Answer: d. rise, interest rates to fall, and the dollar to depreciate
Explanation:
The price level drops which would make goods and services easier to afford in the country. The proportion of income spent on goods and services will therefore decrease which means more money is available to invest. These investments will increase the Real Wealth of individuals.
However, because there are now a lot of people investing, the sources of capital increases which will reduce the interest rate because the higher the supply, the lower the price.
As a result of the reduced interest rates and assuming this is the United States, people will seek to invest in other countries to get higher interest rates so the dollar will depreciate in value as it is less sought after.
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.
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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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
Imagine Fry knew in advance that he would be frozen for 1000 years and wanted to have $9,999,999,999 when he thaws out. How much would Fry need to deposit in his account paying 2% APR compounded quarterly before falling into the cryogenic freezer
Answer:
$21.66
Explanation:
We are to find the present value of $9,999,999,999.
The formula to be used is :
P = FV (1 + r/m) ^-mn
FV = Future value
P = Present value
R = interest rate
N = number of years
M = number of compounding
= $9,999,999,999 ( 1 + 0.02 / 4 ) ^-4000 = $21.66
I hope my answer helps you
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.
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
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
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
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%
If the economy booms, RTF, Inc., stock is expected to return 11 percent. If the economy goes into a recessionary period, then RTF is expected to only return 4 percent. The probability of a boom is 72 percent while the probability of a recession is 28 percent. What is the variance of the returns on RTF, Inc., stock
Answer:
0.000988
Explanation:
For calculation of the variance of the returns on RTF, Inc., stock first we need to find out the expected rate of return which is shown below:-
Expected rate of return = (Boom percentage × Expected return) + (Recession percentage × Expected return)
= (0.72 × 0.11) + (0.28 × 0.04)
= 9.04%
The Variance of the returns = Boom percentage × (Expected return - Expected rate of return)^2 + Probability recession × (Expected return - Expected rate of return)^2
= 72% × (0.11 - 0.0904)^2 + 28% × (0.04 - 0.0904)^2
= 0.000988
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%
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.
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)
A Project Engineer at the Michigan office is excited about an engineering software change to improve the reliability of the central processing unit. Unfortunately, the change involves some conflicting proprietary rights due to the Chief Designer's past work ties to Bridgeway's major competitor. Even though the Project Engineer was warned of this issue, she really wants to be the first to market with this change. There may be future financial rewards for her and the company that may be too good to pass up. As the Chief Liaison Officer, should you suggest the Project Engineer go forward with this engineering change
Answer:
9 76
Explanation:
9
The pre-tax cost of debt is 11%, preferred stock costs 14%, and equity costs 15%. What is the weighted average cost of capital assuming a tax rate of 40% and a target capital structure of 40% debt, 20% preferred stock, and 40% equity
Answer:
WACC is 11.4%
Explanation:
The weighted average cost of capital (WACC) is the average cost of all the various sources of long-term finance used by a business weighted according to the proportion which each source of finance bears to the the entire pool of fund.
To calculate the weighted average cost of capital, follow the steps below:
Step 1: Calculate cost of individual source of finance(this is already given)
Cost of Equity= 15%
After-tax cost of debt:
= (1- T) × before-tax cost of debt
= 11%× (1-0.4)= 6.6%
Cost of preferred stock costs= 14%
Step 2 : calculate the proportion or weight of the individual source of finance . (This already given)
Equity = 40%
Debt= 40%
Preferred stock : 20%
Step 3; Work out weighted average cost of capital (WACC)
WACC = ( 15%× 40%) + ( 6.6%× 40%) + (14%× 20%)= 11.4%
WACC is 11.4%
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
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
Debbie and Alan open a web-based bookstore together. They have been friends for so long that they start their business on a handshake after discussing how they will share both work and profits or losses from the business. Have Debbie and Alan formed a real partnership given that they have signed no written partnership agreement?
Answer:
Yes
Explanation:
Debbie and Alan have formed a real partnership even though they have signed no written partnership agreement because partnership does not require legal Documentation.
Many partnerships are formed naturally because the people who are involved in the business share similar goals, so their partnerships don't need formation documents to exist.
A well-known industrial firm has issued $1,000 bonds that carry a 4% coupon interest rate paid semiannually. The bonds mature 20 years from now, at which time the industrial firm will redeem them from $1,000 plus the terminal semiannual interest payment. From the financial pages of your newspaper you learn that the bonds may be purchased for $715 each ($710 for the bond plus a $5 sales commission). What nominal annual rate of return would you receive if you purchased the bond now and held it to maturity 20 years from now
Answer:
5.59%
Explanation:
$1,000 bonds carrying a 4% coupon rate, semiannual coupon $20, matures in 20 years
if you purchase the bonds at $715, the nominal annual rate of return = coupon payments / bond price = ($20 + $20) / $715 = $40 / $715 = 5.59%
The nominal annual rate of return is calculated by dividing the revenue generated by an investment by the cost of the investment.
In the business gift-giving world, if a company gives a gift to a potential client for the purpose of influencing their behavior in their favor, it is unethical. What are the three criteria and dimensions of evaluating a business gift? Multiple Choice Question
Answer:
Context, culture and content
Explanation:
Gift giving in business is common and also contentious. Business gifts are often for advertising, sales promotion, and marketing communication medium.
These kind of gifts are for the following reasons:
1. In appreciation.
2. In the hopes of creating a positive first impression.
3. Returning a favor or expecting a favor in return for something.
When it comes to considering appropriate business gifts it is helpful for one to think about the content of the gift, the context of the gift, and the culture in which it will be received.
Giving a gift to a potential client for the purpose of influencing their behavior is a form of Bribery.
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.
QS 9-8 Percent of sales method LO P3 Warner Company’s year-end unadjusted trial balance shows accounts receivable of $105,000, allowance for doubtful accounts of $660 (credit), and sales of $340,000. Uncollectibles are estimated to be 1% of sales. Prepare the December 31 year-end adjusting entry for uncollectibles.
Answer:
Bad Debts Expense $ 2740 Debit
Allowance for doubtful accounts $ 2740 Credit
Explanation:
Warner Company
Accounts receivable $105,000,
Allowance for doubtful accounts $660 (credit),
Sales $340,000
Uncollectibles are estimated to be 1% of sales.
Uncollectibles of 1% of sales means that after adjusting entry is passed the uncollectible amount must be $3400 ( 1% of $340,000) .
We have a credit balance of $ 660
The debit balance in the Allowance for doubtful accounts must be $ 3400.
The adjustment will be = $3400- $660= $ 2740
The Adjusting Entry will be
Bad Debts Expense $ 2740 Debit
Allowance for doubtful accounts $ 2740 Credit
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.
Consider the simple leisure model in which the individual chooses between leisure (L) and money income (M). The marginal utility of leisure (MUL) is 15 and the marginal utility of money (MUM) is 3. At the optimum, the wage rate:_______
a. $45
b. $0.20
c. $5
d. $15
Answer:
Wage rate is $5
Explanation:
The marginal utility of money=marginal utility of leisure/wage rate
When the formula is rearranged,wage rate is given thus:
wage rate=marginal utility of leisure/marginal utility of money
wage rate=15/3
wage rate =$5
In other words, the correct option is C,wage rate is $5
Option D would have been correct if the requirement was to calculate marinal utility of leisure
Cobe Company has already manufactured 25,000 units of Product A at a cost of $15 per unit. The 25,000 units can be sold at this stage for $480,000. Alternatively, the units can be further processed at a $240,000 total additional cost and be converted into 5,400 units of Product B and 11,100 units of Product C. Per unit selling price for Product B is $104 and for Product C is $53
Prepare an analysis that shows whether the 21,000 units of Product A should be processed further or not.
Sell as in Process further
Sales
Relevant costs:
Total relevant costs
Income (loss)
Incremental net income (or loss) if processed further
The company should _______________________
Answer:
Incremental income from further processing $534,900
The company should process further
Explanation:
A company should process further a product if the additional revenue from the split-off point is greater than than the further processing cost.
Also note that all cost incurred up to the split-off point are irrelevant to the decision to process further .
$
Revenue after split-off point
(104×5400) + (53× 11,100) 1,149,900
Revenue at the slit of point
(25,000× $15) (375,000 )
Additional income from further processing 774,900
Further processing cost (240,000)
Incremental income from further processing 534,900
Incremental income from further processing $534,900
The company should process further
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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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%
Sherry and John Enterprises are using the kaizen approach to budgeting for 2018. The budgeted income statement for January 2018 is as follows: Sales (168,000 units) $1,010,000 Less: Cost of goods sold 690,000 Gross margin 320,000 Operating expenses 400,000 (includes $55,000 of fixed costs) Operating income -$80,000 Under the kaizen approach, cost of goods sold and variable operating expenses are budgeted to decline by 1% per month. What is the budgeted operating income for March 2018
Answer:
February Kaizen Budgeted Operating income -$ 69,650
March Kaizen Budgeted Operating income-$ 59,405.5
Explanation:
The Kaizen costing primarily focuses on production processes and in it the cost reductions are obtained through increasing efficiency.
Sales (168,000 units) $1,010,000
Less: Cost of goods sold 690,000
Gross margin 320,000
Operating expenses 400,000 (includes $55,000 of fixed costs)
Operating income -$80,000
Calculations For February
Decrease by 1% of COGS $ 690,000= $ 690,000-$6900=$ 683,100
Decrease by 1% of Variable Expenses $ 345000= $ 345000-3450= $ 341550
Budgeted Operating Income Under Kaizen Costing For February
Sales (168,000 units) $1,010,000
Less: Cost of goods sold 683,100
Gross margin 326,900
Operating expenses
Variable Expenses $ 341550
Fixed Costs $55,000
Operating income -$ 69,650
Calculations For March
Decrease by 1% of COGS $ 683,100= $ 683,100-$6831=$ 676,269
Decrease by 1% of Variable Expenses $ 341 550= $ 341550-3415.5= $ 338134.5
Budgeted Operating Income Under Kaizen Costing For March
Sales (168,000 units) $1,010,000
Less: Cost of goods sold $ 676,269
Gross margin 333,731
Operating expenses
Variable Expenses $ 338134.5
Fixed Costs $55,000
Operating income -$ 59,405.5
Pizza is a normal good if the demand:__________
a. for pizza rises when income rises.
b. for pizza rises when the price of pizza falls.
c. curve for pizza slopes upward.
d. curve for pizza shifts to the right when the price of burritos rises, assuming pizza and burritos are substitutes.
Answer:
a. for pizza rises when income rises.
Explanation:
A normal good is a good that people purchase more when their income increases and that have a lower demand when their income decreases, for example, clothing. According to this, the answer is that Pizza is a normal good if the demand for pizza rises when income rises.
The other options are not right because a normal good is determined by the way in which the demand of a product behaves when the income increases or decreases.
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