Question : (TCO 4) Which of the following groups is not among the external users for whom financial statements are prepared? Customers Suppliers Employees All of the above are external users of financial statements. (TCO 5) Misty Company reported the following before-tax items during the current year: Misty’s effective tax rate is 40% and there were 1,000 shares of common stock outstanding. What would be Misty’s income before extraordinary item(s)? Question 2.
Question 1. a) How many parts should you purchase each time you place an order? R=800- ORDERING COST Annual carrying cost of capital= 20% .20 lost per dollar R= 50000 H= .80 r= .20 cost per dollar C= unit cost H=rC Qo= √2RS/H= √(2(50,000)(800)/.8) = 10,000 10,000 parts should be purchased each time an order is placed. (b) To satisfy annual demand, how many times per year will you place orders for this part? R/Qo= 50,000/10,000= 5 times per year Question 2: (a) Determine BIM’s total annual cost of production and inventory control. Q= 4 weeks supply = 1600 units R= 400 units a week= 20000 units/ year C= purchase cost per unit= $1250 X (1-.20)= 1,000 H= holding cost= rC= $200 per unit / year S= setup cost= 2000 + 93.75 = $2,093.75 Setups per year= R/Q= 20000/1600= 12.5 Annual setup cost= (R/Q)(S)=12.5X $2,093.75= $26,172 Annual Holding cost= (q/2)(H)= (1600 /2)X $200= $160,000 Total Annual Cost= Annual Setup Cost+ Annual Holding Cost Total Annual Cost= 26,172+160,000 BIM’S Total Annual Cost= $186,172 (b) Compute the economic batch size and the resulting cost savings.
DSO = Receivables / Ave. sales per day Receivables= DSO * Ave. sales per day = 20 * 20,000 Receivables= $400,000 (3-2) Debt Ratio: Vigo Vacations has an equity multiplier of 2.5. The company’s assets are financed with some combination of long-term debt and common equity. What is the company’s debt ratio? Debt ratio = 1 – (1 / Equity multiplier) Debt ratio = 1 – (1/2.5) = 1 - .40 = .60 Debt ratio = 60% (3-3) Market/Book Ratio: Winston Washers’s stock price is $75 per share. Winston has $10 billion in total assets.
The C category, the low dollar items, which represents 5% of the annual dollar volume, but only about 55% of the total items. Almost 50% of the $40,000 to $100,000 of the cost to manufacture new ambulances is based on purchasing materials. Q2: If you were to take over as inventory control manager at Wheeled Coach, what additional policies and techniques would you initiate to ensure accurate inventory records? If I were the inventory control manager, I will not only depend on ABC analysis, but I would improve the physical control on the stockroom. By establishing a good cycle counting system, this procedure will ensure that all parts that appear on the bill of materials will coincide with the inventory reports.
Calculate the following: a) Break-even volume in CD units and dollars; b) Net profit if 1 million CDs are sold; c) Necessary CD unit volume to achieve a $500,000 profit. You are required to submit your typewritten answer to the assigned questions in the Isidore Assignments tool. Due: 5pm Friday Sept. 20, 2013 Zhibo Wang 1. Answer: Before installing a filter, bottles of wine sold=( 102,400+200,000)/(12-2.14)=30670 After installing a filter, the fixed cost increases 30,000. Bottles of wine sold=(102,400+200,000+30,000)/(12-2.14)=33712.
Dolls-R-Us Dolls-R-Us is a manufacture of toy dolls, with three product lines: Penny, Suzie, and Lori. Its annual fixed costs of $85,000 consist of the following: Rent: $36,000 Administration $25,000 Depreciation $12,000 Other $12,000 Information on the three products is shown below: | Penny | Suzie | Lori | Selling price | $14 | $10 | $20 | Direct costs (per unit) | $4 | $3 | $5 | Direct labor cost (per unit) | $3 | $2 | $5 | Sales volume (units) | 15,000 | 15,000 | 15,000 | Number of employees | 3 | 2 | 3 | Floor space (sq. meter) | 3,000 | 3,000 | 4,000 | Value of machinery and equipment | $30,000 | $25,000 | $35,000 | 1. Calculate the unit contribution for each of the three products. Penny – $7 Suzie - $5 Lori - $10 2.
Question: (TCO4) When the LIFO method is used, cost of goods sold is assumed to consist of: Your Answer: Instructor Explanation: LIFO means last in, first out, so the last units purchased are sold and the remaining units are assumed to consist of the first units. Points Received: 0 of 5 Comments: 4. Question: (TCO4) Given the following data, calculate the gross profit using the average-cost method, if the selling price was $20 per unit. Date, Item, Unit 1/1, Beginning inventory, 40 units at $12 per unit 3/5, Purchase of inventory, 18 units at $14 per unit 5/30, Purchase of inventory, 24 units at $18 per unit 12/31, Ending inventory, 20 unites Your Answer: Instructor Explanation: Units available for sale (40+18+24) =82, less ending inventory of 20 units tells us that 62 units were sold. To determine the average cost per unit, we need the value of the total units available for sale, (40*$12) +(18$14) +(24$18) =$1,164.
The total was then divided by the total expected attendance to get a variable cost per capita of $3.05 [1.2]. The fixed cost of $263,245 includes the other 90% of the mentioned variable costs and the talent, operations, and production expenses [1.3]. By using the breakeven formula, it was found that a total of 6,658 tickets need to be sold, assuming 1,665 are given away [1.4]. If ALLTEL wishes to earn $30,000, it must sell 7,923 tickets [1.5]. When given the scenario of selling 7,000 tickets at a $200,000 fixed-fee concert, the Pavilion can price the tickets at $32.95 in order to gain earnings of $30,000 after a 40% tax rate [2.1].