Answer:
(a) Refrigeration would be willing to pay a maximum of Rate 36 to gauge division for unit. because its outside purchase price. (b) $30 (c) $40 (d) $35
Explanation:
Solution
Given that:
(A) The Refrigeration would be willing to pay a maximum of Rate 36 to gauge division for unit. because its outside purchase price.
(B) If Gauge had excess capacity, The Division's Management set the transfer price would be $30. this is because transfer price be set as sum of Total Outlay cost and Opportunity Cost. So, ($23 + $7) + $0 = $30
(C) iF Gauge had no excess capacity, the transfer price would be $40.
The Calculation of Transfer price is as follows:
($23 + $7) = $30
Add :- ($40 - $23 -$7) = $10
Hence, the transfer Price = $40
(D) If Gauge was able to reduce the variable cost of internal transfers b $5 per unit then Transfer Price Would be $35.
Thus,
The calculation of transfer price is as follows:-
($23 + $7 - $5) = $25
Add :- ($40 - $23 -$7) = $10
The transfer Price = $35
Describe the best structural configuration for an organization?
Explanation:
The structural configuration in an organization corresponds to a model that helps in understanding the organizations existing in a company for the development of effective strategies.
In order to establish the configuration, all parts of the organization, design parameters, situational factors and coordination mechanisms must be simulated, so that there is an integrated understanding so that it is possible to establish which strategic management model will be ideal for each type of organization. structural configuration.
There are seven types of organizational configuration:
business organization, machine organization, professional organization, diversified organization, innovative organization, missionary organization and political organization.There are also the forces associated with the structural configuration, such as: learning, efficiency, direction, proefficiency, responsibility, cooperation and competition.
For a company to develop the best structural configuration, it must be evaluated to identify challenges and impediments of the project, so that it is aligned with the organizational values and objectives, so that the structure is integrated and effective.
Doon Company incurred the following costs while producing 580 units: direct materials, $ 5 per unit; direct labor, $ 29 per unit; variable manufacturing overhead, $ 10 per unit; total fixed manufacturing overhead costs, $ 12 comma 180; variable selling and administrative costs, $ 3 per unit; total fixed selling and administrative costs, $ 8 comma 120. There are no beginning inventories. What is the operating income using absorption costing if 580 units are sold for $ 120 each?
Answer:
$22,040
Explanation:
The operating income using absorption costing is find out by using the following equation
Sales revenue $69,600 (580 units × $120)
Less:
Direct material cost $2,900 (580 units × $5)
Direct labor cost $16,820 (580 units × $29)
Variable manufacturing overhead $5,800 (580 units × $10)
Fixed manufacturing overhead $12,180
Variable selling and admin cost $1,740 (580 units × $3)
Fixed selling and admin cost $8,120
Operating income using absorption costing $22,040
We simply deduct the all cost from the sales so that the operating income under absorption costing could come
Fir the third quarter, the sales are 1,000 units, the seasonal index fir the quarter is 0.85. what is the deseasonalized sales for the quarter
Answer:
1,176 units
Explanation:
The demand which is created due to a season or specific time in each year is called seasonal demand.
Seasonal Demand = 1,000 units
Seasonal Index = 0.85
Using following formula we can calculate the deseasonalized sales
Seasonal demand = Deseasonalized Sales x Seasonal Index
Placing value in the formula
1,000 units = Deseasonalized Sales x 0.85
Deseasonalized Sales = 1,000 / 0.85 = 1176.47
Deseasonalized Sales = 1,176 units
What would happen to the price of a certain commodity if the demand was always greater than the supply? There would be surplus of supply at any given price. Consumers would be willing to pay more for an abundant commodity and sellers would charge more, resulting in an upward spiral of the prices for the commodity. There would be a surplus of supply until the supply equals the demand. Consumers would be willing to pay more for a scarce commodity and sellers would charge more, resulting in an upward spiral of the prices for the commodity. There would be a shortage of supply until the supply equals the demand. Consumers would be willing to pay more for a scarce commodity and sellers would charge more, resulting in an upward spiral of the prices for the commodity. There would be a shortage of supply at any given price. Consumers would be willing to pay
Answer:
Consumers would be willing to pay more for a scarce commodity and sellers would charge more, resulting in an upward spiral of the prices for the commodity.
Explanation:
When demand exceeds supply, there's a scarcity. As a result of the scarcity, consumers would be willing to pay more for the good or service and suppliers would increase the price of the commodity. As a result price would rise.
Please check the attached image for a graph showing effect of excess demand on price
I hope my answer helps you.
You manage a department of five employees. You have identified that Ashley has a high need for achievement, Mary has a high need for power, and Keith has a high need for affiliation. Sarah scored high on the need for power and low on the need for affiliation. Doug scored low on both need for power and need for affiliation.
1. Which of these five employees is most likely to be suitable for a new assignment that involves a high degree of personal responsibility and feedback?
A) Mary
B) Ashley
C) Keith
D) Sarah
E) Doug
2. Which of these five employees is most suitable for handling your responsibilities when you are on a vacation?
A) Ashley
B) Mary
C) Keith
D) Sarah
E) Doug
Answer: 1. B. Ashley
2. D. Sarah
Explanation:
1. When selecting someone fkr an assignment that involves a high degree of personal responsibility and feedback, it is important that their drive to accomplish the mission is gauged. They must be the type of people that will want to get the job done.
Ashley scored high on Achievement making her the best for this role because she will strive hard to accomplish the task because she loves achieving set targets.
2. Sarah scored high on power but low on affiliation. This means that she a high need to control others and yet a low need to have overly friendly relationship with others. This will help her manage the company well because she yarns to control people and at the same time will be impartial due to her low need for affiliation.
Vesuvius Company has net sales revenue of $786,000, cost of goods sold of $346,200,net income of $151,200, and preferred dividends of $13,000 during the current year. At the beginning of the year, 491,000 shares of common stock were outstanding, and, at the end of the year, 543,000 shares of common stock were outstanding.A total of 4,000 preferred shares were outstanding throughout the year. The company’s earnings per share for the current year is closest to:
Answer:
$0.27
Explanation:
Earnings per share is the total earnings attributable to common stockholders divided by the weighted average number of common stock.
total earnings attributable to common stockholders=net income-preferred stock dividends
net income is $151,200
preferred dividends is $13,000
earnings attributable to common stock=$151,200-$13,000=$138,200.00
weighted average number of common stock=(491,000+543,000)/2 = 517,000.00
EPS=$138,200/ 517,000=$ 0.27
Fire Department Turns to BI Analytics. New York City has nearly one million buildings, and each year, more than 3000 of them experience a major fire. The Fire Department of the City of New York (FDNY) is adding BI analytics to its arsenal of firefighting equipment. It has created a database of over 60 different factors (e.g., building location, age of the building, whether it has electrical issues, the number, and location of sprinklers) in an attempt to determine which buildings are more likely to have a fire than others. The values of these parameters for each building are fed into a BI analytics system that assigns each of the city's 330,000 inspectable buildings a risk score. (FDNY doesn't inspect single and two-family homes.) Building inspectors then use these risk scores to prioritize which buildings to visit on their weekly inspections. The FDNY has roughly 350 inspectors who are trained and certified to perform their duties.
Which set of three parameters all provides measures useful in determining which buildings are more likely to have a fire than others?
a. Year the building was constructed, the number of building occupants, and primary materials used in the construction of the building
b. Primary materials used in the construction of the building, the assessed value for property taxes, and distance from the nearest fire station
c. Distance from the nearest fire hydrant, whether or not the building has an elevator, and the number of stories in the building
d. The amount the building is insured for, distance from the nearest fire hydrant, and primary building materials used in the construction of the building
Answer:D
Explanation:
Teal Mountain Company leased equipment from Costner Company, beginning on December 31, 2019. The lease term is 8 years and requires equal rental payments of $54,782 at the beginning of each year of the lease, starting on the commencement date (December 31, 2019). The equipment has a fair value at the commencement date of the lease of $340,000, an estimated useful life of 8 years, and no estimated residual value. The appropriate interest rate is 8%. Click here to view factor tables. Prepare Teal Mountain’s 2019 and 2020 journal entries, assuming Teal Mountain depreciates similar equipment it owns on a straight-line basis
Answer:
See the explanation below.
Explanation:
Date Details Dr ($) Cr ($) .
31 Dec. '19 Leased equipment 340,000
Lease liability 340,000
To record liability form equipment lease. .
31 Dec. '19 Leased liability 54,782
Cash 54,782
To record lease payment. .
31 Dec. '20 Interest expense 22,817.44
Lease liability 31,964.56
Cash 54,782
To record interest expense and lease payment. .
31 Dec. '20 Depreciation expense 42,500
Accumulated depreciation - lease 42,500
To record right-of -use equipment amortization .
Note:
31 Dec. '20 Interest expense = (340,000 - 54,782) * 8% = $22,817.44
31 Dec. '20 Lease liability = $54,782 - $22,817.44 = $31,964.56
31 Dec. '20 Depreciation expense = 340,000 / 8 = $42,500
Suppose a ten-year, $ 1 comma 000 bond with an 8.6 % coupon rate and semiannual coupons is trading for $ 1 comma 035.77. a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)? b. If the bond's yield to maturity changes to 9.9 % APR, what will be the bond's price? a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)? The bond's yield to maturity is nothing%. (Round to two decimal places.)
Answer:
a. 8.30 %
b. $918.65
c. 16,60%
Explanation:
a. What is the bond's yield to maturity
Using a Financial Calculator Enter the following respective values and find i.
N = 10×2 = 20
Pmt = $1,000 × 8.6 % / 2 = $43
P/yr = 2
Pv = $ 1,035.77
Fv = $1,000
YTM / i = ?
i = 8.30%
Therefore yield to maturity is 8.30 %
b. What will be the bond's price
Using a Financial Calculator Enter the following respective values and find Pv .
N = 10×2 = 20
Pmt = $1,000 × 8.6 % / 2 = $43
P/yr = 2
Fv = $1,000
YTM / i = 9.90%
Pv = ?
Pv = $ 918.65
Therefore the bond's price is $918.65
c. What is the bond's yield to maturity
bond's yield to maturity - expressed as an APR = 8.30 % × 2
= 16,60%
Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.31 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $1,785,000 in annual sales, with costs of $695,000. The tax rate is 25 percent and the required return on the project is 12 percent. What is the project’s NPV? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, and round your answer to 2 decimal places, e.g., 1,234,567.89.)
Answer:
$115,849.581
Explanation:
For computing the net present value first we have to do following calculations
Annual depreciation expense is
= (Cost - Salvage value) ÷ Useful life
= ($2.31 million ÷ 3)
= $770,000
Now
Annual Operating cash flow = (Sales - Costs) × (1 - tax rate) + Tax savings on Annual depreciation
= ($1,785,000 - $695,000) × (1 - 0.25) + (0.25 × $770,000)
= $817,500 + $192,500
= $1,010,000
Now Present value of annuity is
= Annuity × [1 - (1 + interest rate)^ -time period] ÷ rate
= $1,010,000 × {1 - (1.12)^-3] ÷ 0.12
= $1,010,000 × 2.401831268
= $2,425,849.581
So, Net present value is
= Present value of inflows - Present value of outflows
= $2,425,849.581 - $2,310,000
= $115,849.581
When the non-dividend paying stock price is $20, the strike price is $20, the risk-free rate is 6%, the volatility is 20% and the time to maturity is 3 months, which of the following is the price of a European call option on the stock?
(Note: N(*) represent cumulative normal density function.)
a. 20*N(0.1) - 19.7*N(0.2)
b. 19.7*N(0.2) - 20N*(0.1)
c. 19.7*N(0.1) - 20N*(0.2)
d. 20N*(0.2) - 19.7N*(0.1)
Answer:
The correct option is d.20N(0.2)-19.7N*(0.1)
Explanation:
Given the following inputs:
Stock Price 20
Strike Price 20
Time to maturity: 0.25
Risk-free Rate 0.06
Dividend Yield 0
Annualized volatility 0.2
Cost of Carry 0.06
We get the following outputs:
d1=0.2
d2=0.1
N(d1)=0.57925971
N(d2)=0.53982784
Call=0.94937723
The independent cases are listed below includes all balance sheet accounts related to operating activities:
Case A Case B Case C
Net income $ 303,000 $ 11,500 $ 413,000
Depreciation expense 33,000 143,000 73,000
Accounts receivable increase (decrease) 86,000 (193,000) (13,000)
Inventory increase (decrease) (43,000) 28,000 43,000
Accounts payable increase (decrease) (43,000) 113,000 63,000
Accrued liabilities increase (decrease) 53,000 (213,000) (33,000)
Required:
1. Show the operating activities section of cash flows for each of the given cases. (Amounts to be deducted should be indicated with minus sign.)
Case A Case B Case C
Net Income
Adjustments to Reconcile Net income to Net Cash Provided by Operating Activities
Depreciation
Changes in Assets and Liabilities
Accounts Receivable
Inventory
Accounts Payable
Accrued Liabilities
Net Cash Provided by Operating Activities
Answer:
Explanation:
Cash flow from operating activities:
Case A Case B Case C
Net Income 3,03,000 11,500 4,13,000
Depreciation Expense 33,000 1,43,000 73,000
Accounts Receivable increase(decrease) -86,000 1,93,000 13,000
Inventory increase(decrease) 43,000 -28,000 -43,000
Accounts Payable increase(decrease) -43,000 1,13,000 63,000
Accrued Liabilities increase(decrease) 53,000 -2,13,000 -33,000
Net Cash provided by Operating activities 3,03,000 2,19,500 4,86,000
Answer:
See answer and explanation below.
Explanation:
Details Case A ($) Case B ($) Case C ($)
Net income 303,000 11,500 413,000
Depreciation expense 33,000 143,000 73,000
Changes in Assets and Liab.:
Accounts receivable (86,000) 193,000 13,000
Inventory 43,000 (28,000) (43,000)
Accounts payable (43,000) 113,000 63,000
Accrued liabilities 53,000 (213,000) (33,000)
Net Cash from Operating Act. 303,000 219,500 486,000
Your boss approaches you in mid-December and requests that you pay certain employees their gross pay amount as if there were no deductions as their Christmas bonuses. None of the employees have reached the Social Security wage base for the year. What is the gross-up amount for each of the following employees?
a) The tax rate on bonuses is 28%.
b) The Social Security (6.2%) and Medicare taxes (1.45%) must be added to this rate.
c) Yves St. John, regular gross pay per period $1425 Kim Johnson, regular gross pay per period $2,400
d) Michael Hale, regular gross pay per period $2,240
Answer:
Yves St Jones would be payed $2,214.45
Kim Johnson would be payed $3,729.60
Michael Hale would be payed $3,480.96
Explanation:
Tax rate = Bonus + Social Security + Medicare Tax
= 28.00% + 6.20% + 1.45%
Total Tax rate = 35.65%
Net pay ratio = 100% - Tax rate
= 100% - (28 + 6.2 + 1.45)% = 64.35%
Gross pay = Net pay ÷ Net pay ratio
Employee Regular pay per period Net Pay ratio Gross pay
Yves St Jones $1,425 64.35% $2,214.45
Kim Johnson $2,400 64.35% $3,729.60
Michael Hale $2,240 64.35% $3,480.96
Vasquez Construction has been awarded a contract by a local school board to build a new public school and must provide a performance bond. a. With respect to the performance bond, identify the principal, surety, and obligee. b. If Vasquez Construction fails to complete the building according to the terms of the contract, what would be the surety’s obligation? c. Does the surety have any recourse against Vasquez Construction in this example? Explain your answer.
Answer:
(a) The Vasquez construction is the principal, the surety is the party that underwrites the contract and local school board is the obligee.
(b) If Vasquez fails to finish the contract, then the surety will be required to pay for the loss suffered by the obligee due to the contract failure.
(c) In a surety bonds contract, the surety has a legal right to get back the losses from the principal.
Explanation:
Solution:
(a) Under a performance bond contract, the owners assures that the work will be completed within a specific time frame and contract specification.
In this example given, the Vasquez construction is the principal, the surety is the party that underwrites the contract and local school board is the obligee.
(b) If the Vasquez construction fails to complete or finish the contract, then the surety will be obliged to pay for the loss suffered by the obligee due to the failure of the contract.
(c) In a surety bond contract, the surety has a legal right to recover the losses from the principal. for this later on, the surety can recover it's loss from the principal.
What operations strategy should Nokero pursue? Should it continue to supply all of its light bulb orders from a single factory location in China? In terms of supply chain networks, should Nokero maintain fulfillment warehouses in Africa, Asia, and Latin America? How should Nokero address the last mile issue of accessing people in the most remote locations? How should Nokero build its supply chain footprint in international markets? What regions should it emphasize? A number of potential supply chain partners have asked Nokero for exclusive distribution rights in key geographic markets. Should Nokero grant exclusive country distribution rights? What performance standards or metrics should Nokero put in place for supply chain partners (distributors)?
Answer:
Explanation:
Nokero would benefit in maintaining its fulfillment warehouses in Africa, Asia, and Latin America. Maintaining these warehouses allows Nokero to efficiently transfer its products without the risk of running out of stock. It may be helpful to use Total Cost Analysis, which is ananalysis of all costs that include shipping, inventory, overhead, and risks (Daniels, Radebaugh, &Sullivan, 2015), Nokero may run into issues with costs related to shipping. However, the benefit of product transfer speed may outweigh the costs.Challenges that Nokero face in accessing remote locations may be solved through negotiations of a contract manufacturer, a contracted company who oversees supply-chain and manufacturing (Daniels, Radebaugh, & Sullivan, 2015). Through a contract manufacturer, Nokero can push products to remote locations that are not normally in the shipping radius of its fulfillment plants. Alternatively, Nokero can adopt contract manufacturing for all of its manufacturing and supply chain, while eliminating its current setup. However, Nokero would lose control of these processes – a risk that a global company may not be keen to take.18-5Building a distribution footprint could be accomplished by setting up a logistic system that would reach the current network of customers and also be able to outsource some of their distributions to specific companies of their choice. Nokero should open an additional distribution
NOKERO4center in the African region. As the text informs, Nokero’s “largest customers are distributors, associations, and individuals that have ordered thousands of light bulbs, including Anzocare (South African Alternative Energy Association) and major individual distributors from India, Kenya, Zambia, Ghana, and Fiji” (Daniels, Radebaugh, & Sullivan, 2015 p.724). Because of these customers’ location, additional stress is placed on their current factory located in China, viathe port of Shenzhen, which fulfills large commercial orders while smaller orders are outsourced to their partner, also in Shenzhen, China. Keep in mind that out of this current port, Nokero also fills orders for another large region, which includes, “Afghanistan, Australia, Nigeria, Central America, Cote D’Ivoire, Mali, Burkia Faso, and Vietnam. These regions should be emphasized out of the recommended new location in the region of Africa.
what form of business ownership would you recommend to Alison and why?
Business Case-Alison's coffee shop
Answer:
Sole ownership will be the best for the coffees business
Explanation:
This is because opening a coffee shop comes with the individual usually having a very great deal of passion for it. The recipes for the coffee would also be best suited to a person who prepares it in his/her unique way.
The coffee shops mostly comes with a reasonably average degree of profitability and lower risks due to a low degree of wastage or spoilage and it being very easy to make so it’s best owned by a single person to cut cost and avoid profit sharing .
Wiemers Corporation’s comparative balance sheets are presented below.
WIEMERS CORPORATION
Balance Sheets
December 31
2017 2016
Cash $ 4,500 $ 3,200
Accounts receivable (net) 20,800 23,300
Inventory 10,100 7,200
Land 19,500 26,400
Buildings 70,000 70,000
Accumulated depreciation—buildings (14,600 ) (10,600 )
Total $110,300 $119,500
Accounts payable $ 12,700 $ 31,100
Common stock 74,900 68,600
Retained earnings 22,700 19,800
Total $110,300 $119,500
Wiemers’s 2017 income statement included net sales of $110,000, cost of goods sold of $60,800, and net income of $15,000.
Required:
1. Compute the following ratios for 2017.
a. Current ratio.b. Acid-test ratio.c. Accounts receivable turnover.d. Inventory turnover.e. Profit margin
Answer:
a. Current ratio = 2.79
b. Acid-test ratio = 1.99
c. Accounts receivable turnover = 2.92 times
d. Inventory turnover = 6.02 times
e. Profit margin = 13.64%
Explanation:
2017 Ratios
a. Current ratio = Current Assets / Current Liabilities
= ($ 4,500 + $20,800 + $10,100) / $ 12,700
= 2.79
b. Acid-test ratio = Current Assets - Inventory / Current Liabilities
= ($ 4,500 + $20,800) / $ 12,700
= 1.99
c. Accounts receivable turnover = Cost of Sales / Accounts receivable
= $60,800 / 20,800
= 2.92 times
d. Inventory turnover = Cost of Sales / Inventory
= $60,800 / 10,100
= 6.02 times
e. Profit margin = Net Profit / Sales
= $15,000 / $110,000×100
= 13.64%
The operations of Winston Corporation are divided into the Blink Division and the Blur Division. Projections for the next year are as follows:
Blink Division Blur Division Total
Sales $ 295,000 $ 174,000 $ 469,000
Variable costs 101,000 80,000 181,000
Contribution margin $ 194,000 $ 94,000 $ 288,000
Direct fixed costs 87,000 73,000 160,000
Segment margin $ 107,000 $ 21,000 $ 128,000
Allocated common costs 42,000 34,500 76,500
Operating income (loss) $ 65,000 $ (13,500 ) $ 51,500
Required:
1. If the Blur Division were dropped, Blink Division's sales would increase by 30%. If this happened, the operating income for Winston Corporation, as a whole, would be ___________.
A) $84,500.
B) $65,000.
C) $88,700.
D) $66,950.
Answer:
c. $88,700
Explanation:
The computation of operating income for Winston Corporation is shown below:-
Particulars Dropping before Dropping after
Sales a $469,000 $383,500
($295,000 × 130%)
Variable cost b $181,000 $131,300
($101,000 × 130%)
Contribution margin $288,000 $252,200
(c = a - b)
Direct fixed cost d $160,000 $87,000
Segment margin e $128,000 $165,200
(e = c - d)
Allocated common cost f $76,500 $76,500
Operating income(loss) $51,500 $88,700
(g = d - e)
Therefore to reach the operating income(loss) we simply deduct the allocated common cost from segment margin.
Martin Services Company provides its employees vacation benefits and a defined contribution pension plan. Employees earned vacation pay of $45,000 for the period. The pension plan requires a contribution to the plan administrator equal to 7% of employee salaries. Salaries were $400,000 during the period. Required: Provide the journal entries for (a) the vacation pay and (b) the pension benefit. Refer to the Chart of Accounts for exact wording of account titles.
Answer and Explanation:
The journal entries are shown below:
a. Vacation and Holidays expenses Dr. $45,000
To vacation and Holidays payable $45,000
(Being the Vacation pay is recorded)
For recording this we debited the vacation and holidays expense as it increase the expenses and credited the vacation & holidays payable as it also increase the liabilities
b. Pension Expense Dr. $28,000 ($400,000 × 7%)
To Pension Liability $28,000
(Being the pension benefit is recorded)
For recording this we debited the pension expense as it increase the expenses and credited the pension liability as it also increase the liabilities
Ted is the owner and chief executive officer of a business. He recently began an advertising campaign to promote a new product that is regulated by state law. The law is somewhat unclear. Before launching the campaign, he researched the relevant law and consulted with his attorney in an effort to comply with the law. Nevertheless, the attorney general of his state has filed a lawsuit against him for deceptive advertising. Ted's best defense is that ___________.a. He acted in good faith by conducting due diligence and acting accordingly, under anunclear law.b. Marshall owns and operates a construction firm.c. He uses inexpensive and low-gradebuilding products and accepts inferior carpentry work from his subcontractors.d. Nevertheless, Marshall complies with all the city building codes as well as all state and federal laws.
Answer:
The answer is "Option a"
Explanation:
In the given question only "option a" is correct, which can be described as follows:
He is the owner and managing director of an organization and recently he introduced media attention initiatives to encourage a specific app controlled by federal law.Its law is rather ambiguous. He reviewed the relevant law before starting the initiative and met with his counsel in an attempt to comply with the rule. Even so, this state attorney general's office also filed a suit against him after misleading publicity. He provides the best defense, which acted in good faith with proper research and in line with an unspecified rule.Dalrymple Bay Coal Terminal, a coal-handling facility and export terminal in Queensland, Australia, has issued triple-A rated bonds for $680 million in Australian dollars. The bonds will be used to refinance existing bank debt caused by the acquisition of eases from the Queensland government in 2002. The Commonwealth Bank of Australia acted as investment bankers to the transaction.
Required:
1. This means the Commonwealth Bank of Australia __________.
Group of answer choices:
A. Engaged in factoring the sale
B. Bought the bonds from Dalrymple and sold them to the public
C. Operates in the secondary securities market
D. Was responsible for co-insurance of the bond premium
E. Would be responsible for paying the dividend if Dalrymple were unable to
Answer:
B. Bought the bonds from Dalrymple and sold them to the public
Explanation:
As the Investment Bankers for the event, The Commonwealth Bank of Australia were underwriters to the issue.
One of the methods of Underwriting that Investment bankers embark on is called the FIRM COMMITMENT Principle which states that the Investment bank will.buy all the bonds or shares and then resell them. If they are unable to resell them however, the remaining bonds or stock is their problem.
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 $8 per pound $ 32
Direct labor: 2 hours at $16 per hour 32
Variable overhead: 2 hours at $6 per hour 12
Total standard cost per unit $ 76
The planning budget for March was based on producing and selling 32,000 units. However, during March the company actually produced and sold 37,000 units and incurred the following costs:
a. Purchased 160,000 pounds of raw materials at a cost of $7.40 per pound. All of this material was used in production.
b. Direct laborers worked 67,000 hours at a rate of $17 per hour.
c. Total variable manufacturing overhead for the month was $422,100.
Required:
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?4. What is the materials quantity variance for March?
Answer:
Material cost for planning budget =$1,024,000
Material cost flexible budget =$1,184,000
Material price variance $96,000 favorable
Quantity variance $96,000 unfavorable
Explanation:
Material cost for planning budget = $32 × 32,000 =$1024000
Material cost flexible budget = $32× 37,000 =$1184000
Material price variance: $
160,000 pounds should have cost ( 160,000 × $8.00) 1,280,000
but did cost ( 160,000× $7.40) 1,184,000
Material price variance 96000 favorable
Material quantity variance
pounds
37,000 units should have used (37,000 × 4 pounds) 148,000
but did take 160,000
Variance 12000 unfavorable
standard price × $8.00
Quantity variance $96,000 unfavorable
Presented below is information related to copyrights owned by Ivanhoe Company at December 31, 2020.
Cost $8,620,000
Carrying amount 4,300,000
Expected future net cash flows 4,180,000
Fair value 3,440,000
Assume that Ivanhoe Company will continue to use this copyright in the future. As of December 31, 2020, the copyright is estimated to have a remaining useful life of 10 years.
Required:
(a) Prepare the journal entry to record the impairment of the asset at December 31, 2020. The company does not use accumulated amortization accounts.(b) Prepare the journal entry to record amortization expense for 2021 related to the copyrights
Answer:
A.
Impairment of Intangible Assets
Dr Loss on impairment 860,000
Cr Copyrights 860,000
B.
Dr Amortization expense 344,000
Cr Copyrights 344,000
Explanation:
Ivanhoe Company
Impairment of Intangible Assets
Recoverability test: If the sum of the expected future net cash flows is less or lower than the carrying amount of the asset, then an impairment has occurred.
Asset is Impaired
Expected future cash flow$4,180,000
Carrying value $4,300,000
$(120,000)
A.
Impairment of Intangible Assets
Dr Loss on impairment 860,000
Cr Copyrights 860,000
Fair value test:Carrying amount $ 4,300,000
Fair value 3,440,000
Loss on impairment$ (860,000)
B.
Dr Amortization expense 344,000
Cr Copyrights 344,000
Carrying amount$3,440,000
Useful life ÷10 years
Amortization per year$ 344,000
As an auditor for Bernard and Thomas, you are responsible for determining the proper classification of income statement items in the audit of California Sports Grill. Required: Select whether each of the following items should be classified as discontinued operations, other revenues, or other expenses.
Items Description
a. One of the company's restaurants was destroyed in a forest fire that raged through Southern California. Uninsured losses from Other expenses the fire are estimated to be $450,000
b. Califomia Sports Grill has three operating divisions: restaurants, catering, and frozen retail foods. The company sells the frozen retail foods division of the business for a profit of $2.4 million in order to focus more on the restaurant and catering business
c. An employee strike to increase wages and benefits shut down operations for several days at an estimated cost of $200,000.
d. A restaurant waiter slipped on a wet floor and sued the company. The employeo won a settlement for $100,000, but Califormia Sports Grill has not yet paid the settiement.
e. The company owns and operates over 40 restaurants but sold one restaurant this year at a gain of $650,000 Other revenues
Answer:
a. One of the company's restaurants was destroyed in a forest fire that raged through Southern California. Uninsured losses from the fire are estimated to be $450,000: Other expenses.
b. California Sports Grill has three operating divisions: restaurants, catering, and frozen retail foods. The company sells the frozen retail foods division of the business for a profit of $2.4 million in order to focus more on the restaurant and catering business: Discontinued operations.
c. An employee strike to increase wages and benefits shut down operations for several days at an estimated cost of $200,000: Other expenses.
d. A restaurant waiter slipped on a wet floor and sued the company. The employee won a settlement for $100,000, but California Sports Grill has not yet paid the settlement: Other expenses.
e. The company owns and operates over 40 restaurants but sold one restaurant this year at a gain of $650,000: Other revenues.
Explanation:
Other expenses in business management are non-operating expenses that a business incurs. It is a cost that isn't related to the main operation of a company's business, such as interest expense, losses incurred from disposal of a fixed asset.
Other revenues in business are revenues that are derived by a company from any source other than the company's business operations, such as a company selling one of it's restaurants.
Discontinued operations in business describes a situation where parts of a company's core business are sold, abandoned or shut down and all the profits or losses are usually reported separately on an income statement.
Torres Company accumulates the following summary data for the year ending December 31, 2020, for its Water Division, which it operates as a profit center: sales—$2,076,800 budget, $2,240,000 actual; variable costs—$1,002,000 budget, $1,054,100 actual; and controllable fixed costs—$298,600 budget, $303,800 actual.
Prepare a responsibility report for the Water Division for the year ending December 31, 2020.
Answer and Explanation:
The Preparation of responsibility report is shown below:-
Responsibility report
Torres Company
For the year ended December 31, 2020
Particulars Budgeted Actual Difference
Sales a $2,076,800 $2,240,000 $163,200 Favorable
Variable costs b $1,002,000 $1,054,100 $52,100 Unfavorable
Contribution
margin $1,074,800 $1,185,900 $111,100 Favorable
c = a - b
Controllable
fixed costs d $298,600 $303,800 $5,200 Unfavorable
Controllable
margin $776,200 $882,100 $105,900 Favorable
e = c - d
Therefore if budgeted is higher than actual then it will become Favorable and if actual is higher than budgeted than it will become Unfavorable.
P & G Auto Parts sells parts to AAA Car Repair during 2021. P&G offers rebates of 3% on purchases up to $80,000 and 6% on purchases above $80,000 if the customer’s purchases for the year exceed $300,000. In the past, AAA normally purchases $400,000 in parts during a calendar year. On March 25, 2021, AAA Car Repair purchased $90,000 of parts.
Required:
1. The journal entry to record the purchase includes a ____________.
Answer:
Credit to sales revenue for $87,000
Explanation:
So, in the question above we are given the following parameters or information or data in order to be able to solve this question effectively and the data or parameters are;
=> " rebates of 3% on purchases up to $80,000 and 6% on purchases above $80,000 if the customer’s purchases for the year exceed $300,000"
=> "In the past, AAA normally purchases $400,000 in parts during a calendar year."
=>" On March 25, 2021, AAA Car Repair purchased $90,000 of parts."
Hence, the rebates on $80,000 purchases = 80000 × 3/100 = 2,400.
Rebates on purchases greater than $80,000 = (90,000 - 80,000) × 6/100 = 600.
Total rebate= 2400 + 600 = $3000.
Hence, the net sales revenue = sales - rebate = $90,000 - $3000 = $87,000.
Ziva is an organic lettuce farmer, but she also spends part of her day as a professional organizing consultant. As a consultant, Ziva helps people organize their houses. Due to the popularity of her home-organization services, Farmer Ziva has more clients requesting her services than she has time to help if she maintains her farming business. Farmer Ziva charges $25 an hour for her home-organization services. One spring day, Ziva spends 10 hours in her fields planting $130 worth of seeds on her farm. She expects that the seeds she planted will yield $300 worth of lettuce.
Refer to Scenario 13-3. Ziva's economic profit from farming equals _______.
Answer:
Economic profit= -$80
Explanation:
Giving the following information:
Farmer Ziva charges $25 an hour for her home-organization services. One spring day, Ziva spends 10 hours in her fields planting $130 worth of seeds on her farm. She expects that the seeds she planted will yield $300 worth of lettuce.
The economic profit includes the opportunity cost of not working as a home-organization.
Economic profit= (300 - 130) - 25*10
Economic profit= -80
New Orleans Chemicals Company follows the indirect method to prepare its statement of cash flows. Refer to the following portion of the comparative balance sheet:
New Orleans Chemicals Company
Comparative Balance Sheet
December 31, 2018 and 2017
2018 2017 Increase/ (Decrease)
Common Stock $ $35,000 $2,200 $32,800
Retained Earnings 157,000 92,000 65,000
Treasury Stock (8,100) (5,200) (2,900)
Total Equity $183,900 $89,000 $94,900
Net Income for 2018 was $94,000.
Based on the above information, determine the amount of dividends declared during 2018.
Answer:
$2,000
Explanation:
The dividend here can be calculated using the following formula:
Dividend paid = (Closing Retained Earnings - Opening Retained Earnings + Profit for the year)
Here,
Closing Retained Earnings is $157,000
Opening Retained Earnings is $65,000
And
Profit for the year is $94,000
By putting values, we have:
Dividend paid = $65,000 + $94,000 - $157,000
= $2,000
Here are selected data for Sunny Sky Corporation: Beginning raw materials inventory $37,000 Beginning work in process inventory $62,200 Beginning finished goods inventory $58,300 Cost of materials purchased $151,000 Cost of direct materials requisitioned $91,300 Direct labor incurred $135,000 Actual manufacturing overhead $160,000 Cost of goods manufactured $287,000 Cost of goods sold $265,000 Manufacturing overhead rate (per dollar of direct labor cost) $1.25 What is the finished goods ending inventory
Answer:
Value of closing inventory = $60,300
Explanation:
The closing inventory represents the value of goods available for sale but yet to be sold as at the end of a particular period of time . It is calculated as follows:
Closing inventory = opening inventory + goods manufactured - cost of goods sold
58,300 + 287,000 - 285,000 = 60,300
Value of closing inventory = $60,300
Thermal Rising, Inc., makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders. Management has designed an activity-based costing system with the following activity cost pools and activity rates:
Activity Cost Pool Activity Rate
Supporting direct labor $26 per direct labor-hour
Order processing $284 per order
Custom designing processing $186 per custom design
Customer service $379 per customer
Management would like an analysis of the profitability of a particular customer, Big Sky Outfitters, which has ordered the following products over the last 12 months:
Standard Model Design Custom Model
Number of gliders 20 3
Number of orders 1 3
Number of custom designs 0 3
Direct labor-hours per glider 26.35 28.00
Selling price per glider $1,850 $2,400
Direct materials cost per glider $564 634
The company's direct labor rate is $19.50 per hour.
Using the company's activity-based costing system, compute the customer margin of Big Sky Outfitters.
Answer:
$1,144
Explanation:
According to the scenario, computation of the given data are as follow:-
Particular Amount ($)
Sales 44,200
Less-Direct material cost of grinder 13,182
Less-Direct labor cost 11,915
Less-Supporting direct labor 15,886
Less- Order processing 1,136
Less-customer service 379
Less- Custom designing 558
Margin of customer of big sky outfitters 1,144
Working notes
1 . Sales = Selling Price Per Grinder × No. of Grinder
= $1,850 × 20 + $2,400 × 3
= $37,000 + $7,200
= $44,200
Direct Material Cost of Grinder = Selling Price Per Grinder × No. of Grinder
= $564 × 20 + $634 × 3
= $11,280 + $1,902
= $13,182
Direct Labor Cost = No. of Grinder × Direct Labor Hour - Per Grinder × Direct Labor Rate
= 20 × 26.35 × $19.50 + 3 × 28 × $19.50
= $10,276.5 + $1,638
= $11,914.5
Supporting Direct Labor = No. of Grinder × Direct Labor Hour-Per Grinder × Supporting Direct Labor Per Direct Labor-Hour
=20 × 26.35 × $26 + 3 × 28 × $26
= $13,702 + $2,184
= $15,886
Order Processing = Total No. of Order × Order Processing Per Order
= ( 1+3) × $284
= 4 × $284
= $1,136
Custom Designing = Total No. of Custom Designing × Price Per Custom Designing
=(0+3) × $186
= $558
The customer margin is $1,144
Computation for the customer margin of Big Sky Outfitters Using the company's activity-based costing.
Revenue $44,200
[($1,850×20)+($2,400×3)
Costs:
Direct materials $13,182
[($564×20)+($634×3)]
Direct labor $11,915
[(26.35×20×19.5)+(28×3×19.5)]
Supporting Direct labor $15,886
[(26.35×20×26)+(28×3×26)]
Order processing $1,136
[(1×284)+(3×284)]
Custom design processing $558
(3×186)
Customer service $379
Total costs $43,056
Customer margin $1,144
($44,200-$43,056)
Inconclusion the customer margin is $1,144.
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