. Determine departmental overhead rates and compute the overhead cost per unit for each product line. Base your overhead assignment for the components department on machine hours. Use welding hours to assign overhead costs to the finishing department. Assign costs to the support department based on number of purchase orders. 2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $250 for Model 145 and $180 for Model 212. 3. If the market price for Model 145 is $820 and the market price for Model 212 is $480, determine the profit or loss per unit for each model.
Question Completion:
Way Cool produces two different models of air conditioners. The company produces the mechanical systems in its components department. The mechanical systems are combined with the housing assembly in its finishing department. The activities, costs, and drivers associated with these two manufacturing processes and the production support process follow. Process Activity Overhead Cost Driver Quantity Components Changeover $ 500,000 Number of batches 800 Machining 279,000 Machine hours 6,000 Setups 225,000 Number of setups 120 $ 1,004,000 Finishing Welding $ 180,300 Welding hours 3,000 Inspecting 210,000 Number of inspections 700 Rework 75,000 Rework orders 300 $ 465,300 Support Purchasing $ 135,000 Purchase orders 450 Providing space 32,000 Number of units 5,000 Providing utilities 65,000 Number of units 5,000 $ 232,000 Additional production information concerning its two product lines follows. Model 145 Model 212 Units produced 1,500 3,500 Welding hours 800 2,200 Batches 400 400 Number of inspections 400 300 Machine hours 1,800 4,200 Setups 60 60 Rework orders 160 140 Purchase orders 300 150 Required: 1. Determine departmental overhead rates and compute the overhead cost per unit for each product line. Base your overhead assignment for the components department on machine hours. Use welding hours to assign overhead costs to the finishing department. Assign costs to the support department based on number of purchase orders. 2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $250 for Model 145 and $180 for Model 212. 3. If the market price for Model 145 is $820 and the market price for Model 212 is $480, determine the profit or loss per unit for each model.
Answer:
Way Cool
1. Departmental overhead rates:
Departmental overhead rates:
Components = $167.33 per MH
Finishing = $155.10 per welding hour
Support = $515.56 per purchase order
Overhead cost per unit $496.19 $245.72
2. The total cost per unit for each product line, if the direct labor and direct materials costs per unit are $250 for Model 145 and $180 for Model 212:
Model 145 Model 212
Total cost per unit $636.63 $500.38
3. If the market price for Model 145 is $820 and the market price for Model 212 is $480, the profit or loss per unit for each model:
Model 145 Model 212
Profit per unit $183.37 ($20.38)
Explanation:
a) Data and Calculations:
Process Activity Overhead Cost Driver Quantity
Components Changeover $ 500,000 Number of batches 800
Machining 279,000 Machine hours 6,000
Setups 225,000 Number of setups 120
Total $ 1,004,000
Finishing
Welding $ 180,300 Welding hours 3,000
Inspecting 210,000 Number of inspections 700
Rework 75,000 Rework orders 300
Total $ 465,300
Support
Purchasing $ 135,000 Purchase orders 450
Providing space 32,000 Number of units 5,000
Providing utilities 65,000 Number of units 5,000
Total $ 232,000
Additional production information concerning its two product lines follows:
Model 145 Model 212 Total
Units produced 1,500 3,500 5,000
Welding hours 800 2,200 3,000
Batches 400 400 800
Number of inspections 400 300 700
Machine hours 1,800 4,200 6,000
Setups 60 60 120
Rework orders 160 140 300
Purchase orders 300 150 450
Overhead Rates per Activity Pool:
Components Changeover $ 500,000/800 = $625
Machining 279,000/6,000 = $46.50
Setups 225,000/120 = $1,875
Total $ 1,004,000/6,000 = $167.33 per MH
Finishing
Welding $ 180,300/3,000 = $60.10
Inspecting 210,000/700 = $300
Rework 75,000/300 = $250
Total $ 465,300/3,000 = $155.10 per welding hour
Support
Purchasing $ 135,000/450 = $300
Providing space 32,000/5,000 = $6.40
Providing utilities 65,000/5,000 = $13
Total $ 232,000/450 = $515.56 per purchase order
Model 145 Model 212
Units produced 1,500 3,500
Components department $301,194 $702,786
($167.33*1,800) ($167.33*4,200)
Finishing department $124,080 $341,220
($155.10*800) ($155.10*2,200)
Support department $154,668 $77,334
($515.56*300) ($515.56*150)
Total overhead costs $579,942 $1,121,340
Units produced 1,500 3,500
Overhead cost per unit $386.63 $320.38
Total production costs:
Model 145 Model 212
Direct costs per unit $250 $180
Total direct costs $375,000 $630,000
Total overhead costs $579,942 $1,121,340
Total production costs $954,942 $1,751,340
Units produced 1,500 3,500
Total cost per unit $636.63 $500.38
Model 145 Model 212
Market price per unit $820.00 $480.00
Total cost per unit 636.63 500.38
Profit per unit $183.37 ($20.38)
The process of earning compound interest allows a depositor or investor to earn interest on any interest earned in prior periods.
a. True
b. False
Answer:
A) true
Explanation:
Compound interest can be regarded as
adding of interest gotten to the principal sum of a deposit or the principal sum of a loan. It's one that is gotten after reinvesting of ones interest instead of paying it out, as a result of this the interest that comes in
next period will be earned on the principal sum along with those interests accumulated before. It should be noted the process of earning compound interest allows a depositor or investor to earn interest on any interest earned in prior periods.
Galen started a new job by showing up fifteen minutes before the official start time, taking a short lunch, and leaving approximately fifteen minutes after the official quitting time. During the first week Galen's supervisor takes him aside and tells him that he is really impressed with the fact that Galen is so punctual and dedicated to the work. The next week Galen supervisor once again compliments Galen on his punctuality and hard work. Galen continues this behavior while he works under this supervisor.
Required:
What type of conditioning has occurred here?
Answer:
Operant conditioning
Explanation:
Operant conditioning is a form of learning wherein consequences or rewards are attached to behaviors. When an individual demonstrates positive behavior, he is rewarded for such an action. Displaying bad behavior also results in punishments or negative consequences.
This type of learning is evident in the compliment Galen received from her supervisor because of her punctuality. Here a positive reward is attached to the good behavior and this will encourage Galen to keep displaying the good behavior. This type of conditioning is also known as instrumental conditioning.
QS 3-7 Adjusting prepaid (deferred) expenses LO P1 For each separate case, record the necessary adjusting entry. On July 1, Lopez Company paid $1,200 for six months of insurance coverage. No adjustments have been made to the Prepaid Insurance account, and it is now December 31. Zim Company has a Supplies account balance of $5,000 at the beginning of the year. During the year, it purchased $2,000 of supplies. As of December 31, a physical count of supplies shows $800 of supplies available. Prepare the year-end adjusting entries to reflect expiration of the insurance and correctly report the balance of the Supplies account and the Supplies Expense account as of December 31.
Answer:
S/n General Journal Debit Credit
a Insurance expense $1,200
Prepaid Insurance $1,200
(To record insurance expired)
b Supplies expense $6,200
Supplies $6,200
($5,000 + $2,000 - $800)
(To record supplies used)
When a firm adopts a just-in-time operating environment,
1) new more efficient machinery and equipment must be purchased and installed in the original layout.
2) machinery and equipment are moved into small autonomous production lines called manufacturing cells.
3) new machinery and equipment must be purchased from franchised JIT dealers.
4) employees are trained on different equipment but the plant layout generally stays unchanged.
Answer:
2) machinery and equipment are moved into small autonomous production lines called manufacturing cells.
Explanation:
It should be noted that when a firm adopts a just-in-time operating environment,machinery and equipment are moved into small autonomous production lines called manufacturing cells.
On January 1, Wei company begins the accounting period with a $43,000 credit balance in Allowance for Doubtful Accounts. On February 1, the company determined that $9,400 in customer accounts was uncollectible; specifically, $2,200 for Oakley Co. and $7,200 for Brookes Co. Prepare the journal entry to write off those two accounts. On June 5, the company unexpectedly received a $2,200 payment on a customer account, Oakley Company, that had previously been written off in part a. Prepare the entries to reinstate the account and record the cash received.
Answer:
1.
Date Account Title Debit Credit
February 1 Allowance for Doubtful accounts $9,400
Oakley Co. - Accounts Receivable $2,200
Brookes Co. - Accounts Receivable $7,200
2.
Date Account Title Debit Credit
June 5 Oakley Co. - Accounts Receivable $2,200
Allowance for Doubtful Accounts $2,200
June 5 Cash $2,200
Oakley Co. - Accounts Receivable $2,200
The city of Bethville establishes an Internal Service Fund to account for printing services provided to the various departments of the government. Police chief, Winston Watson, authorizes the payment of $2,000 for printing services provided by the Printing Services Internal Services Fund. The accounting department makes the payment. What entry should be reported in the Printing Services Internal Service Fund for receipt of the payment
Answer:
Dr Cash $2,000
Cr Transfer in from General Fund $2,000
Explanation:
Based on the information given if Winston authorizes the payment of the amount of $2,000 for the printing services that was rendered by the Printing Services Internal Services Fund which means that if The accounting department makes the payment the Journal entry that should be reported in the Printing Services Internal Service Fund for receipt of the payment is :
Dr Cash $2,000
Cr Transfer in from General Fund $2,000
He5-B9q Company operates two departments, the handling department and the packaging department. During May, the handling department reported the following information: % complete % complete units DM conversion work in process, May 1 113,000 33% 48% units started during May 201,000 work in process, May 31 169,000 74% 28% The cost of beginning work in process and the costs added during May were as follows: DM Conversion work in process, May 1 $ 94,128 $ 59,904 costs added during May $418,986 $372,816 Calculate the total cost of the 113,000 units in beginning work in process using the FIFO process costing method.
Answer:
Total cost of the 113,000 units in beginning work in process is $282,628.58.
Explanation:
Note: The data in the question are merged together. They are therefore sorted before answering question by presenting the complete question as follows:
He5-B9q Company operates two departments, the handling department and the packaging department. During May, the handling department reported the following information:
% complete % complete
units DM conversion
work in process, May 1 113,000 33% 48%
units started during May 201,000
work in process, May 31 169,000 74% 28%
The cost of beginning work in process and the costs added during May were as follows:
DM Conversion
work in process, May 1 $94,128 $59,904
costs added during May $418,986 $372,816
Calculate the total cost of the 113,000 units in beginning work in process using the FIFO process costing method.
Explanation of the answer is now provided as follows:
This total cost of the 113,000 units in beginning work in process using the FIFO process costing method calculated using the following 4 steps:
Step 1: Calculation of equivalent units
Particulars DM Conversion
To complete work in process, May 1:
113000*(1-33%) 75,710
113000*(1-48%) 58,760
Units started and completed (w.1) 88,000 88,000
Work in process, May 31:
169000*74% 125,060
169000*28% 47,320
Equivalent units 288,770 194,080
Step 2: Calculation of cost per equivalent units
Cost per Equivalent unit = Costs incurred during May / Equivalent units ....... (1)
Using equation (1), we have:
DM Cost per Equivalent unit = $418,986 / 288,770 = $1.45
Conversion Cost per Equivalent unit = $288,770 / 194,080 = $1.92
Step 3: Calculation of Total Cost to complete work in process, May 1
Cost to complete work in process, May 1 = To complete work in process, May 1 * Cost per Equivalent unit ................ (2)
Using equation (1), we have:
DM Cost to complete work in process, May 1 = 75,710.00 * $1.45 = $109,850.16
Conversion Cost to complete work in process, May 1 = 58,760 * $1.92 = $112,874.42
Total Cost to complete work in process, May 1 = DM Cost to complete work in process, May 1 + Conversion Cost to complete work in process, May 1 = $109,850.16 + $112,874.42 + $222,724.58
Step 4: Calculation of Total cost of the 113,000 units in beginning work in process
Total cost of the 113,000 units in beginning work in process = Work in process, May 1 + Cost to complete work in process, May 1 = $59,904 + $222,724.58 + $282,628.58
Workings:
w.1: Units started and completed = Units started during May - Work in process, May 1 = 201,000 - 113,000 = 88,000
recommend two ways in which women and children can be protected from discrimination and violence
Answer:
People always assume woman and children need to be protected from discrimmination, when in reality, they are stronger to deal with it themselves. For examole, of they become activists and speak up for themselves, they would control the flow of discrimmination, and the children can be more edcated on what discrimmination is, and understand how to come to terms with their identitity without being silenced and viewed as weak
Explanation:
Answer: 1. Women/children could stand up for themselves
2. We are all created equal, we all deserve the same respect as anyone else. Woman, child, man, everyone should be treated as an equal
Explanation:
— I’m in 6th grade P.S.
:)
The Anderson Company has equal amounts of low-risk, average-risk, and high-risk projects. The firm's overall WACC is 12%. The CFO believes that this is the correct WACC for the company's average-risk projects, but that a lower rate should be used for lower-risk projects and a higher rate for higher-risk projects. The CEO disagrees, on the grounds that even though projects have different risks, the WACC used to evaluate each project should be the same because the company obtains capital for all projects from the same sources. If the CEO's position is accepted, what is likely to happen over time? a. The company's overall WACC should decrease over time because its stock price should be increasing. b. The CEO's recommendation would maximize the firm's intrinsic value. c. The company will take on too many low-risk projects and reject too many high-risk projects. d. The company will take on too many high-risk projects and reject too many low-risk projects. e. Things will generally even out over time, and, therefore, the firm's risk should remain constant over time
Answer:
d. The company will take on too many high-risk projects and reject too many low-risk projects.
Explanation:
Weighted Average Cost of capital is the firm's is the rate which a firm has to pay to the lenders of fund. There can be different WACC for different projects as the WACC is based on the business risk. The beta factor can be different for all projects and since it is dependent on the nature of project and the risk it involves.
5-24 FUTURE VALUE OF AN ANNUITY Find the future values of the following ordinary annuities: a. FV of $400 paid each 6 months for 5 years at a nominal rate of 12% compounded semiannually b. FV of $200 paid each 3 months for 5 years at a nominal rate of 12% compounded quarterly c. These annuities receive the same amount of cash during the 5-year period and earn interest at the same nominal rate, yet the annuity in part b ends up larger than the one in part a. Why does this occur
Answer:
the effective interest rate is different
Explanation:
the nominal rate for both annuities is the same, 12% annual, but the compounding periods differ. One annuity is compounded semiannually while the other is compounded quarterly.
effective interest rate semiannual payments = (1 + 12%/2)² - 1 = 12.36%
effective interest rate quarter payments = (1 + 12%/4)⁴ - 1 = 12.55%
[The following information applies to the questions displayed below.] Tracy Company, a manufacturer of air conditioners, sold 100 units to Thomas Company on November 17, 2021. The units have a list price of $500 each, but Thomas was given a 30% trade discount. The terms of the sale were 2/10, n/30. Thomas uses a perpetual inventory system. Required: 1. Prepare the journal entries to record the (a) purchase by Thomas on November 17 and (b) payment on November 26, 2021. Thomas uses the gross method of accounting for purchase discounts. 2. Prepare the journal entry for the payment, assuming instead that it was made on December 15, 2021.
Answer:
1A. November 17
Dr Purchases 35,000
Cr Accounts payable 35,000
1B. November 26
Dr Accounts payable 35,000
Cr Purchase discounts 700
Cr Cash 34,300
2. December 15, 2021
Dr Accounts payable 35,000
Cr Cash 35,000
Explanation:
1A Preparation of the journal entries to record the (a) purchase by Thomas on November 17
November 17
Dr Purchases 35,000
Cr Accounts payable 35,000
[(100*$500)-(100*500*30%)]
=50,000-15,000
=35,000
B.Preparation of the journal entries to record the purchase by Thomas on November 26
November 26
Dr Accounts payable 35,000
Cr Purchase discounts 700
(2%*35,000)
Cr Cash 34,300
(35,000-700)
2. Preparation of the journal entry for the payment, assuming instead that it was made on December 15, 2021.
December 15, 2021
Dr Accounts payable 35,000
Cr Cash 35,000
[(100*$500)-(100*500*30%)]
g Sparky Corporation uses the weighted-average method of process costing. The following information is available for February in its Molding Department: Units: Beginning Inventory: 27,000 units, 100% complete as to materials and 55% complete as to conversion. Units started and completed: 114,000. Units completed and transferred out: 141,000. Ending Inventory: 31,000 units, 100% complete as to materials and 30% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: $45,000. Costs in beginning Work in Process - Conversion: $50,850. Costs incurred in February - Direct Materials: $311,160. Costs incurred in February - Conversion: $601,150. Calculate the cost per equivalent unit of conversion. Group of answer choices $4.76 $3.96 $5.29 $4.34 $5.69
Answer:
Conversion cost per equivalent unit = $4.76
Explanation:
Conversion cost per equivalent unit = Total conversion cost / Equivalent units
Conversion cost is the sum of the direct labour cost and the factory overhead cost.
Equivalent units are notional whole units which represent incomplete work and are used to apportion cost between work progress and completed work. These units are determined as follows:
Equivalent units = Degree of work done(%) × units of inventory
Equivalent units
Item Unit Equivalent unit
Completed unit 140,000 140000× 100% 140,000
Closing inventory 31,000 31,000× 30% 9,300
Total equivalent unit 149,300
Completed units = opening inventory + units started in the period - closing inventory
Completed units = 27000 + 114,000 - 31,000 = 140,000
The conversion cost = 50,850 + 601,150 = 652,000
conversion cost per equivalent unit = 652,000 /140,000 = 4.65
Conversion cost per equivalent unit = $4.76
John's House of Pancakes uses a weighted moving average method to forecast pancake sales. It assigns a weight of 5 to the previous month's demand, 3 to demand two months ago, and 1 to demand three months ago. If sales amounted to 992 pancakes in May, 2,222 pancakes in June, and 2,907 pancakes in July, what should be the forecast for August
Answer:
2,466
Explanation:
Calculation to determine what should be the forecast for August
August Forecast =[992 pancakes +(2,222 pancakes x3)+(2,907 pancakes x5)]/(5+3+1) =
August Forecast =(992 pancakes+6,666 pancakes+14,535 pancakes)/9
August Forecast =22,193 pancakes/9
August Forecast =2,466
Therefore should be the forecast for August is 2,466
Wall Street performs a sort of "financial alchemy" enabling the individual to benefit from institutions lending money to them, according to Adam Davidson, cofounder of NPR’s "Planet Money." Individuals can invest small amounts of their money in a 401(k), pooling their capital and spreading the risk. Assume you invested in Fidelity New Millennium, FMILX, one of the "10 Best Rated Funds" by The Street. How much would you pay for 80 shares if the 52-week high is $34.24, the 52-week low is $28.54, and the NAV is $41.06? (Round your answer to the nearest cent.)
Answer:
$3,284.8
Explanation:
Calculation to determine How much would you pay for 80 shares
NAV= 80 shares x $41.06
NAV = $3,284.8
Therefore based on the information given the amount you would you pay for 80 shares if the 52-week high is the amount of $34.24, the 52-week low is the amount of $28.54, and the NAV is the amount of $41.06 is $3,284.8
The costs per equivalent unit of direct materials and conversion in the Rolling Department of Kraus Steel Company are $750 and $120, respectively. The equivalent units to be assigned costs are as follows:Equivalent UnitsDirect Materials ConversionInventory in process, October 1 0 80Started and completed during October 3,700 3,700Transferred out of Rolling (completed) 3,700 3,780Inventory in process, October 31 300 75Total units to be assigned costs 4,000 3,855The beginning work in process inventory on October 1 had a cost of $163,800. Determine the cost of completed and transferred-out production, the ending work in process inventory, and the total costs assigned by the Rolling Department.
Answer:
A. $3,228,600
B. $234,000
C. $3,462,600
Explanation:
A. Calculation to Determine the cost of completed and transferred-out production
Completed and transferred-out production= [ (3700*750) + (3780*120) ]
Completed and transferred-out production=$3,228,600
B. Calculation to Determine the ending work in process inventory,
Ending Inventory in process, October 31 ,=[ (300*750) + (75*120) ]
Ending Inventory in process, October 31=$234,000
C. Calculation to determine total costs assigned by the Rolling Department
Total costs assigned by the Rolling Department=$3,228,600+$234,000
Total costs assigned by the Rolling Department=$3,462,600
Therefore the cost of completed and transferred-out production, the ending work in process inventory, and the total costs assigned
are:
A. $3,228,600
B. $234,000
C. $3,462,600
The market interest rate of a bond is: Multiple Choice An implied rate based on the price investors pay to purchase a bond in return for the right to receive the face amount at maturity and periodic interest payments over the remaining life of the bond. A government-issued rate based on general economic conditions. The rate specified in the bond contract used to calculate the cash payments for interest. The amount of principal to be returned to the bondholder at the maturity date.
Answer:
a. An implied rate based on the price investors pay to purchase a bond in return for the right to receive the face amount at maturity and periodic interest payments over the remaining life of the bond.
Explanation:
The market interest rate of a bond is an implied rate based on the price investors pay to purchase a bond in return for the right to receive the face amount at maturity and periodic interest payments over the remaining life of the bond.The market interest rate of bond are specified in the bond contract, of which the ultimate purpose is to calculate cash payments.
Profitability Analysis Kolby Enterprises reports the following information on its income statement: L04 Net sales ......... . ......... . $250,000 150,000 50,000 Administrative expenses ...... . . $10,000 15,000 10,000 Cost of goods sold .. . . .. . . .. . . Other income .. . . .. . . .. . .. . . . Selling expenses ............ . Other expense .............. . Required Calculate Kolby 's gross profit percentage and return on sales ratio. Explain what each ratio tells us about Kolby 's performance. Kolby is planning to add a new product and expects net sales to be $45,000 and cost of goods to be $38,000. No other income or expenses are expected to change. How will this affect Kolby 's gross profit percentage and return on sales ratio
Answer:
Gross profit percentage = Gross profit / Net sales
= (Net sales - COGS) / Net sales
= (250,000 - 150,000) / 250,000
= 40%
Return on sales ratio = EBIT / Net sales
= (Gross profit + other income - Administrative expenses - Other expense - Selling expenses) / Net sales
= (250,000 - 150,000 + 15,000 - 10,000 - 10,000 - 50,000) / 250,000
= 18%
With new product:
Gross profit percentage = Gross profit / Net sales
= (Net sales - COGS) / Net sales
= (250,000 + 45,000 - 150,000 - 38,000) / (250,000 + 45,000)
= 36.3%
Return on sales ratio = EBIT / Net sales
= (Gross profit + other income - Administrative expenses - Other expense - Selling expenses) / Net sales
= (250,000 + 45,000 - 150,000 - 38,000 + 15,000 - 10,000 - 10,000 - 50,000) / (250,000 + 45,000)
= 52,000 / 295,000
= 17.6%
Conifer Craft is a furniture firm that specializes in creating customized furniture for the commercial market. The firm has recently acquired a large amount of funds from investors and is looking to diversify by introducing customized products for the industrial market. The firm has completed a complete situation analysis for the purpose and the results are favorable. According to the market segmentation process model, the firm must next:_________
Answer:
implement a portfolio strategy
Explanation:
According to information regarding the company Conifer Craft, it is possible to identify that the company is diversifying its portfolio by launching customized products for the industrial market. Therefore, after this market segmentation process, it is recommended that the company develops and implements a portfolio strategy, which aims to reduce the aggregate risks of the diversification of new product lines, improving the decision-making process, identifying the potential for value of each product line according to a strategic vision, so that the company remains competitive and well positioned in the market.
Mr.fernando jose witches to put -up an Php85 million sports complex within the vicinity of the intramuros are.What advice will you give?
all I can advise is to be careful with those we should first get to know the people we trust and we should make sure if you are sure of what you want to be careful and not complacent because there are so many witches that will never go away
Exercise caution when dealing with people. We should first get to know the individuals we can trust. If you are certain of what you want, you should exercise caution and avoid becoming complacent since there are so many witches who will never go away.
What is the meaning of a sports complex?A sports complex is a sizable, open space with a number of fields or courts devoted to a single sport or group of sports. These kinds of sports facilities are frequently utilized for leagues and tournaments since they can accommodate a sizable crowd to watch the teams compete.
This includes, but is not limited to, ice skating rinks, baseball diamonds, basketball courts, and soccer fields. "That portion of a room or place where the play or practice of a sport occurs" is the "area of sport activity." Boundary lines, for instance, are used to delineate football fields.
a huge structure with a grandstand surrounding it on all sides and a field utilized for sporting events inside.
Thus, Exercise caution when dealing with people.
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Advisors, an international pension fund manager, uses the concepts of purchasing power parity(PPP) and the International Fisher Effect (IFE) to forecast spot exchange rates. Omni gathers the financial information as follows:
Base price level 100
Current U.S. price level 105
Current South African price level 111
Base rand spot exchange rate $0.175
Current rand spot exchange rate $0.158
Expected annual U.S. inflation 7%
Expected annual South African inflation 5%
Expected U.S. one-year interest rate 10%
Expected South African one-year interest rate 8%
Required:
Calculate the following exchange rates (ZAR and USD refer to the South African rand and U.S. dollar, respectively)
a. The current ZAR spot rate in USD that would been forecast by PPP.
b. Using the IFE, the expected ZAR spot rate in USD one year from now.
c. Using PPP, the expected ZAR spot rate in USD four years from now.
Answer:
a. Current spot rate / Base spot rate = Price level in home country / Price level in foreign country
CSR / 0.175 =105 / 111
CSR = (105/ 111) * 0.175
= $0.1655 / ZAR
b. Expected ZAR spot rate / Current ZAR spot rate = (1 + interest rate in home country) / (1 + interest rate in foreign country)
Expected ZAR spot rate / 0.158 = (1 + 10%) / ( 1 + 8%)
Expected ZAR spot rate = (1.1/1.08) * 0.158
= $0.1609 / ZAR
c. Expected ZAR spot rate / Current ZAR spot rate = (1 + inflation rate in home country) / (1 + inflation rate in foreign country)
Expected ZAR spot rate / 0.158 = (1 + 7%) / ( 1 + 5%)
= 1.07/1.05 * 0.158
= $0.1610 / ZAR
Define the term petty cash book and how is it prepared?
A petty cash book is a ledger kept with the petty cash fund to record amounts that are added to or subtracted from its balance. Petty cash should be part of an overall business accounting system that documents how your business moves funds between one account and another and how it spends its money.
TVs and VCRs are:
A. needs
B. wants
C. resources
D. markets
Answer:
I believe I is B-wants
Explanation:
Answer:
A
Explanation:
It's really obvious that we need a TV :-)
Mr. and Mrs. FB, a retired couple, decided to open a family restaurant. During March and April, they incurred the following expenses: Prepaid rent on commercial real estate ($2,100 per month from April through December) $ 18,900 Prepaid rent on restaurant equipment ($990 per month from April through December) 8,910 Advertising of upcoming grand opening 900 Staff hiring and training 11,500 $ 40,210 Mr. and Mrs. FB served their first meal to a customer on May 1. Determine the tax treatment of the given expenses on their tax return.
Answer:
$7,920 for rent on the equipment
$16,800 for rent on the commercial real estate
Explanation:
Calculation to Determine the tax treatment of the given expenses on their tax return.
First step is to calculate the Start Up Expenditure
Rent for April:
Commercial real estate $2,100
Equipment $990
Advertising during pre-operating phase $900
Staff hiring and training during pre-operating phase 11,500
Start Up Expenditure $15,490
Second step is to calculate the amount capitalized over 180 months
Amount capitalized over 180 months=$15,490 - $5,000 = $10,490
Amount capitalized over 180 months=$10,490 / 180 months
Amount capitalized over 180 months=$58.28 per month
Third step is to calculate the amortization deducted from this year’s tax return
Amortization deducted from this year’s tax return=(April – December = 8 months) ($58.28 x 8 months
Amortization deducted from this year’s tax return = $466.24
Now let Determine the tax treatment of the given expenses on their tax return
They can deduct ($990 x 8 months)$7,920 for rent on the equipment from May-December*
They can deduct ($2,100 x 8 months)$16,800 for rent on the commercial real estate fromMay-December
g At the beginning of the month, the Forming Department of Martin Manufacturing had 22,000 units in inventory, 30% complete as to materials, and 10% complete as to conversion. During the month the department started 84,000 units and transferred 86,000 units to the next manufacturing department. At the end of the month, the department had 20,000 units in inventory, 90% complete as to materials and 60% complete as to conversion. How many units did the Forming Department start and complete in the current month
Answer:
62,000 units
Explanation:
Calculation to determine how many units did the Forming Department start and complete in the current month
Total units completed and transferred 84,000 units
Less Inventory at the beginning of this month 22,000 units
Units Forming Department started and completed in the current month 62,000 units
(84,000 units-22,000 units)
Therefore The number of units that the Forming Department started and completed in the current month is 62,000 units
JRJ Corporation issued 10-year bonds at a price of $1,000. These bonds pay $60 interest every six months. Their price has remained the same since they were issued; that is, the bonds still sell for $1,000. Due to additional financing needs, the firm wishes to issue new bonds that would have a maturity of 10 years and a par value of $1,000 and pay $40 interest every six months. If both bonds have the same yield, how many new bonds must JRJ issue to raise additional capital of $2 million
Answer:
JRJ must issue 2,596 bonds to raise additional capital of $2 million.
Explanation:
From the question, we have the following:
Amount needed to be raised = $2 million = $2,000,000
Coupon rate = 8.0%, or 0.08
FV = Face value = 1000
Year to maturity = 10
NPER = Number of period = Year to maturity * Number of semiannuals in a year = 10 * 2 = 20
PMT = (FV * Coupon rate) / Number of semiannuals in a year =(1000 * 0.08) / 2 = 40
Rate = Semiannual interest / FV = $60 / $1000 = 0.06
The net proceeds can be calculated using the following excel function:
Net proceed = PV(rate, NPER, -PMT, -FV) ........... (1)
Substituting all the relevant value into equation (1), we have:
Net proceed = PV(6%, 20, -40, -1000)
Inputing =PV(6%, 20, -40, -1000) in any cell in excel sheet (Note: as done in the attached excel file), we have:
Net proceed = $770.60
Therefore, we have:
Number of bonds that must be raised = Amount needed to be raised / Net proceed = $2,000,000 / $770.60 = 2,596
A flow line mass production operation consists of eight manual workstations. Work units are moved synchronously and automatically between stations, with a transfer time of 30 sec. The manual processing operations performed at the eight stations take 40 sec, 52 sec, 43 sec, 48 sec, 30 sec, 65 sec, 53 sec, and 49 sec, respectively.
Determine
(a) cycle time for the line,
(b) time to process one work unit through the eight workstations,
(c) average production rate,and
(d) time to produce 100,000 units.
Answer:
Explanation:
Work station Time Transfer time
1 40
2 52 30
3 43 30
4 48 30
5 30 30
6 65 30
7 53 30
8 49 30
380 210
The cycle time of the line = 65 seconds which is the maximum of all the times
The time to process one work unit = 380 + 210 = 590 secounds
The average production rate = 60/57 = 0.92 Pc/min
Time to produce 10000 units = 10000*0.92 = 9200 Min
= 153 hrs
= 153/8
= 19.125 days
a) The cycle time for the flow line = 590 seconds or 9.833 minutes (590/60).
b) The time to process one work unit = 590 seconds
c) The average production rate at each station = 73.75 seconds (590/8).
d) The time to produce 100,000 units = 983,300 minutes (100,000 units x 9.833 minutes).
Data and calculations:
Workstation Time Transfer time Total Time
Taken from each Station Per Station
1 40 30 70 (40 + 30)
2 52 30 82 (52 + 30)
3 43 30 73 (43 + 30)
4 48 30 78 (48 + 30)
5 30 30 60 (30 + 30)
6 65 30 95 (65 + 30)
7 53 30 83 (53 + 30)
8 49 0 49 (49 + 0)
Total time 380 210 590
Thus, the cycle time is determined as the average time between the completion of units, which is 9.833 minutes.
Learn more about cycle time and average production rate here: https://brainly.com/question/20533888
2. Which group listed below can be used to set indents and
spacing?
Explanation:
nothing is listed below
Several years ago, Diego purchased a $400,000 whole life insurance policy on his life. He has paid cumulative premiums over the years of $20,000 and has accumulated a cash value of $25,000. This year, he was diagnosed with a rare liver disease, and, as a result, his life expectancy is only six months. Because of his large medical costs, he is considering selling his policy to a viatical settlement company. The company has offered him $250,000 for the policy. He would also like to explore other ways to generate cash from the policy. Which of the following statements regarding Diego's situation are CORRECT?
I. If Diego sells his policy to the viatical settlement company, he will be taxed on any gain from the sale if he dies more than two years later.
II. If the viatical company collects the death benefit as a result of Diego's death, the proceeds will be tax free to the company.
III. If Diego sold the policy to his cousin for $250,000, his cousin would be subject to ordinary income tax on a portion of the life insurance benefit when Diego dies.
IV. If Diego takes a loan from the policy, some or all of the loan will be subject to ordinary income tax if the policy is classified as a modified endowment contract (MEC).
a. I and II
b. III and IV
c. I, II, and IV
d. II and III
Answer:
b. III and IV
Explanation:
Diego has expected life of 6 month due to his liver disease. He wants to sell his life insurance policy to a company. If he sells the policy, when Diego dies the company will receive all the benefit and will be taxed at ordinary income tax rate. The proceeds are not tax free. In case if Diego sells the policy to his cousin, he will also be taxed on proceed. The tax will be ordinary income tax on the benefit from life insurance policy.
Executory Contract
The Record Company, Inc. (The Record Company), entered into a purchase agreement to buy certain retail record stores from Bummbusiness, Inc. (Bummbusiness). All assets and inventory were included in the deal. The Record Company agreed to pay Bummbusiness $20,000 and to pay the $380,000 of trade debt owed by the stores. In exchange, Bummbusiness agreed not to compete with the new buyer for two years within a 15-mile radius of the stores and to use its best efforts to obtain an extension of the due dates for the trade debt. The Record Company began operating the stores but shortly thereafter filed a petition for Chapter 11 bankruptcy. At the time of the bankruptcy filing, (1) The Record Company owed Bummbusiness $10,000 and owed the trade debt of $380,000, and (2) Bummbusiness was obligated not to compete with The Record Company. Can The Record Company reject the purchase agreement?
Answer:
No.
Explanation:
Executory contracts are ones in which contract has not been fully executed and the performance is remaining according to agreement. Both parties are liable to complete their obligations as agreed in executory contract. In this case Record Company and Bummbusiness has entered into an agreement and has formed executory contract. Record company has filed Bankruptcy just after the store opening. The company cannot reject the purchase agreement as there are important obligations which need to be performed according to the contract.