The estimated useful life of the machine is 6 years. This means that over the course of 6 years, with annual depreciation of $2,800, the machine's value will be fully depreciated, and its book value will reach the residual value of $5,600.
To calculate the estimated useful life, we need to determine the total depreciation expense over the useful life of the machine. The formula for straight-line depreciation is:
Depreciation Expense = (Cost - Residual Value) / Useful Life
Given that the cost is $22,400 and the residual value is 25% of the cost, we can calculate the residual value as:
Residual Value = 25% * $22,400 = $5,600
Substituting these values into the formula, we have:
$2,800 = ($22,400 - $5,600) / Useful Life
To isolate the useful life, we can rearrange the formula:
Useful Life = ($22,400 - $5,600) / $2,800
Simplifying the equation:
Useful Life = $16,800 / $2,800
Useful Life = 6 years
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Group PSAplans its US return Group PSA, headquartered in Paris, France is the second largest European-based auto-manufacturer in the world. In early 2000s, the group had to eliminate its American operations due to extraordinary price competition resulting from a lack of unique features, the ease of entry into the market by new auto makers, well-financed local (US) auto makers and a series of mergers, acquisitions and joint ventures happening in the automobile industry in the 1990 s. The group has been plotting to come back to the US due to post-COVID demands of its most popular and recognized brands Peugeot and Citroën. Group PSA has recently acquired Opel, and Vauxhall from GM and planning to either acquire or partner with European brands (such as, Fiat and Renault) and Japanese brands (Lexus and Mazda CX60), which have large presences in the US and have a profitable market share in the US auto industry. PSA has invested heavily in research and development on product innovation (in particular, to come up with unique features) and promotion as well as meeting the US safety and emissions rules. In addition, to tackle the exceptionally competitive US market, the company has opened its US headquarters in Atlanta with a core team to build its US strategy, particularly deciding on acquiring or partnering with either or both European and Japanese brands. Questions A. What factors led to the troubles of the Group PSA in the 1990s? B. What can PSA gain by entering the US market? C. Which partner(s) would be more strategic and why?
A. The troubles faced by Group PSA in the 1990s were primarily caused by a combination of factors:
1. Lack of unique features: Group PSA faced intense price competition in the US market due to a lack of distinct features in their vehicles. This made it difficult for them to differentiate themselves from their competitors.
2. Ease of entry for new auto makers: The US market allowed for easy entry by new auto manufacturers, leading to increased competition for Group PSA. This further intensified the price competition they faced.
3. Well-financed local auto makers: Local US auto manufacturers had significant financial resources, allowing them to invest heavily in product development and marketing. This gave them a competitive advantage over Group PSA.
4. Mergers, acquisitions, and joint ventures: The automobile industry in the 1990s witnessed a series of mergers, acquisitions, and joint ventures. This led to the consolidation of resources and market share among competitors, making it challenging for Group PSA to compete effectively.
B. By entering the US market, Group PSA can gain several advantages:
1. Increased market share: The US auto market is one of the largest in the world. By establishing a presence in the US, Group PSA can tap into a large customer base and potentially increase its market share.
2. Profitability: The US market offers the potential for high profitability. Group PSA's popular and recognized brands, such as Peugeot and Citroën, can leverage the post-COVID demands to generate significant revenue and profits.
3. Access to technology and innovation: Partnering with or acquiring European and Japanese brands, which already have a presence in the US, can provide Group PSA access to advanced technology and innovative features. This can help them enhance their product offerings and compete effectively in the market.
4. Meeting safety and emissions rules: Group PSA has heavily invested in research and development to meet US safety and emissions regulations. By entering the US market, they can demonstrate their compliance with these rules, which is essential for gaining customer trust and maintaining a competitive edge.
C. The choice of a strategic partner(s) for Group PSA depends on various factors, including:
1. Complementary strengths: Group PSA should consider partnering with brands that have complementary strengths, such as technological expertise, market share, or a strong distribution network. This can help them leverage each other's resources and enhance their competitiveness in the US market.
2. Market presence: Brands with a significant market presence in the US, such as Fiat, Renault, Lexus, and Mazda CX60, can provide Group PSA with immediate access to a customer base and distribution channels. This can accelerate their market entry and expansion.
3. Brand reputation: Partnering with brands that have a positive brand reputation in the US can help Group PSA gain credibility and trust among consumers. This can contribute to the success of their products in the competitive US market.
4. Alignment of values and objectives: Group PSA should assess whether potential partners share similar values and long-term objectives. A strategic partnership should be based on a mutual understanding and alignment of goals to ensure a successful and sustainable collaboration.
Ultimately, the choice of a strategic partner(s) for Group PSA should be based on a thorough evaluation of these factors to maximize the potential benefits and synergies for both parties.
SHORT ANSWER:
A. Group PSA faced troubles in the 1990s due to a lack of unique features, easy entry for new auto makers, well-financed local US auto makers, and industry mergers and acquisitions.
B. By entering the US market, Group PSA can gain increased market share, profitability, access to technology and innovation, and compliance with safety and emissions rules.
C. The choice of a strategic partner(s) for Group PSA should consider complementary strengths, market presence, brand reputation, and alignment of values and objectives.
ming Restoration Company completed the following selected transactions during July 20Y1: July 1. Established a petty cash fund of \$1,200. 12. The cash sales tor the day, according to the cash register records, totaled $8,356. The actual cash recelved from cash sales was $8,389. 31. Petty cash on hand was $217. Replenished the petty cash fund for the following disbursements, each evidenced by a petty cash receipt: July 3. Store supplies, $510. 7. Express charges on merchandise sold, $90 (Delivery Expense). 9. Olfice supplies, $30. 13. Office supplies, $35. 19. Postage stamps, $50 (Otfice Supplies). 21. Repair to ottice file cabinet lock, $60 (Miscellaneous Administrative Expense). 22. Postage due on special delivery letter, $28 (Miscellarteous Administrative Expense). 24. Express charges on merchandise sold, $135 (Delivery Expense). 30. Otfice supplies, $25. July 31. The cash sales for the day, according to the cash register records, totaled $10,289. The actual cash received from cash sales was $10,275. 31. Decreased the petty cash fund by $100. Required: Journalize the transactions. General Journal General Joumal
To journalize the transactions for Ming Restoration Company, you will need to record each transaction in the general journal.
What is the process?Here is the step-by-step process:
1. On July 1, the company established a petty cash fund of $1,200. Since this transaction is not mentioned in the subsequent list, we do not need to journalize it separately.
2. On July 12, the cash sales according to the cash register records were $8,356, but the actual cash received was $8,389. This means there was an excess of $33 in cash. We will record this as follows:
Debit: Cash (increase) $33
Credit: Sales (increase) $33
3. On July 31, the cash sales according to the cash register records were $10,289, but the actual cash received was $10,275. This means there was a shortage of $14 in cash. We will record this as follows:
Debit: Sales (decrease) $14
Credit: Cash (decrease) $14
4. Now let's focus on the petty cash transactions. On July 3, the company purchased store supplies for $510. We will record this as follows:
Debit: Store Supplies $510
Credit: Petty Cash $510
5. On July 7, the company incurred express charges on merchandise sold, amounting to $90. We will record this as follows:
Debit: Delivery Expense $90
Credit: Petty Cash $90
6. On July 9, the company purchased office supplies for $30. We will record this as follows:
Debit: Office Supplies $30
Credit: Petty Cash $30
7. On July 13, the company purchased additional office supplies for $35. We will record this as follows:
Debit: Office Supplies $35
Credit: Petty Cash $35
8. On July 19, the company bought postage stamps for $50. Since this is considered an office supply, we will record it as follows:
Debit: Office Supplies $50
Credit: Petty Cash $50
9. On July 21, the company repaired the office file cabinet lock, incurring a cost of $60. We will record this as follows:
Debit: Miscellaneous Administrative Expense $60
Credit: Petty Cash $60
10. On July 22, the company paid postage due on a special delivery letter, totaling $28. We will record this as follows:
Debit: Miscellaneous Administrative Expense $28
Credit: Petty Cash $28
11. On July 24, the company incurred additional express charges on merchandise sold, amounting to $135. We will record this as follows:
Debit: Delivery Expense $135
Credit: Petty Cash $135
12. On July 30, the company purchased more office supplies for $25. We will record this as follows:
Debit: Office Supplies $25
Credit: Petty Cash $25
13. Finally, on July 31, the company decreased the petty cash fund by $100. We will record this as follows:
Debit: Petty Cash $100
Credit: Cash $100
These are the journal entries for the selected transactions. Remember to always record the debit and credit amounts correctly and in the appropriate accounts.
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(Economic Law) In the famous case of Taylor v. Caldwell, 3 B. & S. 826, 122 Eng. Rep. 309 (K.B. 1863), the plaintiff, Taylor, leased the defendant’s concert hall for four nights at 100 pounds sterling to be paid to Caldwell after each performance. Shortly after the first performance, the concert hall was destroyed by fire. Taylor sued Caldwell for breach of contract and asked the court to award him as damages the expenses he incurred in preparation for the last three performances. The defendant sought to be excused from performing on the ground that it was literally impossible for him to perform the contract after the fire.
a. What factors enable one party to prevent a risk better than another?
b. What factors enable one party to insure against a risk better than another?
c. Do these factors tend to converge or diverge, or is their association merely coincidental? d. How would you decide this case in light of economic analysis?
In the case of Taylor v. Caldwell, the plaintiff sought damages for breach of contract after the concert hall, leased from the defendant, was destroyed by fire. The defendant claimed it was impossible to perform the contract. Economic analysis can provide insights into factors that enable parties to prevent risks and insure against them, as well as the decision-making in this case.
a. Factors that enable one party to prevent a risk better than another can include their level of control over the circumstances, access to information, resources, and expertise.
For example, if a party has better fire prevention measures, such as fire alarms or sprinkler systems, they may be more capable of preventing the risk of fire compared to a party without such measures.
Similarly, if a party has superior knowledge or experience in risk management, they may be better equipped to prevent or mitigate potential risks.
b. Factors that enable one party to insure against a risk better than another involve their ability to assess and manage risk through insurance mechanisms.
This can depend on factors such as their financial resources, access to insurance markets, understanding of risk assessment, and the availability of suitable insurance products.
A party with greater financial capacity and a broader range of insurance options can potentially secure better coverage against risks.
c. The factors enabling risk prevention and risk insurance can either converge or diverge depending on specific circumstances. In some cases, parties with better risk prevention measures may also have greater access to insurance options.
However, it is also possible for parties to specialize in risk prevention or risk insurance, leading to a divergence in their respective capabilities.
d. In light of economic analysis, the decision in this case would depend on the specific contractual terms and applicable legal principles. If the contract included clauses addressing unforeseen events or force majeure, the court might consider the doctrine of impossibility or frustration of purpose.
Economic analysis can inform the assessment of the parties' obligations, reasonable expectations, and potential remedies. For example, if the contract allocated the risk of loss to one party or if the destruction of the concert hall was deemed an unforeseeable event, the defendant might be excused from performance.
However, if the contract did not address such contingencies, the court might assess the reasonableness of the parties' actions, their efforts to prevent or mitigate risks, and the appropriate allocation of damages based on economic principles.
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Rafael Company borrowed $24,000 from Bank of jane on December 1, 2019, and signed a 90 day. 39% Notes Payable. If Rafael's accounting period ends on December 31, 2019, which of the following will not be true for Rafael Company? Select one: A. On March 1, 2020, Rafael will debit Interest Payable for $320 B. On March 1, 2020, Rafael will debit Interest Expense for 5320 C. On December 31, 2019. Rafael will credit Interest Payable for $160 D. On December 31, 2019, Rafael will debit Interest Expense for $160
The correct answer is Option B.
Option A: On March 1, 2020, Rafael will debit Interest Payable for $320.
The formula to calculate the interest payable is as follows:
Interest Payable = Principal Amount × Annual Rate × Time Period in Days
= (90 / 360) × Principal Amount
Interest Payable = (90 / 360) × $24,000 × 39%
= $585
On March 1, 2020, Rafael will have to pay interest of $585. Hence, Rafael will debit Interest Payable for $585.
Option B: On March 1, 2020, Rafael will debit Interest Expense for $5320.
The formula to calculate interest expense is as follows:
Interest Expense = Principal Amount × Annual Rate × Time Period in Days
Period in Days = 90
Interest Expense = $24,000 × 39% × 90 / 360
= $936
As the accounting period of Rafael Company ends on December 31, 2019, Rafael will not debit interest expense for $5,320 on March 1, 2020.
Thus, Option B is incorrect.
Option C: On December 31, 2019, Rafael will credit Interest Payable for $160.The formula to calculate the interest payable is as follows:
Interest Payable = Principal Amount × Annual Rate × Time Period in Days
Period in Days = 30 (i.e., December has 31 days and Rafael borrowed the money on December 1, 2019)
Interest Payable = $24,000 × 39% × 30 / 360
= $160
Therefore, Rafael will credit interest payable for $160 on December 31, 2019.
Hence, Option C is correct.
Option D: On December 31, 2019, Rafael will debit Interest Expense for $160.The interest expense for 30 days can be calculated as follows:
Interest Expense = Principal Amount × Annual Rate × Time Period in Days
Period in Days = 30 (i.e., December has 31 days and Rafael borrowed the money on December 1, 2019)
Interest Expense = $24,000 × 39% × 30 / 360
= $160
Therefore, Rafael will debit interest expense for $160 on December 31, 2019.
Hence, Option D is correct.
In conclusion, option B will not be true for Rafael Company as Rafael will not debit interest expense for $5,320 on March 1, 2020.
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1. from a customer perspective in india, what are reasons you would book and stay at a oyo hotel? 2. what are some ideas to maintain a quality and consistent customer experience at oyo hotels? 3. for you, what are the plusses and minuses of working in a hotel or other hospitality organization?
Working in a hotel or hospitality organization can offer rewarding experiences and career opportunities, but it also comes with its own set of challenges and demands.
1. Reasons for booking and staying at an OYO hotel in India from a customer perspective:
- Affordable pricing: OYO hotels offer competitive pricing, making them an attractive for budget-conscious travelers.
- Convenient locations: OYO has a wide network of hotels in various cities and neighborhoods, providing customers with convenient s close to their desired destinations.
- Quality assurance: OYO ensures certain quality standards across its properties, giving customers confidence in the level of service and amenities provided.
- Ease of booking: OYO's user-friendly website and mobile app make it easy for customers to search, book, and manage their hotel reservations.
- OYO's reputation: OYO has gained recognition and popularity in India, making it a trusted brand for many travelers seeking comfortable and reliable accommodations.
2.Ideas to maintain a quality and consistent customer experience at OYO hotels:
- Consistent training: Implement thorough training programs for staff to ensure they have the necessary skills and knowledge to deliver high-quality service consistently.
- Quality inspections: Regularly assess the properties to maintain and improve standards, addressing any maintenance or cleanliness issues promptly.
- Guest feedback: Encourage guests to provide feedback on their experiences, actively listen to their suggestions, and make necessary improvements based on their feedback.
- Standardized processes: Establish standardized operating procedures across OYO hotels to ensure consistency in service delivery, check-in/check-out processes, and room cleanliness.
- Personalization: Tailor the guest experience based on individual preferences, such as offering personalized amenities or recognizing loyal customers.
3. Pluses and minuses of working in a hotel or other hospitality organization:
Pluses:
- Opportunities for career growth: The hospitality industry often provides various career advancement opportunities, allowing individuals to progress within the organization or explore different roles.
- Dynamic work environment: Working in a hotel or hospitality organization can be exciting and dynamic, with each day presenting new challenges and opportunities to interact with guests from diverse backgrounds.
- Teamwork and interpersonal skills development: Hospitality jobs require collaboration and strong interpersonal skills, providing opportunities to develop effective communication and teamwork abilities.
- Exposure to different cultures: Working in a hotel or hospitality organization allows for interactions with guests from different countries and cultures, fostering a global perspective.
Minuses:
- Long and irregular working hours: The hospitality industry often demands working on weekends, holidays, and irregular shifts, which can impact work-life balance.
- High-pressure situations: Dealing with demanding guests or handling challenging situations, such as complaints or emergencies, can be stressful.
- Physically demanding tasks: Some roles in the hospitality industry involve physical labor, such as housekeeping or food service, which can be physically demanding.
- Seasonal fluctuations: In some regions, hospitality business experience seasonal fluctuations, leading to periods of high demand followed by quieter periods, which may impact job stability.
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Consider the following information for the Smith family. The Smiths are a married couple with 4 children. State Income Tax withheld $3,250. Property tax on their home was $3,800. Mortgage Interest paid on their home was $9,000. Charitable Gifts amounted to $3,000 Determine the amount the Smiths entered on Line 12 on schedule A.
The amount the Smiths entered on Line 12 on schedule A is $9,800. The Schedule A form is used to report itemized deductions for individual taxpayers in the United States. The purpose of the Schedule A form is to list various tax deductions and credits that the taxpayer can claim on their tax return.
The form is divided into different sections that include charitable contributions, mortgage interest, state and local taxes, and other miscellaneous deductions.
In order to calculate the amount entered on line 12 of schedule A, we need to add the following details;
State Income Tax withheld $3,250
Property tax on their home was $3,800
Mortgage Interest paid on their home was $9,000
Charitable Gifts amounted to $3,000
First, we need to add the Property tax and the State Income tax;
Property tax + State Income tax = $3,800 + $3,250 = $7,050
Then, we add the amount from Mortgage Interest paid to the result from above;
Mortgage Interest + (Property tax + State Income tax) = $9,000 + $7,050 = $16,050
Finally, we add the Charitable gifts amount to the above result;
Total Amount = Mortgage Interest + (Property tax + State Income tax) + Charitable Gifts
= $16,050 + $3,000 = $19,050
Therefore, the amount the Smiths entered on Line 12 on schedule A is $9,800.
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A Farmer obtains a loan of $800,000 with interest of 18% CS. The loan will have a partial grace period of 1.5 years and will be paid through leveled semi-annual installments over a period of 6 years. a) The value of each payment b) The unpaid balance just after the 7th installment c) Total interest paid d) Prepare an amortization schedule up to the installment In the problem, suppose that the farmer wishes to repay the financial obligation in semi-annual level installments with a total grace period a) Calculate the value of the installment b) Unpaid Capital after installment 9 c) The payment schedule up to installment 5 for this situation
Given that the farmer obtains a loan of $800,000 with interest of 18% CS. The loan will have a partial grace period of 1.5 years and will be paid through leveled semi-annual installments over a period of 6 years.
We are to determine the value of each payment, the unpaid balance just after the 7th installment, total interest paid, and also prepare an amortization schedule up to the installment. We are also supposed to calculate the value of the installment, the unpaid Capital after installment 9 and the payment schedule up to installment 5 for this situation.
We know that semi-annual interest rate i = 18/2 = 9%Grace period = 1.5 yearsTotal period for repayment = 6 yearsGrace period in semi-annual terms = 3 semi-annual periodsTotal number of semi-annual periods in which the loan has to be repaid = 6 x 2 = 12 semi-annual periodsPartial grace period + partial installment = 0.5 + 1 = 1.5 semi-annual periods.
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Financial Accounting Question
Question 8
On 1 April 1987 FRY Ltd. purchased 10 000 ordinary shares of R1 each in TLS
Ltd. at a cost of R20 500.
On 1 September 1987 TLS declared and paid a dividend of 15 cents per share
for the year ended 30 June 1987.
On 1 November 1987 TLS gave its members the right to subscribe for 1
ordinary share of R1 for every eight held on 1 November 1987 at a price of
150 cents per share.
On 15 November 1987 FRY purchased for 40 cents per share the rights of
another shareholder in TLS to subscribe for 750 shares under the rights issue.
On 30 November 1987 FRY applied and paid for all the shares in TLS to which
it was entitled.
On 8 September 1988 TLS declared and paid a dividend of 15 cents per share
for the year ended 30 June 1988 on all the shares, including those issued in
1987.
On 1 October 1988 FRY sold 4 500 ordinary shares in TLS for R9 875.
The accounting year of FRY ends on 31 December.
FRY does not make apportionments of dividends received or receivable.
When part of a holding of shares is sold, it is the practice of FRY to calculate
the cost of the shares sold as an appropriate part of the average cost of all
shares held at the date of sale.
Required:
You are required to show the investment account in the books of FRY for the
two years ending 31 December 1987 and 31 December 1988, bringing down
the balance at the end of each year. (20)
Average cost is calculated as R2.05
Investment account for FRY Ltd. for the two years ending 31 December 1987 and 1988 is given below:
The average cost method is used by FRY to calculate the cost of shares sold. The dividend is not apportioned in FRY. When shares are sold, the average cost of all the shares held at the date of sale is calculated, and the cost of shares sold is calculated accordingly.
Calculation of the average cost of shares:From the table above, we can see that the total cost of 10,000 shares of TLS is R20,500. Therefore, the average cost per share is calculated as:
Average cost = Total cost / Number of shares= R20,500 / 10,000
= R2.05
Investment account for 31 December 1987:
Investment account for 31 December 1988:
Therefore, the investment account in the books of FRY for the two years ending 31 December 1987 and 31 December 1988, bringing down the balance at the end of each year is given above.
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. 2. Briefly summarize the threats and opportunities you see for Huawei in its general environment. Consider economic, technological, sociocultural, demographic, and political/legal forces, if applicable.
Huawei faces various threats and opportunities in its general environment. By closely monitoring and adapting to economic, technological, sociocultural, demographic, and political/legal forces, Huawei can navigate these challenges and leverage the opportunities to maintain its competitive position in the market.
Let's analyze these factors step-by-step:
1. Economic Forces:
- Threat: Economic fluctuations and recessions can impact consumer spending, leading to reduced demand for Huawei products and services.
- Opportunity: The growth of emerging markets, such as India and Southeast Asia, provides an opportunity for Huawei to expand its customer base and increase revenue.
2. Technological Forces:
- Threat: Rapid technological advancements and fierce competition in the industry pose a challenge for Huawei to continuously innovate and stay ahead of its competitors.
- Opportunity: The increasing adoption of 5G technology presents a significant opportunity for Huawei to leverage its expertise and establish itself as a leader in the industry.
3. Sociocultural Forces:
- Threat: Public concerns over data privacy and security may affect consumer trust in Huawei's products and services.
- Opportunity: Huawei can capitalize on the growing demand for eco-friendly and sustainable products by developing and promoting environmentally conscious initiatives.
4. Demographic Forces:
- Threat: Aging populations in some markets may result in decreased demand for smartphones and other consumer electronics.
- Opportunity: The rise of a tech-savvy younger generation presents an opportunity for Huawei to target and cater to their specific needs and preferences.
5. Political/Legal Forces:
- Threat: Geopolitical tensions and trade disputes between countries can impact Huawei's access to certain markets, affecting its growth and expansion plans.
- Opportunity: Collaborating with governments and local entities to establish partnerships and comply with local regulations can help Huawei mitigate legal challenges and gain a competitive edge.
In summary, Huawei faces both threats and opportunities in its general environment. By closely monitoring and adapting to economic, technological, sociocultural, demographic, and political/legal forces, Huawei can navigate these challenges and leverage the opportunities to maintain its competitive position in the market.
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based on decades of working with clients to create new designs and innovations, david kelly believes that_____.
David Kelly's belief is that creativity is a universal human capability that can be harnessed and developed through practice, mindset, and a supportive environment. He sees creativity as an essential tool for innovation and problem-solving in various fields.
Based on decades of working with clients to create new designs and innovations, David Kelly believes that creativity is a fundamental human trait that can be nurtured and developed in individuals. He believes that everyone has the potential to be creative and that it is not limited to a select few. Kelly emphasizes the importance of a supportive environment and the freedom to explore ideas without fear of failure. He encourages a mindset of "design thinking," which involves empathy, iteration, and collaboration to solve complex problems and create meaningful solutions.
Kelly also emphasizes the value of prototyping and experimentation in the design process. He believes that by creating tangible representations of ideas, individuals can better understand and refine their concepts. He encourages a hands-on approach and learning through making.
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how to get out of a car lease early without penalty
To get out of a car lease early without penalty, review your lease agreement, contact the leasing company, and explore options like lease transfer or buyout.
Getting out of a car lease early without penalty can be challenging, but it is not impossible. Here's a step-by-step explanation:
1. Review your lease agreement: Carefully read through your lease agreement to understand the terms and conditions. Look for any clauses related to early termination and penalties.
2. Contact the leasing company: Reach out to the leasing company and explain your situation. They may be willing to work with you and provide options such as lease transfer or lease buyout.
3. Explore lease transfer or buyout: Lease transfer involves finding someone to take over your lease payments. Many websites facilitate lease transfers. Lease buyout involves paying off the remaining lease balance and returning the car to the leasing company.
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Sako Company's Audio Division produces a speaker that is used by manufacturers of various audio products. Sales and cost data on the speaker follow: \( \begin{array}{lr}\text { Selling price per unit
The table given below shows the sales and cost data of Sako Company’s Audio Division. It produces speakers that are used by various manufacturers of audio products. Sales and cost data:
Selling price per unit: $22Variable cost per unit:
$14Total fixed costs per year: $74,200
a) The contribution margin is defined as the selling price per unit minus variable cost per unit. This margin is used to cover fixed costs of the company and provides profit to the company.
Contribution margin per unit = Selling price per unit - Variable cost per unit= $22 - $14= $8
Therefore, the contribution margin per unit of speaker is $8.
b) Break-even point is the level of sales where total revenue equals total costs, and there is no profit or loss. It can be calculated as follows:
Break-even point (in units) = Total fixed costs ÷ Contribution margin per unit= $74,200 ÷ $8= 9275 units
Therefore, the annual break-even point (in dollar sales) is:
Break-even point (in dollar sales) = Break-even point (in units) × Selling price per unit= 9275 × $22= $204,050
Hence, the annual break-even point in dollar sales is $204,050.
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For an economy to produce at a point beyond its production possibilities curve, the economy can:
A. use its current set of resources more efficiently
B. charge lower prices
C. charge higher prices
D. increase its economic resources (over time)
For an economy to produce at a point beyond its production possibilities curve, the economy can use its current set of resources more efficiently. To go beyond the production possibility curve, the economy needs to employ its existing resources more efficiently.
The production possibilities frontier is a graphic representation of a nation's or economy's production capacity. This framework outlines the maximum output of two items that a country can create by using its existing resources with maximum efficiency.
The production possibilities curve depicts the maximum output possibilities of two items that a country can produce with its current resources in economics. Points beyond the production possibility curve indicate that the economy has surpassed its full production potential.
Instead of wasting resources, it should utilize them more efficiently to create more output. This concept is referred to as full utilization of resources. An economy that is producing more than its maximum capacity on its production possibility curve is considered to be a highly efficient economy.
However, the efficiency gains from using existing resources more efficiently are eventually limited. This is because a country cannot infinitely increase the production of both products without causing tradeoffs and a decline in overall efficiency.
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Farah owns a beauty parlour. She paying $30,000 a year for rent and utilities for her store. She has two part-time workers and pay them each $20,000 a year. She buys shoes from a wholesaler for $25 and sells them for $50. How many shoes does Farah must sell to reach the breakeven point? Multiple Choice 1600 2.800 1,000
Previous question
To calculate the break-even point, we must find the total cost, revenue, and the contribution margin of Farah's beauty parlor. Here is the solution to your problem:Calculation of total costFixed cost: Fixed cost includes expenses that do not change with an increase or decrease in the number of products produced or sold. The fixed cost includes the rent and utilities for Farah's beauty parlor.Fixed costs = Rent + Utilities= $30,000Variable cost: Variable costs change with an increase or decrease in the number of products produced or sold. The variable cost in this case is the cost of wages paid to the part-time workers.Variable cost = Wages per employee x No. of employees= $20,000 x 2= $40,000Total cost = Fixed cost + Variable cost= $30,000 + $40,000= $70,000 Calculation of contribution margin The contribution margin is the difference between the selling price of a product and its variable cost per unit. In this case, the contribution margin is the difference between the selling price of a pair of shoes and its variable cost per pair.
Selling price per pair of shoes = $50Variable cost per pair of shoes = $25Contribution margin per pair of shoes = Selling price - Variable cost= $50 - $25= $25 Calculation of break-even point Break-even point is the point at which the total cost and total revenue are equal. To calculate the break-even point, we must divide the total cost by the contribution margin per pair of shoes. Break-even point (in pairs of shoes)= Total cost/Contribution margin per pair of shoes= $70,000/$25= 2800 pairsTherefore, Farah must sell 2,800 pairs of shoes to reach the break-even point. The correct option among the given multiple-choice options is option B, 2,800.
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If a conventional loan is at 16% and the VA loan is at 15%? The lender will want to charge how many points to increase the yield on investment?
A. Six points
B. Eight points
C. Four points
D. Two points
B. Eight points
To increase the yield on investment when the interest rate on a conventional loan is 16% and the interest rate on a VA loan is 15%, the lender would typically want to charge eight points.
Points refer to upfront fees charged by the lender as a percentage of the loan amount. These points increase the lender's yield or return on investment, compensating for the lower interest rate on the VA loan compared to the conventional loan.In mortgage lending, points are a form of prepaid interest that borrowers can pay to lenders at closing. Each point represents 1% of the total loan amount. Lenders may charge points to increase their yield on investment, especially when offering lower interest rates.
In the given scenario, where the interest rate on a conventional loan is 16% and the interest rate on a VA loan is 15%, the lender would want to charge eight points. By charging eight points, the lender can increase their overall return on investment, compensating for the lower interest rate on the VA loan.
Charging points allows lenders to generate additional upfront revenue, which can offset the reduced interest income over the life of the loan. The number of points charged can vary based on market conditions, loan terms, and individual lender practices. It is important for borrowers to carefully evaluate the overall cost of the loan, including the impact of points, when considering different financing s.
It's worth noting that the decision to charge points is at the discretion of the lender, and borrowers should always compare multiple loan offers, including different rates and point combinations, to determine the most suitable and cost-effective for their specific needs and financial situation.
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what would be the best example of marginal analysis? group of answer choices burger king raises the price of their hamburgers by 5 cents. you either go to all the charlotte hornet games or none a university doubles its tuition rate harris teeter offers a buy-one-get-one-free sale on apples
The best example of marginal analysis among the given options is the last option. Hence the answer is, Harris Teeter offers a buy-one-get-one-free sale on apples.
Marginal analysis involves examining the costs and benefits of producing or consuming one additional unit of a good or service. In this case, the buy-one-get-one-free sale on apples at Harris Teeter presents a situation where consumers can analyze the marginal benefit of acquiring an additional unit of apples.
By taking advantage of the offer, consumers can evaluate whether the additional benefit of receiving a free apple outweighs the cost of purchasing one apple. They can compare the marginal benefit (getting an extra apple) to the marginal cost (the price of one apple).
If the marginal benefit is higher than the marginal cost, it would be advantageous for consumers to participate in the buy-one-get-one-free sale. On the other hand, if the marginal benefit is lower than the marginal cost, consumers may choose not to take advantage of the offer.
This example demonstrates how individuals can apply marginal analysis to assess the incremental benefits and costs of their decisions, enabling them to make rational choices based on their preferences and circumstances.
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aa single individual earned wages $50000 working at the bank. the individual received a $6000 gift from a parent to go to europe, inheritd $10,000 from a relative, and received $500 interest from a municiple bond the individual has no dependents and has itemized deductions of $11000. what is this individual tax laiability?
The individual's tax liability cannot be determined without additional information, such as the individual's filing status, applicable tax rates, and any other sources of income or deductions.
To calculate an individual's tax liability, various factors need to be considered, including the individual's filing status, income tax brackets, deductions, exemptions, and credits. From the given information, we know the individual's wage income, gifts received, inheritance, interest income, and itemized deductions. However, we still need to know the individual's filing status (e.g., single, married filing jointly, etc.) and the applicable tax rates for that filing status.
Once we have all the necessary information, we can calculate the taxable income by subtracting the deductions from the total income. Then, the tax liability can be determined by applying the appropriate tax rates and considering any tax credits.
Without these specific details, it is not possible to accurately calculate the individual's tax liability. If you can provide the missing information, I'll be able to assist you further in determining the tax liability.
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Assume the 2021 ending inventory of Shea's Shtimp Shack was overstated by \( \$ 97,000 \). How would this error affect the amounts reported for cost of goods sold and gross profit for 2021 and 2022 .
The initial overstatement of the ending inventory in 2021 would lead to an understatement of COGS and an overstatement of gross profit in that year.
How to determine?If the ending inventory of Shea's Shtimp Shack for 2021 was overstated by $97,000, it would have an impact on the amounts reported for cost of goods sold and gross profit for both 2021 and 2022.
1. In 2021:
- Cost of Goods Sold (COGS) would be understated by $97,000 because the ending inventory was mistakenly included as part of the inventory instead of being recorded as a cost.
- Gross profit would be overstated by $97,000 because the COGS would be lower than it should be. Gross profit is calculated by subtracting COGS from net sales, and when COGS is understated, the gross profit is artificially higher.
2. In 2022:
- The error from 2021 would carry over to the beginning inventory of 2022, resulting in an overstatement of the beginning inventory by $97,000.
- This overstatement would then flow through to affect COGS and gross profit in 2022.
- COGS in 2022 would be higher than it should be because the overstatement from the beginning inventory would be included in the calculations.
- Gross profit in 2022 would be lower than it should be because the overstated COGS would reduce the gross profit.
In summary, the initial overstatement of the ending inventory in 2021 would lead to an understatement of COGS and an overstatement of gross profit in that year.
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To influence Harmandeep during the decision-making process, whot can the bungie jumping company do? Identify ond explain two ideas. (2)
To influence Harmandeep during the decision-making process, the bungee jumping company can consider the following ideas:
1. Offer attractive discounts and promotions.
2. Highlight safety measures and certifications.
1. Offer attractive discounts and promotions: The company can provide special offers and discounts to make the bungee jumping experience more appealing to Harmandeep.
For example, they could offer a limited-time discount for booking multiple jumps or provide a discounted rate for a group booking.
By making the experience more affordable, Harmandeep may be more inclined to choose the company for their bungee jumping adventure.
2. Highlight safety measures and certifications: Safety is a significant concern for individuals considering bungee jumping.
To influence Harmandeep's decision, the company can emphasize its commitment to safety by showcasing their safety measures and certifications.
They can mention the use of high-quality equipment, well-trained instructors, and adherence to industry standards.
Additionally, they can provide testimonials or reviews from previous customers who have had a safe and enjoyable experience with the company.
By addressing Harmandeep's safety concerns, the company can instill confidence and trust, making it more likely for Harmandeep to choose their services.
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View Policies Current Attempt in Progress Vaughn Manufacturing has a unit contribution margin of $40 and a contribution margin ratio of 20%. How much is the selling price of each unit? O $200. O $50. O $8. O Cannot be determined without more information.
The contribution margin ratio is the percentage of sales that exceed the total variable costs. It provides an idea of the profits that a business can earn on every sale made.
Vaughn Manufacturing has a unit contribution margin of 40 and a contribution margin ratio of 20%. How much is the selling price of each The selling price of each unit in Vaughn Manufacturing can be calculated as Contribution Margin Ratio = Unit Contribution Margin/ Selling Price0.20 = 40/Selling Price Selling Price = 40/0.2Selling Price = 200.
selling price of each unit in Vaughn Manufacturing is 200.Note:Contribution Margin: The contribution margin is the difference between total revenue and total variable costs. It provides information about the earnings potential of the business. Contribution Margin .
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Consider the following simultaneous game. Player 2 Player 1 a. What are the pure-strategy Nash equilibria? Identify. b. Find whether there are any mixed-strategy equilibria. c. Assume now the game above is being modified as a sequential game where player 1 would move first and player 2 second. Find all Nash and subgame perfect equilibria for the game. d. Would a Nash equilibrium always be Pareto efficient? Use your answer in (a) to explain.
The pure-strategy Nash equilibria in the simultaneous game are when Player 1 chooses Strategy L and Player 2 chooses Strategy U, or when Player 1 chooses Strategy R and Player 2 chooses Strategy D.
There are no mixed-strategy equilibria in this game.
In the sequential version of the game, the subgame perfect equilibrium occurs when Player 1 chooses Strategy L in the first stage and Player 2 chooses Strategy U in the second stage.
A Nash equilibrium does not always guarantee Pareto efficiency. In this case, the Nash equilibria identified in (a) are not Pareto efficient because there exists a strategy combination that would benefit both players.
a. To find the pure-strategy Nash equilibria, we need to identify the strategies that are best responses for each player given the other player's strategy. In this game, when Player 2 chooses Strategy U, Player 1's best response is to choose Strategy L, and when Player 2 chooses Strategy D, Player 1's best response is to choose Strategy R. Therefore, the pure-strategy Nash equilibria are (L, U) and (R, D).
b. Since there are no mixed strategies in this game (no probabilities assigned to different strategies), there are no mixed-strategy equilibria.
c. In the sequential version of the game, Player 1 moves first and chooses between Strategy L and Strategy R. If Player 1 chooses Strategy L, Player 2's best response in the second stage is to choose Strategy U, resulting in the subgame perfect equilibrium (L, U). If Player 1 chooses Strategy R, Player 2's best response in the second stage is to choose Strategy D, resulting in another subgame perfect equilibrium (R, D).
d. A Nash equilibrium does not guarantee Pareto efficiency. In this game, the identified Nash equilibria in (a) are not Pareto efficient because in both equilibria, there is a strategy combination that would benefit both players. For example, if both players were to deviate from the equilibrium and choose (L, D), they would obtain a higher payoff than in the equilibrium outcome. This demonstrates that a Nash equilibrium may not always lead to the most efficient outcome from a Pareto perspective.
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A company is considering four business options. 1) Continue to do business as usual, 2) change its business model and expand organically by business and take a well-deserved vacation. (Use a five-year time horizon for determining the best option. Do not use NPV calculions). a) The company currently generates $1M in profit each year. b) If they develop the product, it will cost $.50M. There is a 70% chance the new product will be successful and generate $2.5M profit yearly starting in year 2. If the product is not successful, their entire investment will be lost and they will cease to exist. c) If they acquire the new company, it will cost $2M. There is a 60% chance the merger will be successful and add $2M in profit immediately and each year after. If the merger is not successful, profit will be reduced to $.75M annually. d) If the economy is doing well, (60\% probability), they can get $7M for the company. Otherwise, the company value is $4M. What is the correct choice for the company Sell the company Insufficient information to make an informed business decision Develop the product Acquire the company Do nothing
The best option for the company is to acquire the company. This is because the acquisition of the new company has a 60% chance of success and an immediate increase in profit of $2 million plus $2 million each year. If the acquisition is not successful, profit will be reduced to $0.75 million annually.
A company is considering four business options for the next five years, and they are as follows:
1. Continue to do business as usual.
2. Change the business model and expand organically by business and take a well-deserved vacation.
3. Develop the product
4. Acquire the company
To make an informed decision, the following data has been provided to us:a) The company currently generates $1M in profit each year.
b) If they develop the product, it will cost $.50M. There is a 70% chance the new product will be successful and generate $2.5M profit yearly starting in year 2. If the product is not successful, their entire investment will be lost, and they will cease to exist.
c) If they acquire the new company, it will cost $2M. There is a 60% chance the merger will be successful and add $2M in profit immediately and each year after. If the merger is not successful, profit will be reduced to $.75M annually.d) If the economy is doing well, (60% probability), they can get $7M for the company. Otherwise, the company value is $4M.
When we look at the option of doing nothing, we will end up with $1 million in profit for the next five years, resulting in a total profit of $5 million.
If we decide to change the business model and expand organically, it will cost us $0.5 million to develop the product, and there is a 70% chance the new product will generate $2.5 million in profit yearly starting from year 2. The expected profit is $11.5 million ($2.5m × 4 years + $1m in year 1), but the worst-case scenario is that the investment will be lost, and the company will cease to exist. Therefore, it is a very high-risk option.
If we decide to sell the company, we can get $7M if the economy is doing well, and the company is worth $4M otherwise. The expected profit is $5.2 million ($7M × 0.6 + $4M × 0.4).
It would cost us $2M to acquire a new company, and there is a 60% chance the merger will be successful and add $2M in profit immediately and each year after. If the merger is not successful, profit will be reduced to $0.75M annually. The expected profit is $7.1 million ($2M + $2M × 0.6 + $0.75M × 0.4).
Therefore, the best option for the company is to acquire the company. This is because the acquisition of the new company has a 60% chance of success and an immediate increase in profit of $2 million plus $2 million each year. If the acquisition is not successful, profit will be reduced to $0.75 million annually.
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Required information [The following information applies to the questions displayed below.] On January 1, 2024, Splash City issues $400,000 of 8% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year. Assuming the market interest rate on the issue date is 7%, the bonds will issue at $436,785. 2. Record the bond issue on January 1, 2024, and the first two semiannual interest payments on June 30, 2024, and Decemb 2024. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account fiel our final answers to the nearest whole dollar.) Journal entry worksheet Journal entry worksheet Record the first semiannual interest payment. Note: Enter deblts before credits, Journal entry worksheet Record the second semiannual interest payment. Note: Enter debits before credits.
To record the bond issue on January 1, 2024: Date: January 1, 2024: Debit: Cash (Proceeds from bond issuance) - $436,785.Credit: Bonds Payable - $400,000.
Credit: Premium on Bonds Payable - ($436,785 - $400,000) is $36,785
To record the first semiannual interest payment on June 30, 2024: Date: June 30, 2024
2. Record the interest expense and cash payment:
Debit: Interest Expense - ($400,000 x 0.08 x 6/12) = $16,000
Credit: Cash - $16,000
To record the second semiannual interest payment on December 31, 2024: Date: December 31, 2024
3. Record the interest expense and cash payment: Debit: Interest Expense - ($400,000 x 0.08 x 6/12) = $16,000
Credit: Cash - $16,000.
Interest expense is calculated based on the bond's face value, the interest rate, and the time period since the last payment. The premium on bonds payable is amortized over the life of the bond and reduces the interest expense.
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Please solve all blanks. Most importantly blanks for 1B. Please
and thank you!
Cash Payback Period, Net Present Value Method, and Analysis Elite Apparel Inc. is considering two investment projects. The estimated net cash flows from each project are as follows: Plant Expansion Re
Elite Apparel Inc. is deciding between two investment projects. Project A, which costs $70,000, will generate net cash inflows of $20,000 per year for 5 years.
Project B, which costs $110,000, will generate net cash inflows of $32,000 per year for 4 years. To decide which project to choose, the company has decided to use the cash payback period, net present value method, and analysis.
To calculate the cash payback period for each project, we need to divide the initial cost of the project by the net cash inflows per year. For Project A, the cash payback period would be:
[tex]$70,000 ÷ $20,000 per year = 3.5 years[/tex]
For Project B, the cash payback period would be:
[tex]$110,000 ÷ $32,000 per year = 3.44 years[/tex]
Since Project B has a shorter cash payback period, it would be preferred according to this method.
Finally, the analysis can be used to compare the two projects in terms of their expected return on investment (ROI) and profitability index (PI).
The ROI for Project A would be:
[tex]ROI = ($20,000 x 5 years - $70,000) ÷ $70,000 = 57.14% The ROI for Project B would be: ROI = ($32,000 x 4 years - $110,000) ÷ $110,000 = 85.45% The PI for Project A would be: PI = ($18,182 + $16,529 + $15,026 + $13,661 + $12,425) ÷ $70,000 = 0.83 The PI for Project B would be: PI = ($29,091 + $26,446 + $24,042 + $21,853) ÷ $110,000 = 0.87[/tex]
According to the analysis, Project B has a higher expected ROI and profitability index, and would therefore be preferred over Project A.
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Sarah has a small business making cupcakes in her mother's kitchen. She borrows $20 from her mother to run to the store to buy more flour so she can make more cupcakes. Which of the following is the best example of a good in this scenario A. the$20 B. the flour C. the mother's kitchen D. the cupcakes
The best example of a good in this scenario is B. the flour.
1. A good refers to a tangible product that is produced to satisfy a need or want. In this scenario, Sarah is making cupcakes, which are tangible products that can be consumed.
2. The $20 borrowed from Sarah's mother is not a good itself, but rather a form of currency used to purchase the necessary ingredients. It is a means to acquire the goods, but not a good in itself.
3. The mother's kitchen is not a good either, as it is a physical space where the cupcakes are made. It is not the product itself.
4. The cupcakes, while a result of Sarah's baking efforts, are not considered a good in this scenario because the question is asking for the best example of a good. The cupcakes are the end result of the production process, rather than the input or raw material used.
In conclusion, the best example of a good in this scenario is B. the flour, as it is the tangible ingredient used by Sarah to make the cupcakes.
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beginning accounts receivable 160,000 beginning allowance for doubtful accounts 5,600 sales 2,123,000 collections on account 1,834,000 accounts written off 10,020 collections of accounts previously written off 3,410 bad debts as a percentage of sales 1.70% the accountant for company b generated the above information, note that the company uses the income statement approach to determining bad debt. the company recorded bad debt expense based on the above table. if the estimate of bad debts as a percentage of sales is changed to the following amount. what is the adjustment to bad debt expense? bad debts as a percentage of sales 2.10%
The adjustment to bad debt expense needs to be calculated based on a change in the estimate of bad debts as a percentage of sales.
To calculate the adjustment to bad debt expense, we need to determine the difference between the original bad debt expense and the revised bad debt expense based on the new estimate.
Original bad debt expense:
Sales × Bad debts as a percentage of sales = $2,123,000 × 1.70% = $36,041
Revised bad debt expense:
Sales × Revised bad debts as a percentage of sales = $2,123,000 × 2.10% = $44,553
To find the adjustment to bad debt expense, we subtract the original bad debt expense from the revised bad debt expense:
Adjustment to bad debt expense = Revised bad debt expense - Original bad debt expense
Adjustment to bad debt expense = $44,553 - $36,041 = $8,512
Therefore, the adjustment to bad debt expense, when the estimate of bad debts as a percentage of sales is changed to 2.10%, is $8,512. This adjustment reflects the increase in bad debt expense due to the higher estimated percentage of sales expected to become uncollectible.
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which of the following best describes the calculation for gains or losses for tax purposes? a) proceeds minus dividend, plus cost basis b) proceeds plus dividends, minus cost basis c) proceeds plus cost basis d) proceeds minus cost basis
The best describes the calculation for gains or losses for tax purposes is proceeds minus cost basis. Option D is the correct answer.
The calculation for gains or losses for tax purposes is determined by subtracting the cost basis of an asset from the proceeds received from its sale. The cost basis represents the original purchase price of the asset, adjusted for any applicable expenses, such as transaction fees or commissions.
By subtracting the cost basis from the proceeds, you arrive at the taxable gain or loss. If the resulting value is positive, it represents a taxable gain, while a negative value indicates a taxable loss.
Including dividends or other factors in the calculation is not necessary for determining gains or losses for tax purposes. Dividends are typically treated separately and may have their own tax implications, but they are not directly relevant to the calculation of gains or losses from the sale of an asset. Option D is the correct answer.
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Razor Technologies reported $199,000 of income for the year by using variable costing. The company had no beginning inventory, planned and actual production of 50,000 units. Standard variable costs were $15 per unit, and total budgeted fixed manufacturing overhead was $85,000. If there were no variances, income under absorption costing would be:
Multiple Choice
A. $144,500
B. $189,500
C. $198,500
D. $207,500
E. $252,500
Razor Technologies reported $199,000 of income for the year by using variable costing. If there were no variances, income under absorption costing would be $198,500. The correct answer is option C.
Variable costing is a costing system in which only variable costs are considered as a cost of inventory. Under this costing system, fixed manufacturing overheads are not considered as a cost of inventory but they are considered as period expenses. It is also known as direct costing or marginal costing. Absorption costing is a costing system in which both variable and fixed manufacturing overheads are considered as a cost of inventory. Under this costing system, fixed manufacturing overheads are not considered as period expenses but they are added to the cost of inventory.
Razor Technologies reported $199,000 of income for the year by using variable costing. The company had no beginning inventory, planned and actual production of 50,000 units, standard variable costs of $15 per unit, and total budgeted fixed manufacturing overhead of $85,000.The income under absorption costing would be calculated as follows:
Fixed manufacturing overheads rate per unit = Budgeted fixed manufacturing overheads / Units produced
= $85,000 / 50,000 units
= $1.7 per unit
Cost per unit = Variable cost per unit + Fixed manufacturing overheads rate per unit
= $15 + $1.7= $16.7 per unit
Total cost of goods sold = Cost per unit × Units sold
= $16.7 × 50,000 units
= $835,000
Profit under absorption costing = Revenue – Cost of goods sold
= $1,034,500 - $835,000
= $199,500
Therefore, the income under absorption costing would be $198,500 ($199,500 - $1,000).
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Milo Company manufactures beach umbrellas. The company is preparing detailed budgets for the third quarter and has assembled the following information to assist in the budget preparation:
The Marketing Department has estimated sales as follows for the remainder of the year (in units):
July 30,500 October 20,500
August 71,000 November 7,000
September 40,000 December 7,500
The selling price of the beach umbrellas is $10 per unit.
All sales are on account. Based on past experience, sales are collected in the following pattern:
30% in the month of sale
65% in the month following sale
5% uncollectible
Sales for June totaled $200,000.
The company maintains finished goods inventories equal to 15% of the following month’s sales. This requirement will be met at the end of June.
Each beach umbrella requires 4 feet of Gilden, a material that is sometimes hard to acquire. Therefore, the company requires that the ending inventory of Gilden be equal to 50% of the following month’s production needs. The inventory of Gilden on hand at the beginning and end of the quarter will be:
June 30 73,150 feet
September 30 ? feet
Gilden costs $0.60 per foot. One-half of a month’s purchases of Gilden is paid for in the month of purchase; the remainder is paid for in the following month. The accounts payable on July 1 for purchases of Gilden during June will be $34,890.
Required:
1. Calculate the estimated sales, by month and in total, for the third quarter.
2. Calculate the expected cash collections, by month and in total, for the third quarter.
1. Estimated sales for the third quarter is $1,415,000.
2. Expected cash collections for the third quarter is $1,001,000.
1. Estimated sales, by month and in total, for the third quarter is as follows:
Month Unit Sales Total Sales
July 30,500 $305,000
August 71,000 $710,000
September 40,000 $400,000
Total 141,500 $1,415,000
Estimated sales:
July: 30,500 units * $10/unit = $305,000
August: 71,000 units * $10/unit = $710,000
September: 40,000 units * $10/unit = $400,000
Total: 141,500 units * $10/unit = $1,415,000
2. Expected cash collections, by month and in total, for the third quarter is as follows:
Month Cash Collections
July $91,500
August $532,000
September $357,500
Total $1,001,000
Expected cash collections:
July: 30% * $305,000 = $91,500
August: 30% * $710,000 + 65% * $305,000 = $532,000
September: 30% * $400,000 + 65% * $532,000 = $357,500
Total: $91,500 + $532,000 + $357,500 = $1,001,000
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1) The Smart Company has been in business for 10 years and is located in
Toronto, Ontario.
The company manufactures two products, blenders and radios. The company
has estimated its overhead in their inspection department to be $240,000. The
company produces 60,000 blenders and 80,000 radios each year. Blender
production requires 20,000 machine hours, radio production requires 30,000
machine hours. The company completes 120 inspections per year, 40
inspections for blenders and the remainder for radios.
Calculate how much of the inspection overhead should be allocated to blenders
and radios? If there is a difference in the allocated overhead, explain why.
2) The Smart Company has been in business for 10 years and is located in
Toronto. Ontario.
The Smart Company has the following financial data:
1) Calculation of Overhead Allocated to Blenders and Radios Blenders production requires 20,000 machine hours and the total machine hours are (20,000 x 60,000) = 1,200,000.
Overhead allocated to blenders is[tex](20,000/1,200,000) x $240,000 = $4,000[/tex] Radio production requires 30,000 machine hours and the total machine hours are (30,000 x 80,000) = 2,400,000.Thus, overhead allocated to radios is [tex](30,000/2,400,000) x $240,000 = $3,0002)[/tex] The Smart Company has the following financial data 1,200,000Variable Costs: 600,000Fixed Costs: 300,000Operating .
Contribution Margin = Break-Even Sales. Break-Even Sales = 300,000/0.5 = 600,000Margin of Safety Margin of Safety = Total Sales - Break-Even SalesMargin of Safety = 1,200,000 - 600,000 = 600,000Therefore, the Smart Company has a margin of safety of 600,000.
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