Answer:
(A) For incandescent bulb, your break even cost is $32.67
(B) With LED bulb, your break even cost is $3.8115
Conclusion: It makes financial sense to use LED bulbs.
Explanation:
We start by checking the cost of your electricity bill when you use incandescent bulb and when you use LED bulb.
Since your answers are to be in kilowatt hour, we transform the watt measurement of the bulbs into kilowatt thus:
60watt incandescent bulb = 0.06kw
7watt led bulb = 0.007kw
National average cost of electricity per kilowatt hour is $1.21
Cost per kWh using incandescent bulb is 1.21 × 0.06 = $0.0726
Cost per kWh using led bulb is 1.21 × 0.007 = $0.00847
(A) WITH INCANDESCENT
0.06kw × 500hrs/year = 30kwhrs/year
Cost of electricity bill = 1.21 × 30 =$36.3
Your 10% return = $3.63
Break even cost per year, in kWh is = 36.3 - 3.63 = $32.67
(B) WITH LED
0.007kw × 500hrs/year = 3.5kwhrs/year
Cost of electricity bill = 1.21 × 3.5 = $4.235
Your 10% return = $0.4235
Break even cost per year in kWh is = 4.235 - 0.4235
(C) The incandescent bulb costs $0.45 but draws you a bill of $32.67 a year WHILE the led bulb costs $2.25 but draws you a bill of $3.8115
We conclude hence, that light-emitting diode bulbs make financial sense. Overlook the cost of purchasing the bulb because it uses less kilowatts per hour and draws you a very low bill, compared to the incandescent bulb!
How did industrialization and unionization need to outsourcing
Answer: It is often assumed that manufacturing workers in developing countries, as recipients of outsourced jobs, would achieve economic benefits and organizational power. The author argues that job growth in developing countries through outsourcing to competing firms has often actually resulted in declining unionization and lower wage rates relative to traditional, integrated manufacturing firms. Using time-series data on union membership from 1980-2003 for Honduras and El Salvador as well as 2004 Household Survey Data for El Salvador, he examines the determinants of unionization rates and wages in the manufacturing sectors. He finds that that competitive outsourcing hurts labor at the plant-level in three ways: 1) it reduces labor's strike leverage by geographically dispersing the production process; 2) it increases the threat of plant mobility by decreasing plant-level investments; and 3) it increases labor costs relative to total costs, which creates an incentive for employers to keep wages low and unions out.
A food truck operator originally produced hamburgers and hotdogs. To serve the tastes of their various customers, the hot dog vendor decides to start producing turkey dogs and ham sandwiches as well. Since the new products were introduced, average costs rose dramatically. The vendor is experiencing:________.
A. Economies of scope.
B. Diseconomies of scope.
C. Economies of scale.
D. Diseconomies of scale.
The correct answer is B. Diseconomies of scope
Explanation:
In businesses, diseconomies of scope occur when costs increase when two or more products are produced by the same business. This means it is cheaper and more efficient for a business to specialize in a few products rather than focusing on diverse products. This occurs in the case presented because the production of turkey dogs and ham sandwiches increased the costs, which shows it is more efficient for the business to specialize in a few products. Thus, this vendor is experiencing diseconomies of scope.
Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent month for the two games appears below: Claim Jumper Makeover Total Sales $ 104,000 $ 52,000 $ 156,000 Variable expenses 32,200 6,800 39,000 Contribution margin $ 71,800 $ 45,200 117,000 Fixed expenses 86,850 Net operating income $ 30,150 Required: 1. What is the overall contribution margin (CM) ratio for the company
Answer:
Weighted average contribution margin ratio= 0.726
Explanation:
Giving the following information:
Sales:
Claim Jumper= $104,000
Makeover= $52,000
Variable cost:
Clain Jumper= $32,200
Makeover= $6,800
First, we need to calculate the participation of the sales for each product:
Claim Jumper= 104,000/156,000= 0.67
Makeover= 52,000/156,000= 0.33
To calculate the weighted average contribution margin ratio, we need to use the following formula:
Weighted average contribution margin ratio= (weighted average sales - weighted average variable cost)/ weighted average sales
weighted average sales= (0.67*104,000) + (0.33*52,000)
weighted average sales= 86,840
weighted average unitary variable cost= (0.67*32,200) + (0.33*6,800)
weighted average unitary variable cost= 23,818
Weighted average contribution margin ratio= (86,840 - 23,818) / 86,840
Weighted average contribution margin ratio= 0.726
In March of 2019, Thomas makes a $5,000 cash contribution to a public university. In that month, he also donates $20,000 to an organization subject to the 30 percent limitation. Thomas has adjusted gross income for 2019 of $30,000. What is the amount of Thomas's 2019 charitable contribution deduction?
Answer:
The amount of Thomas's 2019 charitable contribution deduction is $14,000
Explanation:
In order to calculate the amount of Thomas's 2019 charitable contribution deduction we would have to calculate the following:
amount of Thomas's 2019 charitable contribution deduction =Cash contribution + [30% of adjusted gross income or actual property ,whichever is lower]
amount of Thomas's 2019 charitable contribution deduction = $5,000+ [(30%* $30,000) or $20,000 ,whichever is lower]
amount of Thomas's 2019 charitable contribution deduction =$5,000 [ $9,000 or $20,000]
amount of Thomas's 2019 charitable contribution deduction= $5,000 + $9,000
amount of Thomas's 2019 charitable contribution deduction= $14,000
Crazy Mountain Outfitters Co., an outfitter store for fishing treks, prepared the following unadjusted trial balance at the end of its first year of operations:
Crazy Mountain Outfitters Co. Unadjusted Trial Balance April 30, 20Y5
Debit Balances Credit Balances
Cash 11,400
Accounts Receivable 72,600
Supplies 7,200
Equipment 112,000
Accounts Payable 12,200
Unearned Fees 19,200
Common Stock 20,000
Retained Earnings 117,800
Dividends 10,000
Fees Earned 305,800
Wages Expense 157,800
Rent Expense 55,000
Utilities Expense 42,000
Miscellaneous Expense 7,000
475,000 475,000
For preparing the adjusting entries, the following data were assembled:
a. Supplies on hand on April 30 were $1,380.
b. Fees earned but unbilled on April 30 were $3,900.
c. Depreciation of equipment was estimated to be $3,000 for the year.
d. Unpaid wages accrued on April 30 were $2,475.
e. The balance in unearned fees represented the April 1 receipt in advance for services to be provided. Only $14,140 of the services was provided between April 1 and April 30.
Required:
1. Journalize the adjusting entries necessary on April 30. 2016.
2. Determine the revenues, expenses, and net income of Crazy Mountain Outfitters before the adjusting entries.
3. Determine the revenues, expense, and net income of Crazy Mountain Outfitters G after the adjusting entries.
4. Determine the effect of the adjusting entries on Retained Earnings.
Answer:
Required 1.
a.
Supplies Inventory $1,380 (debit)
Income Statement $1,380 (credit)
b.
Cash $3,900 (debit)
Un-earned Fees $3,900 (credit)
c.
Depreciation $3,000 (debit)
Accumulated Depreciation $3,000 (credit)
d.
Wages Expenses $2,475 (debit)
Wages Accrued $2,475 (credit)
e.
Unearned Fees $14,140 (debit)
Fees Earned $14,140 (credit)
Required 2.
Fees Earned 305,800
Less Expenses :
Wages Expense (157,800)
Rent Expense (55,000 )
Utilities Expense (42,000 )
Miscellaneous Expense (7,000)
Net Income / (loss) 44,000
Required 3.
Fees Earned (305,800 + 14,140) 319,940
Less Expenses :
Wages Expense (157,800 + 2,475) (160,275)
Rent Expense (55,000 )
Utilities Expense (42,000 )
Miscellaneous Expense (7,000)
Depreciation (3,000)
Net Income / (loss) 52,665
Required 4.
Effect = Increase by $8,665
Explanation:
Required 3.
Make the following Adjustments :
Increase the Fees EarnedIncrease the Wages ExpenseInclude the Depreciation Expense in Net Income calculation.Required 4
Adjust the Retained Earnings with items affecting the Income Statement.
Retained Earnings $117,800
Less Depreciation Expense ($3,000)
Less Wages Accrued ($2,475)
Add Fees Earned $14,140
Adjusted Retained Earnings $126,465
Conclusion :
Effect = Increase
Amount = $126,465 - $117,800 = $8,665
New lithographic equipment, acquired at a cost of $800,000 at the beginning of a fiscal year, has an estimated useful life of five years and an estimated residual value of $90,000. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On the basis of the data presented to the manager, the double-declining-balance method was selected.
In the first week of the fifth year, the equipment was sold for $135,000.
Required:
1. Determine the annual depreciation expense for each of the estimated five years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by the following methods:
a. Straight-line method
Year Depreciation Expense Accumulated Depreciation, End of Year Book Value, End of Year
1 $ $ $
2 $ $ $
3 $ $ $
4 $ $ $
5 $ $ $
b. Double-declining-balance method
Year Depreciation Expense Accumulated Depreciation, End of Year Book Value, End of Year
1 $ $ $
2 $ $ $
3 $ $ $
4 $ $ $
5 $ $ $
Hide
2. Journalize the entry to record the sale, assuming double-declining balance method is used. If an amount box does not require an entry, leave it blank.
3. Journalize the entry to record the sale, assuming that the equipment was sold for $88,750 instead of $135,000. If an amount box does not require an entry, leave it blank.
Answer:
a. Straight-line Method :
Year Depreciation Accumulated End of Year Book Value
0 Expense Depreciation $800,000
1 $142,000 $142,000 $ 658,000
2 $142,000 $284,000 $ 516,000
3 $142,000 $426,000 $ 374,000
4 $142,000 $568,000 $ 232,000
5 $142,000 $710,000 $90,000
b. Double-Declining-Balance Method:
Year Depreciation Accumulated End of Year Book Value
0 Expense Depreciation $800,000
1 $320,000 $320,000 $ 480,000
2 $192,000 $512,000 $ 288,000
3 $115,200 $627,200 $ 172,800
4 $69,120 $696,320 $ 103,680
5 $13,680 $710,000 $90,000
2. Journal entry to record the sale, assuming double-declining balance method:
Debit Cash $135,000
Credit Sale of Equipment $135,000
To record sale of equipment.
Debit Sale of Equipment $103,680
Debit Accumulated Depreciation $696,320
Credit Equipment $800,000
To record close of accumulated depreciation and equipment accounts.
3. Journal entry to record sale, assuming equipment was sold for $88,750:
Debit Cash $88,750
Credit Sale of Equipment $88,750
To record sale of equipment.
Debit Sale of Equipment $103,680
Debit Accumulated Depreciation $696,320
Credit Equipment $800,000
To record close of accumulated depreciation and equipment accounts.
Explanation:
a) Straight-line method of depreciation applies the same amount of depreciation charge over the life of the asset. It is calculated by subtracting the salvage value from the asset and dividing the resulting figure by the number of useful life in years. It is very simple, but does not take into consideration maintenance costs incurred as assets age. Therefore, it does not spread the costs of the asset evenly over the periods the asset is in use, or according to the productivity value of the asset in each period.
b) Declining balance method of depreciation accelerates depreciation charge initially but the annual expense declines with age of the fixed asset. Under this method, depreciation expense is calculated by applying the depreciation rate to the book value of the asset at the start of the period.
Describe a "rite of initiation" that you experienced at a place of work. This could be described via a situation in which you began with the company as a new employee, or during a period of time in which your status within the company changed. In your opinion, are rites of initiation in the workplace a good thing?
Answer: Rites of initiation is a good thing at the workplace. The answer is explained further below.
Explanation:
Initiation is the rite of passage marking the entrance or acceptance into an organization, a group or a society. The rite of initiation I experienced at a place of work was when I worked as an intern for a firm and I was told that the rite of initiation was for me to sing my favourite song. I actually sang my favorite song and it was fun and I was welcomed into the organization and introduced myself.
I believe rites of initiation are important at the workplace. It helps to increase engagement, boost employee moral, and also foster a supportive culture. It also enable the organization reach its goals as the workers are united and work as a team.
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Tangarine Company is considering a project with an internal rate of return of 12%. Tangarine requires a minimum rate of return of 10%. The net present value of the project is: a.equal to zero. b.infinite. c.negative. d.positive. e.None of these choices are correct.
Answer:
The correct option is D
Positive NPV
Explanation:
The internal rate of return is the discount rate that equates the present value of cash inflow to the present value of cash inflows.
It is the maximum cost of capital that can be used to discount a project without causing harm to the investors. In other words, it is the cost of capital that produces an NPV of Zero.
It therefore means that any cost of capital that is less than the IRR would produce a positive NPV and vice and versa.
and vice versa
Finally, if the IRR is 12% a cost of capital of 10% would produce a positive NPV
Managers involved in negotiation should:__________.
1. Search for the absolute best answer.
2. Exercise premature judgment.
3. Realize that solving the other party's problem is actually the other party's problem.
4. Verify whether there is only a fixed set of alternatives.
Which of the following phenomena would be most likely to occur if the project team did not have clear and commonly understood project goals?
1. The level of trust among team members would increase.
2. The motivation level of team members would increase.
3. The interdependency among team members would increase.
4. Conflict among team members would increase.
Answer:
For question (1): 4. Verify whether there is only a fixed set of alternatives.
For question (2): 4. Conflict among team members would increase.
Explanation:
Managers involved in negotiation should always verify whether there is only a fixed set of alternatives.
It is ideal that when managers are making a negotiation and by extension decision-making, they should ensure there are one or more alternative options. A fixed set of alternatives would only mean they're absolutely liable to the other party, without any reasonable benefits to their organization in the event of a crisis with the deal.
Conflict among team members would increase if the project team did not have clear and commonly understood project goals.
As a rule and standard, it is necessary to ensure that team members share common understanding, aims, ideas and vision in order to achieve their project goals and objectives.
When team members are in sync, they're bound to collaborate and use collective intelligence to attain success.
Hence, to increase the level of trust, motivation level, and interdependency among team members, project managers should ensure they've clear and commonly understood project goals.
Following is a partial process cost summary for Mitchell Manufacturing's Canning Department. Equivalent Units of Production Direct Materials Conversion Units Completed and transferred out 44,000 44,000 Units in Ending Work in Process: Direct Materials (9,000 * 100%) 9,000 Conversion (9,000 * 70%) 6,300 Equivalent Units of Production 53,000 50,300 Cost per Equivalent Unit Costs of beginning work in process $43,400 $63,700 Costs incurred this period 145,100 195,100 Total costs $188,500 $258,800 Cost per equivalent unit $3.56 per EUP $5.15 per EUP The total conversion costs transferred out of the Canning Department equals:_______.a. $156,640. b. $179,068. c. $188,500.
Answer:
Material Costs Transferred Out $ 156,640
Conversion Costs Transferred Out $ 226355
Explanation:
Mitchell Manufacturing
Canning Department.
Equivalent Units of Production
Direct Materials Conversion
Units Completed and transferred out 44,000 44,000
Units in Ending Work in Process:
Direct Materials (9,000 * 100%) 9,000
Conversion (9,000 * 70%) 6,300
Equivalent Units of Production 53,000 50,300
Cost per Equivalent Unit
Costs of beginning work in process $43,400 $63,700
Costs incurred this period 145,100 195,100
Total costs $188,500 $258,800
Cost per equivalent unit $3.56 per EUP $5.15 per EUP
The total conversion costs = $ 258,800
Less Conversion Costs of Ending Inventory= ( 6300 * 5.15)= 32445
Conversion Costs Transferred Out $ 226355
The Total Material Costs $188,500
Less Material Costs of Ending Inventory= ( 9000 * 3.56)= 32040
Material Costs Transferred Out $ 156,640
It can also be solved by multiplying EUP with the Units Completed and transferred out and we will get the same results.
Material Costs Transferred Out ( 44000*3.56) $ 156,640
Conversion Costs Transferred Out ( 44000*5.15) $ 226355
The company employs a single employee who works all five weekdays and is paid on the following Monday. The employee works the entire week ending on Friday, December 30. The employee earns $800 per day. Complete the necessary December 31 journal entry by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.
Answer: The answer is provided below
Explanation:
Adjusting entries are the entries that are passed at the end of the year. They are passed to adjust the account so as to make them follow the matching principle.
In the calculation attached, it should be noted that the salary expenses was calculated as the amount earned per day by the number of days. This is:
= $800 × 5
= $4000.
The necessary journal has been attached
The Converting Department of Osaka Napkin Company uses the average cost method and had 2,000 units in work in process that were 60% complete at the beginning of the period. During the period, 25,200 units were completed and transferred to the Packing Department. There were 1,100 units in process that were 30% complete at the end of the period.
a. Determine the number of whole units to be accounted for and to be assigned costs for the period.
b. Determine the number of equivalent units of production for the period.
Answer:
Equivalent Units
Material cost = 26,560
Conversion Cost= 25,540
Explanation:
We would assume the company uses weighted average method of valuation.
Under the weighted average method of valuation, to account for completed units, it is assumed that the entire degree of work required is done in the period under consideration. So there is no separation of the completed units into opening inventory and fully worked.
Equivalent units = Degree of completion (%) × Number of units
Material cost
Item Unit Equivalent unit
Completed 25,200 100% ×25200 = 25,200
Closing WIP 1,360 100%× 1,360 1360
Total equivalent units 26,560
Conversion Cost
Item Unit Equivalent unit
Completed 25,200 100% ×25200 = 25,200
Closing WIP 1,360 25%× 1,360 340
Total equivalent units
The Converting Department of Osaka Napkin Company uses the average cost method and had 2,000 units in work in process that were 60% complete at the beginning of the period.
A. To determine the number of whole units to be accounted for and to be assigned costs for the period, let's calculate the total equivalent units of production.
Whole units at the beginning of the period = 2,000 unit
Units started and completed during the period = 25,200 units
Whole units in process at the end of the period = 1,100 units
Total whole units to be accounted for:
= Whole units at the beginning + Units started and completed during the period + Whole units in process at the end
= 2,000 units + 25,200 units + 1,100 units
= 28,300 units
B. To determine the number of equivalent units of production for the period, we need to consider the percentage of completion for the units in process at the beginning and the units in process at the end.
Equivalent units of production for units in process at the beginning:
= Whole units at the beginning × Percentage of completion at the beginning
= 2,000 units × 60%
= 1,200 equivalent units
Equivalent units of production for units in process at the end:
= Whole units in process at the end × Percentage of completion at the end
= 1,100 units × 30%
= 330 equivalent units
Total equivalent units of production for the period:
= Equivalent units of production for units in process at the beginning + Equivalent units of production for units in process at the end + Units started and completed during the period
= 1,200 equivalent units + 330 equivalent units + 25,200 units
= 26,730 equivalent units
Therefore, the number of equivalent units of production for the period is 26,730 units.
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Imperial Jewelers manufactures and sells a gold bracelet for $408.00. The company’s accounting system says that the unit product cost for this bracelet is $268.00 as shown below:
Direct materials $147
Direct labor 85
Manufacturing overhead 36
Unit product cost $268
The members of a wedding party have approached Imperial Jewelers about buying 30 of these gold bracelets for the discounted price of $368.00 each. The members of the wedding party would like special filigree applied to the bracelets that would require Imperial Jewelers to buy a special tool for $452 and that would increase the direct materials cost per bracelet by $9. The special tool would have no other use once the special order is completed.
To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $15.00 of the overhead is variable with respect to the number of bracelets produced. The company also believes that accepting this order would have no effect on its ability to produce and sell jewelry to other customers. Furthermore, the company could fulfill the wedding party’s order using its existing manufacturing capacity.
Required:
a. What is the financial advantage (disadvantage) of accepting the special order from the wedding party?
b Should the company accept the special order?
Answer:
2352, Yes
Explanation:
a) Incremental Cost = Direct Material cost + Direct labour cost + Filgree + Manufacturing overhead cost
= 147 + 85 + 9 + 15 = 256
Total additional Cost = 256 x 21 = 5376
Incremental Revenue = 368
Total additional Revenue = 368 x 21 = 7728
Incremental net operating income = Total additional revenue - total additional cost
= 7728 - 5376 = 2352
b) As Incremental net operating income is positive, company is earning from the special order. Yes, it should accept it
The relevant costs for a decision to accept the special order are :
1. Incremental Revenue from the special order
2. incremental variable cost
3. The cost of the special tool
Unit variable cost = 147+ 85 + 9 + 15 = $256
The balance of manufacturing overhead would be incurred either way. Therefore, they are not relevant for the decision
Sales revenue from special order $
(21× $368) 7728
The Variable cost of special order $
(21× $256) (5376 )
Financial advantage 2358
The company should accept the special order, as it will increase its profit by $2352
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Harry owns a Cadillac and a Porsche. Ryan has always wanted a Porsche and knows Harry owns one. Harry decides to sell his Cadillac and buy a BMW. A mutual friend of Ryan and Harry tells Ryan, "Harry's selling his car." Thinking Harry is selling the Porsche (he does not know he also has a Cadillac), Ryan calls Harry and says, "I'll give you $9,500 for your car." Harry, thinking Ryan is talking about the Cadillac, says, "You've got a deal." On what grounds is the above agreement open for rescission
Answer:
mutual mistake
Explanation:
A mutual mistake happens when all the parties involved in a contract (two or more) are mistaken or do not know the correct information about some specific material fact that is relevant to the contract. In this case, the contract can be rescinded because Harry believes that Ryan wants to buy his Cadillac, while Ryan believes Harry is selling his Porsche.
Since both of them are mistaken and do not know relevant material facts regarding the contract, the contract can be terminated.
Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows: The reporting statement of revenue and expense data is shown. A table with three columns is shown. There is no heading in the first column; the second column heading in the current year; the third column heading is the previous year. The headings, Current Year and Previous Year, are set in bold. The first line (below the heading) shows Sales is $ 4,000,000 and $ 3,600,000; the second line shows Cost of goods sold is 2,280,000 and 1,872,000; the third line shows Selling expenses is 600,000 and 648,000; the fourth line shows Administrative expenses is 520,000 and 360,000;the fifth line shows Income tax expense is 240,000 and 216,000. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. Round to the nearest whole percentage. Answer Check Figure: Current year net income: $360,000; 9% of sales Pencil Comment on the significant changes disclosed by the comparative income statement.
Answer:
Innovation Quarter Inc.
Income Statement
For the Years Ended
Current Year ($) Previous Year ($)
Sales 4,000,000 100% 3,600,000 100%
Cost of goods sold 2,280,000 57% 1,872,000 52%
Gross profit 1,720,000 43% 1,728,000 48%
Expenses:
Selling expenses 600,000 15% 648,000 18%
Administrative expenses 520,000 13% 360,000 10%
Total expenses 1,120,000 28% 1,008,000 28%
Income from operations 600,000 15% 720,000 20%
Income tax expense 240,000 6% 216,000 6%
Net income 360,000 9% 504,000 14%
Explanation:
Current Year Previous Year
Sales $ 4,000,000 $ 3,600,000
Cost of goods sold $ 2,280,000 $ 1,872,000
Selling expenses $ 600,000 $ 648,000
Administrative expenses $ 520,000 $ 360,000
Income tax expense $ 240,000 $ 216,000
Hot and Cold has annual sales of $847,000, annual depreciation of $47,000, and net working capital of $43,000. The tax rate is 21 percent and the profit margin is 7.3 percent. The firm has no interest expense. What is the amount of the operating cash flow
Answer:
The amount of the operating cash flow is $108,831
Explanation:
In this question, we are tasked with calculating the amount of the operating cash flow.
Firstly, we calculate the net income.
Mathematically, net income = Sales × % profit margin
From the question, sales = $847,000
% profit margin = 7.3% = 7.3/100 = 0.073
Net income = $847,000 × 0.073 = $61,831
Finally, Operating cash flow = Net income + Depreciation
From the question, depreciation = $47,000
Plugging this alongside the net income,
Operating cash flow = $61,831 + $47,000 = $108,831
Victor Rumsfeld Inc.'s dividend policy is under review by its board. Its projected capital budget is $2,000,000, its target capital structure is 60% debt and 40% equity, and its forecasted net income is $300,000. If the company follows a residual dividend policy, what total dividends, if any, will it pay out? Select the correct answer.
Answer:
The multiple choices are
a. $240,000
b. $228,000
c. $216,600
d.$205,770
e. $0
The correct option is E,$0
Explanation:
The funding required from equity is 40% of the projected capital budget of $2000,000 which is expected to be from the profit attributable to stockholders since new issue of shares is not contemplated.
In other words, dividends payable to shareholders is the net income less their counter funding of the project which is computed below:
residual dividends=net income-(equity%*capital outlay)
residual dividends=$300,000-(40%*$2000,000)
=$300,000-$800,000=$0
In essence the $300,000 is not even enough as funds expected from equity less alone paying excess as dividend
Logan Company can sell all of the standard and premier products they can produce, but it has limited production capacity. It can produce 8 standard units per hour or 4 premier units per hour, and it has 36,600 production hours available. Contribution margin per unit is $20.00 for the standard product and $23.00 for the premier product. What is the total contribution margin if Logan chooses the most profitable sales mix
Answer:
The most profitable sales mix is 288,000 standard units and 0 premier units.
Explanation:
8 standard units per hour
4 premier units per hour
36,600 production hours available
For standard units, contribution margin per hour = 8 x $20 = $160
For premier units, contribution margin per hour = 4 x $23 = $92
Therefore, most profitable sales mix = 36,000 hours x 8 units per hour of standard product
= 288,000 standard units and 0 premier units.
Demographic studies show that the proportion of teenagers and minorities in the U.S. population is likely to increase in the near future. In your opinion, what implications, if any, will this trend have on the unemployment rate?
Answer:
Demographic Studies and Increased Proportion of Teenagers and Minorities
Implications of the Trend on the Unemployment Rate:
a) Labor Force Participation Rate: If the population of teenagers and minorities increase proportionately in the near future, there will be an increase in the labour force participation rate. This means that more people are vying for the available jobs. This puts pressure on the economy to create more sustainable jobs. However, this holds true if all other things are held constant. Obviously, the increased population of these demographic groups will push industries to create jobs in pursuit of the huge demand placed by the groups for more goods and services.
b) Increased Industrial growth reduces the unemployment rate. The resulting increased demand for goods and services required by these groups will increase industrial growth. This will in its turn reduce the unemployment rate.
c) Another implication of the trend on the unemployment rate is that the increased population of these groups will lead to social mobility. Social mobility happens when people move out of their social class to lower or better social classes. Social mobility affects the unemployment rate in any demography. When educated people accept menial jobs, while it may appear that they are working, they are obviously still within the unemployment bracket because they will be searching for jobs.
Explanation:
a) Unemployment rate is the number of unemployed people as a percentage of the labor force. The labor force comprises those who are unemployed plus those who are in paid or self employment.
b) Demographic studies are the studies conducted about a population based on factors such as age, race, and sex.
If 4 million kegs of beer are sold, , which means that: It would be fairer for society to devote fewer resources to the production of beer. It would be fairer for society to devote more resources to the production of beer. Society is currently devoting the efficient quantity of resources to the production of beer. It would be more efficient for society to devote more resources to the production of beer. If 12 million kegs of beer are sold, , which means that: It would be fairer for society to devote more resources to the production of beer. Society is currently devoting the efficient amount of resources to the production of beer. It would be fairer for society to devote fewer resources to the production of beer. It would be more efficient for society to devote fewer resources to the production of beer. The efficient allocation of resources would result in the production of kegs of beer.
Answer:
1. It would be more efficient for society to devote more resources to the production of beer.
2. Society is currently devoting the efficient amount of resources to the production of beer.
Explanation:
1. If 4 million kegs of beer are sold, the marginal benefit exceeds marginal cost which means that: the society values this quantity of kegs of beer and would be more beneficial and efficient if the society devote more resources to beer production.
2. If 12 million kegs of beer are sold, where marginal cost equal marginal benefit, it means that this is a good point in which shows an efficient allocation of resources to beer production because the marginal cost of the resources is equal to the marginal benefit of each keg of beer.
If 4 million kegs of beers are sold, marginal benefit exceeds the marginal cost, which means that :
It would be more efficient for society to devote more resources to the production of beers.
Reason :
the advantage of an additional unit of producing a good is more than the cost of producing it.hence it is good to produce more where marginal benefit equals marginal cost.If 12 million kegs of beers are sold, marginal cost exceeds the marginal benefit, which means that :
It would be more efficient for society to devote fewer resources to the production of beers.
Reason :
the advantage of an additional unit of producing a good is less than the cost of producing it.hence it is good to produce less where marginal benefit equals marginal cost.Learn More :
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Presented below is information related to Oriole Corp. for the year 2020.
Net sales $1,534,000 Write-off of inventory due to obsolescence $94,400
Cost of goods sold 920,400 Depreciation expense omitted by accident in 2019 64,900
Selling expenses 76,700 Casualty loss 59,000
Administrative expenses 56,640 Cash dividends declared 53,100
Dividend revenue 23,600 Retained earnings at December 31, 2019 1,156,400
Interest revenue 8,260 Effective tax rate of 20% on all items
Prepare a multiple-step income statement for 2020. Assume that 62,370 shares of common stock are outstanding.
Answer:
Oriole Corp.
Income Statement
For the Year Ended December 31, 2020
Total sales $1,534,000
Cost of goods sold ($920,400)
Loss from inventory write off ($94,400)
Gross margin $519,200
Operating expenses:
Administrative expenses $56,640
Selling expenses $76,700
Total operating expenses ($133,340)
Income from operations $385,860
Other revenues and gains
Dividend revenue $23,600
Interest revenue $8,260
Total other revenues and gains $31,860
Other expenses and losses
Depreciation expense 2019 $64,900
Casualty loss $59,000
Total other expenses and losses ($123,900)
Net income before taxes $293,820
Income taxes 20%* ($58,764)
Net income $235,056
*Generally dividend revenue is not taxed or only 30% of it sis taxed. Since we were told to apply 20% income tax to all items, I didn't calculate it separately. But if you calculate it separately, then income taxes would be $1,156 lower (total $57,608) and net profit would be higher (total $236,212).
A well diversified portfolio needs about 3 to 5 stocks from different categories.
True
False
Answer:
This is false.
Explanation:
Diversification is An investment strategy that includes a mixture of a wide variety of investments from different categories within a portfolio.
A well diversified portfolio does not need 3 to 5 stocks from different categories instead A well-diversified portfolio needs about 20-25 stocks from various categories.
Granny Carney Associates surveys American eating habits. The company's accounts include Land, Buildings, Office Equipment, and Communication Equipment, with a separate Accumulated Depreciation account for each depreciable asset. During 2018, Granny Carney Associates completed the following transactions: (Click the icon to view the transactions.) Record the transactions in the journal of Granny Carney Associates. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Jan. 1: Purchased office equipment, $119,000. Paid $84,000 cash and financed the remainder with a note payable. (Record a single compound journal entry.) Date Accounts and Explanation Debit Credit Jan. 1
Jan. 1 Purchased office equipment, $119,000. Paid $84,000 cash and financed the remainder with a note payable. Apr. 1 Acquired land and communication equipment in a lump-sum purchase. Total cost was $320,000 paid in cash. An independent appraisal valued the land at $252,000 and the communication equipment at $84,000. Sep. 1 Sold a building that cost $570,000 (accumulated depreciation of $265,000 through December 31 of the preceding year). Granny Carney Associates received $430,000 cash from the sale of the building. Depreciation is computed on a straight-line basis. The building has a 40-year useful life and a residual value of $45,000. Dec. 31.
Recorded depreciation as follows:
Communication equipment is depreciated by the straight-line method over a five-year life with zero residual value. Office equipment is depreciated using the double-declining-balance method over five years with a $4,000 residual value.
Answer:
Jan 1
Dr Office equipment 119,000
Cr Cash 84,000
Cr Note payable 35,000
April 1
Dr Land 240,000
Dr Communication equipment 80,000
Cr Cash 320,000
Sept 1
Dr Cash 430,000
Dr Accumulated depreciation -Building 265,000
Cr Building 570,000
Cr Gain on sales of building 125,000
Dec 31
Depreciation expenses 12,000
Dr Accumulated Depreciation 12,000
Explanation:
Granny Carney Associates Journal entries
Jan 1
Dr Office equipment 119,000
Cr Cash 84,000
Cr Note payable 35,000
(119,000-84,000)
April 1
Dr Land 240,000
(320,000×252,000/252,000+84,000)
Dr Communication equipment 80,000
(320,000×84,000/252,000+84,000)
Cr Cash 320,000
(80,000+240,000)
Sept 1
Dr Cash 430,000
Dr Accumulated depreciation -Building 265,000
Cr Building 570,000
Cr Gain on sales of building 125,000
Dec 31
Depreciation expenses 12,000
(80,000-0)/5×9months/12months
Dr Accumulated Depreciation 12,000
g (Ignore income taxes in this problem.) Overland Corporation has gathered the following data on a proposed investment project: Click here to view Exhibit 8B-1 and Exhibit 8B-2 to determine the appropriate discount factor(s) using tables. Investment required in equipment $ 440,000 Annual cash inflows $ 77,000 Salvage value of equipment $ 0 Life of the investment 20 years Discount rate 13 % The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment. The internal rate of return on the investment is closest to:
Answer:
16.70%
Explanation:
Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.
IRR can be calculated using a financial calculator:
Cash flow in year 0 = $-440,000
Cash flow each year from year one to twenty = $77,000
IRR = 16.70%
To find the IRR 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 IRR button and then press the compute button.
I hope my answer helps you
Analyzing Adjusting Journal Entries, Prepaid Asset and Deferred Revenue Voss Inc., an accounting firm, adjusts and closes its accounts each December 31. Below are two situations requiring adjusting entries.
During the current year, supplies were purchased for $1,125 cash. The inventory of supplies at the prior year-end was $225. At the current year-end, inventory remaining was $360. Prepare the adjusting entry required for each of the following separate cases.
a. Case A-the $1,125 was debited to Supplies Expense. What is the balance of Supplies at year-end?
General Journal
Ref. Account Name Dr. Cr.
Case A Supplies 225 0
Supplies Expense 0 225
Case A: Balance of Supplies at year-end: $ 225
b. Case B the $1,125 was debited to supplies. What is the balance of Supplies at year-end?
General Journal
Ref. Account Name Dr. Cr.
Case B Supplies 900 0
Expense Supplies 0 900
Case B: Balance of Supplies at year-end: $ 225
Answer:
a. Case A-the $1,125 was debited to Supplies Expense. What is the balance of Supplies at year-end?
The previous balance was Supplies $225
If the following was made:
Dr Supplies expense 1,125
Cr Supplies 1,125
Then the ending balance of Supplies would be = -$900
b. Case B the $1,125 was debited to supplies. What is the balance of Supplies at year-end?
The previous balance was Supplies $225
If the following was made:
Dr Supplies 1,125
Cr Supplies expense 1,125
Then the ending balance of Supplies would be = $1,350
Explanation:
During the current year, supplies were purchased for $1,125 cash. The inventory of supplies at the prior year-end was $225.
Adjusting entry to record supplies expense = $1,125 + $225 - $360
Dr Supplies expense 990
Cr Supplies 990
Ending balance of supplies inventory = $360
You have $6,600 to deposit. Regency Bank offers 12 percent per year compounded monthly (1.0 percent per month), while King Bank offers 12 percent but will only compound annually. How much will your investment be worth in 17 years at each bank
Answer:
Instructions are below.
Explanation:
Giving the following information:
Deposit= $6,600
Regency Bank:
12 percent per year compounded monthly (1.0 percent per month)
King Bank:
12 percent but will only compound annually.
Number of years= 17
To calculate the final value, we need to use the following formula for each bank:
FV= PV*(1+i)^n
Regency Bank:
n=17*12= 204
FV= 6,600*(1.01^204)
FV= $50,246.3
King Bank:
FV= 6,600*(1.12^17)
FV= $45,315.87
The four conditions (mutual exclusion, hold and wait, no preemption and circular wait) are necessary for a resource deadlock to occur. Give an example to show that these conditions are not sufficient for a resource deadlock to occur. When are these conditions sufficient for a resource deadlock to occur
Explanation:
The conditions sufficient for a resource deadlock to occur is when a deadlock will prevail for process A, B, and C when two resources R and S; if only one instance of each resources is allowed.
Solution
Deadlock conditions
A deadlock is a situation where two or more processes request for same critical resource at the same time.
The mutual exclusion applies a restriction to a resource when the resource is used by any process, it should become unavailable for the other resources
The hold and wait allocations explains that any process which is allocate resources must hold them; till all needed resources are nor sure.
In the meantime, if any other processes need a resource which is held by another process, then the latter will release the resource to prevent deadlock.
No pre-emption states that the operating system can grant access to resources to another process while it is in use by another process; depending on the priority , to prevent deadlock.
Circular wait should not be implemented so that resources being requested by process are allocated when they get free.
Now,
Three processes A, B, and C functions on a system, having two distinct resources R and S.
The resource R has one instant active while resource S has two instances available.
The instance of R is allocated to a process A after request. first instance of resource S is allocated to process B, and second instance of resource S is allocated to process C.
When a request is placed by process B for resource R, then the resource is not available for execution. the process A request for resource S which is used by both C and B.
All the four conditions prevail in this situation; yet deadlock does not occur.
The resource S is released by process C and is allocated to process A. when process A finishes, it releases resources and resources R is allocate d to process B.
Hence all three processes end without a deadlock.
However, the deadlock will prevail for process A, B, and C when two resources R and S; if only one instance of each resources is allowed.
1. Cost Management Systems: Analyze the process of assigning and allocating costs. Discuss the development of an activity-based costing system and how activity based management is used in decision making. Compare and contrast Just-In-Time and Quality Management Systems.
Explanation:
The assigning and allocation of costs in an organization can be defined as essential processes to assist in the management of organizational budgets, being characterized as essential activities for the company's accounting department.
An activity-based costing system can be initiated according to the identification of the scope of organizational projects, and then carry out an appropriate planning so that the costs of the company in relation to all organizational systems are identified and then eliminate subjectivity and carry out a more precise cost management and greater control, which guarantees a decision making more directed to the organizational needs, focused on reducing unnecessary costs.
The relationship between the cost management system and the Just-In-Time and quality management systems is that these two systems are focused on reducing waste and maintaining quality in all organizational processes, and controlling of the organizational costs realized by a cost management system will reduce the waste of undue costs of the company, increase its efficiency and quality, as this system assists in the control and coordination of the systems, which results in an improvement of all organizational processes.
Why would the Lana Limited Corporation decide to issue stocks?
For every dollar that you deposit into a bank, the bank will tend to:_________.
a) keep a portion of it and lend out the rest.
b) keep every penny as vault cash since it is such a small amount.
c) lend out every penny since almost all transactions are digital.
Answer:
The answer is A.
Explanation:
This system is known as Fractional Reserve Banking.
Fractional Reserve Banking is a banking system which allow banks to hold a fraction their customers' deposit as reserves. The rest not kept as reserves are used to make loans, thereby creating new money.
Central banks announce reserve requirements which banks within the jurisdiction must comply with.
