Answer: c)The actuarially determined amount necessary to cover claims, expenditures, and catastrophic losses.
Explanation:
The Expenditure on the account related to self - insurance activities refers to the amounts that will be deducted from the fund for anything insurance related.
The insurance is meant to cover the claims and unlikely events of catastrophies. Therefore when those things do occur it will be deducted from the service fund to cover those things.
Those along with expenses incurred to maintain the fund will be considered expenses and that is the maximum amounts that can be deducted from the fund.
Ecominus Eliminator Manufacturing produces a chemical pesticide and uses process costing. There are three processing departmentslong dashMixing, Refining, and Packaging. On January 1, the first departmentlong dashMixinglong dashhad no beginning inventory. During January, 48 comma 000 fl. oz. of chemicals were started in production. Of these, 38 comma 000 fl. oz. were completed, and 10 comma 000 fl. oz. remained in process. In the Mixing Department, all direct materials are added at the beginning of the production process, and conversion costs are applied evenly throughout the process. The weightedminusaverage method is used.
At the end of January, the equivalent unit data for the Mixing Department were as follows:
WHOLE UNITS Equivalent Units Equivalent Units
Units to be accounted for Direct Materials Cost Conversion Costs
Completed and transferred out 38,000 38,000 38,000
Ending work-in-process 10,000 10,000 44,00
48,000 48,000 42,400
Percent complete for conversion costs: 44%
In addition to the above, the costs per equivalent unit were $1.35 for direct m conversion costs. Using this data, calculate the full cost of the ending WIP balance in the Mixing Department. The weighted-average method is used.
A) $36,380
B) $13,500
C) $64,800
D) $42,400
Answer:
A) $36,380
INCOMPLETE INFORMATION
The text from the book states:
$1.35 direct materials equivalent unit cost
$5.20 conversion cost equivalent unit cost
Explanation:
We must look at the ending work-in-process line and multiply the above equivalent cost by the units to be accounted for on each category
10,000 units x $ 1.35 materials cost = $ 13,500 material cost
4,400 units x $5.20 conversion cost = $ 22,880 converion cost
total cost 22,880 + 13,500 = 36,380
6. The term strategy can be defined as: a. A company’s market share, which allows it to outperform competition. b. A coordinated deployment of a firm’s resources to achieve competitive advantage. c. The sum total of a company’s financial, organizational, physical and human resources. d. All of the above.
Answer:
A coordinated deployment of a firm’s resources to achieve competitive advantage.
Explanation:
The term strategy can be defined as a coordinated deployment of a firm’s resources to achieve competitive advantage. It is a long-term plan of action that is focused on using a firm's available resources to achieve set objectives and goals, which includes dominating the market, meeting customer's demands, expanding the business, etc.
The executive management team ensures that their business strategy is in tandem with the aim, objectives vision and mission. A good business strategy is a continuous process that should function as a roadmap or guide to achieve competitive advantage, sustained profitability, growth and development of an organization.
A business strategy can be classified into various categories, such as product strategy, marketing strategy, growth strategy etc.
Answer:
The correct answer is:
A coordinated deployment of a firm’s resources to achieve competitive advantage. (b)
Explanation:
The goal of every business is to maximize profit, hence, business strategy is paramount in achieving this, and it is a combination of all the decisions taken, and actions implemented to achieve business goals and to gain a competitive advantage in the market. From this definition, it is therefore noted that business strategies are effectively drawn up at the beginning of the business year, because it is like a roadmap for the business, and implemented throughout the period, although, it can also change depending on the condition of the business environment. Note also that business strategy is different from the business plan, while business plans sets the goals of the business, business strategy states how to achieve these goals.
A manager buys three shares of stock today, and then sells one of those shares each year for the next 3 years. His actions and the price history of the stock are summarized below. The stock pays no dividends.
Time Price Action
0 $190 Buy 3 shares
1 200 Sell 1 share
2 200 Sell 1 share
3 200 Sell 1 share
A. Calculate the time-weighted geometric average return on this "portfolio."
B. Calculate the time-weighted arithmetic average return on this portfolio.
C. Calculate the dollar-weighted average return on this portfolio.
Answer:
a. The Geometric average return is 1.72%
b. The Arithmetic average return is 1.75%
c. The Dollar weighted average return is 2.61%
Explanation:
a) In order to calculate the time-weighted geometric average return we would have to calculate first the Holding period return as follows:
Holding period return = (200 - 190) / 190 = 5.263%
Hence, Geometric average return = (1 + .05263)^(1/3) - 1 = 1.72%
b) To calculate time-weighted arithmetic average return we have to make the following calculation:
Arithmetic average return = 5.263% / 3 = 1.75%
c) To calculate time-weighted arithmetic average return we would have to make the following calculation:
Dollar weighted average return=-190*3 + 200/(1+r) + 200/(1+r)^2 + 200 / (1+r)^3 = 0
= 2.61%
Farron Corporation, which has only one product, has provided the following data concerning its most recent month of operations:
Selling price $92
Units in beginning inventory 0
Units produced 8,700
Units sold 8,300
Units ending inventory 400
Variable costs per unit:
Direct materials $13
Direct labor $55
Variable manufacturing overhead $1
Variable selling and administrative $5
Fixed costs:
Fixed manufacturing overhead $130,500
Fixed selling and administrative $8,300
What is the unit product cost for the month under absorption costing?
a) $74 per unit
b) $89 per unit
c) $69 per unit
d) $84 per unit
Answer:
Unit product cost= $84
Explanation:
Giving the following information:
Units produced 8,700
Direct materials $13
Direct labor $55
Variable manufacturing overhead $1
Fixed manufacturing overhead $130,500
The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.
Unitary fixed overhead= 130,500/8,700= $15
Unit product cost= 13 + 55 + 1 + 15= $84
Gomez runs a small pottery firm. He hires one helper at $16,500 per year, pays annual rent of $6,000 for his shop, and spends $22,500 per year on materials. He has $40,000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could earn him $5,000 per year if alternatively invested. He has been offered $19,500 per year to work as a potter for a competitor. He estimates he could use his talents to earn an additional $5,500 per year in consulting fees if he were working full time as a potter. Total annual revenue from pottery sales is $89,000.Calculate the accounting profit and the economic profit for Gomez's pottery firm.
Accounting profit = ?
Economic profit = ?
Answer:
$44,000
$14,000
Explanation:
Accounting profit is total revenue less total explicit cost.
Accounting profit = Revenue - Explicit cost
Total explicit cost = $16,500 + $6,000 + $22,500 = $45,000
Total revenue = $89,000
Accounting profit = $89,000 - $45,000 = $44,000
Economic profit is accounting profit less implicit cost or opportunity cost.
Opportunity cost is the cost of the next best option forgone when one alternative is chosen over other alternatives.
Opportunity cost = $5,500 + $19,500 + $5,000 = $30,000
Economic profit = $44,000 - $30,000 = $14,000
I hope my answer helps you
Big data analytics programs (which analyze massive data sets to make decisions) use gigantic computing power to quantify trends that would be beyond the grasp of human observers. As the use of this quantitative analysis increases, do you think it may decrease the "humanity of production" in organizations?
Answer:
The correct answer is: No, it may not decrease the humanity of production in organizations.
Explanation:
To begin with, the term known as ''humanity of production'' refers to that human element that gives to the company its capability of leadership and other human abilities. Moreover, when it comes to the big data analytics those programs would not decrease the humanity of production because in order to create all those programs and in order to read all the information that those programs give and to use it and implement there will be a need of using human capital to complete the whole objective. So therefore that human will be as need as machines.
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 4.4%. The probability distributions of the risky funds are: Expected Return Standard Deviation Stock fund (S) 14% 34% Bond fund (B) 5% 28% The correlation between the fund returns is 0.0214. What is the expected return and standard deviation for the minimum-variance portfolio of the two risky funds
Answer:
Explanation:
Expected Return stock fund ([tex]E_{rs[/tex]) = 14% = 0.14, Expected Return bond fund ([tex]E_{rb[/tex]) = 5% = 0.05, Standard Deviation stock fund ([tex]\sigma_s[/tex]) = 34% = 0.34, Standard Deviation bond fund ([tex]\sigma_b[/tex]) = 28% = 0.28, correlation (ρ) between the fund returns is 0.0214
The environmental protection agency of a county would like to preserve a piece of land as a wilderness area. The current owner has offered to lease the land to the county for 20 years in return for a lump-sum payment of $1.1 million, which would be paid at the beginning of the 20-year period. The agency has estimated that the land would generate $110,000 per year in benefits to hunters, bird watchers, and hikers. Assume that the lease price represents the social opportunity cost of the land and that the appropriate real discount rate is 4 percent.a. Assuming that the yearly benefits, which are measured in real dollars, accrue at the end of each of the 20 years, calculate the net benefits of leasing the land.b. Some analysts in the agency argue that the annual real benefits are likely to grow at a rate of 2 percent per year due to increasing population and county income. Recalculate the net benefits assuming that they are correct.c. Imagine that the current owner of the land was willing to sell the land for $2 million. Assuming this amount equaled the social opportunity cost of the land, calculate the net benefits if the county were to purchase the land as a permanent wildlife refuge. In making these calculations, first assume a zero annual growth rate in the $110,000 of annual real benefits; then assume that these benefits grow at a rate of 2 percent per year.
Answer: The answer is given below
Explanation:
Here , we are going to apply the present value of annuty formula.
a. Social Opportunity cost = $1.1 Million
The Yearly cash flows = $110,000
Time (n) = 20 years
The Discount rate (R) = 4%
Net benefits= Present value of cash inflows - the intial socail opportnity cost
Net benefits= Yearly cash flow × (1 - 1/(1+R)^n) / R - 1100000
Net benefits = 110000 × (1 - 1/1.04^20)/0.04 - (1100000)
= $394936
b. We will use the formula for present value of an annuity with the growth rate in benefits as 2 percent.
Firstly, dg= (0.04 - 0.02)/ (1+0.02)
= 0.01961
PV(benefits) = [($110,000)÷ (1+0.02)][1-(1+dg)-20]/dg]
= $1,770,045
NPV = $1,770,045 - $1,100,000= $670,045
Selma operates a contractor's supply store. She maintains her books using the cash method. At the end of the year, her accountant computes her accrual basis income that is used on her tax return. For 2015, Selma had cash receipts of $1.4 million, which included $200,000 collected on accounts receivable from 2014 sales. It also included the proceeds of a $100,000 bank loan. At the end of 2015, she had $250,000 in accounts receivale from customers, all from 2015 sales.
a. Compute Selma's accrual basis gross receipts for 2015
b. Selma paid cash for all of the purchases. The total amount paid for merchandise in 2014 was $1.3 million. At the end of 2014, she had merchandise on hand with a cost of $150,000. At the end of 2015, the cost of merchandise on hand was $300,000. Compute Selma's gross income from merchandise sales for 2015
Answer:
A.$1,350,000
B.$ 200,000
Explanation:
Selma
a.
Selma's accrual basis gross receipts for 2015 will be ;
Amount of Cash received by Selma $1,400,000
Less:
Accounts receivable collected (200,000)
Bank loan proceed(100,000)
Add: Ending accounts receivable 250,000
Gross receipts $1,350,000
b.Selma's gross income from merchandise sales for 2015 will be :
Gross receipts brought forward(A) $1,350,000
Cost of goods sold:
Selma Purchases$1,300,000
Inventory at the beginning 150,000
Ending inventory(300,000)
Gross income$ 200,000
(1,350,000-1,150,000)
(1,300,000+150,000-300,000)
=1,150,000
Should the home country be "large" relative to the world, its imposition of a tariff on imports would lead to an increase in domestic welfare if the terms-of-trade effect exceeds the sum of the:_________
a. revenue effect plus redistribution effect.
b. protective effect plus revenue effect.
c. consumption effect plus redistribution effect.
d. production distortion effect plus consumption distortion effect.
e. None of the above.
Answer:
Option e. is correct
Explanation:
The Terms of Trade is equal to the average price of exports / by the average price of imports. The terms-of-trade refers to the relative price of exports in terms of imports.
Protective effect refers to the wasted resources due to production of good at a higher cost. Consumption effect refers to the loss to consumer due to higher price that leads to less consumption.
Should the home country be "large" relative to the world, its imposition of a tariff on imports would lead to an increase in domestic welfare if the terms-of-trade effect exceeds the sum of the protective effect plus consumption effect
A company reported total assets at the end of 2017 of $95,000; including cash of $35,000, accounts receivable of $20,000, and inventory of $40,000. It reported total assets at the end of 2018 of $110,000; including cash of $44,000; accounts receivable of $29,000, and inventory of $37,000. Compute the net increase or decrease in cash in 2018. Decrease of $9,000 Increase of $15,000 Increase of $9,000 Decrease of $15,000
Answer:
The correct option is increase of $9,000
Explanation:
The increase or decrease in cash in 2018 could be determined by using the formula below which is coined from the statement of cash flow:
Cash at the end of the year=cash at the beginning plus +increase in cash
cash at the end of 2018 is $44,000 whereas cash at the beginning which is the same at closing balance of 2017 is $35,000
$44,000=$35,000+increase in cash
increase in cash =$44,000-$35,000
increase in cash in 2018=$9,000
Digger Inc. sells a high-speed retrieval system for mining information. It provides the following information for the year.
Budgeted Actual
Overhead cost $975,000 $950,000
Machine hours 50,000 45,000
Direct labor hours 100,000 92,000
Required:
a. Compute the predetermined overhead rate.
b. Determine the amount of overhead applied for the year.
Answer:
Predetermined overhead rate = $ 9.75 per direct labor hours
Overhead applied = $897,000
Explanation:
Given:
Budgeted Overhead cost = $975,000
Actual Overhead cost = $950,000
Budgeted Machine hours = 50,000
Actual Machine hours = 45,000
Budgeted Direct labor hours = 100,000
Actual Direct labor hours = 92,000
Computation:
(a) Predetermined overhead rate.
Predetermined overhead rate = budgeted overhead cost / budgeted direct labor hours
Predetermined overhead rate = $975,000 / 100,000
Predetermined overhead rate = $ 9.75 per direct labor hours
(b) Amount of overhead applied for the year.
Overhead applied = Actual hours × Predetermined overhead rate
Overhead applied = 92000 × $9.75
Overhead applied = $897,000
Holding other factors constant, if bad weather destroys the annual crop for carrots, it causes the supply curve for carrots to a. Shift to the left, causing the prices of carrots to rise b. The supply curve does not shift. Only the demand curve shifts. c. Shift to the left, causing the prices of carrots to fall d. Stay the sam
Answer: a. Shift to the left, causing the prices of carrots to rise
Explanation:
The bad weather destroyed the annual crop of carrots. This will reduce the supply for Carrots. A reduction in supply forces the Supply Curve to shift to the left and assuming the demand curve remains the same, the new supply curve will intersect the demand curve a higher equilibrium price.
This is done to obey the Rules of Supply that when a good is scarce, it is more expensive.
Notice how the supply curve shifted left in the diagram and prices rose.
Swifty Company sells 10% bonds having a maturity value of $2,000,000 for $1,855,816. The bonds are dated January 1, 2017, and mature January 1, 2022. Interest is payable annually on January 1.
Instructions:
Set up a schedule of interest expense and discount amortization under the straight-line method.
Set up a schedule of interest expense and discount amortization under the effective-interest method. (Hint: The effective-interest rate must be computed.)
Answer:
Find attached amortization schedule for the interest expense and discount amortization under both methods.
Explanation:
Under straight line the discount amortization per year is total discount on bonds payable divided by 5 years.
Under effective method, I first of all computed the yield to maturity on the bind using rate formula in excel, the discount amortization each is the interest expense minus the coupon payment.
The following information pertains to Blue Flower Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.
Assets
Cash and short-term investments $ 45,000
Accounts receivable (net) 30,000
Inventory 25,000
Property, plant and equipment 210,000
Total Assets $310 000
Liabilities and Stockholders Equity
Current liabilities $ 60,000
Long-term liabilities 95,000
Stockholders' equity-common 155,000
Total Liabilities and Stockholders Equity $310.000
Income Statement
Sales revenue $ 116,000
Cost of goods sold 66.000
Gross margin 50,000
Operating expenses 30.000
Net income $20,000
Number of shares of common stock 6,000
Market pice of common stock $20
Dividends per share on common stock .50
Cash provided by operations $35,000
What is the inventory turnover for this company?
1) 2.6 times
2) 4.6 times
3) 5.3 times
4) 0.38 time
Answer:
1) 2.6 times
Explanation:
The Inventory turnover ratio measures the activity of liquidity of a company`s Inventory.
Inventory turnover = Cost of goods sold / Inventory
= $66,000 / $25,000
= 2.64 times
Crede Company budgeted selling expenses of $30,300 in January, $34,500 in February, and $40,300 in March. Actual selling expenses were $31,300 in January, $34,190 in February, and $48,300 in March. The company considers any difference that is less than 5% of the budgeted amount to be immaterial. Prepare a selling expense report that compares budgeted and actual amounts by month and for the year to date.
Answer:
Crede Company Selling expense report
By Month
Month Budget Actual expenses Difference
January $30,300 $ 31,300 $1,000 U
February $34,500 $ 34,190 $310 F
March $40,300 $ 48,300 $8,000 U
Year to date
Budget Actual expenses Difference
$30,300 $31,300 $1,000 U
$64,800 $65,490 $690 U
$ 105,100 $113,790 $8,690 U
Suppose that the standard deviation of returns for a single stock A is σA = 30%, and the standard deviation of the market return is σM = 10%. If the correlation between stock A and the market is rhoAM = 0.3, then the stock’s beta is . Is it reasonable to expect that the volatility of the market portfolio’s future expected returns will be greater than the volatility of stock A’s returns? Yes No
Answer:
The stock’s beta is 0.90
Is not reasonable to expect that the volatility of the market portfolio’s future expected returns will be greater than the volatility of stock A’s returns
Explanation:
In order to calculate the stock’s beta we would have to calculate the following formula:
Beta of stock = (standard deviation of stock A x correlation between stock A and market) / standard deviation of market
beta = (30% x 0.3) / 10% = 0.90
The market is assumed to have a beta of 0.90 and beta of a stock is the volatility of the stock in relation to the market. Since, stock A has beta equal to the market, its volatility will be correlated with the market. Therefore is not reasonable to expect that the volatility of the market portfolio’s future expected returns will be greater than the volatility of stock A’s returns
A series of five constant-dollar (or real-dollar) uniform payment of $897.63 is made begining at the end of first year. Assume that the general inflation rate is 18.3% and the market interest rate is 18.3% during this inflationary period.
The equivalent present worth of the series is:_________.
Answer:
The equivalent present worth of the series is $4,182.21
Explanation:
Fix periodic payments for a specific period of time are annuity payment and the payments made at the start of each period is known as advance annuity.
As per given data
Inflation per year = 18.3% / 5 = 3.66%
numbers of period = 5 years
Payment per period = $897.63
Use following formula to calculate the present value of annuity payments
PV of annuity = P x ( 1 - ( 1 + r )^-n / r
Where
P = Payment per period = $897.63
r = rate in of interest = 3.66%
n = numbers of periods = 5 years
Placing values in the formula
Equivalent present worth of the series = $897.63 + $897.63 x ( 1 - ( 1 + 3.66% )^-(5-1) / 3.66% )
Equivalent present worth of the series = $4,182.21
Which of the following statements about pricing is true? Small changes in price can have big effects on company profit but not on the number of units sold. Small changes in price can have big effects on the number of units sold but not on company profit. Small changes in price can have big effects on the number of units sold and also on company profit. Compared to the other 4P’s, pricing is important because once an item has been priced, changing its price can be quite difficult.
Answer:
Small changes in price can have big effects on the number of units sold and also on company profit
Explanation:
Small change in price will definitely have an effect on the amount of units sold due to a corresponding change in demand that will follow this change, and also will affect the amount of profit that the company generates. This changes can either be positive or negative to the company. Example is the increase in price of coca-cola might trigger customers into switching to pepsi-cola, resulting in a reduced demanded quantity which means less units are produced. The overall effect of these will leave the company with less profit.
According to WSJ article, companies like Apple, Deere, and Walt Disney recently issued new bonds on the market, totaling $27 billion offering on a single day on Sep. 3. What explains such an increased activity in a corporate bond market
Answer: Fall in Benchmark Interest Rates.
Explanation:
This activity was caused by a Refinancing Drive. Refinancing is when entities get a new loan with a lower interest rate and pay off the older loan with a higher interest rate so that they can pay at the lower rate.
Bond interest rates are usually fixed so when interest rates in a country fall, bond holders don't benefit from that. One option they have to take advantage of that is to go on a Refinancing Drive and issue new bonds at those lower rates and then pay off the older ones.
That is what Apple, Deere, and Walt Disney have done.
Rosnan Industries' 2013 and 2012 balance sheets and income statements are shown below.
Balance Sheets:
2013 2012
Cash and equivalents $100 $85
Accounts receivable 275 300
Inventories 375 250
Total current assets $750 $635
Net plant and equipment 2,300 1,490
Total assets $3,050 $2,125
Accounts payable $150 $85
Accruals 75 50
Notes payable 150 75
Total current liabilities $375 $210
Long-term debt 450 290
Common stock 1,225 1,225
Retained earnings 1,000 400
Total liabilities and equity $3,050 $2,125
Income Statements:
2013 2012
Sales $2,600 $1,400
Operating costs excluding depreciation 1,250 1,000
EBITDA $1,350 $400
Depreciation and amortization 100 75
EBIT $1,250 $325
Interest 62 45
EBT $1,188 $280
Taxes (40%) 475 112
Net income $713 $168
Dividends paid $53 $48
Addition to retained earnings $600 $120
Shares outstanding 100 100
Price $25.00 $22.50
WACC 10.00%
The balance in the firm's cash and equivalents account is needed for operations and is not considered "excess" cash. Using the financial statements given above, what is Rosnan's 2013 free cash flow (FCF)? Use a minus sign to indicate a negative FCF.
$
Answer:
–$32
Explanation:
Rosnan Industries' 2013 free cash flow (FCF)
Details $
Net income 713
Add Non-Cash Expenses:
Depreciation and amortization 100
(Increase) decrease in non-cash current assets:
Decrease in accounts receivable (300 - 275) 25
Increase inventories (375 - 250) (125)
Increase (decrease) in current liabilities:
Increase in total current liabilities (375 - 210) 165
Capital expenditure:
Increase in net plant and equipment (2,300 - 1,490) (810)
Depreciation and amortization (100)
Free cash flow (32)
Therefore, Rosnan's 2013 free cash flow (FCF) minus $32.
Data related to the inventories of Kimzey Medical Supply are presented below: Surgical Equipment $ 260 170 Surgical Supplies $ 120 Selling price Cost Replacement cost Costs to sell Normal gross profit ratio 90 Rehab Equipment $ 340 250 235 25 30 % Rehab Supplies $ 165 162 158 240 80 30 30% 10 30 % 20 % In applying the lower of cost or market rule, the inventory of surgical equipment would be valued at:_________
A) $170.
B) $152.
C) $230.
D) $240.
Answer: A) $170
Explanation:
In applying the Lower of Cost or Market Value, inventory is valued at the amount that is lower between the current market value or the cost of the inventory and recorded in the balance sheet.
Market Value can be calculated as the current value minus the cost to sell.
From the above question, the value of the Surgical Equipment is $260 and the cost to sell is $30.
That means that the Market Value is,
= 260 - 30
= $230
This figure is larger than the cost of the Surgical Equipment which is $170 so to record the inventory according to the Lower of cost or market rule, the $170 is picked as it is lower.
Which of the following is a disadvantage of growth by means of external growth strategies? Group of answer choices Diversification of business risk Economies of scale Getting access to proprietary products or services Reducing competition Loss of organizational flexibility
Answer:
- Loss of organizational flexibility
- Diversification of business
Explanation:
Remember, External growth strategies unlike the Internal growth strategies involves using external assistance to grow the organization, such as merging or acquiring other companies, franchising or forming joint ventures.
In such a case, organisational flexibility could be lost since the organization becomes more complex as a result of bringing in more people into the organization. Also, another disadvantage is that with a restructured management team, the business may experience unexpected diversification into other products as in the case of joint ventures.
Assume the company is considering investing in a new machine that will increase its fixed costs by $36,000 per year and decrease its variable costs by $10 per unit. Prepare a forecasted contribution margin income statement for 2018 assuming the company purchases this machine
Answer:
Find below complete question:
Hudson Co. reports the contribution margin income statement for 2017. Assume sales remain constant at 10.000 units.
HUDSON CO.
Contribution Margin Income Statement
For Year Ended December 31, 2017
Sales (10,000 units at $244 each) $2,440,000
Variable costs (10,000 units at $195 each) $1,950,000
Contribution margin $490,000
Fixed costs $327,600
Pretax Income $162,400
Assume the company is considering investing in a new machine that will increase its fixed costs by $36,000 per year and decrease its variable costs by $10 per unit.
Prepare a forecasted contribution margin income statement for 2018 assuming the company purchases this machine
The new pretax income is $226,400 compared to 2018 $162,400,which implies that investing in the new machine is viable
Explanation:
The forecast contribution margin income statement for 2018 is prepared below with fixed costs of $36,000 added to the previous cost of $327,600 while variable cost per unit drops by $10 to $185 per unit
Hudson Co,forecast contribution margin income statement for 2018
Sales (10,000*$244) $2,440,000
variable cost(10,000*$185) ($1,850,000)
Contribution margin $590,000
fixed costs( $327,600+$36,000) ($ 363,600)
Pretax income $ 226,400
An insured states her age as 40 on the application. When she dies, the insurer discovers that she was actually only 37 at the time of application. What will the insurance company do?
a) pays nothing since there was a material misrepresentation on the application
b) pays the death benefit in the amount that the premium at the correct age would have purchased
c) pays a decreased death benefit
d) adjust premiums to reflex correct age
Answer: pays the death benefit in the amount that the premium at the correct age would have purchased
Explanation:
According to the question, an insured states her age as 40 on the application and upon her death, the insurer discovers that the insured was 37 at the time of application.
The right thing for the insurance company to do is to pay the death benefit which in entitled to the insured in the amount which the premium at the correct age would have been bought. If insured overstates his or her age, the insurer will have to pay the full death benefit and then refund excess premiums paid.
RequiredIndicate the effect of each of the following transactions on (1) the current ratio, (2) working capital, (3) stockholders’ equity, (4) book value per share of common stock, and (5) retained earnings. Assume that the current ratio is greater than 1:1. (Indicate the effect of each transactions by selecting "+" for increase, "–" for decrease, and "NC" for no change.)a. Collected account receivable.b. Wrote off account receivable.c. Converted a short-term note payable to a long-term payable.d. Purchased inventory on account.e. Declared cash dividend.f. Sold merchandise on account at a profit.g. Issued stock dividend.h. Paid account payable.i. Sold building at a lossdo a +, -. or NC for each one.Current Ratioa.b.c.d.e.f.g.h.i.Working Capitala.b.c.d.e.f.g.h.i.Stockholders Equitya.b.c.d.e.f.g.h.i.Book Valuea.b.c.d.e.f.g.h.i.Retained Earningsa.b.c.d.e.f.g.h.i.
Find the given attachment
Before year-end adjusting entries, Marigold Corp.'s account balances at December 31, 2020, for accounts receivable and the related allowance for uncollectible accounts were $1540000 and $91500, respectively. An aging of accounts receivable indicated that $123000 of the December 31 receivables are expected to be uncollectible. The accounts receivable amount expected to be collected after adjustment is
Answer:
1,417,000
Explanation:
$123000 of the December 31 receivables is to be subtracted from $1540000 of the related allowance for uncollectible accounts
= $1540000 - $123000
= $1,417,000.
The accounts receivable amount expected to be collected after adjustment is $1,417,000
Wildhorse Taxi Service uses the units-of-activity method in computing depreciation on its taxicabs. Each cab is expected to be driven 144,000 miles. Taxi 10 cost $29,000 and is expected to have a salvage value of $200. Taxi 10 was driven 31,000 miles in 2021 and 33,500 miles in 2022. Determine the depreciation cost.
Answer:
Depreciation expense/cost
For 2021 = $6200
For 2022 = $6700
Explanation:
Depreciation expense is the systematic allocation of an asset's cost over its estimated useful life. The depreciation expense is calculated using various methods. The units of activity method charges a depreciation based on the usage of the asset in a particular period as a proportion to its estimated useful life calculated in the form of total usage expected.
The formula for units of activity depreciation per period is,
Depreciation expense = [(Cost - Salvage value) / Total estimated life time activity of the asset] * Activity performed during the period
Depreciation expense-Taxi 10:
For 2021 = [(29000 - 200) / 144000] * 31000 = $6200
For 2022 = [(29000 - 200) / 144000] * 33500 = $6700
a manufacturing firm is considering two locations for a plant to produce a new product. the two locations have fixed and variable costs as folls location FC(ANNUAL) VC(per unit) atlanta $80,000 $20 phoenix $140,000 $16 IF THE ANNUAL DEMAND WILL BE 20,000 units, what would be the cost advantage of the better location? HINT: compare the total costs a 60000 b 20000 c 460000 d 40000
Answer:
b $20,000
Explanation:
For computation of cost advantage first we need to find out the total cost of Atlanta and Phoenix which is shown below:-
Total cost = Fixed cost + (Variable cost × Number of units)
For Atlanta
The Total cost = $80,000 + ($20 × 20,000)
= $480,000
For Phoenix
The Total cost = $140,000 + ($16 × 20,000)
= $460,000
According to the above calculation, Phoenix is best location because it has lower total cost.
So
The Cost advantage at Phoenix = Total cost of Atlanta - Total cost of Phoenix
= $480,000 - $460,000
= $20,000
Question Workspace Exhibit 3-5 Supply for Tucker's Cola Data Quantity supplied per week (millions of gallons) Price per gallon 6 $3.00 5 2.50 4 2.00 3 1.50 2 1.00 1 .50 Exhibit 3-5 shows the supply schedule for Tucker's Cola. Suppose there are four additional suppliers of cola in the market. When the price per gallon of cola is $1.50, the first supplier is willing to sell 10 million gallons, the second supplier is willing to sell 2 million gallons, the third supplier is willing to sell 5 million gallons, and the fourth supplier is willing to sell 0 gallons. The market quantity supplied of cola when the price is $1.50 is
Answer:
20 million gallons
Explanation
The market quantity supplied can be found by adding the quanirty supplied of the 5 suppliers.
When price is $1.5, tucker supplies 3 million gallons
3 + 10+2 + 5 + 0 = 20
I hope my answer helps you
