Wexpro, Inc., produces several products from processing 1 ton of clypton, a rare mineral. Material and processing costs total $71,000 per ton, one-fourth of which is allocated to product X15. Six thousand five hundred units of product X15 are produced from each ton of clypton. The units can either be sold at the split-off point for $17 each, or processed further at a total cost of $8,800 and then sold for $22 each. Required: 1. What is the financial advantage (disadvantage) of further processing product X15

Answers

Answer 1

Answer:

Financial advantage  of further processing =$23,700

Explanation:

A company should process a product further if the additional revenue from the split-off point is greater than than the further processing cost.  

Also note that all cost incurred up to the split-off point are irrelevant to the decision to process further .  

                                                                                       $

Additional sales revenue from further processing

($22-$17)×  6,500                                                        32,500

Less further processing cost                                       (8,800)

Financial advantage                                                     23,700

Financial advantage  of further processing =$23,700


Related Questions

Super Clinics offers one service that has the following annual cost and utilization estimates: Variable cost per visit $ 10 Annual direct fixed costs $50,000 Allocation of overhead costs $20,000 Expected utilization 1,000 visits What price per visit must be set if the clinic wants to make an annual profit of $10,000 on the service? A. $ 70 B. $ 80 C. $ 90 D. $100 E. $110

Answers

Answer:

C. $ 90

Explanation:

Number of visits = 1,000

Variable cost = $10 × 1,000 = $10,000

Fixed cost = $50,000

Overhead cost = $20,000

Required profit = $10,000

So,Total Cost = Variable Cost+ Fixed Cost+ Overhead Cost

= $10,000 + $50,000 + $20,000

= $80,000

Now, Price per Visit = (Total Cost+ Required Profit) ÷ Number of visits

= ($80,000 + $10,000) ÷ 1,000

= $90,000 ÷ 1,000

= $90

Oriole Company uses a periodic inventory system. For April, when the company sold 600 units, the following information is available. Units Unit Cost Total Cost April 1 inventory 270 $30 $ 8,100 April 15 purchase 440 36 15,840 April 23 purchase 290 39 11,310 1,000 $35,250 Compute the April 30 inventory and the April cost of goods sold using the FIFO method. Ending inventory $enter a dollar amount Cost of goods sold $enter a dollar amount

Answers

Answer:

. Ending inventory = $15,270

cost of goods sold = $19,980

Explanation:

FIFO means first in, first out. It means that it is the first purchased inventory that is the first to be sold

the cost of goods sold would be determined using the prices of inventories on April 1 and 15

cost of goods sold

270 x $30 = $8100

        +

(600 - 270) x $36 = $11,880

cost of goods sold = $19,980

ending inventory would consist of the inventory not sold on April 15 and the inventory bought on April 23

inventory not sold on April 15 = 440 - (600 - 270) = 110

110 x 36 = $3960

    +

290 x 39 = 11,310

total = $15,270

Vector Technology is suffering from cyber-loafing, which is employee use of work internet access for personal use. Can you lead a task force in creating a new social media policy for Vector before productivity drops even further? Keep in mind that you don't want to create employee backlash! Instructor Instructions: Please review the instruction and respond to the questions for this homework assignment.

Answers

Answer:

New social media policy about the internet usage should be implemented with strict internal controls so that there is no back loafing again by the employees in the organization.

Explanation:

Cyber loafing is Internet back loafing when employees are using company's internet access for personal use or for a second job. Some organizations do allow personal use of internet but to some extent and it should be monitored. When employees find loopholes in the company's internal controls they will create some opportunity for fraud. The internet access given to employees should be monitored carefully and there should be strict internal controls so that any misuse is avoided.

Calculating Liquidity Ratios SDJ, Inc., has net working capital of $1,050, current liabilities
of $4,300, and inventory of $1,300. What is the current ratio? What is the quick ratio?

Answers

Answer:

Current Ratio = 1.244

Quick Ratio = 0.942

Explanation:

NWC = 1050 = Current Assets – Current Liabilities = CA - 4300

=> CA = 1050+ 4300 = 5350

Current Ratio = Current Assets/Current Liabilities

= 5350/ 4300 = 1.244

Quick Ratio = (Current Assets – Inventory) / Current Liabilities

= (5350 – 1,300)/4300 = 0.942

Blaine Air Transport Service, Inc., providing air delivery service for businesses, has been in operation for three years. The following transactions occurred in February:

February 1 Paid $310 for rent of hangar space in February.
February 2 Purchased fuel costing $490 on account for the next flight to Dallas.
February 4 Received customer payment of $850 to ship several items to Philadelphia next month.
February 7 Flew cargo from Denver to Dallas; the customer paid $870 for the air transport.
February 10 Paid $130 for an advertisement in the local paper to run on February 19.
February 14 Paid pilot $2,500 in wages for flying in January (recorded as expense in January).
February 18 Flew cargo for two customers from Dallas to Albuquerque for $4,700; one customer paid $1,100 cash and the other asked to be billed.
February 25 Purchased on account $2,540 in spare parts for the planes.
February 27 Declared a $220 cash dividend to be paid in March.

Required:
Prepare journal entries for each transaction.

Answers

Answer:

February 1

Debit  : Rent expense    $310

Credit : Cash  $310

February 2

Debit  : Fuel expense $490

Credit : Accounts Payable

February 4

Debit  : Cash $850

Credit : Deferred Revenue $850

February 7

Debit  : Cash $870

Credit : Service Revenue $870

February 10

Debit  : Advertising expense $130

Credit : Cash $130

February 14

Debit  : Wages Payable $2,500

Credit : Cash $2,500

February 18

Debit : Cash $1,100

Debit  : Accounts Receivable $3,600

Credit : Service Revenue $4,700

February 25

Debit  : Spare parts $2,540

Credit : Cash $2,540

February 27

Debit  : Dividends $220

Credit : Shareholders for dividends $220

Explanation:

For expenses, if there is immediate payment of cash for expenses incurred, recognize cash out flow and otherwise recognize a liability accounts payable.

For revenue, if there is immediate payment of cash for services recognize cash inflow, otherwise recognize an asset accounts receivable.

Remember to recognize revenue as and when transfer of goods or services are made to customer, otherwise raise a liability - deferred revenue.

Fallon Company uses flexible budgets to control its selling expenses. Monthly sales are expected to range from $172,800 to $215,400. Variable costs and their percentage relationship to sales are sales commissions 7%, advertising 4%, traveling 4%, and delivery 1%. Fixed selling expenses will consist of sales salaries $35,500, depreciation on delivery equipment $7,500, and insurance on delivery equipment $1,100.

Required:
Prepare a monthly flexible budget for each $11,100 increment of sales within the relevant range for the year ending December 31, 2017.

Answers

Answer:

Sales Revenue   Total expenses  

   $172,800               $71,748

   $183,900               $73,524

   $195,000              $75,300

  $206,100               $77,076

Explanation:

Note: See the attached excel file for the monthly flexible budget for the year ending December 31, 2017.

Also note that since it is stated that the budget must be for each $11,100 increment of sales within the relevant range of $172,800 to $215,400 of monthly expected sales, the highest expected sales that fall within the range is $206,100 in the attached excel file.

From the attached excel file, we have:

Sales Revenue   Total expenses  

   $172,800               $71,748

   $183,900               $73,524

   $195,000              $75,300

  $206,100               $77,076

Marketing and distributing the company's product are categorized as

Answers

Answer:

thye are categorized as a channel

Explanation:

Skysong Itzek manufactures and sells homemade wine, and he wants to develop a standard cost per gallon. The following are required for production of a 50-gallon batch. 3,800 ounces of grape concentrate at $0.07 per ounce 54 pounds of granulated sugar at $0.45 per pound 60 lemons at $0.70 each 150 yeast tablets at $0.28 each 200 nutrient tablets at $0.17 each 1,900 ounces of water at $0.005 per ounce Skysong estimates that 5% of the grape concentrate is wasted, 10% of the sugar is lost, and 25% of the lemons cannot be used. Compute the standard cost of the ingredients for one gallon of wine. (Round intermediate calculations and final answer to 2 decimal places, e.g. 1.25.) Standard Cost Per Gallon $

Answers

Answer:

Skysong Itzek

Standard Cost Per Gallon = $8.36

Explanation:

a) Data and Calculations:

Requirements for the production of a 50-gallon batch:

Materials                                         Quantity       Price               Total costs

Ounces of grape concentrate         3,800      $0.07/ounce           $266.00

Pounds of granulated sugar                 54      $0.45/pound               24.30

Lemons                                                  60      $0.70 each                  42.00

Tablets of yeast                                   150       $0.28 each                 42.00

Tablets of nutrient                              200       $0.17 each                  34.00

Ounces of water                              1,900        $0.005/ounce             9.50

Total costs                                                                                         $417.80

Standard cost per unit  = Total material costs/Batch Quantity

= $417.80/50 = $8.36

b) Since the estimated wastages of grape concentrate, sugar, and lemons are of no further use, the full costs of the direct materials are used in determining the standard cost.  The standard cost is, therefore, equal to the total material costs divided by the batch quantity.

The following is a December 31, 2018, post-closing trial balance for Almway Corporation.
Account Title Debits
Credits
Cash 77,000
Investments 142,000
Accounts Receivable 76,000
Investments 216,000
Prepaid insurance (for the next 9 Months) 6,000
Land 122,000
Buildings 436,000
Accumulated Depreciation-Buildings 116,000
Equipment 126,000
Accumulated Depreciation-Equipment 76,000
Patents (net of amortization) 26,000
Accounts Payable 107,000
Notes Payable 178,000
Interest Payable 36,000
Bonds Payable 256,000
Common Stock 348,000
Retained Earnings 110,000
Totals 1,227,000 1,227,000
Additional information:_______.
The investment in equity securities account includes an investment in common stock of another corporation of $36,000 which management intends to hold for at least three years. The balance of these investments is intended to be sold in the coming year. The land account includes land which cost $31,000 that the company has not used and is currently listed for sale. The cash account includes $21,000 restricted in a fund to pay bonds payable that mature in 2024 and $29,000 restricted in a three-month Treasury bill. The notes payable account consists of the following: a $36,000 note due in six months. a $56,000 note due in six years. a $56,000 note due in five annual installments of $11,200 each, with the next installment due February 15, 2022. The $66,000 balance in accounts receivable is net of an allowance for uncollectible accounts of $9,000. The common stock account represents 106,000 shares of no par value common stock issued and outstanding. The corporation has 500,000 shares authorized.
Required:
Prepare a classified balance sheet for the Almway Corporation at December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.)

Answers

Answer:

Almway Corporation

Classified Balance Sheet

As of December 31, 2018

Assets

Current Assets:

Cash                                           $27,000

Restricted fund (treasury bill)     29,000

Marketable Investments           142,000

Accounts Receivable                  85,000

Allowance for Uncollectibles      (9,000)

Short-term investment             180,000

Prepaid insurance

 (for the next 9 Months)             6,000    $460,000

Long-term Assets:

Restricted fund (bonds payable) 21,000

Long-term investment                36,000

Land for sale                                31,000

Land in use                                  91,000

Buildings                                   436,000

Accumulated Depreciation      (116,000)

Equipment                                126,000

Accumulated Depreciation      (76,000)

Patents (net of amortization)    26,000    $575,000

Total assets                                             $1,035,000

Liabilities and Equity

Current Liabilities:

Accounts Payable                   107,000

Short-term notes payable       47,500

Interest Payable                      36,000      $190,500

Long-term liabilities:

Long-term notes payable     130,500

Bonds Payable                     256,000      $386,500

Total liabilities                                           $577,000

Equity:

Common Stock                    348,000

Retained Earnings                 110,000     $458,000

Total liabilities and equity                     $1,035,000

Explanation:

a) Data and Calculations:

Almway Corporation

Trial Balance as of December 31, 2018

Account Title                           Debits        Credits

Cash                                           77,000

Investments                             142,000

Accounts Receivable                76,000

Investments                             216,000

Prepaid insurance

 (for the next 9 Months)            6,000

Land                                        122,000

Buildings                                436,000

Accumulated Depreciation-Buildings         116,000

Equipment                             126,000

Accumulated Depreciation-Equipment      76,000

Patents (net of amortization) 26,000

Accounts Payable                                      107,000

Notes Payable                                            178,000

Interest Payable                                          36,000

Bonds Payable                                         256,000

Common Stock                                        348,000

Retained Earnings                                    110,000

Totals                                 1,227,000   1,227,000

Additional Information and Analysis:

a. Investments in equity          216,000:

Short-term investment            180,000

Long-term investment              36,000

b. Land                                     122,000:

Land for sale                              31,000

Land in use                                91,000

c. Cash                                          77,000:

Restricted fund (bonds payable) 21,000

Restricted fund (treasury bill)     29,000

Cash balance                              27,000

d. Notes Payable                       178,000:

Short-term notes payable         36,000 + 11,500 = $47,500

Long-term notes payable        130,500

e. Accounts Receivable            76,000:

Allowance for uncollectibles      9,000

Accounts receivable                 85,000

f. Common Stock                   348,000:

Authorized shares, 500,000

106,000 Issued shares, no par 348,000

Almway Corporation

Adjusted Trial Balance as of December 31, 2018

Account Title                                Debits        Credits

Cash                                             27,000

Restricted fund (bonds payable) 21,000

Restricted fund (treasury bill)     29,000

Marketable Investments           142,000

Accounts Receivable                  85,000

Allowance for Uncollectibles                         9,000

Short-term investment             180,000

Long-term investment               36,000

Prepaid insurance

 (for the next 9 Months)             6,000

Land for sale                              31,000

Land in use                                91,000

Buildings                                 436,000

Accumulated Depreciation-Buildings         116,000

Equipment                              126,000

Accumulated Depreciation-Equipment      76,000

Patents (net of amortization) 26,000

Accounts Payable                                      107,000

Short-term notes payable                          47,500

Long-term notes payable                         130,500

Interest Payable                                         36,000

Bonds Payable                                         256,000

Common Stock                                        348,000

Retained Earnings                                    110,000

Totals                                 1,236,000   1,236,000


For a business owner, insurance is a cost just like any other expenses. How does buying business
insurance and offering insurance to employees affect the business's profit and success?

Answers

Answer:

It adds an additional expense which means a percentage of profits are depleted. However, it contributes to the wellbeing of the employees showing that they are cherished and have the opportunity to earn benefits which can play a role in motivating them. Due to this it is more likely the workforce would be more comfortable working for the organisation thus leading to a higher chance at success.

1. Prepare general journal entries for the transactions.
Mitchell Parts Co. had the following plant asset transactions during the year:
1. Assets discarded or sold:
Jan. 1 Motor #12, which had a cost of $2,890 and accumulated depreciation of
$2,890, was discarded.
8 Motor #8, which had a cost of $4,440 and accumulated depreciation of
$4,020, was sold for $260.
14 Motor #16, which had a cost of $5,730 and accumulated depreciation of
$5,490, was sold for $470.
2. Assets exchanged or traded in:
Feb. 1 Motor #6, which had a cost of $5,860 and accumulated depreciation of
$4,590, was traded in for a new motor (#22) with a fair market value of
$6,800. The old motor and $5,300 in cash were given for the new motor.
9 Motor #9, which had a cost of $5,420 and accumulated depreciation of
$4,940, was traded in for a new motor (#23) with a fair market value of
$6,450. The old motor and $6,170 in cash were given for the new motor.

Answers

Answer:

1. Accumulated Depreciation (Dr.) $2,890

Motor #12 (Cr.) $2,890

2. Cash (Dr.) $260

Accumulated Depreciation (Dr.) $4,020

Loss on Sale (Dr.) $160

Motor #8 (Cr.) $4,440

3. Cash (Dr.) $470

Accumulated Depreciation (Dr.) $5,490

Gain on Sale (Cr.) $230

Motor #16 (Cr.) $5,730

Explanation:

1. New Motor #22 (Dr.) $6,800

Accumulated Depreciation (Dr.) $4,590

Gain on Sale (Cr.) $230

Motor #6 (Cr.) $5,860

Cash (Cr.) $5,300

2.  New Motor #23 (Dr.) $6,450

Accumulated Depreciation (Dr.) $4,940

Loss on Sale (Dr.) $200

Motor #9 (Cr.) $5,420

Cash (Cr.) $6,170

A company's income statement reported net income of $80,000 during 2016. The income tax return excluded a revenue item of $6,000 (reported on the income statement) because under the tax laws the $6,000 would not be reported for tax purposes until 2017. Which of the following statements is incorrect assuming a 21% tax rate?

a. Income tax expense on the income statement exceeds the tax liability to the IRS.
b. The $6,000 of revenue creates a deferred tax liability.
c. A $2,100 deferred tax liability is reported as of December 31, 2014.
d. Income tax expense on the income statement is $25,900.

Answers

Answer:

d. Income tax expense on the income statement is $25,900.

Explanation:

Calculation to determine the statements that is incorrect assuming a 21% tax rate

INCOME TAX EXPENSE

Using this formula

Income tax expense=Net income*Tax rate

Let plug in the formula

Income tax expense=$80,000*.21

Income tax expense=$16,800

Based on the above calculationThe income tax expense ($80,000 × .21) on the income statement is $16,800

Therefore the statements that is incorrect assuming a 21% tax rate is

INCOME TAX EXPENSE ON THE INCOME STATEMENT is $25,900

Suppose that the demand for milk in the United States is represented by the following equation, where P is the price of a gallon of milk. QD = 200 – 10P The supply of milk is represented by the following equation: QS = –10 + 50P The equilibrium price of a gallon of milk is a) $ (give your answer to two decimals), and the equilibrium quantity is b) million gallons.

Answers

Answer:

a.

P = $3.50 per gallon

b.

Equilibrium Quantity = 165 million gallons

Explanation:

a.

The equilibrium price is the price at which Quantity demanded equals quantity supplied. To calculate the equilibrium price using the given equations for demand and supply, we need to equate both equations.

Equilibrium Price (P) calculation

QD = QS

200 - 10P  =  -10 + 50P

200 + 10  =  50P + 10P

210 = 60P

P = 210 / 60

P = $3.50 per gallon

b.

The equilibrium quantity can be calculated by inserting the value of Price (P) in any of the equation for demand or supply.

Equilibrium Quantity = 200 - 10(3.50)

Equilibrium Quantity = 200 - 35

Equilibrium Quantity = 165 million gallons

Sarasota Corporation sells rock-climbing products and also operates an indoor climbing facility for climbing enthusiasts. During the last part of 2017, Sarasota had the following transactions related to notes payable.
Sept. 1 Issued a $16,800 note to Pippen to purchase inventory. The 3-month note payable bears interest of 9% and is due December 1. (Sarasota uses a perpetual inventory system.)
Sept. 30 Recorded accrued interest for the Pippen note.
Oct. 1 Issued a $22,800, 10%, 4-month note to Prime Bank to finance the purchase of a new climbing wall for advanced climbers. The note is due February 1.
Oct. 31 Recorded accrued interest for the Pippen note and the Prime Bank note.
Nov. 1 Issued a $27,600 note and paid $8,100 cash to purchase a vehicle to transport clients to nearby climbing sites as part of a new series of climbing classes. This note bears interest of 6% and matures in 12 months.
Nov. 30 Recorded accrued interest for the Pippen note, the Prime Bank note, and the vehicle note.
Dec. 1 Paid principal and interest on the Pippen note.
Dec. 31 Recorded accrued interest for the Prime Bank note and the vehicle note.
I was wondering how to do the journal entries for...
1. October 1st
2. November 1st
3. November 30th
4. December 31st

Answers

Answer:

Sarasota Corporation

Journal Entries for the following dates:

Oct. 1: Debit Equipment $22,800

Credit 10% Notes Payable (Prime Bank) $22,800

To record the issuance of a 4-month note.

Nov. 1: Debit Vehicle $35,700

Credit Cash $8,100

Credit 6% Notes Payable $27,600

To record the issuance of a 12-month note and cash for purchased vehicle.

Nov. 30: Debit Interest Expense $454

Credit Interest payable $454

To accrue the interests due on the notes.

Dec. 31: Debit  Interest Expense $328

Credit Interest payable $328

To accrue the interests due on the outstanding notes.

Explanation:

a) Data and Analysis:

Sept. 1: Inventory $16,800 9% Notes Payable (Pippen) $16,800

3-month note

Sept. 30: Interest Expense $126 Interest payable $126

Oct. 1: Equipment $22,800 10% Notes Payable (Prime Bank) $22,800

4-month note

Oct. 31: Interest Expense $316 Interest payable 316

Nov. 1: Vehicle $35,700 Cash $8,100 6% Notes Payable $27,600

12-month note

Nov. 30: Interest Expense $454 Interest payable $454

Dec. 1: Notes payable (Pippen) $16,800 Interest payable $378 Cash $17,178

Dec. 31: Interest Expense $328 Interest payable $328

Carlton Office Systems Inc. needs to improve overall organizational efficiency. To accomplish this, the company has implemented a complete redesign of all business systems and reporting hierarchies. During this process, significant cuts were made in middle management staff. What organizational trend is taking place at this company

Answers

Answer:

Reengineering

Explanation:

Reengineering means to redesign the process of the business i.e. systems & organization structure so that the dramatic business performance could be accomplished

Since in the question it is given that company wants to improve its organizational efficiency and for this they have to implement the redesigning of the business system and reporting hierarchies so here the trend would be reengineering

Suppose that in a given month $51 million is deposited into the banking system while $55 million is withdrawn. Also suppose that the Fed has set the reserve requirement at 25 percent and that banks have no excess reserves at the beginning of the month. What is the maximum amount of new checkable-deposit money that can be created (or removed) by the banking system as a result of these deposits and withdrawals?

Answers

Answer and Explanation:

The computation of the maximum amount of new checkable deposit money is given below:

The Net impact represent the decrease in the reserves by

= $55 million - $51 million

= $4 million

Now the

Multiplier = 1 ÷ Reserve requirement

= 1 ÷ 25%

= 4

Now Decrease in money supply is

= $4 million × 4

= -$16 million

Aquatic Equipment Corporation decided to switch from the LIFO method of costing inventories to the FIFO method at the beginning of 2021. The inventory as reported at the end of 2020 using LIFO would have been $53,000 higher using FIFO. Retained earnings at the end of 2020 was reported as $710,000 (reflecting the LIFO method). The tax rate is 35%.

Required:
a. Calculate the balance in retained earnings at the time of the change (beginning of 2009) as it would have been reported if FIFO had been used in prior years.
b. Prepare the journal entry at the beginning of 2009 to record the change in principle.

Answers

Answer:

a. The balance in retained earnings at the time of the change (beginning of 2021) as it would have been reported if FIFO had been used in prior years is $744,450.

b. Debit Inventory for $53,000; Credit Income tax payable for $18,550; and Credit Retained earnings for $34,450.

Explanation:

Note: There is an error in the date stated in the requirements of the question as they are different from the date in the body of the question. The requirements are therefore restated with the correct date before answering the question as follows:

a. Calculate the balance in retained earnings at the time of the change (beginning of 2021) as it would have been reported if FIFO had been used in prior years.

b. Prepare the journal entry at the beginning of 2021 to record the change in principle.

The explanation of the answer is now given as follows:

a. Calculate the balance in retained earnings at the time of the change (beginning of 2021) as it would have been reported if FIFO had been used in prior years.

The effect of LIFO is to overstate the cost of goods sold and understated the retained earnings.

The balance in retained earnings at the time of the change (beginning of 2021) as it would have been reported if FIFO had been used in prior years can therefore be determined as follows:

Inventory understatement net of tax = $53,000 * (100% - Tax rate) = $53,000 * (100% - 35%) = $34,450

Therefore, we have:

Retained earnings under FIFO = Retained earnings as reported + Inventory understatement net of tax = $710,000 + $34,450 = $744,450

Therefore, the balance in retained earnings at the time of the change (beginning of 2021) as it would have been reported if FIFO had been used in prior years is $744,450.

b. Prepare the journal entry at the beginning of 2021 to record the change in principle.

The journal entry will look as follows:

Details                                                       Debit ($)        Credit ($)    

Inventory                                                    53,000

Income tax payable (53,000 * 35%)                                18,550

Retained earnings                                                            34,450

(To record the change in principle.)                                                

Red Co. uses the product cost concept of applying the cost-plus approach to product pricing. Below is cost information for the production and sale of 40,000 units of its sole product. Red Co. desires a profit equal to a 15% rate of return on invested assets of $1,200,000.
Fixed factory overhead cost $80,000.00
Fixed selling and administrative costs 140,000.00
Variable direct materials cost per unit 7.00
Variable direct labor cost per unit 11.00
Variable factory overhead cost per unit 3.00
Variable selling and administrative cost per unit 2.00
What is the markup percentage for the company's product? (Round the answer to two decimal places.)
a 30.30%
b 43.50%
c 40.00%
d 35.60%

Answers

Answer:

b 43.50%

Explanation:

Product Cost = Variable Manufacturing Costs + Fixed Manufacturing Cost

Product Cost = 40,000*($7.00 + $11.00 + $3.00) + $80,000

Product Cost = 40,000*$21 + $80,000

Product Cost = $840,000 + $80,000

Product Cost = $920,000

Markup = Total Selling and Administrative Expenses + Desired Profit

Markup = $2.00*40,000 + $140,000 + $1,200,000*15%

Markup = $80,000 + $140,000 + $180,000

Markup = $400,000

Markup percentage = Markup / Product Cost * 100

Markup percentage = $400,000 / $920,000 * 100

Markup percentage = 0.434783 * 100

Markup percentage = 43.47%

Marginal revenue,graphically is:_________

a. the slope of a line from the origin to a point on the total revenue curve.
b. the slope of a line from the origin to the end of the total revenue curve.
c. the slope of the total revenue curve at a given point.
d. the vertical intercept of a line tangent to the total revenue curve at a given point.
e. the horizontal intercept of a line tangent to the total revenue curve at a given point.

Answers

Answer:

c. the slope of the total revenue curve at a given point.

Explanation:

Cost-volume-profit analysis is also known as the break even analysis, it is an important tool in predicting the volume of activity, the costs to be incurred, the sales to be made, and the profit to be earned is. It is used to determine how changes in differing levels of activities such as costs and volume affect a company's operating income and net income.

Marginal cost can be defined as the additional or extra cost that is being incurred by a company as a result of the production of an additional unit of a product or service.

Generally, marginal cost can be calculated by dividing the change in production costs by the change in level of output or quantity.

Marginal revenue can be defined as the additional amount of money that is gained or generated by a business firm from the sales of an additional unit of a product or service.

Marginal revenue, graphically is the slope of the total revenue curve at a given point.

This ultimately implies that, the change in the value of the total revenue curve at a given point gives the marginal revenue.

Last year, Pastis Productions reported $100,000 in sales and $40,000 in cost of goods sold. The company estimates it would have doubled its sales and cost of goods sold had it allowed customers to buy on credit, but it also would have incurred $50,000 in additional expenses relating to wages, bad debts, and interest. Using these estimates, calculate the amount by which Income from Operations would increase (decrease).

Answers

Answer:

$10,000

Explanation:

The computation of the increase or decrease of income from operations is shown below

Without Credit

Income from Operations is

= $100,000 - $40,000

= $60,000

And,

With Credit

Income from Operations is

= 2 × ($100,000 - $40,000) -$50,000

= $70,000

So, there is Increase in Income from Operations i.e.

= $70,000 - $60,000

= $10,000

The following is the ending balances of accounts at December 31, 2018 for the Valley Pump Corporation Account Title Cash Accounts receivable Inventories Interest payable Marketable securities Land Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipment Copyright (net of amortization) Prepaid expenses (next 12 months) Accounts payable Deferred revenues (next 12 months) Notes payable Allowance for uncollectible accounts Common stock Retained earnings Totals Debits Credits 30,000 66,000 91,000 15,000 54,000 130,000 325,000 105,000 85,000 30,000 17,000 37,000 70,000 25,000 275,000 5,000 250,000 60,000 835,000 835,000
1. The $130,000 balance in the land account consists of $105,000 for the cost of land where the plant and office buildings are located. The remaining $25,000 represents the cost of land being held for speculation.
2. The $54,000 balance in the investment in equity securities account represents an investment in the common stock of another corporation. Valley intends to sell one-half of the stock within the next year.
3. The notes payable account consists of a $110,000 note due in six months and a $165,000 note due in three annual installments of $55,000 each, with the first payment due in August of 2022.
Required:
Prepare a classified balance sheet for the Valley Pump Corporation at December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.)

Answers

Answer and Explanation:

The preparation of the classified balance sheet is presented below:

Valley Pump Corporation

Balance sheet

December 31, 2018

Assets

Current assets

Cash                                    $30,000              

Marketable securities           $27,000

Account receivable             $61,000

Inventory                               $91,000

Prepaid expense                   $37,000

Investments

Marketable securities  $27,000

Land                               $25,000   $52,000

Property, plant & equipment

Land                           $105,000

Buildings                    $325,000

Equipment                  $85,000

Less:

Accumulated depreciation -$135,000

Net property, plant & equipment     $380,000

Intangibles

Copyright                                          $17,000

Total assets                                      $695,000

Liabilities & shareholder equity

Current liabilities

Account payable                        $70,000

Interest payable                          $15,000

Unearned revenue                     $25,000

Note payable                              $110,000

Current maturities                      $55,000

Total current liabilities                $275,000

Long term liabilities

Note payable                               $110,000

Shareholder equity

Common stock           $250,000

Retained earnings      $60,000

Total shareholder equity               $310,000

Total liabilities & shareholder equity $695,000

Working notes

Accumulated depreciation = building + equipment

= $105,000 + $60,000

= $695,000

The note payable is

= $55,000 × 2

= $110,000

Jenny has a $82,500 basis in her 50 percent partnership interest in the JM Partnership before receiving any distributions. This year JM makes a proportionate operating distribution to Jenny of a parcel of land with an $110,000 fair value and a $89,700 basis to JM. The land is encumbered with a $42,850 mortgage (JM's only liability). What is Jenny's basis in the land and her remaining basis in JM after the distribution

Answers

Answer:

$89,700 land basis, $14,225 JM basis.

Explanation:

Calculation to determine Jenny's basis in the land and her remaining basis in JM after the distribution

Based on the information given her basis in the land equal to the amount of $89,700 while are remaining basis in JM is the amount of $14,225, Calculated as:

Predistribution basis in JM $82,500

Add deemed contribution $21,425

(50%*$42,850)

Less: basis allocated to land ($89,700)

Remaining basis in JM $14,225

Therefore her basis in the land and her remaining basis in JM after the distribution are:

$89,700 land basis, $14,225 JM basis.

Computing Straight-Line and Double-Declining-Balance Depreciation
On January 2, 2016, Dechow Company purchases a machine to help manufacture a part for one of its key products. The machine cost $306,180 and is estimated to have a useful life of six years, with an expected salvage value of $32,760.
Compute each year's depreciation expense for 2016 and 2017 for each of the following depreciation methods.
a. Straight-line.
b. Double-declining balance.

Answers

Answer:

a.

2016 =  $45,570

2017 =  $45,570

b.

2016 =  $102,080

2017 =  $68,014

Explanation:

Straight line method

Straight line method charges a fixed amount of depreciation

Depreciation Charge = (Cost - Salvage Value) ÷ Estimated useful life

2016

Depreciation Charge = $45,570

2017

Depreciation Charge = $45,570

Double declining method

Double declining method charges a higher amount of depreciation at the early years and less in the later years

Depreciation Charge = 2 x SLDP x BVSLDP

2016

Depreciation Charge = 2 x 16.67 % x $306,180 = $102,080

2017

Depreciation Charge = 2 x 16.67 % x ($306,180 - $102,080)  = $68,014

A firm has current assets that could be sold for their book value of $22 million. The book value of its fixed assets is $60 million, but they could be sold for $90 million today. The firm has total debt with a book value of $40 million, but interest rate declines have caused the market value of the debt to increase to $50 million. What is this firm's market-to-book ratio

Answers

Answer:

the firm market to book ratio is 1.48

Explanation:

The computation of the market to book ratio is shown below:

The Market values is

= $22 million + $90 million - $50 million

= $ 62 million

And, the Book values is

= $22 million + $60 million - $40 million

= $42 million

Now the firm market to book ratio is

= $62 million ÷ $42 million

= 1.48

Hence, the firm market to book ratio is 1.48

Suppose that you are running a business, and you need some extra space for one year. Your bank offers you a loan of $200,000 at 0% interest. You consider borrowing this amount to buy the building, use it for one year, and then sell the building to pay back the loan. Unfortunately, the economy in which you are operating is experiencing deflation at the rate of 10% per year. After one year, you should be able to sell the building for____.
Suppose that owning the building for a year would earn you $12,000. To decide whether you will be better off by owning it for one year and then selling it, you seek advice from three different people: (1) Your brother says that you should not buy the building because in one year it will cost you $200,000. (2) Your accountant says that you should definitely buy the building because you can borrow $200,000 at zero interest while the building will generate $12,000 in extra income. Then when you sell it, you will be $12,000 richer. (3) Your bookkeeper says that if you sell the building in a year, you will have to come up with more money to pay off the loan than you will make in extra income.
Keeping in mind that the economy experiences deflation at the rate of 10%, who is right?
A. Your bookkeeper is right, because the extra income you will earn will be less than the cost of owning the building for the year.
B. Your brother is correct, because when the nominal interest rate is zero, the cost of a building is its full purchase price.
C. Your accountant is right, because when the nominal interest rate is zero, you do not incur any cost when you take out a loan.
Now, suppose you inherited $200,000 in cash from your uncle who had kept it hidden in his mattress. Assuming the nominal interest rate is -1%, which of the following options will maximize the amount of cash that you have in one year?
A. Holding onto your $200,000 in cash.
B. Buying the building, because you can earn an additional $12,000 in income if you own the building for one year and then sell it.
C. Depositing the cash in the bank, because the 10% rate of deflation makes the value of your dollars fall even more rapidly than 1% per year.
A high real interest rate will keep firms from borrowing to finance investment in capital, but it will not keep firms with cash from investing in capital.
A. False
B. True

Answers

Answer:

Question 1

The building will depreciate by 10% in one year so in one year you will only be able to sell it for:

= 200,000 * ( 1 - 10%)

= $180,000

Question 2.

A. Your bookkeeper is right, because the extra income you will earn will be less than the cost of owning the building for the year.

If you buy the building, you will have to pay back $200,000 in a year.

However, you will only be able to sell the building for $180,000 and you will receive an income of $12,000 for a total of:

= 180,000 + 18,000

= $192,000

This is $8,000 less than the $200,000 you borrowed so you will pay back more than you borrowed.

Question 3

A. Holding onto your $200,000 in cash.

Holding your cash is the best option because investing in the building would lead to a loss of $8,000 after a year.

The bank would also reduce your balance by 1%. It is therefore best to hold the money.

Question 4

A. False

Companies with cash still have to make decisions based on gains and they will stand to gain more if they deposited their money because this would give them more interest profits.

Suppose a hypothetical economy is currently in a situation of deficient aggregate demand of $16 billion. Four economists agree that expansionary fiscal policy can increase total spending and move the economy out of recession, but they are debating which type of expansionary policy should be used. Economist A believes that the government spending multiplier is 4 and the tax multiplier is 2. Economist B believes that the government spending multiplier is 2 and the tax multiplier is 8.

Required:
Compute the amount the government would have to increase spending to close the output gap according to each economist's belief.

Answers

Answer:

Economist A

Government spending multiplier $4billion

Tax multiplier $8billion

Economist B

Government spending multiplier $8billion

Tax multiplier $2billion

Explanation:

Computation for the amount the government would have to increase spending to close the output gap according to each economist's belief

ECONOMIST A

Government spending multiplier=16/4

Government spending multiplier=$4billion

Tax multiplier=16/2

Tax multiplier=$8billion

ECONOMIST B

Government spending multiplier=16/2

Government spending multiplier=$8billion

Tax multiplier=16/8

Tax multiplier=$2billion

Therefore the amount the government would have to increase spending to close the output gap according to each economist's belief are :

ECONOMIST A

Government spending multiplier=$4billion

Tax multiplier=$8billion

ECONOMIST B

Government spending multiplier=$8billion

Tax multiplier=$2billion

In 1999, the Federal Trade Commission allowed Exxon and Mobil to merge. At the time, Exxon and Mobil were the top two firms in their industry, and their merger created the largest corporation in the world. To allow the merger, Exxon and Mobil agreed to sell 2,431 gas stations. Of these, 1,740 were in the mid-Atlantic states, 360 were in California, 319 were in Texas, and 12 were in Guam.

Why would the U.S. government require Exxon and Mobil to divest themselves of so many gas stations in localized parts of the country to be willing to allow the merger to occur?

a. Because these geographic regions had too many gas stations.
b. To protect consumers from inappropriate price decreases.
c. To ensure competition in these regions and protect consumers from unwarranted price increases.
d. To ensure that Exxon-Mobil would earn fair profits in these geographic areas.

Answers

Answer:

1999 Merger of Exxon and Mobil

The reason that made the U.S. government to require Exxon and Mobil to divest themselves of so many gas stations in localized parts of the country to be willing to allow the merger to occur is:

c. To ensure competition in these regions and protect consumers from unwarranted price increases.

Explanation:

The agreement to sell so many gas stations in localized parts of the country was to forestall antitrust lawsuits.  It was also made to protect consumers from unwarranted price increases, allowing more competition in the affected areas, where ExxonMobil owed too many gas stations.

The reason why the US would require these two companies to divest themselves is because to ensure competition in these regions and protect consumers from unwarranted price increases.

The answer to this question is option c. Sometimes when two companies merge into one, they could become too powerful. When this is the case, they may end up driving out all their competitors from the market.

At this point, a monopoly may arise from the companies. When a monopoly arises, they would be able to set the price to any amount that they want. This divest option by the government was to ensure the protection of consumers from a situation of price hikes.

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According to behavioral​ economics, consumers A. do not always behave rationally because they ignore sunk costs. B. always behave rationally because they take into account monetary costs and nonmonetary opportunity costs. C. do not always behave rationally because they fail to ignore sunk costs . D. always behave rationally because they are overly optimistic about their future behavior. E. do not always behave rationally because they take into account nonmonetary opportunity costs.

Answers

Answer:

A. do not always behave rationally because they ignore sunk costs.

Explanation:

Behavioral economics can be defined as a branch of economics that typically deals with the study of market transactions in which consumers of goods and services make choices or buying decisions that doesn't look economically rational.

According to behavioral​ economics, consumers do not always behave rationally because they ignore sunk costs i.e being overly optimistic about their behavior in the future while ignoring the fact that the money has been spent on purchase and cannot be recovered again.

Sunk cost can be defined as a cost or an amount of money that has been spent on something in the past and as such cannot be recovered. Thus, because a sunk cost has been incurred by an individual or organization it can't be recovered and as such it is irrelevant in the decision-making process such as investments, projects etc.

Basically, sunk costs are referred to as fixed costs.

Management of Mittel Company would like to reduce the amount of time between when a customer places an order and when the order is shipped. For the first quarter of operations during the current year the following data were reported: Inspection time 0.3 days Wait time (from order to start of production) 16.6 days Process time 2.8 days Move time 1.0 days Queue time 4.2 days
1. Compute the throughput time.
2. Compute the manufacturing cycle efficiency (MCE) for the quarter. (Round your answer to 2 decimal places.)
3. What percentage of the throughput time was spent in non–value-added activities? (Enter your answer as a percentage (i.e., 0.12 should be entered as 12).)
4. Compute the delivery cycle time.
5. If by using Lean Production all queue time during production is eliminated, what will be the new MCE? (Round your percentage answer to 1 decimal place (i.e., 0.123 should be entered as 12.3).)

Answers

Answer:

1. Throughput time = Process time + Inspection time + Move time + Queue time

Throughput time = 2.8 + 0.3 + 1 + 4.2

Throughput time = 8.3 days

2. Manufacturing cycle efficiency = Value added time/Throughput time

Manufacturing cycle efficiency = 2.8/8.3

Manufacturing cycle efficiency = 0.3373493976

Manufacturing cycle efficiency = 0.34

3. Percentage of the throughput time spent in non-value-added activities:

= 1 - 0.34

= 0.66

= 66%

4. Delivery cycle time = Wait time + Throughput time

Delivery cycle time = 16.6 + 8.3

Delivery cycle time = 24.9

Delivery cycle time = 25 days

5. New throughput time = Process time + Inspection time + Move time + Queue time

New throughput time = 2.8 + 0.3 + 1

New throughput time = 4.1

Manufacturing cycle efficiency = Value added time/Throughput time

Manufacturing cycle efficiency = 2.8/4.1

Manufacturing cycle efficiency = 0.6829268292682927

Manufacturing cycle efficiency = 68.30%

Market screening is a method of market analysis and assessment that permits management to identify a small number of desirable markets by eliminating those judged to be less attractive.
When considering initial entry into international markets, or later expansion of international presence, companies Inust screen the large number of potential markets to identify the smaller subset of most promising candidates. This exercise examines one type of market screening, called country screening, and reviews the steps in this screening process as well as key tasks and considerations in each step.
Place the country screening steps in the order they occur, from first to last.
Rank the options below
1. Assess competitive forces such as the number, size, and financial strength of the competitors.
2. Assess economic and financial forces such as trends in inflation, currency exchange rates, and interest rates.
3. Assess sociocultural forces associated with doing business in a particular area or country,
4. Assess basic need potential of specific goods or services
5. Assess political and legal forces such as profit remittance barriers and policy stability
6. Assess prospective markets through personal visits to those markets with the best potential

Answers

Answer: See explanation

Explanation:

The country screening steps when placed accordingly from the first to the last will be:

1. Assess basic need potential of specific goods or services.

2. Assess economic and financial forces such as trends in inflation. currency exchange rates, and interest rates.

3. Assess political and legal forces such as profit remittance barriers and policy stability.

4. Assess sociocultural forces associated with doing business in a particular area or country.

5. Assess competitive forces such as the number, size, and financial strength of the competitors.

6. Assess prospective markets through personal visits to those markets with the best potential.

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