Answer:
the meaning of assessment is the evaluation or estimation of the nature, quality, or ability of someone or something. like your being tested on you knowledge of something, so you have a test.
Explanation:
Answer:
the act of judging or deciding the amount, value, quality, or importance of something, or the judgment or decision that is made.the evaluation or estimation of the nature, quality, or ability of someone or something.
Henna Co. produces and sells two products, T and O. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 44,000 units of each product. Sales and costs for each product follow. Product T Product O Sales $ 774,400 $ 774,400 Variable costs 464,640 154,880 Contribution margin 309,760 619,520 Fixed costs 187,760 497,520 Income before taxes 122,000 122,000 Income taxes (32% rate) 39,040 39,040 Net income $ 82,960 $ 82,960 Required: 1. Compute the break-even point in dollar sales for each product
Answer:
Hanna Co.
The break-even point in dollar sales:
Product T Product O
= $469,400 $621,900
Explanation:
a) Data and Calculations:
Product T Product O
Sales unit 44,000 44,000
Sales $ 774,400 $ 774,400
Variable costs 464,640 154,880
Contribution margin 309,760 619,520
Fixed costs 187,760 497,520
Income before taxes 122,000 122,000
Income taxes (32% rate) 39,040 39,040
Net income $ 82,960 $ 82,960
Break-even point in dollar sales for each product:
Unit sales price $17.60 $17.60
Unit variable cost 10.56 3.52
Unit contribution $7.04 $14.08
Contribution margin ratio 0.4 0.8
Fixed costs 187,760 497,520
Break-even point in dollar sales = Fixed Costs/Contribution margin ratio
= $187,760/0.4 $497,520/0.8
= $469,400 $621,900
In the retail industry, ABC tries to add value to their products and services so they can attract customers who are willing to pay a higher price. ABC can be described as utilizing which of the following strategy?
A. Differentiation strategy.
B. Local strategy.
C. Regional strategy.
D. Cost-leadership strategy.
E. Global strategy.
Answer:
A. Differentiation strategy.
Explanation:
In a market different firms try to maintain a competitive edge over others. This is achieved by using various strategies like: Differentiation strategy, Local strategy, Regional strategy, Cost-leadership strategy, Global strategy.
In the given scenario ABC tries to add value to their products and services so they can attract customers who are willing to pay a higher price.
This is a differentiation strategy where a firm tries to make their product different from.otgers in order to maintain a competitive advantage over others
Assume that the risk-free rate is 3% and the required return on the market is 9%. What is the required rate of return on a stock with a beta of 1.9? Round your answer to two decimal places.
Answer:
Required return = 14.4%
Explanation:
Below is the calculation for the required rate of return:
Risk free rate = 3%
The required return on the market = 9%
Beta value = 0.9
Use the below formula:
Required return = Risk free rate + (Market risk premimum)(Beta value)
Required return = 3% + (9% - 3%)(1.9)
Required return = 3% + 6%
Required return = 14.4%
Using the following transactions, record journal entries, create financial statements, and assess the impact of each transaction on the financial statements.
Jun. 1 Jenna Aracel, the owner, invested $100,000 cash, office equipment with a value of $5,000, and $60,000 of drafting equipment to launch the company in exchange for common stock.
Jun. 2 The company purchased land worth $49,000 for an office by paying $6,300 cash and signing a long-term note payable for $42,700.
Jun. 3 The company purchased a portable building with $55,000 cash and moved it onto the land acquired on June 2.
Jun. 4 The company paid $3,000 cash for the premium on an 18-month insurance policy.
Jun. 5 The company completed and delivered a set of plans for a client and collected $6,200 cash.
Jun. 6 The company purchased $20,000 of additional drafting equipment by paying $9,500 cash and signing a long-term note payable for $10,500.
Jun. 7 The company completed $14,000 of engineering services for a client. This amount is to be received in 30 days.
Jun. 8 The company purchased $1,150 of additional office equipment on credit.
Jun. 9 The company completed engineering services for $22,000 on credit.
Jun. 10 The company received a bill for rent of equipment that was used on a recently completed job. The $1,333 rent cost must be paid within 30 days.
Jun. 12 The company collected $7,000 cash in partial payment from the client billed on June 9.
Jun. 14 The company paid $1,200 cash for wages to a drafting assistant.
Jun. 17 The company paid $1,150 cash to settle the account payable created in on June 8.
Jun. 20 The company paid $925 cash for minor maintenance of its drafting equipment.
Jun. 23 The company paid $9,480 cash in dividends.
Jun. 28 The company paid $1,200 cash for wages to a drafting assistant.
Jun. 29 The company paid $2,500 cash for advertisements on the web during June.
Required:
Journalize the above entires.
Answer:
1 - Cash (Dr.) $100,000
Office equipment (Dr.) $5,000
Drafting equipment (Dr.) $60,000
Capital (Cr.) $165,000
2- Land (Dr.) $49,000
Cash (Cr.) $6,300
Long term notes payable (Cr.) $42,700
3- Portable building (Dr.) $55,000
Cash (Cr.) $55,000
4- Insurance premium (Dr.) $3,000
Cash (Cr.) $3,000
5- Cash (Dr.) $6,200
Service Revenue (Cr.) $6,200
Explanation:
6- Drafting equipment (Dr.) $20,000
Cash (Cr.) $9,500
Long term notes payable (Cr.) $10,500
7- Accounts Receivable (Dr.) $14,000
Service revenue (Cr.) $14,000
8- Office equipment (Dr.) $1,150
Accounts Payable (Cr.) $1,150
9- Accounts Receivable (Dr.) $22,000
Engineering Service (Cr.) $22,000
10- Cash (Dr.) $9,000
Accounts Receivable (Cr.) $9,000
11- Wages expense (Dr.) $1,200
Cash (Cr.) $1,200
12- Accounts Payable (Dr.) $1,150
Cash (Cr.) $1,150
13- Maintenance expense (Dr.) $925
Cash (Cr.) $925
14- Dividends (Dr.) $9,480
Cash (Cr.) $9,480
15- Wages expense (Dr.) $1,200
Cash (Cr.) $1,200
16- Advertising expense (Dr.) $2,500
Cash (Cr.) $2,500
Most organizations are structured along functional lines or areas. Write a 1-2 page paper to communicate these functional aspects of a management information system. Explain what information is required and available to each functional area of an organization.This assignment needs to have the following:• A cover page (includes student's name, date, class title, and assignment title)• Paper needs to be 1-2 pages (minimum 1 full page),
Answer:
m
Explanation:
A firm has a capital structure with $30 million in equity and $90 million of debt. The cost of equity capital is 11% and the pretax cost of debt is 7%. If the marginal tax rate of the firm is 25%, compute the weighted average cost of capital of the firm.
Answer: 6.69%
Explanation:
The weighted average cost of capital is calculated as:
= (Weight of equity * Cost of equity) + (Weight of debt * after-tax cost of debt)
Weight of equity:
= 30 million / (30 + 90 million)
= 25%
Weight of debt:
= 100% - Weight of equity
= 100% - 25%
= 75%
WACC = (25% * 11%) + (75% * 7% *(1 - 25% tax rate))
= 2.75% + 3.9375%
= 6.69%
Delta Company produces a single product. The cost of producing and selling a single unit of this product at the company’s normal activity level of 86,400 units per year is: Direct materials $ 2.40 Direct labor $ 2.00 Variable manufacturing overhead $ 0.90 Fixed manufacturing overhead $ 3.75 Variable selling and administrative expenses $ 1.40 Fixed selling and administrative expenses $ 1.00 The normal selling price is $22.00 per unit. The company’s capacity is 106,800 units per year. An order has been received from a mail-order house for 1,700 units at a special price of $19.00 per unit. This order would not affect regular sales or the company’s total fixed costs. Required: 1. What is the financial advantage (disadvantage) of accepting the special order? 2. As a separate matter from the special order, assume the company’s inventory includes 1,000 units of this product that were produced last year and that are inferior to the current model. The units must be sold through regular channels at reduced prices. The company does not expect the selling of these inferior units to have any effect on the sales of its current model. What unit cost is relevant for establishing a minimum selling price for the inferior units?
Answer:
1. The financial advantage of accepting the special order is $20,910.
2. The relevant unit cost is the variable selling and administrative expenses of $1.40 per unit.
Explanation:
1. What is the financial advantage (disadvantage) of accepting the special order?
Since this order would not affect regular sales or the company's total fixed costs, it implies that only the variable costs will be considered to determine the financial advantage (disadvantage) of accepting the special order.
Therefore, we have:
Total variable cost per unit = Direct materials + Direct labor + Variable manufacturing overhead + Variable selling and administrative expenses = $2.40 + $2.00 + $0.90 + $1.40 = $6.70
Special order financial advantage (disadvantage) = (Special price per unit - Total variable cost per unit) * Units of special order = ($19.00 - $6.70) * 1,700 = $20,910
Therefore, the financial advantage of accepting the special order is $20,910.
2. As a separate matter from the special order, assume the company’s inventory includes 1,000 units of this product that were produced last year and that are inferior to the current model. The units must be sold through regular channels at reduced prices. The company does not expect the selling of these inferior units to have any effect on the sales of its current model. What unit cost is relevant for establishing a minimum selling price for the inferior units?
Since these units are inferior to the current model and must be sold through regular channels at reduced prices, the unit cost that is relevant for establishing a minimum selling price for the inferior units is therefore the variable selling and administrative expenses of $1.40 per unit.
Question 1: Topic - Bank Reconciliation
The 2020 June bank statement of Wheeler Ltd has just been received from its bankers. The owner, Ken
Wheeler, has been quietly monitoring internal controls over few months and has sufficient grounds to
believe that cash is being misappropriated in his business. He has approached an accounting consultant,
Tony, to verify his accounting records and confirm his worst fears. Tony is supplied with the
reconciliation statement at the end of last month together with the cash records and the most recent bank
statement of Wheeler Ltd.
Last Month’s Reconciliation statement is presented below:
Bank Reconciliation Statement as at 31 May 2020
($)
Balance as per Bank Statement 30 April 2020 4328.90 Cr
Add: Outstanding Deposit 1224.50
5553.40
Less: Unpresented Cheques 223.70
Balance per Cash at Bank Account at 31 May 2020 $5329.70 Dr
The total of the cash receipts journal for June is $64,776.30 and the total of the cash payments journal is
$63,265.60. The current bank statement shows that cheques presented and paid amount to $59,725.10,
and total deposits amount to $64,780.60. There are also additional debits on the statement for a
dishonored cheque for $210, and account fees for $20.
Additional information:
An examination of the records reveals that all reconciling items at 31 May 2020 appear in the bank
statement for June, unpresented cheques at 30 June total $7154.40, and the 30 June deposit of
$1950.40 has not been credited by the bank. Your check of the cash journals reveals that addition errors
have been made by the clerks responsible. Receipts should total $65,766.30 and payments should total
$63,185.60.
Required:
a) Prepare the Cash at Bank account of Wheeler Ltd showing the final balance at 30 June 2020.
(4 marks)
b) Prepare the bank reconciliation statement of Wheeler Ltd at 30 June 2020. (4 marks)
c) Advice the owner, Ken Wheeler, whether cash is being misappropriated by any amount, assuming
that the records maintained by the bank are accurate. (3 marks)
Answer:
Wheeler Ltd
Balance per Cash at Bank Account at 31 May 2020 $5,329.70 DR
Total cash receipts for June, 2020 $65,766.30
less Total cash payments for June, 2020 ($63,185.60)
Dishonored check ($210.00)
Bank charges ($20.00)
Adjusted balance per Cash at Bank $7,680.40 DR
Bank Reconciliation Statement at 30 June 2020
Adjusted balance per Cash at Bank $7,680.40
Add Unpresented cheques at 30 June total $7,154.40
Less Uncredited deposits = ($1,950.40)
Balance as per bank statement, 30 June, 2020 $12,884.40
c) Cash was misappropriated by $1,070 with the under-counting of cash receipts ($990) and overstatement of cash payments ($80).
Explanation:
a) Data and Calculations:
Total cash receipts = $64,776.30 $65,766.30 $990 error understated
Total cash payments = $63,265.60 $63,185.60 $80 error overstated
Checks presented and paid by bank = $59,725.10
Checks deposited in June = $64,780.60
Dishonored check $210
Bank charges $20
Additional information:
Unpresented cheques at 30 June total $7,154.40
Uncredited deposits = $1,950.40
Analyze the market for textbooks if printing costs for textbooks decrease due to the use of synthetic paper.
What would cause an economy to be producing at a point inside its production possibilities curve?
Answer:
The correct answer is: the lack of effectivization in the use of their resources inside the economy to obtain the best outcomes possibles.
Explanation:
To begin with, in the economic theory the term known as production possibilities curve refers to a strategic tool, a graphic that can be used by the professionals of the area in order to understand how the economy is working with its resources, if the economy is producing well enough then the economy should be getting great development results and the point inside the graphic should be in the limit of the curve, but if the point is in the inside of the curve then that means that the resources inside that particulary economy are not being fully use to their best in order to obtain the best outcome so that will explain that there is still possibility to expand the production according to the theory of the tool itself.
Jeniffer, a supervisor of a customer service team, is concerned about Mark's performance. She decides to talk to Mark
and schedules a meeting with him. If Jeniffer is using the directive counseling approach, which of the following should
be Jeniffer's first step?
Answer: She should first make a good conversation with Mark because you can solve this situation easier than just going straight to the point.
Explanation:
During its most recent fiscal year, Dover, Inc. had total sales of $3,260,000. Contribution margin amounted to $1,530,000 and pretax income was $445,000. What amount should have been reported as variable costs in the company's contribution margin income statement for the year
Answer:
$1,730,000
Explanation:
Given that;
Total sales = $3,260,000
Contribution margin = $1,530,000
Pretax income = $445,000
We know that
Contribution margin = Total sales - variable cost
Fixing in the above values, we'll have
$1,530,000 = $3,260,000 - Variable cost
Variable cost = $3,260,000 - $1,530,000
Variable cost = $1,730,000
Assume personal tax rates are lower than corporate tax rates. From a tax-paying shareholder point of view, how should a firm spend its excess cash once it has funded all positive net present value projects
Answer: e. repurchase shares
Explanation:
If the personal tax rates are lower than corporate tax rates then the company should engage in an activity that would put money into the pockets of shareholders such that they would take advantage of the lower personal tax rates.
The best way to do that would be a share repurchase. The company would probably buy at above market rates which would give shareholders capital gain and they wouldn't have to pay much taxes on it as personal rates are lower.
plz help me i cant fail this class
a 17-year annuity pays $1,100 per month, and payments are made at the end of each month. The interest rate is 16 percent compounded monthly for the first 6 years and 13 percent compounded monthly thereafter. What is the present value of the annuity
Answer:
The present value of the annuity is $73,091.50
Explanation:
Use the following formula to calculate the present value of the annuity
Present value of annuity = ( Annuity Payment x Annuity factor for first 6 years ) + [ ( Annuity Payment x Annuity factor for after 6 years ) x Present value factor for 6 years ]
Where
Annuity Payment = $1,000
Annuity factor for first 6 years = 1 - ( 1 + 16%/12 )^-(6x12) / 16%/12 = 46.10028344
Annuity factor for after 6 years = 1 - ( 1 + 13%/12 )^-((17-6)x12) / 13%/12 = 70.0471029820
Present value factor for 6 years = ( 1 + 16%/12)^-(6x12) = 0.385329554163
Placing values in the formula
Present value of annuity = ( $1,000 x 46.10028344 ) + [ ( $1,000 x 70.0471029820 ) x 0.385329554163 ]
Present value of annuity = $46,100.28 + $26,991.22
Present value of annuity = $73,091.50
Dotterel Corporation uses the variable cost concept of product pricing. Below is cost information for the production and sale of 35,000 units of its sole product. Dotterel desires a profit equal to a 11.2% rate of return on invested assets of $350,000. Fixed factory overhead cost $105,000 Fixed selling and administrative costs 35,000 Variable direct materials cost per unit 4.34 Variable direct labor cost per unit 5.18 Variable factory overhead cost per unit .98 Variable selling and administrative cost per unit .70 The markup percentage for the sale of the company's product is: Group of answer choices 14% 5.6% 45.71% 11.2%
Answer:
Dotterel Corporation
The markup percentage for the sale of the company's product is:
= 45.71%.
Explanation:
a) Data and Calculations:
Production and sales units = 35,000
Desired rate of return = 11.2%
Invested assets = $350,000
Desired profit = $39,200 ($350,000 * 11.2%)
Fixed factory overhead cost = $105,000
Fixed selling and administrative costs = $35,000
Total fixed costs = $140,000 ($105,000 + $35,000)
Variable direct materials cost per unit $4.34
Variable direct labor cost per unit 5.18
Variable factory overhead cost per unit 0.98
Variable selling and administrative cost per unit 0.70
Total variable costs per unit $11.20
Total variable costs = $392,000 ($11.20 * 35,000)
Contribution margin:
Fixed costs = $140,000
Desired profits 39,200
Total = $179,200
Markup = 45.71% ($179,200/$392,000 * 100)
Sales revenue = $571,000
Selling price per unit = $16.31
Faruq spends all of his income on two goods: tacos and milkshakes. His income is $100, the price of tacos is $10, and the price of milkshakes is $2. If Faruq purchases 10 milkshakes, he can purchase ________ tacos. Group of answer choices 18 8 50 10
Answer:
8
Explanation:
Amount he can spend on tacos = income - total price of milkshakes
total price of milkshakes = 2 x 10 = 20
100 - 20 = 80
quantity of tacos = 80 / 10 = 8
A company took a physical inventory at the end of the year and determined that $833,000 of goods were on hand. In addition, the following items were not included in the physical count:
Management determined that $96,000 of goods purchased were in transit that were shipped f.o.b. destination (goods were actually received by the company three days after the inventory count)
The company sold $40,000 worth of inventory f.o.b. destination.
What amount should Bell report as inventory at the end of the year?
Answer:
$873,000
Explanation:
Calculation of amount of inventory reported by Bell at the end of year :
Inventory amount = $833,000 + $40,000
Inventory amount = $873,000
Therefore, the amount that Bell should report as inventory at the end of the year is $873,000.
Which of the following conditions is characteristic of a monopolistically competitive firm in both the short-run and the long run?
a. P> MC
b. MC = ATC
c. P < MR
d. All of the above are correct.
Answer:
b or d
Explanation:
probably b but I am not sure tho sorry
The characteristic of a monopolistically competitive firm in both the short-run and the long run is P>MC.
The following information should be considered:
Monopolistically competitive firm has downward sloping demand curve and marginal revenue curve for monopolistically competitive firm should be below the demand curve. The firm maximizes it's profit where MR equivalent MC And charge price on the demand curve above in the case when MR equals MC. Therefore price >MR =MC.Learn more: brainly.com/question/17429689
Five welding jobs are waiting to be processed. Their processing times and due dates are given below. Using the critical ratio dispatching rule, in which order should the jobs be processed
Job Processing Time (days) Job due date (days)
A 4 7
B 2 4
C 8 11
D 3 5
E 5 11
Answer:
Order of processing the jobs:
Job Critical Ratio
C 1.375
D 1.667
A 1.75
B 2.0
E 2.2
Explanation:
a) Data and Calculations:
Job Processing Job due Critical
Time (days) date (days) Ratio
A 4 7 1.75 (7/4)
B 2 4 2.0 (4/2)
C 8 11 1.375 (11/8)
D 3 5 1.667 (5/3)
E 5 11 2.2 (11/5)
b) The critical ratio (CR) dispatching indicates the priority sequencing that should be adopted to process work at a work center. The first process is to create the CR priority index number, which is obtained from the formula of due days divided by the processing days. Therefore, the job with the lowest CR is scheduled first.
What type of companies engage in marketing?
Answer:
American Heart Association (AHA), Walmart, Procter & Gamble.
Explanation:
Companies in the same industry often select very different distribution networks, because the choice of the distribution network can be used to achieve a variety of supply chain objectives ranging from low cost to high responsiveness.
a. True
b. False
Answer:
T
Explanation:
Given that the DM price of the ECU was 2.0583 and the DG price of the ECU was 2.3194. Then the DG price of the DM by cross rates is given by:______
a. DM = about 4.73 DG.
b. DM = about .26 DG.
c. DM = about 1.13 DG.odno
d. DM = about .89 DG.
Answer:
Option c (DM = about 1.13 DG) is the right approach.
Explanation:
Given:
DM price,
= 2.0583
DG price,
= 2.3194
Now,
By cross rates, the DG price of DM will be:
= [tex]\frac{2.3194}{2.0583}[/tex]
= [tex]1.13[/tex]
Thus the above is the correct option.
If Bangladesh is open to international trade in oranges without any restrictions, it will ___________ tons of oranges. Suppose the Bangladeshi government wants to reduce imports to exactly 120 tons of oranges to help domestic producers. A tariff of _________ per ton will achieve this. A tariff set at this level would raise $_________ in revenue for the Bangladeshi government.
Question Completion:
Assume that the price per ton of oranges in the international market is $810 and equilibrium is established at the price of $900 for 120 tons.
Answer:
If Bangladesh is open to international trade in oranges without any restrictions, it will ____import____ tons of oranges. Suppose the Bangladeshi government wants to reduce imports to exactly 120 tons of oranges to help domestic producers. A tariff of ____$90____ per ton will achieve this. A tariff set at this level would raise $___10,800______ in revenue for the Bangladeshi government.
Explanation:
A tariff of $90 per ton will raise the price of a ton of oranges to $900 ($810 per ton as indicated on the question). When the price is raised to $900 in the domestic market, the quantity demanded will equalize with the quantity supplied at 120 tons.
Identify the type of production process that is most applicable for a company that makes soft drinks. A. Assembly line B. Continuous flow C. Batch shop D. Job shop E. Project
Answer:
B. Continuous flow
Explanation:
The Continuous flow production process should be applied for manufacturing the products in the continuous product without any breakage. It also saves the money, time and the cost related to the labor
It is considered to the most applicable process for the soft drinks as each and every ingredients is to be added for each line of the process
Therefore as per the given situation, the option b is correct
His decision on what price to charge and how much to produce in the long run will be A. based on optimal plant size determination based on cost minimization. B. to charge even higher prices and produce less quantity compared to short run. C. the same as his short run profit maximizing decision. D. dependent on loss minimization principle.
Answer: A. based on optimal plant size determination based on cost minimization
Explanation:
The information given isn't complete as there are some diagrams attached which I saw online.
Based on the information gotten, the decision on the price to charge and the quantity to produce in the long run will be based on optimal plant size determination based on cost minimization.
It should be noted that the quantity of goods produced in the long run, and the price that'll be charged will depends on optimal size of the plant. In the long, there can be an alteration of the plant size and therefore, the output and price will be determined by the optimal plant size.
On April 1, year 1, Hyde Corp., a newly formed company, had the following stock issued and outstanding: 1) Common stock, no par, $1 stated value, 20,000 shares originally issued for $30 per share. 2) Preferred stock, $10 par value, 6,000 shares originally issued for $50 per share. Hyde's April 1, year 1 statement of stockholders' equity should report
Common stock Preferred stock APIC
a) $20,000 $60,000 $820,000
b) $20,000 $300,000 $580,000
c) $600,000 $300,000 $0
d) $600,000 $60,000 $240,000
Answer:
Common stock Preferred stock APIC
a) $20,000 $60,000 $820,000
Explanation:
Calculation to determine what Hyde's April 1, year 1 statement of stockholders' equity should report
Calculation to determine the COMMON STOCK
Common stock=20,000 shares*$1
Common stock=$20,000
Calculation to determine PREFERRED STOCK
Preferred stock =6,000 shares*$10
Preferred stock =$60,000
Calculation to determine ADDITIONAL PAID-IN CAPITAL (APIC)
APIC=[(6000*$50)-(6000*$10)]+[(20,000*$30)+(20,000*$1)]
APIC=($300,000-$60,000)+($600,000-$20,000)
APIC=$240,000+$580,000
APIC=$820,000
Therefore Hyde's April 1, year 1 statement of stockholders' equity should report:
Common stock Preferred stock APIC
$20,000 $60,000 $820,000
The percentage of earnings paid out as dividends. A measure of a company's success in earning a return for all providers of capital. The relationship between dividends and the market price of a company's stock. The measure of a company's success in earning a return for the common stockholders. A company's bottom line stated on a per-share basis.
Answer:
Dividend payout ratio - The percentage of earnings paid out as dividends.
Return on Assets ratio - A measure of a company's success in earning a return for all providers of capital.
Dividend yield ratio - The relationship between dividends and the market price of a company's stock.
Return on common stockholder's equity ratio - The measure of a company's success in earning a return for the common stockholders.
Earnings per share - A company's bottom line stated on a per-share basis.
Explanation:
The analysis of financial statements is made by every company from time to time in order to make effective decisions for the future of the company. This evaluation involves plenty of terminologies and ratios that allow the owners to consider different aspects of the company's growth and where it lags behind. For example, The 'Dividend payout ratio' helps the companies to have a check on the amount of money returned by them to their respective shareholders. While 'return on assets ratio' assists them in knowing if the company is able to make adequate profits in comparison to its assets. Similarly, the other terms also help know about the actual status of the company.
True or false: a firm with a capital structure containing 70% retained earnings has a marginal cost of capital of $50,000. This indicates that after the first $50,000 of capital raised, retained earnings can no longer provide the 70% equity position of the firms capital structure.
Answer:
False
Explanation:
Marginal cost of capital is the total cost of debt and equity which is used to fund business operations. This denotes any additional capital raised to fund the business. If the capital structure has retained earnings of 70% and marginal cost of capital is $50,000. This means the additional cost to raise the fund will be $50,000.
A stationery company makes two types of notebooks: a deluxe notebook with subject di- viders, which sells for $4.00, and a regular notebook, which sells for $3.00. The production cost is $3.20 for each deluxe notebook and $2.60 for each regular notebook. The com- pany has the facilities to manufacture between 2000 and 3000 deluxe and between 3000 and 6000 regular notebooks, but not more than 7000 altogether. How many notebooks of each type should be manufactured to maximize the differ- ence between the selling prices and the production costs
Answer:
A Stationery Company
To maximize contribution (the difference between the selling prices and the production costs), the company should produce 3,000 deluxe and 4,000 regular notebooks.
Explanation:
a) Data and Calculations:
Deluxe Regular
Selling price per unit $4.00 $3.00
Production cost per unit 3.20 2.60
Contribution per unit $0.80 $0.40
Production capacity = 7,000 notebooks
Range of production 2,000 - 3,000 3,000 - 6,000
Notebooks to produce 3,000 4,000
Maximum contribution $2,400 $1,600 = $4,000