Answer:
you can get more of one good only by giving up some of another good
Explanation:
A production possibilities frontier shows the opportunity cost of producing one good instead of another. This way, as you follow the curve, the combination of goods will vary, increasing the production of one good but deceasing the production of the other.
Opportunity costs are the benefits lost or extra costs associated to choosing one activity or investment over another alternative. Since resources are scarce, you must always give something up in order to obtain another thing, e.g. you give up your leisure time in order to study.
1. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the first-in, first-out method and the periodic inventory system. Inventory, June 30 $ Cost of goods sold $ 2. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the last-in, first-out method and the periodic inventory system. Inventory, June 30 $ Cost of goods sold $ 3. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the weighted average cost method and the periodic inventory system. Note: Round the weighted average unit cost to the nearest dollar and final answers to the nearest dollar. Inventory, June 30 $ Cost of goods sold $ 4. Compare the gross profit and June 30 inventories using the following column headings. For those boxes in which you must enter subtracted or negative numbers use a minus sign. FIFO LIFO Weighted Average Sales $ $ $ Cost of goods sold Gross profit $ $ $ Inventory, June 30 $ $ $
Complete Question:
The beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are as follows: Date Transaction Number of Units Per Unit Total Apr. 3 Inventory 25 $1,200 $30,000 8 Purchase 75 1,240 93,000 11 Sale 40 2,000 80,000 30 Sale 30 2,000 60,000 May 8 Purchase 60 1,260 75,600 10 Sale 50 2,000 100,000 19 Sale 20 2,000 40,000 28 Purchase 80 1,260 100,800 June 5 Sale 40 2,250 90,000 16 Sale 25 2,250 56,250 21 Purchase 35 1,264 44,240 28 Sale 44 2,250 99,000
Required: 1. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the first-in, first-out method and the periodic inventory system. Inventory, June 30 $ Cost of goods sold $
2. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the last-in, first-out method and the periodic inventory system. Inventory, June 30 $ Cost of goods sold $
3. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the weighted average cost method and the periodic inventory system. Note: Round the weighted average unit cost to the nearest dollar and final answers to the nearest dollar. Inventory, June 30 $ Cost of goods sold $
4. Compare the gross profit and June 30 inventories using the following column headings. For those boxes in which you must enter subtracted or negative numbers use a minus sign. FIFO LIFO Weighted Average Sales $ $ $ Cost of goods sold Gross profit $ $ $ Inventory, June 30 $ $ $
Answer:
Dunne Co.1. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the first-in, first-out method and the periodic inventory system:
a) Inventory, June 30 = $32,864 (26 x $1,264)
b) Cost of goods sold = Cost of goods available for sale - Ending Inventory = $310,776 ($343,640 - $32,864)
2. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the last-in, first-out method and the periodic inventory system:
a) Inventory, June 30 = $31,240
Beginning Inventory 25 units at $1,200 = $30,000
Purchase on April 8, 1 unit at $1,240 1,240
Total Ending Inventory $31,240
b)Cost of goods sold = Cost of goods available for sale - Ending Inventory
= $311,400 ($343,640 - $32,240)
3. Determination of the inventory on June 30 and the cost of goods sold for the three-month period, using the weighted average cost method and the periodic inventory system. Note: Round the weighted average unit cost to the nearest dollar and final answers to the nearest dollar:
a) Inventory, June 30 = $32,500 (26 x $1,250)
b) Cost of goods sold = $311,250 (249 x $1,250)
4. Comparison of the Gross Profit and June 30 inventories using the following column headings:
FIFO LIFO Weighted Average
Sales $525,250 $525,250 $525,250
Cost of goods sold -310,776 -311,400 -311,150
Gross profit $214,474 $213,850 $214,100
Inventory, June 30 $32,864 $31,240 $32,489.60
Explanation:
a) Data on Purchase and Sale Transactions with the Quarter:
Date Transaction Number of Units Per Unit Total
In Out Cost Sales
Apr. 3 Inventory 25 $1,200 $30,000
8 Purchase 75 1,240 93,000
11 Sale 40 2,000 80,000
30 Sale 30 2,000 60,000
May 8 Purchase 60 1,260 75,600
10 Sale 50 2,000 100,000
19 Sale 20 2,000 40,000
28 Purchase 80 1,260 100,800
June 5 Sale 40 2,250 90,000
16 Sale 25 2,250 56,250
21 Purchase 35 1,264 44,240
28 Sale 44 2,250 99,000
b) Goods Available 275 $343,640
Cost of goods sold 249 See calculations
Sales 249 $525,250
Ending Inventory 26 See Calculations
c) Average cost of goods = Cost of goods available for sale/Quantity of goods available for sale = $343,640/275 = $1,249.60
d) Under the periodic inventory system:
1) FIFO assumes that the goods bought first are sold first.
2) LIFO assumes that the goods bought last are sold first
3) Weighted Average takes for granted that the cost of goods available for sale and inventory can be determined with the weighted average.
Using the period inventory system, it is when physical count is taken of inventory that one can estimate its value. Unlike the perpetual inventory system, the periodic inventory system waits till a financial period ends to value stock. The results for ending inventory under the weighted average method, using the perpetual inventory system differs from the results under the same method, using the periodic inventory system.
Martin runs a successful house painting business. He runs his business out of his garage, which he got converted into an office space. Martin, who had previously worked as a house painter in another company had good know-how of how to run a house-painting business. After a storm destroyed public properties in his neighboring town, he contracted with the mayor of that town to fulfill any painting jobs required during the town's reconstruction. In order to meet this demand and expand business, he hired more house painters.
According to the BRIE model, which of the following is an example of Martin's resource competency?
A. Martin hiring more house painters to meet demand
B. Martin contracting with the mayor to help paint during reconstruction
C. Martin setting up the business's office in his garage
D. Martin having prior knowledge of the house-painting business
Answer:
A. Martin hiring more house painters to meet demand
Explanation:
The BRIE model for entrepreneurship refers to:
Boundary: creating a physical place for your business and creating a mental place for your business inside your customers' mindsResources: all the physical resources that your business possesses Intention: how determined you are in making your business succeed Exchange: actually make your business generate revenue and business transactionsHuprey Co. is the defendant in the following legal claims. For each of following claims, does Huprey (a) record a liability, (b) disclose in notes, or (c) have no disclosure. 1. Huprey can resonably estimate that a pending lawsuit will result in damages of $1,280,000it is probable that Huprey will lose the case. Have no disclosure. Record a liability. Disclose in notes. 2. It is reasonably possible that Huprey will lose a pending lawsuit. The loss cannot be estimable. Have no disclosure. Disclose in notes. Record a liability. 3. Huprey is being sued for damages of $2,400,000. It is very unlikely (remote) that Huprey will lose the case. Have no disclosure. Record a liability. Disclose in notes. rev: 02_07_2018_QC_CS-117158
Answer:
1. Huprey can resonably estimate that a pending lawsuit will result in damages of $1,280,000, it is probable that Huprey will lose the case.
Record a liability.2. It is reasonably possible that Huprey will lose a pending lawsuit. The loss cannot be estimable.
Disclose in notes.3. Huprey is being sued for damages of $2,400,000. It is very unlikely (remote) that Huprey will lose the case.
Have no disclosure.Explanation:
Contingent liabilities must be recorded only when it is probable that the liability will happen and you can estimate the associated costs.
When contingent liabilities are only reasonably possible or you cannot estimate the amount, they must be included in the footnotes of the financial statements.
When contingent liabilities are not reasonably possible, nothing needs to be disclosed.
6. What aggregate planning difficulty that might confront an organization offering a variety of products and/or services would not confront an organization offering one or a few similar products or services
Explanation:
Aggregate planning can be defined as a marketing tool whose objective is to develop a 6 to 18 month plan for the organizational production process, in order to plan in advance the need for the amount of materials and resources that a company needs to have in each period time, so costs are reduced.
Some aggregate planning decisions involve the amount of subcontracting items, the amount of outsourcing, overtime hours, the amount of inventory to be maintained and to be accumulated in a certain period, etc.
Aggregated planning helps the organization to meet demand and supply in a period of time, and it is also possible to be an instrument of influence on supply and demand, so an organization that offers a variety of products and / or services could face difficulties management of all the variables necessary for the production of varied items, as this planning takes time, affects costs, customer satisfaction, synchronization of the supply chain, etc.
Alden Co.’s monthly unit sales and total cost data for its operating activities of the past year follow. Management wants to use these data to predict future fixed and variable costs.
Month Units Sold Total Cost Month Units Sold Total Cost
1 318,000 $155,500 7 362,000 $292,624
2 163,000 99,250 8 268,000 149,750
3 263,000 203,600 9 76,400 67,000
4 203,000 98,000 10 148,000 128,625
5 288,000 199,500 11 92,000 92,000
6 188,000 110,000 12 98,000 83,650
Estimate both the variable costs per unit and the total monthly fixed costs using the high-low method. (Do not round intermediate calculations.)
Answer:
Alden Co.
Prediction of Future Fixed and Variable Costs, using the high-low method:
a) Determination of the Variable Cost:
7 362,000 $292,624
9 76,400 $67,000
285,600 $225,624
Variable cost per unit = $225,624/285,600 = $0.79
Fixed Costs = $76,000 - (76,400 x $0.79) = $15,644
Explanation:
Month Units Sold Total Cost
1 318,000 $155,500
2 163,000 99,250
3 263,000 203,600
4 203,000 98,000
5 288,000 199,500
6 188,000 110,000
7 362,000 292,624
8 268,000 149,750
9 76,400 67,000
10 148,000 128,625
11 92,000 92,000
12 98,000 83,650
The High-Low Method of determining costs can be relatively accurate if the highest and lowest activity levels represent the overall cost behavior of the company. Inaccurate results will be obtained when the two extreme activity levels are significantly unrepresentative of the dataset. This is exactly the case in this example. If you try to estimate fixed cost, at another activity level, you will get a different result. So the high-low method is not ideal in most cases and its results should not be relied on solely. A better method is to do a regression analysis with the dataset to obtain a more accurate result.
Indicate what components of GDP (if any) each of the following transactions would affect. Check all that apply.
a. Uncle Paul pays a domestic contractor for renovating his home.
b. Aunt Jane buys a new house from a local builder.
c. You purchase a box of Belgium chocolate.
d. Ford manufactures a Focus and sells it to Avis, the car rental company.
e. You pay a domestic plumber for fixing a leak in your bathroom.
f. Ford sells a Mustang from its inventory to the Martinez family.
g. California hires workers to repave Highway 101.
h. The federal government sends your grandmother a Social Security check.
1. Consumption
2. Investment
3. Government Purchases
4. Net Exports
Answer and Explanation:
As we know that
Gross domestic product = Consumption + Investment + Government purchase + Net exports
where,
Net exports = Exports - imports
a. Uncle Paul pays a domestic contractor to have his house renovated. = Consumption
b. Aunt Jane buys a new house from a nearby building firm. = Investment
c. You buy chocolate from Belgium in a box. = Consumption & net exports
d. Ford is making a Focus and marketing it to Avis, the car rental company. = Investment
To fix a leak in your bathroom you pay a domestic plumber. = Consumption
e. Ford is selling a Mustang to the Martinez family from its inventory. = Consumption and investment
f. California is hiring people to repave Highway 101. = Government purchase
g. The Federal government is sending a Social Security check to your grandmother. The same is not involved in GDP as it has transfer payment
According to the conditions, Uncle Paul pays a domestic contractor for renovating his home - Consumption. Thus, the correct transactions that affect a-1, b-2, c-1&4, d-2, e-1, f-1&2, g-3, h-No affect.
Utilizing resources to fulfill present needs and desires is referred to as consumption. In contrast, investing is making purchases in order to generate future revenue.
An asset is considered an investment if it is bought or invested in with the intention of increasing financial security and preserving hard-earned income.
Government purchases are things that the federal, state, and municipal governments spend money on.
The difference between a country's exports and imports in dollars over a specific time period is known as net exports.
Therefore, the following transactions with their effect are as follows:
a-1, b-2, c-1&4, d-2, e-1, f-1&2, g-3, h-No affect.
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On August 31,the balance sheet of La Brava Veterinary Clinic showed cash $9,000,Account receivable$1700,supplies $600,equipments $6000,account payable $3600,common stock $13,00 and retained earings $700. During september,the following transaction occur
1. paid $2900 cash for accounts payable
2. collected $1,300 of accounts receivable
3. purchased additional equipments for $2100,paying $800 in cash and the balance on account
4. recognized revenue of $7300 of which $1500 is collected in cash and balance due in october
5. declared and paid $400 cash dividend
6. paid salaries $1700 rent for september $900,and advertising expense $200
7. Incurred utilities expense for month on account $170
8. Received $10,000 from capital bank on 6 month note payable
a. prepare a tabular analysis of september transactions begin with august 31 balances.column headings: cash,account receivable,supplies,equipments,account payable,common stock,retain earnings with separate column for revenues,expenses,dividends.Including margin explanation changes in retain earnings. Revenue is called Service Revenueb. prepare an income statements for september,a retained earnings statements for september,and a balance sheet at september 30.
Answer:
Brava Veterinary Clinic
a) Tabular Analysis of September Transactions:
see attached.
b1) Income Statement for September:
Service Revenue $7,300
Expenses:
Salaries $1,700
Rent 900
Advertising 200
Utilities 170 ($2,970)
Net Income $4,330
b2) Retained Earnings Statements for September
Net Income $4,330
Beginning Retained Earnings $700
Dividends ($400)
Ending Retained Earnings $4,630
b3) Balance Sheet at September 30:
Assets:
Cash $14,900
Accounts Receivable 6,200
Supplies 600
Equipment 8,100
Total Assets $29,800
Liabilities + Equity:
Accounts Payable $12,170
Common Stock 13,000
Retained Earnings 4,630
Total Liabilities + Equity $29,800
Explanation:
Financial Statements (Income Statement and Balance Sheet) are prepared at the end of a period to show the financial performance (Net Income) and the financial position (Assets = Liabilities + Equity) of a business entity.
A tabular statement of transactions illustrates the changes that have taken place during the period as a result of transactions. Transactions affect the Assets and Liabilities and Equity equally. The excess of revenue over expenses gives a net income.
Answer:
For a better visualization of the answer the first point was attached as an image.
Income Statement
Sales Revenues 7300
Salaries expense (1700)
Rent Expense (900)
Advertising Expense (200)
Utilities expense (170)
Net Income 4,330
Retained Earnings
Beginning 700
Income 4,330
Dividends (400)
Ending 4,630
Balance Sheet
Cash 14,900
Account Receivables 6,200
Supplies 600
Current 21,700
Equipment 8,100
Total Assets 29,800
Liablities
Account Payable 2,170
Note Payable 10,000
Total Liabilities 12,170
Equity
Common Stock 13,000
Retained Earnings 4,630
Total Equity 17,630
Total Liabilities + Equity 29,800
Explanation:
The dividends paid are not considered an expense.
We consider revenues and expense using the accrual basis rather than cash basis so we also recognize accrued expense (utilities ) and accrued revenues (sales which weren't paid right away)
For the Balance sheet the equipment is considered long.temr asset as their usefil life exceed a year.
The note payable while it is different from account payable is also a current liaiblity as it is due within the one-uyear window.
Karen Wilson and Katie Smith are looking at the company's health care options and trying to determine how much their net pay will decrease if they sign up for the qualified cafeteria plan offered by the company. Karen, a married woman with four exemptions, earns $2,250 per biweekly payroll. Katie, a single woman with one exemption, also earns $2,075 per biweekly payroll. The biweekly employee contribution to health care that would be subject to the cafeteria plan is $115.
Required:
Compute the taxable income for Karen and Katie.
Karen’s taxable income if she declines to participate in the cafeteria plan: _____
Karen’s taxable income if she participates in the cafeteria plan: _____
Katie’s taxable income if she declines to participate in the cafeteria plan: _____
Katie’s taxable income if she participates in the cafeteria plan:______
Answer:
Without cafeteria plan Karen taxable income is 2250 dollars and with cafeteria plan the taxable income is $2135.
Without cafeteria plan Katie taxable income is 2075 dollars and with cafeteria plan the taxable income is $1960.
Explanation:
A married women Karen earns = $2250
Katie single women earn = $2075
Employee contribution to health care = $115
If the Karen decline to participate in the cafeteria then her taxable income is $2250 (wages).
If the Karen accept to participate in the cafeteria then her taxable income is $2250 - $115 (contribution) = $2135
If Katie declined to participate in the cafeteria then her taxable income is $2075 (wages).
If Katie accept to participate in the cafeteria then her taxable income is $2075 - $115 (contribution) = $1960
Many times, clients will shift new people into the project who have no experience with it as they move their key people to new challenges. This issue is: An emotional one for the project team. An emotional one for the clients. One that is external and intellectual. One that is internal and intellectual.
Answer:
Many times, clients will shift new people into the project who have no experience with it as they move their key people to new challenges. This issue is: One that is external and intellectual.
Explanation:
External issues do not affect an entity obviously. The clients shifting new people into projects and moving their key people to new challenges know why they must be doing so. It may be to encourage organizational learning. It may be because the key people have been promoted and need to move to higher positions.
Most importantly, it is the clients as entities that we should be concerned and deal with. Clients like other organizational entities have systems, processes, and policies that they work with to produce results. Their internal management should remain internal and not be externalized by overtly and overzealous outsiders.
A building with a book value of $54,000 is sold for $63,000 cash. Using the indirect method, this transaction should be shown on the statement of cash flows as an increase of a.$63,000 from investing activities and a deduction from net income of $9,000 b.$9,000 from investing activities c.$54,000 from investing activities d.$54,000 from investing activities and an addition to net income of $9,000
Answer:
Increase of $63,000 from investing activities
and a deduction from net income of $9,000
Explanation:
The sales and purchase of assets fall under the investing activities. However the profit or loss realized from such transaction would have increased or decreased the net income as the case may be . Therefore this item of profit or loss which do not represent cash flow would be adjusted on the net income accordingly.
Profit on sale of building = 63,000 - 54,000 = $9,000
The transaction would be shown on the statement of cash flow as follows:
Net income
Less profit on sales of asset (9,000)
Investing activities:
add cash from Sale of asset 63,000
The entries are summarized below:
Increase of $63,000 from investing activities
and a deduction from net income of $9,000
A year ago, the IT team earned corporate-wide recognition for its performance. More recently, it has begun to experience some declines in its performance. They have missed the last three project deadlines and have experienced budget overruns. The team leader has encouraged the team members to reflect on and adjust their purpose. To turn around the
Answer: Reflexivity
Explanation:
Here is the complete question:
A year ago, the IT team earned corporate-wide recognition for its performance. More recently, it has begun to experience some declines in its performance. They have missed the last three project deadlines and have experienced budget overruns. The team leader has encouraged the team members to reflect on and adjust their purpose. To turn around the team's performance, the team lead is encouraging the team to show __________.
a. creativity
b. adherence to norms
c. OCBs
d. reflexivity
e. cohesion
Reflexivity simply means when individuals examine their own judgements, beliefs, and practices during a project or a research process and how their judgements, practices or beliefs may have influenced or impacted the research.
From the question, we are told that a year ago, the IT team earned corporate-wide recognition for its performance but recently, it has begun to experience some declines in its performance which has led to them missing the last three project deadlines and having experienced budget overruns.
To turn around the team's performance, the team lead is encouraging the team to show reflexivity. He wants them to look at what they've been doing earlier and what they're doing presently and make necessary adjustments regarding their judgements for the goals of the organization to be achieved.
XminusIndustries manufactures 3minusD printers. For each unit, $ 2 comma 800 of direct material is used and there is $ 1 comma 900 of direct manufacturing labor at $ 20 per hour. Manufacturing overhead is applied at $ 25 per direct manufacturing labor hour. Calculate the profit earned on 52 units if each unit sells for $ 9 comma 200.
Answer:
the profit earned on 52 units is $110,500
Explanation:
Profit = Sales - Cost of Sales
First determine the cost of sales
Hint : Prepare a manufacturing cost schedule
Direct Materials ($ 2,800 × 52 units) = $145,600
Direct Labor ($ 1,900 × 52 units) = $98,800
Manufacturing Overheads ($25 × 95 hours × 52 units) = $123,500
Total Cost =$367,900
Then determine the Profit
Sales ($9,200 × 52 units) = $478,400
Less Cost of manufacture = ($367,900)
Net Income / (Loss) = $110,500
Conclusion :
Calculate the profit earned on 52 units is $110,500
The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price $1,080,000, and it would cost another $22,500 to install it. The machine falls into MACRS 3-year class, and it would be sold after 3 years for $605,000. The MACRS rates for 3 years are 0.333, 0.4445, 0.1481. The machine wold require an increase in the net working capital (inventory) of $15,500. The sprayer would no change revenues, but is expected to save the firm $380,000 per year in before-tax operating costs, mainly labor. Campbell's marginal tax rate is 35%.a. What is the Year 0 net cash flow?b. What are the net operating cash flows in Years 1, 2, 3?c. What is the additional Year 3-cash flow (i.e. after tax salvage and the return of working capital)?
d. If the project's cost of capital is 12%, should the machine be purchased?
Answer:
a. What is the Year 0 net cash flow?
= $1,102,500 + $15,500 = $1,118,000b. What are the net operating cash flows in Years 1, 2, 3?
NCF Year 1 = $375,496.38NCF Year 2 = $418,521.44NCF Year 3 = $304,148.09c. What is the additional Year 3-cash flow (i.e. after tax salvage and the return of working capital)?
$355,433.10d. If the project's cost of capital is 12%, should the machine be purchased?
NPV = $20,384.22 since it is positive, then the project should be carried out and the machine should be purchased.Explanation:
book value of the robotic sprayer = $1,080,000 + $22,500 = $1,102,500
useful life 3 years, salvage value $605,000
MACRS 3-year class:
0.333 x $1,102,500 = $367,132.50
0.4445 x $1,102,500 = $490,061.25
0.1481 x $1,102,500 = $163,280.25
requires an additional $15,500 investment in inventory
saves $380,000 per year
marginal tax rate 35%
net cash flow year 1 = [net savings x (1 - tax rate)] + (depreciation expense x tax rate) = ($380,000 x 65%) + ($367,132.50 x 35%) = $247,000 + $128,496.38 = $375,496.38
net cash flow year 2 = [net savings x (1 - tax rate)] + (depreciation expense x tax rate) = ($380,000 x 65%) + ($490,061.25 x 35%) = $247,000 + $171,521.44 = $418,521.44
net cash flow year 3 = [net savings x (1 - tax rate)] + (depreciation expense x tax rate) = ($380,000 x 65%) + ($163,280.25 x 35%) = $247,000 + $57,148.09 = $304,148.09
terminal cash flow = [sales price - (purchase cost - accumulated depreciation)] x (1 - tax rate) + recovered net working capital = [$605,000 - ($1,102,500 - $1,020,474)] x 0.65 + $15,500 = $355,433.10
using an excel spreadsheet I calculated the NPV:
Year 0 -$1,118,000
Year 1 $375,496.38
Year 2 $418,521.44
Year 3 $304,148.09 + $355,433.10 = $659,581.19
discount rate 12%
NPV = $20,384.22
Rafael has decided to retire once he has $1,000,000 in his retirement account. At the end of each year, he will contribute $7,000 to the account, which is expected to provide an annual return of 6.2%. How many years will it take until he can retire
Answer:
38 years
Explanation:
in order to determine the amount of years that it will take Rafael to retire, we can use the future value annuity formula:
future value = payment x annuity factor
we know:
future value = $1,000,000payment = $7,000annuity factor = $1,000,000 / $7,000 = 142.8571
the formula to calculate an annuity factor = [(1 + r)ⁿ - 1] / r
142.8571 = [(1 + 0.062)ⁿ - 1] / 0.062
8.8571 = (1.062)ⁿ - 1
9.8571 = (1.062)ⁿ
using a scientific calculator, we can determine the value of n = 38.0389491 years ≈ 38 years
Your uncle is about to retire, and he wants to buy an annuity that will provide him with $75,000 of income a year for 20 years, with the first payment coming immediately. The going rate on such annuities is 5.25%. How much would it cost him to buy the annuity today
Answer:
The annuity will cost him $963,212.95.-
Explanation:
Giving the following information:
Cash flow= $75,000
Interest rate= 0.0525
n= 20
First, we need to calculate the final value. We will use the following formula:
FV= {A*[(1+i)^n-1]}/i + {[A*(1+i)^n]-A}
A= annual cash flow
FV= {75,000*[(1.0525^20) - 1]/0.0525} + {[75,000*(1.0525^20)] - 75,000}
FV= 2,546,491.88 + 133,690.82= $2,680,182.70
Now, the present value:
PV= FV/(1+i)^n
PV= 2,680,182.70/(1.0525^20)
PV= $963,212.95
Titanic Roofing Company has estimated the following amounts for its next fiscal year: Total fixed costs $ 833 comma 000 Sale price per unit 60 Variable cost per unit 30 If the company spends an additional $ 30 comma 000 on advertising, sales volume would increase by 2 comma 500 units. Before the change, the company's sales level exceeds the breakeven point. What effect will this decision have on the operating income of Titanic? A. Operating income will decrease by $ 45 comma 000. B. Operating income will increase by $ 45 comma 000. C. Operating income will increase by $ 75 comma 000. D. Operating income will increase by $ 150 comma 000.
Answer: B. Operating income will increase by $ 45,000
Explanation:
Total fixed cost = $833,000
Sale price per unit = 60
Variable cost per unit = 30
Advertising = $30,000
Increase in sales volume = 2500
The contribution margin is the difference between the sales price per unit and the variable cost per unit.
= 60 - 30
= 30
Therefore, Hence the increase in the contribution margin will be:
= ($30 × 2500)=$75000
We then subtract the additional cost of $30,000 from $75,000. This will be:
= $75,000 - $30,000
= $45,000
Therefore, operating income will increase by $45,000
Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows:
Standard Quantity or Hours Standard Price or Rate Standard Cost
Direct materials 2.10 ounces $15.00 per ounce $31.50
Direct labor 0.80 hours $15.00 per hour 12.00
Variable manufacturing overhead 0.80 hours $3.50 per hour 2.80
Total standard cost per unit $46.30
During November, the following activity was recorded, relative to production of Fludex:
a. Materials purchased, 9,420 ounces at a cost of $49,926.
b. There was no beginning inventory of materials; however, at the end of the month, 1,600 ounces of material remained in ending inventory.
c. The company employs 40 lab technicians to work on the production of Fludex. During November, they worked an average of 61.50 hours at an average rate of $12.30 per hour.
d. Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours. Variable manufacturing overhead costs during November totaled $5,658.
e. During November, 4,600 good units of Fludex were produced.
The company's management is anxious to determine the efficiency of the Fludex production activities.
Required:
1. For direct materials used in the production of Fludex, compute the price and usage variances.
2. For direct labor employed in the production of Fludex, compute the price and usage variances.
Answer:
1)
direct materials price variance = actual quantity x (actual price - standard price)
direct materials price variance = 7,820 x ($5.30 - $15) = 7,820 x (-$9.70) = -$75,854 favorable
direct materials usage variance = standard price x (actual usage - standard usage)
direct materials usage variance = $15 x (7,820 - 9,660) = -$27,600 favorable
2)
direct labor price variance = actual hours x (actual rate - standard rate)
direct labor price variance = 2,460 x ($12.30 - $15) = 2,460 x (-$2.70) = -$6,642 favorable
direct labor usage (efficiency) variance = standard rate x (actual hours - standard hours)
direct labor usage (efficiency) variance = $15 x (2,460 - 3,680) = $15 x (-1,220) = -$18,300 favorable
Zaid's Tent Company has total fixed costs of $300,000 per year. The firm's average variable cost is $65 for 10,000 tents. At that level of output, the firm's average total costs equal Group of answer choices $65 $75 $85 $95
Answer:
$95
Explanation:
average variable cost per unit = $65
average fixed cost per unit = $300,000 / 10,000 = $30
average total cost per unit = $95
Fixed costs do not vary if the production output changes, while variable costs move in the same direction as the production output, e.g. if output increases, variable costs increase as well.
O.K. Company uses a job order cost accounting system and allocates its overhead on the basis of direct labor costs. O.K. expects to incur $2,000,000 of overhead during the next period and expects to use 50,000 labor hours at a cost of $10.00 per hour. What is O.K. Company's overhead application rate
Answer:
Predetermined manufacturing overhead rate= $0.4 per direct labor dollar
Explanation:
Giving the following information:
O.K. expects to incur $2,000,000 of overhead during the next period and expects to use 50,000 labor hours for $10.00 per hour.
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= 2,000,000/ (50,000*10)
Predetermined manufacturing overhead rate= $0.4 per direct labor dollar
Consider the demand for Russian rublesRussian rubles in exchange for British poundsBritish pounds. Which of the following will not increase the foreign currency demand for the rubleruble? A. Currency traders who believe that the value of the rubleruble in the future will be less than its value today. B. Foreign firms and consumers who want to buy goods and services from RussiaRussia. C. Currency traders who believe that the value of the rubleruble in the future will be greater than its value today.
Answer: A. Currency traders who believe that the value of the ruble in the future will be less than its value today.
Explanation:
In the foreign exchange market, currencies are traded at different prices. From the options given in the question, the correct option is option A (Currency traders who believe that the value of the rubleruble in the future will be less than its value today).
When the currency traders believe that the value of the rubel is going to depreciate in the future, they will start selling the rubels and this will lead to a decrease in the demand for it because it will depreciate. Here, the supply will increase but the demand will reduce.
DS Unlimited has the following transactions during August. August 6 Purchases 78 handheld game devices on account from GameGirl, Inc., for exist240 each, terms 1/10, n/60. August 7 Pays exist440 to Sure Shipping for freight charges associated with the August 6 purchase. August 10 Returns to GameGirl eight game devices that were defective. August 14 Pays the full amount due to GameGirl. August 23 Sells 58 game devices purchased on August 6 for exist260 each to customers on account. The total cost of the 58 game devices sold is exist14, 145.37. Required: Record the transactions of DS Unlimited, assuming the company uses a perpetual inventory system. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to 2 decimal places.)
Answer:
August 6
DR Inventory $18,720
CR Accounts Payable $18,720
(To record purchase of goods for sale)
= 76 devices * $240
= $18,720
August 7
DR Inventory $440
CR Cash $440
(To record shipping costs of Inventory)
August 10
DR Accounts Payable $1,920
CR Inventory $1,920
(To record Purchase returns)
August 14
DR Accounts Payable $16,800
CR Inventory $168
CR Cash $16,632
(To record payment of purchases)
Working
Accounts Payable = Purchases - Returns
= 18,720 - 1,920
= $16,800
Inventory
Goods were purchased terms 1/10 meaning a 1% discount is goods paid for in 10 days.
= 1% * 16,800
= $168
August 23
DR Accounts Receivable $15,080
CR Sales Revenue $15,080
(To record sales of goods on account)
Sales Revenue = 58 devices * 260
= $15,080
August 23
DR Cost of Goods Sold $14,145.37
CR Inventory $14,145.37
(To record cost of Goods sold)
A team is working on a cutting-edge technology, and does not have a lot of familiarity with the technical environment. As a result, it is struggling to estimate a complex story because the approach itself is not clear. How should the team proceed
Answer:
The answer is "Writing a SPIKE (a non-technical nonstory) as well as the period box until you accept your system planning article".
Explanation:
The working of the team is on state-of-the-art technology and its understanding of the relevant setting, and its main purpose of removing technological complexity is to conduct experiments-this is what a SPIKE tale is about. Whenever a story could not be predicted as the manager wants an experiment, it's indeed best to read a piece before continuing to work on the storyline.
The Boxwood Company sells blankets for $ 37.00 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1. Date Product Z Units Cost May 01 Purchase 7 $15.00 May 10 Sale 5 May 17 Purchase 10 $16.00 May 20 Sale 8 May 23 Sale 3 May 30 Purchase 12 $24.00 Assuming that the company uses the perpetual inventory system, determine the cost of goods sold for the sale of May 20 using the FIFO inventory cost method.
Answer:
$128
Explanation:
The FIFO inventory system means first in , first out. It means that it is the first purchased inventory that is the first to be sold.
Under the perpetual system, the cost of goods sold Under the FIFO system would be taken from the most recent inventory purchase prior to the sale.
The most recent inventory purchase prior to the sale occurred on the 17th. The price at which the inventory was purchased on the 17th would be used to calculate the cost of goods sold
So the cost of goods sold = $16.00 × 8 = $128
I hope my answer helps you
In 2007, Joe Gebbia and Brian Chesky realized they could not afford the rent on their pricey San Francisco apartment, so they decided to put an air mattress in their living room and offer people an alternative to an expensive hotel room. This is the story of how Airbnb got started. In other words, Airbnb began when Gebbia and Chesky ________; the company grew because it ________.
Answer: c. Identified a problem or frustration; identified an opportunity or need
Explanation:
Airbnb began when the founders Joe Gebbia and Brian Chesky realized that they could not afford the rent on their San Francisco apartment. This was a problem for them and they needed to solve it. Another problem they realized was that people were having to pay for expensive hotel rooms. The common denominator here being that both places were pricey.
They then identified the opportunity or need that people needed to afford their rent and visitors needed to afford places to stay temporarily and then acted on this opportunity by putting an air mattress in their living room and offering people an alternative to an expensive hotel room.
Beginning and ending work in process inventories are negligible, so they are omitted from the cost of production report. The flavor changeover cost represents the cost of cleaning the bottling machines between production runs of different flavors. Determine the cost per case for each of the four flavors. Round your answers to two decimal places.
Answer and Explanation:
The cost per case for each of the four flavors are shown below:
Particulars Orange Cola Lemon Lime Root Beer
Total Cost Transferred
to finished goods (a) $19,125 $391,800 $324,000 $36,000
No. of Cases (b) 2,500 60,000 50,000 4,000
Cost Per Case
(a ÷ b) $7.65 $6.53 $6.48 $9
By dividing the total cost from the number of cases we can get the cost per case for each of the four flavors
Given the following information, formulate an inventory management system. The item is demanded 50 weeks a year.
Item cost $ 10.00 Standard deviation of weekly demand 25 per week
Order cost $ 250.00 Lead time 1 week
Annual holding cost (%)33 % of item cost Service probability 95 %
Annual demand 25,750
Average demand 515 per week
a. Determine the order quantity and reorder point. (Round your answers to the nearest whole number.)
Optimal order quantity units
Reorder point units
b. Determine the annual holding and order costs. (Round your answers to 2 decimal places.)
Holding cost $
Ordering cost $
c. If a price break of $50 per order was offered for purchase quantities of over 2,000, what would be the annual savings? (Round your answer to 2 decimal places.)
Answer: The answer is below...
Explanation: Answer a. Order Quantity = √2RO/C = √2 * 25750 * 250 / .33 * 10 = √1975.23 From the standard normal distribution, z = 1.64 = (515 * 1) + (1.64 * 25) = 556 Reorder point = Lead time * daily usage = 7 * 25 = 150 per week Answer b. Holding cost = Q/2 (H) = 1975/2 (.33)10 = $3,258.75 Ordering cost...
For each of the following separate transactions: Sold a building costing $38,500, with $23,400 of accumulated depreciation, for $11,400 cash, resulting in a $3,700 loss. Acquired machinery worth $13,400 by issuing $13,400 in notes payable. Issued 1,340 shares of common stock at par for $2 per share. Note payables with a carrying value of $41,700 were retired for $50,400 cash, resulting in a $8,700 loss. (a) Prepare the reconstructed journal entry. (b) Identify the effect it has, if any, on the investing section or financing section of the statement of cash flows.
Answer:
Both requirements are solved below
Explanation:
REQUIREMENT A:
Sale of a building Debit Credit
Cash $11,400
Acc Depreciation $23,400
Loss on disposal $3700
Building $38,500
Acquisition of Machinery Debit Credit
Machinery $13,400
Notes $13,400
Issuance of share Debit Credit
Cash(1340x2) $2,680
Share Capital $2,680
Retired Debt Debit Credit
Note payable $41,700
Loss on retirement $8,700
Cash $50,400
REQUIREMENT B:
Cash flow from investing activities
Gain on disposal of building $11,400
Net cash flow from investing activities $11,400
Cash flow from financing activities
Cash received from issuing shares $2,680
Cash paid for retirement of debt ($50,400)
Net cash flow from investing activities ($47,720)
Sunland Company applies overhead on the basis of 200% of direct labor cost. Job No. 501 is charged with $320000 of direct materials costs and $410000 of manufacturing overhead. The total manufacturing costs for Job No. 501 is $1140000. $1050000. $935000. $730000.
Answer:
$935,000
Explanation:
Calculation for Sunland company total manufacturing costs for Job No. 501
Using this formula
Total Manufacturing cost =(Manufacturing Overhead/Percentage of Overhead basis)+Direct material +Manufacturing overhead
Let plug in the formala
Total Manufacturing Overhead=($410,000/2)= $205,000 + $320,000 + $410,000
Total Manufacturing overhead =$935,000
Therefore Sunland company total manufacturing costs for Job No. 501 will be $935,000
Charles Schwab Corporation is one of the more innovative brokerage and financial service companies in the United States. The company recently provided information about its major business segments as follows (in millions): Investor Advisor Services ServicesRevenues $4,771 $4,597 Income from operations 1,681 1,660 Depreciation 171 154Estimate the contribution margin for each segment, assuming that depreciation represents the majority of fixed costs. Investor Services Advisor Services (in millions) (in millions) Estimated contribution margin $1,681 $1,660 If Schwab decided to sell its Advisor Services business to another company, estimate how much operating income would decline under the following assumptions. Assume the fixed costs that serve the Advisor Services business would not be sold but would be used by the other sector: $1,660 million.Assume the fixed assets were "sold": $ 1,506 million
Answer and Explanation:
a. The estimation of the contribution margin for each segment is shown below:
(in millions)
Particulars Investor Advisor Services Services
Income from
operations $1,681 $1,660
Add:
Depreciation $171 $154
Contribution
Margin $1,852 $1,814
2. Now the estimation of decline in operating income is
(in millions)
Particulars Combined services Institutional Services
Revenues $9,368 $4,771
Less:
Variable cost $5,702 $2,919
($2,919 + $2,783)
Contribution
margin $3,666 $1,852
Less:
Fixed cost -$325 -$171
Net income $3,341 $1,681
So according to the above calculations, the net operating income is declined by
= $3,341 - $1,681
= $1,660 million
The variable cost is come from
= Service revenues - income from operations - depreciation expense
Fill in the missing numbers for the following income statement. (Do not round intermediate calculations.)
Sales $668,600
Cost 431,300
Depreciation 103,700
EBIT
Taxes (24%)
Net Income
a. Calculate the OCF. (Do not round intermediate calculations.)
b. What is the depreciation tax shield?
Answer:
a. $205,236
b. $24,888
Explanation:
a. The computation of OCF is shown below:-
EBIT = Sales - Cost - Depreciation
= $668,600 - $431,300 - $103,700
= $133,600
Net income = EBIT - Taxes
= $133,600 - ($133,600 × 24%)
= $133,600 - $32,064
= $101,536
Operating cash flow = EBIT - Taxes + Depreciation
= $133,600 - $32,064 + $103,700
= $205,236
b. The computation of depreciation tax shield is shown below:-
Depreciation tax shield = Depreciation × Tax
= $103,700 × 24%
= $24,888