Answers
Answer:
D) $26,000
Explanation:
The computation of the acquisition value associated with the non-controlling interest is shown below:
= Cash ÷ acquiring percentage × non- owning percentage
= $234,000 ÷ 0.90 × 0.10
= $26,000
It is computed by simply applied the above formula so that the acquisition value in case of non controlling interest could arrive and the same is to be considered
Related Questions
What do you think are the possible major tensions that exist when a pharmaceutical firm forms an alliance with a biotechnology firm?
Answers
Answer:
The answer is below
Explanation:
Possible major tensions that exist when a pharmaceutical firm forms an alliance with a biotechnology firm are the following amongst others:
1. There is high competition from other alliances between different pharmaceutical and biotechnological firms:
In recent times, several pharmaceutical and biotechnological firms are establishing partnerships with a high probability of success, in the development of drugs and marketing. This has led to more competition and which made firms to be under immense pressure to formulate new products.
2. More public attention of the business methods and profits by the government:
Many policies and regulations regarding the healthcare sectors are designed to checkmate corrupt practices in the health industry. Thus, such alliances need to accept such regulations and operate. Otherwise, this may result in the cancellation of the permission of the operation.
3. The interdependence of the firms involved:
Both firms might find it difficult to operate most specifically at the beginning, as there will be little tension when it comes to management decisions and operation.
With this in mind, are accountants ethically obligated to report financial information accurately? Does reporting using the generally accepted accounting principles imply accuracy? What are some potential consequences for an external analyst if a company provides inaccurate or misleading financial statements?
Answers
Answer:
1. Accountants are ethically obligated to report financial information accurately
2. Reporting using the generally accepted accounting principles underscore on accuracy
3. Loss of confidence, lack of trust on the accounting team, a huge strain on their professional judgement and ethics.
Explanation:
1. Financial information in itself possesses some vital characteristics. One of these is the accuracy of the financial information. As the handler of financial activities, accountants are therefore saddled and ethically obligated to present and prepare their information accurately. This is so as to reflect the true picture of the going in the organization.
2. Reporting using GAAP - Generally Accepted Accounting Principles, seeks to converge the presentation of financial reports and statements on the basis of accuracy. Thus, reliability and relevance are ultimately the foremost objectives of these principles. I therefore have no doubt its usage conveys accuracy of reports.
3. Loss of confidence - financial reports through which the external analyst worked upon are often prepared by the internal staffs. The implication of a wrong and misleading reports from the company is an erosion of confidence on the credibility, reliability and competence of company's preparers of reports.
Lack of trust - The point above ultimately impacts on the level of trust placed on the accuracy, reliability and relevance of financial reports.
Professional Judgement and Ethics - The conducts of the company in presenting a wrong report throws the analyst into an ethnical dilemma, and a huge professional strain. This is not in line with best practices.
You recently purchased a stock that is expected to earn 20 percent in a booming economy, 15 percent in a normal economy, and lose 2 percent in a recessionary economy. There is 21 percent probability of a boom, 72 percent chance of a normal economy, and 7 percent chance of a recession. What is your expected rate of return on this stock
Answers
Answer:
rE = 0.1486 or 14.86%
Explanation:
The expected rate of return of a stock is the mean return that is expected to be earned by the stock considering the different scenarios that can occur, the return in these scenarios and the probability of the occurrence of these scenarios. The formula for expected rate of return of stock is,
rE = pA * rA + pB * rB + ... + pN * rN
Where,
pA, pB, ... represents the probability that scenario A, B and so on will occur or the probability of each scenariorA, rB, ... represents the return in scenario A, B and so onrE = 0.21 * 0.2 + 0.72 * 0.15 + 0.07 * -0.02
rE = 0.1486 or 14.86%
You have a credit card with a balance of $12,100 and an APR of 17.5 percent compounded monthly. You have been making monthly payments of $235 per month, but you have received a substantial raise and will increase your monthly payments to $285 per month. How many months quicker will you be able to pay off the account
Answers
Answer:
you will pay off your debt in 32 months less
Explanation:
I prepared two amortization schedules:
if you pay $235, it will take you 99 months to pay off your debt
if you pay $285, it will take you 67 months to pay off your debt
A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. The company bases its variable manufacturing overhead standards on direct labor-hours.
Standard hours per unit of output 5.30 DLHs
Standard variable overhead rate $ 11.66 per DLH
The following data pertain to operations for the last month:
Actual direct labor-hours 8,800 DLHs
Actual total variable manufacturing overhead cost $ 96,000
Actual output 1,500 units
What is the variable overhead efficiency variance for the month?
a. $6,883 U
b. $6,883 F
c. $9,911 U
d. $3,252 U
Answers
Answer:
Variable overhead efficiency variance= $9,911 unfavorable
Explanation:
Giving the following information:
Standard hours per unit of output 5.30 DLHs
Standard variable overhead rate $ 11.66 per DLH
Actual direct labor-hours 8,800 DLHs
Actual output 1,500 units
To calculate the variable overhead efficiency variance, we need to use the following formula:
Variable overhead efficiency variance= (Standard Quantity - Actual Quantity)*Standard rate
Standard quantity= 5.3*1,500= 7,950
Variable overhead efficiency variance= (7,950 - 8,800)*11.66
Variable overhead efficiency variance= $9,911 unfavorable
$400,000 capital investment proposal has an estimated life of 4 years and no residual value. The estimated net cash flows are as follows: Year Net Cash Flow 1 $200,000 2 150,000 3 90,000 4 80,000 The minimum desired rate of return for net present value analysis is 12%. The present value of $1 at compound interest of 12% for 1, 2, 3, and 4 years is 0.893, 0.797, 0.712, and 0.636, respectively. Determine the net present value.
Answers
Answer:
Net present value = $13,110
Explanation:
The computation of the net present value is shown below:
Years Cash flows Present value factor Present value
0 -$400,000 1 -$400,000 (A)
1 $200,000 0.893 $178,600
2 $150,000 0.797 $119,550
3 $90,000 0.712 $64,080
4 $80,000 0.636 $50,880
Net present value $13,110 (B - A)
The following information is available for Fuller Manufacturing Company for the month ending October 31:_______.
Cost of direct materials used in production $1,323,600
Direct labor 1,680,000
Work in process inventory, October 1 455,300
Work in process inventory, October 31 378,100
Total factory overhead 3,544,200
Determine Fuller Manufacturing's cost of goods manufactured for the month ended October 31.
Answers
Answer:
$6,625,000
Explanation:
Direct material $1,323,600
Direct labor. $1,680,000
Total factory overhead. $3,544,200
Add: Opening work in process inventory $455,300
Less: Closing work in process inventory ($378,100)
Costs of goods manufactured $6,625,000
A woman worked for 30 years before retiring. At the end of the first year of employment she deposited 5000 into an account for her retirement. At the end of each subsequent year of employment, she deposited 3% more than the prior year. The woman made a total of 30 deposits. She will withdraw 50,000 at the beginning of the first year of retirement and will make annual withdrawals at the beginning of each subsequent year for a total of 30 withdrawals. Each of these subsequent withdrawals will be 3% more than the prior year. The final withdrawal depletes the account. The account earns a constant annual effective interest rate. Calculate the account balance after the final deposit and before the first withdrawal.
Answers
Answer:
$797,837
Explanation:
the first withdrawal is $50,000
the second is $51,500
and so on...
the formula that used to solve the interest rate earned by the annuity is:
$50,000 x {[(1 + i)³⁰ - (1 + 3%)³⁰] / [(1 + i)³⁰ x (i - 3%)]} x (1 + i) = $5,000 x {[(1 + i)³⁰ - (1 + 3%)³⁰] / (i - 3%)}
we start to simplify the equation by cancelling {[(1 + i)³⁰ - (1 + 3%)³⁰] / (i - 3%)}
[$50,000 x (1 + i)] / (1 + i)³⁰ = $5,000
now we cancel $5,000 on each side:
[10 x (1 + i)] / (1 + i)³⁰ = 1
now lets take away (1 + i):
10 / (1 + i)²⁹ = 1
things get a little bit more simple now:
10 = (1 + i)²⁹
²⁹√10 = ²⁹√(1 + i)²⁹
1.082636734 = 1 + i
i = 1.082636734 - 1 = 0.082636734 = 8.2636734%
now we replace i in any equation:
= $50,000 x {[(1 + 0.082636734)³⁰ - 1.03³⁰] / [(1 + 0.082636734)³⁰ x (0.082636734 - 0.03)]} x (1 + 0.082636734)
= $50,000 x {[10.82636738 - 2.427262471] / [10.82636738 x 0.052636734]} x (1 + 0.082636734)
= $50,000 x {8.399104909 / 0.56986462} x (1.082636734)
= $50,000 x 14.73877236 x 1.082636734
= $797,837
The coupon rate on a debt issue is 6%. If the yield to maturity on the debt is 9%, what is the after-tax cost of debt in the weighted average cost of capital if the firm's tax rate is 34%
Answers
Answer:
Weighted average cost of capital= 5.94%
Explanation:
The cost of debt is the required rate of return payable to investors in the debt instruments of a company. These investors include providers of long term debt finance to the company.
The cost of debt finance can determined by working out the yield to maturity on debt with adjustment for tax.
It is noteworthy that debt finance affords the company a tax savings advantage because interest expense incurred on the use of debt of are tax deductible expense.
After-tax cost of debt = (1- Tax rate) × before-tax cost of debt
Before tax cost of debt = 9%
Tax rate = 34%
After-tax cost of debt = (1-0.34) × 9% = 5.94%
After-tax cost of debt = 5.94%
Weighted average cost of capital= 5.94%
Timmy Company's comparative balance sheet at January 31, 2017, and 2016. reports the following (in millions):
Three situations about Timmy Company's issuance of stock and declaration and payment of dividends during the year ended January 31, 2017.
follow. Read the requirements.
Begin by reviewing the labels for the change in stockholders' equity and then enter the amounts for each situation. (Enter an amount in each input area. Input a "0" when there is no amount to be entered. Enter amount millions. Use a minus sign or parentheses when entering net losses or numbers to be subtracted.)
Total stockholders' equity, January 31, 2016
Add: Issuance of stock
Net income
Less: Dividends declared
Net loss
Total stockholders' equity, January 31, 2017
For each situation, use the accounting equation and the statement of retained earnings to compute the amount of Timmy's net income or net loss during the year ended January 31 2017.
1. Timmy issued $13 million of stock and declared no dividends.
2. Timmy issued no stock but declared dividends of $17 million.
3. Timmy issued $20 million of stock and declared dividends of $27 million.
Answers
Answer:
The Accounting Equation states that;
Assets = Liabilities + Equity
Equity as at 2016 = Assets - Liabilities
= 50 - 13
= $37 million
Equity as at 2017 = Assets - Liabilities
= 77 - 18
= $59 million
1. Timmy issued $13 million of stock and declared no dividends.
The Net Income ( loss) will be the figure that gives the Statement of Equity a figure of $59 million.
Net Income = Total stockholders' equity, January 31, 2017 - Total stockholders' equity, January 31, 2016 - Issuance of stock
= 59 - 37 - 13
= $9 million
Total stockholders' equity, January 31, 2016 ................ 37
Add: Issuance of stock ......................................................... 13
Net income ......................................................................9
Less: Dividends declared......................................................0
Net loss.......................................................................................0
Total stockholders' equity, January 31, 2017...................59
2. Timmy issued no stock but declared dividends of $17 million.
Net Income (loss) = Total stockholders' equity, January 31, 2017 - Total stockholders' equity, January 31, 2016 + Dividends Declared
= 59 - 37 + 17
= $39 million
Total stockholders' equity, January 31, 2016 ................ 37
Add: Issuance of stock ......................................................... 0
Net income ......................................................................39
Less: Dividends declared......................................................(17)
Net loss.......................................................................................0
Total stockholders' equity, January 31, 2017...................59
3. Timmy issued $20 million of stock and declared dividends of $27 million.
Net Income (loss) = Total stockholders' equity, January 31, 2017 - Total stockholders' equity, January 31, 2016 + Dividends Declared - Issuance of stock
= 59 - 37 + 27 - 20
= $29 million
Total stockholders' equity, January 31, 2016 ................ 37
Add: Issuance of stock ......................................................... 20
Net income ......................................................................29
Less: Dividends declared......................................................(27)
Net loss.......................................................................................0
Total stockholders' equity, January 31, 2017...................59
Norek Corp. owned 70% of the voting common stock of Thelma Co. On January 2, 2018, Thelma sold a parcel of land to Norek. The land had a book value of $42,000 and was sold to Norek for $75,000. Thelma's reported net income for 2018 was $200,000. What is the non-controlling interest's share of Thelma's net income?
Answers
Answer:
$50,100
Explanation:
The computation of the non-controlling interest share is shown below:
= {Net income - (Sale value - book value)} × non owning percentage
= {$200,000 - ($75,000 - $42,000)} × 0.30
= ($200,000 - $33,000) × 0.30
= $50,100
Hence, the non controlling interest share of net income is $50,100 and the same is to be considered
The manager at Tom's Taxidermy expects to sell units at each unit. In order for the manager to breakeven, the manager must sell units. What is the margin of safety in dollars?
Answers
The manager at Tom's Taxidermy expects to sell 900 units at $80 each unit. In order for the manager to breakeven, the manager must sell 100 units. What is the margin of safety in dollars?
Answer:
$64,000
Explanation:
Given that, the margin of safety is a term that describes the disparity between the actual sales volume and the breakeven volume.
In this case, Tom's Taxidermy expects to sell 9,00 units at $80 each and their breakeven volume is 100 units, the margin of sales, in dollars, is:
MS = ( 900 - 100) * $80
MS = 800 * $80
= $64,000
Therefore, the right answer as Margin of Safety in dollars = $64,000
Skor Co. leased equipment to Douglas Corp. on January 2, 2011 for a 7-year period expiring December 31, 2017. Equal payments under the lease are $600,000 and are due on January 2 of each year. The first payment was made on January 2, 2011. The cost of the equipment is $2,400,000. The lease is appropriately accounted for as a sales-type lease. The present value of the lease payments is $2,800,000. What is the effect on Cost of Goods Sold for the year ended December 31, 2011?
Answers
Answer:
$2,400,000
Explanation:
Always remember that in the case of a sales type lease, the lessor at the inception of the sales type lease would recognize sale of equipment at a price of present value of the lease payments which is $2,800,000 and cost of goods sold will be recorded at cost of equipment which is $2,400,000.
Case 1: If the equipment was an inventory then the double entry would be as under:
Recording of Sales:
Dr Lease Asset $2,800,000
Cr Sale of Inventory $2,800,000
Recording of inventory out:
Dr Cost of Goods Sold $2,400,000
Cr Inventory Account $2,400,000
Case 2: If the equipment was fixed asset then the double entry would be as under:
Recording of Sales:
Dr Lease Asset $2,800,000
Cr Sale of Fixed Asset $2,800,000
Recording of equipment handing over to customer:
Dr Cost of Goods Sold $2,400,000
Cr Equipment Account $2,400,000
In both of the cases the cost of goods sold will be $2,400,000.
How much total depreciation and amortization expense did Patnode record during 2015?
a. $10,000
b. $6,000
c. $3,000
d. $5,000
Answers
Answer:
d. $5,000
Explanation:
Patnode's information is missing, so I looked it up. I found the balance sheet for 2014 and 2015. Hope that it is the same question:
total depreciation expense for 2015 = change in accumulated depreciation (2015 - 2014) + change in accumulated amortization (2015 - 2014) = ($3,000 - $0) + ($3,000 - $1,000) = $3,000 + $2,000 = $5,000
The condensed income statement for a business for the past year is as follows: Product T U Sales $660,000 $320,000 Less variable costs 540,000 220,000 Contribution margin $ 120,000 $100,000 Less fixed costs 145,000 40,000 Income (loss) from operations $ (25,000) $ 60,000 Management is considering the discontinuance of the manufacture and sale of Product T at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Product U. What is the amount of chang
Answers
Answer:
Decrease in Net Income to the amount of $120,000
Explanation:
Some words are missing. The word are "change in net income for the current year that will result from the discontinuance of product T?"
Solution
Product T
Sales $660,000
Less: Variable cost $540,000
Contribution margin $120,000
Interpretation: By discontinuing Product T, therefore there will be a decrease in Net Income to the amount of $120,000
2.Privacy goes hand in hand with security, but many of the activities of information security analysts seem to be an invasion of privacy. Discuss how employers can justify the use of tools, such as Encase by Guidance Software.
Answers
Answer And Explanation:
Privacy and security do work in hand in hand and complement each other in ensuring information security .By privacy we mean data that should not be available to the public and is only privy to individuals or organizations that can be attributed to ownership or use of the data. Private data could be such things as documents, photos, emails or tax returns of a person. security on the other hand are measures taken both technological or otherwise to protect the data and only give access to who should have access to the data example the owner of the photos. More specifically, security on this sense measures or comprises how secure our data is from external and undesired/unauthorized access bordering on such things as terms of network security,hardware security or data security.
Now for a security analyst to be able to protect your data, there is need to have access to your data and be able to keep track of data stored and packet flow. This could be argued to contradict privacy of data but it can be concluded that the security analyst cannot protect your data if he is not able to scan and keep track of data and therefore have access to the data.
It therefore goes to say that there must be a balance between security and privacy as they are both complementary. Encase by Guidance Software is a good example of a security software that somewhat compromises security to achieve maximum security. It is known to permeate all private data of employees in organization in the bid to keep track and protect against any malicious attacks or illegal activity. In other words, while it may seem like it violates privacy, it balances it with full protection
What aspect of evaluating a supplier might be affected by meeting government standards?
A. Completeness of orders
B. Quality
C. Flexibility
D. Timeliness
Answers
Answer:
B. Quality
Explanation:
Quality of goods and services rendered by a supplier could be affected by government standards as a result of the established methods by the government. For example, meat supplier has to abide to government standards when supplying to markets and retail sellers.
g. How does the equation for valuing a bond change if semiannual payments are made? Find the value of a 10-year, semiannual payment, 10% coupon bond if the nominal rd 13%. Ehrhardt, Michael C.. Corporate Finance: A Focused Approach (p. 236). Cengage Learning. Kindle Edition.
Answers
Answer:
$834.73
Explanation:
the market value of the bonds is calculated by adding the present value of its maturity value (face value) + the present value of its coupon payments. The discount rate will be the market rate instead of the coupon rate:
PV of face value = $1,000 / (1 + 6.5%)²⁰ = $283.80
PV of coupon payments = $50 x 11.01851 (PV annuity factor, 6.5%, 20 periods) = $550.93
the bond's market value = $283.80 + $550.93 = $834.73
Suppose a local hardware store has explicit costs of $2 million per year and implicit costs of $44,000 per year. If the store earned an economic profit of $50,000 last year, this means that the store's accounting profit equaled:
Answers
Answer:
$94,000
Explanation:
A local hardware store has explicit cost of $2 million per year
The implicit costs are $44,000 per year
The store earned an economic profit of $50,000 last year
Therefore, the store's accounting profit can be calculated as follows
Accounting profit = Implicit costs + economic profit
= $44,000 + $50,000
= $94,000
Hence the store's accounting profit is $94,000
A project with an initial cost of $51,400 is expected to generate annual cash flows of $16,910 for the next 5 years. What is the project's internal rate of return
Answers
Answer:
19.27%
Explanation:
Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested
IRR can be calculated with a financial calculator
Cash flow in year 0 = $-51,400
Cash flow each year from year 1 to 5 = $16,910
IRR = 19.27%
To find the IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
On January 1, 2018, Bishop Company issued 10% bonds dated January 1, 2018, with a face amount of $19.3 million. The bonds mature in 2027 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided. Round your intermediate calculations to the nearest whole dollar.) Required: 1. Determine the price of the bonds at January 1, 2018. 2. Prepare the journal entry to record the bond issuance by Bishop on January 1, 2018. 3. Prepare the journal entry to record interest on June 30, 2018, using the effective interest method. 4. Prepare the journal entry to record interest on December 31, 2018, using the effective interest method.
Answers
Answer:
1) $19.3 million in bonds issued January 1, 2018
coupon rate 10%, semiannual 5% interest
maturity = 10 years x 2 = 20 periods
market interest rate = 12% / 2 = 6% semiannual
1) market price of the bonds:
PV of face value = $19,300,000 / (1 + 6%)²⁰ = $6,017,831.23
PV of coupon payments = $965,000 x 11.470 (PV annuity factor, 6%, 20 periods) = $11,068,550
market price = $17,086,381.23 ≈ $17,086,381
2) January 1, 2018, bonds issued at a discount
Dr Cash 17,086,381
Dr Discount on bonds payable 2,213,619
Cr Bonds payable 19,300,000
3) June 30, 2018, first coupon payment
Dr Interest expense 1,025,183
Cr Cash 965,000
Cr Discount on bonds payable 60,183
amortization of bond discount = ($17,086,381 x 6%) - $965,000 = $1,025,182.86 - $4,860,000 = $60,182.86 ≈ $60,183
4) December 31, 2018, second coupon payment
Dr Interest expense 1,028,794
Cr Cash 965,000
Cr Discount on bonds payable 63,794
amortization of bond discount = ($17,146,564 x 6%) - $965,000 = $1,028,793.84 - $965,000 = $63,793.84 ≈ $63,794
The alternative to viewing management as a process is to focus on
A/ Strategy
B/ People
C/ Resources
Answers
Answer:
B/ People
Explanation:
This is because, the ability to manage people and direct them on what is expected of them to do and not to do can be viewed as management. For example, directing workers on what job duties to do in a sugar manufacturing company is called management.
Valentine is a producer in a monopoly industry. Her demand curve and total cost curve are given as follows: Q = 160 - 4P ; TC = 4Q. The price of her product will be:
Answers
Answer: b) $22
Explanation:
A Monopoly will maximise output where Marginal Revenue equals Marginal cost.
Marginal revenue (MR) is the differential of Total revenue.
= (dTR/dQ ) 40Q - 0.25Q^2
= 40 - 0.5Q
Marginal Cost is the differential of Total cost.
= dTC/dQ
= 4
MR = MC
40 - 0.5Q = 4
36 = 0.5Q
Q = 72 units is the maximising quantity.
Price
Q = 160 - 4P
72 = 160 - 4P
4P = 160 -72
4P = 88
P = $22
In which situations is a broker/seller NOT required to provide a written disclosure regarding the broker's license status?
Answers
Answer: when the broker is selling property for the broker's sister
Explanation:
The situations in which a broker or seller is not required to provide a written disclosure regarding the broker's license status is when the broker is selling property for the broker's sister.
It should be noted that license holders
that wants to either purchase or sell a property on their behalf or for a relation should disclose that they are licensed and this should be done in writing.
On June 1, Pina Colada Corp. borrows $111,000 from First Bank on a 6-month, $111,000, 8% note.
Required:
a. Prepare the entry on June 1.
b. Prepare the adjusting entry on June 30.
c. Prepare the entry at maturity (December 1), assuming monthly adjusting entries have been made through November 30.
Answers
Answer:
June 1
Cash $111,000 (debit)
Note Payable $111,000 (credit)
June 30
Interest expense $1,480 (debit)
Note Payable $1,480 (credit)
Nov 30
Note Payable $119,800 (debit)
Cash $119,800 (credit)
Explanation:
June 1
Recognize the Cash Asset received and a liability Note Payable
June 30
Interest for 1 month has accrued and this is calculated as :
Interest Expense = $111,000 × 8% × 1/6
= $1,480
Nov 30
Total Interest is capitalized to the Note Payable and the full amount is repaid
Total Interest = $111,000 × 8%
= $8,800
Ballon Amount = $111,000 + $8,800
= $119,800
On January 1, 2018, Gibson Corporation entered into a four-year operating lease. The payments were as follows: $26,000 for 2018, $20,500 for 2019, $18,000 for 2020, and $14,500 for 2021. What is the correct amount of total lease expense for 2019
Answers
Answer: $19,750
Explanation:
The Annual Lease expense is the average of the lease over the 4 year period.
Annual Lease Expense = Total lease expense / number of years
= (26,000 + 20,500 + 18,000 + 14,500) / 4
= 79,000 / 4
= $19,750
Cobe Company has already manufactured 17,000 units of Product A at a cost of $20 per unit. The 17,000 units can be sold at this stage for $490,000. Alternatively, the units can be further processed at a $300,000 total additional cost and be converted into 5,400 units of Product B and 11,400 units of Product C. Per unit selling price for Product B is $104 and for Product C is $56.Prepare an analysis that shows whether the 17,000 units of Product A should be processed further or not.
Sell as is ProcessFurther
Sales
Relevant costs:
Total relevant costs
Income (loss)
Incremental net income (or loss) if processed further
The company should
Answers
Answer:
Income (loss) $490,000 $928,000
Net incremental income= $438,000
17,000 units of product A should be processed further.
Explanation:
Preparation of analysis that shows whether 17,000 units of Product A should be processed further or not.
Sell Process further
Sales $490,000 $1,228,000
Relevant costs
Additional cost to process further $300,000
Total relevant costs $300,000
Income (loss) $490,000 $928,000
Calculation for sales after processing further
Sales after processing further = (5,400 x $104) + (11,900 x $56)
Sales after processing further= $561,600 + $666,400
Sales after processing further= $1,228,000
Calculation for Net incremental income
Net incremental income = $928,000 - $490,000
Net incremental income= $438,000
Therefore 17,000 units of product A should be processed further.
You are saving money for a down payment on a house. Suppose you want to have total savings of $20,000 in 10 years time and you have currently $5,000. What annual interest rate do you need to earn on your initial investment, assuming you contribute no additional savings?
Answers
Answer:
14.87%
Explanation:
we have to use the future value formula to solve this question:
future value = present value x (1 + rate)ⁿ
you need to save $20,000 in 10 years (this is your future value)
currently you have $5,000 which will be $5,000 x (1 + r)¹⁰
$20,000 = $5,000 x (1 + r)¹⁰
(1 + r)¹⁰ = $20,000 / $5,000
(1 + r)¹⁰ = 4
¹⁰√(1 + r)¹⁰ = ¹⁰√4
1 + r = 1.1487
r = 1.1487 - 1
r = 0.1487 = 14.87%
The following information describes a company's usage of direct labor in a recent period: Actual direct labor hours used Actual rate per hour Standard rate per hour Standard hours for units produced How much is the direct labor efficiency variance?
Answers
Answer: a) $26,000 Favorable
Explanation:
The Direct labor efficiency variance checks the how well staff are actually utilizing labor hours vs how they are expected to be utilizing it and is calculated by the formula;
Direct Labor Efficiency variance = (Standard hours – Actual hours) x Standard rate
Direct Labor Efficiency variance = ( 43,000 - 41,000 ) * 13
Direct Labor Efficiency variance = $26,000
As the Standard hours are higher than the actual hours used, this is considered a Favorable Variance.
The ratio of profit, cost of material and labour in the production of an article is 5:7:13 respectively. If the cost of material is 840 more than that of labour, find the cost of producing the article
Answers
Answer:
Explanation:
SOLUTION: The ratio of the profit, cost of materials and labour in the production of an article is 5 : 7: 13 respectively. If the cost of materials is GH¢ 840 more than that of labour. fin
The ratio of the profit, cost of materials and labour in the production of an article is 5 : 7: 13 respectively. If the cost of materials is GH¢ 840 more than that of labour. find the total cost of producing the article.
Note: GH¢ stands for Ghana Cedis
The problem formulation is HEAVILY INCORRECT.
One part of the condition says that the cost of materials and the labor are 7x and 13x respectively,
where x is their common measure, a positive value.
The other part says that the cost of materials (7x) is 840 MORE than that of labor (13x).
It can not be so, BECAUSE it can NEVER be so.
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