Answer:
c. $942 U
Explanation:
Spending variance = Standard cost at 20 snow days - Actual operating cost.
Spending variance = [$2,960 + ($326*18)] - $9,770
Spending variance = $8,828 - $9,770
Spending variance = $942 (Unfavorable).
Note: The actual level of activity = 18 snow-days.
El Tapitio purchased restaurant furniture on September 1, 2018, for $30,000. Residual value at the end of an estimated 10-year service life is expected to be $4,500. Calculate depreciation expense for 2018 and 2019, using the straight-line method, and assuming a December 31 year-end.
Answer:
Results are below.
Explanation:
Giving the following information:
Purchase price= $30,000 (September)
Salvage value= $4,500
Useful life= 10
First, we need to determine the annual depreciation using the following formula:
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (30,000 - 4,500)/10
Annual depreciation= $2,550
2018:
Annual depreciation= (2,550/12)*4= $850
2019:
Annual depreciation= $2,550
The Herfindahl-Hirschman Index (HHI) is a mathematical approach to understanding market concentration that provides a single concentration indicator. What is the HHI for an industry characterized by the below noted data?
a. Firm 1 has a market share of 40%
b. Firm 2 has a market share of 20%
c. Firm 3 has a market share of 15%
d. Firm 4 has a market share of 15%
e. Firm 5 has a market share of 10%
HHI=___
Answer: 2,550
Explanation;
The Herfindahl-Hirschman Index (HHI) is used to measure market saturation to see the concentration of a market. It ranges from around 0 to 10,000 and is calculated by squaring the market share of every firm in the market and then adding the squares up.
= 40² + 20² + 15² + 15² + 10²
= 1600 + 400 + 225 + 225 + 100
= 2,550
Poseidon Marine Stores Company manufactures special metallic materials and decorative fittings for luxury yachts that require highly skilled labor. Poseidon uses standard costs to prepare its flexible budget. For the first quarter of the year, direct materials and direct labor standards for one of their popular products were as follows:
Direct materials: pounds per unit; per pound
Direct labor: hours per unit; per hour
Poseidon produced units during the quarter. At the end of the quarter, an examination of the labor costs records showed that the direct labor cost variance was F. Which of the following is a logical explanation for this variance?
A. The company paid a lower cost for the direct materials than allowed by the standards.
B. The company used a lower quantity of direct materials than allowed by the standards.
C. The company paid a lower cost per hour for labor than allowed by the standards.
D. The company used fewer labor hours than allowed by the standards,
Answer:
The company paid a lower cost per hour for labor than allowed by the standards.
Explanation:
The labour cost variance is the difference between the standard labour cost allowed for the actual hours worked and the actual labor cost for the same hours
The labour cost variance compares the actual cost and the standard cost for the actual labour hours paid for.
Hence , Poseidon Marine Stores Company would have paid a sum for labour cost which is lower than the standard cost.
The company paid a lower cost per hour for labor than allowed by the standards.
Velocity Company estimates the following for the next year, when common stock is expected to trade at a price-earnings ratio of 7. Earnings before interest and taxes $45 million Interest expense $5 million Effective income tax rate 30% Preferred stock dividends $10 million Common shares outstanding 2 million Common stock payout ratio 25% What is Velocity's approximate expected common stock market price per share next year?
Answer:
$63
Explanation:
The computation of the expected common stock market price per share for the next year is shown below:
Price earning ratio = Share price ÷ earning per share
where
Price earning ratio is 7
Earning per share is
= (Net income - preference dividend) ÷ number of common shares outstanding
= {($45 million - $5 million) × (1 - 0.30) - $10 million)} ÷ 2 million shares
= $9
Now placing these values to the above formula
So, the expected common stock market price is
= 7 × $9
= $63
Jessie, an HR specialist, has been assigned the task of performing a job analysis for a new position created at the firm. What questions is LEAST relevant to the job analysis that Jessie will conduct?
Answer: D) What is the national hourly rate for this job?
Explanation:
Job analysis is done to help an organization ascertain what kind of person would be a right fit for the job. As such, it focuses on what the job entails as well as the requirements of the job and other details like its duration. This will help a company know the kind of person that will work best in the role.
The rate that the job pays is something that the company also analyzes but this is a very secondary aspect of job analysis and so it is the least relevant here.
You are helping a customer who wants to purchase pavers and they have selected
a style and color they like. How should you proceed next?
A. Thank the customer for shopping with us
B. Ask the customer if they need the patio project installed
C. Close the sale with the customer
D. Ask the customer if they need any other products for the project.
Answer:
D. Ask the customer if they need any other products for the project.
Explanation:
Customers who buy pavers are usually involved in a medium or large house project, and probably need other products. For this reason, a sales representative should ask the customer if they need anything else for the project in order to increase sales for the company.
Suppose Rocky Brands has earnings per share of $2.33 and EBITDA of $29.3 million. The firm also has 5.3 million shares outstanding and debt of $125 million (net of cash). You believe Jared's Outdoor Corporation is comparable to Rocky Brands in terms of its underlying business, but Jared's has no debt. If Jared's has a P/E of 12.9 and an enterprise value to EBITDA multiple of 7.1, estimate the Enterprise Value of Rocky Brands by using both multiples. Which estimate is likely to be more accurate?
Answer:
enterprise value to EBITDA.
Explanation:
The computation of the value of the stock using P/E ratio is shown below:-
Stock value = (P/E ratio × EPS) × Number of shares outstanding
= (12.9 × $2.33) × 5.3 million
= 159.3021 million
Now, the computation of the value of the stock using EBITDA multiple is shown below:-
Stock value = (EBITDA multiple × EBITDA) - Net debt
= (7.1 × $29.3 million) - $125 million
= 208.03 - $125 million
= 83.03
There is no equivalent corporate debt. It is easier to make a comparison at the operating level and thus a better measure of valuation is the enterprise value to EBITDA.
Imagine that Eveready has developed solar rechargeable batteries that cost only slightly more to produce than the rechargeable batteries currently available. These solar batteries can be recharged by sunlight up to five times, after which they are to be discarded. Unfortunately, the production process cannot be patented, so competitors could enter the market within a year. Which of the following is the best description of the product life cycle of this product?
a. Long, level beginning, and rapid ascent
b. High initial sales followed by slow decline
c. High introductory sales followed by rapid decline
d. Rapid growth followed by rapid decline
e. Moderately slow introduction, followed by modest growth, gradually leveling off
Answer: Moderately slow introduction, followed by modest growth, gradually leveling off
Explanation:
The product life cycle is the time a product takes from the introduction stage to the decline stage when it's off the market.
Based on the above scenario, the product life cycle of this product will be moderately slow introduction, followed by modest growth, gradually leveling.
This is because since it's a new product, there will be a slow introduction as people will just be getting used to the product, then as customers begin to buy the product and it's brand becomes known, there'll be a modest growth before it levels off.
The following data is given for the Bahia Company: Budgeted production 1,049 units Actual production 971 units Materials: Standard price per pound $1.971 Standard pounds per completed unit 12 Actual pounds purchased and used in production 11,302 Actual price paid for materials $23,169 Labor: Standard hourly labor rate $15.00 per hour Standard hours allowed per completed unit 4.3 Actual labor hours worked 5,000.65 Actual total labor costs $76,260 Overhead: Actual and budgeted fixed overhead $1,014,000 Standard variable overhead rate $27.00 per standard labor hour Actual variable overhead costs $140,018 Overhead is applied on standard labor hours. The variable factory overhead controllable variance is a.$75,397.52 unfavorable b.$75,397.52 favorable c.$27,284.90 unfavorable d.$27,284.90 favorable
Answer:
c.$27,284.90 unfavorable
Explanation:
Standard variable overhead rate =$27.00
Standard hours allowed per completed unit =4.3
Actual production unit =971
Actual variable overhead costs =$140,018
Variable factory overhead controllable variance = (Standard variable overhead rate * Standard hours allowed per completed unit * Actual production unit) - Actual variable overhead costs
Variable factory overhead controllable variance = ($27 * 4.3 * 971) - $140,018
Variable factory overhead controllable variance = $112,733.1 - $140,018
Variable factory overhead controllable variance = $27,284.9 (Unfavorable)
You are feeling overwhelmed by the number of potential goals you could set for your business unit. You ask your colleague Dan for advice on the process he uses to set goals. Which of the following suggestions from Dan is wrong? He suggests that you
Answer:
prioritize goals according to their value to the organization
Explanation:
Goal setting is an action plan that is set to motivate someone towards achieving a goal. Individuals, organizations set goals as part of their personal development plans hence must be Specific, Measurable, Action oriented, Realistic and Timely(SMART).
With regards to the above scenario, prioritizing goals according to their value to the organization is wrong. While it is important to prioritize goals, such must however be made to align with the business's strategic objectives.
It is also important to stick to goals already set instead of constantly changing them. Sometimes too, customers put pressure on business owners to consider certain goals which might be beneficial; such should also be looked into after considering their pros and cons.
The Watts Company uses predetermined overhead rates to apply manufacturing overhead to jobs. The predetermined overhead rate is based on labor cost in Dept. A and on machine-hours in Dept. B. At the beginning of the year, the company made the following estimates:
Department A Department B
Direct labour cost $30,000 $40,000
Manufacturing overhead $60,000 $50,000
Direct labour hours 6,000 8,000
Machine hours 2,000 10,000
What predetermined overhead rates would be used in Departments A and B, respectively?
a. 50% and $8.00.
b. 50% and $5.00.
c. 110% and $15.00.
d. 200% and $5.00.
Answer:
The Watts Company
d. 200% and $5.00.
Explanation:
a) Data and Calculations:
Estimates:
Department A Department B
Direct labour cost $30,000 $40,000
Manufacturing overhead $60,000 LH $50,000 MH
Direct labour hours 6,000 8,000
Machine hours 2,000 10,000
Department A:
Manufacturing overhead rate = $60,000/$30,000 x 100 = 200%
Department B:
Manufacturing overhead rate = $50,000/10,000 = $5.00
The Watts Company Department A will absorb manufacturing overhead at a rate of 200% of direct labor cost in order to arrive at an estimate of $60,000 ($30,000 x 200%). The Department B will absorb manufacturing overhead at a rate of $5 per machine hour to arrive at an estimate of $50,000 (10,000 x $5).
Firm J has net income of $77,605, sales of $935,000, and average total assets of $467,500. Required: Calculate Firm J’s margin, turnover, and return on investment (ROI).
Answer:
Firm J's margin= 8.3%
Firm J's turnover= 2
Firm J's ROI= 16.6%
Explanation:
Form J has a net income of $77,605
The sales is $935,000
The average total assets is $467,500
Firm J's margin can be calculated as follows
Margin= Net income/sales
= $77,605/$935,000
= 0.083×100
= 8.3%
Firm J's turnover can be calculated as follows
Turnover= Sales/Average Total assets
= $935,000/$467,500
= 2
Firm J's return on investment can be calculated as follows
ROI= Net income/Average Total assets
= $77,605/$467,500
= 0.166×100
= 16.6%
Hence Firm J's margin, turnover and return on investment is 8.3%, 2 and 16.6% respectively.
The following information was available for the year ended December 31, 2013: Sales $ 520,000 Dividends per share $ 1.36 Net income 74,480 Earnings per share 3.00 Average total assets 820,000 Market price per share at year-end 28.50 Average total stockholders’ equity 380,000 Required: a. Calculate margin, turnover, and ROI for the year ended December 31, 2013. (Do not round intermediate calculations and ro
Answer:
Margin ratio = 14.32%
Assets turnover ratio = 63.41%
Return on investment = 9.08%
Explanation:
The computation of margin, turnover, and ROI for the year is shown below:-
Margin ratio = Net income ÷ Sales
= $74,480 ÷ $520,000
= 0.1432
or
= 14.32%
Assets turnover ratio = Sales ÷ Average total assets
= $520,000 ÷ $820,000
= 0.6341
or
= 63.41%
Return on investment = Net income ÷ Average total assets
= $74,480 ÷ $820,000
= 0.0908
or
= 9.08%
This year Burchard Company sold 37,000 units of its only product for $16.40 per unit. Manufacturing and selling the product required $122,000 of fixed manufacturing costs and $182,000 of the fixed selling and administrative costs. It?s per unit variable costs follow.
Material $4.20
Direct labor (paid on the basis of completed units) 3.20
Variable overhead costs 0.42
Variable selling and administrative costs 0.22
Next year the company will use new material, which will reduce material costs by 50% and direct labor costs by 50% and will not affect product quality or marketability. Management is considering an increase in the unit selling price to reduce the number of units sold because the factory's output is nearing its annual output capacity of 42,000 units. Two plans are being considered. Under plan 1, the company will keep the selling price at the current level and sell the same volume as last year. This plan will increase income because of the reduced costs of using the new material. Under plan 2, the company will increase the selling price by 20%. This plan will decrease unit sales volume by 5%. Under both plans 1 and 2, the total fixed costs and the variable costs per unit for overhead and for selling and administrative costs will remain the same.
Required:
1. Compute the break-even point in dollar sales for both (a) plan 1 and (b) plan 2.
Per unit Plan 1 Plan 2
Sales
Variable Costs
Material
Direct labor
Variable overhead costs
Variable S&A costs
Total variable costs
Contribution margin
2. Prepare a forecast contribution margin income statement with two columns showing the expected results of plan1 and plan 2. The statements should reports sales, total variable costs, contribution margin, total fixed costs, income before taxes, income taxes (40% rate), and net income.
Answer:
plan 1:
units sold 37,000
sales price per unit $16.40
materials per unit $2.10
direct labor per unit $1.60
variable overhead costs per unit $0.42
variable selling and administrative costs per unit $0.22
fixed manufacturing $122,000
fixed selling and administrative $182,000
plan 2:
units sold 35,150
sales price per unit $19.68
materials per unit $2.10
direct labor per unit $1.60
variable overhead costs per unit $0.42
variable selling and administrative costs per unit $0.22
fixed manufacturing $122,000
fixed selling and administrative $182,000
1) break even points:
Plan 1 = ($304,000) / ($16.40 - $4.34) = 25,207.30 = 25,208 units
Plan 2 = ($304,000) / ($19.68 - $4.34) = 19,817.47 = 19,818 units
2) contribution income statement
Plan 1 Plan 2
Sales revenue $606,800 $691,752
Variable costs:
Production costs $152,440 $144,818
Selling and adm. costs $8,140 $7,733
Contribution margin $446,220 $539,201
Fixed costs:
Manufacturing costs $122,000 $122,000
Selling and adm. costs $182,000 $182,000
Income before taxes $142,220 $235,201
Income taxes $56,888 $94,080
Net income $85,332 $141,121
Following are financial data from year-end financial statements of Portland Company for 2017, 2016 and 2015.
2017 2016 2015
Accounts receivable $136,125 $144,576 $132,000
Cost of goods sold 1,023,750 864,000 960,000
Current assets 450,000 360,000 405,000
Current liabilities 300,000 250,000 310,000
Inventory 225,000 165,000 195,000
Sales 1,642,500 1,752,000 1,200,000
Required:
Compute the following financial ratios for 2016 and 2017.
Answer:
Answers are calculated below
Explanation:
Financial ratios can be calculated according to their formulas. Both formulas and calculation are as follows
CURRENT RATIO
Current ratio = Current assets/current liabilities
Current ratio (2016) = $360,000/$250,000
Current ratio (2016) = 1.44
Current ratio (2017) = $450,000 / $300,000
Current ratio (2017) = 1.50
ACID RATIO
Acid ratio = (Current asset - inventory)/current liabilities
Acid ratio (2016) = (360,000 - 165,000)/250,000
Acid ratio (2016) = 0.78
Acid ratio (2017) = (450,000-225,000)/300,000
Acid ratio (2017) = 225,000/300,000
Acid ratio (2017) = 0.75
INVENTORY TURNOVER RATIO
Inventory turnover ratio = cost of good Sold / Average inventory
Inventory turnover ratio (2016) = 864,000/(360,000 ÷2)
Inventory turnover ratio (2016) = 864,000/180,000
Inventory turnover ratio (2016) = 4.80
Inventory turnover ratio (2017) = 1,023,750 / ( 390,000 ÷ 2)
Inventory turnover ratio (2017) = 1,023,750 / 195,000
Inventory turnover ratio (2017) = 5.25
DAYS SALE IN RECEIVABLE
Days sale in receivable = 365/Average receivable turnover ratio
Days sale in receivable (2016) = 365/ 12.67(w1)
Days sale in receivable (2016) = 28.81 days
Days sale in receivable (2017) =365/11.7(w1)
Days sale in receivable (2017) = 31.20 days
Working 1
Account receivable turnover ratio = Sales/ Average receivable
Account receivable turnover ratio (2016) = 1,752,000/138,288(w2)
Account receivable turnover ratio = 12.67 times
Account receivable turnover ratio (2017) = 1,642,500/140,351(w2)
Account receivable turnover ratio (2017) = 11.7 times
Working 2
Average receivable = (Opening + Closing) /2
Average receivable (2016) = (132,000 + 144,576) /2
Average receivable (2016) = 138,288
Average receivable (2017) = (144,576 +136,125 ) /2
Average receivable (2017) = 140,351
On January 1, 2020, the Hardin Company budget committee has reached agreement on the following data for the 6 months ending June 30, 2020.
Sales units: First quarter 5,200; second quarter 6,700; third quarter 7,000.
Ending raw materials inventory: 40% of the next quarter’s production requirements.
Ending finished goods inventory: 25% of the next quarter’s expected sales units.
Third-quarter production: 7,380 units.
The ending raw materials and finished goods inventories at December 31, 2019, follow the same percentage relationships to production and sales that occur in 2020. 3 pounds of raw materials are required to make each unit of finished goods. Raw materials purchased are expected to cost $5 per pound.
a) Prepare a production budget by quarters for the 6-month period ended June 30, 2020.
b) Prepare a direct materials budget by quarters for the 6-month period ended June 30, 2020.
Answer:
Hardin Company
Production budget
For the first semester of 2020
First quarter Second quarter Total
Sales units 5,200 6,700 11,900
Planned ending 1,675 1,750 1,750
inventory
Total production 6,875 8,450 13,650
required
- beginning inv. -1,300 -1,675 -1,300
Units to be 5,575 6,775 12,350
produced
Hardin Company
Raw materials budget
For the first semester of 2020
First quarter Second quarter Total
Units to be 5,575 6,775 12,350
produced
Materials required 3 3 3
per unit
Materials needed 16,725 20,325 37,050
for production
Planned ending 8,130 8,856 8,856
inventory
Total materials 24,855 29,181 45,906
needed
- beginning inv. -6,690 -8,130 -6,690
Materials to be 18,165 21,051 39,216
purchased
Cost per unit $5 $5 $5
Total cost of $90,825 $105,255 $196,080
direct materials
Suppose that in a competitive output market, firms hire labor from a competitive labor market (so that the profit maximization conditions for hiring labor are as we discussed in class). If the supply of this kind of labor increases, we would expect a(n) _____________.
A. increase in equilibrium wage, W, and increase in equilibrium quantity of labor, L, employed.
B. an increase in W and a decrease in L.
C. A decrease in W and a decrease in L.
D. A decrease in W and no change in L.
E. None of the above.
Answer:
e
Explanation:
When supply of labour increases, the supply curve shifts outward. As a result there would be an increase in equilibrium quantity but a decrease in wages
If there is a market with the below noted market segmentation, what would the four firm market concentration ratio be?
Distribution of sales: 30%, 3%,10%, 5%,15%, 2%, 35%
a. 10
b. 90
c. 50
d. 40
Answer:
The correct answer is:
90 (b.)
Explanation:
A concentration ratio is the ratio of the combined market shares percentage held by the largest specified number of firms, compared to the given market size. The concentration ratio ranges from 0% to 100%. If the concentration ratio of an industry ranges from 0% to 50%, that industry is said to be perfectly competitive if the top 5 firms have a concentration ratio of 60% or more, oligopoly is said to occur, and if the competition ratio of one company is 100% it shows monopoly.
In our example, the concentration of the largest four market segments are:
35%, 30%, 15% and 10%
Therefore, the four firm market concentration ratio = 35 + 30 + 15 + 10 = 90
Answer:
b. 90
Explanation:
The concentration ratio is a term in business that is measured as the total summation of the market share percentage carried by the largest specified number of companies in an industry. The concentration ratio varies between 0% to 100%, and an industry's concentration ratio is considered to demonstrates the extent of competition in the industry.
However, the four-firm concentration ratio is calculated by summing the market shares—that is, the percentage of total sales—of the four largest companies in the given market.
Hence, in this case, we have 35%, 30%, 15% and 10% as the top four largest market share. There by, summation equals => 35+30+15+10 = 90.
A company had total sales of $840,000, net sales of $821,400, and an average accounts receivable of $111,000. Its accounts receivable turnover equals:
Answer:
7.4
Explanation:
accounts receivable turnover is ratio of total net sales and average account receivable.
accounts receivable turnover = total net sales/ average account receivable
Given
net sales = $821,400,
average accounts receivable = $111,000
accounts receivable turnover =$821,400/111,000 = 7.4 Answer
A customer who has routinely traded securities through your firm has placed an order to buy a security that is only listed on the Malaysian Stock Exchange. To effect the transaction, your firm must use a correspondent broker-dealer located in Malaysia that charges large special handling fees to cover Malaysian securities transfer taxes. Which statement is TRUE
Answer:
the broker-dealer must notify the customer of the additional charges prior to executing the transaction
Explanation:
In such a scenario, the statement that would be completely true is that the broker-dealer must notify the customer of the additional charges prior to executing the transaction. Since the broker is acting on behalf of the customer, then the customer needs to be notified beforehand in order for him/her to be able to analyze and decide whether or not they still want to go ahead with the transaction.
Used Car Problems. Marcy purchased a used car from ABC Motors. Six months later, the police seized the car from Marcy because it was a stolen vehicle. Marcy asked for her money back from ABC Motors. The manager there told her that the car was not stolen; that even if it were stolen, ABC Motors acted in good faith with no knowledge of a theft; therefore, no refund was legally required. ABC Motors had also sold a used car to Frank, who wrote a bad check for the car and left town but not before he sold the car to Betty, who paid a fair price for the car believing that Frank had all rights to sell it. ABC Motors asked Betty to return the car, but she told ABC to forget it. Assuming that ABC Motors was an innocent purchaser from the thief, which of the following is true regarding the manager's statement that Marcy is not due a refund?
A. The manager is correct, but only if ABC Motors can prove that it had never been charged with dealing in stolen merchandise.
B. The manager is correct, but only if ABC Motors can prove that none of its representatives were negligent in disregarding evidence of the theft at any time prior to its resale to Marcy.
C. The manager is correct.
D. The manager is incorrect, but only if Marcy can prove that she specifically asked if there was any problem with the car prior to her purchase and was affirmatively told that the title was good.
E. The manager is incorrect.
Answer:
E. The manager is incorrect.
Explanation:
Since the car was stolen, ABC Motors never had good title of it. A car comes with a title and before ABC bought it from someone it should have verified that the title was good. They are merchants and their normal job is to deal with this kind of things. A car dealership cannot sell cars without a good title, and if they do, they will get in legals problems for doing so.Their problems will not only involve the buyer, but they will also be investigated to check if they were involved in the theft.
To judge whether a particular diversification move has good potential for building added shareholder value, the move should pass the following tests:___________.
A) the attractiveness test, the barrier-to-entry test, and the growth test.
B) the strategic fit test, the resource fit test, and the profitability test.
C) the barrier-to-entry test, the growth test, and the shareholder value test.
D) the attractiveness test, the cost-of-entry test, and the better-off test.
E) the resource fit test, the strategic fit test, the profitability test, and the shareholder value test.
Answer:
D) the attractiveness test, the cost-of-entry test, and the better-off test.
Explanation:
To judge a diversification change, an organization needs to pass the attractiveness tests, the entry cost test and the best situation test.
These tests will be decisive to analyze the potential that diversification will have to create added value for the shareholder.
The attractiveness test will list the ability that the market has to ensure that there is a safe return on investments.
The cost-of-entry will aim to ensure that when entering a new sector, the organization does not have higher costs that can influence the generation of profitability.
Finally, the better-off test will analyze whether the planned diversification will be so profitable that it will help to improve the performance of the integration of organizational businesses.
Answer:
OPTION d
Explanation:
On January 1, 2021, Legion Company sold $270,000 of 4% ten-year bonds. Interest is payable semiannually on June 30 and December 31. The bonds were sold for $169,056, priced to yield 10%. Legion records interest at the effective rate. Legion should report bond interest expense for the six months ended June 30, 2021, in the amount of: (Round your answer to the nearest dollar amount.)
Answer:
Interest expense = $8453
Explanation:
We can calculate Bond interest expense by multiplying Carrying value of the bond with the effective interest rate and the period of time,
DATA
Carrying value of bond = $169,056
Effective interest rate = 10%
Period of time = 6 months
Interest expense =?
Calculation
Interest expense = Carrying value x Effective interest rate x Time period
Interest expense = $169,056 x 10% x [tex]\frac{6months}{12months}[/tex]
Interest expense = $8453
To be responsible in financial planning you must set goals. To reach these goals you must create a plan. What is a specific financial goal that you have
Answer and Explanation:
As we know that planning is the most important part of everyone life. Without planning, no one could able to accomplish its goals and objectives.
There are various steps to study about yourself and based on this you can do the planning and reach your goals which are shown below:
1. The most important part of your life find that and always do practical thinking
2. How much time it takes to reach your goals
3. Now use the SMART strategy which gives you the way to accomplish it
4. Make a roadmap so that you get to know how the things could be happen
5. How much money is required to execute it
6. And at last check your progress
These above steps helps you to develop a financial plan
An individual is planning to set-up an education fund for her daughter. She plans to invest $7,700 annually at the end of each year. She expects to withdraw money from the fund at the end of 9 years and expects to earn an annual return of 8%. What will be the total value of the fund at the end of 9 years
Answer:
$96,154.20
Explanation:
We are to find the future value of the annuity
The formula for calculating future value = A (B / r)
B = [(1 + r)^n] - 1
A = Amount
R = interest rate
N = number of years
[(1.08)^9 - 1 ] / 0.08 = 12.487558
12.487558 x $7,700 = $96,154.20
Sheffield Corp. determines that 53000 pounds of direct materials are needed for production in July. There are 3100 pounds of direct materials on hand at July 1 and the desired ending inventory is 2700 pounds. If the cost per unit of direct materials is $3, what is the budgeted total cost of direct materials purchases
Answer:
Budgeted total cost of Direct Material purchases ($) =$ 157,800
Explanation:
Raw material purchase budget is determined by adjusting the raw material usage budget for opening and closing inventory of materials.
Purchase budget = usage budgeted + closing inventory - Opening inventory
Material purchase budget = 53,000 + 2,700 - 3,100= 52,600 pounds
Note the closing inventory represents the stock of materials needed to be kept, hence it will increase the purchase budget. So we added.
On the other hand hands, the opening inventory represented what already existed , hence we subtracted it as it will reduce what will be required.
Material purchase budget ($) = purchase budget in quantity × standard price per quantity
Material purchase budget = 52,600 × $3 = $ 157,800
Budgeted total cost of Direct Material purchases ($) =$ 157,800
building that has a market value of $366,000; the partnership assumes responsibility for a $133,000 note secured by a mortgage on the property. Monroe invests $108,000 in cash and equipment that has a market value of $83,000. For the partnership, the amounts recorded for Fontaine's Capital account and for Monroe's Capital account are:\
Answer:
Fontaine - $233,000Monroe - $191,000Explanation:
Fontaine invested a building that had a value of $366,000 but the partnership assumes a $133,000 note secured by a mortgage on the property. This therefore reduces Fontaine's contribution;
= 366,000 - 133,000
= $233,000
Monroe contributed both cash and equipment so that would go to Monroe's capital account as their capital contribution;
= 108,000 + 83,000
= $191,000
A registered representative is notified verbally by the nephew of a client that his uncle has passed away. Which statements are TRUE regarding the actions that the registered representative can take based on this information?
I The account should be immediately marked as "deceased"
II The account should be marked deceased only when instructions are received from the executor of the deceased's estate
III All open orders should be canceled immediately
IV All open orders should be canceled only when instructions are received from the executor of the deceased's estate
a. I and III
b. I and IV
c. II and III
d. II and IV
Answer: a. I and III
Explanation:
As soon as word comes through that a client has passed on, the immediate thing to do is to note the date of death and then mark the account as deceased.
After this, all open orders should be immediately cancelled. It is also best to inform a superior of the development. Any other actions would from there henceforth regarding the account is to be determined by the executor of the estate.
Answer:
d. II and IV
Explanation:
The nephew cannot freeze or cause the account to be freezed because he is not considered an immediate family of the deceased or an executor for the deceased. The account cannot be marked as deceased and all open orders cannot be cancelled yet until the executor who was appointed to administer the deceased estate gives the instruction or announces to the representative of the person's death. The representative must therefore endeavor to make enquiries or call the right people to get needed information
Suppose the demand curve for a monopolistic competitor becomes steeper, but its average total costs do not change. What is likely to be an effect?
Answer:
The demand curve is less elastic.
Explanation:
The steeper demand curve shows that the demand had become less elastic because the steeper demand curve represents the less elastic demand while the flatter demand curve shows the more elastic demand. therefore, if the demand curve for a monopolistic competitor becomes steeper that means people are less responsive towards the quantity. So if the price increases or decreases, then people will not change their quantity more than the change in price.
Mars Inc. has a defined benefit pension plan. On December 31 (the end of the fiscal year), the company received the PB0 report from the actuary. The following information was included in the report: ending PBO, $110,000 benefits paid to retirees. $10,000, interest cost, $7,200. The discount rate applied by the actuary was 8%. What was the beginning PBO?
A) $100,000
B) $112,000.
C) $90,000.
D) $107,200.
Answer:
C) $90,000
Explanation:
Beginning PBO = Interest cost/Discount rate =
Beginning PBO = $7,200/8%
Beginning PBO = $90,000
