Answer:
Total= $14,635
Explanation:
Giving the following information:
Cost of materials:
January= 14,870
February= 11,690
March= 12,760
Payments for purchases are expected to be made 50% in the month of purchase and 50% in the month following purchase.
The December Accounts Payable balance is $7,200.
To calculate the cash disbursement for January, we need to use the following structure:
Cash collection:
Accounts Payable= 7,200
Cash From January= (14,870*0.5)= 7,435
Total= $14,635
Consider the following payoff matrix facing Harry and Sally when each chooses to go to the coffee shop listed. Both Harry and Sally would like to meet each other but are shy about asking the other out on a date. Harry Starbucks Dunkin Donuts Sally Starbucks H:1,S:1 H:0,S:0 Dunkin Donuts H:0,S:0 H:1,S:1 What is Harry's best strategy?
Answer:
Harry has no best strategy
Explanation:
Game theory looks at the interactions between participants in a competitive game and calculates the best choice for the player.
Dominant strategy is the best option for a player regardless of what the other player is playing.
Nash equilibrium is the best outcome for a player where no player has an incentive to change their decisions.
If Harry and Sally goes to Dunkin Donuts, they both have a payoff of 1. If they go to different restaurants they have a payoff of zero. If they both go to Starbucks, they have a payoff of 1. Harry doesn't have a clear best strategy. So , he doesn't have a best strategy.
I hope my answer helps you
Read the scenario. Yuri has $100 to spend at the store. He spots a pair of designer jeans with a $98 price tag on them but knows that he can buy three pairs of $30 jeans for about the same price. He still decides to buy the $98 pair. What is most likely Yuri’s motivation behind buying the pricier pair? emotional spending confused sense of needs and wants greedy spending conspicuous consumption
Answer:
D
Explanation:
Conspicuous consumption
Conspicuous consumption is the spending of money on and the acquiring of luxury goods and services to publicly display economic power of the income or of the accumulated wealth of the buyer.
Yuri’s motivation behind buying the pricier pair is conspicuous consumption.
What is conspicuous consumption?Conspicuous consumption can be defined as the way in which a person or individual decide to buy luxury items or costly items so as to display or showcase their wealth.
Based on the given scenario Yuri is buying the costly designers jeans instead of the cheaper pair as to showcase his wealth.
Inconclusion Yuri’s motivation behind buying the pricier pair is conspicuous consumption.
Learn more about conspicuous consumption here:https://brainly.com/question/4384035
g (Ignore income taxes in this problem.) The management of Mashiah Corporation is considering the purchase of a machine that would cost $305,000, would last for 6 years, and would have no salvage value. The machine would reduce labor and other costs by $105,000 per year. The company requires a minimum pretax return of 7% on all investment projects. Click here to view Exhibit 8B-1 and Exhibit 8B-2 to determine the appropriate discount factor(s) using tables. The net present value of the proposed project is closest to:
Answer:
= $195,486.67
Explanation:
Net present value is the present value of after tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
Cash flow in year 0 = $-305,000
Cash flow each year from year 1 to 6 = $105,000
I = 7%
NPV = $195,486.67
To find the NPV using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
I hope my answer helps you
g The Esposito Import Company had 1 million shares of common stock outstanding during 2021. Its income statement reported the following items: income from continuing operations, $7 million; loss from discontinued operations, $2.0 million. All of these amounts are net of tax. Required: Prepare the 2021 EPS presentation for the Esposito Import Company
Answer:
$5.00
Explanation:
Preparation of the 2021 EPS presentation for the Esposito Import Company
Earnings per share:
Income from continuing operations$7.00
Less Loss from discontinued operations(2.0)
Net income $5.00
Therefore the Net income after the Preparation of the 2021 EPS presentation for the Esposito Import Company is $5.00
Consider a risky portfolio. The end-of-year cash flow derived from the portfolio will be either $70,000 or $200,000 with equal probabilities of .5. The alternative risk-free investment in T-bills pays 6% per year.
Required:
a. If you require a risk premium of 8%, how much will you be willing to pay for the portfolio?
b. Suppose that the portfolio can be purchased for the amount you found in (a) What will be the expected rate of return on the portfolio?
c. Now suppose that you require a risk premium of 12%. What is the price that you will be willing to pay?
d. Comparing your answers to (a) and id. what do you conclude about the relationship between the required risk premium on a portfolio and the price at which the portfolio will sell?
Answer:
(a) $118,421 (b) $135,000 (c) $114,407 (d) The portfolio that has a risk higher will sell at a lower price rate. The discount additional value is regarded as a risk of consequence
Explanation:
Solution
(a) If you require a risk premium of 8%, the total return expected on the risky portfolio is given as follows:
E(r) =Risk premium + rf
= 8% + 6% = 14%
Thus
The portfolio is given as follows:
Probability Return
0.5 $70,000
0.5 $200,000
Hence the dollar return that is expected is computed as follows:
E(r) =∑p(s)r(s)
=Now, 0.5 x 70,000 + 0.5 x 200,000
=$135,000
Now,
we want 135,000 to be 14% of our initial investment, so, the portfolio present value is:
Present value = $135,000/1.14
=$118,421
(b)The expected rate of return on the portfolio, suppose that the portfolio can be bought or the amount 118,421
Then
The expected rate of return =[ E(r) ] = $118,421 * [ 1 + E(r)]
= $118,421 *(1+ 0.14) = $135,000
(c) The price that you are willing to pay when the premium is 12%, then the risk free rate is given by 6%
Thus,
E(r) =Risk premium + rf
=12% + 6% = 18%
The dollar expected return is stated as follows:
E(r) =∑p(s)r(s)
Now, 0.5 x 70,000 + 0.5 x 200,000
=$135,000
we want 135,000 to be 18% of our initial investment, so, the portfolio present value is:
Present value = $135,000/1.18
= $114,407
(d) The portfolio that has a risk higher will sell at a lower price rate. The discount additional value is regarded as a risk of consequence.
A worker can choose high (H) or low (L) effort. If the worker chooses high effort, she incurs a personal cost of 1. In this case, output is high with probability one. If the worker chooses low effort, she incurs a personal cost of 0. In this case, output is low with probability one. When output is high, the firm receives revenue of O and zero otherwise. Can the same outcome be achieved when effort is unobservable?
A. Yes, because the firm would find it wothwhile to pay the bonus for high effort.
B. No, because for any bonus offered, the worker will claim to have exerted high effort.
C. No, because the firm has to pay the bonus based on output.
D. Yes, because effort can be perfectly inferred from output, which is observable.
Answer:
B. No, because for any bonus offered, the worker will claim to have exerted high effort.
Explanation:
This question required some basic reasoning about how human beings function. We all like to receive things from others, and if they are free (or without cost or effort) the more we like them. And we all believe that good things should happen to us and that we are entitled to receive good things. That is the basic reason why jealousy and envy exist.
Now, back to our case. If the company simply hands out bonuses to everyone regardless of their personal effort, every single worker will be convinced that they really deserve the bonus. Even if the worker didn't even try to do his best or didn't do anything right at all, he/she will be convinced that they deserve the bonus. Each and every single worker will claim that the reason they are receiving the bonus is due to their work. Everyone will say that they worked hard and their work was good.
Imagine this happened at school. One day, the teacher decides to give As to half the class in alphabetical order (or any other random way). The half that got the As will believe that they deserved the As while the other half will be very unhappy. If everyone got As, then everyone will be convinced that thy got As because they deserved them.
Bond A pays $8,000 in 20 years. Bond B pays $8,000 in 10 years. (To keep things simple, assume these are zero-coupon bonds, which means the $8,000 is the only payment the bondholder receives.)
Suppose the interest rate is 7 percent.
Using the rule of 70, the value of Bond A is approximately_______ , and the value of Bond B is approximately_______ .
Now suppose the interest rate increases to 14 percent.
Using the rule of 70, the value of Bond A is now approximately_________ , and the value of Bond B is approximately________ . Comparing each bond's value at 7 percent versus 14 percent, Bond A's value decreases by a_______ percentage than Bond B's value. The value of a bond__________ when the interest rate increases, and bonds with a longer time to maturity are _________sensitive to changes in the interest rate.
Answer:
To find the value of bond, let's use the formula:
Value of bond = price of bond / (1 + interest rate)ⁿ
Here n represents number of years.
At 7% interest rate:
Value of bond A = [tex]\frac{8000}{(1+0.07)^2^0} = 2067.35[/tex]
Value of bond B = [tex]\frac{8000}{(1+0.07)^1^0} = 4066.79[/tex]
At 14% interest rate:
Value of bond A = [tex] = \frac{8000}{(1+0.14)^20} = 582.09 [/tex]
Value of bond B = [tex] = \frac{8000}{(1+0.14)^10} = 2157.95 [/tex]
The difference between bond A at 7% and 14%:
$582.09 - $2067.35 = -$1485.26
The difference between bond B at 7% and 14%:
$2157.95 - $4066.79 = -$1908.84
% decrease between bond A and B:
[tex] \frac{1908.84 - 1485.26}{1908.84} * 100 = 22.19 [/tex]
Therefore, from the above calculations, we have the following:
Suppose the interest rate is 7%, Using the rule of 70, the value of Bond A is approximately $2067.35, and the value of Bond B is approximately $4066.79 .
Now suppose the interest rate increases to 14 percent.
Using the rule of 70, the value of Bond A is now approximately $528.09 , and the value of Bond B is approximately $2157.95 .
Comparing each bond's value at 7 percent versus 14 percent, Bond A's value decreases by a 22.19 percentage than Bond B's value.
The value of a bond decreases when the interest rate increases, and bonds with a longer time to maturity are more sensitive to changes in the interest rate.
According to Keynesian business cycle theory, A. inflation is procyclical and leading. B. the procyclical movement of investment is well explained when shocks to durable goods are themselves a main source of the cycle (so-called "animal spirits"), but not when cycles are caused by fluctuations in the LM curve. C. beneficial aggregate demand shocks, regardless of whether they shift the IS curve or the LM curve, will increase both output and the real interest rate. D. the procyclical behavior of labor productivity occurs due to firms' labor hoarding practices.
Answer: D. the procyclical behavior of labor productivity occurs due to firms' labor hoarding practices.
Explanation:
Keynesian Economists argue that firms practice labor hoarding which is the practice of keeping workers when they should not such as when there is a Recession. They should not keep these workers because demand has slowed so keeping them means that they will not be producing to meet the demand.
The procyclical behavior of labor productivity means that labor productivity goes by the Business Cycle in that it is high when the Economy is booming and low when it is in a Recession.
Productivity is calculated by dividing goods produced by the number of labor producing them.
By refusing to fire workers during a Recession, there will be too many workers producing too few goods which will decrease labor productivity which is why according to Keynesian Economists, the productivity is low in Recessions.
Assume that Corn Co. sold 7,500 units of Product A and 2,500 units of Product B during the past year. The unit contribution margins for Products A and B are $33 and $56, respectively. Corn has fixed costs of $328,000. The break-even point in units is
Answer:
Break-even point (units)= 8,464 units
Explanation:
Giving the following information:
Assume that Corn Co. sold 7,500 units of Product A and 2,500 units of Product B during the past year. The unit contribution margins for Products A and B are $33 and $56, respectively. Corn has fixed costs of $328,000.
First, we need to calculate the proportion of sales:
Product A= 7,500/10,000= 0.75
Product B= 2,500/10,000= 0.25
Now, using the following formula, we can determine the break-even point in units:
Break-even point (units)= Total fixed costs / Weighted average contribution margin
Break-even point (units)= 328,000/ (0.75*33 + 0.25*56)
Break-even point (units)= 328,000/38.75
Break-even point (units)= 8,464 units
g "At the start of the current year, Minuteman Corporation had a credit balance in the Allowance for Doubtful Accounts of $3,500. During the year a monthly provision of 3% of sales was made for uncollectible accounts. Sales for the year were $1,110,000, and $7,200 of accounts receivable were written off as worthless. No recoveries of accounts previously written off were made during the year. The year-end financial statements should show:"
Answer: Allowance for the doubtful accounts with a credit balance of $29,600
Explanation:
From the information that is provided in the question, the following can be deduced and the year-end financial statements should show:
Allowance for the doubtful accounts with a credit balance will be calculated as: the beginning allowance for the doubtful accounts + (the sales × Provision % ) - accounts receivable that were written off.
= $3,500 + ($1,110,000 × 3%) - $7,200
= $3500 + $33300 - $7200
= $36800 - $7200
= $29,600
Harry agreed to pay $100 to rent a rooftop spot in Seattle to watch the New Year's Eve festivities. The festivities were canceled at the last minute due to many of the guests' concern over news of a potential terrorist attack in a different section of the city. Harry is likely:
Answer:
Not obligated to pay under the frustration of purpose doctrine
Explanation:
In this specific scenario, Harry is likely Not obligated to pay under the frustration of purpose doctrine. This doctrine states that an individual does not need to abide by his/her contractual duties if a later unforeseen event impedes the buyer's initial purpose for entering into the contract, if and only if the seller knew of the buyer's purpose at the time of entering the contract. Therefore since Harry entered into the agreement for the sole reason of watching the New Year's Eve festivities and it was cancelled due to an unforeseen event (terrorist threat) he does not have to pay.
1. Which of the following is an example of the resource-based view of the firm? a. Philip Morris diversified by purchasing Kraft foods, because they did not want to put money back in the high-risk cigarette business. b. Google hires employees by asking them to fill out a 200-item questionnaire; many of the questions have nothing to do with computers. c. Halliburton takes advantage of the US war budget to bill the government at over $5 per gallon of gasoline. d. Canon manufactures scanners, printers, copiers and cameras, all using its capability in imaging.
Answer:
An example of the resource-based view of the firm is:
d. Canon manufactures scanners, printers, copiers and cameras, all using its capability in imaging.
Explanation:
The resource-based view is a model or framework for examining the potentials an organization possesses to develop a competitive advantage over other competitors. By applying this model, management sees resources as key to superior firm performance. It therefore focuses its attention on internal resources in an effort to identify those assets, capabilities, and competencies with the potential to deliver superior competitive advantages.
The other approaches mentioned do not consider the firm's internal capabilities as a means of competitive advantage.
Freya Co. has two patents that have allegedly been infringed by competitors. After investigation, legal counsel informed Freya that it had a weak case for Patent A34 and a strong case in regard to Patent B19. Freya incurred additional legal fees to stop infringement on Patent B19. Both patents have a remaining legal life of 8 years. How should Freya account for these legal costs incurred relating to the two patents?
Answer:
Freya needs to expense costs for Patent A34 and capitalize costs for Patent B19.
Explanation:
Based on the scenario being described it can be said that Freya needs to expense costs for Patent A34 and capitalize costs for Patent B19. That is because a successful defense of a patent needs to be capitalized and amortized since you can now monetize and recover the costs incurred as well as make a profit off of the patent. On the other hand, unsuccessful defense of a patent needs to be expensed as incurred since that patent cannot be used to make money and recover costs.
Cash dividend payments were $25,000. Long-term investments were sold for $79,000 cash. A building costing $198,000 was purchased using $19,800 cash, and the balance was financed with a mortgage note payable. Stock was issued to stockholders in exchange for $110,000 cash. A $44,000 loan was made to a local inventory supplier; the loan will be repaid in twelve months. Equipment used in operations was sold for $37,000. Repaid a long-term note payable for $92,000 cash. Cash received from short-term bank loans totaled $71,000. Determine Smith’s cash flows from investing activities.
Answer:
$4,200
Explanation:
Data provided in the question:
Cash dividend payments = $25,000.
Cash from selling of Long-term investments = $79,000.
Cash used for purchasing a building costing $198,000 = $19,800
Sale of equipment = $37,000
Long term note payable = $92,000 cash
Now,
The net cash from investing activities will be
= sale of long term investments - purchase of building + sale of equipment - purchase of investments
= $79,000 - $19,800 + $37,000 - $92000
= $4,200.
On January 2, Todd Company acquired 40% of the outstanding stock of McGuire Company for $205,000. For the year ending December 31, McGuire earned income of $48,000 and paid dividends of $14,000. Required: Prepare the entries for Todd Company for the purchase of the stock, share of McGuire income, and dividends received from McGuire.
Jan. 2__________
Dec. 31 _________
Dec. 31__________
Answer:
Dr equity investment $205,000
Cr cash $205,000
Dr equity investment $19200
Cr share of net income of affiliate company $19200
Dr cash $5,600
Cr equity investment $5,600
Explanation:
The cash of $205,000 paid for the equity investment would be credited to cash account while equity investment is debited with the same amount.
The share of Todd Company from the earned income is 40% of the earned income of $48,000 which is $19200 .
The share of dividends that accrued to Todd is 40% of $14,000 dividends paid which is $5,600
On January 1, Year 1, the Accounts Receivable balance was $21,000 and the balance in the Allowance for Doubtful Accounts was $1,900. On January 15, Year 1, an $530 uncollectible account was written-off. What is the net realizable value of accounts receivable immediately after the write-off
Answer:
$19,100
Explanation:
Accounts receivable represents amount owed to a business by its customers for products or services offered. It is payable in the future.
When collection is uncertain the amount is put in doubtful account.
If an amount is confirmed to be uncollectible it is written off as a loss
In this scenario we are calculating realisable value after write-off
Account receivable after write-off = Account receivable balance - Uncollectible amount
Account receivable after write-off= 21,000 - 530= $20,470
Allowance balance after write-off= Doubtful account - Uncollectible account
Allowance balance after write-off= 1,900 - 530 = $1,370
Net realisable value after write-off= 20,470 - 1,370= $19,100
Brief Exercise 3-5 On July 1, 2017, Major Co. pays $27,600 to Cruz Insurance Co. for a 3-year insurance contract. Both companies have fiscal years ending December 31. For Major Co., journalize and post the entry on July 1 and the annual adjusting entry on December 31. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
Answer: Please see below
Explanation:
Journal to record the Adjusting entry for Major Co payment to Cruz Insurance
Date Account Debit Credit
July 1 Prepaid insurance $27, 600
Cash $27,600
Date Account Debit Credit
Dec 31 Insurance expense $4,600
Prepaid insurance $4,600
Working : July - december= 6months, insurance contract= 3 years(3x12months =36months )
Insurance expense = $27,600 x
(6/36)= $4,600
Required information
An internal control system consists of the policies and procedures managers use to protect assets, ensure reliable accounting, promote efficient operations, and uphold company policies. It can prevent avoidable losses and help managers both plan operations and monitor company and human performance. Principles of good internal control include establishing responsibilities, maintaining adequate records, insuring assets and bonding employees, separating recordkeeping from custody of assets, dividing responsibilities for related transactions, applying technological controls, and performing regular independent reviews. Sarbanes-Oxley Act requires each of the following:
A. An effective internal control.
B. Light penalties for violators.
C. Auditors must evaluate internal controls.
D. Auditor's work overseen by Public Accounting Board.
Answer:
Options A and D.
Explanation:
Just like it is given in the question above, the concept of internal control system has to do with the regulations and policies that are being set by each companies/firms or agencies or bodies or business organization in order to increase their productivity and efficiency.
The Sarbanes-Oxley Act was enacted on the 30th day of the month of July in the year 2002 by the 107th United States of America congress and its main work or purpose is to make sure sure that there is reliability and transparency in financial and accounting institutions and also to protect investors.
When a breech is perceived, group of people will be appointed to conduct "An effective internal control" and also for the "Auditor's work overseen by Public Accounting Board."
Answer:
A. An effective internal control
C. Auditors must evaluate internal controls
Explanation:
SOX requires managers and auditors whose stock is publicly traded to have an effective internal control system, auditors must evaluate internal controls, violators may receive harsh penalties (not light penalties), and auditors’ work is overseen by Public Company Accounting Oversight Board (PCAOB) (not by the Public Accounting Board).
The Nelson Company has $1,750,000 in current assets and $700,000 in current liabilities. Its initial inventory level is $490,000, and it will raise funds as additional notes payable and use them to increase inventory. How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 1.9? Round your answer to the nearest cent. $ What will be the firm's quick ratio after Nelson has raised the maximum amount of short-term funds? Round your answer to two decimal places.
Answer:
(a) Short-term debt can increase by a maximum of $466,666.67 without pushing its current ratio below 1.9
(b) The firm's quick ratio after Nelson has raised the maximum amount of short-term funds is 1.34
Explanation:
Current assets = $1,750,000
Current liabilities = $700,000
Initial inventory level = $490,000
Current ratio = Current assets ÷ Current liabilities
= $1,750,000 ÷ $700,000 = 2.5
1.9 = (Current assets + [tex]\Delta{NP[/tex]) ÷ (Current liabilities + [tex]\Delta{NP[/tex])
1.9 = ($1,750,000 + [tex]\Delta{NP[/tex]) ÷ ($700,000 + [tex]\Delta{NP[/tex])
1.9 × ($700,000 + [tex]\Delta{NP[/tex]) = ($1,750,000 + [tex]\Delta{NP[/tex])
$1,330,000 + [tex]1.9\Delta{NP[/tex] = $1,750,000 + [tex]\Delta{NP[/tex]
[tex]0.9\Delta{NP[/tex] = $1,750,000 - $1,330,000
[tex]\Delta{NP[/tex] = $466,666.67
Short-term debt can increase by a maximum of $466,666.67 without pushing its current ratio below 1.9
Quick ratio = (Current assets - Inventories) ÷ Current liabilities
= $937,500 ÷ $700,000
= 1.34
A young couple is planning for the education of their two children. They plan to invest the same amount of money at the end of each of the next 16 years. The first contribution will be made at the end of the year and the final contribution will be made at the end of the year the older child enters college. The money will be invested in securities that are certain to earn a return of 8% each year. The older child will begin college in 16 years and the second child will begin college in 18 years. The parents anticipate college costs of $25,000 a year (per child). These costs must be paid at the end of each year. If each child takes four years to complete their college degrees, then how much money must the couple save each year
Answer:
The couple must save $ 6,598 each year
Explanation:
Calculating the payment amount:
Cost per year = $25,000 per each child
Cost for 4 years = $25,000 × 4 = $100,000
For the oldest child, the college will begin in 16 years and the second child the college will begin in 18 years.
Calculating the amount to be deposited each year for the oldest child.
Using Microsoft Excel PMT function
Rate = 8%
N = 16
PV = 0
FV = -100000
= $3,298
Therefore, they must deposit $3,298 each year for their oldest child.
Calculating the amount to be deposited each year for the second child:
Using Microsoft Excel PMT function
Rate = 8%
N = 18
PV = 0
FV = -100000
= $2,670
Therefore, they must deposit $2,670 each year for their second child.
Total sum to be saved per year = $3,298 + $2,670 = $6,598
Suppose that Dmitri, an economist from an AM talk radio program, and Frances, an economist from a school of industrial relations, are arguing over saving incentives. The following dialogue shows an excerpt from their debate:
Caroline: The usefulness of government intervention in the economy is a long-standing issue that economists continue to debate.
Antonio: I feel that government involvement in the economy should be reduced because government programs cause more harm than good.
Caroline: While I do agree that government programs can be inefficient, I really think they are necessary to help the less fortunate.
1. The disagreement between these economists is most likely due to
a. differences in values
b. differences in scientific judgement
c.differences in perception verse reality.
2. Despite their differences, with which proposition are two economists chosen at random most likely to agree?
a. Lawyers make up an excessive percentage of elected officials.
b. Minimum wage laws do more to harm low-skilled workers than help them.
c. Tariffs and import quotas generally reduce economic welfare.
Answer:
1. The disagreement between these economists is most likely due to
a. differences in values
2. Despite their differences, with which proposition are two economists chosen at random most likely to agree?
a. Lawyers make up an excessive percentage of elected officials.
Explanation:
Economists chosen at random do not usually agree on economic events and realities, instead, they are more likely to agree on issues that are not economic. They offer differing opinions based on similar principles. Most of their disagreements stem from differences in what they place their values on. Some value market-oriented approaches while others value government interventions in market situations, with other variants in-between.
13) Baxter & Baxter has total assets of $710,000. There are 45,000 shares of stock outstanding with a market value of $28 a share. The firm has a net profit margin of 7.1 percent and a total asset turnover of 1.29. What is the price-earnings ratio?
Answer:
19.38
Explanation:
Baxter & Baxter
Market value share/ Percentage of profit margin ×(Total assets ×Total asset turnover)/Outstanding shares
Where:
Market value shares=28
Percentage of profit margin =71%
Total assets =710,000
Total asset turnover=1.29
Outstanding shares =45,000
Hence:
Price-earnings ratio =
$28/[0.071 ×($710,000 ×1.29)]/45,000
=19.38
Bannister Co. is thinking about having one of its products manufactured by a subcontractor. Currently, the cost of manufacturing 1,000 units is: Direct material $ 45,000 Direct labor 30,000 Factory overhead (30% is variable) 98,000 If Bannister can buy 1,000 units from an outside supplier for $100,000, it should:
Answer:
Production total cost= $104,400
It is more profitable to buy the product.
Explanation:
Giving the following information:
Production costs (1,000 units):
Direct material $ 45,000
Direct labor $30,000
Factory overhead (30% is variable) 98,000
Buy:
1,000 units from an outside supplier for $100,000.
I will assume that the fixed overhead is not avoidable, therefore it should not be taken into account for the decision making.
Production total cost= 45,000 + 30,000 + (98,000*0.3)
Production total cost= $104,400
It is more profitable to buy the product.
Cane Company manufactures two products called Alpha and Beta that sell for $185 and $120, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 112,000 units of each product. Its unit costs for each product at this level of activity are given below:
Alpha Beta
Direct materials $ 30 $ 10
Direct labor 22 29
Variable manufacturing overhead 20 13
Traceable fixed manufacturing overhead 24 26
Variable selling expenses 20 16
Common fixed expenses 23 18
Total cost per unit $ 139 $ 112
The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are deemed unavoidable and have been allocated to products based on sales dollars.
Required:
7.
Assume that Cane normally produces and sells 48,000 Betas per year. If Cane discontinues the Beta product line, how much will profits increase or decrease?
8.
Assume that Cane normally produces and sells 68,000 Betas and 88,000 Alphas per year. If Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by 12,000 units. If Cane discontinues the Beta product line, how much would profits increase or decrease?
9.
Assume that Cane expects to produce and sell 88,000 Alphas during the current year. A supplier has offered to manufacture and deliver 88,000 Alphas to Cane for a price of $112 per unit. If Cane buys 88,000 units from the supplier instead of making those units, how much will profits increase or decrease?
10.
Assume that Cane expects to produce and sell 58,000 Alphas during the current year. A supplier has offered to manufacture and deliver 58,000 Alphas to Cane for a price of $112 per unit. If Cane buys 58,000 units from the supplier instead of making those units, how much will profits increase or decrease?
13.
Assume that Cane’s customers would buy a maximum of 88,000 units of Alpha and 68,000 units of Beta. Also assume that the company’s raw material available for production is limited to 172,000 pounds. How many units of each product should Cane produce to maximize its profits?
14.
Assume that Cane’s customers would buy a maximum of 88,000 units of Alpha and 68,000 units of Beta. Also assume that the company’s raw material available for production is limited to 172,000 pounds. What is the maximum contribution margin Cane Company can earn given the limited quantity of raw materials?
15.
Assume that Cane’s customers would buy a maximum of 88,000 units of Alpha and 68,000 units of Beta. Also assume that the company’s raw material available for production is limited to 172,000 pounds. Up to how much should it be willing to pay per pound for additional raw materials? (Round your answer to 2 decimal places.)
Answer:
7. profits will decrease by:
lost profits = total revenue - total costs = $5,760,000 - $5,376,000 = $384,000unavoidable fixed costs = $18 x 48,000 units = $864,000total decrease in profits ($1,248,000)8. profits will decrease by:
lost profits from Beta product line = $8,160,000 - $7,616,000 = ($544,000)increased profits from Alpha sales = $2,220,000 - $1,668,000 = $552,000unavoidable fixed costs = (68,000 x $18) - (12,000 x $23) = (948,000)total decrease in profits ($940,000)9. profits will increase by:
avoidable costs of producing 88,000 Alphas = 88,000 x $116 = $10,208,000cost of purchasing 88,000 x $112 = ($9,856,000)total increase in profits = $10,208,000 - $9,856,000 = $352,00010. profits will increase by:
avoidable costs of producing 58,000 Alphas = 58,000 x $116 = $6,728,000cost of purchasing 58,000 x $112 = ($6,496,000)total increase in profits = $6,728,000 - $6,496,000 = $232,00013. Since the profit margin per pound of direct materials used for Alphas = $7.67 and Betas = $4, the company should produce Alphas. It should produce 28,666 Alphas and 2 Betas. Total profits = $1,318,636 + $16 = $1,318,652
14. Maximum contribution margin:
Contribution margin Alphas = 28,666 units x $92 = $2,637,272Contribution margin Betas = 2 units x $52 = $104total contribution margin = $2,637,37615. Since the profit margin per pound of materials used Betas is only $4, there is not much room for increasing the materials costs. If you want to produce Betas, you would be willing to pay less than $9 per pound of direct materials.
But since the profit margin per pound of direct materials used on Alphas is much higher ($7.67), as long as you pay less than $12.97 per pound of direct materials you can still make a profit producing Alphas. So you could pay a much higher price if you wanted to produce Alphas and still make a profit.
Explanation:
Alpha Beta
Sales price $185 $120
Direct materials ($5 per pound) $30 $10
pounds of materials used 6 2
profit margin per pound $7.67 $4
Direct labor $22 $29
Variable manufacturing overhead $20 $13
Traceable fixed man. overhead $24 $26
Variable selling expenses $20 $16
Common fixed expenses (unavoidable) $23 $18
Total cost per unit $139 $112
total production capacity 112,000 units per year
contribution margin = sales revenue - variable costs:
contribution margin Alpha = $185 - $93 = $92
contribution margin Beta = $120 - $68 = $52
One reason the federal government might "bail out" farmers in flood prone areas of the country? A. Such flooding is diversifiable, but the market for such insurance policies cannot clear without the assistance of the International Community. B. Such flooding is diversifiable, but insurance company CEOs are more concerned with their stockminusholder wealth than the wellminusbeing of farmers. C. Such flooding is not diversifiable and therefore only nonminusprofit entities, such as the federal government, can cover the risks. D. Such flooding is known to happen on a regular basis and therefore there is no "risk" to be insured against.
Answer: Such flooding is not diversifiable and therefore only non-profit entities, such as the federal government, can cover the risks
Explanation:
One reason that can make the federal ggovernment to bail out farmers in the flood prone areas of the country will be in a situation whereby the flooding is not flooding is not diversifiable and therefore only non-profit entities, such as the federal government, can cover the risks.
In this situation since the risk associated with the flooding can't be diversified, this can lead to profit making entities to run from bailing out the farmers because they'll believe there's nothing to gain for them so it might be left for the government to take charge and help out.
g On January 1, 2020, Marigold Company issued 10-year, $1,890,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 16 shares of Marigold common stock. Marigold’s net income in 2020 was $470,000, and its tax rate was 20%. The company had 94,000 shares of common stock outstanding throughout 2020. None of the bonds were converted in 2020. (a) Compute diluted earnings per share for 2020.
Answer:
$3.78
Explanation:
The First step is to calculate basic earning per share then making the adjustments to the basic earning per share to arrive to a diluted earning per share.
Basic Earning per Share = Earnings Attributable to Holders of Common Stock / Weighted Average Number of Common Stock Holders.
Earnings Attributable to Holders of Common Stock Calculation :
Net Income $470,000
Less Bond Interest ($1,890,000×6%×80%) ($90,720)
Earnings Attributable to Holders of Common Stock $379,280
Weighted Average Number of Common Stock Holders Calculation :
Outstanding Common Shares 94,000
Weighted Average Number of Common Stock Holders 94,000
Basic Earning per Share = $379,280 / 94,000 = $4.03
Diluted Earnings per Share = Adjusted Earnings Attributable to Holders of Common Stock / Adjusted Weighted Average Number of Common Stock Holders.
Adjusted Earnings Attributable to Holders of Common Stock Calculation :
Earnings Attributable to Holders of Common Stock $379,280
Add Back Bond Interest ($1,890,000×6%×80%) $90,720
Adjusted Earnings Attributable to Holders of Common Stock $470,000
Adjusted Weighted Average Number of Common Stock Holders.
Outstanding Common Shares 94,000
Add Convertible Bonds ($1,890,000/$1,000×16) 30,240
Adjusted Weighted Average Number of Common Stock Holders 124,240
Diluted Earnings per Share = $470,000 / 124,240 = $3.78
The materials purchase price variance, in a standard cost system, is obtained by multiplying the: Group of answer choices a. Actual price by the difference between actual quantity purchased and standard quantity used. b. Actual quantity purchased by the difference between actual price and standard price. c. Standard price by the difference between standard quantity purchased and standard quantity used. d. Standard quantity purchased by the difference between actual price and standard price.
Answer:
b. Actual quantity purchased by the difference between actual price and standard price
Explanation:
The formula to compute the material purchase price is shown below:
= Actual Quantity × (Standard Price - Actual Price)
It is derived by taking a difference between the standard price and the actual price and then multiplying it by the actual quantity so that the material price or material purchase price variance could come
Hence, the correct option is b.
b. Actual quantity purchased by the difference between actual price and standard price
When computing materials purchase price variance in standard costing system, we use the formula below ;
= Actual Quantity × (Standard Price - Actual Price)
Material purchase price variance is derived by subtracting standard price from actual price and then multiplying it by the actual quantity so that we would get the value.
Thus, the materials purchase price variance, in a standard cost system, is obtained by multiplying actual quantity purchased by the difference between actual price and standard price.
learn more at : https://brainly.com/question/15578739
At March 31, Cummins Co. had an unadjusted balance in its cash account of $9,700. At the end of March, the company determined that it had outstanding checks of $950, deposits in transit of $620, a bank service charge of $25, and an NSF check from a customer for $210. What is the true cash balance at March 31
Answer:
$9,465
Explanation:
The computation of the true cash balance as on March 31 is shown below:
= Unadjusted cash balance as on March 31 - bank service charges - NSF check from a customer
= $9,700 - $25 - $210
= $9,465
These above two items are to be deducted
The other two items i.e outstanding checks and the deposit in transit are related to the bank balance and the same is not considered
Save-the-Earth Co. reports the following income statement accounts for the year ended December 31. Sales discounts $ 890 Office salaries expense 3,400 Rent expense—Office space 2,900 Advertising expense 780 Sales returns and allowances 390 Office supplies expense 780 Cost of goods sold 11,800 Sales 48,000 Insurance expense 2,400 Sales staff salaries 3,900 Required: Prepare a multiple-step income statement for the year ended December 31.
Answer:
Multiple-step income statement for the year ended December 31.
Sales 48,000
Less Sales returns and allowances 390
Net Sales 47,610
Less Cost of goods sold (11,800)
Gross Profit 35,810
Less Operating Expenses :
Sales discounts 890
Office salaries expense 3,400
Rent expense—Office space 2,900
Advertising expense 780
Office supplies expense 780
Insurance expense 2,400
Sales staff salaries 3,900 (15,050)
Operating Income / (Loss) 20,760
Explanation:
The multiple-step income statement shows separately profit derived from Primary Activities of an Entity (Operating Profit) and the profit that includes Secondary Activities of an Entity (Net Profit)
In this case, Save-the-Earth Co derived its profit only from Primary Activities.
The Accounts Receivable balance for Bach Consulting is $4,400,000 as of May 31, 2020. Before calculating and recording the month’s bad debt expense, there is a credit balance in the Allowance for Doubtful Accounts of $80,000. The May 2020 net sales were $30,000,000. In the past several years, 1% of net sales have proven uncollectible. An aging of accounts receivable results in a $360,000 estimate for the Allowance for Doubtful Accounts as of May 31, 2020.
PART A: PERCENT OF SALES METHOD
Assume that Bach Consulting uses the percent of sales method to estimate future uncollectible accounts.
What adjusting entry does Bach make to record May 2020 Bad Debt Expense?
What is "Accounts Receivable, net" on Bach’s May 31, 2018 Balance Sheet? $___________
What is "Bad Debt Expense" on Bach’s May 2020 Income Statement? $___________
PART B: ANALYSIS OF RECEIVABLES METHOD
Assume that Bach Consulting instead uses the analysis of receivables method to estimate future uncollectible accounts.
What adjusting entry does Bach make to record May 2020 Bad Debt Expense?
What is "Accounts Receivable, net" on Bach’s May 31, 2018 Balance Sheet? $___________
What is "Bad Debt Expense" on Bach’s May 2020 Income Statement? $___________
Problem 3
Use PVH Corp.’s financial statement information to answer the following questions.
Provide the following account balances for PVH:
February 2, 2020
February 3, 2019
Accounts Receivable (gross)
Allowance for Doubtful Accounts
Accounts Receivable, net
Which of the above numbers represents the amount of its February 2, 2020 Accounts Receivable balance that PVH expects to collect in the subsequent year(s)?
Which of the above numbers represents that amount that PVH believes it will not collect from its customers as of February 2, 2020?
Which of the above numbers represents the total amount PVH is owed by customers as of February 2, 2020?
Provide the journal entry (both accounts and amounts) that PVH must have made to record its estimate of Bad Debt Expense in fiscal year 2019.
Provide the journal entry (both accounts and amounts) that PVH must have made to record Accounts Receivable writeoffs in fiscal year 2019.
Answer:
Assume that Bach Consulting uses the percent of sales method to estimate future uncollectible accounts.
What adjusting entry does Bach make to record May 2020 Bad Debt Expense?
Dr Bad debt expense 300,000 (= $30,000,000 x 1%)
Cr Allowance for doubtful accounts 300,000
What is "Accounts Receivable, net" on Bach’s May 31, 2018 Balance Sheet? $4,100,000 (= $4,400,000 - $300,000)
What is "Bad Debt Expense" on Bach’s May 2020 Income Statement? $300,000
Assume that Bach Consulting instead uses the analysis of receivables method to estimate future uncollectible accounts.
What adjusting entry does Bach make to record May 2020 Bad Debt Expense?
Dr Bad debt expense 280,000 (= $360,000 - $80,000)
Cr Allowance for doubtful accounts 280,000
What is "Accounts Receivable, net" on Bach’s May 31, 2018 Balance Sheet? $4,120,000
What is "Bad Debt Expense" on Bach’s May 2020 Income Statement? $280,000
Use PVH Corp.’s financial statement information to answer the following questions.
Provide the following account balances for PVH:
February 2, 2020 February 3, 2019
Accounts Receivable (gross) $762,000,000 $800,000,000
Allowance for Doubtful Accounts $21,000,000 $22,000,000
Accounts Receivable, net $741,000,000 $778,000,000
Which of the above numbers represents the amount of its February 2, 2020 Accounts Receivable balance that PVH expects to collect in the subsequent year(s)?
$741,000,000
Which of the above numbers represents that amount that PVH believes it will not collect from its customers as of February 2, 2020?
$21,000,000
Which of the above numbers represents the total amount PVH is owed by customers as of February 2, 2020?
$762,000,000
Provide the journal entry (both accounts and amounts) that PVH must have made to record its estimate of Bad Debt Expense in fiscal year 2019.
Dr Bad debt expense 22,000,000
Cr Allowance for doubtful accounts 22,000,000
Provide the journal entry (both accounts and amounts) that PVH must have made to record Accounts Receivable writeoffs in fiscal year 2019.
Dr Allowance for doubtful accounts 22,000,000
Cr Accounts receivable 22,000,000
Explanation:
Accounts receivable = $4,400,000
beginning balance Allowance for doubtful accounts = $80,000
May's net sales = $30,000,000
1% of net sales are uncollectible
aging of accounts receivable results in a $360,000 estimate for the Allowance for doubtful accounts as of May 31, 2020
