Answer and Explanation:
The journal entries are shown below:
On Jan 1
Cash (30,000 Shares × $20) $600,000
To Common Stock (30,000 Shares × $2) $60,000
To Paid In Capital in Excess of Par - Common Stock $540,000
(Being the sale of the common stock is recorded)
On Jan 1
Cash (10,000 Shares × $100) $600,000
To Preferred Stock (10,000 Shares × $100) $1,000,000
(Being the sale of the preferred stock is recorded)
On Jan 4
Retained Earnings (30,000 × 50% × $26) $390,000
To Common Stock (15,000 shares × $2) $30,000
To Paid In Capital in Excess of Par - Common Stock $360,000
(Being the issued of the stock dividend is recorded)
On Jan 9
Treasury Stock (4,000 Shares × $30) $120,000
To Cash $120,000
(Being the purchase of treasury stock is recorded)
On Jan 10
Cash (1,000 Shares × $32) $32,000
To Treasury Stock (1,000 Shares × $30) $30,000
To Paid in Capital from Treasury Stock $2,000
(Being the sale of the treasury stock is recorded)
On Jan 11
Cash (2,000 Shares × $25) $50,000
Paid in Capital - Treasury Stock $2,000
Retained Earnings $8,000
To Treasury Stock (2,000 Shares × $30) $60,000
(Being the sale of the treasury stock is recorded)
On Jan 12
Since the shares are issued for 2 to 1 i.e the number of shares is rises from 29,000 shares to 58,000 shares due to which the par value is decreased from $2 to $1 per share. So the new 29,000 shares were to be distributed
On Dec 20
Retained Earnings $74,500
To Dividend Payable - Preferred Stock (10,000 Shares × 100 × 6%) $60,000
To Dividend Payable - Common Stock (58,000 Shares × $0.25) $14,500
(Being the dividend is declared)
Haylock Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 7,800 direct labor-hours will be required in August. The variable overhead rate is $1.20 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $100,560 per month, which includes depreciation of $8,790. All other fixed manufacturing overhead costs represent current cash flows. The August cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:
Answer:
Total cash= $101,130
Explanation:
Giving the following information:
Estimated direct labor hours= 7,800
The variable overhead rate is $1.20 per direct labor-hour.
The company's budgeted fixed manufacturing overhead is $100,560 per month, which includes depreciation of $8,790.
We need to deduct the depreciation expense because it is not a cash disbursement.
Cash disbursement:
Variable overhead= 7,800*1.2= $9,360
Fixed overhead= (100,560 - 8,790)= $91,770
Total cash= $101,130
Computer Service and Repair was started five years ago by two college roommates. The company’s comparative balance sheets and income statement are presented below, along with additional information. Current Year Prior Year Balance Sheet at December 31 Cash $ 6,765 $ 8,815 Accounts receivable 1,150 590 Prepaid expenses 550 95 Equipment 530 0 Accumulated depreciation (95 ) 0 $ 8,900 $ 9,500 Wages payable $ 440 $ 1,550 Short-term note payable 255 0 Common stock 2,800 2,800 Retained earnings 5,405 5,150 $ 8,900 $ 9,500 Income Statement for Current Year Service revenue $ 43,000 Depreciation expense 95 Salaries expense 34,500 Other expenses 8,150 Net income $ 255 Additional Data: a. Prepaid expenses relate to rent paid in advance. b. Other expenses were paid in cash. c. Purchased equipment for $530 cash at the beginning of the current year and recorded $95 of depreciation expense at the end of the current year. d. At the end of the current year, the company signed a short-term note payable to the bank for $255. Required: Prepare the statement of cash flows for the year ended December 31, current year, using the indirect method. (List cash outflows as negative amounts.)
Answer:
Explanation:
Cash Flow Statement For the year ended December 31, Current Year:
Particulars AmountCash Flow from Operating Activities
Net income 255
Add: Non-cash Charges
Depreciation expense 95
Less: Increase in W.Capital
Accounts receivable -560
Prepaid expenses -455
Wages payable -1110
Short-term note payable 255
Net Cash used in Operating Activities -1520
Cash Flow from Investing Activities
Purchase of equipment -530
Net Cash used in Investing Activities
Cash Flow from Investing Activities NIL
Net cash Used during the year -2050
Opening cash and cash equivalent 8815
Closing cash and cash equivalent 6765
GE buys back 300,000 shares of its stock from investors at $45 a share. Two years later it reissues this stock for $65 a share. The stock reissue would be recorded with a debit to Cash for:__________
a) $19.5 million, a credit to Treasury Stock for $13.5 million, and a credit to Additional Paid-in Capital for $6 million.
b) $13.5 million, a debit to Additional Paid-in Capital for $6 million, a credit to Treasury Stock for $13.5 million, and a credit to Stockholders' Equity for $6 million.
c) $19.5 million, a credit to Treasury Stock for $13.5 million, and a credit to Gain on Sale of Treasury Stock for $6 million.
d) $19.5 million and a credit to Treasury Stock for $19.5 million.
Answer:
The correct answer is Option A.
Explanation:
Treasury stocks are simply company's own stock repurchased by the company. When this happens, there is cash outflow in order to increase the stock.
When GE bought back 300,000 shares of its stock from investors at $45 a share, the value of the treasury stock was 300,000 shares x $45 = $13.5m. However, the stock was reissued for $65 a share, translating to 300,000 shares x $65 = $19.5m cash receipt.
The appropriate entries to raise would be a debit to cash for $19.5 million, a credit to Treasury Stock for $13.5 million, and a credit to Additional Paid-in Capital for $6 million.
Flesch Corporation produces and sells two products. In the most recent month, Product C90B had sales of $24,080 and variable expenses of $6,020. Product Y45E had sales of $26,660 and variable expenses of $13,330. The fixed expenses of the entire company were $23,200. If the sales mix were to shift toward Product C90B with total dollar sales remaining constant, the overall break-even point for the entire company:_________.
a. would not change.
b. would decrease.
c. would increase.
Answer: c. would increase
Explanation:
Given Data:
Sales of product C90B= $24,080
Variable expense = $6,020
Sales of Product Y45E = $26,660 Variable expenses = $13,330.
Fixed expenses of entire company = $23,200
Therefore:
Contribution Margin: Total Contribution ÷ Total Sales
Product C90B:
= $( 24,080 - 6,020 ) ÷ $24,080 * 100
= 75%
Product Y45E
= $( 26660 - 13330 ) ÷ $26660 * 100
= 50%
Since the contribution margin of product C90B is greater than Y45E, they would be an increase.
Farah is an engineer with an idea for a flexible solar energy material that would have a wide range of military and civilian applications. She estimates that she will need approximately $300,000 to develop a prototype. Friends and family could provide about $75,000. She contacts Natalie, an angel investor, for this purpose. In this case, which of the following is likely to be true?a. Farah is unlikely to expect more than just financial support from Natalie.b. Farah is likely to receive a report from Natalie that is more thorough than those by formal venture capitalists.c. Natalie is likely to be a wealthy individual with expertise in the field.d. Natalie is unlikely to be a private investor.
Answer: Natalie is likely to be a wealthy individual with expertise in the field (C)
Explanation:
Based on the information gotten from the question, Farah is an engineer who has an idea for a flexible solar energy material which would have a wide range of civilian and military applications and she needs about $300,000 but has only gotten$75,000.
Farah then gets in touch with Natalie who is an angel investor. An angel investor is a person who gives capital for a business start-up, in exchange for ownership equity or convertible debt.
As an angel investor, to analyze good prospects of the investments, they usually have some expertise in the business field where they want to invest.
The following cost data relate to the manufacturing activities of Chang Company during the just completed year: Manufacturing overhead costs incurred: Indirect materials $ 16,000 Indirect labor 140,000 Property taxes, factory 9,000 Utilities, factory 80,000 Depreciation, factory 251,500 Insurance, factory 11,000 Total actual manufacturing overhead costs incurred $ 507,500 Other costs incurred: Purchases of raw materials (both direct and indirect) $ 410,000 Direct labor cost $ 70,000 Inventories: Raw materials, beginning $ 21,000 Raw materials, ending $ 31,000 Work in process, beginning $ 41,000 Work in process, ending $ 71,000 The company uses a predetermined overhead rate of $25 per machine-hour to apply overhead cost to jobs. A total of 20,700 machine-hours were used during the year. Required: 1. Compute the amount of underapplied or overapplied overhead cost for the year. 2. Prepare a schedule of cost of goods manufactured for the year.
Answer and Explanation:
The computation of given question is shown below:-
The difference between the actual accumulated manufacturing overhead and the applied overhead measured on the basis of actual activity carried out at standard cost is the overhead expense under or over applied.
When applied overheads, the overheads are considered underapplied less than the actual overhead.
When overheads are applied, the overheads are considered overapplied higher than the real overhead.
So, we need to compute the applied overhead to find out the under or over applied overhead.
Applied Manufacturing Overhead = Total Machine Hours actually recorded × Predetermined Overhead Rate
= 20,700 MHs × $25
= $517,500
As we can see that the applied overheads are greater than the actual incurred overhead, so, Overheads are overapplied.
Over-Applied Overhead Cost = Applied Overhead – Actual Overhead
= 517,500 – 507,500
= $10,000
2. The preparation of schedule of cost of goods manufactured for the year is shown below:-
Chang Company
Schedule of Cost of Goods Manufactured
Direct materials:
Raw material, beginning $21,000
Raw material, purchases
(excluding indirect material
($410,000 - $16,000) $394,000
Raw materials available
for use $415,000
Less: Raw materials, ending ($31,000)
Raw materials use
in production $799,000
Add: Direct labor cost $70,000
Add: Applied Manufacturing
Overhead
(20,700 MHs × $25) $517,500
Total manufacturing costs $1,386,500
Add: Work in process,
beginning $41,000
Less: Work in process, ending ($71,000)
Cost of goods manufactured $1,356,500
You can repair your furnace for $500 and it will last 5 more years, but your heating bills will cost you about $1500 per year. Alternatively, a new furnace can be installed for $3000 that will reduce your annual heating bill to $1200. Suppose you sell the house in 5 years and receive an additional $1000 in the sales price of your home (salvage value) because of having a fairly new furnace. Should you replace it? Use a 5-year analysis period and a MARR of 5%
Answer:
By present value old furnace should not be replaced, since the new furnace costs more.
Explanation:
Solution
For the old furnace
Present value = - 500 - 1500 = (1 +i)^n-1/i (1+i)n
= - 500-1500 * 1.05^⁵/0.05 * 1.05^⁵
= -$6994.215
Now,
For the new furnace
The present value = - 3000 - 1200 * 1.05^⁵ - 1/0.05 * 1.05^⁵ + 1000/ (1.05)⁵
= -$7411.845
Therefore, As the new furnace costs more by present value old furnace should not be replaced
Xion Co. budgets a selling price of $80 per unit, variable costs of $35 per unit, and total fixed costs of $270,000. During June, the company produced and sold 10,800 units and incurred actual variable costs of $351,000 and actual fixed costs of $285,000. Actual sales for June were $885,000. Prepare a flexible budget report showing variances between budgeted and actual results. List variable and fixed expenses separately. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance)
Answer and Explanation:
The preparation of flexible budget report is shown below:-
Xion CO.
Flexible budget report
Flexible budget Actual results Variances Favorable/
Unfavorable
Sales $864,000 $885,000 $21,000 Favorable
(10,800 × $80)
(-) Variable
cost $378,000 $351,000 $27,000 Favorable
(10,800 × $35)
Contribution $486,000 $534,000 $48,000 Favorable
(-) Fixed cost $270,000 $285,000 $15,000 Unfavorable
Net income $216,000 $249,000 $33,000 Favorable
Exercise 8-14 Inventory cost flow methods; perpetual system [LO8-1, 8-4] Altira Corporation uses a perpetual inventory system. The following transactions affected its merchandise inventory during the month of August 2018: Aug.1 Inventory on hand—2,100 units; cost $6.20 each. 8 Purchased 10,500 units for $5.60 each. 14 Sold 8,400 units for $12.10 each. 18 Purchased 6,300 units for $5.40 each. 25 Sold 7,400 units for $11.10 each. 31 Inventory on hand—3,100 units. Exercise 8-14 Part 1 Required: 1. Determine the inventory balance Altira would report in its August 31, 2018, balance sheet and the cost of goods sold it would report in its August 2018 income statement using the FIFO method. (Round "Cost per Unit" to 2 decimal places.)
Answer:
a. The inventory balance Altira would report in its August 31, 2018, balance sheet is $16,740.
b. Cost of good sold = $89,100
Explanation:
a. Determine the inventory balance Altira would report in its August 31, 2018, balance sheet
Based on FIFO method, we have:
Inventory 8,400 sold on Aug. 14 = 2,100 units from Aug. 1 beginning balance+ 6,300 units from Aug. 8 Purchases
Aug. 8 purchases balance after the Agug 14. sales = 10,500 - 6,300 = 4,200 units
Inventory 7,400 sold on Aug. 25 = 4,200 from Aug. 8 balance+ 3,200 from Aug. 18 Purchases
Aug. 18 purchases balance after the Agug 25. sales = 6,300 - 3,200 = 3,100 units
Value of closing inventory = 3,100 * 5.40 = $16,740
Therefore, the inventory balance Altira would report in its August 31, 2018, balance sheet is $16,740.
b. Determine the cost of goods sold it would report in its August 2018 income statement using the FIFO method.
Beginning inventory value = 2,100 * 6.20 = $13,020
Value of purchases = (10,500 * $5.60) + (6,300 * $5.40) = $92,820
Value of closing inventory = $16,740
Cost of good sold = $13,020 + $92,820 - $16,740 = $89,100
Xerox Corporation is using a predetermined overhead rate of $22.30 per machine-hour that was based on estimated total fixed manufacturing overhead of $446,000 and 20,000 machine-hours for the period. The company incurred actual total fixed manufacturing overhead of $409,000 and 18,200 total machine-hours during the period. The amount of manufacturing overhead that would have been applied to all jobs during the period is closest to:
Answer:
$405,860
Explanation:
Data given
Predetermined overhead rate = $22.30
Actual machine hours = $18,200
The computation of manufacturing overhead applied is shown below:-
Manufacturing overhead applied = Predetermined overhead rate × Actual machine hours
= $22.30 × 182,00
= $405,860
Therefore for computing the manufacturing overhead applied we simply multiplied the predetermined overhead rate with actual machine hours.
The following is cash flow data for Rocket Transport: Cash dividend $ 98,000 Purchase of bus $ 18,000 Interest paid on debt $ 25,000 Sales of old equipment $ 45,000 Repurchase of stock $ 127,000 Cash payments to suppliers $ 125,000 Cash collections from customers $ 480,000 a. Find the net cash provided by or used in investing activities. (Input the amount as positive value.) b. Find the net cash provided by or used in financing activities. (Input the amount as positive value.)
Answer:
a. Net cash flows from investing activities $27,000
b. Net cash flows from investing activities ($225,000)
Explanation:
Rocket Transport
Statement of cash flows (extract)
Purchase of vehicle ($18,000)
Proceeds from disposal of equipment $45,000
Net cash flows from investing activities $27,000
Dividend paid ($98,000)
Repurchase of stock ($127,000)
Net cash flows from investing activities ($225,000)
Note that interest paid, cash payments to suppliers and cash collections from customers affect the net cash flows from operating activities.
Answer:
Net Cash flow from Investing activities $27,000
Net Cash flow from Financing activities ($250,000)
Explanation:
a.
All the cash flows related to the fixed asset is called cash flows from the investing activities. Cash inflows from the sale fixed asset and cash outflows from the purchase of fixed assets are included in it.
Purchase of bus ($18,000)
Sales of old equipment $45,000
Net Cash flow from Investing activities $27,000
b.
Cash flow from financing activities is the cash inflows and outflows related to the fund of the business.
Cash dividend ($98,000)
Repurchase of stock ($127,000)
Interest paid on debt ($25,000)
Net Cash flow from Financing activities ($250,000)
A Company manufactures coffee tables. The Company has a policy of adding a 20% markup to full costs and currently has excess capacity. The following information pertains to the company's normal operations per month: Output units 30,000 tables Machine-hours 6000 hours Direct manufacturing labor-hours 10,000 hours Direct materials per unit $50 Direct manufacturing labor per hour $12.00 Variable manufacturing overhead costs $322,500 Fixed manufacturing overhead costs $1,200,000 Product and process design costs $600,000 Marketing and distribution costs $1,290,000 For long-run pricing of the coffee tables, what price will most likely be used by the Company
Answer:
$201.30
Explanation:
Direct materials = $50
Total Direct manufacturing labor = $12.00 * 10,000 = $120,000
Variable manufacturing overhead costs = $322,500
Fixed manufacturing overhead costs = $1,200,000
Product and process design costs = $600,000
Marketing and distribution costs = $1,290,000
Total cost apart from direct material = $120,000 + $322,500 + $1,200,000 + $600,000 + $1,290,000 = $3,532,500
Cost per unit apart from direct material = $3,532,500 / 30,000 = $117.75
Total cost per unit = $117.75 + $50 = $167.75
Mark up per unit = $167.75 * 20% = $33.55
Price per unit = $167.75 + $33.55 = $201.30
Answer: $201.30
Explanation:
To solve this all the expenses incurred per unit need to be included in the unit.
Direct Materials $50
Direct Manufacturing Labour Hours per unit
= (10,000/30,000 units) * 12 (direct Manufacturing Labour per hour)
= $4
Variable Manufacturing Overhead Cost
= 322,500/30,000
= $10.75
Fixed manufacturing overhead costs
= 1,200,000/30,000
= $40
Product and process design costs
= 600,000/30,000
= $20
Marketing and distribution costs
= 1,290,000/30,000
= $43
Adding everything up,
= 50 + 4 + 10.75 + 40 + 20 + 43
= $167.75
Company adds 20% to costs so,
= 167.75 * ( 1 + 20%)
= $201.30
Company will most likely sell at $201.30
How long do foodbourne illnesses last
Answer:
5-7 days
Explanation:
Immune-comprised individuals may experience a more serious illness. Severe diarrhea (often bloody diarrhea), abdominal cramps, and vomiting. Usually little or no fever. Can begin 2 to 8 days, but usually 3-4 days after consumption of contaminated food or water and last about 5 to 7 days depending on severity.
Answer:
about a week
Explanation:
Can begin 2 to 8 days, but usually 3-4 days after consumption of contaminated food or water and last about 5 to 7 days depending on severity.
Direct materials information Medium speed bump Large speed bump
Standard pounds per unit 15 ?
Standard price per pound $1.00 $1.80
Actual quantity purchased and used per unit ? 16
Actual price paid for material per pound $1.80 $2.10
Direct materials price variance $1,120 U $1,920 U
Direct materials quantity variance $100 F ?
Total direct material variance ? $480 U
Number of units produced 100 400
Calculate missing direct material variables
Answer:
Explanation:
For Medium speed bump
AQ AP AQ SP SQ SP
1,400 $ 1.80 1,400 $ 1.00 1,500 $ 1.00
$ 2,520.00 $ 1,400.00 $ 1,500.00
A B C
DMPV A-B $ 1,120.00 U
DMQV C-B $ 100.00 F
DMV A-C $ 1,020.00 U
We know that Direct material price variance = AQ(AP-SP) = 1120
AQ = 1120/(AP-SP)
AQ = 1120/(1.80-1.00)
AQ = 1,400
SQ = 100 x 15 = 1500
For Large speed bump
AQ AP AQ SP SQ SP
6,400 $ 2.10 6,400 $ 1.80 7,200 $ 1.80
$ 13,440.00 $ 11,520.00 $ 12,960.00
A B C
DMPV A-B $ 1,920.00 U
DMQV C-B $ 1,440.00 F
DMV A-C $ 480.00 U
Using this equation , DMV = DMPV + DMQV
DMQV = DMV-DMPV
DMQV = 480-1920
DMQV = 1440 F
Direct material quantity variance = SP(SQ-AQ) = 1440
SQ-AQ = 1440/SP
1440/SP + AQ = SQ
1440/1.8 + 6400 = SQ
SQ = 7200
Discuss economic theory related to the quote above. Be sure to include a definition of Labor Force Participation Rate (LFPR) within your discussion. Locate and incorporate outside research that gives evidence and explanation as to the possible causes of these declines in the Labor Force Participation rate. Integrate biblical insights into your discussion board thread. In what way does scripture influence our decision to work
Answer:
The labor force is the group of individuals for employment. The labor force investment rate is the proportion of labor force partitioned by all out populace of the applicable age. As per month to month work survey, the labor force support rate keeps on falling. As indicated by different market analysts, this wonder is because of the blend of segment, basic, and repetitive elements. Also, due to LFPR , the support of youth and the primary age bunch is required to decay. Likewise, the investment paces of laborers of more seasoned age are additionally anticipated to increment, yet remain essentially lower than those of the prime age group. These aspects have applied descending weight on the general labor force support proportion over the 2012–2022 time period and the proportion is relied upon to decrease further, to 61.6% in 2022.
The drawn out issue of joblessness is because of repetitive and auxiliary reasons, when numerous individuals the segment organization of a nation mirrors the portions of men, ladies, and the distinctive age, race, and ethnic gatherings inside that populace. The case of the time of increased birth rates age in segment change influences the labor force investment rate. Consistently after 2000, the portion of the time of increased birth rates populace has moved into the 55-years-and-more seasoned age bunch which transfers from the principal age gathering to one with considerable lesser investment proportions, origins the general cooperation of the labor force to decay.
Suppose that the standard deviation of monthly changes in the price of commodity A is $2. The standard deviation of monthly changes in a futures price for a contract on commodity B (which is similar to commodity A) is $3. The correlation between the futures price and the commodity price is 0.9. What hedge ratio should be used when hedging a one month exposure to the price of commodity A
Answer:
0.6
Explanation:
Correlation r = 0.9,
Standard deviation of monthly change in price of commodity A, σA = 2,
Standard deviation of monthly change in price of commodity B, σB = 3
The hedge ratio will be calculated using the formula
Hedge ratio=r×σA÷σB
Hedge ratio=0.9×2÷3
Hedge ratio = 0.6
Therefore, the hedge ratio used when hedging a one month exposure to the price of commodity A is 0.6.
Which factors are relevant to the time a consumer spends looking at a product on the shelf prior to selection? The article "Effects of Base Price Upon Search Behavior of Consumers in a Supermarket" (J. Econ. Psycho., 2003: 637-652) reported the following data on elapsed time (sec) for fabric softener purchasers and washing-up liquid purchasers; the former product is significantly more expensive than the latter. These products were chosen because they are similar with respect to allocated shelf space and number of alternative brands. Calculate a 90% confidence interval for the true difference between the means for the two products.
Answer:
Shown below.
Explanation:
In this case we need to compute a 90% confidence interval for the true difference between the mean elapsed time (sec) for fabric softener purchasers and washing-up liquid purchasers.
It is provided that these products were chosen because they are similar with respect to allocated shelf space and number of alternative brands.
The (1 - α)% confidence interval for the true difference between the means, when the population standard deviations are not known, is given as follows:
[tex]CI=(\bar x_{1}-\bar x_{2})\pm t_{\alpha/2, (n_{1}+n_{2}-2)}\times S_{p}\times\sqrt{\frac{1}{n_{1}}+\frac{1}{n_{2}}}[/tex]
Here,
[tex]\bar x_{1}=\text{sample mean for fabric softener purchasers}\\\bar x_{2}=\text{sample mean for washing-up liquid purchasers}\\S_{p}=\text{pooled standard deviation}[/tex]
The formula to compute the value of [pooled standard deviation is:
[tex]S_{p}=\sqrt{\frac{(n_{1}-1)s_{1}^{2}+(n_{2}-1)s_{2}^{2}}{n_{1}+n_{2}-2}}[/tex]
[10 points] Suppose Wilwaukee Telecom offers its users the option of paying either (a) $2.00 per minute for telephone service or (b) a $125 flat charge for a year of unlimited toll-free calls. Consider a customer with an annual demand for telephone service of P = 11 – 0.1Q, where P is the price per minute and Q is the number of minutes of calls made per year. Calculate the consumer surplus for each of the plans (a) and (b).
Answer:
For plan A, P = 2.
Then from demand curve, 2 = 11-.1Q
So .1Q = 9
Q* = 90
B) under plan b, P = zero
So make 11 = .1Q
Q* = 110
Now Consumer surplus from a)
CS = .5*(11-2)*90 = ∆ABC
= .5*9*90 = 405
From b)
CS = .5*11*110 - 125 = ∆ ADE - fixed fee
= 605-125 = 480
Axelia Corporation has two divisions, Refining and Extraction. The company's primary product is Luboil Oil. Each division's costs are provided below: Extraction: Variable costs per barrel of oil $ 12 Fixed costs per barrel of oil $ 4 Refining: Variable costs per barrel of oil $ 27 Fixed costs per barrel of oil $ 30 The Refining Division has been operating at a capacity of 40 comma 200 barrels a day and usually purchases 26 comma 000 barrels of oil from the Extraction Division and 15 comma 900 barrels from other suppliers at $ 57 per barrel. What is the transfer price per barrel from the Extraction Division to the Refining Division, assuming the method used to place a value on each barrel of oil is 120% of full costs? A. $ 82.80 B. $ 19.20 C. $ 46.00 D. $ 16.00
Answer:
Transfer price = $19.2
Explanation:
The transfer price is the price at which goods are exchanged between the divisions of the same group.
The transfer price is stated to be 120% of the full cost
Full cost of extraction = Variable cost + fixed cost
= $ 12 + $ 4 = $16 per barrel
Transfer price = 120%× $16 = $19.2
A transferminuspricing method leads to goal congruence when ________. A. managers act in their own best interest and the decision is in the longminusterm best interest of the company B. there is a low degree of centralization C. managers do not act for their own best interest and work for the longminusterm best interest of the manager's subunit D. there is a price difference in different markets due to market inefficiencies
Answer:
The correct answer is the option A: managers act in their own best interest and the decision in in the long-term.
Explanation:
To begin with, a transfer-pricing is a method used in the companies in order to achieve a sale from a product between one subsidiary to another within a company and is commonly used in situations where the subsidiaries of a parent company are measured as separate profit centers. And regarding the price, the manager of the subsidiary treats it the same way as it would be a sale of a product outside of the company. That is why that this method leads to the goal when the managers act in their own best interest.
Prepare the following journal entries in proper journal entry form. 1. Billed a customer for a $2,400 job. 2. Received $4,800 to start an eight-month job, beginning next month. 3. Started a company by contributing equipment worth $5,400, land worth $180,000 and cash of $30,000 into a business checking account.
Answer and Explanation:
The Journal entry is shown below:-
1. Accounts receivable Dr, $2,400
To Service revenue $2,400
(Being services revenue is recorded)
Here we debited the accounts receivable as it increased the assets and we credited the service revenue as it increased the revenue
2. Cash Dr, $4,800
To Unearned revenue $4,800
(Being unearned revenue is recorded)
Here we debited the cash as it increased the assets and we credited the unearned revenue as it increased the liabilities
3. Equipment Dr, $5,400
Land Dr, $180,000
Cash Dr, $30,000
To Capital $215,400
(Being assets investment is recorded)
Here we debited the equipment, land and cash as it increased the assets and we credited the capital as it increased the liabilities
Southern Rim Parts estimates its manufacturing overhead to be $318,000 and its direct labor costs to be $1,060,000 for year 1. The first three jobs that Southern Rim worked on had actual direct labor costs of $65,000 for Job 301, $90,000 for Job 302, and $175,000 for Job 303. For the year, actual manufacturing overhead was $399,000 and total direct labor cost was $834,000. Manufacturing overhead is applied to jobs on the basis of direct labor costs using predetermined rates.Required:a. How much overhead was assigned to each of the three jobs, 301, 302, and 303?b. What was the over- or underapplied manufacturing overhead for year 1?
Answer:
a. Job 301 = $19,500
Job 302 = $27,000
Job 303 = $52,500
b. Overhead applied for the year = $250,200
Under-applied overhead = $148,800
Explanation:
a. The computation of overhead was assigned to each of the three jobs, 301, 302, and 303 is shown below:-
Overhead application rate = Budgeted Overhead ÷ Application Base
Application base = Budgeted Overhead ÷ Budgeted Direct Labor costs
= $318,000 ÷ $1,060,000
= 0.3
Overhead assignment to jobs = Budgeted rate × Labor Cost
Job 301
= 0.3 × $65,000
= $19,500
Job 302
= 0.3 × $90,000
= $27,000
Job 303
= 0.3 × $175,000
= $52,500
b. The computation of over- or underapplied manufacturing overhead for year 1 is shown below:-
Overhead applied for the year = Total direct labor cost × Overhead rate
= $834,000 × 0.3
= $250,200
Under-applied overhead = Actual overhead - Applied overhead
= $399,000 - $250,200
= $148,800
Which is a short-term consequence of making a late payment on your bill
Answer:
Which is a short-term consequence of making a late payment on your bill? There will be a late fee added to the bill.
The short term consequences are the effects experienced for a short time. The short term consequence of default in the bill payment is the addition of late fees.
What is a bill?The bill can be given as the statement regarding the money owned by the user for the goods and the services he uses.
The bill payment can be for the services such as electricity, water, food and many more. The short term consequence that can be related with the bill is one which can be resolved and not make the major loss to the individual.
The short term payment for the lack of paying the bill is the addition of the late fees.
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Mauro Products distributes a single product, a woven basket whose selling price is $16 per unit and whose variable expense is $12 per unit. The company’s monthly fixed expense is $9,200. Required: 1. Calculate the company’s break-even point in unit sales. 2. Calculate the company’s break-even point in dollar sales. (Do not round intermediate calculations.) 3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales?
Answer:
1. 2,300 units
2. $36,800
3. $39,200
Explanation:
The computation of company’s break-even point in unit sales is shown below:-
Break Even Point (Unit Sales) = Fixed Cost ÷ Contribution Margin Per Unit
= Fixed Cost ÷ (Sales Price Per Unit - Variable Expense Per Unit)
= $9,200 ÷ ($16 - $12)
= $9,200 ÷ $4
= 2,300 units
2. The computation of break-even point in dollar sales is shown below:-
Break Even Point (Dollar Sales) = Break Even Units × Selling Price Per Unit
= $2,300 × $16
= $36,800
Contribution Margin Ratio = (Sales Price Per Unit - Variable Expense Per Unit ) ÷ Sales Per Unit × 100)
= ($16 - $12) ÷ $16 × 100
= $4 ÷ $16 × 100
= 25%
Break Even Sales = Fixed Expenses ÷ Contribution Margin Ratio
= $9,200 ÷ 25%
= $36,800
3. The computation of new break-even point in unit sales is shown below:-
Break Even Point (Unit Sales) = Fixed Cost ÷ Contribution Margin Per Unit
= Fixed Cost ÷ (Sales Price Per Unit - Variable Expense Per Unit)
= ($9,200 + $600) ÷ ($16 - $12)
= $9,800 ÷ $4
= 2,450 units
Break Even Point (Dollar Sales) = Break Even Units × Selling Price Per Unit
= 2,450 units × $16
= $39,200
This is a partial adjusted trial balance of Pharoah Company. PHAROAH COMPANY Adjusted Trial Balance January 31, 2022 Debit Credit Supplies $760 Prepaid Insurance 1,620 Salaries and Wages Payable $1,080 Unearned Service Revenue 780 Supplies Expense 870 Insurance Expense 540 Salaries and Wages Expense 1,770 Service Revenue 4,350 Prepare the closing entries at January 31, 2022. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Answer and Explanation:
The closing entries are shown below:
1. Service revenue $4,350
To Income summary 4,350
(Being the closing of service revenue is recorded)
For recording this we debited the sales revenue as it has normal credit balance so to close it we debited it and credited the income summary
2. Income summary $3,180
To Supplies Expense $870
To Insurance Expense $540
To Salaries and Wages Expense $1,770
(Being the closing of all expenses is recorded)
For recording this we debited the income summary and credited all expenses as it has normal debit balance so to close it we credited it
3. Income summary $1,170 ($4,350 - $3,180)
To Retained earnings $1,170
(Being the net income or loss is closed)
Since the revenue is more than the expenses so it would leads to net income and for recording this we debited the income summary and credited the retained earning so that the closing of the net income is recorded
Suppose that initially, the economy is in long-run macroeconomic equilibrium at point A. If there is increased pessimism about the future of the economy, the AD curve will shift from ▼ . The new short-run macroeconomic equilibrium occurs at ▼ point A point B point C . Long-run adjustment will shift the SRAS curve from ▼ SRAS 0 to SRAS 1 SRAS 1 to SRAS 0 as workers adjust to lower-than-expected prices. The new long-run macroeconomic equilibrium occurs at ▼ point A point B point C .
Answer:
a) In simple words, higher level of pessimism would result in lesser aggregate demand. Thus, AD will shift from point AD0 to the point AD1. The fresh short time equilibrium is placed at point B (wherein AD1 is conneting to SRAS0). Longer run accostoming will move SRAS curve from point SRAS0 to the pint SRAS1. Hence, the New longer run equilibrium has been placed at point C.
Decision on Accepting Additional Business Homestead Jeans Co. has an annual plant capacity of 65,000 units, and current production is 45,000 units. Monthly fixed costs are $54,000, and variable costs are $29 per unit. The present selling price is $42 per unit. On November 12 of the current year, the company received an offer from Dawkins Company for 18,000 units of the product at $32 each. Dawkins Company will market the units in a foreign country under its own brand name. The additional business is not expected to affect the domestic selling price or quantity of sales of Homestead Jeans Co. a. Prepare a differential analysis dated November 12 on whether to reject (Alternative 1) or accept (Alternative 2) the Dawkins order. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss.
Answer and Explanation:
The preparation of the differential analysis is presented below:
Particulars Order rejected (Alternative 1) order accepted (Alternative 2) Differential Effect on Income (Alternative 2)
Revenues $0 $576,000 $576,000
($18,000 × $32)
Costs
Variable Manufacturing Costs $0 $522,000 -$522,000
($18,000 × $29)
Income (Loss) $0 $54,000 $54,000
We simply deduct the variable manufacturing cost from the revenues so that the income or loss could come
Now consider the case in which the manufacturer offers a marginal unit quantity discount for the plywood. The first 20,000 square feet of any order are sold at $1 per square foot, the next 20,000 square feet are sold at $0.98 per square foot, and any quantity larger than 40,000 square feet is sold for $0.96 per square foot. What is the optimal lot size for Prefab given this pricing structure? How much cycle inven
Answer:
Explanation:
We can use the following method to solve the given problem
We are given following
Annual demand,
D = 20000*12
D = 240,000 sqft
Fixed order cost, is given as
S = $ 400
Considering the unit cost, is given as
C = $ 1
Holding cost, H = 1*20% = $ 0.2
EOQ = sqrt(2DS/H)
= √(2*240000*400/0.2)
= 30,984 sq ft
This is higher than 20,000 and less than 40,000 sq ft. For this reason, the applicable price for this quantity is $ 0.98
For C = $ 0.98, holding cost, H = 0.98*20% = $ 0.196
Revised EOQ = sqrt(2*240000*400/0.196) = 31,298 sq ft
Total annual cost of EOQ policy = D*C + H*Q/2 + S*D/Q
= 240000*0.98 + 0.196*31298/2 + 400*240000/31298
= $ 241,334.5
Now consider the next level of price, C = $ 0.96
Holding cost, H = 0.96*20% = $ 0.192
EOQ = sqrt(2*240000*400/0.192)
= 31633 sqft
This amount is will not be feasible for this price, because it requires a minimum order of 40000 sqft.
Therefore, Q = 40,000
Total annual cost = 240000*0.96 + 0.192*40000/2 + 400*240000/40000
Total annual cost = $ 236,640
Total annual cost is lowest for order quantity of 40,000 sq ft.
1) Optimal lot size = 40,000 sq ft.
2) the annual cost of this policy
= $ 236,640
3) the cycle inventory of plywood at Prefab = Q/2 = 40000/2
At prefeb= 20,000 sq ft
4) let's assume the manufacturer sells all plywood at $ 0.96, then
Holding cost, H = 0.96*20%
H= $ 0.192
EOQ = sqrt(2*240000*400/0.192)
EOQ = 31633 sqft
Total annual cost = 240000*0.96 + 0.192*31633/2 + 400*240000/31633
Total annual cost = $ 236,471.6
Difference in total annual cost = 236640 - 236471.6 = $ 168.4
Royal Dutch Shell(RDS) acquires ethanol fuel from Brazilian Cosan energy company. The Ethanol costs 500 million Brazilian Real(BRL) to grow the corn and convert it to ethanol. RDS doesn't have BRL, so they must use the futures market to acquire the currency. If 1 BRL/USD futures contract is for 100,000 reals What is the optimal number of BRL/USD futures contracts for Shell to take to receive the entire amount of Real at delivery.
Answer:
The answer is 5000 future contracts
Explanation:
Solution
Given that:
Royal Dutch buys ethanol fuel from Brazilian energy company
Nowm,
The Required coverage = 500,000,000
The BRL/USD futures contract size = 100,000
Number of contracts required = 500,000,000/100,000
So,
= 500,000,000/100,000 = 5000
Therefore, the optimal number of BRL/USD futures contracts for Shell to take to receive the entire amount of Real at delivery is 5000
Imagine that your goal is to retire 34 years from today with \$1,000,000$1,000,000 in savings. Assuming that you currently (i.e., today) have \$5,000$5,000 in savings, what rate of return must you earn on that savings to hit your goal? (Hint: Solve your future value formula for the discount rate, RR) *Make sure to input all percentage answers as numeric values without symbols, and use four decimal places of precision. For example, if the answer is 6%, then enter 0.0600.
Answer:
Present value after 34years = 1000000
Cash flow at present= 5000
Using
PV= CF(1+R)^t
1000000=5000(1+R)^34
R=1.169-1
R=0.168(16.8%)
Rate of return must you earn on that savings to hit your goal is 0.168, at the present value of $1000000, this can be calculated as follows
formula for calculating rate of return =
PV= CF(1+R) ^t
Wherein,
PV is Present value after 34years = 1000000
CF is Cash flow at present= 5000
R (rate of return) =?
T, that is time is 34 years
Therefore, with the help of given numbers the rate of return can be calculated as follows:
1000000=5000(1+R) ^34
R=1.169-1
R=0.168(16.8%)
Therefore, an individual with the present value of $1000000 and present cash flow of $5000 can earn a rate of return at 0.168 after 34 years
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