Answer:
(A) 138,000 direct labor hours
(B) $23.75 per direct labor hour
(C) $142.5 per unit for speedboat and $142.5 per unit for bass boat
Explanation:
(A) The number of direct hours for The speedboats can be calculated as follows
= 11,500 × 6
= 69,000
The number of direct hours for the bass boat can be calculated as follows
= 11,500 × 6
= 69,000
Total number of budgeted direct labor hours for the year is
= 69,000 + 69,000
= 138,000 direct labor hours
(B) The single plantwide factory overhead can be calculated as follows
= Budgeted overhead cost/total number of budgeted labor hours
= 3,277,500/138,000
= $23.75 per direct labor hour
(C) The factory overhead allocated or unit of each product can be calculated as follows
For speedboats
= 69,000 × 23.75
= 1,638,750
1,638,750/11,500
= $142.5 per unit
For bass boats
=69,000 × 23.75
= 1,638,750
1,638,750/11,50
= $142.5 per unit
Charleston Corporation (CC) now operates as a "regular" corporation, but it is considering a switch to S Corporation status. CC is owned by 100 stockholders who each hold 1% of the stock, and each faces a personal tax rate of 35%. The firm earns $3,700,000 per year before taxes, and since it has no need for retained earnings, it pays out all of its earnings as dividends. Assume that the corporate tax rate is 34% and the personal tax rate is 35%. How much more (or less) spendable income would each stockholder have if the firm elected S Corporation status? Group of answer choices $7,605 $6,787 $10,139 $8,749 $8,177
Answer:
-2923
Explanation:
To calculate how much more (or less) spendable income would each stockholder has if the firm elected S Corporation status we need to calculate Profit attributable to each stockholder according to their holding percentage and will deduct the corporation tax on that.
DATA
No of stockholders = 100
Holding % = 1% each stock holder
Tax rate = 35%
Profit before tax = $3,700,000
Corporate tax = 34%
Profit before tax = 1% of 3,700,000 = 37,000
Tax (34%) = 34% of 37,000 = 12580
Profit after tax = 37,000 - 12,580 = 24,420
Now personal tax of 35% = 8547
Therefore tax = 24,420 - 8547 = 15,873
If only personal tax is levied tax would be = 35% * 37,000 = 12,950
therefore each stockholder will have 12,950 - 15,873 = -2923
Interest rate. In 1972, Bob purchased a new Datsun 240Z for $3,000. Datsun later changed its name to Nissan, and the 1972 Datsun 240Z became a classic. Bob kept his car in excellent condition and in 2002 could sell the car for seven times what he originally paid. What was Bob's annualized rate of return for the 30 years he owned this car? If he keeps the car for another thirty years and earns the same rate, what could he sell the car for in 2032? What was Bob's annualized rate of return for the 30 years he owned this car?
Answer:
The answer is "75,000"
Explanation:
Initial Price = 3000
Sales price=15000
Time= 30 years
[tex]\to 15000= 3000 \times (1+r)^{30} \\\\\to \frac{15000}{3000 }= (1+r)^{30}\\\\\to 5= (1+r)^{30}\\\\\to 5^{\frac{1}{30}}= (1+r)^{30 \times \frac{1}{30}}\\\\\to 5^{\frac{1}{30}}= (1+r)^{1}\\\\\to 5^{0.0333333333}= (1+r)^{1}\\\\\to 1.05511306= (1+r)\\\\\to 1.05511306-1=r\\\\\to r= .05511306\\\\\to r \% = 05511306 \times 100\\\\\to r \% = 5.511306\\\\\to \text{The next 30 years' estimated price :}\\\\[/tex]
[tex]\to 15000 \times (1+ 5.511306 \%)^{30}\\\\\to 15000 \times (1+ \frac{5.511306}{100})^{30}\\\\ \to 15000 \times (1+ 0.05511306)^{30}\\\\ \to 15000 \times (1.05511306)^{30}\\\\ \to 15000 \times 4.9999995\\\\ \to 74,999.9925\\\\\to \bold{75,000}[/tex]
Do you agree with the flowing statements? Businesses should do anything they can to make a profit. Use specific reasons and examples to support your position.
Answer:
Yes , I do agree with the statement "businesses should do anything they can to make a profit" I agree with this because in order to make money The business has to make profit. if they don't it could lead up to them losing the business from bankruptcy.
Boyd Docker has just rented space in a strip mall. In this space, he will open a photography studio, to be called SnapShot! A friend has advised Boyd to set up a double-entry set of accounting records in which to record all of his business transactions.
Indicate whether the normal balance of each account is a debit or credit. Balance Cash select between debit and credit Supplies select between debit and credit Notes Payable select between debit and credit Equipment select between debit and credit Accounts Payable select between debit and credit Common Stock select between debit and credit
Answer and Explanation:
The normal balance of each account is a debit or credit is shown below:-
Accounts Normal balance Reason
Cash Debit Being an asset
Supplies Debit Being an asset
Note payable Credit Being a liability
equipment Debit Being an asset
accounts payable Credit Being a liability
common stock Credit Being an equity account
Therefore as per the balance sheet cash, supplies and equipment are the normal debit balance of assets while notes payable, accounts payable and common stock are the normal credit balance of liabilities on the balance sheet.
Amul Food Factory in India makes ice cream and produces processed and condensed milk. In the factory, the firm's employees use raw milk and sugar. The firm runs on electricity and purchases raw milk every day. Large robotic assembly lines fill and package the ice cream containers. Large industrial freezers store the ice cream. Based on this scenario, can you identify the fixed costs for Amul Food Factory?
a) the cost of raw milk purchased from the farmersb) the cost of building the factory, purchasing the robotic assembly lines and industrial freezersc) the cost of the employees hired and the number of packages purchasedd) the cost of purchasing electricity, raw milk, and sugar
Answer:
Option B
Explanation:
In simple words, Fixed cost refers to an expenditure which does not adjust due to a rise or reduction in the volume of products or services generated or distributed. Fixed costs include bills that tend to be incurred by a corporation, irrespective of any particular market operation.
Fixed expenditures may be overt or indirect expenditures that may also have an bearing on revenue at various points throughout the financial statements. Thus, from the above we can conclude that the correct option is B.
Gale Corporation manufactures windsocks. The business recently decided to adopt an ABC system. The following activities have been identified: Activity Cost Driver Chosen as Allocation Base Conversion Cost Per Unit of Allocation Base Materials handling Number of parts $1.00 Machining Machine hours 60.00 Packaging Number of finished units 2.00 EaEach windsock requires three parts and spends five minutes in the machining department. The total cost of direct materials and direct labor is $3.50 per windsock. Gale produces 20,000 windsocks each year and sells them at 140% of cost. 7. The total cost of producing the 20,000 windsocks is: A. $160,000. B. $230,000. C. $270,000. D. $1,260,000.
Answer:
$270,000
Explanation:
The first step is to calculate the overhead cost of the material handling parts
Since each wind stock require 3 parts then the overhead cost can be calculated as follows
= 3 × 20,000
= 60,000
The overhead cost of machining hours can be calculated as follows
Since 5 minutes is spent in the machining department then overhead cost is
= 5× 20,000
= 100,000
The overhead cost of packaging number of finished units can be calculated as follows
= 2 × 20,000
= 40,000
Total overhead cost= 100,000 + 60,000 + 40,000
= 200,000
The total cost of direct materials and labor can be calculated as follows
= 3.5 × 20,000
= 70,000
Therefore the total cost of producing 20,000 windstocks is
= Total overhead cost + total cost of direct materials and labor
= 200,000 + 70,000
= $270,000
Hence the total cost of producing 20,000 windstocks is $270,000
A 3/1 ARM is made for $150,000 at 7 percent with a 30-year maturity. a. Assuming that fixed payments are to be made monthly for three years and that the loan is fully amortizing, what will be the monthly payments? What will be the loan balance after three years? b. What would new payments be beginning in year 4 if the interest rate fell to 6 percent and the loan continued to be fully amortizing? c. In (a) what would monthly payments be during year 1 if they were interest only? What would payments be beginning in year 4 if interest rates fell to 6 percent and the loan became fully amortizing?
Answer:
a. Assuming that fixed payments are to be made monthly for three years and that the loan is fully amortizing, what will be the monthly payments? What will be the loan balance after three years?
monthly payment = $997.95principal balance after 36th payment = $145,090.59b. What would new payments be beginning in year 4 if the interest rate fell to 6 percent and the loan continued to be fully amortizing?
monthly payment = $905.34c. In (a) what would monthly payments be during year 1 if they were interest only? What would payments be beginning in year 4 if interest rates fell to 6 percent and the loan became fully amortizing?
a. $875
b. $935.98
Explanation:
A 3/1 adjustable rate mortgage is a 30 year mortgage where the interest rate is fixed for the first 3 years, and then it can vary.
I prepared an amortization schedule that shows the first 3 payments with a 7% interest rate and then the rest of the payments will carry a 6% interest rate.
The monthly payment for the first 36 months is $997.95 (principal balance after 36th payment $145,090.59), then it decreases to $905.34 per month.
See amortization schedule 1
if the monthly payments only covered interest expenses during the first 3 years, they would be $150,000 x 7%/12 = $875
then the monthly payments would be $935.98.
See amortization schedule 2
Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $30,000 and has cash on hand of $20,000 contributed by Lanni?s owners. For each of the following transactions, identify the real and/or financial assets that trade hands. Are any financial assets created or destroyed in the transaction?a. Lanni takes out a bank loan. It receives $50,000 in cash and signs a note promising to pay back the loan over three years.b. Lanni uses the cash from the bank plus $20,000 of its own funds to finance the development of new financial planning software.c. Lanni sells the software product to Microsoft, which will market it to the public under the Microsoft name. Lanni accepts payment in the form of 2,500 shares of Microsoft stock.d. Lanni sells the shares of stock for $50 per share and uses part of the proceeds to pay off the bank loan.Required:a. Prepare its balance sheet just after it gets the bank loan. What is the ratio of real assets to total assets?b. Prepare the balance sheet after Lanni spends the $70,000 to develop its software product. What is the ratio of real assets to total assets?c. Prepare the balance sheet after Lanni accepts the payment of shares from Microsoft. What is the ratio of real assets to total assets?
Answer:
a. Lanni takes out a bank loan. It receives $50,000 in cash and signs a note promising to pay back the loan over three years.
FINANCIAL ASSET CREATED: when the loan was received, a financial asset was created. Money is exchanged for a promissory note.b. Lanni uses the cash from the bank plus $20,000 of its own funds to finance the development of new financial planning software.
REAL ASSET CREATED: when the software was developed, a real asset was created. Money was invested in developing the software.c. Lanni sells the software product to Microsoft, which will market it to the public under the Microsoft name. Lanni accepts payment in the form of 2,500 shares of Microsoft stock.
FINANCIAL ASSET CREATED: when the software was traded, a financial asset was created. A real asset was traded in exchange for financial assets.d. Lanni sells the shares of stock for $50 per share and uses part of the proceeds to pay off the bank loan.
FINANCIAL ASSET DESTROYED: when the loan is paid back, the financial asset (loan) ceases to exist. When the money is paid back to the bank, the loan and the promissory note cease to exist.a-1. Prepare its balance sheet just after it gets the bank loan.
Lanni Products
Balance Sheet
After it got the bank loan
Assets:
Cash $70,000
Computer equipment $30,000
Total assets $100,000
Liabilities:
Notes payable $50,000
Total liabilities $50,000
Shareholders's equity :
Paid in capital $50,000
Total shareholders's equity $50,000
Total liabilities and shareholders' equity $100,000
a-2. What is the ratio of real assets to total assets?
ratio of real assets to total assets = computer equipment / total assets = $30,000 / $100,000 = 30%
b-1. Prepare the balance sheet after Lanni spends the $70,000 to develop its software product.
Lanni Products
Balance Sheet
After it developed the software product
Assets:
Software $70,000
Computer equipment $30,000
Total assets $100,000
Liabilities:
Notes payable $50,000
Total liabilities $50,000
Shareholders's equity :
Paid in capital $50,000
Total shareholders's equity $50,000
Total liabilities and shareholders' equity $100,000
b-2. What is the ratio of real assets to total assets?
ratio of real assets to total assets = (software + computer equipment) / total assets = $100,000 / $100,000 = 100%
c-1. Prepare the balance sheet after Lanni accepts the payment of shares from Microsoft.
Lanni Products
Balance Sheet
After it sold the software product to Microsoft
Assets:
Shares of Microsoft $125,000
Computer equipment $30,000
Total assets $155,000
Liabilities:
Notes payable $50,000
Total liabilities $50,000
Shareholders's equity
Paid in capital $50,000
Retained earnings $55,000
Total shareholders's equity $105,000
Total liabilities and shareholders' equity $155,000
c-2. What is the ratio of real assets to total assets?
ratio of real assets to total assets = computer equipment / total assets = $30,000 / $155,000 = 19.35%
a. When the Lanni takes out a bank loan. It receives $50,000 in cash and also signs a note promising to pay back the loan over three years.
Then the FINANCIAL ASSET CREATED: when the loan was received, a financial asset was created. that is Money is exchanged for a promissory note.
b. Although when the Lanni uses the cash from the bank plus $20,000 of its funds to finance the development of new financial planning software.
When the REAL ASSET CREATED: so that when the software was developed, a real asset was created. although that is Money was invested in developing the software.
c. Then Lanni sells the software product to Microsoft, which will market it to the public under the Microsoft name. Then Lanni accepts payment in the form of 2,500 shares of Microsoft stock.
Then the FINANCIAL ASSET CREATED: when the software was traded, a financial asset was created. so that A real asset was traded in exchange for financial assets.
d. After that the Lanni sells the shares of stock for $50 per share and also that the uses part of the proceeds to pay off the bank loan.
Thus that FINANCIAL ASSET DESTROYED: when the loan is paid back, the financial asset (loan) ceases to exist. so that When the money is paid back to the bank, the loan and also that the promissory note ceases to exist.
a-1. so that when we Prepare its balance sheet just after it gets the bank loan.
Lanni Products Balance Sheet After it got the bank loan Assets: Cash $70,000 Computer equipment $30,000 Total assets $100,000 The the Liabilities is: Notes payable $50,000 The Total liabilities is $50,000 Then the Shareholders' equity: Paid-in capital $50,000 To the Total share-holders' s equity $50,000 When the Total liabilities and shareholders' equity $100,000 So that is a-2. when the ratio of real assets to total assets that is Then the ratio of real assets to total assets = computer equipment / total assets = $30,000 / $100,000 = 30% After that the b-1. when we Prepare the balance sheet after Lanni spends $70,000 to develop its software product. Lanni Products Balance Sheet After it developed the software product Assets: Software $70,000 Computer equipment $30,000 Total assets $100,000 Liabilities: Notes payable $50,000 Total liabilities $50,000 Share-holders' s equity : Paid in capital $50,000 Then the Total share-holders' s equity $50,000 Total liabilities and shareholders' equity $100,000 b-2. the ratio of real assets to total assets that is ratio of real assets to total assets = (software + computer equipment) / total assets = $100,000 / $100,000 = 100% c-1. when we Prepare the balance sheet after Lanni accepts the payment of shares from Microsoft. Lanni Products Balance Sheet After it sold the software product to Microsoft Assets: Shares of Microsoft $125,000 Computer equipment $30,000 Total assets $155,000 Liabilities: Notes payable $50,000 Total liabilities $50,000 Share-holders' s equity Paid in capital $50,000 Retained earnings $55,000 Total shareholders' s equity $105,000 Total liabilities and shareholders' equity $155,000 c-2. the ratio of real assets to total assets When the ratio of real assets to total assets = computer equipment / total assets = $30,000 / $155,000 = 19.35%Learn more:
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Department G had 3,600 units, 40% completed at the beginning of the period, 12,000 units were completed during the period, 2,000 units were 20% completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period: Work in process, beginning of period $ 60,000 Costs added during period: Direct materials (10,400 at $9.8365) 102,300 Direct labor 79,800 Factory overhead 25,200 Assuming that all direct materials are placed in process at the beginning of production and that the first-in, first-out method of inventory costing is used, the equivalent units for materials and conversion costs, respectively, are
Answer:
Equivalent Units Materials 10400
Equivalent Units Conversion 10960
Cost Per Equivalent Unit Materials $9.8365
Cost Per Equivalent Unit D. Labor $ 7.2810
Cost Per Equivalent Unit FOH $ 2.2992
Explanation:
Particulars Units % of Completion Equivalent Units
Materials Conversion Materials Conversion
Complete 12000 100 100 12000 12000
Add EWIP 2000 100 20 2000 400
Less BWIP 3600 100 40 3600 1440
Equivalent Units 10400 10960
In FIFO as the name suggests we take out the units first completed. So we deduct the Beginning Work in Process (BWIP) from the sum of completed units and ending work in process (EWIP).
Costs added during period: Direct materials Direct labor Factory overhead
(10,400 at $9.8365)
102,300 79,800 25,200
Equivalent Unit 10400 10960 10960
Cost Per Equivalent Unit $9.8365 7.2810 2.2992
You are leading your organization's effort to purchase and install new accounting software. The project will cost an estimated $3 million, and over the past few months, you have had meetings with several potential vendors to evaluate their offerings and capabilities. It is early March, and the National Collegiate Athletic Association (NCAA) basketball tournament is underway. You receive a phone call from one of the sales reps you met with recently. He has two tickets to the second-round games next weekend and wants to give them to you. Can you accept this offer without raising any concerns
Answer:
No
Explanation:
This is the case because we are told the individual already had meetings with several potential vendors to evaluate their offerings and capabilities. However, one of the sales reps he met with recently is arranging for what appears to be an informal meeting (to watch a basketball tournament). By accepting this offer it may raise the concern of getting a special favor or even a bribe.
hich of the following statements is true? The denominator used in computing earnings per share represents the shares of common stock outstanding on the last day of the accounting period. Net income is not adjusted when computing earnings per share. Earnings per share is an internal measure and is not used by stockholders. By comparing earnings per share of a single corporation over time, a stockholder can evaluate the corporation’s relative earnings performance.
Answer:
By comparing earnings per share of a single corporation over time, a stockholder can evaluate the corporation’s relative earnings performance.
Explanation:
Earnings per share are often part of a corporation's financial statement. Since the shareholder of the corporation usually has a share or interest in the performance of the companythe relative earnings performance of the corporation can be estimated by comparing the earnings per share of the corporation over time.so correct answer is By comparing earnings per share of a single corporation over time, a stockholder can evaluate the corporation’s relative earnings performance.Does a higher GDP imply high welfare. Why?
Answer:
All economic value is subjective—free-market prices are determined by how much better off individuals believe a good or service can make them. ... So, in some sense, higher GDP should equate to greater human progress, because it means more valuable goods and services have been created.
The formula below tells us how to obtain the maturity value on a simple discount loan if we are given the proceeds, the discount rate, and the term. LaTeX: M = \frac{P}{1-d_RT}M = P 1 − d R T If a loan's annual simple discount rate is 2.14%, how many years would it take for the debt to double? (This is called the doubling time of a loan). Round your answer to the nearest tenth of a year. Hint: divide both sides of the equation by P. If M is twice as much as P, what should the fraction on the left-hand side equal?
Answer: it will take 23.4 YEARS for the debt to double.
Explanation:
Given that;
formula for maturity value on simple discount loan M = P / ( 1 - dRT )
loan's annual simple discount rate = 2.14%
our dR given as 2.14% = 2.14/100 = 0.0214
from the question, if the debt double i means M = 2P
so
2P = P / ( 1 - dRT )
we substitute
2P = P / 1 - (0.0214)T
T = 1 / 2*0.0214
T = 1 / 0.0428
T = 23.3644 = 23.4 YEARS
therefore it will take 23.4 YEARS for the debt to double.
Belsky Corporation has provided the following data from its activity-based costing system: Activity Cost Pools Estimated Overhead Cost Expected Activity Assembly $ 974,440 68,000 machine-hours Processing orders $ 95,300 2,000 orders Inspection $ 133,000 1,900 inspection-hours The company makes 450 units of product Q19S a year, requiring a total of 710 machine-hours, 42 orders, and 12 inspection-hours per year. The product's direct materials cost is $35.79 per unit and its direct labor cost is $29.53 per unit. According to the activity-based costing system, the unit product cost of product Q19S is closest to: (Round your intermediate calculations to 2 decimal places.)
Answer:
Unitary cost= $94.24
Explanation:
First, we need to calculate the predetermined overhead rate for each department:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Assembly= 974,440/68,000= $14.33 per machine-hour
Processing= 95,300/2,000= $47.65 per order
Inspection= 133,000/1,900= $70 per inspection
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Assembly= 14.33*710= $10,174.3
Processing= 47.65*42= $2,001.3
Inspection= 70*12= $840
Total overhead= $13,015.6
Unitary overhead= 13,015.6/450= $28.92
Finally, the unitary cost:
Unitary cost= 35.79 + 29.53 + 28.92
Unitary cost= $94.24
You need a 25-year, fixed-rate mortgage to buy a new home for $240,000. Your mortgage bank will lend you the money at a 8.6 percent APR for this 300-month loan. However, you can afford monthly payments of only $800, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment. Required: How large will this balloon payment have to be for you to keep your monthly payments at $800?
Answer:
the balloon payment after 300 months is $1,205,266.38
Explanation:
In order to pay the loan completely after 300 months, your monthly payment should be $1,948.75. Since you can only pay $800 per month, the loan's balance after 300 payments will be $1,205,266.38. This is irrational since you will end up owing 4 times the initial amount. You will never even be close to paying even the interest expense, so the principal increases every month.
I prepared an amortization schedule using an excel spreadsheet
A new building is to be constructed for a company and a fast connection between client and server systems within the building should be achieved. As well as the fastest possible connection between the new building and the old building. The new building is also not allowing wireless devices within it for security purposes. What networking components should one consider to achieve what the company wants if a medium sized budgetary constraint was put in place for the new building?
Options:
Category 6 cable runs for each network device with fiber optic feeds in/out of the buildings.Numerous 802.11b wireless access points along with category 5 cable runs between hubs and buildings. Fiber Optic connections to all network device s, e.g. clients and servers. Coaxial cable to all devices on the network with a fiber-optic feed in/out of the office.Answer:
Category 6 cable runs for each network device with fiber optic feeds in/out of the buildings.
Explanation:
Remember, we are told to consider the fact that the company has a medium-sized budgetary constraint, meaning we should pick an alternative networking component option that is cost-effective and yet serves the same purpose.
Since part of the requirements is that the networking components is a fast connection between client and server systems, a Category 6 (Cat6) cable has the ability to achieve speeds of up to 10 Gbps (Gigabyte per second). Meaning? it can meet the fast connection requirements at a reduced cost.
Senff Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: Activity Cost Pools Activity Rate Setting up batches $ 93.00 per batch Processing customer orders $ 82.83 per customer order Assembling products $ 17.26 per assembly hour Data concerning two products appear below: Product V91Z Product V21I Number of batches 69 12 Number of customer orders 20 9 Number of assembly hours 492 697 How much overhead cost would be assigned to Product V91Z using the activity-based costing system? (Round your intermediate calculations to 2 decimal places.)
Answer:
Total allocated overhead= $16,742.64
Explanation:
Giving the following information:
Activity Cost Pools Activity Rate
Setting up batches $ 93.00 per batch
Processing customer orders $ 82.83 per customer order
Assembling products $ 17.26 per assembly hour
Product V91Z
Number of batches 69
Number of customer orders 20
Number of assembly hours 492
To calculate the allocated overhead, we need to use the following formula:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Setting up= 93*69= 6,417
Processing= 82.83*20= 1,656.6
Assembling= 17.26*492= 8,669.04
Total allocated overhead= $16,742.64
You are the IT director at Attaway Airlines, a small regional air carrier. You chair the company's systems review committee, and you currently are dealing with strong disagreements about two key projects. The marketing manager says it is vital to have a new computerized reservation system that can provide better customer service and reduce operational costs. The vice president of finance is equally adamant that a new accounting system is needed immediately because it will be very expensive to adjust the current system to new federal reporting requirements. The VP outranks the marketing manager, and the VP is your boss. The next meeting, which promises to be a real showdown, is set for 9:00 am tomorrow. How will you prepare for the meeting
Explanation:
Been the IT director at Attaway Airlines, it will be important to prepare a draft of the advantages and the level of difficulties the new computerized reservation system from an IT perspective.
However, the ultimate goal is not to simply win arguments, but to explain and consider the facts from both the Vice president of finance and the Marketing Manager.
James, Inc., has purchased a brand new machine to produce its High Flight line of shoes. The machine has an economic life of 5 years. The depreciation schedule for the machine is straight-line with no salvage value. The machine costs $540,000. The sales price per pair of shoes is $77, while the variable cost is $29. Fixed costs of $245,000 per year are attributed to the machine. The corporate tax rate is 22 percent and the appropriate discount rate is 9 percent. What is the financial break-even point? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16)
Answer:
3,074 units sold or total revenue of $236,698 per year
Explanation:
cost of machine $540,000
depreciation expense per year = $540,000 / 5 = $108,000
contribution margin per unit sold = $77 - $29 = $48
we generally calculate the financial break even point of a business by using the following formula:
= EBIT × (1 - interest expense) × (1 - tax rate) - preferred dividends
But when we are dealing with projects, the financial break even point is the sales level at which the project's NPV = $0. If the sales level is lower, then the project will be rejected, and if the sales level is higher, then it should be accepted.
using an annuity formula, the free cash flow per year needed for the NPV = $0 is $540,000 / 3.8897 (PV annuity factor, 9%, 5 periods) = $138,828.19
$138,828.19 = {[(unit sales x $48) - $108,000] x 0.78} + $108,000
$30,828.19 = [(unit sales x $48) - $108,000] x 0.78
$39,523.32 = (unit sales x $48) - $108,000
$147,523.32 = unit sales x $48
unit sales = $147,523.32 / $48 = 3,073.40 units ≈ 3,074 units sold
Mr. and Mrs. Garcia have a total of $100,000 to be invested in stocks, bonds, and a money market account. The stocks have a rate of return of 12%/year, while the bonds and the money market account pay 8%/year and 4%/year, respectively. The Garcias have stipulated that the amount invested in stocks should be equal to the sum of the amount invested in bonds and 3 times the amount invested in the money market account. How should the Garcias allocate their resources if they require an annual income of $10,000 from their investments
Answer:
Explanation:
Let y amount be invested in bonds
Let x amount be invested in money account
Let x amount be invested in stocks
x = y + 3x
10,000 = 12/100(y+3x) + 8/100*y + 4/100*x
10,000 = 12(y+3x) + 8y + 4x / 100
10,000 * 100 = 12y+36x + 8y + 4x
2500 * 100 = 3y + 9x + 2y + x
250,000 = 5y + 10x
50,000 = y + 2x.......................(1)
x + y + z = $100,000
y + 3x + y + x = $100,000
2y + 4x = 100,000
y + 2x = 50,000.......................(ii)
y = 50,000 - 2x
x = 50,000 + x
z = z
2 Options are
{(x,y,x), (x2,y2,z2)}
= (50000, 50000) (60000, 30000, 10000)
Ms. Frank is planning for a 25-year retirement period and wishes to withdraw a portion of her savings at the end of each year. She plans to withdraw $10 000 at the end of the first year, and then to increase the amount of the withdrawal by $1000 each year, to offset inflation. How much money should she have in her savings account at the start of the retirement period, if the bank pays (a) 9'10, (b) 7:%, per year, compounded annually
Answer:
I guess the interest rates are 9.10% and 7% per year.
a) $173,369.67
b) $217,212.31
Explanation:
the total distributions received by Ms. Frank are:
year distribution
1 10000
2 11000
3 12000
4 13000
5 14000
6 15000
7 16000
8 17000
9 18000
10 19000
11 20000
12 21000
13 22000
14 23000
15 24000
16 25000
17 26000
18 27000
19 28000
20 29000
21 30000
22 31000
23 32000
24 33000
25 34000
Using excel, I calculated the present value of this annuity using the different discount rates (using present value function)
a) $173,369.67
b) $217,212.31
What are three sources that offer specialized information on records management?
Answer: i think one of them are right
Establish a records management component in institutional information resource ... Provide for adequate data collection and information access and retrieval; ... and to request justification for the purchase of highly specialized filing systems.
Explanation:
The glossary includes most important archival terms with specialized meanings. ... or purchase, historical materials from sources outside the archival institution. ... DOCUMENT: Recorded information regardless of form or medium with three basic ... To establish retention periods for current records and provide for their proper ...
The three sources that offer specialized information on records management are accounting records, legal records, and personal records.
What is records management?Records management, also known as records and information management, is an organizational function devoted to the management of information in an organization throughout its life cycle, from the time of creation or receipt to its eventual disposition.
This includes identifying, classifying, storing, securing, retrieving, tracking and destroying or permanently preserving records. The ISO standard defines records management as field of management responsible for the efficient and systematic control of the creation, receipt, maintenance, use and disposition of records, including the processes for capturing and maintaining evidence of and information about business activities and transactions in the form of records. An organization's records preserve aspects of institutional memory. In determining how long to retain records, their capacity for re-use is important.
Many are kept as evidence of activities, transactions, and decisions. Others document what happened and why.
Learn more about management, here:
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For every decision you make there is a trade off
Answer:
True
Explanation:
I took the test on edge
To illustrate Mill's concern with the uncultivated making poor decisions, consider the following example. Your state government determines that it has a budget surplus of $5 billion that it must spend before the end of the fiscal year. So, the legislature puts the following to a popular vote: ALL citizens currently residing in the state are entitled to either (1) a free college education; or (2) a free lifetime supply of beer. Because the "uncultivated" among you may not be able to distinguish between the "lower" good of free beer and the "higher" good of free education, do you believe that the majority of citizens would choose the beer? In what, if any, ways might decisions such as this led to the eventual decline of the cultural and intellectual life of your state? Mill argued that we should implement a requirement that people be "competent" judges, familiar with differences, before they could vote. Do you agree? IF so, how should we determine who is competent or who is not?
Answer:
Because the "uncultivated" among you may not be able to distinguish between the "lower" good of free beer and the "higher" good of free education, do you believe that the majority of citizens would choose the beer?
Mill believed that a proper utilitarian behavior would favor nobler and higher pleasures, e.g. education, arts, while it will rejects voluptuary or low level pleasures, e.g. free beer for life. That is why he separates people between those who only seek low level pursuits and those that actually seek higher ones.
I would really feel disappointed if the majority of the state's residents voted for free beer, but actually I really believe that it would be the winning option. Sadly, it is like watching Titanic and still hope that Leo will not die. You know its inevitable, but until the last moment you will not accept it.
In what, if any, ways might decisions such as this led to the eventual decline of the cultural and intellectual life of your state?
When I was little (on kindergarten), my teacher taught us 3 things:
my ABCto sing the Star-Spangled Banner (although no one really remembered the words)the idea that if you study and work hard enough, you will succeed in lifeI hope that other teachers still do the same and keep teaching these things, but I'm not so sure about the third one. Sadfully, as a society becomes less educated and less intellectual, they start to decline. That decline not only represents being dumber, but it also means that every time it will be harder for someone to do the right thing and to be able to succeed.
Mill argued that we should implement a requirement that people be "competent" judges, familiar with differences, before they could vote. Do you agree? IF so, how should we determine who is competent or who is not?
I do not agree with him since the basic premise of democracy is that everyone should be allowed to vote. No one has the right to determine who is competent enough to vote.
E.g. I do not like President Trump, and if I could determine who could vote or not, I would dictate that only people living in large urban areas should be allowed to vote. Why? Because according to me, urban life is better than rural life. This way I would make sure that the Republican party never wins an election again, but is that fair? Of course not. People living in rural areas or small towns have the same right to vote than people living on cities.
The same logic would apply to only allowing people living on wealthy states to vote, or only allowing people of certain race to vote. Whenever someone tries to limit other people's rights, bad things will happen.
Lionel is an unmarried law student at State University Law School, a qualified educational institution. This year Lionel borrowed $27,500 from County Bank and paid interest of $1,650. Lionel used the loan proceeds to pay his law school tuition. Calculate the amounts Lionel can deduct for higher education expenses and interest on higher-education loans under the following circumstances: (Leave no answer blank. Enter zero if applicable.) a. Lionel's AGI before deducting interest on higher-education loans is $50,000..
Answer:
Since 2019, the deduction limit for interest expense deductions on qualified higher education loans is $2,500. In order to qualify for this deduction, the taxpayer's adjusted AGI must be less than $85,000 for single filers (Lionel's income is below the threshold).
So Lionel will be able to deduct $1,650 as interest expense (above the line deduction).
Lionel can also deduct $2,500 form the American Opportunity Tax Credit for higher education expenses.
Glade Company leases computer equipment to customers under direct financing leases. The equipment has no residual value at the end of the lease term, and the leases do not contain bargain purchase options. Glade wishes to earn 8% interest on a five-year lease of equipment with a fair value of $323,400. Use tables (PV of 1, PVAD of 1, and PVOA of 1) (Use the appropriate factor(s) from the tables provided.) Required:
Compute the total amount of interest revenue that Glade will earn over the life of the lease. (Round your intermediate and final answers to 2 decimal places.)
Answer:
$51,588.70
Explanation:
The computation of the total amount of interest revenue is shown below:-
Annual lease payments = Fair value of Equipment ÷ PV factor of $1 annuity due
= $323,400 ÷ (1 + (1 - (1.08)^-4) ÷ 0.08)
= $323,400 ÷ 4.31213
= $74,997.74
Now,
Total interest revenue = Gross lease payments receivable - Fair value
= $74,997.74 × 5 - $323,400
= $374,988.70 - $323,400
= $51,588.70
Pincus Associates uses the allowance method to account for bad debts. During 2021, its first year of operations, Pincus provided a total of $250,000 of services on account. In 2021, the company wrote off uncollectible accounts of $10,000. By the end of 2021, cash collections on accounts receivable totaled $210,000. Pincus estimates that 20% of the accounts receivable balance at 12/31/2021 will prove uncollectible.Required:1. What journal entry did Pincus record to write off uncollectible accounts during 2021?2. What journal entry should Pincus record to recognize bad debt expense for 2021?
Answer:
Ending Accounts Receivable = Services on Account - Amount Written Off - Collection of accounts receivables
= $250,000 - $10,000 - $210,000
= $30,000
Required Balance in Allowance for Un-collectible accounts at Year end = Accounts Receivable at 12/31/2021 * 20%
= $30,000 * 20%
= $6,000
Bad debt Expense = Required Balance in Allowance account + Amount written off
= $6,000 + $10,000
= $16,000
Journal Entries
Event General Journal Debit Credit
1 Allowance for doubtful accounts $10,000
To Accounts Receivable $10,000
2 Bad debt Expense $16,000
To Allowance for doubtful accounts $16,000
ABC Retail stocks and sells its own brand of personal computers. It costs the firm $600 each time it places an order with a manufacturer for computers. The cost of carrying one computer in inventory for one year is $225. The store manager estimates the total annual demand for computers will be 2,000 units with a constant demand rate throughout the year. ABCs policy is never to have stockout of the store brand TV. The store is open for business seven days per week from 9 AM to 6 PM. Determine the time between orders TBO (in working days)
Answer:
18 days
Explanation:
first we must determine the economic order quantity:
EOQ = √[(2 x S x D) / H]
S = order cost = $600D = annual demand = 2,000H = holding cost = $225EOQ = √[(2 x 600 x 2,000) / 225] = 103.28 units ≈ 103 units
total number of orders = 2,000 / 103 = 19.4175
Time between orders = working days per year / total number of orders = 365 / 19.4175 = 18.7975 days
since the company's policy is to never run out of stock, then we should round down the time between orders to 18 days. If we round up to 19 days (which is much closer actually), the risk of an stock out exists.
After reading this chapter, it isn't surprising that you're becoming an investment wizard. With your newfound expertise, you purchase 100 shares of KSU Corporation for $31.17 per share. Assume the price goes up to $40.07 per share over the next 12 months and you receive a qualified dividend of $0.41 per share. What would be your total return on your KSU Corporation investment? Assuming you continue to hold the stock, calculate your after-tax return. How is your realized after-tax return different if you sell the stock? In both cases assume you are in the 25 percent federal marginal tax bracket and 15 percent long-term capital gains and qualified dividends tax bracket and there is no state income tax on investment income.
Answer:
before-tax 29.87%
after-tax 26.37%
Explanation:
The return will be the capital gain and the dividend gain.
capital gain: ending market price - purchase price
$ 40.07 - $ 31.17 = $ 8.90
dividend gain: $0.41
total return: $8.90 + $0.41 = $9.31
investment: $ 31.17
rate of return before-tax: 9.31 / 31.17 = 0,29868 = 29.87%
return after tax:
dividends 0.41 x ( 1 - 0.25) = 0.3075
capital gain: (as we hold the share we can use long.term capital gain rate
9.31 x ( 1 - 0.15) = 7,9135
total return: 7.9135 + 0.3075 = 8.221
rate of return after-tax 8.221 / 31.17 = 0,2637471928136 = 26.37%
An all-equity new firm is developing its business plan. It will require $615,000 of assets (which equals common equity), and it projects $450,000 of sales and $355,000 of operating costs for the first year. Management is reasonably sure of these numbers because of contracts with its customers and suppliers. It can borrow at a rate of 7.5%, but the bank requires it to have a TIE of at least 4.0. The firm will use debt and common equity for financing. What is the maximum debt to capital ratio (measured as debt/total common equity) the firm can use? (Hint: Find the maximum dollars of interest, then the debt that produces that interest, and then the related debt to capital ratio.)
Answer:
51.49%
Explanation:
An all equity new firm is developing its business plan
It will require assets of $615,000
The firm projects $450,000 of sales and $355,000 of operating costs for the first year
The first step is to calculate the EBIT
EBIT= sales - operating costs
= $450,000-$355,000
= $95,000
The interest can be calculated as follows
Interest= EBIT/TIE
= 95,000/4
= $23,750
Since the bank can borrow loan at the rate of 7.5% them the debt is
= 23,750/7.5/100
= 23,750/0.075
= $316,666.7
Therefore the maximum debt to capital ratio can be calculated as follows
= 316,666.7/615,000 × 100
= 0.5149 × 100
= 51.49%
Hence the maximum debt to capital ratio is 51.49%
