Answer:
Cost of Goods Manufactured $ 434,300
Adjusted Cost of Goods Sold $ 488,500
Operating Income $ 13,500
Explanation:
We do the following additions and subtractions to find the cost of goods manufactured.
Mason Company:
Schedule of Cost of Goods Manufactured
Inventories Beginning Raw materials $ 8,200
Add Raw material purchases $ 137,000
Less Inventories Ending Raw materials $ 11,000
Direct Materials Used $134,200
Add Direct labor cost $ 89,000
Add Actual manufacturing overhead costs $ 226,000
Total Manufacturing Costs $449,200
Add Inventories Beginning Work in process $ 5,600
Cost of Goods Available for Manufacture 454,800
Inventories Ending Work in process $ 20,500
Cost of Goods Manufactured $ 434,300
The cost of goods manufactured is again added and subtracted with finished goods inventories to prepare the schedule of cost of goods sold.
Mason Company:
Schedule of Cost of Goods Sold
Inventories Beginning Raw materials $ 8,200
Add Raw material purchases $ 137,000
Less Inventories Ending Raw materials $ 11,000
Direct Materials Used $134,200
Add Direct labor cost $ 89,000
Add Applied manufacturing overhead costs $ 206,000
Total Manufacturing Costs $429,200
Add Inventories Beginning Work in process $ 5,600
Cost of Goods Available for Manufacture 434,800
Inventories Ending Work in process $ 20,500
Cost of Goods Manufactured $ 414,300
Add Inventories Beginning Finished goods $ 80,000
Cost of Goods Available for Sale $ 494,300
Less Inventories Ending Finished goods $ 25,800
Un adjusted Cost of Good Sold $ 468,500
Add Under-applied Manufacturing Overhead 20,000
Adjusted Cost of Goods Sold $ 488,500
If we add the applied manufacturing overhead then the cost of goods sold is adjusted by adding the amount underapplied.
Mason Company:
Income Statement
Sales $ 656,000
Less Cost of Goods Sold $ 488,500 (as calculated above)
Gross Profit $ 167,500
Less Selling expenses $ 106,000
Less Administrative expenses $ 48,000
Operating Income $ 13,500
Blossom Companyhad the following transactions during 2022: 1. Issued $182500 of par value common stock for cash. 2. Recorded and paid wages expense of $87600. 3. Acquired land by issuing common stock of par value $73000. 4. Declared and paid a cash dividend of $14600. 5. Sold a long-term investment (cost $4380) for cash of $4380. 6. Recorded cash sales of $584000. 7. Bought inventory for cash of $233600. 8. Acquired an investment in Zynga stock for cash of $30660. 9. Converted bonds payable to common stock in the amount of $730000. 10. Repaid a 6-year note payable in the amount of $321200. What is the net cash provided by investing activities
Answer:
($26,280)
This represents net cash used up by investing activities
Explanation:
The cash flow statement categories the company's transactions in a financial period into 3 groups; these are operating, investing and financing.
The net profit/loss, depreciation, changes in current assets (other than cash) and liabilities are considered as operating activities including income taxes.
The sale of assets, interest received, purchase of investments are examples of investing activities while the issuance of stocks, debt principal deduction (loan settlement), issuance of debt securities etc are examples of financing activities.
An increase in assets other than cash is an outflow while an increase in liabilities is an inflow and vice versa.
Hence net cash provided by investing activities
= $4380 - $30660
= ($26,280)
Other activities are operating and financing activities.
Crane Company required production for June is 112000 units. To make one unit of finished product, three pounds of direct material Z are required. Actual beginning and desired ending inventories of direct material Z are 290000 and 310000 pounds, respectively. How many pounds of direct material Z must be purchased
Answer:
Purchases= 356,000 pounds
Explanation:
Giving the following information:
Production= 112,000 units.
Standard quantity= 3 pounds of direct material Z
Beginning inventory= 290,000 pounds
Desired ending inventory= 310,000 pounds
To calculate the purchase required for direct material, we need to use the following formula:
Purchases= production + desired ending inventory - beginning inventory
Purchases= 112,000*3 + 310,000 - 290,000
Purchases= 356,000 pounds
revorrow Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During June, the company budgeted for 7,000 units, but its actual level of activity was 6,960 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June: Data used in budgeting: Fixed element per month Variable element per unit Revenue - $ 28.40 Direct labor $ 0 $ 2.80 Direct materials 0 10.70 Manufacturing overhead 38,000 1.50 Selling and administrative expenses 23,600 0.30 Total expenses $ 61,600 $ 15.30 Actual results for June: Revenue $ 205,320 Direct labor $ 18,974 Direct materials $ 72,252 Manufacturing overhead $ 48,320 Selling and administrative expenses $ 25,768 The overall revenue and spending variance (i.e., the variance for net operating income in the revenue and spending variance column on the flexible budget performance report) for June would be closest to:
Answer:
$9,906 F
Explanation:
Calculation as follows:
Budget Income Statement
Particular $
Revenue (28.4 x 7,000) 198,800
Direct Labor (2.8 x 7,000) (19,600)
Direct Material (10.7 x 7,000) (74,900)
Manufacturing Overheads
(38,000 + [1.5 x 7,000] ) (48,500)
Selling and administrative Expenses
(23,600 + [0.3 x 7,000] ) (25,700)
Net Operating Income 30,100
Actual Income Statement
Particular $
Revenue 205,320
Direct Labor (18,974)
Direct Material (72,252)
Manufacturing Overheads (48,320)
Selling and administrative Expenses (25,768)
Net Operating Income 40,006
Activity variance for net operating income = Net operating income actual - Net operating income budgeted
Activity variance for net operating income = 40,006 - 30,100
Activity variance for net operating income = $9,906 F
Steve Company purchased a tractor at a cost of $180,000. The tractor has an estimated salvage value of $20,000 and an estimated life of 8 years, or 10,000 hours of operation. The tractor was purchased on January 1, 2019 and was used 2,400 hours in 2019 and 2,100 hours in 2020. On January 1, 2021, the company decided to sell the tractor for $70,000. Steve uses the units-of-production method to account for the depreciation on the tractor. Based on this information, the entry to record the sale of the tractor will show:
Answer:
Loss on sale = $38,000
Explanation:
The computation of sale of tractor is shown below:-
Total depreciation = ($180,000 - $20,000) × (2,400 + 2,100) ÷ 10000
= $72,000
Net book value on January 1, 2021 = Tractor cost - Total depreciation
= $180,000 - $72,000
= $108,000
Loss on sale = Total depreciation - Net book value on January 1, 2021
= $70,000 - $108,000
= $38,000
Therefore for computing the sale of tractor we simply applied the above formula.
The entry to record the sale of the tractor will show the loss of $38,000.
Here, we are going to calculate the loss or gain on the sale of the tractor.
Depreciation rate per hour = (Cost - Salvage value) / Total estimated hours
Depreciation rate per hour = ($180,000 - $20,000) / 10,000
Depreciation rate per hour = $160,000 / 10,000
Depreciation rate per hour = $16
Depreciation amount = Hours * Depreciation rate per hourDepreciation in 2019 = 2,400 hours * $16 per hour
Depreciation in 2019 = $38,400
Depreciation in 2020 = 2,100 hours * $16 per hour
Depreciation in 2020 = $33,600
Accumulated depreciation = Depreciation in 2019 +
Depreciation in 2020
Accumulated depreciation = $38,400 + $33,600
Accumulated depreciation = $72,000
Carrying value = Cost - Accumulated depreciation
Carrying value = $180,000 - $72,000
Carrying value = $108,000
Gain / (loss) = Sale price - Carrying value
Gain / (loss) = $70,000 - $108,000
Loss = $38,000
Therefore, the entry to record the sale of the tractor will show the loss of $38,000.
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Which statement is false? Marginal cost and marginal productivity are inversely related. Marginal cost is the change in a firm's total cost due to a one unit change in output. Costs that are small and unimportant with little impact on profits are called marginal costs. A marginal cost curve will always intersect the average total cost curve at the minimum average total cost. Consider the table. Output 0 1 2 3 4 5 6 7 8 9 10 Total cost 100 110 115 125 140 160 190 230 280 340 420 What is the marginal cost of the fifth unit based on the table? $0 −$20 $20 $160
Answer:
Option (c) Marginal cost of fifth unit = $20
Explanation:
According to the scenario, computation of the given data are as follows:
1)
Option (b) : Marginal cost is the change in the total cost of firm due to one unit change in output.
We can calculate the marginal cost by using following formula :
Marginal cost = Total cost ÷ Quantity
2)
Marginal cost of fifth unit = Total cost at unit 5 - total cost at unit 4
= $160 - $140
= $20
Jiminy’s Cricket Farm issued a bond with 25 years to maturity and a semiannual coupon rate of 4 percent 3 years ago. The bond currently sells for 108 percent of its face value. The company’s tax rate is 22 percent. The book value of the debt issue is $30 million. In addition, the company has a second debt issue on the market, a zero coupon bond with 10 years left to maturity; the book value of this issue is $15 million, and the bonds sell for 73 percent of par. a.What is the company’s total book value of debt? (Enter your answer in dollars, not millions of dollars, e.g. 1,234,567.)b.What is the company’s total market value of debt? (Enter your answer in dollars, not millions of dollars, e.g. 1,234,567.)c.What is your best estimate of the aftertax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer:
Explanation:
a.What is the pre-tax cost of debt?This question is basically asking for the bond’s current yield to maturity, which is the pre-tax cost of long term debt in the capital markets for this company today.Price = 1.08 * 1000 = 1080+/- PV23 * 2 = 46 N.10 * 1000 = 100 / 2 = 50 PMT1000 FVSolve for i/y = 4.5801 is the semi-annual yield to maturity * 2 = 9.1601% annual YTM
b.What is the after-tax cost of debt?9.1601 * (1 - .35) = 5.9541 after tax cost of debt.This is the true cost of debt to the company because the company gets a tax deduction (a tax shield!) for paying interest on its debt.
Fultz Company has accumulated the following budget data for the year 2020.
1. Sales: 31,410 units, unit selling price $85.
2. Cost of one unit of finished goods: direct materials 1 pound at $6 per pound, direct labor 3 hours at $12 per hour, and manufacturing overhead $7 per direct labor hour.
3. Inventories (raw materials only): beginning, 10,120 pounds; ending, 15,480 pounds.
4. Selling and administrative expenses: $170,000; interest expense: $30,000.
5. Income taxes: 30% of income before income taxes.
Prepare a schedule showing the computation of cost of goods sold for 2020.
Answer:
COST OF Goods SOLD $ 1,1539,110
Explanation:
Fultz Company
Schedule of Cost of Goods Sold for 2020
As there are no beginning and ending finished goods inventories the total units produced are sold. (Finished Goods required 31410 Units)
Inventories raw materials : beginning, 10,120 pounds
Add Direct Materials Purchases 36770 pounds
Less Inventories ending raw materials , 15,480 pounds
Direct Materials Used 31410 pounds
Materials 1 pound at $6 per pound= $ 6* 31410 Units= $ 188460
Direct labor 3 hours at $12 per hour= $ 36* 31410 Units= $ 1130780
Manufacturing Overhead $7 per direct labor hour= $ 7* 31410 Units=
$ 219870
Total Manufacturing Costs $ 1,1539,110
There are no beginning and ending work in process inventories so the total manufacturing cost gives us the COST OF Goods SOLD.
In the Assembly Department of Concord Company, budgeted and actual manufacturing overhead costs for the month of April 2020 were as follows. Budget Actual Indirect materials $14,200 $13,700 Indirect labor 19,100 19,900 Utilities 11,400 12,100 Supervision 4,600 4,600 All costs are controllable by the department manager. Prepare a responsibility report for April for the cost center.
Answer and Explanation:
The preparation of responsibility report for April for the cost center is shown below:-
Concord Company,
Assembly Department
Manufacturing Overhead Cost Responsibility Report
For the Month Ended April
Controllable Cost Budget Actual Difference Remark
Indirect materials $14,200 $13,700 $500 Favorable
Indirect Labor $19,100 $19,900 -$800 Unfavorable
Utilities $11,400 $12,100 -$700 Unfavorable
Supervision $4,600 $4,600 0 None
Total $49,300 $50,300 -$1,000 Unfavorable
If the distribution of water is a natural monopoly, then a. a single firm cannot serve the market at the lowest possible average total cost. b. multiple firms would likely each have to pay large fixed costs to develop their own network of pipes. c. allowing for competition among different firms in the water-distribution industry is efficient. d. average cost increases as the quantity of water produced increases.
Answer:
The correct option is C) If the distribution of water is a natural monopoly, average cost increases as the quantity of water produced increases.
Explanation:
Natural monopoly occurs when there is a hig cost of entry into a particular market niche. The high cost is usually caused by expensive equipment and infrastructural set up for manufacturing as well as maintenance costs.
Therefore, If the distribution of water is a natural monopoly, average cost increases as the quantity of water produced increases.
Distribution of water falls into the category of natural monopoly. Due to the prevailing circumstances, Fixed cost is larger comparable to variable cost such that it is cheaper for a single firm to serve the market.
The Stores and Service Fund of the City of Monroe had the following account balances as of January 1, 2017:
Debits Credits
Cash $28,000
Due from other funds 27,000
Inventory of supplies 27,500
Land 18,000
Buildings 84,000
Accumulated depreciation—buildings $30,000
Equipment 46,000
Accumulated depreciation—equipment 25,000
Accounts payable 19,000
Advance from water utility fund 30,000
Net position 126,500
Totals $ 230,500
Required:
a. Open a general journal for the City of Monroe Stores and Service Fund and record the following transactions.
(1) A budget was prepared for FY 2017. It was estimated that the price charged other departments for supplies should be 1.25% of cost to achieve the desired breakeven for the year.
(2) The amount due from other funds as of January 1, 2017, was collected in full.
(3) During the year, supplies were ordered and received in the amount of $307,000. This amount was posted to accounts payable.
(4) $15,000 of the advance from the Water Utility Fund, originally provided for construction, was repaid. No interest is charged. (5) During the year, supplies costing $250,560 were issued to the General Fund, and supplies costing $46,400 were issued to the Water Utility Fund. These funds were charged based on the previously determined markup ($ 313,200 to General Fund and 58,000 to the Water Utility Fund).
(6) Operating expenses, exclusive of depreciation, were recorded in accounts payable as follows: Purchasing, $15,000; Warehousing, $16,900; Delivery, $17,500; and Administrative, $9,000.
(7) Cash was received from the General Fund in the amount of $310,000 and from the Water Utility Fund in the amount of $50,000.
(8) Accounts payable were paid in the amount of $365,000.
(9) Depreciation in the amount of $10,000 was recorded for buildings and $4,600 for equipment.
Answer and Explanation:
The Journal entry is shown below:-
1. No Journal entry is required
2. Cash Dr, $27,000
To Due from other funds $27,000
(Being the cash collected which is due from others is recorded)
3. Inventory of suppliers Dr, $307,000
To Accounts payable $307,000
(Being purchase of supplies is recorded)
4. Advance from water utility fund Dr, $15,000
To Cash $15,000
(Being repayment of advance of water utility fund is recorded)
5. Operating expenses Dr, $296,960
($250,560 + $46,400)
To Inventory of supplies $296,960
(Being issue of supplied is recorded)
5. Due from other funds Dr, $371,200
($313,200 + $58,000)
To Revenue charged for services and sales $371,200
(Being the charge of supplies is recorded)
6. Operating expenses of sale and services Dr, $49,400
($15,000 + $16,900 + $17,500)
Operating expenses of administrative Dr, $9,000
To Accounts payable $58,400
(Being operating expenses is recorded)
7. Cash Dr, $350,000
($310,000 + $50,000)
To Due from others $350,000
(Being cash received from general fund is recorded)
8. Accounts Dr,$365,000
To Cash $365,000
(Being the payment of accounts payable is recorded)
9. Operating expenses cost of depreciation Dr, $14,600
To Accumulated Dep - Building $10,000
To Accumulated Dep - Equipment $4,600
(Being depreciation expenses is recorded)
Revenue charged for sales and services Dr, $444,200
To operating expenses cost of depreciation $14,600
To operating expenses cost of administrative $9,000
To operating expenses cost of sale and services $49,400
To operating expenses cost of sale $371,200
(Being transfer the operating expenses is recorded)
Assume that the economy is in long-run equilibrium. Now, assume that there is an unexpected increase in the price of oil. As a result of higher oil prices, the A. short-run aggregate supply curve will shift left. B. long-run aggregate supply curve will shift left. C. short-run aggregate supply curve will shift right. D. aggregate demand curve will shift left. The new short-run equilibrium will be
Answer:
The correct answer is D)
The aggregate demand curve will shift left.
Aggregate supply is stimulated only by labour, capital, and technology.
Equilibrium refers to the price point where demand or supply intersect.
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One of the key functions of human resource management is
Answer: recruiting.
Explanation:
Recruiting is one of the most important aspects of human resource management. Hence, Option B is correct.
What is the meaning of Recruiting?Finding, vetting, recruiting, and eventually onboarding qualified job prospects is the process of recruitment. The process of finding, vetting, shortlisting, and employing potential resources to fill open jobs in a company is known as recruitment.
It serves as a fundamental part of human resource management. The act of selecting the best candidate for a position at the ideal time is known as recruitment.
Simply announcing that you are hiring is all that hiring entails. The deliberate technique of locating and attracting the best individuals for the position is known as recruiting.
Therefore, Option B is correct.
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The complete question has been attached in text form:
One of the key functions of human resource management is:
a. departmentalizing.
b. recruiting.
c. budgeting.
d. auditing.
The general fund of the Town of Dean levied property taxes of $3,000,000 for the fiscal year beginning on January 1, 20X8. It was estimated that 1% of the levy would be uncollectible. During the period January 1, 20X8, through December 31, 20X8, $2,960,000 of the property tax levy was collected. At December 31, 20X8, Dean estimated that $10,000 of property taxes levied in 20X8 would be collected during the first 60 days of 20X9. What amount of property tax revenue should be reported by the general fund for the year ended December 31, 20X8?
Answer: $2,970,000
Explanation:
According to US tax laws, property taxes can be recognised for 60 days into the next financial period because it is assumed that within this period, the taxes can still cover expenses related to the period that it is from.
Therefore, if Property taxes are paid within the first 60 days in 20X9 then the Town of Dean should recognise those taxes paid.
Those taxes amount to $10,000 so therefore, the amount to be reported in the fund is,
= 2,960,000 + 10,000
= $2,970,000
$2,970,000 is amount of property tax revenue that should be reported by the general fund for the year ended December 31, 20X8.
For the year ended December 31, 2016, Norstar Industries reported net income of $655,000. At January 1, 2016, the company had 900,000 common shares outstanding. The following changes in the number of shares occurred during 2016: Apr. 30 Sold 60,000 shares in a public offering. May 24 Declared and distributed a 5% stock dividend. June 1 Issued 72,000 shares as part of the consideration for the purchase of assets from a subsidiary. Required: Compute Norstar's earnings per share for the year ended December 31, 2016.
Answer:
1.272 per share
Explanation:
The computation of earnings per share is shown below:-
Weighted Average number of Common shares outstanding = outstanding common shares ÷ Net income
= 900,000 ÷ $707,810
= 1.272 per share
Where,
Net Income = Preferred Dividends ÷ Weighted Average number of Common shares outstanding
= $655,000 ÷ (1 + 0.05) + ( 60,000 × 8 months ÷ 12 months) × 1.05 + (72,000 × 7 months ÷ 12 months)
= $623,810 + 40,000 × 1.05 + 42,000
= $623,810 + 42,000 + 42,000
= 707,810
Dermody Snow Removal's cost formula for its vehicle operating cost is $2,990 per month plus $329 per snow-day. For the month of December, the company planned for activity of 23 snow-days, but the actual level of activity was 21 snow-days. The actual vehicle operating cost for the month was $10,860. The spending variance for vehicle operating cost in December would be closest to:
Answer:
-$303 Unfavorable
Explanation:
The computation of spending variance is shown below:-
Spending variance = Flexible budget - Actual cost
= (23 × $329 + $2,990) - $10,860
= $7,567 + $2,990 - $10,860
= $10,557 - $10,860
= -$303 Unfavorable
Therefore for computing the spending variance we simply subtracted the actual cost from flexible budget.
Matrix Corporation's balance sheet and income statement appear below: Comparative Balance Sheet Ending Balance Beginning Balance Assets: Cash and cash equivalents $ 23 $ 22 Accounts receivable 39 40 Inventory 43 44 Property, plant, and equipment 587 500 Less accumulated depreciation 359 347 Total assets $ 333 $ 259 Liabilities and stockholders' equity: Accounts payable $ 30 $ 26 Accrued liabilities 15 18 Income taxes payable 39 40 Bonds payable 109 120 Common stock 51 50 Retained earnings 89 5 Total liabilities and stockholders' equity $ 333 $ 259 Income Statement Sales $ 972 Cost of goods sold 620 Gross margin 352 Selling and administrative expense 200 Net operating income 152 Gain on sale of equipment 14 Income before taxes 166 Income taxes 50 Net income $ 116 The company sold equipment for $20 that was originally purchased for $7 and that had accumulated depreciation of $1. It paid a cash dividend during the year and did not issue any bonds payable or repurchase any of its own common stock. Required: Determine the net cash provided by (used in) operating activities for the year using the indirect method.
Answer:
Check the explanation
Explanation:
Cash flow from operating activities:
Net income $116
Adjustment to reconcile net income to cash basis:
Depreciation expense ($359+1-347) $13
Gain on sale of equipment (14)
Decrease in account receivable (40-39) $1
Decrease in inventory (44-43) $1
Increase in account payable (30-26) $4
Decrease in accrued liabilities (18-15) (3)
Decrease in income tax payable (40-39) (1)
Net cash flow from operating activities $117
Refer to the following selected financial information from McCormick, LLC. Compute the company's days' sales in inventory for Year 2. (Use 365 days a year.) Year 2 Year 1 Cash $ 38,900 $ 33,650 Short-term investments 104,000 67,000 Accounts receivable, net 92,500 86,500 Merchandise inventory 128,000 132,000 Prepaid expenses 13,500 11,100 Plant assets 395,000 345,000 Accounts payable 106,400 114,800 Net sales 718,000 683,000 Cost of goods sold 397,000 382,000
Answer:
47.0 days
Explanation:
As per the given question the solution of company's days' sales in inventory is provided below:-
Company's days sales uncollected for year 2 = Total number of days in a year × Accounts receivables ÷ Net sales
= 365 × $92,500 ÷ $718,000
= 365 × 0.1289
= 47.0 days
So, we have calculated the Company's days sales uncollected for year 2 by putting the values into the formula.
Income statement _______ Click on an event in any transaction report b. Balance sheet _______ Click an account on any report c. Statement of cash flows _______ Click to add a new column in a report d. AR aging report _______ Reflects unpaid bills for the current period e. AP aging report _______ Reports revenues and expenses f. Inventory valuation report _______ Includes operating, investing, and financing activities g. Profit and Loss report _______ Reports inventory quantities on hand h. To view a transaction report _______ Reports assets, liabilities, and equities i. To view a source document _______ Another name for the income statement j. % of income check box _______ Reflects unpaid invoices for the current period
Answer and Explanation:
a Income statement = Reports revenues and expenses
The income statement only records the revenues earned and expenses incurred
b Balance sheet = Reports Assets, liabilities and Equities
The balance sheet records the 3 items i.e assets, liabilities and stockholder equity
With the help of the accounting equation, the balance sheet should be matched
c Statement of Cash flows = Includes operating, Investing & Financing
The cash flow statement consist of operating activities, investing activities, and financing activities. It records only cash payments and cash receipts transactions
d AR Aging Report= Reflects unpaid invoices for current period
It shows the invoices which are not paid
e AP Aging Report = Reflect unpaid bills for current period
It shows the bills which are not paid
f Inventory valuation report = Reports Inventory Quantities on hand
It shows the quantities of inventory remains on till date
g Profit and loss report = Another name for Income statement
The other name of income statement is profit and loss account or report
h To view a transaction report = Click an account on any report
For seeing the transaction report we have to just click on any report
i To view a source document = Click on an event in any transaction report
For seeing the source document we have to just click on the event of any transaction report
j % of income check box = Click to add a new column in a report
For percentage of income check box we need to add a new column in a report
LaserLife Printer Company is a decentralized organization with several autonomous divisions. The division managers are evaluated, in part, on the basis of the change in their return on invested assets. Operating results for the Packer Division for 2019 are budgeted as follows:
Sale $5,000,000
Less variable costs 2,500,000
Contribution margin 2,500,000
Less fixed expenses 1,800,000
Net operating income $ 700,000
Invested capital for the division are currently $3,600,000. For 2019, the division can add a new product line for an investment of $600,000. The new product line will generate sales of $1,600,000 and will incur fixed expenses of $600,000 annually. Variable costs of the new product will average 60% of the selling price.
REQUIRED:
1. What is current ROI? Profit margin (or Return on sales)? Investment (or Capital) turnover?
2. What is the effect on ROI of accepting the new product line?
If the company's required rate of return is 6% and residual income (RI) is used to evaluate managers, would this encourage the division to accept the new product line? Explain and show computations.
Answer:
1. The current ROI is 19.44%. The Profit margin (or Return on sales) is 14%. TheInvestment (or Capital) turnover is 1.39 times.
2. The effect on ROI of accepting the new product line is 17.62%. ROI will be decreased by 1.82%
If the company's required rate of return is 6% and residual income (RI) is used to evaluate managers the residual income amount would be of $4,000 and so Managers should accept the new product line
Explanation:
1. To calculate the profit margin we have to use the following formula:
Profit margin= Net operating income/Sale
Hence, Profit margin = $700,000/$5,000,000 = 14%
ROI= Net operating income/Invested capital
Hence, ROI = $700,000/$3,600,000 = 19.44%
Investment (or Capital) turnover=Sale/Invested capital
Hence, Investment (or Capital) turnover = $5,000,000/$3,600,000 = 1.39 times
2. The Net operating income= ($5,000,000+$1,600,000)-($2,500,000+1,600,000*60%)-$(1,800,000+$600,000) = $740,000
Hence, ROI = $740,000/$4,200,000 = 17.62%
ROI will be decreased by (19.44-17.62) 1.82%.
In order to know if the division would accept the new product line If the company's required rate of return is 6% and residual income (RI) is used to evaluate managers, we would have to calculate the residual income as follows:
Residual income = operating income - invesed capital*required rate of return
= ($740,000-$700,000)-$600,000*6%
= $4,000
Therefore, Managers should accept the new product line.
Markley Manufacturing calculated its predetermined overhead rate to be 120% of direct labor cost. During June, the company incurred $90,000 of factory labor costs, of which $85,000 is direct labor and $5,000 is indirect labor. Actual overhead incurred was $84,000. Compute the amount of manufacturing overhead applied during the month. Determine the amount of under- or over-applied manufacturing overhead.
Answer:
Applied Manufacturing Overheads are $102,000
Overapplied Manufacturing overheads are $18,000
Explanation:
Under or over applied manufacturing overhead can be determined by comparing the actual and applied manufacturing overheads.
Applied overheads can be calculated by multiplying pre-determined overhead rate and actual level of quantity. Predetermined overhead rate is calculated using estimated overhead and estimated activity on which overheads are applied.
In this question the predetermined overhead rate is 120% of direct labor cost.
Applied overhead = Direct labor cost x 120% = $85,000 x 120% = $102,000
Actual overheads incurred = $84,000
Overapplied Manufacturing overheads = $102,000 - $84,000 = $18,000
Why do more than half of enterprise application projects exceed budgets, deliver less than expected benefits, or experience overruns?
Answer: The answer is provided below
Explanation:
1. Underfinancing: One main reason that cause budget overrun and less than expected benefits is underfinancing. Allocation of an adequate amount of budget to project at the beginning will lead to a budget overrun or failure.
2. Unfeasible Cost Estimates: Estimation of cost is a vital process in a project and another common reason for budget overrun. When the cost is calculated by inexperienced or unqualified personnel, the project is going to face budget overruns.
3. Underestimating the Project Complexity: Big projects are usually at the risk of overrunning its budget as a result of bigger complications that may arise during its execution.
4. Lack of Resource Planning: When one fails to plan the resources that are available effectively, then this would lead to a budget overrun and less benefits. A common mistakes that cause overrun is failure to estimate the resources which would be utilized during the project.
Your company is considering purchasing a machine for $270,000. This machine will bring revenues of $100,000 in the second year, of $150,000 in the third year, and of $75,000 in the fourth year. The machine will be worthless after the fourth year, so you will not be able to get any resale value out of it. If the interest rate is 6% per year, should you go ahead with this project?
Answer:
Yes we should go with this project because it has a positive NPV of $4,350
Explanation:
We need to calculate the net present value of the machine to decide whether to invest in the machine or not.
As per Given Data
Costs $270,000
Cash Inflows
Year 2 $100,000
Year 3 $150,000
Year 4 $75,000
Interest Rate = 6%
Net Present Value
As we know Net Present value is calculated by discounting each years cash flows using using the Weighted Average cost of Capital.
Year Cash Inflows Discount factor 13% Present values
Year 0 $(270,000) (1+6%)^-0 $(270,000)
Year 2 $100,000 (1+6%)^-2 $89,000
Year 3 $150,000 (1+6%)^-3 $125,943
Year 4 $75,000 (1+6%)^-4 $59,407
Net present value $4,350
Which law is referred to as the credit cardholders Bill Of Rights ?
Answer: credit CARD act
Hope this helps!!!
A) Fair and Accurate Credit Transaction Act
Jayhawk Foods Inc. is a snack manufacturer that wants to expand globally. Few people abroad are familiar with Jayhawk Foods snacks. The countries into which the company wants to expand require a high degree of local responsiveness when it comes to food, and the citizens of those countries already spend plenty of money on snacks. Which action should the leaders of Jayhawk Foods take? A. Achieve economies of scale by using the global-standardization approach B. Pursue a multidomestic strategy that includes new "local" brands C. Keep costs low with undifferentiated product in the international strategy D. Appease pressures for cost reductions by following the transnational approach
Answer:
the answer is option B) the leaders of Jayhawk Foods should pursue a multidomestic strategy that includes new "local" brands.
Explanation:
Understanding how best to meet your customers needs is a sure way to maximize profits and generate more sales.
Having identified the need for a high degree of local responsiveness when it comes to food, Jayhawk Foods Inc., a snack manufacturer that wants to expand globally should pursue a multi domestic strategy for their branches globally.
Multi Domestic strategy is an international marketing strategy that is responsive to the local market by driving advertising and sales efforts towards the needs that the local consumers are most responsive to.
The student-run newspaper asks students to visit a web page and respond to questions regarding a proposed tuition increase. Only responses to the questions are recorded. Summary statistics based on the survey responses are used in an article published the following week, and no one outside of the newspaper has access to the individual responses. The newspaper's survey is considered to be A) confidential. B) anonymous. C) both anonymous and confidential. D) neither anonymous nor confidential.
Answer:
C) both anonymous and confidential
Explanation:
As the student-run, the new paper and ask other students to visit a link firm the new paper and respond to those questions and the responses for only those questions were recorded. This indicates that the newspaper survey is anonymous and confidential as the ant student can fill the survey and the information that is confidential as none outside the newspaper has access to those responses.Paradise Cruises has a monopoly in renting luxury yachts for sailing in the Caribbean Sea. In summer its monthly inverse demand is p Subscript Upper Sequals400minus2Upper Q Subscript Upper S. In winter the inverse demand is p Subscript Upper Wequals400minusUpper Q Subscript Upper W. Paradise has a total of 150 yachts available for rental on a monthly basis. Which season is peak season? Why? What are the profit-maximizing prices in both seasons? Assume marginal cost is zero. Peak season is winter because demand is higher . The profit-maximizing peak-load price for the summer is p Subscript Upper Sequals$ nothing and the optimal peak-load price for the winter is p Subscript Upper Wequals$ nothing. (
Answer:
Explanation:
In economics, profit maximization is an optimization problem for producers, who choose the quantity of output to maximize revenue net of total costs. Profit is maximized when the marginal revenue form the last unit produced is equal to the marginal cost.
Answer and Explanation:
The Winter is the peak season because for the same quantity demanded, consumers are willing to offer a higher price, as indicated by the demand curve.
The Clifford Corporation has announced a rights offer to raise $10 million for a new journal, the Journal of Financial Excess. This journal will review potential articles after the author pays a nonrefundable reviewing fee of $6,000 per page. The stock currently sells for $60 per share, and there are 1 million shares outstanding. a. What is the maximum possible subscription price? What is the minimum? (Leave no cells blank - be certain to enter "0" wherever required.) b. If the subscription price is set at $50 per share, how many shares must be sold? How many rights will it take to buy one share? (Do not round intermediate calculations. Round your rights needed answer to 2 decimal places, e.g., 32.16.) c. What is the ex-rights price? What is the value of a right? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) d. A shareholder with 2,000 shares before the offering has no desire (or money) to buy additional shares offered as rights. What is his portfolio value before and after the rights offer? (Do not round intermediate calculations and round your answers to nearest whole number, e.g., 32.)
Answer and Explanation:
1. The maximum possible subscription price is $60
The maximum price is anything greater than $0
2.Number of new shares
$10,000,000/$50
=$200,000
Number of right shares
$1,000,000/$200,000
=$5
3. Excess right 58.33
(5*60+50)/(5+1)
Value of excess 1.67
($60-58.33)
4.Portfolio value before right offering
2,000×60
= 120,000
Portfolio value after right offering 120,000
(2000×58.33 +2000×1.67 )
How Hard The Day, Inc. makes a product that has the following direct labor standards: Standard direct labor-hours 1.4 hours per unit Standard direct labor rate $ 12.00 per hour The company budgeted for production of 5,400 units in January, but actual production was 5,500 units. The company used 6,800 direct labor-hours to produce this output. The actual total direct labor cost was $82,960. The direct labor efficiency variance for January is:
Answer:
Direct labor time (efficiency) variance= $10,800 favorable
Explanation:
Giving the following information:
Standard direct labor-hours 1.4 hours per unit
Standard direct labor rate $ 12.00 per hour
Actual production was 5,500 units.
The company used 6,800 direct labor-hours to produce this output.
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
Standard quantity= 5,500*1.4= 7,700
Direct labor time (efficiency) variance= (7,700 - 6,800)*12
Direct labor time (efficiency) variance= $10,800 favorable
On January 1, 2021, the Blackstone Corporation purchased a tract of land (site number 11) with a building for $600,000. Additionally, Blackstone paid a real estate brokerâs commission of $36,000, legal fees of $6,000, and title insurance of $18,000. The closing statement indicated that the land value was $500,000 and the building value was $100,000. Shortly after acquisition, the building was razed at a cost of $75,000.
Blackstone entered into a $3,000,000 fixed-price contract with Barnett Builders, Inc., on March 1, 2021, for the construction of an office building on land site 11. The building was completed and occupied on September 30, 2022. Additional construction costs were incurred as follows:
Plans, specifications, and blueprints .....................$ 12,000
Architectsâ fees for design and supervision ............95,000
To finance the construction cost, Blackstone borrowed $3,000,000 on March 1, 2021. The loan is payable in 10 annual installments of $300,000 plus interest at the rate of 14%. Blackstoneâs average amounts of accumulated building construction expenditures were as follows:
For the period March 1 to December 31, 2021 ...........$ 900,000
For the period January 1 to September 30, 2022 .......2,300,000
Required:
1. Prepare a schedule that discloses the individual costs making up the balance in the land account in respect of land site 11 as of September 30, 2022.
2. Prepare a schedule that discloses the individual costs that should be capitalized in the office building account as of September 30, 2022.
Answer:
Blackstone Corporation
1. A schedule that discloses the individual costs making up the balance in the land account in respect of land site 11 as of September 30, 2022:
Cost of Land = $600,000
Broker's Commission = $36,000
Legal Fees = $6,000
Title Insurance = $18,000
Razing of old building = $75,000
Total = $735,000
2. A schedule that discloses the individual costs that should be capitalized in the office building account as of September 30, 2022:
Payment to contractor for building = $3,000,000
Plans, specifications, and blueprints = $12,000
Architect's fees (design & supervision = $95,000
Capitalized Interest ($3m x14%/10 x 2) = $84,000
Total = $3,191,000
Explanation:
a) The cost of land to recognize includes the actual cost for the parcel of land, including the building which was razed. All other expenses incurred ordinarily and necessarily in order to put the land to its intended use are also capitalized. The costs for the broker's commission, legal fees, title insurance, and razing of old building were incurred ordinarily and necessarily for the land and are therefore capitalized in determining the value of the land.
b) The capitalized interest portion for the building is the interests paid to date. The contractor's fee, payments for plans, architect's fee, and interests are included as costs of the building.
Adams Industries holds 55,000 shares of FedEx common stock, which is not a large enough ownership interest to allow Adams to exercise significant influence over FedEx. On December 31, 2021, and December 31, 2022, the market value of the stock is $98 and $112 per share, respectively. What is the appropriate reporting category for this investment and at what amount will it be reported in the 2022 balance sheet
Answer:
The explanation is given below:-
$6,160,000
Explanation:
Since owning shares is not a huge enough to exert significant control. So, strategy for reporting would be a fair value process.
According to the scenario the computation of amount reported in the 2022 balance sheet is shown below:-
Fair value through net income = Shares of FedEx common stock × Market value of the stock of 31 Dec 2022
= 55000 × $112
= $6,160,000
So, for computing the amount reported in the 2022 balance sheet we simply multiply the Shares of FedEx common stock with Market value of the stock of 31 Dec 2022.
