Answer:
$144 unfavorable
Explanation:
The computation of the overall fixed manufacturing overhead volume variance for the month is shown below:
But before that following calculations need to be done
Budgeted manufacturing overhead is
= 6600 × $1.20
= $7,920
And,
Manufacturing overhead applied is
= Standard hours × Predetermined overhead rate
= 6480 × $1.20 = $7,776
So, fixed manufacturing overhead volume variance is
= Fixed overhead applied - budgeted fixed overhead
= $7,776 - $7,920
= $144 unfavorable
Your bank card has an APR of 21% and there is a 3% fee for cash advances. The bank starts charging interest on cash advances immediately. You get a cash advance of $500 on the first day of the month. You get your credit card bill at the end of the month. What is the approximate total finance charge you will pay on this cash advance for the month
Answer:
Total finance charge=$23.75
Explanation:
The amount charged for the use of the fund by a bank is called interest rate. Here it is quoted as 21% per annum but we will need to determine the approximate monthly rate by dividing by 12.
The total finance charge will be equal = Interest rate + advance fee
Monthly interest rate = 21/12 =1.75%
Interest payment = 1.75%× $500=$8.75
Advance fee = 3%× $500= $15
Total finance charge = $8.75 + $15= $23.75
Total finance charge=$23.75
A company purchased $2,900 of merchandise on July 5 with terms 1/10, n/30. On July 7, it returned $500 worth of merchandise. On July 8, it paid the full amount due. The amount of the cash paid on July 8 equals:
Answer: $2376
Explanation:
Based on the information given in the question, the amount of the cash paid on July 8 will be calculated as the difference between the net sales and the discount.
Net sales = $2900 - $500 = $2400
Discount = $2400 × 1% = $24
Therefore, The amount of the cash paid on July 8 will be:
= $2400 - $24
= $2376
As the new profit center manager, you switch carriers to a more expensive, but quicker, more responsive transportation carrier. You justify this because when using a(n) ____________ perspective, your overall inventory and warehouse savings more than offset the increase in transportation costs. Group of answer choices lane operations economic order quantity total cost ABC
Answer:
You justify this because when using a(n) _____ABC_____ perspective, your overall inventory and warehouse savings more than offset the increase in transportation costs.
Explanation:
The ABC perspective allocates overhead costs based on the cost drivers and the level of activity consumed by each cost driver. This is the best cost allocation basis. ABC is justified by the fact that activities consume resources or cause costs to be incurred. As a profit center manager, your focus should be on minimizing the activities that drive up costs instead of just focusing on mere cost reduction without paying attention to the cost drivers.
Cornerstone Exercise 9-41 Ratio Analysis Red Corporation had $1,750,000 in total liabilities and $3,000,000 in total assets as of December 31, 2020. Of Red's total liabilities, $600,000 is long-term. Required: Calculate Red's debt to assets ratio and its long-term debt to equity ratio. Round your answers to four decimal places, if required. Debt to Total Assets fill in the blank 1 Long-Term Debt to Total Equity fill in the blank 2
Answer:
A. Debt to Total Assets ratio 0.5833 times
B. Long Term Debt to Total Equity Ratio 0.48 times
Explanation:
A. Calculation for Red's debt to assets ratio using this formula
Debt to Total Assets ratio = Total Liabilities/
Total Assets
Let plug in the formula
Debt to Total Assets ratio=$1,750,000/$3,000,000
Debt to Total Assets ratio=0.5833 times
Therefore the Debt to Total Assets ratio will be 0.5833 times
B. Calculation to determine its long-term debt to equity ratio
First step is to calculate the Shareholders’ Equity using this formula
Shareholders’ Equity = Total Assets – Total outside liabilities
Let plug in the formula
Shareholders’ Equity = $3,000,000-$1,750,000 Shareholders’ Equity =$1,250,000
Now let calculate the Long Term Debt to Total Equity Ratio using this formula
Long Term Debt to Total Equity Ratio = Long Term Debt/ Total Shareholder’s equity
Let plug in the formula Long Term Debt to Total Equity Ratio=$600,000/$1,250,000
Long Term Debt to Total Equity Ratio= 0.48 times
Therefore Long Term Debt to Total Equity Ratio will be 0.48 times
Topic: How Banks Create Money
Skill: Definition
33) Suppose the required reserve ratio is 20%, A $40 million cash deposit will, at most, allow an
expansion of the money supply to
Answer:
$200 million
Explanation:
Increase in the total value of checkable deposit is determined by the money multiplier
Money multiplier = amount deposited /required reserve requirement
Required reserve requirement is the percentage of deposits required of banks to keep as reserves by the central bank
$40 million / 0.2 = $200 million
AN IMPLIED CONTRACT CAN BEST BE DEFINED AS: WILL NOT BE RECOGNIZED AS ENFORCEABLE BY THE COURTS A TRUE FORM OF A FORMAL CONTRACT THE INTENTIONS OF THE PARTIES ARE INFERRED FROM THEIR CONDUCT BY THE COURT AS WELL AS THE CIRCUMSTANCES OF THE CONTRACT WHICH EXISTS IN THE EYES OF THE LAW, EVEN THOUGH THE PARTIES HAVE NOT IN ANY WAY INTENDED TO FORM THE CONTRACT
Answer: the intentions of the parties is inferred from their conduct by the court as well as the circumstances of the contract
Explanation:
An implied contract is referred to as an agreement that's legally-binding which was created due to the actions, or circumstances of the parties that were involved.
In an implied contract, the parties typically possess no written contract, but an obligation is created by the law based on the conduct of the parties involved.
You won the lottery when the jackpot was $3,300,000 (annual payments of $165,000 paid for 20 years). Your choice is to take the annual payments for 20 years or take the lump sum payout today. The lottery administration uses a 4% interest rate. What is the value of the lump sum payout
Answer:
Lump sum= $2,242,403.85
Explanation:
First, we need to calculate the future value of the annual payments using the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual payment
FV= {165,000*[(1.04^20) - 1]} / 0.04
FV= $4,913,382.97
Now, the lump sum is the present value of the annual payments:
PV= FV / (1 + i)^n
PV= 4,913,382.97 / (1.04^20)
PV= $2,242,403.85
Prepare journal entries to record the following four separate issuances of stock.
1. A corporation issued 4,000 shares of $30 par value common stock for $144,000 cash.
2. A corporation issued 2,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $39,000. The stock has a $2 per share stated value.
3. A corporation issued 2,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $39,000. The stock has no stated value.
4. A corporation issued 1,000 shares of $50 par value preferred stock for $89,000 cash.
Answer:
Item 1
Debit : Cash $144,000
Credit : Common Stock $120,000
Credit : Common Stock Paid in Excess of Par $24,000
Item 2
Debit : Cash $39,000
Credit : Common Stock $39,000
Item 3
Debit : Cash $39,000
Credit : Common Stock $39,000
Item 4
Debit : Cash $89,000
Credit : Preferred Stock $50,000
Credit : Preferred Stock paid in excess of par $39,000
Explanation:
Take a careful note on Par value Stocks and No Par Value Stocks. A reserve is created whenever Stocks are issued above their Par Value.
Chris invests a total of $19,000 in two accounts. The first account earned a rate of return of 13% (after a year). However, the second account suffered a 2% loss in the same time period. At the end of one year, the total amount of money gained was $1,495.00. How much was invested into each account
Answer:
Amount invested in account with 13% return = $12499.97 rounded off to 12500
Amount invested in account with -2% return = 6500.03 rounded off to 6500
Explanation:
To calculate the amount invested in each account, we must first calculate the total return earned by Chris as a percentage of his investment.
Total Return/gain = 1495 / 19000 = 0.078684 or 7.8684%
To calculate the overall return, we must use the weighted average of returns provided by each account. The weighted average can be calculated as follows,
Average Overall Return = wA * rA + wB * rB
Where,
w represents the weight of investment in each account as a percentage of overall investmentr represents the return provided by each accountLet weight of investment in account that provided 13% return be x
Let weight of investment in account that provided -2% return be (1 - x)
0.078684 = x * 0.13 + (1-x) * -0.02
0.078684 = 0.13x - 0.02 + 0.02x
0.078684 + 0.02 = 0.15x
x = 0.098684 / 0.15
x = 0.65789333333 or 65.789333333%
Amount invested in account with 13% return = 19000 * 65.789333333%
Amount invested in account with 13% return = $12499.97 rounded off to 12500
Amount invested in account with -2% return = 19000 * (1 - 65.789333333%)
Amount invested in account with -2% return = 6500.03 rounded off to 6500
Following a systematic plan for the preparation of an e-mail, memo, letter, or oral presentation will make the composition process easier and will help you create more effective business messages. The writing process for business messages includes prewriting, drafting, and revising. Which of the following are steps involved in the prewriting phase of the writing process? Check all that apply. Analyzing Drafting Anticipating Researching Adapting Editing
Answer: Analyzing
Anticipating
Adapting
Explanation:
The writing process for business messages includes prewriting, drafting, and revising. We should note that the steps involved in the prewriting phase of the writing process:
• Analyzing
• Anticipating
• Adapting
The drafting phase is made up of:
• Researching
• Organizing
• Drafting
The revising phase include:
• Editing
• Proofreading
• Evaluating
Paola and Isidora are married; file a joint tax return; report modified AGI of $148,000; and have one dependent child, Dante. The couple paid $12,000 of tuition and $10,000 for room and board for Dante (a freshman). Dante is a full-time student and claimed as a dependent by Paola and Isidora. Determine the amount of the American Opportunity credit for 2020.
Answer:
$2,500
Explanation:
The computation of the amount is shown below;
In the case when the modified AGI upto $180,000 so it would be credit by $2,500 per eligible student
As we can see that in the given situation there is modified AGI that reported $148,000 so here the amount of the American Opportunity credit for 2020 is $2,500 also we assume that the eligibility condition would be satisfied
Pettijohn Inc. The balance sheet and income statement shown below are for Pettijohn Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over. Refer to the data for Pettijohn Inc. What is the firm's dividends per share
Answer:
The appropriate solution is "$2.91". A further explanation is given below.
Explanation:
Seems that the given question is incomplete. Below is the attachment of the full problem.
According to the question,
Common dividend,
= 509.83
Shares outstanding,
= 175
Now,
The dividend per share will be:
= [tex]\frac{Common \ dividend}{Shares \ outstanding}[/tex]
On substituting the values, we get
= [tex]\frac{509.83}{175}[/tex]
= [tex]2.9133[/tex]
or,
= [tex]2.91[/tex]
Assume today is December 31, 2019. Imagine Works Inc. just paid a dividend of $1.25 per share at the end of 2019. The dividend is expected to grow at 15% per year for 3 years, after which time it is expected to grow at a constant rate of 6% annually. The company's cost of equity (rs) is 9.5%. Using the dividend growth model (allowing for nonconstant growth), what should be the price of the company's stock today (December 31, 2019)
Answer:
Value of stock = $47.99
Explanation:
The price of a stock using the dividend valuation model is the present value of the the future dividend expected from the stock discounted at the required rate of return.
Year Present Value
1 1.25× 1.15^1 × 1.095^(-1) =1.31
2 1.25× 1.15^2 × 1.095^(-2) = 1.38
3. 1.25× 1.15^3 × 1.095^(-3)= 1.45
Present value of Dividend in Year 4 and beyond
This will be done in two steps
Step 1
PV in year 3 terms
= Dividend in year 4× (1.06)/(0.095-0.06)
1.25× 1.15^3 × 1.06/(0.095-0.06)=57.57
PV in year 0 terms =
PV in year 3 × 1.095^(-3)
=57.5759 × 1.095^(-3)= 43.852
Value of stock = 1.3 + 1.38 + 1.45 + 43.852= $47.99
Value of stock = $47.99
g Pix Company has the following production data for March: no beginning work in process, units started and completed 29,000, and ending work in process 3,300 units that are 100% complete for materials and 40% complete for conversion costs. Pix uses the FIFO method to compute equivalent units. If unit materials cost is $7 and unit conversion cost is $10. The total costs to be assigned are $529,300, prepare the cost section of the production cost report for Pix Company using the FIFO approach.
Answer:
Pix Company
Production cost report - extract
Outputs
Units Costs
Costs assigned to completed units 29,000 $493,000
Units Still in Process 3,330 $36,630
Total 32,330 $529,630
Explanation:
Step 1 : Equivalent Units of Production
Materials
To Finish Work in Process 0
Started and Completed (29,000 x 100%) 29,000
Ending Work in Process (3,330 x 100%) 3,330
Equivalent units of Production in Materials 32,330
Conversion Costs
To Finish Work in Process 0
Started and Completed (29,000 x 100%) 29,000
Ending Work in Process (3,330 x 100%) 1,332
Equivalent units of Production in Materials 30,332
Step 2 : Costs assigned to completed units and units still in process
Costs assigned to completed units = Units Completed x total units cost
= 29,000 x $17
= $493,000
Units Still in Process = Materials Cost + Conversion Costs
= 3,330 x $7 + 1,332 x $10
= $36,630
An asset falling under the MACRS five-year class was purchased three years ago for $200,000 (its original depreciation basis). Calculate the cash flows if the asset is sold now at a) $60,000 and b) $80,000. Assume the applicable tax rate is 40 percent.
Answer:
(a) The cash flows is $59,040.
(b) The cash flows is $71,040.
Explanation:
From the Modified Accelerated Cost Recovery System (MACRS) Tables, the depreciation rates for the first 3 years for an asset falling under the MACRS five-year class are 20%, 32% and 19.2%. Therefore, we have:
Accumulated depreciation rate = 20% + 32% + 19.2% = 71.20%
Accumulated depreciation = Cost of the asset * Accumulated depreciation rate = $200,000 * 71.20% = $142,400
Net book value of the asset = Cost of the asset - Accumulated depreciation = $200,000 - $142,400 = $57,600
We can now proceed as follows:
(a) Calculate the cash flows if the asset is sold now at $60,000
Capital gains = Sales proceeds - Net book value = $60,000 - $57,600 = $2,400
Capital gains tax = Capital gains * Tax rate = $2,400 * 40% = $960
Net sales proceeds = Sales proceeds - Capital gains tax = $60,000 - $960 = $59,040
Therefore, the cash flows is $59,040 net sales proceeds.
(b) Calculate the cash flows if the asset is sold now at $80,000
Capital gains = Sales proceeds - Net book value = $80,000 - $57,600 = $22,400
Capital gains tax = Capital gains * Tax rate = $22,400 * 40% = $8,960
Net sales proceeds = Sales proceeds - Capital gains tax = $80,000 - $8,960 = $71,040
Therefore, the cash flows is $71,040 net sales proceeds.
The cash flows is $59,040 and $71,040 when asset are sold at $60,000 and $80,000.
What is MACRS depreciation?MACRS stands for modified accelerated cost recovery system is the depreciation system in the U.S. where the cost of the asset is recovered in a specific period through deduction.
Given:
Asset=$200,000
The depreciation rate for 5 year asset are:20%, 32%, 19.2%, 11.52%, 11.52% and 5.76%
Accumulated depreciation for 3 years=20% + 32% + 19.2% = 71.20%
=asset cost X depreciation rate for 3 years
=$200,000 X 71.20% = $142,400
Net Book value=Asset Cost - Accumulated depreciation
=$200,000 - $142,400
= $57,600
(a)Cash flows if assets sold at $60,000
Capital gains = Sales - Net book value
=$60,000 - $57,600
= $2,400
Capital gains tax = Capital gains X Tax rate
= $2,400 * 40% = $960
Net sales proceeds = Sales proceeds - Capital gains tax
= $60,000 - $960 = $59,040
(b)Cash flows if assets sold at $80,000
Capital gains = Sales - Net book value
= $80,000 - $57,600
= $22,400
Capital gains tax = Capital gains X Tax rate
= $22,400 * 40% = $8,960
Net sales proceeds = Sales proceeds - Capital gains tax
= $80,000 - $8,960 = $71,040
Therefore the above calculation aptly gives the solution.
Learn more about MACRS depreciation here:
https://brainly.com/question/14451358
Pilgrim Industries scheduled its annual sales meeting at Celestial City Resort from January 5-10. In addition to meeting and hotel rooms, the resort was to provide an ice-skating pond for the Pilgrim's annual employee hockey game. In the weeks before the meeting, the resort is hit with its worst heat wave on record. Although hotel and meeting rooms are available, there is no possibility of ice skating at the site. If a court finds that the one of Pilgrim's principal purposes in the agreement was the inclusion of an ice-skating pond, the Pilgrim-Celestial contract could be discharged via the doctrine of:
Answer:
If a court finds that the one of Pilgrim's principal purposes in the agreement was the inclusion of an ice-skating pond, the Pilgrim-Celestial contract could be discharged via the doctrine of:
Frustration of Purpose.
Explanation:
The doctrine of Frustration of Purpose occurs when there is a change of circumstances that is not the fault of either Pilgrim Industries or Celestial City Resort. Since these two parties did not cause the circumstances that made it legally, physically, or commercially impossible to fulfil the contract, the contract can be discharged by the court based on this doctrine. It is also known as Force Majeure.
Softwind Manufacturing anticipates annual sales of 40,000 units and has the following information regarding one of its products: Annual unit sales 40,000 Fixed manufacturing costs $ 22 Variable manufacturing costs 44 Variable selling and administrative costs 16 Fixed selling and administrative costs 8 Desired profit per unit 18 If Softwind uses cost-plus pricing based on absorption manufacturing cost, what is the sales price Softwind will charge for this product
Answer:
Selling price= $84
Explanation:
The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.
The variable costing method incorporates all variable production costs (direct material, direct labor, and variable overhead).
Unitary cost= varaible manufacturing cost + fixed manufacturing cost
Unitary cost= 44 + 22= $66
Selling price= 66 + 18
Selling price= $84
The internal rate of return : (mark all that applies) does not need a required rate to calculate. rule states that a typical investment project with an IRR that is less than the required rate of return should be accepted. is the more sound decision rule when dealing with mutually exclusive projects is the rate that causes the net present value of a project to exactly equal zero. can effectively be used to analyze all investment scenarios.
Answer:
does not need a required rate to calculate
is the rate at which npv is zero
Explanation:
Internal rate of return is an example of capital budgeting method
Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested.
Projects with the IRR greater than the discount rate should be accepted. It means that it is profitable.
Projects with more than one negative cash flow are unsuitable for calculating with IRR. This is because it can lead to multiple IRR, Thus, it not suitable for analysing all investment scenarios.
The net present value is the most preferred capital budgeting method
Other capital budgeting methods includes
1. profitability index = 1 + (NPV / Initial investment)
2. Accounting rate of return = Average net income / Average book value
3. Payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative cash flows
4. Net present value is the present value of after-tax cash flows from an investment less the amount invested.
A process with no beginning work in process, completed and transferred out 84300 units during a period and had 50300 units in the ending work in process inventory that were 20% complete. The equivalent units of production for the period for conversion costs were:
Answer:
$94,360
Explanation:
Calculation to determine what The equivalent units of production for the period for conversion costs were
Equivalent units of production=[$84,300+ ($50,300 * 20% ]
Equivalent units of production=$84,300+$10,060
Equivalent units of production=$94,360
Therefore The equivalent units of production for the period for conversion costs were $94,360
Dream House Builders, Inc. applies overhead by linking it to direct labor. At the start of the current period, management predicts total direct labor costs of $100,000 and total overhead costs of $20,000. On January 31, the direct labor for this job equals $2,700.
Required:
Complete the journal entry.
Answer:
Date Account Title Debit Credit
January 31 Work in Process $540
Factory Overhead $540
Explanation:
Overhead is applies by linking it to direct labor.
Overhead is $20,000 when Direct labor is $100,000.
= 20,000 / 100,000
= 20%
The overhead for this job must therefore be:
= 20% * 2,700
= $540
TaeHwan Company accrues bad debt expense during the year at an amount equal to 3% of credit sales. At the end of the year, a journal entry adjusts the allowance for uncollectible accounts to a desired amount based on an aging of accounts receivable. At the beginning of 2018, the allowance account had a credit balance of $18,000. During 2018, credit sales totaled $480,000 and receivables of $14,000 were written off. The year-end aging indicated that a $21,000 allowance for uncollectible accounts was required. TaeHwan's bad debt expense for 2018 would be:
Answer: $17000
Explanation:
TaeHwan's bad debt expense for 2018 would be calculated as the difference between the desired year end balance and the beginning balance written off. This will be:
= $21000 - ($18000 - $14000)
= $21000 - $4000
= $17000
Therefore, TaeHwan's bad debt expense for 2018 would be $17000.
Which of the following actions should the customer support manager take to best motivate these employees? Share trends in average customer ratings at quarterly staff meetings, emphasizing the importance of customer satisfaction. Each year, hold an award ceremony and give a bonus to the employee who has served the highest volume of customers and the one who has the highest average customer ratings. Track a great deal of data on customer interactions and send it to a consultant for detailed analysis, which can help improve procedures. Place a widget on employees’ computer screens that flashes a happy face every time the average customer wait is less than 2 minutes.
Answer: Place a widget on employees’ computer screens that flashes a happy face every time the average customer wait is less than 2 minutes.
Explanation:
Good emotional display go a long way in encouraging people who work for an organization and it in turn reflects on how well they would treat the customer's. Employees are further encouraged when they are not under excessive pressure by either employer or the customer's but are rather given an environment void of worries, it helps them respond well and carefully. The customer support manager placing a widget on employees’ computer screens that flashes a happy face every time the average customer wait is less than 2 minutes sends a relief message to the employees to carry out their work with ease.
The Miller Manufacturing Company has two divisions. The Cutting Division prepares timber at its sawmills. The Assembly Division prepares the cut lumber into finished wood for the furniture industry. No inventories exist in either division at the beginning of 2019. During the year, the Cutting Division prepared 60,000 cords of wood at a cost of $660,000. All the lumber was transferred to the Assembly Division, where additional operating costs of $6 per cord were incurred. The 600,000 boardfeet of finished wood were sold for $2,500,000. Required: Determine the operating income for each division if the transfer price is $9 per cord.
Answer and Explanation:
The computation of the operating income in the case when the transfer price is $9 per cord
Particular Cutting Assembly
Revenue $540,000 $2,500,000
(60,000 × $9)
Cost of service
Incurred $660,000 $360,000
(60,000 × $6)
Transfered in $0 $540,000
Total $660,000 $900,000
Operating income -$120,000 $1,600,000
Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300. Use the formula method to determine how many cups of coffee would have to be sold to attain target profits of $3,000 per month.
Answer:
See below
Explanation:
The formula method is denoted by
Unit sales to attain the targeted profit =( Target profit + Fixed expenses) / Contribution margin per unit
Target profit = $3,000 per month
Fixed expenses = $1,300
Contribution margin per unit = $1.49 - $0.36 = $1.13
Therefore, unit sales to attain targeted profit = ($3,000 + $1,300) / $1.13 = 3,805.31 units
It means that 3,805.31 cup of coffee would have to be sold to attain target profit of $3,000 per month.
Batista Company management wants to maintain a minimum monthly cash balance of $19,900. At the beginning of April, the cash balance is $19,900, expected cash receipts for April are $244,400, and cash disbursements are expected to be $253,300. How much cash, if any, must be borrowed to maintain the desired minimum monthly balance
Answer:
the amount must be borrowed is $8,900
Explanation:
The computation of the amount must be borrowed is shown below:
Opening cash balance $19,900
Add: cash receipts $244,400
Less: cash disbursements -$253,300
Cash balance after disbursements $11,000
Minimum monthly cash balance $19,900
Amount to be borrowed $8,900
hence, the amount must be borrowed is $8,900
You are on a TV game show and can choose one of the following. Which would you
take?
Home Run Inn began producing frozen pizza in their single restaurant in South Chicago in the 1950s. They did this because their customers wanted this product. Today, businesses use IT to track customer tastes and desires in order to both attract new customers and retain current ones. Today this customer/business interaction is called
Answer:
Customer relationship management
Explanation:
Customer relationship management consists of an organizational strategy whose main objective is to increase brand awareness and value for your potential customer.
When Home Run Inn uses IT strategies to track customer tastes and desires in order to attract new customers and retain current ones, it is having a positive interaction with the consumer, who has their needs and preferences met by the company and thus build a relationship of loyalty with the brand that becomes more competitive and well positioned in the market.
The relationship between client and company is extremely valued today, whose digital age has narrowed this relationship and has made companies much more than profitable entities, but rather as providers of identification, value and satisfaction for the client.
Perfect Patties, Inc. has several divisions. One division provides birthday parties at their facility. Each party sold provides entertainment, decorations, food, and party favors for 10 children. The bookkeeper has prepared a report comparing actual results for the month of June to budgeted results.
Perfect Parties
Birthday Party Division Analysis of Revenues and Costs
For the Month Ended June 30
Planning Budge Actual Results Variances
Number of parties 80 92
Revenue $36,000 $39,560 $3,560 F
Expenses:
Food costs 7,200 8,648 1,448 U
Party supplies 3,200 3404 204 U
Party worker wages 6,400 7,728 1,328 U
Administrative salaries 3,700 3,500 200 F
Equipment depreciation 1,200 1,200 - None
Rent 5,000 5,000 - None
Total expense 26,700 29,480 2,780 U
Net operating income $9,300 10,080 $780 F
Food costs, party supplies, and party worker wages are variable costs.
Administrative salaries, equipment depreciation and rent are fixed costs.
Prepare a new report for June using the flexible budget approach.
Answer:
Perfect Parties, Inc.
Birthday Party Division
Analysis of Revenues and Costs
For the month ended June 30
Flexible Budget Actual Results Variances
Number of parties 80 92
Revenue $41,400 $39,560 $1,840 U
Expenses:
Food costs 8,280 8,648 368 U
Party supplies 3,680 3,404 276 F
Party worker wages 7,360 7,728 368 U
Administrative salaries 3,700 3,500 200 F
Equipment depreciation 1,200 1,200 - None
Rent 5,000 5,000 - None
Total expense 29,220 29,480 260 U
Net operating income $12,180 $10,080 $2,100 U
Explanation:
a) Data and Calculations:
Birthday Party Division Analysis of Revenues and Costs
For the Month Ended June 30
Planning Budget Actual Results Variances
Number of parties 80 92
Revenue $36,000 $39,560 $3,560 F
Expenses:
Food costs 7,200 8,648 1,448 U
Party supplies 3,200 3404 204 U
Party worker wages 6,400 7,728 1,328 U
Administrative salaries 3,700 3,500 200 F
Equipment depreciation 1,200 1,200 - None
Rent 5,000 5,000 - None
Total expense 26,700 29,480 2,780 U
Net operating income $9,300 10,080 $780 F
Flexing the variable revenue and costs:
Revenue $36,000/80 * 92 = $41,400
Food costs 7,200/80 * 92 = $8,280
Party supplies 3,200/80 * 92 = $3,680
Party worker wages 6,400/80 * 92 = $7,360
Cincinnati t-shirts prints custom t-shirts. The cost to produce one shirt is: direct materials, $10; direct labor, $1.20; and manufacturing overhead $4.50. Cincinnati Children’s Hospital asked Cincinnati t-shirt to sell them custom t-shirts for $12 each for a local charity event. Direct material and direct labor are required for each t-shirt. Of the manufacturing overhead, $1.50 is variable and would be incurred on each additional unit. The remaining $3 in overhead is allocated fixed overhead that would not be increased or decreased by this order. What would be the effect on net income if they accept this special order and sell 200 shirts to Cincinnati Children’s Hospital for $12 each?
Answer:
Effect on income= $140 decrease
Explanation:
Giving the following formula:
Production costs:
Direct material= 10
Direct labor= 1.2
Variable overhead= $1.5
Selling price= $12
Number of units= 200
Because it is a special offer and there is unused capacity, we will not take into account the fixed costs.
Effect on income= Units sold*unitary contribution margin
Effect on income= 200*(12 - 10 - 1.2 - 1.5)
Effect on income= $140 decrease
Transformational leaders enhance performance of employees by ________. Group of answer choices Restricting creativity among employees Focusing on short-term goals for employees Instilling pride in employees and gaining their respect and trust Establishing goals, roles, and requirements
Answer:
gaining their respect and trust establishing goals roles and requirements