Answer:
Earnings per share= $3.58
Explanation:
Earnings per share(EPS) = Earnings attributable to share/Number of shares
Price per share = $3,900,000/60,000=$65 per share
The units of shares to be re-purchased with debt proceed
= The proceeds from debt/share price
=$975,000/$65= 15,000
The number of shares outstanding after repurchased = 60,000-15,000= 45,000 units
EBIT 220,000
Less interest (6%×975,000) (58,500)
Earnings attributable to shares 151,500
Earnings per share 151,500/45,000 units=$3.58
Earnings per share= $3.58
Suresh Co. expects its five departments to yield the following income for next year.
Dept. M Dept. N Dept. O Dept. P Dept. T Total
Sales $82,000 $44,000 $78,000 $65,000 $43,000 $312,000
Expenses
Avoidable 17,300 45,400 18,000 21,500 51,300 $153,500
Unavoidable 57,800 21,600 5,700 54,300 20,300 $159,700
Total expenses 75,100 67,000 23,700 75,800 71,600 313,200
Net income (loss) $6,900 $(23,000) $54,300 $(10,800) $(28,600) $(1,200)
Required:
Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios.
Question Completion:
Management eliminates departments with sales dollars that are less than avoidable expenses.
Answer:
Suresh Co.
Departmental Income Statements
Dept. M Dept. O Dept. P Total
Sales $82,000 $78,000 $65,000 $225,000
Expenses
Avoidable 17,300 18,000 21,500 $56,800
Unavoidable 57,800 5,700 54,300 $159,700
Total expenses 75,100 23,700 75,800 216,500
Net income (loss) $6,900 $54,300 $(10,800) $8,500
Explanation:
a) Data and Calculations:
Dept. M Dept. N Dept. O Dept. P Dept. T Total
Sales $82,000 $44,000 $78,000 $65,000 $43,000 $312,000
Expenses
Avoidable 17,300 45,400 18,000 21,500 51,300 $153,500
Unavoidable 57,800 21,600 5,700 54,300 20,300 $159,700
Total expenses 75,100 67,000 23,700 75,800 71,600 313,200
Net income (loss) $6,900 $(23,000) $54,300 $(10,800)$(28,600)$(1,200)
b) The unavoidable expenses will not change when the two departments have been eliminated. This is why the total unavoidable expenses and the total net income do not tally with the departmental unavoidable and net income sums.
Jesse is a part-time nonexempt employee in Austin, Texas, who earns $12.50 per hour. In January, during the last biweekly pay period he worked 35 hours. He is married with zero withholding allowances, which means his federal income tax deduction is $10.00, and has additional federal tax withholding of $30 per pay period. (Do not round interim calculations, only round final answer to two decimal points.) What is his net pay?
Answer: $364.03
Explanation:
From the information given, Jesse's net pay will be:
Gross Pay = $12.50 × 35 = $437.50
Less: Federal tax = $30.00
Less: Fica = $27.12
Less: Medicare $6.35
Less: federal income tax deduction = $10.00
Less: State = $0.00
Net Pay = $364.03
Based on the calculation above, Jesse's net pay will be $364.03
George noticed that some of the top salespeople on his team were spending more time checking their phones than contributing to the group's development of a new strategic plan. He decided that if his peers weren't going to make a concerted effort on the project, then he wasn't either. George put down his notepad and started tapping on his phone. Which concept best describes George's action
Answer:
The answer is "the s ucker effect"
Explanation:
Please find the image.
Some people work extremely hard but lose their drive when they see other riders who are not riding in the community. It won't fit, that's exactly what's happening here. After noting other people who did not carry out the initiative, he also began using his telephones and placed down his paper pad. It is also an operation, for which a person works less than a like independent member, as a group member.
You are 25 years old and are considering full-time study for an MBA degree. Tuition and other direct costs will be $60,000 per year for two years. In addition, you will have to give up your current job that has a salary of $50,000 per year. Assume tuition is paid and salary received at the end of each year. By how much does your salary have to increase (in real terms) as a result of getting your MBA degree to justify the investment? Assume a real interest rate of 2% per year, ignore taxes, assume that the salaries for both jobs increase at the rate of inflation (i.e. they stay constant in real terms), and that you retire at 65. Note: the $1 for T periods annuity formula is (1/r)*[1-1/(1+r)^T]. g
Answer:
$8,403.73
Explanation:
The job will be started at the age of 27 ( 25 years + 2 years ) and retirement will be at the age of 65.
Hence the employment years are 38 years ( 65- 27 ).
Cost of MBA program = Direct cost + Opportunity cost = $60,000 + $50,000 = $110,000
At the age of 27, the total cost of the program will be
Total Cost of MBA program = Cost of program in first year + Cost of program in last year = $110,000 + ( $110,000 x ( 1 + 2% ) ) = $110,000 + $112,200 = $222,200
Use the following formula to calculate teh required salary
Calculate the annuity factor
Annuity factor = (1/r)*[1-1/(1+r)^T] = (1/2%)*[1-1/(1+2%)^38] = 26.440640602064
Now use the following formula to calculate the required salary
Required salary = Total cost of MBA program / Annuity factor for 38 years at 2% = $222,200 / 26.440640602064 = $8,403.73
The Chilton Corporation specializes in manufacturing one type of desk lamp. Chilton allocates variable manufacturing overhead costs on the basis of machine hours. Chilton budgeted 0.3 machine hours per lamp and allocates overhead at a rate of $1.90 per machine hour. Last year Chilton manufactured 19,000 lamps, used 7,600 machine hours and incurred actual overhead costs of $12,920. What was Chilton's variable manufacturing overhead efficiency variance last year?
A. $9,660 favorable
B. $4,140 unfavorable
C. $4,140 favorable
D. $9,660 unfavorable
Answer:
See below
Explanation:
Given the above information, we can compute variable manufacturing overhead efficiency variance to be;
= (SA - AQ) × SR
Where
Standard quantity = SQ = 19,000
Actual Quantity = AQ = 7,600
Standard Rate = SR = $1.9
Variable manufacturing overhead efficiency variance
= [(19,000 × 0.3) - 7,600] × $1.9
= (5,700 - 7,600) × $1.9
= $3,610 U
Mio was transferred from New York to Germany. He lived and worked in Germany for 340 days in 2020. Mio's salary for 2020 is $190,000. Assume a 366-day year. In your computation, round any division to four decimal places before converting to a percentage. For example, 0.473938 would be rounded to 0.4739 and converted to 47.39%. If required, round your final answer to the nearest dollar. What is Mio's foreign earned income exclusion
Answer:
Mio's foreign earned income exclusion is $99,960
Explanation:
The calculation of the Mio's foreign earned income exclusion is given below:
The foreign earned income exclusion limit for 2020 is $107,600
Now the foreign earned income exclusion depend on days equivalent to
= Foreign earned income exclusion limit × (2020 days ÷ total number of days in a year)
= $107,600 × (340 days ÷ 366 days)
= $99,960
Hence, Mio's foreign earned income exclusion is $99,960
Place the events in order to describe how money the Fed adds to the economy starts to be multiplied. The reserve requirement in this example is 10%.
a. The bank lends $900 to a customer needing a loan.
b. The store owner deposits the $900 in another bank.
c. The customer spends the $900 at a store.
d. The bank sets $100 aside as required reserves.
e. The Fed buys a security from a bank for $1,000.
Answer:
1. e. The Fed buys a security from a bank for $1,000.
In order to increase money supply, the Fed buys a security from the bank and gives them money.
2. d. The bank sets $100 aside as required reserves.
The bank will set aside 10% of the money paid by the Fed which comes to $100 leaving the bank with $900.
3. a. The bank lends $900 to a customer needing a loan.
The bank then lends this money to customer who needed it.
4. c. The customer spends the $900 at a store.
The customer then spends the money thereby transferring it to another party.
5. b. The store owner deposits the $900 in another bank.
The store owner then takes the money spent by the customer and deposits it in another bank. That bank then gives the Fed 10% and then the cycle repeats.
Answer:
E.
D.
A.
C.
B.
Explanation:
Amy and Mack Holly from Rapid City, South Dakota, have been married for three years. They recently bought a home costing $212,000 using a $190,000 mortgage. They have no other debts. Mack earns $61,000 per year, and Amy earns $75,000. Each has a retirement plan valued at approximately $15,000. They recently received an offer in the mail from their mortgage lender for a mortgage life insurance policy of $190,000. Their only life insurance currently is a $19,000 cash-value survivorship joint life policy. They each would like to provide the other with support for at least five years if one of them should die.
Required:
Assuming $18,000 in final expenses and $20,000 allocated to help make mortgage payments, calculate the amount of life insurance they should purchase using the needs-based approach.
Answer:
I do not have time to answer this question, but you could answer this question on a calculator and find out the order and if its multiplying, subtracting, dividing or adding.
Explanation:
Thank you!-Brainly UserAmy and Mack should purchase a life insurance policy with a coverage amount of $1,037,000, using the needs-based approach.
To calculate the amount of life insurance Amy and Mack should purchase using the needs-based approach, we need to consider various factors such as outstanding debts, living expenses, and specific financial goals. Given the information provided, we will calculate the life insurance amount required to cover final expenses and help make mortgage payments for at least five years.
Final expenses:
Final expenses = $18,000
Mortgage payment assistance:
Mortgage payment assistance per year = $20,000
Mortgage payment assistance for five years = $20,000 * 5 = $100,000
Outstanding mortgage:
Outstanding mortgage = $190,000
Current joint life policy:
Current joint life policy = $19,000
Income replacement:
Amy's income = $75,000
Mack's income = $61,000
Total annual income = $75,000 + $61,000 = $136,000
Income replacement for five years = $136,000 * 5 = $680,000
Retirement plan:
Amy's retirement plan = $15,000
Mack's retirement plan = $15,000
Total retirement plan = $15,000 + $15,000 = $30,000
Now, let's calculate the total life insurance amount needed:
Total life insurance needed = Final expenses + Mortgage payment assistance + Outstanding mortgage + Current joint life policy + Income replacement + Retirement plan
= $18,000 + $100,000 + $190,000 + $19,000 + $680,000 + $30,000
= $1,037,000
Therefore, using the needs-based approach, Amy and Mack should purchase a life insurance policy with a coverage amount of $1,037,000.
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wo firms, A and B, each currently emit 100 tons of chemicals into the air. The government has decided to reduce the pollution and from now on require a pollution permit for each ton of pollution emitted into the air. The government gives each firm 50 pollution permits, which it can either use of sell to the other firm. It costs Firm A $200 for each ton of pollution that it eliminates before it is emitted into the air, and it cots Firm B $100 for each ton of pollution that it eliminates before it is emitted into the air. If the two firms have the same bargaining power, what would be the gains from trade for Firm B
Answer:
Firm A will buy all of the firm B's pollution permits. Each one will cost between $100 and $200.
Explanation:
The firm B will gain from the trade of pollution permits. Firm A will need higher pollution permits since it emits 100 tons of chemicals into air and the cost for eliminating each ton is $200. This cost is higher than the cost to Firm B which is $100 only. Firm A will buy all the pollution permits from Firm B and there will advantage for the Firm B to gain from the trade.
Thomson Co. produces and distributes semiconductors for use by computer manufacturers. Thomson Co. issued $900,000 of 10-year, 7% bonds on May 1 of the current year at face value, with interest payable on May 1 and November 1. The fiscal year of the company is the calendar year.
May 1. Issued the bonds for cash at their face amount.
Nov. 1. Paid the interest on the bonds.
Dec. 31. Recorded accrued interest for two months.
Required:
Journalize the entries to record the above selected transactions for the current year.
Answer:
May 1
Cash $900000 Dr
Bonds Payable $900000 Cr
November 1
Interest Expense $31500 Dr
Cash $31500 Cr
Dec 31
Interest Expense $10500 Dr
Interest Payable $10500 Cr
Explanation:
May 1
The bonds are issued at face value which means the company has received full amount of face value which is $900000. So, we debit cash by $900000 and credit bonds payable by the same amount.
Nov 1
The bonds pay interest semi annually and the amount of semi annual interest is,
Semi annual interest = 900000 * 0.07 * 6/12 = $31500
So, when this interest is paid, interest expense is recorded by $31500 as debit and cash is credited by same amount.
Dec 31
Following the accrual basis of accounting, the interest on bond that relates to November and December of the current year will be recorded as a liability and as an expense for this year. Thus, the amount of the interest will be,
Interest accrued - two months = 900000 * 0.07 * 2/12 = 10500
Chronic Pain Clinic has estimated the following cash flows associated with a new project. The project cost of capital (discount rate) is 10 percent. Year Expected Net Cash Flow 0 ($800,000) 1 400,000 2 400,000 3 400,000 What is the project’s IRR? A. 18.5 percent B. 19.9 percent C. 20.4 percent D. 21.8 percent E. 23.4 percent
Answer:
E. 23.4 percent
Explanation:
The computation of the internal rate of return is shown below
Given that
The project cost of capital is 10%
And, the year and net cash flow is
Year Expected Net Cash Flow
0 ($800,000)
1 400,000
2 400,000
3 400,000
Now we apply the following formula
= IRR()
So the internal rate of return is 23.38% i.e. 23.4%
Trinkle Co., Inc. made several purchases of long-term assets in Year 1. The details of each purchase are presented here.
New Office Equipment
1. List price: $41,900; terms: 2/10 n/30; paid within discount period.
2. Transportation-in: $860. Installation: $510.
3. Cost to repair damage during unloading: $431.
5. Routine maintenance cost after six months: $110.
Basket Purchase of Copier, Computer, and Scanner for $51,000 with Fair Market Values
1. Copier $22,755.
2. Computer $6,765.
3. Scanner $31,980.
Land for New Warehouse with an Old Building Torn Down
1. Purchase price, $82,400.
2. Demolition of building, $4,750.
3. Lumber sold from old building, $1,800.
4. Grading in preparation for new building, $7,700.
5. Construction of new building, $217,000.
Required:
In each of these cases, determine the amount of cost to be capitalized in the asset accounts.
Answer:
New Office Equipment $42,863
Basket Purchase Of Copier, Computer, Scanner $61,500
Land For New Warehouse $310,050
Explanation:
Calculation to determine the amount of cost to be capitalized in the asset accounts
NEW OFFICE EQUIPMENT
Amount of cost to be capitalised in the asset accounts = $41,900*0.98+$860+$510+$431
Amount of cost to be capitalised in the asset accounts =$41,062+$860+$510+$431
Amount of cost to be capitalised in the asset accounts =$42,863
BASKET PURCHASE OF COPIER, COMPUTER AND SCANNER
Amount of cost to be capitalised in the asset accounts = $22,755 + $6,765 + $31,980
Amount of cost to be capitalised in the asset accounts= $61,500
LAND FOR NEW WAREHOUSE with an old building torn down
Amount of cost to be capitalised in the asset accounts = $82,400 + $4,750 - $1,800 + $7,700 + $217,000
Amount of cost to be capitalised in the asset accounts = $310,050
Therefore The Amount of cost to be capitalised in the asset accounts are:
New Office Equipment $42,863
Basket Purchase Of Copier, Computer, Scanner $61,500
Land For New Warehouse $310,050
Alan Krueger conducted a survey of fans at the 2001 Super Bowl who purchased tickets to the game for $325 or $400. Krueger found that (a) 94 percent of those surveyed would not have paid $3,000 for their tickets, and (b) 92 percent of those surveyed would not have sold their tickets for $3,000. These results are an example of A. the failure to ignore sunk costs. B. rational consumer behavior. C. the endowment effect. D. the fallacy of composition.
Answer:
C. the endowment effect
The cost of equipment purchased by Tamarisk, Inc., on June 1, 2020, is $142,800. It is estimated that the machine will have a $8,400 salvage value at the end of its service life. Its service life is estimated at 7 years, its total working hours are estimated at 67,200, and its total production is estimated at 672,000 units. During 2020, the machine was operated 7,020 hours and produced 64,350 units. During 2021, the machine was operated 6,435 hours and produced 56,160 units.
Compute depreciation expense on the machine for the year ending December 31, 2020, and the year ending December 31, 2021, using the following methods. (Round depreciation per unit to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 45,892.) 2020 2021 0
(a) Straight-line - 0
(b) Units-of-output - 0
(c) Working hours - 0
(d) Sum-of-the-years-digits - 0
(e) Double-declining-balance (twice the straight-line rate) $
Answer:
A. 2020 $11,200
2021 $19,200
B. 2020 $12,870
2021 $11,232
C. 2020 $14,040
2021 $12,870
D. 2020 $19,600
2021 $30,800
E. 2020 $23,799
2021 $33,999
Explanation:
Computation depreciation expense on the machine for the year ending December 31, 2020, and the year ending December 31, 2021,
(A)Computation for depreciation expense using Straight-line method
Using this formula
(cost-salvage) / useful life x depreciation from purchase date to end year
Let plug in the formula
2020
Depreciation expense= $142,800 - 8,400 / 7
Depreciation expense= 19,200 x (7/12)
Depreciation expense= $11,200 (for 2020)
2021
Depreciation expense= $142,800 - 8,400 / 7
Depreciation expense= 19,200 (for 2021)
(B) Computation for depreciation expense using Units-of-output Method
Using this formula
(cost - salvage) / total units produced x estimated units 2020/21
Let plug in the formula
Depreciation expense 2020:
Depreciation expense= ($142,800 - 8,400) / 672,000) x 64,350
Depreciation expense= 0.20x 64,350
Depreciation expense= $12,870
Depreciation expense 2021:
Depreciation expense=($142,800 - 8,400) / 672,000) x 56,160
Depreciation expense= 0.20x 56,160
Depreciation expense= $11,232
(C) Computation for depreciation expense using Working hours
Using this formula
(cost-salvage) / total working hours x estimated working hours 2020/21
Let plug in the formula
Depreciation expense 2020:
Depreciation expense= (($142,800 - 8,400)/67,200) x 7,020
Depreciation expense= 2 x 7,020
Depreciation expense= $14,040
Depreciation expense 2021:
Depreciation expense= ($142,800 - 8,400)/67,200) x 6,435
Depreciation expense= 2 x 6,435
Depreciation expense= $12,870
(D)Computation for depreciation expense using
Sum-of-the-years'-digits
n(n+1)/2
Depreciation expense 2020:
Depreciation expense= ($142,800 - 8,400)x 7/28 x 7/12
Depreciation expense=$134,400 x (7/28) x (7/12)
Depreciation expense= 33,600 x (7/12)
Depreciation expense= $19,600
Depreciation expense 2021:
Depreciation expense= (($142,800 - 8,400) x 7/28 x 5/12) +(($142,800-8,400) x 6/28 x 7/12)
Depreciation expense= $14,000 + $16,800
Depreciation expense= $30,800
(E) Computation for depreciation expense using Double-declining-balance
First step
1 / useful life x 100 x 2
= 1/7 x 100 x 2
= 28,57%
Now let calculate the Depreciation expense for 2020 and 2021
Depreciation expense 2020:
Depreciation expense=142,800 x 28.57 x (7/12)
Depreciation expense= $23,799
Depreciation expense 2021:
Depreciation expense=(142,800 -$23,799 ) x 28.57
Depreciation expense= $33,999
To be effective, an item used as money should serve several functions. Select the statement that best describes money's function as a standard of deferred payment.
a. That a currency can be used to express the value goods and services that are both relatively expensive and goods and services that are relatively cheap.
b. That the purchasing power of a currency is relatively stable over time.
c. That people are willing to accept a currency in the future as compensation for debts accrued earlier.
d. That a currency is widely accepted in exchange for goods and services and therefore makes economic transactions easier.
Answer:
c. That people are willing to accept a currency in the future as compensation for debts accrued earlier.
Explanation:
Money defines the legal tender i.e. offically issued and that involved the notes, currencies, coins that are circulated via medium of exchange that govern by the government.
So here the people would to accept the currency in the future that become compensation for the debt that accrued earlier
Hence, the option c is correct
Machinery purchased for $73,800 by Blossom Co. in 2016 was originally estimated to have a life of 8 years with a salvage value of $4,920 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2021, it is determined that the total estimated life should be 10 years with a salvage value of $5,535 at the end of that time. Assume straight-line depreciation.
Required:
Prepare the entry to correct the prior years' depreciation, if necessary.
Answer:
See explanation
Explanation:
Prior year depreciation lies in the Profit Reserve called Retained Earnings and in the Asset therefor correct Profit Balance and Asset Balances to effect this adjustment.
Depreciation Expense = (Cost - Salvage Value ) ÷ Estimated Useful Life
A company has the following information. What is the financial leverage ratio? Total assets $736,000 Total liabilities 314,000 Interest expense 9,400
Answer:
1.7441
Explanation:
Calculation to determine financial leverage ratio
Using this formula
Financial leverage ratio=Total assets/(Total assets-Total liabilities)
Let plug in the formula
Financial leverage ratio=736,000/(736,000 - 314,000)
Financial leverage ratio= 1.7441
Therefore the financial leverage ratio is 1.7441
Allison Company has 40,000 shares of $320 par value, 5% cumulative preferred stock and 140,000 shares of $80 par value common stock. Allison declares and pays cash dividends amounting to $900,000. If no arrearage on the preferred stock exists, how much in dividends per share (use two decimal places) is paid to the common stockholders
Answer:
$1.86
Explanation:
Preference shares get first preference when dividends are being paid. So, out of the dividend declared, we first payoff Preference dividends then the remainder goes to Common Stock holders.
Cash Dividend = $900,000
Preference Dividends
Preference Stockholders receive a fixed dividend calculated as :
Dividend = 40,000 shares x $320 x 5 % = $640,000
Dividend per share = $640,000 / 40,000 = $16.00
Common Stockholders Dividends
Remainder = $900,000 - $640,000 = $260,000
Dividend per share = $260,000 / 140,000 = $1.86
Conclusion :
Dividends per share paid to the common stockholders is $1.86
On January 1, Year 1 Residence Company issued bonds with a $50,000 face value. The bonds were issued at 96 resulting in a 4% discount. They had a 20 year term and a stated rate of interest of 7%. Assuming a straight-line amortization of the discount, the amount of interest expense recognized on the December 31, Year 1 income statement is
Answer:
$3,600
Explanation:
According to the scenario, computation of the given data are as follows,
Bonds Face value = $50,000
Discount = 4%
Time period = 20 years
Interest rate = 7%
Premium = $50000 - ( $50,000 × 96%) = $2,000
So, we can calculate interest expense by using following formula,
Interest expense = ($50,000 × 7%) + ($2,000 ÷ 20)
= $3,600
if you are going to create or own a business, what would it be? List at least 3 and cite your reasons why you have listed them.
Answer:
If I were to create a business, and had to choose three alternatives of commercial sectors in which to get involved, I would choose the following:
-Renewable energies, given that given the eventual disappearance of fossil fuels and the rise of electric cars, renewable energies will become the main source of power in the medium-term future.
-Mining of cryptocurrencies, inasmuch as these currencies have been classified as the money of the future, and the exponential growth they have had since their inception has been remarkable.
-Retail of essential consumer goods, such as food, as it is a necessary industry and whose consumption, despite the ups and downs of the economy, never declines.
A Joe and Jorge both graduated from an engineering college and decided to donate money to their college. They set up 10 engineering scholarships per year starting in 2046 for every year (assume more than 100 years). If $50,000 is invested in the trust fund in the year 2021 and if it earns a very good rate of return of 12% per year, what will the amount of each scholarship be starting in 2046
Answer:
Each scholarship will have an amount of $ 85,000.
Explanation:
Since Joe and Jorge both graduated from an engineering college and decided to donate money to their college, and they set up 10 engineering scholarships per year starting in 2046 for every year, if $ 50,000 is invested in the trust fund in the year 2021 and if it earns a very good rate of return of 12% per year, to determine what will the amount of each scholarship be starting in 2046 the following calculation must be performed:
(50,000 x 1.12 ^ (2046-2021)) / 10 = X
(50,000 x 1.12 ^ 25) / 10 = X
850,003.22 / 10 = X
85,000.32 = X
Therefore, each scholarship will have an amount of $ 85,000.
To arrive at an accurate balance on a bank reconciliation statement, an error made by the bank in which the bank recorded the collection of a note and interest on behalf of another firm to the balance of the company's bank account should be
Answer:
Hi how are you doing today Jasmine
Blue Skies Inc. is a retail gardening company that is piloting a new strategic initiative aimed at increasing gross profit. Currently, the company’s gross profit is 25% of sales, and its target gross profit percentage is 30%. The company’s current monthly sales revenue is $480,000.
The new initiative being piloted is to produce goods in-house instead of buying them from wholesale suppliers. Its in-house production process has two procedures. The makeup of the costs of production for Procedure 1 is 40% direct labor, 45% direct materials, and 15% overhead. The makeup of the costs of production for Procedure 2 is 50% direct labor, 25% direct materials, and 25% overhead. Assume that Procedure 1 costs twice as much as Procedure 2.
Required:
Determine what the cost of labor, materials, and overhead for both Procedures 1 and 2 would need to be for the company to meet its target gross profit.
1. Cost makeup of Procedure 1:
Direct Labor
Direct Materials
Overhead
Total
2. Cost makeup of Procedure 2:
Direct Labor
Direct Materials
Overhead
Total
Answer:
Cost of Procedure 1: $268,800
Cost of Procedure 2: $134,400
Explanation:
Sales $480,000.
Gross Profit 25% of $480,000.= $ 120,000
Cost of Goods Sold = 480,000-120,000= $ 360,000
Procedure 1 costs twice as much as Procedure 2
Process 1 costs $ 240,000 Process 2 costs $ 120,000
To get a gross profit of 30% the sales would increase by
0.25 480,000
0.3 x
x= 480,000*0.3/0.25= $576,000
Sales $576,000.
Gross Profit 30% of $576,000.= $ 172,800
Cost of Goods Sold = 576,000-172,800= $ 403,200
Procedure 1 costs twice as much as Procedure 2
Process 1 costs $ 268,800 Process 2 costs $ 134,400
Procedure 1
1. Cost makeup of Procedure 1:
45% direct materials, = 45% of $ 268,800 = $ 120,960
40% direct labor, = 40% of $ 268,800 = $ 107,520
15% overhead.= 15% of $ 268,800 = $ 40,320
Total $268,800
Procedure 2
2. Cost makeup of Procedure 2
25% direct materials,=25% of $ 134,400 = $ 33,600
50% direct labor,= 50% of $ 134,400 = $ 67,200
25% overhead.=25% of $ 134,400 = $ 33,600
Total 134,400
1. Cost makeup of Procedure 1:
Direct materials, $ 120,960
Direct labor, $ 107,520
Overhead. $ 40,320
Total $268,800
Procedure 2
2. Cost makeup of Procedure 2
Direct materials $ 33,600
Direct labor, $ 67,200
Overhead. $ 33,600
Total 134,400
Hardware is adding a new product line that will require an investment of . Managers estimate that this investment will have a 10-year life and generate net cash inflows of the first year, the second year, and each year thereafter for eight years. The investment has no residual value. Compute the payback period.
Answer: 6.17 years
Explanation:
Payback period = Period before debt is paid back + Amount left to to be paid back / Cashflow in year of payback.
Year Cash Flows Amount left to be paid back
0 (1,540,000) (1,540,000)
1 315,000 (1,225,000)
2 265,000 (960,000)
3 230,000 (730,000)
4 230,000 (500,000)
5 230,000 (270,000)
6 230,000 (40,000)
7 230,000 190,000
Year before payback = 6
Payback amount = 6 + (40,000 / 230,000)
= 6.17 years
The management accountant at Lang Manufacturing Co. collected the following data in preparation for a life-cycle analysis on one of its products, a leaf blower: Item This Year Change Over Last Year Average Annual Change Over the Last Four Years Annual sales $ 2,700,000 + 1.8 % + 23.5 % Unit sales price 450 + 2.4 % + 8.3 % Unit profit 100 − 1.0 % + 3.0 % Total profit 600,000 − 1.2 % + 30.0 % The stage of the sales life cycle the product is in is:
Answer: Maturity
Explanation:
When a product gets to Maturity level, it will see its sales slow down. The sales will still be increasing but at a very low or stable rate.
At the growth state however, sales will be growing at a fast rate and so will profit.
This product is at the maturity stage because over the previous year, its sales have slowed down and are now increasing at a very low rate as a mature product would. In the past four years it was in growth based on the given figures but as of the last year, it had crossed over into maturity.
Discount loan. Up-Front Bank uses discount loans for all its customers who want one-year loans. Currently, the bank is providing one-year discount loans at . What is the effective annual rate on these loans? If you were required to repay at the end of the loan for one year, how much would the bank have given you at the start of the loan? If you were required to repay $ at the end of the loan for one year, how much would the bank have given you at the start of the loan?
Complete Question:
Discount loan. Up-Front Bank uses discount loans for all its customers who want one-year loans. Currently, the bank is providing one-year discount loans at 7.9%. What is the effective annual rate on these loans? If you were required to repay $205,000 at the end of the loan for one year, how much would the bank have given you at the start of the loan? If you were required to repay $205,000 at the end of the loan for one year, how much would the bank have given you at the start of the loan? $Џ (Round to the nearest dollar.)
Answer:
Up-Front Bank
a. The effective annual rate on these loans = 8.58%
b. The amount would have given $188,805.
Explanation:
a) Data and Calculations:
Discount on loans = 7.9%
Effective annual rate on the loans = 7.9%/(100% - 7.9%)
= 7.9%/92.1%
= 0.0858
= 8.58%
b) Amount to be repaid to the bank = $205,000
Amount given after the discount is deducted = $205,000 * 0.921
= $188,805
Amount deducted as interest = $16,195 ($205,000 * 7.9%)
Check:
Effective interest rate = $16,195/$188,805 * 100 = 8.58%
c) Up-Front Bank's discount loan does not require the payment of interest or any other charges. Instead, these are deducted upfront from the face amount of the loan before it is given out. The implication is that the receiver of the loan receives less than the face value. In determining the effective interest rate, the discount amount is divided by the actual loan amount received, multiplied by 100.
Venture capital required rate of return. Blue Angel Investors has a success ratio of with its venture funding. Blue Angel requires a rate of return of for its portfolio of lending, and the average length on its loans is years. If you were to apply to Blue Angel for a $ loan, what is the annual percentage rate you would have to pay for this loan?
Complete Question:
Venture capital required rate of return. Blue Angel Investors has a success ratio of 10% with its venture funding. Blue Angel requires a rate of return of 20% for its portfolio of lending, and the average length on its loans is 5 years. If you were to apply to Blue Angel for a $100,000 loan, what is the annual percentage rate you would have to pay for this loan?
Answer:
Blue Angel Venture Capital
The annual percentage rate to be paid for this loan is:
= 38%
Explanation:
a) Data and Calculations:
Blue Angel Loan = $100,000
Required rate of interest = 20%
Average length of Blue Angel loan = 5 years
Success ratio of venture funding = 10%
Annual loss sustained from loan = 20% * (100% - 10%)
= 20% * 90%
= 18%
Therefore the annual percentage rate to be paid for this loan is:
38% (20 + 18%)
b) The implication is that the required rate of return expected by Blue Angel will be weighed by its failure rate of 90%. This indicates additional cost of loan. Therefore, the total annual percentage rate is the addition of the required rate of return and the rate of loss sustained.
Suppose Megan is considering emigrating from her home country.
A fictional country of Klaxon has the same policies and institutions as Megan's home country, except that it has greater price stability. If Megan's decision to emigrate is based solely on the prospects for economic growth, she would_________.
Following Megan's decision, the western-most province of Klaxon separates from the rest of the country to form a new country, West Klaxon. West Klaxon plans to retain all the policies and institutions of Klaxon, except that West Klaxon will have less certainty in the rule of law. As a result, West Klaxon is a__________attractive emigration destination, from an economic perspective, than Klaxon.
Answer:
a. emigrate
b. more
Explanation:
Immigration attractiveness is a factor that draws immigrants to a foreign country. A country becomes more attractive when the economic prospects are brighter than at the home-country. The degree of immigration law enforcement also helps to either attract or deter potential migrants. In recent years, wars and misgovernment have propelled millions to move boundaries. At the same time, countries are imposing migration restrictions by imposing and implementing strict laws.
3. Suppose you are thinking of purchasing the Moore Co.’s common stock today. If you expect Moore to pay $3.1, $3.38, $3.70, $4.02, and $4.38 dividends at the end of year one, two, three, four, and five respectively and you believe that you can sell the stock for $95 at the end of year five. If you required return on this investment is 11%, how much will you be willing to pay for the stock today?
Answer:
$69.87
Explanation:
The price i would be willing to pay for the stock can be determined by finding the present value of the dividend payments
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
Cash flow in year 1 = 3.1
Cash flow in year 2 = 3.38
Cash flow in year 3 = 3.70
Cash flow in year 4 = 4.02
Cash flow in year 5 = 4.38 + 95 = 99.38
I = 11%
Present value = $69.87
To find the PV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
Which of the following is not one of the drivers of supply chain performance? A. facilities B. procedures C. information D. inventory
B. Procedures is not one of the drivers of supply chain performance.
The four main drivers of supply chain performance are facilities, inventory, information, and transportation. These drivers help to determine how responsive and efficient the supply chain is.
Good facilities or locations ensure that the goods produced are in good condition till they are requested by consumers. The quality of the goods is also preserved. Efficient transportation ensures that goods get to the customers on time. Inventory which involves stock-taking helps salespeople to know what goods are available and readily provide customers with the needed information and stock. Information is also an essential factor. Knowledge of factors affecting pricing, push versus pull, forecasting, etc., helps decision-makers to know what is needed to improve the quality of goods and their delivery.Conclusively, Procedures are not one of the drivers of supply chain performance.
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