our parents have made you two offers. The first offer includes annual gifts of $5,000, $6,000, and $8,000 at the end of each of the next three years, respectively. The other offer is the payment of one lump sum amount today. You are trying to decide which offer to accept given the fact that your discount rate is 6.2 percent. What is the minimum amount that you will accept today if you are to select the lump sum offer? D) $17,709.48 C) $16,360.42 B) $16,407.78 E) $17,856.42 A) $16,707.06

Answers

Answer 1

Answer:

A) $16,707.06

Explanation:

The computation of the minimum amount is shown below:

Here we find the present value which is shown below:

               (in dollars)                                     (in dollars)

Year Cash flows Discount factor Present value  

1               5000               0.9416195857       4708.098

2              6000               0.8866474442     5319.885

3              8000               0.834884599      6679.077

Total                                                              16707.059


Related Questions

Evaluate the Ritz-Carlton business model and associate key quality characteristics in the operations of a hotel set-up process.

Answers

Answer:

Ritz Carlton is luxury hotel chain of America. The company has 101 luxury hotel in more than 30 countries of the world. The success of Ritz Carlton is mainly because they keep the comfort of their guests as their highest priority. Their mission statement clearly states that comfort and genuine care of their guests is utmost important to them.

Explanation:

Their business model focuses entirely on their customers. Ritz Carlton has created its leading brand by providing great ambiance to the visitors and its guest. One can dream of staying at such luxury hotel. They are famous for their hospitality of their guests. The hotel management believes on total quality management. It has set highest standard for themselves and strive to meet them by providing better and better service to its guests.

The capital budgeting method that takes into account both the size of the original investment and the discounted cash flows is the Group of answer choices

Answers

Answer:

Option D (profitability index) is the correct choice.

Explanation:

Options aren't mentioned in the issue above. Please find the full query attachment here.  

Capital budgeting seems to be the mechanism whereby the creditors assess the value of a future investment project. This corresponds to something like the timeframe by which the planned project can produce adequate income to regain the original investment.

The 3 most prevalent frameworks to contractor choosing are given below:

Payback period.Net present value.Internal rate of return.

Some other choices have no relation with the specified scenario. So that the option here is just the appropriate ones.

ABC issued callable bonds on January 1, 2018. ABC's accountant has projected the following amortization schedule from issuance until maturity: Date Cash Paid Interest Expense Increase in Carrying Value Carrying Value 1/1/2018 $194,758 6/30/2018 $7,000 $7,790 $790 195,548 12/31/2018 7,000 7,822 822 196,370 6/30/2019 7,000 7,855 855 197,225 12/31/2019 7,000 7,889 889 198,114 6/30/2020 7,000 7,925 925 199,039 12/31/2020 7,000 7,961 961 200,000 ABC buys back the bonds for $196,000 immediately after the interest payment on 12/31/2018 and retires them. What gain or loss, if any, would ABC record on this date (use a minus sign in front of the number if it is a loss)?

Answers

Answer:

Gain $370

Explanation:

Calculation for the gain or loss, if ABC record on this date 12/31/2018

Based on the information given on the amortization schedule, on this date 12/31/2018 the Carrying value was $196,370 while we were still told that ABC buys back the bonds for $196,000 on 12/31/2018

Now let calculate for the gain or loss using this formula

Gain/Loss = Carrying value- Stock bond

Let plug in the formula

Gain/Loss =$196,370-$196,000

Gain/Loss=$370

Therefore if ABC record on this date 12/31/2018, ABC will have a gain of $370

Using the periodic FIFO inventory costing method, what is the cost of the ending inventory? (Assume all sales were made on the last day of the month.) Multiple Choice $3,405. $3,445. $3,200. $3,540. $3,270.

Answers

Answer:

The question is incomplete, below is the completed question:

A company had the following purchases and sales during its first year of operations:                

January: Purchases 10 units at $120-sales 6 units

February: Purchases 20 units at $125-sales 5 units

May: Purchases 15 units at $130-sales 9 units

September: Purchases 12 units at $135-sales 8 units

November: Purchases 10 units at $140-sales 13 units

On December 31, there were 26 units remaining in ending inventory. Using the periodic FIFO inventory costing method, what is the cost of the ending inventory? (Assume all sales were made on the last day of the month.) Multiple Choice $3,405. $3,445. $3,200. $3,540. $3,270.

Answer:

The cost of ending inventory = $3,540

Explanation:

FIFO (First-in-first-out) inventory costing method is a costing method where the goods purchased first are sold first before those purchased at a later date.

In order to answer this question, let us first determine the total number of units of goods purchased during the year

Month         units

January       10

February     20

May             15

September  12

November   10

Total             67

Therefore a total of 67 units were  purchased  during the year.

Next, we are told that the ending inventory balance = 26 units

Therefore the number of units sold during the year = Total purchase - ending inventory = 67 - 26 = 41

41 units were sold during the year.

using the FIFO inventory method, the units purchased first are sold out first therefore, out of the 41 units sold:

January   = 10 units

February = 15 units

May         =  11 units

Total        = 41 units

This means that out of the 15 unit purchased in may, 11 units were sold, hence the number of units remaining = 15 - 11 = 4 units.

From this point up to November, forms the ending iniventory therefore, the the total ending inventory is calculated as follows:

Month          units          price per unit($)       Total($)

May                4                130                              520

September    12               135                            1,620

November     10               140                            1,400

Total               26                                                3,540

Therefore, the cost of ending inventory = $3,540                                      

The Talbot Company uses electrical assemblies to produce an array of small appliances. One of its high cost / high volume assemblies, the XO-01, has an estimated annual demand of 8,000 units. Talbot estimates the cost to place an order is $50, and the holding cost for each assembly is $20 per year. The company operates 250 days per year. What is the economic order quantity for the XO-01

Answers

Answer:

EOQ = 200 units

Explanation:

We can easily calculate the Economic order quantity by putting values EOQ formula. All you need is the data for calculation.

DATA

Annual demand = 8,000

Ordering cost = $50

Holding cost = $20

EOQ =?

Formula

EOQ = [tex]\sqrt{\frac{2CoD}{Ch} }[/tex]

Where

Co = Ordering cost

D = Demand

Ch = Holding cost

Solution

EOQ = [tex]\sqrt{\frac{{2(50)(8000)} }{20}}[/tex]

EOQ = [tex]\sqrt{\frac{800000}{20} }[/tex]

EOQ = 200 units

In cash basis accounting, for tax purposes:

a. Income is recognized when it is actually or constructively received and expenses are recognized when they are actually or constructively incurred, regardless of when paid.
b. Income is recognized when it is earned regardless of when received and expenses are recognized when they are actually or constructively incurred.
c. Income is generally recognized when it is actually or constructively received and expenses are generally recognized when they are paid.
d. The cash basis is not allowed for businesses reported on Schedule C.

Answers

Answer: Income is generally recognized when it is actually or constructively received and expenses are generally recognized when they are paid.

Explanation:

In cash basis accounting method, it should be noted that revenues are recognized when they are gotten while for the expenses, they are recognized when they are paid out in cash.

The cash basis for of accounting is the opposite of the accrual method of accounting whereby revenue and expenses will be recognized when incurred.

Pharoah Company had the following two transactions related to its delivery truck. 1. Paid $280 for an oil change. 2. Paid $600 to install a special gear unit, which increases the operating efficiency of the truck.Required:Prepare Pharoah's journal entries to record these two transactions.

Answers

Answer:

1.

Oil change expense             $280 Dr

     Cash                                         $280 Cr

2.

Delivery Truck Account                    $600 Dr

       Cash                                                 $600 Cr

Explanation:

1.

The cost incurred to cover the day to day expenses related to an asset which does not increase the asset's useful life or benefit but merely maintains them are recorded as revenue expenditure. Such expenses are charged as expenses to the income statement. The cost incurred for oil change which is for maintenance purpose is a revenue expenditure.

2.

The cost incurred for capital expenditure is added to the cost of the asset and systematically charged to the income statement using the depreciation. Any expense that will increase the life or operating efficiency and benefit form a fixed asset is a capital expenditure and is capitalized by adding it to the cost of the asset. So, installation of a special gear unit giving increased efficiency is a capital expenditure.

Classify the following as a population or sample:

a. Two chimpanzees chosen to carry out genetic research.
b. Statistics 201 is a course taught at a university. Professor Rauch has taught nearly 1,500 students in the course over the past 5 years. You would like to know the average grade for the course.
c. Weather reports for each day of a month in a city for a study on that city's weather during that particular month.
d. To find how many books are published in one week by a famous publishing company.
e. To test a new drug produced by a biotech company.
f. To find the number of men and women working in an IT company with 600 people.
g. To estimate the average salary of doctors in California.

Answers

Answer:

Classification as Population or Sample

a. Sample

b. Population

c. Population

d. Population

e. Sample

f. Population

g. Population

Explanation:

The population defines the whole group, while the sample is a part of the population.  This means that the sample is less than the population.  In statistical research, it is not always possible to study the whole population, unless it is not large.  Most times, only the sample is studied and conclusions are then drawn about the population size based on the characteristics discovered about the sample size.

Bailey Hill Co. uses the indirect method to determine its net cash flows from operating activities. During the course of the year, the company's Accounts Receivable increased by $28,000 and its Accounts Payable decreased by $14,000. If these are the only two adjustments required to convert net income to net cash provided by operating activities, the combined effect will be a(n):

Answers

Answer:

The answer is Net income will be reduced by $42,000

Explanation:

Indirect method of preparing cash floe starts with net income.

In cash flow provided by operating activities;

Increase is liabilities is a cash inflow while decrease in liabilities in a cash outflow.

In the same vein, increase in asset is a cash outflow while decrease in asset is a cash inflow.

The effect of these adjustments will be:

Increase in accounts receivable - ($28,000)

Decrease in accounts payable----($14,000)

Cash provided by operating activities - ($42,000)

Net income will be reduced by $42,000

Organizational learning works best when there is integrated thinking and acting at all levels of the organization, according to Peter Senge.
a) true
b) false

Answers

Answer: True

Explanation:

According to Peter Senge, he described team learning as a team skill which is required to be practiced by the team members that are involved so that they will all be able to develop their learning skills collectively.

Organizational learning works best when there is integrated thinking and acting at all levels of the organization.

A location decision for a traditional department store (e.g., Macy's) would tend to have what type of focus? revenue focus environmental focus labor focus education focus cost focus

Answers

Answer: revenue focus

Explanation:

A location decision for a traditional department store (e.g., Macy's) would tend to have revenue focus. For every organization or company, revenue plays a vital role in the organization.

A traditional department store will shift its focus to a location whereby it can meet the needs of the people daily and generate as much revenue as possible.

On the basis of the following data, the general manager of Hawkeye Shoes Inc. decided to discontinue Children’s Shoes because it reduced operating income by $30,000. Hawkeye Shoes Inc. Product-Line Income Statement For the Year Ended November 30, 20Y8 Children's Shoes Men's Shoes Women's Shoes Total Sales $280,000 $300,000 $500,000 $1,080,000 Costs of goods sold: Variable costs $(135,000) $(150,000) $(220,000) $(505,000) Fixed costs (45,000) (60,000) (120,000) (225,000) Total cost of goods sold $(180,000) $(210,000) $(340,000) $(730,000) Gross profit $100,000 $90,000 $160,000 $350,000 Selling and administrative expenses: Variable selling and admin. expenses $(100,000) $(45,000) $(95,000) $(240,000) Fixed selling and admin. expenses (30,000) (20,000) (25,000) (75,000) Total selling and admin. expenses $(130,000) $(65,000) $(120,000) $(315,000) Operating income (loss) $(30,000) $25,000 $40,000 $35,000 a. Prepare a differential analysis to determine the

Answers

Answer:

Hawkeye Shoes Inc.

Differential Analysis:

Alternative 1: Continue with Children Shoes:

Hawkeye Shoes Inc. Product-Line Income Statement For the Year Ended November 30, 20Y8

                                       Children's       Men's        Women's      Total     Sales                              $280,000    $300,000   $500,000  $1,080,000

Costs of goods sold:

Variable costs               $(135,000)  $(150,000)  $(220,000) $(505,000)

Fixed costs                       (45,000)      (60,000)     (120,000)    (225,000)

Total cost of goods

 sold                             $(180,000)  $(210,000)  $(340,000)  $(730,000)

Gross profit                   $100,000     $90,000     $160,000    $350,000

Selling and administrative expenses:

Variable selling and

 admin. expenses      $(100,000)   $(45,000)     $(95,000) $(240,000) Fixed selling and

 admin. expenses         (30,000)      (20,000)      (25,000)       (75,000)

Total selling and

 admin. expenses     $(130,000)    $(65,000)  $(120,000)   $(315,000)

Operating income

  (loss)                         $(30,000)     $25,000     $40,000      $35,000

Alternative 2: Discontinue Children Shoes:

Hawkeye Shoes Inc. Product-Line Income Statement For the Year Ended November 30, 20Y8

                                                      Men's        Women's         Total    

Sales                                         $300,000      $500,000     $800,000

Costs of goods sold:

Variable costs                         $(150,000)    $(220,000)    $(370,000)

Fixed costs                                 (60,000)       (120,000)       (180,000)

Total cost of goods sold        $(210,000)    $(340,000)     $(550,000)

Gross profit                               $90,000      $160,000       $250,000

Selling and administrative expenses:

Variable selling and admin.    $(45,000)     $(95,000)      $(140,000)

Fixed selling and admin.          (20,000)        (25,000)          (45,000)

Total selling and admin.        $(65,000)     $(120,000)      $(185,000)

Operating income (loss)         $25,000        $40,000         $65,000

Choose Alternative 2, the elimination of Children Shoes, as this increases the total profits from $35,000 to $65,000.

Explanation:

a) Data and Calculations:

Hawkeye Shoes Inc. Product-Line Income Statement For the Year Ended November 30, 20Y8

                                       Children's       Men's        Women's      Total     Sales                              $280,000    $300,000   $500,000  $1,080,000

Costs of goods sold:

Variable costs               $(135,000)  $(150,000)  $(220,000) $(505,000)

Fixed costs                       (45,000)      (60,000)     (120,000)    (225,000)

Total cost of goods

 sold                             $(180,000)  $(210,000)  $(340,000)  $(730,000)

Gross profit                   $100,000     $90,000     $160,000    $350,000

Selling and administrative expenses:

Variable selling and

 admin. expenses      $(100,000)   $(45,000)     $(95,000) $(240,000) Fixed selling and

 admin. expenses         (30,000)      (20,000)      (25,000)       (75,000)

Total selling and

 admin. expenses     $(130,000)    $(65,000)  $(120,000)   $(315,000)

Operating income

  (loss)                         $(30,000)     $25,000     $40,000      $35,000

Hawkeye Shoes Inc. differential analysis helps it to choose between alternatives 1 and 2 concerning the continuation or discontinuation of Children Shoes production.  It is an important tool in managerial accounting to helps management to make research-driven decisions.

Many gas stations with convenience stores sell gas at, or close to, cost. In these organizations, profit comes from the convenience store's products and gas is priced to

Answers

Answer: build traffic.

Explanation:

The pricing model employed by such gas stations is built in a way to drive traffic. traffic is important and has an impact in many ways  1. low traffic can bog your business down at some level.

2. When you increase your traffic along with the quality of the visitors, the better you will be able to increase your sales.

traffic in this context refers to customers the more you are able to pull customers over the more sales you make.

Suppose your yearly demand for renting DVDs is Q = 20 − 4P. If there is a rental club that charges $2 per rental plus an annual membership fee, what is the most that you would be willing to pay for the annual membership fee?

Answers

Answer:

$12

Explanation:

If P = $2 then the Q will be;

Q = 20 - 4 * 2

Q = 20 - 8

Q = 12

The maximum annual membership fee will be equal to the amount of demand. The annual membership fee cannot be greater than the demand function if so there will be decline in the demand.

_________ can give every business access to an agile workforce that is not only better suited to solving some of the problems that organizations struggle with today but in many cases will do it for free.

Answers

Complete Question:

_________ can give every business access to an agile workforce that is not only better suited to solving some of the problems that organizations struggle with today but in many cases will do it for free.

Group of answer choices

a. Crowdsourcing

b. LinkedIn

c. Social recruiting

d. Brainstorming

Answer:

a. Crowdsourcing.

Explanation:

Crowdsourcing can be defined as a process of gathering information, ideas, micro-tasks, goods and services, finances, and votes into a project or organizational task from a large group of fast growing participants, either paid or unpaid mostly through the internet. These group of participants are saddled with the responsibility of creating value by contributing significantly to an organization typically over the internet.

Crowdsourcing can give every business access to an agile workforce that is not only better suited to solving some of the problems that organizations struggle with today but in many cases will do it for free.

Sager Industries is considering an investment in equipment that will replace direct labor. The equipment has a cost of $1,200,000 with a $300,000 residual value and a 10-year life. The equipment will replace three employees who has an average total wages of $180,000 per year. In addition, the equipment will have operating and energy costs of $7,500 per year.
Determine the average rate of return on the equipment, giving effect to straight-line depreciation on the investment.

Answers

Answer:

Average rate of return = 11%

Explanation:

Depreciation = (Cost of equipment - Residual value) / Useful years

Depreciation = (1,200,000-300,000) / 10

Depreciation = 90,000

Increase in net annual income = 180,000 - 90,000 - 7,500

Increase in net annual income = 82,500

Average investment = (1,200,000 + 300,000) / 2 = 750,000

Average rate of return = Increase in net annual income / Average investment

Average rate of return = 82,500/750,000

Average rate of return = 0.11

Average rate of return = 11%

Sonic, Inc. is planning to produce 2,500 units of product in 2016. Each unit requires 3 pounds of materials at $6 per pound and a half hour of labor at $16 per hour. The overhead rate is 75% of direct labor.

Required:
a. Compute the budgeted amounts for 2016 for direct materials to be used, direct labor, and applied overhead.
b. Compute the standard cost of one unit of product.

Answers

Answer:

Results are below.

Explanation:

Giving the following information:

Production= 2,500

Each unit requires 3 pounds of materials at $6 per pound and 0.5 of labor at $16 per hour. The overhead rate is 75% of direct labor.

First, we need to calculate the total cost for direct material, direct labor, and manufacturing overhead:

Direct material= (3*2,500)*6= $45,000

Direct labor= (0.5*2,500)*16= $20,000

Manufacturing overhead= 20,000*0.75= $15,000

Total cost= $80,000

Now, the unitary cost:

unitary cost= 80,000/2,500= $32

The total factory overhead for Bardot Marine Company is budgeted for the year at $367,500. Bardot Marine manufactures two types of boats: speed boats and bass boats. The speedboat and bass boat each require three direct labor hours for manufacture. Each product is budgeted for 5,000 units of production for the year.
When required, round all per unit answers to the nearest cent.
A. Determine the total number of budgeted direct labor hours for the year in each department.
Fabrication direct labor hours
Assembly direct labor hours
B. Determine the departmental factory overhead rates for both departments.
Fabrication $ per dlh
Assembly $ per dlh
C. Determine the factory overhead allocated per unit for each product using the department factory overhead allocation rates.
Speedboat: $ per unit
Bass boat: $ per unit

Answers

Question Completion:

The speed boat requires 2 hours in fabrication and 1 hour in assembly.  The bass boat requires 1 hour in fabrication and 2 hours in assembly.

Answer:

Bardot Marine Company

A. Determination of the total number of budgeted direct labor hours in each department:

                             Speed boats    Bass boats   Total hours

Direct labor hours:

Fabrication                10,000           5,000           15,000

Assembly                   5,000          10,000           15,000

Total                         15,000          15,000           30,000

B. Determination of the departmental factory overhead rates for both departments:

Overhead rate = $367,500/30,000 = $12.25

Fabrication $ per dlh  = $12.25

Assembly $ per dlh = $12.25

C. Determination of the factory overhead allocated per unit for each product using the department factory overhead allocation rates:

Speedboat: $ per unit  = $36.75 ($12.25 x 3)

Bass boat: $ per unit =   $36.75 ($12.25 x 3)

Explanation:

a) Data and Calculations:

Total factory overhead = $367,500

                                   Speed Boats        Bass Boats

Budgeted units                5,000                5,000

Hours per unit                   3                         3

Total direct labor hour   15,000              15,000

Fabrication                        2 hrs                   1 hr    

Assembly                           1 hr                    2 hrs

Total direct labour hours:

Fabrication                   10,000                 5,000

Assembly                      5,000                 10,000

Rose Corporation, a calendar year corporation, had accumulated earnings and profits of $40,000 as of January 1, 2014. However, for the first six months of 2014 Rose Corporation had an operating loss of $36,000, and finished the year with a total net operating loss for tax year 2014 of $55,000. Rose Corporation distributed $15,000 to its shareholders on July 1, 2014. Which of the following is correct?A. The entire distribution of $15,000 is taxable as a dividend.B. The entire distribution is not taxable.C. The part of the distribution which is taxable as a dividend is $12,500.D. The part of the distribution which is taxable as a dividend is $14,000.

Answers

Answer:

C. The part of the distribution which is taxable as a dividend is $12,500.

Explanation:

Rose's total loss for the year = $55,000

we must prorate the loss: $55,000 / 12 months = $4,583.33 per month

loss allocated to the first 6 months = $4,583.33 x 6 = $27,500

retained earnings before the distribution = $40,000 - $27,500 = $12,500

since distributions must come from retained earnings to be considered dividends, then only $12,500 will be considered dividends. The remaining $2,500 will be considered a return of capital

Moe has entered into a contract with Larry. Subsequently, Moe assigns his rights in that contract to Curly. Which of the following would not prevent that assignment? Multiple Choice The assignment would violate public policy matters. The contract contains an anti-assignment clause. Larry protests the assignment and demands that Moe not make the assignment. The assignment would materially alter Larry's duties and cause an increased burden or risk to Larry.

Answers

Answer:

Larry protests the assignment and demands that Moe not make the assignment.

Explanation:

An assignment is defined as the transfer of the responsibility of performing a task or contract to another person.

In this instance Moe is trying to assign the contract he has with Larry to Curly.

Curly will now take responsibility for the execution of the contract.

Assignment is allowed if performance of the task is assured, and the other party has no grounds to object if performance will not be affected.

The situation where the assignment will not be prevented is when Larry protests the assignment and demands that Moe not make the assignment.

However the assignment can be prevented if there is an anti-assignment clause, violate public policy, or materially alter Larry's duties and cause an increased burden or risk to Larry.

An investor buys a total of 360 shares-year bond with a $1,000 face value for $800. The bond's coupon rate is 8% and interest payments are made semi-annually. Waht are the bond's yield to maturity and effective annual yield?

Answers

Answer:

YTM (Annual( = 10.13%

Effective Annual Yield =10.40%  

Explanation:

In order to calculate Yield to maturity, we need to use yield to maturity formula.

Formula: Yield to maturity = [C +(F – P)/n]/(F + P)/2

Where,

C = Coupon amount

F = Face value

n = number of periods

P = Current price

Data

C =  1000 x 8 % = 80

C (6months) = 80 x 6/12 = 40

F = $1000

n = 30 years

P = $800

Solution

YTM = 40 + (1000 – 800/30)/(1000 + 800)/2

YTM = 40 + (200/30)/(1800/2 )

YTM = 40 +( 200/30)/900

YTM = 5.068 semiannual

YTM (Annual( = 10.13%

Effective Annual Yield = [tex](\frac{1+0.1014}{2})^{2-1}[/tex]

Effective Annual Yield =10.40%  

This is where what I call a deviant comes in. Every team needs a deviant, someone who can help the team by challenging the tendency to want too much homogeneity, which can stifle creativity and learning. Deviants are the ones who stand back and say, ‘Well, wait a minute, why are we even doing this at all? What if we looked at the thing backwards or turned it inside out?’ That’s when people say, ‘Oh, no, no, no, that’s ridiculous,’ and so the discussion about what’s ridiculous comes up. Unlike the CFO I mentioned before, who derailed the team by shutting down discussions, the deviant opens up more ideas, and that gets you a lot more originality. In our research, we’ve looked carefully at both teams that produced something original and those that were merely average, where nothing really sparkled. It turned out that the teams with deviants outperformed teams without them. In many cases, deviant thinking is a source of great innovation."According to Hackman, a deviant may help a group consider _______, but if the deviant has a strong personality and limits the input of others, the problem of ________ , may arise.

Answers

Answer:

According to Hackman, a deviant may help a group consider out-of-box thinking, but if the deviant has a strong personality and limits the input of others, the problem of complacency, may arise.

Explanation:

It's from the book "Leading Teams" of J. Richard Hackman, the Edgar Pierce Professor of Social and Organizational Psychology at Harvard University and a leading expert on teams.

Which of these means of assessing candidates generally has the lowest correlation with subsequent performance?
A. Cognitive ability tests.
B. Job knowledge tests.
C. Unstructured interviews.

Answers

Answer:

Unstructured interviews

Explanation:

Sales mix, three products. The Ronowski Company has three product lines of belts—A, B, and C— with contribution margins of $3, $2, and $1, respectively. The president foresees sales of 200,000 units in the coming period, consisting of 20,000 units of A, 100,000 units of B, and 80,000 units of C. The company’s fixed costs for the period are $255,000.

What is the company’s breakeven point in units, assuming that the given sales mix is maintained?
If the sales mix is maintained, what is the total contribution margin when 200,000 units are sold? What is the operating income?
What would operating income be if 20,000 units of A, 80,000 units of B, and 100,000 units of C were sold? What is the new breakeven point in units if these relationships persist in the next period?

Answers

Answer:

1. 13,236 units

2. $85,000

3. $65,000

4. 15,938 units

Explanation:

First Determine the ratio of the sales mix as follows :

Ratio = 20,000 : 100,000 : 80,000

Reduced to lowest term  = 1 : 5 : 4

Then find the Company`s break-even point using the sales mix as follows ;

Break-even point (units) = Fixed Costs ÷ Contribution Margin as per sales mix

                                        = $255,000 ÷ ($3 × 1 + $2 × 5 + $1 × 4)

                                        = $255,000 ÷ $17

                                        = 13,235.29 or 13,236 units

Calculation of Operating Income assuming 200,000 units are sold

Contribution :

A : (1/10 × 200,000 units) × $3     =   $60,000

B : (5/10 × 200,000 units) × $2    = $200,000

C : (4/10 × 200,000 units) × $1     =   $80,000

Total Contribution                           $340,000          

Less Fixed Cost                             ($255,000)

Operating Income                             $85,000

Calculation of Operating Income if 20,000 units of A, 80,000 units of B, and 100,000 units of C were sold.

Contribution :

A : 20,000 units × $3      =  $60,000

B : 80,000 units × $2      = $160,000

C : 100,000 units × $1     = $100,000

Total Contribution             $320,000          

Less Fixed Cost                ($255,000)

Operating Income               $65,000

Determination of New Sales Mix :

Ratio = 20,000 : 80,000 : 100,000

Reduced to Lowest Term = 1 : 4 : 5

Break-even point (units) = Fixed Costs ÷ Contribution Margin as per sales mix

                                        = $255,000 ÷ ($3 × 1 + $2 × 4 + $1 × 5)

                                        = $255,000 ÷ $16

                                        = 15,937.5 or 15,938 units

When convertible preferred stock is converted into common stock:______.
a. cash is debited.
b. a gain or loss can be recognized.

Answers

Answer:

b. a gain or loss can be recognized.

Explanation:

Convertible preferred stock is an option for shareholders with preferred shares where they have the choice of converting their preferred shares to common shares. The conversion is best done at a time when the common stock is above the conversion price. At this time, the stockholder can make a profit or gain. But if the common share is below the conversion price, the shareholder would most likely record a loss if he converts.

One disadvantage of this conversion process is that, once the preferred stock is converted to the common stock, the preferred shareholder gives up his rights as a preferred shareholder which includes no fixed dividends and higher claims on assets.

A consumer plays the role of:


A)a wage earner.

B)a saver.

C)a borrower.

D)All of these choices are correct.

Answers

Answer:

c) borrower

Explanation:

A consumer plays the role of a borrower. The consumer is the important role in the economy. Thus, option (c) is correct.

What is consumer?

The term “consumer” means purchasing a product or service for the purpose of personal use. The consumer are consumed the product and services. The consumer are buying the product and services with exchange of money.

According to the role of the consumer are the played in the significant role of the economy. The business are the sale of the goods and the services are the borrower are the paid the money to the business. The economy cycle was the continue run.

As a result, the consumer plays the role of a borrower. The consumer is the significant role in the economy. Therefore, option (c) is correct.

Learn more about on consumer, here:

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Bronco Corp. has decided to establish a subsidiary in Taiwan that will produce stereos and sell them locally in the country. It expects that its cost of producing these stereos will be one third the cost of producing them in the United States. Assuming that its production cost estimates are accurate, is Bronco‘s strategy sensible? Explain.

Answers

Answer:

No

Explanation:

Based on the description provided it can be said that Bronco's strategy is not sensible. This is because Bronco Corp. has recognized an advantage of producing stereos in Taiwan as opposed to the U.S but this is only an advantage if they sell those same stereos that were produced in the Taiwan subsidiary to the U.S. markets. Otherwise they will be selling the stereos at a much lower price in the Taiwan market, which will ultimately not be an advantage.

Assume that you are an intern with the Brayton Company, and you have collected the following data: The yield on the company's outstanding bonds is 7.75%; its tax rate is 40%; the next expected dividend is $0.65 a share; the dividend is expected to grow at a constant rate of 6.00% a year; the price of the stock is $15.00 per share; the flotation cost for selling new shares is F = 10%; and the target capital structure is 45% debt and 55% common equity. What is the firm's WACC, assuming it must issue new stock to finance its capital budget?

Answers

Answer:

8.038%

Explanation:

For the computation of the firm's WACC first we need to find out the cost of equity which is shown below:-

Cost of equity = Expected dividend ÷ (Price of the stock × (1 - Flotation cost)) + Growth rate

= $0.65 ÷ ($15.00 × (1 - 10%)) + 6.00%

= 10.81%

Now

WACC = Weight debt × (Cost of debt) × (1 - Tax rate) + Weight of equity × Cost of equity

= 45% × 7.75% × (1 - 40%) + 55% × 10.81%

= 8.038%

Identify effective decision making techniques?

Answers

Answer:

Step 1: Identify the decision. You realize that you need to make a decision. ...

Step 2: Gather relevant information. ...

Step 3: Identify the alternatives. ...

7 STEPS TO EFFECTIVE.

Step 4: Weigh the evidence. ...

Step 5: Choose among alternatives. ...

Step 6: Take action. ...

Step 7: Review your decision & its consequences.

Pedra, Inc. incurred direct labor costs of $54,000 for 6,000 hours. The standard labor cost was $55,200. During the month, Pedra assigned 6,000 direct labor hours costing $54,000 to production. The standard hours were 6,200. Journalize the transactions for Pedra, Inc. to account for this activity.

Answers

Answer and Explanation:

The Journal entry is shown below:-

1. Factory Labor Dr, $55,200

            To Labor Price Variance $1,200

            To Factory Wages Payable $54,000

(Being factory labor is recorded)

Here we debited the factory labor as it increased the expenses and we credited the labor price variance and factory wages payable as  it the factory wages payable increased the liabilities

2. Work in Process Inventory $57,040 ($55,200 ÷ $6,000 × $6,200)

             To Labor Quantity Variance $1,840

              To Factory Labor $55,200

(Being is work in progress is recorded)

Here we debited the work in progress inventory as it increased the assets and we credited the labor quantity variance and factory labor as the factory labor decreased the expenses

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