Define each of the following investment rules and discuss any potential shortcomings of each. In your definition, state the criterion for accepting or rejecting independent projects under each rule. a. Payback period. b. Average accounting return. c. Internal rate of return. d. Profitability index. e. Net present value

Answers

Answer 1

internal rate of return


Related Questions

You have just made your first $5,837 contribution to your retirement account. Assume you earn a return of 9.8 percent per year and make no additional contributions. What will your account be worth when you retire in 45 years

Answers

25,741.17
because you multiply 0.098x5,837x45! hope this helps!

(Can you explain to me how do you find the Unit sales after launch of $85,000)
Example 1: Erosion Costs
Frosty Desserts currently sell 100,000 of its Strawberry Shortcake Delight (SSD) each year for $3.50 per serving
Its cost per serving is $1.75
Its chef has come up with a newer, richer concoction, "Extra Creamy Strawberry Wonder (ESW), which costs $2.00 per serving, will retail for $4.50 and should bring in 130,000 customers
It is estimated that after the launch, the sales for the original variety will drop by 15%
Estimate the erosion cost associated with this venture

Answers

Answer:

$26,250

Explanation:

Current units sold = 100,000 units

Drop in units after launch = 15%

Units to be sold after launch = 100,000 units - (100,000 units*15%)

Units to be sold after launch = 100,000 units - 15,000 units

Units to be sold after launch = 85,000 units

Erosion cost = (Unit sales of SSD before launch - Unit sales after launch) * (Selling price - Unit cost)

Erosion cost = (100,000 - 85,000) * ($3.50 - $1.75)

Erosion cost = 15,000 * $1.75

Erosion cost = $26,250

So, the estimated erosion cost associated with this venture is $26,250.

Entry for Jobs Completed; Cost of Unfinished Jobs
The following account appears in the ledger prior to recognizing the jobs completed in August:
Work in Process
Balance, August 1 $8,920
Direct materials 72,520
Direct labor 78,230
Factory overhead 41,120
Jobs finished during August are summarized as follows:
Job 210 $36,140
Job 216 22,090
Job 224 42,170
Job 230 78,310
a. Journalize the entry to record the jobs completed.
b. Determine the cost of the unfinished jobs at August 31.
$

Answers

Answer:

a. Journal Entry to record the jobs completed:

Debit Finished Goods Inventory $178,710

Credit Work in Process $178,710

To record the jobs completed.

b. The cost of the unfinished jobs at August 31 is:

= $23,080

Explanation:

a) Data and Analysis:

Work in Process

Account Titles        Debit      Credit

Balance, August 1  $8,920

Direct materials     72,520

Direct labor            78,230

Factory overhead   41,120

Finished goods inventory   $178,710

Balance (unfinished jobs)     23,080

Total                  $201,790 $201,790

Jobs finished during August are summarized as follows:

Job 210  $36,140

Job 216   22,090

Job 224   42,170

Job 230   78,310

Total     $178,710

a. Journal Entry Analysis to record the jobs completed:

Finished Goods Inventory $178,710 Work in Process $178,710

b. The cost of the unfinished jobs at August 31 is:

= Total of work in process Minus Finished Goods

= $201,790 - $178,710

= $23,080

Which type of fiscal policy takes longer to affect the economy: demand-side or supply-side?
A.)supply-side
B.)demand-side and supply-side policies take an equal amount of time
C.)demand-side

Answers

Answer:

A.) supply-side

Explanation:

Fiscal policy in economics refers to the use of government expenditures (spending) and revenues (taxation) in order to influence macroeconomic conditions such as Aggregate Demand (AD), inflation, and employment within a country. Fiscal policy is in relation to the Keynesian macroeconomic theory by John Maynard Keynes.

A fiscal policy affects combined demand through changes in government policies, spending and taxation which eventually impacts employment and standard of living plus consumer spending and investment.

A supply-side economist can be defined as economists who believes that the ability and willingness of the producers of goods and services to manufacture or produce sets the pace for the economic growth of a country.

This ultimately implies that, increasing the supply of goods and services would cause an economic growth for a country.

Hence, a supply-side fiscal policy is typically designed to create an outward shift in the production possibilities curve (PPC) and shift the aggregate supply (AS) curve to the left.

Generally, a supply-side fiscal policy takes a longer period of time to affect the economy of a country.

Andrews Corporation has income from operations of $240,000. In addition, it received interest income of $24,000 and received dividend income of $29,500 from another corporation. Finally, it paid $11,800 of interest income to its bondholders and paid $45,000 of dividends to its common stockholders. The firm's federal tax rate is 21%. What is the firm's federal income tax

Answers

Answer: $54,820.50

Explanation:

Federal income tax = Taxable income * tax rate

Taxable income = Income from operations + Interest income received + Dividend income received - Interest income paid

= 240,000 + 24,000 + (30% * 29,500) - 11,800

= $261,050

Federal income tax = 261,050 * 21%

= $54,820.50

Note: Only 30% of Dividends received are taxable

Outsourcing is the: Group of answer choices use of computers to obtain value-creating data from the Internet. selling of a value-creating activity to other firms. spinning off of a value-creating activity to create a new firm. purchase of a value-creating activity from an external supplier.

Answers

Answer: purchase of a value-creating activity from an external supplier.

Explanation:

Outsourcing refers to the business practice whereby a company hires the service of another party for the creation of goods and the rendering of services which were done traditionally by the employees of the company.

Outsourcing is the purchase of a value-creating activity from an external supplier. It's usually done by.conoanues in order to reduce cost or focus on more important parts of producttion.

Which statement does not describe a difference between government and household budgets? In the short term, economists would expect the budget deficits and surpluses to fluctuate up and down with the economy and the automatic stabilizers. Most economists view the proposals for a perpetually balanced budget with bemusement. Most economists agree with the proposals for a perpetually balanced budget. Economic recessions should automatically lead to larger budget deficits or smaller budget surpluses, while economic booms lead to smaller deficits or larger surpluses.

Answers

Answer:

Most economists view the proposals for a perpetually balanced budget with bemusement

Explanation:

A balanced budget is a budget where at the end of every year, revenue must equal expenditure. this type of budget can magnify the business cycle. This types of budget contrasts with a cyclically balanced budget

A Cyclically balanced budget is when in a recession, the government makes use of expansionary fiscal policy and in a boom, the government makes use of a contractionary fiscal policy to stabilise the economy. So, in a recession, deficits would be higher and in an expansion, surplus would be higher.

Government sector deficit occurs when government spending exceeds income of the government.

When deficit increases, debt increases. This is because a deficit would need to be funded by additional borrowing

When there is a surplus, government spending is less than the income of the government.

During its first year of business, XYZ Inc. purchased $1,600 of supplies. By the end of
the year, only $500 of supplies remain in the supply cabinet. Determine the amount to be
reported in the Supplies account in the Adjusted Trial Balance section of the worksheet
prepared on December 31.

Answers

Answer:

$500

Explanation:

Since adjusted trial balance is often prepared at the end of an accounting period in which based on the information given the supplies in inventory is on the last day of the accounting period in which only the amount of $500 of supplies was remaining in the supply cabinet, therefore the amount to be

reported in the SUPPLIES ACCOUNT in the Adjusted Trial Balance section of the worksheet

prepared on December 31 will be $500 of supplies remaining in the supply cabinet.

The descriptive term used to explain how people, businesses, and countries around the world are more interdependent because of the changes in forces like transportation, media, technology, and global finance is ________.

Answers

Answer:

Globalization

Explanation:

Globalization can be regarded as process which involves integration as well as interaction of people across the globe as well as companies and governments across the world. Globalization has improved as result of advances in transportation as well as communication technology which makes the to come together.

It should be noted that Globalization explained how people, businesses, and countries around the world are more interdependent because of the changes in forces like transportation, media, technology, and global finance.

A single commercial bank must meet a 25 percent reserve requirement. If the bank has no excess reserves initially and $5,000 of cash is deposited in the bank, it can increase its loans by a maximum of Group of answer choices $5,000. $1,250. $120,000. $3,750.

Answers

Answer:

$3,750

Explanation:

Calculation to determine what it can increase its loans by

Using this formula

Loan increase=Excess reserves-(Reserve requirement percentage* Excess reserves)

Let plug in the formula

Loan increase=$5000-($25%*$5000)

Loan increase=$5,000-$1,250

Loan increase=3,750

Therefore it can increase its loans by a maximum of $3,750

Suppose that a company has the following accounts receivable collection pattern: Paid in the month of sale 25% Paid in the month following sale 75% All sales are on credit. If credit sales for January and February are $250,000 and $120,000 respectively, the cash collection for February is:

Answers

Answer: $152,500

Explanation:

The cash collection for February would be:

25% of the sales in January as 25% are collected in the following months 75% of February credit sales as 75% are collected in the month of sale

= (25% * 250,000) + (75% * 120,000)

= 62,500 + 90,000

= $152,500

Each employee takes two 8 minute rest breaks and one 25 lunch break each shift. The company has 2 shifts per work day each with 4 employees. Compute the takt time if the company is planning to produce 1325 JU-4s.

Answers

Answer:

The appropriate answer is "[tex]0.657 \ mins/JU-4s[/tex]".

Explanation:

Given:

Demand,

= 1325 JU-4s

1 day = 2 shifts

Assuming a shift is of 8 hours duration.

then,

[tex]1 \ shift = (8\times 60)-(20+25)[/tex]

           [tex]=480-45[/tex]

           [tex]=435 \ mins[/tex]

Total day mins,

= [tex]435\times 2[/tex]

= [tex]870 \ mins[/tex]

hence,

The average throughput rate will be:

= [tex]\frac{870 \ mins}{1325 \ JU-4s}[/tex]

= [tex]0.657 \ mins/JU-4s[/tex]

what are the first steps to start business

Answers

Answer:

finding a market for your product then finding a marketing strategy then get your assets set up

Explanation:

Perteet Corporation's relevant range of activity is 5,100 units to 10,500 units. When it produces and sells 7,800 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $6.80 Direct labor $3.45 Variable manufacturing overhead $1.90 Fixed manufacturing overhead $3.80 Fixed selling expense $0.65 Fixed administrative expense $0.35 Sales commissions $0.45 Variable administrative expense $0.50 If 5,400 units are produced, the total amount of manufacturing overhead cost is closest to:

Answers

Answer:

Total overhead= $39,900

Explanation:

Giving the following information:

Variable manufacturing overhead $1.90

First, we need to calculate the total fixed overhead:

Total fixed overhead= 7,800*3.8

Total fixed overhead= $29,640

Now, the total overhead for 5,400 units:

Total variable overhead= 1.9*5,400= 10,260

Total fixed overhead= 29,640

Total overhead= $39,900

Each firm embraces objectives that management believes will make the firm more successful.

a. True
b. False

Answers

Answer:

a. True

Explanation:

Organizational objectives and goals are defined by strategic planning, which is a document that contains the organizational mission and values, as well as the action plans that the company must implement over a period of time to achieve its objectives and goals and be a profitable company and competitive in the market.

Therefore, the administration of each company will define what are its market objectives that will make it more successful and positioned in the long term.

The following data are given for Stringer Company: Budgeted production 929 units Actual production 1,031 units Materials: Standard price per ounce $1.80 Standard ounces per completed unit 11 Actual ounces purchased and used in production 11,681 Actual price paid for materials $23,946 Labor: Standard hourly labor rate $14.47 per hour Standard hours allowed per completed unit 4.1 Actual labor hours worked 5,309.65 Actual total labor costs $80,972 Overhead: Actual and budgeted fixed overhead $1,040,000 Standard variable overhead rate $27.00 per standard labor hour Actual variable overhead costs $148,670 Overhead is applied on standard labor hours. Round your intermediate calculations and final answer to the nearest cent. The direct materials price variance is a.$2,920.25 favorable b.$7,300.62 unfavorable c.$7,300.62 favorable d.$2,920.25 unfavorable

Answers

Answer:

d.$2,920.25 unfavorable

Explanation:

Actual purchase price = Actual price paid for material / Actual ounces purchased and used in production

Actual purchase price = $23,946 / 11,681

Actual purchase price = $2.05

Direct materials price variance = Actual ounces purchased and used in production * (Actual purchase price - Standard price per ounce

Direct materials price variance = 11,681 * ($2.05 - $1.80)

Direct materials price variance = 11,681 * $0.25

Direct materials price variance = $2,920.25 Unfavorable

Petty Cash Record and Journal Entries On May 1, a petty cash fund was established for $137.50. The following vouchers were issued during May: Date Voucher No. Amount $ 3.40 13.00 5 3 auto repair (miscellaneous) 40.00 23.00 8.00 24.00 3.10 4.00 18.00 Purpose May 1 1 postage due 3 2 office supplies 7 4 drawing (Joy Adams) 11 5 donation (Red Cross) 15 6 travel expenses 22 7 postage stamps 26 8 phone call 30 9 donation (Boy Scouts)
Required:
1. Prepare the journal entry to establish the petty cash fund. If an amount box does not require an entry, leave it blank. .
2. Record the vouchers in the petty cash record. Total each column to determine the balance before replenishing the petty cash fund. When equired, enter amounts in dollars and cents
3. Prepare the journal entry to replenish the petty cash fund. Then record the amount in the petty cash record in part 2. If an amount box does not ire an entry, leave it blank.

Answers

Answer:

1. Dr Petty cash $137.50

Cr Cash $137.50

2. Dr Postage due $ 3.40

Dr Office supplies $13.00

Dr Auto repair (miscellaneous) $40.00

Dr Drawing (Joy Adams) $23.00

Dr Donation (Red Cross) $8.00

Dr Travel expenses $24.00

Dr Postage stamps $3.10

Dr Phone call $4.00

Dr Donation (Boy Scouts) 18.00

Cr Cash $136.50(

3. Dr Petty cash $1.00

Cr Cash $1.00

Explanation:

1. Preparation of the journal entry to establish the petty cash fund.

Dr Petty cash $137.50

Cr Cash $137.50

(Being to establish the petty cash fund)

2. Preparation of the journal entry to Record the vouchers in the petty cash record. .

Dr Postage due $ 3.40

Dr Office supplies $13.00

Dr Auto repair (miscellaneous) $40.00

Dr Drawing (Joy Adams) $23.00

Dr Donation (Red Cross) $8.00

Dr Travel expenses $24.00

Dr Postage stamps $3.10

Dr Phone call $4.00

Dr Donation (Boy Scouts) 18.00

Cr Cash $136.50

($3.40+$13+$40+$23+$8+$24+$3.10+$4+$18)

(Being to Record the vouchers in the petty cash record)

3. Preparation of the journal entry to replenish the petty cash fund.

Dr Petty cash $1.00

Cr Cash $1.00

($137.50-$136.50)

(Being to replenish the petty cash fund)

An oligopolistic market structure is distinguished by several characteristics, one of which is either similar or identical products. Which of the following are other characteristics of this market structure?

a. Market control by many small firms
b. Difficult entry
c. Mutual interdependence
d. Market control by a few large firms
e. Mutual dependence

Answers

Answer:

The correct option is d. Market control by a few large firms.

Explanation:

An oligopolistic market structure can be described as a market structure in which there is a small number of large firms, and none of the large firms can prevent the other large firms in the market from wielding great power.

An oligopolistic market structure is there a market that is dominated and controlled by by a few large firms.

Therefore, the correct option is d. Market control by a few large firms.

Under absorption costing, which of the following costs would not be included in finished goods inventory? a.overtime wages paid to factory workers b.the salaries for salespeople c.hourly wages of assembly worker d.straight-line depreciation on factory equipment

Answers

Answer:

b.the salaries for salespeople

Explanation:

Absorption costing is the method of costing that tries to itemise all factors that are used in manufacturing a product. These include direct materials, direct labour, and overhead.

However there is no provision for items under contributing margin (that is costs that are derived from sales revenue). Such costs can include salaries of sales people that are taken out of sales revenue.

Other items such as overtime wages paid to factory workers, hourly wages of assembly worker, and straight-line depreciation on factory equipment are all included in absorption costing

Cameron is single and has taxable income of $58,046.

Required:
Determine his tax liability using the Tax Tables and using the Tax Rate Schedules.

Answers

Answer:

Cameron

Cameron's tax liability for the year as a single taxpayer is

= $12,770.12.

Explanation:

a) Data and Calculations:

Taxable income = $58,046

Tax rate = 22%

Tax liability = $12,770.12 ($58,046 * 22%)

b) The amount of tax that Cameron, who is within the 22% tax rate bracket, will pay to the IRS is $12,770.12.  The tax liability represents the amount of tax that is due to be paid for his taxable income of $58,046 at the tax rate of 22%.

eBook
Show Me How
Units
1
Cost Flow Methods
The following three identical units of Item LO3V are purchased during April:
Item Beta
Cost
April 2
Purchase
$270
April 15
Purchase
272
April 20
Purchase
Total
$816
Average cost per unit
($816 + 3 units)
Assume that one unit is sold on April 27 for $345. Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIFO); (b)
last-in, first-out (LIFO); and (c) weighted average cost method.
1
1
274
3
$272
Gross Profit
Ending Inventory
a. First-In, first-out (FIFO)
b. Last-in, first-out (LIFO)
c. Weighted average cost

Answers

Answer:

Cost Flow Methods

Gross profit and ending inventory on April 30 using:

                                                          Gross Profit     Ending Inventory

(a) first-in, first-out (FIFO)                     $75                   $546

(b) last-in, first-out (LIFO)                       $71                   $542

(c) weighted average cost method     $73                   $544

Explanation:

a) Data and Calculations:

Item Beta   Cost

April 2  Purchase   $270

April 15  Purchase   272

April 20  Purchase 274

Total                      $816

Average cost per unit = $272  ($816/ 3 units)

Assume that one unit is sold on April 27 for $345

Gross profit and ending inventory on April 30 using:

                                                          Gross Profit            Ending Inventory

(a) first-in, first-out (FIFO)                 $75 ($345 - $270)  $546 ($816 - $270)

(b) last-in, first-out (LIFO)                   $71 ($345 - $274)   $542 ($816 - $274)

(c) weighted average cost method $73 ($345 - $272)  $544 ($816 - $272)

Ending inventory = Cost of goods available for sale Minus Cost of goods sold

Gross profit = Sales Minus Cost of goods sold

Identify a new product that is based on an innovation in technology, and draw up a strategic technical plan for its development. Be sure to discuss the risk factors at each stage, and indicate how you would deal with each.

Answers

"An electric car" is a new product that depends upon technological innovation.

Its progress is guided by a strategic technology plan:

The production of new ideas:

The lithium-ion battery throughout the electric vehicle will provide the energy needed to run its engine. Installation of the battery would ensure it can do all the functions which the consumer would expect from a typical vehicle.

The idea is evaluated:

The lithium-ion battery-powered electric car ought to be able to equal the speed of a gasoline or diesel-powered vehicle.

Analysis of the business environment:

Due to its reduced mileage, such a car would be perfect for customers who are unable to pay the rising cost of oil for the vehicles. Thus, electric vehicles would've been ideal to clients with fundamental part from middle income to high class. Its car would attract a huge number of customers, as consumers are looking for vehicles that may help them save cash on gasoline prices.

Development:

The fuel or diesel cylinder and batteries would be fitted in the car's bonnet. The rest of the car assembly process will proceed normally usual.

Commercialization:

Customers will be able to buy cars through a countrywide dealer network.The car's battery plays a significant role in each step of the process. Whereas if a car's batteries run out while it was on the road, it could be recharged using another energy source. During a crisis, solar plates will absorb the sun and power a battery. As a result, the vehicle will keep running smoothly.

Learn more:

brainly.com/question/17578700

. If it outsources the navigation system, fixed costs could be reduced by half, and the vacant facilities could be rented out to earn $2000 per month of rental income. What is the maximum contract cost that Fruit Boat Company should pay for outsourcing

Answers

Answer: $2,425

Explanation:

Fruit Boat should not pay more for the contract than they would if they were producing the good themselves.

= Variable cost + Avoidable fixed costs + Opportunity cost per month

Avoidable fixed cost = (39,000 / 2) / 10 boats = 19,500 / 10 = $1,950

Opportunity cost per month = 2,000 / 10 boats

= $200

Contract price = 275 + 1,950 + 200

= $2,425

The finished goods inventory on hand on December 31, 2018 was 21,000 units. It is the company's policy to maintain a finished goods inventory at the end of each quarter equal to 20% of the next quarter's anticipated sales. Prepare a production budget for 2019.

Answers

Question Completion:

Benet Company has budgeted the following unit sales for 2019 and 2020:

                        Quarter 1   Quarter 2   Quarter 3   Quarter 4   Quarter 1

Sales units       105,000       60,000       75,000      120,000      90,000

Answer:

Benet Company

Production Budget for 20198:

                               Quarter 1   Quarter 2  Quarter 3   Quarter 4

Sales units               105,000       60,000      75,000      120,000

Ending inventory       12,000        15,000      24,000        18,000

Units available for

sale                          117,000       75,000      99,000      138,000

Beginning inventory 21,000        12,000       15,000       24,000

Production               96,000       63,000       84,000      114,000

Explanation:

a) Data and Calculations:

Budgeted unit sales for 2019 and 2020:

                               Quarter 1   Quarter 2  Quarter 3   Quarter 4   Quarter 1

Sales units               105,000       60,000      75,000      120,000     90,000

Ending inventory       12,000        15,000      24,000        18,000

Units available for

sale                          117,000       75,000      99,000      138,000

Beginning inventory 21,000        12,000       15,000       24,000      18,000

Production               96,000       63,000       84,000      114,000

​Crawley, Inc. has a line of credit with HNC Bank that allows the company to borrow up to​ $800,000 at an interest rate of 12 percent.​ However, Crawley, Inc. must keep a compensating balance of 18 percent of any amount borrowed on deposit at the bank.​ Crawley, Inc. does not normally keep a cash balance account with HNC Bank. What is the effective annual cost of​ credit?

Answers

Answer: 14.63%

Explanation:

Based on the information given in the question, the effective annual cost of​ credit will be calculated as:

Effective annual cost of credit = [Interest rate/ (100 - Deposit Rate)] x 100

= [12 /(100 - 18)] x 100

= (12 / 82) × 100

= 0.1463 × 100

= 14.63%

The effective annual cost of​ credit is 14.63%.

While approaching a group of colleagues, Patrice overheard what she believed were inappropriate comments about another team member's physical attributes. Patrice mentioned the comments to her manager and indicated she was uncomfortable with colleagues speaking in that way in the workplace. As her manager, how should you respond

Answers

Answer:

The question is incomplete, the options are missing. The options are the following:

a) Suggest to Patrice that spreading negative information learned from eavesdropping is not healthy for the workplace.

b) Thank Patrice for speaking up and forward the item to a neutral third party for handling.

c) Immediately fire the team members who made the comments.

d) Contact the team member who was the subject of the comments to see if he or she was offended.

e) Thank Patrice for her input, but based on the harmlessness of the situation, take no further action.

And the correct answer is the option B: Thank Patrice for speaking up and forward the item to a neutral third party for handling.

Explanation:

To begin with, these kind of situations are most common than expected in the workplace so that is why that nowadays exist a lot of seminars about certain subjects that involves the behavior in the organization and furthermore there is the regular action of the Human Resources Department that takes cares of all the penalties and the solutions when it comes to subjects regarding the employees of the business and their relationship both with each other and with the company. So the correct way to act in this scenario would be to thank Patrice and tell her that the manager would inform to the Human Resources Department about it, being this last one a third party in the situation itself.

A beautiful bridge is being built over the river that runs through a major city in your state. The cost of the bridge is estimated at $600 million. Annual costs of the bridge will be $200,000, and the bridge is estimated to last a very long time. If accountants in city hall use 3% as the interest rate for analysis, what is the annualized cost of the bridge project

Answers

Answer:

$18.20 million

Explanation:

Net present value = Initial cost + (Annual cost/3%)

Net present value = $600 million + $200,000/3%

Net present value = $600 million + $6.67 million

Net present value = $606.67 million

Annualized cost = Net present value * 3%

Annualized cost = $606.67 million * 3%

Annualized cost = $18.20 million

So, the annualized cost of the bridge project is $18.20 million.

Coronado, Inc. reported net income of $2.95 million in 2022. Depreciation for the year was $188,800, accounts receivable decreased $413,000, and accounts payable decreased $330,400. Compute net cash provided by operating activities using the indirect method

Answers

Answer:

Net cash provided by operating activities $3,221,400

Explanation:

The computation of the  net cash provided by operating activities using the indirect method is given below

cash provided by operating activities

Net income $2,950,000

Add: depreciation $188,800

Add: decrease in account receivable $413,000

Less: decrease in account payable -$330,400

Net cash provided by operating activities $3,221,400

Philadelphia Company has the following information for March: Sales $450,000 Variable cost of goods sold 240,000 Fixed manufacturing costs 70,000 Variable selling and administrative expenses 52,000 Fixed selling and administrating expenses 35,000 Determine the March: a. Manufacturing margin $fill in the blank 1 b. Contribution margin $fill in the blank 2 c. Operating income for Philadelphia Company $fill in the blank 3

Answers

Answer:

a.$210,000

b. $158,000

c. $53,000

Explanation:

Calculation to determine the March (a) manufacturing margin, (b) contribution margin, and (c) income from operations for Philadelphia Company.

A)Calculation to determine the March manufacturing margin

Using this formula

Manufacturing Margin =(Sales – Cost of Goods Sold)

Let plug in the formula

Manufacturing Margin=450,000 – 240,000

Manufacturing Margin= $210,000

(B)Calculation to determine contribution margin,

Using this formula

Contribution Margin =(Gross Manufacturing Margin – Variable Expenses)

Let plug in the formula

Contribution Margin=210,000 – 52,000

Contribution Margin= 158,000

(C)Calculation to determine the March income from operations for Philadelphia Company

Using this formula

Income from Operations= (Sales – All expenses)

Let plug in the formula

Income from Operations= 450,000 – 397,000

Income from Operations = 53,000

Therefore the March (a) manufacturing margin, (b) contribution margin, and (c) income from operations for Philadelphia Company are:

a.$210,000

b. $158,000

c. $53,000

Happy Giraffe has preferred stock that pays a dividend of $9.00 per share and sells for $100 per share. It is considering issuing new shares of preferred stock. These new shares incur an underwriting (or flotation) cost of 2.10%.

Required:
a. How much will Happy Giraffe pay to the underwriter on a per-share basis?
b. After it pays its underwriter, how much will Happy Giraffe receive from each share of preferred stock that it issues?

Answers

Answer:

a. $2.10b. $97.90

Explanation:

a. Underwriter fees per share:

= Selling price of share * Underwriting cost

= 100 * 2.10%

= $2.10

b. Amount received per share:

= Selling price per share - underwriting fees per share

= 100 - 2.10

= $97.90

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