Answer:
The answer is Risk because every time a stock holder or/and investor puts money into someone else company/business, it's not promising that they'll get their profit back because the company/business may not expand as they intended too.
The term investment risk refers to the possibility of an investor losing some or all of an investment. Hence, option A holds true.
What is an investment risk?An investment risk is the term that relates to the chances that determine the status of an investment in such class where there is no certainty in gaining good or substantial amount of returns.
Risks of an investor cannot be predicted, however, there are steps to divide the risks by investing in different classes of assets or debts as per the risk profile of an individual investor. A risk is directly related to the effect of profitability of an investment.
Hence, option A holds true regarding investment risk.
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g Dan Watson started a small merchandising business in Year 1. The business experienced the following events during its first year of operation. Assume that Watson uses the perpetual inventory system. Acquired $30,000 cash from the issue of common stock. Purchased inventory for $18,000 cash. Sold inventory costing $15,000 for $32,000 cash. Required a. Record the events in general journal format. b. Post the entries to T-accounts. c. Determine the amount of gross margin. d. What is the amount of net cash flow from operating activities for Year 1
Answer:
a. Journals
Cash $30,000 (debit)
Common Stock $30,000 (credit)
Cash in Exchange of Common Stock
Inventory $18,000 (debit)
Cash $18,000 (credit)
Cash Purchase of Inventory
Cash $32,000(debit)
Cost of Sales $15,000 (debit)
Sales Revenue $32,000 (credit)
Inventory $15,000 (credit)
Sale of Inventory on cash basis
b. T - Accounts
Cash Account
Debit :
Common Stock $30,000
Sales Revenue $32,000
Credit :
Inventory $18,000
Balance $44,000
Common Stock
Debit :
Balance $30,000
Credit :
Cash $30,000
Balance
Inventory
Debit :
Cash $18,000
Credit :
Cost of Sales $15,000
Balance $3,000
Sales
Debit :
Balance $32,000
Credit :
Cash $32,000
Cost of Sales
Debit :
Inventory $15,000
Credit :
Balance $15,000
c. Gross Margin = $17,000
d. net cash flow from operating activities for Year 1 = $14,000
Explanation:
Gross Margin = Sales - Cost of Sales
= $32,000 - $15,000
= $17,000
Net Cashflow from Operating Activities
Cash Paid to Suppliers ($18,000)
Calculation :
Cost of Sales $15,000
Add Increase in Inventory $3,000
Cash Paid to Suppliers $18,000
Cash Receipts from Customers $32,000
Net Cash From Operating Activities $14,000
Perteet Corporation's relevant range of activity is 3,900 units to 8,500 units. When it produces and sells 6,200 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 6.40 Direct labor $ 3.25 Variable manufacturing overhead $ 1.50 Fixed manufacturing overhead $ 3.50 Fixed selling expense $ 0.80 Fixed administrative expense $ 0.50 Sales commissions $ 0.60 Variable administrative expense $ 0.65 If 4,600 units are produced, the total amount of manufacturing overhead cost is closest to:
Answer:
Total overhead= $28,600
Explanation:
Giving the following information:
6,200 units:
Variable manufacturing overhead $1.50
Fixed manufacturing overhead $ 3.50
First, we need to calculate the total fixed manufacturing overhead:
Total fixed overhead= 3.5*6,200= 21,700
Now, for 4,600 units:
Total overhead= 4,600*1.5 + 21,700
Total overhead= $28,600
Cash flows from investing activities do not include cash flows from:a. Lending.b. The sale of equipment.c. Borrowing.d. The purchase of land and buildings.
Answer:
c. Borrowing
Explanation:
Borrowing in the Cash flow section is a financing activity for an organisation. Neither does it relates to Operating nor investing activities section. Cash flow from investing activities is the section on the cash flow statement that reports changes resulting from amounts spent activities such as investments in capital assets such as plant and equipment, investments.
Q2. A firm is currently using 12 machines, each machine is capable of producing 100 units of output. It anticipates that by the end of the year, 3 of its machines will wear out. - If it expects to sell 1600 units next year, how many machines will it buy?
Answer:
it should be 7 units
Explanation:
if 3 machines will wear out, they have 9 machines instead of 12, 9×100 each is 900
they still need 700 to get to 1600, so 700 divided by 100 per machine is 7 machines that they need to buy
To motivate employees to perform better, the human resources department of Martianse, a chain of retail apparel stores, replaced the company's fixed incentive system with a performance-based incentive system. In this scenario, Martianse's human resources department is most likely using _____. a. behavioral opportunism b. behavioral substitution c. behavioral deskilling d. behavioral disorientation
Answer:
- Behavioural Substitution
Explanation:
Martianse human resources department uses and deploy the concept of Behavioural Substitution.
To begin, Martianse goal, as a firm, is to motivate the employees to perform better. Hence, the human resources department has come up with measures to achieve that. It is thus believed that replacing the fixed incentive system hitherto known with the firm, should be replaced by a performance based system. By this, the firm believes its primary goal will be accelerated.
Behavioural Substitution is thus the concept that the human resources department has displayed in their analysis and engagement. For one, behavioural substitution is simply the procedures aimed at replacing and/or supplanting efforts and actions that does not lead to goal accomplishments. By general belief, the old style of reward system used by Martianse has been seen as one not leading to goal actualization. Hence, it is important to substitute this non productive reward system with one established to elicit more better and improved performance from the workforce.
please help i need to get a good grade
Answer:
Listening and being on target, checking my work.
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You have just received notification that you have won the $2.5 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you're around to collect), 63 years from now. What is the present value of your windfall if the appropriate discount rate is 7 percent
Answer:
PV= $35,217,78
Explanation:
Giving the following information:
Future value= $2,500,000
Number of periods= 63 years
Interest rate= 7% compounded annually
To calculate the value of the prize today, we need to use the following formula:
PV= FV/(1+i)^n
PV= 2,500,000 / (1.07^63)
PV= $35,217,78
Lake Power Sports sells jet skis and other powered recreational equipment. Customers pay 1/3 of the sales price of a jet ski when they initially purchase the ski, and then pay another 1/3 each year for the next two years. Because Lake has little information about collectibility of these receivables, they use the installment method for revenue recognition. In 2010 Lake began operations and sold jet skis with a total price of $900,000 that cost Lake $450,000. Lake collected $300,000 in 2010, $300,000 in 2011, and $300,000 in 2012 associated with those sales. In 2011 Lake sold jet skis with a total price of $1,500,000 that cost Lake $900,000. Lake collected $500,000 in 2011, $400,000 in 2012, and $400,000 in 2013 associated with those sales. In 2013 Lake also repossessed $200,000 of jet skis that were sold in 2011. Those jet skis had a fair value of $75,000 at the time they were repossessed.
A) In 2010, Lake would recognize realized gross profit of:_____.
a. $0.
b. $450,000.
c. $300,000.
d. $150,000.
B) In 2012, Lake would recgonize a realized gross profit of:_____.
a. $700,000.
b. $310,000.
c. $450,000.
d. $0.
C) In 2013, Lake would record a lost on repossessions of:_______.
a. $80,000.
b. $45,000.
c. $200,000.
d. $120,000.
D) In its December 31, 2011, balance sheet, Lake would report:______.
a. deferred gross profit of $700,000.
b. installement receivables (net) of $900,000.
c. installment receivables (net) of $750,000.
d. deferred gross profit of $1,500,000.
Answer:
1) In 2010, Lake would recognize realized gross profit of:______.
a) $0.
Revenue for calculating gross profit is only recognized when the cost of goods sold (COGS) has been fully recovered.
2) In 2012, Lake would recognize a realized gross profit of:_______.
c) $450,000.
gross profit related to 2010 sales = $900,000 - $450,000 (remaining COGS) = $450,000
gross profit related to 2011 sales = $900,000 - $900,000 = $0
3) In 2013, Lake would record a lost on repossessions of:______.
c) $200,000.
4) In its December 31, 2011, balance sheet, Lake would report:_______.
b) installment receivables (net) of $900,000.
total installments receivables = $300,000 + $1,000,000 = $1,300,000
remaining COGS from 2011 sales = $400,000
installment receivables (net) = $1,300,000 - $400,000 = $900,000
In one year the sales of a company increase at a constant rate. At 2 months the company sells 12 products, and after 8 months the company sells 30,000 products. (At t-0, the company does not necessarily have 0 sales)
a. Write an equation to model the situation.
b. If the company's sales continue to increase at the same rate, how long would it take before the company reached 145,000 sales? (Calculator permitted-round to 3 decimal places)
Answer:
The answer is below
Explanation:
a) Since sales of the company increases at a constant rate, it means that the function is a linear function. Let the time in months be the independent variable x and the sales be the dependent variable y. It can be represented as (x, y)
At 2 months the company sells 12 products, this can be represented by (2, 12). Also after 8 months the company sells 30,000 products, this can be represented by (8, 30000). The formula for a linear function is:
[tex]y-y_1=\frac{y_2-y_1}{x_2-x_1}(x-x_1)[/tex]
Using (2, 12) and (8, 30000):
[tex]y-y_1=\frac{y_2-y_1}{x_2-x_1}(x-x_1)\\\\y-12=\frac{30000-12}{8-2}(x-2)\\ \\y-12=4998(x-2)\\\\y-12=4998x-9996\\\\y=4998x-9984[/tex]
b) For a sales of 145000, i.e y = 145000
y = 4998x - 9984
145000 = 4998x - 9984
4998x = 145000 + 9984
4998x = 154984
x = 31.009
It would take about 31.009 months to make a sales of 145000
Flyaway Travel Company reported net income for 2021 in the amount of $90,000. During 2021, Flyaway declared and paid $2,125 in cash dividends on its nonconvertible preferred stock. Flyaway also paid $10,000 cash dividends on its common stock. Flyaway had 40,000 common shares outstanding from January 1 until 10,000new shares were sold for cash on April 1, 2021. What is 2021 basic earnings per share
Answer:
$1.85
Explanation:
Fyaway travels reported a net income of $90,000 for the year 2021
During 2021 they declared and paid a cash dividend of $2,125
They also paid $10,000 as cash dividend in common stock
Flyway has 40,000 shares outstanding
Therefore the 2021 basic earning per share can be calculated as follows
$90,000-2,125
= $87,875
40,000 shares+(10,000 shares×9/12)
40,000 shares +(10,000×0.75)
40,000+7500
= 47,500
87,875/47,500
= $1.85
Hence the basic earning per share for 2021 is $1.85
Which of the following is an example of ADR? two sisters ask their mother to intervene in a fight to see if one sister improperly borrowed the other sister's sweater an arbitrator decides a dispute between a Target employee and Target, over whether she was paid the correct overtime wage amount two neighbors in a dispute hire a third neighbor who's a lawyer to help them resolve their argument All of the other answers are correct
Answer:
All of the other answers are correct
Explanation:
Alternative Dispute Resolution (ADR) is the process of procedure for settling disputes without taking legal actions. Alternative dispute resolutions employed can be arbitration, mediation, or negotiation.
two sisters ask their mother to intervene in a fight to see if one sister improperly borrowed the other sister's sweater is an example mediation
an arbitrator decides a dispute between a Target employee and Target, over whether she was paid the correct overtime wage amount two neighbors is an example of arbitation
in a dispute hire a third neighbor who's a lawyer to help them resolve their argument is an example mediation
At the beginning of 2018, VHF Industries acquired a equipment with a fair value of $9,112,050 by issuing a four-year, noninterest-bearing note in the face amount of $12 million. The note is payable in four annual installments of $3 million at the end of each year. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. What is the effective rate of interest implicit in the agreement? 2. to 4. Prepare the necessary journal entry. 5. Suppose the market value of the equipment was unknown at the time of purchase, but the market rate of interest for notes of similar risk was 11%. Prepare the journal entry to record the purchase of the equipment.
Answer:
1) we can use the present value of an ordinary annuity formula to calculate the effective interest rate:
present value = annual payment x PV annuity factor (%, 4 periods)
9,112,050 = 3,000,000 x PV annuity factor (%, 4 periods)
PV annuity factor (%, 4 periods) = 9,112,050 / 3,000,000 = 3.03735
using a present value table, the % for 4 periods = 12%
2 to 4) January 2, 2018, equipment purchased by issuing non-interest-bearing note
Dr Equipment 9,112,050
Dr Discount on notes payable 2,887,950
Cr Notes payable 12,000,000
December 31, 2018, first installment paid on notes payable
Dr Notes payable 3,000,000
Dr Interest expense 1,093,446
Cr Cash 3,000,000
Cr Discount on notes payable 1,093,446
interest expense = 9,112,050 x 12% = 1,093,446
December 31, 2019, second installment paid on notes payable
Dr Notes payable 3,000,000
Dr Interest expense 864,660
Cr Cash 3,000,000
Cr Discount on notes payable 864,660
interest expense = 7,205,496 x 12% = 864,659.52 ≈ 864,660
December 31, 2020, third installment paid on notes payable
Dr Notes payable 3,000,000
Dr Interest expense 608,419
Cr Cash 3,000,000
Cr Discount on notes payable 608,419
interest expense = 5,070,156 x 12% = 608,418.72 ≈ 608,419
December 31, 2021, fourth installment paid on notes payable
Dr Notes payable 3,000,000
Dr Interest expense 321,425
Cr Cash 3,000,000
Cr Discount on notes payable 321,425
5) present value of equipment = 3,000,000 x 3.1024 (PV annuity factor, 115, 4 periods) = 9,307,200
Dr Equipment 9,307,200
Dr Discount on notes payable 2,692,800
Cr Notes payable 12,000,000
Which of the following are examples of positive externalities?
a. You are a bird watcher, and your neighbor puts up birdhouses and gardens to attract birds.
b. Your roommate is a smoker, but you are a nonsmoker.
c. Investments in private education raise your country's standard of living.
Answer:
Option “a” and “c”.
Explanation:
Option “a” and “c” are the positive externalities because the positive externalities are the ones that benefit to others. The activity of one person benefits the other person. So in the option, “A” neighbor put the birdhouses that will attract the birds that means another person who is a bird watcher will be benefited. Secondly, the investment in education will increase the country's GDP and the many people will be benefited from the education.
Andrew has been asked to estimate future cash flows for his company. He is having a hard time remembering how to estimate future cash flows from his accounting classes. Where should Andrew look to find this information, and which level of the conceptual framework will his new knowledge apply to
Answer: Andrew should look to find the information in SFAC No. 7. The level of the conceptual framework that his new knowledge will apply to is level 3.
Explanation:
From the question, we are informed that Andrew has been asked to estimate future cash flows for his company and that he is having a hard time remembering how to estimate future cash flows from his accounting classes.
Andrew should look to find the information in SFAC No. 7. The level of the conceptual framework that his new knowledge will apply to is level 3.
Which of the following statements about the relationship between interest rates and bond prices is true? I) There is an inverse relationship between bond prices and interest rates. II) There is a direct relationship between bond prices and interest rates. III) The price of short-term bonds fluctuates more than the price of long-term bonds for a given change in interest rates. (Assuming that coupon rate is the same for both) IV) The price of long-term bonds fluctuates more than the price of short-term bonds for a given change in interest rates. (Assuming that the coupon rate is the same for both)
Answer: A. I and IV only
Explanation:
The relationship between bond prices and interest is an inverse one. This is because bonds have fixed rates so when for instance interest rates increase, the fixed rate of bonds will become less attractive as people would want to make the higher interest. They will therefore demand less of bonds and the prices will drop. The reverse is true.
Also, long term bonds are more affected by interest rate changes then short term bonds. This is because, as they have a longer term till maturity, they will be even less attractive when interest rates rise.
Because the coupon rate is fixed, if the necessary rate rises, the bond price falls, and vice versa.
When interest rates vary, the value of long-term bonds fluctuates more than the value of short-term bonds. This is due to the bond's convex hull.
The price of a bond as well as the rate of interest have an inverse relationship.
So, Option "A" and "D" is the correct answer to the following question.
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Bob deposits the amount of $115 in his bank account today, and plans to deposit the amount of $150 in the same account one year from today, and finally plans to deposit the amount of $225 in the same account two years from now. If the interest rate is 7.65%, how much will Bob have accumulated in his account three years from today
Answer:$559.50
Explanation:
Using the formula
PV x (1 + r) ^ n = FV
where PV= Present value
r= rate
n=number of years
FV= Future value
a) Future value to earn in 3 yrs for amount of $115
115 x (1+7.65%) ^3 = $143.463
b) Future value to earn in 2 yrs for amount of $150
150 x (1+7.65%) ^2= $173.8278
c)Future value to earn in 1 year for amount of $225
225 x (1+7.65%) ^1= $242.2125
Total Amount Accumulated in three years = $143.463 + $173.8278+ $242.2125 =$559.5033 = $559.50
When is the acquisition program baseline prepared?
Answer:
The Acquisition Program Baseline (APB) is developed by the Program Manager (PM) before the initiation of a program for all Acquisition Category (ACAT) programs and depicts the current condition of a program.
Explanation:
The program manager creates the acquisition program baseline. It is created before the start of the program and accurately represents the program's conditions.
What is the importance of acquisition program?An agreement between the Program Manager (PM) and the Milestone Decision Authority (MDA) that documents the program's cost, schedule, and performance baselines.
It serves as the fundamental binding agreement between the Milestone Decision Authority (MDA), the Component Acquisition Executive (if applicable), and the Program Executive. It is developed before the program's start and appropriately portrays the program's conditions.
It also allows the program manager to compare the program's goals to the formal baseline. The Acquisition Program Baseline (APB) is created by the Program Manager (PM) prior to the start of any Acquisition Category (ACAT) program and shows the current state of the program.
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Martin operates a law practice as a sole proprietorship using the cash method of accounting. Martin incorporates the law practice and transfers the following items to a new, solely owned corporation.Adjusted BasisFMVCashEquipmentAccounts receivableAccounts payable (deductible expenses)Note payable (on equipment)$10,000 80,000 0 0 50,000$ 10,000 100,000 120,000 60,000 50,000Martin must recognize a gain of ________ and has a stock basis of ________:
Answer: $0; $40,000
Explanation:
The accounts payable is the money that a business or company owes its suppliers. It should be noted that on the balance sheet of a company, the accounts payable is a liability.
But under Sec 357(c), accounts payable are regarded as liabilities as the payable payment result in a deduction.
From the information given in the question, the stock basis will be equal to the addition of the cash basis and the equipment basis minus the liability transferred. This will be:
= $10,000 + 80,000 - $50,000
= $40,000
The possibility of incurring a loss is called?
Whenever possible, write on a subject _____.
a. that interests you.b. that you already know something about.c. that you have researched.
d. all of these.
Answer: d. All of these
Explanation:
When writing on a particular subject or topic, it's important to write on some things that interests you about what you're writing on, what you already know something about and what you have researched.
All the three options are vital if one wants to pay vivid attention to the subject that one is writing on. Having a previous knowledge gives one an advantage as one will be able to write on the subject well.
Which is a possible benefit of having a good credit history?
O getting a high interest rate on a credit card offer
O obtaining a low interest rate on a loan
obtaining a savings account
O having a paycheck garnished
Mark this and return
Save and Exit
Answer:
B. obtaining a low interest rate on a loan
Explanation:
Answer:
b
Explanation:
got it right on test
Washington Inc. issued $846,000 of 6%, 20-year bonds at 98 on January 1, 2009. Through January 1, 2017, Washington amortized $9,840 of the bond discount. On January 1, 2017, Washington Inc. retired the bonds at 102 (after making the interest payment on that date). What is the gain or loss that Washington Inc. would report for the retirement of this bond
Answer:
Bond discount at the issuance of bond = $846,000 - ($846,000/100 *98)
Bond discount at the issuance of bond = $846,000- $829,080
Bond discount at the issuance of bond = $16920
Bond Payable = $846,000
Un-amortized bond discount = $16,920 - $9,840
Un-amortized bond discount = $7,080
Redemption Value of Bond = 102/100 * $846,000
Redemption Value of Bond = $ 862,920
Loss on retirement on Bond = Redemption Value of Bond - (Bond Payable - Un-amortized bond discount)
Loss on retirement on Bond = $862,920 - ($846,000 - $7,080)
Loss on retirement on Bond = $862,920 - $838,920
Loss on retirement on Bond = $24,000
Foreign tourists have been visiting the Dogon for decades. As time goes by more and more Dogon perform with their art in order to earn an income from the tourist trade. This has completely changed the context in which Dogon art is made, used, and understood. What could some of the social, cultural, global, and economic benefits of this change be
Explanation:
There may be several social, cultural, global and economic benefits from tourism.
For the Dogon, the attraction of foreign tourists may imply greater recognition of their art and therefore the benefit of achieving through tourism the benefits of greater appreciation of their cultural heritage, strengthening the Dogon society and preserving their culture, in addition to the tourism encourages income generation for dogon citizens that promotes greater economic development for the country and greater global recognition.
A borrower is interested in comparing the monthly payments on two otherwise equivalent 30 year FRMs. Both loans are for $100,000 and have a 7% interest rate. Loan 1 is fully amortizing, where as Loan 2 has negative amortization with a $120,000 balloon payment due at the end of the life of the loan. How much higher is the monthly payment on loan 1 versus loan 2? (Hint: calculate both payments and take the difference. Only the future values of the loans are different. Round your answer to two decimal places.)
Answer: $98.36
Explanation:
Based on the information that has already been given in the question, the following can be analysed:
For Loan 1:
Interest Rate = 7%
Nper = 30
Present value = $100000
With the above information, we can use the Excel calculator to solve further. To get the monthly payment for the first loan will be:
= pmt(rate, nper, pv,fv)
= pmt(7%/12,30×12,-100000,0)
= pmt(0.07/12,360,-100000,0)
= $665.30
For Loan 2:
Interest Rate = 7%
Nper = 30
Present value = $100000
Future value = $120000
With the above information, we can use the Excel calculator to solve further. To get the monthly payment for the first loan will be:
= pmt(rate, nper, pv,fv)
= pmt(7%/12,30×12,-100000,120000)
= pmt(0.07/12,360,-100000,120000)
= $566.94
The difference in the monthly payments will be:
= $665.3 - $566.94
= $98.36
The agency problem wherein ownership and control of a corporation are separate is associated with:_______
Answer: The shareholder model of corporate governance
Explanation:
The agency problem is typically a conflict of interest in a relationship whereby a party is expected to act in the best interest of the other party. It should be noted that in corporate finance, the agency problem is a conflict of interest that takes place between the management of the company and the stockholders.
The agency problem wherein ownership and control of a corporation are separate is associated with the shareholder model of corporate governance.
Go to www.federalreserve.gov/releases/h6/Current/ to access the information. 1. Answer these questions about the money supply. a. Differentiate between M1 and M2 b. What has been the growth rate in M1 and M2 over the last twelve months? c. From what you know about the state of the economy, does this seem expansionary or restrictive? Why?
Explanation:
Note, M1 and M2 represents the value of the United States money supply.
According to information found on the Federal Reserve website, the growth rate in M1 and M2 over the last twelve months for
M1= 38.1
M2= 23.3
They are expansionary considering the effect of the pandemic on the economy.
How much income should the taxpayer recognize in each of the following situations? a. Julius owns a 25% interest in the Flyer Company, which is organized as a partnership. During the current year, he is paid $14,000 by Flyer as a distribution of earnings. Flyer's taxable income for the year (calculated without any payments made to partners) is $60,000. Julius should recognize an income of $ .
Answer:
Mr Julius income in the partnership is $15,000
Explanation:
In a partnership, partners are taxed on the individual share of income. Here, the interest sharing of Mr Julius in Flyer Company is 25% and the taxable income of Flyer Company is $60,000. Hence, Mr Julius income in the partnership is $60,000 * 25% = $15,000.
Note: $14,000 is not included in Mr Julius income because it is a return on partnership investment. It is treated as reduction in basis of the investment.
a. What will the operating profit be? b. What is the impact on operating profit if the sales price decreases by 10 percent? Increases by 20 percent? c. What is the impact on operating profit if variable costs per unit decrease by 10 percent? Increase by 20 percent? d. Suppose that fixed costs for the year are 10 percent lower than projected, and variable costs per unit are 10 percent higher than projected. What impact will these cost changes have on operating profit for the year? Will profit go up? Down? By how much?
Answer:
a. Operating Profit will be;
= Sales - Costs
= (270 - 120 ) * 5,000 - 300,000
= $450,000
b. Sales price increases by 20% = 270 * ( 1 + 20%)
= $324
Sales price decreases by 10% = 270 * ( 1 - 10%)
= $243
Operating profit if price decreases;
= (243 - 120 ) * 5,000 - 300,000
= $315,000
Operating profit if price increases;
= ( 324 - 120) * 5,000 - 300,000
= $720,000
c. Variable cost increases by 20% = 120 * ( 1 + 20%)
= $144
Variable Cost decreases by 10% = 120 * ( 1 - 10%)
= $108
Operating profit if variable cost decreases;
= (270 - 108 ) * 5,000 - 300,000
= $510,000
Operating profit if variable cost increases;
= ( 270 - 144 ) * 5,000 - 300,000
= $330,000
d. Fixed costs lower by 10% = 300,000 8 ( 1 - 10%)
= $270,000
Variable costs increase higher by 10% = 120 * ( 1 + 10%)
= $132
= (270 - 132) * 5,000 - 270,000
= $420,000
Operating profit will be down by $30,000 as a result of a 10% increase in variable costs and a 10% decrease fixed costs.
Which statement best describes a business creating an incentive, or a benefit?
Answer:
B. A restaurant offers a discounted price on a new type of dish.
Explanation:
Here are the options to this question :
Which statement best describes a business creating an incentive?
A. A factory increases production to respond to growing demand.
B. A restaurant offers a discounted price on a new type of dish.
C. A car dealership increases the price on a car when it becomes
more popular
D. A retailer stops carrying a product that doesn't sell well in its
stores
An incentive is a motivation to carry out a particular activity.
If the price of fish is discounted, consumers would be motivated and willing to purchase the fish because of the reduced price
The Alpine House, Inc., is a large retailer of snow skis. The company assembled the information shown below for the quarter ended March 31: Amount Sales $ 150,000 Selling price per pair of skis $ 750 Variable selling expense per pair of skis $ 50 Variable administrative expense per pair of skis $ 10 Total fixed selling expense $ 20,000 Total fixed administrative expense $ 20,000 Beginning merchandise inventory $ 30,000 Ending merchandise inventory $ 40,000 Merchandise purchases $ 100,000 Required: 1. Prepare a traditional income statement for the quarter ended March 31. 2. Prepare a contribution format income statement for the quarter ended March 31. 3. What was the contribution margin per unit?
Answer:
Results are below.
Explanation:
First, we need to calculate the cost of goods sold:
COGS= beginning finished inventory + cost of goods purchased - ending finished inventory
COGS= 30,000 + 100,000 - 40,000
COGS= 90,000
Now, the number of skis sold:
Units sold= 150,000/750= 200 units
Traditional income statement:
Sales= 150,000
COGS= (90,000)
Gross profit= 60,000
Total selling expense= (50*200 + 20,000)= (30,000)
Total administrative expense= (10*200 + 20,000)= (22,000)
Net operating income= 8,000
Contribution format income statement:
Sales= 150,000
Total variable cost= (90,000 + 50*200 + 10*200)= (102,000)
Contribution margin= 48,000
Total fixed selling expense= (20,000)
Total fixed administrative expense= (20,000)
Net operating income= 8,000
1. Traditional income statement for the quarter ended March 31 is $8,000.
2. Contribution format income statement for the quarter ended March 31 is $8,000.
3. The contribution margin per unit is 240.
Income statement:1. Alpine House, Inc., Traditional Income Statement
Sales revenue $150,000
Cost of goods sold $90,000
($30,000 + $100,000 - $40,000)
Gross margin $60,000
Selling and administrative expenses:
Selling expenses $30,000
[(150,000/750×50)+$20,000)]
Administrative expenses $22,000
[(150,000/750×10)+$20,000)]
Total selling and administrative expenses $52,000
Net operating income $8,000
2. Alpine House, Inc., Contribution format Income Statement
Sales revenue $150,000
Variable expenses:
Cost of good sold sold $90,000
Selling expenses $10,000
Administrative expenses $2,000
Total variables expenses $102,000
Contribution margin $48,000
Fixed expenses:
Selling expenses $20,000
Administrative expenses $20,000
Total fixed cost $40,000
Net operating income $8,000
3. Selling price per unit 750
Variable cost per unit 510
(102,000/200)
Contribution margin per units 240
Inconclusion traditional income statement for the quarter ended March 31 is $8,000, contribution format income statement for the quarter ended March 31 is $8,000, and the contribution margin per unit is 240.
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