The following costs result from the production and sale of 4,500 drum sets manufactured by Tight Drums Company for the year ended December 31, 2019. The drum sets sell for $300 each. The company has a 35% income tax rate.
Variable production costs
Plastic for casing $121,500
Wages of assembly workers 414,000
Drum stands 162,000
Variable selling costs
Sales commissions 112,500
Fixed manufacturing costs
Taxes on factory 15,000
Factory maintenance 30,000
Factory machinery depreciation 90,000
Fixed selling and administrative costs
Lease of equipment for sales staff 30,000
Accounting staff salaries 80,000
Administrative management salaries 160,000
Required:
1. Prepare a contribution margin income statement for the year.
2. Compute its contribution margin per unit and its contribution margin ratio.
3. For each dollar of sales, how much is left to cover fixed costs and contribute to operating income?

Answers

Answer 1

Answer:

Tight Drums Company

1. Contribution Margin Income Statement for the year ended December 31, 2019:

Sales Revenue                                                     $1,350,000

Variable production costs:

 Plastic for casing                  $121,500  

 Drum stands                          162,000

Wages of assembly workers  414,000

Total variable prodn. costs           $697,500

Variable selling costs :

Sales commissions                          112,500

Total variable costs                     $810,000             810,000

Contribution                                                          $540,000

Fixed manufacturing costs:

Taxes on factory                              15,000

Factory maintenance                      30,000

Factory machinery depreciation    90,000

Total Manufacturing overhead $135,000              135,000

Fixed selling and administrative costs :

Lease of equipment for sales staff         30,000

Accounting staff salaries                         80,000

Administrative management salaries   160,000

Total fixed selling and admin. costs $270,000    270,000

Operating Profit (Pre-Tax)  Income                       $135,000

Income Tax Expense (Rate = 35%)                           47,250

Net Income                                                             $87,750

2.Computation of Contribution Margin per unit and Contribution Margin Ratio:

a) Contribution Margin per unit

= Contribution Margin divided by Units sold

= $540,000/4,500

= $120 per unit

b) Contribution Margin Ratio

= Contribution per unit/Selling price * 100

= $120/$300 * 100

= 40%

3. For each dollar of sales, contribution per dollar

= 40% of $1

= $0.40

Explanation:

a) Data:

Sales = 4,500 drums

Selling price = $300 each

Sales Revenue = 4,500 x $300 = $1,350,000

Variable production costs:

 Plastic for casing                  $121,500  

 Drum stands                          162,000

Wages of assembly workers  414,000

Total variable prodn. costs $697,500

Variable selling costs :

Sales commissions                 112,500

Total variable costs            $810,000

Fixed manufacturing costs:

Taxes on factory                              15,000

Factory maintenance                      30,000

Factory machinery depreciation    90,000

Total Manufacturing overhead $135,000

Fixed selling and administrative costs :

Lease of equipment for sales staff         30,000

Accounting staff salaries                         80,000

Administrative management salaries   160,000

Total fixed selling and admin. costs $270,000

Income Tax Rate = 35%

b) Tight Drums Company's contribution margin income statement is a financial statement that separates all the variable costs from the fixed costs.  The difference between Tight Drums' Sales Revenue of $1,350,00 and the Total Variable Costs of $810,000 is called the Contribution Margin.

The Contribution margin of $540,000 shows how much of the sales revenue is left to cover the fixed costs totalling $405,000 and generate operating income, after deducting all the variable costs.

This contribution margin can be expressed per unit by dividing the contribution margin of $540,000 by the 4,500 units sold.  The per unit value can then be expressed as a ratio of the selling price.  From the contribution margin ratio, we can estimate how much is left per dollar of sales for Tight Drums Company to cover its fixed costs and generate operating income.


Related Questions

Listed below are certain costs (or discounts) incurred in the purchase or construction of new plant assets. Indicate whether the costs should be expensed or capitalized (included in the cost of the plant assets on the balance sheet.) For costs that should be included in plant assets. Indicate in which category of plant assets (Equipment. Building. or Land) the related costs should be recorded on the balance Sheet.

a. Invoice cost to purchase Equipment
b. Sales tax on new equipment purchased
c. Cost to lay foundation for a new building
d. Repair costs to fix new equipment damaged by the crew that unpacked it
e. Charges incurred to train employees to use new equipment
f. Construction costs for a new building to be used in operations
g. Attorney fees incurred to complete the purchase documents for a new plant warehouse
h. Freight costs to ship the equipment From the manufacturer to the warehouse

Answers

Answer:

a. Capitalized : Equipment

b. Expensed

c. Capitalized : Building

d. Expensed

e. Capitalized : Equipment

f.  Capitalized : Building

g. Capitalized : Building

h. Capitalized : Equipment

Explanation:

The Cost of Property, Plant and Equipment item according to IAS 16 includes, the Purchase Cost and any cost directly incurred in putting the assets in location and condition intended for use by management.

The costs exclude amounts collected in tax on behalf of third parties

Also not Capital expenditures increase the earning ability of the asset whilst  revenue expenditure is the maintenance of such asset.

The Sisyphean​ Company's common stock is currently trading for $ 28 per share. The stock is expected to pay a $ 2.9 dividend at the end of the year and the Sisyphean​ Company's equity cost of capital is 12​%. If the dividend payout rate is expected to remain​ constant, then the expected growth rate in the Sisyphean​ Company's earnings is closest​ to:

Answers

Answer:

1.24%

Explanation:

The Sisyphean company's common stock is currently being traded at $28 per share

The dividend is $2.9

The company's equity cost of capital is 12%

= 12/100

= 0.12

Therefore, the expected growth rate is calculated as follows

Growth rate= Equity cost of capital-(Dividend/Current price)

= 0.12-(2.9/28)

= 0.12-0.103571

= 0.01243×100

= 1.24%

Hence the expected growth rate is Sisyphean company's earning is closest to 1.24%

Answer the question on the basis o the amounts of all nonlabor resources are fixed.
No. of workers Units of output
0 0
1 40
2 90
3 126
4 150
5 165
6 180
Assume that Number of Us Out Diminishing marginal returns become evident with the addition of the:________,
A) sixth worker.
B) fourth worker.
C) third worker.
D) second worker

Answers

Answer:

B

Explanation:

Dinmishing marginal returns occurs when as more units of labour is added, marginal output declines.

marginal output is change in total output as more units of labour are employed.

Marginal output = total output 2 - total output 1

total output = number of workers x units of output

Richman Company purchased $900,000 of 8%, 5-year bonds from Carlin, Inc. on January 1, 2022, with interest payable on July 1 and January 1. The bonds sold for $937,422 at an effective interest rate of 7%. Using the effective interest method, Richman Company decreased the Available-for-Sale Debt Securities account for the Carlin, Inc. bonds on July 1, 2022 and December 31, 2022 by the amortized premiums of $3,186 and $3,294, respectively. At December 31, 2022, the fair value of the Carlin, Inc. bonds was $954,000. What should Richman Company report as other comprehensive income in the 2022 Comprehensive Income Statement

Answers

Answer:

$23,058

Explanation:

For calculation of Other comprehensive income first we will find out the total amortized premiums which is shown below:-

Total amortized premiums = 3,186 + 3,294

= $6,480

Other comprehensive income = Fair value on December 31, 2022 - (Selling price of bonds - Total amortized premiums)

= $954,000 - ($937,422 - $6,480)

= $954,000 - $930,942

= $23,058

We simply applied the above formula.

Automobile bumpers590 810 Valve covers310 570 Wheels350 620 1,250 2,000 Plating Department Automobile bumpers195 1,150 Valve covers200 700 Wheels195 750 590 2,600 Total1,840 4,600 Required: 1. Determine the single plantwide factory overhead rate, using each of the following allocation bases: (a) direct labor hours and (b) machine hours. Direct labor hour overhead rate$ 130 per direct labor hour Machine hour overhead rate$ per machine hour 2. Determine the product factory overhead costs, using (a) the direct labor hour plantwide factory overhead rate and (b) the machine hour plantwide factory overhead rate. Automobile BumpersValve CoversWheels Direct labor hours$ $ $ Machine hours$ $ $

Answers

Answer:

OVERHEAD APPLIED USING DIRECT LABOR

Stamping  //  Labor Hours  //  Applied Overhead

bumpers 590          $    76,700

Valve          310          $   40,300

Wheels         350                  $   45,500

              1250                  $  162,500

Planting  //  Labor Hours  //  Applied Overhead

bumpers 195  $25,350

Valve       200  $26,000

Wheels        195  $25,350

               590  $76,700

OVERHEAD APPLIED USING MACHINE HOURS

Stamping  //  Machine Hours  //  Applied Overhead

bumpers 810  $42,120

Valve 570  $29,640

Wheels 620  $32,240

2000  $104,000

Planting   //  Machine Hours  //  Applied Overhead

bumpers 1150          $59,800

Valve          700          $36,400

Wheels          750          $39,000

               2600          $135,200

Explanation:

As the overhead rate using labor hours is $130 Then:

Total expected overhead: $130 x 1,840 labor hours = $239,200

Machine Hours overhead rate:

$ 239,200   / 4,600 hours = $52

To get the amount of overhead applied on each product we multiply their use of the cost drive by the overhead rate.

Milani, Inc., acquired 10 percent of Seida Corporation on January 1, 2017, for $197,000 and appropriately accounted for the investment using the fair-value method. On January 1, 2018, Milani purchased an additional 30 percent of Seida for $600,000 which resulted in significant influence over Seida. On that date, the fair value of Seida's common stock was $2,000,000 in total. Seida's January 1, 2018 book value equaled $1,850,000, although land was undervalued by $120,000. Any additional excess fair value over Seida's book value was attributable to a trademark with an 8-year remaining life. During 2018, Seida reported income of $300,000 and declared and paid dividends of $110,000. Prepare the 2018 journal entries for Milani related to its investment in Seida.

Answers

Answer:

Milani, Inc.

January 1, 2018:

Debit Investment in Seida $600,000

Credit Cash Account $600,000

To record the purchase of an additional 30% of Seida.

December 31, 2018:

Debit Investment in Seida $120,000

Credit Net Income $120,000

To record the share in the net income of Seida.

Debit Cash Account $44,000

Credit Cash Dividend Received $44,000

To record the company's share in the dividend paid by Seida.

Debit Cash Dividend Received $44,000

Credit Investment in Seida $44,000

To record the dividend received from Seida.

Explanation:

The cash dividend received from Seida will reduce Milani, Inc.'s investment value in Seida, just as the 40% share in the net income increased the investment value.

These journal entries have been used to debit and credit accounts as transactions occur.  A journal plays an important role in recording transactions in the accounting system as it is usually the initial record of any transaction.  It also shows the accounts debited or credited with a short narration that explains each transaction.

Cerrone Inc. has provided the following data for the month of July. The balance in the Finished Goods inventory account at the beginning of the month was $79,000 and at the end of the month was $72,000. The cost of goods manufactured for the month was $361,600. The actual manufacturing overhead cost incurred was $118,400 and the manufacturing overhead cost applied to jobs was $112,000. The adjusted cost of goods sold that would appear on the income statement for July is:

Answers

Answer:

$375,000

Explanation:

Unadjusted cost of goods sold = Opening stock of finished goods  + Cost of goods sold - Closing stock of finished goods

Unadjusted cost of goods sold = $79,000 + $361,600 - $72,000

Unadjusted cost of goods sold = $368,600

The overhead applied is $112,000 and the actual manufacturing overhead is $118,400. As the actual manufacturing overhead is more than the overhead applied, the overhead is under applied as shown below

Under-applied Overhead = Actual manufacturing overhead - Overhead applied

= $118,400 - $112,000

= $6,400

Now, calculation of the adjusted cost of goods sold is as follow

Adjusted cost of goods sold = Unadjusted cost of goods sold + Under-applied Overhead

= $368,600 + $6,400

= $375,000

Thus, the adjusted cost of goods sold is $375,000

All of the following items should be considered when setting an export price
except
A. The tariff rate and value-added tax.
B. Transportation costs.
C. Prices of substitutes in foreign markets.
D. Repatriation restrictions

Answers

Answer:

D. Repatriation restrictions should not affect the prices of commodities

Explanation:

Repatriation  has to do with the conversion of foreign currency to home based currency. this is done in a bid to carry out international transaction effectively

while these items affects the prices of export

A. The tariff rate and value-added tax.

B. Transportation costs.

C. Prices of substitutes in foreign markets.

Scenario: Your direct supervisor is interested in a project you are currently working on, and they have asked to increase the scope to increase the department's goals. How would you respond if your supervisor was not the project sponsor?

Answers

Scenario: Your direct supervisor is interested in a project you are currently working on, and they have asked to increase the scope to increase the department's goals. How would you respond if your supervisor was not the project sponsor?

ANSWER:

Take down his/her suggestions. The first thing is to show respect. Accept thoughts and contributions towards that project. Most times a project "sponsor" is not someone who is a professional in the field or discipline that the project is about.

If your direct supervisor has the idea of increasing the scope of the project, take note of his/her reasons and if they will truly bring the achievement of more departmental goals, then relay the idea of expansion to the project sponsor.

Answer:

At this point, the important thing is to remain calm and in control. Your supervisor, like everyone else, is likely to get confused and blame people for things that are not their fault, or even find fault that does not exist.

In that case, you should wait for him to finish speaking, ask for permission to speak and explain how you did your job and show how your supervisor is wrong about the conclusion he made. This must be done calmly and politely, always maintaining respect.

Explanation:

The Edmonton Company is issuing $50,000 face value, 10% bonds with detachable stock warrants. The value of the bonds without the warrants is $40,000 and the value of the warrants is a total of $10,000. The bonds with the warrants sold for $55,000. The journal entry to record the sale will include:

Answers

Answer:

Assuming that the warrants are detachable, the journal entry should be:

Dr Cash 55,000

    Cr Bonds payable 40,000

    Cr Paid-in capital stock warrants 11,000

    Cr Premium on bonds payable 4,000

The value of the warrants must be recorded separately under the paid-in capital stock warrants account, and any excess amount will be allocated proportionally between that account and the as a premium on bonds payable account.

Choose an example of a type of new company you could start, and then use this company idea to answer the questions below. You might choose to open a hair salon, a babysitting service, a record store, or many other things. This can be the same type of company you chose in assignment 8, or it can be different.
a. Describe the type of company you chose.
b. If you needed to get funding for your company, would you prefer to get debt funding or equity funding? Explain why you would prefer this type.

Answers

Answer:

Find the explanation below.

Explanation:

1. The company I chose to operate would be Celebrity Hair Salon. The Celebrity Hair Salon is a standard salon with comfortable furnishings and state-of-the-art equipment intended to tend to the needs of celebrities. Clients are expected to make appointments for their services which the salon strictly adheres to.

2. I would prefer to fund this new business through debt financing. Debt funding entails borrowing funds from Creditors with the intention of paying back at a later time with the attached interest. Equity funding entails giving an investor a certain percentage of the company's returns thus making him a co-owner of the company. This affords him the right to make decisions for the business. Detaching the investor from this business is difficult because it requires buying him out.

I would prefer debt financing because I wish to retain sole ownership of the business. I can also go through some government agencies to obtain funds at lower interest rates. Moreso, there is a fixed debt repayment plan that I can set a target to meet until the debt is paid. Finally, I can regain my freedom after the payment is completed, thus regaining my business and not entitling me to anyone.

Consider Figure 9.2 on page 205 of our textbook. Suppose P0 is $10 and P1 is $11. Suppose a new firm with the same LRAC curve as the incumbent tries to break into the market by selling 4,000 units of output. Estimate from the graph what the new firm's average cost of producing output would be. If the incumbent continues to produce 6,000 units, how much output would be supplied to the market by the two firms? Estimate what would happen to the market price as a result of the supply of both the incumbent firm and the new entrant. Approximately how much profit would each firm earn ?

Answers

Answer:

The 10,000 units of output that will be supplied by the two firms to the market.

Profit that each firm would earn will be higher than previous.

Explanation:

The firm selling 4,000 units at the price of $10 per unit. If the output is increased to 6,000 units the price will increase to $11 per unit. If the new 6,000 units are produced along with the previous 4,000 units then the total output supplied by the two firms will be 10,000 units (6,000 + 4,000). The supply of goods in the market will increase so price will fall and the revenue for the firms will decline but they can benefit with sales volume and their profit can increase.

The 10,000 units of output will be supplied by the two firms to the market.

The profit that each firm would earn will be higher than the previous.

Calculation of the number of units and profits:

Here the firm sells 4,000 units at the price of $10 per unit. And, in the case when the output is increased to 6,000 units the price will increase to $11 per unit.

And, In the case when the new 6,000 units are produced along with the previous 4,000 units so the total output supplied by the two firms will be 10,000 units.

The supply of goods in the market should increase due to which the price will fall and the revenue for the firms will decline however they can benefit with sales volume and their profit can increase.

learn more about profit here: https://brainly.com/question/18476577

International trade promotes economic growth when it allows any two countries to grow (in their combined production) beyond (above) their pre-trade production possibilities curve (PPC).

a. True
b. False

Answers

Answer: True

Explanation:

The Production Possibilities Curve (PPC) is meant to illustrate how a country produces goods and services given the limited resources it has. The curve represents the various amounts that have to be traded off of 2 goods to produce more or less of one good.

The Curve shows that it is best that a country produces those goods that is good at producing so that it can produce more of it and then trade with the rest of the world for the goods it isn't too efficient at producing. If both countries involved in the trade are able to grow beyond (above) their pre-trade production possibilities curve then the trade would have promoted economic growth.

Hicks Health Clubs, Inc., expects to generate an annual EBIT of $750,000 and needs to obtain financing for $1,200,000 of assets. Its tax bracket is 40%. If the firm uses short-term debt, its rate will be 7.5%, and if it uses long-term debt, its rate will be 9%. By how much will their earnings after taxes change if they choose the more aggressive financing plan instead of the more conservative plan

Answers

Answer:

Hicks Health Clubs, Inc. earnings after taxes will change by minus $10,800 if they choose the more aggressive financing plan instead of the more conservative plan.

Explanation:

Note: I experienced a difficulty submitting the explanation here. Kindly find attached the full answer and explanation in the attached Microsoft word document.

Jamison Company purchased the assets of Booker Company at an auction for $4,200,000. An independent appraisal of the fair value of the assets is listed below:
Land $1,425,000
Building 2,100,000
Equipment 1,575,000
Trucks 2,550,000
Assuming that specific identification costs are impracticable and that Jamison allocates the purchase price on the basis of the relative fair values, what amount would be allocated to the Trucks?
A. $1,400,000
B. $2,100,000
C. $2,520,000
D. $2,550,000

Answers

Answer:

A. $1,400,000

Explanation:

Amount to be allocated = Auction price / Total individual price * Truck price

Auction price = $4,200,000

Total individual price =  $1,425,000  + $2,100,000  + 1,575,000 + $2,550,000 = $7,650,000

Truck price = $2,550,000

Amount to be allocated = ($4,200,000 / $7,650,000) * $2,550,000

Amount to be allocated = $1,400,000

Worley Company buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to hundreds of hospitals. Worley sets its prices for all hospitals by marking up its cost of goods sold to those hospitals by 5%. For example, if a hospital buys supplies from Worley that had cost Worley $100 to buy from manufacturers, Worley would charge the hospital $105 to purchase these supplies.
For years, Worley believed that the 5% markup covered its selling and administrative expenses and provided a reasonable profit. However, in the face of declining profits Worley decided to implement an activity-based costing system to help improve its understanding of customer profitability. The company broke its selling and administrative expenses into five activities as shown below:
Activity Cost Pool (Activity Measure) Total Cost Total Activity
Customer deliveries (Number of deliveries) $ 500,000 5,000 deliveries
Manual order processing (Number of manual orders) 248,000 4,000 orders
Electronic order processing (Number of electronic orders) 200,000 12,500 orders
Line item picking (Number of line items picked) 450,000 450,000 line items
Other organization-sustaining costs (None) 602,000
Total selling and administrative expenses $ 2,000,000
Worley gathered the data below for two of the many hospitals that it serves—University and Memorial (both hospitals purchased a total quantity of medical supplies that had cost Worley $30,000 to buy from its manufacturers):
Activity
Activity Measure University Memorial
Number of deliveries 10 25
Number of manual orders 0 30
Number of electronic orders 15 0
Number of line items picked 120 250
Required:
Compute the total revenue that Worley would receive from University and Memorial.
Answer is complete and correct
Total Revenue
University $ 31,500
Memorial $ 31,500

Answers

Answer:

Worley Company

Computation of Total Revenue from University and Memorial:

Total Cost =                                        $38,541.00

Mark-up (5%)                                        $1,927.05

Total Revenue                                  $40,468.05

Explanation:

a) Data and Calculations:

Activity Cost Pool         (Activity Measure)       Total Cost    Total Activity

Customer deliveries (Number of deliveries)    $ 500,000  5,000 deliveries

Manual order        (Number of manual orders)   248,000  4,000 orders

 processing

Electronic order (Number of electronic orders) 200,000 12,500 orders

processing  

Line item picking (Number of line items picked) 450,000 450,000 line items

Other organization-sustaining costs (None)       602,000

Total selling and administrative expenses  $ 2,000,000

Data on University and Memorial Hospitals:

Activity Measure                     University       Memorial

Number of deliveries                     10                 25  

Number of manual orders              0                 30  

Number of electronic orders        15                   0  

Number of line items picked      120              250

Activity Rates:

Customer deliveries (Number of deliveries)    $ 500,000/5,000 = $100

Manual order        (Number of manual orders)   248,000/4,000   = $62

 processing

Electronic order (Number of electronic orders) 200,000/12,500 = $16

processing  

Line item picking (Number of line items picked) 450,000/450,000 = $1

Other organization-sustaining costs (None)       602,000

Cost of Selling and Administrative Expenses to the two hospitals:

Activity Measure                   University    Memorial Total  Total Cost

Number of deliveries                  10              25           35       $3,500

Number of manual orders           0              30          30        $1,860

Number of electronic orders     15                0            15          $240

Number of line items picked   120           250        370          $370

Total Selling and Administrative Expenses                         $5,970

Cost of medical supplies =                  $30,000

Selling and administrative expenses = $5,970

Fixed costs =                                          $2,571

($5,970/$1,398,000 x $602,000)

Total Cost =                                         $38,541

Mark-up (5%)                                        $1,927.05

Selling price                                      $40,468.05

b) The case stated that both University and Memorial had purchased a total quantity of medical supplies that had cost Worley $30,000 to buy from its manufacturers.  This implies that each hospital did not buy supplies that had cost Worley $30,000 for each.  Based on this assumed fact from the case, the total revenue that Worley would collect from the two hospitals after keying in the selling and distribution and head office fixed costs, to get a total cost of $38,541.00 and adding the 5% markup, the revenue that Worley would receive would be $40,468.05 ($38,541 x 1.05).

3. Berkshire Hathaway A shares are trading at $120,000. What split ratio would it need to bring its stock price down to $50

Answers

You can divide to find the answer

Paulo owns a few shares of stock in a large and diversified firm. He realizes that the CEO of the company is responsible for a multi-billion dollar business, but is upset with what he feels is excessive compensation for the chief executive officer, particularly since the firm has reported losses for the past two years. Paulo's concerns are:

Answers

Answer: likely to be well-founded since CEO compensation at many U.S. companies has actually increased even when the company performed poorly

Explanation:

The options to the question are:

A. unfounded, since laws in the United States prevent firms from paying large salaries or bonuses to executives when a firm reports a loss.

B. based on an erroneous conclusion, because CEO pay is always based on a formula tied to the company's profits and losses.

C.likely to be well-founded since CEO compensation at many U.S. companies has actually increased even when the company performed poorly.

D. not entirely unfounded, but he needs to realize that the pay received by most chief executives must be reinvested in the company if it's unprofitable for three years in a row.

From the question, we are informed that Paulo owns a few shares of stock in a large and diversified firm na that he noticed that the CEO of the company is responsible for a multi-billion dollar business, but is upset with what he feels is excessive compensation for the CEO particularly since the firm has reported losses for the past two years.

Paulo's concerns are likely to be well-founded since CEO compensation at many U.S. companies has actually increased even when the company performed poorly.

Gould Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: Activity Cost Pool Activity Rate Setting up batches $ 59.56 per batch Processing customer orders $ 72.96 per customer order Assembling products $ 4.25 per assembly hour Data concerning two products appear below: Product K91B Product F65O Number of batches 89 60 Number of customer orders 39 53 Number of assembly hours 493 900 How much overhead cost would be assigned to Product K91B using the activity-based costing system?

Answers

Answer:

$10,241.53

Explanation:

Using the activity-based costing system, Overhead cost for Product K91B would be?

Setting up batches 89 batches x $59.56=                   $5300.84

Processing customer orders 39 orders x $72.96=      $2,845.44

Assembling products 493 hours x $4.25=                   $2,095.25

Total Overhead cost                                                      $10,241.53

Larned Corporation recorded the following transactions for the just completed month.
a. $85,000 in raw materials were purchased on account.
b. $83,000 in raw materials were used in production. Of this amount, $73,000 was for direct materials and the remainder was for indirect materials.
c. Total labor wages of $120,500 were paid in cash. Of this amount, $102,800 was for direct labor and the remainder was for indirect labor.
d. Depreciation of $195,000 was incurred on factory equipment.
Record the above transactions in journal entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answers

Answer:

a. $85,000 in raw materials were purchased on account.

Dr Raw materials inventory 85,000

    Cr Accounts payable 85,000

b. $83,000 in raw materials were used in production. Of this amount, $73,000 was for direct materials and the remainder was for indirect materials.

Dr Work in process 73,000

Dr Manufacturing overhead 10,000

    Cr Raw materials inventory 85,000

c. Total labor wages of $120,500 were paid in cash. Of this amount, $102,800 was for direct labor and the remainder was for indirect labor.

Dr Work in process 102,800

Dr Manufacturing overhead 17,700

    Cr Cash 120,500

d. Depreciation of $195,000 was incurred on factory equipment.

Dr Manufacturing overhead 195,000

    Cr Accumulated depreciation - factory equipment 195,000

A corporation issued 5,000 shares of $10 par value common stock in exchange for some land with a market value of $70,000. The entry to record this exchange is:

Answers

Answer:

Entry to Record this exchange is :

Land $70,000 (debit)

Common Stocks $50,000 (credit)

Share Premium $20,000 (credit)

Explanation:

The Value of the Common Stocks used to settle the land purchase is equivalent to the market value of the land of $70,000.

The Common Stocks have a par value of $10, this means that any amount that is paid in excess of this par value is accounted for in the Share Premium Reserve.

Entry to Record this exchange is :

Land $70,000 (debit)

Common Stocks $50,000 (credit)

Share Premium $20,000 (credit)

__________________ are ways that a nation can draw up regulations, inspections, and paperwork to make it more costly or difficult to import products.

Answers

Answer: Nontariff barriers

Explanation:

Nontariff barriers are trade barriers that are used whereby the import and export of goods and services are restricted. It should be noted that the restriction is not by tariffs but can include include embargoeds, quotas, sanctions, and levies.

The main reason for trade barriers are to generate revenue for the government and also to protect the local industries.

Periodic interest rates. You have a savings account in which you leave the funds for one year without adding to or withdrawing from the account. Which would you rather​ have: a daily compounded rate of 0.050​%, a weekly compounded rate of 0.355​%, a monthly compounded rate of 1.15​%, a quarterly compounded rater of 4.25​%, a semiannually compounded rate of 7.5​%, or an annually compounded rate of 18​%? What is the effective annual rate​ (EAR) of a daily compounded rate of 0.050​%?

Answers

Answer:

Choose an annually compounded rate of 18​%

The effective annual rate​ (EAR) of a daily compounded rate of 0.050​% is 0.05001%.

Explanation:

We need to find the effective annual rate of interest for each nominal interest and compare this for the different alternatives.

The effective annual rate of interest is the annual rate that if compounded once a year would give us the same result as the same result as the interest per period compounded a number of times a year.

Conversion of Nominal to Effective Interest Rate.

1. A daily compounded rate of 0.050​%

Use a financial calculator to enter the data

P/YR = 365

Nominal interest = 0.050​%

Thus Effective Interest rate = ?  0.05001%

2. A weekly compounded rate of 0.355​%

Use a financial calculator to enter the data

P/YR = 52

Nominal interest = 0.355​%

Thus Effective Interest rate = ? 0.3556 %

3. A monthly compounded rate of 1.15​%

Use a financial calculator to enter the data

P/YR = 12

Nominal interest = 1.15​%

Thus Effective Interest rate = ? 1.1561%

4. A quarterly compounded rater of 4.25​%

Use a financial calculator to enter the data

P/YR = 4

Nominal interest = 4.25​%

Thus Effective Interest rate = ? 4,32%

5. A semiannually compounded rate of 7.5​%

Use a financial calculator to enter the data

P/YR = 2

Nominal interest = 7.5​%

Thus Effective Interest rate = ? 7.64%

6. an annually compounded rate of 18​%

Use a financial calculator to enter the data

P/YR = 1

Nominal interest = 18​%

Thus Effective Interest rate = ? 18​%

Conclusion :

Choose the  option giving the HIGHEST effective annual rate.

Thu, I would rather have an annually compounded rate of 18​%.

If the actual budget deficit is $180 billion, the economy is operating $400 billion above its potential, and the marginal tax rate is 13 percent, what are the structural deficit or surplus and the cyclical deficit or surplus

Answers

Answer:

Structural Deficit $232 billion

Cyclical Deficit $52 billion

Explanation:

Calculation for the Structual deficit and the cyclical deficit

STRUCTURAL DEFICIT

Using this formula

Structural Deficit =Actual budget +(Economy Operating amount×Marginal tax rate)

Let plug in the formula

Structural Deficit =$180 billion +($400 billion ×0.13)

Structural Deficit =$180 billion +$52 billion

Structural Deficit =$232 billion

CYCLICAL DEFICT

Using this formula

Cyclical Deficit = Economy Operating amount *Marginal tax rate

Let plug in the formula

Cyclical Deficit=$400 billion ×0.13

Cyclical Deficit=$52 billion

Therefore Structural Deficit is $232 billion while Cyclical Deficit is $52 billion.

The better-off test for evaluating whether a particular diversification move is likely to generate added value for shareholders involves determining whether the proposed diversification move Group of answer choices provides the company with additional resource strengths. provides additional ways to build the entrepreneurial skills of the company's senior managers. spreads stockholders' risks across a greater number of lines of business. has competitively valuable value chain match-ups with the company's present businesses such that its businesses can perform better together than apart. has good potential for increasing the company's rate of return on invested capital.

Answers

Answer:  Has competitively valuable value chain match-ups with the company's present businesses such that its businesses can perform better together than apart.

Explanation:

The better-off test of diversification is that the company must gain a return that is higher than incremental growth. Incremental growth is usually defined a 1 + 1 = 2 formula and this test argues that Diversification must provide more than this such that the company achieves synergistic growth ( 1 + 1 = 3) which is what happens when different entities work better together than alone.

Diversification should therefore be into an area that will be able to match-up with the company's present businesses such that its businesses can perform better together than apart and produce even greater returns.

A granary allocates the cost of unprocessed wheat to the production of feed, flour, and starch. For the current period, unprocessed wheat was purchased for $240,000, and the following quantities of product and sales revenues were produced.

Product Pounds Price per Pound
Feed 100,000 $0.70
Flour 50,000 2.20
Starch 20,000 1.00

How much of the $240,000 cost should be allocated to feed?

a. $24,500.
b. $84,000.
c. $90,000.
d. $70,000.
e. $200,000.

Answers

Answer:

$84,000

Explanation:

A granny allocates the costs of unprocessed wheat to production of feed, flour and starch

The unprocessed wheat was bought at the price of $240,000

The first step is to calculate the total amount of the products(feed, flour and starch)

Feed= 100,000×0.70= 70,000

Flour= 50,000×2.0= 110,000

Starch= 20,000×1.0= 20,000

Total cost= 70,000+110,000+20,000

= $200,000

Therefore, the amount that should be allocated to the feed can be calculated as follows

= $70,000/$200,000×$240,000

= 0.35×$240,000

= $84,000

Hence the cost that should be allocated to the feed is $84,000

A company manufactures and sells two products: Product A1 and Product C4. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:

Expected Production Direct Labor-Hours Per Unit Total Direct Labor-Hours
Product A1 500 2.0 1,000
Product C4 200 1.0 200
Total direct labor-hours 1,200

The direct labor rate is $27.40 per DLH. The direct materials cost per unit is $281 for Product A1 and $267 for Product C4. The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:

Estimated Expected
Activity Cost Pools Activity Measures Overhead Cost Product C1 Product M2 Total
Labor-related DLHs $558,452 7,200 7,700 14,900
Production orders Orders 75,240 500 600 1,100
General factory MHs 886,410 4,400 4,600 9,000
$1,520,102

The total cost per unit of Product C4 under activity-based costing is closest to: ____________

Answers

Answer:

Unitary cost= $4,207.85

Explanation:

Giving the following information:

Product C4:

Production= 200 units

Direct labor hours per unit= 1

Total DLH= 200

The direct labor rate is $27.40 per DLH.

The direct materials cost per unit is $267

Activity Cost Pools -  Overhead Cost - Product C4 -  Total

Labor-related DLHs $558,452 - 7,700 - 14,900

Production orders Orders $75,240 - 600 - 1,100

General factory MHs $886,410 - 4,600 - 9,000

First, we need to calculate the predetermined overhead rate for each activity:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Labor-related= 558,452/14,900= $37.48 per DLH

Production orders= 75,240/1,100= $68.4 per order

General factory= 886,410/9,000= $98.49 per machine hour

Now, we can allocate overhead to C4 as a whole:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Labor-related= 37.48*7,700= $288,596

Production orders= 68.4*600= $41,040

General factory= 98.49*4,600= $453,054

Total= $782,690

Finally, the total cost and cost per unit:

Total cost= 200*267 + 200*27.4 + 782,690

Total cost= $841,570

Unitary cost= 841,570/200= $4,207.85

Trez Company began operations this year. During this first year, the company produced 100,000 units and sold 80,000 units. The absorption costing income statement for this year follows.

Sales 80,000 units x 45 per unit $3,600,000
Cost of goods sold
- Beginning inventory $__________0
- Cost of goods manufactured (100,000 units x $25 per unit) $2,500,000
- Cost of good available for sale $2,500,000
Ending inventory (20,000 x 25) $500,000
Cost of goods sold $2,000,000
Gross margin $1,600,000
Selling and administrative expenses $580,000
Net income %1,020,000


a. Selling and administrative expenses consist of $400,000 in annual fixed expenses and $2.25 per unit in variable selling and administrative expenses.
b. The company's product cost of $25 per unit is computed as follows:

Direct materials $4 per unit
Direct labor $11 per unit
Variable overhead $4 per unit
Fixed overhead ($600,000/ $100,000 units) $6 per unit

Required:
Prepare an income statement for the company under variable costing.

Answers

Answer:

Income statement for the company under variable costing

Sales (80,000 units x $45)                                                             $3,600,000

Less Cost of Sales

Beginning inventory                                                          $0

Cost of goods manufactured (100,000 units x $19) $1,900,000

Cost of good available for sale                                 $1,900,000

Less Ending inventory (20,000 x $19)                      ($380,000) ($1,520,000)

Contribution                                                                                    $2,080,000

Less Period Costs

Fixed Manufacturing  Overhead                                                     ($600,000)

Selling and administrative expenses - Fixed                                 ($400,000)

Selling and administrative expenses - Variable                             ($180,000)

Net Income / (loss)                                                                            $900,000

Explanation:

Under Variable Costing.

1.Product cost = Variable Manufacturing Costs Only

Therefore, Product cost = $4 + $11 + $ 4

                                        = $19

2.Period Cost = Fixed Manufacturing Overheads + Non - Manufacturing Costs

You purchase a bond with an invoice price of $1,410. The bond has a coupon rate of 6.8 percent, and there are 3 months to the next semiannual coupon date. What is the clean price of the bond? Assume a par value of $1,000.

Answers

Answer:

clean price = $1,393

Explanation:

The clean price of the bond does not include any accrued interests. The invoice price = clean price + accrued interests

invoice price = $1,410accrued interests = $1,000 x 0.068 x 3/12 = $17

clean price = invoice price - accrued interests = $1,410 - $17 = $1,393

Listed below are year-end account balances (in $millions) taken from the records of Symphony Stores. Debit Credit Accounts receivable-trade 694 Building and equipment 924 Cash-checking 38 Interest receivable 40 Inventory 21 Land 166 Notes receivable (long-term) 496 Petty cash fund 8 Prepaid rent 35 Supplies 12 Trademark 45 Accounts payable-trade 642 Accumulated depreciation 77 Additional paid-in capital 468 Allowance for uncollectible accounts 19 Cash dividends payable 24 Common stock, at par 11 Income tax payable 63 Notes payable (long-term) 836 Retained earnings 306 Deferred revenues 33 TOTALS 2,479 2,479 What would Symphony report as total shareholders' equity?

Answers

Answer:

Symphony would  report $ 785 million as total shareholders' equity

Explanation:

Use the Balance Sheet to find the total shareholders' equity as Follows :

Assets

Non-Current Assets

Building and equipment                      924

Land                                                       166

Notes receivable (long-term)               496

Trademark                                              45

Accumulated depreciation                   (77)

Total Non-current assets                   1,554

Current Assets

Accounts receivable-trade                   694

Allowance for uncollectible accounts  (19)

Petty cash fund                                        8

Prepaid rent                                            35

Supplies                                                   12

Cash-checking                                        38

Interest receivable                                 40

Inventory                                                 21

Total Current Assets                             829

Total Assets                                       2,383

Equity and Liabilities

Equity (Balancing figure)                     785

Total Equity                                         785

Non - Current Liabilities

Notes payable (long-term)                 836

Total Non - Current Liabilities            836

Current Liabilities

Accounts payable-trade                    642

Cash dividends payable                      24

Income tax payable                             63

Deferred revenues                              33

Total Current  Liabilities                    762

Total Equity and Liabilities             2,383

Conclusion :

Symphony would  report $ 785 million as total shareholders' equity

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