Lawn Master Company, a manufacturer of riding lawn mowers, has a projected income for the coming year as follows: Sales $ 44,000,000 Operating expenses: Variable expenses $ 28,600,000 Fixed expenses 7,700,000 Total expenses 36,300,000 Operating profit $ 7,700,000 Required: 1. Determine the breakeven point in sales dollars. 2. Determine the required sales in dollars to earn a before-tax profit of $9,152,500. (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.) 3. What is the breakeven point in sales dollars if the variable expenses increases by 9%
Answers
Answer:
Please see attached
Explanation:
• Break even point in sales dollars $22,000,000
• Required sales in dollars $48,150,000
• Break even point in sales dollars $34,010,600
See as attached, detailed solution to the questions above.
Answer:
Results are below.
Explanation:
Giving the following information:
Sales $44,000,000
Variable expenses $ 28,600,000
Fixed expenses 7,700,000
To calculate the break-even point in dollars, we need to use the following formula:
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 7,700,000 / [(44,000,000 - 28,600,000)/44,000,000]
Break-even point (dollars)= $22,000,000
Now, we incorporate the desired profit of $9,152,500
Break-even point (dollars)= (fixed costs + desired profit) / contribution margin ratio
Break-even point (dollars)= (7,700,000 + 9,152,500) /0.35
Break-even point (dollars)= $48,150,000
Finally, the new break-even point in dollars:
Total variable cost= 28,600,000*1.09= 31,174,000
Break-even point (dollars)= 7,700,000 / [(44,000,000 - 31,174,000) / 44,000,000]
Break-even point (dollars)= 7,700,000 / 0.2915
Break-even point (dollars)= $26,415,094.34
Related Questions
B. Panuto: Isulat sa patlang kung ano ang tinutukoy sa pangungusap.
1. Ang tawag sa taong nagnenegosyo.
2. Ang panimulang salapi na ginagamit sa
pagnenegosyo.
3. Ang isang entrepreneur ay dapat magkaroon nito
upang ang produkto o serbisyo ay kumita ng
maganda
4. Alamin ang pagtatayuan ng negosyo.
5. Mahalaga ito upang maihatid at makilala ang
bagong produkto sa pamilihan.
Answers
Explanation:
1.negosyante.
2.kapital.
3.ng sapat na kaalaman sa pang negosyo.
4.inquiry
5.flayears
Consider a mutual fund with $240 million in assets at the start of the year and 10 million shares outstanding. The fund invests in a portfolio of stocks that provides dividend income at the end of the year of $2.5 million. The stocks included in the fund's portfolio increase in price by 5%, but no securities are sold and there are no capital gains distributions. The fund charges 12b-1 fees of .75%, which are deducted from portfolio assets at year-end. a. What is the fund's net asset value at the start and end of the year
Answers
Answer:
Net asset value at the start of the year = $240,000,000 / 10,000,000 shares
Net asset value at the start of the year = $24
Asset in the beginning $240,000,000
Increase in value $240,000,000*5% $12,000,000
Assets at the end $352,000,000
Less: 12b-1 Charges $352,000,000 * 0.75%) $2,640,000
Asset at the end $349,360,000
Net asset value at the end of the year = $349,360,000/10,000,000 shares
Net asset value at the end of the year = $34.936
Speicher sells sports shoes and formal shoes. Sports shoes sell for $110 each and cost $50 in variable expenses to make. Formal shoes sell for $220 and cost $100 in variable expenses to make. Speicher’s fixed expenses are $50,000. If 35% of his revenues are from sports shoes, what is Speicher’s weighted average contribution margin ratio? Provide your answer in decimal form (i.e. 65.2% = 0.652) and to three decimal places. Do not round intermediary calculations.
Answers
Answer:
weighted contribution margin ratio = 0.545
Explanation:
contribution margin of sport shoes = $110 - $50 = $60
contribution margin ratio of sport shoes = $60 / $110 = 0.545454
contribution margin of formal shoes = $220 - $100 = $120
contribution margin ratio of sport shoes = $120 / $220 = 0.545454
35% of total revenues come from sport shoes
weighted contribution margin ratio (it is the same for both products) = 0.545454 = 0.545
1. When will countries trade? Assuming 2 goods, food and clothing, and that both countries’ preferences are homothetic (but not necessarily identical), determine whether two countries will trade in each of the following situations: (a) Countries have identical preferences and identical endowments. (b) Countries have identical preferences, their endowments differ, and their endowments are not in the same ratio of food to clothing. (c) Countries have identical preferences, their endowments differ, but the ratio of food to clothing is the same in both countries. (d) Countries have identical endowments but different preferences. (e) Countries have both different preferences and different endowments.
Answers
Answer:
(a) Countries have identical preferences and identical endowments.
Explanation:
Analyzing the statement, there is information that the preferences of countries are homothetic (but not necessarily identical) with respect to the 2 goods, food and clothing.
That is why it is correct to state that countries will not trade with each other, as countries have identical preferences and identical allocations, which means that the demands for these goods will be related to the prices of the goods and not in relation to income or preferences.
Therefore, there is no need to commercialize these two goods between these countries, except in situations of scarcity.
Yoshi Co.'s 12/31/2020 inventory on a FIFO basis was $980,000. The following information is available: Estimated selling price is $1,020,000; Estimated cost of disposal is $40,000; Normal profit margin is $120,000; and Current replacement cost is $900,000. At 12/31/2020, assuming Yoshi uses the loss method, what amount of loss should Yoshi record from applying LCM
Answers
Answer:
Yoshi Co.
The amount of loss that Yoshi Co. should record from applying LCM (the lower of Cost or Market price) is:
$40,000
Explanation:
a) Data and Calculations:
FIFO inventory on 12/31/2020 = $980,000
Current replacement cost = $900,000
Net realizable value = $980,000 ($1,020,000 - $40,000)
Normal profit margin = $120,000
Loss to be recognized based on current replacement cost = FIFO purchase cost minus Current replacement cost
= $80,000 ($980,000 - $900,000)
b) Under the US GAAP (generally accepted accounting principles) of prudence and conservatism, the loss of $80,000 must be recognized in the current period, since the inventory will be booked at $900,000, its current replacement cost, which is lower than the FIFO purchase cost of $980,000.
4. Sectoral shifts, frictional unemployment, and job searches Suppose the world price of steel falls substantially. The demand for labor among steel-producing firms in Pennsylvania will . The demand for labor among automobile-producing firms in Michigan, for which steel is an input, will . The temporary unemployment resulting from such sectoral shifts in the economy is best described as unemployment. Suppose the government wants to reduce this type of unemployment. Which of the following policies would help achieve this goal? Check all that apply. Improving a widely used job-search website so that it matches workers to job vacancies more effectively Establishing government-run employment agencies to connect unemployed workers to job vacancies Increasing the benefits offered to unemployed workers through the government's unemployment insurance program
Answers
Answer:
decrease
increase
structural unemployment
Improving a widely used job-search website so that it matches workers to job vacancies more effectively
Establishing government-run employment agencies to connect unemployed workers to job vacancies
Explanation:
If the world price of steel falls, the profits that can be earned from producing steel would fall. This would make steel-producing firms cutback on production. If they do this, they would lead less labour, so the demand for labour would fall.
The decrease in the price of steel would make purchasing steel by automobile companies cheaper. This would lead to a rise in production and as a result an increase in the demand for labour.
Structural unemployment occurs when there is a mismatch between the skills of labour and the jobs available. Measures taken to increase information on available jobs would reduce this type of unemployment
On April 1, 2020, the City of Southern Ponds issued $5,000,000 in 4% general obligation, tax supported bonds at 101 for the purpose of constructing a new police station. The premium was transferred to a debt service fund. A total of $4,990,000 was used to construct the police station, which was completed before December 31, 2020, the end of the fiscal year. The remaining funds were transferred to the debt service fund. The bonds were dated April 1, 2020, and paid interest on October 1 and April 1. The first of 20 equal annual principal payments of $250,000 is due April 1, 2021. In addition to reporting Bonds Payable and (unamortized) Bond Premium in the government-wide Statement of Net Position, how would the bond sale be reported
Answers
Answer:
$100,000
$350,000
Explanation:
The bond sale be reported as debt service expenditures for 2020 and 2021 can be calculated as follows
The Amount would be reported as debt service expenditures for 2020
= $5,000,000 x 4% x 1/2 year
= $100,000
The amount would be reported as debt service expenditures for 2021
= $5,000,000 x 4% + $250,000
= $350,000
you can acquire an existing business for $2 million. You are uncertain about future demand. There is a 40% chance of high demand, in which case the present value of the business will be $3 million. There is a 25% chance of moderate demand, and the associated present value is $1.5 million. Finally, there is a 35% chance of low demand, in which case the present value is $1 million. Draw a decision tree for this problem. What is the expected net present value of the business
Answers
Answer:
Expected net present value of the project = $1,925,000
Explanation:
The cost of acquiring business = $2,000,000
Expected net present value of the project = High demand NPV*High demand percent + Moderate demand NPV*Moderate demand percent + Low demand NPV*Low demand percent
Expected net present value of the project = $3,000,000 *40% + $1,500,000*25% + $1,000,000*35%
Expected net present value of the project = $1,200,000 + $375,000 + $350,000
Expected net present value of the project = $1,925,000
Conclusion: The cost of acquiring business is more than expected net present value, it is advisable not to invest in the project.
is the present value of these cash flows? (Enter rounded answers as directed, but do not use rounded numbers in intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) Present value Investment X $ Investment Y $ (b) Which of these cash flow streams has the higher present value at 5 percent? (Click to select) Requirement 2: (a) If the discount rate is 23 percent, what is the present value of these cash flows? (Enter rounded answers as directed, but do not use rounded numbers in intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) Present value Investment X $ Investment Y $ (b) Which of these cash flow streams has the higher present value at 23 percent?
Answers
Answer and Explanation:
1A. For investment X, given 6% discount rate, 6700 PMT, N= 9 years
Present value of investment X= 6700* PVIF using 6%, 9 years
= $45751.34
For investment Y, given 6% discount rate, 9200 PMT, N= 5 years
Present value of investment Y =9200*PVIF using 6%, 9 years
=$38753.75
1B. Investment X from the above has higher present value
2A. For investment X, given 22% discount rate, 6700 PMT, N = 9 years
Present value of investment X
=6700*PVIF using 22% ,9 years
= $25368.11
For investment Y, given 22% discount rate, 9200 PMT, N = 5 years
Present value of investment X
=9200*PVIF using 22% ,N = 5 years
= $26345.49
2B. Investment Y from the above has higher present value.
The journal entry to record the transfer of units to the next department in process accounting is a(n):
Answers
Answer:
Decrease in one asset and an increase in another asset
Explanation:
The journal entry to record the transfer of units to the next department in process accounting is a(n):
i. Decrease in one asset
ii. Increase in another asset
Mr. C made the following gifts: $12,000 to a university to pay tuition costs for his niece. An undeveloped tract of land to his sister that had an adjusted basis to Mr. C of $4,000 and a fair market value of $25,000. Various shares of stock to his wife that had an adjusted basis to Mr. C of $15,000 and a fair market value of $40,000. Mr. C did not consent to gift-splitting. What is the total amount of taxable gifts
Answers
Answer:
$10,000
Explanation:
Gifts are only taxed when their fair market value is higher than $15,000. Any gifts made to your spouse are not taxable. Gift taxes are calculated on a per person base, as long as they do not exceed the lifetime exemption (which is $11.58 million).
The tuition costs of her niece are not taxable since they are less than $12,000. The stocks given to his wife are not taxable either. The only taxable gift is the land given to his sister which had a FMV of $25,000. The taxable amount = $25,000 - $15,000 = $10,000
to beter take into account the differential impact of fixed and variable costs, marketing managers canuse ____ pricing
Answers
Answer:
target return pricing
Explanation:
Target return pricing is a pricing method that uses a very simple formula:
target price = [unit cost + (desired return x capital)] /unit salesThe price is based on the ROI that the company expects from a certain product (or project).
Even though this is a fairly simple method for pricing a good or service, it can also have serious negative consequences:
it doesn't take in account consumers' tastes or preferenceswhat happens if the expected ROI is too high, that could kill a project that could have been successful otherwisethe time frames are not always exact, e.g. you believed that a project would last 5 years, but due to a technological breakthrough it only lasts 4In order to successfully apply this type of pricing strategy, a company must be able to achieve or exceed their sales goals.
What are the sources of brand equity?
Answers
Answer:
Ello, Imposter here
Explanation:
Brand equity is the commercial value that derives from consumer perception of the brand name of a particular product or service, rather than from the product or service itself.
hope this helps :P
Answer: According to Keller (2003) and his CBBE model, brand equity emerges from two sources namely brand awareness and brand image. According to this model, consumers build associations in their minds around a brand as the result of the marketing programs companies develop for their brands.
Explanation: None.
We sell to a customer paying with Visa and the fee is 2%. Part of the transaction would include a debit to:
Answers
Answer:
there are no available options, but the complete journal entry to record a credit card sale is:
Dr Cash account 98% of sale
Dr Credit card fees 2% of sale
Cr Sales revenue 100% of sale
Explanation:
Since VISA payments are automatic, you can debit cash directly. There is no need to debit accounts receivable and then once the payment is confirmed, debit cash. Some credit cards do not pay automatically, and in those cases you should debit accounts receivable.
Instead of credit card fees, some people use credit card discount, or credit card expense, but all these accounts are basically the same. They are all expense accounts.
If a company purchases equipment costing $4,500 on credit, the effect on the accounting equation would be: Multiple Choice Assets increase $4,500 and liabilities decrease $4,500. One asset increases $4,500 and another asset decreases $4,500. Equity decreases $4,500 and liabilities increase $4,500. Equity increases $4,500 and liabilities decrease $4,500. Assets increase $4,500 and liabilities increase $4,500.
Answers
Answer: Assets increase $4,500 and liabilities increase $4,500.
Explanation:
An asset are the properties which a business or an organization owns. An asset possess an economic value.
Since the equipment purchased is an asset, this will lead to an increase of assets by $4500 and since it was bought on credit and hasn't been paid for, liabilities will also increase by $4500.
A bank offers 8.00% on savings accounts. What is the effective annual rate if interest is compounded semi-annually?Percentage Round to: 4 decimal places (Example: 9.2434%, % sign required. Will accept decimal format rounded to 6 decimal places (ex: 0.092434))
Answers
Answer:
Effective Annual Rate = 8.1600%
Explanation:
The effective annual rate the interest rate that is adjusted for compounding over a given period of time. It is given by the formula:
[tex]r = (1+\frac{i}{n})^n -1\\where:\\r = effective\ annual\ rate\\i = nominal\ interest\ rate\ = 8.00\% = 0.08 \\n = number\ of\ compounding\ periods\ per\ year\ = 2\ (semi-annually)[/tex]
[tex]r = (1+\frac{0.08}{2})^2 -1\\r = (1\ +\ 0.04)^2 - 1\\r = (1.04)^2 - 1\\r = 1.0816 - 1\\r = 0.0816\\r = 8.1600 \%[/tex]
How do you think Alden, from Situation 2, found out about Revinate? Given all the online companies that might help your business connect you with customers, how would you choose one?
Answers
The correct answer to this open question is the following.
Although you forgot to include the proper context of the question or further references, we can comment on the following.
Alden found out about Revinate by searching on the web trying to find the best software options that could help the company to identify the customer's reviews so Gregory E. Alden could make the best decisions for his company.
Gregory E. Alden is the manager of the company Woodside Hotels, located in Northern California. He was trying to monitor the comments of his high-class clients because Woodside Hotels is in the luxurious hotel business. So knowing that constantly monitoring client's comments on social media pages such as TripAdvisor or Yelp can be an arduous and difficult task, Gregory searched for the best software company to monitor client's comments on social media. That is how he found Revinate, a company that helps managers to track reviews so they can make the best business decisions once they have learned what their customers desire. And that is exactly what I would do to choose the kind of company to know about the preferences of my customers.
Bryant Company has a factory machine with a book value of $88,100 and a remaining useful life of 7 years. It can be sold for $30,900. A new machine is available at a cost of $413,300. This machine will have a 7-year useful life with no salvage value. The new machine will lower annual variable manufacturing costs from $579,100 to $505,700. Prepare an analysis showing whether the old machine should be retained or replaced.
Answers
Answer: The old factory machine should be replaced as from computation below will lead to a lower cost for Bryant Company
Explanation:
Particulars Retain Equipment Replace Equipment Net Income
Increase/Decrease
Variable manufacturing costs
$4,053,700 $3,539,900 $513,800
$579,100 x 7 $505,700 x 7
New machine cost $413,300 -$410,300.
Sale of old machine -$30,900 $30,900.
Total $4,053,700 $3,922,300 $134,400
The old factory machine should be replaced as from computation will lead to a lower cost of $3,922,300 instead of $4,053,700 for Bryant Company
[Same investments as the prior question] Suppose two local start-ups are raising funding by issuing shares of equity at $10,000 per share. One start-up is a whiskey distillery; the other is a beer brewery. You estimate the expected returns on your investment to be 50% over five years in both cases. You also believe that the likelihood of being paid out $20,000 per share is greater with the distillery than with the brewery. Suppose now that you hold a portfolio of many other risky assets, and that this would be your N 1 investment. Which investment do you prefer to make, the distillery or the brewery
Answers
Answer:
you should purchase the brewery's stock
Explanation:
First of all, as investors we should always try to maximize our returns while avoiding risks. It is really hard to balance both, but we must compare stocks to see which may represent a higher gain while posing the lesser or same risk.
Initial investment in each = $10,000 (equal for both)expected returns over 5 years = $5,000 (equal for both)but there is a higher possibility of the distillery's stock being more valuable, and that makes a difference.Both stocks seem equally risky, but they are not. When you calculate expected returns, you multiply the possible returns by their probability. I'm not sure how they calculated the expected returns of the above stocks, but the following can help you understand my point:
stock B return probability expected return
great 100% 25% 25%
normal 50% 50% 25%
bad 0% 25% 0%
total 100% 50%
stock D return probability expected return
great 100% 30% 30%
normal 50% 40% 20%
bad 0% 30% 0%
total 100% 50%
Both stocks have the same expected return, but stock B is less risky because the chance of being a bad investment is lower.
For most consumers, maximizing utility through consumption generally means finding good deals in order to maximize the utility received for each dollar spent. However, some makers of luxury goods believe that their customers actually achieve utility by paying high prices. As a result, lowering prices may lead to reduced sales for the makers of luxury goods. How is this counterintuitive concept rationalized by analysis of consumer behavior and the utility maximization rule
Answers
Answer:
The explanation of that situation is below.
Explanation:
To begin with, the most important factor to have in mind in the situation explained above is the fact that we are talking about a "luxury good" and therefore that when it comes to this type of goods is better when the majority of the people do not possess or at least they must represent the fact that they are exclusive for only some part of the population. That is why that those goods use the strategy of increase always the price because that will means that they are not affordable for the majority of the society but only for a few and that will give to the owner of the good a sense of uniqueness and with that it also comes the sense of superiority. That is why that when it comes to this type of good the analysis change and it collides with the other theory of utility maximation.
Crimson Inc. recorded credit sales of $797,000, of which $540,000 is not yet due, $170,000 is past due for up to 180 days, and $87,000 is past due for more than 180 days. Under the aging of receivables method, Crimson Inc. expects it will not collect 2% of the amount not yet due, 16% of the amount past due for up to 180 days, and 27% of the amount past due for more than 180 days. The allowance account had a debit balance of $3,800 before adjustment. After adjusting for bad debt expense, what is the ending balance of the allowance account
Answers
Answer:
$65,290
Explanation:
The computation of the ending balance of the allowance account is shown below:-
Bad Debts for accounts receivable not yet due is
= $540,000 × 0.02
= $10,800
Bad Debts for accounts receivable due for up-to 180 days:
= $170,000 × 0.16
= $27,200
Bad Debts for accounts receivable due for more than 180 days:
= $87,000 × 0.27
= $23,490
Ending balance of Allowance account:
= $3,800 + $10,800 + $27,200 + $23,490
= $65,290
Doug and Sue Click file a joint tax return and decide to itemize their deductions. The Clicks' income for the year consists of $89,000 in salary, $1,500 interest income, and $700 long-term capital loss. The Clicks' expenses for the year consist of $1,450 investment interest expense. Assuming that the Clicks' marginal tax rate is 35 percent, what is the amount of their investment interest expense deduction for the year
Answers
Answer:
$1,450
Explanation:
Interest Income = $1,500
Investment Interest expenses = $1,450
Allowed deduction limit investment interest is subject to investment income. So $1,450 is allowed as deduction
Your grandpa doesn't trust "young 'uns" so you are set to inherit a $1,000,000 trust fund on your 50th birthday. Your Grandpa also doesn't like banks so he has buried the cash somewhere on his 40-acre farm in a location that will be revealed to you by his lawyer since Grandpa will not be around when you turn 50. If you could possibly get your hands on it now (when you are 20), you could put it in a bank at 6% annual interest. If you were able to dig up the money now, how much would you have when you turn 50?
Answers
Answer:
FV= $5,743,491.17
Explanation:
Giving the following information:
Present value (PV)= $1,000,000
Number of periods (n)= 30 years
Annual interest= 6% = 0.06
To calculate the future value (FV), we need to use the following formula:
FV= PV*(1+i)^n
FV= 1,000,000*(1.06^30)
FV= $5,743,491.17
A company forecasts growth of 6 percent for the next five years and 3 percent thereafter. Given last year's free cash flow was $100, what is its horizon value (PV looking forward from year 4) if the company cost of capital is 8 percent?
a. $0
b. $1,672
c. $2,000
d. $2,676
Answers
Answer:
d. $2,676
Explanation:
The computation of the horizontal value is shown below:
FCF1 = (100 × 1.06) = 106
FCF2 = (106 × 1.06) = 112.36
FCF3 = (112.36 × 1.06) = 119.1016
FCF4 = (119.1016 × 1.06) = 126.247696
FCF5 = (126.247696 × 1.06) = 133.8225578
Now
Horizon value is
= FCF5 ÷ (Cost of capital - Growth rate)
= 133.8225578 ÷ (0.08 - 0.03)
= $2,676
Hence, the correct option is d.
According to the question,
The computation of the horizontal value will be:
→ [tex]FCF_1 = 100\times 1.06[/tex]
[tex]= 106[/tex]
→ [tex]FCF_2 = 106\times 1.06[/tex]
[tex]= 112.36[/tex]
→ [tex]FCF_3 = 112.36\times 1.06[/tex]
[tex]= 119.1016[/tex]
→ [tex]FCF_4 = 119.1016\times 1.06[/tex]
[tex]= 126.25[/tex]
→ [tex]FCF_5 = 126.25\times 1.06[/tex]
[tex]= 133.8226[/tex]
hence,
The horizon value will be:
= [tex]\frac{FCF_5}{Cost \ of \ capital - Growth \ rate}[/tex]
By putting the values, we get
= [tex]\frac{133.8226}{0.08-0.03}[/tex]
= [tex]2,676[/tex] ($)
Thus the above approach i.e., "option d" is right.
Learn more about cost here:
https://brainly.com/question/15576484
Big Box Store has operated with a 30% average gross profit ratio for a number of years. It had $107,000 in sales during the second quarter of this year. If it began the quarter with $18,700 of inventory at cost and purchased $72,700 of inventory during the quarter, its estimated ending inventory by the gross profit method is:
Answers
Answer:
$16,500
Explanation:
The computation of the estimated ending inventory is given below:
As We know that
Cost of goods sold = Beginning inventory + purchase made - ending inventory
And, the
Sales - gross profit = Cost of goods sold
So,
$107,000 - $107,000 × 30% = Cost of goods sold
Therefore, the cost of goods sold is
= $107,000 - $32,100
= $74,900
And, finally the ending inventory is
$74,900 = $18,700 + $72,700 - ending inventory
$74,900 = $91,400 - ending inventory
So, the ending inventory is
= $91,400 - $74,900
= $16,500
Q 20.27: Liberty Bicycles currently sells unassembled bikes for $240 each. The variable production costs for each bike are $35 and the fixed production costs are $72. Liberty is thinking about selling the bikes fully assembled for $300 each. The variable costs for assembling one bike will be $18 and the fixed costs will be $31. Given these figures, Liberty will increase its net income per unit by ________ if it opts to assemble the bikes.
Answers
Answer:
$11
Explanation:
Find the incremental effect on net income of assembling the bikes as follows :
Incremental analysis for assembling the bikes per unit
Sales ( $300 - $240) $60
Less incremental costs :
Variable costs ($18)
Fixed production costs ($31)
Incremental Income/(loss) $11
Conclusion
Thus Liberty will increase its net income per unit by $11 if it opts to assemble the bikes.
The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.55 per share on its stock. The dividends are expected to grow at a constant rate of 6 percent per year indefinitely. Investors require a return of 14 percent on the company's stock. a. What is the current stock price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What will the stock price be in 3 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What will the stock price be in 7 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answers
Answer:
(A) 20.54
(B) 24.46
(C) 30.88
Explanation:
(A) The current stock price can be calculated as follows
Po= 1.55(1+6/100)/(14/100-6/100)
= 1.55(1+0.06)/(0.14-0.06)
= 1.55(1.06)/0.08
=1.643/0.08
= 20.54
(B) The stock price after 3 years can be calculated as follows
Po = 1.55(1+6/100)^4/(14/100-6/100)
= 1.55(1+0.06)^4/(0.14-0.06)
= 1.55(1.06)^4/0.08
= 1.55(1.2624)/0.08
= 1.9567/0.08
= 24.46
(C) The stock price after 7 years can be calculated as follows
Po= 1.55(1+6/100)^8/(14/100-6/100)
= 1.55(1+0.06)^8/(0.14-0.06)
= 1.55(1.06)^8/(0.08)
= 1.55(1.5938)/0.08
= 2.470/0.08
= 30.88
Waterway Company sold 10,100 Super-Spreaders on December 31, 2020, at a total price of $1,050,400, with a warranty guarantee that the product was free of any defects. The cost of the spreaders sold is $535,300. The assurance warranties extend for a 2-year period and are estimated to cost $37,000. Waterway also sold extended warranties (service-type warranties) related to 1,800 spreaders for 2 years beyond the 2-year period for $10,800. Given this information, determine the amounts to report for the following at December 31, 2020: sales revenue, warranty expense, unearned warranty revenue, warranty liability, and cash. Amounts Reported in Income Sales revenue $ Warranty Expense Amounts Reported on the Balance Sheet Unearned Service Revenue $ Cash Warranty Liability
Answers
Answer:
Amounts Reported in Income
Particulars Amount
- Sales revenue $1,050,400
- Warranty expenses $37,000
Amounts Reported on the Balance Sheet
Particulars Amount
- Unearned service revenue $10,800
- Cash ($1,050,400 + $10,800) $1,061,200
- Warranty Liability $37,000
Delphi Company uses job-order costing. It applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, Delphi estimated that it would work 37,000 machine-hours and incur $222,000 in manufacturing overhead cost. The following transactions were recorded for the year: a. Raw materials were issued for use in production, $367,000 ($345,000 direct and $22,000 indirect). b. Employee costs were incurred: direct labor, $309,000; indirect labor, $44,000; and administrative salaries, $155,000. c. Factory depreciation, $175,000. d. Selling costs, $140,000. e. Manufacture overhead was applied to jobs. The actual machine hours for the year were 35,000 hours. a. Compute the total manufacturing overhead cost applied to jobs during the year.
Answers
Answer:
Allocated MOH= $210,000
Explanation:
First, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 222,000/37,000
Predetermined manufacturing overhead rate= $6 per machine hour
Now, we cal allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 6*35,000
Allocated MOH= $210,000
Creswell Corporation's fixed monthly expenses are $30,000 and its contribution margin ratio is 63%. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are $92,000?
a. $27,960.b. $62,000.c. $57,960.d. $4,040.
Answers
Answer:
Net income= $27,960
Explanation:
Giving the following information:
Fixed costs= $30,000
contribution margin ratio= 0.63
Sales= $92,000
First, we need to calculate the total contribution margin:
Total contribution margin= 92,000*0.63= 57,960
Now, the net income:
Net income= 57,960 - 30,000
Net income= $27,960