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.)

Answers

Answer 1

Answer:

15250 T62.5%5 h

Explanation:

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.


Related Questions

At December 31, the unadjusted trial balance of H&R Tacks reports Software of $34,500 and and zero balances in Accumulated Amortization and Amortization Expense. Amortization for the period is estimated to be $6,900. Prepare the adjusting journal entry on December 31. Prepare the T-accounts for each account, enter the unadjusted balances, post the adjusting journal entry, and report the adjusted balance.

Answers

Answer:

Dr amortization expense  $6,900

Cr Accumulated amortization       $6,900

Explanation:

The adjusting journal on 31  December is to reflect the amortization charge of $6,900 in both accumulated amortization and amortization expense accounts.

Find attached t-accounts,note that amortization expense account would not have a closing balance as the amount of amortization is written to income statement

A company's income statement showed the following: net income, $117,000; depreciation expense, $31,500; and gain on sale of plant assets, $5,500. An examination of the company's current assets and current liabilities showed the following changes as a result of operating activities: accounts receivable decreased $9,700; merchandise inventory increased $19,500; prepaid expenses increased $6,500; accounts payable increased $3,700. Calculate the net cash provided or used by operating activities. Multiple Choice $143,400. $141,400. $148,200. $130,400. $169,400.

Answers

Answer:

$130,400

Explanation:

The computation of net cash provided or used by operating activities is shown below:-

Net cash provided or used by operating activities

Net income                                   $117,000

Depreciation expense                  $31,500

Gain on sale of plant assets           ($5,500)

Accounts receivable decreased     $9,700

Increase inventory                           ($19,500)

Prepaid expenses increased          ($6,500)

Increase account payable                $3,700

Net cash flow from

operating activities                          $130,400

Therefore the Net cash flow from operating activities is $130,400

Exercise 8-14 Inventory cost flow methods; perpetual system [LO8-1, 8-4] Altira Corporation uses a perpetual inventory system. The following transactions affected its merchandise inventory during the month of August 2018: Aug.1 Inventory on hand—2,100 units; cost $6.20 each. 8 Purchased 10,500 units for $5.60 each. 14 Sold 8,400 units for $12.10 each. 18 Purchased 6,300 units for $5.40 each. 25 Sold 7,400 units for $11.10 each. 31 Inventory on hand—3,100 units. Exercise 8-14 Part 1 Required: 1. Determine the inventory balance Altira would report in its August 31, 2018, balance sheet and the cost of goods sold it would report in its August 2018 income statement using the FIFO method. (Round "Cost per Unit" to 2 decimal places.)

Answers

Answer:

a. The inventory balance Altira would report in its August 31, 2018, balance sheet is $16,740.

b. Cost of good sold = $89,100

Explanation:

a. Determine the inventory balance Altira would report in its August 31, 2018, balance sheet

Based on FIFO method, we have:

Inventory 8,400 sold on Aug. 14 = 2,100 units from Aug. 1 beginning balance+ 6,300 units from Aug. 8 Purchases

Aug. 8 purchases balance after the Agug 14. sales = 10,500 - 6,300 = 4,200 units

Inventory 7,400 sold on Aug. 25 = 4,200 from Aug. 8 balance+ 3,200 from Aug. 18 Purchases

Aug. 18 purchases balance after the Agug 25. sales = 6,300 - 3,200 = 3,100 units

Value of closing inventory = 3,100 * 5.40 = $16,740

Therefore, the inventory balance Altira would report in its August 31, 2018, balance sheet is $16,740.

b. Determine the cost of goods sold it would report in its August 2018 income statement using the FIFO method.

Beginning inventory value = 2,100 * 6.20 = $13,020

Value of purchases = (10,500 * $5.60) + (6,300 * $5.40) = $92,820

Value of closing inventory = $16,740

Cost of good sold = $13,020 + $92,820 - $16,740 = $89,100

Red Co. acquired 100% of Green, Inc. on January 1, 2017. On that date, Green had land with a book value of $42,000 and a fair value of $52,000. Also, on the date of acquisition, Green had a building with a book value of $200,000 and a fair value of $390,000. Green had equipment with a book value of $350,000 and a fair value of $280,000. The building had a 10-year remaining useful life and the equipment had a 5-year remaining useful life. In Red’s December 31, 2017 consolidated worksheet, what total amount of excess fair over book value amortization expense adjustments should Red recognize resulting from its 100% acquisition of Green?

Answers

Answer:

$5,000

Explanation:

The computation of total amount of excess fair over book value amortization expense adjustments to be recognized by red is shown below:-

Excess of fair value over book value =  Land fair value - Land book value

= $52,000 -$42,000

= -$10,000

Here land is not amortized

Excess of fair value over book value = Building fair value - Building book value

= $390,000 - $200,000

= $190,000

Excess fair value over book value amortization expense adjustments to be recognized by red = Excess of fair value over book value of building ÷ Number of Years

= $190,000 ÷ 10

= $19,000

Excess of fair value over book value = Equipment fair value - Equipment book value

= $280,000 - $350,000

= ($70,000)

Excess fair value over book value amortization expense adjustments to be recognized by red for equipment = Excess of fair value over book value of equipment ÷ Number of Years

= ($70,000) ÷ 5

= ($14,000)

Total amount of excess fair over book value amortization expense adjustments to be recognized by red

= $19,000 - $14,000

= $5,000

On April 1, a company purchased two units of inventory, A and B. The cost of unit A was $640, and the cost of unit B was $550. On April 30, the company had not sold the inventory. The net realizable value of unit A was now $660 while the net realizable value of unit B was $480. The adjustment associated with the lower of cost and net realizable value on April 30 will be:

Answers

Answer: b

Explanation:

EHW Office Supplies, Inc. uses the perpetual inventory system. On September 4, 2019,EHW sold merchandise inventory on account at a price of $50,000 with payment terms of 1/10, n/30. The merchandise cost EHW $40,000. On September 12, 2019, the customer pays the proper amount due for the merchandise based on the credit terms. How much will be credited to Accounts Receivable when recording the collection

Answers

Answer:

$50,000

Explanation:

The cash payment was made within the discount period of 10 days,hence the amount received in respect of the sales on account is face value minus discount of 1%.

When sales was made EHW would have debited accounts receivable with $50,000 and credited same to sale revenue.

Cash received=$50,000*(1-1%)=$49,500

discount =$50,000-$49,500=$500

The appropriate entries for cash collection:

Dr cash    $49,500

Dr discount allowed  $500

Cr accounts receivable    $50,000

The largest national herbal supplement store is running a sale on its excess supply of Vitamin C supplements. With this new price change what do you think will happen to the Vitamin C supplement market? a. There will be a shift if the demand curve as demand increases. b. There will be an increase only in the quantity demanded. c. There will be a decrease in the quantity demanded. d. There will be a shift in the supply curve as supply increases.

Answers

Answer:

 b. There will be an increase only in the quantity demanded.

Explanation:

The law of demand states that the higher the price, the lower the quantity demanded and the lower the price, the higher the quantity demanded.

So if there's a sale, vitamin c would become cheaper and the quantity demanded would increase. This would lead to a movement along the demand curve and not a shift.

I hope my answer helps you

Kevin, Rajiv, and Yakov are hunters who live next to a recreational wildlife game area that is open to hunting; in other words, anyone is free to use the recreational wildlife game area for hunting. Assume that these men are the only three hunters who hunt in this recreational wildlife game area and that the recreational wildlife game area is large enough for all three hunters to hunt intensively at the same time.

Each year, the hunters choose independently how often to hunt; specifically, they choose whether to hunt intensively (that is, to set several traps and hunt long hours, which hurts the sustainability of the recreational wildlife game area if enough people do it) or to hunt nonintensively (which does not hurt the sustainability of the recreational wildlife game area). None of them has the ability to control how much the others hunt, and each hunter cares only about his own profitability and not the state of the recreational wildlife game area.

Assume that as long as no more than one hunter hunts intensively, there are enough animals to restock the recreational wildlife game area. However, if two or more hunt intensively, the recreational wildlife game area will become useless in the future. Of course, hunting intensively earns a hunter more money and greater profit because he can sell more animals.

The recreational wildlife game area is an example of _____________ because the animals in the recreational wildlife game area are ________ and ___________.

Answers

Answer: Common resource ,

              Non excludable and Rival in consumption

Explanation:

Common resource is defined as the resource that is usually available to people in open form and people tend to overuse it.This creates shortage of resource and brings scarcity.They are considered rival in nature.Any good is considered rival if consumption of good by one person reduces consumption of that good for another person. It is regarded as subtractable.Non-excludable good is defined as the good that does not stop other people or group of people to consume or use it.There is no certain restriction of using particular good.

According to the questions scenario, recreational wildlife game area is common resource because Yakov, Rajiv and Kevin are using that area for hunting openly .Other hunters can also use the area for hunting as it is available commonly for everyone as per their needs.

Animal of wildlife game area can be considered rival and non-excludable in consumption because they are openly available for hunter and there is no restriction on their usage (hunting) particularly.Thus, if a hunter hunts more number of animals using intensive hunting mechanism, it will reduce number of animals for other hunters .

The conversion rate is restated for all stock dividends and splits. Coffee had the following stock transactions in 2005 and 2006:

1/1/2005 - Sold 30,000 shares of common stock at $20 per share.
1/1/2005 - Sold 10,000 shares of preferred stock at $100 per share.
4/1/2005 - Issued at 50 percent stock dividend when the market price is $26 per share.
9/1/2005 - Purchased 4,000 treasury shares at $30 per share.
10/1/2005 - Sold 1,000 of the treasury shares at $32 per share.
11/1/2005 - Sold 2,000 of the treasury shares at $25 per share.
12/1/2005 - Issued a 2-1 for stock split.
12/20/2005 - Declared the required dividend to preferred stock holders and a $.25 per share dividend to common stockholders. Dividends are payable on 12/31/2005.

Prepare journal entries to record all of the above business events

Answers

Answer and Explanation:

The journal entries are shown below:

On Jan 1

Cash (30,000 Shares × $20)   $600,000

    To  Common Stock (30,000 Shares × $2)    $60,000

    To Paid In Capital in Excess of Par - Common Stock $540,000

(Being the sale of the common stock is recorded)

On Jan 1

Cash (10,000 Shares × $100)     $600,000

         To Preferred Stock (10,000 Shares × $100)  $1,000,000

(Being the sale of the preferred stock is recorded)

On Jan 4

Retained Earnings (30,000 × 50% × $26)   $390,000

         To Common Stock (15,000 shares × $2)   $30,000

         To Paid In Capital in Excess of Par - Common Stock $360,000

(Being the issued of the stock dividend is recorded)

On Jan 9

Treasury Stock (4,000 Shares × $30)   $120,000

        To Cash   $120,000

(Being the purchase of treasury stock is recorded)

On Jan 10

Cash (1,000 Shares × $32)   $32,000

   To  Treasury Stock (1,000 Shares × $30)  $30,000

     To Paid in Capital from Treasury Stock $2,000

(Being the sale of the treasury stock is recorded)

On Jan 11

Cash (2,000 Shares × $25)     $50,000

Paid in Capital - Treasury Stock   $2,000

Retained Earnings $8,000

           To Treasury Stock (2,000 Shares × $30)    $60,000

(Being the sale of the treasury stock is recorded)

On Jan 12

Since the shares are issued for  2 to 1 i.e the number of shares is rises from 29,000 shares to 58,000 shares due to which the par value is decreased from $2 to $1 per share. So the new 29,000 shares were to be distributed

On Dec 20

Retained Earnings  $74,500

     To Dividend Payable - Preferred Stock (10,000 Shares × 100 × 6%)    $60,000

     To Dividend Payable - Common Stock (58,000 Shares × $0.25)   $14,500

(Being the dividend is declared)

The pretax financial income (or loss) figures for Whispering Company are as follows. 2015 $164,000 2016 275,000 2017 86,000 2018 (164,000 ) 2019 (390,000 ) 2020 113,000 2021 98,000 Pretax financial income (or loss) and taxable income (loss) were the same for all years involved. Assume a 25% tax rate for 2015 and 2016 and a 20% tax rate for the remaining years. Prepare the journal entries for the years 2017 to 2021 to record income tax expense and the effects of the net operating loss carryforwards. All income and losses relate to normal operations. (In recording the benefits of a loss carryforward, assume that no valuation account is deemed necessary.)

Answers

Answer and Explanation:

The journal entries are shown below:

On 2017

Income Tax Expense $17,200 ($86,000 × 20%)

   To Income Tax Payable $17,200

(Being the income tax expense is recorded)

On 2018

Income Tax Refund Receivable $32,800 ($164,000 × 20%)

    To Income tax refund due to loss carry back $32,800

(Being the refund receivable is recorded)

On 2019

Income Tax Return Receivable  $17,200  ($86,000 × 20%)

          To Income tax refund $17,200

(Being the refund receivable is recorded)

Deferred Tax Asset $60,800 [(390,000 - $86,000) × 20%]

    To income tax refund $60,800

(Being the refund receivable is recorded)

On 2020

Income Tax Expense $22,600 ($113,000 × 20%)

      To Deferred Tax Asset $22,600

(Being the income tax expense is recorded)

On 2021

Income Tax Expense $19,600 ($98,000 × 20%)

      To Deferred Tax Asset $19,600

(Being the income tax expense is recorded)

Cesar Ruiz was reviewing his company's activities at the end of the year (2017) and decided to prepare a retained earnings statement. At the beginning of the year his assets were $530,000, liabilities were $140,000, and common stock was $120,000. The net income for the year was $250,000. Dividends of $220,000 were paid during the year. Prepare a retained earnings statement in good form. (List items that increase retained earnings first.) CESAR RUIZ COMPANY Retained Earnings Statement $ : : $ Click if you would like to Show Work for this question: Open Show Work

Answers

Answer:

Retained earnings is $300,000

Explanation:

The first task here that would aid the preparation of retained earnings statement for the current year is to first of determine the retained earnings for last year based on the information provided.

Retained earnings opening=Assets-liabilities-common stock

                                             =$530,000-$140,000-$120,000=$270,000

Retained earnings statement for the current year

Opening retained earnings             $270,000

net income for the year                    $250,000

Total earnings                                   $520,000

dividends                                          ($220,000)

Closing retained earnings               $300,000

Retained earnings are $300,000, and the retained earning statement is given in the image below.

What is retained earning?

After paying all direct and indirect costs, income taxes, and dividends to shareholders, a company's retained profits are the amount of profit left over.

This is the portion of the company's equity that can be utilized to invest in new equipment, research and development, and marketing.

Computation of Opening mount of retained earning:

[tex]\text{Ope. Retained Earnings}= \text{Assets - liabilities - Common Stock}\\\text{Ope. Retained Earnings}= \$5,30,000-\$1,40,000-\$1,20,000\\\text{Ope. Retained Earnings}= $270,000[/tex]

Therefore, retained earning statement is given in the image below.

Learn more about retained earning, refer to:

https://brainly.com/question/22227365

                                   

(1) Reporting of Capital Assets. Are capital assets reported as a line-item in the government-wide statement of net position? Are nondepreciable capital assets reported on a separate line from depreciable capital assets, or are they separately reported in the notes to the financial statements? Do the notes include capital asset disclosures, such as those for the City and County of Denver shown in Illustration 5–2? Does the disclosure show beginning balances, increases and decreases, and ending balances for each major class of capital assets, as well as the same information for accumulated depreciation for each major class? Are these disclosures presented separately for the capital assets of governmental activities, business-type activities, and discretely presented component units? Do the notes specify capitalization thresholds for all capital assets, including infrastructure? Do the notes show the amounts of depreciation expense assigned to each major function or program for governmental activities at the government-wide level? Are the depreciation policies and estimated lives of major classes of depreciable assets disclosed? Do the notes include the entity’s policies regarding capitalization of collections of works of art and historical treasures? If collections are capitalized, are they depreciated?

Answers

Answer:

Principal resources are reported as a line-item within the management wide declaration of net situation. Non-depreciable principal resources are individually reported within the proceedings to the money declarations. The revealing expressions starting equilibriums, will increase and reduces, and finish stabilities for every main category of principal assets, yet because the same info for accrued devaluation for every key category. These revelations are given individually for the wealth assets of administrative actions, occupational sort actions, and unnoticeably given part units. The summaries stipulate capitalization inceptions for all principal assets, together with arrangement. The summaries display the quantities of devaluation expenditure assigned to every major operate or package for administrative actions at the government-wide flat. The decline strategies and calculable lives of main categories of depreciable resources are released. Summaries do reveal the strategies relating to capitalization of assortment of skills and historic materials if some. These collectibles aren't criticized however market price of those art effort is measured to reason gain/ injury at the year finish. Accounting strategies for possessions no inheritable underneath capita tenancy are obviously mere

Wicker Rockers, Inc. is planning to offer a defined contribution plan for its employees. The company would like to incorporate a "cliff" vesting schedule for the employer contributions into the plan. What is the minimum vesting period the company can choose for a "cliff" vesting schedule

Answers

Answer:3 years

Explanation:

Cliff vesting is when an employee of a company becomes fully vested on a specified date rather than the employee becoming partially vested in increasing amounts over extended period. Cliff Vesting is a process whereby the employees are entitled to full benefits from their firm’s pension policies and qualified retirement plans on a given date.

Upon the completion of the cliff period, employees receive full benefits. The Pension Protection Act of 2006 deduced a three-year cliff vesting schedule for the designated defined-contribution plans which includes 401Ks.

Prior to September 30, a company has never had any treasury stock transactions. A company repurchased 1,000 shares of its $2 par common stock on September 30 for $20 per share. On October 2, it reissued 400 of these shares at $21 per share. On October 12, it reissued the remaining 600 shares at $19 per share. The journal entry to record the reissuance of the shares on October 2 would be:

Answers

Answer: Please refer to Explanation

Explanation:

The following will be the journal entry on October 2nd

October 2

DR Cash $8,400

CR Treasury Stock $8,000

CR Additional Paid-in Capital $400

(To record reissuance of Treasury Stock)

Workings

Cash = 400 * 21

= $8,400

Treasury Stock = 400 * 20 (purchase price)

= $8,000

Additional Paid-in Capital = (21 - 20) * 400

= $400

The predetermined overhead rate for Zane Company is $5, comprised of a variable overhead rate of $3 and a fixed rate of $2. The amount of budgeted overhead costs at normal capacity of $150000 was divided by normal capacity of 30000 direct labor hours, to arrive at the predetermined overhead rate of $5. Actual overhead for June was $9500 variable and $6050 fixed, and standard hours allowed for the product produced in June was 3000 hours. The total overhead variance is

Answers

Answer:

Total Overhead Variance= $500 unfavorable

Explanation:

The total overhead variance is the difference between actual overhead and the applied overhead.

Actual Overhead = Variable + Fixed= $9500 + $6050= $ 15,550

Budgeted Overhead for 30000 direct labor hours = $ 150,000

Applied Overhead for 3000 hours = 3000 *$5= $15000

Total Overhead Variance= Actual Overhead Less Applied Overhead

                                    = $15,500- $ 15000= $500 unfavorable

As actual is greater than applied it is unfavorable.

Answer:

$550 unfavorable.

Explanation:

Total actual overhead = $9,500 + $6,050 = $15,550

Total predetermined overhead = Predetermined overhead rate * Standard hours = $5 * 3,000 = $15,000

Total overhead variance = $15,550 - $15,000 = $550 unfavorable.

Note: It is unfavorable because total actual is greater than total predetermined overhead.

Marle Construction enters into a contract with a customer to build a warehouse for $950,000 on March 30, 2018 with a performance bonus of $50,000 if the building is completed by July 31, 2018. The bonus is reduced by $10,000 each week that completion is delayed. Marle commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes: Completed by Probability July 31, 2018 65% August 7, 2018 5% August 14, 2018 5% August 21, 2018 The transaction price for this transaction, based on the expected value approach, is:_______.
a. $950,000
b. $995,000
c. $685,000
d. $652,500

Answers

Answer:

b. $995,000

Explanation:

The computation of the transaction price based on the expected value approach is shown below:

The formula is

= (Building cost of warehouse + bonus) × probability percentage

Date                                 Calculation                              Amount

July 31, 2018         ($950,000+$50,000) × 0.65    $650,000

August 7, 2018 ($950,000+$40,000) × 0.25           $247,500

August 14, 2018 ($950,000+$30,000) × 0.05          $49,000

August 21, 2018 ($950,000+$20,000) × 0.05   $48,500

Total                                                                    $995,000  

Since the bonus is reduced $10,000 each week so $10,000 is deducted for every delayed week

CSUSM is a zero growth company. It currently has zero debt and its earnings before interest and taxes (EBIT) are $85,000. CSUSM 's current cost of equity is 11%, and its tax rate is 21%. The firm has 15,000 shares of common stock outstanding. Assume that CSUSM is considering changing from its original capital structure to a new capital structure with 39% debt and 61% equity. This results in a weighted average cost of capital equal to 8.7% and a new value of operations of $576,345. Assume CSUSM raises $165,000 in new debt and purchases T-bills to hold until it makes the stock repurchase. What is the stock price per share immediately after issuing the debt but prior to the repurchase?

Answers

Answer:

Check the explanation

Explanation:

Calculation of CSUSM 's New value of Operation :

For the purpose of Calculation of New Value of Operation we need to first calculate new WACC

Given :

Debt value ( Wd) = 30% or 0.30

Equity Value ( We)= 70% or 0.70

Cost of Debt ( Kd) =8%

New cost of equity (Ke) =12%

WACC =Kd(1-T) * Wd + Ke* We

WACC =[8%(1-0.40) * 0.30] + [12% * 0.70]

= [4.80% * 0.30 ] + [8.4 %]

= 1.44% + 8.4%

= 9.84 %

Given EBIT = $ 80,000

Tax rate = 40%

Currently the company has no growth. Therefore growth rate is 0 %

Value of New Operation =FCF / WACC

=EBIT (1-T) / WACC

=$80,000 (1-0.40)/ 9.84%

= $ 487,804.88

A peer-review board for alternative dispute resolution usually consists of: A. an equal number of employee representatives and management appointees B. managers above the level of the supervisor whose decision is being appealed. C. employees at the same level as the appealing employee. D. managers, subordinates, and a number of unbiased third-party participants who do not work for the employer.

Answers

Answer:

The answer is option A) A peer-review board for alternative dispute resolution usually consists of: an equal number of employee representatives and management appointees

Explanation:

Alternative dispute resolution is an affordable, less time consuming and less formal way of settling workplace disputes. To achieve this feat, a peer review board is constituted.

A peer review board usually consists of employers and management appointees and it could be a voluntary decision on their art to participate.

The pool of individuals nominated to be part of  the peer review board is considered objective and unbiased in their assessment of the issue to be resolved. They are also deemed skillful in the art of listening and arbitration.

Donovan company incurred the following costs while producing 2000 units: Direct Materials, $15 per unit; direct labor, $5 per unit; variable manufacturing overhead, $12 per unit; variable selling and administrative costs, $14, per unit; total fixed overhead costs, $20,000; total fixed selling and administrative costs, $10,000. There are no beginning inventories.

What is the unit productive cost using absorption costing?

a. $32 per unit

b. $42 per unit

c. $52 per unit

d. $61 per unit

What is the unit product cost using variable costing?

a. $32 per unit

b. $44 per unit

c. $46 per unit

d. $61 per unit

What is the operating income using absorption costing if 1800 units are sold for $100 each?

a. $104,400

b. $96,000

c. $79,200

d. $69,200

What is the operating income using variable costing if 1900 units are sold for $100 each?

a. $57,400

b. $72,600

c. $80,200

d. $102,600

*Formulas or explanations with each part of the problem.

Answers

Answer:

1. b. $42 per unit

2. a. $32 per unit

3. d. $69,200

4. b $72,600

Explanation:

1 and 2 The computation of unit productive cost using absorption costing and unit product cost using variable costing is shown below:-

                                     Absorption        Variable

Direct material                   $15                   $15

Direct labor                         $5                    $5

Variable manufacturing

overhead                             $12                  $12

Fixed manufacturing

overhead                              $10        

($20,000 ÷ 2000)  

Product cost                        $42                $32

Therefore for computing the product cost of absorption and variable cost we simply added direct material, direct labor, variable manufacturing overhead and fixed overhead rate

3. The computation of the unit product cost using variable costing is shown below:-

Sales                                          $180,000

Cost of goods manufactured   ($756,00)

(1800 × $42)

Difference                                   $104,400

Variable and selling

administrative                             ($25,200)

(1800 × $14)

Gross profit                                  $79,200

Fixed selling and administrative

expenses                                     ($10,000)

Net operating income                $69,200

So, for computing the net operating income we simply deduct the Fixed selling and administrative expenses from gross profit.

4. The computation of operating income using variable costing is shown below:-

Sales                                               $190,000

(1,900 × $100)

Variable cost of goods

manufactured                                   $60,800

(1,900 × $32)

Gross contribution margin                $129,200

Variable and selling administrative   ($26,600)

(1900 × $14)

Net contribution margin                     $102,600

Fixed cost                                           ($30,000)

Operating income                              $72,600

Therefore for computing the operating income using variable costing we simply deduct the fixed cost from net contribution margin.

Sports Bar and Tasty Bakery are adjacent businesses with adjoining parking lots. Sports Bar offers Tasty a discount on purchases if the bakery will not tow the cars of Sports Bar's patrons who park in the bakery's lot. The discount is legally sufficient consideration



a. because it is a promise of something of value.


b. only if Tasty uses it.


c. only if Sports Bar adds a cash rebate.


d. under no circumstances.

Answers

Answer:

The correct answer is the option A: because it is a promise of something of value.

Explanation:

To begin with, in order to understand that the discount is legally sufficient consideration it is necessary to understand that it is due to the fact that what the company is offering is something of value for them, therefore that they decide to offer it to the other business in order to make an agreement according to the situation that they are both in. Moreover, that promise is consider to be legitim in court if it was stated in a written way in where both parties agree to the terms of use.

Tiki Corporation had net income of $120,000 during the year. Depreciation expense was $6,000. The following information is available: Held- to-Maturity Bonds purchased25,000increase Common Stock issued70,000increase Accounts Receivable10,000decrease Accounts Payable15,000increase Gain on sale of AFS Investment5,000increase What amount should Tiki report as net cash provided by operating activities in its statement of cash flows for the year

Answers

Answer:

Tiki should report $101,000 as net cash provided by operating activities in its statement of cash flows for the year.

Explanation:

Tiki Corporation

Statement of cash flows (extract)

Net income                                                 $120,000

Add: Depreciation expense                            6,000

Less: Increase Accounts Receivable           (10,000)

Less: Decrease in Accounts Payable          (15,000)

Net cash flows from operating activities   $101,000

Flychucker Corporation is evaluating an extra dividend versus a share repurchase. In either case $19,000 would be spent. Current earnings are $1.40 per share, and the stock currently sells for $50 per share. There are 5,000 shares outstanding. Ignore taxes and other imperfections. a. Evaluate the two alternatives in terms of the effect on the price per share of the stock and shareholder wealth per share

Answers

Answer:

Alternative I: (Extra dividend)

Price per share is $ 46.20

Shareholder wealth per share is $ 42.40

Alternative II: ( Share repurchase)

For share repurchase, the price per share and the shareholder wealth is equal to the stock price.

Explanation:

Alternative I: (Extra dividend)

Amount spent = $19,000

Outstanding shares = 5,000 shares

Stock price = $50

Price per share = Stock price - [tex]\frac{Amount spent}{Outstanding Shares}[/tex]

= $50 - [tex]\frac{19,000}{5,000}[/tex] = $50 - $3.8

= $ 46.20

Shareholder wealth per share = Price per share - [tex]\frac{Amount spent}{Outstanding Shares}[/tex]

= $46.20 - $3.8

=$ 42.40

Alternative II: ( Share repurchase)

For share repurchase, the price per share and the shareholder wealth is equal to the stock price.

Darrin’s Auto Northern Division is currently purchasing a part from an outside supplier. The company's Southern Division, which has no excess capacity, makes and sells this part for external customers at a variable cost of $15 and a selling price of $27. If Southern begins sales to Northern, it (1) will use the general transfer-pricing rule and (2) will be able to reduce variable cost on internal transfers by $3. On the basis of this information, Southern would establish a transfer price of:

Answers

Answer:

Transfer price = $24

Explanation:

As per the data given in the question,

The excess capacity of Company's Southern division is nill therefore for transferring the units the division will have to decrease its external sales.The Loss occurred due to reduction in external sales should be from inter divisional transfer price. Therefore,

Transfer price = variable cost + Loss of contribution

= ($15 - $3) + ($27 - $15)

= $24

Tom, Dan and Phil work indifferent teams at Springfield Automotive. Tom's team ensures that all the raw materials, machinery, tools and other production equipment are available for the employees around the clock. Any procurement needs have to be addressed to Tom, who also takes part in high-level decisions regarding the number of units to produced, exported and so on. Dan works as part of a team of eight members who concentrate the day-to-day productions; they also ensure that the quality checks are done and inspect each other's work. Phil is the operations manager, who works for 5 hours in the production department and then spends the rest of his time assisting management as an internal consultant on manufacturing issues. His input is crucial in improving the production process. Dan's contribution is toward the __________.

Answers

Answer: Work team

Explanation: Dan's contribution is towards the work team whereas Phil works in the parallel team while Tom is part of the management team. a work team which Dan is a member of is defined as a group of workers or employees with different set of skills that work together on a given task such as the day-to-day productions in a business, quality control and inspection, etc. Work teams are most efficient or useful where there is a frequent change in job content and employees with limited skills and a specific set of duties are unable to cope (work teams thus provide expert advice that will increase the ability of employees to participate in planning, problem-solving, and decision-making that are needed to complete a set of work and to better serve customers).

The following data pertain to last year's operations at Tredder Corporation, a company that produces a single product: Units in beginning inventory 0 Units produced 20,000 Units sold 19,000 Selling price per unit $100.00 Variable costs per unit: Direct materials $12.00 Direct labor $25.00 Variable manufacturing overhead $3.00 Variable selling and administrative $2.00 Fixed expenses per year: Fixed manufacturing overhead $500,000 Fixed selling and administrative $600,000 What was the absorption costing net operating income last year?

Answers

Answer:

Net operating income= 27,000

Explanation:

Giving the following information:

Units produced 20,000

Units sold 19,000

Selling price per unit $100.00

Variable costs per unit:

Direct materials $12.00

Direct labor $25.00

Variable manufacturing overhead $3.00

Variable selling and administrative $2.00

Fixed expenses per year:

Fixed manufacturing overhead $500,000

Fixed selling and administrative $600,000

Under the absorption costing method, the fixed manufacturing overhead gets included in the unitary production cost. First, we need to calculate the unitary product cost.

Unitary product cost= (12 + 25 + 3) + (500,000/20,000)

Unitary product cost= 40 + 25= $65

Income statement:

Sales= 100*19,000= 1,900,000

COGS= 65*19,000= (1,235,000)

Gross profit= 665,000

Variable selling and administrative= (2*19,000)=(38,000)

Fixed selling and administrative= (600,000)

Net operating income= 27,000

The following costs result from the production and sale of 5,000 drum sets manufactured by Tight Drums Company for the year ended December 31, 2017. The drum sets sell for $350 each. The company has a 25% income tax rate.

Variable production costs
Plastic for casing $ 185,000
Wages of assembly workers 510,000
Drum stands 230,000
Variable selling costs
Sales commissions 175,000
Fixed manufacturing costs
Taxes on factory 5,000
Factory maintenance 10,000
Factory machinery depreciation 70,000
Fixed selling and administrative costs
Lease of equipment for sales staff 10,000
Accounting staff salaries 60,000
Administrative management salaries 140,000

Prepare contribution margin income statement for the company.

Answers

Answer and Explanation:

The preparation of the contribution margin income statement for the company is presented below:

                                 Tight Drums Company

                    Contribution margin income statement

                    For the year ended December 31, 2017

Sales (5,000 drums × $350)      $1,750,000

Less: Variable cost

Plastic for casing -$185,000

Wages of assembly workers $510,000

Drum stands $230,000

Variable selling costs

Sales commissions $175,000

Total variable cost                                         -$1,100,000

Contribution margin                                        $650,000

Less: Fixed cost

Fixed manufacturing costs

Taxes on factory $5,000

Factory maintenance $10,000

Factory machinery depreciation $70,000

Fixed selling and administrative costs

Lease of equipment for sales staff $10,000

Accounting staff salaries $60,000

Administrative management salaries $140,000

Total fixed cost                                                          -$295,000

Net operating income                                                 $355,000

Less: income tax expense at 25%                             -$88,750

Net income                                                                   $266,250

We simply deduct the variable cost and fixed cost from the sales revenue so that the net operating income could come and then deducted the income tax expense so that net income could arrive

A work center uses kanban containers that hold 200 parts. To produce enough parts to fill a container, 60 minutes of setup plus run time are needed. Moving the container to the next workstation, waiting time, processing time at the next work station, and return of the empty container take 120 minutes. There is an overall demand rate of 10 units per minute. Calculate the number of containers needed for this process.

Answers

Answer:

9 containers

Explanation:

Data given

Container holds (capacity) = 200 units

Demand rate per minute = 10 units

The computation of number of containers needed is shown below:-

Time to fill container = Setup time + Processing time

= 60 + 120

= 180 minutes

Number of containers (n) = (Demand × Time to fill container) ÷ Capacity of the container

= (10 × 180) ÷ 200

= 1,800 ÷ 200

= 9 containers

Therefore for computing the number of containers we simply applied the above formula.

Abbott Landscaping purchased a tractor at a cost of $30,000 and sold it three years later for $16,200. Abbott recorded depreciation using the straight-line method, a five-year service life, and a $4,000 residual value. Tractors are included in the Equipment account.

Assume the tractor was sold for $12,400 instead of $19,800. Record the sale.

Answers

Answer:

                                                                    Debit Credit

Cash                                                         $16,200  

Accumulated depreciation-equipment $15,600  

Gain on sale of equipment                                  1,800

Equipment                                                        30,000

(To record sale of equipment)  

Explanation:

According to the given data we have the following:

Equipment=$30,000

Cash=$16,200

Therefore,The accumulated depreciation would be=($30,000-4,000)/5*3

The accumulated depreciation would be=$15,600

Therefore, the sale to record would be as follows:

                                                                      Debit Credit

Cash                                                         $16,200  

Accumulated depreciation-equipment $15,600  

Gain on sale of equipment                                  1,800

Equipment                                                        30,000

(To record sale of equipment)  

Which of the following is true of a stock dividend? Multiple Choice It is a liability on the balance sheet. The decision to declare a stock dividend resides with the shareholders. Transfers a portion of equity from retained earnings to a cash reserve account. Does not affect total equity, but transfer amounts between the components of equity. Reduces a corporation's assets and stockholders' equity.

Answers

Answer:

Yes it is true that a stock dividend does not affect total equity.

Explanation:

A stock dividend is a non cash payment given to shareholders. Instead of cash, additional shares that is equivalent to the earnings that accrue is given to shareholders.

While this may increase the number of shares held, it does not affect total equity.

One of the benefits of stock dividends tax exemption and retained equity which translates to additional investment.

However, the additional; shares created could dilute the share prices.

Purdum Farms borrowed $16 million by signing a five-year note on December 31, 2017. Repayments of the principal are payable annually in installments of $3.2 million each. Purdum Farms makes the first payment on December 31, 2018 and then prepares its balance sheet. What amount will be reported as current and long-term liabilities, respectively, in connection with the note at December 31, 2018, after the first payment is made?

Answers

Answer:

Current liabilities   $3.2 million

long-term liabilities =$16 million-$3.2 million-$3.2 million=$9.6 million

Explanation:

The amount classified as current liabilities as at 31st December 2018 is the portion of the loan repayable within a year,that the repayment due at 31st December 2019 which is $3.2 million.

The amount to be classified as long term liabilities is the balance of the loan after having taken out the payment in year 1 as well as the repayment to be made in year 2

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