Answer:
a. Revenues - These will increase by $5 million to represent the entire value of the order.
b. Earnings. - Increase by $3 million
Earnings in this case are revenue less the cost of inventory which will be;
= 5 - 2
= $3 million
c. Receivables - Increase by $4 million
The customer paid $1 million upfront which means that they still owe $4 million out of the $5 million. This will go to the receivables account to show that the customer owes the business.
Larry purchased an annuity from an insurance company that promises to pay him $11,500 per month for the rest of his life. Larry paid $1,410,360 for the annuity. Larry is in good health and is 72 years old. Larry received the first annuity payment of $11,500 this month. Use the expected number of payments in Exhibit 5-1 for this problem. b. If Larry lives more than 15 years after purchasing the annuity, how much of each additional payment should he include in gross income
Answer:
If Larry outlives the IRS's life expectancy, he has two options:
He must pay taxes for the full amount that he receives every month beginning with the 187th payment. The IRS allows you to deduct the cost of the annuity, but if you already discounted the full cost, then you start paying taxes for every cent that you get. Or he can recalculate his tax deduction. But recalculating when you are about to pass the age threshold doesn't make sense. After he turns 87, Larry will only be able to deduct $45,495.48 more. It sounds like a lot of money, but since the IRS doesn't recognize any interest on your investment, then the sooner you discount your taxes, the better.Explanation:
According to the IRS, Larry's life expectancy is 15.5 more years (IRS publication 590, appendix b , table I: single life expectancy), so the total number of distributions = 15.5 x 12 = 186.
for tax purposes, he can deduct $1,410,360 / 186 = $7,582.58 from each distribution. This means that he will only have to pay income taxes for $11,500 - $7,582.58 = $3,917.42.
If Larry outlives the IRS's life expectancy, he has two options:
He must pay taxes for the full amount that he receives every month beginning with the 187th payment. The IRS allows you to deduct the cost of the annuity, but if you already discounted the full cost, then you start paying taxes for every cent that you get.
Or he can recalculate his tax deduction. But recalculating when you are about to pass the age threshold doesn't make sense. After he turns 87, Larry will only be able to deduct $45,495.48 more. It sounds like a lot of money, but since the IRS doesn't recognize any interest on your investment, then the sooner you discount your taxes, the better.
Gains from trade
Consider two neighboring island countries called Contente and Dolorium. They each have 4 million labor hours available per month that they can use to produce rye, jeans, or a combination of both. The following table shows the amount of rye or jeans that can be produced using 1 hour of labor.
Country Rye Jeans
(Bushels per hour of labor) (Pairs per hour of labor)
Contente 8 16
Dolorium 5 20
Initially, suppose Contente uses 1 million hours of labor per week to produce jeans and 3 million hours per week to produce rye, while Dolorium uses 3 million hours of labor per week to produce jeans and 1 million hours per week to produce rye. Consequently, Contente produces 6 million pairs of jeans and 36 million bushels of rye, and Dolorium produces 12 million pairs of jeans and 16 million bushels of rye. Assume there are no other countries willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of jeans and rye it produces.
Contente's opportunity cost of producing 1 bushel of rye is _____ of jeans, and Dolorium's opportunity cost of producing 1 bushel of rye is _____ of jeans. Therefore, _______ has a comparative advantage in the production of rye, and _____ has a comparative advantage in the production of jeans.
Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. In this case, the country that produces rye will produce _____ million bushels per month, and the country that produces jeans will produce _____ million pairs per month.
In the following table, enter each country's production decision on the third row of the table (marked "Production").
Suppose the country that produces rye trades 18 million bushels of rye to the other country in exchange for 54 million pairs of jeans.
In the following table, select the amount of each good that each country exports and imports in the boxes across the row marked "Trade Action," and enter each country's final consumption of each good on the line marked "Consumption."
When the two countries did not specialize, the total production of rye was 23 million bushels per month, and the total production of jeans was 68 million pairs per month. Because of specialization, the total production of rye has increased by _____ million bushels per month, and the total production of jeans has increased by _____ million pairs per month.
Because the two countries produce more rye and more jeans under specialization, each country is able to gain from trade.
Calculate the gains from trade—that is, the amount by which each country has increased its consumption of each good relative to the first row of the table. In the following table, enter this difference in the boxes across the last row (marked "Increase in Consumption").
Contente Dolorium
Rye Jeans Rye Jeans
(Millions of (Millions of pairs) (Millions of (Millions of pairs)
bushels) bushels)
Without Trade
Production 8 48 15 20
Consumption 8 48 15 20
With Trade
Production
Trade Action
Consumption
Gains from Trade
Increase in Consumption
Answer:
Contente's opportunity cost of producing 1 bushel of rye is 0.5 of jeans, and Dolorium's opportunity cost of producing 1 bushel of rye is 0.25 of jeans. Therefore, DOLORIUM has a comparative advantage in the production of rye, and CONTENTE has a comparative advantage in the production of jeans.
Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. In this case, the country that produces rye will produce 64 million bushels per month, and the country that produces jeans will produce 24 million pairs per month.
Suppose the country that produces rye trades 54 million bushels of rye to the other country in exchange for 18 million pairs of jeans.
Dolorium:
Export 54 million bushels of rye
Consume 10 million bushels of rye
Import 18 million pairs of jeans
Contente:
Export 18 million pairs of jeans
Consume 6 million pairs of jeans
Import 54 million bushels of rye
Before specialization, the total production of rye = 36 + 16 = 52 million bushels, and the total production of jeans = 6 + 12 = 18 million pairs.
Because of specialization, the total production of rye has increased by 12 million bushels per month, and the total production of jeans has increased by 6 million pairs per month.
Calculate the gains from trade—that is, the amount by which each country has increased its consumption of each good relative to the first row of the table.
Contente:
Before specialization and trade, produced and consumed 6 million pairs of jeans and 36 million bushels of rye.
After specialization and trade, consumed 54 million bushels of rye and 6 million pairs of jeans.
Gain from trade is 18 million bushels of rye.
Dolorium:
Before specialization and trade, produced and consumed 12 million pairs of jeans and 16 million bushels of rye.
After specialization and trade, consumed 10 million bushels of rye and 18 million pairs of jeans.
Gain from trade is -2 million bushels of rye and 6 million pairs of jeans.
Explanation:
There is a mistake in the question, since Contente's production of jeans must be 6 per hour and its production of rye should be 12 bushels per hour. That is the only way that it can produce 6 million pairs of jeans and 36 million bushels of rye. Something similar happens with Dolorium, it must be able to produce 16 bushels of rye per hour and 4 pairs of jeans per hour in order to produce 12 million pairs of jeans and 16 million bushels of rye.
Country Rye Jeans
Contente 12 6
Dolorium 16 4
Contente's opportunity cost of producing rye = 6 / 12 = 0.5 pairs of jeans.
Dolorium's opportunity cost of producing rye = 4 / 16 = 0.25 pairs of jeans.
Dolorium's production of rye = 16 bushels x 4,000,000 labor hours = 64,000,000 bushels of rye.
Contente's production of jeans = 6 pairs x 4,000,000 labor hours = 24,000,000 pairs of jeans
I need to select the items that are needs for my bank statement
Answer: Get a cell phone plan can insurance and a backpack. If u dont live in home im guessing
If u live in home, Cell Phone Plan, Car insurance, Electric Bill,
Explanation: Since you have 230 dollars
Which of the following statements is correct with respect to machine setup costs? A. Since direct material and direct labor information are not given, it is impossible to determine if the product lines are being over/undercosted. B. If the Digital product line is being overcosted with respect to machine setup costs, it is likely that the Analog product line is also being overcosted with respect to machine setup costs. C. Under the current costing system, 60% of the machine setup manufacturing overhead costs are applied to the Digital product line. D. Under the activity based costing system, 37.5% of the machine setup manufacuring overhead costs are applied to the Analog product line. E. The current costing system is not over/undercosting the product lines with respect to machine setup costs.
Answer:
A. Since direct material and direct labor information are not given, it is impossible to determine if the product lines are being over/undercosted.
Explanation:
The above option is the correct answer to the question asked above regarding to the machine setup costs.
Kubin Company’s relevant range of production is 25,000 to 33,500 units. When it produces and sells 29,250 units, its average costs per unit are as follows: Amount per Unit Direct materials $ 8.50 Direct labor $ 5.50 Variable manufacturing overhead $ 3.00 Fixed manufacturing overhead $ 6.50 Fixed selling expense $ 5.00 Fixed administrative expense $ 4.00 Sales commissions $ 2.50 Variable administrative expense $ 2.00 Required: 1. If 25,000 units are produced and sold, what is the variable cost per unit produced and sold? 2. If 33,500 units are produced and sold, what is the variable cost per unit produced and sold? 3. If 25,000 units are produced and sold, what is the total amount of variable cost related to the units produced and sold? 4. If 33,500 units are produced and sold, what is the total amount of variable cost related to the units produced and sold? 5. If 25,000 units are produced, what is the average fixed manufacturing cost per unit produced? 6. If 33,500 units are produced, what is the average fixed manufacturing cost per unit produced? 7. If 25,000 units are produced, what is the total amount of fixed manufacturing overhead incurred to support this level of production? 8. If 33,500 units are produced, what is the total amount of fixed manufacturing overhead incurred to support this level of production? (Round per unit values to 2 decimal places.)
Answer:
$21.50$21.5025,000 x $21.50 = $537,50033,500 x $21.50 = $720,250$453,375 / 25,000 = $18.135$453,375 / 33,500 = $13.53$453,375$453,375Explanation:
29,250 units produced and sold
Direct materials $8.50
Direct labor $5.50
Variable manufacturing overhead $3.00
Fixed manufacturing overhead $6.50, total $190,125
Fixed selling expense $5.00, total $146,250
Fixed administrative expense $4.00, total $117,000
Sales commissions $2.50
Variable administrative expense $2.00
relevant range of production is 25,000 to 33,500 units
total variable cost per unit = $8.50 + $5.50 + $3 + $2.50 + $2 = $21.50
that means that if the company produces and sells between 25,000 to 33,500 units, their variable cost per unit will be the same.
total fixed costs will also be the same:
Fixed manufacturing overhead $190,125Fixed selling expense $146,250 Fixed administrative expense $117,000 total $453,3751. If 25,000 units are produced and sold by Kubin Company, the variable cost per unit produced and sold is $21.50.
2. If 33,500 units are produced and sold by Kubin Company, the variable cost per unit produced and sold is $21.50.
3. If 25,000 units are produced and sold by Kubin Company, the total amount of variable cost related to the units produced and sold is $537,500 (25,000 x $21.50).
4. If 33,500 units are produced and sold by Kubin Company, the total amount of variable cost related to the units produced and sold is $720,2500 (33,500 x $21.50).
5. If 25,000 units are produced by Kubin Company, the average fixed manufacturing cost per unit produced is $18.14 ($453,375/25,000).
6. If 33,500 units are produced by Kubin Company, the average fixed manufacturing cost per unit produced is $13.53 ($453,375/33,500).
7. If 25,000 units are produced by Kubin Company, the total amount of fixed manufacturing overhead incurred to support this level of production is $453,375.
8. If 33,500 units are produced by Kubin Company, the total amount of fixed manufacturing overhead incurred to support this level of production remains $453,375.
Data and Calculations:Relevant production range = 25,000 to 33,500 units
Current production and sales units =29,250 units
Average costs per unit based on 29,250 units:
Direct materials $ 8.50
Direct labor $ 5.50
Variable manufacturing overhead $ 3.00
Total variable manufacturing cost per unit = $17
Fixed manufacturing overhead = $ 6.50
Total manufacturing cost per unit = $23.50 ($17 + $6.50)
Fixed selling expense $ 5.00
Fixed administrative expense $ 4.00
Sales commissions $ 2.50
Variable administrative expense $ 2.00
Variable costs:Total variable manufacturing cost per unit = $17
Sales commissions $ 2.50
Variable administrative expense $ 2.00
Total variable costs per unit = $21.50
Fixed Costs:Fixed manufacturing overhead $ 6.50
Fixed selling expense $ 5.00
Fixed administrative expense $ 4.00
Total fixed costs per unit $15.50
Total fixed costs based on 29,250 units = $453,375 ($15.50 x 29,250)
Thus, the variable cost per unit remains the same no matter the units produced and sold, while the total variable costs varies. On the other hand, the unit fixed cost varies while the total fixed costs are constant within the relevant range.
Learn more about variable and fixed costs of production here: https://brainly.com/question/7202175
Since 1970, Super Rise, Inc., has provided maintenance services for elevators. On January 1, 2021, Super Rise obtains a contract to maintain an elevator in a 90-story building in New York City for 10 months and receives a fixed payment of $80,000. The contract specifies that Super Rise will receive an additional $40,000 at the end of the 10 months if there is no unexpected delay, stoppage, or accident during the year. Super Rise estimates variable consideration to be the most likely amount it will receive.
Required:
1. Assume that, because the building sees a constant flux of people throughout the day, Super Rise is allowed to access the elevators and related mechanical equipment only between 3am and 5am on any given day, which is insufficient to perform some of the more time-consuming repair work. As a result, Super Rise believes that unexpected delays are likely and that it will not earn the bonus. Prepare the journal entry Super Rise would record on January 1.
2. Assume instead that Super Rise knows at the inception of the contract that it will be given unlimited access to the elevators and related equipment each day, with the right to schedule repair sessions any time. When given these terms and conditions, Super Rise has never had any delays or accidents in the past. Prepare the journal entry Super Rise would record on January 31 to record one month of revenue.
3. Assume the same facts as requirement 1. In addition assume that, on May 31, Super Rise determines that it does not need to spend more than two hours on any given day to operate the elevator safely because the client's elevator is relatively new. Therefore, Super Rise believes that unexpected delays are very unlikely. Prepare the journal entry Super Rise would record on May 31 to recognize May revenue and any necessary revision in its estimated bonus receivable.
Answer:
1) Jan 1
Dr Cash $80,000
Cr Deferred Revenue $80,000
2)Jan 31
Dr Deferred Revenue 8,000
Dr Bonus Receivable 4,000
Cr Service Revenue 12,000
3)May 31
Dr Deferred Revenue 8,000
Dr Bonus Receivable 20,000
Cr Service Revenue 28,000
Explanation:
1. Preparation of the journal entry that Super Rise would record on January 1.
Based on the information we were told that a contract was obtained to maintain an elevator for 10 months in which they receives a fixed payment of the amount of $80,000 which means that the Journal entry on January 1will be:
Jan 1
Dr Cash $80,000
Cr Deferred Revenue $80,000
2)Preparation of journal entry Super Rise would record on Jan 31
Jan 31
Dr Deferred Revenue 8,000
(80,000/10months)
Dr Bonus Receivable 4,000
(40,000/10months)
Cr Service Revenue 12,000
3)Preparation of the journal entry Super Rise would record on May 31
May 31
Dr Deferred Revenue 8,000
(80,000/10months)
Dr Bonus Receivable 20,000
[( 40,000/10months)*5months]
January to May will give us 5months
Cr Service Revenue 28,000
The objective of maximizing value for the shareholders provides an important theme in corporate finance. This objective is not without criticism. Which of the following is NOT a criticism. Select one: a. The objective is blind to social and ethical costs associated with value maximization. b. The objective does not well account for the fact that managers are naturally inclined to act in their own best interests, which are not always in line with that shareholders. c. It assumes that accrual based profits are superior to cash flows. d. It assumes some level of market efficiency.
Answer:
D
Explanation:
Agency conflicts arises when the objectives of managers isn't aligned with that of shareholders.
Due to the objective of maximising value for shareholders, managers might be induced to engage in aggressive accounting practices in order to present a higher profits than might actually exist. This practice is unethical. This places more emphasis on profits than cash flows.
Colton Enterprises experienced the following events for Year 1, the first year of operation:Acquired $37,000 cash from the issue of common stock.Paid $12,200 cash in advance for rent. The payment was for the period April 1, Year 1, to March 31, Year 2.Performed services for customers on account for $76,000.Incurred operating expenses on account of $36,000.Collected $58,500 cash from accounts receivable.Paid $23,000 cash for salary expense.Paid $28,800 cash as a partial payment on accounts payable.Adjusting EntriesMade the adjusting entry for the expired rent. (See Event 2.)Recorded $2,800 of accrued salaries at the end of Year 1.Events for Year 2Paid $2,800 cash for the salaries accrued at the end of the prior accounting period.Performed services for cash of $25,000.Purchased $3,000 of supplies on account.Paid $11,100 cash in advance for rent. The payment was for one year beginning April 1, Year 2.Performed services for customers on account for $92,000.Incurred operating expenses on account of $43,500.Collected $91,000 cash from accounts receivable.Paid $41,000 cash as a partial payment on accounts payable.Paid $31,700 cash for salary expense.Paid a $11,000 cash dividend to stockholders.Adjusting EntriesMade the adjusting entry for the expired rent. (Hint: Part of the rent was paid in Year 1.)Recorded supplies expense. A physical count showed that $550 of supplies were still on hand.d-1. Prepare an income statement for Year 1.d-2. Prepare a statement of changes in stockholders’ equity for Year 1.d-3. Prepare a balance sheet for Year 1.d-4. Prepare a statement of cash flows for Year 1. (Amounts to be deducted should be indicated by a minus sign.)
Answer:
d1) Colton Enterprises
Income Statement
For the year ended December 31, Year 1
Service revenue $76,000
Expenses:
Operating expenses $36,000Wages expense $25,800Rent expense $9,150 ($70,950)Net income $5,050
d2) Colton Enterprises
Changes in stockholders' equity
For the year ended December 31, Year 1
Beginning balance $0
Common stocks issued $37,000
Net income $5,050
Subtotal $42,050
Dividends paid $0
Ending balance Dec. 31, year 1 $42,050
d3) Colton Enterprises
Balance Sheet
For the year ended December 31, Year 1
Assets:
Cash $31,500
Accounts receivable $17,500
Prepaid rent $3,050
Total assets $52,050
Liabilities:
Accounts payable $7,200
Wages payable $2,800
Total liabilities $10,000
Stockholders' Equity:
Common stock $37,000
Retained earnings $5,050
Total stockholders' equity $42,050
Total liabilities + equity $52,050
d4) Colton Enterprises
Statement of cash flows
For the year ended December 31, Year 1
Cash flows from operating act.
Net income $5,050
Adjustments to net income:
Increase in accounts payable $7,200Increase in wages payable $2,800 Increase in accounts receivable ($17,500)Increase in prepaid rent ($3,050) ($10,550)Net cash provided by OA ($5,500)
Cash flows from investing act. $0
Cash flows from financing act.
Issuance of common stocks $37,000
Dividends paid $0
Net cash provided by FA $37,000
Net increase in cash $31,500
Initial cash balance $0
Ending cash balance $31,500
Explanation:
Events for yer 1:
Acquired $37,000 cash from the issue of common stock.
Dr Cash 37,000
Cr Common stock 37,000
Paid $12,200 cash in advance for rent. The payment was for the period April 1, Year 1, to March 31, Year 2.
Dr Prepaid rent 12,200
Cr Cash 12,200
Performed services for customers on account for $76,000.
Dr Accounts receivable 76,000
Cr Service revenue 76,000
Incurred operating expenses on account of $36,000.
Dr Operating expense 36,000
Cr Accounts payable 36,000
Collected $58,500 cash from accounts receivable.
Dr Cash 58,500
Cr Accounts receivable 58,500
Paid $23,000 cash for salary expense.
Dr Wages expense 23,000
Cr Cash 23,000
Paid $28,800 cash as a partial payment on accounts payable.
Dr Accounts payable 28,800
Cr Cash 28,800
Made the adjusting entry for the expired rent.
Dr Rent expense 9,150
Cr Prepaid rent 9,150
Recorded $2,800 of accrued salaries at the end of Year 1.
Dr Wages expense 2,800
Cr Wages payable 2,800
Events for Year 2
Paid $2,800 cash for the salaries accrued at the end of the prior accounting period.
Dr Wages payable 2,800
Cr Cash 2,800
Performed services for cash of $25,000.
Dr Cash 25,000
Cr Service revenue 25,000
Purchased $3,000 of supplies on account.
Dr Supplies 3,000
Cr Accounts payable 3,000
Paid $11,100 cash in advance for rent. The payment was for one year beginning April 1, Year 2.
Dr Prepaid rent 11,100
Cr Cash 11,100
Performed services for customers on account for $92,000.
Dr Accounts receivable 92,000
Cr Service revenue 92,000
Incurred operating expenses on account of $43,500.
Dr Operating expenses 43,500
Cr Accounts payable 43,500
Collected $91,000 cash from accounts receivable.
Dr Cash 91,000
Cr Accounts receivable 91,000
Paid $41,000 cash as a partial payment on accounts payable.
Dr Accounts payable 41,000
Cr Cash 41,000
Paid $31,700 cash for salary expense.
Dr Wages expense 31,700
Cr Cash 31,700
Paid a $11,000 cash dividend to stockholders.
Dr Dividends 11,000
Cr Cash 11,000
Adjusting entry for expired rent
Dr Rent expense 11,375
Cr Prepaid rent 11,375
Dr Supplies expense 2,450
Cr Supplies 2,450
Starbucks and Disney both once faltered in their
marketing efforts. This was because they were too
focused on and lost sight of their
Answer:
e. growth; customers
Explanation:
Starbucks and Disney both once faltered in their marketing efforts. This was because they were too focused on "growth" and lost sight of their "customers".
Starbucks and Disney lost sight of their customers as a result of focusing so much on growth. Even though growth is good but when you focus so much on it and loose customers, how can you grow? This affected their marketing efforts and led to wastage of resources.
The pursuit of growth should be with foresight and with the customers in mind. Such will reward the firm's marketing efforts.
Answer:
e
Explanation:
Kevin invests $800 in an account that earns 5% simple interest. Jeremy invests $600 in an account earning 6%
interest compounded annually. Who will have earned more interest after 3 years? How much more?
A. Kevin will have earned $5.39 more than Jeremy after 3 years.
B. Jeremy will have earned $5.39 more than Kevin after 3 years.
C. Kevin will have earned $18.10 more than Jeremy after 3 years.
D. Jeremy will have earned $18.10 more than Kevin after 3 years.
Answer:
A
Explanation:
What is the price elasticity of demand? How is it calculated? Question #2: The makers of academic books find that when they raise the price of the average book from $50 to $75, quantity demanded among students drops from 100 to 90. Among casual readers, quantity demanded drops from 80 to 40. a. Calculate the price elasticity of demand for each group. b. Is demand price elastic or price inelastic for each group? c. Using the determinants of demand, explain why there is a difference in elasticity for each group.
Answer:
a. Calculate the price elasticity of demand for each group.
PED for students = 0.2PED for casual readers = 1b. Is demand price elastic or price inelastic for each group?
PED for students = 0.2, price inelasticPED for casual readers = 1, unitary elastic demandc. Using the determinants of demand, explain why there is a difference in elasticity for each group.
Basically, students are required to buy academic books, so their preferences will be to buy them regardless of their price, that is why their PED is price inelastic. On the other hand, casual readers will compare the price of academic books to other books (competition) and have more options where to choose from, that is why their PED is higher.Explanation:
The price elasticity of demand shows us how a 1% change in price will affect the quantity demanded of a product.
PED = % change in Q demanded / % change in price
PED for students:
% change in Q demanded = (90 - 100) / 100 = -10% % change in price = (75 - 50) / 50 = 50%PED = -0.1 / 0.5 = -0.2 or |0.2| in absolute terms
PED for casual readers:
% change in Q demanded = (40 - 80) / 80 = -50% % change in price = (75 - 50) / 50 = 50%PED = -0.5 / 0.5 = -1 or |1| in absolute terms
Using High-Low to Calculate Fixed Cost, Calculate the Variable Rate, and Construct a Cost Function
Pizza Vesuvio makes specialty pizzas. Data for the past 8 months were collected:
Month Labor Cost Employee Hours
January $7,000 360
February 8,140 550
March 9,899 630
April 9,787 610
May 8,490 480
June 7,450 350
July 9,490 570
August 7,531 310
Pizza Vesuvio's controller wants to calculate the fixed and variable costs associated with labor used in the restaurant.
In your calculations, round the variable rate per employee hour to the nearest cent.
Required:
1. Using the high-low method, calculate the fixed cost of labor.$
2. Using the high-low method, calculate the variable rate.
$ per employee hour
3. Using the high-low method, construct the cost formula for total labor cost.
Total labor cost = $ + [$ × Employee hours]
Answer and Explanation:
1. The computation of fixed cost of labor is shown below:-
Fixed cost = High cost - (High labor hours × Variable cost per hour)
= $9,899 - (630 hours × $7.40)
= $9,899 - $4,622
= $5,237
2. The computation of variable rate is shown below:-
Variable cost = (High value - Low value) ÷ (High labor hours - Low labor hours)
= ($9,899 - $7,531) ÷ (630 - 310)
= $2,368 ÷ 320
= $7.40 per unit
3. The construction of formula for total labor cost is shown below:-
Total labor cost = $5,237.00 + $7.40 × Employee hours
A multiconcept restaurant incorporates two or more restaurants, typically chains, under one roof. Sharing facilities reduces costs of both real estate and labor. The multiconcept restaurants typically offer a limited menu compared to full-sized, stand-alone restaurants. For example, KMAC operates a combination Kentucky Fried Chicken (KFC)/Taco Bell restaurant. The food preparation areas are separate, but orders are taken at shared point-of-sale (POS) stations. If Taco Bell and KFC share facilities, they reduce fixed costs by 30 percent; however, sales in joint facilities are 20 percent lower than sales in two separate facilities. What do these numbers imply for the decision of when to open a shared facility versus two separate facilities
Answer: The Multiconcept restaurant is beneficial to both restaurant chains
Explanation:
If they share resources then they are saving 30% in fixed costs even though they are losing 20% in sales.
If the losses in sales are subtracted from the savings in fixed costs, it means that both Taco Bell and KFC are benefitting by 10%.
This shows that the decision to open a shared facility versus two separate facilities is beneficial to both restaurants on a net benefits basis as the savings in fixed costs from sharing facilities outweighs the losses in sales probably resulting from not offering a full menu.
Simmons Consulting Co. has the following accounts in ts ledger Cash: Accounts Receivable Supplies: Office Equipment Accounts Payable, Michael Short, Capital; Michael Short, Drawing Fees Eamed, Rent Expense; Advertising Expense: Utilities Expense; Miscellaneous Expense.
Transactions
Oct 1 Paid rent for the month, $4,800.
3 Paid advertising expense, $2,500.
5 Paid cash for supplies, $1,390
6 Purchased office equipment on account, $10,670
10 Received cash from customers on account, $19,730
15 Paid creditors on account, 59,480
27 Paid cash for miscellaneous expenses, S530.
30 Paid telephone bill (utility expense) for the month. $220.
31 Fees earned and billed to customers for the month, 538,620
31 Paid electricity bill (utility expense) for the month, S1540
31 Withdrew cash for personal use, 56,700.
Journalize the above selected transactions for October 20Y3 in a two-column journal. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
Answer:
Simmons Consulting Co
General Journal
Oct 1
Rent Expense $4,800 (debit)
Cash $4,800 (credit)
Paid Rent Expense
Oct 3
Advertising expense $2,500 (debit)
Cash $2,500 (credit)
Paid Advertising Expense
Oct 5
Supplies $1,390 (debit)
Cash $1,390 (credit)
Paid for Supplies
Oct 6
Office equipment $10,670 (debit)
Office Equipment Accounts Payable $10,670 (credit)
Bought Office equipment on credit
Oct 10
Accounts Receivable $19,730 (debit)
Cash $19,730 (credit)
Received payment from accounts
Oct 15
Cash $59,480 (debit)
Accounts Payable $59,480 (credit)
Made payment to Accounts Payable
Oct 27
Miscellaneous Expenses $530 (debit)
Cash $530 (credit)
Paid for Miscellaneous Expenses
Oct 30
Utilities expense $220 (debit)
Cash $220 (credit)
Paid for telephone bill
Oct 31
Cash $538,620 (debit)
Fees Earned $538,620 (credit)
Cash received for Fees Earned
Oct 31
Utilities expense $1,540 (debit)
Cash $1,540 (credit)
Paid for electricity bill
Oct 31
Drawings $56,700 (debit)
Cash $56,700(credit)
Cash drawings by owner
Explanation:
I have prepared the journals and their narrations, see the above.
Bratt's Bed and Breakfast, in a small historic New England town, must decide how to subdivide (remodel) the large old home that will become their inn. There are three alternatives: Option A would modernize all baths and combine rooms, leaving the inn with four suites, each suitable for two to four adults. Option B would modernize only the second floor; the results would be six suites, four for two to four adults, and two for two adults only. Option C (the status quo option) leaves all walls intact. In this case, there are eight rooms available, but only two are suitable for four adults, and four rooms will not have private baths. Below are the details of profit and demand patterns that will accompany each option. Which option has the highest expected value?Annual profit under various demand patterns Capacity p Average pA (Modernize all) $90,000 .5 $25,000 .5B (Modernize 2nd) $80,000 .4 $70,000 .6C (Status Quo) $60,000 .3 $55,000 .7
Answer:
Option B (Modernize 2nd) has the highest expected value which $74,000.
Explanation:
Note: The data in the question are merged together. They are therefore sorted before anwering the question as follows:
Annual profit under various demand patterns
Capacity p Average p
A (Modernize all) $90,000 .5 $25,000 .5
B (Modernize 2nd) $80,000 .4 $70,000 .6
C (Status Quo) $60,000 .3 $55,000 .7
The explanation to the answer is now provided as follows:
The expected value is estimated as the addition of the multiplication of each possible outcomes by the probability of occurrence of each outcome.
The expected value for each of the options in the question can therefore be estimated using the following formula:
Expected value = (Capacity * p of Capacity) + (Average * p of Average)
This formula is therefore applied to each options as follows:
Option A expected value = ($90,000 * 0.5) + ($25,000 * 0.5) = $45,000 + $12,500 = $57,500
Option B expected value = ($80,000 * 0.4) + ($70,000 * 0.6) = $32,000 + $42,000 = $74,000
Option C expected value = ($60,000 * 0.3) + ($55,000 * 0.7) = $18,000 + $38,500 = $56,500
Based on the calculations above, Option B (Modernize 2nd) has the highest expected value which $74,000.
In which country, China or India, would you expect to encounter the most bureaucracy? Why?
Discuss how a government might influence private producers.
Answer:
A government can influence through taxation, subsidies, regulations, building use, prohibitions, import quotas etc.
Explanation:
Answer:
Legislation and Regulation Another way in which the government can influence the private producers is, through rules and regulations. The economies usually operate with a huge and growing amount of regulations.
please mark me as brainliest
California Real Estate, Inc., expects to earn $85 million per year in perpetuity if it does not undertake any new projects. The firm has an opportunity that requires investing $18 million today and $7 million in one year. This new project will then generate annual profits of $11 million beginning at the end of year two and continuing in perpetuity. The firm has 20 million shares of common stock outstanding, and its required rate of return is 12%. Ignore taxes, depreciation, and other complications.
A. What is the price of a share of stock if the firm does not undertake the new investment?
B. What is the value of the investment?
C. What is the per-share stock price if the firm undertakes the investment?
Answer:
Kindly check explanation
Explanation:
Given the following :
Expected earning = $85,000,000 per year
Required rate of return on stock (r) = 12% = 0.12
Number of common stock shares outstanding = 20 million
A.) price of a share of stock if the form does not undertake new investment:
Cash value = $85,000,000 / 0.12
= $708333333.33
Price of share :
708333333.33 / 20,000,000
= $35.42
B.) calculate the NPV of growth opportunities :
Investment opportunity today (Co) = $18 milliom
Investment opportunity after a year (C1) = $7 million
Annual profit at the end of year 2 = $11 million
The net present value of growth opportunities :
Co + C1/(1+r) + (C2 / r) / (1 + r)
-18,000,000 - 7,000,000/1.12 + (11,000,000/0.12) / 1.12
= $57,595,238.09
C.) per share price if company undertakes investment :
(Net present value of growth opportunities / number of stocks outstanding)
= $57,595,238.09 / 20,000,000
= $2.88
Hence,
[Per share value of growth opportunities + per share value of car map y does not undertake new investment]
[$2.88 + $35.42]
= $38.30
Vista Vacuum Company has the following production information for the month of March. All materials are added at the beginning of the manufacturing process. Units Beginning inventory of 3,300 units that are 100 percent complete for materials and 30 percent complete for conversion. 15,100 units started during the period. Ending inventory of 3,300 units that are 11 percent complete for conversion. Manufacturing Costs Beginning inventory was $20,100 ($10,500 materials and $9,600 conversion costs). Costs added during the month were $30,400 for materials and $48,500 for conversion ($27,100 labor and $21,400 applied overhead). Assume the company uses Weighted-Average Method. Required: 1. Calculate the number of equivalent units of production for materials and conversion for March. 2. Calculate the cost per equivalent unit for materials and conversion for March. 3. Determine the costs to be assigned to the units transferred out and the units still in process.
Answer:
1. Calculate the number of equivalent units of production for materials and conversion for March.
EUP for materials:
units completed + ending WIP = 15,100 + 3,300 = 18,500
EUP for conversion costs:
units completed + ending WIP = 15,100 + (3,300 x 11%) = 15,136.3
2. Calculate the cost per equivalent unit for materials and conversion for March.
total cost of materials = $10,500 + $30,400 = $40,900
total conversion costs = $9,600 + $48,500 = $58,100
cost per EUP for materials = $40,900 / 18,500 = $2.2108 per EUP
cost per EUP for conversion costs = $58,100 / 15,136.3 = $3.8385 per EUP
3. Determine the costs to be assigned to the units transferred out and the units still in process.
cost of transferred out units = 15,100 x ($2.2108 + $3.8385) = $91,344.43
cost of WIP = ($40,900 + $58,100) - $91,344.43 = $7,655.57
Corentine Co. had $169,000 of accounts payable on September 30 and $141,000 on October 31. Total purchases on account during October were $298,000. Determine how much cash was paid on accounts payable during October. On September 30, Valerian Co. had a $111,000 balance in Accounts Receivable. During October, the company collected $111,390 from its credit customers. The October 31 balance in Accounts Receivable was $106,000. Determine the amount of sales on account that occurred in October. During October, Alameda Company had $119,500 of cash receipts and $120,150 of cash disbursements. The October 31 Cash balance was $27,100. Determine how much cash the company had at the close of business on September 30.
Answer and Explanation:
The computation is shown below:
a. For the cash paid
= Opening balance of account payable + total purchase - ending balance
= $169,000 + $298,000 - $141,000
= $326,000
b. The sale amount on account should be equivalent to the ending balance of account receivable i.e. $106,000
c. The beginning cash balance is
Closing cash balance = beginning cash balance + cash receipts - cash disbursements
$27,100 = Beginning cash balance + $119,500 - $120,150
So, the beginning cash balance is $27,750
Direct materials $ 69,000 Direct labor $ 35,000 Variable manufacturing overhead $ 15,000 Fixed manufacturing overhead 28,000 Total manufacturing overhead $ 43,000 Variable selling expense $ 12,000 Fixed selling expense 18,000 Total selling expense $ 30,000 Variable administrative expense $ 4,000 Fixed administrative expense 25,000 Total administrative expense $ 29,000 Required: 1. With respect to cost classifications for preparing financial statements: a. What is the total product cost
Answer: $147,000
Explanation:
Based on the information given in the question, the total product cost is calculated below:
Total product cost will be:
Direct materials: 69,000
Add: direct labor: 35,000
Add: total manufacturing overhead: 43,000
Total product cost:
= 69000 + 35000 + 43000
= $147,000
COST OF EQUITY WITH AND WITHOUT FLOTATION Jarett & Sons’s common stock currently trades at $30.00 a share. It is expected to pay an annual dividend of $1.00 a share at the end of the year (D1=$1.00) , and the constant growth rate is 4% a year. What is the company’s cost of common equity if all of its equity comes from retained earnings? ANSWER ↓ If the company issued new stock, it would incur a 10% flotation cost. What would be the cost of equity from new stock?
Answer:
7.33%7.71%Explanation:
1. If the company's cost of equity is;
= (Next divided/ Share price) + Dividend growth rate
= 1/30 + 4%
= 3.33% + 4%
= 7.33%
2. With the floatation costs involved, the Cost of Equity will increase as the floatation costs will increase the cost required to get equity.
= [(Next divided/ Share price - flotation costs)] + Dividend growth rate
Floatation costs = 10% * 30
= $3
= [1/30 - 3)] + 4%
= 1/27 + 4%
= 7.71%
You are the CEO of a Fortune 500 company. You are currently being sued by 5 female employees who are claiming gender discrimination in hiring and pay for the females at your company. Two of the females are also claiming they were sexually harassed by their supervisors. After extensive investigation, you have determined that the claims by the females employees are (for the most part) unfounded. You are sitting in your attorney's office trying to decide if you should settle with the employees or continue fighting the accusations.
Answer the following questions:a) List the factors you should consider as you make a decision to litigate.b) List concerns you would have as an employer litigating a sexual harassment case.c) What is your decision? Why?
Answer with Explanation:
Part A. I would like to consult my attorney and will provide him following information:
Hiring Policies of Company that tends to avoid gender discrimination by following these policies.I will show them Human Resource Workings that clearly show why a candidate was preferred over other employees. The criteria set by the company and their relevance and where did the other candidates lacked.I will also show them audited remunerations for the year and the opinion of auditors which will justify that the company is not paying different salaries or wages to people of same designation and is not involved in pay discrimination.Will also provide the attorney with company policies regarding the sexual harassment at work and controls implemented to prevent such things in the work environment.Interact with the supervisors to know why the females were of the opinion that they were sexually harassed to know whether or not they were sexually harassing females.Part B. Following are the concerns as a part of an organization that is litigating sexual harassment case will ruin their reputation in the market. This will defame the company as the people will question the company's work environment. The most important thing is that the company must strictly adhere to sexual harassment and gender discrimination policies to prevent such litigation and loss of reputation.
Part C. The posh committee investigation would be relied on which would decide whether we must settle the dispute out of court or in the court. The investigation report can be used in the court as a supporting.
The possible action in the company can be suspension of the accused person or transferring them in an area where they will supervise male juniors till the settlement of the case. And if it is proven that the supervisor was involved in harassing the females then we will fire them from the company.
How might a person’s place in the life cycle influence investment decisions?
Answer:
Student responses will vary, but should include: A young investor has years of earning power and can take greater risks because he/she has time to make-up for losses. An older investor needs more security and current income from their investments because they are using it to retire on or they need it to continually grow so that they can retire.
Explanation:
FreshProduce is a family-owned grocery store that sells organic and locally grown food and fresh produce. There is only one check-out station with one cashier. It takes the cashier on average 5 minutes to check out a customer. The standard deviation of the check-out time is also 5 minutes. On average, there are 6 customers per hour. The standard deviation of the inter-arrival time is 10 minutes. What is the utilization of the process? Group of answer choices 25% 50% 75% 100%
Answer:
50%
Explanation:
The time taking to check a customer is 5 minutes, hence the processing time is 5 minutes.
There are 6 customers per hour that is 1 customer per 10 minutes, therefore the inter arrival time is 10 minutes.
The utilization is the ratio of the processing time to the arrival time, it is given by the formula:
Utilization = Processing time / inter arrival time
Utilization = 5 minutes / 10 minutes = 0.5
Utilization = 50%
Mr. Smith would like to run for a Senate seat in Massachusetts. He is 49 years old and has been a citizen of the United States all his life. He lives in New York and is registered to vote in that state. He owns a house in Massachusetts and visits there occasionally. His business is in Albany, New York. Can Mr. Smith run for the Massachusetts Senate seat? Why or why not?
Answer: No. Mr. Smith cannot run for the Massachusetts Senate seat
Explanation:
From the question, we are informed that Mr. Smith is 49 years old, a United States citizen and that he would like to run for a Senate seat in Massachusetts. He lives in New York and is registered to vote in that state.
It should be noted that Mr Smith isn't a resident of Massachusetts and therefore, he cannot run for Senator as he's not registered there but rather he registered in New York. Assuming he registered in New York, then he can be a senator there but he isn't registered there, therefore he can't.
All of the following expenses paid or incurred in the course of operating a business are deductible as business expenses except:________.
a. Political contributions.
b. Costs incurred by a public utility company in connection with an appearance at a public utility commission rate making hearing.
c. Reimbursements to job applicants in connection with interviews.
d. Penalty for nonperformance of a contract.
Answer: Political contributions
Explanation:
The expenses which are vital in running a business are deductible and examples of these are utility costs, legal services, salaries, office rent, equipment and supplies, utility costs, professional dues, etc.
Of the options given in the question, political contribution are not paid or incurred while running a business. Under Section 162(e), the political contributions are not deductible.
You wish to retire in 14 years, at which time you want to have accumulated enough money to receive an annual annuity of $17,000 for 19 years after retirement. During the period before retirement you can earn 8 percent annually, while after retirement you can earn 10 percent on your money. What annual contributions to the retirement fund will allow you to receive the $17,000 annuity? Use Appendix C and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods.
Answer:
Annual contribution = $5873.06
Explanation:
First we will find the present value at the time of retirement and then we will find the annual contribution during the years of working. Below is the calculation to find the present value
Present value at the time of retirement = Annuity (P/A, r, n)
Present value at the time of retirement = $17000 (P/A, 10%, 19)
Present value at the time of retirement = $17000 (8.365)
Present value at the time of retirement = $142205
Now find the annual contribution:
Annual contribution = Future value (A/F, r, n)
Annual contribution = 142205 (A/F, 8%, 14)
Annual contribution = 142205(0.0413)
Annual contribution = $5873.06
The cases filed at The Cross Company related to gender discrimination include one in which a 33-year-old sales representative was not selected for a promotion in spite of receiving excellent performance evaluations each year. She has worked for the company for more than 8 years while Jim, a 26-year-old, was selected for the position although he has only served The Cross Company for 18 months. Which of the following laws may apply to this case?a) Age Discrimination Actb) The Equity Actc) Title VII of CRAd) ADAAAe) Rehabilitation Act
Answer:
Title VII of the CRA
Explanation:
Title VII of the Civil Rights Act (CRA) is a landmark federal law that aims to protect employees against discrimination based on race, colour, sex, nation of origin, or religion.
The act was made law in 1964.
In the given scenario a female sales representative with excellent performance review was not promoted for 8 years, while Jim a male sales representative was promoted in just 18 months.
This is a gender based discrimination and is covered by Title VII of the CRA.
Age discrimination does not apply because it addresses discrimination of employees with minimum age of 40 years.
Equity act requires that employees on the same job role are compensated equally. This does not also apply.
Rehabilitation act prevents discrimination based on disability. This does not also apply
D’Lite Dry Cleaners is owned and operated by Joel Palk. A building and equipment are currently being rented, pending expansion to new facilities. The actual work of dry cleaning is done by another company at wholesale rates. The assets and the liabilities of the business on July 1, 2014, are as follows: Cash, $45,000; Accounts Receivable, $93,000; Supplies, $7,000; Land, $75,000; Accounts Payable, $40,000. Business transactions during July are summarized as follows:a. Joel Palk invested additional cash in the business with a deposit of $35,000 in the business bank account.b. Paid $50,000 for the purchase of land adjacent to land currently owned by D’Lite Dry Cleaners as a future building site.c. Received cash from cash customers for dry cleaning revenue, $32,125.d. Paid rent for the month, $6,000.e. Purchased supplies on account, $2,500.f. Paid creditors on account, $22,800.g. Charged customers for dry cleaning revenue on account, $84,750.h. Received monthly invoice for dry cleaning expense for July (to be paid on August 10), $29,500.i. Paid the following: wages expense, $7,500; truck expense, $2,500; utilities expense, $1,300; miscellaneous expense, $2,700.j. Received cash from customers on account, $88,000.k. Determined that the cost of supplies on hand was $5,900; therefore, the cost of supplies used during the month was $3,600.l. Withdrew $12,000 cash for personal use.Instructions1. Determine the amount of Joel Palk’s capital as of July 1 of the current year.2. State the assets, liabilities, and owner’s equity as of July 1 in equation form similar to that shown in this chapter. In tabular form below the equation, indicate increases and decreases resulting from each transaction and the new balances after each transaction.3. Prepare an income statement for July, a statement of owner’s equity for July, and a balance sheet as of July 31.4. (Optional). Prepare a statement of cash flows for July.
Answer:
1) equity = assets - liabilities
equity = $45,000 + $93,000 + $7,000 + $75,000 - $40,000 = $180,000
2) Since there is not enough room here, I used an excel spreadsheet to prepare the accounting equation.
3) D’Lite Dry Cleaners
Income Statement
For the month ended July 31, 202x
Revenues $116,875
Expenses:
Dry cleaning expense $29,500Rent expense $6,000Wages expense $7,500Truck expense $2,500Supplies expense $3,600Utilities expense $1,300Miscellaneous expense $2,700 ($53,100)Net income $63,775
D’Lite Dry Cleaners
Balance Sheet
For the month ended July 31, 202x
Assets:
Cash $95,325
Accounts receivable $89,750
Supplies $5,900
Land $125,000
Total assets $315,975
Liabilities:
Accounts payable $49,200
Equity:
Capital $266,775
Total liabilities and equity $315,975
D’Lite Dry Cleaners
Statement of Owner’s Equity
For the month ended July 31, 202x
Palk, Joel, capital, beginning balance $180,000
Additional capital raised $35,000
net income $63,775
subtotal $278,775
drawings ($12,000)
Palk, Joel, capital, ending balance $266,775
