Answer:
Explanation:
Perpetual Inventory Record
Date Description Qty Unit price Dr Cr
July 1 Balance B/f 6 $110 $660
July 7 Purchases 12 $112 $1,344
July 11 Sales 17 $195 $3,315
July 19 Purchases 15 $114 $1,710
July 28 Sales 12 $195 $2,340
Ending Inventory using FIFO is 4 @ $114 = $456
Cost of goods sold using FIFO = $660+ $1,344+$1,254 = $3,258
Journal Entries
Purchases A/c Dr Cr
July 7 Purchases $1,344
July 19 Purchases $1,710
Sales A/c Dr Cr
July 11 Sales $3,315
July 28 Sales $2,340
Account Receivable a/c Dr Cr
July 11 Sales $3,315
July 28 Sales $2,340
Account Payable a/c Dr Cr
July 7 Purchases $1,344
July 19 Purchases $1,710
Answer:
please find the answer below
Explanation:
1. Purchases Cost of Goods Sold Inventory on Hand
Date Quantity Unit Cost Total Cost Quantity Unit Cost Total cost Quantity Unit Cost Total Cost
01-Jul 6 $110 $660
$660
07-Jul 12 $112 $1, 344 6 $110 $660
12 $112 $1, 344
11-Jul 6 $110 $660 $2, 044
11 $112 $1, 232 $1, 892 1 $112 $112
$112
19-Jul 15 $114 $1, 710 1 $112 $112
15 $114 $1, 710
$1, 822
28-Jul 1 $112 $112 4 $114 $456
11 $114 $1, 254 $1, 366 $456
Total 27 units $3, 054 29 units 4 units $456
2. Journal Entries
07-Jul Dr Inventory $1, 344
Cr Trade payables $1, 344
Purchased inventory on account
11-Jul Dr Trade Payables $1, 892
Cr Inventory $1, 892
Sold inventory on account
19-Jul Dr Inventory $1, 710
Cr Trade payables $1, 710
Purchased inventory on account
28-Jul Dr Trade Payables $1, 366
Cr Inventory $1, 366
Sold inventory on account
Suppose Country A and Country B each have a GDP equal to $440 billion and $560 billion respectively. Country A has 100 million people and Country B has 175 million people. In this situation, per capita GDP is:
a. Higher in Country A.
b. Higher in Country B.
c. The same in both countries.
d. Country B has a higher inflation rate.
Answer:
A. Higher in Country A
Explanation:
So to get per capita income
Formula
GDP/Population
Therefore
For Country A
440/100=4.4
Per capita income for country A is 4.4
For Country B
560/175=3.2
Per capita income for country B is 3.2
So the per capita income for country A is higher than Country B
A company identified the following partial list of activities, costs, and activity drivers expected for the next year: Activity Expected Costs Cost Driver Extrusion costs $ 83,600 Number batches made Handling costs $ 8,800 Number of orders filled Packaging costs $ 40,500 Number of units made Product A Product B Production volume 750,000 units 600,000 units Batches made 200 batches 750 batches Orders filled 75 200 Calculate activity rates for each of the three activities using activity-based costing (ABC).
Answer:
Extrusion= $88 per batch
Handling= $32 per order
Packaging= $0.03 per unit
Explanation:
Giving the following information:
Activity Expected Costs Cost Driver:
Extrusion costs $ 83,600 Number batches made
Handling costs $ 8,800 Number of orders filled
Packaging costs $ 40,500 Number of units made
Product A Product B:
Production volume: 750,000 units - 600,000 units
Batches made: 200 batches - 750 batches
Orders filled: 75 - 200
To calculate the activity rate, we need to use the following formula:
Estimated activity rate= total estimated activity costs for the period/ total amount of allocation base
Extrusion= 83,600/ (200 + 750)= $88 per batch
Handling= 8,800/(75 + 200)= $32 per order
Packaging= 40,500/ (1,350,000)= $0.03 per unit
Activity rates for extrusion, handling, and packaging are calculated by dividing expected costs by the respective cost driver totals, resulting in rates of $88 per batch, $32 per order, and $0.03 per unit.
Explanation:To calculate the activity rates for each of the three activities using activity-based costing (ABC), we divide the expected costs by the total number of each cost driver (Number batches made, Number of orders filled, and Number of units made).
Extrusion costs: The activity rate is calculated by dividing $83,600 by the total number of batches made (200 batches + 750 batches = 950 batches). This gives us an activity rate of $88 per batch.Handling costs: The activity rate is found by dividing $8,800 by the total number of orders filled (75 orders + 200 orders = 275 orders), resulting in a rate of $32 per order.Packaging costs: The activity rate is determined by dividing $40,500 by the total number of units made (750,000 units + 600,000 units = 1,350,000 units), giving us a rate of $0.03 per unit.Your neighborhood self-service laundry is for sale and you consider investing in this business. For the business alone and no other assets (such as building and land), the purchase price is $240,000. The net cash flows for the project are $30,000 per year for the next 5 years. You plan to borrow the money for this investment at 5%.
Answer:
The complete present value calcuation is below.The net present value of this project is: $77,930.58 (assuming a value for the sale of the business equal to the purchase price).
Explanation:
For this problem, the first and basic question is:
Prepare a net present value calculation for this project. What is the net present value of this project?Solution
The net present value is equal to: the present value of the future cash flows less present value of the investements.
1. Present value of the future cash flows:
The discount factor is equal to 1 / [1 + (1 + r)ⁿ]
Where:
r = 5% = 0.05n = the number of yearYear Cash flow Discount factor Present value
1 $30,000 1/(1 + 0.05) $30,000/1.05 = $28,571.43
2 $30,000 1/(1 + 0.05)² $30,000/(1.05)² = $27,210.88
3 $30,000 1/(1 + 0.05)³ $30,000/(1.05)³ = $25,915.13
4 $30,000 1/(1 + 0.05)⁴ $30,000/(1.05)⁴ = $24,681.07
5 $30,000 1/(1 + 0.05)⁵ $30,000/(1.05)⁵ = $23,505.78
5 $240,000* 1/(1 + 0.05)⁵ $240,000/(1.05)⁵ = $188,046.28
*For the year 5 you must also consider the value of the business, which is unknow. You should have some information about it. Although unrealistic, at this stage we can just assume a value: let's say it is the same purchase price: $240,000. That is what the last line shows:
The discount the value of the value of the business is:
$240,000 / (1.05)⁵ = $188,046.28The total present value of the future cash flows is the sum of the present values of all the cash flows:
$28,571.43 + $27,210.88 + $25,915.13 + $24,681.07 + $23,505.78 + $188,046.28 = $317,930.58
2. Calculate the net present value:
Net present value == Total present value of future cash flows - investment
Net present value = $317,930.58 - $240,000 = $77,930.58Art Kumar lives on the outskirts of Draper and has a 1-acre lot next to his home. He plans to grow vegetables on the lot and sell them at the downtown market during the summer. He doesn’t have enough time to grow the vegetables himself, so he has hired a local college student to plant and tend the garden and sell the crops at the market. Art is considering five vegetables to plant that seem to be popular at the market—asparagus, corn, tomatoes, green beans, and red peppers. Art estimates the following yields per acre for each vegetable—2,000 pounds of asparagus, 7,200 pounds of corn, 25,000 pounds of tomatoes, 3,900 pounds of green beans, and 12,500 pounds of red peppers. The costs per acre are $1,800 for asparagus, $1,740 for corn, $6,000 for tomatoes, $3,000 for green beans, and $2,700 for red peppers. Asparagus sells for $1.90 per pound, corn sells for $0.10 per pound, tomatoes sell for $3.25 per pound, green beans sell for $3.40 per pound, and red peppers sell for $3.45 per pound. He has budgeted $5,000 for the garden. Talking to some of the other market vendors, he estimates that he will not sell more than 1,200 pounds of asparagus, 10,000 pounds of tomatoes, 2,000 pounds of green beans, and 5,000 pounds of red peppers. Art wants to know the portion of his lot that he should plant with each vegetable to maximize his revenue.
Answer:
10,000 pounds of Tomatoes; 780 pounds of Green Beans; and 5,000 pounds of Red Pepper.
Explanation:
The following information was provided in the question and computed.
Yield per acre (pound): 2,000 (asparagus), 7,200 (corn), 25,000 (tomatoes), 3,900 (green beans), 12,500 (red pepper).
Cost per acre: $1,800 (asparagus), $1,740 (corn), $6,000 (tomatoes), $3,000 (green beans), $2,700 (red pepper).
Selling price per pound: $1.90 (asparagus), $0.10 (corn), $3.25 (tomatoes), $3.40 (green beans), $3.45 (red pepper).
Sales volume limit (pound): 1,200 (asparagus), nil (corn), 10,000 (tomatoes), 2,000 (green beans), 5,000 (red pepper).
Given the above, we compute the cost per pound for each vegetable as follows: [tex]\frac{Cost Per Acre}{Yield Per Acre}[/tex]
Cost per pound: $0.9 (asparagus), $0.24 (corn), $0.24 (tomatoes), $0.77 (green beans), $0.22 (red pepper).
Using selling price per pound and Cost per pound, we compute the contribution per pound for each vegetable as follows: [tex]Selling Price Per Pound - Cost Per Pound[/tex]
Contribution per Pound: $1.00 (asparagus), -$0.14 (corn), $3.01 (tomatoes), $2.63 (green beans), $3.23 (red pepper).
To maximize revenue and profit, Art must focus on the vegetables with the highest contribution per Pound, in the following order.
4th (asparagus), 5th (corn), 2nd (tomatoes), 3rd (green beans), 1st (red pepper).
He will therefore plant according to the limit (volume) he can sell in the market.
1st plant: Red pepper = 5,000 pounds market limit (using [tex]\frac{Sales Limit}{Yield per Acre} = \frac{5,000}{12,000}[/tex] = 40% of the land available).
2nd plant: Tomatoes = 10,000 pounds market limit (using [tex]\frac{10,000}{25,000}[/tex] = 40% of the land available).
3rd plant: Green beans = using 20% of the land left = 20% * 3,900 yield per acre = 780 pounds.
Eastman Kodak reported that the cost of its PPE on December 31, 2010 was $6,805 million. On January 1, 2010, it had been $7,327 million. Also, the balance of accumulated depreciation on December 31, 2010 was $5,254 million. On January 1, 2010, it had been $5,516 million. Depreciation expense for the fiscal year 2010 was $420 million. During 2010, the company bought new equipment with acquisition cost of $254 million worth. The company also sold PPE and reported a $14 million gain on selling PPE.
Questions:
How much did Kodak sell its PPE for (sale price)?
Answer:
Kodak sold its PPE for $108 million
Explanation:
The question here has missing sales figure for a PPE item for which the gain on sale is $14 million (given) .Sale price of PPE item are obtained from a PPE Disposal account.We need to first find the other missing figures of 1. Cost of the Sold PPE and 2. The Accumulated Depreciation of the Sold PPE item. After that we complete our PPE disposal account to find the missing figure of the Sale Price of PPE.
1. Cost of Sold PPE
Open a PPE at Cost Account: Opening Balance $ 7327 million (Debit), Addition of PPE $ 254 million (Debit),Closing Balance $6805 million(Credit).The Balancing figure of this account $ 776 million (credit) {7327+254-6805} is the cost of the PPE item sold.
2. Accumulated Depreciation of the Sold PPE Item
Open a PPE Accumulated Depreciation Account : Opening Balance $ 5516 million (Credit), Depreciation Expense $ 420 million (Credit), Closing Balance $ 5254 million (Debit). The Balancing figure of this account $682 million (Debit) is the Accumulated Depreciation of the PPE item disposed or sold.
3. Disposal Account and Calculation of the Sale Price (Balancing figure)
Open a PPE Disposal Account : Cost of PPE $ 776 million (Debit), Gain on Sale of PPE $ 14 million (Debit), Accumulated Depreciation of the PPE Sold $ 682 million (Credit). The Balancing figure of this account $ 108 million (Credit) {776+14-108} is the Sale Price of PPE item.
Thus Sale price of the PPE is $ 108 million.
The question is about calculating the sale price of Eastman Kodak's PPE during 2010 by using changes in PPE cost and accumulated depreciation, new equipment acquisition cost, and gain on sale. The sale price of Eastman Kodak's PPE was $20 million.
Explanation:The question asks to calculate how much Eastman Kodak sold its property, plant, and equipment (PPE) for during the fiscal year 2010. To find the sale price of the PPE, we need to consider the cost and accumulated depreciation of PPE at the beginning and end of the year, along with the depreciation expense, the acquisition cost of new equipment, and the gain on the sale of PPE.
First, calculate the change in accumulated depreciation and PPE cost:
Change in accumulated depreciation: $5,516 million (beginning) - $5,254 million (ending) = $262 million (depreciation reversed due to sale)Change in PPE cost: $7,327 million (beginning) - $6,805 million (ending) - $254 million (new acquisitions) = $268 million (cost of PPE sold)Now, we can find the book value of sold PPE by subtracting the depreciation reversed from the cost of sold PPE:
Book value of sold PPE: $268 million - $262 million = $6 millionFinally, add the gain on sale to find the sale price:
Sale price of PPE: $6 million (book value) + $14 million (gain) = $20 millionConsider a process consisting of three resources. Assume there exists unlimited demand for the product, and that all activities are always performed in the following sequence.
Resource 1 has a processing time of 6 minutes per unit.
Resource 2 has a processing time of 3 minutes per unit.
Resource 3 has a processing time of 5 minutes per unit.
All three resources are staffed by one worker and each worker gets paid $11 per hour.
(a) what is the cost of direct labor?
(b) what is the labor content?
(c) How much idle time does the worker at resource 3 have per unit?
(d) What is the average labor utilization?
(e) Assume the demand rate is 20 units per hour. What is the takt time?
(f) Assume the demand rate is 20 units per hour. What is the target manpower?
The cost of direct labor is $3.6 per part. The labor content is 14 minutes. The idle time is 4 min. The average labor utilization is 77.78%.
(a)
The total hourly pay divided by the flow rate represents the cost of direct labor.
The overall flow rate is governed by the bottleneck resource 1 and the flow rate is (1/6) parts per minute \
Total wages per unit of time = $12*3/60 = $12/20 per minute
So, cost of direct labor = (12/20) / (1/6) = $3.6 per part
(b)
Labor Content = The time sum of all process steps = 6+3+5 = 14 minutes
(c)
Idle time of resource 3 = 6 min - 5 min = 1 min
(d)
Idle time of resource 2 = 6 - 3 = 3 min
Total idle time = 3+1 = 4 min
Utilization = (1 - 4/(3*6)) = 77.78%
(e)
Takt time = 60/20 = 3 min
(f)
Target manpower = (6+3+5) / 3 = 4.67 or 5 (assuming each station is staffed by one worker)
The average labor utilization is calculated by dividing the total labor content by the entire idle time.
The total hourly salaries divided by the flow rate per hour is known as the cost of direct labor. It reveals how much money is spent to move one flow unit through a process (such as to treat one patient or provide service to one client), in dollars (or euros).
Even while labor costs appear to make up a small portion of the total costs, at least initially, it is crucial to consider them. However, labor expenses are incorporated into every single supply and material business purchase.
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Final answer:
The cost of direct labor is $33 per hour (3 workers at $11 each), the labor content is 14 minutes per unit, Resource 3 has 1 minute of idle time per unit, average labor utilization is 100%, takt time is 3 minutes per unit, and the target manpower is 3 workers to meet the demand rate of 20 units per hour.
Explanation:
To determine the cost of direct labor, we need to calculate the total working time each resource operates per hour and multiply it by the workers' pay rate.
Resource 1: 6 minutes/unit × 60 minutes/hour = 10 units/hourResource 2: 3 minutes/unit × 20 units/hour (given demand rate) = 60 minutes/hourResource 3: 5 minutes/unit × 20 units/hour (given demand rate) = 100 minutes/houra. The total cost of direct labor is calculated by summing the costs of all resources. However, since the workers are paid per hour, regardless of production speed, the cost is simply $11/hour × 3 workers.
b. The labor content is the sum of the processing times per unit for all three resources: 6 + 3 + 5 = 14 minutes per unit.
c. Resource 3's idle time per unit is the difference between the cycle time of the slowest resource and its own processing time. Since Resource 1 is the slowest, with a cycle time of 6 minutes, Resource 3 has 1 minute of idle time per unit (6 - 5).
d. The average labor utilization is calculated as (total processing time / (total processing time + idle time)) × 100%. With continuous demand and equal payment rate, all workers are utilized at full capacity, so average labor utilization is 100%.
e. The takt time is the pace at which products must be completed to meet customer demand. It is calculated as (60 minutes per hour / 20 units per hour) = 3 minutes per unit.
f. The target manpower is the number of workers needed to meet the demand rate. Since the slowest resource dictates the overall pace and Resource 1 is the slowest, processing 10 units per hour, we need 2 workers at Resource 1 (20 units/hour demand / 10 units/hour capacity) and 1 worker each for Resources 2 and 3. Therefore, the target manpower is a total of 3 workers to meet the demand rate.
A vintner is deciding when to release a vintage of sauvignon blanc. If it is bottled and released now, the wine will be worth $ 2.6 million. If it is barrel aged for a further year, it will be worth 25% more, though there will be additional costs of $ 975 comma 000 incurred at the end of the year. If the interest rate is 7%, what is the present value of the difference in the benefit the vintner will realize if he releases the wine after barrel aging it for one year or if he releases the wine now?
Answer:
a. PV of one year future net benefit is $2,126,168.22
b. The PV of now is $2,600,000
c. The difference between the two PVs is $473,831.78.
d. It is better to release the vintage of sauvignon blanc now.
Explanation:
a. What is the present value of the difference in the benefit the vintner will realize if he releases the wine after barrel aging it for one year?
Benefit in one year = $2,600,000 + ($2,600,000 × 25%) = $3,250,000
Cost in one year = $975,000
Net Benefit in one year = Benefit in one year - Cost in one year
Net Benefit in one year = $3,250,000 - $975,000 = $2,275,000
Present value (PV) = $2,275,000 ÷ (1.07^1) = $2,126,168.22
b. What is the present value if he releases the wine now
The present value is $2,600,000
c. Difference between the two PVs
Difference = PV of b - PV of a = $2,600,000 - $2,126,168.22 = $473,831.78.
d. Decision
Since the PV of releasing the vintage of sauvignon blanc is $473,831.78 higher than the PV of releasing it in a year, it is better to release it now.
A college professor decides to run for Congress in a district with 450,000 registered voters. In a survey she commissioned, 58% of the 4000 registered voters interviewed indicated that they plan to vote for her. The population of interest is the:
Answer:
450,000 registered voters in the district
Explanation:
Population of interest is defined as the population that is under study and abouth which information is collected. Population of interest can be people, objects, measurements, and so on.
It is from the population of interest that the researcher draws samples that are studied. Insights from studying the sample will be used to draw conclusions about the population.
In this instance 4,000 voters interviewed is the sample. They were drawn from the population of interest made up of 450,000 registered voters in the district.
The population of interest is the registered voters in a congressional district. To estimate proportions like voter support or political awareness, sample size calculations are conducted to achieve a desired confidence level and margin of error. Confidence intervals can then be used to estimate the true proportion of a characteristic within the population.
Explanation:The population of interest in the question is the body of registered voters in a particular congressional district. This population would be the group of individuals from which data is being gathered or about whom conclusions are to be made based on the survey results. In the context given, the survey is used to estimate the support that a college professor running for Congress might receive from the 450,000 registered voters in her district.
When estimating the true proportion of a population based on survey results, it is essential to determine the sample size needed to achieve results within a certain margin of error and with a specified level of confidence. For example, to achieve a 95% confidence level and a 5% margin of error in determining the political awareness of college students, a specific sample size must be calculated using statistics formulas.
Interpreting Survey Results and Confidence Intervals
In another scenario, a student may find that 300 out of 500 surveyed students are registered voters, and from this, a confidence interval can be computed to estimate the true proportion of registered voters among the student population. This confidence interval provides a range in which the true percentage of registered voters is likely to fall, considering the sample data and the chosen confidence level, such as 90%.
Summarized operations for Splish Brothers Inc. for the month of July are as follows. Revenues recognized: for cash $30,000; on account $71,480. Expenses incurred: for cash $26,120; on account $41,220. Indicate for Splish Brothers Inc. (a) the total revenues, (b) the total expenses, (c) net income for the month of July.
Answer:
a. Total Revenues are $ 101,480
b. Total expenses are $ 67,340
Net income for July is $ 34,140
Explanation:
Total Revenues is Cash revenue + Revenues on credit
$ 30,000 ( cash)+ $ 71,480 ( on credit) = $ 101,480
Total expenses is Cash expenses + Expenses on account
$ 26,120 (cash)+ $ 41,220 (on account) = $ 67,340
Net income = Total revenues - Total expenses
Net Income = $ 101,480 - $ 67,340 = $ 34,140
Final answer:
Splish Brothers Inc. recorded a total revenue of $101,480 and total expenses of $67,340 in July, resulting in a net income of $34,140 for the month.
Explanation:
To calculate the total revenues, total expenses, and net income for Splish Brothers Inc. for the month of July, we need to add together both the cash and account figures for each category.
Total Revenues
Total revenues are calculated by adding the revenues recognized for cash and on account. In this case it is:
$30,000 (cash) + $71,480 (account) = $101,480
Total Expenses
Similarly, total expenses are the sum of expenses incurred for cash and on account:
$26,120 (cash) + $41,220 (account) = $67,340
Net Income
Net income for July is determined by subtracting the total expenses from the total revenues:
$101,480 (total revenues) - $67,340 (total expenses) = $34,140
1. What kinds of resources can likely be shared across different brands between an apparel maker and a footwear maker? What kinds of resources are unlikely to be shared?
Explanation:
Apperel maker and footwear maker are industries that use as common resources such as packaging, distribution, marketing and selling operations.
On the other hand, the resources that are unlikely to be shared, we can mention different types of machinery for confection, raw material and specialized professionals.
Answer:
An apparel maker and footwear maker can use packaging, distribution, marketing and selling operations together. They can use common resources for these operations. But, apparel makers and footwear makers cannot use common manufacturing operations.
Clothing and footwear industry, also called apparel and allied industries, garment industries, or soft-goods industries, factories, and mills producing outerwear, underwear, headwear, footwear, belts, purses, luggage, gloves, scarfs, ties, and household soft goods such as drapes, linens, and slipcovers. The same raw materials and equipment are used to fashion these different end products.
Explanation:
How can related diversification create a competitive advantage for the firm? Keeping the advantages of related diversification in mind, think back to the example of Delta’s vertical integration decision to acquire an oil refinery—clearly an unrelated diversification move. What challenges might Delta confront in operating this refinery? Think of the strategic concepts you have learned and how they can help you evaluate Delta’s decision.
Answer:
See attached pictures.
Explanation:
See attached pictures for explanation.
Related diversification can provide competitive advantage by leveraging core competencies and creating synergies across related businesses. In contrast, unrelated diversification, like Delta's acquisition of an oil refinery, brings significant operational challenges, but can provide benefits like cost savings if properly managed.
Explanation:Related diversification can confer a competitive advantage for a firm by allowing it to leverage its existing core competencies into a new, related business. It facilitates sharing of skills and resources across businesses, leading to synergies and increased profitability. A classic example of this is the case of Rockefeller, who leveraged his influence in the oil refining industry to drive competitors from the market through intense price wars, and thereby achieving vertical integration.
In contrast, Delta's decision to acquire an oil refinery represents a case of unrelated, or conglomerate, diversification. While this strategy can offer benefits in terms of risk reduction and stability, it also raises significant operational challenges. One, Delta would need to acquire or develop expertise in a completely different industry. Two, the synergistic benefits gained from related diversification, such as sharing of resources and capabilities, would be absent. Lastly, it may face difficulty in maintaining focus and managing such diverse business operations.
However, Delta's decision could be justified if it provides significant cost savings or differential advantage in their primary business of aviation. Therefore, the strategic implications of this kind of decision are multi-faceted and require careful evaluation.
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Burnett Corp. pays a constant $8.45 dividend on its stock. The company will maintain this dividend for the next 15 years and will then cease paying dividends forever. If the required return on this stock is 13 percent, what is the current share price?
Answer:
56.47% is the current share price
Explanation:
To solve this question, we use the mathematical approach.
First, we calculate the current share price =
$8.45*Present value of annuity factor(11.2%,13)
But before we can get the value for the current share price, we need the value for the present value of annuity factor.
Present value of annuity factor = Annuity[1-(1+interest rate)^-time period]/rate =
8.45[1-(1.112)^-13]/0.112=
= $8.45*6.682519757 = 56.47%
3. This year, Paula and Simon (married filing jointly) estimate that their tax liability will be $200,000. Last year, their total tax liability was $170,000. They estimate that their tax withholding from their employers will be $175,000. Are Paula and Simon required to increase their withholdings or make estimated tax payments this year to avoid the underpayment penalty? If so, how much?
Answer:
When a taxpayer has an underpayment of estimated tax or fall behind on his/her tax prepayment, then he/she is required to pay a penalty on Form 2210. This penalty is called underpayment penalty.
According to the tax laws, Mr. P and Ms. S can avoid an underpayment penalty if their withholding's and estimated tax payments equal or exceed one of the following two safe harbors:
90 percent of current tax liability ($200,000 x 90% = $180,000) 110 percent of previous year tax liability (110% x $170,000 = $187,000)From the above calculation, it is clear that Mr. P and Ms. S's withholding's ($175,000) do not equal or exceed the amount of two safe harbors. So, they need to increase their withholding's or make estimated payments to avoid underpayment penalty.
If Mr. P and Ms. S increase their withholding's by $5,000 or make estimated payments of $1,250
per quarter ($5000/4), they can avoid the underpayment penalty.
Mr. Paula and Simon average gross income is greater than $150,000, so 110% is taken.
Answer:
yes they are required to increase their withholding tax by $5000
Explanation:
Paula and Simon will have to increase their withholding or make estimated tax payments to avoid underpayment penalty if the fall inside these two categories
current tax withheld for current year ≤ 90% of the current tax liability or
current tax withheld ≤ 110% of the previous year tax liability
current tax liability = $200000
last year tax liability = $170000
tax withheld = $175000
90% of $200000 = $180000: Is greater than tax withheld ( $175000 )
110% of $170000 = $187000 : Is greater than tax withheld ( $175000 )
To avoid underpayment penalty Paula and Simon should increase their withholding by at least $5000 or make estimated quarterly payments of $1250
The LaGrange Corporation had the following budgeted sales for the first half of the current year: Cash Sales Credit Sales January $ 80,000 $ 180,000 February $ 85,000 $ 200,000 March $ 48,000 $ 160,000 April $ 43,000 $ 128,000 May $ 53,000 $ 230,000 June $ 110,000 $ 220,000 The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled: Collections on sales: 50% in month of sale 40% in month following sale 10% in second month following sale The accounts receivable balance on January 1 of the current year was $75,000, of which $47,000 represents uncollected December sales and $28,000 represents uncollected November sales. What is the budgeted accounts receivable balance on May 31
Answer:
Budgeted Accounts Receivable Balance on May 31 = $127,800
Explanation:
Accounts Receivables are current assets of a company resulting from selling on credit and these accounts are the uncollected, outstanding balances.
Judging by the collection schedule we can determine the budgeted Accounts Receivables (uncollected) balances at 31 May
The November balance equals to 10% of total Credit sales and 10 % of November sales are collected in January
the December balance equals 50% and 40% of the balance will be collected on January and 10% collected in February.
Fast forward to the collection of May
details credit sales May Uncollected
Mar $160,000*10% $16,000
April $128,000 * 40% $51,200
$128,000 *10% $12,800
May $230,000 *50% $115,000
$230,000 *50% $115,000
TOTAL $127,800
The budgeted June sales at 31 May have not yet occurred so the balance accounts receivable at 31 May include only the uncollected percent from April and May.
The LaGrange budgeted Accounts Receivable Balance on May 31 is computed as follows:
10% of March credit sales $16,000 ($160,000 x 10%)
40% of April credit sales 51,200 ($128,000 x 40%)
50% of May credit sales 115,000 ($230,000 x 50%)
Total balance $182,200
Data and Calculations:
Cash Sales Credit Sales
January $ 80,000 $ 180,000
February $ 85,000 $ 200,000
March $ 48,000 $ 160,000
April $ 43,000 $ 128,000
May $ 53,000 $ 230,000
June $ 110,000 $ 220,000
Thus, at the end of the month of May, the Accounts Receivable Balance of The LaGrange Corporation is $182,200.
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Assume the following amounts: Total fixed costs $ 23 comma 000 Selling price per unit $ 19 Variable costs per unit $ 12 If sales revenue per unit increases to $ 22 and 14 comma 000 units are sold, what is the operating income? A. $ 163 comma 000 B. $ 117 comma 000 C. $ 308 comma 000 D. $ 140 comma 000
Answer:
B. $ 117 comma 000
Explanation:
Selling price per unit $ 19 *14, 000= $ 266000
Variable costs per unit $ 12 *14, 000= $ 168,000
Contribution Margin $ 98,000
Less Total fixed costs $ 23, 000
Operating Income $ 75,000
If sales revenue per unit increases to $ 22
Selling price per unit $ 22 *14, 000= $ 308000
Variable costs per unit $ 12 *14, 000= $ 168,000
Contribution Margin $ 140,000
Less Total fixed costs $ 23, 000
Operating Income $ 117,000
Answer:
B. $ 117 comma 000
Explanation:
The Net/operating income is the difference between the total sales and total costs, Total cost is made up of the fixed and variable cost.
Like the total sales, the total variable cost is also affected by the level of activities or units produced/sold.
Mathematically,
Net income = Total sales - variable cost - fixed cost
= $22(14,000) - $12(14,000) - $23,000
= $117,000
Procter & Gamble recently kept its retail price on its jumbo pack of Pampers and Luvs diapers, but reduced the number of diapers per pack from 140 to 132. The repositioning strategy P&G is using here is called
a. market modification.
b. product extension.
c. rebranding.
d. trading up.
e. downsizing
Answer:
e. downsizing
Explanation:
Downsizingbor shrinkfalation is the practice where the amount of a product in a package is reduced. The package looks similar to the old one and customers buy on assumption that they are buying the same amount as before. Although the product amount is written in the label most people do not take the time to check.
For businesses this is a great way to increase revenue from sales. Prices are kept constant while amount is reduced.
This is quite effective as most customers will react negatively to price change.
Answer: E. Downsizing
Explanation: Downsizing is defined as the process of reducing in size or number. An adjustment made to an existing product, is usually made for greater appeal or functionality or to reduce cost of production. Such adjustments may include changes to a product's shape, adding a feature or improving its performance, reducing its quantity.
However, most consumers often jump to the conclusion that the company is purely profit-driven but often than not, downsizing—reduction in the amount of the product offered to the consumer—at the same price are due to increased costs of raw materials, production and distribution, which the company must factor in to break even. And so, at times like this the firm is faced with either increasing prices of products or cutting down the quantity in their packaging such as P&G had done. As consumers are more sensitive to price changes than to decreases in product quantity, firms will often decrease product sizes as against raising product prices.
1. How does the complete equity method, used to facilitate consolidation in subsequent years, differ from the equity method used for external reporting? A. The complete equity method adjusts for upstream and downstream unconfirmed profits, while the equity method used for external reporting does not make these adjustments. B. The complete equity method deducts unconfirmed profits on downstream sales to the extent of ownership interests, while the equity method used for external reporting deducts all unconfirmed profits on downstream sales. C. The complete equity method deducts unconfirmed profits on upstream sales to the extent of ownership interests, while the equity method used for external reporting deducts all unconfirmed profits on upstream sales.
Answer:
None of the option is correct.
Explanation:
The major difference between the two methods is that under the complete equity method, an adjustment is made to the reported profit for impairment losses on the intangible assets that were not previously reported. However, under the he equity method used for external reporting, adjustment for impairment losses on the intangible assets that were not previously reported is not made.
Note that impairment loss occurs when the fair value of an intangible asset falls below its carrying amount. The amount by which the fair value is lower than the carrying amount is adjusted or written off.
Examples of intangible assets are goodwill, copyrights, brand recognition, patents, trademarks, and among others.
Which of the following accurately describe depreciable cost? i. The amount of cost a company intends to depreciate over the life of the asset? ii. The acquisition cost of the asset. iii. The fair market value of the asset iv. The acquisition cost of the asset less the salvage value.
Answer:
(i) and (iv)
Explanation:
The appreciable cost is the cost in which the assets can be depreciation over the useful life
And, the appreciable cost is come after deducting the salvage value from the acquisition cost
The formula to compute the depreciation expense using the straight-line method is shown below:
= (Original cost - salvage value) ÷ (useful life)
So it can be calculated after considering the first and four options
a) Deployment Specialist pays a current (annual) dividend of $1 and is expected to grow at 20% for two years and then at 4% thereafter. If the required return for Deployment Specialist is 8.5%, what is the intrinsic value of its stock
Answer:
Explanation:
we will apply multi stage dividend growth model = Do(1+g)/Ke-g
Do = Dividend just paid
(1+g) = Dividend for next year
Ke = Return
g = Growth in dividend
Year Year Year
0 1 2
20% 20%
Dividend 1 1.2 1.44
infinity value @4% 44.8 8*
Present value @8.5% 1 1.11111 39.64334
Value of stock=1+1.111111111+ 39.64334= 41.75445
*Do(1+g)/Ke-g
1.44(1+4%) / 8.5%-4%
2.016 / 4.5%
Value= 44.88
For many years you have been using your local, small-town bank. One day you hear that the bank is about to be purchased by Bank of America. From your vantage point as a retail bank customer, what are the costs and benefits of such a merger?
Answer:
If I was banking with my local town bank and it happens that Bank of Africa purchases it, there are cost and benefits associated with the merge. First, Bank of America is global, meaning that I will be able to access the Services such as ATM services at different points. Second, due to its area of coverage, the services are cheaper compared to the ones I got when it was in my local town. However, due to the monopoly of the bank, they might increase the charges making them more expensive than when the services in the local village. Additionally, it will be a challenge for average customers, such as farmers, to access big banks unless faithful people accompany them.
Explanation:
There are costs and advantages to the merger when my local town and the Bank of Africa acquire it. Bank of America is a multinational business, so one may get its capabilities, such as ATM services, from a variety of locations.
Who is the customer?"A customer can be defined as a person who buys a product or takes the services. For the product or the service, they pay the amount. A customer is one who demands the product which is supplied by the supplier."
Second, comparable to the service received when it covered his hometown, they are less expensive to its covering region. But, because of the bank's monopolies, they may raise the prices, resulting in a higher cost than using the products in the next hamlet.
It will also be difficult for regular clients, like farmers, to enter big banks unless dependable people go with them.
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Bally Manufacturing sent Intel Corporation an invoice for machinery with a $13,500 list price. Bally dated the invoice July 29 with 3/10 EOM terms. Intel receives a 20% trade discount. Intel pays the invoice on August 11. What does Intel pay Bally
Answer:
$10,584
Explanation:
Given
Cost of Machinery = $13,500
Trade Discount = 20%
Cash Discount = 2%
First, we Calculate the Net Price
Net Price = $13,500(100% - 20%)
Net Price = $13,500(80%)
Net Price = $13,500 * 0.8
Net Price = $10,800
Applying Cash discount;
Payment = $10,800(100% - 2%)
Payment = $10,800(98%)
Payment = $10,800 * 0.98
Payment = $10,584
Hence, Intel pays Bally $10,584
You are a real estate agent thinking of placing a sign advertising your services at a local bus stop. The sign will cost $ 8 comma 000$8,000 and will be posted for one year. You expect that it will generate additional revenue of $ 1 comma 280$1,280 a month. What is the payback period?
Answer:
The Payback period is
Explanation:
Payback period is the time in which initial investment is recovered from project cash inflows. It shows the time to pack back the initially cost incurred on the project or asset.
Cost to project = $8,000
Additional Revenue = $1,280
Payback period = Cost of project / additional revenue
Payback period = $8,000 / $1,280
Payback period = 6.25 years
Payback period = 6 years 3 months
A bridge design firm is performing an economic analysis of two mutually exclusive designs for a highway overpass. The steel girder option has an initial cost of $2.04 million, and the concrete option has an initial cost of $2.52 million. Every 25 years, the steel bridge must be painted at a cost of $790,000, and all other maintenance costs are the same for both options. The steel bridge is expected to last 50 years, and concrete bridge is expected to last 75 years. Both are assumed to be identically replaced indefinitely. Based on the shortest acceptable analysis period for each option, determine the equivalent uniform annual cost (EUAC) for the best option using an interest rate of 7%. Express your answer in $ to the nearest $1,000.
Answer:
Please find attached solution
Explanation:
Gilberto's Performance Pizza is a small restaurant in Philadelphia that sells gluten-free pizzas. Gilberto's very tiny kitchen has barely enough room for the four ovens in which his workers bake the pizzas. Gilberto signed a lease obligating him to pay the rent for the four ovens for the next year. Because of this, and because Gilberto's kitchen cannot fit more than four ovens, Gilberto cannot change the number of ovens he uses in his production of pizzas in the short run.
However, Gilberto's decision regarding how many workers to use can vary from week to week because his workers tend to be students.
Each Monday, Gilberto lets them know how many workers he needs for each day of the week. In the short run, these workers are ________ inputs, and the ovens ________ inputs.
Answer:
In the short run, these workers are variable inputs, and the ovens fixed inputs.
Explanation:
In this matter, we can say that workers are variable inputs, due to the fact that there is a possibility that Gilberto varies the number of workers hired in relation to their production needs. Ovens, on the other hand, can be considered as fixed inputs, which are those inputs, whose quantities cannot be changed in the short term.
The goal of the biological (ergonomic) approach to job design is: a. to make the work simple so that anyone can be trained quickly and easily to perform it. b. to minimize physical strain on the worker by structuring the physical work environment around the way the human body works. c. to focus on increasing the meaningfulness of jobs. d. to design jobs in a way that ensures they do not exceed people's mental capabilities and limitations.
Answer:
To minimise physical strain on the worker by structuring the physical work environment around the way the human body works.
Explanation:
Ergonomics is very essential because when carrying out a job and your body is made uncomfortable by an bad posture, extreme temperature, or repeated movement your musculoskeletal system tends to be affected.
Ergonomics improves productivity in a workplace. Designing a workspace that promotes good posture, less repetitive motions, easier heights and reaches is very necessary. More efficiency means more productivity which is important for the growth of the company.
Assume Blue Spruce Corp. has the following reported amounts: Sales revenue $724,200, Sales returns and allowances $21,300, Cost of goods sold $468,600, and Operating expenses $156,200. (a) Compute net sales. Net sales $enter Net sales in dollars (b) Compute gross profit. Gross profit $enter Gross profit in dollars (c) Compute income from operations. Income from operations $enter Income from operations in dollars
Answer:
(a) Net sales is $702,900
(b) Gross profit is $234,300
(c) Income from operations is $78,100
Explanation:
Net sales is the result of the total sales less discounts, allowances and sales return.
The gross profit is the net sales less the cost of goods sold while the income from operations is the gross profit less the operating expenses.
Net sales
= $724,200 - $21,300
= $702,900
Gross profit
= $702,900 - $468,600
= $234,300
Income from operations
= $234,300 - $156,200
= $78,100
Net Sales for Blue Spruce Corp. are found to be $702,900, Gross Profit is $234,300, and Income from Operations is $78,100, using standard business accounting calculations.
Explanation:To compute the answers to your questions for Blue Spruce Corp. we first need to understand a few business accounting terms.
Net Sales are calculated as Sales Revenue minus Sales returns and allowances. In this case, $724,200 (Sales Revenue) - $21,300 (Sales Returns and Allowances) = $702,900 (Net Sales).
Gross Profit is calculated as Net Sales minus the Cost of Goods Sold. Using the Net Sales we just computed: $702,900 (Net Sales) - $468,600 (Cost of Goods Sold) = $234,300 (Gross Profit).
Income from Operations is calculated as Gross Profit minus Operating Expenses. So, $234,300 (Gross Profit) - $156,200 (Operating Expenses) = $78,100 (Income from Operations).
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The Bureau of Labor Statistics counts underemployed persons as those who are currently working: a. in a field that doesn’t add a lot to overall GDP. b. in a job for which they are overqualified for. c. less than they would like to be. d. less hours than their employer requires full-time workers to work.
Answer:
The correct answer is letter "B": in a job for which they are overqualified for.
Explanation:
Underemployment is the state in which individuals are employed but in positions that do not match their skills and knowledge, typically, in jobs where they do not use their academic background and expertise due to the simplicity of the job. Underemployment happens when people look for a job suitable with their capabilities but hey cannot find, Then, they secure any job position available to generate an income.
Vaughn Manufacturing has estimated that total depreciation expense for the year ending December 31, 2021 will amount to $591000, and that 2021 year-end bonuses to employees will total $1240000. In Vaughn's interim income statement for the six months ended June 30, 2021, what is the total amount of expense relating to these two items that should be reported?
Answer:
$915,000
Explanation:
Because half of the depreciation expense, and the expense on bonuses has already been reported by June 30,2021 (the half of the year), only hafl of the total money spent on the two items will have to be reported for the interim income statement ended on December 31, 2021:
$591,000 / 2 = $295,500
$1,240,000 / 2 = $620,000
Now, we simply add up these two figures:
$295,500 + $620,000 = $915,000
How would you categorize the following transactions in the balance of payments for the United States. For each scenario, besure to discuss which section it enters as a credit and debit (for any entry in the current account, be sure to discuss if it is an import or export as well as whether it is a good or service)a.A French chef is hired to cater a US diplomats event in Franceb.An American purchases 1 Million dollars’ worthof shares in a Nigerian companyc.The United States forgives a 5 Billion dollar debt owed by a foreign countryd.An Italian movie pays for the rights to sing the English version of the "Happy Birthday" song to its American copyright holderse.16 million dollars’ worthof escargot is purchased by an American restaurant from Francef.An American business man in Los Angeles purchases crabs from a dealer in Seattle
Answer:
a. The transaction enters Current account as a Debit entry and is an import and a service.
b. The Transaction enters on the financial account as a debit.
c. The Transaction enters on the financial account as a credit.
d. The transaction enters on the current account as a credit and is more of an export and is also a service.
e.The transaction enters as a current account on a debit and is an import of a good.
f..The transaction enters as a current account on a debit and is an import of a good.
Explanation:
Transaction number c, the state forgives a debt meaning it needs to cancel it, the time it was granted it went on on a debit entry now they act like they received it so it should cancel that debit by credit.
transaction d, the song is a service because it is intangible, more or less inseparable from person doing it hence copyright and paying.
The categorization of transactions into credit and debit entries based on whether they are exports or imports of goods and services. Here the example of current accounts are French chef, United States forgives a foreign debt, American restaurant and Nigerian company: is financial account and American businessman is domestic transaction.
When categorizing transactions in the balance of payments for the United States, each scenario reveals different entries in credits and debits:
A French chef is hired to cater a US diplomat's event in France: This is an import of services and is recorded as a debit in the current account.
An American purchases shares in a Nigerian company: This transaction would be recorded as a debit in the financial account as it's an outbound investment.
The United States forgives a foreign debt: Debt forgiveness is categorized under unilateral transfers in the current account, treated as a negative entry (like an import).
An Italian movie pays for rights to an American song: This is an export of services, recorded as a credit in the current account.
Escargot is purchased by an American restaurant from France: Import of goods, recorded as a debit in the current account.
An American businessman in Los Angeles purchases crabs from Seattle: This is a domestic transaction and does not appear on the balance of payments as there's no international component.
A company offers ID theft protection using leads obtained from client banks. Three employees work 40 hours a week on the leads, at a pay rate of $16 per hour per employee. Each employee identifies an average of 3,800 potential leads a week from a list of 4,600. An average of 10 percent of potential leads actually sign up for the service, paying a one-time fee of $70. Material costs are $1,400 per week, and overhead costs are $9,000 per week. Calculate the multifactor productivity for this operation in fees generated per dollar of input. (Round your answer to 2 decimal places.) Multifactor productivity
Answer:
The correct answer is 6.48.
Explanation:
According to the scenario, the given data are as follows:
Total number of employees = 3
Pay rate = $16 per hour per employee
One time fees = $70
Average identifies customer = 3,800
Conversion rate = 10%
So, we can calculate the multifactor productivity by using following formula:
Multifactor productivity = Total earning ÷ Total expense
Where, Total earning = 3,800 × 3 × $70 × 0.10 = $79,800
and Total Expense = 3 × 40 × 16 + $1,400 + $9,000 = $12,320
By putting the value we get,
Multifactor productivity = $79,800 ÷ $12,320
= 6.48
Hence, the multifactor productivity for this operation is 6.48.
Final answer:
The multifactor productivity for the company is $6.48 in fees generated per dollar of input, calculated by dividing the total weekly fees generated from customers ($79,800) by the total weekly input costs ($12,320).
Explanation:
To calculate the multifactor productivity (MFP) for this operation in fees generated per dollar of input, we first need to determine the weekly output in fees generated from the leads. With three employees working 40 hours a week at $16 per hour, the total labor cost is $1,920 ($16 per hour * 40 hours * 3 employees). Including material costs of $1,400 and overhead costs of $9,000, the total weekly input costs are $12,320 ($1,920 + $1,400 + $9,000).
Each employee identifies 3,800 potential leads from a list of 4,600 per week, for a total of 11,400 leads (3,800 per employee * 3 employees). With a 10 percent conversion rate, the number of actual customers is 1,140 (11,400 * 10%). At a one-time fee of $70, the total revenue from these customers is $79,800 (1,140 customers * $70). The MFP is calculated by dividing the total output by the total input costs. Therefore, the MFP is $6.48 per dollar of input ($79,800 divided by $12,320).