Answer:
buying a second house
Explanation:
bonds have a high chance of providing returns whereas the housing market is very hard to predict
2. Shell Biotech Corporation is considering two mutually exclusive capital investment projects. Project 1 costs $75,000, and would produce annual cash flows of $16,200 for each of the next 9 years. Project 2 also costs $75,000, but would produce annual cash flows of $14,000 for each of the next 12 years. If Shell's cost of capital is 11%, which alternative should be chosen
Answer:
Project 2
Explanation:
The better alternative can be determined by calculating the npv
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
Project 1
Cash flow in year 0 = $-75,000
Cash flow each year fromyear 1 to 9 = $16,200
I = 11%
NPV = 14,700.17
Project 2
Cash flow in year 0 = $-75,000
Cash flow each year fromyear 1 to 12 = $14,000
I = 11%
NPV = 15,892.99
To find the NPV 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 NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Flyer Company has provided the following information prior to any year-end bad debt adjustment: Cash sales, $158,000 Credit sales, $458,000 Selling and administrative expenses, $118,000 Sales returns and allowances, $38,000 Gross profit, $498,000 Accounts receivable, $185,000 Sales discounts, $22,000 Allowance for doubtful accounts credit balance, $2,000 Flyer estimates bad debt expense assuming that 1.5% of credit sales have historically been uncollectible. What is the balance in the allowance for doubtful accounts after bad debt expense is recorded
Answer:
$8,870
Explanation:
Calculation to determine the balance in the allowance for doubtful accounts after bad debt expense is recorded
Using this formula
Balance in the allowance for doubtful accounts=
(Credit sales* Percentage of Credit sales)+Allowance for doubtful accounts credit balance
Let plug in the formula
Balance in the allowance for doubtful accounts= ($458,000*1.5%)+$2,000
Balance in the allowance for doubtful accounts=$6,870+$2,000
Balance in the allowance for doubtful accounts=$8,870
Therefore the balance in the allowance for doubtful accounts after bad debt expense is recorded will be $8,870
Symington Corporation uses the periodic inventory system. At December 31, 20X1, the end of the company's fiscal year, a physical count of inventory revealed an ending inventory balance of $320,000. The following items were not included in the physical count: Goods held on consignment at Murphy Corporation $ 23,000 Merchandise shipped to a customer on 12/30/20X1 f.o.b. destination (merchandise arrived at customer's location on 1/3/20X2) 12,000 Merchandise shipped to a customer on 12/29/20X1 f.o.b. shipping point (merchandise arrived at customer's location on 1/2/20X2) 6,000 Merchandise purchased from a supplier, shipped f.o.b. destination on 12/29/20X1, in transit at year-end 24,000
Symington's 2018 ending inventory should be:________
Answer:
See below
Explanation:
With regards to the above information, Symington's 2018 ending inventory would be computed as seen below;
= Ending inventory balance at December 31, 20X1 + Goods held on consignment at Murphy corporation + Merchandize shipped to customer on 12/30 and arrived at customer' location on 1/3/2017
= $320,000 + $23,000 + $12,000
= $355,000
Therefore, Symington's 2018 ending balance should be $355,000.
Note that other given information are not relevant to the computation of the ending inventory.
Problem 8-27A (Static) Computing standard cost and analyzing variances LO 8-5, 8-6 Spiro Company manufactures molded candles that are finished by hand. The company developed the following standards for a new line of drip candles. Amount of direct materials per candle 1.6 pounds Price of direct materials per pound $ 1.50 Quantity of labor per unit 1 hour Price of direct labor per hour $ 20 /hour Total budgeted fixed overhead $ 390,000 During Year 2, Spiro planned to produce 30,000 drip candles. Production lagged behind expectations, and it actually produced only 24,000 drip candles. At year-end, direct materials purchased and used amounted to 40,000 pounds at a unit price of $1.35 per pound. Direct labor costs were actually $18.75 per hour and 26,400 actual hours were worked to produce the drip candles. Overhead for the year actually amounted to $330,000. Overhead is applied to products using a predetermined overhead rate based on estimated units.
This question asks us to:
a. Determine the standard cost per candle for direct products, direct labor, and overhead.
b. Calculate the total standard cost of one drip candle.
c. Determine the direct materials, direct labor, and overhead actual costs per candle.
d. The total actual cost of each candle
Answer:
Explanation:
a.
Cost Computation Standard cost per unit
Direct material [tex]\$1.50 \times 1.6[/tex] 2.4
Direct Labor [tex]\$20 \times 1[/tex] 20
Overhead [tex]\dfrac{\$390,000}{30000}[/tex] 13
b.
To find the total average standard cost for 1 drip candle
The total standard cost per dip candle = $(2.4+20+13)
=$35.40
c. The actual cost per candle for direct materials, direct labor, and overhead can be computed as:
Cost Computation Standard cost per unit
Direct material [tex](\dfrac{40000}{24000}\times 1.35)[/tex] 2.25
Direct Labor [tex]\dfrac{26400}{24000} \times 18.75[/tex] 20.63
Overhead [tex]\dfrac{\$330,000}{24000}[/tex] 13.75
d. The total actual cost per candle = $(2.25 + 20.63 + 13.75)
= $36.63
Producer surplus is best defined as _________________. Select the correct answer below: the profit of producers when they make more goods than are demanded the profit of producers when there are too many producers for a certain demand in a market the profit that producers make above the cost of production the intangible profits producers make in addition to the goods they sell
Answer:
the profit that producers make above the cost of production.
Explanation:
Producer surplus is best defined as the profit that producers make above the cost of production.
Basically, it is the total amount of money that a particular producer of goods and services benefits (gains) from selling at the market price.
In Economics, there are primarily two (2) factors which affect the availability and the price at which goods and services are sold or provided, these are demand and supply.
The law of demand states that, the higher the demand for goods and services, the higher the price it would be sold all things being equal. On the other hand, law of supply states that the higher the price of goods and services, the lower the supply.
g Jesse Co. reports a taxable and pretax financial loss of $800,000 for 2019. Jesse's taxable and pretax financial income and tax rates for the last two years were: 2017 $800,000 20% 2018 800,000 35% The amount that Jesse should report as an income tax refund receivable in 2019, assuming that it uses the carryback provisions and that the tax rate is 40% in 2019, is
Answer:
$160,000
Explanation:
Calculation to determine The amount that Jesse should report as an income tax refund receivable in 2019
Using this formula
2019 income tax refund receivable=Taxable and pretax financial income * Tax rate
Let plug in the formula
2019 income tax refund receivable =($800,000 × 20%)
2019 income tax refund receivable= $160,000
Therefore The amount that Jesse should report as an income tax refund receivable in 2019 is $160,000
Which of the following statements is CORRECT?
a. Suppose you are managing a stock portfolio, and you have information that leads you to believe the stock market is likely to be very strong in the immediate future. That is, you are convinced that the market is about to rise sharply. You should sell your high-beta stocks and buy low-beta stocks in order to take advantage of the expected market move.
b. Collections Inc. is in the business of collecting past-due accounts for other companies, i.e., it is a collection agency. Collections' revenues, profits, and stock price tend to rise during recessions. This suggests that Collections Inc.'s beta should be quite high, say 2.0, because it does so much better than most other companies when the economy is weak.
c. Suppose the returns on two stocks are negatively correlated. One has a beta of 1.2 as determined in a regression analysis using data for the last 5 years, while the other has a beta of %u22120.6. The returns on the stock with the negative beta must have been negatively correlated with returns on most other stocks during that 5-year period.
d. If the market risk premium remains constant, but the risk-free rate declines, then the required returns on low-beta stocks will rise while those on high-beta stocks will decline.
e. You think that investor sentiment is about to change, and investors are about to become more risk averse. This suggests that you should rebalance your portfolio to include more high-beta stocks
Answer: C. Suppose the returns on two stocks are negatively correlated. One has a beta of 1.2 as determined in a regression analysis using data for the last 5 years, while the other has a beta of %u22120.6. The returns on the stock with the negative beta must have been negatively correlated with returns on most other stocks during that 5-year period.
Explanation:
From the options given, the correct option is option C "Suppose the returns on two stocks are negatively correlated. One has a beta of 1.2 as determined in a regression analysis using data for the last 5 years, while the other has a beta of %u22120.6. The returns on the stock with the negative beta must have been negatively correlated with returns on most other stocks during that 5-year period".
Option A is wrong because when there is information that a particular stock will be strong in the future, one should not sell your high-beta stocks and buy low-beta stocks rather the low best stocks should be sold and high beta stocks should be bought.
Option B is wrong because during recession, collections' revenues, profits, and stock price tend to fall and not rise. During recession, there is decrease in economic growth, unemployment and other negative effects in the economy.
Option D and E are wrong as well as the reverse is the case in both situations. The correct option is C.
Break-even sales and sales to realize operating incomeFor the current year ended March 31, Cosgrove Company expects fixed costs of $465,000, a unit variable cost of $62, and a unit selling price of $92.a. Compute the anticipated break-even sales (units).fill in the blank 1 unitsb. Compute the sales (units) required to realize operating income of $108,000.fill in the blank 2 units
Answer:
Break even point in units=15,500 units
Units to achieve target profit=19,100 units
Explanation:
Break-even point is the level of activity at which a firm must operate such that its total revenue will equal its total costs. At this point, the company makes no profit or loss because the total contribution exactly equals the total fixed costs
Break-even point (in units) is calculated using this formula:
Break even point in units = Total general fixed cost/ (selling price - Variable cost)
Break even point in units= $465,000/(92-62)=15,500 units
Units to achieve target profit = (Total general fixed cost for the period + target profit)/ contribution per unit
Units to achieve target profit of 108,000 = ($465,000+ 108,000)/ (92-62)=19,100 units
Break even point in units=15,500 units
Units to achieve target profit=19,100 units
TB MC Qu. 10-149 (Algo) ABC Corporation makes a product ... ABC Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Direct materials 7.7 grams $ 2.30 per gram Direct labor 0.5 hours $ 23.00 per hour Variable overhead 0.5 hours $ 7.30 per hour The company produced 5,500 units in January using 39,610 grams of direct material and 2,410 direct labor-hours. During the month, the company purchased 44,700 grams of the direct material at $2.00 per gram. The actual direct labor rate was $22.30 per hour and the actual variable overhead rate was $7.10 per hour. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The variable overhead rate variance for January is:
Answer:
Direct labor rate variance= $482 favorable
Explanation:
Giving the following information:
Variable overhead 0.5 hours $ 7.30 per hour
Actual direct labor hours= 2,410
The actual variable overhead rate was $7.10 per hour.
To calculate the variable overhead rate variance, we need to use the following formula:
Variable manufacturing overhead rate variance= (standard rate - actual rate)* actual quantity
Variable manufacturing overhead rate variance= (7.3 - 7.1)*2,410
Variable manufacturing overhead rate variance= $482 favorable
Using the attached sheet (or a spreadsheet if you prefer), prepare a classified balance sheet for the ABC, LLC for the year ended December 31, 2020 using the following data.
Accounts Payable 4,000
Accounts Receivable 3,000
Cash 20,000
Common Stock 1,000
Land 25,000
Notes Payable (due in 5 years) 10,000
Paid in Capital in Excess of Par - Common Stock 17,000
Paid in Capital in Excess of Par - Preferred Stock 2,000
Preferred Stock 8,000
Retained Earnings 7,000
Salaries Payable 5,000
Treasury Stock 6,000
Answer:
ABC, LLC
Classified balance sheet as at December 31, 2020
$
ASSETS
Non - Current Assets
Land 25,000
Total Non - Current Assets 25,000
Current Assets
Accounts Receivable 3,000
Cash 20,000
Total Current Assets 23,000
TOTAL ASSETS 48,000
EQUITY AND LIABILITIES
LIABILITIES
Non - Current Liabilities
Notes Payable (due in 5 years) 10,000
Total Non - Current Liabilities 10,000
Current Liabilities
Accounts Payable 4,000
Salaries Payable 5,000
Total Current Liabilities 9,000
TOTAL LIABILITIES 19000
EQUITY
Common Stock 1,000
Preferred Stock 8,000
Treasury Stock 6,000
Retained Earnings 7,000
Paid in Capital in Excess of Par - Common Stock 17,000
Paid in Capital in Excess of Par - Preferred Stock 2,000
TOTAL EQUITY 41,000
TOTAL EQUITY AND LIABILITIES 60,000
Explanation:
A classified balance sheet shows the Assets, Liability and Equity Balances in their respective categories as shown above.
Essence of Skunk Fragrances, Ltd., sells 5,750 units of its perfume collection each year at a price per unit of $445. All sales are on credit with terms of 1/10, net 40. The discount is taken by 35 percent of the customers.
Required:
What is the amount of the company's accounts receivable?
Answer:
The amount of the company's accounts receivable is $2,558,750.
Explanation:
Accounts Receivables are amounts owed to the company. They are measured at amounts that the company expects to be entitled to after a sale.
The sale journal is :
Debit : Accounts Receivables (5,750 units x $445) $2,558,750
Credit : Sales Revenue (5,750 units x $445) $2,558,750
The 2017 and 2016 balance sheets of Rabb Corporation follow. The 2017 income statement is also provided. Rabb had no noncash investing and financing transactions during 2017. During the year, the company sold equipment for $15,100, which had originally cost $13,500 and had a book value of $10,500. The company did not issue any notes payable during the year but did issue common stock for $31,000. The company purchased plant assets and long-term investments with cash.
Requirements
1. Prepare the statement of cash flows for RabbRabb Corporation for 20172017 using the indirect method.
2. Evaluate the company's cash flows for the year. Discuss each of the categories of cash flows in your response.
Answer:
I looked for the missing information (IS & BS) since the information was missing
Statement of cash flows
Cash flows from operating activities:
Net income $183,500
Adjustments to new income
Depreciation $5,900
Gain on sale of equipment ($4,600)
Increase in accounts receivable ($3,200)
Decrease in inventory $6,500
Increase in prepaid insurance ($700)
Decrease in account payable ($2,600)
Decrease in wages payable ($4,400)
Increase in interest payable $2,100
Increase in taxes payable $5,400
Decrease in accrued expenses payable ($4,000)
Total cash flow provided by operating activities $183,900
Cash flow from investing activities:
Cash provided by sale of equipment $15,100
Cash paid for investments ($117,000)
Cash paid for P, P & E ($27,500)
Total cash flow from investing activities ($129,400)
Cash flow from financing activities:
Cash paid for long term debt ($34,000)
Dividends paid ($22,300)
Common stocks issued $31,000
Total cash flow from financing activities ($25,300)
Net increase in cash $29,200
Beginning cash balance $20,500
Ending cash balance $49,700
During the month of September, the following transactions occurred. The applicable sales tax rate is 6%.
Sept. 2 Sold merchandise on account to Sam Larson, $1,400, plus sales tax.
7 Sold merchandise on account to David Mitchell, $1,900, plus sales tax.
12 Issued credit memorandum to Sam Larson for $689, including sales tax of $39.
22 Sold merchandise on account to Matt Feustal, $500, plus sales tax.
28 Sold merchandise on account to Ana Cardona, $850, plus sales tax.
Enter the transactions in the general journal.
Answer:
Sept. 2
Dr Accounts Receivable-Sam Larson 1484
Cr Sales 1400
Cr Sales Tax Payable 84
Sept. 7
Dr Accounts Receivable-David Mitchell 2014
Cr Sales 1900
Cr Sales Tax Payable 114
Sept. 12
Dr Sales Returns and Allowances 650
Dr Sales Tax Payable 39
Cr Accounts Receivable-Sam Larson 689
Sept. 22
Dr Accounts Receivable-Matt Feustal 530
Cr Sales 500
Cr Sales Tax Payable 30
Sept. 28
Dr Accounts Receivable-Ana Cardona 901
Cr Sales 850
Cr Sales Tax Payable 51
Explanation:
Preparation of the general journal entries
Sept. 2
Dr Accounts Receivable-Sam Larson 1484
(1400+84)
Cr Sales 1400
Cr Sales Tax Payable 84
(1400*6%)
Sept. 7
Dr Accounts Receivable-David Mitchell 2014
(1900+114)
Cr Sales 1900
Cr Sales Tax Payable 114
(1900*6%)
Sept. 12
Dr Sales Returns and Allowances 650
(689-39)
Dr Sales Tax Payable 39
Cr Accounts Receivable-Sam Larson 689
Sept. 22
Dr Accounts Receivable-Matt Feustal 530
(500+30)
Cr Sales 500
Cr Sales Tax Payable 30
(500*6%)
Sept. 28
Dr Accounts Receivable-Ana Cardona 901
(850+51)
Cr Sales 850
Cr Sales Tax Payable 51
(850*6%)
4. Suppose the spot Yuan/dollar exchange rate is 6.79. Sue, a Chinese national, has 10,000 Yuan that she wants to invest in a U.S. asset that promises an annual interest of 7 percent. If the expected exchange rate (Yuan/dollar) after a year is 7.2, how much will Sue earn in Yuan
Answer:
Spot exchange rate (Yaun / Dollar) = 6.79 > Therefore, exchanging Yuan for Dollar: 10,000 Yuan.
Explanation:
Yuan/Dollar existing exchange rate is 6.79 Sue has 10,000 Yuan which is converted to 10,000 / 6.79
Fill in the missing numbers for the following income statement. (Input all amounts as positive values. Do not round intermediate calculations.)
Sales Costs Depreciation EBIT Taxes (22%) Net income 747,300 582,600 89,300
a. Calculate the OCF. (Do not round intermediate calculations.)
b. What is the depreciation tax shield? (Do not round intermediate calculations.)
a. OCF
b. Depreciation tax shield
Answer: See explanation
Explanation:
Sales = 747300
Less: Costs = 582600
Less: Depreciation = 89300
EBIT = 75400
Less: Taxes at 22% = 22% × 75400 = 16588
Net income = EBIT - Taxes = 75400 - 16588 = 58812
a. Calculate the OCF.
OCF will be calculated as:
= Net income + Depreciation
= 58812 + 89300
= 148,112
b. What is the depreciation tax shield?
Depreciation tax shield will be:
= Depreciation × Tax rate
= 89300 × 22%
= 89300 × 0.22
= 19646
Below are the transactions and adjustments that occurred during the first year of operations at Kissick Co
a. Issued 198,000 shares of $6-par-value common stock for $1,188,000 in cash.
b. Borrowed $550,000 from Oglesby National Bank and signed a 11% note due in three years.
c. Incurred and paid $380,000 in salaries for the year.
d. Purchased $650,000 of merchandise inventory on account during the year.
e. Sold inventory costing $580,000 for a total of $910,000, all on credit.
f. Paid rent of $220,000 on the sales facilities during the first 11 months of the year.
g. Purchased $190,000 of store equipment, paying $51,000 in cash and agreeing to pay the difference within 90 days.
h. Paid the entire $139,000 owed for store equipment and $600,000 of the amount due to suppliers for credit purchases previously recorded.
i. Incurred and paid utilities expense of $36,000 during the year.
j. Collected $845,000 in cash from customers during the year for credit sales previously recorded.
k. At year-end, accrued $60,500 of interest on the note due to Oglesby National Bank.
l. At year-end, accrued $20,000 of past-due December rent on the sales facilities.
Required:
Prepare an income statement (ignoring income taxes) for Kissick Co.'s first year of operations and a balance sheet as of the end of the year.
Answer:
Income Statement Sales 9,00,000 Cost of goods sold 5,80,000 Gross profit 3,20,000 Salaries expense 3,90,000 Rent expense 2,40,000 Utilities expense 38,000 Loss from operations -3,48,000 Interest expense -59,400 Net loss -4,07,400 KI
Explanation:
Purchased $190,000 of store equipment, paying $51,000 in cash and agreeing to Paid the entire $139,000 owed for store equipment and $600,000 of the amount due to suppliers for credit purchases previously recorded. pay the difference within 90 days. that make it a way to create sales.
Spalding Pointers Corporation expects to begin operations on January 1, year 1; it will operate as a specialty sales company that sells laser pointers over the Internet. Spalding expects sales in January year 1 to total $120,000 and to increase 5 percent per month in February and March. All sales are on account. Spalding expects to collect 70 percent of accounts receivable in the month of sale, 20 percent in the month following the sale, and 10 percent in the second month following the sale. Required Prepare a sales budget for the first quarter of year 1.
Answer:
Spalding Pointers Corporation
Sales Budget
For the first quarter of year 1.
Details January February March
Sales revenue ($) 120,000 126,000 132,300
Explanation:
Before preparing the sales budget, the following are calculated first:
Expected sales in January year 1 = $120,000
Expected sales in February year 1 = Expected sales in January year 1 * (100% + Expected percentage increase) = $120,000 * (100% + 5%) = $126,000
Expected sales in March year 1 = Expected sales in February year 1 * (100% + Expected percentage increase) = $126,000 * (100% + 5%) = $132,300
The sales budge will now look as follows:
Spalding Pointers Corporation
Sales Budget
For the first quarter of year 1.
Details January February March
Sales revenue ($) 120,000 126,000 132,300
According to the standard cost card, each helmet should require 0.52 kilograms of plastic, at a cost of $8.00 per kilogram. Required: 1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 3,400 helmets? 2. What is the standard materials cost allowed (SQ × SP) to make 3,400 helmets? 3. What is the materials spending variance? 4. What is the materials price variance and the materials quantity variance?
Answer:
Please find the complete question in the attached file and its solution can be defined as follows:
Explanation:
The standard kgs permitted[tex]= 3100 \times 0.62 = 1922[/tex]
Current production Standard cost permitted [tex]=1922\times 7= 13454[/tex]
Variance of materials for expenditure [tex]= 13708-13454= 254 \ \ \ U[/tex]
Outlined various of materials [tex]= 13708-(2077\times 7)= 831 \ \ \ F[/tex]
Variability of additional channel [tex]= 7\times (2077-1922)= 1085\ \ \ U[/tex]
Interest rates and decisions
Suppose that a firm is facing an upward-sloping yield curve and needs to borrow money to invest in production. Does this mean that the firm should consider borrowing only at short-term rates?
a. No, the firm needs to take the volatility of short-term rates into account.
b. No, an upward-sloping yield curve means that the firm will get a lower interest rate if it uses long-term financing
c. Yes, using short-term financing will give the firm the lowest possible interest rate over the life of the project.
Credit ratings affect the yields on bonds. Based on the scenario described in the following table, determine whether yields will increase or decrease and whether it will be more expensive or less expensive, as compared to other players in the market, for a company to borrow money from the bond market.
Scenario Impact on Yield Cost of Borrowing Money
from Bond Markets
ABC Real Estate is a commercial real estate firm that primarily uses short-term financing, while its competitors primarily use long-term financing. Interest rates have recently increased dramatically. Decrease More expensive Ziffy Corp.’s credit rating was downgraded from AAA to A. Bellgotts Inc. has increased its market share from 15% to 37% over the last year while maintaining a profit margin greater than the industry average. Previously, Ferro Co. had only used short-term debt financing. The company now finances its current assets such as inventories and receivables with short-term debt, and it finances its fixed assets such as buildings and equipment with long-term debt.
Answer:
a. No, the firm needs to take the volatility of short-term rates into account.
Explanation:
Short term interest rates are more volatile than the long term interest rates. If the company chooses to finance its operations solely from short term financing than it will need to incorporate the affect of volatility in the short term interest rates to identify the net returns. The volatility should be calculated with the risk factor and required rate of return of the funds.
two obstacles you may face in your attempt to achieve your goals
Answer: Perfectionism, Expectations, Distrations, etc.
Explanation:
An act of Procrastinating and viewing of mistakes as failure are obstacles one might face in your attempt to achieve goals.
What is a goals?A goals refers to a predetermined aim that an entity or group plans to to achieve in a set period of time.
However, some obstacles that one might face in an attempt to achieve your goals includes:
Procrastination: This obstacle delays the act of carrying out an action.Viewing mistakes as failure: This makes people to fear making mistake whereas they should stand as stepping stone for success.Read more about goals
brainly.com/question/3658939
Puget Sound Divers is a company that provides diving services such as underwater ship repairs to clients in the Puget Sound area. The company’s planning budget for May appears below: Puget Sound Divers Planning Budget For the Month Ended May 31 Budgeted diving-hours (q) 350 Revenue ($390.00q) $ 136,500 Expenses: Wages and salaries ($11,100 + $120.00q) 53,100 Supplies ($5.00q) 1,750 Equipment rental ($2,500 + $25.00q) 11,250 Insurance ($4,100) 4,100 Miscellaneous ($520 + $1.42q) 1,017 Total expense 71,217 Net operating income $ 65,283 During May, the company’s actual activity was 340 diving-hours. Required: Prepare a flexible budget for May. (Round your answers to the nearest whole number.)
Answer:
Puget Sound Divers
Puget Sound Divers Planning and Flexible Budgets
For the Month Ended May 31
Planning Flexible
Budget Budget
Budgeted diving-hours (q) 350 340
Revenue ($390.00q) $ 136,500 $132,600
Expenses:
Wages and salaries 53,100 51,900
Supplies ($5.00q) 1,750 1,700
Equipment rental 11,250 11,000
Insurance ($4,100) 4,100 4,100
Miscellaneous 1,017 1,003
Total expense 71,217 69,703
Net operating income $ 65,283 $ 62,897
Explanation:
a) Data and Calculations:
Puget Sound Divers Planning Budget
For the Month Ended May 31
Budgeted diving-hours (q) 350
Revenue ($390.00q) $ 136,500
Expenses:
Wages and salaries ($11,100 + $120.00q) 53,100
Supplies ($5.00q) 1,750
Equipment rental ($2,500 + $25.00q) 11,250
Insurance ($4,100) 4,100
Miscellaneous ($520 + $1.42q) 1,017
Total expense 71,217
Net operating income $ 65,283
Flexing the budget with actual activity of 340:
Revenue ($390.00q) $ 136,500/350 * 340 = $132,600
Expenses:
Wages and salaries ($11,100 + $120.00 * 340) = $51,900
Supplies ($5.00q) 1,750/350 * 340 = $1,700
Equipment rental ($2,500 + $25.00 * 340 = $11,000
Miscellaneous ($520 + $1.42 * 340 = $1,003
Morris Company applies overhead based on direct labor costs. For the current year, Morris Company estimated total overhead costs to be $452,000, and direct labor costs to be $2,260,000. Actual overhead costs for the year totaled $419,000, and actual direct labor costs totaled $1,930,000. At year-end, the balance in the Factory Overhead account is a: Multiple Choice $452,000 Credit balance. $386,000 Debit balance. $33,000 Debit balance. $33,000 Credit balance. $419,000 Debit balance.
Answer:
As overhead was underapplied, the balance in overhead will be $33,000 credit.
Explanation:
First, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 452,000 / 2,260,000
Predetermined manufacturing overhead rate= $0.2 per direct labor dollar
Now, we can allocate costs:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 0.2*1,930,000
Allocated MOH= $386,000
Finally, we determine the over/under allocation:
Under/over applied overhead= real overhead - allocated overhead
Under/over applied overhead= 419,000 - 386,000
Underapplied overhead= $33,000
As overhead was underapplied, the balance in overhead will be $33,000 credit.
Kyle owned a small business that sold and repaired several styles of bicycles. Last month, Kyle had sales of $15,000 and the costs of operating his business were $12,300.
Which of the following is true about Kyle's business?
•
The business earned a profit.
•
The business should focus on expansion.
•
The business experienced a loss.
•
The business is not capitalizing on a need
Answer:
The business earned a profit.
Good interpersonal communication skills can prevent negativity, confusion, conflict and
profitability
an adverse affect to the company's bottom line
low turnover
Answer:
an adverse effect on the company's bottom line
Explanation:
Given that profitability means the company is making success in terms of sales, and low turnover means, the company is having a lower number of employees leaving the company over a specific period compared to the number of employees recruited.
Therefore, Good interpersonal communication skills can prevent negativity, confusion, conflict and
an adverse effect on the company's bottom line.
Frida makes bread every day and due to demand she is thinking of increasing her bread production. In order to make this decision, she would calculate her marginal costs of bread production (increased number of employees, equipment, etc.) and her marginal benefits (number of loaves sold, price paid, new customers, etc.) and continue to produce where Select the correct answer below:
a. MB
b. MB>MC or until they are equal.
c. total benefits equal total costs.
d. the price of bread equals exactly the marginal benefit of each loaf.
Answer: b. MB > MC or until they are equal.
Explanation:
It is best that Frieda produces bread at the level where Marginal benefits exceeds marginal costs. The difference will keep giving her more profit.
She should keep increasing her production so long as the Marginal benefit exceeds marginal cost but should stop at the level where the Marginal benefit and marginal cost become equal because producing past this point would mean that she would incur a marginal loss on each unit.
Perez Modems has excess production capacity and is considering the possibility of making and selling paging equipment. The following estimates are based on a production and sales volume of 2,200 pagers. Unit-level manufacturing costs are expected to be $32. Sales commissions will be established at $2.20 per unit. The current facility-level costs, including depreciation on manufacturing equipment ($72,000), rent on the manufacturing facility ($62,000), depreciation on the administrative equipment ($15,600), and other fixed administrative expenses ($77,950), will not be affected by the production of the pagers. The chief accountant has decided to allocate the facility-level costs to the existing product (modems) and to the new product (pagers) on the basis of the number of units of product made (i.e., 6,200 modems and 2,200 pagers). Required a. Determine the per-unit cost of making and selling 2,200 pagers. (Do not round intermediate calculations. Round your answer to 3 decimal places.) b. Assuming the pagers could be sold at a price of $46 each, should Perez make the pagers
Answer and Explanation:
a. The computation of the per unit cost is shown below:
= Manufacturing cost per unit + sales commission per unit
= $32 + $2.20
= $34.20
Here we just add the two cost so that the per unit cost could come
b. Yes it should make the pagers as the cost per unit would be lower than the selling price i.e, $46
Therefore the above should be relevant for the given situation
The total cost of producing q units of a certain product is described by the function C = 4,000,000 + 300q + 0.01q2 where C is the total cost stated in dollars. (1) How many units should be produced in order to minimize the average cost per unit? (2) What is the minimum average cost per unit? (3) What is the total cost of production at this level of output? Make sure to include appropriate units.
Answer:
(1) 20,000 units should be produced in order to minimize the average cost per unit.
(2) The minimum average cost per unit is $700 per unit.
(3) The total cost of production at this level of output is $14,000,000.
Explanation:
The given total cost function is correctly stated as follows:
C = 4,000,000 + 300q + 0.01q^2 …………………………… (1)
(1) How many units should be produced in order to minimize the average cost per unit?
AC = Average cost per unit = C / q
Substituting for C from equation (1), we have:
AC = (4,000,000 + 300q + 0.01q^2) / q …………………. (2)
Marginal cost can be obtained by taking the derivative of equation (1) as follows:
MC = C’ = 300 + (2 * 0.01)q
MC = 300 + 0.02q …………………………………………. (3)
AC is minimum when MC = AC. Therefore, equate equations (2) and (3) and solve for q as follows:
300 + 0.02q = (4,000,000 + 300q + 0.01q^2) / q
(300 + 0.02q)q = 4,000,000 + 300q + 0.01q^2
300q + 0.02q^2 = 4,000,000 + 300q + 0.01q^2
300q + 0.02q^2 - 300q - 0.01q^2 = 4,000,000
0.01q^2 = 4,000,000
q^2 = 4,000,000 / 0.01
q^2 = 400,000,000
q = 400,000,000^(1/2)
q = 20,000 units
Therefore, 20,000 units should be produced in order to minimize the average cost per unit.
(2) What is the minimum average cost per unit?
Substituting q = 20,000 into equation (2), we have:
AC = (4,000,000 + (300 * 20,000) + (0.01 * 20,000^2)) / 20,000
AC = $700 per unit
Therefore, the minimum average cost per unit is $700 per unit.
(3) What is the total cost of production at this level of output?
Substituting q = 20,000 into equation (1), we have:
C = 4,000,000 + (300 * 20,000) + (0.01 * 20,000^2)
C = $14,000,000
Therefore, the total cost of production at this level of output is $14,000,000.
The outstanding checks total_________.
1. $158.53
2. $246.53
3. $48.00
4. $914.47
Answer:
1,367.53
Explanation:
Budgeted amount: 0.5 machine hours per (MH) unit Variable overhead rate is $15 per MH Fixed overhead rate is $40 per MH Budgeted fixed overhead is $600,000 Actual amounts: Variable overhead incurred is $190,000 Fixed overhead incurred is $630,000 MH used is 11,000 Actual output is 20,000 units What is the Fixed Overhead Volume Variance
Answer:
Fixed overhead volume variance = $200,000 Favorable
Explanation:
The fixed overhead volume variance is the difference between the actual and budgeted production unit multiplied by the standard fixed production overhead cost per unit
Units
Budgeted units 15,000
Actual units 20,000
Variance 5,000
Fixed overhead rate per unit × $40
Fixed overhead volume variance $200,000
Hsung Company accumulates the following data concerning a proposed capital investment: cash cost $226,445, net annual cash flows $40,500, and present value factor of cash inflows for 10 years is 5.89 (rounded). (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45).) Determine the net present value, and indicate whether the investment should be made.
Answer:
Hsung Company
a. The net present value is:
= $12,100.
b. Since the investment could yield a net present value of $12,100, the investment should be made.
Explanation:
a) Data and Calculations:
Cash cost of proposed capital investment = $226,445
Net annual cash inflows = $40,500
Present value factor of cash inflows for 10 years = 5.89 (rounded)
Present value of net annual cash inflows = $238,545 ($40,500 * 5.89)
The net present value of the proposed capital project = Present value of net annual cash inflows minus the initial investment cost
= $12,100 ($238,545 - $226,445)
Answer:
12100
Explanation:
40500*5.89=238545
238545-226445=12100
12100