Answer:
Mar. 1
Dr Accounts Receivable-Balboa Co.254,500
Cr Sales254,500
March 1
Dr Cost of Merchandise Sold 152,700
Cr Merchandise Inventory 152,700
March 5
Dr Customers Refunds Payable30,000
Cr Accounts Receivable-Balboa Co.30,000
March 5
Dr Merchandise Inventory 17,500
Cr Estimated Returns Inventory17,500
March 29
Dr Cash 224,500
Cr Accounts Receivable-Balboa Co.224,500
Explanation:
Showcase Co Journal entries
Mar. 1
Dr Accounts Receivable-Balboa Co.254,500
Cr Sales254,500
March 1
Dr Cost of Merchandise Sold 152,700
Cr Merchandise Inventory 152,700
March 5
Dr Customers Refunds Payable30,000
Cr Accounts Receivable-Balboa Co.30,000
March 5
Dr Merchandise Inventory 17,500
Cr Estimated Returns Inventory17,500
March 29
Dr Cash 224,500
Cr Accounts Receivable-Balboa Co.224,500
Amount enter for Purchase, return of the merchandise and payment of the invoice are $254,500, $30,000 and $224,500
Journal entries;Journal entry:
Number Particular Debit Credit
A. Merchandise Inventory $254500
To Accounts Payable $254500
B. Accounts Payable $30000
To Merchandise Inventory $30000
C. Accounts Payable $224500
To Cash $224500
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Assume that at the end of 2019, Clampett, Inc. (an S corporation) distributes property (fair market value of $40,000, basis of $5,000) to each of its four equal shareholders (aggregate distribution of $160,000). At the time of the distribution, Clampett, Inc., has no corporate earnings and profits and J.D. has a basis of $50,000 in his Clampett, Inc., stock. What is J.D.'s stock basis after the distribution
Answer:
J.D.'s stock basis after the distribution is $85,000
Explanation:
In order to calculate the J.D.'s stock basis after the distribution we would have to use the following formula:
J.D.'s stock basis after the distribution=original basis +increase/decrease in basis from gain from property distribution
original basis=$50,000
basis from gain from property distribution=$40,000-$5,000
basis from gain from property distribution=$35,000
Therefore, J.D.'s stock basis after the distribution=$50,000+$35,000
J.D.'s stock basis after the distribution=$85,000
While Mary Corens was a student at the University of Tennessee, she borrowed $9,000 in student loans at an annual interest rate of 9%. If Mary repays $1,700 per year, then how long (to the nearest year) will it take her to repay the loan? Do not round intermediate calculations. Round your answer to the nearest whole number.
Answer:
The time required to repay the loan is 8 years.
Explanation:
The loan amount that the student borrowed = $9000
Annual interest rate = 9%
Repayment amount per year or annuity amount = $1700 per year
Use the below formula to calculate the number of years to repay the loan amount.
A = annuity amount
r = interest rate
n = number of years
PVF = present value of annuity
[tex]\rm PVF = \frac{A\left [1-\left ( 1+r \right )^{-n} \right ]}{r} \\[/tex]
[tex]9000 = \frac{1700\left [1-\left ( 1+ 0.09 \right )^{-n} \right ]}{0.09} \\[/tex]
[tex]9000 = 18888.9(1-1.09^{-n}) \\[/tex]
[tex]n = 7.51 \ years \ or \ 8 \ years.[/tex]
So, the time taken to repay the loan amount is 8 years.
The following costs are included in a recent summary of data for a company: advertising expense, $85,000; depreciation expense - factory building, $133,000; direct labor, $250,000; direct material used, $300,000; factory utilities, $105,000; and sales salaries expense, $150,000. Determine the dollar amount of conversion costs.
Answer:
Conversion costs= $488,000
Explanation:
Giving the following information:
depreciation expense - factory building, $133,000
direct labor, $250,000
factory utilities, $105,000
The conversion costs are the sum of direct labor and manufacturing overhead.
Manufacturing overhead= 133,000 + 105,000= 238,000
Direct labor= 250,000
Conversion costs= $488,000
Please help ASAP giving BRAINLIEST , Did I get this correct?
Answer:
No, in my opinion I would choose:
A) the properties of free-market system that determine what the outcomes will be.
Explanation:
That would be my answer because the definition of market forces is "the economic factors affecting the price of, demand for, and availability of a commodity."(off the internet) and the answer which fits that definition the most in my opinion is A.
That would be my answer at least.
Hope this helps!
On January 1, 2021, Cobbler Corporation awarded restricted stock units (RSUs) representing 29.7 million of its $1 par common shares to key officers, subject to forfeiture if employment is terminated within three years. After the recipients of the RSUs satisfy the vesting requirement, the company will distribute the shares. On the grant date, the shares had a market price of $5.2 per share. Required: 1. Determine the total compensation cost pertaining to the RSUs. 2. to 6. Prepare the appropriate journal entries.
Answer and Explanation:
The computation and the journal entries are shown below:
1) Total compensation cost
= Common shares × market price per share
= 29,700,000 × $5.2
= $154,440,000
2)The journal entries are shown below:
On Jan 1 2021
No journal entry is required for awarded the restricted stock units
On Dec 12 2021
Compensation expense (154,440,000 ÷ 3 years) $5,1480,000
Paid-in capital- restricted stock $51,480,000
(Being the compensation expense is recorded)
For recording this we debited the compensation expense as it increased the expenses and credited the paid in capital as it increased the equity
On Dec 31 2022
Compensation expense (154,440,000 ÷ 3 years) $5,1480,000
Paid-in capital- restricted stock $51,480,000
(Being the compensation expense is recorded)
For recording this we debited the compensation expense as it increased the expenses and credited the paid in capital as it increased the equity
On Dec 31 2023
Compensation expense (154,440,000 ÷ 3 years) $5,1480,000
Paid-in capital- restricted stock $51,480,000
(Being the compensation expense is recorded)
For recording this we debited the compensation expense as it increased the expenses and credited the paid in capital as it increased the equity
On Dec 31 2023
Paid-in capital - restricted stock $154,440,000
Common stock (29.7 million × $1) $29,700,000
Paid-in capital- excess of par $124,740,000 (Balancing figure)
(Being the lifting of restrictions and issuance of the shares is recorded)
For recording this we debited the paid in capital as it decreased the equity and credited the paid in capital and common stock as it increased the equity
Flyaway Travel Company reported net income for 2021 in the amount of $105,000. During 2021, Flyaway declared and paid $3,625 in cash dividends on its nonconvertible preferred stock. Flyaway also paid $25,000 cash dividends on its common stock. Flyaway had 55,000 common shares outstanding from January 1 until 25,000 new shares were sold for cash on April 1, 2021. What is 2021 basic earnings per share?
Answer:
The 2021 basic earnings per share is $1.68
Explanation:
In order to calculate the 2021 basic earnings per share we would have to use the following formula:
Basic EPS = (Net income - Preferred Dividend) / Weighted average common shares outstanding
According to given data:
Net income=$105,000
Preferred Dividend=$3,625
The calculation of the Weighted average common shares outstanding would be as follows:
Period Months Number of shares outstanding Weighted Number
A B A*B /12
Jan 1 to Mar 31 3 55,000 13,750
April 1 to Dec. 31 9 80,000 (55,000 +25,000) 60,000
(40000+10000)
The Weighted average common shares is 60,000
Therefore, Basic EPS = (Net income - Preferred Dividend) / Weighted average common shares outstanding
Basic EPS= ($105,000 - $3,625) / 60,000
Basic EPS=$1.68
In 2017, Cullumber Corporation incurred research and development costs as follows: Materials and equipment $111000 Personnel 131000 Indirect costs 171000 $413000 These costs relate to a product that will be marketed in 2018. It is estimated that these costs will be recouped by December 31, 2020. The equipment has no alternative future use. What is the amount of research and development costs that should be expensed in 2017
Answer:
The amount of research and development costs that should be expensed in 2017 is $413,000
Explanation:
In order to calculate the amount of research and development costs that should be expensed in 2017 we would have to use the following formula:
amount of research and development costs that should be expensed in 2017= Materials and equipment costs+ Personnel costs+Indirect costs
amount of research and development costs that should be expensed in 2017= $111,000+ $131,000+$171,000
amount of research and development costs that should be expensed in 2017=$413,000
The amount of research and development costs that should be expensed in 2017 is $413,000
The amount of research and development costs that should be expensed in 2020
$ 99000 + $ 119000 + $ 159000
$377,000
Option A has an expected value of $2,000, a minimum payoff of -$4,000, and a maximum payoff of $18,000. Option B has an expected value of $2,200, a minimum payoff of -$1,000, and a maximum payoff of $6,000. Option C has an expected value of $1,900, a minimum payoff of $100, and a maximum payoff of $2,000. In this situation, a risk-averse decision maker would pay __________ for his risk aversion, and a risk-seeking decision maker would pay __________ for his risk seeking.
Answer:
Option A is the answer
Explanation:
A risk-averse decision maker will go for the option with the least chance of loss incurred (the highest minimum payoff of $100) and settle for an expected value of 1900. He'll pay for his risk avoidance in this way (2200-1900 = 300) while a risk-seeking decision maker will go for the option with the highest payoff chances ($18,000), regardless of the possibility of failure. This would make the risk-seeking decision maker go for option A.
It costs Cool Clothes Company $15 to produce one pair of jeans, but they needed to discontinue production of shirts to focus on jeans. For this company, the $15 is the _______, and discontinuation of shirt production is considered their __________. opportunity cost; production cost production cost; resource cost production cost; opportunity cost resource cost; production cost
Answer:
production cost; opportunity cost
Explanation:
The $15 is the production cost and the shirt is the opportunity cost
What is opportunity cost?Simply put, opportunity cost is the alternative forgone, it is the benefit forfeited for another.
In this case, the shirt was forfeited for the production of jeans, despite the possibility of still making a profit in shirt production.
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What is the effect of just-in-time inventory strategies? A. They increase business efficiency by reducing inventory costs. B. They outsource manufacturing jobs to underdeveloped nations. C. They eliminate the need for tasks such as welding and assembling. D. They expand businesses with the use of worldwide telecommunication.
The answer is A
Explanation:
Pharoah Company has had 4 years of record earnings. Due to this success, the market price of its 500,000 shares of $4 par value common stock has increased from $15 per share to $55. During this period, paid-in capital remained the same at $6,000,000. Retained earnings increased from $4,500,000 to $30,000,000. CEO Don Ames is considering either (1) a 15% stock dividend or (2) a 2-for-1 stock split. He asks you to show the before-and-after effects of each option on (a) retained earnings, (b) total stockholders’ equity, and (c) par value per share.
Answer and Explanation:
According to the scenario, computation of the given data are as follow:-
1) 15% Stock Dividend-
Retained Earnings = Increase Value of Retained Earnings - (Total Shares × 15% Stock Dividend × Increase Value of Per Share)
= $30,000,000 - (500,000 × 15% × $55)
= $30,000,000 - $4,125,000
= $25,875,000
2) 2-for-1 stock split-
Retained earnings = $30,000,000
The 2-for-1 stock split will not impact retained earnings.
a and b) The before, after effects of each option are shown in the attachment below
c) Par value per share
Par value per share of stock dividend = $4
Par value per share of 2-for-1 stock split = $4 ÷ 2 = $2
According to the analysis, stock dividend will not make any impact.
The Converting Department of Hopkinsville Company had 1,200 units in work in process at the beginning of the period, which were 75% complete. During the period, 25,200 units were completed and transferred to the Packing Department. There were 1,360 units in process at the end of the period, which were 25% complete. Direct materials are placed into the process at the beginning of production. Determine the number of equivalent units of production with respect to direct materials and conversion costs. If an amount is zero, enter in "0".
Answer:
Equivalent Units
Material cost = 26,560
Conversion Cost= 25,540
Explanation:
We would assume the company uses weighted average method of valuation.
Under the weighted average method of valuation, to account for completed units, it is assumed that the entire degree of work required is done in the period under consideration. So there is no separation of the completed units into opening inventory and fully worked.
Equivalent units = Degree of completion (%) × Number of units
Material cost
Item Unit Equivalent unit
Completed 25,200 100% ×25200 = 25,200
Closing WIP 1,360 100%× 1,360 1360
Total equivalent units 26,560
Conversion Cost
Item Unit Equivalent unit
Completed 25,200 100% ×25200 = 25,200
Closing WIP 1,360 25%× 1,360 340
Total equivalent units 25,540
Which of the following organizations is likely to use the multiple-factor index method to estimate the market potential? a firm that manufactures auto parts a firm that provides facility management services to large offices a company that provides Web site development services for small businesses a company that manufactures diagnostic machines for hospitals a firm that manufactures fashionable clothes for teenagers
Answer:
The organization that is likely to use the multiple-factor index method to estimate the market potential is a firm that manufactures fashionable clothes for teenagers.
Explanation:
The organization that is likely to use the multiple-factor index method to estimate the market potential is a firm that manufactures fashionable clothes for teenagers because it is a consumer based organization.
Consumer marketers primarily use multiple-factor index method to estimate the market potential.
The information can be collated by a survey, questionnaire, a dedicated database or even through social media advertising target portal.
The rest of the options provided caters for businesses. for example, a company that provides Web site development services for small businesses. Business to Business marketers prefer to use market build up method.
Finch Company began its operations on March 31 of the current year. Finch has the following projected costs:
April May June
Manufacturing costs* $157,400 $193,400 $200,500
Insurance expense** 1,180 1,180 1,180
Depreciation expense 2,140 2,140 2,140
Property tax expense*** 450 450 450
*Of the manufacturing costs, three-fourths are paid for in the month they are incurred; one-fourth is paid in the following month.
**Insurance expense is $1,180 a month; however, the insurance is paid four times yearly in the first month of the quarter, (i.e., January, April, July, and October).
***Property tax is paid once a year in November.
The cash payments expected for Finch Company in the month of May are
a.$223,750
b.$184,400
c.$145,050
d.$39,350
Answer:
b.$184,400
Explanation:
Finch Company
April May June
Manufacturing costs* $157,400 $193,400 $200,500
Payment of April 1/4 $ 39350
Payment of May 3/4 $145050
Insurance expense,Depreciation expense , Property tax expense,None of these will be paid in the month of May .
The insurance is paid four times yearly in the first month of the quarter, (i.e., January, April, July, and October).
Depreciation is not paid . It is deducted from the value of the asset.
Property tax is paid once a year in November.
Total Payments in May are $ 39350 +$145050= $184,400
Choice B is the correct answer.
The focused differentiation strategy differs from the differentiation strategy in that Group of answer choices a. the focused differentiators have a broader competitive scope b. the value-creating activities of focused differentiators are more constrained. c. focused differentiators target a narrower customer market d. there are fewer risks with the focused differentiation strategy.
Answer:
The answer is option C) The focused differentiation strategy differs from the differentiation strategy in that focused differentiators target a narrower customer market.
Explanation:
Product differentiation is a marketing strategy that creates competitive advantage with designing a product superior to that of rivals, priced higher and sometimes created for exclusive users.
However, the focused differentiation strategy takes it a step further by targeting a small group of customers with ostensible goods.
The bourgeoisie are the main target for focused differentiators. They have the economic power to foot the bill and they enjoy the exclusivity of being the few to consume such products. A good example of such products is the Bugatti and Ferrari.
In performing accounting services for small businesses, you encounter the following situations per taining to cash sales. 1. Poole Company enters sales and sales taxes separately in its cash register. On April 10, the register totals are sales $30,000 and sales taxes $1,500. 2. Waterman Company does not segregate sales and sales taxes. Its register total for April 15 is $25,680, which includes a 7% sales tax. Prepare the entry to record the sales transactions and related taxes for each client.
Answer and Explanation:
According to the scenario, journal entries of the given data are as follow:-
1.Journal Entry of Poole Company
April 10
Cash A/c Dr. $31,500
To Sales A/c $30,000
To Sales tax payable A/c $1,500
(Being the sales and sales tax payable is recorded)
2. Since Register total for April $25,680 includes 7% sales tax.
So Sales of Waterman Company
= Registered Total Amount ÷ (1 + Sales Tax Rate)
= $25,680 ÷ (1 + 7%)
= $25,680 ÷ 1.07
= $24,000
Now
Sales tax = $24,000 × 7% = $1,680
Journal Entry of Waterman Company
On 15 April
Cash A/c Dr. $25,680
To Sales A/c $24,000
To Sales tax payable A/c $1,680
(Being the sales and sales tax payable is recorded)
Farah is an engineer with an idea for a flexible solar energy material that would have a wide range of military and civilian applications. She estimates that she will need approximately $300,000 to develop a prototype. Friends and family could provide about $75,000. She contacts Natalie, an angel investor, for this purpose. In this case, which of the following is likely to be true?a. Farah is unlikely to expect more than just financial support from Natalie.b. Farah is likely to receive a report from Natalie that is more thorough than those by formal venture capitalists.c. Natalie is likely to be a wealthy individual with expertise in the field.d. Natalie is unlikely to be a private investor.
Answer: Natalie is likely to be a wealthy individual with expertise in the field (C)
Explanation:
Based on the information gotten from the question, Farah is an engineer who has an idea for a flexible solar energy material which would have a wide range of civilian and military applications and she needs about $300,000 but has only gotten$75,000.
Farah then gets in touch with Natalie who is an angel investor. An angel investor is a person who gives capital for a business start-up, in exchange for ownership equity or convertible debt.
As an angel investor, to analyze good prospects of the investments, they usually have some expertise in the business field where they want to invest.
The standards for product V28 call for 8.2 pounds of a raw material that costs $19.00 per pound. Last month, 2,100 pounds of the raw material were purchased for $39,480. The actual output of the month was 230 units of product V28. A total of 2,000 pounds of the raw material were used to produce this output.The direct materials purchases variance is computed when the materials are purchased.Required:a. What is the materials price variance for the month
Answer:
$420 favorable
Explanation:
The computation of the material price variance is shown below:
Material price variance = Actual quantity × (Actual price - standard price)
= 2,100 pounds × ($39,480 ÷ 2,100 pounds - $19)
= 2,100 pounds × ($18.8 - $19)
= 2,100 pounds × $0.20
= $420 favorable
Since the standard price is greater than the actual price so it would lead to favorable variance
Hancock Medical Supply Co., earned $90,500 of revenue on account during Year 1, its first year of operation. During Year 1, Hancock collected $71,400 of cash from its receivables accounts. The company did not write-off any uncollectible accounts. It estimates that it will be unable to collect 1% of revenue on account. What is the net realizable value of receivables that will be reported on the balance sheet at December 31, Year 1
Answer:
$18,195
Explanation:
The computation of the net realizable value is shown below:
As we know that
Net Realizable Value of Receivables = Ending Accounts Receivable - Estimated Uncollectibles amount
where,
Ending balance of Accounts Receivable is
= Revenue on Account - Accounts collected
= $90,500 - $71,400
= $191,00
And,
Estimated Uncollectibles i.e Bad debt Expense is
= Revenue on Account × given percentage
= $90,500 × 1%
= $905
So, the net realizable value is
= $19,100 - $905
= $18,195
We simply applied the above formula
i. Lawyers are changing their pay structures. It used to be that they would bill hourly (top dollar for top lawyers, less experienced helpers had cheaper rates). Now they’re beginning to price like consultants—per project. Thus they must begin assessing the value-added to the client firm of the legal expertise and assistance. What advice would you give a law firm to proceed fairly and profitably?
Answer:
Prominent conjoint analysis is said to be the only thing that I would recommend to the law firming order in order to ensure that the order has proceed fairly and as well as profitably .
Due to the fact that this method of payment is said to offers different prices for different projects to both the top lawyers and the less experienced help.
Explanation:
The mode of payment that lawyers have made had turned to be the best and most interesting mode of payment structures, because before reading the above article I was not actually aware of the payment strategy to be in paying most individuals due to the fact that the most prominent conjoint analysis is said to be the only thing that I would recommend to the law firming order in order to ensure that the order has proceed fairly and as well as profitably .
Due to the fact that this method of payment is said to offers different prices for different projects to both the top lawyers and the less experienced help.
"Vaughn Corporation is considering the issue of commercial paper and would like to know the yield it should offer on its commercial paper. The corporation believes that a 0.2 percent credit risk premium, a 0.1 percent liquidity premium, and a 0.3 percent tax adjustment are necessary to sell its commercial paper to investors. Furthermore, annualized T-bill rates are 7 percent. Based on this information, Vaughn should offer ____ percent on its commercial paper."
Answer:
7.6 percent
Explanation:
Vaughn should offer 7.6 percent on its commercial paper.
This is calculated by adding the 0.2 credit risk premium to 0.1 percent liquidity premium + 0.3 percent tax adjustment + 7 percent annualized t bills rate.
= 0.1 + 0.2 + 0.3 + 7
= 7.6
Based on this Vaughn would offer 7.6 percent on its commercial paper.
(Ignore income taxes in this problem.) Assume you can invest money at a 14 percent rate of return. How much money must be invested now to be able to withdraw $5,000 from this investment at the end of each year for eight years, the first withdrawal occurring one year from now
Answer:
the original amount invested = $285,714.29
Explanation:
Let original amount invested be x
Amount to be withdrawn per year = $5,000
Total number of years = 8
Total amount to be withdrawn = 5,000 × 8 = $40,000
Next, we are told that 14% return on x is realized,
∴ 14% return on x = $40,000
0.14 × x = 40,000
x = 40,000 ÷ 0.14 = $285,714.29
Therefore, the original amount invested = $285,714.29
Irving Corporation makes a product with the following standards for direct labor and variable overhead: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct labor 0.20 hours $ 29.00 per hour $ 5.80 Variable overhead 0.20 hours $ 6.50 per hour $ 1.30 In November the company's budgeted production was 6,800 units, but the actual production was 6,600 units. The company used 1,510 direct labor-hours to produce this output. The actual variable overhead cost was $9,211. The company applies variable overhead on the basis of direct labor-hours. The variable overhead rate variance for November is:
Answer:
Manufacturing overhead rate variance= $604 favorable
Explanation:
Giving the following information:
Variable overhead 0.20 hours $ 6.50 per hour
The company used 1,510 direct labor-hours to produce this output. The actual variable overhead cost was $9,211.
To calculate the variable overhead rate variance, we need to use the following formula:
Manufacturing overhead rate variance= (standard rate - actual rate)* actual quantity
Actual rate= 9,211/1,510= $6.1
Manufacturing overhead rate variance= (6.5 - 6.1)*1,510
Manufacturing overhead rate variance= $604 favorable
Dextra Computing sells merchandise for $15,000 cash on September 30 (cost of merchandise is $12,000). The sales tax law requires Dextra to collect 5% sales tax on every dollar of merchandise sold. Record the entry for the $15,000 sale and its applicable sales tax. Also record the entry that shows the payment of the 5% tax on this sale to the state government on October 15. View transaction list Journal entry worksheet Record the cost of September 30th sales. Note: Enter debits before credits Date General Journal Debit Credit Sep 30 Record entry Clear entry View general journal
Answer and Explanation:
The journal entries are shown below:
1. On Sep 30
Cash $15750
To Sales $15,000
To Sales taxes payable ($15000 ×5%) $750
(Being the cash receipts is recorded)
For recording this we debited the cash as it increased the assets and credited the sales and sales tax payable as it increased the revenue and liabilities
2 On Sep 30
Cost of goods sold $12,000
To Merchandise inventory $12,000
(Being the cost of goods sold is recorded)
For recording this we debited the cost of goods sold as it increased the expenses and credited the merchandise inventory as it reduced the assets
3 On Oct 15
Sales taxes payable $750
To Cash $750
(Being cash paid is recorded)
For recording this we debited the sales tax payable as it reduced the liabilities and credited the cash as it decreased the assets
The I-75 Carpet Discount Store has an annual demand of 10,000 yards of super shag carpet. The annual carrying cost for a yard of carpet is $0.75 and the ordering cost is $150. The carpet manufacturer normally charges the store $8 per yard for the carpet.; however, the manufacturer has offered a discount price of $6.50 per yard if the store will order 5,000 yards. How much should the store order, and what will be the total inventory cost for that order quantity?
Answer:
5 units and $2,175
Explanation:
a. The computation of the economic order quantity is shown below:
= [tex]\sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}[/tex]
=[tex]\sqrt{\frac{2\times \text{10,000}\times \text{\$150}}{\text{\$0.75}}[/tex]
= 2,000 units
The total cost of ordering cost and carrying cost equals to
= Annual ordering cost + Annual carrying cost
= Purchase cost + Annual demand ÷ Economic order quantity × ordering cost per order + Economic order quantity ÷ 2 × carrying cost per unit
= 10,000 × $8 + 10,000 ÷ 2,000 × $150 + 2,000 ÷ 2 × $0.75
= 80,000 + $750 + $750
= $81,500
Now in case of ordering 5,000 yields at discount price of $6.50 the total cost is
= Purchase cost + Annual demand ÷ Economic order quantity × ordering cost per order + Economic order quantity ÷ 2 × carrying cost per unit
= 10,000 × $6.50 + 10,000 ÷ 5,000 × $150 + 5,000 ÷ 2 × $0.75
= $65,000 + 300 + $1,875
= $67,175
Therefore there will be 5 units should store at a time and cost of inventory is 300 + $1,875 = $2,175
Problem 7-18 Variable and Absorption Costing Unit Product Costs and Income Statements [LO7-1, LO7-2]Haas Company manufactures and sells one product. The following information pertains to each of the company’s first three years of operations: Variable costs per unit: Manufacturing: Direct materials$20Direct labor$12Variable manufacturing overhead$7Variable selling and administrative$3Fixed costs per year: Fixed manufacturing overhead$110,000Fixed selling and administrative expenses$50,000 During its first year of operations, Haas produced 40,000 units and sold 40,000 units. During its second year of operations, it produced 55,000 units and sold 30,000 units. In its third year, Haas produced 20,000 units and sold 45,000 units. The selling price of the company’s product is $46 per unit. Required:1. Compute the company’s break-even point in unit sales.2. Assume the company uses variable costing:a. Compute the unit product cost for Year 1, Year 2, and Year 3.b. Prepare an income statement for Year 1, Year 2, and Year 3.3. Assume the company uses absorption costing:a. Compute the unit product cost for Year 1, Year 2, and Year 3.b. Prepare an income statement for Year 1, Year 2, and Year 3.
Answer and Explanation:
As per the data given in the question,
a)
For computation of contribution margin per unit first we need to find out the contribution margin per unit and fixed expenses which is shown below:-
Contribution margin per unit = Selling price per unit - Variable cost per unit
= $46 - ($20 + $12 + $7 + $3)
= $46 - $42
= $4
Fixed expenses = Fixed manufacturing overhead + Fixed selling and administrative expenses
= $110,000 + $50,000
= $160,000
Break-even units = Fixed expenses ÷ Contribution margin per unit
= $160,000 ÷ 4
= 40,000 units
2. a The Computation of unit product cost is shown below:-
Particulars Year 1 Year 2 Year 3
Unit product cost :
Direct material $20 $20 $20
Direct labor $12 $12 $12
Variable manufacturing
overhead $7 $7 $7
Unit product cost $39 $39 $39
b. The preparation of Income statement is shown below:-
Income statement
Haas Company
Particulars Per unit Year 1 Year 2 Year 3
Sales unit 40,000 30,000 45,000
Sales $46 $1,840,000 $1,380,000 $2,070,000
Less:
Variable cost :
Variable manufacturing
cost $39 $1,560,000 $1,170,000 $1,755,000
Variable selling and
administrative cost $3 $120,000 $90,000 $135,000
Total variable cost $42 $1,680,000 $1,260,000 $1,890,000
Contribution margin $4 $160,000 $120,000 $180,000
Fixed expenses :
Fixed Manufacturing
overhead $110,000 $110,000 $110,000
Fixed selling and
administrative expense $50,000 $50,000 $50,000
Net Operating Income $0 -$40,000 $20,000
3. a. The computation of unit product cost for Year 1, Year 2, and Year 3 is shown below:-
Particulars Year 1 Year 2 Year 3
Produced units 40,000 55,000 20,000
Unit Product Cost:
Direct material $20 $20 $20
Direct labor $12 $12 $12
Variable manufacturing
overhead $7 $7 $7
Fixed manufacturing
overhead $2.75 $2 $5.5
($110,000 ÷ Number of unit produced)
Total cost of produced unit $41.75 $41 $44.5
3. b The Preparation of income statement for Year 1, Year 2, and Year 3 is attached in the spreadsheet.
he income statement of Sarasota Company is shown below. SARASOTA COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2020 Sales revenue $6,890,000 Cost of goods sold Beginning inventory $1,910,000 Purchases 4,410,000 Goods available for sale 6,320,000 Ending inventory 1,620,000 Cost of goods sold 4,700,000 Gross profit 2,190,000 Operating expenses Selling expenses 460,000 Administrative expenses 700,000 1,160,000 Net income $1,030,000 Additional information: 1. Accounts receivable decreased $350,000 during the year. 2. Prepaid expenses increased $160,000 during the year. 3. Accounts payable to suppliers of merchandise decreased $300,000 during the year. 4. Accrued expenses payable decreased $90,000 during the year. 5. Administrative expenses include depreciation expense of $50,000. Prepare the operating activities section of the statement of cash flows using the direct method.
Answer:
Cash flow from operating activities
Cash Receipts from Customers $7,240,000
Cash Paid to Suppliers and Employees ($6,460,000)
Net Cash from Operating Activities $780,000
Explanation:
Prepare a statement of cash flows` operating activities section as follows :
Cash flow from operating activities
Cash Receipts from Customers $7,240,000
Cash Paid to Suppliers and Employees ($6,460,000)
Net Cash from Operating Activities $780,000
Cash Receipts from Customers Calculations
Sales revenue $6,890,000
Add Decrease in Accounts Receivables $350,000
Cash Receipts from Customers $7,240,000
Cash Paid to Suppliers and Employees Calculations
Cost of goods sold $4,700,000
Add
Selling expenses $460,000
Administrative expenses $700,000
Less depreciation expense of $50,000
Decrease in Accounts Payable $300,000
Decrease in Accrued Expenses $90,000
Increase in Prepaid expenses $160,000
Cash Paid to Suppliers and Employees $6,460,000
On January 1, 20X1, Popular Creek Corporation organized SunTime Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 80,000. SunTime’s December 31, 20X1, trial balance in SFr is as follows:Part 1. Prepare a schedule translating (current rate method) the December 31, 20X1, trial balance from Swiss francs to dollars.
On January 1, 20X1, Popular Creek Corporation organized SunTime Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 80,000. SunTime’s December 31, 20X1, trial balance in SFr is as follows:
Then intended files that supposed to be here are added in the attachments below:
Part 1. Prepare a schedule translating (current rate method) the December 31, 20X1, trial balance from Swiss francs to dollars.
Answer:
Explanation:
We are tasked to Prepare a schedule translating (current rate method) the December 31, 20X1, trial balance from Swiss francs to dollars.
Schedule remeasuring Swiss francs to dollars
Trial Balance Translation Schedule
December 31, 20X1
Sfr Exchange Rate U.S dollar
Cash $7,200 0.73 $5,256
Accounts $25,000 0.73 $18,250
receivable (net)
Receivable from $6,300 0.73 $4,599
Creek
Inventory $26,000 0.73 $18,980
Plant & equipment $110,000 0.73 $80,300
Cost of good sold $71,500 0.75 $53,625
Depreciation expense $10,100 0.75 $7,575
Operating expense $35,000 0.75 $26,250
Dividends paid $16,400 0.74 $12,136
Total: $307,500 $226,971
[tex]Accumulated - \ translation \\other \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ adjustment\\Comprehensive \\ loss[/tex] (233,031 - 226,971) $6060
TOTAL DEBITS $233,031
Accumulated $10,100 0.73 $7,373
Depreciation
Account $13,600 0.73 $9,928
Payable
Bond $51,000 0.73 $37,230
Payable
Common stock $78,000 0.80 $62,400
Sales $154,800 0.75 $116,100
Total: $307,500 $233,031
No entry necessary $ -
TOTAL CREDITS $233,031
Machine Replacement Decision A company is considering replacing an old piece of machinery, which cost $400,000 and has $175,000 of accumulated depreciation to date, with a new machine that has a purchase price of $550,000. The old machine could be sold for $250,000. The annual variable production costs associated with the old machine are estimated to be $72,500 per year for eight years. The annual variable production costs for the new machine are estimated to be $24,000 per year for eight years. a.1 Prepare a differential analysis dated May 29 to determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss.
Answer:
Decision : It would be better to Replace Old Machine
Explanation:
Check the file attached for proper arrangement and explanation of the solution. Thank you.
Colil Computer Systems, Inc., manufactures printer circuit cards. All direct materials are added at the inception of the production process. During January, the accounting department noted that there was no beginning inventory. Direct materials of $ 300 comma 000 were used in production during the month. Workminusinminusprocess records revealed that 12 comma 500 card units were started in January, 6 comma 250 card units were complete, and 4 comma 000 card units were spoiled as expected. Ending workminusinminusprocess card units are complete in respect to direct materials costs. Spoilage is not detected until the process is complete. What is the direct material cost assigned to good units completed? A. $ 258 comma 621 B. $ 150 comma 000 C. $ 96 comma 000 D. $ 246 comma 000
Answer:
D. $246,000
Explanation:
As per the given question the solution of direct material cost assigned to good units completed is provided below:-
To reach Cost transferred out we need to follow some steps which is following below:-
Step 1. Cost per unit = cost of material used ÷ Units started
= $300,000 ÷ 12,500
= $24
Now,
Step 2. Goods units completed = Started units × Cost per unit
= 6,250 × $24
= $150,000
Step 3. Normal spoilage = Cards units × Cost per unit
= 4,000 × $24
= $96,000
and finally
Cost transferred out = Goods units completed + Normal spoilage
= $150,000 + $96,000
= $246,000
To reach allocation of Cost transferred out we simply put the values into formula.
