Answer:
Total allocated overhead= $9,532.42
Explanation:
Giving the following information:
Activity Rate
Setting up batches= $59.06 per batch
Processing customer orders= $72.66 per customer order
Assembling products= $3.75 per assembly hour
Product K91B
Number of batches 86
Number of customer orders 36
Number of assembly hours 490
To allocate overhead, we need to use the following formula on each activity rate:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Setting up= 59.06*86= 5,079.16
Processing= 72.66*36= 2,615.76
Assembling= 3.75*490= 1,837.5
Total allocated overhead= $9,532.42
The following table contains statements that provide some analysis of policies that address globalization. Categorize each of these statements as either positive or normative.
1. Statement Positive Normative In the past decade, U.S. companies have outsourced millions of jobs overseas.
2. Companies that outsource jobs are acting immorally.
3. If the U.S. government were to institute higher tariffs on imports, companies would stop outsourcing jobs.
4. The U.S. government should institute higher tariffs on imports.
Answer:
In the past decade, U.S. companies have outsourced millions of jobs overseas - Positive
Companies that outsource jobs are acting immorally - Normative
If the U.S. government were to institute higher tariffs on imports, companies would stop outsourcing jobs - Positive
The U.S. government should institute higher tariffs on imports - Normative
Explanation:
Normative statements are statements made out of value judgements. Normative statements are opinions.
Positive statements are statements made based on facts. They are objective statements that can be tested, accepted or rejected using evidence.
I hope my answer helps you
A normative statements refers to the statements made out of value judgement. Hence, these statement are opinions.
A positive statements refers to the are statements made based on facts. Hence, a positive statements are objective statements that can be tested, accepted or rejected using evidence.
In the past decade, U.S. companies have outsourced millions of jobs overseas is an example of Positive statement.Companies that outsource jobs are acting immorally is an example of Normative statement.If the U.S. government were to institute higher tariffs on imports, companies would stop outsourcing jobs is an example of Positive statement.The U.S. government should institute higher tariffs on imports is an example of Normative statement.Read more about normative statement
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Nosloc Corp. had $800,000 net income in 2019. On January 1, 2019 there were 200,000 shares of common stock outstanding. On April 1, 20,000 shares were issued and on September 1, Nosloc bought 30,000 shares of treasury stock. There are 30,000 options to buy common stock at $40 a share outstanding. The market price of the common stock averaged $50 during 2019. The tax rate is 40%. During 2019, there were 40,000 shares of convertible preferred stock outstanding. The preferred is $100 par, pays $3.50 a year dividend, and is convertible into three shares of common stock. Nosloc issued $2,000,000 of 8% convertible bonds at face value during 2018. Each $1,000 bond is convertible into 30 shares of common stock. Instructions Compute diluted earnings per share for 2019. Show all computations.
Answer:
diluted EPS = $2.05
Explanation:
diluted earnings per share = net income / (weighted common stocks outstanding + diluted shares).
net income = $800,000
weighted common stocks outstanding:
January 1, 200,000 common stocks
April 1, 20,000 stocks issued = 20,000 x 9/12 = 15,000 common stocks
September 1, 30,000 treasury stocks purchased = -30,000 x 4/12 = -10,000
total weighted stocks outstanding = 205,000
diluted shares:
30,000 options at $40 per stock = [($50 - $40) / $50] x 30,000 = 6,000
2,000 bonds x 30 stocks = 60,000
preferred stock = 40,000 x 3 = 120,000
total diluted shares = 186,000
diluted EPS = $800,000 / (205,000 + 186,000) = $2.05
Robin Corporation retires its $800000 face value bonds at 104 on January 1, following the payment of annual interest. The carrying value of the bonds at the redemption date is $829960.
Required:
A) The entry to record the redemption will include __________.
O a debit of $32000 to Premium on Bonds Payable.
O debit of $2040 to Loss on Bond Redemption.
O credit of $32040 to Premium on Bonds Payable.
O credit of $2040 to Loss on Bond Redemption.
Answer:
The correct option is debit of $2040 to Loss on Bond Redemption
Explanation:
The unamortized premium on the bonds at redemption date=carrying value-face value
carrying value is $829,960
face value is $800,000
unamortized premium=$829,960-$800,000=$29,960
cash paid on redemption=$800,000*104%=$832,000.00
The appropriate entries would a credit to cash of $ 832,000 while face value is debit to bonds payable and also the unamortized premium is debited to premium on bonds payable
loss on retirement=$832,000-$829,960=$2040
The loss is debited to loss on bond redemption
Suppose that, in a competitive market without government regulations, the equilibrium price of milk is $2.50 per gallon. Complete the following table by indicating whether each of the statements is an example of a price ceiling or a price floor and whether it is binding or nonbinding.
Statement Price Control Binding or Not
The government has instituted a legal elector
minimum price of $2.30 per gallon for more
than $2.50 per gallon. Price ceiling Binding
Price floor Non-binding
The government has instituted a legal minimum
price of $3.40 per gallon for gasoline. Price ceiling Binding
Price floor Non-binding
There are many teenagers who would like to
work at gas stations, but they are not hired due
to minimum-wage laws. Price ceiling Binding
Price floor Non-binding
Answer and Explanation:
According to the scenario, computation of the given data are as follow:-
Price ceiling:-This is show the limit of the price on maximizing value of the product which is decided by government and his imposed group for customer.
Binding:-The binding price ceiling is below the equilibrium price.
Unbinding:-The unbinding price ceiling is above equilibrium price.
Price floor:-This is show the limit of the price on lower value of the product which is decided by government and his imposed group for customer. A price floor must be higher than the price equilibrium price in order to be effective.
Binding:-The binding price floor is above the equilibrium price.
Unbinding:-The unbinding price floor is below the equilibrium price.
It is given that the equilibrium price of milk is $2.50 per gallon.
Statement 1:-This is the example of price floor and binding because minimum price of $2.30 per gallon is decided.
Statement 2:-This is the example of price floor and binding because minimum price of $3.40 per gallon is decided for gasoline.
Statement 3:-This is the example of price floor and binding because teenagers are not hired due to minimum-wage laws.
At the beginning of the year, Infodeo established its predetermined overhead rate for movies produced during the year by using the following cost predictions: overhead costs, $2,000,000,and direct labor costs, $500,000. At year-end, the companyâs records show that actual overhead costs for the year are $949,700.
Actual direct labor cost had been assigned to jobs as follows.
Movies completed and released $400,000
Movies still in production 36,000
Total actual direct labor cost $436,000
Required:
1) Determine the predetermined overhead rate for the year.
2) Enter the overhead costs incurred and the amounts applied during the year using the predetermined overhead rate and determine whether overhead is overapplied or underapplied.
3) Prepare the adjusting entry to allocate any over or underapplied overhead to Cost of Goods Sold.
Answer:
1. 400%
2. The overhead is over applied by $794,300
3. Account Debit Credit
Factory overhead $794,300
Cost of goods sold $794,300
Explanation:
Overhead costs = $2,000,000
Direct labor costs = $500,000.
1. To calculate the predetermined overhead rate, we use the formula
Predetermined overhead rate = [tex]\frac{Estimated Overhead}{Estimated Direct Labor Cost}[/tex] × 100
= [tex]\frac{2,000,000}{500,000}[/tex] × 100 = 400%
Therefore, Predetermined overhead rate = 400%
2. Applied overhead cost = Direct material cost × Predetermined overhead cost
Total direct labor cost = $436,000
Therefore, applied overhead cost = $436,000 × 400% = $1,744,000
Actual overhead costs = $949,700
Factory overhead = Applied overhead - Actual overhead
= $1,744,000 - $949,700
= $794,300
The overhead is over applied by $794,300
3. Account Debit Credit
Factory overhead $794,300
Cost of goods sold $794,300
onsider three firms identical in all aspects (including the probability with which they discover a shirker), except that monitoring costs vary across the firms. Moni-toring workers is very expensive at Firm A, less expensive at Firm B, and cheapest at Firm C. If all three firms pay efficiency wages to keep their workers from shirk-ing, which firm will pay the greatest efficiency wage? Which firm will pay the smallest efficiency wage?
Answer:
Firm A will pay the greatest and firm C will pay the smallest.
Explanation:
Shirking can be defined as the act of neglecting or not doing a job properly so it is an unwanted behavior at every firm.
Even though the probability of discovering a shirker is the same at each firm, firm A pays the highest amount to their monitoring workers who keep track of the employees and their efficiency.
This wage difference can act as a performance booster for monitoring workers and can lead to the ones at firm A to be more strict causing the workers to be more productive. Therefore firm A will need to pay the greatest efficiency wage to keep their employees motivated. And firm C will pay the smallest efficiency wage.
I hope this answer helps.
Pharoah Construction enters into a contract with a customer to build a warehouse for $870000 on March 30, 2021 with a performance bonus of $50000 if the building is completed by July 31, 2021. The bonus is reduced by $10000 each week that completion is delayed. Pharoah commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes: Completed by Probability July 31, 2021 65% August 7, 2021 25% August 14, 2021 5% August 21, 2021 5% The transaction price for this transaction is
Answer:
$915,000
Explanation:
The computation of the transaction price based on the expected value approach is presented below:
The formula is
= (Building cost of warehouse + bonus) × probability percentage
Date Calculation Amount
July 31, 2021 ($870,000+$50,000) × 0.65 $598,000
August 7, 2021 ($870,000+$40,000) × 0.25 $227,500
August 14, 2021 ($870,000+$30,000) × 0.05 $45,000
August 21, 2021 ($870,000+$20,000) × 0.05 $44,500
Total $915,000
Since the bonus is reduced $10,000 each week so $10,000 is subtracted for every delayed week
The following information relates to a product produced by Faulkland Company:
Direct materials $ 9
Direct labor 6
Variable overhead 5
Fixed overhead 7
Unit cost $ 27
Fixed selling costs are $1,170,000 per year. Variable selling costs of $3 per unit sold are added to cover the transportation cost. Although production capacity is 670,000 units per year, Faulkland expects to produce only 570,000 units next year. The product normally sells for $35 each. A customer has offered to buy 77,000 units for $26 each. The customer will pay the transportation charge on the units purchased. If Faulkland accepts the special order, the effect on income would be a:___________
A. $231,000 increase.
B. $462,000 increase.
C. $77,000 increase.
D. $693,000 decrease.
Answer:
A. $231,000 increase.
Justin, age 52 and Jamie, age 49 live in California, are married, and file a joint return. Their combined salary for 2019 is $200,000. During 2019, their stock portfolio generated $1,500 in qualified dividends and $500 in non-qualified dividends. They also earned $1,000 on US treasuries. They received a $1,000 state tax refund in 2019. Additionally, Justin’s employer provided Justin with a cafeteria plan. The plan provided $5,000 to use towards health insurance and dental insurance. Justin opted out of the coverage and took the cash because Jamie’s employer provided coverage for both her and her spouse. In 2018, Justin and Jamie itemized their deductions, which were $24,500. In 2019, they paid $9,000 in state income tax, $14,000 in mortgage interest and $3,000 in property tax. What is their taxable income?
a. $182,500 b. $177,000 c. $184,100 d. $183,600 e. None of the choices listed are correct.
Answer:
The correct answer is (e) None of the choices listed are correct.
Explanation:
Solution
Given that:
1. The Qualified dividend is the dividend taxed at capital gain tax rate and unqualified dividend taxed at individuals normal income tax rate. Therefore qualified dividend and non qualified dividend of $1500 &$500 included in gross taxable income.
2. Earned on US treasurers is exempt at state level but fully taxable at federal level. $1000 received taxable
3. State tax refund; don't report the state tax refund if didn't itemized deductions on federal tax return. Consider $1000 received as state tax refund required to be reported because of itemized deductions.
4. Section 125 of IRC specifies that cafeteria plans are exempt from calculation of gross income for federal taxation. Therefore $5000 cafeteria plan provided by employer is exempt.
5. During the year any state or local taxes paid and property taxes paid are deductible. Therefore $9000 and $3000 deductible subject to maximum $10000 of income tax and mortgage interest is $14000.
Now,
The Income is
The Salary= $200000
Add
The Qualified dividend= $1500
Non-qualified dividend =$500
Income from US treasurer $1000
State tax refund =$1000
Gross income$204000
The Less deductions.
Mortgage interest 14000
Income ans property tax is$10000
Tax able income= $ 180000
Therefore the taxable income is =$180000
Edward Marshall Boehm, Inc. is a small, high-quality porcelain art objects company that has been very successful, particularly at producing images of vanishing species of birds. These pieces are complex sculptures selling from $100 to over $20,000, and are sought by some sophisticated collectors. The company is run by Mr. and Mrs. Boehm (pronounced "beam"): he is the artist and master of the complex hard paste porcelain manufacturing process; she is in charge of the marketing and financial aspects of the business. The demand for the artistic creations is growing, but many of the company’s past policies no longer seemed appropriate. The Boehms wanted to position the company for the long run. Their stated goals for the company were "to make the world aware of Mr. Boehm’s artistic talent, to help world wildlife causes by creating appreciation and protection for threatened species, and to build a continuing business that could make them comfortably wealthy, perhaps millionaires."
Required:
1. Based on the above information, what competitive strategy could Edward Marshall Boehm pursue and what competitive strategy is not a good option, given its goals?
O Focused differentiation, but not cost leadership
O Broad differentiation, but not global strategy
O Unrelated diversification, but not broad differentiation
O Related diversification, but not the focused cost approach
O Cost leadership, but not transnational strategy
Answer:
O Focused differentiation, but not cost leadership
Explanation:
A focused differentiation strategy is based on serving specific markets or niches. They offer differentiated products that are valued and looked for by specific type of customers. In this case, Boehm's customers are sophisticated collectors, they are not just average ordinary customers. Their customers know about sculptures and they look for certain types of products. That is why they can be considered a niche.
A cost leadership strategy would involve trying to sell their products at a low cost and that does not apply to artists that are trying to establish their brand. Mr. Boehm's sculptures are not cheap and probably will never be.
Under its executive stock option plan, W Corporation granted options on January 1, 2021, that permit executives to purchase 28 million of the company's $1 par common shares within the next eight years, but not before December 31, 2023 (the vesting date). The exercise price is the market price of the shares on the date of grant, $19 per share. The fair value of the options, estimated by an appropriate option pricing model, is $5 per option. No forfeitures are anticipated. The options are exercised on April 2, 2024, when the market price is $22 per share. By what amount will W's shareholders equity be increased when the options are exercised
Answer:
$532 million
Explanation:
Number of common stock executives are permitted to purchase = 28 million
Exercise price = Market price of the shares on the date of grant = $19 per share
Amount of increase in W's shareholders equity = 28 million * $19 = $532 million
Therefore, W's shareholders equity will increase by $532 million when the options are exercised.
Omicron Technologies has $50 million in excess cash and no debt. The firm expects to generate additional free cash flows of $40 million per year in subsequent years and will pay out these future free cash flows as regular dividends. Omicron’s unlevered cost of capital is 10% and there are 10 million shares outstanding. Omicron’s board is meeting to decide whether to pay out its $50 million in excess cash as a special dividend or to use it to repurchase shares of the firm’s stock. Assume that Omicron uses the entire $50 million in excess cash to pay a special dividend. Assume that you own 2,500 shares of Omicron stock. Suppose you are unhappy with Omicron’s decision and would prefer that Omicron used the excess cash to repurchase shares. The number of shares that you would have to buy in order to undo the special cash dividend that Omicron paid is closest to:
Answer:
278 Shares
Explanation:
According to the scenario, computation of the given data are as follow:-
We can calculate the no. of shares to be bought by using following formula:-
Unlevered cost of capital = 10% = 0.10
Value of Enterprise = Additional Free Cash Flow ÷ Unlevered Cost of Capital
= $40 million ÷ 0.10 = $4 million
Market Value of Shares = Value of Enterprise + Excess Cash
= $400 million + $50 million = $450 million
Per Share Market Value = Market Value of Shares ÷ Share Outstanding
= $450 million ÷ $10 million shares = $45 per share
Per Share Special Dividend = Excess Cash ÷ Share Outstanding
= $50 million ÷ $10 million shares = $5 per share
Dividend Per Share = Own Shares × Per Share Special Dividend
= 2500 shares × $5 per share = $12,500
No. of Shares to Be Bought = Dividend Per Share ÷ Per Share Market Value
= $12,500 ÷ $45 per share
= 277.78 or 278
Employers are generally allowed to deduct reasonable compensation paid to employees, but the level of deductible compensation is limited to a maximum of $ ________ for the CEO, CFO, and the next three highest paid officers of publicly traded corporations unless certain exceptions are met.
Answer:
1 million.
Explanation:
Employers are generally allowed to deduct reasonable compensation paid to employees, but the level of deductible compensation is limited to a maximum of $ 1,000,000 for the CEO, CFO, and the next three highest paid officers of publicly traded corporations unless certain exceptions are met.
Allowance for Doubtful Accounts has a debit balance of $600 at the end of the year (before adjustment), and an analysis of accounts in the customer ledger indicates uncollectible receivables of $13,000.
1. Which of the following entries records the proper adjusting entry for bad debt expense?a. debit Bad Debt Expense, $12,400; credit Allowance for Doubtful Accounts, $12,400b. debit Bad Debt Expense, $13,600; credit Allowance for Doubtful Accounts, $13,600c. debit Allowance for Doubtful Accounts, $600; credit Bad Debt Expense, $600d. debit Bad Debt Expense, $600; credit Allowance for Doubtful Accounts, $600
Answer:
b. debit Bad Debt Expense, $13,600; credit Allowance for Doubtful Accounts, $13,600
Explanation:
Allowance for Doubtful Accounts is a contra asset account, It normally has credit balance but an adjustment may also make it's balance debit.
The uncollectible receivables of $13,000 means the there should be a credit balance in Allowance for Doubtful Accounts at the end of the period. This account already has debit balance of $600 which is also needs to be adjusted.
Total adjustment = $13,000 + $600 = $13,600
The property, plant, and equipment section of the Jasper Company’s December 31, 2020, balance sheet contained the following: Property, plant, and equipment: Land $ 120,000 Building $ 840,000 Less: Accumulated depreciation (200,000 ) 640,000 Equipment 180,000 Less: Accumulated depreciation ? ? Total property, plant, and equipment ? The land and building were purchased at the beginning of 2016. Straight-line depreciation is used and a residual value of $40,000 for the building is anticipated.
Answer:
total accumulated depreciation for equipment account = $37,111 (equipment account = $180,000 - $37,111) = $142,889total property, plant, and equipment account = $902,889Explanation:
Land $ 120,000
Building $ 840,000 Less: Accumulated depreciation (200,000 ) 640,000
Equipment 180,000 Less: Accumulated depreciation ?
3 equipments:
Equipment 1 ⇒ $70,000 (1/1/2018), useful life 10 yearsEquipment 2 ⇒ $80,000 (6/30/2019), useful life 8 yearsEquipment 3 ⇒ $30,000 (9/1/2020), useful life 9 yearsWe can also assume straight line depreciation is used for the equipment:
Equipment 1:
depreciation expense per year = $70,000 / 10 = $7,000
accumulated depreciation = $7,000 x 3 years = $21,000
Equipment 2:
depreciation expense per year = $80,000 / 8 = $10,000
accumulated depreciation = $10,000 x 1.5 years = $15,000
Equipment 3:
depreciation expense per year = $30,000 / 9 = $3,333.33
accumulated depreciation = $3,333.33 x 4/12 = $1,111.11 ≈ $1,111
total accumulated depreciation for equipment account = $21,000 + $15,000 + $1,111 = $37,111
A gourmet coffee shop in downtown San Francisco is open 200 days a year and sells an average of 75 pounds of Kona coffee beans a day. (Demand can be assumed to be distributed normally, with a standard deviation of 15 pounds per day.) After ordering (fixed cost 5 $16 per order), beans are always shipped from Hawaii within exactly 4 days. Per-pound annual holding costs for the beans are $3.
a) What is the economic order quantity (EOQ) for Kona coffee beans?
b) What are the total annual holding costs of stock for Kona coffee beans?
c) What are the total annual ordering costs for Kona coffee beans?
d) Assume that management has specified that no more than a 1% risk during stockout is acceptable. What should the reorder point (ROP) be?
e) What is the safety stock needed to attain a 1% risk of stockout during lead time?
f) What is the annual holding cost of maintaining the level of safety stock needed to support a 1% risk?
g) If management specified that a 2% risk of stockout during lead time would be acceptable, would the safety stock holding costs decrease or increase?
Answer and Explanation:
Gourmet coffee shop
(a) d= 75 lbs/day 200 days per year
D= 15,000 lb/year
H= $3/lb/year
S= $16/order
EOQ= √(2*15,000*16)/3
=400 lb of beans
(b)Total annual holding cost =
Q/2 * H
= 400/2 * 3
= $600
(c)Total annual order cost
= D/Q * S
= 15,000/400 * 16
= $600
(d) LT= 4 days with σ = 15
Stockout risk = 1%
Z= 2.33
ROP = Lead time demand + SS, where SS= (Z)(σd*LT) and lead time demand = (d)(LT)
σd*LT= (√LT) * 15 = √4 * 15 = 30
ROP = 369.99
where ROP = (d)(LT) + SS
(e) SS= 69.99 from part (d)
(f) Annual safety stock holding cost = $209.97
(g)2% stockout level →Z= 2.054 SS= (Z) * (σdLT)
= 61.61
A- The Economic Order Quantity for Kona coffee beans is 400 pounds.
B- Total annual holding costs of stock for Kona coffee beans $600.
C- Total ordering cost for the Kona coffee beans is also $600.
D- Reorder point at 1% risk will be 369.9
E- This can be achieved with (D) as 70.
F- The safety stock's annual holding cost at 1% risk $209.97
G- The safety stock holding costs will increase if the risk of stock out is 2%.
The above calculations can be achieved with the form of calculations as shown below. For A[tex]\rm Economic\ Order\ Quantity= \sqrt \dfrac {2\ x\ \$15000\ x\ 16} {3} }\\\\\\\\\rm Economic\ Order\ Quantity=400\ pounds[/tex]For B [tex]\rm Total\ annual\ holding\ cost= \dfrac{400}{2}\ x\ 3 \\\\\\\rm Total\ annual\ holding\ cost= \$ 600[/tex]For C [tex]\rm Total\ annual\ ordering\ cost= \dfrac{15000}{400}\ x\ 16\\\\\\\\\rm Total\ annual\ ordering\ cost= \$ 600[/tex]For D [tex]\rm Reorder\ point\ = \sqrt{4\ x\ 15}\\\\\\\rm Reorder\ point\ = \$400- \$30\\\\\\\rm Reorder\ point\ = \$369.99[/tex]For F[tex]\rm Annual\ Safety\ Stock\ Holding\ Cost = \$209.97[/tex]For G [tex]\rm Safety\ Level = \$61.11[/tex]Hence, the solutions for all the queries have been given above by the use of calculations by applying the given values to the formulae.
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The following data pertains to Xena Corp.: Xena Corp. Total Assets $23,610 Interest-Bearing Debt (market value) $11,070 Average borrowing rate for debt 10.2% Common Equity: Book Value $ 6,150 Market Value $25,830 Marginal Income Tax Rate 37% Market Beta 1.73 Assuming that the risk-free rate is 4.5% and the market risk premium is 6.2%, calculate Xena's cost of equity capital using the capital asset pricing model. Select one: A. 15.2% B. 10.4% C. 13.4% D. 8.9%
Answer:
Option (A).
Explanation:
According to the scenario, computation of the given data are as follow:-
We can calculate the cost of equity capital by using following formula:-
Market Beta = 1.73
Risk free rate = 4.50% = 0.045
Market risk premium = 6.20% = 0.062
Cost of Equity Capital = (Market Risk Premium × Market Beta ) + Risk Free Rate
= (0.062 × 1.73) + 0.045
= 0.1073 + 0.045
= 0.1523 or 15.23%
In doing aggregate planning for a firm producing paint, the aggregate planners would most likely deal with: a. Gallons, quarts, pints, and all the different sizes to be produced b. Gallons of paint, but be concerned with the different colors to be produced c. All of the different colors targeted for different markets d. Just gallons of paint, without concern for the different colors and sizes e. All the different sizes and all the different colors by size
Answer:
D. Just gallons of paint, without concern for the different colors and sizes
Explanation:
Aggregate planning is explained to be an operational activity critical to the organization as it looks to balance long-term strategic planning with short term production success.
Thus annual and quarterly plans are broken down into labor, raw material, working capital, etc. requirements over a medium-range period (6 months to 18 months). This process of working out production requirements for a medium range is called aggregate planning.
Also it is noted that a complete information is required about available production facility and raw materials.
A solid demand forecast covering the medium-range period.
Parks Corporation is considering an investment proposal in which a working capital investment of $10,000 would be required. The investment would provide cash inflows of $2,000 per year for six years. The working capital would be released for use elsewhere when the project is completed.
If the company's discount rate is 10%, the investment's net present value is closest to (Ignore income taxes):
a) $1,290 b) $(1,290) c) $2,000 d) $4,350
Western Company is preparing a cash budget for June. The company has $12,000 cash at the beginning of June and anticipates $30,000 in cash receipts and $34,500 in cash disbursements during June. Western Company has an agreement with its bank to maintain a minimum cash balance of $10,000. As of May 31, the company owes $15,000 to the bank. To maintain the $10,000 required balance, during June the company must: Group of answer choices Borrow $4,500. Borrow $2,500. Borrow $10,000. Repay $7,500. Repay $2,500.
Answer:
Borrow $2,500.
Explanation:
This can be calculated as follows:
Details $
Beginning cash balance 12,000
Anticipated cash receipts 30,000
Anticipated cash disbursement (34,500)
Cash balance before financing 7,500
Amount to borrow 2,500
Ending/desired cash balance 10,000
Linda and Richard are married and file a joint return for 2019. During the year, Linda, who works as an accountant for a national airline, used $2,100 worth of free passes for travel on the airline; Richard used the same amount. Linda and Richard also used $850 worth of employee discount coupons for hotel rooms at the hotel chain that is also owned by the airline. Richard is employed at State University as an accounting clerk. Under a tuition reduction plan, Richard saved $4,000 in tuition fees during 2019. He is studying for a master's degree in business at night while still working full-time. Richard also had $30 worth of personal typing done by his administrative assistant at the University.
What is the amount of fringe benefits that should be included in Linda and Richard's gross income on their 2019 tax return?
Answer:
$4,850
Explanation:
the amount of fringe benefits that should be included in Linda and Richard's gross income on their 2019 tax return is $4,850
This was gotten by adding $850 worth of employee discount coupons for hotel rooms and $4,000 in tuition fees during 2019
$4,000 + $850
= $4,850
For each of the following characteristics, check which types of firm it describes: a monopoly firm, a monopolistically competitive firm, both, or neither.
A. Faces the entry of new firms selling similar products.
B. Produces at the minimum average total cost in the long run.
C. Equates marginal revenue and marginal cost.
D. Has marginal revenue less than price.
E. Faces a horizontal demand curve.
F. Earns economic profit in the long run.
Answer:
A. Faces the entry of new firms selling similar products.
A firm in monopolistic competition faces the entry of new firms selling similar products
B. Produces at the minimum average total cost in the long run.
A firm in perfect competition produces at the minimum average total cost in the long run
C. Equates marginal revenue and marginal cost.
Both a firm in monopolistic competition and a firm in perfect competition equate marginal revenue and marginal cost
D. Has marginal revenue less than price.
A firm in monopolistic competition has marginal revenue less than price
E. Faces a horizontal demand curve.
monopolistic competition firm must be operating on the elastic portion of its demand curve
F. Earns economic profit in the long run.
A monopoly firm earns economic profit in the long run
Major Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $130,000. The equipment will have an initial cost of $665,000 and have an 8-year life. The equipment has no salvage value. The hurdle rate is 8%. Ignore income taxes. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.)
a. What is the net present value?
b. What would the net present value be with a 12% hurdle rate? (Negative amounts should be indicated by a minus sign.)
c. Based on the NPV calculations, in what range would the equipment’s internal rate of return fall? (Round your answer to 2 decimal places.)
Answer:
a. $ 82, 063
b. - $ 19,206
c. 11.24%
Explanation:
Net Present Value is calculated by taking the Present Day (Discounted) value of all future Net Cash flows based on the company`s Cost of Capital and subtracting the Initial Cost of the Investment.
Using a Financial Calculation
a.
Cash flow Amount
Cf0 = ($665,000)
Cf1 = $130,000
Cf2 = $130,000
Cf3 = $130,000
Cf4 = $130,000
Cf5 = $130,000
Cf6 = $130,000
Cf7 = $130,000
Cf8 = $130,000
i = 8%
NPV = $ 82, 063
b.
Cash flow Amount
Cf0 = ($665,000)
Cf1 = $130,000
Cf2 = $130,000
Cf3 = $130,000
Cf4 = $130,000
Cf5 = $130,000
Cf6 = $130,000
Cf7 = $130,000
Cf8 = $130,000
i = 12%
NPV = - $ 19,206
c.
Internal Rate of Return = P + ((N-P)×p/(p+n))
= 8% + ((12%-8%)×$ 82, 063/($ 82, 063+ $ 19,206))
= 11.24%
Read the case below and answer the questions that follow.
You are attempting to achieve a positive and helpful tone to invite employees to the benefits fair. Your goal is to get as many employees to attend as possible. In this exercise, you will assume the role of a human resources (HR) specialist for your company. Each year, your company holds an open enrollment period during October. During this period, employees can make changes to various benefits, such as health insurance, dental insurance, life insurance, and retirement packages.As part of the open enrollment period, you hold a benefits fair. At this event, representatives for each of your approved insurance and retirement plan vendors are available. Also, representatives from your own office are there to answer questions. To attract employees to the event, you also invite several high-profile speakers to discuss health care and retirement planning.You are writing several messages to employees to invite them to the event. You will send these messages via email and as announcements on the corporate intranet. You expect that you can be particularly influential by posting to the benefits blog, which is one of the most widely accessed blogs on your corporate intranet.
Question:
1. You often find that employees choose a health care plan without carefully considering their options. In fact, sometimes employees realize they are spending too much for health care or that they lack health care options, and they end up blaming you for not informing them sufficiently of their options ahead of time. You want employees to attend the fair and take the time to carefully weigh their options. Which of the following statements is most likely to attract employees to the fair to do so?
Multiple Choice
O This presentation helps you choose which of the five health insurance options works best for your family.
O This presentation discusses the relative benefits and costs of each health care option.
O In this presentation, we provide you with the answers you need about the five health insurance options.
Answer:
C. In this presentation, we provide you with the answers you need about the five health insurance options.
Explanation:
It should be understood that when the statement above is adopted as the one to use for your post, it will be discovered that the employees will be attracted to the fair.
This is because, people always want to have the details of what to get involved with, before they start at all.
Therefore, when they are assured of having time to ask questions, then they will be attracted to attend.
Which scenario describes a job seeker using an online resource for a job search?
Answer:
A job seeker using an online resources for job search shows how
technology and the internet in particular has helped to simplify our everyday life. The use of online resources shows how much the internet has helped to reshape and revolutionize so many sectors of the society. This use of online resources in job search provides a much faster way of reaching and covering a wide range of available jobs within and far beyond your immediate geographical range. Before the internet, job searches were typically done manually, and the process consumed a lot of time and resources and was mostly limited a certain geographical range. Nowadays, someone in the US can easily apply for a job post on the internet all the way in Germany.
Answer:
these are the questions, how do you forget to put the questions??
Explanation:
A.
Tabitha visits a career expo that many architectural firms are attending.
B.
Samuel speaks to a former coworker to ask about job openings at his company.
C.
Pauline checks job listings on the career page of a company’s website.
D.
Jay registers with an employment agency to help him find jobs in engineering.
Jasmin purchased 100 shares of Pinkstey Corporation (publicly traded company) on January 1 of year 1 for $5,000. The FMV of the shares at the end of year 1 was $6,000. On January 1 year 4, Pinkstey Corporation declared a 2-for-1 stock split when the fair market value of the stock was $65 per share. On January 1 of year 5, Jasmin sold all of her Pinkstey Corporation stock when the fair market value was $40 per share. Which of the folowing statements is true? a. Jasmin reports $6,500 in gross income for the 2-for-1 stock split in year 4 b. Jasmin's basis in the Pinkstey Corporation stock at the end of year 4 is $65/ share. c. Jasmin has no taxable income for the Pinkstey Corporation stock in year 4 d. Jasmin owns 100 shares in Pinkstey Corporation stock at the end of year 4
Answer:
Option C=> Jasmin has no taxable income for the Pinkstey Corporation stock in year 4.
Explanation:
So, here are the main information given in the question above that is going help us on solving the question and they are;
(1)."Jasmin purchased 100 shares of Pinkstey Corporation (publicly traded company) on January 1 of year 1 for $5,000."
(2). ''The FMV of the shares at the end of year 1 was $6,000.''
(3). "On January 1 year 4, Pinkstey Corporation declared a 2-for-1 stock split when the fair market value of the stock was $65 per share."
(4)." On January 1 of year 5, Jasmin sold all of her Pinkstey Corporation stock when the fair market value was $40 per share."
So, in the statement (3) above where Pinkstey Corporation declared a 2-for-1 stock split, Jasmine will no longer receive income for a period of the 4th year.
Also, Jasmine now have 200 shares instead of the 100 shares originally purchased in statement (1) above in Pinkstey Corporation.
Answer:
Option C=> Jasmin has no taxable income for the Pinkstey Corporation stock in year 4.
Explanation:
Hope this helps!
Have a great day! :)
The form below shows the amounts that appear in the Earnings to Date column of the employees' earnings records for 10 full- and part-time workers in Unger Company. These amounts represent the cumulative earnings for each worker as of October 4, the company's last payday. The form also gives the gross amount of earnings to be paid each worker on the next payday, October 11.
In the state where Unger Company is located, the tax rates and bases are as follows: Tax on Employees: FICA—OASDI 6.2% on first $128,400 FICA—HI 1.45% on total earnings SUTA 0.5% on first $8,000 Tax on Employer: FICA—OASDI 6.2% on first $128,400 FICA—HI 1.45% on total earnings FUTA 0.6% on first $7,000 SUTA 1.8% on first $8,000 In the appropriate columns of the form shown below, do the following:
1. Compute the amount to be withheld from each employee's earnings on October 11 for (a) FICA—OASDI, (b) FICA—HI, and (c) SUTA, and determine the total employee taxes.
2. Record the portion of each employee's earnings that is taxable under FICA, FUTA, and SUTA, and calculate the total employer's payroll taxes on the October 11 payroll. If an amount box does not require an entry, leave it blank. If required, round your answers to the nearest cent. Enter the tax rates as decimals, carried out to four decimal places when required.
UNGER COMPANY Gross Taxes to Be Withheld from Employees' Earnings Under Employer Taxes: Portion of Employees' Earnings Taxable Under Earnings to Earnings FICA FICA Employee Date Oct. 11 OASDI HI SUTA OASDI HI FUTA SUTA
1. Weiser, Robert A. $126,815 $1,900 $ $ $ $ $ $ $
2. Stankard, Laurie C. 15,090 270
3. Grow, Joan L. 4,020 220
4. Rowe, Paul C. 8,175 300
5. McNamara, Joyce M. 7,470 170
6. O'Connor, Roger T. 124,740 1,780
7. Carson, Ronald B. 8,925 265
8. Kenny, Ginni C. 4,280 180
9. Devery, Virginia S. 57,035 565
10. Wilson, Joe W. 3,580 250
Total employee taxes $ $ $
Total taxable earnings $ $ $ $
Applicable tax rate (enter as decimals, not percentages)
Totals $ $ $ $
Total payroll taxes $
Answer:
I prepared and attached an excel spreadsheet because there is not enough room here. I rounded all numbers to the nearest dollar.
Explanation:
Mr. Rational has $27 that he plans to spend purchasing 5 units of good X (priced at $3 per unit) and 6 units of good Y (priced at $2 per unit). The marginal utility of the fifth unit of X is 30, and the marginal utility of the sixth unit of Y is 18. If Mr. Rational is a utility maximizer, he should: a. buy less of X and more of Y. b. buy more of X and less of Y. c. buy X and Y in the quantities indicated. d. buy less of X and even lesser than that of Y. e. not buy anything.
Answer:
Option A, buy less of X and more of Y is correct.
Explanation:
The amount that Mr. Rational is going to spend = $27
Quantity of good X = 5 units
Price of good X (Px) = $3 per unit
Marginal utility of 5th unit of X (MUx) = 30
Quantity of good Y = 6 units
Price of good Y (Py) = $2 per unit
Marginal utility of 6th unit of Y (MUy) = 18
[tex]Now \ find \ \frac{MUx}{Px} = \frac{30}{3} = 10 \\[/tex]
[tex]Now \ \frac{MUy}{Py} = \frac{18}{2} = 9[/tex]
[tex]Since \ the \ \frac{MUx}{Px} is \ greater \ than \ \frac{MUy}{Py}.[/tex]
So good x will be substituted for y in order to reach the consumer equilibrium.
[tex]\frac{MUx}{Px} = \frac{MUy}{Py}[/tex]
Thus, Option a. buy less of X and more of Y is correct.
Tullius Corporation has received a request for a special order of 8,000 units of product C64 for $50.00 each. The normal selling price of this product is $53.25 each, but the units would need to be modified slightly for the customer. The normal unit product cost of product C64 is computed as follows:
Direct materials $18.10
Direct labor 7.40
Variable manufacturing overhead 5.20
Fixed manufacturing overhead 4.80
Unit product cost $35.50
Direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like some modifications made to product C64 that would increase the variable costs by $5.00 per unit and that would require a one-time investment of $43,000 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order.
Required:
How much is the 'effect' (incremental net operating income) on the company's total net operating income through accepting the special order?
Answer:
Incremental operating income = $71,400
Explanation:
Unit variable cost = 18.10 + 7.4+ 5.20 + 5 = $35.7
Note that the $5 additional variable cost was necessitated by the special order , hence it was added
Sales from special order = ( 8,000× $50) 400,000
Variable cost ( 8,000 ×× $35.7 ( 285600 )
Cost of special machine (43,000)
Incremental operating income 71,400
Incremental operating income = $71,400
Note that the fixed costs were not considered in the analysis , this simply because they are not relevant to the special order decision.. They would be incurred either way, whether the special order is accepted or not
The Blue Company is the primary taxi company in the city of Maintown. It uses gasoline at the rate of 106,800 gallons per year. Because this is such a major cost, the company has made a special arrangement with the Amicable Petroleum Company to purchase a huge quantity of gasoline at a reduced price of $2.00 per gallon. The cost of arranging for each order, including placing the gasoline into storage, is $2,000. The cost of holding the gasoline in storage is estimated to be $0.24 per gallon per year.
Required:
a. Using MS Excel Solver, determine the optimal order quantity.
Answer:
462.169 gallons
Explanation:
Given that:
the annual demand of gasoline = 106800 gallons per year
Price = $2.00 per gallon
Order cost = $2,000
Holding cost = $0.24 per gallon per year
The objective here is to use Ms Excel solver to determine the optimal order quantity.
We will be attaching four diagrams showing the step-wise process for the determination of the optimal order quantity.
Firstly; we create a model for the given data
Then we ; use the excel formula which the description are shown in the second diagram attached
Finally;we use the solver parameter to obtain the optimal order quantity.
The optimal order quantity = 462.169 gallons
See the attachment below for better understanding.