Answer:
4 years
Explanation:
Payback period calculates the amount of the time it takes for the amount invested in a project to be recovered from the cumulative cash flow.
Payback period = amount invested / annual cash flows
= $400,000 / $100,000 = 4 years
I hope my answer helps you
A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (5,000 units): Direct materials $70,000 Direct labor 20,000 Variable factory overhead 10,000 Fixed factory overhead 2,000 $102,000 Operating expenses: Variable operating expenses $17,000 Fixed operating expenses 1,000 18,000 If 1,000 units remain unsold at the end of the month and sales total $150,000 for the month, the amount of operating income reported on the absorption costing income statement would be
Answer:
Net operating income= $50,400
Explanation:
Giving the following information:
Production costs (5,000 units):
Direct materials $70,000
Direct labor 20,000
Variable factory overhead 10,000
Fixed factory overhead 2,000
Total= 102,000
Operating expenses:
Variable operating expenses $17,000
Fixed operating expenses 1,000
Sales= 4,000 units
Sales revenue= $150,000
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 product cost= 102,000/5,000= $20.4
Income statement:
Sales= 150,000
COGS= 20.4*4,000= (81,600)
Gross profit= 68,400
Variable operating expenses= (17,000)
Fixed operating expenses= (1,000)
Net operating income= 50,400
Allerton Company acquires all of Deluxe Company’s assets and liabilities for cash on January 1, 2018, and subsequently formally dissolves Deluxe. At the acquisition date, the following book and fair values were available for the Deluxe Company accounts:
Book Values Fair Values
Current assets $41,500 $41,500
Building 108,000 67,000
Land 17,000 35,200
Trademark 0 31,800
Goodwill 19,000 ?
Liabilities (50,500) (50,500)
Common stock (100,000)
Retained earnings (35,000 )
Prepare Allerton’s entry to record its acquisition of Deluxe in its accounting records assuming the following cash exchange amounts:
1) $166,000
2) $96,000
Answer:
Scenario 1. Cash Exchange of $166,000
Current assets $41,500 (debit)
Building $67,000 (debit)
Land $35,200 (debit)
Trademark $ 31,800 (debit)
Goodwill $41,000 (debit)
Liabilities $50,500 (credit)
Investment in Deluxe Company $166,000 (credit)
Scenario 1. Cash Exchange of $166,000
Current assets $41,500 (debit)
Building $67,000 (debit)
Land $35,200 (debit)
Trademark $ 31,800 (debit)
Liabilities $50,500 (credit)
Investment in Deluxe Company $96,000 (credit)
Gain on Bargain Purchase $29,000 (credit)
Explanation:
All assets and liabilities of Deluxe Company have been acquired by Allerton Company. This is known as a Business Combination in terms of IFRS 3.
During a Business Combination transaction, Assets and Liabilities are Acquired at their Fair Values instead of Book Values.
Any Excess of the Purchase Price (Consideration) over the Net Assets taken over is known as Goodwill otherwise it is known as a Gain on Bargain Purchase.
You were recently hired at a software engineering company, and today is your first team meeting. You want to convey to your new team members that you are excited to join them and that you will be an engaged and respectful addition to the team.
What form of nonverbal communication will serve you best?
a. Hugs
b. Prolonged eye contact
c. Punctuality
In January 2020, the management of Sheridan Company concludes that it has sufficient cash to permit some short-term investments in debt and stock securities. During the year, the following transactions occurred.
Feb. 1 Purchased 500 shares of Muninger common stock for $27,500.
Mar. 1 Purchased 700 shares of Tatman common stock for $17,500.
Apr. 1 Purchased 40 $1,050, 6% Yoakem bonds for $42,000. Interest is payable semiannually on April 1 and October 1.
July 1 Received a cash dividend of $0.50 per share on the Muninger common stock.
Aug. 1 Sold 167 shares of Muninger common stock at $65 per share.
Sept.1 Received a $1 per share cash dividend on the Tatman common stock.
Oct. 1 Received the semiannual interest on the Yoakem bonds.
Oct. 1 Sold the Yoakem bonds for $41,000.
Required:
At December 31, the fair value of the Muninger common stock was $56 per share. The fair value of the Tatman common stock was $24 per share. Prepare the adjusting entry at December 31, 2020, to report the investment securities at fair value. All securities are considered to be trading securities.
Answer:
Sheridan Company
Adjusting Entries for reporting fair values of investments:
December 31, 2020:
Debit Investment in Muninger $333
Credit Unrealized Gains on Investment $333
To record the fair value of common stock investment.
Debit Unrealized Loss on Investment $700
Credit Investment in Tatman $700
To record the fair value of common stock investment.
Explanation:
a) Feb. 1, Muniger Common Stock 500 shares at $55 for $27,500
August 1, Sold 167 shares at $65 for $10,855
December 31 Remaining at fair value, 333 shares at $56 for $18,648
Fair Value Gain = $1 x 333 shares = $333
b) Tatman Common Stock 700 shares for $17,500
March 1, Common Stock 700 shares at $25 for $17,500
December 31, Remaining at fair value, 700 shares at $24 for $16,800
Fair Value Loss = $1 x 700 = $700
c) Trading Investments are held for short-term purposes to take advantage of dividends and changes in the market price of the investments. These securities are accounted for at fair value. The requirement is that at the end of the accounting period, the fair value is determined and used to value the investment. Unrealized Gains or Losses are recorded, depending on their fair values. The gains or losses become realized when the investments are sold.
Chocolates R' Us, Inc is owned equally by Desi and his wife Lucy, each of whom hold 550 shares in the company. Lucy plans to reduce her ownership in the company, with the company planning to redeem 475 of her shares for $10,000 per share on December 31 of this year. Assume Desi and Lucy are not getting along and have separated due to marital discord, but are not legally separated. Because they no longer talk to each other, they communicate only through their accountant. Lucy wants to argue that she should not be treated as owning any of Desi's stock in Chocolates because of their hostility toward each other. Can family hostility be used as an argument to voice the family attribution rules?
Answer:
Chocolates R' Us, Inc.
Family hostility cannot be used as an argument to void the family attribution rules.
Lucy is still legally married to Desi. What the husband, Desi, therefore, owes, she owes equally despite their separation and her intention to reduce her ownership in their joint company.
Explanation:
Family Attribution Rules: Section 318 of the Internal Revenue Code says an individual shall be considered as owning the stock owned, directly or indirectly, by or for his spouse and his children, grandchildren, and parents, including legally adopted children.
Operating data for Swifty Corporation are presented below. 2022 2021Sales revenue $830,700 $634,900 Cost of goods sold 529,000 415,000 Selling expenses 124,700 73,600 Administrative expenses 78,800 53,900 Income tax expense 33,500 23,400 Net income 64,700 69,000 Prepare a schedule showing a vertical analysis for 2022 and 2021. (Round percentages to 1 decimal place, e.g. 12.1%.)
Answer and Explanation:
The preparation of the vertical analysis is presented below:
Particulars Amount % Amount %
Sales $830,700 100 $634,900 100
Less:
Cost of goods sold $529,000 63.7 $415,000 65.4
Gross Profit $301,700 36.3 $219,900 34.5
Less:
Selling Expenses $124,700 15.0 $73,600 11.6
administrative expenses $78,800 9.5 $53,900 8.5
Total Operating
expenses $203,500 24.5 $127,500 20.9
Income before
income taxes $98,200 11.8 $92,400 14.5
Less:
Income tax expenses $33,500 4.0 $23,400 3.7
Net Income $64,700 7.8 $69,000 10.8
Working note
The percentage is like
= Items value ÷ sales × 100
Like for cost of goods sold
= $529,000 ÷ $830,700 × 100
= 63.68%
It is same applicable for other items also
Taking all parameters into account, what would you expect to be the probability of it costing exactly $15 to produce one kilogram of penicillin? State where/how you found your answer.
Answer:
Worst case = $28 per kilogram
Base case = $16 per kilogram
Best case = $10.50 per kilogram.
Explanation:
Based on the information and data given in slide 37 what i would expect to be the probability of it costing would tend to depend on the worst, base and best case scenarios once all the parameters given are been taken into account.
The unit of production will tend to cost dollar per Kilogram which means that Worst case will be $28 per kilogram ,Base case will be $16 per kilogram and Best case will be $10.50 per kilogram. .
Suppose there are 11 buyers and 11 sellers, each willing to buy or sell one unit of a good, with values {$14, $13, $12, $11, $10, $9, $8, $7, $6, $5, $4,}. Assume no transaction costs and a competitive market. If there is a market maker in this market. What is the profit maximizing bid-ask spread per unit for a market maker? a. $9 bid; $9 ask b. $6 bid; $12 ask c. $8 bid; $10 ask d. $7 bid; $11 ask
Answer:
Explanation:
From the question given; The objective here is to determine the profit maximizing bid-ask spread per unit for a market maker. In order to achieve that; The demand supply schedule of the number of units bought and sold need to be computed which is shown in the table below.
Price Quantity demanded by buyers Quantity sold by sellers
$14 1 11
$13 2 10
$12 3 9
$11 4 8
$10 5 7
$9 6 6
$8 7 5
$7 8 4
$6 9 3
$5 10 2
$4 11 1
However; As the two transactions are happening simultaneously; There are 11 people participating in buying of a good and selling from one person to the other.
But the maximum even number of people that can be part of this trade is only 10 people.
So; for the individual having an higher value for the good will be able to afford it and which are those that falls into the category of $14,$13,$12,$11,$10,$9 can place bid for the good.
On the other hand, the individual having a lower value for the good will sell it and which are those that falls into the category of $4,$5,$6,$7,$8,$9 and would want to sell it for the ask price of the good.
In this trend, we understand that the individual valuing the good for $9 won't be able to participate due to the fact that He appears on both trends because in the demand side , he have the lowest willingness to pay and at the seller's side he has the the highest value for the good and that the equilibrium price in this market is $ 9 because at this price the quantity demanded equals quantity supplied .
Thus; we can conclude that there are 5 transactions in the maximizing bid-ask spread per unit for a market maker.
Lucy's Music Emporium opened its doors on January 1, 2015, and it was granted permission to use the same depreciation calculations for shareholder reporting and income tax purposes. The company planned to depreciate its fixed assets over 20 years, but in December 2015 management realized that the assets would last for only 15 years. The firm's accountants plan to report the 2015 financial statements based on this new information. How would the new depreciation assumption affect the company's financial statements
Answer: d. The firm's cash position in 2015 and 2016 would increase.
Explanation:
The financila statements had been calculated with the view that fixed assets would be depreciated over a 20 year period. However, it was discovered that the assest should be depreciated over 15 years instead. This reduction in the period would have the effect for increasing the depreciation payment.
For example, say the asset cost $20,000 and was originally to be depreciated over 20 years using Straight Line Depreciation. This means that the depreciation per year would be,
= [tex]\frac{20,000}{20}[/tex]
= $1,000 a year.
If it was however discovered that it was supposed to be 15 years that figure would go to,
= [tex]\frac{20,000}{15}[/tex]
= $1,333.33 a year
Notice how depreciation increased. Lucy's Music emporium will therefore see their depreciation cost rise. Depreciation is subtracted from revenue as it is tax deductible. When Lucy's Emporium deduct this new depreciation, they will have less profit. They will be taxed on this less profit and so pay a lower tax. This will thus increase their cash holdings because Depreciation is a non cash expense and does not actually require a cash payment.
You plan to borrow money from your grandmother to start a new chocolate candy business. You agree to make one payment of $100,000 at the end of 6 years and negotiate an interest rate of 7%. Your grandmother has offered to reduce either the interest rate or the number of years before the $100,000. Assuming your grandmother will lend you the present value of the final payment and that you want to borrow as much as possible today, which option would you prefer?
Answer:
future payment $100,000 in 6 years
agreed interest rate 7%
the present value of the $100,000:
PV = $100,000 / (1 + 7%)⁶ = $66,634
if your grandmother really likes you and offers to either reduce the interest rate or the number of years, you should choose a reduction in the interest rate:
PV at 6% = $100,000 / (1 + 6%)⁶ = $66,634
PV at 5% = $100,000 / (1 + 5%)⁶ = $74,622
PV at 4% = $100,000 / (1 + 4%)⁶ = $79,031
PV at 3% = $100,000 / (1 + 3%)⁶ = $83,748
PV at 2% = $100,000 / (1 + 2%)⁶ = $88,797
PV at 1% = $100,000 / (1 + 1%)⁶ = $94,205
the less the interest rate, the higher the present value of the $100,000
At the current year-end, Simply Company found that its overhead was underapplied by $2,500, and this amount was not considered material. Based on this information, Simply should: Multiple Choice Close the $2,500 to Cost of Goods Sold. Close the $2,500 to Finished Goods Inventory. Do nothing about the $2,500, since it is not material, and it is likely that overhead will be overapplied by the same amount next year. Carry the $2,500 to the income statement as "Other Expense". Carry the $2,500 to the next period.
Answer:
Close the $2,500 to Cost of Goods Sold
Explanation:
The under applied overhead is added to the Cost of Goods Sold amount.
The same amount would be debited to the cost of goods sold and the manufacturing overhead would be credited with the same amount that is $ 2500.
Under applied overhead means that the overhead actually incurred is more than the overhead planned of to be incurred. So we add back the amount by which it is less.
Esquire Comic Book Company had income before tax of $1,000,000 in 2016 before considering the following material items:
1. Esquire sold one of its operating divisions, which qualified as a separate component according to generally accepted accounting principles. The before-tax loss on disposal was $350,000. The division generated beforetax income from operations from the beginning of the year through disposal of $500,000. Neither the loss on disposal nor the operating income is included in the $1,000,000 before-tax income the company generated from its other divisions.
2. The company incurred restructuring costs of $80,000 during the year.
Required: Prepare a 2016 income statement for Esquire beginning with income from continuing operations. Assume an income tax rate of 40%. Ignore EPS disclosures.
Answer:
Esquire Comic Book Company
Income Statement
For the Year Ended December 31, 2016
Operating income $1,000,000
Restructuring costs ($80,000)
Income from continuing operations b/ Taxes $920,000
Income tax expense ($368,000)
Income from continuing operations $552,000
Discontinued operations:
Operating income $500,000Loss on disposal ($350,000)Income tax on discontinued operations ($60,000)Income from discontinued operations $90,000
Net income $642,000
Explanation:
Income from discontinued operations must be reported separately, but any restructuring costs must be included as operational expenses.
The Old World Café’s cash register receipts showed total sales of $884. The cash equaled $534, and the credit card slips equaled $237. How much of the sales are not accounted for? What might explain the difference?
Answer:the answer is $307
Explanation: some one didn't pay
Alexander and Kristin are executive managers at Safety First Fall Safety Equipment Co. They realize that within the last several quarters, they have been treating the performance metrics from the company's two very distinct divisions the same rather than focusing on the unique aspects of each division. They have inaccurately assessed divisional performance as a result. Alexander and Kristin realize they have fallen prey to a cognitive bias known as:_______
a. common measures bias
b. motivated reasoning
c. surrogation
d. uncommon measures bias
Answer:
The correct answer to the following question will be Option A (Common measures bias).
Explanation:
CMS occurs because once variations throughout order to respond have been triggered either by method rather than with the real propensities of the participants that only the equipment is trying to expose.It suggested a lack of desire on the part of the decision-maker to integrate specific knowledge because this knowledge provides additional cognitive effort. It's streamlined.The remaining three solutions are not relevant to the situation in question. So Choice A is the right one.
How many years would it take for Jughead to save an adequate amount for retirement if he deposits $2,000 per month into an account beginning today that pays 12 percent per year if he wishes to have a total of $1,000,000 at retirement
Answer:
The number of year needed to save the amount = 36.2739
Explanation:
The annual deposit amount (A) = $2000
Annual interest rate (r ) = 12 %
The retirement amount or the expected amount at the time of retirement (FV) = $1000000
Number of years = n
So if the Jughead want the retirement amount $1000000 that has interest rate 12 percent then we need to calculate the number of years.
Below is the calculation of number of years.
[tex]FV = A \frac{(1 + r)^{n}}{r} \\1000000 = 2000 \frac{(1 + 12 \ percent )^{n} - 1}{12 \ percent} \\\frac {1000000}{2000} = \frac{(1 + 12 \ percent )^{n} - 1}{12 \ percent} \\500 = \frac{(1 + 0.12)^{n} - 1}{0.12} \\ n = 36.2739 \ years[/tex]
On May 1, 2021, Bonita Industries declared and issued a 10% common stock dividend. Prior to this dividend, Bonita had 195000 shares of $1 par value common stock issued and outstanding. The fair value of Bonita's common stock was $24 per share on May 1, 2021. As a result of this stock dividend, Bonita's total stockholders' equity:______
a. decreased by $480700.
b. increased by $480700.
c. did not change.
d. decreased by $23000.
Answer:
No Answer in Option but the Equity decreases by $468,000
Explanation:
From the question,
Common Stock that Bonita industries had at par $1 = $195,000
They issued a common stock dividend= 10%
The Value of Stock dividend = 10/100 * 195,000 = $19,500
The fair value of Bonita's common stock was $24 per share on May 1, 2021. Hence, the stock dividend will be 19,500 * 24 = $468,000
We must understand that Stock dividend are issued from Retained Earning, hence as a result of this stock dividend, Bonita's total stockholder equity decreased by $468,000
What advice would you offer an Advisor, Laggard, or Mechanic in their quest to become an Orchestrator? Are there any other dimensions you would choose to classify CIOs by other than "Leadership Capability" and "Decision-Making Authority"? Why?
Answer: The answer is given below
Explanation:
Here is the complete question:
Preston, Leidner, and Chen in 2008 discuss four CIO leadership profiles: Orchestrator, Advisor, Laggard, and Mechanic. What advice would you offer an Advisor, Laggard, or Mechanic in their quest to become an orchestrator?
Are there any other dimensions you would choose to classify CIOs by other than "Leadership Capability" and "Decision-Making Authority"? Why?
IT Advisor:
This is a high leadership making authority. In every team, there is division of labor and as an Advisor, one may be called upon to lead the time or give opinions on certain issues. Therefore, IT Advisor should learn how to convince people to accept his or her opinion. Gaining more trust will help in increasing the decision making of the person and more people will believe in his judgement.
IT Laggard:
This is a low leadership capability and a high decision making authority. Also, they need to get the much needed trust from their team members and also within the organization. It should be noted that they are capable and professional people. In order to enhance the more practical aspects of the integration, they should discuss more on the specific implementation methods to their teams and also convince the members and gain their trust.
IT Mechanic:
This is a low leadership capability and low decision making authority. I believe the most vital step for IT mechanic is for the person to strengthen their professional ability. When the person has the required professional capacity, then the person can lead the team to achieve its goal and also make better decision. This will make the IT Mechanics respected, increase his expertise and also gain team members trust.
I believe that apart from "leadership capability" and the "decision-making authority," a company can also use professional capabilities to classify CIOs. The possession of professional ability by the CIOs, can help them in making better decisions which will be of immense benefit to the company.
Suppose the U.S. economy is initially at long run equilibrium, when there is an unexpected large increase in the price of steel used by firms in production. How does this impact the U.S. economy? (write out either "inflationary" or "recessionary" In response to this what monetary policy would the Fed employ? (write one of the following: "raise taxes", "lower taxes", "raise money supply", or "lower money supply" What is the most likely way the Fed will accomplish this change in the monetary policy? (write one of the following: "buy securities", "sell securities", "raise discount rate", "lower discount rate", or "legislation" This action by the Fed will cause interest rates to _______. (Write out "increase" or "decrease" The end result of the monetary policy is a shift of which curve in which direction. (Write out one of the following: "AD right", "AD left" "AS left", "AS right"
Answer:
The price hike in the price of steel would cause an inflationary push in the U.S. economy, because steel is a input to the production processes of many firms.
In this scenario, the fed would lower the money supply in order to stop the inflationary push from continuing. To do so, the fed would sell government securities.
Where does Hewitt’s leadership fall on the Managerial Grid discussed in the chapter? (5 marks) (b) What deficiencies or shortcomings would you identify in Hewitt’s leadership
Answer:
The Hewitt's leadership falls on the the Middle of Road Management, which is carefully assessed, realistic and in turn creates a balance between concerns for people and production.
The shortcomings of this leadership are, Failure to motivate and inspire people, lack of passion and enthusiasm, Inability to keep workers.
Explanation:
Solution:
(a) The leadership of Hewitt fall towards the Middle of Road Management at 5,5 points, as it is well realistic, carefully assessed or adjusted, and satisfies the concerns for the people and production.
(b) The shortcomings or defaults discovered in Hewitt's Leadership is stated as follows:
The failure to motivate and inspire peopleThe Inability to retain employees or workersThe lack of passion and willingness or zealThe lack of appreciation on employee or individualDiogo has a utility function,U(q1, q2) = q1 0.8 q2 0.2,where q1 is chocolate candy and q2 is slices of pie. If the price of slices of pie, p2, is $1.00, the price of chocolate candy, p1, is $0.50, and income, Y, is $100, what is Diogo's optimal bundle?The optimal value3 of good q1 isq = units. (Enter your response rounded to two decimal places.)1 The optimal value of good q2 isq2 = units. (Enter your response rounded to two decimal places.)
Answer:
[tex](0.5 \times 8q_2)+q_2=100\\\\5q_2=100\\\\q_2=20[/tex]
since [tex]q_2 = 20[/tex]
[tex]q_1 = 8*20\\\\q_1=160[/tex]
Explanation:
U(q₁ q₂)
[tex]q_1^{0.8}q_2^{0.2}\\\\P_1= \$0.5 \ P_2=\$1 \ Y=100[/tex]
Budget law can be given by
[tex]P_1q_1+P_2q_2=Y\\\\0.5q_1+q_2=100[/tex]
Lagrangian function can be given by
[tex]L=q_1^{0.8}q_2^{0.2}+ \lambda (100-0.5q_1-q_2)[/tex]
First order condition csn be given by
[tex]\frac{dL}{dq} =0.8q_1^{-0.2}q_2^{0.2}-0.5 \lambda=0\\\\0.5 \lambda=0.8q_1^{-0.2}q_2^{0.2}---(i)[/tex]
[tex]\frac{dL}{dq} =0.2q_1^{0.8}q_2^{-0.8}- \lambda=0\\\\ \lambda=0.2q_1^{0.8}q_2^{-0.8}---(ii)[/tex]
[tex]\frac{dL}{d \lambda} =100-0.5q_1-q_2=0\\\\0.5q_1+q_2=100---(iii)[/tex]
From eqn (i) and eqn (ii) we have
[tex]\frac{0.5 \lambda}{\lambda} =\frac{0.8q_1^{-0.2}q_2^{0.2}}{0.2q_1^{0.8}q_2^{-0.8}} \\\\0.5=\frac{4q_2}{q_1}\\\\q_1=8q_2}[/tex]
Putting [tex]q_1=8q_2[/tex] in euqtion (iii) we have
[tex](0.5 \times 8q_2)+q_2=100\\\\5q_2=100\\\\q_2=20[/tex]
since [tex]q_2 = 20[/tex]
[tex]q_1 = 8*20\\\\q_1=160[/tex]
Consider the following data for two products of Gitano Manufacturing. (Loss amounts should be indicated with a minus sign. Round your intermediate calculations and "OH rate and cost per unit" answers to 2 decimal places.)
Product A Product B
Number of units produced 11,500 units 1.700 units
Direct labor cost ($29 per DLH) 0.16 DLH per unit 0.24 DLH per unit
Direct materials cost $2.10 per unit $3.10 per unit
Activity Overhead costs
Machine setup $94,104
Materials handling 53,000
Quality control inspections 73.200
$220,304
Required
a. Using direct labor hours as the basis for assigning overhoad costs, determine the total production cost per unit for each product line.
b. If the market price for Product A is $28.68 and the market price for Product B is $58, determine the profit or loss per unit for each.
c. Consider the following additional information about these two product lines. If ABC is used for assigning overhead costs to what is the cost per unit for Product A and for Product B?
Answer:
a. Product A $257,830 , Product B $57,086
b. Product A $71,990 , Product B $41,514
c. Hie, for this part of the question there is missing information regarding the Activities for the two Products for each Activity Center.
However the Procedure to deal with the required is explained below :
Step 1 : Determine the Overhead Absorption Rate for Each Activity Center
(We have three Activity Centers: Machine setup, Materials handling: Quality control inspections )
Overhead Absorption Rate = Total Overhead (for each) / Total Number of Activity
Step 2: Absorb the Costs in the products using the Rate for each cost center and the number of activity incurred in each cost center for the two Products
Overhead (Activity Center) = Overhead Absorption Rate× Activity Specific to the Product.
Step 3 : Determine the Total Costs
Total Cost for one Product would include the Total Costs for each Activity Center (which are your overheads) plus the Direct Labor and Direct Material Costs as Calculated in Part b.
Explanation:
Part a
Total Production Cost = Direct Costs + Indirect costs (overheads)
First determine the predetermined rate based on direct labor hours.
Total direct labor hours.
Product A (11,500×0.16) = 1,840
Product B (1.700×0.24) = 408
Total = 2,248
Predetermined rate = total overhead cost / total direct labor hours
= $220,304 / 2,248
= $98 per labor hour
Assigning Overhead Cost
Total Overhead Costs
Product A (1,840×$98) = 180,320
Product B (408×$98) = 39,984
Total = 220,304
Total Costs
Product A Product B
Direct labor cost
Product A ( 1,840×$29) 53,360
Product B (408×$29) 11,832
Direct materials cost
Product A ( 11,500×$2.10) 24,150
Product B (1.700×$3.10) 5,270
Overheads
Product A 180,320
Product B 39,984
Total Costs 257,830 57,086
Part b.
Profit = Selling Price - Expenses
Product A Product B
Sales
Product A ( 11,500×$28.68) 329,820
Product B (1.700×$58) 98,600
Manufacturing Costs (257,830) (57,086)
Profit 71,990 41,514
Here are comparative statement data for Ivanhoe Company and Pharoah Company, two competitors. All balance sheet data are as of December 31, 2017, and December 31, 2016.
2017 2016 2017 2016
(Ivanhoe (Ivanhoe (Pharoah (Pharoah
Company) Company) Company) Company)
Net sales $1,865,000 $595,000
Cost of goods sold 1,064,000 279,000
Operating expenses 252,000 84,000
Interest expense 8,000 1,800
Income tax expense 70,900 35,000
Current assets 583,495 $559,214 149,171 $142,246
Plant assets (net) 942,972 895,000 250,113 225,203
Current liabilities 118,722 135,709 63,273 54,203
Long-term liabilities 204,042 161,100 53,020 44,750
Common stock, $10 par 895,000 895,000 214,800 214,800
Retained earnings 308,703 262,405 68,192 53,696
Required:
Prepare a vertical analysis of the 2017 income statement data for Ivanhoe Company and Pharoah Company.
Answer:
Condensed Income Statement
For the Year Ended December 31, 2017
Ivanhoe Company Pharaoh Company
Net sales $1,865,000 100% $595,000 100%
Cost of goods sold ($1,064,000) 57% ($279,000) 47%
Gross profit $801,000 43% $316,000 53%
Operating expenses ($252,000) 14% ($84,000 ) 14%
EBIT $549,000 29% $232,000 39%
Interest expense ($8,000) 0.4% ($1,800 ) 0.3%
Income tax expense ($70,900) 3.8% ($35,000) 5.9%
Net income after taxes $470,100 25.2% $195,200 32.8%
A vertical analysis of an income statement uses net sales as the reference for all the other accounts. The other accounts are shown as a % of total net sales.
Purpose of Assignment The purpose of this assignment is for students to employ capital budgeting techniques using time value of money concepts to determine the acceptability of large dollar value assets. Assignment Steps Scenario: A firm has projected free cash flows of $575,000 for Year 1, $625,000 for Year 2, and 650,000 for Year 3, $725,000 for Year 4, and 850,000 for Year 5. The projected terminal value at the end of Year 5 is $6,000,000. The firm's Weighted Average cost of Capital (WACC) is 12.5%. Create a Microsoft® Excel® document to determine the Discounted Cash Flow (DCF) value of the firm based on the information provided above. Recommend acceptance of this project using net present value criteria using a Microsoft® Word® document. Include up to what level of initial investment you would accept the project? Why? Give a complete explanation of up to 350 words. Display your calculations. Coursehero
Answer:
Present Value 5,715,331.32
We are going to accept the project only if the initial investment is at 5,715,331 or below in order to achieve the return to support the cost of capital structure of the company
Accepting a project with a higher cost will not generate enought cashflow to sustain the patyment of debt and the return expected from the stockholders therefore, will generate a economic result and investor will leave the company for other which can sustain their desired return.
Explanation:
We are going to discount the yearly cash-flow at the given rate of 12.50%
then, the terminal value which is the present value of the future period will also be discounted at this rate.
The sum of all this will be the present value of the firm.
[tex]\left[\begin{array}{ccc}$Year&$Cash Flow&$Discounted\\1&575000&511111.11\\2&625000&493827.16\\3&650000&456515.77\\4&725000&452613.93\\5&850000&471689.61\\$terminal&6000000&3329573.74\\Present&Value&5715331.32\\\end{array}\right][/tex]
The formula we use the present value of a lump sum:
[tex]\frac{Maturity}{(1 + rate)^{time} } = PV[/tex]
We are going to accept the project only if the initial investment is at 5,715,331 or below in order to achieve the return to support the cost of capital estructure of the company
The concept of --------, while not mentioned in the U.S. Constitution, is an important part of our legal system.
Answer:
judicial review,
Explanation:
research lol
On October 31, 2018, your company's records say that the company has $20,419.93 in its checking account. A review of the bank statement shows you have three outstanding checks totaling $8,912.25, and the bank has paid you interest of $27.14 and charged you $22.00 in service charges. The bank statement dated October 31, 2018 would report a balance of: (Round your answer to 2 decimal places.)
Answer: $29337.32
Explanation:
The following can be reduced from the question:
Balance as per company's ledger = $20,419.93
Add the outstanding checks= $8912.25
Add interest = $27.14
Less the fee charged by the bank = $22.00
The bank statement dated October 31, 2018 would report a balance of:
=($20,419.93 + $8912.25 + $27.14) - $22.00
= $29337.32
Shulman Inc. has the following data, in thousands. Assuming a 365-day year, what is the firm's cash conversion cycle? Annual sales = $45,000 Annual cost of goods sold = $30,000 Inventory = $4,500 Accounts receivable = $1,800 Accounts payable = $2,500
Answer:
38.93
Explanation:
Firm Cash Conversion Cycle = Inventory Conversion Period + Average Collection Period - Payable Deferral Period
Inventory Conversion Period = 365 * Inventory / Annual cost of goods sold
365 days * 4500 / 30000 = 54.75
Average Collection Period = 365 days * Account receivable / sales
= 365 * 1800 / 45000 = 14.60
Payable Deferral Period = 365 days * Account payable / sales = 365 * 2500 / 30000 = 30.42
Hence, Firm Cash Conversion Cycle = 54.75 + 14.60 - 30.42 = 38.93
The firm Cash Conversion Cycle is 38.93
The demand curve for the new computer game, Rock and Roll Trivia, is given as follows: Q = 200 - 5P - .1Pc - .5Pd + .2A - I Where P is the price of the game, Pc is the price of a computer, Pd is the price of a diskette, A is the level of advertising, and Q is the level of income. Suppose P = 10, Pc = 100, Pd = 2, A = 5, and I = 50. What is the price elasticity of demand?
Answer:
Income elasticity of demand = - 0.56
Explanation:
Given,
P=10, Pc=100, Pd=2, A=5, and I=50.
So,
Q=200-5(10)-.1(100)-.5(2)+.2(5)-(50).
Q=90 (level of income)
Computation:
Given , I = 50, Q = 90.
ΔQ / ΔI = -1
Income elasticity of demand = (ΔQ / ΔI) x (I / Q)
Income elasticity of demand = - 1 x (50 / 90)
Income elasticity of demand = - 0.56
MFG Manufacturing sells a product for $40 per unit. The production cost of the product is $21 per unit: direct materials of $8, direct labor of $7, variable overhead of $4 and fixed overhead of $2. The fixed overhead per unit comes from dividing $500,000 of fixed factory overhead by 250,000 units produced. In addition, MFG pays $3 for shipping each unit sold. Finally, MFG has fixed costs outside the factory (such as office building depreciation and salaries) that total $200,000 per year. Assuming breakeven in units was correctly computed to be 20,000 units, breakeven in dollars is:
Answer:
Break-even sales =$800,000
Explanation:
The break-even sales is the amount of revenue that a business must generate that would equate its total costs to total revenue. At the break even sales, the contribution is exactly to total iced cost, and the business makes no profit or loss
Break-even (units) = Total general fixed cost /(selling price- variable cost)
Break-even sales = Break-even (in units) × Selling price
Break-even sales = 20,000 × $40 =$800,000
Break-even sales=$800,000
If a fixed asset, such as a computer, were purchased on January 1st for $1,832.00 with an estimated life of 6 years and a salvage or residual value of $123.00, what is the journal entry for monthly expense under straight-line depreciation?
Answer:
Dr depreciation expense $ 23.74
Cr accumulated depreciation $ 23.74
Explanation:
The depreciation per month would be first thing to determine:
Yearly depreciation =Cost of asset-residual value/useful life
cost of asset is $1,832.00
residual value which is disposal value at the end of useful life is $123.00
Useful life is 6 years
yearly depreciation charge= ($1,832.00-$123.00)/6=$ 284.83
Monthly depreciation expense=yearly depreciation charge/12=$284.83/12=$23.74
The journal entry monthly would be a debit to depreciation expense and a credit to accumulated depreciation
Widgeon Co. manufactures three products: Bales; Tales; and Wales. The selling prices are: $55; $78; and $32, respectively. The variable costs for each product are: $20; $50; and $15, respectively. Each product must go through the same processing in a machine that is limited to 2,000 hours per month. Bales take 7 hours to process, Tales take 4 hours, and Wales take 1 hour. What is the contribution margin per machine hour for Bales
Answer:
$5/h
Explanation:
The contribution margin for Bales is ...
$55 -20 = $35
The machine hours for Bales is 7.
The contribution margin per machine hour is ...
$35/(7 h) = $5/h
