Answer:
Helps analyze differences between actual and budgeted results
Helps reveal undesirable outcomes
Helps in planning and control activities
Explanation:
A master budget comprised of future income statement or planned operating budget and the future balance sheet or financial budget that represent the goals and objectives of the organization and the ways to achieve them. It identified the actual & budgeted results difference, It disclosed the non-desirable results and also it helps in activities that deals in planning & controlling
Therefore the above statements should be correct
Accrued Product Warranty Fosters Manufacturing Co. warrants its products for one year. The estimated product warranty is 4% of sales. Assume that sales were $379,000 for January. On February 7, a customer received warranty repairs requiring $250 of parts and $105 of labor.
a. Journalize the adjusting entry required at January 31, the end of the first month of the current fiscal year, to record the accrued product warranty.
b. Journalize the entry to record the warranty work provided in February.
Answer:
a.
Date Account Title Debit Credit
Jan. 31 Product Warranty Expense $15,160
Product Warranty Payable $15,160
Working:
Product warranty expense = Amount of sales for January * Estimated product warranty
= 379,000 * 4%
= $15,160
b.
Date Account Title Debit Credit
Jan. 31 Product Warranty Payable $355
Supplies $250
Wages payable $105
The costs of the warranty will be taken from the liability account for warranties because the warranty payable account represents that the company owes warranty repairs which the customer just came to collect.
The budgeted income statement presented below is for Burkett Corporation for the coming fiscal year. If Burkett Corporation achieves the budgeted level of sales, what will be its margin of safety in dollars? (Do not round Intermediate calculations.): $1,020,000 8 08:49 Sales (51,000 units) Costs: Direct materials Direct labor Fixed factory overhead Variable factory overhead Fixed marketing costs Variable marketing costs Pretax income $278, 800 240, 100 100, 500 150, 100 119, 100 50, 100 929,700 90,300
a. $150300
b. $305302
c. $169,831
d. S234282
e. $327,539
Answer:
The correct option is 306,102 (i.e. the second option in the attached pdf file.). That is, the margin of safety is $306,102.
Explanation:
Note: This question contains some errors and its data are merged together. The original sorted question is therefor provided before answering the question. See the attached pdf file for the complete sorted question.
The explanation of the answers is now provided as follows:
Actual dollar sales = $1,020,000
Variable cost = Direct materials + Direct labor + Variable factory overhead + Variable marketing costs = $278,800 + $240,100 + $150,100 + $50,100 = $719,100
Contribution margin = Actual dollar Sales - Variable cost = $1,020,000 - $719,100 = $300,900
Contribution margin ratio = Contribution margin / Actual dollar sales = $300,900 / $1,020,000 = 0.295, or 29.50%
Fixed Cost = Fixed factory overhead + Fixed marketing costs = $100,500 + $110,100 = $210,600
Breakeven point in dollar dales = Fixed Cost / Contribution margin ratio = $210,600 / 29.50% = $713,898
Margin of safety = Actual dollar sales - Breakeven point in dollar dales = $1,020,000 - $713,898 = $306,102
From the attached pdf file, the correct option is 306,102 (i.e. the second option in the attached pdf file.). That is, the margin of safety is $306,102.
Reggie and Bebe own an apartment building in Portland, Oregon, with 8 identical units. They live in one and rent the remaining units. Their rental income for the year was $45,000. They incurred the following expenses for the entire building: Advertising for available units $ 850 Maintenance 9,000 Repairs 7,500 Utilities 12,000 Depreciation 8,000 What amount of net income should Reggie and Bebe report for the current year for this
Answer:
$12,213
Explanation:
Calculation to determine What amount of net income should Reggie and Bebe report for the current year for this
NET INCOME
Rental Income $45,000
Advertising for available units $850
Maintenance $7,875
($9,000*7/8)
Repairs $6,562.5
($7,500*7/8)
Utilities $10,500
($12,000*7/8)
Depreciation $7,000
($8,000*7/8)
Net Rental Income $12,213
Therefore the amount of net income that should Reggie and Bebe should report for the current year is $12,213
der owns a hamburger restaurant. Slider's minimum average variable cost is $10$ 10 at a quantity of 100 hamburgers, and his minimum average total cost is $15$ 15 at a quantity of 200 hamburgers. His total fixed cost is $300$ 300 . Use this information to answer the questions. What is Slider's AVC when he sells 200 hamburgers?
Answer:
$13.50
Explanation:
Average Total Cost = Average Variable Cost + Average Fixed Cost
Average Fixed Cost = total fixed cost / quantity
300 / 200 = 1.5
15 = 1.5 + Average Variable Cost
Average Variable Cost =15 - 1.5 = 13.50
Demand for a specific design of dinning sets has been fairly large in the past several years and Statewide Furnishings, Inc. usually orders new dinning sets 10 times a year. It is estimated that the ordering cost is $400 per order. The carrying cost is $50 per unit per year. Furthermore, State Wide Furnishings, Inc. has estimated that the stock out cost is $120 per unit per year. Based on forecast, the annual demand is 600 units. State Wide Furnishings, Inc. has 350 working days in a year and its lead time is 14 working days.
Assume shortage is allowed and the store manager is sure that shortages will not become lost sales, determine the annual ordering cost.
a. 592.82
b. 1472.01
c. 2051.28
d. 4116.11
e. None of the above
Answer:
e. None of the above
Explanation:
Annual demand, D = 600 units
Ordering cost, S = $400
Holding cost, H = $50
Economic order quantity without stock-out = SQRT(2*D*S/H)
Economic order quantity without stock-out = SQRT(2*600*400/50)
Economic order quantity without stock-out = 98
Total annual ordering cost = (D/Q)*S + (Q/2)*H
Total annual ordering cost = (600/98)*$400 + (98/2)*$50
Total annual ordering cost = $2,448.97 + $2,450
Total annual ordering cost = $4,898.97
Define ethics and law and show how they are different and similar.
Answer: The law sets minimum standards of behavior while ethics set maximum standards. Laws are created and enforced by governments based on society's ethics to mediate our relationships with each other and to protect their citizens.
Maverick law office currently orders ink refills 120 units at a time. The firm estimates that carrying cost is 40% of the $10 unit cost and that annual demand is about 480 units per year. The assumptions of the basic EOQ model are thought to apply. For what value of ordering cost would its current action (order quantity) be optimal
Answer:
Economic order quantity (EOQ)= 49 units
Explanation:
Giving the following information:
Demand= 480 units per year
Order cost= $10
Holding cost= 10*0.4= $4
Economic order quantity (EOQ) is the ideal order quantity a company should purchase to minimize inventory costs such as holding costs, shortage costs, and order costs.
Economic order quantity (EOQ)= √[(2*D*S)/H]
D= Demand in units
S= Order cost
H= Holding cost
Economic order quantity (EOQ)= √[(2*480*10) / 4]
Economic order quantity (EOQ)= √(2,400)
Economic order quantity (EOQ)= 49 units
Exercise swer the following questions: Why is audit important in any organization? Give reasons.
Answer:
An audit is an official accounting of a company's account by an independent body to check for irregularities in the account.
Therefore, an audit is important because it shows that the facts and figures submitted are correct. It is also important because, it improves credibility and helps improve the internal controls of a company.
After examining the records of Theta Company for the month of October, the following information is obtained: Beginning cash balance $2,700 Cash receipts 56,000 Cash payments 36,000 Minimum cash balance 1,000 Loan repayments 10,000 Based on the given information, calculate Theta's cash surplus (deficiency) for the month of October.
Answer:
the surplus of the cash is $21,000
Explanation:
The computation of the cash surplus (deficiency) for the month of October is given below:
Cash surplus is
= opening balance + cash receipt - cash payment - minimum cash balance
= $2,700 + $56,000 - $36,000 - $1,000
= $21,000
hence, the surplus of the cash is $21,000
A bond issue with a face amount of $1,100,000 bears interest at the rate of 7%. The current market rate of interest is 8%. These bonds will sell at a price that is:
Answer:
d. Less than $1,100,000
Explanation:
Here are the options
Equal to $100,000 O
O More than $100,000 o
O The answer cannot be determined from the information provide
d. Less than $1,100,000
If the current interest market rate is greater than the bonds coupon rate the bond is selling at a discount
If the current interest market rate is less than the bonds coupon rate the bond is selling at a premium
If a bond’s coupon rate is equal to its current interest market rate, then the bond is selling at par.
In a board of directors election for five directors and straight voting, a majority group of shareholders will elect a. four directors. b. five directors. c. four or five depending on how the cumulative voters vote. d. the same proportional share of directors as their ownership share.
Answer: b. five directors
Explanation:
Straight voting refers to a voting convention where shareholders are allowed to cast a single vote towards each director seat for each share they own. This is in contrast to cumulative voting where a single shareholder can decide to cast all their votes to one director.
In such a convention therefore, the majority will elect all five seats because the majority that voted for each seat will decide which director will be elected.
ing using a calculator) Jesse Pinkman is thinking about trading cars. He estimates he will still have to borrow $ to pay for his new car. How large will Jesse's monthly car loan payment be if he can get a -year ( equal monthly payments) car loan from the university's credit union at an APR of percent compounded monthly?
Answer:
Monthly car loan payment = $414 (Approx.)
Explanation:
Missing information;
Amount borrow = $29,000
NUmber of payment = 7 year x 12 = 84
Rate = 5.3% yearly = 0.053 / 12 monthly
Find:
Monthly car loan payment
Computation:
PV = $29,000
N = 84
r = 0.053/12
FV = 0
PV = (PMT/r)[1 – 1/(1 + r)ⁿ] + FV/(1 + r)ⁿ
29,000 = [PMT/(0.053/12)][1 – 1/(1 + 0.053/12)^84] + 0
PMT = 413.98
Monthly car loan payment = $414 (Approx.)
Malouka participates in a research project for a large consumer behavior research firm. Each time she purchases items in a grocery store, she scans the barcodes of her products into an app, which sends her purchase data to the firm for analysis. Malouka is working with an example of automation known as __________.
Malouka is working with an automation example that we called the importing/exporting data.
The following information should be considered for the given situation:
Since she scans the barcodes of that product she purchased even all products are associated with the barcodes via using the mobile app.Also, she offered the research firm having more information like time, location, quantity, gender,etc.Therefore we can conclude that Malouka is working with an automation example that we called the importing/exporting data.
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phân tích phạm trù hàng hoá sức loa động theo quan điểm cua chủ nghĩa mác.Thực trạng thị trường sức lao động ở nước ta hiện nay. Là sinh viên trường đại học anh chị nhận thấy mình có trách nhiệm gì trong việc nâng cao chất lượng nguồn nhân lực đáp ứng yêu cầu của sự nghiệp công nghiệp hoá đất nước
Geoffrey is looking for a safe investment for $3,000 he received as a bonus. He is looking for an investment that will also help him deal with the effects of inflation. Which of the following options would you recommend that Geoffrey invest in?
a. Series EE bonds.
b. Series I bonds.
c. Commercial paper.
d. Junk bonds.
Answer:
Hence the correct option is option b. Series I bonds.
Explanation:
Series I bonds are going to be completing a fixed-rate Plus and adjustable-rate which can be adjusted with the inflation so if he's trying to find investment into a bond he should be choosing with series I Bonds, which can be adjusted with inflation effect.
The correct option is b) Series I bonds.
Series I bonds will have a fixed interest rate plus an interest on the outstanding that will be adjusted without inflation, thus if he is searching for a bond to participate in, he will have to go with series I bonds, which will then be modified with inflation.
All of the other possibilities are untrue.
Alternative (B) Series I bonds is the correct answer.
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Assuming that the desired rate of return is 12%, determine the net present value for the
proposal.
Answer:
Error
Explanation
1
Many talented teachers at Sunnydale High School resigned from their jobs in the past year. The Administrative President of the school board is in a fix and is unable to identify a reason for this attrition. The school pays competitive wages to its teachers and even gave them a pay hike recently. In this scenario, which of the following points should Sunnydale's Administrative President keep in mind when devising a solution to the problem?
a. Money is the main reason people leave, so the school administration should give its employees a bonus along with the pay hike.
b. When pay is competitive, other job factors become more important than the pay employees receive.
c. Employees are bound to leave, and there is not much employers can do to retain them.
d. Teachers usually leave their jobs because of involuntary turnover, so pay is not a major factor in their retention.
Answer:
b. When pay is competitive, other job factors become more important than the pay employees receive.
Explanation:
In the case when pay should be treated as the competitive so the factors that represent higher orders or requirement becomes more significant if we compared with the money also these requirements could not be fully satisfied due to this they will resign
So as per the given situation, the option b is correct
And, the rest of the options should be considered wrong
If the U.S. economy is producing at a level that is substantially less than potential GDP and the government's budget deficits are increasing aggregate demand, then ____________________________ is not much of a danger.
Answer:
an inflationary increase in the price level.
Explanation:
Monetary policy can be defined as the actions (macroeconomic policies) adopted and undertaken by the central bank of a particular country to control the money supply and interest rates so as to boost or enhance economic growth. The central bank uses monetary policies to manage inflation, economic growth through long-term interest rates and level of unemployment in a country.
In order to boost economic growth, a monetary policy is implemented to increase money supply (liquidity). Also, it is used to prevent inflation by reducing money supply.
An inflationary gap, also referred to as an expansionary gap in economics, is typically used for measuring the difference between the gross domestic product (GDP) and the current level of Real Gross Domestic Products that exists when a country's economy is gauged at a full employment rate. Consequently, this situation causes the price of goods and services to go up with a low income level among the people living in the country.
A budget deficit is the amount by which spending exceeds income.
All other factors held constant or all things being equal (ceteris paribus), an increase in government's budget deficit drives the interest rate up.
Generally, when there's a deficit in government budget, they resort to issuing more bonds or borrowing money from creditors. These creditors are likely to be sceptical about the government's ability to repay the debt and as such would increase the interest rate.
Hence, an inflationary increase in the price level of goods and services is not much of a danger if the U.S. economy is producing at a level that is substantially less than potential gross domestic product (GDP) and the aggregate demand is being increased by government's budget deficits.
On November 1, Bahama National Bank lends $3.7 million and accepts a six-month, 9% note receivable. Interest is due at maturity. Record the acceptance of the note and the appropriate adjustment for interest revenue at December 31, the end of the reporting period.
Answer:
11/01
Dr Cash $3.7 million
Cr Notes Payable $3.7 million
12/31
Dr Interest expense $55,500
Cr Interest payable $55,500
Explanation:
Preparation of the journal entries to Record the issuance of the note and the appropriate adjustment for interest expense at December 31, the end of the reporting period.
11/01
Dr Cash $3.7 million
Cr Notes Payable $3.7 million
(To record issuance of the note)
12/31
Dr Interest expense $55,500
Cr Interest payable $55,500
(To record adjustment for interest expense)
Interest Expense = Face Amount x Interest Rate x Time Period
Interest Expense= $3.7 million x .09x 2/12 Interest Expense=$55,500
You're trying to save to buy a new $207,000 Ferrari. You have $57,000 today that can be invested at your bank. The bank pays 6.5 percent annual interest on its accounts. How long will it be before you have enough to buy the car?
Answer:
19.84 years
Explanation:
Number of years = in ( fv / pv) / r
FV = future value
PV = present value
r = interest rate
IN(207000 / 57000) / 0.065
IN (3.631579) / 0.065 = 19.84
A buyer of $7,000 in merchandise inventory failed to take advantage of the vendor's credit terms of 2/15, n/45, and instead paid the invoice in full at the end of 45 days. By not taking advantage of the cash discount, the buyer lost the discount of:_________
a. 100
b. 77
c. 1155
d. 770
e. 231
Given:
The credit terms are: [tex]\bold{\frac{2}{15} \ \ \frac{n}{45}}[/tex]When the [tex]2\%[/tex] discount with [tex]\bold{45\ days}[/tex] to paySo, the price of the merchandise is: [tex]\bold{ 7000}[/tex]Calculating the cash discount:
[tex]= \bold{7000 \times 2\%}\\\\= \bold{7000 \times \frac{2}{100}}\\\\= \bold{70\times 2}\\\\= \bold{\$140}[/tex]
Therefore the answer is "140", and all the given choices are wrong.
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Marginal revenue product can be calculated using the formula marginal product × output price Group of answer choices only if the marginal product of labor is constant. only if output price is constant. only if the both marginal product of labor and the output price are constant. only if the firm has market power in the labor market
Answer:
only if output price is constant.
Explanation:
Marginal revenue can be defined as the amount of money (revenue) generated from the sales of an additional unit of a product.
Marginal revenue product can be calculated using the formula; (marginal product × output price), only if output price is constant i.e the amount of money charged by a seller remains the same.
For a business to be considered a corporation: Multiple Choice it must issue both common and preferred stock. its stock must be sold in very large amounts. it must be organized as a separate legal entity. it must pay dividends.
Answer:
it must be organized as a separate legal entity.
Explanation:
A corporation is a business that is owned by shareholders. The corporation is a separate legal entity and so it can sue and be sued, pay taxes and own assets.
Advantages of a corporation include :
1. they have unlimited liabilities
2. they have unlimited life. the business doesn't end even after the death of the owners unlike a sole proprietorship
3. they have more access to capital
Disadvantages of a corporation include :
high cost of setting up Earnings to shareholders are taxed twiceA corporation can only issue one type of share
A corporation is under no obligation to pay dividends
Stocks of a corporation can either be sold in large or small amounts
A number of factors influence the sample size for a substantive test of details of an account balance. All other factors being equal, which of the following would lead to a larger sample size?
a. Greater reliance on internal control
b. Greater reliance on substantive analytical procedures
c. Smaller expected frequency of errors
d. Smaller measure of tolerable misstatement
Answer: D. Smaller measure of tolerable misstatement.
Explanation:
The sample size simply means the number of participants that are included in a study. They're the group of subjects which are picked and selected from the population and represents the general population for that study.
From the options given, it should be noted that a smaller measure of tolerable misstatement will lead to a larger sample size.
If the central bank did not follow the Taylor principle, an increase in inflation would lead to a decrease in ________.
A) the nominal interest
B) the real interest rate
C) aggregate output
D) all of the above
Answer:
B) the real interest rate
GDP data (billions of dollars)
Indirect business taxes $600
Depreciation 950
Change in business inventories 50
Compensation of employees 5,400
Corporate profits 700
Durable goods 600
Exports 100
Social Security taxes 360
Transfer payments 300
Fixed investment 950
Government spending 800
Imports 150
Net interest 500
Nondurable goods 2,000
Personal taxes 1,000
Rental income 200
Services 4,000
Using the expenditures approach, compute net exports (X-M). Which of the following is correct?
a. $5,178 billion.
b. $6,450 billion.
c. $5,740 billion.
d. $7,740 billion.
e. $8,350 billion.
Answer:
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If the market index subsequently rises by 8% and Ford’s stock price rises by 7%, what is the abnormal change in Ford’s stock price? (Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 1 decimal place.)
Answer:
-1.9%.
Explanation:
The computation of the abnormal change in the stock price of ford should be given below:
Given that
The return on the market is 8%.
So, the forecast monthly return for Ford is
= 0.10% + (1.1 × 8%)
= 8.9%.
And, the Ford’s actual return was 7%,
So,
the abnormal return be
= 7% - 8.9%
= -1.9%.
To assign overhead costs to each product, the company:_____.
a. multiplies the activity-based overhead rates per cost driver by the number of cost drivers expected to be used per product.
b. assigns the cost of each activity cost pool in total to one product line.
c. multiplies the overhead rate by the number of direct labor hours used on each product.
d. multiplies the rate of cost drivers per estimated cost for the cost pool by the estimated cost for each cost pool.
Answer:
a. multiplies the activity-based overhead rates per cost driver by the number of cost drivers expected to be used per product.
Explanation:
Costing is the measurement of the cost of production of goods and services by assessing the fixed costs and variable costs associated with each step of production.
Generally, an activity-based costing uses multiple cost pools such as manufacturing cost or customer services and multiple cost drivers such as direct labor hours worked, number of changes used in engineering department, etc.
Cost pool is simply the amount of money spent by a firm on a particular activity.
Hence, to assign overhead costs to each product, the company multiplies the activity-based overhead rates per cost driver by the number of cost drivers expected to be used per product.
In activity-based costing, the activity rate for an activity cost pool is calculated by using the following formula;
Activity rate = total overhead cost/activity for the activity cost pool.
Suppose that you have generated the estimates listed below from a pro forma analysis for a company that had requested a three year loan. The loan is a $1.5 million term loan with the equal annual payments of principals. The P&I payments are due at the end of each year with the annual interest rate = Prime rate + 2%.
Yr.1 Yr. 2 Yr. 3
Capital expenditure 250,000 125,000 75,000
Cash dividends 140,000 140,000 140,000
Cash flow from operations before
interest expense 750,000 780,000 800,000
Assuming the Prime rate = 8% each year. What will be the interest payment at year 2?
a. 25,000.
b. 50,000.
c. 100,000.
d. 150,000.
e. 200,000.
The answer is "Option c" and its calculation can be defined as follows:
Calculation:
Year To be paid in principal Paid Interest Paid Principal [tex]1\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \$1,500,000\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \$150,000\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \$500,000\\\\2\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \$1,000,000\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \$100,000\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \$500,000\\\\3\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \$500,000\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \$50,000\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \$500,000[/tex]
That's why "Option c" is the only correct choice.
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A bank has agreed to lend you $53,000 for a home loan. The loan will be fully amortized over 39 years at 13.50%, with .44 points. The loan payments will be monthly. The closing cost is estimated to be $3,894 and you plan to refinance the mortgage in 8 years. Calculate the actuarial rate.
Answer:
the actuarial rate is $599.44
Explanation:
The computation of the actuarial rate is given below:
= $53000 × 1.13% × (1+1.13%)^468) ÷ ((1 + 1.13%)^468 - 1)
= $599.44
The 1.13% comes from
= 13.50% ÷ 12
= 1.13%
And, the 468 comes from
= 39 × 12
= 468
Therefore the actuarial rate is $599.44
The same is to be relevant
