Answer:
The firm's market value added is $500,000,000
Explanation:
According to the given data we have the following:
Stock market price per share= $ 45
No of shares= 20,000,000
Therefore, Market value of equity = MPS * no of shares
$45*20,000,000= $ 900,000,000
Invested capital or common equity = $400,000,000
Therefore, in order to calculate the firm's market value added we would have to make the following calculation:
Market value added = Market value of stock - invested capital
Market value added =$900,000,000 -$400,000,000
Market value added =$500,000,000
The firm's market value added is $500,000,000
Waterway Enterprises reported cost of goods sold for 2020 of $1,385,600 and retained earnings of $5,415,900 at December 31, 2020. Waterway later discovered that its ending inventories at December 31, 2019 and 2020, were overstated by $103,320 and $38,040, respectively. Determine the corrected amounts for 2020 cost of goods sold and December 31, 2020, retained earnings.
Answer:
b. Corrected 2020 cost of goods sold = $ 1,320,320.
b. Corrected retained earnings = $5,377,860.
Explanation:
a. Determine the corrected amounts for 2020 cost of goods sold
An overstatement of the beginning inventory has to be deducted from the reported cost of good sold since the amount of the overstatement was added to the cost of goods sold initially.
On the other hand, an overstatement of the ending inventory has to be added to the reported cost of good sold since the amount of the overstatement was deducted to the cost of goods sold initially.
Therefor, we have:
Corrected 2020 cost of goods sold = $1,385,600 - $103,320 + $38,040 = $ 1,320,320.
b. Determine the corrected amounts for December 31, 2020, retained earnings
In this case, the amount of overstatement of the ending inventory has to be deducted from the reported retained earning since the retained earning was initially overstated by that amount.
Therefore, we have:
Corrected retained earnings = $5,415,900 - $38,040 = $5,377,860
The Mazzanti Wholesale Food Company's fiscal year-end is June 30. The company issues quarterly financial statements requiring the company to prepare adjusting entries at the end of each quarter. Assume all quarterly adjusting entries were properly recorded. On December 1, 2020, the company paid its annual fire insurance premium of $9,200 for the year beginning December 1 and debited prepaid insurance. On August 31, 2020, the company borrowed $152,500 from a local bank. The note requires principal and interest at 8% to be paid on August 31, 2021. Mazzanti owns a warehouse that it rents to another company. On January 1, 2021, Mazzanti collected $30,400 representing rent for the 2021 calendar year and credited deferred rent revenue. Depreciation on the office building is $22,200 for the fiscal year. Employee salaries for the month of June 2021 $22,000 will be paid on July 20, 2021. Prepare the necessary year-end adjusting entries at the end of June 30, 2021, for the above situations. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
1.Dr Insurance expense 2,300
Cr Prepaid insurance 2,300
2.Dr Interest expense 3,050
Cr Interest payable 3,050
3.Dr Deferred rent revenue 7,600
Cr Rent revenue 7,600
4.Dr Depreciation expense 5,550
Accumulated
depreciation—building 5,550
5.Dr Salaries and wages expenses 22,000
Cr Salaries and wages payable 22,000
Explanation:
The Mazzanti Wholesale Food Company's Journal entries
1.
Dr Insurance expense 2,300
(9200×3/12 months)
Cr Prepaid insurance 2,300
2.
Dr Interest expense 3,050
(152,500×8%×3/12months )
Cr Interest payable 3,050
3.
Dr Deferred rent revenue 7,600
(30,400×3/12months)
Cr Rent revenue 7,600
4.
Dr Depreciation expense 5,550
(22,200×3/12 months)
Accumulated
depreciation—building 5,550
5.
Dr Salaries and wages expenses 22,000
Cr Salaries and wages payable 22,000
. Eric has another get-rich-quick idea, but needs funding to support it. He chooses an all-debt funding scenario. He will borrow $1 comma 823 from Wendy, who will charge him 4% on the loan. He will also borrow $1 comma 533 from Bebe, who will charge him 6% on the loan, and $644 from Shelly, who will charge him 12% on the loan. What is the weighted average cost of capital for Eric? What is the weighted average cost of capital for Eric?
Answer:
6.04%
Explanation:
The weighted average cost of capital (WACC) can be described as the average rate that is expected that a business will pay to finance its assets to all holders of its security.
The weighted average cost of capital (WACC) can be estimated as the summation of the products of the weight of each loan in the total loan and their interest rate for this question as follows:
Total loan amount = $1,823 + $1,533 + $644 = 4,000
Weight of loan from Wendy = $1,823 / $4,000 = 0.46, or 46%
Weight of loan from Bebe = $1,533 / $4,000 = 0.38, or 38%
Weight of loan from Shelly = $644 / $4,000 = 0.16, or 16%
Weighted average cost of capital = (46% * 4%) + (38% * 6%) + (16% * 12%) = 6.04%.
Therefore, the weighted average cost of capital for Eric is 6.04%.
Victory Company uses weighted-average process costing to account for its production costs.
Conversion costs are added evenly throughout the process.
Direct materials are added at the beginning of the process.
During November, the company transferred 800,000 units of product to finished goods.
At the end of November, the work in process inventory consists of 187,000 units that are 60% complete with respect to conversion.
Beginning inventory had $192,465 of direct materials and $159,635 of conversion cost.
The direct material cost added in November is $1,288,035 and the conversion cost added is $3,033,065.
Beginning work in process consisted of 74,000 units that were 100% complete with respect to direct materials and 80% complete with respect to conversion.
Of the units completed, 74,000 were from beginning work in process and 726,000 units were started and completed during the period.
Required:1. Determine the equivalent units of production with respect to direct labor and direct materials.2. Compute both the direct labor cost and the direct materials cost per equivalent unit. (Round "Cost per EUP" to 2 decimal places.)3. Compute both direct labor cost and direct materials cost assigned to units completed and transferred out and ending goods in process inventory. (Round "Cost per EUP" to 2 decimal places.)
Answer:
1. Direct Materials = 987,000 units , Direct Labor = 912,200 units
2.Direct Materials = $1.50 , Direct Labor = $3.50
3.
Units Completed and Transferred Costs
Direct Materials = $ 1,200,000
Direct Labor = $ 2,800,000
Ending goods in process inventory cost
Direct Materials = $ 280,500
Direct Labor = $ 392,700
Explanation:
First step is to determine the equivalent units of production with respect to direct labor and direct materials
Direct Materials
Note : Materials are added at beginning of the process hence, they are 100 % complete for both units categories
Units Completed and Transferred (800,000 × 100%) = 800,000
Units of Ending Work In Process (187,000 × 100%) = 187,000
Equivalent units of production = 987,000
Direct Labor
Note : Conversion costs are added evenly throughout the process, hence we need to establish units to the extent of work done.
Units Completed and Transferred (800,000 × 100%) = 800,000
Units of Ending Work In Process (187,000 × 60%) = 112,200
Equivalent units of production = 912,200
The next step is to Calculate the Total Cost of Production with respect to direct labor and direct materials incurred during the period.
Direct Materials
Cost in Opening Work In Process = $192,465
Cost added during the period = $1,288,035
Total Costs = $1,480,500
Conversion
Cost in Opening Work In Process = $159,635
Cost added during the period = $3,033,065
Total Costs = $3,192,700
Then use the above data to calculate the cost per equivalent unit for direct labor and direct materials.
Cost per equivalent unit. = Total Cost / Total Equivalent units
Direct Materials = $1,480,500 / 987,000 = $1.50
Direct Labor = $3,192,700 / 912,200 = $3.50
CONCLUSION :
Units Completed and Transferred Costs
Direct Materials = (800,000 × $1.50) = $ 1,200,000
Direct Labor = (800,000 × $3.50) = $ 2,800,000
Ending goods in process inventory cost
Direct Materials = (187,000 × $1.50) = $ 280,500
Direct Labor = (112,200 × $3.50) = $ 392,700
Assume there are 1000 homes in a flood zone in an area in which sea levels are rising. An additional 1000 homes are above the flood zone and at less risk. A levee could be built to prevent the rise in sea level from affecting the homes. It is worth $20,000 per home in the flood zone to have the levee built. It is worth $5,000 per home not in the flood zone to have the levee built. The levee costs $22,000,000 to build. Which of these makes the most economic sense?
A. The government should leave this to the free market.
B. The free market will have difficulty building the levee because the levee is non-rival and non-excludable. So the government may have to intervene and force homeowners to pay through taxes to fund the levee as the benefits exceed the costs.
C. The free market will have difficulty building the levee because the levee is non-rival and non-excludable. However the benefits do not exceed the costs anyway so there is no need for the government to intervene.
D. The free market will have some difficulty building the levee because the levee is non-rival. However it is excludable. So there is only a partial argument for government intervention here.
Answer: The free market will have difficulty building the levee because the levee is non-rival and non-excludable. So the government may have to intervene and force homeowners to pay through taxes to fund the levee as the benefits exceed the costs.
Explanation:
From the question, we are informed that if there are 1000 homes in a flood zone in an area whereby the sea levels are rising and there's an additional 1000 homes that are above the flood zone and are at less risk. Since the levee costs $22,000,000 to build, the best thing to do economic sense will be that the free market will have difficulty building the levee because the levee is non-rival and non-excludable.
It should be noted that in a free market, decisions are made by individuals through price signals and forces of demand and supply. Therefore since this is a public good as it is non rival and non excludeable, there will be need for the intervention of the government in order to collect taxes from the homeowners.
Answer:b
Explanation: I did this
Mcleod, Inc. incurred fixed costs of $ 400 comma 000. Total costs, both fixed and variable, are $ 450 comma 000 when 59 comma 000 units are produced. It sold 30 comma 000 units during the year. Calculate the variable cost per unit. (Round your answer to the nearest cent.)
Answer:
Unitary variable cost= $1.72
Explanation:
Giving the following information:
Mcleod, Inc. incurred fixed costs of $400,000.
Total costs= $450,000
Units produced= 59,000
First, we need to calculate the total variable cost:
Total variable cost= total cost - total fixed cost
Total variable cost= 450,000 - 400,000
Total variable cost= 50,000
Now, the unitary variable cost:
unitary variable cost= 50,000/29,000
unitary variable cost= $1.72
According to the Coase theorem, private parties can negotiate to an efficient solution in the presence of externalities if the is (are) relatively low.Suppose Jeremy, Francis, and Andrew are part of Mu Epsilon Nu, a college fraternity known for its very loud, rambunctious weekend parties. The parties annoy many of the residents in nearby apartment complexes due to the loud music and blaring neon lights. This is a(n)example:________
a.external cost
b. positive externality
c. neither
In each of the following cases, what is the effect on the short-run aggregate supply (SRAS) curve? An increase in firm costs A. does not shift the SRAS curve. B. shifts the SRAS curve upward. C. shifts the SRAS curve downward. An increase in the money supply A. does not shift the SRAS curve. B. shifts the SRAS curve downward. C. shifts the SRAS curve upward. An increase in consumption A. shifts the SRAS curve upward. B. does not shift the SRAS curve. C. shifts the SRAS curve downward.
Answer: 1. B. shifts the SRAS curve upward.
2. A. does not shift the SRAS curve.
3. B. does not shift the SRAS curve.
Explanation:
1. When Firm costs rise, the input cost for Producers rises and they respond by reducing production so as to reduce the cost of production. This reduction causes a reduction in Supply that forces the short-run aggregate supply (SRAS) curve to shift left (upward).
2. This change in the Money Supply means that there will be more money for households to spend. This increases demand but does not have any direct influence on the short-run aggregate supply (SRAS) curve.
3. An Increase in consumption means that there is greater demand for goods and services in an Economy. Indirectly this will cause producers to ramp up production to meet these needs but directly, there is no influence on the short-run aggregate supply (SRAS) curve.
On September 1, 2021, Daylight Donuts signed a $188,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on March 1, 2022. Daylight Donuts should report interest payable at December 31, 2021, in the amount of: (Do not round your intermediate calculations.)
Answer:$3,760--- Interest payable at December 31, 2021.
Explanation:
Interest payable is current liability recorded on a firm's balance sheet that shows the amount of interest which a firm owes currently but has not yet paid as of the date recorded on the of the balance sheet.
For daylight donuts
September --- December = 4 months
interest payable within the four months= $188,000 X 6% X 4/12= $3,760
Daylight Donuts should report interest payable at December 31, 2021, in the amount of $3,760
Gearty and Olinto organized The Worthington Corp., which issued voting common stock with a fair market value of $240,000. They each transferred property in exchange for stock as follows
Property Adjusted Basis Fair Market Value Percentage of The Worthington Corp. Stock Acquired
Gearty Building $80,000 $164,000 60%
Olinto Land 10,000 96,000 40%
The building was subject to a $20,000 mortgage that was assumed by The Worthington Corp. What was The Worthington Corp.'s basis in the building?
Answer:
$80,000
Explanation:
Since Worthington Corp. assumed the the $20,000 mortgage which the building was subject to, the Worthington Corp.'s basis in the building is the adjusted basis of the building.
Therefore, Worthington Corp.'s basis in the building is $80,000 which is the adjusted basis of the building.
Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent month for the two games appears below: Claimjumper Makeover Total Sales $ 116,000 $ 58,000 $ 174,000 Variable expenses 35,800 7,700 43,500 Contribution margin $ 80,200 $ 50,300 130,500 Fixed expenses 83,250 Net operating income $ 47,250 Required: 1. What is the overall contribution margin (CM) ratio for the company? 2. What is the company's overall break-even point in dollar sales? 3. Prepare a contribution format income statement at the company's break-even point that shows the appropriate levels of sales for the two products.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Claimjumper Makeover
Total Sales:
Claimjumper= $116,000
Makeover= $58,000
Total= $174,000
Variable expenses:
Claimjumper= $35,800
Makeover= $7,700
Total= $43,500
Contribution margin:
Claimjumper= $80,200
Makeover= $50,300
Total= $130,500
Fixed expenses 83,250
Sales proportion:
Claimjumper= 116,000/174,000= 0.67
Makeover= 58,000/174,000= 0.33
Variable cost proportion:
Claimjumper= 35,800/43,500= 0.82
Makeover= 7,700/43,500= 0.18
First, we need to calculate the contribution margin ratio for the company:
Weighted average contribution margin ratio= (weighted average selling price - weighted average unitary variable cost)/ weighted average selling price
Weighted average contribution margin ratio= 130,500/174,000
Weighted average contribution margin ratio= 0.75
Now, we can calculate the break-even point in dollars:
Break-even point (dollars)= fixed costs/ Weighted average contribution margin ratio
Break-even point (dollars)= 83,250/0.75
Break-even point (dollars)= $111,000
Finally, we structure the income statement:
Sales= 111,000
Total variable costs= (111,000*0.25)= (27,750)
Income statement:
Sales:
Claimjumper= 111,000*0.67= 74,370
Makeover= 111,000*0.33= 36,630
Variable costs:
Claimjumper= 27,750*0.82= (22,755)
Makeover= 27,750*0.18= (4,995)
Contribution margin= 83,250
Fixed costs= 83,250
Net operating income= 0
The following revenue and expense account balances were taken from the ledger of Wholistic Health Services Co. after the accounts had been adjusted on February 28, 2019, the end of the fiscal year:
Depreciation Expense $9,000 Service Revenue $270,900
Insurance Expense 4,000 Supplies Expense 3,000
Miscellaneous Expense 6,000 Utilities Expense 1,760
Rent Expense 4,200 Wages Expense 213,000
Prepare an income statement.
Answer:
Wholistic Health Services Co.
Income Statement for the year end February 28, 2019
Service Revenue $270,900
Less: Supplies Expense $3,000
Gross Income $267,900
Less operating Expenses:
Insurance Expense $4,000
Depreciation Expense $9,000
Miscellaneous Expense $6,000
Utilities Expense $1,760
Rent Expense $4,200
Wages Expense $213,000
$237,960
Net Income $29,940
Explanation:
Income statement shows the performance of the company in a year. It provides the details of revenue, expenses and profits for the year. All the expenses are deducted from the revenue to determine the net earning of the business.
On January 1, Year 1, Li Company purchased an asset that cost $35,000. The asset had an expected useful life of five years and an estimated salvage value of $7,000. Li uses the straight-line method for the recognition of depreciation expense. At the beginning of the fourth year, the company revised its estimated salvage value to $3,500. What is the amount of depreciation expense to be recognized during Year 4
Answer:
The amount of depreciation expense to be recognized during Year 4 is $7,350
Explanation:
In order to calculate the amount of depreciation expense to be recognized during Year 4 we would have to calculate first the Depreciation as per straight line method as follows:
Depreciation as per straight line method=(Cost-Residual value)/Useful life
=($35,000-$7,000)/5=$5,600
Hence, book value as on beginning of the fourth year=$35,000-($5,600*3)=$18,200
Hence, depreciation revised for the 2 remaining years=($18,200-$3,500)/2
=$7,350
The amount of depreciation expense to be recognized during Year 4 is $7,350
Alyeska Services Company, a division of a major oil company, provides various services to the operators of the North Slope oil field in Alaska. Data concerning the most recent year appear below:
Sales $17,600,000
Net operating income $6,200,000
Average operating assets $36,000,000
Required:
a. Compute the margin for Alyeska Services Company.
b. Compute the turnover for Alyeska Services Company.
c. Compute the return on investment (ROI) for Alyeska Services Company.
Answer:
a. The margin for Alyeska Services Company: 35.23%
b. The turnover for Alyeska Services Company: 0.49
c. The return on investment (ROI) for Alyeska Services Company: 17.22%
Explanation:
a. The profit margin reflects a company's overall ability to turn income into profit, is calculated by formula:
Profit margin = (Net operating income/Net sales ) x 100% = $6,200,000/$17,600,000 x 100% = 35.23%
b. Asset turnover helps investors understand how effectively companies are using their assets to generate sales. Asset turnover is calculated by using following formula:
Asset Turnover = Total Sales/ Average Total Assets = $17,600,000/$36,000,000 = 0.49
c. Return on investment (ROI) is calculated by using following formula:
ROI = Net income/Total investment x 100%
In Alyeska Services Company,
ROI = Net operating income/Average operating assets x 100% = $6,200,000/$36,000,000 x 100% = 17.22%
Someone is retiring next year.What would be an appropriate amount of risk to take with their investments?
A local radio commercial costs $600 and reaches an estimated 10,250 listeners. A local cable commercial costs $1000 and reaches an estimated 18,500 viewers. Which medium provides the lowest CPM?
a. The radio commercial
b. The cable commercial
c. The radio and cable commercials have the same CPM
d. The CPM cannot be calculated given the limited information provided
e. None of the above
Answer:
b. The cable commercial
Explanation:
CPM or cost per mille is a measure used in advertising to determine how effectively a promotional message is getting to its audience. It is the cost of getting an advert in front of 1,000 people.
In this scenario when we calculate CPM for the radio station
$600 = 10,250 listeners
x= 1,000 listeners
Cross multiply
x= (600 * 1,000) ÷ 10,250 = $58.54
For the local cable commercial
$1000 = 18,500 viewers
y = 1,000 viewers
Cross multiply
y= (1,000 * 1,000) ÷ 18,500= $54.05
Insect control devices must and be able to retain the electrocuted insects inside the device
Answer:
Be rated for safety by the USDA
Explanation:
Presence of insect pest around areas of food production poses a lot of risk such as contamination of food which might impact negatively on public health. However, in an attempt to control these insect pests, the problem of food contamination as a result of insect infestation that we're trying to solve might still be increased if safety measures are not strictly adhered to when manufacturing and using insect control devices.
Hence, it is necessary and of utmost importance that insect control devices must be rated for safety by USDA to ensure compliance with laid down measures and protocols for safe control of insect without contamination of food.
The objectives of labor unions have Multiple Choice always placed the greatest emphasis on increasing wages and benefits. shifted with social and economic conditions. frequently taken global competition into account. consistently favored policies that would move the U.S. economy toward a command system.
lyssa and Crystal are roommates. They spend most of their time studying (of course), but they leave some time for their favorite activities: making pizza and brewing root beer. Alyssa takes 3 hours to brew a gallon of root beer and 2 hours to make a pizza. Crystal takes 7 hours to brew a gallon of root beer and 5 hours to make a pizza. Alyssa's opportunity cost of brewing a gallon of root beer is__________ , and Crystal's opportunity cost of brewing a gallon of root beer is__________ , has an absolute advantage in brewing root beer, and has a comparative advantage in brewing root beer. If Alyssa and Crystal trade foods with each other, will trade away pizza in exchange for root beer. The price of pizza can be expressed in terms of gallons of root beer. The highest price at which pizza can be traded that would make both roommates better off is of root beer, and the lowest price that makes both roommates better off is of root beer per pizza.
Answer:
a. 1.5 pizza
b. 1.39 pizza
c. Alyssa has an absolute advantage in brewing beer
d. Crystal has a comparative advantage in brewing beer
e. Crystal will easily trade away pizza for root beer
f. there's no limit to the highest price
g. lowest price is 0.719 beer root/pizza
Explanation:
Alyssa takes 3 hrs to brew a gallon of root beers and 2 hrs to make a pizza
Crystal takes 7 hrs to brew a gallon of root beer and 5 hrs to make a pizza
Alyssa make 1 gallon/3 hrs = 0.33 gallons/hr of beer, and the same way makes 0.5 pizza/hr
Crystal makes 0.143 gallon/hr of beer, and 0.2 pizza/hr
for Alyssa, 0.33 gallons/hr = 0.5 pizza/hr, therefore
1 gallon of beer = 0.5/0.33 = 1.51 pizza
for crystal, 1 gallon of beer = 0.2/0.143 = 1.39 pizza
price of pizza:
Alyssa = 0.662 root beer/pizza
Crystal = 0.719 root beer/pizza
Epiphany Industries is considering a new capital budgeting project that will last for three years. Epiphany plans on using a cost of capital of 12% to evaluate this project. Based on extensive research, it has prepared the following incremental cash flow projects:
Year 0 1 2 3
Sales (Revenues) 100,000 100,000 100,000
- Cost of Goods Sold (50% of Sales) 50,000 50,000 50,000
- Depreciation 30,000 30,000 30,000
= EBIT 20,000 20,000 20,000
- Taxes (35%) 7000 7000 7000
= unlevered net income 13,000 13,000 13,000
+ Depreciation 30,000 30,000 30,000
- capital expenditures -90,000
1. The free cash flow for the first year of Epiphany's project is closest to:________
A. $43,000
B. $25,000
C. $13,000
D. $45,000
2. The NPV for Epiphany's Project is closest to:_______
A. $4,800
B. $39,000
C. $13,300
D. $20,400
Answer:
FCF years 1 is $43,000
NPV is $13,300
Explanation:
The free cash flow for the first year=net income+depreciation-Capital exp
net income is $13,000
depreciation is $30,000
capital exp for the first year is nil
the free cash flow=$13,000+$30,000+$0=$43,000
FCF year zero=-$90,000
the FCF for year1 applies to years 2 and 3 as well
NPV=-$90,000+$43,000/(1+12%)^1+$43,000/(1+12%)^2+$43,000/(1+12%)^3=
$13,278.74
The closest option is $13,300
Presented below is information related to Marin Company. Cost Retail Beginning inventory $103,820 $278,000 Purchases 1,402,000 2,152,000 Markups 93,600 Markup cancellations 13,900 Markdowns 34,600 Markdown cancellations 5,000 Sales revenue 2,206,000 Compute the inventory by the conventional retail inventory method.
Answer:
The ending inventory for Marin comapny is $1664460
Explanation:
Solution
An Inventory is computed by using the conventional retail inventory method. which is statted belwo:
Inventory computed for Marin Company
Cost Retail
Beginning of Inventory $103,820 $278,000
Purchases 1,402,000 2,152,000
Total 1505820 243,000
Add: Net Markups
Markups 93,600
Markup cancellations -13,900
79700
Total 1505820 2509700
Deduct: Net Markdown
Markdown 34,600
Markdown cancellation -5,000
29,600
Sales price of goods 2480100
Sales revenue 2,206,000
The retail ending is 274,100
Thus,
The retail cost ratio is = 1505820 /2509700 = 60%
Hence, the cost of Ending inventory becomes = 274,100 * 60%
= $1664460.
The Ramapo Company produces two products, Blinks and Dinks. They are manufactured in two departments, Fabrication and Assembly. Data for the products and departments are listed below. Product Number of units Labor hrs per unit Machine hours per unit Blinks 1,000 4 5 Dinks 2,000 2 8 All of the machine hours take place in the Fabrication department, which has an estimated overhead of $84,000. All of the labor hours take place in the Assembly department, which has an estimated total overhead of $72,000. The Ramapo Company uses a single overhead rate to apply all overhead costs based on labor hours. What is the Single Plantwide Factory Overhead Rate for Blinks? Group of answer choices $19.50 $37.45 $78.00 $56.00
Answer:
Single Overhead Absorption rate = $19.5 per hour
Explanation:
Overhead absorption rate = Estimate overhead /Estimated labor hours
Estimated overhead = $84,000 + $72,000= 156 000
Estimated labour hours= ( 1000×4) + (2000× 2)=8,000 hours
Overhead absorption rate = 156,000/8,000 hours =$19.5 per hour
Single Overhead Absorption rate = $19.5 per hour
A 5-year corporate bond yields 10.70%. A 5-year municipal bond of equal risk yields 6.50%. Assume that the state tax rate is zero. At what federal tax rate are you indifferent between the two bonds? (Round your final answer to two decimal places.)
Answer:
The multiple choices are as follows:
a.
25.40%
b.
29.03%
c.
39.25%
d.
33.98%
e.
27.38%
The correct option is C,39.25% federal tax rate
Explanation:
In determining the federal tax that one would be indifferent in choosing between the two bonds, we equate the yield of the two bonds as follows with tax element being deducted from corporate bond yield:
6.50%=10.70%*(1-t)
The t is the tax rate which is the unknown
divide both sides by 10.70%
6.50%/10.70%=1-t
0.607476636 =1-t
t=1-0.607476636
t=0.392523364 =39.25%
"The Price King Auto Mall pays their sales staff by commission. They are paid a percent of the profit the dealership makes on each sold car. If the profit is $900 or less, the commission rate is 18%. If the profit is great than $900 and less than or equal to $1,500, the commission rate is 20% of the profit. If the profit is higher than $1,500, the rate is 25% of the profit. Jared sold a car that made a profit of $2500. What is the amount of commission he will receive
Answer:
$625
Explanation:
He made a profit of $2500 which is greater than $1500, so he would earn a 25% commmision
25% of $2500 = $625
I hope my answer helps you
Break-Even Sales Currently, the unit selling price of a product is $280, the unit variable cost is $230, and the total fixed costs are $560,000. A proposal is being evaluated to increase the unit selling price to $310. a. Compute the current break-even sales (units). units b. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased and all costs remain constant. units
Answer:
a.
Break even in units sales = 11200 units
b.
Break even in units sales = 7000 units
Explanation:
Break even sales in units is the number of units needed to be sold in order for the company to reach a point where it covers all of its total cost with its total revenue and break evens. It is a point of no profit and no loss and the total revenue is equal to the total costs.
The formula to calculate break even in units is,
Break even in units = Fixed cost / Contribution margin per unit
Where, contribution margin per unit = Selling price per unit - Variable cost per unit
a.
Break even in units = 560000 / (280 - 230)
Break even in units = 11200 units
b.
Anticipated Break even in units = 560000 / (310 - 230)
Anticipated Break even in units = 7000 units
Identifying Cost Drivers in an ABC system
Patterson makes electronic components for handheld games and has identified several activities as components of manufacturing overhead: factory rent, factory utilities, quality inspections, materials handling, machine setup, employee training, machine maintenance, inventory security costs, and supervisor salaries. For each activity that Patterson has identified, choose a cost driver to allocate that cost. Explain your reasoning.
Answer:
Factory Rent : No of days worked
Factory Utilities: Units of utility consumed
Quality Inspection : Hours of inspection on production run
Material Handling : No of orders received
Machine Setup : Machine hours
Employee Training : Hours worked
Machine Maintenance : Machine hours used
Inventory Security Costs : Finished goods units
Supervisor Salary : No of workers
Explanation:
A cost driver is unit of activity on which cost is allocated. Cost driver is considered as a direct cause of the cost. In ABC costing cost are allocated to the goods based on the cost drivers.
Rick is planning to invest the following amounts at 7 percent: $254 at the end of year 1, $412 at the end of year 2, and $1,230 at the end of year 3. How much money will he have saved at the end of year 3
Answer:
$1,961.65
Explanation:
The formula for finding future value :
FV = P (1+r)^n
P = Present value
R = interest rate
N = number of years
First step is to find the present value of the cash flows.
PV can be found using a financial calculator
Cash flow in year 1 = $254
Cash flow in year 2 = $412
Cash flow in year 3 = $1,230
I = 7%
Present value = $1,601.29
I would now input the value of p in the FV formula
$1,601.29 ( 1 + 0.07) ^3 = $1,961.65
To find the PV using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Within the relevant range, the variable cost per unit: remains constant as activity changes. increases as activity increases. decreases as activity increases. can increase or decrease as the activity changes.
Answer:
remains constant as activity changes.
Explanation:
The Variable Cost per unit is the actual production cost that is incurred in order to produce each unit that is affected by changes in the company's output or activity level. Within the relevant range, the variable cost per unit remains constant as activity changes, even though the total dollar amount varies in accordance to the various changes in the company's activity, the variable cost will stay constant on a per unit basis.
Writers should use words carefully and construct sentences skillfully to emphasize main ideas and de-emphasize minor ideas. Choose the best response. Which of the following labels the main idea for the reader?
a. Janes needs to proofread the proposal and changes need to be made
b. First, please make the changes to the second section of the proposal changes, and then have Jane proofread the entire proposal.
Answer:
Option b is correct.
Explanation:
The statement in option ''b" is the correct option for laying emphasis on the main idea and de-emphasizing the minor ideas, that is;
"First, please make the changes to the second section of the proposal changes, and then have Jane proofread the entire proposal."
The above statement is a detailed one and shows the step by step instructions or requirements;
1." First, please make the changes to the SECOND SECTION of the proposal changes.''
The SECOND SECTION the writer mentioned lay emphasis on the second section of the proposal CHANGES AND NOT THE WHOLE.
2. "and then have Jane proofread the ENTIRE proposal"
The writer wants Jane to do the PROOFREADING of the ENTIRE proposal.
A bond with a 7-year duration is worth $1,079, and its yield to maturity is 7.9%. If the yield to maturity falls to 7.75%, you would predict that the new value of the bond will be approximately:_____________.
Answer:
$1,087.27
Explanation:
The new value of the bond is the new price of the bond calculated using yield to maturity of 7.75% instead of the original yield of 7.9% using excel pv formula provided thus:
=-pv(rate,nper,pmt,fv)
Before that we need to determine the pmt which is the annual coupon on the bond.
=pmt(rate,nper,-pv,fv)
rate is the original yield ot 7.9%
nper is the duration of 7 years
pv is the initial market price of $1,079
fv is the face value of $1000
=pmt(7.9%,7,-1079,1000)=$ 94.12
The new price is computed thus:
=-pv(7.75%,7,94.12,1000)=$1,087.27
