Answers
Answer:
i think it is eaither b or c
Explanation:
Answer: C- specialization
Explanation:
Related Questions
Smith and Sons, Inc. Income Statement (in millions)
2016 2015
Net sales 10,300 9,800
Cost of goods sold (5,500) (5,200)
Gross profit 4,800 4,600
Selling and administrative expenses (2,800) (2,700)
Income from operations 2,000 1,900
Interest expense (300) (250)
Income before income taxes 1,700 1,650
Income tax expense (420) (400)
Net income 1,280 1,250
Smith and Sons, Inc. Balance Sheet
Assets
Current assets
Cash and cash equivalents 450 650
Accounts receivable 900 800
Inventory 750 900
Other current assets 400 250
Total current assets 2,500 2,600
Property, plant & equipment, net 2,350 2,250
Other assets 5,700 5,900
Total Assets 10,550 10,750
Liabilities and Stockholders' Equity
Current liabilities 3,250 3,150
Long-term liabilities 5,000 5,400
Total liabilities 8,250 8,550
Stockholders' equity-common 2,300 2,200
Total Liabilities and Stockholders' Equity 10,550 10,750
Required:
Calculate the quick ratio for Smith & Sons, Inc., for 2015 and 2016.
Answers
Answer:
2015 Quick Ratio 0.54
2016 Quick Ratio 0.54
Explanation:
Calculation to determine the quick ratio for Smith & Sons, Inc., for 2015 and 2016
Using this formula
Quick Ratio = Quick assets/Current liabilities
Let plug in the formula
2015 Quick Ratio = (2,600-900)/3150
2015 Quick Ratio= 0.54
2016 Quick Ratio = (2500-750)/3,250
2016 Quick Ratio = 0.54
Therefore the quick ratio for Smith & Sons, Inc., for 2015 is 0.54 and 2016 is 0.54
The OYB Company is performing an annual evaluation of two of its suppliers: X Company and the Y Company. You have collected the following information: Performance Criteria X Company Score Y Company Score Weight Product Availability 75 80 0.25 Responsive 75 80 0.10 On-time delivery 80 85 0.25 % of Delivery Correct/No Damage 90 95 0.15 Communication of Delays 95 65 0.15 Business (Info Sharing/Attitudes) 85 75 0.10 Total Score 82.5 80.75 Which statements are true? Group of answer choices If OYB designates scores of 70-90 as "Certified: meeting performance standards", both companies are "Certified" suppliers. X Company has a higher evaluation. Y Company moves to the "Preferred" category since the most important parameters, on-time delivery and product availability, are higher with Y Company. b and c only a and b only
Answers
Answer:
The OYB Company
The true statements are:
a. If OYB designates scores of 70-90 as "Certified: meeting performance standards", both companies are "Certified" suppliers.
b. X Company has a higher evaluation.
Therefore,
a and b only
Explanation:
a) Data and Calculations:
Performance Criteria X Company Score Y Company Score Weight Product Availability 75 80 0.25
Responsive 75 80 0.10
On-time delivery 80 85 0.25
% of Delivery Correct/
No Damage 90 95 0.15
Communication of Delays 95 65 0.15
Business
(Info Sharing/Attitudes) 85 75 0.10
Total Score 82.5 80.75
A company issues $90,000 of 9%, 10-year bonds dated January 1 that pay interest semiannually on June 30 and December 31 each year. If bonds are sold at par value, the issuer records the payment of principal at maturity with a (debit/credit) ________ to bond payable in the amount of _______. Multiple choice question. debit; $171,000 credit; $171,000 debit; $90,000 credit; $90,000 Need help
Answers
Answer:
Debit; $90,000
Explanation:
Based on the information given in a situation where the company issues the amount of $90,000 on January 1 which means that assuming the bonds are sold at par value, the issuer of the bonds will records the payment of principal at maturity with a DEBIT to bond payable in the amount of $90,000.
Following are data for BioBeans and GreenKale, which sell organic produce and are of similar size. BioBeans GreenKale Average total assets $ 215,000 $ 166,500 Net sales 105,000 33,300 Net income 15,050 3,900 Required: 1a. Compute the profit margin for both companies. 1b. Compute the return on total assets for both companies. 2. Based on analysis of these two measures, which company is the preferred investment
Answers
Answer:
1a. We have:
BioBeans' profit margin = 14.33%
GreenKale's profit margin = 11.71%
1b. We have:
BioBeans' return on total assets = 7%
GreenKale's return on total assets = 2.34%
2. BioBeans is the preferred investment.
Explanation:
1a. Compute the profit margin for both companies.
Profit margin = Net income / Net sales ........... (1)
Using equation (1), we have:
BioBeans' profit margin = $15,050 / $105,000 = 0.1433, or 14.33%
GreenKale's profit margin = $3,900 / $33,300 = 0.1171, or 11.71%
1b. Compute the return on total assets for both companies.
Return on total assets = Net income / Average total assets ............ (2)
Using equation (1), we have:
BioBeans' return on total assets = $15,050 / $215,000 = 0.07, or 7%
GreenKale's return on total assets = $3,900 / $166,500 = 0.0234, or 2.34%
2. Based on analysis of these two measures, which company is the preferred investment?
Since the profit margin and return on total assets of BioBeans are greater than the profit margin and return on total assets of GreenKale, this indicates that BioBeans is the preferred investment.
You are given the following information on Parrothead Enterprises:
Debt: 9,300 6.5 percent coupon bonds outstanding, with 22 years to maturity and a quoted price of 104.75. These bonds pay interest semiannually and have a par value of $1,000.
Common stock: 240,000 shares of common stock selling for $64.80 per share. The stock has a beta of.93 and will pay a dividend of $3.00 next year. The dividend is expected to grow by 5.3 percent per year indefinitely.
Preferred stock: 8,300 shares of 4.65 percent preferred stock selling at $94.30 per share. The par value is $100 per share.
Market: 11.7 percent expected return, risk-free rate of 3.75 percent, and a 23 percent tax rate.
Calculate the company's WACC. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) WACC %
Answers
Answer:
8.19%
Explanation:
Calculation to determine the company's WACC
First step is to calculate the CAPM rate of equity
Using this formula
CAPM rate of equity = Risk free rate + market risk premium * beta
Let plug in the formula
CAPM rate of equity=3.75%+(11.7%-3.75%)*0.93
CAPM rate of equity=11.14%
Second step is to calculate the DDM rate of equity
Using this formula
DDM rate of equity= Expected dividend next year/Price today + Growth rate
Let plug in the formula
DDM rate of equity=3/64.8+5.3%
DDM rate of equity=9.93%
Third step is to calculate the Cost of equity using this formula
Cost of equity = Average of CAPM and DDM
Let plug in the formula
Cost of equity=(11.14%+9.93%)/2
Cost of equity= 10.54%
Fourth Step is to calculate the Cost of debt (after tax)
Cost of debt (after tax) using financial calculator to compute YTM
PV -1047.5
FV 1000
PMT 1000*6.5%/2 32.5
N 22*2 44
Compute I 3.05%
YTM =3.05%*2 6.10%
Tax rate = 23%
Hence,
Rate of debt (after tax) = 6.1%*(1-23%)
Rate of debt (after tax) = 4.70%
Fifth step is to calculate the Rate of preferred stock using this formula
Rate of preferred stock = Annual dividend/Current price
Let plug in the formula
Rate of preferred stock=4.65/94.3
Rate of preferred stock=4.93
Sixth step is to calculate the Weight
Market value
Source
equity 240000*64.8= 15552000
debt 1047.5*9300= 9741750
preferred stock 8300*94.3=782690
Total 26076440
equity 15552000/26076440= 59.64%
debt 9741750/26076440=37.36%
preferred stock 782690/ 26076440=3.00%
Now let calculate compute WACC
WACC= weight * cost
equity 59.64%*10.54%=6.28%
debt 37.36%* 4.70% =1.76%
preferred stock3.00%*4.93%=0.15%
WACC = 8.19%
(6.28%+1.76%+0.15%)
Therefore the company's WACC is 8.19%
The ___ function returns the year portion of the data/time available
Answers
Answer:
The Excel YEAR function returns the year component of a date as a 4-digit number.
Explanation:
Based on the readings: match the following business example with its associated product cost term A businessowner pays for rent and equipment at their office An airline considers the costs of serving food and beverages to its passengers A company considers the costs it pays to its employees A clothing manufacturer buys new machines for its factory A. variable costs B. fixed costs C. fixed cost D. variable costs
Answers
Answer:
A business owner pays for rent and equipment at their office ⇒ FIXED COSTs since the amount of rent paid should be the same year after year
An airline considers the costs of serving food and beverages to its passengers ⇒ VARIABLE COSTS since the cost of serving food will increase as the number of passengers increase, or will decrease if the number of passengers decrease
A company considers the costs it pays to its employees ⇒ VARIABLE COSTS since the number of employee can vary and the number of hours worked can also vary
A clothing manufacturer buys new machines for its factory ⇒ FIXED COSTS since the machines are depreciated at a predetermined rate that doesn't depend on the factory's output
A company's old machine that cost $40,000 and had accumulated depreciation of $22,000 was traded in on a new machine having an estimated 20-year life with an invoice price of $45,000. The company also paid $33,000 cash, along with its old machine to acquire the new machine. If this transaction has commercial substance, the new machine should be recorded at:
Answers
Answer:
$45,000
Explanation:
Based on the information given we are told that the new machine had an estimated 20-year life as well as an invoice price of the amount of $45,000 which means that in a situation were the transaction has commercial substance the new machine should be recorded at invoice price of the amount of $45,000.
Therefore the new machine should be recorded at:$45,000
ZIP Company owns 46,000 shares of the common stock of PIK Company. ZIP decided to divest itself of this investment by distributing the PIK shares in the form of a property dividend. The dividend ratio is one share of PIK for every four shares of ZIP common held by shareholders. ZIP has 184,000 common shares outstanding. On April 15, 2016, the date of declaration, PIK stock had a par value of $5 per share, a book value of $12.6 per share, and a market value of $17.6 per share.
Required:
1. Prepare any necessary journal entries. The shares were distributed on May 15, 2016, to stockholders of record on May 1, 2016. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
2. Record appreciation of investment.
3. Record declaration of property dividend.
4. Record the entry on date of record.
5. Record the payment of the property dividend.
Answers
Answer and Explanation:
The journal entries are shown below:
2 On April 15,2016
Investment in PK common stock Dr (46,000 × ($17.6 - $12.6)) $230,000
To Gain on investment $230,000
(Being appreciation of investment is recorded)
3. On April 15,2016
Retained earnings Dr (184,000 ÷ 4 × $17.6) $809,600
To Property dividend payable $809,600
(Being declaration of property dividend)
4. No journal entry is required for date of record
5. Property dividend payable Dr $809,600
To Investment in PK common stock $809,600
(Being the payment of the property dividend is recorded)
Solutions Inc. signs a 10-year lease for a building owned by Property Inc. that is appropriately classified as an operating lease by both the lessee and lessor. Lease payments are $150,000 per year. The building has an estimated useful life of 30 years with no salvage value. Assume that the building has a fair and carrying value of $2,000,000 at the commencement of the lease, what amount would Property Inc. recognize in its income statement (ignoring taxes) for the year ended December 31, 2020
Answers
Answer: $83,333
Explanation:
Amount Property will recognize in income statement:
= Lease revenue - Depreciation
Depreciation:
= (Fair value - salvage) / useful life
= (2,000,000 - 0) / 30
= $66,667
Amount recognized in income statement:
= 150,000 - 66,667
= $83,333
Break-even sales and sales to realize operating incomeFor the current year ended March 31, Cosgrove Company expects fixed costs of $465,000, a unit variable cost of $62, and a unit selling price of $92.a. Compute the anticipated break-even sales (units).fill in the blank 1 unitsb. Compute the sales (units) required to realize operating income of $108,000.fill in the blank 2 units
Answers
Answer:
Break even point in units=15,500 units
Units to achieve target profit=19,100 units
Explanation:
Break-even point is the level of activity at which a firm must operate such that its total revenue will equal its total costs. At this point, the company makes no profit or loss because the total contribution exactly equals the total fixed costs
Break-even point (in units) is calculated using this formula:
Break even point in units = Total general fixed cost/ (selling price - Variable cost)
Break even point in units= $465,000/(92-62)=15,500 units
Units to achieve target profit = (Total general fixed cost for the period + target profit)/ contribution per unit
Units to achieve target profit of 108,000 = ($465,000+ 108,000)/ (92-62)=19,100 units
Break even point in units=15,500 units
Units to achieve target profit=19,100 units
Using Firm Guidance to Research a Revenue Question
•You are an accountant working for Hotel Co. Your supervisor has asked you to research what amount of revenue Hotel Co. should recognize for transactions booked by customers on Expedia.com.
•Expedia generally collects the full transaction price from the customer, then withholds a small fee (say, $10) from each transaction and remits the balance to Hotel Co.
•Should Hotel Co. record the gross transaction fee or only the net amount it receives from Expedia.com? Use nonauthoritative firm guidance to assist in your response.
•Start off with the codifications (606?), then move to the non-auth. sources.
Answers
Answer:
The Hotel Co. should record the net amount it receives from Expedia.com
Explanation:
According to codification ( 606 ) The Hotel Co. should record the net amount it receives from Expedia.com
Applying codification ( 606 ) the entity( Expedia.com ) will give the agreed upon transaction price to Hotel.co as soon as a requirement is met. and that price can be based on standalone selling prices of the service or good which is defined within the contract. but if the selling price is not clear there will be an estimate of the price, note that: Transaction prices are always not the same as the standalone selling price.
The following data pertain to Frontier Enterprises:
Variable manufacturing cost $ 70
Variable selling and administrative cost 20
Applied fixed manufacturing cost 40
Allocated fixed selling and administrative cost 15
What price will the company charge if the firm uses cost-plus pricing based on variable manufacturing cost and a markup percentage of 110%?
A. $84.
B. $147
C. $210.
D. $231
E. Some other amount.
Answers
Answer:
D. $231.
Explanation:
With regards to the above, first we need to compute the total manufacturing cost.
Total manufacturing cost = Variable manufacturing cost + Applied fixed manufacturing cost
= $70 + $40
= $110
Then,
= $110 + ($110 × 1.1)
= $110 + $121
= $231
Therefore , the company will charge $231 if cost- plus pricing based is used.
In 1933, U.S. manufacturers, which used to enjoy steady relationships with their foreign distributors and export nearly 30% of their output, realized that their exports had fallen to only 10% of total output. Which of the following is the most likely reason for this decrease in exports?
a. The low quality of U.S. products
b. Retaliatory tariffs by trading partners
c. War between the United States and Mexico
Answers
Answer: b. Retaliatory tariffs by trading partners
Explanation:
In the 20s, the United States instituted a series of tariffs on imports that culminated with the Smoot-Hawley tariff of 1930 as they hoped to protect the local industry and to increase government revenue.
Some countries replied with their own tariffs on American exports such that American exports to these countries fell significantly and world trade reached a new low as well.
TB MC Qu. 8-199 The Puyer Corporation makes and sells ... The Puyer Corporation makes and sells only one product called a Deb. The company is in the process of preparing its Selling and Administrative Expense Budget for next year. The following budget data are available: Monthly Fixed Cost Variable Cost Per Deb Sold Sales commissions $ 0.90 Shipping $ 1.40 Advertising $ 50,000 $ 0.20 Executive salaries $ 60,000 Depreciation on office equipment $ 20,000 Other $ 40,000 All of these expenses (except depreciation) are paid in cash in the month they are incurred. If the company has budgeted to sell 17,000 Debs in March, then the average budgeted selling and administrative expenses per unit sold for March is closest to: (Round your intermediate calculations to 2 decimal places.)
Answers
Answer: $10
Explanation:
First, we need to calculate the total budgeted selling and administrative expenses for March which will be:
Advertising = $50,000
Add: Executive salaries = $60,000
Add: Depreciation on office equipment = $20,000
Add: Other = $40,000
Total = $170,000
Since the company has budgeted to sell 17,000 Debs in March, then the average budgeted selling and administrative expenses per unit sold for March is:
= $170000 / 17000
= $10
Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $39.4 million cash on October 1, 2021, to provide working capital for anticipated expansion. Precision signs a one-year, 9% promissory note to Midwest Bank under a prearranged short-term line of credit. Interest on the note is payable at maturity. Each firm has a December 31 year-end.
Required:
a. Prepare the journal entries on October 1, 2021, to record the issuance of the note.
b. Record the adjustments on December 31, 2021.
c. Prepare the journal entries on September 30, 2021, to record payment of the notes payable at maturity.
Answers
Answer:
a. Precision Castparts
Dr Cash $39.4 million
Cr Notes Payable $39.4 million
Midwest Bank
Dr Notes Receivable $39.4 million
Cr Cash $39.4 million
b. Precision Castparts
Dr Interest expense $886,500
Cr Interest payable $886,500
Midwest Bank
Dr Interest receivable $886,500
Cr Interest revenue $886,500
c. Precision Castparts
Dr Notes payable $39.4 million
Dr Interest expense $2,659,500
Dr Interest payable $886,500
Cr Cash $42,946,000
Midwest Bank
Dr Cash $42,946,000
Cr Notes receivable $39.4 million
Cr Interest revenue $2,659,500
Cr Interest receivable $886,500
Explanation:
a. Preparation of the journal entries on October 1, 2021, to record the issuance of the note.
Precision Castparts
Dr Cash $39.4 million
Cr Notes Payable $39.4 million
Midwest Bank
Dr Notes Receivable $39.4 million
Cr Cash $39.4 million
b. Preparation of the journal entry to Record the adjustments on December 31, 2021.
Precision Castparts
Dr Interest expense $886,500 ($39.4 million x 9% x 3/12)
Cr Interest payable $886,500
Midwest Bank
Dr Interest receivable $886,500
Cr Interest revenue $886,500
($39.4 million x 9% x 3/12)
c. Preparation of the journal entries on September 30, 2021, to record payment of the notes payable at maturity.
Precision Castparts
Dr Notes payable $39.4 million
Dr Interest expense $2,659,500($39.4 million x 9% x 9/12)
Dr Interest payable $886,500
($39.4 million x 9% x 3/12)
Cr Cash $42,946,000
($39.4 million+$2,659,500+$886,500)
Midwest Bank
Dr Cash $42,946,000
($39.4 million+$2,659,500+$886,500)
Cr Notes receivable $39.4 million
Cr Interest revenue $2,659,500($39.4 million x 9% x 9/12)
Cr Interest receivable $886,500
($39.4 million x 9% x 3/12)
Pittman Framing's cost formula for its supplies cost is $1,110 per month plus $11 per frame. For the month of November, the company planned for activity of 621 frames, but the actual level of activity was 611 frames. The actual supplies cost for the month was $8,250. The spending variance for supplies cost in November would be closest to:
Answers
Answer:
See below
Explanation:
Spending variance for supplies = Standard cost - Actual cost
Standard cost formulae = $1,110 per month + $11 per frame
Standard cost for actual output = $1,110 + ($11 × 611)
= $1,110 + $6,721
= $7,831
But actual cost = $8,250
Therefore,
Spending variance would be
= $7,831 - $8,250
= $419 unfavourable
The spending variance for supplies cost in November is closest to $419 unfavourable
Let T1 be the time between a car accident and reporting a claim to the insurance company. Let T2 be the time between the report of the claim and payment of the claim. The joint density function of T1 and T2, f(t1, t2), is constant over the region 0 < t1 < 6, 0 < t2 < 6, t1 t2 < 10, and zero otherwise. Determine E[T1 T2], the expected time between a car accident and payment of the claim.
Answers
Answer:
5.7255
Explanation:
From the given information:
[tex]T_1 \to \text{time between car accident \& reporting claim} \\ \\ T_2 \to \text{time between reporting claim and payment of claim}[/tex]
The joint density function of [tex]T_1[/tex] and [tex]T_2[/tex] is:
[tex]f(t_1,t_2) = \left \{ {{c \ \ \ 0<t_1<6, \ \ \ 0<t_2<6, \ \ \ t_1+t_2<10} \atop {0} \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ otherwise} \right.[/tex]
Area(A): [tex]= 6\times 6 - \dfrac{1}{2}*2*2[/tex]
= 34
The limits are:
[tex]\text{limits of } \ t_1 \ from \ 0 \ is \ 10 \to t_2 \\ \\ \text{limits of } \ t_2 \ from \ 0 \ is \ 4 \to 6[/tex]
Also;
[tex]\text{limits of } \ t_1 \ is \ 0 \to 6 \\ \\ \text{limits of } \ t_2 \ is \ 0 \to 4[/tex]
∴
[tex]\iint f(t_1,t_2) dt_1dt_2 =1 \\ \\ c \iint 1dt_1dt_2 = 1 \\ \\ cA = 1 \\ \\ \implies c = \dfrac{1}{34}[/tex]
To find;
[tex]E(T_1+T_2) = \iint (t_1+t_2)c \ \ dt_1dt_2 \\ \\ \implies \dfrac{1}{34} \Big[\int \limits^4_0 \int \limits^6_0(t_1+t_2) dt_1 \ dt_2 + \int \limits^6_4 \int \limits^{10-t_2}_0(t_1+t_2) dt_1 dt_2 \Big] \\ \\ \implies \dfrac{1}{34} (120 + \dfrac{224}{3}) \\ \\ = \mathbf{5.7255}[/tex]
Russell Retail Group begins the year with inventory of $65,000 and ends the year with inventory of $55,000. During the year, the company has four purchases for the following amounts. Purchase on February 17 $ 220,000 Purchase on May 6 140,000 Purchase on September 8 170,000 Purchase on December 4 420,000 Required: Calculate cost of goods sold for the year.
Answers
Answer:
COGS= $960,000
Explanation:
Giving the following information:
Beginning inventroy= $65,000
Ending inventory= $55,000
Total Purchase= 220,000 + 140,000 + 170,000+ 420,000= $950,000
To calculate the cost of goods sold, we need to use the following formula:
COGS= beginning inventory + cost of goods purchased - ending inventory
COGS= 65,000 + 950,000 - 55,000
COGS= $960,000
A wedding party hired a sole proprietorship to cater their wedding, and the sole proprietorship had an employee handle the entire job. If the entire wedding party gets food poisoning, the principal is liable. The employee of the sole proprietorship is also liable because he handled the entire job.
Answers
Explanation:
well I will say yes meaning true because he or she was put in charge of the entire job
What exactly allows individuals to consume more if they specialize and trade than if they don't
Answers
Answer:
They work within the company that allows them to do so. Vs. others that don't.
Explanation:
Hope this helps! plz mark as brainliest!
Brent is a full-time exempt employee in Clark County, Indiana. He earns an annual salary of $39,360 and is paid semimonthly. He is married with 3 withholding allowances. His state income tax is $52.97, and Clark County income tax is $29.52 per pay period. What is the total of FICA, Federal, state, and local deductions per pay period, assuming no Pre-Tax Deductions
Answers
Answer:
Federal Income tax ⇒ $80FICA ⇒ $125.46 State income tax ⇒ $52.97Local deduction - Clark County Income tax ⇒ $29.52Explanation:
Brent gets paid semi-monthly so his pay per period is:
= 39,360 / (12 months *2)
= $1,640
Based on the table therefore, his federal tax is:
= $80
This figure is based on the intersection between income of $1,640 and 3 withholding allowances.
FICA tax rate is 7.65% so his FICA tax is:
= 1,640 * 7.65%
= $125.46
State income tax = $52.97
Local deduction - Clark County Income tax = $29.52
Total deductions:
= Federal tax + FICA + State income tax + Clark County income tax
= 80 + 125.46 + 52.97 + 29.52
= $287.95
Assume that last year, Cliff Consulting, a firm in Berkeley, CA, had the following contribution income statement:
CLIFF CONSULTING
Contribution Income Statement
For the Year Ended September 30
Sales revenue $ 1,200,000
Variable costs
Cost of services $ 480,000
Selling and administrative 60,000 540,000
Contribution margin 660,000
Fixed Costs -selling and administrative 440,000
Before-tax profit 220,000
Income taxes (21%) 46,200
After-tax profit $ 173,800
(a) Determine the annual break-even point in sales revenue.
(b) Determine the annual margin of safety in sales revenue.
(c) What is the break-even point in sales revenue if management makes a decision that increases fixed costs by $80,000?
(d) With the current cost structure, including fixed costs of $440,000, what dollar sales revenue is required to provide an after-tax net income of $250,000?
(e) Prepare an abbreviated contribution income statement to verify that the solution to requirement (d) will provide the desired after-tax income.
Answers
Answer:
Cliff Consulting
a) Annual Break-even point in sales revenue is:
= $800,000
b) Annual margin of safety is:
= $400,000
c) If fixed costs increases by $80,000, the break-even point in sales revenue
= $945,455
d) Dollar Sales Revenue required to provide an after-tax net income of $250,000 is:
= $1,375,375
e) Abbreviated Contribution Income Statement
Sales revenue $1,375,375
Variable costs = 618,919
Contribution = $756,456
Fixed costs 440,000
Before tax income 316,456
Income tax (21%) 66,458
After-tax income $249,998
equivalent to $250,000
Explanation:
a) Data and Calculations:
CLIFF CONSULTING
Contribution Income Statement
For the Year Ended September 30
Sales revenue $ 1,200,000
Variable costs
Cost of services $ 480,000
Selling and administrative 60,000 540,000
Contribution margin 660,000
Fixed Costs -selling and administrative 440,000
Before-tax profit 220,000
Income taxes (21%) 46,200
After-tax profit $ 173,800
Break-even point in sales revenue = Fixed costs/Contribution margin ratio
= $440,000/0.55
= $800,000
Annual margin of safety = normal sales revenue minus break-even sales revenue
= $1,200,000 - $800,000
= $400,000
Contribution margin ratio = contribution margin/sales revenue * 100
= $660,000/$1,200,000 * 100 = 55%
If fixed costs increases by $80,000, the break-even point in sales revenue
= ($440,000 + $80,000)/0.55 = $520,000/0.55 = $945,455
To achieve after-tax net income of $250,000, the required dollar sales revenue:
Net income after-tax = $250,000
Tax rate = 21%
Net income before tax = $250,000/1-21%
= $250,000/0.79 = $316,456
Sales dollars to achieve target profit = (Fixed costs + Target Profit/1 - 0.21)/Contribution margin
= ($440,000 + ($250,000/0.79))/0-55
= ($440,000 + $316,456)/0.55
= $756,456/0.55
= $1,375,375
Abbreviated Contribution Income Statement
Sales revenue $1,375,375
Variable costs = 618,919
Contribution = $756,456
Fixed costs 440,000
Before tax income 316,456
Income tax (21%) 66,458
After-tax income $249,998
After-tax income is equivalent to $250,000
You are comparing two companies in the same industry. You have determined that Gore Corp. depreciates its plant assets over a 40-year life, whereas Ross Corp. depreciates its plant assets over a 20-year life. Discuss the implications this has for comparing the results of the two companies.
Answers
Answer:
Gore Corp. is depreciating over a longer term than Ross Corp. This means that on a yearly basis, they will have less depreciation expenses. This would give them a higher net income than Ross Corp but as a result they will then have to pay a higher tax.
Ross Corp on the other hand will be depreciating over a shorter term so this would mean that they are recognizing a higher depreciation expense per year. This would mean that their net income will be lower and by extension their taxes will be lower as well.
Job 412 was one of the many jobs started and completed during the year. The job required $9,500 in direct materials and 35 hours of direct labor time at a total direct labor cost of $10,400. If the job contained four units and the company billed at 70% above the unit product cost on the job cost sheet, what price per unit would have been charged to the customer
Answers
Answer:
The appropriate answer is "$8,457,50".
Explanation:
The given values are:
Direct material cost,
= $9,500
Direct labor cost,
= $10,400
Units completed in job 412,
= 4
Now,
The total cost for completion of job 412 will be:
= [tex]Direct \ materials \ cost + Direct \ labor \ costs[/tex]
On substituting the values, we get
= [tex]9,500 + 10,400[/tex]
= [tex]19,900[/tex] ($)
Unit produced cost will be:
= [tex]\frac{19,900}{4}[/tex]
= [tex]4,975[/tex] ($)
70% of unit produced cost will be the profit margin, then
= [tex]70 \ percent\times 4,975[/tex]
= [tex]3,482.50[/tex] ($)
hence,
The price charged to the customer will be:
= [tex]Unit \ product \ cost + Profit \ margin[/tex]
On substituting the values, we get
= [tex]4,975 + 3,482.50[/tex]
= [tex]8,457,50[/tex] ($)
Sheila and Jim live in an island where they are the only two workers. Sheila can either catch 10 fish or gather 40 pounds of berries each day, and Jim can either catch 8 fish or gather 24 pounds of berries each day. Both of them work 200 days per year. At current world prices 1 fish trades for 3.5 pounds of berries. Who has the comparative advantage in producing berries
Answers
Answer:
SHEILA
Explanation:
A person has comparative advantage in production if it produces at a lower opportunity cost when compared to other people.
Sheila's opportunity cost in producing berries = 10/40 = 0.25
Jim's opportunity cost in producing berries = 8/24 = 0.33
Sheila has a lower opportunity cost in the production of berries and thus has a comparative advantage in the production of berries
A firm is operating in the United States with only two other competitors in the industry. a. It is likely this industry would be characterized as: multiple choice 1 monopolistically competitive. perfectly competitive. oligopoly. pure monopoly. b. Firms in this industry will likely earn: multiple choice 2 a normal profit. an economic profit. an economic loss. c. If foreign firms begin supplying the product, increasing the number of competitors, it is likely that: multiple choice 3 economic profits will fall.
Answers
Answer:
a. oligopoly.
b. an economic profit.
c. economic profits will fall.
Explanation:
An oligopoly can be defined as a market structure comprising of a small number of firms (sellers) offering identical or similar products, wherein none can limit the significant influence of others.
Hence, it is a market structure that is distinguished by several characteristics, one of which is either similar or identical products and dominance by few firms.
The characteristics of an oligopolistic market structure are;
I. Mutual interdependence between the firms.
II. Market control by many small firms.
III. Difficult entry to new firms.
Hence, a firm operating in the United States of America with only two other competitors in the industry is likely to be an industry that would be characterized as oligopoly.
Additionally, business firms operating in this industry (oligopolistic market) will likely earn an economic profit. Also, if foreign business firms begin supplying the product, increasing the number of competitors, it is likely that economic profits will fall because the industry is now being competitive and controlled by other business firms.
In economics, market structure refers to how different industries are distinguished depending on the degree and form of product and services rivalry. It's based on the features that influence the outcomes and behaviors of businesses in a given market.
a) An oligopoly is a business that operates in the United States with only two other competitors in the same industry.
Reason:
An oligopoly is a market structure with a small number of enterprises and high entry barriers. A competitive environment in which there are just a few vendors reveals to be Oligopoly because there are only two competitors available in the business.
b) Oligopolistic businesses will almost certainly make an economic profit.
Reason:
In an oligopoly, all firms would have to work together to raise prices and make a bigger profit. The bulk of oligopolies form in industries where goods are essentially homogeneous and give essentially the same advantage to customers.
c) Economic earnings are expected to diminish or fall if international enterprises begin to supply the product, increasing the number of competitors.
Reason:
As the supply curve changes to the right, the market price begins to fall, and as a result, existing and new enterprises' economic earnings fall. Due to the entry of new enterprises, which pulls down the market price, economic profit is zero in the long term.
For more information regarding the oligopoly market, refer to the link: https://brainly.com/question/14285126?referrer=searchResults
Stockholders of Hudson Enterprises recently received an annual dividend of $2.50 per share. Three analysts are trying to determine the value of this stock based on expected future dividends. Each analyst uses a required return of 14%. Use appropriate dividend valuation models to find the value of Hudson stock under each of the following sets of assumptions:
a. Analyst A assumes dividends will remain constant at $2.50 for the indefinite future. Show D0, D1, r, g and Analyst A's price.
b. Analyst B assumes dividends will grow at a constant rate of 7% per year for the indefinite future. Show D0, D1, r, g and Analyst B's price.
c. Analyst C assumes dividends will grow at 14% for the next 2 years and will thereafter grow at a constant rate of 7% for the indefinite future. Show D0, D1, D2, D3, r, g and Analyst C's price.
d. Analyst D uses the market multiple approach to value a company's stock. Hudson has had an average P/E of 15 and an average P/S of 2 over the last few years. Earnings per share of $3 and sales per share of $20 are forecast for next year. What is Analyst D's price based on earnings? Based on Sales?
Answers
You have decided to start a lawn service business to help pay your tuition so that you can complete your undergraduate accounting degree. You plan to provide various lawn maintenance services that will include lawn mowing services, aeration and fertilization. You and two of your friends have agreed to work for you in this new business endeavor. Which of the following would best describe organizing for your new business?
A. Preparing monthly billing statements for clients.
B. Determining the types of lawn services that you will provide for clients.
C. Providing employees with the authority to make decisions regarding a client.
D. Hiring and training new employees.
Answers
Answer:
B. Determining the types of lawn services that you will provide for clients.
Explanation:
As can be seen in the question above, you have decided to open a gardening business. However, as we know, gardening is very broad and many services can be associated with it. In order not to leave your business disorganized and to define the service you are offering, you have organized your business by determining the types of lawn services that your business offers, such as lawn mowing, aeration and fertilization.
Pina Company has the following two temporary differences between its income tax expense and income taxes payable.
2020 2021 2022
Pretax financial income $864,000 $917,000 $909,000
Excess depreciation expense on tax return (30,400) (38,500) (9,800 )
Excess warranty expense in financial income 19,400 10,100 8,300
Taxable income $853,000 $888,600 $907,500
The income tax rate for all years is 20%.
a. Assuming there were no temporary differences prior to 2017, prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2017, 2018, and 2019.
b. Indicate how deferred taxes will be reported on the 2019 balance sheet. Martinezâs product warranty is for 12 months.
c. Prepare the income tax expense section of the income statement for 2019, beginning with the line "Pretax financial income."
Answers
Answer:
multiply ur answer by 0.2 if you want to solve for the income tax rate
Explanation:
