Wilma Company must decide whether to make or buy some of its components. The cost of producing 60,000 switches for its generators are as follow: Direct Material $30,000 Direct Labor $42,000 Variable Overhead $45,000 Fixed Overhead $60,000 Instead of making the switches at $2.70 per unit. If the company purchases all the switches, all the variable cost and one-fourth of the fixed cost will be eliminated. (a) Prepare an incremental analysis showing whether the company should make or buy the switches. (b) Would your answer be different if the released productive capacity will generate additional income of $34,000

Answer:

The company would incur $ 30,000 additional costs if it buys the switches.

No, the company should make switches in order to avoid additional costs even if the income is increased.

Explanation:

Wilma Company

                                       Make                     Buy                    Net Income

                                                                                         ( increase / decrease)

Direct Material             $30,000                                       $30,000                    

Direct Labor                 $42,000                                           $42,000

Variable Overhead     $45,000                                                $45,000

Fixed Overhead          $60,000                   $ 45000              $ 15000

Purchase Price                                           (2.7 *60,000)              

                                                                      162,000                 ( 162,000)

Total                          $177,000                     $ 207,000            (30,000)

The company should make the switches because it costs more to buy rather than to make.

The company would incur $ 30,000 additional costs if it buys the switches.

No because even if the income is increased the better option would be to make switches to save the additional costs.

Explanation:

The ledger of Cheyenne Company at the end of the current year shows Accounts Receivable $77,000, Credit Sales $810,000, and Sales Returns and Allowances $41,300. Prepare journal entries for each separate scenario below. (a) If Cheyenne uses the direct write-off method to account for uncollectible accounts, journalize the entry at December 15 if Cheyenne determines that Matisse’s $900 balance is uncollectible. (b) If Allowance for Doubtful Accounts has a credit balance of $900 in the trial balance, journalize the adjusting entry at December 31, assuming uncollectibles are expected to be 10% of accounts receivable. (c) If Allowance for Doubtful Accounts has a debit balance of $496 in the trial balance, journalize the adjusting entry at December 31, assuming uncollectibles are expected to be 9% of accounts receivable.

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You just bought your first new (used) car for $15,000. The car is out of factory warranty but the salesman can offer you an extended warranty that is 5 years, 50,000 miles, and covers the same items as a factory warranty for $2,000. Will you purchase it? Why or why not?

Explain the use of NBT​

it takes fena tailoring 2 hr of cutting and 4 hr of sewing to make a tiered silk organza bridal dress. it takes 4 hr of cutting and 2 hr of sewing to make a lace sheath bridal dress. the shop has at most 18 hr per week available for cutting and at most 18 hr per week for sewing. the profit is $318 on an organza dress and $167 on a lace dress. how many of each kind of bridal dress should be made each week in order to maximize​ profit

Vince says that the present value of $500 to be received one year from today if the interest rate is 8 percent is more than the present value of $500 to be received two years from today if the interest rate is 4 percent. Terri says that $500 saved for two years at an interest rate of 3 percent has a larger future value than $500 saved for one years at an interest rate of 6 percent. a. Both Vince and Terri are correct. b. Only Vince is correct. c. Only Terri is correct. d. Neither Vince nor Terri is correct.

What do you need to file your taxes?

Nelter Corporation, which has only one product, has provided the following data concerning its most recent month of operations:Selling price $ 122Units in beginning inventory 290Units produced 6,600Units sold 6,590Units in ending inventory 300Variable costs per unit:Direct materials $ 42Direct labor $ 26Variable manufacturing overhead $ 2Variable selling and administrative expense $ 21Fixed costs:Fixed manufacturing overhead $ 151,800Fixed selling and administrative expense $ 46,130The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month.Required:a. Prepare a contribution format income statement for the month using variable costing.b. Prepare an income statement for the month using absorption costing.

Crane Co. has the following transactions related to notes receivable during the last 2 months of the year. The company does not make entries to accrue interest except at December 31.

Nov. 1 Loaned $66,600 cash to C. Bohr on a 12-month, 6% note.
Dec. 11 Sold goods to K. R. Pine, Inc., receiving a $7,200, 90-day, 6% note.
Dec. 16 Received a $9,600, 180-day, 8% note to settle an open account from A. Murdock.
Dec. 31 Accrued interest revenue on all notes receivable.

Required:
Journalize the transactions for Crane Company

The trading securities portfolio of Jerome, Inc., had a total cost of $3,000 and
a fair value of $2,800 on December 31, which is the first year it held trading
securities. Complete the necessary adjusting entry by selecting the account
names from the pull-down menus and entering dollar amounts in the debit and credit columns

Nemo Gill was hired by the Spectacular Tropical Aquarium and agreed to submit any disputes arising out of his employment to binding arbitration. Nemo was fired when he became a Rastafarian and urged his coworkers to become vegetarians and smoke ganja. Without waiting for the results of the arbitration, Nemo filed a complaint alleging religious discrimination with the EEOC. The EEOC quickly filed a lawsuit on his behalf. Spectacular moved to have the EEOC's lawsuit dismissed on the grounds that Nemo signed a valid arbitration agreement.

a. The EEOC cannot bring a lawsuit enforcement action against Spectacular because Nemo signed the mandatory arbitration agreement.
b. The EEOC can bring a lawsuit enforcement action against Spectacular despite Nemo's agreeing to arbitration.
c. The EEOC cannot bring a lawsuit enforcement action against Spectacular because Nemo did not wait for the results of the arbitration.
d. The EEOC cannot bring a lawsuit enforcement action against Spectacular because Nemo's urging his co-workers to smoke ganja and become vegetarians had nothing to do with his job.

Luzadis Company makes furniture using the latest automated technology. The company uses a job-order costing system and applies manufacturing overhead cost to products on the basis of machine-hours. The predetermined overhead rate was based on a cost formula that estimates $1,152,000 of total manufacturing overhead for an estimated activity level of 72,000 machine-hours.During the year, a large quantity of furniture on the market resulted in cutting back production and a buildup of furniture in the company's warehouse. The company's cost records revealed the following actual cost and operating data for the year:,Machine-hours 67,000Manufacturing overhead cost $551,000 Inventories at year-end: Raw materials $13,000 Work in process (includes overhead applied of $37,520) $139,300 Finished goods (includes overhead applied of $101,840) $378,100 Cost of goods sold (includes overhead applied of $396, 640) $1,472,600Required: 1. Compute the underapplied or overapplied overhead. 2. Assume that the company closes any underapplied or overapplied overhead to Cost of Goods Sold. Prepare the appropriate journal entry. 3. Assume that the company allocates any underapplied or over appliedoverhead proportionally to Work in Process, Finished Goods, and Cost of Goods Sold. Prepare the appropriate journal entry. 4. How much higher or lower will net operating income be if the underapplied or overapplied overhead is allocated to Work in Process, Finished Goods, and Cost of Goods Sold rather than being closed to Cost of Goods Sold?

06-14 Calculating EAR [LO4] First National Bank charges 13.1 percent compounded monthly on its business loans. First United Bank charges 13.4 percent compounded semiannually. Calculate the EAR for First National Bank and First United Bank. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) As a potential borrower, which bank would you go to for a new loan

Sean and Yvette Durand live in Swarthmore, PA. Yvette's father, Bob, lives in Sweden. For each of the following transactions that occur in their lives, identify whether it is included in the calculation of U.S. GDP as part of consumption (C), investment (I), government purchases (G), exports (X), or imports (M). Check all that apply.

a. Yvette's father in Sweden orders a bottle of Vermont maple syrup from the producer's website.
b. Sean buys a sweater made in Guatemala.
c. The state of Pennsylvania repaves highway PA 320, which goes through the center of Swarthmore.
d. Sean's employer upgrades all of its computer systems using U.S.-made parts.
e. Yvette gets a new refrigerator made in the United States.

Strong brand names: multiple choice 1 are easy to create. guarantee brand loyalty. guarantee product quality. act as a signal of quality. A negative impact of branding is that: multiple choice 2 it makes firms with no reputation more competitive. it may create false perceptions about product differences. it provides additional information to buyers. it may encourage firms to create quality products.

A businessperson is setting up a new automatic car wash and is choosing between two fully automated machines. The first machine can process up to 2,000 cars per month at a marginal cost of $1 per car. The second machine can also process up to 2,000 cars per month but at a marginal cost of $0.50 per car. The monthly lease for the machine with the higher marginal cost is $1,200. The monthly lease for the machine with the lower marginal cost is $1,590 The car wash can sell car washes for $8 per car. 1. Suppose the businessperson chooses to lease the machine with the higher marginal cost for the first month and does indeed wash 2,000 cars that month. The businessperson earned profits of____________ $ in the first month. 2. Suppose now the businessperson chooses to lease the machine with the lower marginal cost for the second month and again washes 2,000 cars that month. The businessperson earned profits of __________$ in the second month. 3. The car wash would have to wash ____________cars or more per month in order to justify paying the higher-priced machine lease.

When the original poverty line was created, even some people living above the poverty line did not have access to a phone or running water in their homes.
Today, running water is expected. Beyond that, the norm for our contemporary society includes having cell phones and internet access. In fact, the U.S. government provides grants to bring high-speed in-home internet access to underserved rural areas.
Consider both the benefits and the shortcomings of the U.S. poverty line as a means of assessing poverty today.
The U.S. poverty line was originally set at
a. an income level of $1.90 per day.
b. sufficient income to provide for a family of four.
c. one-third of the median income in the United States.
d. three times the cost of a low-cost food plan.

You are the manager of a small hotel with 40 rooms in Niagara. Your business has dropped almost 90% in recent months. Your cash remaining is enough to run the business for 3 more months.

Apply the 6 thinking hats approach, what would you recommend to do if you were:

1. wearing a blue hat?

2. wearing a white hat?

3. wearing a green hat?

4. wearing a red hat?

5. wearing a yellow hat?

6. wearing a black hat?

After considering the views from different perspectives, what is your recommendation?

Luebke Inc. has provided the following data for the month of November. The balance in the Finished Goods inventory account at the beginning of the month was $53,000 and at the end of the month was $30,100. The cost of goods manufactured for the month was $212,500. The actual manufacturing overhead cost incurred was $55,300 and the manufacturing overhead cost applied to Work in Process was $58,400. The company closes out any underapplied or overapplied manufacturing overhead to cost of goods sold. The adjusted cost of goods sold that would appear on the income statement for November is:

Mariana works for a large pharmaceutical company. Last week she visited with an advisor at the nearby university because her employer encourages workers to continue their education. The company even gives employees time off to go to academic-related appointments during regularly scheduled work hours. One would assume that management at Mariana's company values the results of the Hawthorne studies, more so than traditional scientific management principles.
a. true
b. false

A researcher sets up an experiment involving the use of some sophisticated equipment. The research proposal is approved by the IRB and a grant to cover the cost of the equipment is received from a funding agency. The researcher does not mention that he owns stock in the company he chooses to supply the equipment. The same type of equipment is available from other companies, of comparable quality and price. Is this ethical or unethical

A sales representative lives in Bloomington and must be in Indianapolis next Thursday. On each of the days Monday, Tuesday, and Wednesday, he can sell his wares in Indianapolis, Bloomington, or Chicago. From past experience, he believes that he can earn $12 from spending a day in Indianapolis, $16 from spending a day in Bloomington, and $17 from spending a day in Chicago. Where should he spend the first three days

A company had stock outstanding as follows during each of its first three years of operations: 2,500 shares of 10%, $100 par, cumulative preferred stock and 50,000 shares of $10 par common stock. The amounts distributed as dividends follow. Determine the total and per-share dividends for each class of stock for each year by completing the schedule. Preferred Common Year Dividends Total Per Share Total Per Share1 $10,000 2 25,000 3 60,000

For centuries, Alaskans relied on salmon and other freshwater fish for protein, oil, and other nutrients. But when jetliners began flying tourists who love fishing from Seattle to Anchorage in the 1950s, the stock of Alaskan salmon began falling. The Alaska Department of Fish and Game had concerns about the high fraction of young salmon caught before they could reproduce. Following the advice of environmental scientists and economists, the Alaska Department of Fish and Game introduced restrictions on the minimum size (28 inches) and the number of salmon caught (5 per day). Among their concerns was the high fraction of young salmon caught before they could reproduce.
a. Alaskan salmon are a ____________.
b. In addition to restricting the number of salmon caught and imposing minimum size limits, which of following are suitable policy interventions to deal with this market failure?
The government could :________.
i. allow only Alaska residents to purchase fishing permits.
ii. increase the cost of fishing permits for sport fishers.
iii. decrease the number of fish allowed for commercial fishers.
iv. limit the fishing season to only certain times of the year, i.e., prohibit fishing during spawning.

Suppose that you have found the optimal risky combination using all risky assets available in the economy, and that this optimal risky portfolio has an expected return of 0.2 and standard deviation of 0.2. The T-bill rate is 0.05. If your risk-return preferences are best described by the utility function in this class, with a risk-aversion coefficient of 4.6. What is the expected return on your optimal complete portfolio

9. Matilda just graduated from college. In order to devote all her efforts to college, she did not hold a job. Matilda just graduated from college. In order to devote all her efforts to college, she did not hold a job. She is going to cruise around the country on her motorcycle for a month before she starts looking for work. Other things the same, the unemployment rate ____________ and the labor force participation rate ______________.

For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows: Pretax accounting income 285,000 Temporary difference-depreciation (20,000) Taxable income $ 265,000 Tringali's tax rate is 40%. Assume that no estimated taxes have been paid. What should Tringali report as income tax payable for its first year of operations

Leroy ordered a DVD player for his son's birthday. While the manufacturer guaranteed that it would ship the player within ten business days, the player was not shipped until three months after Leroy placed his order. By the time the DVD player arrived, Leroy's son's birthday had long since passed. When the player arrived, Leroy refused to sign for it. Under these circumstances:
A. Leroy holds title to the DVD player.
B. The manufacturer can only regain title if it sues Leroy.
C. Leroy and the manufacture have joint title.

Albert and his family sell beverages outside the stadium during local football matches. Local football matches take place every day because they are the main form of entertainment in the town. Albert knows that demand for beverages will depend on whom the local team is playing against. Albert has a large amount of beverages stored at home, and whatever does not get sold one day, will be stored for the next day. Based on the expected demand, Albert determines how many coolers will be needed for that day and rents the appropriate number of coolers from a local supplier (the only local supplier of coolers in town). The local supplier of coolers is an avid football fan and therefore opens the store only for a few hours early in the morning before the game. Once Albert has rented the coolers, the store closes until the next day. Which of the following statements are correct about Albert's business?A. For Georgina's business, the number of beverages is always a variable factor and the number of coolers is always a fixed factor. B. Before deciding how many coolers to rent, as long as the supply store is still open, Georgina is facing a long- run decision. C. Once Georgina has rented the coolers and the supplier has closed the store, Georgina is facing a long-run decision. D. Specifically for this problem, the long run could be described as roughly 24 hours. E. The long run is never less than 1 year.

Suppose that Healdsburg enters into a sales contract with an auto manufacturer on January 1, 2021, to provide tires that cost Healdsburg $18 million to produce. The buyer offers Healdsburg $6 million in cash and agrees to take over only the principal payment on Healdsburg's 6.55% debt notes. Assume that the going market interest is 7% at the time. What would Healdsburg's gross profit be on the sale

Ace Company purchased 10,000 bonds issued by Jack Company in 2018 for $53 per bond and classified the investment as securities available-for-sale. The value of the Jack investment was $83 per bond on December 31, 2019, and $100 per bond on December 31, 2020. During 2021, Ace sold all of its Jack investment at $148 per bond. In its 2021 income statement, Ace would report: Multiple Choice A gain of $950,000. A gain of $480,000. A gain of $470,000. A gain of $1,420,000.