False, SHOULD INCREASE after-tax real interest rates.
Assume the following data for Oshkosh Company before its year-end adjustments:
Unadjusted Balances
Debit Credit
Sales $51,600,000
Cost of Merchandise Sold $31,750,000
Estimated Returns Inventory 28,100
Customer Refunds Payable 115,400
Estimated cost of merchandise that will be returned in the next year $400,000
Estimated percent of refunds for current year sales 1.2%
Journalize the adjusting entries for the following:
(a) Estimated customer refunds and allowances.*
(b) Estimated customer returns.*
Refer to the Chart of Accounts for exact wording of account titles.*
CHART OF ACCOUNTS
Oshkosh Company
General Ledger
ASSETS
110 Cash
120 Accounts Receivable
125 Notes Receivable
130 Merchandise Inventory
131 Estimated Returns Inventory
140 Office Supplies
141 Store Supplies
142 Prepaid Insurance
180 Land
192 Store Equipment
193 Accumulated Depreciation-Store Equipment
194 Office Equipment
195 Accumulated Depreciation-Office Equipment
LIABILITIES
210 Accounts Payable
216 Salaries Payable
218 Sales Tax Payable
219 Customers Refunds Payable
220 Unearned Rent
221 Notes Payable
EQUITY
310 Owner, Capital
311 Owner, Drawing
312 Income Summary
REVENUE
410 Sales
610 Rent Revenue
EXPENSES
510 Cost of Merchandise Sold
521 Delivery Expense
522 Advertising Expense
524 Depreciation Expense-Store Equipment
525 Depreciation Expense-Office Equipment
526 Salaries Expense
531 Rent Expense
533 Insurance Expense
534 Store Supplies Expense
535 Office Supplies Expense
536 Credit Card Expense
539 Miscellaneous Expense
710
Interest Expense
Journalize the adjusting entries for the following: (a) Estimated customer refunds and allowances. (b) Estimated customer returns. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 10
JOURNAL
ACCOUNTING EQUATION
DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY
1
Adjusting Entries
2
3
4
5
Answer:
a. Dr Sales $619,200
Cr Customer Refunds Payable $619,200
b. Dr Estimated Returns Inventory $400,000
Cr Cost of Merchandise Sold $400,000
Explanation:
a. Preparation of the journal entry to record Estimated customer refunds and allowances
Dr Sales $619,200
($51,600,000 × 1.2%)
Cr Customer Refunds Payable $619,200
(To record Estimated customer refunds and allowances )
b. Preparation of the journal entry to Estimated customer returns
Dr Estimated Returns Inventory $400,000
Cr Cost of Merchandise Sold $400,000
(To record Estimated customer returns)
DonCo. Inc. sold merchandise on January 14, and accepted a 90 day, 5% promissory note in the amount of $5,000. On January 14, the entry to record this transaction would include a debit to:
a. Cash in the amount of $5,000
b. Notes Receivable in the amount of $5,000
c. Accounts Receivable in the amount of $5,000
d. Sales in the amount of $5,000
The ROI on sustainability efforts can be difficult to quantify because a. the payback period is on the same time frame. b. the payback period is on a different time frame. c. benefits from such projects are tangible. d. an excess of necessary data for accurate calculation is readily available.
Answer:
B)the payback period is on a different time frame.
Explanation:
Return on sustainability investment can be regarded as performance measure that is been utilized in evaluation of the gains which is produced due to result of corporate sustainability initiatives as regards amount of money that is invested in those initiatives.
Sustainable return on investment can be regarded as methodology used in identification as well as quantifying of environmental and societal, impacts of investment as regards a projects and initiatives.
It should be noted that The ROI on sustainability efforts can be difficult to quantify because the payback period is on a different time frame.
The recording, summarizing, and reporting of the economic activities and events of an organization is known as _____.
MC Qu. 87 Riemer, Inc. has four... Riemer, Inc. has four departments. Information about these departments is listed below. Maintenance is a service department. If allocated maintenance cost is based on floor space occupied by each of the other departments, compute the amount of maintenance cost allocated to the Cutting Department. (Do not round your intermediate computations.) Maintenance Cutting Assembly Packaging Direct costs$18,000 $24,000 $64,000 $39,000 Sq. ft. of space 750 1,250 2,250 2,500 No. of employees 7 3 7 7
Vaughn Manufacturing reported net income of $185,060 for 2022. Vaughn Manufacturing also reported depreciation expense of $33,860 and a loss of $4,930 on the disposal of plant assets. The comparative balance sheets show an increase in accounts receivable of $16,140 for the year, a $15,330 increase in accounts payable, and a $4,310 increase in prepaid expenses. Prepare the operating activities section of the statement of cash flows for 2022. Use the indirect method
Answer:
Explanation;i dont know but this answer is wrong
The following data are accumulated by Zadok Company in evaluating the purchase of
$370,000 of equipment, having a four-year useful life:
Net Income Net Cash Flow
Year 1 $67,500 $160,000
Year 2 47,500 140,000
Year 3 (12,500) 80,000
Year 4 (12,500) 80,000
a. Assuming that the desired rate of return is 12%, determine the net present value for the
proposal.
b. Would management be likely to look with favor on the proposal? Explain.
Answer:
$-7,751.85
The management is not likely to look with favour on the proposal because the NPV is negative. This means that the cost of the project exceeds the present value of cash flows. The project is not profitable.
Explanation:
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
Only projects with a positive NPV should be accepted. A project with a negative NPV should not be chosen because it isn't profitable.
Cash flow in year 0 = $-370,000
Cash flow in year 1 = $160,000
Cash flow in year 2 = $140,000
Cash flow in year 3 = $80,000
Cash flow in year 4 = $80,000
I = 12%
NPV = $-7,751.85
The management is not likely to look with favour on the proposal because the NPV is negative. This means that the cost of the project exceeds the present value of cash flows. The project is not profitable.
To determine NPV using a financial calculator take the following steps:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $219,400 $585,000 Variable costs 88,000 351,000 Contribution margin $131,400 $234,000 Fixed costs 58,400 39,000 Income from operations $73,000 $195,000
a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. fill in the blank 1 Bryant Inc. fill in the blank 2
b. How much would income from operations increase for each company if the sales of each increased by 15%? If required, round answers to nearest whole number. Dollars Percentage Beck Inc. $fill in the blank 3 fill in the blank 4 % Bryant Inc. $fill in the blank 5 fill in the blank 6 %
c. The difference in the of income from operations is due to the difference in the operating leverages. Beck Inc.'s operating leverage means that its fixed costs are a percentage of contribution margin than are Bryant Inc.'s.
Answer:
Beck Inc. and Bryant Inc.
Beck Inc. Bryant Inc.
a. Operating leverage 0.4 0.1
b. Increase in income $19,710 (27%) $35,100 (18%)
c. The difference in the INCREASE of income from operations is due to the difference in the operating leverages. Beck Inc.'s HIGHER operating leverage means that its fixed costs are a HIGHER percentage of contribution margin than are Bryant Inc.'s.
Explanation:
a) Data and Calculations:
Beck Inc. Bryant Inc.
Sales $219,400 $585,000
Variable costs 88,000 351,000
Contribution margin $131,400 $234,000
Fixed costs 58,400 39,000
Income from operations $73,000 $195,000
Total costs $146,400 $390,000
Operating leverage 1.8 1.2
Operating leverage = Contribution Margin/Income from operations
Increase in Sales by 15%
Beck Inc. Bryant Inc.
Sales $252,310 $672,750
Variable costs 101,200 403,650
Contribution margin $151,110 $269,100
Fixed costs 58,400 39,000
Income from operations $92,710 $230,100
Increase in income $19,710 (27%) $35,100 18%
At the end of the closing process, Income Summary will hold a balance.
a) True
b) False
Answer:
False. Have a Good day I hope this helps
Explanation:
There is no relationship between the level of education received and lifetime earnings.
Answer: False
Explanation:
There is a relationship between the level of education that a person receives and the lifetime earnings. It should be noted that the more education that a person receives, the higher the lifetime earnings of such person will be.
For example, someone who has a doctorate degree is expected to have a higher lifetime earnings than someone who has a high school degree.
Therefore, based on the explanation given, the statement is false.
Lopez Company is considering replacing one of its old manufacturing machines. The old machine has a book value of $49,000 and a remaining useful life of five years. It can be sold now for $59,000. Variable manufacturing costs are $42,000 per year for this old machine. Information on two alternative replacement machines follows. The expected useful life of each replacement machine is five years. Machine A Machine B Purchase price $ 116,000 $ 129,000 Variable manufacturing costs per year 19,000 13,000 (a) Compute the income increase or decrease from replacing the old machine with Machine A. (b) Compute the income increase or decrease from replacing the old machine with Machine B. (c) Should Lopez keep or replace its old machine
a. The income increase or decrease from replacing the old machine with Machine A is $58,000.
b. The income increase or decrease from replacing the old machine with Machine B is $75,000.
c. Lopez company should choose "Alternative B" Machine.
a. Alternative A
Increase or decrease in net income - Lopez Company
Cost to buy new machine -$116,000
Cash received to trade in old machine $59,000
Reduction in variable manufacturing cost $115,000
[($42,000- $19,000)×5]
Total change in net income $58,000
b. Alternative B
Increase or decrease in net income - Lopez Company
Cost to buy new machine -$129,000
Cash received to trade in old machine $59,000
Reduction in variable manufacturing cost $145,000
[($42,000- $13,000)×5]
Total change in net income $75,000
c. Lopez company should choose "Alternative B" Machine.
Inconclusion te income increase or decrease from replacing the old machine with Machine A is $58,000 and Machine B is $75,000.
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A retail store had sales of $44,900 in April and $55,000 in May. The store employs eight full-time workers who work a 40-hour week. In April the store also had eight part-time workers at 12 hours per week, and in May the store had eleven part-timers at 17 hours per week (assume four weeks in each month). Using sales dollars as the measure of output, what is the percentage change in productivity (dollars output per labor hour) from April to May
Answer:
0.52%
Explanation:
Productivity in April = $44,900 / (((8*40) + (8*12)) * 4)
Productivity in April = $44,900 / ((320 + 96) * 4)
Productivity in April = $44,900 / (416 * 4)
Productivity in April = $44,900 / 1664 hours
Productivity in April = $26.98 per hour
Productivity in May = $55,000 / (((8*40) + (11*17)) * 4)
Productivity in May = $55,000 / ((320 + 187) * 4)
Productivity in May = $55,000 / (507 * 4)
Productivity in May = $55,000 / 2028 hours
Productivity in May = $27.12 per hour
% increase in productivity per hour = ($27.12 - $26.98) / $26.98
% increase in productivity per hour = $0.14 / $26.98
% increase in productivity per hour = 0.0052
% increase in productivity per hour = 0.52%
In 2019, Krista paid $1,600 in qualified adoption expenses to adopt a U.S. child. The adoption was not finalized, and in 2020, she paid an additional $2,500 in qualified adoption expenses. The adoption failed again in 2020 and never became final. What is the maximum amount Krista may be eligible to claim for the Adoption Credit on her 2020 return
Considering the available options, the maximum amount Krista may be eligible to claim for the Adoption Credit on her 2020 return is "$4,100."
Adoption Credit InformationBased on the rules and regulations made by the government, if an individual made more than one attempt to adopt one eligible U.S. child, such individual should add the amounts spent and complete only the “Child 1” line.
However, it is allowed to complete more than Child 1 line when individuals adopt or tried to adopt two or three eligible children.
This implies that Krista would have to add the expenses together, which is $1,600 + $2,500 = $4,100.
Hence, in this case, it is concluded that the correct answer is "$4,100."
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How should Sophia advise her senator? Why?
Answer:
Explanation:
A Promotion
Bramble Corp.’s cost of goods sold is $280000 variable and $170000 fixed. The company’s selling and administrative expenses are $160000 variable and $220000 fixed. If the company’s sales is $1080000, what is its net income?
Answer:
the net income is $250,000
Explanation:
The computation of the net income is given below:
= Sales - variable cost of goods sold - fixed cost of goods sold - variable selling & admin expense - fixed selling & admin expense
= $1,080,000 - $280,000 - $170,000 - $160,000 - $220,000
= $250,000
Hence, the net income is $250,000
The above formula should be applied for the same
Suppose savers either buy bonds or make deposits in savings accounts at banks. Initially, the interest income earned on bonds or deposits is taxed at a rate of 20%. Now suppose there is an increase in the tax rate on interest income, from 20% to 25%.
Shift the appropriate curve on the graph to reflect this change.
This change in the tax treatment of interest income from saving causes the equilibrium interest rate in the market for loanable funds to and the level of investment spending to ______.
Answer:
실례합니다? 당신은 이것을 의미합니까?
Explanation:
저축자들이 채권을 사거나 은행의 예금 계좌에 예금한다고 가정해 봅시다. 처음에는 채권이나 예금으로 얻은 이자 소득에 20%의 세율이 적용됩니다. 이제 이자 소득에 대한 세율이 20%에서 25%로 인상되었다고 가정합니다. 이 변경 사항을 반영하려면 그래프에서 적절한 곡선을 이동하십시오. 저축으로 인한 이자 소득에 대한 세금 처리의 이러한 변화는 대부자금 시장의 균형 이자율과 투자 지출 수준을 ______로 만듭니다. ?
Hayleah is a california cpa practicing in california. to renew her license in active status, hayleah must to meet the basic requirement of completing 80 hours of qualifying continuing professional education in the two-year period immediately preceding her license expiration. Her license expires on june 30, 20x7. Which of the following are specific requirements regarding continuing education that hayleah may or may not be covered by depending on the type of work that she performs?
A) Fraud continuing education requirement
B) Government auditing continuing education requirement
C) Accounting and auditing continuing education requirement
D) Hayleah may take all of her 80 hour requirement in any subjects that she chooses.
E) All of the above.Hayleah may take all of her 80 hour requirement in any subjects that she chooses
When performing work, there are specific requirements depending on which work Hayleah performs and these are B) Government auditing continuing education requirement
When dealing with governmental accounting:
There are certain rules that must be followed.The specific rules imposed are to ensure better management of tax payer funds.As a result, when a California CPA is involved in governmental work, specific rules known as the government auditing continuing education requirements will most likely apply.
In conclusion, option B is correct.
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Sunland Inc., a real estate developing company, was accounting for its long-term contracts using the completed contract method prior to 2021. In 2021, it changed to the percentage-of-completion method. The company decided to use the same for income tax purposes. The tax rate enacted is 40%. Income before taxes under both the methods for the past three years appears below.
2019 2020 2021
Completed contract $480000 $318000 $156000
Percentage-of-completion 780000 399000 300000
Which of the following will be included in the journal entry made by Sunland to record the income effect?
a. A debit to Retained Earnings for $239400.
b. A credit to Retained Earnings for $228600.
c. A credit to Retained Earnings for $158400.
d. A debit to Retained Earnings for $158400.
From the computation done, there'll be a debit to retained earnings for 239400.
The retained earnings will be:
= percentage of completion (1 - Tax rate)
Based on the values we've, this will be:
Retained Earnings = 399000 (1 - 40%)
Retained Earnings = = 399000 × 0.6
Retained Earnings = 239400
Therefore, there'll be a debit to retained earnings for 239400.
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In each diary kept by the owner/engineer's or contractor's personnel, entries should be made: A. to document every working day, whether any work is performed or not, or even if you did not go to the project site that day. B. only if something of particular importance is happening. C. regularly each time that you visit a site where work is being done; however, no entry need be made unless you were personally at the site and witnessed work being performed. D. A diary is neither necessary nor desirable on construction.
According to the construction management principle, in each diary kept by the owner/engineer's or contractor's personnel, entries should be made "to document every working day, whether any work is performed or not, or even if you did not go to the project site that day."
Purpose of Site Diary in Construction ManagementA Site Diary in Construction management is a record book written to document the daily activity of the construction site.
A well-written site dairy is expected to show all the delivered or missing services and materials during the construction projects.
Hence, in this case, it is concluded that the correct answer is option A.
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Garcia Co. issued bonds with detachable common stock warrants. Only the warrants had a known market value. Cash proceeds exceed the sum of the fair value of the warrants and the face amount of the bonds. This excess is reported as:
Answer:
Discount on bond payable
Explanation:
since in the question it is mentioned that the company has issued the common stock warrants also the cash proceeds is more than the sum of the fair value + face value
So we presume that the bond are to be sold at the discount
Therefore the excess should be reported as the discount on bond payable
In a job order costing system: Select one: A. Each department accumulates costs and then allocates them to all units produced. B. The processes involved in manufacturing products are essentially identical for all products. C. Production generally happens in a "continual flow". D. The end products are relatively homogenous. E. None of the above
Answer:
The correct answer is the option E: None of the above.
Explanation:
To begin with, in the field of business management and accounting the concept known as "Job Order Costing" refers specifically to the system that the managers of a company use in order to establish a better organization when it comes to terms of costing and due to the fact that they tend to be organizations that elaborate products that differ from each other regarding the materials they need to be produced properly. So therefore that this method focuses in the fact the company needs to calculate every cost the best possible for every different product that needs different tasks and jobs.
PLEASE HELP
Assuming all other factors are the same, which statement about the cost of
loans is correct?
A. A loan with simple interest will cost more than a loan with
compound interest.
B. A loan with simple interest and a loan with compound interest will
cost the same.
C. Interest compounded daily will cost more than interest
compounded monthly.
D. Interest compounded annually will cost more than interest
compounded quarterly.
SUBMIT
Answer:
=> C. Interest compounded daily will cost more than interest compounded monthly.The proper answer is Daily interest compounding is more expensive than monthly interest compounding. So, the best choice is (C).
What is interest?In the fields of finance and economics, interest is the payment made at a set rate by a borrower or deposit-taking financial institution to a lender or depositor in excess of the principal amount (the amount borrowed).
It is not the same as a fee that the borrower might pay to the lender or another entity. It also differs from a dividend, which is money given to shareholders (owners) by a company from its profit or reserve, but not at a set rate predetermined in advance, but rather on a pro rata basis as a share of the reward received by risk-taking businesspeople when revenue is earned that exceeds all costs.
Hence, option (C) is accurate.
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True or False: The cost per exposure of most online advertising channels is difficult to account for.
Answer:
True, I just think this is a true thing due to exposure and costs of ads. And how many businesses go outta business.
"The cost per exposure of most online advertising channels is difficult to account for" is a correct statement. Thus, the statement is true.
What is advertising channels?An advertising channel is any avenue through which a corporation advertises its products and services or informs the public about a campaign. With the introduction of internet technologies to supplement conventional media advertising, the number of channels accessible to marketers has increased dramatically.
Most online advertising channels have a tough cost per exposure to account for since paper ads do not reach individuals who stay at home, but online ads are everywhere on the internet, so if the individual have a cellphone, they will see it. It is also less expensive because on paper more supplies are required, however online you simply need to understand how to program.
Therefore, it can be concluded that the above statement is true.
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Thaddeus is eighty-two years old and lives by himself in his rent-stabilized apartment. He is on a fixed income and has no family. He purchased a set of premium cast-iron cooking pots after meeting Henry, a salesperson, at the supermarket. Thaddeus signed the contract in the coffee shop next door after the two men left the supermarket. The cooking pot set cost $2,400 and is payable in 24 equal monthly installments. The same set retails for $1,000 elsewhere. The next day, Thaddeus decides that he cannot afford the cooking pot set.
a. The circumstances surrounding the transaction would be considered by the court, including the bargaining power of the parties.
b. The doctrine of unconscionability would probably allow Thaddeus to be released from his obligation.
c. The contract unreasonably favors Henry.
d. All of the above.
The doctrine of unconscionability would probably allow Thaddeus to be released from his obligation. Option (b) is correct.
What do you mean by Transaction?An executed contract between a buyer and a seller to trade goods, services, or financial assets in exchange for money is known as a transaction. The phrase is also frequently used in business accounting.
The exploitation component—where the stronger party takes use of the weaker party's weakness with real or constructive awareness of that weakness—is the foundation of the notion of unconscionability.
Exculpatory clauses and disclaimers / restrictions of warranty responsibility are two common categories of possibly unconscionable clauses. Exculpatory clauses absolve a party from responsibility for harms that they inflict.
Therefore, Option (b) is correct. The doctrine of unconscionability would probably allow Thaddeus to be released from his obligation.
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Debentures are paid back only when the company goes into liquidation
Answer:
true
Explanation:
because hes force for paiying beacause
because the company goes to liquidation
The management of Tony Corporation is considering the purchase of a new machine costing $400,000. No residual value is expected. The company's desired rate of return is 10%. The present value factors for $1 at compound interest of 10% for 1 through 5 years are 0.909, 0.826, 0.751, 0.683, and 0.621, respectively. In addition to the foregoing information the following data is available. Year Income from Operations Net Cash Flow 1 $100,000 $180,000 2 40,000 120,000 3 20,000 100,000 4 10,000 53,000 5 10,000 71,000 The net present value for this investment is: Group of answer choices positive $55,200 positive $18,130 Negative $126,810 Negative $99,630
Answer:
positive $18,130
Explanation:
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
Cash flow in Year 0 = $-400,000
Cash flow in Year 1 = $180,000
Cash flow in 2 = 120,000
Cash flow in 3= 100,000
Cash flow in 4 = 53,000
Cash flow in 5 = 71,000
I = 10%
NPV = $18,130
To determine the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
A lessor enters a sales-type lease with an unguaranteed residual. The lessor will record:____.
a. A credit to sales revenue for the fair value of the asset less the gross amount of the unguaranteed residual value.
b. A debit to lease receivable for the gross amount less the present value of the unguaranteed residual value.
c. A credit to sales revenue for the fair value of the asset.
d. A credit to sales revenue for the fair value of the asset less the present value of the unguaranteed residual value.
Answer:
b
Explanation:
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two special courses suggested for the career and has offered reasons for their placement Agriculture, Food & Natural Resources.two special courses suggested for the career and has offered reasons for their placement Agriculture, Food & Natural Resources.
Answer:
The Bachelor of Science Degree in Agriculture, Food and Natural Resources Education is designed to prepare students for careers as school-based agriculture, food and natural resources teachers at the secondary-level, careers in agricultural and natural resource education fields, or for professional or graduate studies.
Requirements for the Bachelor of Science Degree in Agriculture, Food and Natural Resources Education
The University requirements for bachelor’s degrees as described in the Undergraduate Education section of this catalog; 120 credits, including general elective credits, are required for the Bachelor of Science degree in Agriculture, Food and Natural Resources Education.
The University’s Tier II writing requirement for the Agriculture, Food and Natural Resources major is met by completing Community Sustainability 301. That course is referenced in item 3. below.
Students who are enrolled in the Agriculture, Food, and Natural Resources Education major leading to the Bachelor of Science degree in the Department of Community Sustainability may complete an alternative track to Integrative Studies in Biological and Physical Sciences that consists of the following courses: Biological Science 162 and 172, and Chemistry 141. The completion of Biological Science 172 satisfies the laboratory requirement. Biological Science 162 and 172, and Chemistry 141 may be counted toward both the alternative track and the requirements for the major referenced in item 3.
Explanation:
As a Paralegal, you have been asked to prepare a contract for your client based upon the following: Client: Tire Manufacturer, FT. Wayne, Indiana. The client is contracting to provide 15,000 tires per month to Car Assembly Plant in Louisville, Kentucky for the next 3 years. The price agreed upon is $30 per tire. The tires must be all-weather with a 60,000-mile warranty. It will be a destination contract. The car Assembly Plant is insistent that the tires be delivered in a manner so that there is always only a two-day supply stored at the Car Assembly Plant. The plant does not have enough room to store any additional tires. They would like there to be a penalty if the Tire Manufacturer brings too many. Your client is concerned about this provision as the number of cars manufactured each day varies. Car Assembly Plant is also concerned that the tire supply is never delayed because Car Assembly Plant has to pay the assembly workers if the assembly line stops because there are no tires. Car Assembly Plant wants Tire Manufacturer to pay for any downtime expenses due to lack of tires. Your Client would like there to be an Arbitration clause and that Indiana is the state to resolve issues. Additionally, there should be a Liquidation clause and a non-disclosure clause. Prepare a contract for your client. Attach the completed contract.
The question is about a contract between the Car assembly plant and tire manufacturer.
Supply Agreement is effective {date} between
Tire Manufacturer, FT. Wayne, Indiana. {the supplier}
and Car Assembly Plant in Louisville, Kentucky. {the purchaser}
Whereas Tire Manufacturer will supply Car Assembly Plant with 15,000 tires per month at a fixed rate of USD 30/- per tire for the next 3 years. The tire will be all-weather and a warranty of 60,000 mile is agreed.
The supply of the tire will be delivered by the Tire Manufacturer according to the daily needs of Car Assembly, the number of tires to be delivered will be communicated five days earlier and the tires should arrive at Car Assembly with in three days, failure to do so will result in a penalty. If the number of tire delivered are more than the number of tires ordered will result in penalty.
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Bill Johnson, sales manager, and Diane Buswell, controller, at Current Designs are beginning to analyze the cost considerations for one of the composite models of the kayak division. They have provided the following production and operational costs necessary to produce one composite kayak.
Kevlar $250 per kayak
Resin and supplies $100 per kayak
Finishing kit (seat, rudder, ropes, etc.) $170 per kayak
Labor $420 per kayak
Selling and administrative expenses—variable $400 per kayak
Selling and administrative expenses—fixed $119,700 per year
Manufacturing overhead—fixed $240,000 per year
Bill and Diane have asked you to provide a cost-volume-profit analysis, to help them finalize the budget projections for the upcoming year. Bill has informed you that the selling price of the composite kayak will be $2,000.
(a) Calculate variable costs per unit.
Variable cost per unit $
Bill Johnson, sales manager, and Diane Buswell, co
(b) Determine the contribution margin per unit.
Contribution margin per unit $
Bill Johnson, sales manager, and Diane Buswell, co
(c) Using the contribution margin per unit, determine the break-even point in units for this product line.
Break-even point
Bill Johnson, sales manager, and Diane Buswell, co
units
(d) Assume that Current Designs plans to earn $270,600 on this product line. Using the contribution margin per unit, calculate the number of units that need to be sold to achieve this goal.
Number of units
Bill Johnson, sales manager, and Diane Buswell, co
units
(e) Based on the most recent sales forecast, Current Designs plans to sell 1,000 units of this model. Using your results from part (c), calculate the margin of safety and the margin of safety ratio. (Round margin of safety ratio to 1 decimal place, e.g. 25.5%.)
Margin of safety $
Bill Johnson, sales manager, and Diane Buswell, co
Margin of safety ratio
Bill Johnson, sales manager, and Diane Buswell, co
%
By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor.
(a) Calculate variable costs per unit.
Variable cost per unit $
Bill Johnson, sales manager, and Diane Buswell, co
(b) Determine the contribution margin per unit.
Contribution margin per unit $
Bill Johnson, sales manager, and Diane Buswell, co
(c) Using the contribution margin per unit, determine the break-even point in units for this product line.
Break-even point
Bill Johnson, sales manager, and Diane Buswell, co
units
(d) Assume that Current Designs plans to earn $270,600 on this product line. Using the contribution margin per unit, calculate the number of units that need to be sold to achieve this goal.
Number of units
Bill Johnson, sales manager, and Diane Buswell, co
units
(e) Based on the most recent sales forecast, Current Designs plans to sell 1,000 units of this model. Using your results from part (c), calculate the margin of safety and the margin of safety ratio. (Round margin of safety ratio to 1 decimal place, e.g. 25.5%.)
Margin of safety $
Bill Johnson, sales manager, and Diane Buswell, co
Margin of safety ratio
Bill Johnson, sales manager, and Diane Buswell, co
%
Answer:
a. Particulars Amount$
Kevlar per kayak 250
Resin and Supplies per kayak 100
Finishing Kit per kayak 170
Labor per Kayak 420
Variable selling & admin. exp. per kayak 400
Total variable cost per kayak 1,340
b. Contribution margin per unit = Selling price per unit – Variable cost per unit
Contribution margin per unit = $2,000 per unit - $1,340 per unit
Contribution margin per unit = $660 per unit
c. Break-even point in units = Total fixed costs/ Contribution margin per unit
Break-even point in units = ($ 119,700 + $240,000) / $660 per unit
Break-even point in units = 545 units
d. Number of units to be sold = (Total Fixed cost + Target Profit)/ Contribution margin per unit
Number of units to be sold= ($119,700 + $240,000 + $270,600) / $660 per unit
Number of units to be sold = 955 units
So therefore, the company needs to sell 955 units in order to achieve target profit of $270,600.
