Business
The following selected accounts from the Bramble Corp.s general ledger are presented below for the year ended December 31, 2022: Advertising expense $54,000 Interest revenue $32,000 Common stock 249,000 Inventory 66,000 Cost of goods sold 1,084,000 Rent revenue 24,000 Depreciation expense 124,000 Retained earnings 534,000 Dividends 149,000 Salaries and wages expense 674,000 Freight-out 24,000 Sales discounts 8,600 Income tax expense 69,000 Sales returns and allowances 43,000 Insurance expense 15,000 Sales revenue 2,399,000 Interest expense 69,000Required:Prepare a multiple-step income statement BRAMBLE CORP.
High Tech Manufacturing manufactures 256GB SD cards (memory cards for mobile phones, digital cameras, and other devices). Price and cost data for a relevant range extending to 200,000 units per month are as follows: Sales price per unit: (current monthly sales volume is 120,000 units) $25Variable costs per unit: Direct materials 6.60Direct labor 7.70Variable manufacturing overhead 2.40 Variable selling and administrative expenses 1.90Monthly fixed expenses: Fixed manufacturing overhead 241,900Fixed selling and administrative expenses 327,900Required: a. What is the company's contribution margin per unit? Contribution margin percentage? Total contribution margin? b. What would the company's monthly operating income be if the company sold 160,000 units? c. What would the company's monthly operating income be if the company had sales of d. What is the breakeven point in units? In sales dollars? e. How many units would the company have to sell to earn a target monthly profit of $260,100? f. Management is currently in contract negotiations with the labor union. If the negotiations fail, direct labor costs will increase by 10% and fixed costs will increase by S22,500 per month. If these costs increase, how many units will the company have to sell each month to break even? g. Return to the original data for this question and the rest of the questions. What is the company's current operating leverage factor (round to two decimals)? h. If sales volume increases by 7%, by what percentage will operating income increase? i. What is the company's current margin of safety in sales dollars? What is its margin of safety as a percentage of sales?
Rosenthal Company manufactures bowling balls through two processes: Molding and Packaging. In the Molding Department, the urethane, rubber, plastics, and other materials are molded into bowling balls. In the Packaging Department, the balls are placed in cartons and sent to the finished goods warehouse. All materials are entered at the beginning of each process. Labor and manufacturing overhead are incurred uniformly throughout each process. Production and cost data for the Molding Department during June 2020 are presented below.Production Data JuneBeginning work in process units 0 Units started into production 22,660 Ending work in process units 2,060 Percent completeending inventory 40 %Cost Data Materials $203,940Labor 55,208Overhead 116,184 Total $375,332 Prepare a schedule showing physical units of production.
McNulty, Inc., produces desks and chairs. A new CFO has just been hired and announces a new policy that if a product cannot earn a margin of at least 30 percent, it will be dropped. The margin is computed as product gross profit divided by reported product cost.Manufacturing overhead for year 1 totaled $799,000. Overhead is allocated to products based on direct labor cost. Data for year 1 show the following: Chairs DesksSales revenue $1,240,000 $2,286,900Direct materials 587,000 830,000Direct labor 150,000 320,000Required:a-1. Based on the CFO's new policy, calculate the profit margin for both chairs and desks.Profit marginChairs ?%Desks ?%a-2. Which of the two products should be dropped?ChairsDesksb. Regardless of your answer in requirement (a), the CFO decides at the beginning of year 2 to drop the chair product. The company cost analyst estimates that overhead without the chair line will be $680,000. The revenue and costs for desks are expected to be the same as last year. What is the estimated margin for desks in year 2? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 1 decimal place.)Estimated margin for desks- Year 2 ?%
A project manager is faced with the following activities and times associated with a building construction for a cancer research facility. Each activity can be crashed at most by 2 weeks. The cost associated with each week time reduction is given below. (note: The 1st crash and 2nd crash costs are associated with the first and second time that a specific activity is crashed. So, if you crash Activity A once, the cost is $9,000, if you have to crash Activity A a second time, the cost is $9,500) Crash CostsActivity Immediate Predecessor Normal Time (weeks) 1st crash 2nd crashA 3 $9,000 $9,500B A 6 $3,500 $6,000C 7 $4,000 $5,000D B 7 $4,500 $6,000E C 5 $7,000 $7,500F D,E 8 $10,000 $12,000G F 2 $14,000 $16,000What is the minimum cost to crash this project by 2 weeks?a. $12,000b. $9,000c. $16,000d. $3,500
The Excellent Agency specializes in developing advertising campaigns for smaller retail clients. Excellent is hired by Shadowleaf Shoes, a small regional chain of six shoe stores, to develop a slogan and specific ads to be used in a three-month newspaper campaign. Shadowleafs marketing director, Manuel Margolis, is adamant while meeting with Excellent's account executive, Kia Chin, that the campaign must be catchy and modern to appeal to a target audience that has an active lifestyle and is between the ages of 18 and 35. More importantly, Margolis wants the slogan to be memorable and unique. Kia Chin, representing Excellent, develops a campaign and presents it to Margolis. The campaign is based on the slogan "Do What You Do in a Shadowleaf Shoe." Visuals depict mens legsdifferent sizes, skin colors, etc.walking, jogging, dancing, and otherwise moving in every type of Shadowleafs shoes. Margolis feels that this campaign will target young male consumers, but will also get the attention of others regarding the comfort of the shoes, raising awareness of the Shadowleaf brand. After running the ads, the Excellent Agency wins an advertising effectiveness award. It seems that the surprising and appealing visuals gave the slogan unexpectedly positive social meaning for people of all ages, not just men aged 18 to 35. When Manuel Margolis insists on a measuring stick for the creativity of the campaign, what will the Xcellent Agency tell him, if Kia Chin is smart? A. "The award alone proves that this ad is loaded with creativity." B. "If people like the ad, theyll buy the product." C. "We met the technical standards for this advertising effort." D. "Great brands do more than just get attention, they make emotional connections."
Emily Lim owns and runs an ice cream parlor in San Diego. Last year, she had sales of $430,000 and an average tax rate of 34%. She spent $43,000 on ingredients, $21,500 on utilities, and $77,400 to rent the premises Emily has a few employees and paid them $86,000 in wages in total. She also paid herself a salary of $64,500 and spent $43,000 to pay for employee benefits A few years ago, Emily borrowed money to buy the ice making equipment. Last year, she paid $21,500 in interest on that loan. Depreciation for the equipment was $12,900 .1. What was operating income (EBIT) for the year? 2. What was net income for the year?
Fechter Corporation had the following stockholders equity accounts on January 1, 2020: Common Stock ($5 par) $500,000, Paid-in Capital in Excess of ParCommon Stock $200,000, and Retained Earnings $100,000. In 2020, the company had the following treasury stock transactions. Mar. 1 Purchased 5,000 shares at $8 per share. June 1 Sold 1,000 shares at $12 per share. Sept. 1 Sold 2,000 shares at $10 per share. Dec. 1 Sold 1,000 shares at $7 per share. Fechter Corporation uses the cost method of accounting for treasury stock. In 2020, the company reported net income of $30,000.Required:Journalize the treasury 2020, for net income.
The value of a share of common stock depends on the cash flows it is expected to provide, and those flows consist of the dividends the investor receives each year while holding the stock and the price the investor receives when the stock is sold. The final price includes the original price paid plus an expected capital gain. The actions of the marginal investor determine the equilibrium stock price. Market equilibrium occurs when the stock's price is -Select-less thanequal togreater thanCorrect 1 of Item 1 its intrinsic value. If the stock market is reasonably efficient, differences between the stock price and intrinsic value should not be very large and they should not persist for very long. When investing in common stocks, an investor's goal is to purchase stocks that are undervalued (the price is -Select-abovebelowequivalent toCorrect 2 of Item 1 the stock's intrinsic value) and avoid stocks that are overvalued.The value of a stock today can be calculated as the present value of -Select-a finitean infiniteCorrect 3 of Item 1 stream of dividends:This is the generalized stock valuation model. We will now look at 3 different situations where we can adapt this generalized model to each of these situations to determine a stock's intrinsic value:1. Constant Growth Stocks;2. Zero Growth Stocks;3. Nonconstant Growth Stocks.Constant Growth Stocks:For many companies it is reasonable to predict that dividends will grow at a constant rate, so we can rewrite the generalized model as follows:This is known as the constant growth model or Gordon model, named after Myron J. Gordon who developed and popularized it. There are several conditions that must exist before this equation can be used. First, the required rate of return, rs, must be greater than the long-run growth rate, g. Second, the constant growth model is not appropriate unless a company's growth rate is expected to remain constant in the future. This condition almost never holds for -Select-maturestart-upCorrect 4 of Item 1 firms, but it does exist for many -Select-maturestart-upCorrect 5 of Item 1 companies.Which of the following assumptions would cause the constant growth stock valuation model to be invalid?The growth rate is zero.The growth rate is negative.The required rate of return is greater than the growth rate.The required rate of return is more than 50%.None of the above assumptions would invalidate the model.-Select-Statement aStatement bStatement cStatement dStatement eCorrect 6 of Item 1Quantitative Problem 1: Hubbard Industries just paid a common dividend, D0, of $1.60. It expects to grow at a constant rate of 2% per year. If investors require a 10% return on equity, what is the current price of Hubbard's common stock? Round your answer to the nearest cent. Do not round intermediate calculations.$ per shareZero Growth Stocks:The constant growth model is sufficiently general to handle the case of a zero growth stock, where the dividend is expected to remain constant over time. In this situation, the equation is:Note that this is the same equation developed in Chapter 5 to value a perpetuity, and it is the same equation used to value a perpetual preferred stock that entitles its owners to regular, fixed dividend payments in perpetuity. The valuation equation is simply the current dividend divided by the required rate of return.Quantitative Problem 2: Carlysle Corporation has perpetual preferred stock outstanding that pays a constant annual dividend of $2.00 at the end of each year. If investors require an 10% return on the preferred stock, what is the price of the firm's perpetual preferred stock? Round your answer to the nearest cent. Do not round intermediate calculations.$ per shareNonconstant Growth Stocks:For many companies, it is not appropriate to assume that dividends will grow at a constant rate. Most firms go through life cycles where they experience different growth rates during different parts of the cycle. For valuing these firms, the generalized valuation and the constant growth equations are combined to arrive at the nonconstant growth valuation equation:Basically, this equation calculates the present value of dividends received during the nonconstant growth period and the present value of the stock's horizon value, which is the value at the horizon date of all dividends expected thereafter.Quantitative Problem 3: Assume today is December 31, 2013. Imagine Works Inc. just paid a dividend of $1.15 per share at the end of 2013. The dividend is expected to grow at 15% per year for 3 years, after which time it is expected to grow at a constant rate of 6% annually. The company's cost of equity (rs) is 9.5%. Using the dividend growth model (allowing for nonconstant growth), what should be the price of the company's stock today (December 31, 2013)? Round your answer to the nearest cent. Do not round intermediate calculations.$ per share
Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement, which follows:Sales $1,584,000Variable expenses $610,020Contribution margin $973,980Fixed expenses $1.071,000Net operating income (loss) $(97,020)In an effort to isolate the problem, the president has asked for an income statement segmented by division. Accordingly, the Accounting Department has developed the following information:East DivisionSales $434,000Variable expenses as a percentage of sales 53%Traceable fixed expenses $261,000Central DivisionSales $650,000Variable expenses as a percentage of sales 20%Traceable fixed expenses $357,000West DivisionSales $500,000Variable expenses as a percentage of sales 50%Traceable fixed expenses $204,0001. Prepare a contribution format income statement segmented by divisions, as desired by the president.2-a. As a result of a marketing study, the president believes that sales in the West Division could be increased by 14% if monthly advertising in that division were increased by $29,000. Calculate the incremental net operating income.2-b. Would you recommend the increased advertising?
Superior Micro Products uses the weighted-average method in its process costing system. During January, the Delta Assembly Department completed its processing of 26,800 units and transferred them to the next department. The cost of beginning work in process inventory and the costs added during January amounted to $662,560 in total. The ending work in process inventory in January consisted of 4,000 units, which were 50% complete with respect to materials and 30% complete with respect to labor and overhead. The costs per equivalent unit for the month were as follows: Materials Labor Overhead Cost per equivalent unit $12.70 $4.00 $6.60Required:1. Compute the equivalent units of materials, labor, and overhead in the ending work in process inventory for the month.2. Compute the cost of ending work in process inventory for materials, labor, overhead, and in total for January.3. Compute the cost of the units transferred to the next department for materials, labor, overhead, and in total for January.4. Prepare a cost reconciliation for January.
The Moto Hotel opened for business on May 1, 2017. Here is its trial balance before adjustment on May 31. MOTO HOTEL Trial Balance May 31, 2017 Debit Credit Cash $2,403 Supplies 2,600 Prepaid Insurance 1,800 Land 14,903 Buildings 70,000 Equipment 16,800 Accounts Payable $4,603 Unearned Rent Revenue 3,300 Mortgage Payable 36,000 Common Stock 59,903 Rent Revenue 9,000 Salaries and Wages Expense 3,000 Utilities Expense 800 Advertising Expense 500 $112,806 $112,806 Other data: 1. Insurance expires at the rate of $450 per month. 2. A count of supplies shows $1,160 of unused supplies on May 31. 3. (a) Annual depreciation is $3,480 on the building. (b) Annual depreciation is $2,880 on equipment. 4. The mortgage interest rate is 6%. (The mortgage was taken out on May 1.) 5. Unearned rent of $2,580 has been earned. 6. Salaries of $760 are accrued and unpaid at May 31.Required:Journalize the adjusting entries on May 31.
Here's the revenue and expenses for the month. Calculate whether Mia had a profit or loss.MAY ACCOUNTSCHECKING$860.00REVENUEFIXED EXPENSESVARIABLE EXPENSESCARD PURCHASE$300SAVINGS$1,006.68DOG FOODCAT FOODPET TREATSPET SUPPLIES$3,650$2,850$1,650$1,800RENT$2,000SALARIES$2,000UTILITIES$1,000PRODUCT STOCK $4,000TOTAL$9,950TOTAL$9,000TOTAL$300ENTER MIA'S TOTAL PROFIT/LOSS FOR THE MONTH IN THE BOX BELOW, THEN CLICK SUBMIT.$SUMIT