Question Completion:
Contribution Income Statement for three months ended March 31, 2020:
Sales $600,000
Variable Expense $240,000
Contribution $360,000
Fixed expense $155,000
Operating Income $205,000
Answer:
Universal Travel
Contribution Margin Income Statements at sales levels of $240,000 and $430,000:
Sales $240,000 $430,000
Variable Expense $96,000 $172,000
Contribution $144,000 $258,000
Fixed expense $155,000 $155,000
Operating Income or
(Loss) ($11,000) $103,000
Explanation:
a) Data:
Sales $600,000
Variable Expense $240,000
Contribution $360,000
Fixed expense $155,000
Operating Income $205,000
b) Calculation of the Contribution Margin Ratio = $360,000/$600,000 x 100 = 60%
c) With Contribution Margin Ratio as 60%, the variable cost ratio is calculated as follows:
= 100% - 60% = 40%
This ratio is used to calculate the variable cost, and then the result of the workings follow sequentially. It is assumed that the fixed cost does not change within the relevant sales ranges.
This can also be used to work out different income statement data.
A risky portfolio pays a 15% rate of return with probability 60% in a good state or a 5% return with probability 40% in a bad state, and a T-bill pays 5%. The risk premium on the risky investment is
Answer:
The risk premium on the risky investment is 8%
Explanation:
The first portfolio pays 15% rate of return with probability 60% in a good
The second portfolio 5% return with probability 40% in a bad state
The risk port-folio expected return = 60% * 15% + 40% * 5%
Expected return = 0.6 * 15% + 0.4* 5%
Expected return = 0.09 + 0.02
Expected return = 0.11
Expected return = 11%
Risk premium on the risky investment = Expected return - Risk free rate
= 11% - 5%
= 8%
The risk premium on the risky investment is 8%
Gmeiner Co. had the following current assets and liabilities on December 31 of two recent years: Current Year Previous Year Current assets: Cash $683,000 $649,000 Accounts receivable 605,000 305,000 Inventory 374,000 258,000 Total current assets $1,662,000 $1,212,000 Current liabilities: Current portion of long-term debt $90,000 $80,000 Accounts payable 179,000 159,000 Accrued and other current liabilities 291,000 291,000 Total current liabilities $560,000 $530,000 a. Determine the quick ratio for December 31 of both years. If required, round your answers to one decimal place. Quick Ratio Previous year: Current year: b. How did the quick ratio change between the two balance sheet dates?
Answer:
a. Previous year Quick Ratio is 1.8, while Current year Quick Ratio is 2.3.
b. The quick ratio has increased by 0.5 in abos0lute term which indicates an increase of 27.8% in percentage term between the two balance sheet dates.
Explanation:
a. Determine the quick ratio for December 31 of both years. If required, round your answers to one decimal place.
The quick ratio is a ratio that indicates the ability of company to employ its quick, most liquid or near cash assets to meets its short-term or current liabilities. The ratio is also known as the acid-test test ratio and can be estimated using the following formula:
Quick ratio = (Total Current assets - Inventory) / Total current liabilities
Using the formula above, we have:
Previous year Quick Ratio = ($1,212,000 - $258,000) / $530,000 = 1.8
Current year Quick Ratio = ($1,662,000 - $374,000) / $560,000 = 2.3
b. How did the quick ratio change between the two balance sheet dates?
This can be determined both in absolute term and in percentage term as follows:
Absolute change = Current year Quick Ratio - Previous year Quick Ratio = 2.3 - 1.8 = 0.5 increase
Percentage change = (Current year Quick Ratio - Previous year Quick Ratio) / Previous year Quick Ratio = [(2.3 - 1.8) / 1.8] * 100 = 27.8%
From the above, the quick ratio has increased by 0.5 in abos0lute term which indicates an increase of 27.8% in percentage term between the two balance sheet dates.
A bakery sells individual cupcakes for $3, and boxes of 12 cupcakes for $30. A customer enters the bakery.This customer purchases 15 cupcakes—1 box for $30, and 3 individual cupcakes for $3 each. Which of the following must be true of the customer’s willingness to pay?
1) The customer would not have purchased the cupcakes if the price for all 15 had been $45.
2) The customer’s willingness to pay for the 15 cupcakes is $39.
3) The customer’s willingness to pay for 12 cupcakes is $30.
4) The customer’s willingness to pay for 16 cupcakes is less than $42.
Answer:
2) The customer’s willingness to pay for the 15 cupcakes is $39.
3) The customer’s willingness to pay for 12 cupcakes is $30.
Explanation:
The willingness to pay for a good is the highest amount a consumer is willing to pay for a good or service.
The price of 15 cupcakes purchased = $30 + $9 = $39
On January 1, 2019, Woodstock, Inc. purchased a machine costing $37,850. Woodstock also paid $1,950 for transportation and installation. The expected useful life of the machine is 7 years and the residual value is $4,100. How much is the annual depreciation expense, assuming use of the straight-line depreciation method
Answer:
Annual depreciation expense=$5,100
Explanation:
Using the straight line method , an equal amount is charged as depreciation for each each over the estimated useful life of the asset.
Annual depreciation = (Cost - residual value)/Estimated number of years
Cost of the machine= 37,850 + 1,950 = 39,800
Annual depreciation expense= (39,800-4,100)/7= 5,100
Annual depreciation expense=$5,100
You have an opportunity to invest in Australia at an interest rate of 8%. Moreover, you expect the Australian dollar (A$) to appreciate by 2%. Your effective return from this investment is
Answer:
10.16%
Explanation:
The computation of the effective return for this investment is shown below:
Let us assume that we invested an amount in Australian dollars 100
The return is 8%
After one year, the amount is 108
Now the converting amount is 110.16 (108 × 102%)
Now the effective rate for this investment is
= 110.16 - 100
= 10.16%
2. Explain how advertising and sales practices fed consumer demand during the late 1800s. What were the specific tactics used
Answer with its Explanation:
In the 1800s, advertising was done in local newspapers and in a number of magazines. The cost of advertising in newspapers was very high in those days because the only source of communication with the public was newspaper and magazines.
The designing of copying and opting to art was very common in those days which was adopted to attract key customers and placement of the advertisements in a specific place which would result in higher sales was also common to attract customer attention.
The telephone was invented in 1876, but still telemarketing started in 1970s. So the primary source of advertising and sales promotions was either by newspaper and magazines or face to face selling.
Answer:
B. The way enslaved children were fed
Explanation:
In a liquidation proceeding, if the proceeds on the realization of an asset exceed the lien against that asset, the excess is assigned to
Answer:
The excess is assigned to the employer.
Explanation:
The employer has the full right to initiate a claim process for the surplus or outstanding amount that the employee owes and that is not enough to compensate with the liquidation.
Identify the internal control weakness in the following situations. State how the person can hurt the company.
A. Jerry Miller works as a security guard at ALTEX parking in Denver. Miller has a master key to the cash box where commuters pay for parking. Each night Miller prepares the cash report that shows (a) the number of cars that parked on the lot and (b) the day’s cash receipts. Sandra Covington, the ALTEX treasurer, checks Miller’s figures by multiplying the number of cars by the parking fee per car. Covington then deposits the cash in the bank.
B. Sharon Fisher is the purchasing agent for Manatee Golf Equipment. Fisher prepares purchase orders based on requests from division managers of the company. Fisher faxes the purchase order to suppliers who then ship the goods to Manatee. Fisher receives each incoming shipment and checks it for agreement with the purchase order and the related invoice. She then routes the goods to the respective division managers and sends the receiving report and the invoice to the accounting department for payment.
C. The external auditor for Mattson Financial Services takes a global view of the audit. To form his professional opinion of Mattson’s financial statements, the auditor runs no tests of Mattson’s financial statements or of the underlying transactions. Instead, the auditor computes a few ratios and compares the current-year ratio values to the ratio values a year ago. If the ratio values appear reasonable, the auditor concludes that Mattson’s financial statements are okay.
Answer:
Identification of the Internal Control Weaknesses:
A. There is no segregation of duties and there is lack of access control. Jerry Miller as a security guard is not expected to have a master key to the cash box. With this he can pilfer the cash. If he prepares the report that shows the number of cars that parked on the lot, he is not supposed to also prepare the day's cash receipts. Otherwise, he can state any number of cars as parked that he likes, and which corresponds to the cash he might leave in the Cash box since he also has a master key.
B. There is no segregation of duties and there is lack of supervision, proper reconciliations, and assets audit. Sharon Fisher handles purchase transactions from the beginning to the close all alone with a third party. This exposes the company to procurement frauds and collusion with suppliers. She can purchase assets for the company at prices that would enrich her personally.
C. Forming an audit opinion on the basis of ratio analysis of last year's comparative financial statements exposes the company to audit risks. While ratio analysis is part of the basis for forming audit opinions, it is surely not the first audit procedure to obtain audit evidence to support his audit opinion on the financial statements. An auditor is expected to obtain sufficient audit evidence and perform audit substantive tests of financial statement assertions. He or she is also expected to review the internal control system to ensure that it is operating effectively after establishing its existence and reviewing changes in internal controls.
Explanation:
Internal Controls are controls established by management in order to help it achieve business goals. There are many internal controls, including Separation of Duties, Access Controls , Authorization and Approvals, Asset Audits, Reconciliations, and Data Backups. The purposes of internal controls are to establish the reliability of financial reporting, ensure timely feedback on the achievement of operational or strategic goals, and achieve compliance with financial management laws, and accounting regulations.
Inventory records for Dunbar Incorporated revealed the following: Date Transaction Number of Units Unit Cost Apr. 1 Beginning inventory 470 $ 2.37 Apr. 20 Purchase 410 2.72 Dunbar sold 580 units of inventory during the month. Ending inventory assuming FIFO would be:
Answer:
Ending inventory= $816
Explanation:
Giving the following information:
Apr. 1 Beginning inventory 470 $2.37
Apr. 20 Purchase 410 $2.72
Dunbar sold 580 units of inventory during the month.
To calculate the ending inventory under the FIFO (first-in, first-out) method, we need to use the cost of the last units incorporated into inventory.
Units in ending inventory= 880 - 580= 300
Ending inventory= 300*2.72= $816
Griffin's Goat Farm, Inc., has sales of $604,000, costs of $255,000, depreciation expense of $53,000, interest expense of $35,000, and a tax rate of 23 percent. What is the net income for this firm
Answer:
The answer is $200,970
Explanation:
Solution
Given that
Now
Sales =$604,000
Costs= $255,000
Depreciation=$53,000
Thus
EBIT (Earnings before taxes and interest)=$296,000
The interest Expense = $35,000
Taxable income =$200,970
Taxes($261,000 * 23% =$60,030
The net income = $200,970
Therefore the net income for the firm is $200,970
Answer:
$200,970
Explanation:
Hope this helps
g "Which philosophy in setting budgeted amounts assumes both the complete elimination of inefficiencies and a level of absolute efficiency?"
Answer:
The total quality management approach
Explanation:
This philosophy is the total quality management approach.
Total quality management has to do with the efforts to enforce and make sustainable climate where employees can continuous to improve their ability to provide on demand products and give those services that customers perceive to be of particular value when they demand for them.
If a tax cut of $12 billion causes real GDP to increase by $36 billion, then the tax multiplier is:________.
a) 2.
b) 3.
c) 4
d) 5.
Answer:
If a tax cut of $12 billion causes real GDP to increase by $36 billion, then the tax multiplier is:________.
b) 3.
Explanation:
The tax multiplier is the effect of tax on aggregate demand, government spending, and industrial investment (GDP). A tax cut increases the marginal propensity to consume and to save, which in their turns increase the aggregate demand and investments, which are important ingredients in the calculation of a country's Gross Domestic Product (GDP). A tax cut also decreases government's ability to spend, which also affects the GDP negatively. It has been established that to stimulate GDP growth, economies have relied on cutting taxes at some times.
The proportion of the tax cut to the GDP is 12: 36 in this case equals 1 : 3, therefore, the tax multiplier is 3.
Twist Corp. has a current accounts receivable balance of $457,615. Credit sales for the year just ended were $2,940,600.a. What is the company's receivables turnover? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)
b. What is the company's days' sales in receivables? (Use 365 days a year. Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)
c. How long did it take on average for credit customers to pay off their accounts during the past year? (Use 365 days a year. Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)
Answer and Explanation:
The computations are as follows
a. For company receivable turnover
As we know it is
= Credit Sales ÷ current account receivable balance
= $2,940,600 ÷ $457,615
= 6.43 times
b.
Now
company's days' sales in receivables is
= 365 ÷ Receivables turnover ratio
= 365 ÷ 6.43
= 56.77 days
c. Therefore the average collection period is the same as days sales in receivable i.e 56.77 days
Technology can be used to leverage __________ and _____________ within organizations as well as with customers and suppliers beyond their boundaries.
Answer: human capital; knowledge
Explanation:
Technology plays an important role in the economy. Every businesss needs to make use of technology in order to achieve efficiency and effectiveness at work.
Technology can be used to leverage both human capital and knowledge within organizations as well as with customers and suppliers beyond their boundary. Technology helps to improve relationship with customers
Suppose the wealth effect is such that a $10 change in wealth produces a $2 change in consumption at each level of income. Assume real estate prices tumble such that wealth declines by $160. Instructions: Enter your answers as whole numbers. a.What will be the new level of consumption at the $680 billion level of disposable income
Answer: $632 billion
Explanation:
The wealth effect is such that a $10 change in wealth produces a $2 change in consumption. This means that for every change in wealth, we can expect a change of;
= 2/10
= 20 % of the wealth figure in consumption.
Real Estate prices have tumbled and prices decreased by $160.
That means that consumption decreased by;
= 160 * 20%
= $32
At the $680 billion level of disposable income, Consumption was $664 billion. The new Consumption figure is therefore;
= 664 - 32
= $632 billion
Job 303 includes direct materials costs of $550 and direct labor costs of $400. If the predetermined overhead allocation rate is 40% of direct labor cost, what is the total cost assigned to Job 303
Answer:
180
Explanation: Divide 550 and 400 and equal 40% over x
The Internet helps consumers make well-informed decisions because of
which of the following?
O A. It speeds up the pace of both production and consumption
B. It provides the information that is crucial for making good choices
O O
O c. Private financial information can be handled more securely.
D. E-commerce makes it more convenient to purchase goods.
Answer:
B. It provides the information that is crucial for making good choices
Explanation:
The internet is mainly a worldwide network where information flows between all the participants (internet users). For this reason, the Internet has a great flow of information about consumer goods that individuals use to make well-informed purchase decisions.
Answer: The answer is B. or "It provides the information that is crucial for making good choices."
Explanation: It took the test or at least a very similar test.
A product found in homes built before 1978 is harmful to children. It can lead to birth defects and is generally hazardous. It should only be cleaned up by specialists, and is a required disclosure for sales of real property. What environmental hazard is this?
Answer:
Asbestos
Explanation:
This environmental hazard is asbestos. Exposure to asbestos especially for a long term period is very detrimental to health. It's fibres can be easily inhaled to the lungs which is dangerous and can cause fibrotic lung disease and also lung cancer. It can lead to defects in birth when inhaled by a pregnant woman and many other health problems. During sales of property it is very important that such hazard is disclosed to the other party.
Henri earned a salary of $50,000 in 2001 and $70,000 in 2006. The consumer price index was 177 in 2001 and 265.5 in 2006. Henri's 2006 salary in 2001 dollars is
Answer:
Henri's 2006 salary in 2001 dollars =$46,666.66
Explanation:
A rise in the price index implies inflation
Inflation is the increase in the general price level. Inflation erodes the value of money.
This price index is the weighted average price of a basket of goods and services consumed by a typical consumer. It is used to measure the rate of inflation.
So we can determine the salary in the base year value as follows:
2006 Salary in the base year terms=
CPI base year/CPI in the current year × salary in the current year
CPI base year- 177, CPI in the current yea- 256.5,
Salary in the current year - 70,000
Henri 2006 Salary in 2001 Dollar
=177/265.5 ×70,000/265.5 = 46,666.66
Henri's 2006 salary in 2001 dollars =$46,666.66
Common Stockholders' Profitability Analysis A company reports the following:
net income : $375,000
Preferred dividends : 75,000
Average stockholders' equity 2,500,000
Average common stockholders' equity : 1,875,000
Determine :
(a) the rate earned on stockholders' equity
(b) the rate earned on common stockholders' equity.
Answer:
(A) Rate earned on stockholder's equity=15%
(B) Rate earned on common stockhloder's equity= 16%
Explanation:
A company reports the following profitability analysis
Net income of $375,000
Preferred dividend of $75,000
Average stockhloder's equity of $2,500,000
Average common stockhloder's equity of $1,875,000
(A) The rate earned on stockholder's equity can be calculated as follows
= Net income/Average stockholders equity
= $375,000/$2,500,000
= 0.15×100
= 15%
(B) The rate earned on common stock holder's equity can be calculated as follows
= Net income-Preferred dividend/Average common equity
= $375,000-$75,000/$1,875,000
= $300,000/$1,875,000
= 0.16×100
= 16%
Hence the rate earned on stockholder's equity and common stockhloder's equity is 15% and 16% respectively.
Anthony Roofing's budgeted manufacturing costs for 50,000 squares of shingles are: Fixed manufacturing costs $30,000 Variable manufacturing costs $20.00 per square Anthony Roofing actually produced 40,000 squares of shingles during March. How much are the total budgeted manufacturing costs in March for the 40,000 squares of shingles
Answer:
Total budgeted manufacturing cost = $824,000
Explanation:
The total budgeted manufacturing cost is the sum of the variable and fixed manufacturing cost
The fixed manufacturing cost of $30,000 would be absorbed (i.e charged to the units produced using overhead absorption rate (OAR).
OAR = Budgeted fixed manufacturing cost / Budgeted production squares
= $30,000 / 50,000 squares = $0.6 per square
Absorbed fixed manufacturing cost= OAR × actual production of squares
Absorbed fixed manufacturing cost= $0.6 × 40,000 = $24,000
Variable manufacturing cost = $20.00 × 40,000 =800,000
Total budgeted manufacturing cost = $24,000 + $800,000 = $824,000
Total budgeted manufacturing cost = $824,000
Richards Corporation uses the weighted-average method of process costing. The following information is available for October in its Fabricating Department:
Units:Beginning Inventory: 90,000 units, 70% complete as to materials and 20% complete as to conversion.Units started and completed: 270,000.Units completed and transferred out: 360,000.Ending Inventory: 35,000 units, 40% complete as to materials and 15% complete as to conversion.Costs:Costs in beginning Work in Process - Direct Materials: $47,200.Costs in beginning Work in Process - Conversion: $89,700.Costs incurred in October - Direct Materials: $759,920.Costs incurred in October - Conversion: $929,300.Calculate the cost per equivalent unit of materials.
a. $2.80b. $2.50c. $2.04d. $2.36e. $2.16
Answer:
e. $2.16
Explanation:
Richards Corporation
Weighted-Average Method
Fabricating Department:
Particulars Units % of Completion Equivalent Units
Materials Conversion Materials Conversion
Completed &
transferred out: 360,000 100 100 360,000 360,000
Ending Inv: 35,000 40% 15% 14000 5250
Equivalent Units 374,000 365250
Costs Direct Materials Conversion
Beg. Work in Process - : $47,200 $89,700
Costs incurred in October - $759,920 $929,300
Total Costs 807,120 1,019,000
Cost Per Equivalent Unit = Total Costs/ Equivalent Units
Cost Per Equivalent Unit Materials = 807120/ 374,000= $ 2.158 ≅$ 2.16
We divide the total costs of Materials with the total Equvilant units of Materials to get Cost Per Equivalent Unit of Materials which is 2.16
Nordstrom, Inc. operates department stores in numerous states. Suppose selected financial statement data (in millions) for 2014 are presented below.
End of Year Beginning of Year
Cash and cash equivalents $ 795 $ 72
Accounts receivable (net) 2,035 1,942
Inventory 898 900
Other current assets 326 303
Total current assets $4,054 $3,217
Total current liabilities $2,014 $1,601
For the year, net credit sales were $8,258 million, cost of goods sold was $5,328 million, and net cash provided by operating activities was $1,251 million.
Instructions:
Compute the current ratio, current cash debt coverage, accounts receivable turnover, average collection period, inventory turnover, and days in inventory at the end of the current year.
Answer:Please see explanation for answers
Explanation:
A) Current Ratio = Current Assets / Current Liabilities
Total Current Assets = $4,054million
Total Current Liabilities = $2,014million
Current Ratio = 4,054 / 2,014 = 2.01 : 1
B. Current Cash Debt Coverage Ratio = Cash flow Provided by Operating Activities / Average Current Liabilities
Average Current Liabilities = 2,014 + 1,601= 3,615 / 2 = $1,807.5
Current Cash Debt Coverage Ratio = 1,251 / 1,807.5 = 0.6921
C. Accounts receivable Turnover = Net Sales / Average Accounts Receivables
Average Account Receivable = 2,035 + 1,942= 3,977 / 2 = $1,988.50million
Net Sales = $8,258million
Account Receivable Turnover = 8,258million / 1,988.50million = 4.15 Times
D. Average Collection Period: 365 / Account Receivable Turnover
Average Collection Period = 365 / 4.15 = 87.95 Days
E. Inventory Turnover = Cost of Goods Sold / Average Inventory
Cost of Goods Sold = 5,328million ,
Average Inventory = 898 + 900 =1,798 / 2 = 899
Inventory Turnover = 5,328 / 899 = 5.93 Times
F. Days in Inventory = 365 / Inventory Turnover Ratio
Days in Inventory = 365 / 5.93 = 61.55 Days
Tanner-UNF Corporation acquired as a long-term investment $200 million of 7% bonds, dated July 1, on July 1, 2018. The market interest rate (yield) was 9% for bonds of similar risk and maturity. Tanner-UNF paid $160 million for the bonds. The company will receive interest semiannually on June 30 and December 31. Company management is holding the bonds in its trading portfolio. As a result of changing market conditions, the fair value of the bonds at December 31, 2018, was $170 million.
Required:
1. Prepare the journal entry to record Tanner-UNF’s investment in the bonds on July 1, 2018 and interest on December 31, 2018, at the effective (market) rate.
2. Prepare any additional journal entry necessary for Tanner-UNF to report its investment in the December 31, 2018, balance sheet.
3. Suppose Moody’s bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2019, for $150 million. Prepare the journal entries to record the sale.
Answer:
1. Prepare the journal entry to record Tanner-UNF’s investment in the bonds on July 1, 2018 and interest on December 31, 2018, at the effective (market) rate.
July 1, investment in UNF bonds
Dr Investment in bonds HTM 200,000,000
Cr Cash 160,000,000
Cr Discount on bonds 40,000,000
December 31, interest revenue from investment in bonds
Dr Cash 7,000,000
Dr Discount on bonds 200,000
Cr Interest revenue 7,200,000
Discount on bonds = ($160,000,000 x 4.5%) - ($200,000,000 x 3.5%) = $7,200,000 - $7,000,000 = $200,000
2. Prepare any additional journal entry necessary for Tanner-UNF to report its investment in the December 31, 2018, balance sheet.
Investment in bonds HTM = $200,000,000 (face value) - $39,800,000 (discount on bonds) = $160,200,000
Changes in the market value of bonds held to maturity are not considered by the company.
4. Suppose Moody's bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2019, for $310.0 million. Prepare the journal entry to record the sale.
Dr Cash 150,000,000
Dr Dr Discount on bonds 39,800,000
Dr Loss on investment in bonds HTM 10,200,000
Cr Investment in bonds HTM 200,000,000
Company A is a manufacturer with current sales of $3,700,000 and a 60% contribution margin. Its fixed costs equal $1,810,000. Company B is a consulting firm with current service revenues of $3,800,000 and a 20% contribution margin. Its fixed costs equal $330,000.Compute the degree of operating leverage (DOL) for each company.Identify which company benefits more from a 20% increase in sales.Company ACompany B
Answer:
Company A 5.41
Company B 1.76
Company A benefits more from a 20% increase in sales.
Explanation:
The computation of the degree of operating leverage is shown below:-
Particulars Company A Company B
Sales $3,700,000 $3,800,000
Less:
Variable cost $1,480,000 $3,040,000
($3,700,000 × 40%) ($3,800,000 × 80%)
Contribution
margin $2,220,000 $760,000
($3,700,000 × 60%) ($3,800,000 × 80%)
Less:
Fixed cost $1,810,000 $330,000
Pretax income $410,000 $430,000
After this we need to go further so that we can find out the degree of operating leverage For both company
For Company A
= Contribution margin ÷ Pretax income
= $2,220,000 ÷ $410,000
= 5.41
For company B
= Contribution margin ÷ Pretax income
= $760,000 ÷ $430,000
= 1.76
So, from the above calculation we can see that Company A is higher than Company B.
A coin collector treasures his 1969minusS doubled die obverse Lincoln cent because he found it in his pocket change, rather than purchasing it. He can sell it on the open market for $35,000, but would only sell it for at least twice that price, due to its sentimental value to him. It is anticipated that the coin will increase in market value in the foreseeable future. What is the value of the coin?
Answer:
$35,000
Explanation:
The value of the coin is equivalent to the selling price i.e $35,000
As it is mentioned in the question that coin would be sell in the open market instead of purchasing it
Since the coin is sold at the open market so the same is to be considered
And, therefore the value of the coin is $35,000
Hence, the first option is correct
Watters Umbrella Corp. issued 20-year bonds 2 years ago at a coupon rate of 6.4 percent. The bonds make semiannual payments. If these bonds currently sell for 110 percent of par value, what is the YTM
Answer:
2.78%
Explanation:
The YTM formula is:
YTM = {coupon + [(face value - market value)/n]} / [(face value + market value)/2]
coupon = $32face value = $1,000market value = $1,000 x 110 = $1,100n = 18 x 2 = 36YTM = {$32 + [($1,000 - $1,100)/36]} / [($1,000 + $1,100)/2] = $29.222 / $1,050 = 2.78%
2. Consumption and saving definitions Suppose Ana gets a sales bonus at her place of work that gives her an extra $600 of disposable income. She chooses to spend $480 and save the remaining $120. From this, you can tell that Ana's marginal propensity to consume (MPC) is , and her marginal propensity to save (MPS) is . Mathematically, it must always be true that: Consumption = Therefore, it must also be true that: MPC =
Answer:
From this, you can tell that Ana's marginal propensity to consume (MPC) is 0.80, and her marginal propensity to save (MPS) is 0.20. Mathematically, it must always be true that: Consumption = Therefore, it must also be true that: MPC = 1 - MPS.
Explanation:
Marginal propensity to consume refers to amount that a household decides to spend of every extra dollar that they earn. Since you either spend or save money, the marginal propensity to save is the portion that you decided not to spend, and therefore, save.
In the United States banking policies and procedures are set by the:
-president
-senate
-House of representatives
-federal reserve
Answer:
Federal Reserve.
Explanation:
Federal Reserve is a large central bank in Washington, D.C. that was founded in 1913. It lends money to other, smaller banks.
McCarthy Company has inventory... McCarthy Company has inventory of 8 units at a cost of $200 each on October 1. On October 2, it purchased 20 units at $205 each. 11 units are sold on October 4. Using the FIFO perpetual inventory method, what is the value of inventory after the October 4 sale
Answer:
Ending inventory= $3,485
Explanation:
Giving the following information:
Beginning inventory= 8 units for $200 each
On October 2= purchased 20 units at $205 each.
11 units are sold on October 4.
under the FIFO (first-in, first-out) inventory method, the ending inventory is calculated using the cost of the last units incorporated into inventory.
Ending inventory= 17*205= $3,485