Charles lives in Houston and runs a business that sells boats. In an average year, he receives $851,000 from selling boats. Of this sales revenue, he must pay the manufacturer a wholesale cost of $476,000; he also pays wages and utility bills totaling $281,000. He owns his showroom; if he chooses to rent it out, he will receive $71,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Charles does not operate this boat business, he can work as an accountant, receive an annual salary of $34,000 with no additional monetary costs, and rent out his showroom at the $71,000 per year rate. No other costs are incurred in running this boat business.
Implicit Cost
Explicit Cost
The salary Bob could earn if he worked as an accountant
The wholesale cost for the boats that Bob pays the manufacturer
The rental income Bob could receive if he chose to rent out his showroom
The wages and utility bills that Bob pays
Complete the following table by determining Bob's accounting and economic profit of his boat business.
Profit
(Dollars)
Accounting Profit
Economic Profit

Answer and Explanation:

The classification is as follows;

When bob worked as an accountant so he could earn the salary so this represent the implicit cost

The cost for the boats that bob paid to the manufactured represent the explicit cost

The rental income that received by bob represent the implicit cost

The wages and utility bills paid by bob represent the explicit cost

The Accounting profit is

= Revenue - explicit cost

= $851,000 - $476,000 - $281,000

= $94000

And, the Economic profit  is

= Accounting profit - implicit cost

= $94,000 - $71,000 - $34,000

= -$11,000

Locomotive Corporation is planning to repurchase part of its common stock by issuing corporate debt. As a result, the firm’s debt–equity ratio is expected to rise from 30 percent to 50 percent. The firm currently has $3.3 million worth of debt outstanding. The cost of this debt is 9 percent per year. Locomotive expects to have an EBIT of $1.32 million per year in perpetuity. Locomotive pays no taxes.
a. What is the market value of Locomotive Corporation before and after the repurchase announcement?
b. What is the expected return on the firm’s equity before the announcement of the stock repurchase plan?
c. What is the expected return on the equity of an otherwise identical all-equity firm?
d. What is the expected return on the firm’s equity after the announcement of the stock repurchase plan?

Modified Accelerated Cost Recovery System (MACRS) (LO 7.4) Mike purchases a new heavy-duty truck (5-year class recovery property) for his delivery service on April 30, 2017. No other assets were purchased during the year. The truck is not considered a passenger automobile for purposes of the listed property and luxury automobile limitations. The truck has a depreciable basis of $39,000 and an estimated useful life of 5 years. Assume half-year convention for tax. .
a. Calculate the amount of depreciation for 2017 using financial accounting straight-line depreciation (not the straight-line MACRS election) over the truck's estimated useful life.
b. Calculate the amount of depreciation for 2017 using the straight-line depreciation election, using MACRS tables over the minimum number of years with no bonus depreciation or election to expense
c.Calculate the amount of depreciation for 2017, including bonus depreciation but no election to expense, that Mike could deduct using the MACRS tables
d. Assume no income limit on the expense election. Calculate the amount of depreciation for 2017 including bonus depreciation and the election to expense that Mike can deduct.

Communication starts with
​

The Laramie Factory produces expensive boots. It has two departments, tanning and finishing departments, that process all the items. During January, the beginning work in process in the tanning department was 40% complete as to conversion and 100% complete as to direct materials. The beginning inventory included $6,000 for materials and $18,000 for conversion costs. Ending work-in-process inventory in the tanning department was 40% complete. Direct materials are added at the beginning of the process. Beginning work in process in the finishing department was 60% complete as to conversion. Beginning inventories included $7,000 for transferred-in costs and $11,000 for conversion costs. Ending inventory was 30% complete. Additional information about the two departments follows: Tanning Finishing Beginning work-in-process units 5,000 4,000 Units started this period 14,000 Units transferred out this period 16,000 18,000 Ending work-in-process units 2,000 Material costs added $18,000 Conversion costs $32,000 $18,630 Transferred-out cost $50,400 Required: Complete the production cost worksheet below using FIFO costing for the finishing department.

A company acquired a copyright that now has a remaining legal life of 30 years. In the hands of the previous owner, the copyright had a 38-year useful life assigned to it. An analysis of market trends and consumer habits indicated that the copyrighted material will generate positive cash flows for approximately 25 years. What is the remaining useful life, if any, over which the company can amortize the copyright for accounting purposes

Choose one of the management or leadership theories (you may know of one not listed below) and three of the characteristics listed below. You want to research what details for each characteristic you chose applies to the selected management or leadership theory. You should write at least 100-word minimum for each characteristic.
Management and leadership theories include :_____.
a. Contingency theory
b. Systems theory
c. Chaos theory
d. Theory X and Theory Y
e. Human relations theory
f. Transactional leadership theory
g. Transformational leadership theory
h. Path-goal theory
i. Charismatic leadership theory
j. Situational leadership theory.
Different types of characteristics to consider for each management or leadership theory are :_______.
a. Traits
b. Values, integrity and moral development
c. Confidence and optimism
d. Skills and expertise
e. Behavior
f. Influence tactics
g. Attributes about followers
h. Beliefs and assumptions.

Adamson Corporation is considering four average-risk projects with the following costs and rates of return:

Project Cost Expected Rate of Return
1 $2,000 16.00%
2 3,000 15.00
3 5,000 13.75
4 2,000 12.50

The company estimates that it can issue debt at a rate of rd = 10%, and its tax rate is 30%. It can issue preferred stock that pays a constant dividend of $5 per year at $48 per share. Also, its common stock currently sells for $33 per share; the next expected dividend, D1, is $4.00; and the dividend is expected to grow at a constant rate of 5% per year. The target capital structure consists of 75% common stock, 15% debt, and 10% preferred stock.

Required:
a. What is the cost of each of the capital components?
b. What is Adamson's WACC?

A major equipment purchase is being considered Metro Atlanta. The initial cost is determined to be $1,000,000. It is estimated that this new equipment will save $100,000 the first year and increase gradually by $50,000 for the next 6 years. MARR= 10%.
A) The payback period for this equipment purchase is______
B) The B/C ratio for this investment is ________
C) The NFW of this investment is ________

The cash account for American Medical Co. at April 30 indicated a balance of $334,985. The bank statement indicated a balance of $388,600 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items: A.Checks outstanding totaled $61,280. B.A deposit of $42,500, representing receipts of April 30, had been made too late to appear on the bank statement.

Penetration pricing doesn't work if ________.

profit generated by corporations is known as ?

The stockholders’ equity section of Velcro World is presented here.
VELCRO WORLD
Balance Sheet (partial)
($ and shares in thousands)
Stockholders' equity:
Preferred stock, $1 par value $ 5,800
Common stock, $1 par value 28,000
Additional paid-in capital 1,028,600
Total paid-in capital 1,062,400
Retained earnings 286,000
Treasury stock, 12,000
Common shares (360,000)
Total stockholders' equity $ 988,400
Based on the stockholders' equity section of Velcro World, answer the following questions. Remember that all amounts are presented in thousands.
1. How many shares of preferred stock have been issued? (Enter you answer in total number of shares, not in thousands.)
2. How many shares of common stock have been issued? (Enter you answer in total number of shares, not in thousands.)
3. If the common shares were issued at $30 per share, at what average price per share were the preferred shares issued?
4. If retained earnings at the beginning of the period was $250 million and $30 million was paid in dividends during the year, what was the net income for the year? (Enter your answer in million (i.e., 5,000,000 should be entered as 5).)
5. What was the average cost per share of the treasury stock acquired?

The following is a list of various costs of producing T-shirts. Classify each cost as either a variable, fixed, or mixed cost for units produced and sold.
a. Ink used for screen printing Variable
b. Warehouse rent of $8,000 per month plus $0.50 per square foot of storage used Mixed
c. Thread Variable
d. Electricity costs of $0.038 per kilowatt-hour Variable
e. Janitorial costs of $4,000 per month Fixed
f. Advertising costs of $12,000 per month
g. Accounting salaries
h. Color dyes for producing different colors of T-shirts Variable
i. Salary of the production supervisor
j. Straight-line depreciation on sewing machines Fixed
k. Salaries of internal pattern designers
l. Hourly wages of sewing machine operators Variable
m. Property taxes on factory, building, and equipment Fixed
n. Cotton and polyester cloth
o. Maintenance costs with sewing machine company (the cost is $2,000 per year plus $0.001 for each machine hour of use.) Mixed

Bramble Company reports the following operating results for the month of August: sales $325,000 (units 5,000); variable costs $212,000; and fixed costs $70,400. Management is considering the following independent courses of action to increase net income. Compute the net income to be earned under each alternative. 1. Increase selling price by 10% with no change in total variable costs or sales volume. Net income $ 2. Reduce variable costs to 60% of sales. Net income $ 3. Reduce fixed costs by $18,000. Net income $ Which course of action will produce the highe

During the current month, Tomlin Company incurs the following manufacturing costs.
(a) Purchased raw materials of $16,940 on account.
(b) Incurred factory labor of $38,528. Of that amount, $32,281 relates to wages payable and $6,247 relates to payroll taxes payable.
(c) Factory utilities of $3,108 are payable, prepaid factory property taxes of $2,008 have expired, and depreciation on the factory building is $8,322.
Prepare journal entries for each type of manufacturing cost. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No. Account Titles and Explanation Debit Credit
(a)
(b)
(c)

Amy and Builders Corporation enter into a contract in which Amy agrees to deliver cement to Builders at a construction site. They neglect to include a price in the agreement. A court will a. determine a reasonable price for the cement and insert it into the contract. b. leave the parties in the position in which it found them. c. refuse to enforce the agreement. d. select the lowest quoted price for cement and insert it into the contract.

Which TWO details should be covered by the scope of Loretta’s business message?

Loretta is writing a brochure about storm preparedness for the county’s emergency management services. In the brochure, Loretta should include information about the....
a. Different kinds of storms, b. storm routes in the neighboring county, c. storm shelters in the county .

She should also inform the recipients about the..... a. specific medical procedures to follow,b. history of emergency services, c. emergency supplies to have on hand. .

Is gender pay gap logical ? If so, kindly explain.
Thanks.

Which of the following is NOT a reason to extend credit to
customers you are trying to sell to?
O Selling on credit was a long-established industry practice before you
entered the market and it is expected.
O You are selling an intangible asset with fat margins and customer's
struggle to find financing and if the customer doesn't pay, you have not
lost much
You feel like you can sell more product by accommodating customers and
you have a high level of knowledge about the industry you sell into and
you can make informed decision quicker than a generic bank.
It is the end of the quarter, and all of the sales people are trying to hit
their quota but you don't have anybody available to check credit or do
financial reviews of new customers. You are selling a low margin product
with a high amount of C.O.G.S.

Exercise 23-2 Make or buy LO P1 Gelb Company currently manufactures 43,000 units per year of a key component for its manufacturing process. Variable costs are $5.15 per unit, fixed costs related to making this component are $73,000 per year, and allocated fixed costs are $78,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.70 per unit. Calculate the total incremental cost of making 43,000 units and buying 43,000 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier

Indicate which activities of Stockton Corporation violated the rights of a stockholder who owned one share of common stock. (You may ch mooosere than one answer.
a. Did not allow the stockholder to sell the stock to her brother.
b. Rejected the stockholder's request to be put in charge of its retail store.
c. When additional common stock was later issued, the company did not give the shareholder the preemptive right to protect her proportionate interest.
d. The company did not provide all stockholders with timely financial reports.
e. In liquidation, paid the common shareholder after all creditors were already paid.

The Northern Ring Company manufactures 2,000 telephones per year. The full manufacturing costs per telephone are as follows: Direct materials $ 2 Direct labor 8 Variable manufacturing overhead 6 Average fixed manufacturing overhead 6 Total $22 The Texas Ring Company has offered to sell Northern Ring Company 2,000 telephones for $15 per unit. If Northern Ring Company accepts the offer, $10,000 of fixed overhead will be eliminated. Northern Ring should: Select one: A. Buy the telephones; the savings is $12,000 B. Make the telephones; the savings is $2,000 C. Buy the telephones; the savings is $24,000 D. Make the telephones; the savings is $12,000

The objectives of labor unions frequently shift with social and economic trends. In the 1970s, the primary objective was additional pay and benefits for members. In the 1980s, job security and union recognition were uppermost. In the 1990s and into the 2000s, unions again focused on job security due to the growth of global competition and outsourcing. Organized labor has also strongly opposed the increase in offshore outsourcing, claiming this practice will cost U.S. jobs. Labor unions generally insist that a contract contain a union security clause stipulating that employees who reap union benefits either officially join or at least pay dues to the union. Edward was recently transferred to a location in a new state. He was surprised that he was not required to be in the union in the new state, but he was in the old state. He later learned that the new state passed a provision giving him the choice.

a. Open shop agreement
b. Union shop agreement
c. Agency shop agreement & Right-to-work law

XYZ Office Supplies is about to introduce a new customer service program that will affect all its 355 sales and service employees. Job duties will be changed, and the employee rewards system will be altered to fit this new customer focus. Moreover, the company wants to improve the efficiency of work processes, thereby removing some of the comfortable (and often leisurely) routines that employees have followed over the years. Top management is concerned about the different types of forces resisting change that the company will potentially experience during this change process. The employees at XYZ discreetly weaken the new customer service program to prove that the decision is wrong and that the new program is not effective. Which of the following reasons to resist change is depicted in this scenario?
a. induce organizational learning.
b. negotiate with the employees.
c. use the stress management technique.
d. create an urgency for change.

A construction company is considering investing $80,000 in a dump truck. The truck will last 5 years, at which time it will be sold for $15,000. The maintenance cost at the end of the first year is estimated to be $9,000. Maintenance costs for the truck are estimated to increase by $1000 per year over its life. As an alternative, the company may lease the truck from a dealership for $X per year, including maintenance.

Required:
a. Draw a cash flow diagram of both alternatives.
b. For what value of X should the company lease the truck if the company does business with a MARR of 7%. Assume end-of-year lease payments.

LJM Corporation includes two divisions, Shay Division and Patty Division. The Shay Division makes specialized filters, including one that could be used by the Patty Division. Costs for the filter are variable costs, $16; fixed costs, $20. Shay Division has capacity to make 20,000 of the filters, and it is operating at capacity. It sells the filters to other companies for $52 each. The Patty Division needs 8,000 filters per year, and it has been purchasing them from another company for $45 each. Required: 1) If a transfer were to occur between Shay Division and Patty Division, what is the maximum that Patty Division should be willing to pay for the filters? 2) If a transfer were to occur between Shay Division and Patty Division, what is the minimum price that Shay Division should be willing to accept?

George is responsible for examining the heating and air conditioning system of an upcoming hotel. So, George is a mechanical____

Danner Company expects to have a cash balance of $52,965 on January 1, 2017. Relevant monthly budget data for the first 2 months of 2017 are as follows. Collections from customers: January $100,045, February $176,550. Payments for direct materials: January $58,850, February $88,275. Direct labor: January $35,310, February $52,965. Wages are paid in the month they are incurred. Manufacturing overhead: January $24,717, February $29,425. These costs include depreciation of $1,765 per month. All other overhead costs are paid as incurred. Selling and administrative expenses: January $17,655, February $23,540. These costs are exclusive of depreciation. They are paid as incurred. Sales of marketable securities in January are expected to realize $14,124 in cash. Danner Company has a line of credit at a local bank that enables it to borrow up to $29,425. The company wants to maintain a minimum monthly cash balance of $23,540.
Prepare a cash budget for January and February.

The following income statements are provided for Li Company's last two years of operation: Year 1 Year 2 Number of units produced and sold 4,500 4,100 Sales revenue $ 69,750 $ 63,550 Cost of goods sold 41,700 38,000 Gross margin 28,050 25,550 General, selling, and administrative expenses 17,500 16,300 Net income $ 10,550 $ 9,250 Assuming that cost behavior did not change over the two-year period, what is Li Company's contribution margin in Year 2?

n 1982 the inflation rate hit 16%. Suppose that the average cost of a textbook in 1982 was $25. What was the expected cost in the year 2017 if we project this rate of inflation on the cost? (Assume continuous compounding. Round your answer to the nearest cent.) If the average cost of a textbook in 2012 was $150, what is the actual inflation rate (rounded to the nearest tenth percent)?