Answer:
Cash balance = $225,150
Explanation:
Cash balance can be calculated by calculating the difference of cash inflows and cash outflows
Cash inflow
Investment $41,000
Borrowed $25,000
Cash collection(w) $327,800
Total Collection $393,800
Less:
Cash outflow
Merchandise(w) $131,300
Salaries paid $27,100
Interest paid $2,250
Insurance paid $8,000
Total cash paid $168,650
Cash Balance = Total Collection - Total Cash paid
Cash balance = $393,800 - $168,650
Cash balance = $225,150
Working
Cash collection = The partnership has not collected on $45,200 of its sales
Cash collection = Sales - 45,200
Cash collection = $373,000 - $45,200
Cash collection = $327,800
Merchandise = Tri Fecta still owes $38,700 on $170,000 of merchandise it purchased
Merchandise = $170,000 - $38,700
Merchandise = $131,300
During the Great Recession, the U.S. budget deficit worsened as tax collections fell and payments to the poor rose. In other words, the deficit worsened as a result of _________ in the federal budget.
Sandy purchases a perpetuity-immediate that makes annual payments. The first payment is 100, and each payment thereafter increases by 10. Danny purchases a perpetuity-due which makes annual payments of 180. Using the same annual effective interest rate, i > 0, the present value of both perpetuities are equal. Calculate i.
Answer:
The value of i = 10.2%
Explanation:
The complete working including all the steps have been done and attached as an image herewith. I will attempt to elaborate on those steps below:
Put down Sandy's and Danny's purchases first and equate them. Write down the expression for [tex]d[/tex] and substitute. You will obtain a quadratic equation that you can simply solve by applying the formula.
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P 9–3: Dürnstein Schnapps
Durnstein Schnapps produces three types of schnapps from locally grown Austrian pears, plums, and cherries. Schnapps is a
clear, colorless beverage distilled from fermented fruit that normally contains about 40 percent alcohol. The pear and plum
schnapps are produced using an identical process whereby the pears, and plums are fermented and then distilled. The cherry
schnapps employs a similar production process but requires more direct labor to produce the unique and highly prized Durnstein
Cherry Schnapps. Each variety of schnapps (pears, plums, and cherries) is produced in batches of 500 liters and then bottled.
Durnstein Schnapps uses an absorption costing system to assign overhead to its three products for inventory costing. A
single, predetermined, plantwide overhead rate is computed using a flexible manufacturing overhead budget. Variable
manufacturing overhead is budgeted to be €16.00 per direct labor hour and fixed manufacturing overhead is budgeted to be €
845,000 for the year. The following table summarizes budgeted and operating data for the last fiscal year.
Pear Plum Cherry
Actual batches
520 370 210
Budgeted number of batches 500 400 200
Actual direct hours per batch 17 15 34
Budgeted direct labor hours per
18 18 35
batch
Durnstein Schnaps incurred actual manufacturing overhead last year of € 1,250,500.
Required:
a. Calculate Durnstein Schnapp's plantwide overhead rate for last year.
b. One batch of plum schnapps used 20 direct labor hours. How much manufacturing overhead was absorbed by this one
batch?
c. How much over/underabsorbed overhead did Dürnstein Schnapps have last year?
Page 429
d. Recommend discuss how Durnstein Schnapps is likely to account for the over/underabsorbed overhead you
calculated in part(c).
Answer:
Dürnstein Schnapps
a. Durnstein Schnapp's Plantwide Overhead Rate for last year:
= Budgeted overhead/total budgeted direct labour hours
= € 1,216,200/23,200
= €52.42
b. Manufacturing overhead absorbed by one batch of plum schnapps using 20 direct labor hours
= Overhead rate * direct labor hours
= €52.42 * 20
= €1,048.40
c. Determination of over/underabsored overhead last year:
= Total budgeted manufacturing overhead minus actual manufacturing overhead
= € 1,216,200 - € 1,250,500
= € 34,500 under absorbed
d. Durnstein Schnapps will adjust the cost of goods sold and the ending inventory in order to account for the underabsored overhead in part (c).
The purpose is to reflect eh true absorption cost of products and ending inventory.
Explanation:
Data and Calculations:
Variable manufacturing overhead (budgeted) = €16.00 per direct labor
Fixed manufacturing overhead (budgeted) = € 845,000 for the year
Budgeted and operating data for the last fiscal year:
Pear Plum Cherry
Actual batches 520 370 210
Budgeted number of batches 500 400 200
Actual direct hours per batch 17 15 34
Budgeted direct labor hours per 18 18 35
batch
Total budgeted direct labor hours
(500*18) (400*18) (200*35) 9,000 7,200 7,000 23,200
Total actual direct labor hours
(520 * 17) (370 * 15) ( 210 * 34) 8,840 5,550 7,140 21,530
Durnstein Schnaps incurred actual manufacturing overhead last year of € 1,250,500.
Budgeted manufacturing last year = Budgeted direct labor hours * Variable manufacturing overhead per direct labour hour + Budgeted fixed manufacturing overhead
= 23,200 x €16.00 + € 845,00
= €371,200 + €845,00
= € 1,216,200
b) Absorption costing is a method that Durnstein Schnapps can use to calculate the costs of its variety of schnapps by including direct and indirect costs. It is not like marginal or variable costing method that uses only the variable elements of production costs in arriving at the costs of Durnstein schnapps. The absorption costing method tries to capture all production costs and absorb them into the costs of the pear, plums, and cherries schnapps in order to determine their appropriate prices. Variable costing method does not treat overhead production costs as product costs, but as period costs.
Adrian T. Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. Sales units 5000 10000 Cost of goods sold $117000 $193000 Selling and Administrative costs $588000 $637000 Selling price per unit $170 $170 Q: The best estimate of the net operating income if 6620 units are sold is:
Answer:
net operating income = $379,900
Explanation:
we can use the high-low cost method to determine the fixed and variable manufacturing costs:
variable cost per unit = (highest activity cost - lowest activity cost) / (highest activity units - lowest activity units) = ($193,000 - $117,000) / (10,000 - 5,000) = $76,000 / 5,000 = $15.20 per unit
fixed costs = highest activity cost - (variable cost per unit x highest activity units) = $193,000 - ($15.20 x 10,000) = $193,000 - $152,000 = $41,000
cost of goods sold for 6,620 units = (6,620 x $15.20) + $41,000 = $141,624
now we do the same for the administrative expenses:
variable cost per unit = ($637,000 - $588,000) / (10,000 - 5,000) = $49,000 / 5,000 = $9.80
fixed costs = $637,000 - ($9.80 x 10,000) = $637,000 - $98,000 = $539,000
S&A expenses for 6,620 units = (6,620 x $9.80) + $539,000 = $603,876
net income = $1,125,400
- COGS = $141,624
gross profit = $983,776
- S&A expenses = $603,876
net operating income $379,900
The information below relates to the Cash account in the ledger of Novak Company.
Balance September 1—$17,160; Cash deposited—$64,240.
Balance September 30—$17,664; Checks written—$63,736.
The September bank statement shows a balance of $16,682 on September 30 and the following memoranda.
Credits Debits
Collection of $1,623 note plus interest $37 $1,660 NSF check: Richard Nance $555
Interest earned on checking account $52 Safety deposit box rent $72
At September 30, deposits in transit were $4,580, and outstanding checks totaled $2,513.
A. Prepare the bank reconciliation at September 30. (List items that increase cash balance first. Reconcile cash balance per bank first.)
B. Prepare the adjusting entries at September 30, assuming (1) the NSF check was from a customer on account, and (2) no interest had been accrued on the note.
Answer:
A) account reconciliation
Bank account reconciliation:
Bank account balance $16,682
+ deposits in transit $4,580
- outstanding checks $2,513
reconciled bank account $18,749
Cash account reconciliation:
Cash account balance $17,664
+ Note collected $1,660
+ Interest revenue $52
- NSF check (R. Nance) $555
- Bank fees (safety deposit box rent) $72
reconciled cash account $18,749
B) Adjusting entries
September 30, NSF check
Dr Accounts receivable 555
Cr Cash 555
September 30, collection of notes receivable
Dr Cash 1,660
Cr Notes receivable 1,623
Cr Interest revenue 37
Mario transferred real estate with an adjusted basis of $140,000 for similar real estate with a fair market value of $160,000. The exchange qualified as a like-kind exchange. The realized gain on the exchange was $
Answer:
$20,000
Explanation:
Calculation for th e realized gain on the exchange
Using this formula
Realized gain=Fair market value - Adjusted basis
Let plug in the formula
Realized gain=$160,000-$140,0000
Realized gain=$20,000
Therefore the realized gain on the exchange was $ 20,000
On the first day of the fiscal year, a company issues a $2,600,000, 7%, 6-year bond that pays semiannual interest of $91,000 ($2,600,000 × 7% × ½), receiving cash of $2,477,994. Journalize the first interest payment and the amortization of the related bond discount. Round to the nearest dollar. If an amount box does not require an entry, leave it blank.
Answer:
Dr interest expense( 10,167.17+91,000) $ 101,167.17
Cr cash $91,000.00
Cr discount on bonds payable $ 10,167.17
Explanation:
The discount on bond issuance is the difference between the cash proceeds received and the face value of the bonds.
discount on bonds payable=$2,600,000-$2,477,994=$122,006.00
amortization of discount=discount/number of semiannual interest payable
in 6 years,12 semiannual coupons are payable
amortization of discount=$122,006.00 /12=$10,167.17
Ultimate Corporation uses a standard cost system for the production of its water ski radios. The direct labor standard for each radio is 0.9 hours. The standard direct labor cost per hour is $7.20. During the month of August, Zanny's water ski radio production used 6,600 direct labor-hours at a total direct labor cost of $48,708. This resulted in the production of 6,900 water ski radios for August. What is Zanny's labor rate variance for August?
a. $2,808 Unfavorable
b. $1,188 Unfavorable
c. $972 Favorable
d. $2,160 Favorable
Answer:
Direct labor rate variance= $594 unfavorable
Explanation:
Giving the following information:
The standard direct labor cost per hour is $7.20.
During August, Zanny's water ski radio production used 6,600 direct labor-hours at a total direct labor cost of $48,708.
To calculate the direct labor rate variance, we need to use the following formula:
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Actual rate= 48,078/6,600= $7.29
Direct labor rate variance= (7.20 - 7.29)*6,600
Direct labor rate variance= $594 unfavorable
Simone founded her company using $200,000 of her own money, issuing herself 200,000 shares of stock. An angel investor bought an additional 100,000 shares for $150,000. She now sells another 500,000 shares of stock to a venture capitalist for $1.5 million. What is the post-money valuation of the company
Answer:
2,400,000
Explanation:
The computation of post-money valuation of the company is shown below:-
post-money valuation of the company is
= Total shares outstanding × Price per share
= (200,000 + 100,000 + 500,000) × (1,500,000 ÷ 500,000)
= 800,000 × 3
= 2,400,000
Therefore we have applied the above formula by considering all the elements given in the question
Chester has negotiated a new labor contract for the next round that will affect the cost for their product Camp. Labor costs will go from $3.79 to $4.39 per unit. Assume all period and other variable costs remain the same. If Chester were to absorb the new labor costs without passing them on in the form of higher prices, how many units of product Camp would need to be sold next round to break even on the product?
Complete Question:
Chester has been selling widgets for $10, total variable costs are $4.40 and fixed costs are $100,000.
Chester has negotiated a new labor contract for the next round that will affect the cost for their product Cid. Labor costs will go from $2.79 to $3.39 per unit. Assume all period and other variable costs remain the same.
If Chester were to absorb the new labor costs without passing them on in the form of higher prices, how many units of product Cid would need to be sold next round to break even on the product?
Answer:
Chester
Break-even point = Fixed costs/Contribution margin per unit
= $100,000 / $5
= 20,000 units
Explanation:
a) Data and Calculations:
Selling price = $10
Old variable cost = $4.40
Additional variable cost = $0.60
New variable costs = $5 ($4.40 + $0.60)
Contribution per unit = Selling price minus variable cost per unit
= $5 ($10 - $5)
Fixed costs = $100,000
b) Chester's Break-even point (in units) is the number of units of a product Camp that Chester requires to sell in order to recover her fixed costs. The information provided by break-even analysis guides Chester in making decisions for the production of Camps and its marketing. Without identifying the units of Camp to be produced and sold in order to remain in business, all things being equal, Chester might short-produce or short-sell Camps and run the business unprofitably.
Spartan Corporation discovered these errors in August of Year 3: Reported Net Income for Year 1 was $20,000. Reported Net Income for Year 2 was $18,000. The correct Year 2 Net Income is:
Answer:
Net income year 2 = $21,300
Explanation:
I looked for the missing information and found this:
Year Depreciation overstated Prepaid expense omitted
1 $2,500 $2,000
2 $4,000 $2,700
If your question doesn't include the same values, just adjust the answer.
Year 2's net income = net income (year 2) + overstated depreciation (year 2) + omitted prepaid expenses (year 1) - omitted prepaid expenses (year 2) = $18,000 + $4,000 + $2,000 - $2,700 = $21,300
Piedmont Hotels is an all-equity company. Its stock has a beta of .82. The market risk premium is 6.9 percent and the risk-free rate is 4.5 percent. The company is considering a project that it considers riskier than its current operations so it wants to apply an adjustment of 1.7 percent to the project's discount rate. What should the firm set as the required rate of return for the project?
Answer:
11.86%
Explanation:
Piedmont hotels can be described as an all-equity company
Its stock has a beta of 0.82
The market risk premium is 6.9%
The risk free rate is 4.5%
The adjustment is 1.7%
Therefore, the required rate of return can be calculated as follows
Required rate of return= Risk free rate of return + ( beta×market risk premium) + adjustment
= 4.5% + (0.82×6.9%) + 1.7%
= 4.5% + 5.658 + 1.7%
= 11.86%
Hence the required rate of return for the project is 11.86%
Which one of the following categories provides a common approach and frame of reference for conducting project management activities within an organization?
a. Business alignment
b. Resource integration
c. Technical support
d. Practice management
Answer:
The correct answer is the option A: Business alignment.
Explanation:
To begin with, the concept known as "Business Alignment" refers to the process by which the managers of a company tend to use the information technology in order to obtain certain business objectives inside the organization that are the goals that they looked for. In addition, this process sometimes tend to focus more on the financial improvement of the company as well as its marketplace competitiveness. Therefore that this type of term gives a good approach and frame of reference for the managers who are looking for conduct project management activities inside the company.
The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers that it uses in its budgeting and performance reports - the number of courses and the total number of students. For example, the school might run two courses in a month and have a total of 64 students enrolled in those two courses. Data concerning the company's cost formulas appear below:
Fixed Cost per Month Cost per Course Cost per Student
Instructor wages $2,910
Classroom supplies $310
Utilities $1,250 $55
Campus rent $4,900
Insurance $2,100
Administrative expenses$3,600 $42 $3
For example, administrative expenses should be $3,600 per month plus $42 per course plus $3 per student. The company's sales should average $870 per student.
The actual operating results for September appear below:
Actual
Revenue $52,780
Instructor wages $10,920
Classroom supplies $19,690
Utilities $1,880
Campus rent $4,900
Insurance $2,240
Administrative expenses $3,386
Required:
1. The Gourmand Cooking School expects to run four courses with a total of 64 students in September. Complete the company's planning budget for this level of activity.
2. The school actually ran four courses with a total of 56 students in September. Complete the company?s flexible budget for this level of activity.
3. Complete the flexible budget performance report that shows both revenue and spending variances and activity variances for September. (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.)
Answer:
The Gourmand Cooking School
1. Planning Budget for 4 courses and 64 students:
Fixed Cost Cost Cost Total
per month per Course per Student
Instructor wages $2,910 x 4 $11,640
Classroom supplies $310 x 64 19,840
Utilities $1,250 $55 x 4 1,470
Campus rent $4,900 4,900
Insurance $2,100 2,100
Administrative
expenses $3,600 $42 x 4 $3 x 64 3,960
Total expenses $43,910
Sales Revenue $870 x 64 $55,680
Operating profit $11,770
2. Flexible Budget for 4 courses and 56 students:
Fixed Cost Cost Cost Total
per month per Course per Student
Instructor wages $2,910 x 4 $11,640
Classroom supplies $310 x 56 17,360
Utilities $1,250 $55 x 4 1,470
Campus rent $4,900 4,900
Insurance $2,100 2,100
Administrative
expenses $3,600 $42 x 4 $3 x 56 3,936
Total expenses $41,406
Sales Revenue $870 x 56 $48,720
Operating profit $7,314
3. Flexible Budget Performance Report for September:
Actual Flexible Budget Variance
Cost Revenue Cost Revenue
Revenue $52,780 $48,720 $4,060 F
Instructor
wages $10,920 $11,640 720 F
Classroom
supplies 19,690 17,360 2,330 U
Utilities 1,880 1,880 0 None
Campus rent 4,900 4,900 0 None
Insurance 2,240 2,240 0 None
Administrative
expenses 3,386 3,386 0 None
Total
expenses $43,016 43,016 $41,406 41,406 1,610 U
Operating income $9,764 $7,314 2,450 F
Explanation:
a) Data:
1. Cost Formulas:
Fixed Cost Cost Cost Total
per month per Course per Student
Instructor wages $2,910
Classroom supplies $310
Utilities $1,250 $55
Campus rent $4,900
Insurance $2,100
Administrative
expenses $3,600 $42 $3
Sales Revenue $870
2. Actual operating results for September:
Revenue $52,780
Instructor wages $10,920
Classroom supplies 19,690
Utilities 1,880
Campus rent 4,900
Insurance 2,240
Administrative expenses 3,386
Total expenses $43,016 43,016
Operating income $9,764
3. Budget planning is an important aspect of managing The Gourmand Cooking School. It helps to make some educated forecasts about its future activities, performance, and position. With it, actual performances and positions can be compared and across different units of the organization. Budget planning and its performance reporting aid management in controlling the organization towards achieving its goals. It also creates motivation, propelling the organization toward a better future.
On June 15, 2021, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $220 million. The expected completion date is April 1, 2023, just in time for the 2023 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions):
2021 2022 2023
Costs incurred during the year $40 $80 $50
Estimated costs to complete as of December 31 120 60
Required:
1. Compute the revenue and gross profit will Sanderson report in its 2021, 2022, and 2023 income statements related to this contract assuming Sanderson recognizes revenue over time according to percentage of completion. 2. Compute the revenue and gross profit will Sanderson report in its 2021, 2022, and 2023 income statements related to this contract assuming this project does not qualify for revenue recognition over time
3. Suppose the estimated costs to complete at the end of 2022 are $80 million instead of $60 million. Compute the amount of revenue and gross profit or loss to be recognized in 2022 assuming Sanderson recognizes revenue over time according to percentage of completion.
Answer:
1.
2021 Gross profit/loss $15
2022 Gross profit/loss $12
2023 Gross profit/loss $23
2.
2021 Revenue recognized $0
2022 Revenue recognized $0
2023 Revenue recognized $220
2021 Gross profit/loss $0
2022 Gross profit/loss $0
2023 Gross profit/loss $50
3.Gross profit /loss ($3)
Explanation:
1. Computation of thr Gross Profit recognize over time assuming percentage of completion method
Using PERCENTAGE OF COMPLETION
Using this formula
Choose numerator ÷ Choose denominator = % complete to date
Actual costs to date÷ Estimated total costs= %
2021 $40 ÷ $160=25.00%
(40+120)
2022 $120(40+80) ÷$180(40+80+60) = 66.67%
2023 170 170 =100.00%
(40+80+50)
2021
To date - Recognized in prior years = Recognized in 2018
Construction revenue $55(220*25%) $0 $55
Less: Construction expense $40 $0 $40
Gross profit (loss) $15 $0 $15
2022
To date - Recognized in prior years = Recognized in 2019
Construction revenue $147(220*66.66%) $55 $92
Less: Construction expense $120(40+80) $40 $80
Gross profit (loss) $27 $15 $12
2023
To date - Recognized in prior years = Recognized in 2020
Construction revenue $220 $147 $73
Less: Construction expense $170(40+80+50) $120 $50
Gross profit (loss) $50 $27 $23
2. Calculation for the Statement showing revenue and gross profit assuming this project does not qualify for revenue recognition over time. ( $ in Million)
Year Revenue recognized Gross Profit (Loss) recognized
2021 $0 $0
2022 $0 $0
2023 $220 $50(220-170)
3 Computation of the Revenue and gross profit or loss to be recognized in 2022 (using the percentage of completion )
Percentages of completion
Choose numerator ÷ Choose denominator = % complete to date
Actual costs to date ÷Estimated total costs=%
2022 $120(40+80) ÷ $200(40+80+80) = 60.00%
2022
To date Recognized in prior years Recognized in 2019
Construction revenue $132(220*60) $55 $77
Less:Construction expense $120(40+80) $40 $80
Gross profit (loss) $12 $15 ($3)
When units produced are greater than units sold under variable costing, fixed overhead is an expense and results in___________(lower, higher) net income than under absorption costing.
Answer: lower
Explanation:
Variable costing is a method used in accounting whereby the manufacturing overhead will be incurred at the particular period when the product is produced.
In the absorption costing method, the indirect expenses which are the overheads and the direct costs are taken into consideration.
The variable costing helps to solve the issue regarding absorption costing which allows for an increase in income as there is am increase in production.
One implication of the bird-in-the-hand theory of dividends is that a given reduction in dividend yield must be offset by a more than proportionate increase in growth in order to keep a firm's required return constant, other things held constant.
a. True
b. False
Answer:
False ANSWER: True o One implication of the bird-in-the-hand theory of dividends is that a given reduction in dividend yield must be ...
Explanation:
follow mw
Jewel Service anticipates the following sales revenue over a five-month period: The company's sales are 40% cash and 60% credit. Its collection history indicates that credit sales are collected as follows: How much cash will be collected in January? In February? In March? For the quarter in total? Complete the cash budget to determine how much cash will be collected in January, February, March and for the quarter in total. (Round your answers to the nearest whole dollar.)
Answer:
I looked up the missing information, hopefully it's the same as your question. If not you can adjust the answer.
Its collection history indicates that credit sales are collected as follows:
25% in the month of the sale 50% in the month after the sale 15% two months after the sale 10% are never collectedsales revenue:
November $16,100 December $10,400 January $15,600 February $12,400 March $14,400Jewel Services
Cash Collections budget
For the months of January, February, and March
cash collected from sales January February March Quarter
from November sales $2,415 $2,415
from December sales $5,200 $1,560 $6,760
from January sales $3,900 $7,800 $2,340 $14,040
from February sales $3,100 $6,200 $9,300
from March sales $3,600 $3,600
Total $11,515 $12,460 $12,140 $36,115
Excellent Printers has contracts to complete weekly supplements required by forty-six customers. For the year 2018, manufacturing overhead cost estimates total $840,000 for an annual production capacity of 12 million pages.
For 2018 Excellent Printers has decided to evaluate the use of additional cost pools. After analyzing manufacturing overhead costs, it was determined that number of design changes, setups, and inspections are the primary manufacturing overhead cost drivers. The following information was gathered during the analysis:
Cost pool Manufacturing overhead costs Activity level
Design changes $ 120,000 300 design changes
Setups 640,000 5,000 setups
Inspections 80,000 8,000 inspections
Total manufacturing overhead costs $840,000
During 2018, two customers, Money Managers and Hospital Systems, are expected to use the following printing services:
Activity Money Managers Hospital Systems
Pages 60,000 76,000
Design changes 10 0
Setups 20 10
Inspections 30 38
When costs are assigned using the single cost driver, number of pages printed, then:__________.
A. Money Managers will likely seek to do business with competitors
B. Money Managers is grossly under billed for the job, while other jobs will be unfairly over billed
C. Excellent Printers will want to retain this highly profitable customer
D. Money Managers is unfairly over billed for its use of printing resources
Answer:
B. Money Managers is grossly under billed for the job, while other jobs will be unfairly over billed
Explanation:
The single overhead rate would be $ 0.07 per page
Overhead Rate = $ 840,000/ 12 million pages = 0.07 per page.
The other rates are
design changes rate = $ 120,000/300= $ 400 per design
Inspections rate = $ 80,000/8000= $ 10 per inspection
Setups rate = $ 640,000/5000= $ 128 per setup
Money managers will be under billed for the job as the overhead rates for other costs are higher than the single overhead rate which is $ 0.07 per page.
And if other overhead rates are used other jobs will be over billed.
Using a single overhead rate for 60,000 pages for Money Managers would mean 60,000 * $ 0.07 = $ 4200
Where as if the same job is billed using other overhead rates it would cost
Money Managers $ 6860 = $ 4000 + $ 2560 + $ 300
Design = $400 * 10 = $ 4000
Setups = $ 128 * 20 = $ 2560
Inspections $ 10 * 30 = $ 300
So it is under billed and other jobs over billed.
You are an stock analyst hired to follow Jones Kenesyian Consulting (whose ticker is JK), the firm recently paid a dividend of $2 per share, and you expect JK to grow at 10% for the next 3 years afterwhich you make an assumption that it will grow at a constant rate of 5%. You required rate of return is 12%. What do you believe the intrisic value of the stock is today
Answer:
Price of stock today = $45.58
Explanation:
The price of a share can be calculated using the dividend valuation model
According to this model the value of share is equal to the sum of the present values of its future cash dividends discounted at the required rate of return.
If dividend is expected to grow at a given rate , the value of a share is calculated using the formula below:
Price=Do (1+g)/(k-g)
Do - dividend in the following year, K- requited rate of return , g- growth rate
Step 1 : PV of dividend from year 1 to 3
PV = D × (1+r)^-n
D- dividend payable in a particular year
r- required rate of return
n- year
Year PV of Dividend
1 2 × 1.1^1 × 1.12^(-1) = 1.96
2 2 × 1.1^2× 1.12^(-2) = 1.93
3 2 × 1.1^3 × 1.12^9-3)= 1.89
Step 2 : PV of dividend from year 4 to infinity
PV (in year 3 terms) of dividend= 2 × 1.1^3× 1.05/(0.12-0.05) = 55.90
PV in year 0 terms = 55.90 × 1.12^(-3) = 39.789
Total present Value = 1.96 +1.93 +1.89 + 39.789= 45.58
Price of stock today = $45.58
Nissan’s all-electric car, the Leaf, has a base price of $32,780 in the United States, but it is eligible for a $7500 federal tax credit. A consulting engineering company wants to evaluate the purchase or lease of one of the vehicles for use by its employees traveling to job sites in the local area. The cost for leasing the vehicle will be $4200 per year (payable at the end of each year) after an initialization charge of $2500 paid now. If the company purchases the vehicle, it will also purchase a home charging station for $2200 that will be partially offset by a 50% tax credit. If the company expects to be able to sell the car and charging station for 40% of the base price of the car alone at the end of 3 years, should the company purchase or lease the car? Use an interest rate of 10% per year and annual worth analysis.
Answer:
Nissan's all-electric car, the Leaf
PV cost of Leaf Purchase = $16,529
PV cost of Leasing = $12,944.78
The company should lease the car.
Explanation:
a) Costs incurred to purchase the Leaf:
Base price $32,780
less Federal tax credit ($7,500)
Charging station 2,200
less 50% tax credit (1,100)
Cash paid $26,380
Sales value after 3 yrs (9,851) ( $26,380 - 40% of base discounted to PV)
Net PV Investment $16,529
b) Calculation of Discounted Present Values of Payments under Leasing, using online financial calculator:
PV (Present Value) $12,944.78
N (Number of Periods) 3.000
I/Y (Interest Rate) 10.000%
PMT (Periodic Payment) $4,200.00
Starting Investment $2,500.00
Total Principal $15,100.00
Total Interest $2,129.50
c) The purchase of the Leaf would involve a present value cost of $26,380 after deducting all the savings from tax. The 40% sales value of the car at the end of 3 years = $13,112 ($32,780 x 40%). When this sales value is discounted to PV of $9,851, the PV of the car investments becomes $16,529 ($26,380 - $9,851). On the other hand, leasing will cost in PV the sum of $12,944.78
.
Assume a competitive firm faces a market price of $70, a cost curve of
C = 0.003q3 + 50q + 750
and a marginal cost of:
Mc= 0.009q2 + 50.
The firm's profit maximizing output level is______units and the per unit profit at this output level is $______.
This firm will_____in the short run The firm will realize______. In the long-run, if circumstances do not change, this firm will_____.
Answer and Explanation:
The computation of Output level is shown below:-
The equilibrium condition of competitive firms will be
P = MC
70 = 0.009q^2 + 50
0.009q^2 = 70 - 50
0.009q^2 = 20
q^2 = 20 ÷ 0.009
q^2 = 2,222.222222
So,
q = 47.14045208
or
= 47.14
The computation of profit per unit is shown below:-
Total profit = Total sales - Total cost
= ($70 × 47.14) - (0.003q^3 + 50q + 750)
= $3299.8 - {0.003 (47.14)^3 + 50 × 47.14 + 500}
= -$121.460639032
or
= -$121.46
Profit per unit = Total profit ÷ Output
= -$121.46 ÷ 47.14
= -$2.58
The computation of Produce or shutdown is shown below:-
Total variable cost (TVC) = 0.003q^3 + 50q
= 0.003 (47.14)^3 + 50 × 47.14
= 2671.260639
or
= 2,671.26
AVC = Total cost ÷ Output
= 2,671.26 ÷ 47.14
= 56.66652524
or
= 56.67
Here, $70 which is the market price is higher than AVC that is 56.67, so the company will produce
The firm will realize an economic loss in the long run. If the situation will not modify, this firm will shut down.
In the short term, the company can deliver as its marginal income exceeds the marginal cost. Yet in the long run, the company would suffer an economic loss because the average income per unit is smaller than the average expense per unit. But it would suffer a loss in the long run, but then would prefer to shut down.
Sales, Production, Direct Materials Purchases, and Direct Labor Cost Budgets The budget director of Gourmet Grill...
Sales, Production, Direct Materials Purchases, and Direct Labor Cost Budgets
The budget director of Gourmet Grill Company requests estimates of sales, production, and other operating data from the various administrative units every month. Selected information concerning sales and production for July is summarized as follows:
a. Estimated sales for July by sales territory:
Maine:
Backyard Chef 310 units at $700 per unit
Master Chef 150 units at $1,200 per unit
Vermont:
Backyard Chef 240 units at $750 per unit
Master Chef 110 units at $1,300 per unit
New Hampshire:
Backyard Chef 360 units at $750 per unit
Master Chef 180 units at $1,400 per unit
b. Estimated inventories at July 1:
Direct materials:
Grates 290 units
Stainless steel 1,500 lbs.
Burner subassemblies 170 units
Shelves 340 units
Finished products:
Backyard Chef 30 units
Master Chef 32 units
c. Desired inventories at July 31:
Direct materials:
Grates 340 units
Stainless steel 1,800 lbs.
Burner subassemblies155 units
Shelves 315 units
Finished products:
Backyard Chef 40 units
Master Chef 22 units
d. Direct materials used in production:
In the manufacture of Backyard Chef:
Grates 3 units per unit of product
Stainless steel 24 lbs. per unit of product
Burner subassemblies 2 units per unit of product
Shelves 4 units per unit of product
In the manufacture of Master Chef:
Grates 6 units per unit of product
Stainless steel 42 lbs. per unit of product
Burner subassemblies 4 units per unit of product
Shelves 5 units per unit of product
e. The anticipated purchase price for direct materials:
Grates $15 per unit
Stainless steel $6 per lb.
Burner subassemblies $110 per unit
Shelves $10 per unit
f. Direct labor requirements:
Backyard Chef:
Stamping Department 0.50 hr. at $17 per hr.
Forming Department 0.60 hr. at $15 per hr.
Assembly Department 1.00 hr. at $14 per hr.
Master Chef:
Stamping Department 0.60 hr. at $17 per hr.
Forming Department 0.80 hr. at $15 per hr.
Assembly Department 1.50 hrs. at $14 per hr.
Required:
1. Prepare a sales budget for July.
Gourmet Grill Company
Sales Budget
For the Month Ending July 31
Product and Area Unit Sales
Volume Unit Selling
Price Total Sales
Backyard Chef:
Maine $ $
Vermont
New Hampshire
Total $
Master Chef:
Maine $ $
Vermont
New Hampshire
Total $
Total revenue from sales $
2. Prepare a production budget for July. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Gourmet Grill Company
Production Budget
For the Month Ending July 31
Units
Backyard Chef Master Chef
3. Prepare a direct materials purchases budget for July. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Gourmet Grill Company
Direct Materials Purchases Budget
For the Month Ending July 31
Grates
(units) Stainless Steel
(lbs.) Burner Sub-
assemblies
(units) Shelves
(units) Total
Required units for production:
Backyard Chef
Master Chef
Desired inventory, July 31
Total
Estimated inventory, July 1
Total units to be purchased
Unit price $ $ $ $
Total direct materials to be purchased $ $ $ $ $
4. Prepare a direct labor cost budget for July.
Gourmet Grill Company
Direct Labor Cost Budget
For the Month Ending July 31
Stamping
Department Forming Department Assembly Department Total
Hours required for production:
Backyard Chef
Master Chef
Total
Hourly rate $ $ $
Total direct labor cost $ $
Answer:
Gourmet Grill Company
1. Sales Budget for July:
Gourmet Grill Company
Sales Budget
For the Month Ending July 31
Product and Area Unit Sales
Volume Unit Selling Price Total Sales
Backyard Chef:
Maine 310 $700 $217,000
Vermont 240 $750 180,000
New Hampshire 360 $750 270,000
Total 910 $ 667,000
Master Chef:
Maine 150 $1,200 $ 180,000
Vermont 110 $1,300 143,000
New Hampshire 180 $1,400 252,000
Total 440 $575,000
2. Production Budget for July:
Gourmet Grill Company
Production Budget for the Month Ending July 31
Units
Backyard Chef Master Chef
Units sold 910 440
Ending inventory 40 22
less beginning inventory -30 -32
Units to be produced 920 430
3. Direct Materials Purchase Budget for July:
Gourmet Grill Company
Direct Materials Purchases Budget
For the Month Ending July 31
Grates (units) 5,390 units
Stainless Steel (lbs.) 40,440 lbs
Burner Sub- assemblies (units) 3,545 units
Shelves (units) 5,805 units
Total Required units for production:
Backyard Chef Master Chef Total for prodn.
Grates 2,760 units 2,580 units 5,340 units
Stainless steel 22,080 lbs 18,060 lbs 40,140 units
Burner subassemblies 1,840 units 1,720 units 3,560 units
Shelves 3,680 units 2,150 units 5,890 units
Total used July 31 Total July 1 Purchases
for prodn. Desired Estimated
Grates 5,340 340 5,680 290 5,390
Stainless steel 40,140 1,800 41,940 1,500 40,440
Burner subassemblies 3,560 155 3,7`15 170 3,545
Shelves 5,830 315 6,145 340 5,805
Grates Stainless Burner Shelves
Steel sub-assembly
Total units to be purchased 5,390 40,440 3,545 5,805
Unit price $15 $6 $110 $ 10
Total direct materials
to be purchased $80,850 $242,640 $389,950 $58,050
Total cost of direct materials to be purchased = $771,490
4. Direct labor cost budget:
Stamping Forming Assembly Total
Hours used:
Backyard Chef 460 552 920 1,932
Master Chef 258 344 645 1,247
Total hours used 718 896 1,565 3,179
Hourly rate $17 $15 $14
Total cost $12,206 $13,440 $21,910 $47,556
Explanation:
1) Data for July:
a) Sales by territory
Maine Vermont New Hampshire
Backyard Chef (units) 310 240 360 910
Master Chef (units) 150 110 180 440
Backyard Chef (prices) $700 $750 $750
Master Chef (prices) $1,200 $1,300 $1,400
Sales Value:
Backyard Chef $217,000 $180,000 $270,000
Master Chef 180,000 143,000 252,000
Total sales $397,000 $323,000 $522,000
b. Estimated Inventories at July 1:
Direct materials: Beginning Purchases Desired Ending Used
Grates 290 units 5,390 340 units 5,340
Stainless steel 1,500 lbs. 40,440 1,800 lbs 40,140
Burner subassemblies 170 units 3,545 155 units 3,560
Shelves 340 units 5,805 315 units 5,830
c. Cost of Materials: Units unit costs Total costs
Grates 5,390 $15 $80,850
Stainless steel 40,440 $6 $242,640
Burner subassemblies 3,545 $110 $389,950
Shelves 5,805 $10 $58,050
Total $771,490
d. Labor Cost
Labor cost per hour Hours Required
Backyard Master
Stamping Department $17 0.50 hr 0.60 hr
Forming Department $15 0.60 hr 0.80 hr
Assembly Department $14 1.00 hr 1.50 hrs
Units produced 920 430
Stamping Department total hours 460 hrs 258 hrs
Forming Department 552 hrs 344 hrs
Assembly Department 920 hrs 645 hrs
Direct labor Cost :
Stamping department $7,820 $4,386 $12,206
Forming department $8,280 $5,160 13,440
Assembly department $12,880 $9,030 21,910
Total $28,980 $18,576 $47,556
or
Stamping department cost $8.50 $10.20
Forming department cost 9.00 12.00
Assembly department cost 14.00 21.00
Direct labor cost per unit $31.50 $43.20
Units produced 920 430
Total direct labor cost $28,980 $18,576 $47,556
e. Materials Usage
Backyard Chef Master Chef Total
Units produced 920 430 1,350
Materials used:
Grates 2,760 units 2,580 units 5,340 units
Stainless steel 22,080 lbs 18,060 lbs 40,140 lbs
Burner subassemblies 1,840 units 1,720 units 3,560 units
Shelves 3,680 units 2,150 units 5,830 units
f) Finished products: Beginning Production Desired Ending Units Sold
Backyard Chef 30 units 920 units 40 units 910 units
Master Chef 32 units 430 units 22 units 440 units
a food worker is frying donuts in the deep fyer what is the food worker requied to wear to keep food safe
Answer:
Gloves and a hair net
Explanation:
g Delta of a call option is 0.85. How many units of the underlying stock should you hold to hedge a short position in 100 call option contracts
Answer: a.85,000
Explanation:
When using Delta to determine how many units of the underlying stock one should hold to hedge a short position, the following formula is used;
= Delta * No. of positions
= 0.85 * ( 100 * 100)
= 8,500
8,500 units of the underlying stock should be held to hedge a short position in 100 call option contracts with a contract multiplier of 100.
Assume the MPC is 0.8. Assuming only the multiplier effect matters, a decrease in government purchases of $100 billion will shift the aggregate demand curve to the:__________
a. left by $180 billion.
b. left by $500 billion.
c. right by $180 billion.
d. right by $400 billion.
Answer:
b. left by $500 billion.
Explanation:
Given marginal propensity to consume, MPC = 0.8
Marginal propensity to consume + Marginal propensity to save = 1
MPC + MPS = 1
0.8 + MPS = 1
MPS = 1-0.8
MPS = 0.2
Now, the government multiplier = 1/MPS
The government multiplier = 1 / 0.2 = 5
Total fall in aggregate demand = Government multiplier × Government purchases
= 5 ×100
= $500
Since there is a fall in spending so the aggregate demand curve will shift leftwards.
Therefore, the correct option is b. left by $500 billion.
1. Certain balance sheet accounts in a foreign subsidiary of Shaw Company on December 31, 20X1, have been restated in U.S. dollars as follows: Restated at Current Rates Historical Rates Accounts Receivable, Current $ 100,000 $ 110,000 Accounts Receivable, Long-Term 50,000 55,000 Prepaid Insurance 25,000 30,000 Patents 40,000 45,000 Total $ 215,000 $ 240,000 What total should be included in Shaw's balance sheet for December 31, 20X1, for these items?
Answer:
The total that should be included in Shaw's balance sheet for December 31, 20X1 is $215,000
Explanation:
The amount that should be included in Shaw's balance sheet for December 20X1 would be
Particulars Stated at Current Rates
Accounts Receivable, Current $100,000
Accounts Receivable, Long-Term $50,000
Prepaid Insurance $25,000
Patents $40,000
Total $215,000
"What will be the results if two monopolistic competitors both launch successful advertising campaigns targeting its competitors consumers in order to draw them away from the other firm
Answer: a. These two competitor firms will negate each other's efforts.
Explanation:
The advertising campaigns that both monopolistic competitors was said to be successful which means that they were both able to draw their competitor's customers away from the other firm.
The net effect of this would be that both of them negated each other's efforts because when Firm A gained some of Firm B's customers it also lost some of its customers to Firm B which is evidently also what happened to Firm B.
Purchases Budget in Units and Dollars Budgeted sales of The Music Shop for the first six months of 2014 are as follows: Month Unit Sales Month Unit Sales January 130,000 April 215,000 February 160,000 May 180,000 March 200,000 June 240,000 Beginning inventory for 2014 is 30,000 units. The budgeted inventory at the end of a month is 40 percent of units to be sold the following month. Purchase price per unit is $5. Prepare a purchases budget in units and dollars for each month, January through May.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Sales:
January 130,000
February 160,000
March 200,000
April 215,000
May 180,000
June 240,000
Beginning inventory for 2014 is 30,000 units.
The budgeted inventory at the end of a month is 40 percent of units to be sold the following month.
The purchase price per unit is $5.
To calculate the production required for each month, we need to use the following formula:
Production= sales + desired ending inventory - beginning inventory
January:
Sales= 160,000
Desired ending inventory= (160,000*0.4)= 64,000
Beginning inventory= (30,000)
Total= 164,000
Total cost= 164,000*5= $820,000
February:
Sales= 130,000
Desired ending inventory= (200,000*0.4)= 80,000
Beginning inventory= (64,000)
Total= 146,000
Total cost= 146,000*5= $730,000
March:
Sales= 200,000
Desired ending inventory= (215,000*0.4)= 86,000
Beginning inventory= (80,000)
Total= 206,000
Total cost= 206,000*5= $1,030,000
April:
Sales= 215,000
Desired ending inventory= (180,000*0.4)= 72,000
Beginning inventory= (86,000)
Total= 201,000
Total cost= 201,000*5= $1,005,000
May:
Sales= 180,000
Desired ending inventory= (240,000*0.4)= 96,000
Beginning inventory= (72,000)
Total= 204,000
Total cost= 204,000*5= $1,020,000
A stock has an expected return of 11.85 percent, its beta is 1.24, and the expected return on the market is 10.2 percent. What must the risk-free rate be? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer:
The risk free rate is 3.325%
Explanation:
The required rate of return or cost of equity of a stock can be calculated using the CAPM. The CAPM estimates the required rate of return of a stock based on three factors- risk free rate, stock's beta and the market risk premium. The equation of required rate of return under CAPM is,
r = rRF + Beta * (rM - rRF)
Where,
rRF is the risk free raterM is the return on market(rM - rRF) gives us the risk premium of marketWe already have the values for r, Beta and rM. Plugging in these values in the formula, we calculate the rRF to be,
Let rRF be x.
0.1185 = x + 1.24 * (0.102 - x)
0.1185 = x + 0.12648 - 1.24x
1.24x - x = 0.12648 - 0.1185
0.24x = 0.00798
x = 0.00798/0.24
x = 0.03325 or 3.325%