Answer:
NPV = $-8,434.17
The firm shouldn't buy the machine
Explanation:
Net present value is the present value of after tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator:
Cash flow in year 0 = $-250,000
Cash flow each year from year 1 to 9 = $50,000 - $11,000 = $39,000
Cash flow in year 10 = $39,000 + $5,000 = $44,000
I = 10%
NPV = $-8,434.17
The NPV 8s negative and this indicates that the investment would be unprofitable. The firm shouldn't invest in the project.
To find the NPV using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
I hope my answer helps you
Analysis reveals that a company had a net increase in cash of $22,750 for the current year. Net cash provided by operating activities was $20,500; net cash used in investing activities was $11,250 and net cash provided by financing activities was $13,500. If the year-end cash balance is $27,750, the beginning cash balance was: Multiple Choice $5,000. $17,750. $50,500. $45,500. $44,500.
Answer:
The correct answer = $5,000
Explanation:
First of all, let us find the difference between the total cash provided and the total cash used up within the period:
Total cash provided = operating activities + financing activities
Total cash provided = 20,500 + 13,500 = $34,000
Total cash used up = investing activities = $11,250
Retained balance from the activities of the period = Total cash provided - Total cash used up
= 34,000 - 11,250 = $22,750
Retained balance from the activities of the period = $22,750
However, we are told that the year-end cash balance = $27,750. This means that the excess cash on the retained balance from operating activities within the period is from the beginning cash balance, and this is calculated as follows:
year-end cash balance = Retained balance from the activities + beginning cash balance
27,750 = 22,750 + beginning cash balance
∴ beginning cash balance = 27,750 - 22,750 = $5,000
∴ beginning cash balance = $5,000
Firm 1 produces output X with a cost function C_1(X)=\frac{X^2}{200}. Firm 2 produces output Y with a cost function C_2(X,Y)=\frac{Y^2}{100}-2X. Both firms face competitive markets. The competitive price of X is 6 and the competitive price of Y is \$ 5. There is no entry or exit into this market. What is the socially optimal production of X?
Answer:
800
Explanation:
The objective here is to determine the socially optimal production of X.
For this to occur ; it is crucial that both firm must merge together.
Therefore; the Profit will be = Total revenue - Total Cost
From the question; the total revenue = 6X + 5Y ; &
The total cost is : [tex]\dfrac{X^2}{200} + \dfrac{Y^2}{100} - 2X[/tex]
Now: The profit = [tex]6X+5Y - \dfrac{X^2}{200}- \dfrac{Y^2}{100}-2X[/tex]
= [tex]8X+5Y - \dfrac{X^2}{200}- \dfrac{Y^2}{100}[/tex]
If the socially optimal production of X is the differential of the equation [tex]8X+5Y - \dfrac{X^2}{200}- \dfrac{Y^2}{100}[/tex]
(X) = [tex]8-\frac{2X}{200} =0[/tex]
= [tex]8-\frac{X}{100} =0[/tex]
= [tex]\dfrac{X}{100}=8[/tex]
= 800
Thus the social optimal production of X = 800
Managers must chart a company's strategic course by Multiple Choice ensuring excess production capacity and/or inventory. building a bigger dealer network. ensuring that marketing and promotion programs are state-of-the-art. developing a thorough understanding of the company's external and internal environments. competing fiercely for a share in the market.
Answer:
The correct answer is the fourth option: developing a thorough understanding of the company's external and internal environments.
Explanation:
To begin with, in order to understand that a company's strategy must be guided by thorough understanding of its external and internal environments it is necessary to understand that the system proposed is formed by several factors that influence it and therefore that a manager must study carefully those factors and that system in order to guide the company to a successful work and accomplish the goals by using a strategy that compresses all the information about those factors.
Galla Inc. needs to determine a price for a new product. Galla desires a 25% markup on the total cost of the product. Galla expects to sell 6420 units. Additional information is as follows: Variable product cost per unit $ 23 Variable administrative cost per unit 25 Total fixed overhead 46,500 Total fixed administrative 30,540 Using the total cost method what price should Galla charge?
Answer:
The price Galla should charge is $75
Explanation:
Solution
Now
The total cost = variable product cost + variable administrative cost + fixed overhead + fixed administrative
= ($23 * 6,420) + ($25 * 6,420) + $46,500 + $30,540
= $147,660 + $160,500 + $46,500 + $30,540
= $385,200
Thus,
The total cost per unit = Total cost / units
= $385,200 / 6,420 units
= $60
Hence
The selling price should charge = Cost per unit * 1.25
= $60 * 1.25
= $75
Which of the following is false? Economists who advocate discretionary monetary policy argue that it is more likely to achieve the desired economic results because the monetary authority has the flexibility to shape the best monetary policy to the existing circumstances. Here is an example of zero crowding out: The government spends $100 more and the private sector doesn’t spend any less. Here is an example of complete crowding out: The government spends $100 more and the private sector spends $100 less. Not all economists believe that rule-based monetary policy is preferable to discretionary monetary policy. none of the above
Answer: None of the above
Explanation:
All of the above are correct.
For option A, Economists who advocate discretionary monetary policy do indeed believe that the monetary authority using this policy is more flexible to shape the best monetary policy to the existing circumstances.
Option B is also correct because Crowding out occurs when the government increases investment by borrowing which leaves less money for the private sector to borrow so they spend less. The government spent money here yet the private sector did not spend less so it is Zero Crowing out.
Option C by option B's explanation holds true because the entire amount the Government increased by was denied the private sector.
Option D is also true as not all Economists prefer rule-based monetary policy to discretionary monetary policy.
They are all true.
Bakers' Town Bread is selling 1,500 shares of stock through a Dutch auction. The bids received are as follows: 200 shares at $17 a share, 400 shares at $15, 700 shares at $14, 400 shares at $13, and 200 shares at $11 a share. How much cash will the company receive from selling these shares of stock?
Answer:
$19,500
Explanation:
A Dutch auction is one of many common Auction types to buy or sell goods. Most generally, it means an auction where the auctioneer starts with a high selling price and decreases it until some buyer accepts the offer or arrives at a fixed reserve price.
Therefore in the given case, the cash received by the company from selling the shares of stock is
= 1,500 shares × $13
= $19,500
The $13 represent the highest bid price
Consider a continuous operation in which raw tomatoes arrive to a processing unit in bulk. The tomatoes arrive at an average steady rate of 75 tons per hour from 8 a.m. to 1 p.m. every day. The processing begins as soon as the tomatoes start arriving, at 8 a.m. However, the processing unit can only process at a steady rate of 25 tons/hr. If need be, the processing unit can process for 24 hours a day. If tomatoes arrive when the processing unit is busy, a queue of inventory will form.
a. How many hours a day does the processing unit operate?
b. What is the maximum inventory of raw tomatoes?
c. What is the capacity utilization of the processing unit?
(Hint: This is equivalent to the fraction of a day the plant operates)
d. How long on average does a tomato stay in the queue?
(Hint: First calculate average inventory and average throughput for the entire time
the processing unit is operating. Then use little’s law to calculate CT.)
Answer:
15250 T62.5%5 hExplanation:
a) The amount of tomatoes that arrive in the 5 hours between 8 a.m. and 1 p.m each day is ...
(75 T/h)(5 h) = 375 T
Processing at the rate of 25 T/h takes ...
(375 T)/(25 T/h) = 15 h
The processing unit must operate 15 hours per day to process the arriving tomatoes.
__
b) The arriving tomatoes are processed at the rate of 25 T/h, so the net addition to inventory from 8 a.m. to 1 p.m. is 75 -25 = 50 T/h. Over those 5 hours, an inventory accumulates in the amount of ...
(50 T/h)(5 h) = 250 T
The maximum inventory of raw tomatoes is 250 tons.
__
c) The processing unit operates 15 hours of each 24-hour day, so is operating at 15/24 = 5/8 = 62.5% of capacity.
The capacity utilization of the processing unit is 62.5%.
__
d) Inventory both increases and decreases linearly, so the average inventory is half the peak inventory. Average inventory is 250/2 = 125 tons. This is processed at the rate of 25 T/h, so the amount of time the average tomato spends in inventory is ...
(125 T)/(25 T/h) = 5 h
The average tomato stays in the queue 5 hours.
c. Assume that neither country experiences population growth or technological progress and that 6 percent of capital depreciates each year. Assume further that country A saves 15 percent of output each year and country B saves 23 percent of output each year. Using your answer from part b and the steady-state condition that investment equals depreciation, find the steady-state level of capital per worker (k∗) , income per worker (y∗) , and consumption per worker (c∗) for each country.
Answer:
Check Explanation.
Explanation:
Note that the production function of bother country = Y=F(K,L) = K L c : k^1/2 L^1/2.
Thus Y/L = b; b = k^1/2 L^1/2/ L.
b = k^1/2.
From the question we are given that L = 6% = 0.06.
Country A saves 15% = 15/100 = 0.15 and country B saves 23% = 23/100 = 0.23.
For country A,
(a). the steady state;
∆k = 0 = y - dk.
0 = 0.15 × k^1/2 - 0.06k.
K^1/2 = 2.5, k* = 6.25
(b). y = K^1/2 = (6.25)^1/2.
y* = 2.5
(c). C = 2.5 - (0.15 × 2.5) = 2.5 - 0.375.
C* = 2.125.
Then, for COUNTRY B.
(a). ∆k = 0 = y - dk.
0 = 0.25 × k^1/2 - 0.06k.
K^1/2 = 4.167, k* = 17.36
(b). y = K^1/2 = (17.36)^1/2.
y* = 4.167.
(c). C = 4.167 - (0.25 × 4.167) = 2.5 - 0.375.
C* = 3.127.
C* = 2.125.
Salyers Family Inn is a bed and breakfast establishment in a converted 100 year-old mansion. The Inn's guests appreciate its gourmet breakfasts and individually decorated rooms. The Inn's overhead budget for the most recent month appears below: Activity Level 57 guests Variable overhead costs Supplies $148.20 Laundry 216.60 Fixed Overhead costs Utilities 170.00 Salaries and wages 4,310.00 Depreciation 2,340.00 Total Overhead Cost $7,184.80 The Inn's variable overhead costs are driven by the number of guests. What would be the total budgeted overhead cost for a month if the activity level is 53 guests. Group of answer choices $6,680.60 $26,154.40 $7,159.20 $7,184.80
Answer:
The budgeted overhead= $7,159.2
Explanation:
The budgeted Overhead cost can be determined as follow
The budgeted overhead= Fixed cost + variable cost
Fixed overhead cost = 170.00 + 4,310.00 + 2,340.00 = 6820
Variable cost per activity = ( 148.20 + 216.60)/57 = 6.4 per guest.
The budgeted cost equation = 6820 + 6.4 x
Where X represent the number of guest
The budgeted overhead = 6820 + (6.4 × 53)= $7,159.2
The budgeted overhead= $7,159.2
Using the following accounts and an overhead rate of 140% of direct labor cost, compute the amount of applied overhead. Work in Process Inventory Beginning WIP 35,100 Direct materials 57,200 Direct labor ? Factory Overhead ? To Finished Goods 213,300 Ending WIP 25,100 Finished Goods Inventory Beginning FG 5,100 Cost of Goods Mfg'd 213,300
Answer:
$85,225
Explanation:
The computation of the applied overhead is shown below:
Let us assume that the Direct labor be X
And, the factory overhead be 1.4X
As we know that
Cost of goods manufactured = Beginning work in process + direct material + direct labor + factory overhead - ending work in process
$213,300 = $35,100 + $57,200 + X + 1.4X - $25,100
$213,300 = $67,200 + 2.4X
$146,100 = 2.4X
X = $60,875
And, the factory overhead is
= $60,875 × 1.4
= $85,225
hence, the applied overhead is $85,225
The requirement that certain professionals possess a license in order to work in a particular market has the effect of reducing the supply of those services, which in turn causes _________.
O price and the profits of firms in the market to increase.
O price to decrease and the profits of firms in the market to increase.
O price to increase and the profits of firms in the market to decrease.
O price and the profits of firms in the market to decrease.
Answer:
C
Explanation:
The correct option is C :price to increase and the profits of firms in the market to decrease
This can be explained by the fact that, since it always been mandatory to possess a license in order to work in a particular market. This certainly reduces the competition in the market and thus, the prices would increase; therefore, as the firms have to pay for licence thus would reduce the profits of firm.
Scenario 28-1 Suppose that the Bureau of Labor Statistics reports that the entire adult population of Mankiwland can be categorized as follows: 25 million people employed, 3 million people unemployed, 1 million discouraged workers, and 1 million people who are either students, homemakers, retirees, or other people not seeking employment. Refer to Scenario 28-1. What is the unemployment rate?
Answer:
10.7%
Explanation:
Solution:
Recall that:
The Reports from Bureau of labor statistics is shown as follows:
Employed people = 25 million
Unemployed people = 3 million
Discouraged workers = 1 million
Workers or Homemakers or retirees, or students = 1 million
The next step from this scenario is to find out the unemployment rate
Now,
The rate of unemployed = (unemployed x 100 ) / labor force
= 300/28
=10.7%
Balser Corporation manufactures and sells a number of products, including a product called JYMP. Results for last year for the manufacture and sale of JYMPs are as follows: Sales $ 960,000 Less expenses: Variable production costs $ 464,000 Sales commissions 144,000 Salary of product manager 100,000 Fixed product advertising 160,000 Fixed manufacturing overhead 132,000 1,000,000 Net operating loss $ (40,000 ) Balser is trying to decide whether to discontinue the manufacture and sale of JYMPs. All expenses other than fixed manufacturing overhead are avoidable if the product is dropped. None of the fixed manufacturing overhead is avoidable. Assume that dropping Product JYMP would result in a $90,000 increase in the contribution margin of other products. If Balser chooses to discontinue JYMP, the annual financial advantage (disadvantage) of eliminating this product should be:
Answer:
$2,000 disadvantage
Explanation:
The computation of the annual financial advantage or disadvantage of eliminating the product is shown below:
Sales $960,000
Less Variable production costs ($464,000)
Less Sales commission ($144,000)
Less salary of product manager ($100,000)
Less fixed product advertising ($160,000.00)
Less contribution margin from other products ($90,000)
Income from JYMP 2,000.00
This is the financial disadvantage for eliminating the product of $2,000 so the company should continue to manufactured the JYMP
And the fixed cost is not considered here as it is not relevant because it has fixed in nature does not have create any impact whether company should manufactured the product or not
Contribution Margin Variance, Contribution Margin Volume Variance, Market Share Variance, Market Size Variance Sulert, Inc., produces and sells gel-filled ice packs. Sulert’s performance report for April follows: Actual Budgeted Units sold 290,000 300,000 Sales $1,450,000 $1,515,000 Variable costs 652,500 636,300 Contribution margin $ 797,500 $ 878,700 Market size (in units) 1,250,000 1,200,000 Required: 1. Calculate the contribution margin variance and the contribution margin volume variance. In your computations, round the contribution margin per unit to three decimal places. Contribution margin variance $ Unfavorable Contribution margin volume variance $ Unfavorable 2. Calculate the market share variance and the market size variance. In your computations, round the unit contribution margin to three decimal places and round the market share percentage to one decimal place (for example, .8439 would be rounded to 84.4%). Round your final answers to the nearest dollar. (CMA adapted) Market share variance $ Unfavorable Market size variance $ Favorable
Answer:
1. Market share variance= $65,903(Unfavorable)
2. Market size variance= $36,613(favourable)
Check attachment for the table
The following information was drawn from the balance sheets of the Kansas and Montana companies: Kansas Montana Current assets $ 59,000 $ 78,000 Current liabilities 40,000 43,000 Required a. Compute the current ratio for each company. b. Which company has the greater likelihood of being able to pay its bills? c. Assume that both companies have the same amount of total assets. Speculate as to which company would produce the higher return-on-assets ratio.
Answer:
a) Current ratio for Kansas company is 1.475
Current ratio for Montana company is 1.814
b) Since the current ratio for the Montana company is more than that of the Kansas company which shows better liquidity, the Montana company has the greater likelihood of being able to pay its bills.
c) Kansas company would produce the higher return-on-assets ratio.
Explanation:
Current Assets Current liabilities
Kansas Company $ 59,000 $ 40,000
Montana Company $ 78,000 $ 43,000
a) To calculate the current ratio of A company
Current ratio = [tex]\frac{Current Assets}{Current Liabilities}[/tex]
Therefore current ratio for Kansas company = $ 59,000 ÷ $ 40,000 = 1.475
Current ratio for Montana company = $ 78,000 ÷ $ 43,000 = 1.814
Here are the comparative income statements of Cullumber Corporation. CULLUMBER CORPORATION Comparative Income Statement For the Years Ended December 31 2022 2021 Net sales $639,400 $578,200 Cost of goods sold 464,800 433,400 Gross Profit 174,600 144,800 Operating expenses 70,500 43,000 Net income $ 104,100 $ 101,800 (a) Prepare a horizontal analysis of the income statement data for Cullumber Corporation, using 2021 as a base. (If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000), (20%). Round percentages to 1 decimal place, e.g. 12.1%.)
Answer:
Explanation:
Horizontal analysis of financial statements is a system of comparing each item of financial statement in a previous year to the current year with each line item analysis expressed in a horizontal pattern for clear comparison.
The change in growth is calculated by deducting the previous year's value of an item of the financial statement from the current year while the percentage growth is calculated by calculating the growth value as a percentage of the previous year value
2022 2021 Change % Change
Net sales 639,400 578,200 61,200 10.6%
Cost of goods 464,800 433400 31,400 7.3%
Gross profit 174,600 144,800 29,800 20.6%
Operating exp. 70,500 43,000 27,500 70%
Net Income 104,100 101,800 2,300 2.26%
Bob, Kara, and Mark are partners in the BKM Partnership. Bob is a 40% partner and has a June 30 tax yearminus−end. Kara owns a 40% interest in the partnership and has a September 30 tax yearminus−end, and Mark owns the remaining 20% interest and has an October 31 tax yearminus−end. The partnership does not have a natural business year. What is the required tax yearminus−end for the partnership (if no Sec. 444 election is made)? A. September 30 B. October 31 C. December 31 D. June 30
Answer:
D. June 30
Explanation:
Since no Sec. 444 election is made, the required tax yearmius-end for the partnership will be the tax yearminus−end of a partner with at least 40% interest.
Since Bob is a 40% partner and has a June 30 tax yearminus−end, therefore, the required tax yearminus−end for the partnership is June 30.
Gross Corporation adopted the dollar-value LIFO method of inventory valuation on December 31, 2019. Its inventory at that date was $1,100,000 and the relevant price index was 100. Information regarding inventory for subsequent years is as follows: Inventory at Current Date Current Prices Price Index December 31, 2020 $1,284,000 1.07 December 31, 2021 1,450,000 1.25 December 31, 2022 1,625,000 1.30 What is the cost of the ending inventory at December 31, 2020 under dollar-value LIFO?
Answer:
$1,281,200
Explanation:
Gross Corporation
Ending inventory
2019 1100000
2020 1284000/1.07 = 1200000
Ending Inventory(1100000+100000*1.07) = 1207000
2021 1450000/1.25 = 1160000
Ending inventory(1100000+60000*1.07) = 1164200
2022 1625000/1.30 = 1250000
Ending inventory(1164200+90000*1.30) = $1281200
Therefore the cost of the ending inventory at December 31, 2020 under dollar-value LIFO will be $1,281,200
Great Adventures Problem
[The following information applies to the questions displayed below.]
Tony and Suzie see the need for a rugged all-terrain vehicle to transport participants and supplies. They decide to purchase a used Suburban on July 1, 2022, for $15,600. They expect to use the Suburban for five years and then sell the vehicle for $6,300. The following expenditures related to the vehicle were also made on July 1, 2022:_________.
1. The company pays $2,700 to GEICO for a one-year insurance policy.
2. The company spends an extra $6,600 to repaint the vehicle, placing the Great Adventures logo on the front hood, back, and both sides. An additional $2,900 is spent on a deluxe roof rack and a trailer hitch.
3. The painting, roof rack, and hitch are all expected to increase the future benefits of the vehicle for Great Adventures. In addition, on October 22, 2022, the company pays $2,200 for basic vehicle maintenance related to changing the oil, replacing the windshield wipers, rotating the tires, and inserting a new air filter.
Great Adventures
4. Record the depreciation expense and any other adjustments related to the vehicle on December 31, 2022. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Answer and Explanation:
The Journal entry is shown below:-
Amount should be capitalized for new vehicle = Cost + Painting and new logo cost + Deluxe Roof rack and trailer hitch
= $15,600 + $6,600 + $2,900
= $25,100
We took the cost of painting and deluxe roof and trailer hitch costs into account as they are supposed to increase the vehicle's future benefits.
Depreciation = (Cost - Salvage Value) ÷ Number of Years
= ($25,100 - $6,300) ÷ 5
= $3,760 per year
In the year 2022 vehicle is used only for 6 months (July to Dec), depreciation expense for the year ended December 31, 2022 is
= $3,760 × 6 ÷ 12
= $1,880
So, the Journal entry is
Depreciation expense Dr, $1,880
To Accumulated Depreciation $1,880
(Being depreciation provided for the year 2022 is recorded)
Therefore for recording the depreciation provided for the year 2022 we simply debited the depreciation expenses while we credited the accumulated depreciation.
The journal entry will include a depreciation account as well as accumulated depreciation.
What is depreciation?Depreciation can be defined as the amount deducted from the asset because of the wear and tear of the asset after its use Which will reduce the price of the asset.
Capitalization for a new car should be calculated as follows: Cost + Painting and Logo Cost + Deluxe Roof Rack and Trailer Hitch
= $15,600 + $6,600 + $2,900
= $25,100
We factored in the price of the painting, a luxurious roof, and a trailer hitch because such expenses should raise the car's potential future value.
Depreciation is calculated as (Cost - Salvage Value) x Years.
= ($25,100 - $6,300) ÷ 5
= $3,760 annually
For the year ending December 31, 2022, the depreciation expense for the automobile operated for only 6 months (July to December) is
= $3,760 × 6 ÷ 12
= $1,880
The journal entry is therefore
depreciation costs (dr.) $1,880
accumulated depreciation $1,880
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On December 12, 2021, an investment in equity securities costing $77,000 was sold for $94,000. The total of the sale proceeds was credited to the investment in equity securities account. Required: 1. Prepare the journal entry to correct the error, assuming it is discovered before the books are adjusted or closed in 2021. (Ignore income taxes.) 2. Prepare the journal entry to correct the error assuming it is not discovered until early 2022. (Ignore income taxes.)
Answer:
1.
Dr. Investment Account $17,000
Cr. Gain on Sale $17,000
2.
Dr. retained Earning $17,000
Cr. Gain on Sale $17,000
Explanation:
1.
If an assets is sold more than the book value, then there is a gain on the sales of asset.
Gain on Sale = Sales Proceeds - Book value of Investment = $94,000 - $77,000 = $17,000
As sales proceeds of $94,000 are credited in the Investment account, which needs to be credited by $77,000 only. The excessive amount of $17,000 should be recorded in the Gain on sale account.
2.
Error is not discovered until 2022 and earning for 2021 was transferred to retained earning. So, adjustment should me made in the retained earnings to eliminate the effect.
Cawley Company makes three models of tasers. Information on the three products is given below.Tingler Shocker Stunner Sales $296,000 $504,000 $200,000 Variable expenses 145,000 190,000 135,000 Contribution margin 151,000 314,000 65,000 Fixed expenses 114,840 225,160 92,000 Net income $36,160 $88,840 $(27,000) Fixed expenses consist of $290,000 of common costs allocated to the three products based on relative sales, as well as direct fixed expenses unique to each model of $29,000 (Tingler), $79,000 (Shocker), and $34,000 (Stunner). The common costs will be incurred regardless of how many models are produced. The direct fixed expenses would be eliminated if that model is phased out.James Watt, an executive with the company, feels the Stunner line should be discontinued to increase the company’s net income.
(a) Compute current net income for Cawley Company. Net income $ ______
(b) Compute net income by product line and in total for Cawley Company if the company discontinues the Stunner product line. (Hint: Allocate the $290,000 common costs to the two remaining product lines based on their relative sales.)
Tingler Net Income $ _______
Shocker Net Income $ _______
Total Net Income $ _______
(c) Should Cawley eliminate the Stunner product line?
Why or why not?
Net income would _____ from $ ______to $ ________.
Answer:
Cawley Company
a) Current Net Income
Tingler Shocker Stunner Total
Sales $296,000 $504,000 $200,000 $1,000,000
Variable Costs 145,000 190,000 135,000 470,000
Contribution 151,000 314,000 65,000 530,000
Fixed Expenses 114,840 225,160 92,000 432,000
Net Income 36,160 88,840 (27,000) 98,000
b) Net Income by product line with Stunner discontinued:
Tingler Shocker Total
Sales $296,000 $504,000 $800,000
Variable Costs 145,000 190,000 335,000
Contribution 151,000 314,000 465,000
Fixed Expenses 136,300 261,700 398,000
Net Income 14,700 52,300 67,000
c1) Cawley should not eliminate the Stunner product line.
c2) Net income would decrease from $98,000 to $67,000 if the Stunner product line is eliminated.
Explanation:
a) The decision to be made is whether to eliminate a product line or not. In making such decisions, the relevant costs to be considered are avoidable costs. Allocated fixed costs are unavoidable and should not be taken into account.
b) Stunner makes a Net Income of $31,000 without the allocated common fixed expenses. This shows that the allocated common fixed expenses is actually causing Stunner to record Net Loss. And when Stunner is eliminated the company is not better off.
c) Allocation of Fixed Expenses based on Sales:
Tingler = 296/800 * $290,000 = $107,300 Plus direct cost of $29,000 = $136,300
Shocker = 504/800 * $290,000 = $182,700 Plus direct of of $79,000 = $261,700
On January 1, Gemstone Company obtained a $165,000, 10-year, 7% installment note from Guarantee Bank. Thenote requires annual payments of $23,492, with the first payment occurring on the last day of the fiscal year. The firstpayment consists of interest of $11,550 and principal repayment of $11,942. The journal entry to record the issuance of the installment note for cash on January 1 would include a:_____
Answer:
Credit to notes payable for $165000
Explanation:
Journal entries for issuance of Note Payable :
Cash Account ..... Debit $165000
7% Note payable Accounts .... Credit $165000
Note:
Note payable is a liability so it is credited as on date of issuance.
Consider the following estimates from the early 2010s of shares of income to each group. Country Poorest 40% Next 30% Richest 30% Bolivia 10 25 65 Chile 10 20 70 Uruguay 20 30 50 1.) Using the 4-point curved line drawing tool, plot the Lorenz curve for Bolivia. Properly label your curve. 2.) Using the 4-point curved line drawing tool, plot the Lorenz curve for Uruguay. Properly label your curve. Carefully follow the instructions above, and only draw the required objects. Which country has the most nearly equal income distribution? ▼ Chile Uruguay Bolivia .
Answer:
Check the explanation
Explanation:
Kindly check the attached images below to see the step by step explanation to the question above.
The area manager of the Red, White, and Brew Restaurants is considering two possible expansion alternatives. The required investments, expected controllable margins, and the ROIs of each are as follows:
Project Investment Controllable Margin ROI
Phoenix $120,000 $30,000 25%
Chicago $540,000 $50,000 9.25%
The Red, White, and Brew segment has currently $2,000,000 in invested capital and a controllable margin of $250,000.
1. Which one of following projects will increase the Red, White, and Brew division’s ROI?
O Both the Phoenix and Chicago optionsO Only the Phoenix optionO Only the Chicago optionO Neither the Phoenix nor the Chicago options
Answer:
Only the Phoenix
Explanation:
According to the scenario, computation of the given data are as follow:-
ROI of Red, White And Brew Segment = Controllable Margin ÷ Total Investment × 100
$250,000 ÷ $2,000,000 × 100 = 12.5%
ROI of Phoenix = 25%
ROI of Chicago = 9.25%
So only phoenix will increase the red, white and brew division’s ROI, Because Chicago ROI is less than ROI of Red, White and Brew Segment.
Absorption and variable costing. (CMA) Miami, Inc., planned and actually manufactured 250,000 units of its single product in 2017, its first year of operation. Variable manufacturing cost was $19 per unit produced. Variable operating (nonmanufacturing) cost was $13 per unit sold. Planned and actual fixed manufacturing costs were $750,000. Planned and actual fixed operating (nonmanufacturing) costs totaled $420,000. Miami sold 170,000 units of product at $41 per unit.
Required:
1. Miami's 2017 operating income using absorption costing is:
(a) $ 600,000
(b) $ 360,000
(c) $ 780,000
(d) $ 1,020,000
(e) None of above
2. Miami's 2017 operating income using variable costing is:(a) $ 1,100,000(b) $ 600,000(c) $ 360,000(d) $ 780,000(e) None of above
Answer:
1.(b) $ 360,000
2. (c) $ 360,000
Explanation:
Miami, Inc.
Absorption Costing
Income Statement
Sales 170,000 units * $41 $ 6970,000
Variable manufacturing cost $19 *170,000 units = 3230,000
Actual fixed manufacturing costs $750,000
Contribution Margin $ 2990,000
Variable operating (non manufacturing) cost $13 *170,000 units =2210,000
Actual fixed operating (non manufacturing) costs $420,000
Operating Income $ 360,000
The difference b/w variable and absorption costing is that in variable costing the variable expenses are treated as product costs and fixed expenses as period costs. But in absorption costing the manufacturing expenses variable and fixed are treated as product costs and selling and administrative expenses both fixed and variable are treated as period costs.
Miami, Inc.
Variable Costing
Income Statement
Sales 170,000 units * $41 $ 6970,000
Variable manufacturing cost $19 *170,000 units = 3230,000
Variable operating (non manufacturing) cost $13 *170,000 units =2210,000
Contribution Margin $1530,000
Actual fixed manufacturing costs $750,000
Actual fixed operating (non manufacturing) costs $420,000
Operating Income $ 360,000
Rebel Sound Inc. produced 30,000 audio devices last month. Rebel started the month with $10,000 worth of inventory in Finished Goods. The company incurred $15,000 of various utility and rent charges on their factory, paid $50,000 for raw materials to use in production, and paid employees $60,000 in wages.
During the month, inventory costing $120,000 was completed and transferred to the Finished Goods Inventory. At the end of the month, Rebel had $5,000 of Inventory in Finished Goods, $6,000 in Materials Inventory, and $24,000 still in Work in Process.
Required:
1. What was Rebel Sound Inc Cost of Goods Manufactured for the month?
Answer:
Cost of goods manufactured is $ 101,000 for the month
Explanation:
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Cost of Goods Manufactured:
$
Work in process inventory, beginning $ -
Direct materials:
Direct Material Used $ 60,000
Direct labor $ 15,000
Factory overhead Applied $ 50,000
Total manufacturing costs $125,000
Total work in process during period $125,000
Work in process inventory, ending $ -24,000
Cost of goods manufactured $ 101,000
Now consider the case in which the manufacturer offers a marginal unit quantity discount for the plywood. The first 20,000 square feet of any order are sold at $1 per square foot, the next 20,000 square feet are sold at $0.98 per square foot, and any quantity larger than 40,000 square feet is sold for $0.96 per square foot. What is the optimal lot size for Prefab given this pricing structure? How much cycle inven
Answer:
Explanation:
We can use the following method to solve the given problem
We are given following
Annual demand,
D = 20000*12
D = 240,000 sqft
Fixed order cost, is given as
S = $ 400
Considering the unit cost, is given as
C = $ 1
Holding cost, H = 1*20% = $ 0.2
EOQ = sqrt(2DS/H)
= √(2*240000*400/0.2)
= 30,984 sq ft
This is higher than 20,000 and less than 40,000 sq ft. For this reason, the applicable price for this quantity is $ 0.98
For C = $ 0.98, holding cost, H = 0.98*20% = $ 0.196
Revised EOQ = sqrt(2*240000*400/0.196) = 31,298 sq ft
Total annual cost of EOQ policy = D*C + H*Q/2 + S*D/Q
= 240000*0.98 + 0.196*31298/2 + 400*240000/31298
= $ 241,334.5
Now consider the next level of price, C = $ 0.96
Holding cost, H = 0.96*20% = $ 0.192
EOQ = sqrt(2*240000*400/0.192)
= 31633 sqft
This amount is will not be feasible for this price, because it requires a minimum order of 40000 sqft.
Therefore, Q = 40,000
Total annual cost = 240000*0.96 + 0.192*40000/2 + 400*240000/40000
Total annual cost = $ 236,640
Total annual cost is lowest for order quantity of 40,000 sq ft.
1) Optimal lot size = 40,000 sq ft.
2) the annual cost of this policy
= $ 236,640
3) the cycle inventory of plywood at Prefab = Q/2 = 40000/2
At prefeb= 20,000 sq ft
4) let's assume the manufacturer sells all plywood at $ 0.96, then
Holding cost, H = 0.96*20%
H= $ 0.192
EOQ = sqrt(2*240000*400/0.192)
EOQ = 31633 sqft
Total annual cost = 240000*0.96 + 0.192*31633/2 + 400*240000/31633
Total annual cost = $ 236,471.6
Difference in total annual cost = 236640 - 236471.6 = $ 168.4
Breckenridge Ski and Snow Board Rental Co. charges 67 for a one day rental. At that price they average renting 159 sets of apparatus. Their yield management consultant recommended they lower their price to 56. At that price the consultant expects their average daily rental will be 205 sets of apparatus. At those prices and demand, what elasticity of demand can be expected? (Solve to two decimal places.)
Answer:
Price elasticity of demand = 1.76
Explanation:
Price elasticity of demand (PED) is the degree of responsiveness of demand to a change in price.
Where a percentage change in price produces a more than a proportional change in quantity, we say the product is price elastic. On the other hand, where a change in price produces a less than a proportional change in quantity demand, then demand is price inelastic
PED is computed as follows:
PED = % change in quantity /% change in Price
% change in demand = (56- 67)/67 × 100 = 28.93081761
% change in price =16.41791045
PED = 28.93/16.4179 = 1.762
Price elasticity of demand = 1.76
At the market price of $8, the quantity demanded is nothing units, and quantity supplied is nothing units. At this price, ▼ a surplus a shortage an equilibrium exists. At a market price of $4, ▼ an equilibrium a surplus a shortage now exists. The market equilibrium exists at a price of $ nothing. In equilibrium, the quantity demanded by consumers is ▼ greater than equal to less than to the quantity supplied by producers.
Answer:
The answer is explained in the explanation section below
Explanation:
Solution
(1)At the market price of $8, the Demanded Quantity is 20 units per week , and the Quantity Supplied is 60 units.
(2) At this price Surplus exists.
Economic Surplus is a is a situation in which the quantity supplied is higher than the quantity demanded. This situation is also referred to as excess supply.
(3) At price $4 there is an exist shortage
At price $4 The quantity Supplied is 20 units and the Quantity Demanded is 60 units respectively. hence, at price $4 Demand is higher/greater than Supply.
(4) At a price of $6 per unit, the market equilibrium exists
Market equilibrium is a situation when the Quantity Demanded of a commodity by the consumer is the same to the respective Quantity Supplied of that commodity by the producers.
(5) )Quantity Demanded by the consumers is equal to the quantity supplied by the producers. In the equilibrium
At price $4 per unit , the quantity supplied by the producers is equal to 40 units and the quantity demanded by the consumers is equal to 40 units Thus the supplied quantity is equal to the demanded quantity this point.
Assume the following: WIP, beginning 2 comma 500 units (100% complete as to direct materials, 50% complete as to conversion costs) Started 10 comma 500 units during the period Total spoilage is 700 with normal spoilage is calculated to be 550 units Completed and transferred out during the period 6 comma 000 units WIP, ending 6 comma 300 units (100% complete as to direct materials, 60% complete as to conversion costs) Spoiled units 700 and inspection happens when the process is 20% complete All materials are added at the start of the process Under the weighted average method, would would be the equivalent units of work done for the period? A. 9 comma 920 B. 10 comma 190 C. 6 comma 000 D. 6 comma 300
Answer:
B. 10 comma 190
Or none of the given
Explanation:
Particulars Units % of Completion Equivalent Units
Materials Conversion Materials Conversion
Transferred 6000 100 100 6000 6000
+Ending WIP 6300 100 60 6300 3780
+Normal Spoilage 550 100 60 550 330
+Abnormal
Spoilage 150 100 60 150 90
Total 13000 10200
As we see the total weighted Equivalent units for materials are 13000
and for conversion are 10200 . So the correct choice would be 10190 that is choice B which the nearest answer of the choices given to the answer calculated .
Under weighted method the Transferred out units are added to the ending work in process and the normal and abnormal spoilage is also added to find the equivalent units of production.
The other answer would be none of the given choices if exact figures are to be matched.
