Answer:
165 oversize rackets = 32 machine hours (79.71% of total production)
42 standard size rackets = 7 machine hours (20.29% of total production)
total profit contribution = (165 x $15) + (42 x $10) = $2,895
Explanation:
materials machine hours profit
standard size 0.125 kg 1/6 $10
oversize 0.4 kg 1/5 $15
constraints 80 kilograms of materials
40 hours of manufacturing
profit per machine hour:
standard size $10 x 6 = $60 x 40 hours = $2,400 (total possible production = 240 rackets)
oversize $15 x 5 = $75 x 40 hours = $3,000 (total possible production = 200 rackets)
profit per kilogram of alloy:
standard size $10 / 0.125 = $80 x 80 kgs = $6,400 (total possible production = 480 rackets)
oversize $15 / .4 = $37.50 x 80 hours = $3,000 (total possible production = 200 rackets)
since the most important constraint is the manufacturing hours available, the company should try to produce the products that yield the highest contribution margin per machine hour. In this case, at least 20% of total production must be standard size rackets, so the remaining 80% should be oversize rackets that yield a higher profit.
165 oversize rackets = 32 machine hours (79.71% of total production)
42 standard size rackets = 7 machine hours (20.29% of total production)
total manufacturing time = 40 hours
if we produce 166 oversize rackets and 41 standard size rackets, total manufacturing time will exceed 40 hours (40.03 hours exactly).
A car dealership union negotiates a contract that dramatically increases the salaries of all salesmen. If one of the salesmen is thinking of changing careers to be a hardware salesman, his opportunity cost:___________.
a. Would not be affected
b. Of becoming a hardware salesman would decrease
c. Of becoming a hardware salesman would increase
d. None of the above
Answer:
c. Of becoming a hardware salesman would increase
Explanation:
Opportunity cost defines that when a person gets to benefit from another than he received. So, that person takes another benefit from where he gets more benefit or we can say that he will choose the best alternative.
According to the given situation, A car dealership association is negotiating a contract that significantly increases all salesmen 's wages. Now, the Opportunity cost when one of the salespersons feels that shifting the path to hardware is of becoming a hardware salesperson that would increase.
Hence, the right answer is C
Begin by reviewing the labels for the change in stockholders' equity and then enter the amounts for each situation.
Three situations about Timmy Company's issuance of stock and declaration and payment of dividends during the year ended January 31, 2017. follow.
Requirements.
Begin by reviewing the labels for the change in stockholders' equity and then enter the amounts for each situation.
Situation A Situation B Situation C
Total stockholders' equity, January 31, 2016
Add: Issuance of stock
Net income
Less: Dividends declared
Net loss
Total stockholders' equity, January 31, 2017
For each situation, use the accounting equation and the statement of retained earnings to compute the amount of Timmy's net income or net loss during the year ended January 31 2017.
1. Timmy issued $13 million of stock and declared no dividends.
2. Timmy issued no stock but declared dividends of $17 million.
3. Timmy issued $20 million of stock and declared dividends of $27 million.
Answer:
Note: The missing part of the question is
" 2017'million 2016'million
Total asset 77 50
Total liability 18 13"
Solution:
Stockholders Equity at year end
2017 2016
Assets 77 50
Less: liabilities -18 -13
Equity at end 59 37
Note: Situation 1, 2 and 3 is the same as question 1, 2 and 3
Situation 1 Situation 2 Situation 3
$'million $'million $'million
Total stockholders Equity 37 37 37
Jan 31 ,2016
Add: Issuance of stock 13 0 20
Less: dividend declared 0 -17 -27
Net income 9 39 29
Total stockholders Equity 59 59 59
January 31,2017
What is the difference between an optimistic approach and a pessimistic approach to decision making under assumed uncertainty
Answer:
The optimistic approach examines the best possible outcome in a given situation and chooses the 'best of the best' while the pessimistic approach examines the worst possible outcome in a given situation and chooses the 'best of the worst'.
Explanation:
Decision making under assumed uncertainty is an approach that is taken when the outcomes of future events are not entirely known. The Hurwicz criterion provides a basis on which the pessimistic and optimistic outcomes can be balanced. This criterion allows the person who makes the decision to chose a coefficient of pessimism signified by alpha (α) and it is a decimal that is graded between 0 and 1. This number signifies the worst possible outcome whereas, the number (1-α) signifies the best outcome.
So, the optimistic approach examines the best possible outcome in a given situation and allows the decision-maker to choose the 'best of the best', while the pessimistic approach examines the worst possible outcome in a given situation and the decision-maker to choose the 'best of the worst'
In the short run, the quantity of output that firms supply can deviate from the natural level of output if the actual price level in the economy deviates from the expected price level. Several theories explain how this might happen.
Answer: fall, reducing, fall below
Explanation:
the misperceptions theory asserts that changes in the price level can temporarily mislead firms about what is happening to their output prices. Consider a soybean farmer who expects a price level of 100 in the coming year. If the actual price level turns out to be 90, soybean prices will __________ , and if the farmer mistakenly assumes that the price of soybeans declined relative to other prices of goods and services, she will respond by __________ the quantity of soybeans supplied. If other producers in this economy mistake changes in the price level for changes in their relative prices, the unexpected decrease in the price level causes the quantity of output supplied to __________the natural level of output in the short run.
There is strong evidence that many investors suffer from familiarity bias and overconfidence bias. Can you explain why these biases might exist
Answer:
The bias of most investors suffering from familiarity or overconfidence bias can be attributed to human factor of being comfortable with what the person knows. For example, Investor A knows the owner of Company B, he or she would be comfortable to invest in Company B because he or she is familiarize with the owner or the company.
On the other-hand, when an investor reviews the businesses that he or she has invested in that are doing well, the individual will become overconfident in his or her ability to know and find good prospects to invest. The investor will become laid back in doing his investigation before investing in subsequent businesses.
Explanation:
Inventory at the end of April, 2008: 200 unitsExpected demand during April, 2008: 50 unitsProduction expected during April, 2008: 100 unitsWhat was the inventory at the end of March 2008?
Answer:
beginning inventory= 150 units
Explanation:
Giving the following information:
Endiing inventory= 200 units
Sales= 50 units
Production= 100
To calculate the beginning inventory, we need to use the following formula:
Production= sales + ending inventory - beginning inventory
100= 50 + 200 - beginning inventory
beginning inventory= 250 - 100
beginning inventory= 150 units
On October 10, the stockholder's equity of Sherman Systems appears as follows:
Common stock–$10 par value, 72,000 shares authorized,
issued, and outstanding $720,000
Paid-in capital in excess of par value, common stock 216,000
Retained earnings 864,000
Total stockholders’ equity $1,800,000
1. Prepare journal entries to record the following transactions for Sherman Systems.
1A. Purchased 5,000 shares of its own common stock at $25 per share on October 11.
1B. Sold 1,000 treasury shares on November 1 for $31 cash per share.
1C. Sold all remaining treasury shares on November 25 for $20 cash per share.
2. Prepare the revised equity section of its balance sheet after the October 11 treasury stock purchase.
Answer and Explanation:
The journal entries are shown below:
1A. Treasury Stock (5,000 × $25) $75,000
To Cash $75,000
(Being the purchased of its own common stock is recorded)
1B. Cash (1,000 × $31 shares) $31,000
To Treasury Stock (1,000 × $25) $25,000
To Paid-in Capital from Sale of Treasury Stock $6,000
(Being the sale of treasury stock is recorded)
1C. Cash (4,000 × $20) $80,000
Paid-in Capital from Sale of Treasury Stock $6,000
Retained Earnings $14,000
To Treasury Stock 99,000 (4,000 × 25) $100,000
(Being the sale of treasury stock is recorded)
2. The preparation of the revised equity section of its balance sheet is presented below:
Common stock 36,000 shares authorized, issued $720,000
Paid in capital in excess of par value
, common stock. $216,000
Retained Earnings. $864,000
Less: Treasury Stock - 5,000 shares -$75,000 $789,000
Total stockholders' equity $1,725,000
Milltown Company specializes in selling used cars. During the month, the dealership sold 26 cars at an average price of $15,400 each. The budget for the month was to sell 24 cars at an average price of $16,400. Compute the dealerships sales volume variance for the month.
Answer:
Sales volume variance = $32,800 favorable
Explanation:
Please refer to the below for Sales Volume Variance formula and calculation.
Sales Volume Variance = (Budgeted sales volume - Actual sales volume) Standard price per unit
= ( 24 units - 26 units) $16,400
= ( 2 units ) $16,400
= $32,800 favorable
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 820 Selling price per unit $ 2,130 Cost per unit $ 1,500 Variable selling and administrative expense (per unit) $ 75 Fixed selling and administrative expense (per year) $ 400,000 Interest expense for the year $ 29,000 Required: Prepare the company’s budgeted income statement for the year.
Answer:
Budgeted Income Statement for the year
Sales (820 units × $ 2,130) $1,746,600
Less Cost of Sales (820 units × $ 1,500) ($1,230,000)
Gross Profit $516,000
Less Operating Expenses :
Selling and administrative expense
Variable (820 units × $ 75) ($61,500)
Fixed ($400,000)
Operating Profit $54,500
Less Non - Operating Expenses :
Interest ( $29,000)
Net Income / (Loss) $25,500
Explanation:
Income Statement shows the company`s performance from its operations.
Income / (Loss) = Sales - Expenses.
Jackson Industries uses a standard cost system in which direct materials inventory is carried at standard cost. Jackson has established the following standards for one unit of product: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 6 pounds $4.30 per pound $25.80 Direct labor 2.40 hours $5.00 per hour $12.00 During May, Jackson purchased 145,600 pounds of direct material at a total cost of $655,200. The total factory wages for May were $258,800, 90 percent of which were for direct labor. Jackson manufactured 21,000 units of product during May using 122,800 pounds of direct material and 50,900 direct labor-hours. The price variance for the direct material acquired by Jackson Industries during May is:
Answer:
Direct material price variance= $29,120 unfavorable
Explanation:
Giving the following information:
Standard: Direct materials 6 pounds $4.30 per pound $25.80
Actual= Jackson purchased 145,600 pounds of direct material at a total cost of $655,200.
To calculate the direct material price variance, we need to use the following formula:
Direct material price variance= (standard price - actual price)*actual quantity
Actual price= 655,200/145,600= $4.5
Direct material price variance= (4.3 - 4.5)*145,600
Direct material price variance= $29,120 unfavorable
The accounts receivable turnover is computed as __________ divided by __________. sales; accounts receivable sales; average accounts receivable sales; net income accounts receivable; net income
Answer:
sales ; average accounts receivables
Explanation:
Accounts receivable turnover refers to how a business firm manage its assets. Businesses, companies uses accounts receivables to know and quantify how perfectly goods bought on credit by their customers are being paid back. It also measures how business gives credit and collects back it's debt .It is calculated as net sales divided by average accounts receivables.
you are forming a new company that delivers food to residents across college campuses. the primary focus is
Answer:
your primary focus should be on making sure that your system works
Explanation:
When doing this your primary focus should be on making sure that your system works. Meaning that you need to make sure that you have all of the necessary equipment to get the deliveries out on time and everything worked out so that you can assure customer satisfaction. Otherwise, customers will begin to review your company badly and as dysfunctional, which will destroy your business before it can even get started.
n the _____stage of team development, team members often become intensely loyal to one another and feel mutual accountability for team successes and failures.
Answer:
Performing.
Explanation:
In other to get to this stage of team development, you must have passed through the certain other three stages where you are been formed as a group and also stormed before performance.
Group seen to have made it to their performing stage are seen to displays a level of competence experience and also trust that is less apparent in the earlier stages of group development. Cohesion is seen to be the vital driver in this stage of team development. Also strong relationships is maintained amongst its members facilitating smooth flow of work; and can certainly work without supervision too.
Shaw Company engages Maya Company to produce a large machine, install the machine, and train their employees on the machine. The machine, installation, and training are distinct, and Maya determines that the contract includes three separate performance obligations. The machine, installation, and training typically cost $800,000 $100,000, and $100,000 respectively when each is provided in a separate contract. Shaw and Maya agree to a total contract price of $920,000.
Required:
How much of the contract price should Maya allocate to the machine, installation, and training, respectively?
Answer:
Machine= 736,000
Installation= 92,000
Training= 92,000
Explanation:
Giving the following information:
The machine, installation, and training typically cost $800,000 $100,000, and $100,000 respectively when each is provided in a separate contract.
Shaw and Maya agree to a total contract price of $920,000.
First, we need to determine the proportion of each:
Machine= 800,000/1,000,000= 0.8
Installation= 100,000/1,000,000= 0.1
Training= 100,000/1,000,000= 0.1
Now, we can allocate:
Machine= 0.8*920,000= 736,000
Installation= 0.1*920,000= 92,000
Training= 0.1*920,000= 92,000
When harvesting a venture, the outright purchase of the going concern by managers, employees, or external buyers is known as going public. Question 2 options:
Answer:
In simple words, Harvesting seems to be the tool used by traders and investors to get out of business and, preferably, to recover the interest of their investments in the company. It's about more than trying to sell and having to leave a company. It includes collecting interest, risk reduction, and developing opportunities for the future.
Whenever a marketing plan includes a harvest tactic, investment firms and borrowers are convinced that the proprietors aim to establish the market and start selling it to either international shareholders or go to another corporation.
The three conditions that characterize difficult managerial decisions concerning resources, capabilities, and core competencies are
Answer:
uncertainty, complexity, and intra-organizational conflicts.
Explanation:
Managerial decisions define that any decision that can be taken for the benefit of the organization also these types of decision set targets for the income of the company moreover it decides what type of product should be sell and the hiring of employees who should be into the organization or who should not be in the organization etc.
According to the given situation, Management decisions on capital, expertise, and core competencies are disputes of uncertainty, complexity, and intra-organizational existence.
According to the producer price index database maintained by the Bureau of Labor Statistics, the average cost of computer equipment fell 3.8 percent between January and December 2016. Let's see whether these changes are reflected in the income statement of Computer Tycoon Inc. for the year ended December 31, 2016.
2016 2015
Sales Revenue $ 109,000 $ 133,500
Cost of Goods Sold 64,500 75,100
Gross Profit 44,500 58,400
Selling, General, and Administrative Expenses 36,900 38,800
Interest Expense 590 520
Income before Income Tax Expense 7,010 19,080
Income Tax Expense 1,500 5,900
Net Income $ 5,510 $ 13,180
Required:
1. Compute the times interest earned ratios for 2016 and 2015. (Round your answers to 1 decimal place.) Times Interest Earned 2015 2016
2. Does Computer Tycoon generate sufficient net income in both years before taxes and interest) to cover the cost of debt financing?
a. Yes
b. No
Answer:
A.
2015 37.7
2016 12.9
B. Yes
Explanation:
Computation of the times interest earned ratios for 2016 and 2015
First step is to find the EBIT
EBIT: 2016 $ 2015 $
Gross profit 44,500 58,400
Less Selling, General and Administrative expenses (36,900) (38,800)
EBIT 7,600 19,600
Second step is to compute the times interest earned ratios for 2016 and 2015 using this formula
Time interest earned = EBIT / Interest expense
Let plug in the formula
Time interest earned 2016 2015
EBIT $7,600 $19,600
÷Interest expense $590 $520
=Time interest earned 12.9 37.7
Therefore the Time interest earned will be :
2015 37.7
2016 12.9
2. Yes Computer Tycoon generate sufficient net income in both 2015 and 2016 before taxes and interest in order to cover the cost of debt financing.
Chapman Company, a major retailer of bicycles and accessories, operates several stores and is a publicly traded company. The comparative balance sheet and income statement for Chapman as of May 31, 2014, are as follows. The company is preparing its statement of cash flows.
CHAPMAN COMPANY
COMPARATIVE BALANCE SHEET
AS OF MAY 31
2014 2013
Current assets
Cash $28,560 $20,820
Accounts receivable 75,850 58,940
Inventory 220,080 250,770
Prepaid expenses 9,148 7,580
Total current assets 333,638 338,110
Plant assets
Plant assets 600,070 502,460
Less: Accumulated depreciation—plant assets
150,060 125,320
Net plant assets 450,010 377,140
Total assets $783,648 $715,250
Current liabilities
Accounts payable $123,190 $115,200
Salaries and wages payable 47,660 72,420
Interest payable 27,980 25,490
Total current liabilities 198,830 213,110
Long-term debt
Bonds payable 70,770 100,640
Total liabilities 269,600 313,750
Stockholders’ equity
Common stock, $10 par 370,460 280,890
Retained earnings 143,588 120,610
Total stockholders’ equity 514,048 401,500
Total liabilities and stockholders’ equity
$783,648 $715,250
CHAPMAN COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED MAY 31, 2014
Sales revenue $1,255,260
Cost of goods sold 722,590
Gross profit 532,670
Expenses
Salaries and wages expense 252,580
Interest expense 75,830
Depreciation expense 24,740
Other expenses 8,980
Total expenses 362,130
Operating income 170,540
Income tax expense 43,250
Net income $127,290
The following is additional information concerning Chapman’s transactions during the year ended May 31, 2014.
1. All sales during the year were made on account.
2. All merchandise was purchased on account, comprising the total accounts payable account.
3. Plant assets costing $97,610 were purchased by paying $17,610 in cash and issuing 8,000 shares of stock.
4. The "other expenses" are related to prepaid items.
5. All income taxes incurred during the year were paid during the year.
6. In order to supplement its cash, Chapman issued 957 shares of common stock at par value.
7. Cash dividends of $104,312 were declared and paid at the end of the fiscal year.
Prepare a statement of cash flows for Chapman Company for the year ended May 31, 2014, using the direct method. (A reconciliation of net income to net cash provided is not required.) (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Answer:
Chapman Company
Statement of Cash Flows for the year ended May 2014:
Operating activities:
Cash from customers $1,238,350
Cash to suppliers ($683,910)
Salaries & Wages (277,340)
Other expenses (10,548)
Income Tax (43,250)
Net Cash from operating activities 223,302
Investing activities:
Plant (17,610) (17,610)
Financing activities:
Dividends (104,312)
Interest (73,340)
Bonds (29,870)
Issue of stock 9,570
Net cash from financing activities (197,952)
Net cash flows $7,740
Explanation:
a) Data and Calculations:
1. CHAPMAN COMPANY
COMPARATIVE BALANCE SHEET
AS OF MAY 31
2014 2013
Current assets
Cash $28,560 $20,820
Accounts receivable 75,850 58,940
Inventory 220,080 250,770
Prepaid expenses 9,148 7,580
Total current assets 333,638 338,110
Plant assets
Plant assets 600,070 502,460
Less: Accumulated depreciation
—plant assets 150,060 125,320
Net plant assets 450,010 377,140
Total assets $783,648 $715,250
Current liabilities
Accounts payable $123,190 $115,200
Salaries & wages payable 47,660 72,420
Interest payable 27,980 25,490
Total current liabilities 198,830 213,110
Long-term debt
Bonds payable 70,770 100,640
Total liabilities 269,600 313,750
Stockholders’ equity
Common stock, $10 par 370,460 280,890
Retained earnings 143,588 120,610
Total stockholders’ equity 514,048 401,500
Total liabilities and stockholders’
equity $783,648 $715,250
2. CHAPMAN COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED MAY 31, 2014
Sales revenue $1,255,260
Cost of goods sold 722,590
Gross profit 532,670
Expenses
Salaries and wages expense 252,580
Interest expense 75,830
Depreciation expense 24,740
Other expenses 8,980
Total expenses 362,130
Operating income 170,540
Income tax expense 43,250
Net income $127,290
3) Cash Receipts:
Cash from customers $1,238,350
Issue of stock 9,570
4) Cash Payments:
Cash to suppliers $683,910
Plant 17,610
Income Tax 43,250
Dividends 104,312
Salaries & Wages 277,340
Interest 73,340
Other expenses 10,548
Bonds 29,870
5) Prepaid Expenses
Ending balance $9,148
Expenses 8,980
Beginning balance 7,580
Cash paid $10,548
6) Accounts Receivable:
Beginning balance $58,940
Sales 1,255,260
Ending balance 75,850
Cash received $1,238,350
7) Accounts Payable:
Beginning balance $115,200
Purchases 691,900
Ending balance $123,190
Cash paid $693,910
8) Purchases:
Ending inventory $220,080
Cost of goods sold 722,590
Beginning inventory 250,770
Purchases $691,900
9) Salaries and Wages Payable
Beginning balance $72,420
Expenses 252,580
Ending balance 47,660
Cash paid $277,340
10) Interest payable:
Beginning balance $25,490
Expense 75,830
Ending balance 27,980
Cash paid $73,340
The Berndt Corporation expects to have sales of $12 million. Costs other than depreciation are expected to be 75% of sales, and depreciation is expected to be $1.5 million. All sales revenues will be collected in cash, and costs other than depreciation must be paid for during the year. Berndt’s federal-plus-state tax rate is 40%. Berndt has no debt. a. Set up an income statement. What is Berndt’s expected net income? Its expected net cash flow? b. Suppose Congress changed the tax laws so that Berndt’s depreciation expenses doubled. No changes in operations occurred. What would happen to reported profit and to net cash flow? c. Now suppose that Congress changed the tax laws such that, instead of doubling Berndt’s depreciation, it was reduced by 50%. How would profit and net cash flow be affected? d. If this were your company, would you prefer Congress to cause your depreciation expense to be doubled or halved? Why? Ehrhardt, Michael C.. Corporate Finance: A Focused Approach (p. 93). Cengage Learning. Kindle Edition.
Answer:
a) Berndt Corporation
Income Statement
Sales revenue $12,000,000
All cost other than depreciation ($9,000,000)
Depreciation expense ($1,500,000)
EBIT $1,500,000
Income taxes ($600,000)
Net income $900,000
net cash flow = $900,000 + $1,500,000 = $2,400,000
b) if depreciation doubles, net profit will decrease to $0, but net cash flows will increase to $3,000,000
c) if depreciation decreases by 50%, net profit will increase to $1,350,000, but net cash flows will decrease to $2,100,000
d) Once a company is operating, its value is generally calculated based on its cash flows, therefore, I would select the option that increases the company's net cash flows (Congress doubles depreciation expense).
Green Inc. made no adjusting entry for accrued and unpaid employee wages of $38,000 on December 31. This error would Multiple Choice Understate assets by $38,000. Overstate net income by $38,000. Understate net income by $38,000. Have no effect on net income.
Answer:
The answer is B. Overstate net income by $38,000.
Explanation:
Accrued expense is an expense that has been enjoyed or incurred but has been paid for. Examples of an accrued expense are unpaid wages/salary, unpaid electricity bill etc.
Usually, the adjusting entry for accrued expense is to debit the expense and debit increases expense while credit decreases it. Since there is no adjusting entry, that means no expense is being recognized on the income statement for this transaction. Hence, the net income increases (overstated). because ordinarily expense reduces net income.
The Jones Company has just completed the third year of a five-year MACRS recovery period for a piece of equipment it originally purchased for $302,000. a. What is the book value of the equipment? b. If Jones sells the equipment today for $184,000 and its tax rate is 35%, what is the after-tax cash flow from selling it? c. Just before it is about to sell the equipment, Jones receives a new order. It can take the new order if it keeps the old equipment. Is there a cost to taking the order and if so, what is it? Explain. (Assume the new order will consume the remainder of the machine's useful life.) Note: Assume that the equipment is put into use in year 1.
Answer:
a. What is the book value of the equipment?
$86,976b. If Jones sells the equipment today for $184,000 and its tax rate is 35%, what is the after-tax cash flow from selling it?
($184,000 - $86,976) x (1 - 35%) = $97,024 x 65% = $63,065.60c. Just before it is about to sell the equipment, Jones receives a new order. It can take the new order if it keeps the old equipment. Is there a cost to taking the order and if so, what is it?
the cost to taking the new order is the opportunity cost of selling the equipment, which is $63,065.60.Explanation:
MACRS depreciation rate:
Year % Depreciation expense Carrying value
1 20% $60,400 $241,600
2 32% $96,640 $144,960
3 19.20% $57,984 $86,976
4 11.52% $34,790.40 $52,185.60
5 11.52% $34,790.40 $17,395.20
6 5.76% $17,395.20 $0
according to the nist the process of identifying risk, assessing risk, and taking steps to reduce risk to an
Answer: Risk management
Explanation:
According to the nist, the process of identifying risk, assessing risk, and taking steps to reduce risk to an acceptable level is referred to as the risk management.
Risk management simply has to do with the identification of risks before they occur. In such scenarios, the business owners can either avoid the risk or minimize the impact of the risk.
Stephanie’s company uses a job order cost system. Stephanie just made a $15,000 debit to the Work in Process Inventory account for raw materials assigned to job 1074. Which of the following steps does Stephanie also need to complete?
A. Posting a $15,000 decrease in Direct Labor to the subsidiary ledger for job 1074.B. Posting a $15,000 increase in Direct Materials to the job cost sheet for job 1074.C. Posting a $15,000 increase in Direct Labor to the job cost sheet for job 1074.D. Posting a $15,000 increase in Raw Materials to the subsidiary ledger for job 1074.
Answer:
B. Posting a $15,000 increase in Direct Materials to the job cost sheet for job 1074
Explanation:
According to the given situation, Materials account of the specific work will be debited as costs are allocated to Jobs. Assigning those costs to operate would reduce the balance of inventories.
Therefore from the above explanation the correct answer is b as it has been posted $15,000 which is rising the direct material to the job cost sheet for job 1074.
Troy Enterprises uses a continuous review inventory control system. The firm operates 50 weeks per year, with an annual demand of 50,000 units, an ordering cost of $35 per order, a holding cost of $1 per unit per year, a lead time of 3 weeks, and a standard deviation of demand during lead time equal to 216.51 units. what is safety stock for the firm if a 94% service level is desired?
Answer:
Safety Stock is 336.62 units
Explanation:
As per given data
Demand = D = 50,000
Ordering Cost = S = $35
Holding Cost = H = $1 per unit per year
Weekly Demand = Demand / 50 weeks = 50,000 / 50 = 1,000 units per week
Weekly Demand during Lead time of 3 weeks = 1000 x 3 = 3,000 units
Standard Deviation = 216.51 units
Desired Service level = 94%
The Z score at 94% service level is 1.55477
Safety Stock = Zscore x standard deviation = 1.55477 x 216.51
Safety Stock = 336.62
The Safety Stock for the firm if a 94% service level is desired is 336.62 units
Calculation of the safety stock:Since
Demand = D = 50,000
Ordering Cost = S = $35
Holding Cost = H = $1 per unit per year
Now
Weekly Demand = Demand / 50 weeks
= 50,000 / 50
= 1,000 units per week
Now
Weekly Demand during Lead time of 3 weeks
= 1000 x 3
= 3,000 units
Standard Deviation = 216.51 units
Desired Service level = 94%
Also, The Z score at 94% service level is 1.55477
So,
Safety Stock = Zscore x standard deviation
= 1.55477 x 216.51
= 336.62
hence, The Safety Stock for the firm if a 94% service level is desired is 336.62 units
Learn more about stock here: https://brainly.com/question/24353661
Systemic barriers to change occur because of conflicts between departments, conflicts arising from power relationships, and refusal to share information.
a. True
b. False
Answer:
a. True
Explanation:
This statement is true, as systemic barriers can occur in an organization whose information flow does not occur efficiently and effectively, which causes information noises that prevent departments or teams from receiving organizational information.
This barrier can be eliminated by establishing a more direct and integrated communication with all organizational sectors, in the form of announcements, murals, e-mail, etc.
Another way to solve this problem is by analyzing the design of the organizational structure and making adjustments if it is found that there are flaws that prevent the flow of information to flow normally.
You purchased a stock at a price of $48.98. The stock paid a dividend of $1.63 per share and the stock price at the end of the year was $54.12. What was the total return for the year? Multiple Choice 13.82% 10.49% 13.17% 12.51% 3.33%
Answer:
13.82%
Explanation:
The computation of total return for the year is shown below:-
Total return = (End value - Beginning value + Dividend) ÷ Beginning value
= ($54.12 - $48.98 + $1.63) ÷ $48.98
= 6.77 ÷ $48.98
= 0.13821
or
= 13.82%
Therefore for computing the total return we simply applied the above formula by considering all the information given in the question
The terms of trade must be higher (graphically to the right) of a nation's own production __________________
Answer: cost ratio
Explanation: The terms of trade must be higher (graphically to the right) of a nation's own production cost ratio. The production cost ratio allows small-scale manufacturers to determine their cost more accurately as well as control known cost parameters and is a method that can be adapted and applied to any business.
In a multi-product manufacturing firm, the production cost ratio is necessary for accurate compilation and allocation of production costs to each category of product especially when both the Production Time and the Production Runs are not the same and/or when fixed labor, overhead and other costs are drawn from the same pool. When the ratio is not applied results in a skewed allocation of production costs. This in turn can affect the business as it becomes difficult to ascertain the products whose production are more profitable to the business.
The law of comparative advantage indicates that if a group of individuals wants to maximize their joint output, then each good should be supplied by
Answer:
b. the low opportunity cost producer.
Explanation:
Here are the options to this question :
a. the person with the lowest wage rate.
b. the low opportunity cost producer.
c. the person with the most advanced technical knowledge.
d. the person that can accomplish the task most rapidly.
a country has comparative advantage in production if it produces at a lower opportunity cost when compared to other countries.
For example, country A produces 10kg of beans and 5kg of rice. Country B produces 5kg of beans and 10kg of rice.
for country A,
opportunity cost of producing beans = 5/10 = 0.5
opportunity cost of producing rice = 10/5 = 2
for country B,
opportunity cost of producing rice = 5/10 = 0.5
opportunity cost of producing beans = 10/5 = 2
Country A has a comparative advantage in the production of beans and country B has a comparative advantage in the production of rice
Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land six years ago for $4.3 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent these facilities from a competitor instead. If the land were sold today, the company would net $4.6 million. The company wants to build its new manufacturing plant on this land; the plant will cost $11.8 million to build, and the site requires $700,000 worth of grading before it is suitable for construction. What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project? (Enter your answer as a positive value in dollars, not millions of dollars, e.g., 1,234,567.)
Answer:
$17.1 million
Explanation:
The proper cash flow amount to use as the initial investment in fixed assets when evaluating this project can be calculated as follows
DATA
Fair value of land = 4.6 million
Cost to build a plant = 11.8 million
Grading cost = 0.7 million
Solution
Initial investment = Fair value of land + Cost to build a plant + Grading cost
Initial investment = $4.6 million + $11.8 million + $0.7 million
Initial investment = $17.1 million
The Clipper Corporation had net operating income of $380,000 and average operating assets of $2,000,000. The corporation requires a return on investment of 18%.
Required ( support your answers with explanations):
a.Calculate the company's return on investment (ROI) and residual income (RI).
b.Clipper Corporation is considering an investment of $70,000 in a project that will generate annual net operating income of $12,950. If the division planning to make the investment currently has a return on investment of 20% and its manager is evaluated based on the division's ROI, will the division manager be inclined to request funds to make this investment?(Note: the decision model for the division manager is self-interested i.e. centers on the decision's effect on his evaluation criteria)
c.Clipper Corporation is considering an investment of $70,000 in a project that will generate annual net operating income of $12,950. If the division planning to make the investment currently has a residual income of $50,000 and its manager is evaluated based on the division's residual income, will the division manager be inclined to request funds to make this investment?(Note: the decision model for the division manager is self-interested i.e. centers on the effect on his evaluation criteria)
Answer:
The Clipper Corporation
a. The company's return on investment (ROI) and residual income (RI):
ROI = $380,000/$2,000,000 x 100
= 19%
RI = $380,000 - (18% of $2,000,000)
= 380,000 - $360,000
= $20,000
b. Investment = $70,000
Annual operating income = $12,950
Department's current return on investment = 20%
Actual return on investment for this project = $12,950/$70,000 x 100
= 18.5%
The manager of the division will not be inclined to request funds to make this investment that will yield an ROI of 18.5% when the department is already making 20%. This new investment will dilute his current ROI and adversely affect his performance evaluation.
c. Investment = $70,000
Annual operating income = $12,950
Current divisional residual income = $50,000
Actual residual income from this project,
= $12,950 - (18% of $70,000)
= $12,950 - $12,600
= $350
The division manager will be inclined to request funds for this investment that will increase her Residual Income marginally from $50,000 to $50,350, because her evaluation depends on an absolute figure and not a relative one (ROI).
Explanation:
1. The Clipper Corporation's Residual Income is equal to its operating income minus (minimum required return x operating assets).
2. The Clipper Corporation's Return on Investment is a derivative obtained from dividing the returns of its investment by the cost of the investment.
Here, we are preparing the cpmpany's return on investment (ROI), residual income (RI) etc
a. Computation of the Return on investment (ROI):
Return on investment = (Operating income/Average operating assets) * 100
Return on investment = ($380,000/$2,000,000) * 100
Return on investment = 0.19
Return on investment = 19%
Computation of the residual income (RI)
Residual income = [(Operating income - (Return on investment *Average operating assets)]
Residual income = $380,000 - (18% * $2,000,000)
Residual income = 380,000 - $360,000
Residual income = $20,000
b. Given Information
Investment = $70,000
Annual operating income = $12,950
Department's current return on investment = 20%
The actual return on investment for this project will equals:
= (Annual operating income / Investment) * 100
= ($12,950/$70,000) * 100
= 0.185
= 18.5%
Therefore, the manager of the division will not be inclined to request funds to make this investment that will yield an ROI of 18.5% because the department is already making 20%.
c. Given Information
Investment = $70,000
Annual operating income = $12,950
Current divisional residual income = $50,000
The actual residual income from this project will be:
= Annual operating income - (Return on investment * Investment)
= $12,950 - (18% * $70,000)
= $12,950 - $12,600
= $350
Therefore, the division manager will be inclined to request funds for this investment that will increase the residual Income marginally from $50,000 to $50,350 because her evaluation depends on an absolute figure and not a relative one (Return on investment).
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