Answer:
Saddle Inc.
1. Overhead rate using the traditional (plantwide) approach is:
= $1.84
2. The overhead rates using activity-based costing approach are:
Machining = $72.49
Machine setup = $211.69
3. The difference in allocation between the two approaches:
Differences:
ABC approach $121,808 $178,188 $299,996
Using plantwide $110,400 $189,520 $299,920
Differences $11,408 -$11,332 $76
Explanation:
a) Data and Calculations:
Total estimated overhead costs = $300,000
Machining activity = $195,000
Machine setup activity = $105,000
Standard Custom Total
Direct labor costs $60,000 $103,000 $163,000
Machine hours 1,400 1,290 2,690
Setup hours 96 400 496
Overhead rate based on direct labor costs = $1.84 ($300,000/163,000)
Overhead rates using activity-based costing approach:
Machining = $72.49 ($195,000/2,690)
Machine setup = $211.69 ($105,000/496)
Allocation of overhead costs:
Standard Custom Total
Using plantwide $110,400 $189,520 $299,920
Using ABC:
Machining $101,486 $93,512 $194,998
Machine setup 20,322 84,676 104,998
Total costs $121,808 $178,188 $299,996
Differences:
ABC approach $121,808 $178,188 $299,996
Using plantwide $110,400 $189,520 $299,920
Differences $11,408 -$11,332 $76
An owner can lease her building for $160,000 per year for three years. The explicit cost of maintaining the building is $55,000, and the implicit cost is $70,000. All revenues are received, and costs borne, at the end of each year. If the interest rate is 5 percent, determine the present value of the stream of:_______.
a. Accounting profits.
b. Economic profits.
Answer:
a. Accounting profits.
Account profit = Revenue - explicit cost
= 160,000 - 55,000
= $105,000
Present value of $105,000 per year for 3 years is:
= 105,000 * Present value interest factor of an Annuity, 3 years, 5%
= 105,000 * 2.7232
= $285,936
b. Economic profit
Economic profit = Revenue - explicit cost - implicit cost
= 160,000 - 55,000 - 70,000
= $35,000
Present value of $35,000 per year for 3 years:
= 35,000 * Present value interest factor of an Annuity, 3 years, 5%
= 35,000 * 2.7232
= $95,312
Note: The profits were treated as annuities as they were constant.
On Friday of each week, Prawn Company pays its factory personnel weekly wages amounting to $55,000 for a five-day work week.
Required:
a. Prepare the necessary adjusting entry at year end, assuming December 31 falls on Wednesday.
b. Prepare the journal entry for payment of the week’s wages on the payday which is Friday, January 2 of the next year.
Answer and Explanation:
The journal entry is shown below:
a.
Wages Expense $33,000 ($55,000 ÷ 5 days ×3days)
To Wages Payable $33,000
(being wages expense is recorded)
Here wages expense is debited as it increased the assets and credited the wages payable as it also increased the liabilities
b. Wages Expenses $22000
Wages Payable $33000
To Bank $55,000
(Being payment is recorded)
Here wages expense is debited as it increased the assets, the wages payable is also debited as it decreased the liabilities and credited the bank as it decreased the assets
Based on a predicted level of production and sales of 20,000 units, a company anticipates total variable costs of $96,000, fixed costs of $24,000, and operating income of $163,200. Based on this information, the budgeted amount of contribution margin for 17,000 units would be:
The budgeted value of the contribution margin for 17,000 units should be $159,120.
But before determining the contribution margin value first determine the following amounts:
Current contribution margin = Fixed costs + Target operating income
= $24,000 + $163,200
= $187,200
Now contribution margin per unit is
= $187,200 ÷ 20,000 units
= $9.36 per unit
And, finally the contribution margin value should be
= 17,000 units × $9.36 per unit
= $159,120
Therefore, we can conclude that The budgeted value of the contribution margin for 17,000 units should be $159,120.
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The debits to Work in ProcessâAssembly Department for April, together with data concerning production, are as follows: April 1, work in process: Materials cost, 3,000 units $ 7,441 Conversion costs, 3,000 units, 40% completed 5,477 Materials added during April, 10,000 units 27,805 Conversion costs during April 32,363 Goods finished during April, 12,000 units 0 April 30 work in process, 1,000 units, 40% completed 0 All direct materials are added at the beginning of the process, and the first-in, first-out method is used to cost inventories. The conversion cost per equivalent unit for April is
a.$2.81
b.$2.49
c.$2.89
d.$3.24
Answer: c. $2.89 per unit
Explanation:
Using the First-In, First-Out method, we need to find the equivalent units first:
= Equivalent opening units + Units started and completed + Equivalent ending units
= (Opening units left to be completed) + (Units completed - opening units) + (proportion of closing units completed with respect to conversion)
= (3,000 * (1 - 40%)) + (12,000 - 3,000) + (1,000 * 40%)
= 11,200 units
Conversion costs = 32,363
Conversion cost per units:
= 32,363 / 11,200 units
= $2.89 per unit
what is the purpose of the Statement of Understanding
Answer:
It ensures that when consumers sign the Medicare Advantage and/or Part D Enrollment Application, they are acknowledging their understanding that they are actually enrolling, in which plan they are enrolling, and standard disclosures.
Explanation:
The following data relate to direct labor costs for August: actual costs for 5,500 hours at $24.00 per hour and standard costs for 5,000 hours at $23.70 per hour. The direct labor rate variance is a.$1,500 unfavorable b.$1,500 favorable c.$1,650 unfavorable d.$1,650 favorable
Answer: c. $1,650 unfavorable
Explanation:
The direct labor rate variance shows the difference between the cost of direct labor that the company thought it would incur vs what it actually incurs for the period.
Formula is:
Direct labor rate variance = Actual cost of direct labor - Standard cost of actual hours of direct labor
= Actual hours * (Actual cost - Standard cost)
= 5,500 * (24 - 23.70)
= $1,650 unfavorable
Unfavorable because the actual cost incurred was more than the cost anticipated.
If a company provides an online service that delivers physical products and services but does not exist as a brick-and-mortar store, it is considered which type of brand
Answer: a. an e-brand brand
Explanation:
An e-brand is one that provides just an online service for merchandise sales. These companies do not have physical locations but rather show you all that they sell on their websites and then when you purchase something, they deliver it as a physical good. The most popular example of such is Amazon.
The advantage of such brands is that they get to save on the rental and other property costs related to establishing brick-and-mortar stores because they are online.
A firm with earnings before interest and taxes of $500,000 needs $1 million of additional funds. If it issues debt, the bonds will mature after 20 years and pay interest of 8 percent. The firm could issue preferred stock with a dividend rate of 8 percent. The firm has 100,000 shares of common stock outstanding and is in the 30 percent income tax bracket. What are the (1) earnings per common share under the two alternatives, (2) the times-interest-earned if the firm uses debt financing, and (3) the times-dividend-earned if the firm uses preferred stock financing
Answer:
Calculation of Earning Per Share
Particulars Debt Alternative($) Preferred Stock($)
Amount Required 1,000,000 1,000,000
Earning before Interest and Tax 500,000 500,000
Less: Interest Cost(8%) 80,000 ----
Earning After Interest 420,000 500,000
Tax(30%) 126,000 150,000
Earning After Tax 294,000 350,000
Less: Dividend to Pref. Shares 80,000
Earning Avai. for C. Stockholders 294,000 270,000
Outstanding shares 100,000 100,000
Earning Per Common Share 2.94 2.70
2. Times Interest Earned Ratio = EBIT / Interest
Times Interest Earned Ratio = 500,000 / 80,000
Times Interest Earned Ratio = 6.25 Times
3. Times Dividend Earned Ratio = Net Income / Preferred Dividend
Times Dividend Earned Ratio = 350,000 / 80,000
Times Dividend Earned Ratio = 4.375 Times
Futures contracts differ from forward contracts in that a. futures contracts are between the individual hedger and speculator. b. futures contracts are personalized, unique contracts; forwards are standardized. c. futures contracts are marked to market daily with changes in value added to or subtracted from the accounts of the buyer and the seller. d. forward contracts always require a margin deposit.
Answer:
c. futures contracts are marked to market daily with changes in value added to or subtracted from the accounts of the buyer and the seller.
Explanation:
The future cost should be different from the forward contract in the case when the future contract are considered to be marked on the daily market along the value change that are added or deducted from the buyer and seller accounts
So as per the given situation, the option c is correct
For a business to be considered a corporation: Multiple Choice it must issue both common and preferred stock. its stock must be sold in very large amounts. it must be organized as a separate legal entity. it must pay dividends.
Answer:
it must be organized as a separate legal entity.
Explanation:
A corporation is a business that is owned by shareholders. The corporation is a separate legal entity and so it can sue and be sued, pay taxes and own assets.
Advantages of a corporation include :
1. they have unlimited liabilities
2. they have unlimited life. the business doesn't end even after the death of the owners unlike a sole proprietorship
3. they have more access to capital
Disadvantages of a corporation include :
high cost of setting up Earnings to shareholders are taxed twiceA corporation can only issue one type of share
A corporation is under no obligation to pay dividends
Stocks of a corporation can either be sold in large or small amounts
Department M had 2,000 units 56% completed in process at the beginning of June, 13,500 units completed during June, and 1,000 units 28% completed at the end of June. What was the number of equivalent units of production for conversion costs for June if the first-in, first-out method is used to cost inventories? a.14,780 units b.13,780 units c.12,660 units d.11,500 units
Answer:
c.12,660 units
Explanation:
Calculation to determine What was the number of equivalent units of production for conversion costs for June if the first-in, first-out method is used to cost inventories
Using this formula
EUP (FIFO) = Completed Units + Ending units - Beginning units
Let plug in the formula
EUP (FIFO)=13,500 +( 1,000 x 28%)- (2,000 x 56%)
EUP (FIFO)= 13,500+280-$1120
EUP (FIFO)=12,660 units
Therefore the number of equivalent units of production for conversion costs for June if the first-in, first-out method is used to cost inventories is 12,660 units
Model of media richness
Answer:
Media richness theory states that all communication media vary in their ability to enable users to communicate and to change understanding. ... A primary driver in selecting a communication medium for a particular message is to reduce the equivocality, or possible misinterpretations, of a message.
Answer:
The term "media wealth" was described in 1986 by Richard Daft and Robert Lengel for the first time in the context of the media wealth theory. Media wealth describes the learning density that can be transmitted by a specific communication medium.
Explanation:
Before the growth of electronic communication media, MRT was developed to help managers decide which medium was best suited to communicate a message in business situations.
Rich media, such as conversations and phone calls, were best considered to be not-routine messages, while lean media were considered acceptable to routine messages like unaddressed memoranda.
The media wealth has been extended in the past two decades to cover the strengths and weaknesses of new media – from email to websites, video lectures, voice men, and immediate messages.
In media-rich contexts, humans evolved. Facial communication was the only way to communicate for hundreds of thousands of years living in stable, close-knit social groups. The concept of media choice did not exist until about 5,000 years ago, because it was not one-to-one or nothing apart from smoke signals.
Leigh sued an overzealous bill collector and received the following settlement:
Damage to her automobile that the collector attempted to repossess: $3,300
Physical damage to her arm caused by the collector: $15,000
Loss of income while her arm was healing: $6,000
Punitive damages 80,000
a. What effect does the settlement have on Leigh's Gross income?
b. Assume that Leigh also collected $25,000 of damages for slander to her personal reputation caused by the bill collector misrepresenting the facts to Leigh's employer and other creditors. Is this $25,000 included in Leigh's gross inome? Explain.
Answer and Explanation:
a.
The punitive damages of $80,000 should be involved in the gross income of leigh. The amounts like $15,000 and $6,000 should not be included as this is a physical personal injury except the $3,300 that for the damaged as this amount is untaxable also here the capital is recovered because it decreased the basis by $3,300
b. The $25,000 should be included in the gross income of leigh as it does not occur from the physical personal injury
Suppose a farmer wants to borrow $176,590.00 to buy a tract of land. The BCS bank will make a 22-year loan fully amortized at 6.19% (annual payments). A $443.00 loan fee and stock purchase is required. The borrower stock requirement is the lesser of $1,000 or 3.00% of loan amount.
(i) Calculate the loan principal.
a. $181,521.05 b. $178,089.12
c. $182,508.25 d. $178,033.00
Enter Response Here:
(ii) Calculate the required stock purchase.
a. $5,340.99 b. $1,000.00
c. $5,274.64 d. $1,760.24
Enter Response Here:
(iii) Calculate the annual loan payments.
a. $15,032.59 b. $15,037.33
c. $15,410.47 d. $15,327.12
Answer:
A Farmer
i) Loan principal = $178,033 ($176,590 + $443 + $1,000)
ii) Required stock purchase = $1,000
iii) Annual loan payment (fully amortized at 6.19%) is:
= a. $15,032.59
Explanation:
a) Data and Calculations:
Required loan amount = $176,590.00
Period of loan = 22 years
Interest rate = 6.19%
Loan fee = $443.00
Stock purchase = lesser of $1,000 or 3.00% of loan amount
= lesser of $1,000 or $5,297.70 ($176,590 * 3%)
i) Loan principal = $178,033 ($176,590 + $443 + $1,000)
ii) Required stock purchase = $1,000
iii) Annual loan payment (fully amortized at 6.19%) = $15,030 approximately :
(# of periods) 22
I/Y (Interest per year) 6.19
PV (Present Value) 178033
FV (Future Value) 0
PMT = $15,030.02
Sum of all periodic payments $330,660.34
Total Interest $152,627.34
Rolando, a senior employee, has been asked to monitor the activities of some new employees and report to her if he finds them engaged in activities that are not work related. He finds them spending far too much time on social networking sites. However, instead of reporting this, he advises the new employees to refrain from using those sites in the future. Moreover, he tells Alexa that they were doing their work effectively. In this scenario, Rolando has engaged in
Answer:
Explanation:
From the question we are informed about Rolando, who is a senior employee, has been asked to monitor the activities of some new employees and report to her if he finds them engaged in activities that are not work related. He finds them spending far too much time on social networking sites. However, instead of reporting this, he advises the new employees to refrain from using those sites in the future. Moreover, he tells Alexa that they were doing their work effectively. In this scenario, Rolando has engaged in Filtering.
Filtering can be regarded as distortion as well as withholding of information so that reactions of a person or entity can be managed. It can be explained as process whereby some information is been hide to higher rank workers by
employee, whereby this is done so that
employees that committed a fault is not affected. Filtering serves as an act that middle-range workers can take to give
enough confidence to their surbodinates so that they can correct themselves which is alternative of punishing them.
CONCILIACIONES BANCARIAS
Answer:
ehejejeuywnfwwjwjwhwjegegjshshstehshstejeheteyejuw7yo was a member in its first two seasons of its own and the first team in its history to win the world series 65in 2of 2in 3733333inches the world cup is in its second season as a team that
Begin with a single sum of money at period 0. First, calculate a future value of that sum at 12.01%. Then discount that future value back to period 0 at 11.99%. In relation to the initial single sum, the discounted future value:_________
a. Is greater than the original amount
b. Is less than the original amount
c. Is the same as the original amount
d. Cannot be determined with the information given
Answer:
A
Explanation:
Let single sum = 100
The formula for calculating future value:
FV = P (1 + r)^nm
FV = Future value
P = Present value
R = interest rate
m = number of compounding
N = number of years
Future value in year 1 = 100 x 1.1201 = 112.01
Present value = future value / (1 + r)
112.01 / 1.1199 = 100.02
The discounted future value, 100.02 , is greater than, 100, the value at the initial stage by 0.02
Jack is a married male, while John is single. Your company has an assignment in a branch in Mexico that would last a couple of years. Management feels that John would be better for this assignment because he is single and is free to move. Is this decision fair?
No, It is an unfair decision by an employer to discriminate based on an applicant's marital status or perceived marital status. Although in contradict to this situation there is evidence that employers prefer and promote men who are married with children, especially compared to their childless male peers and to mothers as married men are often seen as more responsible and dedicated workers.
What is a marital status?Civil status, or marital status, are the distinct options that describe a person's relationship with a significant other. Married, single, divorced, and widowed are examples of civil status. Whether or not marital status discrimination is illegal depends on the laws of your state. Federal law doesn't prohibit discrimination on the basis of an employee's or applicant's marital status. However, almost half of the states and the District of Columbia have outlawed this type of discrimination Employers in California are prohibited from asking certain types of questions during a job interview. This includes questions about an applicant's race, religion, or marital status.
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Saskatchewan Forestry Company purchased a timber tract for $600,000 and estimates that it will be depleted evenly over its 10-year useful life with no residual value. Prepare the journal entry that would be recorded if 10 percent of the total timber is cut and placed into inventory during the current year.
Answer and Explanation:
The journal entry is given below:
Inventory (10% of $600,000) $60,000
To Accumulated Depletion $60,000
(Being the 10% of the total timber cutted be recorded)
Here the inventory is debited as it increased the assets and credited the accumulated depletion as it decreased the assets
According to a summary of the payroll of Mountain Streaming Co., $110,000 was subject to the 6.0% social security tax and the 1.5% Medicare tax. Also, $25,000 was subject to state and federal unemployment taxes.
Required:
Calculate the employer's payroll taxes.
a. Calculate the employer's payroll taxes, using the following rates: state unemployment, 5.4%; federal unemployment, 0.8%.
Answer:
$9800
Explanation:
This question requires us to calculate the employer's payroll taxes
His social security tax = $110000*6.0%
= 110000x0.06
=$6600
His Medicare tax = $110000*1.5%
= 110000*0.015
= $1650
His state and federal unemployment tax = 25000 dollars
State = 25000x5.4%
= $1350
Federal = 25000x0.8%
= $200
Total employers payroll tax
$(6600+1650+1350+200)
= $9800
Long-term disability insurance _____. a. pays for temporary living expenses and moving expenses incurred by disabled employees b. pays a flat fee for a fixed number of hours of legal assistance each month for disabled employees c. provides continuing income protection for employees who become disabled and are unable to work
Answer: c. provides continuing income protection for employees who become disabled and are unable to work
Explanation:
Disability insurance is very helpful to people who get injured on the job and so are unable to work. The insurance would provide them with an income for a time so that they do not become destitute.
There are different types of disability insurance with varying lengths and long-term disability insurance is one of them. This one provides income protection for a longer time period and is very useful when the injury in question is quite serious or permanently disables the affected person.
Tin Roof's net cash flows for the next three years are projected at $72,000, $78,000, and $84,000, respectively. After that, the cash flows are expected to increase by 3.2 percent annually. What is the value of the firm if the WACC is 9.32%
Answer:
$1,279,622.65
Explanation:
The value of the company is the present value of its future cash flows for the three-year planning horizon plus the present value of its continuing value beyond year 3, all discounted using the WACC as the appropriate discount rate.
continuing value=year 3 cash flow*(1+terminal growth rate)/(WACC-terminal growth rate)
continuing value= $84,000*(1+3.2%)/(9.32%-3.2%)=$1,416,470.59
present value of continuing value=$1,416,470.59/(1+9.32%)^3=$1,084,198.23
present value of 3-year cash flows=$72000/(1+9.32%)^1+$78,000/(1+9.32%)^2+$84,000/(1+9.32%)^3
present value of 3-year cash flows=$195,424.42
value of the company=$1,084,198.23+$195,424.42
value of the company=$1,279,622.65
Articles of the code of ethics are broad statements of ethical principles and the standards of practice support, interpret and amplify the respective articles
Answer: True
Explanation:
The Code of Ethics is the detailed document where the professional responsibilities of every professional is written. It should be noted that the Code of Ethics is made up of seventeen Articles and their related Standards of Practice.
The Articles of the code of ethics are broad statements of ethical principles while the standards of practice support, interpret and amplify the respective articles. Therefore, the Statement is true.
The statement given in the query holds true and the code of ethics are a set code of instructions that are to be followed by the business professionals in the manner as prescribed.
The code of ethics are a set manner of instructions that are like a law book to be followed by the different kinds of businessmen and professionals of their field.
Code of ethics are given by the respective authoritative institutes of which such businessmen or professionals are the members. it implies the way in which the practice can be done.Code of ethics contain respective articles for communication, outfit and attire, verbal and written communication and all such other fields which contribute to the maintained decency in the professional conduct.They are generally different for professionals of different streams. Like they are different for superiors and subordinates of the same organization as well given their subjective roles.Hence, the statement given about the code of ethics above holds true that they must be followed and acted accordingly and implied at each stage of practice.
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Musashi and Rina run a catering business in which they have two major tasks: getting new clients and preparing food for events and parties. It takes Musashi 10 hours to prepare the food for an event and 5 hours of effort to get each new client. For Rina, it takes 12 hours to prepare food for an event and 3 hours to get a new client. In this scenario,____has an absolute advantage in food preparation,and____has a comparative advantage in food preparation.
Answer:
Musashi
Musashi
Explanation:
A person has comparative advantage in production if it produces at a lower opportunity cost when compared to other people.
opportunity cost of preparing food
Musashi = 5 / 10 = 0.20
Rina = 3 / 12 = 0.25
Musashi has a lower opportunity cost in food preparation. She has a comparative advantage in food preparation
A person has absolute advantage in the production of a good or service if it produces more quantity of a good when compared to other people
Musashi prepares food in 10 hours while Rina does in 12 hours
Musashi prepares food faster, thus, she has an absolute advantage in good preparation
A company's marketing focus changes in which of the following ways when it uses a consumer-focused marketing mix? A business tries to improve relationships with suppliers. A business tries to anticipate supply changes. A business tries to differentiate its products. A business tries to think like its customers.
Answer: A business tries to think like its customers
Explanation:
The consumer focused marketing simply tries to understand the thoughts and the habit of a consumer in their buying habits.
When a company uses a consumer-focused marketing mix, the company's marketing focus changes as the business tries to think like its customers.
This is vital in order to improve sales and improve the revenue of the company.
Ultimo Co. operates three production departments as profit centers. The following information is available for its most recent year. Which department has the greatest departmental contribution to overhead (in dollars) and what is the amount contributed
Answer: Department 3 had the greatest contribution to overhead of $362,000
Explanation:
Contribution to overhead = Sales - Cost of Goods sold - Direct expense
Department 1:
= 1,140,000 - 714,000 - 114,000
= $312,000
Department 2:
= 540,000 - 164,000 - 54,000
= $322,000
Department 3:
= 840,000 - 314,000 - 164,000
= $362,000
Any point on the budget constraint Multiple Choice Gives the consumer the highest level of utility. Represent a combination of two goods that are affordable. Represents combinations of two goods that yield the same utility. Reflects the price of one good divided by the price of another good.
Answer: Represent a combination of two goods that are affordable
Explanation:
The budget constraint simply represents all the combinations of goods and services which a particular consumer can buy given the current prices of the goods within their given income.
The concepts of budget constraint is used in examining the parameters of the choices of the consumers. It should be noted that any point on the budget constraint simply represents a combination of two goods that are affordable.
Again, Inc. bonds have a par value of $1,000, a 25 year maturity, and an annual coupon rate of 16.0% with annual coupon payments. The bonds are currently selling for $873. The bonds may be called in 4 years for 116.0% of par. What quoted annual rate of return do you expect to earn if you buy the bonds and company calls them when possible
Answer: 24.10%
Explanation:
The quoted annual rate of return that will be expected to be earned if one buys the bonds and company calls them when possible will be calculated thus:
Call price = 1160
Coupon rate = 16%
Number of compounding period per year = 1
Interest per period = 1000 × 16% = 160
Bond price = 873
Number of years to sell = 4
NPER = 4
Quoted annual rate of return will be:
= Rate(NPER, PMT, -PV, FV)
= Rate(4160, -873, 1160)
= 24.10%
Fina Corp. had the following transactions during the quarter ended March 31, 2018: Payment of fire insurance premium for calendar year 2018 800,000 What amount should be included in Fina's income statement for the quarter ended March 31, 2018?
Answer:
$200,000
Explanation:
When a company prepays for a service, the amount prepaid is recognized as an asset until the service is enjoyed (usually with the passing of time).
This is recorded as follows
Dr Prepaid expense
Cr Cash account
Being entries to recognize amount prepaid.
As the service is enjoyed,
Dr Expense
Cr Prepaid expense
Being entries to recognize expense incurred.
Since 800,00 was the amount prepaid for the calendar year 2018, by 31 March 2018, the amount used up (to be recognized as expense in the income statement) will be
3/12 * $800,000
= $200,000
A differentiation strategy allows a company to charge a(n) __________ price for its product, if it chooses to do so. a. premium b. exorbitant c. low d. average e. escalating
Answer:
A
Explanation:
A differentiation strategy entails making ones product different from that of other firms in the industry. This would enable the firm that has a differentiated product sell at a premium. The aim of this strategy is to have a competitive advantage
Advantages of a differentiation strategy
products are unique. This reduces the competition the product faces with other products in the industry it increases brand loyalty