Answer: increase the income of farmers in developing nations.
Explanation:
Due to having weaker currencies, a lower standard of living and supplying raw materials, the farmers in developing nations are not paid a lot and so have to produce a significant amount of produce in order to get paid better.
International Commodity Agreements (ICAs), recognize that this is exploitative towards these farmers and so is working to increase the income that these farmers get in line with the fair trade system.
A coffee manufacturer is interested in whether the mean daily consumption of regular-coffee drinkers is less than that of decaffeinated-coffee drinkers. A random sample of 50 regular-coffee drinkers showed a mean of 4.35 cups per day. A sample of 40 decaffeinated-coffee drinkers showed a mean of 5.12 cups per day. Assume the population standard deviation for those drinking regular coffee is 1.20 cups per day and 1.36 cups per day for those drinking decaffeinated coffee. Perform an appropriate test at the 1% level of significance. Use the critical value approach.Compute the p-value.
Answer:
The P-Value ≅0 (zero).
Explanation:
From the given data we have
Regular coffee drinkers sample size = n1 = 50
Decaffeinated-coffee drinkers sample size = n2= 40
Regular coffee drinkers sample mean= x1 = 4.35
Decaffeinated-coffee drinkers sample mean = x2= 5.12
Regular coffee drinkers population standard deviation = σ1 = 1.2
Decaffeinated-coffee drinkers population standard deviation = σ2= 1.36
1) Formulate null and alternate hypothesis
H0: u1≥ u2 Ha: u1 < u2
The null hypothesis is that the mean of the regular coffee drinkers is greater or equal to the mean of decaffeinated-coffee drinkers
against the claim
the mean daily consumption of regular-coffee drinkers is less than that of decaffeinated-coffee drinkers.
2) The test statistic is
z= x1-x2/ sqrt( σ1 ²/n1 + σ2²/n2)
Putting the values
z = 4.35- 5.12/ sqrt( 1.44/50 + 1.8496/40)
z= -5.44
3) The significance level is 0.01
The critical region is Z < -2.33
4) Since the calculated value of z= -5.44 is less than the z ∝= -2.33 we reject H0.
5) the P-value can be calculated using the calculator.
The P-Value is < 0.00001.
P= 0
Which means that the claim is accepted that the mean of the regular coffee drinkers is less than the mean of decaffeinated-coffee drinkers.
Poehling Medical Center has a single operating room that is used by local physicians to perform surgical procedures. The cost of using the operating room is accumulated by each patient procedure and includes the direct materials costs (drugs and medical devices), physician surgical time, and operating room overhead. On January 1 of the current year, the annual operating room overhead is estimated to be: Disposable supplies $278,900 Depreciation expense 69,800 Utilities 29,800 Nurse salaries 259,300 Technician wages 118,200 Total operating room overhead $756,000 The overhead costs will be assigned to procedures, based on the number of surgical room hours. Poehling Medical Center expects to use the operating room an average of eight hours per day, seven days per week. In addition, the operating room will be shut down two weeks per year for general repairs. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.1. Determine the predetermined operating room overhead rate for the year.
2. Bill Harris has a five-hours procedure on Jan 22. How much operating room overhead would be charged to his procedure, using the rate determined in part 1?
3. During January, the operating room was used 240 hours. The actual overhead costs incurred for January were $67,250. Determine the overhead under or over applied for the period.
Answer:
Results are below.
Explanation:
To calculate the predetermined manufacturing overhead rate we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Total number of surgical room hours= (8*7)*52= 2,912 hours
Predetermined manufacturing overhead rate= 756,000 / 2,912
Predetermined manufacturing overhead rate= $259.61 per surgical room hour
Now, we can allocate costs using the following formula:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 259.61*5
Allocated MOH= $1,298.05
Finally, the under/over allocation for January:
Under/over applied overhead= real overhead - allocated overhead
Allocated overhead= 259.61*240= $62,306.4
Under/over applied overhead= 67,250 - 62,306.4
Underapplied overhead= $4,943.6
Knowledge Check 01 Messing Company has an agreement with a third-party credit card company, which calls for cash to be received immediately upon deposit of customers' credit card sales receipts. The credit card company receives 3.5 percent of card sales as its fee. Messing has $4,000 in credit card sales on January 1. Prepare the January 1 journal entry for Messing Company by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.
Answer:
Messing Company
Journal Entry:
January 1:
Debit Cash $3,860
Debit Credit Card Expense $140
Credit Sales Revenue $4,000
To record the cash receipt and card expense for the card sales.
Explanation:
a) Data and Calculations:
Credit card commission = 3.5% of card sales
Credit card sales on January 1 = $4,000
Credit card fees = $140 ($4,000 * 3.5%) Cash received $3,860
Cash $3,860 Credit Card Expense $140 Sales Revenue $4,000
Paparo Corporation has provided the following data from its activity-based costing system: Activity Cost Pool Total Cost Total Activity Assembly $ 794,300 47,000 machine-hours Processing orders $ 61,280 1,600 orders Inspection $ 109,681 1,430 inspection-hours Data concerning the company's product Q79Y appear below: Annual unit production and sales 500 Annual machine-hours 1,130 Annual number of orders 115 Annual inspection hours 20 Direct materials cost $ 42.00 per unit Direct labor cost $ 41.31 per unit According to the activity-based costing system, the average cost of product Q79Y is closest to:
Answer:
Unitary costs= $133.38
Explanation:
First, we need to calculate the activities rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Assembly= 794,300 / 47,000= $16.9 per machine-hour
Processing orders= 61,280 / 1,600= $38.3 per order
Inspection= 109,681 / 1,430= $76.7 per inspection-hour
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Assembly= 16.9*1,130= 19,097
Processing orders= 38.3*115= 4,404.5
Inspection= 76.7*20= 1,534
Total allocated costs= $25,035.5
Finally, the unitary costs:
Unitary allocated costs= 25,035.5/500= $50.07
Unitary costs= 50.07 + 42 + 41.31
Unitary costs= $133.38
The Step Company has the following information for the year just ended: Budget Actual Sales in units 15,000 14,000 Sales $ 150,000 $ 147,000 Less: Variable Expenses 90,000 82,600 Contribution Margin $ 60,000 $ 64,400 Less: Fixed Expenses 35,000 40,000 Operating Income $ 25,000 $ 24,400 The Step Company's sales-price variance is: Multiple Choice $7,000 unfavorable. $7,500 unfavorable. $7,500 favorable. $7,000 favorable. $3,000 unfavorable.
Answer:
$7,000 Favourable
Explanation:
Calculation to determine what The Step Company's sales-price variance is:
Using this formula
Sales Price Variance = (Actual Sales Price – Budgeted Sales Price) * Actual Sales Volume
Let plug in the formula
Sales Price Variance=[($ 147,000÷14,000)-(150,000/15,000)]*14000
Sales Price Variance = ($10.5 – $10) * 14000
Sales Price Variance = $7,000 Favorable
Therefore The Step Company's sales-price variance is: $7,000 Favorable
The Step Company has the following information for the year just ended: Budget Actual Sales in units 15,000 14,000 Sales $ 150,000 $ 147,000 Less: Variable Expenses 90,000 82,600 Contribution Margin $ 60,000 $ 64,400 Less: Fixed Expenses 35,000 40,000 Operating Income $ 25,000 $
Air Tampa has just been incorporated, and its board of directors is grappling with the question of optimal capital structure. The company plans to offer commuter air services between Tampa and smaller surrounding cities. Air Tampa believes it would have the same business risk as Jaxair, which is an airline that has been around for a few years and that has had zero growth. Jaxair's market-determined beta is 1.8, and it has a current market value debt ratio (total debt to total assets) of 45% and a federal-plus-state tax rate of 25%. Air Tampa expects to have investment tax credits when it begins business, which reduces its federal-plus-state tax rate to 15%. Air Tampa's owners expect that the total book and market value of the firm's stock, if it uses zero debt, would be $14 million. Air Tampa's CFO believes that the MM and Hamada formulas for the value of a levered firm and the levered firm's cost of capital should be used because zero growth is expected.
Required:
a. Estimate the beta of an unlevered firm in the commuter airline business based on Jaxair's market-determined beta.
b. Now assume that rd= rRF= 10% and that the market risk premium RPM for an unlevered commuter airline. 5%. Find the required rate of return on equity
c. Air Tampa is considering three capital structures: (1) $2 million debt, (2) $4 million debt, and (3) $6 million debt. Estimate Air Tampa's rs for these debt levels.
Answer:
a. Unlevered beta = 1.12
b. Required rate of return on equity = 15.60%
c-1. rs = 16.37%
c-2. rs = 17.40%
c-2. rs = 18.81%
Explanation:
a. Estimate the beta of an unlevered firm in the commuter airline business based on Jaxair's market-determined beta.
Levered beta = Unlevered beta * (1 + (D/S)(1 - T))
Therefore, we have:
Unlevered beta = Levered beta / (1 + (D/S)(1 - T)) .............. (1)
Where:
Levered beta = Jaxair's market-determined beta = 1.8
D = Debt ratio = 45%, or 0.45
S = Equity ratio = 1 - D = 1 - 0.45 = 0.55
T = Federal-plus-state tax rate = 25%, or 0.25
Substituting the values into equation (1), we have:
Unlevered beta = 1.8 / (1 + (0.45/0.55)(1 - 0.25)) = 1.12
b. Now assume that rd= rRF= 10% and that the market risk premium RPM for an unlevered commuter airline. 5%. Find the required rate of return on equity
Required rate of return on equity = ro = Rf + beta(Rm - Rf) .............. (2)
Where;
rd = Rf = 10%, or 0.10
beta = Unlevered beta = 1.12
(Rm - Rf) = market risk premium = RPM for an unlevered commuter airline = 5%, or 0.05
Substituting the values into equation (2), we have:
Required rate of return on equity = ro = 10% + 1.12(5%) = 10% + (1.12 * 5%) = 15.60%
c. Air Tampa is considering three capital structures: (1) $2 million debt, (2) $4 million debt, and (3) $6 million debt. Estimate Air Tampa's rs for these debt levels.
c-1. $2 million debt
D = Debt = $2 million
Value of unlevered firm = $14 million
T = Tax rate at start-up = 15%, or 0.15
Value of lerevered firm = Value of unlevered firm + (Debt * T) = $14 + ($2 * 15%) = $14.30 million
S = Value of equity = Value of lerevered firm - Debt = $14.30 - $2 = $12.30 million
rs = ro + ((ro - rd) * (D / S) * (1 - T)) ................... (3)
Where;
ro = 15.60%
rd = Rf = 10%, or 0.10
D = Debt = $2 million
S = Value of equity = $12.30 million
T = Tax rate at start-up = 15%, or 0.15
Substituting the values into equation (3), we have:
rs = 15.60% + ((15.60% - 10%) * (2 / 12.30) * (1 - 0.15)) = 16.37%
c-2. $4 million debt
D = Debt = $4 million
Value of unlevered firm = $14 million
T = Tax rate at start-up = 15%, or 0.15
Value of lerevered firm = Value of unlevered firm + (Debt * T) = $14 + ($4 * 15%) = $14.60 million
S = Value of equity = Value of lerevered firm - Debt = $14.60 - $4 = $10.60 million
Substituting all the relevant values into equation (3), we have:
rs = 15.60% + ((15.60% - 10%) * (4 / 10.60) * (1 - 0.15)) = 17.40%
c-3. $6 million debt
D = Debt = $6 million
Value of unlevered firm = $14 million
T = Tax rate at start-up = 15%, or 0.15
Value of lerevered firm = Value of unlevered firm + (Debt * T) = $14 + ($6 * 15%) = $14.90 million
S = Value of equity = Value of lerevered firm - Debt = $14.90 - $6 = $8.90 million
Substituting all the relevant values into equation (3), we have:
rs = 15.60% + ((15.60% - 10%) * (6 / 8.90) * (1 - 0.15)) = 18.81%
On July 1, 2016, Farm Fresh Industries purchased a specialized delivery truck for $175,600. At the time, Farm Fresh estimated the truck to have a useful life of eight years and a residual value of $22,000. On March 1, 2021, the truck was sold for $72,000. Farm Fresh uses the straight-line depreciation method for all of its plant and equipment. Partial-year depreciation is calculated based on the number of months the asset is in service. Required: 1. Prepare the journal entry to update depreciation in 2021. 2. Prepare the journal entry to record the sale of the truck. 3. Assuming that the truck was instead sold for $97,000, prepare the journal entry to record the sale.
Answer:
Part 1
Debit : Depreciation Expense $11,200
Credit : Accumulated Depreciation $11,200
Part 2
Debit : Cash $72,000
Debit : Accumulated Depreciation $88,000
Debit : P & L $15,600
Credit : Cost $175,600
Part 3
Debit : Cash $97,000
Debit : Accumulated Depreciation $88,000
Credit : P & L $9,400
Credit : Cost $175,600
Explanation:
Depreciation = (Cost - Residual Value) / Useful Life
Annual Depreciation = $19,200
to update depreciation in 2021 = $11,200
Accumulated Depreciation = $88,000
The following information was collected for the first year of manufacturing for Appliance Apps: Direct Materials per Unit $2.50 Direct Labor per Unit $1.50 Variable Manufacturing Overhead per Unit $0.25 Variable Selling and Administration Expenses $1.50 Units Produced 39,000 Units Sold 33,000 Sales Price $12 Fixed Manufacturing Expenses $117,000 Fixed Selling and Administration Expenses $21,000 Prepare an income statement under variable costing method.
Answer:
Results are below.
Explanation:
First, we need to calculate the total unitary variable cost:
Total unitary variable cost=2.5 + 1.5 + 0.25 + 1.5
Total unitary variable cost= $5.75
Now, the variable costing income statement:
Sales= 33,000*12= 396,000
Total variable cost= (33,000*5.75)= (189,750)
Total contribution margin= 206,250
Fixed Manufacturing Expenses= (117,000)
Fixed Selling and Administration Expenses= (21,000)
Net operating income= 68,250
Match each term with its definition.
a. accelerated depreciation method
b. amortization
c. book value
d. boot
e. capital expenditures
f. capital leases
g. copyright
h. declining-balance method
i. depletion
j. depreciation
k. fixed assets
l. goodwill
1. Long-term or relatively permanent tangible assets that are used in the normal business operations.
2. The systematic periodic transfer of the cost of a fixed asset to an expense account during its expected useful life.
3. The estimated value of a fixed asset at the end of its useful life.
4. A method of depreciation that provides tor equal peri0dic depreciation expense over the estimated life of a fixed asset.
5. A method of depreciation that provides tor depreciation expense based on the expected productive capacity Of a fixed asset.
6. A method of depreciation that provides periodic depreciation expense based on the declining
book value of a fixed asset over its estimated life.
7. The cost of a fixed asset minus accumulated depreciation on the asset.
8. A depreciation method that provides for a higher depreciation amount in the first year of the assets use, t0110wed by a gradually declining amount of depreciation.
9. The costs of acquiring fixed assets, adding to a fixed asset, improving a fixed asset, or extending a fixed assets useful lite.
10. Costs that benefit only the current period or costs incurred for normal maintenance and repairs
Answer:
Definition Item
1. fixed assets
2. depreciation
3. amortization
4. copyright
5. depletion
6. declining-balance method
7. book value
8. accelerated depreciation method
9. capital expenditures
10. boot
Explanation:
The Definition has been matched to the items as above.
During April, Cavy Company incurred factory overhead as follows:Indirect materials $10,500Factory supervision labor 4,000Utilities 500Depreciation (factory) 620Small tools 370Equipment rental 730Journalize the entry to record the factory overhead incurred during April. If an amount box does not require an entry, leave it blank.
Answer:
Date Account Title Debit Credit
April Factory Overhead $16,720
Indirect materials $10,500
Wages payable $4,000
Utilities payable $ 500
Accumulated Depreciation $ 620
Small tools $ 370
Equipment rental $ 730
Are you smart first to reply gets braaaaaiiiiiiiinnnliest
Answer:
Hello
Explanation:
This is a homie checkpoint and i would just like to ask if you are ok? And if you do not answer that is fine. But just know there is always someone here for you.
;)
This picture of gas stations BEST illustrates which aspect of a market economy?
A
credit
B
competition
с
interest rates
D
opportunity cost
Answer:
B. Competition is the answer for E2020
Explanation:
Before year-end adjusting entries, Dunn Company's account balances at December 31, 2010, for accounts receivable and the related allowance for uncollectible accounts were $600,000 and $45,000, respectively. An aging of accounts receivable indicated that $62,500 of the December 31 receivables are expected to be uncollectible. The net realizable value of accounts receivable after adjustment is
Answer: $537500
Explanation:
The net realizable value of accounts receivable after adjustment will be the difference between the account receivable at December 31st and the expected uncollectible. This will be:
= $600,000 - $62,500
= $537500
Therefore, the answer is $537500
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Joe King has an annual income of $240,000. Joe is buying a $400,000 house in a very desirable area, sought after by buyers. He applies for a loan at the bank and is approved for fully amortizing 30-year FRM at an annual rate of 3.40%, with monthly payments, compounded monthly. The bank will not lend more than 80% LTV. The appraisal indicates the house is worth $375,000. Assuming he does not want PMI What is the biggest mortgage Joe can get
Answer:
Joe King
The biggest mortgage Joe can get $300,000 (80% of $375,000).
Explanation:
a) Data and Calculations:
Joe King's annual income = $240,000
Cost of purchasing a house = $400,000
Bank highest limit = 80% LTV
Appraised worth of house = $375,000
80% of $375,000 = $300,000
b) 80% LTV means 80% of the loan to the property value (LTV). It is essentially the size of the mortgage that the bank is prepared to offer Joe in relation to the value of the property he is purchasing. In this instance, the appraised value of the property is $375,000. The 80% LTV will be equal to $300,000 ($375,000 * 80%).
Which of the following statements is correct concerning liability when a partner in a general partnership commits a tort while engaged in partnership business? A. The partner committing the tort is the only party liable. B. The partnership is the only party liable. C. Each partner is jointly and severally liable. D. Each partner is liable to pay an equal share of any judgment.
The statement is correct concerning liability when a partner in a general partnership commits a tort while engaged in partnership business that is "each partner is jointly and severally liable". The correct option is C.
In a general partnership, each partner shares joint and several liability for the actions and liabilities of the partnership.
If a partner commits a tort while engaged in partnership business, the injured party can hold the partnership and all individual partners personally liable for any resulting damages.
This means that the injured party can choose to pursue a claim against the partnership as a whole or against any individual partner or a combination of partners, depending on their preference or ability to satisfy the judgment.
Therefore, the correct option is C.
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Beginning inventory, purchases, and sales for Item Zeta9 are as follows: Oct. 1 Inventory 200 units at $30 7 Sale 160 units 15 Purchase 180 units at $33 24 Sale 150 units Assuming a perpetual inventory system and using the first-in, first-out (FIFO) method, determine (a) the cost of goods sold on October 24 and (b) the inventory on October 31. a. Cost of goods sold on October 24 $fill in the blank 1 b. Inventory on October 31 $fill in the blank 2
Answer:
a. $4,830
b. $2,310
Explanation:
The computation is shown below:
a. The cost of goods sold as on Oct 24 is
Units sold from Oct 1 Inventory is 40 (200 units - 160 units)
And, From Oct. 15 Purchase is 110 (150 units - 40 units)
Now
Cost of goods sold on October 24 is $4,830 (40 × 30) + (110 × 33)
b. The inventory as on Oct 31 is
= (180 - 110) × $33
= $2,310
Which of the following is an example of an ethical standard you may find in
other countries but not in the United States?
A. Having mandatory retirement for people over 65
B. Bribing government officials
C. Respecting lines of authority
O D. Keeping your word
In 2013, Chirac Enterprises issued, at par, 75 $1,060, 8% bonds, each convertible into 200 shares of common stock. Chirac had revenues of $19,100 and expenses other than interest and taxes of $8,860 for 2014. (Assume that the tax rate is 40%.) Throughout 2014, 2,530 shares of common stock were outstanding; none of the bonds was converted or redeemed.(a) Compute diluted earnings per share for 2014. (Round answer to 2 decimal places, e.g. $2.55.)(b) Assume the same facts as those assumed for part (a), except that the 75 bonds were issued on September 1, 2014 (rather than in 2013), and none have been converted or redeemed. (Round answer to 2 decimal places, e.g. $2.55.)(c) Assume the same facts as assumed for part (a), except that 25 of the 75 bonds were actually converted on July 1, 2014. (Round answer to 2 decimal places, e.g. $2.55.)
Answer:
Chirac Enterprises
a) Diluted EPS = $0. 35
b) Diluted EPS = $0. 35
c) Diluted EPS = $0. 35
Explanation:
a) Data and Calculations:
Issued at par 75 $1,060, 8% bonds = $70,000 Bonds Premium $9,500
Each of the 75 bonds are convertible into 200 shares = 15,000 (75 * 200) shares
2014 Revenue $19,100
2014 expenses 8,860
Pre-tax income $10,240
Tax (40%) 4,096
Net income $6,144
Ordinary EPS = $2.43 per share ($6,144/2,530)
Common shares = 2,530
Convertible bonds shares = 15,000
Total shares = 17,530
Diluted EPS = $0. 35 ($6,144/17,530) per share
b) The basic assumption for computing diluted earnings per share is that Chirac's earnings are expressed per share (EPS) as if all convertible securities were exercised. This implies that whether the bonds had been converted or not, the number of the shares used for calculating diluted earnings per share will remain the same in these scenarios.
(TYPE 6) Given that beginning inventory level is 660 units, total forecasted demand over the next 12 months is 18,000 units, and desired ending inventory level at the end of the 12th month is 900 units, what is the cost of production per month if a level strategy is used and per unit cost of production is $22
Answer: $33,440
Explanation:
First find the units to be produced for the year:
= Forecasted demand + Closing inventory - Opening inventory
= 18,000 + 900 - 660
= 18,240 units
Cost of production:
= 18,240 * 22
= $401,280
Cost per month:
= 401,280 / 12
= $33,440
According to Goldratt: Group of answer choices Two activities scheduled to be carried out sequentially and using the same scarce resource benefit from having the same project manager. Two activities scheduled to be carried out in parallel and using the same scarce resource are independent. Two activities scheduled to be carried out in parallel and using the same scarce resource are not independent. Two activities scheduled to be carried out sequentially and using the same scarce resource require different project managers.
Answer:
Two activities scheduled to be carried out in parallel and using the same scarce resource are independent.
Explanation:
Project management can be defined as the process of designing, planning, developing, leading and execution of a project plan or activities using a set of skills, tools, knowledge, techniques and experience to achieve the set goals and objectives of creating a unique product or service. Generally, projects are considered to be temporary because they usually have a start-time and an end-time to complete, execute or implement the project plan.
The fundamentals of Project Management includes;
1. Project initiation
2. Project planning
3. Project execution
4. Monitoring and controlling of the project
5. Adapting and closure of project.
Eliyahu Moshe Goldratt is a business guru from Israel and he's famously known for his works in business and economics such as Optimized Production Technique, Drum-Buffer-Rope, The Theory of Constraints, The Thinking Processes, Critical Chain Project Management, etc.
According to Goldratt, two activities scheduled to be carried out in parallel and using the same scarce resource are independent.
Consider the following limit order book for a share of stock. The last trade in the stock occurred at a price of $130. Limit Buy Orders Limit Sell OrdersPriceShares PriceShares$129.75400 $129.80150129.70700 129.85150129.65400 129.90300129.60200 129.95150128.65500 a. If a market buy order for 150 shares comes in, at what price will it be filled
Answer:
a. If a market buy order for 150 shares comes in, it will be filled at
= $128.65500 per share ($19,298.25 in total).
Explanation:
a) Data and Calculations:
Limit Buy Orders Limit Sell Orders
Price Shares $129.75400 $129.80150
Price Shares 129.70700 129.85150
Price Shares 129.65400 129.90300
Price Shares 129.60200 129.95150
Price Shares 128.65500 130.00000
The total purchase price for 150 shares = $19,298.25 ($128.65500 * 150)
b) An investor's Limit Buy Orders give the limit above which the shares cannot be exchanged for cash. But below and at the limit amount, the shares can be bought in exchange for cash. The investor's Limit Sell Orders give the limit below which the shares should not be sold in exchange for cash. In other words, the shares can be sold at a price above the limit.
The income statement of Kimbrough Community Clinic for the year ended December 31, 2017, is provided below.
Kimbrough Community Clinic Income Statement For the year ended 12/31/2017
Revenues:
Net patient service revenue $774,000
Operating Expenses:
Medical services $361,000
Support services 253,000
General services 95,000
Depreciation 33,000 (742,000)
Operating Income 32,000
Other Income and Expenses:
Interest income 34,000
Interest expense 12,000 22,000
Net Income $54,000
Assuming a maximum annual debt service of $68,000, calculate the organization's debt service coverage ratio.
a. 1.46
b. 1.78
c. 0.79
d. 0.13
Answer:
0.47
Explanation:
Debt service coverage ratio = Net Operating Income ÷ Total Debt Service
where,
Net Operating Income = Revenue - Certain Operating Expenses
Total Debt Service = Current Debt Obligations
therefore,
debt service coverage ratio = $32,000 ÷ $68,000 = 0.47
Marigold Corp. enters into a contract with a customer to build an apartment building for $1,069,900. The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of $153,300 to be paid if the building is ready for rental beginning August 1, 2021. The bonus is reduced by $51,100 each week that completion is delayed. Marigold commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes: Completed by Probability August 1, 2021 70 % August 8, 2021 20 August 15, 2021 6 After August 15, 2021 4 Determine the transaction price for this contract.
Answer:
$1,193,562
Explanation:
Calculation to Determine the transaction price for this contract.
First step is to calculate the probabilities
Probabilities
August 1, 2021 =70 % *$153,300
August 1, 2021 =$107,310
August 8, 2021= 20%*$51,100
August 8, 2021= $10,220
August 15, 2021 =6%*$102,200
($153,300-$51,100)
August 15, 2021 =$6,132
After August 15, 2021= 4%*$0
After August 15, 2021= $0
Now let calculate the transaction price for this contract.
Total transaction price =$1,069,900+ $107,310+$10,220+$6,132+$0
Total transaction price =$1,193,562
Therefore the transaction price for this contract will be $1,193,562
Three identical units of merchandise were purchased during July, as follows: Date Product T Units Cost July 3 Purchase 1 $31 10 Purchase 1 34 24 Purchase 1 37 Total 3 $102 Average cost per unit $34 Assume one unit sells on July 28 for $48. Determine the gross profit, cost of goods sold, and ending inventory on July 31 using (a) first-in, first-out, (b) last-in, first-out, and (c) average cost flow methods.
Answer:
(a) first-in, first-out,
Cost of Sales = $31
Ending Inventory = $71
Gross Profit = $17
(b) last-in, first-out,
Cost of Sales = $37
Ending Inventory = $65
Gross Profit = $17
(c) average cost flow methods.
Cost of Sales = $48
Ending Inventory = $96
Gross Profit = $0
Explanation:
(a) first-in, first-out,
FIFO method assumes that the units to arrive first, will be sold first. This means cost of sales will be based on earlier (old) prices whilst inventory valuation will be on recent (new) prices.
Cost of Sales = 1 x $31 = $31
Ending Inventory = 1 x $34 + 1 x $37 = $71
Gross Profit = $48 - $31 = $17
(b) last-in, first-out,
LIFO method assumes that the units to arrive last will be sold first. This means cost of sales will be based on recent (new) prices whilst inventory valuation will be on earlier (old) prices.
Cost of Sales = 1 x $37 = $37
Ending Inventory = 1 x $34 + 1 x $31 = $65
Gross Profit = $48 - $37 = $17
(c) average cost flow methods.
This method calculates a new average unit cost with each and every purchase made. This unit cost is used to determine the cost of sales and inventory value.
Cost of Sales = 1 x $48 = $48
Ending Inventory = 2 x $48 = $96
Gross Profit = $48 - $48 = $0
During the next year, sales of Fluoro2211 are expected to be 10,000 units. All costs will remain the same except for fixed manufacturing overhead, which will increase by 20%, and material, which will increase by 10%. The selling price per unit for next year will be $160. Based on these data, Razor Inc.'s total contribution margin for next year will be:
Answer:
$1,080,000
Explanation:
Calculation to determine what Razor Inc.'s total contribution margin for next year will be:
First step is to calculate the Total cost
Selling price per unit for next year $160
Less Direct Materials ($22)
(110%*20)
Less Direct Labor ($15)
Less Variable Manufacturing Overhead ($12)
Less Variable Selling ($3)
Total $108
Now let calculate the Next year contribution margin
Next year contribution margin=$108*10,000 units
Next year contribution margin= $1,080,000
Therefore Razor Inc.'s total contribution margin for next year will be:$1,080,000
the Hsu Manufacturing Company has two service departments: Maintenance and Accounting. The Maintenance Department's costs of $300,000 are allocated on the basis of machine hours. The Accounting Department's costs of $120,000 are allocated on the basis of the number of employees within a specific department. The direct departmental costs for A and B are $300,000 and $500,000, respectively. Maint Acctg A B Machine hours 480 20 2,300 200 Number of employees 2 2 8 4What is the Accounting Department's cost allocated to Department B using the direct method
Answer:
$34,286
Explanation:
Step 1
Total number of employees :
Maintenance 2
Department A 8
Department B 4
Total 14
Step 2
Allocation to Department B :
Department B = 4 / 14 x $120,000
= $34,286
Conclusion :
Accounting Department's cost allocated to Department B using the direct method is $34,286
The Change Corporation has two different bonds currently outstanding. Bond M has a face value of $30,000 and matures in 20 years. The bond makes no payments for the first six years, then pays $3,100 every six months over the subsequent eight years, and finally pays $3,400 every six months over the last six years. Bond N also has a face value of $30,000 and a maturity of 20 years; it makes no coupon payments over the life of the bond. The required return on both these bonds is 12% compounded semi-annually. What is the current price of Bond M and Bond N?
Answer:
a. Current price of Bond M = $24,062.31
b. Current price of Bond N = $2,916.67
Explanation:
a. Calculation of current price of Bond M
Note: See the attached excel file for the calculation of current price of Bond M (in bold red color).
In the attached excel file, the following are used:
r = required return = 12%
s = number of semiannuals in a year = 2
From the attached excel file, we have:
Current price of Bond M = $24,062.31
b. Calculation of current price of Bond N
This can be calculated using the following formula:
Current price of Bond N = Face value of bond N / (100% + Semiannual required return)^n ............................ (1)
Where;
Face value of bond N = $30,000
Semiannual required return = Required return / Number of semiannual in a year = 12% / 2 = 6%
n = Number of semiannuals = Number of years of maturity * Number of semiannual in a year = 20 * 2 = 40
Substituting the above into equation (1), we have:
Current price of Bond N = $30,000 / (100% + 6%)^40 = $2,916.67
Fuqua Company’s sales budget projects unit sales of part 198Z of 10,000 units in January, 12,000 units in February, and 13,000 units in March. Each unit of part 198Z requires 4 pounds of materials, which cost $2 per pound. Fuqua Company desires its ending raw materials inventory to equal 40% of the next month’s production requirements, and its ending finished goods inventory to equal 20% of the next month’s expected unit sales. These goals were met at December 31, 2019.
Requried:
a. Prepare a projected budget for Jan and Feb 2017.
b. Prepare a direct material budget for Jan 2017.
Answer:
Results are below.
Explanation:
To calculate the production budget for January, we need to use the following formula:
Production= sales + desired ending inventory - beginning inventory
January:
Production= 10,000 + (12,000*0.2)
Production= 12,400 units
February:
Production= 12,000 + 13,000*0.2 - (12,000*0.2)
Production= 12,200
Now, the raw material budget:
Purchases= production + desired ending inventory - beginning inventory
Purchases= 12,400*4 + (12,200*4)*0.4
Purchases= 69,120 pounds
Total cost= 69,120*2= $138,240
Which diagram arranges the types of business organizations from the most
owners to the fewest owners?
Corporation —> Partnership—> Sole proprietorship