Answer:
import tariff is the answer
Answer:
e
Explanation:
it is a terrif that pays
One of the most useful applications of business statistics involves comparing two samples to examine whether a difference between them is significant or more likely due to chance variation from one sample to the next.1. True2. False
Answer: True
Explanation:
Using the p-value (probability of error) approach to hypothesis testing, business analysts are able to compare two samples to see if they are statistically significant or just different by chance.
They compare the data between the two samples and express a p-value. They also set a significance level with the logic being that if the p-value is below the significance level then the difference between the samples is significant.
For example, with a significance level of 0.05, a p-value below this would mean that the difference is significant.
You are a shareholder in a C corporation. The corporation earns $ 1.99$1.99 per share before taxes. Once it has paid taxes, it will distribute the rest of its earnings to you as a dividend. The corporate tax rate is 35 5%, and your personal tax rate on (both dividend and non-dividend) income is 30 0%. How much is left for you after all taxes are paid
Answer:
$0.90 per share is left after all taxes are paid.
Explanation:
This can be calculated as follows:
Corporate tax = Earning per share before corporate tax * Corporate tax rate = $1.99 * 35.5% = $0.71
Earning per share after corporate tax = $1.99 - $0.71 = $1.28
Personal tax = Earning per share after corporate tax * Personal tax rate = $1.28 * 30.0% = $0.39
Earning per share after all taxes = Earning per share after corporate tax - Personal tax = $1.28 - $0.39 = $0.90
Therefore, $0.90 per share is left after all taxes are paid.
In response to the financial crisis that began in 2007, the government began to bail out banks deemed "too big to fail." Critics of this action argued that this would create the prospect of future bailouts and encourage banks to be fiscally irresponsible in the future. This illustrates
Answer:
The moral hazard problem
Explanation:
Moral hazard problem is defined as a situation where a party gets involved in a risky venture knowing that another party will incur the cost of failure.
For example if a borrower knows that he can take borrowed funds and default easily, he will tend to not pay back because the lender will bear the loss.
During the the financial crisis that began in 2007, the government began to bail out banks deemed "too big to fail."
This created fiscal irresponsibility in banks that knew if they are at risk of failing they will be bailed out by the government.
Marshall has received an inheritance and wants to invest a sum of money today that will yield $5,400 at the end of each of the next 10 years. Assuming he can earn an interest rate of 5% compounded annually, how much of his inheritance must he invest today
Answer:
$3,315.13
Explanation:
To determine the amount of inheritance Marshall should invest today, we have to calculate the present value of $5,400.
PV = FV (1 + r)^-n
FV = Future value = $5,400
P = Present value
R = interest rate 5%
N = number of years 10
$5400(1.05^-10) = $3,315.13
I hope my answer helps you
In your opinion which causes of work stress, or organizational stressors, are likely to be among the most common experienced by air traffic controllers? Explain your reasoning.
Answer:
There are four types of organizational stressors: task demands, physical demands, role demands, and interpersonal demands.
For air traffic controllers, task demands are probably the most common organizational stressor that they experience.
Among the task demands, we have the need of quick decisions, critical decisions, and the fact that some information may be incomplete.
The job of an air traffic controller is complex, difficult, requires taking quick, and specially, critical decisions all the time. A bad decision by a traffic controller can be very problematic, and even prove fatal, because of the delicate nature of the job. For all these reasons, air traffic controllers are likely to be subjected to this specific organizational stressor.
Andrea Apple opened Apple Photography on January 1 of the current year. During January, the following transactions occurred and were recorded in the company's books:
1. Andrea invested $13,500 cash in the business.
2. Andrea contributed $20,000 of photography equipment to the business.
3. The company paid $2,100 cash for an insurance policy covering the next 24 months.
4. The company received $5,700 cash for services provided during January.
5. The company purchased $6,200 of office equipment on credit.
6. The company provided $2,750 of services to customers on account.
7. The company paid cash of $1,500 for monthly rent.
8. The company paid $3,100 on the office equipment purchased in transaction #5 above.
9. Paid $275 cash for January utilities.
Based on this information, the balance in the A. Apple, Capital account reported on the Statement of Owner's Equity at the end of the month would be:__________.
a. $31,400.
b. $39,200.
c. $31,150.
d. $40,175.
e. $30,875.
Answer:
2356
Explanation:
3546478967654322 321
6. Problems and Applications Q6 Daniel Patrick Moynihan, the late senator from New York, once introduced a bill that would levy a 10,000 percent tax on certain hollow-tipped bullets. True or False: This tax would generate a lot of tax revenue because of its high rate. True False Why might Senator Moynihan have proposed it? To discourage the use of hollow-tipped bullets To boost the manufacturing industry of hollow-tipped bullets To raise revenue to support law enforcement
Answer: The answer is given below
Explanation:
True.
It is true that Daniel Patrick Moynihan, the late senator from New York, once introduced a bill that would levy a 10,000 percent tax on certain hollow-tipped bullets.
False.
The high rate of the tax doesn't guarantee that it will bring about a large revenue. It should be noted that due to the rise in the tax rate, the revenue of the citizens will start to decrease. Here, we are even talking about a tax rate of 10,000 percent, this is a very high rate and can even lead to the tax revenue to almost be at zero level.
Senator Moynihan have proposed the tax rate in order to discourage the use of hollow-tipped bullets. He believed due to the high rate of tax, this will discourage people from purchasing it and hence lead to reduction in crime rate and other social vices associated with gun killing.
You are set to receive an annual payment of $12,100 per year for the next 17 years. Assume the interest rate is 7 percent. How much more are the payments worth if they are received at the beginning of the year rather than the end of the year
Answer:
The difference in value is worth $8,269 more in money.
Explanation:
Case 1. Payments are made at the end of each year
So here, we will use the annuity formula for computing the present value of payments that we are receiving at the end of each year.
Here
Annual Cash flow is $12,100
Interest Rate "r" is 7%
And
Number of Payments "n" will be 17
Present Value = Cash flow * [1 - 1 / (1+r)^n] / r
By putting values, we have:
Present Value = $12,100 * [1 - 1 / (1 + 7%)^17] / 7%
Present Value = $12,100 * 9.763223
Present Value = $118,135
Now
Cash 2. Payments are arising at the start of each year
Just like the case above, we will use the annuity formula for computing the present value of payments that we are receiving at the start of each year. The first payment will be at worth the same because it is received in today's price.
So
Present Value = Cash flow + Cash flow * [1 - 1 / (1+r)^n] / r
So by putting values, that were used in case 1, we have:
Present Value = $12,100 + $12,100 * (1 - (1/1.07)^16) / 0.07
Present Value = $12,100 + $12,100 * 9.446649
Present Value = $126,404
Difference in Present Value = PV of Case 1 - PV of Case 2
= $126,404 - $118,135 = $8,269
The difference in value is worth $8,269 more in money.
Charlie’s Furniture Store has been in business for several years. The firm's owners have described the store as a "high-price, high-service" operation that provides lots of assistance to its customers. Margin has averaged a relatively high 34% per year for several years, but turnover has been a relatively low 0.4 based on average total assets of $800,000. A discount furniture Store is about to open in the area served by Charlie's, and management is considering lowering prices to compete effectively.Required:a. Calculate current sales and ROI for Charlie’s Furniture Store. (Round your "ROI" to 1 decimal place.)b. Assuming that the new strategy would reduce margin to 20%, and assuming that average total assets would stay the same, calculate the sales that would be required to have the same ROI as Charlie’s currently earns. (Do not round intermediate calculations.)c. Suppose you presented the results of your analysis in parts a and b of this problem to Charlie, and he replied, "What are you telling me? If I reduce my prices as planned, then I have to practically double my sales volume to earn the same return?" Given the results of your analysis, what is the actual amount of increase in sales required? (Do not round intermediate calculations.)d. Now suppose Charlie says, "You know, I'm not convinced that lowering prices is my only option in staying competitive. What if I were to increase my marketing effort? I'm thinking about kicking off a new advertising campaign after conducting more extensive market research to better identify who my target customer groups are." In general, explain to Charlie what the likely impact of a successful strategy of this nature would be on margin, turnover, and ROI.
Answer:
a. Calculate current sales and ROI for Charlie’s Furniture Store.
asset turnover formula = net sales / average assets
0.4 = net sales / $800,000
net sales = $320,000
ROI = net income / investment
net income = $320,000 x 34% = $108,800
ROI = $108,800 / $800,000 = 13.6%
b. Assuming that the new strategy would reduce margin to 20%, and assuming that average total assets would stay the same, calculate the sales that would be required to have the same ROI as Charlie’s currently earns.
net income = net sales x 20% (new margin)
net sales = $108,800 / 20% = $544,000
c. Suppose you presented the results of your analysis in parts a and b of this problem to Charlie, and he replied, "What are you telling me? If I reduce my prices as planned, then I have to practically double my sales volume to earn the same return?" Given the results of your analysis, what is the actual amount of increase in sales required?
sales increase = ($544,000 - $320,000) / $320,000 = 70% increase
d. Now suppose Charlie says, "You know, I'm not convinced that lowering prices is my only option in staying competitive. What if I were to increase my marketing effort? I'm thinking about kicking off a new advertising campaign after conducting more extensive market research to better identify who my target customer groups are." In general, explain to Charlie what the likely impact of a successful strategy of this nature would be on margin, turnover, and ROI.
An extensive market research and a "successful" marketing campaign are generally expensive. Even if the marketing campaign is really successful in increasing sales, costs would also increase. So the equation may or may not change, depending if the contribution margin of the additional units sold will be able to cover the expenses of a complex marketing campaign. If you spend $100 to earn $100 more, your situation hasn't changed at all. Which means that net income may or may not increase, therefore, the profit margin, ROI and asset turnover may not change.
McConnell Corp. has a book value of equity of $13,480. Long-term debt is $8,750. Net working capital, other than cash, is $3,605. Fixed assets are $17,930 and current liabilities are $1,850.
Required:
a. How much cash does the company have?
b. What is the value of the current assets?
Answer:
1. $695
2.$6,150
Explanation:
1. Calculation of How much cash does the company have.
The total liabilities and equity of the company will be the net book worth in addition with the current liabilities as well as long-term debt.
Hence,
Total liabilities and equity = $13,480 + 1,850 + 8,750
Total liabilities and equity = $24,080
The of $24,080 is equal to the total assets of the company because the total assets are the Total of all assets in which cash is an asset. Therefore the cash account must be equal to total assets less all other assets.
Hence,
Cash = $24,080 – 17,930 – 3,605 – 1,850
Cash = $695
2. Calculation of the value of the current asset
The total of the Net Working Capital will be:
Net Working Capital = $695 + $3,605
Net Working Capital = $4,300
Calculation of the total current assets using the Net Working Capital equation.
Net Workingg Capital = CA – CL
$4,300 = CA – $1,850
CA = $6,150
Blossom Chemicals Company acquires a delivery truck at a cost of $31,200 on January 1, 2022. The truck is expected to have a salvage value of $4,200 at the end of its 4-year useful life. Compute annual depreciation for the first and second years using the straight-line method.
Answer:
$6,750
Explanation:
The computation of the annual depreciation using the straight line method for the first and second year is shown below:
= (Original cost - residual value) ÷ (useful life)
= ($31,200 - $4,200) ÷ (4 years)
= ($27,000) ÷ (4 years)
= $6,750
In this method, the depreciation is the same for all the remaining useful life
So in the given case, the first year and the second year depreciation is $6,750 respectively and the same is to be charged every year
Kramer Manufacturing produces blenders. Its total fixed costs are $30,000. Its variable costs are $55.00 per blender. As production of blenders increases (within the relevant range), fixed costs will
Answer:
As the production of blenders increases, unitary fixed costs decreases.
Explanation:
Its total fixed costs are $30,000. Its variable costs are $55.00 per blender.
On unitary bases, variable costs remain constant. On the contrary, fixed costs vary at a unitary level. Now, the same amount of costs is divided by a larger number of units.
As the production of blenders increases, unitary fixed costs decreases.
Sunland Company had a balance in the Accounts Receivable account of $801000 at the beginning of the year and a balance of $901000 at the end of the year. Net credit sales during the year amounted to $8049000. The average collection period of the receivables in terms of days was:_______
a) 4 days.
b) 36.5 days.
c) 37 days.
d) 38.4 days.
Answer:
d) 38.4 days
Explanation:
Accounts receivable = 801,000 + 901,000 = 1,702,000
Average Account receivables = 1,702,000 / 2 = 851,000
Net credit sales = $8,049,000 / 851,000 = 9.5
The average collection period of the receivables in terms of days = 365 days / 9.5 =38.4 days
Accounts receivable days = 38.4 days
Consider the following account balances (in thousands) for the Peterson Company.
Peterson Company Beginning of 2017 End of 2017
Direct materials inventory 21,000 23,000
Work-in-process inventory 26,000 25,000
Finished-goods inventory 13,000 20,000
Purchases of direct materials 74,000
Direct manufacturing labor 22,000
Indirect manufacturing labor 17,000
Plant insurance 7,000
Depreciation - plant, building, and equipment 11,000
Repairs and maintenance - plant 3,000
Marketing, distribution, and customer-service costs 91,000
General and administrative costs 24,000
Requirement:
1. Prepare a schedule for the cost of goods manufactured for 2017.
A. Begin by preparing the schedule of cost of goods manufactured (in thousands).
B. Start with the direct materials and labor costs, then indirect manufacturing costs, and complete the schedule by calculating the cost of goods manufactured.
Peterson Company
Schedule of Cost of Goods Manufactured
For the Year Ended December 31, 2017 (in thousands)
Direct materials
Direct materials used
Direct manufacturing labor
Indirect manufacturing costs:
Total Indirect manufacturing costs
Manufacturing costs incurred during 2017
Total costs to account for
Cost of goods manufactured
2. Revenues for 2017 were $310 million.
Prepare the income statement for 2017. (Use parentheses or a minus sign for operating losses)
Peterson Company
Income Statement
For the Year Ended December 31, 2017 (in thousands)
Cost of goods sold:
Cost of goods sold
Operating costs
Total operating costs
Operating income (loss)
Answer:
Peterson Company
1. A schedule for the cost of goods manufactured for 2017:
A. Peterson Company
Schedule of Cost of Goods Manufactured
For the Year Ended December 31, 2017 (in thousands)
Beginning direct materials inventory 21,000
less ending direct materials inventory (23,000)
Beginning Work-in-process inventory 26,000
less ending work in process inventory (25,000 )
Purchases of direct materials 74,000
Direct manufacturing labor 22,000
Indirect manufacturing labor 17,000
Plant insurance 7,000
Depreciation - plant, building, & equipment 11,000
Repairs and maintenance - plant 3,000
Total cost of manufactured goods $133,000
B. Peterson Company
Schedule of Cost of Goods Manufactured
For the Year Ended December 31, 2017 (in thousands)
Direct materials
Beginning direct materials inventory 21,000
Purchases of direct materials 74,000
Cost direct materials available 95,000
less ending direct materials inventory 23,000
Direct materials used 72,000
Direct manufacturing labor 22,000
Indirect manufacturing costs:
Labor 17,000
Depreciation 11,000
Plant Insurance 7,000
Repairs and maintenance 3,000
Total Indirect manufacturing costs 38,000
Manufacturing costs incurred during 2017 $132,000
Beginning work in process inventory 26,000
Total costs to account for $158,000
less ending work in process inventory 25,000
Cost of goods manufactured $133,000
2. Peterson Company
Income Statement
For the Year Ended December 31, 2017 (in thousands)
Sales Revenue $310,000
Cost of goods sold:
Beginning Finished goods inventory 13,100
Cost of goods manufactured 133,000
Cost of goods available for sale $146,100
less ending Finished goods inventory 20,000
Cost of goods sold $126,100 126,100
Gross profit $183,900
Operating costs :
Selling & Distribution costs 91,000
General & Admin. costs 24,000
Total operating costs $115,000
Operating income (loss) $68,900
Explanation:
The cost of manufactured goods is the sum of the costs of direct materials, direct labor, manufacturing overhead, and work in process inventory.
The cost of goods for sale is the sum of the beginning finished goods inventory plus the cost of manufactured goods less the ending finished goods inventory.
The income statement is a statement of revenue and costs in order to show the financial performance of an entity during a period of time. It shows the gross profit and net operating profit or loss.
The Gross profit is the difference between Sales Revenue and the Cost of goods sold.
The Operating Profit (Loss) is the difference between the Gross profit and the Operating costs.
Determining the worst payoff for each alternative and choosing the alternative with the "best worst" is the criterion called: Multiple Choice minimin. maximin. maximax. maximum likelihood. Bayes decision rule.
Answer: Maximin
Explanation:
With a Maximin strategy, a player in Game theory will aim to pick the alternative that yields the best payoff out of the worst payoffs that are possible.
First the worst pay-offs are determined and then the one that looks the best out of them is selected. The logic here is that the costs associated with the worst outcomes are less. So the person picks this outcome in other to reduce their costs but at the same time picking the best alternative that gives them the most savings on cost.
Shelton Co. purchased a parcel of land six years ago for $871,500. At that time, the firm invested $143,000 in grading the site so that it would be usable. Since the firm wasn't ready to use the site itself at that time, it decided to lease the land for $53,000 a year. The company is now considering building a warehouse on the site as the rental lease is expiring. The current value of the land is $923,000. What value should be included in the initial cost of the warehouse project for the use of this land
Answer:
$923,000
Explanation:
In order to determine the value included in the initial investment of a new project, we must use the opportunity cost of the land. In this case, the opportunity cost of using the land equals its current market value = $923,000.
When considering and evaluating this new project, all prior costs are considered sunk costs because they cannot be recovered.
Mary makes monthly deposits of $450 at the end of each month over 25 consecutive years to support her retirement. If the account earns an interest rate of 7.5%, which amount comes closest to the value of the deposits at the end?
a. $120,938
b. $343,343
c. $382,667
d. $394,767
e. $367,100
Answer:
d. $394,767
Explanation:
For computing the amount of deposit at the end we need to apply the future value formula i.e to be shown in the attachment
Given that,
Present value = $0
Rate of interest = 7.5% ÷ 12 months = 0.625%
NPER = 25 years × 12 months = 300 months
PMT = $450
The formula is shown below:
= -FV(Rate;NPER;PMT;PV;type)
So, after applying the above formula, the future value is $394,767
Lottery jackpots are often paid out over 20 or more years, but the winner can often choose to take a lump sum instead. For some, the cash option is a lot better. In January 2007, an 84 year old retired electrician and WWII veteran in Missouri won the $254 million Powerball jackpot. He was given the option of receiving the jackpot as $8.467 million immediately and $8.467 million per year for the next 29 years, or $120.504 million immediately. What discount rate does this option imply?
Answer:
the discount rate for this option implies to be 6.26%
Explanation:
From the given information; we are to determine the discount rate for the cash option.
Let r represent the discount rate and [tex]C_o[/tex] represent the cash option
The the discount rate for the cash option is related to the sum of all the Present Value of the cash flows together with the discount rate.
r = discount rate = ???
[tex]C_o = 8.467[/tex] for the next 29 years.
Mathematically;
[tex]PV = (1+r)*(\dfrac{C_o}{r}) *({1 - \dfrac{1}{(1+r)^{30}}) = \$ 120.504 \ million[/tex]
If discount rate (r) = 1%; we have:
[tex]PV = (1+0.01)*(\dfrac{8.467}{0.01}) *({1 - \dfrac{1}{(1+0.01)^{30}}) = \$ 120.504[/tex]
[tex]PV = (1.01)*(846.7) *({1 - 0.7419229178}) = \$ 120.504[/tex]
[tex]PV =220.699 \neq \$ 120.504[/tex]
If the discount rate r= 2% ;
[tex]PV = (1+0.02)*(\dfrac{8.467}{0.02}) *({1 - \dfrac{1}{(1+0.02)^{30}}) = \$ 120.504[/tex]
[tex]PV = (1.02)*(423.35}) *({1 - 0.552070889}) = \$ 120.504[/tex]
[tex]PV = 193.4234049 \neq \$ 120.504[/tex]
If the discount rate r= 4% ;
[tex]PV = (1+0.04)*(\dfrac{8.467}{0.04}) *({1 - \dfrac{1}{(1+0.04)^{30}}) = \$ 120.504[/tex]
[tex]PV = (1.04)*(211.675}) *({1 - 0.308318668}) = \$ 120.504[/tex]
[tex]PV = 152.2681118 \neq \$ 120.504[/tex]
If the discount rate r = 6%
[tex]PV = (1+0.06)*(\dfrac{8.467}{0.06}) *({1 - \dfrac{1}{(1+0.06)^{30}}) = \$ 120.504[/tex]
[tex]PV = (1.06)*(141.12}) *({1 - 0.1741101309}) = \$ 120.504[/tex]
PV = 123.5396349 ≠ 120.504 (but that was so close)
If the discount rate r = 6.26%
[tex]PV = (1+0.0626)*(\dfrac{8.467}{0.0626}) *({1 - \dfrac{1}{(1+0.0626)^{30}}) = \$ 120.504[/tex]
[tex]PV = (1.626)*(135.26}) *({1 - 0.161772856) = \$ 120.504[/tex]
PV = 120.4722 million which is approximately equal to $120.504 million
Thus ,the discount rate for this option implies to be 6.26%
can target costing be applied to the banking industry in Ghana
Answer:
The banking industry in Ghana can introduce target costing. However, its application is much more difficult due to the nature of banking services.
Introducing target costing in the banking industry in Ghana will eliminate non-value adding activities that increase the cost of banking in Ghana. It will enable Ghanaian customers to be charged competitive prices for the banking services that are rendered to them, with no more room for process wastages. The quality of services will increase coupled with lowered costs. The service processes will be improved as they will be more focused on the customers, and less on the staff, as it currently obtains in Ghana.
However, the nature of banking services makes introduction of target costing somehow difficult. These characteristics of banking services include: a) the production and consumption of banking services are coincidental, as the services are consumed when they are being produced; b) banking services are not storable like goods; c) banking services are not comparable, one unit to another; d) banking services are not tangible; e) ownership of banking services is not transferable; and f) there is not market price for banking services, except the price limits imposed by regulatory bodies.
Explanation:
Target costing in the banking industry in Ghana will take the form of first determining the market price for services that are acceptable to customers, establishing a target profit, and then designing banking services in such a manner that the costs do not exceed the target costs. The target cost will be the variance between the market price of a banking service and the target profit.
Demarco Lee invested $25,000 in the Camden & Sayler partnership for ownership equity of $25,000. Prior to the investment, equipment was revalued to a market value of $222,000 from a book value of $180,000. Kevin Camden and Chloe Sayler share net income in a 1:3 ratio. Required: a. Provide the journal entry for the revaluation of equipment. For a compound transaction, if an amount box does not require an entry, leave it blank. b. Provide the journal entry to admit Lee.
Answer and Explanation:
The Journal entry is shown below:-
Equipment Dr, $42,000 ($222,000 - $180,000)
To Kevin Camden-Capital $10,500 ($42,000 × 1 ÷ (1 + 3))
To Chloe Sayler-Capital $31,500 ($42,000 × 3 ÷ (1 + 3))
(Being revaluation of equipment is credited)
Here we debited the equipment as it increased the assets and we credited the Kevin Camden-Capital and Chloe Sayler-Capital as it also increased the equity
2. Cash Dr, $25,000
To Demarco Lee-Capital $25,000
(Being admission is recorded)
Here we debited the cash as it increased the assets and we credited the Demarco Lee-Capital as it also increased the equity
The Charade Company is preparing its Manufacturing Overhead budget for the fourth quarter of the year. The budgeted variable factory overhead is $5.00 per direct labor hour; the budgeted fixed factory overhead is $75,000 per month, of which $15,000 is factory depreciation.
If the budgeted direct labor time for November is 7,000 hours, then the total budgeted factory overhead for November is:
1) $95,000.
2) $110,000.
3) $75,000.
4) $125,000.
If the budgeted cash disbursements for factory overhead for December total $105,000, then the budgeted direct labor hours for December must be:
1) 6,000 hours.
2) 21,000 hours.
3) 9,000 hours.
4) 3,000 hours.
If the budgeted direct labor time for December is 8,000 hours, then total budgeted factory overhead per direct labor hour is (rounded):
1) $14.38.
2) $9.38.
3) $12.50.
4) $16.25.
Answer:
the total budgeted factory overhead for November is : 2) $110,000.
the budgeted direct labor hours for December must be : 3) 9,000 hours.
total budgeted factory overhead per direct labor hour is : 1) $14.38
Explanation:
To determine the budgeted factory overhead for November, prepare a budgeted factory overhead for November as follows :
November
Budgeted Variable factory overhead ($5.00 × 7,000 hours) = $35,000
Budgeted Fixed factory overhead = $75,000
Total budgeted factory overhead = $110,000
December
Total Cash Disbursements = $105,000
Less Budgeted Fixed factory overhead ($75,000 - $15,000) = $60,000
Budgeted Variable factory overhead = $45,000
Therefore, budgeted direct labor hours = $45,000 / $5.00
= 9,000 hours.
December
Budgeted Variable factory overhead ($5.00 × 8,000 hours) = $40,000
Budgeted Fixed factory overhead = $75,000
Total budgeted factory overhead = $115,000
Therefore, total budgeted factory overhead per direct labor hour = $115,000 / 8,000 hours = $14.375
Which is $14.38 (rounded)
Mountain Top Markets has total assets of $48,700, net working capital of $1,100, and retained earnings of $21,200. The firm has 12,500 shares of stock outstanding with a par value of $1 per share and a market value of $7.10 per share. The stock was originally issued to the firm's founders at par value. What is the market-to-book ratio
Answer: 2.63
Explanation:
The Market to Book ratio is also referred to as the price to book ratio. It is a financial evaluation of the market value of a company relative to its book value. It should be noted that the market value is current stock price of every outstanding shares that the company has while the book value is the amount that the company will have left after its assets have been liquidated and all liabilities have been repaid.
The market-to-book ratio will be the market price per share divided by the book value. It should be noted that the book value per share is the net worth of the business divided by the number of outstanding shares. The book value will be:
= [(12500 ×1) + $21200]/12500
= ($12500 + $21200)/$12500
= $33700/12500
=$2.70
The market-to-book ratio will now be:
= $7.10/$2.70
=2.63
Trek Cycles makes two products: X-1 and X-2. It takes 80,900 direct labor hours to manufacture the X-1 and 93,500 direct labor hours to manufacture the X-2 Line. Overhead consists of $225,000 in the machine setup cost pool and $149,960 in the packaging cost pool. The machine setup pool has 52,000 setups for the X-1 product and 98,000 setups for the X-2 product. The packaging cost pool has 26,000 parts in the X-1 product and 39,200 parts for the X-2 product. Using the traditional cost method of direct labor hours, what is the predetermined overhead rate
Answer:
Predetermined manufacturing overhead rate= $2.15 per direct labor hour
Explanation:
Giving the following information:
It takes 80,900 direct labor hours to manufacture the X-1 and 93,500 direct labor hours to manufacture the X-2 Line.
Total overhead= 225,000 + 149,960= $374,960
To calculate the predetermined manufacturing overhead rate we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 374,960 / (80,900 + 93,500)
Predetermined manufacturing overhead rate= $2.15 per direct labor hour
OS Environmental provides cost-effective solutions for managing regulatory requirements and environmental needs specific to the airline industry. Assume that on July 1 the company issues a one-year note for the amount of $5.2 million. Interest is payable at maturity.
Determine the amount of interest expense that should be recorded in a year-end adjusting entry under each of the following independent assumptions:
Interest rate Fiscal year-end Interest expense
12% December 31
10% September 30
9% October 31
6% January 31
Answer:
In accrual basis accounting, expenses are recorded in the period when their matching revenues are obtained.
In this case, even if the full interest will be paid at maturity, interest expense will still be recorded in each period according to the information that we are given in the question.
Interest expense to be recorded by December 31
5,200,000 * 0.12 = 624,000 / 2 = 312,000
Interest expense to be recorded by September 30
5,200,000 * 0.10 = 520,000 * 3/12 = 130,000
Interest expense to be recorded by October 31
5,200,000 * 0.09 = 468,000 * 4/12 = 156,000
Interest expense to be recorded by January 31
5,200,000 * 0.06 = 312,000 * 7/12 = 182,000
You are interested in buying a share of stock in CAD Corporation. You expect a dividend payment of $0.50 next year and that the dividend will grow by 5% per year thereafter. You desire a 10% return on your purchase. According to the Gordon growth model, what is the maximum price you would pay for a share of this stock?a. $20.00b. $15.00c. $12.50d. $10.00
Answer: d. $10.00
Explanation:
The Gordon Growth Model allows for the valuation of a stock based on its anticipated dividends (which can be determined from it's growth rate if not given) and required return.
The formula is;
Stock Price = Next Dividend / ( required return - growth rate)
= 0.50 / ( 10% - 5%)
= 0.50 / 5%
= $10
You are considering an investment in a mutual fund with a 4% load and expense ratio of 0.5%. You can invest instead in a bank CD paying 6% interest. a. If you plan to invest for 2 years, what annual rate of return must the fund portfolio earn for you to be better off in the fund than in the CD? Assume annual compounding of returns
Answer:
It must earn an annual rate of return of 8.69%
Explanation:
Mathematically;
(1+Rcd)^t = (1-front-end-load) * (1 + Rmutual fund - Expense ratio)^t
From the question;
Rcd = 6% = 6/100 = 0.06
t = 2 years
Front-end-load = 4% = 4/100 = 0.04
Expense ratio = 0.005
Rmutualfund = ? (let’s call it Rmf for convenience sake)
Substituting these values, we have;
(1+0.06)^2 = (1-0.04) * (1+ Rmf-0.005)^2
1.06^2 = 0.96 * (Rmf + 0.995)^2
1.1236/0.96 = (Rmf + 0.995)^2
1.170417 = (0.995 + Rmf)^2
0.995 + Rmf = (1.170417)^1/2
Rmf = 1.0819-0.995
Rmf = 0.0869 = 8.69%
Lakeside Components wishes to purchase parts in one month for sale in the next. On June 1, the company has 12,000 parts in stock, although sales for June are estimated to total 12,900 parts. Total sales of parts are expected to be 10,500 in July and 11,100 in August.
Parts are purchased at a wholesale price of $15. The supplier has a financing arrangement by which Lakeside Components pays 60 percent of the purchase price in the month when the parts are delivered and 40 percent in the following month. Lakeside purchased 15,000 parts in May.
Required:
a. Estimate purchases (in units) for June and July.
June July
Merchandise to be purchased in units: ? units ? units
b. Estimate the cash required to make purchases in June and July.
Month of payment
June:
July:
Answer:
a. Estimate purchases (in units) for June and July.
June = 11,400 partsJuly = 11,100 partsb. Estimate the cash required to make purchases in June and July.
June = $192,600July = $168,300Explanation:
Beginning stock June 1 = 12,000 parts
June's expected sales = 12,900 parts
July's expected sales = 10,500 parts
August's expected sales = 11,100 parts
purchase price $15 per part
60% paid in current month and 40% paid in the next month
15,000 parts were purchased in May at $225,000 ($90,000 to be paid in June)
estimated purchases June = estimated sales June + estimated sales July - beginning inventory = 12,900 + 10,500 - 12,000 = 11,400
estimated purchases July = estimated sales July + estimated sales August - beginning inventory = 10,500 + 11,100 - 10,500 = 11,100
cash payments June = (May's purchases x 40%) + (June's purchases x 60%) = (15,000 x $15 x 40%) + (11,400 x $15 x 60%) = $90,000 + $102,600 = $192,600
cash payments July = (June's purchases x 40%) + (July's purchases x 60%) = (11,400 x $15 x 40%) + (11,100 x $15 x 60%) = $68,400 + $99,900 = $168,300
The financial statement effects of the budgeting process are summarized on the cash budget and the capital expenditures budget. true or false
Answer:
true
Explanation:
On January 1, 2010, the balance in Tabor Co.'s Allowance for Bad Debts account was $13,085. During the first 11 months of the year, bad debts expense of $21,937 was recognized. The balance in the Allowance for Bad Debts account at November 30, 2010, was $9,919.Required:(a) What was the total of accounts written off during the first 11 months? (Hint: Make a T-account for the Allowance for Bad Debts account.)Bad debt write offs $(b) As the result of a comprehensive analysis, it is determined that the December 31, 2010, balance of the Allowance for Bad Debts account should be $9,450. Show the adjustment required in the journal entry format.Allowance for bad debt Debit $Bad debt expenses Credit $
Answer:
(a) What was the total of accounts written off during the first 11 months?
bad debts written for the first 11 months = allowance for bad debt accounts January 1 balance + bad debt expense - allowance for bad debt accounts November 30 balance = $13,085 + $21,937 - $9,919 = $25,103
(b) As the result of a comprehensive analysis, it is determined that the December 31, 2010, balance of the Allowance for Bad Debts account should be $9,450. Show the adjustment required in the journal entry format.Allowance for bad debt Debit $Bad debt expenses Credit $
to determine the amount of bad debt expense that must be adjusted, we must subtract the estimated balance in December 31 from the balance in November 30 = $9,919 - $9,450 = $469. Since the November 30 amount is larger, it means that we over estimated our bad debt expense and it must be reduced:
Dr Allowance for doubtful accounts 469
Cr Accounts receivable 469
If the Fed was worried about overheating (GDP growing too fast, inflationary pressures building), then the appropriate open market operation would be for the Fed to conduct open market purchases.
a) true
b) false
Answer:
The answer is false
Explanation:
Open market operations is a situation in which the Federal purchases and sells U.S. Treasury securities on the open market in order to regulate the supply of money in the economy.
If the Fed purchases securities in the open market, this increases the money supply in the economy. This is done when the economy is having low activities i.e economic hardship. Interest rate will be and if the Fed sells securities in the open market, it reduces the supply of money in the economy. This is done when the economy is overheating.