Cully Furniture buys two products for resale: king beds (K) and queen beds (Q). Each king bed costs $500 and requires 100 cubic feet of storage space, and each queen bed costs $250 and requires 80 cubic feet of storage space. The company has $80,000 to invest in shelves this week, and the warehouse has 30,000 cubic feet available for storage. Profit for each king bed is $400 and for each queen bed is $200. 1). (10’) Please set up the LP model for the above situation.2). (20’) How many king beds (K) and how many queen bed (Q) should be purchased at optimal? 3). (10’) Whether we have slack or surplus variable applicable in this question? If we do, what is the value of slack (or/and surplus) variable? What is the meaning behind it?4). (10’) If the furniture company purchases no king beds and 300 queen beds, which resources will be completely used (at capacity)?

Answers

Answer 1

Answer:

1) 500K + 250Q ≤ 80,000

  100K+80Q≤ 30,000

K≥0

Q≥0

P= 400K + 200Q

2) zero king beds and 320 queen beds

or zero queen beds and 160 king beds

3) surplus variable

surplus variable is storage space

values of surplus variable is 14,000 cubic feet if zero queen beds and 160 king beds

value of surplus variable is 4,400 cubic feet if zero king beds and 320 queen beds.

surplus is the extra amount available after all resources have been utilized to theri maximum.

4) none of the resources will be completely used. There will be surplus of both

Explanation:

1) Implicit variables: K≥0 ;   Q ≥ 0

Explicit variables:

500K + 250Q ≤ 80,000-------------------------- from investment constraint

  100K+80Q≤ 30,000 ---------------------- from storage space constraint

LP:  P= 400K + 200Q

2) See the attachment for profit maximization graph

3) From graph in the attachment, it can be inferred that storage space is the surplus variable since graph of that equation lies completely outside of optimal area.

Also,

if K=160 and Q=0, the inequality of investment gives

500(160) + 250(0)= 80,000

if K=0 and Q=320, the inequality of investment gives

500(0)+ 250(320) =80,000

if K=0 and Q = 320, the inequality of space gives

100(0) + 80(320)= 25,600

surplus= 30,000- 25,600= 4,400

if K=160 and Q=0, the inequality of space gives

100(160) +250(0)= 16000

surplus= 30000-16000= 14000

4) K=0 and Q=300

investment inequality gives

500(0) + 250(300) ≤ 80,000

75,000≤ 80,000

space inequality gives

100(0) + 80(300) ≤ 30,000

24,000≤ 30,000

Both space and investment are in surplus

Cully Furniture Buys Two Products For Resale: King Beds (K) And Queen Beds (Q). Each King Bed Costs $500

Related Questions

i. Discuss the rationale of organizing an industrial strike in resolving employee dispute with the
state, focusing on the detrimental effects strikes has on various stakeholders in an economy.

Answers

Answer: The answer is provided below

Explanation:

Strike action, is a work stoppage, that is caused by mass refusal of employees to work and it usually takes place in response to the employee grievances.

Some of the reasons for strike include:

• Low wages: Employees engage in strik as a way to show their grievances to their employers that they're not well paid and want a pay rise.

• Poor communication with the organisation: Another reason for strikes is the lack of trust between employers and the trade unions. In cases whereby workers believe their employers aren't transparent with them, strike can take place.

• Employee debt: When employees are owed certain amount of money and the employer is not doing anything reasonable about paying, the workers may strike.

• Working conditions: Workers can engage in strike in order to seek for improvement in their working conditions. This may be probably because they need better equipments, medical facilities etc.

The detrimental effects that strikes has on various stakeholders in an economy are:

Effects on employers: Strike affects business and it is vital for employers to know their rights and keep up to date with the current labour laws and legislation. Strike leads to loss of revenue for the owner and if the strike continues.for a long time, it can badly affect the business.

Effects on employees: Striking employees who belong to a union are under the obligation to strike when the union wants. They can be at risk of losing their wages and benefits such as sick and holiday pay, medical aid insurance if the strike drags continues for an extended period of time.

Effect on the economy: The impact of strike will be felt by the economy in the immediate and long term future. Strike can harm a country’s investment and reputation internationally. The GDP growth will also be affected and consequences of higher wages in some sectors would lead to higher inflation.

g On January 1, you win $50,000,000 in the state lottery. The $50,000,000 prize will be paid in equal installments of $6,250,000 over eight years. The payments will be made on December 31 of each year, beginning on December 31 of this year. If the current interest rate is 12%, determine the present value of your winnings. Use the present value tables in Exhibit 7. Round to the nearest whole dollar. $ Will the present value of your winnings using an interest rate of 12% be more than the present value of your winnings using an interest rate of 5%?

Answers

Answer:

Present value = $31,047,749

No. The present value when the interest rate is 12% is less than the present value when the interest rate is 5%

Explanation:

Present value is the sum of discounted cash flows.

Present value can be calculated using a financial calculator

Cash flow each year from year 1 to 8 = $6,250,000

I = 12%

Present value = $31,047,748.54

Present value when interest rate is 5% = $40,395,079.75

The present value when interest rate is 5% is greater than the present value when interest rate is 12%

To find the NPV using a financial calacutor:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

I hope my answer helps you

Paddle​ Paradise, Inc. sells 2 comma 000 canoes per year at a sales price of $ 470 per unit. It sells in a highly competitive market and uses target pricing. The company has calculated its target full product cost at $ 800 comma 000 per year. Fixed costs are $ 320 comma 000 per year and cannot be reduced. What is the target variable cost per unit assuming units sold are equal to units​ produced

Answers

Answer:

Target unitary variable cost= $240 per unit

Explanation:

Giving the following information:

Sales in units= 2,000

Selling price= $470

Total cost= $800,000 per year

Fixed costs= $320,000 per year.

First, we need to calculate the total variable cost:

Total variable cost= total cost - total fixed costs

Total variable cost= 800,000 - 320,000

Total variable cost= 480,000

Now, we can calculate the target unitary variable cost:

Target unitary variable cost= 480,000/2,000

Target unitary variable cost=$240 per unit

Molly is a 30% partner in the MAP Partnership. During the current tax year, the partnership reported ordinary income of $200,000 before any permitted deduction for guaranteed payments and distributions to partners. The partnership made an ordinary cash distribution of $20,000 to Molly and made guaranteed payments to partners Molly, Amber, and Pat of $20,000 each ($60,000 total guaranteed payments). How much will Molly's adjusted gross income increase as a result of these items

Answers

Answer:

$62,000

Explanation:

The partnership had a total ordinary income of $200,000. Then guaranteed payments were made to its three partners Molly, Amber and Pat of $20,000 each $20,000 x 3 = $60,000.

$200,000 - 60000

= $140,000

So the partnership adjusted income is reduced to $140,000, out of that amount, 30% belongs to Molly.

30/100 × 140,000

= $42,000

Molly's share of the partnership adjusted income is $42,000.

Molly's total earnings from the partnership are $62,000

= $20,000 + $42,000

= $62,000

Andy Anderson is the only supplier of email updates on avalanche conditions in the mountains above the two towns of Vanee and Keno. The marginal cost of producing these updates is zero (with zero fixed costs) and the inverse demand for these updates in Vanee is p = 42-q and p = 9-q in Keno. Suppose that in each of the two towns, all of the demand comes from one customer. Andy cannot identify which customer is which. To get around this, he creates two kinds of packages, one containing 42 updates and one containing 9. He allows his customers to simply buy one and only one of the kind of package that they prefer. What is the maximum price Andy could charge for the large package if he wants the Vanee customer to buy the package of 42 and the Keno customer to buy the package of 9?

Answers

Answer:

Explanation:

He will charge for smaller package Equal to consumer surplus of keno customer with q = 9  

Price of small package = 1 / 2 * 9 * 9

                                       =40.5

If veno willingness to pay for 9 updates is

= 1 / 2 * 9 * 9 + 9 * (42 - 9)

= 40.5 + 9 * 33

= 40.5 + 297 = 337.5

So he will get surplus of (337.5 - 40.5 = 297 by buying smaller package.

Veno willingness to pay for larger package = 1/2 * 42 * 42 = 882

To make veno buy larger package ,andy need to make sure that veno also get same CONSUMERs surplus by buying larger package.

So price for larger package = 882 - 297 = 585

Vaughn Manufacturing purchased the assets of Ivanhoe Company at an auction for $5465000. An independent appraisal of the fair value of the assets is listed below: Land $1795000 Building 2840000 Equipment 2180000 Trucks 3180000 Assuming that specific identification costs are impracticable and that Vaughn allocates the purchase price on the basis of the relative fair values, what amount would be allocated to the Building

Answers

Answer:

$1,552,836

Explanation:

As the auction price is determined for whole company, which includes all the assets in the company. Auction price can be allocated to an asset based on its fair value ratio to total fair value of all assets.

As per given data

Fair Value of Assets

Land            $1,795,000

Building       $2,840,000

Equipment  $2,180,000

Trucks         $3,180,000

Total           $9,995,000

Auction price allocation = (Fair value / Total Fair value of all assets) x Auction price

Placing values in the formula

Building = ( $2,840,000 / $9,995,000) x $5,465,000

Building = $1,552,836

Direct Materials and Direct Labor Variances At the beginning of June, Bezco Toy Company budgeted 10,000 toy action figures to be manufactured in June at standard direct materials and direct labor costs as follows: Direct materials $10,500 Direct labor 4,800 Total $15,300 The standard materials price is $0.7 per pound. The standard direct labor rate is $12 per hour. At the end of June, the actual direct materials and direct labor costs were as follows: Actual direct materials $9,500 Actual direct labor 4,400 Total $13,900 There were no direct materials price or direct labor rate variances for June. In addition, assume no changes in the direct materials inventory balances in June. Bezco Toy Company actually produced 8,800 units during June. Determine the direct materials quantity and direct labor time variances. Round your per unit computations to two decimal places, if required. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Answers

Answer:

Direct material quantity variance = -$260 Unfavorable

Direct labor time variance = -$176 Unfavorable

Explanation:

The computation of the direct materials quantity and direct labor time variances is shown below:-

Direct material quantity variance = (Standard Direct material ÷ Company budgeted × Produced units) - Actual direct material

= ($10,500 ÷ 10,000 × 8,800) - $9,500

= ($1.05 × 8,800) - $9,500

= $9,240 - $9,500

= -$260 Unfavorable

Direct labor time variance = (Standard Direct labor ÷ Company budgeted × Produced units) - Actual direct labor

= ($4,800 ÷ 10,000 × 8,800) - $4,400

= $0.48 × 8,800) - $4,400

= $4,224 - $4,400

= -$176 Unfavorable

Therefore we have applied the above formula.

Market researchers have determined nine categories of lifestyles for computer users. One of the categories is described as "Mouse Potatoes," who like the Internet for entertainment and can't wait to buy the latest in "techno-entertainment." In terms of the diffusion process, how would "Mouse Potatoes" be classified?

Answers

Answer: Innovators.

Explanation:

The Diffusion Process defines how new products are able to spread across a market.

It does this by using the Adoption Process to determine the various groups in the market and how fast the product gets to those groups. There are 5 groups in total.

- Innovators

- Early Adopters

- Early Majority

- Late Majority

- Laggards.

In the above scenario, the Mouse Potatoes would be the Innovators. These are the first buyers of a product and as such their opinions are very important as they then tell others how useful the product is. Mouse Potatoes regularly browse the net looking for the latest in "techno-entertainment", so they can buy or use it first thus making them Innovators.

According to the Core Reading, which of the following is NOT a threat presented by rising income inequality? Select one: a. Higher than optimal tax rates on the rich b. All of these are threats presented by rising income inequality. c. Falling support for globalization d. Unintended consequences of government policies to moderate the effects of stagnant wages e. Falling support for a market-based economy

Answers

Answer:

 Option B          

Explanation:

In simple words, Income inequality refers to the severe imbalance in wealth levels typically in the possession of a limited minority of a community with a large accumulation of wealth.

If wealth disparity exists, there is indeed a wide difference in the resources of one group of the society and that of another. Specific forms of discrimination and study of wage differences should be used to explain economic inequality.                      

          Thus, from the above we can conclude that the correct option is B .

Flowrider is an indoor surfing wave company. In order to expand its customer base and bring more surfers into the pools and facilities that offer Flowrider experiences, Flowrider decides it needs to offer a short-term incentive for people to stop by and try the experience. Because the ride is usually on the more expensive side, Flowrider offers a 25% discount for anyone with a specific coupon for the next 30 days. The coupon is delivered through email, text, and a newspaper insert. What type of marketing tool did Flowrider use to entice people to try their product

Answers

Answer: C. sales promotion

Explanation:

Flowrider used coupons which are quite a popular method of Sales Promotion. Sales Promotion refers to strategies used to increase sales such as discounts and sampling.

Coupons are a type of discount as shown in the question that allow for customers to receive discounts on purchased goods if they have said coupons. As they are a discount and are meant to increase sales, they are a method of Sales Promotion.

Analysis reveals that a company had a net increase in cash of $22,750 for the current year. Net cash provided by operating activities was $20,500; net cash used in investing activities was $11,250 and net cash provided by financing activities was $13,500. If the year-end cash balance is $27,750, the beginning cash balance was: Multiple Choice $5,000. $17,750. $50,500. $45,500. $44,500.

Answers

Answer:

The correct answer = $5,000

Explanation:

First of all, let us find the difference between the total cash provided and the total cash used up within the period:

Total cash provided = operating activities + financing activities

Total cash provided = 20,500 + 13,500 = $34,000

Total cash used up = investing activities = $11,250

Retained balance from the activities of the period = Total cash provided - Total cash used up

= 34,000 - 11,250 = $22,750

Retained balance from the activities of the period = $22,750

However, we are told that the year-end cash balance = $27,750. This means that the excess cash on the retained balance from operating activities within the period is from the beginning cash balance, and this is calculated as follows:

year-end cash balance = Retained balance from the activities  + beginning cash balance

27,750 = 22,750 + beginning cash balance

∴ beginning cash balance = 27,750 - 22,750 = $5,000

∴ beginning cash balance = $5,000

Which of the following statements is FALSE? Group of answer choices The right discount rate for a cash flow is the rate of return available in the market on other investments of comparable risk and term. To compensate for the risk that they will receive less than promised if the firm defaults, investors demand a lower interest rate than the rate on U.S. Treasuries. The equivalent after-tax interest rate is r(1 - τ). The actual cash flow that the investor will get to keep will be reduced by the amount of any tax payments.

Answers

Answer:

To compensate for the risk that they will receive less than promised if the firm defaults, investors demand a lower interest rate than the rate on U.S. Treasuries.

Explanation:

Investors are risk averse, this means that they will always prefer those investments with lower risks. Since US treasuries are considered the safest investments,  they are used to calculate the risk free rate.

When investors invest in other securities (not US government) they will always demand a higher return because a private entity or even a state or local government can default on a their debt. That difference between the return yielded by a US security and the return from any other investment is called the risk premium.

The stock of Cooper Corporation is​ 70% owned by Carole and​ 30% owned by​ Carole's brother, Chris. During​ 2017, Chris transferred property​ (basis of​ $100,000 and FMV of​ $120,000) as a contribution to the capital of Cooper. During February​ 2018, Cooper adopted a plan of liquidation and subsequently made a pro rata distribution of the property back to Carole and Chris. At the time of the​ liquidation, the property had an FMV of​ $80,000. What amount of loss can be recognized by Cooper on the distribution of​ property?

Answers

Answer:

$0

Explanation:

Since 100% of Cooper Corporation's stock were owned by Carole and Chris (who are siblings), then no one can recognize any loss or gain from the contribution of property (nor the distribution of property). Under section 351, no gain or loss can be recognized for the contribution of property in exchange for stocks in a controlled corporation.

Since the contribution was made through a carryover basis transaction less than 5 years before the liquidation, the distribution is carried out in the same way.

Goshford Company produces a single product and has capacity to produce 105,000 units per month. Costs to produce its current sales of 84,000 units follow. The regular selling price of the product is $126 per unit. Management is approached by a new customer who wants to purchase 21,000 units of the product for $77.40 per unit. If the order is accepted, there will be no additional fixed manufacturing overhead and no additional fixed selling and administrative expenses. The customer is not in the company’s regular selling territory, so there will be a $7.60 per unit shipping expense in addition to the regular variable selling and administrative expenses. Per Unit Costs at 84,000 Units Direct materials $ 12.50 $ 1,050,000 Direct labor 15.00 1,260,000 Variable manufacturing overhead 14.00 1,176,000 Fixed manufacturing overhead 17.50 1,470,000 Variable selling and administrative expenses 14.00 1,176,000 Fixed selling and administrative expenses 13.00 1,092,000 Totals $ 86.00 $ 7,224,000 Calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $77.40 per unit.

Answers

Answer:

Net income= $4,836,200

Explanation:

Giving the following information:

Offer:

21,000 units for $77.4

An increase in variable cost= $7.6 per unit

Direct materials $ 12.50 $ 1,050,000

Direct labor 15.00 1,260,000

Variable manufacturing overhead 14.00 1,176,000

Fixed manufacturing overhead 17.50 1,470,000

Variable selling and administrative expenses 14.00 1,176,000

Fixed selling and administrative expenses 13.00 1,092,000

Totals $ 86.00 $ 7,224,000

First, we need to calculate the effect on the income of accepting the offer:

Effect on income= 21,000*77.4 - 21,000*(12.5 + 15 + 14 + 14 + 7.6)

Effect on income= 1,625,400 - 1,325,100

Effect on income= 300,300

Net income= 84,000*140 + 300,300 - 7,224,000

Net income= $4,836,200

Pricing Strategy, Sales Variances Eastman, Inc., manufactures and sells three products: R, S, and T. In January, Eastman, Inc., budgeted sales of the following. Budgeted Volume Budgeted Price Product R 125,900 $26 Product S 156,500 22 Product T 22,500 21 At the end of the year, actual sales revenue for Product R and Product S was $3,220,000 and $3,358,000, respectively. The actual price charged for Product R was $25 and for Product S was $20. Only $11 was charged for Product T to encourage more consumers to buy it, and actual sales revenue equaled $645,150 for this product. Required: 1. Calculate the sales price and sales volume variances for each of the three products based on the original budget. Sales price variance Sales volume variance Product R $ $ Product S $ $ Product T $ $ 2. Suppose that Product T is a new product just introduced during the year. What pricing strategy is Eastman, Inc., following for this product? Check My Work

Answers

Answer:

Check the explanation

Explanation:

Sales price variance = (Actual price - Budgeted price) * Actual units sold

Product R : ($25 - $26) * 123000 = $123000 unfavorable

Product S:($20 - $22) * 162700 = $325400 unfavorable

Product T: ($10 - $20) * 54000 = $540000 unfavorable

Sales volume variance = (Actual units - Budgeted units) * Standard price

Product R : (120000 - 123000) * 26 = $78000 favorable

Product S:(150000 - 162700) * 22 = $279400 favorable

Product T: (20000 - 54000) * 20 = $680000 favorable

Notes:

Actual units:

Product R = $3075000/ $25 = 123000

Product S = $3254000/$20 = 162700

Product T = $540000/$10 = 54000 units

With your team you are working on a project that is supposed to be completed in FOUR months. You planned that EACH MONTH you are going to spend $15000 on the work for the month. At the end of the FIRST month you have spent the expected amount of $15000, but you have completed only two thirds (2/3) of the work. Answer the following questions: a) What is the Earned Value at the end of the first month. b) Calculate the Cost Variance and the Schedule Variance c) Calculate the Cost Performance Index and the Schedule Performance Index d) Analyze the progress of the project. Is the project behind or on schedule

Answers

Answer:

(a). $10000.

(b). Cost variance and Scheduled variance = -$5000.

(c). 0.66 and 0.66.

(d). task is behind schedule and the task is over budget.

Explanation:

(a). Earned value at the end of the first month can be calculated by using the formula below;

= A × B.

Where A = first month budget and B = rate at which the work is getting completed.

Earned value at the end of the first month = 15000× (2/3)

Earned value at the end of the first month = $10000

(b). The Cost Variance and the Schedule Variance can be calculated using the formula below;

Cost variance = Earned value at the end of the first month - monthly budget

Cost variance= 10000 - 15000

Cost variance = -$5000

Also, the Scheduled variance = Earned value at the end of the first month - monthly budget

= 10000 - 15000

= - $5000

(c). The cost Performance Index and the Schedule Performance Index can be calculated by using the formula below;

Cost performnace index = 10000 / 15000

= 0.66

Schedule performance index = the amount Earned / the amount that was planned.

Schedule performance index = 10000 / 15000

= 0.66.

(d). Since both schedule performance index and the Cost performance index are less than one that is 0.66, task is behind schedule and the task is over budget respectively.

Bramble Inc., which produces a single product, has prepared the following standard cost sheet for one unit of the product. Direct materials (6 pounds at $3.10 per pound) $18.60 Direct labor (4 hours at $10.00 per hour) $40.00 During the month of April, the company manufactures 190 units and incurs the following actual costs. Direct materials purchased and used (2,200 pounds) $7,260 Direct labor (770 hours) $7,623 Compute the total, price, and quantity variances for materials and labor. Total materials variance $ Materials price variance $ Materials quantity variance $ Total labor variance $ Labor price variance $ Labor quantity variance $ Click if you would like to Show Work for this question: Open Show Work LINK TO TEXT LINK TO TEXT

Answers

Answer and Explanation:

a. The computation of the material price variance is shown below:

= Actual Quantity × (Standard Price - Actual Price)

= $7,260 × (2,200 pounds × $3.10 per pound)

= $440 unfavorable

b. The computation of the material quantity variance is shown below:

= Standard Price × (Standard Quantity - Actual Quantity)

= $3.10 × (2,200 pounds - (190 units × 6 pounds))

= $3,286 unfavorable

c. Total material variance  

= Material price variance + material quantity variance

= $440 unfavorable + $3,286 unfavorable

= $3,726 unfavorable

d. The computation of the labor price variance is shown below:

= Actual Hours × (Actual price - Standard Price)  

= $7,623 -  (770 hours × $10)

= $77 favorable

e. The computation of the labor quantity variance is shown below:

= Standard Rate × (Actual Hours - Standard hours allowed for actual units)

= $10 × (770 hours - (190 units × 4 hours)

= $100 unfavorable

Total labor variance

= Labor rate variance + labor quantity variance

= $77 favorable + 100 unfavorable

= $23 unfavorable

Monte Services, Inc. is trying to establish the standard labor cost of a typical brake repair. The following data have been collected from time and motion studies conducted over the past month. Actual time spent on the brake repairs 5 hours Hourly wage rate $12 Payroll taxes 20% of wage rate Setup and downtime 11% of actual labor time Cleanup and rest periods 27% of actual labor time Fringe benefits 25% of wage rate Determine the standard direct labor hours per brake repairs.

Answers

Answer:

=7:30hours

Explanation:

Standard direct labor hours per brake repair

= 5 Hours+(5*11%+5*27%)

=5 Hours + (0.55 hours + 1.35hours)

=7:30hours

Lynch Company manufactures and sells a single product. The following costs were incurred during the company’s first year of operations: Variable costs per unit: Manufacturing: Direct materials $6Direct labor $9Variable manufacturing overhead $3Variable selling and administrative $4Fixed costs per year: Fixed manufacturing overhead$300,000Fixed selling and administrative$190,000 During the year, the company produced 25,000 units and sold 20,000 units. The selling price of the company’s product is $50 per unit. Required:1. Assume that the company uses absorption costing:a. Compute the unit product cost.b. Prepare an income statement for the year.2. Assume that the company uses variable costing:a. Compute the unit product cost.b. Prepare an income statement for the year.

Answers

Answer:

Instructions are below.

Explanation:

Giving the following information:

Variable costs per unit:

Direct materials $6

Direct labor $9

Variable manufacturing overhead $3

Variable selling and administrative $4

Fixed costs per year:

Fixed manufacturing overhead$300,000

Fixed selling and administrative $190,000

During the year, the company produced 25,000 units and sold 20,000 units.

The selling price of the company’s product is $50 per unit.

The difference between the absorption costing and variable costing methods is that the first one includes the fixed manufacturing overhead to the product cost.

1) Absorption costing:

Unitary fixed overhead= 300,000/25,000= $12 per unit

Unitary product cost= 6 + 9 + 3 + 12= $30

Income statement:

Sales= 20,000*50= 1,000,000

COGS= (20,000*30)= (600,000)

Gross profit= 400,000

Total selling and administrative= (190,000 + 20,000*4)= (270,000)

Net income= 130,000

2) Variable costing method:

Unitary variable cost= 6 + 9 + 3= $18

Income statement:

Sales= 1,000,000

Variable cost= (20,000*22)= (440,000)

Contribution margin= 560,000

Fixed manufacturing overhead= (300,000)

Fixed selling and administrative= (190,000)

net income= 70,000

Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 6.90 pounds $ 2.60 per pound $ 17.94 Direct labor 0.30 hours $ 7.00 per hour $ 2.10 During the most recent month, the following activity was recorded: 19,250.00 pounds of material were purchased at a cost of $2.40 per pound. All of the material purchased was used to produce 2,500 units of Zoom. 450 hours of direct labor time were recorded at a total labor cost of $4,500. Required: 1. Compute the materials price and quantity variances for the month. 2. Compute the labor rate and efficiency variances for the month.

Answers

Answer:

1. Material Variances

Material Price Variance = $3,850 F

Material Quantity Variance = $5,200 U

2. Labor Variances

Labor Rate Variance = $1,350 U

Labor Efficiency Variance = $2,100 F

Explanation:

Calculation is as follows:

1. Material Variances

Material Price Variance = (Standard Price - Actual Price) x Actual units

Material Price Variance = ($2.60 - $2.4) x 19,250 pounds

Material Price Variance = $3,850 (favorable)

As the actual rate is less than standard rate the variance is favorable.

Standard Quantity = 2,500 x 6.9 = 17,250 pounds

Material Quantity Variance = (Standard Quantity - Actual Quantity) x Standard Rate

Material Quantity Variance = (17,250 - 19,250) x $2.60

Material Quantity Variance = $5,200 (Unfavorable)

As the actual raw material quantity used is higher than standard raw material quantity the variance is unfavorable.

2. Labor Variances

Actual Labor Rate = 4,500/450 = $10/hour

Labor Rate Variance = (Standard Rate - Actual Rate) x Actual Hours

Labor Rate Variance = ($7 - $10) x 450

Labor Rate Variance = $1,350 (Unfavorable)

As actual rate is higher than standard rate thus the variance is unfavorable.

Standard Hours = 2,500 x 0.3 = 750

Labor Efficiency Variance = (Standard Hours - Actual Hours) x Standard Rate

Labor Efficiency Variance = (750 - 450) x $7

Labor Efficiency Variance = $2,100 (Favorable)

As the Standard Hours is more than Actual Hours the variance is favorable.

Answer:

Check the explanation

Explanation:

Kindly check the attached image below to see the step by step explanation to the question above.

In the market for lock washers, a perfectly competitive market, the current equilibrium price is $5 per box. Washer King, one of the many producers of washers, has a daily short-run total cost given by TC = 190 + 0.20Q + 0.0025Q2, where Q measures boxes of washers. Washer King's corresponding marginal cost is MC = 0.20 + 0.005Q. How many boxes of washers should Washer King produce per day to maximize profit?

Answers

Answer:

The number of boxes of washers Washer King should produce per day to maximize profit = 960 boxes.

And the corresponding maximum daily profit = $2,114

Explanation:

The daily, short-run total cost of producing Q boxes of the product is given as

TC = 190 + 0.20Q + 0.0025Q²

The unit price of the product = $5.

Total revenue = (Unit Price) × (Quantity sold) = 5Q

Profit = (Revenue) - (Total Cost)

Profit = 5Q - (190 + 0.20Q + 0.0025Q²)

Profit = P(Q) = -190 + 4.8Q - 0.0025Q²

To maximize the profits, we just obtain the point where the profit function reaches a Maximum.

At the maximum of a function, (dP/dQ) = 0 and (d²P/dQ²) < 0

Profit = P(Q) = -190 + 4.8Q - 0.0025Q²

(dP/dQ) = 4.8 - 0.005Q

At maximum point,

(dP/dQ) = 4.8 - 0.005Q = 0

Q = (4.8/0.005) = 960 boxes

(d²P/dQ²) = -0.005 < 0 (hence, showing that the this point corresponds to a maximum point truly)

Hence, the number of boxes of washers Washer King should produce per day to maximize profit = 960 boxes.

The corresponding maximum profit is then obtained from

P(960) = -190 + (4.8×960) - 0.0025(960²)

Maximum daily profit = $2,114

Hope this Helps!!!

On March 1 the price of a commodity is $1,000 and the December futures price is $1,015. On November 1 the price is $980 and the December futures price is $981. A producer of the commodity entered into a December futures contracts on March 1 to hedge the sale of the commodity on November 1. It closed out its position on November 1. What is the effective price (after taking account of hedging) received by the company for the commodity

Answers

Answer:

$1,014

Explanation:

The computation of effective price received by the company for the commodity is shown below:-

Here for computing the Effective price received first we need to find out the profit on future contract which is here below:-

Profit on future contract = Futures prices of Nov 1 - Dec Future prices Dec

= $1015 - $981

= $34

Effective price received = November Price + Profit on future contract

= $980 + $34

= $1,014

The effective price (after taking account of hedging) received by the company for the commodity is $1,014.

First step

Future contract profit:

Future contract profit= $1015 - $981

Future contract profit= $34

Second step

Effective price :

Effective price = $980 + $34

Effective price= $1,014

Inconclusion the effective price (after taking account of hedging) received by the company for the commodity is $1,014.

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argaryen Corporation has a target capital structure of 70 percent common stock, 5 percent preferred stock, and 25 percent debt. Its cost of equity is 10 percent, the cost of preferred stock is 5 percent, and the pretax cost of debt is 6 percent. The relevant tax rate is 23 percent.a. What is the company’s WACC?

Answers

Answer:

WACC =  8.41%

Explanation:

The weighted Average cost of Capital is the average cost of capital for the different sources of long-term capital available to a firm weighted according to the proportion each source of finance bears to the total capital in the pool..

After-tax cost of debt = (1- tax rate) × before tax cost of debt

                                   = (1-0.23)×  6% = 4.6%

Type                         Cost (%)               Weight               cost × weight

Equity                          10                          70                           7

Preferred stock          5                            5                             0.25

Debt                            4.6%                       25                          1.155

Total                                                       100                              8.405

WACC =  8.405 / 100   ×  100 = 8.41%

WACC =  8.41%

Gilberto Company currently manufactures 50,000 units per year of one of its crucial parts. Variable costs are $2.00 per unit, fixed costs related to making this part are $50,000 per year, and allocated fixed costs are $40,000 per year. Allocated fixed costs are unavoidable whether the company makes or buys the part. Gilberto is considering buying the part from a supplier for a quoted price of $3.20 per unit guaranteed for a three-year period. Calculate the total incremental cost of making 50,000 and buying 50,000 units. Should the company continue to manufacture the part, or should it buy the part from the outside supplier

Answers

Answer:

Net incremental cost of buying   (10,000). \

Gilberto Company should produced the parts internally . Doing so would saving its $10,000 per year

Explanation:

The relevant cash flow from the accepting the offer of the outside suppliers include

Extra variable cost of buying

Savings in direct fixed manufacturing overhead

Unit variable cost of making: =$2  

                                                                                                       $

Variable cost of external purchase ($3.2× 50,000)              160,000  

Variable cost of making ($2× 50,000)                                   (100,000 )

Extra variable cost of buying                                                   (60,000 )

Savings in direct fixed cost                                                      50,000

Net incremental cost of buying                                             (10,000)

On December 31, 2019, Irey Co. has $3,000,000 of short-term notes payable due on February 14, 2020. On February 8, 2020, Irey borrowed $1,200,000 (long-term loan) from County Bank and used $1,000,000 additional cash to liquidate $2,200,000 of the short-term notes payable. The amount of the short-term notes payable that should be reported as current liabilities on the December 31, 2019 balance sheet which is issued on March 5, 2020 is

Answers

Answer:

$1,800,000

Explanation:

Given short term notes payable = $3,000,000

Total amount used to liquidate short term notes = $2,200,000

Balance = $3,000,000 - $2,200,000 = $800,000

The additional $1,200,000 which is borrowed from Country Bank will not increase the short term notes payable because it's a long term credit

The additional $1,000,000 cash used will now be added to the balance amount

Amount to be reported as current liabilities = $1,000,000 + $800,000

= $1,800,000

Therefore the amount of the short-term notes payable that should be reported as current liabilities on the December 31, 2019 balance sheet which is issued on March 5, 2020 is $1,800,000

g The December 31, 2021, adjusted trial balance for the Blueboy Cheese Corporation is presented below. Account Title Debits Credits Cash 41,500 Accounts receivable 305,000 Prepaid rent 10,500 Inventory 45,000 Office equipment 550,000 Accumulated depreciation 230,000 Accounts payable 62,000 Notes payable (due in six months) 45,000 Salaries payable 7,000 Interest payable 1,500 Common stock 400,000 Retained earnings 125,000 Sales revenue 700,000 Cost of goods sold 420,000 Salaries expense 105,000 Rent expense 31,500 Depreciation expense 55,000 Interest expense 3,000 Advertising expense 4,000 Totals 1,570,500 1,570,500 Required: 1-a. Prepare an income statement for the year ended December 31, 2021. 1-b. Prepare a classified balance sheet as of December 31, 2021. 2. Prepare the necessary closing entries at December 31, 2021.

Answers

Answer:

Check the explanation

Explanation:

The right choice is Income summary account, since that is not in the account, closing entries can be in the following ways,

Alternative 1, one combined entry with balancing figure as retained earnings,

Date General Journal      Debit         Credit

Dec 31 Sales revenue   $7,60,000  

Cost of goods sold                                     $4,56,000

Salaries expense                                          $1,14,000

Rent expense                                                 $40,500

Depreciation expense                                   $62,000

Interest expense                                             $4,400

Advertising expense                                      $5,400

Retained Earnings                                          $77,700

Alternative 2, Transfer of Revenue and expenses separately to Retained Earnings

Date General Journal           Debit                   Credit

Dec 31 Sales revenue        $7,60,000  

Retained Earnings                                                $7,60,000

Dec 31 Retained Earnings    $6,82,300  

Cost of goods sold                                               $4,56,000

Salaries expense                                                    $1,14,000

Rent expense                                                          $40,500

Depreciation expense                                            $62,000

Interest expense                                                    $4,400

Advertising expense                                             $5,400

Selected information from Herisau Corporation's accounting records and financial statements for 2021 is as follows ($ in millions): Cash paid to retire notes $ 90 Common shares acquired for treasury 150 Proceeds from issuance of preferred stock 210 Proceeds from issuance of subordinated bonds 270 Cash dividends paid on preferred stock 75 Cash interest paid to bondholders 105 In its statement of cash flows, Herisau should report net cash inflows from financing activities of:

Answers

Answer:

$165

Explanation

The net cash flows from financing activities is the difference between the cash inflows received from finance providers and cash outflows paid to them as shown below:

Net cash flow from financing activities=proceeds from preferred stock+proceeds from subordinated bonds-cash paid for common stock retirement-cash dividends-cash paid to retire notes

Net cash flow from financing activities=$210+$270-$150-$75-$90=$165

Assume you are going to receive a payment of $1,000 in 5 years. You'd like to know what that cash flow would be worth in 2 years. To calculate the answer, you use the given interest rate to obtain an equivalent cash flow expressed in year 2 dollars. This is an example of calculating a...

Answers

Answer:

The multiple choices are as follows:

Group of answer choices:

A. Present Value

B. Future Value

C. Discounted Value

D. Annuity

E. Lump Sum

The correct option is C,discounted value

Explanation:

The worth of the cash flow which is $1,000 is given with reference to the worth in 5 years' terms,hence restating the cash flow to its worth in two years' time is discounting to its two years' worth.

The answer cannot be present value since the cash flow is not being discounted to today's equivalent amount.

Also,future value is not correct since future value of $1,000 is already provided in the question

Great Adventures Problem
[The following information applies to the questions displayed below.]
Tony and Suzie see the need for a rugged all-terrain vehicle to transport participants and supplies. They decide to purchase a used Suburban on July 1, 2022, for $15,600. They expect to use the Suburban for five years and then sell the vehicle for $6,300. The following expenditures related to the vehicle were also made on July 1, 2022:_________.
1. The company pays $2,700 to GEICO for a one-year insurance policy.
2. The company spends an extra $6,600 to repaint the vehicle, placing the Great Adventures logo on the front hood, back, and both sides. An additional $2,900 is spent on a deluxe roof rack and a trailer hitch.
3. The painting, roof rack, and hitch are all expected to increase the future benefits of the vehicle for Great Adventures. In addition, on October 22, 2022, the company pays $2,200 for basic vehicle maintenance related to changing the oil, replacing the windshield wipers, rotating the tires, and inserting a new air filter.
Great Adventures
4. Record the depreciation expense and any other adjustments related to the vehicle on December 31, 2022. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answers

Answer and Explanation:

The Journal entry is shown below:-

Amount should be capitalized for new vehicle = Cost + Painting and new logo cost + Deluxe Roof rack and trailer hitch

= $15,600 + $6,600 + $2,900

= $25,100

We took the cost of painting and deluxe roof and trailer hitch costs into account as they are supposed to increase the vehicle's future benefits.

Depreciation = (Cost - Salvage Value) ÷ Number of Years

= ($25,100 - $6,300) ÷ 5

= $3,760 per year

In the year 2022 vehicle is used only for 6 months (July to Dec), depreciation expense for the year ended December 31, 2022 is

= $3,760 × 6 ÷ 12

= $1,880

So, the Journal entry is

Depreciation expense Dr, $1,880

         To Accumulated Depreciation $1,880

(Being depreciation provided for the year 2022 is recorded)

Therefore for recording the depreciation provided for the year 2022 we simply debited the depreciation expenses while we credited the accumulated depreciation.

The journal entry will include a depreciation account as well as accumulated depreciation.

What is depreciation?

Depreciation can be defined as the amount deducted from the asset because of the wear and tear of the asset after its use Which will reduce the price of the asset.

Capitalization for a new car should be calculated as follows: Cost + Painting and Logo Cost + Deluxe Roof Rack and Trailer Hitch

= $15,600 + $6,600 + $2,900

= $25,100

We factored in the price of the painting, a luxurious roof, and a trailer hitch because such expenses should raise the car's potential future value.

Depreciation is calculated as (Cost - Salvage Value) x Years.

= ($25,100 - $6,300) ÷ 5

= $3,760 annually

For the year ending December 31, 2022, the depreciation expense for the automobile operated for only 6 months (July to December) is

= $3,760 × 6 ÷ 12

= $1,880

The journal entry is therefore

depreciation costs (dr.)  $1,880

accumulated depreciation     $1,880

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_________ activity focuses on how to provide the materials from the suppliers. This system makes the connection between the customer and business functions. It manages the transactions to receive raw and semiraw materials from the suppliers as well as the company and its customers. How many units to order is one of the key issues in supply chain management. Depending on the customers’ order, the company gives orders to the suppliers, and then the suppliers orders to the suppliers’ suppliers.

Answers

Answer: Supply Chain Management.

Explanation:

Supply Chain Management is a very integral part of any business's business.

It refers to that system by which a country controls everything that has to do with the sourcing of raw materials to the production of goods from those raw materials.

An Effective supply chain will give a company an edge in operations as it will lead to goods getting to the customer faster as well as savings for the company amongst others.

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