Answer:
$9.15
Explanation:
Contribution margin is the net value of sales and variable cost of a product. We need to deduct variable cost from selling price of a product to calculate the contribution margin .
First we need to determine the total variable cost.
Labor Cost ( $9 x ( 1 - 0.1 ) ) $8.1
Material cost $12.75
Shipping cost $2.50
Total Variable cost $23.35
Price = $32.50
Contribution Margin = Selling price - Variable cost
Contribution Margin = $32.50 - $23.35 = $9.15
Seven, Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. Inputs Standard Quantity or Hours per Unit of Output Standard Price or Rate Direct materials 3.5 feet $ 8.20 per foot Direct labor 1.75 hours $ 7.00 per hour Variable manufacturing overhead 1.75 hours $ 2.60 per hour The company planned to produce 23,100 units of output during June and has reported the following actual results for the product for June: Actual output 24,000 Units Raw materials purchased/used 88,800 Feet Actual total cost of raw materials $ 706,560 Actual direct labor-hours 48,000 Hours Actual total direct labor cost $ 374,400 Actual total variable overhead cost $ 124,800 Assume all of the materials purchased was used during the month to produce the 24,000 units. The price variance for DM is:
Answer:
Material price variance $21,600 unfavorable
Explanation:
Material price variance
A material price variance occurs where materials are purchased at a price either lower or higher than the standard price. A favorable variance is recorded where the actual total cost of materials is lower that the standard cost. While an adverse variance implies the opposite
$
88, 800 feet should have cost (88, 800× $8.20) 728,160
but did cost 706,560
Material price variance 21,600 unfavorable
A company incurs $3,600,000 of overhead each year in three departments: Processing, Packaging, and Testing.
The company performs 800 processing transactions, 200,000 packaging transactions, and 2,000 tests per year in producing 400,000 drums of Oil and 600,000 drums of Sludge.
The following data are available:
Department Expected Use of Driver Cost
Processing 800 $1,500,000
Packaging 200,000 1,500,000
Testing 2,000 600,000
Production information for the two products is as follows:
Oil Sludge
Department Expected Use of Driver Expected Use of Driver
Processing 300 500
Packaging 120,000 80,000
Testing 1,600 400
The amount of overhead assigned to Sludge using ABC is
a. $1,800,000.
b. $1,657,500.
c. $1,942,500.
d. $1,380,000.
Answer:
its 1,800,000
because it the answer
JB Instruments is analyzing a proposed project. The company expects to sell 1,600 units, ±3 percent. The expected variable cost per unit is $220 and the expected fixed costs are $438,000. Cost estimates are considered accurate within a ±2 percent range. The depreciation expense is $64,000. The sales price is estimated at $647 per unit, ±2 percent. What is the sales revenue under the worst-case scenario?
Answer:
$984,061.12
Explanation:
The computation of sales revenue under the worst-case scenario is shown below:-
Sales revenue under the worst-case scenario = Quantity sold × Price
= (1,600 - 1,600 × 3%) × ($647 - $647 × 2%)
= (1,600 - 48) × ($647 - 12.94)
= 1,552 × 634.06
= $984,061.12
Therefore for computing the sales revenue under the worst-case scenario we simply applied the above formula.
At the beginning of 2020, Vaughn Company acquired a mine for $1,965,400. Of this amount, $115,000 was ascribed to the land value and the remaining portion to the minerals in the mine. Surveys conducted by geologists have indicated that approximately 11,010,000 units of ore appear to be in the mine. Vaughn incurred $195,500 of development costs associated with this mine prior to any extraction of minerals. It also determined that the fair value of its obligation to prepare the land for an alternative use when all of the mineral has been removed was $46,000. During 2020, 2,433,000 units of ore were extracted and 2,081,000 of these units were sold.
Compute the total amount of depletion for 2020.
Answer:
$462,270.00
Explanation:
The first task is to determine the depletion rate per unit of ore extracted from the mine.
depletion rate=total cost the mine/total units of ore extract
total cost of mine=acquisition cost-land value+development costs+removal cost
total cost of mine=$1,965,400-$115,000+$195,500+$46,000=$2,091,900.00
total units of ore extract is 11,010,000 units
depletion rate= 2,091,900.00/11,010,000=$0.19 per unit of ore
depletion amount in 2020=depletion rate*ore extracted in 2020=2,433,000*$0.19 =$462,270.00
Answer:
$408,903
Explanation:
Depletion is an estimated cost of a natural resource that is extracted. This resource is expensed as the extraction is made.
As per given data
Total Payment = $1,965,400
Land Value = $115,000
Value of Rights = $1,965,400 - $115,000 = $1,850,400
Estimated resources = 11,010,000 units
Resources extracted in the period = 2,433,000 units
Depletion expense is based on ratio of the amount of extraction in period to the total expected resource.
Depletion Expense = $1,850,400 x 2,433,000 / 11,010,000 units = $408,903
On April 11 of the current year, Zack Corporation had a market price of $48 per share of common stock. Its par value was $10 per share. For the previous year, Zack paid an annual dividend of $3.90 per share. Zack's gross revenues and net income was $5,000,000 and $2,500,000, respectively. The dividend yield for Zack Corporation would be_____. 8% 0.08% 39% 0.39%
Answer:
The dividend yield for Zack Corporation 8%,the first option
Explanation:
The dividend yield is a measure of business performance used by investors which compares the dividend paid by a stock to its market price(price paid by investors to acquire the stock)
dividend per share for Zack Corporation is $3.90
market price per share is $48
dividend yield =$3.90/$48*100=8.13%
The correct option is the first option 8% since the figure above was simply rounded down to whole number
Topic: The Consumer and Business Market To increase revenue, many businesses, such as gift basket, insurance, tax preparation, food, and entertainment businesses, have targeted consumer and business markets. However, the decision-making process is a bit different for each market. Checklist: First, briefly describe the similarities and differences in the decision-making process between the business-to-business (B2B) and business-to-consumer (B2C) groups. Next, choose a business that predominantly targets the consumer market. Explain how they can reposition themselves to increase their sales to the business market using the business decision-making process.
Answer:
Check the explanation
Explanation:
B2B decisions are made between business entities (business and wholesaler, wholesaler and retailer) while B2C decisions are made between business and individuals (business and individual customers). Decision Making Units (DMU) is common in B2B and B2C decisions.
In a B2B, the key DMU includes economic buyer, infrastructure buyer and the user buyer. The economic buyer is the person buying a product, infrastructure buyer is the person providing infrastructure to make the purchase happen and the user buyer is the person supplying the product.
In the case of a decision-making process in a B2C, the DMU is a group of people making the decisions on the purchase of goods. B2C decision making consists of a buying center with users, buyers, influencers, gatekeepers and deciders.
The buying center is the key DMU in a B2C segment. The initiators in the buying center offer suggestions in a product purchase. The influencers provide their opinions in a product purchase. The buyers are the persons responsible for the entire contract. The gatekeepers control the information flow. Deciders take the final decision on a purchase. End users purchase the final product and use the item.
Consider the restaurant or fast food business that predominantly targets the corporate employees. In this case, a B2B decision-making process can be used to get more customers and improve their sales.
The economic buyer in this case is the employee of the corporate, the infrastructure buyer is the corporate entity and the user buyer is the fast food company supplying the food item. In this manner, a network with various corporate entities in the local area could improve the sales of the fast food company.
Similarly, a B2C decision-making process can be used to improve the sales by directly selling to the employees of the corporate and other people requiring fast food delivery at home through a mobile app.
In the decision-making process of B2C, the buyers are the fast food company, influencers may the persons including friends, family members and other entities, end users are the persons purchasing food through mobile app and gatekeepers are the persons responsible for maintaining the mobile app.
Splash World is considering purchasing a water park in Atlanta, Georgia, for $ 1,870,000 . The new facility will generate annual net cash inflows of $ 472,000 for eight years. Engineers estimate that the facility will remain useful for eight years and have no residual value. The company uses straight-line depreciation, and its stockholders demand an annual return of 12 % on investments of this nature.
Requirements
1. Compute the payback, the ARR, the NPV, the IRR, and the profitability index of this investment.
2. Recommend whether the company should invest in this project.
Answer:
1)
Payback period = Initial investment / Annul cash flow
Payback period = 1,880,000 / 480,000
Payback period = 3.92 years
2)
Accounting rate of return = Average cash flow / ( initial investment - book value) / 2
Accounting rate of return = 480,000 / ( 1,880,000 - 0)/2
Accounting rate of return = 0.5106 or 51.06%
3)
NPV = Present value of cash inflows - present value of cash outflows
NPV = 480,000 * 4.968 - 1,880,000
NPV = $504,640
4)
IRR is the rate of return that makes NPV equal to 0
NPV = Annuity * [ 1 - 1 / ( 1 + R)n] / R - initial investment
NPV = 480,000 * [ 1 - 1 / ( 1 + R)8] / R - 1,880,000
Using trial and error method, i.e, after using various values for R, let's try R as 19.32%
NPV = 480,000 * [ 1 - 1 / ( 1 + 0.1932)8] / 0.1932 - 1,880,000
NPV = 0
Therefore, IRR is 19.32%
Splash world should invest in the project as it has a positive NPV and and IRR greater than cost of capital
Stellar Plastics is analyzing a proposed project with annual depreciation of $19,500 and a tax rate of 34 percent. The company expects to sell 12,000 units, plus or minus 5 percent. The expected variable cost per unit is $3.20 plus or minus 4 percent, and the expected fixed costs are $30,000 plus of minus 2 percent. The sales price is estimated at $7.50 a unit, plus or minus 4 percent. What is the operating cash flow for a sensitivity analysis using total fixed costs of $31,000
Answer:
$20,226
Explanation:
expected sales = 11,400 - 12,000 - 12,600
expected sales price = $7.20 - $7.50 - $7.80
expected variable cost = $3.072 - $3.20 - $3.328
total fixed costs = $31,000
if you use an excel spreadsheet you can calculate all the different possible simulations and combine all the expected sales x 3 different price levels x 3 different variable costs and 1 fixed cost. Once you get all the 27 possible solutions, you just get the average.
I attached it because there is no room here.
One end item A requires three component parts: B, C, and D. The bill of material indicates that for each completed A, 3 units of B, 2 units of C, and 1 unit of D are required. Current inventory for the four items is as follows: There are 18 As, 43 Bs, 50 Cs and 35 Ds in stock. If the lead time for all items is one week and there are no scheduled receipts for any item, how many units of product A can be delivered to customers at the start of next week (week 2)
Answer:
Presently there will be 18 A’s, in accumulation there will be 43 B’s, this can create 43 ÷ 3 = 14.3 A’s.
Moreover the 50 C’s might create 50 ÷ 2 = 25 A’s.
Thus 35 D’s might create 35 A’s.
Now B is a restriction.
Consequently a determined of 14.3 A’s might be prepared with the existing stocks in hand.
Therefore the entire A’s that might be distributed at the beginning of following week is 18 + 14.3 = 32 .3
Berne, Inc. uses a flexible budget for manufacturing overhead based on machine hours. Variable manufacturing overhead costs per machine hour are as follows: Indirect labor $5.00 Indirect materials 2.50 Maintenance .80 Utilities .30 Fixed overhead costs per month are: Supervision $800 Insurance 200 Property taxes 300 Depreciation 900 The company believes it will normally operate in a range of 2,000 to 4,000 machine hours per month. Prepare a flexible manufacturing overhead budget for the expected range of activity, using increments of 1,000 machine hours. (List variable costs before fixed costs.)
Answer and Explanation:
As per the data given in the question,
Flexible manufacturing overhead budget
Activity level :
Machine hours 2,000 hours 3,000 hours 4,000 hours
Variable costs :
Indirect labor $5 $10,000 $15,000 $20,000
Indirect material $2.50 $5,000 $7,500 $10,000
Maintenance $0.80 $1,600 $2,400 $3,200
Utilities $0.30 $600 $900 $1,200
Total variable cost $22,600 $25,800 $34,400
Fixed costs :
Supervision $800 $800 $800
Insurance $200 $200 $200
Property taxes $300 $300 $300
Depreciation $900 $900 $900
Total Fixed cost $2,200 $2,200 $2,200
Total Cost $24,800 $28,000 $36,600
On January 1st, Guarder Consulting enters into a one-year contract with Smith Co. to restructure some of Smith's processes with a goal of cost savings. Smith pays Guarder an up-front fixed fee of $48,000 on January 1st. Guarder will also earn an additional $12,000 bonus if Smith achieves $100,000 of cost savings. Guarder estimates a 70% chance that Smith will achieve $100,000 of cost savings. Assuming that Guarder determines the transaction price as the most likely amount, what amount of revenue will be recorded at the end of the first month
Answer:
$4,700
Explanation:
Fixed fee - $48,000
Conditional bonus - $12,000
Condition for bonus = $100,000 cost saving
Estimate of achieving cost saving = 70%
As Guarder does not have an 100% assurance of meeting the $100,000 cost saving , the bonus will be multiplied by the estimated percentage of achieving it , being the most likely amount
Estimated bonus = 70%* $12,000= $8,400
Total annual contract fee = 48000+ $8,400 = $56,400
Month revenue recognition = 56,400/12 = $4,700
January recognition = $4,700.
Revenue are earned when earned , therefore the January portion of earned revenue is recorded.
Which of the following is the most likely negative consequence of excessive change in an organization? Group of answer choices Staff being asked to do too much Staff being restricted to a single activity The operation of the organization at less than capacity The establishment of a system for prioritizing projects
Answer:
Staff being asked to do too much.
Explanation:
Excessive change in an organization is defined as a process when organizations pursue several differing, unrelated and sometimes changes that are conflicting simultaneously. It can also be, when an organization involves in introducing new changes before previous changes are being accomplished.
Additionally, when staffs or employees perceives change as being excessive, they react in various ways. Some of their reactions to excessive change includes;
• They become overwhelmed.
• Lack of motivation.
• They're stressed out.
• Frustration and anger builds among them.
• Inadequacy, uncertainty
and incompetence.
The lower level staffs and middle managers are most likely to experience, the negative consequence of excessive change in an organization because they're being asked to do too much.
Femur Co. acquired 70% of the voting common stock of Harbor Corp. on January 1, 2019. During 2019, Harbor had revenues of $2,500,000 and expenses of $2,000,000. The amortization of fair value allocations totaled $60,000 in 2019. Not including its investment in Harbor, Femur Co. had its own revenues of $4,500,000 and expenses of $3,000,000 for the year 2019. What is the noncontrolling interest's share of earnings for Harbor Corp
Answer:
$1,808,000
Explanation:
The noncontrolling interest's share of the earnings of Harbor Corp. for 2019 is calculated to be:
=($2,500,000 - $2,000,000- $60,000) * 0.3 = $132,000
Amount of consolidated net income for 2019 should be allocated to Femur’s controlling interest in Harbor
= $440,000 - $132,000 = $308,000
Amount Femur Co. would report as consolidated net income for 2019:
= $1,500,000 + $308,000 = $1,808,000
Further From Center has 11,100 shares of common stock outstanding at a price of $45 per share. It also has 260 shares of preferred stock outstanding at a price of $87 per share. There are 610 bonds outstanding that have a coupon rate of 6.4 percent paid semiannually. The bonds mature in 26 years, have a face value of $1,000, and sell at 106.5 percent of par. What is the capital structure weight of the preferred stock?
Answer:
The capital structure weight of the preferred stock is 0.019
Explanation:
In order to calculate the capital structure weight of the preferred stock we would have to calculate first the total value of all the particulars as follows:
Total value particulars=value common stockv+value preferred stock+value bonds outstanding
value common stock=11,100*$45=$499,500
value preferred stock=260*$87=$22,620
value bonds outstanding=610*($1,000*106.5%)=$649,650
Total value particulars=$499,500+$22,620+$649,650
Total value particulars=$1,171,770
Therefore, the capital structure weight of the preferred stock=value preferred stock/Total value particulars
capital structure weight of the preferred stock=$22,620/$1,171,770
capital structure weight of the preferred stock=0.019
The capital structure weight of the preferred stock is 0.019
Byron Books Inc. recently reported $6 million of net income. Its EBIT was $12.6 million, and its tax rate was 40%. What was its interest expense? [Hint: Write out the headings for an income statement, and then fill in the known values. Then divide $6 million of net income by (1 - T) = 0.6 to find the pretax income. The difference between EBIT and taxable income must be interest expense. Use this same procedure to complete similar problems.] Write out your answer completely. For example, 25 million should be entered as 25,000,000. Round your answer to the nearest dollar, if necessary. Do not round intermediate calculations.
Answer:
he35
Explanation:
h
The 2016 financial statement of Willamette Valley Vineyards reported Cost of goods sold of $7,204,884. Note 3 to the financial statements reported that Inventories consisted of: 2016 2015 Winemaking and packaging materials $ 817,836 $ 690,292 Work-in-process 6,634,014 6,058,701 Finished goods 4,518,806 3,883,469 Total inventories $11,970,656 $10,632,462 The inventory turnover for 2016 was:__________
a, 0.57
b. 0.64
c. 0.59
d. 1.71
Answer:
b. 0.64
Explanation:
The computation of the inventory turnover for the year 2016 is shown below:
Inventory turnover = Cost of goods sold ÷ Average inventories
where,
Average inventories is
= ($11,970,656 + $10,632,462) ÷ 2
= $11,301,559
And the cost of goods sold is $7,204,884
So, the Inventory turnover is
= $7,204,884 ÷ $11,301,559
= 0.64 times
We simply applied the above formula
Granite Enterprises acquired a patent from Southern Research Corporation on January 1, 2021, for $3.4 million. The patent will be used for five years, even though its legal life is 20 years. Rocky Corporation has made a commitment to purchase the patent from Granite for $110,000 at the end of five years. Compute Granite's patent amortization for 2021, assuming the straight-line method is used
Answer:
$658,000
Explanation:
According to the scenario, computation of the given data are as follows:
Granite Enterprises Patent acquired = $3.4 million
Used years = 5 years
Rocky corporation purchase after 5 years = $110,000
So, we can calculate the Granite's patent amortisation by using following formula:
Granite's patent amortisation = ($3,400,000 - $110,000) ÷ 5
= $3,290,000 ÷ 5
= $658,000
On April 2, Granger Sales decides to establish a $290 petty cash fund to relieve the burden on Accounting.
Required:
a. Journalize the establishment of the fund
b. On April 10, the petty cash fund has receipts for mail and postage of $62, contributions, and donations of $33, meals and entertainment of $114, and $77 in the ending cash balance. Journalize the replenishment of the fund
c. On April 11, Granger Sales decides to increase petty cash to $430. Journalize this event
Answer and Explanation:
The journal entries are shown below:
On Apr 2
Petty cash $290
To Cash $290
(Being the establishment of the petty cash fund is recorded)
For recording this we debited petty cash as it increased the cash and credited the cash as it reduced the assets
On Apr 10
Mail & Postage $62
Contributions and Donations $33
Meals & entertainment $114
Cash Short and Over $4 ($290 - $62 - $33 - $114 - $77)
To Cash $213
(Being the replenishment of the fund is recorded)
For recording this, we debited the mail & postage, contributions & donations, meals & entertainment as it increased the expenses and credited the cash as it reduced the assets and the balancing figure is debited to cash short and over
On Apr 11
Petty Cash $140 ($430 - $290)
To Cash $75
For recording this we debited petty cash as it increased the cash and credited the cash as it reduced the assets
Please help ASAP giving BRAINLIEST , Did I get this correct?
Answer:
Yes you are correct on this researched it
Answer:
YEAH:)
Explanation:
Danielle Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May, the company budgeted for 8,200 units, but its actual level of activity was 8,250 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for May:
Data used in budgeting
Fixed element per month Variable element per unit
Revenue $34.20
Direct labor $0 $6.20
Direct materials 0 13.80
Manufacturing overhead 37,000 1.70
Total expenses $62,500 $21.90
Selling and administrative expenses 25,500 0.20
Actual results for May:
Revenue $228,900
Direct labor $41,130
Direct materials $93,235
Manufacturing overhead $43,500
Selling and administrative expenses $30,470
The direct materials in the flexible budget for May would be closest to:________.
a. $89,735.
b. $92,230.
c. $90,420.
d. $91,020.
Answer:
$113,850
Explanation:
The computation of the direct material in the flexible budget is shown below:
= Actual level of activity × direct material per unit
= 8,250 units × $13.80
= $113,850
By multiplying the actual level of activity with the direct material per unit we can get the direct material in the flexible budget and the same is shown above
This is the answer but the same is not provided in the given options
A refinery blends three petroleum components into three grades of gasoline -regular, premium, and diesel. The maximum quantities available of each component and the cost per barrel are as follows: Component Cost/Barrel Maximum Barrels Available/Day 6,000 3,000 4,500 10 To ensure that each gasoline grade retains certain essential characteristics, the refinery has put limits on the percentages of the components in each blend. The limits as well as the selling prices for the various grades are as follows:
Grade Selling Price/Barrel Comen R (regular) 18 Component Specifications Not less than 30% of A Not more than 30% of B Not less than 30% of C Not less than 60% of C Not more than 50% of B less than 10% of A P (premium) 25 D (diesel) 15 The refinery wants to produce at least 5,000 barrels of each grade of gasoline. Management wishes to determine the optimal mix of the three components that will maximize profit.
1. Define the decision variables.
2. Build the objective function.
3. Build all the constraints.
Answer:
Explanation:
1)
xij = barrels of component i used in grade j per day for i = A, B, C and j = R, P, D
2)
Max Z = 18 (x AR + x BR + x CR) + 25 (x AP + x BP + x CP) + 15 (x AD + x BD + x CD) – 9 (x AR + x AP + x AD) – 7 (x BR + x BP + x BD) – 10 (x CR + x CP + x CD)
or,
Max Z = 9 x AR + 11 x BR + 8 x CR + 16 x AP + 18 x BP + 15 x CP + 6 x AD + 8 x BD + 5 x CD
3)
Subject to,
x AR + x AP + x AD <= 6000
x BR + x BP + x BD <= 3000
x CR + x CP + x CD <= 4500
x Aj + x Bj + x Cj >= 5000 for j = R, P, D
x AR >= 30%*(x AR + x BR + x CR) or, 0.7 x AR - 0.3 x BR - 0.3 x CR >= 0
x BR <= 30%*(x AR + x BR + x CR) or, -0.3 x AR + 0.7 x BR - 0.3 x CR <= 0
x CR >= 30%*(x AR + x BR + x CR) or, -0.3 x AR - 0.3 x BR + 0.7 x CR >= 0
x CP >= 60%*(x AP + x BP + x CP) or, -0.6 x AP - 0.6 x BP + 0.4 x CP >= 0
x BD <= 50%*(x AD + x BD + x CD) or, -0.5 x AD + 0.5 x BD - 0.5 x CD <= 0
xAD >= 10%*(xAD + xBD + xCD) or, 0.9 xAD - 0.1 xBD - 0.1 xCD >= 0
xij >= 0 for i = A, B, C and j = R, P, D
If the government set a price ceiling of $40, there would be: Group of answer choices a shortage (or excess supply) of about 8 units a shortage (or excess supply) of about 12 units a surplus (or excess demand) of about 8 units a surplus (or excess demand) of about 12 units
Answer:
A surplus (or excess demand) of about 8 units
Explanation:
The picture attached shows the diagram necessary for the question which is part of the question. Solution is given below;
At the above ceiling at price of 40$
Quantity supplied will be 16
Quantity demanded will be 24
So when demand is more than supply than there will be a shortage in quantity by (24-16) 8 units.
When there is demand more than supply than it is an excess demand.
So surplus or excess demand by 8 units.
On January 1, 2011, G Corp. granted stock options to key employees for the purchase of 80,000 shares of the company's common stock at $25 per share. The options are intended to compensate employees for the next two years. The options are exercisable within a four-year period beginning January 1, 2013, by the grantees still in the employ of the company. No options were terminated during 2011, but the company does have an experience of 20% forfeitures over the life of the stock options. The market price of the common stock was $31 per share at the date of the grant. G Corp. used the Binomial pricing model and estimated the fair value of each of the options at $10. What amount should G charge to compensation expense for the year ended December 31, 2011
Answer:
The amount should G charge to compensation expense for the year ended December 31, 2011 is $320,000
Explanation:
In order to calculate the amount should G charge to compensation expense for the year ended December 31, 2011 we would have to calculate the following formula:
amount should G charge to compensation expense for the year ended December 31, 2011=Total compensation/2
Note: company does have an experience of 20% forfeitures over the life of the stock options, therefore, 100%-20%=80%
Total compensation= 80,000 options × $10 × 80%
Total compensation= $640,000
amount should G charge to compensation expense for the year ended December 31, 2011=$640,000/2
amount should G charge to compensation expense for the year ended December 31, 2011=$320,000
8-27 Basic Flexible Budget The budgeted prices for materials and direct labor per unit of fi nished product are $8 and $7, respectively. The production manager is delighted about the following data: Static Budget Actual Costs Variance Direct materials $59,200 $49,900 $9,300 F Direct labor 51,800 39,200 12,600 F Is the manager’s happiness justifi ed? Prepare a report that might provide a more detailed explanation of why the static budget was not achieved. Good output was 5,300 units.
Answer:
Basic Flexible Budget
Flexible Budget:
Differential Analysis
Reject Order (Alt. 1) or Accept Order (Alt. 2)
September 5
Flexible Actual Variance
Costs: 5,300 units 5,300 units 0
Direct Materials $42,400 $49,900 $7,500 U
Direct Labor $ 37,100 $39,200 $2,100 U
Total Variable costs $79,500 $89,100 $9,600 U
Explanation:
Using the good output and a flexible budget, the static budget was not achieved favorably as depicted.
A flexible budget varies the budgeted units to agree with the volume of activity. This produces a different result from the static budget, which does not vary the budgeted units according to the volume of activity.
A flexible budget is preferable as it reflects the correct performance given the activity level or volume of production or sales.
Vaughn Manufacturing expects to purchase $180000 of materials in July and $170000 of materials in August. Three-fourths of all purchases are paid for in the month of purchase, and the other one-fourth are paid for in the month following the month of purchase. How much will August's cash disbursements for materials purchases be?
Answer:
The August's cash disbursements for materials purchases would be
$172,500.00 for Vaughn Manufacturing
Explanation:
The cash disbursements in the month of August consist of the three-fourth cost of the August purchases and the one-fourth of the July purchases since the 3/4 of the cost of materials purchased is paid in the same month as purchases and the balance of 1/4 of purchase cost in the succeeding month
Cash disbursements in August=($170,000*3/4)+($180,000*1/4)=$127500 +$45,000=$172,500.00
Bentley Enterprises uses process costing to control costs in the manufacture of Dust Sensors for the mining industry. The following information pertains to operations for November. (CMA Exam adapted) Units Work in process, November 1st 16,000 Started in production during November 100,000 Work in process, November 30th 24,000 The beginning inventory was 60% complete as to materials and 20% complete as to conversion costs. The ending inventory was 90% complete as to materials and 40% complete as to conversion costs. Costs pertaining to November are as follows: Beginning inventory: direct materials, $54,560; direct labor, $20,320; manufacturing overhead, $15,240. Costs incurred during the month: direct materials, $468,000; direct labor, $182,880; manufacturing overhead, $391,160. What is the equivalent unit cost for materials assuming Bentley uses first-in, first-out (FIFO) process costing?
Answer:
Material Cost per equivalent unit =$4.87
Explanation:
First in First out (FIFO)methods separates completed units into fully worked and opening inventory
Fully worked units: These represent units of inventory that were started in a current period and completed that same period. The fully worked units are calculated in order to separate the opening inventory from the the newly introduced when accounting for completed units under the FIFO.
For Bentley , fully worked units is
Fully worked = Newly introduced - closing work in progress
= 100,000- 24,000 = 76,000 .
Opening inventory = 16,000
Item Units Equivalent Units
Opening inventory 16,000 × 40%= 9,600
Completed unit 76,000 × 100% = 480,000
Closing inventory 24,000 × 90% = 21,600
Total equivalent units 107,200
Cost per equivalent unit = Total cost/ equivalent inits
= 54560 +468,000/ 107,200 = $4.87
Material Cost per equivalent unit =$4.87
The equivalent unit cost for materials assuming Bentley uses first-in and first-out (FIFO) process costing:
For Bentley , fully worked units is
Fully worked = Newly introduced - closing work in progressFully worked= 100,000- 24,000 = 76,000 .Opening inventory = 16,000
Item Units Equivalent Units
Opening inventory 16,000 × 40%= 9,600
Completed unit 76,000 × 100% = 480,000
Closing inventory 24,000 × 90% = 21,600
Total equivalent units 107,200
Cost per equivalent unit = Total cost/ equivalent inits
Cost per equivalent unit= 54560 +468,000/ 107,200 = $4.87
The Material Cost per equivalent unit =$4.87.
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Milton Friedman argues that __________.
O corporations today should adopt a broader view of their social responsibilities than they have in the past.
O corporate officials have a social responsibility that goes beyond serving the interests of their stockholders.
O strict governmental controls are necessary if society is to maximize its overall economic well-being.
O a business's only social responsibility is to maximize profits within the rules of the game.
Answer:
Milton Friedman argues that a business's only social responsibility is to maximize profits within the rules of the game.
Explanation:
Milton Friedman is known to hold an opposing view when compared to that of John Keynes about economic theory.
Whereas Milton Friedman believes that the utmost responsibility of any company is to the shareholders, the Keynesian are more consumer focused.
Milton Friedman believes strongly in free capitalism and as a result does not advocate for any company offering corporate social responsibility to the society or public.
Explain how strong enforcement of carefully designed patent laws affects the growth rate of an economy. (5 points) Explain how tax incentives can be used to promote faster economic growth. (5 points) Explain the "infant industry argument" and its relationship to a country’s growth rate. (5 points) Explain what incentives can be used to increase the savings rate in an economy (as another way to promote faster economic growth). (5 points)
Answer:
1.In simple words, strong enforced patent laws will work as a motivation to innovation and innovation always results in better outcomes for thee economy as the output in the economy could be increased dramatically through technology advances.
2. By simply decreasing the tax rates on income from middle class households, Government can increase the demand of goods due to higher income in hand which further results in growth of economy.
3. Such argument states the new industries must be protected from foreign competitors until they are stable on their own. This is completely true as new industrious lead to better employment opportunities which further leads to economic growth.
4. For first tax rates can be decreased for more income in hand and also interest rates on savings could be increased.
The economy is in equilibrium, TP = TE. Then, autonomous consumption rises. As a result, __________ rises, the __________ curve shifts __________, inventory levels unexpectedly __________, and business firms __________ the quantity of goods and services they produce. Group of answer choices consumption; TE; downward; fall; increase consumption; TE; upward; fall; increase consumption; TE; upward; rise; decrease investment; TE; upward; fall; increase investment; TP; leftward; fall; increase
Explanation:
The economy is in equilibrium, TP = TE. That is total production is equal to total production.
Then, autonomous consumption rises. As a result, consumption rises, the TE(total expenditure) curve shifts upwards, inventory levels unexpectedly falls, and business firms increases the quantity of goods and services they produce.
Assume that an economy is initially in long-run equilibrium. Explain the short-run effect of monetary policy that causes an increase in interest rates. As a result of higher interest rates, the A. long-run aggregate supply curve will shift left. B. aggregate demand curve will shift left. C. short-run aggregate supply curve will shift left. D. aggregate demand curve will shift right. The new equilibrium will be A. where the original aggregate demand curve intersects the original short-run aggregate supply curve. B. where the new aggregate demand curve intersects the original short-run aggregate supply curve. C. where the new aggregate demand curve intersects the original aggregate demand curve.
Answer:
As a result of higher interest rates, the
B. aggregate demand curve will shift left.The new equilibrium will be
B. where the new aggregate demand curve intersects the original short-run aggregate supply curve.Explanation:
A contractionary monetary policy will increase the interest rates, lowering investment and consumption. This will result in a leftward shift of the aggregate demand curve.
The new equilibrium (E1) will be at the point where the new aggregate demand curve (AD1) intersects the original short run aggregate supply curve (SRAS) and the long run aggregate supply curve (LRAS).
