Answer:
The answer is below
Explanation:
The law of one price may hold, when there is eliminatination of price differences through arbitrage opportunities between markets.
For example, considering the value of two currencies e.g Dollar and Pound is equal when a basket of identical goods is priced the same in both countries. This ensures that buyers have the same purchasing power across global markets.
Zeke Company sells a single product. The selling price per unit is $32 and unit variable cost is $24. Fixed costs for the year are $100,200. What if selling price goes up by 0.15%, variable costs go up by 0.15% and fixed costs go up by 0.16%? What is the new breakeven point in units?
Answer:
Break-even point in units= 12,562 units
Explanation:
Giving the following information:
Selling price= 32*1.0015= 32.048
Unitary variable cost= 24*1.0015= 24.036
Fixed costs= 100,200*1.0016= 100,360.32
To calculate the break-even point in units, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 100,360.32/(32.048 - 24.036)
Break-even point in units= 12,562 units
Sunland Company purchases $50,400 of raw materials on account, and it incurs $61,300 of factory labor costs. Journalize the two transactions on March 31, assuming the labor costs are not paid until April.
No. Date Account Titles and Explanation Debit Credit
a) Mar. 31
b) 31
Answer:
A. Mar 31
Dr Raw materials $50,400
Cr Account pay $50,400
B. 31
Dr Factory labour $61,300
Cr Factory wages $61,300
Explanation:
Preparation of the Journal entries for Sunland Company
A. Since we were told that the company purchases the amount of $50,400 of raw materials on account this means that the transaction will be recorded as:
Mar 31
Dr Raw materials $50,400
Cr Account pay $50,400
B. Based on the information given we were told that the company incurs the amount of $61,300 of factory labor costs this means that the transaction will be recorded as:
31
Dr Factory labour $61,300
Cr Factory wages $61,300
The Walthers Company has a semi-annual coupon bond outstanding. An increase in the market rate of interest will have which one of the following effects on this bond?
a. increase the coupon rate.
b. decrease the coupon rate.
c. increase the market price.
d. decrease the market price.
e. increase the time period.
Answer:
The answer is D.
Explanation:
An increase in the market rate of interest of a bond will decrease the market price of the bond. Market rate of interest of a bond is inversely related to the market price of the bond.
For example, A bonds is issued with a higher interest rate, the price of existing bonds will fall because the demand for this bond falls.
Finder Technologies Inc. has manufacturing units in Canada. The country's stable economic and political environment helps the firm gain competitive advantage by lowering production costs and improving product quality. Other things being equal, the benefits realized from such a strategy can be typically referred to as
Answer:
Location Economies
Explanation:
Location economies is a phenomenon which helps the organization gain advantage due to its location which means it enjoys favorable PESTLE factors of a country. Favorable PESTLE factors include political, economical, social, technological, legal and environmental factors.
In the question, it is clear that the Canadian economic policies and stable political environment has led the industries to grow due to business easing policies of the country. Hence Finder Technologies Inc. has enjoyed Location Economies phenomenon.
Moonbeam company manufactures toasters. For the first 8 monthsof 2017 the company reported the following operating results whileoperating at 75% of plant capacity
sales (350,000 units) 4375000
cogs 2600000
gross profit 1775000
operating expense 840000
net income 935000
cost of goods sold was 70% variable and 30% fixed. operatingexpenses were 80% variable and 20% fixed.moonbeam receives aspecial order for 15000 toasters at 7.60 each from Luna Company.Acceptance of the order would result in an additional 3000 ofshipping cost but no increase in fiaxed assets
a) prepare an incremental analysis for the special order
b) Should Moonbeam accept the special order. Why or why not.
Answer and Explanation:
a. The preparation of the incremental analysis for the special order is presented below:
Sales revenue (15,000 × $7.60) $114,000
Less:
Cost of goods sold -$78,000
($260,000 × 75% ÷ 350,000 × 15,000)
Gross profit $36,000
Less: Operating expenses -$28,800
($840,000 × 80% ÷ 350,000 × 15,000)
Less:
Shipping cost -$3,000
Net income arise from special order $4,200
2. Yes the order should be accepted as it has the net income of $4,200 also the fixed cost would remain the same
Bustillo Incorporated is working on its cash budget for March. The budgeted beginning cash balance is $35,000. Budgeted cash receipts total $142,000 and budgeted cash disbursements total $151,000. The desired ending cash balance is $30,000. To attain its desired ending cash balance for March, the company needs to borrow:
Answer:
$4,000
Explanation:
Bustillo Incorporated
Cash Budget
For the month of March, 202x
Beginning cash balance $35,000
Total cash collections $142,000
Total cash disbursements ($151,000)
Ending cash before financing $26,000
Desired minimum cash balance ($30,000)
Financing needs ($4,000)
manufactures two products: A and B. The company's accounting records revealed the following per-unit costs for direct materials and direct labor: Product A Product B Production volume (units) 4,000 5,000 Direct materials $40 $60 Direct labor: 2.5 hours at $10/hour $25 2 hours at $10/hour $20 Management is considering a shift to activity-based costing and gathered the following manufacturing overhead data: Expected Activity Activity Cost Pool Estimated OH Cost Activity cost driver Product A Product B Setups $240000 Number of setups 80 40 General factory $2350000 Direct labor hours 10,000 10,000 Machine processing $120000 Machine hours 2,000 1,000 Q: Suppose the company uses conventional job-order costing with a plantwide predetermined overhead rate and direct labor hours as the allocation base. Assuming that actual and expected direct labor hours are the same, what is the unit product cost of Product B under conventional job-order costing
Answer:
Unitary cost= $351
Explanation:
Giving the following information:
Overhead costs:
Setups= $240,000
General factory= $2,350,000
Machine processing= $120,000
Total overhead= $2,710,000
Total direct labor hours= 10,000 + 10,000= 20,000
First, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 2,710,000/20,000
Predetermined manufacturing overhead rate= $135.5 per direct labor hour
Now, we can calculate the unitary cost for Product B:
Direct materials $60
Direct labor: 2 hours at $10/hour $20
Unitary cost= 60 + 20 + 2*135.5
Unitary cost= $351
Relevant financial information for Gordon, Inc. andJordan, Inc. for the current year is provided below. ($ in millions) Net sales Net income Total assets, beginning Total assets, ending Gordon, Inc. $3,280 118 1,420 Jordan, Inc. $6,540 132 1,600 2,230 2,020 Based on these data, which of the following is a correct conclusion?
A) Return on Assets is 7.4% for Gordon and 6.5% for Jordan. Thus, Gordon is more profitable than Jordan
B) Return on Assets is 7.4% for Gordon and 6.5% for Jordan. Thus, Gordon is less profitable than Jordan
C) Return on Assets is 7.8% for Gordon and 6.2% for Jordan. Thus, Gordon is more profitable than Jordan
D) Return on Assets is 7.8% for Gordon and 6.2% for Jordan. Thus, Gordon is less profitable than Jordan
Answer:
C) Return on Assets is 7.8% for Gordon and 6.2% for Jordan. Thus, Gordon is more profitable than Jordan
Explanation:
please find attached a clear image of the table used in answering this question
Return on assets = net income / average total assets
average total assets = (beginning assets + ending asset) / 2
for gordon
average total assets = (1420 + 1600) / 2 = 1510
ROA = 118 / 1510 = 0.078146 = 7.8%
For Jordan,
average total assets = (2,230 + 2,020) / 2 = 2125
ROA = 132 / 2125 = 0.062118 = 6.2118%
The ROA figure shows how well a company converts assets into net income. The higher the ROA number, the better as it means the firm earns more money on less investment
You’ve collected the following information from your favorite financial website. 52-Week Price Stock (Div) Div Yld % PE Ratio Close Price Net Chg Hi Lo 77.40 10.43 Palm Coal .36 2.6 6 13.90 –.24 56.66 34.27 Lake Lead Grp 2.39 5.8 10 41.28 –.01 130.93 69.50 SIR 2.00 2.2 10 88.97 3.07 50.24 13.95 DR Dime .80 5.2 6 15.43 –.26 35.00 20.74 Candy Galore .32 1.5 28 ?.18 Find the quote for the Lake Lead Group. Assume that the dividend is constant.
Answer:
6.974% and 4.218%
Explanation:
The computation is shown below:
Here we use the 52-week low stock price
The Highest dividend yield is
= Dividend ÷ Stock price
= 2.39 ÷ 34.27
= 6.974%
The Lowest dividend yield is
= Dividend ÷ Stock price
= 2.39 ÷ 56.66
= 4.218%
We simply applied the above formula so that we can determine highest and lowest dividend yield
A company is considering replacing an old machine, which has a market value of $95,000 and a tax basis of $145,000. The new machine would cost $210,000 and would cause a $25,000 reduction in working capital because of the need for fewer spare parts. If the company’s tax rate is 39%, what would be the initial cash outlay for this replacement project?
Answer:
$120,500
Explanation:
Net cash outflow for the new machine = Cost of new machine + net working capital - salvage value of old machine + tax (salvage value of old machine - book value of old machine)
tax (salvage value of old machine - book value of old machine) =
0.39 x ($95,000 - $145,000) = $-19,500
$210,000 + $25,000 - $95,000 -$19,500 = $120,500
All of the following are protective functions of packaging except: Group of answer choices Cushioning the contents All are protective functions Being tamper-proof Providing uniform weight distribution Enclosing the materials
Answer:
All are protective functions
Explanation:
The packaging is the process in which the firm wrap the product so that it cannot be damage stole or lost by maintaining its product id
There are various function of packaging like tamper-proofing, uniform weight, the material disclosed, content cushioned so that the packaging should be done in a systematic manner
Therefore the second option is correct
Boomerang Computer Company sells computers with an unconditional right to return the computer if the customer is not satisfied. Boomerang has a long history selling these computers under this returns policy and can provide precise estimates of the amount of returns associated with each sale. Boomerang most likely should recognize revenue:
Answer:
When Boomerang delivers a computer to a customer.
Explanation:
Revenue is recognised by a business when it is earned. That is when the transaction is completed and a sale is established.
In the given scenario when a customer buys goods for Boomerang they have unconditional right to return the computer if the customer is not satisfied.
The situation where Boomerang should recognise revenue is when a computer is delivered to the customer and the sale is consummated.
If the company recognises revenue when an order is made, there is possibility of customer returning the computer. Then their revenue data will be inaccurate
Answer:
the boomerang delivers
Explanation:
To create a budget: Multiple Choice From the Banking Menu, select Planning & Budgets > Budgets From the Company Menu, select Planning & Budgeting > Set Up Budgets From the Company Center, select Company & Financials > Budgets From the Edit Menu, select Preferences > Set Up Budgets
Answer: From the Company Menu, select Planning & Budgeting > Set Up Budgets
Explanation:
Quickbooks is a very popular and effective accounting software that is mainly used by Small to Medium Scale Businesses to manage their Accounting affairs with its myriad of functions including on-premises and online cloud functions for ease of operations.
When setting up a new budget with Quickbooks, from the Company menu, click on Planning and Budgeting and then click on Set Up Budgets. After that you should click on Create New Budget and then continue from there.
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 6.40 pounds $ 1.70 per pound $ 10.88 Direct labor 0.40 hours $ 14.00 per hour $ 5.60 During the most recent month, the following activity was recorded: 18,500.00 pounds of material were purchased at a cost of $1.40 per pound. All of the material purchased was used to produce 2,500 units of Zoom. 800 hours of direct labor time were recorded at a total labor cost of $13,600. Required: 1. Compute the materials price and quantity variances for the month. 2. Compute the labor rate and efficiency variances for the month. (For all requirements, Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Round your intermediate calculations to the nearest whole dollar.)
Answer: Materials price variance= $5,550 ----F - Favourable
Materials quantity variance=$4,250-U- Unfavourable
Labor Rate Variance= $2,400- U=Unfavorable
Labor Efficiency Variance=$2,800 =F Favourable
Explanation:
Standard Quantity Standard Price Standard Cost
or Hours or Rate
Direct materials 6.40 pounds $ 1.70 per pound $ 10.88
D.irect labor 0.40 hours $ 14.00 per hour $ 5.60
18,500.00 pounds of material were purchased at a cost of $1.40 per pound. All of the material purchased was used to produce 2,500 units of Zoom. 800 hours of direct labor time were recorded at a total labor cost of $13,600
a Materials price variance =Actual Quantity of Material Purchased*(Actual Rate - Standard Rate)
=18,500 X ( 1.40 -1.70)= 18,500 X 0.3= $5,550 ----F - Favourable because the actual cost of material per unit is less than the standard cost of material per unit]
b Materials quantity variance=Standard Rate*(Actual Quantity of Material Used in Production - Standard Quantity of Material Used in Production)
Standard Quantity of Material Used in Production = Actual Units Produced*Standard Material Per Unit
=2500 x 6.40= 16,000pounds nof materials
Materials quantity variance=1.70 x (18,500 - 16,000) =$4,250-U- Unfavourable because the actual quantity of material used to produce 2,500 units is higher than what was expected as the standard
C)Labor Rate Variance = Actual Hours Used*(Actual Rate - Standard Rate)
Actual rate = Actual cost/ Actual time
= 13,600/800= $17
Labor Rate Variance= 800 x (17-14)= 800 x 3 = $2,400- U=Unfavorable because the actual labor hour rate is higher than the standard hour rate
D)Labor Efficiency Variance = Standard Rate*(Actual Hours Used in Production - Standard Hours Used in Production)
Standard Hours Used in Production = Actual Units Produced*Standard Hours Per Unit
2500 x 0.40=1000 hours
Labor Efficiency Variance= 14 x ( 800 -1000) 14 x 200= $2,800 =F Favourable because the actual hours used in production is less than the standard hours that could have been used to produce 2,500 units
A company budgets 10,000 units of sales based on a projected selling price of $13.00. The actual units sold were 15,000 at a price of $10. What is the flexible budget for sales?
Answer:
The flexible budget for sales = $195,000
Explanation:
A flexible budget is that which is prepared for actual level of activity achieved. It is used for control purpose to determine how where the a business is doing in terms of performance .
The flexible budgeted is usually prepared at the end of the period to which it relates. In other words, it is prepared in retrospect. And it uses the assumptions of the fixed budget.
The flexible budget for sales = actual sales in units × Standard selling price
= 15,000× $13.00 = $195,000
The flexible budget for sales = $195,000
income effects depend on the income elasticity of demand for each good that you buy. if one of the goods you buy has a negative income elasticity, that is, it is an inferior good, what must be true of the income elasticity of the other good you buy
Answer:
it would have a positive income elasticity and it is a normal good
Explanation:
Income elasticity of demand measures the responsiveness of quantity demanded to changes in income.
Normal goods are goods that are goods whose demand increases when income increases and falls when income falls
Inferior goods are goods whose demand falls when income rises and increases when income falls.
If you are spending more than you make you have a ___________:
Tracker
Statistic
Overflow
Deficit
The following data have been recorded for recently completed Job 450 on its job cost sheet. Direct materials cost was $2,108. A total of 36 direct labor-hours and 234 machine-hours were worked on the job. The direct labor wage rate is $18 per labor-hour. The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $25 per machine-hour. The total cost for the job on its job cost sheet would be:
Answer:
Total cost= $8,606
Explanation:
Giving the following information:
Job 450:
Direct materials= $2,108
A total of 36 direct labor-hours and 234 machine-hours were worked on the job.
The direct labor wage rate is $18 per labor-hour.
The predetermined overhead rate is $25 per machine-hour.
We need to calculate the total cost for Job 450:
Direct materials= 2,108
Direct labor= 36*18= 648
Overhead= 234*25= 5,850
Total cost= $8,606
An investment adviser is opening that day's mail and receives a check from a customer made out to the "Jones Cleaning Service" - the check was mailed in error to the adviser. The same day, the investment adviser mails the check back to Jones Cleaning Service. Under NASAA rules, the investment adviser:
Complete Question:
An investment adviser is opening that day's mail and receives a check from a customer made out to the "Jones Cleaning Service" - the check was mailed in error to the adviser. The same day, the investment adviser mails the check back to Jones Cleaning Service. Under NASAA rules, the investment adviser:
I. is deemed to have taken custody of the customer's funds
II. has not taken custody of the customer's funds
III. must keep a record of the check received
IV. is not required to keep a record of the check received
A. I and III
B. I and IV
C. II and III
D. II and IV
Answer:
C. II and III
Explanation:
In this scenario, an investment adviser is opening that day's mail and receives a check from a customer made out to the "Jones Cleaning Service" - the check was mailed in error to the adviser. The same day, the investment adviser mails the check back to Jones Cleaning Service. Under North American Securities Administrators Association (NASAA) rules, the investment adviser has not taken custody of the customer's funds and must keep a record of the check received.
According to NASAA rules, if an investment adviser inadvertently receives a check made out to a third party like it was made out to the "Jones Cleaning Service" in error, provided that the investment adviser mails the check to the third party (customer) within 3 business-working days, then the adviser has not taken custody of the customer's funds. Also, it is required that the investment adviser must keep a record of the check received.
Customer Z is a single 26-year-old man who earns $125,000 annually. He informs you that he is getting married and that his new wife's income of $75,000 per year will put them into the highest federal tax bracket. The couple will have investable income of $25,000 per year. The couple wishes to buy a house in 5 years that will be substantially more expensive than the condominium in which they currently reside. To meet the customer's needs for the large cash down payment in 5 years and to reduce taxable income, the BEST recommendation is to:_____________.
A. open a margin account and invest in income bonds
B. open an Individual Retirement Account and invest in tax-deferred variable annuities
C. open a cash account and invest in mutual funds holding high yielding common and preferred stocks
D. open a trust account and invest in Treasury STRIPs
Answer: C. open a cash account and invest in mutual funds holding high yielding common and preferred stocks
Explanation:
Investing in Mutual funds which hold high yielding common and preferred shares is the best option here. The dividends received will be high enough but will not be taxed too much as dividend tax is limited to 15% thereby saving the investment on taxes.
Also seeing as they will require the investment in other to buy a house in 5 years, they will need something that can be easily liquidated. Mutual funds are easy to liquidate from and so their investment here can be easily withdrawn when the time comes to allow them meet the house down payment.
The tri-star company currently use an old lathe that was purchase 2 years ago at $6000. This machine is being depreciatin on a MACRS five year (20%, 32%, 19%, 12%, 11%, 6%). The current market value for this machine is $3,000. The proposed new improved lathe cost $10,000 and additional installation fee of $1,000. The new lathe would require that inventories be increased by $800 and account receivable increase $600, but accounts payable would simultaneously increase by $700. Tri-Star's marginal federal-plus-state tax rate is 30%. What is the initial investment of company when evaluating the replacement of old lathe by the new one?
Answer:
$8,736
Explanation:
initial investment = capital expenditures (machine's purchase cost + installation costs) + any increase in working capital - disposal of old machine
capital expenditures = $10,000 + $1,000 = $11,000
after tax salvage value = market value + taxes on disposal
the current book value of the old machine = $6,000 - $1,200 - $1,920 = $2,880
taxes on salvage value = (book value - market value) x tax rate = ($2,880 - $3,000) x 30% = -$36
after tax salvage value = $3,000 - $36 = $2,964
net working capital = current liabilities - current assets
change in working capital = $800 + $600 - $700 = $700
initial investment = $11,000 + $700 - $2,964 = $8,736
It costs a bakery $3 to sell a single cake. This bakery makes $7 in revenue from each cake it sells. Assume this bakery sells 25 cakes. What is its total profits
Answer:
$100
Explanation:
The revenue is the total amount the company receives for the sale of products and the profit is the amount left after the costs are subtracted. Because of that, to calculate the profit you have to subtract the costs from the revenue generated:
Profit= Revenue-costs
Profit= (7*25)-(3*25)
Profit=175-75
Profit= 100
According to this, the total profit is $100.
. Identify each of the following as (i) part of an expansionary fiscal policy, (ii) part of a contractionary fiscal policy, or (iii) not part of fiscal policy. a. The personal income tax rate is lowered. b. Congress cuts spending on defense. c. College students are allowed to deduct tuition costs from their federal income taxes. d. The corporate income tax rate is lowered. e. The state of Nevada builds a new tollway in an attempt to expand employment and ease traffic in Las Vegas.
Answer:
Option, A , D, E = expansionary fiscal policy.
Option B = Contractionary fiscal policy
Option C = not a part of fiscal policy
Explanation:
The expansionary fiscal policy occurred when there is a decrease in taxes and an increase in government expenditure (spendings). While contractionary fiscal policy occurs when taxes are increased by the government and there is a fall or decrease in government spendings. Therefore, Option A, Option D, and Option E are part of the expansionary fiscal policy.
Option B is a contractionary fiscal policy. While option C is not a part of fiscal policy
The stock in Bowie Enterprises has a beta of .85. The expected return on the market is 11.50 percent and the risk-free rate is 2.85 percent. What is the required return on the company's stock?
Answer:
10.203%
Explanation:
The stock in Bowie's enterprises has a beta of 0.85
The expected return on the market is 11.50%
The risk free rate is 2.85%
Therefore, the required return on the company's stock can be calculated as follows
Required return= Risk free rate+beta(market rate-risk free rate)
= 2.85+0.85(11.50-2.85)
= 2.85+ 0.85(8.65)
= 2.85+7.3525
= 10.203%
Hence the required rate in the company's stock is 10.203%
ESS Corporation is organized on January 1, 20X1 and is a calendar year-end corporation. It meets all the S corporation requirements and all shareholders consent to an S corporation election. In order to be treated as an S corporation in the current year, ESS must make an election by
Answer:
ESS Corporation
S Corporation:
In order to be treated as an S corporation in the current year, ESS must make an election by March 15 (75 days from January 1, 20X1).
Explanation:
ESS Corporation becomes an S corporation when it has met the requirements to be treated as an S corporation. With an S corporation structure, the corporate income or loss, deductions and credits of ESS corporation are passed through the individual shareholders for federal tax purposes. This means that ESS Corporation does not pay federal income taxes, but the individual partners pay the taxes. This avoids double taxation of the income of the ESS Corporation at the corporate and individual levels. Instead, the tax is levied at the individual level and rates. The company structure of ESS Corporation confers many advantages to her shareholders.
CHEGG If you invest $200 in a stock, borrowing 90 percent of the $200 at 10 percent interest, and the stock price rises by 20 percent, what is the return on your investment
Answer:
Return on your investment (ROI) = 20%
Explanation:
Return on investment would be the proportion of the amount invested that is earned as profit. Note the following :
The amount earned as cash return would be determined as the capital gains less the interest on the loan.
Also, the amount invested would refer to the personal capital contribution made by the investor. This implies the total cost of the stock less the interest earned on the amount borrowed.
The principles above are illustrated as follows:
Capital gain on stock = stock price at the end - stock price at the beginning
Stock price at the end= 120% × 200 = 240
Capital gain = 240 - 200 = 40
Cost of fund = interest rate × amount borrowed
Amount borrowed = 90% × 200 = 180
Cost of fund = 20% × (90% × 200) = 36
Return on investment = Capital gains - cost of funds /(Total cost - amount borrowed)
ROI = (40 - 36)/(200 - 180)× 100 = 20%
Return on your investment (ROI) = 20%
Vaughn Company uses a periodic inventory system. For April, when the company sold 450 units, the following information is available. Units Unit Cost Total Cost April 1 inventory 330 $22 $7,260 April 15 purchase 380 26 9,880 April 23 purchase 290 29 8,410 1,000 $25,550 Required:Compute the April 30 inventory and the April cost of goods sold using the FIFO method.
Answer:
Ending inventory= $15,170
COGS= $10,380
Explanation:
Giving the following information:
Units sold= 450
April 1 inventory= 330 units for $22
April 15 purchase= 380 units for $26
April 23 purchase= 290 units for $29
First, we need to calculate the number of units in ending inventory:
Ending inventory units= 1,000 - 450= 550 units
Now, to calculate the ending inventory under the FIFO (First-in, first-out) method, we need to use the cost of the last units incorporated into inventory.
Ending inventory= 290*29 + 260*26= $15,170
COGS= 330*22 + 120*26= $10,380
A product line should NOT be discontinued if the contribution margin lost is A. less than the variable costs saved. B. less than the fixed costs saved. C. more than the fixed costs saved. D. more than the variable costs saved.
Answer:
B. less than the fixed costs saved.
Explanation:
A product line should NOT be discontinued if the contribution margin lost is "more than the fixed costs saved."
According to the economic rule, the product line should only be discontinued when the contribution margin lost is less than the fixed cost saved.
Also, this implies that the cost of production should be reduced or the production line discontinued.
However, when the contribution lost is more than the fixed cost saved, that shows profits.
Hence, in this case, it is concluded that the correct answer is option C. "more than the fixed costs saved."
Learn more here: https://brainly.com/question/17848137
For the past week, a company's common stock closed with the following prices: $61.50, $62.00, $61.25, $60.875, and $61.50. What was the price range
Answer:
$1.125
Explanation:
price range is the difference between the highest and lowest price
highest price = $62
Lowest price = $60.875
$62 - $60.875 = $1.125
Ayayai Company issued $612,000 of 10%, 20-year bonds on January 1, 2017, at 102. Interest is payable semiannually on July 1 and January 1. Ayayai Company uses the effective-interest method of amortization for bond premium or discount. Assume an effective yield of 9.7705%. Prepare the journal entries to record the following. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a)The issuance of the bonds. (b)The payment of interest and related amortization on July 1, 2017. (c)The accrual of interest and the related amortization on December 31, 2017.
Answer:
(a)The issuance of the bonds.
January 1, 2017, bonds are issued
Dr Cash 624,260
Cr Bonds payable 612,000
Cr Premium on bonds payable 12,260
(b)The payment of interest and related amortization on July 1, 2017.
July 1, 2017, first coupon payment
Dr Interest expense 30,497
Dr Premium on bonds payable 103
Cr cash 30,600
(c)The accrual of interest and the related amortization on December 31, 2017.
December 31, 2017, accrued interest
Dr Interest expense 30,492
Dr Premium on bonds payable 108
Cr Interest payable 30,600
Explanation:
We must first determine the market price of the bonds:
PV of face value = $612,000 / (1 + 4.88525%)⁴⁰ = $90,818.5814
PV of coupons = $30,600 x 17.43274 (PV annuity factor, 4.88525%, 40 periods) = $533,441.844
market price = $90,818.5814 + $533,441.844 = $624,260
amortization for first coupon payment:
= ($624,260 x 4.88525%) - ($612,000 x 5%) = $30,496.68194 - $30,600 = $103.31806
amortization for second coupon payment:
= ($624,156.6819 x 4.88525%) - ($612,000 x 5%) = $30,491.6143 - $30,600 = $108.3856955