Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase variable costs for all sprinklers by an average of $0.70 per unit. The company also estimates that this change could increase the overall number of sprinklers sold by 10%, and the average sales price would increase $0.20 per unit. Waterways currently sells 490,000 sprinkler units at an average selling price of $28.60. The manufacturing costs are $7,866,260 variable and $2,011,486 fixed. Selling and administrative costs are $2,644,240 variable and $809,370 fixed. If the average sales price per sprinkler unit did not increase when the company began mass-producing the special-order sprinkler, what would be the effect on the company

Answer:

Effect on income= $26,950 decrease

Explanation:

Giving the following information:

Increase in unitary production costs= $0.7

Increase in units sold= 49,000

Variable selling and administrative costs= $2,644,240

Variable manufacturing costs= $7,866,260

First, we need to calculate the unitary variable manufacturing costs and unitary variable selling and administrative costs:

Unitary variable manufacturing costs= 7,866,260/490,000= $16.05 + 0.7= $16.75

Unitary variable selling and administrative costs= 2,644,240/490,000= $5.40

Now, to determine the effect on income, we need to use the following formula:

Effect on income= Increase in contribution margin new sales - decrease in contribution margin old sales

Effect on income= 49,000*(28.6 -  16.75 - 5.4) - 490,000*0.7

Effect on income= 316,050 - 343,000

Effect on income= $26,950 decrease

Diamond Bank expects that the Singapore dollar will depreciate against the dollar from its spot rate of $.43 to $.42 in 60 days. The following interbank lending and borrowing rates exist:

Lending Rate Borrowing Rate
U.S. dollar 7.0% 7.2%
Singapore dollar 22.0% 24.0%

Diamond Bank considers borrowing 10 million Singapore dollars in the interbank market and investing the funds in dollars for 60 days.

Required:
a. Estimate the profits (or losses) that could be earned from this strategy.
b. Should Diamond Bank pursue this strategy?

The following information pertains to Sunland Company.

1. Cash balance per bank, July 31, $7,688.
2. July bank service charge not recorded by the depositor $47.
3. Cash balance per books, July 31, $7,724.
4. Deposits in transit, July 31, $3,060.
5. $2,376 collected for Sunland Company in July by the bank through electronic funds transfer. The collection has not been recorded by Sunland Company.
6. Outstanding checks, July 31, $695.

Required:
a. Prepare a bank reconciliation at July 31, 2022.
b.Journalize the adjusting entries at July 31 on the books of Sunland Company.

Use this information about Department J to answer the question that follow. Department J had no work in process at the beginning of the period. 18,000 units were completed during the period, and 2,000 units were 30% completed at the end of the period. The following manufacturing costs were debited to the departmental work in process account during the period (assume the company uses FIFO and rounds cost per unit to two decimal places): Direct materials (20,000 at $5) $100,000 Direct labor 142,300 Factory overhead 57,200 Assuming that all direct materials are placed in process at the beginning of production, what is the total cost of the 18,000 units completed during the period

PS.53 Brother I.D. Ricks is a faculty member at BYU-Idaho whose grandchildren live in Oklahoma and California. He and his wife would like to visit their grandchildren at least once a year in these states. They currently have one vehicle with well over 100,000 miles on it, so they want to buy a newer vehicle with fewer miles and that gets better gas mileage. They are considering two options: (1) a new subcompact car that would cost $19,500 to purchase or (2) a used sedan that would cost $13,700.

They anticipate that the new subcompact would get 41 miles per gallon (combined highway and around town driving) while the sedan would get 26 miles per gallon. Based on their road tripping history they expect to drive 18,000 miles per year. For the purposes of their analysis they are assuming that gas will cost $2.24 per gallon.

Required:
a. How many miles would the Ricks need to drive before the cost of these two options would be the same?
b. How many years would it take for these two options to cost the same?

Suppose that the U.S. government decides to charge wine producers a tax. Before the tax, 30,000 bottles of wine were sold every week at a price of $4 per bottle. After the tax, 25,000 bottles of wine are sold every week; consumers pay $6 per bottle, and producers receive $3 per bottle (after paying the tax). The amount of the tax on a bottle of wine is $ per bottle. Of this amount, the burden that falls on consumers is $ per bottle, and the burden that falls on producers is $ per bottle. True or False: The effect of the tax on the quantity sold would have been smaller if the tax has been levied on consumers. True

The maximum dollar amount that can be borrowed using the cash advance provision on a credit card is called the:

Chance Company had two operating divisions, one manufacturing farm equipment and the other office supplies. Both divisions are considered separate components as defined by generally accepted accounting principles. The farm equipment component had been unprofitable, and on September 1, 2018, the company adopted a plan to sell the assets of the division. The actual sale was completed on December 15, 2018, at a price of $600,000. The book value of the division’s assets was $1,000,000, resulting in a before-tax loss of $400,000 on the sale.
The division incurred a before-tax operating loss from operations of $120,000 from the beginning of the year through December 15. The income tax rate is 30%. Chance’s after-tax income from its continuing operations is $440,000.Required:Prepare an income statement for 2016 beginning with income from continuing operations. Include appropriate EPS disclosures assuming that 100,000 shares of common stock were outstanding throughout the year. (Amounts to be deducted should be indicated with a minus sign. Round EPS answers to 2 decimal places.)

Which of the following industries is most likely to have low equipment utilization?

Eastman publishing Company is considering publishing a paperback textbook on spreadsheet applications for business. The fixed cost of manuscript preparation, text- book design, and production setup is estimated to be $80,000. Variable production and material costs are estimated to be $3 per book. Demand over the life of the book is estimated to be 4,000 copies. The publisher plans to sell the text to college and university bookstores for $20 each.

Required:
a. What is the breakeven point?
b. What profit or loss can be anticipated with a demand of 4000 copies?
c. With a demand of 4000 copies, what is the minimum price per copy that the publisher must charge to break even?
d. If the publisher believes that the price per copy could be increased to $25.95 and not affect the anticipated demand of 4000 copies, what action would you recommend? What profit or loss can be anticipated?

A plastic manufacturing company has made a strategic decision to purchase a fleet of 3- D printers and use these printers to produce small and medium products for customers, instead of using traditional injection-mold techniques. Your Project Manager has projected that the new system will reduce labor costs by $36,000 each year over the next five years (Years 1-5). The purchase price (including installation and testing) of the new 3-D printers is $92,700. At the end of the project, the printers will be sold in the secondary market for $17,500. What is the net present value of this investment if the discount rate is 10.75% per year

On October 28, 2021, Zebra Technologies Corporation committed to a plan to sell a division that qualified as a component of the entity according to GAAP regarding discontinued operations and was properly classified as held for sale on December 31, 2021, the end of the company's fiscal year. The division's loss from operations for 2021 was $1,940,000. The division's book value and fair value less cost to sell on December 31 were $3,130,000 and $2,300,000, respectively. What before-tax amount(s) should Zebra Technologies Corporation report as loss on discontinued operations in its 2021 income statement

Since graduating from college five years ago, you have worked for a national chain of men's clothing stores. You have held several positions within the company and are currently manager of a local branch store.

Over the past three years, you have observed a pattern in the purchases of men's suits. You establish that the majority of men's suit purchases are black, brown, blue, gray, and olive. You also noticed that French cuff shirts are now fashionable, but few stores carry a wide color selection. Because you have always wanted to be in business for yourself, you decide to open a shop that will sell suits that are black, brown, blue, gray, and olive and to carry a wide array of colors of French cuff shirts. Your store will also sell fashionable ties and cuff links. You have decided that your store will brand itself for focusing on men's fashion; therefore, the name for your store will be "The Style Shop." You have discussed your plan with a number of people in the industry, and they believe your idea is a viable one and have encouraged you to pursue your dream of becoming an entrepreneur.

A new upscale outdoor shopping mall is opening nearby, and you have decided that now is the time to take the plunge and go into business for yourself. After developing a comprehensive business plan that includes marketing strategies and financial projections, you decide to open The Style Shop in the new mall.

One of the things you must decide in the process of transforming your idea into reality is the form of ownership for your new business. Should it be organized as a sole proprietorship, a partnership, or a corporation? What advantages or disadvantages are there to each choice? What do you think of the proposed name for the business, The Style Shop? use the chart below to organize your thoughts.

Business Entity Advantages Dis-Advantages

Sole Proprietorship
Partnership
Corporation

Penny, a full-time biochemist, loves stock car racing. To feed her passion, she bought a used dirt-track car and has started entering some local dirt-track races. The prize money is pretty small ($1,000 for the winner), but she really is not in it for the money. Penny reported the following income and expenses from her nights at the track: Prize money $3,660 Expenses: Transportation from her home to the races 1,760 Depreciation on the dirt-track car 4,780 Entry fees 5,400 Oil, gas, supplies, repairs for the dirt-track car 2,890 What are the tax effects of Penny’s racing income and expenses assuming that the racing activity is a hobby for Penny?

Income statement data for Whirlpool Industries from the company’s 2016 financial statements follow. Use these data to reformulate the income statement for 2014, 2015, and 2016 under the assumption that warranty expense is a constant percentage of revenue across all three years. Specifically, compute the adjustments to: warranty expense, income tax expense, and net income. The company’s tax rate is 30%.

12 Months Ended ($ millions) Dec. 31, 2016 Dec. 31, 2015 Dec. 31, 2014
Net sales $23,928 $24,101 $23,082
Warranty expense 366 610 372

Required:
Compute the average warranty expense to net sales rate over the past three years.

Almonds are a crop that grows on trees. Farmers do not need to replant trees every year to produce a crop of almonds. It takes at least five years after planting for trees to bear fruit. Several factors such as weather, disease, and long term projections about price impact the supply of almonds available. Barley is a grass that must be planted each year to produce a crop. The growing season is short, about three to four months. Several factors influence farmers' decisions to plant barley each year, including price, weather, and disease.

Based on this information. Which of the followings are true?

a. Almonds have a more inelastic supply in the short run because little can be done to change production in the short run.
b. It is impossible to infer anything about the price elasticity of supply for these two crops.
c. Barley has a more inelastic supply in the short run because barley is more dependent on price in the short run.
d. The crops have the same price elasticity of supply because they are both agricultural commodities.

1. What is an organization?

ChowMein Company is the exclusive Montana distributor of lawn mowers for a small manufacturing company. It sells only one model at $600 per unit and for which ChowMein pays $250. ChowMein's other variable costs amount to $50 per unit. Fixed costs are $2,000. In April, ChowMein sold 15 lawn mowers and it sold 20 in May.

Required:
Calculate the following values:

a. Monthly break-even point in sales dollars
b. Monthly break-even point in units
c. Monthly income for April
d. Monthly income for May
e. Margin of safety for April

The Green Company, an accrual basis taxpayer, provides business-consulting services. Clients generally pay a retainer at the beginning of a 12-month period. This entitles the client to no more than 40 hours of services. Once the client has received 40 hours of services, Green charges $500 per hour. Green Company allocates the retainer to income based on the number of hours worked on the contract. At the end of the tax year for contracts entered into for the current year, the company had $50,000 of unearned revenues from these contracts. The company also had $10,000 in unearned rent income received this year from excess office space leased to other companies. Based on the above, Green must include in gross income for the subsequent tax year:A. $60,000.B. $50,000.C. $10,000.D. $0.E. None of these.

Celia is a college student who just took her first trip to Las Vegas. While there, she charged $2,000 on her new credit card. When her credit card statement arrived, she noted that there were $3,000 in charges related to her Las Vegas trip! Horrified, she called the credit card company to dispute the excess charges. The credit card company insisted she had charged $3,000 on the card and Celia insisted she had only charged $2,000 on the card. Finally, Celia and the credit card company agreed that Celia would pay $2,500 as full payment of the credit card. Celia promptly sent them a check for $2,500. The following month, the credit card company billed Celia for the remaining $500! Celia sued, arguing that the credit card company had agreed to accept $2,500 as payment in full. The court agreed and ruled in Celia’s favor, holding that the credit card company and Celia had entered into an accord and satisfaction. But what if the facts of the case were different? Select each set of facts below that could change the outcome of the court’s decision.

Three hairstylist, Francois, Bernard and Mimi run Fast Service Hair Salon. They perform only shampooing and hairstyling activities. On average it takes 10 minutes to shampoo, 15 minutes to style hair, and 5 minutes to bill the customer. When a customer arrives, he or she first checks in the receptionist (Lulu). This takes only 3 minutes. One of the three stylists then takes charge of the customer and performs all three activities – shampooing, styling and billing consecutively. A customer has suggested that billing activity be transferred to Lulu. What would be the impact on salon's capacity (i.e., the maximum number of customers they can serve per hour)?

You want to invest $6,000 annually beginning now in order to accumulate $33,300 for a down payment on a house in five years. To find the annual interest rate you would need to receive to accomplish this goal, you would search the fifth row in the:

XYZ covered the following employees under its qualified plan. Rob, a 4% owner and employee with compensation of $32,000. Robin, Rob's cousin, a commissioned salesperson with compensation of $195,000 last year (the highest paid employee). Robin owns 2% of the company stock. Randy, the chief operating officer, who had compensation of $160,000 last year, but was not in the top 20% of paid employees. Assuming the company made the 20% election when determining who is highly compensated, which of the following statements is correct? a. Randy is a key employee, but not a highly compensated employee. b. Robin is a key employee, but Rob is not. c. Neither Rob, Robin, or Randy are highly compensated employees or key employees. d. Rob and Robin are both key employees.

Libby bought 250 stocks of a company named Xylet last year. Xylet’s total earning for the year is $ 4million and it has 1,000,000 outstanding stocks. What is Xylet’s Earning per share (EPS)?
A.
4
B.
0.04

C.
40
D.
400

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:

Selling price $157
Units in beginning inventory 200
Units produced 7,900
Units sold 7,500
Units in ending inventory 600

Variable costs per unit:
Direct materials $47
Direct labor $45
Variable manufacturing overhead $7
Variable selling and administrative expense $5

Fixed costs:
Fixed manufacturing overhead $260,700
Fixed selling and administrative expense $120,000

Required:
What is the total period cost for the month under variable costing?

Old Tyme Soda produces one flavor of a popular local soft drink. It had no work-in-process on October 31 in its only inventory account. During November, Old Tyme started 11,400 barrels. Work-in-process on November 30 is 1,900 barrels. The production supervisor estimates that the ending work-in-process inventory is 40 percent complete. An examination of Old Tyme’s accounting records shows direct material costs of $24,413 and conversion costs of $27,400 for November. All production is sold as it is produced. Required: a. Compute cost of goods sold for November. b. What is the value of work-in-process inventory on November 30

Jasper Golf Resort has a full-service hotel and three golf courses. The hotel, in addition to having over 100 hotel rooms, has two dining areas and a catering service for weddings and meetings. The hotel has a housekeeping staff and a repairs and maintenance group. In addition, there is a meetings coordinator with a technical staff to support meetings. The golf courses have a superintendent that oversees a grounds and maintenance staff. Each course has a pro shop that includes apparel and golf supplies and a lunch counter. In addition, there is a golf cart center that provides carts to each course.

Classify the following responsibility centers as investment center, profit center or cost center.

a. Jasper Golf Resort
b. Hotel
c. Golf Courses
d. House-keeping
e. Restaurants
f. Weddings and meetings
g. Grounds and maintenance
h. Carts
i. ProShops

Organization Culture Profile (OCP) is a framework that provides an insight into different organization types. Which of the
following does NOT accurately describe OCP in all corporations?
O Innovation
O Detail-oriented
O Outcome-oriented
O Values

The bargaining power of suppliers (clover tropika)?????​

Walton Boat Company makes inexpensive aluminum fishing boats. Production is seasonal, with considerable activity occurring in the spring and summer. Sales and production tend to decline in the fall and winter months. During year 2, the high point in activity occurred in June when it produced 207 boats at a total cost of $153,160. The low point in production occurred in January when it produced 38 boats at a total cost of $45,000. Required Use the high-low method to estimate the amount of fixed cost incurred each month by Walton Boat Company. Determine the total estimated cost if 200 boats are made.

Jennifer and Jamar are married and live in a home with their 13-year-old dependent son, Oscar. This year, they had the following tax information. Jamar’s salary $ 60,000 Jennifer’s Qualified Business Income from sole proprietorship 95,000 Dividend income 2,800 Deduction for self-employment tax 6,712 Itemized deductions 19,200 Compute adjusted gross income (AGI) and taxable income.

a. AGI $151,088; taxable income $89,430.
b. AGI $157,800; taxable income $114,000.
c. AGI $157,800; taxable income $133,000.
d. AGI $151,088; taxable income $108,630.