Answer:
Operating cash flows
Explanation:
Net present value is the present value of after tax cash flows from an investment less the amount invested.
NPV is a capital budgeting method used to determine profitable investments
The corporate office of Novartis, formerly Ciba-Geigy, acts to improve many key activities, including resource allocation and reward and evaluation systems. This is an example of creating value by using
Options:
A. related diversification to achieve value by leveraging pooled negotiating power to attain economies of scope.
B. related diversification to acquire market power by leveraging pooled negotiating power.
C. unrelated diversification to acquire financial synergies through portfolio management.
D. related diversification to acquire parenting, restructuring, and financial synergies through corporate restructuring and parenting.
Answer:
C. unrelated diversification to acquire financial synergies through portfolio management.
Explanation:
Such a strategy employed by Novartis is meant to create value for the organization in particular and other stakeholders through unrelated diversification from company objectives.
By so doing Novartis creates and acquires financial synergies through it's portfolio management.
Which of the following is an advantage of a partnership?
A.ease of starting and ending the business
B. Shared management and pooled skills
C. Unlimited liability
D. Little time commitment
Answer:
B
Explanation:
as if u share a business then the time and management is also shared
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When __________________, a firm will supply a higher quantity at any given price for its output, and the supply curve will shift to the right.
Answer: costs of production fall
Explanation:
When the costs of production fall, a firm will supply a higher quantity at any given price for its output, and the supply curve will shift to the right.
This is because when there is a reduction in the costs of production, there will be more money and hence, the producer can supply more goods thereby shifting the supply curve to the right.
Jackpot Mining Company operates a copper mine in central Montana. The company paid $1,150,000 in 2021 for the mining site and spent an additional $630,000 to prepare the mine for extraction of the copper. After the copper is extracted in approximately four years, the company is required to restore the land to its original condition, including repaving of roads and replacing a greenbelt. The company has provided the following three cash flow possibilities for the restoration costs: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
Cash flow Probability
1 $330,000 25%
2 430,000 40%
3 630,000 35%
To aid extraction, Jackpot purchased some new equipment on July 1, 2021, for $150,000. After the copper is removed from this mine, the equipment will be sold. The credit-adjusted, risk-free rate of interest is 10%.
Required:
a. Determine the cost of the copper mine.
b. Prepare the journal entries to record the acquisition costs.
Answer:
a. Determine the cost of the copper mine.
$2,104,430b. Prepare the journal entries to record the acquisition costs.
Date X, 2021, acquisition of copper mine
Dr Copper mine 2,104,430
Cr Cash 1,780,000
Cr Asset retirement liability 324,430
July 1, 2021, acquisition of mining equipment
Dr Equipment 150,000
Cr Cash 150,000
Explanation:
estimated restoration costs = ($330,000 x .25) + ($430,000 x .4) + ($630,000 x .35) = $475,000
now we must adjust the restoration cost and determine its present value = $475,000 x 0.68301 (present value factor, 10%, 4 periods) = $324,430
total cost of copper mine = purchase cost + preparation costs + restoration costs = $1,150,000 + $630,000 + $324,430 = $2,104,430
Charlie's adjusted basis in S corporation stock was $12,000. His share of S corporation losses was $22,000. How much of the loss clears the basis limitation and what is the treatment of the remaining loss (if any)
Answer:
1. $12,000 is the amount of the loss that will clear the basis limitation
2.Remaining loss of the amount of $10,000 will be put on hold
Explanation:
Calculation of How much of the loss clears the basis limitation and what is the treatment of the remaining loss
Based on the information given his adjusted basis in S corporation stock was the amount of $12,000 which means that the amount of $12,000 will be the amount of the loss that will clear the basis limitation
Secondly since his share of S corporation losses was the amount of $22,000 which means that the remaining loss will be $10,000($22,000-$12,000).
Based on this the remaining loss of the amount of $10,000 will be put on hold and can be carried forward at unspecified period of time while the amount of $12,000 may be deducted in the current year.
Emmitt had the following final balances after the first year of operations: assets, $55,000; stockholders' equity, $25,000; dividends, $3,000; and net income, $10,000. What is the amount of Emmitt's liabilities
Answer:
$30,000
Explanation:
Calculation for Emmitt amount of liabilities
Using this formula
Liabilities =Assets -Stockholders's equity
Let plug in the formula
Liabilities =$55,000-$30,000
Liabilities =$30,000
Therefore the amount of Emmitt liabilities will be $30,000
Assume that you are on the financial staff of Vanderheiden Inc., and you have collected the following data: The yield on the company's outstanding bonds is 7.75%; its tax rate is 40%; the next expected dividend is $0.65 a share; the dividend is expected to grow at a constant rate of 6.00% a year; the price of the stock is $15.00 per share; the flotation cost for selling new shares is F
Answer: 7.48%
Explanation:
Weighted Average Cost of capital is simply the weighted average of the costs of equity and debt.
Cost of Equity
= [tex]\frac{Next dividend}{Stock Price ( 1 - flotation Costs)} + growth rate[/tex]
= [tex]\frac{0.65}{19(1 -0.1)} + 0.06[/tex]
= 9.80%
Cost of debt
= Interest ( 1 - Tax)
= 0.075 (1 - 0.40)
= 4.65%
WACC = 9.80% * 0.55 + 4.65% * 0.45
= 7.48%
2. The current price of a stock is $50. In 1 year, the price will be either $65 or $35. The annual risk-free rate is 10%. Find the price of a call option on the stock that has an exercise price of $55 and that expires in 1 year. (Hint: Use daily compounding.)
A perfectly competitive firm sells 15 units of output at the going market price of $10. Suppose its average fixed cost is $15 and its average variable cost is $8. Its contribution margin (i.e., contribution to fixed cost) is
Answer:
$30
Explanation:
The computation of the contribution margin is shown below:
Contribution margin = Sales - Variable cost
where,
Sales = Units sold × Market price
= 15 units × $10
= $150
And,
Variable cost = Units sold × AVC
= 15 units × $8
= $120
Now placing these values to the above formula
= $150 - $120
= $30
We simply applied the above formula
A $200,000 loan amortized over 12 years at an interest rate of 10% per year requires payments of $21,215.85 to completely remove the loan when interest is charged on the unrecovered balance of the principal. If interest is charged on the original principal instead of the unrecovered balance, what is the loan balance after 12 years provided the same $21,215.85 payments are made each year?
Answer:
loan balance after 12 years = $185409.8
Explanation:
Loan principal = $200000
interest = 10% of principal
amount paid yearly = $21215.85
For 1st year
principal for the first year = $200000
required interest to be paid = 10% of 200000 = $20000
amount paid = $21215.85
Loan Balance after first year = (principal for first year) - (amount paid - 10% of principal ) = $198,784.15
For 2nd year
principal for the 2nd year = Loan balance after first year = $198,784.15
loan balance after 2nd year = 198784.15 - ( 21215.85 - 10% of 198784.15)
= $197568.30
same applies for the different years until the 12th year
using this formula :
Loan Balance after Nth year = [ Loan balance after (n-1) year - ( amount paid - 10% of loan balance after (n-1) year ) ]
A "tariff" on imported products is an example of a trade barrier that is always preferred to the free trade, because it generates government revenues in addition to restricting the amounts of imports.
A. True
B. False
Answer:
The answer is true
Explanation:
One of the most common trade barriers is a tariff. Tariff is a tax imposed by the government on imported goods and services. Imposing tariffs on imported goods and services raise their prices.
Imposing tariff on imported goods can either be done to raise government revenue or to protect indigenous companies.
On September 1, the company acquired five acres of land with a building that will be used as a warehouse. Tristar paid $120,000 in cash for the property. According to appraisals, the land had a fair value of $85,400 and the building had a fair value of $54,600. On September 1, Tristar signed a $42,000 noninterest-bearing note to purchase equipment. The $42,000 payment is due on September 1, 2022. Assume that 9% is a reasonable interest rate. On September 15, a truck was donated to the corporation. Similar trucks were selling for $2,700. On September 18, the company paid its lawyer $4,000 for organizing the corporation. On October 10, Tristar purchased maintenance equipment for cash. The purchase price was $17,000 and $600 in freight charges also were paid. On December 2, Tristar acquired various items of office equipment. The company was short of cash and could not pay the $5,700 normal cash price. The supplier agreed to accept 200 shares of the company's no-par common stock in exchange for the equipment. The fair value of the stock is not readily determinable. On December 10, the company acquired a tract of land at a cost of $22,000. It paid $3,000 down and signed a 11% note with both principal and interest due in one year. Eleven percent is an appropriate rate of interest for this note.
Required:
Prepare journal entries to record each of the above transactions.
Answer and Explanation:
The Journal entries is shown below:-
1. Land Dr, $73,200 (($85,400 ÷ (85,400 + 54,600)) × $120,000)
Building Dr, $46,800 ($54,600 ÷ (85,400 + 54,600)) × $120,000
To Cash $120,000
(Being cash paid is recorded)
2. Equipment Dr, $38,532.06 ($42,000 × 0.91743)
Discount on Note Payable Dr, $3,4687.94 ($3,780 × 0.91743)
To Note Payable $42,000
(Being equipment is recorded)
3. Truck Dr, $2,700
To Sales revenue $2,700
(Being truck is recorded)
4. Organisation cost Exp enses Dr, $4,000
To Cash $4,000
(Being cash paid is recorded)
5. Maintenance Equipment Dr, $17,600
To Cash $17,600
(Being cash paid is recorded)
6. Office Equipment Dr, $5,700
To Common Stock $5,700
(Being office equipment is recorded)
7. Land Dr, $22,000
To Cash $3,000
To Note Payable $19,000
(Being cash paid is recorded)
Merone Company allocates materials handling cost to the company's two products using the below data: Modular Homes Prefab Barns Total expected units produced 5,000 8,000 Total expected material moves 500 100 Expected direct labor-hours per unit 700 200 The total materials handling cost for the year is expected to be $218,790. If the materials handling cost is allocated on the basis of material moves, the total materials handling cost allocated to the modular homes is closest to: (Round your intermediate calculations to 2 decimal places.)
Answer:
Modular homes= $182,325
Explanation:
Giving the following information:
Modular Homes - Prefab Barns
Total expected material moves 500 100
The total materials handling cost for the year is expected to be $218,790.
To calculate the allocated costs to each product line, first, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 218,790/600
Predetermined manufacturing overhead rate= $364.65 per move
Now, we can allocate overhead:
Modular homes= 364.65*500= $182,325
Prefab Barnes= 364.65*100= $36,465
The following table shows macroeconomic data for an imaginary economy. All figures are in billions of dollars. For each account, identify which approach uses it to derive GDP by selecting either Expenditure or Resoruce Cost-Income in the Approach column.
Billions of Dollars Approach
Fixed Investment $2,183 Resource cost-income
Interest income $539 Resource cost-income
Government Consumption and Gross Investment $2,568 Expenditure
Services $5,504 Expenditure
Depreciation $1,587 Resource cost-income
Durable goods $1,090 Expenditure
Proprietor’s income $1,045 Resource cost-income
Employee compensation $7,528 Resource cost-income
Rents $107 Resource cost-income
Corporate profits $1,646 Resource cost-income
Inventories $70 Expenditure
Net income of foreigners –$110 Resource cost-income
Nondurable goods $2,735 Expenditure
Imports $1,030 Expenditure
Indirect business taxes $1,035 Resource cost-income
Exports $257 Expenditure
Required:
Use the table to calculate personal consumption, gross private investment, and net exports and complete the following table.
Make sure to specify the sign for the Net Exports values.
Billions of Dollars
Personal Consumption
Gross Private Investment
Net Exports
The economy's GDP is
Based on the macroeconomic data given, and established economic principles, the following are true:
Personal consumption = $9,329.Gross Private Investment = $2,253.Net Exports = -$773.GDP = $13,377.What is the personal consumption?= Durable goods + Non-durable goods + Services
= 1,090 + 2,735 + 5,504
= $9,329
What is gross private investment?= Fixed investment + inventories
= 2,183 + 70
= $2,253
What are the next exports?= Exports - imports
= 257 - 1,030
= -$773
What is the GDP?= Personal consumption + Government consumption and Gross Investment + Gross private investment + Net exports
= 9,329 + 2,568 + 2,253 - 773
= $13,377
Note - All the classifications given above for the approach used to calculate GDP are correct except for the Fixed investment account which is used in the Expenditure approach.
Find out more on the expenditure approach at https://brainly.com/question/1384502.
While vacationing in Florida in November, Sally was seriously injured in an automobile accident. Sally died several days later. Complete each of the following statements which outline the Federal estate tax rules to each of these items.
A. Bruce, Sally's son and executor, incurred $6,200 in travel expenses in flying to Florida, retrieving the body, and returning it to Frankfort, Kentucky for burial.
B. Sally had pledged $50,000 to the building fund of her church. Bruce paid this pledge from the assets of the estate.
C. Prior to her death, Sally had promised to give her nephew, Gary, $20,000 when he passed the bar exam. Gary passed the exam late in the year, and Bruce kept Sally's promise by paying him $20,000 from estate assets.
D. At the scene of the accident and before the ambulance arrived, someone took Sally's jewelry (i.e., Rolex watch and wedding ring) and money. The property (valued at $33,000) was not insured and was never recovered.
E. As a result of the accident, Sally's auto was totally destroyed. The auto had a basis of $52,000 and a fair market value of $28,000. In January of the next year, the insurance company pays Sally's estate $27,000.
The standard deviation of return on investment A is 25%, while the standard deviation of return on investment B is 20%. If the correlation coefficient between the returns on A and B is −0.260, the covariance of returns on A and B is _________. Multiple Choice –0.2080 –0.0130 0.0130 0.2080
Answer: –0.0130
Explanation:
Correlation given the variance and the standard deviation of the two returns can be calculated by;
Correlation coefficient = Covariance of returns on investment A and B / (Standard deviation of return on investment A * Standard deviation of return on investment B).
Rearranging the formula, Covariance becomes;
Covariance of returns on investment A and B = Correlation coefficient * (Standard deviation of return on investment A * Standard deviation of return on investment B)
Covariance of returns on investment A and B = -0.260 * 0.25 * 0.20
Covariance of returns on investment A and B = –0.0130
A physical count of supplies on hand at the end of May for Masters, Inc. indicated $1,250 of supplies on hand. The general ledger balance before any adjustment is $2,100. What is the adjusting entry for office supplies that should be recorded on May 31?
Answer:
Dr Supplies expense $850
Cr Supplies $850
Explanation:
Preparation of the adjusting entry for office supplies that should be recorded on May 31
Based on the information given we were told that the physical count of the supplies on hand for Masters, Inc. Shows the amount of $1,250 while the general ledger balance was the amount of $2,100, this means that the adjusting entry for office supplies on May 31 will be:
Dr Supplies expense $850
Cr Supplies $850
($2,100 -$1,250)
Locus Company has total fixed costs of $117,000. Its product sells for $51 per unit and variable costs amount to $26 per unit. Next year Locus Company wishes to earn a pretax income that equals 50% of fixed costs. How many units must be sold to achieve this target income level
Answer:
Break-even point in units= 7,020 units
Explanation:
Giving the following information:
Fixed costs= $117,000
Selling price= $51
Unitary variable cost= $26
Desired profit= $58,500
To calculate the number of units to be sold, we need to use the following formula:
Break-even point in units= (fixed costs + desired profit)/ contribution margin per unit
Break-even point in units= (117,000 + 58,500) / (51 - 26)
Break-even point in units= 7,020 units
When a negative amount is in the base period and a positive amount is in the analysis period (or vice versa), a meaningful percent change cannot be calculated.
A. True
B. False
Answer:
false
Explanation:
for example, the base year has a value of -10 and the period of analysis as a value of 5, percentage change is -1.5 or 150%
the base year has a value of 5 and the period of analysis as a value of -10 percentage change is -300%
Algoma Co. borrows $250,000 cash on November 1, 2013, by signing a 120-day, 9% note with a face value of $250,000. 2. & 3. What is the amount of interest expense in 2013 and 2014 from this note? (Use 360 days a year. Do not round intermediate calculations.)
Answer:
The amount of interest expense in 2013 and 2014 are $3,750 and $3,625 respectively.
Explanation:
Interest expense would be in
2013;
= Principal × rate of interest × number of days ÷ ( total number of days in a year)
= $250,000 × 9% × (60 ÷ 360)
= $3,750
( 29 days in November + 31 days in December
In 2014,
= Principal × interest rates × number of days ÷ ( number of days in a year)
= $250,000 × 9% × ( 58 ÷ 360)
= $3,625
(30 days in January + 28 days in February)
Raymond Autobody Shop has the following accounts
Accounts Payable Service Revenue
Cash Equipment
Utilities Expense Common Stock
Automotive Supplies Advertising Expense
Dividends Unearned Revenue
Retained Earnings
Create a chart of accounts for Raymond Autobody Shop using the standard numbering system.
Each account is separated by a factor of 10. For example, the fist asset account be 100 and the net asset account will 110. Use the first available under each section, Asset Liabilities, etc, when selecting the accounts.
Answer and Explanation:
The creation of the chart of the account by applying the standard numbering system is presented below:
For the assets it would be started by 100
For the liabilities it would be started by 200
For the owner equity it would be started by 300
For the revenue it would be started by 400
And, for the expenses it would be started by 500
Now the creation is as follows
Balance sheet
Assets Liabilities Stockholder equity
100 Cash 200 Account payable 300 R. capital
110 Automotive supplied 210 unearned revenue 300 R. withdrawal
120 equipment
Income statement
Revenue Expenses
400 service revenue 500 utilities expense
510 advertising expense
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P 9–3: Dürnstein Schnapps
Durnstein Schnapps produces three types of schnapps from locally grown Austrian pears, plums, and cherries. Schnapps is a
clear, colorless beverage distilled from fermented fruit that normally contains about 40 percent alcohol. The pear and plum
schnapps are produced using an identical process whereby the pears, and plums are fermented and then distilled. The cherry
schnapps employs a similar production process but requires more direct labor to produce the unique and highly prized Durnstein
Cherry Schnapps. Each variety of schnapps (pears, plums, and cherries) is produced in batches of 500 liters and then bottled.
Durnstein Schnapps uses an absorption costing system to assign overhead to its three products for inventory costing. A
single, predetermined, plantwide overhead rate is computed using a flexible manufacturing overhead budget. Variable
manufacturing overhead is budgeted to be €16.00 per direct labor hour and fixed manufacturing overhead is budgeted to be €
845,000 for the year. The following table summarizes budgeted and operating data for the last fiscal year.
Pear Plum Cherry
Actual batches
520 370 210
Budgeted number of batches 500 400 200
Actual direct hours per batch 17 15 34
Budgeted direct labor hours per
18 18 35
batch
Durnstein Schnaps incurred actual manufacturing overhead last year of € 1,250,500.
Required:
a. Calculate Durnstein Schnapp's plantwide overhead rate for last year.
b. One batch of plum schnapps used 20 direct labor hours. How much manufacturing overhead was absorbed by this one
batch?
c. How much over/underabsorbed overhead did Dürnstein Schnapps have last year?
Page 429
d. Recommend discuss how Durnstein Schnapps is likely to account for the over/underabsorbed overhead you
calculated in part(c).
Answer:
Dürnstein Schnapps
a. Durnstein Schnapp's Plantwide Overhead Rate for last year:
= Budgeted overhead/total budgeted direct labour hours
= € 1,216,200/23,200
= €52.42
b. Manufacturing overhead absorbed by one batch of plum schnapps using 20 direct labor hours
= Overhead rate * direct labor hours
= €52.42 * 20
= €1,048.40
c. Determination of over/underabsored overhead last year:
= Total budgeted manufacturing overhead minus actual manufacturing overhead
= € 1,216,200 - € 1,250,500
= € 34,500 under absorbed
d. Durnstein Schnapps will adjust the cost of goods sold and the ending inventory in order to account for the underabsored overhead in part (c).
The purpose is to reflect eh true absorption cost of products and ending inventory.
Explanation:
Data and Calculations:
Variable manufacturing overhead (budgeted) = €16.00 per direct labor
Fixed manufacturing overhead (budgeted) = € 845,000 for the year
Budgeted and operating data for the last fiscal year:
Pear Plum Cherry
Actual batches 520 370 210
Budgeted number of batches 500 400 200
Actual direct hours per batch 17 15 34
Budgeted direct labor hours per 18 18 35
batch
Total budgeted direct labor hours
(500*18) (400*18) (200*35) 9,000 7,200 7,000 23,200
Total actual direct labor hours
(520 * 17) (370 * 15) ( 210 * 34) 8,840 5,550 7,140 21,530
Durnstein Schnaps incurred actual manufacturing overhead last year of € 1,250,500.
Budgeted manufacturing last year = Budgeted direct labor hours * Variable manufacturing overhead per direct labour hour + Budgeted fixed manufacturing overhead
= 23,200 x €16.00 + € 845,00
= €371,200 + €845,00
= € 1,216,200
b) Absorption costing is a method that Durnstein Schnapps can use to calculate the costs of its variety of schnapps by including direct and indirect costs. It is not like marginal or variable costing method that uses only the variable elements of production costs in arriving at the costs of Durnstein schnapps. The absorption costing method tries to capture all production costs and absorb them into the costs of the pear, plums, and cherries schnapps in order to determine their appropriate prices. Variable costing method does not treat overhead production costs as product costs, but as period costs.
Jack uses his personal vehicle in his sole proprietorship. He keeps no records of any kind regarding his business use of the car and doesn't really know for certain when and where he used the automobile for business. Jack will not be claiming the EITC this year. Which of the following is correct?
Answer:
To comply with due diligence, every effort should be made to reconstruct Jack's vehicle expenses. If the records cannot be reconstructed then Casey should not claim the EITC this year.
Explanation:
Earned Income Tax credit (EITC) is a refundable tax that is returned to small to medium income earners. It can either reduce your tax of you will get a refund.
Sole proprietors often use their personal vehicles for business purposes. The expense for this is tax deductible. Deduction can be based on true cost of expenses like gasoline bought, or by standard mileage rate.
Vehicle use for personal purposes is not tax deductible.
In this scenario Jack has no records of his vehicle use for business and personal running. There is a need to seperate his use of the vehicle for business purposes.
Every effort should be made to reconstruct Jack's vehicle expenses. If the records cannot be reconstructed then Casey should not claim the EITC this year.
Chinawa, a major processor of cheese sold throughout the United States, employs one hundred workers at its principal processing plant. The plant is located in Heartland Corners, which has a population that is 50 percent white and 25 percent African American, with the balance Hispanic American, Asian American, and others. Chinawa requires a high school diploma as a condition of employment for its cleaning crew. Three-fourths of the white population complete high school, compared with only one-fourth of those in the minority groups. Chinawa has an all-white cleaning crew. Has Chinawa violated Title VII of the Civil Rights Act of 1964?
Answer:
Chinawa has violated Title VII of the Civil Rights Act of 1964
Explanation:
Title VII of the Civil Rights Act of 1964 states that:
It will be unlawful employment practice for an employer -
(1) to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex, or national origin; or
(2) to limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual's race, color, religion, sex, or national origin.
Since one-fourth of those in minority group complete high school, it is expected of him to hire from those group in-order to balance his cleaning crew.
Opunui Corporation has two manufacturing departments--Molding and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Molding Finishing Total Estimated total machine-hours (MHs) 3,250 1,750 5,000 Estimated total fixed manufacturing overhead cost $ 20,000 $ 5,600 $ 25,600 Estimated variable manufacturing overhead cost per MH $ 1.00 $ 2.00 During the most recent month, the company started and completed two jobs--Job A and Job M. There were no beginning inventories. Data concerning those two jobs follow: Job A Job M Direct materials $ 17,000 $ 10,700 Direct labor cost $ 23,800 $ 10,400 Molding machine-hours 1,250 2,000 Finishing machine-hours 1,250 500 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 40% on manufacturing cost to establish selling prices. The calculated selling price for Job A is closest to: (Round "Predetermined overhead rate" to 2 decimal places.)
Answer:
The calculated selling price for Job A is closest to: $80,290
Explanation:
Predetermined Overhead Rate = Budgeted Fixed Overheads / Budgeted Activity
= $ 25,600 / 5,000
= $5.12 per machine hour.
Manufacturing Cost Statement for Job A
Direct materials $17,000
Direct labor cost $23,800
Variable manufacturing overhead :
Molding ($ 1.00 × 1,250) $1,250
Finishing ($ 2.00 × 1,250) $2,500
Fixed Manufacturing Overheads
Molding ($5.12 × 1,250) $6,400
Finishing ($5.12 × 1,250) $6,400
Total Manufacturing Cost $57,350
Calculation of Selling Price
Total Manufacturing Cost $57,350
Add Mark -up ($57,350 × 40%) $22,940
Selling Price $80,290
The inflation rate over the past year was 1.8 percent. If an investment had a real return of 7.2 percent, what was the nominal return on the investment
Answer:
9.13%
Explanation:
The computation of the nominal return on the investment is shown below:
As we know that
Nominal interest rate = {(1 + real interest rate) × (1 + inflation rate)} - 1
= {(1 + 0.072) × (1 + 0.018)} - 1
= (1.072 × 1.018) - 1
= 9.13%
Hence, the nominal interest rate could be find out by applying the above formula i.e by considering the real interest rate and the inflation rate
Wheat Inc. produces and sells a single product. The selling price of the product is $235.00 per unit and its variable cost is $86.95 per unit. The fixed expense is $373,653 per month. The break-even in monthly dollar sales is closest to: (Round your intermediate calculations to 2 decimal places.)
Answer:
Break-even point (dollars)= $593,100
Explanation:
Giving the following information:
The selling price of the product is $235.00 per unit and its variable cost is $86.95 per unit. The fixed expense is $373,653 per month.
To calculate the break-even point in dollars, we need to use the following formula:
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 373,653 / [(235 - 86.95)/235]
Break-even point (dollars)= $593,100
Job 910 was recently completed. The following data have been recorded on its job cost sheet: Direct materials $ 2,429 Direct labor-hours 74 labor-hours Direct labor wage rate $ 17 per labor-hour Machine-hours 135 machine-hours The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $18 per machine-hour. The total cost that would be recorded on the job cost sheet for Job 910 would be:
Answer:
Total Job Cost is $6,117
Explanation:
The total cost of the Job 910 is as under:
Direct Material Cost $2,429
Direct Labor Cost (74 Labor Hrs * $17 per Labor Hour) $1,258
Applied overhead (135 Machine Hrs * $18 per Machine Hr) $2,430
Total Job Cost $6,117
This question explores the calculation of the unemployment rate. You will be provided some imperfect employment data for four different countries and asked to identify the unemployment rate. Task 1: The population of Asartaland is 95. Of these 95 individuals, 75 are in the labor force and 65 are employed. What is the unemployment rate in Asartaland
Answer:
Unemployment rate= 0.13= 13%
Explanation:
Giving the following information:
Of these 95 individuals, 75 are in the labor force and 65 are employed.
To calculate the unemployment rate, we need to use the following formula:
Unemployment rate= unmeployed population / labor force
Unemployment rate= 10/75
Unemployment rate= 0.13
Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,000,000. The project began in 2021 and was completed in 2022. Data relating to the contract are summarized below:
2016:
Cost incurred during the year: $300,000
Estimated costs to complete as of 12/31 1,200,000
Billings during the year 380,000
Cash collections during the year 250,000
2017:
Costs incurred during the year $1,575,000
Estimated costs to complete as of 12/31 -0-
Billings during the year $1,620,000
Cash collections during the year $1,750,000
1. Compute the amount of revenue and gross profit or loss to be recognized in 2016 and 2017 assuming Nortel recognizes revenue over time according to percentage of completion.
2. Compute the amount of revenue and gross profit or loss to be recognized in 2016 and 2017 assuming this project does not qualify for revenue recognition over time.
3. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2016 assuming Nortel recognizes revenue over time according to percentage of completion.
4. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2016 assuming this project does not qualify for revenue recognition over time.
Answer:
Nortel Networks
1. Computation of revenue and gross profit or loss in 2016 and 2017, assuming Nortel recognizes revenue over time according to percentage of completion:
a. Revenue to be recognized in 2016 under percentage of completion:
Cost incurred/Cost incurred + Estimated cost to completion x $2,000,000
= $300,000/$1,875,000 x $2,000,000
= $320,000
b. Gross profit:
Revenue = $320,000
Costs incurred = 300,000
Gross profit $20,000
c.. Revenue to be recognized in 2017 under percentage of completion:
Cost incurred/Cost incurred + Estimated cost to completion x $2,000,000
= $1,575,000/$1,875,000 x $2,000,000
= $1,680,000
d. Gross profit:
Revenue = $1,680,000
Costs incurred = 1,575,000
Gross profit $105,000
2. Computation of revenue and gross profit or loss in 2016 and 2017, assuming project does not qualify for revenue recognition over time:
2016 Revenue = Cost plus Profit margin
= $300,000 x 1.1
= $330,000
2017 Revenue = Total Revenue minus 2016 Revenue
= $2,000,000 - $330,000
= $1,670,000
3. Nortel Networks' Partial Balance Sheet for year ended December 31, 2016, under recognizing revenue over time according to percentage of completion:
Current Assets:
Accounts Receivable $130,000
Cash $250,000
Current Liabilities:
Deferred Revenue $60,000
4. Nortel Networks' Partial Balance Sheet for year ended December 31, 2016, under revenue not qualifying for recognition over time:
Current Assets:
Accounts Receivable $130,000
Cash $250,000
Current Liabilities:
Deferred Revenue $50,000
Explanation:
a) Data and Calculations:
Contract sum = $2,000,000
2016:
Cost incurred during the year: $300,000
Estimated costs to complete as of 12/31 1,200,000
Billings during the year 380,000
Cash collections during the year 250,000
2016 Accounts Receivable:
Billings during the year = $380,000
Cash collections during the year = (250,000)
Balance b/d $130,000
2016 Deferred Revenue:
Revenue during the year = $320,000
Billings under the year = 380,000
Deferred Revenue $60,000
2017:
Costs incurred during the year $1,575,000
Estimated costs to complete as of 12/31 -0-
Billings during the year $1,620,000
Cash collections during the year $1,750,000
2017 Accounts Receivable:
Balance b/d $130,000
Billings during the year 1,620,000
Cash collections during the year (1,750,000)
Balance b/d $0
Point in Time Revenue Recognition:
Revenue = Costs incurred + estimated profit margin
Estimated Profit margin = Profit margin = $2,000,000 - ($300,000 + $1,500,000)
= $200,000
Profit margin ratio = $200,000/$2,000,000 x 1`00 = 10%
2016 Accounts Receivable:
Billings during the year = $380,000
Cash collections during the year = (250,000)
Balance b/d $130,000
2016 Deferred Revenue:
Recognized revenue during the year = $330,000
Billings under the year = 380,000
Deferred Revenue $50,000
2017 Accounts Receivable:
Balance b/d $130,000
Billings during the year 1,620,000
Cash collections during the year (1,750,000)
Balance b/d $0