Millco Inc. manufactures electronic parts They are analyzing their monthly maintenance costs to determine the best way to budget these costs in the future. They have collected the following data for the last six months:
Months Machine Hours Maintenance Costs
January 30,000 $67,500
February 40,000 74,500
March 37,500 65,900
April 39,000 68,750
May 42,300 74,000
June 35,000 64,500
Answer:
Millco Inc.
The approximate fixed cost component of the monthly maintenance costs is:
$51,600.
Explanation:
a) Data and Calculations:
Months Machine Hours Maintenance Costs
January 30,000 $67,500
February 40,000 74,500
March 37,500 65,900
April 39,000 68,750
May 42,300 74,000
June 35,000 64,500
High-low:
May 42,300 $74,000 for highest
January 30,000 67,500 for lowest
Difference 12,300 $6,500
Variable costs = $0.53 ($6,500/12,300)
Using May, the total variable cost = 42,300 * $0.53 = $22,419
Fixed cost = $51,581 ($74,000 - $22,419)
or approximately $51,600
True or False: With a minimum wage of $8.70, unemployment of unskilled workers is lower with the tax credit versus without it.
Answer: True
Explanation:
Generally speaking, a tax credit would bring about a lower unemployment rate for unskilled labor as opposed to a situation where there is no tax credit.
A tax credit would reduce the amount of taxes that a company is to pay which would leave them with more income to reinvest into the business. This reinvestment will lead to the business having a higher production capacity such that it requires more workers so they will hire more workers, both unskilled and skilled thereby reducing the unemployment rate for both.
Bella Bags is a British company that sells luxury leather purses manufactured in London. Currently, its products are carried at high-end department stores all across Europe. The company prides itself on its exceptional customer service. However, the company has been criticized in the past for carrying only two designs of bags. There is currently growing market demand for high-end luxury accessories. Bella Bags faces fierce competition from established luxury brands. Which of the following best characterizes an actionable strategy for Bella Bags that works on reducing the company's weaknesses to avoid threats?
A) Reduce the threat of high competition by expanding the product line and offering more variety
B) Promote the company's exceptional customer service to leverage the increasing demand for luxury goods
C) Reduce the threat of high competition by promoting the company's narrow product offering
D) Reduce the threat of high competition by leveraging the increasing demand for luxury goods
Answer:
A
Explanation:
The balance sheets of Davidson Corporation reported net fixed assets of $340,000 at the end of 2016. The fixed-asset turnover ratio for 2016 was 3.0, and sales for the year totaled $1,440,000. Net fixed assets at the end of 2015 were:_________
a) $760,000.
b) $480,000.
c) $620,000.
d) None of these answer choices are correct.
Answer:
$620,000
Explanation:
Calculation to determine what Net fixed assets at the end of 2015 were:
$1,440,000 / Average fixed assets
$1,440,000 / $480,000=3.0
Net fixed assets =[(340,000 + x) / 2] = $480,000
Solve for x
Net fixed assets= $620,000
Therefore Net fixed assets at the end of 2015 were:$620,000
The independent operational test and evaluation agency is responsible for the establishment of Critical Technical Parameters (CTPs).
A. True
B. False
Answer:
B. False
Explanation:
The given statement is false as the management office regarding the program created the system to be responsible for the Criticial technical parameter establishment not the independent operational test and the evaluation agency.
So the option b is correct
Hence, the option a is wrong
Due to erratic sales of its sole product—a high-capacity battery for laptop computers—PEM, Inc., has been experiencing financial difficulty for some time. The company’s contribution format income statement for the most recent month is given below: Sales (12,800 units × $20 per unit) $ 256,000 Variable expenses 153,600 Contribution margin 102,400 Fixed expenses 114,400 Net operating loss $ (12,000 ) Required: 1. Compute the company’s CM ratio and its break-even point in unit sales and dollar sales. 2. The president believes that a $6,700 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in an $84,000 increase in monthly sales. If the president is right, what will be the increase (decrease) in the company’s monthly net operating income?
Answer:
Results are below.
Explanation:
Giving the following information:
Sales (12,800 units × $20 per unit) $256,000
Variable expenses 153,600 (12)
Contribution margin 102,400
Fixed expenses 114,400 Net operating loss $ (12,000 )
First, we need to calculate the contribution margin ratio and the break-even point in units and dollars:
Contribution margin ratio= unitary CM / Selling price
Contribution margin ratio= total CM / Sales
Contribution margin ratio= 102,400 / 256,000
Contribution margin ratio= 0.4
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 114,400 / (20 - 12)
Break-even point in units= 14,300
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 114,400 / 0.4
Break-even point (dollars)= $286,000
Now, we need to calculate the effect on the income of increasing the advertising budget:
Effect on income= increase in contribution margin - increase in fixed costs
Effect on income= 84,000*0.4 - 6,700
Effect on income= $26,900 increase
The market rate of return is 11 percent and the risk-free rate of return is 3 percent. Lexant stock has 3 percent less systematic risk than the market and has an actual return of 12 percent. This stock:
Answer:
over-priced
Explanation:
According to the capital asset price model: Expected rate of return = risk free + beta x (market rate of return - risk free rate of return)
Systemic risk are risk that are inherent in the economy. They cannot be diversified away. They are also known as market risk. examples of this risk include recession, inflation, and high interest rates. Investors should seek compensation for systemic risk. Systemic risk is measured by beta. The higher beta is, the higher the systemic risk and the higher the compensation demanded for by investors
The market has a beta of one. If a portfolio has the same level of systematic risk that is the same as that of the market, its beta would be equal to 1.
If the portfolio is less risky than the market, its beta would be less than one
If the portfolio is more risky than the market, its beta would be greater than one
Lexant stock beta = (100 - 3) x 1
0.97 x 1 = 0.97
3 + 0.97(11 -3)
3 + 8.25
10.76
A project with an initial investment of $461,300 will generate equal annual cash flows over its 10-year life. The project has a required return of 8.1 percent. What is the minimum annual cash flow required to accept the project
Answer:
The minimum annual cash flow required to accept the project is:
= $63,883.17
Explanation:
a) Data and Calculations:
Initial investment cost of the project = $461,300
Project's estimated life = 10 years
Project's required return rate = 8.1%
The minimum annual cash flow required to accept the project is derived from an online financial calculator as follows:
N (# of periods) 10
I/Y (Interest per year) 8.1
PV (Present Value) 461300
FV (Future Value) 0
Results:
PMT = $63,883.17
Sum of all periodic payments = $638,831.69
Total Interest = $177,531.69
The cost object of the plantwide overhead rate method is: Multiple Choice The production departments of the company. The unit of product. The production activities of the company.
Answer: The unit of product.
Explanation:
The units produced of the goods being produced will be the appropriate cost object because it will apportion the overhead cost to the plant based on how much goods were produced by the plant itself because this would determine how much overhead the plant used.
Manufacturing overheads only occur because goods are being produced which is why the best cost object would be those same goods being produced.
Explain ethics in dealing with employers and discuss the various methods used by salespeople
that can be regarded as being unethical towards the employer specifically. Give a practical
example of each in relation to a sales situation.
that they always want to be correct and they always like their stores to be clean and neat, and they can sometimes follow you too
Based on a predicted level of production and sales of 12,000 units, a company anticipates reporting operating income of $26,000 after deducting variable costs of $72,000 and fixed costs of $10,000. Based on this information, the budgeted amounts of fixed and variable costs for 15,000 units would be
Answer:
Fixed Cost = $10,000
Variable Costs = $90,000
Explanation:
Variable Cost per unit = $72,000 ÷ 12,000
= $6
Variable Costs at 15,000 units = $6 x 15,000
= $90,000
Fixed Cost (given) = $10,000
XYZ Corporation manufactures air conditioners and has the capacity to manufacture and sell 80,000 units each year. It is currently only manufacturing and selling 60,000 units. The following per unit numbers relate to annual operations at 60,000 units: Per Unit Selling price $ 125 Manufacturing costs: Variable $ 25 Fixed $ 40 Selling and administrative costs: Variable $ 10 Fixed $ 15 A customer would like to purchase 3,000 air conditioners from XYZ but only if they can get them for $75 each. Variable selling and administrative costs on this special order will drop down to $2 per unit. This special order will not affect the 60,000 regular sales and it will not affect the total fixed costs. The annual financial advantage (disadvantage) for the company as a result of accepting this special order from this customer should be:
Answer:
The annual financial advantage is $147000
Explanation:
QS 5-1 Inventory ownership LO C1 Homestead Crafts, a distributor of handmade gifts, operates out of owner Emma Finn’s house. At the end of the current period, Emma looks over her inventory and finds that she has 1,800 units (products) in her basement, 27 of which were damaged by water and cannot be sold. 100 units in her van, ready to deliver per a customer order, terms FOB destination. 120 units out on consignment to a friend who owns a retail store. How many units should Emma include in her company’s period-end inventory?
Answer:
1,993 units
Explanation:
Calculation to determine How many units should Emma include in her company's period-end inventory
Units in Ending Inventory:
Units of Product on hand: 1,800 units
Add Units in transit 100
Add Units on consignment 120
Less:Damaged units (27)
Total units in period-end inventory 1,993 units
Therefore How many units should Emma include in her company's period-end inventory is 1,993 units
Suppose that a firm currently produces 100 units using 10 units of K and 14 units of labor per day. The wage rate is $100 and the rental rate is $150 per day. The cost to produce this output is
Answer: $2,900
Explanation:
The cost of this amount of output is:
= (Amount of K used * Rental rate of capital) + (Amount of labor used * wage rate)
= (10 * 150) + (14 * 100)
= 1,500 + 1,400
= $2,900
Pencils sell for 10 cents and pens sell for 50 cents. Suppose Jae, whose preferences satisfy all of the basic assumptions, is currently spending all his income on both goods. The marginal rate of substitution for pens to pencils is 5. In order to achieve optimum, what should he do
Answer:
Jae should do nothing and continue purchasing the same amount of pens and pencils.
Explanation:
The current rate of substitution that maximizes Jae's utility is Px / Py = 0.50 / 0.10 = 5. That means that Jae will purchase 5 pencils for every pen that he buys, and that is exactly what he is doing right now.
Identify the following costs as direct materials (DM), direct labor (DL), or factory overhead (FO) for a magazine publisher: a. Staples used to bind magazines b. Wages of printing machine employees c. Maintenance on printing machines
Answer:
Staples used to bind magazines
Direct materials
Wages of printing machine employees
Direct Labor
Maintenance on printing machines
Factory Overhead
Paper used in the magazine
Direct Materials
Explanation:
The given answers above are correctly grouped based on Direct Materials, Factory Overhead, and Direct Labor.
Ayayai Corp. reported net income of $87300 for the year. During the year, accounts receivable increased by $5820, accounts payable decreased by $3880 and depreciation expense of $9700 was recorded. Net cash provided by operating activities for the year is
Answer: $87,300
Explanation:
Net cash provided by operating activities are those that are generated from the operations of the company.
The calculation is:
= Net income + Depreciation - Accounts receivable increase - accounts receivable decrease
= 87,300 + 9,700 - 5,820 - 3,880
= $87,300
Darin Company uses a perpetual inventory system. On October 1, Darin Company sold inventory in the amount of $6,500 to Dee Company, terms 2/10, n/30. The items cost Darin $4,200. On October 4, Dee returns some of the inventory. This inventory had a selling price of $500 and a cost of $200. On October 8, Dee Company paid Darin Company the amount due on that date. Use the information above to answer the following question. What journal entry will be prepared by Darin Company on October 8 to record the receipt of payment from Dee
Answer:
Debit : Cash $5,870
Credit : Accounts Receivable $5,870
Explanation:
The journal entry to be prepared by Darin Company on October 8 to record the receipt of payment from Dee consist of a Debit in Cash and Credit Accounts Receivable at the amount outstanding after deducting cash discount and returns.
Amount Outstanding
Total Accounts Receivable $6,500
Less Cash discount at 2 % ($130)
Less Returns ($500)
Outstanding amount $5,870
Below are the account balances for Cowboy Law Firm at the end of December. Accounts Balances Cash $ 3,800 Salaries expense 1,400 Accounts payable 1,800 Retained earnings 4,700 Utilities expense 1,200 Supplies 12,200 Service revenue 7,700 Common stock 4,400 Required: Use only the appropriate accounts to prepare an income statement.
Answer:
Cowboy Law Firm
Income Statement for the year ended 31 December
Service revenue $7,700
Less Expenses :
Salaries expense $1,400
Utilities expense $1,200 ($2,600)
Net Income $5,100
Explanation:
It is important to remember that the income statement accounts for Income and expense items only.
During the current calendar year, Bowman Corporation purchased $660,000 of inventory. The beginning inventory balance was $84,000, and the inventory balance at year-end was $120,000. The inventory turnover for the current year was:
Answer:
6.12 times
Explanation:
Cost of Goods Sold = $84,000 + $660,000 - $120,000
Cost of Goods Sold = $624,000
Average inventory = ($84,000 + $120,000) / 2
Average inventory = $102,000
Inventory Turnover = Cost of Goods Sold / Average inventory
Inventory Turnover = $624,000 / $102,000
Inventory Turnover = 6.117647059
Inventory Turnover = 6.12 times
You are considering two investment alternatives. The first is a stock that pays quarterly dividends of $0.32 per share and is trading at $27.85 per share; you expect to sell the stock in six months for $31.72. The second is a stock that pays quarterly dividends of $0.67 per share and is trading at $34.98 per share; you expect to sell the stock in one year for $36.79. Which stock will provide the better annualized holding period return?The 1-year HPR for the second stock is____%. The stock that will provide the better annualized holding period return is_____.A. Stock 1 B. Stock 2
Answer:
The 1-year HPR for the second stock is 12.84%. The stock that will provide the better annualized holding period return is Stock 1.
Explanation:
For First stock
Total dividend from first stock = Dividend per share * Number quarters = $0.32 * 2 = $0.64
HPR of first stock = (Total dividend from first stock + (Selling price after six months - Initial selling price per share)) / Initial selling price = ($0.64 + ($31.72 - $27.85)) / $27.85 = 0.1619, or 16.19%
Annualized holding period return of first stock = HPR of first stock * Number 6 months in a year = 16.19% * 2 = 32.38%
For Second stock
Total dividend from second stock = Dividend per share * Number quarters = $0.67 * 4 = $2.68
Since you expect to sell the stock in one year, we have:
Annualized holding period return of second stock = The 1-year HPR for the second stock = (Total dividend from second stock + (Selling price after six months - Initial selling price per share)) / Initial selling price = ($2.68+ ($36.79 - $34.98)) / $34.98 = 0.1284, or 12.84%
Since the Annualized holding period return of first stock of 32.38% is higher than the Annualized holding period return of second stock of 12.84%. the first stock will provide the better annualized holding period return.
The 1-year HPR for the second stock is 12.84%. The stock that will provide the better annualized holding period return is Stock 1.
Typical cash inflows of a capital investment project include all of the following EXCEPT: A. projected incremental revenues from the project. B. cost reductions in operating costs. C. the salvage value of the investment at the end of its useful life. D. tax savings generated by depreciation expense. E. the original cost paid for the capital investment.
Answer:
E
Explanation:
Cash inflows are cash increases in a project
they include :
projected incremental revenues from the project.
cost reductions in operating costs.
the salvage value of the investment at the end of its useful life
tax savings generated by depreciation expense.
Cash outflows reduces the cash available in a project. They are usually subtracted
they include
the original cost paid for the capital investment.
working capital investment
A project is profitable if cash inflow exceeds cash outflow
Typical cash inflows of a capital investment project do not include the original cost paid for the capital investment.
A capital investment project is regarded as a project that aims at increasing the assets of the business. The inflows in these projects are derived when cash outflows are subtracted from revenues and cash flows of the project.
Therefore, the original cost that would be paid for the capital investment becomes part of cash outflow from the business, which decreases the total availability of cash.
Learn more about capital investment projects here:
https://brainly.com/question/16279869
Blitz Corp. had total sales of $3,130,000 last year and has 109,000 shares of stock outstanding. The benchmark PS is 1.66 times. What stock price would you consider appropriate
Answer:
$47.68
Explanation:
Calculation to determine stock price would you consider appropriate
Using this formula
Stock price=(Total sales/Shares of stock outstanding)*Benchmark PS
Let plug to determine
Stock price=($3,130,000/109,000) ×1.66
Stock price=28.72x 1.66
Stock price= $47.68
Therefore the stock price that you would
consider Appropriate is $47.68
n January 1, 2018, the Shagri Company began construction on a new manufacturing facility for its own use. The building was completed in 2019. The only interest-bearing debt the company had outstanding during 2018 was long-term bonds with a book value of $11,600,000 and an effective interest rate of 11%. Construction expenditures incurred during 2018 were as follows: January 1 $ 660,000 March 1 696,000 July 31 576,000 September 30 760,000 December 31 460,000 Required: Calculate the amount of interest capitalized for 2018.
Answer:
$183,700
Explanation:
Calculation to determine the amount of interest capitalized for 2018.
First step is to calculate the Accumlated expenditure
Date Expenditure * Weight = Average
January 1 660000 * 12/12 =660,000
March 1 696000 * 10/12 = 580,000
July 31 576000 * 5/12 = 240,000
September 30 760000 * 3/12 =190,000
December 31 460000 * 0/12 = 0
Accumulated expenditure=660,000+580,000+240,000+190,000
Accumulated expenditure=$1,670,000
Now let determine the amount of interest capitalized for 2018
Interest capitalized for 2018=$1,670,000 * 11%
Interest capitalized for 2018=$183,700
Therefore the amount of interest capitalized for 2018 is $183,700
XYZ Company has a variable cost ratio of 40%, fixed expenses of $200,000, and desires to earn operating income of $100,000. Total sales revenue required to achieve XYZ Company's desired operating income is:
Answer:
Sales revenue = $500,000
Explanation:
Below is the calculation:
Formula for variable cost ratio = Total variable expenses (Total variable cost) / Net Sales = 40%
40% = Total variable cost / Net Sales
Total variable cost = 0.40 Net sales
Operating income = Total revenue - fixed cost - variable cost
100,000 = Total revenue - 200,000 - 0.40 total revenue
300,000 = 0.60 total revenue
Total Revenue = 300,000/ 0.6
Sales revenue = $500,000
Daphne has received job offers in six different cities across the United States. The table below shows the nominal wage she is being offered in each city and the average monthly rent for an apartment in each city. a. Calculate Daphne’s real wage in terms of how many months of rent her wage could purchase in each city and complete the “Real Wage” column in the table below.
resented below is information related to Sandhill Enterprises.
Jan. 31 Feb. 28 Mar. 31 Apr. 30
Inventory at cost $15,750 $15,855 $17,850 $14,700
Inventory at LCNRV 15,225 13,230 16,380 13,965
Purchases for the month 17,850 25,200 27,825
Sales for the month 30,450 36,750 42,000
From the information, prepare as far as the data permit monthly income statements in columnar form for february march and april.
Answer:
Sandhill Enterprises
Sandhill Enterprises
Income Statements
For the months ended Feb. 28, March 31, and April 30, 2020:
Feb. 28 March 31 April 30
Sales for the month $30,450 $36,750 $42,000
Cost of goods sold 19,845 22,050 30,240
Gross profit $10,605 $14,700 $11,760
Explanation:
a) Data and Calculations:
Jan. 31 Feb. 28 Mar. 31 Apr. 30
Inventory at cost $15,750 $15,855 $17,850 $14,700
Inventory at LCNRV 15,225 13,230 16,380 13,965
Purchases for the month 17,850 25,200 27,825
Sales for the month 30,450 36,750 42,000
Determining the ending inventory based on LCNRV:
Jan. 31 Feb. 28 Mar. 31 Apr. 30
Inventory at cost $15,750 $15,855 $17,850 $14,700
Inventory at LCNRV 15,225 13,230 16,380 13,965
Ending inventory 15,225 13,230 16,380 13,965
Beginning inventory 15,225 13,230 16,380
Determining the Cost of Goods Sold:
Beginning inventory 15,225 13,230 16,380
Purchases for the month 17,850 25,200 27,825
Ending inventory 13,230 16,380 13,965
Cost of goods sold 19,845 22,050 30,240
Hartford, Inc. manufactures a single product. Shown are projected revenues and costs based on last year's income statement (8,000 units) and practical capacity (10,000 units). The costs are either variable, fixed, or mixed (part variable and part fixed.) You need to figure out what the cost type is based on the cost behavior.Last Year(8,000 units) Practical Capacity(10,000 units) Total Per Unit Total Per UnitRevenue $800,000 $100.00 $1,000,000 $100.00Costs: Direct Material $200,000 $25.00 $250,000 $25.00Direct Labor $160,000 $20.00 $200,000 $20.00Mfg. Overhead $180,000 $22.50 $200,000 $20.00Selling Expenses $40,000 $5.00 $50,000 $5.00Admin. Expenses $50,000 $6.25 $50,000 $5.00Total Costs $630,000 $78.75 $750,000 $75.00Pre-Tax Profit $170,000 $250,000 RequiredAssume that Hartford expects to sell the same number of units as last year in their normal distribution channels (8,000 units). They have received an offer from a one-time customer (not part of their normal customer mix) to buy 1,000 units (additional to their expected normal sales) at a price of $71. By how many dollars would pre-tax profit increase or decrease if Hartford accepts the special order? (9 points)
Answer:
Hartford, Inc.
If Hartford accepts the special order, the pre-tax profit would increase by
= $21,000.
Explanation:
a) Data and Calculations:
Production and sales capacity last year = 8,000 units
Practical capacity = 10,000 units
Last Year Practical Capacity
(8,000 units) (10,000 units)
Total Per Unit Total Per Unit
Revenue $800,000 $100.00 $1,000,000 $100.00
Costs:
Direct Material $200,000 $25.00 $250,000 $25.00
Direct Labor $160,000 $20.00 $200,000 $20.00
Mfg. Overhead $180,000 $22.50 $200,000 $20.00
Selling Expenses $40,000 $5.00 $50,000 $5.00
Admin. Expenses $50,000 $6.25 $50,000 $5.00
Total Costs $630,000 $78.75 $750,000 $75.00
Pre-Tax Profit $170,000 $250,000
Variable cost per unit $50.00 $50.00
Fixed cost $230,000 $250,000
Sales revenue from the one-time customer = $71,000
Variable cost per unit 50,000
Additional pre-tax profit (increase) $21,000
3) Monopolists set prices A) At the minimum of the long-run average total cost curve. B) Without constraints since there is no competition. C) On the marginal revenue curve. D) At the output where marginal revenue equals marginal cost.
Answer:
D At the output where marginal revenue equals marginal cost.
Explanation:
As we know that the monopolist have the market power so we can said that the prices can be set at the output level i.e. when the marginal revenue is equivalent to the marginal cost
So as per the given options, the option d is correct
And, the same should be considered and relevant
Equipment with a book value of $65,300 and an original cost of $133,000 was sold at a loss of $14,000. Paid $89,000 cash for a new truck. Sold land costing $154,000 for $198,000 cash, yielding a gain of $44,000. Long-term investments in stock were sold for $60,800 cash, yielding a gain of $4,150. Use the above information to determine cash flows from investing activities.
Answer:
Net cash provided by investing activities $221,100
Explanation:
The computation of the cash flows from investing activities is shown below:
Sale of equipment (65300 - 14000) 51300
Less: Purchase of new truck -89000
Add: Sale of land 198000
Add: Sale of Long-term investments 60800
Net cash provided by investing activities $221,100
On December 31, the company estimates future sales refunds to be $900. As of that date, the company has an unadjusted debit balance in Accounts Receivable of $25,000 and an unadjusted credit balance of $300 in Sales Refunds Payable.
Requried:
Write down the necessary adjusting entry.
Answer:
Date Account titles and Explanation Debit Credit
Dec 31 Sales return and allowance $600
Sales refund payable $600
($900 - $300)
(To record the expected refund of sales)
