Answer:
The Tradition Corporation
The break-even price per unit that should be charged under the new credit policy is $95.23.
Explanation:
a) Data and Calculations:
Required rate of return = 2.4% per period
Price Cost Unit Sales Total Sales Total Cost
per unit per unit per month Revenue
Current Policy $ 93 $ 44 2,675 $248,775 $117,700
New Policy ? $ 44 2,750
New price = $93 * 1.024 = $95.23
b) The new price of $95.23 with the required rate of return will ensure that revenue is not lost as a result of the new credit policy. This implies that all things being equal, The Tradition Corporation would still be in a position to make the normal revenue that it was making under the cash policy.
School band members need to raise money for new uniforms. Some members want to sell energy drinks at a football game, but others want to organize a car wash in the school parking lot. Based on the concept of scarcity, which thoughts must drive their decision making process?
Answer:
the answer is D. Are there enough volunteers to work a car wash?
Explanation:
just took quiz
Answer:
D. Are there enough volunteers to work a car wash?
Explanation:
Members of Generation Z are most likely to influence? Furniture design. B) health and insurance. C) retirement plans. D) e-textbooks E) furniture design?
Answer:
e textbooks due to the fact internet and technological processes tend to be our motif
Explanation:
What do Media Salespeople do?
A. They sell space at sport events.
B. They sell advertising space to different companies.
C. They sell-media related products online.
D. They sell websites to media companies.
Answer:
correct answer is B-they sell advertisement space to different companies
Explanation:
Morris Company applies overhead based on direct labor costs. For the current year, Morris Company estimated total overhead costs to be $452,000, and direct labor costs to be $2,260,000. Actual overhead costs for the year totaled $419,000, and actual direct labor costs totaled $1,930,000. At year-end, the balance in the Factory Overhead account is a: Multiple Choice $452,000 Credit balance. $386,000 Debit balance. $33,000 Debit balance. $33,000 Credit balance. $419,000 Debit balance.
Answer:
As overhead was underapplied, the balance in overhead will be $33,000 credit.
Explanation:
First, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 452,000 / 2,260,000
Predetermined manufacturing overhead rate= $0.2 per direct labor dollar
Now, we can allocate costs:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 0.2*1,930,000
Allocated MOH= $386,000
Finally, we determine the over/under allocation:
Under/over applied overhead= real overhead - allocated overhead
Under/over applied overhead= 419,000 - 386,000
Underapplied overhead= $33,000
As overhead was underapplied, the balance in overhead will be $33,000 credit.
The _____ the distance between the time of the event and the time the client knows about the events, the greater _____. greater; the probability of achieving the project goals greater; the likelihood of satisfying the client lesser; the client's doubt in the project team's ability to do the task lesser; the frustration of the client greater; the client's frustration and mistrust
Answer:
greater; the client's frustration and mistrust.
Explanation:
Project management can be defined as the process of designing, planning, developing, leading and execution of a project plan or activities using a set of skills, tools, knowledge, techniques and experience to achieve the set goals and objectives of creating a unique product or service.
The fundamentals of Project Management includes;
1. Project initiation
2. Project planning
3. Project execution
4. Monitoring and controlling of the project
5. Adapting and closure of project.
It is very important and essential that project managers in various organizations, businesses and professions adopt the aforementioned fundamentals in order to successfully achieve their aim, objectives and goals set for a project.
Generally, projects are considered to be temporary because they usually have a start-time and an end-time to complete, execute or implement the project plan.
The greater the distance between the time of the event and the time the client knows about the events, the greater the client's frustration and mistrust. Thus, project managers are advised to reduce a client's frustration and enhance trust by reducing the distance between the time of the event and the time the client knows about the events i.e timely dissemination of informations to the client.
According to the standard cost card, each helmet should require 0.52 kilograms of plastic, at a cost of $8.00 per kilogram. Required: 1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 3,400 helmets? 2. What is the standard materials cost allowed (SQ × SP) to make 3,400 helmets? 3. What is the materials spending variance? 4. What is the materials price variance and the materials quantity variance?
Answer:
Please find the complete question in the attached file and its solution can be defined as follows:
Explanation:
The standard kgs permitted[tex]= 3100 \times 0.62 = 1922[/tex]
Current production Standard cost permitted [tex]=1922\times 7= 13454[/tex]
Variance of materials for expenditure [tex]= 13708-13454= 254 \ \ \ U[/tex]
Outlined various of materials [tex]= 13708-(2077\times 7)= 831 \ \ \ F[/tex]
Variability of additional channel [tex]= 7\times (2077-1922)= 1085\ \ \ U[/tex]
Which of the following statements is CORRECT?
a. Suppose you are managing a stock portfolio, and you have information that leads you to believe the stock market is likely to be very strong in the immediate future. That is, you are convinced that the market is about to rise sharply. You should sell your high-beta stocks and buy low-beta stocks in order to take advantage of the expected market move.
b. Collections Inc. is in the business of collecting past-due accounts for other companies, i.e., it is a collection agency. Collections' revenues, profits, and stock price tend to rise during recessions. This suggests that Collections Inc.'s beta should be quite high, say 2.0, because it does so much better than most other companies when the economy is weak.
c. Suppose the returns on two stocks are negatively correlated. One has a beta of 1.2 as determined in a regression analysis using data for the last 5 years, while the other has a beta of %u22120.6. The returns on the stock with the negative beta must have been negatively correlated with returns on most other stocks during that 5-year period.
d. If the market risk premium remains constant, but the risk-free rate declines, then the required returns on low-beta stocks will rise while those on high-beta stocks will decline.
e. You think that investor sentiment is about to change, and investors are about to become more risk averse. This suggests that you should rebalance your portfolio to include more high-beta stocks
Answer: C. Suppose the returns on two stocks are negatively correlated. One has a beta of 1.2 as determined in a regression analysis using data for the last 5 years, while the other has a beta of %u22120.6. The returns on the stock with the negative beta must have been negatively correlated with returns on most other stocks during that 5-year period.
Explanation:
From the options given, the correct option is option C "Suppose the returns on two stocks are negatively correlated. One has a beta of 1.2 as determined in a regression analysis using data for the last 5 years, while the other has a beta of %u22120.6. The returns on the stock with the negative beta must have been negatively correlated with returns on most other stocks during that 5-year period".
Option A is wrong because when there is information that a particular stock will be strong in the future, one should not sell your high-beta stocks and buy low-beta stocks rather the low best stocks should be sold and high beta stocks should be bought.
Option B is wrong because during recession, collections' revenues, profits, and stock price tend to fall and not rise. During recession, there is decrease in economic growth, unemployment and other negative effects in the economy.
Option D and E are wrong as well as the reverse is the case in both situations. The correct option is C.
Good interpersonal communication skills can prevent negativity, confusion, conflict and
profitability
an adverse affect to the company's bottom line
low turnover
Answer:
an adverse effect on the company's bottom line
Explanation:
Given that profitability means the company is making success in terms of sales, and low turnover means, the company is having a lower number of employees leaving the company over a specific period compared to the number of employees recruited.
Therefore, Good interpersonal communication skills can prevent negativity, confusion, conflict and
an adverse effect on the company's bottom line.
Polson Pool Company is involved in a number of competitive bidding situations. The following costs are anticipated for a project to be bid for Terrance Manufacturing:
Direct material $ 680,000
Direct labor 2,450,000
Allocated variable overhead 570,000
Allocated fixed cost 230,000
Which of these costs would be treated differently if Polson had either excess capacity or no excess capacity?
a. Allocated variable overhead, $570,000
b. Direct labor, $2,450,000
c. Allocated fixed cost, $230,000
d. Direct materials used, $680,000.
Answer: c. Allocated fixed cost, $230,000
Explanation:
The Allocated fixed cost is fixed based on a certain level of production. If Polson had excess capacity to produce more goods or no excess capacity, the allocated fixed costs would have to be treated differently to account for this.
The variable costs however would not have to change because they are already based on the quantity of goods produced so even if there is excess or no excess capacity, their cost per unit would not change.
Prepare a bank reconciliation for Cole Co. assuming the following as of May 31. Use the worksheet provided in the Ch 7 Module: 1) The company's cash account as a debit balance of: $95,250 2) The bank statement shows a balance of: $82,500 3) April 30 outstanding checks: $11,317 5) A credit memorandum was received by the bank, but not recorded by Cole Co. by May 31 a) Cash collected by the bank: $18,000 b) Collection fee deducted by bank: $45 6) Check 1115 was written and drawn for $1,350 but was erroneously entered in the accounting records as $1,050. The check was for rent. 7) May 31st daily cash sales were deposited but did not appear on the May 31 bank statement. $41,750 8) Interest earned, but not recorded:
Answer:
Cole Co.
Bank Reconciliation Statement
Balance as per cash account adjusted $112,933
add uncredited deposits 11,317
less Outstanding checks -41,750
Balance as per bank statement $82,500
Explanation:
a) Data and Calculations:
Cash account debit balance = $95,250
Bank statement balance = $82,500
Outstanding checks = $11,317
Credit memorandum $18,000
Collection fee $45
Check 1115 for Rent Expense of $1,350 transposed as $1,050 = $300 ($1,350 - $1050)
Uncredited deposits = $41,750
Interest earned = $28
Cash Account Adjustment:
Cash account debit balance $95,250
Debit:
Credit memorandum 18,000
Interest earned 28
Credit:
Collection fee -45
Rent Expense (understated) -300
Adjusted cash account balance $112,933
b) The bank reconciliation statement above was prepared after adjusting the cash account with items that were recorded by the bank but not recorded by Cole Co. and other misstatements. With the adjusted cash account balance, the bank reconciliation was then carried out with the items that were not recorded by the bank. The resulting figure should agree with the bank statement balance.
The total cost of producing q units of a certain product is described by the function C = 4,000,000 + 300q + 0.01q2 where C is the total cost stated in dollars. (1) How many units should be produced in order to minimize the average cost per unit? (2) What is the minimum average cost per unit? (3) What is the total cost of production at this level of output? Make sure to include appropriate units.
Answer:
(1) 20,000 units should be produced in order to minimize the average cost per unit.
(2) The minimum average cost per unit is $700 per unit.
(3) The total cost of production at this level of output is $14,000,000.
Explanation:
The given total cost function is correctly stated as follows:
C = 4,000,000 + 300q + 0.01q^2 …………………………… (1)
(1) How many units should be produced in order to minimize the average cost per unit?
AC = Average cost per unit = C / q
Substituting for C from equation (1), we have:
AC = (4,000,000 + 300q + 0.01q^2) / q …………………. (2)
Marginal cost can be obtained by taking the derivative of equation (1) as follows:
MC = C’ = 300 + (2 * 0.01)q
MC = 300 + 0.02q …………………………………………. (3)
AC is minimum when MC = AC. Therefore, equate equations (2) and (3) and solve for q as follows:
300 + 0.02q = (4,000,000 + 300q + 0.01q^2) / q
(300 + 0.02q)q = 4,000,000 + 300q + 0.01q^2
300q + 0.02q^2 = 4,000,000 + 300q + 0.01q^2
300q + 0.02q^2 - 300q - 0.01q^2 = 4,000,000
0.01q^2 = 4,000,000
q^2 = 4,000,000 / 0.01
q^2 = 400,000,000
q = 400,000,000^(1/2)
q = 20,000 units
Therefore, 20,000 units should be produced in order to minimize the average cost per unit.
(2) What is the minimum average cost per unit?
Substituting q = 20,000 into equation (2), we have:
AC = (4,000,000 + (300 * 20,000) + (0.01 * 20,000^2)) / 20,000
AC = $700 per unit
Therefore, the minimum average cost per unit is $700 per unit.
(3) What is the total cost of production at this level of output?
Substituting q = 20,000 into equation (1), we have:
C = 4,000,000 + (300 * 20,000) + (0.01 * 20,000^2)
C = $14,000,000
Therefore, the total cost of production at this level of output is $14,000,000.
Fill in the missing numbers for the following income statement. (Input all amounts as positive values. Do not round intermediate calculations.)
Sales Costs Depreciation EBIT Taxes (22%) Net income 747,300 582,600 89,300
a. Calculate the OCF. (Do not round intermediate calculations.)
b. What is the depreciation tax shield? (Do not round intermediate calculations.)
a. OCF
b. Depreciation tax shield
Answer: See explanation
Explanation:
Sales = 747300
Less: Costs = 582600
Less: Depreciation = 89300
EBIT = 75400
Less: Taxes at 22% = 22% × 75400 = 16588
Net income = EBIT - Taxes = 75400 - 16588 = 58812
a. Calculate the OCF.
OCF will be calculated as:
= Net income + Depreciation
= 58812 + 89300
= 148,112
b. What is the depreciation tax shield?
Depreciation tax shield will be:
= Depreciation × Tax rate
= 89300 × 22%
= 89300 × 0.22
= 19646
Boss Company reported the following results for the year ended December 31, 2019, its first year of operations: 2019 Income (per books before income taxes) $ 1,500,000 Taxable income 2,500,000 The disparity between book income and taxable income is attributable to a temporary difference which will reverse in 2019. What should Boss record as a net deferred tax asset or liability for the year ended December 31, 2019, assuming that the enacted tax rates in effect are 40% in 2019 and 35% in 2020
Answer:
$350,000 deferred tax asset.
Explanation:
Calculation to determine What should Boss record as a net deferred tax asset or liability for the year ended December 31, 2019,
Using this formula
December 31, 2019 Net deferred tax asset or liability=Taxable income -2019 Income (per books before income taxes)
Let plug in the formula
December 31, 2019 Net deferred tax asset or liability=(2,500,000 - $ 1,500,000) × 35%
December 31, 2019 Net deferred tax asset or liability= $350,000 deferred tax asset.
Therefore what Boss should record as a net deferred tax asset for the year ended December 31, 2019 is $350,000
Brief Exercise 9-10 Cullumber Company sells equipment on September 30, 2019, for $16,000 cash. The equipment originally cost $71,000 and as of January 1, 2019, had accumulated depreciation of $41,000. Depreciation for the first 9 months of 2019 is $4,750. Prepare the journal entries to (a) update depreciation to September 30, 2019, and (b) record the sale of the equipment.
Answer:
A. Dr Depreciation Expense $4,750
Cr Accumulated Depreciation $4,750
B. Dr Accumulated Depreciation $45,750
Dr Cash $16,000
Dr Loss on Disposal of Plant Assets 9,250
Cr Equipment $71,000
Explanation:
A. Preparation of the journal entries to update depreciation to September 30, 2019
Dr Depreciation Expense $4,750
Cr Accumulated Depreciation $4,750
(Being to update depreciation )
B.Preparation of the journal entries to record the sale of the equipment
Dr Accumulated Depreciation $45,750
($41,000+$4,750)
Dr Cash $16,000
Dr Loss on Disposal of Plant Assets 9,250
($71,000-45,750-16,000)
Cr Equipment $71,000
(Being to record the sale of the equipment)
Budgeted amount: 0.5 machine hours per (MH) unit Variable overhead rate is $15 per MH Fixed overhead rate is $40 per MH Budgeted fixed overhead is $600,000 Actual amounts: Variable overhead incurred is $190,000 Fixed overhead incurred is $630,000 MH used is 11,000 Actual output is 20,000 units What is the Fixed Overhead Volume Variance
Answer:
Fixed overhead volume variance = $200,000 Favorable
Explanation:
The fixed overhead volume variance is the difference between the actual and budgeted production unit multiplied by the standard fixed production overhead cost per unit
Units
Budgeted units 15,000
Actual units 20,000
Variance 5,000
Fixed overhead rate per unit × $40
Fixed overhead volume variance $200,000
Sunland Company just began business and made the following four inventory purchases in June: June 1 153 units $1071 June 10 204 units 1632 June 15 204 units 1836 June 28 153 units 1530 $6069 A physical count of merchandise inventory on June 30 reveals that there are 204 units on hand. Using the average cost method, the amount allocated to the ending inventory on June 30 is
Answer:
the ending inventory is $1,734
Explanation:
The computation of the amount allocated to the ending inventory is shown below:
But before that the average per unit is
= Total amount ÷ total units
= $6,069 ÷ (153 + 204 + 204 + 153)
= $8.5
Since the ending inventory units is 204 units
So, the ending inventory is
= $8.5 ×204 units
= $1,734
hence, the ending inventory is $1,734
Hsung Company accumulates the following data concerning a proposed capital investment: cash cost $226,445, net annual cash flows $40,500, and present value factor of cash inflows for 10 years is 5.89 (rounded). (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45).) Determine the net present value, and indicate whether the investment should be made.
Answer:
Hsung Company
a. The net present value is:
= $12,100.
b. Since the investment could yield a net present value of $12,100, the investment should be made.
Explanation:
a) Data and Calculations:
Cash cost of proposed capital investment = $226,445
Net annual cash inflows = $40,500
Present value factor of cash inflows for 10 years = 5.89 (rounded)
Present value of net annual cash inflows = $238,545 ($40,500 * 5.89)
The net present value of the proposed capital project = Present value of net annual cash inflows minus the initial investment cost
= $12,100 ($238,545 - $226,445)
Answer:
12100
Explanation:
40500*5.89=238545
238545-226445=12100
12100
Flyer Company has provided the following information prior to any year-end bad debt adjustment: Cash sales, $158,000 Credit sales, $458,000 Selling and administrative expenses, $118,000 Sales returns and allowances, $38,000 Gross profit, $498,000 Accounts receivable, $185,000 Sales discounts, $22,000 Allowance for doubtful accounts credit balance, $2,000 Flyer estimates bad debt expense assuming that 1.5% of credit sales have historically been uncollectible. What is the balance in the allowance for doubtful accounts after bad debt expense is recorded
Answer:
$8,870
Explanation:
Calculation to determine the balance in the allowance for doubtful accounts after bad debt expense is recorded
Using this formula
Balance in the allowance for doubtful accounts=
(Credit sales* Percentage of Credit sales)+Allowance for doubtful accounts credit balance
Let plug in the formula
Balance in the allowance for doubtful accounts= ($458,000*1.5%)+$2,000
Balance in the allowance for doubtful accounts=$6,870+$2,000
Balance in the allowance for doubtful accounts=$8,870
Therefore the balance in the allowance for doubtful accounts after bad debt expense is recorded will be $8,870
The 2017 and 2016 balance sheets of Rabb Corporation follow. The 2017 income statement is also provided. Rabb had no noncash investing and financing transactions during 2017. During the year, the company sold equipment for $15,100, which had originally cost $13,500 and had a book value of $10,500. The company did not issue any notes payable during the year but did issue common stock for $31,000. The company purchased plant assets and long-term investments with cash.
Requirements
1. Prepare the statement of cash flows for RabbRabb Corporation for 20172017 using the indirect method.
2. Evaluate the company's cash flows for the year. Discuss each of the categories of cash flows in your response.
Answer:
I looked for the missing information (IS & BS) since the information was missing
Statement of cash flows
Cash flows from operating activities:
Net income $183,500
Adjustments to new income
Depreciation $5,900
Gain on sale of equipment ($4,600)
Increase in accounts receivable ($3,200)
Decrease in inventory $6,500
Increase in prepaid insurance ($700)
Decrease in account payable ($2,600)
Decrease in wages payable ($4,400)
Increase in interest payable $2,100
Increase in taxes payable $5,400
Decrease in accrued expenses payable ($4,000)
Total cash flow provided by operating activities $183,900
Cash flow from investing activities:
Cash provided by sale of equipment $15,100
Cash paid for investments ($117,000)
Cash paid for P, P & E ($27,500)
Total cash flow from investing activities ($129,400)
Cash flow from financing activities:
Cash paid for long term debt ($34,000)
Dividends paid ($22,300)
Common stocks issued $31,000
Total cash flow from financing activities ($25,300)
Net increase in cash $29,200
Beginning cash balance $20,500
Ending cash balance $49,700
2. Shell Biotech Corporation is considering two mutually exclusive capital investment projects. Project 1 costs $75,000, and would produce annual cash flows of $16,200 for each of the next 9 years. Project 2 also costs $75,000, but would produce annual cash flows of $14,000 for each of the next 12 years. If Shell's cost of capital is 11%, which alternative should be chosen
Answer:
Project 2
Explanation:
The better alternative can be determined by calculating the npv
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
Project 1
Cash flow in year 0 = $-75,000
Cash flow each year fromyear 1 to 9 = $16,200
I = 11%
NPV = 14,700.17
Project 2
Cash flow in year 0 = $-75,000
Cash flow each year fromyear 1 to 12 = $14,000
I = 11%
NPV = 15,892.99
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Kyle owned a small business that sold and repaired several styles of bicycles. Last month, Kyle had sales of $15,000 and the costs of operating his business were $12,300.
Which of the following is true about Kyle's business?
•
The business earned a profit.
•
The business should focus on expansion.
•
The business experienced a loss.
•
The business is not capitalizing on a need
Answer:
The business earned a profit.
Required: 1-a. Prepare a contribution format income statement for the game last year. 1-b. Compute the degree of operating leverage. 2. Management is confident that the company can sell 41,796 games next year (an increase of 9,396 games, or 29%, over last year). Given this assumption: a. What is the expected percentage increase in net operating income for next year
Question Completion:
Magic Realm, Inc., has developed a new fantasy board game. The company sold 32,400 games last year at a selling price of $67 per game. Fixed expenses associated with the game total $567,000 per year, and variable expenses are $47 per game. Production of the game is entrusted to a printing contractor. Variable expenses consist mostly of payments to this contractor. Required: 1-a. Prepare a contribution format income statement for the game last year. 1-b. Compute the degree of operating leverage. 2. Management is confident that the company can sell 41,796 games next year (an increase of 9,396 games, or 29%, over last year). Given this assumption: a. What is the expected percentage increase in net operating income for next year?
Answer:
Magic Realm, Inc.
1-a. Contribution-Format Income Statement
For the last year ended December 31
Sales revenue $2,170,000 (32,400 * $67)
Variable costs 1,522,800 (32,400 * $47)
Contribution $647,200 (32,400 * $20)
Fixed expenses 567,000
Net operating income $80,200
1-b. Degree of Operating Leverage = Contribution/Net operating income
= 8.07
The expected percentage increase in net operating income for next year
= 235.3%
Explanation:
a) Data and Calculations:
Last year's figures:
Sales = 32,400 games
Selling price per game = $67
Variable cost per game = $47
Fixed expenses = $567,000 per year
1-a. Contribution-Format Income Statement
For the last year ended December 31
Sales revenue $2,170,000 (32,400 * $67)
Variable costs 1,522,800 (32,400 * $47)
Contribution $647,200 (32,400 * $20)
Fixed expenses 567,000
Net operating income $80,200
1-b. Degree of Operating Leverage = Contribution/Net operating income
= $647,200/$80,200 = 8.07
2. Next year:
Sales = 41,796 games
Sales revenue = $2,800,332 (41,796 * $67)
Variable cost = 1,964,412 (41,796 * $47)
Contribution = $835,920
Fixed costs = 567,000
Net operating income $268,920
The expected percentage increase in net operating income for next year
Increase in net operating income = $188,720 ($268,920 - $80,200)
= $188,720/$80,200 * 100 = 235.3%
if your credit card is $10,275 and you pay the full balance before the bill is due, how much will you pay in interest
Answer:
you do not pay interest on any money that does not carry over till the next month. if your balance is zero theres no interest
Explanation:
you only pay on a balance the % per dollar to the card . so if the card charges 10% on 100$ if your balance is 100$ you will owe 110$ on your next billing cycle
Perez Modems has excess production capacity and is considering the possibility of making and selling paging equipment. The following estimates are based on a production and sales volume of 2,200 pagers. Unit-level manufacturing costs are expected to be $32. Sales commissions will be established at $2.20 per unit. The current facility-level costs, including depreciation on manufacturing equipment ($72,000), rent on the manufacturing facility ($62,000), depreciation on the administrative equipment ($15,600), and other fixed administrative expenses ($77,950), will not be affected by the production of the pagers. The chief accountant has decided to allocate the facility-level costs to the existing product (modems) and to the new product (pagers) on the basis of the number of units of product made (i.e., 6,200 modems and 2,200 pagers). Required a. Determine the per-unit cost of making and selling 2,200 pagers. (Do not round intermediate calculations. Round your answer to 3 decimal places.) b. Assuming the pagers could be sold at a price of $46 each, should Perez make the pagers
Answer and Explanation:
a. The computation of the per unit cost is shown below:
= Manufacturing cost per unit + sales commission per unit
= $32 + $2.20
= $34.20
Here we just add the two cost so that the per unit cost could come
b. Yes it should make the pagers as the cost per unit would be lower than the selling price i.e, $46
Therefore the above should be relevant for the given situation
nswer the question on the basis of the following cost data. Output Average Fixed Cost Average Variable Cost 1 $50.00 $100.00 2 25.00 80.00 3 16.67 66.67 4 12.50 65.00 5 10.00 68.00 6 8.37 73.33 7 7.14 80.00 8 6.25 87.50 If the firm closed down in the short run and produced zero units of output, its total cost would be Multiple Choice $0. $50. $150. $100.
Answer:
The correct answer is $50.
Explanation:
When the company produces zero units, the only costs that it would incur will be the fixed costs. We need to determine the total fixed costs:
Total fixed costs= Unitary fixed costs*number of units
Total fixed costs= 50*1= $50
Total fixed costs= 25*2= $50
Total fixed cost= 16.67*3= $50
Total fixed cost= 12.50*4= $50
And so on...
On a unitary basis, the fixed costs decrease with production. On a total basis, it remains constant.
Production= 0
Fixed cost= $50
Essence of Skunk Fragrances, Ltd., sells 5,750 units of its perfume collection each year at a price per unit of $445. All sales are on credit with terms of 1/10, net 40. The discount is taken by 35 percent of the customers.
Required:
What is the amount of the company's accounts receivable?
Answer:
The amount of the company's accounts receivable is $2,558,750.
Explanation:
Accounts Receivables are amounts owed to the company. They are measured at amounts that the company expects to be entitled to after a sale.
The sale journal is :
Debit : Accounts Receivables (5,750 units x $445) $2,558,750
Credit : Sales Revenue (5,750 units x $445) $2,558,750
The outstanding checks total_________.
1. $158.53
2. $246.53
3. $48.00
4. $914.47
Answer:
1,367.53
Explanation:
Puget Sound Divers is a company that provides diving services such as underwater ship repairs to clients in the Puget Sound area. The company’s planning budget for May appears below: Puget Sound Divers Planning Budget For the Month Ended May 31 Budgeted diving-hours (q) 350 Revenue ($390.00q) $ 136,500 Expenses: Wages and salaries ($11,100 + $120.00q) 53,100 Supplies ($5.00q) 1,750 Equipment rental ($2,500 + $25.00q) 11,250 Insurance ($4,100) 4,100 Miscellaneous ($520 + $1.42q) 1,017 Total expense 71,217 Net operating income $ 65,283 During May, the company’s actual activity was 340 diving-hours. Required: Prepare a flexible budget for May. (Round your answers to the nearest whole number.)
Answer:
Puget Sound Divers
Puget Sound Divers Planning and Flexible Budgets
For the Month Ended May 31
Planning Flexible
Budget Budget
Budgeted diving-hours (q) 350 340
Revenue ($390.00q) $ 136,500 $132,600
Expenses:
Wages and salaries 53,100 51,900
Supplies ($5.00q) 1,750 1,700
Equipment rental 11,250 11,000
Insurance ($4,100) 4,100 4,100
Miscellaneous 1,017 1,003
Total expense 71,217 69,703
Net operating income $ 65,283 $ 62,897
Explanation:
a) Data and Calculations:
Puget Sound Divers Planning Budget
For the Month Ended May 31
Budgeted diving-hours (q) 350
Revenue ($390.00q) $ 136,500
Expenses:
Wages and salaries ($11,100 + $120.00q) 53,100
Supplies ($5.00q) 1,750
Equipment rental ($2,500 + $25.00q) 11,250
Insurance ($4,100) 4,100
Miscellaneous ($520 + $1.42q) 1,017
Total expense 71,217
Net operating income $ 65,283
Flexing the budget with actual activity of 340:
Revenue ($390.00q) $ 136,500/350 * 340 = $132,600
Expenses:
Wages and salaries ($11,100 + $120.00 * 340) = $51,900
Supplies ($5.00q) 1,750/350 * 340 = $1,700
Equipment rental ($2,500 + $25.00 * 340 = $11,000
Miscellaneous ($520 + $1.42 * 340 = $1,003
Interest rates and decisions
Suppose that a firm is facing an upward-sloping yield curve and needs to borrow money to invest in production. Does this mean that the firm should consider borrowing only at short-term rates?
a. No, the firm needs to take the volatility of short-term rates into account.
b. No, an upward-sloping yield curve means that the firm will get a lower interest rate if it uses long-term financing
c. Yes, using short-term financing will give the firm the lowest possible interest rate over the life of the project.
Credit ratings affect the yields on bonds. Based on the scenario described in the following table, determine whether yields will increase or decrease and whether it will be more expensive or less expensive, as compared to other players in the market, for a company to borrow money from the bond market.
Scenario Impact on Yield Cost of Borrowing Money
from Bond Markets
ABC Real Estate is a commercial real estate firm that primarily uses short-term financing, while its competitors primarily use long-term financing. Interest rates have recently increased dramatically. Decrease More expensive Ziffy Corp.’s credit rating was downgraded from AAA to A. Bellgotts Inc. has increased its market share from 15% to 37% over the last year while maintaining a profit margin greater than the industry average. Previously, Ferro Co. had only used short-term debt financing. The company now finances its current assets such as inventories and receivables with short-term debt, and it finances its fixed assets such as buildings and equipment with long-term debt.
Answer:
a. No, the firm needs to take the volatility of short-term rates into account.
Explanation:
Short term interest rates are more volatile than the long term interest rates. If the company chooses to finance its operations solely from short term financing than it will need to incorporate the affect of volatility in the short term interest rates to identify the net returns. The volatility should be calculated with the risk factor and required rate of return of the funds.
g Travis and Jeff own an adventure company called Whitewater Rafting. Due to quality and availability problems, the two entrepreneurs have decided to produce their own rubber rafts. The initial investment in plant and equipment is estimated to be $2,000. Labor and material cost is approximately $5 per raft. Of the rafts can be sold at a price of $10 each, what volume of demand would be necessary to break even