Answer:
1. $1,930,000
2. Margin = 15%
Turnover = $2.8
Return on investment = 42%
3. $521,100
Explanation:
1. The computation of average operating assets for last year is shown below:-
Average operating assets = (Beginning operating assets + Ending operating assets) ÷ 2
= ($2,562,000 - $399,000 - $253,000) + ($2,634,000 - $434,000 - $250,000) ÷ 2
= ($1,910,000 + $1,950,000) ÷ 2
= $3,860,000 ÷ 2
= $1,930,000
2. The computation of company's margin, turnover, and return on investment is shown below:-
Margin = Net operating income ÷ Sales
= $810,600 ÷ $5,404,000
= 15%
Turnover = Sales ÷ Average operating assets
= $5,404,000 ÷ $1,930,000
= $2.8
Return on investment = Margin × Turnover
= 15% × $2.8
= 42%
3. The computation of residual income last year is shown below:-
Residual income last year = Net operating income - Minimum required return
= $810,600 - ($1,930,000 × 15%)
= $810,600 - $289,500
= $521,100
So, we have applied the above formula.
Required: Using the adjusted trial balance on the next page for Buttross Manufacturing, Inc., prepare statements for the fiscal year ended September 30, 2020, in good form:
Part 1: Prepare a Statement of Cost of Goods Manufactured
Part 2: Prepare a Multiple-Step Income Statement
Aside: The general ledger would usually include a factory overhead control account and the detail of factory overhead would be in a subsidiary ledger. However, the detail of factory overhead has been put into the adjusted trial balance mixed with the other accounts to make sure you can distinguish accounts going into cost of goods manufactured from those going into the income statement.
Find the given attachments for answer.
Note: The adjusted trial balance is added.
Cost of Goods Sold = Beginning finished goods inventory + COGM - Ending Finished Goods Inventory = 69,000 + 311,000 -100,000 = 280,000.
Cost of goods available for sale = Beginning finished goods inventory + COGM
COGS = Cost of goods available for sale - Ending finished goods inventory.
Alyeska Services Company, a division of a major oil company, provides various services to the operators of the North Slope oil field in Alaska. Data concerning the most recent year appear below:
Sales $17,600,000
Net operating income $6,200,000
Average operating assets $36,000,000
Required:
a. Compute the margin for Alyeska Services Company.
b. Compute the turnover for Alyeska Services Company.
c. Compute the return on investment (ROI) for Alyeska Services Company.
Answer:
a. The margin for Alyeska Services Company: 35.23%
b. The turnover for Alyeska Services Company: 0.49
c. The return on investment (ROI) for Alyeska Services Company: 17.22%
Explanation:
a. The profit margin reflects a company's overall ability to turn income into profit, is calculated by formula:
Profit margin = (Net operating income/Net sales ) x 100% = $6,200,000/$17,600,000 x 100% = 35.23%
b. Asset turnover helps investors understand how effectively companies are using their assets to generate sales. Asset turnover is calculated by using following formula:
Asset Turnover = Total Sales/ Average Total Assets = $17,600,000/$36,000,000 = 0.49
c. Return on investment (ROI) is calculated by using following formula:
ROI = Net income/Total investment x 100%
In Alyeska Services Company,
ROI = Net operating income/Average operating assets x 100% = $6,200,000/$36,000,000 x 100% = 17.22%
Sweet, Inc. issued a $140,000, 4-year, 12% note at face value to Flint Hills Bank on January 1, 2017, and received $140,000 cash. The note requires annual interest payments each December 31.
Required:
Prepare Coldwell's journal entry record:
a. the issuance of the note
b. the December 31 interest payment.
Answer:
The double entry is given below alongwith its explanation
Explanation:
On January 1, 2017, the receipt of money by the issuance of the 12% note would be recorded as increase in liability which would be credited and increase in cash receipt is increase in asset which must be debited. The entry to record the issuance of note is as under:
Dr Cash $140,000
Cr Loan Note $140,000
On December 31, 2017, the Payment of interest of 12% on note would be recorded as increase in expense which must be debited and decrease in cash due to payment is decrease in asset and it must be credited. The entry to record the payment of interest is as under:
Dr Interest Expense $16,800
Cr Cash Account $16,800
In each of the following cases, what is the effect on the short-run aggregate supply (SRAS) curve? An increase in firm costs A. does not shift the SRAS curve. B. shifts the SRAS curve upward. C. shifts the SRAS curve downward. An increase in the money supply A. does not shift the SRAS curve. B. shifts the SRAS curve downward. C. shifts the SRAS curve upward. An increase in consumption A. shifts the SRAS curve upward. B. does not shift the SRAS curve. C. shifts the SRAS curve downward.
Answer: 1. B. shifts the SRAS curve upward.
2. A. does not shift the SRAS curve.
3. B. does not shift the SRAS curve.
Explanation:
1. When Firm costs rise, the input cost for Producers rises and they respond by reducing production so as to reduce the cost of production. This reduction causes a reduction in Supply that forces the short-run aggregate supply (SRAS) curve to shift left (upward).
2. This change in the Money Supply means that there will be more money for households to spend. This increases demand but does not have any direct influence on the short-run aggregate supply (SRAS) curve.
3. An Increase in consumption means that there is greater demand for goods and services in an Economy. Indirectly this will cause producers to ramp up production to meet these needs but directly, there is no influence on the short-run aggregate supply (SRAS) curve.
Presented below are certain account balances of Paczki Products Co.Rent revenue$ 6,500Interest expense 12,700 Beginning retained earnings 114,400Ending retained earnings 125,000Dividend revenue 71,000 Sales returns and allowances 12,400 Allocation to noncontrolling interest 17,000 Sales discounts$ 7,800Selling expenses 99,400Sales revenue 390,000 Income tax expense 31,000 Cost of goods sold 184,400 Administrative expenses 82,500Instructions From the foregoing, compute the following: (a) total net revenue, (b) net income, and (c) income attributable to controlling stockholders.
Answer:
Kindly check attached picture for the detailed computations
You are seeking a bank loan for $12000 and go to Prosper Bank and to Skyline Bank to see which loan has a lower rate. Your plan is to open a restaurant, which is quite risky. Prosper Bank expects that it could recover $10,000 if you defaulted while Skyline thinks it would only recoup $9000. However, Skyline puts your probability of repayment at 97% while Prosper only has it at 96%. Which loan has the lower interest rate? Assume both banks are aiming to earn 6%.
Answer:
SKYLINE = 6.96%, PROSPER = 6.94%.
Explanation:
So, in the question above we are given the following parameters or information or data as;
=> Amount of bank loan been seeked for = $12000.
=> "Prosper Bank expects that it could recover $10,000 if you defaulted while Skyline thinks it would only recoup $9000."
=> " Skyline puts the probability of repayment at 97% while Prosper only has it at 96%."
=>" both banks are aiming to earn 6%."
So, for both banks we will be making use of the formula below:
L × (1 + RER) = POR × L × (1 + IRCr) + (1 - POR) × RCD.
Where L = loan, RER = required earning rate, POR = probability of repayment, IRCr = interest rate charged and RCD = Recovery in case of default.
(A). FOR PROSPER BANK:
12000 × ( 1 + 6%) = 96% × 12000 × (1 + IRCr) + (1 - 96% ) × 10000.
SOLVING FOR IRCr, we have;
interest rate charged = 6.94%.
(B). FOR SKYLINE BANK;
12000 × (1 + 6%) = 97% × 12000 × (1 + IRcr ) + (1 - 97%) × 9000.
IRCr =6.96%.
Gearty and Olinto organized The Worthington Corp., which issued voting common stock with a fair market value of $240,000. They each transferred property in exchange for stock as follows
Property Adjusted Basis Fair Market Value Percentage of The Worthington Corp. Stock Acquired
Gearty Building $80,000 $164,000 60%
Olinto Land 10,000 96,000 40%
The building was subject to a $20,000 mortgage that was assumed by The Worthington Corp. What was The Worthington Corp.'s basis in the building?
Answer:
$80,000
Explanation:
Since Worthington Corp. assumed the the $20,000 mortgage which the building was subject to, the Worthington Corp.'s basis in the building is the adjusted basis of the building.
Therefore, Worthington Corp.'s basis in the building is $80,000 which is the adjusted basis of the building.
2. Buckeye Industries has a bond issue with a face value of $1000. The value of Buckeye’s asset is $1200. In one year they will be worth either $800 or $1400. The going rate on T-bill is 4 percent. What is the value of debt, equity, and interest rate on debt?
Answer:
Buckeye Industries has a bond issue with a face value of $1000. The value of Buckeye’s asset is $1200. In one year they will be worth either $800 or $1400. The going rate on T-bill is 4 percent. What is the value of debt, equity, and interest rate on debt?
Explanation:
According to the Coase theorem, private parties can negotiate to an efficient solution in the presence of externalities if the is (are) relatively low.Suppose Jeremy, Francis, and Andrew are part of Mu Epsilon Nu, a college fraternity known for its very loud, rambunctious weekend parties. The parties annoy many of the residents in nearby apartment complexes due to the loud music and blaring neon lights. This is a(n)example:________
a.external cost
b. positive externality
c. neither
You are hired by the Council of Economic Advisors (CEA) as an economic consultant. The Chairperson of the CEA tells you that she believes the current unemployment rate is too high. The unemployment rate can be reduced if aggregate output increases. She wants to know what policy to pursue to increase aggregate output by $500 billion. The best estimate she has for the MPC is 0.5. Which of the following policies should you recommend? Why?
A) increase government purchases by $200 billion B) increase government purchases by $250 billion C) cut taxes by $200 billion D) cut taxes by $200 billion and to increase government purchases by $200 billion
Answer:
Council of Economic Advisors (CEA)
I would recommend this policy to increase aggregate output:
B) increase government purchases by $250 billion
Explanation:
To increase aggregate output (GDP) by $500 billion, in order to reduce the unemployment rate, government, given the best estimate for the MPC as 0.5, it would be to increase government purchases by $250 billion. The MPC is the marginal propensity to consume.
By increasing government purchases by $250 billion, the ripple effect would ginger industries to generate more output, thereby increasing the factors that affect aggregate output. These actions would then increase aggregate output by more than $500 billion. This choice is made because government spending is funded from taxes, making government unable to cut taxes.
Economists define aggregate output as "the sum of all the goods and services produced in an economy over a certain period of time." Aggregate output is an economy's total productivity or GDP (Gross Domestic Product). The factors that determine aggregate output include household wealth, consumer and business expectations, capacity utilization, monetary policy, fiscal policy, exchange rates, and foreign GDP.
The equation for calculating aggregate output, which expands the GDP by showing price level, is given as "Y = Y ad = C + I + G + NX tells us that aggregate output (or aggregate income) is equal to aggregate demand, which in turn is equal to consumer expenditure plus investment (planned, physical stuff) plus government spending plus net exports (exports – imports)."
Assume there are 1000 homes in a flood zone in an area in which sea levels are rising. An additional 1000 homes are above the flood zone and at less risk. A levee could be built to prevent the rise in sea level from affecting the homes. It is worth $20,000 per home in the flood zone to have the levee built. It is worth $5,000 per home not in the flood zone to have the levee built. The levee costs $22,000,000 to build. Which of these makes the most economic sense?
A. The government should leave this to the free market.
B. The free market will have difficulty building the levee because the levee is non-rival and non-excludable. So the government may have to intervene and force homeowners to pay through taxes to fund the levee as the benefits exceed the costs.
C. The free market will have difficulty building the levee because the levee is non-rival and non-excludable. However the benefits do not exceed the costs anyway so there is no need for the government to intervene.
D. The free market will have some difficulty building the levee because the levee is non-rival. However it is excludable. So there is only a partial argument for government intervention here.
Answer: The free market will have difficulty building the levee because the levee is non-rival and non-excludable. So the government may have to intervene and force homeowners to pay through taxes to fund the levee as the benefits exceed the costs.
Explanation:
From the question, we are informed that if there are 1000 homes in a flood zone in an area whereby the sea levels are rising and there's an additional 1000 homes that are above the flood zone and are at less risk. Since the levee costs $22,000,000 to build, the best thing to do economic sense will be that the free market will have difficulty building the levee because the levee is non-rival and non-excludable.
It should be noted that in a free market, decisions are made by individuals through price signals and forces of demand and supply. Therefore since this is a public good as it is non rival and non excludeable, there will be need for the intervention of the government in order to collect taxes from the homeowners.
Answer:b
Explanation: I did this
On February 18, 2021, Union Corporation purchased 600 IBM bonds as a long-term investment at their face value for a total of $600,000. Union will hold the bonds indefinitely, and may sell them if their price increases sufficiently. On December 31, 2021, and December 31, 2022, the market value of the bonds was $580,000 and $610,000, respectively.Required:2. & 3. Prepare the adjusting entry for December 31, 2021 and 2022. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
Dr unrealized holding gains and losses—OCI $20,000
Cr investment in bonds fair value adjustment $20,000
Dr investment in bonds fair value adjustment $30,000
Cr unrealized holding gains and losses—OCI $30,000
Explanation:
On 31st December 2021 the adjustment required is the difference between the cost of bond investment of $600,000 and the market value of the bonds which was $580,000, in a nutshell a unrealized loss of $20,000 is recorded.
The excess of fair value of market value of $610,000 over the previous year market value would be debited to fair value adjustment while it is also credited to unrealized holding gains and losses-OCI
Two countries are trying to decide which product should have an increased production Both Canada and Costa Rica produce cottee and corn, but is easier for Canada to raise com than grow Coffee Costa Rica easily grows coffee, but has a more difficult time growing com. In comparison with Costa Rica, Canada has:_________.
a the camale to create richer lasting coffee than Costa Rica
b the opportunity to increase their coffee production to better compete with Costa Rka
c. a comparative advantage with com.
A Moving to another question will save this response
Answer:
. a comparative advantage with com.
Explanation:
A country has comparative advantage in production if it produces at a lower opportunity cost when compared with other countries.
If it is easier for Canada to produce Com, it means they have a comparative advantage in the production of com. Costa Rica has a comparative advantage in the production of coffee.
I hope my answer helps you
Charleston Clothing purchased land, paying $ 110,000 cash and signing a $ 280,000 note payable. In addition, Charleston paid delinquent property tax of $ 1,400, title insurance costing $ 650, and $ 5,900 to level the land and remove an unwanted building. Record the journal entry for purchase of the land
Answer:
Dr Land 397,950
Cr Cash 117,950
Cr Notes payable 280,000
Explanation:
Certain ordinary and necessary costs can be included in the purchase cost of land:
cost of the landtitle feesapplicable taxeslegal feesbroker feessurvey costsleveling costszoning feesetc.In this case, the total purchase cost of the land = $110,000 + $280,000 + $1,400 + $650 + $5,900 = $397,950
The objectives of labor unions have Multiple Choice always placed the greatest emphasis on increasing wages and benefits. shifted with social and economic conditions. frequently taken global competition into account. consistently favored policies that would move the U.S. economy toward a command system.
Victory Company uses weighted-average process costing to account for its production costs.
Conversion costs are added evenly throughout the process.
Direct materials are added at the beginning of the process.
During November, the company transferred 800,000 units of product to finished goods.
At the end of November, the work in process inventory consists of 187,000 units that are 60% complete with respect to conversion.
Beginning inventory had $192,465 of direct materials and $159,635 of conversion cost.
The direct material cost added in November is $1,288,035 and the conversion cost added is $3,033,065.
Beginning work in process consisted of 74,000 units that were 100% complete with respect to direct materials and 80% complete with respect to conversion.
Of the units completed, 74,000 were from beginning work in process and 726,000 units were started and completed during the period.
Required:1. Determine the equivalent units of production with respect to direct labor and direct materials.2. Compute both the direct labor cost and the direct materials cost per equivalent unit. (Round "Cost per EUP" to 2 decimal places.)3. Compute both direct labor cost and direct materials cost assigned to units completed and transferred out and ending goods in process inventory. (Round "Cost per EUP" to 2 decimal places.)
Answer:
1. Direct Materials = 987,000 units , Direct Labor = 912,200 units
2.Direct Materials = $1.50 , Direct Labor = $3.50
3.
Units Completed and Transferred Costs
Direct Materials = $ 1,200,000
Direct Labor = $ 2,800,000
Ending goods in process inventory cost
Direct Materials = $ 280,500
Direct Labor = $ 392,700
Explanation:
First step is to determine the equivalent units of production with respect to direct labor and direct materials
Direct Materials
Note : Materials are added at beginning of the process hence, they are 100 % complete for both units categories
Units Completed and Transferred (800,000 × 100%) = 800,000
Units of Ending Work In Process (187,000 × 100%) = 187,000
Equivalent units of production = 987,000
Direct Labor
Note : Conversion costs are added evenly throughout the process, hence we need to establish units to the extent of work done.
Units Completed and Transferred (800,000 × 100%) = 800,000
Units of Ending Work In Process (187,000 × 60%) = 112,200
Equivalent units of production = 912,200
The next step is to Calculate the Total Cost of Production with respect to direct labor and direct materials incurred during the period.
Direct Materials
Cost in Opening Work In Process = $192,465
Cost added during the period = $1,288,035
Total Costs = $1,480,500
Conversion
Cost in Opening Work In Process = $159,635
Cost added during the period = $3,033,065
Total Costs = $3,192,700
Then use the above data to calculate the cost per equivalent unit for direct labor and direct materials.
Cost per equivalent unit. = Total Cost / Total Equivalent units
Direct Materials = $1,480,500 / 987,000 = $1.50
Direct Labor = $3,192,700 / 912,200 = $3.50
CONCLUSION :
Units Completed and Transferred Costs
Direct Materials = (800,000 × $1.50) = $ 1,200,000
Direct Labor = (800,000 × $3.50) = $ 2,800,000
Ending goods in process inventory cost
Direct Materials = (187,000 × $1.50) = $ 280,500
Direct Labor = (112,200 × $3.50) = $ 392,700
The first year after you retire you want to be able to withdraw $100,000 from your savings account. Every year after that you want to increase your withdrawals by 2%. You expect that the account will earn 6% annual interest. How much money must you have in your savings account when you retire to make sure that your money lasts for 25 years
Answer:
Total amount of money to be had in savings is $1,544,352.63
Explanation:
First withdrawal is $100,000 and is increases by 2% every year till 25 years.
The amount required in savings account can be calculated by knowing the present value of growing annuity.
Annuity = [tex](p /(r-g) *[ 1 -(1+g / 1+r)^n][/tex]
given, p = $100,000
r = 6% = 0.06
g=2% = 0.02.
n = number of periods = 25.
= (100,000 ÷ (0.06 - 0.02)) × [ 1 - (1.02 ÷ [tex]1.06)^{25[/tex] ]
= $2,500,000 × [1 - 0.382258949]
= $2,500,000 × 0.61774105
= $1,544,352.63
Writers should use words carefully and construct sentences skillfully to emphasize main ideas and de-emphasize minor ideas. Choose the best response. Which of the following labels the main idea for the reader?
a. Janes needs to proofread the proposal and changes need to be made
b. First, please make the changes to the second section of the proposal changes, and then have Jane proofread the entire proposal.
Answer:
Option b is correct.
Explanation:
The statement in option ''b" is the correct option for laying emphasis on the main idea and de-emphasizing the minor ideas, that is;
"First, please make the changes to the second section of the proposal changes, and then have Jane proofread the entire proposal."
The above statement is a detailed one and shows the step by step instructions or requirements;
1." First, please make the changes to the SECOND SECTION of the proposal changes.''
The SECOND SECTION the writer mentioned lay emphasis on the second section of the proposal CHANGES AND NOT THE WHOLE.
2. "and then have Jane proofread the ENTIRE proposal"
The writer wants Jane to do the PROOFREADING of the ENTIRE proposal.
Waterway Enterprises reported cost of goods sold for 2020 of $1,385,600 and retained earnings of $5,415,900 at December 31, 2020. Waterway later discovered that its ending inventories at December 31, 2019 and 2020, were overstated by $103,320 and $38,040, respectively. Determine the corrected amounts for 2020 cost of goods sold and December 31, 2020, retained earnings.
Answer:
b. Corrected 2020 cost of goods sold = $ 1,320,320.
b. Corrected retained earnings = $5,377,860.
Explanation:
a. Determine the corrected amounts for 2020 cost of goods sold
An overstatement of the beginning inventory has to be deducted from the reported cost of good sold since the amount of the overstatement was added to the cost of goods sold initially.
On the other hand, an overstatement of the ending inventory has to be added to the reported cost of good sold since the amount of the overstatement was deducted to the cost of goods sold initially.
Therefor, we have:
Corrected 2020 cost of goods sold = $1,385,600 - $103,320 + $38,040 = $ 1,320,320.
b. Determine the corrected amounts for December 31, 2020, retained earnings
In this case, the amount of overstatement of the ending inventory has to be deducted from the reported retained earning since the retained earning was initially overstated by that amount.
Therefore, we have:
Corrected retained earnings = $5,415,900 - $38,040 = $5,377,860
The following revenue and expense account balances were taken from the ledger of Wholistic Health Services Co. after the accounts had been adjusted on February 28, 2019, the end of the fiscal year:
Depreciation Expense $9,000 Service Revenue $270,900
Insurance Expense 4,000 Supplies Expense 3,000
Miscellaneous Expense 6,000 Utilities Expense 1,760
Rent Expense 4,200 Wages Expense 213,000
Prepare an income statement.
Answer:
Wholistic Health Services Co.
Income Statement for the year end February 28, 2019
Service Revenue $270,900
Less: Supplies Expense $3,000
Gross Income $267,900
Less operating Expenses:
Insurance Expense $4,000
Depreciation Expense $9,000
Miscellaneous Expense $6,000
Utilities Expense $1,760
Rent Expense $4,200
Wages Expense $213,000
$237,960
Net Income $29,940
Explanation:
Income statement shows the performance of the company in a year. It provides the details of revenue, expenses and profits for the year. All the expenses are deducted from the revenue to determine the net earning of the business.
2 brothers, Joe and Bob get equal dollar amounts of securities as a gift. Joe immediately sells his securities and deposits the money to a bank account. On the other hand, Bob keeps his securities positions and holds them in a brokerage account. After 5 years, Joe has $10,000 in his bank account, while Bob has $30,000 in his brokerage account. The $20,000 difference between the account balances is explained by:
Answer:
Opportunity cost
Explanation:
The opportunity cost Bob's brother Joe $20,000. Remember, the term Opportunity cost refers to the cost (loss in this context) incurred when one forgoes an alternative best option–holding them in a brokerage account, in place for a less beneficial one.
Thus, Bob chose the best alternative over his brother.
Mr. Hobbes Bed & Breakfast is considering the replacement of some old equipment. The new equipment will cost $86,000 including delivery and installation. The old equipment to be replaced has a book value of $60,200 and can be sold pre-tax for $61,200. If the firm’s effective tax rate is 25%, compute the net investment.
Answer:
$25,550
Explanation:
For computing the net investment first we have to find out the loss or gain on sale of old equipment which is shown below:
Sale value = $61,200
Less: Book value of old equipment = $60,200
Gain = $1000
Now
Tax on gain is
= $1,000 × 25%
= $250
So, the net gain is
= $1,000 - $250
= $750
Now the net investment is
= Cost of new equipment - sale value pre tax + net gain
= $86,000 - $61,200 + $750
= $25,550
Answer:
Net Investment = $25,550
Explanation:
Given:
Sale value (old equipment) = $61,200
Book value of old equipment = $60,200
New equipment cost = $86,000
Effective tax rate = 25%
Computation
Gain on sale = $61,200 - $60,200
Gain on sale = $1,000
Amount of tax on gain = $1000 × 25%
Amount of tax on gain = $250
Net Gain = Gain on sale - Amount of tax on gain
Net Gain = $750
Net Investment = Cost of new equipment - (Sale value - Net Gain)
Net Investment = $86,200 - (61,200 - 750)
Net Investment = $25,550
Insect control devices must and be able to retain the electrocuted insects inside the device
Answer:
Be rated for safety by the USDA
Explanation:
Presence of insect pest around areas of food production poses a lot of risk such as contamination of food which might impact negatively on public health. However, in an attempt to control these insect pests, the problem of food contamination as a result of insect infestation that we're trying to solve might still be increased if safety measures are not strictly adhered to when manufacturing and using insect control devices.
Hence, it is necessary and of utmost importance that insect control devices must be rated for safety by USDA to ensure compliance with laid down measures and protocols for safe control of insect without contamination of food.
Mcleod, Inc. incurred fixed costs of $ 400 comma 000. Total costs, both fixed and variable, are $ 450 comma 000 when 59 comma 000 units are produced. It sold 30 comma 000 units during the year. Calculate the variable cost per unit. (Round your answer to the nearest cent.)
Answer:
Unitary variable cost= $1.72
Explanation:
Giving the following information:
Mcleod, Inc. incurred fixed costs of $400,000.
Total costs= $450,000
Units produced= 59,000
First, we need to calculate the total variable cost:
Total variable cost= total cost - total fixed cost
Total variable cost= 450,000 - 400,000
Total variable cost= 50,000
Now, the unitary variable cost:
unitary variable cost= 50,000/29,000
unitary variable cost= $1.72
Break-Even Sales Currently, the unit selling price of a product is $280, the unit variable cost is $230, and the total fixed costs are $560,000. A proposal is being evaluated to increase the unit selling price to $310. a. Compute the current break-even sales (units). units b. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased and all costs remain constant. units
Answer:
a.
Break even in units sales = 11200 units
b.
Break even in units sales = 7000 units
Explanation:
Break even sales in units is the number of units needed to be sold in order for the company to reach a point where it covers all of its total cost with its total revenue and break evens. It is a point of no profit and no loss and the total revenue is equal to the total costs.
The formula to calculate break even in units is,
Break even in units = Fixed cost / Contribution margin per unit
Where, contribution margin per unit = Selling price per unit - Variable cost per unit
a.
Break even in units = 560000 / (280 - 230)
Break even in units = 11200 units
b.
Anticipated Break even in units = 560000 / (310 - 230)
Anticipated Break even in units = 7000 units
Journal entry worksheet
The company has 15 employees, who earn a total of $1,600 in salaries each working day. They are paid each Monday for their work in the five-day workweek ending on the previous Friday. Assume that December 31, 2019, is a Tuesday, and all 15 employees worked the first two days of that week. Because New Year’s Day is a paid holiday, they will be paid salaries for five full days on Monday, January 6, 2020.
Transaction General Journal Debit Credit
The Office Supplies account started the year with a $3,500 balance. During 2019, the company purchased supplies for $14,455, which was added to the Office Supplies account. The inventory of supplies available at December 31, 2019, totaled $3,080.
Transaction General Journal Debit Credit
Record the adjusting entry related to the company's insurance.
Transaction General Journal Debit Credit
Explanation: BIG STONKS
A 5-year corporate bond yields 10.70%. A 5-year municipal bond of equal risk yields 6.50%. Assume that the state tax rate is zero. At what federal tax rate are you indifferent between the two bonds? (Round your final answer to two decimal places.)
Answer:
The multiple choices are as follows:
a.
25.40%
b.
29.03%
c.
39.25%
d.
33.98%
e.
27.38%
The correct option is C,39.25% federal tax rate
Explanation:
In determining the federal tax that one would be indifferent in choosing between the two bonds, we equate the yield of the two bonds as follows with tax element being deducted from corporate bond yield:
6.50%=10.70%*(1-t)
The t is the tax rate which is the unknown
divide both sides by 10.70%
6.50%/10.70%=1-t
0.607476636 =1-t
t=1-0.607476636
t=0.392523364 =39.25%
Use the In the News to answer three questions
IN THE NEWS Treasury Prices Fall with Improved Expectations Expectations of accelerated economic growth continue to boost yields on Treasury securities. The price of the Treasury's 2.0 percent 10-year bond fell $17.43 yesterday, from $843.88 to $826.45. The decline in the price of the treasury pushed the yield up from 2.37 percent to 2.42 percent. The 30-year bond also declined, increasing the yield from 2.96 to 3.00. Source: Market reports of January 6, 2017, What would the yield be on the 2.0 percent, $1,000, 10-year Treasury bond if the market price of the bonds were Instructions: Round your responses to two decimal places.
a. $1,000?
b. $800?
c. $1,200?
Answer:
2%
2.5%
1.67%
Explanation:
The yield can be computed using the yield formula which coupon payment divided by price.
The coupon payment=face value*coupon rate
face value is $1000
coupon rate is 2%
coupon payment=2%*$1000=$20
when price is $1000:
yield =$20/$1000=2%
when price is $800
yield=$20/$800=2.5%
when price is $1,200
yield =$20/$1,200=1.67%
In essence ,the lower the price the higher the yield as lower amount is invested in order to receive the same amount of annual coupon of $20
Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent month for the two games appears below: Claimjumper Makeover Total Sales $ 116,000 $ 58,000 $ 174,000 Variable expenses 35,800 7,700 43,500 Contribution margin $ 80,200 $ 50,300 130,500 Fixed expenses 83,250 Net operating income $ 47,250 Required: 1. What is the overall contribution margin (CM) ratio for the company? 2. What is the company's overall break-even point in dollar sales? 3. Prepare a contribution format income statement at the company's break-even point that shows the appropriate levels of sales for the two products.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Claimjumper Makeover
Total Sales:
Claimjumper= $116,000
Makeover= $58,000
Total= $174,000
Variable expenses:
Claimjumper= $35,800
Makeover= $7,700
Total= $43,500
Contribution margin:
Claimjumper= $80,200
Makeover= $50,300
Total= $130,500
Fixed expenses 83,250
Sales proportion:
Claimjumper= 116,000/174,000= 0.67
Makeover= 58,000/174,000= 0.33
Variable cost proportion:
Claimjumper= 35,800/43,500= 0.82
Makeover= 7,700/43,500= 0.18
First, we need to calculate the contribution margin ratio for the company:
Weighted average contribution margin ratio= (weighted average selling price - weighted average unitary variable cost)/ weighted average selling price
Weighted average contribution margin ratio= 130,500/174,000
Weighted average contribution margin ratio= 0.75
Now, we can calculate the break-even point in dollars:
Break-even point (dollars)= fixed costs/ Weighted average contribution margin ratio
Break-even point (dollars)= 83,250/0.75
Break-even point (dollars)= $111,000
Finally, we structure the income statement:
Sales= 111,000
Total variable costs= (111,000*0.25)= (27,750)
Income statement:
Sales:
Claimjumper= 111,000*0.67= 74,370
Makeover= 111,000*0.33= 36,630
Variable costs:
Claimjumper= 27,750*0.82= (22,755)
Makeover= 27,750*0.18= (4,995)
Contribution margin= 83,250
Fixed costs= 83,250
Net operating income= 0
The Mazzanti Wholesale Food Company's fiscal year-end is June 30. The company issues quarterly financial statements requiring the company to prepare adjusting entries at the end of each quarter. Assume all quarterly adjusting entries were properly recorded. On December 1, 2020, the company paid its annual fire insurance premium of $9,200 for the year beginning December 1 and debited prepaid insurance. On August 31, 2020, the company borrowed $152,500 from a local bank. The note requires principal and interest at 8% to be paid on August 31, 2021. Mazzanti owns a warehouse that it rents to another company. On January 1, 2021, Mazzanti collected $30,400 representing rent for the 2021 calendar year and credited deferred rent revenue. Depreciation on the office building is $22,200 for the fiscal year. Employee salaries for the month of June 2021 $22,000 will be paid on July 20, 2021. Prepare the necessary year-end adjusting entries at the end of June 30, 2021, for the above situations. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
1.Dr Insurance expense 2,300
Cr Prepaid insurance 2,300
2.Dr Interest expense 3,050
Cr Interest payable 3,050
3.Dr Deferred rent revenue 7,600
Cr Rent revenue 7,600
4.Dr Depreciation expense 5,550
Accumulated
depreciation—building 5,550
5.Dr Salaries and wages expenses 22,000
Cr Salaries and wages payable 22,000
Explanation:
The Mazzanti Wholesale Food Company's Journal entries
1.
Dr Insurance expense 2,300
(9200×3/12 months)
Cr Prepaid insurance 2,300
2.
Dr Interest expense 3,050
(152,500×8%×3/12months )
Cr Interest payable 3,050
3.
Dr Deferred rent revenue 7,600
(30,400×3/12months)
Cr Rent revenue 7,600
4.
Dr Depreciation expense 5,550
(22,200×3/12 months)
Accumulated
depreciation—building 5,550
5.
Dr Salaries and wages expenses 22,000
Cr Salaries and wages payable 22,000
