Answer:
no entry at the 2018 year-end. The Company uses direct method
bad debt expense 2,900 debit
accounts receivable 2,900 credit
--to record bad debt expense for 2019--
Explanation:
direct write-off method: we only do the adjustment of bad debt once it is determinated as uncollectible.
We do no entry at the end of 2018
on 2019 we recocgnize the bad debt expense and decrease account receivable.
b. 19.39%
c. 14.81%
d. 11.85%
e. 4.88%
Answer:
14.6 percent
Explanation:
Data provided in the question
The average return of large-company stock = 12.14 percent
The average risk-free rate of return = 2.49 percent
The average return of small-company stock = 17.09 percent
By considering the above information, the risk premium is
= Average return of small-company stock - Average risk-free rate of return
= 17.09 percent - 2.49 percent
= 14.6 percent
This is the answer but the same is not provided in the given options
We simply deduct the risk-free rate of return from the market return so that the risk premium could come
Variable expenses 750,000
Contribution margin 500,000
Fixed expenses 320,000
Net operating income $ 180,000
Required:
1. Compute (a) last year's CM ratio and the break-even point in balls, and (b) the degree of operating leverage at last year’s sales level.
2. Due to an increase in labor rates, the company estimates that next year's variable expenses will increase by $3.00 per ball. If this change takes place and the selling price per ball remains constant at $25.00, what will be next year's CM ratio and the break-even point in balls?
3. Refer to the data in (2) above. If the expected change in variable expenses takes place, how many balls will have to be sold next year to earn the same net operating income, $202,000, as last year?
4. Refer again to the data in (2) above. The president feels that the company must raise the selling price of its basketballs. If Northwood Company wants to maintain the same CM ratio as last year (as computed in requirement 1a), what selling price per ball must it charge next year to cover the increased labor costs?
5. Refer to the original data. The company is discussing the construction of a new, automated manufacturing plant. The new plant would slash variable expenses per ball by 40.00%, but it would cause fixed expenses per year to double. If the new plant is built, what would be the company’s new CM ratio and new break-even point in balls?
6. Refer to the data in (5) above.
a. If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $202,000, as last year?
b. Assume the new plant is built and that next year the company manufactures and sells 37,000 balls (the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage.
Answer:
Please find attached solutions
Explanation:
a. Last year contribution margin ratio
= Contribution margin / Sales
= $500,000 / $1,250,000
= 40%
ai Break even point in balls
But Contribution margin per unit
= $25 - $15
= $10 per unit.
Therefore ,
Break even point in balls
= Fixed cost / Contribution margin per unit
= $320,000 / $10
= 32,000 balls.
b. The degree of operating leverage at last year' s sales level
= Contribution margin / Net operating income
= $500,000 / $180,000
= 2.78
Please other solutions are as attached.
The manufacturing company must calculate and consider several factors when deciding on changes to labor costs and manufacturing processes, including the Contribution Margin (CM) ratio, break-even point, degrees of operating leverage, and the potential impact of a new automated plant.
The Northwood Company, which manufactures basketballs, has to make several business decisions based on manufacturing costs, sales, and net operating income. Many essential factors have to be calculated, such as the Contribution Margin (CM) ratio, the break-even point, the degree of operating leverage, and potential changes due to increased labor rates and a different manufacturing plant.
1. (a) Last year's CM ratio was 40% (500,000 / 1,250,000). The break-even point in balls is 32,000 balls (320,000 / 25 ×0.40). (b) The degree of operating leverage at last year’s sales level is 2.78 (500,000 / 180,000).
2. If variable expenses increase by $3.00 per ball, next year's CM ratio will be 28% ((25-18) / 25). The break-even point in balls is 45,714 balls (320,000 / (25×0.28)).
3. If the expected change in variable expenses takes place, 56,667 balls will have to be sold next year to earn the same net operating income, $202,000 ((320,000 + 202,000) / (25×0.28)).
4. To maintain the same CM ratio, the selling price per ball must be $30.00 next year ((15+3)/0.4).
5. If a new automated manufacturing plant is built, the new CM ratio would be 64% ((15×0.6) / 25) and the new break-even point in balls is 50,000 balls ((320,000×2) / (25×0.64)).
6. (a) If the new plant is built, 56,333 balls will have to be sold next year to earn the same net operating income, $202,000 ((320,000×2 + 202,000) / (25×0.64)). (b) If 37,000 balls are sold, the company's contribution format income statement would show sales of $925,000, variable expenses of $333,000, fixed expenses of $640,000, and a net operating loss of $48,000. The degree of operating leverage is negative in this case because of the loss.
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Answer:
More than $0 but less than or equal to $100.
Explanation:
The transportation cost is $2.
Load summary is AB = 12, AC = 25, AD = 12, BC = -19, BD = 21, CD = 34.
The total cost to move product between A and D and B and C combined is ;
A and D = 12 * $2 = $24
B and C = 19 * $2 = $38.
O Tanya wants to develop a partnership with his team illustrated by reciprocal influence, mutual trust, respect and liking, and a sense of common fates.
O Tanya seeks to motivate employees to pursue organizational goals above their own self-interests.
O Tanya likes to provide the guidance and support needed by employees and ties meaningful rewards to completion of objectives.
Answer:
The correct answer is: All of the above.
Explanation:
Transformational leadership is the type of leadership that provokes change in individuals and the environment they interact with. It creates positive change in individuals to make them good leaders in the long run. Leaders guide their followers through inspiration, commitment, influence, and consideration.
Answer:
The optimal stocking level is 45 muffins.
Explanation:
First we have to calculate the Overage cost Co = Purchase price - Salvage value = $0.2 - 0 = $0.2
Then the Underage cost Cu = Selling price - Purchase price =$0.80 - $0.2 = $0.60
Service level = Cu / (Cu + Co) = $0.60/($0.60+$0.2) = $0.75
Hence, optimal stocking level = Minimum demand + Service level *(Maximum demand - Minimum demand)
optimal stocking level = 30 + 0.75*(50-30) = 45
The optimal stocking level is 45 muffins.
Optimal stocking level = 68.75 Muffins