Answer:
His maximum inventory level would be 180 units
Explanation:
According to the given data we have the following:
daily demand rate , d=1,600/200=8 units;
daily production rate p=80 units;
C0=25 dollar
Cc=2 dollar
Therefore, Qopt=√2*25*1,600/(2(1-8/80))
Qopt=210.82
But here Rolf decide to produce 200 units each time he started production, hence fix Q=200
Therefore, Maximum inventory level=200*(1-8/80)=200*0.9
Maximum inventory level=180 units
His maximum inventory level would be 180 units
Rolf Steps' maximum inventory level would be 126 units.
Data and Calculations:
Annual demand = 1,600 units
Holding costs = $2 per unit
Setup cost = $200 ($25 x 8)
Working days per year = 200 days
Production rate per day = 80 units
Number of setup = 8 setups (1,600/200)
Re-order quantity = square root of (2 x 1,600 x $200)/$2
= 566 units
Maximum Level = Re-order level + Re-order quantity – (Minimum usage × Minimum lead time)
= 200 + 566 - (80 x 8)
= 766 - 640
= 126 units
Learn more: https://brainly.com/question/19564184
4. The prices of discount bonds (all with maturity value of $1,000) maturing in years 1, 2, 3, 4, 5 are given below. Price Time to Maturity 920 1 860 2 790 3 700 4 600 5 What is the yield to maturity on a risk-free 5% bond due in 5 years (also with maturity value of $1,000)
Answer:
YTM = 10.5%
Explanation:
Solution
Given that:
The cash flow related with the 5% bond are computed below:
t = 0 1 (50) 2 (50) 3(50) 4 (50) 5(1050)
Now,
We calculate the discount factors which is given below:
1 /1 + r₁ = 920/1000 = 0.92
1/(1 + r₂)² = 860/1000 = 0.86
1/(1 + r₃)³ = 790/1000 = 0.79
1/(1 + r₄)⁴ = 700/1000 = 0.7
1/(1 + r₅)⁵ = 600/1000 0.6
Thus,
P₅% bond = 50 (0.92) + 50 (0.86) + 50 (0.79) + 50 (0.7) +1050 (0.6)
=$793. 50
For the yield to maturity (YTM) is refereed to as the IRR of this bond.
Now to solve for the YTM we have teh following.
P₅% bond = 50/YTM ║ 1- 1/(1 +YTM)⁵║ + 1000/(1+ YTM)⁵
793.5 = 50/YTM ║ 1- 1/(1 +YTM)⁵║ + 1000/(1+ YTM)⁵
Therefore
YTM = 10.5%
Note: the present value of all coupons was computed by applying the annuity formula, also added the PV of the face value
The following account titles were drawn from the general ledger of Holt Food Supplies, Incorporated (HFSI): Computers, Operating Expenses, Rent Revenue, Building, Cash, Notes Payable, Land, Utilities Payable, Utilities Expense, Trucks, Gasoline Expense, Retained Earnings, Supplies, Accounts Payable, Office Furniture, Salaries Expense, Common Stock, Service Revenue, Interest Expense, Dividends, Supplies Expense. Required A. List each account title under the element of the accounting equation to which it belongs. B. Will all businesses have the same number of accounts?
Answer:
Assets= Liabilities + Owner's Equity
Part B: No, all companies do not have the same accounts. The accounts depend on the types of business they are doing. For example a tailoring company would own tailoring machines. A washing company would own washing machines etc. However the accounting equation remains the same. Assets= Liabilities + Owner;s Equity. The assets accounts are included in assets and liabilities and Owner's Equity accounts are inluded in liabilities and owner's equity section.
Explanation:
Holt Food Supplies, Incorporated (HFSI)
Assets
Cash
Supplies
Trucks
Computers
Office Furniture
Land
Building
Liabilities
Short term Liabilities
Accounts Payable
Utilities Payable
Long Term Liabilities
Notes Payable
Stockholder's Equity
Dividends
Common Stock
Retained Earnings(+ Net profit )*
Rent Revenue
Service Revenue
Operating Expenses
utilities Expense
salaries expense
supplies expense
interest expense
The above accounts are included in the balance sheet which is given by the equation
Assets= Liabilities + Retained Earnings
The net profit is calculated from the income statement in which the revenues are added and expenses are subtracted from them to get the net profit. That profit is added to the retained earnings of the balance sheet.
Net Profit = Revenue - Expenses
A circuit contains two 90 Ω resistors connected in parallel. What's the total circuit resistance?
Answer:
45ohms
Explanation:
Total resistance in parallel can be calculated by the addition of both resistors
1/R= 1/R1 + 1/R2
The value given are
R1= 90 ohms , R2= 90 ohms
1/R = 1/90+1/90
Take the LCM of both denominators
1/R = 2/90
1/R = 1/45
Cross multiply both sides
R×1 = 45×1
R= 45 ohms
Thus, the total reistance is 45 ohms
Answer:
Total circuit resistance = 45ohms
Explanation:
Given that R1 = 90 and R2 = 90
Rt = total circuit resistance
Resistance in parallel:
Resistance in parallel is found by:
1/Rt = 1/R1 + 1/R2
1/Rt = 1/90 + 1/90
Take the L. C. M and simply
1/Rt = (1 + 1) / 90
1/Rt = 2 / 90
1/Rt = 1/45
Rt = 45 ohms
Total circuit resistance = 45ohms
Suppose that the government wishes to decrease the market equilibrium monthly rent by increasing the supply of housing. Assuming that demand remains unchanged, by how many additional units of housing would the government need to supply to get the market equilibrium rental price to fall to $1,500 per month?
Answer: 2500 units
Explanation: Since government plans on reducing the market equilibrium rent to $1500 per month, it's required of the govt. to extend the provision of apartments by 2500 units.
The equilibrium rent is $2000 and also the equilibrium quantity is 12,500 units. If 2500 more units were added by the govt. this might cause a rise of 15,000 unit available for rent within the market.
The equilibrium price would now be $1500 (the rent the govt. is trying to achiev.) and also the equilibrium quantity 15,000 units
Ticker Services began operations in 2015 and maintains long-term investments in available-for-sale securities. The year-end cost and fair values for its portfolio of these investments follow.
Portfolio of Available-for-Sale Securities Cost Fair Value
December 31, 2015 $372,000 $360,860
December 31, 2016 428,500 455,800
December 31, 2017 600,200 700,500
December 31, 2018 876,900 780,200
Prepare journal entries to record each year-end fair value adjustment for these securities.
Answer:
1.
Dec. 31, year 1
Dr Fair value adjustment – AFS (LT) 11,140
Cr Unrealized gain – Equity 11,140
2.
Dec. 31, year 2
Dr Fair value adjustment – AFS (LT) 16,160
Cr Unrealized gain – Equity 16,160
3
Dec. 31, year 3
Dr Fair value adjustment – AFS (LT) 73,000
Cr Unrealized gain – Equity 73,000
4.
Dec. 31, year 4
Dr Unrealized loss – Equity 3,600
Cr Fair value adjustment – AFS (LT) 3,600
Explanation:
General journal for Ticker Services
1.
Dec. 31, year 1
Dr Fair value adjustment – AFS (LT) 11,140
Cr Unrealized gain – Equity 11,140
($372,000 $360,860)
2.
Dec. 31, year 2
Dr Fair value adjustment – AFS (LT) 16,160
Cr Unrealized gain – Equity 16,160
(455,800-428,500) -11,140
3.
Dec. 31, year 3
Dr Fair value adjustment – AFS (LT) 73,000
Cr Unrealized gain – Equity 73,000
(700,500-600,200)-(455,800-428,500)
100,300-27,300=73,000
4.
Dec. 31, year 4
Dr Unrealized loss – Equity 3,600
Cr Fair value adjustment – AFS (LT) 3,600
(700,500-600,200) -(876,900 -780,200)
100,300-96,700
3,600
Laser Delivery Services, Inc. (LDS), was incorporated January 1. The following transactions occurred during the year:________. A. Received $37,000 cash from the company's founders in exchange for common stock. B. Purchased land for $14,000, signing a two-year note (ignore interest). C. Bought two used delivery trucks at the start of the year at a cost of $9,000 each; paid $3,500 cash and signed a note due in three years for $14,500 (ignore interest). D. Paid $1,800 cash to a truck repair shop for a new motor, which increased the cost of one of the trucks. E. Stockholder Jonah Lee paid $320,000 cash for a house for his personal use.
Question Requirements:
1. Record the transaction. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal
2. Show the effects of the journal entries by account, using the T-account Cash Equipment Beg. Bal Beg. Bal End. Bal End. Bal Land Notes Payable Beg. Bal Beg. Bal. End. Bal. End. Bal. Common Stock Beg. Bal End. Bal
3. Extract a Trial Balance.
4. Prepare a classified balance sheet for Laser Delivery Services, Inc., at the end of December. Enter Retained earnings with a zero balance in the appropriate section. LASER DELIVERY SERVICES, INC Balance Sheet.
Answer:
1. Journal Entries
Debit Credit
A. Cash $37,000
Common Stock $37,000
To record issue of common stock.
B. Land $14,000
Note Payable $14,000
To record purchase of land for note payable.
C. Vehicles $18,000
Cash $3,500
Notes Payable $14,500
To record purchase of delivery trucks by cash and notes payable.
D. Vehicles Repairs $1,800
Cash $1,800
To record vehicle repair.
E. No journal entry required
2. Leger Accounts:
a) Cash Account
Debit Credit Balance
A. Common Stock $37,000 $37,000
C. Vehicles $3,500 $33,500
D. Vehicle Repair 1,800 $31,700
b) Common Stock
Debit Credit Balance
A. Cash $37,000 $37,000
c) Land
Debit Credit Balance
B. Notes Payable $14,000 $14,000
d) Notes Payable
Debit Credit Balance
B. Land $14,000 $14,000
C. Vehicles $14,500 $28,500
e) Vehicles
Debit Credit Balance
C. Cash $3,500 $3,500
C. Notes Payable $14,500 $18,000
D. Cash $1,800 $19,800
3. Trial Balance as at December 31:
Debit Credit
Cash $31,700
Common Stock $37,000
Land $14,000
Notes Payable $28,500
Vehicles $19,800
Total $65,500 $65,500
4. Balance Sheet as at December 31:
Assets:
Current Assets:
Cash 31,700 31,700
Long-Term Assets:
Land 14,000
Vehicles 19,800 33,800
Total Assets $65,500
Liabilities + Equity:
Liabilities:
Notes Payable 28,500
Common Stock 37,000
Total Liabilities + Equity $65,500
Explanation:
a) The General journal records the transactions as they occur on a daily basis, showing the accounts to be debited and the ones to be credited.
b) The house bought by Stockholder Jonah Lee is a personal transaction that does not relate to the company. The entity concept that separates ownership from the business does not allow such personal transactions to be recorded in the accounting records of a company.
c) The balance sheet shows the assets and the owners of the financial resources used to acquire the assets. It is always in balance, with assets equalling the liabilities and equity with the occurrence of each transaction.
Suppose the government decides to enact a new tax on T-shirts. What will happen in the market for T-shirts? (Note: Neither the supply curve nor the demand curve for T-shirts is perfectly inelastic.)
Answer:
- The price buyers will pay will be higher
- The tax on T shirts will cause a dead weight loss
- There will be a decrease in T shirts sold
Explanation:
In this scenario when curve for demand and is not perfectly inelastic it means that with an increase in price there is a fall in the amount of a good demanded.
So when tax is imposed on the T shirts the producers will have a higher cost of production. This is transfered to the buyer in form of higher prices.
Since the increase in price reduces quantity demanded, the buyer will buy less T Shirts at the higher price
Dead weight loss is a cost to society as a result of inefficiency non the market.
When taxes are applied supply and demand go out of equillibrum as prices are now higher. Therefore tax imposition causes a dead weight loss.
Answer: B. The tax on T-shirts will cause a deadweight loss.
C. The price consumers pay for T-shirts will be higher.
D. The quantity of T-shirts sold will decrease.
Explanation:
The tax will cause a dead weight loss because the Economy is inefficient. By introducing taxes, the Supply and Demand Equilibrium changes and because of this, production shifts to a point where it is not efficient which reduces the welfare of the economy. That loss in welfare is the Deadweight loss.
As a direct result of taxes, consumers usually have to shoulder the burden. The tax will be added to the good which will increase it's price so that the producers are able to pay the Government the taxes required and still have enough for profit.
The Quantity of shirts sold will reduce. As neither the supply nor the demand curve for the T-shirts are perfectly Inelastic, an increase in price will reduce demand but depending on the Elasticity it might not be by a lot but so long as it is not perfectly Inelastic, the demand will reduce.
Some of E and S Electronics's merchandise is gathering dust. It is now December 31, 2018, and the current replacement cost of the ending merchandise inventory is $ 22,000 below the business's cost of the goods, which was $ 100,000. Before any adjustments at the end of the period, the company's Cost of Goods Sold account has a balance of $ 390,000.
Requirements:
1. Journalize any required entries.
2. At what amount should the company report merchandise inventory on the balance sheet?
3. At what amount should the company report cost of goods sold on the income statement?
4. Which accounting principle or concept is most relevant to this situation?
Answer:
Explanation:
1. The journal entry has been attached.
2. The company report merchandise inventory on the balance sheet as:
= $100,000 - $22,000
= $78,000
This is because, when using the market value method, it should be noted that the inventories will be written down to their market value when it is is lower than inventory cost and in situations whereby the market value is higher than inventory cost, there will be no effect given.
3. The company should report cost of goods sold on the income statement as:
= $390000+$22000
= $412,000
4. The accounting principle of conservatism is used here. Conservatism is a policy whereby companies predict possible future losses but they do not anticipate the future gains. It is used by companies on order to play safe. This can be seen here as we wrote down the inventory value when market value is lower than inventory cost.
"Among social workers in selected U.S. urban areas, are the personality characteristics of Need for Structure or In-Group Preference related to prejudicial social judgments about African Americans, Latino Americans, or Asian Americans?" Which of the following is a well-stated subproblem that follows from this research problem?
a. Which group is more discriminated against by the public at large in each of the selected areas: African Americans, Latino Americans, or Asian Americans?
b. What is the most valid existing measure of In-Group Preference?
c. What is the relationship between an index of Need for Structure and an index of prejudice targeting attitudes about Asian Americans among the selected social workers?
d. Which analytic technique is best suited to addressing the research problem, multiple regression or path analysis?
Answer: What is the relationship between an index of Need for Structure and an index of prejudice targeting attitudes about Asian Americans among the selected social workers?
Explanation:
A research problem in research indicates a statement about the area of concern. The research problem is a question which bothers the researcher and hence needs to be investigated.
The problem statement is a description of an issue that the researcher wants to address or a condition that the researcher wants to improved upon. The problem statement shows the gap between current state and the state that is desired.
With regards to the question above, the subproblem will be what is the relationship between an index of Need for Structure and an index of prejudice targeting attitudes about Asian Americans among the selected social workers?
Among the four options provided, option C is the right answer has it provides further questions based on the main question.
The risk-free rate of interest is 4% and the market risk premium is 7%. Hughes Corporation has a beta of 1.3, and last year generated a return of 11% with a standard deviation of returns of 15%. The required return on Hughes Corporation stock is:
Answer:
13.10%
Explanation:
Required return = Risk-free rate + (Beta * Market risk premium) ...... (1)
Where;
Required return = ?
Risk-free rate = 4%, or 0.04
Beta = 1.3
Market risk premium = 7%, or 0.07
Substitute the values into equation (1), we have:
Required return = 0.04 + (1.3 * 0.07) = 0.1310, or 13.10%
Therefore, the required return on Hughes Corporation stock is 13.10%.
An inexperienced accountant for Marigold Corp. showed the following in the income statement: income before income taxes $432,000 and unrealized gain on available-for-sale securities (before taxes) $85,200. The unrealized gain on available-for-sale securities and income before income taxes are both subject to a 33% tax rate. Prepare a correct statement of comprehensive income.
Answer:
$346,524
Explanation:
Marigold Corp correct statement of Comprehensive Income
Income before income taxes 432,000
Income taxes expenses 142,560
(432,000*33%)
Net Income or loss 289,440
(432,000-142,560)
Other comprehensive income:
Unrealized gain on available-for-sale securities before tax
(85,200-(85,200*33%)
=85,200-28,116
=57,084
Hence:
Comprehensive income:
289,440+57,084
=$346,524
Suppose that you make a series of annual deposits into a bank account that pays 10% interest. The initial deposit at the end of the first year is $1,200. The deposit amount decline by $200 in each of the next four years. How much would you have immediately after the fifth deposit? Group of answer choices
Answer:
You will have $5,116 in the account.
Explanation:
a) End of 1st-year deposit of $1,200 will become $1,757 ($1,200 * 1.464) in four years' time.
b) End of 2nd-year deposit of $1,000 will become $1,331 ($1,000 * 1.331) in three years' time.
c) End of 3rd-year deposit of $800 will become $968 ($800 * 1.21) in two years' time.
d) End of 4th-year deposit of $600 will become $660 ($600 * 1.1) in a year's time.
e) End of 5th-year deposit of $400 will be $400 in 0 year's time.
f) The total will be $5,117 (a+b+c+d+e).
g) The future value factor is equal to 1.1ⁿ, where the discount factor is 10%.
Marigold Corp. has outstanding 77000 shares of 5% preferred stock with a $10 par value and 145600 shares of $3 par value common stock. Dividends have been paid every year except last year and the current year. If the preferred stock is cumulative and nonparticipating and $252900 is distributed, the common stockholders will receive _________.
Answer:
$ 175,900.00
Explanation:
Yearly preferred stock dividends=number of preferred shares*dividend percentage*par value
yearly preferred stock dividends=77,000*5%*$10=$ 38,500.00
Since preferred stock is cumulative it implies that dividends in arrears for last year must be paid alongside this year dividends
dividends to preferred stock=$ 38,500*2=$77,000.00
common stockholders' dividends=total dividends-preferred stock dividends=$252,900-$77,000=$ 175,900.00
For the year ending December 31, 2020, Splish Brothers Inc. reports net income $133,000 and cash dividends $90,000. Determine the balance in retained earnings at December 31 assuming the balance in retained earnings on January 1, 2020, was $230,000. (List items that increase retained earnings first.) Splish Brothers Inc. Retained Earnings Statement December 31, 2020 Balance, January 1 $ Less : Net Income / (Loss) Less : Dividends Balance, December 31 $
Answer:
Therefore retained earnings at December 31 is $273,000
Explanation:
Items that increase retail earnings include:
Beginning balance
Net income
Cash dividends
Beginning balance as at January 1,2020 = $ 230,000
Net income = $ 133,000
Cash dividends = ($90,000)
Therefore, retained earnings = Beginning balance + Net income -Cash dividends
= $230,000 + $133,000 - $90,000
= $ 273,000
Suppose that because of the popularity of the low-carb diet, bakeries need fewer workers and steak houses need more workers. The unemployment created by this change is:
A. frictional unemployment created by sectoral shifts.
B. structural unemployment created by sectoral shifts.
C. structural unemployment created by efficiency wages.
D. frictional unemployment created by efficiency wages.
Answer:
The correct answer is: A. frictional unemployment created by sectoral shifts.
Explanation:
Frictional unemployment is a type of search unemployment, which occurs when the worker is looking for a job, or being transferred from one job to another.
This type of unemployment is caused by several circumstances, in the scenario exemplified by the question above, frictional unemployment occurs due to sectoral changes, due to the popularity of the low-carb diet, so there was a migration of jobs from bakeries that need less workers to the steakhouses who need more workers.
Match the terms in the left column with their appropriate definition in the right column. PROBLEMS Terms 1. Economic order quantity (EOQ) 2. Materials requirements planning (MRP) Definitions a. A document that creates a legal obligation to buy and pay for goods or services b. The method used to maintain the cash balance in the petty cash account
Answer: Please the terms do not match the definitions.
Please see below for the appropriate terms which match the given definitions.
Explanation:
A document that creates a legal obligation to buy and pay for goods or services ----Purchase order
A purchase order is defined as a contract or agreement between a buyer( buisness or company) and a seller who is usually a vendor to supply goods or services based on aggrement on the specific product or services, specific quantity for a specific price to be paid by the buyer when delivered .
b)The method used to maintain the cash balance in the petty cash account----- Imprest Fund
An imprest Fund is also known as Petty Cash fund which carries a fixed amount used by Buisnesyses to cover small routine expenses and are replaced or replenished to always maintain the fixed amount.
The following information is available for the first year of operations of Creston Inc., a manufacturer of fabricating equipment:
Sales $1,344,600
Gross profit 363,000
Indirect labor 121,000
Indirect materials 49,800
Other factory overhead 22,900
Materials purchased 685,700
Total manufacturing costs for the period 1,484,400
Materials inventory, end of period 49,800
Using the above information, determine the following amounts:
a. Cost of goods sold $_________-
b. Direct materials cost $__________
c. Direct labor cost $__________
Answer:
a. Cost of goods sold $981,600
b. Direct materials cost $635,900
c. Direct labor cost $654,800
Explanation:
Direct Material Cost Calculation :
Opening Materials Inventory 0
Add Purchases of Materials 685,700
Less Closing Materials Inventory (49,800)
Direct Materials Cost 635,900
Direct Labor Cost ; Total Manufacturing Account
Direct Materials Cost 635,900
Indirect labor 121,000
Indirect materials 49,800
Other factory overhead 22,900
Manufacturing Costs before Direct Labor Cost 829,600
Direct Labor (Balancing Figure) 654,800
Total manufacturing costs 1,484,400
Cost of Goods Sold Calculation
Sales $1,344,600
Less Gross Profit ($363,000)
Cost of Goods Sold $981,600
One year ago, a U.S. investor converted dollars to yen and purchased 100 shares of stock in a Japanese company at a price of 3,150 yen per share. The stock's total purchase cost was 315,000 yen. At the time of purchase, in the currency market 1 yen equaled $0.00952. Today, the stock is selling at a price of 3,465 yen per share, and in the currency market $1 equals 145 yen. The stock does not pay a dividend. If the investor were to sell the stock today and convert the proceeds back to dollars, what would be his realized return on his initial dollar investment from holding the stock?
Answer: -20.31%
Explanation:
A year ago, a United States investor converted dollars to yen and bought 100 shares of stock in a Japanese company at price of 3,150 yen per share. At that time of purchase, 1 yen equaled $0.00952.
Total cost =3150×100 yen = 315000 yen
= 315000 × 0.00952 = $2998.8
Today, the stock sells at a price of 3,465 yen per share, and in the currency market $1 equals 145 yen.
Total selling price=3465 × 100 = 346500 yen =346500/145 = $2389.7
Return = (2389.7-2998.8)×100/2998.8
= -20.31%
A small manufacturer that makes clothespins and other household products buys new injection molding equipment for a cost of $500,000. This will allow the manufacturer to make more clothespins in the same amount of time with an estimated increase in sales of 25%. If the manufacturer currently makes 75 tons of clothespins per year, which sell at $18,000 per ton, what will be the increase in revenue next year from the new equipment
Answer:
$337,500
Explanation:
Data provided in the question
Cost of an equipment = $500,000
Increased in sales = 25%
Currently number of tons made per year = 75 tons
Selling price per ton = $18,000
Based on the above information, the increased in revenue next year is
= Increased in sales × Currently number of tons made per year × Selling price per ton
= 25% × 75 tons × $18,000
= $337,500
By applying the above formula we can get the increased in revenue amount
Most employees who use flextime prefer to work independently of others. In order to accommodate this preference, businesses permit them to clock in and out as they wish, as long as they put in the necessary 40-hour work week. On some days, they may arrive at 6:00 a.m., while on other days they may decide to come in at noon.
a. True
b. False
A company purchased a commercial dishwasher by paying cash of $4,600. The dishwasher's fair value on the date of the purchase was $4,980. The company incurred $420 in transportation costs, $350 installation fees, and paid a $250 fine for illegal parking while the dishwasher was being delivered. For what amount will the company record the dishwasher?A company purchased a commercial dishwasher by paying cash of $4,600. The dishwasher's fair value on the date of the purchase was $4,980. The company incurred $420 in transportation costs, $350 installation fees, and paid a $250 fine for illegal parking while the dishwasher was being delivered. For what amount will the company record the dishwasher?
Answer:
$5750
Explanation:
All the cost that are necessary to bring the machine in ready for use condition for the company must form part of the asset as per the International Accounting Standard IAS 16 Property, Plant and Equipment guidelines.
Cash paid $4980
Transportation cost $420
Installation fees $350
Total cost $5750
The additional $250 cost that is paid as fine must not be included in the cost of the dishwasher machine as it was not necessary for the company to park the car in a inadmissible manner to make the dishwasher ready for use.
Given the following cost and activity observations for Bounty Company's utilities, use the high-low method to determine Bounty's variable utilities cost per machine hour. Round your answer to the nearest cent.
Cost Machine Hours
March $3,018 15,239
April 2,628 9,504
May 2,857 11,534
June 3,730 18,045
a. $0.86
b. $1.42
c. $0.13
d. $0.90
Answer:
Variable cost per hour= $0.13
Explanation:
Giving the following information:
March $3,018 15,239
April 2,628 9,504
May 2,857 11,534
June 3,730 18,045
To calculate the unitary variable cost under the high-low method, we need to use the following formula:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (3,730 - 2,628) / (18,045 - 9,504)
Variable cost per unit= $0.13 per hour
Upon graduating from college, you make an annual salary of $58,381. You set a goal to double it in the future. If your salary increases at an average annual rate of 7.61 percent, how long will it take to reach your goal? Round the answer to two decimal places.
Answer: 9.20
Explanation:
In finance there is a rule for calculating this called 'The Rule of 70'.
With The Rule of 70, you are able to calculate the amount of time it will take an investment to double if you divide 70 by the growth rate of the investment.
In this scenario, the investment is your salary and the growth rate is 7.61% pee year.
The amount of time it will take to double is therefore,
= 70 / 7.61
= 9.19842312746
= 9.20 years.
It will take 9.20 years to double.
Borasco Corp. owns land with a fair market value of $200,000. Borasco purchased the land 10 years ago for $65,000 and owes a liability of $50,000 as of August 2 of the current year. Alvo Corp. owns 100% of Borasco. Borasco is completely liquidated on August 2 of the current year, according to a plan adopted on June 18 of the current year. As a result, the land is transferred to Alvo in complete cancellation of Borasco's stock. What basis does Alvo have in the land it receives?
Answer:
$65,000
Explanation:
Borasco was the person who purchased the land for $65,000 in which the land was later transferred to Alvo. Therefore no gain or loss is been recognized in this liquidation because it subsidiary is been liquidated by the parent which is why the basis of land is said to be carryover basis of $65,000 at the end of the transaction.
Florin and Guilder are two countries separated by a narrow sea.
They use currencies called, respectively, the Flop and the Gulp.
Suppose the nominal exchange rate is 5 Flops per Gulp.
A Guilderian trader buys a 40 Flop barrel of Florish pickles by exchanging 8 Gulps, and a Florish trader buys a 10 Gulp crate of Guilderian apples by exchanging 50 Flops.
Then the Gulp depreciates to 2 Flops per Gulp.
a. How much must the Guilderian pay for the same 40 Flop barrel of pickles? ____(Gulps)
b. How much must the Florish trader pay for the same 10 Gulp crate of apples? ____(Flops)
Answer:
a. 20 Gulps
b. 20 Flops
Explanation:
The 40 flop barrels of pickles will still maintain its price in Florin
only the foreigner (Guilderian) will feel the impact for buying externally
with the new exchange rate of 2 Flops per Gulp, the Guilderian will pay 40/2 Gulps. This is equal to 20 Gulps
The 10 Gulp crate of apple will maintain its price in Guilder.
only the foreigner (Florish) will feel the impact for buying externally
with the new exchange rate of 2 Flops per Gulp, the Florish will pay 10 x 2 Flops. This is equal to 20 Flops
Money in whatever form when in use or circulation as a means of trade, notably circulating banknotes and coins, is referred to as currency in the most specific meaning.
A currency, in a broader sense, is a system of money in widespread use, particularly among citizens of a country.
The answers are:
a. 20 Gulps
b. 20 Flops
The pricing of 40 flop buckets of pickle will remain the same in Florin, but foreigners will pay 40/2 Gulps to adapt to the recent exchange rate of 2 flops each gulp. This is the equivalent of 20 Gulps.
The pricing of a 10 Gulp apple package will remain the same in Guilder. Only the foreigner (Floridian) will suffer the effect of the change currency rate of 2 Flops per Gulp when purchasing externally; the Floridian will pay 10 x 2 Flops. This is the same as 20 Flops.
To know more about the currency and the calculation of the currencies, refer to the link below:
https://brainly.com/question/5748035
Plastic Company purchased 100 percent of Spoon Company's voting common stock for $648,000 on January 1, 20X4. At that date, Spoon reported assets of $690,000 and liabilities of $230,000. The book values and fair values of Spoon's assets were equal except for land, which had a fair value $108,000 more than book value, and equipment, which had a fair value $80,000 more than book value. The remaining economic life of all depreciable assets at January 1,20x4, was five years. Spoon reported net income of $68,000 and paid dividends of $34,000 in 20X4
Required Compute the amount of investment income to be reported by Plastic for 20X4
Answer:
The amount of investment income is $52,000
Explanation:
Assets of $690,000
Liabilities of $230,000
Spoon's assets were equal except for land, which had a fair value $108,000 more than book value, and equipment, which had a fair value $80,000 more than book value.
Net income of $68,000
Paid dividends of $34,000
Proportionate share of reported income
Share in income from investment = 68000 × 100% = $68,000
Depreciation on equipment = (80,000 ÷ 5) = ($16,000)
Amount of investment income = $68,000 - $16,000
= $52,000
Paper Moon, a manufacturer of outdoor lighting fixtures is operating at less than full capacity. The plant manager is considering making the mounting brackets now being purchased from a supplier at $8 each. Paper Moon already has the equipment to produce the brackets. The plant manager has analyzed the cost of producing the brackets and determined that each bracket will require $2 of direct material, $1 of direct labor, and $8 of manufacturing overhead. Seventy-five percent of the manufacturing overhead is a fixed cost that would not be affected by the decision to manufacture the brackets. Should Paper Moon continue to purchase the brackets or produce them internally?
Answer:
The fixtures should be purchased because it will save the Paper Moon by $3 per unit
Explanation:
To determine whether or not the fixtures should be manufacture purchased, we will compare the variable cost of making internally to the external purchase price.
Variable cost of making = 2 + 1 + (25%× 8)= $5
Note that the fixed manufacturing cost represents a cost that would be incurred irrespective of the decision taken. Hence it is considered. Only the variable portion is relevant.
Variable cost of making $5
External purchase price $8
Saving in cost by making $3
The fixtures should be purchased because it will save the Paper Moon by $3 per unit
Restaurants in tourist's areas will close during the off-season if their: a. AFC is less than their TR. b. ATC is less than their TR. c. AVC is greater than their TR. d. AFC is greater than their TR.
Answer: c. AVC is greater than their TR.
Explanation:
At the point where Average Variable Costs are greater than Total Revenue, this means that the restaurant is unable to cover its Variable Costs. It will therefore shutdown in the short run being the off season so as to stop incurring the Variable Costs.
If they shut down for instance, they will incur only fixed costs. If they do not shut down, they will incur both fixed costs and Variable Costs which are greater than revenue and so cannot be covered thereby increasing losses.
It is therefore better to shutdown in the off-season to keep the losses to a minimum.
Eli Lilly is very excited because sales for his nursery and plant company are expected to double from $600,000 to $1,200,000 next year. Eli notes that net assets (Assets − Liabilities) will remain at 50 percent of sales. His firm will enjoy an 8 percent return on total sales. He will start the year with $120,000 in the bank and is bragging about the Jaguar and luxury townhouse he will buy.
Compute his likely cash balance or deficit for the end of the year. Start with beginning cash and subtract the asset buildup (equal to 50 percent of the sales increase) and add in profit. (Negative amount should be indicated by a minus sign.)
Answer:
ending cash balance = -$84,000
Since the profits are not enough to cover asset buildup, he will probably need to borrow money to cover them. Even though his company will be more profitable, its cash position will not be very healthy.
Explanation:
current sales $600,000
net assets = equity = $300,000
return = $600,000 x 8% = $48,000
next year's sales $1,200,000
net assets = equity = $600,000
return = $1,200,000 x 8% = $96,000
asset buildup = $600,000 - $300,000 = $300,000
ending cash balance = beginning cash balance + profit - asset buildup = $120,000 + $96,000 - $300,000 = -$84,000
Sommer, Inc., is considering a project that will result in initial aftertax cash savings of $1.89 million at the end of the first year, and these savings will grow at a rate of 2 percent per year indefinitely. The firm has a target debt-equity ratio of .80, a cost of equity of 12.9 percent, and an aftertax cost of debt of 5.7 percent. The cost-saving proposal is somewhat riskier than the usual project the firm undertakes; management uses the subjective approach and applies an adjustment factor of 1 percent to the cost of capital for such risky projects.
What is the maximum initial cost the company would be willing to pay for the project?
Answer:
The maximum initial cost is $2,17,24,138
Explanation:
Solution
From the given question, we are asked to find the maximum initial cost the company would be willing to pay for the project.
Now,
The first step to take is to calculate the weighted Average Cost of Capital (WACC)
Which is:
The weighted Average Cost of Capital (WACC) = [After-tax Cost of Debt x Weight of Debt] + [Cost of Equity x Weight of Equity]
= [5.70% x (0.80/1.80)] + [12.90% x (1/1.80)]
= 2.53% + 7.17%
= 9.70%
Secondly we calculate for the project discount rate which is stated as follows:
The Project Discount Rate = Weighted Average Cost of Capital (WACC) + Risk Adjustment Factor
= 9.70% + 1%
= 10.70%
The third step is to find the maximum initial cost the company would be willing to pay for the project
So,
as regards to the NPV Method of Capital Budgeting, the Project should be received if the NPV of the present value is seen as positive,
Hence,
The NPV = Present Value of Annual cash inflows – Present Value of Cash Outflows.
Thus,
The Maximum initial cost the company would be willing to pay for the project is the Present Value of the annual after-tax in-flows which is determined as follows
The Maximum initial cost = Initial After-tax Savings / (Ke – g)
= $18,90,000 / (0.1070 - .02)
= $18,90,000 / 0.0870
= $2,17,24,138
Answer:
$2.17 Millions
Explanation:
There are
Step-1. WACC Computation
WACC = [Post Tax Cost of Debt x Debt Weight] + [Cost of Equity x Equity Weight]
= [5.7% * (0.80/1.80)] + [12.9% * (1/1.80)]
= 2.53% + 7.17%
= 9.7%
Now here we will Add 1% for the additional risk to the WACC calculated so that it represents the Project Discount Rate.
Project Discount Rate = 9.7% + 1% = 10.7%
Step 2. Computation of maximum initial cost the company would be willing to pay for the project.
Using the Dividend Valuation Model, we can calculate the Maximum initial cost the company would be willing to pay for the project.
Maximum initial cost = Initial After-tax Savings / (Ke – g)
Here
Present Value of the annual after-tax inflows is $1.89 Million
Ke is the WACC which is 10.7%
g is growth rate which is 2% here.
So by putting the values, we have:
Maximum initial cost = $1.89 / (10.7% - 2%)
= $1.89 / 8.7%
= $2.17 Millions
