Answer:
$1.64 per share
Explanation:
The computation of Number of Shares for computing Diluted Earning per share is shown below:-
Proceeds expected = 5,300 × $6
= $31,800
No. of Shares re-purchased = $31,800 ÷ $11
= $2,891 (rounded)
Net Effect of Stock Option = 5,300 - $2,891
= 2,409 shares
Number of Shares for computing Diluted Earning per share = Outstanding shares + Net Effect of Stock Option
= 71,105 + 2,409
= 73,514
Diluted earnings per share for the quarter = Net income for the quarter ÷ Number of Shares for computing Diluted Earning per share
= $120,805 ÷ 73,514
= $1.64 per share
So, for computing the Number of Shares for computing Diluted Earning per share we simply applied the above formula.
Answer:
True.
Explanation:
The cable company will not have any incentive to cut costs. This is because it knows that its costs will be averaged to determine the average cost to which a certain percentage is then added to arrive at the selling price. Having the cost averaged in this way will not motivate the cable company to seek cost minimization strategies that it could use to increase its income.
The statement is false. Under the average-cost pricing policy, the cable company has the incentive to cut costs to potentially lower prices and increase market share.
False, under the average-cost pricing policy, the cable company does have incentives to cut costs. The average-cost pricing policy allows the firm to set the price equal to the average cost of production. If the cable company can lower its cost of production, it will be able to lower the price it charges, which could potentially increase its market share and profits. Consider an example where economies of scale come into play: if each firm produced at a higher average cost due to building their own power lines, they would raise prices to cover this cost. However, if a firm found a way to reduce the cost of power lines or production in general, they could lower their prices in comparison to other firms. This demonstrates the incentive for cost-cutting under average-cost pricing.
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A. Inventory turnover of A7X corporation is 15.59%.
B. Day's salesin inventory is 23.41
C. The inventory that sat on the shelf before it was sold is 23.41
Inventory turnover is the ratio that shows how many times a firm turned over its inventory related to its cost of goods sold (COGS) in a particular period, typically a year.
Days sales of inventory (DSI) is the average number of days taken for a company to sell its finished products. Days sales in inventory is a tool that helps to determine the efficiency of sales.
The time of days sale of inventory and the time it sits on the shelf is the same.
Hence,
A. Inventory turnover of A7X corporation is 15.59%.
B. Day's sales in inventory is 23.41
C. The inventory that sat on the shelf before it was sold is 23.41
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The inventory turnover for A7X Corporation is 15.59 times, meaning the company sells and replaces its inventory that many times a year. The days' sales in inventory is 23.42 days, which is the average time a unit of inventory sits on the shelf before it's sold.
The subject of this question pertains to the inventory turnover and the days' sales in inventory for A7X Corporation.
a. The inventory turnover is a measure of how many times a company has sold and replaced its inventory during a certain period. We can calculate it by dividing the cost of goods sold ($9,758,345) by the average inventory ($625,817). As such, the inventory turnover for A7X Corporation = 9,758,345 / 625,817 = 15.59 times.
b. The days' sales in inventory refers to the average number of days it takes to sell the inventory. It is calculated by dividing the number of days in a year (365) by the inventory turnover. So, the days' sales in inventory = 365 / 15.59 = 23.42 days.
c. The time a unit of inventory remains on the shelf before it's sold is basically the same as the days' sales in inventory. So, on average, a unit of inventory at A7X Corporation sits on the shelf for 23.42 days before it's sold.
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Ending raw materials inventory: 40% of the next quarter’s production requirements.
Ending finished goods inventory: 25% of the next quarter’s expected sales units.
Third-quarter production: 7,740 units.
The ending raw materials and finished goods inventories at December 31, 2019, follow the same percentage relationships to production and sales that occur in 2020. 5 pounds of raw materials are required to make each unit of finished goods. Raw materials purchased are expected to cost $5 per pound.
Prepare a production budget by quarters for the 6-month period ended June 30, 2020
Answer and Explanation:
The preparation of production budget is shown below:-
Carla Vista Company
Production budget
For 6 months Ending June 31
Quarter 1 Quarter 2 Six months
Expected unit sales 5,500 6,600
Add: Desired ending finished
goods unit 1,650 1,825
(6,600 × 25%) (7,300 × 25%)
Total required units 7,150 8,425
Less: beginning finished
goods unit 1,375 1,650
(5,500 × 25%) (6,600 × 25%)
Required production
units 275 6,775 7,050
Question Completion:
Sandersen Inc, sells minicomputers. During the past year, the company's sales were 3.00 million. The cost of its merchandise sold came to 2.00 million, and cash operating expenses were 400,000; depreciation expense was 100,000, and the firm paid 150,000 in interest on its bank loans. Also, the corporation paid 25,000 in the form of dividends to its own common stockholders.
Calculate the corporation tax liability.
The corporate tax rates are listed here:
15% $0-$50,000
25% $50,001-$75,000
34% $75,001-$10,000,000
35% over $10,000,000
Answer:
Sandersen Inc.
Computation of the Corporation's Tax Liability:
Taxable profit = $350,000
15% $0-$50,000 $7,500 ($50,000 * 15%)
25% $50,001-$75,000 6,250 ($25,000 * 25%)
34% $75,001-$10,000,000 93,500 ($275,000 * 34%)
35% over $10,000,000 0
Total Tax Liability = $107,250
Explanation:
Data and Calculations:
Sales Revenue $3,000,000
Cost of goods sold 2,000,000
Gross profit $1,000,000
Operating expenses 400,000
Depreciation expense 100,000
Operating profit $500,000
Interest expense 150,000
Profit before taxes $350,000
Income Taxes 107,250
Profit after taxes $242,750
Dividend 25,000
Retained Earnings $217,750
a. If you require a risk premium of 8%, how much will you be willing to pay for the portfolio?
b. Suppose the portfolio can be purchased for the amount you found in (a). What will the expected rate of return on the portfolio be?
c. Now suppose you require a risk premium of 15%. What is the price you will be willing to pay now?
d. Comparing your answers to (a) and (c), what do you conclude about the relationship between the required risk premium on a portfolio and the price at which the portfolio will sell?
Answer:
a. If you require a risk premium of 8%, how much will you be willing to pay for the portfolio?
the expected value of our portfolio = ($120,000 x 50%) + ($300,000 x 50%) = $210,000
the current market price of the investment = $210,000 / 1.13 = $185,840.71
discount rate = 5% + 8% = 13%
b. Suppose the portfolio can be purchased for the amount you found in (a). What will the expected rate of return on the portfolio be?
13%, it should be equal to the discount rate
c. Now suppose you require a risk premium of 15%. What is the price you will be willing to pay now?
the current market price of the investment = $210,000 / 1.21 = $175,000
discount rate = 5% + 15% = 20%
d. Comparing your answers to (a) and (c), what do you conclude about the relationship between the required risk premium on a portfolio and the price at which the portfolio will sell?
the higher the risk premium, the lower the market price of the portfolio
A 4 7
B 2 4
C 8 11
D 3 5
E 5 11
Answer:
Order of processing the jobs:
Job Critical Ratio
C 1.375
D 1.667
A 1.75
B 2.0
E 2.2
Explanation:
a) Data and Calculations:
Job Processing Job due Critical
Time (days) date (days) Ratio
A 4 7 1.75 (7/4)
B 2 4 2.0 (4/2)
C 8 11 1.375 (11/8)
D 3 5 1.667 (5/3)
E 5 11 2.2 (11/5)
b) The critical ratio (CR) dispatching indicates the priority sequencing that should be adopted to process work at a work center. The first process is to create the CR priority index number, which is obtained from the formula of due days divided by the processing days. Therefore, the job with the lowest CR is scheduled first.
To determine the order of processing using the critical ratio dispatching rule, the critical ratio for each job is calculated by dividing the time remaining until the job's due date by the processing time. The job with the highest critical ratio is processed first, followed by the job with the next highest critical ratio.
The critical ratio dispatching rule is used to determine the order in which jobs should be processed based on their due dates and processing times. The critical ratio is calculated by dividing the time remaining until the job's due date by the processing time. The job with the highest critical ratio should be processed first, followed by the job with the next highest critical ratio, and so on.
Therefore, the jobs should be processed in the following order: C, E, D, A, B.
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