Answer:
58.11%
Explanation:
Sales = $452,800
Operating costs= 354,300
Operating Income (EBIT) = $98,500
TIE= 4.00
Maximum interest expense= EBIT/TIE= $24,625
Interest rate= 7.50%
Max. debt =Max interest/Interest rate = $328,333
Maximum debt ratio=Debt/ Assets= 58.11%
On February 1, 2020, Nash's Contractors agreed to construct a building at a contract price of $5,700,000. Nash's estimated total construction costs would be $3,920,000 and the project would be finished in 2022. Information relating to the costs and billings for this contract is as follows:
2020 2021 2022
Total costs incurred to date $1,470,000 $2,580,000 $4,550,000
Estimated costs to complete 2,450,000 1,720,000 -0-
Customer billings to date 2,100,000 3,920,000 5,500,000
Collections to date 1,900,000 3,400,000 5,400,000
Fill in the correct amounts on the following schedule. For percentage-of-completion accounting and for completed-contract accounting, show the gross profit that should be recorded for 2020, 2021, and 2022.
2020 $________ 2020 $________
2021 $________ 2021 $________
2022 $________ 2022 $________
Answer:
Nash's Contractor
Gross profit that should be recorded for 2020, 2021, and 2022:
Percentage -of completion Completed-contract
2020 $___667,500_____ 2020 $___0_____
2021 $____361,395____ 2021 $____0____
2022 $____121,105____ 2022 $____1,150,000____
Explanation:
a) Data and Calculations:
Contract price = $5,700,000
Estimated construction costs = $3,920,000
Project completion date = 2022
Costs and Billings:
2020 2021 2022
Total costs incurred to date $1,470,000 $2,580,000 $4,550,000
Estimated costs to complete 2,450,000 1,720,000 -0-
Customer billings to date 2,100,000 3,920,000 5,500,000
Collections to date 1,900,000 3,400,000 5,400,000
Percentage of completion:
2020:
Revenue = $2,137,500 ($1,470,000/$3,920,000 * $5,700,000)
Cost incurred = 1,470,000
Gross profit = $667,500
2021:
Revenue = $1,471,395 ($1,110,000/$4,300,000 * $5,700,000)
Cost incurred = 1,110,000
Gross profit = $361,395
2022:
Revenue = $2,091,105 ($5,700,000 - $2,137,500 - $1,471,395)
Cost incurred 1,970,000
Gross profit = $121,105
Completed contract
2022: Revenue = $5,700,000
Total costs = 4,550,000
Gross profit = $1,150,000
In performing accounting services for small businesses, you encounter the following situations pertaining to cash sales. 1. Metlock, Inc. enters sales and sales taxes separately on its cash register. On April 10, the register totals are sales $34,500 and sales taxes $1,725. 2. Carla Vista Co. does not segregate sales and sales taxes. Its register total for April 15 is $24,804, which includes a 6% sales tax. Prepare the entries to record the sales transactions and related taxes for Metlock, Inc. and Carla Vista Co..
Answer:
1. Metlock, Inc.
Dr Cash $36,225
Cr Sales revenue $34,500
Cr Sales Tax Payable $1,725
2. Carla Vista Co
Dr Cash $24,804
Cr Sales revenue $24,082
Cr Sales Tax Payable $722
Explanation:
Preparation of the entries to record the sales transactions and related taxes for Metlock, Inc. and Carla Vista Co..
1. Metlock, Inc.
Dr Cash $36,225
($34,500+$1,725)
Cr Sales revenue $34,500
Cr Sales Tax Payable $1,725
2. Carla Vista Co
Dr Cash $24,804
Cr Sales revenue $24,082
($24,804/1.06)
Cr Sales Tax Payable $722
($24,804-$24,082)
Use the following information to answer Questions 12 - 15. Below is selected data for Gertup Corporation as of 12/31/05: Gertup has maintained the same inventory levels throughout 2005. If end of year inventory turnover was increased to 12 through more efficient relationships with suppliers, how much cash would be freed up (pick closest number)
Answer:
the cash that should be freed up is $267
Explanation:
The computation of the cash that would be freed up is shown below:
As we know that
The inventory turnover is
= Cost of goods sold ÷ average inventory
12 = $14,800 ÷ average inventory
So, the average inventory is 1,233
Now the cash that should be freed up is
= 1,500 - 1,233
= $267
hence, the cash that should be freed up is $267
1. Which of categories are Internal controls are grouped?
A. Effective operations, financial reporting, and compliance.
B. Efficient operations, financial analysis, and compliance.
C. Efficient operations, financial analysis, and management reporting.
D. Production and operations, financial reporting, and management reporting
Answer: A. Effective operations, financial reporting, and compliance.
Explanation:
Internal controls are meant to promote the effectiveness of operations in a company so as to bring about maximum profitability.
Internal controls also fall under financial reporting because they are sometimes done to ensure that the information presented by a company is accurate and complete.
There are compliance controls as well to ensure that the company is complying with the various regulations that apply to them be it federal, state, local or private.
Brodrick Company expects to produce 20,000 units for the year ending December 31. A flexible budget for 20,000 units of production reflects sales of $400,000; variable costs of $80,000; and fixed costs of $150,000. Assume that actual sales for the year are $480,000 (26,000 units), actual variable costs for the year are $112,000, and actual fixed costs for the year are $145,000. Prepare a flexible budget performance report for the year. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.)
Answer: Check attachment
Explanation:
The flexible budget performance report for the year has been solved and attached.
Note that the selling price per unit was calculated as:
= 400,000 /20,000
= $20 per unit
Therefore, total sales was gotten as:
= 26000 × $20
= $520,000
Variable cost per unit was calculated as:
= 80,000/20,000
= $4 per unit
Then, total cost was:
= $4 × 26,000
= $104,000
Check attachment for further details.
Your credit card statement had your interest rate at 16.5%. When you open your statement the rate went up to 18.2%. Can the credit card company do that without notifying you?
Answer:
Definitely not
Explanation:
I mean, it's YOUR account; they can't just do that, to my inderstanding.
Carrie is creating a personal balance sheet. The heading includes the period of time that the balance sheet represents Which could be the heading of Carrie's balance sheet?
Carrie's Balance Sheet (January 1, 2021)
Carrie's Balance Sheet (January)
Carrie's Balance Sheet (Friday, January 3) Carrie's Balance Sheet (January 2011 - January 2021)
Answer: Carrie's Balance Sheet (January 1, 2021)
Explanation:
The heading of the balance sheet should include as much as possible, the month and year of the balance sheet. It can also include the exact date.
This is done so that the Balance sheet can have a particular reference date such that stakeholders who use the balance sheet can know relate the financial performance of the company as of a certain day which would enable for better analysis.
The heading of Carrie's balance sheet is: Carrie's Balance Sheet (January 2021).
What is balance sheet?Balance sheet help to summarize a company or an organization financial position or financial statement.
Since she is preparing the balance sheet for herself, what will be the heading of the balance sheet is Carrie's Balance Sheet (January 2021).
Therefore the heading of Carrie's balance sheet is: Carrie's Balance Sheet (January 2021).
Learn more about Balance sheet here:https://brainly.com/question/1113933
#SPJ2
Mr. Manning is looking to invest in a one-year stock option and has four possible options. The four options have various rates of return based on whether or not the market rises or fall within the coming year. After consulting with his financial planner, he has the following estimates based on the various market outcomes:
Stock Market Rising Market Stable Market Falling
SUA $68,082 $47,373 $36,362
YSP $64,850 $49,320 $44,865
HTC $57,198 $52,949 $50,605
YHA $59,766 $59,766 $59,766
Mr. Manning’s planner has estimated that the probability the market rises is 60%, stays stable is 30%, and falls is 10%. To assist Mr. Manning in his decision, build a decision tree to model the decision and answer the following question. You do not need to upload your decision tree for this question.
Required:
a. Which stock is the best expected value decision and what is the expected value of that decision?
b. Which stock is the worst expected value decision?
Answer:
Mr. Manning
a. YHA is the best expected value decision with an expected value of $59,766.
b. HTC is the worst expected value decision.
Explanation:
a) Data and Calculations:
Stock Market Rising Market Stable Market Falling
SUA $68,082 $47,373 $36,362
YSP $64,850 $49,320 $44,865
HTC $57,198 $52,949 $50,605
YHA $59,766 $59,766 $59,766
Expected Value:
Stock Market Rising Market Stable Market Falling Expected Value
Probability 60% 30% 10%
SUA $68,082*60% $47,373*30% $36,362*10% = $58,697
YSP $64,850*60% $49,320*30% $44,865*10% = 58,163
HTC $57,198*60% $52,949*30% $50,605*10% = 55,264
YHA $59,766*60% $59,766*30% $59,766*10% = 59,766
SUA = $40,849.20 + $14,211.90 + $3,636.20 = $58,697.30
YSP = $38,880 + $14,796 + $4,486.50 = $58,162.50
HTC = $34,318.80 + $15,884.70 + $5,060.50 = $55,264
YHA = $35,859.60 + $17,929.80 + $5,976.60 = $59,766
The accountant at Blackjack Company is figuring out the difference in income taxes the company will pay depending on the choice of either FIFO or LIFO as an inventory costing method. The tax rate is 30% and the FIFO method will result in income before taxes of $3,640. The LIFO method will result in income before taxes of $3,290. What is the difference in tax that would be paid between the two methods
Answer: $105
Explanation:
Taxes under LIFO:
= LIFO income * Tax rate
= 3,290 * 30%
= $987
Taxes under FIFO:
= FIFO income * Tax rate
= 3,640 * 30%
= $1,092
Difference:
= FIFO tax - LIFO tax
= $105
Preparing job order costing journal entries
Journalize the following transactions for Marge's Sofas.
a. Incurred and paid Web site expenses, $2,000.
b. Incurred manufacturing wages of $15,000, 75% of which was direct labor and 25% of which was indirect labor.
c. Purchased raw materials on account, $24,000.
d. Used in production: direct materials, $7,500; indirect materials, $5,000.
e. Recorded manufacturing overhead: depreciation on plant, $18,000; plant insurance (previously paid), $1,500; plant property tax, $3,900 (credit Property Tax Payable).
f. Allocated manufacturing overhead to jobs, 200% of direct labor costs.
g. Completed production on jobs with costs of $40,000.
h. Sold inventory on account, $22,000; cost of goods sold, $18,000.
i. Adjusted for overallocated or underallocated overhead.
Answer:
Item a
Debit : Website expenses $2,000
Credit : Cash $2,000
Item b
Debit : Work in Process : Direct labor $11,250
Debit : Work in Process : Indirect labor $3,750
Credit : Wages Payable $15,000
Item c
Debit : Raw Materials $24,000
Credit : Accounts Payable $24,000
Item d
Debit : Work in Process : Direct Materials $7,500
Debit : Work in Process : Indirect Materials $5,000
Credit : Raw Materials $12,500
Item e
Debit : Work in Process : Depreciation $18,000
Credit : Accumulated depreciation $18,000
Item e
Debit : Work in Process : Pant Insurance $1,500
Credit : Prepaid insurance $1,500
Item e
Debit : Work in Process : Property tax $3,900
Credit : Property Tax Payable $3,900
Item f
Debit : Overheads $11,250 x 200% $22,500
Credit : Work in Process $22,500
Item g
Debit : Finished Goods Inventory $40,000
Credit : Work in Process $40,000
Item h
Debit : Accounts Receivables $22,000
Debit : Cost of Sales $18,000
Credit : Sales Revenue $22,000
Credit : Finished Goods Inventory $18,000
Explanation:
The journals for the transactions have been prepared above.
A warranty guarantees that the product sold will be acceptable for the purpose for which the buyer intends to use it.
t or f
Answer:
True
Explanation:
A warantee is a written assurance that some product or service will be provided or will meet certain specifications.
Hope this helps! <3
Gamegirl Inc., has the following transactions during August. August 6 Sold 72 handheld game devices for $210 each to DS Unlimited on account, terms 2/10, net 60. The cost of the 72 game devices sold, was $190 each. August 10 DS Unlimited returned seven game devices purchased on 6th August since they were defective. August 14 Received full amount due from DS Unlimited.
Required:
Prepare the transactions for GameGirl, Inc., assuming the company uses a perpetual inventory system.
Answer:
Aug 6
Dr Accounts Receivable $15,120
Cr Sales $15,120
Dr Cost of Goods Sold $13,680
Cr Inventory $13,680
Aug 10
Dr Sales Return $1,470
Cr Accounts Receivable $1,470
Aug 14
Dr Cash $13,513
Dr Sales Discount $137
Cr Accounts Receivable $13,650
Explanation:
Preparation of the transactions for GameGirl, Inc., assuming the company uses a perpetual inventory system.
Aug 6 Accounts Receivable $15,120
Sales $15,120
(72*$210)
Dr Cost of Goods Sold $13,680
Cr Inventory $13,680
(72*$190)
Aug 10
Dr Sales Return $1,470
Cr Accounts Receivable $1,470
(7*$210)
Aug 14
Dr Cash $13,513
($13,650-$137)
Dr Sales Discount $137
Cr Accounts Receivable $13,650
Computation of Sales Discount:
Sales $15,120
Less: Sales Return $1,470
Total Sales $13,650
Multiply: Percentage of Discount 1%
Sales Discount $137
Periods 10% 11% 12% 13% 14% 1 0.909 0.901 0.893 0.885 0.877 2 1.736 1.713 1.690 1.668 1.647 3 2.487 2.444 2.402 2.361 2.322 4 3.170 3.102 3.037 2.974 2.914 5 3.791 3.696 3.605 3.517 3.433 6 4.355 4.231 4.111 3.998 3.889 7 4.868 4.712 4.564 4.423 4.288 8 5.335 5.146 4.968 4.799 4.639 Knowledge Check 01 You are expecting a series of annual cash flows of $25,000 for six years. What is the present value of this annuity if the discount rate is 12%
Answer:
Present value of annuity = $102,785.2
Explanation:
An annuity is a series of cashflow expected to be received or paid yearly for a certain number of years
The present value of annuity = A×( 1 - (1+r)^(-n) )/r
Where A is the annual cash flow= 25,000
n- number of years = 6
r- rate per period = 12%
25,000 × 1- (1.12)^(-6)/0.12
25,000× 4.111=$102,785.2
Present value of annuity = $102,785.2
The answer should be C. Bc clip art can have text illustrations etc!
You are the project manager for the KLN Project. You had 19 stakeholders on this project. You have added three team
members to the project. How many more communication channels do you have now than before?
out of
O a. 171
O b. 60
O c. 1
O d. 231
Lauer Corporation uses the periodic inventory system and has provided the following information about one of its laptop computers: Date Transaction Number of Units Cost per Unit 1/1 Beginning Inventory 220 $ 920 5/5 Purchase 320 $ 1,020 8/10 Purchase 420 $ 1,120 10/15 Purchase 260 $ 1,170 During the year, Lauer sold 1,050 laptop computers. What was ending inventory using the FIFO cost flow assumption
Answer:
$198,900
Explanation:
Ending inventory units = Available units for sale - Units sold
Ending inventory units = 220 + 320 + 420 + 260
Ending inventory units = 1,220.
Units sold = 1,050.
Ending inventory units = 1,220 - 1,050
Ending inventory units = 170
As per the FIFO cost flow assumption, sales comprise of units from beginning inventory and earlier purchases. Hence, ending inventory comprises units from latest purchases.
So, ending inventory of 170 units would be valued at the price from 10/15 purchases.
10/15 purchase price per unit = $1,170
Ending inventory value = 170 units x $1,170
Ending inventory value = $198,900
Help soon! Its Sunday and i have too much over due homework ;-;
Answer:
the first one at the left goes with the third one on the left.
the second on the left goes with the second one .
the third one goes with the first one
and the last one goes with the last one
You expect General Motors (GM) to have a beta of 1.3 over the next year and the beta of Exxon Mobil (XOM) to be 0.9 over the next year. Also, you expect the volatility of General Motors to be 40% and that of Exxon Mobil to be 30% over the next year. Which stock has more systematic risk? Which stock has more total risk? A) XOM, GM B) XOM, XOM C) GM, XOM D) GM, GM E) Not enough information to answer the question
Answer:
d
Explanation:
Systemic risk are risk that are inherent in the economy. They cannot be diversified away. They are also known as market risk. examples of this risk include recession, inflation, and high interest rates. Investors should seek compensation for systemic risk. Systemic risk is measured by beta. The higher beta is, the higher the systemic risk and the higher the compensation demanded for by investors
GM has a higher beta and thus it has a higher systemic risk
total risk is measured by volatility. The higher the volatility, the higher the total risk . GM has a higher volatility
Suppose that an initial $20 billion increase in investment spending expands GDP by $20 billion in the first round of the multiplier process. Also assume that GDP and consumption both rise by $18 billion in the second round of the process. Instructions: Round your answers to 1 decimal place. a. What is the MPC in this economy
Answer: 0.9
Explanation:
The marginal propensity to consume (MPC) is calculated by using the formula:
= Change in consumption / Change in income
where,
Change in consumption = $18 billion
Change in income = $20 billion
MPC = Change in consumption / Change in income
= $18 billion / $20 billion
= 0.9
Therefore, MPC is 0.9.
Analyse the benefits of employee training to a business.
Explanation:
Boosts Employee Performance. ...
Improve Morale and Job Satisfaction. ...
Ensures Opportunities for Learning. ...
Opportunity to Identify Weaknesses. ...
Provide a Framework to Develop Strengths. ...
Encourages Innovation and Risk Acceptance. ...
Boosts Adherence to Quality Standards
you observe thundering herd common stoc k selling for $40.00 per share. the next dividen is ecoected to be $2.00, and is expected to grow at a 4% annual rate forever. If your requir4ed rate of return is 12%, you should purchase the stock? A. Yes, because the presemt value of the expected future cash flows is greater than $40 g
Answer:
no, because the present value of the expected future cash flows is less than $40
Explanation:
The computation of the share price present value is given below:
= Next dividend ÷ (Required rate of return - growth rate)
= $2 ÷ (12% - 4%)
= $25
As we can see that the share price present value would be $25 but the stock selling price is $40 so the present value would be lower than $40 that means the stock should not be purchased
Recording Cash Dividends [LO 11-3 National Chocolate Corp. produces chocolate bars and snacks under the brand names Blast and Soothe. A press release contained the following information March 5-National Chocolate Corp. today announced that its Board of Directors has declared a special one-time" cash dividend of $1.20 per share on its 102,000 outstanding common shares. The dividend will be paid on April 29 to shareholders of record at the close of business on March 26. The Company's fiscal year will end April 30 Required 1. Prepare any journal entries that National Chocolate Corp. should make on the four dates mentioned in press release. (If no entry is required for a transaction/date, select "No Journal Entry Required" in the first account field.)
Answer and Explanation:
The journal entries are shown below:
On Mar-05
DIvidends $122,400 (102,000 shares × $1.20)
To Cash dividends payable $122,400
(Being declaration of the dividend is recorded)
On Mar-26
No entry should be recorded on the recording date
On Apr-29
Cash dividends payable $122,400
To Cash $122,400
(being payment of the cash dividend is recorded)
On Apr-30
Retained earnings $122,400
To Dividends $122,400
(Being closing of the dividend account is recorded)
Jallouk Corporation has two different bonds currently outstanding. Bond M has a face value of $30,000 and matures in 20 years. The bond makes no payments for the first six years, then pays $2,400 every six months over the subsequent eight years, and finally pays $2,700 every six months over the last six years. Bond N also has a face value of $30,000 and a maturity of 20 years; it makes no coupon payments over the life of the bond. The required return on both these bonds is 6% compounded semi-annually. What are the current price of bond M and bond N?
Answer:
um
Explanation:
in damselflies a basal quadrangular cell in the wing venation is called
The D. Dorner Farms Corporation is considering purchasing one of two fertilizer-herbicides for the upcoming year. The more expensive of the two is better and will produce a higher yield. Assume these projects are mutually exclusive and that the required rate of return is 10 percent. Given the following free cash flows:
Product A Product B
Initial outlay -$5000 -$5000
Inflow year 1 700 6,000
Required:
a. Calculate the NPV of each project.
b. Calculate the PI of each project.
c. Calculate the IRR of each project.
d. If there is no capital-rationing constraint, which project should be selected? If there is a capital-rationing constraint, how should the decision be made?
Question Correction:
The question stated that there is a more expensive fertilizer-herbicide. Therefore, their initial outlays cannot be equal as stated. Instead, the correct cash flows, including initial outlays are:
Product A Product B
Initial outlay -$500 -$5000
Inflow year 1 700 6,000
Answer:
The D. Dorner Farms Corporation
Product A Product B
a. NPV = $136 $454
b. PI = 1.272 1.091
c. IRR = 27.2% 9.08%
d. If there is no capital-rationing constraint, Project B should be chosen despite its poor PI and IRR performances, but for returning a larger NPV.
e. If there is a capital-rationing constraint, Project A should be chosen because of its more impressive PI and IRR performances.
Explanation:
a) Data and Calculations:
Required rate of return for the projects = 10%
Present factor of 10% for 1 year = 0.909
Free cash flows:
Product A Product B
Initial outlay -$500 -$5000
Inflow year 1 700 6,000
Present values:
Product A Product B
Initial outlay -$500 -$5000
Inflow year 1 636 5,454
NPV = $136 $454
b) PI (Profitability Index) is a useful tool in capital budgeting which measures the profit potential of a project in order to ease decisions. It is computed by dividing the present value of cash inflows by the initial investment cost. Another formula is: 1 + (NPV/Initial outlay).
Therefore, the PI for each project is calculated as follows:
PI = 1+ (NPV/Initial outlay)
Product A Product B
PI = 1 + ($136/$500) 1 + ($454/$5,000)
= 1.272 1.091
IRR (Internal Rate of Return) = NPV/Initial Outlay
Product A Product B
IRR = $136/$500 * 100 $454/$5,000 * 100
= 27.2% 9.08%
Using information from the news article you read and your knowledge of economics, compose a paragraph in response to the article. Your comment on the article should state your opinion on government intervention. Use economic analysis to guide your opinions. In your writing, be sure to use proper grammar as well as a topic sentence and introductory and concluding statements.
Answer:
I commend the governments of Peachtree City and Fayette County for their recent intervention, which will be beneficial to our economy. Earlier, the city reduced the water level in the lake so that people who live on the lake could maintain the shoreline. When the council started to refill the lake, city staff noted problems with the dam and spillway and brought it to the attention of Fayette County. There were financial constraints to completing this project, but the Peachtree City government decided to spend additional money to finish the project. That was the right course of action. The residents’ properties (and property values) have been restored, and the lake will once again draw visitors to the town to enjoy the lake and spend money in our town’s businesses.
Explanation:
PLATO word for word, just in case <3
Paid $54,000 cash to replace a motor on equipment that extends its useful life by four years. Paid $270 cash per truck for the cost of their annual tune-ups. Paid $216 for the monthly cost of replacement filters on an air-conditioning system. Completed an addition to a building for $303,750 cash. 1. Classify the above transactions as either a revenue expenditure or a capital expenditure. 2. Prepare the journal entries to record the four transactions from part 1.
Answer:
see explanation
Explanation:
revenue expenditure is cost that improves a capital asset
capital expenditure is cost incurred to maintain daily operations
On April 1, Java Brewers created a petty cash fund starting with $100. On April 30, there was only $5 remaining in the petty cash box. The custodian of the fund presented vouchers to the company accountant for Supplies of $55 and Delivery Expenses of $40. The journal entry on April 30, to replenish the fund, would be: On April 1, Java Brewers created a petty cash fund starting with $100. On April 30, there was only $5 remaining in the petty cash box. The custodian of the fund presented vouchers to the company accountant for Supplies of $55 and Delivery Expenses of $40. The journal entry on April 30, to replenish the fund, would be: OPTION ACCOUNT TITLE DEBIT CREDIT (A) Petty cash 95 Cash 95 (B) Cash 95 Petty cash 95 (C) Delivery expenses 40 Supplies 55 Petty cash 95 (D) Delivery expenses 40 Supplies 55 Cash 95
Answer:
D. Dr Delivery expenses 40, Supplies 55
Cr Cash 95
Explanation:
Given the above information, the journal entry on April 30, to replenish the fund would be;
Debit the expenses account. The expenses here are delivery and supply expenses, while Cash would be credited(Sum of the delivery and supply expenses)
Therefore,
Dr Delivery expenses $40
Dr Supplies $55
_____________ To Cash $95
DJH Enterprises has 3 departments. Operating results for 2019 are as follows:
Department 1 Department 2 Department 3
Sales $670,000 $322,000 $856,000
Variable costs 445,000 287,000 602,000
Contribution margin $225,000 $35,000 $254,000
Direct fixed expenses $120,000 $27,000 $163,000
Common fixed expenses 75,000 30,000 94,000
Total fixed expenses $195,000 $57,000 $257,000
Operating income (loss) $30,000 ($22,000) ($3,000)
DJH is considering eliminating the departments that show losses. Assume that the direct fixed expenses could be avoided if the department is eliminated. What effect would elimination of Department 2 have on DJ H's total operating income?
Answer:
DJH Enterprises
The effect of eliminating Department 2 will increase the total operating income to $27,000 from $5,000.
Explanation:
a) Data and Calculations:
Operating Results for 2019 for the three departments:
Department 1 Department 2 Department 3 Total
('000)
Sales $670,000 $322,000 $856,000 $1,848
Variable costs 445,000 287,000 602,000 1,334
Contribution margin $225,000 $35,000 $254,000 $514
Direct fixed expenses $120,000 $27,000 $163,000 $310
Common fixed expenses 75,000 30,000 94,000 199
Total fixed expenses $195,000 $57,000 $257,000 509
Operating income (loss) $30,000 ($22,000) ($3,000) $5
Loss-making departments eliminated:
Department 1 Department 3 Total
Sales $670,000 $856,000 $1,526,000
Variable costs 445,000 602,000 1,047,000
Contribution margin $225,000 $254,000 $479,000
Direct fixed expenses $120,000 $163,000 $283,000
Common fixed expenses 75,000 94,000 169,000
Total fixed expenses $195,000 $257,000 $452,000
Operating income (loss $30,000 ($3,000) 27,000
Which of the following statement is not true about the Commercial News USA magazine, the official export magazine for the US: Group of answer choices Magazine is published in both English and Spanish Magazine is published in both English and Chinese Magazine is published the official export promotion magazine of the US government Magazine has an estimated 250,000 readers in 178 countries.
Answer:
Magazine is published in both English and Chinese
Explanation:
According to Capela Chapter 12, we good to know that the Commercial News USA would be classified as the promotion magazine that should be used for official export with respect to the US Department of Commerce. The magazine would be published in English and Spanish languages and also has approx 2,50,000 readers in 178 countries.
Therefore the first option is not true