Answer:
Journal Entries:
a)
General Journal
Description Debit Credit
Direct labor:
Job 100 $1,640
Job 101 1,360
Job 104 2,490
Job 108 2,870
Job 111 1,750
Job 115 1,150
Job 117 7,780
Factory overhead:
Indirect labor 8,740
Factory labor costs $27,780
To record the labor costs to jobs and indirect labor
Explanation:
Factory labor costs consist of direct labor costs which are attributed to the specific jobs and the indirect labor costs which cannot be traced to any particular job. These are treated as factory overhead costs.
The journal entries recording the labor costs for each job, debit the indicated job title while crediting the factory labor costs.
Chou Co. has a net income of $47,000, assets at the beginning of the year are $254,000 and assets at the end of the year are $304,000. Compute its return on assets.
Answer:
Return on assets=28.54%
Explanation:
Return on asset is the average rate of return generated by the asset investment of a business. It is the net income earned as a proportion of the average investment.
Return on assets = net income / Average assets× 100
Average asset value = (opening balance + closing balance of assets)/2
=( 254,000 + 304,000)/2= 164700
Return on assets = 47,000/164,700 × 100 =28.54%
Return on assets=28.54%
Suppose that Spain and Germany both produce rye and olives. Spain's opportunity cost of producing a crate of olives is 5 bushels of rye while Germany's opportunity cost of producing a crate of olives is 10 bushels of rye.By comparing the opportunity cost of producing olives in the two countries, you can tell that_______has a comparative advantage in the production of olives and_______has a comparative advantage in the production of rye. Suppose that Spain and Germany consider trading olives and rye with each other. Spain can gain from specialization and trade as long as it receives more than______of rye for each crate of olives it exports to Germany. Similarly, Germany can gain from trade as long as it receives more than_______of olives for each bushel of rye it exports to Spain. Which of the following prices of trade (that is, price of olives in terms of rye) would allow both Germany and Spain to gain from trade? a. 9 bushels of rye per crate of olives.b. 15 bushels of rye per crate of olives.c. 8 bushels of rye per crate of olives.d. 3 bushels of rye per crate of olives.
Answer:
1. By comparing the opportunity cost of producing olives in the two countries, you can tell that Spain has a comparative advantage in the production of olives and Germany has a comparative advantage in the production of rye.
Germany is able to produce more Rye if it is not producing olives meaning that they are more efficient in this giving them the comparative Advantage.
Spain is able to produce 2x more Olives than Germany for the same amount of Rye so they are more efficient in this manner.
2. Spain can gain from specialization and trade as long as it receives more than 5 bushels of rye for each crate of olives it exports to Germany.
If Spain can get more bushels per Olives than it can produce on it's own then they will make a gain.
3. Similarly, Germany can gain from trade as long as it receives more than ⅒ or 0.1 crate of olives for each bushel of rye it exports to Spain.
Similarly if Germany can get more crates of Olives per Rye than it can produce then it makes a gain. For each Bushel of Rye, Germany can create 0.1 crate of olives. Should they get more than this 0.1 crate then they make a gain.
4. The amount of Rye being exchanged for Olives should be between 5 and 10 bushels.
a. 9 bushels of rye per crate of olives.
c. 8 bushels of rye per crate of olives
At both 8 and 9 bushels of Rye per Olive Crate Germany would be getting more Rye per crate of olive than they can produce on their own and similarly at both 8 and 9 bushes of Rye for olives, Spain would getting more bushels than they could have gotten if they gave up olives to produce Rye.
When the attitude of continuous improvement exists throughout an organization, every manager and employee is challenged to continuously experiment with new and improved business practices.
a. True
b. False
Answer:
Option A
True
Explanation:
The attitude of continuous improvement entails that the members of an organization strive to improve on themselves, operations, and processes within the organization. It usually entails learning from both mistakes and business practices of other companies to ensure that there is a constant improvement in the day to day activities of the business.
During the process of continuous improvement, every manager and employee is definitely expected to try out new policies, and practices to see how well they fit in and aid the company to achieve her overall business goals.
This is the only way a strong "continuous improvement " attitude can be maintained company-wide.
Hence, the answer is option A: True.
has 10 percent coupon bonds on the market with 19 years to maturity. The bonds make semiannual payments and currently sell for 107.8 percent of par. What is the current yield on the bonds?
Answer:
4.62%
Explanation:
we need to calculate the yield to maturity of the bond:
YTM = [coupon + (face value - market value)/n] / [(face value + market value)/2]
coupon = $50face value = $1,000market value = $1,078n = 38 semiannual paymentsYTM = [$50 + ($1,000 - $1,078)/38] / [($1,000 + $1,078)/2]
YTM = $47.95 / $1,039 = 4.615 ≈ 4.62%
Current trends indicate that, due to the emerging economies, the world is moving _____ an economic system that is more favorable for international business.
Answer: closer to
Explanation:
Emerging economies also referred to as developing countries or emerging markets are countries which are investing in more in their productive capacity ans are also gradually moving away from agriculture as it main occupation and there is increase in industrialization.
Due to emerging markets, the world is moving closer to an economic system that is more favorable for international business. There are more quality goods produced by nations and advancement in technology has also helped the economy.
Partners, LLC members and S Corporation shareholders are not taxed on the amount they withdraw from the entity in a nonliquidating distribution when they have sufficient basis (disregarding any other limitation).
a. True
b. False
Answer:
Partners: True
LLC: True
S Corporation: False
Explanation:
When dividends are withdrawn from a business tax is only due on a S Corporation because the tax paid for the profits of an organization is not by the stockholder withdrawing the dividends which is why when dividend is withdrawn the tax is to be paid.
When dividends are withdrawn in a partnership or and LLC then no tax is payable as tax is already paid on the profits made by the business that is why dividends are not taxable when withdrawn.
Real world question: There will be times where co-workers will be slack and not pull their weight on the team. How will you handle this if it presents in the future?
your coin collection 51 1952 silver dollars. If your grandparents purchased them for their face value when they were new, how much will your collection be worth when you retire in 2061, assuming they appreciation at annual rate of 4.2 percent
Answer:
FV= $4,520.14
Explanation:
Giving the following information:
Face value= $51
Number of years= 2061 - 1952= 109
Appreciation rate= 4.2%= 0.042
To calculate the future value of the coins, we need to use the following formula:
FV= PV*(1+i)^n
FV= 51*(1.042^109)
FV= $4,520.14
im Angel holds a $200,000 portfolio consisting of the following stocks: Stock Investment Beta A $50,000 0.95 B 50,000 0.8 C 50,000 1 D 50,000 1.2 Total $200,000 What is the portfolio's beta
Answer: 0.9875
Explanation:
Portfolio beta is the measure of the volatility of a portfolio or security when it is compared to the market.
From the question, we are informed that an investment of $200,000 was made for four stock types. This means each stock's investment was: ($200,000/4) = $50,000. Therefore a weightage of (100% ÷ 4) = 25% will be assigned to each.
The portfolio beta will now be:
= (25% × 0.95) + (25% × 0.8) + (25% × 1) + (25% × 1.2)
= (0.25 × 0.95) + (0.25 × 0.8) + (0.25 × 1) + (0.25 × 1.2)
= 0.2375 + 0.2 + 0.25 + 0.3
= 0.9875
The portfolio's beta is 0.9875
A stock is expected to maintain a constant dividend growth rate of 4.4 percent indefinitely. If the stock has a dividend yield of 5.7 percent, what is the required return on the stock
Answer: 10.1%
Explanation:
The required rate of return on a stock is the minimum return on a stock that an investor is going to accept for owning that particular stock, as compensation for the risk that is associated with the stock.
From the question, we are told that a stock is expected to maintain a constant dividend growth rate of 4.4 percent indefinitely and that the stock has a dividend yield of 5.7 percent. The required return on the stock will be the addition of the growth and. The dividend yield. This will be:
= 4.4% + 5.7%
= 10.1%
Which of the following is a disadvantage of using variable costing? Select one: A. Two sets of accounting records must be maintained. B. Inventory values tend to be overstated. C. CVP relationships are more difficult to determine than under absorption costing. D. Per-customer or per-product contribution margin is obscured.
Answer:
Two sets of accounting records must be maintained.
Explanation:
Variable costing is the costing in which only variable cost is considered i.e direct material cost, direct labor cost, variable manufacturing overhead cost therefore no fixed cost could be considered
Under this the disadvantage is that it recognized two accounting records sets which are to be maintained
Hence, the first option is correct
You notice that Coca-Cola has a stock price of $ 40.68 and EPS of $ 2.04. Its competitor PepsiCo has EPS of $ 3.43. But, Jones Soda, a small batch Seattle-based soda producer has a P/E ratio of 35.2. Based on this information, what is one estimate of the value of a share of PepsiCo stock? g
Answer:
Estimate Value of a share= $71.81
Explanation:
The value of a share can be determined using the price earning ratio model. According to this model, the price of a share is estimated as the EPS of the company multiplied by a representative P/E ratio.
Value of share = EPS × P/E
The appropriate P/E ratio would be that of a similar operator in the same industry, in this case , Jones Soda.
Hence the estimate value of share =2.04 × 35.2=71.81
Estimate Value of a share= $71.81
If the interest rate is 10%, what is the present value of a security that pays you $1,500 next year, $1,400 the year after, and $1,300 the year after that?
Answer:
The present value is $3,497.3
Explanation:
In order to calculate the present value of a security that pays you $1,500 next year, $1,400 the year after, and $1,300 the year after we would have to make the following calculation:
Present Value = payment next year x P/F(10%, 1) + payment the year after x P/F(10%, 2) + payment the year after that x P/F(10%, 3)
Present Value= $1,500 x 0.9091 + $1,400 x 0.8264 + $1,300 x 0.7513
Present Value = $1,363.65 + $1,156.96 + $976.69
Present Value = $3,497.3
The present value is $3,497.3
1 points eBookPrintReferencesItem 7Item 7 1 points Your grandparents would like to establish a trust fund that will pay you and your heirs $180,000 per year forever with the first payment one year from today. If the trust fund earns an annual return of 3.5 percent, how much must your grandparents deposit today
Answer:
$ 5,142,857.14
Explanation:
Calculation for how much must your grandparents deposit today
Using this formula
Amount that grandparents must deposit today = Regular amount / Rate of interest
Let plug in the formula Amount that grandparents must deposit today= 180,000 / 0.035
=$ 5,142,857.14
Therefore the Amount that grandparents must deposit today will be $5,142,857.14
Green Gusts is a two-year-old company that makes wind turbines. The business owner, Mike, is struggling to compete. Finding enough employees who know how to do the work has been difficult, and Mike believes that his labor costs are too high because he cannot afford to match the prices of his nearest competitors. To help with these problems, Mike hires a new HR manager, Jake. Jake recommends they start by bringing in an industrial engineer. How is this approach to job design most likely to help Green Gusts?
Answer:
c. by simplifying work and increasing output per worker
Explanation:
Since in the question, it is given that the labor cost rising and he is not capable to afford but at the same time he wants to remain in the competition due to which he hires a new HR manager, Jake.
So to overcome this problem the work should be simplified to each and every employee who is working there so that they get to know what actually they have to do that results increase in output per worker
Hence, the correct option is c.
Chad, a sole proprietor of a private boat charter business, purchased and placed into service ten boats for $260,000 each on May 1, Year 1. These were the only assets Chad placed into service in Year 1. Assume the boats have a 10 year MACRS recovery period. What is the maximum amount, if any, that Chad can deduct in Year 1 if he does not elect out of bonus depreciation
Answer:
The maximum amount that Chad can depreciate in yer 1 if he decides not to elect bonus depreciation is $26,000
Explanation:
MACRS 10 year depreciation rate of recovery half year convention:
Year Depreciation % Purchase cost Depreciation
1 10% $260,000 $26,000
2 18% $260,000 $46,800
3 14.40% $260,000 $37,440
4 11.52% $260,000 $29,952
5 9.22% $260,000 $23,972
6 7.37% $260,000 $19,162
7 6.55% $260,000 $17,030
8 6.55% $260,000 $17,030
9 6.56% $260,000 $17,056
10 6.55% $260,000 $17,030
11 3.28% $260,000 $8,528
Autoliv in Ogden, Utah creates airbags. The deployment time of an airbag should be between 21 and 27 milliseconds and their current average is 22 milliseconds with a standard deviation of 0.25 milliseconds. Determine the process capability index if they were to center the mean.
Answer:
4
Explanation:
The calculation of the process capability index is given below
Data provided in the question according to the question is as follows
USL = 27
LSL = 21
Now we take the average
X = (21 +27) ÷ 2
= 24
The standard deviation is 0.25
= min(USL - mean ÷ 3 × standard deviation , mean - LSL ÷ 3 × standard deviation)
After solving this the process capability index is 4
You are the manager of two employees who have repeatedly displayed hostility toward a new employee. You decide to confront these individuals personally. "What can you do to make the conversation effective"? C
Answer: a. Gather all the information
d. Be patient with the reaction
Explanation:
It is very important that before the conversation begins, that you have all the relevant information you will need to find out why they are so hostile to the new employee to avoid judging them prematurely and therefore putting them on the defensive which will not do well for the progress of the conversation. It will also help you detect any lies that they may have.
When the conversation is also going on along, let them explain themselves and be very patient with them as they do so. This way you will listen to respond not listen to react. This way you can hear their side of the story before making an informed decision.
A company performing its long-lived asset impairment testing is reviewing the fair value of equipment. Each of the following valuation techniques may be appropriate for measuring the fair value of the equipment, except the:_______
a. Market approach.
b. Income approach.
c. Cost approach.
d. Net realizable value approach.
Answer:
d. Net realizable value approach.
Explanation:
An impairment usually arises when a company's asset (either intangible or fixed asset) overall future cash-flow ability (fair value) is lesser than its carrying value. This impairment of assets may be as a result of varying consumer demands, recession, damages, inflation or even a change in legal conditions.
For a long-lived asset, if its carrying value exceeds its fair value and isn't really recoverable, there's an impairment loss on the asset.
In the event that, a company performing its long-lived asset impairment testing is reviewing the fair value of equipment. Each of the following valuation techniques may be appropriate for measuring the fair value of the equipment;
1. Market approach: this measures and analyzes whether there's a decline in the market price of the asset.
2. Income approach: this determines if there were any operating or cash-flow losses on the asset.
3. Cost approach: this is an approach used to determine the level of cost associated with purchasing, maintaining and fabricating the asset.
Suppose Waterman Cable Company lent $125,000 to Comcast. On December 31, 2015, Comcast paid back the $125,000 and also paid $3,000 interest to Waterman Cable Company. Under U.S.GAAP, what would be the impact of the repayment on Waterman Cable Company's statement of cash flows using the direct method
Answer:
The $125,000 which is the amount received should be an increase in the Investing Section and, under U.S.Generally Accepted Accounting Principles, the $3,000 interest received should be included in the Operating Section.
Explanation:
Based on the information in the question above what would be the impact of the repayment on Waterman Cable Company's statement of cash flows using the direct method is that the $125,000 which Waterman Cable Company lent to Comcas in which Compas paid back will be the amount received which should be an increase in the Investing Section While , under U.S.Generally Accepted Accounting Principles, the $3,000 interest received should be included in the Operating Section.
Rowdy's Restaurants Cash Flow ($ in millions) Cash received from: Customers $ 1,800 Interest on investments 200 Sale of land 100 Sale of Rowdy's common stock 600 Issuance of debt securities 2,000 Cash paid for: Interest on debt $ 300 Income tax 80 Debt principal reduction 1,500 Purchase of equipment 4,000 Purchase of inventory 1,000 Dividends on common stock 200 Operating expenses 500 Rowdy's would report net cash inflows (outflows) from operating activities in the amount of:
Answer:
Net cash flow from operating activities $120
Explanation:
Cash flows from operating activities
Cash collections:
Cash collected from customers $1,800Cash from interest revenue $200 $2,000Cash payments:
Operating expenses ($500)Inventory ($1,000)Interest on debt ($300)Income tax ($80) ($1,880)Net cash flow from operating activities $120
Tamar Co. manufactures a single product in one department. All direct materials are added at the beginning of the manufacturing process. Conversion costs are added evenly throughout the process. During May, the company completed and transferred 25,200 units of product to finished goods inventory. Its 3,600 units of beginning work in process consisted of $20,400 of direct materials and $248,940 of conversion costs. It has 2,700 units (100% complete with respect to direct materials and 80% complete with respect to conversion) in process at month-end. During the month, $677,100 of direct material costs and $2,350,260 of conversion costs were charged to production.
1. Prepare the company’s process cost summary for May using the weighted-average method.
2. Prepare the journal entry dated May 31 to transfer the cost of completed units to finished goods inventory. (Do not round intermediate calculations.)
Answer:
Required 1
Process cost summary for May
Inputs
Units Dollars
Beginning Work In Process 3,600 $269,340
Started 24,300 $3,027,360
Totals 27,900 $3,296,700
Output
Units Dollars
Transfer to Finished Goods 25,200 $3,024,000
Closing Work In Process 2,700 $272,700
Total 27,900 $3,296,700
Required 2
May 31
Finished Goods Inventory 3,024,000 (debit)
Work In Process 3,024,000 (credit)
Explanation:
Equivalent Units of Production Calculation
Materials
Units Completed and Transferred ( 25,200 × 100%) = 25,200
Units in Closing Work In Process ( 2,700 × 100%) = 2,700
Total Equivalent Units of Production = 27,900
Conversion Cost
Units Completed and Transferred ( 25,200 × 100%) = 25,200
Units in Closing Work In Process ( 2,700 × 80%) = 2,160
Total Equivalent Units of Production = 27,360
Calculation of Cost per Equivalent Unit of Production
Cost per Equivalent Unit = Total Cost / Total Equivalent Units of Production
Materials = ( $20,400 + $677,100) / 27,900
= $25.00
Conversion Cost = ( $248,940 + $2,350,260) / 27,360
= $95.00
Total Cost per Equivalent Unit = $120.00
The cost of completed units to finished goods inventory = 25,200 × $120.00 = $3,024,000.
Grandiose Growth has a dividend growth rate of 10%. The discount rate is 8%. The end-of-year dividend will be $5 per share.
What is the present value of the dividend to be paid in year 1? Year 2? Year 3?
Answer:
Year 1 2 3
Present value 5.09 5.19 5.28
Explanation:
The Present Value of a future sum is the worth today where the sum is discounted at a particular rate of return.
The formula below would be of help to work out the Present Value
Present Value = FV× (1+r)^(-n)
FV - Future Value, r- rate of return, n- number of years
Present value = $5× 1.10× 1.08^(-1)= 5.092
Present Value = $5× 1.10^2×1.08^(-2)= 5.186
Present Value in year 3 = $5× 1.10^3×1.08^(-3)= 5.28
Year 1 2 3
Present value = 5.092 5.186 5.28
6.2 Assignment: Intellectual Property 1. Clifford Witter was a dance instructor at the Arthur Murray Dance Studios in Cleveland. As a condition of employment, he signed a contract not to work for a competitor. Subsequently, he was hired by the Fred Astaire Dancing Studios, where he taught the method that he had learned at Arthur Murray. Arthur Murray sued to enforce the noncompete contract. What would be result? What additional information, if any, would you need to know to decide the case? 2. Greenberg worked for Buckingham Wax as its chief chemist, developing chemical formulas for products by testing other companies’ formulas and modifying them. Brite Products bought Buckingham’s goods and resold them under its own name. Greenberg went to work for Brite, where he helped Brite make chemicals substantially similar to the ones it had been buying from Buckingham. Greenberg had never made any written or oral commitment to Buckingham restricting his use of the chemical formulas he developed. May Buckingham stop Greenberg from working for Brite? May it stop him from working on formulas learned while working at Buckingham? Why?
Answer:
The overview of the given circumstances is described in the explanation segment below.
Explanation:
(1)...
Non-compete seems to be a standard procedure in several areas of the globe to safeguard information. There must have been 2 factors for something like a non-competent specified period in exchange, as shown in this scenario:
There's got to have been a state secret that is hidden from the public. Witter uses trade secrets for his previous venture.Neither of the circumstances confirms that realizing as well as trying to teach how and when to start dancing seems to be completely obvious and does not quantity to state secrets. If this were a style of dance that is already recognized mostly to Anthony Murray as well as Witter, therefore the case might have been dissimilar. And while this skill is trained to every learner, it isn't a secret.
Interestingly, Witter doesn't use trade secrets because it is a common experience of dance to learn well how to dance. Haven't broken the non-competition.
(2)...
Buckingham may, if he indeed wishes, promote to prevent Greenberg from operating on such formulations, and even using them for many other businesses, as he created certain formulas although employed at Buckingham. This also acknowledges that all these formulas have been created again for the corporation of Buckingham and therefore any exposure of such formulas to some of its rival businesses directly impacts the company of Buckingham.
They should negotiate through Brite the current landlord of Greenberg, not to require Greenberg to provide it, and that therefore Brite, and in so doing, is indicting the requirements including its Intellectual Property Act. Nevertheless, it seems from either the content of the issue that there was no Non-Disclosure Agreement among Buckingham as well as Greenberg.However although there would have been a long-standing contractual partnership involving Brite & Buckingham, hardly any agreement concerning digital content as well as Trade Secret sharing including non-disclosure had already been concluded.In consideration of it all, it would be very unlikely against Buckingham to just get a judge's order targeting Greenberg as well as Briton to prosecute them or even to prevent themselves from being used formulas established by Greenberg although employed for Buckingham.
Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials):
Selling expenses $ 140,000
Purchases of raw materials $ 290,000
Direct labor ?
Administrative expenses $ 100,000
Manufacturing overhead applied to work in process $ 285,000
Total actual manufacturing overhead costs $ 270,000
Inventory balances at the beginning and end of the year were as follows:
Beginning of Year End of Year
Raw materials $ 40,000 $ 10,000
Work in process ? $ 35,000
Finished goods $ 50,000 ?
The total manufacturing costs for the year were $683,000; the cost of goods available for sale totaled $740,000; the unadjusted cost of goods sold totaled $660,000; and the net operating income was $30,000. The company’s overapplied or underapplied overhead is closed entirely to Cost of Goods Sold.
Required:
a. Prepare a schedule of cost of goods manufactured.
b. Prepare a schedule of cost of goods sold.
c. Prepare an income statement for the year.
Answer and Explanation:
The Preparation of cost of goods manufactured is shown below:-
Statement of Cost of Good Manufactured
Particulars Amount
Direct Material
Beginning Inventory a $40,000
Purchases b $290,000
Direct material available $330,000
(c = a + b)
Ending direct material
inventory d $10,000
Direct Material used $320,000
(e = c - d)
Direct Labor $398,000
($683,000 - $285,000 - $320,000)
Factory Overhead $285,000
Total Manufacturing Cost $683,000
Add: Beginning WIP Inventory $42,000
($690,000 + $35,000 - $683,000)
Less: Ending WIP Inventory $35,000
Cost of goods manufactured $690,000
b and c The Preparation of schedule of cost of goods sold and income statement for the year is prepared below:-
Schedule of cost of goods sold
Income statement for the year
Particulars Amount
Sales $915,000
($270,000 + $645,000)
Cost of goods sold
Beginning inventory of
finished product $50,000
Cost of goods manufactured $690,000
Cost of goods available
for sales $740,000
Less:Ending finished good
inventory $80,000
($740,000 - $660,000)
Cost of goods sold
(Unadjusted) $660,000
Over-applied Overhead $15,000
($285,000 - $270,000)
Cost of goods sold (Adjusted) $645,000
($660,000 - $15,000)
Gross profit $270,000
($30,000 + $100,000 + $140,000)
Less: Selling & Administrative Expenses
Selling Expenses $140,000
Administrative expenses $100,000 $240,000
Operating income $30,000
a. The schedule of cost of goods manufactured is $690,000
b. The schedule of cost of goods sold is $645,000
c. The income statement for the year is $30,000
a. Superior Company Schedule of cost of goods manufactured
For year ended December 31
Direct materials:
Beginning inventory of raw materials $40,000
Raw material purchases $290,000
Raw materials available for use $330,000
($40,000+$290,000)
Less Ending inventory of raw materials ($10,000)
Direct materials used $320,000
($330,000-$10,000)
Direct labor $78,000
Manufacturing overhead applied $285,000
Total manufacturing costs $683,000
($320,000+$78,000+$285,000)
Add beginning WIP $42,000
Total cost of work in process $725,000
($683,000-$42,000)
Less Ending WIP ($35,000)
Cost of goods manufactured $690,000
($725,000-$35,000)
b. Superior Company Schedule of cost of goods sold For year ended December 31
Beginning finished goods inventory $50,000
Add Cost of goods manufactured $690,000
Cost of goods available for sale $740,000
($50,000+$740,000)
Less Ending finished goods inventory ($80,000)
Unadjusted Cost of goods sold $660,000
($740,000-$80,000)
Less Over applied overhead ($15,000)
Adjusted cost of goods sold $645,000
($660,000-$15,000)
c. Superior Company Income Statement
For year ended December 31
Sales revenue $915,000
Less Cost of goods sold $645,000
Gross profit $270,000
($915,000-$645,000)
Less Selling Expenses ($140,000)
Less Administrative Expenses ($100,000)
Operating Income $30,000
($270,000-$140,000-$100,000)
Inconclusion The schedule of cost of goods manufactured is $690,000; The schedule of cost of goods sold is $645,000 and The income statement for the year is $30,000.
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SPU, Ltd., has just received its sales expense report for January, which follows.Item AmountSales commissions $370,500Sales staff salaries 92,400Telephone and mailing 43,000Building lease payment 60,000Utilities 17,100Packaging and delivery 82,000Depreciation 36,750Marketing consultants 52,190You have been asked to develop budgeted costs for the coming year. Because this month is typical, you decide to prepare an estimated budget for a typical month in the coming year and you uncover the following additional data:1. Sales volume is expected to increase by 14 percent.2. Sales prices are expected to decrease by 10 percent.3. Commissions are based on a percentage of sales revenue.4. Sales staff salaries will increase 4 percent next year regardless of sales volume.5. Building rent is based on a five-year lease that expires in three years.6. Telephone and mailing expenses are scheduled to increase by 8 percent even with no change in sales volume. However, these costs are variable with the number of units sold, as are packaging and delivery costs.7. Utilities costs are scheduled to increase by 2 percent regardless of sales volume.8. Depreciation includes furniture and fixtures used by the sales staff. The company has just acquired an additional $57,000 in furniture that will be received at the start of next year and will be depreciated over a 10-year life using the straight-line method.9. Marketing consultant expenses were for a special advertising campaign that runs from time to time. During the coming year, these costs are expected to average $64,500 per month.Required:Prepare a budget for sales expenses for a typical month in the coming year.
Answer:
SPU, Ltd.Sales ExpenseReport for January Sales Expense Budget
Item Amount Amount
Sales commissions $370,500 $380,133
Sales staff salaries 92,400 92,096
Telephone and mailing 43,000 52,942
Building lease payment 60,000 60,000
Utilities 17,100 17,442
Packaging and delivery 82,000 93,480
Depreciation 36,750 37,225
Marketing consultants 52,190 64,500
Total Sales Expenses $753,940 $797,818
Explanation:
1. Sales volume is expected to increase by 14 percent.
2. Sales prices are expected to decrease by 10 percent.
3. Commissions are based on a percentage of sales revenue.
Sales Commissions = $380,133 ($370,500 x 1.14 x 0.9)
4. Sales staff salaries will increase 4 percent next year regardless of sales volume.
Sales staff salaries = $96,096 ($92,400 x 1.04)
5. Building rent is based on a five-year lease that expires in three years.
6. Telephone and mailing expenses are scheduled to increase by 8 percent even with no change in sales volume. However, these costs are variable with the number of units sold, as are packaging and delivery costs.
Telephone and mailing = $52,942 ($43,000 x 1.08 x 1.14)
Package and delivery = $93,480 ($82,000 x 1.14)
7. Utilities costs are scheduled to increase by 2 percent regardless of sales volume.
Utilities = $17,442 ($17,100 x 1.02)
8. Depreciation includes furniture and fixtures used by the sales staff. The company has just acquired an additional $57,000 in furniture that will be received at the start of next year and will be depreciated over a 10-year life using the straight-line method.
Previous depreciation = $36,750
Current year's addition 475 ($57,000/10 years/12 months)
Total for the month $37,225
9. Marketing consultant expenses were for a special advertising campaign that runs from time to time. During the coming year, these costs are expected to average $64,500 per month.
"In your opinion, how has social media affected customer service in a broad sense? Provide evidence that supports your opinion."
Explanation:
Social media directly impacted the relationship between consumer and company.
First, you need to consider how the internet and social media are widely used by thousands of people around the world as a way to connect with others and exchange information.
Realizing this phenomenon, companies decided to use social media as a way to interact with their customers and attract more audiences. Social media works as a space where the construction of the relationship takes place more instantly and a little less formally, which allows for more in-depth interaction and the creation of a valuable relationship between company and customer.
Through the social media it is possible that the time of an answer for example is drastically reduced, which alters the consumer perception in a positive way.
It is also possible that companies use social media as a tool to improve relationship marketing, which is the creation of value for the customer through content, photos and posts, which generate engagement, approximation, loyalty and connection with consumers.
Discuss the notion that firms should stop doing business with customers who constantly generate losses versus the notion that the customer is always right.
Answer with its Explanation:
Notion 1: Firms should stop doing business with customers who constantly generate losses
The notion says that the firm must opt to the customers that generate higher profits if it is working at full capacity which means that the demand of our product is already high and what we must do is to generate higher profits and not to generate fewer because the primary purpose of the organization is to maximize wealth of shareholders.
The notion can also be interpreted in terms of customers who have higher bargaining power and as a result force the management to deliver them with higher value in return of fewer cost. This is though beneficial to customers but for the company it is not financially acceptable
Notion 2: Customer is always right
The notion encourages the service staff to satisfy the customer and let the customer to regret of purchasing the product. This means the staff will have to attend the complaints of the clients and will also have to resolve the issues. The notion is exagrated if we talk about the misuse of the notion which is that the customer can benefit by his dishonesty and all the service staff is to do is that they must appraise the claims of the customers and act accordingly. If the service staff starts believing the customer blindly then it is most likely that the company will suffer from the customer dishonesty. This customer dishonesty is very common in poor and developing countries.
If the government imposes a price ceiling, then: the price offered by producers must be at or below the ceiling price. the market supply curve will shift to the right. the price offered by producers must be at or above the ceiling price. producers would be inclined to increase the quantity supplied. producers must charge the ceiling price.
Answer:
The answer is A. the price offered by producers must be at or below the ceiling price
Explanation:
A price ceiling is a limit on how high the price of product or service can be. Governments use price ceilings to protect consumers from the overbearing of producers. For example, let's say the price of rice in the market in going up daily as a result of scarcity. Government can set the price ceiling to be $20 per bag. This means that the price by bag must never go beyond $20. Producers can set their price to be at $20 or below $20 but must never go above the price ceiling ($20)
ctivity-Based Costing and Conventional Costs Compared Chef Grill Company manufactures two types of cooking grills: the Gas Cooker and the Charcoal Smoker. The Cooker is a premium product sold in upscale outdoor shops; the Smoker is sold in major discount stores. Following is information pertaining to the manufacturing costs for the current month. Gas Cooker Charcoal Smoker Units 1,000 4,000 Number of batches 60 10 Number of batch moves 80 20 Direct materials $20,000 $100,000 Direct labor $20,000 $27,000 Manufacturing overhead follows: Activity Cost Cost Driver Materials acquisition and inspection $288,000 Amount of direct materials cost Materials movement 16,900 Number of batch moves Scheduling 42,000 Number of batches $346,900 Rounding instructions: Do not round until your final answers. Round total cost answers to the nearest dollar and per unit answers to the nearest cent. (a) Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming all manufacturing overhead is assigned on the basis of direct labor dollars. HINT: Use 7.3809 for overhead rate calculations. Total cost Answer Gas Cooker Answer per unit Charcoal Smoker Answer per unit (b) Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming manufacturing overhead is assigned using activity-based costing. Total cost Answer Gas Cooker Answer per unit Charcoal Smoker Answer per unit PreviousSave AnswersNext
Answer:
(a) Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming all manufacturing overhead is assigned on the basis of direct labor dollars.
Gas Cooker:
total cost = $20,000 + $20,000 + $147,618 = $187,618
cost per unit = $187.62
Charcoal Smoker
total cost = $20,000 + $27,000 + $199,284 = $246,284
cost per unit = $61.57
(b) Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming manufacturing overhead is assigned using activity-based costing.
Gas Cooker:
total cost = $20,000 + $20,000 + $48,000 + $13,520 + $36,000 = $137,520
cost per unit = $137.52
Charcoal Smoker
total cost = $100,000 + $27,000 + $240,000 + $3,380 + $6,000 = $376,380
cost per unit = $94.10
Explanation:
Gas Cooker Charcoal Smoker
Units 1,000 4,000
Number of batches 60 10
Number of batch moves 80 20
Direct materials $20,000 $100,000
Direct labor $20,000 $27,000
Manufacturing overhead follows:
Activity Cost Cost Driver
Materials acquisition $288,000 Amount of direct
and inspection materials cost
$48,000
$240,000
Materials movement $16,900 Number of batch moves
$13,520
$3,380
Scheduling $42,000 Number of batches
$36,000
$6,000