Answer: $528 favorable
Explanation:
The Spending variance for supplies shoes the difference between what the company thought it would spend on supplies and what it actually spends.
Spending variance on supplies = Actual costs - Budgeted costs
Budgeted cost:
= 968 + 8 * 470 frames
= 968 + 3,760
= $4,728
Spending variance on supplies:
= 4,200 - 4,728
= $528 favorable
Variance is favorable when the Budgeted costs are higher than actual costs.
Galaxy Air, previously a no-growth firm, has two million shares outstanding. Until now, it consistently earned $20 million per year on its assets. (It has no debt and pays out all earnings as dividends. Its cost of capital is 10 percent.) Due to its newly appointed CEO, Galaxy Air is now able to squeeze out 1 percent annual growth by plowing back 5 percent of earnings. Calculate its stock price per share
Answer: $106.61
Explanation:
The following can be deduced from the information given:
Net Income = $20
Weighted Average no. of shares = 2
Earning per share (EPS) = $20/2 = $10
DPS =(100% - 5%) of EPS
= 95% × $10 = $9.5
Growth Rate (g) = 1%
Cost of equity (Ke) = 10%
DPS1 = [9.5 × (1+0.01)] = 9.595
Price of Stock will now be
= Po = DPS1/(Ke-g)
= 9.595/(0.10-0.01)
= 106.61
On January 1, Baker Co. purchased equipment for $100,000. It has an estimated useful life of five years and its residual value is $10,000. The company has a calendar year-end. Using the straight-line method, depreciation expense for the first year of its life equals:
Answer:
Explanation:
No dia do meu aniversário caraaaa
Landon Stevens is evaluating the expected performance of two common stocks, Furhman Labs, Inc., and Garten Testing, Inc. The risk-free rate is 4.4 percent, the expected return on the market is 10.6 percent, and the betas of the two stocks are 1.4 and 0.7, respectively. Stevens’s own forecasts of the returns on the two stocks are 10.60 percent for Furhman Labs and 10.50 percent for Garten.
Required:
a. Calculate the required return for each stock.
b. Is each stock undervalued, fairly valued, or overvalued?
Answer:
a. Furhman Labs, Inc. : 13.08%
Garten Testing, Inc. : 8.74%
b. Furhman Labs
the stock is undervalued
Garten Testing
the stock is overvalued
Explanation:
According to the capital asset price model: Expected rate of return = risk free + beta x (market rate of return - risk free rate of return)
Furhman Labs, Inc. : 4.4 + 1.4(10.6 - 4.4) = 13.08%
Garten Testing, Inc. : 4.4 + 0.7(10.6 - 4.4) = 8.74%
A stock is overvalued if its intrinsic value is less than the forecast, and, it is undervalued if its intrinsic value is greater than the forecast
Furhman Labs, intrinsic value = 13.08
forecasted value = 10.60
the stock is undervalued
Garten Testing, Inc , intrinsic value = 8.74%
forecasted value = 10.50
the stock is overvalued
Slavery, as a business practice protected by state laws, provided unfair advantage against those employers not using slaves, and thus the economic incentives supported and sustained slavery within its sealed environment.
A. True
B. False
Your firm has $45.0 million invested in accounts receivable, which is 90 days of net revenues. If this value could be reduced to 50 days, what annual increase in income would your firm realize if the increase in cash could be invested at 7.5 percent
Solution :
Number of days = 90 days
Amount invested = $45 million
So the current earnings is [tex]$\$45 \text{ million } \times 1.075 \text{ in}\ \ 90 \text{ days}$[/tex]
The number of days is reduced to 50 days. So we can now make the same amount in just 50 days.
So the net increase is what we will make in the remaining [tex]40[/tex] days.
If in 50 days, we earn 0.075 return, then we can consider 50 days as [tex]t=1.[/tex]
Then the [tex]50[/tex] days = [tex]45 \times 0.075^1[/tex] return, and
[tex]40[/tex] days = [tex]45 \times (0.075)^{40/50}[/tex]
[tex]=45 \times (0.075)^{4/5}[/tex]
= [tex]\$ 5.66580371[/tex] million increase
= $ 5.7 million
Burlington Construction Company is considering selling excess machinery with a book value of $281,000 (original cost of $400,100 less accumulated depreciation of $119,100) for $277,400, less a 5% brokerage commission. Alternatively, the machinery can be leased for a total of $284,300 for five years, after which it is expected to have no residual value. During the period of the lease, Burlington Construction Company's costs of repairs, insurance, and property tax expenses are expected to be $25,000.
Required:
Prepare a differential analysis, dated January 3, 2012, to determine whether Sure-Bilt should lease (Alternative 1) or sell (Alternative 2) the machinery.
Answer:
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An investment center generated a contribution margin of $400,000, fixed costs of $200,000 and sales of $2,000,000. The center's average operating assets were $800,000. How much is the return on investment
Answer: 25%
Explanation:
Contribution margin = $400,000
Fixed costs = $200,000
Sales = $2,000,000
Average operating assets = $800,000
The return on investment will be:
= (contribution margin - fixed cost) / average operating assets
= (400000 - 200000) / 800,000
= 200000 / 800000
= 25%
The return in investment is 25%.
Entries for Installment Note Transactions On the first day of the fiscal year, Shiller Company borrowed $63,000 by giving a five-year, 12% installment note to Soros Bank. The note requires annual payments of $17,773, with the first payment occurring on the last day of the fiscal year. The first payment consists of interest of $7,560 and principal repayment of $10,213. Journalize the entries to record the following:
a. Issued the installment note for cash on the first day of the fiscal year.
b. Paid the first annual payment on the note. For a compound transaction, if an amount box does not require an entry, leave it blank.
c. Explain how the notes payable would be reported on the balance sheet at the end of the first year.
Answer:
Shiller Company
Journal Entries:
a) Jan. 1 Debit Cash $63,000
Credit 12% Note Payable (Soros Bank) $63,000
To record the issuance of the five-year, 12% installment note.
December 31: Debit Note Payable (Soros Bank) $10,213
Debit Interest Expense $7,560
Credit Cash $17,773
To record the first repayment, including interest.
c. The notes payable would be reported as Long-term Liability at $52,787.
Explanation:
a) Data and Analysis:
Jan. 1 Cash $63,000 12% Note Payable (Soros Bank) $63,000
Issuance of a five-year, 12% installment note.
December 31: Note Payable (Soros Bank) $10,213 Interest Expense $7,560 Cash $17,773
Balance of Notes Payable on December 31:
Amount of note = $63,000
Repayment = (10,213)
Balance of note = $52,787
Gluon Inc. is considering the purchase of a new high pressure glueball. It can purchase the glueball for $220,000 and sell its old low-pressure glueball, which is fully depreciated, for $40,000. The new equipment has a 10-year useful life and will save $48,000 a year in expenses. The opportunity cost of capital is 10%, and the firm’s tax rate is 21%. What is the equivalent annual saving from the purchase if Gluon can depreciate 100% of the investment immediately. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
EQUIVALENT ANNUAL SAVING:
"the equivalent annual saving from the purchase if Gluon can depreciate 100% of the investment immediately is $13,245.99".
Since they are purchasing the new machine by first disposing off the old machine.
Hence,
First step is to Determine the Net initial investment
Net initial investment = $220,000 - $40,000
Net initial investment= $180,000
Second step is to determine the Total savings
Depreciation = $220,000/10
Depreciation = $22,000
Savings before tax = $48,000 - $22,000
Savings before tax= $26,000
Tax at 21% = (21%*$26,000)
Tax at 21% =$5,460
Savings after tax $20,540
($26,000-$5,460)
Add back depreciation $22,000
Cash flow after tax $42,540
($20,540+$22,000)
Third step is to determine PV of CFAT and NPV
PV of CFAT = $42,540 x (10%, PVFA10Y)
PV of CFAT = $42,540 x 6.1446
PV of CFAT = $261,391
NPV = $261,391 - $180,000 = $81,391
Now let determine the EQUIVALENT ANNUAL SAVING(EAS)
Equivalent annual saving(EAS) = NPV/(10%, PVFA10Y)
Equivalent annual saving(EAS)= $81,391/6.1446
Equivalent annual saving(EAS)= $13,245.99
Therefore the EQUIVALENT ANNUAL SAVING from the purchase if Gluon can depreciate 100% of the investment immediately is $13,245.99
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Các yếu tố nào cần được so sánh khi tiến hành định giá công việc
Answer:
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Chang Co. issued a $50,000, 120-day, discounted note to Guarantee Bank. The discount rate is 6%. Assuming a 360-day year, the cash proceeds to Chang Co. are:________
a. $49,750
b. $47,000
c. $49,000
d. $51,000
Answer:
c. $49,000
Explanation:
Calculation to determine what the cash proceeds to Chang Co. are:
Cash proceed=$50,000-($50,000*6%*120/360)
Cash proceed=$50,000-$1,000
Cash proceed=$49,000
Therefore the cash proceeds to Chang Co. are:$49,000
True or false: Interest expense and income tax expense are considered general and administrative expenses and, therefore, are included on the general and administrative expense budget. True false question. True False
Answer: True
Explanation:
Interest expense and income tax expenses generally are stand-alone expenses but they fall under general and administrative expenses required to run the business.
Interest expense is charged on debt that was taken to run the company so will be an admin expense and tax is part of the expenses that a company has to take care of in order to run the company so it is an admin expense as well.
DonCo. Inc. sold merchandise on January 14, and accepted a 90 day, 5% promissory note in the amount of $5,000. On January 14, the entry to record this transaction would include a debit to:
a. Cash in the amount of $5,000
b. Notes Receivable in the amount of $5,000
c. Accounts Receivable in the amount of $5,000
d. Sales in the amount of $5,000
Journal Entry
On November 1, the company rented space to another tenant. A check in the amount of $9,000, representing three months' rent in advance, was received from the tenant on that date. The payment was recorded with a credit to the Unearned Rent account. Complete the necessary adjusting entry for December 31 by selecting the account names and dollar amounts from the drop-down menus.
Date Account Title Debit Credit
Dec. 31 selectAccounts ReceivableAccumulated DepreciationCashDepreciation ExpenseEquipmentEquipment ExpenseRent RevenueSalaries ExpenseSalaries PayableService RevenueSuppliesSupplies ExpensesUnearned Rent Revenue select300060009000 select300060009000
selectAccounts ReceivableAccumulated DepreciationCashDepreciation ExpenseEquipmentEquipment ExpenseRent RevenueSalaries ExpenseSalaries PayableService RevenueSuppliesSupplies ExpensesUnearned Rent Revenue select300060009000 select300060009000
Answer:
Explanation:
unearned rent 6000 (debit)
Rent revenue. 6000 (credit)
to record 2 months of realized rent revenue
During the week, we will explore the differences between cash-basis and accrual-basis accounting, and learn the steps required to complete the accounting cycle. With that in mind, let's begin by discussing the following question:
Why do companies make adjusting entries?
Answer and Explanation:
Adjusting entries is to made for recording all types of expenses and revenues in a correct manner. There are some transactions such as accrued interest or revenue that could be realize at the time when the entries are depend upon the documents and transactions should be recorded. It is to be made in order to prepared the correct financial statements by considering the prepaid expenses that are adjusted, depreciation expense, unearned revenue etc
Sandoval needs to determine its year-end inventory. The warehouse contains 33,000 units, of which 4,300 were damaged by flood and are not sellable. Another 3,300 units were purchased from Markor Company, FOB shipping point, and are currently in transit. The company also consigns goods and has 5,300 units at a consignee's location. How many units should Sandoval include in its year-end inventory
Answer:
37,300
Explanation:
Calculation to determine How many units should Sandoval include in its year-end inventory
Using this formula
Year-end inventory units=(Warehouse units- Damaged units)+ Units purchased+ Units at consignee's location
Let plug in the formula
Year-end inventory units=(33,000 - 4,300) +3,300+5,300
Year-end inventory units=28,700+3,300+5,300
Year-end inventory units=37,300
Therefore How many units should Sandoval include in its year-end inventory is 37,300
The formula to determine the materials to be purchased is Multiple choice question. (budgeted production times materials required for each unit) plus budgeted ending materials inventory minus beginning materials inventory (budgeted production divided by materials required for each unit) plus budgeted ending materials inventory minus beginning materials inventory (budgeted production times materials required for each unit) minus budgeted ending materials inventory plus beginning materials inventory (budgeted production divided by materials required for each unit) minus budgeted ending materials inventory plus beginning materials inventory
Answer: (budgeted production times materials required for each unit) plus budgeted ending materials inventory minus beginning materials inventory.
Explanation:
On July 1, Sterns Co. acquired patent rights for $36,000. The patent has a useful life of 6 years and a legal life of 15 years.
Required:
Journalize the adjusting entry on December 31 to recognize the amortization. Refer to the Chart of Accounts for exact wording of account titles.
Answer:
Dr Amortization Expense $3,000
Cr Patents $3,000
Explanation:
Preparation of the journal adjusting entry on December 31 to recognize the amortization.
Dec. 31
Dr Amortization Expense $3,000
Cr Patents $3,000
(To record Amortization)
Amortization=(Patent rights/Useful life)*6/12
Amortization=($36,000/6)*6/12
Amortization=$3,000
(July 1 to Dec 31 =6months)
A satellite radio company is the sole supplier of a brand-new service providing commercial-free music that competes with existing free, broadcast-radio music delivered via antennas. The service is automatically activated for a 6-month introductory free-trial period, and is only available to people who purchase a new car with a specially equipped receiver. After the trial period, customers must call the company to activate and retain the service. Match each customer below to the radio company’s best profit-maximizing price strategy.
a. Ricardo explains that he is indifferent to the new service, and has not yet sampled many of the stations.
b. Joe, who explains that he needs music to sing along with while he commutes two hours each day for work.
c. Natasha, who says that she likes the service, but who commutes less than a half hour each day for work.
1. high price
2. medium price
3. low price
The company's best profit-maximizing price strategy based on the views of their customers is:
Ricardo - Low price. Joe - High price. Natasha - Medium price. What is the company's best profit-maximizing price strategy?The company should charge more to customers that use the service a lot. This is why Joe should be charged the highest price.
Natasha would like to use the commercial music service more but she doesn't commute to work much so a medium price would be good.
Ricardo is indifferent and hasn't used the service much and so should get the lowest price.
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Describe how you will operate your business
Dextra Computing sells merchandise for $16,000 cash on September 30 (cost of merchandise is $11,200). Dextra collects 9% sales tax. Record the entry for the $16,000 sale and its sales tax. Also record the entry that shows Dextra sending the sales tax on this sale to the government on October 15.
Answer:
See journal entries under the explanation below:
Explanation:
The journal entries will look as follows:
Dextra Computing
Journal Entries
Date Particulars Debit ($) Credit ($)
Sep 30 Cash 17.440
Sales 16,000
Sales Taxes Payable ($16,000 * 9%) 1,440
(To record the cash sale and 9% sales tax)
Cost of Goods Sold 11,200
Merchandise Inventory 11,200
(To record the cost of sales.)
Oct 15 Sales Taxes Payable ($16,000 * 9%) 1,440
Cash 1,440
(To record sending sales tax to the government.)
Blooming Sun investment corporation is facing problems in their records
maintenance, So they have decided to launch a new Management Information
system. The cost of MIS includes 150 computers at $500 each, 5 Printers at
$400 each, 5 network connections at $900 each, 20 boxes of Papers and
stationery at $50 each, 5 Scanners at $2995 each. The training cost that is
required to be provided to the staff includes fringe benefits $50 each to 150
participants, 15 trainers at $ 500 each. Training room is required for three
sessions which will cost $750 per session and administrative cost is $300 per
session.
The experts have estimated that the new MIS will be helpful in adding $25000
per year in benefits.
Questions:
1. Identify the direct cost, Training cost and total cost of Management information system?
2. In how many years the breakeven of this project cost will be achieved?
Answer:
Achived that the breakeven
1. Direct cost is:
= $97,475
Training cost is:
= $18,150
Total cost of Management Information System is:
= $115,625
2. The number of years that the break-even of this project cost will be achieved is:
= 5 years.
Data and Calculations:
Cost of the MIS:
150 computers at $500 each, = $75,000 (150 x $500)
5 Printers at $400 each = 2,000 (5 x $400)
5 network connections at $900 each = 4,500 (5 x $900)
20 boxes of Papers and stationery at $50 each 1,000 (20 x $50)
5 Scanners at $2,995 each 14,975 (5 * $2,995)
Total direct costs of the new MIS = $97,475
The training costs:
Fringe benefits $50 each to 150 participants = $7,500 ($50 x 150)
15 trainers at $ 500 each. 7,500 ($500 x 15)
Training room cost $750 per session 2,250 ($750 x 3)
Administrative cost is $300 per session 900 ($300 x 3)
Total cost of training $18,150
Total cost of the Management Information System = $115,625 ($97,475 + $18,150)
Annual benefits = $25,000
Break-even project cost (payback period) will be achieved in 4.625 years ($115,625/$25,000)
= 5 years approximately
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Newhard Company assigns overhead cost to jobs on the basis of 114% of direct labor cost. The job cost sheet for Job 313 includes $26,530 in direct materials cost and $10,500 in direct labor cost. A total of 1,400 units were produced in Job 313.
Required:
a. What is the total manufacturing cost assigned to Job 313?
b. What is the unit product cost for Job 313?
Answer:
Results are below.
Explanation:
Giving the following information:
Estimated overhead rate= 114% of direct labor cost.
Job 313:
Direct materials= $26,530
Direct labor= 10,500
Number of units= 1,400
First, we need to allocate overhead to Job 313:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 10,500*1.14= $11,970
Now, the total cost:
Total cost= 26,530 + 10,500 + 11,970
Total cost= $49,000
Finally, the unitary cost:
Unitary cost= 49,000 / 1,400
Unitary cost= $35
Your uncle offers you a choice of $112,000 in 10 years or $51,000 today. Use Appendix B as an approximate answer, but calculate your final answer using the formula and financial calculator methods. a-1. If money is discounted at 8 percent, what is the present value of the $112,000
Answer:
the present value of the $112,000 is $51,856
Explanation:
The computation of the present value is given below:
Present Value = Amount × Present value factor at 8% for 10 years
= $112,000 × 0.463
= $51,856
hence, the present value of the $112,000 is $51,856
We simply applied the above formula so that the correct amount could come
how is corporate income tax similar to direct tax ? (2)
Answer:
Corporate tax is an expense of a business (cash outflow) levied by the government that represents a country's main source of income, whereas personal income tax is a type of tax governmentally imposed on an individual's income, such as wages and salaries.
Brown Co. issued $100 million of its 10% bonds on April 1, 2016, at 99 plus accrued interest. The bonds are dated January 1, 2016, and mature on December 31, 2035. Interest is payable semiannually on June 30 and December 31. What amount did Brown receive from the bond issuance?
a) $87.8 million
b) $99.0 million
c) $100.0 million
d) $101.5 million
Answer:
d) $101.5 million
Explanation:
The computation of the amount received from the bond issuance is given below:
Interest Rate: 10%
Time period: 3 months (from 01.01.2016 to 31.03.2016)
Par Value=$100 million
Accrued Interest be 2.53 million
So,
Amount receive from Bond Issuance is
= 99 + 2.53
= $101.5 million
Is increasing the entrepreneurial orientation of a firm always a good thing?
Answer:
Not always. It's a good thing to develop new business opportunities, but not if it leads to too many inefficiencies connected to resources and learning curves.
Bonita Industries has several outdated computers that cost a total of $18400 and could be sold as scrap for $6400. They could be updated for an additional $3100 and sold. If Bonita updates the computers and sells them, net income will increase by $9000. At what price were the updated versions sold?
a. 13,400
b. 6600
c. 6800
d. 8000
Answer:
the updated version should be sold at $18,500
Explanation:
The computation of the selling price is given below:
= Sale value of scrap + additional amount sold + increase of net income
= $6,400 + $3,100 + $9,000
= $18,500
Hence, the updated version should be sold at $18,500
This is the answer but the same is not provided in the given options
Asonia Co. will pay a dividend of $4.95, $9.05, $11.90, and $13.65 per share for each of the next four years, respectively. The company will then close its doors. If investors require a return of 9.2 percent on the company's stock, what is the stock price
Answer: $30.86
P = $4.95/(1 + .92) + $9.05/(1 + .92)^2 + $11.90/(1 + .92)^3 + $13.65/(1 + .92)^4
P = 4.53+7.59+ 9.14+ 9.60=$30.86
Explanation:
Dividend discount: Dividend year 1 divided by (1 plus the required rate of return)
PLUS Dividend year 2 divided by (1 plus the required rate of return) to the second power
PLUS Dividend year 3 divided by (1 plus the required rate of return) to the third power
PLUS Dividend year 4 divided by (1 plus the required rate of return) to the fourth power
Sometimes the exports of developing nations are concentrated in only one or a few primary products.
a. True
b. False
Answer:
I think true if not sorry:-(
