Answer:
Break-even sales in dollars = $23,273
Explanation:
The break-even point is the selling price at which the selling price, equals the cost of production. no profit is made, but no loss is incurred too.
we will use the formula for calculating required selling price, to calculate the break-even price as follows:
Required selling price = (Fixed costs + Target profit) ÷ (Contribution margin ratio)
Contribution margin ratio = Contribution margin ÷ net sales revenue
Contribution margin = sales price - variable cost
contribution margin = 40 - 18 = $22
Net sales revenue = $40
∴ contribution margin ratio = (Contribution margin ÷ net sales revenue) × 100
= 22 ÷ 40 = 55.00% = 0.55
∴ Required selling price = (Fixed costs + Target profit) ÷ (Contribution margin ratio)
Required selling price = (12,800 + 0) ÷ 55.00%
= 12,800 ÷ 0.55 = 23,272.7 = 23,273 (to the nearest dollars)
Break-even sales in dollars = $23,273
A couple owns a life insurance policy with a Children’s Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability?
1. Medical exam and parental medical history
2. Medical exam
3. Proof of insurability is not required
4. Her parent's federal income tax receipts
Answer:
3. Proof of insurability is not required
Explanation:
Proof of insurability is not required because if a children's term rider is attached to a life insurance policy, then children are protected or covered by this insurance till they reach a particular age, which happens to be the maximum age stated in the policy. From that age they can convert their insurance coverage to a permanent
life insurance policy without having to issue proof of insurability as it would not be required because a child rider locks in future insurability. The can child rider can be purchased with an individual life insurance policy.
Nickolas Imports recorded a restructuring charge of $21.6 million during fiscal 2014 related entirely to the closing of its California based operations in San Diego and in Tijuana, Mexico. The company's financial statement footnotes indicated that expected employee separation payments amounted to $16.8 million and that fixed asset write-downs accounted for the remainder. Nickolas had never before incurred restructuring charges. At the end of the year, the company's balance sheet included a restructuring accrual liability of $3,600,000. Calculate the cash flow effect of Nickolas’s restructuring during fiscal 2014.
Answer: $13,200,000
Explanation:
Nickolas Import recorded a restructuring charge of $21.6 million.
Of this amount, $16.8 million were for employee separation fees.
When calculating the cash flow effect of the restructuring on Nickolas Imports, the $16.8 million is the relevant account. This is because the Asset write downs that make up the rest of the $21.6 million are not cash items neither can they be accrued like normal expenses or Liabilities so they will not be recorded as an Accrual Liability.
The Net Cashflow effect of Nickolas Imports for the year therefore is,
= 16.8 - 3.6
= $13.2 million.
What this means is that with a restructuring accrual liability of $3,600,000 at the end of the year from an initial Balance of $16.8 million, it means that Nickolas Imports must have settled $13,200,000 during the year to be left with that balance of $3,600,000.
Which of the following are a type of overhead allocation method?
a. division overhead rate method.
b. activity-based costing method
c. departmental overhead rate method
d. plantwide overhead rate method
Answer:
b. activity-based costing method
c. departmental overhead rate method
d. plantwide overhead rate method
Explanation:
B. Activity based costing method allocates different cost pools or drivers to each overhead based on its level of activity or usage etc. For example if we want to find the cost of telephone calls we would find the number of total calls not number of days. Similarly if we want to calculate the wages we will find the number of hours not days etc.
C. Department overhead rate method allocates different rates to each department. For example the rates of the lubricating department may be different from the finishing department or polishing department etc.
D. Platwide Overhead rate method allocates a single rate to all the products. It is based on direct labor hours . And number of hours are used to allocate it to different products. For example the rate may be $1.5 per hour and it can be calculated for different products as product A requires 6 hours and product B requires 9 hours so the rate for Product A would be $ 9.0 and $ 12 for product B.
A.division overhead rate method. Theres no such overhead rate as division overhead rate method.
The plantwide overhead rate method. Thus the option D is correct.
What is the overhead allocations ?The overhead allocation refers to the rate of the cost allocations . The core components of the cost allocations is track the organization products and services. The business can identify the services that helps in managing the company's financial resources. It helps to allocate the cost to the business units.
Find out more information about the allocation method.
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The company employs a single employee who works all five weekdays and is paid on the following Monday. The employee works the entire week ending on Friday, December 30. The employee earns $800 per day. Complete the necessary December 31 journal entry by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.
Answer: The answer is provided below
Explanation:
Adjusting entries are the entries that are passed at the end of the year. They are passed to adjust the account so as to make them follow the matching principle.
In the calculation attached, it should be noted that the salary expenses was calculated as the amount earned per day by the number of days. This is:
= $800 × 5
= $4000.
The necessary journal has been attached
Tipton Processing maintains its internal inventory records using average cost under a perpetual inventory system. The following information relates to its inventory during the year: Jan. 1 Inventory on hand—80,000 units; cost $4.25 each. Feb. 14 Purchased 120,000 units for $4.50 each. Mar. 5 Sold 150,000 units for $14.00 each. Aug. 27 Purchased 50,000 units for $4.80 each. Sep. 12 Sold 60,000 units for $14.00 each. Dec. 31 Inventory on hand—40,000 units. Required: 1. Determine the amount Tipton would calculate internally for ending inventory and cost of goods sold using average cost under a perpetual inventory system. 2. Determine the amount Tipton would report externally for ending inventory and cost of goods sold using last-in, first-out (LIFO) under a periodic inventory system. 3. Determine the amount Tipton would report for its LIFO reserve at the end of the year. 4. Record the year-end adjusting entry for the LIFO reserve, assuming the balance at the beginning of the year was $8,000.
Answer:
1. Determine the amount Tipton would calculate internally for ending inventory and cost of goods sold using average cost under a perpetual inventory system.
COGS = $936,000Ending inventory = $184,0002. Determine the amount Tipton would report externally for ending inventory and cost of goods sold using last-in, first-out (LIFO) under a periodic inventory system.
COGS using LIFO = $950,000Ending inventory = $170,0003. Determine the amount Tipton would report for its LIFO reserve at the end of the year.
$22,0004. Record the year-end adjusting entry for the LIFO reserve, assuming the balance at the beginning of the year was $8,000.
Dr Cost of goods sold 14,000
Cr LIFO reserve 14,000
Explanation:
1)
Jan. 1 Inventory on hand—80,000 units; cost $4.25 each.
Feb. 14 Purchased 120,000 units for $4.50 each.
Mar. 5 Sold 150,000 units for $14.00 each.
COGS = {[(80,000 x $4.25) + (120,000 x $4.50)] / 200,000} x 150,000 = $660,000
remaining inventory 50,000 units at $4.40 = $220,000
Aug. 27 Purchased 50,000 units for $4.80 each.
Sep. 12 Sold 60,000 units for $14.00 each.
COGS = {[(50,000 x $4.40) + (50,000 x $4.80)] / 100,000} x 60,000 = $276,000
Dec. 31 Inventory on hand—40,000 units at $4.60 = $184,000
2)
Jan. 1 Inventory on hand—80,000 units; cost $4.25 each.
Feb. 14 Purchased 120,000 units for $4.50 each.
Mar. 5 Sold 150,000 units for $14.00 each.
Aug. 27 Purchased 50,000 units for $4.80 each.
Sep. 12 Sold 60,000 units for $14.00 each.
Dec. 31 Inventory on hand—40,000 units at $4.60 = $184,000
total units sold = 210,000
COGS using LIFO = (50,000 x $4.80) + (120,000 x $4.50) + (40,000 x $4.25) = $240,000 + $540,000 + $170,000 = $950,000
Ending inventory = 40,000 x $4.25 = $170,000
3) LIFO reserve = FIFO inventory - LIFO inventory
FIFO inventory = $192,000 - $170,000 = $22,000
4) $22,000 - $8,000 = $14,000
A bond with a 7-year duration is worth $1,079, and its yield to maturity is 7.9%. If the yield to maturity falls to 7.75%, you would predict that the new value of the bond will be approximately:_____________.
Answer:
$1,087.27
Explanation:
The new value of the bond is the new price of the bond calculated using yield to maturity of 7.75% instead of the original yield of 7.9% using excel pv formula provided thus:
=-pv(rate,nper,pmt,fv)
Before that we need to determine the pmt which is the annual coupon on the bond.
=pmt(rate,nper,-pv,fv)
rate is the original yield ot 7.9%
nper is the duration of 7 years
pv is the initial market price of $1,079
fv is the face value of $1000
=pmt(7.9%,7,-1079,1000)=$ 94.12
The new price is computed thus:
=-pv(7.75%,7,94.12,1000)=$1,087.27
Jeremy has been dissatisfied in his job. He has revised his resume, updated his LinkedIn profile, and accepted an invitation to interview with a competitor firm. Which response to dissatisfaction is Jeremy engaging in?
Answer:
The response to dissatisfaction is Exit
Explanation:
Since He has revised his resume, updated his LinkedIn profile, and accepted an invitation to interview with a competitor firm, this symbolizes Exit
Exit has to do with leaving an organization, transferring to another work unit, or at least trying to get away from the unsatisfactory situation. Jeremy is already searching for better work opportunities elsewhere
The response to dissatisfaction is Jeremy engaging in is Exit
Information regarding dissatisfaction:Since He has revised his resume, updated his LinkedIn profile, and accepted an invitation to interview with a competitor firm, this represents Exit. Here Exit means leaving an organization, transferring to another work unit. Also, Jeremy is already searching for better work opportunities elsewhere
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On January 2, 2015, Vaughn Corporation issued $1,650,000 of 10% bonds at 96 due December 31, 2024. Interest on the bonds is payable annually each December 31. The discount on the bonds is also being amortized on a straight-line basis over the 10 years. (Straight-line is not materially different in effect from the preferable "interest method".) The bonds are callable at 102 (i.e., at 102% of face amount), and on January 2, 2017, Vaughn called $1,140,000 face amount of the bonds and redeemed them. Ignoring income taxes.
Required:
Compute the amount of loss, if any, to be recognized by Vaughn as a result of retiring the $1,140,000 of bonds in 2017
Answer:
$59,280
Explanation:
This can be calculated as follows:
Bond issue price = $1,650,000 * 0.96 = $1,584,000
Discount on bonds payable = $1,650,000 - $1,584,000 = $66,000
Annual amortization of discount on bonds payable = $66,000 / 10 = 6,600
Bond carrying value on January 2, 2017 = Bond issue price + (Annual discount on bonds payable * Number of years) = $1,584,000 + ($6,600 * 2) = $1,597,200
Value of $1,140,000 of bonds = ($1,597,200 / $1,650,000) * $1,140,000 = $1,103,520
Loss on recognized on redemption = ($1,140,000 * 102%) - $1,103,520 = $59,280
During 2021, a company sells 500 units of inventory for $95 each. The company has the following inventory purchase transactions for 2021:Calculate cost of goods sold and ending inventory for 2021 assuming the company uses the weighted-average cost method
Answer:
cost of goods sold = $36,285
ending inventory = $1,742
Explanation:
when you use the weighted average cost method you have to calculate the COGS using the total number of units and the total amount paid for them.
beginning inventory = 71 units for $5,325
purchase 1 = 262 units for $18,864
purchase 2 = 187 units for $13,838
total 524 units for $38,027
cost per unit = $38,027 / 524 units = $72.57
cost of goods sold = 500 units x $72.57 = $36,285
ending inventory = 24 units x $72.57 = $1,741.68 ≈ $1,742
Support agents at Universal Containers research solutions to customer issues by asking various subject matter experts (SMEs) at the company.Which three features will allow Support Agents to quickly document the details of these meetings? (Choose three.)
A. Case Feed
B. Workflow Email Alerts
C. Case Group
D. Case Comments
E. Events
Answer:
A,C,D
Explanation:
Remember, we are told the issue concerns "support agents" working for a company–Universal Containers. Thus, they will be using Salesforce inorder to document their findings.
i. Case feed is one useful feature that quickly allows the support agents to edit, store and change the status of cases where necessary.
Ii. Case group is another useful feature to group cases that the support agents consider as been interrelated.
iii. Case comments feature allows them to read through case by case comment from the participants in the research, allowing proper insight into minds of the customers.
Journalize the following five transactions for Nexium & Associates, Inc. Omit explanations.
March 1 - Bills are sent to clients for services provided in February in the amount of $800.
March 9 - Corner Office, Inc. delivers office furniture ($1,060) and office supplies ($160) to Nexium leaving an invoice for $1,220.
March 15 - Payment is made to Corner Office, Inc. for the furniture and office supplies delivered on March 9.
March 23 - A bill for $430 for electricity for the month of March is received and will be paid on its due date in April.
March 31 – Salaries of $850 are paid to employees.
For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0".
Answer:
Nexium & Associates Journal entries
March 1
Dr Accounts Receivable800
Cr Service Revenue 800
March 9
Dr Office Furniture1,060
Cr Office Supplies 160
Cr Accounts Payable1,220
March 15
Dr Accounts Payable1,220
Cr Cash1,220
March 23
Dr Electricity Expense430
Cr Accounts Payable430
March 31
Dr Salaries Expense850
Cr Cash850
Explanation:
The details given about Nexium & Associates are straight forward and required no further
adjustment.
Answer:
Explanation:
Journal to record the five transactions for Nexium and Associates, Inc.
Account Particulars Debit Credit
March 1
Accounts Receivable $800
Services Revenue $ 800
March 9
Office Furniture $1,060
Office Supplies 160
Accounts Payable 1,220
March 15.
Accounts Payable 1,220
Cash 1,220
March 23.
Electricity Expense $430
Accounts Payable $430
March 31
Salaries Expense $850
Cash $850
compare and contrast the Reference Theory of meaning and the Idea Theory of meaning and explain how best each of them can be used to explain the term deadly virus .
Answer:
Check Explanation.
Explanation:
The concept of " Reference Theory of meaning " and the "Idea Theory of meaning " are very important in the aspect that concerns the use of language for expression and language semantics.
The SIMILARITIES BETWEEN " Reference Theory of meaning " and the "Idea Theory of meaning ";
=> They are both used in the Explanation of meaning that is to say in semantics.
=> They are both defined through "action''
The DIFFERENCE BETWEEN " Reference Theory of meaning " and the "Idea Theory of meaning " :
(1). The term "Reference Theory of meaning" simply means that every word has a particular reference or label.
For instance now;
=> Ebola Virus is deadly.
=> Stomach ache is deadly.
The Ebola Virus is the label for the micro-organism, deadly denotes how the virus kills and the " Ebola Virus is deadly" denotes the sentence.
The first sentence "Ebola Virus is deadly" is right as this sentence makes reference to Ebola virus that is being used in the determination of how true a sentence is.
SUMMARY: ALL WORDS SYMBOLIZES SOMETHING IN REAL LIFE AND THEY ARE USED IN THE DETERMINATION OF WHAT IS TRUE AND WHAT IS WRONG OR WHAT HAS VALUE.
The disadvantage is that it can not be used in the expression for that are abstract.
(2). Idea Theory of meaning simply refers to meaning BASED ON IDEAS and not what it actually means in REAL LIFE SCENARIO.
Its disadvantage is that mental images or ideas differ from one individual to the other.
The payback period provides information to managers that can be used to help a.control the risks associated with the uncertainty of future cash flows. b.minimize the impact of an investment on a firm's liquidity problems. c.control the effect of the investment on performance measures. d.control the risk of obsolescence. e.All of these choices are correct.
Answer:
e. All of these choices are correct.
Explanation:
The payback period is the time that takes an investment to reach the break-even point. In other words, it is the amount of time that it takes an investor to pay back for the investment, hence the name.
The payback period results from dividing the amount of investment by the estimated cash flow from the investment.
During this period, the manager of an investment can carry out all of the activities listed in the question.
Addison, Inc. uses a perpetual inventory system. The following is information about one inventory item for the month of September:
Sep. 1 : Inventory20 units at $20
Sep. 4 : Sold10 units
Sep. 10 : Purchased30 units at $25
Sep. 17 : Sold20 units
Sep. 30 : Purchased10 units at $30
a) If Addison uses LIFO, the cost of the ending merchandise inventory on September 30 is:___________.
a.$800
b.$750
c.$650
d.$700
b) If Addison uses FIFO, the cost of the ending merchandise inventory on September 30 is:__________.
a.$800
b.$700
c.$650
d.$750
Answer:
lLIFO-option B is correct ,$750
FIFO-option A is correct,$800
Explanation:
In using LIFO, each item sold is from the last inventory received while the FIFO is of the opinion that item sold is the oldest stock of inventory.
Under LIFO, cost of ending merchandise is as follows:
10 units (20-10) at $20=$200
10 units (30-20) at $25=$250
10 units at $30 =$300
Total value of inventory =$750
The correct option is B,$750
Under FIFO, cost of ending inventory is as follows:
20 units at $25 =$500
10 units at $30 = $300
total value of inventory =$800
The correct option is A,$800
Consider a linear, upward sloping supply curve. If the supply curve shifts upward, then: the price elasticity of supply will increase. the price elasticity of supply will increase if the slope of the supply curve is greater than one and the lowest price needed to induce firms to supply anything is positive. the price elasticity of supply will increase if the slope of the supply curve is greater than one. the price elasticity of supply will be constant. none of the above
Answer:
The answer is: the price elasticity of supply will increase if the slope of the supply curve is greater than one and the lowest price needed to induce firms to supply anything is positive
Explanation:
The law of supply is the higher the price the higher the quantity supplied and vice-versa. An increase in supply shifts the supply curve to the right and a decrease shifts the supply curve to the left.
Price elasticity of supply is the ratio of percentage change in quantity supplied of a good to percentage change in price of the good.
The upward shift of supply curve tells us that supply often decreases when the costs of production increase, so producers need to set a higher price inorder to cover the higher cost of inputs(cost of production) and vice-versa for the downward shift.
So considering a linear, upward sloping supply curve. If the supply curve shifts upward, then the price elasticity of supply will increase if the slope in greater than one(supply is elastic) indicating a high responsiveness to changes in price. And also, the lowest price for the goods must be encouraging (positive) so as to serve as motivation to produce.
Note: A high price tells producers that a good is in demand and they should make more and vice-versa
The law of supply is the higher the price the higher the quantity supplied and vice-versa. An increase in supply shifts the supply curve to the right and a decrease shifts the supply curve to the left.
Correct option is C.
"the price elasticity of supply will increase if the slope of the supply curve is greater than one and the lowest price needed to induce firms to supply anything is positive."
So, considering a linear, upward sloping supply curve. If the supply curve shifts upward, then the price elasticity of supply will increase if the slope in greater than one(supply is elastic) indicating a high responsiveness to changes in price. And also, the lowest price for the goods must be encouraging (positive) so as to serve as motivation to produce.
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A furniture factory's employees work overtime in February to finish an order that is sold on February 28. The office sends a statement to the customer in early March and payment is received by mid-March. The overtime salaries should be expensed in:______
a) the period when the workers receive their cheques
b) either in February or March depending on when the pay period ends
c) February.
d) March.
Answer: February
Explanation:
Overtime is the amount of time that a person works beyond the normal working hours. From the question, we realise that a furniture factory's workers work overtime in February in order to finish an order that was sold on February 28.
Based on this scenario, the overtime wages should be expensed in February. This is because expenses are recognised when incurred while incomes are recognised when earned. Since the expenses are incurred in February, the overtime salaries should be expensed in February.
You consider buying a share of stock at a price of $21. The stock is expected to pay a dividend of $2.04 next year, and your advisory service tells you that you can expect to sell the stock in 1 year for $24. The stock's beta is 1.2, rf is 8%, and E[rm] = 16%. What is the stock's abnormal return?A. 1%
B. 2%
C. -1%
D. -2%
E. None of the above
Answer:
E. None of the above
Explanation:
First we need to calculate the holding period return
Holding period return is the rate of return which an assets earns during the period in which it holds the assets.
Holding Period Return = (Selling Price - Initial Price + Dividend ) / Initial Price
Holding Period Return = ($24 - $21 + $2.04 ) / $21 = 0.24 = 24%
Now we need to calculate the expected return on the stock using CAPM formula as follow
Expected return = Risk free rate + Beta ( Market Risk Premium )
Expected return = rf + beta ( E(rm) )
Placing values in the formula
Expected return = 8% + 1.2 ( 16% )
Expected return = 27.2%
Abnormal return is the difference of Holding period return and expected return
Abnormal return = 27.2% - 24% = 3.2%
The gross earnings of the factory workers for Oriole Company during the month of January are $72,000. Of the total accumulated cost of factory labor, 84% is related to direct labor and 16% is attributable to indirect labor.(a)Record the factory labor costs for the month of January.(b)Assign factory labor to production.
Answer:
a.
Wages Expense $72,000 (debit)
Wages Payable $72,000 (credit)
b.
Work In Process : Direct Labor $60,480 (debit)
Work In Process : Direct Labor $11,520 (debit)
Wages Payable $72,000 (credit)
Explanation:
The factory labor cost is a manufacturing cost and is included in product valuation.
(a)Record the factory labor costs
Here we have to recognize the expense incurred during the period and the liability since settlement of amount owing to workers has not yet been made
Wages Expense $72,000 (debit)
Wages Payable $72,000 (credit)
(b)Assign factory labor to production
Here we accumulate the cost to the Work In Process of manufacture taking not of cost classification.
Work In Process : Direct Labor $60,480 (debit)
Work In Process : Direct Labor $11,520 (debit)
Wages Payable $72,000 (credit)
An increase in savings by consumers is seen as a(n):_________.
a. decrease in investment spending in the economy increase in government spending in the economy.
b. decrease in exports in the economy.
c. increase in imports in the economy.
d. leakage in spending in the economy.
Answer:
d. leakage in spending in the economy.
Explanation:
In the economy firms spend money on labour, input, and business expansion. While in the personal household there is spending on food, rent, and other expenses.
When money is taken out of this cycle and not used for a particular purpose then it is considered to be a leakage.
Leakages include taxes savings and imports.
Savings occurs when an individual has excess income and decides to reserve some for a future use. This fund does not have a particular use in the economy so it is considered to be a leakage.
Answer:
D. Leakage in spending in the economy.
Explanation:
It is observed that if consumers have a rise in their wages, they tend to benefit and this helps the economic situation of the said country or nation as seen in some economies of the world lately. Also alteration in interest rates can have different consumer effects which ranges from spending habits depending on a number of factors to other habits that may end up boosting the economy also current rate levels, expected future rate changes, confidence of the consumer, and the overall health of the economy.
Nick’s Novelties, Inc., is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $592,000, have an fifteen-year useful life, and have a total salvage value of $59,200. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues $ 300,000 Less operating expenses: Commissions to amusement houses $ 70,000 Insurance 66,000 Depreciation 35,520 Maintenance 90,000 261,520 Net operating income $ 38,480
Required:
1a. Compute the pay back period associated with the new electronic games.
1b. Assume that Nick’s Novelties, Inc., will not purchase new games unless they provide a payback period of five years or less. Would the company purchase the new games?
No
Yes
2a. Compute the simple rate of return promised by the games. (Round your answer to 1 decimal place. i.e. 0.123 should be considered as 12.3%.)
2b. If the company requires a simple rate of return of at least 8%, will the games be purchased?
No
Yes
Answer and Explanation:
1a. The computation of the payback period is shown below:
Payback period = Initial investment ÷ Cash inflow
where,
Initial investment is $592,000
And, the cash flow is
= Depreciation expense + net operating income
= $35,520 + $38,480
= $74,000
So, the payback period is
= $592,000 ÷ $74,000
= 8 years
1b. As we can see that the payback period is of 8 years but the given payback period is 5 years so the company should not purchased the new games
2a. The computation of the simple rate of return is shown below:
Payback period = Net operating income ÷ Initial investment
= $38,480 ÷ $592,000
= 6.5%
2b. As we can see that the simple rate of return is 6.5% but the given simple rate of return is minimum 8% so the company should not purchased the new games
1a. The computation of the payback period is given below:
Payback period = Initial investment ÷ Cash inflow
Here,
Initial investment is $592,000
And, the cash flow is
= Depreciation expense + net operating income
= $35,520 + $38,480
= $74,000
Thus , the payback period is
= $592,000 ÷ $74,000
= 8 years
1b. Since the payback period is of 8 years but the given payback period is 5 years due to this the company should not purchased the new games.
2a. The calculation of the simple rate of return is given below:
Payback period = Net operating income ÷ Initial investment
= $38,480 ÷ $592,000
= 6.5%
2b. Since the simple rate of return is 6.5% but the given simple rate of return is minimum 8% due to this the company should not purchased the new games.
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Match the threats in the left column to appropriate control procedures in the right col-umn. More than one control may be applicable. Threat 1. Failing to take available purchase discounts for prompt payment Control Procedure a. Accept only deliveries for which an ap-proved purchase order exists. 2. Recording and posting errors in accounts payable 3. Paying for items not received 4. Kickbacks 5. Theft of inventory * Life-long learning opportunity: see p. xxx in preface. b. Document all transfers of inventory. c. Restrict physical access to inventory. d. File invoices by due date. e. Maintain a cash budget.
Answer: Please refer to Explanation
Explanation:
When there are no or relatively low control procedures in a company, there is a threat of financial mismanagement and misdemeanors. This is why control procedures are needed, to address this and stop the leakage of company resources.
1. Failing to take available purchase discounts for prompt payment.
d. File invoices by due date.
e. Maintain a cash budget.
Here two things can be done to control the threat. Firstly, by paying invoices during the discount period, the company can be able to take discounts on goods and services provided to it. Also by maintaining a cash budget, a company can put when a payment is due to be able to claim a discount and act accordingly.
2. Recording and posting errors in accounts payable.
Conduct an automated comparison of total change in cash to total changes in accounts payable.
Using a program to check whether the amounts in the cash account corresponds to the payments on the Accounts payable account will tell you if the amounts tally and will therefore reduce errors.
3. Paying for items not received.
Issue checks only for complete voucher packages (receiving report, supplier invoice, and purchase order).
When issuing checks, make sure that all the above mentioned reports are in order. That way you can check if the goods were delivered as well as if they were even ordered properly in the first place.
4. Kickbacks.
Require purchasing agents to disclose financial or personal interests in suppliers.
Train employees in how to properly respond to gifts or incentives offered by suppliers.
By requiring that purchase agents disclose their relationships with suppliers, you can monitor to check and see if there is a possibility of kickbacks occuring.
Also, by training employees on acceptable methods of receiving gifts, they can know when it is no longer a gift but rather a kickback.
5. Theft of inventory.
b. Document all transfers of inventory. c. Restrict physical access to inventory.
By documenting all transfers going in and out of inventory, the true inventory figure can be known from the records and then used to match with the actual inventory to see if they truly tally.
Restricting the amount of people who have access to the inventory to a few trusted people also limits the amount of people who can steal the inventory as well as making it easier to find out who did when it is done because the focus can be on a few people.
MFG Manufacturing sells a product for $40 per unit. The production cost of the product is $21 per unit: direct materials of $8, direct labor of $7, variable overhead of $4 and fixed overhead of $2. The fixed overhead per unit comes from dividing $500,000 of fixed factory overhead by 250,000 units produced. In addition, MFG pays $3 for shipping each unit sold. Finally, MFG has fixed costs outside the factory (such as office building depreciation and salaries) that total $200,000 per year. Assuming breakeven in units was correctly computed to be 20,000 units, breakeven in dollars is:
Answer:
Break-even sales =$800,000
Explanation:
The break-even sales is the amount of revenue that a business must generate that would equate its total costs to total revenue. At the break even sales, the contribution is exactly to total iced cost, and the business makes no profit or loss
Break-even (units) = Total general fixed cost /(selling price- variable cost)
Break-even sales = Break-even (in units) × Selling price
Break-even sales = 20,000 × $40 =$800,000
Break-even sales=$800,000
Bill Casler bought a $2000, 9-month certificate of deposit (CD) that would earn 8% annual simple interest. Three months before the CD was due to mature, Bill needed his CD money, so a friend agreed to lend him money and receive the value of the CD when it matured.
Required:
a. What is the value of the CD when it matures?
b. If their agreement allowed the friend to earn a 10% annual simple interest return on his loan to Bill, how much did Bill receive from his friend
Answer:
a. What is the value of the CD when it matures?
$2,120b. If their agreement allowed the friend to earn a 10% annual simple interest return on his loan to Bill, how much did Bill receive from his friend?
$2,068.29Explanation:
interests earned by the CD = $2,000 x 8% x 9/12 = $120
the value of the CD at maturity = $2,000 (principal) + $120 (interests) = $2,120
if the friend wanted to earn 10% on the loan, that is equivalent to 10% x 3/12 = 2.5% for the 3 months
the amount of money received by Bill from his friend = CD's maturity value / (1 + expected interest) = $2,120 / (1 + 2.5%) = $2,120 / 1.025 = $2,068.29
Cost of goods manufactured equals $55,000 for 2020. Finished goods inventory is $2,000 at the beginning of the year and $5,500 at the end of the year. Beginning and ending work in process for 2020 are $4,000 and $5,000, respectively. How much is cost of goods sold for the year?
Answer:
$51,500
Explanation:
The computation of the cost of goods sold for the year is shown below:
As we know that
Cost of Goods Sold = Beginning balance of Finished Goods Inventory + Cost of Goods Manufactured – Ending balance of Finished Goods Inventory
= $2,000 + $55,000 - $5,500
= $51,500
We simply applied the cost of goods sold formula by taking the three items into the computation part
In contemporary Japanese society, a group is associated with:______
a. the immediate family.
b. gender roles.
c. traditional friendships.
d. the company a person works for.
e. the educational environment.
Answer:
d. the company a person works for.
Explanation:
In contemporary Japanese society, a group is associated with the company a person works for.
A group typically comprises of two or more people who share some things in common such as identity, aims, interest and are willing to work in an accord.
Hence, the company or organization an individual works for, is usually considered to be a group in the contemporary Japanese society.
This is so because employees are blinded by a common goal, aim, interest to allow them work effortlessly, effectively and efficiently together.
In contemporary Japanese society, a group is associated with the company a person works for.
Japanese culture is known for its principle of working together as a group. Japan is known to be collectivistic nation as they focus on what is good for the group instead of the individual.
In Japanese society, there is self-employment in agriculture and business as well as low-income and unpaid family workers who work together in afamily like manner.
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The following events occurred for Favata Company:_________
a. Received $16,500 cash from owners and issued stock to them.
b. Borrowed $13,500 cash from a bank and signed a note due later this year.
c. Bought and received $1,450 of equipment on account.
d. Purchased land for $25,000; paid $2,300 in cash and signed a long-term note for $22,700.
e. Purchased $9,500 of equipment, paid $2,300 in cash and charged the rest on account.
Required:
For each of the events in above, prepare journal entries. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Answer:
a.
Cash 16500 Dr
Common Stock 16500 Cr
b.
Cash 13500 Dr
Notes Payable 13500 Cr
c.
Equipment account 1450 Dr
Accounts Payable 1450 Cr
d.
Land 25000 Dr
Cash 2300 Cr
Notes Payable 22700 Cr
e.
Equipment account 9500 Dr
Cash 2300 Cr
Accounts Payable 7200 Cr
Explanation:
a.
The issuance of common stock against cash will increase the cash and the capital. So cash will be debited and capital (common stock) will be credited.
b.
The issuance of notes payable against cash increases liability and asset. The asset increase in cash will be debited and liability increase in notes payable will be credited.
c.
The purchase of equipment on account will increase liability and asset. The asset increase in form of equipment will be debited and the liability increase in form of accounts payable will be credited.
d.
The purchase of land will increase land and result in a debit to the land account. It is purchased for cash and a liability of notes payable. So both cash and the notes payable account will be credited as cash decreases (asset decrease in credited) and liability increases (liability increase is credited).
e.
The purchase of equipment will increase equipment account and result in a debit to the equipment account. It is purchased for cash and a liability of accounts payable. So both cash and the accounts payable account will be credited as cash decreases (asset decrease in credited) and liability increases (liability increase is credited).
Suppose Nike's managers were considering expanding into producing sports beverages. Why might the company decide to do this under the Nike brand name? The cost of producing sports beverages along with its current products under the Nike brand name is less than the cost of producing sports beverages under a new brand name plus the cost of producing Nike's current products under the Nike brand name. The cost of producing sports beverages along with its current products under the Nike brand name is greater than the cost of producing sports beverages separately under a new brand name plus the cost of producing Nike's current products under the Nike brand name.
Answer:
Te correct answer is the first option: The cost of producing sports beverages along with its current products under the Nike brand name is less than the cost of producing sports beverages under a new brand name plus the cost of producing Nike's current products under the Nike brand name
Explanation:
To begin with, the fact that the managers are looking forward to expand the business and to aggregate sports beverages indicates that the company is doing good in the sales and therefore they have margin to invest in a plan like that. Secondly, the fact that they do it under Nike's name will cost them less than doing it otherwise due the fact that they will not have to pay for a new name and all the registrations and patents that the strategy involves. They will only need to register the new product and even more they would have all the marketing campaign focus on the same audience and will find strength in using the brand and name of Nike for that, in terms of publicity.
Wildhorse Taxi Service uses the units-of-activity method in computing depreciation on its taxicabs. Each cab is expected to be driven 144,000 miles. Taxi 10 cost $29,000 and is expected to have a salvage value of $200. Taxi 10 was driven 31,000 miles in 2021 and 33,500 miles in 2022. Determine the depreciation cost.
Answer:
Depreciation expense/cost
For 2021 = $6200
For 2022 = $6700
Explanation:
Depreciation expense is the systematic allocation of an asset's cost over its estimated useful life. The depreciation expense is calculated using various methods. The units of activity method charges a depreciation based on the usage of the asset in a particular period as a proportion to its estimated useful life calculated in the form of total usage expected.
The formula for units of activity depreciation per period is,
Depreciation expense = [(Cost - Salvage value) / Total estimated life time activity of the asset] * Activity performed during the period
Depreciation expense-Taxi 10:
For 2021 = [(29000 - 200) / 144000] * 31000 = $6200
For 2022 = [(29000 - 200) / 144000] * 33500 = $6700
A mail-order house uses 18,000 boxes a year. Carrying costs are 60 cents per box a year, and ordering costs are $96. The following price schedule applies. Determine: a. The optimal order quantity. b. The number of orders per year.
Answer:
Hie, the price schedule is missing from your question however the important principles are explained below.
a. The optimal order quantity
Optimum order quantity is the order level that results in minimum ordering costs and holding costs.
Optimum order quantity = √ (2 × Annual Demand × Cost per order) / holding cost per unit
b. The number of orders per year.
orders per year = Annual Demand / optimal order quantity
This calculates the number of orders to be placed during the year at the optimum order quantity.
Swiss Group reports net income of $26,000 for 2017. At the beginning of 2017, Swiss Group had $184,000 in assets. By the end of 2017, assets had grown to $234,000. What is Swiss Group's 2017 return on assets?
Answer:
12.44%
Explanation:
The computation of the return on assets is shown below:
As we know that
Return on asset = Net income ÷ Average of total asset
= ($26,000) ÷ ($184,000 + $234,000) ÷ 2
= ($26,000) ÷ ($209,000)
= 12.44%
We simply applied the above formula so that the return on assets could be determined
Therefore we considered all the information given in the question
Answer:
12.44
Explanation:
