Answer:
a)Break-even point = 6,800 units
b) Break-even point =5780 units
Explanation:
Break-even point is the level of activity that achieves no profit or loss. At this level profit is zero because the the total revenue is equal to total cost.
The break-even point is calculated as
Units to achieve target profit = (Total general fixed cost for the period)/ contribution per unit
Contribution per unit = Selling Price - Variable cost
Contribution per unit = 67 - 33 = 34
Fixed cost =231,200
So the units requited to achieve break-even point:
Break-even point = 231,200/34 = 6,800 units
Break-even point = 6,800 units
b) If the selling price wete increased to 73
The break-even point = 231,200/ (73- 33) = 5,780 units
Break-even point =5780 units
Your company assembles five different models of a motor scooter that is sold in specialty stores in the United States. The company uses the same engine for all five models. You have been given the assignment of choosing a supplier for these engines for the coming year. Due to the size of your warehouse and other administrative restrictions, you must order the engines in lot sizes of 1,100 each. Because of the unique characteristics of the engine, special tooling is needed during the manufacturing process for which you agree to reimburse the supplier. Your assistant has obtained quotes from two reliable engine suppliers and you need to decide which to use. The following data have been collected:
Requirements (annual forecast) 13,200 units
Weight per engine 25 pounds
Order processing cost $230 per order
Inventory carry cost 20 percent of the average value of inventory per year
Note: Assume that half of lot size is in inventory on average (1,100/2 = 550 units).
Two qualified suppliers have submitted the following quotations:
ORDER QUANTITY SUPPLIER 1 SUPPLIER 2
UNIT PRICE UNIT PRICE
1 to 1,499 units/order $ 553 $ 552
1,500 to 2,999 units/order 551 552
3,000 + units/order 543 542
Tooling costs $ 28,300 $ 24,400
Distance 120 miles 100 miles
Your assistant has obtained the following freight rates from your carrier:
Truckload (42,000 lbs. each load): $0.80 per ton-mile
Less-than-truckload: $1.20 per ton-mile
Note: Per ton-mile = 2,000 lbs. per mile.
a-1.Calculate the total cost for each supplier. (Round your answers to the nearest whole number.)
a-2. Which supplier would you select?
b. If you could move the lot size up to ship in truckload quantities, calculate the total cost for each supplier.
Answer:
A)
Sup 1 $7,415,250
Sup 2 $7,394,080
I will pick supplier 2 as their total cost is lower.
With the assumption of point b:
Supplier 1 $ 7,412,612
Supplier 2 $ 7,419,296
Explanation:
We must use the values for 1 to 1,499 units as we are constrained to a maximum of 1,100 lot size.
Weight of the lot:
1,100 x 25 pounds = 27,500 we do not achieve truckload
So we use the 1.20 per ton-mile
27,500 / 2,000 = 13.75 tons
13.75 tons x $1.20 each x 100 miles x 12 per year = $23,760
13.75 tons x $1.20 each x 120 miles x 12 per year = $19,800
Order cost $230 x 12 per year = $ 2,760
[tex]\left[\begin{array}{cccc}&$Supplier 1&$Supplier 2&$Differential\\$Demand&13200&13200&0\\$Unit Cost&553&552&-1\\$Goods cost&7299600&7286400&-13200\\$Tooling Cost&28300&24400&-3900\\$Truckload&23760&19800&-3960\\$Order Cost&2760&2760&0\\$Holding Cost&60830&60720&-110\\$Total Inventory Cost&7415250&7394080&-21170\\\end{array}\right][/tex]
Truckload: 42,000 / 25 = 1,680 units
new logistic cost:
13,200 / 1,680 = 7.85
This will mean 7 full travels and then another travel with less than full-load with As we cannot send "0.85" of a full load truck
13,200 - 1,680 x 7 = 1,440 units
Logistic cost:
42,000 / 2,000 x $0.80 each x 100 miles x 7 travels
+ 1,440 x 25 / 2000 x $1.20 each x 100 miles = 13920
42,000 / 2,000 x $0.80 each x 120 miles x 7 travels
+ 1,440 x 25 / 2000 x $1.20 each x 120 miles = 16,704
Order Cost: 8 orders x 230 = $1,840
Holding Cost: 1,680 untis / 2 x $551 or $552 x 20%
[tex]\left[\begin{array}{cccc}&Supplier 1&Supplier 2&Differential\\$Demand&13200&13200&0\\$Unit Cost&551&552&1\\$Goods cost&7273200&7286400&13200\\$Tooling Cost&28300&24400&-3900\\$logistic cost&16704&13920&-2784\\$Order Cost&1840&1840&0\\$Holding Cost&92568&92736&168\\$Total Inventory Cost&7412612&7419296&6684\\\end{array}\right][/tex]
Ruby is 25 and has a good job at a biotechnology company. She currently has $10,000 in an IRA, an important part of her retirement nest egg. She believes her IRA will grow at an annual rate of 8 percent, and she plans to leave it untouched until she retires at age 65. Ruby estimates that she will need $875,000 in her total retirement nest egg by the time she is 65 in order to have retirement income of $20,000 a year (she expects that Social Security will pay her an additional $15,000 a year). a. How much will Ruby’s IRA be worth when she needs to start withdrawing money from it when she retires? Use Exhibit 1-A. (Round FV factor to 3 decimal places and final answer to the nearest whole dollar.) b. How much money will she have to accumulate in her company’s 401(k) plan over the next 40 years in order to reach her retirement income goal? (Round your answer to the nearest whole dollar.)
Answer:
a. How much will Ruby’s IRA be worth when she needs to start withdrawing money from it when she retires?
the future value of Ruby's IRA = $10,000 x 21.725 (FV factor, 8%, 40 periods) = $217,250
b. How much money will she have to accumulate in her company’s 401(k) plan over the next 40 years in order to reach her retirement income goal?
she needs to accumulate $875,000 - $217,250 = $657,750 during the next 40 years
the annual contribution = FV / FV annuity factor = $657,750 / 259.057 (FV annuity factor, 8%, 40 periods) = $2,539.02 per year
Under the antiboycott law, U.S. companies are forbidden to participate in any unauthorized foreign boycott. Which situation brought about the antiboycott law in the U.S.?
Answer: The Boycott of Israel by the Arab League
Explanation:
The Arab League since 1948 has mandated that all it's members boycott any trade with Israel as well as boycotting any companies that are trading with Israel in protest of what they view as the formation of an illegal country on lands belonging to Palestine.
The United States seeing how this could affect Israel, passed some anti-boycott laws in the '70s amongst them the Export Administration Act (EAA) to ensure that its companies still traded with Israel.
The financial statements of Burnaby Mountain Trading Company are shown below. Income Statement 2017 Sales $7,000,000 Cost of Goods Sold 5,000,000 Gross Profit $2,000,000 Selling and Administrative Expenses 1,700,000 EBIT $300,000 Interest Expense 50,000 Income before Tax $250,000 Taxes 100,000 Net Income $150,000 Burnaby Mountain Trading Company 2017 2016Cash $90,000 $80,000 Accounts Receivable 810,000 800,000 Inventory 800,000 720,000 Total Current Assets $1,700,000 $1,600,000 Fixed Assets 2,600,000 2,400,000 Total Assets $4,300,000 $4,000,000 Accounts Payable $500,000 $400,000 Bank Loans 100,000 100,000 Total Current Liabilities $600,000 $500,000 Long-term Bonds 400,000 300,000 Total Liabilities $1,000,000 $800,000 Common Stock (200,000 shares) 500,000 500,000 Retainded Earnings 2,800,000 2,700,000 Total Equity $3,300,000 $3,200,000 Total Liabilities and Equity $4,300,000 $4,000,000 The firm's current ratio for 2017 is _________.a. 1.3b. 1.5c. 1.69d. 2.83
Answer:
d. 2.83
Explanation:
Note: The financial statement in the question are merged together. They are therefore sorted before answering the question. See the attached excel file for the full question with the sorted financial statement.
The explanation to the answer is now as follows:
The current ratio is a liquidity ratio that is used in measuring whether a company has adequate resources to meet its short-term obligations or pay its liabilities from its current assets.
The current ratio provides a comparison current assets to current liabilities of a company and it can be calculated using the following formula:
Current ratio = Total current assets / Total current liabilities ................. (1)
From the 2017 balance sheet of Burnaby Mountain Trading Company, we have:
Total current assets = $1,700,000
Total current liabilities = $600,000
Substituting the values for Total current assets and Total current liabilities into equation (1), we have:
Current ratio = $1,700,000 / $600,000 = 2.83
Therefore, The firm's current ratio for 2017 is 2.83. That is, the correct option is option d. 2.83.
This indicates that the firm has more than enough current assets to pay off 2.83 or 283% of its current liabilities.
After owning a Maplewood Company bond for five years, Michelle exercised an option that allowed her to exchange her bond for 20 shares of the company stock. Michelle owned a
Answer: B. convertible bond.
Explanation:
A Convertible bond is as the name implies, a fixed income asset. However, it also has a hybrid function in that it can be converted into shares or equity in the company that issued the bond.
In the agreement, when this can be done is up to the bondholder but there might be only specific times in which they can convert the bond. As a result of its ability to be convertible to stock, the price of this bond is quite susceptible to interest rate changes as well as the price of the stock that it can be converted into. If for instance interest rates fall or the stock price rises, these are both incentives to convert the bonds to stock.
Michelle was able to exchange her bond for shares so what she owned was a convertible bond.
What are some of the possible pitfalls of owning a credit card? Check all that apply. A Only paying the minimum balance due. B Possible free collision coverage when renting a car. C Paying your bill late. D Establishing a credit rating. E Juggling too many cards.
Answer:
C. Paying your bill late.
E. Juggling too many cards.
Explanation:
Xinghong company is considering replacing one pf its manufacturing machines. The machine has a book value of $44000 and a remaining useful life of five years, at which time its salvage value will be zero. It has a curretn market value of 54000 variable manufacturing costs are $33600 per year for this machine. Inforamation on two alternative replacement machines follows.
Alternative A Alternative B
Cost $117,000 $118,000
Variable manufacturing costs per year 22,700 10,700
1. Calculate the total change in net income if Alternative A is adopted.
Alternative A: Increase or (Decrease) in Net Income
Cost to buy new machine
Cash received to trade in old machine
Reduction in variable manufacturing costs
Total change in net income
2. Calculate the total change in net income if Alternative B is adopted.
Alternative B: Increase or (Decrease) in Net Income
Cost to buy new machine
Cash received to trade in old machine
Reduction in variable manufacturing costs
Total change in net income
3. Should Xu keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xu purchase?
A. Alternative B
B. Alternative A
C. Keep the manufacturing machine
Answer:
1. Decrease in Net Income of -$8,500
2. Increase in Net Income of $50,500
3. Replace the old machine with Alternative B
Explanation:
1.
Alternative A
Cost to Buy New Machine -$117,000
Cash received to trade in old machine $54,000
Reduction in Variable Manufacturing Costs (($33,600*5 years ) - (22,700*5 years )) $54,500
Total change in Net Income -$8,500
2.
Alternative B
Cost to Buy New Machine -$118,000
Cash received to trade in old machine $54,000
Reduction in Variable Manufacturing Costs (($33,600*5years ) - (10,700*5 years )) $114,500
Total change in Net Income $50,500
3. Replacing the old machine with alternative B will result in an increased income of $50,500 so it is a good option.
Beginning inventory, purchases, and sales data for hammers are as follows:
Mar. 3 Inventory 12 units at $15
11 Purchase 13 units at $17
14 Sale 18 units
21 Purchase 9 units at $20
25 Sale 10 units
Assuming the business maintains a perpetual inventory system, complete the subsidiary inventory ledger and calculate the cost of merchandise sold and ending inventory under the following assumptions:
(a) First-in, first-out
Purchases Cost of Merchandise Sold Inventory
Date Qty Unit Total Qty Unit Total Qty Unit Total
Cost Cost Cost Cost Cost Cost
Mar. 3
11
14
21
25
Balances
Cost of merchandise sold $
Ending Inventory $
(b) Last-in, first-out
Purchases Cost of Merchandise Sold Inventory
Date Qty Unit Total Qty Unit Total Qty Unit Total
Cost Cost Cost Cost Cost Cost
Mar. 3
11
14
21
25
Balances
Cost of merchandise sold $
Ending Inventory $
Answer:
a) under FIFO
COGS = $461
ending inventory = $120
b) under LIFO
COGS = $491
ending inventory = $90
Explanation:
inventory:
March 3 Inventory 12 units at $15
March 11 Purchase 13 units at $17
March 14 Sale 18 units
March 21 Purchase 9 units at $20
March 25 Sale 10 units
under FIFO COGS:
March 14
Dr Cost of goods sold 282
Cr Merchandise inventory 282
March 25
Dr Cost of goods sold 179
Cr Merchandise inventory 179
under LIFO COGS:
March 14
Dr Cost of goods sold 296
Cr Merchandise inventory 296
March 25
Dr Cost of goods sold 195
Cr Merchandise inventory 195
Cheyenne Corp. had the following transactions during the current period.
Mar. 2 Issued 4,000 shares of $4 par value common stock to attorneys in payment of a bill for $21,200 for services performed in helping the company to incorporate.
June 12 Issued 56,400 shares of $4 par value common stock for cash of $305,500.
July 11 Issued 1,950 shares of $100 par value preferred stock for cash at $130 per share.
Nov. 28 Purchased 2,560 shares of treasury stock for $78,500.
Journalize the transactions.
Answer:
Mar. 2 Issued 4,000 shares of $4 par value common stock to attorneys in payment of a bill for $21,200 for services performed in helping the company to incorporate.
Dr Incorporation expenses 21,200
Cr Common stock 16,000
Cr Additional paid in capital - common stocks 5,200
June 12 Issued 56,400 shares of $4 par value common stock for cash of $305,500.
Dr Cash 305,500
Cr Common stocks 225,600
Cr Additional paid in capital - common stocks 79,900
July 11 Issued 1,950 shares of $100 par value preferred stock for cash at $130 per share.
Dr Cash 253,500
Cr Preferred stocks 195,000
Cr Additional paid in capital - preferred stocks 58,500
Nov. 28 Purchased 2,560 shares of treasury stock for $78,500.
Dr Treasury stocks 78,500
Cr Cash 78,500
Treasury stocks account is a contra equity account which decreases the value of stockholders' equity.
Jiminy’s Cricket Farm issued a 30-year, 6 percent semiannual bond three years ago. The bond currently sells for 93 percent of its face value. The company’s tax rate is 22 percent. a. What is the pretax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the aftertax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer:
a. What is the pretax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
6.46%b. What is the aftertax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
5.04%Explanation:
we must first determine the bond's yield to maturity:
YTM = {coupon + [(face value - market value)/n]} / [(face value + market value)/2] = {30 + [(1,000 - 930)/60]} / [(1,000 + 930)/2] = 31.17 / 965 = 3.23% x 2 = 6.46%
after tax cost of debt = 6.46% x (1 - tax rate) = 6.46% x (1 - 22%) = 6.46% x 78% = 5.04%
Cullumber Company reports the following operating results for the month of August: sales $382,500 (units 5,100), variable costs $247,000, and fixed costs $96,000. Management is considering the following independent courses of action to increase net income.
1. Increase selling price by 12% with no change in total variable costs or units sold.
2. Reduce variable costs to 57% of sales.
Compute the net income to be earned under each alternative.
1. Net Income $enter a dollar amount
2. Net Income $enter a dollar amount
Answer:
Instructions are below.
Explanation:
Giving the following information:
Sales $382,500 (units 5,100)
Variable costs $247,000
Fixed costs $96,000
We need to determine the effect on the income of two options:
Option 1:
Increase the selling price by 12%
Sales= 382,500*1.12= 428,400
Variable cost= (247,000)
Contribution margin= 181,400
Fixed costs= (96,000)
Net income= $85,400
Option 2:
Reduce variable costs to 57% of sales
Contribution margin= (382,500*0.43)= 164,475
Fixed costs= (96,000)
Net income= $68,475
A job was timed for 60 cycles and had an average of 1.2 minutes per piece. The performance rating was 95%, and workday allowances are 10 percent. Determine each of the following:
a. Observed time.
b. Normal time.
c. Standard time.
Answer and Explanation:
The computation is shown below:
a) Observation time is
= Average time
= 1.2 minutes
b) The Normal time is
= Observation time × performance rating
= 1.2 minutes × 0.95
= 1.14 minutes
3. The standard time is
= normal time × Allowance factor
where,
Normal time is 1.14 minutes
And, the Allowance factor is
= 1 ÷ (1- A)
= 1 ÷ (1- 0.1)
= 1.11
So, the standard time is
= 1.14 × 1.11
= 1.265 minutes.
A stock has a variance of 0.02468, a current price of $28 a share, and an average rate of return of 14.4 percent. How is the coefficient of variation (CoV) computed
Answer: 1.09
Explanation:
Coefficient of Variation (CoV) is calculated by the formula;
= [tex]\frac{Standard Deviation}{Expected Return}[/tex]
The Variance is given. Standard Deviation is;
= √Variance
= √0.02468
= 0.15709869509
Coefficient of Variation is therefore;
= [tex]\frac{0.15709869509}{0.144}[/tex]
= 1.09096316037
= 1.09
Kelly Woo, owner of Flower Mode, operates a local chain of floral shops. Each shop has its own delivery van. Instead of charging a flat delivery fee, Woo wants to set the delivery fee based on the distance driven to deliver the flowers. Woo wants to separate the fixed and variable portions of her van operating costs so that she has a better idea how delivery distance affects these costs. She has the following data from the past seven months:_______.
LOADING...
(Click the icon to view the data.)
Use the high-low method to determine
Flower Paradise's cost equation for van operating costs. Use your results to predict van operating costs at a volume of 15,000 miles.
Let's begin by determining the formula that is used to calculate the variable cost (slope).
Change in cost / Change in volume = Variable cost (slope)
Now determine the formula that is used to calculate the fixed cost component.
Total operating cost - Total variable cost = Fixed cost
Use the high-low method to determine
Flower Paradise's operating cost equation. (Round the variable cost to the nearest cent and the fixed cost to the nearest whole dollar.)
y = $
x + $
Enter any number in the edit fields and then click Check Answer.
Data Table
Month Miles Driven Van Operating Costs
January. . . . . .
. . . . . . . . . 15,500 $5,390
February. . . . . . .
. . . . . . . . 17,400 $5,280
March. . . . . . . . .
. . . . . . . . 15,400 $4,960
April. . . . . . . . .
. . . . . . . 16,300 $5,340
May. . . . . . . .
. . . . . . . . 16,500 $5,450
June. . . . . . . .
. . . . . . . . 15,200 $5,230
July. . . . . . . . .
. . . . . . . . . . 14,400 $4,680
Answer:
Use the high-low method to determine Flower Paradise's cost equation for van operating costs.
y = $ 0.20x + $1,800
Use your results to predict van operating costs at a volume of 15,000 miles.
y = ($0.20 x 15,000) + $1,800 = $4,800
Explanation:
Month Miles Driven Van Operating Costs
January 15,500 $5,390
February 17,400 $5,280
March 15,400 $4,960
April 16,300 $5,340
May 16,500 $5,450
June 15,200 $5,230
July 14,400 $4,680
In order to calculate the fixed and variable costs using the high-low method, we must take the month with the highest activity (February) and the month with the lowest activity (July):
variable costs = ($5,280 - $4,680) / (17,400 - 14,400) = $600 / 3,000 = $0.20 per mile driven
fixed costs = $4,680 - (14,400 x $0.20) = $4,680 - $2,880 = $1,800
The CEO has given her secretary this material for a memo, but it is highly un-organized. Rewrite the memo so that the main point is first, that the memo flows in a much more logical order. Delete information not relevant to the main idea. Use strong subjects and verbs -- in other words, employ the principles we talked about in the lesson on writing.
To employees at a call center
I’m hoping you can send out a memo for me to all phone operators. As you might or might not be aware of, we’ve had some problems lately with operators asking for breaks, or simply taking them, at all sorts of time during their shift. While we are happy to be flexible, we do have a job to do and must have a certain amount of operators manning the phones at all times. Several times the phones have rung and rung with not enough people to answer them. Several supervisors have complained to me that their people have argued with them about combining their breaks and meal break to get an hour at one time. I feel like I need to put my foot down so that each supervisor doesn’t have to make their own decision. We need to remind folks of our policy on breaks and meal breaks through the day. Remind telephone operators that they should take the two 15 minute breaks allotted to them generally about halfway through a four-hour work period. If they want or need to take a break during another time, they should talk with their supervisor. But let folks know this should be under extraordinary circumstances. Stress that these should be extraordinary circumstances so we can count on enough people to be on the phones through the day. Meal breaks should be taken roughly halfway through their shift, but they should be coordinated with their supervisor. Several times, we’ve lost folks we were counting on, only to find that they were on break. Phone operators can stay at their desks and work on personal business, or simply each lunch, as long as they are not tying up resources. We’d prefer, though, that they go to the break rooms or leave their cubicles. We don’t want people to create the perception that they’re doing personal tasks during work time. I often eat at my desk but of course I’m not salaried employee. Oh, and we don’t want folks saving up their breaks and leaving work early. We need to staff our phones from 8 a.m. to 8 p.m. Our staggered schedule allows us to do that, but not if folks create their own schedules. Do people have to take their breaks? Yes, they do -- federal law mandates it. So tell them they just can’t skip the breaks, though why they’d want to I don’t know. By the way, it looks like we’ll be hiring in the new fiscal year, as we go ahead with that expansion into the Southeast. Should be about 20 to 25 new phone operators.
Answer:
TO EMPLOYEES AT A CALL CENTER
It is my aim to send out a memo to you all phone operators. As you might or might not be aware of, we have faced series of problems lately with operators asking for breaks, or simply taking them without express permission which ended up clashing with their shift time for work. While we are happy to be flexible, we need to remind you of our policy on breaks and meal breaks through the day.
Most times,when a call came in, there will be no one to attend to it. Several supervisors have tabled the complaints of their team members, about combining their normal breaks and meal break in-order to get an hour at one time. Despite being a noble suggestion, the employees and their supervisor should remember that, the working condition was explicitly stated in the contract agreement they signed before taking this job.
In a situation were there is extraordinary condition, the call operators should liaised with their supervisor and discuss about the need to take extra break time. Meal breaks should be taken roughly halfway through their shift, which should be under strict coordination by their supervisor. Phone operators can stay at their desks and work on personal business, or simply each lunch, as long as they are not tying up resources.
We would prefer, though, that they go to the break rooms or leave their cubicles. We don’t want people to create the perception that they’re doing personal tasks during work time. We need to staff our phones from 8 a.m. to 8 p.m. Our staggered schedule allows us to do that, but not if folks create their own schedules. Do people have to take their breaks? Yes, they do -- federal law mandates it. By the way, it looks like we will be hiring in the new fiscal year, as we go ahead with that expansion into the Southeast. Should be about 20 to 25 new phone operators.
Explanation:
The Apple stock’s price is $112.92 on 8/1/15 and becomes $110.30 on 9/1/15. In August, Apple gives a dividend of $0.52 per share. What is the holding period monthly return for Apple in August?
Answer:
The holding period monthly return for Apple in August is -2.00%.
Explanation:
Holding period return (HPR) refers to total return that is received by an investor when he holds an asset or portfolio of assets over a period of time.
The holding period return is generally expressed as a percentage can be estimated using the following formula:
HPR = [Income + (P1 - Po)] / Po ....................... (1)
Where;
Income = Dividend = $0.52
P1 = End-of-period value = $110.30
Po = Initial value = $112.92
Substituting the values into equation (1), we have:
HPR = [$0.52 + ($110.30 - $112.92)] / $112.92
HPR = [$0.52 - $2.62] / $112.92
HPR = -$2.10 / $112.92
HPR = -0.02, or -2.00%
Therefore, the holding period monthly return for Apple in August is -2.00%.
MONTGOMERY INC.
Comparative Balance Sheets
December 31
Current Year Prior Year
Assets
Cash $ 30,800 $ 31,000
Accounts receivable, net 8,900 10,900
Inventory 79,800 63,000
Total current assets 119,500 104,900
Equipment 44,200 37,300
Accum. depreciation—Equipment (19,900) (13,800)
Total assets $ 143,800 $ 128,400
Liabilities and Equity
Accounts payable $ 21,200 $ 22,900
Salaries payable 400 500
Total current liabilities 21,600 23,400
Equity
Common stock, no par value 102,400 94,100
Retained earnings 19,800 10,900
Total liabilities and equity $ 143,800 $ 128,400
MONTGOMERY INC.
Income Statement
For Current Year Ended December 31
Sales $ 38,500
Cost of goods sold (16,000)
Gross profit 22,500
Operating expenses
Depreciation expense $ 6,100
Other expenses 4,700
Total operating expense 10,800
Income before taxes 11,700
Income tax expense 2,800
Net income $ 8,900
Additional Information on Current-Year Transactions
1. No dividends are declared or paid.
2. Issued additional stock for $8,300 cash.
3. Purchased equipment for cash; no equipment was sold.
Use the above information to prepare a statement of cash flows for the current year using the indirect method. (A
Answer:
Montgomery Inc.
Statement of Cash Flow, using the indirect method:
Net income $ 8,900
adjusting non-cash expense:
Depreciation 6,100
Net Cash from operations $15,000
Add: Working Capital:
Accounts receivable (2,000)
Inventory (16,800)
Accounts Payable (1,700)
Salaries payable (100)
Cash from operating activities ($5,600)
Investing Activities:
Purchase of Equipment (6,900)
Financing Activities:
Issue of additional stock 8,300
Net cash flow $4,200
Explanation:
MONTGOMERY INC. Comparative Balance Sheets
December 31
Current Year Prior Year
Assets
Cash $ 30,800 $ 31,000
Accounts receivable, net 8,900 10,900
Inventory 79,800 63,000
Total current assets 119,500 104,900
Equipment 44,200 37,300
Accum. depreciation: Equipment (19,900) (13,800)
Total assets $ 143,800 $ 128,400
Liabilities and Equity
Accounts payable $ 21,200 $ 22,900
Salaries payable 400 500
Total current liabilities 21,600 23,400
Equity
Common stock, no par value 102,400 94,100
Retained earnings 19,800 10,900
Total liabilities and equity $ 143,800 $ 128,400
MONTGOMERY INC.
Income Statement
For Current Year Ended December 31
Sales $ 38,500
Cost of goods sold (16,000)
Gross profit 22,500
Operating expenses
Depreciation expense $ 6,100
Other expenses 4,700
Total operating expense 10,800
Income before taxes 11,700
Income tax expense 2,800
Net income $ 8,900
b) The indirect method of preparing the statement of cash flows starts with the net income and uses the balances in the balance sheet to determine if they are net cash outflows or inflows.
An example of a societal ___________ is Germans' lack of interest in using credit cards like Visa and MasterCard, perhaps in part because the German word for 'debt' is the same as the word guilt.
Answer: values
Explanation:
Societal values can simply be defined as the moral principles defined by the traditions, society dynamics, and cultural beliefs.
These values impact on the behavior of the people. An example is Germans' lack of interest in using credit cards like Visa and MasterCard, because the German word for 'debt' is the same as the word guilt. This hae to do with their belief and values.
The payroll clerk and the purchasing agent working for a factory are not technically part of the manufacturing industry. True False
Answer:False
Explanation:
It wouldn’t run with out them
If Piper Manufacturing manufactures one unique set of stack pipes, and the sell price is $121,000, the variable costs per unit are $62,000, and the fixed costs are $500,000, what is the break-even point in units
Answer:
8.47
Explanation:
The formula to calculate the break-even point in units is:
Break-even point in units=Fixed costs/(Selling price per unit-Variable cost per unit)
Fixed costs= $500.000
Selling price per unit= $121,000
Variable cost per unit= $62,000
Break-even point in units=$500,000/($121,000-$62,000)
Break-even point in units=$500,000/59,000
Break-even point in units=8.47
According to this, the break-even point in units is 8.47.
Pet Stop Inc., a pet wholesale supplier, was organized on May 1. Projected sales for each of the first three months of operations are as follows: May $380,000 June 420,000 July 580,000 All sales are on account. Of sales on account, 51% are expected to be collected in the month of the sale, 44% in the first month following the sale, and the remainder in the second month following the sale. Prepare a schedule indicating cash collections from sales for May, June, and July.
Answer:
Results are below.
Explanation:
Giving the following information:
May $380,000 June 420,000 July 580,000
All sales are on account. Of sales on account, 51% are expected to be collected in the month of the sale, 44% in the first month following the sale, and the remainder in the second month following the sale.
We need to calculate the cash collection for May, June, and July.
Cash collection May:
Sales on account from May= 380,000*0.51= 193,800
Cash collection June:
Sales on account from May= 380,000*0.44= 167,200
Sales on account from June= 420,000*0.51= 214,200
Total cash collection= $381,400
Cash collection July:
Sales on account from May= 380,000*0.09= 34,200
Sales on account from June= 420,000*0.44= 184,800
Sales on account from July= 580,000*0.51= 295,800
Total cash collection= $514,800
Learning by doing suggests that: Multiple Choice greater experience increases production costs. greater experience increases efficiency. diminishing marginal productivity occurs more rapidly.
Answer:
greater experience increases efficiency.
Explanation:
In Business management, Learning by doing suggests that greater experience increases efficiency.
Learning by doing can be defined as the process which involves different individuals making use or an application of their experiences, especially the experiences they acquired by actively engaging in the production, tasks or projects.
Additionally, when significant externalities are actively associated with learning by doing, the level or quantity and quality of production will become sufficiently great and result in an increased returns to scale as more sales and profit would be made by the organization.
It is a good concept and strategy which helps organizations to break even and to meet their goals, aim and objectives.
you texpect to receive a payout from a trust fund in 3 years. The payout will be for $11000. You plan to invest the money at an annual rate of 6.5 percent until the account is worth $19000. how many years do you have to wait from today?
Answer:
11.68 years
Explanation:
For computing the number of years first we have to applied the NPER formula i.e to be shown in the attachment below:
Given that,
Present value = $11,000
Future value = $19,000
Rate of interest = 6.5%
PMT = $0
The formula is shown below:
= NPER(Rate;PMT;-PV;FV;type)
The present value come in negative
So, after applying the above formula, the number of years is 8.68
Now after 3 years, it would be
= 8.68 + 3
= 11.68 years
We need 25000 units per year. Two suppliers for those units have provided us their quotes. The order cost is $300 per order and holding cost is $30 per unit per month. a.) What is the economic order quantity
Answer:
EOQ = 204.124 rounded off to 204 units
Explanation:
The EOQ or economic order quantity is the optimal order quantity that a company should order every time in order to minimize the inventory related costs such as holding, ordering and shortage/stock out costs. The formula o calculate EOQ is attached.
Holding cost per unit per annum = 30 * 12 = $360
EOQ = √(2 * 25000 * 300) / 360
EOQ = 204.124 rounded off to 204 units
Harper Company lends Hewell Company $58,800 on March 1, accepting a four-month, 7% interest note. Harper Company prepares financial statements on March 31. What adjusting entry should be made before the financial statements can be prepared
Answer and Explanation:
The adjusting entry made is shown below:
Interest receivable Dr. $343 ($58,800 × 7% × 1 months ÷ 12 months)
To Interest revenue $343
(Being the interest receivable is recorded)
For recording this we debited the interest receivable as it increased the assets and credited the interest revenue as it also increased the revenue so that the proper journal entry entry is recorded and posting too
Find an example of a company's aggregate planning strategy. You can use the strategy from the firm where you currently work or where you have worked in the past; you can conduct an Internet search or use the Hunt Library resources.
Explanation:
An aggregate planning strategy can be defined as the implementation of new strategic action plans used in a company whose objective is to balance supply and demand through the implementation of material resources, sales, promotions, products, etc.
This planning occurs in the short term, and is usually carried out when a company has the capacity to meet a certain market offer, such as consumer demand for an innovative product.
Aggregated planning is a good strategy when the company considers maximizing its profits, so in order to achieve the expected result, market demand must be thoroughly analyzed, the company's operational capacity, risks, budget and other essential variables.
A soft drink factory for example can carry out a promotional campaign in the style buy 1 light 2 to increase its demand, therefore you must be aware that your productive force will be able to meet the demand, in addition to analyzing the strategic results in order to ascertain the effectiveness planning.
Suppose Emilio offers you $500 today or $X in 10 years. If the interest rate is 6 percent, then at what value of X would you be indifferent between the two options
This question is impossible and implausible
Who is Emilio? How do we know he'll be around in 10 years? IS he good for the money, or is it counterfeit? Are we adjusting for inflation? The dollar is worth more in Malaysia than the U.S., so where are we starting and where are we ending? There's just not enough data here.
"How much would an investor expect to pay for a $1,000 par value bond with a 9% annual coupon that matures in 5 years if the interest rate is 5%
Answer:
The answer is $1,173.18
Explanation:
N(Number of periods) = 5 years
I/Y(Yield to maturity) = 5percent
PV(present value or market price) = ?
PMT( coupon payment) = $90 ( 9percent x $1,000)
FV( Future value or par value) = $1,000.
We are using a Financial calculator for this.
N= 5; I/Y = 5; PMT = 90; FV= $1,000; CPT PV= -1,173.18
Therefore, the market price of the bond is $1,173.18
AB Builders, Inc., has 17-year bonds outstanding with a par value of $2,000 and a quoted price of 94.863. The bonds pay interest semiannually and have a yield to maturity of 7.07 percent. What is the coupon rate
Answer:
13.47%
Explanation:
yield to maturity = {coupon + [(face value - market value)/n]} / [(face value + market value)/2]
7.07% = {coupon + [($2,000 - $1,897.26)/34]} / [($2,000 + $1,897.26)/2]
7.07% = (coupon + $3.0218) / $1,948.63
coupon + $3.0218 = $1,948.63 x 7.07% = $137.7681
coupon = $137.7681 - $3.0218 = $134.7463
semiannual coupon rate = $134.7463 / $2,000 = 0.06737 x 2 = 0.1347 ≈ 13.47%
Which of the following is the easiest but least accurate of the commonly used methods for allocating support department costs to production departments?
A. Sequential method
B. Activity-based management method
C. Reciprocal services method
D. Direct method
Answer:
D. Direct method
Explanation:
Cost allocation in financial accounting can be defined as the process of identifying, gathering and assigning of cost across multiple cost objects such as products, inventory or departments.
There are various types of cost allocation methods and these are;
1. Sequential method.
2. Activity-based management method.
3. Reciprocal services method.
4. Direct method.
The direct method is an allocation method for cost, where costs of the production service department are directly allocated to the production (operating) department of a firm or business entity using appropriate allocation base and then allocated to the product itself.
Generally, the direct method is the easiest (simplest) but least accurate of the commonly used methods for allocating support department costs to production departments.