Answer:
Unitary cost= $12
Explanation:
Giving the following information:
direct materials $5
direct labor $4
variable overhead $3
The variable costing method incorporates all variable production costs (direct material, direct labor, and variable overhead) to calculate the product unitary cost.
Unitary cost= 5 + 4 + 3= $12
The per-unit manufacturing cost under variable Unitary cost is = $12
How to Calculate Unitary cost?
Giving the following information as per the question below:
The direct materials are $5
Then direct labor is $4
After that variable overhead is $3
Then The variable costing method incorporates all variable production costs (direct material, direct labor, and also variable overhead) to calculate the product unitary cost.
Therefore, The Unitary cost is = 5 + 4 + 3= $12
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What is the purpose of internal controls? Companies use strong internal controls to guarantee that loss is eliminated. Internal controls are used by managers as a way to reduce outstanding customer balances. Managers utilize internal controls as a basis of employee performance reviews. To help managers know if the business is receiving the assets and services it has paid for.
Answer:
The correct answer is: Companies use strong internal controls to guarantee that loss is eliminated.
Explanation:
The purpose of internal controls in an organization is to reduce losses.
It can be defined as the set of methods and procedures used by a company to ensure that its results are reliable, protection of the company's assets, efficiency in the allocation of resources, etc.
Effective internal control helps an organization to obtain essential information for making offensive or defensive decisions, therefore it corresponds to essential tools in the risk management process that seeks to reduce financial losses and assists in reaching the goals and objectives determined by the company's strategic planning .
The Company uses a periodic inventory system. For specific identification, ending inventory consists of 215 units, where 190 are from the January 30 purchase, 5 are from the January 20 purchase, and 20 are from beginning inventory. Determine the cost assigned to ending inventory and to cost of goods sold using (a) specific identification, (b) weighted average, (c) FIFO, and (d) LIFO.
Answer:
Ending inventory:
(a) specific identification = $2,720(b) weighted average = $2,810.05(c) FIFO = $2,687.50(d) LIFO = $3,010Cost of goods sold:
(a) specific identification = $6,495(b) weighted average = $6,404.95(c) FIFO = $6,527.50(d) LIFO = $6,205Explanation:
Date Activity Units Cost Total
Jan. 1 Beg. inventory 215 $14 $3,010
Jan. 10 Sales 165
Jan. 20 Purchase 160 $13 $2,080
Jan. 25 Sales 190
Jan. 30 Purchase 330 $12.50 $4,125
total Purchases 705 $13.07 $9,215
Ending inventory:
(a) specific identification = (190 x $12.50) + (5 x $13) + (20 x $14) = $2,720
(b) weighted average = 215 x $13.07 = $2,810.05
(c) FIFO = 215 x $12.50 = $2,687.50
(d) LIFO = 215 x $14 = $3,010
Cost of goods sold:
(a) specific identification = $9,215 - $2,720 = $6,495
(b) weighted average = $9,215 - $2,810.05 = $6,404.95
(c) FIFO = $9,215 - $2,687.50 = $6,527.50
(d) LIFO = $9,215 - $3,010 = $6,205
Nathan's Athletic Apparel has 1,200 shares of 7%, $100 par value preferred stock the company issued at the beginning of 2020. All remaining shares are common stock. The company was not able to pay dividends in 2020, but plans to pay dividends of $18,000 in 2021. Required: 1. & 2. How much of the $18,000 dividend will be paid to preferred stockholders and how much will be paid to common stockholders in 2021, assuming the preferred stock is cumulative? What if the preferred stock were noncumulative?
Answer:
Nathan's Athletic Apparel
1. Preferred Stock Dividend = $120,000 x 7% = $8,400 for one year
For two years = $16,800 ($8,400 x 2)
Common Stock Dividend = $1,200 ($18,000 - $16,800)
2.If the preferred stock were noncumulative, the dividends would be:
Preferred Stock Dividend = $120,000 x 7% = $8,400
Common Stock Dividend = $9,600 ($18,000 - $8,400)
Explanation:
Preferred Stockholders' Equity = $120,000 (1,200 x $100)
Cumulative preferred stock is the type of preferred stock that accumulates unpaid dividends. If in any year the preferred dividend was not paid, the amount that was supposed to be paid would be carried forward to the next year when dividend is paid unlike an ordinary preferred stock that does not attract the arrears of dividend that was not paid in any given year.
MC Qu. 137 Clayborn Company deposits... Clayborn Company deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of business on May 31, its Cash account shows a debit balance of $24,525. Clayborn's May bank statement shows $21,800 on deposit in the bank. Determine the adjusted cash balance using the following information: Deposit in transit $ 7,450 Outstanding checks $ 6,100 Bank service fees, not yet recorded by company $ 100 A NSF check from a customer, not yet recorded by the company $ 1,275 The adjusted cash balance should be:
Answer:
The adjusted cash balance is $23,150.
Explanation:
The correct cash balance can only be verified through preparation of a bank reconciliation statement.
The first step is to update the Cash Book Bank balance as follows ;
Debits :
Balance as at May 31 $24,525
Totals $24,525
Credits:
Bank service fees $100
Dishonored Check $1,275
Balance as per updated cash book $23,150
Totals $24,525
The next step is to prepare a Bank Reconciliation Statement.
Bank Reconciliation Statement as at May 31.
Balance at bank as per the cash book (updated) $23,150
Add Unpresented cheques $ 6,100
Less Lodgements not yet credited ($ 7,450)
Balance as per bank statement $21,800
Conclusion :
The adjusted cash balance is $23,150.
Larkspur Appliance Co. manufactures low-price, no frills appliances that are in great demand for rental units. Pricing and cost information on Larkspur main products are as follows. Item Standalone Selling Price (Cost) Refrigerator $500 ($260 ) Range 570(270 ) Stackable washer/dryer unit 690(400 ) Customers can contract to purchase either individually at the stated prices or a three-item bundle with a price of $1,800.The bundle price includes delivery and installation. Larkspur also provides installation (not a separate performance obligation). Respond to the requirements related to the following independent revenue arrangements for Larkspur Appliance Co. 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. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)
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).
The monopolist should NEVER produce in the Question 10 options: range of output for which there is a price elasticity exceeding one. range of output for which the price elasticity of demand is infinity. elastic segment of its demand curve because it can increase total revenue and reduce total cost by lowering price. inelastic segment of its demand curve because further lowering of the price reduces total revenue.
Answer:
inelastic segment of its demand curve because further lowering of the price reduces total revenue
Explanation:
Monopolistic competition is a state of the industry that deals with several firms that are closely linked to each other but offer distinct goods. In fact, this market provides free entry and exit
Therefore the monopolist never produced inelastic section of the demand curve as the price should be decline that results into fall in the total revenue
Hence, the last option is correct
Schuepfer Inc. bases its selling and administrative expense budget on budgeted unit sales. The sales budget shows 2,700 units are planned to be sold in March. The variable selling and administrative expense is $3.20 per unit. The budgeted fixed selling and administrative expense is $35,770 per month, which includes depreciation of $4,200 per month. The remainder of the fixed selling and administrative expense represents current cash flows. The cash disbursements for selling and administrative expenses on the March selling and administrative expense budget should be:___________.
a. $40,210
b. $44,410
c. $31,570
Answer:
Total cash disbursement= $40,210
Explanation:
Giving the following information:
The sales budget shows 2,700 units are planned to be sold in March. The variable selling and administrative expense are $3.20 per unit.
The budgeted fixed selling and administrative expense are $35,770 per month, which includes depreciation of $4,200 per month.
The depreciation expense is not a cash disbursement.
Total cash disbursement= total variable cost + total fixed cost
Total cash disbursement= 2,700*3.2 + (35,770 - 4,200)
Total cash disbursement= $40,210
Give three examples of business processes or operations that would benefit significantly from having detailed real-time or near real-time data and identify the benefits.
Answer:
Business Processes/Operations that would benefit from having detailed real-time or near real-time data are:
Air Tower/Radar Monitoring OperationsHualage/Logistics OperationsForex/Stock Trading TransactionsExplanation:
Lower Risk: Real-time data in operations lowers risk, minimizes room for errors are decisions for course correction are made instantly as the data occur.Improved Efficiency: to make decisions on the spot based on real data mean to cut down on time spent before decisions are made. Hence, increased efficiency.Lower costs: Real-time collection and use of data imply automated systems. An Automated system allows for instant decisions without requiring the accumulation of paper trails. In most cases, real-time data also provide uncommon insights into the deep operations of the company.
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Students arrive at the Administrative Services Office at an average of one every 15 minutes, and their requests take on average 10 minutes to be processed. The service counter is staffed by only one clerk, Judy Gumshoes, who works eight hours per day. Assume Poisson arrivals and exponential service times.
a. What percentage of time is Judy idle?
b. How much time, on average, does a student spend waiting in line?
c. How long is the (waiting) line on average?
d. What is the probability that an arriving student (just before entering the Administrative Services Office) will find at least one other student waiting in line?
Answer:
a) %idle time = 0.33
b)40.2minutes
c)40.02customers
d)0.5219
Step-by-step explanation:
It was said in the question Students arrive at the Administrative Services Office at an average of one every 15 minutes which means that
λ = 60/15= 4customers/hr
It was stated that their requests take on average 10 minutes to be processed which means that
μ = average of 10minutes = 60/10 = 6customers/hr
Then let us use these information to solve the given questions
a) percentage when judy was idle = (1- λ/μ)= 1- 0.67= 0.33
%service time = 0.67
%idle time = 0.33
b)To calculate How much time, on average that a student spend waiting in line then we make use of the formula below
= λ/ μ( μ- λ)
= 0.67hrs = 0.67 x60 = 40.2minutes
c) To calculate How long the waiting line on average;
= average waiting time x arrival rate = 0.67hrs x 6customers/hr
= 40.02customers
d) the probability that an arriving student will find at least one other student waiting in line is calculated below;
P( idle time i.e no customer to attend to) = 0.33
P1( Probability of having a customer to attend to) = 0.33 x 0.67= 0.2211
P( Probability of having 2 customer to attend to) = 0.33 x 0.67x0.67 = 0.1481
Therefore, the probability of finding at least one customer = 1 -[ po + p1]
= 1 - 0.33- 0.1481 = 0.5219
Which of the following statements is CORRECT?a. Ethical behavior is not influenced by training and auditing procedures. People are either ethical or they are not, and this is what determines ethical behavior in business.b. If someone deliberately understates costs and thereby causes reported profits to increase, this can cause the stock price to rise above its intrinsic value. The stock will probably fall in the future. Both those who participated in the fraud and the firm itself can be prosecuted.c. Ethics is not an important consideration in business and in business schools.d. There are many types of unethical business behavior. One example is where executives provide information that they know is incorrect to outsiders. It is illegal to provide such information to federally regulated banks, but it is not illegal to provide it to stockholders because they are the owners of the firm.e. If a lower level person in a firm does something illegal, like "cooking the books," to understate costs and thereby artificially increase profits because he or she was ordered to do so by a superior, the lower level person cannot be prosecuted but the superior can be prosecuted.
Answer: b. . If someone deliberately understates costs and thereby causes reported profits to increase, this can cause the stock price to rise above its intrinsic value. The stock will probably fall in the future. Both those who participated in the fraud and the firm itself can be prosecuted.
Explanation:
Ethics in business ad organization is very vital towards the accomplishment of goals in every organization. Ethical behavior can be influenced by training and auditing procedures.
It should be noted that when someone understates the cost intentionally maybe with the person trying to steal from the company. This can lead to the reported profits of the company to increase, and thereby cause the stock price to rise above its intrinsic value.
If eventually the stock will fall in the future, everyone who took part in this fraudulent activity and even the company itself can be prosecuted. Performing in fraudulent activities by a company or its workers will make the individuals or the company lose the trust of its clients.
Option B is the correct answer.
Credit Card Debt - Application The function D(t) can be used to approximate the total average credit card debt in a U.S. household (in thousands of dollars) t years after 1995. Interpret the meaning of the statement: D(23) = 21.5. In the year , the total average credit card debt for a U.S. household will be $___________.
Answer: 2018; $21,500
Explanation:
The 't' in D(t) represents how many years after 1995 the function is referring to. This question has the 't' at 23 so this is 23 years after 1995.
= 1995 + 23
= 2018
The average household debt is given in thousands of dollars therefore;
= 21.5 * 1,000
= $21,500
In the year 2018, the total average credit card debt for a U.S. household will be $21,500.
Knowledge Check 01 On February 13, a jewelry store sells an engagement ring with a sales price of $10,000 to a nervous young man, who pays in cash. The sale is subject to a 9.75 percent sales tax. Prepare the revenue portion of the February 13 by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.
Answer:
Cash Dr 10975
To Sales $10,000
To Sales Tax Payable $975 ($10,000 × 9.75%)
(Being the cash is recorded)
Explanation:
The journal entry is shown below;
Cash Dr 10975
To Sales $10,000
To Sales Tax Payable $975 ($10,000 × 9.75%)
(Being the cash is recorded)
For recording this we debited the cash as it increased the assets and credited the sales and sales tax payable as it also increased the revenue and liabilities
The Purple Martin has annual sales of $687,400, total debt of $210,000, total equity of $365,000, and a profit margin of 5.9 percent. What is the return on assets
Answer:
7.1%
Explanation:
Purple martin has an annual sales of $687,400
The total debt is $210,000
Total equity is $365,000
Profit margin is 5.9%
= 5.9/100
= 0.059
The first step is to calculate the net income
Net income= sales×profit margin
= $687,400×0.059
= $40,556.6
The next step is to calculate the total assets
Total assets= Total debt+Total equity
= $210,000+$365,000
= $575,000
Therefore, the return on assets can be calculated as follows
ROA= Net income/Total assets
= 40,556.6/575,000
= 0.0705×100
= 7.1%
Hence the return on assets is 7.1%
Kuhn company is considering a new project that will require an initial investment of $4 million. It has a target capital structure of 58% debt, 6% preferred stock and 36% common equity. Kuhn has noncallable bonds outstanding that mature in 15 years with a face value of $1,000, an annual coupon rate of 11%, and a market price of $1,555.38. The yield on the company's current bonds is a good approximation of the yield on any new bonds that it issues. The company can sell shares of preferred stock that pay an annual dividend of $8 at a price of $92.25 per share. You can assume that Jordan does not incur any flotation costs when issuing debt and preferred stock. Kuhn does not have any retained earnings available to finance this project, so the firm will have to issue new common stock to help fund it. Its common stock is currently selling for $33.35 per share, and it is expected to pay a dividend of $2.78 at the end of next year. Flotation costs will represent 8% of the funds raised by issuing new common stock. The company is projected to grow at a constant rate of 9.2%, and they face a tax rate of 40%. What is Kuhn's WACC for this project? Please show work.
a. 7.65%
b. 9.00%
c. 10.35%
d. 9.45%
Answer:
b. 9.00%
Explanation:
For the computation of WACC first we need to follow some steps which is shown below:-
Step 1
Cost of debt = 5.48% which is explained with the help of attachment.
Given that,
Present value = $1,555.38
Future value or Face value = $1,000
PMT = 1,000 × 11% = $110
NPER = 15 years
The formula is shown below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after applying the above formula, the cost of debt is
Step 2
Cost of preferred stock = Annual preferred dividend ÷ Price
= $8 × $92.25
= 0.086721
Step 3
Cost of equity = Dividend ÷ (Stock price × (1 - flotation cost)) + Growth rate
= 2.78 ÷ (33.35 × (1 - 0.08)) + 0.092
= 18.26%
WACC = Weight of debt × Cost debt) + (Weight of preference stock × Cost of preference stock) + (Weight of equity × cost of equity)
= (0.58 × (0.0548 × (1 - 0.4)) + (0.06 × 0.086721) + (0.36 × 0.1826068)
= 9.00%
Kuhn's WACC for this project will be 9.00%.
Based on the information given, the cost of preferred stock will be:
= Annual preferred dividend / Price
= $8 / $92.25
= 0.086721
Then, the cost of equity will be calculated as:
= Dividend ÷ (Stock price × (1 - flotation cost)) + Growth rate
= 2.78 ÷ (33.35 × (1 - 0.08)) + 0.092
= 18.26%
Therefore, the weighted average cost of capital (WACC) will be:
= (0.58 × (0.0548 × (1 - 0.4)) + (0.06 × 0.086721) + (0.36 × 0.1826068)
= 9.00%
Therefore, Kuhn's WACC for this project will be 9.00%.
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.Many of the same environmental factors, such as cultural factors, that operate in the domestic market also exist internationally. Discuss the key cultural factors Starbucks had to consider as it expanded into China.
Answer:
There are three main cultural factors that influece the consumer's behavior when it comes to the decision making process and those are: the culture, the subculture and the social class. Below is explained briefly the importance of them.
Explanation:
To begin with, the most important cultural factor that tend to influence in the particular society and more specifically in the consumers is the culture itself. The culture of the country will show very positive or negative influences regarding the purchase of the product when it comes to the buyers' decision's process and therefore that in this case presented Starbucks will have to consider the culture of the whole country as well as the social class and the subculture of every region in particular where they planned to establish. The culture will favour or not the purchase of the product if the people are great consumers of coffe or other related products and the social class will influence regarding how much will it cost to buy a coffe or two and where the locations will be, in the neighboorhoods or in the major cities, etc.
true or false For a given labor market, an increase in the productivity (MP) of labor will shift the demand curve for labor rightward. Group of answer choices
Answer:
false
Explanation:
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Use the following information to work the problems. Each problem stands alone.
Bernard Windows is a small company that installs windows. Its cost structure is as follows:
Selling price for each window installation $500
Variable cost of each window installation $400
Annual fixed costs $150,000
#1. This is also TRY IT 3-2 on page 75.
Calculate (a) the breakeven point in units and revenue and (b) the number of windows Bernard Windows must install and the revenues needed to earn a target operating income of $100,000.
#2. TRY IT 3-3 on page 77.
Same information as above but now tax rate is 30%. Calculate the number of windows Bernard Windows must install and the revenues needed to earn a target net income of $63,000.
#3. TRY IT 3-4 on page 82. Calculate the margin of safety in units and dollars and the margin of safety percentage if the company expects to sell 2,400 windows in the year.
#4. TRY IT 3-5 on page 84. Number of units sold is 2500.
Bernard is considering changing its sales compensation for next year. Bernard would pay salespeople a 5% commission next year and reduce fixed costs by $62,500. Calculate the degree of operating leverage at sales of 2,500 units under the two options. Comment briefly on the result.
#5. TEY IT 3-6 on page 87.
Bernard Windows plans to sell two different brands of windows-- Chad and Musk--- and budgets the following:
Chad Musk Total
Expected sales 2500 1000 3500
Revenues (500 and 350 per unit) $1,250,000 $350,000 $1,600,000
Variable cost ( 400 and 275 per unit) $1,000,000 $275,000 $1,275,000
Contribution margin (100 and 75 ) 250,000 $75,000 $325,000
Fixed costs $195,000
Operating income $130,000
Calculate the break even point for Bernard Windows in terms of the (a) number of units sold and (b) revenues.
Answer:
1.(a). Breakeven point (in units) = Fixed cost / Contribution margin per unit
Contribution margin per unit = Selling price per unit - Variable cost per unit
= 500 - 400 = 100 per unit
Breakeven point = 150,000 / 100 per unit
Breakeven point = 1500 units
Breakeven point ( in revenue) = Fixed Cost / Contribution margin ratio
Contribution margin ratio = ( Selling price per unit - Variable cost per unit) / Selling price per unit ×100
= ($500 - $400) / $500 ×100
= 20%
Breakeven point ( in revenue) = $150,000 / 20%
Breakeven point ( in revenue) = $750,000
(b). Let x be the unknown quantity of units Bernard Windows must sell to earn an operating income of $100,000. Selling price is $500
Revenue - Variable cost - Fixed cost = operating income
($500 * x) - ($400*x) - $150,000 = $100,000
($100* x) = $250,000
x = $250,000 / $100 per unit = 2,500 units
Quantity of units required to be sold = 2,500 units
Revenue to earn an operating income of $100,000 is
Revenue = Number of units required to be sold * Selling Price
Revenue = 2,500 * $500 = $1,250,000
2. Target operating income = Target net income / (1 - Tax Rate)
= $63,000 / (1 - 0.30)
= $90,000
In other words, to earn a target net income of $63,000, Bernard Windows Target operating income is $90,000.
Proof: Target operating income $90,000
Tax at 30% ( $90,000*0.30) $27,000
Target net income $63,000
Calculation of number of units Bernard Windows must sell:
Quantity of units required to be sold = Fixed cost + Target operating income / Contribution margin per unit
= $150,000 + $90,000 / $100 = $2,400 units
Quantity of units required to be sold = 2,400 units
Revenue to earn net income of $63,000 is:
Revenue = Number of units required to be sold * Selling price
= 2,400 * $500
Revenue = $1,200,000
3. Margin of Safety = Budgeted revenue - Breakeven revenue
= $1,200,000 - $750,000
Margin of Safety = $450,000
Margin of safety (in units) = Budgeted Sales (units) - Breakeven Sales (units)
= 2,400 - 1,500
Margin of safety (in units) = 900 units
The margin of safety indicated that sales would have to decrease by 900 units and revenue by $450,000 before the breakeven point is reached.
Margin of safety percentage = Margin of safety in dollars / Budgeted revenues
= $450,000 / $1,200,000 * 100 = 37.5%
This result means that revenue would have to decrease substantially, by 60%, to reach the breakeven revenues.
5. Let we assume that the budgeted sales mix (2,500 units of chad windows sold for every 1,000 units of Musk windows sold, that is a ratio of 5:2) will not change at different levels of total unit sales.
Number of units of Contribution Margin
Chad Windows and per unit for Chad Windows
Musk Windows in and Mask Windows Contribution
each bundle margin the bundle
Chad Windows 5 $100 $500
Musk windows 2 $75 $150
Total $650
To calculate breakeven point, we calculate the number of bundles Bernard needs to sell.
Breakeven point in bundles = Fixed cost / Contribution margin per bundle
= $195,000 / $650 = 300 bundles
a. Breakeven point in units of Chad Windows and Musk windows is as follows:
Chad windows: 300 bundles× 5 units per bundle = 1,500 units
Musk windows: 300 bundles ×2 units per bundle = 600 units
Total number of units to breakeven = 1,500 + 600 = 2,100 units
b. The breakeven point in dollars for Chad windows and Musk windows is as follows:
Chad windows: 1,500 units × $500 per unit = $750,000
Musk windows: 600 units ×$350 per unit = $210,000
Breakeven revenue = $750,000 + $210,000 = $960,000
1. Characteristics of oligopoly An oligopolistic market structure is distinguished by several characteristics, one of which is market control by a few large firms. Which of the following are other characteristics of this market structure? Check all that apply. Either similar or identical products Difficult entry Neither mutual interdependence nor mutual dependence No entry Mutual interdependence
Answer:
----Either similar or identical products --------Difficult entry
----Mutual interdependence
Explanation: An Oligopolistic market is a market characterized by few sellers of large firms who sell either similar or differentiated products. Here, Each firm is mutually interdependent as any action from any firms influences the actions of the rest of the competing firms , therefore decisions are made using strategic planning and consideration as competing firms are ready to counter react to any change in any new market action.
Market entry is difficult Because of the already established customer base of the successful operating firms dominating the market.Also venturing into the market requires high capital, technology or additional government licences. Examples of Oligopolistic firms are oil and gas firms, airlines, mass media etc
Market entry is difficult Because of the already established customer base of the successful operating firms dominating the market.
Also venturing into the market requires high capital, technology, or additional government licenses.
The correct options are:
Either similar or identical productsDifficult entry Mutual interdependence
An Oligopolistic market is a market characterized by few sellers of large firms who sell either similar or differentiated products. Each firm is mutually interdependent as any action from any firm influences the actions of the rest of the competing firms.
Therefore decisions are made using strategic planning and consideration as competing firms are ready to counter-react to any change in any new market action.
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A company is evaluating a new 4-year project. The equipment necessary for the project will cost $3,050,000 and can be sold for $670,000 at the end of the project. The asset is in the 5-year MACRS class. The depreciation percentage each year is 20.00 percent, 32.00 percent, 19.20 percent, 11.52 percent, and 11.52 percent, respectively. The company's tax rate is 34 percent. What is the aftertax salvage value of the equipment?
Answer:
$718,606.4
Explanation:
The first step is to calculate the accumulated depreciation
=$3,050,000×(0.2+0.32+0.192+0.1152)
= $3,050,000×0.8272
= $2,522,960
The accumulated depreciation is then subtracted from the book value in purchase to get the book value on sale
= $3,050,000-$2,522,960
= $527,040
The next step is to subtract the book value on sale from the salvage value
= $527,040-$670,000
= -$142,960
Loss of - $142,960
The tax gain on disposal can be calculated as follows
= -$142,960×34/100
= -$142,960×0.34
= -$48,606.4
Therefore, the after-tax salvage value can be calculated as follows
= salvage value-tax disposal
= $670,000-(-48,606.4)
= $670,000+$48,606.4
= $718,606.4
Hence the aftertax salvage value of the equipment is $718,606.4
You plan to borrow $35,000 at a 7.5% annual interest rate. The terms require you to amortize the loan with 7 equal end-of-year payments. How much interest would you be paying in Year 2
Answer:
$2,250
Explanation:
Since terms require you to amortize the loan with 7 equal end-of-year payments, it implies that interest will be paid on the amount outstanding balance for a whole year.
The would be paid in Year 2 can therefore be calculated as follows:
Equal amount of the loan principal = Loan amount / Number of equal end-of-year payments = $35,000 / 7 = $5,000
Loan balance outstanding throughout Year 2 = Loan amount - Year 1 end-of-year payment = $35,000 - $5,000 = $30,000
Year 2 interest payable = Loan balance outstanding throughout Year 2 * Annual interest rate = $30,000 = 7.5% = $2,250.
Therefore, you would be paying $2,250 interest in Year 2.
Prepare a 2020 income statement for Shanta Corporation based on the following information:_________.
Cost of goods sold $490,000
Operating expenses 100,000
Other expenses and losses 30,000
Sales revenue 700,000
Tax rate 30%
Prepare a income statement
SHANTA CORPORATION
Income Statement
For the Year Ended December 31, 2020
Prepare journal entries to record each of the following four separate issuances of stock. A corporation issued 4,000 shares of $5 par value common stock for $35,000 cash. A corporation issued 2,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $40,000. The stock has a $1 per share stated value. A corporation issued 2,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $40,000. The stock has no stated value. A corporation issued 1,000 shares of $50 par value preferred stock for $60,000 cash.
Answer:
1. Dr Cash $35,000
Cr Common Stock $20,000
Cr Paid-in Capital in excess of par value Common Stock $15,000
2.Dr Organization expenses $40,000
Cr Common stock $2,000
Cr Paid-in cap in excess of stated value Common Stock $38,000
3.Dr Organization expenses $40,000
Cr Common stock, no-par value $40,000
4. Dr Cash 60,000
Cr Preferred stock 50,000
Cr Paid-in cap in excess of par value, preferred stock 10,000
Explanation:
1. Based on the information given we told that they issued 4,000 shares of $5 par value of common stock for the amount of $35,000, which means that the transaction will be recorded as:
Dr Cash $35,000
Cr Common Stock $20,000
(4,000 Shares *$ 5 Par Value)
Cr Paid-in Capital in excess of par value Common Stock $15,000
($35,000-$20,000)
2.Since they issued 2,000 shares of no-par common stock estimated to be worth the amount of $40,000. This means that the transaction will be recorded as:
Dr Organization expenses $40,000
Cr Common stock $2,000
(2,000 Shares*$1 stated value)
Cr Paid-in cap in excess of stated value Common Stock $38,000
(40,000-2,000)
3. Based on the information given we were told that they issued 2,000 shares of no-par common estimated to be worth the amount of $40,000 in which the stock has no stated value, this means that the transaction will be recorded as.
Dr Organization expenses $40,000
Cr Common stock, no-par value $40,000
4. Based on the information given we were told that they issued 1,000 shares of $50 par value preferred stock for the amount of $60,000 which means that the transaction will be recorded as:
Dr Cash 60,000
Cr Preferred stock 50,000
(1,000 Shares *$50 par value)
Cr Paid-in cap in excess of par value, preferred stock 10,000
(60,000-50,000)
A fixed asset with a cost of $52,025 and accumulated depreciation of $44,221 is traded for a similar asset priced at $55,501. Assuming a trade-in allowance of $5,664, the recognized loss on the trade is
Answer:
$2,140
Explanation:
When a commercial substance exists in the course of the exchange of an old asset for a new one , the gain or loss on this assets is recognized,
Commercial substance can be said to exist when the exchange assets impact the future cash flow. The extended useful life of the involved assets in the question the the newly acquired asset through exchange support this.
Workings
Cost of the fixed assets = 52,025
Accumulated depreciation = 44,221
Book value = 7,804
Trade in allowance = 5,664
loss = 7,804 - 5664 = 2,140
Where would it be right to apply the product concept?
Answer:
In marketing
Explanation:
The Product concept is the understanding of the best features of a product which a marketer wishes to sell. Before a product is sold, it is very important that the marketer gets a proper understanding of the product. This knowledge would help him convince the customer that the product is the best and would actually meet his needs.
For producers, realizing this need of customers would help them focus on making products with superior quality that can as well meet the requirements of customers. These products should also be able to thrive in a very competitive environment.
Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, the October 9 sale consisted of 55 units from beginning inventory and 185 units from the October 5 purchase; the October 29 sale consisted of 35 units from the October 18 purchase and 75 units from the October 25 purchase. (Round your average cost per unit to 2 decimal places.)
Answer:
Ending inventory:
(a) specific identification = $5,885
(b) weighted average = $5,960
(c) FIFO = $5,750
(d) LIFO = $5,845
Explanation:
Date Activity Units Cost Total
Oct. 1 Beg. inventory 155 $14 $2,170
Oct. 5 Purchase 180 $13.50 $2,430
Oct. 9 Sales 240
Oct. 18 Purchase 140 $13 $1,820
Oct. 29 Sales 110
Oct. 25 Purchase 330 $12.50 $4,125
total Purchases 805 $13.10 $10,545
Cost of goods sold:
(a) specific identification = [(55 x $14) + (185 x $13,50)] + [(35 x $13) + (75 x $12.50)] = $4,660
(b) weighted average = $13.10 x 350 units = $4,585
(c) FIFO = (155 x $14) + (85 x $13.50) + (95 x $13.50) + (15 x $13) = $4,795
(d) LIFO = (180 x $13.50) + (60 x $14) + (110 x $13) = $4,700
Ending inventory:
(a) specific identification = $10,545 - $4,660 = $5,885
(b) weighted average = $10,545 - $4,585 = $5,960
(c) FIFO = $10,545 - $4,795 = $5,750
(d) LIFO = $10,545 - $4,700 = $5,845
A corporation issued 6,000 shares of its $2 par value common stock in exchange for land that has a market value of $84,000. The entry to record this transaction would include:
Answer:
A debit to Land for $12,000
Explanation:
The entry to record in this transaction include a debit to Land for $12,000
Particulars Debit Credit
Land $84,000
Common stock $12,000
(6,000 * $2)
Paid in capital in excess $72,000
of par, common stock
One of the possible objectives of marketing communications is helping consumers evaluate a brand's perceived ability to meet a currently relevant need. Which of the following is a negatively oriented relevant brand need?a) normal depletionb) sensory gratificationc) social approvald) value enhacement
Answer:
) normal depletion
Explanation:
Marketing communications are the different tools employed to increases the awareness of a brand.
A brand needs to be pleasing to the eyes, socially approved and useful to customers.
Depletion is one of the negatively oriented relevant brand need.
I hope my answer helps you
Answer:
normal depletion
Explanation:
Marketing communications are the different tools employed to increases the awareness of a brand.
A brand needs to be pleasing to the eyes, socially approved and useful to customers.
Depletion is one of the negatively oriented relevant brand need.
I hope my answer helps you
Explanation:
Ralph, a cash basis taxpayer, owns an office building that he leases to various tenants. During 20X8, he signed a three-year lease with a tenant and received a check for $16,000 for the following:
Rent for November 1, 2008 to October 1, 2009 $5,000
Advance rent for last three months of lease 600
Security deposit (refundable) 400
For the current year, 2008, Ralph must report income of:__________
a. $6,000
b. $5,600
c. $5,000
d. $832
e. some other amount.
Answer:
b. $5,600
Explanation:
A cash basis taxpayer will report revenues and expenses when they are actually collected or paid for. The business transaction is not directly related to the moment that the payment occurs (unlike accrual accounting).
in this case, Ralph should report all the income related to monthly rental payments = $5,000 (Nov. 2008 - Oct. 2008) + $600 (the three last months of rent) = $5,600. Security deposits are not considered rental revenue, so they should not be reported as such.
You purchased an airplane for $500,000 and will depreciate it using a 7-year an MACRS. Salvage value in year 4 is expected to be $250,000. The airplane is expected to increase revenues by $200,000 per year, however, O&M costs are expected to be $30,000 per year. Your company is in a 40% tax bracket and your MARR is 15%. Show the end of year cash flows for this project for years 0 through 4. What is the Net Present Worth of this investment?
Year 0_____
Year 1____
Year 2______
Year 3_____
Year 4______
NPW_____
Answer:
Year 0 = -$500,000
Year 1 = $130,580
Year 2 = $150,980
Year 3 = $136,980
Year 4 = $433,260
NPV = $65,495
Explanation:
depreciation expense per year under 7 year MACRS table:
year 1 = $500,000 x 14.29% = $71,450
year 2 = $500,000 x 24.49% = $122,450
year 3 = $500,000 x 17.49% = $87,450
year 4 = $500,000 x 12.49% = $62,450
cash flow year 1 = [($200,000 - $30,000 - $71,450) x (1 - 40%)] + $71,450 = $130,580
cash flow year 2 = [($200,000 - $30,000 - $122,450) x (1 - 40%)] + $122,450 = $150,980
cash flow year 3 = [($200,000 - $30,000 - $87,450) x (1 - 40%)] + $87,450 = $136,980
cash flow year 4 = [($200,000 - $30,000 - $62,450 + $93,800 gain on sale) x (1 - 40%)] + $62,450 + $250,000 = $433,260
MARR = 15%
using a financial calculator, NPV = $65,495
You have decided to save $500 a year for the next five years and then increase that amount to $700 a year for the following five years. Which one of these correctly reflects a multiple annuity time line for the future value of your savings?A. The time line will have a $500 cash flow for Years 1-5 and a $700 cash flow for Years 6 - 10. B. The time line will have a -$700 cash flow for Years 1 - 5 and a $500 cash flow for Years 6-10. C. The time line will have a $500 cash flow for Years 1 - 10 and an additional $200, cash flow for Years 6 - 10. D. The time line will have a -$500 cash flow for Years 1 - 10 and an additional -$200 cash flow for Years 6 - 10.
Answer:
A. The time line will have a $500 cash flow for Years 1-5 and a $700 cash flow for Years 6 - 10.
Explanation:
A timeline orders events chronologically. Here, the timeline would list cash flows in the order in which they occur.
Please check the attached image for an image of the timeline.
I hope my answer helps you