Effects of fixed and variable cost behavior on the risk and rewards of business opportunities LO 11-2

Kenton and Denton Universities offer executive training courses to corporate clients. Kenton pays its instructors $5,000 per course taught. Denton pays its instructors $250 per student enrolled in the class. Both universities charge executives a $450 tuition fee per course attended.


Required

Prepare income statements for Kenton and Denton, assuming that 20 students attend a course.

Kenton University embarks on a strategy to entice students from Denton University by lowering its tuition to $240 per course. Prepare an income statement for Kenton assuming that the university is successful and enrolls 40 students in its course.

Denton University embarks on a strategy to entice students from Kenton University by lowering its tuition to $240 per course. Prepare an income statement for Denton, assuming that the university is successful and enrolls 40 students in its course.

Prepare income statements for Kenton and Denton Universities, assuming that 10 students attend a course, and assuming that both universities charge executives a $450 tuition fee per course attended.

Answers

Answer 1

Answer and Explanation:

The Preparation of income statement of each point is shown below:-

 A.                           Kenton and Denton Universities

                                             Income Statement

Particulars                                   Kenton        Denton

Revenue (20 × $450)                  $9,000      $9,000

Less: Instruction fees

Per course fees                         $5,000

Per student fee (20 × $250)                           $5,000

Net income                                 $4,000         $4,000

B.                                          Kenton Universities

                                             Income Statement

Particulars                                   Kenton      

Revenue (40 × $240)                  $9,600

Less: Instruction fees

Per course fees                           $5,000

Net income                                  $4,600

C.                                           Denton Universities

                                             Income Statement

Particulars                                     Denton  

Revenue (40 × $240)                  $9,600

Less: Instruction fees

Per student fee (40 × $250)       $10,000

Net income                                  -$400

D.                            Kenton and Denton Universities

                                             Income Statement

Particulars                                   Kenton        Denton

Revenue (10 × $450)                  $4,500      $4,500

Less: Instruction fees

Per course fees                         $5,000

Per student fee (10 × $250)                           $2,500

Net income                                 -$500         $2,000

We simply deduct all the expenses from the revenue to arrive at net income and a net loss


Related Questions

Upton Co. is growing quickly. Dividends are expected to grow at 20 percent for the next three years, with the growth rate falling off to a constant 8 percent thereafter. If the required return is 11 percent and the company just paid a dividend of $1.45, what is the current share price

Answers

Answer:

$71.03

Explanation:

To find the current share price we need to find the value of future dividends first and then discount it by the given rate of return

DATA

Growth rate = g = 20%

Time period = 3 years

Required return = 11%

Current dividend = Do = $1.45

Share price =?

Solution

Future dividend = Current dividend ( 1 + growth rate)

D1 = (1.45 x 1.20) = $1.74

D2 = (1.74 x 1.20) = $2.088

D3 = (2.088 x 1.20) = $2.5056

Value after year 3 = (D3 x Growth rate) / (Required return-Growth rate)

Value after year 3 = (2.5056*1.08) / (0.11-0.08)

Value after year 3 =$90.2

current share price = Future dividends x Present value of discounting factor

current share price = (1.74/1.11)+($2.088/1.11^2)+(2.5056/1.11^3)+($90.2/1.11^3)

current share price =  1.56 + 1.69 + 1.83 + 65.95

current share price =$71.03

On November 1, Orpheum Company accepted a $10,900, 90-day, 12% note from a customer to settle an account. What entry should be made on the November 1 to record the note acceptance

Answers

Answer:

Note Receivable $10,900 (debit)

Sales Revenue $10,900 (credit)

Explanation:

Recognize the Asset : Note Receivable and Sales Revenue to the amount of the value of the note of $10,900.

Subsequently, the Interest will accrue on the note capitalized at the rate of 12%.

IOP Company purchased a machine on 1/1/22 costing $500. Estimated life was 5 years; estimated salvage value was $100. In 2025, IOP discovered that the bookkeeper correctly used straight-line depreciation, but erroneously used an estimated life of 8 years in computing depreciation for the first 3 years of life. The Prior Period Adjustment to be recorded in 2025 will be:

Answers

Answer:

The Prior Period Adjustment to be recorded in 2025 will include a $90 debit as adjustment to Retained Earnings

Explanation:

Correct depreciation would have been = ($500-$100)/5 = $80

Depreciation charged wrongly as ($500-$400)/8 = $50

Therefore depreciation has been charged short by $30 for three years, thereby reflecting income greater by $30 each year for 3 years.

Since due to wrong depreciation retained earnings is higher by $90, therefore we have to debit retained earnings by $90

You are aware that your neighbor trades stocks based on confidential information he overhears at his workplace. This information is not available to the general public. This neighbor continually brags to you about the profits he earns on these trades. Given this, you would tend to argue that the financial markets are at best _____ form efficient.

Answers

Answer:

Semi-strong Form Efficient.

Explanation:

There are three levels of market efficiency as weak, semi-strong and strong.

In a semi-strong form efficient market, the stock prices change independently of the previous return points and the current information so it is not possible to predict the future stock prices.

The example given in the question, which states that the neighbor has non-public information, can be classified as a semi-strong form efficient market.

I hope this answer helps.

​Jack's gross pay for the week is . His yeartodate pay is under the limit for OASDI. Assume that the rate for state and federal unemployment compensation taxes is ​% and that​ Jack's yeartodate pay has previously exceeded the cap. What is the total amount of payroll taxes that​ Jack's employer must record as payroll tax​ expenses? (Do not round your intermediate calculations. Assume a FICAOASDI Tax of ​% and FICAMedicare Tax of ​%.)

Answers

Answer: $122.40

Explanation:

Jack's year to date pay has already exceeded the $7,000 limit on which State and Federal Unemployment taxes can be charged on his pay.

The amount the employer will pay is;

= FICA OASI Tax + FICA Medicare tax

= (1,600 * 6.2%) + (1,600 * 1.45%)

= 99.20 + 23.20

= $122.40

You own 150 shares of Western Feed Mills stock valued at $41.20 per share. What is the dividend yield if your annual dividend income is $372

Answers

Answer:

6.01%

Explanation:

Calculation for the dividend yield

Using this formula

Dividend yield=(Annual dividend income/Numbers of shares)/Amount per shares

Let plug in the formula

Dividend yield =($372/150 shares)/$41.20 per share

Dividend yield =$2.48/$41.20

Dividend yield =0.0601*100

Dividend yield =6.01%

Therefore Dividend yield will be 6.01%

All of the following statements concerning the characteristics of aggregate planning for services is true except

A. Group of answer choices
B. Demand is difficult to predict
C. Most services can be inventoried
D. Capacity is easy to predict
E. Labor is the most constraining resource

Answers

Answer:  D. Capacity is easy to predict

Explanation:

Aggregate planning for services involves organising the business areas of companies engaging in service provision or operation companies that also provide a service.

It is generally held that demand is difficult to predict and most services can be inventoried. It is also held that labor is the most constraining resource.

However, capacity in aggregate planning for services is not easy to predict. This is because services are not standadized and are instead varied and mostly unique. Therefore knowing the capacity to give to a service becomes hard to predict.

Suppose Happy Dog Soap Company is evaluating a proposed capital budgeting project (project Beta) that will require an initial investment of $3,225,000. The project is expected to generate the following net cash flows:


Year Cash Flow
Year 1 $275,000
Year 2 $475,000
Year 3 $400,000
Year 4 $500,000

Happy Dog Soap Company's weighted average cost of capital is 8%, and project Beta has the same risk as the firm's average project. Based on the cash flows, what is project Beta's NPV?

a. -$5,056,663
b. -$1,831,663
c -$2,106,412
d. -$2,197,996

Answers

Answer:

-$1,878,086.608

Explanation:

The computation of the net present value is shown below;

             (in dollars)                                         (in dollars)

Year Cash flows Discount factor Present value  

0             -3225000              1                             -3225000  (A)

1              275000           0.9259259259           254629.630

2             475000           0.8573388203           407235.940

3             400000           0.793832241               317532.896

4             500000           0.7350298528          367514.926

Total                                                                   1346913.392  (B)

Net present value                                           -$1,878,086.608 (A - B)

This is the answer but the same is not provided in the given options

Nautical has two classes of stock authorized: $10 par preferred, and $1 par value common. As of the beginning of 2015, 125 shares of preferred stock and 2,700 shares of common stock have been issued. The following transactions affect stockholders� equity during 2015:
March 1 Issue 2,700 additional shares of common stock for $13 per share.
April 1 Issue 175 additional shares of preferred stock for $37 per share.
June 1
Declare a cash dividend on both common and preferred stock of $0.40 per share to all stockholders of record on June 15.
June 30 Pay the cash dividends declared on June 1.
August 1 Repurchase 175 shares of common treasury stock for $10 per share.
October 1 Reissue 125 shares of treasury stock purchased on August 1 for $12 per share.
Nautical has the following beginning balances in its stockholders� equity accounts on January 1, 2015: Preferred Stock, $1,250; Common Stock, $2,700; Paid-in Capital, $19,200; and Retained Earnings, $11,200. Net income for the year ended December 31, 2015, is $7,500.
Required:
1. Record each of these transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
2. Select whether each of these transactions would increase (+), decrease (?), on total assets, total liabilities, and total stockholders� equity by completing the following table. (If none of the categories apply for a particular item, leave the cell blank.)
Transaction Total Assets Total Liabilities Total Stockholders Equity
Issue common stock
Issue preferred stock
Declare cash divedens
Pay cash divedens
Repurchase treasury stock
Reissue treasury stock

Answers

Answer:

Nautical

1. Journal Entries:

March 1:

Debit Cash Account $35,100

Credit Common Stock $35,100

To record the issue of 2,700 shares of common stock for $13 per share.

April 1:

Debit Cash Account $6,475

Credit Preferred STock $6,475

To record the issue of 175 shares of preferred stock for $37 per share.

June 1:

Debit Dividends $2,280

Credit Dividends Payable $2,280

To record dividends of $0.40 per share to all stockholders of record.

June 30:

Debit Dividends Payable $2,280

Credit Cash Account $2,280

To record the payment of cash dividends.

August 1:

Debit Treasury Stock $1,750

Credit Cash Account $1,750

To record the repurchase of 175 shares of common stock for $10 per share.

October 1:

Debit Cash Account $1,500

Credit Treasury Stock Account $1,500

To record the reissue of 125 shares of treasury stock for $12 per share.

2. Selection of  whether each of these transactions would increase (+), decrease (?), on total assets, total liabilities, and total stockholders' equity:

                                        Transaction   Assets   Liabilities    Stockholders

                                            Total          Total          Total              Equity

Issue common stock         $35,100       +$35,100                    +$35,000

Issue preferred stock         $6,475        +$6,475                       +$6,475

Declare cash dividends      $2,280                        +$2,280      ?$2,280      

Pay cash dividends             $2,280       ?$2,280   ?$2,280

Repurchase treasury stock  $1,750       ?$1,750                        ?$1,750

Reissue treasury stock       $1,500       +$1,500                        +$1,500

Explanation:

a) Data and Calculations:

Authorized share capital:

$10 par preferred

$1 par value common

Issued, beginning of 2015:

Preferred = 125 shares

Common = 2,700 shares

b) The issue of 2,700 additional shares of common stock for $13 per share totalled $35,100.  This amount is credited to the Common Stock and the receipt of cash debited to the Cash Account.  The same is applicable with respect to the 175 additional shares issued at $37 per share.

c) When a cash dividend is declared, the stockholders of record on the record date of June 15 are noted, since they are the only ones that will participate in the dividends.  The accounting records are debit to the dividend account and a credit to the Dividends Payable account, establishing the liability.  The payment for the declared dividend is recorded with a debit to the Dividends Payable account to close the liability and a credit to the Cash Account.

d) Treasury stock is a stock of common stock repurchased by the company.  The issue and reissue of treasury stock are treated in the treasury stock account if the costing method is used, otherwise, the par-value method would be operational.

Walnut has received a special order for 2,700 units of its product at a special price of $200. The product normally sells for $260 and has the following manufacturing costs: Per unit Direct materials $ 64 Direct labor 34 Variable manufacturing overhead 44 Fixed manufacturing overhead 103 Unit cost $ 245 Walnut is currently operating at full capacity and cannot fill the order without harming normal production and sales. If Walnut accepts the order, what effect will the order have on the company’s short-term profit?
a. $162,000 decrease
b. $121,500 increase
c. $121,500 decrease
d. Zero.

Answers

Answer:

a. $162,000 decrease

Explanation:

Sales                                                                          $540,000

(2700 unit * $200)

Less:

Direct materials                                  $172,800

(2700 unit * 64)

Direct labor                                         $91,800

(2,700 unit * $34)

Variable manufacturing overhead     $118,800

(2700 unit * $44)

Contribution loss from existing sale  $318,600       $702,000

2700 unit * ($260-$64-$34-$44)

Effect on Net operating income                              -$162,000

Pearl Corporation issued 1,700 $1,000 bonds at 103. Each bond was issued with one detachable stock warrant. After issuance, the bonds were selling separately at 98. The market price of the warrants without the bonds cannot be determined. Use the incremental method to record the issuance of the bonds and warrants.
ex. account title DR
Account title CR

Answers

Answer:

Solution as seen below

Explanation:

Bond = 1,700 × $1,000 × 98%

= $1,666,000

Allocation :

Issue price $1,751,000

(1,700 × $1,000 × 103%)

Bonds ( $1,666,000 )

Warrants $85,000

($1,751,000 - $1,666,000)

Bond face value $1,700,000

(1,700 × $1,000)

Allocated FMV ($1,666,000)

Discounts $34,000

($1,700,000 - $1,666,000)

Duerr company makes a $73,000, 90-day, 10% cash loan to Ryan Co. The maturity value of the loan is: (Use 360 days a year.)

Answers

Answer: $74,825

Explanation:

Maturity value is the amount that a borrower will pay to the lender when the loan matures.

Based on the above analysis, the interest will be:

= $73,000 × 10% × 90/360

= $73,000 × 0.1 × 0.25

= $1825

Maturity value will now be the addition of the principal and the interest. This will be:

= $73,000 + $1825

= $74,825

Metals and energy currency futures contracts are actively traded on Group of answer choices propane. gold. All of the options are correct. gold and silver. silver.

Answers

Answer: All of the options are correct.

Explanation:

Futures refer to a Derivative Instrument contract that mandates a person to buy an asset (underlying asset) at a future date and at a certain price. This enables the buyer of the contract to be certain of an asset's price in future thereby getting rid of various risks.

Metal futures are mostly traded on gold, silver, and copper and energy futures are traded on energy resources like oil and natural usable gas like Propane which is used for most gas related appliances in the household such as cooking gas.

four (4) ways to harvest an investment in a business.

Answers

Answer:

Harvesting an investment in a business

Four ways to harvest:

a. Outright sale of a company or the investment

b. Issue of Initial Public Offering (IPO)

c. Gradual elimination of a product, especially after the cow stage.

d. Withdrawal of additional investment and earning of profits.

Explanation:

These strategies can be employed by a business to reap the fruits from an investment.  The purpose for the investment and the risk profile of the investor determines the actual strategy or combination of strategies used by the investor.

A producer can produce a product at a variable cost per unit of $7. The producer can sell the product for $10 each. If the fixed cost is $60,000.

Required:
a. How many units must the producer sell to break-even?
b. What is revenue at 35,000 units?
c. What is total cost at 35,000 units?
d. How many units must the producer sell in order to earn a profit of $60,000?

Answers

Answer:

a.

Break even in units = 20000 units

b.

Revenue at 35000 units = $350000

c.

Total cost (35000 units) = $305000

d.

Units required for target profit = 40000 units

Explanation:

a.

The break even in units is the number of units that must be sold in order to earn enough total revenue as to cover total costs. The break even in units can be calculated as follows,

Break even in units = Fixed cost / Contribution margin per unit

Where,

Contribution margin per unit = Selling price per unit - Variable cost per unit

Contribution margin per unit = 10 - 7 =$3

Break even in units = 60000 / 3

Break even in units = 20000 units

b.

Revenue = Price * Quantity

Revenue at 35000 units = 10 * 35000

Revenue at 35000 units = $350000

c.

Total cost = Variable cost + Fixed cost

Total cost (35000 units) = 7 * 35000 + 60000

Total cost (35000 units) = $305000

d.

To calculate the units required to earn a target profit, we simply add the target profit amount to the fixed costs in the break even in units equation.

Thus, the number of units required to earn a target profit of $60000 is,

Units required for target profit = (60000 + 60000) / 3

Units required for target profit = 40000 units

Which of the following countries would likely have the greatest success is exporting television and other media to Mexico?

a. Brazil
b. Canada
c. Japan
d. Spain

Answers

Answer:

d. Spain

Explanation:

The country that would have the greatest success in doing this would be Spain. This is mainly due to the fact that Mexico's main language is Spanish just like in Spain (even though the dialect is different). The other countries listed all speak different languages which will not fair well with Mexican audiences since they will not understand the media. In Brazil, they speak Portuguese. In Canada, they speak English. In Japan, they speak Japanese.

The cash register tape for Bluestem Industries reported sales of $28,372.00.

Record the journal entry that would be necessary for each of the following situations. (a) Cash to be accounted for exceeds cash on hand by $52.00. (b) Cash on hand exceeds cash to be accounted for by $26.50. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 52.75.)

Answers

Answer:

Bluestem Industries

Journal Entries

a) Cash to be accounted for exceeds cash on hand by $52.00

Debit Cash Shortage $52.00

Credit Cash Account $52.00

To record the cash shortage.

b) Cash on hand exceeds cash to be accounted for by $26.50

Debit Cash Account $26.50

Credit Cash Overage $26.50

To record the cash overage.

Explanation:

Handling cash in Bluestem Industries will occasionally give rise to cash shortages and cash overages.  The best practise is to enact a company policy to guide actions and decisions with respect to cash shortages and overages.  And then the accounting for these will be in accordance with the policy.  However, the problem of shortages and overages may be pointing at other underlying problems involved in cash handling.  Where only the shortages are reported frequently, then the company may need to find ways to minimize cash handling, e.g. using credit cards to receive payments and refunding employees for expenses through bank accounts.

Which of the following statements is not true about self-awareness?

a. Self-awareness involves a capacity to monitor and control biases that potentially affect your decision making.
b. Managers who have low self-awareness are superior performers.
c. Self-awareness can be increased by acquiring multiple experiences in diverse situations and with diverse others.
d. Self-awareness is best described as the capacity for introspection and the ability to reconcile oneself as an individual separates from the environment and other individuals.

Answers

Answer:

b. Managers who have low self-awareness are superior performers.

Explanation:

Self-awareness can be defined as a mental process, which occurs when an individual has knowledge about himself, about his knowledge, his actions and attitudes.

Therefore, in the workplace, having self-awareness is essential for a manager to achieve high performance, as this is a skill that includes knowing your skills, values, internal resources that ensure that there is the possibility of better monitoring of environments and oneself, control of emotions and improved perception of oneself and others.

This is a characteristic that adds to a manager 's assertive ability to establish communication focused on ethics, mutual respect, cordiality, etc.

The statement that is not true about self awareness from the list is B. "Managers who have low self-awareness are superior performers."

Self awareness refers to the ability of one to understand their thoughts, feelings, impulses and actions. Being self aware is a very important leadership attribute.

Therefore the statement that 'managers who have low self awareness are superior performers' is wrong.

A manager that lacks self awareness will definitely not perform their job effectively.

Self awareness helps one to become better at making decisions, it helps control biases, communicate more effectively and build good relationships in the work place or other places.

Thus, we can conclude that managers who have low self awareness are not superior performers.

Learn more about self awareness here https://brainly.com/question/2071859?referrer=searchResults

The shareholders' equity of Green Corporation includes $376,000 of $1 par common stock and $560,000 par of 7% cumulative preferred stock. The board of directors of Green declared cash dividends of $66,000 in 2021 after paying $36,000 cash dividends in each of 2020 and 2019. What is the amount of dividends common shareholders will receive in 2021

Answers

Answer:

The amount of dividends common shareholders will receive in 2021 is $20,400

Explanation:

Arrears in Preferred Stock Dividend = (560,000*7%*2 - 36,000 - 36000)

Arrears in Preferred Stock Dividend = 78,400 - 36,000 - 36,000

Arrears in Preferred Stock Dividend = $6,400

Current Preferred Stock Dividend = 560,000 * 7%

Current Preferred Stock Dividend = $39,200

The amount of dividends common shareholders = $66,000 - $39,200 - $6,400

The amount of dividends common shareholders = $20,400

A 12-year capital lease specifies equal minimum annual lease payments. Part of this payment represents interest and part represents a reduction in the net lease liability. The portion of the minimum lease payment in Year 10 applicable to the reduction of the net lease liability should be:

Answers

Answer:

More than in year 8

Explanation:

A capital lease is a type of lease in which the lesser financed only the asset and all other ownership rights would be transferred to the lessee

In the given situation, the 12-year capital lease is equivalent to the annual lease payment at minimum cost

This payment involves the interest and the reduction amount

Now in the year 10 the reduction made to the lease liability should be more than in the year 8

Bluegill Company sells 7,500 units at $320 per unit. Fixed costs are $120,000 and income from operations is $1,560,000. Determine the following: Round the contribution margin ratio to two decimal places.
a. Variable cost per unit $
b. Unit contribution margin $ per unit
c. Contribution margin ratio %

Answers

Answer:

a) $96 per unit

b) $224 per unit

c) 70%

Explanation:

We will have to compute variable cost and contribution margin

Sales $2,400,000

7,500 × 320

Less; Variable cost $720,000

Contribution margin $1,680,000

Less : Fixed cost $120,000

Operating income. $1,560,000

a) Variable cost per unit

= Total variable cost ÷ Total number of units

= $720,000 ÷ 7,500 units

= $96 per unit

b) Unit contribution margin

= Selling price per unit - Variable cost per unit

= $320 - $96

= $224

c) Contribution margin ratio

= (Selling price per unit - Variable cost per unit) ÷ Selling price per unit × 100

= ($320 - $96) ÷ $320 × 100

= $224 ÷ 320 × 100

= 70%

The break-even point is a.the maximum possible operating loss. b.where the total sales line intersects the total costs line on a cost-volume-profit chart. c.the total fixed costs. d.the maximum possible operating income.

Answers

Answer:

The answer is B.

Explanation:

To a layman, break-even point is the point where an entity neither make profit nor loss. It is the point where total revenue equals total cost(where the total sales line intersects the total costs line on a cost-volume-profit chart).

Points greater or above this intersection or point mean the firm is making profit and points lesser or below this intersection or point mean the firm is making loss.

If the Fed increases the discount rate, which of the following accurately describes the sequence of events that will follow in the banking system, finally leading to a decline in money supply?
A. Reserves ↓: Excess reserves ↓; Loans ↓; Deposits ↓; Money supply ↓
B. Loans ↓; Deposits ↓; Reserves ↓; Excess reserves ↓; Money supply ↓
C. Deposits ; Reserves: Excess reserves; Loans ↓; Money supply ↓
D. Excess reserves ↓; Reserves ↓; Loans ↓; Deposits ↓; Money supply ↓

Answers

Answer: A. Reserves ↓: Excess reserves ↓; Loans ↓; Deposits ↓; Money supply ↓

Explanation:

The discount rate is the rate at which the Fed lends money to banks and other depository type institutions. Normally banks have a reserve requirement that the Fed requires of them which states how much they are to leave with the Fed as a reserve. Banks tend to fall short of this reserve sometimes and so can borrow from the Fed to balance it off.

If the Fed increase the rate at which these banks can borrow, they will not want to do so thus leaving their Reserves at the Fed lower than it should be. They will then use their excess reserves which is money kept in reserve more than the Fed requires, to balance off their reserve at the Fed.

As a result of this reduction in their Excess reserve, they will have less money to give out as loans. With less loans being made, people will not have as much money to deposit after taking the loans. Money supply will then fall as a whole.

A firm pays a current dividend of $1.00 which is expected to grow at a rate of 5% indefinitely. If current value of the firm’s shares is $35.00, what is the required return based on the constant growth dividend discount model (DDM)?

Answers

Answer:

8%

Explanation:

A firm pays a current dividend of $1

The growth rate is 5%

= 5/100

= 0.05

The current value of the firm's share is $35

Therefore, the required return using the constant growth discount dividend model can be calculated as follows

K = 1×(1+0.05)/35 + 0.05

K= 1×1.05/35 + 0.05

= 1×0.03 + 0.05

= 0.03 + 0.05

= 0.08×100

= 8%

Hence the required return is 8%

McKerley Corp. has preferred stock outstanding that will pay an annual dividend of $3.70 per share with the first dividend exactly 14 years from today. If the required return is 3.6 percent, what is the current price of the stock?

Answers

Answer:

$64.89

Explanation:

Calculation for the current price of the stock

First step is to find the preference stock value at end of 13 years

Using this formula

P13= Annual dividend/Required return

Let plug in the formula

P13=$3.70/.036

P13= $102.78

The second step is to calculate for the current price of the stock

Using this formula

P0= P13/(1+Required return)^Dividend years

Let plug in the formula

P0= $102.78/(1 + .036)^13

P0=$102.78/(1.036)^13

P0=$102.78/1.5837

P0=$64.89

Therefore the current price of the stock will be $64.89

World Class Rings produces class rings. Its best-selling model has a direct materials standard of 16 grams of a special alloy per ring. This special alloy has a standard cost of $63.30 per gram. In the past month, the company purchased 16,800 grams of this alloy at a total cost of $1,061,760. A total of 16,300 grams were used last month to produce 1,000 rings.
Requirements:
1. What is the actual cost per gram of the special alloy that World Class Rings purchased last month? (Round your answer to the nearest cent.) The actual cost per gram of the special alloy that World Class Rings purchased last month is $_____.
2. What is the direct material price variance? (Abbreviations used: DM = Direct materials) Begin by determining the formula for the price variance, then compute the price variance for direct materials.
3.·What is the direct material quantity variance? (Abbreviations used: DM = Direct materials) Determine the formula for the quantity variance, then compute the quantity variance for direct materials.
4. How might the direct material price variance for the company last month be causing the direct material quantity variance?
The_____direct material price variance might mean that World Class Rings purchased a______. As a result, the company______quantity (efficiency) variance alloy than the standard allows. This accounts for the_____quantity (efficiency) variance.

Answers

Answer:

1. What is the actual cost per gram of the special alloy that World Class Rings purchased last month? (Round your answer to the nearest cent.) The actual cost per gram of the special alloy that World Class Rings purchased last month is $_____.

= $1,061,760 / 16,800 grams = $63.20 per gram

2. What is the direct material price variance? (Abbreviations used: DM = Direct materials) Begin by determining the formula for the price variance, then compute the price variance for direct materials.

direct materials price variance = (AP - SP) x AQ = ($63.20 - $63.30) x 16,300 = -$1,630 favorable variance

3.·What is the direct material quantity variance? (Abbreviations used: DM = Direct materials) Determine the formula for the quantity variance, then compute the quantity variance for direct materials.

direct materials quantity variance = SP x (AQ - SQ) = $63.30 x (16,300 - 16,000) = $18,990 unfavorable variance

4. How might the direct material price variance for the company last month be causing the direct material quantity variance?

The FAVORABLE direct material price variance might mean that World Class Rings purchased a LOWER QUALITY MATERIAL. As a result, the company USED MORE ALLOW THAN STANDARD  quantity (efficiency) variance alloy than the standard allows. This accounts for the UNFAVORABLE quantity (efficiency) variance.

Idaho Industries Inc. is considering a project that has an initial aftertax outlay or aftertax cost of​ $450,000. The respective future cash inflows from its fiveyear project for years 1 through 5 are​ $95,000 each year. Idaho expects an additional cash flow of​ $60,000 in the fifth year. The firm uses the IRR method and has a hurdle rate of​ 10%. Will Idaho accept the​ project? A. Idaho accepts the project because it has an IRR greater than​ 10%. B. Idaho accepts the project because it has an IRR greater than​ 5%. C. Idaho rejects the project because it has an IRR less than​ 10%. D. There is not enough information to answer this question.

Answers

Answer:

c

Explanation:

Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested

IRR can be calculated using a financial calculator

Cash flow in year 0 =  $-450,000

Cash flow each year from year 1 to 4 = $95,000

Cash flow in year 5 = $95,000 + $60,000 = $155,000

IRR = 5.62%

Idaho would reject the project because the IRR is less than the hurdle rate

To find the IRR using a financial calculator:

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 IRR button and then press the compute button.  

Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales $ 20,000 Variable expenses 12,000 Contribution margin 8,000 Fixed expenses 6,000 Net operating income $ 2,000 Required: 1. What is the contribution margin per unit

Answers

Answer:

Unitary contribution margin= $8

Explanation:

Giving the following information:

Sales $ 20,000

Variable expenses 12,000

Contribution margin 8,000

To calculate the unitary contribution margin, we need to use the following formula:

Unitary contribution margin= total contribution margin / total units

Unitary contribution margin= 8,000 / 1,000

Unitary contribution margin= $8

Schwab’s customers can assemble their own investment portfolios with its mutual fund evaluator tool, an example of

Answers

Answer:

A choiceboard.

Explanation:

This is generally described to be a graphical view or a teaching pattern where a tutor allows the said students to use these graphical knowledge to learn and understand a concept been impacted to them at their own pace. This choiceboard is been set up for so many reasons which may include; the encouraging of communication by giving the children means to request a particular object, also giving children certain visual prompt to say the correct words, it is also seen to streamline the selection of choice down there which could be a selection of choices.

Nordstrom, Inc. operates department stores in numerous states. Suppose selected financial statement data (in millions) for 2020 are presented below.
End of Year Beginning of Year
Cash and cash equivalents $1,424 $140
Accounts receivable (net) 4,000 3,800
Inventory 1,800 1,800
Other current assets 636 591
Total current assets $7,860 $6,331
Total current liabilities $3,930 $3,122
For the year, net credit sales were $8,258 million, cost of goods sold was $5,328 million, and net cash provided by operating activities was $1,251 million.
Instructions:
Compute the current ratio, current cash debt coverage, accounts receivable turnover, average collection period, inventory turnover, and days in inventory at the end of the current year.

Answers

Answer and Explanation:

The computation is shown below:-

1. Current ratio is

= Current Assets ÷ Current Liabilities

= $7,860 ÷ $3,930

= 2

2. Current cash debt coverage is

= Net Cash Provided by Operating Activities ÷ Average Current Liabilities

Average Current Liabilities = ($3,930 + $3,122) ÷ 2

= $3,526

Current Cash Debt Coverage Ratio = $1,251 ÷ $3,526

= 25.48%

3. Accounts receivable turnover is

= Net Credit Sales ÷ Average Accounts Receivables

= $8,258 ÷ (($4,000 + $3,800) ÷ 2)

= $8,258 ÷ $3,900

= 2.12 times

4. Average collection period is

= 365 ÷ Account Receivable Turnover

= 365 ÷ 2.12

= 172.17

5. Inventory Turnover is

= Cost of Goods Sold ÷ Average Inventory

= $5,328 ÷ ((1,800 + 1,800) ÷ 2

= $5,328 ÷ 1,800

= 2.96

6. Days in Inventory is

= 365 ÷ Inventory Turnover Ratio

= 365 ÷ 2.96

= 123.31 days

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