Answer:
General Journal Debit Credit
1 Cash 2600
Unearned revenue 2600
(To record gift cards sold)
2 Unearned revenue 832
Sales tax payable 32
Sales revenue 800
(To record gift cards redeemed)
If an adjusting entry is not made for an accrued expense,
a. expenses will be overstated,
b. liabilities will be understated.
c. net income will be understated.
d. equity will be understated.
Answer:
c. net income will be understated.
Teozocior.01.010
o
.
Which of the following is true of downward communication?
a. Recording a project's results and accomplishments involves downward communication.
..
O b. The process of creating progress reports is an example of downward communication.
5.
c. Problem solving and clarifications in organizations involve downward communication.
7.
d. Orientation to a company's rules and practices is an element of downward communication.
8.
о
9.
10.
C
11.
Answer:
When the federal government spends more money than it receives in taxes in a ... spending over time in nominal dollars is misleading because it does not take ... defense spending as a share of GDP has generally declined since the 1960s, ... Healthcare expenditures include both payments for senior citizens (Medicare), ...
Explanation:
Gibson Company makes fine jewelry that it sells to department stores throughout the United States. Gibson is trying to decide which of the two bracelets to manufacture. Cost data pertaining to the two choices follow. Bracelet A Bracelet B Cost of materials per unit $ 29 $ 45 Cost of labor per unit 33 33 Advertising cost per year 8,100 6,000 Annual depreciation on existing equipment 6,000 5,600 Required Identify the fixed costs and determine the amount of fixed cost for each product. Identify the variable costs and determine the amount of variable cost per unit for each product. Identify the avoidable costs and determine the amount of avoidable cost for each product.
Answer:
Gibson Company
Fixed costs for each product:
Bracelet A Bracelet B
Advertising cost per year 8,100 6,000
Annual depreciation on
existing equipment 6,000 5,600
Total fixed costs $14,100 $11,600
Variable costs:
Bracelet A Bracelet B
Cost of materials per unit $ 29 $ 45
Cost of labor per unit 33 33
Variable cost per unit $ 62 $ 78
Avoidable costs:
Bracelet A Bracelet B
Variable cost per unit $ 62 $ 78
Explanation:
a) Data and Calculations:
Bracelet A Bracelet B
Cost of materials per unit $ 29 $ 45
Cost of labor per unit 33 33
Advertising cost per year 8,100 6,000
Annual depreciation on
existing equipment 6,000 5,600
NB:
Advertising cost can be avoided if production did not take place, just as all variable costs can be avoided without production.
Record the following transactions as general journal entries. Use the gross-price method.
Aug. 6 Purchased $830 of merchandise on account from Johnston Co. Credit terms 2/10, n/30.
8 Bought an $18,000 truck from Pillner Co., paying $3,000 down; balance on account.
13 Purchased $2,611 of merchandise for cash from Pillner and Co.
15 Paid for the August 6 purchase of merchandise from Johnston Co.
17 Purchased $1,743 of merchandise from Luis Co. Credit terms 2/10, n/30.
Answer:
General Journal Entries:
Aug. 6 Debit Inventory $830
Credit Accounts Payable (Johnston Co.) $830
To record the purchase of merchandise; Credit terms 2/10, n/30.
Aug. 8 Debit Truck $18,000
Credit Accounts Payable (Pillner Co.) $15,000
Credit Cash $3,000
To record the purchase of truck.
Aug. 13 Debit Inventory $2,611
Credit Cash $2,611
To record the purchase of inventory for cash.
Aug. 15 Debit Accounts Payable (Johnston Co.) $830
Credit Cash $813
Credit Cash Discounts $17
To record the payment on account, including discounts.
Aug. 17 Debit Inventory $1,743
Credit Accounts Payable (Luis Co.) $1,743
To record the purchase of goods; Credit terms 2/10, n/30.
Explanation:
a) Data and Analysis:
Aug. 6 Inventory $830 Accounts Payable (Johnston Co.) $830
Credit terms 2/10, n/30.
Aug. 8 Truck $18,000 Accounts Payable (Pillner Co.) $15,000 Cash $3,000
Aug. 13 Inventory $2,611 Cash $2,611
Aug. 15 Accounts Payable (Johnston Co.) $830 Cash $813 Cash Discounts $17
Aug. 17 Inventory $1,743 Accounts Payable (Luis Co.) $1,743
Credit terms 2/10, n/30.
why is having insurance important ?
Answer:
Explanation:
Because nothing is worth risking when you can have someone back you up. If something ever happens to you that you can't afford, insurance companies will have your back. If your house gets destroyed in a hurricane, you can recover the exact value of the house if you have insurance. However, if you don't have insurance, you bascially just lost your house. You can have insurance for many things such as car insurance, life insurance, health insurance.
A key difference between the APV, WACC, and FTE approaches to valuation is: how debt effects are considered; i.e. the target debt to value ratio and the level of debt. how the initial investment is treated. how the ratio of equity to debt is determined. how the unlevered cash flows are calculated. whether terminal values are included or not.
Answer: how debt effects are considered; i.e. the target debt to value ratio and the level of debt.
Explanation:
The Weighted Average Cost of Capital (WACC) values a project by using a discount rate that encompasses all the costs of raising capital. It therefore includes the effects of debt financing in that rate.
Adjusted Present Value (APV) on the other hand, takes the net present value of a project assuming it was solely financed by equity and then adds the present value of the benefits of debt financing such as interest tax shields and costs of debt issuance. Debt is therefore not included in the model like WACC and so considers the effects of debt differently.
3. What do you think has more risk: buying corporate bonds or buying a second house in hopes that housing prices increase?
Answer:
buying a second house
Explanation:
bonds have a high chance of providing returns whereas the housing market is very hard to predict
Bentwood Corporation uses the FIFO method in its process costing system. Data concerning the first processing department for the most recent month are listed below:
Beginning work-in-process inventory:
Units in beginning work-in-process inventory 1,700
Materials costs $32,300
Conversion costs $18,700
Percent complete with respect to materials 70%
Percent complete with respect to conversion 25%
Units started into production during the month 8,900
Units transferred to the next department during the month 7,700
Materials costs added during the month $154,600
Conversion costs added during the month $253,900
Ending work-in-process inventory:
Units in ending work-in-process inventory 2,900
Percent complete with respect to materials 80%
Percent complete with respect to conversion 35%
The cost per equivalent unit for conversion costs for the first department for the month is closest to:____.
a. $29.33.
b. $29.00.
c. $31.78.
d. $35.51.
Answer:
$31.28
Explanation:
Calculation to determine what The cost per equivalent unit for conversion costs for the first department for the month is closest to:
First step is to calculate the Total Conversion Cost
Total Conversion Cost=$253,900+$18,700
Total Conversion Cost=$$272,600
Second step is to calculate the Equivalent Units
Equivalent Units =( 7,700 x 100%) + (1,700 + 8,900 - 7,700 ×35%)
Equivalent Units =( 7,700 x 100%) + (2,900 x 35 %)
Equivalent Units =7,700+1,015
Equivalent Units = 8,715 units
Now let calculate the Cost per Equivalent Units using this formula
Cost per Equivalent Unit = Total Cost ÷ Total Equivalent Units
Cost per Equivalent Unit = $272,600 ÷ 8,715 units
Cost per Equivalent Unit = $31.28
Therefore The cost per equivalent unit for conversion costs for the first department for the month is closest to:$31.28
Based on the readings: match the following business example with its associated product cost term A businessowner pays for rent and equipment at their office An airline considers the costs of serving food and beverages to its passengers A company considers the costs it pays to its employees A clothing manufacturer buys new machines for its factory A. variable costs B. fixed costs C. fixed cost D. variable costs
Answer:
A business owner pays for rent and equipment at their office ⇒ FIXED COSTs since the amount of rent paid should be the same year after year
An airline considers the costs of serving food and beverages to its passengers ⇒ VARIABLE COSTS since the cost of serving food will increase as the number of passengers increase, or will decrease if the number of passengers decrease
A company considers the costs it pays to its employees ⇒ VARIABLE COSTS since the number of employee can vary and the number of hours worked can also vary
A clothing manufacturer buys new machines for its factory ⇒ FIXED COSTS since the machines are depreciated at a predetermined rate that doesn't depend on the factory's output
The following items appear on the balance sheet of a company with a one-year operating cycle. Identify the proper classification of each item as follows: C if it is a current liability, L if it is a long-term liability, or N if it is not a liability. prepaid insurance bonds payable
Item Classification
1. Current portion of long-term debt.
2. Notes payable (due in 6 to 11 months).
3. Sales taxes payable.
4. Bonus payable (to be paid in 60 days)
5. Warranty liability (6 months of coverage)
6. Prepaid Insurance (6 months of coverage)
7. Notes payable (due in 120 days).
8. Salaries payable.
9. Pension liability (to be fully paid to retired employees in next 11 months)
10. Bonds payable (due in 2 years)
Answer:
L LcnncnlnI think so buh I’d advice u to make it its correct
North Pole Toys needs to decide on their newest product line for Christmas. They narrowed their options to two possibilities: Product A would incur a fixed cost of $3,000 and a variable cost of $6 per unit and sells for $7.50; Product B would incur a fixed cost of $1,200 and a variable cost of $9 per unit and sells for $10.
A. What is the break-even point for each of the two products?
B. What is the point of indifference between the two products?
Answer:
A-1. Product A break-even point = 2,000 units
A.2. Product A break-even point = 1,200 units
B. Point of indifference between the two products = 600 units
Explanation:
A. What is the break-even point for each of the two products?
Break-even point which is the point at which the total cost of production of a product is equal to the total revenue of the product can be calculated using the following formula:
Break-even point = Fixed cost / (Selling price per unit - Variable cost per unit) ........ (1)
Using equation (1), we have:
A-1. Product A break-even point = $3,000 / ($7.50 - $6) = 2,000 units
A.2. Product A break-even point = $1,200 / ($10 - $9) = 1,200 units
B. What is the point of indifference between the two products?
Point of indifference between the two products which is the point at which the total costs of the two products are the same can be calculated as follows:
Differential fixed cost = Product A fixed cost - Product B fixed cost = $3,000 - $1,200 = $1,800
Differential variable cost per unit = Product B fixed cost variable cost per unit - Product A variable cost per unit = $9 - $6 = $3
Point of indifference between the two products = Differential fixed cost / Differential variable cost per unit = $1,800 / $3 = 600 units
Note: To obtain any of the two differentials, the lower must be deducted from the higher as done above.
Jervis sells $3,000 of its accounts receivable to Northern Bank in order to obtain necessary cash. Northern Bank charges a 4% factoring fee. What entry should Jervis make to record the transaction? Multiple Choice Debit Cash $2,880; debit Factoring Fee Expense $120; credit Accounts Receivable $3,000 Debit Accounts Receivable $2,880; debit Factoring Fee Expense $120; credit Cash $3,000. Debit Cash $3,000; credit Factoring Fee Expense $120; credit Accounts Receivable $3,000 Debit Cash $2,880; credit Accounts Receivable $2,880 Debit Accounts Receivable $3,000; credit Factoring Fee Expense $120; credit Cash $2,880
Answer: Debit Cash $2,880; debit Factoring Fee Expense $120; credit Accounts Receivable $3,000
Explanation:
Based on the information given, cash will be debited in the amount of:
= (100% - 4%) × $3000
= 96% × $3000
= 0.96 × $3000
= $2880
There'll also be a debit in the factoring fee in the amount of:
= 4% × $3000
= 0.04 × $3000
= $120
There'll be a credit in account receivable by $3000.
Therefore, the journal entry will be:
Debit Cash $2880
Debit Factoring fee = $120
Credit Account receivable = $3000
If you could start your own business, WHAT type of business would you start and WHY? Be sure your idea is a business and not a charity (animal shelter, helping homeless, etc.) The goal of your business should be to make a profit. Please answer in 3-4 sentences. "Henry Ford wanted to produce cars more efficiently; Oprah Winfrey wanted to help people make their lives better; Steve Jobs wanted to provide customers with user- friendly personal computers and new entertainment ideas." I А.
You expect Technomess Company common stock to pay a dividend of $2.40 one year from now. You can buy the stock now for $52, and you plan to sell the stock at the end of one year. Given the risk of the stock, your required rate of return is 16%. For what price would you need to sell your stock in one year in order to earn your required rate of return
Answer:
The stock price = $57.92
Explanation:
The return on a stock is the sum of the capital gains(loss) plus the dividends earned.
Capital gain is the difference between he value of the stocks when sold and the cost of the shares when purchased.
Total shareholders Return =
(Capital gain/ loss + dividend )/purchase price × 100
16% = ((x-52) + 2.40)/52
0.16×52 = (x-52) + 2.40
8.32 = X- 52 + 2.40
52+8.32-240=X
57.92 = X
$57.92= X
The stock would need to be sold for = $57.92
Exercise 13-07 Nordstrom, Inc. operates department stores in numerous states. Suppose selected financial statement data (in millions) for 2020 are presented below. End of Year Beginning of Year Cash and cash equivalents $ 770 $ 69 Accounts receivable (net) 1,950 1,880 Inventory 810 860 Other current assets 590 331 Total current assets $4,120 $3,140 Total current liabilities $2,030 $1,640 For the year, net credit sales were $8,258 million, cost of goods sold was $5,328 million, and net cash provided by operating activities was $1,251 million. Compute the current ratio, accounts receivable turnover, average collection period, inventory turnover and days in inventory at the end of the current year.
Answer: See explanation
Explanation:
1. Current Ratio = Current Assets / Current Liabilities
= $4,120 / $2030
= 2.03
2. Accounts receivable Turnover:
= Net Credit Sales / Average Accounts Receivables
= 8,258 / (1950+1880 / 2)
= 8258 / 1915
= 4.31
3. Average Collection Period
= 365 / Account Receivable Turnover
= 365 / 4.31
= 84.69 Days
4. Inventory Turnover:
= Cost of Goods Sold / Average Inventory
= 5328 / (810+860 / 2)
= 5328 / 835
= 6.38 times
5. Days in Inventory:
= 365 / Inventory Turnover Ratio
= 365 / 6.38
= 57.21 Days
If the spending multiplier equals 5 and equilibrium income is $2 billion below potential GDP, then _____ to reach the potential real GDP level. Group of answer choices total spending needs to increase by $0.1 billion nominal GDP needs to increase by $1.2 billion total spending needs to decrease by $6 billion nominal GDP needs to decrease by $12 billion total spending needs to increase by $0.4 billion
Answer:
total spending needs to increase by $0.4 billion
Explanation:
Calculation to determine how much total spending needs to increase or decrease
Using this formula
Increase or Decrease in total spending=Equilibrium income/Spending multiplier
Let plug in the formula
Increase or Decrease in total spending=$2 billion/5
Increase or Decrease in total spending=$0.4 billion
Therefore If the spending multiplier equals 5 and equilibrium income is $2 billion below potential GDP, then TOTAL SPENDING NEEDS TO INCREASE BY $0.4 BILLION to reach the potential real GDP level.
Trew Company plans to issue bonds with a face value of $909,000 and a coupon rate of 6 percent. The bonds will mature in 10 years and pay interest semiannually every June 30 and December 31. All of the bonds are sold on January 1 of this year. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answer to nearest whole dollar.)
Determine the issuance price of the bonds assuming an annual market rate of interest of 8.5 percent.
Issuance price
Answer:
$757,943
Explanation:
face value = $909,000
maturity = 10 years x 2 = 20 periods
coupon rate = 6% / 2 = 3%
coupon = $27,270
YTM = 8.5% / 2 = 4.25%
using a financial calculator, the PV of the bonds = $757,943
Dr Cash 757,943
Dr Discount on bonds payable 151,057
Cr Bonds payable 909,000
Speedy Delivery Company purchases a delivery van for $32,000. Speedy estimates that at the end of its four-year service life, the van will be worth $6,000. During the four-year period, the company expects to drive the van 130,000 miles. Actual miles driven each year were 35,000 miles in year 1 and 38,000 miles in year 2.
Required:
Calculate annual depreciation for the first two years of the van using each of the following methods.
Answer:
(1) Straight-line.
Year 1 depreciation expense = $6,500
Year 2 depreciation expense = $6,500
(2) Double-declining-balance.
Year 1 depreciation expense = $16,000
Year 2 depreciation expense = $8,000
(3) Activity-based.
Year 1 depreciation expense = $7,000
Year 1 depreciation expense = $7,600
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question as follows:
Speedy Delivery Company purchases a delivery van for $32,000. Speedy estimates that at the end of its four-year service life, the van will be worth $6,000. During the four-year period, the company expects to drive the van 130,000 miles. Actual miles driven each year were 35,000 miles in year 1 and 38,000 miles in year 2.
Required:
Calculate annual depreciation for the first two years of the van using each of the following methods.
(1) Straight-line.
(2) Double-declining-balance.
(3) Activity-based.
The explanation of the answers is now given as follows:
(1) Straight-line.
Depreciable amount = Cost of the delivery van – Salvage value = $32,000 - $6,000 = $26,000
Annual depreciation rate = 1 / Number of useful years = 1 / 4 = 0.25, or 25%
Year 1 depreciation expense = Depreciable amount * Annual depreciation rate = $26,000 * 25% = $6,500
Year 2 depreciation expense = Depreciable amount * Annual depreciation rate = $26,000 * 25% = $6,500
(2) Double-declining-balance.
Note: The salvage value is taken care of in the computation of the depreciation expense for the last useful year under the double-declining-balance method.
Therefore, we have:
Cost of the delivery van = $32,000
Annual depreciation rate = Straight line annual depreciation rate * 2 = 25% * 2 = 50%
Year 1 depreciation expense = Cost of the delivery van * Annual depreciation rate = $32,000 * 50% = $16,000
Book value at the end of year 1 = Cost of the delivery van - Year 1 depreciation expense = $36,000 - $16,000 = $16,000
Year 2 depreciation expense = Book value at the end of year 1 * Annual depreciation rate = $16,000 * 50% = $8,000
(3) Activity-based.
Depreciable amount = Cost of the delivery van – Salvage value = $32,000 - $6,000 = $26,000
Depreciation rate = Actual miles driven each year / Expected driven miles for four years ……….. (1)
Depreciation expense for each year = Depreciable amount * Depreciation rate …………… (2)
Using equations (2), we have:
Year 1 depreciation expense = $26,000 * (35,000 / 130,000) = $7,000
Year 1 depreciation expense = $26,000 * (38,000 / 130,000) = $7,600
Heidi (age 57) invested $4,000 in her Roth 401(k) on January 1, 2012. This was her only contribution to the account. On July 1, 2020, when the account balance was $6,000, she received a nonqualified distribution of $4,500. What is the taxable portion of the distribution and what amount of early distribution penalty will Heidi be required to pay on the distribution
Answer:
$450
Explanation:
For a ROTH 401 (k) qualified distribution to be non-taxable, either of the following conditions should be met:
1. Individual should be more 59 and a half years old or more.
2. Has held the account for 5 years or more.
In this case, Heidi invested at the age of 57 and received distribution of $4,500 after 8 years. So she meets both criteria but the type of distribution she received is a non-qualified one. So, $4,500 is subject to tax as per ordinary income at 10% that is $450 (0.1*4,500).
Heidi is not subject to any amount if early distribution penalty as she meets both criteria.
Roth Inc. experienced the following transactions for Year 1, its first year of operations: Issued common stock for $80,000 cash. Purchased $240,000 of merchandise on account. Sold merchandise that cost $154,000 for $306,000 on account. Collected $252,000 cash from accounts receivable. Paid $225,000 on accounts payable. Paid $54,000 of salaries expense for the year. Paid other operating expenses of $43,000. Roth adjusted the accounts using the following information from an accounts receivable aging schedule:______.
Number of Days Past Due Amount Percent Likely to Be Uncollectible Allowance Balance
Current $ 32,400 0.01
0−30 13,500 0.05
31−60 2,700 0.10
61−90 2,700 0.20
Over 90 days 2,700 0.50
a. Record the above transactions in general journal form and post to T-accounts.
b. Prepare the income statement, statement of changes in stockholders’ equity, balance sheet, and statement of cash flows for Roth Inc. for Year 1.
Answer:
Roth Inc.
a. General Journal Debit Credit
1. Cash $80,000
Common stock $80,000
To record issuance of common stock for cash.
2. Inventory $240,000
Accounts payable $240,000
To record the purchase of goods on account.
3. Cost of goods sold $154,000
Inventory $154,000
To record the cost of goods sold.
3. Accounts receivable $306,000
Sales revenue $306,000
To record the sale of goods on account.
4. Cash $252,000
Accounts receivable $252,000
To record the receipt of cash on account.
5. Accounts payable $225,000
Cash $225,000
To record the payment of cash on account.
6. Salaries expense $54,000
Cash $54,000
To record the payment of salaries.
7. Operating expenses $43,000
Cash $43,000
To record the payment of other operating expenses.
8. Bad Debts Expense $3,159
Allowance for Doubtful Accounts $3,159
To record bad debts expense for the year.
T-accounts:
Cash
Account Titles Debit Credit
Common stock $80,000
Accounts receivable $252,000
Accounts payable $225,000
Salaries expense 54,000
Operating expenses 43,000
Balance 10,000
Accounts receivable
Account Titles Debit Credit
Sales revenue $306,000
Cash $252,000
Balance 54,000
Inventory
Account Titles Debit Credit
Accounts payable $240,000
Cost of goods sold $154,000
Balance 86,000
Accounts payable
Account Titles Debit Credit
Inventory $240,000
Cash $225,000
Balance 15,000
Common stock
Account Titles Debit Credit
Cash $80,000
Sales revenue
Account Titles Debit Credit
Accounts receivable $306,000
Cost of goods sold
Account Titles Debit Credit
Inventory $154,000
Salaries expense
Account Titles Debit Credit
Cash $54,000
Operating expenses
Account Titles Debit Credit
Cash $43,000
Bad Debts Expense
Account Titles Debit Credit
Allowance for
Doubtful Accounts $3,159
Allowance for Doubtful Accounts
Account Titles Debit Credit
Bad Debts Expense $3,159
b. Income Statement for the year 1 ended December 31:
Sales revenue $306,000
Cost of goods sold 154,000
Gross profit $152,000
Expenses:
Salaries expense 54,000
Operating expense 43,000
Bad debts expense 3,159 $100,159
Net operating income $51,841
Statement of changes in stockholders' equity:
Common Stock $80,000
Net operating income 51,841
Total Equity $131,841
Balance Sheet as of December 31:
Assets:
Cash $10,000
Accounts receivable 54,000
Allowance for
doubtful accounts 3,159 50,841
Inventory 86,000
Total assets $146,841
Liabilities and Equity:
Accounts payable $15,000
Equity $131,841
Total liabilities and equity $146,841
Statement of Cash Flows for the year 1 ended December 31:
Operating activities:
Net operating income $51,841
Add non-cash expense 3,159
Working-capital:
Accounts receivable -54,000
Inventory -86,000
Accounts payable 15,000
Net operating cash flow $(70,000)
Financing activities:
Common stock $80,000
Net cash flows $10,000
Reconciliation:
Ending cash balance $10,000
Beginning cash balance 0
Increase in net cash flows $10,000
Explanation:
a) Data and Transaction Analysis:
1. Cash $80,000 Common stock $80,000
2. Inventory $240,000 Accounts payable $240,000
3. Cost of goods sold $154,000 Inventory $154,000
3. Accounts receivable $306,000 Sales revenue $306,000
4. Cash $252,000 Accounts receivable $252,000
5. Accounts payable $225,000 Cash $225,000
6. Salaries expense $54,000 Cash $54,000
7. Operating expenses $43,000 Cash $43,000
8. Bad Debts Expense $3,159 Allowance for Doubtful Accounts $3,159
Aging of Accounts Receivable:
Number of Days Amount Percent Likely to Allowance
Past Due Be Uncollectible Balance
Current $ 32,400 0.01 $324
0−30 13,500 0.05 675
31−60 2,700 0.10 270
61−90 2,700 0.20 540
Over 90 days 2,700 0.50 1,350
Total $54,000 $3,159
Trial balance
Cash $10,000
Accounts receivable 54,000
Allowance for doubtful accounts $3,159
Inventory 86,000
Accounts payable 15,000
Common stock 80,000
Sales revenue 306,000
Cost of goods sold 154,000
Salaries expense 54,000
Operating expense 43,000
Bad debts expense 3,159
Totals $404,159 $404,159
Why is a bank more likely to offer you credit if you have a co-singer with good credit?
Answer:
They can see that you have had a good credit record and they will be more likely to offer you credit.
:)
Explanation:
Epsilon Co. can produce a unit of product for the following costs: Direct material $ 8 Direct labor 24 Overhead 40 Total costs per unit $72 An outside supplier offers to provide Epsilon with all the units it needs at $60 per unit. If Epsilon buys from the supplier, the company will still incur 40% of its overhead (this means that no matter what Epsilon does, 40% of the overhead costs will remain). Epsilon should choose to:
Answer:
It is cheaper to make the units in-house.
Explanation:
Giving the following information:
Make in-house:
Direct material $ 8
Direct labor 24
Overhead 40
Total costs per unit $72
Buying price= $60
We need to determine which option provides the lower cost. Because 40% of overhead will remain constant, we have to take it out of the equation.
Production cost:
Direct material $ 8
Direct labor 24
Overhead= 40*0.6= 24
Total production cost= $56
It is cheaper to make the units in-house.
Mongar Corporation applies manufacturing overhead to products on the basis of standard machine-hours. Budgeted and actual overhead costs for the most recent month appear below:
Original Budget Actual Costs
Variable overhead costs:
Supplies $7,980 $8,230
Indirect labor 29,820 29,610
Total variable manufacturing overhead cost $37,800 $37,840
The original budget was based on 4,200 machine-hours. The company actually worked 4,350 machine-hours during the month and the standard hours allowed for the actual output were 4,190 machine-hours. What was the overall variable overhead efficiency variance for the month?
a. $130 Unfavorable
b. $950 Favorable
c. $1,440 Unfavorable
d. $1,310 Favorable
Answer:
c. $1,440 Unfavorable
Explanation:
Variable overhead efficiency variance = (Standard hours - Actual working hours) * Standard Rate
Variable overhead efficiency variance = ($4,190 hours - $4,350 hours)*($37,800/4,200 hours)
Variable overhead efficiency variance = ($4,190 hours - $4,350 hours)*$9 per hour
Variable overhead efficiency variance = 160 hours*$9 per hour
Variable overhead efficiency variance = $1,440 Unfavorable
1. A part is produced in lots of 1,000 units. It is assembled from two components worth $50 total. The value added in production (for labor and variable overhead) is $60 per unit, bringing total costs per completed unit to $110. The average lead time for the part is 6 weeks and annual demand is 3,800 units, based on 50 business weeks per year. a. How many units of the part are held, on average, in cycle inventory
Answer:
A. Average cycle inventory 500 units
Value of cycle inventory $55,000
B. Average pipeline inventory 456 units
Value of the pipeline inventory $36,480
Explanation:
a. Calculation to determine How many units of the part are held, on average, in cycle inventory
Calculation for Average cycle inventory
Average cycle inventory=1000/2
Average cycle inventory=500 units
Therefore the Average cycle inventory is 500 units
Calculation for Value of cycle inventory
Value of cycle inventory=(500 units) *($50+$60)
Value of cycle inventory=(500 units*$110)
Value of cycle inventory=$55,000
Therefore the Value of cycle inventory is $55,000
b. Calculation to determine Avarage Pipeline inventory and Value of the pipeline inventory
First step is to calculate the unit cost using this formula
Unit cost = Material + 50%of labor and variable overhead
Let plug in the formula
Unit cost=$50+(50%*$60)
Unit cost= $50 + $30
Unit cost= $80
Now let calculate the Average pipeline inventory
Average pipeline inventory = = [(3800 units/year)/(50wks/yr)] x (6 weeks)
Average pipeline inventory= 456 units
Therefore Average pipeline inventory is 456 units
Calculation to determine Value of the pipeline inventory
Value of the pipeline inventory = (456 units) x ($50+$30)
Value of the pipeline inventory=456 units×$80
Value of the pipeline inventory= $36,480
Therefore the Value of the pipeline inventory is $36,480
Retirement Investment Advisors, Inc., has just offered you an annual interest rate of 6 percent until you retire in 40 years. You believe that interest rates will increase over the next year and you would be offered 6.6 percent per year one year from today. If you plan to deposit $18,000 into the account either this year or next year, how much more will you have when you retire if you wait one year to make your deposit
Answer:
$32,529.54
Explanation:
To determine the answer the difference in future value of the investment options have to be determined
The formula for calculating future value:
FV = P (1 + r)^n
FV = Future value
P = Present value
R = interest rate
N = number of years
First option
$18,000 x (1.06)^40 = $185,142.92
Second option
$18,000 x (1.066)^39 = $217,672.46
Difference in future values = $217,672.46 - $185,142.92 = $32,529.54
All of the following are examples of federal government programs available to families in need
except:
A. public housing
B. special housing for nuclear families.
C. emergency shelter grants for the homeless.
D. special housing for aging adults.
Answer:
I think the answer is B. No guarantees.
Explanation:
Joe bought a stock at $57 per share. The price promptly fell to $55. Joe held on to the stock until it again reached $57, and then he sold it once he had eliminated his loss. If other investors do the same to establish a trading pattern, this would contradict _______. Multiple Choice the strong-form EMH the semistrong-form EMH technical analysis the weak-form EMH
Carey Company had sales in 2016 of $1,560,000 on 60,000 units. Variable costs totaled $900,000, and fixed costs totaled $500,000. A new raw material is available that will decrease the variable costs per unit by 20% (or $3). However, to process the new raw material, fixed operating costs will increase by $100,000. Management feels that one-half of the decline in the variable costs per unit should be passed on to customers in the form of a sales price reduction. The marketing department expects that this sales price reduction will result in a 5% increase in the number of units sold.
(a) Prepare a projected CVP income statement for 2017, assuming the changes have not been made, and
(b) assuming that changes are made as described.
Answer:
Results are below.
Explanation:
Giving the following information:
Selling price per unit= 1,560,000 / 60,000= $26
Unitary variable cost= 900,000 / 60,000= $15
Fixed costs= $500,000.
First, the income statement without the changes:
Sales= 1,560,000
Total varaible cost= (900,000)
Contribution margin= 660,000
Total fixed costs= (500,000)
Net operating income= 160,000
Now, with the changes:
Unitary variable cost= (15*0.8)= 12
Selling price= 26 - 1.5= $24.5
Sales in units= 60,000*1.05= 63,000
Fixed costs= 500,000 + 100,000= $600,000
Sales= 24.5*63,000= 1,543,500
Total variable cost= (12*63,000)= (756,000)
Total contribution margin= 787,500
Fixed costs= (600,000)
Net operating income= 187,500
Krepps Corporation produces a single product. Last year, Krepps manufactured 20,000 units and sold 15,000 units. Production costs for the year were as follows: Direct materials $170,000 Direct labor $110,000 Variable manufacturing overhead $200,000 Fixed manufacturing overhead $240,000 Sales totaled $825,000 for the year, variable selling and administrative expenses totaled $108,000, and fixed selling and administrative expenses totaled $165,000. There was no beginning inventory. Assume that direct labor is a variable cost. Under variable costing, the company's net operating income for the year would be:
Answer:
Under variable costing, the company's net operating income for the year would be $60,000 lower than under absorption costing.
Explanation:
The computation of the operating income under variable costing is shown below:
But before that following calculations need to be done
Fixed manufacturing overhead per unit is
= $240,000 ÷ 20,000 units
= $12 per unit
Ending Inventory units is
= 20,000 units - 15,000 units
= 5,000 units
Now Cost of ending Inventory deferred under absorption costing is
= 5,000 units × $12
= $60,000
So, the second option is correct
Lysiak Corporation uses an activity based costing system to assign overhead costs to products. In the first stage, two overhead costs--equipment depreciation and supervisory expense-are allocated to three activity cost pools--Machining, Order Filling, and Other--based on resource consumption. Data to perform these allocations appear below:
Overhead costs:
Equipment depreciation $ 47,000
Supervisory expense $ 6,000
Distribution of Resource Consumption Across Activity Cost Pools:
Activity Cost Pools
Machining Order Filling Other
Equipment depreciation 0.60 0.10 0.30
Supervisory expense 0.60 0.20 0.20
In the second stage, Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow:
Activity:
MHs (Machining) Orders (Order Filling)
Product C9 6,900 200
Product U0 3,100 800
Total 10,000 1,000
What is the overhead cost assigned to Product C9 under activity-based costing?
Answer:
$23,122
Explanation:
Calculation to determine the overhead cost assigned to Product C9 under activity-based costing
First step is to calculate the cost allocation to machining activity and order filling
MACHINING
Equipment depreciation (0.60 : 0.10 : 0.30)
Machining=$47,000 x 0.60 = $28,200
Supervisory expense (0.60 : 0.20 : 0.20) Machining=$6,000 x 0.60 = $3600
Total $31,800
($28,200+$3,600)
ORDER FILLING
Equipment depreciation (0.60 : 0.10 : 0.30)
Order filling=$47,000 x 0.10 = $4,700
Supervisory expense (0.60 : 0.20 : 0.20)
Order filling=$6000 x 0.20 = $1,200
Total $5,900
($4,700+$1,200)
Second step is to calculate the Assign overhead costs to products:
Assign overhead costs to products:
Machining= $31,800 ÷ 10,000 MHs
Machining= $3.18 per MHOrder
Order Filling=$5,900 ÷ 1,000 orders
Order Filling = $5.90 per order
Now let calculate the Overhead cost for Product C9
Machining= $3.18 per MH × 6,900
Machining=$21,942
Order Filling= $5.90 per order × 200 Orders Order Filling=$1,180
TOTAL $23,122
($21,942+$1,180)
Therefore the overhead cost assigned to Product C9 under activity-based costing is $23,122