Karma Company has prepared its operating budget for the first quarter of 20x9. The company forecasts sales of $50,000 in February, $60,000 in March, and $70,000 in April. Variable and fixed expenses are as follows: Variable: Utilities (electricity): 40 % of sales Misc. expenses: 5 % of sales Fixed: Salary expense $ 8,000 per month Rent expense $ 5,000 per month Depreciation expense $ 1,200 per month Utilities expense (fixed part) $ 800 per month Misc. Expense (fixed part) $ 1,000 per month What are the total selling and administrative expenses for the month of February
Answer:
The correct solution is "38,500".
Explanation:
The given values are:
Sales in February,
= $50,000
Sales in March,
= $60,000
Sales in April,
= $70,000
Now,
The total selling and administrative expenses for the month of February will be:
= [tex]Variable \ costs + Fixed \ cos ts[/tex]
On substituting the values, we get
= [tex]50,000\times (40 \ percent+5 \ percent) + (8,00 0+5,000+1,200+800+1,000)[/tex]
= [tex]20000+2500+8000+5000+1200+800+1000[/tex]
= [tex]38,500[/tex]
Selling, general and administrative costs are the costs incurred by a firm to market, sell and deliver its products and services, as well as run day-to-day operations.
The correct solution is "38,500".
Given Information:-
Sales in February= $50,000
Sales in March= $60,000
Sales in April = $70,000
The total selling and administrative expenses for the month of February will be:
=Variable Costs + Fixed Costs
=50,000*(40%+ 5%)+(8,000+5,000+1,200+800+1,000)
=20,000+2500+8,000+5,000+1,200+800+1,000
=$38,500
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A company purchased a 3-acre tract of land for a building site for $440,000. The company demolished the old building at a cost of $21,000, but was able to sell scrap from the building for $2,400. The cost of title transfer was $1,350 and attorney fees for reviewing the contract was $680. Property taxes paid were $7,500, of which $700 covered the period after the purchase date. The capitalized cost of the land is:
Answer:
$467,430
Explanation:
Calculation for The capitalized cost of the land is:
Purchase price $440,000
Demolition costs $21,000
Scrap sold ($2,400)
Title insurance $1,350
Legal fees $680
Property taxes ($7,500 – $700) $6,800
Total cost of land $467,430
Therefore The capitalized cost of the land is:$467,430
Walt occasionally borrows the car of his friend, Jesse. Jesse has a PAP with liability limits of 250/500/100. Walt also has a PAP, and his liability limits are also 250/500/100. Walt had an accident while using Jesse's car and was found to be legally liable for $350,000 in bodily injury costs sustained by one person. How much will be paid by Walt's policy
Answer: $250,000
Explanation:
Liability limits go as follows:
The first number is the maximum amount payable for the bodily injury suffered by one person. The second is the maximum amount payable per accident. The third number is the maximum payable for property damage.These numbers are in thousands.
As Walt was the one driving, his insurance will kick in first and his policy will pay the maximum that it can pay for bodily injury costs to one person.
That amount as shown is the first number in his limits which is $250,000.
4.7 Discuss the role that computers play in modern society.
Answer:
Computer roles in education in modern society
Storage of information.
Quick data processing.
Audio-visual aids in teaching.
Better presentation of information.
Access to the Internet.
Quick communication between students, teachers and parents.
Explanation:
Computers make people's lives easier and more comfortable:
they provide opportunities for staying in touch to billions of people who are in different parts of the world.
People can drive computerized cars and work for employers from other countries without even seeing them.
The manufacturing division of an electronics company uses activity-based costing. The company has identified three activities and the related cost drivers for indirect production costs:
Activity Cost Driver
Activity 1 Direct materials CostActivity 2 Direct Labor Cost
Activity 3 Kilowatt Hours
Three types of products are produced. Direct costs and cost-driver activity for each product for a month are as follows:
Product A Product B Product C
Direct material cost $75,000 $50,000 $125,000
Direct Labor Cost $6,600 $1,000 $3,000
Direct Labor hours $2,000 $1,000 $2,000
Kilowatt hours $150,000 $200,000 $150,000
Indirect productioncosts for the month are as follows:
Activity 1 $30,000
Activity 2 $20,000
Activity 3 $16,000
Total $66,000
A.) Compute the indirect production costs allocated to each product using the ABC system?
B.) Compute the indirect production costs allocated to each product using a traditional costing system. Assume indirect production costs are allocated to each product using the cost driver: direct labor hours?
ABC Company sells several products. Information of average revenue and costs is as follows: Selling price per unit $34 Variable costs per unit: Direct material $6 Direct manufacturing labor $2.40 Manufacturing overhead $0.80 Selling costs $3.20 Annual fixed costs $78,000 The company sells 12,000 units at the end of the year. The contribution margin per unit is ________.
Answer:
Contribution margin per unit= $21.6
Explanation:
Giving the following information:
Selling price per unit $34
Variable costs per unit:
Direct material $6
Direct manufacturing labor $2.40
Manufacturing overhead $0.80
Selling costs $3.20
The contribution margin is calculated by deducting from the selling price all the variable components:
Contribution margin per unit= selling price - total unitary variable cost
Contribution margin per unit= 34 - 6 - 2.4 - 0.8 - 3.2
Contribution margin per unit= $21.6
On July 1, Arcola Company purchases equipment for $330,000. The equipment has an estimated useful life of 10 years and expected salvage value of $40,000. The company uses straight-line depreciation. Four years later, economic factors cause the fair value of the equipment to decline to $160,000. On this date, Arcola examines the equipment for impairment and estimates $185,000 in undiscounted expected cash inflows from this equipment.
Required:
a. Compute the annual depreciation expense relating to this equipment.
b. Compute the equipment's net book value at the end of the fourth year.
c. Apply the test of impairment to this equipment as of the end of the fourth year. Is the equipment impaired?
Answer:
a. $29,000
b. $214,000
c. Yes
Explanation:
a. Annual Depreciation expense:
= (Cost - salvage value)/ Useful life
= (330,000 - 40,000) / 10,000
= $29,000
b. Net book value at end of 4th year:
= Cost - 4 year depreciation
= 330,000 - (4 * 29,000)
= $214,000
c. One test to see if equipment is not impaired is that the Expected Undiscounted cashflows need to be higher than the net book value. This is not the case here as the Net Book value of $214,000 is higher than the expected Undiscounted cash inflows of $185,000. Equipment is therefore impaired.
se the information below for Harding Company to answer the question that follow. Harding Company Accounts payable $36,681 Accounts receivable 60,524 Accrued liabilities 6,727 Cash 24,556 Intangible assets 40,334 Inventory 71,626 Long-term investments 90,463 Long-term liabilities 79,713 Marketable securities 32,237 Notes payable (short-term) 25,302 Property, plant, and equipment 627,557 Prepaid expenses 2,404 Based on the data for Harding Company, what is the amount of quick assets
Answer:
See below
Explanation:
With regards to the above,
Computation of quick assets is shown below
Quick assets = Account receivable + cash + marketable securities
= $60,524 + $24,556 + $32,237
= $117,317
Which of the following is NOT a benefit provided by a stakeholder analysis document?
Select an answer:
You will know who the project stakeholders are.
You can prioritize stakeholders so you make sure to keep the most important ones happy.
You will know the best way to communicate project information to the stakeholders.
You will understand the best way to work with different stakeholders to get results.
Answer:
This is not a benefit provided by a stakeholder analysis document:
You can prioritize stakeholders so you make sure to keep the most important ones happy.
Explanation:
A stakeholder analysis document identifies a project's stakeholders, their participation levels, interests, and influences in the project. It determines the best approach to involve, and therefore, communicate with each stakeholder group. The purpose of the document is not to prioritize stakeholders but to identify the groups.
What is the price today (in dollars and cents) of a 20-year zero coupon bond if the required rate of return is 6.95%. The bond face value is $1000. $ Place your answer in dollars and cents. You should set your calculator for at least four decimal places of accuracy. I'll remind you of this from time to time but this is a working rule throughout the semester. Do not include a dollar sign or comma in your answer. This is another rule that I'll remind you of but should be a working rule throughout the semester.
Answer:
Bond Price - Zero Coupon Bond = 260.8460 rounded off to 260.85
Explanation:
A zero coupon bond is a kind of bond which pays no periodic interest of coupon payments. Instead it is offered at a discount and it pays the par/face value at maturity. The difference between the par/face value and the issue price is the interest rate which is embedded in price of the bond. Thus, the formula to calculate the price of a zero coupon bond is as follows,
Bond Price - Zero Coupon Bond = Face Value / (1+r)^n
Where,
r is the required rate of returnn is the number of periods till maturityBond Price - Zero Coupon Bond = 1000 / (1+0.0695)^20
Bond Price - Zero Coupon Bond = 260.8460 rounded off to 260.85
XYZ company sells wooden carvings for $300 each. The direct materials cost per unit is $160 and the direct labor per unit is 2 hours at a rate of $26 per hour. Manufacturing overhead (all fixed costs) is applied based on labor hours at a rate of $36 per hour. XYZ makes and sells 1,000 units per period. How many units must XYZ sell to breakeven
Answer:
818 units
Explanation:
Unit Contribution margin
= 300 - 160 - (2 × $26)
= $88
Fixed cost period
= (2 × $36) × 1,000 units
= $72,000
Break even = Fixed cost / Contribution margin
Break even = $72,000 / $88
Break even = 818 units
Therefore, XYZ company must sell 818 units to break even.
what is businesss?explain with examples
Answer:
Explanation:
a person's regular occupation, profession, or trade which he/she is doing regularly in his/her daily life.
At Beleza Natural, one of the steps of the process is drying and styling, which include having cut and/or colored. 35% of the clients had their hair cut, which took an average of 20 min. Hairdresser spent 10 minutes with the customer while coloring the hair and only 15% of the customers chose to have their hair colored. Drying and styling the hair took 10 min on average and all the customers requested drying and styling. What is the expected activity time for this step of the process in Beleza Natural
Answer:
18.50 minutes
Explanation:
cutting and drying/styling
= 20 + 10 = 30 minutes
percentage = 35%
= 30 * 0.35 = 10.50
coloring and styling/drying
= 10 + 10 = 20 minutes
percentage = 15 percent
0.15 * 20 = 3.00
only dryind and styling
time = 10 minutes
probability = 1 - 0.15+0.35 = 0.50
0.50 * 10 = 5.00
the expected activity time for this process = 10.50 + 5.00 + 3.00
= 18.50
Everything Looks Like a Nail, Inc is a manufacturing company that produces hammers. The company faces a number of fixed and variable costs in the short run. Determine which of the costs below are examples of fixed costs or examples of variable costs by placing them in the correct category. Assume the company cannot easily adjust the amount of capital it uses.Fixed Costs Variable Costsa. interest rate on current debtb. regulatory compliance costsc. annual salaries of top managementd. cost of metal used in manufacturinge. cost of wood used in manufacturingf. postage and packaging costsg. lease on buildingh. industrial equipment costs
Answer:
Fixed costs do not depend on the level of output. They are therefore paid regardless of production.
Variable costs are only incurred as production goes on.
Fixed cost
a. Interest rate on current debt
b. Regulatory compliance costs
c. Annual salaries of top management
g. Lease on building
h. Industrial equipment costs
Variable Costs
d. Cost of metal used in manufacturing
e. Cost of wood used in manufacturing
f. Postage and packaging costs
Bramble Corp. reported the following year-end information: Beginning work in process inventory $1080000 Beginning raw materials inventory 300000 Ending work in process inventory 900000 Ending raw materials inventory 480000 Raw materials purchased 960000 Direct labor 910000 Manufacturing overhead 730000 Bramble Corp.'s cost of goods manufactured for the year is
Answer:
$2,600,000
Explanation:
Cost of goods manufactured
Consider all the manufacturing costs in the calculation to determine the cost of goods manufactured.
Cost of goods manufactured = $1,080,000 + $780,000 + $910,000 + $730,000 - $900,000
= $2,600,000
Notes :
Raw Materials used in Production = $300,000 + $960,000 - $480,000
= $780,000
therefore,
Bramble Corp.'s cost of goods manufactured for the year is $2,600,000.
On January 1, 2017 Preibus acquired 100 % of Spicer. This acquisition was not a bargain purchase. On the date of acquisition, Spicer's Equipment had a net book value of 1,600,000 and a fair value of 1,723,000. Preibus determined that Spicer's equipment had a remaining life of 5 years at the date of acquisition. What is the consolidation adjustment (in addition to adding the two trial balance amounts together) that must be made to the Equipment account when preparing consolidated statements for Preibus as of 12/31/2017
Answer:
Dr Investment in Spicer $123,000
Cr Equipment $123,000
Dr Equipment $24,600
Cr Depreciation expense $24,600
Explanation:
Preparation of the consolidation adjustment that must be made to the Equipment account when preparing consolidated statements for Preibus as of 12/31/2017
Dr Investment in Spicer $123,000
Cr Equipment $123,000
(1,600,000-1,723,000)
(To record the equipment at their fair value)
Dr Equipment $24,600
Cr Depreciation expense $24,600
($123,000/5 years)
(To record excess Depreciation charged on overvalued Equipment)
1.
What is CASS and what is its purpose?
Janbo Company produces a variety of stationery products. One product, sealing wax sticks, passes through two processes: blending and molding. The weighted average method is used to account for the costs of production. After blending, the resulting product is sent to the molding department, where it is poured into molds and cooled. The following information relates to the blending process for August:A. Work in Process on August 1, had 30,000 pounds, 20% complete. Costs associated with partially completed units were:Materials $220,000Direct labor 30,000Overhead applied 20,000B. Work in Process on August 31, had 50,000 pounds, 40% complete.C. Units completed and transferred out totaled 480,000 pounds. Costs added during the month were (all inputs are added uniformly):Materials $5,800,000Direct labor 4,250,000Overhead applied 1,292,500Required:1A. Prepare a physical flow schedule.1B. Prepare an equivalent unit schedule.2. Calculate the unit cost.3. Compute the cost of EWIP and the cost of goods transferred out.4. Prepare a cost reconciliation.5. Suppose that the materials added uniformly in blending are paraffin and pigment and that the manager of the company wants to know how much each of these materials costs per equivalent unit produced. The costs of the materials in BWIP are as follows:Paraffin $120,000Pigment 100,000The costs of the materials added during the month are also given:Paraffin $3,250,000Pigment 2,550,000Prepare an equivalent unit schedule with cost categories for each material.
Answer:
1a. Janbo Company
Physical Flow Schedule
Units to account for:
Units in beginning work in process 30000
Units started 500000
Total units to account for 530,000
Units accounted for:
Units completed 480,000
From ending work in process 50,000
Total units accounted for 530,000
1b. Janbo Company
Schedule of Equivalent Units
Weighted Average Method
Units completed 480,000 100% 480,000
Units in ending work in process 50,000 40% 20,000
Total equivalent units 500,000
2. Particulars Amount Amount
Beginning work in process:
Materials $220,000
Direct labor $30,000
Overhead applied $20,000 $270,000
Cost added during the month
Materials $5,800,000
Direct labor $4,250,000
Overhead applied $1,292,500 $11,342,500
Total cost $11,612,500
Equivalent cost per unit = Total cost/Total equivalent units
Equivalent cost per unit = $11,612,500/500,000
Equivalent cost per unit = $23.225
3. Ending work in process= 20000 * $23.225 = 464500
Goods transferred out = 480000 * $23.225 = 11148000
4. Janbo Company
Cost Reconciliation
Costs to account for:
Beginning WIP 270000
August costs 11342500
Total to account for 11,612,500
Costs accounted for:
Transferred out 11,148,000
Ending WIP 464,500
Total costs accounted for 11,612,500
why does a businesss cycle diagram serve as a forecasting model?
Dividends cause a(n) increase/decrease)_________ in equity and are recorded directly in
Answer:
Decrease (debit) in equity, Cash Dividends Payable (credit, liability account)
Explanation:
The journal entry to record the declaration of the cash dividends involves a decrease (debit) to Retained Earnings (a stockholders' equity account) and an increase (credit) to Cash Dividends Payable (a liability account).
(opentextbc.ca)
It is better to ___ than to ___.
A. pay with a credit card; use cash
B. pay down a credit card; save the money
C. save the money, pay off a credit card
D. use cash; save the money
Answer:
It is better to pay down a cred card than to save the money.
Or B
Explanation: I just took the quiz.
It is better to "save the money, pay off a credit card" than to "use cash". The correct option is C.
Why is it important to save money early?The first step toward financial independence is saving money. The sooner children and teenagers begin saving, the more probable it is that it will become a habit. Children and teenagers can benefit from compound interest by saving frequently and early. Finding ways to generate additional money might help kids and teenagers increase their savings.
This is because paying off a credit card debt can help reduce overall debt and save money in the long term by avoiding high-interest charges. On the other hand, using cash may provide a sense of security and control over spending, but it does not necessarily address existing debt or help build credit history.
Thus, the ideal selection is option C.
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Brief Exercise 162 a-b On January 1, 2020, Borse Company issued bonds with a face value of $800,000. The bonds carry a stated interest of 7% payable each January 1. Prepare the journal entry for the issuance assuming the bonds are issued at 95. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Prepare the journal entry for the issuance assuming the bonds are issued at 105. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit
Answer:
1.
January 1, 2020
Cash $760000 Dr
Discount on Bonds Payable $40000 Dr
Bonds Payable $800000 Cr
2.
January 1, 2020
Cash $840000 Dr
Bonds Payable $800000 Cr
Premium on Bonds Payable $40000 Cr
Explanation:
1.
When the bonds are issued at 95, this means that they are being issued at 95% of their face value and the cash received will be 95% of the face value which will be = 800000 * 0.95 = 760000
This means that the bonds are issued at a discount to face value and the entry will be to record the cash received as debit for 760000 and the bonds payable which is a liability as credit of 800000. The difference is the discount on issuance of bonds and will be debited by,
Discount = 800000 - 760000 => $40000.
2.
When the bonds are issued at 105, this means that they are being issued at 105% of their face value and the cash received will be 105% of the face value which will be = 800000 * 1.05 = 840000
This means that the bonds are issued at a premium to the face value and the entry will be to record the cash received as debit for 840000 and the bonds payable which is a liability as credit of 800000. The difference is the premium on issuance of bonds and will be credited by,
Premium = 840000 - 800000 => $40000.
An accounting clerk for Chesner Co. prepared the following bank reconciliation: Chesner Co. Bank Reconciliation August 31
Cash balance according to company’s records $11,100
Add: Outstanding checks $3,585
Error by Chesner Co. in recording Check No. 1056 as $950 instead of $590 360
Note for $12,000 collected by bank, including interest 12,480 16,425
$27,525
Deduct: Deposit in transit on August 31 $7,200 Bank service charges 25 7,225
Cash balance according to bank statement $20,300
Required:
a. From the data prepared by the accounting clerk, prepare a new bank reconciliation for Chesner Co.,
b. If a balance sheet were prepared for Chesner Co. on July 31, 2016, what amount should be reported for cash?
Answer:
See below
Explanation:
Chesner Co.
Bank reconciliation statement
a.
Cash balance according to bank statement
$20,300
Add:
Deposit in transit on July 31
$7,200
Deduct:
Outstanding checks
($3,585)
Balance
$3,615
Adjusted balance
$23,915
Cash balance according to company's record
$11,100
Add:
Error in recording check no
1056 as $950 instead of $590
$360
Note for $12,000 collected by bank including interest
$12,480
Deduct:
Bank service charge
($25)
Balance
$12,815
Adjusted balance
$23,915
b. The amount that should be reported as cash if a balance sheet were prepared for Chesner Co. on July 31, 2016 is $23,915
One of the four major time value of money terms; the amount to which an individual cash flow or series of cash payments or receipts will grow over a period of time when earning interest at a given rate of interest.
a. True
b. False
Answer:
true
Explanation:
If the market for quilts is perfectly competitive and other quilt producers face the same cost as Alex then what would you expect to happen to both the number of firms making quilts and the equilibrium price of quilts in the long run
Answer:
Since the firms are currently losing money, some of them will eventually exit the market in the long run. Once the total number of firms decreases, the equilibrium price will shift upwards until it reaches a point where the firms are able to break even. in other words, the firms will make 0 economic profit, but they will not lose money either.
Scenario: You are a CEO of well-established and profitable software technology firm that has a choice to invest in one of two new software technologies; one that promises modest profit with very little risk and another that may yield a very high profit but at considerable risk. Keeping in mind cultural factors (social values/priorities, politics, economy, technology, regulation, etc.) Answer the following: 1. What would your choice be? 2. Who in your company might support the first technology and who might support the second? 3. Think about individuals from all levels of the company, from the CEO and board members down to R&D personnel. What considerations of your decision need to be made from a societal perspective? 4. Consider individuals outside of the company itself. How might the type of industry affect this type of decision?
Answer:
1. What would your choice be?
My choice would be the little risk, modest profit option, because the company is well-established, and at that point, it is not necessary to take on huge risks.
2. Who in your company might support the first technology and who might support the second?
Younger employees would probably support the second technology, while older, more established and secure employees like senior managers would be more likely to support the first technology.
3. Think about individuals from all levels of the company, from the CEO and board members down to R&D personnel. What considerations of your decision need to be made from a societal perspective?
How the investment decision will affect the different departments of the company, both at the department level, and at the individual level.
4. Consider individuals outside of the company itself. How might the type of industry affect this type of decision?
The type of industry affects the decision greatly because different industries have varying degrees of market risk. This market risk is often measured by a "beta", which is a measure or the deviation of an industry from the average market risk.
According to the Law of Demand, what will happen when the price of a good increases?
Answer:
According to the law of demand, as the price increase the quantity demand decreases, and conversely, as the prices decreases,the quantity demanded increases
The cash flow data for GM is below Cash dividend..............................................$ 94,000 New PPE........................................................$ 61,000 Interest paid on debt.................................$ 39,000 Sales of old equipment.............................$ 86,000 Repurchase of stock..................................$ 83,000 Cash payments to suppliers...................$ 109,000 Cash collections from customers.........$ 440,000 A) Find the net cash provided by or used in investing activities.
Answer:
the net cash provided by investing activities is $25,000
Explanation:
The computation of the net cash provided by or used in investing activities is shown below
= Sale of old equipment - New PPE
= $86,000 - $61,000
= $25,000
Hence, the net cash provided by investing activities is $25,000
An unlevered firm has a cost of capital of 16.7 percent and earnings before interest and taxes of $489,602. A levered firm with the same operations and assets has face value of debt of $650,000 with a coupon rate of 7.5 percent that sells at par. The applicable tax rate is 35 percent. What is the value of the levered firm
Answer:
$2,133,136.53
Explanation:
Calculation for value of the levered firm
First step is to calculate the VU
VU= [$489,602 × (1 - .35)] / .167
VU= $1,905,636.53
Now let calculate the value of the levered firm
VL= $1,905,636.53 + .35($650,000)
VL= $2,133,136.53
Therefore the value of the levered firm is $2,133,136.53
You run a hospital with 100 rooms. Fixed daily cost is $2000 which includes staff salary, property charges, maintenance etc. Variable cost per room is $10 which includes cleaning, equipment rentals, utility cost etc. which is incurred only when the room is full. You charge $50 per room per day. You sold 30 rooms today, how much profit/loss did you earn.
Answer:
lost $800
profit per room is 50-10= 40 per full room. 30 rooms at 40 each is $1200. fixed cost is $2000, $800 more than the days revenue