Answer:
b. it promotes public goals such as economic growth, low inflation, and the smooth operation of financial markets.
Explanation:
This is generally what the federal reserve does, and they try to stop both deflation and inflation
Rational choice theorists would define the behavior of corporate executives who outsource many jobs to countries where the cost of labor is substantially less than in the United States as being:
Answer: Instrumental
Explanation:
Rational choice theory, is a school of thought which is based on the assumption that individuals will choose a course of action which goes in line with what they personally prefer.
For the instrumental rationality, it has to do with looking for the most cost effective method in order to achieve a particular objective. Therefore, the behavior of corporate executives who outsource jobs to other countries where labor cost is cheaper than in the United States is defined as being instrumental.
Audio Zone Co. needs to prepare pro forma financial statements for the next fiscal year. To do so, the company must forecast its total overhead cost. The actual machine hours and total overhead cost are presented below for the past six months.
Month Total Overhead Machine Hours
Jan. $6,288 1,980
Feb. 6,460 2,090
Mar. 5,987 1,745
Apr. 5,559 1,560
May 6,032 1,865
June 6,341 2,012
Using the high-low method, total monthly fixed overhead cost is calculated to be:________.
Answer:
$2,907
Explanation:
the formulas to calculate costs using the high-low method are:
variable cost = (highest activity cost - lowest activity cost) / (highest activity units - lowest activity units) fixed costs = highest activity cost - (variable cost per unit x highest activity units)variable cost = ($6,460 - $5,559) / (2,090 - 1,560) = $901 / 530 units = $1.70 per unit
fixed costs = $6,460 - ($1.70 x 2,090) = $6,460 - $3,553 = $2,907
The 2021 income statement of Adrian Express reports sales of $17,262,000, cost of goods sold of $10,624,000, and net income of $1,640,000. Balance sheet information is provided in the following table.
Adrian Express
Balance Sheets
December 31, 2018 and 2017
2018 2017
Assets
Current assets: 510,000 670,000
Cash 1,220,000 910,000
Accounts receivable 1,620,000 1,310,000
Inventory 4,710,000 4,150,000
Long-term assets
Total assets $8,060,000 $7,040,000
Liabilities and Stockholders' Equity
Current liabilities s $1,930,000 $1,570,000
Long-term liabilities 2,270,000 2,310,000
Common stock 1,820,000 1,820,000
Retained earning 2,040,000 1,340,000
Total liabilities and stockholders'
equity $8,060,000 $7,040,000
Industry averages for the following four risk ratios are as follows:
Average collection period 25 days
Average days in inventory 60 days
Current ratio 2 to 1
Debt to equity ratio 50%
Required:
Calculate the four risk ratios listed above for Adrian Express in 2018.
Answer:
Industry average Adrian Express
Average collection period 25 days 31 days
Average days in inventory 60 days 152 days
Current ratio 2 3.91
Debt to equity ratio 50% 109%
Explanation:
Average collection period = (average accounts receivable / total net credit sales) x 365 days = {[(1,620,000 + 1,310,000) / 2] / 17,262,000} x 365 days = 30.98 ≈ 31 days
Average days in inventory = 365 days / inventory turnover
inventory turnover = COGS / average inventory = 10,624,000 / [(4,710,000 4,150,000) / 2] = 2.4
Average days in inventory = 365 days / 2.4 = 152 days
Current ratio = current assets / current liabilities = (cash + accounts receivable + inventory) / $1,930,000 = ($1,220,000 + $1,620,000 + $4,710,000) / $1,930,000 = $7,550,000 / $1,930,000 =3.91
Debt to equity ratio = total liabilities / stockholders' equity = $4,200,000 / $3,860,000 = 1.09 or 109%
Post the entries in the general journal below to the Accounts Receivable account in the general ledger and to the appropriate accounts in the accounts receivable ledger for Calderone Company.
Assume the following account balances at January 1, 2019
Accounts Receivable (control account) $7,880
Accounts Receivable-John Gibrone 4, 780
Accounts Receivable-Jim Garcia 2,090
Accounts Receivable-June Lin. 1,01
General Journal
Date 2019 Description Post Debit Credit
Ref
Jan 8 Cash 470
Accounts Receivable/John Gibrone 470
Received partial payment or account from John Gibrone
20 Sales Returns and Allowances 300
Sales Tax Payabl 24
Accounts Receivable/3im Garcia 324
Accept return of defective merchandis, Credit
Memorandum 121; original sale
made on Sales S1ip 11102 of
December 27, 2018 1.
Prepare a schedule of accounts recelvable for Calderone Company at January 31, 2019. 2. Should the total of your accounts receivable schedule agree with the balance of the Accounts Receivable account in the general ledger at January 31, 2019?
Answer:
1. Prepare a schedule of accounts receivable for Calderone Company at January 31, 2019.
Since there is not enough room here, I prepared an excel spreadsheet. Since we are not told the credit terms of the sales, I assumed all the sales were more not past due.
2. Should the total of your accounts receivable schedule agree with the balance of the Accounts Receivable account in the general ledger at January 31, 2019?
Of course, the balance of the accounts receivable control account should equal the total balance of the accounts receivable schedule. Even if some accounts are written off (bad debt), both the accounts receivable schedule and the general ledger accounts receivable should show that write off.
Explanation:
Consider the following data for two products of Gitano Manufacturing. (Loss amounts should be indicated with a minus sign. Round your intermediate calculations and "OH rate and cost per unit" answers to 2 decimal places.)
Product A Product B
Number of units produced 11,500 units 1.700 units
Direct labor cost ($29 per DLH) 0.16 DLH per unit 0.24 DLH per unit
Direct materials cost $2.10 per unit $3.10 per unit
Activity Overhead costs
Machine setup $94,104
Materials handling 53,000
Quality control inspections 73.200
$220,304
Required
a. Using direct labor hours as the basis for assigning overhoad costs, determine the total production cost per unit for each product line.
b. If the market price for Product A is $28.68 and the market price for Product B is $58, determine the profit or loss per unit for each.
c. Consider the following additional information about these two product lines. If ABC is used for assigning overhead costs to what is the cost per unit for Product A and for Product B?
Answer:
a. Product A $257,830 , Product B $57,086
b. Product A $71,990 , Product B $41,514
c. Hie, for this part of the question there is missing information regarding the Activities for the two Products for each Activity Center.
However the Procedure to deal with the required is explained below :
Step 1 : Determine the Overhead Absorption Rate for Each Activity Center
(We have three Activity Centers: Machine setup, Materials handling: Quality control inspections )
Overhead Absorption Rate = Total Overhead (for each) / Total Number of Activity
Step 2: Absorb the Costs in the products using the Rate for each cost center and the number of activity incurred in each cost center for the two Products
Overhead (Activity Center) = Overhead Absorption Rate× Activity Specific to the Product.
Step 3 : Determine the Total Costs
Total Cost for one Product would include the Total Costs for each Activity Center (which are your overheads) plus the Direct Labor and Direct Material Costs as Calculated in Part b.
Explanation:
Part a
Total Production Cost = Direct Costs + Indirect costs (overheads)
First determine the predetermined rate based on direct labor hours.
Total direct labor hours.
Product A (11,500×0.16) = 1,840
Product B (1.700×0.24) = 408
Total = 2,248
Predetermined rate = total overhead cost / total direct labor hours
= $220,304 / 2,248
= $98 per labor hour
Assigning Overhead Cost
Total Overhead Costs
Product A (1,840×$98) = 180,320
Product B (408×$98) = 39,984
Total = 220,304
Total Costs
Product A Product B
Direct labor cost
Product A ( 1,840×$29) 53,360
Product B (408×$29) 11,832
Direct materials cost
Product A ( 11,500×$2.10) 24,150
Product B (1.700×$3.10) 5,270
Overheads
Product A 180,320
Product B 39,984
Total Costs 257,830 57,086
Part b.
Profit = Selling Price - Expenses
Product A Product B
Sales
Product A ( 11,500×$28.68) 329,820
Product B (1.700×$58) 98,600
Manufacturing Costs (257,830) (57,086)
Profit 71,990 41,514
Management is considering using a new component that would increase the unit variable cost by $50. Since the new component would improve the company's product, the marketing manager predicts that monthly sales would increase by 500 units. What should be the overall effect on the company's monthly net operating income of this change if fixed expenses are unaffected
Answer:
Because fixed costs will not change, the overall effect on the company's monthly net operating income will be equal to the contribution margin of the product once the new component is added.
Explanation:
The contribution margin is equal to: Revenue - Variable Costs.
We already know that the variable cost will be increased by $50 once new component is added, and that monthly sales are expected to increase by 500 units after that.
Depending on the price of the product, the amount sold, and the variable costs, we get the contribution margin, and this contribution margin will be exactly the same as the overall effect on the net operating income.
David Douglas, an announcer from local WTJM radio, has approached you with an exciting offer. He is planning to interview a popular touring group on his radio show next week, and he would like to conduct the interview in your cafe. David would bring all the equipment and promote the event. He explains, "It would bring a lot of business to the cafe, and you would not have to do anything. I am very experienced in promoting and organizing events and would only charge you $250 to take care of it all! I promise you that your sales will increase at the event. Are you interested
Answer:
Yes interested in the offer of David Douglas
Explanation:
The David Douglas is an announcer on radio. It has viewership and audience listens to him. If the interviews are conducted with popular touring group at our cafe it will boost sales of cafe and good customer service will result in words of mouth marketing of cafe. Projected sales will be nearly $11,298 and after deducting the expenses the profit will be nearly $1200. This is an opportunity to promote cafe sales and should accept the offer.
Universal Containers wants to provide a more consistent service experience to its customers and is evaluating the Service Cloud macro feature. Which three configurations must be made?
A. Users must use Lightning Experience. B. Publisher Actions used in the macros must be on the page layout.C. The Macros widget or utility must be added to the console.D. The Run Macros Permission must be granted to users.E. The Run Macros Action must be on the page layout.
Answer:
B. Publisher Actions used in the macros must be on the page layout.
C. The macros widget or utility must be added to the console
D. The run Macros permission must be granted to users.
Explanation:
The macros are a function which specifies how an input function should be mapped in the computer software to produce defined output. Macros are used to make tasks less repetitive. The macros can be used in service cloud. To use macros in service cloud the macros permission must be granted to all users, the macros widget must be added to the console and the macros must be on the page layout.
Cash Flow Ratios Tracy Company reports the following amounts in its annual financial statements:_________.
Cash flow from operating activities $90,000 Capital expenditures $31,000*
Cash flow from investing activities (70,000) Average current assets 80,000
Cash flow from financing activities (10,000) Average current liabilities 60,000
Net income 44,000 Total assets 180,000
* This amount is a cash outflow.
a. Compute Tracy's free cash flow.
b. Compute Tracy's operating-cash-flow-to-current-liabilities ratio.
c. Compute Tracy's operating-cash-flow-to-capital-expenditures ratio.
Answer: a. $59,000. b. 1.5x. c. 2.9x
Explanation:
a) Tracy's Free cash flow will be calculated as:
= Cashflow from operating activities - Capital expenditures
= $90000 - $31000
=$59000
b) Tracy's operating cash flow to current liabilities ratio will be:
Operating cashflow ÷ Current liabilities
= $90000 ÷ $60000
= 1.5x
c) Tracy's operating cashflow to capital expenditures ratio will be:
= Operating cashflow ÷ capital expenditure
= $90000 ÷ $31000
= 2.90x
In a closed system one kilogram of carbon dioxide (CO_2) is expanded reversibly from 30 degree C and 200 kPa to 100 kPa pressure. If the expansion is polytropic with n = 1.27, determine the total work, the change in total internal energy, and the total heat transferred in [kJ], Note that for CO_2, R = 188.9 J/kg.K and c_v = 655 J/kg.K. W = -29.05 kJ, DeltaU = -27.19 kJ, Q = 1.860 kJ
Answer:
the total work W = 29.05 kJ
the change in total internal energy is [tex]\mathbf{\Delta U = - 27.19 \ kJ}[/tex]
the total heat transferred in [kJ] is Q = 1.860 kJ
Explanation:
Given that
mass of carbon dioxide in the closed system = 1 kg
Temperature [tex]T_1= 30 ^0 C[/tex] = (273+30 ) K = 303 K
Pressure [tex]P_1 = \ 200 \ kPa[/tex]
Pressure [tex]P_2 = 100 \ kPa[/tex]
polytropic expansion n = 1.27
Note that we are also given the following data set:
R = 188.9 J/kg.K
c_v = 655 J/kg.K
So; for a polytropic process ; [tex]PV^{1.27} = c[/tex]
[tex]\dfrac{T_2}{T_1}= ( \dfrac{V_1}{V_2})^{n-1} = (\dfrac{P_2}{P_1})^{\frac{n-1}{n}[/tex]
[tex]T_2 = T_1 [\dfrac{P_2}{P_1}]^{\frac{n-1}{n}[/tex]
[tex]T_2 = 303 [\dfrac{100}{200}]^{\frac{1.27-1}{1.27}[/tex]
[tex]T_2 = 261.48 \ K[/tex]
Since the system does not follow the first order of thermodynamics; To calculate the total work by using the expression:
[tex]W = \dfrac{P_1V_1-P_2V_2}{n-1} = \dfrac{mR(T_1-T_2)}{n-1}[/tex]
[tex]W = \dfrac{1*188.9(303-261.48)}{1.27-1}[/tex]
W = 29048.62222 J
W = 29.05 kJ
Thus, the total work W = 29.05 kJ
The change in internal energy can be expressed by the formula:
[tex]\Delta U = mc_v (T_2-T_1)[/tex]
[tex]\Delta U = 1*655(261.48-303)[/tex]
[tex]\Delta U = -27195.6 \ J[/tex]
[tex]\mathbf{\Delta U = - 27.19 \ kJ}[/tex]
Hence; the change in total internal energy is [tex]\mathbf{\Delta U = - 27.19 \ kJ}[/tex]
Finally; to determine the total heat transferred in [kJ]; we go by the expression for the first order of thermodynamics which say:
Total Heat Q = ΔU + W
Q = (-27.19 + 29.05)kJ
Q = 1.860 kJ
Hence; the total heat transferred in [kJ] is Q = 1.860 kJ
Dell Computer buys computer chips from Intel for the purpose of making computers to be sold to consumers and other organizations. Dell is an example of which type of organizational buyer?
a. Intermediary
b. Producer
c. Wholesaler
d. Institution
Answer:
b. Producer.
Explanation:
Organizational buying deals with the process of purchasing products and services after duly identifying, evaluating and choosing which company to buy from.
Organizational buying is mainly classified into four categories, these are;
1. Producer.
2. Intermediary or Retailers.
3. Wholesaler.
4. Institution.
In this scenario, Dell Computer buys computer chips from Intel for the purpose of making computers to be sold to consumers and other organizations. Dell is an example of a producer organizational buyer because it bought computer chips, so it can be used to manufacture a computer.
Hence, the producers usually buy raw materials, components or other parts, from other manufacturers to use in producing goods for their consumers or end users.
Which of the following is TRUE regarding journal entries: a) There are always only two accounts affected b) The total amount debited must equal the total amount credited c) Journal entries show debits on the right and credits on the left d) Journal entries show credits first, then debits
Answer: b) The total amount debited must equal the total amount credited
Explanation:
Journal entries on the debit side must always equal entries on the credit side. This is to fulfil the Accounting requirement of Double Entry where every entry in the books must have an equal and corresponding entry as well.
There can be multiple accounts represented in the journal entry but the amount on the credit side needs to balance with the amount on the debit side.
For example, a good to sold to Hillary by Trump for $30. Trump gives Hillary a discount of 10%. Trump will record that entry as,
DR Cash $27
DR Sales Discount $3
CR Accounts Receivable $30
Notice that the Debit side has 2 accounts but they still add up to the $30 on the Credit side.
Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March.
Date Activiies Units Acquired at Cost Units Sold at Recall
Mar. 1 Beginning inventory 60 units $50.20 per unit
Mar. 5 Purchase 205 units $55.20 per unit
Mar. 9 Sales 220 units $85.20 per unit
Mar. 18 Purchase 65 units $60.20 per unit
Mar. 25 Purchase 110 units $62.20 per unit
Mar. 29 Sales 90 units $95.20 units
Total 440 units 310 units
Required:
1. Compute cost of goods available for sale and the number of units available for sale.
2. Compute the number of units in ending inventory.
3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, units sold consist of 600 units from beginning inventory, 300 from the February 10 purchase, 200 from the March 13 purchase, 50 from the August 21 purchase, and 250 from the September 5 purchase.
4. Compute gross profit earned by the company for each of the four costing methods.
Answer:
Warnerwoods Company
Perpetual Inventory System:
1. Cost of Goods Available for Sale and Units Available for Sale:
Mar. 1 Beginning inventory 60 units $50.20 per unit $3,012
Mar. 5 Purchase 205 units $55.20 per unit 11,316
Mar. 18 Purchase 65 units $60.20 per unit 3,913
Mar. 25 Purchase 110 units $62.20 per unit 6,842
Available for Sale 440 units Cost = $25,083
2. The number of units in ending inventory:
Units Available for Sale 440
Subtract units sold 310
Ending Inventory 130 units
3. The Cost assigned to ending inventory using:
a) FIFO: Ending Inventory
20 units at $60.20 per unit = $1,204
110 units at $62.20 per unit = 6,842
Ending Inventory $8,046
b) LIFO: Ending Inventory
Mar. 1 Beginning Inventory 45 units $50.20 per unit = $2,259
Mar. 18 Purchase 65 units $60.20 per unit = 3,913
Mar. 25 Purchase 20 units $62.20 per unit = 1,244
Ending Inventory 130 units Cost = $7,416
c) Weighted Average: Ending Inventory
Cost of Goods Available for Sale divided by units available for sale
= $25,083/440 = $57 per unit
Ending Inventory = $57 x 130 = $7,410
d) Specific Identification: Ending Inventory
This cannot be answered from the information provided in the question:
4. Gross Profit for each costing method:
FIFO LIFO WEIGHTED SPECIFIC
AVERAGE IDENTIFICATION
Sales $27,312 $27,312 $27,312 $27,312
Cost of Sales 17,037 17,667 17,670
Gross Profit $10,275 $9,645 $9,642
Explanation:
a) Sales:
Mar. 9 Sales 220 units $85.20 per unit = $18,744
Mar. 29 Sales 90 units $95.20 units = 8,568
Total = $27,312
b) Cost of Sales:
i) FIFO
Mar 1. Beginning inventory 60 units $50.20 per unit = $3,012
Mar. 5 Purchase 205 units $55.20 per unit = 11,316
Mar. 18 Purchase 45 units $60.20 = 2,709
Cost of Sales = $17,037
ii) LIFO:
Mar. 1 Beginning inventory 15 units $50.20 per unit = $753
Mar. 5 Purchase 205 units $55.20 per unit = $11,316
Mar. 25 Purchase 90 units $62.20 per unit = $5,598
Cost of Sales = $17,667
iii) Weighted Average:
Cost of Sales = $57 x 310 = $17,670
c) Calculations under the specific identification cannot be made because of the figures given under this method.
Cost of goods available for sale = 440 units and $25,071
Number of units in ending inventory is 130 units.
1. The calculation of compute cost of goods available for sale and the number of units available for sale is;
Beginning inventory cost = 60 units x $50.20 = $3,012Purchase on March 5 cost = 205 units x $55.20 = $11,304Purchase on March 18 cost = 65 units x $60.20 = $3,913Purchase on March 25 cost = 110 units x $62.20 = $6,842Cost of goods available for sale = 440 units and $25,071
2. Number of units in ending inventory:
Units sold = 220 + 90 Units sold = 310 unitsUnits in ending inventory = total available for sale - units sold Units in ending inventory = 440 - 310 = 130 unitsNumber of units in ending inventory is 130 units.
3. Compute the cost assigned to ending inventory
4. Compute gross profit earned by the company for each of the four costing methods.
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Which of the following statements concerning the selection of risk management techniques and insurance market conditions is (are) true? I.It's easier to purchase affordable insurance during a "soft" market than during a "hard" market.II.Retention is used more during a "soft" market than during a "hard" market.I onlyII onlyboth I and IIneither I nor II
Answer:
I.It's easier to purchase affordable insurance during a "soft" market than during a "hard" market
I only
Explanation:
When a purchaser of insurance wants to make a purchase he analyses the market to get a favourable condition that reduces risk and loss.
The market condition can be a soft market or hard market.
Soft market is one in which potential sellers are more than potential buyers. So supply exceeds demand. Buyers are able to buy affordable insurance.
Hard market on the other hand is when there is an upswing in market cycle. Premiums increase and capacity for insurance decreases.
It is more difficult to get affordable insurance in this market
The following is a description of the conversion cycle of Central Production Limited:
The conversion cycle of the company is triggered by a report from the warehouse. When the quantity of an inventory item falls below a pre-set minimum level, the warehouse manager sends an online inventory status report to production department advising them to schedule a production batch run for the item.
Upon receipt of the report, the production clerk assesses the digital bill of materials and the route sheet files for the item to be produced and adds the production details to the online production schedule.
The system automatically adds a record to the open work order file and sends an online work order to the work centre supervisor’s computer and to the accounting clerk’s computer.
The work centre supervisor receives the work order from his computer and print hard-copy move tickets and materials requisitions for each production process. Production employees take the materials requisitions to store clerk and receives the materials and subassemblies needed to perform the production tasks. If additional materials beyond the standard amount is needed, the work centre supervisor prepares additional materials requisitions.
Production employees complete job time tickets after completing a production process to record the time spent on the job. The job time tickets are then sent together with the move tickets to the accounting department.
After releasing the materials into production, the store clerk updates the material inventory records and send the materials requisitions to accounting department. The clerk prepares a journal voucher and posts to the general ledger material control account at the end of each day.
The accounting clerk assesses the work orders and set up a work-in-process account for a production batch. Throughout the production period, the clerk also receives move tickets, job tickets, and materials requisitions, which he uses to post to the work-in-process account. At the end of each day, the accounting clerk prepares a digital journal voucher and post it to the general ledger work-in- process and finished goods control accounts.
Identify the risks exist in the conversion cycle of Central Production Limited. (10 marks, maximum 300 words)
Answer: Provided in the explanation section
Explanation:
Conversion Cycle is the cycle which track records for the arrangement of crude material to completed products.
Here on the best possible perspective all in all of the procedure:
1. Triger by distribution center dept ( Raw material Keeper)
2. Produnction chief updates the request to be finished and include further up and coming requests assuming any.
3.It will produce online request slip and straightforwardly post to chiefs tab + bookkeeper tab
4. Manager take material and issue to gathering dept ( abundance material necessity is given by his position too)
5. Time + work both finished card sare sent to Accountanct
6. When request finished Accountant update the WIP just as Inventory in books.
Hazard in the Conversion Cycle:
After receipt of material and charging it to FG as Inventory in books
- Risk is hindering of assets in overabundance keeping of stock, As material level down after a specific level automatc trigger alternative is set up, which cautions the productin withdraw. to decide the future prerequisite according to the productin request in hands ( Good control set up)
Second, Online workorder to Supervisior, All chief gets their no. of creation request ( to be finished on the web) - Good control set up
Third, Supervisor on hand, place the material prerequisite ( and if any overabundance necessity - " NO FURTHER APPROVAL" is made to store representative. here hazard is medium over the demand well beyond the Order indicates by the creation dept.
Fourthly, creation representatives itself are getting ready thier work tickets ( " NO AUTHENTICATION")- As tickets are finished by creation representatives itself control of information info or its endorsement is inadequate.
Fifth, Accountant decides himeslef the WIP , FG of the request over the crude information got as employment card, time card, material order Risk is bookkeeper simply need to verifiy the information from the information got from the creation L2 official as opposed to himself keep up the quantities of the activity.
From above it is anything but difficult to catch the degree of hazard at different level in the above procedure of Central creation Limited.
The following costs are budgeted for Harlow Corporation for next year: The costs above are based on a level of activity of 20,000 units. Assuming that this activity is within the relevant range, what would total cost per unit be for Harlow if the level of activity was only 18,000 units?
Answer:
$48.50
Explanation:
Harlow Corporation
First step is to calculate for Variable cost per unit:
Variable cost per unit =
$270,000 ÷ 20,000 units
= $13.50 per unit
Second step is to calculate for the cost function
Cost function :
Y = $630,000 + $13.50X
Y= $630,000 + $13.50(18,000)
Y=$630,000+$243,000
Y = $873,000
Therefore:
Total cost / number of units = total cost per unit$
Total cost =$873,000
Number of units= 18,000
$873,000 ÷ 18,000
= $48.50
Therefore the total cost per unit is $48.50
The operations manager of a mail order house purchases double (D) and twin (T) beds for resale. Each double bed costs $500 and requires 100 cubic feet of storage space. Each twin bed costs $300 and requires 90 cubic feet of storage space. The manager has $75,000 to invest in beds this week, and her warehouse has 18,000 cubic feet available for storage. Profit for each double bed is $300 and for each twin bed is $150. The manager's goal is to maximize profits.
Required:
What is not a feasible solution?
Answer:
Please see below for answer
Explanation:
It would not be feasible to invest the entire $75,000 amount on making double beds. Although the profit margin for the double beds is twice that of twin beds, it also requires more storage space and the market demand for double beds may not be as high as the twin beds. Hence, making double beds and ignoring twin beds completely might not make as much profit due to not being sold to begin with.
Bartel Corporation produces bar stools for restaurants.
1. For each of the following, indicate whether the cost would typically be considered direct or indirect cost for the cost object given.
A. Lubricants used on the bar stool manufacturing equipment.
B. The factory supervisor's salary for the bar stool factory.
C. The production labor wages for the bar stool assemblers.
D. Nails and screws used in the production of the bar stools.
E. Manufacturing costs for wood and steel used in the bar stools.
2. For each of the following, indicate whether the cost would typically be considered product or period cost for the cost object given.
A. Electricity costs to run the factory.
B. Accountant salaries.
C. Selling costs for the period.
D. Delivery costs to take the bicycles to stores.
E. Tires for the bicycles.
Answer: The answers are provided below
Explanation:
1. Direct cost are the major part of cost and can be traced to a cost object while indirect cost are typically small cost and difficult to trace to a specific cost object.
A. Lubricants used on the bar stool manufacturing equipment - indirect cost
B. The factory supervisor's salary for the bar stool factory - indirect cost
C. The production labor wages for the bar stool assemblers - direct cost
D. Nails and screws used in the production of the bar stools - direct cost
E. Manufacturing costs for wood and steel used in the bar stools - direct cost.
2. A manufacturer's product costs are direct labor, direct materials, and the manufacturing overhead that are used in making its products while the period costs are written as expenses in an accounting period. Period costs are associated with passage of time and examples include the general and administrative expenses, like rent, office supplies, office depreciation, and utilities
A. Electricity costs to run the factory - product cost
B. Accountant salaries - period cost
C. Selling costs for the period - period cost
D. Delivery costs to take the bicycles to stores - period cost
E. Tires for the bicycle - product cost
Imagine that you work in a call center. Your manager tells you that you need to answer 25% more calls per hour. In order to do this, you must spend less time with each caller, and your caller satisfaction scores are going down. By answering more phone calls but providing worse service, you ARE being __________ but NOT ___________.
Answer:
By answering more phone calls but providing worse service, you ARE being EFFICIENT but NOT SATISFY CUSTOMERS' NEEDS.
Explanation:
A worker's efficiency is measured by the total output per hour of labor. In this case, since you are answering more calls per hour, your efficiency is increasing (higher output per hour).
The quality of the service provided by a worker's is measured by the quality of their output (or performance), and if you satisfy your customers' needs. Since the service that you are providing is not that good, then your quality levels are decreasing.
You may be producing more services, but the services produced lack good quality.
A chain of supermarkets specializing in gourmet food, has been using the average cost method to value its inventory. During the current year, the company changed to the first-in, first-out method of inventory valuation. The president of the company reasoned that this change was appropriate since it would more closely match the flow of physical goods. This change should be reported on the financial statements as A. Change in accounting estimate. B. Affecting only future periods. C. Cumulative-effect type accounting change. D. Correction of an error.
Answer: Affecting only future periods.
Explanation:
From the question, we are informed that a chain of supermarkets specializing in gourmet food, that has been using the average cost method to value its inventory changed to the FIFO method in the current year.
This change should be reported on the financial statements as a retroactive effect type of an accounting change. This is necessary because it affects future period and in order to maintain comparability and consistency.
Insect control devices must and be able to retain the electrocuted insects inside the device
Answer:
Be rated for safety by the USDA
Explanation:
Presence of insect pest around areas of food production poses a lot of risk such as contamination of food which might impact negatively on public health. However, in an attempt to control these insect pests, the problem of food contamination as a result of insect infestation that we're trying to solve might still be increased if safety measures are not strictly adhered to when manufacturing and using insect control devices.
Hence, it is necessary and of utmost importance that insect control devices must be rated for safety by USDA to ensure compliance with laid down measures and protocols for safe control of insect without contamination of food.
Accounting Cycle Review 15 a-e
Cullumber Corporation’s trial balance at December 31, 2020, is presented below. All 2020 transactions have been recorded except for the items described below.
Debit
Credit
Cash
$26,100
Accounts Receivable
60,000
Inventory
23,300
Land
67,200
Buildings
81,700
Equipment
41,000
Allowance for Doubtful Accounts
$470
Accumulated Depreciation—Buildings
25,500
Accumulated Depreciation—Equipment
14,200
Accounts Payable
19,500
Interest Payable
–0–
Dividends Payable
–0–
Unearned Rent Revenue
7,200
Bonds Payable (10%)
44,000
Common Stock ($10 par)
28,000
Paid-in Capital in Excess of Par—Common Stock
5,600
Preferred Stock ($20 par)
–0–
Paid-in Capital in Excess of Par—Preferred Stock
–0–
Retained Earnings
65,330
Treasury Stock
–0–
Cash Dividends
–0–
Sales Revenue
570,000
Rent Revenue
–0–
Bad Debt Expense
–0–
Interest Expense
–0–
Cost of Goods Sold
380,000
Depreciation Expense
–0–
Other Operating Expenses
36,900
Salaries and Wages Expense
63,600
Total
$779,800
$779,800
Unrecorded transactions and adjustments:
1. On January 1, 2020, Cullumber issued 1,000 shares of $20 par, 6% preferred stock for $23,000.
2. On January 1, 2020, Cullumber also issued 1,000 shares of common stock for $24,000.
3. Cullumber reacquired 260 shares of its common stock on July 1, 2020, for $46 per share.
4. On December 31, 2020, Cullumber declared the annual cash dividend on the preferred stock and a $1.30 per share dividend on the outstanding common stock, all payable on January 15, 2021.
5. Cullumber estimates that uncollectible accounts receivable at year-end is $6,000.
6. The building is being depreciated using the straight-line method over 30 years. The salvage value is $5,200.
7. The equipment is being depreciated using the straight-line method over 10 years. The salvage value is $4,100.
8. The unearned rent was collected on October 1, 2020. It was receipt of 4 months’ rent in advance (October 1, 2020 through January 31, 2021).
9. The 10% bonds payable pay interest every January 1. The interest for the 12 months ended December 31, 2020, has not been paid or recorded.
(Ignore income taxes.)
Requirment: Prepare a Balance Sheet as at December 31, 2020.
Answer:
Cullumber CorporationBalance Sheet as of December 31, 2020:Current Assets:
Cash $61,140
Accounts Receivable 60,000
less allowance for doubtful 6,000 54,000
Inventory 23,300 138,440
Non-current Assets:
Land 67,200
Buildings 81,700
Accumulated Depreciation 28,050 53,650
Equipment 41,000
Accumulated Depreciation 17,890 23,110 143,960
Total Assets $282,400
Liabilities + Equity:
Current Liabilities:
Accounts Payable 19,500
Interest Payable 4,400
Dividends Payable 5,802
Unearned Rent Revenue 1,800 31,502
Non-current Liabilities:
Bonds Payable (10%) 44,000 $75,502
Equity:
Common Stock ($10 par) 38,000
Paid-in Capital in Excess of Par—Common 10,240
Preferred Stock ($20 par) 20,000
Paid-in Capital in Excess of Par—Preferred 3,000
Retained Earnings 138,258
Treasury Stock (2,600) 206,898
Total Liabilities + Equity $282,400
Explanation:
a) Cullumber Corporation's Unadjusted Trial Balance as of December 31, 2020:
Debit Credit
Cash $26,100
Accounts Receivable 60,000
Inventory 23,300
Land 67,200
Buildings 81,700
Equipment 41,000
Allowance for Doubtful Accounts $470
Accumulated Depreciation—Buildings 25,500
Accumulated Depreciation—Equipment 14,200
Accounts Payable 19,500
Interest Payable –0–
Dividends Payable –0–
Unearned Rent Revenue 7,200
Bonds Payable (10%) 44,000
Common Stock ($10 par) 28,000
Paid-in Capital in Excess of Par—Common Stock 5,600
Preferred Stock ($20 par) –0–
Paid-in Capital in Excess of Par—Preferred Stock –0–
Retained Earnings 65,330
Treasury Stock –0–
Cash Dividends –0–
Sales Revenue 570,000
Rent Revenue –0–
Bad Debt Expense –0–
Interest Expense –0–
Cost of Goods Sold 380,000
Depreciation Expense –0–
Other Operating Expenses 36,900
Salaries and Wages Expense 63,600
Total $779,800 $779,800
b) Cullumber Corporation's Adjusted Trial Balance as of December 31, 2020:
Debit Credit
Cash $61,140
Accounts Receivable 60,000
Inventory 23,300
Land 67,200
Buildings 81,700
Equipment 41,000
Allowance for Doubtful Accounts $6,000
Accumulated Depreciation—Buildings 28,050
Accumulated Depreciation—Equipment 17,890
Accounts Payable 19,500
Interest Payable 4,400
Dividends Payable 5,802
Unearned Rent Revenue 1,800
Bonds Payable (10%) 44,000
Common Stock ($10 par) 38,000
Paid-in Capital in Excess of Par—Common Stock 10,240
Preferred Stock ($20 par) 20,000
Paid-in Capital in Excess of Par—Preferred Stock 3,000
Retained Earnings 65,330
Treasury Stock 2,600
Cash Dividends 5,802
Sales Revenue 570,000
Rent Revenue 5,400
Bad Debt Expense 5,530
Interest Expense 4,400
Cost of Goods Sold 380,000
Depreciation Expense 6,240
Other Operating Expenses 36,900
Salaries and Wages Expense 63,600
Total $839,412 $839,412
c) Cash Account Adjustment:
Balance as per Trial Balance $26,100
Preferred Stock 23,000
Common Stock 24,000
Treasury Stock (11,960)
Adjusted Cash balance $61,140
d) Income Statement
Sales Revenue $570,000
Cost of goods sold 380,000
Gross profit $190,000
Rent Revenue 5,400
Total $195,400
less expenses:
Bad Debt Expense 5,530
Interest Expense 4,400
Depreciation Expense 6,240
Other Operating Expenses 36,900
Salaries and Wages Expense 63,600 116,670
Net Income $78,730
Retained Earnings 65,330
Dividends (5802)
Retained Earnings carried forward $138,258
Byer, a plastics processor, is considering the purchase of a high-speed extruder as one option. The new extruder would cost $50,000 and would have a residual value of $3000 at the end of its 6-year life. The annual operating expenses of the new extruder would be $5000. The other option that Byer has is to rebuild its existing extruder. The rebuilding would require an investment of $30,000 and would extend the life of the existing extruder by 6 years. The existing extruder has annual operating costs of $13,000 per year and does not have a residual value. Byer's discount rate is 12%. Using net present value analysis, which option is the better option and by how much? Present Value of $1 Periods 12% 14% 16% 6 0.507 0.456 0.410 8 0.404 0.351 0.305 10 0.322 0.270 0.227 12 0.257 0.208 0.168Present Value of Annuity of $1 Periods 12% 14% 16% 6 4.111 3.889 3.685 8 4.968 4.639 4.344 10 5.650 5.216 4.833 12 6.194 5.660 5.197
Answer:
Option of the new extruder is better by $14,411.16
Explanation:
The present value of each option needs to be determined in order that the cheaper option in present value terms can be recommended.
Present value of new extruder=$50,000/(1+12%)^0+$5000/(1+12%)^1+$5000/(1+12%)^2+$5000/(1+12%)^3+$5000/(1+12%)^4+$5000/(1+12%)^5+$5000/(1+12%)^6-$3000/(1+12%)^6=$ 69,037.14
The discount factor each year=1/(1+r)^n where is 12% discount rate and n is the year
resent value of old extruder=$30,000/(1+12%)^0+$13,000/(1+12%)^1+$13000/(1+12%)^2+$13000/(1+12%)^3+$13000/(1+12%)^4+$13000/(1+12%)^5+$13000/(1+12%)^6=$ 83,448.30
The first option is better since it has a lower preset value of costs of $ 69,037.14
Difference in PVs= 83,448.30-69,037.14=$14,411.16
A promise to make a gift for a charitable or educational purpose is unenforceable unless and until the institution to which to promise was made incurs obligations by relying on the promise. This exception is usually justified on the basis of either _____ or _____.
Answer:
This exception is usually justified on the basis of either promissory estoppel or public policy.
Explanation:
There are many Judicial devices and one of them is the Estoppel. In common law, there are legal systems which allow a court to use this device to prevent a person (corporate or individual) from making pronouncements or from defecting on their promise.
With regard to public policy, courts in recent cases have reached conclusions that pledges are legally enforceable regardless of whether or not the recipient of the promise has incurred liabilities based on the pledge, and that, the only way to ensure compliance with requirements of the law, a test of public policy is to ensure the promise is made good.
This thought holds true in Ohio where for example, a pledge has the same weight as a promissory note.
According to precedence established in Pennsylvania, any written promise can be enforced regardless of whether or not the pledger intends to be legally bound.
Cheers!
An insurance company faces an ethical dilemma. A faulty computer program designed to evaluate insurance claims has been denying a high number of valid claims. A meeting has been arranged where senior management would decide how to handle the situation. The people at the table have varying views of what action to take and why.Han wants to report the error and reimburse the affected customers immediately because he believes he could end up being fired if the company's reputation suffers because of the issue. Jamila wants to report the error because it is the honest thing to do, and therefore necessary.After hearing his colleagues' opinions, Keith says he is willing to do whatever the more experienced managers in the group recommend.Several other managers believe the company should correct the problem going forward but not do anything about the customers who lost out on past payments.Assume the meeting ends with the managers deciding not to do anything about the customers who are owed money for past claims. Lori, an employee who was present in the meeting, disagrees with the decision and gives an anonymous tip to a newspaper reporter about the unethical behavior. Which of the following best describes the action taken by Lori?A) Unethical stanceB) WhistleblowingC) ShadowingD) RelativismE) Ethnocentrism
Answer: B) Whistleblowing
Explanation:
Whistleblowing is an act where someone in a company discloses unethical practices usually from the entity that they work in. It is a very risky thing to do because it could signal the end of one's career in a certain industry.
Whistleblowing however helps in contributing to entities staying ethical because they'd rather avoid the bad publicity that comes with it and this is why most companies have a whistleblowing policy to make it easier for people to come forward.
Whistleblowing can be done to the Government, the press or even the entity at fault itself.
Lori by giving an anonymous tip to the press about unethical behavior has engaged in Whistleblowing.
Examples of some well known Whistleblowers include, Edward Snowden and Chelsea Manning.
A municipal bond is issued with a covenant that states "if revenue collections are insufficient, the state legislature has the authority, but not the obligation, to make an annual apportionment of funds necessary to meet debt service requirements." This is a:
Answer:
Moral obligation bond
Explanation:
Moral obligation bond is defined as a revenue bond that is issued by a municipality or by some other government body.
The benefits of moral obligation bonds are tax exemption and a moral pledge that there will be no default on the bond.
Usually a reserve fund is established in case the issuing body is unable to meet its debt obligations.
In this scenario the bond is issued with a covenant that states "if revenue collections are insufficient, the state legislature has the authority, but not the obligation, to make an annual apportionment of funds necessary to meet debt service requirements."
Le Son, Inc., has current liabilities of $11,700 an accounts receivable of $15,200. The firm has total assets of $43,400 and net fixed assets of $24,800. The owners' equity has a book value of $21,000. What is the amount of the net working capital
Answer:
Explanation:
These terms are culled from Balance sheet and Balance sheet have two sides, The Debit and Credit side. The debit side contain the Capital, Current Liabilities among others and The Credit side contain The Fixed asset and the Current asset
The amount of Net working capital is derived from Current asset - Current Liability
Net working capital = Current asset - Current Liability
Where Current asset = Total asset - Net Fixed asset= 43,400-24,800 = 18,600
Where Current Liability = 11,700
Therefore, Net working capital = $18,600 - $11,700 = $6,900
The amount of the net working capital = $6,900
Portman Industries just paid a dividend of $1.68 per share. The company expects the coming year to be very profitable, and its dividend is expected to grow by 20.00% over the next year. After the next year, though, Portman's dividend is expected to grow at a constant rate of 4.00% per year The risk-free rate (Rr) is 5.00%, the market risk premium (RPM) is 6.00%, and Portman's beta is 0.90 Term Value Dividends one year from now (Di Horizon value (P1) Intrinsic value of Portman's stock Assuming that the market is in equilibrium, use the information just given to complete the table What is the expected dividend yield for Portman's stock today? a. 6.15% b. 5.12% c. 6.79% d. 6.40% Now let's apply the results of your calculations to the following situation: Portman has 500,000 shares outstanding, and Judy Davis, an investor, holds 7,500 shares at the current price (computed above). Suppose Portman is considering issuing 62,500 new shares at a price of $26.78 per share. If the new shares are sold to outside investors, by how much will Judy's investment in Portman Industries be diluted on a per-share basis? a. $0.52 per share b. $0.44 per share c. $0.64 per share d. $1.09 per share Thus, Judy's investment will be diluted, and Judy will experience a total:_____.
Answer:
What is the expected dividend yield for Portman's stock today?
d. 6.40%
Suppose Portman is considering issuing 62,500 new shares at a price of $26.78 per share. If the new shares are sold to outside investors, by how much will Judy's investment in Portman Industries be diluted on a per-share basis?
a. $0.52 per share
Thus, Judy's investment will be diluted, and Judy will experience a total loss of $0.52 x 7,500 = $3,900
Explanation:
cost of equity = Re = risk free rate of return + (Beta × market premium) = 5% + (0.90 x 6%) = 10.4%
dividend in one year = $1.68 x 120% = $2.016
intrinsic stock price = $2.016 / (10.4% - 4%) = $31.50
expected dividend yield = dividend / stock price = $2.016 / $31.50 = 6.4%
Judy's loss per share = ($31.50 - $26.78) x (62,500 / 562,500) = $0.5244
Oriole Corporation reported the following for 2020: net sales $1,235,200, cost of goods sold $721,800, selling and administrative expenses $338,600, and an unrealized holding gain on available-for-sale debt securities $15,700.
Required:
Prepare a statement of comprehensive income, using (a) the one statement format, and (b) the two statement format. (Ignore income taxes and EPS).
Answer:
In both formats, net income is equal to $190,500
Explanation:
(a) the one statement format
The single step statement format is an income statement format that shows only one category of income and only one category of expenses. From the question, this can be prepared as follow:
Income = Net sales + unrealized holding gain on available-for-sale debt securities = $1,235,200 + $15,700 = $1,250,900
Expenses = Cost of goods sold + Selling and administrative expenses = $721,800 + $338,600 = $1,060,400
Oriole Corporation
Statement of comprehensive income
Details Amount ($)
Income 1,250,900
Expenses 1,060,400
Net income 190,500
(b) the two statement format.
The two step statement format is an income statement format that uses two category to separate income accounts based on their function by showing gross profit and other income separately to arrive operating income, and also show selling and administrative expenses on its own. This can be prepared as follows:
Oriole Corporation
Statement of comprehensive income
Details Amount ($)
Net sales 1,235,200
Cost of goods sold (721,800)
Gross profit 513,400
Other income:
Available-for-sale debt securities gain 15,700
Operating income 529,100
Expenses:
Selling and administrative expenses (338,600)
Net income 190,500
Use the In the News to answer three questions
IN THE NEWS Treasury Prices Fall with Improved Expectations Expectations of accelerated economic growth continue to boost yields on Treasury securities. The price of the Treasury's 2.0 percent 10-year bond fell $17.43 yesterday, from $843.88 to $826.45. The decline in the price of the treasury pushed the yield up from 2.37 percent to 2.42 percent. The 30-year bond also declined, increasing the yield from 2.96 to 3.00. Source: Market reports of January 6, 2017, What would the yield be on the 2.0 percent, $1,000, 10-year Treasury bond if the market price of the bonds were Instructions: Round your responses to two decimal places.
a. $1,000?
b. $800?
c. $1,200?
Answer:
2%
2.5%
1.67%
Explanation:
The yield can be computed using the yield formula which coupon payment divided by price.
The coupon payment=face value*coupon rate
face value is $1000
coupon rate is 2%
coupon payment=2%*$1000=$20
when price is $1000:
yield =$20/$1000=2%
when price is $800
yield=$20/$800=2.5%
when price is $1,200
yield =$20/$1,200=1.67%
In essence ,the lower the price the higher the yield as lower amount is invested in order to receive the same amount of annual coupon of $20
