Answer:
b.The staffing budget is based on a fixed human resources budget
Explanation:
The staffing budget is the budget that outlines a money plan to be spent on the employees and consists of the largest investment to the organization. It acts as an outline plan for the service companies each staff member corresponds to the salary for the employee in the spreadsheet on a weekly, monthly, and yearly basis.Justin Co. recently purchased materials from a new supplier at a very attractive price. The materials were found to be of poor quality, and the company's laborers struggled significantly as they shaped the materials into finished product. In a desperation move to make up for some of the time lost, the manufacturing supervisor brought in more-senior employees from another part of the plant. Which of the following variances would have a high probability of arising from this situation?
a. Both Material Price variance, favorable and Labor rate variance, favorable
b. Material price variance, unfavorable.
c .Labor rate variance, unfavorable.
d. Material quantity variance, favorable.
e. Labor efficiency variance, favorable.
Answer:
C
Explanation:
more labor expense bringing in extras workers. Drives down the profits.
ABC stock is currently trading at an all-time high price of $150 per share. Your client contacts you about the stock, stating that he believes that the stock is ripe for a sell off after its next quarterly news announcement. He has $10,000 to use for a trade, but does not want to lose more than this amount. The BEST recommendation to the client is to:
Answer:
Buy ABC Puts
Explanation:
Based on the information provided within the question it can be said that the best recommendation to the client is to Buy ABC Puts. This is mainly due to the fact that the client specifically stated that he does not want to lose more than this investment. Therefore Puts are the best option since they are purchased as a speculation on a market price decline, and the customer can only lose the premium paid if the market does the opposite and ends up rising. While other options like shorting or selling can lead to unlimited loss potential.
To illustrate the law of large numbers (see also Exercise 5.54 on page 172), use the normal approximation to the binomial distribution to determine the probabilities that the proportion of heads will be anywhere from 0.49 to 0.51 when a balanced coin is flipped
(a) 100 times;
(b) 1,000 times;
(c) 10,000 times.
Answer:
(a) 0.1585
(b) 0.4713
(c) 0.9545
Explanation:
The random variable X can be defined as the number of heads.
The coin provided is balanced, i.e. P (H) = P (T) = 0.50
The outcome of tossing the coin are: (H and T). Each of these outcomes are independent of each other.
The random variable X thus follows a Binomial distribution with probability of success as 0.50.
For a large sample a Normal approximation to binomial can be applied to approximate the distribution of p if the following conditions are satisfied:
1. np ≥ 10
2. n(1 - p) ≥ 10
(a)
n = 100
Check the conditions as follows:
[tex]np=100\times 0.50=50>10\\\\n(1-p)=100\times(1-0.50)=50>10[/tex]
Thus, a Normal approximation to binomial can be applied.
So, [tex]p\sim N(0.50,\ 0.05 )[/tex]
Compute the probability hat the proportion of heads will be anywhere from 0.49 to 0.51 as follows:
[tex]P(0.49<p<0.51)=P(\frac{0.49-0.50}{0.05}<\frac{p-\mu}{\sigma}<\frac{0.51-0.50}{0.05})[/tex]
[tex]=P(-0.20<Z<0.20)\\\\=P(Z<0.20)-P(Z<-0.20)\\\\=0.57926-0.42074\\\\=0.15852\\\\\approx 0.1585[/tex]
Thus, the probability hat the proportion of heads will be anywhere from 0.49 to 0.51 when a balanced coin is flipped 100 times is 0.1585.
(b)
n = 1000
Check the conditions as follows:
[tex]np=1000\times 0.50=500>10\\\\n(1-p)=1000\times(1-0.50)=500>10[/tex]
Thus, a Normal approximation to binomial can be applied.
So, [tex]p\sim N(0.50,\ 0.016 )[/tex]
Compute the probability hat the proportion of heads will be anywhere from 0.49 to 0.51 as follows:
[tex]P(0.49<p<0.51)=P(\frac{0.49-0.50}{0.016}<\frac{p-\mu}{\sigma}<\frac{0.51-0.50}{0.016})[/tex]
[tex]=P(-0.63<Z<0.63)\\\\=P(Z<0.63)-P(Z<-0.63)\\\\=0.73565-0.26435\\\\=0.4713[/tex]
Thus, the probability hat the proportion of heads will be anywhere from 0.49 to 0.51 when a balanced coin is flipped 1000 times is 0.4713.
(c)
n = 10,000
Check the conditions as follows:
[tex]np=10000\times 0.50=5000>10\\\\n(1-p)=10000\times(1-0.50)=5000>10[/tex]
Thus, a Normal approximation to binomial can be applied.
So, [tex]p\sim N(0.50,\ 0.005)[/tex]
Compute the probability hat the proportion of heads will be anywhere from 0.49 to 0.51 as follows:
[tex]P(0.49<p<0.51)=P(\frac{0.49-0.50}{0.005}<\frac{p-\mu}{\sigma}<\frac{0.51-0.50}{0.005})[/tex]
[tex]=P(-2<Z<2)\\\\=P(Z<2)-P(Z<-2)\\\\=0.97725-0.02275\\\\=0.9545[/tex]
Thus, the probability hat the proportion of heads will be anywhere from 0.49 to 0.51 when a balanced coin is flipped 10,000 times is 0.9545.
Partial adjusted trial balance for Blue Spruce Corp. at December 31, 2017, includes the following accounts: Retained Earnings $16,300, Dividends $5,800, Service Revenue $36,100, Salaries and Wages Expense $13,800, Insurance Expense $1,790, Rent Expense $4,010, Supplies Expense $1,490, and Depreciation Expense $850. The balance in Retained Earnings is the balance as of January 1.
Required:
Prepare a retained earnings statement for the year assuming net income is $15,787.
Answer:
Retained Earnings at as December 31 is $26,287
Explanation:
Blue Spruce Corp.
Retained Earnings Statement
For the year Ended December 31, 2017
Retained Earnings, January 1 $16,300
Add: Net Income $15,787
$32,087
Less: Dividend $5,800
Retained Earnings, December 31 $26,287
At the beginning of the period, the Grinding Department budgeted direct labor of $19,800 and property tax of $51,000 for 1,100 hours of production. The department actually completed 1,500 hours of production.
Required:
Determine the budget for the department, assuming that it uses flexible budgeting.
Answer:
Budget for the Grinding department is $78,000, assuming that it uses flexible budgeting.
Explanation:
Note: Fixed cost remain constant at any level of production
Budgeted Direct labor at 1,100 hours of production is
= Budgeted direct labor / hours
= 19,800 / 1,100
=$18 per hour
Direct labor cost at 1,500 hours of production is:
=1,500 * $18
=$27,000
Budget for the Grinding department at 1,500 hour of production is:
=Direct labor cost + Property tax
=$27,000 + $51,000
=$78,000
which is extraordinarily large inflation in prices. At the peak of the hyperinflation, prices rose 26 comma 000% per month. At this rate, by what percentage would prices have risen in 1 year? In 1 day? (Assume 30 days per month.) g
Answer:
To identify inflation rates in a monthly hyperinflationary process of 26,000 percent inflation, we must multiply that number by 12 months to obtain annual inflation, and divide it by 30 to obtain daily inflation.
Thus, the annual inflation of the country arises from calculating 26,000 x 12, which results in an annual inflation of 312,000 percent, with which a product that at the beginning of the year would cost $ 1 would cost $ 312,000 a year later.
In turn, to identify daily inflation, you have to divide 26,000 / 30, obtaining a daily inflation of 866.6 percent, which implies that a product with a value of $ 1, a day later would be costing $ 866.6.
An all-equity firm is considering the following projects:
Project Beta IRR
W .62 9.2 %
X .77 10.3
Y 1.27 14.1
Z 1.42 17.0
The T-bill rate is 5 percent, and the expected return on the market is 12 percent.
A. Compared with the firm's 12 percent cost of capital, Project W has a_______expected return.
a. lower
b. higher
1. Project X has a______expected return.
a. higher
b. lower
2. Project Y has a_______expected return
a. lower
b. higher
3. Project Z has a______expected return.
a. higher
b. lower
B. Project W should be_______.
a. accepted
b. rejected
1. Project X should be______.
a. accepted
b. rejected
2. Project Y should be_______.
a. accepted
b. rejected
3. Project Z should be_______.
a. accepted
b. rejected
c. If the firm's overall cost of capital were used as a hurdle rate, Project W would be_______.
a. correctly accepted
b. incorrectly rejected
c. correctly rejected
d. incorrectly accepted
1. Project X would be______.
a. correctly accepted
b. incorrectly accepted
c. correctly rejected
d. incorrectly rejected
2. Project Y would be_______.
a. correctly rejectedin
b. correctly accepted
c. incorrectly rejected
d. correctly accepted
3. Project Z would be________.
a. incorrectly accepted
b. correctly rejected
c. incorrectly rejected
d. correctly accepted.
Answer:
A. Compared with the firm's 12 percent cost of capital, Project W has a_______expected return.
a. lower1. Project X has a______expected return.
b. lower2. Project Y has a_______expected return
b. higher3. Project Z has a______expected return.
a. higherB. Project W should be_______.
b. rejected1. Project X should be______.
b. rejected2. Project Y should be_______.
a. accepted3. Project Z should be_______.
a. acceptedc. If the firm's overall cost of capital were used as a hurdle rate, Project W would be_______.
c. correctly rejected1. Project X would be______.
c. correctly rejected2. Project Y would be_______.
b. correctly accepted3. Project Z would be________.
b. correctly rejectedExplanation:
Project Beta IRR expected return
W .62 9.2% = 5% + (0.62 x 7%) = 9.34%
X .77 10.3 % = 5% + (0.77 x 7%) = 10.39%
Y 1.27 14.1 % = 5% + (1.27 x 7%) = 13.89%
Z 1.42 17.0% = 5% + (1.42 x 7%) = 14.94%
A. Compared with the firm's 12 percent cost of capital, Project W has a expected lower return 1 is lower, 2 is higher, 3 is higher. B. Project W should be rejected, 1 is rejected, 2 is accepted and 3 is accepted. C. Project W would be correctly rejected, 1 is correctly rejected, 2 is correctly accepted and 3 is correctly rejected. The correct options are A is a, 1 is b, 2 is b, 3 is a, B is b, 1 is b, 2 is a, 3 is a and C is c, 1 is c, 2 is b and 3 is b.
The cost of capital is a company's computation of the minimal return required to justify embarking on a capital budgeting project, like building a new plant.
Analysts and investors use the term cost of capital interchangeably, but it always refers to whether the expense of a proposed choice can be justified. Investors may also use the phrase to describe an assessment of an investment's prospective return in proportion to its cost and hazards.
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A small manufacturing company is considering purchasing a maintenance contract for its air conditioning systems. Since all of its systems are new, the company plans to begin the contract in year one and continue through year ten. The cost of the contract is $3,200 per year and the company's minimum attractive rate of return is 12% per year. The present worth of the contract is nearest to
Answer:
$18,080.71
Explanation:
This can be computed by using the formula for calculating the present value of an ordinary annuity as follows:
PV = P × [{1 - [1 ÷ (1 + r)]^n} ÷ r] …………………………………. (1)
Where;
PV = Present value or worth of the contract?
P = yearly cost of the contract = 3,200
r = annual rate of return = 12%, or 0.12
n = number of years = 10
Substitute the values into equation (1) to have:
PV = $3,200 × [{1 - [1 ÷ (1 + 0.12)]^10} ÷ 0.12]
PV = $3,200 × 5.65022302841087
PV = $18,080.71
Therefore, the present worth of the contract is nearest to $18,080.71.
The effect of a transaction between two individuals on a third party who has not consented to or played any role in the carrying out of that transaction. This is called an ______________.
Answer:
Externality
Explanation:
An externality is a loss or benefit generated by a producer not caused or earned directly by the producer. An externality may be positive or negative , and may result whether from the production or consumption of a product or service
Therefore in the given situation, it is mentioned that the two transaction effect between the person with respect to the third party that is not agreed for the transaction i.e to carrying out So this situation describes externality
The owner’s initial investment consists of $38,600 cash and $45,980 in land. The company’s $18,550 equipment purchase is paid in cash. The accounts payable balance of $9,060 consists of the $3,830 office supplies purchase and $5,230 in employee salaries yet to be paid. The company’s rent, telephone, and miscellaneous expenses are paid in cash. No cash has been collected on the $14,620 consulting fees earned. Using the above information prepare an October 31 statement of cash flows for Ernst Consulting. (Cash outflows should be indicated by a minus sign.)
Missing information:
ERNST CONSULTING
Income Statement
October 31. 202x
Revenues:
Consulting fees earned $15,600
Total revenues $15,600
Expenses:
Salaries expense $7,450
Rent expense $4,070
Telephone expense $810
Miscellaneous expenses $630
Total expenses $12,960
Net income $2,640
Cash dividends $2,530
Answer:
Ernst Consulting
Statement of Cash Flows
October 31, 202x
Cash flows from operating activities:
Cash received from customers $0
Cash paid for:
Rent expense -$4,070
Telephone expense -$810
Miscellaneous expenses -$630
Total cash flow from operating activities -$5,510
Cash flows from investing activities:
Cash paid for equipment -$18,550
Total cash flows from investing activities -$18,550
Cash flows from financing activities:
Cash investment from stockholders $38,600
Cash paid for dividends -$2,530
Total cash flows from financing activities $36,070
Net cash increase $12,010
Cash balance October 1, 202x $0
Cash balance October 31, 202x $12,010
The following items appear on the balance sheet of a company with a one-year operating cycle. Identify the proper classification of each item as follows: C if it is a current liability, L if it is a long-term liability, or N if it is not a liability.
Item Classification
1. Notes payable (due in 13 to 24 months)
2. Notes payable (due in 6 to 11 months).
3. Notes payable (mature in five years).
4. Current portion of long-term debt.
5. Notes payable (due in 120 days).
6. FUTA taxes payable.
7. Accounts receivable.
8. Sales taxes payable.
9. Salaries payable.
10. Wages payable.
Answer:
1. Notes payable (due in 13 to 24 months) - Long term Liability
This note will be owed for a period of more than 1 year. When this happens the note is said to be Long term.
2. Notes payable (due in 6 to 11 months). - Current Liability
As this note is due in a period less than a year, it is considered a current Liability.
3. Notes payable (mature in five years). - Long term Liability
This is a note that matures in a period more than a year making it a Long term Liability.
4. Current portion of long-term debt. Current Liability.
The current portion is due to be paid within the period so it is short term and hence a Current Liability.
5. Notes payable (due in 120 days). Current Liability.
Due in less than a year.
6. FUTA taxes payable. Current Liability
Taxes are generally considered a short term Liability until they are paid.
7. Accounts receivable. N (Not a Liability)
Accounts Receivable are Assets.
8. Sales taxes payable. Current Liability.
Taxes are generally considered a short term Liability until they are paid.
9. Salaries payable. Current Liability.
These salaries are owed for the period but have not been paid making them Current.
10. Wages payable. Current Liability.
Same as above. They are owed for the period but not yet paid.
The identification of the following items on the balance sheet of the company are:
Item Classification
1. Notes payable (due in 13 to 24 months) L
2. Notes payable (due in 6 to 11 months) C
3. Notes payable (mature in five years) L
4. Current portion of long-term debt C
5. Notes payable (due in 120 days) C
6. FUTA taxes payable C
7. Accounts receivable C
8. Sales taxes payable C
9. Salaries payable C
10. Wages payable C
Current liabilities are the payables that the company must settle within its operating cycle of 12 months. Long-term liabilities are payables settled after the operating cycle, say, from 13 months and above.
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Laser World reports net income of $640,000. Depreciation expense is $49,000, accounts receivable increases $10,000, and accounts payable decreases $29,000. Calculate net cash flows from operating activities using the indirect method.
Answer:
$650,000
Explanation:
The computation of net cash flows from operating activities using the indirect method is shown below:-
Cash Flows from Operating Activities
Net income $640,000
Adjustment made
Add: Depreciation expense $49,000
Less: Increase in accounts receivable ($10,000)
Less: Decrease in accounts payable ($29,000)
Net cash flows from operating activities $650,000
The positive amount reflects the cash inflow and the negative amount reflects the cash outflow
Pronghorn Corp has 3,200 shares of 8%, $103 par value preferred stock outstanding at December 31, 2017. At December 31, 2017, the company declared a $123,000 cash dividend. Determine the dividend paid to preferred stockholders and common stockholders under each of the following scenarios. 1. The preferred stock is noncumulative, and the company has not missed any dividends in previous years. The dividend paid to preferred stockholders $ The dividend paid to common stockholders $ 2. The preferred stock is noncumulative, and the company did not pay a dividend in each of the two previous years. The dividend paid to preferred stockholders $ The dividend paid to common stockholders $ 3. The preferred stock is cumulative, and the company did not pay a dividend in each of the two previous years. The dividend paid to preferred stockholders $ The dividend paid to common stockholders
Answer:
1) The dividend paid to preferred stockholders is $26,368
The dividend paid to Common stockholders is $96,632
2) The dividend paid to preferred stockholders is $26,368
The dividend paid to Common stockholders is $96,632
3) The dividend paid to preferred stockholders is $79,104
The dividend paid to Common stockholders is $43,896
Explanation:
1) The preferred stock is non-cumulative & the company has not missed any dividend in previous years
The dividend paid to preferred stockholders = 3,200 shares × $103 × 8 % = $26,368
The dividend paid to Common stockholders = $123,000 - $26,368 = $96,632
2) The preferred stock is non cumulative & the company did not pay dividend in each of the previous 2 years.
The dividend paid to preferred stockholders = 3,200 shares × $103 × 8 % = $26,368
The dividend paid to Common stockholders = $123,000 - $26,368 = $96,632
3) The preferred stock is cumulative & the company did not pay dividend in each of the previous 2 years.
The dividend paid to preferred stockholders = 3,200 shares × $103 × 8% × 3 years = $79,104
The dividend paid to Common stockholders = $132,000 - $86,400 = $43,896
Remsco has taxable income of $64,000 and a charitable contribution limit modified taxable income of $74,000. Its charitable contributions for the year were $7,660. What is Remsco's current-year charitable contribution deduction and contribution carryover
Answer: $7400 ; $260
Explanation:
From the question, we are given the information that Remsco has taxable income of $64,000 and a charitable contribution limit modified taxable income of $74,000 and that its charitable contributions for the year were $7,660.
It should be noted that the charitable contribution is 10% of $74,000 which is the charitable contribution limit modified taxable income given in the question. So, this will be:
= 10% of $74,000
= 10/100 × $74,000
= 0.1 × $74,000
= $7400
Therefore, Remsco's current-year charitable contribution deduction is $7400.
Remsco's contribution carryover will be the difference between his charitable contributions for the year which is $7,660 and his current-year charitable contribution deduction is $7400. This will be:
= $7660 - $7400
= $260
Blythe and Cali do business as Diamond Investments. In acting on the firm's behalf,Blythe makes an honest error in overestimating the value of a particular stock purchase. To her firm,Blythe is:__________.
A) liable for breach of the duty of care.
B) liable for breach of the duty of accounting.
C) liable for breach of the duty of accounting.
D) not liable.
Answer:
D) not liable.
Explanation:
Duty of Care is the legal expectation from individuals and businesses in the course of discharging their duties, not to engage in conduct that could be foreseen to predispose others to danger or harm. The Duty of Accounting or accounting responsibility requires an accurate record of transactions. Liability implies being legally answerable. In business transactions, businessmen owe it to their customers to provide their services and products in the best possible way so as to prevent causing harm to them. Employees also owe it to the organization they work for to discharge their duties carefully to avoid causing them loss.
Blythe's honest error in overestimating the value of a particular stock purchase is a mistake that anyone can make and can be easily corrected. Her company would not go the long route of taking her to court over such a mistake. Therefore, Blythe is not liable to her company.
Evans Inc. had current liabilities at April 30 of $69,400. The firm's current ratio at that date was 1.7. Required: Calculate the firm's current assets and working capital at April 30. Assume that management paid $14,300 of accounts payable on April 29. Calculate the current ratio and working capital at April 30 as if the April 29 payment had not been made. (Round "Current ratio" answer to 2 decimal places.) Identify the changes, if any, to working capital and the current ratio that would be caused by the April 29 paym
Answer:
See explanation below
Explanation:
Given:
Current liabilities at April 30 of $69,400
Current ratio = 1.7
a) Calculate the firm's current assets and working capital at April 30:
Use the formula below to find the firm's current assets:
current ratio= current asset/current liability
current asset = current ratio × current liability
current asset = 1.7 × $69,400
Current asset = $117,980
For working capital:
Working capital= current assets-current liability
= $117,980 - $69,400
= $48,580
Working capital = $48,580
b) Calculate the current ratio and working capital at April 30 as if the April 29 payment had not been made:
New current assets = $117,980 + $14,300 = $132,280
New current liability = $69,400 + $14,300 = $83,700
Working capital = $132,280 - $83,700 = $48,580
Current ratio = 132,280/83700 = 1.58
c) There is no change in the working capital.
The current ratio will decrease by 0.12 (1.7 - 1.58) due to payment on 29th April
The following selected transactions were completed during August between Summit Company and Beartooth Co.: Aug. 1 Summit Company sold merchandise on account to Beartooth Co., $48,000, terms FOB destination, 2/15, n/eom. The cost of the goods sold was $28,800. 2 Summit Company paid freight of $1,150 for delivery of merchandise sold to Beartooth Co. on August 1. 5 Summit Company sold merchandise on account to Beartooth Co., $66,000, terms FOB shipping point, n/eom. The cost of the goods sold was $40,000. 9 Beartooth Co. paid freight of $2,300 on August 5 purchase from Summit Company. 15 Summit Company sold merchandise on account to Beartooth Co., $58,700, terms FOB shipping point, 1/10, n/30. Summit Company paid freight of $1,675, which was added to the invoice. The cost of the goods sold was $35,000. 16 Beartooth Co. paid Summit Company for purchase of August 1. 25 Beartooth Co. paid Summit Company on account for purchase of August 15. 31 Beartooth Co. paid Summit Company on account for purchase of August 5. Required:Journalize the August transactions for: 1. Summit Company 2. Beartooth Co.
Answer:
Journalize the August transactions for: 1. Summit Company
Aug. 1 Summit Company sold merchandise on account to Beartooth Co., $48,000, terms FOB destination, 2/15, n/eom. The cost of the goods sold was $28,800.
Dr Accounts receivable 48,000
Cr Sales revenue 48,000
Dr Cost of goods sold 28,800
Cr Merchandise inventory 28,800
2 Summit Company paid freight of $1,150 for delivery of merchandise sold to Beartooth Co. on August 1.
Dr Cost of goods sold 1,150
Cr Cash 1,150
5 Summit Company sold merchandise on account to Beartooth Co., $66,000, terms FOB shipping point, n/eom. The cost of the goods sold was $40,000.
Dr Accounts receivable 66,000
Cr Sales revenue 66,000
Dr Cost of goods sold 40,000
Cr Merchandise inventory 40,000
15 Summit Company sold merchandise on account to Beartooth Co., $58,700, terms FOB shipping point, 1/10, n/30. Summit Company paid freight of $1,675, which was added to the invoice. The cost of the goods sold was $35,000.
Dr Accounts receivable 60,375
Cr Sales revenue 60,375
Dr Cost of goods sold 35,000
Cr Merchandise inventory 35,000
16 Beartooth Co. paid Summit Company for purchase of August 1.
Dr Cash 47,040
Dr Sales discounts 960
Cr Accounts receivable 48,000
25 Beartooth Co. paid Summit Company on account for purchase of August 15.
Dr Cash 59,788
Dr Sales discounts 587
Cr Accounts receivable 60,375
31 Beartooth Co. paid Summit Company on account for purchase of August 5.
Dr Cash 66,000
Cr Accounts receivable 66,000
Journalize the August transactions for: 2. Beartooth Co.
Aug. 1 Summit Company sold merchandise on account to Beartooth Co., $48,000, terms FOB destination, 2/15, n/eom. The cost of the goods sold was $28,800.
Dr Merchandise inventory 48,000
Cr Accounts payable 48,000
5 Summit Company sold merchandise on account to Beartooth Co., $66,000, terms FOB shipping point, n/eom. The cost of the goods sold was $40,000.
Dr Merchandise inventory 66,000
Cr Accounts payable 66,000
9 Beartooth Co. paid freight of $2,300 on August 5 purchase from Summit Company.
Dr Merchandise inventory 2,300
Cr Cash 2.300
15 Summit Company sold merchandise on account to Beartooth Co., $58,700, terms FOB shipping point, 1/10, n/30. Summit Company paid freight of $1,675, which was added to the invoice. The cost of the goods sold was $35,000.
Dr Merchandise inventory 60,375
Cr Accounts payable 60,375
16 Beartooth Co. paid Summit Company for purchase of August 1.
Dr Accounts payable 48,000
Cr Cash 47,040
Cr Purchase discounts 960
25 Beartooth Co. paid Summit Company on account for purchase of August 15.
Dr Accounts payable 60,375
Cr Cash 59,788
Cr Purchase discounts 587
31 Beartooth Co. paid Summit Company on account for purchase of August 5.
Dr Accounts payable 66,000
Cr Cash 66,000
Which of the following is useful to combine the data of different segments using different software for the purpose of creating companywide budgets? A. budget creation manual B. budget management software C. financial analysis software D. accounting development manual
Answer:
B. budget management software
Explanation:
A budget management software would be the best option to combine different segments of data to create a companywide budget.
This is because one of the specific purposes of budget management software is to merge several budgets (for example, the budgets of a company's divisions) into a single one, larger budget (the companywide budget).
Balt Company maintains a standard cost system. Last period, Balt spent $25,000 during the period to purchase 3,000 pounds of material H. The company used 5,000 pounds of Material H to produce 800 units of Product C8. The company has established a standard of 7 pounds of Material H per unit of C8, at a price of $7.50 per pound of material. The debit to direct materials control account isa. 25,000b. 22,500c. 41,667d. 37,500
Answer:
Balt CompanyDirect Materials Control Account:
Debit to the direct materials control account is
d. 37,500
Explanation:
a) Calculation:
Since 5,000 pounds were used at a standard price of $7.50, a debit to the direct materials control account would be $37,500 (5,000 x$7.50).
b) The direct materials control account is a memorandum account where the costs of direct materials are recorded to serve as a check and point of reconciliation with the subsidiary ledger of direct materials account. This debit shows the standard costs at actual production that is expensed for the period or during the process.
The next dividend payment by Savitz, Inc., will be $1.68 per share. The dividends are anticipated to maintain a growth rate of 6 percent forever. If the stock currently sells for $32 per share, what is the required return
Answer:
The answer is 11.25%
Explanation:
Solution
Given that:
The next step to take is to calculate the required rate of return which is shown below:
The required rate = D₁/P₀₀ + g
Thus,
$1.68/$32 + 0.06%
=0.0525 + 0.06
=0.1125 or 11.25%
Therefore, the required rate of return is 11.25%
After examining a planning gap, firms typically attempt to decide if the time horizon should be increased or decreased. perform a SWOT analysis with their major competitor as the focus. use statistical trend analysis to interpret the results. exploit a positive deviation and correct a negative deviation. adopt a product-market focus.
Answer: exploit a positive deviation and correct a negative deviation
Explanation:
A planning gap is the difference that occurs in revenue or profits gap when current strategies are not changed. The gap analysis can help in the identification of gaps in the market. Therefore, when an organization compares its forecast profits to the company's desired profits, the planning gap will be shown.
When the actual results are lesser than the planned result, the organization would have to fill the gap with a marketing program which has been revised and sometime with new goals. Therefore, the firm can then decide whether to exploit wither a positive deviation and correct a negative deviation.
company is considering the purchase of a new piece of equipment for $90,000. Predicted annual net cash inflows from the investment are $36,000 (Year 1), $30,000 (Year 2), $18,000 (Year 3), $12,000 (Year 4), and $6,000 (Year 5). The average operating income generated from the investment over its 5-year life is $20,400. The cash payback period is 3.5 years true false
Answer:
The cash payback period is 3.5 years. The answer is True.
Explanation:
According to the given data we have the following:
Year Cash flows Cumulative Cash flows
0 (90,000) (90,000)
1 36,000 (54,000)
2 30,000 (24,000)
3 18,000 (6000)
4 12000 6000
5 6000 12,000
To calculate the cash payback period we use the following formula:
Payback period=Last period with a negative cumulative cash flow+(Absolute value of cumulative cash flows at that period/Cash flow after that period).
Payback period=3+($6,000/$12,000)
Payback period=3.5 years
The cash payback period is 3.5 years. True
Todrick Company is a merchandiser that reported the following information based on 1,000 units sold: Sales $ 405,000 Beginning merchandise inventory $ 27,000 Purchases $ 270,000 Ending merchandise inventory $ 13,500 Fixed selling expense $
Missing information:
Fixed administrative expense $ 16,200 Variable selling expense $ 20,250 Variable administrative expense $ ? Contribution margin $ 81,000 Net operating income $ 24,300
1. Prepare a contribution format income statement.
2. Prepare a traditional format income statement.
3. Calculate the selling price per unit.
4. Calculate the variable cost per unit.
5. Calculate the contribution margin per unit.
Answer:
First we must determine cost of goods sold = $27,000 + $270,000 - $13,500 = $283,500
now we must find total variable costs = total sales - contribution margin = $405,00 - $81,000 = $324,000
variable administrative expenses = total variable costs - COGS - variable selling expense = $324,000 - $283,500 - $20,250 = $20,250
1. Prepare a contribution format income statement.
Total sales $405,000
Cost of goods sold $283,500
Gross contribution margin $121,500
Variable selling expense $20,250
Variable adm. expense $20,250
Contribution margin $81,000
Fixed period expenses:
Fixed selling expense $40,500Fixed administrative expense $16,200Net operating income $24,300
2. Prepare a traditional format income statement.
Total sales $405,000
Cost of goods sold $283,500
Gross profit $121,500
Operating expenses:
Selling expenses $60,750
Adm. expenses $36,450
Net operating income $24,300
3. Calculate the selling price per unit.
$4054. Calculate the variable cost per unit.
$3245. Calculate the contribution margin per unit.
$81ldentify whether each statement in the following statement is true or false.
a. Businesses that do not adopt a differentiation, low-cost leadership, or focus strategy tend to be more successful than businesses that do adopt these strategies.
b. Employee abilities to create innovative products are critical for companies that adopt a low-cost leadership strategy.
c. Companies that use a focus strategy have narrow buyer groups.
Answer:
The answer is (a) False (b) False (c) True
Explanation:
Solution
(a)Businesses that do not acquire a differentiation,focus strategy, or low-cost leadership, is liable to be more successful than businesses that do adopt these strategies - False because Companies or business does not necessarily need to adopt differentiation methods or low cost leadership, they might have their own market strategy to succeed.
(b) Employee abilities to develop innovative products are important for companies that use a low-cost leadership strategy - False .
(c) Companies that use a focus strategy have narrow buyer groups -Focus strategy : This strategy is used when a company knows its segment and has products that can competitively satisfies its needs.In this case it is true.
ACNielsen conducts weekly surveys of television viewing throughout the United States. The ACNielsen statistical ratings indicate the size of the viewing audience for each major network television program. Rankings of the television programs and of the viewing audience market shares for each network are published each week.
A. What is the ACNielsen organization attempting to measure?
B. What is the population?
C. Why would a sample be used for this situation?
D. What kinds of decisions or actions are based on the ACNielsen studies?
Answer: The answers are given below
Explanation:
A. What is the ACNielsen organization attempting to measure?
ACNielsen organization attempting to measure the Television Rating Point of the major television network. The TRP helps us to know the programmes that the viewers watch the most.
B. What is the population?
The population will have to be the viewers who watch the programmes and the television networks in the United States.
C. Why would a sample be used for this situation?
Sampling is when few people are selected from a larger population in order to carry out an experiment. In this situation, sampling is required because gathering data from the larger population will be time consuming and costly.
D. What kinds of decisions or actions are based on the ACNielsen studies?
A new strategy can be devised by the television networks of they know the number of people or the particular age group who normally watches the programmes, then they can tune their strategy towards that direction.
ete is a California resident who is serving in California when he is transferred to Virginia under Temporary Duty (TDY) assignment. His salary is $3,000 per month. Pete is transferred on April 1 of the current year. How much of his income is taxable in California
Answer:
$36,000
Explanation:
Temporary duty can't change anything when someone is domiciled in the state and a responsible resident of the state, therefore his whole income would be taxable as usual whether he is in the state or out of state.
Workings:
Financial year= 12 months
Monthly salary = $3,000
Taxable income= $3,000 x 12 months
Taxable income = $36,000
If VersaLife Corporation issues new debt, then the bond market expects a yield of 7.5%. Preferred stock is trading for $96, has a $100 par value and pays an annual dividend of 8% (the next dividend is due in one year). Common equity has a beta of 1.20, the market risk premium is 5%, and the risk-free rate is 3%. If the firm's tax rate is 40%, what is the weighted average cost of capital
Answer:
7.17%
Explanation:
For determining the weighted average cost of capital first we need to find out the after cost of debt and cost of preferred stock and the cost of common equity which are as follows
Cost of debt is
= Yield × (1 - tax rate)
= 7.5% × (1 - 40%)
= 4.5%
Cost of preferred stock is
= Dividend ÷ price
= 8 ÷ $96
= 8.33%
And, Cost of common equity is
= risk free rate + beta × market risk premium
= 3% + 1.2 × 5%
= 9%
Now the weighted average cost of capital is
WACC = cost of debt × weight of debt + cost of preferred stock × weight of preferred stock + cost of common equity × weight of common equity
= 4.5% × $80 ÷ ($80 + $10 + $110) + 8.33% × $10 ÷ (80 + $10 + $110) + 9% × $110 ÷ ($80 + $10 + $110)
= 7.17%
For a business credit card, most companies that issue credit, including Visa and Mastercard, specifically state their liability policies:
Only cover the first $50.00 of liability
Cover up to $500 of liability
Are the same as their business card accounts
Do not apply to business card accounts
Answer: Cover up to $500 of liability
Explanation:
When one suspect that there has been unauthorized transactions in ones accounts which could be due to fraud, such business or person can make a complaint as soon as possible.
As soon as the report is made, the person is no longer in charge of the unauthorized use of such card. In a case whereby the loss is reported within two days, the liability is limited to $50 but when the report is made within 60 days after ones statement has been sent to the person or business, this may lead to a liability of $500.
Cover upto liability of $500. If the report is made within 60 days of receiving statement that shows fradulent transactions. If it is not reported within 60 days then the liability is unlimited.
The Work in Process Inventory account of a manufacturing company has a $11,625 debit balance. The company applies overhead using direct labor cost. The cost sheet of the only job still in process shows direct material cost of $3,700 and direct labor cost of $2,500. Therefore, the company's predetermined overhead rate is:
Answer:
The multiple choices are given below:
217%.
148%.
68%.
147%.
46%.
The correct option is 217%
Explanation:
Overhead applied can be determined using the below formula total cost formula:
The total cost of work-in-process inventory=direct material cost+direct labor cost+overhead applied
total cost of work-in-process is $11,625
direct material cost is $3,700
direct labor cost is $2,500
overhead applied is the unknown
$11,625=$3,700+$2,500+overhed applied
$11,625=$6200+overhead applied
overhead applied=$11,625-$6,200=$5,425.00
predetermined overhead rate=overhead applied/labor cost=$5,425.00/$2,500.00=217%
Revenue and expense data for the current calendar year for Tannenhill Company and for the electronics industry are as follows. The Tannenhill Company data are expressed in dollars. The electronics industry averages are expressed in percentages.
1 Tannenhill Company Electronics Industry Average
2 Sales $4,000,000 100%
3 Cost of goods sold $2,120,000 60%
4 Gross profit $1,888,000 40%
5 Selling expenses $1,080,000 24%
6 Administrative expenses $640,000 14%
7 Total operating expenses $1,720,000 38%
8 Income from operations $160,000 2%
9 Other income $120,000 3%
10 $280,000 5%
11 Other expense $80,000 2%
12 Income before income tax $200,000 3%
13 Income tax expense $80,000 2%
14 Net income $120,000 1%
A. Prepare a common-size income statement comparing the results of operations for Tannenhill Company with the industry average. Enter all amounts as positive numbers.
B. As far as the data permit, comment on significant relationships revealed by the comparisons. As far as the data permit, comment on significant relationships revealed by the comparisons.
Answer:
Explanation:
Tannenhill % Industry
Sales 4,000,000 100 100
Cost of goods 2,120,000 53 60
Gross profit 1,880,000 47 40
Selling Expenses 1,080,000 27 24
Admin Expenses 640,000 16 14
Operating Expenses 1,720,000 43 38
Operating profit 160,000 4 2
Other income 120,000 3 3
Total income 280,000 7 5
Other Expenses 80,000 2 2
Income before tax 200,000 5 3
Income tax 80,000 2 2
Net Income 120,000 3 1
B)
Despite the fact that the selling and admin expenses pf Tannenhill was higher than the industry average , it had a better performance in the cost of goods management which in effect caused Tannenhill to record a greater net income percentage compared to the industry performance.
The other income and expenses was the same with the industry average , hence no impact on the overall performance.