Answer:
The aim here is to create a list of tasks that will enable the team to complete and deliver the project within the given timeline. It would be appropriate if there are four students selected and each of them is assigned particular tasks based on the kind of background they have. They would be obliged to keep track of their progress and share it with everyone else on a regular basis so that the project can be completed on time.
Hope that answers the question, have a great day!
Ellie has been working for an engineering firm and earning an annual salary of $80,000. She decides to open her own engineering business. Her annual expenses will include $15,000 for office rent, $3,000 for equipment rental, $1,000 for supplies, $1,200 for utilities, and a $35,000 salary for a secretary/bookkeeper. Ellie will cover her start-up expenses by cashing in a $20,000 certificate of deposit on which she was earning annual interest of $500.
Ellie's annual implicit costs will equala. $55,200.b. $75,200.c. $80,500.d. $165,700.
Answer:
c. $80,500
Explanation:
The computation of the implicit cost is shown below:
Implicit cost = Annual salary earned + annual interest earned on certificate of deposit
= $80,000 + $500
= $80,500
We simply added the annual salary earned and annual interest earned i.e income that is foregone so that the implicit cost could arrive
All other information which is mentioned in the question is not relevant. Hence, ignored it
Crafting a strategy to compete in one or more foreign markets can be considered complex because 34) A) factors that affect industry competitiveness are the same from country to country. B) different government policies and economic conditions make the business climate more favorable in some countries than in others. C) the potential for location-based advantages to conducting value chain activities in certain countries. D) buyer tastes and preferences differ among countries and present a challenge for companies concerning. customizing versus standardizing their products and services. E) currency exchange rates among countries are generally fixed and rarely change.
Answer:
Options A, B, C, and E.
(Please check the explanation section before you judge or pick your answer)
Explanation:
The options A, B, C, and E are the options that are considered complex if we want to Craft a strategy to compete in one or more foreign markets.
Please take note that if the question asked us to pick which of the options is NOT a inherently complex reason when crafting a strategy to compete in one or more foreign markets then we would have picked Option D.
As given in the question, that is option D which says; '' buyer tastes and preferences creates challenges in standardizing products and services." Will not be a reason for crafting a strategy to compete in one or more foreign markets is inherently complex.
Countries due to globalization tends to participate in international trades. Competition in the international trade has its advantages as well as its disadvantages or risks.
To trade in the international market, countries must have their individual strategies and Option D above is NOT a inherently complex reason when crafting a strategy to compete in one or more foreign markets
Answer:
The correct answer is the option D: buyer tastes and preferences differ among countries and present a challenge for companies concerning customizing versus standardizing their products and services.
Explanation:
To begin with, the fact that a company is looking forward to expand its business to other countries needs to be very carefully planned because every business would be manage in different ways in differents areas and that is due to the differences in those countries, in their cultures and social believes as well. That is why, that to craft a strategy to compete in one or more foreign markets can be considered complex because of the different preferences and tastes that buyers in those places will have and due to that the company will need to adjust to that type of customer and therefore to customize their product in order to achieve sale's goals.
cost allocationClipper Company sells two types of nail clippers. One focuses on the economy oriented customer and the other aims to satisfy the high-end clientele. The economy clipper costs $5 and has a sales price of $9. The high-end model costs $9 and sales for $15. Fixed costs associated with this product line amount to $35,880. Economy clippers constitute 70 percent of the market with the remaining 30 percent being high-end clippers. Based on this information what is the total number of clippers that must be sold to earn a $12,420 profit
Answer:
Break-even point (units)= 10,500 clippers
Explanation:
Giving the following information:
The economy clipper costs $5 and has a sales price of $9.
The high-end model costs $9 and sales for $15.
Fixed costs associated with this product line amount to $35,880.
Sales participation:
Economy clippers= 0.70
High-end= 0.30
Desired profit= $12,420
To calculate the number of clippers to be sold for the company, we need to use the following formula:
Break-even point (units)= (Total fixed costs + desired profit) / Weighted average contribution margin ratio
Weighted average contribution margin ratio= (weighted average selling price - weighted average unitary variable cost)
Weighted average contribution margin ratio= (0.7*9 + 0.3*15) - (0.7*5 + 0.3*9)
Weighted average contribution margin ratio= $4.6
Break-even point (units)= (35,880 + 12,420) / 4.6
Break-even point (units)= 10,500 clippers
Answer:
Units to be sold to achieve target profit = 10,500 units
Explanation:
The units to be sold to achieve target profit is determined as follows:
Units to be sold to achieve target profit
= (Fixed cost + Target Profit)/Average contribution per unit
Economy High-end
Contribution per unit = 9-5=$4 15-9 = $6
Average contribution per unit= ($4× 70%) + (30%×$6) = $4.6
Units to be sold to earn a profit of $12,420
= Fixed cost + Target Profit/Average contribution per unit
= (35,880 + 12,420)/4.6
= 10,500 units
Units to be sold to achieve target profit = 10,500 units
Kayak Company uses a job order costing system and allocates its overhead on the basis of direct labor costs. Kayak Company's production costs for the year were: direct labor, $26,000; direct materials, $46,000; and factory overhead applied $5,600. The overhead application rate was:_______.
a. 17.69%.
b. 21.54%.
c. 464.29%.
d. 4.64%.
e. 12.17%.
Answer:
b. 21.54%.
Explanation:
The formula and the computation of the overhead application rate is shown below:
As we know that
Overhead application rate is
= (Applied factory overhead ÷ Direct labor cost)
where,
Applied factory overhead is $5,600
And, the direct labor cost is $26,000
Now putting these values to the above formula
So, the overhead application rate is
= ($5600 ÷ $26000)
= 21.54%
We simply divided the applied factory overhead which is indirect cost by the direct labor cost i.e direct cost so that the overhead application rate could come
At the beginning of the month, the Forming Department of Martin Manufacturing had 14,000 units in inventory, 40% complete as to materials, and 20% complete as to conversion. During the month the department started 64,000 units and transferred 68,000 units to the next manufacturing department. At the end of the month, the department had 10,000 units in inventory, 85% complete as to materials, and 60% complete as to conversion. If Martin Manufacturing uses the weighted-average method of process costing, compute the equivalent units for materials and conversion respectively for the Forming Department.
Answer:
total equivalent units using weighted average method:
materials = 76,500 unitsconversion = 74,000 unitsExplanation:
beginning inventory 14,000 units
40% complete to materials = 5,600 equivalent units20% complete to conversion = 2,800 equivalent unitsduring the month 64,000 were started
68,000 units were transferred out
ending inventory 10,000 units
85% complete to materials = 8,500 equivalent units60% complete to conversion = 6,000 equivalent unitstotal equivalent units using weighted average method:
materials = units completed and transferred out + ending inventory = 68,000 + 8,500 = 76,500 unitsconversion = units completed and transferred out + ending inventory = 68,000 + 6,000 = 74,000 unitsValue Lodges owns an economy motel chain and is considering building a new 200-unit motel. The cost to build the motel is estimated at $6,800,000; Value Lodges estimates furnishings for the motel will cost an additional $200,000 and will require replacement every 5 years.
Annual operating and maintenance costs for the motel are estimated to be $540,000. The average rental rate for a unit is anticipated to be $25/day. Value Lodges expects the motel to have a life of 15 years and a salvage value of $900,000 at the end of 15 years. This estimated salvage value assumes that the furnishings are not new. Furnishings have no salvage value at the end of each 5-year replacement interval.
Required:
1. Assuming average daily occupancy percentages of 50 percent, 60 percent, 70 percent, and 80 percent for years 1 through 4, respectively, and 90 percent for the fifth through fifteenth years, a MARR of 12 percent/year, 365 operating days/year, and ignoring the cost of land, should the motel be built? Base your decision on an internal rate of return analysis.
Answer:
The motel should not be built because the IRR is 9.31%, which is lower than the company's MARR (12%).
Explanation:
cost to build the new 200 unit motel $6,800,000 + $200,000 = $7,000,000
the furnishing must be replaced every 5 years
annual operating costs $540,000
average rental rate
useful life 15 years with a salvage value of $900,000
expected cash flows:
year total revenue costs furnishing total
0 -$6,800,000 -$200,000 -$7,000,000
1 $912,500 -$540,000 $372,500
2 $1,095,000 -$540,000 $555,000
3 $1,277,500 -$540,000 $737,500
4 $1,460,000 -$540,000 $920,000
5 $1,642,500 -$540,000 $1,102,500
6 $1,642,500 -$540,000 -$200,000 $902,500
7 $1,642,500 -$540,000 $1,102,500
8 $1,642,500 -$540,000 $1,102,500
9 $1,642,500 -$540,000 $1,102,500
10 $1,642,500 -$540,000 $1,102,500
11 $1,642,500 -$540,000 -$200,000 $902,500
12 $1,642,500 -$540,000 $1,102,500
13 $1,642,500 -$540,000 $1,102,500
14 $1,642,500 -$540,000 $1,102,500
15 $2,542,500 -$540,000 $2,002,500
now using an excel spreadsheet I calculated both the NPV and IRR:
NPV = -$1,113,875IRR = 9.31% < 12% (MARR)The model should not be built because the IRR is 9.31%, which is lower than the company's MARR (12%).
The calculation is as follows:cost to build the new 200 unit motel should be
= $6,800,000 + $200,000
= $7,000,000
expected cash flows:
year total revenue costs furnishing total
0 -$6,800,000 -$200,000 -$7,000,000
1 $912,500 -$540,000 $372,500
2 $1,095,000 -$540,000 $555,000
3 1,277,500 -$540,000 $737,500
4 $1,460,000 -$540,000 $920,000
5 $1,642,500 -$540,000 $1,102,500
6 $1,642,500 -$540,000 -$200,000 $902,500
7 $1,642,500 -$540,000 $1,102,500
8 $1,642,500 -$540,000 $1,102,500
9 $1,642,500 -$540,000 $1,102,500
10 $1,642,500 -$540,000 $1,102,500
11 $1,642,500 -$540,000 -$200,000 $902,500
12 $1,642,500 -$540,000 $1,102,500
13 $1,642,500 -$540,000 $1,102,500
14 $1,642,500 -$540,000 $1,102,500
15 $2,542,500 -$540,000 $2,002,500
here we used the excel for calculating both the NPV and IRR:
NPV = -$1,113,875
IRR = 9.31% < 12% (MARR)
Learn more: https://brainly.com/question/1022920
Astro Corporation was started with the issue of 5,100 shares of $10 par stock for cash on January 1, 2018. The stock was issued at a market price of $15 per share. During 2018, the company earned $66,100 in cash revenues and paid $44,287 for cash expenses. Also, a $3,700 cash dividend was paid to the stockholders.
Prepare an income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Astro Corporation's 2018 fiscal year.
Answer:
Income statement
Revenue $66,100
Less Expenses ($44,287)
Net Income / (Loss) $21,813
statement of changes in stockholders' equity
Equity and Liabilities Section :
Equity :
Share Capital 5,100 shares at $10 $51,000
Share Premium 5,100 shares at $5 $25,500
Profit during the year $21,813
Dividends Paid ($3,700)
Total Equity $94,613
balance sheet
Assets
Current Assets :
Cash ( $66,100 + $51,000 + $25,500 - $44,287 - $3,700) $94,613
Total Assets $94,613
Equity and Liabilities Section :
Equity :
Share Capital 5,100 shares at $10 $51,000
Share Premium 5,100 shares at $5 $25,500
Profit during the year $21,813
Dividends Paid ($3,700)
Total Equity $94,613
Explanation:
The Income Statement is prepared first, following the Statement of Changes in Equity then follows the balance sheet and the cash flow statement.
Q2: In the expenditure cycle, the majority of payments made are by check. What are some
control issues related to payment of vendors by check?
Answer:
Key control problems in the area of payment by check can give rise to fraudulent activity.
Explanation:
Paying employees by check offers a level of security of employee payments.
The Lopez-Portillo Company has $11.3 million in assets, 90 percent financed by debt, and 10 percent financed by common stock. The interest rate on the debt is 10 percent and the par value of the stock is $10 per share. President Lopez-Portillo is considering two financing plans for an expansion to $21.5 million in assets. Under Plan A, the debt-to-total-assets ratio will be maintained, but new debt will cost a whopping 10 percent! Under Plan B, only new common stock at $10 per share will be issued. The tax rate is 30 percent.
a. If EBIT is 11 percent on total assets, compute earnings per share (EPS) before the expansion and under the two alternatives
Earnings Per Share
Current $
Plan A $
Plan B $
b. What is the degree of financial leverage under each of the three plans? (Round your answers to 2 decimal places.)
Degree Of
Financial Leverage
Current
Plan A
Plan B
c. If stock could be sold at $20 per share due to increased expectations for the firm’s sales and earnings, what impact would this have on earnings per share for the two expansion alternatives? Compute earnings per share for each. (Round your answers to 2 decimal places.)
Earnings Per Share
Plan A $
Plan B $
Answer:
Explanation:
Current Plan A Plan B
EBIT 1.243 2.365 2.365
Interest 1.017 1.935 1.017
EBT 0.226 0.43 1.348
Tax (30%) 0.0678 0.129 0.4044
Net Income 0.1582 0.301 0.9436
EPS $ 1.40 $ 1.40 $ 0.83
No. of shares 0.113 0.215 1.133
DFL 5.50 5.50 1.75
In the current plan, Debt = 90% x 11.3 = 10.17m
Interest expense = 10% x 10.17 = 1.017m
No. of shares = Equity / Par value = 11.3 x 10% / 10 = 0.113m
EBIT = 11% x 11.3 = 1.243m
EPS = Net Income / No. of shares = 0.1582m / 0.113m = $1.40
In Plan A, Debt = 90% x 21.5 = 19.35m
Interest expense = 10% x 19.35 = 1.935m
No. of shares = Equity / Par value = 21.5 x 10% / 10 = 0.215m
EBIT = 11% x 21.5 = 2.365m
EPS = Net Income / No. of shares = 0.301m / 0.215m = $1.40
In Plan B, Debt = 90% x 11.3 = 10.17m
Interest expense = 10% x 10.17 = 1.017m
No. of shares = Equity / Par value = (21.5 - 10.17) / 10 = 1.133m
EBIT = 11% x 21.5 = 2.365m
EPS = Net Income / No. of shares = 0.9436m / 1.133m = $0.83
DFL = EBIT / EBT
A company has budgeted direct materials purchases of $210000 in July and $390000 in August. Past experience indicates that the company pays for 70% of its purchases in the month of purchase and the remaining 30% in the next month. During August, the following items were budgeted:
Wages Expense $50000
Purchase of office equipment 62000
Selling and Administrative Expenses 38000
Depreciation Expense 26000
The budgeted cash disbursements for August are:
Answer:
$486,000
Explanation:
According to the scenario, computation of the given data are as follow:-
Budgeted Cash Disbursements for August
Particular Amount ($)
Direct material purchase for July ($210,000 × 30%) 63,000
Direct material purchase for August ($390,000 × 70%) 273,000
Add-wages paid 50,000
Add: Office equipment purchase 62,000
Add: Selling and administrative expenses 38,000
Total 486,000
The depreciation is a non cash expense and the same is not relevant. Hence, ignored it
An individual is known to their coworkers for keeping promises. The individual promised that they would attend a scheduled project meeting or send a representative from their team. The meeting organizer just received an email from the individual that they would not be able to attend the scheduled project meeting.
a. Which one of the following conclusions is best supported by the passage above?
1. The organizer is expecting a representative from the individual's team to attend the meeting.
2. No one from the individual's team will be attending the meeting.
3. Coworkers believe that the individual never breaks promises.
Answer:
The correct answer is option (1) The organizer is expecting a representative from the individual's team to attend the meeting.
Explanation:
Solution:
As the individual is known for keeping promises and also in the received mail individual didn't tell about their team representative weather representative will attend meeting or not.
As individual known for keeping their promises so that organizer is expecting a representative from the individual team to attend meeting.
During 2022 Concord Corporation had sales on account of $596000, cash sales of $235000, and collections on account of $342000. In addition, they collected $9200 which had been written off as uncollectible in 2021. As a result of these transactions the change in the accounts receivable balance from the beginning of the year to the end of the year indicates a:_______
Answer:
$254,000
Explanation:
First and foremost,the cash of $9,200 collected in respect of debt already written off as uncollectible would not affect the balance in accounts receivable since the debt would reinstated and also taken out of accounts receivable simultaneously.
The change in accounts is the difference between the sales on account of $596,000 and collections in respect of accounts receivable of $342,000
change in accounts receivable=$596,000-$342,000=$254,000
Today is time t. Two zero coupon bonds both have a face value of 100 dollars, which means both bonds are expected to pay $100 at Maturity (time T). Bond A is liquid and is often traded by average institutional investors at zero transaction costs. Bond B is illiquid. Its total direct and indirect trading cost is $5 per trade (either buy or sell). Suppose an average-sized institutional trader who wants to own the two bonds will trade three times in either bond (i.e., first buy it at t, then sell it and buy it back again at some time between t and T). Interest rate for discounting future bond price is zero for both bonds. In other words, everyone in this market is not risk averse. What should be the average trader’s evaluation of the bond A and B price today?
A. 100,90
B. 100,100
C. 100,95
D. 100,85
Answer:
The correct answer is (D) 100,85
Explanation:
Solution:
Two zero coupon bonds both have a face value of = $100
Bond A is liquid and traded by average institutional investors at = 0 transaction costs
Bond B is liquid, with a trading cost of =$5
Now,
As the interest rate for discounting future price is zero, then the Bind price is represented as follows:
Bond price = face value - trading cost
Bond A price = 100 - 3*0 = 100
Bond B price = 100 - 3*5 = 85
Therefore, the average trader's evaluation of the bond A and bond B price today is = 100,85
The December 31, 2021, post-closing trial balance for Strong Corporation is presented below: Accounts Debit Credit Cash $ 23,300 Accounts receivable 23,100 Prepaid insurance 4,600 Supplies 190,000 Long-Term Investments 52,000 Land 45,000 Buildings 275,000 Accumulated depreciation 86,000 Accounts payable 37,400 Notes payable, due 2022 62,000 Interest payable 12,000 Notes payable, due 2031 129,000 Common stock 180,000 Retained earnings 106,600 Totals $ 613,000 $ 613,000 Prepare a classified balance sheet for Strong Corporation at December 31, 2021.
Answer and Explanation:
The balance sheet is shown below:-
Current assets Current liability
Cash $23,300 Accounts payable $37,400
Accounts
receivable $23,100 Notes payable due
Prepaid 2022 $62,000
Insurance $4,600 Interest payable $12,000
Supplies $190,000 Total current liabilities $111,400
Total Current Long term liabilities
assets $241,000
Long term Notes payable due 2031 $129,000
Investments $52,000
Property plants and
equipment
Land $45,000 Stockholders Equity
Building $275,000 Common stock $180,000
Less: Accumulated Retained Earnings $106,600
Depreciation $86,000
Property plants and Total stockholder equity $286,600
equipment $234,000
Total assets $527,000 Total Liabilities
and Stockholders’ Equity $527,000
Therefore the total assets is $527,000 while the total liabilities and stockholder equity is $527,000
The Gamer Company is a video game production company that specializes in educational video games for kids. The company’s R&D department is always looking for great ideas for new games. On average, the R&D department generates about 25 new ideas a week. To go from idea to approved product, the idea must pass through the following stages: paper screening (a 1-page document describing the idea and giving a rough sketch of the design), prototype development, testing, and a focus group. At the end of each stage, successful ideas enter the next stage. All other ideas are dropped. The following chart depicts this process, and the probability of succeeding at each stage.
The paper screening for each idea takes 2 hours of a staff member’s time. After that, there is a stage of designing and producing a prototype. A designer spends 4 hours designing the game in a computer-aided-design (CAD) package. The actual creation of the mock-up is outsourced to one of many suppliers with essentially limitless capacity. It takes 4 days to get the prototype programmed, and multiple prototypes can be created simultaneously. A staff member of the testing team needs 2 days to test an idea. Running the focus group takes 2 hours of a staff member’s time per idea, and only one game is tested in each focus group. Finally, the management team meets for 3 hours per idea to decide if the game should go into production.Available working hours for each staff member are 8 hours per day, 5 days a week. The current staffing plan is as follows:A. Paper screening: 3 staff members.B. Design and Production: 4 staff members.C. Testing: 6 staff members.D. Focus Group: 1 staff member.E. Final Decision: 1 management teama. How many new ideas would Gamer Co. approve for production per week if it had unlimited capacity (staff) in its R&D process?b.Which stage is the bottleneck according to the current staffing plan?A. Design and productionB. Focus groupC. TestingD. Paper screeningE. Final decisionc. With the current staffing plan, how many new ideas will be put into production per week?
Answer:
Therefore 13.3 ideas per week
Explanation:
We can use the following method to do the calculations
And we are given
The average number of ideas per week =25
Ideas approved per week = 25×0.6×0.5×0.35×0.75
= 1.968 ideas
b)
The maximum time that will be taking stage is Testing therefore it is the bottleneck base on current staffing plan.
c)
Capacity per hour = number of staff ÷ number of hour
We have capacity per week = Capacity per hour ×5× 8
Demand is lowest of all capacity
= 13.3
Paper screening
Capacity= 3/2=1.5 idea/ hour
= 60 idea per week
Demand =13.3
Utilization=0.22
Design & production
Capacity= 4/4=1 idea/ hour
= 40 idea per week
Demand =13.3
Utilization=0.33
Testing
Capacity= 6/16=0.38 idea/ hour
= 15 idea per week
Demand =13.3
Utilization=0.88
Focus group
Capacity= 1/2=0.5 idea/ hour
= 20 idea per week
Demand =20
Utilization=0.66
Final decision
Capacity= 1/3=0.33 idea/ hour
= 13.3 idea per week
Demand =13.3
Utilization=1
Thus 13.3 ideas per week as our answer
When determining the best way to motivate employees, why shouldn't managers rely solely on HR staff for directions. (check all that apply)
Wozniacki and Wilcox form Jewel LLC, with each receiving a one-half interest in the capital and profits of the LLC. Wozniacki receives his one-half interest as compensation for tax planning services he rendered prior to the formation of the LLC. Wilcox contributes $50,000 cash. The value of a one-half capital interest in the LLC (for each of the parties) is $50,000.
How much income does Wozniacki recognize as a result of this transaction, and what is the character of the income?
Answer:
Recognize the $50,000 as a compensation income received.
Explanation:
The reason is that the Compensation of $50,000 that Wozniacki received for the services that he previously used to render which means this whole amount received must be recognized as income.
The financial statements for Dividendosaurus, Inc., for the current year are as follows: Balance Sheet Statement of Income and Retained Earnings Cash $100,Sales $3,000 Accounts receivable 200,Cost of goods sold (1,600),Inventory 50,Net fixed assets 600,Gross profit $1,400,Operations expenses (970),Total $950,Operating income $430 Accounts payable $140, Interest expense (30) ,Long-term debt 300,Income before tax $400,Capital stock 260 ,Income tax (200), Retained earnings 250 ,Net income $200 ,Total $950 Add: Jan.1 retained earnings 150 Less: dividends (100) Dec.31 retained earnings $250,Dividendosaurus has a dividend-payout ratio of:_______.
A. 19.6%
B. 28.6%
C. 40.0%
D. 50.0%
Answer:
Option D,50% is the correct answer.
Explanation:
Dividend payout ratio is an important financial measure which measures the ratio of company's dividends payment to net income of the company.
This implies the portion of income earned in a year given to shareholders as dividends while the remains is kept in the business as source of further growth.
Dividend payout ratio=dividends/net income=$100/$200=50%
Why would there be a problem within the team if there is an coworker displaying attitude and temper problems?
Answer:
Workplace
Explanation:
The attitude and temper problems of the one coworker could hinder the capabilites of the rest of the team
he following financial statement data for years ending December 31 for Holland Company are shown below. 20Y4 20Y3 Cost of merchandise sold $1,489,200 $945,934 Inventories: Beginning of year 359,160 251,120 End of year 516,840 359,160 a. Determine the inventory turnover for 20Y4 and 20Y3. Round to one decimal place. Inventory Turnover 20Y4 20Y3 b. Determine the days' sales in inventory for 20Y4 and 20Y3. Assume 365 days a year. Round interim calculations and final answers to one decimal place. Days' Sales in Inventory 20Y4 days 20Y3 days
Answer:
Year 2014 Year 2013
a) Inventory Turnover ratio 3.4 times and 3.1 times
b) Number of days' sales in inventory 107.3 days and 117.7 days
Explanation:
As per the data given in the question,
For Year 2014 :
Average inventory = ($359,160 + $516,840)÷2
= $438,000
Inventory Turnover ratio = $1,489,200÷$438,000
= 3.4 times
For Year 2013 :
Average inventory = ($251,120 + $359,160)÷2
= $305,140
Inventory Turnover ratio = $945,934÷$305,140
= 3.1 times
Number of days' sales in inventory = Number of days in a year ÷ Inventory Turnover ratio
For 2014 = 365÷3.4 = 107.3 days
For 2013 = 365÷3.1 = 117.7 days
Ikerd Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are estimated to total $300,000 for the year, and machine usage is estimated at 125,000 hours.
For the year, $322,000 of overhead costs are incurred and 130,000 hours are used.
Required:
A) Compute the manufacturing overhead rate for the year.B) What is the amount of under- or overapplied overhead at December 31st?C) Prepare the adjusting entry to assign the under- or overapplied overhead for the year to cost of goods sold.
Answer:
A. $2.40 per Machine hour
B. Underapplied = $10,000
C. cost of goods sold (debit) $10,000 , overheads (credit) $10,000
Explanation:
A) Compute the manufacturing overhead rate for the year
Overhead Rate = Total Fixed Overheads / Budgeted Activity
= $300,000 / 125,000 Machine hours
= $2.40 per Machine hour.
B) What is the amount of under- or over applied overhead at December 31st?
Under Applied Overheads = Actual Overheads > Applied Overheads
Over Applied Overheads = Actual Overheads < Applied Overheads
Actual Overheads = $322,000
Applied Overheads = $2.40 × 130,000 hours = $ 312,000
Underapplied = $10,000
C) Prepare the adjusting entry to assign the under- or overapplied overhead for the year to cost of goods sold.
cost of goods sold (debit) $10,000
overheads (credit) $10,000
Answer:
A. The manufacturing overhead rate for the year is $2.40
B. The amount of under- or overapplied overhead at December 31st is $10,000
C. The adjusting entry to assign the under- or overapplied overhead for the year to cost of goods sold would be as follows:
Debit Credit
cost of goods sold $10,000
Manufacturing overhead 10,000
Explanation:
A. To calculate the manufacturing overhead rate for the year we would have to use the following formula:
manufacturing overhead rate=Estimated overhead cost/Estimated machine hours usage
manufacturing overhead rate=$300,000/125,000
manufacturing overhead rate=$2.40
B. To Calculate the amount of under applied or over applied overhead cost we would have to use the following formula:
manufacturing overhead cost applied=Total machine hours used*manufacturing overhead rate
manufacturing overhead cost applied=130,000*$2.40
manufacturing overhead cost applied=$312,000
under- or overapplied overhead cost=Actual manufactured overhead costs-Manufacturing overhead cost applied
under- or overapplied overhead cost= $322,000-$312,000
under- or overapplied overhead cost= $10,000
C. The adjusting entry to assign the under- or overapplied overhead for the year to cost of goods sold would be as follows:
Debit Credit
cost of goods sold $10,000
Manufacturing overhead 10,000
QUESTION ONE
Mr. Balham started business on July 1, 2019 with a capital of GH¢16,000 cash.
July 2. Opened a bank account with GH¢8,000
July 2. Bought goods costing GH¢1,000 with cheque
July 3. Purchased Shop Fittings on credit from Jupiter Furniture at GH¢5,000
July 5. Bought motor van by cheque GH¢4,000
July 8. Purchased stationery GH¢150 and goods GH¢5,000 by cash
July 17. Paid insurance GH¢100 by cash
July 18. Cash sales made GH¢2,500
July 20. Sent cash of GH¢2,700 to the bank
July 22. Withdrew GH¢1,000 from the bank for personal use
July 25. Paid motor expenses GH¢300
July 28. Cash sales sent to the bank GH¢5,400
Required: Prepare the ledger accounts of Mr. Balham and extract a trial balance.
Answer:
a) Ledger Accounts:
1) Capital Account
Debit Credit Balance
Cash GH¢16,000 GH¢16,000
Cash Account
Date Debit Credit Balance
July 1 Capital GH¢16,000 GH¢16,000
July 2 Bank GH¢8,000 GH¢8,000
July 8 Stationery GH¢150 GH¢7,850
July 8 Purchases GH¢5,000 GH¢2,850
July 17 Insurance GH¢100 GH¢2,750
July 18 Sales GH¢2,500 GH¢5,250
July 20 Bank GH¢2,700 GH¢2,550
July 25 Motor Expenses GH¢300 GH¢2,250
3) Bank Account
Date Debit Credit Balance
July 2 Cash GH¢8,000 GH¢8,000
July 2 Purchases GH¢1,000 GH¢7,000
July 5 Motor Van GH¢4,000 GH¢3,000
July 20 Cash GH¢2,700 GH¢5,700
July 22 Drawing GH¢1,000 GH¢4,700
July 28 Sales GH¢5,400 GH¢10,100
4) Purchases Account
Date Debit Credit Balance
July 2 Bank GH¢1,000 GH¢1,000
July 8 Cash GH¢5,000 GH¢6,000
5) Furniture & Fittings Account
Date Debit Credit Balance
July 3 Accounts Payable GH¢5,000 GH¢5,000
6) Accounts Payable
Date Debit Credit Balance
July 3 Furniture & Fittings GH¢5,000 GH¢5,000
7) Motor Van
Date Debit Credit Balance
July 5 Bank GH¢4,000 GH¢4,000
8) Stationery
Date Debit Credit Balance
July 8 Cash GH¢150 GH¢150
9) Insurance
Date Debit Credit Balance
July 17 Cash GH¢100 GH¢100
10) Drawings
Date Debit Credit Balance
July 22 Bank GH¢1,000 GH¢1,000
11) Motor Expenses
Date Debit Credit Balance
July 25 Cash GH¢300 GH¢300
12) Sales Account
Date Debit Credit Balance
July 18 Cash GH¢2,500 GH¢2,500
July 28 Bank GH¢5,400 GH¢7,900
b) Trial Balance as at July 28, 2019:
Debit Credit GH¢ GH¢
Capital 16,000
Cash 2,250
Bank 10,100
Purchases 6,000
Fittings 5,000
Accounts Payable 5,000
Motor Van 4,000
Stationery 150
Insurance 100
Drawings 1,000
Motor Expenses 300
Sales 7,900
Total $28,900 $28,900
Explanation:
a) Ledger Accounts are the financial records of all classes of business transactions, which record the debit and credit sides and extracts balances for preparing the trial balance.
b) Trial Balance is a list of the balances extracted from the ledger. It is a tool for checking if the two sides of the accounts are in balance (equal). It is the basis for adjusting entries and the preparation of the financial statements for a period.
The number of parking tickets issued in a certain city on any given weekday has a Poisson distribution with parameter = 50.
(a) Calculate the approximate probability that between 35 and 70 tickets are given out on a particular day.
(b) Calculate the approximate probability that the total number of tickets given out during a 5-day week is between 225 and 275.
(c) Use software to obtain the exact probabilities in (a) and (b) and compare to their approximations.
Answer:
Explanation:
(a) Calculate the approximate probability that between 35 and 70 tickets are given out on a particular day.
[tex]P(35\leq X\leq 70) =P(34.5\leq X \leq 70.5)[/tex] (using continuity correction)
[tex]=P(\frac{34.5- \mu}{\sqrt{\mu} } \leq \frac{X - \mu}{\sqrt{\mu} } \leq \frac{70.5-\mu}{\sqrt{\mu} } )\\\\=P(\frac{34.5-50}{\sqrt{50} } \leq Z \leq\frac{70.5-50}{\sqrt{50} } \\\\=P(-2.19\leq Z \leq 2.90)\\\\=P(Z\leq 2.90)-P(Z\leq -2.19)[/tex]
= 0.9981 - 0.0143 (using standard normal tables)
= 0.9839
b) Consider [tex]X_t[/tex] is the random variable that represents the number of parking tickets issued in certain city in a 5-day week
The mean number of parking ticket issued in a particular city on 5-day week is
[tex]\mu_t = \mu *t\\\\=5 \times 50 = 250[/tex]
Therefore, the required probability is
[tex]P(225\leq X_t \leq 275)=(224.5\leq X_t\leq 275.5)\\\\=P(\frac{224.5-\mu_t}{\sqrt{\mu_t} } \leq \frac{X_t-\mu_t}{\sqrt{\mu_t} } \leq \frac{275.5-\mu_t}{\sqrt{\mu_t} } )\\\\=P(\frac{224.5-250}{\sqrt{250} } \leq Z \leq \frac{275.5-250}{\sqrt{250} } \\\\=P(-1.61\leq Z\leq 1.61)\\\\=P(Z\leq 1.61)-P(Z\leq -1.61)[/tex]
= 0.9463 - 0.0537 (using standard normal tables)
= 0.8926
c) see the attached file
image 1 (the approximate probability of part a )
image 2 (the approximate probability of part b )
From the two graph observed that the probability obtained using software is approximately same as calculated by manually
Adjusting entries.
a) Present, in journal form, the adjustments that would be made on July 31, 2013, the end of the fiscal year, for each of the following.
1. The supplies inventory on August 1, 2012 was $7,350. Supplies costing $22,150 were acquired during the year and charged to the supplies inventory. A count on July 31, 2013 indicated supplies on hand of $8,810.
2. On April 30, a ten-month, 6% note for $20,000 was received from a customer.
3. On March 1, $12,000 was collected as rent for one year and a nominal account was credited.
Answer:
J1
Inventory $7,350 (debit)
Trading Account - 2012 $7,350 (credit)
J2
Inventory $22,150 (debit)
Trade Payable $22,150 (credit)
J3
Write down of Inventory $20,690 (debit)
Inventory $20,690 (credit)
J4
Note Receivable $20,000 (debit)
Bank $20,000 (credit)
J5
Rent Prepaid $12,000 (debit)
Bank $12,000 (credit)
Explanation:
J1
Being Inventory on hand at begining of the year
J2
Being Inventory supplies acquired.
J3
Being inventory written down after physical count.
Inventory = $7,350 + $22,150 - $8,810 = $20,690
J4
Being Note received from a customer
J5
Being Rent for 1 year received in advance
Fast Photo operates four film developing labs in upstate New York. The four labs are identical: They employ the same production technology, process the same mix of films, and buy raw materials from the same companies at the same prices. Wage rates are also the same at the four plants. In reviewing operating results for November, the newly hired assistant controller, Matt Paige, became quite confused over the numbers:
Plant A
Plant B
Plant C
Plant D
Number of rolls processed
50,000
55,000
60,000
65,000
Revenue ($000s)
$500
$550
$600
$650
Less:
Variable costs
(195)
(242)
(298)
(352)
Fixed costs
(300)
(300)
(300)
(300)
Profit (loss)
$ 5
$ 8
$ 2
$ (2)
Upon further study, Matt learned that each plant had fixed overhead of $300,000. Matt remembered from his managerial accounting class that as volume increases, average fixed cost per unit falls. Because Plant D had much lower average fixed costs per roll than Plants A and B, Matt expected Plant D to be more profitable than Plants A and B. But the numbers show just the opposite. Write a concise but clear memo to Matt that will resolve his confusion.
Answer:
Fast Photo
Memo to Matt:
From: Financial Controller
To: Matt Paige (Asst Controller)
Subject: Fixed Overhead and Plant D's Profit
Date: June 5, 2020
The above subject refers.
I wish to clarify the issue of fixed cost per unit. It is true that fixed cost per unit decreases with increased volume. It is also true that Plant D had much lower average fixed costs per roll $4.62 ($300,000/65,000) than Plants A's $6 ($300,000/50,000), B's $5.45 ($300,000/55,000) and even C's $5 ($300,000/60,000).
However, the issue of profit is not dependent on the fixed cost per unit alone. There are other variables. Profit is also determined by the variable cost per unit and the selling price. Since the four plants have the same selling price, we shall not consider selling price as a factor hence.
Therefore, note the variable cost per unit for each plant stated as follows: A = $3.90, B = $4.40, C= $4.97, and D = $5.42. This shows that it costs more per unit of variable cost to produce in Plant D. The difference will be explained by efficiencies in technology use, processing, quantity of materials used and wasted, and the number of labor hours spent in Plant D vis-a-vis other plants.
It is then necessary to review these variances as stated in order to explain why Plant D recorded a net loss of $2,000.
I hope that this issue has been clarified.
Regards,
FC
Explanation:
a) Operating Results for November:
Plant A Plant B Plant C Plant D
Number of rolls processed 50,000 55,000 60,000 65,000
Revenue ($000s) $500 $550 $600 $650
Less:
Variable costs (195) (242) (298) (352)
Fixed costs (300) (300) (300) (300)
Profit (loss) $ 5 $ 8 $ 2 $ (2)
b) Profit is not determined by fixed costs only. It is also influenced by the variable costs and selling price.
Cream and Crimson Foods has a target capital structure of calling for 45.00 percent debt, 4.00 percent preferred stock, and 51.00 percent common equity (retained earnings plus common stock). Its before-tax cost of debt is 12.00 percent. The tax rate is 40.00%. Its cost of preferred stock is 10.41%. Its cost of common equity is 12.38%. Find the WACC for Cream and Crimson Foods
Answer:
9.9702%
Explanation:
After-tax cost of debt=12*(1-tax rate)
= 12* (1-0.4) =7.2%
WACC=Respective cost*Respective weight
=(7.2×0.45)+(10.41×0.04)+(12.38×0.51)
=9.9702%
Answer:
9.9578%
Explanation:
Solution
Given that:
Cream and Crimson foods target a structure capital of calling =5.00%
Stock preferred = 4%
Common equity = 51.00%
Before tax-cost = 12.00%
Rate of tax= 40.00%
preferred stock cost = 10.41%
Now,
After-tax cost of debt=12*(1-tax rate)
=12*(1-0.4)=7.2%
Thus,
The WACC=Respective costs*Respective weight
=(0.45*7.2)+(0.04*10.1)+(0.51*12.38)
=9.9578%
Therefore, the WACC for Cream and Crimson Food is 9.9578%
Cardinal Company is considering a five-year project that would require a $2,915,000 investment in equipment with a useful life of five years and no salvage value. The company’s discount rate is 12%. The project would provide net operating income in each of five years as follows:
Sales $ 2,746,000
Variable expenses 1,126,000
Contribution margin 1,620,000
Fixed expenses:
Advertising, salaries, and other fixed out-of-pocket costs $615,000
Depreciation 583,000
Total fixed expenses 1,198,000
Net operating income $ 422,000
Prepare journal entry
Answer:
Cardinal Company
Journal Entries:
Debit Credit
Equipment $2,915,000
Cash $2,915,000
To record investment in equipment.
Cash $2,746,000
Sales $2,746,000
To record revenue from customers.
Variable Expenses $1,126,000
Cash $1,126,000
To record payment to suppliers.
Advertising & Others $615,000
Cash $615,000
To record payment for expenses.
Equipment Depreciation$583,000
Accumulated Equipment Depreciation $583,000
To record depreciation charge for the year.
Explanation:
Journal entries record business transactions as they occur on a daily or periodic basis. They show the accounts to be debited and the accounts to be credited in the Ledger. Journal entries are the first records made in the books of accounts to capture transactions. They have a note explaining the details of each transaction.
In the Heckscher-Ohlin model, when there is international-trade equilibrium:
A. the capital-rich country will charge more for the capital-intensive good than the price paid by the capital-poor country for the capital-intensive good.
B. workers in the capital-rich country will earn more than those in the poor country.
C. the workers in the capital-rich country will earn less than those in the poor country.
D. the capital-rich country will charge less for the capital-intensive good than the price paid by the capital-poor country for the capital-intensive good.
E. the relative price of the capital-intensive good in the capital-rich country will be the same as that in the capital-poor country.
Answer:
E. the relative price of the capital-intensive good in the capital-rich country will be the same as that in the capital-poor country.
Explanation:
Heckscher-Ohlin International Trade theory states that : a country should export the good which uses its abundant resource intensively, & import the good which uses its its scarce resource intensively.
Example : If country 1 is capital abundant, it should export capita intensive good C. And, it should import labour intensive good L from capital abundant country 2.
Implication : Capital abundant (rich) country has low price of capital intensive good, Capital scarce (poor) country has high price of capital intensive good. This provides the rationale of above specialisation export - import benefit
Export of capital intensive good from capital abundant (capital rich) country decreases their domestic supply. This increases their price in exporting country. Import of these goods in capital scarce (capital poor) country increases supply in imported markets. So, it decreases their price in importing country.This happens till relative price of the capital-intensive good in the capital-rich country will be the same as that in the capital-poor country.
The ledger of Mai Company includes the following accounts with normal balances: Common Stock, $9,000; Dividends, $800; Services Revenue, $13,000; Wages Expense, $8,400; and Rent Expense, $1,600.
Prepare the necessary closing entries from the available information at December 31.
Answer:
Explanation:
The closing entries is purposely to transfer account balances to permanents books of account , with all income statements banalces transferred to retained earnings.
Common stock - $9000
Dividends - $800
Service revenue - $13,000
Wages Expenses - $ $8,400
Rent Expenses - $1,600
Closing Entries
Particulars Dr Cr
Income Summary $10,000
Wages Expenses $8,400
Rent Expenses $1,600
Service Revenue $13,000
Income Summary $13,000
Income Summary $3,000
(13000-10000)
Retained Earnings $3,000
Retained Earnings $800
Dividends $800
Regent Plumbing Company provides plumbing services. The company is a sole proprietorship. Selected transactions of Regent Plumbing Company are described as follows: Sharon Regent, the owner, contributed $6,000 cash in exchange for capital. Paid $4,000 cash for equipment to be used for plumbing repairs. Borrowed $10,000 from a local bank and deposited the money in the checking account. Paid $700 rent for the year. Paid $200 cash for plumbing supplies to be used next year. Completed a plumbing repair project for a local lawyer and received $3,000 cash. How much is the net income for the year ?
Answer:
Montgomery equipment rental company received $1,000 cash from a customer, the amount was owed to the business from the previous month. ...