If production is kept the same, the company is predicted to sell every unit produced which would avoid a stockpile of inventory and also safeguarding an extra 5,000,000 units in ending inventory in case sales go above 30,000,000. In the end, B.E. Company’s net income would increase by a substantial amount due to an increase in sales rather than an increase in ending
Financial Analysis * The tax rate is approximately 30% 5.618.8=29.79% 5.418.1=29.83% 5.418=30% * Based on the industry average, a sports store of similar size should be making around $21000 or 67% more profitable than Rhodes’ store. * Assuming the lots are of the same size and bear the same tax burden, if the unused lot is sold off property taxes would be reduced by $6000 at the 2008 rate. All else being equal, this would increase net profit by 6000×0.30=$1800, for a total of $14400. Profit as a percentage of sales would increase from 2.1% to 2.4%. * Of the $18400 Rhodes made in mortgage payments last year, $8000 was interest.
Then Shuzworld H is shipping 500 units to warehouse 1 in addition to 1800 units to warehouse 3. Shuzworld F will ship 2200 units to warehouse 1. The excess 1500 is shipped to a Dummy destination as well as the Shanghi plant shipping 200 units to the dummy plant. When there was an increase in supply over demand the Dummy destination was created to ship the extra units. There is no cost attached to shipping to the dummy destination at this time.
Shuzworld needs to make a decision on which choice would be more economical: Refurbishing or reconditioning the equipment that is already being used, possibly buying new equipment, or possibly outsourcing the products to China. The cost of reconditioning is fixed at $50,000. On top of that there is a variable cost that is $1000 per every 1,000 shoes that are being produced. If brand new equipment is bought the fixed cost sits at $200,000 with an added variable cost which is $500 for each 1,000 units. If the choice of outsourcing is chosen then there are not any fixed costs.
$1,500,000/$12,000,000 = 0.125 or 12.5% Each dollar of revenue produces 12.5% of net income or profit. Cash flow= cash generated during the year The rough estimation of cash flow = net income + non -cash expenses, in this case, $1,500,000 + $1,500,000 = 3,000,000 C. Now, suppose the company changed its depreciation calculation procedures (still within GAAP) such that its depreciation expense doubled. How would this change affect Brandywine’s net income, total profit margin, and cash flow? Brandywine Homecare Income statement with double depreciation expense: Month ending December 31, 2007 Revenue $12,000,000 Total revenue $12,000,000 Expenses: Depreciation $ 1,500,000x2= 3,000,000 Other 12,000,000 x 75/100 = 9,000,000 Total expenses= Depreciation + Other expenses= 1,500,000x2+ 9,000,000= $12,000,000 Total revenue – total expenses = Net income or Profit - 12,000,000- 12,000,000= 0 What
A. Develop a distribution pattern that meets availability and demand constraints and minimizes total shipping costs for Shuzworld, utilizing the appropriate decision analysis tool. Alpha Shuzworld’s purpose is to increase its production in Shanghai from 1300 units to 2800 units. Although at present there is no increase in demand, they want to remain flexible in order to ensure future growth. If this proves to be profitable, they want to be able to change their transportation schedule.
(Points : 5) is increased with a debit is decreased with a credit is not an expense account All of the above 3. (TCOs A, B) Below is a partial list of account balances for Cerner Company: Cash $5,000 Prepaid insurance 500 Accounts receivable 2,500 Accounts payable 2,000 Notes payable 3,000 Common stock 1,000 Dividends 500 Revenues 15,000 Expenses 12,500 What did Cerner Company show as total credits? (Points : 5) $21,500 $21,000 $20,500 $22,000 4. (TCOs B, E) A small and private company may be able to justify using a cash basis of accounting if it has _____. (Points : 5) sales under $1,000,000 no accountants on staff insignificant receivables and payables all sales and purchases on account 5.
They gave a good estimate of how my decisions would affect business performance for the upcoming quarter. I was able to look at the pro-forma statements and make adjustments in my decisions before moving into the next quarter. For example, in quarter 2, I had decided to not add another sales site due to not having enough cash on hand. After looking over the pro-forma statements, I realized that I would have enough money to add another location for the next quarter and still have more than $300,000 cash left over at the end of the quarter. Operating efficiency was improved using just-in-time and lean operations techniques.
Suppose further that if the Federal Reserve changes the discount rate by 1 percentage point, banks change their reserves by 300. To increase the money supply by 2700 the Federal Reserve should A. reduce the discount rate by 3 percentage points B. reduce the discount rate by 10 percentage points C. raise the discount rate by 3 percentage points D. raise the discount rate by 10 percentage points 6. In the short run, a trade deficit allows more consumption, but in the long run, a trade deficit is a problem because A. the country eventually will consume more and produce less B. the country eventually will
,Sarah L. G January 6, 2013 Written Assignment #1 1. A) $1,000 with 5% interest after 10 years gives you $1,628. Therefore, you would gain $628 in interest. B) If the interest is withdrawn each year, a total of $500 would be earned because the $1,000 investment would earn $50 of simple interest each year. C) The answers are different because if the interest is left untouched, it makes the principal amount higher each year, giving more money after 10 years.