Answer:
3,000 units
Explanation:
Calculation for How many units are in ending work in process inventory
Using this formula
Ending work in process units =Beginning work in process units + Units started into production - Transferred to the second processing department units
Let plug in the formula
Ending work in process units= 2,300 units + 8,700 units - 8,000 units
Ending work in process units= 3,000 units
Therefore 3,000 units are in the ending work in process inventory in the first processing department at the end of the month.
You are planning to save for retirement over the next 25 years. To do this, you will invest $880 per month in a stock account and $480 per month in a bond account. The return of the stock account is expected to be an APR of 10.8 percent, and the bond account will earn an APR of 6.8 percent. When you retire, you will combine your money into an account with an APR of 7.8 percent. All interest rates are compounded monthly. How much can you withdraw each month from your account assuming a withdrawal period of 20 years
Answer:
$14,143.86 can be withdrawn each month from the account for 20 years.
Explanation:
To determine this, the first step is to use the formula for calculating the future value (FV) of ordinary annuity to calculate the FV of both stock and bond as follows:
Calculation of Future Value of Stock
FVs = M × {[(1 + r)^n - 1] ÷ r} ................................. (1)
Where,
FVs = Future value of the amount invested in stock after 25 years =?
M = Monthly investment = $880
r = Monthly interest rate = 10.8% ÷ 12 = 0.9%, or 0.009
n = number of months = 25 years × 12 months = 300
Substituting the values into equation (1), we have:
FVs = $880 × {[(1 + 0.009)^360 - 1] ÷ 0.009}
FVs = $880 × 1,522.3445923122
FVs = $1,339,663.24
Calculation of Future Value of Bond
FVd = M × {[(1 + r)^n - 1] ÷ r} ................................. (1)
Where,
FVd = Future value of the amount invested in bond after 25 years =?
M = Monthly investment = $480
r = Monthly interest rate = 6.8% ÷ 12 = 0.566666666666667%, or 0.00566666666666667
n = number of months = 25 years × 12 months = 300
Substituting the values into equation (1), we have:
FVd = $480 × {[(1 + 0.00566666666666667)^300 - 1] ÷ 0.00566666666666667}
FVd = $480 × 784.895879465925
FVd = $376,750.02
Calculation of the amount that can be withdrawn monthly for 20 years
To calculate this, the formula for calculating the present value of an ordinary annuity is used as follows:
PV = P × [{1 - [1 ÷ (1+r)]^n} ÷ r] …………………………………. (3)
Where;
PV = Combined present values of stock and bond investments after retirement = FVs + FVb = $1,339,663.24 + $376,750.02 = $1,716,413.26
P = Monthly withdrawal = ?
r = Monthly interest rate = 7.8% ÷ 12 = 0.65%, or 0.0065
n = number of months = 20 years * 12 months = 240
Substitute the values into equation (3) and solve for P to have:
PV = P × [{1 - [1 ÷ (1+r)]^n} ÷ r]
$1,716,413.26 = P × [{1 - [1 ÷ (1 + 0.0065)]^240} ÷ 0.0065]
$1,716,413.26 = P × 121.353915567094
P = $1,716,413.26 / 121.353915567094
P = $14,143.86
Therefore, $14,143.86 can be withdrawn each month from the account for 20 years.
While making organizational decisions, managers should take into consideration the needs and interests of the employees, suppliers, and customers, who are the organization's _____.
Answer:
Stakeholders.
Explanation:
Stakeholders are the group of people who may be interested in the processes of a particular company. They are formed by the group of employees, suppliers and customers, who are the stakeholders in the organization.
Therefore, it is necessary that strategic actions and business processes are aimed at satisfying the interests and needs of stakeholders, who are the company's public, that is, the reason for the existence of a company.
It is important for the company to identify who its stakeholders are and how they directly impact the business, so that it can shape a strategy that is aligned with its interests and what they expect from the company.
Satisfying stakeholders and adopting corporate governance, contributes to the company having a strong market position and achieving several competitive and strategic advantages in the market, increasing its results and profitability.
erekes Manufacturing Corporation has prepared the following overhead budget for next month. Activity level 3,200 machine-hours Variable overhead costs: Supplies $ 16,640 Indirect labor 29,120 Fixed overhead costs: Supervision 15,400 Utilities 6,600 Depreciation 7,600 Total overhead cost $ 75,360 The company's variable overhead costs are driven by machine-hours. What would be the total budgeted overhead cost for next month if the activity level is 3,100 machine-hours rather than 3,200 machine-hours
Answer:
Variable overhead= $44,330
Fixed overhead= $29,600
Total overhead= $73,930
Explanation:
Giving the following information:
Total variable overhead= $45,760
Total fixed overhead= $29,600
Total overhead cost= $75,360
First, we need to calculate the variable predetermined overhead rate:
Variable predetermined overhead rate= 45,760/3,200= $14.3 per machine hour
Now, for 3,100 hours:
Variable overhead= 14.3*3,100= $44,330
Fixed overhead= $29,600
Total overhead= $73,930
A three-year annuity-immediate will be issued a year from now with annual payments of 5,000. Using the forward rates, calculate the present value of this annuity a year from now.
Answer:
13,152.5
Explanation:
Given the the above parameters as mentioned in the question
To calculate the PV (Present Value)
We have PV = 5000 * 1.05 * [ 1/(1.0575)² + 1/(0.625)³ + 1/(1.065)⁴]
PV = 5000 * 1.05 * (0.8942094350 + 0.8337064929 + 0.7773230908) =
=> PV = 5000 * 1.05 * 2.5052390187
= 13,152.50
Therefore, in this case, using the forward rates, the present value of this annuity a year from now is 13,152.50
A company developed the following per unit materials standards for its product: 3 pounds of direct materials at $5 per pound. If 10000 units of product were produced last month and 31250 pounds of direct materials were used, the direct materials quantity variance was
Answer:
Direct material quantity variance= $6,250 unfavorable
Explanation:
Giving the following information:
Standard:
3 pounds of direct materials at $5 per pound.
10,000 units of product were produced last month and 31,250 pounds of direct materials were used.
To calculate the direct material quantity variance, we need to use the following formula:
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Direct material quantity variance= (3*10,000 - 31,250)*5
Direct material quantity variance= $6,250 unfavorable
. A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return is rs = 10.5%, and the expected constant growth rate is g = 6.4%. What is the stock's current price
Answer:
The answer is $18.29
Explanation:
We have many formulas to arriving at the stock price but here we use Gordon growth model.
Formula for getting stock price is:
D1/r - g
Where:
D1 - is the next year dividend or expected dividend to be paid next.
r is the rate of return
g is the growth rate
$0.75/0.105 - 0.064
$0.75/0.041
$18.29.
Therefore, the stock's current price is $18.29
Using the following data on bond yields: This Year Last Year Yield on top-rated corporate bonds 4 % 7 % Yield on intermediate-grade corporate bonds 6 % 9 % a. Calculate the confidence index this year and last year.
Answer:
0.6667 ; 0.7778
Explanation:
Given the following :
- - - - - - - - - - - - - - - - - this year - - - - last year
Top rated bond - - - - - 4% - - - - - - - - - 7%
Intermediate grade - - 6% - - - - - - - - - 9%
Confidence Index (This year) :
(Yield on top rated corporate bond / yield on intermediate grade corporate bond)
= 4% / 6% = 0.6667
Confidence index(last year) :
(Yield on top rated corporate bond / yield on intermediate grade corporate bond)
= 7% / 9% = 0.7778
Gross Corporation adopted the dollar-value LIFO method of inventory valuation on Dec 31, 2016. Its inventory at that date was $1,100,000 and the relevant price index was 100. Information regarding inventory for subsequent years is as follows:
Date Inventory at Current Prices Current Price Index
December 31, 2017 $1,284,000 107
December 31, 2018 $1,450,000 125
Deceber 31, 2019 $1,625,500 130
1. What is the cost of ending inventory December 31, 2017 under Dollar-value LIFO method?
2. What is the cost of ending inventory December 31, 2018 under Dollar-value LIFO method?
3. What is the cost of ending inventory December 31, 2019 under Dollar-value LIFO method?
Answer:
1. $1,207,000
2. $1,164,200
3. $1,281,701
Explanation:
To calculate ending inventory under the dollar value LIFO method, the steps below shall be followed.
Step 1
Y = Current price at year end / Price index at that time
Step 2
Ending inventory = Opening inventory value + ( Y - Opening inventory value ) × Index value.
Gross corporation
Ending inventory
2016 1,100,000
1. Cost of ending inventory at 31, December 2017, under dollar value LIFO
= 1,284,000 / 1.07
= $1,200,000
Ending inventory
= $1,100,000 + ( $1,100,000 - $100,000 ) × 1.07
= $1,207,000
2. Cost of ending inventory at 31, December 2018, under dollar value LIFO
= $1,450,000/1.25
= $1,160,000
Ending inventory
= $1,100,000 + ( $1,160,000 - $1,100,000) × 1.07
= $1,164,200
3. Cost of ending inventory at 31, December 2019, under dollar value LIFO
= $1,625,500/1.30
= $1,250,385
Ending inventory
= $1,164,200 + $90,385 × 1.30
= $1,281,701
The IMF policies that accompany most IMF loans are typically: Multiple Choice expansionary in the short run. procyclical in the long run. contractionary in the long run. contractionary in the short run.
Answer:
contractionary in the long run
Explanation:
contractionary fiscal policy reduces spending and raises taxes. it contract the economy by reducing the amount of money that is available for businesses and for people to spend. it could reduce government expenditure or increase taxes or in other times do both. useful during inflation
Hawley company makes decorative wedding cakes. The company is considering buying the cakes rather than baking them, which will allow it to concentrate on decorating. The company averages 100 wedding cakes per year and incurs the following costs from baking wedding cakes.
Direct materials $550
Direct labor 950
Variable manufacturing overhead 150
Fixed manufacturing overhead 1,125
Total manufacturing cost $2,775
Number of cakes / 100
Cost per cake $28
Fixed costs are primarily the depreciation on kitchen equipment such as ovens and mixers. Hawley expects to retain the equipment. Hawley can buy the cakes for 28$.
1. Should Hawley make the cakes or buy them? Why?
2. If Hawley decides to buy the cakes, what are some qualitative factors that Hawley should also consider?
1. Should Hawley make the cakes or buy them? Why? (For the Difference column, use a minus sign or parentheses only when the cost of outsourcing exceeds the cost of making the cakes in-house.)
Make Outsource Difference
Cake costs cakes cakes (make—outsource)
Variable costs:
Direct materials
Direct labor
Variable manufacturing overhead
Purchase cost
Total differential cost of cakes
Hawley (should, should not) continue to make the cakes. Outsourcing will (decrease, increase) profits.
2. If Hawley decides to buy the cakes, what are some qualitative factors that Hawley should also consider?
A. Qualitative factors include considering sunk costs andmanager's opinions.
B. Qualitative factors include separating fixed and variable costs.
C. Qualitative factors include quality and on-time delivery.
D. Qualitative factors include contribution margins of the various products produced.
Answer:
1. Continue to Make the Cakes. Because the Cost of Outsourcing is greater that the cost of making by $1,150.
2. C. Qualitative factors include quality and on-time delivery.
Explanation:
Analysis of the Make or Buy Decision
Make Outsource Difference
Cake costs cakes cakes
Variable costs:
Direct materials $550 $0 $550
Direct labor $950 $0 $950
Variable manufacturing overhead $150 $0 $150
Fixed manufacturing overhead $1,125 $1,125 $0
Purchase cost $0 $2,800 ($2,800)
Total differential cost of cakes $2,275 $3,925 ($1,150)
Qualitative Factors.
Are non-monetary factors that need to be considered in decision making.
Suppose an item sells for $125 in the United States and for 62,500 pesos in Chile. According to the law of one price, the nominal exchange rate (pesos/dollar) should be ________.
Answer:
$1 = 500 Pesos
1 Pesos = $0.002
Explanation:
$125 = 62,500 Pesos
$1 = 62,500 / 125
$1 = 500 Pesos
$1 = 500 Pesos
1 Pesos = $1 / 500
1 Pesos = $0.002
Tax Services prepares tax returns for senior citizens. The standard in terms of (direct labor) time spent on each return is hours. The direct labor standard wage rate at the firm is per hour. Last month, direct labor hours were used to prepare tax returns. Total wages were .
Answer:
Tax Services
Total wages were:
= hourly wage rate * total hours spent on returns for the month
For example, if the hourly wage rate is $50 and the total hours spent on the returns equal 560 hours, the total wages will be equal to $28,000 ($50 x 560).
Explanation:
The Tax Services' total wages will be equal to the hourly wage rate multiplied by the total hours spent on returns during the month. The total hours spent on the returns for the month is obtained by adding up the hours spent on all the returns. The total wages depend on the hours worked and the standard wage rate that has been established in the firm.
A decline in the domestic real interest rate would cause a ________ in net exports and a ________ in the exchange rate.
Answer: fall; rise
Explanation:
The real interest rate is the rate of interest that is received by an investor, lender or after inflation has been taken into consideration.
The real interest rate is when the inflation rate is deducted from the nominal interest rate. A reduction in the domestic real interest rate would cause a fall in net exports and a rise in the exchange rate.
Professional Products Inc., a wholesaler of office products, was organized on February 5 of the current year, with an authorization of 75,000 shares of preferred 1% stock, $70 par and 450,000 shares of $15 par common stock. The following selected transactions were completed during the first year of operations:
Journalize the transactions.
Feb. 5. Issued 95,000 shares of common stock at par for cash.
Feb. 5. Issued 400 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation.
Apr. 9. Issued 15,500 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $42,000, $231,000, and $52,500, respectively
June 14. Issued 23,000 shares of preferred stock at $80 for cash.
Answer and Explanation:
The journal entries are shown below:
On Feb-05
Cash Dr (95,000 shares × $15) $1,425,000
To Common Stock $1,425,000
(Being the issuance of the common stock is recorded)
On Feb-05
Legal Fees (400 shares × $15) $6,000
To Common Stock $6,000
(Being the Issuance of the common share for legal Fees is recorded)
On Apr-09
Land $42,000
Building $231,000
Equipment $52,500
To Common Stock (15,500 shares × $15) $232,500
To Paid in capital excess of par value $93,000
(being the issued of the common stock in exchange of assets is recorded)
On Jun-14
Cash (23,800 shares × $80) $1,904,000
To preferred Stock (23,800 shares × $70) $1,666,000
To Paid in capital excess of par value $238,000
(Being the issuance of the preferred stock is recorded)
,
All of the following securities can be sold by both an individual holding a Series 7 General Securities License and an individual holding a Series 6 Investment Companies / Variable Annuities registered representative's license EXCEPT:
a. Unit Investment Trusts
b. Mutual Funds
c. Initial Public Offerings of
d. losed End Funds
e. Real Estate Investment Trusts
Answer:
e. Real Estate Investment Trusts
Explanation:
An individual that holds Series 6 Investment Companies / Variable Annuities initially is allowed only to sell mutilate bonds, initial public entry of closed end bonds of which which these cannot be traded by the person unless series 7 is passed generally that is unit investment trust and variable annuities. to sell securities like real estate investment trust, the broader or wider Series 7 General Securities License is needed.
Real estate investment trust (REITs) usually gives or issue shares of beneficial interest which trade like other stocks, either on stock exchanges or over-the-counter. These securities are not redeemable.
The management of Nebraska Corporation is considering the purchase of a new machine costing $490,000. The company's desired rate of return is 10%. The present value factors for $1 at compound interest of 10% for 1 through 5 years are 0.909, 0.826, 0.751, 0.683, and 0.621, respectively. In addition to the foregoing information, use the following data in determining the acceptability: Year Income from Operations Net Cash Flow 1 $100,000 $180,000 2 40,000 120,000 3 40,000 100,000 4 10,000 90,000 5 10,000 120,000 The average rate of return for this investment is a.58% b.16% c.10% d.18%
Answer:
The average rate of return of this investment is 8%.
Note: Based on the information provided in the question, the average rate of return of this investment is 8% but it is not included in the option. Kindly confirm this from your teacher.
Explanation:
Note: The data in the question are merged and they therefore first sorted before answering the question as follows:
Year Income from Operations Net Cash Flow
1 $100,000 $180,000
2 40,000 120,000
3 40,000 100,000
4 10,000 90,000
5 10,000 120,000
The explanations to the answer is now given as follows:
Calculation of the average rate of return for this investment
Average rate of return (ARR) is a financial ratio that is used to determine the rate of return that is expected from an asset over its lifetime. ARR is calculated as the total income from the assets divided by the initial investment on the assets.
The average rate of return for this investment can be calculated as follows:
Total income form operations over five years = $100,000 + $40,000 + $40,000 $ $10,000 + $10,000 = $200,000
Average income = Total income form operations over five years / Number of years = $200,000 / 5 = $40,000
Average rate of return for this investment = Average income / Cost of Machine = $40,000 / $490,000 = 0.08, or 8%
Therefore, the average rate of return is 8%.
York's outstanding stock consists of 80,000 shares of noncumulative 7.5% preferred stock with a $5 par value and also 200,000 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends: 2015 total cash dividends $20,000 ; 2016 total cash dividends 28,000 ; 2017 total cash dividends 200,000 ; 2018 total cash dividends 350,000. Please explain how to journal this.
Answer:
dividends paid during 2015:
preferred stock dividends = $20,000, dividend per preferred stock = $0.25
common stock dividends = $0, dividend per common stock = $0
dividends paid during 2016:
preferred stock dividends = $28,000, dividend per preferred stock = $0.35
common stock dividends = $0, dividend per common stock = $0
dividends paid during 2017:
preferred stock dividends = $30,000, dividend per preferred stock = $0.375
common stock dividends = $170,000, dividend per common stock = $0.85
dividends paid during 2018:
preferred stock dividends = $30,000, dividend per preferred stock = $0.375
common stock dividends = $320,000, dividend per common stock = $1.60
Since the preferred stocks are not cumulative, any preferred dividends that are not paid during a year will not be paid in future years.
briefly state and explain 6 major roles of CEO in an organisation
Answer:
A chief executive officer (CEO) is the highest-ranking executive in a company, whose primary responsibilities include making major corporate decisions, managing the overall operations and resources of a company, acting as the main point of communication between the board of directors (the board) and corporate .
Abby had a checkbook balance of $1,002.45. She paid $76.98 to the electric company and $254.34 to the water company. What is Abby’s current checkbook balance?
Answer:
$671.13
Explanation:
Abby had a checkbook balance of $1,002.45
$76.98 was paid to the electric company
$254.34 was paid to the water company
Therefore the current checkbook balance can be calculated as follows
=$1,002.45-($76.98+$254.34)
= $1,002.45-$331.32
= $671.13
Hence Abby's current checkbook balance is $671.13
Which of the following is not a situation in which strict liability applies? Multiple Choice Aimee manufactures snack cakes that are sold in small grocery stores. Faye owns a business in which she regularly uses explosives. Amanda owns a pet tiger that she keeps in her home in a suburban neighborhood. T.J. manufactures cheap clothing that falls apart after minimal use.
Answer:
The correct answer is the last option: T.J. manufactures cheap clothing that falls apart after minimal use.
Explanation:
To begin with, the term known as "Strict Liability", in criminal and civil law, refers to the situation in which a person is legally responsible for the consequences flowing from an activity that it also applies even in those cases where there is an absence of fault or criminal intent from the figure of the defendant under court. Therefore that in the situations that are presented the one in where the strict liability does not applies is the case of T.J manufacturing cheap clothes because the person knows what the product is worth.
The following is not a situation in which strict liability applies is :
D) T.J. manufactures cheap clothing that falls apart after minimal use.
Strict Liability AppliesThe following is not a situation in which strict liability applies is that T.J. manufactures cheap clothing that falls apart after minimal use.
The strict liability exists when a litigant is at risk for committing an activity, notwithstanding of what his/her aim or mental state was when committing the activity.
In criminal law, ownership violations and statutory assault are both cases of strict risk offenses.
Therefore, that in the circumstances that are displayed the one in where the strict obligation does not applies is the case of T.J fabricating cheap dress since the individual knows what the item is worth.
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If the domino effect occurs as a result of changes in the money supply, what will most likely happen as an immediate result of interest rates being increased? Borrowing will decrease. Investing will decrease. Inflation will increase. Liquidity will increase.
Answer:
The answer is: interest rates will decrease
Explanation:
Just got correct on edge
If there is an increase in the interest rate, then borrowing will decrease.
The term "domino effect" refers to the cumulative effect that is produced by one event that eventually leads to the same effect on others. In other words, the domino effect is when one disaster affects or brings destruction or disruption to others, leading to similar events.
One result will lead to a chain reaction in this event, affecting the rest of the cycle. This means that like one domino's downfall brings the next domino down, one destruction will lead to the fall of the next, taking the cycle to the end until all falls. In this scenario, if the interest rates are being increased, then it will lead to a decreased rate of borrowing. A change in the money supply will increase the interest rate. This will only leave the customers looking for a way out, which means there will be a lower rate of borrowing.In a domino effect, one event will bring the fall of the other. Therefore, if the interest rates increase, there will only be more problems for the customers. This will leave them reducing or decreasing the borrowing rate in the market. Thus, the correct answer is the first option.
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Computing absorption cost per unit and variable cost per unit Adamson, Inc. has the following cost data for Product X:
Direct materials $41 per unit
Direct labor 57 per unit
Variable manufacturing overhead 7 per unit
Fixed manufacturing overhead 20,000 per year
Required:
Calculate the unit product cost using absorption costing and variable costing when production is 2,000 units, 2,500 units, and 5,000 units.
Answer:
unit cost for 2,000 units=$115
unit cost for 2,500 units =$113
unit cost for 5,000 units= $109
Explanation:
Absorption costing is method of costing where overheads are charged to units produced using volume-based bases. e.g machine hours, labour hours e.t.c. Units are valued using full cost per unit
Full cost per unit= Direct material cost + direct labor cost + Variable production overhead + Fixed production overhead
Fixed production overhead = Budgeted overhead/Budgeted production units
unit cost for 2,000 units
unit cost = 41 + 57 + 7 + (20,000/2000) = $115
unit cost for 2,500 units
unit cost = 41 + 57 + 7 + (20,000/2,500)= $113
unit cost for 5,000 units
unit cost = 41 + 57 + 7 + (20,000/5,000) = $109
unit cost for 2,000 units=$115
unit cost for 2,500 units =$113
unit cost for 5,000 units= $109
what is the various nation income meature
Explanation:
Concept of National Income
The National income is the total amount of income accruing to a country from economic activities in a year time. It includes payments made to all resources either in the form of wages, interest, rent, and profit.
On October 10, the stockholders' equity of Sherman Systems appears as follow:
Common stock—$10 par value, 85, 000 shares authorized, issued, and outstanding $720,000
Paid—in capital in excess of par value, common stock 216,000
Retained earnings 864,000
Total stockholders' equity $1,800,000
1. Prepare journal entries to record the following transactions for Sherman Systems.
a. Purchased 6,300 shares of its own common stock at $38 per share on October 11.
b. Sold 1,325 treasury shares on November 1 for $44 cash per share.
c. Sold all remaining treasury shares on November 25 for $33 cash per share.
2. Explain how Sherman's equity section changes after the October 11 treasury stock purchase, and prepare the revised equity section of its balance sheet at that date.
Answer:
Sherman Systems
1. Journal Entries:
a. October 11:
Debit Treasury Stock $63,000
Debit Paid-in In Excess of Par $176,400
Credit Cash Account $239,400
To record the purchase of 6,300 shares at $38 per share.
b. November 1:
Debit Cash Account $58,300
Credit Treasury Stock $13,250
Credit Paid-in In Excess of Par $45,050
To record the resale of 1,325 treasury shares for $44
2. Sherman's equity section will reduce by $239,400 after the October 11 purchase of treasury stock with a direct reduction of $63,000 in the outstanding shares value and the balance in the Paid-in In Excess of Par account:
Revised Equity section as at October 11:
Stockholders' Equity
Common stock—$10 par value,
85, 000 shares authorized
Issued $720,000
less Treasury Stock -$63,000
Outstanding $657,000
Paid—in capital in excess of par
value, common stock 216,000
less Treasury Stock 176,400 39,600
Retained earnings 864,000
Total stockholders' equity $1,560,600
Explanation:
a) Data and Calculations:
Stockholders' Equity
Common stock—$10 par value,
85, 000 shares authorized
Issued and outstanding $720,000
Paid—in capital in excess of par
value, common stock 216,000
Retained earnings 864,000
Total stockholders' equity $1,800,000
b) Sherman Systems can choose from two methods on how to record its Treasury Stock transactions. One method is the costing method that records every transaction in the Treasury Stock and the par value method which records the differences in the par value for Treasury Stock in the Paid-in In Excess of Par account.
MV Corporation has debt with market value of million, common equity with a book value of million, and preferred stock worth million outstanding. Its common equity trades at per share, and the firm has million shares outstanding. What weights should MV Corporation use in its WACC?
Answer:
The Weighted Average cost of capital measures the cost to the company of its current capital structure by using the weights of the various capital measures. WACC usually uses market values so;
Total amount = Debt + Preferred stock + common equity
= 100 million + 20 million + ( 50 * 6 million)
= $420 million
Proportions.
Debt
= 100/420
= 24%
Preferred Stock
= 20/420
= 5%
Common Equity
= 300/420
= 71%
Compute the companywide break-even point in dollar sales. 2. Compute the break-even point in dollar sales for the East region. 3. Compute the break-even point in dollar sales for the West region. 4. Prepare a new segmented income statement based on the break-even dollar sales that you computed in requirements 2 and 3. Use the same format as shown above. What is Crossfire’s net operating income (loss) in your new segmented income statement? 5. Do you think that Crossfire should allocate its common fixed expenses to the East and West regions when computing the break-even points for each region?
Complete Question:
Crossfire Company segments its business into two regions - East and West. The company prepared a contribution format segmented income statement as shown below:
Total Company East West
Sales $900,000 $600,000 $300,000
Variable Expenses 675,000 480,000 195,000
Contribution margin 225,000 120,000 105,000
Traceable Fixed Expenses 141,000 50,000 91,000
Segment Margin $84,000 $70,000 $14,000
Common Fixed Expenses 59,000
Net Operating Income $25,000
Instructions: (As given).
Answer:
Crossfire Company1. Computation of the companywide break-even point in dollar sales:
Break-even point in dollar sales
= Sales = Total costs
Sales = $816,000
Total costs = Variable costs + Traceable fixed costs
= $675,000 + $141,000
= $816,000
2. Computation of the break-even point in dollar sales for the East region:
Break-even point in dollar sales
= Sales = Total costs
= $530,000
Total costs = $530,000 ($480,000 + 50,000)
3. Computation of the break-even point in dollar sales for the West region:
Break-even point in dollar sales
= Sales = Total costs
= $286,000
Total costs = $286,000 ($195,000 + 91,000)
4. A new segmented income statement based on the break-even dollar sales that are computed in requirements 2 and 3:
Total Company East West
Sales $816,000 $530,000 $286,000
Variable Expenses 675,000 480,000 195,000
Contribution margin 141,000 50,000 105,000
Traceable Fixed Expenses 141,000 50,000 91,000
Segment Margin $0 $0 $0
Common Fixed Expenses 59,000
Net Operating Income/(loss) ($59,000)
Crossfire's net operating income (loss) in the new segmented income statement is: $59,000
5. I think that Crossfire should allocate the common fixed expenses to the East and West regions when computing the break-even points for each region.
This ensures that Crossfire does not run into net operating loss, company-wide. The segmented sales revenues for the regions can be used to allocate the common fixed expenses. Other suitable bases are traceable fixed expense, number of sales and administrative staff, or activity cost pools, using activity-based costing technique.
Explanation:
a) Break-even point in sales dollars is the sales point at which Crossfire's sales revenue will be equal to the total costs. At this point, Crossfire will not make any profit or incur any loss.
Kenny, Inc., is looking at setting up a new manufacturing plant in South Park. The company bought some land six years ago for $7.9 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent facilities elsewhere. The land would net $10.7 million if it were sold today. The company now wants to build its new manufacturing plant on this land; the plant will cost $21.9 million to build, and the site requires $940,000 worth of grading before it is suitable for construction.
Required:
What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project?
Answer:
$33,540,000
Explanation:
initial investment:
opportunity cost of land (resale price of land) = $10,700,000building cost of the facilities = $21,900,000other expenses related to the site (grading) = $940,000total $33,540,000The purchase cost of the land is considered a sunk costs, since it is not relevant now. What is relevant is the price at which the land could be sold at the moment of starting the project.
Your friend just emailed you the two photos above asking for your advice about which one looks more appealing. They plan to use it as a professional profile picture on LinkedIn, where they hope to make professional job contacts. Based on these two pictures what advice do you give your friend
Answer:
Choose the picture that demonstrates professionalism
Explanation:
Here in the attachment as we can see that there are two pictures one is unprofessional and the second one is professional.
So in order to use as a professional profile picture on Linkedin, the friend should choose the professional picture as it represents the personality, dressing, attitude, appearance, etc that helps in making the professional job contacts through which the chances of getting a better job could be more
Suppose Saron has 7 Birr to be spent on two goods: banana and bread. The unit price of banana is 1 Birr and the unit price of a loaf of bread is 4 Birr. The total utility she obtains from consumption of each good is given below. Table 3.2: Utility schedule for two commodities Income = 7 Birr, Price of banana = 1 Birr, Price of bread = 4 Birr Banana Bread Quantity TU MU MU/P Quantity TU MU MU/P 0 0 - - 0 0 - - 1 6 6 6 1 12 12 3 2 11 5 5 2 20 8 2 3 14 3 3 3 26 6 1.5 4 16 2 2 4 29 3 0.75 5 16 0 0 5 31 2 0.5 6 14 -2 -2 6 32 1 0.25
Answer:
Solution:
A.
p_x=3, G_x=\frac {100}{3}=33\frac{1}{3}p
x
=3,G
x
=
3
100
=33
3
1
p_y=5, G_y=\frac{100}{5}=20p
y
=5,G
y
=
5
100
=20
B.
100-0.25\times 100=75100−0.25×100=75
p_x=3, G_x=\frac {75}{3}=25p
x
=3,G
x
=
3
75
=25
p_y=5, G_y=\frac{75}{5}=15p
y
=5,G
y
=
5
75
=15
C.
p_x=6, G_x=\frac {100}{6}=16\frac{2}{3}p
x
=6,G
x
=
6
100
=16
3
2
D.
p_y=5, G_y=\frac{100}{4}=25p
y
=5,G
y
=
4
100
=25
2.
MU_x=68-60=8, p_x=2MU
x
=68−60=8,p
x
=2
MU_y=29-25=4, p_y-?MU
y
=29−25=4,p
y
−?
\frac {MU_x}{p_x}=\frac{MU_y}{p_y}
p
x
MU
x
=
p
y
MU
y
\frac{8}{2}=\frac {4}{p_y}
2
8
=
p
y
4
p_y=1p
y
=1
Even if you cannot meet all of the elements of a contract, in special circumstances, courts may still find that there was an enforceable agreement.
a. True
b. False
Answer:
Correct answer:
a. True
Explanation:
A contract which is an agreement between two individual is meant to be kept in any given business situation. In a situation where there is a need not to meet the elements of the contracts, there might be cancellation of the contract if both parties agrees.
When one of the parties refuses, he or she would go to court inorder to enforce the agreement. In most cases, the court would see reasons on why the agreements must be enforced.