Answer: b. the necessity to think in the long term rather than the short term
Explanation:
There are policy changes that a company can make that will result in them having lower profits. For this reason, the CEO might face opposition or limitations from certain people or principles in implementing such changes.
The Board of Directors is one such limitation as they owe it to the shareholders to maximise their wealth and if climate change policy might hinder that, they might limit the policy. This reason is the same for any limitation from investor support which is linked directly to profits.
The CEO also has the same fiduciary responsibility to maximise shareholder wealth as well. The only option which is not a limiting factor therefore is the necessity to think in the long term rather than the short term.
The quantity demanded of turkey decreased from 5,000 to 4,750 when the price of chicken decreased from $2.00 to $1.90. What is the estimated cross-price elasticity of demand for turkey
Answer:
The estimated cross price elasticity of demand is -1
Explanation:
Here, we want to calculate the cross-price elasticity value
Mathematically, the cross price elasticity value is;
Percentage change in quantity of turkey/percentage change in price of chicken
percentage change in quantity of turkey will be
(4750-5000)/5000 = -0.05%
Percentage change in price of chicken will be
(1.9-2.0)/2 = -0.05
So the cross-price elasticity if demand will be ; 0.05/-0.05 = -1
When new facilities are built and operated overseas that require large investment of capital because these new establishments are tailored to the exact needs of the home country firm, it is called a(n) _____.
a. exporting.b. subsidiary.c. strategic alliance.d. multinational enterprise.e. foreign acquisition.
Answer:
b. subsidiary
Explanation:
Subsidiaries are companies that belong to a larger parent company. They are usually established overseas as an extension of the parent company's operations.
Parent companies of the subsidiaries hold controlling interest in stock, therefore they tailor the subsidiaries to their exact needs.
When there is a 100% ownership by the parent company it is called a wholly owned subsidiary
On August 31, Year 1, the general ledger of a company shows a balance for cash of $7,774. Cash receipts yet to be deposited into the checking account total $3,168, and checks written by the academy but not yet processed by the bank total $1,255. The company's balance of cash does not reflect a bank service fee of $18 and interest earned on the checking account of $29. These amounts are included in the balance of cash of $5,872 reported by the bank as of the end of August. Required: 1. Prepare a bank reconciliation to calculate the correct ending balance of cash on August 31, Year 1. (Amounts to be deducted should be indicated with a minus sign.)
Answer:
Reconciling Bank balance
Balance per Bank statement 5,872
Add: Deposit in transit 3,168
Less: Outstanding checks (1,255)
Bank balance per Reconciliation $7,785
Reconciling Cashbook balance
Balance per General Ledger 7,774
Add: Interest Income 29
Less: Bank Service Fee 18
Company Balance per Reconciliation $7,785
ere are simplified financial statements for Watervan Corporation:
INCOME STATEMENT
(Figures in $ millions)
Net sales $
888.00
Cost of goods sold
748.00
Depreciation
38.00
Earnings before interest and taxes (EBIT) $
102.00
Interest expense
19.00
Income before tax $
83.00
Taxes
17.43
Net income $
65.57
BALANCE SHEET
(Figures in $ millions)
End of Year Start of Year
Assets
Current assets $
376
$
326
Long-term assets
272
229
Total assets $
648
$
555
Liabilities and shareholders’ equity
Current liabilities $
201
$
164
Long-term debt
115
128
Shareholders’ equity
332
263
Total liabilities and shareholders’ equity $
648
$
555
The company’s cost of capital is 8.5%.
a. Calculate Watervan’s economic value added (EVA). (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)
b. What is the company’s return on capital? (Use start-of-year rather than average capital.) (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
c. What is its return on equity? (Use start-of-year rather than average equity.) (Enter your answer as a percent rounded to 2 decimal places.)
d. Is the company creating value for its shareholders?
Answer:
c
Explanation:
Which of the following statements are true? (Check all that apply.) A. Accounting systems generally consist of several subsystems, each designed to process a particular type of transaction. B. Most mobile devices do not need to be tracked and monitored as their loss represents minimal exposure. C. Supervision is especially important in organizations without responsibility reporting or an adequate segregation of duties. D. All system transactions and activities should be recorded in a log that indicates who accessed what data and when. E. Customer relationship management (CRM) software includes budgets, schedules, and standard costs; reports comparing actual and planned performance; and procedures for investigating and correcting significant variances.
Answer:
A. Accounting systems generally consist of several subsystems, each designed to process a particular type of transaction.
C. Supervision is especially important in organizations without responsibility reporting or adequate segregation of duties
Explanation:
A. Indeed, because the accounting system consists of several subsystems, such as data systems, the workforce, the procedures and instructions, and software with each designed to process a particular type of transaction.
B. When an organization doesn't assign its staff their specific responsibilities it then becomes especially important to supervise the employees, because failing to do so may result in low worker productivity.
A capital investment project is expected to generate an incremental increase in revenues of $15 million and an incremental increase in operating costs of $10 million during its first year. Year 1 incremental depreciation expense is $5 million. The firm’s interest expense will increase by $2 million during year 1. If the firm’s marginal tax rate is 35% what is the year 1 incremental after-tax cash flow for capital budgeting purposes?
Answer:
$5,000,000
Explanation:
Particulars Amount
incremental increase in revenues $15,000,000
- Incremental increase in operating costs $10,000,000
- Incremental depreciation expense $5,000,000
Earnings before interest and taxes $0
Tax ($0 *35%) $0
Operating Income $0
+ Incremental depreciation expense $5,000,000
After Tax Cash flow for capital budgeting $5,000,000
The cost for system 1 of dispensing maps is:
Y = 0.2 X + 6000, where Y = Total Costs in $, X=total number of maps dispensed (in a year).At 3000 maps per year, what is the marginal cost and what is the average cost?
[Tip: marginal cost means what is your additional cost by dispensing one more map. average cost means what is the cost per one map [for 3000 maps total]]
Answer:
a. The marginal cost is $0.2.
b. The average cost is $2.20.
Explanation:
Given in the question are the following:
Y = 0.2X + 6000 ................ (1)
Where; Y = Total Costs in $
X = total number of maps dispensed (in a year)
a. What is the marginal cost?
The marginal cost (MC) can be obtained by differentiating equation (1) with respect to X as follows:
MC = dY/dX = 0.2
Therefore, the marginal cost is $0.2.
b. What is the average cost?
This can be calculated as follows:
At X = 3000 maps
Substitute X = 3000 into equation (1) in part a to obtain the total cost as follows:
Y = 0.2(3000) + 6000
Y = (0.2 * 3000) + 6000
Y = 600 + 6000
Y = $6,600
The average cost now be calculated using the following formula:
Average cost = Y / X ...................... (2)
Where;
Y = Total Costs in $ = $6,600
X = Number of maps per year = 3,000
Substituting the values into equation (2), we have:
Average cost = $6,600 / 3,000 = $2.20
Therefore, the average cost is $2.20.
If the average propensity to consume is 0.75, and the marginal propensity to consume is 0.70, if income rises by $4,000, consumption will increase by _____. (Remember when we use APC versus MPC. Use only one for this question).
Answer:
$2,800
Explanation:
The computation of the increase in consumption is shown below:
= Marginal propensity to consume × rise in income
= 0.70 × $4,000
= $2,800
Hence, the consumption would be increased by $2,800
We simply applied the above formula i.e. marginal propensity to consume is multiplied with the rise in income so that the correct answer could come
Chelsea Company has sales of $400,000, variable costs of $10 per unit, fixed costs of $100,000, and a target profit of $60,000. How many units were sold?
a. 12,000
b. 18,000
c. 24,000
Answer:
24,000
Explanation:
Chelsea company had sales of $400,000
Variable cost is $10 per unit
Fixed costs is $100,000
Tarhet profit is $60,000
Thetefore The units sold can be calculated as follows
400,000-10Q-$100,000= $60,000
$400,000-$100,000-10Q= $60,000
$300,000-Q= $60,000
$300,000-$60,000= 10Q
$240,000= 10Q
Q= 240,000/10
Q= 24,000
At the end of the year, Mercy Cosmetics’ balance of Allowance for Uncollectible Accounts is $450 (credit) before adjustment. The balance of Accounts Receivable is $17,500. The company estimates that 15% of accounts will not be collected over the next year. What adjustment would Mercy Cosmetics record for Allowance for Uncollectible Accounts?
Answer:
Mercy Cosmetics
Adjustment to record for Allowance for Uncollectible Accounts is:
$2,175
Explanation:
The Allowance for Uncollectible Accounts = $450 credit before adjustment .
After adjustment the Allowance for Uncollectible Accounts will equal $2,625 (15% of $17,500).
So the adjustment for the period is to debit the Uncollectible Expense account with $2,175 and then credit the Allowance for Uncollectible Accounts with $2,175. This adjustment brings the Allowance for Uncollectible Accounts to $2,625 as stated earlier.
If a firm has a sales price per unit of $6.00, a variable cost per unit of $4.00, and a break-even point of 40,000 units, fixed costs are equal to
Answer:
$80,000
Explanation:
From marginal analysis concepts, the break-even point is determined using the formula.
Break-even in units = fixed cost / contribution margin per unit
For this firm,
break -even = 40,000 units
Contribution margin per unit = selling price - variable costs
=$6 - $4 =$2
Therefore:
40,000 = fixed costs/ $2
Fixed costs = $40,000 x 2
Fixed costs = $80,000
If the government decides to build a new highway, the first step would be to conduct a study to determine the value of the project. The study is called a a. budget analysis. b. project analysis. c. reimbursement analysis. d. cost-benefit analysis.
Answer:
D. Cost-benefit analysis
Explanation:
Cost-benefit analysis can be defined as a strategic approach which typically involves measuring and estimating the overall cost of a project, as well as all possible profits to be derived.
This ultimately implies that, the cost-benefit analysis helps business owners or project managers to weigh the benefits associated with a particular project and how to decide on what decisions (actions) to be taken.
Hence, if the government decides to build a new highway, the first step would be to conduct a study to determine the value of the project. Therefore, this study is generally referred to as cost-benefit analysis because involves weighing the incremental benefit against the incremental cost of a decision.
In conclusion, when individuals such as decision-makers or project manager, is implementing and executing a project, it is very essential and important that he does a cost-benefit analysis; by weighing the overall and potential benefits or gains to be derived from that project in comparison with the costs of execution. Thus, when the incremental benefits is greater than the incremental cost of the decision, then it is logical and safe to make the move or do it.
Akira Takano, a marketing manager, is about to test his hypothesis that if the price of a particular product is increased by $5, unit sales will increase by 10 percent. Akira is involved in ________ research.
Answer:
a. causal
Explanation:
The causal research refers to the research in which there is an investigation or the research would depend upon the cause and effect relationship.
It is known as explanatory research.
According to the given case, since the price is increased by $5 and the unit sale is risen by $10 so here the Akira involved in Causal research and the same is to be considered
Karla owns a monopolistically competitive firm that has many competitors that advertise. What can Karla realistically hope to achieve if she decides to advertise as well?
Answer:
1.) Katy can educate her consumers about the differences between her store and her competitors.
2.) Katy can protect her consumer base.
Explanation:
Using advertisements, Katy can show her consumer the differences and advantages that her products have over those of her competitors thereby encouraging them to patronise her.
She can also use these adverts to protect her customer base from her competitors because when they see the adverts, they will be even more encouraged to keep buying from Katy and will thus be less likely to switch to her competitors.
The other two options are incorrect.
Define the limits of the principle of commonality in regards to individuals, government, and corporations.
Answer:
The answer is below
Explanation:
Given that principle of commonality deals with things that are generally good or beneficial to the whole society regardless of time, space, and cultures. For example, education. However, there are some limitations to the principle of commonality, in relations to government, corporations, and individuals, such as:
1. Lawful subordination: often, corporations are compelled to carry out their activities in a certain way, otherwise they will be sanctioned heavily. This can also be applied to individuals and governments when it comes to making decisions that need approval based on established laws and legal procedures.
2. Economic power: for most common goods that are considered beneficial to society are often capital intensive. Be either corporation, government, or individuals, need a good amount of capital to facilitate necessarily sustainable advancement.
The following account titles and balances were taken from the adjusted trial balance of King Co. for Year 2. The company uses the periodic inventory system.
Account Title Balance
Sales returns and allowances $ 3,500
Miscellaneous expense 1,100
Transportation-out 2,500
Sales 155,000
Advertising expense 6,500
Salaries expense 21,600
Transportation-in 2,950
Purchases 85,000
Interest expense 450
Merchandise inventory, January 1 12,000
Rent expense 8,500
Merchandise inventory, 10,700
December 31
Purchase returns and allowances 2,500
Loss on sale of land 3,500
Utilities expense 1,750
Required:
1. Prepare a schedule to determine the amount of cost of goods sold.
2. Prepare a multistep income statement.
3. Prepare a single-step income statement.
Answer:
King Co.
1. Schedule of Cost of Goods Sold:
Merchandise inventory, January 1 $12,000
Purchases 85,000
Transportation-in 2,950
Purchase returns and allowances (2,500 )
Merchandise inventory, (10,700 )
Cost of goods sold $86,750
2. King Co.'s Multi-step Income Statement
For the year ended December 31:
Net Sales $151,500
Cost of goods sold 86,750
Gross profit $64,750
Expenses:
Miscellaneous expense 1,100
Transportation-out 2,500
Advertising expense 6,500
Salaries expense 21,600
Rent expense 8,500
Utilities expense 1,750
Total expenses $41,950
Operating income $22,800
Interest expense 450
Income before taxes $22,350
Loss on sale of land 3,500
Net Income $18,850
3. King Co's Single-step Income Statement
For the year ended December 31:
Net Sales $151,500
Cost of goods sold 86,750
Operating expenses 41,950
Interest expense 450
Loss on sale of land 3,500 132,660
Net Income $18,850
Explanation:
Data:
Sales $155,000
Sales returns and allowances (3,500)
Net Sales $151,500
Miscellaneous expense 1,100
Transportation-out 2,500
Advertising expense 6,500
Salaries expense 21,600
Rent expense 8,500
Utilities expense 1,750
Total expenses $41,950
Interest expense 450
Loss on sale of land 3,500
Transportation-in 2,950
Purchases 85,000
Purchase returns and allowances 2,500
Merchandise inventory, January 1 12,000
Merchandise inventory, 10,700
December 31
Company incurred the following costs while producing units: direct materials, per unit; direct labor, per unit; variable manufacturing overhead, per unit; total fixed manufacturing overhead costs, ; variable selling and administrative costs, per unit; total fixed selling and administrative costs, . There are no beginning inventories. What is the operating income using absorption costing if units are sold for each?
Answer:
"$45" seems to be the correct answer.
Explanation:
The query given appears insufficient or unfinished. Please find attachment of the full questionnaire.
According to the question:
Direct Material
= 9
Variable Manufacturing Overhead
= 16
Direct Labor
= 20
Now,
The units product cost will be:
= [tex]Direct \ Material + Direct \ Labor +Variable \ Manufacturing \ Overhead[/tex]
= [tex]9+20+16[/tex]
= [tex]45[/tex]$
Last year Janet purchased a $1,000 face value corporate bond with an 11% annual coupon rate and a 15-year maturity. At the time of the purchase, it had an expected yield to maturity of 12.21%. If Janet sold the bond today for $993.14, what rate of return would she have earned for the past year? Do not round intermediate calculations. Round your answer to two decimal places.
Answer:
20.10%
Explanation:
The first task is to compute the bond's purchase price last year which is found using the bond price formula below:
bond price=face value/(1+r)^n+ annual coupon*(1-(1+r)^-n/r
face value=$1000
r=yield to maturity=12.21%
n=number of annual coupons in 15 years=15
annual coupon=face value*coupon rate=$1000*11%=$110
bond price=1000/(1+12.21%)^15+110*(1-(1+12.21%)^-15/12.21%
bond price=1000/(1+12.21%)^15+110*(1-0.177634192 )/12.21%
bond price=$918.50
Rate of return=(price today-initial price+coupon received)/initial price
price today= $993.14
initial price=$918.50
coupon received(for 1 year)=$110
Rate of return=($993.14-$918.50+$110)/$918.50=20.10%
What current trend in the sport or entertainment area do you think will fall into disfavor with the consumer population
Answer:
Bantering of words between entertainers in the social media forums.
Explanation:
Today, it is not unusual to find entertainers in the sport and entertainment industries, exchanging words, and settling squabbles on social media platforms. Such behaviors are unprofessional and persistently resorting to these crude ways would create tensions among fans who are the consumer population.
Most fans who are enlightened would definitely not be favorably disposed to these trends. Entertainers should do well not to foster disunity among themselves.
According to Nohria, Groysberg, and Lee, within an organization, the primary lever to address the drive to ____ is the reward system.
Answer:
Civillization
Explanation:
Oklahoma Oil Corp. paid interest of $792,000 during 2021, and the interest payable account decreased by $129,500. What was interest expense for the year
Answer:
The interest expense for the year is $662,500.
Explanation:
The following are given in the question:
Interest paid during the year 2021 = $792,000
Amount of decrease in interest payable account = $129,500
The interest expense for the year can be calculated as follows:
Interest expense for the year = Interest paid during the year 2021 - Amount of decrease in interest payable account = $792,000 - $129,500 = $662,500
Therefore, the interest expense for the year is $662,500.
At the end of the year, the deferred tax asset account had a balance of $4 million attributable to a temporary difference of $16 million in a liability for estimated expenses. Taxable income is $44 million. No temporary differences existed at the beginning of the year, and the tax rate is 25%. Prepare the journal entry(s) to record income taxes, assuming it is more likely than not that three-fourths of the deferred tax asset will not ultimately be realized.
Answer:
1 . Dr ncome tax expense 7
Dr Deferred tax asset 4
Cr Income tax payable 11
2. Dr Income tax expense3
Cr Valuation allowance-Deferred tax asset3
Explanation:
Preparation of Journal entries
JournalDebitCredit
(In million)
1 . Dr ncome tax expense 7
($11-$4=7)
Dr Deferred tax asset 4
($16× 25% = $4)
Cr Income tax payable 11
($44 × 25% = $11 )
2. Dr Income tax expense3
Cr Valuation allowance-Deferred tax asset3
(3/4 × $4) = $3 million
Deferred tax asset= ($16× 25%)
Deferred tax asset= $4 million
Income tax payable= ($44 × 25%)
Income tax payable= $11 million
What was this product's net operating income (loss) last year? last year minden company introduced a new product and sold 15,000 units of it at a price of $70 per unit. the product's variable expenses are $40 per unit and its fixed expenses are $540,000 per year. required: 1. what was this product's net operating income (loss) last year? 2. what is the product's break-even point in unit sales and dollar sales? 3. assume the company has conducted a marketing study that estimates it can increase annual sales of this product by 5,000 units for each $2 reduction in its selling price. if the company will only consider price reductions in increments of $2 (e.g., $68, $66, etc.), what is the maximum annual profit that it can earn on this product? what sales volume and selling price per unit generate the maximum profit? 4. what would be the break-even point in unit sales and in dollar sales using the selling price that you determined in requirement 3?
Answer:
1. What was the product's operating income(loss) last year = $90,000 loss
2. What is the product's Break even point in unit sales and dollars
• Break even sales in units 18,000
• Break even i n sale dollars $1,260,000
3. Maximum annual profit given an increment of 5,000 units and reduction of sales price per unit by $2.
• Net profit of $20,000
4. What would be the break even point in unit sales and dollars using the selling price that you determined in requirement 3.
• Break even sales units 19,285.7
• Break even in sales dollars $1,311,427.6
Explanation:
Please see attached detailed solution to the above questions and answers.
The product's net operating loss last year was $90,000.
The net operating loss will be calculated thus:
Sales (15000 × 70) = 1050000Less: Variance cost (15000 × 40) = 600000Contribution margin = 450000Less: fixed cost = 540000Net operating loss = 90000The product's break even sales in units will be:
= $540000 / $30
= 18,000
The break even in sale in dollars will be:
= 18000 × 70
= $1,260,000
Read related link on:
https://brainly.com/question/18507538
What is the beta for a 2 stock portfolio with a 0.54 weight in Walmart stock and the remainder in Amazon
Answer: 0.73
Explanation:
Walmart Beta = 0.3616
Amazon's beta = 1.1634
The beta of the portfolio will be a weighted average of the portfolio beta;
= (Walmart beta * Walmart weight) + ( Amazon beta * Amazon weight)
= (0.3616 * 0.54) + ( 1.1634 * (1 - 0.54))
= 0.730428
= 0.73
For each account listed, identify whether the account would appear in either the income statement section or the balance sheet section of the worksheet. Assuming normal balances, identify if the account would be recorded in the debit (DR) or credit (CR) column. Account Section of worksheet Debit (DR) or Credit (CR) column? 8. Service Revenue 9. Accounts Payable 10. Cash 11. Depreciation Expense—Building 12. Sandy, Withdrawals 13. Accumulated Depreciation—Building
Answer:
dh xdr uh detox scv dry jcb dr utf xxv bird sync
Explanation:
weir acoustic rabbit eui Inc's zero
As the price of margarine rises by 20%, a manufacturer of baked goods increases its quantity of butter demanded by 5%. Calculate the cross-price elasticity of demand between butter and margarine. Are butter and margarine substitutes or complements for this manufacturer
Answer:
Cross Price Elasticity = 0.25Goods are SUBSTITUTESExplanation:
The Cross-price elasticity of two goods can be calculated by the formula;
= % Change in quantity demanded of A / % change in price of B
= 5/20
= 0.25
Positive Cross Price elasticities mean that the goods are substitutes.
This is because when the price went up in one good, the quantity demanded of the other good went up because people switched to the other good from the first good because the prices went up showing that the goods are substitutes.
Tiger Equipment Inc., a manufacturer of construction equipment, prepared the following factory overhead cost budget for the Welding Department for May of the current year. The company expected to operate the department at 100% of normal capacity of 8,700 hours.
TIGER EQUIPMENT INC.
Factory Overhead Cost Budget—Welding Department
For the Month Ended May 31
1 Variable costs:
2 Indirect factory wages $40,020.00
3 Power and light 20,880.00
4 Indirect materials 17,400.00
5 Total variable cost $78,300.00
6 Fixed costs:
7 Supervisory salaries $19,800.00
8 Depreciation of plant and equipment 35,700.00
9 Insurance and property taxes 18,450.00
10 Total fixed cost 73,950.00
11 Total factory overhead cost $152,250.00
During May, the department operated at 9,080 standard hours, and the factory overhead costs incurred were indirect factory wages, $42,268; power and light, $22,064; indirect materials, $18,700; supervisory salaries, $19,800; depreciation of plant and equipment, $35,700; and insurance and property taxes, $18,450.
Prepare a factory overhead cost variance report for May. To be useful for cost control, the budgeted amounts should be based on 9,080 hours. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Enter favorable variances as negative amounts.
Factory Overhead Cost Variance Report
Shaded cells have feedback.
Prepare a factory overhead cost variance report for May. To be useful for cost control, the budgeted amounts should be based on 8,860 hours. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Enter favorable variances as negative amounts.
Score: 106/174
TIGER EQUIPMENT INC.
Factory Overhead Cost Budget - Welding Department
For the Month Ended May 31
1 Productive capacity for the month 8,700 hours
2 Actual production for the month 9,080 hours
3
4 Budget (at Actual Production) Actual Variances: Favorable Variances: Unfavorable
5 Variable factory overhead costs:
6 ✔ ✔
7 ✔ ✔
8 ✔ ✔
9 ✔ ✔
10 Fixed factory overhead costs:
11 ✔ ✔
12 ✔ ✔
13 ✔ ✔
14 ✔ ✔
15 ✔ ✔
16 ✔
17
18 ✔
19 ✔
20 ✔
Answer:
TIGER EQUIPMENT INC.
Factory Overhead Cost Budget—Welding Department
For the Month Ended May 31 Budgets
1 Variable costs: Static Flexible Actual Variance
2 Indirect factory wages $40,020 $41,768 $42,268 $500 U
3 Power and light 20,880 21,792 22,064 272 U
4 Indirect materials 17,400 18,160 18,700 540 U
5 Total variable cost $78,300 $81,720 $83,032 $1,312 U
6 Fixed costs:
7 Supervisory salaries $19,800 $19,800 $19,800 None
8 Depreciation of plant & equipment 35,700 35,700 35,700 None
9 Insurance and property taxes 18,450 18,450 18,450 None
10 Total fixed cost 73,950 $73,950 $73,950 None
11 Total factory overhead cost $152,25 $155,670 $156,982 $1,312 U
Explanation:
TIGER EQUIPMENT INC.
Factory Overhead Cost Budget—Welding Department
For the Month Ended May 31
1 Variable costs: Static Flexible Actual Variance
2 Indirect factory wages $40,020 $41,768 $42,268 $500 U
3 Power and light 20,880 21,792 22,064 272 U
4 Indirect materials 17,400 18,160 18,700 540 U
5 Total variable cost $78,300 $81,720 $83,032 $1,312 U
6 Fixed costs:
7 Supervisory salaries $19,800 $19,800 $19,800 None
8 Depreciation of plant & equipment 35,700 35,700 35,700 None
9 Insurance and property taxes 18,450 18,450 18,450 None
10 Total fixed cost 73,950 $73,950 $73,950 None
11 Total factory overhead cost $152,25 $155,670 $156,982 $1,312 U
Flexing the budget:
Indirect factory wages $40,020.00/8,700 * 9,080 = $41,768
Power and light 20,880.00/8,700 * 9,080 = $ 21,792
Indirect materials 17,400.00 /8,700 * 9,080 = $18,160
Total variable cost $78,300.00/8,700 * 9,080 = $81,720
Question 7 At Runner, the engraving department is a bottleneck, and the company is considering hiring an extra worker, whose salary will be $69,873 per year, to mitigate the problem. With the extra worker, the company will be able to produce and sell 7,700 more units per year. The selling price per unit is $15.00. Cost per unit currently is $7.81 as follows: Direct material $2.77 Direct labor 0.90 Variable overhead 0.24 Fixed overhead (primarily depreciation of equipment) 3.90 Total $7.81 Calculate the annual financial impact of hiring the extra worker. The annual net profit will by $ by hiring the extra worker.
Answer and Explanation:
Given:
Cost of extra worker salary = $69873
Units with extra worker =7700 units per year
Selling price = $15.00
Cost per unit = $7.81
(Direct material = $2.77
Direct labour = $0.90
Variable overhead = $0.24
Fixed overhead = $3.90)
Calculate net income:
Sale revenue($15*7700units) =$115500
Deduct expenses:
Direct material ($2.77*7700units) =$21329
Direct labour($0.90*7700 units)= $6930
Variable overhead(0.24*7700 units) =$1848
Fixed overhead allocated(3.90*7700 units) = $30030
Net profit = $55363
Therefore profit increases with additional worker
Bernie Madoff invites you to invest $1,000 in his fund now and be guaranteed at least $1,500 in 4 years. What is the effective rate that Mr. Madoff is promising you?
Answer: 10.67%
Explanation:
Mr Madoff is offering to grow the current value of $1,000 to a future value of $1,500 in 4 years.
This is a future value problem.
1,500 = 1,000 * ( 1 + interest) ^ 4 years
( 1 + interest) ^ 4 = 1,500/1,000
( 1 + interest) = 4√(1,500/1,000)
1 + interest = 1.1066819197
Interest = 1.1066819197 - 1
= 10.67%
. Use the following adjustment information to complete the Adjustments columns of the work sheet. Depreciation on equipment, $18 Accrued salaries, $21 The $27 of unearned revenue has been earned Supplies available at December 31, $90 Expired insurance, $30 3. Extend the balances in the Adjusted Trial Balance columns of the work sheet to the proper financial statement columns. Compute totals for those columns including net income.
Question Completion:
Since the Trial Balance was not provided, we assume that the Supplies account had a beginning balance of $120 for the purpose of this exercise. Any other figure can be substituted for this balance.
Answer:
Adjusted Trial Balance as of December 31: Income Statement Balance
Debit Credit Expense Revenue Sheet
a. Depreciation expense $18 $18
Accumulated Depreciation $18 -$18 assets
b. Accrued Salaries $21 $21
Salaries Payable $21 $21 liabilities
c. Unearned Revenue $27 -$27 Liab.
Earned Revenue $27 $27
d. Supplies Expense $30 $30
Supplies $30 -$30 assets
e. Insurance Expense $30 $30
Prepaid Insurance $30 -$30 assets
Explanation:
Company B with the adjusting events above, usually recorded through the adjusting journal, can also be adjusted directly in the trial balance with their effects on the financial statements clearly demonstrated. Expenses have debit accounts while liabilities have credit accounts. Expenses reduce the net income, revenues increase the net income, while liabilities and assets can be reduced or increased as the case may be.
