A parent company exchanges 30,000 shares of its $1 par value common stock, with a market value of $10/share, for all of the shares owned by the subsidiary's shareholders, resulting in a $300,000 total purchase price. On the acquisition date, the subsidiary reported a book value of Stockholders' Equity of $225,000, comprised of $90,000 of Common Stock and $135,000 of Retained Earnings. An examination of the subsidiary's balance sheet revealed that book values were equal to fair values for all assets except for PPE (net), which has a book value of $120,000 and a fair value of $195,000.
Required:
Prepare the entry that the parent makes to record the investment.
Answers
Answer:
Common Stock $90,000 (debit)
Retained Earnings $135,000 (debit)
Revaluation Reserve $75,000 debit)
Investment in Subsidiary $300,000 (credit)
Explanation:
The Parent (Investor) acquires the Assets and Liabilities (or Equity) of the Subsidiary (Investee) at their Acquisition date fair values.
Any excess of the Purchase Consideration over the Net Assets/ Equity taken over is known as Goodwill and is shown in the Consolidated financial Statements of the Group.
The above shows the elimination journal entry that would be prepared at the acquisition date. The Revaluation reserve has been created to adjust the fair value of PPE. There is no goodwill.
Related Questions
If Congress wanted to use contractionary fiscal policy to combat inflation, they wouldQuestion 10 options:Raise taxes and cut spendingCut taxes and raise spendingRaise taxes and raise spendingCut taxes and cut spendingDestroy moneyPrint money
Answers
If Congress wanted to use contractionary fiscal policy to combat inflation, they would raise taxes and cut spending.
Contractionary fiscal policy refers to measures taken by the government to reduce the size of the economy by decreasing the amount of money circulating in the economy. This policy is often used to combat inflation, which occurs when the general price level of goods and services is rising. Inflation can lead to a decrease in the purchasing power of money and erode the value of savings.
To implement a contractionary fiscal policy, Congress would raise taxes and cut spending.
Raising taxes means increasing the amount of money the government collects from individuals and businesses. This action reduces disposable income, leading to less consumer spending and a decrease in aggregate demand. As a result, the demand for goods and services decreases, which helps to lower inflation.
On the other hand, cutting government spending means reducing the amount of money the government spends on various programs and services. This action directly reduces the demand for goods and services in the economy, as the government is a significant spender. When government spending decreases, it further contributes to the reduction in aggregate demand, which in turn helps to combat inflation.
In summary, to use contractionary fiscal policy to combat inflation, Congress would raise taxes and cut spending. This action would reduce disposable income and decrease aggregate demand, leading to a reduction in the general price level of goods and services, and ultimately help to control inflation.
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Multiple Choice Questions _which level of management is responsible for establishing a vision for the organization, developing broad plans and strategies and directing of an organization set by executives?
Answers
Answer: Executive manager (Top manager)
Explanation:
Answer:
Top Level Managment
Explanation:
The level of management at which the managers are responsible for implementing and controlling the plans and strategies of the organization is Top Level Management. The top level managers are responsible to formulate plans and policies to achieve the set of organizational objectives.
1) using information in this case study , estimate Mylans yearly profit.Do not include opportunity cost and assume families do not use discounts or coupons
2) 2. (1 point) Again, use information in this case study. Assume that the cost to develop the Epi-Pen was the average cost to bring a new drug to market, and that every Epi-Pen is sold at full price. At a price of $600 per two-pack, how many two-packs would be necessary to recoup the costs? What about a price of $100 per two-pack?
3) (1 point) What might cause Mylan to reduce the price of the Epi-Pen?bu
Answers
its 200
Explanation:
600-100=500-2=498 600+100=700-2=798 798-498= 200
If outsiders had more say in union contracts then it is likely that union wages would be
A. lower so unemployment would be higher. B. higher so unemployment would be lower. C. lower so unemployment would be lower. D. higher so unemployment would be higher.
Answers
If outsiders had more say in union contracts then it is likely that union wages would be lower so unemployment would be higher.
What is unemployment?The OECD defines unemployment as people over a certain age who are currently looking for work but who aren't employed or self-employed. Its unemployment rate, which can be used to determine the degree of unemployment, is calculated using the number of unemployed people as a percent of the labor force. The phrase "unemployed" generally refers to somebody who is not working or otherwise earning a living. There are several different types of poverty, including involuntary, cyclical, frictional, structural, and voluntary. There are essentially two types of unemployment in India.
There are four main types of unemployment in an economy: frictional, structural, cyclical, & seasonal. Each category has a unique reason.
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Explain all the reasons why a decrease in the price of a product would lead to an increase in purchases of the product?
Answers
Develop a managerial report (1,000-1,250 words) summarizing your analysis of the OEI service capabilities. Make recommendations regarding the number of technicians to be used when OEI reaches 20 and then 30 customers, and justify your response. Include a discussion of the following issues in your report:
What is the arrival rate for each customer?
What is the service rate in terms of the number of customers per hour? (Remember that the average travel time of 1 hour is counted as service time because the time that the service technician is busy handling a service call includes the travel time in addition to the time required to complete the repair.)
Waiting line models generally assume that the arriving customers are in the same location as the service facility. Consider how OEI is different in this regard, given that a service technician travels an average of 1 hour to reach each customer. How should the travel time and the waiting time predicted by the waiting line model be combined to determine the total customer waiting time? Explain.
OEI is satisfied that one service technician can handle the 10 existing customers. Use a waiting line model to determine the following information: (a) probability that no customers are in the system, (b) average number of customers in the waiting line, (c) average number of customers in the system, (d) average time a customer waits until the service technician arrives, (e) average time a customer waits until the machine is back in operation, (f) probability that a customer will have to wait more than one hour for the service technician to arrive, and (g) the total cost per hour for the service operation.
Do you agree with OEI management that one technician can meet the average 3-hour service call guarantee? Why or why not?
What is your recommendation for the number of service technicians to hire when OEI expands to 20 customers? Use the information that you developed in Question 4 (above) to justify your answer.
What is your recommendation for the number of service technicians to hire when OEI expands to 30 customers? Use the information that you developed in Question 4 (above) to justify your answer.
What are the annual savings of your recommendation in Question 6 (above) compared to the planning committee's proposal that 30 customers will require three service technicians? (Assume 250 days of operation per year.) How was this determination reached?
Answers
The purpose of this research is to examine the service proficiency of OEI and suggest suitable staffing levels for accommodating a growing clientele of 20 and 30.
1. Arrival Rate for Each Customer: 1.25 customers per hour.
2. Service Rate in Terms of Customers per Hour: 1/3 customers per hour.
3. Travel Time and Waiting Time: The waiting time starts from the moment the customer contacts OEI until the machine is back in operation, including both travel and repair time.
What is the managerial report1. Arrival Rate for Each Customer: 1.25 customers per hour.
Based on historical data, the arrival rate for each customer is calculated by dividing the total number of customers by the total time. let us say that OEI receives an average of 10 customers per day, and the service operates for 8 hours a day. So, the arrival rate per customer is:10 customers / 8 hours
= 1.25 customers per hour.
2. Service Rate in Terms of Customers per Hour: 1/3 customers per hour.
The service rate takes into account the time required to complete a repair, including travel time. OEI estimates that each service call takes approximately 1 hour for travel time and 2 hours for the actual repair. So, the service rate is:1 customer / 3 hours
= 1/3 customers per hour.
3. Travel Time and Waiting Time:
OEI is different from traditional waiting line models since service technicians need to travel an average of 1 hour to reach each customer. In this case, the travel time and waiting time predicted by the waiting line model should be combined to determine the total customer waiting time.Learn more about managerial report from
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What basic economic question is addressed in the press release?
Answers
Answer:
for whom to produce
Explanation:
for whom to produce
Farris Company reported the following information for its two products:
Product X Product Y
Selling price per unit
$ 25 $35
Variable cost per unit
15 20
Due to labor constraints, demand for each of the products is greater than its supply. Product X requires one hour of labor to produce and product Y requires three hours of labor to produce. Which of the following statements is true?
Answers
Answer: To determine which statement is true, we need to compare the contribution margin per unit of each product. The contribution margin is the amount by which the selling price exceeds the variable cost per unit, and it represents the amount of revenue available to cover fixed costs and contribute to profit.
Explanation: The contribution margin per unit for each product is calculated as follows:Product X: $25 selling price - $15 variable cost = $10 contribution margin per unitProduct Y: $35 selling price - $20 variable cost = $15 contribution margin per unitHowever, since Product Y requires three times as much labor as Product X, we need to consider the contribution margin per hour of labor:Product X: $10 contribution margin / 1 hour of labor = $10 contribution margin per hour of laborProduct Y: $15 contribution margin / 3 hours of labor = $5 contribution margin per hour of laborTherefore, the true statement is that Product X has a higher contribution margin per hour of labor than Product Y. Even though Product Y has a higher total contribution margin per unit, it requires more labor to produce, which reduces its contribution margin per hour of labor. As a result, if there is a labor constraint, it may be more profitable to produce more units of Product X rather than Product Y.
How is the amount of property taxes that a person owes determined?
The local government levies property taxes based on the person's credit score.
The state government levies property taxes based on the length of time a person has owned their home.
The state government levies property taxes based on the person's taxable income.
The local government levies property taxes based on the value of real estate that a person owns.
Answers
The amount of property taxes that a person owes determined as the local government levies property taxes based on the value of real estate that a person owns. Option D.
What is meant by property tax?Immovable property, such as land and buildings, as well as tangible personal property that is mobile, such as machinery and equipment, are the main subjects of a property tax. Property taxes, which go toward paying for roads, schools, police, and other services, are the single greatest source of state and local income in the United States.
Property taxes are yearly levies on real estate. It is typically a local tax, though not necessarily. It is frequently based on the idea of market worth. The tax base may consist of solely land, only buildings, or other combinations of these elements.
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Olney Cleaning Company had the following items that require adjustment at year-end: For one cleaning contract, $10,550 cash was received in advance. The cash was credited to Unearned Service Revenue upon receipt. At year-end, $2,760 of the service revenue was still unearned. For another cleaning contract, $11,160 cash was received in advance and credited to Unearned Service Revenue upon receipt. At year-end, $3,240 of the services had been provided.
1. Prepare the adjusting entries needed at December 31.
2. What is the effect on the financial statements if these adjusting entries are not made?
If these adjusting entries were not made, revenue would be understated and liabilities would be overstated. This would result in an understatement of net income and an
understatement of shareholders’ equity.
3. What is the balance in Unearned Service Revenue at December 31 related to the two cleaning contracts?
Answers
The adjusting entries at December 31 are as follows:
Debit Service Revenue $2,760
Credit Unearned Service Revenue $2,760
Debit Unearned Service Revenue $3,240
Credit Service Revenue $3,240
How to explain the informationAdditionally, the financial statements would not accurately reflect the company's financial position or performance. The balance sheet would show an overstated amount of assets in the form of unearned revenue, and the income statement would understate the actual revenue earned during the year.
This could lead to incorrect decision-making and a misperception of the company's financial health by stakeholders, such as investors, lenders, and customers. It's important for companies to make accurate adjusting entries to ensure that their financial statements accurately reflect their financial position and performance.
The balance in Unearned Service Revenue at December 31 related to the two cleaning contracts is $10,550 - $2,760 + $3,240
= $11,040.
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design an approach that your team would recommend for Joseph and Nicholas to cover one area each that you deem necessary to aid in the planning and controlling functions
Answers
The combines strategic planning, performance measurement, effective communication, and continuous improvement to support Joseph and Nicholas in their planning and controlling functions. It ensures a well-defined direction, data-driven decision-making, collaboration, and a focus on growth and adaptability.
In order to aid in the planning and controlling functions, the following approach can be recommended to Joseph and Nicholas:
1. Establish Clear Objectives and Goals: The first step in planning is to establish clear objectives and goals for the team. It is important to have a clear understanding of what needs to be accomplished and what the team's priorities are.
2. Assign Responsibilities: Assigning specific responsibilities to team members helps to ensure that everyone is working towards a common goal. Joseph and Nicholas should each be assigned to cover one area that is necessary for planning and controlling functions. This will help to ensure that all aspects of the project are covered and that there is no overlap or duplication of efforts.
3. Develop a Schedule: Developing a schedule that outlines the key milestones and deadlines for the project is essential to effective planning and control. This will help to ensure that the project stays on track and that deadlines are met.
4. Monitor Progress: Regularly monitoring progress against the schedule and objectives is necessary to ensure that the project is progressing as planned. This will help to identify any issues or problems that arise and allow for corrective action to be taken.
5. Communicate: Effective communication is critical to the success of any project. Joseph and Nicholas should establish a regular communication schedule to ensure that everyone is up-to-date on the project's progress, any issues or problems that arise, and any changes to the schedule or objectives.
6. Make Adjustments: Finally, it is important to be flexible and make adjustments as needed. If the project is not progressing as planned, adjustments may be necessary to the schedule or objectives to ensure that the project stays on track and that goals are met.
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What is a "closing balance?
a.) The amountof money you have at the end of the statement period
b.)The amount of money you have when you close your account
c.)The amount of money you owe at the end of the statement period
d.)The amount of money waiting to be transferred out of your account
Faster pls
Answers
Answer:
The answer is A
Explanation:
A closing balance is the amount of money a business has at the end of a specific time period.
Your company purchased some expensive, sophisticated equipment in January of Year 5. The cost was $2,000,000 and the equipment was expected to have a useful life of 10 years. Now, in Year 6, the company has spent an additional $1,000,000 on the same equipment. $400,000 of this total was on ordinary repairs to fix things in order to maintain expected operating condition. However, the other $600,000 was spent on extraordinary repairs, which consisted of replacing the original engine so that the useful life of the entire equipment will be extended another five years. Company management was to "capitalize" the entire $1,000,000.
Write a memo around one page in length to your supervisor that explains the following:
The accounting error that has been made
The effect this error will have on the company's financial statements this year
The problems that might result
The importance of fixing the error and what needs to be done to fix the error
General outline of the memo:
Traditional Memo Header to Me from You with a nice summary title and date
para 1 - What is the problem and what is the impact - one or two sentences
para 2 - What should have happened - can be done as one sentence with a journal entry view
para 3 - How to adjust - once sentence with a journal entry view
para 4 - What should be done for the future monthly depreciation - one sentence showing the calculation with a journal entry
para 5 - Closing statement - one or two statements and request for review and approval
Answers
The accounting error that has been committed is the error of principle by treating $400000 as capital expenditure.
What is an accounting error?It should be noted that an accounting error simply means an error in account that wasn't intentional.
The effect this error include:
Understatement of expenses.Overstatement of depreciation.Overstatement of assets.In this case, the financial position of the company won't reflect a true and fair view of the position of the company.
In conclusion, in order to rectify the error, the ordinary repair should be treated as revenue.
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1. How many units will the domestic firms produce without a tariff if the foreign producer can sell the product at a $4 price?
Answers
Read the claim.
The tests for becoming a licensed driver seem unreasonably difficult;
What is the best counterclaim to complete the statement?
A. however, there is both a written and a driving portion of the test.
B. however, learner’s permits are issued at age 15 in most states.
C. however, drivers are unable to answer questions about road safety.
D. however, tougher requirements produce more prepared drivers.
Answers
Answer:D. However, tougher requirements produce more prepared drivers
Explanation:
I took the quiz
Answer:
Its D
Explanation:
Have a nice day
Those arguing against being socially responsible might make the claim that costs for social goals are ultimately
higher prices
Answers
After confirming that Mr. Boria's son is a new patient and that he is covered by Blue Cross/Blue Shield, what should you ask the patient?
A. Which Blue Cross Blue Shield plan is your son covered by, Mr. Boria?
B. When would you like to come in, Mr. Boria?
C. Has your son been seen in this office before, Mr. Boria?
Answers
Answer:
Option A
Explanation:
See
Mrborias son is convered already by blue cross or blue shield,we know that
So
we should ask what blue shield his son has been convered rather than when they come to achieve.
Option A is correct
Assume that one year ago, you bought 340 shares of a mutual fund for $36 a share, you received a capital gain distribution of $0.55 per share during the past 12 months, and the market value of the fund is now $40 a share.
a. Calculate the total return for your $12,240 investment.
Answers
The total return on this mutual fund investment is $12,427.
Total return on investment refers to the total profit or loss on an investment, including any capital appreciation and dividends or distributions received.
Here's how to calculate the total return on a mutual fund investment:
Step 1: Calculate the total initial investment by multiplying the number of shares by the purchase price per share. For this investment, the total initial investment is: 340 shares x $36/share = $12,240.
Step 2: Add any capital gain distributions received during the investment period. In this case, the capital gain distribution per share is $0.55, so the total capital gain distribution received is: 340 shares x $0.55/share = $187.
Step 3: Calculate the current market value of the investment by multiplying the number of shares by the current market price per share.
In this case, the current market value is: 340 shares x $40/share = $13,600.
Step 4: Add any dividends or interest payments received during the investment period, if applicable.
If no dividends or interest payments were received, skip this step.
Step 5: Calculate the total return by adding the initial investment, capital gain distributions, and dividends or interest payments (if applicable), and then subtracting any fees or commissions paid during the investment period.
In this case, the total return is: $12,240 + $187 = $12,427.
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Allocation is the distribution of a good or service.
True
False
Answers
Answer:
True
Explanation:
Allocation the action or process of allocating or distributing something.
Answer:
It's True
Explanation:
On edge 2021
The elasticities of the demand curves for firms in monopolistically competitive (MC) industries will become more like that of firms in pure competition as?
The number of rivals increases and product differentiation grows weaker
Answers
The elasticities of the demand curves for firms in monopolistically competitive (MC) industries will become more like that of firms in pure competition as the number of rivals increases and product differentiation grows weaker. [TRUE]
Definition of Monopolistic MarketIn a monopolistic market, there are many sellers offering homogeneous or similar merchandise. But the products sold are distinguished by their quality, shape, and size, and all existing sellers must compete optimally. Products sold in this market have different qualities, prices and sizes even in one type of product. Fixed price determination will usually be determined directly by the seller. So it does not use market mechanisms.
A monopolistic market is basically a market that exists between two extreme types of markets, namely perfect competition markets and monopoly markets. Therefore, this type of market contains elements or characteristics derived from monopoly competition markets and perfect competition markets. In other words, a monopolistic competition market can be interpreted as a market which has many sellers or producers who produce a variety of products.
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Which of the following is the least effective action individuals and families can take to protect the environment? Limiting the number of children they have Monitoring and enforcing regulations Choosing products and services from green companies Educating themselves on community and global environmental issues
Answers
Answer:
Monitoring and enforcing regulations.
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Discuss why positive thinking is critical in starting the entrepreneurship journey
Answers
1. Motivation: Starting a business can be challenging, and there will be times when things don't go as planned. Positive thinking can help entrepreneurs stay motivated and focused on their goals, even when faced with obstacles.
2. Resilience: Entrepreneurship is a journey filled with ups and downs. Positive thinking helps entrepreneurs build resilience and bounce back from setbacks quickly. It enables them to focus on solutions rather than dwelling on the problems.
3. Creativity: Positive thinking encourages entrepreneurs to think creatively and come up with innovative solutions to problems. Positivity can help entrepreneurs see possibilities where others may only see challenges.
4. Confidence: A positive mindset can help entrepreneurs approach challenges with confidence, which can be critical when making important business decisions. It helps entrepreneurs believe in their abilities and their vision, which can be contagious and attract others to their business.
5. Networking: Positive thinking can also help entrepreneurs build strong relationships with others. People are naturally drawn to positive individuals, and this can help entrepreneurs build a strong network of supporters, mentors, and partners.
In summary, positive thinking is critical in the entrepreneurial journey because it helps entrepreneurs stay motivated, builds resilience, encourages creativity, boosts confidence, and enables entrepreneurs to build strong relationships with others.
Suppose that the production function is y= 9k^0.5 N^0.5. With this production function, the marginal product of labor is MPN= 4.5K^0.5 N^-0.5. The capital stock is K= 25. The labor supply curve is NS= 100[(1-t)w]^2, where w is the real wage rate, t is the tax rate on labor income, and hence (1-t)w is the after-tax real wage rate.c.Suppose that a minimum wage of w=2 is imposed. If the tax rate on labor income, t, equals zero, what are the resulting values of employment and the real wage? Does the introduction of the minimum wage increase the total income of workers, taken as a group?
Answers
The resulting values for employment and the real wage are 70.3125 and $1.5811 per hour, respectively.
The introduction of the minimum wage does not increase the total income of workers taken as a group.
How to determine employment and real wageTo find the resulting values of employment and real wage, determine where the labor supply curve intersects the labor demand curve.
MPN =
\(4.5K^0.5 N^-0.5 = (9K N)^0.5 / (2KN)^0.5 = (9/2)^0.5 (K/N)^0.5 = w/P
\)
where P is the price of output, which we can assume is equal to 1.
This equation can be rearranged to solve for N:
N =
\((9/2) (K/w)^2\)
Plugging in K = 25 and w = 2, we get:
N =
\((9/2) (25/2^2) = 70.3125\)
To find the real wage, we can plug this value of N into the labor supply curve:
NS =
\(100[(1-t)w]^2 = 100(1-0)(2)^2\)
= 400
Since labor supply exceeds labor demand, the real wage will be bid down to the equilibrium level.
\((9/2)^0.5 (K/N)^0.5 = w/P
(9/2)^0.5 (25/N)^0.5 = 1/2
N = (9/2) (25/2^2) = 70.3125
w = 2(70.3125/100)^0.5 = 1.5811\)
The equilibrium real wage is $1.5811 per hour.
To determine whether the introduction of the minimum wage increases the total income of workers,
Total income before minimum wage = wN = 1.5811 x 70.3125 = $111.31
After the minimum wage of $2 is imposed, the real wage is fixed at $2, and the level of employment is determined by the intersection of the labor supply and demand curves at this wage:
N =
\((9/2) (25/2^2) / (2)^2 = 35.15625\)
Total income after minimum wage = wN = 2 x 35.15625 = $70.31
Since the total income of workers decreases from $111.31 to $70.31 after the minimum wage is imposed, the introduction of the minimum wage does not increase the total income of workers taken as a group.
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I WILL GIVE BRAIN
After seviewing the technical skills required to perform tasks in the manufacturing industry, do you think these skills are
more or less important than the interpersonal skills we discussed in previous units?
Answers
1. Suppose promoters of xyz music concerts knows that if they charge 400 birr per ticket, 2000 people would buy the tickets for concerts and if charge 200 birr per ticket 4000 people would by tickets over this price range; a. Find price elasticity of demand b. What types of price elasticity of demand "
Answers
The type of price elasticity of demand in this scenario is elastic, indicating that a decrease in ticket prices would lead to a relatively larger increase in ticket sales.
a. The price elasticity of demand can be calculated using the following formula:
Price Elasticity of Demand = Percentage Change in Quantity Demanded / Percentage Change in Price
To calculate the percentage change in quantity demanded, we can use the formula:
Percentage Change in Quantity Demanded = (New Quantity Demanded - Initial Quantity Demanded) / Initial Quantity Demanded
Using the given information:
Initial Quantity Demanded = 2000
New Quantity Demanded = 4000
Percentage Change in Quantity Demanded = (4000 - 2000) / 2000 = 100%
To calculate the percentage change in price, we use the same formula:
Percentage Change in Price = (New Price - Initial Price) / Initial Price
Using the given information:
Initial Price = 400 Birr
New Price = 200 Birr
Percentage Change in Price = (200 - 400) / 400 = -50%
Now, we can calculate the price elasticity of demand:
Price Elasticity of Demand = (Percentage Change in Quantity Demanded / Percentage Change in Price) = (100% / -50%)
b. Based on the calculated price elasticity of demand, we can determine the type of elasticity:
Since the price elasticity of demand is greater than 1 (100% / -50% > 1), it indicates that the demand for concert tickets is elastic. This means that the percentage change in quantity demanded is greater than the percentage change in price.
Elastic demand implies that consumers are sensitive to price changes, and a small decrease in price leads to a proportionately larger increase in the quantity demanded. In this case, when the price decreases from 400 Birr to 200 Birr, the quantity demanded increases by 100%.
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Problem 20-01 Warrants Neubert Enterprises recently issued $1,000 par value 15-year bonds with a 6% coupon paid annually and warrants attached. These bonds are currently trading for $1,000. Neubert also has outstanding $1,000 par value 15-year straight debt with a 8% coupon paid annually, also trading for $1,000. What is the implied value of the warrants attached to each bond
Answers
Answer:
The implied value of the warrants attached to each bond is $ 171.19
Explanation:
In order to calculate the implied value of the warrants attached to each bond we would have to calculate the following:
implied value of the warrants attached=Value of Bonds with Warrants-Value of Straight Bonds
Value of Bonds with Warrants=$1,000
Value of Straight Bonds=PV (8%, 15, 6% x 1000, 1000) = $828.81
Therefore, implied value of the warrants attached=$1,000-$828.81
implied value of the warrants attached=$ 171.19
The implied value of the warrants attached to each bond is $ 171.19
Cabot Company manufactures two products, Product C and Product D. The company estimated it would incur $177,910 in manufacturing overhead costs during the current period. Overhead currently is applied to the products on the basis of direct labor hours. Data concerning the current period's operations appear below:
Product C Product D
Estimated volume 3,800 units 3,000 units
Direct labor hours per unit 1.20 hours 0.80 hour
Direct materials cost per unit $11.60 $23.70
Direct labor cost per unit $10.80 $7.20
Requried:
a-1. Compute the predetermined overhead rate under the current method.
a-2. Determine the unit product cost of each product for the current year.
b. The company is considering using an activity-based costing system to compute unit product costs for external financial reports instead of its traditional system based on direct labor-hours. The activity-based costing system would use three activity cost pools. Data relating to these activities for the current period are given below:
Activity Cost Pools Estimated Overhead Costs Expected Activity
Product C Product D Total
Machine setups $12,890 180 190 370
Purchase orders 77,340 960 1,300 2,260
General factory 94,680 7,885 5,025 12,910
Total $184,910
Determine the unit product cost of each product for the current period using the activity-based costing approach.
Answers
Answer:
Results are below.
Explanation:
a)
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= 177,910 / (1.2*3,800 + 0.8*3,000)
Predetermined manufacturing overhead rate= $25.56 per direct labor hour
Now, we can allocate overhead to each Product line:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Product C= 25.56*4,560= $116,553.6
Product D= 25.56*2,400= $61,344
Unitary overhead Product C= 116,553.6/3,800= $30.67
Unitary overhead Product D= 61,344/3,000= $20.45
Finally, the unitary cost per product:
Product C= 30.67 + 11.6 + 10.8= $53.07
Product D= 20.45 + 23.7 + 7.2= $51.35
b)
First, we need to calculate the activities rates:
Machine setups= 12,890/370= $34.84
Purchase orders= 77,340/2,260= $34.22
General factory= 94,680/12,910= $7.33
Now, we allocate costs to each product:
Product C:
Machine setups= 34.84*180= 6,271.2
Purchase orders= 34.22*960= 32,851.2
General factory= 7.33*7,885= 57,797.05
Total= $96,919.45
Product D:
Machine setups= 34.84*190= 6,619.6
Purchase orders= 34.22*1,300= 44,486
General factory= 7.33*5,025= 36,833.25
Total= $87.938.85
Finally, the unitary overhead and unitary total cost:
Product C:
Unitary overhead= 96,919.45/3,800= $25.51
Unitary product cost= 25.51 + 11.6 + 10.8= $47.91
Product D:
Unitary overhead= 87,938.85/3,000= $29.31
Product D= 29.31 + 23.7 + 7.2= $60.21
Exercise 1-16 Cost Classifications for Decision Making [LO1-5] Warner Corporation purchased a machine 7 years ago for $383,000 when it launched product P50. Unfortunately, this machine has broken down and cannot be repaired. The machine could be replaced by a new model 300 machine costing $373,650 or by a new model 200 machine costing $342,000. Management has decided to buy the model 200 machine. It has less capacity than the model 300 machine, but its capacity is sufficient to continue making product P50. Management also considered, but rejected, the alternative of dropping product P50 and not replacing the old machine. If that were done, the $342,000 invested in the new machine could instead have been invested in a project that would have returned a total of $445,600. Required: 1. What is the total differential cost regarding the decision to buy the model 200 machine rather than the model 300 machine
Answers
Answer:
Missing word "2. What is the total sunk cost regarding the decision to buy the model 200 machine rather than the model 300 machine? 3. What is the total opportunity cost regarding the decision to invest in the model 200 machine?"
1. Differential cost of buying model 200 machine = Cost of model 200 machine - Cost of model 300 machine
= $342,000 - $373,650
= -$31,650
We'll have a savings of $31,650 if model 200 is purchased rather than model 300
2. $383,000 (The Cost of existing machine). Note: $383,000 is a sunk cost since it has already been incurred.
3. Opportunity cost is the total return of the project if the money was invested elsewhere. The Opportunity cost of investing in model 200 machine is $445,600 (Returns from the alternate project)
Critique the case: How did Karin originally approach the project? Comment specifically about Karin’s project management skills and approach? 2. While assessing the case, draw a project organigram, identifying the role-players/ stakeholders and whether they were all in original agreement of the project?
Answers
The project organigram should identify the role-players and stakeholders involved in the project and determine if they were all in original agreement.
Who are the role-players and stakeholders involved in the project?The project organigram outlines the key individuals and entities involved in the project including project managers, team members, clients, executives and any other relevant stakeholders.
It also highlights their roles, responsibilities, and relationships within the project structure. Assessing whether they were all in original agreement requires examining the project's initiation phase and the documented agreements such as contracts, memorandums of understanding or project charters.
Read more about project organigram
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What is a personal documentation?
What is the use?
Why is it important?
Thank you :)
Answers
Answer:
Personal documents are first-hand accounts of social events and personal experiences, and they generally include the writer's feelings and attitudes. They include such things as letters, diaries, photo albums, and autobiographies. Personal Documents may sometimes be referred to as Life Documents
Explanation:
Many other aspects of your life will run more smoothly with your documents in order. With well-organized health and prescription records, it is easier to stay on top of any health conditions you may have. The ability to lay hands on your insurance policies in the event of an issue arising will minimize stress too!