Answer:
a. 54
b. 810 dollars
c. 390 dollars
d. 75 pictures
e. 561.6 dollars and 562.5 dollars
f. 38 pictures
Explanation:
demand per week = 18 pictures
annually this demand = 18 *52 = 936
charge per unit = 60 dollars
order for 6 weeks = 6*18 = 108 quantities
cost of ordering = 45 dollars
cost of holding annually = 15 dollars
a. current average inventory
= (18*6)/2
= 54 pictures
b. current annual holding cost
(108/2)*15
= 810 dollars
c. current annual holding cost
= 936/108 * 45
= 390 dollars
d. size orders to be placed
= [tex]\sqrt{\frac{2*936*45}{15} }[/tex]
= [tex]\sqrt{5616}[/tex]
= 74.9
≈ 75 pictures have to be ordered
e. ordering holding cost per picture
936/75 * 45
= 561.6 dollars
and inventory holding cost per picture
= 75/2 * 15
=562.5 dollars
f. shop inventory per year at optimal ordering quantity
= 75/2
= 37.5
≈ 38 pictures
Durban Metal Products, Ltd., of the Republic of South Africa makes specialty metal parts used in applications ranging from the cutting edges of bulldozer blades to replacement parts for Land Rovers. The company uses an activity-based costing system for internal decision-making purposes. The company has four activity cost pools as listed below: Activity Cost Pool Activity Measure Activity Rate Order size Number of direct labor-hours $ 16.40 per direct labor-hour Customer orders Number of customer orders $ 363.00 per customer order Product testing Number of testing hours $ 71.00 per testing hour Selling Number of sales calls $ 1,488.00 per sales call The managing director of the company would like information concerning the cost of a recently completed order for heavy-duty trailer axles. The order required 180 direct labor-hours, 13 hours of product testing, and 6 sales calls.Required: Prepare a report summarizing the overhead costs assigned to the order for heavy-duty trailer axles. What is the total overhead cost assigned to the order?
Answer:
Total allocated costs= $13,266
Explanation:
To calculate the costs allocated to the order, we need to use the following formula:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Order size= 16.40*180= 2,952
Customer orders= 363*1= 363
Product testing= 71*13= 923
Selling= 1,488*6= 8,928
Total allocated costs= $13,266
On January 1, 2019, Brooks Inc. borrows $90,000 from a bank and signs a 5% installment note requiring four annual payments of $25,381. The first installment payment is made on December 31.
Required:
Write down the necessary journal entry
Answer:
Date General Journal Debit Credit
12/31 Interest Expense (90,000 x 5%) $4,500
Notes Payable (Bal. Figure) $20,881
Cash $25,381
Makers Corp. had additions to retained earnings for the year just ended of $205,000. The firm paid out $185,000 in cash dividends, and it has ending total equity of $4.90 million. The company currently has 100,000 shares of common stock outstanding.
1. What are earnings per share?2. What are dividends per share? 3. What is the book value per share? 4. If the stock currently sells for $68 per share, what is the market-to-book ratio?5. What is the price-earnings ratio?6. If the company had sales of $3.41 million, what is the price-sales ratio?
Answer:
Waka Waka Wa e e
Explanation:
Queen Shakira
Use the selected data from Pinecrest Company's financial statements to answer the following question. 2018 2017 Cash $ 22,000 $ 14,000 Accounts receivable 42,000 16,000 Merchandise inventory 22,000 83,000 Prepaid expenses 23,000 18,000 Total current assets $109,000 $131,000 Total current liabilities $ 65,000 $ 72,000 Net credit sales 221,000 326,000 Cost of goods sold 168,000 299,000 Net cash flow from operating activities 16,000 29,000 Refer to the data for Pinecrest Company. The current ratio for 2018 is
Answer:
1.68
Explanation:
Calculation to determine what The current ratio for 2018 is
Using this formula
Current ratio=Current assets/Current liabilities
Let plug in the formula
Current ratio=$109,000/$65,000
Current ratio= 1.68
Therefore The current ratio for 2018 is 1.68
A corporation had the following assets and liabilities at the beginning and end of this year.
Assets Liabilities
Beginning of the year $57,000 $24,436
End of the year 115,000 46,575
a. Owner made no investments in the business, and no dividends were paid during the year.
b. Owner made no investments in the business, but dividends were $1,250 cash per month.
c. No dividends were paid during the year, but the owner did invest an additional $55,000 cash in exchange for common stock.
d. Dividends were $1,250 cash per month, and the owner invested an additional $35,000 cash in exchange for common stock.
Determine the net income earned or net loss incurred by the business during the year for each of the above separate cases:
a. b. c. d.
Beginning of the year
Answer:
The Beginning Equity is: Ending equity is:
= Assets - liabilities = 115,000 - 46,575
= 57,000 - 24,436 = $68,425
= $32,564
a. Net income if no investments:
= Ending equity - beginning equity
= 68,425 - 32,564
= $35,861
b. No investment but dividends were $1,250 per month
= Ending equity - beginning equity + dividends
= 68,425 - 32,564 + (1,250 * 12)
= $50,861
c. Investment of $55,000:
= Ending equity - beginning equity - Equity investment
= 68,425 - 32,564 - 55,000
= -$19,139
d. Dividends of $1,250 per month and Investment of $35,000:
= Ending equity - beginning equity - Equity investment + Dividend
= 68,425 - 32,564 - 35,000 + (1,250 * 12 months)
= $15,861
There are linkages between the microeconomic decisions made by managers and the macroeconomic environment. There are numerous examples from the current recession of company layoffs at the micro level, directly influenced by the decline in economic activity at the macro level. For this assignment, research this linkage. How did the recession impact businesses/managers at the macro and micro levels? You may use one company as the basis of your research.
Answer:
One typical example of this linkage between the economy at the macroeconomic level, and business decisions at the macroeconomic and microeconomic level, is what happened with Lehman Brothers in 2008.
Explanation:
Lehman Brothers was one of the main investment banks in the United States. During the years prior to the financial crisis, Lehman Brothers decided to pursue a risky but profitable strategy of over leveraging -lending a lot more money than they had as deposits.
Once the financial crisis hit, a macroeconomic event, it affected the company at the macro and micro level. At the macro level because Lehman Brothers itself ceased to exist as it went bankrupt, and at the micro level, because it had to enter a process to pay off some debtors, and some of the employees who were laid off due to the dissolution of the firm.
What advice would you give to anyone who thinks they are going to be terminated from their employment?
Answer:
✓ Do not panic
✓ ask your employer for a honest feedback
✓Initiate a conversation in a neutral setting with your boss
✓Don't trust everything your boss says
✓Do your best work possible
✓Step up your game
✓Keep your boss and others in the loop
Why are marketers sometimes "forced” to reposition their products or services? Il
your answers with examples.
Iar
Explaination
Marketers sometimes forced to reposition their services or products to ensure profitability the company has no other option but to reposition its services or products that would cater to a new target segment of their existing market and ensure sales or profitability.
ReasonThere could be many reasons for marketers repositioning their products.
The products are evolving and getting more features into it. They needs to marketed differently in order to make the customers aware of the new features, add-ons. In this case, it is better to reposition the products.
Standard and actual costs for direct materials for the manufacture of 1,000 units of product were as follows:
Actual costs 1,550 lbs. at $9.10
Standard costs 1,600 lbs. at $9.00
Determine the (a) quantity variance, (b) price variance, and (c) total direct materials cost variance. Enter favorable variances as negative numbers.
a. Quantity variance $______
b. Price variance $______
c. Total direct materials cost variance
Answer and Explanation:
The computation is shown below;
a.
Materials quantity variance is
= (Actual quantity used × Standard price) - (Standard quantity allowed × Standard Price)]
= (1550 × 9.00) - (1600 × 9.00)
= $(450.00)
= $450 favorable
b.
Direct materials price variance is
Materials Price Variance = (Actual quantity purchased × Actual price) - (Actual quantity purchased × Standard price)
= (1550 × 9.10) - (1550 ×$9.00)
= $155
= $155 unfavorable
c.
Total direct materials cost variance is
= Materials quantity variance + Direct materials price variance
= -$450 + $155
= -$295
= $295 Favorable
Financial statement data for Delicious Dishes, Inc. are given below. All figures are in dollars. Use this data to construct an Income Statement for the year ending December 31, 2020 and use your constructed statement to answer the following question
Advertising 384,000
Beginning of year inventory 1,243,000
Depreciation 350,000
End of year inventory 1,128,000
General and administrative expenses 1,184,000
Gross sales 28,242,000
Interest expense 150,000
Lease payments 148,000
Management salaries 4,253,000
Purchases 18,243,000
Research and development 324,000
Returns and allowances 564,000
Taxes 925,000
Required:
What was gross profit from income statement for the year ending December 31, 2020?
Answer:
Delicious Dishes, Inc.The gross profit from income statement for the year ending December 31, 2020 is:
= $9,320,000.
Explanation:
a) Data and Calculations:
Advertising 384,000
Beginning of year inventory 1,243,000
Depreciation 350,000
End of year inventory 1,128,000
General and administrative expenses 1,184,000
Gross sales 28,242,000
Interest expense 150,000
Lease payments 148,000
Management salaries 4,253,000
Purchases 18,243,000
Research and development 324,000
Returns and allowances 564,000
Taxes 925,000
Depreciation 350,000
Delicious Dishes, Inc.
Income Statement for the year ending December 31, 2020
Gross sales $28,242,000
Returns and allowances (564,000)
Net sales $27,678,000
Less Cost of Goods Sold:
Beginning of year inventory 1,243,000
Purchases 18,243,000
End of year inventory (1,128,000) $18,358,000
Gross profit $9,320,000
Other Expenses:
Advertising $384,000
General and administrative expenses 1,184,000
Management salaries 4,253,000
Research and development 324,000
Interest expense 150,000
Lease payments 148,000
Total expenses $6,443,000
Profit before taxes 2,877,000
Taxes 925,000
Net income $1,952,000
Using the AS-AD and IS-LM models, show the effects of an increase in consumer confidence on the position of the AD, AS, IS, and LM curves in the short run and in the medium run. Precisely label all axes and curves to receive full credit. Label the short-run equilibrium and medium-run equilibrium with SR and MR, respectively.
Answer: hello your question has some missing information below is the missing information
Suppose the economy begins with output equal to its natural level. Then there is an increase in consumer confidence and households attempt to consume more for a given level of disposable income.
answer :
Attached below
Explanation:
IS-LM modeling curves intersects and it also defines the value of r and Y where r ( rate of interest ) Y( output level )
The AS-AD modeling is in equilibrium where aggregate demand curve and short run and long run aggregate supply curves intersects each other defining P and Y
p ( price level ) , Y ( output level )
Note : Increase in aggregate demand shifts IS outward , raises interest rate and output level
Rosalia White will invest $3,000 in an IRA for the next 30 years starting at the end of this year. The investment will earn 13 percent annually. How much will she have at the end of 30 years
Answer:
$879,597.65
Explanation:
The future value of an ordinary annuity formula is applicable in this case, since an ordinary annuity is such that payments into the accounts are expected to occur at the end of the periods rather than at the beginning of each year:
FV=yearly payment*(1+r)^n-1/r
yearly payment=$3,000
r=13%
n=number of annual payments =30
FV=$3000*(1+13%)^30-1/13%
FV=$3000*(1.13)^30-1/0.13
FV=$3000*(39.11589796-1)/0.13
FV=$3000*38.11589796/0.13
FV=$879,597.65
On December 20, 2017, Butanta Company (a U.S. company headquartered in Miami, Florida) sold parts to a foreign customer at a price of 105,000 ostras. Payment is received on January 10, 2018. Currency exchange rates for 1 ostra are as follows:December 20, 2017 $ 1.20December 31, 2017 1.17January 10, 2018 1.13a. How does the fluctuation in exchange rates affect Butanta's 2017 income statement?b. How does the fluctuation in exchange rates affect Butanta's 2018 income statement?
Answer:
The appropriate solution is:
(a) $3150
(b) $4200
Explanation:
According to the question,
(a)
The exchange loss will be:
= [tex](1.20-1.17)\times 105000[/tex]
= [tex]0.03\times 105000[/tex]
= [tex]3150[/tex] ($)
(b)
The exchange loss will be:
= [tex](1.17-1.13)\times 105000[/tex]
= [tex]0.04\times 105000[/tex]
= [tex]4200[/tex] ($)
Kubin Company’s relevant range of production is 30,000 to 35,000 units. When it produces and sells 32,500 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 9.00 Direct labor $ 6.00 Variable manufacturing overhead $ 3.50 Fixed manufacturing overhead $ 7.00 Fixed selling expense $ 5.50 Fixed administrative expense $ 4.50 Sales commissions $ 3.00 Variable administrative expense $ 2.50 Required: 1. For financial accounting purposes, what is the total amount of product costs incurred to make 32,500 units? 2. For financial accounting purposes, what is the total amount of period costs incurred to sell 32,500 units? 3. For financial accounting purposes, what is the total amount of product costs incurred to make 35,000 units? 4. For financial accounting purposes, what is the total amount of period costs incurred to sell 30,000 units? (For all requirements, do not round intermediate calculations.)
Answer:
Kubin Company
1. Total amount of product costs incurred to make 32,500 units:
= $846,250
2. The total amount of period costs incurred to sell 32,500 units:
= $290,000
3. The total amount of products costs incurred to make 35,000 units:
= $892,500
4. The total amount of period costs incurred to sell 30,000 units:
= $282,500
Explanation:
a) Data and Calculations:
Relevant production range = 30,000 to 35,000 units
Actual production and sales = 32,500 units
Average Costs per Unit:
Direct materials $ 9.00
Direct labor $ 6.00
Variable manufacturing overhead $ 3.50
Fixed manufacturing overhead $ 7.00 $25.50
Fixed selling expense $ 5.50
Fixed administrative expense $ 4.50
Sales commissions $ 3.00
Variable administrative expense $ 2.50
1. Total amount of product costs incurred to make 32,500 units:
Direct materials $ 9.00
Direct labor $ 6.00
Variable manufacturing overhead $ 3.50
Fixed manufacturing overhead $ 7.00
Total product cost per unit $25.50
Total product costs:
Variable costs = $601,250 ($18.50 * 32,500)
Fixed costs = 245,000 ($7.00 * 35,000)
Total product = $846,250
2. The total amount of period costs incurred to sell 32,500 units:
Fixed selling expense $ 5.50 * 35,000 = $192,500
Sales commissions $ 3.00 * 32,500 = 97,500
Total period costs = $290,000
3. The total amount of products costs incurred to make 35,000 units:
= $892,500 (35,000 * $25.50)
4. The total amount of period costs incurred to sell 30,000 units:
Fixed selling expense $ 5.50 * 35,000 = $192,500
Sales commissions $ 3.00 * 30,000 = 90,000
Total period costs = $282,500
The financial statements of the Bramble Corp. report net sales of $473850 and accounts receivable of $56000 and $25000 at the beginning of the year and the end of the year, respectively. What is the accounts receivable turnover for Bramble?
Answer:
the accounts receivable turnover for Bramble is 5.85 times
Explanation:
The computation of the account receivable turnover ratio is shown below
the account receivable turnover ratio is
= Net sales ÷ (Beginning account receivable + ending account receivable) ÷ 2
= $473,850 ÷ ($56,000 + $25,000)
= 5.85 times
Hence, the accounts receivable turnover for Bramble is 5.85 times
On June 30, Collins Management Company purchased land for $640,000 and a building for $960,000, paying $800,000 cash and issuing a 7% note for the balance, secured by a mortgage on the property. The terms of the note provide for 20 semiannual payments of $40,000 on the principal plus the interest accrued from the date of the preceding payment.a. Journalize the entry to record the transaction on June 30. June 30.b. Journalize the entry to record the payment of the first installment on December 31. Dec. 31.c. Journalize the entry to record the payment of the second installment the following June 30. Assume a 360-day year
Answer:
hhd
soon after the following URLS
You have just deposited $9,000 into an account that promises to pay you an annual interest rate of 6.1 percent each year for the next 7 years. You will leave the money invested in the account and 15 years from today, you need to have $25,650 in the account. What annual interest rate must you earn over the last 8 years to accomplish this goal
Answer:
Annual interest rate = 8.23%
Explanation:
The annual interest rate i must have earn over the last 8 years to accomplish this goal is:
= ((25650/(9000*(1+6.1%)^7))^(1/8))-1
= ((25650/(9000*1.513588))^(1/8)) - 1
= ((25650/13622.29)^(1/8) - 1
= 1.882943323038931^(1/8) - 1
= 1.08231743862 - 1
= 0.08231743862
= 8.231743862%
= 8.23%
Jenny Manufactures sold toys listed at $360 per unit to Jack Inc. for $306, a trade discount of 15 percent. Jack Inc. in turn sells the toys in the market at $335. Jenny should record the receivable and related sales revenue (per unit) at: Group of answer choices $360 $335 $306 $285
Answer:
$306
Explanation:
Based on the information given Jenny should record the receivable and related sales revenue (per unit) at $306 reason been that we were told JENNY MANUFACTURES SOLD TOYS THAT WAS LISTED AT THE AMOUNT OF $360 PER UNIT TO JACK INC. FOR THE AMOUNT OF $306.
Hence, Jenny will record the RECEIVABLE AND RELATED SALES REVENUE (per unit) at $306.
MC algo 8-18 Valuing Stock Asonia Co. will pay a dividend of $5.10, $9.20, $12.05, and $13.80 per share for each of the next four years, respectively. The company will then close its doors. If investors require a return of 9.4 percent on the company's stock, what is the stock price?
a. $3708
b. $32.88
c. $42.38
d. $3119
e. $35.41
Answer:
d. $31.19
Explanation:
The computation of the stock price is shown below
Stock Price is
= [$5.10 ÷ (1 + 0.094)^1 + $9.20 ÷ (1 + 0.094)^2 + $12.05 ÷ (1 + 0.094)^3 + $13.80 ÷ (1+0.094)^4]
= $4.66 + $7.69 + $9.20 + $9.63
= $31.19
hence, the option d is correct
The Widget Co. can produce widgets according to the formula: q = 5K^3/4 L^1/4 where q is the output of widgets, and K, L are the quantities of capital and labor used.
a. Are there constant, increasing or decreasing returns to scale in widget production? Explain.
b. Are there, constant, increasing or decreasing marginal products of factors? Explain
c. In the short run, the amount of capital used by company A. is fixed. Derive the short-run cost function. (Note that the short-run cost function will show C as a function of Q, K and the factor prices w and r.)
d. Derive the long-run cost function.
Answer:
A) Constant Return to Scale
B) Decreasing Marginal Products
C) Short Run Cost Function = w*(Q/5)4 *(1/K`3) + rK`
D) (2Q/5)*(r3/4)*(w1/4)
Explanation:
A) Q(tL,tK) = 5*(tK)3/4*(tL)1/4
= t*Q(L,K)
Hence it exhibits constant return to scale
B) Here MPK = dQ/dK
= (3/4)* 5*L1/4*K-1/4
So dMPK/dK = (-3/16)*5*L1/4*K-5/4
Hence dMPK/dK < 0
thus exhibits decreasing Marginal Products
(Similarly for Labor also)
C) let K is fixed at K`
So Q = 5*K`3/4*L1/4
So L = (Q/5)4*(1/K`3)
So Short Run Cost Function = w*L + r*K`
C = w*(Q/5)4 *(1/K`3) + rK`
D) in long run, MRTS = MPL / MPK = w/r
So K/L = w/r
Thus rK = wL
So from production function
Q = 5*(wL/r)3/4*L1/4
= 5*(w/r)3/4*L
L* = (Q/5)*(r/w)3/4
similarly K* = (Q/5)*(w/r)1/4
so Long Run Cost Function = wL* + rK*
= (2Q/5)*(r3/4)*(w1/4)
On January 2, 20X3, Kean Company purchased a 30 percent interest in Pod Company for $250,000. Pod reported net income of $100,000 for 20X3 and declared and paid a dividend of $10,000. Kean accounts for this investment using the equity method. In its December 31, 20X3, balance sheet, what amount should Kean report as its investment in Pod?a. $160,000.b. $223,000.c. $340,000.d. $277,000.
Answer:
.d. $277,000.
Explanation:
The computation of the amount reported as the investment is shown below:
= The value of the investment + investor share of the net income - dividend share of the net income
= $250,000 + 30% of $100,000 - 30% of $3,000
= $250,000 + $30,000 - $3,000
= $277,000
Hence, the amount reported as the investment is $277,000
"All three levels are required to run an organization or a business smoothy"Justify the statement.
Answer:
"All three levels are required to run an organization or a business " according to my point of view it is true without anyone levels (sector) business or organization not imagine to run
How does your new budget help you to meet your long-term goal of saving for college?
Answer:
make sure in the budget your savings are enough for college in the time you want
that is the expenditure must not over wegh the income...you should save as much as possible
Answer:
A budget helps create financial stability.
Explanation:
Why is budgeting crucial for college students?Budgeting assists you in achieving your academic and financial objectives.
A budget will also assist you in anticipating unforeseen costs and challenges. Budgeting necessitates difficult decision-making, but creating goals will make the process easier.
How can Budgeting helps individual?A budget aids in financial security A budget makes it simpler to pay bills on time, develop an emergency fund, and save for significant purchases like a car or home by tracking costs and sticking to a plan. A budget, in general, puts a person on a better financial footing in the short and long term.Goal of Budget-A budget is used to plan, manage, track, and improve one's financial status. In other words, a budget keeps you on track toward your long-term financial goals by allowing you to regulate your spending and consistently save and invest a percentage of your income.
Learn more about Budgeting here-
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Botosan Factory has budgeted factory overhead for the year at $717,474, and budgeted direct labor hours for the year are 364,200. If the actual direct labor hours for the month of May are 331,400, the overhead allocated for May is
Answer:
$652,858
Explanation:
Predetermined overhead rate = Budgeted Overheads ÷ Budgeted Activity
= $717,474 ÷ 364,200
= $1.97 per direct labor hour
Allocated overheads = Predetermined overhead rate x Actual Activity
= $1.97 x 331,400 direct labor hours
= $652,858
therefore,
The overhead allocated for May is $652,858.
Disney suffered lawsuits in France, at Disneyland Paris, because of the lack of fit between its transferred personnel policies and the French employees charged to enact them. This is an example of the: Group of answer choices effect of demand conditions. liability of foreignness. risks of a multidomestic strategy. effects of regionalization.
Answer:
liability of foreignness
Explanation:
Liability of foreignness is defined as the cost above what local firms incur that is realised by companies that operate in a foreign country.
This extra cost is influenced by various business environments that exist in the foreign country.
In the given scenario Disneyland Paris is suffering loss through lawsuits because of the lack of fit between its transferred personnel policies and the French employees charged to enact them.
This conflict is giving an extra cost profile which is referred to as liability of foreignness.
Companies Heidee and Leaudy have the same sales, tax rate, interest rate on their debt, total assets, and basic earning power. Both companies have positive net incomes. Company Heidee has a higher debt ratio and, therefore, a higher interest expense. Which of the following statements is CORRECT? Explain your selection with at least 200 words.
a. Company Heidee has more net income.
b. Company Heidee pays less in taxes.
c. Company Heidee has a lower equity multiplier.
d. Company Heidee has a higher ROA.
e. Company Heidee has a higher times interest earned (TIE) ratio.
Answer:
All the statements are CORRECT about Heidee Company, except statement 'e'.
Explanation:
With the higher debt ratio and higher interest expense, Heidee Company will pay less in taxes, all other things equal. Taxes are computed on the after-interest income. This lower tax expense will also translate to more net income for Heidee. Certainly, based on its higher debt ratio than Leaudy, its equity multiplier will be higher. It will also return more in assets than Leaudy based on the higher net income.
Petro Motors Inc. (PMI) produces small gasoline-powered motors for use in lawn mowers. The company has been growing steadily over the past five years and is operating at full capacity. PMI recently completed the addition of new plant and equipment at a cost of $7.800.000, thereby increasing its manufacturing capacity to 100.000 motors annually. The addition to plant and equipment will be depreciated on a straight-line basis over 10 years. Sales of motors were 60.000 units prior to the completion of the additional capacity. Cost records indicated that manufacturing costs had totaled $60 per motor, of which $48 per motor was considered to be variable manufacturing costs. PMI has used the volume of activity at full capacity as the basis for applying fixed manufacturing overhead. The normal selling price is $80 per motor, and PMI pays a 5% commission on the sale of its motors. LawnPro.com offered to purchase 35,000 motors at a price of $60 per unit to test the viability of distributing lawn mower replacement motors through its website. PMI would be expected to produce the motors, store them in its warehouse, and ship individual motors to LawnPro.com customers. As orders are placed directly through the LawnPro.com website, they would be forwarded instantly to PMI. No commissions will be paid on this special sales order, and freight charges will be paid by the customer purchasing a motor.
Required:
a. Calculate the cost per motor, for cost accounting purposes, after completion of the additional plant capacity.
b. Identify all the relevant costs that PMI should consider in evaluating the special sales order from LawnPro.
Answer:
Petro Motors, Inc. (PMI)
1. The cost per motor, for cost accounting purposes, after completion of the additional plant capacity is:
= $63
2. All the relevant costs that PMI should consider in evaluating the special sales order from LawnPro include:
Variable manufacturing costs
Storage costs (which is variable)
Administration costs (which is also variable)
Explanation:
a) Data and Calculations:
Cost of additional plant and equipment = $7,800,000
New annual production capacity = 100,000
Depreciation period on a straight-line basis = 10 years
Additional annual fixed cost = $780,000 ($7,800,000/10)
Old Capacity New Capacity
Production capacity 60,000 100,000
Selling price per motor $80 $
Sales commission (5%) (4)
Net selling price per motor $76
Variable cost per unit $48 $48
Total variable cost $2,880,000 $4,800,000
Annual fixed costs 720,000 720,000
Depreciation on the new plant 780,000
Total cost $3,600,000 $6,300,000
Production capacity 60,000 100,000
Cost per unit $60 $63
XYZ Tile Installation Corporation measures its activity in terms of square feet of tile installed. Last month, the budgeted level of activity was 1,180 square feet and the actual level of activity was 1,270 square feet. The company's owner budgets for supply costs, a variable cost, at $3.50 per square foot. The actual supply cost last month was $4,980. What would have been the spending variance for supply costs
Answer:
The appropriate solution is "$535 U". A further explanation is described below.
Explanation:
The given values are:
Actual level of activity,
= 1270
Budgeted variable cost,
= $3.50
Actual supply cost,
= $4980
Now,
The spending variance for supply costs will be:
= [tex](Actual \ level \ of \ activity\times Budgeted \ variable \ cost)\times Actual \ supply \ cost[/tex]
= [tex](1270\times 3.50)-4980[/tex]
= [tex]4445-4980[/tex]
= [tex]535[/tex] (unfavorable)
If a court determines that a manager's corporate decision amounted to self-dealing, a. the manager is automatically personally liable to the corporation. b. the transaction being challenged will be automatically voided. c. the manager will automatically be fired. d. the business judgment rule will not apply.
Answer:
d. the business judgment rule will not apply.
Explanation:
A corporation can be defined as a corporate organization that has facilities and owns or controls assets used for the production of goods and services in at least one country other than its headquarter (home office) located in its home country.
One of the advantage of a corporation is that, owners have limited liability for debt to the extent to which they have invested and as such are not personally liable for some of debt owed by corporation.
A manager can be defined as an individual who is saddled with the responsibility of providing guidance, support, supervision, administrative control, as well as acting as a role model or example to the employees working in an organization by being morally upright.
Generally, managers are typically involved in taking up leadership roles and as such are expected to be build a strong relationship between their employees or subordinates by creating a fair ground for effective communication and sharing of resources and information. Also, they are required to engage their staff members (entire workforce) in the most efficient and effective manner.
In Business management, if a court of competent jurisdiction determines that a manager's corporate decision amounted to self-dealing i.e putting his or her own interests first, the business judgment rule will not apply.
Generally, in order for the business judgement rule to apply, it is expected or required that a manager should act in the best interest of a corporation.
A company is evaluating a new 4-year project. The equipment necessary for the project will cost $3,500,000 and can be sold for $715,000 at the end of the project. The asset is in the 5-year MACRS class. The depreciation percentage each year is 20.00 percent, 32.00 percent, 19.20 percent, 11.52 percent, and 11.52 percent, respectively. The company's tax rate is 34 percent. What is the aftertax salvage value of the equipment?
Hint: 1. Find the remaining book value at the end. 2. Subtract this from the expected sale price to find the gain on sale. 3. Apply the tax rate to this gain to find the taxes owed. 4. The after-tax salvage value is the sale price minus the taxes.
a) $715,000.
b) $752,468.
c) $540,444.
d) $677,532.
e) $471,900.
Answer:
d) $677,532.
Explanation:
1.
Written down value of the equipment after 4 years = Cost x ( 100% - 1st year MACRS - Second-year MACRS - Third-year MACRS - Fourth-year MACRS ) = $3,500,000 x ( 100% - 20% - 32% - 19.20% - 11.52% ) = $604,800
2.
Now calculate the gain on the sale of equipment
Gain on the sale of equipment = Sale Price - Written down Value after 4 years = $715,000 - $604,800 = $110,200
3.
Tax owed = Gain on the sale x Tax rate = $110,200 x 34% = $37,468
After-tax salvage value = Sales price - Tax = $715,000 - $37,468 = $677,532