Answer:
a. Cost of debt = Interest * (1 - Tax rate)
= 10%*(1 - 0.30)
= 7%
Cost of preferred stock = Dividend/ Issue price
= 5/48
= 10.42%
Cost of common stock (Cost of retained earnings) = (D1/P0) + g
= (4/33) + 0.07
= 0.12 + 0.07
= 0.19
= 19%
b. Fund Cost Weight Cost * Weight
Debt 7% 0.15 1.05%
Preferred stock 10.42% 0.10 1.042%
Retained earnings 19% 0.75 14.25%
WACC 16.342%
A coal-fired power plant can produce electricity at a variable cost of $0.07 per kilowatt-hour when running at its full capacity of 30 megawatts per hour, $0.16 per kilowatt-hour when running at 20 megawatts per hour, and $0.24 per kilowatt-hour when running at 10 megawatts per hour. A gas-fired power plant can produce electricity at a variable cost of $0.12 per kilowatt-hour at any capacity from 1 megawatt per hour to its full capacity of 5 megawatts per hour. The cost of constructing a coal-fired plant is $70 million, but it costs only $14 million to build a gas-fired plant.
Required:
a. Consider a city that has a peak afternoon demand of 80 megawatts of electricity. If it wants all plants to operate at full capacity, what combination of coal-fired plants and gas-fired plants would minimize construction costs?
b. How much will the city spend on building that combination of plants?
c. What will the average cost per kilowatt-hour be if you average over all 80 megawatts that are produced by that combination of plants?
Answer:
a-The construction of 2 coal-fired plants and 4 gas-fired plants will have minimum construction costs.
b-Total construction cost is $196 Million.
c-The average cost is $0.0825 per killowatt-hour.
Explanation:
a
In order to estimate the best combination of the two, consider the following linear programming model
[tex]30X+5Y\leq80\\X\geq0\\Y\geq0[/tex]
with minimizing function as [tex]70X+14Y[/tex]
This yeilds in the optimum solution of 2 coal fired plants and 4 gas fired plants with minimum construction costs.
The construction of 2 coal-fired plants and 4 gas-fired plants will have minimum construction costs.
b
The construction cost is as follows
Number of coal-fired plants=2
Number of gas-fired plants=4
Total Cost=(Cost of 1 Coal-Fired Plant*Number of coal-fired plants)+(Cost of 1 Gas-Fired Plant*Number of gas-fired plants)
[tex]\text{Total Cost}=(70\times 2)+(14\times4)\\\text{Total Cost}=140+56\\\text{Total Cost}=\$196 \text{Million}[/tex]
Total construction cost is $196 Million.
c
Average Cost of Electrici[tex]\text{Average Cost}=\text{Fraction of Coal-Fired}\times\text{Cost of Coal-Fired}+\text{Fraction of Gas-Fired}\times\text{Cost of Gas-Fired}\\\text{Average Cost}=\text{0.75}\times\text{0.07}+\text{0.25}\times\text{0.12}\\\text{Average Cost}=\$0.0525+\$0.03\\\text{Average Cost}=\$0.0825[/tex]ty production is given by estimating the share of electricity produced by coal-fired plants and gas-fired plants
Total energy=80 MW
Energy produced by Coal-Fired Plants at full capacity=2*30=60 MW
Energy produced by Gas-Fired Plants at full capacity=4*5=20 MW
Fraction of Coal-Fired Plants is given as
[tex]\dfrac{\text{Coal-Fired Share}}{\text{Total Energy}}=\dfrac{60}{80}=0.75[/tex]
Fraction of Gas-Fired Plants is given as
[tex]\dfrac{\text{Gas-Fired Share}}{\text{Total Energy}}=\dfrac{20}{80}=0.25[/tex]
Cost of Producing KW-hr by Coal-Fired Plant is $0.07
Cost of Producing KW-hr by Gas-Fired Plant is $0.12
So
[tex]\text{Average Cost}=[\text{Fraction}_{Coal-Fired}\times\text{Cost per KW-hr}_{Coal-Fired}]+[\text{Fraction}_{Gas-Fired}\times\text{Cost per KW-hr}_{Gas-Fired}]\\\text{Average Cost}=(0.75\times0.07)+(0.25\times0.12)\\\text{Average Cost}=(0.0525)+(0.03)\\\text{Average Cost}=\$0.0825[/tex]The average cost is $0.0825 per killowatt-hour.
At the beginning of 2020, Concord Company acquired a mine for $3,251,600. Of this amount, $124,000 was ascribed to the land value and the remaining portion to the minerals in the mine. Surveys conducted by geologists have indicated that approximately 12,100,000 units of ore appear to be in the mine. Concord incurred $210,800 of development costs associated with this mine prior to any extraction of minerals. It also determined that the fair value of its obligation to prepare the land for an alternative use when all of the mineral has been removed was $49,600. During 2020, 2,634,000 units of ore were extracted and 1,894,000 of these units were sold.
Required:
a. Compute the total amount of depletion for 2020.
b. Compute the amount that is charged as an expense for 2014 for the cost of the minerals sold during 2020.
Answer:
A. $737,520
B. $530,320
Explanation:
a. Computation for the total amount of depletion for 2020.
First step is to calculate the Depletion Rate
Depletion Rate = ($3,251,600 - $124,000 + $49,600 + $210,800)/12,100,000
Depletion Rate= $3,388,000/ 12,100,000
Depletion Rate= 0.28
Now let calculate the total amount of depletion for 2020.
2020 Total amount of depletion= 0.28 × $2,634,000
2020 Total amount of depletion= $737,520
Therefore the total amount of depletion for 2020 is $737,520
B. Computation for the amount that is charged as an expense for 2014 for the cost of the minerals sold during 2020.
Expense amount charged= ($737,520/$2,634,000)* 1,894,000
Expense amount charged=0.28 *1,894,000
Expense amount charged=$530,320
Therefore the amount that is charged as an expense for 2014 for the cost of the minerals sold during 2020 is $530,320
Wildhorse Co. had the following assets on January 1, 2022. Useful Life (in years) Item Cost Purchase Date Useful Life (in years) Salvage Value Machinery $68,000 Jan. 1, 2012 10 $ 0 Forklift 27,000 Jan. 1, 2019 5 0 Truck 33,400 Jan. 1, 2017 8 3,000 During 2022, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold on June 30 for $11,700. The truck was discarded on December 31. Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on disposed assets. The company uses straight-line depreciation. All depreciation was up to date as of December 31, 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Solution :
Journal Entry
Date Account and Explanation Debit Credit
1 Jan,2022 Accumulated depreciation-machine $ 68,000
Machine $ 68,000
30 June, Depreciation expense, [tex]$\left(\frac{27000}{5} \times \frac{6}{12}\right)$[/tex] $ 2700
2022 Accumulated depreciation- Forklift $ 2700
30 June, Cash $ 11,700
2022 Accumulated depreciation- Forklift, $ 18,900
[tex]$\left(\frac{27000}{5} \times 3.5 \right)$[/tex]
Gain on sale of forklift $ 3600
Forklift $ 27000
31 Dec, Depreciation expense, [tex]$\left( \frac{33400-3000}{8}\right)$[/tex] $ 3800
2022 Accumulated depreciation - Truck $ 3800
31 Dec, Accumulated depreciation - Truck, $ 22800
2022 [tex]$\left( \frac{33400-3000}{8} \times 6\right)$[/tex]
Loss on disposal of truck $ 10600
Truck $ 33400
What amount should be paid on the maturity date to settle a one-hundred-twenty day loan dated March 19, 2013, if the present value is ₱15,600 at 13 2/7% simple interest?
A. ₱690.86
B. ₱16,290.86
C. ₱16,281.39
D. ₱681.39
Answer:
c
Explanation:
During 2022, Tamarisk, Inc. reported cash provided by operations of $826000, cash used in investing of $713000, and cash used in financing of $198000. In addition, cash spent on fixed assets during the period was $287000. Average current liabilities were $676000 and average total liabilities were $1785000. No dividends were paid. Based on this information, what was Tamarisk free cash flow? ($628000). $539000. ($150000). $113000.
Answer:
b. $539,000
Explanation:
Free cash flow = Cash flow from operating activities - Capital expenditures
Free cash flow = $826,000 - $287,000
Free cash flow = $539,000
Therefore, based on this information, Tamarisk Inc. free cash flow is $539,000
The following costs related to Summertime Company for a relevant range of up to 20,000 units annually: Variable Costs: Direct materials $2.50 Direct labor 0.75 Manufacturing Overhead 1.25 Selling and administrative 1.50 Fixed Costs: Manufacturing overhead $10,000 Selling and Administrative 5,000 The selling price per unit of product is $15.00. At a sales volume of 15,000 units, what is the total cost for Summertime Company
Answer:
Total cost= $105,000
Explanation:
Because the 15,000 units are in the relevant range, the fixed costs remain constant. Now, we need to calculate the total cost of 15,000 units:
Direct material= 15,000*2.5= 37,500
Direct labor= 15,000*0.75= 11,250
Variable overhead= 15,000*1.25= 18,750
Variable selling and administrative= 15,000*1.5= 22,500
Total variable cost= $90,000
Total fixed costs= $15,000
Total cost= $105,000
Orion Flour Mills purchased a new machine and made the following expenditures: Purchase price $56,000
Sales tax 5,050
Shipment of machine 810
Insurance on the machine for the first year 510
Installation of machine 1,620
The machine, including sales tax, was purchased on account, with payment due in 30 days. The other expenditures listed above were paid in cash.
Required:
Record the above expenditures for the new machine.
Answer:
Debit : Machine $58,430
Debit : Insurance expense $510
Debit : Sales tax $5,050
Credit : Cash $63,990
Being Cost of machine recognized as well as other expenses on the machine
Explanation:
The cost of the machine includes the purchase price plus any costs directly incurred in putting the asset in the location and condition indented by the management.
Cost of Machine is calculated as :
Purchase price $56,000
Shipment of machine $810
Installation of machine $1,620
Total $58,430
Other Costs are recognized as expenses in the income statement and not as part of the asset.
Two organizations are both in the technology industry. What is most likely true about their corporate cultures?
Answer:
it's about vision, value, practices
est County Bank agrees to lend Cullumber Company $496000 on January 1. Cullumber Company signs a $496000, 6%, 6-month note. What entry will Cullumber Company make to pay off the note and interest at maturity assuming that interest has been accrued to June 30? Interest Payable 7440 Notes Payable 496000 Interest Expense 7440 Cash 510880 Interest Expense 14880 Notes Payable 496000 Cash 510880 Notes Payable 510880 Cash 510880 Notes Payable 496000 Interest Payable 14880 Cash 510880
Answer:
Dr Notes Payable $496,000
Dr Interest Payable $14,880
Cr Cash $510,880
Explanation:
Preparation of the journal entry that Cullumber Company will make to pay off the note and interest at maturity assuming that interest has been accrued to June 30
Dr Notes Payable $496,000
Dr Interest Payable $14,880
($496000*6%*6/12)
Cr Cash $510,880
($496,000+$14,880)
(To record note and interest at maturity)
Wesley, who is single, listed his personal residence with a real estate agent on March 3 of the current year at a price of $390,000. He rejected several offers in the $350,000 range during the summer. Finally, on August 16, he and the purchaser signed a contract to sell for $363,000. The sale (i.e., closing) took place on September 7. The closing statement showed the following disbursements:
Real estate agent's commission $21,780
Appraisal fee 600
Exterminator's certificate 300
Recording fees 800
Mortgage to First Bank 305,000
Cash to seller 34,520
Wesley's adjusted basis for the house is $200,000. He owned and occupied the house for seven years. On October 1, 2017, Wesley purchases another residence for $325,000.
a. Wesley's recognized gain on the sale is __________
b. Wesley's adjusted basis for the new residence is ___________
c. Assume instead that the selling price is $800,000.
Wesley's recognized gain is _____________, and his adjusted basis for the new residence is __________
Answer:
a. Wesley's recognized gain on the sale is $0.
b. Wesley's adjusted basis for the new residence is $325,000
c. Assume instead that the selling price is $800,000.
Wesley's recognized gain is $326,520, and his adjusted basis for the new residence is $325,000.
Explanation:
Wesley's actual gain = $363,000 - $21,780 - $600 - $300 - $800 - $200,000 = $139,520, but it can all be excluded using section 121.
If the selling price is $800,000;
Wesley's actual gain = $800,000 - $21,780 - $600 - $300 - $800 - $200,000 = $576,520, but he can exclude $250,000, so his recognized gain = $326,520
what happens in your retirement if you have a lapse in your years of work history?
Your monthly benefit will be lower
A lapse in your years of work history refers, There are generally the four ways by which we can handle it, various points are as leave it where it is, and the second point refers that, roll it over an ira.
What is employment?In most cases, employment refers to the status of having a paid job—of being employed. Employing someone is paying them to work. Employees are employed by an employer. Employment can also refer to the act of hiring individuals, as in We're trying to hire more women.
The employment lapse refers that, The working period of an employee and, The commencing of the individual's termination from the service date. He can continue to begin the performance services as an employee.
Therefore. As a result, The ends of the benefits, or the privileges are been applicable under a policy.
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Solving for dominant strategies and the Nash equilibrium Suppose Lorenzo and Neha are playing a game in which both must simultaneously choose the action Left or Right. The payoff matrix that follows shows the payoff each person will earn as a function of both of their choices. For example, the lower-right cell shows that if Lorenzo chooses Right and Neha chooses Right, Lorenzo will receive a payoff of 6 and Neha will receive a payoff of 5
Neha
Left Right
Lorenzo Left 8,4 4,5
Right 5,4 6,5
1. The only dominant strategy in this game is for (Neha/Lorenzo) to choose (Right/Left)
2. The outcome reflecting the unique Nash equilibrium in this game is as follows: Lorenzo chooses (Right/Left) and Neha chooses (Right/Left) .
Answer:
1. The only dominant strategy in this game is for Neha to choose Right.
2. The outcome reflecting the unique Nash equilibrium in this game is as follows: Lorenzo chooses Right and Neha chooses Right.
Explanation:
A dominant strategy is a strategy that results in a player being better off no matter the choice his or her opponent in a game.
For this game, when Lorenzo plays Left, Neha will choose Right because 5 > 4. Also, when Lorenzo plays Right, Neha will still choose Right because 5 > 4. This shows that Neha will always play Right no matter what Lorenzo plays. This implies the dominant strategy for Neha is Right.
On the other hand, when Neha plays Left, Lorenzo will also play Left because 8 > 5. But when Neha plays Right, Lorenzo will choose will also play Right because 6 > 4. This shows that Lorenzo does not have any particular strategy that make him better off. Therefore, Lorenzo does not have a dominant strategy.
Therefore, we have:
1. The only dominant strategy in this game is for (Neha/Lorenzo) to choose (Right/Left)
Based on the analysis above, the only dominant strategy in this game is for Neha to choose Right.
This is because the dominant strategy for Neha is Right, but Lorenzo does not have a dominant strategy.
2. The outcome reflecting the unique Nash equilibrium in this game is as follows: Lorenzo chooses (Right/Left) and Neha chooses (Right/Left) .
Based on the analysis above, the outcome reflecting the unique Nash equilibrium in this game is as follows: Lorenzo chooses Right and Neha chooses Right.
The reason is that Neha will always play Right and Lorenzo will be better of by also playing Right because 6 > 4.
Trends such as more frequent shipments, lighter-weight shipments, and higher-value shipments:_________
a. help standardize rates on air and ocean shipments for incoming and outgoing freight
b. make ocean freight more effective than it has been in the past
c. increase the growth of airfreight traffic
d. have decreased the cost of containerization
Answer:
B
Explanation:
B is the answer I am not 100 percent sure
As a condition of being allowed to apply for a job with Good Hands Industries, Charles is asked to waive his right to object to workplace searches. After signing the waiver, he is offered a job, and he accepts it. Sometime later, he is subjected to a search. If Charles seeks legal redress on the grounds that the search violated his privacy rights, his employer:_________-
A. will be unable to successfully assert the waiver as a defense because it was not given voluntarily.
B. will be unable to successfully assert the waiver as a defense because Charles did not grant it intentionally.
C. will be unable to successfully assert the waiver as a defense because it was given by Charles prior to his job offer.
D. will be able to successfully assert the waiver as a defense because it was given in exchange for valuable consideration.
Answer:
The answer is C (will be unable to successfully assert the waiver as a defense because it was given by Charles prior to his job offer).
Explanation:
In the employment setting, there are instances where an employer could violate an employee privacy right. For instance, the Fourth Amendment’s prohibition on unreasonable search and seizure could be very strict on a public employer compared to a private employer where the private employers are given some degree of power too. Searching employees without their consent would be directly proportional to their breach of privacy that they have right to. Charles seeking legal redress is permitted since he initially signed to waive his right to object to workplace searches prior to his job offer. At every point where workplace searches is required by the employer especially when the searches are not done at public open places, the employee consent should be required too.
Debt: 2,000 par value bonds with a 15-year maturity, 7.2% coupon, which are currently selling for 105 percent of par. Common stock: 1M shares outstanding, selling for $20 per share, and a fixed dividend of $2.50 per year. Preferred stock: 9,500 shares of preferred stock with a 6 percent required return, currently selling for $55 per share. What is the company's WACC
Answer:
17.03 %
Explanation:
WACC = Cost of Equity x Weight of Equity + Cost of Debt x Weight of Debt + Cost of Preference Stock x Weight of Preference Stock
where,
Cost of Debt is calculated as :
Per $100 of bonds
FV = $100
PV = ($105)
PMT = $100 x 7.20% = $7.20
N = 15
P/yr = 1
r = ?
Using a financial calculator to enter values as above, cost of debt (r) is 6.66%
We always use after tax cost of debt
Therefore,
After tax cost of debt = interest x (1 - tax rate)
= 4.995%
therefore,
WACC = 12.50 % x 96.51% + 4.995% x 0.965 + 6.00 % x 2.52 %
= 17.03 %
A process control system costs $200,000, has a three year service life, and a salvage value of $20,000. Find the depreciation and book value for all three years using each of the following methods: a. Straight line depreciation (20 points) b. Sum of year digits depreciation (20 points) c. Double declining balance depreciation (20 points)
Answer:
A.
Depreciation expense each of the three years would be $60,000
Book value at the end of year 1 = $140,000
Book value at the end of year 2 =$80,000
Book value at the end of year 3 = $20,000
B.
Depreciation expense in year 1 =$90,000
Depreciation expense in year 2 =$60,000
Depreciation expense in year 3 =$30,000
Book value at the end of year 1 =$110,000
Book value at the end of year 2 = $50,000
Book value at the end of year 3 = $20,000
C.
Depreciation expense in year 1 = $133,333.33
Book value at the end of year 1 = $66,666.67
Depreciation expense in year 2 = $44,444.45
Book value at the end of year 2 = $22,222.22
Depreciation expense in year 3 = $14,814.16
Book value at the end of year 3 = $7,407.40
Explanation:
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
($200,000 - $20,000) / 3 = $60,000
Depreciation expense each of the three years would be $60,000
Book value at the end of year 1 = $200,000 - $60,000 = $140,000
Book value at the end of year 2 = $140,000 - $60,000 = $80,000
Book value at the end of year 3 = $80,000 - $60,000 = $20,000
Sum-of-the-year digits = (remaining useful life / sum of the years ) x (Cost of asset - Salvage value)
Sum of the years = 1 + 2 + 3 = 6 years
Depreciation expense in year 1 = (3/6) x ($200,000 - $20,000) = $90,000
Depreciation expense in year 2 = (2/6) x ($200,000 - $20,000) = $60,000
Depreciation expense in year 3 = (1/6) x ($200,000 - $20,000) = $30,000
Book value at the end of year 1 = $200,000 - $90,000 = $110,000
Book value at the end of year 2 = $110,000 - $60,000 = $50,000
Book value at the end of year 3 = $50,000 - $30,000 = $20,000
Depreciation expense using the double declining method = Depreciation factor x cost of the asset
Depreciation factor = 2 x (1/useful life) = 2/3
Depreciation expense in year 1 = (2/3) x $200,000 = $133,333.33
Book value at the end of year 1 = $200,000 - $133,333.33 = $66,666.67
Depreciation expense in year 2 = (2/3) x $66,666.67 = $44,444.45
Book value at the end of year 2 = $66,666.67 - $44,444.45= $22,222.22
Depreciation expense in year 3 = (2/3) x$22,222.22 = $14,814.16
Book value at the end of year 3 =$22,222.22 - $14,814.16 = $7,407.40
A country is angry at a neighboring country for creating too much water and
air pollution. It passes a law that forbids its citizens from doing any business
with the other country until that country cleans up the pollution. If the
pollution continues, there will be no trade between the countries.
This is an example of which type of trade barrier?
A. Tariffs
B. Embargoes
C. Subsidies
D. Quotas
The trade barrier which is displayed is called as Embargoes. Hence, Option B is the correct statement.
What do you mean by Embargoes?An embargo is a central authority order that restricts trade or alternates with a precise country, commonly due to political or financial problems.
An embargo is commonly created due to damaging political or financial occasions among nations. It is designed to isolate a rustic and create problems for its governing body, forcing it to behave on the difficulty that brought about the embargo.
Hence, Option B is the correct statement.
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In June 2000, the SEC brought civil charges against seven top executives of Cendant Company. The SEC alleged that these officials had, among other things, inflated income by more than $100 million through improper use of company reserves. These proceedings were a result of a longstanding investigation by the SEC of financial fraud that started back in the 1980s. In your opinion, in which stage of the criminal litigation process is this case? Why?
Answer:
First stage
Explanation:
Filing of criminal charges against an offender is usually the first stage in a criminal litigation process. The investigation carried out by SEC is a preliminary process and may not be counted as First stage.
The criminal litigation process is made up seven ( 7 ) process and the investigative part of the process is to Identify the civil charges
Use the following information for VPI Co. to prepare a statement of cash flows for the year ended December 31 using the indirect method.
Cash balance at prior year-end $40,000
Gain on sale of machinery $2,000
Increase in inventory 5,000
Cash received from sale of machinery 9,500
Depreciation expense 4,000
Increase in accounts payable 1,500
Cash received from issuing stock 8,000
Net income 23,000
Cash paid for dividends 1,000
Decrease in accounts receivable 3,000
Answer:
VPI CO
Statement of Cash flows
For the Current year ended December 31
Cash flow from Operating activities
Net Income $23,000
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation Expense $4,000
Gain on sale of Machinery $(2,000)
Changes in Current Operating assets and liabilities
Decrease in Accounts Receivable $3,000
Increase in Inventory $(5,000)
Increase in Accounts Payable $1,500
Net cash Provided by operating activities $24,500
Cash flows from Investing Activities
Cash Received from Sale of Machinery $9,500
Net cash Provided by Investing activities $9,500
Cash flows from financing Activities
Cash Received from Issuing Stock $8,000
Cash Paid for Dividend $(1,000)
Net cash Provided by financing activities $7,000
Net increase in Cash $41,000
Cash Balance at Prior Year-end $40,000
Cash Balance at Current Year-end $81,000
The Xtra Store has a Human Resources Department and a Janitorial Department that provide service to three sales departments. The Human Resources Department cost is allocated on the basis of employees, and the Janitorial Department cost is allocated on the basis of space. The following information is available:______.
Human
Resources Janitorial Sales #1 Sales #2 Sales #3
Budgeted cost $54,000 $39,000
Space in square feet 13,000 10,000 26,000 40,000 64,000
Number of employees 10 15 20 40 25
1. Using the direct method, the amount of Janitorial Department cost allocated to Sales Department no. 2 is: (Do not round your intermediate calculations. Round your final answer to nearest whole dollar amount.)
a. $17,696.
b. $10,636.
c. $9,941.
d. $13,750.
e. $12,000.
2. Using the step-down method and assuming that the Human Resources Department is allocated first, the amount of Human Resources cost allocated to Sales Department no. 3 is (Do not round your intermediate calculations. Round your final answer to nearest whole dollar amount):
a. $12,273.
b. $22,500.
c. $13,382.
d. $13,500.
e. $15,882.
3. Using the direct method, the amount of Janitorial Department cost allocated to Sales Department no. 2 is: (Do not round your intermediate calculations. Round your final answer to nearest whole dollar amount.)
a. $17,696.
b. $12,000.
c. $10,636.
d. $13,750.
e. $9,941.
4. Using the step-down method and assuming that the Human Resources Department is allocated first, the amount of Human Resources cost allocated to Sales Department no. 3 is (Do not round your intermediate calculations. Round your final answer to nearest whole dollar amount):______.
a. $22,500.
b. $13,500.
c. $12,273.
d. $13,382.
e. $15,882.
Answer:
The Xtra Store
1. Using the direct method, the amount of Janitorial Department cost allocated to Sales Department no. 2 is:
e. $12,000.
2. Using the step-down method and assuming that the Human Resources Department is allocated first, the amount of Human Resources cost allocated to Sales Department no. 3 is:
d. $13,500.
3. Using the direct method, the amount of Janitorial Department cost allocated to Sales Department no. 2 is:
b. $12,000.
4. Using the step-down method and assuming that the Human Resources Department is allocated first, the amount of Human Resources cost allocated to Sales Department no. 3 is:
b. $13,500.
Explanation:
a) Data and Calculations:
Human Resources Janitorial Sales #1 Sales #2 Sales #3
Budgeted cost $54,000 $39,000
Space in square feet 13,000 10,000 26,000 40,000 64,000
Number of employees 10 15 20 40 25
1. Direct method of allocation:
Janitorial Department cost of $39,000
Sales #2 = $12,000 ($39,000 * 40,000/130,000)
2. Step-down method:
Human Resources cost of $54,000
Sales #3 = $13,500 ($54,000 * 25/100)
Ahmed Company purchases all merchandise on credit. It recently budgeted the following month-end accounts payable balances and merchandise inventory balances. Cash payments on accounts payable during each month are expected to be: May, $1,200,000; June, $1,500,000; July, $1,400,000; and August, $1,400,000
Accounts Payable Merchandise Inventory
May 31 $150,000 $260,000
June 30 130,000 500,000
July 31 300,000 300,000
August 31 120,000 330,000
(1) Compute the budgeted amounts of merchandise purchases.
(2) Compute the budgeted amounts of cost of goods sold.
Answer:
1. Computation of Budgeted amount of Merchandise Purchases
Particulars June July August
Ending Accounts Payable $130,000 $300,000 $120,000
Payments on account $1,500,000 $1,400,000 $1,400,000
$1,630,000 $1,700,000 $1,520,000
Beginning Accounts Payable $150,000 $130,000 $300,000
Purchases $1,480,000 $1,570,000 $1,220,000
2. Computation of Budgeted amount of Cost of Goods Sold
Particulars June July August
Beginning inventory $260,000 $500,000 $300,000
Purchases $1,480,000 $1,570,000 $1,220,000
Cost of goods AFS $1,740,000 $2,070,000 $1,520,000
Ending Inventory $500,000 $300,000 $330,000
Cost of goods sold $1,240,000 $1,770,000 $1,190,000
Use the drop-down menu to select the qualification best demonstrated in each example. Virgil is on time every day to his job as a Packaging Machine Operator. Lily analyzes a product's supply chain to identify ways to make it more efficient. Chase manages shipping schedules so products are sent on time. Zaida helps another worker get products ready for shipping.
Answer:
Dependability, critical-thinking skills, organizational skills, and teamwork.
Explanation:
I got it right.
Answer:
Noting here you answer is UP there ↑↑↑↑
Explanation:
Shown below is a segmented income statement for Mullett Marina’s three main boating service lines:
Winter Storage Boat Fuel & Boat Total
Concessions Maintenance
Sales revenue $4,000,000 $1,000,000 $5,000,000 $10,000,000
Less: Variable expenses 2,000,000 200,000 4900,000 7,100,000
Contribution margin $2,000,000 $800,000 $100,000 $2,900,000
Less direct fixed expenses:
Garage/warehouse rent 700,000 55,000 350,000 1,105,000
Supervision 50,000 70,000 150,000 270,000
Equipment depreciation 250,000 75,000 100,000 425,000
Segment margin $1,000,000 $600,000 $(500,000) $1,100,000
Relevant fixed costs associated with this line include 60% of Boat Maintenance’s garage/warehouse rent and 50% of Boat Maintenance’s supervision salaries. In addition, assume that dropping the Boat Maintenance service line would reduce sales of the Winter Storage line by 20% and sales of the Boat Fuel & Concessions line by 10%. All other information remains the same.
Required:
1. If the Boat Maintenance service line is dropped, what is the contribution margin for the Boat Fuel & Concessions line? For the Winter Storage line?
2. Which alternative (keep or drop the Boat Maintenance line) is now more cost effective and by how much?
Answer:
1. We have:
Contribution margin for the Boat Fuel & Concessions line = $700,000
Contribution margin for the Winter Storage line = $1,200,000
2. Keeping Boat Maintenance service line by $630,000.
Explanation:
Note that after dropping Boat Maintenance service line, its Sales revenue and Variable expenses will be eliminated while all the fixed costs will be retained. This is because, generally in Management Accounting, the fact that a a fixed cost is a direct cost does NOT mean that it is avoidable.
Note: See part a of the attached excel for the Segmented Income Statement Before Dropping Boat Maintenance service line, and see part b of the attached excel for the Segmented Income Statement After Dropping Boat Maintenance service line.
1. If the Boat Maintenance service line is dropped, what is the contribution margin for the Boat Fuel & Concessions line? For the Winter Storage line?
In the part b of the attached excel, we have:
Contribution margin for the Boat Fuel & Concessions line = $700,000
Contribution margin for the Winter Storage line = $1,200,000
2. Which alternative (keep or drop the Boat Maintenance line) is now more cost effective and by how much?
From the part a of the attached excel file, we have:
Operating income before dropping Boat Maintenance service line = $815,000
Operating income after dropping Boat Maintenance service line = -$185,000
Cost saving = $815,000 - $185,000 = $630,000
Therefore, keeping Boat Maintenance service line by $630,000.
Which of the following problems are likely to be encountered in distribution?
i) Spoilage of goods
ii) Inadequate warehousing
iii) Ineffective communication
Dazzle, Inc. produces beads for jewelry making use. The following information summarizes production operations for June. The journal entry to record June production activities for overhead allocation is:
Direct materials used $87,000
Direct labor used 160,000
Predetermined overhead rate (based on direct labor) 155%
Goods transferred to finished goods 432,000
Cost of goods sold 444,000
Credit sales 810,000
a. Debit Factory Overhead $248,000; credit Cash $248,000.
b. Debit Work in Process Inventory $160,000; credit Factory Payroll $160,000.
c. Debit Work in Process Inventory $248,000; credit Factory Overhead $248,000.
d. Debit Work in Process Inventory $160,000; credit Factory Overhead $160,000.
e. Debit Work in Process Inventory $160,000; credit Cash $160,000.
Answer:
c. Debit Work in Process Inventory $248,000; credit Factory Overhead $248,000.
Explanation:
The journal entry to record the overhead allocation is given below:
Work in Process Inventory $248,000 ($160,000 × 155%)
To Factory Overhead $248,000.
(being the overhead allocation is recorded)
here the work in process inventory is debited as it increased the asset and the factory overhead is credited so that the allocation of the overhead could be cone
Therefore the third option is correct
Understanding that unemployment benefits give workers the incentive to not look for work until their benefits run out, suppose an economist suggested that instead of giving workers up to 26 weeks of unemployment benefits that end once the person finds work, a person who loses his or her job would just get a single big check for 26 weeks of benefits, regardless of how long the worker is unemployed. Which of the following are true?
1. It is likely to reduce unemployment by increasing the incentives to look for work earlier.
2. It would be costly.
3. It would reduce the incentive to work.
4. It would have to be combined with skill training.
Answer:
1. It is likely to reduce unemployment by increasing the incentives to look for work earlier.
2. It would be costly.
Explanation:
A worker who had received the benefits of unemployment has now added incentive for looking in to work earlier. But the cost will increase since the incentive provided for the entire period of the 52 weeks which is not limited to the period of how long the person took to get employment again.
So it is most likely to decrease the unemployment by an increase in the incentive to look for work again. And it this would also increased the cost.
In October, Pine Company reports 18,200 actual direct labor hours, and it incurs $217,000 of manufacturing overhead costs. Standard hours allowed for the work done is 21,700 hours. The predetermined overhead rate is $10.15 per direct labor hour. In addition, the flexible manufacturing overhead budget shows that budgeted costs are $8.45 variable per direct labor hour and $43,100 fixed.
Required:
Compute the overhead controllable variance.
Answer:
$7,295 ( favourable)
Explanation:
According to the scenario, computation of the given data are as follows,
Actual direct labor hours = 18,200
Manufacturing OH cost = $217,000
Standard hours allowed = 21,700
Budgeted cost = $8.45
Budgeted fixed cost = $43,100
So, we can calculate overhead controllable variance by using following formula,
Overhead controllable variance = Budgeted OH (actual ) - Actual manufacturing Overhead
Where, Budgeted OH (actual ) = (21,700 × $8.35) + $43,100 = $224,295
By putting the value in the formula, we get
Overhead controllable variance = $224,295 - $217,000
= $7,295 ( favourable)
You are analyzing two assets: collectible LEGO sets, and stock of Apple. In the last 5 years, LEGOs have had an annual volatility of 5%, annual return of 6%, and a CAPM beta (the correlation coefficient between the asset and the market risk-premium) of 1.6. Apple has had an annual volatility of 10%, an annual return of 8%, and a CAPM beta of 1.2. Is the following statement true or false?
According to CAPM, Apple has a higher expected return than LEGO.
Answer:
No, Apple has lower rate of return than LEGOs.
Explanation:
Risk free rate is 2% and Market risk is 9%
Expected return can be calculated by :
E(r) = Rf + beta * (Rm - Rf)
E(r) LEGOs = 2 + 1.6 * (9 - 2)
E(r) LEGOs = 13.2%
E(r) Apple = 2 + 1.2 * (9 - 2)
E(r) Apple = 10.4%
Zeffer is a small but growing bottling company that competes with large soft drink heavy-hitters. To set itself apart, Zeffer has decided to develop a line of all-natural soft drinks that are believed to be healthier than typical high-calorie sodas. The company hopes that these soft drinks will become popular in various sectors of the U.S. market. Answer the following question based on the scenario described above. Zeffer executives have decided to focus marketing efforts on the ________ market, since this group is expected to grow more rapidly than
Answer:
Hispanic
Explanation:
In the United States Hispanic population has continued to be responsible for half of the total population growth since 2010 till date.
In this time Hispanics contributed 52% to the 18.9 million population growth in the United States.
Based on this trend Zeffer has decided to develop a line of all-natural soft drinks that are believed to be healthier than typical high-calorie sodas and targeting the Hispanic market will make their product popular rapidly.
Berry Corp. is considering an investment with an initial cost of $250,000. Assume straight line depreciation with no salvage value is appropriate. The investment is expected to generate cash revenues of $200,000 and incur cash costs of $120,000 each year for the next four years. Assume straight line depreciation with no salvage value is appropriate. What is the investment's annual rate of return
Answer:
14%
Explanation:
Depreciation = Cost - Residual value / Useful life
Depreciation = ($250,000 - 0)/4
Depreciation = $62,500
Annual net earnings = Revenue - Cost - Depreciation
Annual net earnings = $200,000 - $120,000 - $62,500
Annual net earnings = $17,500
Annual rate of return = Annual net earnings / Average investment
Annual rate of return = $17,500/ [($250,000 + $0) /2]
Annual rate of return = $17,500 / $125,000
Annual rate of return = 0.14
Annual rate of return = 14%