec. 179 and depreciation) are:$1,053,000
You need to earn 6% annul real rate of return and, in addition, you need to keep up with the annual inflation rate. Exactly 4 years ago, the expected inflation rate was 2% per year. At that time, you decided to invest in a 7-year annuity with $20,000 deposited at the end of each year. Now, right after you made the 4th deposit, the expected annual inflation rate for the next 3 years is 3% per year. To keep your investment goal of 6% real annual return and keeping up with the new inflation rate, how much more each year for the last 3 years you will need to deposit in addition to the $20,000 per year to reach that goal?
Answer:
"4,000" is the appropriate option.
Explanation:
Given:
Real interest rate,
= 6%
Inflation rate,
= 2%
Annual deposit,
= $20,000
Now,
The nominal interest rate will be:
= [tex]Real \ interest \ rate+Inflation \ rate[/tex]
= [tex]6+2[/tex]
= [tex]8[/tex] (%)
As per the annual deposit, I was making,
= [tex]20000\times 0.6[/tex]
= [tex]1200 \ every \ year[/tex]
Inflation rate rise 3% i.e.,
= [tex]2+3[/tex]
= [tex]5[/tex] (%)
Just to earn 1200, I have to:
= [tex]\frac{1200}{0.05}[/tex]
= [tex]24,000[/tex]
Thus the above is the appropriate answer.
International Management Position (Scenario)
Global Choppers Inc. is an MNE based in Vancouver that manufactures high-quality motorcycles for sale around the world. The majority of design work is done at the Vancouver headquarters, but manufacturing and assembly are performed in company facilities located in Romania. In order to maintain control over manufacturing quality, Global Choppers sends representatives from the company headquarters to manage the Romanian facility for one year rotations. Conrad O'Neil has been selected to run the foreign facility for the upcoming year. The human resources department of Global Choppers will be preparing him for his foreign assignment through a variety of training methods.
Conrad's training for his assignment in Romania would most likely include ________.
Answer: area studies
Explanation:
Based on the information given in the question, Conrad's training for his assignment in Romania would most likely include the area studies.
Area studies simply refers to the study of the political or the geographical area
of a particular region and this consist of the history, language, geography and the general culture of the place.
Since Conrad O'Neil has been selected to run the foreign facility for the upcoming year, he needs to be trained on the area studies of the place.
In the Month of March, Chester received orders of 195 units at a price of $15.00 for their product Creak, and in April receives an order for 49 units of their product Creak at $15.00. Chester uses the accrual method of accounting and offers 30 day credit terms. Chester delivers 0 units in March, 195 units in April and 49 units in May. They received payment for 195 units in April, and payment for 49 units in May. How much revenue is recognized on the March income statement from this order
Answer:
Chester
The revenue that is recognized on the March income statement from this order is:
= $0.
Explanation:
a) Data and Calculations:
Selling price of Creak = $15 per unit
March April May Total
Orders received 195 49 244
Orders delivered 0 195 49 244
Sales revenue $0 $2,925 $735 $3,660
Cash receipt $2,925 $735 $3,660
Revenue recognized $0 $2,925 $735 $3,660
b) Revenue is to be recognized when performance obligations have been fulfilled according to the new Revenue standard IFRS 15 or GAAP ASC 606, as may be applicable.
Crane Co. leased equipment to Union Co. on July 1, 2021, and properly recorded the sales-type lease at $144000, the present value of the lease payments discounted at 8%. The first of eight annual lease payments of $21500 due at the beginning of each year of the lease term was received and recorded on July 3, 2021. Crane had purchased the equipment for $113000. What amount of interest revenue from the lease should Crane report in its 2021 income statement
Answer:
$4,900
Explanation:
Calculation to determine What amount of interest revenue from the lease should Crane report in its 2021 income statement
Interest revenue=8%/2*($144000 - $21500)
interest revenue=4%*$122,500
interest revenue = $4,900.
Therefore the amount of interest revenue from the lease should Crane report in its 2021 income statement is $4,900
Why do you think it is important to consider both salary and benefits when applying for a job?
How micro and macro economics are interdependent to each other?
Jessie purchased land as an investment on January 12, 2015 for $80,000. On January 31, 2020, Jessie sold the land for $33,000 cash. In addition, the purchaser assumed the mortgage of $70,000 on the land. What is the amount of the realized gain or loss on the sale
Answer:
$23,000 gain
Explanation:
In the given scenario the initial cost of purchase of the land by Jessie was $80,000
She finally sold the land for $33,000 cash and the purchaser also assumed a mortgage of $70,000.
That is a total sale price of 33,000 + 70,000 = $103,000
The gain on this transaction will be 103,000 - 80,000 = $23,000
Since part of the payment is in mortgage the gain is a long term capital gain for Jessie
On January 1, 2021, Ellison Company granted Sam Wine, an employee, an option to buy 1,000 shares of Ellison Co. stock for $30 per share, the option exercisable for 5 years from date of grant. Using a fair value option pricing model, total compensation expense is determined to be $6,000. Wine exercised his option on October 1, 2021 and sold his 1,000 shares on December 1, 2021. Quoted market prices of Ellison Co. stock in 2021 were:
July 1 $30 per share
October 1 $36 per share
December 1 $40 per share
The service period is for three years beginning January 1, 2021. As a result of the option granted to Wine, using the fair value method, Ellison should recognize compensation expense for 2021 on its books in the amount of:________
a. $6,000 21
b. $2,000
c. $1,500
d. $0
Answer:
b. $2,000
Explanation:
Using a fair value option pricing model, total compensation expense is determined to be $6,000.
The service period is for three years beginning January 1, 2021.
So, Ellison should recognize compensation expense for 2021 on its books in the amount of:
= $6,000 / 3 years
= $2,000.
As a result of the option granted to Wine, using the fair value method, Ellison should recognize $2,000 as compensation expense.
Looking forward to next year, if Digby’s current cash amount is $17,478 (000) and cash flows from operations next period are unchanged from this period and Digby takes ONLY the following actions relating to cash flows from investing and financing activities:
Issues $2,000 (000) of long-term debt
Pays $4,000 (000) in dividends
Retires $10,000 (000) in debt
Which of the following activities will expose Digby to the most risk of needing an emergency loan?
a. Purchases assets at a cost of $25,000 (000)
b. Sells $10,000 (000) of their long-term assets
c. Liquidates the entire inventory
d. Pays a $5.00 per share dividend
Answer:
d
Explanation:
Purchases assets at a cost of $15,000 (000)
Repurchases $10,000 (000) of stock
Issues 100 (000) shares of common stock
Sells $7,000 (000) of long-term assets
Every good speaker adapts to the audience. When adapting presentations for intercultural audiences, most people understand that they must make the basic language adaptations; however, more fundamental sensitivity is sometimes needed in relation to organization, speaking conventions, values, and nonverbal communication. When addressing cross-cultural audiences:__________.
a. use first names
b. anticipate differing expectations
c. deliver your main point first
What should you do when adjusting multimedia slides to intercultural audiences?
a. Progress through your slides rapidly.
b. Use a little more text than usual in your slides.
c. Put very little information in your slides.
Answer: 1. anticipate differing expectations
2. Use a little more text than usual in your slides.
Explanation:
1. Based on the fact that the presentation is for intercultural audiences, it is important for the speaker to anticipate differing expectations. The audience have different values, languages etc and their opinions and expectations may be quite different.
2. During the adjustment of multimedia slides to intercultural audiences, it's important to use a little more text than usual in your slides. This is vital so that the audience can comprehend the message that's being passed across. Progressing through the slides rapidly isn't ideal and there should be detailed information in the slides.
Bryant Company has a factory machine with a book value of $93,700 and a remaining useful life of 7 years. It can be sold for $34,700. A new machine is available at a cost of $378,500. This machine will have a 7-year useful life with no salvage value. The new machine will lower annual variable manufacturing costs from $605,900 to $457,900. Prepare an analysis showing whether the old machine should be retained or replaced
Answer:
Retain Replace Net income
Increase/Decrease
Variable manufacturing costs 4241300 3205300 1036000
New machine cost 0 378500 -378500
Sell old machine 0 -34700 34700
Total 4241300 3549100 692,200
Conclusion: The old factory machine should be replaced as its net income is lesser
Workings
Variable manufacturing costs
a. Retain Equipment = 605900*7 = 4241300
b. Replace Equipment =457900*7 = 3205300
Your friend Harold is trying to decide whether to buy or lease his next vehicle. He has gathered information about each option but is not sure how to compare the alternatives. Purchasing a new vehicle will cost $28,500, and Harold expects to spend about $700 per year in maintenance costs. He would keep the vehicle for five years and estimates that the salvage value will be $11,300. Alternatively, Harold could lease the same vehicle for five years at a cost of $3,705 per year, including maintenance. Assume a discount rate of 10 percent.
Requirement:
1. Calculate the net present value of Harold’s options. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Negative amounts should be indicated by a minus sign. Round your final answers to 2 decimal places.
2. Advise Harold about which option he should choose.
Lease Option
Purchase Option
Answer:
$-24,137.14
$-14,044.86
He should choose the lease option
Explanation:
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
Purchase option
Cash flow in year 0 = $-28,500
Cash flow in year 1 - 4 = -700
Cash flow in year 2 = 11,300 - 700 = 10,600
I = 10%
NPV= -24,137.14
Lease option
Cash flow in year 1 - 5 = 3705
I = 10%
NPV= -14,044.86
the lease option is less expensive and should be chosen
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Many employees of a local restaurant suddenly quit and seek other opportunities. What is the most likely explanation for the large number of employees quitting?
A. a developing price war
B. a protest action by the union
C. decrease in positive incentives to work
D. decrease of negative incentives to being unemployed
Answer:
A. a developing price war
Robert is the sole shareholder and CEO of ABC, Inc., an S corporation that is a qualified trade or business. During the current year, ABC has net income of $287,000 after deducting Robert's $86,100 salary. In addition to his compensation, ABC pays Robert dividends of $200,900.
a. What is Robert's qualified business income?
b. Would your answer to part (a) change if you determined that reasonable compensation for someone with Robert's experience and responsibilities is $181,050?
Answer:
A. $287,000
B. $192,050
Explanation:
a. Based on the information givenwe were told that company ABC had net income of the amount of $287,000 after deducting Robert's salary of the amount of $86,100 which therefore means that ROBERT'S QUALIFIED BUSINESS INCOME will be the amount of $287,000.
b. Calculation to determine whether your answer to part (a) would change if you determined that reasonable compensation for someone with Robert's experience and responsibilities is $181,050
Based on the information given the amount of $192,050 will be the additional amount of salary that can be deducted which is Calculated as:
=[$287,000 - ($181,050-$86,100)]
=$287,000-$94,950
=$192,050
Analysis of Transactions Charles Chadwick opened a business called Charlie's Detective Service in January 20--. Set up T accounts for the following accounts: Cash; Accounts Receivable; Office Supplies; Computer Equipment; Office Furniture; Accounts Payable; Charles Chadwick, Capital; Charles Chadwick, Drawing; Professional Fees; Rent Expense; and Utilities Expense. The following transactions occurred during the first month of business. Record these transactions in T accounts. After all transactions are recorded, foot and balance the accounts if necessary. (a) Invested cash in the business, $30,369. (b) Bought office supplies for cash, $379. (c) Bought office furniture for cash, $5,320. (d) Purchased computer and printer on account, $8,118. (e) Received cash from clients for services, $2,850. (f) Paid cash on account for computer and printer purchased in transaction (d), $3,615. (g) Earned professional fees on account during the month, $9,322. (h) Paid cash for office rent for January, $1,303. (i) Paid utility bills for the month, $889. (j) Received cash from clients billed in transaction (g), $6,442. (k) Withdrew cash for personal use, $2,823.
Answer:
Charlie's Detective Service
T-accounts:
Cash
Account Titles Debit Credit
Charles Chadwick, Capital $30,369
Office supplies $379
Office furniture 5,320
Professional Fees 2,850
Accounts Payable 3,615
Rent Expense 1,303
Utilities Expense 889
Accounts Receivable 6,442
Charles Chadwick, Drawing 2,823
Balance $25,332
Totals $39,661 $39,661
Accounts Receivable
Account Titles Debit Credit
Professional Fees $9,322
Cash $6,442
Balance $2,880
Office Supplies
Account Titles Debit Credit
Cash $379
Computer Equipment
Account Titles Debit Credit
Accounts Payable $8,118
Office Furniture
Account Titles Debit Credit
Cash $5,320
Accounts Payable
Account Titles Debit Credit
Computer and printer $8,118
Cash $3,615
Balance $4,503
Charles Chadwick, Capital
Account Titles Debit Credit
Cash $30,369
Charles Chadwick, Drawing
Account Titles Debit Credit
Cash $2,823
Professional Fees
Account Titles Debit Credit
Cash $2,850
Accounts Receivable 9,322
Balance $12,172
Rent Expense
Account Titles Debit Credit
Cash $1,303
Utilities Expense
Account Titles Debit Credit
Cash $889
Explanation:
a) Data and Analysis:
(a) Cash $30,369 Charles Chadwick, Capital $30,369
(b) Office supplies $379 Cash $379
(c) Office furniture $5,320 Cash $5,320
(d) Computer and printer $8,118 Accounts Payable $8,118
(e) Cash $2,850 Professional Fees $2,850
(f) Accounts Payable $3,615 Cash $3,615
(g) Accounts Receivable $9,322 Professional Fees $9,322
(h) Rent Expense $1,303 Cash $1,303
(i) Utilities Expense $889 Cash $889
(j) Cash $6,442 Accounts Receivable $6,442
(k) Charles Chadwick, Drawing $2,823 Cash $2,823
At 60,000 machine hours, Boris Company static budget for variable overhead costs is $180,000. At 60,000 machine hours, the company's static budget for fixed overhead costs is $300,000. Machine hours are the cost driver of all overhead costs. The static budget is based on 60,000 machine hours. At 60,000 machine hours, the company produces 40,000 units. The following data is available:
Actual units produced and sold 42,000
Actual machine hours 64,000
Actual variable overhead costs $185,600
Actual fixed overhead costs $302,400
What is the fixed overhead spending variance?
A) $2,400 Favorable
B) $2,400 Unfavorable
C) $1,000 Unfavorable
D) $1,000 Favorable
Answer:
$2,400 unfavorable
Explanation:
The computation of the fixed overhead spending variance is shown below;
We know that
fixed overhead spending variance = actual fixed overhead - budgeted fixed overhead
= $302,400 - $300,000
= $2,400 unfavorable
As actual fixed overhead is more than the standard fixed overhead so it should be unfavorable else it is favorable
Your child is planning attend summer camp for 3 months, starting 12 months from now. The cost for camp is $2,676 per month, each month, for the 3 months she will attend. If your investments earn 2.3% APR (compounded monthly), how much must you invest each month, starting next month, for 3 months such that your investment will grow to just cover the cost of the camp
Answer:
Monthly deposit= $2,625.16
Explanation:
Giving the following information:
Total cost= 2,676*3= $8,028
Monthly interest rate0 0.023/12= 0.00192
First, we need to calculate the nominal value required at the end of the third month:
PV= FV / (1 + i)^n
FV= 8,028
i= 0.00192
n= 9 months
PV= 8,028 / (1.00192^9)
PV= $7,890.6
Now, the monthly investment to reach $7,890.6:
FV= {A*[(1+i)^n-1]}/i
A= monthly deposit
Isolating A:
A= (FV*i)/{[(1+i)^n]-1}
A= (7,890.6*0.00192) / [(1.00192^3) - 1]
A= $2,625.16
Prepare a Pareto chart of the possible causes for a student to fail a final examination in a university course.
Vehicles are identified by RFID tags in order to collect bridge tolls. The project manager is considering two different technologies for RFID readers. By sampling two different options, the following data are collected about the accuracy of the readers:
Option 1: 99, 98, 99, 94, 92, 99, 98, 99, 94, 90 Option 2: 98, 97, 97, 97, 98, 98, 97, 97, 98
Calculate the mean, mode, and standard deviation of the two options.
Answer:
Option 1
[tex]\bar x_1 = 96.2[/tex]
[tex]Mode = 99[/tex]
[tex]\sigma_1 = 3.22[/tex]
Option 2
[tex]\bar x_2 = 97.4[/tex]
[tex]Mode = 97[/tex]
[tex]\sigma_2 = 0.499[/tex]
Explanation:
Given
[tex]Option\ 1: 99, 98, 99, 94, 92, 99, 98, 99, 94, 90[/tex]
[tex]Option\ 2: 98, 97, 97, 97, 98, 98, 97, 97, 98[/tex]
Required
The mean, mode and standard deviation of both options
Option 1
Calculate mean
[tex]\bar x = \frac{\sum x}{n}[/tex]
[tex]\bar x_1 = \frac{99+ 98+ 99+ 94+ 92+ 99+ 98+ 99+ 94+ 90}{10}[/tex]
[tex]\bar x_1 = \frac{962}{10}[/tex]
[tex]\bar x_1 = 96.2[/tex]
Calculate mode
[tex]Mode = 99[/tex]
Because it has a frequency of 4 (more than other element of the dataset)
Calculate standard deviation
[tex]\sigma = \sqrt{\frac{\sum(x - \bar x)^2}{n}}[/tex]
[tex]\sigma_1 = \sqrt{\frac{(99-96.2)^2 +.............+(90-96.2)^2}{10}}[/tex]
[tex]\sigma_1 = \sqrt{\frac{103.6}{10}}[/tex]
[tex]\sigma_1 = \sqrt{10.36}[/tex]
[tex]\sigma_1 = 3.22[/tex]
Option 2
Calculate mean
[tex]\bar x = \frac{\sum x}{n}[/tex]
[tex]\bar x_2 = \frac{98+ 97+ 97+ 97+ 98+ 98+ 97+ 97+ 98}{9}[/tex]
[tex]\bar x_2 = \frac{877}{9}[/tex]
[tex]\bar x_2 = 97.4[/tex]
Calculate mode
[tex]Mode = 97[/tex]
Because it has a frequency of 5 (more than other element of the dataset)
Calculate standard deviation
[tex]\sigma_2 = \sqrt{\frac{(98-97.4)^2+..............+ (98-97.4)^2}{9}}[/tex]
[tex]\sigma_2 = \sqrt{\frac{2.24}{9}}[/tex]
[tex]\sigma_2 = \sqrt{0.2489}[/tex]
[tex]\sigma_2 = 0.499[/tex]
The following information should be used to according to the provisions of GAAP (Statement of Cash Flows) and using the following data. Net income $50,000 Provision for bad debts $2,000 Decrease in inventory $1,000 Decrease in accounts payable $2,000 Purchase of new equipment $35,000 Sale of equipment for $10,000 loss $20,000 Depreciation expense $6,000 Repurchase of common stock $13,000 Payment of dividend $4,000 Interest payment $3,000 What is net cash flow from operations
Answer:
Explanation:
The net cash flow from operations, according to the provisions of GAAP on Statement of Cash Flows, is $77,000.
What is the net cash flow from operations?The net cash flow from operations shows the ability of a firm to generate cash from its core business activities.
The net cash flow from operations is computed as the net income from the income statement and adjustments to modify net income from an accrual accounting basis to a cash accounting basis.
Data and Calculations:Net income $50,000
Non-Cash Expenses:
Loss from sale of equipment $20,000
Provision for bad debts $2,000
Depreciation expense $6,000
Changes in working capital:
Decrease in inventory $1,000
Decrease in accounts payable ($2,000)
Cash from operations $77,000
Thus, the net cash flow from operations, according to the provisions of GAAP on Statement of Cash Flows, is $77,000.
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Gallatin County Motors Inc. assembles and sells snowmobile engines. The company began operations on July 1 and operated at 100% of capacity during the first month. The following data summarize the results for July: 1 Sales (38,000 units) $9,500,000.00 2 Production costs (44,000 units): 3 Direct materials $4,400,000.00 4 Direct labor 1,760,000.00 5 Variable factory overhead 1,100,000.00 6 Fixed factory overhead 660,000.00 7,920,000.00 7 Selling and administrative expenses: 8 Variable selling and administrative expenses $1,170,000.00 9 Fixed selling and administrative expenses 200,000.00 1,370,000.00 Required: a. Prepare an income statement according to the absorption costing concept\.\* b. Prepare an income statement according to the variable costing concept\.\* c. What is the reason for the difference in the amount of Operating income reported in (a) and (b)
Answer:
a.
income statement according to the absorption costing concept.
Sales $9,500,000.00
Less Cost of Sales ($6,840,000.00)
Gross Profit $2,660,000.00
Less Expenses
Variable selling and administrative expenses ($1,170,000.00)
Fixed selling and administrative expenses ($200,000.00)
Net Income $1,290,000.00
b.
income statement according to the variable costing concept
Sales $9,500,000.00
Less Cost of Sales ($6,270,000.00)
Contribution $3,230,000.00
Less Expenses
Fixed factory overhead ($660,000.00)
Variable selling and administrative expenses ($1,170,000.00)
Fixed selling and administrative expenses ($200,000.00)
Net Income $1,200,000.00
c.
The difference is due to fixed cost included in closing inventory under the absorption costing concept.
Explanation:
Production Cost - Absorption Costing
Direct materials $4,400,000.00
Direct labor $1,760,000.00
Variable factory overhead $1,100,000.00
Fixed factory overhead $660,000.00
Total $7,920,000.00
therefore,
Cost of Sales = 38,000 units/ 44,000 units x $7,920,000.00
= $6,840,000
Production Cost - Variable Costing
Direct materials $4,400,000.00
Direct labor $1,760,000.00
Variable factory overhead $1,100,000.00
Total $7,260,000.00
therefore,
Cost of Sales = 38,000 units/ 44,000 units x $7,260,000.00
= $6,270,000
a. Income Statement according to Absorption Costing Concept:
Sales: $9,500,000.00
Cost of Goods Sold:
Direct Materials: $4,400,000.00
Direct Labor: $1,760,000.00
Variable Factory Overhead: $1,100,000.00
Fixed Factory Overhead: $660,000.00
Total Manufacturing Costs: $7,920,000.00
Gross Profit: $1,580,000.00
Selling and Administrative Expenses:
Variable Selling and Administrative Expenses: $1,170,000.00
Fixed Selling and Administrative Expenses: $200,000.00
Total Selling and Administrative Expenses: $1,370,000.00
Operating Income: $210,000.00
b. Income Statement according to Variable Costing Concept:
Sales: $9,500,000.00
Variable Costs:
Direct Materials: $4,400,000.00
Direct Labor: $1,760,000.00
Variable Factory Overhead: $1,100,000.00
Variable Selling and Administrative Expenses: $1,170,000.00
Total Variable Costs: $8,430,000.00
Contribution Margin: $1,070,000.00
Fixed Costs:
Fixed Factory Overhead: $660,000.00
Fixed Selling and Administrative Expenses: $200,000.00
Total Fixed Costs: $860,000.00
Operating Income: $210,000.00
In absorption costing, fixed manufacturing overhead is treated as a product cost and is included in the cost of goods sold. This means that a portion of fixed overhead is allocated to each unit produced, resulting in higher inventory values and a higher cost of goods sold.
In variable costing, fixed manufacturing overhead is treated as a period cost and is not included in the cost of goods sold. It is instead expensed in the period incurred. This means that fixed overhead is only expensed when it is incurred and is not allocated to units in inventory.
Since the number of units produced (44,000 units) exceeded the number of units sold (38,000 units), the fixed overhead allocated to the 6,000 unsold units under absorption costing contributes to the difference in reported operating income between the two methods. In this case, the absorption costing method reports higher operating income due to the allocation of fixed overhead to units in inventory.
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Compute the payback period for each of these two separate investments: A new operating system for an existing machine is expected to cost $280,000 and have a useful life of five years. The system yields an incremental after-tax income of $80,769 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $11,000. A machine costs $200,000, has a $15,000 salvage value, is expected to last seven years, and will generate an after-tax income of $44,000 per year after straight-line depreciation.
Answer and Explanation:
The computation of the payback period for each investment is shown below;
For Option 1
= Initial Investment ÷ Annual Cash Flow
= $280,000 ÷ $134,569
= 2.081 Year
Here Annual cash inflow is
= Net income + Depreciation
= $80,769 + (($280,000 - $11,000) ÷ 5)
= $134,569
For Option-2
= Initial Investment ÷ Annual Cash Flow
= $200,000 ÷ $70,429
= 2.84 Year
Here Annual cash inflow is
= Net income + Depreciation
= $44,000 + (($200,000 - $15,000) ÷ 7)
= $70,429
Lando Calrissian just won the lottery and is trying to decide between the options of receiving the annual cash flow payment option of $330,000 per year for 25 years beginning today, or receiving one lump-sum amount today. Lando can earn 4% investing this money. At what lump-sum payment amount would he be indifferent between the two alternatives
Answer:
the lump-sum payment amount would he be indifferent between the two alternatives is $5,361,497.79
Explanation:
The computation of the lump-sum payment amount would be shown below:
= Annual cash flow per year × present value of annuity due factor at 4% for 25 years
= $330,000 × 16.246963
= $5,361,497.79
Refer the present value of annuity due factor table for the same
hence, the lump-sum payment amount would he be indifferent between the two alternatives is $5,361,497.79
Lily Company expects the following total sales: Month Sales March $30,000 April $20,000 May $30,000 June $25,000 The company expects 60% of its sales to be credit sales and 40% for cash. Credit sales are collected as follows: 30% in the month of sale, 70% in the month following the sale. The budgeted accounts receivable balance on May 31 is: A. $12,240 B. $12,600 C. $20,400 D. $21,000
Answer:
B. $12,600
Explanation:
"The company expects 60% of its sales to be credit sales and 40% for cash"
Credit sale for May = $30,000 * 60%
Credit sale for May = $18,000
"70% of the credit sale is collected in following month of sale"
Accounts receivables on 31 May = 70% of credit sale for May
Accounts receivables on 31 May = 70% * $18,000
Accounts receivables on 31 May = $12,600