Answer:
A.
Explanation:
Frederick Herzberg was an American behavioral scientists who proposed the theory of Two-Factors. In his theory, he defined that an employee is motivated by two-factors, viz., motivators and hygience factors.
He remarks that motivators such as recognition and achievement motivates employees to work harder, whereas, hygience factors such as salary also effects employees motivation to work.
Therefore, the given statement is true. Thus option A is correct.
The carrying value of bonds at maturity always equals: Multiple Choice the amount of discount or premium. the amount of cash originally received in exchange for the bonds plus any unamortized discount or less any premium. the par value of the bond. the amount of cash originally received in exchange for the bonds. the amount in excess of par value.
Answer: the par value of the bond
Explanation:
The carrying value of bonds at maturity will always be equal to the par value of the bond. The carrying value of a bond is simply refered to as the bond's face value or par value plus the premiums taht are unamortized.
We should note that during the time of maturity of the bond, there'll have been an ammortization of the discounts or premiums, while the bond's par value will be left.
The carrying value of bonds at maturity always equals to the amount of cash originally received in exchange for the bonds plus any unamortized discount or less any premium. Thus, option (b) is correct.
At maturity, bonds' carrying values will always be the same as their par values. The face value or par value of a bond plus any unamortized premiums are simply referred to as the bond's carrying value.
To put it another way, it is the total of a bond's face value, any unamortized premiums, and any unamortized discounts, if any. The par value, interest rate, and remaining maturity period of the bond must all be known before calculating the carrying value using the effective interest rate technique.
Therefore, option (b) is correct.
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The Maryville Construction Company occupies 105,800 square feet for construction of mobile homes. There are two manufacturing departments, finishing and assembly, and four service departments labeled S1, S2, S3, and S4. Information relevant to Maryville is as follows: Allocation Department Area used S1 S2 S3 S4 Finishing Assembly S1 18,600 --- 0.20 0.10 --- 0.10 0.60 S2 5,050 --- --- 0.40 0.40 --- 0.20 S3 10,100 0.20 0.20 --- 0.30 0.20 0.10 S4 5,050 0.20 0.10 0.20 --- 0.30 0.20 Finishing 30,150 --- --- --- --- --- --- Assembly 36,850 --- --- --- --- --- --- Rent paid for the area used is $736,000. How much rent is allocable to the assembly department using the direct method of allocation
Answer:
$404,800
Explanation:
Calculation to determine How much rent is allocable to the assembly department using the direct method of allocation
Using this formula
Rent =Area used by Assembly department / Total Area used by Manufacturing Departments x Total Rent paid
Let plug in the formula
Rent =36,850/ (36,850+30,150) x $736,000
Rent=36,850/67,000*$738,000
Rent=0.55*$736,000
Rent= $404,800
Therefore How much rent is allocable to the assembly department using the direct method of allocation is $404,800
Ms. T. Potts, the treasurer of Ideal China, has a problem. The company has just ordered a new kiln for $464,000. Of this sum, $58,000 is described by the supplier as an installation cost. Ms. Potts does not know whether the Internal Revenue Service (IRS) will permit the company to treat this cost as a tax-deductible current expense or as a capital investment. In the latter case, the company could depreciate the $58,000 straight-line over 5 years. The tax rate is 30% and the opportunity cost of capital is 5%.
a. What is the present value of the cost of the kiln if the installation cost is treated as a separate current expense?
b. What is the present value of the cost of the kiln if the installation cost is treated as a part of the capital investment?
Answer:
Ideal China
a) The present value of the cost of the kiln if the installation cost is treated as a separate current expense is:
= $318,304.
b) The present value of the cost of the kiln if the installation cost is treated as a part of the capital investment is:
= $363,776.
Explanation:
a) Data and Calculations:
Present value factor for 5 years at 5% = 0.784
Cost of new kiln = $464,000
Installation cost = $58,000
Present value of the cost of the kiln if the installation cost is treated as a separate current expense = $406,000 * 0.784 = $318,304
Present value of the cost of the kiln if the installation cost is treated as a part of the capital investment = $464,000 * 0.784 = $363,776
b. Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $5,400 credit. c. Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $1,900 debit.
Question Completion:
Daley Company estimates uncollectible accounts using the allowance method at December 31. It prepared the following aging of receivables analysis.
Days Past Due
Total 0 1 to 30 31 to 60 61 to 90 Over 90
Accounts
receivable $570,000 $396,000 $90,000 $36,000 $18,000 $30,000
Percent uncollectible 1% 2% 5% 7% 10%
a. Complete the below table to calculate the estimated balance of Allowance for Doubtful Accounts using the aging of accounts receivable method.
Answer:
Daley Company
a. The estimated balance of Allowance for Doubtful Accounts using the aging of accounts receivable method is:
= $11,820.
b. Adjusting Journal Entry:
Debit Bad debts expense $6,420
Credit Allowance for Doubtful Accounts $6,420
To record bad debts expense and bring Allowance balance to $11,820.
c. Adjusting Journal Entry:
Debit Bad debts expense $13,720
Credit Allowance for Doubtful Accounts $13,720
To record bad debts expense and bring Allowance balance to $11,820.
Explanation:
a) Data and Calculations:
Ageing of Accounts Receivable:
Days Past Due
Total 0 1 to 30 31 to 60 61 to 90 Over 90
Accounts
receivable $570,000 $396,000 $90,000 $36,000 $18,000 $30,000
Percent uncollectible 1% 2% 5% 7% 10%
Allowance $11,820 $3,960 $1,800 $1,800 $1,260 $3,000
Bad Debts Expense:
Allowance for Doubtful Accounts:
b. c.
Unadjusted balance $5,400 credit $1,900 debit
Adjusted balance 11,820 credit 11,820 credit
Bad debts expense $6,420 $13,720
The Allied Corporation analyzes a project that requires an immediate investment of $440. Allied estimates that at the end of the first year the project will generate a cash flow of $660, but that at the end of the second year, when the project ends, it will generate a negative cash flow of $85. The project's required rate of return is estimated to be 7.50%. Calculate the NPV of Allied's project.
Answer:
NPV = $100.4002 rounded off to $100.40
Explanation:
The NPV or net present value is the present value of a project or business's cash flows which are calculated by deducting the cash outflows from the cash inflows. NPV is a tool or criteria used for investment and project appraisal. The NPV can be calculated as follows,
NPV = CF1 / (1+r) + CF2 / (1+r)^2 + .... + CFn / (1+r)^n - Initial Outlay
Where,
CF1, CF2, ... represents the cash flows in Year 1, Year 2 and so on.r represents the discount rateNPV = 660 / (1+0.075) + [ -85 / (1+0.075)^2] - 440
NPV = $100.4002 rounded off to $100.40
YZ Company is rethinking the way it ships to its 62 customers in another city 220 miles away.
Current Shipping/Delivery Method
They currently hire an LTL (less-than-truckload) carrier to pick up and deliver these shipments. Each customer order shipped via LTL carrier costs $147.
Alternate Shipping/Delivery Method
A 3PL (third-party logistics provider) has approached XYZ Company and suggested that they make full truckload (TL) shipments from their facility to the 3PL's warehouse in the customers' city. The 3PL would then break the bulk shipment (TL or truckload shipment) into individual customer orders to be shipped locally by an LTL carrier. The relative data for this alternate shipping method are as follows:
Full TL shipment cost (220 miles) = $675
Average order weight = 750 lbs.
Warehouse break-bulk fee (per 100 lbs., a.k.a. per "hundred weight") = $13
Local LTL delivery fee = $36
1. What is the total cost of delivering to all customers via LTL carrier (current method
R=_______.
2. How much money would XYZ company save by using the alternate shipping/delivery method?
R=______.
3. At what number of customers would the cost of these two methods be the same?
R=______.
Answer:
1. Total cost of customer order shipped via LTL carrier is $9,114.
2. XYZ company would save $162 by using the alternate shipping/delivery method.
3. The cost of these two methods would be the same when the number of customers is approximately 6.
Explanation:
To ease answering the question, let us first the define as follows:
N = Number of customers = Number of Order
A = Each customer order shipped via LTL carrier costs = $147
B = Average order weight = 750
C = Warehouse break-bulk fee per hundred weight = 13
D = Total cost of weight = ((N * B) / 100) * C
E = Local LTL delivery fee = $36
F = Total Local LTL delivery fee = N * E
G = Full TL shipment cost (220 miles) = 675
H = Total cost of shipping using 3PL = D + F + G
I = Total cost of customer order shipped via LTL carrier = N * A
J = Difference between the cost of the two methods = I - H
1. What is the total cost of delivering to all customers via LTL carrier (current method
This can be calculated using E above as follows:
Total cost of customer order shipped via LTL carrier = E = N * A = 62 * $147 = $9,114
2. How much money would XYZ company save by using the alternate shipping/delivery method?
From the definitions above, we have:
N = Number of orders = 62
D = Total cost of weight = ((N * B) / 100) * C = ((62 * 750) / 100) * 13 = $6,045
F = Total Local LTL delivery fee = N * E = 62 * 36 = $2,232
G = Full TL shipment cost (220 miles) = $675
H = Total cost of shipping using 3PL = D + F + G = $6,045 + $2,232 + $675 = $8,952
I = Total cost of customer order shipped via LTL carrier = $9,114
J = Difference between the cost of the two methods = I - H = $9,114 - $8,952 = $162
Therefore, XYZ company would save $162 by using the alternate shipping/delivery method.
3. At what number of customers would the cost of these two methods be the same?
H = Total cost of shipping using 3PL = D + F + G = (((N * B) / 100) * C) + (N * E) + G ............ (1)
Substituting all the relevant value into equation (1), we have:
H = (((N * 750) / 100) * 13) + (N * 36) + 675
I = N * 147
Equating H and I and solve for N, we have:
(((N * 750) / 100) * 13) + (N * 36) + 675 = N * 147
((N0.01 * 7.50) * 13) + 675 = N147 - N36
(N0.075* 13) + 675 = N111
N0.975 + 675 = N111
675 = N111 - N0.975
N110.025 = 675
N = 675 / 110.025
N = 6.13496932515337.
By approximating to a whole number since we are talking about human being, we have:
N = 6
At what number of customers would
Therefore, the cost of these two methods would be the same when the number of customers is approximately 6.
What is true of a good at a market clearing price?
A)
There is no competitive market for the good.
B)
Quantity supplied is greater than quantity demanded.
C)
Producers must lower inventory in order to increase demand.
D)
The quantity of a good demanded is equal to the quantity supplied.
Answer:
D. The quantity of a good demanded is equal to the quantity supplied.
Explanation:
Deman will not change, but supply decrease. Demand will decrease.
Select the statement that best describes money's function as a standard of deferred payment.
a. The purchasing power of a currency is relatively stable over time
b. A currency is widely accepted in exchange for goods and services and therefore makes economic transactions easier.
c. A currency can be used to express the value goods and services that are both relatively expensive and goods and services that are relatively cheap.
d. People are willing to accept a currency in the future as compensation for debts accrued earlier
Answer:
d. People are willing to accept a currency in the future as compensation for debts accrued earlier
Explanation:
Money can be used to pay your current debts at a later date since $100 will still be $100 in the future. They might lose some of its value due to inflation, but they do not spoil or rot, and will probably be accepted in the future. imagine trying to pay an old debt with rotten tomatoes or an old cow.
For 2021, Rahal's Auto Parts estimates bad debt expense at 1% of credit sales. The company reported accounts receivable and an allowance for uncollectible accounts of $91,000 and $3,000, respectively, at December 31, 2020. During 2021, Rahal's credit sales and collections were $413,000 and $417,000, respectively, and $3,690 in accounts receivable were written off. Rahal's final balance in its allowance for uncollectible accounts at December 31, 2021, is:
Answer:
See below
Explanation:
Rahal's final balance in its allowance for uncollectible accounts at December 31, 2021 would be calculated as;
Step 1
= $413,000 × 1%
= $413,000 × 0.01
= $4,130
Step 2
= $3,000 - $3,690
= ($690)
Step 3
= $4,130 + ($690)
= $4,130 - $690
= $3,440
Therefore, Rahal's final balance in its allowance for uncollectible accounts at December 31, 2020 is $3,440
Manufacturers Southern leased high-tech electronic equipment from International Machines on January 1, 2021. International Machines manufactured the equipment at a cost of $94,000. Manufacturers Southern's fiscal year ends December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Related Information: Lease term 2 years (8 quarterly periods) Quarterly rental payments $18,200 at the beginning of each period Economic life of asset 2 years Fair value of asset $138,287 Implicit interest rate 6% Required: 1. Show how International Machines determined the $18,200 quarterly lease payments. 2. Prepare appropriate entries for International Machines to record the lease at its beginning, January 1, 2021, and the second lease payment on April 1, 2021.
Answer:
1. $18,200 per quarter
2. 1-Jan-21
Dr Lease Receivable $138,287
Dr Cost of Goods Sold $94, 000
Cr Inventory of Equipment $94,000
Cr Sales Revenue $138,287
Dr Cash $18,200
Cr Lease Receivable $18,200
1-Apr-21
Dr Cash $18,200
Cr Lease Revenue $1,801
Cr Lease Receivable $16,399
Explanation:
1. Calculation to Show how International Machines determined the $18,200 quarterly lease payments
First step is to find the Present value of annuity at period start
Lease term=n = 2 x 4 quarters
Lease term=n= 8 periods
Fair value of asset = $138,287
Implicit interest rate, i = 6%, quarterly rate = 6%/4 Implicit interest rate= 1.5%
Present value of annuity at period start at 1.5%, 8 periods
Present value of annuity at period start = 7.5982
Now let determine the quarterly payments
Quarterly payments= $138,287/7.5982
Quarterly payments = $18,200 per quarter
Therefore the quarterly lease payments is $18,200
2) Preparation of the appropriate entries for International Machines to record the lease at its beginning, January 1, 2021, and the second lease payment on April 1, 2021.
1-Jan-21
Dr Lease Receivable $138,287
Dr Cost of Goods Sold $94, 000
Cr Inventory of Equipment $94,000
Cr Sales Revenue $138,287
(To record lease at its beginning)
Dr Cash $18,200
Cr Lease Receivable $18,200
(To record lease at its beginning)
1-Apr-21
Dr Cash $18,200
Cr Lease Revenue $1,801
Cr Lease Receivable $16,399
(To record second lease payment)
Calculation of lease revenue as on April 1, 2021
Lease revenue = ($138,287 – $18,200) x 1.5%
Lease revenue= $120,087×1.5%
Lease revenue= $1,801
Lease receivable = $18,200 – $1,801
Lease receivable = $16,399
Suppose the elasticity of demand for tickets to Broadway shows is 2.0 for men and 0.3 for women. To use price discrimination to increase profits, the producers should charge lower prices to _____ because their demand is more _____. men; inelastic than that of women women; inelastic than that of men women; elastic than that of men men; elastic than that of women
Answer:
men; elastic than that of women
Explanation:
Price discrimination is when the same product is sold at different prices to customers in different markets
types of price discrimination
1. first degree price discrimination : here sellers charge each consumer at their willingness to pay in order to eliminate consumer surplus.
2. second degree price discrimination : here firms offer different prices depending on the quantity purchased. e.g. giving discounts for bulk purchases.
3, third degree price discrimination : firms charge different prices to different groups of customers. e.g. having a certain price for senior citizens, students
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.
Price elasticity of demand = percentage change in quantity demanded / percentage change in price
If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes.
Demand is inelastic if a small change in price has little or no effect on quantity demanded. The absolute value of elasticity would be less than one
Men have an elastic demand for tickets to Broadway shows
Women have an inelastic demand for tickets to Broadway shows
Since men have an elastic demand, if prices are reduced, the demand for tickets would increase and total profits of producers would increase
Classify each of the following based on the macroeconomic definitions of saving and investment.
Saving Investment
Edison purchases a certificate of deposit at his bank.
Maria purchases stock in NanoSpeck, a biotech firm.
Hilary purchases new ovens for her cupcake-baking business.
Kevin takes out a loan and uses it to build a new cabin in Montana.
Answer: See explanation
Explanation:
Savings is the income that's not spent by an economic agent. Savings relates to banking.
Investment is when capital goods are bought in order to produce further goods.
Based on the definition above, then the following are classified below:
a. Edison purchases a certificate of deposit at his bank = Savings
b. Maria purchases stock in NanoSpeck, a biotech firm. = Savings
This is savings as it wasn't a capital good that was bought.
c. Hilary purchases new ovens for her cupcake-baking business. = Investment
This is an investment as she purchases a capital good what will be used for her business.
d. Kevin takes out a loan and uses it to build a new cabin in Montana = Investment
This is an investment as the money isn't saved but rather invested for productive use.
11
Jeanne Crawford had $10,675.50 deposited in an account paying 6.5% interest compounded semiannually.
a) What is the amount in her account 2 years later?
b) What is the compound Interest?
Answer and Explanation:
The computation is shown below:
a. The amount in 2 years later is
As we know that
Amount = Principal × (1 + rate)^time period
= $10,675.50 × (1 + 6.5% ÷ 2)^2× 2
= $10,675.50 × (1 + 0.03125)^4
= $10,675.50 × 1.130982
= $12,073.80
b. Now the compound interest is
= Final Amount - principal amount
= $12,073.80 - $10,675.50
= $1,398.30
The above formulas should be applied
Allied Paper Products, Inc., offers a restricted stock award plan to its vice presidents. On January 1, 2021, the company granted 20 million of its $1 par common shares, subject to forfeiture if employment is terminated within two years. The common shares have a market price of $7 per share on the grant date. Required: 1. Determine the total compensation cost pertaining to the restricted shares. 2. Prepare the appropriate journal entries related to the restricted stock through December 31, 2022.
Answer:
See below
Explanation:
1. Total compensation pertaining to the restricted shares
= Fair value per share × Shares granted
= $7 × 20,000,000
= $140,000,000
Therefore, the total compensation cost pertaining to the restricted shares is $140,000,000
2. Journal entries as at December 31, 2021 (in million dollars)
Dr Compensation expense ($140,000,000 ÷ 2 years) $70
Cr Paid- in capital - restricted stock $70
Journal entries as at December 31, 2022 (in million dollars)
Dr Compensation expense ($140,000,000 ÷ 2 years) $70
Cr Paid in capital - restricted stock $70
Dr Paid in capital restricted stock $140
Cr Common stock (20 million shares × $1 par) $20
Cr Paid in capital in excess of par (remainder) $120
How and why would the accounting profession use the results of behavioural research in accounting
Answer:
Behavioral accounting is a subset of accounting that, in addition to accounting expertise, is concerned with behavior. It is concerned with people's attitudes and behaviors when confronted with an accounting phenomenon, which defines the actions that they will exhibit in decisionmaking. This accounting specialization addresses issues such as human informationprocessing activity, judgement accuracy, accounting problems caused by accounting information users and suppliers, and accounting information users' and producers' decisionmaking skills.
Behavioral psychology seeks to understand how people make choices, communicate with others, and affect economies and societies. The impact of accounting knowledge on conduct, administrative management (budget engagement, nonfinancial interventions, leadership, and balanced scorecard), auditing (auditorclient negotiations, auditor's judgement, and decisionmaking), and ethics (ethical decisionmaking, ethical orientation, and rationalizations for unethical behavior) are all included under the Behavioral accounting definition.
The accounting profession use the results of behavioural research in accounting so that they can understand the behaviour of different entities like a consumer or a retailer and use that in the accounting so that it can help in making a better conclusion.
What is research ?Research is a defined as the whole process of making hypothesis, collection of data; and analysis and interpretation of that data/information, in accordance with suitable methodologies and drawing the conclusion.
Behavioral research tries to find out how individuals make decisions, interact and influence other individuals, organizations, markets, and society. Behavioral research about individuals like consumers is used in accounting to analyze and study about the outcome or result like profits.
So we can say that behavioural research plays an important role in analyzing the data and for drawing the conclusion in accounting.
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On October 1, 2021, Blue Corp. issued $744,000, 7%, 10-year bonds at face value. The bonds were dated October 1, 2021, and pay interest annually on October 1. Financial statements are prepared annually on December 31. (a) Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Oct. 1, 2021 enter an account title for the journal entry on October 1, 2021enter an account title for the journal entry on October 1, 2021 enter a debit amountenter a debit amount enter a credit amountenter a credit amount enter an account title for the journal entry on October 1, 2021enter an account title for the journal entry on October 1, 2021 enter a debit amountenter a debit amount enter a credit amountenter a credit amount
Answer:
Blue Corp.
Journal Entry
Date Account Titles and Explanation Debit Credit
Oct. 1, 2021 Cash $744,000
Bonds Liability $744,000
To record the issuance of the 7%, 10-year bonds at face value.
Explanation:
a) Data and Analysis:
Face value of 7%, 10-year bonds = $744,000
Bonds issue = at face value
Issue date = October 1, 2021
Interest payment = annual
Interest payment date = October 1
Annual interest payment = $52,080 ($744,000 * 7%)
Records on December 31, 2021:
Accrual of interest for the year:
Interest Expense $13,020
Interest payable $13,020
To accrue interest for 3 months.
Records on October 1, 2022:
Interest Expense $39,060
Interest payable $13,020
Cash $52,080
To record the interest payment.
You are the manager of a firm that sells a leading brand of alkaline batteries. Click on the link below to access data on the demand for your product. Specifically, the file contains data on the natural logarithm of your quantity sold, price, and the average income of consumers in various regions around the world. Use the information provided in the excel spreadsheet to perform a log-linear regression. Excel Data File Fill in your estimates below:
Instruction:
Enter a negative number if the coefficient estimate is negative, and round your response to two decimal places.
lnQ=C ____ + _____ InP+ _____ InM
Determine the likely impact of a 3 percent decline in global income on the overall demand of your product.
a. Demand will decline by approximately 0.1%, but since income elasticity isn't significantly different from zero, it likely won't fall at all.
b. Demand will fall by nearly 10%, and income elasticity is significantly less than zero.
c. Demand will fall by nearly 1%, and income elasticity is significantly less than zero.
d. Demand will decline by approximately 3%, but since income elasticity isn't significantly different from zero, it likely won't fall at all.
Answer:
lnQ=C 1.29 + -0.07 lnP + -0.03 lnM
c. Demand will fall by nearly 1% and income elasticity is significantly less than zero.
Explanation:
Income elasticity is a major factor which impact the demand of a product. It measures the change in quantity demanded due to change in income. In the given scenario the demand for product will decline due to change in income. The income elasticity is smaller there will not be major change in demand but there will be some impact observed on the quantity demanded.
Budgeted Actual Sales volume 100 units 110 units Sales price $50 per unit $55 per unit Unit VC $30 per unit $33 per unit Input price for DL $10 per hour $12 per hour Input quantity per unit for DL 1.5 hours per unit 2 hours per unit Compute input efficiency variance for DL Group of answer choices $100 favorable $550 favorable $550 unfavorable 0.5 hours unfavorable $100 unfavorable
Answer:
Direct labor time (efficiency) variance= $550 unfavorable
Explanation:
Giving the following formula:
DL $10 per hour $12 per hour
Input quantity per unit for DL 1.5 hours per unit 2 hours per unit
To calculate the direct labor efficiency variance, we need to use the following formula:
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
Direct labor time (efficiency) variance= (110*1.5 - 110*2)*10
Direct labor time (efficiency) variance= $550 unfavorable
Waterway Industries purchased land as a factory site for $1335000. Waterway paid $120000 to tear down two buildings on the land. Salvage was sold for $8300. Legal fees of $5220 were paid for title investigation and making the purchase. Architect's fees were $46000. Title insurance cost $3900, and liability insurance during construction cost $4200. Excavation cost $15280. The contractor was paid $4500000. An assessment made by the city for pavement was $9700. Interest costs during construction were $258000. The cost of the land that should be recorded by Waterway Industries is $1479620. $1465520. $1469920. $1455820.
Answer:
$1,465,520
Explanation:
Calculation of cost of the land that should be recorded by Water ways industries
Cost of land = Purchase price + demolition of building - sales of salvage + legal fees + Title insurance cost + Payment assessment
Cost of land = $1,335,000 + $120,000 - $8,300 + $5,220 + $3,900 + $9,700
Cost of land = $1,465,520
iRobot Company is analyzing two machines to determine which one it should purchase. Whichever machine is purchased will be replaced at the end of its useful life. The company requires a 14 percent rate of return and uses straight-line depreciation to a zero book value over the life of the machine. Machine A has a cost of $487,000, annual operating costs of $29,000, and a 6-year life. Machine B costs $315,000, has annual operating costs of $51,200, and a 4-year life. The firm currently pays no taxes. Which machine should be purchased and why
Answer:
Machine A should be purchased because it has a lower equivalent annual cost . Hence, it is cheaper.
Explanation:
Equivalent Annual cost is the Present Value of the total cost over the investment period divided by the appropriate annuity factor.
Step 1 : Equivalent Annual cost of Machine A
PV of cash flows
PV of purchase cost = 487,000
PV of annual operating cost of $29,000
= 29,000× (1-(1+0.14)^(-6))/0.14
= 112,771.35
Total PV = 487,000 + 112,771.35= 599,771.35
Equivalent annual cost = 599,771.35 /3.889
Equivalent annual cost = 154,235.70
Step 2: Equivalent Annual cost of Machine B
PV of purchase cost = 315,000
PV of annual operating cost of $51,200
= 51,200× (1-(1+0.14)^(-4))/0.14
= 149,182.07
Total PV = 315,000+ 149,182.07
= 464,182.07
Equivalent annual cost = 464,182.07/2.9137
Equivalent annual cost = 159,309.51
Step 3: Compare equivalent Annual cost
Comparing the two equivalent costs, we conclude that Machine A should be purchased because it has a lower equivalent annual cost and therefore it is cheaper.
uestion 31 Oriole Company has the following inventory data: July 1 Beginning inventory 114 units at $19 $2166 7 Purchases 399 units at $20 7980 22 Purchases 57 units at $22 1254 $11400 A physical count of merchandise inventory on July 30 reveals that there are 190 units on hand. Using the LIFO inventory method, the amount allocated to cost of goods sold for July is $3686. $3914. $7486. $7714.
Answer:
$7,714
Explanation:
The computation of the cost of good sold under LIFO method is shown below
But before that following calculations need to be done
Goods sold = Beginning inventory + Purchases - Ending inventory
= 114 + (399 + 57) - 190
= 380 units
Now 380 units sold would include 57 units of July 22 purchases and balance i.e. (380-57) 323 units of July 7 purchases
So, cost of goods sold
= (57 × 22) + (323 ×20)
= $7,714
Assigning manufacturing overhead costs and other indirect costs is called a:
Answer:
Cost allocation
Explanation:
Cost allocation means the process where the identification, aggregation, and the allocating of the cost is made to the various cost objects. It plays an important role as the cost i.e. incurred for generating a particular product or rendering a service would be determined
So if the manufacturing overhead cost assigned and the other indirect cost so this we called cost allocation
The following cost behavior patterns describe anticipated manufacturing costs for 2019: raw material, $7.50/unit; direct labor, $10.50/unit; and manufacturing overhead, $297,500 $8.50/unit. Required: If anticipated production for 2019 is 35,000 units, calculate the unit cost using variable costing and absorption costing. (Round your answers to 2 decimal places.)
Answer:
Unit cost
$
Variable costing 18
Absorption costing 26.5
Explanation:
Variable costing values every unit produced at the marginal cost. Marginal cost is the sum of direct material, direct labor and variable overhead.
Marginal cost = 7.50 + 10.50 =$18
Absorption costing values every unit at full cost. Full cost is the sum of marginal and fixed overhead cost per unit,
Fixed overhead cost per unit = $297,500/35,000=8.5
Full cost = 7.50 + 10.50 + 8.50= $26.5
Unit cost
$
Variable costing 18
Absorption costing 26.5
North Pole Toys needs to decide on their newest product line for Christmas. They narrowed their options to two possibilities: Product A would incur a fixed cost of $3,000 and a variable cost of $6 per unit and sells for $7.50; Product B would incur a fixed cost of $1,200 and a variable cost of $9 per unit and sells for $10.
A. What is the break-even point for each of the two products?
B. What is the point of indifference between the two products?
Answer:
A-1. Product A break-even point = 2,000 units
A.2. Product A break-even point = 1,200 units
B. Point of indifference between the two products = 600 units
Explanation:
A. What is the break-even point for each of the two products?
Break-even point which is the point at which the total cost of production of a product is equal to the total revenue of the product can be calculated using the following formula:
Break-even point = Fixed cost / (Selling price per unit - Variable cost per unit) ........ (1)
Using equation (1), we have:
A-1. Product A break-even point = $3,000 / ($7.50 - $6) = 2,000 units
A.2. Product A break-even point = $1,200 / ($10 - $9) = 1,200 units
B. What is the point of indifference between the two products?
Point of indifference between the two products which is the point at which the total costs of the two products are the same can be calculated as follows:
Differential fixed cost = Product A fixed cost - Product B fixed cost = $3,000 - $1,200 = $1,800
Differential variable cost per unit = Product B fixed cost variable cost per unit - Product A variable cost per unit = $9 - $6 = $3
Point of indifference between the two products = Differential fixed cost / Differential variable cost per unit = $1,800 / $3 = 600 units
Note: To obtain any of the two differentials, the lower must be deducted from the higher as done above.
Diamond Company manufactures two models of cassette recorders: VCH and MTV. Based on the following production data for April, prepare a production budget.
VCH MTV
Estimated inventory (units), April 1 2,900 4,000
Desired inventory (units), April 30 6,900 5,250
Expected sales volume (units):
Eastern zone 12,500 12,960
Midwest zone 19,000 19,800
Western zone 14,500 9,840
Answer and Explanation:
The preparation of the production budget is presented below:
Particulars VCH MTV
Expected Sales:
Eastern zone 12500 12960
Midwest zone 19000 19800
Western zone 14500 9840
Add: Desired inventory 6900 5250
Less: Opening inventory (2900) (4000)
Production in units 50,000 43,850
On December 31, 2020, the Frisbee Company had 262,000 shares of common stock issued and outstanding. On March 31, 2021, the company sold 62,000 additional shares for cash. Frisbees net income for the year ended December 31, 2021, was $820,000. During 2021, Frisbee declared and paid $92,000 in cash dividends on its nonconvertible preferred stock. What is the 2021 basic earnings per share
Answer:
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Kier Company issued $700,000 in bonds on January 1, Year 1. The bonds were issued at face value and carried a 4-year term to maturity. The bonds have a 6.50% stated rate of interest and interest is payable in cash on December 31 each year. Based on this information alone, what are the amounts of interest expense and cash flows from operating activities, respectively, that will be reported in the financial statements for the year ending December 31, Year 1
Answer: Interest expense = $45500
Cash outflow = $45500
Explanation:
Based on the information that were given in the question, the amounts of interest expense and cash flows from operating activities, that will be reported in the financial statements for the year ending December 31, Year 1 will be calculated thus:
Interest expense = $700,000 × 6.50%
= $700,000 × 0.065
= $45500
The interest expense of $45500 will be reported on December 31, Year 1 in the income statement and will also be reported in the cash outflow as well. Therefore,
Interest expense = $45500
Cash outflow = $45500
Berry Bloom Co is getting ready for Mother's Day and needs to purchase bouquets of flowers which will be sold prior to the holiday. Due to the high demand leading up to Mother's Day, the bouquets of flowers are sold at $20/bouquet. However, after the holiday, the bouquets can only be sold at $10/bouquet. The bouquets of flowers are purchased at $15/bouquet. Berry Bloom Co wants to perform an analysis to determine how many bouquets should be procured in preparation for Mother's Day. This type of problem is called the Group of answer choices Economic Order Quantity Problem Nonlinear Optimization Problem Newsvendor Problem Discriminant Analysis Problem
Answer:
Berry Bloom Co.
This type of problem that requires Berry to perform an analysis to determine how many bouquets of flowers to procure in preparation for Mother's Day is a:
Newsvendor Problem.
Explanation:
a) Data and Calculations:
Selling price of bouquets of flowers = $20/bouquet
Cost price of bouquets of flowers = $15/bouquet
Profit per bouquet during Mother's Day = $5 ($20 - $15)
After-holiday selling price of the bouquets of flowers = $10/bouquet
Loss per bouquet of flower after the holiday = $5 ($15 - $10)
b) The Newsvendor model describes the challenges facing Berry Bloom as it gets ready for the Mother's Day holiday. The company must decide the volume of bouquets of flowers to procure prior to the holiday. The purchase decision becomes a problem because the demand for flowers is not certain, and the company is aware that unsold bouquets will be sold at a loss of $5 per bouquet after the holiday.
Cost behavior for variable overhead is more difficult to predict than the behavior of direct materials or direct labor cost for all the following reasons except: A. Multiple cost drivers are involved with variable overhead. B. Direct material and direct labor contain no semi-variable component. C. The variable portion of overhead must first be separated from the fixed portion. D. Variable overhead is a relatively small part of total overhead.
Answer:
D. Variable overhead is a relatively small part of total overhead.
Explanation:
The variable overhead of the cost behavior would become more difficult for estimation as compared with the behavior of direct materials or direct labor for all the given reasons but it should not be valid for the variable overhead that contains small part of the total overhead
Therefore according to the given situation, the option D is correct
Why is a bank more likely to offer you credit if you have a co-singer with good credit?
Answer:
They can see that you have had a good credit record and they will be more likely to offer you credit.
:)
Explanation:
