BUSINESS COLLEGE

Mickley Company’s plantwide predetermined overhead rate is $20.00 per direct labor-hour and its direct labor wage rate is $15.00 per hour. The following information pertains to Job A-500: Direct materials $ 280 Direct labor $ 150 Required: 1. What is the total manufacturing cost assigned to Job A-500? 2. If Job A-500 consists of 70 units, what is the unit product cost for this job? (Round your answer to 2 decimal places.)

Answers

Answer 1

Answer:

Answer and Explanation:

The computation is shown below;

Total hours for job A - 500

= Direct labor ÷direct labor wage rate

= $150 ÷ $15

= 10

Total over head cost = overhead cost per labor hours × no. of labor hours

= $20 × 10

= $200

total manufacturing cost = Direct materials cost + Direct labor cost + Total over head cost

= $280 + $150 + $200

= $630

Cost assigned to each unit

= total manufacturing cost ÷ number of units

= $630 ÷ 70

= $9

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Rachel's Designs has 1,700 shares of 5%, $50 par value cumulative preferred stock issued at the beginning of 2019. All remaining shares are common stock. Due to cash flow difficulties, the company was not able to pay dividends in 2019 or 2020. The company plans to pay total dividends of $14,000 in 2021. How much of the $14,000 dividend will be paid to preferred stockholders and how much will be paid to common stockholders

Answers

Answer:

$12,750 and $1,250

Explanation:

The computation of the dividend paid is shown below:

For 2021, the preference dividend is

= 1700 shares × $50 × 5%

= $4,250

Since in 2019 and 2020 the dividend is not paid

So, For 2019 and for 2020, the preference dividend is

= $4,250 × 2 years

= $8,500

So total preference dividend is

= $4,250 + $8,500

= $12,750

And, the total dividend paid is $14,000

So, for the common stockholder, it is

= $14,000 - $12,750

= $1,250

On December 31, 2018, the balance in Megan's Products Accounts Receivable was $680,000 and net credit sales amounted to $3,800,000 during 2018. An aging analysis of the accounts receivable indicated that $40,000 in accounts are expected to be uncollectible. Prepare the adjusting entries to record estimated bad debt expense using the percentage-of-receivables basis under each of the following independent assumptions:

Answers

Answer and Explanation:

The Journal entry is shown below:-

a. Bad Debt Expense Dr, $36,800 ($40,000 – $3,200)

To Allowance for Doubtful Accounts $36,800

(Being the bad debt expense is recorded)

For recording this we debited the bad debt expense as it increased the expenses and at the same time it reduced the assets so the allowance for doubtful accounts is credited

b. Bad Debt Expense Dr, $40,730 ($40,000 + $730)

To Allowance for Doubtful Accounts $40,730

For recording this we debited the bad debt expense as it increased the expenses and at the same time it reduced the assets so the allowance for doubtful accounts is credited

Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2021. Edison purchased the equipment from International Machines at a cost of $168,120. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Related Information: Lease term 2 years (8 quarterly periods) Quarterly rental payments $22,500 at the beginning of each period Economic life of asset 2 years Fair value of asset $168, 120 Implicit interest rate (Also lessee's incremental borrowing rate) 88 Required: Prepare a lease amortization schedule and appropriate entries for Manufacturers Southern from the beginning of the lease through January 1, 2022. Amortization of the right-of-use asset is recorded at the end of each fiscal year (December 31) on a straight-line basis.

Answers

Complete Question

The complete question is shown on the first uploaded image

Answer:

Now the calculation of this question and its solution is shown on the second and third uploaded image

Explanation:

For this question we will be making use of the excel formula

Now note since the installment is paid at the beginning of each quarter, there will be no interest charged in the first quarter and the whole amount paid will be adjusted against the outstanding lease balance.

A firm needs a data center with a life of three years. After three years, the data center is not needed and has no salvage value. The firm is deciding on the least costly alternative to access the data center. Under Plan A, the firm can incur an upfront cost of $120, 000. For this amount, the firm can purchase the center and move in immediately and use the facility. Under Plan B, the firm may lease the data center from owners on a monthly basis. The monthly rent is $3, 500. The firm’s borrowing cost based on APR (annual percentage rate) is 5% with semiannual compounding. Which option would you recommend to the firm? Purchase or rent? Show work. (20 pts.)

Answers

Answer:

Recommendation : The firm should lease the data center

Explanation:

To determine which option is better, we would compare the upfront cost of option A to the present value of the lease payment.

The present value of the lease payment is given as follows:

PV = A× 1-1+r^(-n) /r

A- semi-annual lease payment - 3,500× 6 = 21,000

r- semi-annual interest rate = 5%/2 = 2.5%

n- number of period = 3× 2 = 6.(note that interest is compounded semi- annually i.e every six month)

PV of the lease payment = 21,000 × (1 - 1.025^(-6))/0.025 =115,670.63.

Comparing the two options, we have :

Purchase cost = 120,000

Lease cost = 115,670.63.

The lease cost is lower and would save the firm 4329.37 i.e (120,000 - 115,670.63)

Recommendation : The firm should lease the data center

Final answer:

When comparing the cost of purchasing a data center outright versus leasing it on a monthly basis over three years, it is slightly more cost effective, factoring in the present value of money, for the firm to lease the data center. The total present value cost of leasing is approximately $119,199.09, while purchasing would be $120,000.

Explanation:

The subject matter of this question involves determining the least expensive option for accessing a data center over a span of three years, given two possibilities: purchasing the center outright (Plan A), or leasing it on a monthly basis (Plan B). It's a form of capital budgeting, specifically a cost comparison method.

For Plan A, the upfront cost is $120,000. This cost is incurred immediately and there are no further costs associated with it for the three-year period.

Plan B needs to be evaluated using the time value of money because the monthly lease payments are made over time. Given the borrowing cost/APR of 5% and the semiannual compounding, it means the interest is compounded twice a year. The monthly cost of leasing the data center is $3,500. Over three years (36 months), this would amount to $3,500 x 36 = $126,000.

However, since we need to factor in the cost of borrowing, we need to calculate the present value (PV) of the lease payments. Because the interest is compounded semiannually, the effective monthly interest rate is (1+0.05/2)^(2/12)-1

= 0.00407412378303.

Using this to calculate the present value of an ordinary annuity formula:

P V = $3,500 x (1-(1+0.00407412378303)^-36)/0.00407412378303.

P V under Plan B is approximately $119,199.09.

Comparing the two plans, it's evident that Plan B (leasing) is the cheaper option by just under $1,000. Therefore, it would be more cost-effective for the firm to lease the data center rather than purchasing it outright.

Learn more about Cost comparison here:

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Kiera’s dog walking business is booming, and she is interested in expanding. In order to expand, her company needs more customers, and the demand for dog walking in her neighboring communities must increase in order for her to generate a profit. Her best friend, a local celebrity, suggests that she should consider marketing her services. Because Kiera understands that there are specific challenges associated with developing advertising objectives for services, she is very careful about how to advertise her dog walking services. In the end, she decides to develop a logo for her company so customers can associate it with the services she provides. How did Kiera make her intangible services more marketable?

Answers

Answer:

The correct answer to the following question will be "She enhanced her brand image".

Explanation:

Keira dramatically improved her brand reputation by getting ready a logo to promote her unquantifiable facility of various dog walking the dog. Designed to enhance the brand identity requires connecting with the clients regarding your brand as well as trying to make your provider or good extra attractive to the users. That is among the most powerful advertising moves.
Keira aims to grow its market here by generating more competition for its intangible growing organization. For all of this she chooses to help improve her brand value so that she can get so many requirements for her provider as well as make higher revenue.

So that the above is the right answer.

Clovix Corporation has $50 million in cash, 10 million shares outstanding, and a current share price of $30. Clovix is deciding whether to use the $50 million to pay an immediate special dividend of $5.00 per share, or to retain and invest it at the risk-free rate of 10% and use the $5.00 million in interest earned to increase its regular annual dividend of $0.50 per share. Assume perfect capital markets. a. Suppose Clovix pays the special dividend. How can a shareholder who would prefer an increase in the regular dividend create it on her own? b. Suppose Clovix increases its regular dividend. How can a shareholder who would prefer the special dividend create it on her own?

Answers

Answer:

a. Assuming an investor prefers the extra $0.50 per year, then he/she can invest the $5 received as special dividend and earn $0.50 himself/herself in the same or similar risk free investment.

b. If the investor needed or wanted the $5 instead of $0.50 extra per year, he/she can borrow the $5 and use the extra $0.50 per year to pay the interests on the loan.

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