Answer:
Option C
Explanation:
Entry: DEBIT CREDIT
Work in Process Inventory 16,640
Manufacturing Overhead(w) 4,160
Wages Payable 20,800
Working: Manufacturing Overhead = 20,800 x 40% = $4,160
Note: In order to find out the work in progress and manufacturing Overhead we will consider sum of all direct cost as Work in progress and allocate the sum of indirect to Manufacturing Overheads.
Buhao Construction currently is all-equity-financed. It has 17,000 shares of equity outstanding, selling at $100 a share. The firm is considering a capital restructuring. The low-debt plan calls for a debt issue of $270,000 with the proceeds used to buy back stock. The debt will pay an interest rate of 11%. The firm pays no taxes.
a. What will be the debt-to-equity ratio if it borrows $220,000? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Debt-to-equity ratio
b. If earnings before interest and tax (EBIT) are $130,000, what will be earnings per share (EPS) if Reliable borrows $220,000? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
EPS $
c. What will EPS be if it borrows $420,000? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
EPS $
Answer:
Buhao Construction
a) Debt-to-Equity Ratio if it borrows $220,000
= Debit/Equity
= $220,000/$1,700,000
= 12.94%
b. EPS = $195,800/17,000
= $11.52
c. EPS = $173,800/17,000
= $10.22
Explanation:
a) Data and Calculations:
Outstanding Equity = 17,000 shares x $100 = $1,700,000
Interest rate = 11%
It is assumed that Buhao Construction pays no taxes
EBIT = $130,000
Debit = $220,000
Interest Expense = $24,200
Net Income = $195,800 ($220,000 - 24,200)
Debit = $420,000
Interest Expense = $46,200
Net Income = $173,800 ($220,000 - 46,200)
b) Debt-to-Equity Ratio of Buhao Construction is the relationship in ratio terms between debts and equity of the company. It shows the percentage of debts over the stockholders' equity.
c) EPS or Earnings per share shows the net income of Buhao Construction that can be attributed to each share. Stockholders use this measure to learn the profits that are generated for each share by the company during the period. A high EPS indicates that the business is profitable for stockholders.
Q 7.34: At the end of a shift, the sales clerk turned over $21,476.38 in cash, checks, and credit card receipts to the cashier. When the supervisor looked at the cash register tape for that shift, the tape stated that the sales clerk had sold $21,478.23 in merchandise. What should the company do as a result of this difference
Answer:
A cash shortage of $1.85 has occurred. The sales clerk must have taken away more in tips than she should.
The company can ask the sales clerk to refund the sum of $1.85 shortage provided it allows the sales clerk also to take away overages. If not, the shortage can be taken from the overtages, if any.
Explanation:
In handling cash, shortages and overages occur. The best policy is to prevent such shortfall and excess in cash handling as they can lead to other problems. But, where the shortages and overages are tolerable, the company should accommodate them by creating clear company policies about the issues. Policies provide guides to employees so that they know what they are ordinarily expected to do.
On January 1, 20X7, Server Company purchased a machine with an expected economic life of five years. On January 1, 20X9, Server sold the machine to Patron Corporation and recorded the following entry:
Cash 45,000
Accumulated Depreciation 28,000
Machine 70,000
Gain on Sale of Equipment 3,000
Patron Corporation holds 75 percent of Server's voting shares. Server reported net income of $50,000, and Patron reported income from its own operations of $100,000 for 20X9. There is no change in the estimated economic life of the equipment as a result of the intercorporate transfer. Based on the preceding information, in the preparation of the 20X9 consolidated income statement, machine will be what amount and will it be debited or credited in the consolidation entry?
Answer:
Consolidation entry is given below
Explanation:
Consolidated Entry DEBIT CREDIT
Machinery(w) $42,000
Loss on purchase $3,000
Cash $45,000
NOTE: We will record a loss in consolidation entry because the consideration paid is greater than the machinery's carrying value.
Working
Carrying value = Net book value - Accumulated Depreciation
Carrying value = $70,000 - $28,000
Carrying value = $42,000
A company discarded a computer system originally purchased for $18,000. The accumulated depreciation was $17,200. The company should recognize a(an):
Answer:
The company should recognize a $800 loss.
Explanation:
Depreciation is the loss of value of an asset over its useful life, and because of the accrual principle, this depreciation is matched, as an expense, with the revenues that the asset produces in a specific period of time.
In this case, the company has expensed $17,200 over the computer system useful life. When the computer system was finally discarded, $800, representing the difference between the accumulated depreciation and the original cost of the system, where not expensed. For this reason, this $800 have to be recognized as a loss.
Swing Co. has 9% annual coupon bonds that are callable and have 18 years left until maturity. The bonds have a par value of $1,000, and their current market price is $1,130.35. However, Swing Co. may call the bonds in eight years at a call price of $1,060. What are the YTM and the yield to call (YTC) on Swing Co.’s bonds?
Answer:
YTM = 7.77%
YTC = 7.62%
Explanation:
YTM = {coupon + [(face value - market value)/n]} / [(face value + market value)/2]
YTM = {90 + [(1,000 - 1,130.35)/18]} / [(1,000 + 1,130.35)/2]
YTM = 82.758333 / 1,065.175 = 0.07769 = 7.77%
YTC = {coupon + [(call value - market value)/n]} / [(call value + market value)/2]
YTC = {90 + [(1,060 - 1,130.35)/8]} / [(1,000 + 1,130.35)/2]
YTC = 81.20625 / 1,065.175 = 0.07623 = 7.62%
A corporate bond pays 3% of its face value once per year. If this $4 comma 000 10-year bond sells now for $4 comma 450, what yield will be earned on this bond? Assume the bond will be redeemed at the end of 10 years for $4 comma 000.
Answer:
The answer is 1.76%
Explanation:
N(Number of periods) = 10 years
I/Y(Yield to maturity) = ?
PV(present value or market price) = $4,450
PMT( coupon payment) = $120 (7 percent x $4,000)
FV( Future value or par value) = $4,000.
We are using a Financial calculator for this.
N= 10; PV = -4,450; PMT = 120; FV= 4,000;
CPT I/Y= 1.76
Therefore, the Yield-to-maturity of the bond is bond is 1.76%
A consumer values a car at $30,000 and a producer values the same car at $20,000. What amount of tax will result in unconsummated transaction
The question is incomplete:
A consumer values a car at $30,000 and a producer values the same car at $20,000. If the transaction is completed at $24,000, what level of sales tax will result in unconsummated transaction?
a. 0%
b. 25%
c. 20%
d. 40%
Answer:
d. 40%
Explanation:
The unconsummated transaction would occur when the price that the customer has to pay is higher than the value that he gave to the car. According to that, the answer would be the tax that would increase the final price to more than $30,000:
0%: $24,000
25%: 24,000*1.25= $30,000
20%: 24,000*1.20= $28,800
40%: 24,000*1.40= $33,600
The answer is that the amount of tax will result in an unconsummated transaction is 40%.
Barnes Company uses a job order cost system. The following data summarize the operations related to production for October:
October 1 Materials purchased on account, $315,500.
2 Materials requisitioned, $290,100, of which $8,150 was for general factory use.
31 Factory labor used, $489,500, of which $34,200 was indirect.
31 Other costs incurred on account for factory overhead, $600,000; selling
expenses, $150,000; and administrative expenses, $100,000.
31 Prepaid expenses expired for factory overhead were $18,000; for selling
expenses, $6,000; and for administrative expenses, $5,000.
31 Depreciation of office building was $30,000; of office equipment, $7,500;
and of factory equipment, $60,000.
31 Factory overhead costs applied to jobs, $711,600.
31 Jobs completed, $1,425,000.
31 Cost of goods sold, $1,380,000.
Required:
Journalize the entries to record the summarized operations.
Answer:
October 1
Raw Materials Inventory $315,500 (debit)
Accounts Payable $315,500 (credit)
October 2
Work In Process : Direct Materials $281,950 (debit)
Work In Process : Indirect Materials $8,150 (debit)
Raw Materials $290,100 (credit)
October 31
Work In Process : Direct Labor $455,300 (debit)
Work In Process : Indirect Labor $34,200(debit)
Salaries Payable $489,500 (credit)
October 31
Work In Process : Factory Overhead $600,000 (debit);
Selling expenses $150,000 (debit)
Administrative expenses, $100,000 (debit)
Accounts Payable $850,000 (credit)
October 31
Factory Overhead $18,000 (debit);
Selling Expenses, $6,000 (debit)
Administrative expenses, $5,000 (debit)
Prepaid Factory Overhead were $18,000 (credit);
Prepaid Selling Expenses, $6,000 (credit)
Prepaid Administrative expenses, $5,000 (credit)
October 31
Depreciation : office building $30,000 (debit)
Depreciation : office equipment, $7,500 (debit)
Work In Process - Depreciation : factory equipment, $60,000 (debit)
Accumulated Depreciation : Buildings $30,000 (credit)
Accumulated Depreciation : Equipment $67,500 (credit)
October 31
Work In Process : Factory Overheads $711,600 (debit)
Factory Overheads $711,600 (credit)
October 31
Finished Good $1,425,000 (debit)
Work In Process Account $1,425,000 (credit)
October 31
Cost of Goods Sold $1,380,000 (debit)
Finished Goods $1,380,000 (credit)
Explanation:
Manufacturing Costs are accumulated in the Work In Process Account.
When Jobs are completed, De-recognize the cost of jobs completed from Work In Process Account into the Finished Goods Account.
When Jobs are Sold, De-recognize the cost of jobs sold from the Finished Goods Account into the Trading Account.
Jenny promises National Bank that she will repay the loan that National Bank makes to Garrett if Garrett fails to pay it. In this instance, Jenny is the:
Answer: b. guarantor.
Explanation:
Guarantors who can also be called Sureties, are people who promise to pay the debt of another person if that person fails to honor the debt obligation. To be a Guarantor, you must have assets that will be able to cover the debt and you will probably have to pledge the assets to be collateral for the debt. Having a Guarantor increases the trust that the lender has in the lendee.
Jenny is a Guarantor as she has promised to repay the loan should Garrett default on it.
Power Manufacturing recorded operating data for its shoe division for the year. Sales $1,500,000 Contribution margin 300,000 Controllable fixed costs 180,000 Average total operating assets 600,000 How much is controllable margin for the year
Answer:
Controllable margin for the year is $120,000.
Explanation:
Controllable margin refers to contribution margin minus controllable fixed costs. Controllable margin is usually employed to assess the performance of managers because all the costs that the profit center manager can control are included in the calculation of controllable margin.
Based on the explanation above, controllable margin for this question can therefore be calculated as follows:
Controllable margin = Contribution margin - Controllable fixed costs = $300,000 - $180,000 = $120,000
Therefore, controllable margin for the year is $120,000.
On July 9, Mifflin Company receives a $10,400, 90-day, 8% note from customer Payton Summers as payment on account. What entry should be made on July 9 to record receipt of the note
Answer: Debit Notes Receivable $10,400; credit Accounts Receivable $10,400.
Explanation:
Mifflin Company is receiving the note back from Payton Summers which means that Payton Summers intends to settle their account. The correct entry to record therefore is one that closes off the Notes Receivable account by debiting it as it was on a credit balance.
The other account would be the Accounts Receivable account which would need to be credited by the amount owed to close off the account as it was on a debit balance as Accounts Receivables are when customers are still owing.
Gingrich Corporation issued $2,000,000 in bonds on January 1, 2020. The bonds have a coupon rate of 1.5% and pay interest semi-annually on July 1st and January 1st. The bonds have a 10 year term. The market rate at the issue date is 3.9%. What amount of interest expense will be recorded on July 1, 2020 (the first interest payment)
Answer:
$31,310.35
Explanation:
Face value = 2,000,000
Semiannual interest = 2,000,000 *0.015 * 6/12= 15,000
Semiannual yield = 3.9*6/12= 1.95%
Semiannual months = 10*2= 20
Issue price =[PVA 1.95%,20 * Interest] + [PVF 1.95%,20 * Face value]
Issue price = [16.43061*15,000]+ [ .67960* 2,000,000]
Issue price = 246459.10+ 1,359,200
Issue price = $1,605,659.10
The amount of interest expense to be recorded on July 1, 2020 (the first interest payment = Issued price * Semi annual yield
= $1,605,659.10 * 1.95%
=$1,605,659.10 * 1.95%
=$31,310.35
Thus, the amount of $31,310.35 will be recorded as the interest expense on July 1, 2020
Wolfpack Construction has the following account balances at the end of the year. Accounts Balances Equipment $ 19,000 Accounts payable 1,600 Salaries expense 26,000 Common stock 12,000 Land 11,000 Notes payable 13,000 Service revenue 32,000 Cash 4,600 Retained earnings ?
Answer:
$6,000
Explanation:
Net income for the year = Service revenue - Salaries
= $32,000 - $26,000
= $6,000
Since Net income = retained earnings,
Therefore, retained earnings = $6,000
"A municipality has a tax rate of 18 mills. A piece of real property in the municipality is assessed at $180,000 and has a fair market value of $165,000. The annual tax liability on the property is:"
Answer:
$3,240
Explanation:
Calculation for the annual tax liability on the property
Using this formula
Annual tax liability= (Tax rate× Real property )
Where= Tax rate =18 million
Real property=180,000
Let plug in the formula
Annual tax liability=( .018x180000)
Annual tax liability=$3,240
Therefore the annual tax liability on the property is $3,240
Use the information provided below to answer the following question (same for set of 5 questions). Nash began April with accounts receivable of $49,000 and a credit balance in Allowance for Uncollectible Accounts of $1,000. They made $500,000 in credit sales (sales on account) during April. Collections from customers totaled $493,003. One customer, frank Jones, could not pay his $1, 200 account receivable. On April 7, he negotiated to exchange his past-due account for a $1, 200, 4%, 90-day note receivable. Historically, 1% of credit sales have prove uncollectible. During April, 3375 of old accounts receivable were written off as uncollectible.
The necessary adjusting entry at April 30 would include:
a) Debit to Interest Receivable, $11, 84
b) Credit to Interest Payable, $48.00
c) Debit to Note Receivable, $3.02
d) Credit to Interest Revenue, $3.02
e) Both C and D.
Answer:
d) Credit to Interest Revenue, $3.02
Explanation:
beginning balance of accounts receivable $49,000
allowance for doubtful accounts $1,000
net credit sales $500,000
collections on accounts receivable $493,003
$6,997
Frank Jones:
Dr Notes receivable 1,200
Cr Accounts receivable 1,200
Write offs:
Dr Allowance for doubtful accounts 3,375
Cr Accounts receivable 3,375
the adjusting entry in this question refers to the notes payable from frank Jones:
we must determine the interest revenue for the month of April = $1,200 x 0.04 x (23 days/365 days) = $3.02
the journal entry should be:
April 30, accrued interest from notes receivable
Dr Interest receivable 3.02
Cr Interest revenue 3.02 ⇒ OPTION D
After significant market research Dan is evaluating his business compared another local business offering a similar service. His observations tell him that the other business offers lower prices but that his own services are higher quality and result in greater customer satisfaction. What activity is Dan engaging in with his market research?
A. Qualitative analysis
B. Forecasting
C. Competitive analysis
D. Secondary research
Competitive analysis is an activity is Dan engaging in with his market research. Hence, option C is correct.
A comparative analysis contrasts the advantages and disadvantages of your business with those of your rivals' products, services, and marketing plans.
A competitive analysis is a strategy that involves looking into your primary competitors to find out more about their products, sales, and marketing plans. A competitive market study can help businesses create stronger corporate strategies, fend off competitors, and increase market share, among other benefits.
A company's competitive position can be evaluated using the SWOT analysis, which is also used to develop strategic planning. It represents advantages, dangers, opportunities, and weaknesses. The SWOT analysis analyzes both internal and external factors as well as the current condition and any predicted future events.
Thus, option C is correct.
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The Juarez family is looking for a new cable company. After conducting research, they decide on a new cable provider. They call the new cable provider and mention they are going to switch from another provider. The salesperson at the new cable provider congratulates the Juarez family and lets them know that the new provider has been rated the highest in customer satisfaction in the industry. The salesperson tells them that if they sign up today for cable service, he will offer them a great monthly rate plus a free three-month trial of ten premium channels that they can cancel at any time. The Juarez family likes what they hear, and they sign up for the service. The salesperson has used which type of IMC marketing materials to close the sale?
The correct answer to this open question is the following.
Although there are no options provided, we can say the following.
The IMC marketing material to close the sale was the personal selling tool, using persuasion, and highlighting the benefits of the service to close the sale.
We are talking about Integrated Marketing Communications that include different disciplines such as Public Relations, Promotions, Sales, or Advertising. These resources are used by companies to plan and implement programs aimed to offer their products and services and closing the sale, relying on good customer service. Most of the modern campaigns include IMC to support the marketing effort.
Q 10.25: Admire County Bank agrees to lend Givens Brick Company $600,000 on January 1st. Givens Brick Company signs a $600,000, 8%, 9-month note. Assuming that interest has already been accrued to September 30th, what entry will Givens Brick Company make to pay off the note and interest at maturity
Answer:
Entry is given below
Explanation:
As Givens brick company is paying off the liability of note payable and the interest amount therefore, it will be debited as it is a decrease in liability. Cash will be credited as it is our asset and its decreasing.
Entry DEBIT CREDIT
Notes payable $600,000
Interest $36,000(w)
Cash $636,000
Working
Interest = $600,000 x 8% x9/12
Interest = $36,000
Which of the following is NOT an option for remedying a cost disadvantage associated with activities performed by forward channel allies (wholesale distributors and retail dealers)?
a. Change to a more economical distribution strategy such as putting more emphasis on cheaper distribution channels (perhaps direct sales via the Internet) or perhaps integrating forward into company-owned retail outlets
b. Enhance differentiation through activities such as cooperative advertising) at the forward end of the value chain
c. Pressure distributors/dealers and other forward-channel allies to reduce their costs and markups
d. Insisting on across-the-board cost cuts in all value chain activities—those performed by suppliers, those performed in- house, and those performed by distributors/dealers
e. Collaborate with forward channel allies to identify win-win opportunities to reduce costs
Answer: d. Insisting on across-the-board cost cuts in all value chain activities—those performed by suppliers, those performed in- house, and those performed by distributors/dealers
Explanation:
The cost disadvantage is from the forward channel allies and not an across the board problem which involves all value chain activities. As such, the solution should be garnered towards the forward channel allies.
Insisting on cuts in areas that could be already functioning efficiently could lead to a loss of that efficiency.
Insisting on across-the-board cost cuts in all value chain activities is therefore not an option for remedying a cost disadvantage associated with activities performed by forward channel allies.
Toyota will bring hybrid electric automobiles to market next year priced at $27 comma 000 (this includes a $6 comma 750 federal tax credit). At $1.89 per gallon of gasoline, it will take 11 years to recoup the difference in price between a base model Toyota Camry and its four-cylinder gasoline-only counterpart. The price difference is $4 comma 180. If the hybrid vehicle is driven for 15 years, what is the internal rate of return on the extra investment in the hybrid?
Answer:
4.15%
Explanation:
In order to determine the annual saving we must divide the extra cost of the hybrid by the amount of years it takes to recoup our investment.
annual savings = $4,180 / 11 years = $380 per year
our initial investment = -$4,180
since we are going to use the car during 15 years, then we have 15 positive cash flows of $380
using a financial calculator or excel spreadsheet, the internal rate of return (IRR) on our investment = 4.15%
Tri Fecta, a partnership, had revenues of $373,000 in its first year of operations. The partnership has not collected on $45,200 of its sales and still owes $38,700 on $170,000 of merchandise it purchased. There was no inventory on hand at the end of the year. The partnership paid $27,100 in salaries. The partners invested $41,000 in the business and $25,000 was borrowed on a five-year note. The partnership paid $2,250 in interest that was the amount owed for the year and paid $8,000 for a two-year insurance policy on the first day of business. Ignore income taxes. Compute the cash balance at the end of the first year for Tri Fecta.
Answer:
Cash balance = $225,150
Explanation:
Cash balance can be calculated by calculating the difference of cash inflows and cash outflows
Cash inflow
Investment $41,000
Borrowed $25,000
Cash collection(w) $327,800
Total Collection $393,800
Less:
Cash outflow
Merchandise(w) $131,300
Salaries paid $27,100
Interest paid $2,250
Insurance paid $8,000
Total cash paid $168,650
Cash Balance = Total Collection - Total Cash paid
Cash balance = $393,800 - $168,650
Cash balance = $225,150
Working
Cash collection = The partnership has not collected on $45,200 of its sales
Cash collection = Sales - 45,200
Cash collection = $373,000 - $45,200
Cash collection = $327,800
Merchandise = Tri Fecta still owes $38,700 on $170,000 of merchandise it purchased
Merchandise = $170,000 - $38,700
Merchandise = $131,300
The perceived demand for a monopolistic competitor
If the rate of inflation is 4.8 %4.8%, what nominal interest rate is necessary for you to earn a 2.2 %2.2% real interest rate on your investment? (Note: Be careful not to round any intermediate steps less than six decimal places.
Answer:
Nominal rate of return= 7.11%
Explanation:
Inflation is the increase in the price level.It erodes the value of money.rise in the price of money
Nominal interest is that quoted for investment or loan transactions. It has not been been adjusted for inflation.
Real interest rate is the amount of interest in terms of the the quantity of good and services that can be purchased. It is the nominal interest rate adjusted for inflation.
The relationship between inflation, real interest and nominal interest rate is given using the Fishers Effect;
N = ( (1+R) × (1+F)) - 1
N- nominal rate, R-real rate, F- inflation
real rate - 2.2%, inflation - 4.8%
Nominal rate of return =(1.022)× (1.048) - 1 = 0.071056
Nominal rate of return = 0.071056 × 100 = 7.1056 %
Nominal rate of return= 7.11%
Which of the following stages in a buying sequence will result in a specific option or set of options from which price, delivery, system compatibility, and other characteristics can be determined?
a. Determine the characteristics
b. Establish specifications
c. Search for and qualify potential suppliers
d. Request proposals
Answer:
C.
Explanation:
Since determine of characteristics has already been established the next would be to search.
At the beginning of the current fiscal year, the balance sheet of Hughey Inc. showed stockholders' equity of $523,000. During the year, liabilities increased by $28,000 to $232,000; paid-in capital increased by $37,000 to $174,000; and assets increased by $259,000. Dividends declared and paid during the year were $46,000.
Required:
Calculate net income or loss for the year.
Stockholders’ Equity
Assets = Liabilities + PIC + RE
Beginning = + + $260,000 SE
Changes 130,000 = 11,000 + 20,000 +
Ending = $116,000 + $90,000 +
Answer:
net income = $240,000
Explanation:
beginning stockholders' equity $523,000
beginning liabilities $204,000, ending liabilities $232,000 ($28,000 increase)
beginning paid in capital $137,000, ending $174,000 ($37,000 increase)
assets increased by $259,000
dividends $46,000
assets = liabilities + equity
beginning assets = $204,000 + $523,000 = $727,000
ending assets = $727,000 + $259,000 = $986,000
ending equity = ending assets - ending liabilities = $986,000 - $232,000 = $754,000
beginning equity = beginning paid in capital + retained earnings
beginning retained earnings = $523,000 - $137,000 = $386,000
ending equity = ending paid in capital + retained earnings
ending retained earnings = $754,000 - $174,000 = $580,000
ending retained earnings = beginning retained earnings + net income - dividends
$580,000 = $386,000 + net income - $46,000
net income = $580,000 + $46,000 - $386,000 = $240,000
DIP LLC reports ordinary income (before guaranteed payments) of $120,000, rent expense of $40,000, and interest income of $4,000 for the year. In addition, DIP paid guaranteed payments to partner Percy of $20,000. If Percy owns a 40% capital and profits interest, how much income will he report for the year and what is its character?
Answer:
$24,000 ordinary income
$1,600 interest income
$20,000 guaranteed payment.
Explanation:
Calculation for what how much income will Percy report for the year and what is its character
Calculation for Percy Ordinary income: 120,000 - 40,000 - 20,000
= 60,000 x 40%
= 24,000.
Calculation for Percy Interest income:
4,000 x 40%
= 1,600
Guaranteed Payment: 20,000
Therefore what Percy will report will be: $24,000 ordinary income
$1,600 interest income
$20,000 guaranteed payment.
Bookmark question for later Cross-training workers does the following for your workers a. creates a sense of achievement and job satisfaction b. workers take pride as they help their companies compete through higher productivity c. helps reduce turnover d. all of the above e. only a and b
Answer:
d. all of the above
Explanation:
Cross-training applies to workers, who are trained for different spectrum other than their job responsibilities.
Cross-training workers are multitasking and do the following tasks:
They helps other employees to appreciate each other’s jobs.They help companies through higher efficiency & productivity and are proud of that. Cross-training forces also helps in reducing the turnover to gain more profit.So, Cross-training workers helps to train other employees to perform new tasks in addition to their usual duties and the correct option is "d".
Levine Company uses the perpetual Inventory system.
Apr. 8 Sold merchandise for $5,700 (that had cost $4,212) and accepted the customer's Suntrust Bank Card. Suntrust charges a 4% fee.
12 Sold merchandise for $5,600 (that had cost $3,629) 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:
Journal entries are given below
Explanation:
April 8
Sales
DEBIT CREDIT
Cash $5,472
Credit Expense (5700x4%) $228
Sales Revenue $5,700
Cost of Sales
DEBIT CREDIT
Cost of goods sold $4,212
Inventory $4,212
April 12
Sales
DEBIT CREDIT
Cash $5,460
Credit card expense (5600x2.5%) $140
Sales Revenue $5,600
Cost of sales
DEBIT CREDIT
Cost of goods sold $3,629
Inventory $3,629
direct materials $34, direct labor $27, variable manufacturing overhead $15, fixed manufacturing overhead $43, variable selling and administrative expenses $20, and fixed selling and administrative expenses $28. Its desired ROI per unit is $31. Compute the markup percentage using absorption-cost pricing.
Answer:
Mark- up = 26.05%
Explanation:
Absorption costing is method of costing where overheads are charged to units produced using volume-based bases. e.g machine hours, labour hours e.t.c. Units are valued using full cost per unit
Full cost per unit= Direct material cost + direct labor cost + variable manufacturing overhead + fixed manufacturing overhead
Note that the selling and administrative expenses are period cost which are not to be considered as production cost, hence they are excluded.
Full cost per unit= 34 + 27 +15 +43 = 119
ROI per unit/profit per unit = 31
Mark- up under absorption costing is profit expressed as a percentage of of the full cost.
Mark- up = 31/119 × 100 = 26.05%
Mark- up = 26.05%
The Box Manufacturing Division of the Allied Paper Company reported the following results from the past year. Shareholders require a return of 9%. Management calculated a weightedminusaverage cost of capital (WACC) of 7%. Allied's corporate tax rate is 30.
Sales $700,000
Operating income $175,000
Total Assets $1,500000
Current liabilities $600,000
What is the division's Return on Investment (ROI)?
A) 25.00%.
B) 11.67%.
C) 40.00%.
D) 46.67%.
Answer:
Return n investment = 11.67%
Explanation:
Return on Investment is the proportion investment that is earned as operating income.
For the division, the return on investment would be the proportion of te investment in assets that is earned as net income.
This would be determined as follows;
Return n investment = (Net income÷ Operating assets) × 100
Return n investment = (175,000 ÷ 1,500,000) × 100= 11.67%
Return n investment = 11.67%