Williams Optical Inc. is considering a new lean product cell. The present manufacturing approach produces a product in four separate steps. The production batch sizes are 45 units. The process time for each step is as follows: Process Step 1 5 minutes Process Step 2 8 minutes Process Step 3 4 minutes Process Step 4 3 minutes The time required to move each batch between steps is 5 minutes. In addition, the time to move raw materials to Process Step 1 is also 5 minutes, and the time to move completed units from Process Step 4 to finished goods inventory is 5 minutes. The new lean layout will allow the company to reduce the batch sizes from 45 units to 3 units. The time required to move each batch between steps and the inventory locations will be reduced to 2 minutes. The processing time in each step will stay the same. Determine the value-added, non-value-added, and total lead times, and the value-added ratio under the present and proposed production approaches. If required, round percentages to one decimal place.

Answers

Answer 1

Answer:

The value-added, non-value-added, total lead time, and the value-added ratio under the present production approaches is as follows:

value-added=20 minutes

non-value-added=905 minutes

total lead time=925 minutes

value-added ratio=2.2%

The value-added, non-value-added, total lead time, and the value-added ratio under the proposed production approaches is as follows:

value-added=20 minutes

non-value-added=50 minutes

total lead time=70 minutes

value-added ratio=28.6%

Explanation:

In order to calculate the  the value-added, non-value-added, total lead time, and the value-added ratio under the present production approaches we would have to use the following formula:

value-added=Process times, step 1 +Process times, step 2+Process times, step 3+Process times, step 4

value-added=5+8+4+3

value-added=20 minutes

non-value-added=Total within batch wait time+movie time

non-value-added=(5+8+4+3)*(45-1)+25

non-value-added=905 minutes

total lead time= value-added+ non-value-added

total lead time=20+905

total lead time=925 minutes

value-added ratio=value-added/total lead time

value-added ratio=20/925

value-added ratio=2.2%

In order to calculate the  the value-added, non-value-added, total lead time, and the value-added ratio under the proposed production approaches we would have to use the following formula:

value-added=Process times, step 1 +Process times, step 2+Process times, step 3+Process times, step 4

value-added=5+8+4+3

value-added=20 minutes

non-value-added=Total within batch wait time+movie time

non-value-added=(5+8+4+3)*(3-1)+10

non-value-added=50 minutes

total lead time= value-added+ non-value-added

total lead time=20+50

total lead time=70 minutes

value-added ratio=value-added/total lead time

value-added ratio=20/70

value-added ratio=28.6%


Related Questions

Prepare journal entries to record each of the following four separate issuances of stock. A corporation issued 3,000 shares of $20 par value common stock for $72,000 cash. A corporation issued 1,500 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $22,000. The stock has a $1 per share stated value. A corporation issued 1,500 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $22,000. The stock has no stated value. A corporation issued 750 shares of $100 par value preferred stock for $97,000 cash

Answers

Answer and Explanation:

The journal entries are shown below:

1. Cash $72,000

        To common stock (3,000 shares × $20) $60,000

        To Additional capital paid $12,000

(Being the issuance of the common stock is recorded)

For recording this we debited the cash as it increased the cash and credited the other two accounts as it increased the stockholder equity

2. Organisation expense Dr $22,000

               To common stock (1,500 shares × $1)  $1,500

               To Additional capital paid $20,500

(Being the issuance of the common stock is recorded)

For recording this we debited the expense as it increased the expense and credited the other two accounts as it increased the stockholder equity

3.  Organisation expense $22,000

             To common stock  $22,000

(Being the issuance of the common stock is recorded)

For recording this we debited the expense as it increased the expense and credited the common stock as it increased the stockholder equity

4.  Cash $97,000

         To preferred stock (750 shares × $100)  $75,000

          To Additional capital paid $22,000

(Being the issuance of the preferred stock is recorded)

For recording this we debited the cash as it increased the cash and credited the other two accounts as it increased the stockholder equity

Select the incorrect statement concerning responsibility reports.

The reports should show clearly the budgeted and actual amounts of controllable revenues and expenses.

The reports should be stated in simple terms.

The reports become more specific for higher levels within the organization.

At the corporate level, responsibility reports generally include year-to-date contribution format income statements.

Answers

Answer:

compute the number of units that would have to be sold in 2017 to reach the stockholders desire profit level

Hey guys please share your opinion:

would you rather have one credit card that you use for everything?

or would you rather have one credit card with a low limit for online purchases and another for everyday purchases?

THANKS

Answers

Answer:

I'd rather have one credit card because it'll be easier to have just one then having to take care of 2. also I believe each credit card on it's own has like interest on it? it's more of a hassle too have 2 basically

Explanation:

Enviro Company issues 8%, 10-year bonds with a par value of $300,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 10%, which implies a selling price of 87 1/2. The straight-line method is used to allocate interest expense. 1. Using the implied selling price of 87 ½, what are the issuer's cash proceeds from issuance of these bonds? 2. What total amount of bond interest expense will be recognized over the life of these bonds? 3. What is the amount of bond interest expense recorded on the first interest payment date?

Answers

Answer:

1. Issuer's cash is $262,500

2. Total amount of bond interest is $277,500

3. The amount of bond interest expense is $13,875.

Explanation:

1. Issuer's cash = Face Value × Selling Price

Issuer's cash  = $300,000 × 87.50%

Issuer's cash  = $262,500

2. Discount on bond = $300,000 × 12.5% = $37,500

Interest on bond = $300,000 × 8% = $24,000

Period of bonds= 10 years

Total amount of bond interest = Discount on Bond + (Interest on Bond  × period)

Total amount of bond interest = $37,500 + ($24,000  × 10)

Total amount of bond interest = $277,500

3. Discount on bond = $300,000 × 12.5% = $37,500

Interest on bond = $300,000 × 8% = $24,000

Period = 0.5 years

The amount of bond interest expense = (Discount of Bond ÷ 20) + Interest

The amount of bond interest expense = ($37,500 ÷ 20) + ($24,000 × 0.5)

The amount of bond interest expense = $1,875 + $12,000

The amount of bond interest expense = $13,875.

Pollution Busters Inc. is considering a purchase of 10 additional carbon sequesters for $120,000 apiece. The sequesters last for only 1 year before becoming saturated. Then the carbon is sold to the government. a. Suppose the government guarantees the price of carbon. At this price, the payoff after 1 year is $140,400 for sure. How would you determine the opportunity cost of capital for this investment? b-1. Suppose instead that the sequestered carbon has to be sold on the London Carbon Exchange. Carbon prices have been extremely volatile, but Pollution Busters’ CFO learns that average rates of return from investments on that exchange have been about 22%. She thinks this is a reasonable forecast for the future. What is the opportunity cost of capital in this case? b-2. If the expected return on the investment is still 17%, but instead depends on the price of carbon (so that it is no longer risk-free), then is the purchase of additional sequesters an attractive investment for the firm?

Answers

Answer:

(a) 17% (b) the purchase of additional sequesters an attractive investment for the firm is worthwhile investment if no other similar project offers a higher return of over 17%, which in this case here is 17%.

Explanation:

Solution:

(a) Calculate the opportunity cost of capital

Opportunity cost of capital = pay off at one year/Current investment

=  $140,400-$120,000/$120,000

=20,400/120,000 = 0.17 or 17%

What it means is that, the project  offers a guarantee of 17% return. it should be accepted unless another project offers a higher return of over 17%

(b) The opportunity cost of capital, if the sequestered carbon has to be sold on the London Carbon Exchange which is simply the average rate of return of investment.

Therefore the opportunity cost per capital in this case is 22%

The purchase of additional sequesters an attractive investment for the firm is worthwhile investment if no other similar project offers a higher return of over 17%, which in this case here is 17%.

During the current year, Sun Electronics, Incorporated, recorded credit sales of $780,000. Based on prior experience, it estimates a 2 percent bad debt rate on credit sales. a. On November 13 of the current year, an account receivable for $380 from a prior year was determined to be uncollectible and was written off. b. At year-end, the appropriate bad debt expense adjustment was recorded for the current year.

Answers

Answer and Explanation:

According to the scenario, computation of the given data are as follow:-

Effects on transaction:-

 

Transactions  Assets  Amount($) Stockholder’s equity Amount($)    

a. Accounts receivable ($380)    Bad-debt expense(780,000×2%) ($15,600)    

 Allowance for doubtful accounts  $380      

b. Allowance for doubtful accounts = ($780,000 × 2÷100) = ($15,600)    

Equipment with a book value of $78,000 and an original cost of $168,000 was sold at a loss of $31,000. Paid $106,000 cash for a new truck. Sold land costing $315,000 for $420,000 cash, yielding a gain of $105,000. Long-term investments in stock were sold for $90,000 cash, yielding a gain of $15,500. Use the above information to determine this company's cash flows from investing activities. (Amounts to be deducted should be indicated with a minus sign.)

Answers

Answer:

$451,000

Explanation:

The computation of cash flows from investing activities is shown below:-

Sale of equipment                                         $47,000

($78,000 - $31,000)

Purchase of new truck                                  ($106,000)

Sale of land                                                     $420,000

Sale of Long-term investments                      $90,000

Net cash provided by investing activities   $451,000

Therefore to reach the cash flows from investing activities we simply added the sale of equipment, sale of land, sale of long term investments and deduct the purchase of new truck.

Terbium Corporation manufactures water toys. It plans to grow by producing high-quality water toys that are delivered in a timely manner. There are a number of other manufacturers who produce similar water toys. Terbium believes that continuously improving its manufacturing processes and re-engineering processes to downsize and eliminate excess capacity and waste are critical to implementing its strategy. Terbium's strategy is

Answers

Answer:

Cost leadership

Explanation:

Cost leadership is defined as the competitive advantage a business has by having the lowest production cost. They are able to sell product at the low price while making a profit.

Cost leadership occurs by a company's efficiency, size, scale, scope and experience.

In this scenario, Terbium believes that continuously improving its manufacturing processes and re-engineering processes to downsize and eliminate excess capacity and waste are critical.

The company is using effiency to gain cost leadership in the industry.

Jeremy operates a business as a sole proprietorship. The proprietorship uses the cash method of accounting. He decides to incorporate and transfers the assets and liabilities of the sole proprietorship to the newly formed corporation in exchange for its stock. The​ assets, which include​ $10,000 of accounts receivable with a zero​ basis, have a basis of​ $20,000 and an FMV of​ $40,000. The liabilities include accounts payable of​ $12,000, which will be deductible when​ paid, and a note payable on medical equipment of​ $7,000. Jeremy's basis for his stock is

Answers

Answer:

$13,000

Explanation:

Given that:

Jeremy operates a business as a sole proprietorship which uses a cash method of accounting. Now he is planning transfer them into a new corporation in  exchange for its stock.

The assets are :

$10,000 of accounts receivable with a zero​ basis

have a basis of​ $20,000  and an FMV of​ $40,000

Liabilities

payable of $12,000

The note payable on medical equipment is​ $7,000.

Therefore , Jeremy's basis for his stock is : $20,000 -$7,000 = $13,000

since  that will reduce the  basis by amount of the note payable.

The liabilities payable will be deducted and taken care of by the corporation.

The common stock of Leaning Tower of Pita Inc., a restaurant chain, will generate payoffs to investors next year, which depend on the state of the economy, as follows: Dividend Stock Price Boom $ 10 $ 200 Normal economy 6 90 Recession 0 0 The company goes out of business if a recession hits. Assume for simplicity that the three possible states of the economy are equally likely. The stock is selling today for $80.
a. Calculate the rate of return to Leaning Tower of Pita shareholders for each economic state. (Negative amounts should be indicated by a minus sign. Enter your answers as a percent rounded to 2 decimal places.) Rate of return Boom Normal economy Recession a-2.
b. Calculate the expected rate of return and standard deviation of return to Leaning Tower of Pita shareholders. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Expected return Standard deviation

Answers

Answer:

a) Boom = 162.50%

Normal =20.00%

Recession = - 100.00%

b) Expected return = 27.50%

Standard deviation = 107.30%

Explanation:

a) To find the rate of return for each economy state, let's use:

Rate of return = (Dividend +Stock price next year-stock price today)/stock price today

i) For Boom:

[tex] \frac{10 + 200 - 80}{80} = 1.625 [/tex] = 162.50%

ii) Normal:

[tex]\frac{6 + 90- 80}{80} = 0.2 [/tex] = 20.00%

iii) Recession :

[tex]\frac{0 + 0 - 80}{80} = - 1 [/tex] = -100%

b) To calculate the expected rate of return, let's use:

Expected return = Sum of expected return in different scenario / number of economy states

[tex] = \frac{162.5 + 20 - 100}{3} = 27.50[/tex]

Standard deviation:

To find the standard deviation, let's use:

Standard deviation = √[(sum of square of expected return in each scenario -average return)/n]

[tex] = \sqrt{\frac{(162.50-27.50)^2+(20-27.50)^2+(-100-27.50)^2}{3}} [/tex]

[tex] = \sqrt{\frac{(135)^2 + (-7.50)^2 + (-127.50)^2}{3}} [/tex]

[tex] = \sqrt{\frac{18225+56.25+16256.25}{3} [/tex]

= 107.30%

Standard deviation = 107.30%

Langley Company reported net income for 2022 in the amount of $460,000. The company's financial statements also included the following: Increase in accounts receivable$77,000 Decrease in inventory 62,000 Increase in accounts payable 250,000 Depreciation expense 107,000 Gain on sale of land 147,000 What is net cash provided by operating activities under the indirect method

Answers

Answer:

$655,000

Explanation:

Cash flow from operating activities involved all the cash flows related to the operations of the company like sales , purchases, receivable, payable etc.

Net Cash flow is the net of receipts and Payment.

Following are the operating cash flows.

Cash flows from operating activities

Net Income                                                  $460,000

Add: Non cash Expense Adjustments:

Depreciation                                                  $107,000

Change in Working Capital:

Increase in Account receivable ($77,000)

Decrease in Inventory                 $62,000

Increase in Account payable      $250,000

Less: Net Change in WC                               $235,000

Other Adjustments

Gain on sale of Land                                    ($147,000)

Net Operating Cash flow                              $655,000

Depreciation is a non cash expense deducted from the revenue to calculate net income. Now it needs to be added back.

Answer:

The net cash provided by operating activities under the indirect method is $655,000.

Explanation:

Langley Company

Statement of cash flows (extract)

Net income                                                    $460,000

Add: Depreciation expense                            107,000

Less: Gain on sale of land                             (147,000)

Increase in accounts receivable                    (77,000)

Decrease in inventory                                      62,000

Increase in accounts payable                        250,000

Net cash provided by operating activities  $655,000

A company can sell all the units it can produce of either Product A or Product B but not both. Product A has a unit contribution margin of $16 and takes two machine hours to make and Product B has a unit contribution margin of $30 and takes three machine hours to make. If there are 5,000 machine hours available to manufacture a product, income will be:

a. $10,000 more if Product A is made.
b. $10,000 less if Product B is made.
c. $10,000 less if Product A is made.
d. the same if either product is made.

Answers

Answer:

Product B has a net income of $10,000 superior to Product A.

The correct answer is C.

Explanation:

Giving the following information:

Product A:

Unitary contribution margin= $16

Machine-hours required= 2

Product B:

Unitary contribution margin= $30

Machine-hours required= 3

First, we will calculate the total income of both products.

Product A= 16*(5,000/2)= $40,000

Product B= 30*(5,000/3)= $50,000

Product B has a net income of $10,000 superior to Product A.

2. Identify the type of scale of measurement (nominal, ordinal, interval or ratio) appropriate for each of the following types of data.

a. Star ratings of hotels

b. Sales revenues of companies

c. Grades of officers in armed forces

d. House numbers in a street

e. Prices of cars

f. Classes of accommodation on passenger flights

g. Passport numbers

h. Numbers in a rating scale on a questionnaire

i. Index numbers

Answers

Answer: Please refer to Explanation

Explanation:

A Nominal Scale is a scale where variables are grouped and categorized according to certain characteristics. You cannot perform normal mathematical functions on them such as addition, subtraction and the like.

Ordinal Scales are like nominal scale but in this case the variables can be ranked. You can have a first position and a last position.

An Interval scale is numeric and as such can be ordered. You can also perform mathematical functions on them. Interval scales have no true zero and an example is Temperature. That's why temperature can drop to the negatives.

A Ratio Scale is in many ways like an Interval Scale. The main distinguishing factor is that a Ratio Scale has a true 0. This means that at there is no number before 0 and at 0 level, the variable is considered finished.

Classifying the above therefore,

a. Star ratings of hotels.

ORDINAL because they can be ranked.

b. Sales revenues of companies.

RATIO because there is a true 0. At $0, there is no revenue.

c. Grades of officers in armed forces.

ORDINAL as it can be ranked.

d. House numbers in a street.

NOMINAL as the street numbers don't mean a house is higher ranked than another.

e. Prices of cars.

RATIO as there is a true zero. A car at $0 is free. Price cannot be below $0.

f. Classes of accommodation on passenger flights.

ORDINAL as it can be ranked according to treatment in the various classes.

g. Passport numbers.

NOMINAL as the different passport numbers are simply used for identification and cannot rank people.

h. Numbers in a rating scale on a questionnaire.

ORDINAL because the variables can be ranked from top to bottom.

i. Index numbers.

ORDINAL if the index can be ranked.

In preparation for developing its statement of cash flows for the year just ended, D-Rose Distributors collected the following information: ($ in millions) Purchase of treasury bills (considered a cash equivalent) 6.7 Sale of preferred stock 150.7 Gain on sale of land 4.7 Proceeds from sale of land 25.7 Issuance of bonds payable for cash 140.7 Purchase of equipment for cash 30.7 Purchase of GE stock 35.7 Declaration of cash dividends 134.7 Payment of cash dividends declared in previous year 130.7 Purchase of treasury stock 120.7 Payment for the early extinguishment of long-term notes (carrying (book) value: $100 million) 110.7 Required: 1. Prepare the investing activities section of D-Rose's statement of cash flows. 2. Prepare the financing activities section of D-Rose's statement of cash flows.

Answers

Answer and Explanation:

1. The preparation of the investing activities is presented below:

Cash flow from investing activities

Proceeds from sale of land $25.7

Purchase of equipment for cash -$30.7

Purchase of GE stock -$35.7

Net cash used by investing activities  -$40.7

2. The preparation of the financing activities is presented below:

Cash flow from financing activities

Sale of preferred stock 150.7

Issuance of bonds payable for cash 140.7

Payment of cash dividends declared in previous year -130

Purchase of treasury stock -120

Payment for the early extinguishment of long-term notes (carrying (book) value: $100 million) -110.7

Net cash used by financing activities  -$69.3

The minus sign shows the cash outflow and the positives sign shows the cash inflow

Barton and Fallows form a partnership by combining the assets of their separate businesses. Barton contributes accounts receivable with a face amount of $48,000 and equipment with a cost of $186,000 and accumulated depreciation of $105,000. The partners agree that the equipment is to be valued at $90,000, that $3,700 of the accounts receivable are completely worthless and are not to be accepted by the partnership, and that $1,900 is a reasonable allowance for the uncollectibility of the remaining accounts receivable. Fallows contributes cash of $28,300 and merchandise inventory of $56,000. The partners agree that the merchandise inventory is to be valued at $60,500. Journalize the entries to record in the partnership accounts (a) Barton's investment and (b) Fallows's investment. If an amount box does not require an entry, leave it blank. (a) (b)

Answers

Answer and Explanation:

The Journal entry is shown below:-

1. Equipment Dr, $90,000

Accounts receivable Dr, $44,300

($48,000 - $3,700)

      To Accumulated depreciation -equipment $1,900

      To Barton's capital $132,400

(Being Barton capital contribution in the form of accounts Receivable and equipment as per agreed terms is recorded)

2. Cash account Dr, $28,300

Merchandise Inventory Account Dr, $60,500

       To  Fallows’s Capital Account $88,800

(Being Fallows capital contribution in the form of merchandise inventory and cash as per agreed terms)

The selling price of imported olive oil is $20 per case. Your cost is 15 Euros per case, and the exchange rate is currently 1.25, so it takes 1.25 Euros to buy $1. Your largest customer has ordered 15,000 cases of olive oil. How much is the pretax profit for this transaction?

Answers

Answer:

$120,000

Explanation:

According to the question, the selling price (S.P) i.e. amount to be sold, of one imported olive oil case is $20 while the cost price (C.P) i.e. amount it was purchased, is €15

Looking at the currencies of both prices, they are different. To make the currencies the same, we need to convert euros (€) to dollars ($).

Based on the exchange rate of €1.25 to $1 given in the question;

€15 will be 15/1.25 = $12.

Therefore, the C.P is $12 and the S.P is $20

A customer ordered 15,000 cases of olive oil. This means that the;

1) The cost price (C.P) will be $12 × 15,000 = $180,000

2) The selling price will be $20 × 15,000 = $300,000

In order to obtain the pretax profit, we subtract the cost price (C.P) from the selling price (S.P). That is, $300,000 - $180,000 = $120,000

Hanson Corp produces three products, and is currently facing a labor shortage – only 3,090 hours are available this month. The selling price, costs, and labor requirements of the three products are as follows:



Product A Product B Product C
Selling price $ 76.00 $ 56.00 $ 66.00
Variable cost per unit $ 48.00 $ 19.00 $ 39.00
Direct labor hours per unit 2.5 3.9 2.9


a.
What is the contribution margin per unit for each product?

Product A
Product B
Product C


b.
What is the contribution margin per direct labor hour for each product? (Round your answers to 2 decimal places.)

Product A
Product B
Product C


c.
Assume Hanson has unlimited demand for each product. Which product should Hanson focus on producing?

Product B
Product C
Product A

Answers

Answer and Explanation:

The computation is shown below:

a. Contribution margin per unit

As we know that

Contribution margin per unit = Selling price per unit - variable  cost per unit

Particulars                     Product A               Product B                Product C

Selling price per unit     $76                          $56                          $66

Variable cost per unit    $48                          $19                          $39

Contribution margin per unit      $28          $37                         $27

b. Contribution margin per direct labor hour for each product

Contribution margin per direct labor hour = Contribution margin per unit ÷ Direct labor hours per unit

Particulars                     Product A               Product B                Product C

Contribution margin per unit      $28          $37                         $27

Direct labor hours per unit           2.5           3.9                          2.9

Contribution margin per direct labor hour  $11.2  $9.49          $9.31

c. Based on the contribution margin per direct labor hour, the product that should be more focused is product A

The SP Corporation makes 42,000 motors to be used in the production of its sewing machines. The average cost per motor at this level of activity is: Direct materials $ 10.10 Direct labor $ 9.10 Variable manufacturing overhead $ 3.75 Fixed manufacturing overhead $ 4.70 An outside supplier recently began producing a comparable motor that could be used in the sewing machine. The price offered to SP Corporation for this motor is $25.75. If SP Corporation decides not to make the motors, there would be no other use for the production facilities and none of the fixed manufacturing overhead cost could be avoided. Direct labor is a variable cost in this company. The annual financial advantage (disadvantage) for the company as a result of making the motors rather than buying them from the outside supplier would be:

Answers

Answer:

annual financial advantage, $837,600

Explanation:

Analysis of the Make or Buy Decision - Making

Making Costs

Direct materials $ 10.10×42,000                                424,200

Direct labor $ 9.10×42,000                                        382,200

Variable manufacturing overhead $ 3.75×42,000    157,500

Fixed manufacturing overhead $ 4.70×42,000         197,400

Total                                                                             1,161,300

Buying Costs

Purchase Price $25.75×42,000                                1,801,500

Fixed manufacturing overhead $ 4.70×42,000         197,400

Total                                                                            1,998,900

It costs $837,600 more to Buy than to make.

Hence the annual financial advantage for the company as a result of making the motors rather than buying them from the outside supplier would be $837,600.

Part U16 is used by Mcvean Corporation to make one of its products. A total of 18,000 units of this part are produced and used every year. The company's Accounting Department reports the following costs of producing the part at this level of activity: Per Unit Direct materials $ 3.90 Direct labor $ 8.50 Variable manufacturing overhead $ 9.00 Supervisor's salary $ 4.40 Depreciation of special equipment $ 2.80 Allocated general overhead $ 8.00 An outside supplier has offered to make the part and sell it to the company for $28.70 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including the direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company, none of which would be avoided if the part were purchased instead of produced internally. In addition, the space used to make part U16 could be used to make more of one of the company's other products, generating an additional segment margin of $30,000 per year for that product. The annual financial advantage (disadvantage) for the company as a result of buying part U16 from the outside supplier should be: g

Answers

Answer:

$22,200 disadvantage

Explanation:

The computation of the financial advantage or disadvantage of buying part from the outside supplier is shown below:

= Avoidable making cost - buying cost + additional segment margin

where,

Avoidable Making cost is

= ($3.90 + $8.50 + $9 + $4.4) × 18,000

= $464,400

Buying cost is

= $28.7 × 18,000

= $516,600

And the additional segment is $30,000 per year

So, the financial advantage or disadvantage is

= $464,400 - $516,600 + $30,000

= $22,200 disadvantage

We simply applied the above formula

Drake Corporation is reviewing an investment proposal. The initial cost and estimates of the book value of the investment at the end of each year, the net cash flows for each year, and the net income for each year are presented in the schedule below. All cash flows are assumed to take place at the end of the year. The salvage value of the investment at the end of each year is equal to its book value. There would be no salvage value at the end of the investment's life.
Investment Proposal
Year Initial Cost and Book Value Annual Cash Flows Annual Net Income
0 $104,500
1 69,600 $44,000 $9,100
2 41,900 39,500 11,800
3 21,600 35,900 15,600
4 8,300 31,000 17,700
5 0 25,400 17,100
Drake Corporation uses an 11% target rate of return for new investment proposals.
(a) What is the cash payback period for this proposal? (Round answer to 2 decimal places, e.g. 10.50.)
Cash payback period
(b) What is the annual rate of return for the investment? (Round answer to 2 decimal places, e.g. 10.50.)
Annual rate of return for the investment %
(c) What is the net present value of the investment? (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). Round answer to 0 decimal places, e.g. 125.)

Answers

Answer:

Check the explanation

Explanation:

Kindly check the attached images below to see the step by step explanation to the question above.

Angara Corporation uses activity-based costing to determine product costs for external financial reports. The company has provided the following data concerning its activity-based costing system:

Activity Cost Pool (and Activity Measure) Total Cost
Machine related (machine-hours) $ 103,800
Batch setup (setups) $ 402,600
Order size (direct labor-hours) $ 82,600
Total Activity
Activity Cost Pools Product X Product Y Total
Machine related 800 5,200 6,000
Batch setup 3,100 2,900 6,000
Order size 6,000 1,000 7,000

The total amount of overhead cost allocated to Product X would be closest to: ________.

Answers

Answer:

Total amount = $292,650

Explanation:

As per the data given in the question,

Machine related (machine-hours) = $103,800

Batch setup (setups) = $402,600

Order size (direct labor-hours) = $82,600

For product X :

Machine related = ($103,800÷6000×800)

= $13,840

Batch setup = $402,600 × 3,100 ÷6,000

= $208,010

General factory = $82,600 × 6,000 ÷ 7000 = $70,800

Total amount = ($13,840 + $208,010 +  $70,800)

= $292,650

Service Department Charges In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $64,560, and the Purchasing Department had expenses of $40,000 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: ResidentialCommercialGovernment Contract Sales$2,000,000 $3,250,000 $2,900,000 Number of employees: Weekly payroll (52 weeks per year)400 250 150 Monthly payroll80 30 10 Number of purchase requisitions per year7,500 3,000 2,000 a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division.

Answers

Answer and Explanation:

The computation of the total amount of payroll checks and purchased requisitions processed per year is shown below:

Particulars       Residential        Commercial        Government Contract      Total

Number of payroll checks:

Weekly payroll  $20,800)         $13,000                  $7,800 $41,600

                           (400 × 52 weeks)   (250 × 52 weeks )   (150 × 52 weeks)

Monthly payroll    $960              $360                       $120           $1,440

                              (80 × 12)       (30 × 12)                      (10 × 12)

Total                      $21,760         $13,360                    $7,920          $43,040

Number of purchase requisitions per year 7,500 3,000 2,000 12,500

Data concerning Pony Corporation's single product appear below: Per Unit Percent of Sales Selling price $ 200 100 % Variable expenses 40 20 % Contribution margin $ 160 80 % Fixed expenses are $531,000 per month. The company is currently selling 4,000 units per month. The marketing manager would like to cut the selling price by $14 and increase the advertising budget by $35,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 500 units. What should be the overall effect on the company's monthly net operating income of this change

Answers

Answer:

$18,000

Explanation:

The computation of overall effect on the company's monthly net operating income is shown below:-

                                 Current                 Proposed

Sales                       $800,000               $837,000

                        (200 × 4000)     (200 - 14) × (4,000 + 500)

Variable expenses  $160,000             $180,000

                              (40 × 4000)  (40 × (4,000 + 500))

Contribution margin $640,000            $657,000

Fixed expenses     $531000                 $566,000

                                                  ($531,000 + $35,000)

Net operating

income                  $109,000                $91,000

Decrease in net operating income = Current - Proposed

= $109,000 - $91,000

= $18,000

So, for computing the overall effect on the company's monthly net operating income we simply applied the above formula.

30. Oriole, Inc. leased equipment from Tower Company under a 4-year lease requiring equal annual payments of $254,152, with the first payment due at lease inception. The lease does not transfer ownership, nor is there a bargain purchase option. The equipment has a 4 year useful life and no salvage value. Oriole, Inc.’s incremental borrowing rate is 11% and the rate implicit in the lease (which is known by Oriole, Inc.) is 9%. Assuming that this lease is properly classified as a finance lease, what is the amount of Lease Liability reduction recorded in first year after the lease inception?

Answers

Answer:

$897,484.

Explanation:

Given:

Annual Payment = $254,152

The following company's average loan rate seems to be 11 per cent as well as the implied cost of the contract recognized by the company is 9 per cent.

Thus, the price implied in the contract that is recognized to the company would be 9 per cent although the contract doesn't often shift possession unless there is a negotiating opportunity to buy.

Let the lease year to Y = 4, and I = 9%

So, current value of the annuity is Y=4, I = 9% i.e., 3.53129

So, the cost documented for the contracted asset at the beginning of the contract  [tex]=254,152\times3.53129=897,484[/tex]

Amount documented at the beginning of the contract for such contracted asset = $897,484

You are given the following information about 2 accounts: Account 1 Time Account Value before transactions Deposit Withdrawal 0 100 0.25 110 X 0.75 120 3X 1 82 Account 2 Time Account Value before transactions Deposit Withdrawal 0 100 0.5 120 2X 1 140 You are also told that the dollar weighted return over the year on account 1 is i. If the time weighted return over the year on account 2 is also i, what are X and i

Answers

Answer:

Check the explanation

Explanation:

For account 1:

Dollar weighted investment = 100 for entire year + X for three fourth of the year - 3X for one fourth of the year = 100 + 3X/4 - 3X/4 = 100

Dollar return = Closing balance - opening balance - (Total deposit - total withdrawal) = 82 - 100 - (X - 3X) = 2X - 18

Hence, dollar weighted return = i = Dollar return / Dollar weighted investment = (2X - 18) / 100

Or, 100i = 2X - 18 Or, 50i = X - 9

For account 2:

Time weighted return: It has two components:

100 growing to 120 in 0.5 year

Immediately after deposit of 2X, the capital becomes 120 + 2X that grows to become 140 in the next 0.5 year

Hence time weighted return = 1 + i = 120 / 100 x 140 / (120 + 2X) = 168 / (120 + 2X) = 84 / (60 + X)

From the first equation, i = (X - 9) / 50

Hence, from second equation, 1 + i = 1 + (X - 9) / 50 = (41 + X) / 50 = 84 / (60 + X)

Hence, (60 + X).(41 + X) = 50 x 84

Hence, X2 + 101X + 2,460 = 4,200

Or, X2 + 101X - 1,740 = 0

It's a quadratic equation that can be factorized as:

(X - 15).(X + 116) = 0

Hence, X = 15

Hence, i = (X - 9) / 50 = (15 - 9) / 50 = 0.12 = 12%

Destiny Corporation is preparing its statement of cash flows by the indirect method. Destiny has the following items for you to consider in preparing the​ statement:
O+ a. Increase in accounts payable
F- b. Payment of dividends
O- c. Decrease in accrued liabilities
F+ d. Issuance of common stock
O- e. Gain on sale of building
O+ f. Loss on sale of land
O+ g. Depreciation expense
O- h. Increase in merchandise inventory
O+ i. Decrease in accounts receivable
I- j. Purchase of equipment

Answers

Answer:

O+ a. Increase in accounts payable

F- b. Payment of dividends

O- c. Decrease in accrued liabilities

F+ d. Issuance of common stock

O- e. Gain on sale of building

O+ f. Loss on sale of land

O+ g. Depreciation expense

O- h. Increase in merchandise inventory

O+ i. Decrease in accounts receivable

I- j. Purchase of equipment

Explanation:

The requirement of the question is to indicate whether each of the items is an addition to addition to net income (O+) or subtraction (O-) under operating activities section, investing activity (cash inflow I+), (cash outflow I-),financing activity (cash inflow F+), (cash outflow F-) and activity not used to prepare the cash flows.

All the signs above are correct.

The price of a home is $210,000. The bank requires a 5% down payment and three points at the time of closing. The cost of the home is financed with a 30-year fixed-rate mortgage at 7%. a. Find the required down payment. b. Find the amount of the mortgage. c. How much must be paid for the three points at closing? d. Find the total cost of interest over 30 years, to the nearest dollar.

Answers

Answer:

a.$31,500

b.$178,500

c.$5355

d.$ 249,021.60  

Explanation:

The down payment is 15% of the price of the home=15%*$210,000=$31500

Amount of mortgage=price of the home-down payment

                                  =$210,000-$31,500=$178,500

Amount to  be paid for 3 points at closing =3%*amount of mortgage

                                                                      =3%*$178,500=$5355

Note that 1 point costs 1 percent of mortgage amount

The amount of repayment monthly can be computed thus:

=pmt(rate,nper,-pv,fv)

rate  is the fixed mortgage of 7%/12

nper is 30 years multiplied by 12=360 months

pv is the mortgage amount of $178,500

fv is the total of mortgage amount and total interest,it is not known

=pmt(7%/12,360,-178500,0)=$ 1,187.56  

Total interest cost=total payment-mortgage amount=($ 1,187.56*360)-$178,500 =$ 249,021.60  

The competitive force of substitute products tends to be stronger when Group of answer choices buyers view the prices of substitutes as too high. the costs that buyers face in switching over to substitutes are low. the quality and performance of substitutes are relatively low. substitutes do not embody many characteristics that are similar to those of products already serving the market. none of the above.

Answers

Answer:

B. . the costs that buyers face in switching over to substitutes are low.

Explanation:

Porter's threat of substitutes assumes that there are alternative products which customers can easily switch to, to replace a particular product which might be dominant in the market. Some businesses tend to have a lot of competitors, unlike some that have monopoly of the market. Fast moving consumer goods like toiletries or beverages, fall into the class of businesses with many competitors.

There are several high risk factors that could prompt customers to chose a substitute. One of them is, if the prices of the substitutes are perceived by the customers as low. This would make them view the product as a better substitute. And if the product has similar or even higher quality, it makes the substitute more appealing.

On January 1, Year 1, the Hoverman Corporation made amendments to its defined benefit pension plan, resulting in $150,000 of past service costs. The plan has 100 active employees with an average expected remaining working life of 10 years. There currently are no retirees under the plan. Required: Determine the amount of past service costs to be amortized in Year 1 and subsequent years under (a) IFRS and (b) U.S. GAAP.

Answers

Answer:

Check the explanation

Explanation:

a)

In IFRS according to IAS 19 all past service cost is recognized in the net income in the period in which amendment (change) is made by entity for defined benefit pension, it does not matter what is the status of the employees who will benefit the change. So in Year 1 $150000 will be expended completely and in subsequent years the amount is $0

Year 1 =$150000

Subsequent years= $0

b) In US GAAP the past service cost is recorded in Accumulated other comprehensive income in the year of amendment. It is amortized over the future working life of the participants.

Year 1 is year of adoption hence $0 is amortized because $150000 is included in Accumulated other comprehensive income.

Subsequent years: (150000/10=15000) $15000 will be amortized for each year for 10 years.

Demand for consumer goods is necessarily variable. Forecasting the demand for consumer goods is an important business activity, as all businesses have to plan ahead. Manufacturer of consumer goods has been studying the demand for one of their products and the level of demand is given in the following stem and leaf plot, where stem unit is 100 and leaf unit is 10. Stem Leaf 1 1, 2, 3, 4.5, 5, 6, 7, 7, 9, 9.5 2 0, 0, 0, 0, 0, 0, 0, 0, 1, 1, 2, 4, 5, 7, 9 3 0, 0, 0, 2, 8 4 5 0 6 7 8 0 9 10 11 12 0 The outer fences are ___________.

Answers

Answer:

7.5 to 467.5.

Explanation:

Please note that In order to be fast, I make use of excel during the Calculation.

So, the first thing to do is to make sure that the observation is arranged in an increasing order.

Step one: Calculate the value for J1 and J3.

Know that J1 = J3. Where J3 = 3rd quartile.

Hence, J1 = 1st QUARTILE = QUARTILE. EXC (data, 1) = 18.

Also, J3 = QUARTILE. EXC(data, 3). = 29.5.

Therefore, the difference between the first quartile and the third QUARTILE = 29.5 - 18 = 11.5.

Step two: calculate the value for the higher fence and the lower fence respectively.

Thus, for the higher fence we have;

J3 + 1.5( 11.5).

= 29.5 + 1.5(11.5).

= 46.75.= (46.75 × 10) = 467.5).

Then, for the lower fence;

J1 - 1.5( 11.5).

= 18 - 1.5(11.5).

= 0.75 = (.75 × 10) = 7.5.

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