Answer:
18.75%
Explanation:
Data provided in the question:
Total sales = $500,000
Net income = $30,000
Total assets = $250,000
Debt to total assets ratio = 0.36
Thus,
Total debt = 0.36 × $250,000
= $90,000
Shareholders equity = Total assets - Total debt
= $250,000 - $90,000
= $160,000
Now,
Return on equity = Net income ÷ Shareholders Equity
= [ $30,000 ÷ $160,000] × 100%
= 18.75%
Answer:
1998, 1999, 2000:
Index value : -4.840, -4.840, -4.840
Days Receivable Index : 0.7243, 1.0546, 1.2562
Gross Margin Index : 0.5640, 0.4513, 0.2463
Asset Quality Index : 0.4293, 0.4300, 0.3116
Sales Growth Index : 1.3594, 1.1446, 2.2413
Depreciation Index : 0.1160, 0.1151, 0.0908
Selling & Admin Expense Index : 0.1962, 0.1650, -0.0716
Leverage Index : -0.2720, -0.2453, -0.3656
Total Accruals to Total Assets: -0.1491, -0.0285, -0.2709
Probability using norms-dist: 1.8% , 1.86%, 8.05%
Explanation:
Beneish's earning manipulation model is used to ascertain the probability of manipulation in the financial data. In this model ratio are calculated and then their index is identified to know an indication of possibility of fraud. In the given scenario the probability of manipulation is too high. The data is assessed through applying beneish model to understand actual financial position of the company.
Labor 1.5 hours @ $15.00 per hour
1. What was Glass Vessel’s flexible budget variance for materials in March? (As part of your answer, please indicate whether this variance was favorable or unfavorable.)
2. What was Glass Vessel’s labor efficiency/usage variance for March? (As part of your answer, indicate whether this variance was favorable or unfavorable.)
Must show work
Answer:
(i) -62.5 (Unfavorable)
(ii) -450 (Unfavorable).
Explanation:
(1) Material variance:
Material cost variance is the difference between standard cost for actual output produced and the actual cost of materials.
Material cost variance = (SQ × SP) – (AQ × AP)
Where SQ = Standard quantity for actual output, AQ = Actual quantity, SP = Standard Price and AP = Actual price.
This material cost variance can be subdivided into material price variance and material usage variance.
Material price variance = AQ × (SP – AP)
Material usage variance = SP (SQ - AQ)
In the problem, it is given that materials 2 pounds @ 1.25 per pound.
Therefore, SP = $1.25 and SQ per unit = 2 pounds.
It is given that Glass vessel produced 300 vases using 650 pounds of material.
Therefore, AQ = 650 pounds and actual output = 300 vases.
Therefore SQ for actual output:
= (SQ per unit) × (Actual output)
= (2 pounds) × (300 vases)
= 600 pounds.
It is given that Glass vessel purchased 650 pounds of material for $845.
Therefore Actual price = $845 ÷ 650 pounds
= $ 1.3
SP = $1.25 and AP = $1.3
SQ = 600 pounds and AQ = 650 pounds.
Material cost variance = (SQ × SP) – (AQ × AP)
Material price variance = AQ × (SP – AP)
Material usage variance = SP × (SQ-AQ)
Material cost variance (MCV):
= (600 × 1.25) – (650 × 1.3)
= -95 (Unfavorable)
Material price variance (MPV):
= 650 × (1.25 – 1.3)
= -32.5 (Unfavorable)
Material usage variance (MUV):
= 1.25 (600-650)
= -62.5 (Unfavorable)
Verification:
MCV = MPV + MUV
= (-32.5) + (-62.5)
= -95.
(2) Labor variances:
Labor cost variance is the difference between standard labor cost and the actual cost.
Labor cost variance = (SH × SR) – (AH × AR)
Where SH = Standard hours for actual output, AH = Actual hours, SR = Standard rate and AR = Actual rate.
Labor cost variance can be subdivided into Labor rate variance and Labor efficiency variance.
Labor rate variance = AH × (SR-AR)
Labor efficiency variance = SR × (SH – AH)
It is given that Labor 1.5 hours @ $15 per hour is the standard.
Therefore, SR = $15 and SH per unit = 1.5 hours.
SH for actual output = SH per unit × actual output
= 1.5 × 300
= 450 hours.
It is given that the actual total labor costs for March were $7200, which entailed 480 hours of labor.
Therefore, AH = 480 hours.
AR = Labor cost ÷ labor hours
= 7,200 ÷ 480
= $15.
SH = 450 hours, AH = 480 hours, SR = $15 and AR = $15.
Here, standard rate and actual rate are same. Therefore the labor rate variance is NIL. So the entire labor variance will come under labor efficiency variance.
Labor cost variance = (SH × SR) – (AH × AR)
Labor rate variance = AH × (SR-AR)
Labor efficiency variance = SR × (SH – AH)
Labor cost variance = (450 × 15) – (480 × 15)
= -450 (Unfavorable)
Labor rate variance = 480 × (15-15)
= 0
Labor efficiency variance = 15 × (450 - 480)
= -450 (Unfavorable).
a. Plastics will pay Joe $32000 to pollute.
b. Joe will pay Plastics $32000 not to pollute.
c. Joe will enforce his property rights and not allow Plastics to pollute.
d. Plastics will use its property rights to continue polluting.
2. If Plastics, Inc. owns the rights to the river, which of the following is the most likely outcome?
a. Plastics will pay Joe $32000 to pollute.
b. Joe will pay Plastics $32000 not to pollute.
c. Joe will enforce his property rights and not allow Plastics to pollute.
d. Plastics will use its property rights to continue polluting.
If Joe owns the rights to the river will enforce his property rights and not allow Plastics to pollute and clean the pollution. Plastic is breaking his rights on the river
In this scenario Joe has benefit for 20,000
and Plastic losses for 12,000
2.- If Plastic own the rights to the river Joe will pay Plastics $15,000 to not pollute. This will make Plastic earn money for cleaning the river and Joe gain 5,000 incremental benefit
Explanation:
(A) Joe has legal claims, so It will used before any economic options
(B) Joe doesn't have legal claims, but It notices that a good offer make both parties win.
Plastic will receive 15,000 dollars to clean the river, which has cost of 12,000 realizing a net gain of 3,000
While Joe estimated a marginal benefit of 5,000 after paying to Plastic to clean the river, (20,000 benefit - 15,000 cost
First one is b
Second one is a
B. 83.33%.
C. 120.00%.
D. 750.00%.
Answer:
A,. 13.33%.
Explanation:
Return on Investment (ROI) which gives the efficiency of a particular investment
We were given invested capital amounted as $6,000,000, and operating expenses as $5,000,000
We can calculate net income by substracing equal sales revenue from operating expenses
net income can be calculated as = ($5000000-$420000)
= $800000
ROI can be calculated as
net income/Capital investment
$800000/$6000000
=. 13.33%.
Determine the new selling price to break even next round.
Answer:
$18.80
Explanation:
New selling price = Old selling price - Adjustments
Old selling price = $19.00, Adjustments = 1 quarter of reduced raw material costs difference
New selling price = $19.00 - ($8.13 - $7.33)/4
New selling price = $19.00 - $0.20
New selling price = $18.80
So, the new selling price to break even next round is $18.80.
Upon assessing the costs of adding new suppliers and potential losses from a super-event, Phillip Witt of Witt Input Devices should manage three suppliers. Each supplier acts as an insurance against the super-event, with the cost to manage a new supplier being less than the potential loss from a super-event.
In this scenario, the president of Witt Input Devices, Phillip Witt, should consider the cost of adding a supplier against the potential risk of having them all shut down, causing a significant loss. The disadvantage of getting a new supplier is the marginal cost, which is $14,800. On the other hand, the potential loss that the firm could suffer in the event of a super-event is $480,000.
To solve this scenario, you need to consider each supplier as a form of insurance against the super-event. By looking at the probability of the super-event, we can obtain the expected loss per year which is 3% of $480,000 (0.03 * 480000 = $14,400).
Considering all factors, it appears that it would be economically feasible for Phillip Witt to manage three suppliers because the expected potential loss is less than the expense of adding a new supplier. Therefore, his best strategy is to maintain all three suppliers to minimize the overall risk.
#SPJ12
To minimize costs, Witt Input Devices should consider the likelihood of a total shutdown and the cost of managing additional suppliers. By calculating the expected cost for different numbers of suppliers, we can determine the optimal number that minimizes costs. This decision depends on the specific probabilities and costs involved.
To determine the number of suppliers that Witt Input Devices should use, we need to consider the likelihood of a total shutdown due to a 'super-event' and the cost of managing additional suppliers. According to the given information, there is a 3% probability in any year of a 'super-event' shutting down all suppliers for at least 2 weeks, resulting in a cost of $480,000. The 'unique-event' risk for any individual supplier is 5%. To minimize the overall costs, we should calculate the optimal number of suppliers by comparing the cost of managing additional suppliers to the potential losses from a shutdown.
The marginal cost of managing an additional supplier is $14,800 per year. Let's assume that Witt Input Devices can choose up to three nearly identical local suppliers, and we need to find the ideal number of suppliers for minimizing costs. We can start with one supplier and calculate the expected cost. If there is a 'super-event,' the cost will be $480,000. If there is no 'super-event,' the cost will be the annual cost of managing one supplier, which is $14,800.
Next, we can calculate the expected cost for two suppliers. The probability of both suppliers being shut down due to a 'super-event' is the square of the individual risk, which is (0.03)^2 = 0.0009. The cost would then be $480,000. The probability of only one supplier being shut down is calculated as the sum of the probability of exactly one supplier being shut down multiplied by the probability of the other supplier not being shut down. This comes out to be 2 * (0.03) * (0.97) = 0.0582. In this case, the cost would be 2 * $14,800 = $29,600. Finally, the probability of both suppliers being operational is (0.97)^2 = 0.9409, resulting in a cost of 2 * $14,800 = $29,600. Therefore, the expected cost with two suppliers is 0.0009 * $480,000 + 0.0582 * $29,600 + 0.9409 * $29,600.
We can extend this calculation to find the expected cost for three suppliers. The probabilities of all three suppliers being shut down, two suppliers being shut down and one supplier being operational, and one supplier being shut down and two suppliers being operational can be calculated using the same approach. The expected cost in this case will be 0.0009 * $480,000 + 0.0582 * $29,600 + 0.0582 * $29,600 + 0.9409 * $29,600.
By comparing the expected costs for each number of suppliers, we can determine the optimal number of suppliers that minimizes costs. The answer will be the number of suppliers with the lowest expected cost. The result will depend on the specific values of the probabilities and costs involved.
#SPJ2