Solution :
1. The break even sales in units is given by :
Break even sales in units = [tex]$\frac{\text{fixed cost}}{\text{contribution per unit}}$[/tex]
Where, contribution per unit = selling price per unit - variable cost per unit
The anticipated break even sales in units of Cleaves company in the coming year is :
Break even sales in units = [tex]$\frac{480,000}{40}$[/tex]
Contribution per unit = $ 100 - $ 60
= $ 40
So the company anticipates its breakeven sales at 12,000 units.
2. In order tot earn profit the sales generated should overcome the breakeven point. The desired profit is $240,000, the sales required to earn the desired profit can be computed using the formula :
Desired sales in units = [tex]$\frac{\text{fixed cost + desired cost}}{\text{contribution per unit}}$[/tex]
[tex]$=\frac{480,000+240,000}{40}$[/tex]
= 18,000 units
Thus, the sales in units required to earn a profit of $ 240,000 are 18,000 units.
3. The sales in excess of the breakeven point would yield a profit on the contrary the sales below the breakeven point would result in a loss.
In the given sales in dollar = breakeven sales in units x selling price per unit
= 12,000 x 100
= $ 1,200,000
∴ the sales above $1,200,000 would result in a profit whereas the sales below $1,200,000 would result in loss.
The cost volume profit chart below indicates the profit, loss, breakeven at different sales levels :
Sales levels Result
1,200,000 Breakeven
1,000,000 Loss
800,000 Loss
400,000 Loss
200,000 Loss
4. The income on sale of 16,000 units is computed below :
Particulars Amount is $
Sales 1,600,000
Less : variable cost 960,000
Contribution 640,000
Less : Fixed cost 480,000
Profit 160,000
The break-even sales in units are calculated as follows:
What is Break Even Point ?Breakeven unit sales =
In this case, contribution per unit equals selling price per unit minus variable cost per unit.
The Cleaves Company's estimated break-even unit sales for the upcoming year are:
Breakeven unit sales =
Contribution per unit equals $100 minus $60.
= $ 40
The business therefore projects 12,000 units as its breakeven sales.
(2) 2. Sales must exceed the breakeven point in order to create a profit. The sales needed to achieve the desired profit, which is $240,000, can be calculated using the formula:
Ideally, sales would equal
= 18,000 units
Thus, the sales in units required to earn a profit of $ 240,000 are 18,000 units.
(3) 3. Sales beyond the breakeven threshold would result in a profit; sales below the breakeven point, on the other hand, would result in a loss.
Sales in dollars for the given period equal breakeven sales in units times selling price per unit.
= 12,000 x 100
= $ 1,200,000
Sales that exceed $1,200,000 generate a profit, whilst sales that go below that threshold generate a loss.
The following cost volume profit chart shows the profit, loss, and breakeven points at various sales levels:
Resulting sales levels
Breakeven is 1,000,000
1,000,000 Loss
800,000 Loss
400,000 Loss
200,000 Loss
4. The earnings from the sale of 16,000 units are calculated as follows:
Particulars The amount is $
Sales 1,600,000
Variable cost is 960,000 less.
640,000 dollars were contributed.
Less: 480,000 in fixed costs.
Gain of 160,000
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Theory Enterprises uses a standard cost system and prepared the following budget for May when 24,000 machine hours of activity were anticipated: variable overhead, $48,000; fixed overhead: $240,000. Actual data for May were: Standard machine hours allowed for output attained: 25,000 Actual machine hours worked: 24,000 Variable overhead incurred: $50,000 Fixed overhead incurred: $250,000 The variable-overhead spending and efficiency variances for Theory are: Variable-Overhead Spending Variance Variable-Overhead Efficiency Variance A. $ 0 $ 0 B. $ 0 $ 2,000 unfavorable C. $ 2,000 unfavorable $ 0 D. $ 2,000 favorable $ 2,000 unfavorable E. $ 2,000 unfavorable $ 2,000 favorable
Answer:
See below
Explanation:
a. Variable overhead spending variance
= AH × ( AR - SR)
Where
AH = Actual Hours worked = 24,000
AR = Actual variable overhead rate = $50,000
SR = Standard variable overhead rate = $48,000
Therefore,
Variable overhead spending variance
= 24,000 × ($50,000 - $48,000)
= $48,000
LUVFINANCE, Inc. is estimating its WACC. It is operating at its optimal capital structure. Its outstanding bonds have a 12 percent coupon, paid semiannually, a current maturity of 17 years, and sell for $1,162. It has 100,000 bonds outstanding. The firm can issue new 20-year maturity semiannual bonds at par but will incur flotation costs of $50 per bond. The firm could sell, at par, $100 preferred stock that pays a 12 percent annual dividend that is currently selling for $120. The firm currently has 1,000,000 shares of preferred stock outstanding. Rollins' beta is 0.94, the risk-free rate is 3.72 percent, and the market risk premium is 6 percent. The common stock currently sells for $100 a share and there are 5,000,000 shares outstanding. The firm's marginal tax rate is 40 percent.
Required:
What is the WACC?
Solution :
Given :
The cost of the debt is yield to the maturity of the bonds.
The yield on the bond is 10%
The tax rate is 40%
After the tax cost of the debt = 10 ( 1- 0.4 )
= 6 %
Add floatation cost at the rate of 5% = 11%
Cost of the preferred stock = [tex]$\frac{\text{dividend}}{\text{price}}$[/tex]
= [tex]$\frac{120}{12}$[/tex] = 10%
The cost of equity = risk free rate + β x market risk premium
= 3.72 + 0.94 x 6
= 9.36%
WACC is weighted average of the individual securities :
Particulars Value per No. of Market value Weight Cost of Product
security securities security
Bonds 1162 100,000 116,200,000 0.1578 11 1.73621298
Preferred 120 1,000,000 120,000,000 0.1629 10 1.6299918
stocks
Equity 100 5,000,000 500,000,000 0.6791 9.36 6.356968
736,200,000 1 WACC 9.7231730
Therefore, WACC of the firm is 9.72%
A privately owned summer camp for youngsters has the following data for a 12-week session: Charge per camper Fixed costs Variable cost per camper Capacity $480 per week $192,000 per session $320 per week 200campers (a) Develop the mathematical relationships for total cost and total revenue. (b) What is the total number of campers that will allow the camp to just break even
Answer:
Results are below.
Explanation:
Giving the following information:
Fixed costs= $192,000
Unitary variable cost= $320 per week
Selling price per unit= $480 per week
To calculate the total cost, we need to use the following formula:
Total cost= fixed costs + unitary variable cost*number of units
Total cost= 192,000 + 320*number of weeks
Now, the total revenue:
Total revenue= selling price per week*Number of weeks
Total revenue= 480*x
Finally, the break-even point in units:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 192,000 / (480 - 320)
Break-even point in units= 1,200 campers
An investor purchased a "par bond" for $300 with the principal $300. Over n = 5 years the bond will pay 8% coupon annually. Find the IRR of the cash flow stream (also called Yield to Maturity).
Answer:
8%
Explanation:
Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested
IRR can be calculated with a financial calculator
Cash flow in year 0 = $-300
Cash flow each year from year 1 to 4 = [tex]\frac{8}{100}[/tex] × $300 = $24
Cash flow in year 5 = $300 + 24 = $324
IRR = 8%
To find the IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
Olivia wants to buy some vacant land for investment purposes. She currently cannot afford the full purchase price. Instead, Olivia pays the landowner $8,000 to obtain an option to buy the land for $175,000 anytime in the next four years. Fourteen months after purchasing the option, Olivia sells the option for $10,000. What is the amount and character of Olivia's gain or loss
Answer:
$2,000 gain
Explanation:
Calculation to determine the amount and character of Olivia's gain or loss
Based on the information given we were told that she pays the landowner the amount of $8,000 in order for her to obtain an option to buy a land in which after purchasing the option she sells the option for the amount of $10,000 making her to gain the amount of $2,000.
Olivia's gain =$10,000-$8,000
Olivia's gain =$2,000
Therefore The amount and character of Olivia's gain will be $2,000
Answer: $2000
Explanation:
The amount and character of Olivia's gain or loss will be gotten by calculating the amount that Olivia paid the landowner $8,000 to obtain an option to buy the land and the amount she eventually sold the option. This will be:
= $10000 - $8000
= $2000
Therefore, she had a capital gain of $2000
central bank definition
Explanation:
a national bank that provides financial and banking services for its country's government and commercial banking system, as well as implementing the government's monetary policy and issuing currency.
Bob is a farmer and is required to use the accrual method. At the beginning of the year, Bob has inventory, including livestock held for resale, amounting to $10,000. During the year, Bob purchased livestock totaling $3,000. Bob's ending inventory was $4,000. Bob's net sales for the year totaled $17,000. What is Bob's gross profit for the current year
Answer:
$3,000
Explanation:
Gross Profit = Sales - Cost of Sales
Prepare a Trading Account for Bob to determine gross profit.
Piechocki Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May, the company budgeted for 6,100 units, but its actual level of activity was 6,050 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for May:
Data used in budgeting:
Fixed element per month Variable element per unit
Revenue - $32.60
Direct labor $0 $3.90
Direct materials 0 12.10
Manufacturing overhead 33,400 1.80
Selling and administrative expenses 28,300 0.40
Total expenses $61,700 $18.20
Actual results for May:
Revenue $200,564
Direct labor $22,786
Direct materials $73,824
Manufacturing overhead $43,922
Selling and administrative expenses $31,896
The direct labor in the planning budget for May would be closest to:_________
a. $23,010
b. $22,633
c. $22,786
d. $23,166
Answer:
$23,595
Explanation:
The computation of the direct labor in the planning budget is shown below:
Direct labor in planning budget is
= Actual level of Activity × Direct labor per unit
= 6,050 × $3.90
= $23,595
For calculating the direct labor in the planning budget we simply multiplied the actual activity level by the direct labor per unit
This is the answer but the same is not provided in the given options
At the end of 2009, the following information is available for Clobes Company, Snyder Company, and Welz Company (you must show your calculations to receive full credit): Required: Which company has the highest level of financial risk? Using an appropriate ratio, support your answer. Which company is the most profitable from the owners' perspective? Using an appropriate ratio, support your answer. (3) Which company is getting the greatest return on assets? Show calculations.
Answer:
Answer is explained in the explanation section below.
Explanation:
Note: This question is incomplete and lacks necessary data to solve for this question. However I have found similar question on the internet and I will be using that data. Besides, I have attached the data used in the attachment below.
Solution:
1. The debt-to-equity ratio is the best way to assess financial risk. A higher debt-to-equity ratio indicates a higher level of financial risk. This ratio represents the willingness of the equity of the owners to fulfil their obligations.
Formula used:
Debt-to-equity ratio = Total liabilities divided by owner's equity
For Clobes:
Total liabilities = 100,000
Owners' equity = 200,000
Debt-to-equity ratio = 100000/200000 = 0.5
For Snyder:
Total liabilities = 300,000
Owners' equity = 200,000
Debt-to-equity ratio = 300000/200000 = 1.5
For Welz:
Total liabilities = 300,000
Owners' equity = 100,000
Debt-to-equity ratio = 300000/100000 = 3
Welz faces the greatest financial risk because it has the highest debt-to-equity ratio. It has a debt-to-equity ratio of three. Even though it depends on the industry, a company's debt-to-equity ratio should be between 1 and 1.5 if it is considered optimal. In this case, Welz's financial risk is considerably higher.
2. calculate Return on Equity(ROE)
Formula used:
ROE = Net income / Owner's equity
For Clobes:
Net income = 25,000
Owners' equity = 200,000
ROE = 25,000 / 200000 = 0.125
For Snyder:
Net income = 30,000
Owners' equity = 200,000
ROE = 30000 / 200000 = 0.15
For Welz:
Net income = 20,000
Owners' equity = 200,000
ROE = 20000 / 100000 = 0.2
Welz has the highest return of equity (ROE) of 0.2.
As a result, Welz is the most profitable company.
3. Return on assets:
Formula used
Return on Assets = Net income / Total assets
For Clobes:
Net income = 25,000
Total assets = 300,000
Return on Assets = 25,000 / 300000 = 0.08
For Snyder:
Net income = 30,000
Total assets = 500000
Return on Assets = 30000 / 500000 = 0.06
For Welz:
Net income = 20,000
Total assets = 400,000
Return on Assets = 20000 / 400000 = 0.05
Hence,
Clobes has the highest return on assets, which is 0.08.
Marigold Corp. took a physical inventory on December 31 and determined that goods costing $155,000 were on hand. Not included in the physical count were $28,000 of goods purchased from Pelzer Corporation, FOB shipping point, and $21,800 of goods sold to Alvarez Company for $30,400, FOB destination. Both the Pelzer purchase and the Alvarez sale were in transit at year-end. What amount should Marigold report as its December 31 inventory
Answer: $204,800
Explanation:
When a good is shipped FOB shipping point, it means that the buyer assumes responsibility for the goods as soon as the goods reach the place they will be shipped from. The purchase from Pelzer should therefore be included in inventory because it has already been shipped.
A good shipped FOB Destination means that the buyer only assumes responsibility after the goods have been delivered to them. As the sale to Alvarez was still in transit, it is still the responsibility of Marigold and should be included in inventory.
Inventory is therefore:
= 155,000 + 28,000 + 21,800
= $204,800
Suppose a monopolist is producing a level of output such that MR > MC. Which of the following best describes what will happen as the firm moves to its profit-maximizing equilibrium? A) Marginal revenue will rise and marginal cost will fall. B) Marginal cost and marginal revenue will both rise. C) Marginal revenue will fall and marginal cost will rise. D) Marginal cost and marginal revenue will both fall.
Answer: C) Marginal revenue will fall and marginal cost will rise.
Explanation:
The profit-maximizing equilibrium is the production point where the Marginal Revenue equals the Marginal cost.
As the monopolist moves towards this point, they will see their marginal costs increase because they will be producing more goods.
For a monopolist to sell more goods however, they will need to reduce their prices. This means that Marginal revenue will come down.
Marginal revenue will keep decreasing and Marginal cost will keep increasing until both of them become equal to each other.
Bond X is a premium bond making semiannual payments. The bond has a coupon rate of 9.2%, a YTM of 7.2%, and has 17 years to maturity. Bond Y is a discount bond making semiannual payments. This bond has a coupon rate of 7.2%, a YTM of 9.2%, and also has 17 years to maturity. Assume the interest rates remain unchanged and both bonds have a par value of $1,000.
1. What are the prices of these bonds today?
2. What do you expect the prices of these bonds to be in one year?
3. What do you expect the prices of these bonds to be in three years?
4. What do you expect the prices of these bonds to be in eight years?
5. What do you expect the prices of these bonds to be in 12 years?
6. What do you expect the prices of these bonds to be in 17 years?
Answer:
I used an Excel spreadsheet to calculate the answers (see attached file):
1. What are the prices of these bonds today?
bond X = $1,194
bond Y = $830
2. What do you expect the prices of these bonds to be in one year?
bond X = $1,194
bond Y = $830
3. What do you expect the prices of these bonds to be in three years?
bond X = $1,175
bond Y = $844
4. What do you expect the prices of these bonds to be in eight years?
bond X = $1,131
bond Y = $879
5. What do you expect the prices of these bonds to be in 12 years?
bond X = $1,083
bond Y = $921
6. What do you expect the prices of these bonds to be in 17 years?
bond X = $1,046
bond Y = $1,036
Describe good cash management practices involving inventory purchases. (Check all that apply.) Multiple select question. Buyers should take advantage of early payment discounts. Inventory should be purchased with cash whenever possible. Invoices should be paid on the last day of the discount period. Invoices should be paid on the first day of the discount period.
Answer:
Invoices should be paid on the last day of the discount period.
Buyers should take advantage of early payment discounts.
Explanation:
Cash management can be regarded as
process involvinh collection and management of cash flows. Cash management is very crucial for individuals as well as companies as far as financial stability is concerned. It should be noted that good cash management practices involving inventory purchases;
✓Invoices should be paid on the last day of the discount period.
✓Buyers should take advantage of early payment discounts.
Good cash management practices involving inventory purchases include taking advantage of early payment discounts, negotiating payment terms with suppliers, purchasing inventory in bulk, tracking your inventory levels closely, and using a cash flow management tool.
Here are the specific practices that you should do:
Take advantage of early payment discounts. This is a great way to save money on inventory purchases. If you can pay your invoices within the discount period, you can usually save 1% to 3% on the purchase price.
Negotiate payment terms with suppliers. You may be able to get better payment terms from your suppliers, such as longer payment periods or discounts for paying early. This can help you improve your cash flow and save money on inventory purchases.
Track your inventory levels closely. This will help you avoid overstocking or understocking inventory. Overstocking can lead to wasted cash while understocking can lead to lost sales.
Use a cash flow management tool. This can help you track your cash flow and identify areas where you can improve. There are many different cash flow management tools available, so you can find one that fits your needs.
By following these good cash management practices, you can improve your cash flow and save money on inventory purchases. This can help you improve your business's bottom line and make it more successful.
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The information below pertains to Barkley Company for 2015.
Net income for the year $2,240,000
9% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock 2,112,000
6% convertible, cumulative preferred stock, $100 par value; each share is convertible into 3 shares of common stock 4,707,000
Common stock, $10 par value 6,959,000
Tax rate for 2015 45%
Average market price of common stock $25 per share
There were no changes during 2015 in the number of common shares, preferred shares, or convertible bonds outstanding. There is no treasury stock. The company also has common stock options (granted in a prior year) to purchase 75,800 shares of common stock at $15 per share.
(a) Compute basic earnings per share for 2015. (Round answer to 2 decimal places, e.g. $2.55.)
Basic earnings per share
$
(b) Compute diluted earnings per share for 2015. (Round answer to 2 decimal places, e.g. $2.55.)
Diluted earnings per share
$
Information concerning a product produced by Ender Company appears here: Sales price per unit $ 164 Variable cost per unit $ 94 Total annual fixed manufacturing and operating costs $ 434,000 Required Determine the following: Contribution margin per unit. Number of units that Ender must sell to break even. Sales level in units that Ender must reach to earn a profit of $182,000. Determine the margin of safety in units, sales dollars, and as a percentage.
Answer:
Results are below.
Explanation:
To calculate the unitary contribution margin, we need to use the following formula:
Contribution margin= selling price - unitary variable cost
Contribution margin= 164 - 94
Contribution margin= $70
Now, to determine the break-even point in units and sales dollars, we need to use the following formulas:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 434,000 / 70
Break-even point in units= 6,200
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 434,000 / (70 / 164)
Break-even point (dollars)= $1,016,800
The desired profit is $182,000:
Break-even point in units= (fixed costs + desired profit) / contribution margin per unit
Break-even point in units= (434,000 + 182,000) / 70
Break-even point in units= 8,800
Finally, the margin of safety in units, sales dollars, and as a percentage:
Margin of safety (units)= (current sales level - break-even point)
Margin of safety (units)= 8,800 - 6,200
Margin of safety (units)= 2,600
Margin of safety (dollars)= (8,800*164) - 1,016,800
Margin of safety (dollars)= $426,400
Margin of safety ratio= (current sales level - break-even point)/current sales level
Margin of safety ratio= 426,400 / 1,443,200
Margin of safety ratio= 0.295
Equipment was sold for $50,000. The equipment was originally purchased for $85,000. At the time of the sale, the equipment had accumulated depreciation of $30,000. Calculate the gain or loss to be recorded on the sale of equipment. Multiple Choice Gain of $5,000. Loss of $35,000. Gain of $20,000. Loss of $5,000.
Answer:
Loss of $5,000
Explanation:
loss to be recorded on the sale of equipment is $5,000
Windsor, Inc. just began business and made the following four inventory purchases in June:
June 1 129 units $890 June 10 172 units 1340 June 15 172 units 1440 June 28 129 units 1140 $4810
A physical count of merchandise inventory (rounded to whole dollar) on June 30 reveals that there are 180 units on hand. The inventory method which results in the highest gross profit for June is:_______.
a. the FIFO method.
b. the LIFO method.
c. the average cost method.
d. not determinable.
Answer:
c. the average cost method.
Explanation:
Windsor INC. purchased inventory during the month of June as follows:
June 1 129 units at $890
June 10 172 units at $1340
June 15 172 units at $1440
June 28 129 units at $ 1140
and at the end of the period, there are 180 units on hand.
In order to get highest gross profit the closing sock should be the highest, accordingly the value of inventory at hand should as as follows under different method explain below:
Under FIFO method the inventory first enter into the enterprise is available for sale at first so the inventory of 180 units at end should be values at the last price mentioned in the question i.e $1140, therefore the value amounts to $1140*180 units=$205200
Under LIFO method, likewise the last entered inventory will be available for sale and the inventory at the end of period will be valued at the price at which the inventory first bought i.e $890, therefore the value amounts to 180 units*$890=$160200
Under Average cost method the effect of differential price is distributed over the quantity bough during a period so that the company remains in ineffective condition during the period from the price change
Average cost per unit= (129*$890 +172*$1340+ 172*$1440+129*$1140)/602 units
=$1229.29
and for the 180 units the value amounts to 180*$122.29=$221271.429
so, as per explanation given above, it is certain that the highest value will be in average cost method.
The correct option is - c. the average cost method.
Practice Brief Exercise 02 Swifty Corporation has 44,000 shares of $10 par value common stock outstanding. It declares a 10% stock dividend on December 1 when the market price per share is $19. The dividend shares are issued on December 31. Prepare the entries for the declaration and issuance of the stock dividend.
Answer:
Dec-31
Dr Stock Dividend $83,600
Cr Stock Dividend Distributable $44,000
Cr Paid - in - capital in excess of Par (44,000 * m
Dec-31
Dr Stock Dividend Distributable $44,000
Cr Common stock $44,000
Explanation:
Preparation of the entries for the declaration and issuance of the stock dividend
Dec-31
Stock Dividend $83,600
(44,000* 10% * $19)
Cr Stock Dividend Distributable $44,000
($44,000 *10% *$10)
Cr Paid - in - capital in excess of Par (44,000 * 10% *$9) $39,600
($19+$10=$9)
(Being to record Stock dividend declared)
Dec-31
Dr Stock Dividend Distributable $44,000
Cr Common stock $44,000
(Being to record issuance of the stock dividend)
Curtiss Construction Company, Inc., entered into a fixed-price contract with Axelrod Associates on July 1, 2021, to construct a four-story office building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,660,000. The building was completed on December 31, 2023. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under the contract were as follows:
At 12-31-2021 At 12-31-2022 At 12-31-2023
Percentage of completion 10% 60% 100%
Costs incurred to date $370,000 $2,982,000 $5,031,000
Estimated costs to complete 3,330,000 1,988,000 0
Billings to Axelrod, to date 731,000 2,390,000 4,660,000
Required:
a. Compute gross profit or loss to be recognized as a result of this contract for each of the three years.
b. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute gross profit or loss to be recognized in each of the three years.
c. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute the amount to be shown in the balance sheet at the end of 2021 and 2022 as either cost in excess of billings or billings in excess of costs.
Answer:
Explanation:
Curtiss Construction Company, Inc., entered into a fixed-price contract with Axelrod Associates on July 1, 2021, to construct a four-story office building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,420,000. Curtiss concludes that the contract does not qualify for revenue recognition over time. The building was completed on December 31, 2023. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under the contract were as follows: Percentage of completion Costs incurred to date Estimated costs to complete Billings to Axelrod, to date At 12-31-2021 At 12-31-2022 At 12-31-2023 10% 60% 100% $ 366,000 $2,814,000 $4,747,000 3, 294,000 1,876,000 727,000 2,310,000 4,420,000
Required:
1. Compute gross profit or loss to be recognized as a result of this contract for each of the three years.
2. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute gross profit or loss to be recognized in each of the three years.
3. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute the amount to be shown in the balance sheet at the end of 2021 and 2022 as either cost in excess of billings or billings in excess of costs.
is it possible for a company to be too liquid
Answer:
yes it is possible ......
Answer:
A company can have too much liquidity, which may be a sign that it's holding onto cash that could be invested. In a sense, even borrowing money is another typical source of liquidity for businesses. To meet its obligations, the ability to take out loans will be a factor in its liquidity.
Explanation:
Nancy, the owner of a very successful hotel chain in the Southeast, is exploring the possibility of expanding the chain into a city in the Northeast. She incurs $35,000 of expenses associated with this investigation. Based on the regulatory environment for hotels in the city, she decides not to expand. During the year, she also investigates opening a restaurant that will be part of a national restaurant chain. Her expenses for this are $53,000. The restaurant begins operations on September 1.
Determine the amount Nancy can deduct in the current year for investigating these two businesses.
Answer:
$3,133.
As regard to opening a restaurant, investigation expense = 53,000 - 2000 = $51,000.
Explanation:
Before diving straight into the solution to this problem, let's take out some of the parameters given in the question above.
=> Nancy incurs $35,000 of expenses associated with the investigation of the possibility of expanding the chain into a city in the Northeast.
=> Nancy expenses for investigates opening a restaurant that will be part of a national restaurant chain are $53,000.
The first thing to do right now is to determine the value for the investigation as regard to the opening of a restaurant = [ 2000 × (51,000/180 months) × 4] = $3,133.
The next thing is to determine the value for the deduction which is available. This can be done below as:
The amount Nancy can deduct in the current year for investigating these two businesses = 5000 - [ 53000 - 50000] = $2, 000
As regard to opening a restaurant, investigation expense = 53,000 - 2000 = $51,000.
Because testing of nuclear bombs was halted internationally in 1992, the Department of Energy has developed a laser system that allows engineers to simulate (in a laboratory) conditions in a thermo-nuclear reaction. Due to soaring cost overruns, a congressional committee undertook an investigation and discovered that the estimated development cost of the project increased at an average rate of 2% per six-months over a 5-year period. If the original cost was estimated to be $3.1 billion 5 years ago, what is the expected cost today?
Answer:
The estimated development cost of the project will increase from the original cost of $3.1 billion 5 years ago to $3.7727 billion today.
Explanation:
Data and Calculations:
Original estimated development cost = $3.1 billion
Average rate of interest = 2% per six months or 4% per year (2 * 2%)
Period of project = 5 years using 4% or 10 using 2%
Using a future value factor of 1.217 from a future value table at 4% per year for 5 years:
The expected cost today = $3.1 billion * 1.217 = $3.7727 billion
Using an online financial calculator:
Results:
FV = $3,778,882,701.98
Total Interest $678,882,701.98
N (# of periods) 10
I/Y (Interest per year) 4
PV (Present Value) $3,100,000,000
PMT (Periodic Payment) 0
Settings
P/Y (# of periods per year) 2
C/Y (# of times interest compound per year) 2
Muecke Inc. is working on its cash budget for April. The budgeted beginning cash balance is $40,000. Budgeted cash receipts total $150,000 and budgeted cash disbursements total $158,000. The desired ending cash balance is $50,000. To attain its desired ending cash balance for April, the company needs to borrow: Group of answer choices $18,000 $0 $50,000 $82,000
Answer:
See
Explanation:
common stock definition.
Answer:
Common stock is a security that represents ownership in a corporation.
Explanation:
Holders of common stock elect the board of directors and vote on corporate policies.
Find the sum of the series 2 + 5 + 8 + ... + 182
Answer:
first term(a)=2
common diff.(d)=5-2=3
lqst term(l)=182
sum of terms (sn)=?
Explanation:
we have,
l=a+(n-1)d
182=2+(n-1)×3
182-2=3n-3
180=3n-3
180-3=3n
177=3n
177÷3=n
59=n
n=59
i hope this solve help you
If a clothing manufacturer purchased a computerized sewing machine from an American company, then consumer spending and GDP both increase. investment and GDP both increase. consumer spending increases and GDP decreases. investment increases and GDP decreases. consumer spending and investment both increase.
Answer:
Investment and GDP both increase.
Explanation:
GDP(Gross Domestic Product)can be regarded as the overall value of goods/services that is been manufactured arround geographic boundaries of a particular country at a particular period of time ( year). It gives indication of economics performance. Invest can be regarded as item/asste gotten with hope of giving income to the owner. Hence, from the question, If a clothing manufacturer purchased a computerized sewing machine from an American company, then Investment and GDP both increase.
Inventory records for Dunbar Incorporated revealed the following:
Date Transaction Number Unit
of Units Cost
Apr. 1 Beginning inventory 550 $2.33
Apr. 20 Purchase 310 2.68
Dunbar sold 560 units of inventory during the month. Ending inventory assuming weighted-average cost would be:__________.
a. $737.
b. $694.
c. $817.
d. $752.
Answer:
a. $737.
Explanation:
The computation of the ending inventory using weighted average cost is shown below:
But before that first determine the average cost per unit
= (Beginning cost + purchase cost) ÷ (Beginning units + purchased units)
= (550 × $2.33 + 310 × $2.68) ÷ (550 units + 310 units)
= ($1,281.5 + $830.8) ÷ (860 units)
= $2.46
Now the ending inventory is
= (860 units - 560 units) × $2.46
= $737
Bruce Corporation makes four products in a single facility. These products have the following unit product costs:
Products
A B C D
Direct materials $16.10 $20.00 $13.00 $15.70
Direct labor 18.10 21.50 15.90 9.90
Variable manufacturing overhead 4.90 6.10 8.60 5.60
Fixed manufacturing overhead 28.00 14.90 15.00 17.00
Unit product cost 67.10 62.50 52.50 48.20
Additional data concerning these products are listed below.
Products
A B C D
Grinding minutes per unit 2.25 1.35 0.95 0.55
Selling price per unit $81.20 $73.60 $70.40 $65.10
Variable selling cost per unit $3.10 $3.60 $3.30 $4.00
Monthly demand in units 3,500 2,500 2,500 4,500
The grinding machines are potentially the constraint in the production facility. A total of 10,500 minutes are available per month on these machines. Direct labor is a variable cost in this company.
Required:
Which product makes the MOST profitable use of the grinding machines?
Answer:
Product D
Explanation:
Calculation to determine Which product makes the MOST profitable use of the grinding machines
First step is to calculate the Variable cost per unit
Products
A B C D
Direct materials $16.10 $20.00 $13.00 $15.70
Add Direct labor 18.10 21.50 15.90 9.90
Add Variable manufacturing overhead 4.90 6.10 8.60 5.60
Add Variable selling cost per unit $3.10 $3.60 $3.30 $4.00
Variable cost per unit $42.20 $51.60 $40.80 $35.20
Now let calculate the product that makes the MOST profitable use of the grinding machines
Selling price per unit $81.20 $73.60 $70.40 $65.10
Less Variable cost per unit $42.20 $51.60 $40.80 $35.20
=Contribution margin per unit $39 $22 $29.60 $29.90
÷Grinding minutes per unit 2.25 1.35 0.95 0.55
=Contribution per grinding minutes $17.33 $16.30 $31.16 $54.36
Therefore Based on the above calculation the product that makes the MOST profitable use of the grinding machines is PRODUCT D because it has the highest Contribution per grinding minutes of the amount of $54.36
Suppose that a hot dog vendor uses a cart (K) and his time (L) to make and sell hot dogs. The vendor's production function is , where Q is the number of hot dogs per day. Suppose that the rental on hot dog carts is $50 per day and that the vendor wants to produce 500 hot dogs per day. The demand for labor is ____.
Answer:
L = 2084.75 W^-0.3
Explanation:
The computation of the demand of the labor is shown below:
At the optimum input
As we know that
MRTS = MPL ÷ MPK = w ÷ r
0.7(K ÷ L)^0.3 ÷ 0.3(L ÷ K)^0.7 = w ÷ 50
7K ÷ 3L = w ÷ 50
K = (3 ÷ 350)wL
Now apply the production function
Q = K^0.3L^0.7
500 = ((3 ÷ 350)wL)^0.3 L^0.7
500 = (3 ÷ 350)^0.3 × w^0.3 × L
L = 2084.75 × w^-0.3.
Presented below is a condensed version of the comparative balance sheets for Ravensclaw Corporation for the last two years at December 31.
2019 2018
Cash $230,100 $101,400
Accounts receivable 234,000 240,500
Investments 67,600 96,200
Equipment 387,400 312,000
Accumulated Depreciation-Equipment (137,800 ) (115,700 )
Current liabilities 174,200 196,300
Common stock 208,000 208,000
Retained earnings 399,100 230,100
Additional information:
Investments were sold at a loss of $13,000; no equipment was sold; cash dividends paid were $39,000; and net income was $208,000.
Required:
Create a Statement of Cash Flows for 2019.
Answer:
Ravensclaw Corporation
Statement of Cash Flows for the year ended December 31, 2019:
Net income $208,000
Add non-cash expense:
Depreciation expense 22,100
Loss from sale of investment 13,000
Cash from operations $243,100
Adjustments of working capital:
Accounts receivable $6,500
Current liabilities -22,100
Net cash from operations $227,500
Investing activities:
Cash from investment sale 15,600
Equipment -75,400
Financing activities:
Cash dividends paid -39,000
Net cash flows $128,700
Explanation:
a) Data and Calculations:
2019 2018 Differences
Cash $230,100 $101,400 +$128,700
Accounts receivable 234,000 240,500 -$6,500
Investments 67,600 96,200 -$28,600
Equipment 387,400 312,000 +$75,400
Accumulated Depreciation-
Equipment (137,800) (115,700) +$22,100 Depreciation Exp.
Current liabilities 174,200 196,300 -$22,100
Common stock 208,000 208,000 $0
Retained earnings 399,100 230,100 +$169,000
Cash dividends +$39,000
Net income = $208,000 ($169,000 + $39,000)
Cash from sold investments = $15,600 ($28,600 - $13,000)