Answer:
$102
Explanation:
FUTA tax due from Willow Corporation for 2019, after the credit for state unemployment taxes, can be calculated by deducting the Paid state unemployment tax by the FUTA tax.
DATA
Paid State Unemployment Tax = (7,000+7,000+3,000) x 5.4%
Paid State Unemployment Tax = $918
FUTA tax rate in 2019 = 6%
Solution
FUTA tax (6% x $17,000) = $1,020
FUTA tax due = $1,020 - $918
FUTA tax due = $102
Richards Corporation uses the FIFO method of process costing. The following information is available for October in its Fabricating Department: Units: Beginning Inventory: 80,000 units, 60% complete as to materials and 20% complete as to conversion. Units started and completed: 250,000. Units completed and transferred out: 330,000. Ending Inventory: 30,000 units, 40% complete as to materials and 10% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: $37,200. Costs in beginning Work in Process - Conversion: $79,700. Costs incurred in October - Direct Materials: $646,800. Costs incurred in October - Conversion: $919,300. Calculate the cost per equivalent unit of conversion.
Answer:
$2.90 per equivalent unit of conversion
Explanation:
equivalent units of conversion (under FIFO) = [units in beginning inventory x ( 1 - previous conversion rate)] + units started and completed + (units in ending inventory x conversion rate) = [80,000 x (1 - 20%)] + 250,000 + (30,000 x 10%) = 64,000 + 250,000 + 3,000 = 317,000 units
cost per equivalent unit of conversion = total conversion costs / total equivalent units of conversion = $919,300 / 317,000 units = $2.90 per equivalent unit
Assume Mrs. Kinsley has filed a suit against Kitchen Essential Products Inc. for the injuries that she sustained under the theory of strict product liability. Can Mrs. Kinsley prevail in a cause of action against Kitchen Essential Products Inc. under strict product liability.
Answer:
"strict liability" says that a defendant seller, distributor or manufacturer of a defective product can be liable to anyone injured by that product, regardless of whether the defendant did everything possible to make sure the defect never happened.
In the case of Mrs Kinsley against Kitchen Essential Products inc. for the injury she sustained, she will be able to prevail in a cause action against the company under strict product liability. Because, the accident happened as a result of the faulty product which she purchased from the Kitchen Essential Product Inc company.
Explanation:
Builder and Owner agree that Builder will erect a fence for Owner for $1,500. Builder claims that the fence is taking longer than Builder expected, so Owner must pay Builder $500 more or Builder will not complete the fence. Owner, needing the fence completed, agrees to the additional $500. Builder completes the fence. Owner owes Builder: ________.
A. $1,500.
B. $2,000.
C. $1,000.
D. $1,750.
Answer:
Owner owes Builder : B. $2,000.
Explanation:
A Liability is the present obligation of the entity, that arises as a result of past events, the settlement of which is expected to result in a cash outflow from the entity.
Initially, the Owners owes the Builder $,1500
For the fence to be completed on time, an addition of $500 was owed, upon the owner accepting this arrangement.
Thus, the total obligation owing to the Builder is $2,000.
Answer:
2000
Explanation:
Because 1500+500=2000
The Drogon Co. just issued a dividend of $3.05 per share on its common stock. The company is expected to maintain a constant 6.3 percent growth rate in its dividends indefinitely. If the stock sells for $61 a share, what is the company’s cost of equity? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer:
11.62%
Explanation:
Drogo corporation issued a dividend of $3.05 per share
The growth rate is 6.3%
= 6.3/100
= 0.063
The stock is sold at a price of $61 per share
The first step is to calculate the estimated dividend for the next year
= $3.05×(1+0.063)
= $3.05×(1.063)
= $3.24215
Therefore, the company's cost of equity can be calculated as follows
Po= Div1/r-g
61= 3.24215/r-0.063
r-0.063= 3.24215/61
r-0.063= 0.05315
r= 0.05315+0.063
r= 0.1162×100
r= 11.62%
Hence the company's cost of equity is 11.62%
The HIJ bond has a current price of $800, a maturity value of $1,000, and matures in 5 years. If interest is paid semi-annually and the bond is priced to yield 8%, what is the bond's annual coupon rate
Answer:
Explanation:
The coupon rate is defined as the interest rate paid on a bond by its issuer for the term of the security.
Hence,
Par Value = $800
Face Value = $1,000
N = 5 x 2 = 10
Since the interest is semi annual
i = 8% / 2 = 4%
CF = $15.34
Coupon = $30.68 per year or 3.068%
1. Determine the total incremental cost of making 51,000 units of RX5. 2. Determine the total incremental cost of buying 51,000 units of RX5. 3. Should the company make or buy RX5
Answer with Explanation:
Requirement 1:
Incremental cost of making RX5:
Always remember that the direct costs are always incremental cost because these are the variable cost and will not be incurred if the decision is not taken related to making of the product RX5.
Incremental Cost of Making RX5:
Direct Material ($4 * 51,000 Units) $204,000
Direct Labor ($8 * 51,000 Units) $408,000
Variable Overheads ($9* 20% * 51,000 Units) $91,800
Total incremental cost of making 51000 units $703,800
Requirement 2:
Incremental Cost of Buying RX5:
Purchase Cost ($19 per Unit * 51,000 Units) $969,000
The total incremental cost of making 51000 units is $969,000
Requirement 3:
The Cost of buying is higher than making RX5, hence the company should Make RX5.
Jay owns Gatsby Islands and wants to convey it to his good friends, Nick and Daisy. Nick lives next door to Jay while Daisy lives across the waters. He conveys an interest in Gatsby Islands "to Nick as tenants by the entirety." Two months later, he makes a corresponding conveyance to Daisy. Jay created the following:_______
a. tenancy in common
b. severalty community property
c. joint tenancy with rights of survivorship
d. tenancy by entirety
Answer:
Correct Answer:
c. joint tenancy with rights of survivorship
Explanation:
The property Jay owes on Gatsby Island belongs to him but he wishes to share th ownership with his 2 good friends. His conveyance of the message to both which reads "tenants by the entirety" shows that he and his friends has equal ownership and rights to the Gatsby Island property.
In the event that either him or one of the friends dies, the full title of the property automatically passes to the surviving person.
Best Foods, Inc. has an unlevered cost of capital of 10 percent. The company generates EBIT of $4,250 per year and has a tax rate of 35 percent. If the firm adds $10,000 of debt to its capital structure, what is the value of the levered firm?
Answer:
The value of the levered firm $31,125
Explanation:
Value of Firm is the value of present value of expected future earning. It is calculated by dividing the earning after tax by the cost of capital while considering that the business will operate for the foreseeable future time.
EBIT $4,250.00
Less
Interest $0.00
EBT $4,250.00
Tax 35% x 4250 $1,487.50
EAT $2,762.50
Cost of Capial 10%
Value of firm = EAT / Cost of Capital = $2,762.5 / 10% = $27,625
Debt after tax = $10,000 x ( 1 - 0.35 ) = $6,500
Value of Equity = Value of firm - Debt after tax = $27,625 - $6,500 = $21,125
Value of debt = $10,000
Value of levered Firm = $21,125 + $10,000 = $31,125
Sunny Day Manufacturing Company is considering investing in a one-year project that requires an initial investment of $450,000. To do so, it will have to issue new common stock and will incur a flotation cost of 2.00%. At the end of the year, the project is expected to produce a cash inflow of $550,000. The rate of return that Sunny Day expects to earn on its project (net of its flotation costs) is:____________
White Lion Homebuilders has a current stock price of $22.35 per share, and is expected to pay a per-share dividend of $2.03 at the end of next year. The company's earnings' and dividends' growth rate are expected to grow at the
constant rate of 8.70% into the foreseeable future. If White Lion expects to incur flotation costs of 5.00% of the value of its newly-raised equity funds, then the flotation-adjusted (net) cost of its new common stock (rounded to two decimal places) should be:_________
Sunny Day Manufacturing Company Co.'s addition to earnings for this year is expected to be $420,000. Its target capital structure consists of 50% debt, 5% preferred, and 45% equity. Determine Sunny Day Manufacturing Company's retained earnings breakpoint: ___________
a. $840,000
b. $980,000
c. $933,333
d. $886,666
Answer:
A lot to read and check but I will get back to you soon
Henry Crouch's law office has traditionally ordered ink refills 50 units at a time. The firm estimates that carrying cost is 35% of the $12 unit cost and that annual demand is about 235 units per year. The assumptions of the basic EOQ model are thought to apply. For what value of ordering cost would its action be optimal?
Answer:
ordering costs = $22.34
Explanation:
economic order quantity (EOQ) = √(2SD / H)
D = annual demand = 235H = holding cost = 35% x $12 = $4.20S = cost per order = ?EOQ = 5050 = √[(2 x S x 235) / $4.20]
2,500 = (2 x S x 235) / $4.20
$10,500 = 2 x S x 235
S = $10,500 / (2 x 235) = $10,500 / 470 = $22.34
a. Monetary Policy involves changing_______________ the money supply. In the United States, Monetary Policy is implemented by the____________.
1. taxes and government spending
2. the design of currency
3. exports
4. Federal Reserve
5. President and Congress
6. Secretary of the Treasury/ states.
b. _______________ can be used to address a Recessionary Gap; while _________ can be used to address an Inflationary Gap.
1. Contractionary Monetary Policy
2. Lower prices
3. Expansionary MonetaryPolicy
4. Larger coins
5. smaller coins
6. higher prices
c. To enact Contractionary Monetary Policy, the central bank will _________bonds. This ____________the amount of cash in the economy. This will cause bond prices to ____________and interest rates to _____________. The change in interest rates causes investment and consumption to___________ shifting ____________.
1. fall
2. stay the same
3. rise,
4. Short-Run Aggregate Supply
5. Aggregate Demand
6. Long-Run Aggregate Supply
7. Outward
8. inward
9. buy
10. sell
11. increase
12. decrease
Answer:
In the United States, Monetary Policy is implemented by the - 4. Federal Reserve
The Federal Reserve of the United States is in charge of implementing the Monetary Policy of the country. It is also in charge of regulating the financial industry, and acting as lender of the last result to prevent financial crisis.
3. Expansionary MonetaryPolicy - can be used to address a Recessionary Gap
During times of economic downturn, monetary policy tends to be expansionary: expanding the money supply to lower the interest rate, so that investment becomes cheaper, and the economy reactivates.
1. Contractionary Monetary Policy - can be used to address an Inflationary Gap.
When the money supply is too high, or has grown too fast, inflation often starts. For this reason, the fed usually implements contractionary monetary policy (less money supply, higher interest rate), in order to keep inflation from increasing.
c. To enact Contractionary Monetary Policy, the central bank will - sell bonds
When the fed sell bonds, it takes money from the market, reducing the money supply.
This - reduces - the amount of cash in the economy.
As explained above.
This will cause bond prices to - fall - and interest rates to - rise
The change in interest rates causes investment and consumption to - fall
shifting - Aggregate Demand
Contractionary monetary policy will cause interest rates to rise, making investment more expensive, and causing price hikes, this will reduce consumption.
This in turn will shift the Aggregate Demand curve to the left or inward.
The Clifford Corporation has announced a rights offer to raise $17 million for a new journal, the Journal of Financial Excess. This journal will review potential articles after the author pays a nonrefundable reviewing fee of $6,000 per page. The stock currently sells for $42 per share, and there are 2.9 million shares outstanding. a. What is the maximum possible subscription price? What is the minimum? (Leave no cells blank - be certain to enter "0" wherever required.) b. If the subscription price is set at $34 per share, how many shares must be sold? How many rights will it take to buy one share? (Do not round intermediate calculations. Round your rights needed answer to 2 decimal places, e.g., 32.16.) c. What is the ex-rights price? What is the value of a right? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) d. A shareholder with 2,000 shares before the offering has no desire (or money) to buy additional shares offered as rights. What is his portfolio value before and after the rights offer? (Do not round intermediate calculations and round your answers to nearest whole number, e.g., 32.)
Answer:
A.Maximum possible subscription price $42 per shares
Minimum price $0
B.Number of new shares $500,000
Numbers of right needed 5.8
C.Ex-rights price $40.82
Value of a right $1.18
D.Portfolio value before the right offer $84,000
Portfolio value after the right offer $84,000
Explanation:
A.
The maximum possible subscription price based on the information given will be $42 per Shares
The minimum price will be anything that is greater or higher that $0
B. Calculation for how many shares must be sold
Using this formula
Number of new shares =Journal of Financial Excess amount /Subscription price per share
Let plug in the formula
Number of new shares=$17,000,000/ $34 per share
Number of new shares=$500,000
Calculation for how many rights will it take to buy one share
Using this formula
Numbers of right needed=Shares Outstanding/Number of new Shares
Let plug in the formula
Numbers of right needed=$2,900,000/$500,000
Numbers of right needed=5.8
C. Calculation for the ex-rights price
Using this formula
Ex-rights price=(Numbers of right needed*Maximum possible subscription price +Subscription price per share)/(Numbers of right needed+ One shares)
Let plug in the formula
Ex-rights price=(5.8*$42+$34)/(5.8+1)
Ex-rights price=$277.6/6.8
Ex-rights price=$40.82
Calculation for the value of a right
Using this formula
Value of a right =maximum possible subscription price-Ex-rights price
Let plug in the formula
Value of a right=$42-$40.82
Value of a right=$1.18
D. Calculation for What is his portfolio value before the right offer
Using this formula
Portfolio value before the right offer= Shareholders Shares *Maximum possible subscription price
Let plug in the formula
Portfolio value before the right offer=2,000*42
Portfolio value before the right offer=$84,000
Calculation for What is his portfolio value after the right offer
Using this formula
Portfolio value after the right offer=(Shareholders Shares*Ex-rights price) +(Shareholders Shares*Value of a right)
Let plug in the formula
Portfolio value after the right offer=(2,000*40.82)+(2,000*1.18)
Portfolio value after the right offer=$81,640+$2,360
Portfolio value after the right offer=$84,000
Stockholders in a corporation entrust control over the company's daily operations to managers selected by the board of directors to run the company. True or False True False
Answer: true
Explanation: stockholders also known as shareholders are individuals or entities that own shares of stock in a corporation. They are therefore the real owners of a publicly traded business, however, management runs it. Therefore, it can be said that stockholders in a corporation entrust control over the company's daily operations to managers selected by the board of directors to run the company.
All firms, no matter the type of firm structure in which they are producing, make their production decisions based on the point where their: Group of answer choices
Answer:
The answer is B.
Explanation:
The profit maximisation point is the point where marginal revenue equals marginal cost(MR = MC). At this point, total revenue is maximized.
Marginal revenue is the change in total revenue when additional units is sold or made while marginal cost is the change in total cost when additional unit of output is made.
When MR > MC, the firm is not manufacturing or producing enough goods and when MC > MR, it means the firm is manufacturing or producing too much and it is making loss with each additional production.
The capital budgeting method that takes into account both the size of the original investment and the discounted cash flows is the Group of answer choices
Answer:
Option D (profitability index) is the correct choice.
Explanation:
Options aren't mentioned in the issue above. Please find the full query attachment here.
Capital budgeting seems to be the mechanism whereby the creditors assess the value of a future investment project. This corresponds to something like the timeframe by which the planned project can produce adequate income to regain the original investment.
The 3 most prevalent frameworks to contractor choosing are given below:
Payback period.Net present value.Internal rate of return.Some other choices have no relation with the specified scenario. So that the option here is just the appropriate ones.
Joseph contributed $25,000 in cash and equipment with a tax basis of $6,400 and a fair market value of $12,600 to Berry Hill Partnership in exchange for a partnership interest.
a. What is Joseph’s tax basis in his partnership interest?
b. What is Berry Hill’s basis in the equipment?
Answer:
(A) $31,400
(B) $6,400
Explanation:
Joseph contributed $25,000 in cash and equipment
The tax basis is $6,400
The fair market value paid to Bill hill partnership is $12,600
(A) Joseph tax basis in his partnership interest can be calculated as follows
= contribution+tax basis
= $25,000+$6,400
= $31,400
(B) Since Joseph contributed a tax basis of $6,400 to Bill hill partnership in exchange for a partnership interest then, Bill hill's basis in the equipment is $6,400
Barry Cuda is considering the purchase of the following Builtrite bond: $1000 par, 3 1/4% coupon rate, 10 year maturity that is currently selling for $940. If Barry purchases this bond, what would his approximate yield to maturity be?
Answer:
Yield to Maturity = 3.97%
Explanation:
The yield to maturity is the discount rate that equates the price of the bond to the present value of its future cash flow receivable from it.
The yield on the bond can be determined as follows using the formula below:
YM = C + F-P/n) ÷ 1/2 (F+P)
YM-Yield to maturity-
C- annual coupon
F- Face Value
P- Current Price
DATA
Coupon = coupon rate × Nominal value = 1,000 × 3 1/4%= 32.5
Face Value = 1000
YM-?, C- 32.5, Face Value - 1,000, P-940
YM = (32.5+ (1000-940)/10) ÷ ( 1/2× (1000 + 940) )
YM = 0.0397 × 100 = 3.97%
Yield to Maturity = 3.97%
A job has an observed cycle time of four minutes, a performance rating of 80 percent, and an allowance that is 20 percent of job time. Normal time for the job in minutes is
Answer:
1600 time minutes
Explanation:
80×20=1600
Moorcroft’s assistant controller suggested that Moorcroft hire a part time collector to encourage customers to pay more promptly and to reduce the amount of uncollectible accounts. Sales are still 40% cash and 60% credit but the assistant controller predicted that this would cause credit sales to be collected 30% in the month of the sale, 50% in the month following sale, and 18% in the second month following sale; 2% are uncollectible.Prepare a schedule of expected collections from customers for June. How did these changes impact cash collections?
Answer:
The budgeted sales are missing, so I looked for them. I found the following question, hopefully it will be similar:
Month Sales
April $300,000
May $320,000
June $370,000
Schedule of expected collections
For the month of June, 202x
Cash sales during June = $370,000 x 40% = $148,000
Collection from June's credit sales = $222,000 x 30% = $66,600
Collection from May's credit sales = $192,000 x 50% = $96,000
Collection from April's credit sales = $180,000 x 18% = $32,400
Total cash collections during June = $343,000
Since the cost of the part time collector is $1,000 per month, and the total uncollectible accounts reduce from 4% to 2%, which represents $7,400 for June's sales, I would recommend hiring the collector.
If a corporation issues shares of $1 par value common stock for , the journal entry would include a credit to:
The question is incomplete. The complete question is,
If a corporation issues 10,000 shares of $1 par value common stock for $9000, the journal entry would include a credit to:
A) Common Stock for $9000.
B) Paid-in Capital in Excess of Par—Common for $9000.
C) Common Stock for $10,000.
D) Retained Earnings for $10,000
Answer:
The common stock is credited for $10000. Thus option C is the correct answer
Explanation:
The journal entry to record the issuance of shares below par value will be,
Cash 9000 Dr
Paid in Cap in excess of par-Common stock 1000 Dr
Common stock 10000 Cr
Thus, the common stock is credited for the complete amount of $10000.
The cash received is $9000 and there is a shortage of $1000 which is adjusted by debited the paid in capital in excess of par account.
To arrive at an accurate balance on a bank reconciliation statement, a credit memorandum from the bank for the collection of a note and interest should be
Answer:
Must be added to the book balance.
Explanation:
The correct treatment would be to add this value to book balance because the bank has increased our bank balance by the note and interest amount. This must be accounted for as increase in the book balance because we have borrowed money and also that yearly interest income was also added to our bank checking account.
Hence it must be added to cash book balance in order to reconcile with the bank balance.
Using the same information from before, please calculate the WACC of Correct Inc. assuming a risk free rate of 2.5%, a company Beta of 1.2 and a market risk premium of 6%.
Answer:
WACC = 21.7%
Explanation:
The firm is an all-equity finance firm which implies that the company uses only equity funds to finance its its operation without the use of debt. Therefore, the cost of the equity of the firm would be the same as its cost of capital (WACC)
The WACC can be determined using the the capital asset pricing model (CAPM). The CAPM relates the price of a share to the market risk or systematic risk. The systematic risk is that which affects all the all the economic agents, e.g inflation, interest rate e.t.c
Using the CAPM , the required rate of return is given as follows:
E(r)= Rf +β(Rm-Rf)
E(r) - required return
β- Beta
Rm- Return on market
Rf- Risk-free rate
Rm-Rf- Market risk premium
DATA
E(r) =? , Rf- 2.5%, Rm-Rf- 6% , β- 1.2
E(r) = 2.5% + 1.2× (16%) = 21.7 %
Cost of equity = 21.7%
WACC = 21.7%
Read Eye on Fiscal Stimulus. How big was the fiscal stimulus package of 2008-2009, how many jobs was it expected to create, and how large was the multiplier implied by that expectation? Did the stimulus work?
Answer:
1. $787 billion
2. 650,000; 1.6
3. did not meet; the multiplier was much smaller than 1.6
Explanation:
The fiscal stimulus package of 2008-2009 was $787 billion. This is because, the United States government wanted to increase spending in order to have sufficient economic growth. Thus, the fiscal stimulus was expected to create 650,000 JOBS, in which the multiplier implied by that expectation is 1.6.
However, the stimulus did fiscal stimulus did not work, as it DID NOT MEET the expectations of the Obama administration, simply because "the multiplier was much smaller than 1.6"
Teams with both difficult goals and specific incentives to attain them achieve the _____ performance levels.
Answer:
Highest
Explanation:
teams with highest performance are are social groups that work to achieve a common objective or goals that can be either short term or long term. These kind of teams achieve peak performance by By having both difficult goals and specific incentives to attain these goals. Such teams must have a common objective that can be turned into performance goals that can be measured.
Exercise 7-9 Variable and Absorption Costing Unit Product Costs and Income Statements [LO7-1, LO7-2, LO7-3]
Walsh Company manufactures and sells one product. The following information pertains to each of the company’s first two years of operations:
Variable costs per unit:
Manufacturing:
Direct materials $ 25
Direct labor $ 15
Variable manufacturing overhead $5
Variable selling and administrative $2
Fixed costs per year:
Fixed manufacturing overhead $250,000
Fixed selling and administrative expenses $80,000
During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of operations, it produced 40,000 units and sold 50,000 units. The selling price of the company’s product is $60 per unit.
Required:
1. Assume the company uses variable costing:
a. Compute the unit product cost for Year 1 and Year 2.
b. Prepare an income statement for Year 1 and Year 2.
2. Assume the company uses absorption costing:
a. Compute the unit product cost for Year 1 and Year 2.
b. Prepare an income statement for Year 1 and Year 2.
3. Reconcile the difference between variable costing and absorption costing net operating income in Year 1.
Answer:
1 a. Year 1 unit product cost = 45
Year 2 unit product cost = 45
Notes: Unit product cost = Direct materials + direct labor + Variable manufacturing overhead = 25 + 15 + 5 = 45 units
1 b. Income statement
Year 1 Year 2
Sales 2,400,000 3,000,000
(40000*60); (50000*60)
Less:
Variable cost of goods sold 1,800,000 2,250,000
Variable selling and adm. 80,000 100,000
Contribution margin 520,000 650,000
Less:
Fixed manufacturing overhead 250,000 250,000
Fixed selling & adm expense 80,000 80,000
Net income $190,000 $320,000
2 a. Notes
Year 1 Year 2
Direct materials 25 25
Direct labor 15 15
Variable manufacturing overhead 5 5
Fixed manufacturing overhead 5 6.25
(250,000/50,000); (250,000/40000)
Unit product cost 50 51.25
b. Income statement
Year 1 Year 2
Sales 2400000 3000000
Less: cost of goods sold 2000000 2550000
Gross margin 400,000 450,000
Less: Selling and 160,000 180,000
administrative expense
Net income 240,000 270,000
Workings
Cost of goods sold for year 2 = (10,000* 50) + (40000 * 51.25)
= 500,000 + 2,050,000
= 25,500,000
3. Reconciliation Year 1 Year 2
Variable costing net operating 190,000 320,000
income (loss)
Add: Deferred fixed overhead 50,000
in ending inventory (10000*5)
Less: Fixed overhead realized -50,000
in beginning inventory(10000*5)
Absorption costing net operating $240,000 270,000
income (loss)
Answer 1:
Part a
Unit product cost = Direct materials + direct labor + Variable manufacturing overheadUnit product cost = 25 + 15 + 5 Unit product cost = 45 unitsYear 1 -unit product cost = 45
Year 2 -unit product cost = 45
Part b :
Income statement
Year 1 Year 2
Sales 2,400,000 3,000,000
(40000*60) (50000*60)
Less:
Variable cost of goods sold 1,800,000 2,250,000
Variable selling and adm. 80,000 100,000
Contribution margin 520,000 650,000
Less:
Fixed manufacturing overhead 250,000 250,000
Fixed selling & adm expense 80,000 80,000
Net income $190,000 $320,000
Answer 2 :
Part a
Year 1 Year 2
Direct materials 25 25
Direct labor 15 15
Variable manufacturing overhead 5 5
Fixed manufacturing overhead 5 6.25
(250,000/50,000); (250,000/40000)
Unit product cost 50 51.25
Part b.
Income statement
Year 1 Year 2
Sales 2400000 3000000
Less: cost of goods sold 2000000 2550000
Gross margin 400,000 450,000
Less: Selling and 160,000 180,000
Net income 240,000 270,000
An income statement for Year 1 - 240,000and Year 2-270,000.
(Working Notes):
Cost of goods sold for year 2 = (10,000* 50) + (40000 * 51.25)
Cost of goods sold for year 2 = 500,000 + 2,050,000
Cost of goods sold for year 2 = 25,500,000
Answer 3:
The difference between variable costing and absorption costing net operating income in Year 1.
Reconciliation Year 1 Year 2
Variable costing net operating 190,000 320,000
income (loss)
Add: Deferred fixed overhead 50,000in ending inventory (10000*5)
Less: Fixed overhead realized -50,000in beginning inventory(10000*5)
Absorption costing net operating $240,000 270,000
The difference between variable costing and absorption costing net operating income in Year 1 is $2,40,000.
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Chuck has $2,500 invested in a bank that pays 4% annually. The length of time it will take for his funds to double is closest to:
Answer:
The answer is 17.67 years.
Explanation:
Present value is $2,500
Future value of the money to be double of the present value. This means the future value will be $5,000($2,500 x 2)
Interest rate is 4%
Number of years or periods to reach this $5,000 is unknown. So we are looking for this.
To compute this number of periods, lets use Financial calculator.
I/Y = 4; PV= -2,500; FV= 5,000; CPT N= 17.67 years.
Therefore, the number of years to accumulate to $5,000 is 17.67 years
5. Suppose that a firm is in an industry which has a very rapid rate of growth (in sales and output), and is characterized by technological change and innovation. Firms attempt to maximize profits causing new firms to enter the industry attracted by profit potential. The result is that profits are competed away, leading to even greater innovation and change. Is there a limit to this continuous change
Answer:
If we use high tech industry as our subject here, I would say that there is no limit to continuous change. We can look at he last 45 years and ever since Steve Jobs developed the Apple I, PCs have continuously evolved into different products and their rate of technological evolution has currently increased. Any modern smartphone is hundreds of times more powerful than the first PCs, they are even more powerful than huge computers that existed back then. Currently high tech companies are trying to develop AI, and who knows what after. The only problem is that project lives tend to be very short, but that is part of the game. The profit margins of the firms that are successful are huge, just look at how Apple became the first company to be worth more than 2 trillions.
If you were given a personality test as part of an employment application process, would you answer the questions honestly or would you attempt to answer the questions based upon your image of "correct" way to answer? what implications does your response has for the validity of personality testing?
Explanation:
Personality tests are sold on the promise that they are valid (they measure what they say they will measure) and reliable (they produce consistent results). “Many studies over the years have proven the validity of the MBTI instrument,” says the Myers & Briggs FoundationPsychologists seek to measure personality through a number of methods, the most common of which are objective tests and projective measures.Objective tests, such as self-report measures, rely on an individual's personal responses and are relatively free of rater bias.Hope it will help you.I would answer some questions honestly but if there are some questions which i can't tell the truth i will tell some lies. because if u really like this job and don't want to loose it, it's ok to give wrong answers just for once! That's my opinion. :p. But be careful u might get in trouble if they find out ur lying!
Kelley Company reports $1,250,000 of net income for 2017 and declares $175,000 of cash dividends on its preferred stock for 2017. At the end of 2017, the company had 380,000 weighted-average shares of common stock. 1. What amount of net income is available to common stockholders for 2017
Answer:
Net Income available to common stockholders = $1075000
Explanation:
The preferred stock holders have a preference over the common stockholders in the distribution of dividends as they are paid before the common stock holders and receive a fixed amount of dividend. However, the net income that is available to common stock holders is all the net income that is left after deducting the preferred stock dividend from it.
Thus, the net income available to common stockholders can be calculated as,
Net Income available to common stockholders = Net Income - Preferred stock dividend
Net Income available to common stockholders = 1250000 - 175000
Net Income available to common stockholders = $1075000
The three conditions that characterize difficult managerial decisions concerning resources, capabilities, and core competencies are
Answer:
uncertainty, complexity, and intra-organizational conflicts.
Explanation:
Managerial decisions define that any decision that can be taken for the benefit of the organization also these types of decision set targets for the income of the company moreover it decides what type of product should be sell and the hiring of employees who should be into the organization or who should not be in the organization etc.
According to the given situation, Management decisions on capital, expertise, and core competencies are disputes of uncertainty, complexity, and intra-organizational existence.