Answer and Explanation:
The preparation of company's flexible budget performance report for February is shown below:-
Arrasmith Corporation
Flexible budget performance report
For the month ended February
Planing Activity Flexible Revenue and Actual
budget variance budget spending result
variance
Customer
served 37,000 - 27,000 27,000
Revenue $203,500 $55,000 U $148,500 $11,300 F $159,800
(37,000 × $5.50q) (27,000 × $5.50q)
Expenses
Wages and
salaries $98,100 $17,000 F $81,100 $11,100 F $70,000
(37,000 × 1.70) + 35,200) (27,000 × 1.70) + 35,200
Supplies $40,700 $11,000 F $29,700 $13,300 F $70,000
(37,000 × 1.10) (27,000 × 1.10)
Insurance $12,400 $0 $12,400 0 $12,400
Miscellaneous
expenses $26,900 $5,000 F $21,900 $5,800 U $27,700
(37,000 × 0.50) + 8,400 (27,000 × 0.50) + 8,400
Total
expenses $178,100 $33,000 F $141,500 $18,600 F $126,500
Net operating
income $25,400 $22,000 U $3,400 $29,900 F $33,300
Therefore to reach net operating income we simply deduct the total expenses from Revenue.
Answer and Explanation:
As per the data given in the question,
ArraSmith Corporation
Flexible budget performance report
Planning Activity Flexible Revenue & spending Actual
budget Variance budget Variance Results
Customer served 37,000 27,000 27,000
Revenue $203,500 $55,000 U $148,500 $11,300 F $159,800
Expenses:
Wages and Salaries $98,100 $17,000 F $81,100 $11,100 F $70,000
Supplies $40,700 $11,000 F $29,700 $13,300 F $16,400
Insurance $12,400 0 $12,400 0 $12,400
Miscellaneous expense $26,900 $5,000 F $21,900 $5,800 U $27,700
Total expense $178,100 $33,000 F $145,100 $18,600 F $126,500
Net Operating Income $25,400 $22,000 U $3,400 $29,900 F $33,300
Suppose that the U.S. government decides to charge wine consumers a tax. Before the tax, 50,000 bottles of wine were sold every week at a price of $5 per bottle. After the tax, 44,000 bottles of wine are sold every week; consumers pay $6 per bottle (including the tax), and producers receive $2 per bottle. The amount of the tax on a bottle of wine is $ per bottle. Of this amount, the burden that falls on consumers is $ per bottle, and the burden that falls on producers is $ per bottle. True or False: The effect of the tax on the quantity sold would have been larger if
Answer:
$4
$1 and $3
False
Explanation:
As per the data given in the question,
a)
Amount of tax for each bottle is $4 because the sellers are receiving $2 and buyers are paying $6. Therefore,
Amount of the tax on a bottle of wine is $6 - $2 = $4
b)
Burden on the consumer = $6 - $5
= $1
Burden on the seller = $4 - $1
= $3
c)
False, because the tax incidence depends on the flexibility or elasticity of market.
What are antitrust laws? Laws governing the management of state-owned enterprises. Legislation enacted to prevent the encroachment of government into the private sector. Laws meant to protect businesses from unfair treatment from consumers. Laws meant to eliminate collusion and promote competition among firms. Identify the first antitrust law and its purpose. The Clayton Act of 1950 toughened restrictions on mergers by prohibiting any merger that leads to reduced competition. The Federal Trade Commission Act of 1914 established the FTC. The Robinson-Patman Act of 1936 prohibited anticompetitive price discrimination. The Sherman Act of 1890 prohibits price fixing, collusion, and monopolization. The Clayton Act of 1890 prohibits firms from owning stock in competing firms. The Sherman Act of 1914 established the Federal Trade Commission.
Answer: 1. Laws meant to eliminate collusion and promote competition among firms.
2. The Sherman Act of 1890 prohibits price fixing, collusion, and monopolization.
Explanation:
1. Anti-trust laws are meant to protect the customer from predatory practices by businesses such as collusion hence ensuring that there is competition in the market for the benefit of the consumer.
2. Named after the man who introduced it, Sen. John Sherman, the Sherman Act was passed in 1890 as the first Anti-trust law in the United States of America. It was meant to ensure that competition existed between Enterprises for the benefit of ordinary citizens.
Marcellus Company is involved in a lawsuit. Footnote disclosure of the contingent liability which could arise does not have to be presented if the probability of Marcellus owing money as a result of the lawsuit is A) reasonably possible and the amount cannot be reasonably estimated. B) probable and the amount cannot be reasonably estimated. C) reasonably possible and the amount can be reasonably estimated. D) remote and the amount can be reasonably estimated.
Answer:
The answer is option B) probable and the amount cannot be reasonably estimated.
Explanation:
Contingency liability is the likelihood that a liability might occur sometimes in the future in the face of uncertain circumstances. To validate a contingency liability, the fa cts presented has to be reasonably possible and reasonably estimated.
in the case of Marcellus Company, footnote disclosure of the contingent liability which could arise does not have to be presented if the probability of Marcellus owing money as a result of the lawsuit is probable and the amount cannot be reasonably estimated.
Which of the following is true of a stock dividend? Multiple Choice It is a liability on the balance sheet. The decision to declare a stock dividend resides with the shareholders. Transfers a portion of equity from retained earnings to a cash reserve account. Does not affect total equity, but transfer amounts between the components of equity. Reduces a corporation's assets and stockholders' equity.
Answer:
Yes it is true that a stock dividend does not affect total equity.
Explanation:
A stock dividend is a non cash payment given to shareholders. Instead of cash, additional shares that is equivalent to the earnings that accrue is given to shareholders.
While this may increase the number of shares held, it does not affect total equity.
One of the benefits of stock dividends tax exemption and retained equity which translates to additional investment.
However, the additional; shares created could dilute the share prices.
Costs of $6,500 were incurred to acquire goods and make them ready for sale. The goods were shipped to the buyer (FOB shipping point) for a cost of $350. Additional necessary costs of $700 were incurred to acquire the goods. No other incentives or discounts were available. What is the buyer’s total cost of merchandise inventory?
Answer:
Total cost of merchandise inventory = $7,550
Explanation:
The total cost of merchandise inventory, is the sum total of all the costs incurred in the acquisition of the goods, and it is calculated as shown below:
cost of goods = $6,500
cost of shipping = $350
Additional necessary cost = $700
∴ Total cost of merchandise inventory = cost of goods + cost of shipping + Additional necessary cost
Total cost of merchandise inventory = 6,500 + 350 + 700 = $7,550
Schwiesow Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 7.05 Direct labor $ 3.50 Variable manufacturing overhead $ 1.65 Fixed manufacturing overhead $ 11,000 Sales commissions $ 1.00 Variable administrative expense $ 0.40 Fixed selling and administrative expense $ 5,500 If the selling price is $18.70 per unit, the contribution margin per unit sold is closest to:
Answer:
The contribution margin per unit is $5.1
Explanation:
The contribution margin per unit is the amount from selling price per unit after deducting all the related variable costs per unit. This is the amount that each product contributes towards covering the fixed costs.
Contribution margin per unit:
Selling price per unit 18.7
Less : Variable cost per unit
Direct material (7.05)
Direct labor (3.5)
Variable manufacturing Overhead (1.65)
Sales commission (1.00)
Variable Admin expense (0.40)
Contribution margin per unit 5.1
Selected information from Illikon Corporation's accounting records and financial statements for 2021 is as follows ($ in millions): Cash paid to acquire equipment $ 120 Cash paid to acquire land 54 Treasury stock acquired with cash and then retired 75 Dividend revenue received 66 Gain from the sale of buildings 78 Proceeds from sale of buildings 135 In its statement of cash flows, Illikon should report net cash outflows from investing activities of:
Answer:
$39
Explanation:
According to the scenario, computation of the given data are as follows:
We can calculate the Net cash outflow by using following formula:
Net cash outflow from investing activities to be reported = Cash paid to acquire equipment + Cash paid to acquire land - Proceeds from sale of building
By putting the value in the formula, we get
= $120 + $54 - $135
= $39
Hence, Net cash outflow from investing activities to be reported is $39.
What is the difference between change in quantity supplied and change in supply?
Answer:
A change in quantity supplied is a movement along the supply curve in response to a change in price. A change in supply is a shift of the entire supply curve in response to something besides price.
Explanation:
Fresher Foods, Inc., orally agreed to purchase one thousand bushels of corn for $1.25 per bushel from Dale Vernon, a farmer. Fresher Foods paid $125 down and agreed to pay the remainder of the purchase price on delivery, which was scheduled for one week later. When Fresher Foods tendered the balance of $1,125 on the scheduled day of delivery and requested the corn, Vernon refused to deliver it. Fresher Foods sued Vernon for damages, claiming that Vernon had breached their oral contract.
Can Fresher Foods recover? If so, to what extent?
Answer:
In the case of Fresher Goods, Inc.v. Vernon, the trial court will possibly conclude that Vernon must complete the portion of the payment which has already been compensated for as a result of partial results.
Explanation:
Vernon accepted partial payment for the sold goods. While the Law of Frauds demanded that any contract for the selling of goods at a price of $500 or more be enforceable in writing, the oral arrangement was partially compensated and agreed by all parties. That part of the deal was binding, so Vernon would supply 100 corn bushels to Fresher for $1.25 per bushel.
A corporation issued 5,900 shares of $10 par value common stock in exchange for some land with a market value of $88,000. The entry to record this exchange is:
a. Debit Land $88,000; credit Common Stock $88,000.
b. Debit Land $59,000; credit Common Stock $59,000.
c. Debit Common Stock $59,000; debit Paid-In Capital in Excess of Par Value, Common Stock $29,000; credit Land $88,000.
d. Debit Land $88,000; credit Common Stock $59,000; credit Paid-In Capital in Excess of Par Value, Common Stock $29,000.
e. Debit Common Stock $88,000; credit Land $88,000.
Answer:
The correct answer is option (d)Debit Land $88,000; credit Common Stock $59,000; credit Paid-In Capital in Excess of Par Value, Common Stock $29,000.
Explanation:
Solution
Given that:
Since the fair value of the Land is more readily known,
Then,
The Fair Market value of Land $88,000 will be taken as basis for valuation.
So entry will be :
Land Dr $88,000
Common Stock Cr $ 59,000
Paid in Capital in Excess of Par -Common Stock Cr 29,000
So a option is correct
The ratios that are used to determine a company's short-term debt paying ability are A. current ratio, account receivable turnover, and inventory turnover. B. times interest earned, inventory turnover, current ratio, and receivables turnover. C. times interest earned, accounts receivable turnover ratio, current ratio, and inventory turnover. D. asset turnover, times interest earned, current ratio, and accounts receivables turnover.
Answer:
A. Current ratio, account receivable turnover, and inventory turnover.
Explanation:
Accounts receivable which is also known to be A/R turnover, is calculated by dividing a firm’s sales by its accounts receivable. It is a measure of how efficiently a company is able to collect on the credit it extends to customers. A firm that is very good at collecting on its credit will have a lower accounts receivable turnover ratio.
While inventory turnover is a measure of how efficiently a company turns its inventory into sales. It is calculated by taking the cost of goods sold and dividing it by inventory.
The basic fact is that any industry that extends credit or has physical inventory will benefit from analysis of its accounts receivable turnover and inventory turnover ratios. It might be easier to cover companies that operate with lower or negligible levels of accounts receivable and inventory.
Answer:
A. current ratio, account receivable turnover, and inventory turnover.
Explanation:
The ratios that are used to determine a company's short-term debt paying ability are referred to as liquidity ratios.
Liquidity ratios shows the analysis of the ability of a company to pay its current liabilities and other obligations tuning current assets to cash without touching the fixed assets.
Examples of such ratios are current ratio, account receivable turnover, and inventory turnover.
Therefore, option C is correct.
Photon Technologies, Inc., a manufacturer of batteries for mobile phones, signed a contract with a large electronics manufacturer to produce three models of lithium-ion battery packs for a new line of phones. The contract calls for the following
Battery Pack Production Quantity
PT-100 200,000
PT-200 100,000
PT-300 150,000
Photon Technologies can manufacture the battery packs at manufacturing plants located in the Philippines and Mexico. The unit cost of the battery packs differs at the two plants because of differences in production equipment and wage rates. The unit costs for each battery pack at each manufacturing plant are as follows:
Plant
Product Philippines Mexico
PT-100 0.95 0.98
PT-200 1.34 0.98
PT-300 1.06 1.15
The PT-100 and PT-200 battery packs are produced using similar production equipment available at both plants. However, each plant has a limited capacity for the total number of PT-100 and PT-200 battery packs produced. The combined PT-100 and PT-200 production capacities are 175,000 units at the Philippines plant and 160,000 units at the Mexico plant. The PT-300 production capacities are 75,000 units at the Philippines plant and 100,000 units at the Mexico plant. The cost of shipping from the Philippines plant is $0.15 per unit, and the cost of shipping from the Mexico plant is 0.08 per unit.
(a) Develop a linear program that Photon Technologies can use to determine how many units of each battery pack to produce at each plant to minimize the total production and shipping cost associated with the new contract.
(b) Solve the linear program developed in part (a), to determine the optimal production plan. Qty Produced Phillipines Mexico PT-100 16000c 40000 PT-200 100000 0 5000 1000 PT-300 Total Cost-$
(c) Use sensitivity analysis to determine how much the production and/or shipping cost per unit would have to change to produce additional units of the PT-100 in the Philippines plant. If required, round your answer to two decimal digits At least $ / unit.
(d) Use sensitivity analysis to determine how much the production and/or shipping cost per unit would have to change to produce additional units of the PT-200 in the Mexico plant. If required, round your answer to two decimal digits. At least $ .05/ unit.
Answer:
Check the explanation
Explanation:
a) Linear program model:
Decision variables: Let
P1 = Number of PT-100 products produced at Philippines plant
P2 = Number of PT-200 products produced at Philippines plant
P1 = Number of PT-300 products produced at Philippines plant
M1 = Number of PT-100 products produced at Mexico plant
M2 = Number of PT-200 products produced at Mexico plant
M3 = Number of PT-300 products produced at Mexico plant
Objective: Min (0.95+0.15)P1 + (0.98+0.15)P2 + (1.34+0.15)P3 + (0.98+0.08)M1 + (1.06+0.08)M2 + (1.15+0.08)M3
or,
Min 1.10P1 + 1.13P2 + 1.49P3 + 1.06M1 + 1.14M2 + 1.23M3
s.t.
P1 + M1 ≥ 200,000
P2 + M2 ≥ 100,000
P3 + M3 ≥ 150,000
P1 + P2 ≤ 175,000
M1 + M2 ≤ 160,000
P3 ≤ 75,000
M3 ≤ 100,000
P1, P2, P3, M1, M2, M3 ≥ 0
(b) Solution of the linear program using Excel Solver can be seen in the first attached image below.
Formula: H2 =SUMPRODUCT(B2:G2,$B$11:$G$11) copy to H2:H9
Optimal Solution:
Decision Variable Value
P1 40000
P2 100000
P3 50000
M1 160000
M2 0
M3 100000
Total production and shipping cost = $ 524,100
Sensitivity report can be seen in the second attached image below.
Referring to above sensitivity analysis,
(c) Allowable decrease in objective coefficient of P1 is 0.04 therefore production and/or shipping cost per unit has to decrease by $ 0.04 to produce additional units of PT-100 in Philippines plant.
(d) Allowable decrease in objective coefficient of M2 is 0.05 therefore production and/or shipping cost per unit have to be decreased by $ 0.05 to produce additional units of PT-200 in Mexico plant.
Consider two ways of commuting in a crowded city: taking public transportation, such as subway and buses, or driving your own car.
A person who chooses to take public transportation in a crowded city imposes a _________ externality on drivers. A policy implication of this result is a _________ those who take public transportation.
Persons who choose to drive their own cars to get around in a crowded city impose a _______ externality on other drivers. A policy implication of this result is a ________ those who drive their own cars.
Answer:
Positive; Subsidy for
Negative; Tax on
Explanation:
An externality is the economic term that describes a cost or benefit incurred or received by a third party, over which said party has no control over its development.
When externalities result in a benefit for a certain group they are said to be positive and when it is detrimental it is said to be negative.
Taking public transportation in a crowded city is benefitial to drivers making this a positive externality. In order to encourage people to take public transportation, a subsidy for those who take transportation may be adopted.
On the other hand, people who choose to drive their own car impose a negative externality and may encourage a tax on those who drive their own car.
Berne, Inc. uses a flexible budget for manufacturing overhead based on machine hours. Variable manufacturing overhead costs per machine hour are as follows: Indirect labor $5.00 Indirect materials 2.50 Maintenance .80 Utilities .30 Fixed overhead costs per month are: Supervision $800 Insurance 200 Property taxes 300 Depreciation 900 The company believes it will normally operate in a range of 2,000 to 4,000 machine hours per month. Prepare a flexible manufacturing overhead budget for the expected range of activity, using increments of 1,000 machine hours. (List variable costs before fixed costs.)
Answer and Explanation:
As per the data given in the question,
Flexible manufacturing overhead budget
Activity level :
Machine hours 2,000 hours 3,000 hours 4,000 hours
Variable costs :
Indirect labor $5 $10,000 $15,000 $20,000
Indirect material $2.50 $5,000 $7,500 $10,000
Maintenance $0.80 $1,600 $2,400 $3,200
Utilities $0.30 $600 $900 $1,200
Total variable cost $22,600 $25,800 $34,400
Fixed costs :
Supervision $800 $800 $800
Insurance $200 $200 $200
Property taxes $300 $300 $300
Depreciation $900 $900 $900
Total Fixed cost $2,200 $2,200 $2,200
Total Cost $24,800 $28,000 $36,600
Suppose Mr. Lane just bought a share of BlueWind Co., a renewable energy startup. BlueWind promises to pay Mr. Lane $18 in dividends for one year and then the firm will shut down. Suppose that the liquidation value of the share is $3, and the rate of time preference is 5%. Then, according to the single-period dividend discount model, the present value of the cash payment received by Mr. Lane in one year would be
Answer:
The present value of the cash payment is $20
Explanation:
The present value of cash payment receivable by Mr Lane in one year's time is the today's equivalent amount of the dividend of $18 as well as the liquidation value of $3.
The present value is the total cash inflows multiplied by the discount factor
discount factor=1/(1+r)^n
where is the rate of time preference of 5%'
n is 1 i.e in one year's time
total cash inflows=$18+$3=$21
discount factor =1/(1+5%)^1=0.95238
present value of cash payment=0.95238*$21=$20
In performing accounting services for small businesses, you encounter the following situations per taining to cash sales. 1. Poole Company enters sales and sales taxes separately in its cash register. On April 10, the register totals are sales $30,000 and sales taxes $1,500. 2. Waterman Company does not segregate sales and sales taxes. Its register total for April 15 is $25,680, which includes a 7% sales tax. Prepare the entry to record the sales transactions and related taxes for each client.
Answer and Explanation:
According to the scenario, journal entries of the given data are as follow:-
1.Journal Entry of Poole Company
April 10
Cash A/c Dr. $31,500
To Sales A/c $30,000
To Sales tax payable A/c $1,500
(Being the sales and sales tax payable is recorded)
2. Since Register total for April $25,680 includes 7% sales tax.
So Sales of Waterman Company
= Registered Total Amount ÷ (1 + Sales Tax Rate)
= $25,680 ÷ (1 + 7%)
= $25,680 ÷ 1.07
= $24,000
Now
Sales tax = $24,000 × 7% = $1,680
Journal Entry of Waterman Company
On 15 April
Cash A/c Dr. $25,680
To Sales A/c $24,000
To Sales tax payable A/c $1,680
(Being the sales and sales tax payable is recorded)
The predetermined overhead rate for Zane Company is $5, comprised of a variable overhead rate of $3 and a fixed rate of $2. The amount of budgeted overhead costs at normal capacity of $150000 was divided by normal capacity of 30000 direct labor hours, to arrive at the predetermined overhead rate of $5. Actual overhead for June was $9500 variable and $6050 fixed, and standard hours allowed for the product produced in June was 3000 hours. The total overhead variance is
Answer:
Total Overhead Variance= $500 unfavorable
Explanation:
The total overhead variance is the difference between actual overhead and the applied overhead.
Actual Overhead = Variable + Fixed= $9500 + $6050= $ 15,550
Budgeted Overhead for 30000 direct labor hours = $ 150,000
Applied Overhead for 3000 hours = 3000 *$5= $15000
Total Overhead Variance= Actual Overhead Less Applied Overhead
= $15,500- $ 15000= $500 unfavorable
As actual is greater than applied it is unfavorable.
Answer:
$550 unfavorable.
Explanation:
Total actual overhead = $9,500 + $6,050 = $15,550
Total predetermined overhead = Predetermined overhead rate * Standard hours = $5 * 3,000 = $15,000
Total overhead variance = $15,550 - $15,000 = $550 unfavorable.
Note: It is unfavorable because total actual is greater than total predetermined overhead.
Pronghorn Appliances provides a 3-year warranty with one of its products which was first sold in 2017. Pronghorn sold $1,840,000 of products subject to the warranty. Pronghorn expects $202,000 of warranty costs over the next 3 years. In 2017, Pronghorn spent $106,000 servicing warranty claims. Prepare Pronghorn’s journal entries to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs; Pronghorn now expects future warranty costs of $115,000
Answer:
See the explanation below.
Explanation:
Balance in the warranty liability account after claim = $202,000 - $106,000 = $96,000
Amount needed to reduce expected warranty to $115,000 = $155,00 - $96,000 = $19,000
The journal entries will be as follows:
Details Dr ($) Cr ($) .
Cash 1,840,000
Sales revenue 1,840,000
To record the sales of products .
Warranty expenses 202,000
Estimated warranty liability 202,000
To record the expected warranty expenses .
Warranty liability account 106,000
Inventory 106,000
To record the warranty claim .
Warranty expenses 19,000
Estimated warranty liability 19,000
To record the reduction of expected warranty expenses to $115,000.
The following information was drawn from the Year 1 accounting records of Ozark Merchandisers:
a. Inventory that had cost $17,400 was sold for $31,320 under terms 2/20, net/30.
b. Customers returned merchandise to Ozark five days after the purchase.
c. The merchandise had been sold for a price of $784.
d. The merchandise had cost Ozark $560.
e. All customers paid their accounts within the discount period.
f. Selling and administrative expenses amounted to $3,132.
g. Interest expense paid amounted to $240.
h. Land that had cost $6,400 was sold for $8,640 cash.
Required:
1. Determine the amount of net sales.
2. Prepare a multistep income statement.
Answer and Explanation:
1. The computation of net sales is shown below:-
Net sales = Gross Sales - Sales Returns - Sales Discounts
= $31,320 - $784 - ($$31,320 - $784) × 2%)
= $31,320 - $784 - $610.72
= $29,925.28
2. The preparation of multistep income statement is shown below:-
Income Statement
Net sales revenue $29,925.28
Cost of Goods Sold $16,840
($17,400 - $560)
Gross Profit $13,085.28
Selling and Administrative
Expenses $3,132
Income from Operations $9,953.28
Other Income / Expense
Gain on sale of land $2,240
($8,640 - $6,400)
Interest Expense $240 $2,000
Net income $11,953.28
Galla Inc. needs to determine a price for a new product. Galla desires a 25% markup on the total cost of the product. Galla expects to sell 6420 units. Additional information is as follows: Variable product cost per unit $ 23 Variable administrative cost per unit 25 Total fixed overhead 46,500 Total fixed administrative 30,540 Using the total cost method what price should Galla charge?
Answer:
The price Galla should charge is $75
Explanation:
Solution
Now
The total cost = variable product cost + variable administrative cost + fixed overhead + fixed administrative
= ($23 * 6,420) + ($25 * 6,420) + $46,500 + $30,540
= $147,660 + $160,500 + $46,500 + $30,540
= $385,200
Thus,
The total cost per unit = Total cost / units
= $385,200 / 6,420 units
= $60
Hence
The selling price should charge = Cost per unit * 1.25
= $60 * 1.25
= $75
A ________ is a gathering of 6 to 10 people who are carefully selected based on certain demographic, psychographic, or other considerations and brought together to discuss at length various topics of interest.
market maven
Nielsen sample family
virtual research market
consumer dyad
focus group
Answer: it is a focus group
Explanation: because it is more than one person and more than two
On March 1, 2022, Wildhorse Company acquired real estate, on which it planned to construct a small office building, by paying $98,000 in cash. An old warehouse on the property was demolished at a cost of $11,000; the salvaged materials were sold for $3,100. Additional expenditures before construction began included $2,000 attorney's fee for work concerning the land purchase, $6,300 real estate broker's fee, $10,800 architect's fee, and $18,200 to put in driveways and a parking lot.
Determine the amount to be reported as the cost of the land.
Answer:
The amount to be reported as the cost of the land is $ 114,200
Explanation:
Cash paid for the land = $ 98,000
Net cost of demolishing old ware house = $ 11,000 - $ 3,100 = $ 7,900
Attorney's fee = $2,000
Real estate broker's fee = $ 6,300
Total cost of the land = Cash paid for the land + Net cost of demolishing old ware house + Attorney's fee + Real estate broker's fee
= $98,000 + $ 7,900 + $2,000 + $ 6,300
= $ 114,200
Matrix Corporation's balance sheet and income statement appear below: Comparative Balance Sheet Ending Balance Beginning Balance Assets: Cash and cash equivalents $ 23 $ 22 Accounts receivable 39 40 Inventory 43 44 Property, plant, and equipment 587 500 Less accumulated depreciation 359 347 Total assets $ 333 $ 259 Liabilities and stockholders' equity: Accounts payable $ 30 $ 26 Accrued liabilities 15 18 Income taxes payable 39 40 Bonds payable 109 120 Common stock 51 50 Retained earnings 89 5 Total liabilities and stockholders' equity $ 333 $ 259 Income Statement Sales $ 972 Cost of goods sold 620 Gross margin 352 Selling and administrative expense 200 Net operating income 152 Gain on sale of equipment 14 Income before taxes 166 Income taxes 50 Net income $ 116 The company sold equipment for $20 that was originally purchased for $7 and that had accumulated depreciation of $1. It paid a cash dividend during the year and did not issue any bonds payable or repurchase any of its own common stock. Required: Determine the net cash provided by (used in) operating activities for the year using the indirect method.
Answer:
Check the explanation
Explanation:
Cash flow from operating activities:
Net income $116
Adjustment to reconcile net income to cash basis:
Depreciation expense ($359+1-347) $13
Gain on sale of equipment (14)
Decrease in account receivable (40-39) $1
Decrease in inventory (44-43) $1
Increase in account payable (30-26) $4
Decrease in accrued liabilities (18-15) (3)
Decrease in income tax payable (40-39) (1)
Net cash flow from operating activities $117
Hanson Corp produces three products, and is currently facing a labor shortage – only 3,090 hours are available this month. The selling price, costs, and labor requirements of the three products are as follows:
Product A Product B Product C
Selling price $ 76.00 $ 56.00 $ 66.00
Variable cost per unit $ 48.00 $ 19.00 $ 39.00
Direct labor hours per unit 2.5 3.9 2.9
a.
What is the contribution margin per unit for each product?
Product A
Product B
Product C
b.
What is the contribution margin per direct labor hour for each product? (Round your answers to 2 decimal places.)
Product A
Product B
Product C
c.
Assume Hanson has unlimited demand for each product. Which product should Hanson focus on producing?
Product B
Product C
Product A
Answer and Explanation:
The computation is shown below:
a. Contribution margin per unit
As we know that
Contribution margin per unit = Selling price per unit - variable cost per unit
Particulars Product A Product B Product C
Selling price per unit $76 $56 $66
Variable cost per unit $48 $19 $39
Contribution margin per unit $28 $37 $27
b. Contribution margin per direct labor hour for each product
Contribution margin per direct labor hour = Contribution margin per unit ÷ Direct labor hours per unit
Particulars Product A Product B Product C
Contribution margin per unit $28 $37 $27
Direct labor hours per unit 2.5 3.9 2.9
Contribution margin per direct labor hour $11.2 $9.49 $9.31
c. Based on the contribution margin per direct labor hour, the product that should be more focused is product A
Beerbo purchased a patent from Mitter Lite Co. for $1,000,000 on January 1, 2018. At that time, the patent's useful life was 10 years, expiring on December 31, 2027. In early 2020, Beerbo determined that the economic benefits of the patent would not last longer than 4 more years (6 years from the date of acquisition). Given the revised useful life, Beerbo expects the useful life of the patent to expire on December 31, [a1]. (Input year; e.g. "2020") At the end of 2019 / beginning of 2020, what was the value / net book value of the patent in Beerbo's books
Answer:
$800,000
Explanation:
As per the data given in the question,
Beerbo expects patent's useful life to expire on Dec-31 2023.
At the beginning of 2020 / end of 2019, the value of the patent in Beerbo's book = $1,000,000 - ($1,000,000 ÷ 10×2))
= $800,000
Amortix patent year = 4
Patent amortization expense at the end of 2020 = $800,000 ÷ 4
=$200,000
Consider a continuous operation in which raw tomatoes arrive to a processing unit in bulk. The tomatoes arrive at an average steady rate of 75 tons per hour from 8 a.m. to 1 p.m. every day. The processing begins as soon as the tomatoes start arriving, at 8 a.m. However, the processing unit can only process at a steady rate of 25 tons/hr. If need be, the processing unit can process for 24 hours a day. If tomatoes arrive when the processing unit is busy, a queue of inventory will form.
a. How many hours a day does the processing unit operate?
b. What is the maximum inventory of raw tomatoes?
c. What is the capacity utilization of the processing unit?
(Hint: This is equivalent to the fraction of a day the plant operates)
d. How long on average does a tomato stay in the queue?
(Hint: First calculate average inventory and average throughput for the entire time
the processing unit is operating. Then use little’s law to calculate CT.)
Answer:
15250 T62.5%5 hExplanation:
a) The amount of tomatoes that arrive in the 5 hours between 8 a.m. and 1 p.m each day is ...
(75 T/h)(5 h) = 375 T
Processing at the rate of 25 T/h takes ...
(375 T)/(25 T/h) = 15 h
The processing unit must operate 15 hours per day to process the arriving tomatoes.
__
b) The arriving tomatoes are processed at the rate of 25 T/h, so the net addition to inventory from 8 a.m. to 1 p.m. is 75 -25 = 50 T/h. Over those 5 hours, an inventory accumulates in the amount of ...
(50 T/h)(5 h) = 250 T
The maximum inventory of raw tomatoes is 250 tons.
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c) The processing unit operates 15 hours of each 24-hour day, so is operating at 15/24 = 5/8 = 62.5% of capacity.
The capacity utilization of the processing unit is 62.5%.
__
d) Inventory both increases and decreases linearly, so the average inventory is half the peak inventory. Average inventory is 250/2 = 125 tons. This is processed at the rate of 25 T/h, so the amount of time the average tomato spends in inventory is ...
(125 T)/(25 T/h) = 5 h
The average tomato stays in the queue 5 hours.
University Car Wash built a deluxe car wash across the street from campus. The new machines cost $267,000 including installation. The company estimates that the equipment will have a residual value of $24,000. University Car Wash also estimates it will use the machine for six years or about 12,000 total hours. Actual use per year was as follows: Year Hours Used 1 3,000 2 1,200 3 1,300 4 2,700 5 2,500 6 1,300 Required: 1. Prepare a depreciation schedule for six years using the straight-line method. (Do not round your intermediate calculations.)
Answer and Explanation:
According to the scenario, computation of the given data are as follow:-
Straight Line Depreciation = (Cost - Residual Value) ÷ Useful Life
= ($267,000 - $24,000) ÷ 6
= $40,500
Year Opening book value Dep. Accumulated dep. Closing book value
1 $267,000 $40,500 $40,500 $226,500
2 $226,500 $40,500 $81,000 $186,000
3 $186,000 $40,500 $121,500 $145,500
4 $145,500 $40,500 $162,000 $105,000
5 $105,000 $40,500 $202,500 $64,500
6 $64,500 $40,500 $243,000 $24,000
A company can sell all the units it can produce of either Product A or Product B but not both. Product A has a unit contribution margin of $16 and takes two machine hours to make and Product B has a unit contribution margin of $30 and takes three machine hours to make. If there are 5,000 machine hours available to manufacture a product, income will be:
a. $10,000 more if Product A is made.
b. $10,000 less if Product B is made.
c. $10,000 less if Product A is made.
d. the same if either product is made.
Answer:
Product B has a net income of $10,000 superior to Product A.
The correct answer is C.
Explanation:
Giving the following information:
Product A:
Unitary contribution margin= $16
Machine-hours required= 2
Product B:
Unitary contribution margin= $30
Machine-hours required= 3
First, we will calculate the total income of both products.
Product A= 16*(5,000/2)= $40,000
Product B= 30*(5,000/3)= $50,000
Product B has a net income of $10,000 superior to Product A.
In the Assembly Department of Concord Company, budgeted and actual manufacturing overhead costs for the month of April 2020 were as follows. Budget Actual Indirect materials $14,200 $13,700 Indirect labor 19,100 19,900 Utilities 11,400 12,100 Supervision 4,600 4,600 All costs are controllable by the department manager. Prepare a responsibility report for April for the cost center.
Answer and Explanation:
The preparation of responsibility report for April for the cost center is shown below:-
Concord Company,
Assembly Department
Manufacturing Overhead Cost Responsibility Report
For the Month Ended April
Controllable Cost Budget Actual Difference Remark
Indirect materials $14,200 $13,700 $500 Favorable
Indirect Labor $19,100 $19,900 -$800 Unfavorable
Utilities $11,400 $12,100 -$700 Unfavorable
Supervision $4,600 $4,600 0 None
Total $49,300 $50,300 -$1,000 Unfavorable
Jayhawk Foods Inc. is a snack manufacturer that wants to expand globally. Few people abroad are familiar with Jayhawk Foods snacks. The countries into which the company wants to expand require a high degree of local responsiveness when it comes to food, and the citizens of those countries already spend plenty of money on snacks. Which action should the leaders of Jayhawk Foods take? A. Achieve economies of scale by using the global-standardization approach B. Pursue a multidomestic strategy that includes new "local" brands C. Keep costs low with undifferentiated product in the international strategy D. Appease pressures for cost reductions by following the transnational approach
Answer:
the answer is option B) the leaders of Jayhawk Foods should pursue a multidomestic strategy that includes new "local" brands.
Explanation:
Understanding how best to meet your customers needs is a sure way to maximize profits and generate more sales.
Having identified the need for a high degree of local responsiveness when it comes to food, Jayhawk Foods Inc., a snack manufacturer that wants to expand globally should pursue a multi domestic strategy for their branches globally.
Multi Domestic strategy is an international marketing strategy that is responsive to the local market by driving advertising and sales efforts towards the needs that the local consumers are most responsive to.
