Gig Harbor Boating is the wholesale distributor of a small recreational catamaran sailboat. Management has prepared the following summary data to use in its annual budgeting process:
Budgeted unit sales 500
Selling price per unit $1,970
Cost per unit $1,460
Variable selling and administrative expenses (per unit) $ 50
Fixed selling and administrative expenses (per year) $196,000
Interest expense for the year $ 13,000
Required:
Prepare the company’s budgeted income statement using an absorption income statement format shown below.
Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows:
Sales in Units
April 74,000
May 85,000
June 114,000
July 92,000
The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end-of-month inventory levels must equal 10% of the following month’s sales. The inventory at the end of March was 7,400 units.
Required:
Prepare a production budget for the second quarter; in your budget, show the number of units to be produced each month and for the quarter in total.
Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash flows:
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Total cash receipts $310,000 $430,000 $360,000 $380,000
Total cash disbursements$365,000 $335,000 $325,000 $345,000
The company’s beginning cash balance for the upcoming fiscal year will be $25,000. The company requires a minimum cash balance of $10,000 and may borrow any amount needed from a local bank at a quarterly interest rate of 3%. The company may borrow any amount at the beginning of any quarter and may repay its loans, or any part of its loans, at the end of any quarter. Interest payments are due on any principal at the time it is repaid. For simplicity, assume that interest is not compounded.
Required:
Complete the company's cash budget for the upcoming fiscal year. (Cash deficiency, repayments, and interest, should be indicated by a minus sign.)
The management of Mecca Copy, a photocopying center located on University Avenue, has compiled the following data to use in preparing its budgeted balance sheet for next year:
Ending Balances
Cash ?
Accounts receivable $ 8,500
Supplies inventory $ 4,700
Equipment $ 36,000
Accumulated depreciation $ 14,600
Accounts payable $ 2,200
Common stock $ 5,000
Retained earnings ?
The beginning balance of retained earnings was $32,000, net income is budgeted to be $16,300, and dividends are budgeted to be $2,700.


Required:

Prepare the company’s budgeted balance sheet. (Amounts to be deducted should be indicated by a minus sign.)

Answers

Answer 1

Answer:

Gig Harbor Boating

Budgeted Income Statement using absorption costing format:

Sales Revenue                                                        $985,000

Cost of Boats Sold                                                    730,000

Gross profit                                                            $255,000

Total variable selling and

administrative expenses                     $25,000

Fixed selling and

administrative expenses (per year)    196,000     $221,000

Income before interest and taxes                          $34,000

Interest expense for the year                                    13,000

Pretax Income                                                          $21,000

2. Down Under Products, Ltd. of Australia

Production Budget for the second quarter

                                           April            May          June       Total

Sales in Units                     74,000       85,000      114,000      273,000

Ending Inventory                8,500        11,400        9,200         9,200

Beginning Inventory              740        8,500        11,400            740

Units to be produced       81,760       87,900      111,800     241,460

3. Garden Depot

Summary of Cash Budget for the upcoming fiscal year:

                                 1st Quarter  2nd Quarter  3rd Quarter  4th Quarter

Beginning cash bal.   $25,000        $10,000       $63,800      $98,800

Total cash receipts   $310,000     $430,000    $360,000    $380,000

Total cash available $335,000     $440,000    $423,800    $478,800

Total cash

 disbursements     ($365,000)   ($335,000)  ($325,000)  ($345,000)

Bank loan (repyt)         40,000        (40,000)

Bank loan Interest                              (1,200)

Cash Balance           ($30,000)      $63,800       $98,800     $133,800

Required Minimum    $10,000       $10,000        $10,000       $10,000

4. Mecca Copy

Budgeted Balance Sheet for the coming year:

Budgeted Balance Sheet for the next year:

Ending Balances

Cash                                                          $ 18,200

Accounts receivable                                  $ 8,500

Supplies inventory                                     $ 4,700

Equipment                          $ 36,000

Accumulated depreciation $ 14,600       $ 21,400

Total Assets                                           $ 52,800

Accounts payable                                    $ 2,200

Common stock                                        $ 5,000

Retained earnings                                $ 45,600

Total Liabilities and Equity                 $ 52,800

Explanation:

1. Gig Harbor Boating:

Data and Calculations:

Budgeted unit sales 500

Selling price per unit $1,970

Sales Revenue = $985,000 ($1,970 x 500)

Cost per unit $1,460

Cost of Boats Sold = $730,000 ($1,460 x 500)

Variable selling and administrative expenses (per unit) $ 50

Total variable selling and administrative expenses = $25,000 ($50 x 500 )

Fixed selling and administrative expenses (per year) $196,000

Interest expense for the year $ 13,000

2. Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows:

a) Data and Calculations:

                                  March       April          May          June       July

Sales in Units              7,400      74,000       85,000      114,000      92,000

Ending Inventory          740        8,500        11,400        9,200

Beginning Inventory                      740         8,500        11,400       9,200

Units to be produced               81,760        87,900      111,800

3. Garden Depot

Data and Calculations:

                                1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Beginning cash bal.   $25,000        $10,000       $63,800      $98,800

Total cash receipts   $310,000     $430,000    $360,000    $380,000

Total cash available $335,000     $440,000    $423,800    $478,800

Total cash

 disbursements     ($365,000)   ($335,000)  ($325,000)  ($345,000)

Bank loan (repyt)         40,000        (40,000)

Bank loan Interest                              (1,200)

Cash Balance           ($30,000)      $63,800       $98,800     $133,800

Required Minimum    $10,000        $10,000       $10,000       $10,000

4. Mecca Copy:

Data and Calculations:

Budgeted Balance Sheet for the next year:

Ending Balances

Cash ?

Accounts receivable $ 8,500

Supplies inventory $ 4,700

Equipment $ 36,000

Accumulated depreciation $ 14,600

Accounts payable $ 2,200

Common stock $ 5,000

Retained earnings ?

Retained Earnings:

Beginning =   $32,000

Net income =   16,300

Dividends =      (2,700)

Ending =       $45,600

Gig Harbor Boating's budgeted income statement gives a snapshot into the future of its revenue, cost of boats sold, gross profit, and pretax income.  Thus, it uses the projections to guide management towards the achievement of its targets.

Similarly, Down Under Products, Ltd. of Australia prepares a production budget for the second quarter to determine how much units it needs to produce to meet sales or customers' demand.

Garden Depot, as a retailer, ascertains its cash needs by preparing budgeted cash flows for the coming year.

Finally, Mecca Copy cannot operate its center without an idea about its financial position for the next year.  Therefore, it prepares a budgeted balance sheet.  All these budgets guide managements of these various entities and prepare them for taking necessary actions to plan and keep their companies afloat.


Related Questions

dazzle, inc. produces beads for jewelry making use the journal entry to record production activities for direct labor usage is

Answers

Answer:

Debit Work in Process Inventory $180,000; credit Factory Wages Payable $180,000.

Explanation:

The journal entry to record the direct labor usage is shown belwo:

Work in process inventory Dr

          To factory wages payable

(Being the direct labor usage is recorded)

For recording this we debited the work in process as it increased the assets and credited the factory wages payable as it also increased the liabilities

Moreover, when the wages is applied in the production level so the respective account is debited and credited

Steelcase Inc. (SCS) is one of the largest manufacturers of office furniture in the United States. In Grand Rapids, Michigan, it assembles filing cabinets in an Assembly Department. Assume the following information for the Assembly Department: Direct labor per filing cabinet 18 minutes Supervisor salaries $250,000 per month Depreciation $18,500 per month Direct labor rate $28 per hourRequired:Prepare a flexible budget for 70,000, 80,000, and 90,000 filing cabinets for the month ending February 28 in the Assembly Department.

Answers

Answer:

Total department cost of 70,000 units = $856,500

Total department cost of 80,000 units = $940,000

Total department cost of 90,000 units = $1,024,500

Explanation:

Note: See the attached excel file for the flexible budget.

A flexible budget is a budget that changes, flexes or adjusts as the volume, activity or unit of production changes.

For this question, the direct labor cost for each unit can be calculated as follows:

Direct labor time per filing cabinet in minutes = 18

Number of minutes in one hour = 60

Direct labor rate per minute = Direct labor rate per hour / Number minutes in one hour = $28 / 60 = $0.466666666666667

Direct labor cost per filing cabinet = Direct labor time per filing cabinet in minutes * Direct labor rate per minute = 18 * $0.466666666666667 = $8.40

Direct labor cost of a particular units of production = Direct labor cost per filing cabinet * Number of units of production ................... (1)

Using equation (1), the Direct labor cost of different units of production used in the attached excel file is calculated as follows:

Direct labor cost of 70,000 units = $8.40 * 70,000 = $588,000

Direct labor cost of 80,000 units = $8.40 * 80,000 = $672,000

Direct labor cost of 90,000 units = $8.40 * 90,000 = $756,000

Bramble Corp. recorded operating data for its shoe division for the year. Sales$1300000 Contribution margin360000 Controllable fixed costs180000 Average total operating assets720000 How much is controllable margin for the year

Answers

Answer:

controllable margin for the year is $180,000.

Explanation:

The Controllable Margin is the Profit that is controllable by the divisional manager.

Calculation of Controllable Margin :

Contribution Margin                 $360,000

Less Controllable fixed costs ($180,000)

Division Controllable Margin    $180,000

You find a zero coupon bond with a par value of $10,000 and 14 years to maturity. The yield to maturity on this bond is 5.1 percent. Assume semiannual compounding periods. What is the price of the bond

Answers

Answer:

Bond Price = $4940.8468 rounded off to $4940.85

Explanation:

The price of a zero coupon bond is simply calculated by calculating the present value of the face value of the bond that the bond pays at maturity. The formula for the price of a zero coupon bond is,

Bond Price = Face Value / ( 1 + r )^n

Where,

r is the rate or YTM n is the number of periods left to maturity

Assuming that the r or YTM is always stated in annual terms, the semi annual YTM will be 5.1% / 2 = 2.55%

Assuming semi annual compounding periods, the total number of periods or n will be,

n = 14 * 2 = 28

Bond Price = 10000 / (1 + 0.0255)^28

Bond Price = $4940.8468 rounded off to $4940.85

Bank's Balance Sheet Assets Liabilities and Owners' Equity $1,600 $250 Securities $1,000 Capital (owners' equity) $150 Reserves$200 Deposits Loans $800 Debt Suppose the owners of the bank borrow $100 to supplement their existing reserves.
This would increase the reserves account and ______ the ______ account.
This would also bring the leverage ratio from its initial value of __________ to a new value of_______
Which of the following is true of the capital requirement?
a. The higher the percentage of assets a bank holds as loans, the higher the capital requirement.
b. A minimum leverage ratio for all banks.
c. Its intended goal is to protect the interests of those who hold equity in the bank.

Answers

Answer:

1. This would increase the reserves account and increase the debt account.

Borrowing refers to debt and so it will increase the debt account.

2. This would also bring the leverage ratio from its initial value of 13.33 to a new value of 14.

The bank leverage ratio refers to its Assets divided by Capital (Owners equity).

Before the $100 was borrowed, the leverage ratio was;

= (Reserves + loans + securities)/Capital

= ( 200 + 800 + 1,000) / 150

= 13.33

After the $100 was borrowed

= ( 200 + 800 + 1,000 + 100) /150

= 14.

3. a. The higher the percentage of assets a bank holds as loans, the higher the capital requirement.

The capital requirement is meant to protect depositors in case the loans are defaulted on as the loans are created from the funds depositors bring in. Should the loans be defaulted on, they will be paid from the capital therefore if the bank holds more loans, it will have to hold more capital to ensure it can cover those loans.

Quantitative Problem 1: Hubbard Industries just paid a common dividend, D0, of $1.50. It expects to grow at a constant rate of 2% per year. If investors require a 8% return on equity, what is the current price of Hubbard's common stock? Do not round intermediate calculations. Round your answer to the nearest cent. $ per share

Answers

Answer:

The current price of Hubbard's common stock is $25.50.

Explanation:

This can be calculated using the Gordon growth model (GGM) formula that assumes growth is dividend will be constant as follows:

P = D1/(r - g) ............................ (1)

Where,

P = Current stock price = ?

D1 = Next dividend =  D0 * (1 + g) = $1.50 * (1 + 2%) = $1.53

r = required return = 8%, or 0.08

g = growth rate = 2%, or 0.02

Substituting the values into equation (1), we have:

P = $1.53 / (0.08 - 0.02) = $25.50

Therefore, the current price of Hubbard's common stock is $25.50.

The following income statement and additional year-end information is provided.
SONAD COMPANY
Income Statement
For Year Ended December 31
Sales $1,647,000
Cost of goods sold 807,030
Gross profit 839,970
Operating expenses
Salaries expense $225,639
Depreciation expense 39,528
Rent expense 44,469
Amortization expenses—Patents 4,941
Utilities expense 18,117 332,694
507,276
Gain on sale of equipment 6,588
Net income $513,864
Accounts receivable $29,000 increase Accounts payable $14,925 decrease
Inventory 23,425 increase Salaries payable 5,000 decrease
Prepare the operating activities section of the statement of cash flows using the indirect method.

Answers

Answer:

Cash flow from Operating Activities

Net income                                                         $513,864

Adjustment for Non-cash items :

Depreciation expense                                        $39,528

Amortization expenses—Patents                          $4,941

Adjustment for Changes in Working Capital :

Increase in Accounts receivable                      ($29,000)

Decrease in Accounts payable                          ($14,925)

Increase in Inventory                                          ($23,425)

Decrease in Salaries payable                             ($5,000)

Net Cash flow from Operating Activities          $485,983

Explanation:

The Indirect method, reconciles the Operating Profit to the Operating Cash Flow by adjusting for the following items :

Non-cash items previously added or deducted from the Operating ProfitAdjustments for Changes in Working Capital items

It is January 2nd and senior management of Digby meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing $10,000,000 in bonds. Assume the bonds are issued at face value and leverage changes to 2.7. Which of the following statements are true? Select all that apply.a. Working capital will remain the same at $18,964,118b.Total Assets will rise to $235,535,291c. Chesters' long-term debt will rise by $9,000,000d.The total investment for Chester will be $217,192,866e.Total liabilities will be $139,957,573

Answers

Answer:

Statements (b) and (e) are true.

Explanation:

According to the above, computation of the data given are shown below;

According to the statement (b), Total assets will rise to = $235,535,291

According to the statement (e) , Total liabilities will be $139,957,573

Also, according to the question, new liability amounts to = $10,000,000

Therefore,

Total Stockholder's Equity = Total assets - Total Liabilities

= $235,535,291 - $139,957,573 - $10,000,000

= $85,577,718

Leverage = Total Assets ÷ Total Stockholder's Equity

= $235,535,291 ÷ $85,577,718

= 2.7

According to the above analysis, statements (b) and (e) are true.

Answer :

b.Total Assets will rise to $235,535,291.

e.Total liabilities will be $139,957,573.

Explanation:

The following statements  are true :

Working notes :

Total Assets = $235,535,291 Total Liabilities =$139,957,573  New Liability  = $10,000,000  

Formula:

Total Stockholder's Equity = Total assets - Total Liabilities

Total Stockholder's Equity = $235,535,291 - $139,957,573 - $10,000,000

Total Stockholder's Equity = $85,577,718

Leverage = Total Assets ÷ Total Stockholder's Equity Leverage= $235,535,291 ÷ $85,577,718 Leverage= 2.7

According to the above scenario the correct answer is B and E.

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https://brainly.com/question/23639729?referrer=searchResults

Refer to the following scenario to answer the following questions.
Five fishermen live in a village and have no other employment or income-earning possibilities besides fishing. They each own a boat that is suitable for fishing but does not have any resale value. Fish are worth $5 per pound, and the marginal cost of operating the boat is $500 per month. They all fish a river next to the village. According to the following schedule, they have determined that when there are more of them out on the river fishing, they each catch fewer fish per month.
Boats Fish Caught per
Boat (pounds)
1 200
2 190
3 175
4 155
5 130
How many fishermen will choose to operate their boats?

Answers

Answer:

5 fishermen will choose to operate their boats as each of them will earn a profit of $150

Explanation:

Per boat operating cost = $500 per month.

Price of fish = $5 per pound.

There are 5 fishermen and each fishermen has 1 boat.

For 1 boat

Total revenue = Price * quantity = $5 * 200 = $1,000

Cost = $500

Profit = Total revenue - Cost = 1000 - 500

Profit = $500.

For 2 boats

Total Revenue of each boat = $5 * 190 = $950

Cost of each boat = $500

Profit of each boat = Total revenue - Cost = 950 - 500

Profit of each boat = $450.

For 3 boats

Total Revenue of each boat = 5 * 175 = $875

Cost of each boat = $500

Profit of each boat = TR - Cost = 875 - 500

Profit of each boat = $375

For 4 boats

Total Revenue of each boat = 5 * 155 = $775

Cost of each boat = $500

Profit of each boat = TR - Cost = 775 - 500

Profit of each boat = $275

For 5 boats

Total Revenue of each boat = 5 * 130 = $650

Cost of each boat = $500

Profit of each boat = TR - Cost = 650 - 500

Profit of each boat = $150.

Conclusion: As there are 5 fishermen and if all of them out on the river at the same time then each fisherman earns profit of $150. As all fishermen earns profit hence all of them will choose to operate their boats. Therefore, 5 fishermen will be ready to operate their boats.

On July 1, Wildhorse Co. purchases 560 shares of its $5 par value common stock for the treasury at a cash price of $10 per share. On September 1, it sells 370 shares of the treasury stock for cash at $11 per share. Required:Journalize the two treasury stock transactions.

Answers

Answer:

Please see the journal entries for the two treasury stock transactions.

Explanation:

• Purchase of treasury stock

Treasury stock Dr $5,600

To Cash account Cr $5,600

(Being the purchase of treasury stock that is recorded)

For recording the above, treasury stock was debited because it increased the treasury while cash credited because it decreased the assets.

• Sale of treasury stock

Cash account Dr $4,070

To Treasury stock Cr $3,700

To paid in capital- treasury stock Cr $370

Explanation

° Purchase of treasury stock

Treasury stock

= 560 shares × $10 per share

= $5,600

° Sales of treasury stock

Cash receipt

= 370 shares × $11 per share

= $4,070

Treasury stock

= 370 shares × $10 per share

= $3,700

Paid in capital treasury stock

= 370 shares × ($11-$10)

= $370

A__________produces finished-goods inventory in advance of customer demand using a forecast of sales.

Answers

Answer:

Push system.

Explanation:

A push system produces finished-goods inventory in advance of customer demand using a forecast of sales and as such it is categorized as a make to stock because the production of goods are not based on actual demand by the consumers.

Under a push system, manufacturing is strictly based on a projected production plan and the flow of information between the manufacturer and the market is in the same direction with those of raw materials used.

What is the yield to maturity of a bond that pays a 6% coupon rate with semiannual coupon payments, has a par value of $1,000, matures in 15 years, and is currently selling for $803

Answers

Answer:

Yield to Maturity = 8.11 %  

Explanation:

The Yield to maturity is the discount rate that equates then price of the bonds to the present of cash inflows expected from the bond

The yield on the bond can be determined as follows using the formula below:

YTM = C + F-P/n) ÷ 1/2 (F+P)

YTM-Yield to maturity-  

C- annual coupon

F- Face Value

P- Current Price

n- years to maturity

YTM-?, C- 6%× 1000 =60, Face Value - 1,000, P-803, n- 15

YTM = (60 + (1000-803)/15) ÷ ( 1/2× (1000 + 803) )

YTM = 0.0811  × 100 = 8.11 %

Yield to Maturity = 8.11 %  

A project will reduce costs by $37,000 but increase depreciation by $17,300. What is the operating cash flow if the tax rate is 40 percent?

Answers

Answer:

The operating cash flow is $29,120.

Explanation:

Operating cash flow (OCF) can be described as the amount of cash that is generated by a firm from its regular operating activities during a specified period of time.

Operating cash flow (OCF) can be calculated using the following formula:

OCF = ATCS + DTS .......................... (1)

Where;

OCF = Operating cash flow = ?

ATCS = After Tax Cost Savings = Reduce costs * (1-tax rate) = $37,000 * (1 - 40%) = $22,200

DTS = Depreciation Tax Shield = Depreciation * Tax rate = $17,300 * 40% = $6,920

Substituting the values into equation (1), we have:

OCF = $22,200 + $6,920 = $29,120

Therefore, the operating cash flow is $29,120.

Blossom, Inc., manufactures golf clubs in three models. For the year, the Big Bart line has a net loss of $4,700 from sales $201,000, variable costs $175,000, and fixed costs $30,700. If the Big Bart line is eliminated, $19,800 of fixed costs will remain. Prepare an analysis showing whether the Big Bart line should be eliminated. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) g

Answers

Answer:

Analysis of the Big Bart line discontinuity

Opportunity Costs :

Sales                                                        ($201,000)

Savings :

Variable Costs                                          $175,000

Fixed Costs ($30,700 - $19,800)              $10,900

Financial Advantage / (Disadvantage)     ($15,100)

Conclusion :

Do not eliminate / discontinue Big Bart line.

Explanation:

The results show that closing Big Bart line results in a contribution towards fixed cost being lost to the amount of $15,100. Therefore leaving the entire company in a worse off position.

The production budget shows expected unit sales of 40000. Beginning finished goods units are 3800. Required production units are 41600. What are the desired ending finished goods units

Answers

Answer:

desired ending inventory= 5,400 units

Explanation:

Giving the following information:

Sales= 40,000 units

Beginning finished goods= 3,800 units

Production= 41,600 units

To calculate the desired ending inventory, we need to use the following formula:

Production= sales + desired ending inventory - beginning inventory

41,600= 40,000 + desired ending inventory - 3,800

41,600 + 3,800 - 40,000= desired ending inventory

desired ending inventory= 5,400 units

Microsoft online. Which of the following price customization tool is Microson using?

a. Controlling availability
b. Setting prices based upon transaction characteristics
c. Managing product-line offerings
d. Setting prices based upon buyer characteristic

Answers

Answer:

Setting prices based upon buyer characteristic

Explanation:

Microson is setting prices based on buyer characteristics. The question says it is giving educational discounts of 10 percent to parents and students. This is value pricing and it mainly involves setting prices with your customers or consumers in focus. Microson based their prices on the worth as perceived by the parents and students. It's discount is characteristic of the people buying it.

Parwin Corporation plans to sell 40,000 units during August. If the company has 16,500 units on hand at the start of the month, and plans to have 17,500 units on hand at the end of the month, how many units must be produced during the month?

Answers

Answer:

41,000 units

Explanation:

The computation of units must be produced during the month is shown below:-

Units Produced = Units at Year End - Units at beginning + Units Sold

= 17,500 units - 16,500 units + 40,000  units

= 57,500 units - 16,500  units

= 41,000 units

Therefore for computing the units produced during the month we simply applied the above formula.

The company must produce 41000 units during the month. The entire cost of direct materials and labor as well as the total cost of manufacturing overhead may be added together to get the overall cost of the product.

Below is a calculation of the number of units that must be generated during the month:-

Units Produced = Units at Year's End - Units at Start + Units Sold

40,000 units + 17,500 units less than 16,500 units.

16,500 units less than 57,500 units

= 41,000 units

Therefore, we used the aforementioned calculation to calculate the number of units generated throughout the month.

All of the direct and indirect expenses firms incur when producing a good or rendering service are referred to as production costs. Various expenditures, including labor, raw materials, consumable manufacturing supplies, and general overhead, might be included in production costs.

Various expenditures, including labor, raw materials, consumable manufacturing supplies, and general overhead, might be included in production costs.

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Nature's Garden, a new restaurant situated on a busy highway in Pomona, California, specializes in a chef's salad selling for $7. Daily fixed costs are $1,710, and variable costs are $4 per meal. With a capacity of 950 meals per day, the restaurant serves an average of 900 meals each day.Requried:a. Determine the current average cost per meal.b. A busload of 30 Girl Scouts stops on its way home from the San Bernardino National Forest. The leader offers to bring them in if the scouts can all be served a meal for a total of $150. The owner refuses, saying he would lose $0.60 per meal if he accepted this offer. How do you think the owner arrived at the $0.60 figure? Comment on the owner's reasoning.c. A local businessman on a break overhears the conversation with the leader and offers the owner a one-year contract to feed 300 of the businessman's employees one meal each day at a special price of $4.50 per meal. Should the restaurant owner accept this offer? Why or why not?

Answers

Answer:

Nature's Garden

a. Determination of the current average cost per meal:

Variable cost per meal = $3,800 ($4 x 950) based on full capacity

Fixed costs per day =        $1,710

Total costs =                     $5,510

Average cost per meal = $5,510/950 = $5.80

b. Girl Scouts' offer of $150 for 30 girls:

Offered price per person = $5 ($150/30)

Projecting a loss of $0.60 per meal, this gives a total loss of $18 ($0.60 x 30)

Projected revenue from the offer = $150 + $18 = $168

Projected revenue per meal = $168/30 = $5.60

Actual revenue to be received per meal = $5.00

Loss of $0.60

The owner arrived at the $0.60 loss because his total costs per meal was $5.60.

c. Since the variable cost per meal is $4, the restaurant owner could accept the offer if the additional 300 meals will not increase his daily fixed costs due to lack of capacity.  If the fixed costs increase with this addition, then it may not be reasonable to accept the offer.  Based on this offer, the contribution to defraying fixed costs, given present capacity, is only $0.50 ($4.50 - $4) per meal.

Explanation:

Selling price of chef's salad = $7

Daily fixed costs = $1,710

Variable costs per meal = $4

Meals capacity per day = 950

Average meals = 900

Nature's Garden has a fixed cost of $1,710 based on current capacity of 950 meals per day.  The fixed cost may increase with increasing capacity.  This fact must be borne in mind when making decisions.

The classical dichotomy is the separation of real and nominal variables. The following questions test your understanding of this distinction. Eleanor spends all of her money on paperback novels and mandarins. In 2012, she earned $27.00 per hour, the price of a paperback novel was $9.00, and the price of a mandarin was $3.00. Which of the following give the nominal value of a variable? Check all that apply. The price of a mandarin is 0.33 paperback novels in 2012. Eleanor's wage is 3 paperback novels per hour in 2012. The price of a mandarin is $3.00 in 2012. Which of the following give the real value of a variable? Check all that apply. The price of a paperback novel is $9.00 in 2012. Eleanor's wage is $27.00 per hour in 2012. The price of a paperback novel is 3 mandarins in 2012. Suppose that the Fed sharply increases the money supply between 2012 and 2017. In 2017, Eleanor's wage has risen to $54.00 per hour. The price of a paperback novel is $18.00 and the price of a mandarin is $6.00. In 2017, the relative price of a paperback novel is . Between 2012 and 2017, the nominal value of Eleanor's wage , and the real value of her wage . Monetary neutrality is the proposition that a change in the money supply nominal variables and real variables.

Answers

Answer:

In 2012, she earned $27.00 per hour, the price of a paperback novel was $9.00, and the price of a mandarin was $3.00. Which of the following give the nominal value of a variable? Check all that apply.

The price of a mandarin is $3.00 in 2012.

Nominal values are expressed in terms of current money. real variables are represented in terms of other goods or services.

Which of the following give the real value of a variable? Check all that apply.

The price of a paperback novel is 3 mandarins in 2012.

Nominal values are expressed in terms of current money. real variables are represented in terms of other goods or services.

Suppose that the Fed sharply increases the money supply between 2012 and 2017. In 2017, Eleanor's wage has risen to $54.00 per hour. The price of a paperback novel is $18.00 and the price of a mandarin is $6.00. In 2017, the relative price of a paperback novel is still 3 mandarins.  

Between 2012 and 2017, the nominal value of Eleanor's wage doubled, and the real value of her wage remained constant.

Monetary neutrality is the proposition that a change in the money supply affects nominal variables and does not affect real variables.

The maximum tax rate on estates and gifts: Question 7 options: is gradually increasing. has remained constant. is gradually declining. has increased sharply.

Answers

Is gradually declining.

A firm has current assets of $36,000, cash of $5,000, current liabilities of $20,000, total assets of $80,000 and total liabilities of $45,000. What is its net working capital?
a. $16,000
b. $28,000
c. $35,000
d. $44,000

Answers

Answer:

Option A, $16000, is the right answer.

Explanation:

The current assets = $36000

Cash = $5000

Current liabilities = $20000

Total assets = $80000

Total liabilities  = $45000

Use the below formula to find the net working capial.

Net working capital = Current assets - Current Liabilities

Net working capital = 36000 – 20000

Net working capital = 16000

Therefore, option A, $16000 is correct.

The ratio of sales to invested assets, which is also a factor in the DuPont formula for determining the rate of return on investment, is called

Answers

Answer:

Investment turnover

Explanation:

Investment turnover is used to compare the revenue earned by a business to the invested assets (equity or debt). It measures how effectively the business is using investment to generate profit.

The number of times investment is converted to revenue is calculated using this method (that is the turnover).

This metric is used in the Dupont formula.

Dupont formula is a financial ratio that evaluates a company's ability to increase return on equity.

Three main components of the Dupont formula are: profit margin, total asset turnover, and financial leverage.

Jamie has worked for ABC Printing for 5 years. During this period ABC Printing has contributed $25,000 to her non-contributory retirement plan. Assuming ABC uses graded schedule vesting, how much will Jamie be able to roll into an IRA if she left ABC Printing after 5 years?

Answers

Answer:

$20,000

Explanation:

Generally a graded vesting schedule lasts 6 years. After the first 2 years, the employee is entitled to 20% of accrued benefits (in this case contributions to her retirement plan). Then, the employee will be vested an additional 20% of the contribution benefits per year until the sixth year when 100% of the benefits are vested.

In this case, Jamie would be able to roll out $25,000 x 80% = $20,000

End of year                 % vested

2                                        20%

3                                        40%

4                                        60%

5                                        80%

6                                        100%

1. Name one practice that is prohibited under Section 8 of RESPA.

2. List at least three categories under ECOA on which creditors may not base credit decisions.

3. Define rescission as it relates to a mortgage loan transaction.

4. List at least two practices that are not prohibited with regard to appraisers.

Answers

Answer:

The answer is below



Explanation:

1. Pactice that is prohibited under Section 8 of RESPA includes the following:

i.  Payment or Receive of "things of value" for business referrals

ii.  Fee splitting when the job or work is yet to be done, to earn a part of the fee

iii. Excessive charges such as mark-ups, double billing, etc.

iv. Void agreement or understanding with regard to referrals and settlement services

2.  Categories under ECOA on which creditors may not base credit decisions are:

Race, Color, Religion, Nationality, Sex, Marital status, Age, Receipt of public assistance and Exercise of rights under the Consumer Credit Protection Act

3.  Rescission is a term that describes a form of legal remedy that voids an agreement between two parties and take back both parties to the initial state before the transaction.

Recission right is however applicable to specific loan transactions, for example refinances and home equity lines of credit.

4.  Practices that are not prohibited with regard to appraisers.

i.  Payment or Receive of "things of value" for business referrals

ii.  Fee splitting when the job or work is yet to be done, to earn a part of the fee

iii. Excessive charges such as mark-ups, double billing, etc.

iv. Void agreement or understanding with regard to referrals and settlement services.

The answer to the queries given above are stated as follows:-

1.  Cash or other 'things of value' as defined under section 8 of the Act are stated to be not to be used by any such firm for the purpose of business referrals.

2. A banking or financial institutions providing credit facilities may not base their credit decisions on factors like race, sex, religion, nationality, beliefs, etc which are irrelevant to the credibility of a borrower in the market.

3. Rescission relates to the revoking, calling back, reversing the judgement passed by the law and make necessary amendments to the law as may be deemed fit.

4. An appraiser may not try to influence the property through the way of wrongful behavior like fraud,coercion or impersonation. And any other such act which relates to criminal conduct must be avoided by the appraiser.

Things of value refer to such assets or class of assets that are easily liquidated and their values are easily realizable due their liquidity and acceptability in the market.

There shall be no discrimination for providing credit facilities on the bases of unrelated phenomenon such as sex, religion, race, castes of a person and shall be purely based on credibility of such person.

Rescission relates to the mortgage loan transaction in a way that it is available to the parties of such transaction in cases where there is refinancing or a home mortgage against finance facility.

Any such agreements which are void ab initio, void during the contract or voidable at the end of any party are not allowed for appraisers so it can be concluded that only legally bound contracts are allowed.

There shall be no acts of impersonation, frauds leading to coercion are also prohibited in case of appraisers of a property so only genuine appraisal of a property is allowed.

Hence, the correct statements are mentioned above for all the queries as asked under the headings of 1, 2, 3 and 4 and hold true.

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Suppose you invested in the Ishares High Yield Fund​ (HYG) a month ago. It paid a dividend of today and then you sold it for . What was your dividend yield and capital gains yield on the​ investment?

Answers

Complete Question:

Suppose you invested $100 in the Ishares High Yield Fund HYG your dividend yield and capital gains yield on the investment?

It paid a dividend of $2 today and then you sold it for $95. What was Dividend Yield and Capital Gains Yield on the investment?

Answer:

Dividend Yield is 2%

Capital Gains Yield is -5%

Explanation:

Dividend Yield:

We can calculate the Dividend Yield using the following formula:

Dividend Yield = D0 / Initial Stock Price

Here

D1 was Dividend paid just now and is $2 per share

Initial Stock Price before the dividend payment was $100 per share

By putting values, we have:

Dividend Yield = $2 per share / $100 per share = 2%

Capital Gains Yield:

We can find capital gains yield by using following formula:

Capital Gains Yield = (P1 - P0) / P0

Here

P1 is $95

P0 is $100

By putting values we have:

Capital Gains Yield = ($95 - $100) / $100 = -5%

In a partnership liquidation, the final cash distribution to the partners should be made in accordance with the

Answers

Answer: B) balances of the partners' capital accounts.

Explanation:

Final cash distributions should be made proportionally to partners based on what they have in their Capital Accounts.

The balance in the Capital accounts of Partners shows the level of contribution that each partner has made to the business as well as their ownership proportion. When cash is to be distributed finally, it should therefore be based on the proportion of these Capital account balances to reflect the contribution and ownership.

In a concentrated network configuration:


a. firms perform a supply chain activity in one location and serve foreign locations from it

b. firms allow each site on the network to operate with full autonomy

c. firms tightly link operations and supply chain activities to one another

d. firms perform a supply chain activity in various countries

Answers

Answer:

B

Explanation:

Here, in this question, we are to select which of the options is best.

The correct answer to this question is that in a concentrated network configuration, firms allow each site on the network to operate with full autonomy.

What this means is that each site in the network operate independently of the other sites.

A site is thus an autonomous entity but still part of the concentrated network

The Association of Organic Food Growers, which does not include all organic farmers and ranchers, refuses to deal with any parties who do not carry the products of its members. This group boycott is Group of answer choices a situation that neither restrains trade nor harms competition. not within the scope of the Sherman Act. a per se violation of antitrust law. subject to analysis under the rule of reason.

Answers

Answer:

a per se violation of antitrust law.

Explanation:

The antitrust laws can be defined as those laws that are created by the US government to protect consumers from unfair means of competition in market. The aim of creating such laws is to ensure the protection of customers from corruptive business practices and also to ensure safe healthy competitive environment among same business companies.

In the given scenario, the Association of Organic Food Growers is violating the antitrust law by boycotting farmers, ranchers, etc. The antitrust laws are violated by companies in several ways among them is by boycotting.

Boycotting can be defined as an agreement between several companies that excludes a group of customers or market to avert them from buying aanyy goods or products.

This boycotting agreement is a per se violation of antitrust law.

Additional business in the form of a special order of goods or services should be accepted when the incremental revenue equals the incremental costs.
A. True
B. False

Answers

Answer: False

Explanation:

The aim of the business is to ideally make a profit. As a result, Additional business should only be accepted if the incremental cost of doing so is less than the incremental revenue accrued from doing so.

If incremental revenue equals incremental cost, there is no point in engaging in the additional business as it brings no extra value to the business.  

In what way did Henry Ford’s use of the assembly-line method of production represent an advance in technology in automobile manufacturing?

Answers

Answer: a. It allowed workers to specialize on specific tasks and become more productive.

Explanation:

The Assembly line method of production that Henry Ford initiated at his plant was a technological game changer as it enabled workers to assemble cars faster and this mass produce Ford cars at a cheaper rate for the masses.

The Assembly line worked by putting workers at various stages of the assembly line where they would focus on installing only one or a few parts into the prospective vehicle. This way they were able to focus on that specific task, become more adept at it and thus become more productive.

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