Answer:
Parnevik Company
Journal Entries:
(a) March 1, 2020
Debit Notes Receivable (Goosen Inc.) $660,000
Credit Sales Revenue $660,000
To record the sale of goods in exchange for a 5-year, zero-interest-bearing note in the face amount of $1,062,937.
Debit Cost of Goods Sold $400,000
Credit Inventory $400,000
To record the cost of goods sold.
(b) December 31, 2020:
Debit Interest Receivable (Goosen Inc.) $55,000
Credit Interest Revenue $55,000
To record the interest receivable for 10 months on the note.
Explanation:
The sale of goods will be recorded net of the interest. Interest Receivable from Goosen Inc. will be accumulated until when it is settled by Goosen Inc. at the end of the note's 5-year life. By that time, the interest must have accumulated to $402,937 compounded yearly.
It was also estimated that the setup cost pool would have $100,000 of overhead, with 1,000 hours for the Standard and 1,500 hours for the Extreme.
A. What is the overhead rate per product under Traditional costing?
What is the overhead rate under Absorption Costing for:
B. The machine pool overhead rate
C. The setup pool overhead rate
Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Estimated costs and direct labor hours:
The total overhead= $300,000
Standard= 150,000 hours
Extreme= 50,000 hours
1) Under traditional costing, overhead gets allocated using a single plantwide manufacturing overhead rate.
To calculate the estimated manufacturing overhead rate we need to use the following formula:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Estimated manufacturing overhead rate= 300,000/200,000= $1.5 per direct labor hour
Now, we can allocate overhead to each product:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Standard= 1.5*150,000= $225,000
Extreme= 1.5*50,000= $75,000
2) Machine:
Overhead= $200,000
Hours= 4,000 hours used on the Standard product and 1,000 hours used on the Extreme product.
Estimated manufacturing overhead rate= 200,000/5,000= $40 per hour
3)Set up:
Overhead= $100,000
Hours= 1,000 hours for the Standard and 1,500 hours for the Extreme.
Estimated manufacturing overhead rate= 100,000/2,500= $40
b.Meteor
c.Cash cow
d.Shiner
e.Top dog
Answer:
It is Star (B)
Explanation:
Option (a) True. Star is a product with high relative market share in a high growing market . This product is full of potential but require more investment and spending in the areas of advertising,innovation and market research in order to maintain its market leadership position. Hence, it might be cash neutral at this stage.
In the long-run, it will eventually turns to cash cow in the portfolio if we can sustain its position.
Option(b) Meteor. False. This does not exist in product portfolio matrix.
Option (c) Cash cow. False.
This product has a large relative market share in a stagnating (mature) market, profits and cash flows are expected to be high. Because of the lower growth rate, investments needed should also be low.
Hence, they typically generate cash in excess of the amount of cash needed to maintain the business and this ‘excess cash’ is supposed to be ‘milked’ from the Cash Cow for investments in other business units (Stars and Question Marks). Cash Cows ultimately bring balance and stability to a portfolio.
Option (d) Shiner. False .It does not exist
Option (e) Top dog. It is a product with low relative market share in a stagnant market.
b. protective effect plus revenue effect.
c. consumption effect plus redistribution effect.
d. production distortion effect plus consumption distortion effect.
e. None of the above.
Answer:
Option e. is correct
Explanation:
The Terms of Trade is equal to the average price of exports / by the average price of imports. The terms-of-trade refers to the relative price of exports in terms of imports.
Protective effect refers to the wasted resources due to production of good at a higher cost. Consumption effect refers to the loss to consumer due to higher price that leads to less consumption.
Should the home country be "large" relative to the world, its imposition of a tariff on imports would lead to an increase in domestic welfare if the terms-of-trade effect exceeds the sum of the protective effect plus consumption effect
If you lose money, you will still have payments on it.
It is the best way to ensure you have retirement funds.
No investment is a sure deal
Answer:
Annual demand (D) = 2,400 sets
Holding cost (H) = $4
Ordering cost (Co) = $5
EOQ = √2 x 2,400 x $5
$4
EOQ = 77 units
Explanation:
Economic order quantity(EOQ) is the square root of 2 multiplied by annual demand and ordering cost per order divided by the holding cost per item per annum. EOQ is the quantity of stock that is bought each time a replenishment order is placed.
Answer:
The correct answer is $9,850,000
Explanation:
The Enterprise fund which will be reported, total other financing sources of the amount is computed as:
= Face Value - Cost of issuance
where
Face Value is $10,000,000
Cost of issuance is $150,000
Putting the values above:
= $10,000,000 - $150,000
= $9,850,000
Note: Premium will not be considered as it is asked for when the bonds are issued.
The total other financing sources reported by the Enterprise Fund would be $9,850,000.
The correct answer is $9,850,000.
When the city's Enterprise Fund issued revenue bonds with a face value of $10,000,000, it added a 2% premium to the face value. The premium is calculated by multiplying the face value by the premium rate, which is 2% in this case. So, the premium amount is $10,000,000 * 2% = $200,000.
The issuance costs are additional expenses incurred in the process of issuing the bonds. In this case, the issuance costs totaled $150,000.
Therefore, the total other financing sources reported by the Enterprise Fund would be $10,000,000 - $200,000 - $150,000 = $9,850,000.
#SPJ3