Merchandise inventory includes items that a business purchases for resale to customers. In general, it consists of goods that are in-stock and available for sale. However, there are special situations that affect merchandise inventory, such as goods in transit, consigned goods, and damaged goods.
1. Goods in transit: These are items that have been purchased but not yet received by the buyer or shipped by the seller. The ownership of goods in transit depends on the shipping terms. For FOB (Free On Board) shipping point, the buyer takes ownership once the goods leave the seller's location, while for FOB destination, ownership transfers upon arrival at the buyer's location. Accordingly, goods in transit should be included in the merchandise inventory of the party holding ownership.
2. Consigned goods: These are items that a business holds for sale on behalf of another party, known as the consignor. The consignee (the business holding the goods) does not have ownership of these items, so consigned goods should not be included in the merchandise inventory of the consignee. Instead, they remain in the inventory of the consignor.
3. Damaged goods: Damaged goods are items that have become impaired and cannot be sold at their regular price. If the damage is severe and the goods are unsellable, they should be excluded from merchandise inventory. However, if the items can be sold at a discounted price, they should still be included in the inventory but adjusted for the lower value.
In summary, merchandise inventory consists of goods available for sale, including those in transit if owned by the business, but excluding consigned and unsellable damaged goods.
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Fallow Corporation has two separate profit centers. The following information is available for the most recent year: West Division East Division Sales (net) $ 250,000 $ 400,000 Salary expense 31,000 45,000 Cost of goods sold 95,000 195,000 The West Division occupies 6,250 square feet in the plant. The East Division occupies 3,750 square feet. Rent, which was $ 50,000 for the year, is an indirect expense and is allocated based on square footage. Compute operating income for the West Division
The West Division of Fallow Corporation has net sales of $250,000. To compute its operating income, we need to consider all expenses, including both direct and indirect expenses.
Direct expenses for the West Division include salary expense and cost of goods sold, which are $31,000 and $95,000, respectively.
To allocate the indirect expense (rent) based on square footage, we first need to calculate the proportion of square footage occupied by each division. The West Division occupies 6,250 square feet, while the East Division occupies 3,750 square feet, making a total of 10,000 square feet. The proportion occupied by the West Division is 6,250 / 10,000, which equals 0.625.
Now, we can allocate the rent expense of $50,000 based on this proportion. The West Division's share of the rent expense is 0.625 * $50,000, which equals $31,250.
Finally, to compute the operating income for the West Division, we subtract the direct and allocated indirect expenses from the net sales:
Operating Income = Net Sales - (Salary Expense + Cost of Goods Sold + Allocated Rent Expense)
Operating Income = $250,000 - ($31,000 + $95,000 + $31,250)
Operating Income = $250,000 - $157,250
Operating Income = $92,750
Therefore, the operating income for the West Division is $92,750.
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Havermill Co. Establishes a $360 petty cash fund on September 1. On September 30, the fund is replenished. The accumulated receipts on that date represent $84 for Office Supplies, $159 for merchandise inventory, and $33 for miscellaneous expenses. The fund has a balance of $84. On October 1, the accountant determines that the fund should be increased by $72. The journal entry to record the establishment of the fund on September 1 is: Multiple Choice Debit Cash $360; credit Petty Cash $360. Debit Petty Cash $360; credit Accounts Payable $360. Debit Miscellaneous Expense $360; credit Cash $360. Debit Petty Cash $360; credit Cash $360. Debit Cash $360; credit Accounts Payable $360
The journal entry to record the establishment of the $360 petty cash fund on September 1 is to debit Petty Cash $360 and credit Cash $360.
When the petty cash fund is established, the initial journal entry should record the transfer of cash from the company's checking account to the petty cash fund. This is accomplished by debiting the Petty Cash account and crediting the Cash account for the same amount.
Therefore, the journal entry to record the establishment of the fund on September 1 is:
Debit Petty Cash $360
Credit Cash $360
The establishment of the petty cash fund is a common practice in businesses where small expenses, such as office supplies and miscellaneous expenses, are frequently incurred and it is not practical to issue a check or use a credit card for each transaction. The fund is replenished periodically by recording the expenses and transferring the total amount spent from the company's checking account to the petty cash fund.
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During a recent review, ABC Corporation discovered that it has a serious internal control problem. It is estimated that the impact associated with this problem is $1 million and that the likelihood is currently 5%. Two internal control procedures have been proposed to deal with this problem. Procedure A would cost $25,000 and reduce likelihood to 2%; procedure B would cost $30,000 and reduce likelihood to 1%. If both procedures were implemented, likelihood would be reduced to 0. 1%.
Required:
a. What is the estimated expected loss associated with ABC Corporation's internal control problem before any new internal control procedures are implemented?
b. Compute the revised estimate of expected loss if procedure A were implemented if procedure B were implemented and if both procedures were implemented.
c. Compare the estimated costs and benefits of procedure A, procedure B, and procedures combined. If you consider only the estimates of cost and benefit procedure(s) should be implemented?
a. The estimated expected loss before any new internal control procedures are implemented is $50000. b. The revised estimate of expected loss with each procedure implemented is Procedure A is $55000.
a. The estimated expected loss before any new internal control procedures are implemented is:
Expected loss = Impact x Likelihood = $1 million x 5% = $50,000
b. The revised estimate of expected loss with each procedure implemented is:
Procedure A: Likelihood = 2%
Expected loss = Impact x Likelihood = $1 million x 2% = $20,000
Revised estimated expected loss = $50,000 - $20,000 + $25,000 = $55,000
Procedure B: Likelihood = 1%
Expected loss = Impact x Likelihood = $1 million x 1% = $10,000
Revised estimated expected loss = $50,000 - $10,000 + $30,000 = $70,000
Procedures A and B: Likelihood = 0.1%
Expected loss = Impact x Likelihood = $1 million x 0.1% = $1,000
Revised estimated expected loss = $50,000 - $1,000 + $25,000 + $30,000 = $104,000
c. Procedure A costs $25,000 and reduces likelihood to 2%, resulting in a revised estimated expected loss of $55,000. Procedure B costs $30,000 and reduces likelihood to 1%, resulting in a revised estimated expected loss of $70,000. Both procedures combined cost $55,000 and reduce likelihood to 0.1%, resulting in a revised estimated expected loss of $104,000.
Comparing the costs and benefits, it appears that Procedure A is the most cost-effective as it results in the lowest revised estimated expected loss at the lowest cost. However, the decision ultimately depends on ABC Corporation's risk tolerance and budget constraints.
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which of the following statements is false? multiple choice stock trading apps allow investors to trade stocks commission-free. acorns is a creative crowdfunding app, allowing smaller investors to join together to fund design ventures. apps allow small investors to participate in the stock market much more easily. robo-advisors provide investment advice based on mathematical rules or algorithms. budgeting apps allow people to keep track of income, monthly payments, expenditures, and more, right on a mobile phone.
The false statement among the options given is "Acorns is a creative crowdfunding app, allowing smaller investors to join together to fund design ventures." This statement is false because Acorns is not a crowdfunding app.
Instead, it is a micro-investing app that allows users to invest their spare change from everyday purchases in diversified portfolios of exchange-traded funds (ETFs).The other statements in the options are true. Stock trading apps have made it possible for investors to trade stocks commission-free, thus enabling small investors to participate in the stock market more easily.
Robo-advisors use algorithms and mathematical rules to provide investment advice to investors, making it easier for them to make informed decisions about their investments. Budgeting apps have also made it possible for people to keep track of their income, monthly payments, expenditures, and more on their mobile phones, thus making personal finance management more convenient and accessible.
In conclusion, while Acorns is a useful app for investing spare change in diversified portfolios of ETFs, it is not a crowdfunding app. The other options in the given statements are true and have contributed significantly to making investing and personal finance management more accessible to small investors.
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In the long run, a firm in a perfectly competitive industry will supply output only if its total revenue covers its.
In the long run, a firm in a perfectly competitive industry will supply output only if its total revenue covers its total cost.
This is because in a perfectly competitive market, there are many firms that are selling a homogenous product, and each firm is a price taker, meaning they cannot influence the market price. Therefore, a firm can only earn normal profits in the long run, which is defined as the minimum amount of profit required to keep the firm in business.
If a firm is earning less than normal profits, it will exit the industry, and if it is earning more than normal profits, new firms will enter the industry, driving down the price and reducing profits. As a result, in the long run, firms in a perfectly competitive market will supply output only if their total revenue covers their total cost, which includes both explicit costs (such as wages, rent, and materials) and implicit costs (such as the opportunity cost of the owner's time and capital).
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Direct materials: Each unit of product contains 3. 50 pounds of materials. The average waste and spoilage per unit produced under normal conditions is 1. 50 pounds. Materials cost $4 per pound, but Stefani always takes the 5. 00% cash discount all of its suppliers offer. Freight costs average $0. 25 per pound.
Direct labor. Each unit requires 1. 00 hours of labor. Setup, cleanup, and downtime average 0. 20 hours per unit. The average hourly pay rate of Stefani’s employees is $ 10. 0. Payroll taxes and fringe benefits are an additional $ 3. 90 per hour.
Manufacturing overhead: Overhead is applied at a rate of $ 4. 50 per direct labor hour.
Required:
Compute Stefani’s total standard cost per unit
Stefani’s total standard cost per unit is $ 33.21.
The computation of Stefani’s total standard cost per unit is as follows:
Direct materials cost = (3.50 − 1.50) × $4.00 + $0.25 = $7.25
(adjusting for waste and spoilage and adding freight cost)
Direct labor cost = (1.00 + 0.20) × ($10.00 + $3.90) = $15.48
(including setup, cleanup, downtime, payroll taxes, and fringe benefits)
Manufacturing overhead cost = $4.50 × 1.20 = $5.40
(applying overhead at a rate of $4.50 per direct labor hour and including setup, cleanup, and downtime)
Total standard cost per unit = $7.25 + $15.48 + $5.40 = $33.21
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ABC Hardware Store orders one hundred power hand-drills from Best Tools Inc. When the hand-drills are delivered, they are all missing pieces. ABC rejects the shipment. To exercise a right to cure, Best Tools must a. Pay a cure for. B. Promptly notify ABC of the intent to cure. C. Pick up the nonconforming tools before the end of the business day. D. Enter into a new contract with ABC
ABC Hardware Store orders one hundred power hand-drills from Best Tools Inc. When the hand-drills are delivered, they are all missing pieces. ABC rejects the shipment. To exercise a right to cure, Best Tools must B. Promptly notify ABC of the intent to cure.
Under the Uniform Commercial Code (UCC), when goods are delivered that do not conform to the contract, the buyer has the right to reject the goods. However, the seller also has the right to "cure" the nonconformity by providing conforming goods within a reasonable time.
To exercise the right to cure, the seller must promptly notify the buyer of their intent to cure. The seller must also provide the conforming goods within a reasonable time and without causing unreasonable inconvenience or expense to the buyer. The seller is not required to pick up the nonconforming goods before providing the conforming goods.
In this scenario, if Best Tools wants to exercise its right to cure, it must promptly notify ABC of its intent to cure and provide the missing pieces within a reasonable time. If Best Tools fails to cure the nonconformity or does so in an unreasonable manner, ABC may proceed with its rejection of the goods.
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a(n) vertical marketing system consists of independent firms at different levels of production and distribution, integrating their programs on a contractual basis to obtain more economies or sales impact than they could achieve alone.
Contractual VMS is a vertical marketing system that consists of independent firms at different levels of production and distribution.
It falls under the umbrella of Vertical Marketing Systems (VMS), a subset of a system with an integrated distribution channel. The producer, distributor, and retailer work together as a single system in VMS. One player often controls all three tiers of distribution to achieve this.
The manufacturer can even take control of the channel by establishing its own franchisees act as various channel participants, such as retailers. A contractual VMS is a channel system created by independent companies acting as various channel players and integrating their activities. With the integration of their businesses, this enables each player to realise economies of scale.
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Kate is a salesperson at a large retail chain. She was assigned a goal of $265,000 in sales for the current quarter. She is unhappy because she knows that the most any salesperson has sold in one quarter in the past is $150,000. Her goal of $265,000 is probably
A)not specific and measurable.
B)not realistic.
C)irrelevant.
D)lacking a specific time period.
E)does not cover key result area
Based on the information provided, Kate's goal of $265,000 in sales for the current quarter is likely not realistic because the most any salesperson has sold in one quarter in the past is $150,000. Therefore, the option is B) not realistic.
It's important for goals to be challenging, but also realistic. A goal that is too difficult or unrealistic can lead to frustration and demotivation, while a goal that is too easy may not provide sufficient motivation for achievement.
In Kate's case, her goal of $265,000 in sales for the current quarter may not be realistic given the past performance of salespeople in her company. However, it's also possible that there are factors that could make her goal achievable, such as new product launches, increased marketing efforts, or a change in sales strategy.
To determine whether Kate's goal is realistic, it may be helpful to conduct a thorough analysis of the company's sales history, market trends, and any other relevant factors that could impact sales performance. Based on this analysis, Kate and her manager can make a more informed decision about whether to adjust the goal or proceed with the current target.
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An accounts receivable manager processes 200 checks per day with an average process time of 15 working days. What is the average number of accounts receivable checks being processed in her office? What if through information technology she reduces the processing time from 15 days to 10 days to 5 days? What are the advantages and disadvantages of adopting this technology? Explain.
The average number will continue to decrease if the time required is shorter. Adopting technology also has some advantages and disadvantages.
To calculate the average number of accounts receivable checks being processed in the manager's office, we need to multiply the number of checks processed per day by the average process time, here's the steps:
200 checks/day x 15 days = 3,000 checks
If the processing time is reduced to 10 days, the average number of accounts receivable checks being processed in the manager's office would be:
200 checks/day x 10 days = 2,000 checks
And if the processing time is further reduced to 5 days, the average number of accounts receivable checks being processed in the manager's office would be:
200 checks/day x 5 days = 1,000 checks
The advantages of adopting information technology to reduce processing time are:
1. Increased efficiency: Information technology can automate many of the manual processes involved in accounts receivable management, reducing the time and effort required to process checks.
2. Improved accuracy: By automating processes, information technology can reduce the risk of errors and improve the accuracy of accounts receivable records.
3. Faster payment processing: With faster processing times, accounts receivable managers can process payments more quickly, reducing the time it takes to receive payments from customers.
The disadvantages to adopting information technology:
1. Cost: Implementing information technology can be expensive, especially for small businesses that may not have the resources to invest in new technology.
2. Training: Employees may need to be trained on how to use the new technology, which can take time and resources.
3. Security risks: Information technology can be vulnerable to security breaches, which can compromise sensitive financial information.
Overall, the benefits of adopting information technology for accounts receivable management can outweigh the disadvantages, but it's important to carefully consider the costs and risks involved before making a decision.
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A _______________ structure refers to the chain of command of a corporation, usually from senior management and executives to the general staff.
A hierarchical structure refers to the chain of command of a corporation, usually from senior management and executives to the general staff.
This means that there is a clear and defined organizational structure with specific roles and responsibilities for each level of the company. The hierarchy is based on the principle of authority, where those in higher positions have more power and control over those in lower positions.
In a hierarchical structure, decisions are made by those in higher positions and are then communicated down the chain of command. This structure is common in large, complex organizations where there are multiple layers of management and a need for clear lines of communication and accountability.
While a hierarchical structure can be effective for certain types of organizations, it can also be rigid and slow to adapt to change. This is why some companies have moved towards flatter organizational structures where there are fewer levels of management and a greater emphasis on collaboration and flexibility.
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Which of the following tools is most helpful in finding information on the web? a. internet service provider b. printer c. url d. search engine
Answer: D: search engine
Explanation:
The most helpful tool for finding information on the web is a search engine.
Answer:
d. search engine
Explanation:
A search engine is a software program that helps people find the information they are looking for online using keywords or phrases. Search engines are able to return results quickly—even with millions of websites online—by scanning the Internet continuously and indexing every page they find.
