Islander Inc. is a new firm in a rapidly growing industry. The company would be paying $2.50 in dividend next year. After that the company intends to grow the dividend at a 8% rate annually over a long period. You plan to buy the stock now and expect to sell it for $48.23 three years from now. What price must you pay now if your required rate of return is 10%

Answers

Answer 1

Answer: $42.93

Explanation:

To solve this question goes thus:

Year 1:

Cash flow = $2.50

PV at 10% = 0.9091

Present value = $2.27

Year 2:

Cash flow = $2.70

PV at 10% = 0.8264

Present value = $2.23

Year 3:

Cash flow = $2.92

PV at 10% = 0.7513

Present value = $2.19

Price at Year 3:

Cash flow = $48.23

PV at 10% = 0.7513

Present value = $36.24

Price to be paid = $2.27 + $2.23 + $2.19 + $36.24 = $42.93


Related Questions

Portfolio Returns i. stock has mean of 8% and stdev of 20%; ii bond has mean of 6% and stdev of 15%; iii correlation b/w stock and bond of -0.3; iv. Risk free rate for cash lending and borrowing is at 1%. a. What is the mean and stdev of a portfolio of that is 60% in stock and 40% in bond (3 points)

Answers

Answer:

Portfolio Mean = 7.2%

Portfolio Stdev = 0.1169615 or 11.69615% rounded off to 11.70%

Explanation:

The mean return of a portfolio consisting of two securities can be calculated by multiplying the weight of each security in the portfolio by the mean return of that security and adding the products for each security. The formula for two asset or security portfolio return (mean) can be written as follows,

Portfolio Mean = wA * rA  +  wB  *  rB

Where,

w represents the weight of each securityr represents the mean return of each security

Portfolio Mean = 60% * 8%  +  40% * 6%

Portfolio Mean = 7.2%

The standard deviation is a measure of the total risk. The standard deviation of a portfolio consisting of two securities can be calculated using the attached formula.

Portfolio Stdev = √(0.6)² (0.2)² + (0.4)² (0.15)² + 2(0.6) (0.4) (-0.3) (0.2) (0.15)

Portfolio Stdev = 0.1169615 or 11.69615% rounded off to 11.70%

According to O*NET, what is the projected growth for this career between 2019–2029?

Answers

Answer:

Average

Explanation:

small accounting firm is considering the purchase of a computer software package that would greatly reduce the amount of time needed to prepare tax forms. The software costs $2150 and this expense will be incurred immediately. The firm estimates that it will save $650 of cash flow at the end of each year beginning in one year for 5 consecutive years, and also save $1788 in year 6. What is the payback on the computer package

Answers

Answer:

Pay back period =3 years 4 months

Explanation:

The payback period is the estimated length of time it takes cash inflow from a project to recoup the cash outflow.  

The payback period uses cash flows and not profit.  

The payback period can be determined by accumulation the cash inflow consecutively to ascertain the length of time it will take the sum to equate the initial cost.

This will be done as follows:

The sum of the cash in flows for the first three years would equal

650× 3= 1,950

The balance required to equate 2,150 would be

balance = 2150-1950 = 200

Pay back period = 3 years + (200/650)× 12 months

= 3 years  3.6months

Pay back period =3 years 4 months

Compare and contrast the three most common types of healthcare indemnity plans PLEASE I NEED THIS ANSWER BY MIDNIGHT

Answers

Answer:

Health maintenance organizations (HMOs)

Exclusive provider organizations (EPOs)

Point-of-service (POS) plans.

Preferred provider organizations (PPOs)

Explanation:

The prepaid insurance account had a balance of $11,300 at the beginning of the year. The account was debited for $12,500 for premiums on policies purchased during the year. Journalize the adjusting entry required under each of the following alternatives for determining the amount of the adjustment:

a. The amount of unexpired insurance applicable to future periods is $2,100.
b. The amount of insurance expired during the year is $14,400

Answers

Answer:

A. Dr Insurance expense $21,700

Cr Prepaid insurance $21,700

B. Dr Insurance expense $14,400

Cr Prepaid insurance $14,400

Explanation:

A. Preparation of the adjusting entry if the

amount of unexpired insurance applicable to future periods is $2,100.

Dr Insurance expense $21,700

Cr Prepaid insurance $21,700

($11,300 + $12,500 - $2,100 = $21,700)

B. Preparation of the adjusting entry if The amount of insurance expired during the year is $14,400

Dr Insurance expense $14,400

Cr Prepaid insurance $14,400

Elizabeth reports the following items for the current year: Nonbusiness capital gains $ 5,000 Nonbusiness capital losses (3,000) Interest income 3,000 Itemized deductions (including a $20,000 casualty loss in a Federal disaster area) (27,000) In calculating Elizabeth's net operating loss and with respect to these amounts only, what amount must be added back to taxable income (loss)

Answers

Answer: $2000

Explanation:

In calculating Elizabeth's net operating loss and with respect to these amounts only, the amount that must be added back to taxable income (loss) will be the difference between the nonbusiness capital gains and the nonbusiness capital losses. This will be:

= $5000 - $3000

= $2000

American Chemical Company manufactures a chemical compound that is sold for $57 per gallon. A new variant of the chemical has been discovered, and if the basic compound were processed into the new variant, the selling price would be $81 per gallon. American expects the market for the new compound variant to be 8,100 gallons initially and determines that processing costs to refine the basic compound into the new variant would be $162,000. Required: a. What would be the effect on total profit if American produces the new compound variant

Answers

Answer:

Effect on income= $32,400 increase

Explanation:

Giving the following information:

Difference in selling price= 81 - 57= $24

Number of units= 8,100

Increase in costs= $162,000

To calculate the effect on income, we need to use the following formula:

Effect on income= Increase in revenue - increase in costs

Effect on income= 24*8,100 - 162,000

Effect on income= $32,400 increase

Provide an example of two companies that have built in effective co-opetition. Briefly explain the benefit of the relationship describe one job that once existed but today is obsolete or slowly becoming obsolete because of technology provide an exampled of two companies that have built a strategic alliance. Briefly explain the benefits of the relationship.

Answers

Answer:

Microsoft and Apple, Samsung and sony.

Explanation:

Samsung electronics and sony formed an agreement in 2004 for use of shared knowledge and resources in designing flat television screens.  A strategic alliance is a collaboration or a synergy where each partner gets the benefits of the alliance. Jobs such as travel agencies, cashiers, textile workers.  A strategic alliance consists of healthy behavior, long terms goals, and better customer satisfaction.

Reynolds Manufacturers Inc. has estimated total factory overhead costs of $104,000 and expected direct labor hours of 13,000 for the current fiscal year. If job number 117 incurs 1,720 direct labor hours, Work in Process will be debited and Factory Overhead will be credited for a.$104,000 b.$52,000 c.$1,720 d.$13,760

Answers

Answer:

Work in Process              13.760

 Manufacturing Overhead   13,760

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= 104,000 / 13,000

Predetermined manufacturing overhead rate= $8 per direct labor hour

Now, we can allocate overhead to Job 117:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 8*1,720

Allocated MOH= $13,760

Work in Process              13.760

 Manufacturing Overhead   13,760

If a company was trying to find the best production strategy which maximized their total profits using an optimization model, the amount of time used in the Fabrication department is an example of Group of answer choices Parameter Objective function Decision variable Constraint

Answers

Answer: Constraint

Explanation:

The company data is not attached but this should be correct.

Constraints enable companies and entities to engage in sensitivity analysis which would enable them find out optimal quantities of production and production strategy.

Constraints show how much of something is needed to get something done so in making time the constraint, the company is trying to find out how much time is needed in the fabrication department for goods in order for profits to be maximized.

The multiplier effect occurs when an initial increase (or decrease) in autonomous expenditure produces a greater increase (or decrease) in real GDP than the initial change. In which type of discretionary fiscal policy does the multiplier play a role? tax changes only neither government spending changes nor tax changes government spending changes only both government spending changes and tax changes Assume a marginal propensity to consume (MPC) of 0.5. Which discretionary fiscal policy would have a more pronounced impact on the economy? A 800 billion dollar increase in government spending, or a 800 billion dollar tax cut, would both have an equal impact on the economy. A 800 billion dollar increase in government spending would have a more pronounced impact on the economy. A 800 billion dollar tax cut would have a more pronounced impact on the economy.

Answers

Answer:

The answer is "Choice d and Choice b".

Explanation:

In question 1:

The multiplier effect is produced whenever an initial rise (or decrease) of self-employed market capitalization (or decreases) GDP Growth higher than the original change. Where both increases in public spending or adjustments in taxes are produced by a budgetary monetary strategy, a multiplier mostly on the economy plays a major role in public spending and new taxes.

In question 2:

This marginal demand risk of 0.5 would have a more noticeable influence on financial spending, via an 800 billion dollar increase in government expenditure. This will have more major economic effects on fiscal policy. More noticeable effects of increased spending will have on the aggregate throughout the economy.

The use of government budget funding policies to impact economic factors, particularly macroeconomic variables such as aggregate consumer spending, employment, inflation, and economic growth, is referred to as fiscal policy.

How is a fiscal policy that is discretionarily chosen?

The multiplier impact occurs anytime an initial increase (or drop) in self-employed market capitalization (or reduces) GDP Growth that is greater than the original change.

When a fiscal monetary strategy produces both increases in public expenditure and tax adjustments, a multiplier based primarily on the economy plays a significant role in both public spending and new taxes.

This marginal demand risk of 0.5 would have a greater impact on financial expenditures, resulting in an 800 billion dollar rise in government spending.

This will have a greater impact on budgetary policy. The aggregate consequences of higher expenditure will be more visible throughout the economy.

Thus, Options B and D are correct.

For more information about discretionary fiscal policy refer to the link:

https://brainly.com/question/1114207

People come to different decisions using cost-benefit analysis even under the
same conditions because costs and benefits are both what?
A. Subjective
B. Non-monetary
C. Utilities
D. Absolute

Answers

the answer is A bc of process of elimination

Lindsey Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 5,000 units and of Product B is 2,000 units. There are three activity cost pools, with estimated total cost and expected activity as follows: Estimated Expected Activity Activity Cost Pools Overhead Cost Product A Product B Total Activity 1 $ 24,000 200 800 1,000 Activity 2 $ 36,900 750 150 900 Activity 3 $ 63,000 1,000 800 1,800 The overhead cost per unit of Product A under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)

Answers

Answer:

Results are below.

Explanation:

First, we need to calculate the activities rate:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Activity 1= 24,000 / 1,000= $24 per activity unit

Activity 2= 36,900 / 900= $41 per activity unit

Activity 3= 63,000 / 1,800= $35 per activity unit

Now, we can allocate costs to product A:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Activity 1= 24*200= $4,800

Activity 2= 41*750= $30,750

Activity 3= 35*1,000= $35,000

Total allocated costs= $70,550

Finally, the unitary cost:

Unitary cost= 70,550 / 5,000= $14.11

As of the end of June, the job cost sheets at Racing Wheels, Inc., show the following total costs accumulated on three custom jobs.
Job 102 Job 103 Job 104
Direct materials $ 37,000 $ 48,000 $ 57,000
Direct labor 20,000 28,700 43,000
Overhead 8,200 11,767 17,630
Job 102 was started in production in May, and the following costs were assigned to it in May: direct materials, $9,000; direct labor, $3,500; and overhead, $1,505. Jobs 103 and 104 were started in June. Overhead cost is applied with a predetermined rate based on direct labor cost. Jobs 102 and 103 were finished in June, and Job 104 is expected to be finished in July. No raw materials were used indirectly in June. Using this information, answer the following questions. (Assume this company’s predetermined overhead rate did not change across these months.)

Answers

Question Completion:

1. What is the cost of the raw materials requisitioned in June for each of the three jobs?

2. How much direct labor cost is incurred during June for each of the three jobs?

3. What predetermined overhead rate is used during June?

4. How much total cost is transferred to finished goods during June?

Answer:

Racing Wheels, Inc.

                                     Job 102        Job 103        Job 104  

1. Direct materials       $ 37,000       $ 48,000     $ 57,000

2. Direct labor                20,000          28,700        43,000

3. The predetermined overhead rate = $0.41 per direct labor cost.

4. The total cost transferred to Finished Goods Inventory in June

= $167,672

Explanation:

a) Data and Calculations:

The total costs accumulated on three custom jobs.

                               Job 102     Job 103      Job 104        Total

Beginning WIP:                                                               $14,005

Direct materials       $9,000

Direct labor                3,500

Overhead                   1,505                                          

Direct materials   $ 37,000    $ 48,000    $ 57,000   $ 142,000

Direct labor             20,000       28,700       43,000         91,700

Overhead                  8,200         11,767        17,630         37,597

Total costs           $ 79,205    $ 88,467   $ 117,630    $285,302

Predetermined overhead rate = total overhead/total direct labor

= $37,597/$91,700

= $0.41

Finished goods in June:

Job 102     $ 79,205    

Job 103     $ 88,467

Total cost $167,672

Item4 3 points eBookHintPrintReferencesItem 4 Spotter Corporation reported the following for June in its periodic inventory records. Date Description Units Unit Cost Total Cost June 1 Beginning 12 $ 8 $ 96 11 Purchase 38 9 342 24 Purchase 20 11 220 30 Ending 24 Required: Calculate the cost of ending inventory and the cost of goods sold under the (a) FIFO, (b) LIFO, and (c) weighted average cost methods.

Answers

Answer:

a. FIFO

cost of ending inventory  = $256

cost of goods sold  = $402

b. LIFO

cost of ending inventory  = $204

cost of goods sold = $454

c. Weighted average cost

cost of ending inventory =  $225.60

cost of goods sold = $432.40

Explanation:

Periodic method means cost of sales and inventory balance are determined at the end of the period.

Step 1 : Units Sold

Units Sold = Units available for Sale - Units in Inventory

                  = (12 + 38 + 20) - 24

                  = 46

Step 2 : FIFO

FIFO assumes that the units to arrive first, will be sold first.

cost of ending inventory = 20 x $11 + 4 x $9 = $256

cost of goods sold = 12 x $8 x 34 x $9 = $402

Step 3 : LIFO

LIFO assumes that the units to arrive last, will be sold first.

cost of ending inventory = 12 x $9 + 12 x $8 = $204

cost of goods sold = 20 x $11 x 26 x $9 = $454

Step 4 : Weighted average cost

Weighted average cost method calculates a new unit cost with every purchase made. this unit cost is then used to calculated cost of sale and ending inventory.

Unit Cost = Total Costs ÷ Units available for sale

                = (12 x $8 + 38 x $9 + 20 x $11 ) ÷ (12 + 38 + 20)

                = $9.40

cost of ending inventory = Units in Inventory x Unit Cost

                                         = 24 x $9.40

                                         = $225.60

cost of goods sold = Units Sold x Unit Cost

                               = 46 x $9.40

                               = $432.40

Sunland purchased the license for distribution of a popular consumer product on January 1, 2020, for $158,000. It is expected that this product will generate cash flows for an indefinite period of time. The license has an initial term of 5 years but by paying a nominal fee, Sunland can renew the license indefinitely for successive 5-year terms. What amount should be amortized for the year ended December 31, 2020

Answers

Answer:

No amount should be amortized since the license can be renewed indefinitely for successive 5-year terms.

Instead, the license should be tested for impairment annually to determine impairment loss.

Explanation:

An intangible asset that can be used indefinitely is treated like purchased Goodwill.  It should never be amortized.  Annually, the asset should be tested for impairment.  The test is to compare the market value of the license with the book value.

eamish Incorporated, which produces a single product, has provided the following data for its most recent month of operations: Number of units produced 10,700 Variable costs per unit: Direct materials $ 108 Direct labor $ 51 Variable manufacturing overhead $ 7 Variable selling and administrative expense $ 9 Fixed costs: Fixed manufacturing overhead $417,300 Fixed selling and administrative expense $834,600 There were no beginning or ending inventories. The absorption costing unit product cost was:

Answers

Answer:

$205 per unit

Explanation:

Calculation to determine what The absorption costing unit product cost was:

Using this formula

Absorption costing unit product cost = Direct material + Direct labour + Variable manufacturing overheads + (Fixed manufacturing overheads / Number of units produced)

Let plug in the formula

Absorption costing unit product cost= $108 + $51 + $7 + ($417,300 / 10,700)

Absorption costing unit product cost=$108 + $51 + $7 + $39

Absorption costing unit product cost= $205 per unit

Therefore The absorption costing unit product cost was:$205 per unit

A guidance counselor at a high school is working on a project to get more girls interested in the Science, Technology, Engineering, and Mathematics career cluster, which students would be best prepared to enter this career cluster?

A)Those who are strong in art and creative writing.
B)Those who are strong in algebra and computer design.
C) Those who are strong in leadership and communication,
D) Those who are strong in foreign language and history​

Answers

Answer:

its either b or c, im more confident about b though

Explanation

Answer:

b

Explanation:

According to the rule of 70, if a country's real GDP per capita grows at a rate of 2% instead of at a rate of 3%, it would take _____ for that country to double its level of real GDP per capita. a. 35 additional years b. 11.67 additional years c. 23.3 additional years d. 30 additional years e. 15 additional years.

Answers

Answer:

b. 11.67 additional years

Explanation:

_________ are basic beliefs about right and wrong or philosophies that are pervasive in a society. For instance, in some countries, people believe that they should be able to set their personal goals and make their own decisions. In other countries, people believe that they they should consult their family members or other members of their collectives when setting their goals or making their decisions.
a. values attitudes
b. manners
c. customs

Answers

Answer:

A. Values

Explanation:

Although, the above explanations entails or encompasses what values are, manners and customs of people in a country; however, values is what summarizes the whole passage.

Values are what a given society holds in high esteem. They are basic and fundamental beliefs that controls actions in a given society. Values may be right or wrong according to the philosophies of those who believes in such, it is however very important because it helps a society determines what is important I.e something that is good, worthwhile and very much desirable.

The options are:

a. values

b. attitudes

c. manners

d. customs

Answer:

a. values

Explanation:

Values are defined as the concept of right and wrong behaviours within a society. This shapes acceptable behaviour within that society.

They are the motives that exists behind certain way of doing things.

Values therefore sets a ranking of how good and desirable a mode of behaviour is.

Examples of values include dependability, honesty, open mindedness, and consistency.

Please Help~!!!!









Name one thing you're afraid of when you think of college and career.

Answers

Fear of change. Most of the freshmen lived with their families their whole life and now this is going to change.
Making big decisions like choosing what school, major, where to live, what career I want to pursue. Decisions like that are scary because they change lives and I have a fear of choosing the wrong thing.

Use Annual Cost Analysis to determine whether Alternative A or B should be chosen. The analysis period is 5 years. Assume an interest rate of 6% per year, compounded annually Alternative A Alternative B Initial Cost 2800 6580 Annual Benefit 450 940 Salvage Value 500 1375 Useful Life (yrs) 5 5 Group of answer choices Alternative A should be chosen, because its initial cost is lower than Alternative B's Alternative A should be chosen, because its equivalent annual cost is $252.15 lower than Alternative B's Alternative B should be chosen, because its annual benefit is higher than Alternative A's Alternative B should be chosen, because its equivalent annual cost is $252.15 higher than Alternative A's

Answers

Answer:

A should be chosen, because its equivalent annual cost is $252.15 lower than Alternative B's.

Explanation:

a) Data and Calculations:

Interest rate = 6% per year

                       Alternative A      Alternative B

Initial Cost             2800                 6580

Annual Benefit        450                   940

Salvage Value        500                  1375

Useful Life (yrs)        5                        5

Annuity factor = 4.212 for 5 years at 6%.

Present value factor = 0.747 for 5 years at 6%.

                              Alternative A      Alternative B

Present value of

 annual benefits       $1,895.40       $3,959.28

PV of salvage value       373.50           1,027.12

Total present value

of benefits               $2,268.90       $4,986.40

Initial Cost                  2,800               6,580

Net present value       $531.10        $1,593.60

The equivalent annual cost

= NPV/PV annuity factor

                             ($531.10/4.212)   ($1,593.60/4.212)

Equivalent annual cost $126.09      $378.35

Difference:

Alternative B = $378.35

Alternative A = $126.09

Difference =    $252.26

Company A Company B Market Value of Equity $400,000 $600,000 Market Value of Debt $100,000 $800,000 Cost of Equity 9% 9% Cost of Debt 3% 4% Tax Rate 35% 35% Based solely on their current weighted average cost of capital, which company should pursue an investment opportunity with an expected return of 6.5%

Answers

Answer:

Company B should pursue the investment

Explanation:

To determine a profitable investment opportunity to pursue, we would compare the weighted average cost of capital WACC to the expected return on the investment opportunity. An investment return greater than the cost of capital implies a profitable investment and vice versa

The weighted average cost of capital (WAAC) is the average cost of all the various sources of long-term finance used by a business weighted according to the proportion which each source of finance bears to the the entire pool of fund.

Lets first work the after tax cost of debt for the companies:

After tax- cost of debt = cost of debt × (1-tax rate)

Company A= 3%× (1-35%) = 1.95%

Company B = 4%× (1-35%)= 2.6%

WACC coy A= 9%× (4/4+1)  +   1.95% × 1/(4+1) = 7.6%

WACC coy B= 9%× (6/6+8)  +   2.6% × 8/(6+8) = 5.3%

Company B has a cost of capital of 5.3% which represents the minimum

return required by by the providers of capital. An investment  an expected return of 6.% appears profitable as it is greater than the company's  cost of  fund of 5.3%

Company B should pursue the investment

Suppose you are the money manager of a $5.21 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 320,000 1.50 B 780,000 (0.50) C 1,260,000 1.25 D 2,850,000 0.75 If the market's required rate of return is 10% and the risk-free rate is 5%, what is the fund's required rate of return

Answers

Answer: 8.65%

Explanation:

First find the weights of the stocks:

Total = 320,000 + 780,000 + 1,260,000 + 2,850,000

= $‭5,210,000‬

Stock A:

= 320,000 / ‭5,210,000‬

= 6.14%

Stock B:

= 780,000 / ‭5,210,000‬

= 14.97%

Stock C:

= 1,260,000 / ‭5,210,000‬

= 24.18%

Stock D:

= 2,850,000 / ‭5,210,000‬

= 54.70%

Then calculate Portfolio Beta.

Portfolio beta = (6.14% * 1.50) + (14.97% * - 0.5) + (24.18% * 1.25) + (54.72% * 0.75)

= 0.7299

Required rate of return using Capital Asset Pricing Model (CAPM)

= Risk free rate + Beta * (Market return - risk free rate)

= 5% + 0.7299 * (10% - 5%)

= 8.65%

eight business functions​

Answers

1: Marketing
2: Production
3: Public Relations
4: Finance
5: General Management
6: Purchasing
7: Administration
8: Technology and equipment

Swifty Enterprises reported cost of goods sold for 2020 of $1,453,700 and retained earnings of $5,392,600 at December 31, 2020. Swifty later discovered that its ending inventories at December 31, 2019 and 2020, were overstated by $102,820 and $37,880, respectively. Determine the corrected amounts for 2020 cost of goods sold and December 31, 2020, retained earnings.

Answers

Answer:

Corrected cost of goods sold $1,388,760

Corrected retained earnings $5,354,720

Explanation:

First, we need to determine corrected cost of goods sold

Corrected cost of goods sold at December 31, 2020

= Beginning inventory - Purchases - Ending inventory

= $1,453,700 - [$102,820 - $37,880]

= $1,453,700 - $64,930

= $1,388,760

The December 31,2020 corrected retained earnings would be computed as;

= Ending retained earnings - Overstated ending inventories at December 31, 2020

= $5,392,600 - $37,880

= $5,354,720

Marigold Corp. incurs the following costs to produce 10100 units of a subcomponent: Direct materials $8484 Direct labor 11413 Variable overhead 12726 Fixed overhead 16200 An outside supplier has offered to sell Marigold the subcomponent for $2.85 a unit. If Marigold could avoid $3000 of fixed overhead by accepting the offer, net income would increase (decrease) by $838. $(3364). $6838. $(5929).

Answers

Answer:

The effect on net income is an increase by $6838.

Explanation:

Analysis of Accepting Special Offer

Savings :

Direct materials                                                     $8,484

Direct labor                                                            $11,413

Variable overhead                                               $12,726

Fixed Overheads                                                  $3,000   $35,623

Total Savings

Costs :

Purchase Price ( $2.85 x 10,100 units)                               ($28,785)

Effect on Net Income                                                             $6,838

Note : We have considered the avoidable component of fixed costs in this calculation. Ignore common fixed costs (unavoidable) since they are irrelevant for decision making.

Conclusion :

The effect on net income is an increase by $6838.

Harrelson Company manufactures pizza sauce through two production departments: Cooking and Canning. In each process, materials and conversion costs are incurred evenly throughout the process. For the month of April, the work in process accounts show the following debits.
Cooking Canning
Beginning work in process $0 $4,710
Materials 22,030 10,200
Labor 8,740 8,020
Overhead 32,760 28,340
Costs transferred in 55,850
ournalize the April transactions.

Answers

Answer and Explanation:

The journal entries are shown below:

On April 30

WIP-cooking Dr $22,030

WIP- Canning $10,200

      To Raw material inventory $32,230

(Being material used is recorded)

WIP-cooking Dr $8,740

WIP- Canning $8,020

      To Factory labor $16,760

(Being assigned of factory labor to production is recorded)

WIP-cooking Dr $32,760

WIP- Canning $28,340

      To Manufacturing overhead $61,100

(Being assigned of overhead to production is recorded)

WIP Canning $55,850

       To WIP cooking $55,850

(being cost transferred in recorded)

Myrna and Geoffrey filed a joint tax return in 2018. Their AGI was $85,000, and itemized deductions were $24,700, which included $7,000 in state income tax and no other state or local taxes. In 2019, they received a $1,800 refund of the state income taxes that they paid in 2018. The standard deduction for married filing jointly in 2018 was $24,000.
Under the tax benefit rule, what amount of the state income tax refund is included in gross income in 2019?

Answers

Answer:

$700

Explanation:

Calculation for what amount of the state income tax refund is included in gross income in 2019

Standard deduction for married filing jointly in 2018 $24,000

Less itemized deductions ($24,700)

State income tax refund included in gross income in 2019 $700

($24,000-$24,700)

Therefore the state income tax refund that is included in gross income in 2019 will be $700

Reid Company is budgeting production of 100,000 units of product R for the month of September this year. Production of one unit of product R requires three units of material B. For material B, the actual inventory units at September 1 were 22,000 units and budgeted inventory units at September 30 are 24,000. How many units of material B is Reid planning to purchase during September?

Answers

Answer:

Purchases= 302,000 units

Explanation:

Giving the following information:

Production= 100,000 units

Production of one unit of product R requires three units of material B.

For material B:

Beginning inventory= 22,000

Desired inventory= 24,000

To calculate the purchases, we need to use the following formula:

Purchases= production + desired ending inventory - beginning inventory

Purchases= 100,000*3 + 24,000 - 22,000

Purchases= 302,000 units

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