Answer:
Dr Cash $427,200
Dr Discount on Bonds payable $17,800
Cr Bondss payable $445,000
Explanation:
Preparation of the journal entry to record the sale of these bonds on January 1, 2022
Dr Cash $427,200
($445,000 × 0.96)
Dr Discount on Bonds payable $17,800
($445,000-$427,200)
Cr Bonds payable $445,000
(Being to record the sale of the bond )
Zoom Enterprises expects that one year from now it will pay a total dividend of million and repurchase million worth of shares. It plans to spend million on dividends and repurchases every year after that forever, although it may not always be an even split between dividends and repurchases. If Zoom's equity cost of capital is and it has million shares outstanding, what is its share price today?
Answer:
The share price is $15.67 per share
Explanation:
The above mentioned question is missing few components. I have added them to explain on how the question would be solved if all the variables were provided. Please note the additions in bold text below. The answer of which is given afterwards.
Zoom Enterprises expects that one year from now it will pay a total dividend of $4.7 million and repurchase $4.7 million worth of shares. It plans to spend $9.4 million on dividends and repurchases every year after that forever, although it may not always be an even split between dividends and repurchases. If Zoom's equity cost of capital is 12.5% and it has $4.8 million shares outstanding, what is its share price today?
Solution mentioned below:
First we calculate the value of the enterprise by dividing the amount planned to be spent on dividends from cost of capital.
= $9.4 million / 0.125
= $75.2 million
Now to calculate price per share we divide the Enterprise value from the share outstanding.
= $75.2 million / $4.8 million
= $15.67 per share
The failure rate for each component of a 2-component series system is assumed to be one failure per 1,000 hours of operation, and the switch reliability of replacing a failed component with a spare one is 1.0. Given that there is a spare component, a. Calculate the reliability of the system for a period of 1,000 hours assuming no other failure is possible. b. Determine the approximate MTBF of the system. c. What is the system MTBF without the spare component
Answer:
a. The reliability of the system for a period of 1,000 hours, assuming no other failure is possible is:
= 99.9%.
b. The approximate MTBF (Mean Time Between Failures) without the spare component is:
1,000 hours.
Explanation:
a) Data and Calculations;
Failure rate of each component of a 2-component series system = 1/1,000 = 0.001
Therefore, the reliability rate = 1 - 0.001 = 0.999 = 99.9%
The switch reliability of replacing a failed component with a spare one = 1.0
The system's reliability = Mean Time Between Failure (MTBF) minus the Mean Time to Repair (MTTR)
= 1,000 - 1.0 = 999 hours out of 1,000
b)The equipment's Mean time between failures (MTBF) is the average time it takes the equipment or system to suffer a breakdown. Engineers, vendors, and system analysts use the MTBF metric to measure an equipment's performance, safety, and design reliability.
Von Bora Corporation is expected pay a dividend of $1.40 per share at the end of this year and a $1.50 per share at the end of the second year. You expect Von Bora's stock price to be $25.00 at the end of two years. Von Bora's equity cost of capital is 10%. The price you would be willing to pay today for a share of Von Bora stock, if you plan to hold the stock for two years is closest to:
Answer:
Price of share today = $23.17
Explanation:
The value of a stock using the dividend valuation model, is the present value of the expected cash inflows discounted at the required rate of return. The required rate of return is the cost of equity.
The cost of equity is 10% in this scenario
The price of the share will be determined as follows:
$
Present value of Dividend in yr 1 = 1.40× 1.1^(-1)= 1.27
Present value of Dividend in yr 2 = 1.50 × 1.1^(-2)=1.24
Present value of share in yr 2 = 25× 1.1^(-2) = 20.66
Present value of total cash inflow 23.17
Price of share today = $23.17
Stocks are considered as a financial instruments that represents a firm's ownership stake. Stocks are tool for investors to grow their money and surpass inflation over time.
The computation of the capital gain for the first year is shown below;
Current value = Future dividend and value × Present value of discounting factor(rate%, time period)
= $1.4 ÷ 1.1 + $1.5 ÷ 1.1^2 + $25 ÷ 1.1^2
= $23.15
Hence, the capital gain for the first year is $23.15
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Assume the following: The standard labor rate per hour is $17.00. The standard labor-hours allowed per unit of finished goods is 3 hours. The actual quantity of labor hours worked during the period was 44,000 hours. The total actual direct labor cost for the period was $726,000. The company produced 15,000 units of finished goods during the period. What is the labor efficiency variance
Answer: $17,000
Explanation:
Labour efficiency variance = Standard rate * (Standard hours - Actual hours )
Standard hours:
= Standard labor-hours allowed per unit * Number of units produced in period
= 3 * 15,000
= 45,000 hours
Labor efficiency variance = 17 * (45,000 - 44,000)
= $17,000 Favorable
Favorable because the standard amount is higher than the actual amount.
you have just purchased a new car! you made a down payment of $5,000 and financed the balance. According to the purchasing agreement, you must pay $600/month for four years, beginning one month from today. the credit agreement is based on an annual interest rate of 12%. what was the cost of the car
Answer:
Cost of car=$27,784
Explanation:
Loan Amortization: A loan repayment method structured such that a series of equal periodic installments will be paid for certain number of periods to offset both the loan principal amount and the accrued interest.
The monthly equal installment is calculated as follows:
Monthly equal installment= Loan amount/Monthly annuity factor
Loan amount =Balance payment= ?
Monthly annuity factor =
=( 1-(1+r)^(-n))/r
r- Monthly interest rate (r)
= 12/12= 1%
n- Number of months ( n) = 12× 4 = 48
Annuity factor
= ( 1- (1.01)^(-48)/0.01= 37.97
Total payments= 600 × 37.973
= $22,784.37
Cost of car = Down payment and the present value of balance
= 5,000+ 22,784.3=$27,784
All details related to an employee's earnings deductions and net pay throughout the year would be found in
Answer:
All details related to an employee's earnings deductions and net pay throughout the year would be found in the individual earnings record.
Explanation:
A random Quizlet had the answer when I searched the question up lol
The account balances of Paradise Travel Service for the year ended May 31, 20Y6, follow:
Fees earned $975,760
Office expense 224,425
Miscellaneous expense 19,515
Wages expense 468,365
Accounts payable 24,395
Accounts receivable 68,300
Cash 256,740
Common stock 135,000
Land 312,000
Supplies 11,710
Cash dividends of $37,100 were paid during the year. Retained earnings as of June 1, 20Y5, were $263,000.
Prepare the balance sheet as of May 31, 20Y6. When entering assets, enter them in order of liquidity.
Answer:
Paradise Travel Service
Balance Sheet as at May 31, 20Y6.
ASSETS
Non - Current Assets
Land 312,000
Total Non - Current Assets 312000
Current Assets
Supplies 11,710
Accounts receivable 68,300
Cash 256,740
Total Current Assets 336750
TOTAL ASSETS
EQUITY AND LIABILITIES
EQUITY
TOTAL EQUITY
LIABILITIES
Non - Current Liabilities
Total Non - Current Liabilities
Current Liabilities
Accounts payable 24,395
Total Current Liabilities
TOTAL LIABILITIES
EQUITY
Common stock 135,000
Retained Earnings 468,365
TOTAL EQUITY 603365
TOTAL EQUITY AND LIABILITIES
Explanation:
Profit = Sales - Expenses
= $975,760 - (224,425 + 19,515 + 468,365)
= $263,455
Retained Earnings Calculation
Opening Balance $263,000
Add Profit for the Year $263,455
Less Dividends ($37,100)
Ending Balance $489,355
1. Imagine yourself as a manager of a struggling local suburban regional shopping mall. What do you think the mall should do to improve its performance
Explanation:
There are several possibilities that can help a local suburban shopping mall in difficulty to improve its performance. Some options could be the hiring of surveys with the local community to identify consumption trends and preferences, as well as the search for the implementation of more anchor stores that are consistent with the financial situation and preferences of the target audience.
A shopping center also needs to have a lure for the public, something that differentiates it from competing stores, so another option for attracting customers would be to attract unique stores in the region to the mall, which are directly aligned with the values and preferences of the community. An interesting option is also to hold regional fairs, small artist shows, thematic space for children, etc.
Given the information below, answer the following two questions. Firm A Firm B Q 1000 1000 P 1 1 V 0.7 0.2 FC 200 700 A given change in Q will result in a larger change in EBIT for Firm ___ A. A B. B C. More information is needed to answer this question
Answer:
Firm A and Firm B
C. More information is needed to answer this question
Explanation:
a) Data and Calculations:
Firm A Firm B
Q 1000 1000
P 1 1
V 0.7 0.2
Contr 0.3 0.8
FC 200 700
EBIT 100 100
b) More information is certainly required to answer this question. Specifically, the direction of the given change in Q is not indicated. The answer will become clearer with this information. The question to ask is this: is the given change in Q an increase or a decrease?
Cora purchased a hotel building on May 17, 2020, for $3,000,000. Determine the cost recovery deduction for 2021. a.$76,920 b.$69,000 c.$48,150 d.$59,520
Answer: $76920
Explanation:
Firstly, we should note that the hotel building is simply non residential and then qualifies to be part of 39 year property.
Then, the cost of recovery will be:
= 1/39 × Cost of the hotel
= 1/39 × $3,000,000
= $76,920
Therefore, the cost recovery deduction for 2021 is $76,920
Assign each of the following to the correct category: A full-time college studentmultiple choice 1 Employed Unemployed Not in the labor force An accountant working full timemultiple choice 2 Employed Unemployed Not in the labor force A web developer working 20 hours/weekmultiple choice 3 Employed Unemployed Not in the labor force A recently laid-off factory worker looking for a jobmultiple choice 4 Employed Unemployed Not in the labor force A stay-at-home parentmultiple choice 5 Employed Unemployed Not in the labor force A recent college graduate looking for a jobmultiple choice 6 Employed Unemployed Not in the labor force
Answer:
Assignment to the correct category:
1. A full-time college student Not in the labor force
2. An accountant working full time Employed
3. A web developer working 20 hours/week Employed
4. A recently laid-off factory worker looking for a job Unemployed
5. A stay-at-home parent Not in the labor force
6. A recent college graduate looking for a job Unemployed
Explanation:
An employed person is one who is actively engaged in a paid job. Some unemployed persons are those who are actively seeking for jobs. This implies that a person, who is not actively engaged in a paid job or actively seeking for a job, is not in the labor force.
Last year Rennie Industries had sales of $270,000, assets of $175,000 (which equals total invested capital), a profit margin of 5.3%, and an equity multiplier of 1.2. The CFO believes that the company could reduce its assets by $51,000 without affecting either sales or costs. The firm finances using only debt and common equity. Had it reduced its assets by this amount, and had the debt/total invested capital ratio, sales, and costs remained constant, how much would the ROE have changed? Do not round your intermediate calculations. a. 3.03% b. 3.07% c. 4.04% d. 4.52% e. 4.08%
Answer:
c. 4.04%
Explanation:
Calculation to determine how much would the ROE have changed
First step is to Calculate last year Last year profit
Last year profit = $270,000 × 5.3%
Last year profit = $14,310.00
Second step is to calculate Last year equity
$175,000/Last year equity = 1.2
Last year equity = $175,000/1.2
Last year equity= $145,833.33
Third step is to calculate Last year ROE
Last year ROE = $14,310.00/$145,833.33
Last year ROE= 0.0981*100
Last year ROE= 9.81%
Fourth step is to Calculate New asset value
New asset value = $175,000 - $51,000
New asset value = $124,000
Fifth step is to calculate Equity after asset reduction
Equity after asset reduction = $124,000/1.2
Equity after asset reduction = $103,333.33
Sixth step is to calculate ROE after asset reduction
ROE after asset reduction = $14,310.00/$103,333.33
ROE after asset reduction =0.1385*100
ROE after asset reduction =13.85%
Now let calculate amount of change in ROE
Using this formula
Change in ROE = ROE after asset reduction - Last year ROE
Let plug in the formula
Change in ROE = 13.85% - 9.81%
Change in ROE = 4.04%
Therefore how much would the ROE have changed is 4.04%
People most commonly buy the services of a tattoo artist on the weekends. To encourage people to use their services on weekdays, many tattoo artists adjust prices to influence demand. In other words, they use differing prices to lessen the problems related to the _____ of services.
Answer:
C) perishability
Explanation:
THESE ARE THE OPTIONS FOR THE QUESTION BELOW
A) intangibility
B) inseparability
C) perishability
D) variability
E) responsiveness
From the question we are informed about some People who most commonly buy the services of a tattoo artist on the weekends. To encourage people to use their services on weekdays, many tattoo artists adjust prices to influence demand. In this case, they use differing prices to lessen the problems related to the perishability of services. Perishability of service can be regarded as marketing terms that give description about service that is not capable of been saved, resold or even returned immediately it has been uaed,. Whenever the service is been rendered to a particular customer , it cannot be delivered again to another customer.
This company purchased a truck at a cost of $12,000. The truck has an estimated residual value of $2,000 and an estimated life of 5 years, or 100,000 hours of operation. The truck was purchased on January 1, 2019, and was used 27,000 hours in 2019 and 26,000 hours in 2020. Refer to Flower Power. If the company uses the double-declining-balance depreciation method, what amount is the depreciation expense for 2020
Answer:
Annual depreaciation 2020= $2,400
Explanation:
Giving the following information:
Purchase price= $12,000
Salvage value= $2,000
Useful life= 5 years
To calculate the depreciation expense under the double-declining balance, we need to use the following formula:
Annual depreciation= 2*[(book value)/estimated life (years)]
2019:
Annual depreaciation= 2*[(12,000 - 2,000) / 5]
Annual depreaciation= 4,000
2020:
Annual depreaciation= 2*[(10,000 - 4,000) / 5]
Annual depreaciation= $2,400
TaeHwan Company accrues bad debt expense during the year at an amount equal to 3% of credit sales. At the end of the year, a journal entry adjusts the allowance for uncollectible accounts to a desired amount based on an aging of accounts receivable. At the beginning of 2018, the allowance account had a credit balance of $18,000. During 2018, credit sales totaled $480,000 and receivables of $14,000 were written off. The year-end aging indicated that a $21,000 allowance for uncollectible accounts was required. TaeHwan's bad debt expense for 2018 would be:
Answer: $17000
Explanation:
TaeHwan's bad debt expense for 2018 would be calculated as the difference between the desired year end balance and the beginning balance written off. This will be:
= $21000 - ($18000 - $14000)
= $21000 - $4000
= $17000
Therefore, TaeHwan's bad debt expense for 2018 would be $17000.
Rankine Company estimates its bad debts expense by aging its accounts receivable and applying percentages to various age groups of the accounts. Rankine calculated a total of $9,600 in possible credit losses as of December 31. Accounts Receivable has a balance of $307,200, and the Allowance for Doubtful Accounts has a credit balance of $1,200 before adjustment at December 31
Required:
What is the net amount of accounts receivable that should be included in current assets?
Answer:
Date Account titles and Explanation Debit Credit
Bad Debt Expense $8,400
Allowance for doubtful account $8,400
($9,600 credit required - $1,200 already existing)
(To record bad debt expenses)
Particulars Amount
Account receivables $307,200
Less: Allowance for doubtful account $9,600
Net amount of accounts receivable $297,600
Macmillan Toys Inc. is located in the nation of Ruffino near the nation of East Fenwick. Macmillan Toys is considering expanding into Rusalka. Both countries have similar consumer incomes and knowledge bases and share a common language. Also, the transportation networks between the countries are strong. Even so, the two nations have a long-standing dispute concerning the control of an area of land along their common border. Currently, Ruffino rules this land.
What would most likely prevent Macmillan Toys from expanding into Rusalka?
Answer: Political Distance
Explanation:
Political distance refers to a difference in opinion and policies as well as relations that countries have amongst themselves. In this scenario, this is the most likely bone of contention that would prevent Macmillan Toys from expanding into Rusalka.
This is because land disputes fall under political distance and can get very serious. So serious in fact that nations have gone to war over such disputes with the latest being Azerbaijan and Armenia. Macmillan Toys may therefore find it difficult to expand into the country due to this land dispute.
Juan works for you in the Customer Service Department. He hates answering incoming customer calls and prefers to respond to customer emails. Juan is scheduled to answer the phones today and insists that you let him switch with Shawna, who is assigned to e-mail duty. Although you have refused to allow Juan to switch schedules in the past, you agree to do so today. What is your style for handling this conflict
Answer:
Accommodating Style
Explanation:
It is correct to say that the style of accommodation was chosen to deal with the conflict exposed in the question above. This style understands that a party agrees to meet a person's needs for the sake of the relationship.
Accommodation in conflict resolution can be effective when the final result will not be as impacted by what you want to accept, as in the case of the question, since the change in the roles of Juan and Shawna will not affect the final result.
During 2018, TRC Corporation has the following inventory transactions.
Date Transaction Number of Units Unit Cost Total Cost
Jan. 1 Beginning inventory 48 $40 $1,920
Apr. 7 Purchase 128 42 5,376
Jul. 16 Purchase 198 45 8,910
Oct. 6 Purchase 108 46 4,968
For the entire year, the company sells 427 units of inventory for $58 each.
Required:
1. Using FIFO, calculate ending inventory, cost of goods sold, sales revenue, and gross profit.
2. Using LIFO, calculate ending inventory, cost of goods sold, sales revenue, and gross profit.
3. Using weighted-average cost, calculate ending inventory, cost of goods sold, sales revenue, and gross profit.
Answer:
Results are below.
Explanation:
Giving the following information:
Jan. 1 Beginning inventory 48 $40 $1,920
Apr. 7 Purchase 128 42 5,376
Jul. 16 Purchase 198 45 8,910
Oct. 6 Purchase 108 46 4,968
For the entire year, the company sells 427 units of inventory for $58 each.
Ending inventory units= 482 - 427= 55
1)
Under the FIFO (first-in, first-out) method, the ending inventory is calculated using the cost of the lasts units remaining in inventory.
Ending inventory= 55*46= $2,530
COGS= 48*40 + 128*42 + 198*45 + 53*46= $18,644
Revenue= 427*58= $24,766
Gross profit= 24,766 - 18,644= $6,122
2)
Under the LIFO (last-in, first-out) method, the ending inventory is calculated using the cost of the firsts units remaining in inventory.
Ending inventory= 48*40 + 7*42= $2,214
COGS= 108*46 + 198*45 + 121*42= $18,960
Revenue= 427*58= $24,766
Gross profit= 24,766 - 18,960= $5,806
3)
First, we need to calculate the weighted-average cost:
weighted-average cost= (40 + 42 + 45 + 46) / 4= $43.25
Ending inventory= 55*43.25= $2,378.75
COGS= 427*43.25= $18,467.75
Revenue= 427*58= $24,766
Gross profit= 24,766 - 18,467.75= $6,298.25
Performance management includes standards for measuring how well
individual performance supports the company's goals, practices for
measuring performance against those standards, and .
O A. procedures for giving feedback to employees
0 B. preparation for moving into managementjobs
O C. hands-on learning methods
0 D. presentations by a trainer
the answers A, procedures for give feedback to employees.
Performance management includes standards for measuring how well individual performance supports the company's goals, practices for measuring performance against those standards, and procedures for giving feedback to employees.
What is an employee?
A worker or manager who works for a business, group, or community is referred to as an employee. The organization's personnel consists of these people. There are various types of employees, but in general, any individual engaged by an employer to do a specific task in exchange for remuneration is considered an employee.
An employee benefit plan known as a pension is one that offers retirement income or postpones income until the end of covered employment or beyond. It may be developed or managed by an employer, an employee group (such as a union), or both.
The process of ensuring that a set of actions and outputs achieves the objectives of an organization effectively and efficiently is known as performance management. Performance management can be used to evaluate an employee, a department, a whole business, or the systems in place to handle certain tasks.
Therefore, Thus option (A) is correct
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Identify which of the following statements are true for the corporate form of organization. (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) check all that apply Ownership rights cannot be easily transferred. Owners have unlimited liability for corporate debts. Capital is more easily accumulated than with most other forms of organization. Corporate income that is distributed to shareholders is usually taxed twice. It is a separate legal entity. It has a limited life. Owners are not agents of the corporation.
Answer:
Following are the responses to the given question:
Explanation:
In point a, it is false because the ownership of a stock owned by shareholders is directly adaptable by sale.In point b, it is false because the corporate bosses have no responsibility. A corporate company is an organizationIn point c, it is true because This company is going on a broad-based business. Its necessary capital is enormous but is obtained from three sources.In point d, it is true because the company money is calculated twice in normal conditions, except for where tax-deductible is declared for both the dividends in shareholders' hands.In point e, it is true because Its company's legality is distinct from those of its owners. That both companies, as well as the owner, are separate legal entities. Firms have a common seal as well as their titles.In point f, it is false because UNLIMITED was its life of corporates and the foundation of the 'Moving Concern' idea.In point g, it is true because the actual owner isn't a business agent. They're only the owner that gives money.Emilio works in Finance. He collaborates with Real Estate Agents and title companies to help people qualify for home loans. In which career does Emilio work?
Mortgage Brokering
Insurance Sales
Tax Preparation
Financial Management
Answer:
Mortgage Brokering
Answer:
Mortgage Brokering
Explanation:
Dellarocco Incorporated makes a single product--a cooling coil used in commercial refrigerators. The company has a standard cost system in which it applies overhead to this product based on the standard labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below: Budgeted fixed manufacturing overhead $ 355,740 Budgeted hours 49,000 labor-hours Actual fixed manufacturing overhead $ 372,740 Actual hours 45,600 labor-hours The fixed overhead budget variance is:
Answer:
the fixed overhead budget variance is $17,000 unfavorable
Explanation:
The computation of the fixed overhead budgeted variance is shown below:
= Budgeted overhead - actual overhead
= $355,740 - $372,740
= $17,000 unfavorable
Since the budgeted overhead is less than the actual overhead so it is an unfavorable variance
Hence, the fixed overhead budget variance is $17,000 unfavorable
Thermopolis, Inc. reported retained earnings of $490,953 on December 31, 2017. During the year, Thermopolis recorded net income of $135,075 and paid dividends of $57,762. The company had no other transactions that affected retained earnings. What must retained earnings have been on December 31, 2016
Answer:
the Opening retained earning balance is $413,640
Explanation:
The computation of the retained earnings have been on December 31, 2016 is shown below:
As we know that
Ending retained earning balance = Opening retained earning balance + net income - dividend paid
$490,953 = Opening retained earning balance + $135,075 - $57,762
$490,953 = Opening retained earning balance + $77,313
So, the Opening retained earning balance is $413,640
The taxpayer is a Ph.D. student in accounting at City University. The student is paid $1,500 per month for teaching two classes. The total amount received for the year is $13,500. a.The $13,500 is considered a scholarship and, therefore, is excluded. b.The $13,500 is excluded because the total amount received for the year is less than her standard deduction and personal exemption. c.The $13,500 is taxable compensation. d.The $13,500 is excludible if the money is used to pay for tuition and books.
Answer: c. The $13,500 is taxable compensation.
Explanation:
The $13,500 received is to be considered a taxable compensation because amounts paid for teaching or research, even to students, should be included in the gross income calculation which makes it a taxable compensation.
There are some exceptions to this however such as income from the National Health Service Corps Scholarship Program, the Armed Forces Health Professions Scholarship and Financial Assistance Program but this does not apply here.
Use T-accounts to record the transactions below, which occur on March 12, 2020, close the T-accounts, and construct a balance sheet to answer the question. 1. Purchase equipment for $50,000 in cash 2. Borrow $67,000 from a bank 3. Issue $80,000 in stock 4. Buy $16,000 worth of manufacturing supplies on credit 5. Pay $7,000 owed to a supplier What is the final amount in Total Equity?
Answer:
Stock Issue $80,000
Less : Purchase of equipment $50,000
Add: Borrowing from bank $67,000
Less: Manufacturing Supplies $16,000
Less: Payment to Supplier $7,000
Ending Balance $83,000
Explanation:
Total equity is the part of a business which is the main financing source. Liabilities are deducted from assets to derive equity of a business. Equity is the main source of financing for any business. Equity can be raised from various means, borrowing, stock issues, cash investments and other similar transactions.
Which of the following is/are true about kanban? A. The purpose of the kanban system is to ensure that parts are produced JIT to support subsequent processes. B. Some companies control the movement of the containers by using two types of kanban cards, production cards and withdrawal cards. C. Kanban cards take the place of shop paperwork used in traditional repetitive mass production. D. a and b are true
Answer:
c
Explanation:
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Motorcycle Manufacturers, Inc. projected sales of 51,100 machines for the year. The estimated January 1 inventory is 6,460 units, and the desired December 31 inventory is 7,130 units. What is the budgeted production (in units) for the year
Answer:
51,770 units
Explanation:
With regards to the above, the budgeted production (in unit) for the year is computed as;
= Sales - Beginning inventory + Ending inventory
Given that ;
Sales = 51,100
Beginning inventory = 6,460
Ending inventory = 7,130
Budgeted production in units for the year = 51,100 - 6,460 + 7,130 = 51,770 units
Keith Inc. has 4 product lines: sour cream, ice cream, yogurt, and butter. Demand of individual products is not affected by changes in other product lines. 30% of the fixed costs are direct, and the other 70% are allocated. Results of June follow:
Sour Cream Ice Cream Yogurt Butter Total
Units sold 2,000 500 499 200 3,100
Revenue 10,000 20,000 10,000 20,000 60,000
Variable departmental costs 6,000 13,000 4,200 4,800 28,000
Fixed costs 7,000 2,000 3,000 7,000 19,000
Net income (loss) (3,000) 5,000 2,800 8,200 13,000
Required:
Prepare an incremental analysis of the effect of dropping the sour cream product line.
Answer:
Dropping Sour would lead to a net loss of $(1,900)
Explanation:
To determine whether or not it will be profitable to drop a loss making product, we compare the savings in fixed cost to the lost contribution from dropping it.
It is noteworthy that only the fixed cost attributed to the product would be saved should it be discontinued.
The incremental analysis is done as follows:
Direct fixed cost of Sour = 30%× 7,000 = 2,100
Lost contribution = sales value - variable cost = 10,000-6,000= 4,000
$
Lost contribution (4,000)
Savings in fixed cost 2,100
Net loss in contribution (1,900)
Dropping Sour would lead to a net loss of $(1,900)
Question 1: Ron Knuckle set up a business selling keep fit equipment, trading under the name of Buy Your Biceps Shop. He put $7.000 of his own money into a business bank account (transaction A) and in his first period of trading, the following transactions occurred. Transactions:
B: Paid rent of shop for the period: $3.500.
C: Purchased equipment (inventories) on credit: $5.000.
D: Raised loan from bank: $1.000.
E: Purchase of shop fittings (for cash): $2.000.
F: Sales of equipment cash: $10.000.
G: Sales of equipment, on credit: $2.500.
H: Payments for trade accounts payable: $5.000.
I: Payments from trade accounts receivable: $2.500.
J: Interest on loan (paid): $100.
Required: Identify the debit, the credit entries and the amount in the above transactions
Answer:
Explanation: YOU WOULD GET 300,000