Answer:
1. Ben must return the baseball to the owner immediately as it is not an object of great value.
Explanation:
The owner of the baseball is still the rightful owner because he was the one who purchased the item. He does not lose ownership of the baseball simply because it landed on Ben's apartment.
Ben has not right to claim ownership of the baseball, and he must return it to the owner immediately.
Carroll Corporation has two products, Q and P. During June, the company's net operating income was $24,000, and the common fixed expenses were $52,000. The contribution margin ratio for Product Q was 40%, its sales were $137,000, and its segment margin was $44,000. If the contribution margin for Product P was $42,000, the segment margin for Product P was:
Answer:
$32,000= Segment margin product P
Explanation:
Giving the following information:
Company net operating income= $24,000
Common fixed costs= $52,000
Product Q:
Segment margin= $44,000
Contribution margin for Product P= $42,000
We need to calculate the segment margin for Product P.
Net income= Segment margin product P + Segment margin product Q - common fixed costs
24,000= Segment margin product P + 44,000 - 52,000
32,000= Segment margin product P
Arizona Crystal is a distributor of feldspar, amethyst and other mystically powerful types of crystals. The owner of Arizona Crystal, Geri Moonbeam, is proud to be a part of the movement that is contributing to the higher spirituality of the world. Geri buys crystals from local collectors and then ships them out to wholesalers throughout the country. Geri pays cash for the crystals, but she extends credit to the wholesalers. As the business has grown, problems have arisen. When Geri buys more crystals than she can sell, inventory increases and cash flow problems arise. When Geri doesn’t buy enough crystals, then she can’t fill orders and that creates problems with her customers. She needs to base her buying decisions on accurate forecasts of the demand for crystals so she can avoid these problems. After consulting her tarot cards, Geri visits a friend from El Paso, Texas, who channels for a Wall Street tycoon who didn’t survive the crash of 1929. He recommends that, since she only has twelve months of data, she should try using a moving average or exponential smoothing forecasting model. So Geri contacts you. She provides you with data on the number of crystals (in thousands) ordered during each of the past twelve months and asks you to help her develop a forecasting model. 8. Use a five period moving average model to forecast the demand in January of 1993. Also calculate the RMSE for this model. Use the table below to carry out your calculations. How does this model compare with the three period model? Month Demand (A) Demand (F) (A-F)2 Jan-92 25.6 Feb-92 24.7 Mar-92 21.3 Apr-92 13.9 May-92 12.6 Jun-92 18.0 Jul-92 21.5 Aug-92 22.3 Sep-92 30.7 Oct-92 15.0 Nov-92 13.8 Dec-92 22.6
Answer:
Explanation:
Month Demand (A) Demand (F) (A-F)²
Jan-92 25.6 - 0
Feb-92 24.7 - 0
Mar-92 21.3 - 0
Apr-92 13.9 - 0
May-92 12.6 19.62 49.28
Jun-92 18.0 18.1 0.01
Jul-92 21.5 17.46 16.32
Aug-92 22.3 17.66 21.53
Sep-92 30.7 21.02 93.7
Oct-92 15.0 21.5 42.25
Nov-92 13.8 20.66 47.06
Dec-92 22.6 20.88 29.58
The demand for january of 1993 is 20.88
RMSE² = 49.28+0.01+16.32+21.53+93.7+42.25+47.06+29.58
=299.73
[tex]=\frac{299.73}{12} \\\\= 24.98[/tex]
RMSE = √24.98
=4.99
The model has higher values of demand and RMSE than that of three month moving average model
Save-the-Earth Co. reports the following income statement accounts for the year ended December 31. Sales discounts $ 890 Office salaries expense 3,400 Rent expense—Office space 2,900 Advertising expense 780 Sales returns and allowances 390 Office supplies expense 780 Cost of goods sold 11,800 Sales 48,000 Insurance expense 2,400 Sales staff salaries 3,900 Required: Prepare a multiple-step income statement for the year ended December 31.
Answer:
Multiple-step income statement for the year ended December 31.
Sales 48,000
Less Sales returns and allowances 390
Net Sales 47,610
Less Cost of goods sold (11,800)
Gross Profit 35,810
Less Operating Expenses :
Sales discounts 890
Office salaries expense 3,400
Rent expense—Office space 2,900
Advertising expense 780
Office supplies expense 780
Insurance expense 2,400
Sales staff salaries 3,900 (15,050)
Operating Income / (Loss) 20,760
Explanation:
The multiple-step income statement shows separately profit derived from Primary Activities of an Entity (Operating Profit) and the profit that includes Secondary Activities of an Entity (Net Profit)
In this case, Save-the-Earth Co derived its profit only from Primary Activities.
On January 1, 2009, a U.S. firm made an investment in Germany that will generate $5 million annually in depreciation, converted at the current spot rate. Projected annual rates of inflation in Germany and in the United States are 5 percent and 2 percent, respectively. The real exchange rate is expected to remain constant, and the German tax rate is 50 percent. Required: Calculate the expected real value (in terms of January 1, 2009, dollars) of the depreciation charge in year 2013. Assume that the tax write-off is taken at the end of the year.
Answer:
The expected real value (in terms of January 1, 2009, dollars) of the depreciation charge in year 2013 will be $1,958,815.416.
Explanation:
It is expected that the value of the dollar in the German market will fall at the same rate as that of the real market value of the dollar when we envisage the exchange rate will remain the same. Thus the depreciation of the tax write-off in terms of its real value in dollars will fall at 5% every year from 2009 to 2013.
Therefore, at a tax rate of 50% in Germany, a $2.5 million charge on depreciation on the investment of $5 million will result in 2013.
To calculate the real value of the dollar at an inflation of 5% yearly in 2013
When the tax rate in German is 50%, then charges of depreciation of $5 million will equal4$2.5 million in 2013 dollars. When the dollar's real value of this write-off is declining due to the inflation at 5% annually, the real value in 2013 will be calculated as:
Given: $2,500,000 (P/F , 5%, 5years) ; 0.78356 (factor for calculating the amount to be recieved after 5years)
= $2,500,000 * 0.78356
= $1,958,815.416
Discuss silence is golden in relation to ethics at the work place
Answer:
Silence is a golden virtue and it involves more of listening than speaking .It is required under certain circumstances and environment. It is always advisable to remain quite silent and not be too quick to respond to situations or issues so as to avoid making and saying wrong words.
The ethics in a workplace involves communicating with others with less amount of talking as possible and more of body languages and signs. This is because the workplace is meant to be a serene place. Lack of serenity can cause distractions and Lower the productivity of the workers.
On January 1, the Sleepy Monk Coffee Shop paid $15,000 for a full year of rent beginning on January 1. The rent payment was appropriately recorded in the Cash and Prepaid Rent accounts. If financial statements are prepared on January 31, the journal entry to record the adjustment would be:
Answer:
If financial statements are prepared on January 31, the journal entry to record the adjustment would be debit rent expense and credit prepaid rent for $1,250
Explanation:
According to the given data the rent has been expired for one month so only one month's rent expense will be recorded. Therefore to calculate one month's rent expense we have to make the following calculation:
one month's rent=Total rent/period for which rent is paid*1
one month's rent=$15,000/12*1
one month's rent=$1,250
Therefore, If financial statements are prepared on January 31, the journal entry to record the adjustment would be debit rent expense and credit prepaid rent for $1,250
On September 30, 2018, the San Fillipo Corporation issued 8% stated rate bonds with a face amount of $480 million. The bonds mature on September 30, 2038 (20 years). The market rate of interest for similar bonds was 10%. Interest is paid semiannually on March 31 and September 30.
Required:
Determine the price of the bonds on September 30, 2018.
Answer:
The price of the bonds today is $397.64 million (rounded off to two decimal places)
Explanation:
The price of a bond is calculated as the present value of the face value of the bond discounted at the market interest rate plus the present value of the annuity of interest payments related to the bond discounted at the market interest rate or the Yield to Maturity (YTM).
The formula for the price of the bond is attached hereby.
Semi annual coupon rate = 8%/2 = 4%
Semi annual market interest rate = 10% / 2 = 5%
Number of semi annual interest periods = 20 * 2 = 40 periods
The interest paid by the bond semi annually is = 480 * 0.04 = $19.2 million
Price of the bond = 19.2 * [(1 - (1+0.05)^-40) / 0.05] + 480 / (1+0.05)^40
Price of the bond = $397.6363855 million rounded off to $397.64 million
Interest During Construction Dexter Construction Corporation is building a student condominium complex; it started construction on January 1, Year 1. Dexter borrowed $1 million specifically for the project by issuing a 10%, 5-year, $1 million note, which is payable on December 31 of Year 3. Dexter also had a 12%, 5-year, $3 million note payable and a 10%, 10-year, $1.8 million note payable outstanding all year. In Year 1, Dexter incurred costs as follows: January 1 $280,000 March 1 600,000 June 30 1,000,000 November 1 480,000 Calculate Dexter's capitalized interest on the student condominium complex for Year 1. Capitalized interest
Answer:
$140,500
Explanation:
first we must calculate the weighted average accumulated expenditures:
incurred costs as follows:
January 1: $280,000 x 12/12 = $280,000
March 1: $600,000 x 10/12 = $500,000
June 30: $1,000,000 x 6/12 = $500,000
November 1: $480,000 x 2/12 = $80,000
total = $1,360,000
now we must calculate the weighted average interest rate on the non construction debt:
12% x $3 million = $360,000
10% x $1.8 million = $180,000
total = $540,000 / ($3,000,000 + $1,800,000) = 11.25%
capitalized interest:
$1,000,000 x 10% (specific construction debt) = $100,000
$360,000 x 11.25% (non construction debt) = $40,500
total $140,500
You own a portfolio that has a total value of $130,000 and a beta of 1.28. You have another $49,000 to invest and you would like the beta of your portfolio to decrease to 1.18. What does the beta of the new investment have to be in order to accomplish this
Answer:βB =0.9147=beta of new investment
Explanation:
Total investment= $130,000 + $49,000= $179,000
Using
Portfolio beta(βp) = wA × βA + wB × βB
Where βp is the portfolio beta coefficient,
wA is the weight of the first investment,
βA is the beta coefficient of first investment;
wB is the weight of the second investment,
βB is the beta coefficient of second investment
but weight of investment is stock value/ total investment x 100
wA= 130,000/ 179,000X 100=72.63%
WB= 49,000/179,000 X100=27.374%
Portfolio beta(βp) = wA × βA + wB × βB
1.18=(72.63%*1.28)+(27.374% XβB )
1.18=0.9296+0.27374βB
βB i=(1.18-0.9298)/0.27374
βB =0.9147=beta of new investment
A company reported total assets at the end of 2017 of $95,000; including cash of $35,000, accounts receivable of $20,000, and inventory of $40,000. It reported total assets at the end of 2018 of $110,000; including cash of $44,000; accounts receivable of $29,000, and inventory of $37,000. Compute the net increase or decrease in cash in 2018. Decrease of $9,000 Increase of $15,000 Increase of $9,000 Decrease of $15,000
Answer:
The correct option is increase of $9,000
Explanation:
The increase or decrease in cash in 2018 could be determined by using the formula below which is coined from the statement of cash flow:
Cash at the end of the year=cash at the beginning plus +increase in cash
cash at the end of 2018 is $44,000 whereas cash at the beginning which is the same at closing balance of 2017 is $35,000
$44,000=$35,000+increase in cash
increase in cash =$44,000-$35,000
increase in cash in 2018=$9,000
atton Company purchased $1,500,000 of 10% bonds of Scott Company on January 1, 2021, paying $1,410,375. The bonds mature January 1, 2031; interest is payable each July 1 and January 1. The discount of $89,625 provides an effective yield of 11%. Patton Company uses the effective-interest method and plans to hold these bonds to maturity. On July 1, 2021, Patton Company should debit its Debt Investments account for the Scott Company bonds by__________ and credit its Interest Revenue account by __________.
Answer:
Patton Company should debit its Debt Investments account for the Scott Company bonds by $2,571 and credit its Interest Revenue account by $155,283
Explanation:
On July 1 2021, Patton Company should increase its Debt Investments account for the Scott Company bonds by =
Amount of discount amortized = Interest revenue - Interest received
= ($1,410,375 × 11% × 6/12) - ($1,500,000 × 10% × 6/12)
= $77,571 - $75,000
= $2,571
Interest revenue on 31 December 2021 = ($1,410,375 + $2,571) × 11% × 6/12
= $77,712
For the year ended December 31, 2021, Patton Company should report interest revenue from the Scott Company bonds of = $77,571 + $77,712 = $155,283
This year, Napa Corporation received the following dividends: KLP Inc (a taxable Delaware corporation in which Napa holds an 8% stock interest) - $55,000 Gamma Inc (a taxable Florida corporation in which Napa holds a 90% stock interest) - $120,000 Napa and Gamma do not file a consolidated tax return. Compute Napa's dividends-received deduction. Please show complete calculation.
Answer:
$147,500
Explanation:
Computation of Napa's dividends-received deduction
Napa is said to holds less than 20% stock interest in KLP Inc which means that the dividends received deduction in the case of dividends received from KLP would be 50%.
And in case of dividends received from Gamma, the dividends received deduction would be 100% reason been that KLP holds more than 80% of the stock interest in Gamma.
Hence:
Napa’s dividends-received deduction will be:
= ($55,000 x 50%) + $120,000
=$27,500 +$120,000
= $147,500
Therefore Napa's dividends-received deduction will be $147,500
Maxwell and Smart are forming a partnership. Maxwell is investing a building that has a market value of $100,000. However, the building carries a $36,000 mortgage that will be assumed by the partnership. Smart is investing $61,000 cash. The balance of Maxwell's Capital account will be:
Answer:
=$64,000
Explanation:
Max and Smart are forming partnership
Market Value of building = 100,000
The building carried mortgage by the partnership= 36,000
Smart is investing= 61,000
Balance of Maxwell capital Account will be Building value - Mortgage on building
=$100,000 - $36,000
=$64,000
Balance of Maxwell capital Account is equals to =$64,000
Capital account is the account that show the net worth of an enterprise or business in accounting.
The current sections of Flint Corporation’s balance sheets at December 31, 2016 and 2017, are presented here. Flint Corporation’s net income for 2017 was $156,213. Depreciation expense was $27,567.
2017
2016
Current assets
Cash
$107,205
$ 101,079
Accounts receivable
81,680
90,869
Inventory
171,528
175,612
Prepaid expenses
27,567
22,462
Total current assets
$387,980
$390,022
Current liabilities
Accrued expenses payable
$ 15,315
$ 5,105
Accounts payable
86,785
93,932
Total current liabilities
$102,100
$ 99,037
Prepare the net cash provided (used) by operating activities section of the company’s statement of cash flows for the year ended December 31, 2017, using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Answer:
209305
Explanation:
Statement of cash flow
Cash from operating activities
Profit after taxation 156213
Adjustments :
Depreciation 27567
Cash flow from operating activities before working capital changes 183780
Working Capital changes :
Change in trade receivables 9189
Change in inventories 4084
Change in prepaid expenses (5105)
Change in trade payables 7147
Change in accrued expenses 10210
Cash generated from operations 209305
Which conditions would allow Country X to have an absolute advantage over Country Y in the
production of automobiles?
O Country X's workers eam higher wages
O Country X can manufacture cars more cheaply.
O Country Y has a protective tariff on car imports.
O Country Y subsidizes its automobile industry.
Next
Answer:
O Country Y has a protective tariff on car imports.
Explanation:
A protective tariff is "a tariff imposed to protect domestic firms from import competition "
Answer:
Country X can manufacture cars more cheaply.
Explanation:
took test
Wright Machinery Corporation manufactures automobile engines for major automobile producers. The engines sell for $910 per engine. In addition, customers have the option to purchase a service-type warranty for $70 per engine that protects against any defects for a period of 5 years. During 2019, Wright sold 9,000 engines to National Motors. National Motors purchased warranties on all of the engines purchased. During 2019, Wright repaired defective motors at a cost of $93,400.
Prepare the necessary journal entries to record:__________.1. The sale of engines and service warranty on account during 2016 (one entry).2. The warranty costs paid during 2016.3. The warranty revenue earned in 2016.
Answer:
1. The sale of engines and service warranty on account during 2016 (one entry).
Dr Cash 8,820,000
Cr Sales revenue 8,190,000 (= 9,000 x $910)
Cr Unearned warranty revenue 630,000 (= 9,000 x $70)
2. The warranty costs paid during 2016.3. The warranty revenue earned in 2016.
to record warranty expenses during the year
Dr Warranty expense 93,400
Cr Cash 93,400
to record warranty revenue
Dr Unearned warranty revenue 126,000 (= $630,000 / 5 = $126,000)
Cr Extended warranty revenue 126,000
Explanation:
Service-type warranties sold are a liability for the company (unearned revenue) and they will be accrued as time goes on. In this case, accrued warranty revenue is adjusted annually but it could also be adjusted monthly.
Firm B, a calendar year, cash basis taxpayer, leases lawn and garden equipment. During December, it received the following cash payments. To what extent does each payment represent current taxable income to Firm B?
a. $522 repayment of a loan from an employee. Firm B loaned $500 to the employee six months ago, and the employee repaid the loan with interest.
b. $600 deposit from a customer who rented mechanical equipment. Firm B must return the entire deposit when the customer returns the undamaged equipment.
c. $10,000 short-term loan from a local bank. Firm B gave the bank a written note to repay the loan in one year at 9 percent interest.
d. $888 prepaid rent from the customer described in part b. The rent is $12 per day for the 74-day period from December 17 through February 28.
Answer:
a. $522 repayment of a loan from an employee. Firm B loaned $500 to the employee six months ago, and the employee repaid the loan with interest.
Firm B should recognize $22 as interest income.b. $600 deposit from a customer who rented mechanical equipment. Firm B must return the entire deposit when the customer returns the undamaged equipment.
The deposit cannot be recognized as income since it is a liability.c. $10,000 short-term loan from a local bank. Firm B gave the bank a written note to repay the loan in one year at 9 percent interest.
Interests ($900) will be recognized when they are actually paid for in 1 year. No accrued interests must be reported on the balance sheet (December 31).d. $888 prepaid rent from the customer described in part b. The rent is $12 per day for the 74-day period from December 17 through February 28.
The $888 will be recognized as revenue during the current year.Explanation:
When a taxpayer is a cash basis taxpayer, it will only report income and expenses that are actually collected or paid for respectively. All accounts receivable or accounts payable are not considered revenues nor expenses.
Horizontal analysis: Is also called vertical analysis. Is the presentation of financial ratios. Is a tool used to evaluate financial statement items relative to industry statistics. Is a method used to evaluate changes in financial data across time. Evaluates financial data across industries.
Answer:
Explanation:
Horizontal analysis is comparing financial statistics or data over a period of time. it is also known as trend analysis.
Vertical analysis compares line items within the same period.
I hope my answer helps you
Wings Co. budgeted $572,000 manufacturing direct wages, 2,500 direct labor hours, and had the following manufacturing overhead: Overhead Cost Pool Budgeted Overhead Cost Budgeted Level for Cost Driver Overhead Cost Driver Materials handling $ 196,000 4,900 pounds Weight of materials Machine setup 19,600 560 setups Number of setups Machine repair 1,600 32,000 machine hours Machine hours Inspections 16,500 330 inspections Number of inspections Requirements for Job #971 which manufactured 4 units of product: Direct labor 20 hours Direct materials 220 pounds Machine setup 30 setups Machine hours 16,700 machine hours Inspections 15 inspections The total overhead of Job #971 under the ABC costing is:
Answer:
Total allocated overhead= $11,435
Explanation:
Giving the following information:
Materials handling $196,000 4,900 pounds
Machine setup $19,600 560 setups
Machine repair $1,600 32,000 machine hours
Inspections $16,500 330 inspections
Job 971
Direct labor 20 hours
Direct materials 220 pounds
Machine setup 30 setups
Machine hours 16,700 machine hours
Inspections 15 inspections
First, we need to calculate the estimated overhead rate for each activity:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Materials handling= 196,000/4,900= $40 per pound
Machine setup= 19,600/560= $35 per setup
Machine repair= 1,600/32,000= $0.05 per machine hour
Inspections= 16,500/330= $50 per inspection
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Materials handling= 40*220= 8,800
Machine setup= 35*30= 1,050
Machine repair= 0.05*16,700=835
Inspections= 50*15= 750
Total allocated overhead= $11,435
Your grandmother asks for your help in choosing a certificate of deposit (CD) from a bank with a one-year maturity and a fixed interest rate. The first certificate of deposit, CD #1, pays 1.95 percent APR compounded monthly, while the second certificate of deposit, CD #2, pays 2.00 percent APR compounded weekly. What is the effective annual rate (the EAR) of each CD, and which CD do you recommend to your grandmother?
Answer:
1.97% and 2.01%
Explanation:
The computation of the effective annual rate is shown below:-
Effective annual rate = (1 + Annual percentage rate ÷ n)^n -1
For CD 1
= (1 + 0.0195 ÷ 12)^12 - 1
= (1 + 0.001625 )^12 - 1
= (1.001625 )^12 - 1
= 1.97%
For CD 2
= (1 + 0.02 ÷ 2)^2 - 1
= (1 + 0.01 )^2 - 1
= (1.01)^2 - 1
= 2.01%
CD 2 will recommend to the grandmother
Annual production and sales level of Product A is 34,300 units, and the annual production and sales level of Product B is 69,550 units. What is the approximate overhead cost per unit of Product A under activity-based costing?
Answer:
$3.00
Explanation:
Calaculation of the approximate overhead cost per unit of Product A under activity-based costing:
The first step is to calculate for the Activity 1 allocated to Product A line which is :
$87,000 × 3,000/5,800
=$261,000,000/5,800
=$45,000
The second step is to calaculate for Activity 2 allocated to Product A line which is :
$62,000 × 4,500/10,000
$279,000,000/10,000
=$27,900
The third step is to calculate for Activity 3 allocated to Product A line which is :
$93,000 × 2,500/7,750
=$232,500,000/7,750
=$30,000
The total overhead allocated to Product A
$45,000+$30,000+$27,900
= $102,900
Overhead per unit of Product A: $102,900/Annual production of 34,300 units
= $3.00
Therefore the approximate overhead cost per unit of Product A under activity-based costing will be $3.00
A country produces melons and wheat. 1.) Using the 3-point curved line drawing tool, draw a representative PPC for this country. Label it 'PPC'. 2.) Using the point drawing tool, show a production point that is efficient. Label it 'A'. 3.) Using the point drawing tool, show a production point that is attainable but not efficient. Label it 'BE'. Carefully follow the instructions above, and only draw the required objects.
Answer:
1.) Using the 3-point curved line drawing tool, draw a representative PPC for this country. Label it 'PPC'.
I have attached a picture below. It shows a simple possibilities frontier for a country that can produce up to 16 units of melons and wheat.
2.) Using the point drawing tool, show a production point that is efficient. Label it 'A'
Producition points that are efficient are any points on the curve. Producing 16 melons and 0 wheat is efficient because all economic resources are being used to produce the maximum amount of a good that is possible. Producing 8 melons, and 8 units of wheat is also efficient for the same reason.
3.) Using the point drawing tool, show a production point that is attainable but not efficient.
Any point inside the curve would be inefficient because resouces would be used to produce less than the maximum amount possible. For example, if 15 units of wheat are produced, but less than one unit of melon is produced, then, there is inefficiency, because 1 unit of melon should be produced in that case.
Assume straight-line depreciation. A company plans to purchase machinery costing $1,000,000 with salvage value of $200,000 after 4 years. After-tax net income is expected to be $55,000, $40,000, $35,000, and $30,000 during the 4 years. Calculate the accounting rate of return. Round your answer to the nearest tenth of a percent.
Answer:
Accounting rate of return = 6.67%
Explanation:
The accounting rate of return (ARR) is the proportion of the average investment that is earned as profit.
ARR = average operating income/ Average investment
Average income =( 55,000 + 40,000 + 35,000 + 30,000)/4=40,000
Average investment = initial cost + salvage value/2
= 1,000,000 + 200,000/2 = 600,000
ARR = 40,000/600,000 × 100= 6.67
Accounting rate of return = 6.67%
Answer:
6.7%
Explanation:
In Appellia, it takes 10 units of resources to increase its output of sugar from 12 tons to 13 tons, but 11 units of resources to increase output from 13 tons to 14 tons, and 12 units of resources to increase output from 14 tons and 15 tons, and so on. The need for increasing resources is an example of:________.
a. comparative advantage.
b. diminishing returns to specialization.
c. absolute advantage.
d. mercantilism Porter's diamond model.
Answer:
b. diminishing returns to specialization.
Explanation:
Diminishing returns is also called diminishing productivity. It states that as additional unit of input is used in production it will get to a stage where more of input will be required to maintain output levels.
If the same level of input is used it will result in reduction in output over time.
This is exemplified in this secanrio where it takes 10 units of resources to increase its output of sugar from 12 tons to 13 tons, but 11 units of resources to increase output from 13 tons to 14 tons, and 12 units of resources to increase output from 14 tons and 15 tons.
It takes more input to increase output by 1 ton
Torres Company uses the gross method and a perpetual inventory system. Assuming the following entries, compute the amount that Torres Company received on May 12.
a. May 1 Sold goods costing $3,000 to Campbell Company on account, $5,000, terms 1/10, n/30. The goods are shipped FOB Shipping Point, Freight Prepaid by Seller, $110.
b. May 7 Campbell Company returned undamaged merchandise previously purchased on account, $200.
c. May 12 Received the amount due from Campbell Company.
Answer:
Torres Company received $4,800 on May 12.
Explanation:
When The Sale was made, the following entries apply :
J1
Trade Receivable $5,000 (debit)
Sales Revenue $5,000 (credit)
J2
Cost of Sales $3,000 (debit)
Merchandise $3,000 (credit)
J3
Freight Expenses $110 (debit)
Cash $110 (credit)
When Campbell Company returned Merchandise :
J1
Sales Revenue $200 (debit)
Trade Receivable $200 (credit)
When Campbell Company pays for the goods
The payment is made 2 days out of the discount period, therefore not eligible for discount.
Settle amount in full less Return Allowance of $200
Trade Receivable $4,800 (debit)
Cash $4,800 (credit)
Conclusion :
Torres Company received $4,800 on May 12.
Minstrel Manufacturing uses a job order costing system. During one month, Minstrel purchased $201,000 of raw materials on credit; issued materials to production of $198,000 of which $27,000 were indirect. Minstrel incurred a factory payroll of $153,000, of which $37,000 was indirect labor. Minstrel uses a predetermined overhead application rate of 150% of direct labor cost. If Minstrel incurred total overhead costs of $180,000 during the month, compute the amount of under- or overapplied overhead:
Answer:
Underapplied overhead= $6,000
Explanation:
Giving the following information:
Direct labor= $153,000 - $37,000= $116,000
The predetermined overhead application rate= 150% of direct labor cost.
Actual overhead= $180,000
First, we need to allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 116,000*1.5= $174,000
Now, we can calculate the over/under allocation:
Under/over applied overhead= real overhead - allocated overhead
Under/over applied overhead= 180,000 - 174,000
Under/over applied overhead= $6,000 underallocated
Torche Corporation Balance Sheet As of March 11, 2020 (amounts in thousands) Cash 14,700 Accounts Payable 2,400 Accounts Receivable 4,800 Debt 3,700 Inventory 3,800 Other Liabilities 5,000 Property Plant & Equipment 15,800 Total Liabilities 11,100 Other Assets 900 Paid-In Capital 6,000 Retained Earnings 22,900 Total Equity 28,900 Total Assets 40,000 Total Liabilities & Equity 40,000 Use T-accounts to record the transactions below, which occur on March 12, 2020, close the T-accounts, and construct a balance sheet to answer the question. 1. Receive payment of $12,000 owed by a customer 2. Buy $15,000 worth of manufacturing supplies on credit 3. Purchase equipment for $44,000 in cash What is the final amount in Total Liabilities & Equity?
Answer:
Final amount in Total Liabilities & Equity = $40,015,000
Explanation:
A T-account refers to an informal term that is used to describe a set of financial records that are based on the principle of double-entry bookkeeping. The term T- account is used to indicate how bookkeeping entries appear.
Balance sheet is a statement of financial position used to report assets, liabilities and shareholders' equity of a company.
Note: See the attached excel for the T-accounts prepared and the balance sheet constructed. Just scroll down on the excel file to see everything.
The Sunland Acres Inn is trying to determine its break-even point during its off-peak season. The inn has 50 rooms that it rents at $80 a night. Operating costs are as follows:
Salaries $5,400 per month
Utilities $1,200 per month
Depreciation $1,100 per month
Maintenance $2,140 per month
Maid service $19 per room
Other costs $37 per room
Required:
a. Determine the inn's break-even point in number of rented rooms per month.
b. Determine the inn's break-even point in dollars.
Answer:
Instructions are below.
Explanation:
Giving the following information:
The inn has 50 rooms that it rents at $80 a night.
Operating costs are as follows:
Salaries $5,400 per month
Utilities $1,200 per month
Depreciation $1,100 per month
Maintenance $2,140 per month
Maid service $19 per room
Other costs $37 per room
We won't take into account the depreciation expense because it is not a cash disbursement.
To calculate the break-even point in units, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Fixed costs= 5,400 + 1,200 + 2,140= $8,740
Variable cost= 19 + 37= $56
Break-even point in units= 8,740 / (80 - 56)
Break-even point in units= 364 rented rooms
To calculate the break-even point in dollars, we need to use the following formula:
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 8,740 / (24/80)
Break-even point (dollars)= $29,133
Match the following terms with the best definition given.
a. Currently attainable standard
b. Favorable cost variance
c. Ideal standard
d. Nonfinancial performance measure
e. Unfavorable cost variance
- An example is number of customer complaints.
- Actual cost > standard cost at actual volumes
- Actual cost < standard cost at actual volumes
- Normal standard
- Theoretical standard
Answer: Please refer to Explanation
Explanation:
a. Currently attainable standard - Normal standard.
When a company says that a certain level of production is it's Currently Attainable Standard, they mean that this is the normal standard that they are able to operate in. That it is the standard that they have the actual capacity to produce at and so is normal for them.
b. Favorable cost variance - Actual cost < standard cost at actual volumes.
Variance cost in production is a measure that compares the cost that a company budgets to be able to produce a good vs the actual amount it takes to produce the said good. When the Budget is higher than the actual cost of production, it is said to be a FAVOURABLE balance because the budget was not exceeded.
c. Ideal standard - Theoretical standard.
This is the Standard that the company would like to be producing at to make a certain level of profit. It is usually different from the Normal Standard and the goal of most of not all companies is to work towards attaining their Ideal standard. They usually make Theoretical forecasts about their Ideal Standard.
d. Nonfinancial performance measure - An example is number of customer complaints.
There are many ways to measure performance but those ways are usually group into 2 categories being Financial and Non-financial measures of performance. The number of customer complaints that a business gets is a type of Non-financial Performance. As the intended market for a product, Customers are the most important appraisers of a Company's goods and services and if there are relatively low customer complaints, this shows that the company is performing well as they are able to please their customers.
e. Unfavorable cost variance - Actual cost > standard cost at actual volumes
As mentioned before, Variance helps determine the cost of production vs the budgeted cost of production. When a cost Variance is labeled as Unfavourable, it means that the Actual Cost exceeded the Budget of the production activity. This is unfavourable because it means that the business had to spend more than it thought it would on production thereby harming it's profit margins.
A firm has sales of $1,140, net income of $218, net fixed assets of $528, and current assets of $284. The firm has $93 in inventory. What is the common-size balance sheet value of inventory
Answer:
The answer is 11.45%
Explanation:
Solution
Given that:
Firm sales = $1,140
The net income = $218
Net fixed assets = $528
The firm's inventory = $93
The next step is to find the common-size balance sheet value of inventory
Now,
The common size value of inventory would be value of inventory divided by total value of assets.
So,
Total assets=current assets+net fixed assets
=$528+$284 = $812
Therefore,
The common size value of inventory = inventory/Total assets
$93/$812
=11.45%
