Answer:
Part 1
Cost of ending inventory calculation :
a. FIFO
b. LIFO
c. weighted average cost
Part 2
Cost of goods sold calculation :
a. FIFO
b. LIFo
c. weighted average cost
Explanation:
Cost of ending inventory calculation :
FIFO
LIFO
weighted average cost
Cost of goods sold calculation :
FIFO
LIFO
weighted average cost
Exercise 7-2 Accounting for credit card sales LO C1 Levine Company uses the perpetual inventory system. Apr. 8 Sold merchandise for $4,500 (that had cost $3,326) and accepted the customer's Suntrust Bank Card. Suntrust charges a 4% fee. 12 Sold merchandise for $4,600 (that had cost $2,981) and accepted the customer's Continental Card. Continental charges a 2.5% fee. Prepare journal entries to record the above credit card transactions of Levine Company. (Round your answers to the nearest whole dollar amount.)
Answer:
See the journal entries below.
Explanation:
We first calculate the following:
Suntrust Credit Card expenses = $4,500 * 4% = $180
Continental Credit Card expenses = $4,600 * 2.5% = $115
The journal entries will therefore look as follows:
Levine Company
Journal Entries
Date General Journal Debit ($) Credit ($)
Apr. 8 Cash (Suntrust Credit Card) 4,320
Credit Card Expense 180
Sales Revenue 4,500
(To record sale of goods using Suntrust Credit Card at 4% fee.)
Cost of Goods Sold 3,326
Merchandise Inventory 3,326
(To record the cost of goods sold.)
Apr. 12 Cash (Continental Credit Card) 4,485
Credit Card Expense 115
Sales Revenue 4,600
(To record sale of goods using Continental credit card at 2.5% fee.)
Cost of Goods Sold 2,981
Merchandise Inventory 2,981
(To record the cost of goods sold.)
Coral Corporation uses a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs). The company has provided the following data for the most recent month: Budgeted level of activity 8,600 machine-hours Actual level of activity 8,800 machine-hours Standard variable manufacturing overhead rate $7.30 per machine-hour Actual total variable manufacturing overhead $61,770 What was the variable overhead rate variance for the month
Answer:
Variable manufacturing overhead rate variance= $2,640 favorable
Explanation:
To calculate the variable overhead rate variance, we need to use the following formula:
Variable manufacturing overhead rate variance= (standard rate - actual rate)* actual quantity
Standard rate= $7.3
Actual rate= 61,770 / 8,800= $7
Actual quantity= 8,800
Variable manufacturing overhead rate variance= (7.3 - 7)*8,800
Variable manufacturing overhead rate variance= $2,640 favorable
The variable overhead rate variance for the month is $2,464.
What is Variable overhead variance?Variable overhead is the difference between actual variable costs, based on the cost of the indirect material involved in the production, and the budgeted costs called the standard variable overhead cost.
The formula for calculation of Variable overhead rate:
[tex]\rm\,Variable\;Manufacturing \;Overhead \; Rate \,Variance= (Standard \; Rate - Actual \; Rate)\times Actual \; Quantity[/tex]
[tex]\rm\,Actual\; Rate = \dfrac{\$61,770}{8,800}\\\\\rm\,Actual\; Rate = \$7.02 \,Overhead \,Rate \, Per\, Machine\, Hour[/tex]
Standard variable manufacturing overhead rate $7.30 per machine-hour.
[tex]\rm\,Variable\;Manufacturing \;Overhead \; Rate \,Variance= (\$7.30 - \$7.02)\times 8,800\\\\ \rm\,Variable\;Manufacturing \;Overhead \; Rate \,Variance= \$2,464[/tex]
Hence, The variable overhead rate variance for the month is equal to $2,464.
To learn more about variable overhead variance, refer to the link:
https://brainly.com/question/4535958
Your sister just deposited $13,500 into an investment account. She believes that she will earn an annual return of 10.4 percent for the next 10 years. You believe that you will only be able to earn an annual return of 9.6 percent over the same period. How much more must you deposit today in order to have the same amount as your sister in 10 years
Answer:
14518.41
Explanation:
We would determine the future value of the sisters investment and use it to determine the amount to be deposited by the other sister
The formula for calculating future value:
FV = P (1 + r) n
FV = Future value
P = Present value
R = interest rate
N = number of years
13500 (1.104)^10 = $36,309.85
$36,309.85 = a(1.096)^10
a = $36,309.85 / 2.500953
a = $14518.41
Sheridan and Miller Manufacturing is trying to determine the equivalent units for conversion costs with 11300 units of ending work in process at 80% completion and 31700 physical units. There are no beginning units in the department. Conversion costs occur evenly throughout the entire production period. What are the equivalent units for conversion costs for the current period? 9040. 29440. 43000. 39625.
Answer:
29440
Explanation:
Calculation to determine the equivalent units for conversion costs for the current period
First step is to calculate the
Uniits completed = 31700 units - 11300 units
Units completed= 20,400 units
Second step is to calculate completed units
Completed units = 11300 × 80%
Completed units= 9040 units
Now let calculate the equivalent units of Conversion using this formula
Equivalent units of Conversion= Units completed + Completed units in ending inventory
Let plug in the t
Equivalent units of Conversion= 20,400 units + 9040 units
Equivalent units of Conversion= 29440 units
Therefore the equivalent units for conversion costs for the current period will be 29440 units
Tennis star Venus Williams has a contract with Nike Corporation to endorse its sports products. The contract includes a morals clause which states that if Venus commits any act that brings widespread contempt, scandal, or ridicule upon herself or Nike the contract can be voided at Nike's sole discretion. The Statement: This is not a valid contract because it has illusory consideration, and there is no mutuality of obligation because Nike can void the contract at its sole discretion.
a. True
b. False
You purchase a bond with 10% annual coupon rate and $1,000 face value. The bond has 4 years to maturity. You pay $951 for this bond, which means that this bond yields 11.6%. You decide to sell this bond in one year; right after the issuer makes a coupon payment. If the market interest rates at the time of sale have decreased to 6%p.a., what is your (nominal) realized rate of return
Answer:
26.91%
Explanation:
PMT = 10%*1000 = 100
FV = 1000
N = 3
I/Y = 6%
Using Ms Excel PV function
Price of the bond on sale = PV(PMT, FV, N. I/Y)
Price of the bond on sale = $1,106.92
Realized rate of return = (Sale price - Initial price+ Coupon)/ Initial price
Realized rate of return = ($1106.92 - $951 + $100) / $951
Realized rate of return = 0.269106204
Realized rate of return = 26.91%
A soup kitchen falls under what type of organization?
National School Lunch Program
Nutrition Program for the Elderly
Expanded Food and Nutrition Education Program
Food Bank
food bank because they used a soup kitchen during the Great depression and it's for the homeless people too it has to be program
You just deposited $4,000 in a bank account that pays a 4.0% nominal interest rate, compounded quarterly. If you also add another $5,000 to the account one year (4 quarters) from now and another $7,500 to the account two years (8 quarters) from now, how much will be in the account three years (12 quarters) from now?
Answer:
Total FV= $17,726.11
Explanation:
To calculate the total Future Value, we need to use the following formula one each deposit:
FV= PV*(1+i)^n
i= 0.04 / 4= 0.01
Deposit 1:
FV= 4,000*(1.01^12)
FV= $4,507.3
Deposit 2:
FV= 5,000*(1.01^8)
FV= 5,414.28
Deposit 3:
FV= 7,500*(1.01^4)
FV= 7,804.53
Total FV= $17,726.11
Sole proprietorship is a business owned and managed by a single person?
Answer:
Yes.
Explanation:
Under the alimony rules:________
a. To determine whether a cash payment is alimony, one must consult the state laws that define alimony
b. A person who receives a property division has experienced an increase in wealth and thus should be subject to tax.
c. Alimony paid per a 2015 divorce agreement is included in the gross income of the recipient of the payments.
d. A person who earns $90,000 and pays $20,000 in alimony per a divorce agreement entered into in 2019, is allowed to deduct the $20,000.
e. None of these
Answer:
c. Alimony paid per a 2015 divorce agreement is included in the gross income of the recipient of the payments.
Explanation:
Alimony can be defined as a financial support or allowance that is mandated by the court (legal obligation) to be made by a divorced or legally separated person to his or her former spouse so as to maintain and support life.
Simply stated, alimony is a legal spousal support or allowance made by a divorced or legally separated person to his or her former spouse for maintenance.
Under the alimony rules, alimony paid per a 2015 divorce agreement is included in the gross income of the recipient of the payments according to the internal revenue service (IRS) of the United States of America.
You have researched your dream around-the-world vacation and determined that the total cost of the vacation will be $44,000. You feel you can earn an APR of 10.3 percent compounded monthly and plan to save $560 per month until you reach your goal. How many years will it be until you reach your goal and enjoy your well-deserved vacation
Answer:
It will take about 20 years
Explanation:
Sinking Fund involves saving an series of equal amount periodically invested at certain rate of interest to accumulate a target amount in the future. The target amount might be to finance a particular project - a vacation in this case.
Where an equal deposit is invested the sum accumulated (deposit plus interest earned) at the end of the final period is known as the Future Value (FV) of the sinking fund. The future value in this scenario = $44,000
The FV is determined as follows:
FV = Equal monthly deposit × Monthly Annuity factor
where FV- future value, A- equal cash deposit, r-rate of return, n- number of years.
A= 560, r = 10.3, n= ?
Monthly Annuity factor = 44,000/560 = 78.571
Monthly interest rate = 10.3/12=0.8583
Annuity monthly annuity factor =( (1+r)^n - 1 )/r
(1.008583^12n -1)/0.08583= 78.571
cross multiply
78.571×0.08583= 1.008583^12n -1
6.7437= 1.008583^12n -1
6.7437 + 1 = 1.008583^12n
7.7437= 1.008583^12n
find log of both sides
12n = log 7.7437/log 1.008583
12n = 239.50
n= 239.50/12 = 19.9 years.
Approximately 20 years
It will take about 20 years
Dyer Furniture is expected to pay a dividend of D1 = $1.25 per share at the end of the year, and that dividend is expected to grow at a constant rate of 6.00% per year in the future. The company's beta is 1.95, the market risk premium is 5.50%, and the risk-free rate is 4.00%. What is Dyer's current stock price? Select the correct answer. a. $13.66 b. $12.32 c. $11.65 d. $12.99 e. $14.33
Answer:
$11.65
Explanation:
The first step is to calculate the return
= 4/100 + 1.95(5.50/100)
= 0.04 + 1.95(0.055)
= 0.04 + 0.10725
= 0.14725
The stock price can be calculated as follows
= 1.25/0.14725-0.04
= 1.25/0.10725
= $11.65
Hence the stock price is $11.65
1) Create a production possibilities frontier based on the following data. Attach a picture below the schedule.
2) Label efficient, unattainable and inefficient.
3) Find the opportunity cost of:
a) A to B
b) BtoB
c) Eto C
А
B
С
D
E
Strawberries
0
2
3
4
5
Bananas
10
8
5
3
0
Answer:
A. to B that's the answer
Identify some of the gains that labor unions have made in the United States. What gain do you think is the most important? Why? 15 points
Answer:
Unions have achieved many of their goals for improving working conditions in the United States. Workers in the United States today enjoy higher wages, safer work environments, and shorter work days than workers in previous years. Workers today also have paid vacations and fringe benefits. Also, because of labor unions, the collective bargaining process has helped define acceptable actions for labor and management. (Students should state which of the above listed achievements they consider to be the most important and why.)
Explanation:
hope this helps :)
Answer:
he is correct it is...
Explanation:
"Unions have achieved many of their goals for improving working conditions in the United States. Workers in the United States today enjoy higher wages, safer work environments, and shorter work days than workers in previous years. Workers today also have paid vacations and fringe benefits. Also, because of labor unions, the collective bargaining process has helped define acceptable actions for labor and management. (Students should state which of the above listed achievements they consider to be the most important and why.)"
Linda loves buying shoes and going out to dance. Her utility function for pairs of shoes, S, and the number of times she goes dancing per month, T, is: U(S, T) = 2ST with marginal utilities: MUS = 2T and MUT = 2S. It costs Linda $ to buy a new pair of shoes or to spend an evening out dancing. Assume that she has $ to spend on shoes and dancing.
1.) Use the line drawing tool to draw Linda's budget line. Label this line 'Budget'.
2.) Use the point drawing tool to locate Linda's optimal consumption bundle. Label this point 'R'. Carefully follow the instructions above, and only draw the required objects.
Answer:
See Explanation
Explanation:
Given
[tex]U(S,T) = 2ST[/tex]
[tex]M_U_S =2T[/tex]
[tex]M_U_T=2S[/tex]
The following details are omitted from the question
[tex]P_S= \$50[/tex] --- Price of the Shoes
[tex]P_T = \$50[/tex] --- Spent on dancing
[tex]B = \$500[/tex] --- Budget on shoe and dancing
Solving (a): Her budget line
First, we determine her budget equation (B).
This is calculated by:
[tex]B = P_S * S + P_T *T[/tex]
This gives:
[tex]500 = 50 * S + 50 * T[/tex]
[tex]500 = 50 S + 50 T[/tex]
Divide through by 50
[tex]10 =S + T[/tex]
[tex]S + T = 10[/tex] --- The budget equation
See attachment for the budget line equation
Solving (a): Optimal Consumption Bundle Point
First, we determine the marginal rate of substitution (MRS) using:
[tex]MRS = \frac{MU_s}{MU_t} = 1[/tex]
[tex]MRS = \frac{2S}{2T} =1[/tex]
This implies that:
[tex]\frac{2S}{2T} = 1[/tex]
Cross Multiply
[tex]2S = 2T * 1[/tex]
[tex]2S = 2T[/tex]
Divide by 2
[tex]S = T[/tex]
Substitute T for S in the budget equation
[tex]T + T= 10[/tex]
[tex]2T = 10[/tex]
[tex]T=5[/tex]
Recall that:
[tex]S = T[/tex]
[tex]S = 5[/tex]
So, the point if optimal consumption bundle is (5,5)
See attachment for point R
Easy-to-copy differentiating features: A. do not offer the promise of sustainable competitive advantage. B. are less expensive to integrate into a product or service offering. C. tend to create as much value for consumers as difficult-to-copy differentiating features. D. should be patented before other companies follow suit. E. lead to vigorous price competition.
Answer:
A. do not offer the promise of sustainable competitive advantage.
Explanation:
Easy-to-copy differentiating features refers to those features of an organization that typically differentiates them from their rivals in the same industry but are however, easy to be copied by another firm. Thus, it cannot produce a sustainable competitive advantage over the competitors of a business firm or company.
This ultimately implies that, easy-to-copy differentiating features do not offer the promise of sustainable competitive advantage because the end users (buyers) wouldn't find any difference between the company's product and the rival company that copied it.
Barans Company purchased merchandise on account from a supplier for $12,900, terms 1/10, n/30. Barans Company returned $2,500 of the merchandise and received full credit. a. If Barans Company pays the invoice within the discount period, what is the amount of cash required for the payment? $fill in the blank 1 b. What account is credited by Barans Company to record the return?
Answer: See explanation
Explanation:
a. If Barans Company pays the invoice within the discount period, what is the amount of cash required for the payment?
The amount of cash required for the payment will be:
Purchases: = $12,900
Less: Returns = $2500
Less: Discount = ($12900 - $2500) × 1% = ($10400 × 1%) = $104
Cash required for payment = $10296
b. What account is credited by Barans Company to record the return?
Based on the information above, the merchandise inventory will be credited.
Burke Tires just paid a dividend of D0 = $2.25. Analysts expect the company's dividend to grow by 30% this year, by 10% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The required return on this low-risk stock is 9.00%. What is the best estimate of the stock's current market value? Select the correct answer. a. $79.52 b. $78.00 c. $76.48 d. $77.24 e. $78.76
Answer:
c. $76.48
Explanation:
The value of the stock is the present value of future cash flows
First, calculate each year's dividend
First year dividend = D1 = D0 x ( 1 + first year growth rate ) = $2.25 x ( 1 + 30% ) = $2.925
Second year dividend = D2 = D1 x ( 1 + Second year growth rate ) = $2.925 x ( 1 + 10% ) = $3.2175
Second year dividend = D3 = D2 x ( 1 + Second year growth rate ) = $3.2175 x ( 1 + 5% ) = $3.378375
Now calculate the present value of each year's dividend
Present value of D1 = D1 / ( 1 + required return )^1 = $2.925 / ( 1 + 9.00% )^1 = $2.6834
Present value of D2 = D2 / ( 1 + required return )^2 = $3.2175 / ( 1 + 9.00% )^2 = $2.7081
Present value of D3 = [ D3 / ( Required return - Growth rate ) ] / ( 1 + required return )^2 = [ $3.378375 / ( 9.00% - 5.00% ) ] / ( 1 + 9.00% )^2 = $71.0878
Now take the sum of the present value of all the dividends to calculate the value of stock
Value of Stock = Sum of Present value of all dividend = Present value of D1 + Present value of D2 + Present value of D3 = $2.6834 + $2.7081 + $71.0878
Value of Stock = $76.4793
Value of Stock = $76.48
A company recorded 2 days of accrued salaries of $1,650 for its employees on January 31. On February 9, it paid its employees $7,500 for these accrued salaries and for other salaries earned through February 9. Assuming the company does not prepare reversing entries, the January 31 and February 9 journal entries are:
Answer:
January 31
Dr Salary expenses $ 1,650
Cr Salary Payable $ 1,650
February 9
Dr Salary expenses $ 5,850
Cr Salary Payable $ 1,650
Cr Cash $ 7,500
Explanation:
Preparation of the journal entries for January 31 and February 9
January 31
Dr Salary expenses $ 1,650
Cr Salary Payable $ 1,650
( To record actual salary payable )
February 9
Dr Salary expenses $ 5,850
($7,500-$1,650)
Cr Salary Payable $ 1,650
Cr Cash $ 7,500
(To record total salaries paid with accrued salary of January)
Anchor Company purchased a manufacturing machine with a list price of $93,000 and received a 2% cash discount on the purchase. The machine was delivered under terms Free On Board shipping point, and freight costs amounted to $3,800. Anchor paid $5,400 to have the machine installed and tested. Insurance costs to protect the asset from fire and theft amounted to $7,000 for the first year of operations. Based on this information, the amount of cost recorded in the asset account would be:
Answer:
$100,340
Explanation:
The amount of cost recorded in the asset account would be:
List price $93,000
Less: Discount ($93,000*2%) $1,860
Add: Freight $3,800
Add: Installation&Testing $5,400
Cost of the machine $100,340
Note: Insurance cost is not included in the cost of the machine
The general manager of a popular restaurant noticed that the number of customers in the evening had been decreasing. She promptly ordered the chef to revise the evening menu. Later, customer feedback indicated that the problem was not the menu but poor service from the waitstaff. The manager's decision to have the menu revised suggests that she failed to
Answer: Identify and diagnose the problem.
Explanation:
When the manger noticed that the number of customers in the evening had been reducing, the thing that the manager should have done in that case was to identify the problem to know the reason why the number of customers coming has decreased. Identifying and diagnosing the problem will help the manager address the root cause of the problem.
Ordering the chef to revise the evening menu wasn't the right thing to do at that time as that wasn't going to address the cause of the decrease.
You wish to make a deposit and have these bills: 22 ones, 8 fives, 11 tens, and 3 twenties. You also have 8 nickels, 12 dimes, and 18 quarters. What will you enter on the CURRENCY LINE of the deposit slip?
Explanation:
So to start this out what I would do it turn all the money words into number by multiplying:
22x1=22
8x5=40
11x10=110
3x20=60
For the cents it can be a little bit harder but still that same thing:
8x0.05=0.4
12x0.1=1.2
18x0.25=4.5
Then finally you want to add them all together:
22+40+110+60+0.4+1.2+4.5=238.10
They will put 238.10 on the deposit slip
I hope this helps if you need anymore help just comment❤️
A manufacturing company recorded orders of 10 million products. To maintain its output volume, the company combines efforts of capital and 100, 000 workers. Suppose a new minimum wage law is imposed by the governor, leading to a higher minimum wage in the labor market. As a manager of the company, what would you do in the following situations? Please provide clear and accurate explanations to support your answer • In the short-run, if you cannot purchase more machines (capital is fixed) and you need to maintain the company's output volume. Would you decrease the number of workers you hired? Why? • What would you do in the long-run if you want to maximize your profit and maintain the company's output volume, and why? Create an original reply below by Sunday, Oct 11th at 11:59 pm. Note: Each question worth 5pt. You need to provide correct answers with accurate explanations to earn full points. To help you answer this question, please draw an isoquant diagram for each question.
Answer:
Would not decrease the number of workers hired in the short-run.Purchase more machines in the long-run, reduce the number of workers.Explanation:
Remember, we are told that the company cannot purchase more machines (capital is fixed), hence retaining the 100,000 workers would be the best decision in order to maintain the company's output volume even though the labor cost would be higher.
However, in the long-run, in order to reduce labor cost, purchasing more machines is a good strategy to maximize your profit and maintain the company's output volume.
In summary,
Higher minimum wage = higher cost of cost = lower profitHigher minumum wage + reduced number of workers = maintain company's output volume + maximized profit.Sunland Company can sell all the units it can produce of either Plain or Fancy but not both. Plain has a unit contribution margin of $82 and takes two machine hours to make and Fancy has a unit contribution margin of $99 and takes three machine hours to make. There are 2400 machine hours available to manufacture a product. What should Sunland do
Answer: Plain should be sold as it makes higher Contribution margin.
Explanation:
Contribution Margin of Plain:
= Total hours constraint / Number of hours required for Plain * Contribution margin per unit
= 2,400 / 2 * 82
= $98,400
Contribution Margin of Fancy:
= 2,400 / 3 * 99
= $79,200
Plain makes more profit than Fancy and so should be the one sold.
Clampett, Incorporated, has been an S corporation since its inception. On July 15, 2021, Clampett, Incorporated, distributed $50,000 to J.D. His basis in his Clampett, Incorporated, stock on January 1, 2021, was $45,000. For 2021, J.D. was allocated $10,000 of ordinary income from Clampett, Incorporated, and no separately stated items. What is the total amount of income J.D. recognizes related to Clampett, Incorporated, in 2021
Answer:the total amount of income J.D. recognizes related to Clampett, Incorporated, in 2021 =$5,000
Explanation:
Income of J.D related to Clampett = Ordinary income + Capital gain
Given that Basis distribution = $50,000
Basis stock = $45,000
Ordinary income = $10,000
But Capital gain = Basis distribution -( Basis stock + Ordinary income)
Capital gain = $50,000 - ($45,000 +$10,000)
Capital gain = $50,000 - $55,000
Capital gain = = - $5,000
Therefore J.D. income related to Clampett = Ordinary income + Capital gain =$10,000 +(- $5,000)
=$10,000 - $5,000
=$5,000
Klingon Cruisers, Inc., purchased new cloaking machinery five years ago for $15 million. The machinery can be sold to the Romulans today for $14.3 million. Klingon's current balance sheet shows net fixed assets of $12 million, current liabilities of $840,000, and net working capital of $223,000. If all the current accounts were liquidated today, the company would receive $1.05 million cash. What is the book value of Klingon's assets today
Answer: $13,063,000
Explanation:
The book value of Klingon's assets today will be:
Net working capital = $223,000
Add: Current liabilities = $840,000
Current assets = $1,063,000
Add: Net fixed asset = $12,000,000
Book value of assets = $13,063,000
Therefore, the book value of the assets will be $13,063,000.
Market Street Grocery check-out employees digitally enter the bar codes on all items as part of the check-out process. Market Street gathers purchase information by continuously learning which items at which price points customers prefer. This process allows Market Street to plan ahead when ordering from suppliers and restocking the shelves. This is an example of _______. a. quota research b. observational research c. evidence-based research d. scanner-based research
Answer: D. scanner-based research
Explanation:
Based on the information given in the question, since the process allows Market Street to plan ahead when ordering from suppliers and restocking the shelves, we can deduce that it's a scanner based research.
Scanner based research occurs when information are gathered about the customers through the monitoring of the thing that they purchase and their advertisement and promotion.
Commerce Corporation has a high probability of operating at 40,000 activity hours during the upcoming period, and lower probabilities of operating at 30,000 hours and 50,000 hours. The company's flexible budget revealed the following: 30,000 Hours 40,000 Hours 50,000 Hours Variable costs $ 135,000 $ 180,000 $ 225,000 Fixed costs 720,000 720,000 720,000 If Commerce operated at 35,000 hours, its total budgeted cost would be: Multiple Choice $810,000. $997,500. $787,500. $945,000. $877,500.
Answer:
Total cost= $877,500
Explanation:
First, we need to calculate the unitary variable cost:
Unitary variable cost= 135,000 / 30,000= $4.5
Unitary variable cost= 180,000 / 40,000= $4.5
Unitary variable cost= 225,000 / 50,000= $4.5
Now, the total cost for 35,000 hours:
Total cost= Unitary variable cost*total number of hours + fixed costs
Total cost= 4.5*35,000 + 720,000
Total cost= $877,500
Countryside Bank uses activity-based costing to determine the cost of servicing customers. There are three activity pools: teller transaction processing ($2.60 per teller transaction), check processing ($0.20 per canceled check), and ATM transaction processing ($0.15 per ATM transaction). Rosa Bush had 5 teller transactions, 10 canceled checks, and 7 ATM transactions during the month. What is the total monthly activity-based cost for Rosa Bush during the month
Answer: $16.05
Explanation:
Teller transaction processing = $2.60 per teller transaction
Check processing = $0.20 per canceled check
ATM transaction processing = $0.15 per ATM transaction
The total monthly activity-based cost for Rosa Bush during the month will be calculated thus:
= (5 × $2.60) + (10 × $0.20) + (7 × $0.15)
= $13.00 + $2.00 + $1.05
= $16.05
On January 1, a company issues bonds dated January 1 with a par value of $730,000. The bonds mature in 3 years. The contract rate is 10%, and interest is paid semiannually on June 30 and December 31. The bonds are sold for $718,000. The journal entry to record the first interest payment using straight-line amortization is:
a. Debit interest expense $38,500; credit discount on bonds payable $2,000; credit cash $36,500
b. debit interest payable $36,500; credit cash $36,500
c. debit interest expense $36,500; credit premium on bonds payable $2,000; credit cash $34,500
d. debit interest expense $36,500; credit cash $36,500
e. debit interest expense $34,500; debit discount on bonds payable $2,000; credit cash $36,50
Answer:
a. Debit interest expense $38,500; credit discount on bonds payable $2,000; credit cash $36,500
Explanation:
As the bonds are sold less than the face vaue then it is said the bonds are issued on discount, we need to calculate the discount on the bond
Discount on the bond = Face value of bond - Issuance value of bond = $730,000 - $718,000 = $12,000
The discount will be amortized over the life of the bond
The first interest and its amortization is as follow
Cash Payment = Face value x Coupon rate x Semiannual fraction = $730,000 x 10% x 6/12 = $36,500
Amortization of discount on bond = Discount on Bond / Total Numbers of periods = $12,000 / ( 3 years x 2 payment period per year ) = $2,000 per eperiod
The cash will be credited by $36,500
The bond liability will be credited by $2,000
Hence the interest exepense will be debited by $38,500 ( $36,500 + $2,000 )