Lily wants to build a business. She has very little capital. She does, however, have a partner with which she could run a business. Lily wants to be able to avoid being held personally liable for any problems the business has. Which of the following would lead Lily to choose a sole proprietorship organization for her business?

a. Possession of a partner
b. Little capital
c. Avoidance of personal liability
d. None of the above

Answer:

Instructions are below.

Explanation:

Giving the following information:

Estimated machine-hours= 157,000

Estimated fixed manufacturing overhead= $650,000

Variable manufacturing overhead cost per machine-hour $4.40

First, we need to calculate the predetermined overehad rate:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= (650,000/157,000) + 4.4

Predetermined manufacturing overhead rate= $8.54 per machine-hour

Job 400:

Direct materials $320

Direct labor cost $230

Machine-hours used 37

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated overhead= 8.54*37= $315.98

Finally, we need to determine the unitary cost for Job 400:

Total cost= 320 + 230 + 315.98= $865.98

Unitary cost= 865.98/50= $17.32

Answer:

a. How much is the​ firm's net working​ capital?

net working capital = current assets - current liabilities = (cash + accounts receivable + inventory) - (accounts payable + short term notes payable) = ($16,540 + $9,580 + $6,450) - ($4,770 + $600) = $27,200

b. Complete an income statement and a balance sheet for Belmond.

                        Belmond Inc.

                   Income Statement

   For the Year Ended December 31, 202x

Sales                                                             $12,830

Cost of goods sold                                     ($5,790)

Gross Profit                                                      $7,040

Operating Expenses                                     ($1,330)

General and Administrative Expense                ($870)

Interest Expense                                               ($920)

Depreciation Expense                                       ($540)

Operating Income                                              $3,380

Taxes                                                             ($1,460)

Net Income                                                         $1,920

                        Belmond Inc.

                      Balance Sheet

   For the Year Ended December 31, 202x

ASSETS

Cash                                $16,540

Accounts Receivable         $9,580

Inventory                         $6,450

Building and Equipment      $122,110

Accumulated Dep.              ($34,370)

TOTAL ASSETS               $120,310

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts Payable                 $4,770

Short-Term Notes Payable   $600

Long-Term Debt              $55,230

Common Stock              $44,900

Retained Earnings                $14,810

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $120,310

c. If you were asked to respond to parts ​(a​) and ​(b​) as part of a training​ exercise, what could you tell your boss about the​ company's financial condition based on your​ answers?"

The financial condition of the company can be considered healthy, since its profit margin is almost 15%, although its debt to equity ratio is high = $60,600 / $59,710 = 101.5%. The company has too much debt, even though it makes enough money to pay its obligations.

Answer:

The correct answer is:

Equilibrium price will decrease; the effect on quantity is ambiguous. (D)

Explanation:

First, note that if the price of coffee beans, used in the manufacture of coffee decreases, the price of coffee sold to consumers will decrease, because it takes a lesser amount in manufacturing than it used to, therefore this reduction in manufacturing costs is reflected in the selling price.

Next, it is hard to tell whether this reduction in equilibrium price will affect quantity demanded, because, at the same time, the price of cream ( a complementary good) increases, and since both goods are complementary, they are bought together, and the effect of the reduction in the price of coffee might not necessarily caused an increase in the quantity demanded because this effect is cancelled out by the increase in the price of cream, hence the effect on quantity is ambiguous.

Answer:

(A)0.6600 (B) 1.325 (C) 0.997 or 1 minute

Explanation:

Solution

Given that:

The constant rate = 30 seconds

The arrival rate according to Poisson distribution is = 45 seconds

Now,

(A) We solve for the average length line of cars

The formula is given below:

Lq = λ²/ 2μ ( μ -λ)

Here,

λ = this is the mean time of arrival rate

μ = This is the mean service rate

Thus we compute for the mean time arrival rate which is given below:

The mean arrival rate λ = arrival rate/ 60 seconds

= 60/45

= 1.33 customer per minute

Then we solve for the means service rate which is given below

The mean service rate μ = 60 seconds/ mean rate

= 60/30 = 2 customer per minute

We will now solve for the average line length in cars which is shown below:

Lq = λ²/ 2μ ( μ -λ)

Lq = 1.33²/2*2 (2-1.33)

Lq = 1.7689/4 (0.67)

Lq = 1.7689/2.68

Lq = 0.6600

Therefore the average length in line for cars is 0.6600 cars

(B) We solve for the average number of cars in the system

Ls =Lq + λ /μ

Ls =0.600 + 1.33/2

Ls =0.6600 + 0.665

Ls = 1.325

(C) Finally we need to find the expected average time in the system which is shown below:

Ws = Ls/λ

Ws= 1.325/1.33 = 0.997 or 1.00

The expected time average  in the system is 0.997 or 1.00 minutes.

(A) The average length in line for cars is 0.6600 cars

(B) Ls = 1.325  

(C)The predicted time standard in the system is 0.997 or 1.00 minutes.

The constant rate = 30 seconds

The arrival rate according to Poisson disbandment is = 45 seconds

(A) We solve for the average stature line of cars

The formula is given below:

Lq = λ²/ 2μ ( μ -λ)

Here,

λ = this is the meantime of arrival rate

μ = This is the mean service rate

Thus we compute for the meantime arrival rate which is given below:

The mean formation rate λ = arrival rate/ 60 seconds

= 60/45

= 1.33 customer per minute

Then we solve for the concessions service rate which is given below

The mean service rate μ = 60 seconds/ mean rate

= 60/30 = 2 consumer per minute

We will now solve for the average line length in cars which is shown below:

Lq = λ²/ 2μ ( μ -λ)

Lq = 1.33²/2*2 (2-1.33)

Lq = 1.7689/4 (0.67)

Lq = 1.7689/2.68

Lq = 0.6600

Hence the average length in line for cars is 0.6600 cars

(B) We solve for the average number of cars in the system

Ls =Lq + λ /μ

Ls =0.600 + 1.33/2

Ls =0.6600 + 0.665

Ls = 1.325

(C) Finally we need to find the anticipated average time in the system which is shown below:

Ws = Ls/λ

Ws= 1.325/1.33 = 0.997 or 1.00

The predicted time standard in the system is 0.997 or 1.00 minutes.

Find out more information about Average Time here:

https://brainly.com/question/1081216

Answer:

$ 26,935.56

Explanation:

The key to this question is that present value of those cash flows in year ten is the future value today.

PV=PMT*(1/i-1/i*(1+i)^n)*(1+i)

PMT is the annual amount receivable which is $10,000

i is 12% or 0.12

n is 20 years

1/i*(1+i)^=1/0.12*(1+0.12)^20=1/(0.12*9.646293093 )=0.863889709

1/i=1/0.12=8.333333333

1+i=1+0.12=1.12

PV=10,000*(8.333333333 -0.863889709 )*1.12

PV=10,000*7.469443624*1.12=$83,657.77  

The PV In ten years' time is future value today, hence we need to discount that future value to today's terms

PV=FV*(1+r)^-n

n is ten

r is 12%

PV=$83,657.77*(1+12%)^-10=$ 26,935.56  

Answer:

3

Explanation:

The right answer is "cash collections are complete"

Revenue can only be recognized when the amount of earning of whole year completes basically it's the total amount of money which is earned by the customer and income is the profit which can be calculated by subtracting the revenue and what remains after the expenses.

The question is incomplete. Here is the complete question

Suppose the demand for Digital Video Recorders (DVRs) is given by Q = 250 - .25p + 4pc, where Q is the quantity of DVRs demanded (in 1000s), p is the price of a DVR, and pc is the price of cable television. How much does the quantity demanded for DVRs change if the p rises by $40? A) drops by 10,000 DVRs B) increases by 16,000 DVRs C) drops by 2,500 DVRs D) increases by 4,000

Answer:

Drops by 10,000 DVRs

Explanation:

The demand for digital video recorders is expressed by

Q= 250- .25p+4pc

Where

Q represents the quantity demanded by the customers

P represents the price of DVR

pc represents the price of cable television

Since the factor of p in the expression above is negative, this implies that the quantity of DVR demanded in the market will reduce

If the price of DVR increase by $40, then the quantity demanded will reduce by

= 0.25×40×1000

= 10×1000

= 10,000 units

Hence the quantity of DVRs drops by 10,000 DVRs if the price is increased to $40

Answer:

b. a reduction in business investment resulting from an increase in government borrowing and higher interest rates.

Explanation:

According to the crowding out theory, when there is an increase in government spending, private spending would be reduced.

When the government borrows, real interest rate would increase and this would reduce private sector spending.

I hope my answer helps you

Answer:

b. 3.55 years

Explanation:

The payback period is basically the amount of time an investor needs to recover his/her initial investment.

lets assume initial investment = $1,000

when you calculate IRR, the present value of the cash flows = initial investment

the present value of an annuity for 4 years and 5% is 3.5460

$1,000 = yearly cash flow x 3.546

yearly cash flow = $1,000 / 3.546 = $282

payback period = $1,000 / 282 = 3.546 years ≈ 3.55 years

Answer:

Dr depreciation expense  $ 23.74  

Cr accumulated depreciation              $ 23.74  

Explanation:

The depreciation per month would be first thing to determine:

Yearly depreciation =Cost of asset-residual value/useful life

cost of asset is $1,832.00

residual value which is disposal value at the end of useful life is $123.00

Useful life is 6 years

yearly depreciation charge= ($1,832.00-$123.00)/6=$ 284.83  

Monthly depreciation expense=yearly depreciation charge/12=$284.83/12=$23.74  

The journal entry monthly would be a debit to depreciation expense and a credit to accumulated depreciation

Answer:

A)

year          cash inflows        cash outflows       net cash flows

0                       0                        -900,000              -900,000

1                 790,000                  -486,000               304,000

2                1,430,000                -806,000              624,000

3                786,500                  -484,250               302,250

4                432,575                  -307,288                125,287

5                 68,908                   -125,454                -56,546

B)

NPV 0% discount rate = $398,991

NPV 10% discount rate = $169,613

NPV 20% discount rate = -$725

NPV 30% discount rate = -$130,712

NPV 40% discount rate = -$232,241

C)

NPV 10.3% discount rate = $163,760

D)

almost 20%, since the IRR is the discount rate where NPV = $0

Actual IRR = 19.95%

Answer and Explanation:

The Journal entries are shown below:-

1. Cash Dr,  $2,800,000 (400,000 × $7)

          To Common stock $2,800,000

(Being issue of common stock is recorded)

Here we debited the cash as as it increased the assets and we credited the common stock as it also increased stockholder equity

2. Organisation expenses Dr, $7,000 (1,000 × $7)

         To Common stock $7,000

(Being issue of common stock for organisation expenses is recorded)

Here we debited the organization expenses as  it increased the expenses  and we credited the common stock as it also increased stockholder equity

3. Land Dr,  $250,000  

Building Dr, $400,000  

Equipment $70,000  

       To Common stock  $560,000

      To Paid in capital in excess of par value- Common stock $160,000

(Being exchange of common stock with Land, building and equipment is recorded)

Here we debited the land, building, equipment as it increased the assets  and we credited the common stock and paid in capital in excess of par value as it also increased stockholder equity

4. Cash Dr,  $1,100,000 (25,000 × $44)

       To Preferred stock  $1,000,000  (25,000 × $40)

       To Paid in capital in excess of par value-preferred stock $100,000

(Being issue of preferred stock is recorded)  

Here, we debited the cash as it increased the assets  and we credited the preferred stock and paid in capital in excess of par value as it also increased stockholder equity

Answer:

Current price = $341.943

Explanation:

The Dividend Valuation Model is a technique used to value the worth of an asset. According to this model, the worth of an asset is the sum of the present values of its future cash flows discounted at the required rate of return.

PV dividend in year 1 = 20 × 1.03^(-1)= 19.41747573

PV of dividend in year 2 = 97%× 20 × 1,03^(-2)= 18.28636064

PV of dividend in year 3 = 97%× 97%×  20× 1.03^(-3) = 17.22113575

PV of dividend from year 4  and beyond

This will be done in two steps

PV (in year 3 terms

(97%× 97%×  20× 1.03^(-3))/0.06 =313.6333333

PV in year o terms

PV = A/r

A= 313.63, r = 6%

313.63× 1.03^(-3)= 287.0189291

Price of stock = 19.41 +18.28 +  17.221 +  17.221= 341.943

Current price = $341.943

Answer:

All Options ..... if not possible then D) Sharing profits

Explanation:

A General Parnership refers to a business arrangement in which the individuals agree to share all the as assets, profits, and financial and legal liabilities of a jointly-owned business. Therefore in this scenario all of the options listed are valid reasons to want to create a general partnership between Mario and Johnny, but if only one option can be chosen then the best reason would be Sharing profits. That is because the entire reason for starting a business is to make money, and thus protecting your entitled profits is the most important.

Answer: The advantage of the basic earning power ratio (BEP) over the return on total assets for judging a company's operating efficiency is that the BEP does not reflect the effects of debt and taxes

Explanation:

a. This is correct.

The advantage of basic earning power ratio over the return on the total assets for judging a firm's operating efficiency is that the basic earning power does not reflect effects of debt and taxes.

b. This is incorrect.

Only the price/earnings ratio of the company will tell us nothing about a company. When we compare the price/earnings of a company with the peers, we would know whether such company is under valued, or over valued or maybe fairly valued.

c. This is incorrect.

The total assets is made up of total liabilities plus the shareholders equity, when other things are held constant, less debt simply means less liabilities. To balance both sides, the total assets should reduce as the shareholder's equity is constant. When total assets decreases, the return on the assets will increase.

d. This is incorrect.

We can reach a conclusion on which firm is better managed based on the facts given. The debt ratio is the total liabilities divided by total assets, and a lower ratio is known to be good in comparison to a higher ratio. Similarly, the profit margin is the profit divided by the sales, and low profit margin shows high expenses and also a need for the management to decrease the expense.

Answer:

Income elasticity of demand = - 0.56

Explanation:

Given,

P=10, Pc=100, Pd=2, A=5, and I=50.

So,

Q=200-5(10)-.1(100)-.5(2)+.2(5)-(50).

Q=90 (level of income)

Computation:

Given , I = 50, Q = 90.

ΔQ / ΔI = -1

Income elasticity of demand = (ΔQ / ΔI) x (I / Q)

Income elasticity of demand = - 1 x (50 / 90)

Income elasticity of demand = - 0.56

Answer:

According to IRS, the party making the payments is entitled to cancel the alimony & separate maintenance fees in a divorce situation while the party accepting the payment is obliged to include the amounts received in their gross revenue. Any transfer of property in respect of a divorce other than cash, however, is not taxable.The party receiving the property also does not recognize income and include the item on cost basis equal to basis of the party making transfer.

Explanation:

Answer:

The answer to this question can be described as follows:

Explanation:

The economy scale with cost activity and total volumes of sales, which lowers the overall product prices as a result, and grows all economies of scale, because consumers purchase the stuff like those, who pay even less than the amount they expect to receive.  

It is the transition, the same saved money it's spent on other commodities and the overall deficit as well as the actual boosting of financial social assistance that generates income as a whole. It also increases outlays and creates more jobs, and benefits people with higher median income levels and a decent standard of living, For example  

Uber often encourages ride-sharing, in which the car is capable of serving 3-4 people simultaneously. This gives a win-win situation to all sides and generates economies of scale. Throughout the market like India, Uber already is introducing it and being extremely successful.

Answer:

Cost of goods sold  = $564,000

Explanation:

The cost of goods sold would be determined as follows:

                                                                                 $

Opening inventory

Raw material =                                                   14,000

Work in progress                                                 31,000

Manufacturing cost                                            543,000

                                                                            588,000

Add open inventory of Finished goods              25,000

Less Closing inventory

raw material                                                          ( 19,000)

Work in progress                                                 ( 7,000)

Total cost of goods available for sale               587,000

Less closing inventory of finished goods           23,000      

Cost of goods sold                                              564,000

Note that the opening inventory of raw material  and work in progress would increase the manufacturing cost while their respective closing inventory represent cost incurred on production during the period on inventories not yet completed

Answer:

This enables Fleet to reduce costs of regulatory compliance in relation to the security issue

Explanation:

When a company is exempt under the Securities Act of 1993,this implies that when issuing securities in the market place,the stock exchange ,the company is not required to produce audited financial statements.

Auditing financial statements sometimes cost fortunes especially when it is also required that one of the Big-4 professional firms is to be consulted.

By not requiring audited financials,the costs of audit is saved,hence cost of compliance with exchange rules is reduced overall

Answer:

C) 184

Explanation:

Options are inconsistent with data given.

Optimal Order is the level of order that is made to keep the setup cost to a minimum level.

It can be calculated by using following formula.

EPQ = [tex]\sqrt{\frac{2 X K X D}{h X ( 1 - x )}}[/tex]

K = Setup Cost   = $50

D = Annual demand  = 3,650 units

h = Holding cost  = $12

x = daily demand rate/ daily production rate =  20 / 100 = 0.2

Placing values in the formula

EPQ = [tex]\sqrt{\frac{2 X 50 X 3650}{12 X ( 1 - 0.2 )}}[/tex]

EPQ = 194.99 units = 195 units

Answer according to correct data

Question

The assumptions of the production order quantity model are met in a situation where annual demand is 3650 units, setup cost is $50, holding cost is $12 per unit per year, the daily demand rate is 10 and the daily production rate is 100. The production order quantity for this problem is approximately

Answer

Options are inconsistent with data given.

Optimal Order is the level of order that is made to keep the setup cost to a minimum level.

It can be calculated by using following formula.

EPQ = [tex]\sqrt{\frac{2 X K X D}{h X ( 1 - x )}}[/tex]

K = Setup Cost   = $50

D = Annual demand  = 3,650 units

h = Holding cost  = $12

x = daily demand rate/ daily production rate =  10 / 100 = 0.1

Placing values in the formula

EPQ = [tex]\sqrt{\frac{2 X 50 X 3650}{12 X ( 1 - 0.1 )}}[/tex]

EPQ = 183.84 units = 184 units

Answer:

1. Operating and Cash outflow: Payment of employee salaries.

2. Investing and Cash inflow: Sale of land for cash. Investing

3. Operating and Cash outflow: Purchase of rent in advance.

4. Operating and Cash inflow: Collection of an account receivable.

5. Financing and Cash inflow: Issuance of common stock.

6. Operating and Cash outflow: Purchase of inventory

7. Investing and Cash inflow: Collection of notes receivable.

8. Operating and Cash outflow: Payment of income taxes.

9. Noncash activity, so no effect: Sale of equipment for a note receivable.

10. Financing and Cash inflow: Issuance of bonds.

11. Investing and Cash outflow: Loan to another firm.

12. Financing and Cash outflow: Payment of a long-term note payable.

13. Financing and Cash outflow: Purchase of treasury stock.

14. Operating and Cash outflow: Payment of an account payable.

15. Investing and Cash inflow: Sale of equipment for cash.

Explanation:

A statement of cash flow is a financial statement that gives the aggregate cash inflow and cash outflow in an organization during an accounting period. The three categories of statement of cash flows are investing activities, financing activities, and operating activities.

1. Investing activities are essentially the cash activities with respect to non-current assets such as sale of equipment for cash.

2. Financing activities refers to cash activities with respect to owners’ equity and non-current liabilities such as purchase of treasury stock.

3. Operating activities are mainly the cash activities with respect to net income such as payment of employee salaries.

Answer:

Break even in units (2017) = 2080 units

Explanation:

The break even point in units is the number of units where the total revenue equals total cost. It is a point of no profit and no loss. The break even point in units is calculated as follows,

Break even in units = Fixed cost / Contribution margin per unit

Contribution margin per unit = Selling price per unit - Variable cost per unit

A cut in selling price of 6% would mean that the new selling price will be,

New selling price = 150 - (150 * 0.06)  = $141

Contribution margin per unit = 141 - 113  = $28

Break even in units = 58240 / 28

Break even in units (2017) = 2080 units

Answer: B) Lily's nephew cut his finger with the knife that was negligently kept in Lily's kitchen.

Explanation:

James as the landlord will be responsible for the structural or other defects of the house so long as it is the house that is the problem.

Activities that go on inside a tenants house that are caused by the actions of the tenants will not be a liability on the path of the landlord.

If an elevator is damaged or there weren't enough fire extinguishers or there was a broken step or poor quality paint was used, these are all defects related to the house itself and as such will result in negligence on the part of the landlord.

A child getting injured by a knife that Lily as a tenant left, in her apartment will.be the fault of Lily and the negligence can only be on her because it was due to actions by her as a tenant in her leased property.

Answer:

The stock price is 38.63

Explanation:

We use the gordon model to calculate the horizon value and with htat the value of the stock:

[tex]\frac{D_1}{r-g} = PV\\\frac{D_0(1+g)}{r-g} = PV\\[/tex]

D1 = 2.60 x 1.04 = 2.704

rate of return 11% = 0.11

grow rate = 4% = 0.04

[tex]\frac{2.704}{0.11-0.04} = PV\\[/tex]

P0 = 38.62857143

The taxes should be ignored as the gordon model do not include them in the calculations

Answer:

Buckeye Industries has a bond issue with a face value of $1000. The value of Buckeye’s asset is $1200. In one year they will be worth either $800 or $1400. The going rate on T-bill is 4 percent. What is the value of debt, equity, and interest rate on debt?

Explanation:

Answer:

total liabilities = accounts payable $11,500 + unearned revenue $7,500 + debt $65,900 + other liabilities $800 = $85,700

Explanation:

Cash 9,700 Accounts Payable 1,500 Accounts Receivable 4,500 Debt 2,900 Inventory 3,800 Other Liabilities 800 Property Plant & Equipment 16,400 Total Liabilities 5,200 Other Assets 1,700 Paid-In Capital 7,300 Retained Earnings 23,600 Total Equity 30,900 Total Assets 36,100 Total Liabilities & Equity 36,100

1. Buy $15,000 worth of manufacturing supplies on credit

Supplies                                           Accounts payable

debit                credit                       debit                credit

15,000                                                                       1,500

                                                                                  15,000

                                                                                  16,500

2. Issue $85,000 in stock

Cash                                                 Paid-In Capital

debit                credit                       debit                credit

9,700                                                                        7,300

85,000                                                                    85,000

94,700                                                                     92,300

3. Borrow $63,000 from a bank

Cash                                                 Debt

debit                credit                       debit                credit

94,700                                                                      2,900

63,000                                                                    63,000

157,700                                                                    65,900

4. Pay $5,000 owed to a supplier

Cash                                                 Accounts payable

debit                credit                       debit                credit

157,700                                                                     16,500

                        5,000                      5,000                          

152,700                                                                     11,500

5. Receive payment of $12,000 owed by a customer

Cash                                                 Accounts receivable

debit                credit                       debit                credit

152,700                                            4,500                        

12,000                                                                     12,000

164,700                                                                     7,500

Due to some strange reason, accounts receivable has a debit balance (= $4,500 - $12,000). Since that is not possible, the remaining part $7,500 must be included under unearned revenue:

Accounts receivable                       Unearned revenue

debit                credit                       debit                credit

                        7,500                                               0                        

7,500                                                                       7,500

0                        0                                                      7,500

Answer:

Required 1.

a.

Supplies Inventory $1,380 (debit)

Income Statement $1,380 (credit)

b.

Cash $3,900 (debit)

Un-earned Fees $3,900 (credit)

c.

Depreciation $3,000 (debit)

Accumulated Depreciation $3,000 (credit)

d.

Wages Expenses $2,475 (debit)

Wages Accrued $2,475 (credit)

e.

Unearned Fees $14,140 (debit)

Fees Earned $14,140 (credit)

Required 2.

Fees Earned                                305,800

Less Expenses :

Wages Expense                          (157,800)

Rent Expense                               (55,000 )

Utilities Expense                          (42,000 )

Miscellaneous Expense                (7,000)

Net Income / (loss)                        44,000

Required 3.

Fees Earned (305,800 + 14,140)       319,940

Less Expenses :

Wages Expense (157,800  + 2,475) (160,275)

Rent Expense                                    (55,000 )

Utilities Expense                               (42,000 )

Miscellaneous Expense                      (7,000)

Depreciation                                        (3,000)

Net Income / (loss)                              52,665

Required 4.

Effect = Increase by $8,665

Explanation:

Required 3.

Make the following Adjustments :

Required 4

Adjust the Retained Earnings with items affecting the Income Statement.

Retained Earnings                            $117,800

Less Depreciation Expense             ($3,000)

Less Wages Accrued                       ($2,475)

Add Fees Earned                              $14,140

Adjusted Retained Earnings           $126,465

Conclusion  :

Effect = Increase

Amount = $126,465 - $117,800 = $8,665

Answer:

Programmed.

Explanation:

This is a form of decision that is has been made or is been made by as manager just like Jaime the account managing clerk which is repetitive or occurs steadily and over and over. The fact that it happens this steadily makes it a programmed decision.

This decision making are always taken in accordance with some establishment habit, regulations or procedures while the nature of problem that requires a non programmed decision is unstructured and something different. It needs a higher management participation.

In programmed decision making, there could likely be no error in the decisions because it is a routine and managers usually have the information they need to create rules and guidelines to be followed by others.

Answer:

1. Calculate (a) the product cost for one tent

and (b) the total product cost for last year.

2. (a) Prepare an income statement for external users.

                                    Laworld Inc.

                                Income Statement

Total revenue                                                          $12,000,000

Cost of goods sold:

Total COGS                                                             ($9,200,000)

Gross profit                                                               $2,800,000

Operating expenses:

Total operating expenses                                        ($800,000)

Net profit from operations                                      $2,000,000

(b) Did you need to prepare a supporting statement of cost of goods manufactured? Explain.

3. Suppose 200,000 tents were produced (and 200,000 sold) but that the company had a beginning finished goods inventory of 10,000 tents produced in the prior year at $40 per unit. The company follows a first-in, first-out policy for its inventory (meaning that the units produced first are sold first for purposes of cost flow). (a) What effect does this have on the income statement?

(b) Prepare a cost of goods sold statement.

Incurred costs:

Direct materials                                                            $3,600,000

Direct labor                                                                   $2,400,000

Manufacturing overhead                                             $3,200,000

Cost of goods manufactured                                      $9,200,000

Beginning inventory of finished units                            $400,000

Ending inventory of finished units                                ($460,000)

Cost of goods sold                                                       $9,140,000

Explanation:

revenue = 200,000 x $60 = $12,000,000

manufacturing costs:

product cost per unit = $18 + $12 + $16 = $46

S&A expenses: