Question Completion:
The adjusted trial balance for Chiara Company as of December 31 follows.
Debit Credit
Cash $182,200
Accounts receivable 51,500
Interest receivable 21,000
Notes receivable (due in 90 days) 169,000
Office supplies 15,500
Automobiles 175,000
Accumulated depreciation-Automobiles $70,000
Equipment 142,000
Accumulated depreciation-Equipment 19,000
Land 85,000
Accounts payable 98,000
Interest payable 50,000
Salaries payable 16,000
Unearned fees 30,000
Long-term notes payable 152,000
Common stock 51,580
Retained earnings 284,220
Dividends 48,000
Fees earned 524,000
Interest earned 34,000
Depreciation expense-Automobiles 27,500
Depreciation expense-Equipment 18,500
Salaries expense 190,000
Wages expense 44,000
Interest expense 36,200
Office supplies expense 35,800
Advertising expense 60,000
Repairs expense-Automobiles 27,600
Totals $1,328,800 $1,328,800
Answer:
CHIARA COMPANY
a) Income Statement For Year Ended December 31
Fees earned $524,000
Interest earned 34,000
Total revenue $558,000
Depreciation expense-Automobiles 27,500
Depreciation expense-Equipment 18,500
Salaries expense 190,000
Wages expense 44,000
Interest expense 36,200
Office supplies expense 35,800
Advertising expense 60,000
Repairs expense-Automobiles 27,600
Total expenses $ 439,600
Net income $118,400
CHIARA COMPANY
2. Statement of Retained Earnings For Year Ended December 31
Retained earnings, Dec.31 prior year $284,220
Add: Net income 118,400
402,620
Less: Dividends 48,000
Retained earnings, Dec. 31 current year $354,620
CHIARA COMPANY
3. Balance Sheet December 31
Assets
Current assets:
Cash $182,200
Accounts receivable 51,500
Interest receivable 21,000
Notes receivable (due in 90 days) 169,000
Office supplies 15,500 $439,200
Long-term assets:
Automobiles 175,000
Accumulated depreciation 70,000 105,000
Equipment 142,000
Accumulated depreciation 19,000 123,000
Land 85,000 $313,000
Total assets $752,200
Liabilities + Equity
Current liabilities:
Accounts payable $98,000
Interest payable 50,000
Salaries payable 16,000
Unearned fees 30,000 $194,000
Long-term notes payable 152,000
Total liabilities $346,000
Equity:
Common stock $51,580
Retained earnings 354,620 $406,200
Total equity Total liabilities and equity $752,200
Explanation:
The financial statements above are prepared from the adjusted trial balance. The revenue items (temporary accounts) are closed to the income statement, while the assets, liabilities, and equity accounts (permanent items) are closed to the balance sheet. The Statement of retained earnings links the income statement and the balance sheet through the adjustments to the net income and retained earnings.
Make-or-Buy Decision
Fremont Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $40 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 25% of direct labor cost. The unit costs to produce comparable carrying cases are expected to be as follows:
Direct materials $16
Direct labor 20
Factory overhead (25% of direct labor) 5
Total cost per unit $41
If Fremont Computer Company manufactures the carrying cases, fixed factory overhead costs will not increase and variable factory overhead costs associated with the cases are expected to be 5% of the direct labor costs.
a. Prepare a differential analysis dated September 30 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the carrying case. If an amount is zero, enter "0". If required, round your answers to two decimal places. Use a minus sign to indicate a loss.
Differential Analysis
Make Carrying Case (Alt. 1) or Buy Carrying Case (Alt. 2)
September 30
Make Carrying Case (Alternative 1) Buy Carrying Case (Alternative 2) Differential Effect on Income (Alternative 2)
Sales price $ $ $
Unit costs:
Purchase price
Direct materials
Direct labor
Variable factory overhead
Fixed factory overhead
Income (loss) $ $ $
b. Assuming there were no better alternative uses for the spare capacity, it would (Be advisable, Not be advisable) to manufacture the carrying cases. Fixed factory overhead is(Relevant, Irrelevant) to this decision.
Answer:
A. Make carrying case(Alternative 1) $41.00
Buy carrying case (Alternative 2)$44.00
Differential effect on net income (Alternative 2)($3.00)
B. Assuming there were no better alternative uses for the spare capacity, it would BE ADVISABLE to manufacture the CARRYING CASES. Fixed overhead is IRRELEVANT to this decision.
Explanation:
A. Preparation of a Differential Analysis
DIFFERENTIAL ANALYSIS
Make carrying case Buy carrying case
(Alternative 1) (Alternative 2)
Alternative 1 Alternative 2 Differential effect on net income (Alternative 2)
Sales price
$0.00 $0.00 $0.00
Purchase Price
$0.00 $40.00 ($40.00)
Direct materials
$16.00 $0.00 $16.00
Direct labor
$20.00 $0.00 $20.00
Variable manufacture overhead (20*5%=$1.00)
$1.00 $0.00 $1.00
Fixed manufacture overhead($5.00-$1.00) $4.00 $4.00 $0.00
Income(Loss)
$41.00 $44.00 ($3.00)
Based on the above calculation Alternative 1 which is carrying case should be Choose by the Company .
B. Therefore Assuming there were no better alternative uses for the spare capacity, it would BE ADVISABLE to manufacture the CARRYING CASES. Fixed overhead is IRRELEVANT to this decision.
The Sarbanes-Oxley Act of 2002 has: Group of answer choices reduced the annual compliance costs of all publicly traded firms in the U.S. decreased senior management's involvement in the corporate annual report. decreased the number of U.S. firms going public on foreign exchanges. made officers of publicly traded firms personally responsible for the firm's financial statements.
Answer:
made officers of publicly traded firms personally responsible for the firm's financial statements
Explanation:
The Sarbanes-Oxley Act, due to corporate fraud, was created to restore investor confidence in financial markets and to fill loopholes in publicly traded companies.The law created strong audit committees for companies that traded publicly and made officials (companies) personally responsible for the accuracy of financial statements.aAssault and battery is a tort not a crime when the action involves people who know each other
Answer:
it is an assault if they know you, but they can choose if you are accused of it.
Explanation:
Assume sales are $14,570, cost of goods sold is $3,820, depreciation expense is $410, interest paid is $730, selling and general expenses are $960, dividends paid are $1,170, and the tax rate is 21 percent. What is the addition to retained earnings
Answer:
Amount added to retained earnings $5,663.50
Explanation:
The computation of the addition to the retained earning is shown below:
Sales $14,570
Less: Cost of goods sold -$3,820
Less: Depreciation -$410
Less: Interest paid -$730
Less: Selling and administration expenses -$960
Profit Before Tax $8,650
Less: Tax at 21% -1,816.50
Profit After tax $6,833.50
Less: Dividend paid -$1,170
Amount added to retained earnings $5,663.50
Argo, a firm organizing adventure travel, has returns that vary with the economy. Argo predicts that there is a 20% probability of a strong economy, a 50% probability of a normal economy, and a 30% probability of a weak economy. Given a strong economy, Argo expects a 35% return, given a normal economy, Argo expects a 14% return, and given a weak economy, Argo expects to lose 20%. What is the expected return for Argo
Answer: 8%
Explanation:
The expected return is a weighted average of the returns given the probability of certain states of the economy:
= (Prob. of boom * return if boom) + (Prob. of normal * return if normal) + (Prob. of weak * return if weak)
= (20% * 35%) + (50% * 14%) + (30% * -20%)
= 0.07 + 0.07 - 0.06
= 8%
Answer:
it is 8% my dear friend
Explanation:
Rodriguez Company pays $342,225 for real estate with land, land improvements, and a building. Land is appraised at $245,000; land improvements are appraised at $73,500; and a building is appraised at $171,500. Required: 1. Allocate the total cost among the three assets. 2. Prepare the journal entry to record the purchase.
Answer and Explanation:
a. The allocation of the total cost among the three assets is given below:
(a) (b) (a × b)
Appraise value Total appraised Total cost of Apportioned
value cost
Percentage acquisition
Land $245,000 50% $342,225 $171,112.50
Land
improvements $73,500 15% $342,225 $51,333.75
Building $171,500 35% $342,225 $119,778.75
Total $490,000
b. The journal entry to record the purchase is given below:
Land $171,112.50
Land improvements $51,333.75
Building $119,778.75
To Cash $342,225
(To record the purchase)
Here the asset is debited as it rises the assets and cash is credited as it reduced the assets
Seasons Construction is constructing an office building under contract for Cannon Company and uses the percentage-of-completion method. The contract calls for progress billings and payments of $1,550,000 each quarter. The total contract price is $18,600,000 and Seasons estimates total costs of $17,750,000. Seasons estimates that the building will take 3 years to complete, and commences construction on January 2, 2018.At December 31, 2018, Seasons estimates that it is 30% complete with the construction, based on costs incurred. What is the total amount of Revenue and Profit from Long-Term Contracts recognized for 2018?
Answer:
The correct answer is "$5,580,000".
Explanation:
The given values are:
Total contract price,
= $18,600,000
Completion percentage,
= 30%
Seasons estimates,
= $17,750,000
Now,
In 2018,
The total amount of revenue will be:
= [tex]Total \ contract \ price\times Completion \ percentage[/tex]
On substituting the given values, we get
= [tex]18,600,000\times 30 \ percent[/tex]
= [tex]5,580,000[/tex] ($)
8. Effective Yield. A US investor obtain British pounds when the pound is worth $1.50 and invest in a one year-money market security that provides a yield of 5 percent (in pounds). At the end f one year, the investor converts the proceeds from investment to dollars at the prevailing spot rate of $1.52 per pound. Calculate the effective yield.
Answer:
6.4%
Explanation:
money invest = $1.50 or 1£
interest earned = 1£ x 5% = 0.05£
total returns = 1.05£
now we convert them back to dollars = 1.05£ x $1.52/£ = $1.596
effective yield = (total return - initial investment) / initial investment = ($1.596 - $1.50) / $1.50 = 6.4%
A foundry is developing a long-range strategic plan for buying scrap metal for its operations. The foundrycan buy scrap metal in unlimited quantity from two sources: Atlanta and Birmingham, and it receives thescrap daily by railroad cars.The scrap is melted down, and lead and copper are extracted. Each railroad car from Atlanta yields 1 ton ofcopper and 1 ton of lead, and costs $10,000. Each railroad car from Birmingham yields 1 ton of copper and2 tons of lead, and costs $15,000. The foundry needs at least 4 tons of lead and at least 2.5 tons of copperper day for the foreseeable future.1. In order to minimize the long-range scrap metal cost, how many raiload cars of scrap should bepurchased per day from each source
Answer:
The answer is below
Explanation:
Let x represent the number of railroad cars of scrap purchased per day from Atlanta and let y represent the number of railroad cars of scrap purchased per day from Birmingham.
Since Atlanta yields 1 ton of copper and 1 ton of lead while Birmingham yields 1 ton of copper and 2 tons of lead.
The foundry needs at least 2.5 tons of copper per day. Hence:
x + y ≥ 2.5 (1)
The foundry needs at least 4 tons of lead per day. Hence:
x + 2y ≥ 4 (2)
Plotting equations 1 and 2 using geogebra online graphing tool, we get the points that is the solution to the problem as:
(0, 2.5), (4, 0), (1, 1.5)
Car from Atlanta cost $10000 while car from Birmingham costs $15000. Therefore the cost equation is:
Cost = 10000x + 15000y
We are to find the minimum cost:
At (0, 2.5): Cost = 10000(0) + 15000(2.5) = $37500
At (4, 0): Cost = 10000(4) + 15000(0) = $40000
At (1, 1.5): Cost = 10000(1) + 15000(1.5) = $32500
The minimum cost is at (1, 1.5).
what is the major difference between corporations and other kinds businesses?
Answer:
A corporation is a separate entity apart from that of the owners. A corporation is not responsible for its debts if it fails. A corporation is much larger than other kinds of businesses.
Explanation:
A corporation has a separate legal entity apart from that of the owners and workers.
Chang and Smith Tours has the following balance sheets: 2018 2019 Assets Cash $209 $197 Accounts Receivable 684 726 Inventory 918 1,023 Net Fixed Assets 2,014 1,944 Total Assets $3,825 $3,890 Liabilities and Equity Accounts Payable $748 $818 Notes Payable 306 300 Long-Term Debt 1,647 1,724 Stockholders' Equity 1,118 1,048 Total Liabilities and Equity $3,819 $3,890 What is the amount of net working capital for 2019
Answer:
Chang and Smith Tours
The amount of net working capital for 2019 is:
$828.
Explanation:
a) Data and Calculations:
Chang and Smith Tours
Balance sheets: 2018 2019
Assets
Cash $209 $197
Accounts Receivable 684 726
Inventory 918 1,023
Net Fixed Assets 2,014 1,944
Total Assets $3,825 $3,890
Liabilities and Equity
Accounts Payable $748 $818
Notes Payable 306 300
Long-Term Debt 1,647 1,724
Stockholders' Equity 1,118 1,048
Total Liabilities and Equity $3,819 $3,890
Working capital:
Current assets:
Cash $209 $197
Accounts Receivable 684 726
Inventory 918 1,023
Less current liabilities
Accounts Payable $748 $818
Notes Payable 306 300
Net working capital $757 $828
b) The net working capital is the difference between current assets and current liabilities.
Sound Audio manufactures and sells audio equipment for automobiles. Engineers notified management in December 2018 of a circuit flaw in an amplifier that poses a potential fire hazard. An intense investigation indicated that a product recall is virtually certain, estimated to cost the company $7.5 million. The fiscal year ends on December 31. Required: 1. Should this loss contingency be accrued
Answer and Explanation:
According to the given situation, the contingent liability should be probable and estimated so the cost of the warranty i.e. loss contingency would be accrued and the same would be recorded and reported depend upon the predicted amounts
hence, the same would be considered and relevant too
What is the value of a building that is expected to generate fixed annual cash flows of $13,800 every year for a certain amount of time if the first annual cash flow is expected in 3 years from today and the last annual cash flow is expected in 8 years from today and the appropriate discount rate is 6.8 percent
Answer:
the present value is $58,026
Explanation:
The computation of the value of the building is shown below
Present value = Cash flows × Present value of discounting factor( interest rate%,time period)
= $13,800 ÷ 1.068^3 + $13,800 ÷ 1.068^4 + $13,800 ÷ 1.068^5 + $13,800 ÷ 1.068^6 + $13,800 ÷ 1.068^7 + $13,800 ÷ 1.068^8
= $58,026
Hence, the present value is $58,026
he balance sheet of Indian River Electronics Corporation as of December 31, 2020, included 13% bonds having a face amount of $92.0 million. The bonds had been issued in 2013 and had a remaining discount of $5.0 million at December 31, 2020. On January 1, 2021, Indian River Electronics called the bonds before their scheduled maturity at the call price of 103. Required:Prepare the journal entry by Indian River Electronics to record the redemption of the bonds at January 1, 2021.
Answer:
Dr Bonds Payable 92,000,000
Dr Loss on early existing 7,760,000
Cr Discount on Bonds Payable 5,000,000
Cr Cash 94,760,000
Explanation:
Preparation of the journal entry by Indian River Electronics to record the redemption of the bonds at January 1, 2021
Based on the information given the journal entry by Indian River Electronics to record the redemption of the bonds at January 1, 2021 will be :
Dr Bonds Payable 92,000,000
Dr Loss on early existing 7,760,000
Cr Discount on Bonds Payable 5,000,000
Cr Cash 94,760,000
(103%*92m)
Calculation for Loss on early existing
Loss on early existing=[(94,760,000 + 5,000,000)- 92,000,000]
Loss on early existing= 99,760,000- 92,000,000
Loss on early existing=7,760,000
Name and describe three ways that companies can benefit from being ethical.
The systems theory Multiple Choice emphasizes that an organization is one system in a series of subsystems. implements a piecerate system in which workers are paid additional wages when they exceed a standard level of output for each job. enforces a system that suggests that frontline supervisors should receive a bonus for each of their workers who completed their assigned daily tasks. develops a system to lower costs and increase worker productivity by showing how employees could work smarter, not harder. suggests that organizations are effective when they have the social system and the technical system to make products and services that are valued by customers.
Answer:
The systems theory:
emphasizes that an organization is one system in a series of subsystems.
Explanation:
A systems theory approach is a theoretical perspective that focuses on the interactions and relationships between parts of a whole. The theory helps to understand how an entity is organized, functions, and produces outcomes, which impact its growth. It also explains how rules and regulations are applied to govern an organization towards the achievement of its goals.
The systems theory is emphasizing that an organization is one system in a series of subsystems. Thus, option (a) is correct.
The systems theory of organization asserts that organizations are composed of many subsystems that are not necessarily related to one another but work together to form the whole.
The systems approach to management looks at a business as a series of systems and subsystems that interact with one another to create the overall organizational system.
In the systems approach to management, employees are more focused on achieving a collective goal for an organization rather than operational output.
Therefore, option (a) is correct
Learn more about on systems theory, here:
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Your question is incomplete, but most probably the full question was.
The systems theory:
Multiple Choice
A. Emphasizes that an organization is one system in a series of subsystems.
B. Implements a piece rate system in which workers are paid additional wages when they exceed a standard level of output for each job.
C. Enforces a system that suggests that frontline supervisors should receive a bonus for each of their workers who completed their assigned daily tasks.
D. Develops a system to lower costs and increase worker productivity by showing how employees could work smarter, not harder.
E. Suggests that organizations are effective when they have the social system and the technical system to make products and services that are valued by customers.
Caleb Co. owns a machine that had cost $44,400 with accumulated depreciation of $19,400. Caleb exchanges the machine for a newer model that has a market value of $55,000. 1. Record the exchange assuming Caleb paid $31,000 cash and the exchange has commercial substance. 2. Record the exchange assuming Caleb paid $23,000 cash and the exchange has commercial substance.
Answer:
Part 1
Debit :New Machine $55,000
Debit : Profit and Loss $39,400
Credit: Accumulated Depreciation: Old Machine $19,400
Credit :Cost: Old Machine $44,400
Credit : Cash $31,000
Part 2
Debit :New Machine $55,000
Debit : Profit and Loss $31,400
Credit: Accumulated Depreciation: Old Machine $19,400
Credit :Cost: Old Machine $44,400
Credit : Cash $23,000
Explanation:
The Standard on Property, Plant and Equipment States that :
"When exchange has commercial substance, Cost Price of item Acquired is measured at Fair Value.
When Fair Values of both assets acquired and given up can be determined reliably, the Fair Value of Asset given up will be used.
Unless the Fair Value of the Asset acquired is more evident, that Value may be used"
From this, we have on Fair Value of Asset Acquired, so we use that as the Cost of the New Asset. Cost of New Asset in Both Cases will be $55,000.
Recognize the New Cost of Asset, Derecognize the Cash Paid, Derecognize Cost of Old Asset and Accumulated Depreciation in a journal to find the Profit or loss resulting from the exchange as above.
Presented below is the income statement of Cowan, Inc.: Sales revenue $380,000 Cost of goods sold 225,000 Gross profit $155,000 Operating expenses 95,000 Income before income taxes 60,000 Income taxes 24,000 Net income $36,000 In addition, the following information related to net changes in working capital is presented: Debit Credit Cash $12,000 Accounts receivable 25,000 Inventories $19,400 Salaries payable (operating expenses) 8,000 Accounts payable 14,000 Income taxes payable 3,000 The company also indicates that depreciation expense for the year was $16,700 and that the deferred tax liability account increased $2,600. Instructions Prepare a schedule computing the net cash flow from operating activities that would be shown on a statement of cash flows: (a) using the indirect method. (b) using the direct method.
Answer:
NET CASH FLOW FROM OPERATING ACTIVITY INDIRECT METHOD
Cowan Inc.
Statement of cash flow (partial)
Indirect Method
Cash Flows from Operating Activities:
NET INCOME $36,000
Adjustment of non cash expenditure:
Depreciation $16,700
Operating profit before working capital changes $52,0700
ADJUSTMENTS FOR WORKING CAPITAL CHANGES:
INCREASE IN ACCOUNT RECEIVABLE ($25,000)
DECREASE IN INVENTORY $19,400
INCREASE IN ACCOUNT PAYABLE $14,000
DECREASE IN SALARY PAYABLE ($8,000)
DECREASE IN INCOME TAX PAYABLE ($3,000)
INCREASE IN DEFERRED TAX LIABILITY $2,600
NET CASH FROM OPERATING ACTIVITY $52,700
Way Cool produces two different models of air conditioners. The company produces the mechanical systems in its components department. The mechanical systems are combined with the housing assembly in its finishing department. The activities, costs, and drivers associated with these two manufacturing processes and the production support process follow. Process Activity Overhead Cost Driver Quantity Components Changeover $ 627,450 Number of batches 890 Machining 379,155 Machine hours 8,050 Setups 108,000 Number of setups 60 $ 1,114,605 Finishing Welding $ 220,580 Welding hours 4,100 Inspecting 254,200 Number of inspections 820 Rework 47,200 Rework orders 160 $ 521,980 Support Purchasing $ 158,600 Purchase orders 488 Providing space 30,900 Number of units 8,400 Providing utilities 126,180 Number of units 8,400 $ 315,680 Additional production information concerning its two product lines follows. Model 145 Model 212 Units produced 2,800 5,600 Welding hours 800 3,300 Batches 445 445 Number of inspections 510 310 Machine hours 2,750 5,300 Setups 30 30 Rework orders 90 70 Purchase orders 325 163 Required: 1. Using ABC, compute the overhead cost per unit for each product line. 2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $200 for Model 145 and $112 for Model 212. 3. If the market price for Model 145 is $515.95 and the market price for Model 212 is $303.34, determine the profit or loss per unit for each model.
Answer:
Way Cool
1. Overhead Cost per unit for each product line:
Model 145 Model 212
Overhead cost per unit $434.97 $457.59
2. Total cost per unit for each product line:
Model 145 Model 212
Total cost per unit $634.97 $569.59
3. The profit or loss per unit for each model:
Model 145 Model 212
Market price 515.95 303.34
Loss per unit $119.02 $266.25
Explanation:
a) Data and Calculations:
Process Activity Overheads Driver Quantity Components O/H rates
Changeover $ 627,450 Number of batches 890 $705
Machining 379,155 Machine hours 8,050 $47.10
Setups 108,000 Number of setups 60 $1,800
Total $ 1,114,605
Finishing
Welding $ 220,580 Welding hours 4,100 $538
Inspecting 254,200 Number of inspections 820 $310
Rework 47,200 Rework orders 160 $295
Total $ 521,980
Support Purchasing $ 158,600 Purchase orders 488 $325
Providing space 30,900 Number of units 8,400 $3.68
Providing utilities 126,180 Number of units 8,400 $15.02
Total $ 315,680
Additional production information concerning its two product lines follows.
Model 145 Model 212
Units produced 2,800 5,600
Welding hours 800 3,300
Batches 445 445
Number of inspections 510 310
Machine hours 2,750 5,300
Setups 30 30
Rework orders 90 70
Purchase orders 325 163
Model 145 Model 212
Units produced 2,800 5,600
Welding hours $430,400 (800*$538) $1,775,400 (3,300 * $538)
Batches 313,725 (445*$705) 313,725 (445*$705)
Number of inspections 158,100 (510*$310) 96,100 (310*$310)
Machine hours 129,525 (2,750*$47.10) 249,630 (5,300*$47.10)
Setups 54,000 (30*$1,800) 54,000 (30*$1,800)
Rework orders 26,550 (90*$295) 20,650 (70*$295)
Purchase orders 105,625 (325*$325) 52,975 (163*$325)
Total overhead costs $1,217,925 $2,562,480
Units produced 2,800 5,600
Overhead cost per unit $434.97 $457.59
Direct labor and materials 200.00 112.00
Total cost per unit $634.97 $569.59
Market price 515.95 303.34
Loss per unit $119.02 $266.25
A key feature of business is that it facilitates an exchange of
Answer:
type ''value''
Explanation:
i took the test
Bunker makes two types of briefcase, fabric and leather. The company is currently using a traditional costing system with labor hours as the cost driver but is considering switching to an activity-based costing system. In preparation for the possible switch, Bunker has identified two activity cost pools: materials handling and setup. Pertinent data follow: Fabric Case Leather Case Number of labor hours 15,000 9,000 Number of material moves 440 660 Number of setups 40 80 Total estimated overhead costs are $150,000, of which $110,000 is assigned to the materials handling cost pool and $40,000 is assigned to the setup cost pool.
Answer:
$93,750
Explanation:
Required: "Calculate the overhead assigned to the fabric case using the traditional costing system based on direct labor hours."
Total estimated overhead costs (A) = 150,000
Total labor hours (B) = 15,000 + 9,000 = 24,000
Overhead allocation rate (C) = A/B = 150,000/24,000
Overhead allocation rate (C) = $6.25 Per labor hour
Total labor hours used by Fabric case (D) = 15,000 Hours
Overhead assigned to the fabric case (C*D) = $6.25 Per labor hour * 15,000 Hours = $93,750
On January 1, year 2, Connor Corporation signed a $100,000 noninterest-bearing note due in three years at a discount rate of 10%. Connor elects to use the fair value option for reporting its financial liabilities. On December 31, year 2, Connor's credit rating and risk factors indicated that the rate of interest applicable to its borrowings was 9%. The present value factors at 10% and 9% are presented below.
PV factor .751 10%, 3 periods
PV factor .826 10%, 2 periods
PV factor .909 10%, 1 periods
PV factor .772 9%, 3 periods
PV factor .842 9%, 2 periods
PV factor .917 9%, 1 periods
At what amount should Connor present the note on the December 31, year 2 balance sheet?
Answer:
the amount that should present the note in year 2 is $84,200
Explanation:
The computation of the amount that should present the note in year 2 is shown below:
= Amount of non-interest bearing note × present value factor for 2 years at 9%
= $100,000 × 0.842
= $84,200
hence, the amount that should present the note in year 2 is $84,200
A company has3process options with the following costs:Process OptionsABCfixed cost ($)1,200,000220,000580,000variable cost/unit ($)31371)Find the range of forecasted volumes where process Cis optimal.2)The Point of Indifference between Process A and Process Boccurs at a total costof $________.3)The company has chosen process Aand expects to operate at a lossuntil 30,000 units have been sold.What is the price for each unit s
Answer: See explanation
Explanation:
a. First and foremost, we have to get the total cost equations which will be:
Total cost (A) = 1200000 + 3Q
Total Cost (B) = 220000 + 13Q
Total Cost (C) = 580000 + 7Q
To get the range of forecasted volumes where process C is optimal, we have to get the cross-over point between A, B and C which goes thus:
Between A and C will be:
= (1200000 - 580000)/(7 - 3)
= 620000/4
= 155,000
Between B and C will be:
= (220000 - 580000)/(7 - 13)
= 360,000 / 6
= 60,000
Therefore, the range of the forecasted volumes where process C is optimal will be [60000, 155000]
(b) The point of indifference between A and B will be the difference in their fixed cost divided by the difference in their variable cost which will be:
= (1200000 - 220000)/(13 - 3)
= 980,000 / 10
= 98,000
(c) The price for each unit will be:
30,000 = 1200,000 / (Selling price - 3)
Selling price - 3 = 1200,000 / 30,000
Selling price - 3 = 40
Selling price = 40 + 3
Selling price = $43
Use a piece of scrap paper to prepare a cost of Goods Manufactured from the following numbers: Beginning Direct Raw Materials -$69,000 Direct Raw Materials Purchases-$92,000. Direct Raw Materials Ending Inventory- $8000 Direct Labor-$25,000. Factory Overhead $37,000. Beginning work in process inventory $22,000. Ending Work in process Inventory $23,500 What are the total manufacturing costs for this statement
Answer:
the total manufacturing cost is $215,000
Explanation:
The computation of the total manufacturing cost is shown below:
= Direct material used + direct labor cost + manufacturing overhead cost
= $69,000 + $92,000 - $8,000 + $25,000 + $37,000
= $215,000
Hence, the total manufacturing cost is $215,000
We simply applied the above formula
A company purchased a new delivery van at a cost of $46,000 on July 1. The delivery van is estimated to have a useful life of 4 years and a salvage value of $3,400. The company uses the straight-line method of depreciation. How much depreciation expense will be recorded for the van during the first year ended December 31?
Answer:
The amount of depreciation expense that will be recorded for the van during the first year ended December 31 is $5,325.
Explanation:
Since the company uses the straight-line method of depreciation, the annual depreciation expenses can first be calculated using the following formula:
Annual depreciation expense = (Cost of the asset - Salvage value) / Useful life ............ (1)
Where;
Cost of the asset = $46,000
Salvage value = $3,400
Useful life = 4
Substituting the values into equation (1), we have:
Annual depreciation expense = ($46,000 - $3,400) / 4
Annual depreciation expense = $10,650
Since July 1 to December 31 is just half of the year, the amount of depreciation expense that will be recorded for the van during the first year ended December 31 is the halve of the annual depreciation expense that can be calculated as follows:
Depreciation expense to be recorded = Annual depreciation expense / 2 = $10,650 / 2 = $5,325
In March, Stinson Company completes Jobs 10 and 11. Job 10 cost $20,000 and Job 11 $30,000. On March 31, Job 10 is sold to the customer for $35,000 in cash.Journalize the entries for the completion of the two jobs and the sale of Job 10.Date Account Titles and Explanation Debit CreditMar. 31 31 31
Answer:
Mar. 31
Dr Finished goods inventory $50,000
(20,000+30,00)
Cr Work in process inventory $50,000
31 Dr Cash $35,000
Cr Sales revenue $35,000
31 Dr Cost of goods sold $30,000
Cr Finished goods inventory $30,000
Explanation:
Preparation of the journal entries for the completion of the two jobs and the sale of Job 10
Mar. 31
Dr Finished goods inventory $50,000
(20,000+30,00)
Cr Work in process inventory $50,000
(Being To record the completion of the two jobs)
31 Dr Cash $35,000
Cr Sales revenue $35,000
(Being To record the sale job 10)
31 Dr Cost of goods sold $30,000
Cr Finished goods inventory $30,000
(Being To record the cost of the job sold)
There are a number of statistics computed to measure the price level, such as the GDP deflator and the CPI. The choice of which of these measures to use depends in many cases on the specific question in which you are interested. For each of the following situations, state whether the CPI or GDP deflator is a more appropriate measure to use and explain why the statistic is preferred.
Question Completion:
a. You are interested in looking at the impact of higher prices of imported oil in the overall cost of living.
b. The government is interested in whether increases in defense spending are affecting the price level.
c. An economic consulting firm is investigating the impact on the aggregate price level of more computers and electronic technology used in production.
Answer:
The GDP Deflator and the CPI
a. The CPI is used here, as its measure is not restricted to domestically produced goods and services.
b. The GDP Deflator is more appropriate here. Defense spending is not related to consumer goods and services but to government spending, which is a component of the GDP.
c. The GDP Deflator is more appropriate with this investigation. Computers and electronic technology used in production relate to business Investments, which are a component of the GDP and are not part of consumer goods and services or a component of the CPI.
Explanation:
The GDP deflator is exclusively used to measure the prices of all goods and services produced domestically in an economy and is based on the nominal or real GDP. On the other hand, the CPI (Consumer Price Index) is used to measure the weighted average prices of a basket of consumer goods and services, whether produced domestically or imported.
Industry boundaries and the strengths of Porter's 5 forces are not static and thus they change over time. For instance, Airbnb has completely changed the boundaries of the lodging industry and has seriously decreased the bargaining power of suppliers whereas it has tremendously increased the bargaining power of buyers. What are some other examples of industries that have evolved over time
Answer:
The explanation of the statement is summarized mostly in the explanation section following.
Explanation:
However one illustration could be seen throughout the FMCG as well as Grocery industry, everyone is always selling internet based as well as home transportation has been one of the primary targets on either the basis of these observations. Amazon, Goffers, and so on are attempting to sell through that whole platform. The DVD as well as the Amusement business sector has indeed been actively engaged in such a radical change throughout cloud-based as well as mobile phone saturation. Because of the influence of technological advances, we could even conclude that certain changes have taken place. Throughout based on competitive strength, that would be the direct consequence of rivalry between the world's top corporations. Everybody is endeavoring to destabilize new technology.Then again the market price has indeed been increased significantly, so organizations are attempting to represent individuals with a reasonable profit.
one could use the investment opportunity curve and the indifference curve to calculate optimal consumption and investment.
True or False?
The new CFO thinks that inventories are excessive and could be lowered sufficiently to cause the current ratio to equal the industry average, 2.85, without affecting either sales or net income. Assuming that inventories are sold off and not replaced to get the current ratio to the target level, and that the funds generated are used to buy back common stock at book value, by how much would the ROE change
Answer:
4.50%
Explanation:
Note: Question is incomplete but very similar one is attached as picture below
Current ROE = Net Income / Equity = $21,000 / $280,000 = 7.50%
Current Inventory = $210,000
Target Current ratio = 2.70
1. Current assets at target Current ratio = Current Liabilities * Target current ratio = $70000 * 2.70 = $189,000
2. Reduction in Inventories = Present Current assets - Current assets under target current ratio
Reduction in Inventories = $14000 + $70000 + $210000 - $189000
Reduction in Inventories = $105000
3. Reduction on common equity using sale of inventory = Current Equity - reduction
Reduction on common equity using sale of inventory = $280,000 - $105,000
Reduction on common equity using sale of inventory = $175,000
4. Change in ROE = New ROE - Current ROE
Change in ROE = [21000 / 175000] - 7.50%
Change in ROE = 12% - 7.50%
Change in ROE = 4.50%