Answer:
12.09%.
Explanation:
Calculation to determine the rate of return on the fund
First step is to calculate the beginning year NAV
Beginning year NAV = ($400 million assets - 50 million debt) / 15 million shares
Beginning year NAV = 23.33
Second step is to calculate the ending year NAV
Ending year NAV = ($500 million assets - (500*0.75% expense) - 40 million debt] / 18 million shares
Ending year NAV =[456.25/18 million shares]
Ending year NAV =25.35
Now let calculate the return using this formula
Return = (Ending NAV -beginning NAV + Capital gain + income) / Beginning NAV)
Let plug in the formula
Return = (25.35-23.33+0.30+0.50)/23.33
Return = 12.09%
Therefore the rate of return on the fund is 12.09%
Helmers Corporation manufactures a single product. Variable costing net operating income last year was $95,000 and this year was $113,900. Last year, $35,400 in fixed manufacturing overhead costs were released from inventory under absorption costing. This year, $13,500 in fixed manufacturing overhead costs were deferred in inventory under absorption costing. What was the absorption costing net operating income last year
Answer:
$59,600
Explanation:
Calculation for the absorption costing net operating income last year
Using this formula
Absorption costing net operating income last year=Variable costing net operating income last year -fixed manufacturing overhead costs last year
Let plug in the formula
Absorption costing net operating income last year=$95,000-$35,400
Absorption costing net operating income last year=$59,600
Therefore the absorption costing net operating income last year was $59,600
Freeman Company's accounting records include the following information: Payments to suppliers $ 47,000 Collections on accounts receivable 99,000 Cash sales 26,000 Income taxes paid 4,400 Equipment purchased 14,900 What is the amount of net cash provided by operating activities indicated by these transactions?
Answer:
$73,600
Explanation:
Cash flow from Operating Activity
Cash sales $26,000
Collections on accounts receivable $99,000
Payments to suppliers ($47,000)
Cash generated from operations $78,000
Income taxes paid ($4,400)
Net cash provided by operating activities $73,600
therefore,
the amount of net cash provided by operating activities indicated by these transactions is $73,600
Pharoah Corporation factors $251,700 of accounts receivable with Kathleen Battle Financing, Inc. on a with recourse basis. Kathleen Battle Financing will collect the receivables. The receivables records are transferred to Kathleen Battle Financing on August 15, 2020. Kathleen Battle Financing assesses a finance charge of 2% of the amount of accounts receivable and also reserves an amount equal to 4% of accounts receivable to cover probable adjustments. (b) Assume that the conditions are met for a transfer of receivables with recourse to be accounted for as a sale. Prepare the journal entry on August 15, 2020, for Pharoah to record the sale of receivables, assuming the recourse obligation has a fair value of $5,010. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Answer:
Cash received (251,700*94%) $236,598
Add: Due from factor (251,700*4%) $10,068
Less: Recourse obligation $5,010
Net proceeds $241,656
Gain/Loss = Carrying value - Net proceeds
Gain = $251,700 - $241,656
Gain = $10,044
Journal entry
Date Account Titles Debit Credit
Aug 15,2020 Cash $236,588
Due from factors $10,068
Gain on sale of receivables $10,044
Recourse liability $5,010
Account receivable $251,700
If I buy options contracts for a year out is that profitable instead of day trading/swing trading? Because day trading or swing trading is usually hard to predict but we know when long-term good stocks are always going the upside and with the leverage, an option contract has it could make more than just buying shares. So Buying options contracts a year out is good or not?
Answer:
Active traders often group themselves into two camps: the day traders and the swing traders. Both seek to profit from short-term stock movements (versus long-term investments), but which trading strategy is the better one? Here are the pros and cons of day trading versus swing trading.
define liquidity economics.
Answer:
Liquidity refers to the ease with which an asset, or security, can be converted into ready cash without affecting its market price. Cash is the most liquid of assets while tangible items are less liquid. The two main types of liquidity include market liquidity and accounting liquidity.
Financial reports prepared for a variety of external users who are unable to obtain the accounting information for their own specific needs are known as:
a.
External user reports.
b. External purpose financial statements
c. Non-specific user reports
d. General purpose financial
Answer:
General purpose financial reports
Explanation:
From the word 'General', a financial statements which is issued to include a range of fonacila reports without a focus on a certain or specific aspect of a financial disclosure is called a general purpose financial report. The general purpose accounting report is usually issued in other to serve as an investment report to external users, lenders or investors. These accounting report usually incorporates reports including ; Statement of cashflow, balance sheet, shareholders equity, audit report income statement and other available reports.
The term that describes Financial reports which is prepared for a variety of external users that could not get accounting information for their own specific needs are D: General purpose financial.
In accounting, General purpose financial report are been prepared variety of external users especially those that couldn't obtain the accounting information for their own specific needs.It serves as financial reports that serve many variety of function in domain of accounting.
Therefore, option D is correct.
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function of the HR manager is concerned with employing people who
possess the necessary skills, knowledge, and aptitude
O Procurement
Development
O Motivation and compensation
STOS DE
TREI
O Integration
Answer:
Integration.
Explanation:
Human resources management (HRM) can be defined as an art of managing, controlling and improving the number of people (employees or workers), functions, activities which are being used effectively and efficiently by an organization.
Thus, human resources managers are saddled with the responsibility of recruiting, managing and improving the welfare and working conditions of the employees working in an organization.
The function of the HR manager that is concerned with employing people who possess the necessary skills, knowledge, and aptitude is known as integration. This is usually achieved through a recruitment process, which typically involves advertising a vacant position and accepting applications (resumes) from applicants who meet the minimum requirements.
Two methods can be used to produce solar panels for electric power generation. Method 1 will have an initial cost of $740,000, an AOC of $190,000 per year, and $135,000 salvage value after its 3-year life. Method 2 will cost $870,000 with an AOC of $135,000 and a $170,000 salvage value after its 5-year life. Assume your boss asked you to determine which method is better, but she wants the analysis done over a three-year planning period. You estimate the salvage value of Method 2 will be 37% higher after three years than it is after five years. If the MARR is 14% per year, which method should the company select
Answer:
method 2 should be selected
Explanation:
The computation is shown below:
For Method 1
Value = $740,000 + $190,000 ÷ 1.14 + $190,000 ÷ 1.14^2 + $190,000 ÷ 1.14^3 - $135,000 ÷ 1.14^3
= $1,089,988.93
For Method 2
Value = $870,000 + $135,000 ÷ 1.14 + $135,000 ÷ 1.14^2 + $135,000 ÷ 1.14^3 - $170,000 × 1.37 ÷ 1.14^3
= $1,026,219.458
As we can see that in the method 2 there is a less cost as compared with method 1
So, method 2 should be selected
In which one of the following instances is the rivalry among competing sellers generally
weaker?
When the industry's product is costly to hold in inventory, perishable, or seasonal
o When one or more rivals are dissatisfied with their business performance and are making
aggressive moves to attract more customers
When there are so many rivals that any one company's actions have little direct impact on
the businesses of rivals
when rivals have dissimilar costs and dissimilar industry outlooks
When competing sellers are active in making fresh moves to improve their market standing
and business performance
Copying, redistributing, or website posting is expressly prohibited and constituto copyright violation
Version 1070576 * Copyright 2021 by lo-Bus Software, ine
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Answer:
I'd say when there are so many rivals that one company's action have little direct impact on the businesses of rivals
Standahl Air uses two measures of activity, flights and passengers, in the cost formulas in its budgets and performance reports. The cost formula for plane operating costs is $40,990 per month plus $2,789 per flight plus $18 per passenger. The company expected its activity in August to be 96 flights and 308 passengers, but the actual activity was 99 flights and 311 passengers. The actual cost for plane operating costs in August was $262,690. The plane operating costs in the planning budget for August would be closest to:
Answer:
$314,278
Explanation:
Cost in flexible budget = $40,990 + ($2,789*96) + ($18*308)
Cost in flexible budget = $40,990 + $267,744 + $5,544
Cost in flexible budget = $314,278
The operating costs in the planning budget for August would be
A large country can gain from imposing a tariff on the import of a good if: Group of answer choices the part of the tariff paid by the foreign exporters is greater than the losses arising from the production and consumption effects of the tariff in the domestic market the tariff is high enough that the country becomes an exporter of the product. the tariff drives the quantity imported to zero. the tariff revenue collected by the domestic government is less than the losses caused by the production and consumption effects of the tariff.
Answer:
part of the tariff paid by the foreign exporters is greater than the losses arising from the production and consumption effects of the tariff in the domestic market
Explanation:
Tariff is a form of tax levied on imported goods. Tariffs increases the price of import. This would discourage foreign exporters because there would be less demand for their good.
Tariffs would reduce the consumption of foreign goods and this would lead to negative welfare effect on consumers. This negative welfare effect can be mitigated if the tariff paid is greater than the welfare losses
The XYZ Casualty Insurance Company has found that for a particular type of insurance policy it makes the following payments for insurance claims: i) On 10% of the policies, XYZ Company pays $1,000 exactly one year after the effective date of the policy. ii) On 3% of the policies, XYZ Company pays $10,000 exactly three years after the effective date of the policy. iii) On the remaining policies, XYZ Company makes no payment for claims. In addition to the above payments, XYZ Company pays $20 for the expenses of administering the policy: $10 is paid on the effective date of the policy and the remaining $10 is paid six months after the effective date of the policy. The annual interest rate is 8%, compounded semiannually. The premium for this type of insurance policy is due six months after the effective date of the policy. If the present value of the premium is set equal to the present value of the claim payments and expenses, what is the premium?
(A) Less than $355
(B) At least $355 but less than $380
(C) At least $380 but less than $415
(D) At least $415 but less than $440
(E) At least $440
Answer:
(B) At least $355 but less than $380
Explanation:
i. Claim payments to be made
$1000 to be paid after one year of the policy
So, Present value of $1000 at 8% semi-annually = $1000/(1.04^2)) = $924.56
10% of this policy is paid = $924.56*10%= $92.46
ii. Claim payments to be made
$10000 after 3 years
So, present value= $10000/(1+0.08/2)^6 =$10000/1.046 = $7,903.14
3% of this policy claim are payable after 3 years= $7903.14* 3% = $237.09
iii. Administration expenses = $20
$10 on the effective date
$10 after 6 months
So, present value of $10 after 6 months= $10/(1.04)= $9.62
Total present value of expenses to be made by the company = $92.46 + $237.09 + $10 + $9.62 = $349.17
As the present value of the premium is set equal to the present value of the claim payments and expenses. Then, the present value of the premium is equals to $349.17.
The actual cost of the premium paid in 6 months = $349.17*1.04 = $363.14. So the option B is correct.
Why does the quantity a supplier is willing to give go up when the price goes up
A company that produces pleasure boats has decided to expand one of its lines. Current facilities are insufficient to handle the increased workload, so the company is considering three alternatives, A (new location), B (subcontract), and C (expand existing facilities). Alternative A would involve substantial fixed costs but relatively low variable costs: fixed costs would be $270,000 per year, and variable costs would be $600 per boat. Subcontracting would involve a cost per boat of $2,620, and expansion would require an annual fixed cost of $57,000 and a variable cost of $1,030 per boat.
A. Find the range of output for each alternative that would yield the lowest totalcost.
A. 315,550 or more.
B. 2,550 or 306,000.
C. 57,050 or 182,000.
B. Which alternative would yield the lowest total cost for an expected annual volumeof 120 boats?
A. A.
B. B.
C. C.
Answer:
A. Lowest Total Cost:
A. 315,550 or more
B. Lowest total cost of annual volume of 120 boats
C. C
Explanation:
The lowest total cost among the three alternatives is b.
If the company goes for new location it will have to incur fixed cost of $270,000 and variable cost per boat will be $600.
If the company Subcontracts then Total cost per boat is $2,620
If a company goes for expanding existing facility then it will incur fixed cost of $57,000 and variable cost will be $1,030 per boat.
If company produces 315,000 or more boats then it will have lowest possible cost for the boat.
For an output of 120 bots the best possible alternative is option C. The fixed cost will be $475 per boat ($57,000 / 120 boats)
The total cost will be $1,505 ($475 + $1,030)
two examples of events that occasions which people come together
Answer:
•wedding
•birthday party
please give brainliest
The following account appears in the ledger prior to recognizing the jobs completed in January:
Work in Process
Balance, January 1 $85,800
Direct materials 115,000
Direct labor 140,000
Factory overhead 296,200
Jobs finished during January are summarized as follows:
Job 210 $182,500
Job 216 78,300
Job 224 $232,190
Job 230 67,250
a. Journalize the entry to record the jobs completed. If an amount box does not require an entry, leave it blank.
b. Determine the cost of the unfinished jobs at January 31.
Answer:
A. Dr Finished Goods $560,240.00
Cr Work In Process $560,240.00
B. $76,760.00
Explanation:
A. Preparation of the journal entry to record the jobs complete
First step is to Calculate the amount of total jobs completed
Job 210 182,500.00
Job 224 232,190.00
Job 216 78,300.00
Job 230 67,250.00
Cost of completed jobs 560,240.00
(182,500.00+232,190.00+78,300.00+67,250.00)
Now let prepare the Journal Entry
Dr Finished Goods $560,240.00
Cr Work In Process $560,240.00
B. Calculation to Determine the cost of the unfinished jobs at January 31.
First step is to calculate the work in process Amount
Balance at January 1 85,800.00
Add Direct Materials 115,000.00
Add Direct Labor 140,000.00
Add Factory Overhead 296,200.00
Balance in work in process 637,000.00
Now let determine the cost of the unfinished jobs at January 31
Balance in work in process 637,000.00
Less: Cost of completed jobs 560,240.00
Cost of unfinished jobs on January 31 76,760.00
Therefore the cost of the unfinished jobs at January 31 will be $76,760.00
Interwest receives government funding and that funding is tied to the accuracy of the reports put out by its information system. The CFO, Singh, is concerned about whether the employees are properly incentivized to input the data accurately. So she enlists the help of the CEO, Manzoni, to plan a retreat in which she highlighted the importance of proper data entry to the 10 hospital administrators that are in charge of running the hospitals. Six months later the data accuracy problems are as bad as they ever were. Manzoni needs help, what do you recommend? 1. What are the potential sources of the problems? 2. What information would you want to analyze? 3. What actions might you recommend to increase the accuracy of data entry? 4. How does your view of behavior affect how you might address this consulting assignment?
Answer:
1. Data entry officers might be having trouble putting data in the system
2. Analyze the environment where data entry officers are seated to observe the amount of distraction or any other factors for example light glare.
3. Arrange the seat of the data entry officer at a place where there are no distractions and the data is visible enough to be entered in the system.
4. An autocratic manager would remove the data entry officer instead of finding out the ground reason for the inaccuracy of data entered.
Explanation:
1. Data entry officers might be having trouble putting data in the system
2. Analyze the environment where data entry officers are seated to observe the amount of distraction or any other factors for example light glare.
3. Arrange the seat of the data entry officer at a place where there are no distractions and the data is visible enough to be entered in the system.
4. An autocratic manager would remove the data entry officer instead of finding out the ground reason for the inaccuracy of data entered.
How are wages for a particular job determined?
by the federal Wage and Hour Department
by the amount of inflation in the economy
by the equilibrium between supply and demand for workers
by advertisements in the newspaper or online
Answer:
by the equilibrium between supply and demand for workers
Explanation:
Wages are the amount to pay workers for a particular job when employed. Therefore, determining the wages for a particular job is mostly dependent "on the equilibrium between supply and demand for workers, " and sometimes location.
This is because the higher the number of workers available, the lesser the employers would be willing to increase the wage level of employees given the fact that they can easily find another employee. However, where there is a lesser number of employees for a particular job, the employers would be willing to increase the employees' wages to entice them.
According to the labor market equilibrium, The wages for a particular job are determined by the equilibrium between supply and demand for workers. Thus, the correct answer is option (c).
The term "labor market," sometimes referred to as the "job market," describes the supply and demand for labor, with employers meeting the demand and employees meeting the supply.
The supply and demand of labor, which are met by employees and employers respectively, are referred to as the labor market.Both macroeconomic and microeconomic perspectives on the labor market are important because they provide useful information on employment and the state of the economy as a whole.Two crucial macroeconomic indicators are labor productivity rates and unemployment rates.Therefore, The wages for a particular job are determined by the equilibrium between supply and demand for workers. Thus, the correct answer is option (c).
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A trader wishes to know the cost of goods sold during the year.
Which financial statment will provide the answer? *
A Balance sheet
B Profit and loss Account
C Trading Account
D Trial Balance
High-Low Method, Cost Formulas
The controller of the South Charleston plant of Ravinia, Inc., monitored activities associated with materials handling costs. The high and low levels of resource usage occurred in September and March for three different resources associated with materials handling. The number of moves is the driver. The total costs of the three resources and the activity output, as measured by moves for the two different levels, are presented as follows:
Resource Number of Moves Total Cost
Forklift depreciation:
Low 5,000 $2,200
High 16,000 2,200
Indirect labor:
Low 5,000 $66,000
High 16,000 105,600
Fuel and oil for forklift:
Low 5,000 $3,550
High 16,000 11,360
Required:
If required, round your answers to two decimal places. Enter a "0" if required.
Determine the cost behavior formula of each resource. Use the high-low method to assess the fixed and variable components.
Forklift depreciation:
V $
F $
Y $
Indirect labor:
V $
F $
Y $ + $X
Fuel and oil for forklift:
V $
F $
Y $X
Answer:
Results are below.
Explanation:
To calculate the variable and fixed costs, we need to use the following formula:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= LAC - (Variable cost per unit* LAU)
Depreciation:
Depreciation is a 100% fixed cost. It does not vary with production levels.
Indirect labor:
Variable cost per unit= (105,600 - 66,000) / (16,000 - 5,000)
Variable cost per unit= $3.6
Fixed cost= 105,600 - (3.6*16,000)
Fixed cost= $48,000
Fixed cost= 66,000 - 3.6*5,000
Fixed cost= $48,000
Total cost= 48,000 + 3.6x
Fuel and oil for forklift:
Variable cost per unit= (11,360 - 3,550) / (16,000 - 5,000)
Variable cost per unit= $0.71
Fixed cost= 11,360 - (0.71*16,000)
Fixed cost= 0
Fixed cost= 3,550 - 0.71*5,000
Fixed cost= $0
Total cost= 0.71x
Carroll Corporation has two products, Q and P. During June, the company's net operating income was $26,000, and the common fixed expenses were $56,000. The contribution margin ratio for Product Q was 40%, its sales were $141,000, and its segment margin was $48,000. If the contribution margin for Product P was $46,000, the segment margin for Product P was:
Answer:
$34,000
Explanation:
Given the above information, the computation of segment margin for product P is shown below;
Net operating profit = (Segment margin Q + Segment margin P) - Common fixed expenses
$26,000 = ($48,000 + Segment margin P) - $56,000
$26,000 = $48,000 + Segment margin P - $56,000
$26,000 = Segment margin P - $8,000
Segment margin P = $26,000 + $8,000
Segment margin P = $34,000
define securitization.
Use the following information for Taco Swell, Inc., (assume the tax rate is 21 percent): 2017 2018 Sales $ 16,549 $ 18,498 Depreciation 2,376 2,484 Cost of goods sold 5,690 6,731 Other expenses 1,353 1,178 Interest 1,110 1,325 Cash 8,676 9,247 Accounts receivable 11,488 13,482 Short-term notes payable 1,674 1,641 Long-term debt 29,060 35,229 Net fixed assets 72,770 77,610 Accounts payable 6,269 6,640 Inventory 20,424 21,862 Dividends 1,979 2,314 For 2018, calculate the cash flow from assets, cash flow to creditors, and cash flow to stockholders. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.)
Answer:
Cash flow from assets = -$1,824
Cash flow to creditors = -$4,844
Cash flow to stockholders = $3,020
Explanation:
Note: The data in this question are merged together. They are therefore sorted before answering the question as follows:
2017 2018
Sales $16,549 $18,498
Depreciation 2,376 2,484
Cost of goods sold 5,690 6,731
Other expenses 1,353 1,178
Interest 1,110 1,325
Cash 8,676 9,247
Accounts receivable 11,488 13,482
Short-term notes payable 1,674 1,641
Long-term debt 29,060 35,229
Net fixed assets 72,770 77,610
Accounts payable 6,269 6,640
Inventory 20,424 21,862
Dividends 1,979 2,314
Explanation of the answer is now given as follows:
For 2018 as required, we have the following:
EBIT = Sales - Cost of goods sold - Depreciation - Other expenses = $18,498 - $6,731 - $2,484 - $1,178 = $8,105
Taxes = (EBIT - Interest) * Tax rate = ($8,105 - 1,325) * 21% = $1,423.80
Operating Cash Flows = EBIT - Taxes + Depreciation = $8,105 - $1,423.80 + $2,484 = $9,165.20
Current assets in 2018 = Cash in 2018 + Accounts receivable in 2018 + Inventory in 2018 = $9,247 + $13,482 + $21,862 = $44,591
Current liabilities in 2018 = Short-term notes payable in 2018 + Accounts payable in 2018 = $1,641 + $6,640 =$8,281
Current assets in 2017 = Cash in 2017 + Accounts receivable in 2017 + Inventory in 2017 = $8,676 + $11,488 + $20,424 = $40,588
Current liabilities in 2017 = Short-term notes payable in 2017 + Accounts payable in 2017 = $1,674 + $6,269 =$7,943
Increase in net working capital = Net working capital in 2018 - Net working capital in 2017 = (Current assets in 2018 - Current liabilities in 2018) - (Current assets in 2017 - Current liabilities in 2017) = ($44,591 - $8,281) - ($40,588 - $7,943) = $3,665
Net capital spending = Net Fixed Assets in 2018 + Depreciation in 2018 - Net Fixed Assets in 2017 = $77,610 + $2,484 - $72,770 = $7,324
Cash flow from assets = Operating Cash Flows - Increase in net working capital - Net capital spending = $9,165.20 - $3,665 - $7,324 = -$1,823.80 = -$1,824
Net new long-term debt = Long-term Debt in 2018 - Long-term Debt in 2017 = $35,229 - $29,060 = $6,169
Cash flow to creditors = Interest Expense - Net New Long-term Debt = $1,325 - $6,169 = -$4,844
Cash flow to stockholders = Cash Flow from Assets - Cash Flow to Creditors = -$1,823.80 - (-$4,844) = $3,020.20 = $3,020
A company's income statement showed the following: net income, $130,000; depreciation expense, $38,000; and gain on sale of plant assets, $12,000. An examination of the company's current assets and current liabilities showed the following changes accounts receivable decreased $11,000; merchandise inventory increased $26,000; prepaid expenses increased $7,800; accounts payable increased $5,000. Calculate the net cash provided or used by operating activities.
Answer:
$138,200
Explanation:
Calculation the net cash provided or used by operating activities.
Net income $130,000
Depreciation $38,000
Gain on sale long-term asset ($12,000)
Account Receivable decreased $11,000
Inventory Increased ($26,000)
Prepaid Expenses Increased ($7,800)
Account Payable Increased $5,000
Net cash provided by operating activities $138,200
Therefore net cash provided or used by operating activities is $138,200
An investor, such as a bank, may prefer to invest in securities backed by a pool of mortgages purchased in the secondary market rather than in an equal dollar amount of mortgage loans because:_________
a. mortgage backed securities eliminate prepayment risk for the investor.
b. mortgage backed securities diversify credit risk for the investor.
c. mortgage backed securities offer higher yields than individual mortgages.
d. mortgage backed securities returns are tax-exempt.
Answer:
b. mortgage backed securities diversify credit risk for the investor.
Explanation:
An investor, such as a bank, may prefer to invest in securities backed by a pool of mortgages purchased in the secondary market rather than in an equal dollar amount of mortgage loans because mortgage backed securities diversify credit risk for the investor.
In Mortgage Backed Securities, credit risk is diversified as there are many borrowers and investors between whom credit risk diversifies. So that makes investor such as bank prefer the option.
Crowl Corporation is investigating automating a process by purchasing a machine for $972,000 that would have a 9 year useful life and no salvage value. By automating the process, the company would save $132,000 per year in cash operating costs. The new machine would replace some old equipment that would be sold for scrap now, yielding $21,000. The annual depreciation on the new machine would be $108,000. The simple rate of return on the investment is closest to (Ignore income taxes.): (Hint: Give answer in decimal format. For example, if an answer is 10%, use the format 0.10 not 10%.)
Answer:
2.5%
Explanation:
Calculation to determine what The simple rate of return on the investment is closest to
First step is to calculate the Annual incremental net operating income
Annual incremental net operating income=$132,000-$108,000
Annual incremental net operating income=$24,000
Second step is to calculate the Initial investment
Initial investment =$972,000-$21,000
Initial investment=$951,000
Now let calculate the Simple rate of return using this formula
Simple rate of return = Annual incremental net operating income ÷ Initial investment
Let plug in the formula
Simple rate of return= $24,000 ÷ $951,000
Simple rate of return=0.025*100
Simple rate of return= 2.5%
Therefore The simple rate of return on the investment is closest to 2.5%
Bakery A sells bread for $2 per loaf that costs $0.50 per loaf to make. Bakery A gives an 80% discount for its bread at the end of the day. Demand for the bread is normally distributed with a mean of 300 and a standard deviation of 30. What order quantity maximizes expected profit for Bakery A
Answer:
324
Explanation:
Calculation to determine What order quantity maximizes expected profit for Bakery A
First step is for the Salvage value
Salvage value = $2 × (1 - 80%)
Salvage value= $0.40
Second step is to calculate the Overage cost
Overage cost = $0.50 - $0.40
Overage cost = $0.10
Second step is to calculate the Underage cost
Underage cost = $2 - $0.50
Underage cost = $1.50
Third step is to calculate the The critical ratio
The critical ratio = 1.5/(1.5 + 0.4) = 0.79. z = 0.8
Now let calculate the Order quantity
Order quantity = 300 + (0.8× 30)
Order quantity= 324
Therefore the order quantity maximizes expected profit for Bakery A is 324
Manufacturing uses normal costing for its job-costing system, which has two direct-cost categories (direct materials and direct manufacturing labor) and one indirect-cost category (manufacturing overhead). The following information is obtained for:_____.
• Total manufacturing costs, $8,450,000 • Manufacturing overhead allocated, $3,750,000 (allocated at a rate of 250% of direct manufacturing labor costs) • Work-in-process inventory on January 1, 2017, $390,000 • Cost of finished goods manufactured, $8,020,000
Requirements:
1. Use information in the first two bullet points to calculate (a) direct manufacturing labor costs in and (b) cost of direct materials used in .
2. Calculate the ending work-in-process inventory on December 31, 2011.
Answer:
Results are below.
Explanation:
Giving the following information:
Total manufacturing costs, $8,450,000
Manufacturing overhead allocated, $3,750,000 (allocated at a rate of 250% of direct manufacturing labor costs)
Work-in-process inventory on January 1, 2017, $390,000
Cost of finished goods manufactured, $8,020,000
First, we need to calculate the direct material and direct labor:
Direct labor= Manufacturing overhead allocated/2.5
Direct labor= 3,375,000 / 2.5
Direct labor= $1,350,000
Total manufacturing costs= Direct material + direct labor + allocated overhead
8,450,000= Direct material + 1,350,000 + 3,375,000
Direct material= $3,725,000
Finally, the ending work-in-process:
cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
8,020,000= 390,000 + 8,450,000 - Ending WIP
Ending WIP= $820,000
The following data are for the two products produced by Tadros Company. Product A Product BDirect materials$20 per unit $30 per unit Direct labor hours 0.5 DLH per unit 1.5 DLH per unit Machine hours 0.4 MH per unit 1.2 MH per unit Batches 200 batches 360 batches Volume 16,000 units 3,600 units Engineering modifications 20 modifications 80 modifications Number of customers 800 customers 720 customers Market price$55 per unit $220 per unitThe company's direct labor rate is $20 per direct labor hour (DLH). Additional information follows. Cost Driver Indirect manufacturing Engineering support$53,600 Engineering modifications Electricity 53,600 Machine hoursSetup costs 160,800 Batches Nonmanufacturing Customer service 121,600 Number of customers
1.1 Compute the manufacturing cost per unit using the plantwide overhead rate based on direct labor hours.
1.2 What is the gross profit per unit?
2.1 How much gross profit is generated by each customer of Product A and Product B using the plantwide overhead rate?
2.2 What is the cost of providing customer service to each customer?
Is the gross profit adequate for each customer of Product A and B using the plantwide overhead rate?
3.1 Determine the manufacturing cost per unit of each product line using ABC.
3.2 What is the gross profit per unit?
4.1 How much gross profit is generated by each customer of Product A and Product B using ABC?
4.2 Is the gross profit adequate for each customer of Product A and B using ABC?
5. Which method of product costing gives better information to managers of this company?
a. Plantwide overhead rate method
b. Departmental overhead rate method
c. Activity-based costing method
Answer:
Tadros Company
Plantwide method:
Product A Product B
1.1. Manufacturing cost per unit $40 $85
1.2 Gross profit per unit $15 $135
2.1 Gross profit per customer $300 $675
2.2 Customer of customer to each customer is:
= $80
The gross profit is adequate for each customer.
ABC method:
Product A Product B
3.1The Manufacturing cost per unit $36.26 $101.61
3.2 Gross profit per unit $18.74 $118.39
4.1 Gross profit per customer $374.85 $591.94
4.2 Cost of customer service to each customer is $80.
The Gross profit per customer is adequate.
5. The ABC product costing method gives better information to managers of Tadros Company.
c. Activity-based costing method
Explanation:
a) Data and Calculations:
Product A Product B
Direct materials $20 per unit $30 per unit
Direct labor hours 0.5 DLH/unit 1.5 DLH per unit
Total direct labor hours 8,000 (0.5*16,000) 5,400 (1.5*3,600)
Direct labor costs $160,000 ($20*8,000) $108,000 ($20*5,400)
Machine hours 0.4 MH per unit 1.2 MH per unit
Batches 200 batches 360 batches
Volume 16,000 units 3,600 units
Engineering modifications 20 modifications 80 modifications
Number of customers 800 customers 720 customers
Market price $55 per unit $220 per unit
Direct labor rate = $20 per direct labor hour (DLH).
Overhead rates based:
a. Plantwide Method:
Total manufacturing overhead costs/Total direct labor hours
$268,000/13,400 = $20
Cost of production:
Product A Product B
Direct materials per unit $320,000 $90,000
Direct labor hours per unit DLH 160,000 108,000
Overhead costs 160,000 108,000
Total production costs $640,000 $306,000
Volume 16,000 units 3,600 units
Manufacturing cost per unit $40 $85
Income Statement:
Product A Product B
Sales Revenue ($55 and $220) $880,000 $792,000
Total production costs 640,000 306,000
Gross profit $240,000 $486,000
Volume 16,000 units 3,600 units
Gross profit per unit $15 $135
Gross profit $240,000 $486,000
Customers 800 customers 720 customers
Gross profit per customer $300 $675
b. Departmental Method:
c. ABC Method:
Additional information follows:
Cost Pools Overhead Costs Driver
Indirect manufacturing
Engineering support $ 53,600 Engineering modifications
Electricity 53,600 Machine hours
Setup costs 160,800 Batches
Nonmanufacturing
Customer service 121,600 Number of customers
Overhead rate using ABC:
Cost Pools Overhead Costs Driver Rates
Indirect manufacturing
Engineering support $ 53,600 100 modifications = $536
Electricity 53,600 10,720 Machine hours $5
Setup costs 160,800 560 Batches $287
Customer service 136,800 1,520 customers $90
Cost of production:
Product A Product B
Direct materials per unit $320,000 $90,000
Direct labor hours per unit DLH 160,000 108,000
Overhead costs:
Engineering support 10,720 42,880
Electricity 32,000 21,600
Setup costs 57,400 103,320
Total production costs $580,120 $365,800
Volume 16,000 units 3,600 units
Manufacturing cost per unit $36.26 $101.61
Income Statement:
Product A Product B
Sales Revenue ($55 and $220) $880,000 $792,000
Total production costs 580,120 365,800
Gross profit $299,880 $426,200
Volume 16,000 units 3,600 units
Gross profit per unit $18.74 $118.39
Gross profit $299,880 $426,200
Customers 800 customers 720 customers
Gross profit per customer $374.85 $591.94
Total production costs $580,120 $365,800
Customers 800 customers 720 customers
Cost per customer $725.15 $508.06
Customer service costs
Customer service $121,600/1,520 = $80
Organizers of an outdoor summer concert in Toronto are concerned about the weather conditions on the day of the concert. They will make a profit of $42,000 on a clear day and $12,000 on a cloudy day. They will make a loss of $6,000 if it rains. The weather channel has predicted a 52% chance of rain on the day of the concert. Calculate the expected profit from the concert if the likelihood is 11% that it will be sunny and 37% that it will be cloudy.
Answer:
$5,940
Explanation:
Calculation for the expected profit
Expected profit= (42,000*0.11)+(12,000*0.37)+(-6,000*0.52)
Expected profit=4,620+4,440+(-3,120)
Expected profit=$5,940
Therefore Expected profit will be $5,940