Answer:
Kumi Emiko Co.
a) Adjusting Journal Entries:
Debit Sales Salaries expense $1,800
Credit Sales Salaries Payable $1,800
To record accrued sales salaries.
Debit Selling expense $2,900
Credit Prepaid selling expense $2,900
To record expired selling expense.
Debit Cost of goods sold $5,300
Credit Merchandise Inventory $5,300
To record determined shrinkage in merchandise inventory.
b) Closing Journal Entries:
Debit Sales revenue $ 609,000
Credit Sales returns and allowances $21,500
Credit Sales discounts $7,000
Credit Income summary $580,500
To close the net sales revenue to the income summary.
Debit Income Summary $526,000
Debit:
Cost of goods sold $257,300
Sales salaries expense 69,800
Utilities expense 25,000
Selling expenses 48,900
Administrative expenses 125,000
To close cost of goods sold and expenses to the income summary.
Debit Income Summary $54,500
Credit Retained Earnings $54,500
To close the income summary to retained earnings.
Debit Retained Earnings $53,000
Credit Dividends $53,000
To close the dividend to retained earnings.
Explanation:
a) Data and Calculations:
Debit Credit
Merchandise inventory $ 40,000
Prepaid selling expenses 7,600
Dividends 53,000
Sales $ 609,000
Sales returns and allowances 21,500
Sales discounts 7,000
Cost of goods sold 252,000
Sales salaries expense 68,000
Utilities expense 25,000
Selling expenses 46,000
Administrative expenses 125,000
Analysis of additional Information:
Sales Salaries expense $1,800 Sales Salaries Payable $1,800
Selling expense $2,900 Prepaid selling expense $2,900
Cost of goods sold $5,300 Merchandise Inventory $5,300
Adjusted accounts:
Debit Credit
Merchandise inventory $ 34,700
Prepaid selling expenses 4,700
Dividends 53,000
Sales Salaries Payable 1,800
Sales $ 609,000
Sales returns and allowances 21,500
Sales discounts 7,000
Cost of goods sold 257,300
Sales salaries expense 69,800
Utilities expense 25,000
Selling expenses 48,900
Administrative expenses 125,000
MSI is considering eliminating a product from its ToddleTown Tours collection. This collection is aimed at children one to three years of age and includes "tours" of a hypothetical town. Two products, The Pet Store Parade and The Grocery Getaway, have impressive sales. However, sales for the third CD in the collection, The Post Office Polka, have lagged the others. Several other CDs are planned for this collection, but none is ready for production.
MSI's information related to the Toddle Town Tours collection follows: Segmented Income Statement for MSI's Toddle Town Tours Product Lines Post Office Parade Getaway _Polka Pet Store Grocery Total Sales revenue Variable costs $110,000 $105,000 $31,000 $246,000 43,000 28,000 118,000 $ 63,000 S 62,000 $ 3,000 $128,000 2,800 16,700 $ 55,800 S 55,300 $ 200 $ 111,300 1,550 12,300 47,000 1000 4 Contribution margin Segment margin Net operating income (loss) Less: Direct Fixed costs 7,200 006,700 Less: Common fixed costs .505350 99,000 50,300 $ 50,050S (1.350) S 5,500 0 $ 50,050 $ (1,350) $99,000 5,250 Allocated based on total sales dollars MSI has determined that elimination of the Post Office Polka (POP) program would not impact sales of the other two items. The remaining fixed overhead currently allocated to the POP product would be redistributed to the remaining two products Required 1. Calculate the incremental effect on profit if the POP product is eliminated Effect on Profit 2. Should MSI drop the POP product?
Answer:
MSI
1. Incremental effect on profit if the POP product is eliminated is:
Profit will be reduced by $200 ($99,000 - $98,800).
2. Yes. MSI should drop the POP product. POP product is like a dog in the BCG matrix.
Explanation:
a) Data and Calculations:
Segmented Income Statement
for MSI's Toddle Town Tours Product Lines
Pet Store Grocery Post Office Total
Parade Getaway Polka Firm
Total Sales revenue $110,000 $105,000 $31,000 $246,000
Variable costs 47,000 43,000 28,000 118,000
Contribution margin $ 63,000 $ 62,000 $ 3,000 $128,000
Less: Direct Fixed costs 7,200 6,700 2,800 16,700
Segment margin $ 55,800 $ 55,300 $ 200 $ 111,300
Less: Common fixed costs 5,500 5,250 1,550 12,300
Net operating income (loss) $50,300 $ 50,050 $ (1,350) $99,000
Segmented Income Statement after POP Elimination
for MSI's Toddle Town Tours Product Lines
Pet Store Grocery Total
Parade Getaway Firm
Total Sales revenue $110,000 $105,000 $215,000
Variable costs 47,000 43,000 90,000
Contribution margin $ 63,000 $ 62,000 $125,000
Less: Direct Fixed costs 7,200 6,700 13,900
Segment margin $ 55,800 $ 55,300 $ 111,100
Less: Common fixed costs 6,275 6,025 12,300
Net operating income (loss) $ 49,525 $ 49,275 $98,800
1. Incremental effect on profit if the POP product is eliminated is:
Profit will be reduced by $200 ($99,000 - $98,800), which is the difference between the allocated fixed cost to POP ($1,550) and its operating loss ($1,350).
2. Yes. MSI should drop the POP product. POP product is like a dog in the BCG matrix.
Diminishing returns are a reason that fixed costs remain constant. the marginal cost curve is upward sloping. the average fixed cost curve is downward sloping. the marginal cost curve is downward sloping.
Answer:
the marginal cost curve is upward sloping.
Explanation:
Utility can be defined as any satisfaction or benefits a customer derives from the use of a product or service.
This ultimately implies that, any satisfaction or benefits a customer derives from the use of a product or service is generally referred to as a utility.
Basically, the marginal utility of goods and services is the additional satisfaction that a consumer derives from consuming or buying an additional unit of a good or service.
For example, buying a candy stick and eating it may satisfy your cravings but eating another one (an additional or extra unit) wouldn't give you as much satisfaction as the first due to diminishing marginal utility.
In Economics, the law of diminishing marginal utility states that as the unit of a good or service consumed by an individual increases, the additional satisfaction he or she derives from consuming additional units would start decreasing or diminishing as the units of good or service consumed increases.
Marginal cost can be defined as the additional or extra cost that is being incurred by a company as a result of the production of an additional unit of a product or service.
Generally, marginal cost can be calculated by dividing the change in production costs by the change in level of output or quantity. A marginal cost curve is upward sloping because of the law of diminishing returns.
Identify every authority cited in the opinion (note that some sources may be cited more than once) and then do the following:
List all primary mandatory authority.
List all primary persuasive authority.
List all secondary persuasive authority.
Answer:
Primary Authorities :
Statues, regulations, jurisdiction, trial court, cases.
Primary Persuasive Authority :
Constitution, legislation.
Secondary Persuasive Authority :
Law review articles, trial courts.
Explanation:
Primary persuasive authority means law. Following a law is mandatory and statute provides the regulation which are required to be followed or else it will be regarded as crime. Secondary persuasive authority is not law but it leads to the law and helps explain the terms and standards of the law.
Why is keeping a journal about what is good and bad regarding your summer or part-time work a good idea to help you choose a career path
The correct answer to this open question is the following.
Keeping a journal about what is good and bad regarding my summer or part-time work is a good idea to help me choose a career path because writing down what I like and what I dislike, I can get a pretty close idea of the things I enjoy and have more skills to perform, compared to the things I do not like or I have no abilities at all.
If a clearly identify my skills and abilities in the workplace during the summer, it will be easier for me to identify what could be the profession I love or at least, what I am attracted to.
As it is difficult to remember all the work experience by memory, writing the journal will help me to remember exact dates, specific activities that I enjoyed or were interesting, and what was not.
A firm is evaluating the performance of two managers running a summer training program. One manager is in a large division with over 100 trainees, while the other is in a small division with only 15 trainees. What is one principle the firm should use in its evaluation
Answer:
Principle of equitable assessment
Explanation:
In simple words, the principle of equitable assessment refers to the concept which states that while comparing two subjects, the evaluation will be in such a way that the assessment will be fair to both the topics.
Hence, it should be made in such a way or should be made on those dimensions which consdier the differences between the two population.
E Corporation produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 54,000 units per month is as follows: Per Unit Direct materials $ 49.60 Direct labor $ 9.50 Variable manufacturing overhead $ 2.50 Fixed manufacturing overhead $ 20.10 Variable selling & administrative expense $ 4.60 Fixed selling & administrative expense $ 22.00 The normal selling price of the product is $114.10 per unit. An order has been received from an overseas customer for 3,400 units to be delivered this month at a special discounted price. This order would not change the total amount of the company's fixed costs. The variable selling and administrative expense would be $2.60 less per unit on this order than on normal sales. Suppose there is ample idle capacity to produce the units required by the overseas customer and the special discounted price on the special order is $90.40 per unit. The monthly financial advantage (disadvantage) for the company as a result of accepting this special order should be:
Answer: $91120
Explanation:
The The monthly financial advantage (disadvantage) for the company will be calculated thus:
Incremental revenue = (3400 × $90.40) = $307360
Less: Incremental Cost
Direct material (3400 × $49.60) = $168640
Direct labor (3400 × $9.5) = $32300
Variable manufacturing overhead = (3400 × $2.5) = $8500
Variable selling & administrative expense = (3400 × $2) = $6800
Total incremental Cost = $216240
Therefore, the monthly financial advantage will be:
= $$307360 - $216240
= $91120
g how long (in years) will it take to triple an investment made at a 2% interest rate if the interest is compounded monthly
Hoi Chong Transport, Ltd., operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven 177,000 kilometers during a year, the average operating cost is 12.3 cents per kilometer. If a truck is driven only 118,000 kilometers during a year, the average operating cost increases to 15.5 cents per kilometer.
Required:
a. Using the high-low method, estimate the variable and fixed cost elements of the annual cost of the truck operation.
b. Express the variable and fixed costs in the form Y = a + bX.
c. If a truck were driven 147,000 kilometers during a year, what total cost would you expect to be incurred?
Harwood Company uses a job-order costing system that applies overhead cost to jobs on the basis of machine-hours. The company's predetermined overhead rate of $2.50 per machine-hour was based on a cost formula that estimates $217,500 of total manufacturing overhead for an estimated activity level of 87,000 machine-hours. Required: 1. Assume that during the year the company works only 82,000 machine-hours and incurs the following costs in the Manufacturing Overhead and Work in Process accounts: Compute the amount of overhead cost that would be applied to Work in Process for the year and make the entry in your T-accounts. 2A. Compute the amount of underapplied or overapplied overhead for the year and show the balance in your Manufacturing Overhead T-account.
Question Completion:
Manufacturing Overhead Account
Maintenance $24,000
Indirect materials 8,300
Indirect labor 82,000
Utilities 36,000
Insurance 7,300
Depreciation 65,000
Total costs $222,600
Work in Process
Direct materials $740,000
Direct labor 83,000
Answer:
Harwood Company
1. The amount of overhead cost that would be applied to Work in Process for the year is:
= $205,000.
2. T- Accounts:
Work in Process
Direct materials $740,000
Direct labor 83,000
Applied overhead 205,000
Manufacturing overhead
Maintenance $24,000
Indirect materials 8,300
Indirect labor 82,000
Utilities 36,000
Insurance 7,300
Depreciation 65,000
Applied overhead: WIP $205,000
Underapplied overhead 17,600
Total costs $222,600 $222,600
2A. The amount of underapplied overhead for the year is:
= $17,600
2B. Manufacturing overhead
Maintenance $24,000
Indirect materials 8,300
Indirect labor 82,000
Utilities 36,000
Insurance 7,300
Depreciation 65,000
Applied overhead: WIP $205,000
Underapplied overhead 17,600
Total costs $222,600 $222,600
Explanation:
a) Data and Calculations:
Predetermined overhead rate per machine-hour = $2.50
Estimated total manufacturing overhead = $217,500
Estimated activity level = 87,000
Actual results from production during the year:
Machine-hours worked = 82,000
Applied overhead costs = $205,000 (82,000 * $2.50)
Total manufacturing costs incurred = $222,600
Underapplied overhead = $17,600
Kathy quit her job as a financial advisor
Mohave Corp. is considering outsourcing production of the umbrella tote bag included with some of its products. The company has received a bid from a supplier in Vietnam to produce 8,000 units per year for $7.50 each. Mohave has the following information about the cost of producing tote bags:
Direct materials $3
Direct labor 2
Variable manufacturing overhead 1
Fixed manufacturing overhead 2
Total cost per unit $8
Mohave has determined that all variable costs could be eliminated by outsourcing the tote bags, while 60 percent of the fixed overhead cost is unavoidable. At this time, Mohave has no specific use in mind for the space currently dedicated to producing the tote bags.
Required:
1. Compute the difference in cost between making and buying the umbrella tote bag.
2. Based strictly on the incremental analysis, should Mohave buy the tote bags or continue to make them?
3. Suppose that the space Mohave currently uses to make the bags could be utilized by a new product line that would generate $10,000 in annual profits. Recompute the difference in cost between making and buying the umbrella tote bag. Does this change your recommendation to Mohave? If so, how?
4. Assume Mohave has a sustainability goal to increase the percentage of spending from local suppliers. If Mohave’s managers are responsible for improving this metric, how might it impact their sourcing decisions?
5. What other strategic or sustainability-related goals should Mohave consider before making a final decision?
Answer:
Mohave Corp.
1. Cost Differences:
Relevant costs:
Make Buy Difference
Direct materials $3
Direct labor 2
Variable manufacturing overhead 1
Fixed manufacturing overhead 0.80
Total cost per unit $6.80 $7.50 $0.70
Annual Units 8,000 8,000 8,000
Total costs $54,400 $60,000 $5,600
2. Based strictly on the incremental analysis, Mohave should continue to make the tote bags.
3. The recommendation is changed. Mohave should buy the tote bags from outside. Buying from outside increases operating income by $4,400.
Explanation:
a) Data and Calculations:
Price per unit from outside supplier = $7.50
Direct materials $3
Direct labor 2
Variable manufacturing overhead 1
Fixed manufacturing overhead 2
Total cost per unit $8
Relevant costs:
Make Buy Difference
Direct materials $3
Direct labor 2
Variable manufacturing overhead 1
Fixed manufacturing overhead 0.80
Total cost per unit $6.80 $7.50 $0.70
Annual Units 8,000 8,000 8,000
Total costs $54,400 $60,000 $5,600
Relevant costs:
Make Buy Difference
Direct materials $3
Direct labor 2
Variable manufacturing overhead 1
Fixed manufacturing overhead 0.80
Total cost per unit $6.80 $7.50 $0.70
Annual Units 8,000 8,000 8,000
Total costs $54,400 $60,000 $5,600
Annual profits from new product 0 (10,000) $10,000
Total net costs $54,400 $50,000 $4,400
Security Analysts that have evaluated Concordia Corporation, have determined that there is a 15% chance that the firm will generate earnings per share of $2.40; a 60% probability that the firm will generate earnings per share of $3.10; and a 25% probability that the firm will generate earnings per share of $3.80. What are the expected earnings per share for Concordia Corporation
Answer:
3.17
Explanation:
Expected earnings per share = (15%x2.40)+(60%x3.10)+(25%x3.80)
Sparky Corporation uses the weighted-average method of process costing. The following information is available for February in its Molding Department:
Units: Beginning Inventory: 25,000 units, 100% complete as to materials and 55% complete as to conversion.
Units started and completed: 110,000.
Units completed and transferred out: 135,000.
Ending Inventory: 30,000 units, 100% complete as to materials and 30% complete as to conversion.
Costs:
Costs in beginning Work in Process - Direct Materials: $43,000.
Costs in beginning Work in Process - Conversion: $48,850.
Costs incurred in February - Direct Materials: $287,000.
Costs incurred in February - Conversion: $599,150.
Required:
Calculate the equivalent units of conversion.
a. 110,000
b. 140,000
c. 144,000
d. 130,250
e. 165,000
Solution :
UNITS TO ACCOUNT FOR :
[tex]\text{Beginning Work}[/tex] in Process units $ [tex]25,000[/tex]
[tex]\text{Add: Units Started}[/tex] in Process $ [tex]14,000[/tex]
Total Units to account for $ [tex]165,000[/tex]
UNITS TO BE ACCOUNTED FOR:
[tex]\text{Units completed}[/tex] and transferred out $ [tex]135,000[/tex]
[tex]\text{Ending Work}[/tex] in Process $ [tex]30,000[/tex]
[tex]\text{Total Units}[/tex] to be accounted for $ [tex]165,000[/tex]
[tex]\text{Equivalent units}[/tex]
Material cost Conversion
% of completion Units % of completion Units
[tex]\text{Units started}[/tex] [tex]100\%[/tex] $[tex]135,000[/tex] [tex]100\%[/tex] $[tex]135,000[/tex]
and completed.
[tex]\text{Ending Work}[/tex] in Process [tex]100\%[/tex] [tex]30,000[/tex] [tex]30\%[/tex] [tex]9000[/tex]
[tex]\text{Total equivalent units}[/tex] [tex]165,000[/tex] [tex]144,00[/tex]
Therefore, the equivalent units of conversion is [tex]144,000 \text{ units}.[/tex]
Rivalry-related competitive pressures are being intensified by the efforts of rivals to expand their product lines and offer wider selection to those people who wear performance-based yoga and fitness apparel.
a. True
b. False
Answer:
True
Explanation:
The pressure that are competitive are considered to be intensified via the competitors efforts in order to diversify the product lines and the other things at the wider area that wore the performance based yoga and the apparel related to the fitness
So as per the given statement, the statement is true
hence, the option a is correct
Based on an examination of the risk and return data for a variety of alternative investments during the period of 1926-2011, which of the following statements is correct? Over the period of 1926-2011, the general trend of increasing riskiness among the following five assets is: U.S. Treasury bills, U.S. government long-term government bonds, long-term corporate bonds, large-company stocks, and small-company stocks. Over the period of 1926-2011, the general trend of increasing return among the following five assets is: U.S. Treasury bills, long-term corporate bonds, U.S. government long-term bonds, large-company stocks, and small-company stocks. Large-company stocks, rather than small-company stocks, exhibit the greater risk and the greater return. Small-company stocks, rather than long-term corporate bonds, exhibit both the greater return and the greater standard deviation.
Answer:
Based on an examination of the risk and return data for a variety of alternative investments during the period of 1926-2011, the correct statement is:
Small-company stocks, rather than long-term corporate bonds, exhibit both the greater return and the greater standard deviation.
Explanation:
Small-company stocks are known to show the highest volatility of returns among these five assets. The reason is that investors in small company stocks always expect higher returns to pay for the higher risks involved in such unproven investments, unlike investing in other assets. In addition, small-company stocks are known to pose higher risks given their known failure to deliver on their promised performance and returns.
Favaz began business at the start of this year and had the following costs: variable manufacturing cost per unit, $7; fixed manufacturing costs, $60,000; variable selling and administrative costs per unit, $3; and fixed selling and administrative costs, $263,000. The company sells its units for $48 each. Additional data follow. Planned production in units 10,000 Actual production in units 10,000 Number of units sold 9,500 There were no variances. The income (loss) under absorption costing is
Answer:
Favaz
The income (loss) under absorption costing is
= $41,000.
Explanation:
a) Data and Calculations:
Variable manufacturing cost per unit, $7
Fixed manufacturing costs, $60,000
Variable selling and administrative costs per unit, $3
Fixed selling and administrative costs, $263,000
Selling price per unit = $48
Planned production in units = 10,000
Actual production in units = 10,000
Number of units sold = 9,500
Ending inventory = 500 (10,000 - 9,500)
Income Statement
Sales revenue ($48 * 9,500) $456,000
Cost of production:
Variable manufacturing $70,000 ($7 * 10,000)
Fixed manufacturing costs, 60,000
Total cost of production $130,000
Less Ending inventory 6,500 ($13 * 500)
Cost of goods sold 123,500
Gross profit $332,500
Expenses:
Variable selling and administrative
costs per unit, ($3 * 9,500) $28,500
Fixed selling and
administrative costs, 263,000
Total expenses $291,500
Net income $41,000
Store Travel Time Each Way (Minutes) Price of a Dress (Dollars per dress)
Local Department Store 15 103
Across Town 30 85
Neighboring City 60 63
Juanita makes $16 an hour at work. She has to take time off work to purchase her dress, so each hour away from work costs her $16 in lost income. Assume that returning to work takes Juanita the same amount of time as getting to a store and that it takes her 30 minutes to shop. As you answer the following questions, ignore the cost of gasoline and depreciation of her car when traveling. Complete the following table by computing the opportunity cost of Juanita's time and the total cost of shopping at each location.
Store Opportunity Cost of Time (Dollars) Price of a Dress (Dollars per dress) Total Cost (Dollars)
Local Department Store 103
Across Town 85
Neighboring City 63
Answer:
Juanita makes $16 an hour at work so every hour away will cost her $16 in lost wages.
Local store
Opportunity costs would be the lost wages:
= ( Number of hours spent travelling * Wage per hour) + (Number of hours spent shopping * Wage per hour)
= ( 15/60 hours * 16 * 2 for the round trip) + (30/60 mins * 16)
= $16.00
Total cost = Opportunity cost + Price of dress
= 16 + 103
= $119
Across TownOpportunity cost
= ( 30/60 hours * 16 * 2 for the round trip) + (30/60 mins * 16)
= $24.00
Total cost:
= 24 + 85
= $109
Neighboring cityOpportunity cost:
= ( 60/60 hours * 16 * 2 for the round trip) + (30/60 mins * 16)
= $40.00
Total cost:
= 40 + 63
= $103
Assume that the current price of a stock is $100. A call option on that stock with an exercise price of $97 costs $7. A call option on the stock with the same expiration and an exercise price of $103 costs $3. Using these options what is the expiration profit of a bear call spread if the stock price is equal to $110
Answer:
-2
Explanation:
Hãy chỉ rõ điểm giống nhau và khác nhau về vấn đề sau đây: Giá trị, giá thành, giá trị cá biệt, giá trị xã hội, giá cả thị trường
HR can foster a triple bottom approach through incentive plans that focus on achieving comprehensive results rather than solely on profit incentives.
a. True
b. False
Answer:
a. True
Explanation:
Human resources management (HRM) can be defined as an art of managing, controlling and improving the number of people (employees or workers), functions, activities which are being used effectively and efficiently by an organization.
Thus, human resources managers are saddled with the responsibility of recruiting, managing and improving the welfare and working conditions of the employees working in an organization.
A triple bottom line (TBL) is a business management framework or model that comprises three (3) main components, which are; financial, environmental and social.
Human resources (HR) can enhance a triple bottom approach within an organization by establishing incentive plans that is typically focused on achieving comprehensive results rather than solely on profit incentives. Thus, it would foster the growth and development of an organization with respect to finance, environmental and social factors.
You pay $75 for a ticket to a Drake concert. You think the ticket is worth $100. The night before the concert your friend offers you a free ticket to a Post Malone concert that you think is worth $80. What is the opportunity cost to you of going to the Drake concert instead of the Post Malone concert?a) $155b) $20c) $5d) $75e) $80
Answer: $80
Explanation:
The opportunity cost is regarded as the real cost of the alternative that was left or forgone.
Based on the information given in the question, the opportunity cost is the free ticket to a Post Malone concert that is worth $80 which was given to me by my friend.
Therefore, the correct option is E.
The following is a list of various costs of producing T-shirts. Classify each cost as either a variable, fixed, or mixed cost for units produced and sold.
a. Ink used for screen printing Variable
b. Warehouse rent of $8,000 per month plus $0.50 per square foot of storage used Mixed
c. Thread Variable
d. Electricity costs of $0.038 per kilowatt-hour Variable
e. Janitorial costs of $4,000 per month Fixed
f. Advertising costs of $12,000 per month
g. Accounting salaries
h. Color dyes for producing different colors of T-shirts Variable
i. Salary of the production supervisor
j. Straight-line depreciation on sewing machines Fixed
k. Salaries of internal pattern designers
l. Hourly wages of sewing machine operators Variable
m. Property taxes on factory, building, and equipment Fixed
n. Cotton and polyester cloth
o. Maintenance costs with sewing machine company (the cost is $2,000 per year plus $0.001 for each machine hour of use.) Mixed
B) Magnolia, Inc. manufactures bedding sets. The budgeted production is for 31,800 comforters this year. Each comforter requires 7 yards of material. The estimated January 1 beginning inventory is 5,320 yards with the desired ending balance of 4,100 yards of material. If the material costs $6.80 per yard, determine the materials budget for the year.
$_______
C) Gleason invested $90,000 in the James and Kirk partnership for ownership equity of $90,000. Prior to the investment, land was revalued to a market value of $425,000 from a book value of $200,000. James and Kirk share net income in a 1:2 ratio.
a. Provide the journal entry for the revaluation of land. If an amount box does not require an entry, leave it blank.
b. Provide the journal entry to admit Gleason.
D) If the contribution margin ratio for France Company is 37%, sales were $413,000, and fixed costs were $106,000, what was the income from operations?
$152,810
$106,000
$37,448
$46,810
E) Cash and accounts receivable for Adams Company are provided below:
Current Year Prior Year
Cash $70,000 $50,000
Accounts receivable (net) 70,400 80,000
Based on this information, What is the amount and percentage of increase or decrease that would be shown with horizontal analysis?
Account Dollar Change Percent Change
Cash $ %
Accounts Receivable $
%
Answer:
A. Production and Sales Cost Classification:
Variable
a. Ink used for screen printing
c. Thread
d. Electricity costs of $0.038 per kilowatt-hour
h. Color dyes for producing different colors of T-shirts
k. Salaries of internal pattern designers
l. Hourly wages of sewing machine operators
n. Cotton and polyester cloth
Mixed
b. Warehouse rent of $8,000 per month plus $0.50 per square foot of storage used
o. Maintenance costs with sewing machine company (the cost is $2,000 per year plus $0.001 for each machine hour of use.)
Fixed
e.Janitorial costs of $4,000 per month Fixed
f. Advertising costs of $12,000 per month
g. Accounting salaries
i. Salary of the production supervisor
j. Straight-line depreciation on sewing machines
m. Property taxes on factory, building, and equipment
B. The materials budget for the year is:
= $1,505,384.
C. James, Kirk, and Gleason Partnership
Debit Land $225,000
Credit Land revaluation gain $225,000
To record land revaluation.
a. Debit Land Revaluation gain $225,000
Credit James, capital $75,000
Credit Kirk, Capital $150,000
To share the revaluation gain.
b. Debit Cash $90,000
Credit Gleason, Capital $90,000
To record Gleason's admission as a partner.
Debit James, Capital $30,000
Debit Kirk, Capital $60,000
Credit Cash $90,000
To reduce James and Kirk's capital accounts.
D. France Company
Income from operations = $46,810
E. Adams Company:
Account Dollar Change Percent Change
Cash $20,000 40%
Accounts Receivable ($9,600) (12%)
Explanation:
a) Data and Calculations:
A) Variable costs vary in total and are fixed per units. Fixed costs vary per units but are fixed in total within the relevant production capacity. Mixed costs have variable and fixed costs combined.
B) Magnolia, Inc.
Budgeted production of comforters for this year = 31,800
Materials required by each comforter = 7 yards
Total materials required for production =222,600 (31,800 * 7)
Beginning inventory = 5,320 yards
Ending balance = 4,100 yards
Total materials to be bought = 221,380 (222,600 + 4,100 - 5,320)
Material costs $6.80 per yard
Materials budget for the year = $1,505,384 (221,380 * $6.80)
$_______
C) Gleason invested $90,000 in the James and Kirk partnership for ownership equity of $90,000.
Land $225,000
Land revaluation $225,000
a. Land Revaluation $225,000
James, capital $75,000
Kirk, Capital $150,000
b. Cash $90,000 Gleason, Capital $90,000
James, Capital $30,000 Kirk, Capital $60,000 Cash $90,000
D) France Company
Contribution margin ratio = 37%
Sales $413,000
Contribution margin = $152,810 ($413,000 * 37%)
Fixed costs $106,000
Income from operations = $46,810
E) Adams Company:
Current Year Prior Year
Cash $70,000 $50,000
Accounts receivable (net) 70,400 80,000
Account Dollar Change Percent Change
Cash $20,000 40%
Accounts Receivable ($9,600) (12%)
Multiple Versus Single Overhead Rates, Activity Drivers Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment $548,080 Number of setups 680 Ordering costs 313,200 Number of orders 17,400 Machine costs 939,400 Machine hours 42,700 Receiving 343,000 Receiving hours 9,800 Deoro produces two models of dishwashers with the following expected prime costs and activity demands:
Model A Model B
Direct materials $600,000 $800,000
Direct labor $480,000 $480,000
Units completed 16,000 8,000
Direct labor hours 6,000 2,000
Number of setups 400 200
Number of orders 6,000 12,000
Machine hours 24,000 18,000
Receiving hours 3,000 7,000
The company's normal activity is 8,000 direct labor hours.
Required:
1. Determine the unit cost for each model using direct labor hours to apply overhead.
Unit Cost
Model A $
Model B $
2. Determine the unit cost for each model using the four activity drivers. Round your answers to nearest cent.
Unit Cost
Model A $
Model B $
3. Which method produces the more accurate cost assignment?
Answer:
Deoro Company
1. Unit cost using direct labor hours to apply overhead:
Unit Cost
Model A $167.985
Model B $226.99
2. Unit cost using the four activity drivers:
Unit Cost
Model A $133.97
Model B $287.28
3. Activity-based costing method always produces the more accurate cost assignment.
Explanation:
a) Data and Calculations:
Activity Expected Cost Activity Driver Activity Capacity
Setting up equipment $548,080 Number of setups 680
Ordering costs 313,200 Number of orders 17,400
Machine costs 939,400 Machine hours 42,700
Receiving 343,000 Receiving hours 9,800
Total overhead costs $2,142,680
Activity Rates:
Setting up equipment $806 per setup ($548,080/680)
Ordering costs $18 per order ($313,200/17,400)
Machine costs $22 per machine hour ($939,400/42,700)
Receiving $35 per receiving hour ($343,000/9,800)
Model A Model B
Direct materials $600,000 $800,000
Direct labor $480,000 $480,000
Overhead applied $1,063,500 $1,018,200
Total costs $2,143,500 $2,298,200
Units completed 16,000 8,000
Cost per unit $133.97 $287.275
Direct labor hours 6,000 2,000
Number of setups 400 200
Number of orders 6,000 12,000
Machine hours 24,000 18,000
Receiving hours 3,000 7,000
The company's normal activity is 8,000 direct labor hours.
Assignment of overhead costs:
Model A Model B
Number of setups $322,500 (400 * $806) $161,200 (200 * $806)
Number of orders 108,000 (6,000 * $18) 216,000 (12,000 * $18)
Machine hours 528,000 (24,000 * $22) 396,000 (18,000 * $22)
Receiving hours 105,000 (3,000 * $35) 245,000 (7,000 * $35)
Total overhead applied $1,063,500 $1,018,200
Overhead based on direct labor hours:
Total overhead costs = $2,143,680
Total direct labor hours = 8,000 (6,000 + 2,000)
Overhead rate per DLH = $267.96
Allocation of overhead:
Model A Model B
Direct labor hours 6,000 2,000
Overhead (DLH) $1,607,760 ($267.96 *6,000) $535,920 ($267.96 * 2,000)
Model A Model B
Direct materials $600,000 $800,000
Direct labor $480,000 $480,000
Overhead applied $1,607,760 $535,920
Total costs $2,687,760 $1,815,920
Units completed 16,000 8,000
Cost per unit $167.985 $226.99
what is the primary benefit people receive in exchange for paying premiums to an insurance company
Answer:
The insurance company will pay for covered expenses
With premium rates from insurance companies, the overall protection is much more guaranteed than a regular, and perhaps the insurance will cover more than regular insurance.
A benefit that people receive in exchange for paying premiums is that insurance company B.will pay for covered expenses.
What is insurance?The insurance can be regarded as a process of insuring one's property or life in case of danger or any future problems.
The insurance company pays you or someone you choose if something bad happens to you. If you have no insurance and an accident happens, you may be responsible for all related costs.
Therefore, option B is correct because, when people pay their premiums, the company will be available to covered expenses.
Learn more about insurance here,
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(f) Find the present value of an investment that will pay $3,000 at the end of Years 10, 11, and 12. Use a discount rate of 8%.
Answer:
PV= $3,867.67
Explanation:
Giving the following information:
Find the present value of an investment that will pay $3,000 at the end of Years 10, 11, and 12. Use a discount rate of 8%.
First, we will determine the future value of the payments:
FV= {A*[(1+i)^n-1]}/i
A= annual payment
FV= {3,000*[(1.08^3) - 1]} / 0.08
FV= $9,732.2
Now, the present value:
PV= FV / (1 + i)^n
PV= 9,732.2 / (1.08^12)
PV= $3,867.67
For each of the following products and services, indicate whether it is more likely produced in a process operation or in a job order operation.
1. Beach towels
2. Bolts and nuts
3. Lawn chairs
4. Headphones
5. Designed patio
6. Door hardware
7. Cut flower arrangements
8. House paints
9. Concrete swimming pools
10. Custom tailored dresses
11. Grand pianos
12. Table lamps
Answer:
S/n Product and services Indication
1 Beach towels Process operation
2 Bolts and nuts Process operation
3 Lawn chairs Process operation
4 Headphones Process operation
5 Designed patio Job order operation
6 Door hardware Process operation
7 Cut flower arrangements Job order operation
8 House paints Process operation
9 Concrete swimming pools Job order operation
10 Custom tailored dresses Job order operation
11 Grand pianos Job order operation
12 Table lamps Process operation
Agreement and disagreement among economists
Suppose that Yakov, an economist from a business school in Georgia, and Ana, an economist from a public television program, are arguing over budget deficits. The following dialogue shows an excerpt from their debate:
Ana: Most people recognize that the budget deficit has been rising considerably over the last century. We need to find the best course of action to remedy this situation.
Yakov: I believe that a cut in income tax rates would boost economic growth and raise tax revenue enough to reduce budget deficits.
Ana: I actually feel that raising the top income tax rate would reduce the budget deficit more effectively.
The disagreement between these economists is most likely due to ___.
Despite their differences, with which proposition are two economists chosen at random most likely to agree?
A. Rent cellings reduce the quantity and quality of available housing.
B. Immigrants receive more in government benefits than they contribute in taxes.
C. Having a single income tax rate would improve economic performance.
Answer:
differing opinions on the point we are on the Laffer Curve
A
Explanation:
The Laffer Curve is a supply side economic theory developed by Arthur Laffer in 1974.
The curve depicts the relationship between tax rates and tax revenue
According to this theory, higher income tax rate reduces the incentive of labour to work and invest due to the fact that labour would have to pay higher tax. This means that at some point, increase in the tax rate would decrease government revenue rather than increase it.
The theory submits that there is an optimal tax rate at which tax income is maximised. Once this point is surpassed, increase in tax rate would reduce government revenue
Price ceiling is when the government or an agency of the government sets the maximum price for a product. It is binding when it is set below equilibrium price.
Effects of a binding price ceiling
1. It leads to shortages
2. it leads to the development of black markets
3. it prevents producers from raising price beyond a certain price
4. It lowers the price consumers pay for a product. This increases consumer surplus
A rent ceiling would lead to shortage of houses and a reduction of the quality of available housing.
You have been asked to create a synthetic short position in a forward contract that permits you to sell 10 units of the underlying one year from now at a price of $50 per unit. (1) Describe the positions you need to take in call and put options to achieve the synthetic short forward position. (2) If the underlying is selling for $48 today (i.e. So = 48), what is the cost of your synthetic short position?
Solution :
[tex]\text{Short forward = buy a put + short a call on the same stock}[/tex] with the same exercise price.
X = exercise price = 50
1). Position to be taken :
-- buy 10 numbers of Put options with strike price of $ 50 per unit.
--- short (sell) 10 numbers of Call option with strike price of $ 50 per unit.
2). Cost of synthetic short position = [tex]$10 \times (P-C)$[/tex],
where, P = price of 1 put ption
C = price of 1 call option
The Call - Put parity equation :
[tex]$\frac{C+X}{(1+r)^t}=S_0+P$[/tex]
Here, C = Call premium
X = strike price of call and Put
r = annual rate of interest
t = time in years
[tex]$S_0$[/tex] = initial price of underlying
P = Put premium
Therefore,
[tex]$P-C=PV(X)-S_0=\frac{X}{(1+r)^t}-S_0$[/tex]
Here, t = 1, [tex]S_0[/tex] = 48, X = 50
So the cost of the position is given as : [tex]$\frac{50}{(1+r)} -48$[/tex]
Calculate real rate if you have nominal rate is 12% and inflation rate is 7% Enter the answer in percentage format to two decimal place without the % sign -> 9.30 and not 9.3% or .093)
Answer: 5.00
Explanation:
The real interest rate is the difference between the nominal interest and the inflation rate.
Real interest rate will be:
= Nominal interest rate − Inflation rate.
= 12% - 7%
= 5.00
Therefore, the real Interest rate is 5.00.
explain consumptions of the principal of absolute advantage
Answer:
The Absolute Advantage Theory assumed that only bilateral trade could take place between nations and only in two commodities that are to be exchanged.
Explanation:
In economics, the principle of absolute advantage refers to the ability of a party (an individual, a firm, or a country) to produce more of a good or service than competitors while using the same amount of resources.