Answer and Explanation:
The categorizaton is shown below:
1. f. Current liabilities
2. d. Intangible assets
3. c. Property, plant, and equipment
4. a. Current assets
5. g. Long Term liabilities
6. f Current Liabilities
7. f Current Liabilities
8. b Investment and funds
9. b Investment and funds
10. a. Current assets
11. c. Property, plant, and equipment
12. c. Property, plant, and equipment
13. f. Current liabilities
14. d. Intangible assets
15. h paid in capital
16. b Investment and funds
17. a. Current assets
18. f Current Liabilities
Elbert uses FedEx in a scheme to defraud Global Sales Company by obtaining merchandise to which he is not entitled. Found guilty of mail fraud, Elbert can be punished by a. imprisonment for up to five years and fines of up to $1,000. b. imprisonment for up to fifty years. c. none of the choices. d. fines up to $5 million.
Answer: None for the choices
Explanation:
Mail fraud is a crime when an individual has the intention to defraud someone or a firm through mail by sending something that has to do with fraud.
From the question, we are told that Elbert uses FedEx in a scheme to defraud Global Sales Company by obtaining merchandise to which he is not entitled. The punishment for mail fraud in this case will be imprisonment for up to twenty years and/or fines.
None of the options given in the question is the right answer.
Answer:
a. imprisonment for up to five years and fines of up to $1,000
Explanation:
Mail fraud occurs when an entity decides to defraud another person by taking wrongful ownership of property that is not theirs. This is done by use of mails, by phone, or online.
For example if a person convinces another under false pretense to transfer funds using a post office, it is categorised as mail fraud. If it occurs accross state lines the Federal Government can take jurisdiction of the case.
This type of fraud attracts imprisonment for up to five years and fines of up to $1,000
An investment offers a total return of 14.0 percent over the coming year. Janice Yellen thinks the total real return on this investment will be only 5.5 percent.
Required:
What does Janice believe the inflation rate will be over the next year?
Answer:
8.06%
Explanation:
According to the Fisher equation
( 1 + Total rate of return) = (1 + real rate of return) x ( 1 + inflation rate)
(1.14) = (1.055) x ( 1 + inflation rate)
Inflation rate = 1.080569 - 1 = 0.080569 = 8.06%
Bryant Company has a factory machine with a book value of $88,100 and a remaining useful life of 7 years. It can be sold for $30,900. A new machine is available at a cost of $413,300. This machine will have a 7-year useful life with no salvage value. The new machine will lower annual variable manufacturing costs from $579,100 to $505,700. Prepare an analysis showing whether the old machine should be retained or replaced.
Answer: The old factory machine should be replaced as from computation below will lead to a lower cost for Bryant Company
Explanation:
Particulars Retain Equipment Replace Equipment Net Income
Increase/Decrease
Variable manufacturing costs
$4,053,700 $3,539,900 $513,800
$579,100 x 7 $505,700 x 7
New machine cost $413,300 -$410,300.
Sale of old machine -$30,900 $30,900.
Total $4,053,700 $3,922,300 $134,400
The old factory machine should be replaced as from computation will lead to a lower cost of $3,922,300 instead of $4,053,700 for Bryant Company
As a result of a thorough physical inventory, Coronado Company determined that it had inventory worth $321000 at December 31, 2020. This count did not take into consideration the following facts: Walker Consignment currently has goods worth $46300 on its sales floor that belong to Coronado but are being sold on consignment by Walker. The selling price of these goods is $75000. Coronado purchased $21100 of goods that were shipped on December 27, FOB destination, that will be received by Coronado on January 3. Determine the correct amount of inventory that Coronado should report.
Answer:
The correct cost of inventory that Coronado should report is $367300
Explanation:
The goods sent on consignment still belong to the consignor until they are sold off by the consignee. So, the consignor should add the unsold consignment goods in its inventory. Thus we will add the cost of goods sent on consignment to the value of inventory.
Value of inventory = 321000 + 46300 = $367300
The goods purchased by Coronado on 27 December with FOB destination should not be added to the cost of inventory as with FOB destination terms, the goods do not belong to the buyer until they are delivered to their destination by the seller.
Thus, the correct cost of inventory that Coronado should report is $367300
Exercise 17-5 Assigning costs using ABC LO P3 Xie Company identified the following activities, costs, and activity drivers for this year. The company manufactures two types of go-karts: Deluxe and Basic. Activity Expected Costs Expected Activity Handling materials $ 625,000 100,000 parts Inspecting product 900,000 1,500 batches Processing purchase orders 105,000 700 orders Paying suppliers 175,000 500 invoices Insuring the factory 300,000 40,000 square feet Designing packaging 75,000 2 models Assume that the following information is available for the company’s two products for the first quarter of this year. Deluxe Model Basic Model Production volume 10,000 units 30,000 units Parts required 20,000 parts 30,000 parts Batches made 250 batches 100 batches Purchase orders 50 orders 20 orders Invoices 50 invoices 10 invoices Space occupied 10,000 sq. ft. 7,000 sq. ft Models 1 model 1 model Required: Compute activity rates for each activity and assign overhead costs to each product model using activity-based costing (ABC). What is the overhead cost per unit of each model? (Round activity rate and average OH cost per unit answers to 2 decimal places.)
Answer:
Instructions are below.
Explanation:
First, we need to calculate the activity rate for each activity:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Handling materials= 625,000/100,000= $6.25 per part
Inspecting product= 900,000/1,500= $600 per batch
Processing= 105,000/700= $150 per order
Paying suppliers= 175,000/500=$350 per invoice
Insuring the factory= 300,000/40,000= $7.5 per square feet
Designing packaging= 75,000/2= $37,500 per model
Now, we can allocate overhead to each model:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Deluxe:
Handling materials= 6.25*20,000= 125,000
Inspecting product= 600*250= 150,000
Processing= 150*50= 7,500
Paying suppliers= 350*50= 17,500
Insuring the factory= 7.5*10,000= 75,000
Designing packaging= 37,500*1= 37,500
Total allocated overhead= $412,500
Basic:
Handling materials= 6.25*30,000= 187,500
Inspecting product= 600*100= 160,000
Processing= 150*20= 3,000
Paying suppliers= 350*10= 3,500
Insuring the factory= 7.5*7,000= 52,500
Designing packaging= 37,500*1= 37,500
Total allocated overhead= $444,000
Finally, the unitary overhead:
Deluxe= 412,500/10,000= $41.25
Basic= 444,000/30,000= $14.8
Clearlake Optical has developed a new lens. The owners plan to issue a $8,000,000 30-year bond with a contract rate of 7.5% paid annually to raise capital to market this new lens. This means that Clearlake will be required to pay 7.5% interest each year for 30 years. To pay off the debt, Clearlake will also set up a sinking fund paying 8% interest compounded annually. What size annual payment is necessary for interest and sinking fund combined
Answer:
$670,619.60
Explanation:
the annual interests are $8,000,000 x 7.5% = $600,000
in order to be able to save $8,000,000 in 30 years, we need to deposit:
FV of ordinary annuity = annual payment x annuity factor
annual payment = $8,000,000 / 113.283 (FV annuity factor, 8%, 30 periods) = $70,619.60
total annual payment to cover both interests and sinking fund = $600,000 + $70,619.60 = $670,619.60
in creating the master budget, the second budget a company prepares is the production budget. a. True b. False
Answer:
In creating the master budget, the second budget a company prepares is the production budget.
a. True
Explanation:
When a company prepares the master budget, it first prepares the sales budget, followed by the production budget. The production budget calculates the costs of materials, labor, and overhead based on the number of units to be manufactured within the budget period. The units of products are derived from the sales forecast and the planned amount of ending finished goods inventory.
The theory of the term structure of interest rates, which suggests that long-term rates are determined by the average of short-term rates expected over the time that a long-term bond is outstanding, is the
Answer:
Expectations Theory
Explanation:
Victor Vroom's Expectancy Theory deals with motivation and management. Vroom's theory assumes that behaviour is a result of conscious choices among alternatives. The goal of options is to maximize pleasure and minimize suffering. Along with Edouard Lawler and Lyman Porter, Vroom suggested that the relationship between people's behaviour at work and their goals was not as straightforward as other scientists had first imagined it. Vroom realized that employee performance is based on different factors such as personality, skills, knowledge, experience and abilities.
Expectation theory states that people have different sets of goals and can be motivated if they have certain expectations.
EXPECTATIONS OF THE THEORY OF EXPECTATIONS include the following:
There is a positive correlation between effort and performance.The favourable performance will result in a desirable reward.The reward will satisfy a critical need.The desire to satisfy the need is strong enough to make an effort meaningful.manufactures an optical switch that it uses in its final product. TechSystems incurred the following manufacturing costs when it produced 73,000 units last year: LOADING...(Click the icon to view the manufacturing costs.) Another company has offered to sell TechSystems the switch for $13.00 per unit. If TechSystems buys the switch from the outside supplier, none of the fixed costs are avoidable. The company prepared an outsourcing decision analysis to show the cost per unit of making the switches versus the cost per unit of buying (outsourcing) the switches. LOADING...(Click the icon to view the outsourcing decision analysis.) TechSystems needs 82,000 optical switches next year (assume same relevant range). By outsourcing them, TechSystems can use its idle facilities to manufacture another product that will contribute $220,000 to operating income, but none of the fixed costs will be avoidable. Should TechSystems make or buy the switches? Show your analysis. Complete the Best Use of Facilities Analysis. (Enter a "0" for any zero amounts.) TechSystems Best Use of Facilities Analysis Buy and Use Facilities for Other Make Product Expected sales price of the other product × × Total variable cost of obtaining the optical switches Expected net cost of obtaining the optical switches
Answer:
Since the question is missing most of its numbers, I looked for similar question.
variable cost per unit = $1,015,000 / 73,000 = $13.9041
total fixed costs = $490,000
since fixed costs are not avoidable, but can be used to generate $220,000 in revenues, the differential analysis is the following:
Make Buy Net income increase
(decrease)
variable costs $1,140,136.20 $0 $1,140,136.20
fixed overhead $490,000 $270,000 $220,000
purchase price $0 $1,066,000 ($1,066,000)
total $1,630,136.20 $1,336,000 $294,136.20
TechSystems should outsource the production since it will be able to increase its operating profits by $294,136.20.
Arntson, Inc., manufactures and sells two products: Product R3 and Product N0. The annual production and sales of Product of R3 is 1,100 units and of Product N0 is 200 units. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Expected Production Direct Labor-Hours Per Unit Total Direct Labor-Hours Product R3 1,100 8.0 8,800 Product N0 200 4.0 800 Total direct labor-hours 9,600 The direct labor rate is $24.10 per DLH. The direct materials cost per unit is $285.00 for Product R3 and $235.00 for Product N0. The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Estimated Expected Activity Activity Cost Pools Activity Measures Overhead Cost Product R3 Product N0 Total Labor-related DLHs $ 41,536 8,800 800 9,600 Production orders orders 56,010 1,200 200 1,400 Order size MHs 433,975 3,500 2,700 6,200 $ 531,521 The unit product cost of Product R3 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.) rev: 03_25_2018_QC_CS-119201 Multiple Choice $778.81 per unit $1,063.81 per unit $586.01 per unit $301.01 per unit
Answer:
Arntson, Inc.
The unit product cost of Product R3 under activity-based costing is closest to:
$778.81 per unit
Explanation:
a) Data and Calculations:
Annual production and sales:
Product R3 Product N0
Units 1,100 200
Direct Labor-Hours 1,100 200
Per Unit Total 8.0 4.0
Direct Labor-Hours 8,800 800
Total direct labor-hours 9,600
Direct labor rate is $24.10 per DLH.
Direct materials cost $285.00 $235.00
Estimated Expected Activity Cost Activity Measures Overhead Cost
Activity Pools
Overhead Cost Product R3 Product N0 Total
Labor-related DLHs $ 41,536 8,800 800 9,600
Production orders orders 56,010 1,200 200 1,400
Order size MHs 433,975 3,500 2,700 6,200
Total overhead costs $ 531,521
Activity rates: Product R3 Product N0
Labor-related DLHs $4.33 ($41,536/9,600) $38,104 $3,464
Production orders $40.00 ($56,010/1,400) 48,000 8,000
Order size MHs $70.00 ($433,975/6,200) 245,000 189,000
Total allocated overhead costs $331,104 $200,464
Product R3 Product N0
Units 1,100 200
Direct materials cost $285.00 $235.00 per unit
Total materials costs = $313,500 $47,000
Total direct labor costs 212,080 19,280
Total overhead costs 331,104 200,464
Total production costs $856,684 $266,744
Unit cost = $778.80 $1,333.72
Identify the effect that omitting each of the following items would have on the balance sheet
All Interest earned on a note receivable was not recorded.
Assets and stockholders' equity overstated
Depreciation on equipment was not recorded.
Assets understated and stockholders' equity overstated No adjustment was made for supplies used up during the month
Assets overstated and stockholders' equity
An attorney has earned 1/2 of a retainer fee that was received and recorded last month.
No adjustment was recorded for the amount earned.
Assets and stockholders' equity understated
Property taxes are paid annually.
The estimated monthly amount for the taxes was not recorded.
Liabilities and stockholders equity understated
Supplies used up during the month.
Stockholders' equity understated
An attorney has earned 1/2 of a retainer fee that was received and recorded last month.
No adjustment was recorded for the amount earned
Assets and stockholders' equity understated
Property taxes are paid annually.
The estimated monthly amount for the taxes was not recorded.
Liabilities and stockholders equity understated Wages are paid every Friday for the 5-day work week.
The month ended on Monday and no adjustment was recorded.
Liabilities and stockholders' equity overstated
Liabilities overstated and Services provided to customers on the last day of the month were not billed stockholders' equity understated
A tenant paid 6 months' rent in advance when he moved ir on the first day of the month.
No entry was made on the last day of the month
Liabilities understated and stockholders' equity overstated
Answer:
All Interest earned on a note receivable was not recorded.
Effect: Assets and stockholders' equity overstated
Explanation: An omitting of interest earned on a note receivable will result to an understatement of assets and stockholders’ equity
Depreciation on equipment was not recorded.
Effect: Assets understated and stockholders' equity overstated
Explanation: An omitting of depreciation on equipment will result to an overstatement of assets and stockholders’ equity
No adjustment was made for supplies used up during the month
Effect: Assets overstated and stockholders' equity
Explanation: An omitting of supplies adjustment will result to an overstatement of assets and stockholders’ equity
An attorney has earned 1/2 of a retainer fee that was received and recorded last month. No adjustment was recorded for the amount earned.
Effect: Assets and stockholders' equity understated
Explanation: An omitting of retainer fee adjustment will result to an overstated liabilities and understated stockholders’ equity
Property taxes are paid annually. The estimated monthly amount for the taxes was not recorded.
Effect: Liabilities and stockholders equity understated
Explanation: An omitting of property tax adjustment entry will result to an understated liabilities and overstated stockholders’ equity
Wages are paid every Friday for the 5-day work week. The month ended on Monday and no adjustment was recorded.
Effect: Liabilities and stockholders' equity overstated
Explanation: An omitting of outstanding wages adjustment entry will result to an understated liabilities and overstated stockholders’ equity.
Services provided to customers on the last day of the month were not billed
Effect: Asset and stockholders' equity understated
Explanation: An omitting for bill of services provided to customers on the last day of the month will result to an understatement of assets and stockholders’ equity
A tenant paid 6 months' rent in advance when he moved in on the first day of the month. No entry was made on the last day of the month
Effect: Liabilities understated and stockholders' equity overstated
Explanation: An omitting of prepaid rent adjustment entry will result to an overstated liabilities and understated stockholders’ equity
Under its executive stock option plan, N Corporation granted options on January 1, 2021, that permit executives to purchase 12.0 million of the company's $1 par common shares within the next eight years, but not before December 31, 2023 (the vesting date). The exercise price is the market price of the shares on the date of grant, $19 per share. The fair value of the options, estimated by an appropriate option pricing model, is $4 per option. No forfeitures are anticipated. Ignoring taxes, what is the effect on earnings in the year after the options are granted to executives
Answer:
N. Corporation
The effect on earnings in the year after the options are granted to executives is a reduction in the net income by $16 million because of the Compensation Expense that will be recorded.
The journal entry on December 31, 2021 (a year after) is:
Debit Compensation Expense $16,000,000
Credit Stock Options $16,000,000
To record compensation expense.
Explanation:
a) Data and Calculations:
Options grant date = January 1, 2021
Options granted = 12.0 million shares
Options vesting date = December 31, 2023
There are 3 years before the vesting date
Fair value of the options = $4
Therefore, Total Compensation Expense = Options granted*Fair value per option
= 12,000,000 * $4
= $48,000,000
Annual compensation expense from 2021 to 2023 = $48,000,000/3
= $16,000,000
You observed the bid rate of a New Zealand dollar is $.3324 while the ask rate is $.3342 at Bank X. The bid rate of the New Zealand dollar is $.3232 while the ask rate is $.3249 at Bank Y. What would be your dollar amount profit if you use $1,000,000 to execute locational arbitrage?
Answer:
The amount of profit is $23,084
Explanation:
First of all we need to convert the $1,000,000 to NZ$ as follow
Amount in NZ$ = Amount / Ask rate at Bank Y
Amount in NZ$ = $1,000,000 / $0.3249 per NZ$
Amount in NZ$ = NZ$ 3,077,870.11
Now sell the amount in the Bank X
Amount of Dollar available after sale = Amount in NZ$ x bid rate at Bank X
Amount of Dollar available after sale = NZ$ 3,077,870.11 x $0.3324 per NZ$
Amount of Dollar available after sale = $1,023,084.03
Now calculate the arbitrage profit
Arbitrage profit = $1,023,084.03 - $1,000,000
Arbitrage profit = $23,084.03
Arbitrage profit = $23,084
A firm expects to sell 25,000 units of its product at $11 per unit and to incur variable costs per unit of $6. Total fixed costs are $70,000. The total contribution margin is:_________
Answer:
Total contribution margin= $125,000
Explanation:
Giving the following information:
A firm expects to sell 25,000 units of its product at $11 per unit and to incur variable costs per unit of $6.
To calculate the total contribution margin, we need to use the following formula:
Total contribution margin= units sold*unitary contribuiton margin
Total contribution margin= 25,000*(11-6)
Total contribution margin= $125,000
Relay Corporation manufactures batons. Relay can manufacture 300,000 batons a year at a variable cost of$750,000 and a fixed cost of $450,000. Based on Relay's predictions, 240,000 batons will be sold at the regular price of $5.00 each. In addition, a special order was placed for 60,000 batons to be sold at a 40% discount off the regular price. Required: By what amount would income before income taxes be increased or decreased as a result of the special order
Answer:
The total rise in income is $30,000
Explanation:
The computation is shown below:
Sale price 3 {5 × (1 - 0.40)
Less: Incremental cost 2.5 ($750,000 ÷ 300,000)
Increase in income per unit 0.50
Divide by Total units 60,000
Total increase in income $30,000
Hence, the total rise in income is $30,000 and the same is to be considered
The total rise in income before tax is $30,000 as a result of a special offer when the Relay Corporation manufactures batons.
What is income?Income is defined as the consumption and saving opportunity achieved by a commodity within a nominal time structure, which is commonly represented in monetary words. Income is challenging to describe conceptually, and the explanation may be further across areas.
Computation of change in income:
According to the given information,
Regular price = $5.
Discount Rate=40%
Then sales price would be:
[tex]\text{Sale Price}= \text{Regular Price}(1- \text{Discount Rate})\\\\\text{Sale Price}=\$5 \text (1 - 0.40)\\\\\text{Sale Price}= \$3[/tex]
Then the incremental cost is:
[tex]\text{Incremental Cost}=\dfrac{ \text{Variable Cost}}{\text{Units Produced}}\\\\ \text{Incremental Cost}=\dfrac{\$750,000}{\$300,000}\\\\ \text{Incremental Cost}=2.5[/tex]
Increase in income per unit:
[tex]\text{Increase In Income}=\text{Sales Price}- \text{Incremental Cost}\\\\\text{Increase In Income}=\$3-\$2.5\\\\\text{Increase In Income}=0.50[/tex]
Therefore, the increase in income is :
[tex]=\text{Per unit Increase In Income}\times\text{Total Units}\\\\=0.50\times60,000\\\\=\$30,000[/tex]
Learn more about income, refer to:
https://brainly.com/question/17961582
Schwering Corporation uses activity-based costing to assign overhead costs to products. Overhead costs have already been allocated to the company's three activity cost pools as follows: Machining, $68,000; Order Filling, $136,040; and Other, $61,400. Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data appear below:
MHs (Machining) Orders (Order Filling)
Product D7 11,220 3,040
Product U1 22,780 760
The activity rate for the Order Filling activity cost pool under activity-based costing is closest to:_______.
a. $35.80 per order.
b. $69.85 per order.
c. $9.40 per order.
d. $25.40 per order.
Top of Form
Schwering Corporation uses activity-based costing to assign overhead costs to products. Overhead costs have already been allocated to the company's three activity cost pools as follows: Machining, $81,600; Order Filling, $161,500; and Other, $68,200. Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data appear below:
MHs (Machining) Orders (Order Filling)
Product D7 13,200 4,000
Product U1 26,800 1,000
What is the overhead cost assigned to Product U1 under activity-based costing?
Bottom of Form
The controller of Hartis Corporation estimates the amount of materials handling overhead cost that should be allocated to the company's two products using the data that are given below:
Wall Mirrors Specialty Windows
Total expected units produced 7,700 1,450
Total expected material moves 770 1,350
Expected direct labor-hours per unit 14 7
The total materials handling cost for the year is expected to be $17,153.10.
If the materials handling cost is allocated on the basis of direct labor-hours, the total materials handling cost allocated to the wall mirrors is closest to:______.
a. $8,864.
b. $13,841.
c. $16,170.
d. $10,513.
Answer:
Instructions are below.
Explanation:
1)
Order Filling, $136,040
Orders (Order Filling)
Product D7 3,040
Product U1 760
To calculate the predetermined overhead rate, we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Order Filling= 136,040/3,800
Order Filling= $35.8 per order
2)
Overhead costs:
Machining, $81,600
Order Filling, $161,500
Activity data appear below:
MHs (Machining) Orders (Order Filling)
Product D7 13,200 4,000
Product U1 26,800 1,000
First, we need to calculate the activity rate for each activity:
Machining= 81,600/40,000= $2.04 per machine hour
Order Filling= 161,500/5,000= $32.3 per order
Now, we can allocate overhead to product U1:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Product U1= 2.04*26,800 + 32.3*1,000= $86,972
3)
Wall Mirrors Specialty Windows
Total expected units produced 7,700 1,450
Expected direct labor-hours per unit 14 7
The total materials handling cost for the year is expected to be $17,153.10.
Total direct labor hours, and predetermined overhead rate:
Total direct labor hours= 14*7,700 + 7*1,450= 117,950
Material Handling activity rate= 17,153.1/117,950= $0.145 per direct labor hour
Now, we allocate overhead:
Wall Mirrors= 0.15*107,800= $16,170
1. If Canace Company, with a break-even point at $283,200 of sales, has actual sales of $480,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales?
2. If the margin of safety for Canace Company was 40%, fixed costs were $1,725,600, and variable costs were 60% of sales, what was the amount of actual sales (dollars)?
Answer:
Instructions are below.
Explanation:
1) Canace Company:
break-even point= $283,200
Actual sales= $480,000
To calculate the margin of safety, we need to use the following formula:
Margin of safety= (current sales level - break-even point)
Margin of safety= 480,000 - 283,200= $196,800
Now, the margin of safety ratio:
Margin of safety ratio= (current sales level - break-even point)/current sales level
Margin of safety ratio= 196,800 / 480,000
Margin of safety ratio= 0.41
2)
Margin of safety ratio= 0.40
Fixed costs= $1,725,600
Variable costs were 60% of sales.
First, we need to calculate the contribution margin ratio:
contribution margin ratio= 1 - variable costs ratio
contribution margin ratio= 0.4
Now, we can calculate the break-even point in dollars:
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 1,725,600/0.4
Break-even point (dollars)= $4,314,000
Now, current sales:
Margin of safety ratio= (current sales level - break-even point)/current sales level
0.4 = (current sales level - 4,314,000) / current sales level
0.4current sales level = current sales level - 4,314,000
4,314,000 = 0.6current sales level
$7,190,000 = current sales level
A share of Lash Inc.'s common stock just paid a dividend of $2.10. If the expected long-run growth rate for this stock is 5%, and if investors' required rate of return is 18.5%, what is the stock price
Answer:
P0 = $16.333333333 rounded off to $16.33
Explanation:
Using the constant growth model of dividend discount model, we can calculate the price of the stock today. The DDM values a stock based on the present value of the expected future dividends from the stock. The formula for price today under this model is,
P0 = D0 * (1+g) / (r - g)
Where,
D0 * (1+g) is dividend expected for the next period g is the growth rate r is the required rate of return
P0 = 2.1 * (1+0.05) / (0.185 - 0.05)
P0 = $16.333333333 rounded off to $16.33
Which of the following are fixed costs in the federal budget
A) social security
B)medicare/medicaide
Answer:
Medicare
Explanation:
I think b because we can only get it free on very poor and undeveloped are but it cost high in developer area
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:
Answer:
Close to the cost of goods sold
Explanation:
Since in the question it is mentioned that the simply found that the overhead was underapplied by $2,500 that means the expected overhead is less than the actual one
So the same is to close to the cost of goods sold account i.e. expenses account
Therefore the simply should close the $2,500 of underapplied overhead to the cost of goods sold
[Same investments as the prior question] Suppose two local start-ups are raising funding by issuing shares of equity at $10,000 per share. One start-up is a whiskey distillery; the other is a beer brewery. You estimate the expected returns on your investment to be 50% over five years in both cases. You also believe that the likelihood of being paid out $20,000 per share is greater with the distillery than with the brewery. Suppose now that you hold a portfolio of many other risky assets, and that this would be your N 1 investment. Which investment do you prefer to make, the distillery or the brewery
Answer:
you should purchase the brewery's stock
Explanation:
First of all, as investors we should always try to maximize our returns while avoiding risks. It is really hard to balance both, but we must compare stocks to see which may represent a higher gain while posing the lesser or same risk.
Initial investment in each = $10,000 (equal for both)expected returns over 5 years = $5,000 (equal for both)but there is a higher possibility of the distillery's stock being more valuable, and that makes a difference.Both stocks seem equally risky, but they are not. When you calculate expected returns, you multiply the possible returns by their probability. I'm not sure how they calculated the expected returns of the above stocks, but the following can help you understand my point:
stock B return probability expected return
great 100% 25% 25%
normal 50% 50% 25%
bad 0% 25% 0%
total 100% 50%
stock D return probability expected return
great 100% 30% 30%
normal 50% 40% 20%
bad 0% 30% 0%
total 100% 50%
Both stocks have the same expected return, but stock B is less risky because the chance of being a bad investment is lower.
Consider the following information: Portfolio Expected Return Beta Risk-free 7 % 0 Market 12.2 1.0 A 11.0 1.6 a. Calculate the return predicted by CAPM for a portfolio with a beta of 1.6. (Round your answer to 2 decimal places.) b. What is the alpha of portfolio A. (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.) c. If the simple CAPM is valid, is the situation above possible?
Answer:
a. Return predicted by CAPM = 15.32%
b. Alpha of portfolio A = -0.4.32%
c. No, the situation above is not because CAPM is not valid.
Explanation:
Beofre answering the questions, the data given in the question which are merged together are represented as follows:
Portfolio Expected Return (%) Beta
Risk-free 7 0
Market 12.2 1.0
A 11.0 1.6
a. Calculate the return predicted by CAPM for a portfolio with a beta of 1.6. (Round your answer to 2 decimal places.)
This can be calculated using the following formula:
Return predicted by CAPM = Rf + beta * (Rm - Rf) ........... (1)
Where;
Rf = Risk-free Expected Return = 7% = 0.07
Rm = Market Expected Return = 12.2% = 0.122
beta = 1.6
Substituting the values into equation (1), we have:
Return predicted by CAPM = 0.07 + 1.6 * (0.122 - 0.07) = 0.1532, or 15.32%
b. What is the alpha of portfolio A. (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)
This can be calculated using the following formula:
Alpha of portfolio A = Portfolio A Expected Return - Return predicted by CAPM ................. (2)
Where;
Portfolio A Expected Return = 11.0%
Return predicted by CAPM = 15.32%
Substituting the values into equation (2), we have:
Alpha of portfolio A = 11.0% - 15.32% = -0.4.32%.
c. If the simple CAPM is valid, is the situation above possible?
No, the situation above is not because CAPM is not valid.
The reason is that when beta is equal to 1.6, the 11.0% expected return of stock A is less than the 12.2% expected market return, but what we should have had instead is an expected return of stock A that higher than the expected market return.
Castles in the Sand generates a rate of return of 20% on its investments and maintains a plowback ratio of 0.30. Its earnings this year will be $4 per share. Investors expect a 12% rate of return on the stock. Find the price of the stock. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Answer:
$46.67
Explanation:
Given the data from the question
We have
Earnings per share = $4
Growth rate = RoE * Plowback ratio
=> 20% * 0.30
=> Growth rate = 6%
Expected dividend per share(D1) = (1 - 30%) x $4 = $2.80
Current market price(Po) = D1/Ke - g
Current market price(Po) = $2.80 ÷ (0.12 - 0.06)
Po = $2.80 ÷ 0.06
Po = $46.67
Hence, in this case, the correct answer is $46.67 for the price of stock.
Starting from potential output, if firms become less optimistic about the future and decide to decrease their investment in new capital, then this will shift the ______ curve to the left and generate ______. Group of answer choices Aggregate demand; a recessionary output gap Aggregate supply; a recessionary output gap Aggregate demand; an expansionary output gap Aggregate supply; an expansionary output gap
Answer:
Option A (aggregate demand; a recessionary output gap) is the right choice.
Explanation:
The overall production volume again for desired items and products that form the gross national product. The amount of money supply, government expenditures, social spending, including private consumption seems to be the aggregate demand. As investment drops significantly, AD further decreases and therefore also sometimes shifts. Owing to the whole total performance would become less than that of productive capacity. So, this clearly shows a recessionary annual deficit.The other options offered are not relevant to the scenario presented. So, the solution above is the right one.
On April 30, one year before maturity, Middleton Company retired $200,000 of its 9% bonds payable at the current market price of 101 (101% of the bond face amount, or $200,000 1.01 3 5 $202,000). The bond book value on April 30 is $196,600, reflecting an unamortized discount of $3,400. Bond interest is currently fully paid and recorded up to the date of retirement. What is the gain or loss on retirement of these bonds
Answer:
Loss on retirement of these bonds = $5,400
Explanation:
Particulars Amount
Amount paid $202,000
Book value of bonds $196,600
Loss on retirement of bonds $5,400
However, this is not a real economic gain
If a company purchases equipment costing $4,500 on credit, the effect on the accounting equation would be: Multiple Choice Assets increase $4,500 and liabilities decrease $4,500. One asset increases $4,500 and another asset decreases $4,500. Equity decreases $4,500 and liabilities increase $4,500. Equity increases $4,500 and liabilities decrease $4,500. Assets increase $4,500 and liabilities increase $4,500.
Answer: Assets increase $4,500 and liabilities increase $4,500.
Explanation:
An asset are the properties which a business or an organization owns. An asset possess an economic value.
Since the equipment purchased is an asset, this will lead to an increase of assets by $4500 and since it was bought on credit and hasn't been paid for, liabilities will also increase by $4500.
Income generated by sales of foreign-produced goods in U.S. markets flows to foreign producers of these goods, and thus this income is subtracted from U.S. GDP.
a. True
b. False
Answer: True
Explanation:
Foreign produced goods being sold in the United States are considered to be Imports. Imports are a leakage to the GDP of a nation as they represent income which flows out of the economy to other countries.
For this reason this income is subtracted from US GDP.
Indeed the Expenditure method accounts for this by deducting it from US Exports.
5. The Market Place recently offered 5,000 shares of stock for sale via a Dutch auction. The firm received bids as follows: 500 shares at $22.50; 2,500 shares at $22.20; 3,300 shares at $22; and 5,500 shares at $21. Ignoring all costs, how much will the firm receive from this auction
Answer:
$110,000
Explanation:
No of Shares Price Total number of shares
500 22.50 500
2500 22.20 3000
3300 22.00 6800
5500 21.00 12300
In Dutch auction, share are allotted from highest no. of share to lowest at the price where all the shares are taken. So in this case, highest number of shares are asked by Bidder D which is 5500 shares (available 5000 shares). The bidder will be getting shares at $22 because this is the price when all the shares were taken.
Hence, the amount the firm will receive from this auction = 5,000 *22 = $110,000
A year after buying her car, Anita has been offered a job in Europe. Her car loan is for $27,000 at a 6% nominal interest rate for 48 months. If she can sell the car for $20,000, how much does she get to keep after paying off the loan
Answer:
Instead of keeping a balance she would rather need to pay the remaining mortgage balance of $843.51
Explanation:
The first task here is to compute the monthly payment of the car loan using the formula below:
PMT=P(r/n)/1-(1+r/n)^(-nt)
P=loan amount= $27,000
r=interest rate=6 %
n=number of monthly payments in a year=12
t= duration of loan=4 years ( 48/12)
PMT=27000*(6%/12)/(1-(1+6%/12)^(-4*12)
PMT=27000*(6%/12)/(1-(1+6%/12)^(-48)
PMT=27000*(6%/12)/(1-(1.005)^-48
PMT=135 /(1-0.787098411 )
PMT=634.10
The balance of the loan after one year is the present value of the remaining 36 monthly payments as computed thus:
PV=monthly payment*(1-(1+r)^-n/r
monthly payment=634.10
r=monthly interest rate=6%/12=0.5%
n=number of monthly payments left=36
PV=634.10*(1-(1+0.5%)^-36/0.5%
PV=634.10*(1-0.835644919 )/0.5%
pv=$20,843.51
balance left after paying the loan=$20,000-$20,843.51 =-$843.51
The 2017 Annual Report of Tootsie Roll Industries contains the following information. (in millions) December 31, 2017 December 31, 2016 Total assets $930.9 $920.1 Total liabilities 197.1 208.6 Net sales 515.7 517.4 Net income 80.7 67.2 Compute the following ratios for Tootsie Roll for 2017. (a) Asset turnover (Round answer to 3 decimal places, e.g. 0.851 times.) enter the asset turnover rounded to 4 decimal places times (b) Return on assets (Round answer to 2 decimal places, e.g. 4.87%.) enter the return on assets in percentages rounded to 2 decimal places % (c) Profit margin on sales (Round answer to 2 decimal places, e.g. 4.87%.) enter the profit margin on sales in percentages rounded to 3 decimal places %
Answer:
a. Asset turnover = Sales/Average total assets
Asset turnover= 515.7/[(930.9+920.1)/2]
Asset turnover = 515.7 / 925.5
Asset turnover = 0.5572123
Asset turnover = 0.557
b. Return on Assets = Net income/Average total assets
Return on Assets= 80.7/[(930.9+920.1)/2]
Return on Assets = 80.7 / 925.5
Return on Assets = 0.08719
Return on Assets= 8.72%
c. Profit Margin = Net income/Sales
Profit Margin = 80.7/515.7
Profit Margin = 15.65%
