Answer: $682,727.27
Explanation:
Sales price is given as $36.80 per pair and variable costs are $27.60 per pair.
Break Even Point in dollars = Fixed Cost / Contribution margin ratio
Fixed costs = Old fixed costs + increase
= 232,500 + 143,000
= $375,500
Contribution margin = Selling price - Variable cost
Variable costs are to reduce by 40%:
= 36.80 - (27.60 * (1 - 40%))
= $20.24
Contribution margin ratio = Contribution margin / Selling price
= 20.24 / 36.80
= 55%
Break Even Point in dollars = 375,500 / 55%
= $682,727.27
During its first year of operations, Indigo Corporation had credit sales of $3,213,200, of which $361,300 remained uncollected at year-end. The credit manager estimates that $16,880 of these receivables will become uncollectible. Prepare the journal entry to record the estimated uncollectibles. (Assume an unadjusted balance of zero in Allowance for Doubtful Accounts.) (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit LINK TO TEXTLINK TO TEXT INTERACTIVE TUTORIAL INTERACTIVE TUTORIAL Prepare the current assets section of the balance sheet for Indigo Corporation, assuming that in addition to the receivables it has cash of $91,990, merchandise inventory of $189,180, and supplies of $12,580. (List current assets in order of liquidity)
Answer and Explanation:
The journal entry is given below;
Bad debts expense $16,880
To Allowance for doubtful accounts $16,880
(Being the bad debt expense is recorded)
The preparation of the current asset section of the balance sheet is presented below:
Cash $91,990
Accounts receivable $361,300
less:allowance for doubtful accounts-$16,880 $344,420
Merchandise inventory $189,180
Supplies $12,580
total current assets $638,170
Hollyfield Corporation sold a piece of equipment on September 30, 2018 for $201,000 cash. The equipment had been purchased on January 1, 2012 for $450,000. It had an estimated useful life of 10 years and a $50,000 residual value. Hollyfield Corp. has been using the straight-line method of depreciation and has a year-end of December 31st. Compute the gain or loss on disposal.
Answer:
$2,000
Explanation:
the gain or loss on disposal is
Pet Supply purchased some fixed assets two years ago at a cost of $43,800. It no longer needs these assets so it is going to sell them today for $32,500. The assets are classified as five-year property for MACRS. The MACRS rates are 20%, 32% 19.2%, 11.52%, 11.52%, 5.76%, for years 1 to 6, respectively. What is the net cash flow (A-T Salvage Value) from this sale if the firm's tax rate is 35 percent
Answer:
$28,483.4
Explanation:
The computation of the net cash flow is shown below;
Asset cost $43,800
MACRS Rate 0.2 0.32
8760 14016
So total depreciation is
= $8,760 + $14,016
= $22,776
Now
Book Value of the company is
= oriignal value - depreication
= $43,800 - $22,776
= $21,024
And,
Sale price = 32500
So,
Gain is
= $32,500 - $21,024
= $11,476
So,
Tax = 0.35% of 11476
= $4,016
And, finally
Net cashflows is
= Sale price - tax
= $28,483.4
Answer:
The correct solution is "28483".
Explanation:
According to the question,
Given:
Sales price,
= 32500
MARCS rates,
= [tex]43800\times 0.2[/tex]
= [tex]8760[/tex]
Or,
= [tex]43800\times 0.32[/tex]
= [tex]14016[/tex]
Now,
The total depreciation will be:
= [tex]8760+14016[/tex]
= [tex]22776[/tex]
The company's book value will be:
= [tex]Original \ value-Depreciation[/tex]
= [tex]43800-22776[/tex]
= [tex]21024[/tex]
Gain will be:
= [tex]32500-21024[/tex]
= [tex]11476[/tex]
Tax,
= [tex]35\times 11476[/tex]
= [tex]4016[/tex]
hence,
The net cashflows will be:
= [tex]Sale \ price-Tax[/tex]
= [tex]32500-4016[/tex]
= [tex]28483[/tex]
Zoey Bella Company has a payroll of $10,000 for a five-day workweek. Its employees are paid each Friday for the five-day workweek. Journalize the adjusting entry required on December 31, assuming the year ends on a Thursday. If an amount box does not require an entry, leave it blank.
Date Description Post. Ref. Debit Credit
Answer:
Wages Expense debit $8,000
Wages Payable credit $8,000
Explanation:
At the end of December 31, which is a Thursday, workers would have worked 4 days out of a 5-day week, which implies we need to recognize wages for the 4 days because it has been incurred even not yet paid
Wages for 4-days=$10,000*4/5
Wages for 4-days=$8,000
We would debit wages account with $8,000 since an increase in an expense account is a debit entry while wages payable would be credited since it is an increase in liabilities
Ivanhoe Company buys merchandise on account from Metlock Company. The selling price of the goods is $1,290 and the cost of the goods sold is $770. Both companies use perpetual inventory systems.
Journalize the transactions on the books of both companies. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Account Titles and Explanation
Debit
Credit
Ivanhoe
Enter an account title
Enter a debit amount
Enter a credit amount
Enter an account title
Enter a debit amount
Enter a credit amount
Metlock
Enter an account title to record sale of merchandise
Enter a debit amount
Enter a credit amount
Enter an account title to record sale of merchandise
Enter a debit amount
Enter a credit amount
(To record sale of merchandise)
Enter an account title
Enter a debit amount
Enter a credit amount
Enter an account title
Enter a debit amount
Enter a credit amount
Answer and Explanation:
The journal entries are shown below:
Ivanhoe Company
Merchandise Inventory $1,290
Accounts payable $1,290
(Being Merchandice purchased on the account is recorded)
Metlock Company
Accounts Receivable $1,290
Sales $1,290
(Being Merchandise sold on account is recorded)
Cost of goods sold $770
Merchandise inventory $770
(Being the Change in stock for the sale of merchandise is recorded)
g Determine the amount to be added to Allowance for Doubtful Accounts in each of the following cases and indicate the ending balance in each case. a. Credit balance of $370 in Allowance for Doubtful Accounts just prior to adjustment. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as
Answer:
Missing word "is estimated as $8,820. Amount added Ending balance b. Credit balance of $450 in Allowance for Doubtful Accounts just prior to adjustment. Bad debt expense is estimated at 2% of credit sales, which totaled $1,111,000 for the year. Amount added Ending balance"
a. Amount added = Balance as per aging method - Credit balance
Amount added = $8,820 - $370
Amount added = $8,450
So, Amount added = $8,450, Ending balance = $8,820
b. Amount added = 2% * Credit sale
Amount added = 2% * $1,111,000
Amount added = $22,220
Ending balance = $22,220 + $370
Ending balance = $21,850
A five-year note payable would appear on the balance sheet as a(n) a.disclosure in the notes only. b.long-term liability for the entire amount owed. c.current liability for any portion due within one year. d.intangible asset.
Answer: current liability for any portion due within one year
Explanation:
Notes payable are referred to as the written agreements whereby one party agrees to pay the other party a certain amount of money.
It should be noted that on the balance sheet, notes payable will appear as liabilities. In a situation when the amount is due within a year, then it's considered to be current liabilities while it's regarded as a long-term liability when it's more than a year,
It should be noted that a five-year note payable would appear on the balance sheet as current liability for any portion due within one year.
Suppose that Dmitri, an economist from a research institute in Texas, and Frances, an economist from a public television program, are arguing over saving incentives. The following dialogue shows an excerpt from their debate: Frances: I think it's safe to say that, in general, the savings rate of households in today's economy is much lower than it really needs to be to sustain an improvement in living standards. Dmitri: I think a switch from the income tax to a consumption tax would bring growth in living standards. Frances: You really think households would change their saving behavior enough in response to this to make a difference.Because I don't. The disagreement between these economists is most likely due to _____. Depite their differences, with which proposition are two economists chosen at random most likely to agree? A. Employers should not be restricted from outsourcing work to foreign nations. B. Central banks should focus more on maintaining low unemployment than on maintaining low inflation. C. Business managers can raise profit more easily by reducing costs than by raising revenue.
Answer:
Difference in scientific judgementsA. Employers should not be restricted from outsourcing work to foreign nations.Explanation:
The difference in opinion between these two is based on a difference between in scientific judgments because they believe that different things will happen in response to implementing a different form of taxes.
Regardless of what they think in the above regard, these economists are most likely to support the outsourcing of work if it is cheaper to do so because economists generally believe that the most efficient method of production should be undertaken.
Given the accelerated pace of technological change, in combination with deregulation, globalization, and demographic shifts, a firm will only be successful today if its:
a. resource advantage is maintained for a short period of time.
b. internal strengths change with its external environment in a dynamic fashion.
c. resource advantage is not causally ambiguous or socially complex.
d. competitive advantage is derived from static resource or market advantages.
Answer:
Option b. Internal strengths change with its external environment in a dynamic fashion.
Explanation:
The main forces driving industry evolution all over the world are Technology and demand.
Technological change is a form of social and institutional compiled or embedded process. It is limited by their social and economic views. The choices and technologies used are affected by the drive for profit, capital accumulates and investment etc. has compressed greatly as the pace of technological change has also increased or accelerated.
The accelerated pace of technological change, in combination with deregulation, globalization, and demographic shifts, dynamic markets today are the rule. As response, a firm may create, deploy, modify, reconfigure, or upgrade resources so as to give value to customers and/or lower costs.
Types of technological change
1. Incremental innovations:
2. Radical innovations
3. Changes of technology system
4. Changes in the techno-economic paradigm
Complete the following data taken from the condensed income statements for merchandising Companies X, Y, and Z. For those boxes in which you must enter negative numbers use a minus sign.
Company X Company Y Company Z
Net income/(net loss) $30 $_____ $(20)
Sales _____ 1,270 970
Gross profit 245 _____ 525
Operating expenses _____ 525 _____
Cost of goods sold 330 790 _____
Answer:
Company X:
Sales :
= Gross Profit + Cost of goods sold
= 245 + 330
= $575
Operating expenses:
= Gross profit - Net income
= 245 - 30
= $215
Company Y
Gross profit:
= Sales - Cost of goods sold
= 1,270 - 790
= $480
Net income:
= Gross profit - Operating expenses
= 480 - 525
= $(45)
Company Z
Operating expenses :
= Gross profit - Net income
= 525 - (-20)
= 525 + 20
= $545
Cost of goods sold:
= Sales - Gross profit
= 970 - 525
= $445
Suppose that Raphael, an economist from an AM talk radio program, and Susan, an economist from a school of industrial relations, are arguing Over saving incentives. The following dialogue Shows an excerpt from their debate:
Susan: I think it's safe to say that, in general, the savings rate of households in today's economy is much lower than it really needs to be to sustain an improvement in living standards.
Raphael: I think a switch from the income tax to a consumption tax would bring growth in living standards.
Susan: You really think households would change their saving behavior enough in response to this to make a difference? Because I don't.
The disagreement between these economists is most likely due to_____________ . Despite their differences, with which proposition are two economists chosen at random most likely to agree?
a. Rent ceilings reduce the quantity and quality of available housing.
b. Immigrants receive more in government benefits than they contribute in taxes.
c. Having a single income tax rate would improve economic performance.
Answer:
a. Difference in values
b. a. Rent ceilings reduce the quantity and quality of available housing.
Explanation:
The disagreement between these economists is most likely due to difference in values.
Economists are known to disagree a lot with each other and this is down to them having different values and perspectives with regards to several economic decisions. This is why there are different economic theories subscribed to by economists such as Keynesian and New Classical theories.
Despite these disagreements however, there are certain things they would always agree on and one of those is that rent ceilings reduce the quantity and quality of available housing.
The logic behind this is that imposing a rent ceiling would dissuade real estate investors from putting in more money to develop properties because the rent ceiling would limit the returns that they can get.
Supply of real estate would also fall because less investors would go into the market because they would fear being unable to recoup adequate returns on account of the rent ceiling.
ABC and XYZ are all-equity firms. ABC has 1,750 shares outstanding at a market price of $20 a share while XYZ has 2,500 shares outstanding at a price of $28 a share. ABC is acquiring XYZ for $75,000 in cash. The incremental value of the acquisition is $8,000. What is the net present value of acquiring XYZ to ABC
Answer:
the net present value is -$32,000
Explanation:
The computation of the net present value is shown below;
= (Number of oustanding shares × market price per share) + incremental value of acquisition - acquiring value in cash
= (1,750 × $20) + $8,000 - $75,000
= $43,000 - $75,000
= -$32,000
Hence, the net present value is -$32,000
Of the following statements, which best describes a legitimate disadvantage of cost-based pricing:
a. Marginal costs and revenues are difficult to measure
b. Determining the amount a customer is will to pay may require estimation
c. Most cost drivers are not readily available
d. Customers may not be willing to pay the price determined by the procedure
You want to buy a house and will need to borrow $295,000. The interest rate on your loan is 6.37 percent compounded monthly and the loan is for 30 years. What are your monthly mortgage payments?
Answer:
$1,839.45
Explanation:
PV = P * [1-(1+r)^-n / r]
n = 30*12=360 months, r = 6.37%/12 = 0.5308% (monthly)
295,000 = P*[1 - (1+0.005308)^-360 / 0.005308}
295,000 = P * $160.3739
P = $295,000 / $160.3739
P = $1,839.45
So, the monthly mortgage payments is $1,839.45.
The problem of determining what goods and services society should produce: would not exist if government owned all of the resources. exists because we can produce more than we need or want. exists because there are not enough resources to provide all of the goods and services that people want. would not exist if all goods and services were scarce.
Answer:
exists because there are not enough resources to provide all of the goods and services that people want.
Explanation:
Factors of production can be defined as the fundamental building blocks used by individuals or business firms for the manufacturing of finished goods and services in order to meet the unending needs and requirements of their customers.
The four factors of production are;
I. Land: this refers to the natural resources and raw materials extracted from the ground or grown in the soil e.g oil, gold, rubber, cocoa, etc.
II. Labor (working): this is the human capital or workers who are saddled with the responsibility of overseeing and managing all the aspects of production.
III. Capital resources: it includes the physical assets used for production of goods and services such as equipment, money, plant, etc.
IV. Entrepreneurship: it is intellectual capacity required to drive a business and the skills to develop an idea into a money making venture (business).
These four (4) factors of production when combined effectively and efficiently are used for the manufacturing or production of goods and services that meets the unending requirements or needs of the consumers.
However, the problem of determining what goods and services society should produce in order to meet the unending requirements or needs (demands) of consumers, exists because there are not enough resources such as the factors of production to provide all of the goods and services that consumers want.
Pick an organization (public or private) and then choose a particular type of COI that is associated with this type of organization. Sustainability-related COIs are especially encouraged.Locate and describe any laws that are designed to discourage or prevent this type of COI in your country. If there are no laws particular to the type of COI you chose, discuss why this is the case.Locate examples of organizational policies used to also discourage the particular COI and discuss how the main features of the policy around the particular COI.Discuss ways that managers can use both policy and the existing laws in your home country to discourage employees seeking their own interests over that of the employer.In your estimation, do laws and policies help promote ethical behavior? Do you feel that the laws, as they are currently, are sufficient and effective?Finally, suggest ways that the laws and/or policies could be improved to both motivate employees to pursue the interests of their employers, as well as to minimize the costs of employers complying with or enforcing the laws.Written Assignment RequirementsSubmit a written paper which is 3-4 pages in length exclusive of the reference page. The paper should cite sources to support your ideas. Be sure to review the assessment criteria below before beginning your paper. Cite any reference(s) you use in the preparation of your essay using proper APA format. Refer to the UoPeople APA Tutorials in the LRC for help with APA citations.Written Assignment Peer AssessmentIn the unit following the submission of your written assignment, you will peer assess three (3) of your classmates’ assignments according to the instructions found in the Assessment Form. During this peer assessment period, you are expected to provide details in the feedback section of the Assessment Form, indicating why you awarded the grade that you did to your peer. The written assignment grade is comprised of a combination of your submission (90%) and your peer assessments (10%).Written Assignment Peer Assessment RubricFor this assignment, your peers will be evaluating your work with the following criteria.An organization is chosen and a particular conflict of interest is identified.Laws pertaining to the particular COI have been located and described. If no laws are described, reasons are provided.Organizational policies pertaining to the COI are discussed, particularly the main features of the policy.Ways that managers can use both policy and the existing laws in your home country to discourage employees seeking their own interests over that of the employer are discussed.The paper addresses the questions: do laws and policies help promote ethical behavior? Do you feel that the laws, as they are currently, are sufficient and effective?The paper suggests ways that the laws and/or policies could be improved to both motivate employees to pursue the interests of their employers, as well as to minimize the costs of employers complying with or enforcing the laws.Writing Organization and Clarity - the ideas are arranged logically to support the purpose or argument. Ideas presented flow smoothly from one to another and are clearly linked to each other. Writing is clear and it is of high-quality.Written Assignment conforms to the structural requirements including APA style guidelines for references.
Answer:
The akatsuki
Explanation:
Lease Plan Effectively Manages Diversity
The term, glass ceiling, was used to represent an absolute barrier or solid roadblock that prevented women from advancing to higher-level positions. The ceiling resulted in women finding themselves stuck in lower-level jobs, ones that did not have profit and loss responsibility, and jobs with less visibility, power, and influence. This scenario is changing. This case illustrates the impact motivated leadership and changing company policies can have on gender diversity in the workplace. Per the United States Department of Labor, compared to women comprising 21 percent of the workforce in 1920, women comprised nearly half of the workforce in the United States in 2013, making gender diversity issues more and more important. This activity asks you to identify and apply your knowledge of such aspects of diversity.
Read the case below and answer the three questions that follow.
In 2003, the representatives of Lease Plan USA's top customers were mostly women, as was most the company's employees. However, men represented a large majority of top managers at the company, reflecting the old-boys network type culture that dominated the fleet industry. New leadership decided to change this and provided career counseling to women, revised reward systems to focus on performance instead of seniority, and replaced some existing managers. Two years ago, only one of seven top executives were a woman. Now, three of the top eight executives are women.
The company's new chief executive claims that these changes are motivated by strategy rather than political correctness. He says, "Lease Plan doesn't build anything…Our sustainable competitive advantages are people." Lease Plan now also implements a development program catered specifically for female employees. The program includes skills assessments, career guidance, communications, brand building, and panel discussions with female executives from other companies.
Lease Plan’s efforts have yielded very positive results in a short period. For example, a 2006 survey showed that 35 percent of women agreed that "management supports my efforts to manage my career," which was improved the following year to 47 percent. A growing percentage of women also feel that their opportunities are growing—increased to 30 percent from 22 percent.
Gerri Patton, Director of Client Activation, says the program helped her become more confident and outspoken. The 23-year Lease Plan veteran encourages her female subordinates to apply. "I wish I would have done that program 10 or 15 years ago," she says. "There's no telling where I would be...The sky would've been the limit."
After reading the case please answer three multiple questions below:
1) According to Eagly and Carli, and also supported by subsequent data analysis by the textbook authors, women have broken through the glass ceiling. Based on what you have read in the case, which of the following trends in gender diversity appears to be most supported by the outcomes of Lease Plan’s program changes?
Educational attainment—women earned the majority of bachelor’s and master’s degrees from 2006 through 2012.
Increases in seats on boards of directors—in Fortune 550 firms up to 16.6 percent in 2013 from only 9.6 percent in 1995.
Leadership positions—in educational institutions in 2010, women represented 18.7 percent of college presidents and 29.9 percent of board members.
Court Appointments—in federal court in 2013, women received 32 percent and 30 percent respectively of appointments to federal courts of appeals and US district court judge positions.
None of these
2) Which of Thomas’s generic action options for managing diversity is most illustrated in the case?
suppress
isolate
deny
include/exclude
tolerate
3) Based on the information in the case, which of the following barriers and challenges to managing diversity that were identified in the text appear to have been present at Lease Plan?
an unsupportive or hostile work environment
poor career planning
lack diversity in senior management
inaccurate stereotypes
difficulty in balancing career and family issues
Answer:
Lease Plan
1) The trend in gender diversity that appears to be most supported by the outcomes of Lease Plan's program changes is:
Increases in seats on boards of directors—in Fortune 550 firms up to 16.6 percent in 2013 from only 9.6 percent in 1995.
2. Thomas's generic action options for managing diversity that is most illustrated in the case is:
include/exclude
3. Based on the information in the case, the barriers and challenges to managing diversity that were identified in the text that appear to have been present at Lease Plan were:
a. an unsupportive or hostile work environment
b. inaccurate stereotypes
Explanation:
Thomas's include and exclude generic action option emphasizes that more diverse employees should be employed in addition to minority-owned companies being used as vendors. This option makes it possible for embracing and practicing workplace diversity. It creates an open-minded and supportive workplace, encouraging the sharing of information and the integration of behavior to accept and value human differences, thereby overcoming stereotypes.
Trevor heard a burglar entering through a living room window.He grinned as he picked up his gun. Crouching behind the sofa in his darkened home,he ambushed and killed the intruder with several well placed shots.He then added another notch in his trusty side-arm.Trevor most probably:____________
a. has exercised his constitutional right of self-defense.
b. has acted legally,because the shooting took place inside his home.
c. has acted legally if,but only if,the burglar was armed with a gun.
d. is guilty of a homicide,or at least voluntary manslaughter.
Answer: D. guilty of a homicide, or at least voluntary manslaughter.
Explanation:
Homicide is the act whereby a human being kills another person. A homicide can be reckless or accidental. Voluntary manslaughter is when someone else is killed unlawfully such as for self-defense.
Therefore, Trevor most probably be guilty of a homicide, or at least voluntary manslaughter.
Snack food vendors and beer distributors earn some monopoly profits in their local markets but see them slowly erode from various new substitutes. When California voted on legalizing marijuana, which side would you think that California beer distributors were on
Answer: Opposing side
Explanation:
Substitutes to the products offered by monopolies are frowned upon by monopolies because it means that they cannot raise prices whenever they want anymore because people could simply switch to the substitutes.
Substitutes therefore reduce the power of monopolies. Marijuana is a substitute to beer as a recreational product so beer companies would be opposed to it being legalized as it would pose a threat to whatever dominance they have in the recreational sector.
Favaz began business at the start of this year and had the following costs: variable manufacturing cost per unit, $9; fixed manufacturing costs, $60,000; variable selling and administrative costs per unit, $2; and fixed selling and administrative costs, $220,000. The company sells its units for $45 each. Additional data follow.
Planned production in units 10,000
Actual production in units 10,000
Number of units sold 8,500
There were no variances. The net income (loss) under absorption costing is:
a. (7500)
b. 9,000
c. 15,00
d. 18,000
e. Some other amount
Answer:
I think it might be b. 9,000
A bond has a modified duration of 8 and a price of 112,955 calculated using an annual effective interest rate of 6.4%. EMAC is the estimated price of this bond at an interest rate of 7.0% using the first-order Macaulay approximation. EMOD is the estimated price of this bondat an interest rate of 7.0% using the first-order modified approximation.Calculate EMAC - EMOD A. 91 B. 102 C. 116 D. 127 E. 143
Answer:
8.4%
Explanation:
The data is D = 50,000/year, S= $500 per order, H = $0.25 per unit per year. Assume a lead time of 3 days.
Fill in the following table. Write out the formulas you are using.
Annual demand
Holding cost (units per year)
Ordering cost
Ordering quantity (EOQ)
Number of orders per year
Average inventory
Maximum inventory
Reorder level
Length of order cycle
Annual holding cost
Annual ordering cost
Annual Affected Inventory Cost
b. Suppose a mistake was made in the data and the correct data is D = 60,000 per year, S = $400 per order, H = $0.20 per unit per year. Calculate the correct EOQ and affected inventory cost.
c. Now suppose we used the incorrect EOQ (based on the first set of data) instead of the correct EOQ. Calculate the affected inventory cost.
d. Compute the percentage error in the EOQ and in the inventory cost.
e. Moral of the story is that incorrect estimation of costs or demand (does or does not) result in substantial deviation from the optimal cost (circle the right answer).
Answer:
Annual demand 50,000 units
Holding cost $0.25 per year
Ordering Cost $500 per order
EOQ : 14,142
Number of orders per year 4
Average inventory 14,142 units
Maximum inventory 14,500 units
Reorder level 410 units
Length of order cycle 3 days
Annual Holding cost $12,500
Annual ordering cost $2000
Annual affected inventory cost $14,500
Explanation:
EOQ = [tex]\sqrt{\frac{2 * D * S}{H} }[/tex]
EOQ = [tex]\sqrt{\frac{2 * 50000 * 500}{0.25} }[/tex]
EOQ = 14,142 units
Number of Order : Annual demand / EOQ
Number of order : 50,000 / 14,142 = 3.53 or approximately 4
Annual Ordering cost : No. of order * cost per order
Annual ordering cost : 4 * $500 = $2,000
Annual Holding Cost : Demand * Holding cost per unit
Annual holding cost = 50,000 * $0.25 per unit = $12,500
Reorder level : Daily demand * lead time
Reorder level : [ 50000 / 365 ] * 3 = 410 units
Sandhill Warehouse distributes hardback books to retail stores and extends credit terms of 2/10, n/30 to all of its customers. During the month of June, the following merchandising transactions occurred.
June
1 Purchased books on account for $2,575 (including freight) from Catlin Publishers, terms 2/10, n/30.
3 Sold books on account to Garfunkel Bookstore for $1,300. The cost of the merchandise sold was $900.
6 Received $75 credit for books returned to Catlin Publishers.
9 Paid Catlin Publishers in full.
15 Received payment in full from Garfunkel Bookstore.
17 Sold books on account to Bell Tower for $1,150. The cost of the merchandise sold was $750.
20 Purchased books on account for $900 from Priceless Book Publishers, terms 3/15, n/30.
24 Received payment in full from Bell Tower.
26 Paid Priceless Book Publishers in full.
28 Sold books on account to General Bookstore for $1,900. The cost of the merchandise sold was $970. 30 Granted General Bookstore $130 credit for books returned costing $90.
Required:
Journalize the transactions for the month of June for Sandhill Warehouse, using a perpetual inventory system.
Answer:
01-Jun
Dr Inventory $2,575
Cr Accounts Payable $2,575
03-Jun
Dr Accounts Receivable $1,300
Cr Sales $1,300
03-Jun
Dr Cost of goods sold $900
Cr Inventory $900
06-Jun
Dr Accounts Payable $75
Cr Inventory $75
09-Jun
Dr Accounts Payable $2,500
Cr Cash $2,450
Cr Inventory $50
15-Jun
Dr Cash $1,300
Cr Accounts Receivable $1,300
17-Jun
Dr Accounts Receivable $1,150
Cr Sales $1,150
17-Jun
Dr Cost of goods sold $ 750
Cr Inventory $ 750
20-Jun
Dr Inventory $ 900
Cr Accounts Payable $ 900
24-Jun
Dr Cash $1,127
Dr Sales Discounts $ 23
Cr Accounts Receivable $1,150
26-Jun
Dr Accounts Payable $ 900
Cr Cash $873
Cr Inventory $27
28-Jun
Dr Accounts Receivable $1,900
Cr Sales $1,900
28-Jun
Dr Cost of goods sold $970
Cr Inventory $970
30-Jun
Dr Sales Returns & Allowances $130
Cr Accounts Receivable $130
30-Jun
Dr Inventory $90
Cr Cost of goods sold $90
Explanation:
Preparation of the journal entries for the month of June for Sandhill Warehouse, using a perpetual inventory system.
01-Jun
Dr Inventory $2,575
Cr Accounts Payable $2,575
03-Jun
Dr Accounts Receivable $1,300
Cr Sales $1,300
03-Jun
Dr Cost of goods sold $900
Cr Inventory $900
06-Jun
Dr Accounts Payable $75
Cr Inventory $75
09-Jun
Dr Accounts Payable $2,500
($2,575-$75)
Cr Cash $2,450
($2,500-$50)
Cr Inventory $50
($2,500*2%)
15-Jun
Dr Cash $1,300
Cr Accounts Receivable $1,300
17-Jun
Dr Accounts Receivable $1,150
Cr Sales $1,150
17-Jun
Dr Cost of goods sold $ 750
Cr Inventory $ 750
20-Jun
Dr Inventory $ 900
Cr Accounts Payable $ 900
24-Jun
Dr Cash $1,127
($1,150-$23)
Dr Sales Discounts $ 23
($1,150*2%)
Cr Accounts Receivable $1,150
26-Jun
Dr Accounts Payable $ 900
Cr Cash $873
($900-$27)
Cr Inventory $27
(900*3%)
28-Jun
Dr Accounts Receivable $1,900
Cr Sales $1,900
28-Jun
Dr Cost of goods sold $970
Cr Inventory $970
30-Jun
Dr Sales Returns & Allowances $130
Cr Accounts Receivable $130
30-Jun
Dr Inventory $90
Cr Cost of goods sold $90
Truck-Or-Treat specializes in leasing trucks to delivery companies. It is considering adding 25 more trucks to its available stock. Doing so will not change the risk of the company's business. The trucks depreciate over five years under the straight-line depreciation method, all the way to zero. Truck-Or-Treat believes that these newly added trucks would be able to bring the company $220,000 in annual earnings before taxes and depreciation (i.e., sales revenue minus costs of goods sold) for five years. The company is unlevered. It is in 21 percent tax rate bracket. The required annual rate of return on Truck-Or-Treat's unlevered equity is 15 percent. The risk-free rate, e.g., the Treasury bill rate, is 6 percent per year.
Required:
Calculate the maximum price that Truck-or-Treat should be willing to pay for the purchase of the new trucks if it remains an unlevered company. (In other words, what should be the "initial investment" of this unlevered truck project such that the project's NPV equals $0?
Answer:
The maximum price that Truck-or-Treat should be willing to pay for the purchase of the new trucks if it remains an unlevered company is $510,702.49.
Explanation:
Let:
x = Maximum price for the new truck = initial investment = ?
AEBTD = Annual earnings before taxes and depreciation = $220,000
T = Tax rate = 21%, or 0.21
n = Number of years = 5
Since the it is assumed that Truck-or-Treat remains an unlevered company, this implies the required annual rate of return on Truck-Or-Treat's unlevered equity of 15 percent is the relevant rate of return to use.
Therefore, we have:
r = required annual rate of return = 15%, or 0.15
D = Annual depreciation = Maximum price for the new truck / Number of useful years = x / 5 = 0.2x
P = Annual cash flow = ((AEDTD - D) * (1 - T)) + D = ((220000 - 0.2x) * (1 - 0.21)) + 0.2x = ((220000 - 0.2x) * 0.79) + 0.2x = 173,800 - 0.158x + 0.2x = 173,800 - 0.042x
Using the formula for calculating the present value (PV) of an ordinary annuity, we have:
PVP = Present value of annual cash flow = P * ((1 - (1/(1 + r))^n) / r) = (173,800 - 0.042x) * ((1 - (1/(1 + 0.15))^5) / 0.15) = (173,800 - 0.042x) * 3.3521550980114 = 582,604.56 - 0.140790514116479x
For the NPV of this unlevered truck project to be equal to $0, we must have:
x = PVP
That is:
x = 582,604.56 - 0.140790514116479x
Solving for x, we have:
x + 0.140790514116479x = 582,604.56
x(1 + 0.140790514116479) = 582,604.56
x1.140790514116479 = 582,604.56
x = 582,604.56 / 1.140790514116479 = $510,702.49
Therefore, the maximum price that Truck-or-Treat should be willing to pay for the purchase of the new trucks if it remains an unlevered company is $510,702.49.
10. Which of the following is NOT a reason that real GDP is a poor measure of a nation's
economic welfare?
A)Real GDP omits measures of political freedom.
b) Real GDP does not consider the value of people's leisure time.
c) Real GDP does not include the underground economy.
D) Real GDP omits household production.
Answer:
A)Real GDP omits measures of political freedom.
Explanation:
The Real Gross Domestic Product is a measure of all the goods produced in an economy within a year but with changes in price levels triggered by inflation factored in. Political freedom does not affect economic freedom. People may be restricted politically but still, go about their normal economic activities.
Because the Real GDP basically focuses on transactions done in the markets, it might not accurately measure the growth rate because some people conduct illegal businesses underground that are not captured by the government, while some produce their goods at home. Also, leisure time is not factored and it is important because an increase in leisure time will affect time spent in activities that improve the economy.
Compute the future value of a $105 cash flow for the following combinations of rates and times.
a. r = 8%; t = 10 years
b. r = 8%; t = 20 years
c. r = 4%; t = 10 years
d. r = 4%; t = 20 years
Answer:
The answer is
A. $226.69
B. $489.40
C. $155.43
D. $230.07
Explanation:
A.
PV = 105
i = 8%
N = 10years
FV =. ?
Using texas BA II plus
PV -105; I/Y = 8; N = 10; CPT FV= 226.69
Therefore, future value of $105 is $226.69
B.
PV = 105
i = 4%
N = 10years
FV =. ?
Using texas BA II plus
PV -105; I/Y = 8; N = 20; CPT FV= 489.40
Therefore, future value of $105 is $489.40
C.
PV = 105
i = 4%
N = 10years
FV =. ?
Using texas BA II plus
PV -105; I/Y = 4; N = 10; CPT FV= 155.43
Therefore, future value of $105 is $155.43
D.
PV = 105
i = 4%
N = 20years
FV =. ?
Using texas BA II plus
PV -105; I/Y = 4; N = 20; CPT FV= 230.07
Therefore, future value of $105 is $230.07
Assume that a $1,00,000 par value, semiannual coupon U.S. Treasury note with five years to maturity (YTM) has a coupon rate of 5%. The yield to maturity of the bond is 11.00%. Using ths information and ignoring the other costs involved, the value of the T-note is calculated as $773,871.23
Based on this calculation and an understanding of semiannual coupon bonds, complete the following statements:
1. Assuming the interest rates remain constant, the T-notes price is expected to _____________. (Increase or Decrease) Please Explain Why.
2. The T-note described is selling at a ________________. (Premium or Discount) Please Explain Why.
3. When valuing a semiannual coupon bond, the time period N in the present value formula used to calculate the price of the bond is treated in terms of ____________ periods. (Annual, 6 month, 4 month, 12 month)
Answer:
Completing the following statements based on the calculations and an understanding of semiannual coupon bonds:
1. Assuming the interest rates remain constant, the T-notes price is expected to _____________. (Increase or Decrease).
The reason for the increase in the T-notes price is the addition of the amortization for the 6-month period of $17,563.
2. The T-note described is selling at a ________________. (Premium or Discount)
The T-note sells at a discount because the face value is greater than the price. This implies that at the end of the maturity period of 5 years, the amount that will be received or paid is $1,000,000 and not the price that was initially received or paid.
3. When valuing a semiannual coupon bond, the time period N in the present value formula used to calculate the price of the bond is treated in terms of ____________ periods. (Annual, 6 month, 4 month, 12 month)
Semiannual = 6 months (12/2).
Explanation:
a) Data anc Calculations:
Face value of semiannual coupon U.S. Treasury note = $1,000,000
T-note price = $773,871.23
Discount on the note = $226,128.77 ($1,000,000 - $773,871.23)
Maturity period = 5 years
Coupon rate = 5%
Yield rate = 11%
Semiannual coupon payment = $25,000 ($1,000,000 * 2.5%)
Semiannual interest expense = $42,563 ($773,871.23 * 5.5%)
Amortization of discount = $17,563 ($42,563 - $25,000)
Feldpausch Corporation has provided the following data from its activity-based costing system: Activity Cost Pool Total Cost Total Activity Assembly $1,372,578 61,800 machine-hours Processing orders $63,235 2,010 orders Inspection $151,316 2,090 inspection-hours The company makes 600 units of product W26B a year, requiring a total of 1,200 machine-hours, 78 orders, and 34 inspection-hours per year. The product's direct materials cost is $49.55 per unit and its direct labor cost is $12.44 per unit. The product sells for $128.70 per unit. According to the activity-based costing system, the product margin for product W26B is:_____.a. $8,458.52.b. $10,920.12.c. $40,026.00.d. $10,912.40.
Answer:
The correct answer is A.
Explanation:
First, we need to calculate the activities rates:
Assembly= 1,372,578/61,800= $22.21 per machine-hour
Processing orders= 63,235/2,010= $31.46 per order
Inspection= 151,316/2,090= $72.4 per inspection-hour
Now, we allocate costs to W26B:
Assembly= 22.21*1,200= 26,652
Processing orders= 31.46*78= 2,453.88
Inspection= 72.4*34= 2,461.6
Total allocated costs= $31,567.48
Finally, the unitary cost and margin for W26B:
Unitary allocated cost= 31,567.48/600= $52.61
Unitary total cost= 49.55 + 12.44 + 52.61= $114.6
Product margin= 128.7*600 - 114.6*600= $8,460
US Corp. is charged with determining which small projects should be funded. Along with this assignment, she has been granted the use of $15,000 for a maximum of two years. She is considering three projects. Project A costs $7,500 and has cash flows of $4,000 a year for Years 1 to 3. Project B costs $8,000 and has cash flows of $3,000, $4,000, and $3,000 for Years 1 to 3, respectively. Project C costs $2,000 and has a cash inflow of $2,500 in Year 2. What decisions should she make regarding these projects if she assigns them a mandatory discount rate of 8.5 percent
Answer:
Project A and C given a budgetary constraint of $15,000.Pick all projects if there was not constraint as they all have positive NPVs.Explanation:
Find the NPVs of the various projects.
Project A:
= Present value of inflows - Cost
= 4,000 / 1.085 + 4,000 / 1.085² + 4,000 / 1.085³ - 7,500
= $2,716.09
Project B:
= 3,000 / 1.085 + 4,000 / 1.085² + 3,000 / 1.085³ - 8,000
= $511.52
Project C:
= 2,500 / 1.085² - 2,000
= $123.64
Seeing as she has only $15,000 to embark on projects, she should pick projects A and C.
Project A should be picked because it has the highest NPV and Project C should be picked because it can still be invested in after Project A given budgetary constraints.
Flexible Budgeting
At the beginning of the period, the Fabricating Department budgeted direct labor of $9,280 and equipment depreciation of $2,300 for 640 hours of production. The department actually completed 600 hours of production. Determine the budget for the department, assuming that it uses flexible budgeting.
Flexible Budgeting
At the beginning of the period, the Grinding Department budgeted direct labor of $55,200 and property tax of $30,000 for 2,400 hours of production. The department actually completed 2,900 hours of production. Determine the budget for the department, assuming that it uses flexible budget.
Answer:
Results are below.
Explanation:
Giving the following information:
The flexible budget is adapting the standard costs to the actual quantity.
Fabricating Department:
Depreciation= $2,300
Standard hourly rate= 2,300/640= $3.594
The department completed 600 hours of production.
Actual budget:
Depreciation= 2,300
Direct labor= 3.594*600= 2,156.4
Total cost= $4,456.4
Grinding Department:
Property tax= $30,000
Standard hourly rate= 55,200/2,400= $23
The department completed 2,900 hours of production.
Actual budget:
Property tax= $30,000
Direct labor= 23*2,900= 66,700
Total cost= $96,700
