Answer:
A
Explanation:
Perteet Corporation's relevant range of activity is 4,800 units to 10,000 units. When it produces and sells 7,400 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 6.70 Direct labor $ 3.40 Variable manufacturing overhead $ 1.80 Fixed manufacturing overhead $ 3.60 Fixed selling expense $ 0.50 Fixed administrative expense $ 0.20 Sales commissions $ 0.30 Variable administrative expense $ 0.35 If 5,200 units are produced, the total amount of manufacturing overhead cost is closest to:
Answer:
$36,000
Explanation:
The computation of the total amount of manufacturing overhead is shown below:
But before that determine the following amounts
Fixed manufacturing overhead is
= 7,400 × $3.6
= $26,640
ANd, the Variable manufacturing overhead is
= 5,200 × $1.80
= $9,360
So,
Total manufacturing overhead is
= $26,640 + $9,360
= $36,000
The sales tax rate for South Salt Lake is 7.05%.What is the state sales tax on a $13,600 car in South Salt Lake?$What is the final cost of the car, including tax?$The sales tax rate for Morgan County is 5.95%.What is the state sales tax on that same car purchase in Morgan County?$What is the final cost of the car in Morgan County, including tax?$How much money would you save by driving to Morgan County to purchase the vehicle?$
Answer:
The sales tax rate for South Salt Lake is 7.05%. What is the state sales tax on a $13,600 car in South Salt Lake?
sales tax = $13,600 x 7.05% = $958.80What is the final cost of the car, including tax?
final cost = $13,600 + $958.80 = $14,558.80The sales tax rate for Morgan County is 5.95%. What is the state sales tax on that same car purchase in Morgan County?
sales tax = $13,600 x 5.95% = $809.20What is the final cost of the car in Morgan County, including tax?
final cost = $13,600 + $809.20 = $14,409.20How much money would you save by driving to Morgan County to purchase the vehicle?
money saved = $14,558.80 - $14,409.20 = $149.60The following transactions occurred during Year 2: Issued common stock for $19,000 cash. ABC borrowed an additional $11,000 from Chris Bank. ABC earned $9,000 of revenue on account. ABC incurred $4,000 of operating expenses on account. Cash collections of accounts receivables were $6,000. ABC provided additional services to customers for $1,000 cash. ABC purchased land for $14,000. ABC used $3,000 in cash to make a partial payment on its accounts payable. ABC declared and paid a $200 dividend to the stockholders On December 31 ABC had accrued salaries of $4,000. What is the net cash flow from operating activities shown on the statement of cash flows for the year ending December 31, Year 2
Answer: $2000
Explanation:
The net cash flow from operating activities shown on the statement of cash flows for the year ending December 31, Year 2 can be calculated below:
Revenue: = $9000 + $1000 = $10,000
Less: Expenses
Operating expenses: $4000
Accrued salary expenses: $4000
Total expense: $8000
Net income = Revenue - Expense
= $10000 - $8000
= $2000
Kingston Corporation leases equipment from Falls Company on January 1, 2020. The lease agreement does not transfer ownership, contain a bargain purchase option, and is not a specialized asset. It covers 3 years of the equipment’s 8-year useful life, and the present value of the lease payments is less than 90% of the fair value of the asset leased. The annual lease payment is $35,000 at the beginning of each year, and Kingston’s incremental borrowing rate is 6%, which is the same as the lessor’s implicit rate. Prepare all the necessary journal entries for Falls Company (the lessor) for 2020, assuming the equipment is carried at a cost of $200,000
Answer:
The following are the answer to this question:
Explanation:
There really is no Naming Convention accessible, that may differentiate noticeably:
It lease doesn't really follow any one of the criteria of a leased asset and is therefore classified as a lease:
Date Account title and explaination Debit Credit
1-1-17 Asset right of use $99,169 $99,169
[tex](35000 \times 2.83339)[/tex]
1-1-17 Liability lease cash $35,000 $35,000
12-31-17 Leasing Expenses $35,000 $3,850
Liability for leasing
[tex](99169-35000) \times 6%[/tex] $ 31, 150
Activity Right to Use (plug)
John Budd is the sole shareholder of Ral Corp., an accrual-basis taxpayer engaged in wholesaling operations. Ral’s retained earnings at January 1, 2020, amounted to $1 million. For the year ended December 31, 2020, Ral’s book income, before federal income tax, was $300,000. Included in the computation of this $300,000 was the following: On 12/1/20, Ral received prepaid rent of $27,000 from a tenant for a 3-year lease commencing 1/1/21 to cover rents for the years 2021, 2022, and 2023. In conformity with GAAP, Ral did not include any part of this rental in its income statement for the year ended 12/31/20. What amount should Ral include in its 2020 taxable income for rent revenue?
Answer: $27,000
Explanation:
Even though for GAAP reasons, revenue is to be recognized only when earned as per the Accrual principle of accounting, this is not so for the calculation of taxable income.
Taxable income is to be calculated on cash basis which means that taxes are to be paid on revenue when the revenue is received in cash and not when it is earned.
As Ral Corp. received the money in 2020, they are to include the entire amount of $27,000 in their 2020 taxable income for rent revenue.
Carmen’s Beauty Salon has estimated monthly financing requirements for the next six months as follows: January $ 8,600 April $ 8,600 February 2,600 May 9,600 March 3,600 June 4,600 Short-term financing will be utilized for the next six months. Projected annual interest rates are: January 5 % April 12 % February 6 May 12 March 9 June 12 What long-term interest rate would represent a break-even point between using short-term financing and long-term financing? (Round your monthly interest rate to 2 decimal places when expressed as a percent. Round your interest payments to the nearest whole cent. Input your answer as a percent rounded to 2 decimal places.)
Answer:
9.70% annual or 0.808% per month
Explanation:
month financing requirements interest rate interest charged
January 8,600 5% 35.83
February 2,600 6% 13
March 3,600 9% 27
April 8,600 12% 86
May 9,600 12% 96
June 4,600 12% 46
total 37,600 303.83
break even annual rate = 12 months x (total interest charged / total financial requirements) = 12 x (303.83 / 37,600) = 0.096967 = 9.70% or 0.808% per month
we can check our answer:
month financing requirements interest rate interest charged
January 8,600 9.7% 69.49
February 2,600 9.7% 21.01
March 3,600 9.7% 29.09
April 8,600 9.7% 69.49
May 9,600 9.7% 77.57
June 4,600 9.7% 37.17
total 37,600 303.82
Intask Corporation uses the FIFO method in its process costing system. Beginning inventory in the mixing department consisted of 6,000 units that were 75% complete with respect to conversion costs. Ending work in process inventory consisted of 5,000 units that were 60% complete with respect to conversion costs. If 12,000 units were transferred to the next processing department during the period, the equivalent units of production for conversion cost would be:
Answer:
$10,500 units
Explanation:
Calculation of equivalent units of production for conversion cost
First step is to find the Units started and completed during the period using this formula
Units started and completed during the period = Units transferred to the next processing department- Beginning inventory in the mixing department units
Let plug in the formula
Units started and completed during the period = = 12,000 - 6,000
Units started and completed during the period = = 6,000
Second step is to find the Equivalent units of production
Equivalent units of production=6,000 * 25% + 6,000*100% + 5,000*60%
Equivalent units of production=1,500+6,000+3,000
Equivalent units of production=10,500 units
Therefore the equivalent units of production for conversion cost will be $10,500 units
Which of the following statements is correct? Select one: a. Financial institutions in other countries generally are less regulated than in the United States. b. One reason domestic firms "go global" is to sell products in saturated markets. c. One of the advantages associated with doing business in international markets is that all countries report their financial statements in the U.S. dollar. d. Often firms can avoid labor laws that apply to foreign manufacturers by establishing manufacturing units in the country where the hurdles apply. e. A multinational firm takes advantage of the cultural differences among countries and uses the same marketing strategy in every country in which it operates.
Answer:
A
Explanation:
Domestic firms go global in order to enter unsaturated markets
Not all countries report their financial statements in US dollars
Firms can avoid labour laws that apply to foreign manufacturers by establishing manufacturing units in the country where the hurdles don't apply
Due to cultural differences, different marketing strategies have to be applied
The owner of a bicycle repair shop forecasts revenues of $160,000 a year. Variable costs will be $50,000, and rental costs for the shop are $30,000 a year. Depreciation on the repair tools will be $10,000. (LO9-2) a. Prepare an income statement for the shop based on these estimates. The tax rate is 20%. b. Now calculate the operating cash flow for the repair shop using all three methods suggested in the chapter. All three approaches should result in the same value for cash flow. i. Dollars in minus dollars out. ii. Adjusted accounting profits. iii. Add back depreciation tax shield.
Answer:
A. $66,000
B. $66,000
C. $66,000
Explanation:
Dollars in dollars out can be easily understood by just deducting cash expenses from the revenue received from cash sales. we can not deduct depreciation expense as it is a non-cash item.
DATA
Revenue = 160,000
Variable cost = 50,000
Rental cost = 30,000
Depreciation = 10,000
Profit before tax = 70,000
Tax (70,000 x 20%) = 14,000
Net Income = 56,000
a) Dollars in minus dollars out
Dollars in minus dollars out = Revenue - rental costs - variable costs - taxes Dollars in minus dollars out = $160,000 - $30,000 - $50,000 - $14,000
Dollars in minus dollars out = $66,000
b) Adjusted accounting profits
Operating cash flow = Net income + depreciation
Operating cash flow = $56,000 + $10,000
Operating cash flow = $66,000
c) Add back depreciation tax shield
Operating cash flow = [(Revenue - rental costs - variable costs) × (1 - 0.2)] + (depreciation × 0.2)]
Operating cash flow = ($160,000 - $30000 - $50,000)*0.8 + $10,000*0.2 Operating cash flow = $66,000
Computing unit and inventory costs under absorption costing LO P1 Trio Company reports the following information for the current year, which is its first year of operations.
Direct materials $15 per unit
Direct labor $16 per unit
Overhead costs for the year
Variable overhead $80,000 per year
Fixed overhead $160,000 per year
Units produced this year 20,000 units
Units sold this year 14,000 units
Ending finished goods inventory
in units 6,000 units
1. Compute the cost per unit using absorption costing
Cost per unit of finished goods using: Absorption costing
Cost per unit of finished goods
2. Determine the cost of ending finished goods inventory using absorption costing.
Cost per unit of finished goods using: Absorption costing
Number of units in finished goods
Total cost of finished goods inventory
3. Determine the cost of goods sold using absorption costing
Cost per unit of goods sold using: Absorption costing
Number of units in sold goods
Total cost of sold goods
Answer:
a. $43
b. $258,000
c. $602,000
Explanation:
Variable overhead per unit = Variable overhead / Units produced this year
Variable overhead per unit = $80,000 / 20,000
Variable overhead per unit = $4
Fixed overhead per unit = Fixed overhead / Units produced this year
Fixed overhead per unit = $160,000/ 20,000
Fixed overhead per unit = $8
a. Cost per unit of finished goods using Absorption costing
Direct material per unit $15
Direct labor per unit $16
Variable overhead per unit $4
Fixed overhead per unit $8
Cost per unit of finished goods $43
b. Number of units in finished goods = 6,000
Total cost of finished goods inventor = $43 * 6,000 units = $258,000
c. Number of units in sold goods 14,000
Total cost of finished goods inventory = $43 * 14,000 units = $602,000
a. Depreciation on the company's equipment for the year is computed to be $15,000.
b. The Prepaid Insurance account had a $9,000 debit balance at December 31 before adjusting for the costs of any expired coverage. An analysis of the company’s insurance policies showed that $870 of unexpired insurance coverage remains.
c. The Office Supplies account had a $360 debit balance at the beginning of the year; and $2,680 of office supplies were purchased during the year.
d. The December 31 physical count showed $425 of supplies available.
e. One-third of the work related to $15,000 of cash received in advance was performed this period.
f. The Prepaid Rent account had a $5,100 debit balance at December 31 before adjusting for the costs of expired prepaid rent. An analysis of the rental agreement showed that $4,230 of prepaid rent had expired.
g. Wage expenses of $1,000 have been incurred but are not paid as of December 31.
Prepare adjusting journal entries for the year ended (date of) December 31 for each of these separate situations.
Answer: Please see explanation column for answers
Explanation:
a) To record Depreciation on equipments
Date Account title Debit Credit
Dec 31st Depreciation expenses $15,000
Accumulate depreciation $15,000
b) To record insurance expenses
Date Account title Debit Credit
Dec31 Insurance Expenses $8,130
Prepaid insurance $8,130
Calculation
Prepaid Insurance =Prepaid Insurance Debit Balance−Unexpired Insurance Coverage
=$9,000−$870
=$8,130
c)To record office supplies expenses
Date Account title Debit Credit
Dec 31 Office Supplies Expenses $2,615
Office supplies $2,615
Calculation:
Office Supplies=Office Supplies Debit Balance+
Amount of Office Supplies Purchased−
Office Supplies Existing
=$360+$2,680−$425
=$2,615
d)To record Adjustment in unearned revenue
Date Account title Debit Credit
Dec 31 Unearned fee revenue $5,000
Fee revenue $5,000
Fees Revenue=Cash Received For Fees×Portion of Fees Earned
=$15,000 x 1/3= $5,000
e)To record Adjustment in insurance expenses
Date Account title Debit Credit
Dec 31 Insurance expenses $4,230
Prepaid expenses $4,230
f)To record wages payable
Date Account title Debit Credit
Dec 31 Wages expenses $1,000
Wages Payable $1,000
Why is it important to focus on others' needs when communicating online?
Answer:
Why is it important to focus on others' needs when communicating online? It is important to consider others needs so that your online communication is not harmful to others and to your relationships. ... The rules and guidelines for effective Internet communication.
Explanation:
The today's all are connected to the online and the communicating to the online. There are the involved to the groups and the gossips.
What is communicating?
The term communicating refers to communicate to the one person to the another person. The term communicating is to communicate to the mass level as well as to share the ideas and the thoughts. The communicating are to share the preferences to the one person to the another.
Nowadays, the youth are the involved to the social media in the groups. They are the communicating to the one person to the another person is the safe. The internet are the all are the used to the one social media, it was the connected to the each. The communicating the connected to the online and the gossips.
As a result, the today's all are connected to the online and the communicating to the online.
Learn more about on communicating, here:
https://brainly.com/question/28347989
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5. Dan was suspected by customs and immigration officers of having
information concerning the smuggling of drugs into the United States.
Acting undercover, a customs and immigration official went to Dan
and suggested that he bring illegal drugs into this country. Dan
refused, but at the official's insistence he later agreed. After the drugs
entered this country, Dan was arrested. Does Dan have a valid defense
to the charge of smuggling? Explain.
Answer:
No one can have a valid defense when there is no proof, the undercover officers could not blame someone without proof (evidence he was smuggling drugs) but dan may have a valid defense if they dont find any evidence
Hope this helps <3
Amy Corporation, which applies manufacturing overhead on the basis of direct labor hours, has provided the following data for its most recent year of operations. Estimated manufacturing overhead $264,040 Estimated direct labor hours 2,300 Actual manufacturing overhead $258,000 Actual direct labor hours 2,260 The estimates of the manufacturing overhead and of direct labor hours were made at the beginning of the year. The applied manufacturing overhead for the year is closest to:
Answer:
$259,448
Explanation:
Estimated manufacturing overhead $264,040
Estimated direct labor hours 2,300
predetermined overhead rate = $114.80 per labor hour
Actual manufacturing overhead $258,000
Actual direct labor hours 2,260
actual overhead rate = $114.16
applied overhead for the year = actual direct labor hours x predetermined overhead rate = 2,260 hours x $114.80 = $259,448 overapplied ($259,448 ˃ $258,000)
Activity Cost Pools Estimated Overhead Cost Expected Activity Assembly $ 515,520 52,500 machine-hours Processing orders $ 62,763 1,950 orders Inspection $ 86,089 1,960 inspection-hours Data concerning the company's product L19B appear below: Annual unit production and sales 600 Annual machine-hours 1,160 Annual number of orders 240 Annual inspection hours 190 Direct materials cost $ 54.74 per unit Direct labor cost $ 27.45 per unit According to the activity-based costing system, the unit product cost of product L19B is closest to: (Round your intermediate calculations to 2 decimal places.)
Answer:
$127.96
Explanation:
The computation of unit product cost of product L19B is shown below:-
Particulars Total pool cost Total activity Activity rate
Assembly $515,520 52,500 9,82
Processing orders $62,763 1,950 32.19
Inspections $86,089 1,960 43.92
For determining the activity rate we simply divide the total pool cost by total activity for assembly and in the same manner for others too.
Particulars Activity rate Activity Overhead allocated
Assembly 9,82 1,160 11,391.2
Processing orders 32.19 240 7,725.6
Inspections 43.92 190 8,344.8
Total 27,462
For determining the overhead allocated we simply multiply the activity rate with activity.
Overhead cost per unit = 27,462 ÷ 600
= $45.77
So,
Unit product cost = Overhead cost per unit + Direct material + Direct labor
= $45.77 + $54.74 + $27.45
= $127.96
Dividend discount model.
Consider 3 stocks:
a. Stock A is expected to provide a dividend of $10/share forever.
b. Stock B is expected to pay a $5 dividend next year. Thereafter, dividend growth is expected to be 4% a year forever.
c. Stock C is expected to pay a $5 dividend next year. Thereafter, growth is expected to be 20% a year for 5 years (years 2 through 6) and 0 thereafter.
If the market capitalization rate for each stock is 10%, which stock is the most valuable?
Answer:
stock A is the most valuable since it is worth $100
Explanation:
Price of stock A = $10 / 10% = $100
Price of stock B = $5 / (10% - 4%) = $83.33
Price of stock C:
P₁ = $5 / 1.1 = $4.5454
P₂ = $6 / 1.1² = $4.9587
P₃ = $7.20 / 1.1³ = $5.4095
P₄ = $8.64 / 1.1⁴ = $5.9012
P₅ = $10.368 / 1.1⁵ = $6.4377
P₆ = terminal value = $12.4416 / 0.1 = $124.416, now we discount it at 10% per year = $124.416 / 1.1⁶ = $70.2296
P₀ = P₁ + P₂ + P₃ + P₄ + P₅ + P₆ = $97.48
Refer to the original data.
Sales (19,500 units at $30 per unit) $585,000
Variable expenses 409,500
Contribution margin 175,500
Fixed expenses 180,000
Net operating loss $(4,500)
By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $72,000 each month. Assume that the company expects to sell 26,000 units next month. Prepare two contribution format income statements, one assuming that operations are not automated and one assuming that they are:_____.
Answer:
Contribution income statement - Assuming that operations are not automated.
Sales (26,000 units at $30 per unit) $780,000
Variable expenses ($409,500/ 19,500 × 26,000) ($546,000)
Contribution margin $234,000
Fixed expenses ($180,000 )
Net operating loss $54,000
Contribution income statement - Assuming that operations are automated.
Sales (26,000 units at $30 per unit) $780,000
Variable expenses ($18 × 26,000) ($468,000)
Contribution margin $312,000
Fixed expenses ($180,000 + $72,000 ) ($252,000 )
Net operating loss $60,000
Explanation:
A contribution Income Statement Shows the contribution (Sales less Variable Costs).
See the Statements for the Assumptions above.
Exercise 1-15A Calculate amounts related to the balance of retained earnings (LO1-3) Below are approximate amounts related to retained earnings reported by five companies in previous years. Coca-Cola reports an increase in retained earnings of $3.2 billion and net income of $6.9 billion. PepsiCo reports an increase in retained earnings of $3.4 billion and dividends of $2.6 billion. Alphabet reports an increase in retained earnings of $1.6 billion and net income of $1.6 billion. Sirius XM Satellite Radio reports beginning retained earnings of −$1.6 billion, net loss of $1.0 billion, and $0 dividends. Abercrombie & Fitch reports ending retained earnings of $1.56 billion, net income of $0.43 billion, and dividends of $0.06 billion. (Enter your answers in billions rounded to 2 decimal places. Negative amounts should be indicated by a minus sign.) Required: What is the amount of dividends of Coca-Cola? What is the amount of net income of PepsiCo? What is the amount of dividends of Alphabet? What is the amount of ending retained earnings of Sirius XM Satellite Radio? What is the amount of beginning retained earnings of Abercrombie & Fitch?
Answer:
1) $3.7 billion
2) $6 billion
3) 0
4) -$2.6 billion
5) $1.19 billion
Explanation:
(1) The amount of dividend of Coca-cola can be calculated as follows
Net income - increase in retained earnings
= $6.9 billion - $3.2 billion
= $3.7 billion
(2) The net income of PepsiCo can be calculated as follows
= increase in retained earnings + dividend
= $3.4 billion + $2.6 billion
= $6 billion
(3) The dividend of Alphabet can be calculated as follows
= increase in retained earnings -net income
= $1.6 billion - $1.6 billion
= 0
(4) The ending retained earnings of Sirius XM satellite radio can be calculated as follows
= beginning retained earnings - net loss-dividends
= -$1.6 billion -$1.0 billion - 0
= -$2.6 billion
(5) The amount of beginning retained earnings of Abercrombie and Fitch can be calculated as follows
Ending retained earnings - net income + Dividend
= $1.56 billion - $0.43 billion + $0.06 billion
= $1.19 billion
Suppose that the U.S. government decides to charge wine consumers a tax. Before the tax, 30 billion bottles of wine were sold every year at a price of $6 per bottle. After the tax, 23 billion bottles of wine are sold every year; consumers pay $9 per bottle (including the tax), and producers receive $4 per bottle. The amount of the tax on a bottle of wine is $ per bottle. Of this amount, the burden that falls on consumers is $ per bottle, and the burden that falls on producers is $ per bottle. True or False: The effect of the tax on the quantity sold would have been larger if the tax had been levied on producers.
Answer:
The amount of the tax on a bottle of wine is $5 per bottle. Of this amount, the burden that falls on consumers is $3 per bottle, and the burden that falls on producers is $2 per bottle. True or False: The effect of the tax on the quantity sold would have been larger if the tax had been levied on producers.
Explanation:
The amount of the tax on a bottle of wine is $5 ($3 + $2).
The burden on consumers is $3 ($9 - $6), which is the difference between the after-tax purchase price and the before-tax purchase price for consumers. This implies that the burden passed to consumers is $3 out of the total tax burden of $5.
The burden on producers is $2 ($6 - $4) which represents the difference between before-tax selling price and the after-tax selling price for the producers. This means that the burden passed to producers is $2 out of the total tax burden of $5.
If the tax burden were passed to the producers alone, the selling price would have been more than $11 ($6 + 5). This would have reduced demand for wine as consumers would have been forced to bear the total burden. This would have made the tax unequitable. This would have been the case unless demand is inelastic. That means that the total demanded is not sensitive to price increases.
The biggest U.S. stock exchange is located in which city?
O A. New York
B. Los Angeles
C. Washington, D.C.
D. Chicago
The Square Box is considering two independent projects, both of which have an initial cost of $18,000. The cash inflows of Project A are $3,000, $7,000, and $10,000 over the next three years, respectively. The cash inflows for Project B are $3,000, $7,000, and $15,000 over the next three years, respectively. The required return is 12 percent and the required discounted payback period is 3 years. Based on discounted payback, which project(s), if either, should be accepted? Multiple Choice Both projects should be accepted. Both projects should be rejected. Project A should be accepted and Project B should be rejected. Project A should be rejected and Project B should be accepted. You should be indifferent to accepting either or both projects.
Answer:
Project A should be rejected and Project B should be accepted.
Explanation:
Discounted payback period calculates the amount of time it takes to recover the amount invested in a project from its discounted cash flows
Project A
Cash flow in year 0 = $-18,000
Cash flow in year 1 = $3,000
Cash flow in year 2 = $7,000
Cash flow in year 3 = $10,000
I = 12%
The present value of the cash flows are less than $18,000. This means that the cash flows would not be recovered within the 3 years so project A should not be accepted
Project B
Cash flow in year 0 = $-18,000
Cash flow in year 1 = $3,000
Cash flow in year 2 = $7,000
Cash flow in year 3 = $15,000
I = 12%
Discounted cash flow in year 1 = 3000 / 1.12 = 2678.57
Discounted cash flow in year 2 = 7000 / 1.12^2 = 5580.36
Discounted cash flow in year 3 = 15000 / 1.12^3 = 10676.70
The amount recovered in year 1 = $18,000 - 2678.57 = $15,321.43
The amount recovered in year 2 = $15,321.43 - 5580.36 = $9,741.07
The amount recovered in year 3 = $9,741.07 / 10676.70 = 0.912
The amount is recovered in 2.91 years which is less than 3 years and so it is accepted
or 2019, Gourmet Kitchen Products reported $21 million of sales and $17 million of operating costs (including depreciation). The company has $15 million of total invested capital. Its after-tax cost of capital is 10% and its federal-plus-state income tax rate was 25%. What was the firm's economic value added (EVA), that is, how much value did management add to stockholders' wealth during 2019? Write out your answer completely. For example, 25 million should be entered as 25,000,000. Round your answer to the nearest dollar, if necessary.
Answer:
$1,500,000
Explanation:
The computation of the firm's economic value added is given below:-
Economic value added (EVA) = Net operating profit after taxes - Invested capital × Cost of capital
= (($21,000,000 - $17,000,000) × (1 - 0.25)) - ($15,000,000 × 10%)
= ($4,000,000 × 0.75) - $1,500,000
= $3,000,000 - $1,500,000
= $1,500,000
So, we have applied the above formula.
Sheffield Corporation had income from continuing operations of $10,745,300 in 2020. During 2020, it disposed of its restaurant division at an after-tax loss of $198,600. Prior to disposal, the division operated at a loss of $317,300 (net of tax) in 2020 (assume that the disposal of the restaurant division meets the criteria for recognition as a discontinued operation). Sheffield had 10,000,000 shares of common stock outstanding during 2020. Prepare a partial income statement for Sheffield beginning with income from continuing operations.
Answer: Please see explanation column for answers
Explanation:
Partial income statement for Sheffield Corporation
Income from continuing operations $10,745,300
Discontinued operations:
Loss from operation of discontinued $317,300
restaurant division, net of tax
Loss of disposal of restaurant division, $198,600
net of tax
Total of the losses $515,900
Net income $10,229,400
(Income from continuing operations -Losses from Discontinued operations)
Earnings per share
Income from continuing operations $10,745,300/10,000,000 shares
=$1.07453
Discontinued operations $515,900 /10,000,000 shares
=$0.05159
Earnings per share of net income ($1.07453-$0.05159) =$1.02294≈$1.02
Net Income for Sheffield Corporation is $10,229,400 with Earnings per share $1.02
Yoshihiko Kikuchi, a communication specialist from Japan, was recently hired by a U.S. company to accompany negotiating teams throughout the world. Her specialty is non-verbal communication and her job on these negotiating teams is to carefully observe the behavior of the individuals on the opposing negotiating teams. After the negotiating is completed during the day, she then meets with the team and reports her observations. This situation illustrates the fact that Japan is clearly a __________ culture, while the United States is a __________ culture. Group of answer choices low-context, high-context low-context, polychronic high-context, low-context monochronic, polychronic not enough information to determine
Answer:
high-context low-context,
Explanation:
A high-context culture is a type of cultures that relies on non verbal clues such as body language, posture and tone.
Cultures considered to be high context cultures are : Asians, Africans, Arabs and Latin Americans
A low-context culture relies on explicit communication and not on non verbal cues. Culture considered to be low context cultures is United States.
Monochronic cultures carry out one activity at a time.
Polychronic cultures carry out multiple activities at the same time
You are an upper-level manager in a firm. You believe that corporate objectives are not effectively disseminated throughout the organization and that line-level managers do not take them into account in their decision making. Which of the following would best help you to try to correct this problem? Multiple Choice Hold a series of supervisory manager meetings. Establish metric-based performance measures. Evaluate personality indicators to ensure inter-departmental worker compatibility. Evaluate and increase manager salaries and benefits.
Answer:
Establish metric-based performance measures.
Explanation:
In the given scenario the line managers are not taking corporate objectives into consideration in their decision making.
As a upper-level manager can resolve this by introducing metric based performance measures that will show clearly productivity of the line managers.
The Key Performance Indicators should be tailored to the organisation's objectives.
The line managers that are not performing well according to the KPIs will need to align and perform better in the specific areas.
This is an effective way of disseminating the corporate objectives in the organisation.
module 3 BlockWood Inc. has been providing raw materials to Couches Corp., a furniture company. The management at Couches recently decided to cut the prices it pays for the raw materials. BlockWood Inc. tried to negotiate a price that would be feasible for both companies, but Couches did not agree to pay more than what they had quoted. As BlockWood Inc. was facing similar difficulties with other buyers too, it eventually stopped supplying raw materials and took to manufacturing furniture instead. This scenario best illustrates ________.
The correct answer to this open question is the following.
You forgot to include the options for this question. However, we can answer the following.
This scenario best illustrates forward integration.
This is a case of forward integration because BlockWood Inc., which was facing similar difficulties with other buyers too, eventually stopped supplying raw materials and took to manufacturing furniture instead. SO they decided to fabricate their own furniture.
Companies make this decision as a process of vertical integration to expand and grow their business. In this case to produce and control their own products, eliminating the retailer that had decided to pay less money for the raw materials.
So now, Blockwood Inc. has the challenge to design and sell the products it is fabricating.
A stationery company plans to launch a new type of indelible ink pen. Advertising for the new product will be heavy and will cost the company $8 million, although the company expects general revenues of $280 million next year from sources other than sales of the new pen. If the company has a corporate tax-rate of 35% on its pretax income, what effect will the advertising for the new pen have on its taxes? It will increase taxes by $8 million. It will increase taxes by $2.8 million. It will have no effect on taxes. It will reduce taxes by $2.8 million.
Answer: It will reduce taxes by $2.8 million.
Explanation:
Expenses are tax deductible which means that the advertising expense will reduce tax by 35% of it's value.
= 8,000,000 * 35%
= $2,800,000
Expenses of $8,000,000 will reduce pre-tax profit by the same amount which would lead to taxes being $2,800,000 lower.
An appliance company has two warehouses and two retail outlets. Warehouse A has 400 refrigerators and warehouse B has 300 refrigerators. Outlet I needs 200 refrigerators, and outlet II needs 300 refrigerators. It cost $36 to ship a refrigerator from warehouse A to outlet I and $30 to ship a refrigerator from warehouse A to outlet II. It costs $30 to ship a refrigerator from warehouse B to outlet I and $25 to ship a refrigerator from warehouse B to outlet II. How should the company ship the refrigerators to minimize the cost
Answer:
Warehouse B:
ship 200 refrigerators to outlet 1ship 100 refrigerators to outlet 2Warehouse A:
ship 200 refrigerators to outlet 2Explanation:
Outlet 1 Outlet 2 Availability
Warehouse A 36 30 400
Warehouse B 30 25 300
Requirements 200 300
You should ship 200 refrigerators from warehouse B to outlet 1, total distribution costs = 200 x $30 = $6,000
You should ship 100 refrigerators from warehouse B to outlet 2, and 200 refrigerators from warehouse A to outlet 2, total distribution costs = (100 x $25) + (200 x $30) = $8,500
total distribution costs = $14,500
The difference in distribution costs from warehouses to outlet 1 is $6, and the difference in distribution costs from warehouses to outlet 2 is $5, so you should send all the refrigerators from warehouse B to outlet 1 to incur in the lowest possible cost.
You are 30 years old today and are considering studying for an MBA. You just received your annual salary of $50,000 and expect it to grow by 3% per year. MBA typically earns $80,000 upon graduation, with salaries growing by 4% per year. The MBA program you are considering is a full-time, 2-year day program that costs $30,000 per year, payable at the end of each study year. You want to retire on your 65th birthday. The relevant discount rate is 8%\.\* Is it worthwhile for you to quit your job in order to do an MBA (ignore income taxes)? * Meaning: Your MBA is an investment like any other investment. On other investments, you can earn 8% per year, the MBA has to be judged against this standard.
Answer:
Yes, you should take the MBA because the NPV of taking the MBA is positive.
Explanation:
the total economic costs of taking the MBA program include the lost wages + the costs of taking the MBA and any interest you could have earned by investing it on something else = ($50,000 x 1.03) + ($50,000 x 1.03²) + (2 x $30,000 x 1.08) = $51,500 + $53,045 + $64,800 = $169,345
the present value of your total economic costs:
$51,500/1.08 + $53,045/1.08² + $32,400/1.08 + $32,400/1.08² = $47,685.19 + $45,477.54 + $30,000 + $27,777.78 = $150,940.51
if you continued to work, your salary at year 3 would be $54,636.35 and it would continue to increase by 3% every year. The salary that you can earn with an MBA is $80,000 and it will grow by 4% per year. I used an excel spreadsheet to calculate future salaries and the differential amount between them. Then I calculated the PV at the beginning of year 3 of the differential income.
The PV of the differential income today = $560,281.31 /1.08³ = $444,769.38
the NPV of taking an MBA = $444,769.38 - $150,940.51 = $293,828.87
You are the store manager at a large furniture store, FurnitureLand. One of your products is a study desk. The demand for study desks is relatively steady and inventory replenishments are ordered from the assembly plant whenever the quantity drops to the reorder level. The lead time from the assembly plant to your store is two weeks, and the ordering cost is $500. Weekly demand for the desk is normally distributed with mean of 50and a standard deviation of 10. Your internal cost of capital is 15 percent per yearand each desk costs $200. (Assume there are 52 weeks in oneyear).(a)Suppose you want to target a 98 percent service level. What should the safety stock and reorder point be
Answer:
safety stock = 33 desks
reorder point = 133 desks
Explanation:
safety stock = (Z-score x √lead time x standard deviation of demand) + (Z-score x standard deviation of lead time x average demand)
Z-score for 98% confidence level = 2.326 standard deviation of demand = 10 √lead time = √2 = 1.414we are not given any standard deviation of lead time, so we can assume that it is 0safety stock = (2.326 x 1.414 x 10) + (2.326 x 0 x 50) = 32.89 ≈ 33 desks
reorder point = lead time demand + safety stock = (50 x 2) + 33 = 133
