Answer:
d. decrease, and U.S. net capital outflow decreases.
Explanation:
net exports = total exports - total imports
in this case, imports increase, so net exports will decrease
The net capital outflow represents the money being invested in a country. If foreign investors invest in the US economy then the net capital outflow will increase. But if US investors invest in foreign economies, the net capital outflow will decrease. In this case, the US company paid the foreign company in US dollars, therefore, the foreign company now has a US asset (US dollars).
A project analysis using the net present value method indicates that the present value of cash inflows is $120,000, and the total amount of investment required at the start of the project is $100,000. Which of the following statements best describes the results of the project analysis?
a. The project should be rejected because the actual rate of return expected from the project is less than the minimum desired rate of return.
b. The project should be accepted because the actual rate of return expected from the project is more than the minimum desired rate of return.
c. The project should be rejected because the actual rate of return expected from the project is more than the minimum desired rate of return.
d. The project should be accepted because the actual rate of return expected from the project is less than the minimum desired rate of return.
Answer:
The answer is B.
Explanation:
Cost of investment was $100,000
Present value of all the cash inflows = $120,000
Profit = $20,000 ($120,000 - $100,000)
Since the present value of all the cash inflows is greater than the initial cost of investment, the capital project should be accepted because the firm will be better off and shareholders' wealth will be increased.
The expected rate of return for the project is $20,000/$100,000
0.2 or 20%
You are the financial manager for a recreation center that has signed an option to purchase new elliptical machines for $22,000 in two years. If you have an investment opportunity that guarantees 7% interest, how much must you invest to have the necessary funds to purchase the elliptical machines
Answer:
$19,215.65
Explanation:
To the determine the amount to be invested, we have to find the present value of $22,000 at 7%
P= FV ( 1 + r) ^-n
FV = Future value = $22,000
P = Present value
R = interest rate = 7%
N = number of years = 2
$22,000(1.07)^-2 = $19,215.65
I hope my answer helps you
Quest Inc., a U.S. firm, and Real Treks, Ltd., a Canadian firm, enter into a contract that does not have a forum selection or choice-of-law clause. Litigation between Quest and Real Treks involving this contract may occur in
Answer: c. Canada, the United States, or both.
Explanation:
Here is the complete question:
Quest Inc., a U.S. firm, and Real Treks, Ltd., a Canadian firm, enter into a contract that does not have a forum-selection or choice-of-law clause. Litigation between Quest and Real Treks involving this contract may occur in
a. an online forum only.
b. an international, United Nations tribunal only.
c. Canada, the United States, or both.
d. Canada or the United States, but not both.
A choice of law clause means that the law of a particular jurisdiction will be used to govern a dispute that occurs without taking into consideration where the dispute take place and a forum clause has to do with the selection of venue for a case or litigation.
In this case, Quest Inc., a U.S. firm, and Real Treks, Ltd., a Canadian firm, enter into a contract which does not have a forum selection or choice-of-law clause thereby litigation can take place in Canada, the United States, or both.
Crowl Corporation is investigating automating a process by purchasing a machine for exist793, 800 that would have a 9 year useful life and no salvage value. By automating the process, the company would save exist133,000 per year in cash operating costs. The new machine would replace some old equipment that would be sold for scrap now. yielding exist21, 200. The annual depreciation on the new machine would be exist88, 200. The simple rate of return on the investment is closest to (Ignore income taxes.):
a) 5.80%
b) 11.12%
c) 16.72%
d) 5.12%
Answer:
5.80% , option A is correct
Explanation:
The formula for the simple rate of return on the investment=annualprofit/net amount invested
annual profit amount=savings in cash operating costs-annual depreciation on the new machine=$133,000-$88, 200=$ 44,800.00
net amount of investment=pruchase cost of new machine-the scrap value of the old machine=$793, 800-$21, 200=$ 772,600.00
simple rate of return on investment=$ 44,800.00/$ 772,600.00=5.80%
Suppose a consumer has the following utility function defined over the 2 goods X and Y: a. If this consumer originally consumed 10 units of X and 24 units of Y, and if the consumption of X were increased to 12 units, how much Y would be would the consumer be willing to give up and maintain the initial level of satisfaction
Answer:
Y = 22 units (Approx)
Explanation:
Note:
The utility function is not given, the utility function is as follows.
U(X ,Y) = 2X + [tex]16Y^{1/2}[/tex]
So,
U(X ,Y) = 2X + [tex]16Y^{1/2}[/tex]
When X = 10 and Y = 24 units
U(10 ,24) = 2(10) + [tex]16(24)^{1/2}[/tex]
U(10 ,24) = 98.4
U(10 ,24) = 99 Units (Approx)
So,
U(X ,Y) = 2X + [tex]16Y^{1/2}[/tex]
When X = 12 Find Y
99 units = 2(12) + [tex]16Y^{1/2}[/tex]
75 = [tex]16Y^{1/2}[/tex]
Y = 21.97
Y = 22 units (Approx)
Cane Company manufactures two products called Alpha and Beta that sell for $195 and $150, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 123,000 units of each product. Its unit costs for each product at this level of activity are given below
Alpha Beta
Direct materials $40 $15
Direct labor 34 28
Variable manufacturing overhead 22 20
Traceable fixed manufacturing overhead 30 33
Variable selling expenses 27 23
Common fixed expenses 30 25
Total cost per unit $183 $144
The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are deemed unavoidable and have been allocated to products based on sales dollars.
1) What contribution margin per pound of raw material is earned by Alpha and Beta?
2) Assume that Cane's customers would buy a maximum of 95,000 units of Alpha and 75,000 units of Beta. Also, assume that the company's raw material available for production is limited to 245,000 pounds. How many units of each product should Cane produce to maximize its profits?
3) Assume that Cane's customers would buy a maximum of 95,000 units of Alpha and 75,000 units of Beta. Also, assume that the company's raw material available for production is limited to 245,000 pounds. What is the maximum contribution margin Cane Company can earn given the limited quantity of raw materials?
4) Assume that Cane's customers would buy a maximum of 95,000 units of Alpha and 75,000 units of Beta. Also, assume that the company's raw material available for production is limited to 245,000 pounds. Up to how much should it be willing to pay per pound for additional raw materials?
Answer:
Explanation:
Alpha = $195
Beta = $150
total production capacity = 123,000 pounds
raw materials = $5 per pound
Production costs per unit Alpha Beta
direct materials $40 $15
direct labor $34 $28
variable manufacturing overhead $22 $20
fixed manufacturing overhead $30 $33
variable selling expenses $27 $23
common fixed expenses $30 $25
total cost per unit $183 $144
1) What contribution margin per pound of raw material is earned by Alpha and Beta?
Alpha Beta
contribution margin $72 $64
contribution margin per pound $9 $21.33
2) Assume that Cane's customers would buy a maximum of 95,000 units of Alpha and 75,000 units of Beta. Also, assume that the company's raw material available for production is limited to 245,000 pounds. How many units of each product should Cane produce to maximize its profits?
Alpha Beta
contribution margin $72 $64
contribution margin per pound $9 $21.33
production (in units) 2,500 75,000
profits $30,000 $450,000
total profits $480,000
3) Assume that Cane's customers would buy a maximum of 95,000 units of Alpha and 75,000 units of Beta. Also, assume that the company's raw material available for production is limited to 245,000 pounds. What is the maximum contribution margin Cane Company can earn given the limited quantity of raw materials?
Alpha Beta
contribution margin $72 $64
contribution margin per pound $9 $21.33
production (in units) 2,500 75,000
contribution margin $180,000 $4,800,000
total contribution margin $4,980,000
4) Assume that Cane's customers would buy a maximum of 95,000 units of Alpha and 75,000 units of Beta. Also, assume that the company's raw material available for production is limited to 245,000 pounds. Up to how much should it be willing to pay per pound for additional raw materials?
If it wants to increase the production of Alpha, it could pay as much as ($195 - $183) / 8 = $1.50 extra per pound if it wants to maximize profits. Maximum price = $6.50 per pound. At this point, marginal revenue = price.
Seven months ago, you purchased 140 shares of Mitchum Trading for $50.07 per share. The stock pays a quarterly dividend of $.17 per share and is currently priced at $51.03. What is the total dividend income you received
Answer:
The answer is $47.6
Explanation:
Solution
Given that
You bought = 140 shares of Mitchum Trading for $50.07 per share
The quarterly dividend = $.17
The current price = $51.03
So we find the total dividend income you received which is computed below:
The total dividend received = (0.17 * 2) * 140
=(0.34) * 140
= $47.6
Therefore the total dividend of income that you received is $47.6
The following unadjusted trial balance contains the accounts and balances of Dylan Delivery Company as of December 31, 2010, its first year of operations.
1. Use the following information about the company's adjustments to complete a 10- column work sheet for Dylan Delivery Company.
a. Unrecorded depreciation on the trucks at the end of the year is $40,000.
b. An additional $1,000 of salaries must be accrued at year-end.
c. The cost of unused office supplies still available at year-end is $2,000.
2. Prepare the year-end closing entries for Dylan Delivery Company, and determine the capital amount to be reported on its year-end balance sheet.
Account Title Debit Credit
Cash $16,000
Accounts receivable 34,000
Office supplies 5,000
Trucks 350,000
Accumulated depreciation—Trucks $80,000
Land 160,000
Accounts payable 124,000
Salaries payable 5,000
S. Dylan Capital 307,000
S. Dylan withdrawals 34,000
Delivery fees earned 263,000
Depreciation expense—Truck 40,000
Salaries expense 110,000
Office supplies expense 15,000
Repairs expense—trucks 15,000
Totals $779,000 $779,000
Answer:
Dylan Delivery Company
1. 10-Column Worksheet (see attachment)
2. Closing Journal Entries at December 31, 2010:
Date Description Debit Credit
Depreciation expense - Truck 80,000
Salaries Expense 111,000
Office supplies expense 18,000
Repairs expense- trucks 15,000
Income Summary 224,000
To close expenses to the Income Summary.
Date Description Debit Credit
Income Summary 263,000
Delivery fees 263,000
To close revenue to the Income Summary.
Date Description Debit Credit
Net Income 39,000
Retained Earnings 39,000
To close the net income to retained earnings.
2b) Capital to be reported on balance sheet as at December 31, 2010:
S. Dylan Capital $307,000
Retained Earnings 39,000
S. Dylan withdrawals (34,000)
Net Capital $312,000
Explanation:
a) A 10-column worksheet is a tool used by accountants to close the temporary accounts, after necessary adjustments, and then extract a balance sheet. It comprises two columns (debit and credit) for each of the following: Unadjusted Trial Balance, Adjusting Entries, Adjusted Trial Balance, Income Statement, and Balance Sheet.
b) A closing entry is a journal entry that is made at the end of an accounting period to transfer balances from a temporary account to a permanent account. The four basic steps in the closing process are: Closing the revenue accounts—transferring the credit balances in the revenue accounts to a clearing account called Income Summary. Closing the expense accounts—transferring the debit balances in the expense accounts to a clearing account called Income Summary. Extracting a balance between the revenue accounts and the expense accounts, called the net income or loss. Closing the net income or loss to the Retained Earnings.
The company can choose to buy a back-up machine for Step C for an additional $20,000. The back up would also have a reliability of 0.915, just like the one that is presently used. If they decide to get this back-up machine, what will the new reliability of the system be? Assume that once a machine malfunctions, the process continues to produce product, acceptable and defective. Use THREE decimal places in you calculations.
The complete question is:
A certain company produces 10,000 tables per year in a three-step process. The three steps in the process employ machines with the reliabilities listed here:
Step A - 0.987 Step B – 0.979 Step C – 0.915
Answer:
New reliability= 0.9593 ~ 0.959
Explanation:
Reliability is used in manufacturing process to ensure that a process produces the same level of output consistently. A process is reliable if it achieves the same results everytime.
Reliability can be applied to individuals, data, processes, and products.
In this instance we are to calculate the new reliability of the backup system.
Reliability of step C is 0.915
New reliability= 1 - (1- 0.915)^2
New reliability= 0.992775
Multiply this value by the reliability in step A and B to get system reliability
System reliability= 0.992775 * 0.987 * 0.979
System reliability= 0.9593
During Bruce Company’s first year of operations, the company purchased $4,300 of supplies. At year-end, a physical count of the supplies on hand revealed that $1,825 of unused supplies were available for future use. How will the related adjusting entry affect the company’s financial statements?
Answer:
Supplies Used = $2475
Explanation:
Bruce Company
Supplies Purchases $4,300
Supplies on hand $1,825
Supplies Used = $ 4300- $ 1825 = $2475
The amount of Supplies used ( $ 4300- $ 1825 = $2475) will be shown in the income statement as an expense and the amount of unused supplies or Supplies on hand $1,825 will be shown in the Balance sheet as an asset account. The both of which will total the supplies actually purchased.
The relating adjusting entry will be
Supplies Expense $ 2475 Debit
Supplies Account $ 2475 Credit
This means the supplies of the amount $ 2475 have been used and is recorded as an expense in the income statement. It will be deducted from the gross profit. The remaining amount $ 1825 is for future use so recorded as an asset in the Balance Sheet and added to the total assets.
Determine the total equivalent units for direct materials, assuming that the first-in, first-out method is used to cost inventories. Assume that all direct materials are placed in the process at the beginning of production.
Answer:
37,000 units
Explanation:
The computation of the total equivalent units for direct material is shown below:
= Transferred to finished goods during the month of July + Ending work in process during the month of July - Inventory in process, July 1
= 37,500 units + 3,500 units - 4,000 units
= 41,000 units - 4,000 units
= 37,000 units
We simply applied the above formula so that the total equivalent units for direct materials could come
Gould Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: Activity Cost Pool Activity Rate Setting up batches $ 59.71 per batch Processing customer orders $ 73.05 per customer order Assembling products $ 4.40 per assembly hour Data concerning two products appear below: Product K91B Product F65O Number of batches 92 63 Number of customer orders 42 56 Number of assembly hours 496 903 How much overhead cost would be assigned to Product K91B using the activity-based costing system
Answer:
Product K91B= $10,743.82
Explanation:
Giving the following information:
Activity Cost Pool Activity Rate
Setting up batches $ 59.71 per batch
Processing customer orders $ 73.05 per customer order
Assembling products $ 4.40 per assembly hour
Product K91B
Number of batches 92
Number of customer orders 42
Number of assembly hours 496
We were given the allocation rates, all we need to do is allocate based on actual allocation base:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Product K91B= 59.71*92 + 73.05*42 + 4.4*496
Product K91B= $10,743.82
A dairy produces and sells organic milk. Last year it sold 500,000 gallons of milk at a price of $7 per gallon. For last year, the firm's a. explicit costs were $3.5 million. b. economic profit was $3.5 million. c. total revenue was $3.5 million. d. accounting profit was $3.5 million.
Answer:
. total revenue was $3.5 million.
Explanation:
Total revenue = price x units sold = 500,000 x $7 = $3,500,000
Total explicit cost is the actual cost incurred in production. Total explicit cost includes fixed cost and variable cost.
Accounting profit is total revenue less total explicit cost.
Economic profit is accounting profit less implicit cost or opportunity cost.
Opportunity cost is the cost of the next best option forgone when one alternative is chosen over other alternatives.
I hope my answer helps you
An access control strategy that gives a user or group of users only those powers which are absolutely essential to do the job required is called the: a. principle of least privilege. b. principle of user control. c. principle of essential power. d. group level rule.
Answer:
A. principle of least privilege
Explanation:
According to The Principle of Least Privilege, a subject should be given only those privileges that are essential for it to complete its task. The principle works by giving just enough access to perform the required job. It dictates that users be assigned the least set of privileges they need to do their jobs, according to their roles. The principle aids in the creation of protective systems.
A portfolio consists of $13,600 in Stock M and $19,400 invested in Stock N. The expected return on these stocks is 8.10 percent and 11.70 percent, respectively. What is the expected return on the portfolio
Answer:
Portfolio return is 10.22%
Explanation:
The expected return of a portfolio is the function of the weighted average of the individual stock returns that form up the portfolio. The formula to calculate the expected return of the portfolio is as follows,
Portfolio Return = wA * rA + wB * rB + ... + wN * rN
Where,
w is the weightage of each asset/stock in the portfolior is the return of each stockThe weightage of each stock can be calculated by dividing the investment in the stock by the total investment in the portfolio.
Total investment - portfolio = 13600 + 19400 = $33000
Portfolio Return = 13600/33000 * 0.0810 + 19400/33000 * 0.1170
Portfolio Return = 0.10216 or 10.216% rounded off to 10.22%
Suppose you have the following disposable income and consumption data for an economy, as shown in the table below.
a. Using this data, compute the value for savings at each level of disposable income.
Instructions: Include a negative sign (-) when necessary.
Disposable Income Consumption Savings
$20,000 $22,000 $?
21,000 22,500 ?
22,000 23,000 ?
23,000 23,500 ?
24,000 24,000 ?
25,000 24,500 ?
26,000 25,000 ?
27,000 25,500 ?
28,000 26,000 ?
Answer:
Consumption is a key component in the calculation of GDP and refers to how much money out of disposable income is spent by households on goods (both durable and non-durable) and services.
Disposable income is how much money households have after taxes. Their consumption and spending come from here.
Whatever is not spent is saved. Savings are therefore calculated as;
Savings = Disposable income - Consumption
Savings for the above are therefore,
$20,000 - $22,000 = -$2,000
21,000 - 22,500 = -$1,500
22,000 - 23,000 = -$1,000
23,000 - 23,500 = -$500
24,000 - 24,000 = $0
25,000 - 24,500 = $500
26,000 - 25,000 = $1,000
27,000 - 25,500 = $1,500
28,000 - 26,000 = $2,000
A company rents a small building with 10,000 square feet of space for $100,000 per year. The rent is allocated to the company's three departments on the basis of the value of the space occupied by each. Department 1 occupies 1,500 square feet of ground-floor space, Department 2 occupies 3,500 square feet of ground-floor space, and Department 3 occupies 5,000 square feet of second-floor space. If rent for comparable floor space in the neighborhood averages $15.00 per sq. ft. for ground-floor space and $10 per sq. ft. for second-floor space, what annual rent expense should be charged to each department
Answer:
department 1: $18,000
department 2: $42,000
department 3: $40,000
Explanation:
total annual rent expense $100,000
total rented space 10,000 sq ft
first we must calculate the rental cost based on comparable floor space:
(1,500 x $15) + (3,500 x $15) + (5,000 x $10) = $22,500 + $52,500 + $50,000 = $125,000
now we allocate costs on the following proportion: $100,000 / $125,000 = 0.8
department comparable rent proportional cost total
1 $22,500 0.8 $18,000
2 $52,500 0.8 $42,000
3 $50,000 0.8 $40,000
total $125,000 $100,000
Eight months ago, you purchased 400 shares of Winston stock at a price of $46.40 a share. The company pays quarterly difidents of $1.05 a share. Today, you sold all of your shares for $48.30 a share. What is your total percentage return on this investment
Answer:
Percentage return on investment= 8.62 %
Explanation:
Return on investment is the amount that an investor gains after investing in a particular business venture. Percentage return on investment is calculated as gain from a business venture divided by the initial investment.
Percentage return on investment= (Gain ÷ Initial investment) * 100
Gain on share price= 48.30 - 46.40 = $1.90
Gain from dividend= 2 * 1.05= $2.10
Total gain = 1.90 + 2.10 = $4
Therefore
Percentage return on investment= (4 ÷ 46.40) * 100
Percentage return on investment= 8.62 %
So the gain on initial investment of the 400 shares is 8.62%
Answer:
The total percentage return on this investment is 8.62%
Explanation:
Given the initial investment is 400 shares * 46.40 = $18,560 and the purchase of those shares were "eight month ago"
The company pays quarterly dividends of $1/05 per share. So, that in between 8 month, these are 2 Quarters
Thus Dividend amount= 400 * 1.05 * 2 Quarters= $840
Capital gains= Sales value - Purchase price
= 400 * 48.30 - 18,560
= 19,320 - 18,560
= $760
Therefore total percentage return on this investment will be derived by (Dividend + Capital) / Initial Investment * 100
= (840 + 760)/18560 * 100
= 8.62%
On June 1, 2017, Larkspur sold 100 washer/dryer units without installation to Laplante Rentals for $69,000. Laplante is a newer customer and is unsure how this product will work in its older rental units. Larkspur offers a 60-day return privilege and estimates, based on prior experience with sales on this product, 4% of the units will be returned. Prepare the journal entries for the sale and related cost of goods sold on June 1, 2017.
Answer:
The journal entries to record the sale on June 1 are:
June 1, 2017, 100 units of washer/dryer to Laplante Rentals
Dr Cash 69,000
Cr Sales revenue 69,000
Dr Cost of goods sold 40,000
Cr Inventory 40,000
If the next question asks to record the return privilege and estimates, it should be recorded as both an asset (estimated returns inventory) and a liability (customer refunds payable).
Barans Realty Co. pays weekly salaries of $18,000 on Monday for a six-day workweek ending the preceding Saturday. Journalize the necessary adjusting entry at the end of the accounting period, assuming that the period ends on Friday. Round your answers to nearest whole dollar.
Answer:
Barans Realty Co. Journal entry
Dr Salary expenses 15,000
Cr Salary payable 15,000
Explanation:
Since Barans Realty Co. pays weekly salaries of $18,000 on Monday for a six-day workweek ending the preceding Saturday in which we have to as well assume that it ended on friday that means (18,000/6 ×5) will give us 15,000, we have to record it by Debiting salary expenses with 15,000 and Crediting salary payable with the same amount
The key thing to look at is that the period ends on FRIDAY.
If we count from Monday to Friday, that is 5 days apart.
We need to divide to find the daily salary.
18,000 / 6 = $3,000 per day
Multiply to find the total salary expense from Monday to Friday.
3,000 * 5 = $15,000
Now, we can assemble the journal entry.
We will have a salaries expense to debit for $15,000
We will also have a salaries payable to credit for $15,000
18,000 - 15,000 = $3,000 expense for the next accounting period.
Best of Luck!
The manufacturing cost of Calico Industries for three months of the year are provided below: Total Cost Production (units) April $121,800 282,100 May 82,500 163,400 June 99,900 235,900 Using the high-low method, the variable cost per unit and the total fixed costs are
Total Cost
Production (units)
April $121,800 282,100
May 82,500 163,400
June 99,900 235,900
Using the high-low method, the variable cost per unit and the total fixed costs are
$0.33 per unit and $28,707
$0.59 per unit and $14,354
$3.30 per unit and $2,871
$5.94 per unit and $2,871
Answer:
The correct answer is A.
Explanation:
Giving the following information:
April $121,800 282,100
May 82,500 163,400
June 99,900 235,900
To calculate the variable and fixed costs under the high-low method, we need to use the following formulas:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (121,800 - 82,500) / (282,100 - 163,400)
Variable cost per unit= $0.33
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 121,800 - (0.33*282,100)
Fixed costs= $28,707
There are four factors contributing to successful VENTURE: Opportunity, Resource, Entrepreneur and Organizations (OREO). Which one do you think is more important than other (1
Answer:
Four Factors for Successful Venture
The most important among them is Entrepreneur.
Explanation:
An Entrepreneur is the person or entity which galvanizes the other factors. He or she captures the opportunity with the resources he can mobilize within an organizational setting that he arranges. So, success depends on him or her and not the others.
Opportunity cannot seize itself, though it is important for success. Without opportunity to deploy resources, the best entrepreneur will be engaging in an exercise in futility. One cannot capture opportunities without deploying some resources, human, financial, and knowledge. To make a success of the whole venture, there must be a kind of organization. It is organization that organizes resources to seize opportunities. But, organization cannot operate on itself. It must be led by somebody, who is called the Entrepreneur. He or she is the mover and shaker of these factors and therefore, the most important.
Record adjusting journal entries 100 of the following for year ended December 31
Assume no other adjusting entries are made during the year
Salaries Payable.: At year-end, salaries expense of $24,000 has been incurred by the company, but is not yet paid to employees.
Interest Payable: At its December 31 year-end, the company owes $675 of interest on a line-of-credit loan. That interest will not be paid until sometime in January of the next year.
Interest Payable: At its December 31 year-end, the company holds a mortgage payable that has incurred $1,300 in annual interest that is neither recorded nor paid. The company intends to pay the interest on January 7 of the next year.
Answer:
Salaries Payable :
Salaries Expense $24,000 (debit)
Salaries Payable $24,000 (credit)
Interest Payable:
Interest Expense $675 (debit)
Interest Payable $675 (credit)
Interest Payable:
Interest Expense $1,300 (debit)
Interest Payable $1,300 (credit)
Explanation:
When an amount is incurred but is deferred to another period for payment, a liability is recognized.
A liability is a present legal obligation arising from a past event, the settlement of which will result in outflow of economic benefits (Cash) from the entity.
A manager creates a policy document that lists the policy name, identifying information, and the operational policy. When she gets to the section marked "roles and responsibilities," she is uncertain if she should include the names of the individuals assigned to the roles and responsibilities, but decides ultimately that she will because these individuals were newly appointed and have played an active role in reviewing and providing feedback on the policy. Which of the following statements is an accurate assessment of this manager’s choice to include the names of the individuals?a. the manager made the right choice to include the names of the individuals in the policy because it is highly unlikely that newly appointed employees will leave the company anytime soon. b. the manager should have postponed her decision to include the names until after she consulted the hr department. c. the manager should not have included the names because even though they were newly appointed, individuals join and leave and the company. d. the manager should have waited to include the individuals' names until she received verification that their contracts would be renewed.
Answer:
C
Explanation:
the manager should not have included the names because even though they were newly appointed, individuals join and leave and the company.
The manager made a mistake including the names of the individuals assigned to the roles and responsibilities, because these individuals were newly appointed and although they have played an active role in reviewing and providing feedback on the policy people join companies at anytime and also have the choice of leaving whenever they want.
For a Marketing course: What skills from this course would you use to create a three-paragraph promotional tool that explains the value of a chosen product and a sales pitch aimed at individual buyers
Answer:
After taking a Marketing Course, I should be armed with the following promotional skills:
Innovation Skills: It is expected that a marketing professional should be able to think differently, energise creativity in the business and craft maverick ways of gaining the attention of the market and transform that attention to patronage.Market Development Skills: One is also expected to gain the ability to identify and articulate latent customer needs (even before the customers become aware of them), spot socioeconomic trends as well as technological developments which create opportunities for the company as well as for the customer.Pricing Technology: Pricing is an art and a science. It involves accounting, economics and psychology. Marketing deals with the economics and psychology bit of it. Armed with this information, one is able to get into the mind of the individual buyers and them to firm up their buying decision.Cheers!
To create a promotional tool that explains the value of a product and a sales pitch aimed at buyers, its characteristics and benefits could be cited, such as innovation, price and added benefits.
For a company to be well positioned in the market, it is necessary to create value for its consumers, which is identified from:
How much the customer is willing to pay for your products and services.Marketing skills therefore must identify the strengths of the company and opportunities from the external environment, to satisfy consumer needs through:
IdentificationQualityAvailabilityCompatible priceBenefitsRelationshipTherefore, to create value, a company must reduce production costs or generate differentiation in order to be able to charge a premium price in relation to competitors.
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Prepare summary journal entries to record the following transactions for a company in its first month of operations.
1. Raw materials purchased on account, $86,000.
2. Direct materials used in production, $38,500. Indirect materials used in production, $23,000.
3. Paid cash for factory payroll, $50,000. Of this total, $38,000 is for direct labor and $12,000 is for indirect labor.
4. Paid cash for other actual overhead costs, $7,375.
5. Applied overhead at the rate of 125% of direct labor cost.
6. Transferred cost of jobs completed to finished goods, $62,600.
7. Sold jobs on account for $90,000 g(2). The jobs had a cost of $62,600 g(1).
Answer:
1.
Raw Materials $86,000 (debit)
Accounts Payable $86,000 (credit)
2.
Work In Process : Direct Materials $38,500 (debit)
Work In Process : Indirect Materials $23,000 (debit)
Raw Materials $61,500 (credit)
3.
Work In Process : Direct Labor $38,000 (debit)
Work In Process : Indirect Labor $12,000 (debit)
Cash $50,000 (credit)
4.
Overheads $7,375 (debit)
Cash $7,375 (credit)
5.
Work In Process $47,500 (debit)
Overheads $47,500 (credit)
6.
Finished Goods $62,600 (debit)
Work In Process $62,600 (credit)
7.
Accounts Receivable $90,000 (debit)
Cost of Sales $62,600 (debit)
Sales Revenue $90,000 (credit)
Finished Goods $62,600 (credit)
Explanation:
The costs of manufacture are accumulated in the Work In Process Account as was shown above.
Note that only Applied Overheads not Overheads incurred are included in Work In Process Account.
The Costs of Goods Transferred is Eliminated from The Work In Process Account and Included in the Finished Goods Account.
Journal 7 Records Both the Revenue and Cost of Goods Sold on Account.
At a sales volume of 38,000 units, Choice Corporation's sales commissions (a cost that is variable with respect to sales volume) total $752,400. To the nearest whole cent, what should be the average sales commission per unit at a sales volume of 39,000 units
Answer:
The average sales commission per unit at a sales volume of 39,000 units would be $19.8
Explanation:
In order to calculate the average sales commission per unit we would have to calculate the following formula:
average sales commission per unit= Total sales commission/sales volume
According to given data:
Total sales commission=$752,400
sales volume=38,000 units
Therefore, average sales commission per unit=$752,400/38,000 units
average sales commission per unit=$19.8
The average sales commission per unit at a sales volume of 39,000 units would be $19.8
Novak Company had the following two transactions related to its delivery truck.
1. Paid $150 for an oil change.
2. Paid $700 to install a special gear unit, which increases the operating efficiency of the truck.
Prepare Novak's journal entries to record these two transactions.
Answer and Explanation:
The Journal entries are shown below:-
1. Maintenance and Repairs Expense Dr, $150
To Cash $150
(Being cash paid is recorded)
Here we debited the maintenance and Repairs Expense as expenses are increasing and we credited the cash as assets are decreasing.
2) Equipment $700
To Cash $700
(Being cash paid is recorded)
Here we debited the equipment as assets are increasing and we credited the cash as assets are decreasing
Interest rates and the price of old or existing bonds are a. directly related. b. independent of each other. c. inversely related. d. sometimes directly related and sometimes inversely related. e. There is not enough information to answer the question.
Answer:
Option C, “inversely related” is the correct answer.
Explanation:
Option “C” is the correct answer because if the interest rate on the bonds falls then its demand rises. Thus, its rising demand will derive up the price of bonds. If the interest rate rises then the demand for bonds will fall and this will reduce the price of bonds. Therefore, this condition shows the inverse relationship between the interest rate and bond price
Brody Company makes industrial cleaning solvents. Various chemicals, detergent, and water are mixed together and then bottled in 10-gallon drums. Brody provided the following information OBJECT for last year:Raw materials purchases Direct labor Depreciation on factory equipment Depreciation on building Depreciation on headquarters building Factory insurance Property taxes: Factory Headquarters Utilities for factory Utilities for sales office Administrative salaries Indirect labor salaries Sales office salaries Beginning balance, raw materials Beginning balance, work in process Beginning balance, finished goods Ending balance, raw materials Ending balance, work in process Ending balance, finished goods $250,000 140,000 45,000 30,000 50,000 15,000 20,000 18,000 34,000 1,800 150,000 156,000 90,000 124,000 124,000 84,000 102,000 130,000 82,000Last year, Brody completed 100,000 units. Sales revenue equaled $1,200,000, and Brody paid a sales commission of 5 percent of sales.
1. Calculate the direct materials used in production for last year.
2. Calculate total prime cost.
3. Calculate total conversion cost.
4. Prepare a cost of goods manufactured statement for last year. Calculate the unit product cost.
5. Prepare a cost of goods sold statement for last year.6. Prepare an income statement for last year. Show the percentage of sales that each line item represents.
Answer:
Brody Company
1. Direct Materials Used in Production:
Beginning balance, raw materials $124,000
Raw materials purchase 250,000
Raw materials for production $374,000
less raw materials, ending balance 102,000
Cost of Direct materials used $272,000
2. Total Prime Cost:
Cost of Direct materials used $272,000
Direct labor 140,000
Total Prime Cost $412,000
3. Total Conversion Cost:
Direct labor $140,000
Factor overheads:
Depreciation on factory equipment 45,000
Depreciation on building 30,000
Factory insurance 15,000
Property Taxes $20,000
Utilities for factory 34,000
Indirect labor salaries 156,000
Total Conversion Cost = $440,000
4. Cost of Goods Manufactured Statement:
Prime Cost $412,000
Conversion cost $440,000
Beginning Work in Process 124,000
less ending work in process (130,000)
Cost of goods manufactured $846,000
Unit Product Cost = $846,000/100,000 = $8.46
5. Cost of Goods Sold Statement:
Cost of goods manufactured $846,000
Beginning finished goods 84,000
less ending finished goods (82,000)
Cost of goods sold $848,000
6. Income Statement %
Sales Revenue $1,200,000 100
Cost of goods sold 848,000 71
Gross Profit $352,000 29
Operating Expenses:
Depreciation on building $50,000 4
Property Taxes 18,000 1.5
Sales Office Utilities 1,800 0.15
Administrative salaries 150,000 12.5
Sales office salaries 90,000 7.5
Sales Commission 60,000 5
Total Operating Expenses $369,800 31
Net Loss ($17,800) 14.83
Explanation:
Raw materials purchases $250,000
Direct labor 140,000
Depreciation on factory equipment 45,000
Depreciation on building 30,000
Depreciation on headquarters building 50,000
Factory insurance 15,000
Property taxes:
Factory 20,000 and Headquarters 18,000
Utilities for factory 34,000
Utilities for sales office 1,800
Administrative salaries 150,000
Indirect labor salaries 156,000
Sales office salaries 90,000
Beginning balance, raw materials 124,000
Beginning balance, work in process 124,000
Beginning balance, finished goods 84,000
Ending balance, raw materials 102,000
Ending balance, work in process 130,000
Ending balance, finished goods 82,000
b) Sales Commission = $60,000 (5% of $1,200,000)
c) Prime cost is the cost of direct raw materials and direct labor. Conversion cost includes the cost of direct labor and factory overheads.
1.The direct materials used in production for last year is $2,72,000.
2. The Total Prime Cost is $412,000.
3. The Total Conversion Cost is $440,000.
4. The Cost of Goods Manufactured Statement is $8.46.
5. The Net Loss of ($17,800) interest rate 14.83.
"Brody Company"Answer 1:
The direct materials used in production for last year is :
Amount
Beginning balance, raw materials $124,000
Add: Raw materials purchase $250,000
Add: Raw materials for production $374,000
Add: raw materials, ending balance ($102,000)
Cost of Direct materials $272,000
Answer 2:
The Total Prime Cost is :
Total Prime Cost= Cost of Direct materials+ Direct labor
Total Prime Cost= $272,000+ 140,000
Total Prime Cost =$412,000
The Total Prime Cost is $412,000.
Answer 3:
The Total Conversion Cost is :
Direct labor $140,000
Factor overheads:
Depreciation on factory equipment 45,000
Depreciation on building 30,000
Factory insurance 15,000
Property Taxes $20,000
Utilities for factory 34,000
Indirect labor salaries 156,000
Total Conversion Cost = Direct labor+ Factor overheads:
Total Conversion Cost = $140,000 + 3,00,000
Total Conversion Cost = $440,000
Answer 4.
The Cost of Goods Manufactured Statement is :
Prime Cost $412,000
Conversion cost $440,000
Beginning Work in Process 124,000
less: ending work in process (130,000)
Cost of goods manufactured $846,000
Unit Product Cost = $846,000/100,000
Unit Product Cost = $8.46
The Cost of Goods Manufactured Statement is $8.46.
Answer 5.
The Cost of Goods Sold Statement is :
Cost of goods manufactured $846,000
Beginning finished goods 84,000
less: ending finished goods (82,000)
Cost of goods sold $848,000
Answer 6:
Income Statement Amount %
Sales Revenue $1,200,000 100
Cost of goods sold 848,000 71
Gross Profit $352,000 29
Operating Expenses:
Depreciation on building $50,000 4
Property Taxes 18,000 1.5
Sales Office Utilities 1,800 0.15
Administrative salaries 150,000 12.5
Sales office salaries 90,000 7.5
Sales Commission 60,000 5
Total Operating Expenses $369,800 31
Net Loss ($17,800) 14.83
Working Notes:
Sales Commission = $60,000 (5% of $1,200,000)
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