Answer:
The correct option for the first question is A,the bondholder is paid $50
The correct option for the second question is C,the stock's capital gains yield is negative
Explanation:
The company has to pay the $50 owed to bondholder as payment of coupon payment takes precedence over payment of dividends.
It would be inappropriate to keep the $50 in retained earnings since there is a covenant in the agreement signed with bondholders that their coupon payment annually is mandatory.
The correct answer to the second question is that the stock's capital gains yield is negative.
Capital gains yield =the price now(which is lower)-original price/original price
Since the numerator would give a negative figure,overall yield is negative
The main cause of downsizing, refocusing, and outsourcing during the latter part of the 20th century was: Group of answer choices (a) Developments in IT—especially the advent of the internet (b) A more turbulent business environment Both (a) and (b) Neither (a) nor (b)
Answer: Both (a) and (b)
Explanation:
Developments in IT—especially the advent of the internet
The latter 20th century saw many technological changes as the world evolved in IT. Markets that were not previously accessible became more accessible and many new products were created and flourished. The internet brought markets and people together and there was an immense opportunity for growth and success. This forced companies to adapt to the new environment because failure to take advantage on the new opportunities that IT offered could spell doom. Companies responded by downsizing to take advantage of better production technologies that required less people, they refocused their strategies to enable higher productivity and with IT making the world so interconnected, they were able to outsource production to cheaper places knowing that they could maintain regular contact with such place. These are but a few reasons why.
A more turbulent business environment.
The latter 20th century also saw a wave of turbulence in the business world. With a rise in nationalistic feelings and conflict that made acquiring raw materials harder such as the oil crises of the '70s and the 80s. This as well as the presence of more companies which led to increased competition forced some companies to engage in actions necessary for survival. They had to downsize, refocus and sometimes outsource to remain profitable.
Mills Corporation acquired as a long-term investment $240 million of 5% bonds, dated July 1, on July 1, 2021. Company management has the positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 3% for bonds of similar risk and maturity. Mills paid $280.0 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2021, was $270.0 million.
Required:
a. Prepare the journal entry to record Mills' investment in the bonds on July 1, 2021 and interest on December 31, 2021, at the effective (market) rate.
b. At what amount will Mills report its investment in the December 31, 2021, balance sheet?
c. Suppose Moody's bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on January 2, 2022, for $290 million. Prepare the journal entry to record the sale.
Answer:
a. Prepare the journal entry to record Mills' investment in the bonds on July 1, 2021 and interest on December 31, 2021, at the effective (market) rate.
July 1, 2021
Dr Investment in bonds 240,000,000
Dr Premium on investment in bonds 40,000,000
Cr Cash 280,000,000
December 31, 2021
Dr Cash 12,000,000
Cr Interest revenue 8,400,000
Cr Premium on investment in bonds 3,600,000
b. At what amount will Mills report its investment in the December 31, 2021, balance sheet?
Investment in bonds $240,000,000
Premium on investment in bonds $36,400,000
c. Suppose Moody's bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on January 2, 2022, for $290 million. Prepare the journal entry to record the sale.
January 2, 2022
Dr Cash 290,000,000
Cr Investment in bonds 240,000,000
Cr Premium on investment in bonds 36,400,000
Cr Gain on sale of investments 13,600,000
Explanation:
effective interest rate on first coupon received = ($240,000,000 x 5%) - ($280,000,000 x 3%) = $12,000,000 - $8,400,000 = $3,600,000
Premium on investment in bonds = $40,000,000 - $3,600,000 = $36,400,000
Segment Contribution Margin Analysis The operating revenues of the three largest business segments for Time Warner, Inc., for a recent year follow. Each segment includes a number of businesses, examples of which are indicated in parentheses. Time Warner, Inc. Segment Revenues (in millions) Turner (cable networks and digital media) $75,100 Home Box Office (pay television) 43,200 Warner Bros. (films, television, and videos) 44,500 Assume that the variable costs as a percent of sales for each segment are as follows: Turner 27% Home Box Office 16% Warner Bros. 25% a. Determine the contribution margin and contribution margin ratio for each segment from the information given. When required, round to the nearest whole millionth (for example, round 5,688.7 to 5,689). Round contribution margin ratio to whole percents for each segment from the information given. Turner Home Box Office Warner Bros. Revenues $ $ $ Variable costs Contribution margin $ $ $ Contribution margin ratio (as a percent) % % % b. Does your answer to (a) mean that the other segments are more profitable businesses
Answer:
Time Warner, Inc.
a) Contribution Margin and Contribution Margin Ratio for each segment:
Turner Home Box Office Warner Bros.
Revenues $75,100 $43,200 $44,500
Variable costs 20,277 6,912 11,125 Contribution margin $54,823 $36,288 $33,375
Contribution margin ratio
(as a percent of Revenue) 73% 84% 75%
b) The answer in (a) does not mean that the two other segments are more profitable than Turner. The Contribution Margin Ratio is not enough to decide the profitability of each segment. It only shows the percentage of revenue that is left after deducting the variable costs. To determine profitability, fixed costs will be deducted from the contribution margin. Fixed costs refer to the periodic costs associated with running the different segments.
Explanation:
Segment Contribution Margin Analysis helps management to review the contributions made by each segment to the entity. It shows the difference between segmental revenues and segmental variable costs.
The four conditions (mutual exclusion, hold and wait, no preemption and circular wait) are necessary for a resource deadlock to occur. Give an example to show that these conditions are not sufficient for a resource deadlock to occur. When are these conditions sufficient for a resource deadlock to occur
Explanation:
The conditions sufficient for a resource deadlock to occur is when a deadlock will prevail for process A, B, and C when two resources R and S; if only one instance of each resources is allowed.
Solution
Deadlock conditions
A deadlock is a situation where two or more processes request for same critical resource at the same time.
The mutual exclusion applies a restriction to a resource when the resource is used by any process, it should become unavailable for the other resources
The hold and wait allocations explains that any process which is allocate resources must hold them; till all needed resources are nor sure.
In the meantime, if any other processes need a resource which is held by another process, then the latter will release the resource to prevent deadlock.
No pre-emption states that the operating system can grant access to resources to another process while it is in use by another process; depending on the priority , to prevent deadlock.
Circular wait should not be implemented so that resources being requested by process are allocated when they get free.
Now,
Three processes A, B, and C functions on a system, having two distinct resources R and S.
The resource R has one instant active while resource S has two instances available.
The instance of R is allocated to a process A after request. first instance of resource S is allocated to process B, and second instance of resource S is allocated to process C.
When a request is placed by process B for resource R, then the resource is not available for execution. the process A request for resource S which is used by both C and B.
All the four conditions prevail in this situation; yet deadlock does not occur.
The resource S is released by process C and is allocated to process A. when process A finishes, it releases resources and resources R is allocate d to process B.
Hence all three processes end without a deadlock.
However, the deadlock will prevail for process A, B, and C when two resources R and S; if only one instance of each resources is allowed.
Entries for Stock Dividends Senior Life Co. is an HMO for businesses in the Portland area. The following account balances appear on the balance sheet of Senior Life Co.: Common stock (250,000 shares authorized; 6,000 shares issued), $75 par, $450,000; Paid-In Capital in excess of par— common stock, $48,000; and Retained earnings, $4,500,000. The board of directors declared a 2% stock dividend when the market price of the stock was $95 a share. Senior Life Co. reported no income or loss for the current year. If an amount box does not require an entry, leave it_______.A1. Journalize the entry to record the dedaration of the dividend, capitalizing an amount equal to market value. Stock Dividends 10,440 Stock Dividends Distributable 7,500 Paid In Capital in Excess of Par Common Stock 3,120 A2. Journalize the entry to record the issuance of the stock certificates. ) Stock Dividends 7,500 Common Stock 7,500.B. Determine the following amounts before the stock dividend was dedared: (1) total paid-in capital, (2) total and retained earning (3) total stockholders' equity. Total paid-in capital 828,000Total retained earnings 6,000,000 Total stockholders' equity 6,828,000C. Determine the following amounts after the stock dividend was dedlared and closing entries were recorded at the end of the year:Total paid-in capitalTotal retained earningsTotal stockholders' equity
Answer:
common stock = 6,000 at $75 par = $450,000
additional paid in capital = $48,000
retained earnings = $4,500,000
market price per stock $95
since the stock dividend is 2% (= 6,000 x 2% = , then we must use the market price to calculate it:
A1. Journalize the entry to record the declaration of the dividend, capitalizing an amount equal to market value.
Dr Retained earnings 11,400
Cr Common stock dividend distributable 9,000
Cr Additional paid in capital 2,400
A2. Journalize the entry to record the issuance of the stock certificates.
Dr Common stock dividend distributable 9,000
Cr Common stock 9,000
B. Determine the following amounts before the stock dividend was declared:
(1) total paid-in capital = $48,000
(2) total retained earning = $4,500,000
(3) total stockholders' equity = $4,998,000
C. Determine the following amounts after the stock dividend was declared and closing entries were recorded at the end of the year:
(1) total paid-in capital = $50,400
(2) total retained earning = $4,488,600
(3) total stockholders' equity = $4,998,000
Commercial buildings and industrial facilities account for a major share of a company's environmental impact. Identify one business that has implemented green building standards and describe the advantages they have gained from their efforts.
Answer:
The advantages and achievement of the Solidia technologies is listed below:
Explanation:
Solidia Technologies is the Jersey-based startup which has reduced its 70% Carbon dioxide emission and is among the top priorities of the constructors who opt to green cements and try their best to achieve their set social and environmental footprints. Furthermore, this company has also achieved many awards due to innovative technology with many additional investment donated by the government as a prize and in the form of loans to help the company expand their operations. They have successfully grown their business and are now expanding to different states due to their innovation that they provide.
Many large, packaged goods marketers like Procter & Gamble, Kraft, and Pillsbury have used the product manager (or brand manager) system of marketing organization and implementation. Which of the following is the key advantage of this system?
A. Product managers have relatively little authority
B. Product managers are short-term in their orientation
C. Product managers have direct responsibility for research and development of new products
D. Product managers can assume profit-and-loss responsibility for the performance of the product line
E. Product managers have line responsibility over sales managers
Answer:
C. Product managers have direct responsibility for research and development of new products
Explanation:
The position of Product manager is an all-encompassing role. He is tasked with the job of ensuring the members of the team are up and doing; he ensures each member of the team supplies considerable input to the end that the team effort can be evidently seen. The Product manager is also saddled with the responsibility of ensuring swift communication amidst all parties; he splits complex tasks into easily understandable processes. He sets the target and goal for each team member; he is the one who accesses and optimizes team members' performances.
Despite and inspite of these varying responsibilities, the biggest and most vital task of the Product manager is to research products, assess the market (customers), create services/products which are innovative and solve critical problems thereby, adding value to the customer base. The more information he has about the market and need of the customers, the better he is able to tailor the products and services rendered to address those needs. Overall, the Product manager due to his extensive involvement and oversight, he ensures that the chances of product failure is significantly reduced.
In the light of the explanation above, Option C. (Product managers have direct responsibility for research and development of new products) is the correct answer.
If Home Depot was correct in that it was not discriminating, but simply filling positions consistent with those who applied for them (and very few women were applying for customer service positions), given your reading of this chapter, was the firm guilty of discrimination? If so, under what theory?
Answer:
Yes and the theory is stereotyping
Explanation:
In a workplace women are subjected to gender stereotyping.
Stereotyping is when there is a wrong belief or idea about people based on they look on the outside.
Most times this is a wrong belief or partially true. It is a form of prejudice because how the person is on the outside is not a true definition of who they are.
In this scenario women are made to feel they were not on the same level as male counterparts during promotions, hiring, and payment.
This prejudice was explained by home Depot to be based on experience. They said most women had experience as cashiers so the could only fill roles like cashier, customer care, and clerk
Light-emitting diode (LED) light bulbs have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $.45 and lasts for 1,000 hours. A 7-watt LED, which provides the same light, costs $2.25 and lasts for 40,000 hours. A kilowatt-hour of electricity costs $.121, which is about the national average. A kilowatt-hour is 1,000 watts for 1 hour. However, electricity costs actually vary quite a bit depending on location and user type (you can get information on your rates from your local power company). An industrial user in West Virginia might pay $.04 per kilowatt-hour whereas a residential user in Hawaii might pay $.25. You require a 10 percent return and use a light fixture 500 hours per year. What is the break-even cost per kilowatt-hour?
Answer:
(A) For incandescent bulb, your break even cost is $32.67
(B) With LED bulb, your break even cost is $3.8115
Conclusion: It makes financial sense to use LED bulbs.
Explanation:
We start by checking the cost of your electricity bill when you use incandescent bulb and when you use LED bulb.
Since your answers are to be in kilowatt hour, we transform the watt measurement of the bulbs into kilowatt thus:
60watt incandescent bulb = 0.06kw
7watt led bulb = 0.007kw
National average cost of electricity per kilowatt hour is $1.21
Cost per kWh using incandescent bulb is 1.21 × 0.06 = $0.0726
Cost per kWh using led bulb is 1.21 × 0.007 = $0.00847
(A) WITH INCANDESCENT
0.06kw × 500hrs/year = 30kwhrs/year
Cost of electricity bill = 1.21 × 30 =$36.3
Your 10% return = $3.63
Break even cost per year, in kWh is = 36.3 - 3.63 = $32.67
(B) WITH LED
0.007kw × 500hrs/year = 3.5kwhrs/year
Cost of electricity bill = 1.21 × 3.5 = $4.235
Your 10% return = $0.4235
Break even cost per year in kWh is = 4.235 - 0.4235
(C) The incandescent bulb costs $0.45 but draws you a bill of $32.67 a year WHILE the led bulb costs $2.25 but draws you a bill of $3.8115
We conclude hence, that light-emitting diode bulbs make financial sense. Overlook the cost of purchasing the bulb because it uses less kilowatts per hour and draws you a very low bill, compared to the incandescent bulb!
Paul Sabin organized Sabin Electronics 10 years ago to produceand sell several electronic devices on which he had securedpatents. Although the company has been fairly profitable, it is nowexperiencing a severe cash shortage. For this reason, it isrequesting a $620,000 long-term loan from Gulfport State Bank,$160,000 of which will be used to bolster the Cash account and$460,000 of which will be used to modernize equipment. The company's financial statements for the two most recent years follow:
Sabin Electronics
Comparative Balance Sheet
This Year Last Year
Assets
Current assets:
Cash $ 118,000 $ 270,000
Marketable securities 0 30,000
Accounts receivable, net 633,000 420,000
Inventory 1,065,000 715,000
Prepaidexpenses 30,000 34,000
Total currentassets 1,846,000 1,469,000
Plant and equipment,net 1,969,200 1,490,000
Total assets $ 3,815,200 $ 2,959,000
Liabilitiesand Stockholders Equity
Liabilities:
Currentliabilities $ 820,000 $ 420,000
Bondspayable, 12% 850,000 850,000
Totalliabilities 1,670,000 1,270,000
Stockholders'equity:
Commonstock, $15 par 630,000 630,000
Retained earnings 1,515,200 1,059,000
Total stockholders equity 2,145,200 1,689,000
Total liabilitiesand equity $ 3,815,200 $ 2,959,000
Sabin Electronics
Comparative Income Statement and Reconciliation
This Year Last Year
Sales $ 5,600,000 $ 4,710,000
Cost of goodssold 3,995,000 3,570,000
Gross margin 1,605,000 1,140,000
Selling andadministrative expenses 677,000 572,000
Net operatingincome 928,000 568,000
Interestexpense 102,000 102,000
Net income beforetaxes 826,000 466,000
Income taxes(30%) 247,800 139,800
Net income 578,200 326,200
Commondividends 122,000 101,000
Net incomeretained 456,200 225,200
Beginning retainedearnings 1,059,000 833,800
Ending retainedearnings $ 1,515,200 $ 1,059,000
During the past year, the companyintroduced several new product lines and raised the selling priceson a number of old product lines in order to improve its profitmargin. The company also hired a new sales manager, who hasexpanded sales into several new territories. Sales terms are 2/10,n/30. All sales are on account.
e. The average sale period. (Theinventory at the beginning of last year totaled$620,000.)(Round your intermediate calculations and finalanswers to 1 decimal place. Use 365 days in a year.)
f. The operating cycle.(Round your intermediate calculations and final answer to 1decimal place.)
g. The total asset turnover. (The total assets at the beginning oflast year were $2,919,000.) (Round your answers to 2decimal places.)
h. The debt-to-equity ratio.(Round your answers to 3 decimal places.)
i. The times interest earned ratio.(Round your answers to 1 decimal place.)
j. The equity multiplier. (Thetotal stockholdersâ equity at the beginning of last year totaled$1,679,000.) (Round your answers to 2 decimalplaces.)
Answer:
e. The average sales period = (average balance inventory / COGS) x 365 days = {[($1,065,000 + $715,000)/2] / $3,995,000} x 365 days = 81.3 days
f. The operating cycle = average sales period + (average accounts receivable / total credit sales) x 365 days = 81.3 + {[($633,000 + $420,000)/2] / $5,600,000} x 365 days = 81.3 + 34.3 = 115.6 days
g. The total asset turnover = total sales / average assets = $5,600,000 / [($3,815,200 + $2,959,000)/2 = 1.66 times
h. The debt-to-equity ratio = total liabilities / total equity = $1,670,000 / $2,145,200 = 0.778 or 77.8%
i. The times interest earned ratio = EBIT / interest expense = $928,000 / $102,000 = 9.1
j. The equity multiplier = total assets / total equity = $3,815,200 / $2,145,200 = 1.78
Crede Company budgeted selling expenses of $30,300 in January, $34,500 in February, and $40,300 in March. Actual selling expenses were $31,300 in January, $34,190 in February, and $48,300 in March. The company considers any difference that is less than 5% of the budgeted amount to be immaterial. Prepare a selling expense report that compares budgeted and actual amounts by month and for the year to date.
Answer:
Crede Company Selling expense report
By Month
Month Budget Actual expenses Difference
January $30,300 $ 31,300 $1,000 U
February $34,500 $ 34,190 $310 F
March $40,300 $ 48,300 $8,000 U
Year to date
Budget Actual expenses Difference
$30,300 $31,300 $1,000 U
$64,800 $65,490 $690 U
$ 105,100 $113,790 $8,690 U
Joe operates a business that locates and purchases specialized assets for clients, among other activities. Joe uses the accrual method of accounting but he doesn’t keep any significant inventories of the specialized assets that he sells. Joe reported the following financial information for his business activities during year 0.
Determine the effect of each of the following transactions on the taxable business income. (Select "No Effect" from the dropdown if no change in the taxable business income.)
a. Joe has signed a contract to sell gadgets to the city. The contract provides that sales of gadgets are dependent upon a test sample of gadgets operating successfully. In December, Joe delivers $13,950 worth of gadgets to the city that will be tested in March. Joe purchased the gadgets especially for this contract and paid $9,750.
No effect? Amount of deduction? Amount of income ?
b. Joe paid $305 for entertaining a visiting out-of-town client. The client didn’t discuss business with Joe during this visit, but Joe wants to maintain good relations to encourage additional business next year.
No effect? Amount of deduction? Amount of income ?
c. On November 1, Joe paid $650 for premiums providing for $65,000 of "key man" insurance on the life of Joe’s accountant over the next 12 months.
No effect? Amount of deduction? Amount of income ?
d. At the end of year 0, Joe’s business reports $12,750 of accounts receivable. Based upon past experience, Joe believes that at least $2,750 of his new receivables will be uncollectible.
No effect? Amount of deduction? Amount of income ?
e. In December of year 0, Joe rented equipment to complete a large job. Joe paid $6,750 in December because the rental agency required a minimum rental of three months ($2,250 per month). Joe completed the job before year-end, but he returned the equipment at the end of the lease.
No effect? Amount of deduction? Amount of income ?
f. Joe hired a new sales representative as an employee and sent her to Dallas for a week to contact prospective out-of-state clients. Joe ended up reimbursing his employee $550 for airfare, $600 for lodging, $500 for meals, and $400 for entertainment (Joe provided adequate documentation to substantiate the business purpose for the meals and entertainment). Joe requires the employee to account for all expenditures in order to be reimbursed.
No effect? Amount of deduction? Amount of income ?
g. Joe uses his BMW (a personal auto) to travel to and from his residence to his factory. However, he switches to a business vehicle if he needs to travel after he reaches the factory. Last month, the business vehicle broke down and he was forced to use the BMW both to travel to and from the factory and to visit work sites. He drove 245 miles visiting work sites and 96 miles driving to and from the factory from his home. Joe uses the standard mileage rate to determine his auto-related business expenses. (Round your answer to whole number. Use standard mileage rate.)
No effect? Amount of deduction? Amount of income ?
h. Joe paid a visit to his parents in Dallas over the Christmas holidays. While he was in the city, Joe spent $175 to attend a half-day business symposium. Joe paid $450 for airfare, $150 for meals during the symposium, and $95 on cab fare to the symposium.
No effect? Amount of deduction? Amount of income ?
Answer: Please refer to Explanation
Explanation:
a. No Effect on Taxable Income.
First off Joe's income is only dependent on if the test is successful. Even if it were, the test would only be conducted in year 1 March not in year 0 which is the focus of this question. Taxes are only paid when cash is received.
b. No Effect on Taxable Income.
Had there been a business discussion, Joe would have been able to claim a 50% deduction in Tax. However since there was none, there is no effect on Tax.
c. No effect on Taxable Income
The insurance is not tax deductible.
d. $12,750 in taxable income.
Even Joe believes that $2,750 of income might not be collected, he cannot deduct this from taxes until it actually happens therefore his increase in income is $12,750.
e. $2,250 reduction in taxable income
The $6,750 was paid for 3 months. Joe uses Accrual accounting however meaning that expenses have to be recorded for the period they are incurred. $2,250 was incurred for December and so that is the amount that will be deducted as an expense for the year.
f. $1,600 reduction in Taxable income.
If the representative brings back receipts that are in order, Joe can be able to reimburse her for $1,600 in expenses. This includes $550 for airfare, $600 for lodging and for food and entertainment, the maximum he can claim as deductible in tax is 50% of each which means $250 for meals and $200 for entertainment. Adding all that up will give $1,600.
g. $139.15 reduction in Taxable income
Joe drove 96 miles to and fro the factory to his house. This is not tax deductible and considered personal. He however drove 245 miles visiting company sites. This is tax deductible.
The standard rate for 2020 according to the IRS is 57.5 cents per mile so 245 * 57.5 cents per mile will give $139.15.
h. $345 reduction in taxable income
Joe spent $175 to attend to symposium. He also paid $95 in taxi fare to get to the symposium. He ate meals worth $150 during the symposium not which 50% is deductible. 50% being $75. Adding all these together is,
= 175 + 95 + 75
= $345.
This is the taxable reduction.
The concept of --------, while not mentioned in the U.S. Constitution, is an important part of our legal system.
Answer:
judicial review,
Explanation:
research lol
Jacquie Inc. reports the following annual cost data for its single product.
Normal production and sales level 70,000 units
Sales price $ 57.00 per unit
Direct materials $ 10.00 per unit
Direct labor $ 7.50 per unit
Variable overhead $ 12.00 per unit
Fixed overhead $ 1,050,000 in total
Complete the below table using absorption costing. (Round cost per unit answers to 2 decimal place.)
Production volume
Cost of goods sold: 72000 units 104000 units
Cost of goods sold per unit
Number of units sold
Total cost of goods sold
Jacquie Inc.
Income statement through gross margin
Sales volume
72000 units 72000 units
If Jacquie increases its production to 104000 units, while sales remain at the current 72000 unit level, by how much would the company?
Answer:
Cost of goods sold:
72,000 units = $3,174,000104,000 units = $4,118,000Cost of goods sold per unit:
72,000 units = $44.08104,000 units = $39.60A comparative income statement showing the different production and sales levels:
70,000 units 72,000 units 104,000 units
Total sales $3,990,000 $4,104,000 $5,928,000
COGS ($3,115,000) ($3,174,000) ($4,118,000)
Gross profit $875,000 $930,000 $1,810,000
If Jacquie increases its production to 104000 units, while sales remain at the current 72000 unit level, by how much would the company?
Total sales $4,104,000
COGS ($2,851,200)
Gross profit $1,253,000
If the production level is 104,000 units, but only 72,000 are sold, net profits will increase by $323,000 (= $1,253,000 - $930,000). The remaining 32,000 units will be reported as ending inventory of finished goods.
Explanation:
normal production 72,000 units 104,000 units
direct materials $700,000 $720,000 $1,040,000
direct labor $525,000 $540,000 $780,000
variable overhead $840,000 $864,000 $1,248,000
fixed overhead $1,050,000 $1,050,000 $1,050,000
total $3,115,000 $3,174,000 $4,118,000
cost per unit $44.50 $44.08 $39.60
Juanita is deciding whether to buy a skirt that she wants, as well as where to buy it. Three stores carry the same skirt, but it is more convenient for Juanita to get to some stores than others. For example, she can go to her local store, located 15 minutes away from where she works, and pay a marked-up price of $103 for the skirt:
Determining opportunity cost Juanita is decidin
Store Travel Time Each Way Price of a Skirt
(Minutes) (Dollars per skirt)
Local Department Store 15 103
Across Town 30 89
Neighboring City 60 63
Juanita makes $16 an hour at work. She has to take time off work to purchase her skirt, so each hour away from work costs her $16 in lost income. Assume that returning to work takes Juanita the same amount of time as getting to a store and that it takes her 30 minutes to shop. As you answer the following questions, ignore the cost of gasoline and depreciation of her car when traveling.
Complete the following table by computing the opportunity cost of Juanita's time and the total cost of shopping at each location.
Store Opportunity Cost of Time Price of a Skirt Total Cost
(Dollars) (Dollars per skirt) (Dollars)
Local Department Store 103
Across Town 89
Neighboring City 63
Assume that Juanita takes opportunity costs and the price of the skirt into consideration when she shops. Juanita will minimize the cost of the skirt if she buys it from the:_________.
Answer:
Juanita should purchase the skirt at the store across town because the total economic cost will be lowest.
Explanation:
three options:
local store 15 minutes away and a price of $103across town 30 minutes away and a price of $89neighboring city 1 hour away and a price of $63Juanita makes $16 per hour at her work, and her purchase decision includes the opportunity cost of lost wages:
total economic cost:
local store = $103 + [1/4 hours x 2 (round trip) x $16] = $111across town = $89 + [1/2 hours x 2 (round trip) x $16] = $105neighboring city = $63 + [1 hour x 2 (round trip) x $16] = $95Juanita should purchase the skirt at the store across town because the total economic cost will be lowest ($105)
Opportunity costs are the benefits lost or extra costs incurred for choosing one activity or investment over another alternative. Economic costs include both accounting costs and opportunity costs.
"In July, one of the processing departments at Okamura Corporation had beginning work in process inventory of $13,000 and ending work in process inventory of $18,000. During the month, the cost of units transferred out from the department was $148,000. In the department's cost reconciliation report for July, the total cost to be accounted for under the weighted-average method would be:"
Answer:
The total cost to be accounted for under the weighted-average method is $166,000
Explanation:
Okamura Corporation Partial Manufacturing Account
Particulars Amount
Cost of ending work in process inventory $18,000
Add: Cost of units transferred out $148,000
Total cost accounted for $166,000
The total cost to be accounted for under the weighted-average method is $166,000
Suppose Rebecca needs a dog sitter so that she can travel to her sister’s wedding. Rebecca values dog sitting for the weekend at $200. Susan is willing to dog sit for Rebecca so long as she receives at least $175. Rebecca and Susan agree on a price of $185. Suppose the government imposes a tax of $30 on dog sitting. What is the deadweight loss of the tax?
Answer:
The deadweight loss of the tax is $25
Explanation:
In order to calculate the deadweight loss of the tax we would have to make the following calculation:
deadweight loss of the tax=maximum willingness to pay - minimum willingness to accept
maximum willingness to pay=$200
minimum willingness to accept =$175
deadweight loss of the tax=$200-$175
deadweight loss of the tax=$25
The deadweight loss of the tax is $25
Answer: $25
Explanation:
Given Data:
Rebecca value for dog sitting = $200
Susan’s minimum agreed price = $175
Rebecca and Susan agreed price = $185
Government tax on dog sitting = $30
Dead weight loss = Rebecca value - Susan list price
= $200 - $175
= $25
The dead weight loss of tax is $25
what do you do if your lender rejects your loan application
Answer:you tie a noose and hope for the best my friend. and if all goes south, you have a backup plan.
Explanation:
Due to the adoption of a just in time assembly line system, NWC is expected to decrease. Inventory is expected to decrease from $254600 to $143072 while accounts payable will also decrease by $26648. What is the cash flow impact for the change in net working capital to be included in the initial investment
Answer:
$84,880
Explanation:
Since there is a decrease in inventory from $254,600 to $143,072 i.e $111,528 and the account payable is also decreased by $26,648
So, there is an increase in cash flow due to the change in net working capital of
= Decrease in inventory - decrease in account payable
= $111,528 - $26,648
= $84,880
Hence, the cash flow impact is of $84,880 i.e to be included in the initial investment
After observing the heavy snow that his town received the previous winter, Ajay Patel, an enterprising student, plans to offer a show-clearing service in his neighborhood this winter. If he invests in a new heavy-duty blower. Ajay forecasts a profit of $700 if snowfall this winter is heavy, a profit of $200 if it is moderate and a loss of $900 if it is light. As per the current weather forecasts, the probabilities of heavy, moderate and light snowfall this winter are 0.4, 0.3 and 0.3 respectively.
Rather than purchase a new blower, Ajay could get his father's blower repaired and just accept smaller jobs. Under this option, Ajay estimates profit of $350 for a heavy snowfall, and a loss of $150 for a light snowfall. Ajay, of course has the option of choosing neither of these options.
The local weather Adams, is Ajay's good friend. For $50, she is willing to run sophisticated computer weather models on her computer and tell Ajay whether she expects this winter to be cold. For the sake of solving this problem, assume that the following information is available. There is a 45% chance that Samantha will predict this winter to be unseasonably cold. If she does say this, the probabilities of heavy, moderate, and light snowfall are revised to 0.7, 0.25, and 0.05, respectively. On the other hand, if she predicts that this winter will not be unseasonably cold, these probabilities aye revised to 0.15, 0.33, and 0.52, respectively.
Draw the decision tree for the situation faced by Ajay. Fold back the tree and determine the strategy you would recommend he follow. What is the efficiency of Samantha's information?
Suppose the demand for Digital Video Recorders (DVRs) is given by Q = 250 - .25p + 4pc, where Q is the quantity of DVRs demanded (in 1000s), p is the price of a DVR, and pc is the price of cable television. How much does the quantity demanded for DVRs change if the p rises by $40?
The question is incomplete. Here is the complete question
Suppose the demand for Digital Video Recorders (DVRs) is given by Q = 250 - .25p + 4pc, where Q is the quantity of DVRs demanded (in 1000s), p is the price of a DVR, and pc is the price of cable television. How much does the quantity demanded for DVRs change if the p rises by $40? A) drops by 10,000 DVRs B) increases by 16,000 DVRs C) drops by 2,500 DVRs D) increases by 4,000
Answer:
Drops by 10,000 DVRs
Explanation:
The demand for digital video recorders is expressed by
Q= 250- .25p+4pc
Where
Q represents the quantity demanded by the customers
P represents the price of DVR
pc represents the price of cable television
Since the factor of p in the expression above is negative, this implies that the quantity of DVR demanded in the market will reduce
If the price of DVR increase by $40, then the quantity demanded will reduce by
= 0.25×40×1000
= 10×1000
= 10,000 units
Hence the quantity of DVRs drops by 10,000 DVRs if the price is increased to $40
A food truck operator originally produced hamburgers and hotdogs. To serve the tastes of their various customers, the hot dog vendor decides to start producing turkey dogs and ham sandwiches as well. Since the new products were introduced, average costs rose dramatically. The vendor is experiencing:________.
A. Economies of scope.
B. Diseconomies of scope.
C. Economies of scale.
D. Diseconomies of scale.
The correct answer is B. Diseconomies of scope
Explanation:
In businesses, diseconomies of scope occur when costs increase when two or more products are produced by the same business. This means it is cheaper and more efficient for a business to specialize in a few products rather than focusing on diverse products. This occurs in the case presented because the production of turkey dogs and ham sandwiches increased the costs, which shows it is more efficient for the business to specialize in a few products. Thus, this vendor is experiencing diseconomies of scope.
At March 31, Cummins Co. had an unadjusted balance in its cash account of $9,700. At the end of March, the company determined that it had outstanding checks of $950, deposits in transit of $620, a bank service charge of $25, and an NSF check from a customer for $210. What is the true cash balance at March 31
Answer:
$9,465
Explanation:
The computation of the true cash balance as on March 31 is shown below:
= Unadjusted cash balance as on March 31 - bank service charges - NSF check from a customer
= $9,700 - $25 - $210
= $9,465
These above two items are to be deducted
The other two items i.e outstanding checks and the deposit in transit are related to the bank balance and the same is not considered
Assuming no employees are subject to ceilings for their earnings, Harris Company has the following information for the pay period of January 15 - 31.
Gross payroll $19,676
Federal income tax withheld $3,438
Social security rate 6%
Federal unemployment tax rate 0.8%
Medicare rate 1.5%
State unemployment tax rate 5.4%
Salaries Payable would be recorded in the amount of
a) $15,018.09
b) $13,542.39
c) $14,762.30
d) $19,676.00
Answer:
The correct answer is B. Salaries Payable would be recorded in the amount of 13,542.39.
Explanation:
Given that the company's gross payroll is $19,676, and that a discount of $3,438 must be applied by the Federal Income Tax, a 6% social security rate, a 0.8% federal unemployment rate, a 1.5% rate Medicare and 5.4% state unemployment rate, the following gross discounts must be made to gross payroll to determine wages to be paid after taxes:
3,438 (Federal Income Tax)
19,676 x 0.06 = 1,180.56 (social security rate)
19,676 x 0.008 = 157.408 (federal unemployment rate)
19,676 x 0.015 = 295.14 (Medicare rate)
19,676 x 0.054 = 1,062.5 (state unemployment rate)
Therefore, those discounts should be subtracted from the gross payroll in order to get the Salaries Payable:
19,676 - 3,438 - 1,180.56 - 157.4 - 295.14 - 1,062.5 = 13,542.39.
Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance Sheet Beginning Balance Ending Balance Assets Cash Accounts receivable Inventory Plant and equipment, net Investment in Buisson, S.A. Land (undeveloped) Total assets $ 130,000 $125,000 471,000 484,000 870,000 434,000 250,000 $ 2,562,000 2,634,000 341,000 562,000 877,000 399,000 253,000 Liabilities and Stockholders' Equity Accounts payable Long-term debt Stockholders' equity Total liabilities and stockholders' equity $ 383,000 336,000 1,018,000 1,280,000 $ 2,562,000 2,634,000 1,018,000 1,161,000 Joel de Paris, Inc. Income Statement Sales Operating expenses Net operating income Interest and taxes: $ 5,404,000 4,593,400 810,600 Interest expense Tax expense ş 114,000 209,000 323,000 $ 487,600 Net income The company paid dividends of $368,600 last year. The "Investment in Buisson, S.A.," on the balance sheet represents an investment in the stock of another company. The company's minimum required rate of return of 15%
Required:
1. Compute the company's average operating assets for last year
2. Compute the company's margin, turnover, and return on investment (ROl) for last year. (Round "Margin", "Turnover" and "ROI" to 2 decimal places.)
3. What was the company's residual income last year?
Answer:
1. $1,930,000
2. Margin = 15%
Turnover = $2.8
Return on investment = 42%
3. $521,100
Explanation:
1. The computation of average operating assets for last year is shown below:-
Average operating assets = (Beginning operating assets + Ending operating assets) ÷ 2
= ($2,562,000 - $399,000 - $253,000) + ($2,634,000 - $434,000 - $250,000) ÷ 2
= ($1,910,000 + $1,950,000) ÷ 2
= $3,860,000 ÷ 2
= $1,930,000
2. The computation of company's margin, turnover, and return on investment is shown below:-
Margin = Net operating income ÷ Sales
= $810,600 ÷ $5,404,000
= 15%
Turnover = Sales ÷ Average operating assets
= $5,404,000 ÷ $1,930,000
= $2.8
Return on investment = Margin × Turnover
= 15% × $2.8
= 42%
3. The computation of residual income last year is shown below:-
Residual income last year = Net operating income - Minimum required return
= $810,600 - ($1,930,000 × 15%)
= $810,600 - $289,500
= $521,100
So, we have applied the above formula.
g Lydia, a citizen of Italy, produces scarves and purses that she sells to department stores in the United States. Other things the same, these sales a. increase U.S. net exports and have no effect on Italian net exports. b. decrease U.S. net exports and have no effect on Italian net exports. c. increase U.S. net exports and decrease Italian net exports. d. decrease U.S. net exports and increase Italian net exports.
Answer:
d. decrease U.S. net exports and increase Italian net exports.
Explanation:
As it is given that
Lydia, who is a citizen of Italy produced scarves and purses in order to sell to the department stores in the united states keeping other things constant. So the sales would reflect an increased in the net exports of Italian as she is a producer and sell its products to the united states and at the same time it decreased or decline the net exports of united states
The net exports is
= Exports - imports
Hence, the correct option is d.
Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent month for the two games appears below: Claim Jumper Makeover Total Sales $ 104,000 $ 52,000 $ 156,000 Variable expenses 32,200 6,800 39,000 Contribution margin $ 71,800 $ 45,200 117,000 Fixed expenses 86,850 Net operating income $ 30,150 Required: 1. What is the overall contribution margin (CM) ratio for the company
Answer:
Weighted average contribution margin ratio= 0.726
Explanation:
Giving the following information:
Sales:
Claim Jumper= $104,000
Makeover= $52,000
Variable cost:
Clain Jumper= $32,200
Makeover= $6,800
First, we need to calculate the participation of the sales for each product:
Claim Jumper= 104,000/156,000= 0.67
Makeover= 52,000/156,000= 0.33
To calculate the weighted average contribution margin ratio, we need to use the following formula:
Weighted average contribution margin ratio= (weighted average sales - weighted average variable cost)/ weighted average sales
weighted average sales= (0.67*104,000) + (0.33*52,000)
weighted average sales= 86,840
weighted average unitary variable cost= (0.67*32,200) + (0.33*6,800)
weighted average unitary variable cost= 23,818
Weighted average contribution margin ratio= (86,840 - 23,818) / 86,840
Weighted average contribution margin ratio= 0.726
At the beginning of the year, Quaker Company's liabilities equal $78,000. During the year, assets increase by $60,000, and at year-end assets equal $190,000. Liabilities decrease $14,000 during the year. What are the beginning and ending amounts of equity?
Answer:
$52,000 and $126,000
Explanation:
The computation of the beginning and ending amount of equity is as follows
Particulars Assets (A) Liabilities (L) Equity (A - L)
Beginning $130,000 $78,000 $52,000
Add: increase or less decreased
Change $60,000 -$14,000
Ending $190,000 $64,000 $126,000
We simply applied the accounting equation to find out the beginning and ending amounts of equity
Bond X is noncallable and has 20 years to maturity, a 9% annual coupon, and a $1,000 par value. Your required return on Bond X is 8%; if you buy it, you plan to hold it for 5 years. You (and the market) have expectations that in 5 years, the yield to maturity on a 15-year bond with similar risk will be 8.5%. How much should you be willing to pay for Bond X today
Answer:
$954.54
Explanation:
The price of the bond today is the present value of the promised cash inflows of coupon payment and repayment of face value which is computed using fv formula in excel below:
Price in 5 years time:
=-pv(rate,nper,pmt,fv)
rate is 8.5% in 5 years' time
nper is 15 years in 5 years' time
pmt is the annual coupon=$1000*9%=$$90
fv is the face value of $1000
=-pv(8.5%,15,90,1000)=$ 1,041.52
Price today:
=-pv(8%,20,90,1,041.52)=$954.54
Holly owns a dance studio. To improve sales of dance classes, she is reviewing how her marketing team could update the company's online presence.
As part of the rebrand, the team listened to customer feedback and mapped customer journeys. They identified two things online customers generally struggled with: navigating the website and finding the business's contact information.
Which of the brand's touchpoints should Holly modify to help address her customer's feedback?
Answer:
b. website layout
c. email marketing
Explanation:
The website layout is the layout i.e created for a website. It should be attractive to the owners and users. Moreover it should be easy to navigate it so that if anyone could access to the website he or she could easily access it without any hurdle.
The email marketing is a technique in which we can send one message to large audience in the same time. It helps in saving cost and time
According to the given situation, the online customers struggled with website navigate and to find out the contact information related to the business
So to modify and help address her customer feedback the website layout and the email marketing plays a vital role and the same is to be considered