Answer:
1. $43000
2.$65000
3. $31000
Alternative 2
Explanation:
Computation for the net income to be earned by Increasing the selling price by 10% with no change in total variable costs or sales volume.
1. Calculation of net income :-
First step is to calculate the Current selling price
Current selling price = $300000/ 5000 units
Current selling price= $ 60 per unit
Second step is to calculate the New selling price
New selling price = $ 60 *110%
New selling price= $ 66 per unit
Now let calculate the net income
Sales (5000 units * $66 per unit) $330000
Less Variable costs ($217000)
Contribution Margin $113000
($330000-$217000)
Less Fixed costs ($70000)
Net income $43000
($113000-$70000)
2. Computation for the net income to be earned by Reducing variable costs to 55% of sales.
Sales (5000 units * $60 per unit) $300000
Less Variable costs (55% * $300000) $165000
Contribution Margin $135000
($300000-$165000)
Less Fixed costs($70000)
Net income $65000
($135,000-7000)
3.Computation for the net income to be earned if their is Reduce fixed costs by $18000.
Dr Sales (5000 units * $60 per unit) $300000
Less Variable costs ($217000)
Contribution Margin $83000
($300000-$217000)
Less Fixed costs $52,000
($70000 - $18000)
Net income $31000
($83,000-$52,000)
Based on the information given the course of action that will produce the highest net income is alternative 2 with the amount of $65,000
Apple Inc. just paid a dividend of $3 per share. You expect that Apple's dividend will increase at the rate of 10% per year for the next 10 years. After that, you expect that Apple Inc. will increase its dividend at the rate of 3% per year forever. The required rate of return for Apple is 20%. What is the price of Apple just after the current dividend was paid?
Answer:
The price of Apple just after the current dividend was paid is $26.79.
Explanation:
Note: See the attached file for the calculation of present values for year 1 to 10 dividends.
From the attached excel file, we have:
Previous year dividend in year 1 = Dividend just paid = $3
Total of dividends from year 1 to year 10 = $19.17617169980840
Year 10 dividend = $7.781227380
Therefore, we have:
Year 11 dividend = Year 10 dividend * (100% + Perpetual dividend growth rate) = $7.781227380 * (100% + 3%) = $8.0146642014
Price at year 10 = Year 11 dividend / (Rate of return - Perpetual dividend growth rate) = $8.0146642014 / (20% - 3%) = $47.1450835376471
PV of price at year 10 = Price at year 10 / (100% + Required return)^Number of years = $47.1450835376471 / (100% + 20%)^10 = $7.61419419713817
Price of Apple = Total of dividends from year 1 to year 8 + PV of price at year 10 = $19.17617169980840 + $7.61419419713817 = $26.79
Road Gripper Tire Co. manufactures automobile tires. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 4,160 tires were as follows:
Standard Costs Actual Costs
Direct materials 100,000 lbs. at $6.40 101,000 lbs. at $6.50
Direct labor 2,080 hrs. at $15.75 2,000 hrs. at $15.40
Factory overhead Rates per direct labor hr.,
based on 100% of normal capacity of 2,000 direct
labor hrs.:
Variable cost, $4.00 $8,200 variable cost
Fixed cost, $6.00 $12,000 fixed cost
Each tire requires 0.5 hour of direct labor.
Required:
a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance.
b. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance.
c. Determine the variable factory overhead controllable variance, fixed factory overhead volume variance, and total factory overhead cost variance.
Answer:
Answer is explained in the explanation section below.
Explanation:
Solution:
a.
In part a, we need to find the following 3 requirements:
1. Direct Materials Price Variance
2. Direct Materials Quantity Variance
3. Total Direct Materials Cost Variance
Direct Materials Price Variance:
It can be calculated by using the following formula:
DMPV = AQ multiplied by (AP minus the SP)
Where,
DMPV = Direct Materials Price Variance
AQ = Actual Quantity
AP = Actual Price
SP = Standard Price
We do have all the data, so just plug in the values into the above equation to get the DMPV.
AQ = 101,000
AP = 6.50 USD
SP = 6.40 USD
So,
DMPV = 101,000 ( 6.50 - 6.40)
DMPV = 10,100 USD
Direct Materials Quantity Variance:
DMQV = SP ( AQ - SQ )
Where,
DMQV = Direct Materials Quantity Variance = ?
SP = Standard Price = 6.40 USD
AQ = Actual Quantity = 101,000
SQ = Standard Quantity = 100,000
Plugging in the values:
DMQV = 6.40 ( 101,000 - 100,000)
DMQV = 6400 USD
Total Direct Materials Cost Variance:
DMCV = SMC - AMC
Where,
DMCV = Direct Materials Cost Variance = ?
SMC = Standard Market Cost = 6.40 USD x 100,000
AMC = Actual market Cost = 6.50 USD x 101,000
DMCV = (6.40 USD x 100,000) - (6.50 USD x 101,000)
DMCV = 640,000 - 656,500
DMCV = 16,500 USD
b.
For part b, we need following particulars:
1. Direct Labor Rate Variance (DLRV)
2. Direct Labor Time Variance (DLTV)
3. Direct Labor Cost Variance (DLCV)
Direct Labor Rate Variance (DLRV) :
DLRV = (ADLR - SDLR) x ADLH
Where,
ADLR = Actual Direct Labor Rate = 15.40 USD
SDLR = Standard Direct Labor Rate = 15.75 USD
ADLH = Actual Direct Labor Hour = 2000
So,
DLRV = (ADLR - SDLR) x ADLH
DLRV = (15.40 USD - 15.75 USD ) x 2000
DLRV = 700 USD
Direct Labor Time Variance (DLTV):
DLTV = ( ADLH - SDLH ) x SDLR
SDLH = Standard Direct Labor Hour = 2080
DLTV = ( 2000 - 2080 ) x 15.75 USD
DLTV = 1260 USD
Direct Labor Cost Variance (DLCV)
DLCV = SDLC - ADLC
SDLC = Standard Direct Labor Cost
ADLC = Actual Direct Labor Cost
DLCV = (1540 x 2000) - (15.75 x 2080)
DLCV = 1960 USD
c.
For Part c, we need following:
1. variable factory overhead controllable variance (VFOCV)
2. fixed factory overhead volume variance (FFOVV)
3. Total factory overhead cost variance (TFOCV)
variable factory overhead controllable variance (VFOCV):
VFOCV = AFO - B
Where,
AFO = Actual Factory Overhead = 8200
B = Budgeted Allowance Based on Standard Hours Allowed = 4160x0.5x4
B = 8320 USD
VFOCV = 8200 - 8320
VFOCV = 120 USD
fixed factory overhead volume variance (FFOVV) :
FFOVV = (S - BH ) x SOR
Where,
S = Standard Hours for actual output = 4160 x 0.5
BH = Budgeted Hours = 2080
SOR = Standard Overhead Rate = 6 USD
FFOVV = (4160 x 0.5 - 2080) x 6
FFOVV = 0 USD
Total factory overhead cost variance (TFOCV):
TFOCV = AFO - SO
Where,
AFO = Actual Factory Overhead = 20,200
SO = Standard Overhead = 2080 x 10
TFOCV = 20,200 - ( 2080 x 10 )
TFOCV = 600 USD
8. Zelda owns a 50% general interest in YZ Partnership. At the beginning of the current year, the adjusted basis in her partnership interest was $95,000. In the current year, YZ generated a $110,000 business loss, earned $15,000 dividend and interest income on its investments and recognized a $7,000 capital gain. YZ also made a $5,000 distribution to Zelda. Compute Zelda’s adjusted basis in the partnership at the end of the year.
Answer:
$52,500
Explanation:
Computation for Zelda’s adjusted basis in the partnership at the end of the year.
Zelda’s adjusted basis=$95,000-(50%*$110,000)+(50%*$15,000)+$5,000
Zelda’s adjusted basis=$95,000-$55,000+$7,500+$5,000
Zelda’s adjusted basis= $52,500
Based on the information given we assumed 50% because Zelda is a 50% partner.
Therefore Zelda’s adjusted basis in the partnership at the end of the year will be $52,500
The following information applies to the questions displayed below Over a four-year period, Jackie Corporation reported the following series of gross profits 2018 2019 2020 2021 $60,000 $66,000 $74,000 $90,000 Cost of goods sold32,000 46,00028,000 48,000 $28,000 $20,000 $46,000 $42,000 Net sales Cross profit In 2021, the company performed a comprehensive review of its inventory accounting procedures. Based on this review company records reveal that ending inventory was understated by $11,000 in 2019. Inventory in all other years is correct. Problem 6-10A Part 1
Required:
1. Calculate the gross profit ratio for each of the four years based on amounts originally reported. (Round your answers to the nearest whole percent.) Gross Profit Ratio 2018 2019 2020 2021 The following information applies to the questions displayed below Over a four-year period, Jackie Corporation reported the following series of gross profits 2021 Net sales Cost of goods sold Gross profit $60,000 $66,000 $74,000 $90,000 $28,000 $20,000 46,000 $42,000 In 2021, the company performed a comprehensive review of its inventory accounting procedures. Based on this review, company records reveal that ending inventory was understated by $11,000 in 2019. Inventory in all other years is correct
2. Calculate the gross profit ratio for each of the four years based on corrected amounts. (Round your answers to the nearest whole percent.) Gross Ratio 2018 2019 2020 2021
Answer:
1. Gross Profit ratio
2018 47%
2019 30%
2020 62%
2021 47%
2. Gross Profit ratio
2018 47%
2019 47%
2020 47%
2021 47%
Explanation:
1. Calculation for the gross profit ratio for each of the four years based on amounts originally reported.
2018 2019 2020 2021
Net sales $60,000 $66,000 $74,000 $90,000
Less Cost of goods sold $32,000 $46,000 $28,000 $48,000
=Gross profit$ 28,000 $20,000 $46,000 $42,000
Gross Profit ratio
2018 47% =$28,000/$60,000
2019 30% =$20,000/$66,000
2020 62% =$46,000/$74,000
2021 47% =$42,000/$90,000
2. Calculation for the gross profit ratio for each of the four years based on corrected amounts.
Cost of goods sold 2019=$46,000-$11,000
Cost of goods sold 2019=$35,000
Cost of goods sold 2020=$28,000+$11,000
Cost of goods sold 2020=$39,000
2018 2019 2020 2021
Net sales $60,000 $66,000 $74,000 $90,000
Less Cost of goods sold $32,000 $35,000 $39,000 $48,000
=Gross profit $28,000 $31,000 $35,000 $42,000
Gross Profit ratio
2018 47% =$28,000/$60,000
2019 47% =$31,000/$66,000
2020 47% =$35,000/$74,000
2021 47% =$42,000/$90,000
In its income statement for the year ended December 31, 2022, Pharoah Company reported the following condensed data. Salaries and wages expenses $595,200 Loss on disposal of plant assets $106,880 Cost of goods sold 1,263,360 Sales revenue 2,828,800 Interest expense 85,200 Income tax expense 32,000 Interest revenue 83,200 Sales discounts 204,800 Depreciation expense 396,800 Utilities expense 140,800
Prepare a multiple-step income statement. (List other revenues before other expenses.)
Pharoah Company
Income Statement
Answer:
Net income is $86,960.
Explanation:
A multi-step income statement is an income statement which dsplayes th gross profit and the detailed of each category of expenses and incomes to arrive at a company's net income for a particular period.
A multi-step income statement can be prepared as follows:
Pharoah Company
Income statement
For the year ended December 31, 2022
Details $
Sales revenue 2,828,800
Sales discounts (204,800)
Net sales revenue 2,624,000
Cost of goods sold (1,263,360)
Gross profit 1,360,640
Operating expenses:
Salaries and wages expenses (595,200)
Depreciation expense (396,800)
Utilities expense (140,800)
Operating income 227,840
Other income (loss):
Loss on disposal of plant assets (106,880)
Interest income (expense):
Interest expense (85,200)
Interest revenue 83,200
Income before tax 118,960
Income tax expense (32,000)
Net income 86,960
Sage Company began operations at the beginning of 2021. The following information pertains to this company.
1. Pretax financial income for 2021 is $87,000.
2. The tax rate enacted for 2021 and future years is 20%.
3. Differences between the 2021 income statement and tax return are listed below:
a. Warranty expense accrued for financial reporting purposes amounts to $6,600. Warranty deductions per the tax return amount to $1,900.
b. Gross profit on construction contracts using the percentage-of-completion method per books amounts to $84,500. Gross profit on construction contracts for tax purposes amounts to $66,300.
c. Depreciation of property, plant, and equipment for financial reporting purposes amounts to $57,900. Depreciation of these assets amounts to $84,300 for the tax return.
d. A $3,200 fine paid for violation of pollution laws was deducted in computing pretax financial income.
e. Interest revenue recognized on an investment in tax-exempt municipal bonds amounts to $1,500.
4. Taxable income is expected for the next few years. (Assume (a) is short-term in nature; assume (b) and (c) are long-term in nature.)
Required:
a. Compute taxable income for 2021.
b. Compute the deferred taxes at December 31, 2021, that relate to the temporary differences described above.
c. Prepare the journal entry to record income tax expense
Answer:
Answer is explained in the explanation section below.
Explanation:
Solution:
a. Taxable income for 2021.
Sage Company:
Computation of Taxable income and income tax for 2021
Pretax financial Income = $87000
Permanent differences:
Fine for Pollution = $3200
Interest revenue on municipal bonds = -$1500
Temporary differences:
Less: Excess of depreciation as per tax over books = -$26400
Add: Warranty expense in books higher than as per tax = $4700
Less: Gross profit as per books higher than as per tax on construction contracts = -$18200
Taxable Income = $48800
Income Tax (20%) = $9760
b. Deferred Taxes:
Deferred tax assets = $4700*20% = $940
Deferred tax liability = ($26,400 + $18,200) * 20% = $8920
c. Note: Journal Entries are attached in the attachment below.
Economic costs of unemployment
Consider a hypothetical economy in which potential output is $200 billion and the natural rate of unemployment is 4%. The current unemployment rate is 5.6%. Since the unemployment rate is greater than the natural rate of unemployment, the economy's actual GDP will be______ potential GDP.
According to Okun's law, the economy's GDP gap is billion. The burden of an increase in the economy-wide unemployment rate can differ widely across regions and across different groups of people. For example, in the United States, the jobless rate among workers with only a high school diploma has tended to be________ than the jobless rate among college graduates.
Answer: less than; higher
Explanation:
Since the unemployment rate is greater than the natural rate of unemployment, the economy's actual GDP will be less than potential GDP.
...the jobless rate among workers with only a high school diploma has tended to be higher than the jobless rate among college graduates.
When the economy is at its natural rate of unemployment, it means that the economy is producing at potential GDP. If however, the unemployment rate is more than this natural rate, it means that the economy is facing a downturn which is causing companies to not employ as much labor. Actual GDP is therefore lower than Potential GDP.
Workers with more specialized skills will usually feel the impact of an increase in unemployment less those with more general skills will. For this reason, college graduates will see less unemployment than those with only a high school diploma.
Bramble, Inc. has 11200 shares of 3%, $100 par value, noncumulative preferred stock and 224000 shares of $1 par value common stock outstanding at December 31, 2020. There were no dividends declared in 2019. The board of directors declares and pays a $65700 dividend in 2020. What is the amount of dividends received by the common stockholders in 2020?
Answer:
See
Explanation:
Total dividends = 65,700
Common stock outstanding = 224,000 shares
Preferred dividend
= Number of shares × Par value 3%
= 11,200 × 100 × 3%
= $33,600
Dividends received by common stockholders
= (65,700 × 2) - (33,600 × 3)
= 131,400 - 100,800
= 30,600
Zeus, Inc. produces a product that has a variable cost of $9.50 per unit. The company's fixed costs are $40,000. The product sells for $12.00 a unit and the company desires to earn a $20,000 profit. What is the volume of sales in units required to achieve the target profit? (Do not round intermediate calculations.)
Answer:
Break-even point in units= 26,087
Explanation:
Giving the following information:
Selling price= $12
Unitary variable cost= 9.7
Fixed costs= $40,000
Desired profit= $20,000
To calculate the number of units to be sold, we need to use the following formula:
Break-even point in units= (fixed costs + desired profit) / contribution margin per unit
Break-even point in units= (40,000 + 20,000) / (12 - 9.7)
Break-even point in units= 26,087
Dream, Inc., has debt outstanding with a face value of $6 million. The value of the firm if it were entirely financed by equity would be $18.25 million. The company also has 440,000 shares of stock outstanding that sell at a price of $32 per share. The corporate tax rate is 35 percent. What is the decrease in the value of the company due to expected bankruptcy costs? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
Answer:
$955,000
Explanation:
According to the Modigliani and Miller theory, we can calculate the value of the levered firm which is denoted by;
VI = Vu + tB
VI = 18.25million + 0.35(6million)
VI = 20.35 million
We can also calculate the total market value of the firm Vt by adding the debt (B) with the total equity (SV)
Vt = B + SV
Vt = 5 million + 440,000(32)
Vt = 5 million + 14.80 million
Vt = 19.80 million
Then the decrease in the value of the company due to bankruptcy is
Vb = VI - Vt
Vb = 20.35 million - 19.80 million
VB = $955,000
Dumphy and Funke are rival tattoo artists in the small town of Feline. There are no other tattoo artists in town. It costs $30 to produce a Tweety Bird tattoo. Assume for simplicity that fixed costs are zero and that Dumphy and Funke perform identical work. For a while, there was too much demand for Funke and Dumphy to handle and they both charged $200 for a tattoo. But recently, demand has dropped significantly and there is not enough work for both to fill their days at any price. However, there is some demand at all prices. What type of competition would Funke and Dumphy likely engage in after the decrease in demand
Answer: price competition
Explanation:
The type of competition would Funke and Dumphy likely engage in after the decrease in demand is price competition.
Price competition simply means when the companies in a particular industry lower their prices afsubst the prices of identical products in order to boost demand and sales.
Since there's a reduction in demand, Dumphy and Funke will engage in price competition to boost sales.
The expected return on a portfolio: Group of answer choices can be greater than the expected return on the best performing security in the portfolio. can be less than the expected return on the worst performing security in the portfolio. is independent of the performance of the overall economy. is limited by the returns on the individual securities within the portfolio. is an arithmetic average of the returns of the individual securities when the weights of those securities are unequal.
Answer:
is limited by the returns on the individual securities within the portfolio
Explanation:
Portfolio is simply defined as a list of securities showing how much is (or will be) invested in each of them.
The expected return on a portfolio is calculated as the weighted average of the expected returns on the securities that the portfolio involves. The weight of each security is the a Portion or a fraction of wealth invested in that security. Expected return on a portfolio of N securities is: rp= sum (Xr).
Expected Return is usually based on anticipated income and anticipated capital appreciation.
How does risk influence the rate of interest?
Answer:
Interest rate risk directly affects the values of fixed income securities. Since interest rates and bond prices are inversely related, the risk associated with a rise in interest rates causes bond prices to fall and vice versa. Interest rate risk affects the prices of bonds, and all bondholders face this type of risk.
Explanation:
Hope this helped Mark BRAINLEST!!
Henry Ford is known for the introduction of the assembly line and the Model T. As his manufacturing effort expanded, however, he also adopted an attitude that came to be known as Fordism. What was one of the central tenets in his system?
Answer:
Fordism, a specific stage of economic development in the 20th century. Fordism is a term widely used to describe (1) the system of mass production that was pioneered in the early 20th century by the Ford Motor Company or (2) the typical postwar mode of economic growth and its associated political and social order in advanced capitalism.
Explanation:
Good luck
AP* Price discrimination occurs when differences in a product's price reflect differences in marginal costs differences in a product's price reflect differences in marginal costs a products's average cost is greater than its average revenue a products's average cost is greater than its average revenue differences in a product's price do not reflect differences in costs of production differences in a product's price do not reflect differences in costs of production a product's average cost is less than its average revenue a product's average cost is less than its average revenue the supply of the product is elastic
Answer:
differences in a product's price do not reflect differences in costs of production.
Explanation:
Price can be defined as the amount of money that is required to be paid by a buyer (customer) to a seller (producer) in order to acquire goods and services.
In sales and marketing, pricing of products is considered to be an essential element of a business firm's marketing mix because place, promotion and product largely depends on it.
One of the importance associated with the pricing of products is that, it improves the image of a business firm.
Price discrimination refers to the situation in which a business firm sells an identical product to different consumers at different selling price based on reasons that are not in any way associated or related with its manufacturing cost.
This ultimately implies that, price discrimination occurs when differences in a product's price do not reflect differences in costs of production.
define federal deposit insurance corporation.
Robert, a highly experienced software engineer, joins a new company as the manager of a large group of employees. In his first meeting with the employees of the new organization, he explains his expectations on the behavior of employees. He also lets the employees know that noncompliance with his norms will result in withholding the rewards that they receive. Which of the following types of power is Robert using here?
a. reward
b. transformational
c. referent
d. coercive
Answer:
reward, maybe even referent
Explanation:
Robert is using rewarding to let people know that they need to work or they won't be rewarded.
Caroli, who was 17 years old, signed an agreement to buy a used computer from Egan for $150. While Caroli was on his way to pick up the equipment, Egan got an offer for $250 from someone else. When CAroli arrived with the money to complete the transaction, Egan told him he was unwilling to go through with the agreement because Caroli was a mior.
a. Can Egan cancel the contract?
b. Is this a voidable contract?
c. Can Caroli cancel the contract?
d. If Egan sells the computer to Caroli, can Caroli later return the computer?
Answer:
See below
Explanation:
a. Can Egan cancel the contract.
No. In the United states, adults who contract with minor are bound to the contract. Only the minor may disaffirm the contract.
b. Is this a voidable contract.
Yes it is. It is voidable in the scenes that it can be affirmed or rejected by one of the parties to the contract, in this case the minor - Caroli
c. Can Caroli cancel the contract.
Yes, he can. This is because he has not attained the statutory age - 18 years, hence a minor. This may however be challenged if it is the minor partial performs that term of the contract and its shown to understand that terms
d. If Egan sells the computer to Caroli, can Caroli later return the computer.
Yes. In this case, it shows that the minor - Caroli has disaffirm the contract, hence must return the computer to Egan.
Setrakian Industries needs to raise $48.5 million to fund a new project. The company will sell bonds that have a coupon rate of 5.56 percent paid semiannually and that mature in 10 years. The bonds will be sold at an initial YTM of 6.13 percent and have a par value of $2,000. How many bonds must be sold to raise the necessary funds
Answer:
25,317 unit
Explanation:
Current price of bond = PV(Rate, Nper, Pmt, Fv)
Current price of bond = PV(6.13%/2, 10*2 ,5.56%/2*2000, 2000)
Current price of bond = $1,915.71
Number of bonds to issue = $48,500,000 / $1,915.71
Number of bonds to issue = 25316.98430
Number of bonds to issue = 25,317 unit
6.
Jane's Juice Bar has the following cost schedules:
Quantity
Variable Cost
Total Cost
O vats of juice
1
2.
3
4
5
$ 0
10
25
45
70
100
135
$ 30
40
55
75
100
130
165
6
a. Calculate average variable cost, average total
cost, and marginal cost for each quantity.
b. Graph all three curves. What is the
relationship between the marginal-cost
curve and the average-total-cost curve?
Between the marginal-cost curve and the
average-variable-cost curve? Explain.
Answer:
This may help you to solve it
Jamarcus was his collegiate chapter's delegate at a national conference of a professional business fraternity, Phi Chi Theta, in which he is a member. When the business meeting was conducted, parliamentary procedure was used, and Jamarcus was not familiar with this. Thus, he looked to the others to learn how he should behave in this situation. What type of influence does this reference group exhibit? procedural transient substantive informational legal
Answer:
informational
Explanation:
Informational influence is defined as a new concept or information that occurs within a group and leads to change in group member attitudes, behaviour, and belief.
In the given scenario parliamentary procedure was used in a business meeting and Jamarcus was not familiar with this.
He looked to other group members to learn how he should behave in this situation.
In this case the group is providing information of proper way of behaving during the meeting.
In 2019, Ivanhoe Company had a break-even point of $385,000 based on a selling price of $7 per unit and fixed costs of $115,500. In 2020, the selling price and the variable costs per unit did not change, but the break-even point increased to $454,000.
Required:
a. Compute the variable costs per unit and the contribution margin ratio for 2019.
b. Compute the increase in fixed costs for 2020.
Answer:
Results are below.
Explanation:
Giving the following information:
2019:
Break-even point= $385,000
Selling price= $7
Fixed costs= $115,500
2020:
Break-even point= $454,000
First, we need to calculate the contribution margin ratio for 2019. We will use the following formula:
Break-even point (dollars)= fixed costs/ contribution margin ratio
385,000 = 115,500 / contribution margin ratio
contribution margin ratio*385,000 = 115,500
contribution margin ratio= 0.3
Now, we can determine the unitary variable cost:
contribution margin ratio= unitary contribution margin / selling price
0.3 = (7 - unitary variable cost) / 7
2.1 = 7 - unitary variable cost
unitary variable cost= $4.9
Finally, we can determine the fixed costs for 2020 and the net increase with 2019:
Break-even point (dollars)= fixed costs/ contribution margin ratio
454,000= fixed costs / 0.3
$136,200 = fixed costs
Increase= 136,200 - 115,500= $20,700
If The Wall Street Journal lists a stock's dividend as $1, then it is most likely the case that the stock: Multiple Choice pays $1 per share per quarter. paid $.25 per share per quarter for the past year. paid $1 during the past quarter, with no future dividends forecast. is expected to pay a dividend of $1 per share at the end of next year.
Answer:
paid $.25 per share per quarter for the past year
Explanation:
A stock is ownership rights purchased by investors in a public company. Holders of stock are called stockholders and they are regarded as owners of the company.
Stockholders are paid dividends. Dividends are a proportion of a company's profits paid to shareholders.
If the stock's dividend is $1, it means it either paid $1 the past year or paid $.25 per share per quarter for the past year
Testbank Multiple Choice Question 81 At the beginning of 2020, Sunland Company issued 8% bonds with a face value of $5700000. These bonds mature in the five years, and interest is paid semiannually on June 30 and December 31. The bonds were sold for $5259870 to yield 10%. Sunland uses a calendar-year reporting period. Using the effective-interest method of amortization, what amount of interest expense should be reported for 2020
Answer:
$527,737
Explanation:
The Bond Payment or Coupon always includes the Interest Portion and the the Capital Potion. The question only requires the Interest Portion of the Bond.
The Bond Parameters can be set as :
PV = - $5,259,870
FV = $5,700,000
PMT = ($5,700,000 x 8%) ÷ 2 = $228,000
N = 5 x 2 = 10
YTM = 10 %
P/YR = 2
Constructing an amortization schedule for 2020 gives :
Date Capital Portion Interest Balance
June 30 $34,994 $262,994 $5,294,864
Dec 30 $36,743 $264,743 $5,331,607
Total $71,737 $527,737 $5,331,607
therefore,
The amount of interest expense to be reported for 2020 is $527,737
The following note transactions occurred during the year for Towell Company: Nov. 10 Towell issued a 90-day, 9% note payable for $8,000 to Hyatt Company for merchandise. Dec. 1 Towell signed a 120-day, 10% note at the bank for $12,000. Dec. 20 Towell gave Barr, Inc., a 60-day, 10%, $12,000 note for payment of account. Prepare the general journal entries necessary to adjust the interest accounts at December 31. Use 360 days for calculations and round to the nearest dollar.
Answer: See explanation
Explanation:
The general journal entries necessary to adjust the interest accounts at December 31 will be:
1. December 31:
Debit: Interest Expenses = $8,000 × 9% × 51/ 360 = $102
Credit: Interest payable = $102
(To accrue interest expenses for the note issued on November 10).
2. December 31:
Debit: Interest Expenses = $12,000 × 10% ×30/360 = $120
Credit: Interest payable = $120
(To accrue interest expenses for the note issued on December 1)
3. December 31:
Debit: Interest Expenses = $12,000 × 10% × 11/360 = $36.67
Credit: Interest payable = $36.67
(To accrue interest expenses for the note issued on December 20).
Presented below are long-term liability items for Pharoah Company at December 31, 2020. Bonds payable, due 2022 $625,000 Lease liability 60,000 Notes payable, due 2025 70,000 Discount on bonds payable 46,875 Prepare the long-term liabilities section of the balance sheet for Pharoah Company. (Enter account name only and do not provide descriptive information.)
Answer:
See explanation
Explanation:
Consider liabilities due within period of more than 12 months for the long-term liabilities section of the balance sheet.
Revi Corp. provides the following information for the upcoming year: It expects to sell 29,000 pool cues for $13 each. Direct materials costs are $3, direct manufacturing labor is $5, and manufacturing overhead is $0.83 per pool cue. The following inventory levels apply to the upcoming year: Beginning inventory Ending inventory Direct materials 24,000 units 24,000 units Work-in-process inventory 0 units 0 units Finished goods inventory 1,200 units 2,800 units What are the budgeted costs for direct materials, direct manufacturing labor, and manufacturing overhead, respectively
Answer: See explanation
Explanation:
First, we need to calculate the production budget and this will be:
Sales = $29000
Add: Closing inventory of finished goods = $2800
Less: Opening inventory of finished goods = $1200
Production budget = $30600
Direct material purchased:
Production = 30600
Add: Closing inventory of direct material = 24000
Less: Opening inventory of direct material = 24000
Direct material purchased = 36000
a. Budgeted costs for direct materials
= Direct material purchased × price per unit
= 30600 × $3
= $91800
b. Direct manufacturing labor
= Production unit × Cost per unit
= 30600 × $5
= $153000
c. Manufacturing overhead
= Production units × Cost per unit
= 30600 × $0.83
= $25398
In January, Prahbu purchased a new machine for use in an existing production line of his manufacturing business for $98,000. Assume that the machine is a unit of property and is not a material or supply. Prahbu pays $3,925 to install the machine, and after the machine is installed, he pays $2,250 to perform a critical test on the machine to ensure that it will operate in accordance with quality standards. On November 1, the critical test is complete, and Prahbu places the machine in service on the production line. On December 3, Prahbu pays another $5,200 to perform periodic quality control testing after the machine is placed in service. How much will Prahbu be required to capitalize as the cost of the machine
Answer:
$104,175
Explanation:
Calculation to determine How much will Prahbu be required to capitalize as the cost of the machine
Purchase price $98,000
Add Installation cost $3,925
Add Critical test cost $2,250
Machine Capitalize cost $104,175
($98,000+$3,925+$2,250)
Therefore How much will Prahbu be required to capitalize as the cost of the machine is $104,175
The following are budgeted data: January February March Sales in units 15,900 21,800 18,900 Production in units 18,900 19,900 17,900 One pound of material is required for each finished unit. The inventory of materials at the end of each month should equal 20% of the following month's production needs. Purchases of raw materials for February would be budgeted to be:
Answer:
20,300 pounds
Explanation:
Purchases Budget for February - Pounds
Material required in Production 19,900
Add Opening Materials Inventory (19,900 x 20%) 3,980
Total 23,880
Less Closing Materials Inventory (17,900 x 20%) (3,580)
Budgeted Purchases 20,300
Therefore,
Purchases of raw materials for February would be budgeted to be 20,300 pounds
Here is the income statement for Teal Mountain Inc.
TEAL MOUNTAIN INC.
Income Statement
For the Year Ended December 31, 2017
Sales revenue $402,900
Cost of goods sold 256,700
Gross profit 146,200
Expenses (including $ 10,200 interest and $29,600 income taxes) 89,200
Net income $57,000
Additional information:
1. Common stock outstanding January 1, 2017, was 30,000 shares, and 39,000 shares were outstanding at December 31, 2017.
2. The market price of Teal Mountain stock was $15 in 2017.
3. Cash dividends of $24,700 were paid, $ 6,500 of which were to preferred stockholders.
Compute the following measures for 2017.
(a) Earnings per share $_____
(b) Price-earnings ratio _____ times
(c) Payout ratio _____ %
(d) Times interest earned _____ times
Answer:
See below
Explanation:
a. The earnings per share would be calculated as;
Earnings per share = (Net income - Preferred stock dividend) / Average number of common shares outstanding
But
Weighted average number of common shares = (Number of common shares outstanding in the beginning + Number of common shares outstanding at then end) / 2
= (30,000 + 39,000) / 2
= 34,500
Preferred stock dividend = 6,500
Therefore,
Earnings per share = ($57,000 - $6,500) / 34,500
= $50,500 / 34,500
= $1.46
b. Price earnings ratio
= Market price per share / Earning per share
= $15 / $1.46
= 10.27 times
c. The payout ratio
= (Total cash dividends - Preferred stock dividends) / Net income
= ($24,700 - $6,500) / $57,000
= $18,200 / $57,00)
= 31.93%
d. Times interest
= ( Net income + Interest expense + Tax expense) / Interest expense.
= $57,000 + $10,200 + $29,600) / $10,200
= $96,800 / $10,200
= 9.49 times