Answer:
$3200
Explanation:
MC = Marginal Cost
MR = Marginal Revenue
p = 200 – 2q
The profit-maximizing membership fee is equal to the total surplus
So, Number of rounds played by joe,
P = MC = 40 = 200 - 2q
40 = 200 - 2q
q = 160/2 = 80
and, T.S = 1/2*(vertical intercept of demand curve - MC)*Quantiy of rounds
T.S = 1/2*(200-40)*80
= 6400
So, the maximum membership FEE (F) = $6400 .
If Firm Charge singe price , then it will provide rounds such MR = MC
TR = P*Q = (200 - 2Q)*Q
MR = dTR/dQ = 200 - 4Q
Equating MR = MC
200 - 4Q = 40
Q = 160/4 = 40
P = 200 - 2Q = 200 - 2*40 = 120
So, Profit if charge single price = TR - TC = PQ - MC*Q = (P-MC)*Q = (120-40)*40 = $3200
So, Increase in Profit = Membership fee - Profit if charge single price
= $6400 - $32000
= $3200
Portage Bay Enterprises has $ 1$1 million in excess cash, no debt, and is expected to have free cash flow of $ 10$10 million next year. Its FCF is then expected to grow at a rate of 5 %5% per year forever. If Portage Bay's equity cost of capital is 13 %13% and it has 66 million shares outstanding, what should be the price of Portage Bay stock?
Answer:
Value of a stock = $1.89
Explanation:
The value of a firm is the present value of the by the free cashflow discounted at the required rate of return
Value of the firm = FCF/(WACC- g)
FCF- free cash flow
WACC- Cost of capital = 13%
g- growth rate= 5%
= 10,000/(0.13-0.05)= 125,000,000
Value of a stock = Value of firm/No of shares
= $125,000,000/66,000,000 units
= $1.89
Suppose the marginal damage and marginal benefit curves in a pol- luted neighborhood are MD = P/3 and MB = 4 – P. Also, suppose that transactions costs are low, so that the neighborhood residents and the firm can bargain. We saw that in this case, the socially optimal level of pollution is achieved. Start by computing the socially optimal P. Then, for each of the following cases, compute the amount of money trans- ferred through the bargaining process, and indicate who pays whom (i.e., whether consumers pay the firm, or vice versa). Also, compute the gains to each party relative to the status quo (i.e., the starting point of the bargaining process).
(a) Residents have the right to clean air; firm is dominant in the bar- gaining process.
(b) Residents have the right to clean air; residents are dominant in the bargaining process.
(c) Firm has the right to pollute; firm is dominant in the bargaining process.
(d) Firm has the right to pollute;residents are dominant in the bargain- ing process.
Find the given attachments
Birch Company normally produces and sells 43,000 units of RG-6 each month. RG-6 is a small electrical relay used as a component part in the automotive industry. The selling price is $30 per unit, variable costs are $19 per unit, fixed manufacturing overhead costs total $155,000 per month, and fixed selling costs total $46,000 per monthEmployment-contract strikes in the companies that purchase the bulk of the RG-6 units have caused Birch Company’s sales to temporarily drop to only 14,000 units per month. Birch Company estimates that the strikes will last for two months, after which time sales of RG-6 should return to normal. Due to the current low level of sales, Birch Company is thinking about closing down its own plant during the strike, which would reduce its fixed manufacturing overhead costs by $60,000 per month and its fixed selling costs by 8%. Start-up costs at the end of the shutdown period would total $15,000. Because Birch Company uses Lean Production methods, no inventories are on hand.1 Assuming that the strikes continue for two months, what is the impact on income by closing the plant?2. At what level of sales (in units) for the two-month period should Birch Company be indifferent between closing the plant or keeping it open?
Answer:
a)No, the company should not close the plant; it should continue to operate at the reduced level of 28,000 units, because it would lead to a $199320 greater loss over the two-month period than if the company continues to operate. By closing down, the needs of these customers will not be met and they would move to another supplier
b) 9880 units
Explanation:
Contribution margin = selling price - variable cost = $30 - $19 = $11
Contribution margin lost = 14000 units / month * 2 months = 28000 units
Contribution margin lost by the plant closing = 28000 units * $11 = $308000
Fixed manufacturing overhead cost * number of months = $60,000 per month × 2 months = $120,000
Fixed selling cost = fixed selling costs total * 8% = $46000 * 0.08 = $3680
Costs avoided by closing the plant for two months = $120000 + $3680 = $123680
Net disadvantage before start up cost = Contribution margin lost by the plant closing - Costs avoided by closing the plant for two months = $308000 - $123680 = $184320
Start up cost = $15000
Closing plant disadvantage = Net disadvantage before start up cost + Start up cos = $184320 + $15000 = $199320
No, the company should not close the plant; it should continue to operate at the reduced level of 28,000 units, because it would lead to a $199320 greater loss over the two-month period than if the company continues to operate. By closing down the 28000 units produced would be lost, the needs of these customers will not be met and they would move to another supplier
b) Costs avoided by closing the plant for two months = $123680
less Start up cost = $15000
Net avoidable cost = $123680 - $15000 = $108680
Net avoidable cost/ Contribution margin per unit = $108680 / $11 = 9880 units
Prepare Journal Entries in a Purchases Journal Guardian Services Inc. had the following transactions during the month of April: Apr. 4. Purchased office supplies from Officemate Inc. on account, $415. Apr. 9. Purchased office equipment on account from Tek Village Inc., $2,460. Apr. 16. Purchased office supplies from Officemate Inc. on account, $185. Apr. 19. Purchased office supplies from Paper-to-Go Inc. on account, $195. Apr. 27. Paid invoice on April 4 purchase from Officemate Inc. a. Prepare a purchases journal to record the April purchase transactions for Guardian Services Inc. If an amount box does not require an entry, leave it blank. If no entry is required in "Other Accounts Dr." then select "No entry required".
Answer:
Apr. 4.
Office Supplies $415 (debit)
Accounts Payable - Officemate Inc. $415 (credit)
Apr. 9
Office Equipment $2,460 (debit)
Accounts Payable - Tek Village Inc. $2,460 (credit)
Apr. 16.
Office Supplies $185 (debit)
Accounts Payable - Officemate Inc. $185 (credit)
Apr. 19
Office Supplies $195 (debit)
Accounts Payable - Paper-to-Go Inc. $195 (credit)
Apr. 27
Accounts Payable - Officemate Inc. $415 (debit)
Cash $415 (credit)
Explanation:
Recognise a Liability - Accounts Payable for each purchase on Account.
De-recognise the liability when amount is settled.
On January 1, 2016, VKI Corporation awarded restricted stock units (RSUs) representing 11 million of its $1 par common shares to key personnel, subject to forfeiture if employment is terminated within three years. After the recipients of the RSUs satisfy the vesting requirement, the company will distribute the shares. On the grant date, the shares had a market price of $7.20 per share.
Required:
1. Determine the total compensation cost pertaining to the RSUs. (Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).)
2. to 6. Prepare the appropriate journal entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).)
Answer:
1.$79,200,000
2.No entry is made on the grant date
3 - 5
Dr Compensation expense 264
Cr Paid-in capital—restricted stock 264
6.
Dr Paid-in capital—restricted stock 792
Cr Common stock 11
Cr Paid-in capital—excess of par (remainder) 781
Explanation:
1.Total compensation cost pertaining to the RSUs
Restricted stock units * Market price
11,000,000 *7.20
=$79,200,000
2.
January 1, 2016
No entry is made on the grant date
3 - 5
December 31, 2016, 2017 and 2018. (Note: The entry is the same for years 2016 - 2018.)
Dr Compensation expense 264
($792 million ÷ 3 years)
Cr Paid-in capital—restricted stock 264
6.
Dr Paid-in capital—restricted stock 792
Cr Common stock 11
(11 million shares x $1 par)
Cr Paid-in capital—excess of par (remainder) 781
Portions of the financial statements for Horizon Telecom are provided below. HORIZON TELECOM Income Statement For the Year Ended December 31, 2018 Revenues $616,000 Expenses: Cost of goods sold $366,000 Operating expenses 118,000 Depreciation expense 25,000 Income tax expense 53,500 Total expenses 562,500 Net Income $ 53,500 HORIZON TELECOM Selected Balance Sheet Data December 31, 2018 Increase in accounts receivable $ 5,300 Increase in inventory 11,300 Decrease in prepaid rent 9,900 Increase in operating expenses payable 5,000 Decrease in accounts payable 7,400 Increase in income tax payable 21,900 Prepare the operating activities section of the statement of cash flows for Horizon Telecom using the indirect method. (Amounts to be deducted and negative values should be indicated by minus sign.)
Answer:
Cash flow from Operating Activities
Net Income $ 53,500
Adjust for Non-Cash items :
Depreciation expense 25,000
Adjust for Working Capital items :
Increase in accounts receivable ($ 5,300)
Increase in inventory ($11,300)
Decrease in prepaid rent $9,900
Increase in operating expenses payable$5,000
Decrease in accounts payable ($7,400)
Increase in income tax payable $21,900
Net Cash from Operating Activities $91,300
Explanation:
Prepare Operating activities section of the statement of cash flows for Horizon Telecom as above.
the money supply may expand by less than the amount predicted by the money multiplier if :
Two 1000 dollar face value bonds are both redeemable at par, with the first having a redemption date 3 years prior to the redemption date of the second. Both are bought to yield 12 percent convertible semiannually. The first bond sells for 813.04 dollars and pays coupons at 8.3 precent convertible semiannually. The second bond pays coupons at 5.3 percent per half year. What is the price of the second bond
Answer:
$ 915.71
Explanation:
In order to determine the second bond price we need to determine the number of years to maturity of the first bond using nper formula in excel.
=nper(rate,pmt.-pv,fv)
rate is the semiannual interest rate of 6% (12%*6/12)
pmt is the semiannual interest=$1000*8.3%*6/12=$41.50
pv is the current price at $813.04
fv is the face value of $1000
=nper(6%,41.50,-813.04,1000)= 16.00
The years to maturity=16/2=8 years
The years to maturity of second bond=8+3=11 years
price of second bond=-pv(rate,nper,pmt,fv)
rate is 6%
nper is 11 years multiplied by 2= 22
pmt =5.3%*$1000=$53
fv is $1000
=-pv(6%,22,53,1000)=$915.71
Answer:
$915.71
Explanation:
Price of the bond is determined by calculating the present value of all cash flows.
We will use following formula in Excel
=nper(rate,pmt.-pv,fv)
rate = Interest rate = 12% x 6/12 = 6%
pmt = Coupon Payment=$1000 x 8.3% x 6/12=$41.50
pv = Price of first coupon = $813.04
fv = Face value = $1000
Placinf all the values in the formula
=nper(6%,41.50,-813.04,1000)= 16.00
Years to maturity=16/2=8 years
The years to maturity of second bond=8+3=11 years
price of second bond=-pv(rate,nper,pmt,fv)
rate = 6%
nper = 11 years x 2= 22
pmt =5.3% x $1000=$53
fv = $1000
Placing values in the formula
=-pv(6%,22,53,1000)=$915.71
Suppose that a monopoly firm finds that its MR is $68 for the first unit sold each day, $67 for the second unit sold each day, $66 for the third unit sold each day, and so on. Further suppose that the first worker hired produces 5 units per day, the second 4 units per day, the third 3 units per day, and so on.
Required:
a. What is the firm’s MRP for each of the first five workers?
b. Suppose that the monopolist is subjected to rate regulation and the regulator stipulates that it must charge exactly $58 per unit for all units sold. At that price, what is the firm’s MRP for each of the first five workers?
c. If the daily wage paid to workers is $242 per day, how many workers will the unregulated monopoly demand?
d. If the daily wage paid to workers falls to $113 per day, how many workers will the unregulated monopoly demand?
e. Comparing your answers to parts c and d, does regulating a monopoly’s output price always increase its demand for resources?
Answer:
a. What is the firm's MRP for each of the first five workers?
Worker 1 = $325Worker 2 = $242Worker 3 = $171Worker 4 = $109Worker 5 = $53The marginal revenue product = units produced x units price
b. Suppose that the monopolist is subjected to rate regulation and the regulator stipulates that it must charge exactly $58 per unit for all units sold. At that price, what is the firm's MRP for each of the first five workers?
Worker 1 = $290Worker 2 = $232Worker 3 = $174Worker 4 = $116Worker 5 = $58c. If the daily wage paid to workers is $242 per day, how many workers will the unregulated monopoly demand?
2 workers only, since their MRP ≥ $242 per dayd. If the daily wage paid to workers falls to $113 per day, how many workers will the unregulated monopoly demand?
3 workers only, since their MRP ≥ $113 per daye. Comparing your answers to parts c and d, does regulating a monopoly's output price always increase its demand for resources?
No it doesn't, since regulation always affects markets. Markets need regulation, but that doesn't mean that the effects of regulation are always positive for everyone involved. In this case, regulation is probably good for customers, but bad for the workers employed and the business itself.Explanation:
unit sold MR worker
1 $67 1
2 $66 1
3 $65 1
4 $64 1
5 $63 1
6 $62 2
7 $61 2
8 $60 2
9 $59 2
10 $58 3
11 $57 3
12 $56 3
13 $55 4
14 $54 4
15 $53 5
The U.S. Treasury has Kleine Toymakers is introducing a new line of robotic toys, which it expects to grow their earnings at a much faster rate than normal over the next three years. After paying a dividend of $2.00 last year, it does not expect to pay a dividend for the next three years. After that Kleine plans to pay a dividend of $4.00 in year 4 and then increase the dividend at a rate of 10 percent in years 5 and 6. What is the present value of the dividends to be paid out over the next six years if the required rate of return is 15 percent
Answer:
The present value of the dividends to be paid out over the next six years if the required rate of return is 15 percent is $6.57
Explanation:
Solution:
Given that
The present value =∑ ⁿ t=1 cf/ (1 +r)t
where cf= cash flow
r =the required rate of return
t = the number of years
Now
The present value will be:
cf₁/(1+r)^1 + cf₂/(1 +)^2 + cf₃/(1+r)3 + cf₄/(1 +r)^4) + cf₅/(1 +r)^5 + cf₆/(1+r)^6
Hence,
cf₁, cf₂ cf₃ = 0 as the firm does not expect to pay dividend in the next three years
Note: Kindly find an attached document of the part of the solution to this given question
Rabah has just been hired as manager of a health spa. The owner has commissioned a market study that estimates the per person (average consumer's) monthly demand for visiting the health spa to be q = 10 - 1/2p. The cost of operating is C(q) = 2q, where q is the number of visits. The owner has been charging a $64 per month membership fee and a $4 per-visit fee. Part of Rabah's salary is 10% of the monthly profits.
1. What per-visit fee p and per month membership fee F should Rabah suggest from the following options?
Select one:
a. p = 2, F = 80
b. p = 3, F = 91.
c. p = 3, F = 90
d. p = 2, F = 81
Answer:
B.
Explanation:
It should be noted that the salary of Rabah depends on the profit the company made after amount. Therefore, for Rabah to have or collect a high salary at the end of the month, then the amount to be charged per visit and the membership fee must be increased. So, when they are on the high side or increased, then Rabah is assured of a good salary at the end of the month.
Calculate basic EPS, and explain the EPS effect of convertible preferred Thrifty Co. reported net income of $191,150 for its fiscal year ended January 31, 2017. At the beginning of that year, 50,000 shares of common stock were outstanding. On October 31, 2016, an additional 15,000 shares were issued. No other changes in common shares outstanding occurred during the year. Also during the year, the company paid the annual dividend on the 20,000 shares of 6%, $50 par value preferred stock that were outstanding the entire year. Required: a. Calculate basic earnings per share of common stock for year ended January 31, 2017. b. If Thrifty Co.’s preferred stock were convertible into common stock, what additional calculation would be required?
Answer:
a. The basic earnings per share of common stock for year ended January 31, 2017 is $3.56 per share
b. If Thrifty Co.’s preferred stock were convertible into common stock, it would be required to calculate Dluted EPS
Explanation:
a. In order to calculate the basic earnings per share of common stock for year ended January 31, 2017 we would have to calculate the following formula:
BEPS = Net income available to common stockholders / Weighted Avg. no. of common stock
Net income available to common stockholders=$191,150
Weighted Avg. no. of common stock = 50,000 + (15,000x 3/12)
Weighted Avg. no. of common stock= 53750
Therefore, BEPS = $191,150 / 53,750
BEPS =$3.56 per share
The basic earnings per share of common stock for year ended January 31, 2017 is $3.56 per share
b. If Thrifty Co.’s preferred stock were convertible into common stock, it would be required to calculate Dluted EPS
Yvette is training for a triathlon, a timed race that combines swimming, biking, and running. Consider the following sentence: Because her pool sessions are helping her swim more quickly, Yvette plans to reduce by 1 hour per week the time she spends training on the bike and increase by 1 hour the time she spends in the swimming pool; however, her husband says that she should stop doing any biking and running and spend all 20 hours per week in the pool.
Which basic principle of individual choice does Yvette's plan illustrate that her husband's advice does not?
a. People usually exploit opportunities to make themselves better off.
b. Resources are scarce.
c. Many decisions are made on the margin.
d. All costs are opportunity costs.
Answer:
The correct answer is the option D: All costs are opportunity costs.
Explanation:
To begin with, the fact that Yvette is looking forward to reduce only one hour of her training on the bike in order to add one hour to her training on the pool and later her husband says that she should use all her hours for the training in the pool is showing a situation where her husband's advice does not illustrate a basic principle of individuals choices that is that all the costs are opportunity costs and therefore that if she decides to do that then she would be sacrifying the time for the other trainings and that would not benefit her. So that is why she must choose to sacrifice time in one training to do another and so on.
The quality assurance manager is assessing the capability of a process that puts pressurized grease in an aerosol can. The design specifications call for an average of 60 pounds per square inch of pressure in each can, with an upper specification limit of 65 psi and a lower specification limit of 55 psi. A sample is taken from production and it is found that the cans average 61 psi, with a standard deviation of 2 psi. Also, the process will stop if the process starts making cans that are more than three standard deviations above or below the average. What is the capability index of this production process?
Answer:
A sample is taken from production and it is found that the cans average 61 psi with a standard deviation of 2 psi.
Explanation:
After the checks of the QC manager, it is deduced that a sample is been taken from the production and it is also found that the kergs average 61 psi woth a standard deviation of 2 psi.
Hydraulic fittings are available in threaded, thread-forming, rivet and drive styles. They are available in different angled configurations and a wide variety of extension lengths to allow you to position the fitting for easy access with a grease gun on different types of equipment.
Another factor to consider is the type of grease fittings used in the facility. Most fittings have a ball check in the head of the fitting, which prevents dirt from getting to the bearing. The spherical contour of the fitting head provides a ball-and-socket joint between the fitting and the hydraulic coupler of the grease gun. The most common fitting is the hydraulic fitting, available in standard and metric sizes.
Bryan Dobbs, Director of Marketing at Sarga Inc. has received multiple complaints about Davy Siegler over the past two months. Apparently, he spends his day surfing the net, passes all his own work on to subordinates, and disrupts those around him by dragging them over to view various videos, jokes, and timewaster findings online. Dobbs sets up a meeting with the intention of discovering what issues are causing Siegler's clear lack of motivation and poor production. During the meeting, Siegler is passive-aggressive and displays motivation and resentment issues. He recently received an "above average" performance appraisal but no pay increase.
This activity is important because it allows students to better understand cyberloafing’s relationship to job satisfaction, and then provides an opportunity for them to apply pertinent theory in order to resolve the scenario presented in the video.
1. Davy’s behavior on the job is related to all of the following, EXCEPT
A. counterproductive work behavior.
B. stress.
C. inequity.
D. organizational citizenship behavior.
Answer:
D. organizational citizenship behavior.
Explanation:
In this scenario exemplified in the question, it can be said that Davy has all work behaviors except the behavior of organizational citizenship.
This behavior can be described as one that is not mandatory as part of the functional requirements of a job position, but an employee who presents organizational citizenship helps the company to promote a culture favorable to the maintenance of ethics and the development and performance of the organization as one all.
Any informal action by the worker that benefits the organization is part of the behavior of organizational citizenship. Some of these dimensions of behavior are altruism, loyalty, conscience, self-development, obedience, etc.
These behaviors are capable of promoting the well-being of the employee and the entire organization.
When actual output exceeds potential, firms have an easy time keeping production in line with the high demand. Firms therefore lower their prices by more than the usual amount in an attempt to cover increased production costs. When actual output falls below potential, firms easily keep production in line with the high demand. Firms therefore raise their prices by more than the usual amount in an attempt to cover increased production costs. When actual output exceeds potential, firms struggle to keep production in line with the high demand. Firms therefore raise their prices by more than the usual amount in an attempt to cover increased production costs. When actual output exceeds potential, firms struggle to keep production in line with the high demand. Firms therefore lower their prices with decreased production costs.
A. True
B. False
Answer: When actual output exceeds potential
Firms raise their prices by more than the usual amount in an attempt to cover increased production costs.
Explanation: The price level rises because employers have to raise wage rates to entice more people into the labor market and employers have to pay more for other inputs that become more expensive to produce.
Pearle Corporation makes automotive engines. For the most recent month, budgeted production was 3,300 engines. The standard power cost is $9.20 per machine-hour. The company's standards indicate that each engine requires 2.1 machine-hours. Actual production was 3,400 engines. Actual machine-hours were 7,160 machine-hours. Actual power cost totaled $61,815.
Required:
a) Determine the rate and efficiency variances for the variable overhead item power cost and indicate whether those variances are unfavorable or favorable. (Input all amounts as positive values.)
Answer:
Rate variance = $4057 Favorable
Efficiency variance = $184 unfavorable
Explanation:
Rate variance $
7,160 hours should have cost (7,160 × $9.20) 65872
bur did cost (actual cost) 61,815
Rate variance 4057 Favorable
Efficiency variance
3400 units should have taken (3,400 × 2.1 hours) 7140
but did take 7,160
Efiicienct=y varince (hours) 20 unfavorable
standard hour ×$9.20
Efficiency variance $184 unfavorable
Rate variance = $4057 Favorable
Efficiency variance = $184 unfavorable
Most open market operations are ______ and are aimed at maintaining the economic status quo. During the______, however,______ targeted open market operations were used to encourage economic growth. These actions were dubbed "_______." The first round of this practice focused primarily on the________ market.
Answer:
routine; great recession; narrowly; quantitative easing; housing
Explanation:
An open market operation is sale and purchase of government securities to control the money supply and interest rates and to ensure regulation of the supply of money in the economy. Such money can be provided as loan to businesses and consumers.
Most open market operations are routine and are aimed at maintaining the economic status quo. During the great recession, however, narrowly targeted open market operations were used to encourage economic growth. These actions were dubbed "quantitative easing." The first round of this practice focused primarily on the housing market.
Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement, which follows:
Sales $ 1,604,000
Variable expenses 663,400
Contribution margin 940,600
Fixed expenses 1,035,000
Net operating income (loss) $ (94,400)
In an effort to isolate the problem, the president has asked for an income statement segmented by division. Accordingly, the Accounting Department has developed the following information:
Division East Central West
Sales $ 394,000 $ 630,000 $ 580,000
Variable expenses as a percentage of sales 50 % 28 % 50 %
Traceable fixed expenses $ 278,000 $ 333,000 $ 210,000
Required:
1. Prepare a contribution format income statement segmented by divisions, as desired by the president.
Answer and Explanation:
The Preparation of contribution format income statement is shown below:-
Wingate Company
Contribution format income statement
Particulars Total East Central West
Sales $1,604,000 $394,000 $630,000 $580,000
Variable
Variable expenses as a
percentage of sales 50% 28% 50%
expenses $663,400 $197,000 $176,400 $290,000
Contribution
margin $940,600 $197,000 $453,600 $290,000
Traceable Fixed
expenses $821,000 $278,000 $333,000 $210,000
Segment
margin $119,600 ($81,000) $120,600 $80,000
Common Fixed
expenses $214,000
($1,035,000 - $821,000)
Net operating
income (loss) ($94,400)
The contribution margin income statement is the statement in which the net operating income or loss could be find out by deducting the variable cost and the fixed cost from the sales revenue
Answer:
The answer is "loss of $ 944,000".
Explanation:
Please find the attachment for the solution.
investing is best for
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You are considering replacing your aging propane furnace for a natural gas model. The propane model originally cost $2,200, will last 6 more years, and will have no salvage value. The gas model costs $2,200 and offers a $400 trade-in on the old furnace. It lasts 13 years and can be salvaged for $500 at the end of year 13. Annual fuel costs are $800 for the propane furnace and $600 for the gas furnace. The real interest rate is 9% per year. Using cash-flow replacement and annual worth analysis, should the propane furnace be replaced with the gas model?
Answer:
The information is not complete (we do not know the useful life of the propane model), but the difference in costs between one project and the other is two large. The NPV of the savings for the gas model almost pays for the initial investment, plus the present value of the costs of using the gas model are much lower for future equivalent projects, we can assume that replacing the propane furnace with the gas model is a good investment.
We cannot determine exactly by how much the actual worth of the costs of the gas model are lower than the costs of the propane model, but there is no doubt that they are much lower. The only way that the propane model would have lower actual costs would that its useful life is much longer.
Explanation:
use propane model use gas model
initial investment $0 $1,800
operating costs $800 $600
useful life 6 years 13 years
present value of the costs for first product life cycle:
$3,559 (6 years) $6,129 (13 years)
Since the useful lives of the alternatives are not the same, we must find a common denominator for the useful life of the alternatives. Here we have a problem because we are not given the information.
But we can assume that the useful life of a propane furnace is also 13 years:
use propane model use gas model
initial investment $2,200 $2,200
operating costs $800 $600
useful life 13 years 13 years
residual value $0 $500
present value of total costs per life cycle:
$8,190 $6,529
Now we need to determine the NPV of the money saved by using gas propane = -$140 (-$1,800, 9%, $200 saved during 12 periods and $700 received at last period), so basically the gas model almost pays for itself with the money it saves.
Soccer Wholesale purchased land and a warehouse for $990,000. In addition to the purchase price, Soccer Wholesale makes the following expenditures related to the acquisition: broker's commission, $49,600; title insurance, $2,300; and miscellaneous closing costs, $6,900. The warehouse is immediately demolished at a cost of $75,300 in anticipation of building a new warehouse.
Determine the amount Soccer Wholesale should record as the cost of the land.
Answer:
Cost of land= $1,124,100
Explanation:
According to International accounting standards(IAS) 16 ,The cost of land includes purchase cost plus all other costs necessary to bring and make it ready for the intended use.
These costs include purchase cost, fees and commission associated with the purchase transaction.
Further more, included in the historical cost are the net demolition cost of old structure to prepare the land for use. Net cost here means cost of demolition less any incidental proceed from the old structure.
However, remember that land is not depreciated because it has an infinite life span.
So using the historical cost principle the cost of the land
Cost of land = 990,000 + 49,600 +2300 + 6, 900 + 75,300= 1,124,100.00
Cost of land= $1,124,100
Valorous Corporation will pay a dividend of $1.80 per share at this year's end and a dividend of 2.40 per share at the end of next year. It is expected that the price of Valorous' stock will be 44 per share after two years. If Valorous has an equity cost of capital of 8%, what is the maximum price that a prudent investor would be willing to pay for a share of Valorous stock today? A. A) $39.27 B. B) $40.22 C. C) $41.45 D. D) $42.40
Answer:
C) $41.45
Explanation:
Valorous Corporation
Using a financial calculator
CF0 = 0
CF1 = 1.8
CF2 = (44 + 2.4) = 46.4
Hence calculate NPV at I = 8%,
=$41.45.
Therefore the maximum price that a prudent investor would be willing to pay for a share of Valorous stock today will be
$41.45
The Brite Beverage Company bottles soft drinks into aluminum cans. The manufacturing process consists of three activities:
Mixing: water, sugar, and beverage concentrate are mixed.
Filling: mixed beverage is filled into 12-oz. cans.
Packaging: properly filled cans are boxed into cardboard "fridge packs."
The activity costs associated with these activities for the period are as follows:
Mixing $216,000
Filling 168,000
Packaging 96,000
Total $480,000
The activity costs do not include materials costs, which are ignored for this analysis. Each can is expected to contain 12 ounces of beverage. Thus, after being filled, each can is automatically weighed. If a can is too light, it is rejected, or "kicked," from the filling line prior to being packaged. The primary cause of kicks is heat expansion. With heat expansion, the beverage overflows during filling, resulting in underweight cans. This process begins by mixing and filling 6,300,000 cans during the period, of which only 6,000,000 cans are actually packaged. Three hundred thousand cans are rejected due to underweight kicks. A process improvement team has determined that cooling the cans prior to filling them will reduce the amount of overflows due to expansion. After this improvement, the number of kicks is expected to decline from 300,000 cans to 63,000 cans, thus increasing the number of filled cans to 6,237,000 [6,000,000 + (300,000 â 63,000)].
Required:
a. Determine the total activity cost per packaged can under present operations. Round to the nearest cent.
b. Determine the amount of increased packaging activity costs from the expected improvements.
c. Determine the expected total activity cost per packaged can after improvements. Round to two decimal places.
Answer:
$0.008
$3,792
$0.078
Explanation:
As per the data given in the question,
a)
Total activity cost per packaged can under present operations = Total activity cost under present operations ÷ total cans packaged
= $480,000 ÷ 6,000,000
= $0.08 per can
b)
Current packaging cost = $96,000
Packaging cost per bottle = Current packaging cost ÷ total cans packaged
= $96,000 ÷ 6,000,000
= $0.016 per bottle
Fr 6,237,000 bottles,
Total packaging cost = total bottle × cost per bottle
= 6,237,000 × $0.016
= $99,792
Therefore, Amount of increased packaging activity costs from the expected improvements = total packaging cost - current packaging cost
= $99,792 - $96,000
= $3,792
c)
Total activity cost = mixing cost + filling cost + packaging cost
= $216,000 + $168,000 + $99,792
= $483,972
Hence, Expected total activity cost per packaged can after improvements = Total activity cost ÷ no. of bottles
= $483,972 ÷ 6,237,000
= $0.078
We simply applied the above formulas
Pharoah Company compiled the following financial information as of December 31, 2022:
Service revenue $1171000
Common stock 233000
Equipment 319000
Salaries and wages expense 390000
Rent expense 97500
Depreciation expense 487500
Cash 276000
Dividends 83000
Supplies 39000
Accounts payable 155000
Accounts receivable 110000
Retained earnings, 1/1/22 567000
Pharoah's total assets at December 31, 2022 are: _________.
Answer: $913000
Explanation:
The net income must be calculated first. This will be:
Net income = Service revenue – (Salaries + Rent + Depreciation)
= 1171000 - (390000+97500+487500)
= 1171000 - 975000
= $196000
Now, the retained earnings has to be calculated. This will be:
Retained earnings (31/12/2022) = Beginning + Net income – Dividends
= 567000+196000-83000
= $680000
Now, the tockholders’ equity will be:
Stockholders’ equity= Common stock+Retained earnings(31/12/2022)
= $233000+$680000
= $913000
basic similarity and different between BAUM, UNIDO, DEPSA project life cycle
Answer:
BAUM, UNIDO, and DEPSA all refer to types of project development cycles.
A. The BAUM project lifecycle refers to the World Banks' project development cycle as described by Warren Baum.
The BAUM project life cycle features 6 stages namely:
identification of opportunity preparation for the project appraisal of the project negotiations related to the project implementation and supervision of the project and ex-post evaluationB. UNIDO - The UNIDO model features three major stages which are also broken down into various steps.
Pre-investment phase
This phase is further divided into:
A study of the opportunity presented. This has to do with identifying ideas to be invested in. Pre-feasibility study. This stage involves the formulation, and selection of project alternatives) Feasibility study. When the project is selected, then it is tested to economic feasibility. Submission of report on the evaluation
2. Investment phase
This stage is further broken down into:
Project design stage: At this stage, the criteria for success, and key deliverables are spelt out. Construction stage (For engineering or building projects) Pre-production marketing stage Training of staff Kick-off stage3. Operational phase
This is also broken down into:
Replacement of equipment due to wear and tear or upgrade to better technologies
Development, invasion or liquidation states.
C. DEPSA stands for "Development Project Studies Authority".
This variant of the Project Lifecycle also consists of three major stages. They are:
Pre-investment phase Investment and Operation
The DEPSA stage is very similar to the UNIDO project life cycle. Both are defined according to an Investment Cycle paradigm and that's the reason why you have pre-investment, investment and operations phase for both methodologies.
Whilst the UNIDO model is more 'universal' in that it speaks to a wide range of businesses including engineering projects, DEPSA seems a little skewed towards engineering projects.
This is evident in the terminologies used in the investment phases. With DEPSA you would notice terms like 'detailed engineering design'
'construction', and 'erection'. The UNIDO the investment phase contains engineering terms but also speaks to 'marketing' and 'training'
While the BAUM project lifecycle contains all the basic stages in the DEPSA and UNIDO life cycles, it holds a universal outlook and seems applicable to both business and engineering projects.
Cheers!
The basic similarities and differences between the BAUM, UNIDO, DEPSA project life cycles are shown below:
The basic similarities between them all is that:
They are all project development cyclesThe basic differences between them is that:
They develop their respective programs in different phases.With this in mind, we know that a project development cycle has to do with the ways in which potential opportunities are identified and the various steps which a project manager has to take in order to take advantage of the project and make it a reality.
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You have been engaged to review the financial statements of Flounder Corporation. In the course of your examination, you conclude that the bookkeeper hired during the current year is not doing a good job. You notice a number of irregularities as follows.
1. Year-end wages payable of $3,410 were not recorded because the bookkeeper thought that "they were immaterial."
2. Accrued vacation pay for the year of $30,000 was not recorded because the bookkeeper "never heard that you had to do it."
3. Insurance for a 12-month period purchased on November 1 of this year was charged to insurance expense in the amount of $2,868 because "the amount of the check is about the same every year."
4. Reported sales revenue for the year is $1,928,140. This includes all sales taxes collected for the year. The sales tax rate is 6%. Because the sales tax is forwarded to the state’s Department of Revenue, the Sales Tax Expense account is debited. The bookkeeper thought that "the sales tax is a selling expense." At the end of the current year, the balance in the Sales Tax Expense account is $94,140.
Prepare the necessary correcting entries, assuming that Headland uses a calendar-year basis.
Answer:
Flounder Corporation
Journal Correcting Entries:
1. Debit Wages & Salaries Account $3,410
Credit Wages & Salaries Payable $3,410
To accrue unpaid wages.
2. Debit Wages $ Salaries Account $30,000
Credit Wages & Salaries Payable $30,000
To record vacation pay for the year.
3. Debit Insurance Prepaid $2,390
Credit Insurance Account $2,390
To account for Insurance Prepaid
4. Debit Sales Tax Expense $109,140
Credit Sales Tax Payable $109,140
To record 6% sales tax on $1,819,000
5. Debit Sales Tax Payable $94,140
Credit Sales Tax Expense $94,140
To record sales tax paid.
Explanation:
1. In accordance with the accrual concept and the matching principle of the US Generally Accepted Accounting Principles, all wages payable must be accrued. This ensures that expenses are matched to the period's revenue.
2. As in 1, all accrued vacation pay must be recorded.
3. Prepaid insurance must be accrued so that only the period's expense is recognized against the period's income.
4. The Sales Tax is calculated as follows:
Sales Revenue, including sales taxes divided by 106% to give the sales revenue figure. Then 6% is applied on sales revenue figure to get the Sales Taxes for the year.
Sales Revenue = $1,928,140/106% = $1,819,000
Sales Taxes = 6% of $1,819,000 = $109,140
Answer:
Explanation:
Journal Entry
Date Particulars Dr. Amt. Cr. Amt.
1 Salaries & Wages Expenses 3,410.00
Salaries & Wages Payable 3,410.00
2 Salaries & Wages Expenses 30,000.00
Salaries & Wages Payable 30,000.00
3 Prepaid Insurance 2,390.00 $2,868X 10/12
Insurance Expense 2,390.00 $2,868 X 10/12
4-1 Sales Revenue 723,052.5.00 $1,928,140X 6/106
Sales Tax Payable 723,052.5 .00 $1,928,140 X 6/106
4-2 Sales Tax Payable $94,140
Sales Tax Expense $94,140
If the price of a kayak increases, _______.
A. sellers offer more kayaks for sale
B. the supply of kayaks increases
C. sellers offer fewer kayaks for sale
D. the supply of kayaks decreases.
Answer:
A. sellers offer more kayaks for sale
Explanation:
According to the law of supply , the higher the price, the higher the quantity supplied and the lower the price, the lower the quantity supplied.
If the price of kayaks increases, all things being equal the quantity of kayaks supplied increases.
I hope my answer helps you
Answer:
A is the correct answer.
Explanation:
the law of supply states that when price gets higher or increases, then there would be a corresponding increase in the quantity supplied and when the price gets lower or decreases, so does the quantity supplied.
Following this law, If the price of kayaks increases, then the quantity of kayaks supplied would also increase.
Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows:
Direct materials: 4 pounds at $9 per pound $ 36
Direct labor: 3 hours at $12 per hour 36
Variable overhead: 3 hours at $8 per hour 24
Total standard cost per unit $ 96
The planning budget for March was based on producing and selling 28,000 units. However, during March the company actually produced and sold 33,000 units and incurred the following costs:
a.
Purchased 165,000 pounds of raw materials at a cost of $7.20 per pound. All of this material was used in production.
b.
Direct laborers worked 58,000 hours at a rate of $13 per hour.
c.
Total variable manufacturing overhead for the month was $729,060.
1. What raw materials cost would be included in the company’s planning budget for March?
2. What raw materials cost would be included in the company’s flexible budget for March?
3.
What is the materials price variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.).)
4.
What is the materials quantity variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.).)
5.
If Preble had purchased 173,000 pounds of materials at $7.20 per pound and used 165,000 pounds in production, what would be the materials price variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Do not round intermediate calculations.)
6.
If Preble had purchased 173,000 pounds of materials at $7.20 per pound and used 165,000 pounds in production, what would be the materials quantity variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Do not round intermediate calculations.)
7.
What direct labor cost would be included in the company’s planning budget for March?
8.
What direct labor cost would be included in the company’s flexible budget for March?
9.
What is the labor rate variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Do not round intermediate calculations.)
10.
What is the labor efficiency variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Do not round intermediate calculations.)
11.
What is the labor spending variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Do not round intermediate calculations.)
12.
What variable manufacturing overhead cost would be included in the company’s planning budget for March?
13.
What variable manufacturing overhead cost would be included in the company’s flexible budget for March?
14.
What is the variable overhead rate variance for March? (Round the actual overhead rate to two decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.).)
15.
What is the variable overhead efficiency variance for March? (Do not round intermediate calculations. Round the actual overhead rate to two decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.).)
Answer:
Explanation:
1. Raw materials cost to be included in the planning budget for March = 28,000 x $ 36 = $ 1,008,000
2. Raw materials cost to be included in the flexible budget for March = 33,000 x $ 36 = $ 1,188,000
3. Materials price variance for March = ( Standard price per unit - Actual price per unit ) x Actual quantity purchased = $ ( 9.00 - 7.20) x 165,000 pounds = $ 297,000 F
4. Materials quantity variance for March = ( standard quantity allowed for actual output - actual quantity used ) x standard price per unit = ( 132,000 - 165,000) x $ 9 = $ 297,000 U
5. Materials price variance = $ ( 9 - 7.20) x 173,000 = $ 311,400 F
6. Materials quantity variance = ( 132,000 - 165,000) x $ 9 = $ 297,000 U
7. Direct labor cost included in the planning budget for March = 28,000 x $ 36 = $ 1,008,000
8. Direct labor cost included in the flexible budget for March = 33,000 x $ 36 = $ 1,188,000
9. Labor rate variance for March = ( standard labor hour rate - actual labor hour rate ) x actual hours used = $ ( 12.00 - 13.00 ) x 58,000 = $ 58,000 U
10. Labor efficiency variance for March = ( standard hours allowed for actual output - actual hours used ) x standard labor hour rate = ( 3 x 33,000 - 58,000) x $ 12 = $ 492,000 F
11. Labor spending variance for March = $ 492,000 F + $ 58,000 U = $ 434,000 F
12. Variable manufacturing overhead cost to be included in the planning budget for March = 28,000 x $ 24 = $ 672,000
13. Variable manufacturing overhead included in the flexible budget for March = 33,000 x $ 24 = $ 792,000
14. Variable overhead rate variance for March = $ ( 8 - 12.57) x 58,000 = $ 265,060 U
15. Variable overhead efficiency variance for March = ( 3 x 33,000 - 58,000) x $ 8 = $ 328,000
"When the variable manufacturing is applied to production direct labor-hours and its standard cost card per unit is as follows To Understand more check below".
Calculation of Standard Cost Card Per Unit1. Raw materials cost to be included in the planning budget for March = (Standard price per unit ×Actual price per unit) 28,000 x $36 is = $1,008,000
2. Raw materials cost to be included in the flexible budget for March = 33,000 x $36 is = $1,188,000
3. When the Materials price variance for March formula is = (Standard price per unit - Actual price per unit) x Actual quantity purchased is = $ (9.00 - 7.20) x 165,000 pounds is = $297,000 F
4. Then, Materials quantity variance for March formula is = (standard quantity allowed for actual output - actual quantity used) x standard price per unit = ( 132,000 - 165,000) x $9 is = $297,000 U
5. After that, Materials price variance is = $(9 - 7.20) x 173,000 = $311,400 F
6. Materials quantity variance is = (132,000 - 165,000) x $9 = $297,000 U
7. Then, the Direct labor cost included in the planning budget for March = 28,000 x $36 is = $1,008,000
8. Direct labor cost included in the flexible budget for March = 33,000 x $36 is = $1,188,000
9. Now, The Labor rate variance for March is = ( standard labor hour rate - actual labor hour rate ) x actual hours used is = $(12.00 - 13.00 ) x 58,000 = $58,000 U
10. Labor efficiency variance for March = (standard hours allowed for actual output - actual hours used) x standard labor hour rate is = ( 3 x 33,000 - 58,000) x $12 = $492,000 F
11. Labor spending variance for March is = $492,000 F + $ 58,000 U = $434,000 F
12. When the Variable manufacturing overhead cost to be included in the planning budget for March is = 28,000 x $24 = $672,000
13. Variable manufacturing overhead included in the flexible budget for March = 33,000 x $24 is = $792,000
14. Then, Variable overhead rate variance for March is = $(8 - 12.57) x 58,000 = $265,060 U
15. Variable overhead efficiency variance for March is = (3 x 33,000 - 58,000) x $8 = $328,000
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A machine purchased three years ago for $303,000 has a current book value using straight-line depreciation of $184,000; its operating expenses are $36,000 per year. A replacement machine would cost $239,000, have a useful life of nine years, and would require $12,000 per year in operating expenses. It has an expected salvage value of $76,000 after nine years. The current disposal value of the old machine is $88,000; if it is kept 9 more years, its residual value would be $15,000.Calculate the total costs in keeping the old machine and purchase a new machine.
Answer: Cost of keeping old machine is $469,000
Cost of Purchasing New Machine is $271,000
Explanation:
Keeping the old machine.
When calculating the cost of keeping the machine you use the disposal value.
Cost = (Disposal Value - Residual Value) + Total Operating Costs for remaining lifetime
Cost = ( 88,000 - 15,000) + ( 36,000 * 11 years)
Cost = 73,000 + 396,000
Cost = $469,000
Cost of keeping old machine is $469,000.
Cost of New machine
Cost = (Disposal Value - Residual Value) + Total Operating Costs for remaining lifetime
Cost = (239,000 - 76,000) + (12,000 * 9)
Cost = 163,000 + 108,000
Cost = $271,000
Cost if New machine purchased,
= $271,000