Answer:
variability
Explanation:
When a worker is performing a task, he or she might come across a situation that is not expected or a situation not experienced before. Task variability enables the prediction of certain tasks, especially where those task are standardized and repetition of such reduces task variability.
Also, any exceptions experienced when carrying out a duty either in a new situation or at any stage in the value creation process, such would eventually make task variability high. In other words, take variability refers to the numbers of exceptions, a worker experienced when carrying out a duty.
Milton Friedman argued that the economy is not in long-run equilibrium if the expected inflation rate __________ the actual inflation rate.
Answer: d.a and b
Explanation:
Inflation refers to the general rise in the price of goods and services in the economy and when stable can be considered good for the economy as it signifies that the country's economy is growing.
Milton Friedman argued that for an economy to be in long run equilibrium, the expected inflation rate must be equal to the actual inflation rate. If the expected rate is either lower or higher than the actual rate then the economy is not in equilibrium.
Required:a. All adjustments have been journalized and posted, but the closing entries have not yet been made. Journalize Meadowbrook's closing entries at January 31 , 2018. b. A Retained Earrings has been set up for you- Post to that account Then calculate Meadowbrook's net income for be year ended January 31 , 2018. What is the ending balance of Retained Earnings? c. Did Retained Earnings increase or decrease during the year? What caused the increase or be decrease? Accounts payable . 12,200Accounts receivable 17,000Accumulated depreciation, Equipment 7,200Advertising expense 10,600Cash 17,400Common stock. 1,000Current portion of long-term Note payable 1300Depreciation expense—equipment 1,500Dividends declared 10,000Equipment 42,800Interest expense 300Note payable, long term 15,500Other assets, long-term 13,500Prepaid expenses 5,500Retained earnings, 1/31/2017 13,000Salary expense 27,800Salary payable 3,500Service revenue 97,000Supplies.. 3,000Supplies expense 4,900Unearned service revenue 3,600
Answer:
Explained
Explanation:
The net income of Meadowbrook's is $51,900.Ending balance on retained earnings account is $54,900Retained earnings are increased during the yearNet income of $51,900 caused the retained earning to increaseDEBIT CREDIT
Service revenue $97,000
Income statement $97,000
DEBIT CREDIT
Income statement $45,000
Depreciation expense—equipment $1,500
Advertising expense $10,600
Interest expense $300
Supplies expense $4,900
Salary expense $27,800
DEBIT CREDIT
Retained Earnings $10,000
Dividend $10,000
Retained Earning Account
DEBIT CREDIT
Dividend $10,000 | Opening balance $13,000
Closing $54,900 | Net income $51,900
$64,900 $64,900
Baldwin Corp. ended the year carrying $19,196,000 worth of inventory. Had they sold their entire inventory at their current prices, how much more revenue would it have brought to Baldwin Corp.?
Answer: $19,196,000
Explanation:
As this is the end of the year it means that all costs associated with selling inventory have already been incurred and accounted for.
The total revenue that Baldwin would have received had they sold off all their inventory would be the inventory worth of $19,196,000 because there are no more costs to be deducted from it as they have all been deducted already.
Since bond market values are expressed as a percentage of their bond value, a $1,000 bond that is being sold at 93 would be trading at $ __________.
Answer: $930
Explanation:
From the question, we are informed that bond market values are expressed as a percentage of their bond value and are further told that a $1,000 bond that is being sold at 93.
Therefore, the bond will be trading at:
= $1000 × 93%
= $1000 × 0.93
= $930
Loan amortization schedule John Milo borrowed $150,000 at a 14% annual rate of interest to be repaid over 5 years. The loan is amortized into five equal, annual, end-of-year payments. a. Calculate the annual, end-of-year loan payment. b. Prepare a loan amortization schedule showing the interest and principal breakdown of each of the five loan payments. c. Explain why the interest portion of each payment declines with the passage of time.
Answer and Explanation:
a. The computation of annual, end-of-year loan payment is shown below:-
Annual Installments = Loan Amount ÷ Present Value Annuity Factor
= $150,000 ÷ (14%,5)
= $150,000 ÷ 3.4330809
= $43,692.53
b. The Preparation of loan amortization schedule showing the interest and principal breakdown of each of the five loan payments is shown below:-
Year Opening Annual Principal Interest Closing
balance installments balance
1 $150,000 $43,692.53 $22,692.53 $21,000 $127,307.47
2 $127,307.47 $43,692.53 $25,869.48 $17,823.05 $101,437.99
3 $101,437.99 $43,692.53 $29,491.21 $14,201.32 $71,946.78
4 $71,946.78 $43,692.53 $33,619.98 $10,072.55 $38,326.80
5 $38,326.80 $43,692.53 $38,326.80 $5,365.75 $0.00
Working note:-
a. For computing the principal we simply deduct interest from annual installment.
b. For computing the interest we simply multiply the opening balance with the annual rate of interest that is 14%
c. For computing the closing balance we simply deduct the principal from opening balance.
3. On its most current closing loan balance, the interest on the amortized loan is measured and the interest rate declines with the passage of time as the Principal Amount decreases the loan balance that is based on interest.
In a portfolio of three randomly selected stocks, which of the following could NOT be true; i.e., which statement is false?
a. The beta of the portfolio is lower than the lowest of the three betas
b. The beta of the porfolio is higher than the highest ofthe three betas
c. The riskiness of the portfolio is greater than the riskiess ofoneor two of the stocks.
d. The riskiness of the portfolio is less than the riskiness of each of the stocks if they were held in isolation
e. The beta of the portfolio is calculated as a weighted average of the individual stocks' betas.
Answer: b. The beta of the portfolio is higher than the highest of the three betas
Explanation:
The beta of a portfolio is calculated as a weighted average of the individual betas of the individual stocks. As such, the highest individual beta will be the upper limit of the portfolios entire beta.
For instance.
3 stocks A, B and C have betas of 1, 1.3 and 2 respectively.
A has a weight of 1%, B has a weight of 1% and C has a weight of 98%.
The portfolio beta will be;
= (0.01 * 1 ) + ( 0.01 * 1.3) + ( 0.98 * 2)
= 1.98
Even if the stock with the highest beta had an advantage of weighing such a high figure, it it mathematically impossible for the portfolio beta to be higher than it.
The determination as to whether an over-the-counter stock is eligible for purchase on margin is made by
Answer: Federal Reserve Board
Explanation:
The Federal Reserve Board represents the leadership of the Federal reserve system or the Fed, America's central bank.
Decisions that have to do with the eligibility of an over-the-counter stock for purchase on margin falls under Federal purview and is regulated by the Federal Reserve Board and enforced by the Financial Industry Regulatory Authority.
If I were the CEO (Chief Executive Officer) of a high tech computer company in which region of Texas would I be most likely to put my research facility which requires well educated employees?
Answer:
Dallas
Explanation:
The reason is that the city has fifth largest number of colleges and universities in USA and is the largest one in Texas. It is also third largest populous city in Texas which means that the possibility to access Human resource at lower price (Foreign students of PHD and MS) will be the lowest in the city as the supply of these talented people would be high here. Furthermore the research facility would cost me less here as the city is not as Houston and San Antonio. Furthermore, the Dallas fort is also the 11th most high-tech city in the world as per the Business Insider, this makes it my choice because all the best talent for high tech computer company will be available here.
ART has come out with a new and improved product. As a result, the firm projects an ROE of 26%, and it will maintain a plowback ratio of 0.20. Its earnings this year will be $2.5 per share. Investors expect a 14% rate of return on the stock. What price do you expect ART shares to sell for in 4 years?
A. $26.46
B. $39.69
C. $27.84
D. $30.34
Answer:
27.84
Explanation:
In order to find the price(value of the stock) after 4 years, we must have the growth rate to reach that level. In this question the growth rate will be identified first by the given information.
DATA
ROE = 26%
Plow back ratio = 0.20
Dividend this year = Do = $2.5
Rate of return = 14%
Time period = 4 years
Solution
growth rate = ROE x plow back ratio
growth rate = 26% * 0.2
growth rate = 5.2%
Dividend next year D1 = Do x (1-plowback ratio)
D1 = 2.5 x (1-0.2)
D1 = $2
Value of stock now Po = D1/(return - growth rate)
Value of stock now Po = 2/(0.14-0.052)
Value of stock now Po = $22.73
Value of stock in 4 years = Po * (1+growth rate)^4
Value of stock in 4 years = 22.73 * (1+0.052)^4
Value of stock in 4 years = $27.84
On January 1, 2019, Park Company accepted a $36,000, non-interest-bearing, 3-year note from a major customer in exchange for used equipment. The equipment had originally cost Park $200,000 and had a book value of $20,000 on the date of the sale. At the 12% imputed interest rate for this type of loan, the present value of the note is $25,500 on January 1, 2019. Park uses the effective interest rate. What is the carrying value of the note receivable on Park’s December 31, 2019, balance sheet?
Answer:
$28,560
Explanation:
Calculation for the carrying value of the note receivable on Park’s December 31, 2019, balance sheet
Using this formula
Carrying value of note receivable =Present value of the note +(Imputed interest rate ×Present value of the note )
Let plug in the formula
Carrying value of note receivable=$25,500+(12%×$25,500)
Carrying value of note receivable=$25,500+$3,060
Carrying value of note receivable=$28,560
Therefore the carrying value of the note receivable on Park’s December 31, 2019, balance sheet will be $28,560
Assuming no direct factory overhead costs (i.e., inventory carry costs) and $3 million dollars in combined promotion and sales budget, the Dell product manager wishes to achieve a product contribution margin of 35%. Given their product currently is priced at $35.00, what would they need to limit the material and labor costs to? Select: 1Save Answer $22.75 $24.50 $21.00 $23.00
Answer:
$22.75
Explanation:
Calculation for what they need to limit the material and labor costs
Using this formula
Limits for material and labor costs =Product price-(Contribution margin percentage ×Product price)
Let plug in the formula
Limits for material and labor costs=$35-(35%×$35)
Limits for material and labor costs=$35-$12.25
Limits for material and labor costs=$22.75
Therefore what they need to limit the material and labor costs will be $22.75
A bond has a par value of $1,000, a current yield of 6.453 percent, annual interest payments, and 8 years to maturity. The bond quote is $929.76. What is the amount of each coupon payment?
a. $30.00
b. $32.27
c. $60.00
d. $62.50
e. $64.53
Answer:
Annual coupon payment = $599.97
Explanation:
Current yield = 6.453%
Price of bond = Bond quote / 100 * par value
Price of bond = 929.76 / 100 * 1000
Price of bond = 9297.6
The formula for current yield is: Current yield = annual coupon payment / bond price
6.453% = Annual coupon payment / 9297.6
Annual coupon payment = 6.453% * 9297.6
Annual coupon payment = 599.974128
Annual coupon payment = $599.97
Roman owns shares in a company called Copnay Telecom Inc.The company's financial performance has been declining over the past few months, and the value of its stock has been decreasing.Roman wants to proactively cut his losses and therefore sells his shares.Jeremy, a trading enthusiast, buys shares in Copnay Telecom because he believes that the share prices cannot go anywhere but up.Which of the following characteristics of a public stock company does this scenario best exemplify?A) Separation of legal ownership and management controlB) Legal personalityC) Limited liability for investorsD) Transferability of investor ownership
Answer: D. Transferability of investor ownership.
Explanation:
From the question, we are informed that Roman owns shares in a company called Copnay Telecom Inc. and that the company's financial performance has been declining over the past few months, and the value of its stock has been decreasing.
We are further told that Roman wants to proactively cut his losses and therefore sells his shares and that Jeremy, a trading enthusiast, buys shares in Copnay Telecom because he believes that the share prices cannot go anywhere but up.
The characteristics of a public stock company that this scenario best exemplify is transferability of investor ownership. This was illustrated when Roman transferred his ownership to Jeremy.
Gary is the marketing manager for an automobile dealership his boss tells him the firm's primary goal is
Answer:
sales orientation
Explanation:
It seems that in this scenario the firm is using a sales orientation. This is a business approach that focuses on improving the company's products or services without taking the actual needs of the customers into consideration. In order to make as many sales as possible which ultimately increases the company's market shares.
Find the present value that will grow to $45,000 if interest is 3.6% compounded monthly for 1 year.
Answer:
43,411.15
Explanation:
The formula for compound interest is
A = P(1 +I) ^n
From the question,
A = 45,000
P = Unknown
I = 0.036 ÷ 12
n = 1 * 12
Therefore,
45,000 = P(1 +0.036/12) ^1 *12
45,000 = P(1.003)^12
45,000 = 1.0365998P
P = 43,411.15
Jessica weighs 125 lbs. She rode a bike at 17 mph for 25 minutes. What is the calorie cost of this activity?
Answer: 178 calories
Explanation:
From the question, we are informed that Jessica weighs 125 lbs and that she rode a bike at 17 mph for 25 minutes. It should be noted that 17 mph is thesame as 0.057 cal/lb/min.
Therefore, the calorie cost of this activity will be:
= 0.057 x 125 = 7.125
We then multiply 7.125 by the number of minutes used. This will be:
= 7.125 x 25
= 178 calories
Murray Company reports net income of $728,000 for the year. It has no preferred stock, and its weighted-average common shares outstanding is 260,000 shares. Compute its basic earning per share.
Answer:
The answer is $2.8
Explanation:
Earnings Per Share(EPS) is the part of company's earnings that goes to each common share owner.
It is calculated as net income minus preferred dividend(if any) / weighted-average common shares outstanding.
Net income equals $728,000
Weighted-average common shares outstanding equals 260,000 shares
Therefore, basic earning per share is
$728,000 /260,000
= $2.8
If the public withdraws $50 million from checkable deposits and hold it in cash, what is the impact on money base
Answer:
The monetary base remains unchanged
Explanation:
_____ is an example of a comment in Hypertext Markup Language (HTML).
a.
c. <-- This is my comment -->
d. ** This is my comment **/>
Answer:
The correct answer is:
< ! - - This is my comment - - >
Explanation:
Hypertext Markup language (HTML) is the standard language for describing web pages. It is a tagging language for achieving fonts, colour, graphic and hyperlink effects on webpages.
HTML tags are hidden keywords within webpages that determines how the web browsers format and display the content. Most times, tags have the opening and the closing parts which are usually the same except for the addition of a forward slash ( / ) in the closing tag.
HTML comments are not displayed in the browser, but they can help document your HTML source code. The comment tag is written as:
< ! - - This is my comment - - >
Note that there is an exclamation point (!) in the beginning tag, but not in the closing tag.
Suppose the demand and supply curves for eggs in the United
States are given by the following equations:
Qd = 100 - 20P
Qs = 10 + 40P
where Qd = millions of dozens of eggs Americans would like to
buy each year; Qs = millions of dozens of eggs U.S. farms
would like to sell each year; and P = price per dozen of eggs.
Fill in the following table:
Price Quantity Quantity
( Per Dozen) Demanded (Qd) Supplied (Qs)
$ .50
$ 1.00
$ 1.50
$ 2.00
$ 2.50
Answer: Please find answers in explanation column
Explanation:
Given
Qd = 100 - 20P
Qs = 10 + 40P
Price Quantity Quantity Quantity
( Per Dozen) Demanded (Qd) Supplied (Qs)
$ .50 90 30
$ 1.00 80 50
$ 1.50 70 70
$ 2.00 60 90
$ 2.50 50 110
Calculation
at price = $0.50
Qd = 100 - 20P = 100 - 20 x (0.50) =100-10 =90
Qs = 10 + 40P= 10 + 40 x (0.50)=10+ 20 = 30
at price = $1.00
Qd = 100 - 20P = 100 - 20 x (1.00) =100-20 =80
Qs = 10 + 40P= 10 + 40 x (1.00)=10+ 40 = 50
at price = $1.50
Qd = 100 - 20P = 100 - 20 x (1.50) =100-30 =70
Qs = 10 + 40P= 10 + 40 x (1.50)=10+ 60 = 70
at price = $2.00
Qd = 100 - 20P = 100 - 20 x (2.00) =100-40 =60
Qs = 10 + 40P= 10 + 40 x (2.00)=10+ 80 = 90
at price = $2.50
Qd = 100 - 20P = 100 - 20 x (2.50) =100-50=50
Qs = 10 + 40P= 10 + 40 x (2.50)=10+ 100 = 110
After Xavier and Alyssa deposited nearly $55,000 in a savings account at Bigbux Bank, the bank failed and filed for bankruptcy. Because the Bigbux was an FDIC member bank, Xavier and Alyssa:_______
Answer: should be protected due to the fact that their account is insured by FDIC.
Explanation:
From the question, we are informed that after Xavier and Alyssa deposited nearly $55,000 in a savings account at Bigbux Bank, the bank failed and filed for bankruptcy but that the Bigbux was an FDIC member bank.
Based on the above scenario, Xavier and Alyssa should be protected due to the fact that their account is insured by FDIC. Since the bank is insured, their money is safe.
Answer:
Should be okay because their account is fully insured by the FDIC
Explanation:
The Federal Deposit Insurance Corporation (FDIC) is an agency that was formed to protect depositors of US depository organisations.
They provide a standard deposit insurance amount of $250,000 per account for each insured bank and for each account ownership category.
So for example if a client owns multiple savings accounts there will be coverage of $250,000 for all accounts in this category.
In this scenario Xavier and Alyssa are covered because their account balance is below $250,000.
If the government wanted the economy to expand, would the Federal Reserve (the Fed) buy or sell bonds?
Answer:
Buy
Explanation:
If the government buys bonds in an open market purchase, the supply of money would increase.
The increase in the supply of money would increase the funds available for production activities. As a result production would increase and all things being equal GDP would increase
The Smith Company manufactures insulated windows. Costs for March were as follows. Direct labor $53,000 Indirect labor 18,000 Salary of corporate vice president for advertising 25,000 Direct materials 48,000 Indirect materials 4,000 Interest expense 7,500 Salary of factory supervisor 3,000 Insurance on manufacturing equipment 2,000 What is Smith Company's actual manufacturing overhead for March?
Answer:
$27,000
Explanation:
The following costs were incurred by Smith's company during the month of March
Direct labor $53,000
Indirect labor 18,000
Salary of corporate vice president for advertising 25,000
Direct materials 48,000
Indirect materials 4,000
Interest expense 7,500
Salary of factory supervisor 3,000 Insurance on manufacturing equipment 2,000
Therefore the actual manufacturing overhead for March can be calculated as follows
= Indirect labour + indirect materials + salary of factory supervisor + insurance on manufacturing equipments
= $18,000 + $4,000 + $3,000 + $2,000
= $27,000
Hence the actual manufacturing overhead for March is $27,000
Assume the real rate of interest is 4.00% and the inflation rate is 4.00%. What is the value today of receiving 11,134.00 in 9.00 years
Answer:
FV= $11,134
Explanation:
Giving the following information:
Future value= $11,134
Interest rate= 4%
Inflation rate= 4%
Number of periods= 9 years
The inflation rate provokes the opposite effect of the interest rate. Therefore, if the interest rate and the inflation rate are equal, the value of money through time remains constant.
FV= PV*(1+i)^n
FV= 11,134* (1+0.04-0.04)^9
FV= $11,134
Radford Inc. manufactures a sugar product by a continuous process, involving three production departments-Refining, Sifting, and Packing. Assume that records indicate that direct materials, direct labor, and applied factory overhead for the first department, Refining, were $385,000, $143,000, and $99,000, respectively. Also, work in process in the Refining Department at the beginning of the period totaled $29,600, and work in process at the end of the period totaled $29,800.
Required:
a.
(1) On September 30, journalize the entry to record the flow of costs into the Refining Department during the period for direct materials.*
(2) On September 30, journalize the entry to record the flow of costs into the Refining Department during the period for direct labor.*
(3) On September 30, journalize the entry to record the flow of costs into the Refining Department during the period for factory overhead.*
b. On September 30, journalize the entry to record the transfer of production costs to the second department, Sifting.*
*Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for spaces or journal explanations. Every line on a journal page is used for debit or credit entries. Do not add explanations or skip a line between journal entries.
CHART OF ACCOUNTS
Radford Inc.
General Ledger
ASSETS
110 Cash
121 Accounts Receivable
125 Notes Receivable
126 Interest Receivable
131 Materials
141 Work in Process-Refining Department
142 Work in Process-Sifting Department
143 Work in Process-Packing Department
151 Factory Overhead-Refining Department
152 Factory Overhead-Sifting Department
153 Factory Overhead-Packing Department
161 Finished Goods
171 Supplies
172 Prepaid Insurance
173 Prepaid Expenses
181 Land
191 Factory
192 Accumulated Depreciation-Factory
LIABILITIES
210 Accounts Payable
221 Utilities Payable
231 Notes Payable
236 Interest Payable
251 Wages Payable
EQUITY
311 Common Stock
340 Retained Earnings
351 Dividends
390 Income Summary
Answer: Please find answers in explanation column
Explanation:
To record flow of cost of raw materials
Account Debit Credit
1) Work in process-Refining department $385,000
Raw Materials $385,000
To record flow of labour cost
Account Debit Credit
2) Work in process-Refining department $143,000
Wages payable $143,000
To record applied factory overhead
Account Debit Credit
3) Work in process-Refining department $99,000
factory overhead-refining department $99,000
Entry to record the transfer of production costs to the second department, Sifting.
Account Debit Credit
4) Work in process-Sifting department $626,800
Work in process-Refining department $626,800
calculation
Beginning work in process + raw material + wages payable + factory overhead - ending work in process
$29,600 + $385,000+ $143,000 +$99,000 - $29,800 =$626,800
Net income is shown on the end-of-period spreadsheet in the Income Statement debit column and the Balance Sheet credit column.
a. True
b. False
Answer:
True
Explanation:
It is True because net income is shown in the Balance sheet as a credit account as it increases the revenues and as a debit column in the Income Statement of the end-of-period spreadsheet.
This entry is reversed for the net loss. It would be shown as a debit column in the Balance Sheet ( indicating an expense/ a loss) and as a credit column in the income statement.
The net income is shown as a debit column in the Income Statement of the end-of-period spreadsheet indicating that the credits ( revenues) are more than the debits ( expenses) and we get the balance of the income after deducting the expenses from the revenues. It is entered above the debit totals.
If a person spends $20 a week on coffee (assume $1,000 a year), what would be the future value of that amount over 10 years if the funds were deposited in an account earning 4 percent?
Answer:
he future value of that amount over 10 years is $12,006.11.
Explanation:
The Future Value, FV of the Fund is calculated as follows :
Pv = $0
Pmt = -$1,000
P/yr = 1
N = 10
r = 4%
Fv = ?
Using a Financial Calculator, the Future Value, FV is $12,006.11.
The controller of Hallowell Company estimates the amount of materials handling overhead cost that should be allocated to the company's two products using the data that are given below:Wall Mirrors Specialty WindowsTotal expected units produced 2,000 7,000Total expected material moves 100 600Expected DL Hours per unit 7 4The total materials handling cost for the year is expected to be $18,257.40If the materials handling cost is allocated on the basis of direct labor-hours, how much of the total materials handling cost would be allocated to the wall mirrors? (Round off your answer to the nearest whole dollar.)
Answer:
Allocated MOH= $6,085.8
Explanation:
Giving the following information:
Wall Mirrors Specialty Windows
Total expected units produced 2,000 7,000
Expected DL Hours per unit 7 4
The total materials handling cost for the year is expected to be $18,257.40
First, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 18,257.4 / (2,000*7 + 7,000*4)
Predetermined manufacturing overhead rate= 18,257.4 / 42,000
Predetermined manufacturing overhead rate= $0.4347 per direct labor hour
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 0.4347*(2,000*7)
Allocated MOH= $6,085.8
The opportunity cost of producing a pair of pants in the USA is 5 bushels of wheat, while in China, it is 2 bushels of wheat. As a result:
Answer:
Explanation:
As a result of these statistics there can be mutual gains from trade to the two countries if the USA exports wheat to China in exchange for pants. That is because USA is able to produce wheat at a much more efficient pace than China can, but at the same time China can produce pants at a much more efficient pace than the USA. Therefore by trading with one another they can focus on producing what each are most efficient in and trading what they are not, thus saving money.
g Cadiz Co. uses flexible budgets to control its selling expenses. Monthly sales are expected to be from $300,000 to $360,000. Variable costs and their percentage relationships to sales are: Sales commissions 5% Advertising 4% Traveling 7% Delivery 1% Fixed selling expenses consist of sales salaries $40,000 and depreciation on delivery equipment $10,000. The actual selling expenses incurred in February, 2019, by Cadiz are as follows: Sales commissions $17,200 Advertising 12,000 Traveling 23,700 Delivery 2,400 Fixed selling expenses consist of sales salaries $41,500 and depreciation on delivery equipment $10,000. Prepare a flexible budget performance report, assuming that February sales were $330,000.
Answer:
Flexible budget performance report - February
Sales $330,000
Less Costs
Sales commissions (5% × $330,000) $16,500
Advertising (4% × $330,000) $13,200
Traveling (7% × $330,000) $23,100
Delivery (1% × $330,000) $3,300
Fixed selling expenses :
Sales salaries $40,000
Depreciation on delivery equipment $10,000 ($106,100)
Net Income / (Loss) $223,900
Explanation:
A flexed budged is a Planned Budget that has been adjusted to the Actual activity levels.
The Actual Activity levels of $330,000 Sales are used in preparation of the flexible budget performance report.