Answer:
Fredonia Barber Shop
a. Variable costs per haircut = $4.40
Total monthly fixed costs = $8,910
b. Break-even point in units = 1,350
Break-even point in sales dollars = $14,850
Net income with 1,670 haircuts = $2,120
Explanation:
a) Data and Calculations:
Fixed costs:
Wages of barbers per month = $6,900 ($1,380 * 5)
Manager's allowance per month = $535
Advertising per month = $270
Rent per month = $1,010
Utilities per month = $160
Magazines per month = $35
Total fixed costs per month = $8,910
Ivanhoe currently charges $11 per haircut.
Variable costs per haircut:
Commission per haircut = $3.75
Barber supplies per haircut = $0.50
Utilities per haircut = $0.15
Total variable costs per unit $4.40
Contribution margin per haircut = $6.60 ($11 - $4.40)
Contribution margin ratio = 0.6
Break-even point in units = $8,910/$6.60 = 1,350
Break-even point in sales dollars = $8,910/0.6 = $14,850
Net income assuming 1,670 haircuts for a month:
Sales revenue = $18,370 ($11 * 1,670)
Variable costs = 7,340 ($4.40 * 1,670)
Contribution $11,030
Fixed costs 8,910
Net income $2,120
8794979666++++45626563.
Variable costs as a percentage of sales for Lemon Inc. are 71%, current sales are $551,000, and fixed costs are $207,000. How much will operating income change if sales increase by $37,600? a.$10,904 increase b.$26,696 decrease c.$26,696 increase d.$10,904 decrease
Answer: a.$10,904 increase
Explanation:
Operating income before sales increase:
= Sales - Variable costs - Fixed costs
= 551,000 - (71% * 551,000) - 207,000
= -$47,210
Operating income after sales increase:
Sales increases to:
= 551,000 + 37,600
= $588,600
= 588,600 - (71% * 588,600) - 207,000
= -$36,306
Difference:
= -47,210 - (-36,306)
= Increase of $10,904
Frantic Fast Foods had earnings after taxes of $430,000 in 20X1 with 345,000 shares outstanding. On January 1, 20X2, the firm issued 34,000 new shares. Because of the proceeds from these new shares and other operating improvements, earnings after taxes increased by 23 percent.
Required:
a. Compute earnings per share for the year 20X1. (Round your answer to 2 decimal places.)
b. Compute earnings per share for the year 20X2. (Round your answer to 2 decimal places.)
Answer:earnings per share for the year 20X1= $1.25 per share
earnings per share for the year 20X2 = 1.40
Explanation:
Earning per share is calculated as = Earning after taxes ÷ Shares outstanding
Therefore, earnings per share for the year 20X1.
= $430,000 ÷345,000 shares
= $1.25 per share
2. In the next year,there was a change in earnings after tax by 23 percent and an increase in shares by 34,000,
Therefore, we have earnings per share for the year 20X2 as
= ($430,000 × 1.23) ÷ ( 345,000 + 34,000)
=528,900/379000
=1.3955 rounded to 1.40
Alyeska Services Company, a division of a major oil company, provides various services to the operators of the North Slope oil field in Alaska. Data concerning the most recent year appear below: Sales $ 17,700,000 Net operating income $ 5,300,000 Average operating assets $ 35,100,000 Required: 1. Compute the margin for Alyeska Services Company. (Round your answer to 2 decimal places.) 2. Compute the turnover for Alyeska Services Company. (Round your answer to 2 decimal places.) 3. Compute the return on investment (ROI) for Alyeska Services Company.
Answer:Profit margin = 29.94%
Asset Turnover =0.50
Return on investment (ROI) =15.09%
Explanation:
Given
Sales for the year = $ 17,700,000
Net Operating Income = $ 5,300,000
Average Operating Assets = $ 35,100,000
a)Profit margin = (Net operating income/Net sales ) x 100%
= $5,300,000/$17,700,000 x 100% = 29.94%.
This shows that the Alyeska Services company has ability to turn income to profit by 29.94%
b. Asset Turnover = Total Sales/ Average Total Assets = $17,700,000/$35,100,000 = 0.50
c. Return on investment (ROI) =Net income/Total investment x 100%
= $ 5,300,000/ $ 35,100,000 x 100% =15.09%
Suppose you purchase a $1,000 TIPS on January 1, 2021. The bond carries a fixed coupon of 1 percent. Over the first two years, semiannual inflation is 4 percent, 1 percent, 2 percent, and 3 percent, respectively. For each six-month period, calculate the accrued principal and coupon payment.
Answer:
FOR THE FIRST SIX-MONTH PERIOD
Accrued principal = $1,040
Coupon payment = $5.20
FOR THE SECOND SIX-MONTH PERIOD
Accrued principal = $1,050.40
Coupon payment = $5.25
FOR THE THIRD SIX-MONTH PERIOD
Accrued principal = $1,071.41
Coupon payment = $5.36
FOR THE FOURTH SIX-MONTH PERIOD
Accrued principal = $1,103.55
Coupon payment = $5.52
Explanation:
These can be calculated using the following formulae:
Accrued principal = Amount or previous accrued principal * (100% + inflation rate) ...........(1)
Coupon payment = Accrued principal * (Fixed coupon rate * (6 months / 12 months))............(2)
Therefore, we have:
FOR THE FIRST SIX-MONTH PERIOD
Accrued principal = $1,000 * (100% + 4%) = $1,040
Coupon payment = $1,040 * (1% * (6 / 12)) = $5.20
FOR THE SECOND SIX-MONTH PERIOD
Accrued principal = $1,040 * (100% + 1%) = $1,050.40
Coupon payment = $1,050.40 * (1% * (6 / 12)) = $5.25
FOR THE THIRD SIX-MONTH PERIOD
Accrued principal = $1,050.40 * (100% + 2%) = $1,071.41
Coupon payment = $1,071.41 * (1% * (6 / 12)) = $5.36
FOR THE FOURTH SIX-MONTH PERIOD
Accrued principal = $1,071.41 * (100% + 3%) = $1,103.55
Coupon payment = $1,103.55 * (1% * (6 / 12)) = $5.52
Your aunt has promised to give you $5,000 when you graduate from college. You expect to graduate three years from now. If you speed up your plans to enable you to graduate two years from now, the present value of the promised gift will: Multiple Choice be less than $5,000. remain constant. decrease. Incorrect equal $5,000. increase
Answer:
The present value of the promised gift will:
be less than $5,000.
Explanation:
The present value of $5,000 to be received in three years' time from today is less than $5,000 received. This is explained by the time value of money concept. If the $5,000 gift is discounted to today's value, using a discount factor of 0.751 (10% in three years' time), it would be $3,755 ($5,000 * 0.751). This means that $5,000 received in year 3 is less than $5,000 received today.
The present value of the promised gift will be less than $5,000 If a person speeds up his/her plans to enable to graduate two years from now, by applying the concept of the time value of money.
What is the time value of money?The time value of money is a fundamental concept of finance. This concept maintains that money or cash in the present is worth more than the identical sum of money to be accepted in the future.
In the above case, The present value of $5,000 to be received in the period of three years from today would be less than $5,000 received.
In the above case, the concept of the time value of money is applied. It means that if the $5,000 gift is discounted to today's value, using a discount factor of 0.751 (10% in three years' time), it would be:
[tex]=\$5,000 \times 0.751\\= \$3,755[/tex]
This means that $5,000 received in year 3 is less than $5,000 received today.
Therefore, option A is correct.
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A standard cost is: Group of answer choices The actual cost of a unit of production. A budget for the production of one unit of a product or service. Useful in calculating equivalent units. The average cost within the industry. The cost from prior years.
Answer:
A budget for the production of one unit of a product or service.
Explanation:
A standard cost is an expected cost where the company normally created at the starting of the year for the prices that are paid and the amount that are applied. It is an expected amount that should be paid for material and labor cost
So it is a budget where the production of one unit with respect to the product or service could be done
Fly High Inc. intends to invest in a new airplane. Information regarding the investment in the airplane is given below: Project A Life of project 5 years Initial investment $33,277,644 Net annual after-tax cash inflow $7,900,000 The cost of capital for the company is 8%. Calculate the internal rate of return (IRR) for the new airplane. a.10% b.8% c.6% d.5%
Answer:
c.6%
Explanation:
IRR is the interest rate at which the NPV of a project is zero
Use the following steps to determine the IRR
1. Determine the cash flows
2. Calculate the Total Annual cash flow
3. Use the IRR function in Excel to calculate the IRR for the calculated cash flow
The working is attached with this answer please find it.
Brazil, Russia, India, China, and South Africa, also known as BRICS, are emerging countries poised to be dominant economic players in the 21st century. What are some of the political, legal and economic conditions that help or hinder economic expansion for these countries?
Answer:
Major challenges are wars and conflicts, reduced investments and reduced trade is hindering the economic development.
Explanation:
The BRICS economy is in the major economy in the world. It has an economy of manufacturing, services, and raw materials. The contribution of the BRCS economy is bout 30% of the world economy as of 2014.Give examples if operational conflicts that could occur in a cross- cultural context because of different attitudes towards:1) time, 2) individualism. Give a country or region that would be different from the US for each of the two variables.
The correct answer to this open question is the following.
Give examples of operational conflicts that could occur in a cross-cultural context because of different attitudes towards:1) time, 2) individualism.
Well, let's start with time. In the United States, time is of the utmost importance. There we have the old saying: "Time is money."
In the workplace, everything is based on the smart and efficient use of time. No time must be wasted in the workplace.
Individual effort is important in the American culture, but the team effort, the concept of being a good team player is very important under the following premise: teams can accomplish more than individuals.
What most Americans desire is individual recognition through team effort.
That is why team sports are so good in the United States because they exemplify the way teams function and what they can accomplish. For instance, college and pro football, basketball, and baseball.
The region that has a different approach, is Latin America. This does not mean that is better than the other, just that there are major differences between the two.
The management of time is very different in Latin American countries. It is not as important as the US. People in Latin America approach the concept of time in a more relaxed way. In Latin America, there is a more relaxed approach to time. Nothing is urgent, Things take time. Things are made at a different pace compared to the US.
And regarding individualism, Latin American people tend to prefer to be more individualistic to do things trying to get some recognition, The team concept is not as developed as in the US.
The records of Pippins, Inc., included the following information: Net sales $ 1,000,000 Gross margin 475,000 Interest expense 50,000 Income tax expense 80,000 Net income 240,000 Compute the times interest earned ratio, rounded to the nearest decimal.
Answer:
the times interest earned ratio is 7.4 times
Explanation:
The computation of the times interest earned ratio is given below/;
Times interest earned ratio is
= EBIT ÷ interest expense
where
EBIT = Net Income + Interest Expense + Income tax Expense
= 240,000 + 50,000 + 80,000
= 370,000
Now the times interest earned ratio is
= $370,000 ÷ $50,000
= 7.4 times
Hence, the times interest earned ratio is 7.4 times
On December 18, Intel receives $249,000 from a customer toward a cash sale of $2.49 million for computer chips to be completed on January 23. The computer chips had a total production cost of $1.49 million. What journal entries should Intel record on December 18 and January 23
Answer:
December 18
Debit cash $249,000
Credit deferred revenue $249,000
January 23rd
Debit Cash $2,241,000
Debit deferred revenue $249,000
Credit sales revenue $2,490,000
January 23rd
Debit Cost of goods sold $1.49 million
Credit Inventory $1.49 million
Explanation:
Preparation of the journal entries that Intel should record on December 18 and January 23
December 18
Debit cash $249,000
Credit deferred revenue $249,000
January 23rd
Debit Cash $2,241,000
($2.49 million-$249,000)
Debit deferred revenue $249,000
Credit sales revenue $2,490,000
($2,241,000+$249,000)
January 23rd
Debit Cost of goods sold $1.49 million
Credit Inventory $1.49 million
The Treaty of Maastricht and the Treaty of Lisbon were indications of __________ within the European Union (EU).
a. a shift toward common external policies.
b. greater political union.
c. increased sovereignty for member countries.
d. a harmonized trade system.
e. less economic structure.
Answer:
Option B
Explanation:
In simple words, The Lisbon Treaty, often known as the Treaty of Lisbon, revised European Union laws by providing a more centralized administration as well as foreign relations, a suitable mechanism for nations wishing to exit the Community, and a simplified method for implementing new legislation.
Thus, from the above we can conclude that the correct option is B.
The Treaty of Maastricht and the Treaty of Lisbon were indications of within the European Union (EU) is :
B) Greater political union.
European UnionThe Treaty of Maastricht and the Treaty of Lisbon were indications of Greater political union within the European Union (EU) .
The Lisbon Treaty is changed European Union laws by giving a more centralized organization as well as remote relations, a appropriate instrument for countries wishing to exit the Community, and a disentangled strategy for actualizing unused legislation.
Thus, the correct option is B.
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Suppose an industrial building can be purchased for $2,500,000 today and is expected to yield cash flows of $180,000 each of the next five years. (Note: assume cash flows are received at end of year.) If the building is expected to be sold at the end of the fifth year for $2,800,000, calculate the IRR for this investment over the five year holding period
Answer: 9.20%
Explanation:
Use Excel to find out the IRR.
Ensure that you write the purchase price in negatives as shown in the attached picture.
The cashflow for the last year will be the sum of the selling price and the cash flow.
= 2,800,000 + 180,000
= $2,980,000
IRR = 9.20%
The payback method of project analysis: Multiple Choice considers the time value of money. is, generally speaking, the best method of project analysis. may ignore some project cash flows. is biased towards long-term projects over short-term projects.
Answer:
may ignore some project cash flows.
Explanation:
Payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative cash flows
Payback period = Amount invested / cash flow
for example, if 100,000 is invested in project. the cash flows is 20,000 for the next five years, payback = 100,000 / 20,000 = 5 years
cash flows after year 5 would be ignored
Also, it can be seen that the time value of money is not considered. the cash flows have equal value regardless of when they occur
the best method is the net present value
Luthan Company uses a plantwide predetermined overhead rate of $23.90 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $286,800 of total manufacturing overhead cost for an estimated activity level of 12,000 direct labor-hours. The company incurred actual total manufacturing overhead cost of $266,000 and 11,100 total direct labor-hours during the period.
Required:
Determine the amount of manufacturing overhead that would have been applied to units of product during the period.
Answer:
Allocated MOH= $262,900
Explanation:
Giving the following information:
Plantwide predetermined overhead rate= $23.90 per direct labor hour.
The company incurred actual 11,100 total direct labor hours during the period.
To allocate overhead costs, we need to use the following formula:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 11,000*23.9
Allocated MOH= $262,900
In the manufacture of 9,400 units of a product, direct materials cost incurred was $174,900, direct labor cost incurred was $109,800, and applied factory overhead was $44,200. What is the total conversion cost?
Answer:
$154,000
Explanation:
Calculation to determine the total conversion cost
Using this formula
Total conversion cost=Direct labor cost incurred
+Applied factory overhead
Let plug in the formula
Total conversion cost =$109,800+$44,200
Total conversion cost=$154,000
Therefore Total conversion cost is $154,000
Carlise Corp., which manufactures ceiling fans, currently has two product lines, the Indoor and the Outdoor. Carlise has total overhead of $136,612.
Carlise has identified the following information about its overhead activity cost pools and the two product lines:
Activity Cost Pools Cost Driver Cost Assigned to Pool Quantity/Amount
Consumed by Indoor Line Quantity/Amount
Consumed by Outdoor Line
Materials handling Number of moves $ 18,661 560 moves 430 moves
Quality control Number of inspections $ 76,590 6,000 inspections 5,100 inspections
Machine maintenance Number of machine hours $ 41,360 22,000 machine hours 25,000 machine hours
Required:
1. Suppose Carlise used a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount.)
Overhead Assigned
Indoor Model ?
Outdoor Model ?
Total ?
2. Calculate the activity proportions for each cost pool in Carlise's ABC system. (Round your answers to 2 decimal places.
Activity Proportions
Indoor Line
Outdoor Line
Materials Handling % ? % ? per Move
Quality Control % ? % ? per Inspection
Maintenance % ? % ? per Machine hour
3. Calculate the amount of overhead that Carlise will assign to the Indoor line if it uses an ABC system.(Round your intermediate calculations to 2 decimal places and round your final answers to the nearest whole dollar amount.)
Indoor Model
Materials Handling ?
Quality Control ?
Maintenance ?
Total Overhead Assigned ?
Answer:
Carlise Corp.
1. Traditional method:
Overhead Assigned
Indoor Model $63,946
Outdoor Model $72,666
Total $136,612
2. Activity Proportions
Overhead assigned Indoor Outdoor
Materials handling 56.6% 43.4% per move
Quality control 54.1% 45.9% per inspection
Machine maintenance 46.8% 52.2% per machine hour
3. Overhead assigned using ABC system:
Overhead assigned Indoor Outdoor Total
Materials handling $10,556 $8,105 $18,661
Quality control 41,400 35,190 76,590
Machine maintenance 19,360 22,000 41,360
Total overhead assigned $71,316 $65,295 $136,611
Explanation:
a) Data and Calculations:
Total overhead = $136,612
Activity Cost Cost Driver Cost Assigned Indoor Outdoor
Pools to Pool
Materials handling Number of moves $ 18,661 560 430
Quality control Number of inspections $ 76,590 6,000 5,100
Machine
maintenance Number of m. hours $ 41,360 22,000 25,000
Overhead rate based on machine hours:
= $2.91 ($136,612/47,000)
Overhead assigned to each product line:
Indoor Outdoor
Overhead assigned $63,946 $72,666
(22,000/47,000 * $136,612) ($25,000/47,000 * $136,612)
Overhead rates using activity costing method:
Materials handling $ 18,661/990 = $18.85
Quality control $ 76,590/11,100 = $6.90
Machine maintenance $ 41,360/47,000 = $0.88
Overhead assigned Indoor Outdoor Total
Materials handling $10,556 56.6% $8,105 43.4% $18,661
Quality control 41,400 54.1% 35,190 45.9% 76,590
Machine maintenance 19,360 46.8% 22,000 52.2% 41,360
Total overhead assigned $71,316 52.2% $65,295 47.8% $136,611
Consumer Price Index (CPI) is an
A. economic condition in which there is a decline in the price of
goods and services
B. economic measurement that helps determine changes in the
purchasing power of a dollar
c. economic condition in which money loses its purchasing power
and prices rise
D. amount of goods that can be purchased with a unit of currency
Answer:
B
Explanation:
The Consumer Price Index (CPI) measures monthly changes in prices for a range of consumer products
Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $448,000, and the sales mix is 40% bats and 60% gloves. The unit selling price and the unit variable cost for each product are as follows: Products Unit Selling Price Unit Variable Cost Bats $40 $30 Gloves 100 60 a. Compute the break-even sales (units) for both products combined. fill in the blank 1 units b. How many units of each product, baseball bats and baseball gloves, would be sold at break-even point? Baseball bats fill in the blank 2 units Baseball gloves fill in the blank 3 units
Answer: a)the break-even sales (units) for both products combined= 16,000 units
b)break-even point for Baseball bats= 6, 400units
break-even point for Baseball gloves= 9,600units
Explanation:
a. Break-even sales (units) is given as:-
Contribution margin=Sales - Variable costs
Contribution margin for Bats = $40 - $30
= $10
Contribution margin for Gloves = $100 - $60
= $40
Weighted average Contribution margin = ($10 × 40%) + ($40 × 60%)
= $4+ $24
= $28
Break-even = Fixed cost ÷ Contribution margin
= $448,000 ÷ $28
= 16,000 units
b. The computation of units of each product is shown below:-
Baseball bats = 16,000 units × 40%= 6, 400units
Baseball gloves = 16,000units × 60%=9,600units
Accounts receivable arising from sales to customers amounted to $85,000 and $75,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $285,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is:____.
a. $275,000.
b. $445,000.
c. $285,000.
d. $295,000.
Answer:
d. $295,000
Explanation:
Calculation to determine what the cash flows from operating activities to be reported on the statement of cash flows is:
Using this formula
Cash flows from operating activities =Net income + Decrease in accounts receivable
Let plug in the formula
Cash flows from operating activities=$285,000+($85,000-$75,000)
Cash flows from operating activities=$285,000+$10,000
Cash flows from operating activities=$295,000
Therefore the cash flows from operating activities to be reported on the statement of cash flows is:$295,000
A small component is purchased for the use in the production of a major product. The standard price of the component is $0.85. During a recent period, 7,800 units were purchased and 6,800 were actually used. The standard quantity of units allowed for the actual output of the period was 6,540 units. What was the materials quantity variance
Answer:
See below
Explanation:
Given the above information,
Material quantity variance is computed as;
= (Actual quantity - Standard quantity of units allowed for the actual output )
Actual quantity = 6,800 units
Standard quantity = 6,540 units
= 6,800 - 6,540
= 260 units
Therefore, the materials quantity variance is 260 Unfavourable.
It is unfavourable because the standard is higher than the actual
A production process has six subsequent stages, each with their own specific resources and performing crucial tasks. Four of these stages have a capacity of 20 units per hour, while the other two stages have a capacity of 10 units per hour. What is the best conclusion?
Answer: Both stages with a capacity of 10 units per hour can be considered bottlenecks.
Explanation:
From the information given in the question, the best conclusion is that both stages with a capacity of 10 units per hour can be considered the bottlenecks.
It should be noted that the bottleneck in the chain of processes, is the one that has the limited capacity and this then reduces the capacity of the whole chain and slows down production.
Coke and Pepsi are examples of
Coke and Pepsi are examples of soft drinks.
Hope this helps!
Have a great day!
Indy Company has the following data for one of its manufacturing plants:
Maximum units produced in a quarter (3-month period): 250,000 units
Actual units produced in a quarter (3-month period): 204,000 units
Productive hours in one quarter: 25,000 hours
Actual cycle time: 7.35 minutes
Theoretical cycle time: 6 minutes
Required:
1. Calculate the amount of processing time and the amount of nonprocessing time. If required, round your answers to two decimal places.
Processing time minutes
Nonprocessing time minutes
2. Calculate the MCE. If required, round your answer to nearest whole number. %
Answer:
1. Processing time:
Processing time = Theoretical time
Processing time is there for 6 minutes
Non processing time = Actual cycle time - processing time
= 7.35 - 6
= 1.35 minutes
2. Manufacturing Cycle Efficiency (MCE):
= Processing time / Actual cycle time
= 6 / 7.35
= 81.6%
The book value of long-term assets is reported on:
Flying Cloud Co. has the following operating data for its manufacturing operations:
Unit selling price $ 350
Unit variable cost $ 100
Total fixed costs $980,000
The company has decided to increase the wages of hourly workers which will increase the unit variable cost by 10%. Increases in the salaries of factory supervisors and property taxes for the factory will increase fixed costs by 5%. If sales prices are held constant, the next break-even point for Flying Cloud Co. will be:__________
a) increased by 368 units
b) decreased by 368 units
c) increased by 132 units
d) decreased by 264 units
Answer:
a) increased by 368 units
Explanation:
The calculation of the next break even point should be
Existing break-even point for Flying Cloud Co. is
= Fixed Cost ÷ Contribution Margin Per Unit
= Fixed Cost ÷ Sales Price Per Unit - Variable Cost per Unit
= $980,000 ÷ ( $350 - $100)
= 3,920 Units
Now
Revised Variable cost = $100 × 110%
= $110
And,
Revised Fixed cost = $980,000 × 105%
= $1,029,000
So,
Revised break-even point for Flying Cloud Co. is
= Fixed Cost ÷ ( Contribution Margin Per Unit
= Fixed Cost ÷ ( Sales Price Per Unit - Variable Cost per Unit
= $1,029,000 ÷ ( ( $350 -$110)
= 4,287.5
= 4,288 units
So,
Increase = 4,288 Units - 3920 Units
= 368 Units Increase
Fixed Overhead Spending and Volume Variances, Columnar and Formula Approaches.
Branch Company provided the following information:
Standard fixed overhead rate (SFOR) per direct labor hour $5.00
Actual fixed overhead $305,000
BFOH $300,000
Actual production in units 16,000
Standard hours allowed for actual units produced (SH) 64,000
Required:
a. Calculate the fixed overhead spending and volume variances.
b. Calculate the fixed overhead spending variance.
c. Calculate the total fixed overhead variance.
Answer:
a. Fixed overhead spending variance:
= Actual fixed overhead - Budgeted Flexible overhead
= 305,000 - 300,000
= $5,000 Unfavorable
Fixed overhead volume variance:
= (Standard fixed overhead rate (SFOR) per direct labor hour * Standard hours allowed for actual units produced ) - Budgeted Flexible overhead
= (5 * 64,000) - 300,000
= $20,000 favorable
b. Fixed overhead spending variance:
= Actual fixed overhead - Budgeted Flexible overhead
= 305,000 - 300,000
=$5,000 Unfavorable
c. Fixed overhead variance:
= (Standard fixed overhead rate (SFOR) per direct labor hour * Standard hours allowed for actual units produced ) - Actual fixed overhead
= (5 * 64,000) - 305,000
= $15,000 favorable
In 4-6 sentences, discuss how understanding the concept of price elasticity of demand is useful for a business owner/firm operating in any market structure. Copying the definition or restating the definition of elasticity will result in loss of points. (What does price elasticity of demand tell the firm in terms
Answer:
The concept of price elasticity is important to a firm because it would help a firm determine how to change prices in order to increase total revenue
For example, if a firm has an elastic demand, if price is increased, the quantity demanded would fall. The fall in demand would be greater than the increase in price. As a result, total revenue would fall. If price is reduced, the quantity demanded would increase.. the increase in demand would be greater than the reduction in price. Total revenue would increase
If on the other hand, demand is inelastic, if price is increased, total revenue increases. If price is reduced, total revenue reduces
Explanation:
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.
If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes.
Demand is inelastic if a small change in price has little or no effect on quantity demanded. The absolute value of elasticity would be less than one
Demand is unit elastic if a small change in price has an equal and proportionate effect on quantity demanded.
Infinitely elastic demand is perfectly elastic demand. Demand falls to zero when price increases
Perfectly inelastic demand is demand where there is no change in the quantity demanded regardless of changes in price.
Seth's Tax Services had the following accounts and account balances after adjusting entries. Assume all accounts have normal balances.
Prepare the adjusted trial balance for Seth's Tax Services as of December 31, 2018.
Cash $ ?
Land 26,000
Utilities Payable 150
Accounts Payable 3,700
Accumulated Depreciation—Equipment 1,800
Service Revenue 75,000
Supplies Expense 1,100
Dividends14,000
Equipment $11,000
Accounts Receivable 4,950
Office Supplies 700
Common Stock 22,600
Utilities Expense 1,650
Unearned Revenue 900
Depreciation Expense—Equipment 1,900
Salaries Expense 5,600
Answer and Explanation:
The preparation of the trial balance is presented below:
Particulars Debit Credit
Cash 37250
Accounts Receivable 4950
Office Supplies 700
Equipment 11000
Accumulated
Depreciation - Equipment 1800
Land 26000
Accounts Payable 3700
Utilities Payable 150
Unearned Revenue 900
Common Stock 22600
Dividends 14000
Service Revenue 75000
Salaries Expense 5600
Depreciation
Expense - Equipment 1900
Supplies Expense 1100
Utilities Expense 1650
Total 104150 104150
