Answer:
$35,84 per machine hour
Explanation:
Plantwide overhead rate = Budgeted overheads ÷ Budgeted Activity
where,
Budgeted overheads = $3,600,000 + $880,000 = $4,480,000
Budgeted Activity = 125,000 machine hours
therefore,
Plantwide overhead rate = $4,480,000 ÷ 125,000
= $35,84 per machine hour
You have been asked to create a synthetic short position in a forward contract that permits you to sell 10 units of the underlying one year from now at a price of $50 per unit. (1) Describe the positions you need to take in call and put options to achieve the synthetic short forward position. (2) If the underlying is selling for $48 today (i.e. So = 48), what is the cost of your synthetic short position?
Solution :
[tex]\text{Short forward = buy a put + short a call on the same stock}[/tex] with the same exercise price.
X = exercise price = 50
1). Position to be taken :
-- buy 10 numbers of Put options with strike price of $ 50 per unit.
--- short (sell) 10 numbers of Call option with strike price of $ 50 per unit.
2). Cost of synthetic short position = [tex]$10 \times (P-C)$[/tex],
where, P = price of 1 put ption
C = price of 1 call option
The Call - Put parity equation :
[tex]$\frac{C+X}{(1+r)^t}=S_0+P$[/tex]
Here, C = Call premium
X = strike price of call and Put
r = annual rate of interest
t = time in years
[tex]$S_0$[/tex] = initial price of underlying
P = Put premium
Therefore,
[tex]$P-C=PV(X)-S_0=\frac{X}{(1+r)^t}-S_0$[/tex]
Here, t = 1, [tex]S_0[/tex] = 48, X = 50
So the cost of the position is given as : [tex]$\frac{50}{(1+r)} -48$[/tex]
g how long (in years) will it take to triple an investment made at a 2% interest rate if the interest is compounded monthly
Hoi Chong Transport, Ltd., operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven 177,000 kilometers during a year, the average operating cost is 12.3 cents per kilometer. If a truck is driven only 118,000 kilometers during a year, the average operating cost increases to 15.5 cents per kilometer.
Required:
a. Using the high-low method, estimate the variable and fixed cost elements of the annual cost of the truck operation.
b. Express the variable and fixed costs in the form Y = a + bX.
c. If a truck were driven 147,000 kilometers during a year, what total cost would you expect to be incurred?
Gabbe Industries is a division of a major corporation. Last year the division had total sales of $32,948,550, net operating income of $4,069,146, and average operating assets of $9,027,000. The company's minimum required rate of return is 22%.
Required:
a. What is the division's margin? (Round your percentage answer to 2 decimal places.)
b. What is the division's turnover? (Round your answer to 2 decimal places.)
c. What is the division's return on investment (ROI)? (Round percentage your answer to 2 decimal places.)
Answer:
a. Division's margin = Net operating income / Total sales
Division's margin = $4,069,146 / $32,948,550
Division's margin = 0.1235000
Division's margin = 12.35%
b. Division's turnover = Total sales / Average operating assets
Division's turnover = $32,948,550 / $9,027,000
Division's turnover = 3.65 times
c. Division's return on investment = Division margin * Division turnover
Division's return on investment = 12.35% * 3.65 times
Division's return on investment = 45.08%
You invested $5,000 in the stock market one year ago. Today, the investment is valued at $5,500. What return did you earn? What return would you suffer next year for your investment to be valued at the original $5,000?A. 10%, -9.09%, respectivelyB. -10%, +9.09%, respectivelyC. 110%, -10%, respectivelyD. 110%, -9.09%, respectively
Answer:
A
Explanation:
Rate of return in one period = (value in year 1 / initial value) - 1
(5500 / 5000) - 1 = 0.1 = 10%
(5000 / 5500) - 1 = -9.09%
Hãy chỉ rõ điểm giống nhau và khác nhau về vấn đề sau đây: Giá trị, giá thành, giá trị cá biệt, giá trị xã hội, giá cả thị trường
A firm is evaluating the performance of two managers running a summer training program. One manager is in a large division with over 100 trainees, while the other is in a small division with only 15 trainees. What is one principle the firm should use in its evaluation
Answer:
Principle of equitable assessment
Explanation:
In simple words, the principle of equitable assessment refers to the concept which states that while comparing two subjects, the evaluation will be in such a way that the assessment will be fair to both the topics.
Hence, it should be made in such a way or should be made on those dimensions which consdier the differences between the two population.
Mohave Corp. is considering outsourcing production of the umbrella tote bag included with some of its products. The company has received a bid from a supplier in Vietnam to produce 8,000 units per year for $7.50 each. Mohave has the following information about the cost of producing tote bags:
Direct materials $3
Direct labor 2
Variable manufacturing overhead 1
Fixed manufacturing overhead 2
Total cost per unit $8
Mohave has determined that all variable costs could be eliminated by outsourcing the tote bags, while 60 percent of the fixed overhead cost is unavoidable. At this time, Mohave has no specific use in mind for the space currently dedicated to producing the tote bags.
Required:
1. Compute the difference in cost between making and buying the umbrella tote bag.
2. Based strictly on the incremental analysis, should Mohave buy the tote bags or continue to make them?
3. Suppose that the space Mohave currently uses to make the bags could be utilized by a new product line that would generate $10,000 in annual profits. Recompute the difference in cost between making and buying the umbrella tote bag. Does this change your recommendation to Mohave? If so, how?
4. Assume Mohave has a sustainability goal to increase the percentage of spending from local suppliers. If Mohave’s managers are responsible for improving this metric, how might it impact their sourcing decisions?
5. What other strategic or sustainability-related goals should Mohave consider before making a final decision?
Answer:
Mohave Corp.
1. Cost Differences:
Relevant costs:
Make Buy Difference
Direct materials $3
Direct labor 2
Variable manufacturing overhead 1
Fixed manufacturing overhead 0.80
Total cost per unit $6.80 $7.50 $0.70
Annual Units 8,000 8,000 8,000
Total costs $54,400 $60,000 $5,600
2. Based strictly on the incremental analysis, Mohave should continue to make the tote bags.
3. The recommendation is changed. Mohave should buy the tote bags from outside. Buying from outside increases operating income by $4,400.
Explanation:
a) Data and Calculations:
Price per unit from outside supplier = $7.50
Direct materials $3
Direct labor 2
Variable manufacturing overhead 1
Fixed manufacturing overhead 2
Total cost per unit $8
Relevant costs:
Make Buy Difference
Direct materials $3
Direct labor 2
Variable manufacturing overhead 1
Fixed manufacturing overhead 0.80
Total cost per unit $6.80 $7.50 $0.70
Annual Units 8,000 8,000 8,000
Total costs $54,400 $60,000 $5,600
Relevant costs:
Make Buy Difference
Direct materials $3
Direct labor 2
Variable manufacturing overhead 1
Fixed manufacturing overhead 0.80
Total cost per unit $6.80 $7.50 $0.70
Annual Units 8,000 8,000 8,000
Total costs $54,400 $60,000 $5,600
Annual profits from new product 0 (10,000) $10,000
Total net costs $54,400 $50,000 $4,400
Kathy quit her job as a financial advisor
Lập danh mục chi phí hoạt động của 1 toà nhà cho thuê hạng C
Chi phí hoạt động là chi phí liên tục để duy trì và duy trì hoạt động đầu tư bất động sản cho thuê. Nói cách khác, chúng là những chi phí ảnh hưởng đến hoạt động hàng ngày của khoản đầu tư và được coi là cần thiết để duy trì dòng doanh thu.
what is the primary benefit people receive in exchange for paying premiums to an insurance company
Answer:
The insurance company will pay for covered expenses
With premium rates from insurance companies, the overall protection is much more guaranteed than a regular, and perhaps the insurance will cover more than regular insurance.
A benefit that people receive in exchange for paying premiums is that insurance company B.will pay for covered expenses.
What is insurance?The insurance can be regarded as a process of insuring one's property or life in case of danger or any future problems.
The insurance company pays you or someone you choose if something bad happens to you. If you have no insurance and an accident happens, you may be responsible for all related costs.
Therefore, option B is correct because, when people pay their premiums, the company will be available to covered expenses.
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2019 2018 2017 2016 2015 Sales $ 282,880 $ 270,800 $ 252,600 $ 234,560 $ 150,000 Cost of goods sold 128,200 122,080 115,280 106,440 67,000 Accounts receivable 18,100 17,300 16,400 15,200 9,000 Compute trend percents for the above accounts, using 2015 as the base year.
Answer:
Sales
2019 Net Sales = 188.59%
2018 Net Sales = 180.53%
2017 Net Sales = 168.4%
2016 Net Sales = 156.37%
Cost of Goods Sold
2019Cost of Goods Sold = 191.34%
2018 Cost of Goods Sold = 182.21%
2017 Cost of Goods Sold = 172.06%
2016 Cost of Goods Sold = 158.87%
Accounts Receivable:
2019 Accounts Receivable = 201.11%
2018Accounts Receivable = 192.22%
2017Accounts Receivable = 182.22%
2016Accounts Receivable = 168.89%
Explanation:
Computation forn trend percents for the above accounts, using 2015 as the base year:
FOR SALES:
2019:
Net Sales = Sales 2019 / Sales 2015*100
Net Sales = $282,880 / $150,000 * 100
Net Sales = 188.59%
2018:
Net Sales = Sales 2018 / Sales 2015*100
Net Sales = $270,800 / $150,000 * 100
Net Sales = 180.53%
2017:
Net Sales = Sales 2017 / Sales 2015*100
Net Sales = $252,600 / $150,000 * 100
Net Sales = 168.4%
2016:
Net Sales = Sales 2016 / Sales 2015*100
Net Sales = $234,560 / $150,000 * 100
Net Sales = 156.37%
COST OF GOODS SOLD:
2019:
Cost of Goods Sold = Cost of Goods Sold 2019 / Cost of Goods Sold 2015 *100
Cost of Goods Sold = $128,200 / $67,000 * 100
Cost of Goods Sold = 191.34%
2018:
Cost of Goods Sold = Cost of Goods Sold 2018 / Cost of Goods Sold 2015 *100
Cost of Goods Sold = $122,080 / $67,000 * 100
Cost of Goods Sold = 182.21%
2017:
Cost of Goods Sold = Cost of Goods Sold 2017 / Cost of Goods Sold 2015 *100
Cost of Goods Sold = $115,280 / $67,000 * 100
Cost of Goods Sold = 172.06%
2016:
Cost of Goods Sold = Cost of Goods Sold 2016 / Cost of Goods Sold 2015 *100
Cost of Goods Sold = $106,440 / $67,000 * 100
Cost of Goods Sold = 158.87%
ACCOUNTS RECEIVABLE:
2019:
Accounts Receivable = Accounts Receivable 2019 / Accounts Receivable 2015 * 100
Accounts Receivable = $18,100 / $9,000 * 100
Accounts Receivable = 201.11%
2018:
Accounts Receivable = Accounts Receivable 2018 / Accounts Receivable 2015 * 100
Accounts Receivable = $17,300 / $9,000 * 100
Accounts Receivable = 192.22%
2017:
Accounts Receivable = Accounts Receivable 2017 / Accounts Receivable 2015 * 100
Accounts Receivable = $16,400 / $9,000 * 100
Accounts Receivable = 182.22%
2016:
Accounts Receivable = Accounts Receivable 2016 / Accounts Receivable 2015 * 100
Accounts Receivable = $15,200 / $9,000 * 100
Accounts Receivable = 168.89%
Calculate real rate if you have nominal rate is 12% and inflation rate is 7% Enter the answer in percentage format to two decimal place without the % sign -> 9.30 and not 9.3% or .093)
Answer: 5.00
Explanation:
The real interest rate is the difference between the nominal interest and the inflation rate.
Real interest rate will be:
= Nominal interest rate − Inflation rate.
= 12% - 7%
= 5.00
Therefore, the real Interest rate is 5.00.
BK Books is an online book retailer that also has 10,000 "bricks and mortar" outlets worldwide. You are a risk-neutral manager within the CorporateFinance Division and are in dire need of a new financial analyst. You onlyinterview students from the top MBAprograms in your area. Thanks to yourscreening mechanisms and contacts, the students you interview ultimately dif-fer only with respect to the wage that they are willing to accept. About 5 per-cent of acceptable candidates are willing to accept a salary of $60,000, while95 percent demand a salary of $110,000. There are two phases to the inter-view process that every interviewee must go through. Phase 1 is the initialone-hour on-campus interview. All candidates interviewed in Phase 1 are alsoinvited to Phase 2 of the interview, which consists of a five-hour office visit.In all, you spend six hours interviewing each candidate and value this time at$750. In addition, it costs a total of $4,250 in travel expenses to interview each candidate. you are very impressed with the first interviewee completing both phases of bk books’s interviewing process, and she has indicated that her reservation salary is $110,000. should you make her an offer at that salary or continue the interviewing process? explain.
Answer: Therefore, we should make her an offer at that salary
Explanation:
Based on the information given in the question,
Lowest salary = $60,000
Highest salary = $110,000
Expected Benefit = 5% × ($110,000 - $60,000) = 5% × $50,000 = $2500
The cost of conducting another interview will be:
= cost of time + cost of travel
= $750 + $4250
= $5000
Since the cost of conducting the additional interview is more than the expected benefit, therefore the interviewee should be hired rather than continuing the interviewing process.
Therefore, we should make her an offer at that salary.
Identify every authority cited in the opinion (note that some sources may be cited more than once) and then do the following:
List all primary mandatory authority.
List all primary persuasive authority.
List all secondary persuasive authority.
Answer:
Primary Authorities :
Statues, regulations, jurisdiction, trial court, cases.
Primary Persuasive Authority :
Constitution, legislation.
Secondary Persuasive Authority :
Law review articles, trial courts.
Explanation:
Primary persuasive authority means law. Following a law is mandatory and statute provides the regulation which are required to be followed or else it will be regarded as crime. Secondary persuasive authority is not law but it leads to the law and helps explain the terms and standards of the law.
Why is keeping a journal about what is good and bad regarding your summer or part-time work a good idea to help you choose a career path
The correct answer to this open question is the following.
Keeping a journal about what is good and bad regarding my summer or part-time work is a good idea to help me choose a career path because writing down what I like and what I dislike, I can get a pretty close idea of the things I enjoy and have more skills to perform, compared to the things I do not like or I have no abilities at all.
If a clearly identify my skills and abilities in the workplace during the summer, it will be easier for me to identify what could be the profession I love or at least, what I am attracted to.
As it is difficult to remember all the work experience by memory, writing the journal will help me to remember exact dates, specific activities that I enjoyed or were interesting, and what was not.
E Corporation produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 54,000 units per month is as follows: Per Unit Direct materials $ 49.60 Direct labor $ 9.50 Variable manufacturing overhead $ 2.50 Fixed manufacturing overhead $ 20.10 Variable selling & administrative expense $ 4.60 Fixed selling & administrative expense $ 22.00 The normal selling price of the product is $114.10 per unit. An order has been received from an overseas customer for 3,400 units to be delivered this month at a special discounted price. This order would not change the total amount of the company's fixed costs. The variable selling and administrative expense would be $2.60 less per unit on this order than on normal sales. Suppose there is ample idle capacity to produce the units required by the overseas customer and the special discounted price on the special order is $90.40 per unit. The monthly financial advantage (disadvantage) for the company as a result of accepting this special order should be:
Answer: $91120
Explanation:
The The monthly financial advantage (disadvantage) for the company will be calculated thus:
Incremental revenue = (3400 × $90.40) = $307360
Less: Incremental Cost
Direct material (3400 × $49.60) = $168640
Direct labor (3400 × $9.5) = $32300
Variable manufacturing overhead = (3400 × $2.5) = $8500
Variable selling & administrative expense = (3400 × $2) = $6800
Total incremental Cost = $216240
Therefore, the monthly financial advantage will be:
= $$307360 - $216240
= $91120
(f) Find the present value of an investment that will pay $3,000 at the end of Years 10, 11, and 12. Use a discount rate of 8%.
Answer:
PV= $3,867.67
Explanation:
Giving the following information:
Find the present value of an investment that will pay $3,000 at the end of Years 10, 11, and 12. Use a discount rate of 8%.
First, we will determine the future value of the payments:
FV= {A*[(1+i)^n-1]}/i
A= annual payment
FV= {3,000*[(1.08^3) - 1]} / 0.08
FV= $9,732.2
Now, the present value:
PV= FV / (1 + i)^n
PV= 9,732.2 / (1.08^12)
PV= $3,867.67
Assume that a company pays a 5% sales commission Also, assume the job cost sheet for Job X shows that (1) it used 18 direct tabor-hours and incurred direct materials and direct labor charges of $500 and $360, and (2) its unit product cost is $27.35. If Job X contained 40 units, then what is the plantwide predetermined overhead rate per direct labor-hour?
a. $15.00
b. $60.78
c. $13.00
d. $47.78
Answer:
c. $13.00
Explanation:
The computation of the plantwide predetermined overhead rate is given below;
Given that
Direct labor hour used = 18
Direct material cost = $500
Direct labor cost = $360
Unit product cost = $27.35
So,
Total cost of Job = Number of unit × Unit product cos
= 40 × 27.35
= $1,094
Now
Total cost of Job = Direct material cost + Direct labor cost + Overhead applied
1,094 = 500 + 360 + Overhead applied
Overhead applied = $234
Now
Overhead applied = Direct labor hour used × Plantwide predetermined overhead rate
234 = 18 × Plantwide predetermined overhead rate
Plantwide predetermined overhead rate = $13 per direct labor hour
The plantwide predetermined overhead rate per direct labor-hour is $13 per DLH
Given Information
Direct labor hour used = 18
Direct material cost = $500
Direct labor cost = $360
Unit product cost = $27.35
Total cost of Job = Number of unit × Unit product cost
Total cost of Job = 40 × 27.35
Total cost of Job = $1,094
Total cost of Job = Direct material cost + Direct labor cost + Overhead applied
1,094 = 500 + 360 + Overhead applied
Overhead applied = $234
Overhead applied = Direct labor hour used × Plantwide predetermined overhead rate
234 = 18 × Plantwide predetermined overhead rate
Plantwide predetermined overhead rate = $13 per direct labor hour
Hence, the plantwide predetermined overhead rate per direct labor-hour is $13 per DLH.
Therefore, the Option C is correct.
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In 2007, Joe Gebbia and Brian Chesky realized they could not afford the rent on their pricey San Francisco apartment, so they decided to put an air mattress in their living room and offer people an alternative to an expensive hotel room. This is the story of how Airbnb got started. In other words, Airbnb began when Gebbia and Chesky ________; the company grew because it ________.
a. identified their passions; was technologically based broke the law; successfully lobbied to get the laws changed.
b. studied consumer complaints; was based on idealism.
c. sought to put their competitors out of business; was based on their desire to change the world.
d. identified a problem or frustration; identified an opportunity or need.
Answer:
Here the correct option is (d) identified a problem or frustration; identified an opportunity or need.
Explanation:
Identified a problem or frustration; identified an opportunity or need. Airbnb began when Gebbia and Chesky identified a drag or frustration; the corporate grew because it identified a chance or need. that they had a drag of not having enough money to pay the rent, and that they identified a chance or need in letting strangers live there which they will afford, unlike an upscale bedroom.
Crane Company's accounting records reflect the following inventories: Dec. 31, 2017 Dec. 31, 2016 Raw materials inventory $210000 $160000 Work in process inventory 300000 160000 Finished goods inventory 190000 150000 During 2017, $700000 of raw materials were purchased, direct labor costs amounted to $670000, and manufacturing overhead incurred was $640000. The total raw materials available for use during 2017 for Crane Company is
Answer:
$910,000
Explanation:
Given the above information, total raw materials available for use during 2017 is calculated below;
= Beginning raw materials + Purchases
Beginning raw materials = $210,000
Purchases = $700,000
Then,
Total raw materials available for use during 2017 for Crane company
= $210,000 + $700,000
= $910,000
You pay $75 for a ticket to a Drake concert. You think the ticket is worth $100. The night before the concert your friend offers you a free ticket to a Post Malone concert that you think is worth $80. What is the opportunity cost to you of going to the Drake concert instead of the Post Malone concert?a) $155b) $20c) $5d) $75e) $80
Answer: $80
Explanation:
The opportunity cost is regarded as the real cost of the alternative that was left or forgone.
Based on the information given in the question, the opportunity cost is the free ticket to a Post Malone concert that is worth $80 which was given to me by my friend.
Therefore, the correct option is E.
Agreement and disagreement among economists
Suppose that Yakov, an economist from a business school in Georgia, and Ana, an economist from a public television program, are arguing over budget deficits. The following dialogue shows an excerpt from their debate:
Ana: Most people recognize that the budget deficit has been rising considerably over the last century. We need to find the best course of action to remedy this situation.
Yakov: I believe that a cut in income tax rates would boost economic growth and raise tax revenue enough to reduce budget deficits.
Ana: I actually feel that raising the top income tax rate would reduce the budget deficit more effectively.
The disagreement between these economists is most likely due to ___.
Despite their differences, with which proposition are two economists chosen at random most likely to agree?
A. Rent cellings reduce the quantity and quality of available housing.
B. Immigrants receive more in government benefits than they contribute in taxes.
C. Having a single income tax rate would improve economic performance.
Answer:
differing opinions on the point we are on the Laffer Curve
A
Explanation:
The Laffer Curve is a supply side economic theory developed by Arthur Laffer in 1974.
The curve depicts the relationship between tax rates and tax revenue
According to this theory, higher income tax rate reduces the incentive of labour to work and invest due to the fact that labour would have to pay higher tax. This means that at some point, increase in the tax rate would decrease government revenue rather than increase it.
The theory submits that there is an optimal tax rate at which tax income is maximised. Once this point is surpassed, increase in tax rate would reduce government revenue
Price ceiling is when the government or an agency of the government sets the maximum price for a product. It is binding when it is set below equilibrium price.
Effects of a binding price ceiling
1. It leads to shortages
2. it leads to the development of black markets
3. it prevents producers from raising price beyond a certain price
4. It lowers the price consumers pay for a product. This increases consumer surplus
A rent ceiling would lead to shortage of houses and a reduction of the quality of available housing.
Based on an examination of the risk and return data for a variety of alternative investments during the period of 1926-2011, which of the following statements is correct? Over the period of 1926-2011, the general trend of increasing riskiness among the following five assets is: U.S. Treasury bills, U.S. government long-term government bonds, long-term corporate bonds, large-company stocks, and small-company stocks. Over the period of 1926-2011, the general trend of increasing return among the following five assets is: U.S. Treasury bills, long-term corporate bonds, U.S. government long-term bonds, large-company stocks, and small-company stocks. Large-company stocks, rather than small-company stocks, exhibit the greater risk and the greater return. Small-company stocks, rather than long-term corporate bonds, exhibit both the greater return and the greater standard deviation.
Answer:
Based on an examination of the risk and return data for a variety of alternative investments during the period of 1926-2011, the correct statement is:
Small-company stocks, rather than long-term corporate bonds, exhibit both the greater return and the greater standard deviation.
Explanation:
Small-company stocks are known to show the highest volatility of returns among these five assets. The reason is that investors in small company stocks always expect higher returns to pay for the higher risks involved in such unproven investments, unlike investing in other assets. In addition, small-company stocks are known to pose higher risks given their known failure to deliver on their promised performance and returns.
If a breakthrough in battery technology enables cell phone manufacturers to construct phones with the same battery life for less money, then in the cell phone market, equilibrium price______and equilibrium quantity______.
Answer:
decreases; increases.
Explanation:
Technology can be defined as a branch of knowledge which typically involves the process of applying, creating and managing practical or scientific knowledge to solve problems and improve human life. Technologies are applied to many fields in the world such as medicine, information technology, cybersecurity, engineering, environmental, etc.
Generally, technology has impacted the world significantly and positively as it has helped to automate processes, increased efficiency and level of output with little or no human effort.
Assuming a breakthrough in battery technology fosters the growth and development of cell phone manufacturers.
In the cell phone market, equilibrium price would decrease while there would be a significant increase in equilibrium quantity because they will be able to construct phones with the same battery life for a less amount of money.
Additionally, the equilibrium price is generally said to be stable because at this price, the quantity of goods or services demanded is equal to the quantity of goods or services supplied to the consumers.
Favaz began business at the start of this year and had the following costs: variable manufacturing cost per unit, $7; fixed manufacturing costs, $60,000; variable selling and administrative costs per unit, $3; and fixed selling and administrative costs, $263,000. The company sells its units for $48 each. Additional data follow. Planned production in units 10,000 Actual production in units 10,000 Number of units sold 9,500 There were no variances. The income (loss) under absorption costing is
Answer:
Favaz
The income (loss) under absorption costing is
= $41,000.
Explanation:
a) Data and Calculations:
Variable manufacturing cost per unit, $7
Fixed manufacturing costs, $60,000
Variable selling and administrative costs per unit, $3
Fixed selling and administrative costs, $263,000
Selling price per unit = $48
Planned production in units = 10,000
Actual production in units = 10,000
Number of units sold = 9,500
Ending inventory = 500 (10,000 - 9,500)
Income Statement
Sales revenue ($48 * 9,500) $456,000
Cost of production:
Variable manufacturing $70,000 ($7 * 10,000)
Fixed manufacturing costs, 60,000
Total cost of production $130,000
Less Ending inventory 6,500 ($13 * 500)
Cost of goods sold 123,500
Gross profit $332,500
Expenses:
Variable selling and administrative
costs per unit, ($3 * 9,500) $28,500
Fixed selling and
administrative costs, 263,000
Total expenses $291,500
Net income $41,000
Inventory which originally cost 50.0 is sold for 70.0 in cash. Which answer best describes how this transaction would be reflected in the company's balance sheet
Question Completion with Options:
a. Inventory decreases 50.0, cash increases 70.0, retained earnings increases 20.0
b. Cash increases 20.0, sales increases 70.0, inventory decreases 50.0
c. Retained earnings decreases 50.0, inventory decreases 50.0, retained earnings increases 70.0, accounts receivable increases 70.0
d. Inventory decreases 50.0, sales increase 70.0, cash increases 70.0, accounts payable decreases 50.0
Answer:
In the company's balance sheet:
a. Inventory decreases 50.0, cash increases 70.0, retained earnings increases 20.0
Explanation:
a) Data and Analysis:
Cash $70 Sales Revenue $70
Cost of goods sold $50 Inventory $50
b) In the company's balance sheet, the net effect will be an increase in the cash balance by $70 and a decrease of the ending inventory by $50. These two accounts are balanced by an increase in Retained Earnings, which are adjusted from the income statement, in the sum of $20 ($70 - $50).
The transactions which would be reflected in the balance sheet of the company are: Inventory decreases 50.0, cash increases 70.0, and retained earnings increases 20.0.
What is a balance sheet?A balance sheet is a financial statement that lists the assets and liabilities of a corporation at a certain point in time.
It is one of the three primary financial statements—the other two being the income statement and cash flow statement—that are used to assess a company's performance.
Information and analysis
Cash $70 $70 in sales revenue$50 was spent on the goods. $50 in inventoryThe net impact on the company's balance sheet will be an increase in cash by $70 and a reduction in ending inventory by $50.Retained Earnings are raised by $20 ($70 - $50), which is modified from the income statement in order to balance these two accounts.Thus, above is the amount that is to be reflected in the company balance sheet.
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The following is a list of various costs of producing T-shirts. Classify each cost as either a variable, fixed, or mixed cost for units produced and sold.
a. Ink used for screen printing Variable
b. Warehouse rent of $8,000 per month plus $0.50 per square foot of storage used Mixed
c. Thread Variable
d. Electricity costs of $0.038 per kilowatt-hour Variable
e. Janitorial costs of $4,000 per month Fixed
f. Advertising costs of $12,000 per month
g. Accounting salaries
h. Color dyes for producing different colors of T-shirts Variable
i. Salary of the production supervisor
j. Straight-line depreciation on sewing machines Fixed
k. Salaries of internal pattern designers
l. Hourly wages of sewing machine operators Variable
m. Property taxes on factory, building, and equipment Fixed
n. Cotton and polyester cloth
o. Maintenance costs with sewing machine company (the cost is $2,000 per year plus $0.001 for each machine hour of use.) Mixed
B) Magnolia, Inc. manufactures bedding sets. The budgeted production is for 31,800 comforters this year. Each comforter requires 7 yards of material. The estimated January 1 beginning inventory is 5,320 yards with the desired ending balance of 4,100 yards of material. If the material costs $6.80 per yard, determine the materials budget for the year.
$_______
C) Gleason invested $90,000 in the James and Kirk partnership for ownership equity of $90,000. Prior to the investment, land was revalued to a market value of $425,000 from a book value of $200,000. James and Kirk share net income in a 1:2 ratio.
a. Provide the journal entry for the revaluation of land. If an amount box does not require an entry, leave it blank.
b. Provide the journal entry to admit Gleason.
D) If the contribution margin ratio for France Company is 37%, sales were $413,000, and fixed costs were $106,000, what was the income from operations?
$152,810
$106,000
$37,448
$46,810
E) Cash and accounts receivable for Adams Company are provided below:
Current Year Prior Year
Cash $70,000 $50,000
Accounts receivable (net) 70,400 80,000
Based on this information, What is the amount and percentage of increase or decrease that would be shown with horizontal analysis?
Account Dollar Change Percent Change
Cash $ %
Accounts Receivable $
%
Answer:
A. Production and Sales Cost Classification:
Variable
a. Ink used for screen printing
c. Thread
d. Electricity costs of $0.038 per kilowatt-hour
h. Color dyes for producing different colors of T-shirts
k. Salaries of internal pattern designers
l. Hourly wages of sewing machine operators
n. Cotton and polyester cloth
Mixed
b. Warehouse rent of $8,000 per month plus $0.50 per square foot of storage used
o. Maintenance costs with sewing machine company (the cost is $2,000 per year plus $0.001 for each machine hour of use.)
Fixed
e.Janitorial costs of $4,000 per month Fixed
f. Advertising costs of $12,000 per month
g. Accounting salaries
i. Salary of the production supervisor
j. Straight-line depreciation on sewing machines
m. Property taxes on factory, building, and equipment
B. The materials budget for the year is:
= $1,505,384.
C. James, Kirk, and Gleason Partnership
Debit Land $225,000
Credit Land revaluation gain $225,000
To record land revaluation.
a. Debit Land Revaluation gain $225,000
Credit James, capital $75,000
Credit Kirk, Capital $150,000
To share the revaluation gain.
b. Debit Cash $90,000
Credit Gleason, Capital $90,000
To record Gleason's admission as a partner.
Debit James, Capital $30,000
Debit Kirk, Capital $60,000
Credit Cash $90,000
To reduce James and Kirk's capital accounts.
D. France Company
Income from operations = $46,810
E. Adams Company:
Account Dollar Change Percent Change
Cash $20,000 40%
Accounts Receivable ($9,600) (12%)
Explanation:
a) Data and Calculations:
A) Variable costs vary in total and are fixed per units. Fixed costs vary per units but are fixed in total within the relevant production capacity. Mixed costs have variable and fixed costs combined.
B) Magnolia, Inc.
Budgeted production of comforters for this year = 31,800
Materials required by each comforter = 7 yards
Total materials required for production =222,600 (31,800 * 7)
Beginning inventory = 5,320 yards
Ending balance = 4,100 yards
Total materials to be bought = 221,380 (222,600 + 4,100 - 5,320)
Material costs $6.80 per yard
Materials budget for the year = $1,505,384 (221,380 * $6.80)
$_______
C) Gleason invested $90,000 in the James and Kirk partnership for ownership equity of $90,000.
Land $225,000
Land revaluation $225,000
a. Land Revaluation $225,000
James, capital $75,000
Kirk, Capital $150,000
b. Cash $90,000 Gleason, Capital $90,000
James, Capital $30,000 Kirk, Capital $60,000 Cash $90,000
D) France Company
Contribution margin ratio = 37%
Sales $413,000
Contribution margin = $152,810 ($413,000 * 37%)
Fixed costs $106,000
Income from operations = $46,810
E) Adams Company:
Current Year Prior Year
Cash $70,000 $50,000
Accounts receivable (net) 70,400 80,000
Account Dollar Change Percent Change
Cash $20,000 40%
Accounts Receivable ($9,600) (12%)
Harwood Company uses a job-order costing system that applies overhead cost to jobs on the basis of machine-hours. The company's predetermined overhead rate of $2.50 per machine-hour was based on a cost formula that estimates $217,500 of total manufacturing overhead for an estimated activity level of 87,000 machine-hours. Required: 1. Assume that during the year the company works only 82,000 machine-hours and incurs the following costs in the Manufacturing Overhead and Work in Process accounts: Compute the amount of overhead cost that would be applied to Work in Process for the year and make the entry in your T-accounts. 2A. Compute the amount of underapplied or overapplied overhead for the year and show the balance in your Manufacturing Overhead T-account.
Question Completion:
Manufacturing Overhead Account
Maintenance $24,000
Indirect materials 8,300
Indirect labor 82,000
Utilities 36,000
Insurance 7,300
Depreciation 65,000
Total costs $222,600
Work in Process
Direct materials $740,000
Direct labor 83,000
Answer:
Harwood Company
1. The amount of overhead cost that would be applied to Work in Process for the year is:
= $205,000.
2. T- Accounts:
Work in Process
Direct materials $740,000
Direct labor 83,000
Applied overhead 205,000
Manufacturing overhead
Maintenance $24,000
Indirect materials 8,300
Indirect labor 82,000
Utilities 36,000
Insurance 7,300
Depreciation 65,000
Applied overhead: WIP $205,000
Underapplied overhead 17,600
Total costs $222,600 $222,600
2A. The amount of underapplied overhead for the year is:
= $17,600
2B. Manufacturing overhead
Maintenance $24,000
Indirect materials 8,300
Indirect labor 82,000
Utilities 36,000
Insurance 7,300
Depreciation 65,000
Applied overhead: WIP $205,000
Underapplied overhead 17,600
Total costs $222,600 $222,600
Explanation:
a) Data and Calculations:
Predetermined overhead rate per machine-hour = $2.50
Estimated total manufacturing overhead = $217,500
Estimated activity level = 87,000
Actual results from production during the year:
Machine-hours worked = 82,000
Applied overhead costs = $205,000 (82,000 * $2.50)
Total manufacturing costs incurred = $222,600
Underapplied overhead = $17,600
According to a survey done by the Anti-Fraud Collaboration, the majority of participants believe it is the job of senior executives within an organization to set the tone to deter fraud.
a) true
b) false