Answer:
Since Store managers say they need same-day information on the company's advertising plans, store managers can email me directly for this information.
Explanation:
The situation at Swazzi is precarious since they are not selling the new line of sweater vests well enough to match their sales forecast.
Store managers who are interacting with the consumers at their different outlets will definitely try to find a way to drive sales, hence their request for same day advertising plans from the company.
Mitigating this short fall calls for escalating and responding to requests from the company and the store managers hence the need for a very fast and cost effective communication medium.
For swift communication between the company and store managers, it is okay for store managers to email their request directly and vice versa.
Store managers should not email you directly with this information as a chain of communication has been created to create reliable and manageable communication through district leaders.
Therefore, the ideal alternative is that the communication must be carried out in accordance with the strategy established for the company.
In this case, sending an email to the leader would be ineffective, as it is the district leaders who have the necessary information and data about sales follow-up and strategies to maximize sales.
Therefore, it will be through clear and effective communication and guidance provided by district leaders that store managers will improve the sales process.
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You manage a pension fund that promises to pay out $10 million to its contributors in five years. You buy $7472582 worth of par-value bonds that make annual coupon payments of 6% and mature in five years. Right after you make the purchase, the interest rate on same-risk bonds decreases to 4.5%. If the rate does not change again and you reinvest the coupon payments that you receive in same-risk bonds, how much will you fall short of the money that you promised
Answer :
Shortfall of money = $74,598
Explanation :
As per the data given in the question,
Par value of bond = $7,472,582
To determine the future value of annual coupon payments received, we will use FV of annuity's formula
FV of Annuity = P [(1 + r)^n- 1 ÷ r]
where,
P = Periodic payment
r = interest rate
n = Time period
here P = 6% of $7,472,582 = $448,354.92
r = 4.50%
n = 5 years
FV of Annuity = $448,354.92 × [(1 + 4.50%)^5 - 1) ÷ 4.50%]
=$2,452,820
Shortfall at the end of 5 years is
= $10,000,000 - $7,472,582 - $2,452,820
= $74,598
On March 1, the board of directors declared a cash dividend of $0.75 per common share to shareholders of record on March 10, payable March 31. There were 131,000 shares issued and outstanding on March 1 and no additional shares had been issued during the month. Record the entries for March 1, 10, and 31. The cash dividends account is used.
Answer and Explanation:
The Journal Entry is shown below:-
Mar-01
Cash dividends Dr, $98,250
(131,000 × $0.75)
To Dividends payable Dr, $98,250
(Being declaration of dividends is recorded)
Mar-10
No entry required
Mar-31
Dividends payable Dr, $98,250
To Cash $98,250
(To record payment of dividends)
Indicate which financial statements must be included in the comprehensive annual financial report (CAFR) in each set of fund statements or government-wide statements.
Financial statement Governmental funds Proprietary funds Fiduciary funds Government-wide
1. Balance sheet
2. Statement of activities
3. Statement of cash flows
4. Statement of changes in fiduciary net position
5. Statement of fiduciary net position
6. Statement of net position
7. Statement of revenues, expenditures, and changes in fund balances
8. Statement of revenues, expenses, and changes in fund net position
Answer:
Explanation:
1. Management Discussion and Analysis (MD&A)
2. Basic Financial Statements
3. Note to Financial Statements
4. Required Supplementary Information (RSI)
5. Combining Statements for Non-major Fund & Non-major Components
6. Individual Fund statements and Schedules for Primary Government Funds
Willetta Company purchases inventory for $22,000 with terms 2/10, n/30. It then returns $3,200 of the inventory purchased to the supplier and also receives an allowance for defective inventory of $220. The company pays the amount due within the discount period. What is the amount of the discount that will be taken? (Round your answer to the nearest dollar amount.)
a. $320
b. $436
c. $372
Answer:
c. $372
Explanation:
Terms of sale 2/10, n/30 means there is a discount of 2% is available on payment of due amount within discount period of 10 days after sale with net credit period of 30 days.
As per given data
Purchases = $22,000
Sales return = $3,200
Defective Allowance = $220
Receivable = $22,000 - $3,200 - $220 = $18,580
As the payment is made within discount period, so discount will be availed on the amount due
Discount = $18,580 x 2% = $372
he Gilbert Department Store uses the conventional retail inventory method. The following information is available for the month of August 2021: Cost Retail Beginning Inventory 30,000 45,000 Cost of Goods Available for Sale $150,000 $180,000 Net Markups 25,000 Net Markdowns 10,000 Sales 170,000 What was the inventory using the conventional method as of August 31, 2021
Answer:
$52,500
Explanation:
As per given data
Cost Retail
Beginning Inventory $30,000 $45,000
Cost of Goods Available for Sale $150,000 $180,000
Net Markups $25,000
Net Markdowns $10,000
Sales $170,000
As we do not have the ending inventory value, First we need to calculate it. We will make the selling price of all the available inventory at retail value then deducting the actual sales we will have the retail value of available stock. By applying the cost to retail ratio we can calculate the value of ending Inventory.
Cost Retail
Beginning Inventory $30,000 $45,000
Cost of Goods Available for Sale $150,000 $180,000
Total Goods Available for sale $180,000 $225,000
+ Net Markups $25,000
- Net Markdowns $10,000
Sales price of Goods $180,000 $240,000
- Sales $170,000
Ending Inventory at retail $70,000
Now calculate the cost to retail ratio to determine the ending value of inventory at conventional inventory method.
Cost to retail ratio = ( Sale price of goods at cost / Sale price of goods at retail ) x 100 = ( $180,000 / $240,000) x 100 = 75%
Value of Ending inventory at conventional method = $70,000 x 75% = $52,500
Shirt Company is considering adding a new product line, a cloth shopping bag with custom screen printing that will be sold to grocery stores. If the current market price of cloth shopping bags is $2.25 and the company desires a net profit of 60%, what is the target cost? The company estimates the full product cost of the cloth bags will be $ 0.80. Should the company manufacture the cloth bags? Why or why not?
Answer:
Instructions are below.
Explanation:
Giving the following information:
The current market price of cloth shopping bags is $2.25
Target profit= 60%
First, we need to calculate the cost per unit to reach the target cost.
Target cost= selling price*(1-targert profit)
Target cost= 2.25*0.4= $0.9
Now, if $0.8 is the unitary total cost:
Cost= (0.8*100)/2.25= 35.5%
Profit= 100 - 35.5= 64.5%
The company should manufacture the product because it reaches the target profit per unit.
On March 1, 2022, Blossom Company acquired real estate, on which it planned to construct a small office building, by paying $86,000 in cash. An old warehouse on the property was demolished at a cost of $9,400; the salvaged materials were sold for $1,940. Additional expenditures before construction began included $1,440 attorney’s fee for work concerning the land purchase, $5,100 real estate broker’s fee, $8,940 architect’s fee, and $15,200 to put in driveways and a parking lot.
Required:
(a) Determine the amount to be reported as the cost of the land.
Answer:
Cost of The Land = $86,000 + $9,400 - $1,940 + $1,440 + $5,100
= $100,000
Therefore, Cost of The Land is $100,000.
Explanation:
cost of constructing the building = $86,000
cost of demolishing old warehouse = $9,400
cost of salvaged materials = $1,440
Additional expenditures:
Attorney's fee = $5,100
Architects's fee = $8,940
Driveways and parking lot fee = $15,200
Answer:
Cost of The Land = $86,000 + $9,400 - $1,940 + $1,440 + $5,100
= $100,000
$100,000.
Explanation:
cost of constructing the building = $86,000
cost of demolishing old warehouse = $9,400
cost of salvaged materials = $1,440
Additional expenditures:
Attorney's fee = $5,100
Architects's fee = $8,940
Driveways and parking lot fee = $15,200
The income statement and the cash flows from the operating activities section of the statement of cash flows are provided below for Syntric Company. The merchandise inventory account balance neither increased nor decreased during the reporting period. Syntric had no liability for insurance, deferred income taxes, or interest at any time during the period. SYNTRIC COMPANY Income Statement For the Year Ended December 31, 2021 ($ in thousands) Sales $ 292.3 Cost of goods sold (177.6 ) Gross margin 114.7 Salaries expense $ 29.0 Insurance expense 18.7 Depreciation expense 11.5 Depletion expense 5.4 Interest expense 12.3 (76.9 ) Gains and losses: Gain on sale of equipment 17.5 Loss on sale of land (7.3 ) Income before tax 48.0 Income tax expense (24.0 ) Net income $ 24.0 Cash Flows from Operating Activities: Cash received from customers $ 228.0 Cash paid to suppliers (165.0 ) Cash paid to employees (24.0 ) Cash paid for interest (10.4 ) Cash paid for insurance (14.3 ) Cash paid for income tax (12.4 ) Net cash flows from operating activities $ 1.9 Required: Prepare a schedule to reconcile net income to net cash flows from operating activities. (Enter your answers in thousands rounded to 1 decimal place (i.e., 5,500 should be entered as 5.5). Amounts to be deducted should be indicated with a minus sign.)
Answer and Explanation:
The preparation of the schedule to reconcile the net income to net cash flow from operating activities is presented below:
Cash from operating activities
Net income $24
Adjustment to reconcile
Add: Depreciation expense $11.5
Add: Depletion expense $5.4
Less: Gain on sale of Equipment -$17.5
Add: Loss on sale of land $7.3
Less: increase in account receivable ($292.30 - $228) -$64.30
Add: increase in accounts payable ($177.60 - $165) $12.6
Add: increase in salaries payable ($29 - $24) $5
Add: decrease In prepaid insurance ($18.7 - $14.3) $4.4
Add: Decrease in bond discount ($12.3 - $10.4) $1.9
Add: increase in income tax payable ($24 - $12.4) $11.60
net cash flow from operating activities $4.20
The cash outflow represents in a negative sign while the cash inflow represents in a positive sign
On January 1, Year 1, the Mahoney Company borrowed $164,000 cash from Sun Bank by issuing a five-year 8% term note. The principal and interest are repaid by making annual payments beginning on December 31, Year 1. The annual payment on the loan based on the present value of annuity factor would be $40,625. The amount of principal repayment included in the December 31, Year 1 payment is:
Answer:
Principal payment = $27,505.00
Explanation:
Loan Amortization: A loan repayment method structured such that a series of equal periodic installments will be paid for certain number of periods to offset both the loan principal amount and the accrued interest.
The principal repayment in year 1 = Annual payment - Interest payment in year 1
Interest payment in year = Interest rate × Principal Amount
=8% × 164,000
= $13,120.00
Principal payment = $40,635 - 13,120 = $27,505.00
Principal payment = $27,505.00
1) The Herfindahl index Suppose that three firms make up the entire tire manufacturing industry. One has a 50% market share, and the other two have a 25% market share each.
The Herfindahl index of this industry is _________.
2) Tread Tough, one of the firms with a 25% market share in the tire manufacturing industry, leaves the market.
This would cause the Herfindahl index for the industry to _________.
3) The largest possible value of the Herfindahl index is 10,000 because:
a) An index of 10,000 corresponds to 100 firms with a 1% market share each.
b) An industry with an index higher than 10,000 is automatically regulated by the Justice Department.
c) An index of 10,000 corresponds to a monopoly firm with a 100% market share.
Answer:
0.375 = 37% = 3700
Increases
c) An index of 10000 corresponds to a monopoly firm with 100% market share
Explanation:
The HHI index is found by summimg the square of the concentration ratios of firms
(0.5) ^2 + (0.25)^2 + (0.25)^2 = 0.25 + 0.0625 + 0.0625 = 0.375 = 37% = 3700
If a firm leaves the industry, the hhi index increases because the market power would exist between only two firms.
If HHI is equal to 10,000, it means that the firm is a monopoly. It means the firm has 100% of the market share.
I hope my answer helps you
A customer owns 1,000 shares of XYZZ stock, purchased at $40 per share. The stock is now at $45, and the customer has become neutral on the stock, but believes that the stock still has good long term growth potential. The client asks her representative for a "conservative recommendation" that will give her a positive portfolio return. The client should be told to:
Answer:
The answer is "Sell 10 XYZZ 45 Call-Terms"
Explanation:
The purchaser bought the product at $40, and it is now selling at $45. The purchaser now is on product-neutral but feels it's a strong investment throughout the longterm. The product will now not be sold Unless the client offers calls against both the stock price (put option writer), the investor can generate additional profit revenue in the investment strategy.
It also a balanced approach on the profits, that is the danger here is that the product will also be called off when the product rises quickly and the purchaser will not receive the overhead profit when the product decreases, the consumer pays on both the product, offset by both the prices we pay. Loading puts will also generate high cash. If instead, the product grows, its calls expire and the product is also owned by the purchaser, but when the stock goes down, its limited sales will be executed, requiring the people to purchase the product. So, the purchaser will end up losing twice as quickly in a down market! That's not a "conservative" strategy.On December 31st, Datton, Inc. has cost of goods sold of $ 550000, ending inventory is $ 101000, beginning inventory is $ 120000; and average accounts payable is $ 105000. What is the accounts payable turnover expressed as days? (Round any intermediary calculations to two decimal places, and round your final answer to the nearest day.) A. 72 B. 44 C. 117 D. 67
Answer:
72 days
Explanation:
The computation of the accounts payable turnover ratio is shown below:
Accounts payable turnover ratio = Total Purchases ÷ Average Accounts payable
As we know that
Cost of goods sold = Beginning inventory + total purchases - Ending inventory
i.e
Total Purchases = Cost of goods sold + Ending Inventory – Beginning Inventory
= $550,000 + $101,000 - $120,000
= $531,000
So, the account payable turnover ratio is
= $531,000 ÷ $105,000
= 5.06 times
Now in days it is
= 365 days ÷ 5.06 times
= 72 days
The master budget of Windy Co. shows that the planned activity level for next year is expected to be 50,000 machine hours. At this level of activity, the following manufacturing overhead costs are expected:
Indirect labor Machine supplies Indirect materials Depreciation on factory building Total manufacturing overhead
$720,000 180,000 210,000 150,000 $1,260,000
A flexible budget for a level of activity of 60,000 machine hours would show total manufacturing overhead costs of:_______
a. $1,482,000.b. $1,260,000.c. $1,512,000.d. $1,362,000.
Answer:
a. $1,482,000
Explanation:
The computation of the total manufacturing overhead cost is shown below;
But before that first we need to do following calculations
The Variable overhead for 50000 machine hours is
= $1,260,000 - $150,000
= $1,110,000
As depreciation is not variable cost so it would be excluded
Now for 60,000 machine hours, the variable overhead is
= ($1,110,000 ÷ 50,000) × 60,000
= $1,332,000
And, the fixed overhead is $150,000 i.e depreciation expense
So, the total manufacturing overhead cost is
= Fixed manufacturing overhead + variable manufacturing overhead
= $150,000 + $1,332,000
= $1,482,000
As sales manager, Joe Batista was given the following static budget report for selling expenses in the Clothing Department of Soria Company for the month of October.
SORIA COMPANY
Clothing Department
Budget Report
For the Month Ended October 31, 2020
Difference
Budget
Actual
Favorable
Unfavorable
Neither Favorable
nor Unfavorable
Sales in units
7,900
11,000
3,100
Favorable
Variable expenses
Sales commissions
$2,054
$2,860
$806
Unfavorable
Advertising expense
869
770
99
Favorable
Travel expense
3,476
4,950
1,474
Unfavorable
Free samples given out
1,659
1,210
449
Favorable
Total variable
8,058
9,790
1,732
Unfavorable
Fixed expenses
Rent
1,900
1,900
–0–
Neither Favorable nor Unfavorable
Sales salaries
1,100
1,100
–0–
Neither Favorable nor Unfavorable
Office salaries
800
800
–0–
Neither Favorable nor Unfavorable
Depreciation—autos (sales staff)
600
600
–0–
Neither Favorable nor Unfavorable
Total fixed
4,400
4,400
–0–
Neither Favorable nor Unfavorable
Total expenses
$12,458
$14,190
$1,732
Unfavorable
As a result of this budget report, Joe was called into the president’s office and congratulated on his fine sales performance. He was reprimanded, however, for allowing his costs to get out of control. Joe knew something was wrong with the performance report that he had been given. However, he was not sure what to do, and comes to you for advice.
Prepare a budget report based on flexible budget data to help Joe. (List variable costs before fixed costs.)
Answer:
SORIA COMPANY
Clothing Department's Flexible Budgeted Report:
The report is attached herein.
The variable costs were flexed using 11,000 units sales volume instead of the budgeted 7,900 units as follows.
Workings:
1. Sales Commission = $2,054/7,900 x 11,000 = $2,860
2. Advertising = $869/7,900 x 11,000 = $770
3. Travel Expense = $3,476/7,900 x 11,000 = $4,840
4. Free Samples = $1,659/7,900 x 11,000 = $2,310
The idea is to compute the flexed amounts using unit budgeted cost (e.g. Travel Expense $3,476/7,900) to multiply the flexed volume (11,000).
The fixed costs were not similarly flexed. They are assumed to have completely displayed their nature as fixed irrespective of the level of activity or the sales volume.
Explanation:
A flexible budget is one that changes in volume according to the level of activity. It is not static. This means that the budgeted units change to the level of the actual units. This flexing affects all variable costs based on the now flexed volume while the fixed costs remain since they do not vary according to the level of activity. For example, Sales Commission could be budgeted at $400 under 10,000 volume. If the actual sales volume is 12,000, the Sales Commission has to be flexed to $480 ($400/10,000 x 12,000) to reflect the actual volume performance. Then the flexed budgeted cost is compared to the actual cost to obtain the variance or difference. Actual performance can then be compared based on like terms and not based on unlike terms.
This is the advantage of flexible budgets. They allow a manager's performance to be evaluated based on variable volumes of activity instead of static volumes.
Answer:wow cool ♂️
Explanation:
The following information pertains to Guy’s Gear Company: Sales $ 80,000 Expenses: Cost of Goods Sold $ 50,000 Depreciation Expense 6,000 Salaries and Wages Expense 12,000 68,000 Net Income $ 12,000 Accounts Receivable Decrease $ 4,000 Inventory Increase 8,000 Salaries and Wages Payable Increase 750 Required: Present the operating activities section of the statement of cash flows for Guy’s Gear Company using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)
Answer and Explanation:
The Presentation of the operating activities section of the statement of cash flows is shown below:-
Guy’s Gear Company
Statement of cash flow using the indirect method
Cash flows from operating activities:
Net income $12,000
Adjustments of net income
with cash provided by operating activities:
Depreciation expense $6,000
Changes in current assets
and current liabilities
Decrease in accounts receivable $4,000
Increase in inventories -$8,000
Increase in salaries and
wages payable $750 -$3,250
Net Cash provided by operating activities $14,750
Therefore to reach the net cash provided by operating activities we simply add net income depreciation expenses and deduct the decrease in accounts receivable, increase in inventories and wages payable.
. Problems and Applications Q7 Consider a monopolistically competitive market with N firms. Each firm's business opportunities are described by the following equations: Demand: Q=100N−P Marginal Revenue: MR=100N−2Q Total Cost: TC=50+Q2 Marginal Cost: MC=2Q As N rises, the demand for each firm's product . How many units does each firm produce? 400N 25N 25 25N What price does each firm charge? 125N 75N 75N 100N How much profit does each firm make? 50+625N2 1,875N2 2,500N2−50 1,250N2−50 In the long run, firms will exist in this market.
Answer :
a.As N rises, the demand for each firm’s product will falls as a result of this each firm’s demand curve will shift left.
b.Q = 25/N
c.75/N
d.1250/N2 – 50
e.N = 5
Explanation:
a.As N rises, the demand for each firm’s product will falls as a result of this each firm’s demand curve will shift left.
b.The firm will produce where MR = MC:
100/N – 2Q
= 2Q
Q = 25/N
c.25/N
= 100/N – PP
= 75/N
d.Total revenue
= P + Q = 75/N +25/N = 1875/N2
Total cost = 50 + Q2 = 50 + (25/N)2
= 50 + 625/N2
Profit = 1875/N2 – 625/N2 – 50
= 1250/N2 – 50
e.In the long run, profit will be zero. T
Therefore:
1250/N2 – 50 = 0
1250/N2
= 50
N = 5
The answers of the various sub-parts are:
a. As N rises, the demand for each firm’s product will fall as a result of this each firm’s demand curve will shift left.
b. Q = 25/N
c. 75/N
d. 1250/N2 – 50
e. N = 5
The calculations of the various sub-parts:
a. As N increases, demand for each company's customers declines, leading each firm's demand curve to switch sides.
b.The firm will produce where MR = MC:
[tex]\frac{100}{N}[/tex]– 2Q = 2Q
Q = [tex]\frac{25}{N}[/tex]
c.[tex]\frac{25}{N}[/tex] = [tex]\frac{100}{N}[/tex] – PP =[tex]\frac{75}{N}[/tex]
d.Total revenue = P + Q = [tex]\frac{75}{N}[/tex] +[tex]\frac{25}{N}[/tex] =[tex]\frac{1875}{N2}[/tex]
Total cost = 50 + Q2 = 50 +[tex]\frac{25}{N} \times 2[/tex] = 50 +[tex]\frac{625}{N2}[/tex]
Profit = [tex]\frac{1875}{N2}[/tex] –[tex]\frac{625}{N2}[/tex] – 50 = [tex]\frac{1250}{N2}[/tex] – 50
e.In the long run, profit will be zero.
Therefore:
[tex]\frac{1250}{N2}[/tex] – 50 = 0
[tex]\frac{1250}{N2}[/tex] = 50
N = 5
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A physical count of Ayayai Company’s inventory at year-end determined that inventory on hand had a value of $1,628,000. Upon further investigation, it was determined that this amount included the following: An inventory purchase of $51,900 made by Ayayai shipped from Sandhill Company on December 28 with terms FOB destination, but not due to be received until January 3. Goods shipped to a customer with a cost of $74,700 with terms FOB destination on December 29, but not expected to reach their destination until January 3. Goods shipped to a customer with a cost of $55,500 with terms FOB shipping point on December 30, but not expected to reach their destination until January 5. Goods held on consignment from Florence Company with a cost $16,300. Compute the amount that should be reported for inventory on Ayayai Company’s balance sheet at December 31, 2022.
Answer:
The amount that should be reported for inventory on Ayayai Company’s balance sheet at December 31, 2022 is $1,504,800
Explanation:
In order to calculate the amount that should be reported for inventory on Ayayai Company’s balance sheet at December 31, 2022 we would have to make the following calculation:
amount that should be reported for inventory on Ayayai Company’s balance sheet at December 31, 2022= Inventory as per physical count -inventory purchase-goods shipped-goods held on consignment
amount that should be reported for inventory on Ayayai Company’s balance sheet at December 31, 2022= $1,628,000-$51,900-$55,500$-$16,300
amount that should be reported for inventory on Ayayai Company’s balance sheet at December 31, 2022=$1,504,800
Red Melon has preferred stock that pays a dividend of $5.00 per share and sells for $100 per share. It is considering issuing new shares of preferred stock. These new shares incur an underwriting (or flotation) cost of 1.70%. How much will Red Melon pay to the underwriter on a per-share basis
Answer:
$1.7 per Share
Explanation:
According to the scenario, computation of the given data are as follows:
Dividend paid = $5 per share
Selling price = $100 per share
Underwriting cost = 1.7%
We can calculate the amount pay to the underwriter by using following formula:-
Red Melon Pay to the Underwriter = Selling Price Per Share × Underwriter Cost
= $100 × 1.70%
= $1.7 per Share
Culver Company has five employees participating in its defined benefit pension plan. Expected years of future service for these employees at the beginning of 2020 are as follows. Employee Future Years of Service Jim 3 Paul 4 Nancy 5 Dave 6 Kathy 6 On January 1, 2020, the company amended its pension plan, increasing its projected benefit obligation by $86,400. Compute the amount of prior service cost amortization for the years 2020 through 2025 using the years-of-service method, setting up appropriate schedules. Year Annual Amortization 2020 $enter a dollar amount 2021 enter a dollar amount 2022 enter a dollar amount 2023 enter a dollar amount 2024 enter a dollar amount 2025 enter a dollar amount
Answer: Please see below for answer
Explanation:
Employee Future Years of Service
Jim 3
Paul 4
Nancy 5
Dave 6
Kathy 6
Total years of service = 24
increase in projected benefit obligation = $86,400
Cost per year = $86,400/ 24 =$3,600
Year 2020, jim =1 paul=1, nancy=1 dave=1 Kath=1
total years=5
cost per year= $3,600
amortization for Year 2020 5x3600= $18,000
Year 2021, jim =1 paul=1, nancy=1 dave=1 Kath=1
total years=5
cost per year= $3,600
amortization for Year 2021 5x3600= $18,000
Year 2022, jim =1 paul=1, nancy=1 dave=1 Kath=1
total years=5
cost per year= $3,600
amortization for Year 2022= 5x3600= $18,000
Year 2023, jim =0 paul=1, nancy=1 dave=1 Kath=1
total years=4
cost per year= $3,600
amortization for Year 2023 =4x3600= $14,400
Year 2024, jim =0paul=0, nancy=1 dave=1 Kath=1
total years=3
cost per year= $3,600
amortization for Year 2024= 3x3600= $10,800
Year 2025, jim =0paul=0, nancy=0 dave=1 Kath=1
total years=2
cost per year= $3,600
amortization for Year 2025= 2x3600= $7,200
Fortune Company's direct materials budget shows the following cost of materials to be purchased for the coming three months: January February March Material purchases $12,040 14,150 10,970 Payments for purchases are expected to be made 50% in the month of purchase and 50% in the month following purchase. The December Accounts Payable balance is $6,500. The expected January 30 Accounts Payable balance is: Group of answer choices $6,500. $7,075. $12,040. $6,020 $9,270.
Answer:
c) 6020
Explanation:
January purchase is 12040
50 % of this purchase will be due on January 30 as remaining 50 % will be paid in January itself
so amount due will be = 12040 x 50 %
= 6020
Barry's Hobbies produces and sells a luxury animal pillow for $80.00 per unit. In this month of operation, 3,000 units were produced (2,800 were budgeted) and 2,750 units were sold. Barry’s uses FIFO and per-unit costs for beginning inventory are available below. Actual fixed costs are the same as the amount budgeted for the month. The allocation base for overhead is units. There is no inventory of direct materials or work in process. Other information for the month includes:
Variable manufacturing costs $38 per unit
Variable marketing costs $ 2 per unit
Fixed manufacturing costs $60,000 per month
Administrative expenses, all fixed $12,000 per month
Ending inventories:
Direct materials -0-
WIP -0-
Finished goods 750 units
What is operating income when using absorption costing?
Answer:
Net operating income= 43,000
Explanation:
Giving the following information:
Selling price= $80
Production= 3,000 units
Sales= 2,750 units
Variable manufacturing costs $38 per unit
Variable marketing costs $ 2 per unit
Fixed manufacturing costs $60,000 per month
Administrative expenses, all fixed $12,000 per month
Ending inventories:
Finished goods 750 units
Under the absorption costing method, the cost of goods sold includes the fixed manufacturing overhead. We need to calculate the unitary fixed overhead:
Fixed unitary overhead= 60,000/3,000= $20 per unit
Income statement:
Sales= 2,750*80= 220,000
COGS= 2,750*(38 + 20)= (159,500)
Gross profit= 60,500
Variable marketing= 2,750*2= (5,500)
Administrative expenses= (12,000)
Net operating income= 43,000
The operating income using absorption costing for Barry's Hobbies is [tex]\( {\$63,500} \)[/tex].
To calculate operating income using absorption costing, we need to account for both fixed and variable manufacturing costs that are absorbed into the cost of goods sold (COGS).
Step-by-Step Calculation:
1. Calculate Total Variable Costs:
- Variable manufacturing costs per unit: [tex]\( \$38 \)[/tex]
- Variable marketing costs per unit: [tex]\( \$2 \)[/tex]
- Total variable cost per unit: [tex]\( \$38 + \$2 = \$40 \)[/tex]
- Total variable manufacturing costs for 2,750 units sold:
[tex]\[ 2,750 \times \$38 = \$104,500 \][/tex]
- Total variable marketing costs for 2,750 units sold:
[tex]\[ 2,750 \times \$2 = \$5,500 \][/tex]
- Total variable costs:
[tex]\[ \$104,500 + \$5,500 = \$110,000 \][/tex]
2. Calculate Fixed Manufacturing and Administrative Costs:
- Fixed manufacturing costs (budgeted and actual): [tex]\( \$60,000 \)[/tex]
- Fixed administrative costs: [tex]\( \$12,000 \)[/tex]
- Total fixed costs:
[tex]\[ \$60,000 + \$12,000 = \$72,000 \][/tex]
3. Calculate Total Manufacturing Costs (absorption costing):
- Total variable manufacturing costs: [tex]\( \$104,500 \)[/tex]
- Total fixed manufacturing costs: [tex]\( \$60,000 \)[/tex]
- Total manufacturing costs:
[tex]\[ \$104,500 + \$60,000 = \$164,500 \][/tex]
4. Calculate Cost of Goods Sold (COGS):
- COGS includes variable and fixed manufacturing costs absorbed:
[tex]\[ \text{COGS} = \text{Variable manufacturing costs} + \text{Fixed manufacturing costs} \][/tex]
[tex]\[ \text{COGS} = \$104,500 + \$60,000 = \$164,500 \][/tex]
5. Calculate Operating Income (Profit) using Absorption Costing:
- Sales revenue (3,000 units produced and $80 per unit):
[tex]\[ 3,000 \times \$80 = \$240,000 \][/tex]
- Calculate Gross Profit:
[tex]\[ \text{Sales} - \text{COGS} = \$240,000 - \$164,500 = \$75,500 \][/tex]
- Subtract fixed administrative expenses:
[tex]\[ \$75,500 - \$12,000 = \$63,500 \][/tex]
WP Corporation produces products X, Y, and Z from a single raw material input in a joint production process. Budgeted data for the next month is as follows: Product X Product Y Product Z Units produced 1,600 2,100 3,100 Per unit sales value at split-off $ 14.00 $ 19.00 $ 16.00 Added processing costs per unit $ 5.00 $ 7.00 $ 7.00 Per unit sales value if processed further $ 20.00 $ 20.00 $ 25.00 The cost of the joint raw material input is $69,000. Which of the products should be processed beyond the split-off point? Product X Product Y Product Z A) yes yes no B) yes no yes C) no yes no D) no yes yes
Answer:
B) yes no yes
Explanation:
The preparation is shown below:
Particulars Product X Product Y Product Z
Units produced 1,600 2,100 3,100
Sales Value at split off per unit $14 $19 $16
Total Sales Value at split off (a) $22,400 $39,900 $49,600
Units produced 1,600 2,100 3,100 (X)
Sales Value per unit $20 $20 $25
Additional Processing cost per unit $5 $7 $7
Net Realizable Value = Sales value - Further costs $15 $13 $18 (y)
Total Realizable Value if processed further (b) $24,000 $27,300 $55,800 (x × Y)
Difference = b- a $1,600 -$12,600 $6,200
Processed further Yes No Yes
As the product X and product Z contains positive number so it should be processed and Product Y should not be processed as it contains negative number
Aqua Primavera, Inc. has provided the following information for the year. Units produced 6 comma 000 units Sales price $ 200 per unit Direct materials $ 30 per unit Direct labor $ 45 per unit Variable manufacturing overhead $ 20 per unit Fixed manufacturing overhead $ 470 comma 000 per year Variable selling and administration costs $ 70 per unit Fixed selling and administration costs $ 270 comma 000 per year What is the unit product cost using variable costing?
Answer:
Unit product cost= $95
Explanation:
Giving the following information:
Direct materials $30 per unit
Direct labor $45 per unit
Variable manufacturing overhead $20 per unit
Under the variable costing method, the unit product cost is calculated using the direct material, direct labor, and variable manufacturing overhead:
Unit product cost= 30 + 45 + 20= $95
Using the allowance method of accounting for uncollectible receivables. April 1 Sold merchandise on account to Jim Dobbs, $6,900. The cost of the merchandise is $2,760. June 10 Received payment for one-third of the receivable from Jim Dobbs and wrote off the remainder. Oct. 11 Reinstated the account of Jim Dobbs and received cash in full payment. Required: Journalize the above transactions. Refer to the Chart of Accounts for exact wording of account titles. Round your answers to nearest dollar amount.
Answer and Explanation:
As per the data given in the question,
Apr-01 Accounts receivable A/c Dr. $6,900
To Sales A/c $6,900
Apr-01 Cost of goods sold A/C Dr. $2,760
To Inventory A/c $2,760
( Being cost of goods on merchandise is recorded)
Jun-10 Allowance for doubtful debt A/c Dr. $ 4,600
Cash A/c Dr. $2,300
To Accounts receivable A/c $6,900
( Being bad debt expense is recorded)
Oct-11 Accounts receivable A/c Dr. $4,600
To Allowance for doubtful debt A/c $4,600
( Being bad debt recovered is recorded)
Oct-11 Cash Dr. $4,600
To Accounts receivable A/c $4,600
( Being cash recovered from bad debt is recorded)
Phillip Morris USA is concerned about its declining consumer base. Every year more Americans quit smoking cigarettes and fewer and fewer are taking up the habit. They are considering buying a smokeless tobacco company and a cigar manufacturing company so that they are not entirely dependent on cigarette smokers for revenue. Furthermore, there is a slight increase in the number of people using smokeless tobacco products. If Phillip Morris does decide to acquire these companies, what type of corporate level business strategy will they be engaging in? 1. Cost-leadership 2. Focused differentiation 3. Related diversification 4. Vertical integration 5. Competitive tactics
Answer:
2. Focused differentiation
Explanation:
The business strategy of focused differentiation consists in increasing the amount of business sectors that a company operates.
In this example, Phillip Morris is using focused differentiation because it is adding 2 new business sectors to its operation, with the goal of increasing revenue. The first expansion is in the smokeless tobacco sector, and the second expansion is in the cigar manufacturing sector.
In other words, Phillip morris is trying to make smokeless tobacco products, and cigar products, focusing its differentiation strategy on the sectors it believes will produce the greatest amount of revenue.
Often, through government-supported programs, students may obtain "bargain" interest rates such as 6% or 8% to attend college. Frequently, payments are not due and interest does not accumulate until the student stops attending college. A student has borrowed $42 comma 000 at an annual interest rate of 6.4%. Calculate the amount of interest due 6 months after the student must begin payments.
Final answer:
The interest due 6 months after starting payments on a $42,000 loan at an annual rate of 6.4% is $1,344, based on simple interest calculations.
Explanation:
The student has borrowed $42,000 at an annual interest rate of 6.4%. To calculate the amount of interest due 6 months after the student must begin payments, we must assume that the interest is simple interest (although many student loans actually use compound interest). The formula for simple interest is I = PRT, where I is the interest, P is the principal amount, R is the rate of interest per year, and T is the time in years. In this case:
P = $42,000R = 6.4% annual interest rate, which is 0.064 when expressed as a decimalT = 6 months, which is 0.5 yearsTo calculate the interest, multiply these figures:
I = $42,000 × 0.064 × 0.5 = $1,344
Therefore, the amount of interest due 6 months after the student begins payments is $1,344.
Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return that she is earning. For example, three years ago she paid $13,000 for 200 shares of Malti Company’s common stock. She received a $420 cash dividend on the stock at the end of each year for three years. At the end of three years, she sold the stock for $16,000. Kathy would like to earn a return of at least 14% on all of her investments. She is not sure whether the Malti Company stock provide a 14% return and would like some help with the necessary computations.
Answer:
(A) The net present value is -$1,225. (B) Kathy Myers did not earn 14% return on investment.
Explanation:
Solution
(A) Calculate the net present value as shown below:
Now 1 2 3
Purchase of stock = ($13,000)
Annual Cash Divided $420 $420 $420
the Sale of Stock $16,000
Total cash Flow ($13,000) $420 $420 $420
Discount Factor at 14% 1.000 0.877 0.769 0.675
The present value ($13,000) $368 $323 $11,083
Net present value
($368 +$323 + $11,083- 13,000 = ($1,225)
The net present value is -$1,225.
(b) The NPV is negative. It shows that the rate of return on income is lower than the minimum required rate of return. so, KM did not earn 14% return.
Zippy Company has a product that it currently sells in the market for $60 per unit. Zippy has developed a new feature that, if added to the existing product, will allow Zippy to receive a price of $75 per unit. The total cost of adding this new feature is $38,000 and Zippy expects to sell 2,400 units in the coming year. What is the net effect on next-year's operating income of adding the feature to the product?
Answer:
Effect on income= $2,000 increase
Explanation:
Giving the following information:
Previous selling price= $60
New selling price= $75
Increase in fixed costs= $38,000
Units sold= 2,400
We weren't provided with information regarding unitary variable costs. We need to determine the effect on income based on the selling price difference:
Effect on income= 2,400*(75-60) - 38,000
Effect on income= $2,000 increase
You have just completed a $20,000 feasibility study for a new coffee shop in some retail space you own. You bought the space two years ago for $100,000, but if you sold it today, you would net $115,000 after taxes. Outfitting the space for a coffee shop would require a capital expenditure of $30,000 plus an initial investment of $5,000 in inventory. What is the initial incremental cash flow for opening the coffee shop today? Answer a negative number if the cash flow is a cost.
Answer:
$150,000
Explanation:
Data provided
Expected after tax cash flows from sale of space = $115,000
Increase in working capital = $5,000
Outfitting expenses = $30,000
The calculation of initial incremental cash flow is shown below:-
Initial incremental cash flow = Expected after tax cash flows from sale of space + Increase in working capital + Outfitting expenses
= $115,000 + $5,000 + $30,000
= $150,000
So, for calculating the initial incremental cash flow we simply applied the above formula.
The initial incremental cash flow for opening the coffee shop today would be $60,000, calculated by subtracting the total costs ($55,000) from the potential revenue from selling the property ($115,000).
Explanation:The initial incremental cash flow for opening the coffee shop today can be calculated by adding up the explicit costs and the potential revenue from selling the property. The explicit costs, in this case, include the cost of the feasibility study ($20,000), the capital expenditure to outfit the retail space ($30,000), and the initial inventory investment ($5,000). These add up to a total cost of $55,000. As for potential revenue, if the property were sold today, it would net $115,000. Therefore, the initial incremental cash flow would be the potential revenue ($115,000) minus the total costs ($55,000), which equals <$strong>60,000.
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A company purchased land for $92,000 cash. Commissions of $13,000, property taxes of $13,500, and title insurance of $4,200 were also incurred. The $13,500 in property taxes includes $7,400 in back taxes paid by the company on behalf of the seller and $6,100 due for the current year after the purchase date. For what amount should the company record the land? a. $112,400. b. $116,600. c. $122,700. d. $92,000.
Answer:
The answer is option (b) $116,600.00
Explanation:
Solution
The Cash price =$92,000.00
Commission on purchase of land $ = 13,000.00
Property taxes =$7,400.00
Title insurance is=$ 4,200.00
Total cost of land to be recorded is =$116,600.00
The property taxes paid for back date will be added to the land cost but not $6100 which is related to present year.
The property taxes $6100 will be filled to income statement in present year.
Title insurance and commission will be included to cost of land.
Final answer:
The company should record the land at $116,600, which includes the purchase price, commissions, title insurance, and back taxes paid.
Explanation:
When recording the purchase of land on the company's books, all expenditures that are necessary to get the land ready for use should be included in the land's cost. The correct value of the land should include the cash paid for the land itself, commissions, property taxes (which are part of the land acquisition costs), and title insurance. Current property taxes should not be included as they are an expense related to the period after purchase.
The initial purchase price of the land is $92,000. Commissions were $13,000, and title insurance was $4,200. Of the property taxes paid, only the back taxes of $7,400 are considered part of the acquisition cost because they relate to the period before the acquisition. Therefore, the company should record the land at $92,000 + $13,000 + $4,200 + $7,400 = $116,600.