Answer:
Business; competitors; secret; readily available; difficult; reasonable efforts.
Explanation:
A trade secret is a formula, device, process, method, or compilation of information that, when used in business, gives the owner an advantage over competitors who do not know the secret information.
In addition to considering the competitive advantage, a court will consider whether the information was, readily available and difficult (and/or expensive) to obtain, when determining whether something is a trade secret. Another important consideration is whether the company made reasonable efforts to protect it.
For example, the recipe and ingredients used in the manufacturing of popular soft drinks and alcoholic beverages is a trade secret that isn't known to many people around the world.
Parent Co. purchased the entire business of Subsidiary Co. including all its assets and liabilities for $600,000. Below is information related to the two companies: Parent Subsidiary Fair value of assets $1,050,000 $800,000 Fair value of liabilities 575,000 300,000 Reported assets 800,000 650,000 Reported liabilities 500,000 250,000 Net Income for the year 60,000 50,000 How much goodwill did Parent pay for acquiring Subsidiary
Answer:
$100,000
Explanation:
Calculation of Net amount payable:
Net Amount Payable = Fair Value of asset - Fair Value of liabilities = $800,000 - $300,000 = $500,000
Calculation of Goodwill that Parent pays to Subsidiary:
Goodwill = Actually paid amount - Net amount payable = $600,000 - $500,000 = $100,000
The Production Department planned to work 8,000 labor-hours in March; however, it actually worked 8,400 labor-hours during the month. Its actual costs incurred in March are listed below: Actual Cost Incurred in March Direct labor $ 134,730 Indirect labor $ 19,860 Utilities $ 14,570 Supplies $ 4,980 Equipment depreciation $ 54,080 Factory rent $ 8,700 Property taxes $ 2,100 Factory administration $ 26,470 Required: 1. Prepare the Production Department’s planning budget for the month. 2. Prepare the Production Department’s flexible budget for the month. 3. Prepare the Production Department’s flexible budget performance report for March, including both the spending and activity variances.
Answer:
The company had budgeted for an activity level of 8,000 labor-hours in March. Prepare the Production Department's planning budget for the month. Requirement #2. The company actually worked 8,500 labor-hours in March. Prepare the Production Department's flexible budget for the month
Explanation:
Ronnie operates a lawn-care service. On each day, the cost of mowing the first lawn is $15, the cost of mowing the second lawn is $25, and the cost of mowing the third lawn is $40. His producer surplus on the first three lawns of the day is $100. If Ronnie charges all customers the same price for lawn mowing, that price is a. $20. b. $60. c. $80. d. $180.
Answer:
b. $60
Explanation:
Produced surplus = Price producer is able to sell - Price producer would be willing to sell
Price the producer is able to sell = Producer surplus + Price producer would be willing to sell
= $100 + ($15 + $25 + $40)
= $180 for 3 lawn
Therefore, if Ronnie charges are customers the same price for lawn mowing, that price is
= $180 / 3
= $60
What does the relationship between the unemployment rate and the natural unemployment rate tell us about cyclical unemployment?
When the unemployment rate is
than the natural unemployment rate, cyclical unemployment is
A. less; positive
B. greater, negative
C. less; negative
D. greater; is increasing
Answer:
C. less; negative
Explanation:
The unemployment rate=natural unemployment rate+cyclical unemployment rate
if The unemployment rate<natural unemployment rate then the cycalical rate of unemployment is negative.
Which of the following statements is CORRECT? a. More of Project A's cash flows occur in the later years. b. We must have information on the cost of capital in order to determine which project has the larger early cash flows. c. The crossover rate, i.e., the rate at which Projects A and B have the same NPV, is greater than either project's IRR. d. The NPV profile graph is inconsistent with the statement made in the problem. e. More of Project B's cash flows occur in the later years.
Answer: a. More of Project A's cash flows occur in the later years.
Explanation:
When a project has its cashflows occurring in later years, the NPV will be less because the discount rate would have a greater period to discount it in as opposed to cashflows that occur more recently which would receive less discounting from the discount rate.
As a result of Project A having more distant cashflows, the discount rate discounted its cash flows more which is why higher rates led to its NPV being zero because those higher rates got to discount it over a longer period.
A bank has excess reserves of $5,000 and demand deposits of $50,000; the required reserve ratio is 20 percent. If the reserve ratio is raised to 25 percent, then this bank can lend a maximum of Multiple choice question. A) $1,000. B) $1,500. C) $2,000. D) $2,500.
If the reserve ratio is raised to 25 percent, then this bank can lend a maximum of $2,500. Option (d) is correct.
What do you mean by Ratio?When two objects are related using numbers or amounts, the relationship is known as a ratio.
Money stored in demand accounts at commercial banks is known as demand deposits or checkbook money. These account balances are typically regarded as money and make up the majority of a nation's strictly defined money supply. Simply explained, these are bank deposits that can be withdrawn immediately and without warning.
Demand deposits are typically regarded as a component of the strictly defined money supply since they can be used to pay for goods and services and to repay debts via checks and drafts. Demand deposits and currency are typically included in definitions of a nation's money supply. Demand deposits make up the majority of the money supply in the majority of nations.
Therefore, Option (d) is correct. If the reserve ratio is raised to 25 percent, then this bank can lend a maximum of $2,500.
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Acquired $34,500 cash from the issue of common stock. Purchased inventory for $27,600 cash. Sold inventory costing $15,400 for $31,000 cash. Required a. Record the events in general journal format. b. Post the entries to T-accounts. c. Determine the amount of gross margin. d. What is the amount of net cash flow from operating activities for Year 1
Answer:
a. General Journal Format:
Accounts Titles Debit Credit
Cash $34,500
Common stock $34,500
To record the issue of common stock for cash.
Inventory $27,600
Cash $27,600
To record the purchase of inventory for cash.
Cash $31,000
Sales revenue $31,000
To record the sale of goods for cash.
Cost of goods sold $15,400
Inventory $15,400
To record the cost of goods sold.
b. T-accounts:
Cash
Accounts Titles Debit Credit
Common stock $34,500
Inventory $27,600
Sales revenue 31,000
Common stock
Accounts Titles Debit Credit
Cash $34,500
Inventory
Accounts Titles Debit Credit
Cash $27,600
Cost of goods sold $15,400
Sales revenue
Accounts Titles Debit Credit
Cash $31,000
Cost of goods sold
Accounts Titles Debit Credit
Inventory $15,400
c. Gross margin:
Sales revenue $31,000
Cost of goods sold 15,400
Gross margin $15,700
d. Net Cash Flow from operating activities for Year 1:
Cash from customers $31,000
Cash paid to suppliers (27,500)
Net cash flow from
operating activities $3,500
Explanation:
a) Data and Analysis of Transactions:
Cash $34,500 Common stock $34,500
Inventory $27,600 Cash $27,600
Cost of goods sold $15,400 Inventory $15,400
Cash $31,000 Sales revenue $31,000
Assume that a state government currently provides no child-care subsidies to working single parents, but it now wants to adopt a plan that will encourage labor force participation among single parents. Suppose that child-care costs are hourly, and suppose the government adopts a child-care subsidy that pays $3 per hour for each hour the parent works, up to 8 hours per day. Draw a current budget constraint (net of child-care costs) for an assumed single mother and then draw in the new constraint. Discuss the likely effects on labor force participation and hours of work.
Answer:
The line on the graph will be parallel to the pre-subsidy line and the new constraint will then be equal to the points connecting the two lines.
Explanation:
The subsidy by government to single parents is $3 per hour for up to 8 hours. The total of subsidy will be $16 for each day. The labor force who were not receiving the subsidy before had steep indifference curve but now few workers will find utility maximization with flatter indifference curve so the workers will join the subsidy program.
Michelle operates several food trucks. Indicate the amount (if any) that she can deduct as an ordinary and necessary business deduction in each of the following situations.
a. Michelle moves her food truck between various locations on a daily rotation. Last week, Michelle was stopped for speeding. She paid a fine of $215 for speeding plus $170 for legal advice in connection with the ticket.
b. Michelle paid $865 to reserve a parking place for her food truck for the fall football season outside the local football arena. Michelle also paid $210 for tickets to a game for her children.
c. Michelle provided a candidate with free advertising painted on her truck during the candidate's campaign for city council. Michelle paid $960 to have the ad prepared and an additional $660 to have the ad removed from the truck after the candidate lost the election.
Answer:
a. Michelle moves her food truck between various locations on a daily rotation. Last week, Michelle was stopped for speeding. She paid a fine of $215 for speeding plus $170 for legal advice in connection with the ticket.
Speeding tickets and fines cannot be deducted as business expenses. But Michelle can deduct all legal expenses.
b. Michelle paid $865 to reserve a parking place for her food truck for the fall football season outside the local football arena. Michelle also paid $210 for tickets to a game for her children.
Michelle can deduct the $865 paid for the space outside the football field, but she cannot deduct the tickets (personal expenses).
c. Michelle provided a candidate with free advertising painted on her truck during the candidate's campaign for city council. Michelle paid $960 to have the ad prepared and an additional $660 to have the ad removed from the truck after the candidate lost the election.
Political donations are not deductible as business expenses.Marigold Company sells one product. Presented below is information for January for Marigold Company.
Jan. 1 Inventory 104 units at $5 each
4 Sale 79 units at $8 each
11 Purchase 145 units at $6 each
13 Sale 115 units at $9 each
20 Purchase 162 units at $6 each
27 Sale 107 units at $10 each
Marigold uses the FIFO cost flow assumption. All purchases and sales are on account.
Assume Marigold uses a periodic system. Prepare all necessary journal entries, including the end-of-month closing entry to record cost of goods sold. A physical count indicates that the ending inventory for January is 110 units. (If no entry is required, select "No entry" for the account titles and enter for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually)
Answer:
Jan 4
Dr Accounts Receivable 632
Cr Sales Revenue 632
Jan 11
Dr Purchases 870
Cr Accounts payable 870
Jan 13
Dr Accounts Receivable 1,035
Cr Sales Revenue 1,035
Jan 20
Dr Purchases 972
Cr Accounts payable 972
Jan 27
Dr Accounts receivable 1,070
Cr Sales Revenue 1,070
Jan. 31
Dr Inventory $660
Dr Cost of Goods Sold $1,702
Cr Purchases $1,842
Cr Inventory $520
Explanation:
Preparation of all the necessary journal entries, including the end-of-month closing entry to record cost of goods sold.
Jan 4
Dr Accounts Receivable 632
Cr Sales Revenue(79*8) 632
(to record Cost of Goods Sold)
Jan 11
Dr Purchases (145*6) 870
Cr Accounts payable 870
( to record the purchase)
Jan 13
Dr Accounts Receivable 1,035
Cr Sales Revenue(115*9) 1,035
(to record the cost of Goods Sold)
Jan 20
Dr Purchases(162*6) 972
Cr Accounts payable 972
( to record the purchase)
Jan 27
Dr Accounts receivable 1,070
Cr Sales Revenue(107*10) 1,070
( to record the cost of Goods Sold)
Preparation of the journal entry assuming the physical count indicates that the ending inventory for January is 110 units
Jan. 31
Dr Inventory $660
($6* 110)
Dr Cost of Goods Sold $1,702
($520+$1,842-$660)
Cr Purchases $1,842
($870 + $972)
Cr Inventory $520
(104* $5)
Swifty Enterprises reported cost of goods sold for 2020 of $1,453,700 and retained earnings of $5,392,600 at December 31, 2020. Swifty later discovered that its ending inventories at December 31, 2019 and 2020, were overstated by $102,820 and $37,880, respectively. Determine the corrected amounts for 2020 cost of goods sold and December 31, 2020, retained earnings.
Answer:
Corrected cost of goods sold $1,388,760
Corrected retained earnings $5,354,720
Explanation:
First, we need to determine corrected cost of goods sold
Corrected cost of goods sold at December 31, 2020
= Beginning inventory - Purchases - Ending inventory
= $1,453,700 - [$102,820 - $37,880]
= $1,453,700 - $64,930
= $1,388,760
The December 31,2020 corrected retained earnings would be computed as;
= Ending retained earnings - Overstated ending inventories at December 31, 2020
= $5,392,600 - $37,880
= $5,354,720
Glenville Company has the following information for April:
Cost of direct materials used in production $48,000
Direct labor 59,000
Factory overhead 37,000
Work in process inventory, April 1 40,000
Work in process inventory, April 30 40,000
Finished goods inventory, April 1 29,000
Finished goods inventory, April 30 18,000
Required:
For April, determine the cost of goods manufactured.
Answer:
cost of goods manufactured= $144,000
Explanation:
Giving the following information:
Cost of direct materials used in production $48,000
Direct labor 59,000
Factory overhead 37,000
Work in process inventory, April 1 40,000
Work in process inventory, April 30 40,000
To calculate the cost of goods manufactured, we need to use the following formula:
cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
cost of goods manufactured= 40,000 + 48,000 + 59,000 + 37,000 - 40,000
cost of goods manufactured= $144,000
Swifty Company's financial information is presented below. Sales Revenue $ p?Cost of Goods Sold 536000 Sales Returns and Allowances 37000 Gross Profit p?Net Sales 868000 The missing amounts above are: Sales Revenue Gross Profit a. $905000 $332,000 b. $832,000 $332,000 c. $ 905,000 $416,000 d. $832,000 $416,000
Answer:
The correct answer is A.
Explanation:
The gross profit is calculated by deducting from net sales the cost of goods sold:
Gross profit= net sales - COGS
Gross profit= 868,000 - 536,000
Gross profit= $332,000
Now, the sales revenues are the sales before returns and allowances. Therefore, we need to add them to the net sales:
Sales revenue= 868,000 + 37,000
Sales revenues= $905,000
What is double-entry accounting?
Answer:
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Double-entry bookkeeping, in, is a system of where every entry to an account requires a corresponding and opposite entry to a different account. The double-entry system has two equal and corresponding sides known as. The left-hand side is debit and the right-hand side is credit. Wikipedia
Inventor
Determine Cost of Land Four Corners Delivery Company acquired an adjacent lot to construct a new warehouse, paying $200,000 and giving a short-term note for $375,000. Legal fees paid were $6,000, delinquent taxes assumed were $4,100, and fees paid to remove an old building from the land were $15,500. Materials salvaged from the demolition of the building were sold for $2,600. A contractor was paid $900,000 to construct a new warehouse. Determine the cost of the land to be reported on the balance sheet.
Answer:
$598,000
Explanation:
Calculation of the Cost of Land
Cash $200,000
Note Payable $375,000
Legal fees $6,000
Delinquent taxes $4,100
Fees to Remove Old Building $15,500
Proceeds from Savages ($2,600)
Total $598,000
Therefore,
The cost of the land to be reported on the balance sheet is $598,000
Suppose you have to wait in line to purchase a soft drink at a Missouri State - Tulsa football game. The drink costs one dollar. While waiting in line, you hear the crowd roar as someone scores a touchdown. While running back to your seat, you fall and spill your drink on another spectator. What is your opportunity cost for the drink?
A. the cost of the drink plus the lost enjoyment of not seeing Missouri State score another touchdown (it couldn't have been Tulsa)
B. the cost of the drink, the lost enjoyment of not seeing the Missouri State touchdown, your thirst (you didn't get a drink), and the discomfort (to the other spectator) of sitting in the sun with wet, sticky clothing
C. the lost enjoyment of not seeing the Missouri State touchdown, your thirst (you didn't get a drink), and the discomfort (to the other spectator) of sitting in the sun with wet, sticky clothing
D. the lost enjoyment of not seeing the Missouri State touchdown, your thirst (you didn't get a drink), and your discomfort (assuming the other spectator responded by throwing his drink in your lap) of sitting in the sun with wet, sticky clothing
Capalbo Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the laborhours for the upcoming year at 52,000 labor-hours. The estimated variable manufacturing overhead was $2.78 per labor-hour and the estimated total fixed manufacturing overhead was $1,192,360. The actual labor-hours for the year turned out to be 52,600 labor-hours. The predetermined overhead rate for the recently completed year was closest to: A. $2.78. B. $25.45. C. $25.71. D. $22.93.
Answer:
Predetermined manufacturing overhead rate= $25.71 per direct labor hour
Explanation:
To calculate the predetermined manufacturing 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
Predetermined manufacturing overhead rate= (1,192,360 / 52,000) + 2.78
Predetermined manufacturing overhead rate= 22.93 + 2.78
Predetermined manufacturing overhead rate= $25.71 per direct labor hour
Supposed that the daily wage for miners is $110 and that of the muckers is $90 per day. Find the long run cost function for US Iron & Steel Co. (x teams produce 10x tons of iron ore per day.)
Answer:
$200 to produce 10x ton of iron ore
Explanation:
The cost for one day to produce 10x tons of iron ore is calculated as follows.
1 miner and 1 mucker work together to make 10x ton of iron ore where,
1 miners wage = $110
1 mucker wage = $90
This makes a total of $200 to produce 10x ton of iron ore.
The costs in the long run will remain same because the wages are fixed if the wages are negotiable or varies then in the long run the cost function can differ.
thompson corparations unadjusted trial balance includes the following balances assume normal balance accounts reciavable 1,865,000 allowance for doubtfull accounts 35,000 bad debts are estimated to be 6% of outstadning recievables what amount of bad debt expense will the company record
Answer: $76900
Explanation:
The following information can be deduced from the question:
Accounts receivable = $1,865,000
Allowance for doubtful debts = $35000
Estimated bad debt = 6% × $1,865,000 = $111900
The amount of bad debt expense that the company will record will be:
= Estimated bad debt - Allowance for doubtful debts
= $111900 - $35000
= $76900
how does understanding culture important in business?
8. Zelda owns a 50% general interest in YZ Partnership. At the beginning of the current year, the adjusted basis in her partnership interest was $95,000. In the current year, YZ generated a $110,000 business loss, earned $15,000 dividend and interest income on its investments and recognized a $7,000 capital gain. YZ also made a $5,000 distribution to Zelda. Compute Zelda’s adjusted basis in the partnership at the end of the year.
Answer:
$52,500
Explanation:
Computation for Zelda’s adjusted basis in the partnership at the end of the year.
Zelda’s adjusted basis=$95,000-(50%*$110,000)+(50%*$15,000)+$5,000
Zelda’s adjusted basis=$95,000-$55,000+$7,500+$5,000
Zelda’s adjusted basis= $52,500
Based on the information given we assumed 50% because Zelda is a 50% partner.
Therefore Zelda’s adjusted basis in the partnership at the end of the year will be $52,500
Revi Corp. provides the following information for the upcoming year: It expects to sell 29,000 pool cues for $13 each. Direct materials costs are $3, direct manufacturing labor is $5, and manufacturing overhead is $0.83 per pool cue. The following inventory levels apply to the upcoming year: Beginning inventory Ending inventory Direct materials 24,000 units 24,000 units Work-in-process inventory 0 units 0 units Finished goods inventory 1,200 units 2,800 units What are the budgeted costs for direct materials, direct manufacturing labor, and manufacturing overhead, respectively
Answer: See explanation
Explanation:
First, we need to calculate the production budget and this will be:
Sales = $29000
Add: Closing inventory of finished goods = $2800
Less: Opening inventory of finished goods = $1200
Production budget = $30600
Direct material purchased:
Production = 30600
Add: Closing inventory of direct material = 24000
Less: Opening inventory of direct material = 24000
Direct material purchased = 36000
a. Budgeted costs for direct materials
= Direct material purchased × price per unit
= 30600 × $3
= $91800
b. Direct manufacturing labor
= Production unit × Cost per unit
= 30600 × $5
= $153000
c. Manufacturing overhead
= Production units × Cost per unit
= 30600 × $0.83
= $25398
Chen Company's Small Motor Division manufactures a number of small motors used in household and office appliances. The Household Division of Chen then assembles and packages such items as blenders and juicers. Both divisions are free to buy and sell any of their components internally or externally. The following costs relate to small motor LN233 on a per unit basis.
Fixed cost per unit $5.20
Variable cost per unit $10.81
Selling price per unit $34.55
Assuming that the Small Motor Division has excess capacity, compute the minimum acceptable price for the transfer of small motor LN233 to the Household Division. (Round answer to 2 decimal places.)
Minimum transfer price $ per unit
Assuming that the Small Motor Division does not have excess capacity, compute the minimum acceptable price for the transfer of the small motor to the Household Division. (Round answer to 2 decimal places.)
Answer:
See below
Explanation:
1. If the small motor division has excess capacity,
Minimum transfer price = Variable cost + Opportunity cost
Variable cost per unit = $10.81
Add:
Opportunity cost per unit = $0.00 (Because the company has sufficient excess capacity)
Minimum transfer price = $10.81
2. If the small motor division has excess capacity,
Minimum transfer price = Variable cost + Opportunity cost
Variable cost per unit = $10.81
Add:
Opportunity cost per unit = $23.74 (As the company has no excess capacity, contribution lost is the opportunity cost)
Minimum transfer price = $34.55
N.B
Contribution lost = Selling price per unit - Variable cost per unit
= $34,55 - $10.8 = $23.74
Dream, Inc., has debt outstanding with a face value of $6 million. The value of the firm if it were entirely financed by equity would be $18.25 million. The company also has 440,000 shares of stock outstanding that sell at a price of $32 per share. The corporate tax rate is 35 percent. What is the decrease in the value of the company due to expected bankruptcy costs? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
Answer:
$955,000
Explanation:
According to the Modigliani and Miller theory, we can calculate the value of the levered firm which is denoted by;
VI = Vu + tB
VI = 18.25million + 0.35(6million)
VI = 20.35 million
We can also calculate the total market value of the firm Vt by adding the debt (B) with the total equity (SV)
Vt = B + SV
Vt = 5 million + 440,000(32)
Vt = 5 million + 14.80 million
Vt = 19.80 million
Then the decrease in the value of the company due to bankruptcy is
Vb = VI - Vt
Vb = 20.35 million - 19.80 million
VB = $955,000
Henry Ford is known for the introduction of the assembly line and the Model T. As his manufacturing effort expanded, however, he also adopted an attitude that came to be known as Fordism. What was one of the central tenets in his system?
Answer:
Fordism, a specific stage of economic development in the 20th century. Fordism is a term widely used to describe (1) the system of mass production that was pioneered in the early 20th century by the Ford Motor Company or (2) the typical postwar mode of economic growth and its associated political and social order in advanced capitalism.
Explanation:
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A local Chevrolet dealership carries the following types of vehicles:
Inventory Items Quantity Cost per Unit Market (replacement cost) per Unit
Vans 3 $22,000 $20,000
Trucks 6 17,000 16,000
2-door sedans 2 12,000 14,000
4-door sedans 7 16,000 19,000
Sports cars 3 32,000 35,000
SUVs 5 28,000 23,000
Because of recent increases in gasoline prices, the car dealership has noticed a reduced demand for its SUVs, vans, and trucks.
Required:
a. Compute the total cost of the entire inventory.
b. Determine whether each inventory item would be reported at cost or market. Multiply the quantity of each inventory item by the appropriate cost or market amount and place the total in the "Lower-of-Cost-or-Market" column. Then determine the total for that column.
c. Compare your answers in Requirement 1 and Requirement 2 and then record any necessary adjustment to write down inventory from cost to market value.
d. Discuss the financial statement effects of using lower-of-cost-or-market to report inventory.
Answer:
Explanation:
Since the table doesn't show up correctly, the first dollar value is the Cost per Unit of the vehicle, while the second dollar value is the Market Cost per Vehicle.
a. If we compute the cost using the Cost per Unit then they would be the following.
Vans: 3 * $22,000 = $66,000Trucks: 6 * $17,000 = $102,0002-Door Sedans: 2 * $12,000 = $24,0004-Door Sedans: 7 * $16,000 = $112,000Sports Cars: 3 * $32,000 = $96,000SUV's: 5 * $28,000 = $140,000Total Inventory: $504,000b. The "Lower-of-Cost-or-Market" basically states that whatever of the two prices is lower is ultimately the one that is recorded as the cost. Therefore, under this method the costs would be the following...(Purchase Cost or Market Cost)
Vans: 3 * $20,000 = $60,000 MarketTrucks: 6 * $16,000 = $96,000 Market2-Door Sedans: 2 * $12,000 = $24,000 Purchase Cost4-Door Sedans: 7 * $16,000 = $112,000 Purchase CostSports Cars: 3 * $32,000 = $96,000 Purchase CostSUV's: 5 * $23,000 = $115,000 MarketTotal Inventory: $504,000 Purchase Costc. There were only 3 changes made from from requirement 1 and 2 these were the changes in total cost...
Vans: $60,000 - $66,000 = - $6000Trucks: $96,000 - $102,000 = - $6000SUV's: $115,000 - $140,000 = - $25,000d. This allows companies to report losses at a much more reasonable and consistent way. Thus allowing profits to be more predictable.
a. Total inventory cost: $504,000
b. Total inventory at lower-of-cost-or-market: $503,000
c. Adjustment to write down inventory: -$37,000
d. Using lower-of-cost-or-market to report inventory allows for more realistic and conservative reporting, reflecting the decrease in market value.
a. If we compute the cost using the Cost per Unit then they would be the following.
Vans: 3 * $22,000 = $66,000
Trucks: 6 * $17,000 = $102,000
2-Door Sedans: 2 * $12,000 = $24,000
4-Door Sedans: 7 * $16,000 = $112,000
Sports Cars: 3 * $32,000 = $96,000
SUV's: 5 * $28,000 = $140,000
Total Inventory: $504,000
b. The "Lower-of-Cost-or-Market" basically states that whatever of the two prices is lower is ultimately the one that is recorded as the cost. Therefore, under this method the costs would be the following...(Purchase Cost or Market Cost)
Vans: 3 * $20,000 = $60,000 (reported at market)
Trucks: 6 * $16,000 = $96,000 (reported at market)
2-Door Sedans: 2 * $12,000 = $24,000 (reported at cost)
4-Door Sedans: 7 * $16,000 = $112,000 (reported at cost)
Sports Cars: 3 * $32,000 = $96,000 (reported at cost)
SUVs: 5 * $23,000 = $115,000 (reported at market)
Total for "Lower-of-Cost-or-Market" column: $60,000 + $96,000 + $24,000 + $112,000 + $96,000 + $115,000 = $503,000
c. The necessary adjustment to write down inventory from cost to market value is as follows:
Vans: -$6,000
Trucks: -$6,000
SUVs: -$25,000
d. Using the lower-of-cost-or-market method to report inventory allows companies to recognize and account for potential declines in the market value of their inventory.
By valuing inventory at the lower cost or market value, it ensures a conservative approach and provides a more accurate representation of the company's financial position.
This approach helps in reflecting the true economic value of inventory and potential losses associated with declines in market value.
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The Mighty Music Company produces and sells a desktop speaker for $100. The company has the capacity to produce 50,000 speakers each period. At capacity, the costs assigned to each unit are as follows: Unit level costs $ 45 Product level costs $ 15 Facility level costs $ 5 The company has received a special order for 500 speakers. If this order is accepted, the company will have to spend $15,000 on additional costs. Assuming that no sales to regular customers will be lost if the order is accepted, at what selling price will the company be indifferent between accepting and rejecting the special order
Answer:
$75
Explanation:
Calculation to determine what selling price will the company be indifferent between accepting and rejecting the special order
Using this formula
Selling price between accepting and rejecting the special order= ( Additional cost ÷ Units sold number) + Unit level Cost
Let plug in the formula
Selling price between accepting and rejecting the special order= ( $15,000 ÷ 500 ) + $45
Selling price between accepting and rejecting the special order= $30 + $45
Selling price between accepting and rejecting the special order= $75
Therefore The selling price that the company will be indifferent between accepting and rejecting the special order is $75
We are evaluating a project that costs $660,000, has a five-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 69,000 units per year. Price per unit is $58, variable cost per unit is $38, and fixed costs are $660,000 per year. The tax rate is 35 percent, and we require a return of 12 percent on this project. a. Calculate the accounting break-even poin
Answer:
39600
Explanation:
Breakeven quantity are the number of units produced and sold at which net income is zero
Breakeven quantity = fixed cost / price – variable cost per unit
Fixed cost = cost of machine + depreciation expense
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
$660,000 / 5 = $132,000
total fixed cost $660,000 + $132,000 = $792,000
$792,000 / ($58 - $38) = 39,600
Tulane Tires wrote a contract for a $104,000 sale of tires to the new Garden District Tour Company. Tulane only anticipates a slightly greater than 50 percent chance that Garden will be able to pay the amounts that Tulane is entitled to receive under the contract. Upon delivery of the tires, assuming no payment has yet been made by Garden, how much revenue should Tulane recognize under U.S. IFRS
Answer: $0
Explanation:
Under the United States IFRS, we should note that in this case, the contract according to the question will not be able to qualify for revenue recognition since the percentage of it occuring is more than 50% which mean that it is very likely it'll exist.
Therefore, in this case, revenue recognized will be $0.
According to the theory of liquidity preferences, expanding the money supply will _____ nominal interest rates in the short run, and, according to the Fischer effect, expanding the money supply will _____ nominal interest rates in the long run. Group of answer choices increase; increase; increase; decrease decrease; increase decrease; decrease
Answer: decrease; increase
Explanation:
According to the Liquidity Preference theory, in the short run, increasing money supply will mean that there is more money in the economy which translates to more money for investment. This will lead to a decrease in interest rates as there are more sources of investment.
In the long run however, the Fischer effect shows interest will move with inflation. If money supply is expanded, it will lead to inflation in the long run because there will be more demand. This rise in inflation will cause interest rates to rise as well.