Answer:
Option A. $15,400
Explanation:
The net deduction allowed as an charitable contributions are as under:
$
1. ABC Cop. stock
Cost $6000
FMV $22000 $16000
2. Personal Clothing Items
Cost $1000
FMV $400 ($600)
Net Deduction $15,400
The amount that qualifies as charitable contribution for the year is $15400.
Dazzle, Inc. produces beads for jewelry making use. The following information summarizes production operations for June. The journal entry to record June production activities for direct material usage is:
Direct materials used $87,000
Direct labor used 160,000
Predetermined overhead rate (based on direct labor) 155%
Goods transferred to finished goods 432,000
Cost of goods sold 444,000
Credit sales 810,000
a. Debit Accounts Receivable $810,000; credit Cost of Goods Sold $810,000.
b. Debit Accounts Receivable $810,000; credit Sales $366,000; credit Finished Goods Inventory $444,000.
c. Debit Cost of Goods Sold $444,000; credit Sales $444,000.
d. Debit Finished Goods Inventory $444,000; debit Sales $810,000; credit Accounts Receivable $810,000; credit Cost of Goods Sold $444,000.
e. Debit Accounts Receivable $810,000; credit Sales $810,000; debit Cost of Goods Sold $444,000; credit Finished Goods Inventory $444,000.
Answer:
e. Debit Accounts Receivable $810,000; credit Sales $810,000; debit Cost of Goods Sold $444,000; credit Finished Goods Inventory $444,000.
Explanation:
During the sale for the period, the Cost of Sales of $444,000 has to be removed from the Finished Goods Inventory as :
Cost of Goods Sold $444,000 (debit)
Finished Goods Inventory $444,000 (credit)
At the Same time, the Sales Revenue and Accounts Receivable have to be recognized at $810,000 as
Accounts Receivable $810,000 (debit)
Sales Revenue $810,000 (credit)
The combined effect gives us option e : Debit Accounts Receivable $810,000; credit Sales $810,000; debit Cost of Goods Sold $444,000; credit Finished Goods Inventory $444,000.
The journal entry to record June production activities for direct material usage is Debit Accounts Receivable $810,000; credit Sales $810,000; debit Cost of Goods Sold $444,000; credit Finished Goods Inventory $444,000. Thus, the appropriate answer choice is option (e).
Merchandise refers to as finished goods and products that have been purchased and are prepared for sale.
During the sale for the period, the Cost of Sales of $444,000 has to be removed from the Finished Goods Inventory as :
Cost of Goods Sold $444,000 (debit)
Finished Goods Inventory $444,000 (credit)
At the Same time, the Sales Revenue and Accounts Receivable have to be recognized at $810,000 as:
Accounts Receivable $810,000 (debit)
Sales Revenue $810,000 (credit)
Therefore, the combined effect gives us option e.
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Carmen Camry operates a consulting firm called Help Today, which began operations on August 1. On August 31, the company’s records show the following selected accounts and amounts for the month of August.
Cash $25,330 Dividends $5,960
Accounts receivable 22,330 Consulting fees earned 26,970
Office supplies 5,210 Rent expense 9,510
Land 43,980 Salaries expense 5,580
Office equipment 19,970 Telephone expense 840
Accounts payable 10,730 Miscellaneous expenses 490
Common stock 101,500
Required:
Use the above information to prepare an August 31 balance sheet
Answer:
Help Today
Balance Sheet
For the month ended August 31, 202x
Assets:
Cash $25,330
Accounts receivable $22,330
Office supplies $5,210
Land $43,980
Office equipment $19,970
Total assets: $116,820
Liabilities and stockholders' equity:
Accounts payable $10,730
Common stock $101,500
Retained earnings $4,590
Total liabilities and stockholders' equity: $116,820
Explanation:
Income statement:
Consulting fees earned $26,970
Rent expense $9,510
Salaries expense $5,580
Telephone expense $840
Miscellaneous expenses $490
Net income $10,550
Retained earnings = net income - dividends = $10,550 - $5,960 = $4,590
What's the answer to this question?
If you take $100 out of your piggy bank and deposit it in your checking account, how did M1 change? Did M2 change? Assuming that there are no new loans created from the deposit.\
Answer:
Neither changed
Explanation:
Based on the information given, if you decide to take the amount of $100 out of your piggy bank and deposit the amount in your checking account this means that neither M1 nor M2 changed, what only changed was the form of M1, therefore based on these you will have less availability of money or cash but have a larger checking account which allows you to make withdrawals and as well as deposits.
2. You are considering entry into a market in which there is currently only one producer (incumbent). If you enter and the incumbent prices low (fights) then you will both lose 10 million. If you enter and the incumbent accommodates than you both will earn 3 Million. If you stay out of the market you will earn nothing and the incumbent will earn 7 million. What is the best strategy for you as the entrant in the market.
Answer: a. You should enter if you expect the incumbent to accommodate
Explanation:
If you expect the incumbent to be accommodating then it is best to enter the market because you will earn 3 million along with the incumbent.
This will be a gain for the both of you that has a chance of success because fighting you will be to the detriment of the incumbent as they will then stand to lose 10 million like you will as well.
The option of the incumbent being accommodating is the best option for the both of you.
You need a 30-year, fixed-rate mortgage to buy a new home for $320,000. Your mortgage bank will lend you the money at a 6.15 percent APR for this 360-month loan. However, you can afford monthly payments of only $1,600, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment.
How large will this balloon payment have to be for you to keep your monthly payments at $1,600? Please show and explain all work.
Answer:
$362,353
Explanation:
In order to answer this question I prepared an amortization schedule to determine the remaining principal balance at the end of the 30th year.
The problem with this loan is that the interests charged for the first month only are $1,640. This means that your monthly payment will not even cover the interest expense which means that the principal will grow month after month. After 360 months, your loan balance will increase from $320,000 to $362,353.
Nana Kay Ltd is a multiproduct firm. The revenues of a single product, Germ-D, are GH¢200,000 when 10,000 units are sold. Variable costs are GH¢16 per unit. Direct fixed expenses of GH¢25,000 consists primarily of depreciation on equipment specialised to the product. By what amount will Nana Kay Ltd' cash flow change if the product is dropped? Would you advise Nana Kay Ltd to drop Germ-D
Answer:
Nana Kay Ltd' cash flow will change by GH¢160,000 if the product is dropped.
Explanation:
Variable costs are cost that change as the level of output change. Therefore, no variable cost will be incurred when there is no sales or production. The variable cost of Nana Kay Ltd can be calculate as follows:
Total variable costs = Units sold * Variable cost per unit = 10,000 * GH¢16 = GH¢160,000
Fixed expenses are expenses that remains the same when there is a change in the level of output. Therefore, fixed expenses will still be incurred whether or not there is a sale or production. The direct fixed expenses of Nana Kay Ltd is GH¢25,000.
From the explanation above, it can be seen that only the variable cost will change, will not be incurred or will become zero when Nana Kay Ltd dropped the product. Therefore, Nana Kay Ltd' cash flow will change by GH¢160,000 if the product is dropped.
Answer the following questions on the basis of the three sets of data for the country of North Vaudeville: (A ) ( B ) ( C )
(A) (B) (C)
Price level Real GDP Price level Real GDP Price level Real GDP
110 240 110 290 100 215
100 240 100 265 100 240
95 240 95 240 100 265
90 240 90 215 100 290
a. Which set of data illustrates aggregate supply in the immediate short-run in North Vaudeville?
The data in : ....(A or B or C).
Which set of data illustrates aggregate supply in the short run in North Vaudeville? The data in : .... (B or C or A).
Which set of data illustrates aggregate supply in the long run in North Vaudeville? The data in : .....(A or B or C).
b. Assuming no change in hours of work, if real output per hour of work decreases by 15 percent, what will be the new levels of real GDP in the right column of B?
Instructions: Round your answers to 2 decimal places.
With a price level of 110, new output = .............
With a price level of 100, new output = ............
With a price level of 95, new output = ...............
With a price level of 90, new output = ..........
Does the new data reflect an increase in aggregate supply or does it indicate a decrease in aggregate supply? ............(Decrease or Increase).
Answer:
North Vaudeville
a. Set of data which illustrates aggregate supply
1. in the immediate short-run:
The data in: A
2. in the short run:
The data in: B
3. in the long run:
The data in: C
b. (B) New GDP Output
Price level Real GDP Price level Real GDP
110 290 110 246.50
100 265 100 225.25
95 240 95 204.00
90 215 90 182.75
Does the new data reflect an increase in aggregate supply or does it indicate a decrease in aggregate supply? ............Decrease
Explanation:
North Vaudeville
(A) (B) (C)
Price level Real GDP Price level Real GDP Price level Real GDP
110 240 110 290 100 215
100 240 100 265 100 240
95 240 95 240 100 265
90 240 90 215 100 290
b) In the short-run, aggregate supply in North Vaudeville increases as price increases, implying that the real GDP in output terms increases with price increases.
c) In the long-run, aggregate supply in North Vaudeville does not increase with price increases, but it is influenced by other factors of production, like labor, capital, and technology.
d) In the immediate short-run, aggregate supply in North Vaudeville remains constant at different price levels.
North-Va-ud-ev-ille
a. Set of data that illustrates the aggregate supply
1. in the immediate short-run:
The data in: A
2. in the short run:
The data in: B
3. in the e-long-ate run:
The data in: C
What is Aggregate supply?b. (B) New GDP Output
Price level Real GDP Price level Real GDP
110 290 110 246.50
100 265 100 225.25
95 240 95 204.00
90 215 90 182.75
Does the new data con-template an increase in aggregate supply or accomplishes it suggest a decrease in aggregate supply? Decrease
North-Va-ud-ev-ille
(A) (B) (C)
Price level Real GDP Price level Real GDP Price level Real GDP
110 240 110 290 100 215
100 240 100 265 100 240
95 240 95 240 100 265
90 240 90 215 100 290
b) In the short-run, aggregate supply in North-Va-ud-ev-ille grows as price increases, suggesting that the real GDP in output terms improves with price increases.
c) In the long-run, aggregate supply in North-Va-ud-ev-ille does not increase with price increases, but it is influenced by other characteristics of production, like struggle, prosperity, and technology.
d) In the immediate short-run, aggregate supply in North remains un-changing at different price levels.
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Romano’s Frozen Pizza Inc. has determined from its production budget the following estimated production volumes for 12'' and 16'' frozen pizzas for September:
Units
12" Pizza 16" Pizza
Budgeted production volume 15,200 26,900
There are three direct materials used in producing the two types of pizza. The quantities of direct materials expected to be used for each pizza are as follows:
12" Pizza 16" Pizza
Direct materials:
Dough 0.90 lb. per unit 1.50 lbs. per unit
Tomato 0.60 1.00
Cheese 0.80 1.30
In addition, Lorenzo’s has determined the following information about each material:
Dough Tomato Cheese
Estimated inventory, September 1 490 lbs. 230 lbs. 275 lbs.
Desired inventory, September 30 580 lbs. 185 lbs. 340 lbs.
Price per pound $0.50 $2.20 $2.60
Required:
Prepare September’s direct materials purchases budget for Lorenzo’s Frozen Pizza Inc.
Answer:
Due to lack of space I prepared an excel spreadsheet:
Poulter Corporation will pay a dividend of $4.60 per share next year. The company pledges to increase its dividend by 6.75 percent per year, indefinitely. If you require a return of 11 percent on your investment, how much will you pay for the company’s stock today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
You will pay $108.24 for the company’s stock today.
Explanation:;
The price to pay for the company’s stock today can be calculated using the Gordon Growth Model (GGM) formula which assumes that dividend growth rate of a company will continue to be constant indefinitely. The GGM formula is as given below:
P = d/(r – g) ……………………………………… (1)
Where;
P = Price to pay for the company’s stock today = ?
d = Next year dividend per share = $4.60
r = required return = 11%, or 0.11
g = Constant dividend growth rate = 6.75%, or 0.0675
Substituting the values into equation (1), we have:
P = $4.60 / (0.11 - 0.0675)
P = $4.60 / 0.0425
P = $108.24
Therefore, you will pay $108.24 for the company’s stock today.
Cost reduction is still the number one priority for many supply chain executives, according to the MHI and Deloitte survey. Select one: True False
Answer:
MHI and Deloitte Survey
Cost Reduction #1 Priority
True
Explanation:
For supply chain companies to achieve their profit targets, they need to curtail costs. Consumers are not ready to absorb much costs as they are presented with low-priced alternatives. The competition for customers among supply chain organizations is very high. Everyone competes for the dollar the consumer is willing to spend on goods. With property and advertising costs skyrocketing, careful management of the cost structure is required.
Prepare journal entries to record the following four separate issuances of stock.
1. A corporation issued 8,000 shares of $20 par value common stock for $192,000 cash.
2. A corporation issued 4,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $33,000. The stock has a $1 per share stated value.
3. A corporation issued 4,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $33,000. The stock has no stated value.
4. A corporation issued 2,000 shares of $75 par value preferred stock for $183,000 cash.
Answer:
1.
DR Cash $192,000
CR Common stock. $160,000
CR Paid-in capital in excess of par value - Common stock $32,000
Working
Common Stock = $20 * 8,000
= $160,000
Paid-in capital in excess of par value - Common stock = 192,000 - 160,000
= $32,000
2
DR Organization expenses $33,000
CR Common stock, $4,000
CR Paid-in capital in excess of stated value - common stock $29,000
Working
Common Stock = 1 * 4,000
= $4,000
Paid-in capital in excess of stated value, common stock = 33,000 - 4,000
= $29,000
3
DR Organization expenses $33,000
CR Common stock $33,000
4
DR Cash $183,000
CR Preferred stock $150,000
CR Paid-in capital in excess of par value - preferred stock $33,000
Working
Preferred Stock = 75 * 2,000
= $150,000
Paid-in capital in excess of par value - preferred stock = 183,000 - 150,000
= $33,000
If the expected sales volume for the current period is 7,000 units, the desired ending inventory is 400 units, and the beginning inventory is 400 units, the number of units set forth in the production budget, representing total production for the current period, is Group of answer choices 7,000 7,100 6,700 7,400
Answer:
7,000 units
Explanation:
Calculation for the number of units set forth in the production budget, representing total production for the current period
Using this formula
Number of units =Current period +Ending inventory - Beginning inventory
Where,
Current period =7,000 units
Ending inventory=400 units
Beginning inventory =400 units
Let make plug in the formula above
Number of units =7,000 units + 400 units-400 units
Number of units =7,000 units
Therefore the Number of units will be 7,000 units
Answer:
7,000 units
Explanation:
When the price of erasers increases from $1.50 to $2.50, the quantity demanded of pencils is unchanged. The cross-price elasticity of demand between erasers and pencils is
Answer:
The cross elasticity of demand is zero
Explanation:
Cross elasticity of demand measures the percentage change in the quantity demand of a product occasioned by a change in the price of another but related commodity.
If the the commodities are complements, the cross of elasticity of demand between them would be negative. his implies an increase(decrease) in the price of one would lead to a decrease(increase) in the demand of the other.
If the the commodities are substitutes, the cross elasticity of demand between them would be positive. This implies an increase(decrease) in the price of one would lead to a increase (decrease) in the quantity demand of the other.
Where the cross elasticity of demand is zero, this implies that the goods are not in any way related. This implies that a change in the price of one would produce no change in the quantity demand of the other.
The structural unemployment rate is 1.7 percent, the frictional unemployment rate is 2.6 percent, and the economy's current unemployment rate is 3.9 percent. The economy is in:_______.
a. long-run equilibrium.
b. a recessionary gap producing more than Natural Real GDP.
c. a recessionary gap producing less than Natural Real GDP.
d. an inflationary gap producing Natural Real GDP.
e. an inflationary gap producing more than Natural Real GDP.
Answer:
a. long-run equilibrium.
Explanation:
In the circumstances that the structural unemployment rate is 1.7 percent, the frictional unemployment rate is 2.6 percent, and the economy's current unemployment rate is 3.9 percent. Then we can say that the economy is in a long-run equilibrium.
Structural unemployment can be defined as an involuntary unemployment that arises as a result of the incompatibility between a worker's skills set and requisite skills an employer seeks from the workers or due to technological changes.
Frictional unemployment is a form of unemployment which is voluntary because employees which to change jobs or move to another better job.
Hence, the economy is in a long-run equilibrium because the rate of unemployment has become constant, thus, prices and wages will be adjusted in order to reach wages equilibrium level.
Ravelo Corporation has provided the following data from its activity-based costing system: Activity Cost Pools Estimated Overhead Cost Expected Activity Assembly $ 514,520 52,000 machine-hours Processing orders $ 62,263 1,900 orders Inspection $ 85,589 1,910 inspection-hours Data concerning the company's product L19B appear below: Annual unit production and sales 590 Annual machine-hours 1,150 Annual number of orders 230 Annual inspection hours 180 Direct materials cost $ 53.74 per unit Direct labor cost $ 26.45 per unit According to the activity-based costing system, the unit product cost of product L19B is closest to: (Round your intermediate calculations to 2 decimal places.)
Answer:
Unitary cost= $131.02
Explanation:
Giving the following information:
L19B:
Annual unit production and sales 590
Annual machine-hours 1,150
Annual number of orders 230
Annual inspection hours 180
Direct materials cost $ 53.74 per unit
Direct labor cost $ 26.45 per unit
First, we need to calculate the predetermined overhead rate for each activity:
Assembly= 514,520/52,000= $9.9 per machine-hour
Processing orders= 62,263/1,900= $32.77 per order
Inspection= 85,589/1,910= $44.81per inspection-hour
Now, we can calculate the total allocated overhead cost for product L19B:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Assembly= 9.9*1,150= 11,385
Processing orders= 32.77*230= 7,537.1
Inspection= 44.81*180= 8,065.8
Total= 29,987.9
Finally, the cost per unit:
Unitary overhead= 29,987.9/590= 50.83
Unitary cost= 53.74 + 26.45 + 50.83
Unitary cost= $131.02
Preston Inc.'s stock has a 25% chance of producing a 30% return, a 50% chance of producing a 12% return, and a 25% chance of producing a -18% return. What is the firm's expected rate of return
Answer:
Expected return = 9%
Explanation:
A portfolio is a collection of assets/ investment. The expected return on the stock would be the weighted average of all the return of the possible return weighted according to their probability.
Expected return on portfolio:
E(R) =( Wa*Ra) + (Wb*Rb) + (Wc*Rc)
R- possible return,W- probability
E(R) = (30%× 0.25) + (12%× 0.5) + (-18%× 0.25) = 9 %
Expected return = 9%
Note that the negative sign in the last possible return implies a loss.
When a company constructs a building, the cost of the building includes materials and labor but not design fees, building permits, or insurance during construction.
a. True
b. False
Answer:
False.
Explanation:
Construction costs can be defined as the overall costs associated with the development of a built asset, project or property. The construction costs is classified into two (2) main categories and these are;
1. Operational costs: these include the costs on daily basis during the construction process such as rent, wages, sales, utility bills, maintenance and repair fees etc.
2. Capital costs: these include the costs incurred in the acquisition of the property such as commissions, insurance, property acquisition, materials, inflation, fittings, equipment, labor etc.
Hence, when a company constructs a building, the cost of the building includes materials and labor as well as the design fees, building permits, or insurance during construction.
You write one JNJ February 70 (strike price) put for a premium of $5. Ignoring transactions costs, what is the break-even price of this position
Answer:
$65
Explanation:
The computation of the break even price for this position is shown below:
Break even price is
= Strike price - premium
= $70 - $5
= $65
The stock goes upward to $65 so you lose only $5 but it falls than the stock would be $0
Hence, the break even price of this position is $65
Therefore by applying the above formula we can get the break even price and the same is to be considered
How have or will external factors result in the overhaul of a traditional industry of your choice (such as retail or any other) as we know it? Please explain and cite examples.
Explanation:
External factors can directly impact the revision of a traditional sector.
Considering the retail sector as an example, we can see how it was impacted by new technologies such as the insertion of commercial activities in an online environment.
New technologies such as the internet are tools for interaction and information exchange where companies can prospect customers and create relationship marketing that promotes greater value and positioning for a company.
For a retailer who wants to remain competitive, it is important to adapt to new ways of making sales, reinventing and updating their payment, delivery, sales and marketing processes and systems.
The development and application of mrp depended upon two developments (1) the recognition of the difference between independent and dependent demand, and (2):________
a. Computers
b. Development of the EOQ model
c. Inventory control systems
d. Blanket purchase ordersE. the internet
Answer:
a. Computers
Explanation:
The MRP refers to the material requirement planning with respect to production, scheduling, controlling of an inventory. It works is to transform the master schedule to the detailed schedule in order to purchase the raw material.
It can be divided into two components i.e independent and dependent demand. The independent demand is held for the finished goods and the dependent demand is for the components
Now for developing the mrp depend upon the recognition between the dependent and independent demand and the second one is computer
You bought an American put option some time ago. Today it has one year left to expiration. Interest rate is 10% per year. Annual compounding applies. Strike price is $100, and stock price is $5. Which of the following is incorrect?
A. If you wait until expiration day to exercise the put option, the maximum amount it can possibly be worth at that time is 100
B. It is better to exercise the put now than wait until expiration
C. You need to know the option premium to decide whether to exercise it now or to wait
D. If you exercise the option now, it is worth 95
Answer:
D. If you exercise the option now, it is worth $95
Explanation:
A put option gives the holder of the option the right to sell a certain stock at an specific strike price.
In order to determine the value of a put option, you must subtract the current market value from the strike value = strike value - current market value = $100 - $5 = $95
If the strike value is lower than the current market value, then the put option is worthless ($0).
If a firm has a levered beta of .9 and a debt to equity ratio of 1, what is the unlevered beta assuming a tax rate of 30%? (Round to the nearest hundredth)
Answer:
Unlevered beta = 0.53
Explanation:
Beta is a measure of systematic risk. Systematic risk is further divided into business and financial.
Business risk and financial risk. Business risk is that associated with the nature of the business operations that causes variability in the operating income of the business.
This is measured by the unlevered beta where the company has no debt finance.
Financial risk, on the other hand, is associated with use of debt finance . A company that uses a form of debt would face such risk . The systematic risk of such business would be measured using the levered beta.
The formula below shows the relationship:
βa = βe × Ve/ (Ve + Vd(1-T) )
βa -Unlevered beta
βe - Levered beta
Ve- Equity weight
Vd- Debt weight
T- Tax rate
DATA
βe- 0.9
βa- ?
Ve- 1
Vd- 1
T- 0.3
βa = 0.9 × 1/(1 + 1×(1-0.3)=0.529
βa - 0.53
Unlevered beta = 0.53
During the month of April, direct labor cost totaled $15,000 and direct labor cost was 40% of prime cost. If total manufacturing costs during April were $77,000, the manufacturing overhead was:
Answer:
Manufacturing overhead= $39,500
Explanation:
Giving the following information:
Direct labor= $15,000
Direct labor cost was 40% of prime cost.
Total manufacturing costs= $77,000
First, we need to calculate the prime cost:
Prime cost= direct material + direct labor
Prime cost= 15,000/0.4= 37,500
Now, we can determine the manufacturing overhead:
Manufacturing overhead= total manufacturing costs - prime costs
Manufacturing overhead= 77,000 - 37,500
Manufacturing overhead= $39,500
Ross Island Co. issues 10,000 shares of no-par value preferred stock for cash at $120 per share. The journal entry to record the transaction will consist of a debit to Cash for $1,200,000 and a credit (or credits) to:
Answer:
Please see answer below
Explanation:
The journal entry to record the issuance of 10,000 shares of no-par value preferred stock for cash at $120 per shares has a debit to cash and a credit to preferred stock for $1,200,000 ( 10,000 shares × issue price of $120 per share )
For each price in the following table, calculate the firm's optimal quantity of units to produce, and determine the profit or loss if it produces at that quantity, using the data from the previous graph to identify its total variable cost. Assume that if the firm is indifferent between producing and shutting down, it will produce.
Price Quantity Total Revenue Fixed Cost Variable Cost Profit
(Dollars per polo) (Polos) (Dollars) (Dollars) (Dollars) (Dollars)
25.00 520,000
40.00 520,000
65.00 520,000
If the firm shuts down, it must incur its fixed costs (FC) in the short run. In this case, the firm's fixed cost is $520,000 per day. In other words, if it shuts down, the firm would suffer losses of $520,000 per day until its fixed costs end (such as the expiration of a building lease).
This firm's __________ that is, the price below which it is optimal for the firm to shut down is:________
Answer:
This firm's Shut down price, That is, the price below which it is optimal for the firm to shut down is $40.
Explanation:
Shut down point is the point at which a firm or business is not able to gain any profit or benefit from the operations. Firm try to stay in the market until they reach the shut down point in business. It is a point where a business revenue just covers the variable expenses.
On January 1, 20X6, Pumpkin Corporation acquired 70 percent of Spice Company's common stock for $210,000 cash. The fair value of the noncontrolling interest at that date was determined to be $90,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition:______.
Pumpkin Spice Cash 50,000 15,000 Accounts Receivable 70,000 25,000 Inventory 30,000 20,000 Land 150,000 80,000 Buildings and Equipment 250,000 200,000 Less: Accumulated Depreciation -70,000 -20,000 Investment in Spice Co. 210,000 Total Assets 690,000 320,000 Accounts Payable 40,000 10,000 Bonds Payable 150,000 40,000 Common Stock 300,000 90,000 Retained Earnings 200,000 180,000 Total Liabilities and Equity 690,000 320,000 At the date of the business combination, the book values of Spice's assets and liabilities approximated fair value except for inventory, which had a fair value of $30,000, and land, which had a fair value of $95,000. 1. what amount of total inventory will be reported in the consolidated balance sheet prepared immediately after the business combination?
Answer:
Total inventory in consolidated balance = $60,000
Explanation:
In the consolidated balance sheet, we record the sum of both parent and subsidiary assets. Here pumpkin and spice both have an inventory of $30,000.
Total inventory in consolidated balance = Pimpkin's Inventory + fair value of Spice's inventory
Total inventory in consolidated balance = $30,000 + $30,000
Total inventory in consolidated balance = $60,000
Howard Services, Inc., has $ 8 comma 600 cash on hand on January 1. The company requires a minimum cash balance of $ 7 comma 600. January cash collections are $ 548 comma 570. Total cash payments for January are $ 567 comma 610. Prepare a cash budget for January. How much cash, if any, will Howard need to borrow by the end of January?
Answer:
The amount of cash to be borrowed = $18,040
Explanation:
The cash budget shows the expected cash payments and expected cash receipts and cash balance at the end of a particular period.
Note that in the cash budget only items of the cash are considered, therefore items like depreciation, amortization of intangible assets and apportionment of fixed costs are not included because they are not cash based.
The balance at the end = opening cash balance + cash receipts -cash payment
Applying this to Howard Services, Inc.
The amount of cash to be borrowed = Minimum cash balance required - Net cash balance
DATA
Opening cash balance - 8600
Cash receipts- 548,570
Cash payment - 567,610
Net cash balance = 8600 + 548,570 - 567,610 = (10,440)
The amount of cash to be borrowed = 7,600 - (10,440)
=7,600+10,440=18040
The amount of cash to be borrowed = $18,040
Note a negative amount of 10,400 would mean that that would be first borrowed to balance the deficit, and to take the balance to the minimum required cash balance, an addition 7,600 would need to be borrowed.
Flapjack Corporation had 7,600 actual direct labor hours at an actual rate of $12.41 per hour. Original production had been budgeted for 1,100 units, but only 950 units were actually produced. Labor standards were 7.0 hours per completed unit at a standard rate of $13.00 per hour. The direct labor time variance is
Answer:
-$12,350 Unfavorable
Explanation:
The computation of direct labor variance is shown below:
Labor time variance = (Standard hours - Actual hours) × standard rate
= (950 × 7.0 - 7,600) × $13
= (6,650 - 7,600) × $13
= -950 × $13
= -$12,350 Unfavorable
Therefore for computing the direct labor variance we simply applied the above formula by considering the given information
A firm's profit function is pi (q) = R(q) = C(q) = 40q - (110 + 20q + 10q^2).
1. What is the positive output level that maximizes the firm's profit (or minimizes its loss)?
2. What is the firm's revenue, variable cost, and profit? Should it operate or shut down in the short run?
3. The output level at which the firm's profit is maximized is q =. (Enter your response as a whole number.)
Answer:
1) [tex]\frac{d\pi (q) }{dq} = 40 - 20 - 20q = 0[/tex]
2) variable cost would be = 20 + 10 = 30, revenue = 40 , -100
3) Q = 1
Explanation:
The firm's profit function is given as
[tex]pi (q) = R(q) = C(q) = 40q - (110 + 20q + 10q^2).[/tex]
1) The positive output level that maximizes the firm's profit
can be expressed as the derivative of the given function
= [tex]\frac{d\pi (q) }{dq} = 40 - 20 - 20q = 0[/tex]
2) The firm's revenue, variable cost and profit
variable cost = 20 + 10q ( from the given function )
when q = 1 variable cost would be = 20 + 10 = 30
TR = 40q = revenue ( from given function)
when q = 1 then revenue = 40
hence variable cost is less than Revenue ( firm should operate in short run)
profit = Revenue - total cost = 40 - 140 = -100
3) The output level at which the firms profit is maximized is
q = 1