Profitability Analysis Kolby Enterprises reports the following information on its income statement: L04 Net sales ......... . ......... . $250,000 150,000 50,000 Administrative expenses ...... . . $10,000 15,000 10,000 Cost of goods sold .. . . .. . . .. . . Other income .. . . .. . . .. . .. . . . Selling expenses ............ . Other expense .............. . Required Calculate Kolby 's gross profit percentage and return on sales ratio. Explain what each ratio tells us about Kolby 's performance. Kolby is planning to add a new product and expects net sales to be $45,000 and cost of goods to be $38,000. No other income or expenses are expected to change. How will this affect Kolby 's gross profit percentage and return on sales ratio
Answers
Answer:
Gross profit percentage = Gross profit / Net sales
= (Net sales - COGS) / Net sales
= (250,000 - 150,000) / 250,000
= 40%
Return on sales ratio = EBIT / Net sales
= (Gross profit + other income - Administrative expenses - Other expense - Selling expenses) / Net sales
= (250,000 - 150,000 + 15,000 - 10,000 - 10,000 - 50,000) / 250,000
= 18%
With new product:
Gross profit percentage = Gross profit / Net sales
= (Net sales - COGS) / Net sales
= (250,000 + 45,000 - 150,000 - 38,000) / (250,000 + 45,000)
= 36.3%
Return on sales ratio = EBIT / Net sales
= (Gross profit + other income - Administrative expenses - Other expense - Selling expenses) / Net sales
= (250,000 + 45,000 - 150,000 - 38,000 + 15,000 - 10,000 - 10,000 - 50,000) / (250,000 + 45,000)
= 52,000 / 295,000
= 17.6%
Related Questions
Plant-wide, department, and activity-cost rates. Acclaim Inc. makes two styles of trophies, basic and deluxe, and operates at capacity. Acclaim does large custom orders. Acclaim budgets to produce 10,000 basic trophies and 5,000 deluxe trophies. Manufacturing takes place in two production departments: forming and assembly. In the forming department, indirect manufacturing costs are accumulated in two cost pools, setup and general overhead. In the assembly department, all indirect manufacturing costs are accumulated in one general overhead cost pool. The basic trophies are formed in batches of 200 but be-cause of the more intricate detail of the deluxe trophies, they are formed in batches of 50.
The controller has asked you to compare plant-wide, department, and activity-based cost allocation.
Forming Department Basic Delux Total
$60,000 $35,000 $95,000
Direct manufacturing labor $30,000 $20,000 $50,000
Overhead costs Setup $48,000
General overhead $32,000
Assembly Department Basic Delux Total
Direct materials $50,000 $10,000 $15,000
Direct manufacturing labor 15,000 25,000 40,000
Overhead costs Setup
General overhead 40,000
Required:
a. Calculate the budgeted unit cost of basic and deluxe trophies based on a single plant-wide overhead rate, if total overhead is allocated based on total direct (Don't forget to include direct material and direct manufacturing labor cost in your unit cost calculation.)
b. Calculate the budgeted unit cost of basic and deluxe trophies based on departmental overhead rates, where forming department overhead costs are allocated based on direct manufacturing labor costs of the forming department and assembly department overhead costs are allocated based on total direct manufacturing labor costs of the assembly department
c. Calculate the budgeted unit cost of basic and deluxe trophies if Acclaim allocates overhead costs in each department using activity-based costing, where setup costs are allocated based on number of batches and general overhead costs for each department are allocated based on direct manufacturing labor costs of each department.
d. Explain briefly why plant-wide, department, and activity-based costing systems show different costs for the basic and deluxe trophies. Which system would you recommend and why?
Answers
Answer:
Acclaim Inc.
Basic Trophies Deluxe Trophies
Budgeted unit cost:
a. using single-plant o/h rate $17.60 $28.80
b. using departmental rates $17.42 $29.16
c. using ABC $18.26 $27.48
d. They show different costs because the overhead rates are based on different parameters.
I recommend ABC system. It is more fair because the overhead rates are based on product line's activity usage instead of an arbitrary figure.
Explanation:
a) Data and Calculations:
Basic Trophies Deluxe Trophies Total
Budgeted production 10,000 5,000 15,000
Batches 200 50 250
Basic Trophies Deluxe Trophies Total
Forming Department $60,000 $35,000 $95,000
Direct manufacturing labor $30,000 $20,000 $50,000
Assembly
Direct materials $5,000 $10,000 $15,000
Direct manufacturing labor 15,000 25,000 40,000
Total direct costs $110,000 $90,000 $200,000
Overhead costs 66,000 54,000 120,000
Total production costs $176,000 $144,000 $320,000
Budgeted production 10,000 5,000
Budget unit costs $17.60 $28.80
Overhead rate
Total overhead/total direct costs = $120,000/$200,000 = $0.60
Basic Deluxe Total
Trophies Trophies
Forming department:
Overhead costs Setup $48,000
General overhead $32,000
Total overhead costs $80,000
Overhead rate = $80,000/$145,000 = $552
Assembly department
General overhead $40,000/$55,000 = $0.727
Basic Trophies Deluxe Trophies Total
Forming Department $60,000 $35,000 $95,000
Direct manufacturing labor $30,000 $20,000 $50,000
Total direct costs $90,000 $55,000 $145,000
Overhead costs 49,680 30,360 80,040
Total departmental costs $139,680 $85,360 $225,040
Assembly
Direct materials $5,000 $10,000 $15,000
Direct manufacturing labor 15,000 25,000 40,000
Total direct costs $20,000 $35,000 $55,000
Overhead costs 14,540 25,445 39,985
Total departmental costs $34,540 $60,445 $94,985
Total production costs $174,220 $145,805 $320,025
Budgeted production 10,000 5,000
Budget unit costs $17.42 $29.16
Basic Trophies Deluxe Trophies Total
Forming Department $60,000 $35,000 $95,000
Direct manufacturing labor $30,000 $20,000 $50,000
Assembly
Direct materials $5,000 $10,000 $15,000
Direct manufacturing labor 15,000 25,000 40,000
Total overhead allocated $72,600 $47,400 $120,000
Total production costs $182,600 $137,400 $320,000
Budgeted production 10,000 5,000
Budget unit costs $18.26 $27.48
Overhead costs allocation:
Basic Deluxe Total
Trophies Trophies
Forming department:
Overhead costs Setup $48,000/250 $38,400 $9,600 $48,000
General overhead $32,000/$50,000 19,200 12,800 32,000
Assembly department
General overhead $40,000/$40,000 15,000 25,000 40,000
Total overhead allocated $72,600 $47,400 $120,000
A company received 500 applications for a specific position.30 were given an assignment test. Only 15 were invited to an interview. The yield ratio of passing the interview is
a.
75%
b.
20%
c.
50%
d.
25%
Answers
Which one of the following statements is correct concerning the relationship between a levered and an unlevered capital structure? Assume there are no taxes.
a. At the break-even point, there is no advantage to debt.
b. The earnings per share will equal zero when EBIT is zero for a levered firm.
c. The advantages of leverage are inversely related to the level of EBIT.
d. The use of leverage at any level of EBIT increases the EPS.
e. EPS are more sensitive to changes in EBIT when a firm is unlevered
Answers
Answer:
a. At the break-even point, there is no advantage to debt.
Explanation:
In the case when we concerned about the relationship between the levered and an unlevered capital structure also there is no taxes so the statement i.e. correct is at the break even point we dont have an advantage with respect to the debt
Therefore the first option is correct
The statement about the relationship between a levered and an unlevered capital structure is valid in that debt has no advantage at the break-even point.
What is a break-even point?Break-even point is the market condition where there is no profit and no loss to the company.
Here, the total revenue and the total cost of the firm equals.
When it comes to the relationship between a levered and an unlevered capital structure, there are no taxes, hence the statement, i.e., correct, is that at the break-even point, we don't have a debt advantage.
Therefore, option A is correct.
Learn more about the break-even point, refer to:
https://brainly.com/question/15356272
Miscavage Corporation has two divisions: the Beta Division and the Alpha Division. The Beta Division has sales of $265,000, variable expenses of $141,600, and traceable fixed expenses of $66,800. The Alpha Division has sales of $575,000, variable expenses of $321,800, and traceable fixed expenses of $126,300. The total amount of common fixed expenses not traceable to the individual divisions is $126,200. What is the company's net operating income
Answers
Answer:
$57,300
Explanation:
Calculation to determine the company's net operating income
Sales $840,000
($265,000+$575,000)
Less Variable expenses $463,400
($141,600+$321,800)
Contribution margin $376,600
($840,000-$463,400)
Less Traceable fixed expenses $193,100
($66,800+$126,300)
Divisional segment margin $183,500
Less Common fixed expenses $126,200
Net Operating Income $57,300
Therefore the company's net operating income will be $57,300
chager Company purchased a computer system on January 1, 2019, at a cash cost of $25,000. The estimated useful life is 10 years, and the estimated residual value is $3,000. The company will use the double declining-balance depreciation method. What is the accumulated depreciation balance as of December 31, 2020? $9,000. $4,000. $7,920. $8,520.
Answers
Answer:
Accumulated depreciation= $7,920
Explanation:
Giving the following information:
Buyng price= $25,000
Salvage value= $3,000
Number of years= 10
To calculate the depreciation expense, we need to use the following formula:
Annual depreciation= 2*[(book value)/estimated life (years)]
2019:
Annual depreciation= [(25,000 - 3,000) / 10]*2
Annual depreciation= $4,400
2020:
Annual depreciation= [(22,000 - 4,400) / 10]*2
Annual depreciation= $3,520
Accumulated depreciation= $7,920
LBC Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 4.2 hours of direct labor at the rate of $21.00 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June. The company plans to sell 27,000 units of Product WZ in June. The finished goods inventories on June 1 and June 30 are budgeted to be 490 and 70 units, respectively. Budgeted direct labor costs for June would be: Multiple Choice $559,500 $2,344,356 $2,363,106 $2,381,856
Answers
Answer:
$2,344,356
Explanation:
Given the above information,
June production :
Planned sales + ending inventory - beginning inventory
= (27,000 + 70 - 490) units
= 26,580 units
Total direct labor hour required for production
= 26,580 units × 4.2
= 111,636 labor hour
Cost of production
= Total direct labor hour × rate per hour
= 111,636 × $21
= $2,344,356
A firm is about to undertake the manufacture of a product, and it is weighing the process configuration options. There are two intermittent processes under consideration, as well as a repetitive focus. The smaller intermittent process has fixed costs of $3,000 per month and variable costs of $10 per unit. The larger intermittent process has fixed costs of $11,000 per month and variable costs of $5 per unit. A repetitive focus plant has fixed costs of $41,000 per month and variable costs of $1 per unit.
Required:
a. At what output does the large intermittent process become cheaper than the small one?
b. At what output does the repetitive process become cheaper than the larger intermittent process?
Answers
Answer:
See below
Explanation:
Using this formula
Fixed cost of process B - fixed cost of process A ÷ unit variable cost of process A - unit variable cost of process B
a. Fixed cost = $11,000
Fixed cost = $3,000
Unit variable = $10
Unit variable = $5
Hence:
= ($11,000 - $3,000) / ($10 - $5)
= $7,000 / $5
= $1,400
This means that the larger intermittent process becomes cheaper than the small one by $1,400
b. Fixed cost = $41,000
Fixed cost = $11,000
Unit variable = $5
Unit variable = $1
= ($41,000 - $11,000) / ($5 - $1)
= $30,000 / $4
= $7,500
This means that the repetitive process become cheaper than the larger intermittent process by $7,500
During the course of a year, the labor force consists of the same 6,000 people. Employers have chosen not to hire 420 of these people in the face of government regulation making it too costly to employ them. Hence, they remain unemployed throughout the year. At the same time, 300 different people are always unemployed due to job changes each month during the year. There is no seasonal employment.
A. What is the frictional unemployment rate?
B. What is the overall unemployment rate?
Answers
Answer:
5%
12%
Explanation:
Unemployment rate is the fraction of the labour force that are unemployed but are actively looking for work
Types of unemployment include:
Frictional unemployment : it is the period of time a person is unemployed from the period he leaves his current job and the time he gets another job. The 300 unemployed people are frictionally unemployed
structural unemployment : it occurs as a result of changes in the economy. These changes can be as a result of changes in technology, polices or competition . Structural unemployment tends to be permanent. The 420 unemployed people are structurally unemployed
Voluntary unemployment : e.g. worker at a fast-food restaurant who quits work and attends college.
Cyclical unemployment : occurs as a result of fluctuations in the economy
Frictional unemployment = (total frictional unemployed people / total labour force ) x 100
(300 / 6000) x 100 = 5%
Total unemployment rate = (total frictional unemployed people + total structural unemployed individuals / total labour force ) x 100
[(300 + 420) / 6000] x 100 = 12%
Prior to May 1, Fortune Company has never had any treasury stock transactions. A company repurchased 130 shares of its common stock on May 1 for $6,500. On July 1, it reissued 65 of these shares at $53 per share. On August 1, it reissued the remaining treasury shares at $48 per share. What is the balance in the Paid-in Capital, Treasury Stock account on August 2
Answers
Answer:
Fortune Company
There is a balance of ($65) in the Paid-in Capital, Treasury Stock account on August 2.
However, this balance will be transferred to the Additional Paid-in Capital account at year-end, since there are no outstanding shares for the Treasury Stock account.
Explanation:
a) Data and Calculations:
May 1 Repurchase of 130 shares (Treasury Stock) = $6,500
July 1 Reissue of 65 shares at $53 per share = (3,445)
August 1 Reissue of 65 shares at $48 per share = (3,120)
August 2, Balance in the Paid-in Capital = ($65)
b) The Treasury Stock account is a contra Paid-in Capital account which records transactions involving the repurchase and reissue of treasury shares. Treasury shares represent the company's own shares which are repurchased from its investors.
Hull Company reported the following income statement information for the current year: Sales $ 423,000 Cost of goods sold: Beginning inventory $ 151,500 Cost of goods purchased 286,000 Cost of goods available for sale 437,500 Ending inventory 157,000 Cost of goods sold 280,500 Gross profit $ 142,500 The beginning inventory balance is correct. However, the ending inventory figure was overstated by $33,000. Given this information, the correct gross profit would be:
Answers
Answer:
$109,500
Explanation:
Calculation to determine the correct gross profit would be:
Sales $ 423,000
Less: Corrected Cost of goods sold:($313,500)
(280,500 + $33,000)
Gross Profit $109,500
Therefore the correct gross profit would be:$109,500
On September 12, Vander Company sold merchandise in the amount of $3,950 to Jepson Company, with credit terms of 2/10, n/30. The cost of the items sold is $2,725. Vander uses the periodic inventory system and the gross method of accounting for sales. On September 14, Jepson returns some of the merchandise. The selling price of the merchandise is $340 and the cost of the merchandise returned is $240. Jepson pays the invoice on September 18, and takes the appropriate discount. The journal entry that Vander makes on September 18 is:
Answers
Answer:
Date Account Debit Credit
September 18 Cash $3,537.80
Sales discount $ 72.20
Accounts Receivable $3,610
Explanation:
Net merchandise sold = 3,950 - 340
= $3,610
Sales discount is 2% if paid in 10 days which Jepson did.
= 2% * 3,610
= $72.20
Cash = Net sales - discount
= 3,610 - 72.20
= $3,537.80
The market for apples is in equilibrium at a price of $0.50 per pound. If the government imposes a price ceiling in the market at $0.40 per pound: a. the price ceiling will not affect the market price or output. b. quantity supplied will increase. c. there will be a shortage of the good. d. quantity demanded will decrease.
Answers
Answer:
c. there will be a shortage of the good.
Explanation:
The market for apples is in equilibrium at a price of $0.50 per pound. If the government imposes a price ceiling in the market at a price of $0.40 per pound: c. there will be a shortage of the good.
The correct answer is - c. there will be a shortage of the good.
Reason -
At the equilibrium price, the demand = supply
If the price is increased by the equilibrium price then, there are more customers(i.e. quantity demanded is increase ) and there is shortage of goods (i.e quantity supplied will decrease)
So, the correct option is - c. there will be a shortage of the good.
Carpet Woes. Beau went shopping at ABC Carpet. He saw some carpet he liked but could not make up his mind. The manager at ABC Carpet wrote down the proposed purchase price for him along with a statement that the price would be good for three months. Two months later Beau went back to ABC Carpet to purchase the carpet. Unfortunately, the price had gone up. Beau showed the manager his writing and guaranteed price, but the manager said that the offer was no longer good. Although he had to pay more than the ABC manager had initially promised, Beau proceeded to purchase his carpet from ABC Carpet, and he also contracted with ABC to do the installation. Unfortunately, Beau almost immediately started to have problems with the carpet. Beau told the sales manager of ABC Carpet that he was planning on bringing suit for breach of warranty. The sales manager, however, told him that the breach of warranty provisions only applied to sales of goods and that the carpet purchase was for installation, a service. Which of the following is true regarding the enforceability of the offer made by the manager at ABC Carpet?
a. Common law will be applied, not the UCC, because the contract was mixed.
b. The UCC will be applied, not common law because the contract was mixed.
c. The court will apply the predominant-purpose test to determine whether the predominant purpose of the contract was the sale of goods in which case the UCC would apply.
d. The court will apply the service-warranty test to determine whether the predominant purpose of the contract was the provision of a service in which case the UCC would apply.
Answers
Answer: The court will apply the predominant-purpose test to determine whether the predominant purpose of the contract was the sale of goods in which case the UCC would apply.
Explanation:
Based on the information given in the question, we should note that the court will apply the predominant-purpose test to determine whether the predominant purpose of the contract was the sale of goods in which case the UCC would apply.
We should note that under a predominant purpose test, it will apply when the transaction involved is Mena for goods sales and not for the service sales.
VI. Here we consider the paradox of saving one last time in the context of the AS-AD model. Suppose the economy begins with output equal to its natural level. Then there is a decrease in consumer confidence, as households attempt to increase their saving, for a given level of disposable income. a. In AS-AD and IS-LM diagrams, show the effects of the decline in consumer confidence in the short run and the medium run. Explain why curves shift in your diagrams. b. What happens to output, the interest rate, and the price level in the short run
Answers
Answer:
The solution to this question can be defined as follows:
Explanation:
In point a:
When consumer interest decreases, => consumers begin and save less and more, => MPC decreases; => the "IS" curve becomes flatter; => "IS" turns inside. Currently, 'AD' shows together all the goods and financial sector, => as the 'IS' curve adjusts inside the industry, => the 'AD' would also change to the left.
In point b:
Take into account the SR models of "IS-LM" and "AD-AS."
Therefore there is the case of a full job only at the beginning; => its optimum between "IS1" and "LM" in the "IS-LM" model; as well as the main equilibrium among "AD1" and "AS" in the "AD-AS" model "E1'," => the original equilibrium among "Y=Yf," "r=r1" and "P=P1." That now the consumer is reducing the confidence, => the 'IS' curve becomes shifting IMEI 'IS2,' => provided the 'LM' curve, that new balance is 'E2.' That's why the price in the SR is calculated, the AS will change =>, however, the AD also will shift the "AD2" side and "E2'" will become the equilibrium point in the "AD-AS" system, "r=r2 <r1" and "P=P1" throughout the new "Y=Y2 <Yf" balance.
Please find the graph file in the attachment.
Hughes Co. is growing quickly. Dividends are expected to grow at a rate of 22 percent for the next three years, with the growth rate falling off to a constant 5 percent thereafter. If the required return is 12 percent and the company just paid a $2.35 dividend, what is the current share price? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
Answers
Answer: $53.94
Explanation:
Current share price is the present value of the dividends for the next 3 years and the terminal value in year 3.
Terminal value = D₄ / ( required return - growth rate)
= (2.35 * 1.22³ * 1.05) / (12 % - 5%)
= $64
D₁ = 2.35 * 1.22 = $2.867
D₂ = 2.867 * 1.22 = $3.49774
D₃ = 3.49774 * 1.22 = $4.2672428
Share price = (2.867 / (1 + 12%)) + (3.49774 / 1.12²) + (4.2672428 / 1.12³) + (64/1.12³)
= $53.94
g Financial statements are linked within and across periods in that a) The income statement and the balance sheet are linked via retained earnings b) The statement of cash flows is linked to the income statement as net income is a component of operating cash flows c) The statement of cash flows is linked to the balance sheet as the change in the balance sheet cash account reflects the net cash inflows and outflows for the period d) All of the above e) None of the above
Answers
Answer:
Financial statements are linked within and across periods in that
d) All of the above.
Explanation:
The linkage of all the financial statements can be traced to how they share interconnected information about the financial position and performance of an entity. The three more prominent financial statements include the income statement for the period, the statement of cash flows, and the balance sheet. While the income statement shows the financial performance by determining the profitability, the statement of cash flows concentrates on the inflow and outflow of cash, and the balance sheet shows the financial position, disclosing the assets, liabilities, and equity balances.
On the basis of the following production possibilities tables for two countries, North Cantina and South Cantina.
North Cantina Production Possibilities
A B C D E F
Capital Goods 5 4 3 2 1 0
Consumer Goods 0 10 18 24 28 30
South Cantina Production Possibilities
A B C D E F
Capital Goods 5 4 3 2 1 0
Consumer Goods 0 8 15 21 25 27
Refer to the tables. Suppose that resources in North Cantina and South Cantina are identical in quantity and quality. We can conclude that:_____.
A. North Cantina has better technology than South Cantina in producing consumer goods but not capital goods.
B. South Cantina has better technology than North Cantina in producing both capital and consumer goods.
C. North Cantina has better technology than South Cantina in producing both capital and consumer goods.
D. North Cantina is growing more rapidly than South Cantina.
Answers
Answer:
A
Explanation:
The Production possibilities frontiers is a curve that shows the various combination of two goods a company can produce when all its resources are fully utilised.
The PPC is concave to the origin. This means that as more quantities of a product is produced, the fewer resources it has available to produce another good. As a result, less of the other product would be produced. So, the opportunity cost of producing a good increase as more and more of that good is produced.
To determine which country has a better technology in production, the opportunity cost has to be calculated. The country with the lower opportunity cost has the better technology
At point B for North Cantina:
The opportunity cost of producing one 4 units of capital good = 10/4 = 2.5 units of consumer goods
The opportunity cost of producing 10 units of consumer good = 4/10 = 0.4 units of capital goods
At point B for South Cantina
The opportunity cost of producing one 4 units of capital good = 8/4 = 2units of consumer goods
The opportunity cost of producing 8 units of consumer good = 4/8 = 0.5 units of capital goods
South Cantina has a lower opportunity cost in the production of capital goods while North Cantina has a lower opportunity cost in the production of consumer goods
The Thomlin Company forecasts that total overhead for the current year will be $11,415,000 with 180,000 total machine hours. Year to date, the actual overhead is $7,948,000 and the actual machine hours are 88,000 hours. If the Thomlin Company uses a predetermined overhead rate based on machine hours for applying overhead, as of this point in time (year to date), the overhead is Round the factory overhead rate to the nearest dollar before multiplying by the number of hours.
a. $1,000,000 over
b. $1,000,000 under
c. $500,000 over
d. $500,000
Answers
Answer:
Underapplied overhead = $2,367,040
Explanation:
Predetermined overhead rate = Estimated overhead / Estimated activity
Predetermined overhead rate = $11,415,000 / 180,000
Predetermined overhead rate = $63.42 per MH
Applied overhead = Actual activity * Overhead rate
Applied overhead = 88,000 * $63.42 per MH
Applied overhead = $5,580,960
Overapplied/ (underapplied) = Actual overhead - Applied overhead
Underapplied overhead = $7,948,000 - $5,580,960
Underapplied overhead = $2,367,040
What is the most likely reason a user would export data with the formatting in place
The fields will not have any errors.
The file will be much easier to read.
The file is automatically spellchecked.
O The columns are automatically alphabetized.
Answers
Answer:
B
Explanation:
I got it right
Answer: the file will be much easier to read
Explanation:
g Buyers would pay exactly $175 per acre for the teak today. In one year, however, that wood will be perfectly matured. Buyers will be willing to pay $220 per acre. The trees will be past their peak after that and will start to lose their value. From now until one year from now, theoakwill have the exact same value per acre as the teak. The difference is that the oak will continue to increase in value by $10 per acre per year for the next 30 years. To be clear, an acre of oak is worth $175 today, $220 in a year, $230 in two years, and so on.
Answers
Answer:
hello your question is incomplete attached below is the complete question
Answer:
a) $200
b) $285.70
Explanation:
part A
The most Maria is willing to pay per case for an acre of teak
cash flow = $220 per acre
for year 1
considering the discounting factor of 10% = 0.9091
Hence the most Maria is willing to pay per case for an acre of teak = ( 0.9091 * cash flow )
= 0.9091 * 220 = $200
Part B
Th most Maria is willing to pay per case for an acre of Oak
For year 1 :
cash flow = $220 , discounting factor = 0.9091 , present cash flows = 200
For years 2 - 31 :
cash flow = $10 , discounting factor = 8.5699
hence present cash flow = ( 10 * 8.5699 ) = $85.70
Total present cash flow = $200 + $85.7 = $285.70
Fleet, Inc. manufactured 700 units of Product A, a new product, in 20Xl. Product Xs variable and fixed manufacturing costs per unit were $6.00 and $2.00, respectively. The inventory of Product A on December 31, 20Xl consisted of 100 units. There was no inventory of Product A on January 1, 20Xl. Required: What would be the change in the dollar amount of inventory on December 31, 20Xl if the variable costing method was used instead of the absorption costing method
Answers
Answer:
The change in the dollar amount of inventory is $200 due to change in the inventory costing method.
Explanation:
The variable cost per unit is $6.00 while the fixed cost per unit is $2.00
Variable cost per unit = $6.00
Absorption cost pet units = $8.00
Total cost under absorption costing = Absorption cost per unit / number of units in ending inventory
Total absorption cost = $8.00 × 100 = $800
Total cost under variable cost = Variable cost per unit × number of units in ending inventory
Total variable cost = $6.00 × 100 = $600
Change in cost = Total absorption cost - Total variable cost
Change in cost = $800 - $600 = $200
Mark Brandt, an employee of Mueller Corp., earned 3 weeks of compensated vacation time during the current year, but only took 2 weeks of vacation. His employer permits that 1 week of vacation can be carried forward to the following year. Mark fully intends to remain at his current employer and plans to take his vacation during the following year. His current weekly salary is $2,000. Mueller Corp. expects to grant a general salary increase of 5% effective at the beginning of the next year. What amount should Mueller accrue during the current year relating to Mark Brandt's carried-forward vacation
Answers
Answer:
Mark Brandt of Mueller Corporation
The amount that Mueller should accrue during the current year relating to Mark Brandt's carried-forward vacation is:
= $2,100
Explanation:
a) Data and Calculations:
Current weekly salary = $2,000
Expected general salary increase = 5%
The amount that Mueller should accrue during the current year relating to Mark Brandt's carried-forward vacation is:
= $2,000 * 1.05
= $2,100
b) $2,100 is the amount that will be paid in cash for cash settlement of Mark Brandt's carried-forward vacation, assuming he does not take it the following year.
Use the following data to calculate the current ratio.
Skysong, Inc. Balance Sheet December 31, 2017
Cash $65500 Accounts payable $131500
Accounts receivable 93000 Salaries and wages payable 17500
Inventory 148000 Mortgage payable 173000
Prepaid insurance 87500 Total liabilities $322000
Stock Investments 194500 Land 185500
Buildings $219500 Common stock $216500
Less: Accumulated depreciation (72500) 147000 Retained earnings 483500
Trademarks 101000 Total stockholders' equity $700000
Total assets $1022000 Total liabilities and stockholders' equity $1022000
a. 2 : 1
b. 2.64 : 1
c. 2 : 1
d. 3 : 1
Answers
Answer:
b. 2.64 : 1
Explanation:
Current ratio = Current assets/Current liabilities
Current assets = Cash + Account Receivables + Inventory + Prepaid insurance
Current assets = $65500 + $93000 + $148000 + $87500
Current assets = $394,000
Current liabilities = Accounts payable + Salaries and wages payable
Current liabilities = $131500 + $17500
Current liabilities = $149,000
Hence, Current ratio = $394,000/$149,000
Current ratio = 2.644295
Current ratio = 2.64 : 1
Henrietta, the owner of a very successful hotel chain in the Southeast, is exploring the possibility of expanding the chain into a city in the Northeast. She incurs $35,000 of expenses associated with this investigation. Based on the regulatory environment for hotels in the city, she decides not to expand. During the year, she also investigates opening a restaurant that will be part of a national restaurant chain. Her expenses for this are $53,000. She proceeds with opening the restaurant, and it begins operations on September 1. Determine the amount Henrietta can deduct in the current year for investigating these two businesses.
Answers
Answer:
Henrietta can deduct $35,000 for the expenses which she has incurred for the investigation.
Explanation:
Henrietta has incurred expenses for investigating the expenses about opening a new restaurant. She has incurred $35,000 of expense for the investigation about the expansion of its business. She can deduct this expense from her current business.
Imagine that two goods are available to you: hamburgers (X) and hot dogs (Y). You like hamburgers and hot dogs equally well. If your fast food budget is $50 per month, the price of hamburgers is $6 per unit, and the price of hot dogs is $4 per unit, what is your optimal consumption of hot dogs
Answers
Answer:
5
Explanation:
The budget constraint = 6h + 4hd = 50
h = hamburger
hd = hot dogs
because you like both goods equally, the optimal consumption of hot dogs = 50 / 10 = 5
Selected information from Peridot Corporation's accounting records and financial statements for 2021 is as follows ($ in millions): Cash paid to acquire machinery $ 35 Reacquired Peridot common stock 56 Proceeds from sale of land 97 Gain from the sale of land 55 Investment revenue received 72 Cash paid to acquire office equipment 84 In its statement of cash flows, Peridot should report net cash outflows from investing activities of:
Answers
Answer:
Peridot should report net cash outflows from investing activities of $22 million.
Explanation:
Peridot corporation
Statement of cash flows
$ in millions
Purchase of machinery
($35)
Proceeds from sale of land
$97
Cash paid to acquire office
($84)
Net cash outflows from investing activities
($22)
• We ignored required common stock because it belongs to financing activities section of cash outflows. Gain from sale of land and investment revenue is for operating activities section of the cash flow
The Field Detergent Company sold merchandise to the Abel Company on June 30, 2016. Payment was made in the form of a noninterest-bearing note requiring Abel to pay $85,000 on June 30, 2018. Assume that a 10% interest rate properly reflects the time value of money in this situation.
Required: Calculate the amount at which Field should record the note receivable and corresponding sales revenue on June 30, 2016.
Answers
Answer:
$70,248
Explanation:
Calculation for the amount at which Field should record the note receivable and corresponding sales revenue on June 30, 2016
Using financial calculator to determine the PV of Note
Using this formula
PV of Note = Future value x PVF (i%, n)
Where,
Future value=85,000
n=2 year(2016-2018)
i= 10%
Let plug in the formula
PV Note= 85,000 x PVF (10%, 2)
PV Note= 85,000 x 0.82645
PV Note= $70,248
Therefore the amount at which Field should record the note receivable and corresponding sales revenue on June 30, 2016 is $70,248
Enterprise Solutions Inc. licenses its productivity software to Blackmon Company for $100,000, payable at contract inception. Enterprise agrees to provide semiannual software upgrades over the 5-year length of the contract to enable Blackmon to benefit from any technological advancement. Enterprise concludes that the software license is not distinct from the promised upgrades. Required: What journal entries are necessary for Enterprise to account for this transaction
Answers
Answer:
Date Account Titles & Explanation Debit Credit
Jan 1 Cash $100,000
Unearned Revenue $100,000
(To record the contract consideration in advance)
Dec 31 Unearned Revenue $20,000
Sales Revenue $20,000
($100,000/5 years)
(To record the annual expired transaction revenue)
Jayden has one hour for his part of customer service training for new employees. Which is the best way to reinforce the learning? Have a quiz at the end of the session. Have a quiz at the end of the session. Use PowerPoint slides for each separate concept. Use PowerPoint slides for each separate concept. Put the sales associates on the floor for one hour. Put the sales associates on the floor for one hour. Set aside some partnered role play time with employees.
Answers
Answer:
Have a quiz at the end of the session.
Explanation:
Adams Company manufactures two products. The budgeted per-unit contribution margin for each product follows: Super Supreme Sales price $ 95 $ 124 Variable cost per unit (58 ) (74 ) Contribution margin per unit $ 37 $ 50 Adams expects to incur annual fixed costs of $227,880. The relative sales mix of the products is 60 percent for Super and 40 percent for Supreme. Required Determine the total number of products (units of Super and Supreme combined) Adams must sell to break even. How many units each of Super and Supreme must Adams sell to break even
Answers
Answer:
Expected contribution as per sales mix = $37*0.60 + $50*0.40
= $22.20 + $20
= $42.20 per unit
Total number of products in total at break even point = Total fixed cost / Contribution per unit
= $227,880 / $42.20 per unit
= 5,400 units
How many units each of Super and Supreme must Adams sell to break even?
According to sales mix:
Super = 5,400 * 60% = 3,240 units
Supreme = 5,400 * 40% = 2,160 units.