Answer: $261000
Explanation:
Based on the information given in the question, the controllable margin for the year will be calculated thus:
Contribution margin = $308000
Less: Direct fixed cost = $47000
Controllable margin = $261000
Therefore, the controllable margin is $261000.
Selected accounts with a credit amount omitted are as follows: Work in Process Apr. 1 Balance 7,500 Apr. 30 Goods finished X 30 Direct materials 60,000 30 Direct labor 191,000 30 Factory overhead 57,300 Finished Goods Apr. 1 Balance 13,500 30 Goods finished 307,300 What was the balance of Work in Process as of April 30? a.$307,300 b.$13,500 c.$57,300 d.$8,500
Answer:
the balance in work in process in april 30 is $8,200
Explanation:
The computation of the balance in work in process in april 30 is as follows:
Balance of Work in Process as of April 30 is
= Apr 1 Balance + Direct material + direct labor + overhead - goods finished
= $7,500 + $60,000 + $191,000 + $57,000 - $307,300
= $8,200
Hence, the balance in work in process in april 30 is $8,200
This is the answer but the same is not provided in the given options
Which of the following is a major difference between a budget constraint and production possibilities frontier?
a. A production possibilities frontier conveys the relative prices of the two goods, whereas a budget constraint accounts for diminishing returns.
b. A production possibilities frontier is usually straight, whereas a budget constraint is typically curved.
c. A budget constraint typically has a constant slope, whereas the slope of a production possibilities frontier is usually different at various points.
d. There is no difference. They convey the same information.
Answer:
c
Explanation:
The Production possibilities frontiers is a curve that shows the various combination of two goods a company can produce when all its resources are fully utilised.
The PPF is concave to the origin. This means that as more quantities of a product is produced, the fewer resources it has available to produce another good. As a result, less of the other product would be produced. So, the opportunity cost of producing a good increase as more and more of that good is produced.
So, the PPF exhibits diminishing return. The slope of the PPF is different at different points. this makes the PPF a curve
the budget constraint is a straight line that shows the various combinations of goods a consumer can consume given her income. the budget constraint is a straight line because the slope is constant at each point on the curve
Also, the slope of the budget constraint is the relative prices of the two goods
A small business owner visits his bank to ask for a loan. The owner states that she can repay a loan at $1,500 per month for the next 3 years and then $500 per month for three years after that. If the bank is charging customers 10 percent APR, how much would it be willing to lend the business owner?
Answer:
The bank will be willing to lend $ 28,800 to the business owner.
Explanation:
Given that a small business owner visits his bank to ask for a loan, and the owner states that she can repay a loan at $ 1,500 per month for the next 3 years and then $ 500 per month for three years after that, since the bank is charging customers 10 percent APR, to determine how much the business owner would be willing to lend the following calculation must be performed:
1500 x 12 x 3 + 500 x 12 x 3 = X
18000 x 3 + 6000 x 3 = X
54000 + 18000 = X
72000 = X
10 x 6 = 60
100 - 60 = 40
100 = 72000
40 = X
40 x 72000/100 = X
28800 = X
Therefore, the bank will be willing to lend $ 28,800 to the business owner.
Chicotti Company has 6,000 units in beginning work in process, 30% complete as to conversion costs, 75,000 units transferred out to finished goods, and 2,000 units in ending work in process 20% complete as to conversion costs. The beginning and ending inventory is fully complete as to materials costs. How much are equivalent units for materials if the FIFO method is used
Answer:
71,000
Explanation:
Calculation to determine How much are equivalent units for materials if the FIFO method is used
Using this formula
Equivalent units for materials=(Units transferred out to Finished goods + Units in ending work in process – Units in beginning work in process)
Let plug in the formula
Equivalent units for materials=75,000 + 2,000 – 6,000
Equivalent units for materials= 71,000
Therefore the equivalent units for materials if the FIFO method is used will be 71,000
odson Company manufactures a product with a standard direct labor cost of 2.3 hours of labor per unit at $10.60 per hour. Last month, 170 units were produced using 90 hours at $11.60 per hour. What was the company's labor quantity variance
Answer:
Direct labor time (efficiency) variance= $3,190.6 favorable
Explanation:
To calculate the direct labor quantity variance, we need to use the following formula:
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
Direct labor time (efficiency) variance= (391 - 90)*10.6
Direct labor time (efficiency) variance= $3,190.6 favorable
Standard quantity= 2.3*170= 391
2018
Feb. 2 Recorded credit sales of $97,000. Ignore Cost of Goods Sold.
Nov. 1 Loaned $18,000 to Jess Price, an executive with the company, on a one-year, 7% note.
Dec. 31 Accrued interest revenue on the Price note. 2019
Nov. 1 Collected the maturity value of the Price note.
Required:
Journalize the entries.
Answer:
Feb 6
Dr Account receivable $97,000
Cr Sales revenue $97,000
Jul 1
Dr Notes receivable $18,000
Cr Cash $18,000
Dec 31
Dr Interest receivable $630
Cr Interest revenue $630
July 1
Dr Cash $19,260
Cr Notes receivable $18,000
Cr Interest receivable $630
Cr Interest revenue $630
(To record collection)
Explanation:
Preparation of the journal entries
Feb 6
Dr Account receivable $97,000
Cr Sales revenue $97,000
(To credit sales)
Jul 1
Dr Notes receivable $18,000
Cr Cash $18,000
(To record loan given)
Dec 31
Dr Interest receivable ($18000*7%*6/12) $630
Cr Interest revenue $630
(To record accrued interest)
July 1
Dr Cash $19,260
($18,000+$630+630)
Cr Notes receivable $18,000
Cr Interest receivable $630
Cr Interest revenue $630
(To record collection)
Forner, Inc., manufactures and sells two products: Product Z1 and Product Z8. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
Estimated Expected Activity
Activity Cost Pools Activity Measures Overhead Cost Product Z1 Product Z8 Total
Labor-related DLHs $112,190 600 2,000 2,600
Machine setups setups 40,440 500 700 1,200
Order size MHs 609,770 3,000 3,200 6,200
$762,400
The activity rate for the Machine Setups activity cost pool under activity-based costing is closest to:
$203.26 per setup
$190.55 per setup
$122.97 per setup
$33.70 per setup
Answer:
Machine setups= $33.7 per setup
Explanation:
Giving the following information:
Activity Cost Pools Activity Measures Overhead Cost Product Z1 Product Z8 Total
Machine setups setups 40,440 500 700 1,200
To calculate the activity rate for Machine setup, we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Machine setups= 40,440 / 1,200
Machine setups= $33.7 per setup
On whom the trade bill drawn ?
The bill of exchange is drawn by the seller of the goods and is accepted by the buyer.
On December 31, the trial balance of Cubico Company included the following accounts with debit balances: Prepaid Advertising $1,500 Advertising Expense 5,400 If it is determined that the cost of advertising applicable to future periods is $3,300, the correct adjusting entry would:_____.
A. Debit Advertising Expense $1,800; credit Prepaid Advertising $1,800.
B. Debit Prepaid Advertising $1,800; credit Advertising Expense $1,800.
C. Debit Prepaid Advertising $3,300; credit Advertising Expense $3,300.
D. Debit Advertising Expense $3,300; credit Prepaid Advertising $3,300.
Answer:
Cubico Company
The correct adjusting entry would be:
B. Debit Prepaid Advertising $1,800; credit Advertising Expense $1,800.
Explanation:
a) Data and Calculations:
Debit balances on December 31:
repaid Advertising $1,500
Advertising Expense 5,400
Determined future advertising cost = $3,300
The correct adjusting entry would be:
B. Debit Prepaid Advertising $1,800; credit Advertising Expense $1,800.
This will increase the prepaid advertising by $1,800 to $3,300 ($1,500 + $1,800) and reduce the advertising expense by $1,800 to $3,600 ($5,400 - $1,800).
Is scented candle harmful to dogs?
Answer:
Scented candles are not harmful to dogs for normal use, but high concentrations in a confined space for a long time would have an impact on the dog's sense of smell.
Because the candles you use will cause a lot of burnt smoke which is harmful to dogs. And aromatherapy ingredients contain a lot of chemical substances. If the windows are opened, it will be ok, if not the more chemical substances accumulate, the more it will be harmful to dogs, or even to the health of people.
Here are several ways to avoid the harm caused by aromatherapy to dogs:
Do not ignite the two types of aromatherapy in a short time or at the same time, to avoid the two types of aromatherapy, which are mutually ineffective and produce toxic gas.
Try not to light candles in a closed bedroom when you sleep.
Keep air circulation.
Keep all kinds of aromatherapy out of reach of dogs.
Use Home Lights scented candles in the right way.
Explanation:
https://hlcandles.com/
Concord Company has recently tried to improve its analysis for its manufacturing process. Units started into production equaled 18900 and ending work in process equaled 1000 units. Concord had no beginning work in process inventory. Conversion costs are applied uniformly throughout production, and all materials are applied at the beginning of the process. How much is the materials cost per unit if ending work in process was 30% complete and total materials costs equaled $86940
Answer:
the material cost per unit is $4.60 per unit
Explanation:
The computation of the material cost per unit is shown below:
= Total material cost ÷ equivalent units of material
= $86,940 ÷ (18,900 - 1,000) × 100% + 1,000 × 100%
= $86,940 ÷ (17,900 + 1,000)
= $86,940 ÷ 18,900
= $4.60 per unit
Hence, the material cost per unit is $4.60 per unit
The same should be considered and relevant
Oceanic, a venture capital firm, has the opportunity to invest in one of two firms that are in the process of globalizing. Macmillan, an air-conditioner manufacturer, faces intense pressure from its home market. Rent a Swag, a dog-toy manufacturer, has encountered little competition in its country of origin. In which company should Oceanic invest?
a. Macmillan, because air conditioners cost more to ship than dog toys do
b. Macmillan, because firms that face stiff competition at home tend to do better abroad
c. Rent a Swag, because firms that face little or no competition at home tend to do better abroad
d. Rent a Swag, because dog toys cost less to ship than air conditioners do
Answer: B. Macmillan, because firms that face stiff competition at home tend to do better abroad
Explanation:
Following the information given, it can be deduced that Oceanic should invest in Macmillan, because firms that face stiff competition at home tend to do better abroad.
The fact that Macmillan, which is an air-conditioner manufacturer, faces intense pressure from its home market will have resulted in the company making quality sure conditioners in order to sustain the pressure and have an edge over its local competitors. Therefore, the company will do better abroad as a result of this.
The correct option is B.
Firm A has a 21 percent marginal tax rate, and Firm Z has a 28 percent marginal tax rate. Firm A owns a controlling interest in Firm Z. The owners of Firm A decide to incur a $9,500 deductible expense that will benefit both firms.
Required:
Compute the after-tax cost of the expense assuming that:
a. Firm A incurs the expense
b. Firm Z incurs the expense
Answer:
a. $7,505
b.$6,840
Explanation:
a. Computation for the after-tax cost of the expense assuming that Firm A incurs the expense
Using this formula
After-tax cost = Deductible Expense - (Firm A Marginal tax rate* Deductible Expense)
Let plug in the formula
After-tax cost = ($9,500 - ($21%*9500)
After-tax cost = ($9,500 - $1,995)
After-tax cost=$7,505
Therefore the after-tax cost of the expense assuming that Firm A incurs the expense is $7,505
B. Computation for the after-tax cost of the expense assuming that Firm Z incurs the expense
Using this formula
After-tax cost = Deductible Expense - (Firm Z Marginal tax rate*Deductible Expense)
Let plug in the formula
After-tax cost =$9,500 -(28%*$9500)
After-tax cost =($9,500 - $2,660 )
After-tax cost=$6,840
Therefore the after-tax cost of the expense assuming that Firm Z incurs the expense is $6,840
Wasilko Corporation produces and sells one product The budgeted selling price per unit is $114. Budgeted unit sales for February is 9,900 units. Each unit of finished goods requires 6 pounds of raw materials. The raw materials cost $4.00 per pound. The direct labor wage rate is $24.00 per hour. Each unit of finished goods requires 2.4 direct labor-hours. Manufacturing overhead is entirely variable and is $9.00 per direct labor-hour. The variable selling and administrative expense per unit sold is $1.60. The fixed selling and administrative expense per month is $70,000. The estimated net operating income (loss) for February is closest to:
Answer: $21,080
Explanation:
First calculate the contribution margin per unit
= Sales - Variable costs
= Selling price - Raw materials - Direct labor cost - Manufacturing overhead - Variable selling and administrative expense
= 114 - (6 * 4) - (2.4 * 24) - (9 * 2.4) - 1.60
= $9.20
The Contribution margin is:
= 9.20 * 9,900 units
= $91,080
Net operating income = Contribution margin - fixed cost
= 91,080 - 70,000
= $21,080
"Rogue Corp. has sales of $4,250,000; the firm's cost of goods sold is $2,500,000; and its total operating expenses are $600,000. The firm's interest expense is $250,000, and the corporate tax rate is 40%. What is Rogue's tax liability"
Answer:
$360,000
Explanation:
Calculation to determine Rogue's tax liability
Step 1 is to calculate the gross profit
Using this formula
Gross profit=Sales - Cost of Goods Sold
Let plug in the formula
Gross profit=$4,250,000-$2,500,000
Gross profit=$1,750,000
Step 2 is to calculate operating income
Using this formula
Operating income=Gross Profit -Total operating expenses
Let plug in the formula
Operating income=$1,750,000-$600,000
Operating income=$1,150,000
Step 3 is to calculate the EBT
Using this formula
EBT=Operating income - Interest expense
Let plug in the formula
EBT=$1,150,000-$250,000
EBT=$900,000
Now let calculate the Tax liability
Using this formula
Tax liability=EBT x Corp Tax
Let plug in the formula
Tax liability=$900,000*$40%
Tax Liability=$360,000
Therefore Rogue's tax liability is $360,000
For March, sales revenue is $1,000,000, sales commissions are 5% of sales, the sales manager's salary is $80,000, advertising expenses are $65,000, shipping expenses total 1% of sales, and miscellaneous selling expenses are $2,100 plus 1% of sales. Total selling expenses for the month of March are
Answer:
$217,100
Explanation:
total selling expenses = sales commission + sales manager's salary + shipping expense + advertising expenses + miscellaneous selling expenses
sales commissions = 50,000
advertising expenses = 65,000
shipping expenses = 10,000
sales manager's salary= 80,000
miscellaneous selling expenses = 10,000 + 2100
Select the market segment that looks the most promising?
1. Luxury trenfollowers
Segment size 5,000(5%)
Growth rate 7%
2. School children
Segment size 35,000 (35%)
Growth rate 1%
3. University students
Segment size 24,099(24%)
Growth rate 5%
4. Outdoor enthusiasts
Segment size 14,000 (14%)
Growth rate 5%
5. Urban commuters
Segment size 20,000 (20%)
Growth rate 3%
Answer:
Luxury Trend followers
Explanation:
The consider which market segment shows the most or higest level of promise, we may have to the growth rate of each segment, which is the percentage change in earnings or revenue over a specific period of time. From the data given, the market segment with the greatest growth rate is the trend followers segment with a growth rate of 7%
Luxury trend followers : 7%
School children : 1%
University students : 5%
Outdoor enthusiasts : 5%
Urban Commuters : 3%
If a company spends $80 million to build facility space sufficient to hold 5 million pairs of footwear-making equipment at a site in Latin America, then the company's annual depreciation costs for this facility space will be
Answer: $8,000,000
Explanation:
From the question given, the cost of the building facility is $80 million. Also, it should be noted that the default rate for depreciation is given as 10%, therefore, the company's annual depreciation costs for this facility space will be:
= Depreciation rate × Cost of building
= 10% × $80,000,000
= 0.1 × $80,000,000
= $8,000,000
How many BTU's are in a ton
Answer:
12.000
Explanation:
Because 1 ton equals 12,000 BTU.
For example, 48,000 BTU equals 4 tons, and 60,000 BTU equals 5 tons.
Short-term investments are intended to be converted into cash within the longer of one year or the operating cycle of the business, and are readily convertible to cash. True or False
Answer:
True
Explanation:
The reasons why many companies invest in other companies includes
1. Due to excess cash not needed immediately, so invested to earn additional income to use for operations
2. Long- term strategic reasons etc
The criteria for a current asset is that the investment must be liquid and be able to convert to cash within one year (or become a long-term investment).
Short-term investments
This is a current assets. It is also called marketable securities. This is a form of an investments made in marketable securities that can be converted easily to cash which a company plans to hold for 1 year or less than one year.
The 3 categories of short-term investments. They includes:
1. Trading securities
2. available-for-sale securities
3. Held to maturity investment.
The two most important goals for government policy involve a trade-off between __________ and __________. A. big government; small government. B. taxation; government spending. C. direct regulation; indirect regulation. D. equity; efficiency.
Answer:
D
Explanation:
Investing $2,000,000 in TQM's Channel Support Systems initiative will at a minimum increase demand for your products 3.0% in this and in all future rounds. Looking at the Round 0 Inquirer for Andrews, last year's sales were $163,189,230. Assuming similar sales next year, the 3.0% increase in demand will provide $4,895,677 of additional revenue. With the overall contribution margin of 34.1%, after direct costs this revenue will add $1,669,426 to the bottom line. For simplicity, assume that the demand increase and margins will remain at last year's levels. How long will it take to achieve payback on the initial $2,000,000 TQM investment, rounded to the nearest
Answer:
the payback period is 14 months
Explanation:
The computation of the payback period is shown below:
Profit is
= $2,000,000 - $1,669,426
= $330,574
Now payback period is
= 1 + $330,574 ÷ $1,669,426
= 1 +0.198 years
= 1.198 years
= 14.37 months
= 14 months
Hence, the payback period is 14 months
MC Qu. 147 Luker Corporation uses a process... Luker Corporation uses a process costing system. The company had $165,500 of beginning Finished Goods Inventory on October 1. It transferred in $842,000 of units completed during the period. The ending Finished Goods Inventory balance on October 31 was $163,200. The entry to account for the cost of goods manufactured during October is:
Answer:
Debit cost of goods sold $844,300
Credit finished goods inventory $844,300
Explanation:
Based on the information given The Appropriate journal entry to account for the cost of goods manufactured during October is:
Debit cost of goods sold $844,300
Credit finished goods inventory $844,300
($165,500 + $842,000 - $163,200 = $844,300)
(To record cost of goods manufactured)
Good afternoon. Kindly assist on the following please. Assignment due by 4:30pm Mike bookshop had the following structure. Share capital 500000 ordinary shares of $1 each. 300000 10% preference of $1 each. Reserves Share premium 200 000 General reserves 100 000 Retained earnings 400 000 8% debenture 100 000 During the year the following transaction took place. 01 January issue of 200 000 $1 ordinary shares at$1,20 and 100 000 preference shares at $2 each. 01 June a 1 for 4 right issue at a premium of $0,10c each per share. 01 December 1 for 5 bonus shares fully paid. All shares issued during the year qualified for bonus and the company wishes to leave the reserves in their flexible form. Required. Balance sheet extract.
Answer:
Mike Bookshop
Balance Sheet Extract as at December 31
Share capital:
1,050,000 ordinary shares of $1 each $1,050,000
400,000 10% preference of $1 each 400,000
Total share capital $1,450,000
Reserves:
Share premium 357,500
General reserves 100,000
Retained earnings 225,000
Total reserves $682,500
8% debenture $100,000
Explanation:
a) Data and Analysis:
Share capital:
500000 ordinary shares of $1 each.
300000 10% preference of $1 each.
Reserves:
Share premium 200 000
General reserves 100 000
Retained earnings 400 000
8% debenture 100 000
During the year the following transaction took place.
01 January Cash $240,000 Ordinary share capital $200 000 Share Premium $40,000
$1 ordinary shares at$1.20 and
01 January Cash $200,000 Preferred share capital $100 000 Share Premium $100,000
01 June Cash $192,500 Ordinary share capital $175,000 Share Premium $17,500
a 1 for 4 right issue at a premium of $0.10c each per share.
01 December Retained Earnings $175,000 Ordinary share capital $175,000
1 for 5 bonus shares fully paid.
Ordinary share capital:
Beginning balance $500,000
January 1 issue 200,000
June 1 rights issue 175,000
Dec. 1 bonus issue 175,000
Ending balance $1,050,000
Preferred share capital:
Beginning balance $300,000
January 1 issue 100,000
Ending balance $400,000
Share Premium:
Beginning balance $200,000
January 1 issues 140,000
June 1 rights issue 17,500
Ending balance $357,500
General reserves $100,000
Retained Earnings:
Beginning balance $400,000
Dec. 1 Bonus issue (175,000)
Ending balance $225,000
Local marketing is an effective tool used by marketers to reach intended market segments. Groupon has capitalized on this concept by tailoring brands and marketing to the needs and wants of local customer segments—cities, neighborhoods, and even specific stores. According to its website, Groupon “offers a vast mobile and online marketplace where people discover and save on amazing things to do, see, eat, and buy. By enabling real time commerce across local businesses, travel destinations, consumer products, and live events, shoppers can find the best a city has to offer. Groupon is redefining how small businesses attract and retain customers by providing them with customizable and scalable marketing tools and services to profitably grow their businesses.” This concept lies at the heart of Groupon’s mission: “to connect local commerce, increasing consumer buying power while driving more business to local merchants through price and discovery.” To help consumers make those connections, Groupon offers a mobile app, online marketplace, and social media touchpoints where customers can readily access information on its daily deals. Questions: Q1. How does Groupon use target marketing? Provide examples. Q2. Discuss the ways in which small businesses can utilize local social media marketing in your community. Q3. Have you heard about Groupon? Explain their business Q4. Do you use Groupon? Q5. Is it effective in helping local businesses to meet the challenges of local marketing? Why or why not?
Answer:
hdhwhhdndnjsjndbxhhdhshhshxhx
The country of Bolivia had a Gross Domestic Product of $79 billion in 2016 and a population of 11 million people, the GDP per capita would be ________.
Answer:
The GDP per capita of country of Bolivia would be $7,181.82.
Explanation:
GDP Per capita refers to a measure that calculates a country's economic output per person by dividing its GDP by its population.
Therefore, we have:
GDP per capita = GDP / Population = $79 billion / 11 million = $79,000,000,000 / $11,000,000 = $7,181.82
Therefore, the GDP per capita of country of Bolivia would be $7,181.82.
The Wood Valley Dairy makes cheese to supply to stores in its area. The dairy can make 250 pounds of cheese per day (365 days per year), and the demand at area stores is 180 pounds per day. Each time the dairy makes cheese, it costs $125 to set up the production process. The annual cost of carrying a pound of cheese in a refrigerated storage area is $12. Determine the optimal order size and the minimum total annual inventory cost.
Answer: 1. 1170 units
2. $14039
Explanation:
The optimal order size will be:
= ✓2AO/C
where,
A = Annual demand = 180 × 365 days = 65,700
O = Ordering cost = 125
C = Carrying cost = 12
EOQ = ✓(2AO/C)
= ✓(2 × 65700 × 125/12)
= ✓ 1368750
= 1170 units
Therefore, the optimal order size is 1170 units.
2. The minimum total annual inventory cost will be calculated as:
C = (Q /2)(H) +(D/Q)(S)
where,
Q = 1170 pounds
H = holding cost = $12
D = annual demand = 65,700
S =set up cost = $125
Therefore, the minimum total annual inventory cost will be:
C = (Q /2)(H) +(D/Q)(S)
C = {(1170) /2] × 12} + {(65,700 /1170) × 125}
= 7020 +7019
= 14,039
Therefore, the minimum total annual inventory cost is $14,039.
XYZ Company provides the following activity-based costing information: Activities Total Costs Activity-cost drivers Account inquiry $320,000 16,000 hours Account billing $160,000 3,200,000 lines Account verification costs $138,600 60,000 accounts Correspondence letters $19,200 4,000 letters Total costs $637,800 The above activities are used by Product A and B as follows: Product A Product B Account inquiry hours 2,700 hours 1,800 hours Account billing lines 820,000 lines 630,000 lines Account verification accounts 23,000 accounts 24,000 accounts Correspondence letters 1,500 letters 2,000 letters How much of the account verification costs will be assigned to Product B
Answer:
XYZ Company
Account verification costs assigned to Product B are:
= $55,400.
Explanation:
a) Data and Calculations:
Activities Total Costs Activity-cost drivers Activity Rates
Account inquiry $320,000 16,000 hours $20 per hour
Account billing $160,000 3,200,000 lines $0.05 per line
Account verification costs $138,600 60,000 accounts $2.31 per account
Correspondence letters $19,200 4,000 letters $4.80 per letter
Total costs $637,800
Usage by Products
Product A Product B
Account inquiry hours 2,700 hours 1,800 hours
Account billing lines 820,000 lines 630,000 lines
Account verification 23,000 accounts 24,000 accounts
Correspondence letters 1,500 letters 2,000 letters
Costs assigned to Product B
Account inquiry $36,000 (1,800 * $20)
Account billing $31,500 (630,000 * $0.05)
Account verification $55,400 (24,000 * $2.31)
Correspondence letters $9,600 (2,000 * $4.80)
Total costs assigned $132,500
g Find the monthly payment and estimate the remaining balance (to the nearest dollar). Assume interest is on the unpaid balance. 5-year car loan for $9700 at 5%; remaining balance after 4 years.
Answer:
Monthly payment $102.88
Outstanding balance after year 4 $1,201.76
Explanation:
First and foremost, the car loan amount of $9,700 is the present value of all monthly payments for 5 years as shown below:
PV=monthly payment*(1-(1+r)^-n/r
PV=car loan amount=$9,700
monthly payment=unknown
r=monthly interest rate=5%/12=0.004166667
n=number of monthly payments in 5 years=5*12=60
$9700=monthly payment*(1-(1+0.004166667)^-120/0.004166667
$9700=monthly payment*(1-(1.004166667)^-120/0.004166667
$9700=monthly payment*(1-0.607161016 )/0.004166667
$9700=monthly payment*0.392838984 /0.004166667
$9700=monthly payment*94.28134862
monthly payment=$9700/94.28134862
monthly payment=$102.88
The outstanding balance after year 4 is the present value of monthly payments for the remaining 1 year(12 months)
PV=$102.88*(1-(1+0.004166667)^-12/0.004166667
PV=$102.88*(1-(1.004166667)^-12/0.004166667
PV=$102.88*(1-0.951328238 )/0.004166667
PV=$102.88*0.048671762 /0.004166667
PV=$1,201.76
On January 1, Parson Freight Company issues 7.0%, 10-year bonds with a par value of $4,500,000. The bonds pay interest semiannually. The market rate of interest is 8.0% and the bond selling price was $4,194,222. The bond issuance should be recorded as:
Answer: Debit Cash $4,194,222; Debit Discount on bonds payable $305,778; Credit Bonds payable $4,500,000
Explanation:
Based on the information given in the question, the journal entry will be prepared as follows:
Debit Cash $4,194,222
Debit Discount on bonds payable $305,778
Credit Bonds payable $4,500,000
Note that the discount on Bonds Payable was calculated as:
= $4,500,000 - $4,194,222
= $305,778
