Answer:
By how they work and how they are in their field
Henkes Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the labor-hours for the upcoming year at 61,000 labor-hours. The estimated variable manufacturing overhead was $11.00 per labor-hour and the estimated total fixed manufacturing overhead was $1,159,000. The actual labor-hours for the year turned out to be 64,600 labor-hours. Required: Compute the company's predetermined overhead rate for the recently completed year. (Round your answer to 2 decimal places.)
Answer:
$30.00 per labor - hour
Explanation:
Computation of the company's predetermined overhead rate for the recently completed year.
First step is to calculate the Variable manufacturing overhead using this formula
Variable manufacturing overhead = Variable manufacturing overhead per labor hour * Budgted labor hours
Let plug in the formula
Variable manufacturing overhead=$11 * 61,000
Variable manufacturing overhead=$671,000
Second step is to calculate Total estimated overhead cost using this formula
Total estimated overhead cost = Variable manufacturing overhead + Fixed manufacturing overhead
Let plug in the formula
Total estimated overhead cost=$671,000 + $1,159,000
Total estimated overhead cost=$1,830,000
Now let calculate the Predetermined overhead rate using this formula
Predetermined overhead rate = Total Estimated overhead cost / Estimated labor hours
Let plug in the formula
Predetermined overhead rate=$1,830,000 / 61,000
Predetermined overhead rate=$30.00 per labor - hour
Therefore the company's predetermined overhead rate for the recently completed year will be $30.00 per labor - hour
What type of risks are considered accidental and unintentional?
a) speculative risks
b) uninsured risks
c) classified risks
d) pure risks
Answer:
Pure risk
Explanation:
pure risk means it cannot be controlled and has two outcomes, therefore it is accidental and unintentional.
Pure risks is the type of risks are considered accidental and unintentional. It is inadvertent and unplanned since it cannot be controlled and has two outcomes.
What is pure risk?Pure risk is an uncontrollable risk with only two outcomes: entire loss or no loss at all. When pure risk is involved, there are no options for gain or profit.
Natural disasters, fires, and death are all instances of situations where there is a high level of risk.
Thus, option D is correct.
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Below are approximate amounts related to balance sheet information reported by five companies in previous years.
1. ExxonMobil reports total assets of $196 billion and total liabilities of $91 billion.
2. Citigroup reports total liabilities of $1,340 billion and stockholders' equity of $94 billion.
3. Amazon reports total assets of $3.1 billion and total stockholders' equity of $0.14 billion.
4. Nike reports an increase in assets of $1.04 billion and an increase in liabilities of $0.3 billion.
5. Kellogg reports a decrease in liabilities of $0.40 billion and an increase in stockholders' equity of $0.02 billion.
Required:
a. What is the amount of stockholders' equity of ExxonMobi?
b. What is the amount of total assets of Citigroup?
c. What is the amount of total liabilities of Amazon.com?
d. What is the amount of the change in stockholders' equity of Nike?
Answer:
a. The amount of stockholders' equity of ExxonMobil is $105 billion.
b. The amount of total assets of Citigroup is $1,434 billion
c. The amount of total liabilities of Amazon.com is $2.96 billion.
d. The amount of the change in stockholders' equity of Nike is $0.74 billion
Explanation:
We will the accounting equation to answer the question
Accounting Equation
Total Assets = Total Equity + Total Liabilities
a.
ExxonMobil
Where
Total assets = $196 billion
Total liabilities = $91 billion
Placing values in the equation
$196 billiom = Total Equity + $91 billion
Total Equity = $196 - $91 billion
Total Equity = $105 billion
b.
Citigroup
where
Total liabilities = $1,340 billion
Stockholders' equity = $94 billion
Placing values in the equation
Total Assets = $94 billion + $1,340 billion
Total Assets = $1,434 billion
c.
Amazon.com
Where
Total assets = $3.1 billion
Total stockholders' equity = $0.14 billion
placing values in the equation
$3.1 billion = $.14 billion + Total Liabilities
Total Liabilities = $3.1 billion - $.14 billion
Total Liabilities = $2.96 billion
d.
Nike
Change in Assets = Change in equity + Change in liabilities
Where
Increase in assets = $1.04 billion
Increase in liabilities = $0.3 billion
Placing values in the equation
$1.04 billion = Change in equity + $0.3 billion
Change in equity = $1.04 billion - $0.3 billion
Change in equity = $0.74 billion
You are planning to save for retirement over the next 25 years. To do this, you will invest $820 per month in a stock account and $420 per month in a bond account. The return of the stock account is expected to be 10.2 percent, and the bond account will pay 6.2 percent. When you retire, you will combine your money into an account with a 7.2 percent return. How much can you withdraw each month from your account assuming a 20-year withdrawal period? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
The withdraw amount is "11,227.42".
Explanation:
The given values are:
In stock account,
PMT = $820
Interest rate = [tex]\frac{10.2 \ percent}{12}[/tex]
N = 300
PV = 0
In Bond account,
PMT = $420
Interest rate = [tex]\frac{6.2 \ percent}{12}[/tex]
N = 300
PV = 0
Now,
By using the FV (Future value) function, the value in Stock account will be:
= [tex]FV(rate,nper,pmt,[pv],[type])[/tex]
= [tex]1,125,795.30[/tex]
By using the FV (Future value) function, the value in Stock account will be:
= [tex]FV(rate,nper,pmt,[pv],[type])[/tex]
= [tex]300,181.3321[/tex]
After 25 years,
The value throughout the account, will be:
= [tex]300,181.3321 + 1,125,795.30[/tex]
= [tex]1,425,976.63[/tex]
By using the PMT function, we can find the with drawling amount. The amount will be:
= [tex]PMT(rate, nper, pv, [fv], [type])[/tex]
= [tex]11,227.42[/tex]
Bradley Snapp has deposited $5,291 in a guaranteed investment account with a promised rate of 4% compounded annually. He plans to leave it there for 6 full years when he will make a down payment on a car after graduation. How much of a down payment will he be able to make
Answer:
i dont realky understand the question
If nominal GDP in 2014 is $20,000 billion while real GDP is $16,000 billion, then the GDP deflator in 2014 is
Answer:
125
Explanation:
Calculation for GDP deflator in 2014
Using this formula
2014 GDP deflator=nominal GDP /real GDP*100
Let plug in the formula
2014 GDP deflator=$20,000 billion/$16,000 billion*100
2014 GDP deflator=125
Therefore GDP deflator in 2014 is 125
Grouper Inc. has decided to raise additional capital by issuing $199,000 face value of bonds with a coupon rate of 6%. In discussions with investment bankers, it was determined that to help the sale of the bonds, detachable stock warrants should be issued at the rate of one warrant for each $100 bond sold. The value of the bonds without the warrants is considered to be $179,100, and the value of the warrants in the market is $23,880. The bonds sold in the market at issuance for $200,900.
Required:
a. What entry should be made at the time of the issuance of the bonds and warrants?
b. Prepare the entry if the warrants were nondetachable.
Answer:
A. Dr Cash 152,000
Dr Discount on bonds payable 40,800
Cr Bond Payable 170,000
Cr Paid-in Capital-Stock Warrants 22,800
B. Dr Cash 152,000
Dr Discount on bonds payable 18,000
Cr Bond Payable 170,000.00
Explanation:
A. Calculation for the Journal entry that should be made at the time of the issuance of both the bonds and warrants
Dr Cash $200,900
Dr Discount on bonds payable $21,735
($199,000 - $177,265)
Cr Bond Payable $199,000
Cr Paid-in Capital-Stock Warrants $23,605
(b) Preparation of the journal entry in a situation were the warrants were nondetachable.
Dr Cash $200,900
Cr Discount on bonds payable $1900
($199,000-$200,900)
Cr Bond Payable $199,000
Workings:
Value assigned to bonds=179,100/($179,100+$23,880)
*$200,900
Value assigned to bonds=179,100/$202,980
*$200,900
Value assigned to bonds=$177,265
Value assigned to warrants=$23,880/$202,980*$200,900
Value assigned to warrants=$23,605
Your firm has sales of $47,000, current assets of $5,100, current liabilities of $6,200, net fixed assets of $51,500, and a profit margin of 5 percent. The firm has no long-term debt and does not plan on acquiring any. The firm does not pay any dividends. Sales are expected to increase by 7 percent next year. If all assets, short-term liabilities, and costs vary directly with sales, how much additional equity financing is required for next year
Answer:
$1,013.50
Explanation:
Projected assets = (Current assets + Fixed assets) * 1.10
Projected assets = ($5,100 + $51,500) * 1.07
Projected assets = $60,562
Projected liabilities = Current liabilities * 1.07 = $6,200 * 1.07 = $6,634
Current equity = Current assets + Fixed assets - Current liabilities = $5,100 + $51,500 - $6,200 = $50,400
Projected increase in retained earnings = Sales * 5% * 1.07 = $47,000 * 5% * 1.07 = $2,514.50
Equity funding need = Projected assets - Projected liabilities - Current equity - Projected increase in retained earnings
Equity funding need = $60,562 - $6,634 - $50,400 - 2,514.50
Equity funding need = $1,013.50
So therefore, the equity funding need is $1,013.50
receives feedback from customers about the type of service they received
when they were in the store and compares the feedback to company's goal for
customer service. Which strategic management function is most likely using
Answer:
Explanation:
Strategic Plan: Product differentiation
Tactical Plan: Increase customer satisfaction
Operational Plan: Improve customer service with hiring and training program for customer service associates.
Hope this helps!
Marjorie Knaus, an architect, organized Knaus Architects on January 1, 2018. During the month, Knaus Architects completed the following transactions:
a. Issued common stock to Marjorie Knaus in exchange for $51,000.
b. Paid January rent for office and workroom, $5,100.
c. Purchased used automobile for $33,000, paying $7,700 cash and giving a note payable for the remainder.
d. Purchased office and computer equipment on account, $10,200.
e. Paid cash for supplies, $2,450.
f. Paid cash for annual insurance policies, $3,400.
g. Received cash from client for plans delivered, $12,800.
h. Paid cash for miscellaneous expenses, $1,380.
i. Paid cash to creditors on account, $2,960.
j. Paid installment due on note payable, $410.
k. Received invoice for blueprint service, due in August, $1,700.
l. Recorded fees earned on plans delivered, payment to be received in August, $8,800.
m. Paid salary of assistants, $2,700.
n. Paid gas, oil, and repairs on automobile for July, $660.
Required:
a. Record these transactions directly in the following T accounts, without journalizing: Cash; Accounts Receivable; Supplies; Prepaid Insurance; Automobiles; Equipment; Notes Payable; Accounts Payable; Common Stock; Professional Fees; Salary Expense; Blueprint Expense; Rent Expense; Automobile Expense; Miscellaneous Expense. To the left of the amount entered in the accounts, select the appropriate letter to identify the transaction.
b. Determine account balances of the T accounts. Accounts containing a single entry only (such as Prepaid Insurance) do not need a balance.
c. Prepare an unadjusted trial balance for Knaus Architects as of January 31, 2018.
d. Determine the net income or net loss for January.
Answer:
Unadjusted Trial Balance $117,590.
Explanation:
Unadjusted Trial Balance of Marjorie Knaus :
Debit
Cash 36,400
Accounts Receivable 20,600
Supplies 2,450
Prepaid Insurance 3,400
Automobiles 33,000
Equipment 10,200
Salary Expense 2,700
Blue Print Expense 1,700
Rent Expense 5,100
Automobile Expense 660
Miscellaneous Expense 1,380
Total 117,590
Credit
Notes Payable 25,300
Accounts Payable 7,240
Common Stock 51,000
Professional Fees 34,050
Total 117,590
Orange Cable TV Company, an accrual basis taxpayer, allows its customers to pay by the year in advance ($600 per year) or two years in advance ($960). In September 2020, the company collected the following amounts applicable to future services:
October 2020-September 2022 services (200 two-year contracts) $192,000
October 2020-September 2021 services (200 one-year contracts) 120,000
Total $312,000
As a result of this, Orange Cable should report as gross income for 2021, the year following receipt:
a. $54,000
b. $78,000
c. $258,000
d. $312.000
Answer:
Orange Cable TV Company
As a result of this, Orange Cable should report as gross income for 2021, the year following receipt:
$186,000
Explanation:
a) Data and Calculations:
Annual subscriptions = $600 per year
Two-years subscriptions = $960
September 2020 collections:
October 2020-September 2022 services (200 two-year contracts) = $192,000
Monthly subscriptions = $192,000/24 = $8,000
October 2020-September 2021 services (200 one-year contracts) = 120,000
Monthly subscriptions = $120,000/12 = $10,000
Total = $312,000
Collections for 2021:
a. Monthly subscriptions of $8,000 * 12 = $96,000
b. Monthly subscriptions of $10,000 * 9 = 90,000
Total collections for 2021 = $186,000
Cain Components manufactures and distributes various plumbing products used in homes and other buildings. Over time, the production staff has noticed that products they considered easy to make were difficult to sell at margins considered reasonable while products that seemed to take a lot of staff time were selling well despite recent price increases. A summer intern has suggested that the cost system might be providing misleading information. The controller decided that a good summer project for the intern would be to develop,in one self-contained area of the plant, an alternative cost system with which to compare the current system. The intern identified the following cost pools and, after discussion with some plant personnel, appropriate cost drivers for each pool. There were:
Cost Pools Costs Activity Drivers
Receiving $600,000 Direct material cost
Manufacturing 5,500,000 Machine-hours
Machine setup 900,000 Production runs
Shipping $1,000,000 Units shipped
In this particular area, Cain produces two of its many products: Standard and Deluxe.The following are data for production for the latest full year of operations:
Standard Deluxe
Total direct material costs $245,000 $155,000
Total direct labor costs $650,000 $250,000
Total machine-hours 150,000 100,000
Total number of setups 75 125
Total pounds of material 18,000 9,000
Total direct labor-hours 6,000 3,750
Number of units produced and shipped 20,000 5,000
The intern decides to look more closely at the manufacturing activity and determines that it can be broken down into two activities: production and engineering. Production covers the costs of ongoing manufacturing while engineering includes those activities dealing with engineering changes, design modifications, and so on.
The costs attributed to production are $3,300,000 and the costs attributed to engineering are $2,200,000. After discussion with plant engineers, the intern decides that the best cost driver for engineering is setups, because most of the work arises from changes in the way the product is run.
Required:
a. Compute the totals of the cost driver rates.
b. What unit product costs will be reported for the two products if the revised ABC system is used?
Solution :
Standard Deluxe Total
Total cost of direct material 245000 155000 400000
Total cost of direct labor 650000 250000 900000
Total machine hours 150000 100000 250000
Total setups 75 125 200
Total material pounds 18000 9000 27000
Total direct hours of labor 6000 3750 9750
No. of units shipped 20000 5000 25000
a). Cost drivers rates :
Receiving 150 Percentage of materials(dollars)
[tex]$\left(600000 \times \frac{100}{400000}\right)$[/tex]
Manufacturing 13.20 Per machine hour
[tex]$\frac{3300000}{250000}$[/tex]
Engineering 11000 Per set up
[tex]$\frac{2200000}{200}$[/tex]
Machine set up 4500 per set up
[tex]$\frac{900000}{200}$[/tex]
Shipping 40 per unit
[tex]$\frac{1000000}{25000}$[/tex]
b). Units product cost
Standard Deluxe
Direct cost 895000 405000
(245000+650000) (155000+250000)
Overhead :
Receiving 367500 232500
(245000 x 150%) (155000 x 150%)
Manufacturing 1980000 1320000
(150000 x 13.2) (100000 x 13.2)
Engineering 825000 1375000
(75 x 11000) (125 x 11000)
Machine set up 337500 562500
(75 x 4500) (125 x 4500)
Shipping 800000 200000
(20000 x 40) (5000 x 40)
Total costs 5205000 4095000
No of units 20000 5000
Unit cost 260.25 819
(5205000/20000) (4095000/5000)
Each week Bill buys exactly 7 bottles of cola regardless of its price. Bill's own price elasticity of demand for cola IN ABSOLUTE VALUE is
Answer:
0
Explanation:
If he doesn't care about the price then that means that the product is perfectly inelastic AKA it has an elasticity of 0
Indicate whether each of the following descriptions represents saving or investment, as defined by a macroeconomist.
a. This occurs when a person's income exceeds his consumption.
b. This occurs when a person or firm purchases new capital.
Indicate whether each of the following situations represents saving or investment.
1. You use your $200 paycheck to buy stock in AT&T.
2. You borrow $1,000 from a bank to buy a car to use in your pizza delivery business.
3. Your family takes out a mortgage and buys a new house.
4. Your roommate earns $100 and deposits it in his account at a bank.
Answer: See explanation
Explanation:
a. This occurs when a person's income exceeds his consumption. - This is savings.
b. This occurs when a person or firm purchases new capital. - This is investment.
1. You use your $200 paycheck to buy stock in AT&T. - This is savings since the money isn't used to make a capital purchase for ones business.
2. You borrow $1,000 from a bank to buy a car to use in your pizza delivery business. - This is investment as the car will be used for ones business. The consumption is made to help the business.
3. Your family takes out a mortgage and buys a new house. - This is investment as a new capital is bought.
4. Your roommate earns $100 and deposits it in his account at a bank. - This is savings as no consumption is involved.
Sneed Corporation issues 12,700 shares of $49 par preferred stock for cash at $63 per share. The entry to record the transaction will consist of a debit to Cash for $800,100 and a credit or credits to
Answer:
Dr Cash 800,100
Cr Preferred stock 622,300
Cr Additional paid in capital, preferred stock 177,800
Explanation:
Preferred stocks and common stocks are part of stockholders' equity. Whenever they are sold above par value, the difference must be recorded as additional paid in capital. You must also specify which stocks were sold at a higher value.
What is a major plan that organizes several other plans?
A Management
B Master Plan
C Deadline
D Plan
Newhard Company assigns overhead cost to jobs on the basis of 115% of direct labor cost. The job cost sheet for Job 313 includes $15,745 in direct materials cost and $10,700 in direct labor cost. A total of 1,550 units were produced in Job 313. Required: a. What is the total manufacturing cost assigned to Job 313
Required:
What is the total manufacturing cost assigned to Job 313? What is the unit product cost for Job 313?
Answer:
Results are below.
Explanation:
First, we need to allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 1.15*10,700= $12,305
Now, we can determine the total manufacturing cost:
Total manufacturing cost= 15,745 + 10,700 + 12,305
Total manufacturing cost= $38,750
Finally, the unitary cost:
Unitary cost= 38,750 / 1,550
Unitary cost= $25
Explain the biggest danger of not recording your transactions in a separate registry
Answer:
Good records allow you to identify all of your assets, expenses, income, and liabilities. This lets you see your strengths and weaknesses of your business, which will allow you to make much better financial decisions.
The biggest danger of not recording your transactions in a separate registry is that you would not be able to keep accurate records.
This may lead to issues whereby there are inaccurate records. This can impede the growth of your business.
Without proper records, you cannot control your resources and can also stocks and fixed assets could be tampered with.
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On June 1, 2018, Stellar Company and Pearl Company merged to form Martinez Inc. A total of 733,000 shares were issued to complete the merger. The new corporation reports on a calendar-year basis. On April 1, 2020, the company issued an additional 577,000 shares of stock for cash. All 1,310,000 shares were outstanding on December 31, 2020. Martinez Inc. also issued $600,000 of 20-year, 8% convertible bonds at par on July 1, 2020. Each $1,000 bond converts to 42 shares of common at any interest date. None of the bonds have been converted to date. Martinez Inc. is preparing its annual report for the fiscal year ending December 31, 2020. The annual report will show earnings per share figures based upon a reported after-tax net income of $1,475,000. (The tax rate is 20%.) Determine the following for 2020.
a. The number of shares to be used for calculating:_______
b. The earnings figures to be used for calculating: ________
Answer:
a. The number of shares to be used for calculating:_______
basic EPS = 733,000 + (577,000 x 9/12) = 1,165,750 sharesdiluted EPS = 1,165,750 + (600,000/1,000 x 42) = 1,190,950b. The earnings figures to be used for calculating: ________
basic EPS = net income = $1,475,000diluted EPS = $1,475,000 + ($600,000 x 8%) - (20% x $600,000 x 8%) = $1,475,000 + $48,000 - $9,600 = $1,513,400Carmelita Inc., has the following information available:
Costs from Beginning Inventory Costs from current Period
Direct materials $5,800 $22,200
Conversion costs 6,400 149,800
At the beginning of the period, there were 600 units in process that were 42% complete as to conversion costs and 100% complete as to direct materials costs. During the period, 4,700 units were started and completed. Ending inventory contained 300 units that were 35% complete as to conversion costs and 100% complete as to materials costs. The company uses the FIFO process cost method. Round cost per unit figures to two cents, i.e., $2.22, when calculating total costs.
The total costs that will be transferred into Finished Goods for units started and completed were:________
a. $165,932
b. $111,174
c. $237,666
d. $178,696
Answer:
Carmelita Inc.The total costs that will be transferred into Finished Goods for units started and completed were:________
$168,777.00
Explanation:
a) Data and Calculations:
Direct Materials Conversion
Beginning Inventory $5,800 $6,400
Costs from current period 22,200 149,800
Total costs of production $28,000 $156,200
Equivalent units of production:
Units Direct Materials Conversion
Beginning Inventory 600 0 348 (58%)
Started and completed 4,700 4,700 (100%) 4,700 (100%)
Ending Inventory 300 300 (100%) 105 (35%)
Total equivalent units 5,000 5,153
Cost per equivalent unit:
Direct Materials Conversion
Total costs of production $28,000 $156,200
Total equivalent units 5,000 5,153
Cost per equivalent unit $5.60 $30.31
Costs assigned to units:
Direct Materials Conversion Total
Beginning Work in Process $0 $10,547.88 $10,547.88
Started and completed $26,320 142,457.00 168,777.00
Ending Work in Process 1,680 3,182.55 4,862.55
Total costs assigned $28,000 $156,188 $184,187.43
I wanna know about debit and credit full explanation
Answer:
Explanation:
A debit is an entry made in an account. It either increases an asset or expense account or decreases equity, liability, or revenue accounts.
A credit is an entry alsom made in an account. It either increases equity, liability, or revenue accounts or decreases an asset or expense account.
Answer:
CREDIT vs. DEBIT
Explanation:
Debit :- A debit is an accounting entry that results in either an increase in assets or a decrease in liabilities on a company's balance sheet ... For instance , if a firm takes out a loan to purchase equipment , it would debit fixed assets and at the same time credit a liabilities account , depending on the nature of the loan .
Credit :- Generally defined as a contractual agreement in which a borrower receives something of value now and agrees to repay the lender at a later date—generally with interest .
Main Difference :- When you use a debit card, the funds for the amount of your purchase are taken from your checking account in almost real time . When you use a credit card , the amount will be charged to your line of credit , meaning you will pay the bill at a later date , which also gives you more time to pay .
The personal computer market is very competitive and is influenced by many internal and external factors. Some of the uncontrollable factors that influence the personal computer market include: political, economical, social and technological factors that can have an impact on the organizations strategy.
a. True
b. False
Answer:
A
Explanation:
Lance Whittingham IV specializes in buying deep discount bonds. These represent bonds that are trading at well below par value. He has his eye on a bond issued by the Leisure Time Corporation. The $1,000 par value bond pays 6 percent annual interest and has 15 years remaining to maturity. The current yield to maturity on similar bonds is 14 percent.
(a) What is the current price of the bonds? Use Appendix B and Appendix D. (Round "PV Factor" to 3 decimal places, intermediate and final answers to 2 decimal places. Omit the "$" sign in your response.) Current price ________ $
(b) By what percent will the price of the bonds increase between now and maturity? (Round "PV Factor" to 3 decimal places, intermediate and final answers to 2 decimal places. Omit the "%" sign in your response.) Price increases by __________ %
Answer:
a. $508.63
b. 96.6%
Explanation:
a. Bond price = Present value of coupon payments + Present value of par value
Coupon = 6% * 1,000
= $60
Bond price = 60 * (( 1 - (1 + 14%)⁻¹⁵) / 14%) + 1,000 / ( 1 + 14%)¹⁵
= 508.62656
= $508.63
b. At maturity, the bond will return back to its par value of $1,000.
= (1,000 - 508.63) / 508.63
= 96.6%
you lend a friend 10,000 dollars for which your friend will repay you 27,027 dollars at the end of 5 years. What interest rate are you charging your friend?
Answer:
The interest rate is "21.999%".
Explanation:
The given values are:
Amount lent,
= 10,000
Amount repaid,
= 27,027
Years (n),
= 5
As we know,
⇒ [tex]Amount \ repaid = Amount \ lent\times (1+r)^n[/tex]
On substituting the given values, we get
⇒ [tex]27,027=10,000\times (1+r)^5[/tex]
⇒ [tex]\frac{27,027}{10,000}=(1+r)^5[/tex]
⇒ [tex]2.7027=(1+r)^5[/tex]
⇒ [tex]1+r = (2.7027)^{(1/5)}[/tex]
⇒ [tex]1+r=1.21999[/tex]
On subtracting "1" from both sides, we get
⇒ [tex]1+r-1=1.21999-1[/tex]
⇒ [tex]r=0.21999[/tex]
i.e.,
⇒ [tex]r=21.999 \ percent[/tex]
Harbour Company makes two models of electronic tablets, the Home and the Work. Basic production information follows:
Home Work
Direct materials cost per unit 30 48
Direct labor cost per unit 20 30
Sales price per unit 300 500
Expected production per month 700units 400units
Harbour has monthly overhead of $175,200, which is divided into the following cost pools:
Setup costs $ 68,800
Quality control 58,400
Maintenance 48,000
Total $ 175,200
The company has also compiled the following information about the chosen cost drivers:
Home Work Total
Number of setups 42 58 100
Number of inspections 340 390 730
Number of machine hours 1,700 1,300 3,000
Required:
1. Suppose Harbour uses a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. (Do not round your intermediate calculations.)
2. Calculate the production cost per unit for each of Harbour’s products under a traditional costing system. (Round your intermediate calculations and final answers to 2 decimal places.)
3. Calculate Harbour’s gross margin per unit for each product under the traditional costing system.(Round your intermediate calculations and final answers to 2 decimal places.)
4. Select the appropriate cost driver for each cost pool and calculate the activity rates if Harbour wanted to implement an ABC system.
5. Assuming an ABC system, assign overhead costs to each product based on activity demands.
6. Calculate the production cost per unit for each of Harbour’s products in an ABC system. (Round your intermediate calculations and final answers to 2 decimal places.)
7. Calculate Harbour’s gross margin per unit for each product under an ABC system. (Round your intermediate calculations and final answers to 2 decimal places.)
8. Compare the gross margin of each product under the traditional system and ABC. (Round your answers to 2 decimal places.)
Answer:
Harbour Company
1. Overhead rate, using traditional costing system with machine hours as the cost driver:
Predetermined rate = $175,200/3,000 = $58.40
Overhead Cost assigned to each product:
Home Work
Expected production 1,700 1,300
Cost assigned = $99,280 $75,920
2. Production cost per unit:
Home Work
Expected production 700 units 400 units
Direct materials cost $21,000 (30 * 700) $19,200 (48 * 400)
Direct labor cost 14,000 (20 * 700) 12,000 (30 * 400)
Overhead cost 99,280 75,920
Total costs $134,280 $107,120
Cost per unit $191.83 $267.80
3. Gross margin per unit:
Home Work
Sales price per unit $300.00 $500.00
Cost price per unit 191.83 267.80
Gross margin per unit $108.17 $232.20
4. Activity Rates, using ABC system:
Cost Pools: Cost Drivers Usage Rates
Setup costs $ 68,800 Number of setups 100 $688
Quality control 58,400 Number of inspections 730 $80
Maintenance 48,000 Number of machine hours 3,000 $16
5. Assignment of overhead costs to each product, using ABC:
Rate Home Work
Setup costs $ 68,800 $688 $28,896 (42* $688) $39,904 (58*$688)
Quality control 58,400 $80 27,200 (340*$80) 31,200 (390*$80)
Maintenance 48,000 $16 27,200 (1,700*$16) 20,800 (1,300*$16)
Total overhead $175,200 $104,096 $91,904
6. Production costs:
Home Work
Expected production 700 units 400 units
Direct materials cost $21,000 (30 * 700) $19,200 (48 * 400)
Direct labor cost 14,000 (20 * 700) 12,000 (30 * 400)
Overhead cost 104,096 91,904
Total costs $139,096 $123,104
Cost per unit $198.71 $307.76
7. Gross margin per unit:
Home Work
Sales price per unit $300.00 $500.00
Cost price per unit 198.71 307.76
Gross margin per unit $101.29 $192.24
8. Gross margins per unit compared:
Home Work
Traditional costing system $108.17 $232.20
ABC costing system $101.29 $192.24
ABC system looks more equitable than the traditional costing system as the gross margin per unit is reduced for each product line.
Explanation:
a) Data and Calculations:
Home Work
Direct materials cost per unit 30 48
Direct labor cost per unit 20 30
Sales price per unit 300 500
Expected production per month 700 units 400 units
Monthly overhead costs = $175,200
Cost Pools: Cost Drivers
Home Work Total
Setup costs $ 68,800 Number of setups 42 58 100
Quality control 58,400 Number of inspections 340 390 730
Maintenance 48,000 Number of machine hours 1,700 1,300 3,000
Total $ 175,200
Three years ago, you invested $3,350.00. Today, it is worth $4,100.00. What rate of interest did you earn
Answer:
6.97%
Explanation:
the formula to be used is
The formula for calculating future value:
FV = P (1 + r)^n
FV = Future value
P = Present value
R = interest rate
N = number of years
$4,100.00 = $3,350.00 x ( 1 + r)^3
divide both sides of the equation by $3,350.00
$4,100.00 / $3,350.00 = ( 1 + r)^3
1.223881 = ( 1 + r)^3
find the cube root of both sides
1.069661 = 1 + r
r = 6.97%
A firm is considering three capacity alternatives: A, B, and C. Alternative A would have an annual fixed cost of $105000 and variable costs of $24 per unit. Alternative B would have annual fixed costs of $126000 and variable costs of $25 per unit. Alternative C would have fixed costs of $82000 and variable costs of $37 per unit. Revenue is expected to be $52 per unit.
a. Which alternative has the lowest break-even quantity?
b. Which alternative will produce the highest profits for an annual output of 10,000 units?
c. Which alternative would require the lowest volume of output to generate an annual profit of $50,000?
Solution :
Alternative A Alternative B Alternative C
Annual fixed cost 105000 126000 82000
Variable fixed cost 24 25 37
a). We have to find out the Break even quantity :
Break Even quantity for A [tex]$=\frac{\text{annual fixed cost}}{(\text{price - variable cost per unit})}$[/tex]
[tex]$=\frac{105000}{52-24}$[/tex]
= 3750 units
Break Even quantity for B [tex]$=\frac{\text{annual fixed cost}}{(\text{price - variable cost per unit})}$[/tex]
[tex]$=\frac{126000}{52-25}$[/tex]
= 4666 units
Break Even quantity for C [tex]$=\frac{\text{annual fixed cost}}{(\text{price - variable cost per unit})}$[/tex]
[tex]$=\frac{82000}{52-37}$[/tex]
= 5466 units
Therefore, Alternate A has the lowest Break Even quantity.
b). Now,
[tex]$\text{Profit} = (\text{price - variable cost per unit}) \times \text{units to sell - total fixed cost}$[/tex]
[tex]$\text{Profit of A} = (52 - 24) \times 10000 - 105000$[/tex]
= 280,000 - 105,000
= 175,000
[tex]$\text{Profit of B} = (52 - 25) \times 10000 - 126000$[/tex]
= 270,000 - 126,000
= 144,000
[tex]$\text{Profit of C} = (52 - 37) \times 10000 - 82000$[/tex]
= 150,000 - 105,000
= 45,000
Thus, alternate A has the highest amount of profit.
c).
[tex]$\text{Units of target profit = break even quantity} + \frac{\text{target profit} }{(\text{price - variable cost per unit })}$[/tex]
Units of the target profit for A [tex]$=3750 + \frac{50000}{52-24}$[/tex]
= 5535 units
Units of the target profit for B [tex]$=4666 + \frac{50000}{52-25}$[/tex]
= 6517 units
Units of the target profit for C [tex]$=5466 + \frac{50000}{52-37}$[/tex]
= 8799 units
Thus Alternative A will require the lowest volume of the output.
A grocery store that uses local distributors is am example of what stage of globalization
Answer: Domestic stage
Explanation:
In the domestic stage of production, the entity is only involved in the domestic arena. The production facilities they have are limited to the country they are in and they only operate in the domestic market and at this point, the company is not trying to get into foreign markets.
The grocery store above uses only local distributors which means that they are only servicing the local market which therefore puts them at the domestic stage of globalization.
at the beginning of the month there were no units in beginning work in process and 115,000 units were begun during the month. At the end of the month there were 40,000 units that were 30% complete as to conversion costs in ending work in process. If all materials are included when the production begins, the equivalent units for conversion costs is:
Answer:
The equivalent units for conversion costs is 87,000 units
Explanation:
First, we need to calculate the completed during the month
Completed units = Units begun during the month - Units in Work in process
Completed units = 115,000 - 40,000
Completed units = 75,000 units
Now calculate the equivalent unit in respect of conversion cost as follow
Equivalent units ( Conversion cost ) = Units completed in the month + ( Units in work in process x percentage of completion )
Equivalent units ( Conversion cost ) = 75,000 units + ( 40,000 x 30% )
Equivalent units ( Conversion cost ) = 75,000 units + 12,000 unints
Equivalent units ( Conversion cost ) = 87,000 units
Payment for goods purchased should be vouched with the help of______
Answer:
Payment for goods purchased should be vouched with the help of Creditors statement.
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