If a company's revenue is $530,000, profit before taxes is $98,000, and product costs are $390,000 then:a)The company's gross margin totals $98,000 b)The company's period costs total $140,000. c)The company's period costs cannot be determined d)The company's contribution margin totals $140,000 e)The company's gross margin totals $140,000

Answers

Answer 1
Answer:

Answer: Option (e) is correct.

Explanation:

Given that,

Company's revenue = $530,000

Profit before taxes = $98,000

Product costs = $390,000

Company's gross margin = Company's revenue - Product costs

                                          = $530,000 - $390,000

                                          = $140,000

Therefore, The company's gross margin totals $140,000.


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The management of Kabanuck Corporation is considering dropping product V41B. Data from the company's accounting system appear below:Sales $939,000Variable expenses $413,500Fixed manufacturing expenses $525,500Fixed selling and administrative expenses $353,000All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $215,500 of the fixed manufacturing expenses and $126,500 of the fixed selling and administrative expenses are avoidable if product V41B is discontinued.What would be the effect on the company's overall net operating income if product V41B were dropped?

Answers

Answer:

It would be a differential loss of 174,500

Explanation:

Continue Or discontinued  

                       Continued    Discontinued Differential

Sales                     930,000            -                   (930,000)

Variable                    (413,500)           -                     413,500

Tracable Fixed Cost (342,000)           -                    342,000

Allocate cost           (536,500)      (536,500)               -  

Result                   (362,000)      (536,500)       (174,500)

If discountinued, sales, variable cost and tracable fixed cost are zero

Tracable cost

215,500 + 126,500

Allocate cost

total fixed cost - tracable cost

(525,500 + 353,000)   - 342,000

Once we got the numbers we calculate the diffferential income/loss

Equipment with a book value of $65,300 and an original cost of $133,000 was sold at a loss of $14,000. Paid $89,000 cash for a new truck. Sold land costing $154,000 for $198,000 cash, yielding a gain of $44,000. Long-term investments in stock were sold for $60,800 cash, yielding a gain of $4,150. Use the above information to determine this company’s cash flows from investing activities. (Amounts to be deducted should be indicated with a minus sign.)

Answers

Answer:

The company’s cash flows from investing activities is $221,100

Explanation:

Cash flow from investing activities:

It records that transactions which is related to the purchase and sale of long term assets. The purchase of fixed assets has outflow of cash so, it is deducted whereas the sale of fixed assets has inflow of cash so, it is added.

The cash flow from investing activities is shown below:

Add : Sale of equipment (Book value - loss) = ($65,300 - $14,000) = $51,300

Less : Purchase of new truck = - $89,000

Add: Sale of land = $198,000

Add: Sale of long term investment = $60,800

So, the cash flow from operating activities :

= $51,300 - $89,000 + $198,000 + $60,800

= $221,100

The other cost is not related to the investing activities. Therefore, it is not considered in the computation part.

Hence, the company’s cash flows from investing activities is $221,100

On December 31, 2021, Interlink Communications issued 5% stated rate bonds with a face amount of $113 million. The bonds mature on December 31, 2051. Interest is payable annually on each December 31, beginning in 2022. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $). Determine the price of the bonds on December 31, 2021, assuming that the market rate of interest for similar bonds was 6%.Table values are based on:
n = 30
i = 6%
Cash Flow Amount Present Value
Interest $111,300,000 $74,454,240
Principal $100,000,000 $13,137,000
Price of bonds $87,591,240

Answers

Answer:

Bond Price = $97.4457408 million rounded off to $97.45 million

Explanation:

To calculate the price of the bond today, we will use the formula for the price of the bond. We assume that the interest rate provided is stated in annual terms. As the bond is an annual bond, the coupon payment, number of periods and annual YTM will be,

Coupon Payment (C) = 113 million * 0.05 = 5.65 million

Total periods (n) = 30

r or YTM = 0.06 or 6%

The formula to calculate the price of the bonds today is attached.

Bond Price =5.65 * [( 1 - (1+0.06)^-30) / 0.06]  +  113 / (1+0.06)^30

Bond Price = $97.4457408 million rounded off to $97.45 million

Final answer:

The price of the bonds issued by Interlink Communications on December 31, 2021, is $87,591,240. This is calculated by adding the present value of the annual interest payments and the present value of the principal, both discounted at the market rate of 6%.

Explanation:

Interlink Communications issued 5% of the stated rate bonds with a face amount of $113 million on December 31, 2021. The bonds matured on December 31, 2051. To calculate the price of the bonds, we need to calculate the present value (PV) of the interest (5% x $113 million) and the principal ($113 million), both discounted at the market rate of interest (6%).

The bonds pay $5.65 million (5% x $113 million) annually. The PV of these payments is $74,454,240 based on the table given where n=30 and i=6%. The PV of the principal, the $113 million due at the end of the bond's term, is $13,137,000, again using the table values where n=30 and i=6%. So, the price of the bonds on December 31, 2021 is the sum of the PV of the interest and the PV of the principal, which is $87,591,240.

Learn more about Bond Pricing here:

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Your company expects to receive CAD 1,200,000 in 90 days. The 90 day forward rate for CAD is $0.80 and the current spot rate is $0.75. If you use a forward hedge, estimate the cost of hedging the receivable if, 90 days later, the spot rate for CAD 90 days later turns out to be $0.82.a. $50,000
b. $50,000
c. $75,000
d. $75,000

Answers

Answer:

Cost of hedging = $24,000

Explanation:

cost of hedging = 1,200,000 * ($0.80 - $0.82) = 1,200,000 * $0.02 = -$24,000

Since the actual forward rate was higher than th eexpected forward rte, the coampny lost money by hedging the operation. The cost of hedging the operation was $24,000.

A company that is based on a direct flow of authority from the top executive to subordinates is known as a ________ organization.

Answers

A company that is based on a direct flow of authority from the top executive to subordinates is known as a Line of Organization. In this type of organization, the decision and authority are structured from the highest position down directly to its subordinates.

While driving down his street one evening, Jonah notices that his neighbor has laid out an electric fan for the garbage to pick up the next morning. Jonah stops and has a look at the fan; it seems to be perfectly fine, so he takes it home with him. The fan would most likely be considereda. lost property.b. mislaid property.
c. abandoned property.
d. None of these are correct.

Answers

Answer:

The answer is option B) The fan would most likely be considered mislaid property.

Explanation:

Mislaid property fall among the categories of the common law of property which deals with personal property or chattel which has left the possession of its rightful owner without having directly entered the possession of another person.

Mislaid property refers to a property that has been left intentionally in a certain place and later forgotten. When a property is left in a certain place by the owner with an intention to take it later and if the owner finds it difficult to locate the property later.

Jonah's neighbor's fan falls into the category of mislaid property because, It seems to be perfectly fine and was intentionally laid out by his neighbor.