Answer:
The portfolio’s new beta will be 1.125
Explanation:
In this question, we are interested in calculating the portfolio’s new beta given the value of the beta of the stock which is used in replacing it.
We apply a mathematical approach here.
Mathematically;
Portfolio beta=Respective beta * Respective investment weight
=(50,000/200,000*1.5)+(50,000/200,000*0.8)+(50,000/200,000*1)+(50,000/200,000*1.2)
= 0.375 + 0.2 + 0.25 + 0.3 = 1.125
During the month of March, Karen Company's employees earned wages of $68,000. Withholdings related to these wages were $5,202 for Social Security (FICA), $14,700 for federal income tax, $6,300 for state income tax, and $900 for union dues. The company incurred no cost related to these earnings for federal unemployment tax, but incurred $2,000 for state unemployment tax.
Required:
Prepare the necessary March 31 journal entry to record wages expense and wages payable. Assume that wages earned during March will be paid during April.
Answer:
Journal entry to record wages expense and wages payable
Explanation:
As the company incurred no cost related to these earnings for federal unemployment tax so it would be excluded from wages and salaries expense
Entry DEBIT CREDIT
Salaries and wages Expense $68,000
Social Security(FICA) $5,202
Federal income tax $14,700
State income tax $6,300
union dues $900
Salaries and wages payable $40,898
A contractual arrangement between a parent company and an individual or firm that allows them to operate a certain type of business under an established name and according to specific rules is called
Answer:
Franchise
Explanation:
A contractual arrangement between a parent company and an individual or firm that allows them to operate a certain type of business under an established name and according to specific rules is called franchise.
For instance, Mr Biggs could give the authority to an individual or group of people which would enable them to do the same business in another geographical location.
Hence, franchise is a license that allows individuals or group of people knowledge, processes, trademarks to provide a service.
The primary objective of financial accounting is to: Multiple Choice Provide information on both the costs and benefits of looking after products and services. Monitor consumer needs, tastes, and price concerns. Provide accounting information that serves external users. Know what, when, and how much product to produce. Serve the decision-making needs of internal users.
Answer:
Provide accounting information that serves external users.
Explanation:
Financial accounting is can be defined as the field of accounting involving specific processes such as recording, summarizing, analysis and reporting of financial transactions with respect to business operations over a specific period of time. Financial experts or accountant uses either the cash basis or accrual basis of accounting.
The primary objective of financial accounting is to provide accounting information that serves external users.
In Accounting, the external users of a financial accounting information includes customers, creditors, investors shareholders and government regulators.
The information that are found in a financial statement are revenues, expenses, liability, equity and assets.
Hence, financial accounting is aimed at providing information to external users, who are outside an organization.
For the past week, a company's common stock closed with the following prices: $61.50, $62.00, $61.25, $60.875, and $61.50. What was the price range
Answer:
$1.125
Explanation:
price range is the difference between the highest and lowest price
highest price = $62
Lowest price = $60.875
$62 - $60.875 = $1.125
Forten company current year income statement, comparative balance sheets and additional information follow. For the year all sales are credit sales. all credits to accounts recievable reflect cash reciepts from customers. all purchases of inventory are on credit. all debits to account payable reflectr cash payments for inventory and other expenses are paid in advance and are initially debited to prepaid expenses.
Assets 2013 2012
Cash $70,944 $72,000
Accounts receivable 79,125 61,125
Merchandise inventory 259,906 230,800
Prepaid expenses 1,600 2,100
Equipment 162,600 120,000
Accum- depreciation - Equipment (53,800) (60,000)
Total assets $520,375 $426,025
Liabilities and Equity
Accounts payable $58,075 $111,200
Short-term notes payable 10,000 6,000
Long-term notes payable 24,175 43,000
Common stock, $5 par value 167,500 150,000
Paid-in capital excess of par,
common stock 52,500 0
Retained earnings 206,025 115,825
Total liabilities and equity $520,375 $426,025
FORTEN COMPANY Income Statement For Year Ended December 31, 2013
Sales $635,000
Cost of goods sold 306,000
Gross profit 329,000
operating expenses
Depreciation expense $20,000
Other expenses 128,300 148,300
Other gains (losses)
Loss on sale of equipment (4,500)
Income before taxes 176,200
Income taxes expense 31,000
Net income $145,200
Additional information on Year 2013 transactions:
a. The loss on the cash sale of equipment was $4,500 (details in b)
b. Sold equipment costing $45,800 with accumulated depreciation of $26,200, for $15,100 cash.
c. Purchased equipment costing $88,300 by paying $63,000 cash and signing a long-term note payable for the balance.
d. Borrowed $4,000 cash by signing a short-term note payable.
e. Paid $44,125 cash by signing a short-term note payable.
f. Issued 3,500 shares of common stock for $20 cash per share.
g. Declared and paid cash dividends of $53,000.
Required
Prepare a complete statement of cash flows; report its operating activities using the indirect method. (Amounts to be deducted should be indicated with a minus sign)
Answer:
Forten Company
Statement of Cash Flows
For the year ended December 31, 2013
Cash flow from operating activities:
Net income $145,200
Adjustments to net income:
+ Depreciation expense $20,000+ Loss on sale of equipment $4,500+ Decrease in prepaid expenses $500- Increase in accounts receivable $18,000- Increase in merchandise inventory $29,106- Decrease in accounts payable $53,125 -$75,231Net cash flow from operating activities $69,969
Cash flow from investing activities:
Cash inflow from sale of equipment $15,100
Cash outflow from purchase of equipment -$63,000
Net cash flow from investing activities -$47,900
Cash flow from financing activities:
Cash inflow from issuance of common stock $70,000
Cash inflow from bank's short term notes payable $4,000
Cash outflow from bank's short term notes payable -$44,125
Cash outflow from dividends -$53,000
Net cash flow from financing activities -$23,125
Net cash decrease -$1,056
Cash balance December 31, 2012 $72,000
Cash balance December 31, 2013 $70,944
Allowance for Doubtful Accounts has a credit balance of $2,100 at the end of the year (before adjustment), and an analysis of customers' accounts indicates uncollectible receivables of $19,700. Which of the following entries records the proper adjustment for bad debt expense?
a. debit Bad Debt Expense, $21,800; credit Allowance for Doubtful Accounts, $21,800
b. debit Allowance dfor Doubtful Accounts, $17,600; credit Bad Debt Expense, $17,600
c. debit Allowance for Doubtful Accounts, $21,800; credit Debt Expense, $21,800
d. debit Bad Debt Expense, $17,600; crdit Allowance for Doubful Accounts, $17,600
Other receivables includes all of the followoing EXCEPT:
a. taes receivable
b. interest receivable
c. receivables from employees
d. notes receivabe
Answer:
1. Analysis of accounts receivables Allowance Required $19,700
Less: Credit balance available in Allowance account $2,100
Additional allowance required $17,600
The journal entry will be as follows
DEBIT CREDIT
Bad debt expenses $17,600
Allowance for doubtful accounts $17,600
Hence, the correct option is D.
2. Other receivables include all except "Notes Receivables"
Hence, the correct option is D
Break-Even Sales and Sales to Realize Income from Operations For the current year ended October 31, Friedman Company expects fixed costs of $361,200, a unit variable cost of $43, and a unit selling price of $64. a. Compute the anticipated break-even sales (units). units b. Compute the sales (units) required to realize income from operations of $84,000. units
Answer:
a. Compute the anticipated break-even sales (units). units
17,200 unitsb. Compute the sales (units) required to realize income from operations of $84,000. units
21,200 unitsExplanation:
break even point in units = total fixed costs / contribution margin per unit
total fixed costs = $361,200contribution margin per unit = $64 - $43 = $21break even point in units = $361,200 / $21 = 17,200 units
break even point + expected profits = (total fixed costs + expected profits) / contribution margin per unit
total fixed costs + expected profits = $361,200 + $84,000 = $445,200contribution margin per unit = $64 - $43 = $21break even point + expected profits in units = $445,200 / $21 = 21,200 units
Suppose that a perfectly competitive firm faces a market price of $7 per unit, and at this price the upward-sloping portion of the firm's marginal cost curve crosses its marginal revenue curve at an output level of 1 comma 400 units. If the firm produces 1 comma 400 units, its average variable costs equal $6.50 per unit, and its average fixed costs equal $0.80 per unit.
Required:
a. What is the firm's maximizing (or loss-minimizing output level?
b. What is the amount of it's economic profits (or losses) at this output level?
Answer:
1. This firm have the profit maximizing output level of 1400 units because a firm in any industry will maximize profit where MR=MC. Here MR is equal to MC at the output level of 1400. So profit maximizing level of output is 1400 units.
2. Economic profit = Total revenue - total cost.
Where, Total revenue = Quantity * price
= 1400 * 7
= $9,800
Total variable cost = AVC * quantity
= 6.50 *1400
= $9,100
Total fixed cost = AFC * quantity
= 0.80 * 1400
= $1,120
Economic profit = Total revenue - Total variable cost - Total fixed cost
Economic profit = $9,800 - $9,100 - $1,120
Economic profit = -$420
. The firm is having economic loss equal to 420.
Conclusion: This firm is facing economic loss in its output.
If you put up $39,000 today in exchange for a 6.5 percent, 16-year annuity, what will the annual cash flow be? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
$3,992.73
Explanation:
For computing the annual cash flow we need to apply the PMT formula i.e to be shown in the attachment below:
Given that,
Present value = $39,000
Future value or Face value = $0
RATE = 6.5%
NPER = 16 years
The formula is shown below:
= PMT(RATE;NPER;-PV;FV;type)
The present value come in negative
So, after applying the above formula, the annual cash flow is $3,992.73
Spartan Corporation discovered these errors in August of Year 3: Reported Net Income for Year 1 was $20,000. Reported Net Income for Year 2 was $18,000. The correct Year 2 Net Income is:
Answer:
Net income year 2 = $21,300
Explanation:
I looked for the missing information and found this:
Year Depreciation overstated Prepaid expense omitted
1 $2,500 $2,000
2 $4,000 $2,700
If your question doesn't include the same values, just adjust the answer.
Year 2's net income = net income (year 2) + overstated depreciation (year 2) + omitted prepaid expenses (year 1) - omitted prepaid expenses (year 2) = $18,000 + $4,000 + $2,000 - $2,700 = $21,300
You are cautiously bullish on the common stock of the Wildwood Corporation over the next several months. The current price of the stock is $50 per share. You want to establish a bullish money spread to help limit the cost of your option position. You find the following option quotes: Wildwood Corp Underlying Stock price: $50.00 Expiration Strike Call Put June 45.00 8.50 2.00 June 50.00 4.50 3.00 June 55.00 2.00 7.50 Ignoring commissions, the cost to establish the bull money spread with calls would be ________. Group of answer choices
Answer:
650
Explanation:
A call option is an option to buy a product or asset at a stated price at a later date. The risk of call option is capped at premium for buying the option. Wildwood corporation will incur cost of 650 to establish the bull money spreads with calls.
8.5 +4.5 = 13
13 * $50.00 = $650
Which of the following is approximately the Value at Risk at 5 percent of a portfolio of $10 million of asset A, whose expected return is 10 percent and volatility is 20 percent, and $10 million of asset B, whose expected return is 16 percent and volatility is 25 percent, where the correlation between the two assets is 0.1.
A. $5.6 million
B. $10 million
C. $15 million
D. $1.25 million
E. none of the above
Answer:
A. $5.6 million
Explanation:
Value at risk is the minimum value of portfolio that is considered to lose in case of certain event or volatility. There are two assets in the given scenario and both of them have worth of $10 million. The correlation between them is 0.1 which means there is low strength relationship between the two assets. The value at risk can be found by:
($10 * 5% * 20%) + ($10 * 16% * 25%) * log 1.65
= 5.6 million
Orion Flour Mills purchased a new machine and made the following expenditures:
Purchase price $ 59,000
Sales tax 5,200
Shipment of machine 840
Insurance on the machine for the first year 540
Installation of machine 1,680
The machine, including sales tax, was purchased on account, with payment due in 30 days. The other expenditures listed above were paid in cash.
Required:
Record the above expenditures for the new machine. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
Orion Flour Mills
Debit Milling Machine $64,200
Credit Accounts Payable $64,200
To record the purchase of a new machine on account, terms n/30.
Debit Freight-in $840
Debit Insurance $540
Debit Machine Installation $1,680
Credit Cash Account $3,060
To record additional expenditure on the purchase.
Debit Milling Machine $2,520
Credit Freight-in $840
Credit Machine Installation $1,680
To record the cost of additional expenditure to the Milling Machine.
Explanation:
Using the journal to account for the acquisition of a new machine by Orion Flour Mills initially records the transactions after identifying the accounts involved, and the accounts to be debited and credited respectively.
The cost of the new machine includes the additional expenditure incurred for bringing it into use. The expenditure will include the shipment, sales tax, and installation costs. Insurance will be excluded as it is not incurred in order to bring the machine into use.
An estate provides a perpetuity with payments of X at the end of each year. Seth, Susan, and Lori share the perpetuity such that Seth receives the payments of X for the first n years and Susan receives the payments of X for the next m years, after which Lori receives all the remaining payments of X. Which of the following represents the difference between the present value of Seth's and Susan's payments using a constant rate of interest?
a. X[an-vnam]
b. X[¨an-vn¨am]
c. X[an-vn+1am]
d. X[an-vn-1am]
e. X[van-vn+1am]
Answer: a. [tex]X[a_{n} -v^{n} a_{m} ][/tex]
Explanation:
The Present Value of the perpetuity for Seth is denoted by;
= [tex]X * a_{n}[/tex] because Seth receives it for n years.
The Present Value of the perpetuity for Susan is denoted by;
= [tex]Xv^{n} * a_{m}[/tex] because it is the value after n periods multiplied by the payments received for m periods.
The result is;
= [tex]X * a_{n}[/tex] - [tex]Xv^{n} * a_{m}[/tex]
= [tex]X[a_{n} -v^{n} a_{m} ][/tex]
A company issues $60,000 of 6%, 5-year bonds dated January 1 that pay interest semiannually on June 30 and December 31 each year. If the issuer accepts $62,000 for the bonds, the premium on bonds payable will _________________ total interest expense recognized over the life of the bond by $ ______________.
Answer:
The premium on the bonds payable will decrease the total interest expense recognized over the life bond by $2000
Explanation:
The premium on bonds payable is the excess of cash proceeds received from the bond's issuance over the face value.
cash proceeds=$62,000
face value=$60,000
premium on bonds payable=$62,000-$60,000
premium on bonds payable=$2000
This will decrease the total interest expense recognized over the life bond by $2000
Boomerang Computer Company sells computers with an unconditional right to return the computer if the customer is not satisfied. Boomerang has a long history selling these computers under this returns policy and can provide precise estimates of the amount of returns associated with each sale. Boomerang most likely should recognize revenue:
Answer:
When Boomerang delivers a computer to a customer.
Explanation:
Revenue is recognised by a business when it is earned. That is when the transaction is completed and a sale is established.
In the given scenario when a customer buys goods for Boomerang they have unconditional right to return the computer if the customer is not satisfied.
The situation where Boomerang should recognise revenue is when a computer is delivered to the customer and the sale is consummated.
If the company recognises revenue when an order is made, there is possibility of customer returning the computer. Then their revenue data will be inaccurate
Answer:
the boomerang delivers
Explanation:
On February 1, 2021, a company loans one of its employees $29,000 and accepts a ten-month, 8% note receivable. Calculate the amount of interest revenue the company will recognize in 2021
Answer:
Calculation of interest revenue:
Interest revenue = $29,000 x 8% x 10/12 = $1,933
Explanation:
a) Data and Calculation:
Feb. 1, 2021 Loan to employees = $29,000
Ten-month, 8% note receivable
Interest revenue = $29,000 x 8% x 10/12 = $1,933
The note is for 10 months, but the rate of interest is 8% per annum. After the rate is applied on the loan to get an interest of $2,320, this will then be multiplied by 10 and divided by 12 to get the 10 months interest revenue. These loans to employees are expected to be repaid by the end of November, 2021 with the interest.
On July 1, Bramble Corporation purchases 670 shares of its $6 par value common stock for the treasury at a cash price of $9 per share. On September 1, it sells 420 shares of the treasury stock for cash at $14 per share.
Journalize the two treasury stock transactions. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date Account Titles and Explanation Debit Credit
Answer and Explanation:
The journal entries are shown below:
On July 1
Treasury stock Dr (670 shares × $9 per share) $6,030
To Cash $6,030
(Being the purchase of treasury stock is recorded)
For recording this we debited the treasury stock as it increased the treasury and credited the cash as it decreased the assets
On Sep 1
Cash Dr (420 shares × $14 per share) $5,880
To Treasury Stock (420 shares × $9 per share) $3,780
To Additional paid in capital - Treasury stock $2,100
(Being the resale of treasury stock is recorded)
For recording this we debited the cash as it increased the assets and credited the treasury stock and additional paid in capital as the sale is made
An electric power plant uses solid waste for fuel in the production of electricity. the cost Y in dollars per hour to produce electricity is Y=11+0.4X+0.29X2, where X is in megawatts. Revenue in dollars per hour from the sale of electricity is 16X−0.2X2. Find the value of X that gives maximum profit. (Round to two decimal places.)
Answer:
The value of X that gives maximum profit is 15.92.
Explanation:
Before answering the question, Y and Revenue (R) given in the question are first correctly restated as follows:
Cost = Y = 11 + 0.4X + 0.29X^2 .......................................... (1)
Revenue = R = 16X − 0.2X^2 .............................................. (2)
Differentiating each of equations (1) and (2) with respect to X to obtain marginal cost (MC) and marginal revenue (MR), we have:
dY/dX = MC = 0.4 + 0.58X .................................................. (4)
dR/dX = MR = 16 - 0.4X ....................................................... (5)
In production theory, profit is maximized when MR = MC. Therefore, we equate equations (4) and (5) and solve for X as follows:
0.4 + 0.58X = 16 - 0.4X
0.58X + 0.4X = 16 - 0.4
0.98X = 15.6
X = 15.6 / 0.98
X = 15.92
Therefore, the value of X that gives maximum profit is 15.92.
Assume that England and Spain each has 40 labor hours available. Originally, each country divided its time equally between the production of cheese and bread. Now, each country spends all its time producing the good in which it has a comparative advantage. As a result, the total output of cheese increased by:____________
a. 15
b. 20
c. 25
d. 40
Answer: a. 15
Explanation:
Given;
Labour hours available to each nations.
England = 40 labour hours.
Spain = 40 labour hours.
Solution:
Total production of bread in 40 labour hours for each nation from the table is 15.
England = 10
Spain = 5
Since both nations decided to focus on their strength where they pose comparative advantage, the production of cheese would increase by 15. As this is the amount of bread produced in that time frame of 40 labour hours.
Clinton and Trump on fiscal policy In the 2016 Presidential election campaign, both Hillary Clinton and Donald Trump committed to big government infrastructure spending and tax cuts. Source: The Wall Street Journal, July 27, 2016 Consider an increase in infrastructure spending and a tax cut of the same magnitude. What policy will change aggregate demand the most: an increase in infrastructure spending or a cut in taxes?
Answer:
Clinton and Trump on fiscal policy In the 2016 Presidential election campaign
The policy that will change aggregate demand (AD) the most is a cut in taxes.
Explanation:
Aggregate demand is fueled mostly by household consumption. A cut in taxes increases the marginal propensity to consume (MPC) and reduces the marginal propensity to save (MPS), but at the same time fuels the marginal propensity to invest by firms trying to meet the new aggregate demand, thereby increasing the aggregate supply (AS) which is the real GDP output.
a company sells 600 bottles of a dietary supplement per week at$ 100 per bottle. The supplement is ordered from a supplier who charges fixed cost of $30 per order, and $ 50 per bottle. The annual inventory holding cost is 40%. Assume the company operates 50 weeks in a year. What is the optimal number of bottles company should order?
Answer:
the economic order quantity or optimal quantity = 300 bottles per order
Explanation:
economic order quantity (EOQ) = √[(2SD) / H]
S = cost per order = $30D = annual demand = 600 x 50 weeks = 30,000H = holding costs = $50 x 40% = $20EOQ = √[(2 x $30 x 30,000) / $20] = √($1,800,000 / $20) = √90,000 = 300
This means that the company must make 2 orders per week and 100 orders per year. This happens because the holding costs per unit are too high, therefore, in order to reduce costs you must have a small inventory.
Benjamin Graham, the father of value investing, once said, "In the short run, the market is a voting machine, but in the long run, the market is a weighing machine." In this quote, Benjamin Graham was referring to the key difference between the "price" and the "value" of a security. In November 2006, Citigroup's stock (NYSE: C) was trading at $49.59. Following the credit crisis of 2007-2008 and by the end of October 2009, Citigroup's stock price had plummeted to $4.27. Several banks went under, and others saw their stock prices lose more than 60% of their value. Based on your understanding of stock prices and intrinsic values, which of the following statements is true?
a. A stock's intrinsic value is based only on the perceived risk of a stock.
b. A stock's intrinsic value is based on true investor returns.
Which of the following describe the reason(s) why maximization of intrinsic stock value benefits society.
a. Most investors prefer companies that can rise prices beyond reasonable levels.
b. Successful companies can avoid raising external funds in the financial markets.
c. successful companies higher more employees.
d. stock price maximization requires efficient, low-cost businesses.
Answer:
1- a. A stock's intrinsic value is based on true investor return.
2- a. Most investors prefer companies that can rise prices beyond reasonable levels.
b. Successful companies can avoid raising external funds in the financial markets.
Explanation:
Intrinsic value of a company's stock is the real value of stock which is based on systematic factors affecting the company. The factors affecting the intrinsic value of company are usually internal factors. The performance of company management, employee satisfaction and its operational efficiencies are the factor which drive intrinsic value of a company.
The Walthers Company has a semi-annual coupon bond outstanding. An increase in the market rate of interest will have which one of the following effects on this bond?
a. increase the coupon rate.
b. decrease the coupon rate.
c. increase the market price.
d. decrease the market price.
e. increase the time period.
Answer:
The answer is D.
Explanation:
An increase in the market rate of interest of a bond will decrease the market price of the bond. Market rate of interest of a bond is inversely related to the market price of the bond.
For example, A bonds is issued with a higher interest rate, the price of existing bonds will fall because the demand for this bond falls.
The new machine will increase cash flow by $326,000 per year. You believe the technology used in the machine has a 10-year life; in other words, no matter when you purchase the machine, it will be obsolete 10 years from today. The machine is currently priced at $1,760,000. The cost of the machine will decline by $111,000 per year until it reaches $1,205,000, where it will remain.
1. If your required return is 13 percent, calculate the NPV today.
2. If your required return is 13 percent, calculate the NPV for the following years.
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
3. Should you purchase the machine?
4. If so, when should you purchase it?
A. Today
B. One year from now
C. Two years from now
Answer:
1. If your required return is 13 percent, calculate the NPV today.
initial outlay -$1,760,000
10 annual cash flows $326,000
NPV = $8,955.37
2. If your required return is 13 percent, calculate the NPV for the following years.
Year 1
initial outlay -$1,649,000
9 annual cash flows $326,000
NPV = $23,919.57
Year 2
initial outlay -$1,538,000
8 annual cash flows $326,000
NPV = $26,399.12
Year 3
initial outlay -$1,427,000
7 annual cash flows $326,000
NPV = $14,771
Year 4
initial outlay -$1,316,000
6 annual cash flows $326,000
NPV = -$12,798.77
Year 5
initial outlay -$1,205,000
5 annual cash flows $326,000
NPV = -$169,382.61
Year 6
initial outlay -$1,205,000
4 annual cash flows $326,000
NPV = -$346,322.35
3. Should you purchase the machine?
You can purchase the machine this year, but it would be more profitable if you purchase it later.
4. If so, when should you purchase it?
C. Two years from now
The refractive index of a rarer medium with respect to a denser medium is.....
A)Greater than 1
B) Smaller Than 1
C) Negative
D)-1
Answer:
B) Smaller Than 1
Explanation:
Snell's Law states that the ratio of the sines of incidence and refraction is equal to the ratio of the phase of velocities in the two phases. When light travels from a rarer medium like air to a denser medium like water, the light would be refracted towards the normal line. For example, the refractive index of air with respect to glass is represented as;
sin i / sin r
If light rays travel from glass which is a denser medium to a rarer medium which is air, the light rays would bend away from the normal line, and then the angle of refraction would be greater than the angle of incidence. So, the refractive index of the rarer medium which is air with respect to the denser medium which is glass will be smaller than 1.
During 2018, Skechers USA had Sales of $1,846.4, Gross profit of $818.8 million and Selling, General and Administration expenses of $730.7 million. What was Skechers' Cost of sales for 2018
Answer:
The answer is $1,027.6 million
Explanation:
Gross profit = Sales - Cost of Sales(cost of goods sold)
Gross profit = $818.8 million
Sales of $1,846.4 million.
To find Cost of Sales, we rearrange the formula to now be:
Sales - Gross profit
$1,846.4 million - $818.8 million
=$1,027.6 million
Therefore, Skechers' Cost of sales for 2018 is $1,027.6 million
The following costs result from the production and sale of 4,500 drum sets manufactured by Tight Drums Company for the year ended December 31, 2019. The drum sets sell for $300 each. The company has a 35% income tax rate.
Variable production costs
Plastic for casing $121,500
Wages of assembly workers 414,000
Drum stands 162,000
Variable selling costs
Sales commissions 112,500
Fixed manufacturing costs
Taxes on factory 15,000
Factory maintenance 30,000
Factory machinery depreciation 90,000
Fixed selling and administrative costs
Lease of equipment for sales staff 30,000
Accounting staff salaries 80,000
Administrative management salaries 160,000
Required:
1. Prepare a contribution margin income statement for the year.
2. Compute its contribution margin per unit and its contribution margin ratio.
3. For each dollar of sales, how much is left to cover fixed costs and contribute to operating income?
Answer:
Tight Drums Company
1. Contribution Margin Income Statement for the year ended December 31, 2019:
Sales Revenue $1,350,000
Variable production costs:
Plastic for casing $121,500
Drum stands 162,000
Wages of assembly workers 414,000
Total variable prodn. costs $697,500
Variable selling costs :
Sales commissions 112,500
Total variable costs $810,000 810,000
Contribution $540,000
Fixed manufacturing costs:
Taxes on factory 15,000
Factory maintenance 30,000
Factory machinery depreciation 90,000
Total Manufacturing overhead $135,000 135,000
Fixed selling and administrative costs :
Lease of equipment for sales staff 30,000
Accounting staff salaries 80,000
Administrative management salaries 160,000
Total fixed selling and admin. costs $270,000 270,000
Operating Profit (Pre-Tax) Income $135,000
Income Tax Expense (Rate = 35%) 47,250
Net Income $87,750
2.Computation of Contribution Margin per unit and Contribution Margin Ratio:
a) Contribution Margin per unit
= Contribution Margin divided by Units sold
= $540,000/4,500
= $120 per unit
b) Contribution Margin Ratio
= Contribution per unit/Selling price * 100
= $120/$300 * 100
= 40%
3. For each dollar of sales, contribution per dollar
= 40% of $1
= $0.40
Explanation:
a) Data:
Sales = 4,500 drums
Selling price = $300 each
Sales Revenue = 4,500 x $300 = $1,350,000
Variable production costs:
Plastic for casing $121,500
Drum stands 162,000
Wages of assembly workers 414,000
Total variable prodn. costs $697,500
Variable selling costs :
Sales commissions 112,500
Total variable costs $810,000
Fixed manufacturing costs:
Taxes on factory 15,000
Factory maintenance 30,000
Factory machinery depreciation 90,000
Total Manufacturing overhead $135,000
Fixed selling and administrative costs :
Lease of equipment for sales staff 30,000
Accounting staff salaries 80,000
Administrative management salaries 160,000
Total fixed selling and admin. costs $270,000
Income Tax Rate = 35%
b) Tight Drums Company's contribution margin income statement is a financial statement that separates all the variable costs from the fixed costs. The difference between Tight Drums' Sales Revenue of $1,350,00 and the Total Variable Costs of $810,000 is called the Contribution Margin.
The Contribution margin of $540,000 shows how much of the sales revenue is left to cover the fixed costs totalling $405,000 and generate operating income, after deducting all the variable costs.
This contribution margin can be expressed per unit by dividing the contribution margin of $540,000 by the 4,500 units sold. The per unit value can then be expressed as a ratio of the selling price. From the contribution margin ratio, we can estimate how much is left per dollar of sales for Tight Drums Company to cover its fixed costs and generate operating income.
In the context of a firm's statement of cash flows, ________ include the purchase, sale, or investment in fixed assets, such as real estate, equipment, and buildings.
Answer: investing activities
Explanation:
Investing activities is one of the categories of the net cash activities that is shown on a cash flow statement. It should be noted that investing activities is the buying and selling of long-term assets and every other business investments.
Investing activities include the purchase, sale, or investment in fixed assets, such as real estate, equipment, and buildings.
the average rate of the 36 children in the group was 55 kgs children of average weight 53 cages left the group was the what new average weight of group in kg
Complete Question:
The average weight of the 36 children in the group was 55 kgs. 5 children of average weight 53 kgs left the group. What was the new average weight of the group in kg?
Answer:
The new average weight of the group = 1,715/31 = 55.32 kgs
Explanation:
Average weight of 36 children = 55 kgs
Total weight of 36 children = 1,980 (36 * 55) kgs
Average weight of 5 children = 53 kgs
Total weight of 5 children = 265 (53 * 5) kgs
When 5 children of 53 kgs average weight left the group,
the remaining 31 children (36 - 5) had total weight = 1,715 (1,980 - 265)
Therefore, the new average weight for 31 children at a total of 1,715, will be
= 1,715/31
= 55.32 kgs
Average rate is considered as a single rate that applies to property in multiple locations and is based on a weighted average of the dweller rates for each site.
Given Information:
Average weight=55 kgsNumber of children=36Average weight of 36 children = 55 kgs
Total weight of 36 children = 1,980 (36 * 55) kgs
Average weight of 5 children = 53 kgs
Total weight of 5 children = 265 (53 * 5) kgs
When 5 children of 53 kgs average weight left the group, the remaining 31 children (36 - 5) had total weight = 1,715 (1,980 - 265)
Therefore, the new average weight for 31 children at a total of 1,715, will be
= 1,715/31
= 55.32 kgs
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