Answer:
42,51%
Explanation:
Accounting Rate of Return (ARR) = Average Profits / Average Investment
Calculation of Average Profits
Average Profit = Sum of Profits / Number of Years
= (300,000+290,000+240,000×8)/10
= $2,510,000 / 8
= $313,750
Calculation of Average Investment
Average Investment = Initial Investment + Scrape Value / 2
= $1,476,000/2
= $738,000
Accounting Rate of Return (ARR) = $313,750/$738,000×100
= 42,51%
Maritime Sail Makers manufactures sails for sailboats. The company has the capacity to produce 37 comma 000 sails per year and is currently producing and selling 25 comma 000 sails per year. The following information relates to current production: Sales price per unit $ 185 Variable costs per unit: Manufacturing $ 60 Selling and administrative $ 20 Total fixed costs: Manufacturing $ 700 comma 000 Selling and administrative $ 250 comma 000 If a special pricing order is accepted for 5 comma 700 sails at a sales price of $ 160 per unit, fixed costs remain unchanged, and there are no variable selling and administrative costs for this order, what is the change in operating income?
Answer:
Increase in operating income = $456,000
Explanation:
According to the scenario, computation of the given data are as follow:-
Operating Income Statement
Particular Existing New order Total
Current selling 25,000 5,700 30,700
Selling price per unit $185 $160
Manufacturing variable cost per unit $60 $60
Selling and administrative variable cost per unit $20 $20
Contribution margin per unit(CMPU)= $105 $80
(sale price - variable cost)
Contribution margin $2,625,000 $456,000 $3,081,000
(sale units × CMPU)
Manufacturing fixed cost $700,000 $700,000
Selling and administrative fixed cost $250,000 $250,000
Net operating income $1,675,000 $2,131,000
So, Difference in net income are as follows:
Increase in operating income = $2,131,000 - $1,675,000
= $456,000
When Starbucks sells "Starbucks" T-shirts in its coffee shops or when the Chicago Cubs peddle cubs branded merchandise at Wrigley Field, why are their marketers so happy?
Answer:
Because they have produced beyond their normal sale products such as coffee for Starbucks in other words they have found a other way to make more money.
Explanation:
pls mark brainliest
Sheffield Co. is building a new hockey arena at a cost of $2,630,000. It received a downpayment of $520,000 from local businesses to support the project, and now needs to borrow $2,110,000 to complete the project. It therefore decides to issue $2,110,000 of 12%, 10-year bonds. These bonds were issued on January 1, 2019, and pay interest annually on each January 1. The bonds yield 11%. Sheffield paid $50,000 in bond issue costs related to the bond sale.
Required:
(a) Prepare the journal entry to record the issuance of the bonds and the related bond issue costs incurred on January 1, 2019.
(b) Prepare a bond amortization schedule up to and including January 1, 2023, using the effective-interest method.
Answer:
Explanation:
a.
Prepare the journal entry to record the issuance of the bonds on January 1, 2019.
Accounting homework question answer, step 1, image 1
Accounting homework question answer, step 1, image 2
Step 2
b.
Prepare a bond amortization schedule up to and including January 1, 2023, using the effective-interest method.
The file attached below has the calculations
Net income was $469,000. Issued common stock for $76,000 cash. Paid cash dividend of $14,000. Paid $115,000 cash to settle a note payable at its $115,000 maturity value. Paid $124,000 cash to acquire its treasury stock. Purchased equipment for $90,000 cash. Use the above information to determine this company's cash flows from financing activities. (Amounts to be deducted should be indicated with a minus sign.)
Answer:
The company's cash flows from financing activities is ($177,000).
Explanation:
The company
Statement of cash flows (extract)
Proceed from issue of common stock $76,000
Dividends paid ($14,000)
Repayment of note payable ($115,000)
Purchase of treasury stock ($124,000)
Net cash flows from financing activities ($177,000)
Conner runs a rafting company on a local river. He runs two kinds of tripslong dash a wild whitewater experience and a more mellow wildlife tour. If he spends the day only doing whitewater trips, he can do 2 trips per day; if he spends the day only doing wildlife trips, he can do 6 trips. If he does some of each, however, he can do more total trips: 1 whitewater trips and 5 wildlife trips. Suppose that Conner's time is valued at $15 an hour. What can you say about his economies of scope? That is, what is the sign of his measure of economies of scope, SC?
Answer:
The economies of scope will be "0.6". The further explanation is given below.
Explanation:
Conner's estimated time seems to be $17 an hour.
And a full day's worth becomes
⇒ $17 × 24 = $408
The estimated value of every other white-water journey,
= [tex]\frac{408}{2}[/tex]
= $[tex]204[/tex], perhaps if two white-water trips could be made per day.
The net value or amount of each wildlife tour
= [tex]\frac{408}{4}[/tex]
= $[tex]102[/tex], because if four wildlife visits could be made through one day.
Presently, when he does several of them, he could do more visits, that would be to say, one white-water trip as well as three wildlife.
Therefore the total value of one trip in white-water as well as three trips in wildlife will be:
= [tex]204\times 1 + 102\times 3[/tex]
= [tex]204+306[/tex]
= $[tex]510[/tex]
Now,
The economies of scope,
= [tex]\frac{(408+408-510)}{510}[/tex]
= [tex]\frac{306}{510}[/tex]
= [tex]0.6[/tex]
The price of just doing individuals around each other is therefore,
= [tex](0.6\times 100)[/tex]
= 60% lower than that of the expense of doing all the multiple trips.
During April, the production department of a process operations system completed and transferred to finished goods 18,000 units that were in process at the beginning of April and 90,000 units that were started and completed in April. April's beginning inventory units were 100% complete with respect to materials and 40% complete with respect to labor. At the end of April, 30,000 additional units were in process in the production department and were 100% complete with respect to materials and 60% complete with respect to labor. The beginning inventory included materials cost of $107,000 and the production department incurred direct materials cost of $329,000 during the month. Compute the direct materials cost per equivalent unit for the department using the weighted-average method
Answer:
Cost per equivalent unit of materials = $3.16
Explanation:
Under the weighted average method of valuation, to account for completed units, it is assumed that the entire degree of work required is done in the period under consideration. So there is no separation of the completed units into opening inventory and fully worked.
Cost per equivalent unit = cost / total equivalent units
Total units completed and transferred out= 18,000 + 90000= 108,000
Items Unit Equivalent unit
Completed units 108,000 100% × 108,000 = 108,000
Closing inventory 30,000 100% × 30,000 = 30,000
Total equivalent unit of material 138,000
Cost per equivalent unit = Total cost/Total equivalent unit
= (107,000 + 329,000) /138,000 units
= $3.16
Adams Industries holds 55,000 shares of FedEx common stock, which is not a large enough ownership interest to allow Adams to exercise significant influence over FedEx. On December 31, 2021, and December 31, 2022, the market value of the stock is $98 and $112 per share, respectively. What is the appropriate reporting category for this investment and at what amount will it be reported in the 2022 balance sheet
Answer:
The explanation is given below:-
$6,160,000
Explanation:
Since owning shares is not a huge enough to exert significant control. So, strategy for reporting would be a fair value process.
According to the scenario the computation of amount reported in the 2022 balance sheet is shown below:-
Fair value through net income = Shares of FedEx common stock × Market value of the stock of 31 Dec 2022
= 55000 × $112
= $6,160,000
So, for computing the amount reported in the 2022 balance sheet we simply multiply the Shares of FedEx common stock with Market value of the stock of 31 Dec 2022.
The SP Corporation makes 42,000 motors to be used in the production of its sewing machines. The average cost per motor at this level of activity is: Direct materials $ 10.10 Direct labor $ 9.10 Variable manufacturing overhead $ 3.75 Fixed manufacturing overhead $ 4.70 An outside supplier recently began producing a comparable motor that could be used in the sewing machine. The price offered to SP Corporation for this motor is $25.75. If SP Corporation decides not to make the motors, there would be no other use for the production facilities and none of the fixed manufacturing overhead cost could be avoided. Direct labor is a variable cost in this company. The annual financial advantage (disadvantage) for the company as a result of making the motors rather than buying them from the outside supplier would be:
Answer:
annual financial advantage, $837,600
Explanation:
Analysis of the Make or Buy Decision - Making
Making Costs
Direct materials $ 10.10×42,000 424,200
Direct labor $ 9.10×42,000 382,200
Variable manufacturing overhead $ 3.75×42,000 157,500
Fixed manufacturing overhead $ 4.70×42,000 197,400
Total 1,161,300
Buying Costs
Purchase Price $25.75×42,000 1,801,500
Fixed manufacturing overhead $ 4.70×42,000 197,400
Total 1,998,900
It costs $837,600 more to Buy than to make.
Hence the annual financial advantage for the company as a result of making the motors rather than buying them from the outside supplier would be $837,600.
Problem 4-6 (Algo) Income statement presentation; Discontinued operations; EPS [LO4-1, 4-3, 4-4, 4-5] Rembrandt Paint Company had the following income statement items for the year ended December 31, 2021 ($ in thousands): Sales revenue $ 24,000 Cost of goods sold $ 13,500 Interest revenue 220 Selling and administrative expense 3,100 Interest expense 420 Restructuring costs 1,400 In addition, during the year the company completed the disposal of its plastics business and incurred a loss from operations of $2.2 million and a gain on disposal of the component’s assets of $3.2 million. 600,000 shares of common stock were outstanding throughout 2021. Income tax expense has not yet been recorded. The income tax rate is 25% on all items of income (loss). Required: Prepare a multiple-step income statement for 2021, including EPS disclosures. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands except earnings per share. Round EPS answers to 2 decimal places.)
Answer and Explanation:
The preparation of the multiple-step income statement is presented below:
Rembrandt Paint Company
Income Statement
For the Year Ended December 31, 2021
Sales revenue $24,000
Less: Cost of goods sold -$13,500
Gross profit $10,500
Less:
Operating expenses
Selling and administrative -$3,100
Restructuring costs -$1,400
Operating Income $6,000
Add: Interest revenue $220
Less: Interest expense -$420
Income from Continuing operations before income tax expense and extra ordinary item $5,800
Less: Income tax expense (25%) -$1,450
Income from Continuing operations before extraordinary item $4,350
Discontinued Operations
Income from operations of discontinued components ($3,200 - $2,200) $1,000
Less: Income tax expense (25%) $250
Income from Discontinued operations $750
Income before extraordinary items $5,100
Extraordinary item $0
Net Income $5,100
Earning per share
Income from Continuing operations before extraordinary item ($4,350 ÷ 600 shares) $7.25
Income from Discontinued operations ($750 ÷ 600 shares) $1.25
Extraordinary item 0
Net Income $8.50
We simply deduct all types of expenses and added all types of incomes
Discussion Questions What project management tasks should Kelvin perform before his next meeting? What change management tasks should Kelvin perform before his next meeting, and how do these tasks fit within the project management process? Had you been in Kelvin’s place, what would you have done differently to prepare for this meeting?
Answer:
The overview of that same given problem is outlined in the following portion on the explanation.
Explanation:
(1)...
Kelvin will organize a meeting that comprises each trustee of suspense to keep them informed of the mission design communicate, advise to involve all those who may be concerned about the undertaking. All due respect, identity management is the responsibility of everyone in the organization.
(2)...
Kelvin became evidently up to date in ventures. His entitlements with either the beginning of the explanation of his undertaking indicate that he organized without grabbing the task's approval from alternate collaborators.
His key priorities would be to construct a point-by-point business plan as well as assign portions of something to other selection makers. By splitting the task, Kelvin would have the freedom to focus on his project managing operation, whilst the corresponding chiefs might have become experts in interpreting the job, the sets of capabilities assigned to the execution of the task, the start and end deadlines of the contract, the calculation including its effort needed for both the completion costs as well as the identification of circumstances between as well as between chores.
(3)...
Reconsidering organizational change assignments seems to be certainly just something Kelvin requires to reconstitute already when he ends up going with his next conference.
Such adjustments that I will make comprise of revamping the framework of job breakup, as well as internal engagement before and after the development's initial stages. Mostly during the conference, he specifies the idea of his strategy, like:
Tags provided for activities. List among all-time limits. Description of weekly modifications It gets insulin resistance to its management strategy after the presentation.Arlington Clothing, Inc., shows the following information for its two divisions for year 1: Lake Region Coastal Region Sales revenue $ 4,200,000 $ 13,110,000 Cost of sales 2,711,300 6,555,000 Allocated corporate overhead 252,000 786,600 Other general and administration 557,900 3,759,000 Required: a. Compute divisional operating income for the two divisions. Ignore taxes.
Answer:
Lake Region Coastal region
Operating income ($) 678,800. 2,009,400.
Explanation:
Lake Region Coastal region
$'000 $'000
Sales revenue 4,200 13,110
Cost of sales (2,711) (6.555)
Gross profit 1,488.7 6,555
Allocated overhead (252) (786.6)
Other general overhead (557.9) ( 3,759)
Operating income 678.8 2,009.4
Lake Region Coastal region
Operating income 678,800. 2,009,400.
C Corporation is investigating automating a process by purchasing a machine for $792,900 that would have a 9 year useful life and no salvage value. By automating the process, the company would save $132,500 per year in cash operating costs. The new machine would replace some old equipment that would be sold for scrap now, yielding $21,100. The annual depreciation on the new machine would be $88,100. The simple rate of return on the investment is closest to (Ignore income taxes.):
Answer:
The simple rate of return= 53.2%
Explanation:
Annual Return from the old machine 132,500 - 88,100= 44,400
Annual return from the sale of the old machine =21,100/9=2433.333333
Total annual return - 2433.33 + 44,400 =46833.33
Average investment = $(792,900 + 0)/9 = 88100
Simple average return = average annul return/ Average investment
Average investment = (Initial cost + salvage value)/2
Simple average return = (46,833.33/ 88,100) × 100 = 53.159
The simple rate of return= 53.2%
Kubin Company’s relevant range of production is 11,000 to 14,000 units. When it produces and sells 12,500 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 7.20 Direct labor $ 4.20 Variable manufacturing overhead $ 1.70 Fixed manufacturing overhead $ 5.20 Fixed selling expense $ 3.70 Fixed administrative expense $ 2.70 Sales commissions $ 1.20 Variable administrative expense $ 0.70 Required: 1. Assume the cost object is units of production: a. What is the total direct manufacturing cost incurred to make 12,500 units? b. What is the total indirect ma
Answer:
a. $142,500
b. $86,250
Explanation:
a. The computation of the total direct manufacturing cost is shown below:
= (Direct material per unit + direct labor per unit) × number of units manufactured
= ($7.20 + $4.20) × 12,500 units
= $142,500
b. The computation of the total indirect manufacturing cost is shown below:
= (Variable manufacturing overhead per unit + Fixed manufacturing overhead per unit) × number of units manufactured
= ($1.70 + $5.20) × 12,500 units
= $86,250
Opera Corp uses the periodic inventory system. For the current month, the beginning inventory consisted of 7,200 units that cost $10 each. During the month, the company made two purchases: 4,000 units at $13 each and 12,000 units at $13.50 each. Checkers also sold 12,900 units during the month. Using the average cost method, what is the amount of cost of goods sold for the month
Answer:
$159,057
Explanation:
The computation of cost of goods sold is shown below:-
Total cost of goods available for sale = (7,200 × $10) + (4,000 × $13) + (12,000 × $13.50)
= $72,000 + $52,000 + $162,000
= $286,000
Total units = 7,200 + 4,000 + 12,000
= 23,200
Average cost per unit = Total cost of goods available for sale ÷ Total units
= $286,000 ÷ 23,200
= $12.33
So,
Cost of Goods sold = Sold units during the month × Average cost per unit
= 12,900 × $12.33
= $159,057
Therefore for computing the cost of goods sold for the month we simply applied the above formula.
At the beginning of the year, manufacturing overhead for the year was estimated to be $267,500. At the end of the year, actual direct labor-hours for the year were 22,100 hours, the actual manufacturing overhead for the year was $262,500, and manufacturing overhead for the year was overapplied by $13,750. If the predetermined overhead rate is based on direct labor-hours, then the estimated direct labor-hours at the beginning of the year used in the predetermined overhead rate must have been:
Answer:
estimated direct labor hours= 21,400 hours
Explanation:
Giving the following information:
Estimated overhead= $267,500.
Actual direct labor hours= 22,100 hours
Actual manufacturing overhead= $262,500
Overapplied overhead= $13,750
We need to reverse engineer the allocation process of overhead costs to calculate the estimated overhead hour:
Under/over applied overhead= real overhead - allocated overhead
-13,750= 262,500 - allocated overhead
276,250= allocated overhead
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
276,250= Estimated manufacturing overhead rate*22,100
$12.5= Estimated manufacturing overhead rate
Finally, we can calculate the estimated direct labor hours:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
12.5= 267,500/ estimated direct labor hours
estimated direct labor hours= 21,400 hours
Supler Corporation produces a part used in the manufacture of one of its products. The unit product cost is $25, computed as follows: Direct materials $ 8 Direct labor 8 Variable manufacturing overhead 3 Fixed manufacturing overhead 6 Unit product cost $ 25 An outside supplier has offered to provide the annual requirement of 3,800 of the parts for only $14 each. The company estimates that 50% of the fixed manufacturing overhead cost above could be eliminated if the parts are purchased from the outside supplier. Assume that direct labor is an avoidable cost in this decision. Based on these data, the financial advantage (disadvantage) of purchasing the parts from the outside supplier would be:
Answer:
financial advantage : $30,400
Explanation:
Analysis of the Make or Buy Decision
Purchase Cost (3,800×$14) (53,200)
Savings :
Fixed manufacturing overhead($6×50%×3,800) 11,400
Direct Labor ($8×3,800) 30,400
Direct materials ($8×3,800) 30,400
Variable manufacturing overhead (3×3,800) 11,400
Financial Advantage 30,400
Therefore, the financial advantage of purchasing the parts from the outside supplier would be $30,400.
1.) What are the three personal traits that help you most in the business world?
Answer:
Curiosity. Technology develops at different rates and in different ways around the world.
A Sense of Impatience. Entrepreneurs need impatience in order to recognize inefficiencies
Sociability. It’s important for any entrepreneur to have a good network of like-minded people to
Explanation:
Flowrider is an indoor surfing wave company. In order to expand its customer base and bring more surfers into the pools and facilities that offer Flowrider experiences, Flowrider decides it needs to offer a short-term incentive for people to stop by and try the experience. Because the ride is usually on the more expensive side, Flowrider offers a 25% discount for anyone with a specific coupon for the next 30 days. The coupon is delivered through email, text, and a newspaper insert. What type of marketing tool did Flowrider use to entice people to try their product
Answer: C. sales promotion
Explanation:
Flowrider used coupons which are quite a popular method of Sales Promotion. Sales Promotion refers to strategies used to increase sales such as discounts and sampling.
Coupons are a type of discount as shown in the question that allow for customers to receive discounts on purchased goods if they have said coupons. As they are a discount and are meant to increase sales, they are a method of Sales Promotion.
Suppose that output (Y ) in an economy is given by the following aggregate production function: Yt = Kt + Nt where Kt is capital and Nt is the population. Furthermore, assume that capital depreciates at rate δ and that savings is a constant proportion s of income. You may assume that δ > s. 1. Suppose that the population remains constant. Solve for the steady-state level of capital per worker. 2. Now suppose that the population grows at rate n. Solve for the steady-state level of capital per worker. 3. Based on your answer to part 2) above, solve for the steady-state growth rates (in terms of n) of the following: (a) capital per worker (b) output per worker (c) capital (d) output
Answer:
Check the explanation
Explanation:
Yt = Kt + Nt
Taking output per worker, we divide by Nt
Yt/Nt = Kt/Nt + 1
yt = kt + 1
where yt is output per worker and kt is capital per worker.
a) With population being constant, savings rate s and depreciation rate δ.
ΔKt = It - δKt
dividing by Nt, we get
ΔKt/Nt = It/Nt - δKt/Nt ..... [1]
for kt = Kt/Nt, taking derivative
d(kt)/dt = d(Kt/Nt)/dt ... since Nt is a constant, we have
d(kt)/dt = d(Kt/Nt)/dt = (dKt/dt)/Nt = ΔKt/Nt = It/Nt - δKt/Nt = it - δkt
thus, Capital accumulation Δkt = i – δkt
In steady state, Δkt = 0
That is I – δkt = 0
S = I means that I = s.yt
Thus, s.yt – δkt = 0
Then kt* = s/δ(yt) = s(kt+1)/(δ )
kt*= skt/(δ) + s/(δ)
kt* - skt*/(δ) = s/(δ)
kt*(1- s/(δ) = s/(δ)
kt*((δ - s)/(δ) = s/(δ)
kt*(δ-s)) = s
kt* = s/(δ -s)
capital per worker is given by kt*
b) with population growth rate of n,
d(kt)/dt = d(Kt/Nt)/dt =
= [tex]\frac{\frac{dKt}{dt}Nt - \frac{dNt}{dt}Kt}{N^{2}t}[/tex]
= [tex]\frac{dKt/dt}{Nt} - \frac{dNt/dt}{Nt}.\frac{Kt}{Nt}[/tex]
= ΔKt/Nt - n.kt
because (dNt/dt)/Nt = growth rate of population = n and Kt/Nt = kt (capital per worker)
so, d(kt)/dt = ΔKt/Nt - n.kt
Δkt = ΔKt/Nt - n.kt = It/Nt - δKt/Nt - n.kt ......(from [1])
Δkt = it - δkt - n.kt
at steady state Δkt = it - δkt - n.kt = 0
s.yt - (δ + n)kt = 0........... since it = s.yt
kt* = s.yt/(δ + n) =s(kt+1)/(δ + n)
kt*= skt/(δ + n) + s/(δ + n)
kt* - skt*/(δ + n) = s/(δ + n)
kt*(1- s/(δ + n)) = s/(δ + n)
kt*((δ + n - s)/(δ + n)) = s/(δ + n)
kt*(δ + n -s)) = s
kt* = s/(δ + n -s)
.... is the steady state level of capital per worker with population growth rate of n.
3. a) capital per worker. in steady state Δkt = 0 therefore, growth rate of kt is zero
b) output per worker, yt = kt + 1
g(yt) = g(kt) = 0
since capital per worker is not growing, output per worker also does not grow.
c)capital.
kt* = s/(δ + n -s)
Kt*/Nt = s/(δ + n -s)
Kt* = sNt/(δ + n -s)
taking derivative with respect to t.
d(Kt*)/dt = s/(δ + n -s). dNt/dt
(dNt/dt)/N =n (population growth rate)
so dNt/dt = n.Nt
d(Kt*)/dt = s/(δ + n -s).n.Nt
dividing by Kt*
(d(Kt*)/dt)/Kt* = s/(δ + n -s).n.Nt/Kt* = sn/(δ + n -s). (Nt/Kt)
[tex]\frac{sn}{\delta +n-s}.\frac{Nt}{Kt}[/tex]
using K/N = k
[tex]\frac{s}{\delta +n-s}.\frac{n}{kt}[/tex]
plugging the value of kt*
[tex]\frac{sn}{\delta +n-s}.\frac{(\delta + n -s)}{s}[/tex]
n
thus, Capital K grows at rate n
d) Yt = Kt + Nt
dYt/dt = dKt/dt + dNt/dt = s/(δ + n -s).n.Nt + n.Nt
using d(Kt*)/dt = s/(δ + n -s).n.Nt from previous part and that (dNt/dt)/N =n
dYt/dt = n.Nt(s/(δ + n -s) + 1) = n.Nt(s+ δ + n -s)/(δ + n -s) = n.Nt((δ + n)/(δ + n -s)
dYt/dt = n.Nt((δ + n)/(δ + n -s)
dividing by Yt
g(Yt) = n.(δ + n)/(δ + n -s).Nt/Yt
since Yt/Nt = yt
g(Yt) = n.(δ + n)/(δ + n -s) (1/yt)
at kt* = s/(δ + n -s), yt* = kt* + 1
so yt* = s/(δ + n -s) + 1 = (s + δ + n -s)/(δ + n -s) = (δ + n)/(δ + n -s)
thus, g(Yt) = n.(δ + n)/(δ + n -s) (1/yt) = n.(δ + n)/(δ + n -s) ((δ + n -s)/(δ + n)) = n
therefore, in steady state Yt grows at rate n.
The FI Corporation’s dividends per share are expected to grow indefinitely by 5% per year. a. If this year’s year-end dividend is $8 and the required rate of return is 10% per year, what must the current stock price be according to the DDM? b. If the expected earnings per share are $12, what is the value of the ROE on the firm’s investment opportunities? c. How much is the market paying per share for growth opportunities?
Answer and Explanation:
The computation is shown below:
a. The current stock price is
As we know that
Current stock price = (Dividend) ÷ (Required rate of return - growth rate)
= ($8) ÷ ( 10% - 5%)
= $160
b. Now the value of the ROE on the firm’s investment opportunities is
Given that
Dividend = $8
And,
The payout ratio = Dividend ÷ Earning per share
= $8 ÷ $12
= 0.666666666666667
And, retention ratio (b) is
= 1- 0.666666666666667
= 0.333333333333333
In addition to it
indefinite growth rate (g) = 5%
So, the ROE is
= Growth rate ÷ retention ratio
= 0.15 ÷ 0.3333
= 15%
c. And, the market paying per share is
PVGO = Price - Earning per share ÷ required rate of return
where,
PVGO = Present Value of Growth Opportunity
So, the market paying per share is
= $160 - $12 ÷ 10%
= $160 - $120
= $40
An outside supplier has offered to provide the annual requirement of 7,200 of the parts for only $13 each. The company estimates that 60% of the fixed manufacturing overhead cost above could be eliminated if the parts are purchased from the outside supplier. Assume that direct labor is an avoidable cost in this decision. Based on these data, the financial advantage (disadvantage) of purchasing the parts from the outside supplier would be:
Super corporation produces a part in the manufactures of its product. The unit cost is $21 computed as follows:
An outside supplier has offered to provide the annual requirement of 7,200 of the parts for only $13 each. The company estimates that 60% of the fixed manufacturing overhead cost above could be eliminated if the parts are purchased from the outside supplier. Assume that direct labor is an avoidable cost in this decision. Based on these data, the financial advantage (disadvantage) of purchasing the parts from the outside supplier would be:
$
Direct material 6
Direct labour 8
Variable manufacturing overhead 2
Fixed manufacturing overhead 5
Total cost 21
Answer:
Total financial advantage of buying from the supplier $43,200
Explanation:
Unit relevant variable cost of making= 6+8 +2 = 16
$
Variable cost of making ( 16× 7200) = 115,200
Variable of buying (13 ×7200) 93,600
Savings in variable cost 21,600
Savings in fixed cost (60%*72300 × 5) 21600
Total savings from buying 43,200
Total financial advantage of buying from the supplier $43,200
Charlotte owns a custom publishing business. She uses 500 square feet of her home (2,000 square feet) as an office and for storage. All her business has come from telemarketing (telephone sales), direct mailings, or referrals. In her first year of operation, she has revenues of $37,000, cost of goods sold of $25,900, and other business expenses of $8,100. The total expenses related to her home are:
Answer:
As calculated below (attachment)She must deduct the expenses related to interest and taxes first, then deduct her other business expenses, then at last the depreciation.She may carry forward the $1,105 ($145 limit- $1,250 current depreciation) which she is not ble to use in the current year to a future year when her business has sufficient income to absorb the deduction.
Explanation:
Stone Company changed its method of pricing inventories from FIFO to LIFO. What type of accounting change does this represent? A change in accounting estimate for which the financial statements for prior periods included for comparative purposes should be restated. A change in accounting principle for which the financial statements for prior periods included for comparative purposes should be presented as previously reported. A change in accounting estimate for which the financial statements for prior periods included for comparative purposes should be presented as previously reported. A change in accounting principle for which the financial statements for prior periods included for comparative purposes should be restated.
Answer:
A change in accounting principle for which the financial statements for prior periods included for comparative purposes should be presented as previously reported.
Explanation:
Since the accounting method is being changed from FIFO to LIFO, any adjusting of prior year balances would be impractical. If the change is from LIFO to FIFO, then it makes more sense to adjust prior year balances. By impractical, it means that any changes would be too difficult and expensive to determine, and the value of the change is insignificant (materiality principle).
Generally US GAAP rules require that changes from FIFO to LIFO be disclosed in the footnotes only.
Job 397 was recently completed. The following data have been recorded on its job cost sheet. Direct materials $59,400 Direct labor-hours 1,254 DLHs Direct labor wage rate $11 per DLH Number of units completed 3,300 units The company applies manufacturing overhead on the basis of direct labor-hours. The predetermined overhead rate is $37 per direct labor-hour. Required: What's the unit product cost that would appear on the job cost sheet for this job
Answer:
$36.24
Explanation:
The computation of unit product cost is shown below:-
Unit product cost = Direct material + Direct labor + Manufacturing overhead) ÷ Unit completed
= ($59,400 + (1254 × $11) + (1254 × $37)) ÷ 3,300
= ($59,400 + $13,794 + $46,398) ÷ 3,300
= $119,592 ÷ 3,300
= $36.24
Therefore for computing the units product cost we simply applied the above formula.
Zolezzi Inc. is preparing its cash budget for March. The budgeted beginning cash balance is $27,000. Budgeted cash receipts total $104,000 and budgeted cash disbursements total $87,000. The desired ending cash balance is $70,000. The company can borrow up to $90,000 at any time from a local bank, with interest not due until the following month. Required: Prepare the company's cash budget for March in good form. Make sure to indicate what borrowing, if any, would be needed to attain the desired ending cash balance.
Answer:
Zolezzi Inc.
Cash budget for March
Amount in $'000
Opening balance 27
Add;
Cash receipts 104
Less;
Cash disbursements (87)
Ending balance 44
Amount to be borrowed 26
Desired ending balance 70
Explanation:
The cash budget a forecast of the expected movement in cash balance. This is as a result of expected cash receipts and disbursements and may be expressed mathematically as
opening cash balance + cash receipts - Cash disbursed = closing cash balance
27 + 104 - 87 = ending balance
Ending balance = 44
Desired ending balance = 70
Amount to be borrowed = 70 - 44
= 26
Brainliest help mee please get this correct
Answer:
it should be c
Explanation:
Yogi expects to produce 1 comma 700 units in January and 2 comma 180 units in February . The company budgets 3 pounds per unit of direct materials at a cost of $ 15 per pound. Indirect materials are insignificant and not considered for budgeting purposes. The balance in the Raw Materials Inventory account (all direct materials) on January 1 is 5 comma 200 pounds. Yogi desires the ending balance in Raw Materials Inventory to be 60 % of the next month's direct materials needed for production. Desired ending balance for February is 4 comma 300 pounds. Prepare Yogi 's direct materials budget for January and February .
Answer and Explanation:
The Preparation of Yogi 's direct materials budget for January and February is shown below:-
Direct material budget
Two months ended Jan 31 and Feb 28
January February
Budgeted units to be produced a 1,700 2,180
Direct material pounds per unit b 3 3
Direct materials needed for
production (c = a × b) 5,100 6,540
Add: Desired direct material
in ending inventory (pounds) d 3,060 4,300
(5,100 × 0.6)
Total direct materials needed 8,160 10,840
(e = c + d)
Less: Direct material beginning in
inventory(pounds) f 5,200 3,060
Budgeted purchase of direct
material g = e - f 2,960 7,780
Direct material cost per pound h $15 $15
Budgeted cost of direct material
purchases i = g × h $44,400 $116,700
HI Corporation is considering the purchase of a machine that promises to reduce operating costs by the same amount for every year of its 5-year useful life. The machine will cost $211,980 and has no salvage value. The machine has a 14% internal rate of return. (Ignore income taxes.) Click here to view Exhibit 13B-1 and Exhibit 13B-2 to determine the appropriate discount factor(s) using the tables provided. Required: What are the annual cost savings promised by the machine? (Round your intermediate calculations and final answer to the nearest whole dollar amount.)
Answer:
Annual savings = 61,746.
Explanation:
The Net Present Value (NPV) is the difference between the present value (PV) of cash outflows and PV of cash inflow
At the internal rate of return the PC of annual cash savings will be equal to the investment cost
Initial cost = 211980
PV = annual cash savings = A× (1- (1+r)^(-n)/ r
A=? r-internal rate of return, 14%, n-number of years- 5
211980 = A (1- (1.14)^(-5)/ 0.14
211,980 = A× 3.433080969
A= 211,980/3.43308
A= 61746.28619
Annual savings = 61,746.
Prepare journal entries to record each of the following four separate issuances of stock. A corporation issued 4,000 shares of $20 par value common stock for $96,000 cash. A corporation issued 2,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $28,500. The stock has a $1 per share stated value. A corporation issued 2,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $28,500. The stock has no stated value. A corporation issued 1,000 shares of $100 par value preferred stock for $128,500 cash.
Answer:
1.
Dr. Cash $96,000
Cr. Common Stock $80,000
Cr. Paid in capital excess of Par common stock $16,000
2.
Dr. Expenses $28,500
Cr. common stock $28,500
3.
Dr. Expenses $28,500
Cr. Common stock $2,000
Cr. Paid in capital excess of Par common stock $26,500
4.
Dr. Cash $128,500
Cr. Common Stock $100,000
Cr. Paid in capital excess of Par common stock $28,500
Explanation:
1
Par value of the share and amount excess of par is recorded in separate accounts.
Common Stock = 4,000 x $20 = $80,000
Paid-in Capital = $96,000 - $80,000 = $16,000
2.
Expenses are recorded against the issuance by debit entry in expense account.
Stock which has no par value is recorded in the common stock account.
3.
Expenses are recorded against the issuance by debit entry in expense account.
4.
Par value of the share and amount excess of par is recorded in separate accounts.
Wicker Rockers, Inc. is planning to offer a defined contribution plan for its employees. The company would like to incorporate a "cliff" vesting schedule for the employer contributions into the plan. What is the minimum vesting period the company can choose for a "cliff" vesting schedule
Answer:3 years
Explanation:
Cliff vesting is when an employee of a company becomes fully vested on a specified date rather than the employee becoming partially vested in increasing amounts over extended period. Cliff Vesting is a process whereby the employees are entitled to full benefits from their firm’s pension policies and qualified retirement plans on a given date.
Upon the completion of the cliff period, employees receive full benefits. The Pension Protection Act of 2006 deduced a three-year cliff vesting schedule for the designated defined-contribution plans which includes 401Ks.
