Answer:
sunk cost
Explanation:
Sunk cost is cost that has already been incurred and it cannot be recovered. When making future decisions, sunk cost should not be considered.
The money i paid for the ticket is the sunk cost. I should not consider this cost when making the decision of whether to for the concert or not to
Saddle Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company's operations.
Standard Custom
Direct labor costs $50,000 $100,000
Machine hours 1,000 1,000
Setup hours 100 400
Total estimated overhead costs are $240,000. Overhead cost allocated to the machining activity cost pool is $140,000, and $100,000 is allocated to the machine setup activity cost pool.
Answer:
The answer is "160, 70, and 200"
Explanation:
Formula:
[tex]\text{Overhead rate predetermination}=\frac{\text{overhead costs} \times 100}{\text{direct cost of labor}}[/tex]
[tex]=\frac{240000 \times 100}{150000}\\\\=\frac{24 \times 100}{15}\\\\=\frac{2400}{15}\\\\= 160[/tex]
calculating the overhead rate under the ABC:
[tex]Machining = \frac{140000}{2000} = \frac{140}{2}=70 \ / machine\ hour \\\\\text{set up} =\frac{100000}{500} = \frac{1000}{5}= 200 \ / set \ up[/tex]
The following information is available for two different types of businesses for the 2016 accounting year. Hopkins CPAs is a service business that provides accounting services to small businesses. Sports Clothing is a merchandising business that sells sports clothing to college students.
Data for Hopkins CPAs
1. Borrowed $90,000 from the bank to start the business.
2. Provided $50,000 of services to clients and collected $50,000 cash.
3. Paid salary expense of $32,000.
Data for Sports Clothing
1. Borrowed $90,000 from the bank to start the business.
2. Purchased $50,000 inventory for cash.
3. Inventory costing $26,000 was sold for $50,000 cash.
4. Paid $8,000 cash for operating expenses.
Prepare an income statement, balance sheet, and statement of cash flows for each of the companies.
Answer:
Hopkins CPAs and Sports Clothing
Hopkins CPAs:
Income Statement
Service Revenue $50,000
Salaries expense 32,000
Net Income $18,000
Balance Sheet
Cash $108,000
Total assets $108,000
Bank Loan $90,000
Net Income 18,000
Total liabilities +
equity $108,000
Statement of Cash Flow
Cash from operations:
Net income $18,000
Change in working
capital $90,000
Net operating cash $108,000
Reconciliation with cash:
Cash balance $108,000
Sports Clothing:
Income Statement
Sales Revenue $50,000
Cost of goods sold 26,000
Operating expense 8,000 34,000
Net income $16,000
Balance Sheet
Cash $82,000
Inventory 24,000
Total assets $106,000
Bank Loan $90,000
Net Income 16,000
Total liabilities +
equity $106,000
Statement of Cash Flow
Cash from operations:
Net income $16,000
Change in working
capital:
Bank $90,000
Inventory (24,000)
Net operating cash $82,000
Reconciliation with cash:
Cash balance $82,000
Explanation:
a) Data and Calculations:
Hopkins CPAs
Cash account:
Bank loan $90,000
Service revenue 50,000
Salaries expense (32,000)
Balance = $108,000
Trial balance
Cash $108,000
Bank Loan $90,000
Service Revenue 50,000
Salaries expense 32,000
Totals $140,000 $140,000
Sports Clothing:
Cash account:
Bank loan $90,000
Inventory (50,000)
Sales revenue 50,000
Operating expense (8,000)
Balance = $82,000
Trial balance
Cash $82,000
Bank Loan $90,000
Inventory 24,000
Cost of goods sold 26,000
Sales Revenue 50,000
Operating expense 8,000
Totals $140,000 $140,000
Jasper Carts manufactures custom carts for a variety of uses. The following data have been recorded for Job 651, which was recently completed. Direct materials used cost $7700. There were 178 direct labor hours worked on this job at a direct labor wage rate of $22 per hour. There were 90 machine hours used on this job. The predetermined overhead rate is $32 per machine hour used.
Required:
What is the total manufacturing cost of Job 651?
Answer:
The right answer is "$14,496".
Explanation:
The given values are:
Direct material cost,
= $7700
Labor hours,
= 178
Wage rate,
= $22 per hour
Machine hours,
= 90
Predetermined overhead rate per machine,
= $32
Now,
The direct labors cost will be:
= [tex]Labor \ hours\times wage \ rate[/tex]
= [tex]178\times 22[/tex]
= [tex]3,916[/tex] ($)
Mfg. overhead costs will be:
= [tex]Machine \ hours\times Predetermined \ overhead \ rate[/tex]
= [tex]90\times 32[/tex]
= [tex]2,880[/tex] ($)
So,
The total manufacturing cost will be:
= [tex]7700+3916+2880[/tex]
= [tex]14,496[/tex] ($)
g Studies have found that firms with large investments in tangible assets tend to have: Group of answer choices the highest financial distress costs of any firm per dollar of debt. higher target debt-equity ratios than firms that primarily invest in intangible assets. the same capital structure as firms that specialize in intangible asset investments.
Answer: Higher target debt-equity ratios than firms that primarily invest in intangible assets.
Explanation:
Tangible assets can be expensive and when a company has large investments in them that usually means that they spent a considerable amount to acquire them. This is why they turn to debt because it will allow them to afford these tangible assets.
This is why companies in the airplane and electricity distributing companies have a lot of debt, they had to invest in the large amount of tangible assets needed to make planes or distribute electricity.
Slapshot Company makes ice hockey sticks and sold 1,890 sticks during the month of June at a total cost of $378,000. Each stick sold at a price of $360. Slapshot also incurred two types of selling costs: commissions equal to 10% of the sales price and other selling expense of $64,700. Administrative expense totaled $53,800.
Required:
Prepare an income statement for Slapshot for the month of June
Answer:
Slapshot Company
Income statement for the month of June
Sales ( 1,890 x $360) $680,400
Less Costs of Sales ($378,000)
Gross Profit $302,400
Selling Costs :
Commissions $68,040
Other Selling Expense $64,700
Administrative Expense $53,800 ($186,540)
Net Income $115,860
Explanation:
The Income statement shows the Profit earned during the reporting period. This is determined as Gross Profit (Sales - Cost of Sales) minus the Operating Expenses.
On January 1, 2015, VITO Corporation had 110,000 shares of its $5 par value common stock outstanding. On June 1, the corporation acquired 10,000 shares of stock to be held in the treasury. On December 1, when the market price of the stock was $10, the corporation declared a 20% stock dividend to be issued to stockholders of record on December 20, 2015. What was the impact of the 20% stock dividend on the balance of the retained earnings account
Answer:
the impact is $200,000 decrease
Explanation:
The computation of the impact is as follows
= (Total shares - treasury stock) × market price of the stock × dividend percentage
= (110,000 shares - 10,000 shares) × $10 × 20%
= $200,000 decrease
hence, the impact is $200,000 decrease
The laser printer in your home office needs to be replaced. You have been using it to print the normal number of pages that result from notes from your classes and assigned homework, receipts from online orders, and some letters you have written. What type of printer would make an adequate replacement if your major concern is keeping the initial cost low
Answer:
ink-jet printer.
Explanation:
The ink-jet printer is the printer that is cheaper also smaller at the same time it also used for printing the text documents and highly quality colored images so for printing the receipts from the online orders and for some letters the above printer should be used as the cost of the printer is low
So the same should be selected
Which of the following courts renders decisions binding only on the parties involved in the dispute?
Answer:
The answer would be C:
the U.S. District Court
Explanation:
Only appellate courts make precedent. Each of the choices is an appellate court except the U.S. District Court.
Hope this helps!! ;)
Which of the following individuals is a product manager?
Answer:
The answer is ... Alyssa is in charge of her company's line of waterproof rain boots.
Hope this helps!! ;)
The Marchetti Soup Company entered into the following transactions during the month of June:
(a) purchased inventory on account for $245,000 (assume Marchetti uses a perpetual inventory system);
(b) paid $60,000 in salaries to employees for work performed during the month;
(c) sold merchandise that cost $160,000 to credit customers for $300,000;
(d) collected $280,000 in cash from credit customers; and
(e) paid suppliers of inventory $225,000.
Prepare journal entries for each of the above transactions.
Answer:
The Marchetti Soup Company
Journal Entries:
a) Debit Inventory $245,000
Credit Accounts Payable $245,000
To record the purchase of inventory on account.
b) Debit Salaries Expense $60,000
Credit Cash $60,000
To record the payment of salaries for the month.
c) Debit Accounts Receivable $300,000
Credit Sales Revenue $300,000
To record the sale of inventory on account
Debit Cost of Goods Sold $160,000
Credit Inventory $160,000
To record the cost of goods sold.
d) Debit Cash $280,000
Credit Accounts Receivable $280,000
To record the receipt of cash from customers.
e) Debit Accounts Payable $225,000
Credit Cash $225,000
To record the payment to suppliers on account.
Explanation:
Journal entries enable the identification of accounts involved in each transaction. They are used to make the initial record into the accounting books before they are posted to the general ledger. They show the accounts to be debited and the ones to be credited.
Oslund Company manufactures only one product and uses a standard cost system. During the past month, the following variances were observed: Direct labor rate variance $30,000 favorable Direct labor efficiency variance 50,000 unfavorable Variable overhead efficiency variance 20,000 unfavorable Standard direct labor hours (DLH) per unit 5 Oslund applies variable overhead using a standard rate of $20 per standard DLH allowed. During the month, Oslund used 20% more DLHs than the total standard hours for the units manufactured. What were the total actual direct labor hours worked by Oslund Company during the past month
Answer:
6,000 Hours
Explanation:
Variable overhead efficiency variance = 20,000 U
(SH - AH) * SVR = - 20,000
Actual hours = Standard hours + 20% = 1.20*SH
(SH - (1.20SH) * 20 = - 20,000
-0.20 SH = -20,000/20
-0.20 SH = -1,000
SH = 5,000 Hours
Actual hours = 1.20 * 5,000 Hours
Actual hours = 6,000 Hours
On December 31, 2020, Wildhorse Company had $1,211,000 of short-term debt in the form of notes payable due February 2, 2021. On January 21, 2021, the company issued 23,700 shares of its common stock for $46 per share, receiving $1,090,200 proceeds after brokerage fees and other costs of issuance. On February 2, 2021, the proceeds from the stock sale, supplemented by an additional $120,800 cash, are used to liquidate the $1,211,000 debt. The December 31, 2020, balance sheet is issued on February 23, 2021. Show how the $1,211,000 of short-term debt should be presented on the December 31, 2020, balance sheet.
Answer and Explanation:
The presentation is as follows;
Particulars Amount ($)
Current Liabilities
Notes payable $120,800
Long term debt
Notes payable refinanced in February 2021 $1,090,200
Domingo Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 1,100 units. The costs and percentage completion of these units in beginning inventory were:
Cost Percent Complete
Materials costs $ 6,200 50%
Conversion costs $ 2,400 20%
A total of 7,500 units were started and 6,800 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:
Cost
Materials costs $ 159,400
Conversion costs $ 121,100
The ending inventory was 85% complete with respect to materials and 75% complete with respect to conversion costs.
The cost per equivalent unit for materials for the month in the first processing department is closest to:______.
a. $18.82
b. $18.57
c. $18.05
d. $19.88
Answer:
Domingo Corporation
The cost per equivalent unit for materials for the month in the first processing department is closest to:______.
d. $19.88
Explanation:
a) Data and Calculations:
Beginning inventory = 1,100
Cost Percent Complete
Materials costs $ 6,200 50%
Conversion costs $ 2,400 20%
Units Materials Conversion
Work in process, beginning 1,100 50% 20%
Started into production 7,500
Completed and transferred out 6,800 100% 100%
Work in process, ending 1,800 85% 75%
Cost of production:
Materials Conversion
Work in process, beginning $6,200 $2,400
Cost added during June $159,400 $121,100
Total cost of production $165,600 $123,500
Equivalent units of production:
Units Materials Conversion
Completed and transferred out 6,800 6,800 (100%) 6,800 (100%)
Work in process, ending 1,800 1,530 (85%) 1,350 (75%)
Total equivalent units 8,330 8,150
Cost per equivalent unit:
Materials Conversion
Total cost of production $165,600 $123,500
Total equivalent units 8,330 8,150
Cost per equivalent unit $19.88 $15.15
1. Firm L, which operates an internet clothing business, is located in State L. This year, the firm shipped $18 million of merchandise to customers living in State R. State R imposes a six percent sale and use tax on the purchase and consumption of retail goods within the state. a) Do State R residents who purchased Firm L merchandise owe use tax on their purchases? b) If State R could legally require Firm L to collect a 6 percent tax on internet sales made to residents of the State, how much additional revenue would the state collect?
Answer:
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what is a down payment of 20 percent on a purchase price of $215,000
Answer:
$43,000
Explanation:
Eric wants to invest in government securities that promise to pay $1,000 at maturity. The opportunity cost (interest rate) of holding the security is 13.80%. Assuming that both investments have equal risk and Ericâs investment time horizon is flexible, which of the following investment options will exhibit the lower price?
a. An investment that matures in four years
b. An investment that matures in five years
Answer:
The second option which 5 years to maturity exhibited a lower price of
$523.95
Explanation:
In order to ascertain the option with lower, it is important we determine the price of each investment based on the fact the price of an investment opportunity today is the present value of its future cash flow is the maturity value of $1000 in both cases:
a.
PV=FV/(1+r)^n
PV=price of investment
FV=future value=$1000
r= 13.80%.
n=4 years
PV=$1000/(1+13.80%)^4
PV=$596.25
b.
PV=FV/(1+r)^n
PV=price of investment
FV=future value=$1000
r= 13.80%.
n=5 years
PV=$1000/(1+13.80%)^5
PV= $523.95
On January 1, a company issues bonds dated January 1 with a par value of $460,000. The bonds mature in 5 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $441,361. The journal entry to record the first interest payment using the effective interest method of amortization is:
Answer:
January 1, 202x, bonds issued at a discount
Dr Cash 441,361
Dr Discount on bonds payable 18,639
Cr Bonds payable 460,000
amortization of bond discount = ($441,361 x 4%) - ($460,000 x 3.5%) = $17,654.44 - $16,100 = $1,554.44
June 20, 202x, first coupon payment
Dr Interest expense 17,654.44
Cr Cash 16,100
Cr Discount on bonds payable 1,554.44
At a sales volume of 34,500 units, Choice Corporation's sales commissions (a cost that is variable with respect to sales volume) total $455,400. To the nearest whole dollar, what should be the total sales commissions at a sales volume of 33,400 units? (Assume that this sales volume is within the relevant range.) (Round intermediate calculations to 2 decimal places.)
Answer:
$440,880
Explanation:
Sales commission per unit = $455,400/34,500 units
Sales commission per unit = $13.2
Total sales commission at sales volume of 33,400 units:
= $13.2 * 33,400 units
= $440,880
Question 2. (6)
Briefly explain why Investors, Competitors and Suppliers take interest in
accounting information related to a business. (Please include examples)
Answer:
They like googIe
Explanation:
Global Tek is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 16 percent a year for the next four years and then the growth slows down to a rate of 3.5 percent per year indefinitely. The company just paid its annual dividend in the amount of $0.20 per share. What is the current value of one share of this stock if the required rate of return is 15.5%?
Answer:
The value of the stock is $2.558
Explanation:
We need to calculate the present value of future cash flows to calculate the Stock value
First Calculate each year's Dividend
Use the following formula to calculate the expected dividend
Expected Dividend = Current Dividend x ( 1 + Growth rate )^n
Year ______ Working _________ Dividend
1 ______ $0.20 x ( 1 + 16% )^1 ____ $0.232
2______ $0.20 x ( 1 + 16% )^2 ____ $0.269
3______ $0.20 x ( 1 + 16% )^3 ____ $0.312
4______ $0.20 x ( 1 + 16% )^4 ____ $0.362
5______$0.362 x ( 1 + 3.5% ) _____$0.375
Now calculate the present value of each year's dividend using following formula
PV = Dividend / ( 1 + required rate of return )^numbers of years
Year _____ Working ______________________ PRESENT VALUES
1 ______ $0.232 / ( 1 + 15.5% )^1 _____________ $0.201
2______ $0.269 / ( 1 + 15.5% )^2 _____________$0.202
3______ $0.312 / ( 1 + 15.5% )^3 _____________ $0.203
4______ $0.362 / ( 1 + 15.5% )^4 _____________$0.203
5______$0.375 / (15.5% - 3.5% ) ) / ( 1 + 15.5% ) __$1.749
Now calculate the sum of present value of all the dividends
Value of stock = $0.201 + $0.202 + $0.203 + $0.203 + $1.755
Value of stock = $2.558
Tirri Corporation has provided the following information: Cost per UnitCost per PeriodDirect materials$ 7.05 Direct labor$ 4.20 Variable manufacturing overhead$ 1.55 Fixed manufacturing overhead $ 23,500Sales commissions$ 1.15 Variable administrative expense$ 0.40 Fixed selling and administrative expense $ 7,900 If the selling price is $27.20 per unit, the contribution margin per unit sold is closest to:
Answer:
Contribution margin per unit= $12.85
Explanation:
Giving the following information:
Direct materials$ 7.05
Direct labor$ 4.20
Variable manufacturing overhead$ 1.55
Sales commissions $ 1.15
Variable administrative expense$ 0.40
To calculate the contribution margin, we need to use the following formula:
Contribution margin per unit= selling price - total unitary variable cost
Contribution margin per unit= 27.2 - (7.05 + 4.2 + 1.55 + 1.15 + 0.4)
Contribution margin per unit= $12.85
Assume that Wilkins issued 13,000 shares of common stock with a $5 par value and a $46 fair value for all of the outstanding shares of Granger. What will be the consolidated Additional Paid-In Capital and Retained Earnings (January 1, 2021 balances) as a result of this acquisition transaction
Answer: $593000; $250000
Explanation:
The consolidated Additional Paid-In Capital and Retained Earnings (January 1, 2021 balances) as a result of this acquisition transaction will be calculated thus:
Additional paid in capital will be:
= $60000 + ([46-5] × $13000)
= $60000 + (41 × $13000)
= $60000 + $533000
=$593000
Retained earnings will the value of the parent's retained earnings only which will be $250000
Consider the following financial statement information for the Sourstone Corporation:
Item Beginning Ending
Inventory $9,682 $10,480
Accounts receivable $4,951 $ 5,481
Accounts payable $5,252 $ 5,593
Net sales $138,603
Cost of goods sold 86,413
Assume all sales are on credit. Calculate the operating and cash cycles. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
A) Operating Cycle is ____ days
B) Cash Cycle is ____ days
Answer:
A. 56.32 days
B. 40.38 days
Explanation:
The Operating cycle is the Inventory period + AR period
Inventory period= 365/(Cost of goods sold/Average inventory)
Average inventory= (Beginning Inventory + Ending Inventory)/2
Accounts Receivable period= 365/(Credit Sales/Average Accounts Receivable )
Average Accounts Receivable= (Beginning Accounts Receivable + Ending Inventory Accounts Receivable)/2
Calculated Inventory period= 42.58 days
Calculated Accounts Receivable period= 13.74 days
The Cash cycle is also called the Net Operating cycle which is the Inventory period + Accounts Receivable period- Accounts Payable period
Accounts Payable period= 365/(Cost of goods sold/Average Accounts Payable)
Average Accounts Payable = (Beginning Accounts Payables + Ending Inventory Accounts Payable)/2
Calculated Accounts Payable period= 15.94 days
Tiger Trade has the following cash transactions for the period.
Accounts Amounts
Cash received from sale of products to customers $ 35,000
Cash received from the bank for long-term loan 40,000
Cash paid to purchase factory equipment (45,000)
Cash paid to merchandise suppliers (11,000)
Cash received from the sale of an unused warehouse 12,000
Cash paid to workers (23,000)
Cash paid for advertisement (3,000)
Cash received for sale of services to customers 25,000
Cash paid for dividends to stockholders (5,000)
1. Calculate the ending balance of cash, assuming the balance of cash at the beginning of the period is $4,000.
2. Prepare a statement of cash flows. (Cash outflows should be indicated by a minus sign.)
Answer:
Cash flow from operating activities
Cash inflows
Cash received from sale of products to customer $35,000
Cash received from sale of services to customer $25,000
Cash outflows:
Cash paid to merchandise suppliers ($11,000)
Cash paid to workers ($23,000)
Cash paid for advertisement ($3,000)
Net cash flow from operating activities $23,000
Cash flow from investing activities
Cash paid to purchase factory equipment ($45,000)
Cash received from sale of warehouse $12,000
Net cash flow from investing activities ($33,000)
Cash flow from financing activities
Dividend paid ($5000)
Cash received from bank loan $40,000
Net cashflow from financing activities $35,000
Net cash increase $25,000
Cash at the beginning of the year $4,000
Cash at the end of the year $29,000
Problem 4-8 Sales and Growth [LO2] The most recent financial statements for Alexander Co. are shown here: Income Statement Balance Sheet Sales $ 42,950 Current assets $ 17,580 Long-term debt $ 37,070 Costs 35,550 Fixed assets 68,350 Equity 48,860 Taxable income $ 7,400 Total $ 85,930 Total $ 85,930 Taxes (21%) 1,554 Net income $ 5,846 Assets and costs are proportional to sales. The company maintains a constant 35 percent dividend payout ratio and a constant debt-equity ratio. What is the maximum dollar increase in sales that can be sustained assuming no new equity is issued
Answer:
$3,621.96
Explanation:
ROE = Net income/Equity * 100
ROE = 5846/48860*100
ROE = 11.9648%
Dividend payout ratio = 35%
Retention Ratio = 1 - 35% = 65%
Sustainable growth rate = (ROE*b)/(1-ROE*b)
Sustainable growth rate = (11.9648%*0.65)/(1- (11.9648%*0.65%))
Sustainable growth rate = 8.43%
Therefore, Maximum Dollar Increase in sales = Sales * Sustainable growth rate = 42,950 * 8.43% = $3,621.96
Hickory Company manufactures two products—14,000 units of Product Y and 6,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z:
Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity
Machining Machine-hours $ 200,000 10,000 MHs
Machine setups Number of setups $ 100,000 200 setups
Production design Number of products $84,000 2 products
General factory Direct labor-hours $ 300,000 12,000 DLHs
Activity Measure Product Y Product Z
Machine-hours 7,000 3,000
Number of setups 50 150
Number of products 1 1
Direct labor-hours 8,000 4,000
1. What is the activity rate for the Product Design activity cost pool?
2. What is the activity rate for the General Factory activity cost pool?
3. Which of the four activities is a batch-level activity?
4. Which of the four activities is a product-level activity?
5.Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y? (Do not round intermediate calculations.)
6. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Z? (Do not round intermediate calculations.)
7. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product Y and Product Z? (Round your "Percentage" answer to 1 decimal place. (i.e. .1234 should be entered as 12.3))
8. Using the ABC system, what percentage of the Machining costs is assigned to Product Y and Product Z?
9. Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Product Z?
10. Using the ABC system, what percentage of the Product Design cost is assigned to Product Y and Product Z?
11. Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z? (Round your "Percentage" answer to 1 decimal place. (i.e. .1234 should be entered as 12.3))
Answer:
1. $42,000 per product
2. $25,000 per DLH
3. Machine setups
4. Production design
5. $407,000
6. $277,000
7. $456,000
8. $228,000
9. Product Y = 25 % and Product Z = 75 %
10.Product Y = 50 % and Product Z = 50 %
11. Product Y = 66.7 % and Product Z = 33.3 %
Explanation:
Activity Rate = Estimated Overhead Cost ÷ Expected Activity
therefore,
Machining activity = $ 200,000 ÷ 10,000 = $20 per MH
Machine activity = $ 100,000 ÷ 200 = $500 per set up
Product Design activity = $84,000 ÷ 2 = $42,000 per product
General Factory activity = $300,000 ÷ 12,000 = $25,000 per DLH
Overhead Calculation using ABC system
Product Y
Machining activity ($20 x 7,000) = $140,000
Machine activity ($500 x 50) = $25,000
Product Design activity ($42,000 x 1) = $42,000
General Factory activity ($25 x 8,000) = $200,000
Total Overhead = $407,000
Product Z
Machining activity ($20 x 3,000) = $60,000
Machine activity ($500 x 150) = $75,000
Product Design activity ($42,000 x 1) = $42,000
General Factory activity ($25 x 4,000) = $100,000
Total Overhead = $277,000
Overhead Calculation using Plant Wide Overhead Rate
Plantwide overhead rate = Total Overhead Cost ÷ Total Direct Labor hours
where,
Total Overhead Cost = $200,000 + $100,000 + $84,000 + $ 300,000
= $684,000
Total Direct Labor hours = 8,000 + 4,000 = 12,000
therefore,
Plantwide overhead rate = $684,000 ÷ 12,000 = $57 per DLH
therefore,
Product Y = $57 x 8,000 = $456,000
Product Z = $57 x 4,000 = $228,000
Select the proper term for each definition.
a. A promise to pay issued by a borrower with annual interest payments and a principal payment at maturity.
b. A share of ownership in a company
c. Funds that are kept in a bank that must be relinquished upon the owner's request
d. An agreement between a lender and a borrower
1. Stock
2. Bank Deposit
3. Loan
4. Bond
Answer:
a. loan
b. stock
c. bank deposit
d. bond
Explanation:
A stock is when a person buys ownership rights in a company. The holder of the share is known as a shareholder and receives dividends
A bond is when an entity borrows money. The lender is known as a bondholder. The bondholder is entitled to periodic interest payments. At maturity, the bond holder receives principal
A bank deposit is when an account holder at a bank deposits money in a bank. The account could be a savings or a current account
During December, Krause Chemical Company had the following selected data concerning the manufacture of Xyzine, an industrial cleaner:
Production Flow Physical Units
Completed and transferred to the next department 100
Add: Ending work in process inventory 10(40% complete as to conversion)
Total units to account for 110
Less: Beginning work in process Inventory 20(60% complete as to conversion)
Units started during 90
All materials are added at the beginning of processing in this department, and conversion costs are added uniformly during the process. The beginning work in process inventory had $120 of raw materials and $180 of conversion costs incurred. Materials added during December were $540, and conversion costs of $1,484 were incurred. Krause uses the first-in, first-out (FIFO) process cost method. The equivalent units of production used to compute conversion costs for December were:
a. 110 units.
b. 104 units.
c. 100 units.
d. 92 units.
Answer:
d. 92 units.
Explanation:
The computation of the equivalent units of production used to compute conversion costs is shown below:
= 20 units × 40% + (100 units - 20 units) × 100% + 10 units × 40%
= 8 units + 80 units + 4 units
= 92 units
Hence, the equivalent units of production used to compute conversion costs is 92 units
As reported in the chapter, quarterly revenue (in billions of dollars) for Nike is estimated as
R= 3.820 + 0.139t + 0.168 Upper D1 + 0.482 Upper D2 + 0.594 Upper D3, where t is a time trend, Upper D1 is a dummy variable indicating the year's first quarter, Upper D2 is a dummy variable indicating the second quarter, and Upper D3 is a dummy variable indicating the third quarter.
What does this estimation tell us about first quarter revenues for Nike compared to the revenue in the fourth quarter? All else equal, in the first quarter, did Nikes revenues decrease? remain unchanged? or increase? relative to revenues in the fourth quarter.
Answer:
Nike's revenues in the first quarter increased by 16.8% relative to the fourth quarter.
Explanation:
When assigning dummy variables, a number of dummies (the total number of variables less one) are always included.
In this case, Nike revenues are related to the dummies for each of the quarters in the year less 1. Base on this, the coefficient of 16.8 for the first quarter dummy indicates that the first quarter revenues for Nike increased by 16.8%, more than as compared to the fourth quarter revenues.
So, this quarterly dummies projects the coefficients which indicate the increase or decrease which was relative to the fourth quarter revenues. Base on this, the Nike's revenues in the first quarter increased by 16.8% relative to the fourth quarter.
A common error made when solving a future value of an annuity problem is: Multiple Choice Using factor tables to help solve the problem. Dividing the annual deposit by the number of years before calculating the problem. Using a financial calculator to help solve the problem. Multiplying the number of years and the interest rate before calculating the problem. Multiplying the annual deposit and the number of years before calculating the problem.
Answer:
Multiplying the annual deposit and the number of years before calculating the problem.
Explanation:
An annuity can be defined as a sequence of payment that is typically made at equal intervals i.e at specific period of time.
Basically, annuity can be calculated using the compound interest formula. It is given by the mathematical expression;
[tex] A = P(1 + \frac{r}{n})^{nt}[/tex]
Where;
A is the future value.
P is the principal or starting amount.
r is annual interest rate.
n is the number of times the interest is compounded in a year.
t is the number of years for the compound interest.
Additionally, the time period between each payment is called payment period.
The term of an annuity refers to the time from the beginning of the first payment made by an individual to the end of the last payment period.
A common error made when solving a future value of an annuity problem is multiplying the annual deposit and the number of years before calculating the problem.