Answer:
a. How much will you have in your retirement account on the day you retire?
we must calculate the future value of an annuity:
future value = annuity payment x {[(1 + r)ⁿ - 1] / r} = $6,500 x {[(1 + 0.065)⁴² - 1] / 0.065} = $1,308,262.21
b. If, instead of investing $ 6,500 per year, you wanted to make one lump-sum investment today for your retirement that will result in the same retirement saving, how much would that lump sum need to be?
future value of lump sum = lump sum x (1 + r)ⁿ
$1,308,262.21 = lump sum x (1 + 0.065)⁴²
lump sum = $1,308,262.21 / (1 + 0.065)⁴² = $1,308,262.21 / 14.08262214 = $92,899.05
c. If you hope to live for 26 years in retirement, how much can you withdraw every year in retirement (starting one year after retirement) so that you will just exhaust your savings with the 26th withdrawal (assume your savings will continue to earn 11.0% in retirement)?
present value of an annuity = annuity payment x {[1 - 1/(1 + r)ⁿ ] / r}
annuity payment = $1,308,262.21 / {[1 - 1/(1 + r)ⁿ ] / r} = $1,308,262.21 / {[1 - 1/(1 + 0.11)²⁶ ] / 0.11} = $1,308,262.21 / 8.48806 = $154,129.74
Paul's Dogs Corp. has 9 percent coupon bonds making annual payments with a YTM of 8.5 percent. The current yield on these bonds is 8.85 percent. How many years do these bonds have left until they mature
Answer:
4.17 years
Explanation:
For Bond,
Let's take Bond Par Value = $1,000
Coupon Rate = 9%
YTM = 8.5%
Current Yield = Annual Dividend/Current Price
0.0885 = 90/Bond Price
Bond Price = $1,016.95
Calculating Time left to Maturity,
Using TVM Calculation,
T = [FV = 1000, PV = 1016.95, PMT = 90, I = 0.085]
T = 4.17 years
So,
Time left to Maturity = 4.17 years
At the beginning of the year, paid-in capital was $164 and retained earnings was $94. During the year, the stockholders invested $48 and dividends of $12 were declared and paid. Retained earnings at the end of the year were $104.
Net income for the year was:_______
Answer:
$22
Explanation:
From the question above, the paid in capital at the beginning of a year was $164
Retained earnings was $94
During the year the amount invested by stockholders was $48 and a dividend of $12 was declared and paid.
At the end of the year the retained earnings was $104
Therefore, the net income for the year can be calculated as follows
Net income= Retained earnings at the end of the year-retained earnings at the beginning of the year+dividend
Net income= $104-$94+$12
= $22
Hence the net income for the year was $22
Assume you sell short 1,000 shares of common stock at $35 per share, with initial margin at 50%. What would be your rate of return if you repurchase the stock at $25 per share
Answer:
57.14%
Explanation:
Calculation for the rate of return if you repurchase the stock at $25 per share
First step is to calculate for the profit on stock
Using this formula
Profit on stock =( Sales amount of Common stock per share- Repurchased stock per share)*(Share of common stock)
Let plug in the formula
Profit on stock = ($35 - $25)(1,000)
Profit on stock=$10*10,000
Profit on stock = $10,000
Second step is to calculate for the initial investment
Using this formula
Initial investment= (Sales amount of Common stock per share*Share of common stock×Percentage of the initial margin
Let plug in the formula
Initial investment = ($35)(1,000)(.5)
Initial investment= $17,500
The rate of return will be :
Profit on stock / Initial investment
Rate of return=$10,000/$17,500
Rate of return= 57.14%
Therefore what would be your rate of return if you repurchase the stock at $25 per share will be 57.14%
If 200,000 machine‐hours are budgeted for variable overhead at a standard rate of $5/machine‐hour, but 220,000 machine‐hours were actually used at an actual rate of $6/machine‐hour, what is the variable overhead efficiency variance?
Answer:
Variable overhead efficiency variance= $100,000 unfavorable
Explanation:
Giving the following information:
200,000 machine‐hours are budgeted for variable overhead at a standard rate of $5/machine‐hour, but 220,000 machine‐hours were used.
To calculate the variable overhead efficiency variance, we need to use the following formula:
Variable overhead efficiency variance= (Standard Quantity - Actual Quantity)*Standard rate
Variable overhead efficiency variance= (200,000 - 220,000)*5
Variable overhead efficiency variance= $100,000 unfavorable
When the Variable overhead efficiency variance is = $100,000 unfavorable
What is the Efficiency variance?
Giving the following information are:
200,000 machine‐hours are budgeted for variable overhead at a standard rate of $5/machine‐hour, but [tex]220,000[/tex] machine‐hours were used. Now we calculate the variable overhead efficiency variance, Then we need to use the following formula are below mention. The variable overhead efficiency variance is= (Standard Quantity - Actual Quantity)*Standard rate. Then Variable overhead efficiency variance= [tex](200,000 - 220,000)*5[/tex]
Thus, Variable overhead efficiency variance= $100,000 unfavorable
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If sales are $400,000, variable costs are 75% of sales, and operating income is $40,000, what is the operating leverage
Answer:
operating leverage= 0.17
Explanation:
Giving the following information:
Sales= $400,000
Variable costs= 75% of sales
Operating income= $40,000
To calculate the operating leverage, we need to use the following formula:
operating leverage= fixed costs/total costs
Fixed costs= (400,000*0.25) - 40,000= 60,000
Total costs= 400,000*0.75 + 60,000= 360,000
operating leverage= 60,000/360,000
operating leverage= 0.17
You purchased a share of SPCC for $100 and expect to receive a dividend of $5 in one year. If you expect the price after the dividend is paid to be $110, what total return will you have earned over the year
Answer:
The answer is 15%
Explanation:
(P1 - Po) / Po + D
Where P1 is the price of the share at the end of the year
Po is the price of the share at the beginning of the year
D is the Dividend receceived
P1 is $110
Po is $100
And Dividend is 5%
($110 - $100) / $100 + 5 %
$10/100 + 5%
10% + 5%
= 15%
The total return will you have earned over the year for the purchase of a share of SPCC is 15%
Your boss would like your help on a marketing research project he is conducting on the relationship between the price of juice and the quantity of juice supplied. He hands you the following document:
Price of Juice Quantity of Juice Supplied (Dollars per can) (Billions of cans)
0.50 750
0.75 1,000
1.00 1,500
1.25 2,000
Your task is to take this______________ and construct a graphical representation of the data. In doing so, you determine that as the price of juice rises, the quantity of juice supplied increases. This confirms the____________- .
Question
Your boss would like your help on a marketing research project he is conducting on the relationship between the price of juice and the quantity of juice supplied. He hands you the following document:
Price of Juice Quantity of Juice Supplied (Dollars per can) (Billions of cans)
0.50 750
0.75 1,000
1.00 1,500
1.25 2,000
Your task is to take this______________ and construct a graphical representation of the data. In doing so, you determine that as the price of juice rises, the quantity of juice supplied increases. This confirms the____________- .
A.quantity of juice supplied
B.law of supply
C.supply schedule
D. supply curve
Answer:
The correct answers are
C - Supply Schedule
B - Law of Supply
Explanation:
A Supply schedule is a tabular representation of the relationship between the price of a commodity and the quantity of it that is supplied.
The law of supply states that all things being equal, price and quantity supplied will always move in the same direction.
Cheers!
Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 25 percent for the next 3 years, with the growth rate falling off to a constant 6 percent thereafter. If the required return is 12 percent and the company just paid a $1.30 dividend. what is the current share price
Answer:
$36.81
Explanation:
Div₀ = $1.30
Div₁ = $1.625
Div₂ = $2.03125
Div₃ = $2.5390625
Div₄ = $2.6914 at a constant g of 6%
first we need to determine the terminal value in year 3:
P = $2.6914 / (12% - 6%) = $44.86
the current stock price, P₀ = $1.625/1.12 + $2.03125/1.12² + $2.5390625/1.12³ + $44.86/1.12³ = $1.45 + $1.62 + $1.81 + $31.93 = $36.81
White Supplies' total material costs are $30,000 and total conversion costs are $20,000. Equivalent units of production for materials are 10,000, and 5,000 for conversion costs.
Compute the unit costs for materials, conversion costs, and total manufacturing costs for the month.
COSTS
Unit costs Materials Conversion Costs Total
Costs incurred
Equivalent units
Unit costs
Answer:
Material Conversion cost
Cost per unit $3 per unit $4 per unit
Explanation:
Cost per equivalent unit is computed by dividing the the total cost of each expenditure type by its the total total equivalent units.
Equivalent is a notional whole unit which represent incomplete and is used t to apportion cost between work in progress and completed work
The cost per equivalent units= total cost of expenditure type / total equivalent units
Material Conversion cost
Total cost 30,000 20,000
Equivalent units 10,000 5,000
Cost per unit $30,000/10000 $20,000/5000
= $3 per unit $4 per unit
Material Conversion cost
Cost per unit $3 per unit $4 per unit
​A restaurant, which operates in a perfectly competitive market, is evaluating whether it should serve breakfast on a daily basis. It would choose to do this when its revenues cover its variable costs. True or False
Answer:
TRUE
Explanation:
A perfect competition is characterised by many buyers and sellers of homogeneous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.
In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.
Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.
In the short run, the firm would continue to operate if its revenue covers variable cost. if it doesn't it would shut down.
Suppose your firm receives a $ 3.2 million order on the last day of the year. You fill the order with $ 1.7 million worth of inventory. The customer picks up the entire order the same day and pays $ 1.4 million upfront in​ cash; you also issue a bill for the customer to pay the remaining balance of $ 1.8 million in 30 days. Suppose your​ firm's tax rate is 0.0 % ​(i.e., ignore​ taxes). Determine the consequences of this transaction for each of the​ following: a. Revenues b. Earnings c. Receivables d. Inventory e. Cash
Answer and Explanation:
The consequences of given transactions are as follows
a. Revenues rise by $3.2 million as the firm received an order
b. Earnings rise by $1.5 million as the firm received an order and it filled by an orders i,e ($3.2 - $1.7)
c. Receivables rise by $1.80 million as it determines the remaining balance which ultimately increased the receivable balance
d. Inventory declined by $1.7 million as the order is filled which ultimately declines the stock
e. The cash would rise by $1.4 million
= Earnings - receivable + inventory
= $1.5 million - $1.80 million + $1.7 million
= $1.4 million
The Rose Co. has earnings of $1.40 per share. The benchmark PE for the company is 15. What stock price would you consider appropriate
Answer:
$21
Explanation:
The earning per share of Rose Co. is $1.40
The benchmark PE of the organization is 15
We are required to find which stock price would be most appropriate
Therefore, the stock price can be calculated as follows
Stock price= Benchmark PE×Earning per share
= $1.40×15
= $21
Hence the stock price that would be considered appropriate is $21
"At Trent Company, there are 800 units of ending work in process that are 100% complete as to materials and 40% complete as to conversion costs. If the unit cost of materials is $3 and the total costs assigned to the 800 units is $6,000, what is the per unit conversion cost
Answer:
Conversion cost per unit =11.25
Explanation:
The cost per equivalent unit =
Total conversion cost / Total number of equivalent units
Total number of equivalent unit = Degree of completion × units
= 40%× 800= 320 units.
Total conversion cost = Total value of work in process - cost of materials
= 6,000 - (800× 3)
= 3,600
Conversion cost per unit = 3,600/320=11.25
Conversion cost per unit =11.25
On December 31, 2018, Wintergreen, Inc., issued $150,000 of 7 percent, 10-year bonds at a price of 93.25. Wintergreen received $139,875 when it issued the bonds (or $150,000 × .9325). After recording the related entry, Bonds Payable had a balance of $150,000 and Discounts on Bonds Payable had a balance of $10,125. Wintergreen uses the straight-line bond amortization method. The first semiannual interest payment was made on June 30, 2019.Complete the necessary journal entry for June 30, 2019 by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.
Answer: Please see explanation column
Explanation:
Journal entry for June 30
Date Amount Debit Credit
June 30 Bond Interest expense $5,756
Discount on Bonds Payable $506
Cash $5,250
Calculation:
Cash = 150,000 x 7%x 6/12 = $5,250
10-year bonds pay interest semiannually indicates 20 interest periods
Straight line Amortization of the discount =$10,125/20 = $506
Bond interest expense= Interest + amortization on discount
Interest = $150,000 x 7% x 6/12 = $5,250 + 506= $5,756.
The new union president has proposed a couple of ideas that are very unusual: 1. "We should make an effort to help solve problems in the business." 2. "We should encourage our members who have the right experience and training to apply for supervisor jobs." Are these ideas good or not?
Answer:
In simple words, supervisory jobs refers to those jobs in which an individual has to monitor the performance of other individuals working under his or her direction and guidance.
The opinion of the president, therefore, is not bad as an employee with relevant experience gets a certain respect and have adequate level of knowledge for teaching others.
You find that the bid and ask prices for a stock are $14.25 and $15.45, respectively. If you purchase or sell the stock, you must pay a flat commission of $30. If you buy 100 shares of the stock and immediately sell them, what is your total implied and actual transaction cost in dollars
Answer:
$180
Explanation:
The bid price of a stock is $14.25
The ask-price of a stock is $15.45
A flat commission of $30 must be paid in the stock
100 shares of stock are bought
Therefore, the total implied and actual transaction costs can be calculated as follows
= Commission+(ask price-bid price)×number of shares
= 30×2+($15.45-$14.25)×100
= 60+ 1.2×100
= 60+120
= $180
Hence the total implied and actual transaction cost is $180
The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.80 on December 31, 20Y2.
Marshall Inc.
Comparative Retained Earnings Statement
For the Years Ended December 31, 20Y2 and 20Y1
1 20Y2 20Y1
2 Retained earnings, January 1 $3,704,000.00 $3,264,000.00
3 Net income 600,000.00 550,000.00
4 Total $4,304,000.00 $3,814,000.00
5 Dividends:
6 On preferred stock $10,000.00 $10,000.00
7 On common stock 100,000.00 100,000.00
8 Total dividends $110,000.00 $110,000.00
9 Retained earnings, December 31 $4,194,000.00 $3,704,000.00
Marshall Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
1 20Y2 20Y1
2 Sales $10,850,000.00 $10,000,000.00
3 Cost of goods sold 6,000,000.00 5,450,000.00
4 Gross profit $4,850,000.00 $4,550,000.00
5 Selling expenses $2,170,000.00 $2,000,000.00
6 Administrative expenses 1,627,500.00 1,500,000.00
7 Total operating expenses $3,797,500.00 $3,500,000.00
8 Income from operations $1,052,500.00 $1,050,000.00
9 Other revenue 99,500.00 20,000.00
10 $1,152,000.00 $1,070,000.00
11 Other expense (interest) 132,000.00 120,000.00
12 Income before income tax $1,020,000.00 $950,000.00
13 Income tax expense 420,000.00 400,000.00
14 Net income $600,000.00 $550,000.00
Marshall Inc.
Comparative Balance Sheet December 31, 20Y2 and 20Y1
1 20Y2 20Y1
2 Assets
3 Current assets:
4 Cash $1,050,000.00 $950,000.00
5 Marketable securities 301,000.00 420,000.00
6 Accounts receivable (net) 585,000.00 500,000.00
7 Inventories 420,000.00 380,000.00
8 Prepaid expenses 108,000.00 20,000.00
9 Total current assets $2,464,000.00 $2,270,000.00
10 Long-term investments 800,000.00 800,000.00
11 Property, plant, and equipment (net) 5,760,000.00 5,184,000.00
12 Total assets $9,024,000.00 $8,254,000.00
13 Liabilities
14 Current liabilities $880,000.00 $800,000.00
15 Long-term liabilities:
16 Mortgage note payable, 6% $200,000.00 $0.00
17 Bonds payable, 4% 3,000,000.00 3,000,000.00
18 Total long-term liabilities $3,200,000.00 $3,000,000.00
19 Total liabilities $4,080,000.00 $3,800,000.00
20 Stockholders' Equity
21 Preferred 4% stock, $5 par $250,000.00 $250,000.00
22 Common stock, $5 par 500,000.00 500,000.00
23 Retained earnings 4,194,000.00 3,704,000.00
24 Total stockholders' equity $4,944,000.00 $4,454,000.00
25 Total liabilities and stockholders' equity $9,024,000.00 $8,254,000.00
Determine the following measures for 20Y2 round to one decimal place, including percentages, except for pre-share amounts):
1. Working Capital
2. Current ratio
3. Quick ratio
4. Accounts receivable turnover
5. Number of days' sales in receivables
6. Inventory turnover
7. Number of days' sales in inventory
8. Ratio of fixed assets to long-term liabilities
9. Ratio of liabilities to stockholders' equity
10. Times interest earned
11. Asset turnover
12. Return on total assets
13. Return on stockholders' equity
14. Return on common stockholders' equity
15. Earnings per share on common stock
16. Price-earnings ratio
17. Dividends per share of common stock
18. Dividend yield
Answer:
Marshall Inc.
Ratios:
1. Working Capital = Current assets - Current liabilities
= $2,464,000 - 880,000 = $1,584,000
2. Current ratio = Current Assets/Current Liabilities
= $2,464,000/880,000 = 2.8 : 1
3. Quick ratio = (Current Assets - Inventory)/Current Liabilities
= ($2,464,000 - 420,000)/880,000
= $2,044,000/880,000 = 2.3 : 1
4. Accounts receivable turnover = Average Accounts Receivable / Net Sales
= $542,500/10,850,000 = 0.05 times
Average receivables = ($585,000 + 500,000)/2 = $542,500
5. Number of days' sales in receivables = Days in the year/Accounts receivable turnover
= 365/0.05 = 7,300 days
6. Inventory turnover = Cost of goods sold / Average Inventory
= $6,000,000/400,000 = 15 times
Average Inventory = (Beginning inventory + Ending inventory) / 2
= ($420,000 + 380,000)/2 = $400,000
7. Number of days' sales in inventory = Number of days in a year divided by Inventory turnover ratio = 365 /15 = 24.3 days
8. Ratio of fixed assets to long-term liabilities = Fixed Assets/Long-term Liabilities = $5,760,000/3,200,000 = 1.8 : 1
9. Ratio of liabilities to stockholders' equity = Total Liabilities/Stockholders' equity = $4,080,000 / $4,944,000 = 0.83 or 80%
10. Times interest earned = Earnings before Interest and Taxes / Interest Expense = $1,152,000/132,000 = 8.7 times
11. Asset turnover = Sales Revenue / Average Total Assets
= $6,000,000/$8,639,000 = 0.7 or 70%
Average Total Assets = Beginning total assets + Ending total assets, all divided by 2
= ($9,024,000 + 8,254,000)/2 = $8,639,000
12. Return on total assets = EBIT/Average Total Assets
= $1,152,000/$8,639,000 = 13%
13. Return on stockholders' equity = Earnings after tax/Shareholders' equity = $600,000/$4,944,000 x 100 = 12%
14. Return on common stockholders' equity = EAT/Common Shareholders' Equity = $600,000 - 10,000/($4,944,000 - 250,000) x 100
= 12.6%
15. Earnings per share (EPS) on common stock = Net Income divided by the number of outstanding common shares = $600,000/100,000 = $6 per share.
16. Price-earnings ratio = Market price of shares/EPS = $82.80/$6 = 13.8
17. Dividends per share of common stock = Dividends/Common Stock shares = $100,000/100,000 shares = $1
18. Dividend yield = Dividend per share / Market price per share = $1/$82.80 = 1.2%
Explanation:
1. Working Capital is the difference between current assets and current liabilities.
2. Current ratio is a liquidity ratio of current assets over current liabilities.
3. Quick ratio is the current ratio modified with the subtraction of inventory.
4. Accounts receivable turnover is an accounting measure that shows how quickly customers pay for the credit sales.
5. Number of days' sales in receivables measures the number of days it takes a company to collect its credit sales. It is a function of the number of days in a year divided by the accounts receivable turnover ratio.
6. Inventory turnover is a ratio showing how many times a company has sold and replaced its inventory during a given period.
7. Number of days' sales in inventory is the result of dividing the days in the period by the inventory turnover formula. It shows the number of days inventory is held before being sold.
8. Ratio of fixed assets to long-term liabilities shows how much of long-term liabilities is represented in fixed assets.
9. Ratio of liabilities to stockholders' equity is a financial leverage ratio that shows the relationship between liabilities and stockholders' equity.
10. Times interest earned (TIE) ratio measures the ability of a company to settle its debt obligations based on its current income. To calculate the TIE number, take the Earnings before interest and taxes (EBIT) and divide by the total interest expense.
11. Asset turnover is a ratio of sales over average assets, which shows company's efficiency in using assets to generate sales.
12. Return on total assets measures the percentage of earnings before interest and taxes over the average total assets. It can be obtained by multiplying profit margin with total asset turnover.
13. Return on stockholders' equity is a financial ratio that is calculated by dividing a company's earnings after taxes (EAT) by the total shareholders' equity, and then multiplying the result by 100.
14. Return on common stockholders' equity measures the ratio of earnings after taxes less Preferred Stock Dividend over the common shareholders' equity.
15. Earnings per share on common stock is the ratio of earnings divided by the number of outstanding common stock shares. It measures the earnings per share that the company has generated for the common stockholders.
16. Price-earnings ratio is a ratio of the market price of shares over the earnings per share. It is used to determine if a company's share is overvalued or undervalued.
17. Dividends per share of common stock is the dividend paid divided by the number of outstanding common stock.
18. Dividend yield is the ratio of the dividend per share over the market price per share.
A waiter fills your water glass with ice water (containing many ice cubes) such that the liquid water is perfectly level with the rim of the glass. As the ice melts,
Answer:
As the ice melts and turns into water, the level of the liquid water will lower and it will no longer be perfectly leveled with the rim of the glass. This happens because water has a unique property, its solid state occupies a larger volume than its liquid state, i.e. as waters turns into ice, it expands and occupies more space. Generally, as liquids become solid, they will shrink and occupy less space, but that doesn't happen with water.
Explanation:
The effects of tariffs and quotas are: a(n) __________ in the prices of imported goods to domestic consumers, and a(n) __________ in imports.
Answer:
Increase
Reduction
Explanation:
A tariff is a tax on import or export of goods and services.
Tariffs increases the prices of products and thus reduce the amount of imports.
Quotas is when the government or an agency of the government limits the amount of goods and services that can be imported or exported.
Due to the reduced inflow of goods due to quotas, the price of goods imported would rise.
I hope my answer helps you
Assume that both the supply and demand of bottled water rise in the summer but that supply increases more rapidly than demand. What can you conclude about the directions of the impacts on the equilibrium price and quantity
Answer:
there would be a rightward shift of the demand and supply curve.
there would be a rise in equilibrium quantity and an indeterminate effect on equilibrium price.
Explanation:
if the supply and demand of bottled water rises, there would be a rightward shift of the demand and supply curve.
a rise in the demand leads to a rise in price and quantity.
a rise in supply leads to a rise in quantity and a fall in price
the combined effect would lead to a rise in quantity and an indeterminate effect on price.
Use the following information . On January 1, 2018, Dennis Company purchased land for an office site by paying $540,000 cash. Dennis began construction on the office building on Jan 1. The following expenditures were incurred for construction: Date Expenditures January 1, 2018 $ 360,000 April 1, 2018 504,000 May 1, 2018 900,000 June 1, 2018 1,440,000 The office was completed and ready for occupancy on July 1st of the following year. To help pay for construction, $720,000 was borrowed on January 1, 2018 on a 9%, 3-year note payable. Other than the construction note, the only debt outstanding during 2018 was a $300,000, 12%, 6-year note payable dated January 1, 2016. Assume the weighted-average accumulated expenditures for the construction project are $870,000. The amount of interest cost to be capitalized during 2018 is:___________.
Answer:
$82,800
Explanation:
The computation of the amount of interest cost to be capitalized during 2018 is shown below:-
Amount of interest cost to be capitalized = (Borrowed amount × Rate of interest) + ($300,000 ÷ 2 × Rate of interest)
= ($720,000 × 9%) + ($150,000 × 12%)
= $82,800
Therefore for computing the amount of interest cost to be capitalized during 2018 we simply applied the above formula.
Way Cool produces two different models of air conditioners. The company produces the mechanical systems in their components department. The mechanical systems are combined with the housing assembly in its finishing department. The activities, costs, and drivers associated with these two manufacturing processes and the production support process follow. (Round your intermediate calculations and round "Cost per unit and OH rate" answers to 2 decimal places.) Process Activity Overhead Cost Driver QuantityComponents Changeover $ 459,500 Number of batches 810 Machining 301,600 Machine hours 7,680 Setups 227,500 Number of setups 80 $ 988,600 Finishing Welding $ 180,500 Welding hours 4,900 Inspecting 222,000 Number of inspections 815 Rework 60,700 Rework orders 230 $ 463,200 Support Purchasing $ 135,500 Purchase orders 525 Providing space 31,550 Number of units 4,800 Providing utilities 60,110 Number of units 4,800 $ 227,160 Additional production information concerning its two product lines follows. Model 145 Model 212Units produced 1,600 3,200 Welding hours 2,000 2,900 Batches 405 405 Number of inspections 485 330 Machine hours 2,280 5,400 Setups 40 40 Rework orders 130 100 Purchase orders 350 175 Required:1. Using a plantwide overhead rate based on machine hours, compute the overhead cost per unit for each product line.2. Determine the total cost per unit for each products line if the direct labor and direct materials costs per unit are $200 for Model 145 and $130 for Model 212.Overhead Assigned Activity Driver Plantwide OH rate Total Overhead Cost Units Produced OH Cost per unitModel 145 Model 212 Model 145 Model 212 3. Assume if the market price for Model 145 is $732 and the market price for Model 212 is $490, determine the profit or loss per unit for each model. Model 145 Model 212 Market price
Answer:
Way Cool:
1. Overhead cost per unit for each product line:
Model 145 Model 212
Machine hours 2,280 5,400
Numbers of units 1,600 3,200
Total costs $498,441.25 $1,180,518.75
Overhead cost
per unit $311.53 $368.91
2. Total cost per unit if the direct labor and direct materials costs per unit are $200 for Model 145 and $130 for Model 212
Model 145 Model 212
Overhead cost
per unit $311.53 $368.91
Direct material &
labor cost per unit $200.00 $130.00
Total cost per unit $511.53 $498.91
3. Determination of profit or loss per unit if market price for Model 145 is $732 and $490 for Model 212:
Model 145 Model 212
Sales price $732.00 $490.00
Cost of sales $511.53 $498.91
Profit (Loss) per unit $220.47 ($8.91)
Explanation:
a) Data and Calculations:
Process Activity Overhead Driver Quantity Plant Wide Rate
Components C/over 459,500 No. of batches 810 $567.28
Machining 301,600 M. hours 7,680 $39.27
Setups 227,500 No. of setups 80 $2,843.75
Sub-Total $988,600
Finishing welding 180,500 Welding hours 4,900 $36.84
Inspecting 222,000 Number of
inspections 815 $272.39
Rework 60,700 Rework orders 230 $263.91
Sub-Total $463,200
Support Purchasing 135,500 Purch. orders 525 $258.10
Providing space 31,550 No. of units 4,800 $6.57
Providing utilities 60,110 No. of units 4,800 $12.52
Sub-Total $ 227,160
Total overhead $1,678,960
Additional production information concerning its two product lines follows.
Model 145 Model 212 Total
Units produced 1,600 3,200 4,800
Welding hours 2,000 2,900 4,900
Batches 405 405 810
Number of inspections 485 330 815
Machine hours 2,280 5,400 7,680
Setups 40 40 80
Rework orders 130 100 230
Purchase orders 350 175 525
b) Calculation of Plantwide overhead rate based on machine hours:
Total overhead costs/machine hours = $1,678,960/7,680
= $218.6146 per machine hour
c) Activity Based Costing system is a system that accumulates and allocates production or service costs based on the activities undertaken for the production or service. The activities are regarded as the cost drivers and therefore better bases for accumulating and allocating costs.
Globalization is supposed to provide diversification benefits that domestic sectors in US can not. Find three examples where foreign events led to major set-backs in US stock markets and Discuss why those events affected the US markets.
Answer:
Three examples of situations in which events abroad, due to globalization, affected the stock markets in the United States were:
-The confrontation between Saudi Arabia and Russia over the price of oil, started on March 8, 2020, caused the price of said good to drop by 35% and the shares of major companies in that market such as Exxon Mobil, Chevron or Shell fell in the same proportion.
-The emergence of the coronavirus as a global pandemic in China and Europe generated the speculation of many investors, who began to invest in pharmaceuticals such as Pfizer, Glaxo or Abbott, increasing the value of their shares.
-Brexit, by which the United Kingdom has separated from the European Union, the second largest economy in the world and whose main external partner is the United States, has caused a drop in European markets that has indirectly affected the American stock markets, by involve abrupt movement of the shares of major European companies such as Shell or Volkswagen in American stock exchanges.
Managers in international businesses will need to evaluate the attractiveness of a country as a market or location for a facility or investment. Knowing how to think about events and situations will help the manager make that evaluation.
Managers can use economic and socioeconomic indicators to evaluate potential locations to conduct business
Mathc the Economic indicator to the relevant dimensions.
a. Income distribution
b. Unit labor costs
c. Private consumption
d. Age distribution
e. Gross national income (GNI)
f. Economic growth rate
g. Total population
1. Absolute size of an economy
2. Speed of economic growth
3. How a nation's income is apportioned
4. Purchase of essential vs, nonessential goods
5. Cost of production
6. Potential market size
7. Potential market segments
Answer:
1. Absolute size of an economy
e. Gross national income (GNI)
2. Speed of economic growth
f. Economic growth rate
3. How a nation's income is apportioned
a. Income distribution
4. Purchase of essential vs, nonessential goods
c. Private consumption
5. Cost of production
b. Unit labor costs
6. Potential market size
g. Total population
7. Potential market segments
d. Age distribution
Explanation:
Any entity that wishes to exploit foreign markets must of necessity determine the suitability of the country's market and its economy. To achieve this aim, entities engaging in foreign direct investments consider some factors. One of them is the country's attractiveness. A country is attractive or not depending on the following elements, among others: market size, growth of market size, per capita income, population and age distribution, existence and enforcement of contract laws, and political openness. These considerations are important to avoid regrets, including over-exposure to country risks.
Orwell building supplies' last dividend was $1.75. Its dividend growth rate is expected to be constant at 34.00% for 2 years, after which dividends are expected to grow at a rate of 6% forever. Its required return (rs) is 12%. What is the best estimate of the current stock price? Select the correct answer. a. $49.93 b. $49.39 c. $48.85 d. $47.77 e. $48.31
Answer:
Price of the stock today = $48.85 and option c is the correct answer.
Explanation:
The current price of the stock can be computed using the two stage dividend growth model of the DDM approach. The DDM or dividend discount model values a stock based on the present value of the expected future dividends from the stock.
The formula for the price of the stock today using the two stage growth model is attached.
Price of the stock today = 1.75 * (1+0.34) / (1+0.12) + 1.75 * (1+0.34)^2 / (1+0.12)^2 + [ (1.75 * (1+0.34)^2 * (1+0.06)) / (0.12 - 0.06) ] / (1+0.12)^2
Price of the stock today = $48.85
Control is the mechanism for making sure the other three managerial functions--planning, organizing, and leadership--are operating smoothly.
A. True
B. False
Answer:
True.
Explanation:
Control is the mechanism for making sure the other three managerial functions such as planning, organizing, and leadership are operating smoothly.
Control is basically one of the key functions of the management in an organization and as such it is an essential goal-oriented function of managers or supervisors or the top executives working in an organization.
Generally, it is a management strategy that is being used to set predetermined standards and checking for compliance or accuracy among employees with these standards and requirements. Also, if the standards aren't followed by the employees, control is used to detect the errors and eventually to take corrective actions so as to achieve organizational goals, objectives, mission and vision.
Hence, the purpose of control by management is to minimize deviation from standards by the employees working in an organization and to ensure that their actions or activities are in tandem with the stated goals of an organization. Also, if an organization wishes to attain greater heights, remain competitive or have a competitive advantage over industry rivals it is very important that it's managers use control effectively.
In a nutshell, control is a strategic function that regulates, guides and protects the activities of an organization.
The difference between actual hours times the actual pay rate and actual hours times the standard pay rate is the labor _________________ variance.
Answer:
"Labor price variance " is the correct choice.
Explanation:
The variation throughout the labor rate represents the distance between real as well as anticipated labor costs. These were measured by taking the difference, based upon the number of additional hourly wages, between some of the real labor amount charged as well as the minimum amount.Absolute variation in the labor rate is equivalent to absolute variation in the price of the commodity.The celebration of key accomplishments by chest bumps and the push-up contests reflected what level of organizational culture at Uber during former CEO Kalanick’s tenure?
A. observable artifacts
B. hierarchy
C. enacted values
D. espoused values
Answer:
Uber's Organizational Culture during former CEO Kalanick's tenure:
A. observable artifacts
Explanation:
Observable artifacts are the visible cultural manifestations prevalent in an organization, through which the organization's culture is expressed in tangible terms. A culture of casualness will become visible in the dress code and how people address one another by first names or surnames. Even the way products are displayed and offices are furnished reflect observable artifacts of an organization's deeper culture of acceptance and openness.
Which one of the following is not a factor that influences a business's control environment? a. personnel policies b. management's philosophy and operating style c. organizational structure d. proofs and security measures
Answer:
d. Proofs and security measures.
Explanation:
A business control environment are those policies and procedures that assist management in directing the business operations towards achieving it's goals. The aim is to protect the company's assets from misuse by member of staff and also ensure that the business information is accurate and up to date.
Top management create a business control environment to ensure that the policies and procedures guiding each business units are adhered to by members of staff. A business control environment otherwise known as internal control is influenced by it's personnel policies, Management's philosophy and operating style and also it's organizational structure.
Which of the following is not considered a legitimate expense of a partnership? a Interest paid to partners based on the amount of invested capital. b Depreciation on assets contributed to the partnership by partners. c Salaries for management hired to run the business d Supplies used in the partners' offices.
Answer:
a Interest paid to partners based on the amount of invested capital.
Explanation:
A partnership is formed between two parties that agree to go into a venture for mutual gain. The parties share ownership of the business entity and as such are entitled to profit from their equity holdings.
Interest paid based on invested capital is considered a distribution of profit by the business and not an expense. This is similar to sharing profit to shareholders in a company.
Legitimate expenses include: cost of sales, staff cost, administrative costs, advertising costs, and professional expenses like hiring an accountant.
Out of all the options listed, the one that is not considered a legitimate expense in a partnership is a. Interest paid to partners based on the amount of invested capital.
Some legitimate expenses in a partnership are:
Asset depreciation in the business Supplies used by the partners Salaries paid to management staffInterest on invested capital is not considered an expense and is only realized after the calculation of profit.
In conclusion, interest on partnership capital is not an expense.
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