Answer:
Materials quantity variance = $2,350 F
Explanation:
Given:
Standard quantity = 3.7 kilos per unit
Standard price = $5 per kilo
Unit produced = 6,300
Total material = 23,780
Computation:
Materials quantity variance = (Actual quantity × Standard price) - (Standard quantity × Standard price)
Materials quantity variance = (23,780 × $) - (6,300 × 3.7 × $5)
Materials quantity variance = $118,900 - $116,550
Materials quantity variance = $2,350 F
Gasoline is considered a final good if it is sold by a a. gasoline station to a bus company that operates a bus route between San Francisco and Los Angeles. b. pipeline operator to a gasoline station in San Francisco. c. gasoline station to a motorist in Los Angeles. d. All of the above are correct.
Answer:
c. gasoline station to a motorist in Los Angeles.
Explanation:
A final good is a good that is used by the consumer to satisfy current wants and it is not used to produce another good.
Gasoline would be used by the fuel station in San Francisco to generate cash by selling it. So it is not a final good.
The bus company uses the fuel as an input needed to generate cash. It is not a final good to the bus company.
I hope my answer helps you
At the beginning of the month, Arthur's Olde Consulting Corporation had two jobs in process that had the following costs assigned from previous months:
Job Number Direct Labor Applied Overhead
SY-400 $ 23,790 ?
SY-403 15,870 ?
During the month, Jobs SY-400 and SY-403 were completed but not billed to customers. The completion costs for SY-400 required $26,700 in direct labor. For SY-403, $79,500 in labor was used.
During the month, the only new job, SY-404, was started but not finished. Total direct labor costs for all jobs amounted to $150,570 for the month. Overhead in this company refers to the cost of work that is not directly traced to particular jobs, including copying, printing, and travel costs to meet with clients. Overhead is applied at a rate of 70 percent of direct labor costs for this and previous periods. Actual overhead for the month was $107,600.
Required:
(a) What are the costs of Jobs SY-400 and SY-403 at the beginning of the month and when completed?
(b) What is the cost of Job SY-404 at the end of the month?
(c) How much was under- or overapplied service overhead for the month?
Answer:
Cost at the beginning:
Cost of SY-400 $40,443.00
Cost SY-403 $ 26,979.00
Cost at month end:
Cost of SY-400 $85,833.00
Cost of SY-403 $162,129.00
Cost of SY-404 $75429
Overhead was under-applied by $2,201.00
Explanation:
At the beginning of the month costs of jobs SY-400 and SY-403 are the direct labor costs incurred already plus 70% of the direct labor cost as overhead applied:
Cost of SY-400=$23,790+($23,790*70%)=$40,443.00
Cost SY-403=$15,870+($15,870*70%) =$ 26,979.00
Costs at the end of the month would be cost at the beginning plus new direct labor cost incurred as well as the overhead on the new direct labor cost:
Cost of SY-400=$40,443.00+$26,700+($26,700*70%)=$85,833.00
Cost of SY-403=$ 26,979.00+$79500+(70%*$79500)=$162,129.00
Direct labor cost of SY-404=$150,570- $26,700-$79,500=$44370
Cost of SY-404=$44370+(70%*$44370)=$75429
Actual overhead is $107,600
Overhead applied=(70%*$44370)+(70%*$79500)+($26,700*70%)=$105,399.00
Under-applied overhead=$107,600-$105,399=$2,201.00
a) The cost of Jobs SY-400 and SY-403 at the beginning of the month and on completion are:
SY-400 SY=403
Beginning costs $40,443 $26,979
Total costs $85,833 $162,129
b) The cost of Job SY-404 at the end of the month is $75,429.
c) The Service Overhead for the month was underapplied by $2,201.
Data and Calculations:
Job Number Direct Labor Applied Overhead Total Costs
SY-400 $ 23,790 ? = $16,653 ($23,790 x 70%) $40,443
SY-403 15,870 ? = $11,109 ($15,870 x 70%) $26,979
SY-400 SY=403 SY404 Total Costs
Beginning costs $40,443 $26,979 $0 $67,422
Direct labor 26,700 79,500 $44,370 $150,570
Overhead applied 18,690 55,650 31,059 105,399
Total costs $85,833 $162,129 $75,429 $323,391
Overhead applied = $105,399
Actual overhead $107,600
Underapplied o/h = $2,201
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Shanghai Company sells glasses, fine china, and everyday dinnerware. It uses activity-based costing to determine the cost of the shipping and handling activity. The shipping and handling activity has an activity rate of $12 per pound. A box of glasses weighs 2 pounds, a box of fine china weighs 4 pounds, and a box of everyday dinnerware weighs 6 pounds. a Determine the shipping and handling activity cost to be allocated to each unit of product. Glasses $ Fine China $ Everyday dinnerware $ b Determine the total shipping and receiving costs to be allocated to the fine china if 3,100 boxes are shipped.
Answer:
a) Shipping and handling cost of each product:
Glasses = $ 24, China = $ 48, Everyday dinnerware = $ 72
b) Total shipping and receiving costs of 3,500 boxes of fine China is $148,800
Explanation:
a) Shipping and handling cost of each product:
Glasses = Weighs × Activity rate per lbs = 2 lbs × $ 12 = $ 24
China = Weighs × Activity rate per lbs = 4 lbs × $ 12 = $ 48
Everyday dinnerware = Weighs × Activity rate per lbs = 6 lbs × $ 12 = $ 72
b) Total shipping and receiving costs of 3,100 boxes of fine China
= 3100 boxes × Shipping and receiving cost each product
= 3100 × 48
= $ 148,800
The following information ($ in millions) comes from a recent annual report of Amazon, Inc.:
Net sales $10,722
Total assets 4,417
End of year balance in cash 1,104
Total stockholders' equity 503
Gross profit (Sales - Cost of Sales). 2,458
Net increase in cash for the year 19
Operating expenses 2,062
Net operating cash flow 772
Other income (expense), net (30)
a. Compute Amazon's balance in cash at the beginning of the year.b. Compute Amazon's total liabilities at the end of the year.c. Compute cost of goods sold for the year.d. Compute the income before income tax for Amazon.
Answer:
(a) Amazon's balance in cash at the beginning of the year is $1,085 million
(b) Amazon's total liabilities at the end of the year is $3,914 million
(c) Cost of goods sold for the year is $8,264 million
(d) Income before income tax for Amazon is $366 million
Explanation:
(a) Beginning cash balance = Ending cash balance - net increase in cash for the year
= $1,104 million - $19 million
= $1,085 million
(b) Total assets = Total liabilities + Total stockholders' equity
$4,417 million = Total liabilities + $503 million
Total liabilities = ($4,417 - $503) million
= $3,914 million
(c) Cost of goods sold = net sales - gross profit
= $10,722 million - $2,458 million
= $8,264 million
(d) Income before income tax = Gross profit - operating expenses - other expenses
= $2,458 million - $2,062 million - $30 million
= $ 366 million
Gauge Construction Company is making adjusting entries for the year ended March 31 of the current year. In developing information for the adjusting entries, the accountant learned the following: The company paid $3,900 on January 1 of the current year to have advertisements placed in the local monthly neighborhood paper. The ads were to be run from January through June. The bookkeeper debited the full amount to Prepaid Advertising on January 1. At March 31 of the current year, the following data relating to Construction Equipment were obtained from the records and supporting documents. Construction equipment (at cost) $ 550,000 Accumulated depreciation (through March 31 of the prior year) 148,800 Estimated annual depreciation for using the equipment 42,400 Required:
1. Record the adjusting entry for advertisements at March 31 of the current year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
2. Record the adjusting entry for the use of construction equipment during of the current year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
3. What amount should be reported on the current year's income statement for Advertising Expense? For Depreciation Expense?
4. What amount should be reported on the current year's balance sheet for Prepaid Advertising? For Construction Equipment (at net book value)?
Answer:
1. Record the adjusting entry for advertisements at March 31 of the current year.
advertisement expense per month = $3,900 / 6 months = $650
$650 x 3 months = $1,950
Dr Advertising expense 1,950
Cr Prepaid advertising 1,950
2. Record the adjusting entry for the use of construction equipment during of the current year.
Dr Depreciation expense 42,400
Cr Accumulated depreciation - equipment 42,400
3. What amount should be reported on the current year's income statement for Advertising Expense?
$1,950
For Depreciation Expense?
$42,400
4. What amount should be reported on the current year's balance sheet for Prepaid Advertising?
$1,950 (= $3,900 - $1,950)
For Construction Equipment (at net book value)?
$358,800 (= $550,000 - $191,200)
Explanation:
Accrual accounting principle states that both revenues and expenses must be recognized during the periods that they effectively occur. They are not necessarily recorded during the periods in which they were collected or paid for.
1. The adjusting entry for advertisements at March 31 of the current year
Gauge Construction Company journal entry
1. March 31
Dr Advertising expense $1,950
Cr Prepaid advertising $1,950
($3,900×3/6)
(To record Advertising expense)
2. The adjusting entry for the use of construction equipment during of the current year.
Gauge Construction Company journal entry
Dr Depreciation expense $42,400
Cr Accumulated depreciation - equipment $42,400
(To record equipment expense)
3. The amount that should be reported on the current year's income statement for Advertising Expense and Depreciation Expense.
Advertising Expense=$3,900×3/6
Advertising Expense=$1,950
Depreciation Expense=$42,400
4. The amount that should be reported on the current year's balance sheet for Prepaid Advertising and Construction Equipment.
Prepaid Advertising=$3,900-($3,900×3/6)
Prepaid Advertising=$3,900-$1,950
Prepaid Advertising=$1,950
Construction Equipment=$550,000-($148,800+$42,400)
Construction Equipment=$550,000-$191,200
Construction Equipment=$358,800
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In a closed system one kilogram of carbon dioxide (CO_2) is expanded reversibly from 30 degree C and 200 kPa to 100 kPa pressure. If the expansion is polytropic with n = 1.27, determine the total work, the change in total internal energy, and the total heat transferred in [kJ], Note that for CO_2, R = 188.9 J/kg.K and c_v = 655 J/kg.K. W = -29.05 kJ, DeltaU = -27.19 kJ, Q = 1.860 kJ
Answer:
the total work W = 29.05 kJ
the change in total internal energy is [tex]\mathbf{\Delta U = - 27.19 \ kJ}[/tex]
the total heat transferred in [kJ] is Q = 1.860 kJ
Explanation:
Given that
mass of carbon dioxide in the closed system = 1 kg
Temperature [tex]T_1= 30 ^0 C[/tex] = (273+30 ) K = 303 K
Pressure [tex]P_1 = \ 200 \ kPa[/tex]
Pressure [tex]P_2 = 100 \ kPa[/tex]
polytropic expansion n = 1.27
Note that we are also given the following data set:
R = 188.9 J/kg.K
c_v = 655 J/kg.K
So; for a polytropic process ; [tex]PV^{1.27} = c[/tex]
[tex]\dfrac{T_2}{T_1}= ( \dfrac{V_1}{V_2})^{n-1} = (\dfrac{P_2}{P_1})^{\frac{n-1}{n}[/tex]
[tex]T_2 = T_1 [\dfrac{P_2}{P_1}]^{\frac{n-1}{n}[/tex]
[tex]T_2 = 303 [\dfrac{100}{200}]^{\frac{1.27-1}{1.27}[/tex]
[tex]T_2 = 261.48 \ K[/tex]
Since the system does not follow the first order of thermodynamics; To calculate the total work by using the expression:
[tex]W = \dfrac{P_1V_1-P_2V_2}{n-1} = \dfrac{mR(T_1-T_2)}{n-1}[/tex]
[tex]W = \dfrac{1*188.9(303-261.48)}{1.27-1}[/tex]
W = 29048.62222 J
W = 29.05 kJ
Thus, the total work W = 29.05 kJ
The change in internal energy can be expressed by the formula:
[tex]\Delta U = mc_v (T_2-T_1)[/tex]
[tex]\Delta U = 1*655(261.48-303)[/tex]
[tex]\Delta U = -27195.6 \ J[/tex]
[tex]\mathbf{\Delta U = - 27.19 \ kJ}[/tex]
Hence; the change in total internal energy is [tex]\mathbf{\Delta U = - 27.19 \ kJ}[/tex]
Finally; to determine the total heat transferred in [kJ]; we go by the expression for the first order of thermodynamics which say:
Total Heat Q = ΔU + W
Q = (-27.19 + 29.05)kJ
Q = 1.860 kJ
Hence; the total heat transferred in [kJ] is Q = 1.860 kJ
Maxxie purchased a tract of land for $24,500. Today, the same land is worth $43,800. How many years have passed if the price of the land has increased at an annual rate of 6.4 percent
Answer:
9.35 years
Explanation:
To find the numbers of years that have passed, you can use the following formula:
n = ln(FV / IV)/ln(1 + r)
n= number of periods
FV= Future value= $43,800
IV= Initial value= $24,500
r= rate= 6.4%
n=ln(43,800/24,500)/ln(1+0.064)
n= ln1.79/ln1.064
n=0.58/0.062
n= 9.35
According to this, 9.35 years have passed.
Shelby offers to make digital copies of Relay Company's business conference videotapes, CDs, DVDs, and other media for $500. Under the mailbox rule and the Uniform Electronic Transactions Act (UETA), Relay's acceptance by e-mail will be considered effective when:
a. received
b. sent
c. followed up by a confirmation letter
d. sent by regular mail
According to the condition, of the Uniform Electronic Transactions Act (UETA), Relay's acceptance by e-mail will be considered effective when sent. Thus, the correct option is (B).
You can create, transmit, and receive information rapidly, and the users of your account may access information quickly, frequently mass-texting a large number of individuals at once.
The process of sending an email is immediate, but the writer should not anticipate an instant response.
Many people only manage their email during regular work hours since it is an essential component of their profession.
Therefore, the correct option is "B".
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If Home Depot was correct in that it was not discriminating, but simply filling positions consistent with those who applied for them (and very few women were applying for customer service positions), given your reading of this chapter, was the firm guilty of discrimination? If so, under what theory?
Answer:
Yes and the theory is stereotyping
Explanation:
In a workplace women are subjected to gender stereotyping.
Stereotyping is when there is a wrong belief or idea about people based on they look on the outside.
Most times this is a wrong belief or partially true. It is a form of prejudice because how the person is on the outside is not a true definition of who they are.
In this scenario women are made to feel they were not on the same level as male counterparts during promotions, hiring, and payment.
This prejudice was explained by home Depot to be based on experience. They said most women had experience as cashiers so the could only fill roles like cashier, customer care, and clerk
The total value (debt plus equity) of Wilson Dover Inc. is $500 million and the face value of its 1-year coupon debt is $200 million. The volatility (σ) of Wilson Dover's total value is 0.60, and the risk-free rate is 5%. Assume that N(d1) = 0.9720 and N(d2) = 0.9050. Refer to the data for Wilson Dover Inc. What is the yield on Wilson Dover's debt?
Answer:
The yield on Wilson Dover's debt is 7.42%
Explanation:
In order to calculate the yield on Wilson Dover's debt we would have to calculate first the value of debt as follows:
value of debt=Total value*N(d1)-Debt*e∧-r fx period*N(d2)
value of debt=$500 million*0.9720-$200 million*2.7183∧-0.05*1*0.9050
value of debt=$486 million-$200 million*0.951229*0.9050
value of debt=$486 million-$172.1724 million
value of debt=$313.8276 million
=Total Value-Value of debt
=$186.17 million
The value of debt is $186.17 million
So, to calculate the yield we have to use the following formula:
Yield=(Face Value/current value)∧1/period-1
Yield=($200 million/$186.17 million)∧1-1
Yield=1.074286942-1
Yield=7.42%
The yield on Wilson Dover's debt is 7.42%
Hatfield Corporation, which has only one product, has provided the following data concerning its most recent month of operations:Selling price $123Units in beginning inventory 0Units produced 6,400Units sold 6,100Units in ending inventory 300Variable costs per unit: Direct materials $45 Direct labor $30 Variable manufacturing overhead $1 Variable selling and administrative $8Fixed costs: Fixed manufacturing overhead $140,800Fixed selling and administrative $91,500What is the net operating income for the month under variable costing?a) $12,200b) ($17,200)c) $5,600d) $6,600
Answer:
Instructions are below.
Explanation:
Giving the following information:
Selling price= $123
Units sold= 6,100
Variable costs per unit:
Direct materials $45
Direct labor $30
Variable manufacturing overhead $1
Variable selling and administrative $8
Fixed costs:
Fixed manufacturing overhead $140,800
Fixed selling and administrative $91,500
First, we need to calculate the total variable cost per unit:
Variable cost per unit= 45 + 30 + 1 + 8= $84
Income statement:
Sales= 6,100*123= 750,300
Total variable cost= 6,100*84= (512,400)
Contribution margin= 237,900
Fixed manufacturing overhead= (140,800)
Fixed selling and administrative= (91,500)
Net operating income= 5,600
Kinds of managers
An example of a position that a team leader would hold is:_______
a. vice president.
b. department manager.
c. group facilitator.
d. divisional manager
Using your knowledge of the different levels of management in organizations, indicate whether each statement is most likely to apply to first-level, middle-level, or top-level managers.
Answer:
Option C
group facilitator.
Explanation:
A team leader would most likely be a group facilitator. This is because a team is usually a small unit assigned with the task of achieving a specific goal. Most of the time, teams are given small and well defined tasks which are not usually as complex as that of the whole organization.
A team leader would be a group facilitator because he is expected to coordinate the efforts of a small group of people to achieve a set goal. His scope of authority and influence is only limited to that of the group.
Magpie Corporation uses the total cost method of product pricing. Below is cost information for the production and sale of 60,000 units of its sole product. Magpie desires a profit equal to a 25% return on invested assets of $700,000. Fixed factory overhead cost $38,700 Fixed selling and administrative costs 7,500 Variable direct materials cost per unit 4.60 Variable direct labor cost per unit 1.88 Variable factory overhead cost per unit 1.13 Variable selling and administrative cost per unit 4.50 The markup percentage on total cost for Magpie's product is
Answer:
Mark-up =22.64%
Explanation:
Profit = Return on Investment (%) × assets\
Profit = 25% × 700,000 = 175,000
Total variable cost = (4.60+ 1.88+ 1.13+ 4.50 )× 60,000= 726600
Total cost = Total variable cost + total fixed cost
= 726600 + 38,700+ 7,500= 772800
Mark-up = profit/cost × 100
= 175,000/726,600 × 100 = 22.64%
Mark-up =22.64%
Ida Sidha Karya Company is a family-owned company located in the village of Gianyar on the island of Bali in Indonesia. The company produces a handcrafted Balinese musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $880. Selected data for the company’s operations last year follow:Units in beginning inventory 0Units produced 280Units sold 240Units in ending inventory 40Variable costs per unit: Direct materials $ 115 Direct labor $ 335 Variable manufacturing overhead $ 35 Variable selling and administrative $ 25 Fixed costs: Fixed manufacturing overhead $ 63,000 Fixed selling and administrative $ 23,000 The absorption costing income statement prepared by the company’s accountant for last year appears below:Sales $ 211,200Cost of goods sold 170,400Gross margin 40,800Selling and administrative expense 29,000Net operating income $ 11,800Required:Determine how much of the ending inventory consists of fixed manufacturing overhead cost deferred in inventory to the next period.
Answer:
Fixed manufacturing cost allocated to inventory= $9,000
Explanation:
Giving the following information:
Units in beginning inventory 0
Units produced 280
Units sold 240
Units in ending inventory 40
Fixed manufacturing overhead $63,000
The absorption costing method includes all costs related to production, both fixed and variable.
First, we need to calculate the unitary fixed manufacturing cost:
unitary fixed manufacturing cost= 63,000/280= $225
Fixed manufacturing cost allocated to inventory= 40*225=$9,000
Consider each of the following independent scenarios:a.Terrin Belson, plant manager for the laser printer factory of Compugear Inc., brushed his hair back and sighed. December had been a bad month. Two machines had broken down, and some factory production workers (all on salary) were idled for part of the month. Materials prices increased, and insurance premiums on the factory increased. No way out of it; costs were going up. He hoped that the marketing vice president would be able to push through some price increases, but that really wasn’t his department.b. Joanna Pauly was delighted to see that her ROI figures had increased for the third straight year. She was sure that her campaign to lower costs and use machinery more efficiently (enabling her factories to sell several older machines) was the reason why. Joanna planned to take full credit for the improvements at her semiannual performance review.c. Gil Rodriguez, sales manager for ComputerWorks, was not pleased with a memo from headquarters detailing the recent cost increases for the laser printer line. Headquarters suggested raising prices. "Great," thought Gil, "an increase in price will kill sales and revenue will go down. Why can’t the plant shape up and cut costs like every other company in America is doing? Why turn this into my problem?"d. Susan Whitehorse looked at the quarterly profit and loss statement with disgust. Revenue was down, and cost was up—what a combination! Then she had an idea. If she cut back on maintenance of equipment and let a product engineer go, expenses would decrease—perhaps enough to reverse the trend in income.e. Shonna Lowry had just been hired to improve the fortunes of the Southern Division of ABC Inc. She met with top staff and hammered out a 3-year plan to improve the situation. A centerpiece of the plan is the retiring of obsolete equipment and the purchasing of state-of-the-art, computer-assisted machinery. The new machinery would take time for the workers to learn to use, but once that was done, waste would be virtually eliminated.Required:For each of the above independent scenarios, indicate the type of responsibility center involved (cost, revenue, profit, or investment).
Answer: a. Cost center b. Investment center. c. Revenue center d. Profit center. d. Investment center.
Explanation:
a. Cost center
We are informed that Terrin Belson, a plant manager for the laser printer factory of Compugear Inc., complained that two machines had broken down, and some factory production workers were idled for part of the month. He also complained that materials prices has and insurance premiums on the factory has increased and costs were going up.
The responsibility center involved here is the cost center. Everything he was complaining about was with regards to the rise on costs of running the company. Therefore, the cost center should be in charge.
b. Investment center
We are told that Joanna Pauly was delighted to see that her ROI figures had increased for the third straight year as she was sure that her campaign to lower costs and efficiently use of machinery was the reason for this.
This is the responsibility of the investment center. We can see that Joanna is talking about the increase in the return on investment. Therefore, the investment center should be responsible to handle this.
c. Revenue center
From the information, we are told that Gil Rodriguez, sales manager for ComputerWorks, was not pleased with a memo from headquarters detailing recent cost increases for the laser printer line. The headquarters suggested that increase in prices will kill sales and that the revenue will go down.
The responsibility center involved in this situation is the revenue center. We can see that the headquarters was concerned that the increase will in price will affect revenue as the revenue will reduce. This is the revenue center in charge.
d. Profit center
We are told that Susan Whitehorse looked at the quarterly profit and loss statement with disgust as the revenue was down, and the cost was up. The responsibility center in charge here is the profit center as the main issue of discussion is about the profit and loss of the company.
e. Investment center
We are told that Shonna Lowry had just been hired to improve the fortunes of the Southern Division of ABC Inc. and that after meeting with top staff, she gave out a 3-year plan to improve the situation as obsolete equipment will be retired and the state-of-the-art, computer-assisted machinery will be bought.
This is an investment because she told the firm to buy state-of-the-art, computer-assisted machinery will be bought in order to improve their fortunes. The responsibility center involved is the investment center.
The perfectly competitive firm's short-run supply curve is the Group of answer choices upward-sloping portion of its average total cost curve. horizontal portion of its marginal revenue curve. portion of its average variable cost curve that lies above the average fixed cost curve. upward-sloping portion of its marginal cost curve. portion of its marginal cost curve that lies above its average variable cost curve. Next
Answer:
Portion of its marginal cost curve that lies above its average variable cost curve.
Explanation:
This is explained to be the portion of its marginal cost curve because marginal gross benefits exceeds marginal cost, the firm can earn greater profits by increasing its output.
These profits are been maximized by choosing to supply the level of output where its marginal revenue equals its marginal cost. When this revenue is below the said marginal cost, money is lost, and consequently, it must reduce its output. Profits are however utilized when the firm chooses the level of output where its marginal revenue equals its marginal cost.
Consider the following 2011 data for Newark General Hospital (in millions of dollars):__________.
Static Flexible Actual
Budget Budget Results
Revenues $4.7 $4.8 $4.5
Costs 4.1 4.1 4.2
Profits 0.6 0.7 0.3
Calculate and interpret the profit variance.
=Actual profit-Static profit
=$0.3-$0.6
=-$0.3
There is an unfavorable profit variance which means that the company earned less that it prepared for.
Calculate and interpret the revenue variance.
=Actual revenues-Static Revenues
=$4.5-$4.7
=-$0.2
There is an unfavorable revenue variance, because the company sold less than it planned for.
Calculate and interpret the cost variance.
=Static Cost-Actual Cost
=4.1-4.2
=-$0.1
There is an unfavorable cost variance, this means that the company spent more than it planned for.
Calculate and interpret the volume and price variances on the revenue side.
Volume variance=Flexible Revenue-Static Revenue
=$4.8-$4.7=$0.1
Favorable because the company sold more units than it planned for.
Price variance=Actual Revenues-Flexible Revenues
=$4.5-$4.8=-$0.3
The answer is unfavorable because the company sold it products at a lower price than plan which might have actually resulted to the increase in actual volume sold.
Calculate and interpret the volume and management variances on the cost side.
Volume variance=Static cost –Actual Cost
=$4.1-$4.1=$0
Favorable which means that regardless of the fact that the company sold more units, the company produce the same number of units it plan for.
Management variance=Flexible Cost –Actual Costs
=$4.1-$4.2=$0.1
This is unfavorable which means maybe as a result of the higher units sold, the company had to spend more in servicing these units resulting to cost inefficiency for the period.
How are the variances calculated above related?
The above variances are associated, as the increase in volume, should increase the revenue and cost proportionality. However, it has not increased in the same portion. Therefore, there are unfavorable variances.
Answer:
Calculate and interpret the profit variance.
profit variance = actual profit - budgeted profit = $0.3 - $0.7 = -$0.4 U
The profit variance is unfavorable because actual profit was lower than the budgeted profit. Whenever we have a static and a flexible budget, we must use the flexible budget to calculate the variances. Not only revenues were lower than expected, but also costs were higher than expected.
Calculate and interpret the revenue variance.
revenue variance = actual revenue - budgeted revenue = $4.5 - $4,8 = -$0.3 U
The revenue variance is unfavorable because revenue was lower than expected. This means that they either had less patients or charged less per patient.
Calculate and interpret the cost variance.
cost variance = actual costs - budgeted costs = $4.2 - $4,1 = $0.1 U
When we analyze costs variances, positive numbers represent unfavorable variances because actual costs were larger than budgeted. It is the opposite to what happens with revenue and profit variances.
In this case, actual costs were larger than expected, which means that the hospital spent more money than budgeted.
Calculate and interpret the volume and price variances on the revenue side.
volume variance = flexible revenue - static revenue = $4.8 - $4.7 = $0.1 F
the flexible budget shows higher numbers because the number of patients was higher than expected.
price variance = actual revenue - flexible revenue = $4.5 - $4.8 = -$0.3 U
even though the volume variance was favorable, more patients, the price charged was lower than expected because total revenue was lower than the flexible revenue.
Calculate and interpret the volume and management variances on the cost side.
volume variance (cost) = actual costs - budgeted costs = $4.2 - $4.1 = $0.1 U
When cost variances are positive, they are unfavorable because expenses were higher than expected. This means that the hospital spent more money than they had planned for carrying out the same amount of procedures.
management variance = actual costs - budgeted costs = $4.2 - $4.1 = $0.1 U
Since costs were higher than expected, this means that the hospital's management didn't perform properly. In this case, all variances show that management didn't work well. Revenues were lower than expected, costs were higher than expected and profits were lower. They should be glad that this is just a question, in real life they would be in serious problems for poor performance.
Explanation:
Static Flexible Actual
Budget Budget Results
Revenues $4.7 $4.8 $4.5
Costs $4.1 $4.1 $4.2
Profits $0.6 $0.7 $0.3
You purchase both potatoes and gasoline regularly. Your income decreases, and you purchase less gasoline. This means that: Gasoline is a normal good. Potatoes are inferior goods. Gasoline has a negative substitution effect. Gasoline is an inferior good.
Answer:
Gasoline is a normal good
Explanation:
Normal goods are goods that are goods whose demand increases when income increases and falls when income falls
Inferior goods are goods whose demand falls when income rises and increases when income falls.
Because the demand for gasoline falls when income falls, gasoline is a normal good.
I hope my answer helps you
Spin Cycle Architecture uses three activity pools to apply overhead to its projects. Each activity has a cost driver used to allocate the overhead costs to the projects. The activities and related overhead costs are as follows: initial concept formation $52,960; design $420,000; and construction oversight $118,650. The cost drivers and estimated use are as follows.
Activities Cost Drivers Estimated Use of Cost Drivers per Activity
Initial concept formation Number of project changes 16
Design Square feet 140,000
Construction oversight Number of months 105
Required:
a. Compute the predetermined overhead rate for each activity.
b. Classify each of these activities as unit-level, batch-level, product-level, or facility-level.
Answer:
a. predetermined overhead rate for each activity
initial concept formation = $3,310 per Project Change
design = $3 per Square feet
construction oversight = $1,130 per Month
b. Classification
unit-level activities :
design
batch level activities :
initial concept formation
Product level activities :
design
Facility level activities :
initial concept formation
construction oversight
Explanation:
This question requires application of Activity Based Costing (ABC) method of allocating overheads.
For each overhead a rate is determined as follows :
initial concept formation
Predetermined overhead rate = Overhead Cost / Number of Project Changes
= $52,960/ 16
= $3,310 per Project Change
design
Predetermined overhead rate = Overhead Cost / Square feet
= $420,000/ 140,000
= $3 per Square feet
construction oversight
Predetermined overhead rate = Overhead Cost / Number of Months
= $118,650/ 105
= $1,130 per Month
Classification
The way the activity is to be absorbed in costing determine its classification
Gretchen has just started as a fashion marketing intern for an up-and-coming design firm. When she came in, she was asked to work on a project identifying important events where celebrities might wear the fashions. She soon realized that this activity was part of _____________, directly related to marketing.
Answer:
A push-pull strategy
Explanation:
The Push strategy is an aspect of marketing where the marketer aims at taking his products directly to a target audience. This is done so as to stimulate the interest of the consumer in that particular product. Developing brands tend to employ this strategy to showcase themselves to the consumer in hopes of getting them attracted to their products. This is the strategy which the up-and-coming design firm is trying to employ when they seek to identify important events where celebrities might wear the fashions. They engage in this activity because they want to showcase their designs to the target audience- the celebrities.
Pull strategy is the opposite of this strategy as customers are now aware of the reputation of the brand and then seek them out on their own.
The Delta Manufacturing Company has a marginal tax rate of 21 %. The last dividend paid by Delta was $2.60. The expected long-run growth rate is 4%. If investors require 11% rate of return, what is the current price of the stock (P0)?
Answer:
The stock price is 38.63
Explanation:
We use the gordon model to calculate the horizon value and with htat the value of the stock:
[tex]\frac{D_1}{r-g} = PV\\\frac{D_0(1+g)}{r-g} = PV\\[/tex]
D1 = 2.60 x 1.04 = 2.704
rate of return 11% = 0.11
grow rate = 4% = 0.04
[tex]\frac{2.704}{0.11-0.04} = PV\\[/tex]
P0 = 38.62857143
The taxes should be ignored as the gordon model do not include them in the calculations
House A has an ocean view and House B does not. In all other respects, the two houses are the same. The market price of house A is $2,800,000; the market price of house B is $2,600,000. The ocean view is therefore valued at a. $1,950,000. b. $2,700,000. c. $200,000. d. -$700,000.
Answer:
$200,000
Explanation:
The value of the ocean is the price difference between the two houses
$2,800,000 - $2,600,000 = $200,000
I hope my answer helps you
Taggart Technologies is considering issuing new common stock and using the proceeds to reduce its outstanding debt. The stock issue would have no effect on total assets, the interest rate Taggart pays, EBIT, or the tax rate. Which of the following is likely to occur if the company goes ahead with the stock issue?
a. The ROA will decline.
b. Taxable income will decrease.
c. The tax bill will increase.
d. Net income will decrease.
e. The times interest earned ratio will decrease.
Answer:
Option c. is correct
Explanation:
A stock is an investment that denotes an ownership share in a company. Purchasing a company’s stock means purchasing a small piece of that company that denotes a share.
In the given question, if the company goes ahead with the stock issue that would not affect total assets: the interest rate Taggart pays, EBIT, or the tax rate then the tax bill will increase.
Adjustment for Unearned Revenue
On June 1, 20Y2, Herbal Co. received $41,250 for the rent of land for 12 months.
Journalize the adjusting entry required for unearned rent on December 31, 20Y2.
Set up an Unearned Fees T-account. Recall that the unearned revenue account is decreased (debited) for the amount of the revenue that has been earned, and the related revenue account is increased (credited). The balance before adjustment will be the normal balance for the unearned liability account. The number given for the end of the year is to be the new balance after adjusting out the revenue earned. What amount is this difference between the pre-adjustment balance and the post-adjustment balance?
Answer:
oshe mush have been out of her head
Explanation:
0she lost her dog in the microwave
Bob Clarke Corporation has provided the following data from its activity-based costing system: Activities Estimated Overhead Cost Expected Activity Assembly $1,005,040 68,000 machine-hours Processing orders $102,500 2,000 orders Inspection $139,840 1,900 inspection-hours The company makes 450 hockey sticks a year, requiring a total of 710 machine-hours, 42 orders, and 12 inspection-hours per year. The product's direct materials cost is $36.42 per hockey stick and its direct labor cost is $30.16 per hockey stick. Required: 1. Calculate the unit product cost of one hockey stick according to the activity-based costing system (Round your final answer to two decimal places).
Answer:
Total Unit Cost= $ 96.65
Explanation:
Bob Clarke Corporation
Activities Estimated Overhead Cost Expected Activity
Assembly $1,005,040 68,000 machine-hours
Processing orders $102,500 2,000 orders
Inspection $139,840 1,900 inspection-hours
First we find the overhead rates using ABC costing method.
Overhead Rates= Estimated Overhead Cost/ Expected Activity
Assembly Rate= $1,005,040 /68,000 = $ 14.78 per machine-hours
Processing rate= $102,500 / 2,000= $ 51.25 per orders
Inspection Rate= $139,840/ 1,900= $ 73.6 per inspection-hours
Then we find the overhead costs applying the ABC Costing rates
Overhead Costs Of 450 Hockey
Assembly= 710 machine-hours, * $ 14.78= $10493.8
Processing=42 orders, *$ 51.25= $ 2152.5
Inspection= 12 inspection-hours*$ 73.6 = $ 883.2
Total Overhead Costs of 450 Hockey = $ 13529.5
Overhead Cost of One Hockey= 13529.5/450= 30.065= $ 30.07
Then the:
Product Cost
Direct materials cost is $36.42 per hockey stick
Direct labor cost is $30.16 per hockey stick
Overhead Costs is $ 30.07
Total Unit Cost= $ 96.65
Match the threats in the left column to appropriate control procedures in the right col-umn. More than one control may be applicable. Threat 1. Failing to take available purchase discounts for prompt payment Control Procedure a. Accept only deliveries for which an ap-proved purchase order exists. 2. Recording and posting errors in accounts payable 3. Paying for items not received 4. Kickbacks 5. Theft of inventory * Life-long learning opportunity: see p. xxx in preface. b. Document all transfers of inventory. c. Restrict physical access to inventory. d. File invoices by due date. e. Maintain a cash budget.
Answer: Please refer to Explanation
Explanation:
When there are no or relatively low control procedures in a company, there is a threat of financial mismanagement and misdemeanors. This is why control procedures are needed, to address this and stop the leakage of company resources.
1. Failing to take available purchase discounts for prompt payment.
d. File invoices by due date.
e. Maintain a cash budget.
Here two things can be done to control the threat. Firstly, by paying invoices during the discount period, the company can be able to take discounts on goods and services provided to it. Also by maintaining a cash budget, a company can put when a payment is due to be able to claim a discount and act accordingly.
2. Recording and posting errors in accounts payable.
Conduct an automated comparison of total change in cash to total changes in accounts payable.
Using a program to check whether the amounts in the cash account corresponds to the payments on the Accounts payable account will tell you if the amounts tally and will therefore reduce errors.
3. Paying for items not received.
Issue checks only for complete voucher packages (receiving report, supplier invoice, and purchase order).
When issuing checks, make sure that all the above mentioned reports are in order. That way you can check if the goods were delivered as well as if they were even ordered properly in the first place.
4. Kickbacks.
Require purchasing agents to disclose financial or personal interests in suppliers.
Train employees in how to properly respond to gifts or incentives offered by suppliers.
By requiring that purchase agents disclose their relationships with suppliers, you can monitor to check and see if there is a possibility of kickbacks occuring.
Also, by training employees on acceptable methods of receiving gifts, they can know when it is no longer a gift but rather a kickback.
5. Theft of inventory.
b. Document all transfers of inventory. c. Restrict physical access to inventory.
By documenting all transfers going in and out of inventory, the true inventory figure can be known from the records and then used to match with the actual inventory to see if they truly tally.
Restricting the amount of people who have access to the inventory to a few trusted people also limits the amount of people who can steal the inventory as well as making it easier to find out who did when it is done because the focus can be on a few people.
Atkinson Construction assembles residential houses. It uses a job-costing system with two direct-cost categories (direct materials and direct labor) and one indirect-cost pool (assembly support). Direct labor-hours is the allocation base for assembly support costs. In December 2016, Atkinson budgets 2017 assembly-support costs to be $8,800,000 and 2017 direct labor-hours to be 220,000.At the end of 2017, Atkinson is comparing the costs of several jobs that were started and completed in 2017.Laguna Model Mission ModelConstruction period Feb-June 2017 May-0ct 2017Direct material costs $106,550 $127,450Direct labor costs $ 36,250 $41,130Direct labor-hours 970 1,000Direct materials and direct labor are paid for on a contract basis. The costs of each are known when direct materials are used or when direct labor-hours are worked. The 2017 actual assembly-support costs were $8,400,000, and the actual direct labor-hours were 200,000.Required:1. Compute the (a) budgeted indirect-cost rate and (b) actual indirect-cost rate. Why do they differ?2. What are the job costs of the Laguna Model and the Mission Model using (a) normal costing and (b) actual costing?3. Why might Atkinson Construction prefer normal costing over actual costing?
Answer:
1. Compute the
(a) budgeted indirect-cost rate
$40 per labor hour
and (b) actual indirect-cost rate.
$42 per labor hour
Why do they differ?
Because total assembly support costs and labor hours were different.They both were actually lower than expected, but the labor hours were 9% lower while the costs were around 5% lower. That is why the actual rate increased (denominator decreased more than numerator).
2. What are the job costs of the Laguna Model and the Mission Model using (a) normal costing
Laguna Model Mission Model
assembly-support cost $38,800 $40,000
and (b) actual costing?
Laguna Model Mission Model
assembly-support cost $40,7400 $42,000
3. Why might Atkinson Construction prefer normal costing over actual costing?
The problem with actual costing is that they cannot be budgeted, you can only budget normal costing. Any business has to prepare budgets in order to control how their operations are being carried out and then they need to adjust them to the actual costs incurred.
Explanation:
Laguna Model Mission Model
Construction period Feb-June 2017 May-0ct 2017
Direct material costs $106,550 $127,450
Direct labor costs $36,250 $41,130
Direct labor-hours 970 1,000
budgeted indirect cost rate:
assembly-support costs $8,800,000
direct labor-hours 220,000
budgeted assembly-support cost per labor hour = $8,800,000 / 220,000 = $40 per hour
Laguna Model Mission Model
assembly-support cost $38,800 $40,000
actual indirect cost rate:
assembly-support costs $8,400,000
direct labor-hours 200,000
actual assembly-support cost per labor hour = $8,400,000 / 200,000 = $42 per hour
Laguna Model Mission Model
assembly-support cost $40,7400 $42,000
Valuable Incorporated's stock currently sells for $45 per share. The firm has 20 million share of common outstanding. The firm's total debt equals $600 million and its common equity equals $400 million. What is the firm's market value added
Answer:
The firm's market value added is $500,000,000
Explanation:
According to the given data we have the following:
Stock market price per share= $ 45
No of shares= 20,000,000
Therefore, Market value of equity = MPS * no of shares
$45*20,000,000= $ 900,000,000
Invested capital or common equity = $400,000,000
Therefore, in order to calculate the firm's market value added we would have to make the following calculation:
Market value added = Market value of stock - invested capital
Market value added =$900,000,000 -$400,000,000
Market value added =$500,000,000
The firm's market value added is $500,000,000
Belltone Company made the following expenditures related to its 10-year-old manufacturing facility:
1. The heating system was replaced at a cost of $185,000. The cost of the old system was not known. The company accounts for improvements as reductions of accumulated depreciation.
2. A new wing was added at a cost of $740,000. The new wing substantially increases the productive capacity of the plant.
3. Annual building maintenance was performed at a cost of $22,000.
4. All of the equipment on the assembly line in the plant was rearranged at a cost of $34,000. The rearrangement clearly increases the productive capacity of the plant.
Required:
Prepare journal entries to record each of the above expenditures.
Answer: The answer is given below
Explanation:
A journal is a detailed account that is used in a business or an organization in order to record every financial transactions thatbtskes place in the business or organization who ch will be used for reconciliation of account in the future and also transfer to every other accounting records, like the general ledger.
The journal entries to record the expenses made by Belltone Company relating to its 10-year-old manufacturing facility has been prepared and attached.
Wolford Department Store is located in midtown Metropolis. During the past several years, net income has been declining because suburban shopping centers have been attracting business away from city areas. At the end of the company’s fiscal year on November 30, 2017, these accounts appeared in its adjusted trial balance.
Accounts Payable $ 26,800
Accounts Receivable 17,200
Accumulated Depreciation—
Equipment 68,000
Cash 8,000
Common Stock 35,000
Cost of Goods Sold 614,300
Freight-Out 6,200
Equipment 157,000
Depreciation Expense 13,500
Dividends 12,000
Gain on Disposal of Plant Assets 2,000
Income Tax Expense 10,000
Insurance Expense 9,000
Interest Expense 5,000
Inventory 26,200
Notes Payable 43,500
Prepaid Insurance 6,000
Advertising Expense 33,500
Rent Expense 34,000
Retained Earnings 14,200
Salaries and Wages Expense 117,000
Sales Revenue 904,000
Salaries and Wages Payable 6,000
Sales Returns and Allowances 20,000
Utilities Expense 10,600
Answer:
Wolford Department Store
Income Statement
For the Year Ended November 30,2017
Sales Revenue $904,000
Sales Returns and Allowances ($20,000 )
Net Sales $884,000
Cost of Goods Sold ($614,300)
Gross profit $269,700
Operating expenses:
Wages Expense $117,000 Advertising Expense $33,500 Rent Expense $34,000 Depreciation Expense $13,500 Insurance Expense $9,000 Utilities Expense $10,600Freight-Out $6,200Total operating expenses ($223,800)
Income from operations $45,900
Other revenues:
Gain on Disposal of Plant Assets $2,000
Other expenses:
Interest Expense ($5,000 )
Income before income taxes $42,900
Income Tax Expense ($10,000)
Net income after taxes $32,900
Wolford Department Store
Balance Sheet
For the Year Ended November 30,2017
Assets:
Cash $8,000
Accounts Receivable $17,200
Prepaid Insurance $6,000
Inventory $26,200
Equipment $157,000
Accumulated Depreciation - Equipment (68,000)
Total Assets: $146,400
Liabilities and Stockholders' Equity:
Accounts Payable $26,800
Wages Payable $6,000
Notes Payable $43,500
Common Stock $35,000
Retained Earnings $35,100
Total Liabilities and Stockholders' Equity: $146,400
Wolford Department Store
Statement of Retained Earnings
For the Year Ended November 30,2017
Retained earnings at the beginning of the period: $14,200
Net income after taxes: $32,900
Dividends ($12,000)
Retained earnings at he end of the period: $35,100
a. The Wolford Department Store's Multi-level Income Statement, Balance Sheet, and Statement of Retained Earnings as of November 30, 2017 are as follows:
Wolford Department Store
Income Statement
For the Year Ended November 30,2017
Sales Revenue $904,000
Sales Returns and Allowances ($20,000)
Net Sales $884,000
Cost of Goods Sold ($614,300)
Gross profit $269,700
Operating expenses:
Wages Expense $117,000
Advertising Expense 33,500
Rent Expense 34,000
Depreciation Expense 13,500
Insurance Expense 9,000
Utilities Expense 10,600
Freight-out 6,200
Total operating expenses ($223,800)
Income from operations $45,900
Other revenues:
Gain from Disposal of Plant Assets $2,000
Other expenses:
Interest Expense ($5,000)
Income before Income Taxes $42,900
Income Tax Expense ($10,000)
Net Income After Taxes $32,900
Wolford Department Store
Balance Sheet
As of November 30,2017
Assets:
Current Assets:
Cash $8,000
Accounts Receivable 17,200
Prepaid Insurance 6,000
Inventory 26,200
Current assets $57,400
Long-term assets:
Equipment $157,000
Accumulated Depreciation (68,000) $89,000
Total Assets $146,400
Liabilities and Stockholders' Equity:
Current Liabilities:
Accounts Payable $26,800
Wages Payable 6,000
Current liabilities $32,800
Long-term liabilities
Notes Payable $43,500
Total liabilities $76,300
Equity:
Common Stock $35,000
Retained Earnings 35,100
Total Equity $70,100
Total Liabilities & Stockholders' Equity $146,400
Wolford Department Store
Statement of Retained Earnings
As of November 30,2017
Retained earnings 1 Dec. 2016 $14,200
Net income after taxes 32,900
Dividends ($12,000)
Retained earnings, Nov. 30, 2017 $35,100
b) The profitability ratios are computed as follows:
1. Profit Margin = (Net Income/Net Sales x 100)
= $32,900/$884,000 x 100
= 3.72%
2. Gross Profit rate = Gross Profit/Net Sales x 100)
= $269,700/$884,000 x 100
= 30.51%
c. If the net sales increases by 15%, the Net sales = $1,016,600 ($884,000 x 1.15)
If Gross profit increases by $40,443, the Gross profit = $310,143 ($269,700 + $40,443)
If Expenses increase by $58,600, the total operating Expenses = $282,400 ($223,800 + $58,600)
Revised Net Income:
Gross Profit $310,143
Total operating expenses (282,400)
Income from operations $27,743
Other revenues:
Gain from Disposal of Plant Assets $2,000
Other expenses:
Interest Expense ($5,000)
Income before Income Taxes $24,743
Income Tax Expense ($10,000)
Net Income After Taxes $14,743
b) The profitability ratios are computed as follows:
1. Profit Margin = (Net Income/Net Sales x 100)
= $14,743/$1,016,600 x 100
= 1.45%
2. Gross Profit rate = Gross Profit/Net Sales x 100)
= $310,143/$1,016,600 x 100
= 30.51%
d. With the proposed changes, the gross profit rate remains the same (without any impact) because the net sales increased by the same rate (15%) as the cost of goods sold and the gross profit.
However, the net income reduced drastically, especially with the income tax remaining the same amount.
Thus, without the income tax effect, there is no merit in this proposal as it reduced the net income margin from 3.72% to 1.45%.
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