Sales (7,000 safety checks) $560,000

Production costs (7,010 safety checks)

Direct labor 392,560

Shop overhead

Variable 89,728

Fixed 56,080

Operating expenses

Variable 16,824

Fixed 12,800

c. Assume that you must decide quickly whether to accept a special one-time order for 20 safety checks on local police cars for $64 per safety check. Which income statement presents the most relevant data? Answer Determine the apparent profit or loss on the special order based solely on these data. Use a negative sign with your answer if the special order creates an apparent loss. Round answer to the nearest whole number.

Sara’s Salsa Company produces its condiments in two types: Extra Fine for restaurant customers and Family Style for home use. Salsa is prepared in department 1 and packaged in department 2. The activities, overhead costs, and drivers associated with these two manufacturing processes and the company’s production support activities follow.

Additional production information about its two product lines follows.

Required:
1. Using a plantwide overhead rate based on cases, compute the overhead cost that is assigned to each case of Extra Fine Salsa and each case of Family Style Salsa. PLANT OVERHEAD RATE ? $___ PER CASE
2. Using the plantwide overhead rate, determine the total cost per case for the two products if the direct materials and direct labor cost is $6 per case of Extra Fine and $5 per case of Family Style. EXTRA FINE ___ PER UNIT.. FAMILY STYLE ___PER UNIT
3.a. If the market price of Extra Fine Salsa is $17 per case and the market price of Family Style Salsa is $8 per case, determine the gross profit per case for each product. EXTRA FINE ____ FAMILY STYLE ____
3.b. What might management conclude about the Family Style Salsa product line?

5. If the market price is $17 per case of Extra Fine and $8 per case of Family Style, determine the gross profit per case for each product. (Round your intermediate calculations and final answers to 2 decimal places.

Lindon Company is the exclusive distributor for an automotive product that sells for $48.00 per unit and has a CM ratio of 30%. The company’s fixed expenses are $324,000 per year. The company plans to sell 26,500 units this year.

A. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $4.80 per unit. What is the company’s new break-even point in unit sales and in dollar sales? What dollar sales is required to attain a target profit of $180,000?

Thornton Medical Clinic has budgeted the following cash flows:

Thornton Medical had a cash balance of $16,000 on January 1. The company desires to maintain a cash cushion of $9,000. Funds are assumed to be borrowed, in increments of $1,000, and repaid on the last day of each month; the interest rate is 2 percent per month. Repayments may be made in any amount available. Thornton pays its vendors on the last day of the month also. The company had a monthly $40,000 beginning balance in its line of credit liability account from this year’s quarterly results.

Required

Prepare a cash budget. (Round intermediate and final answers to the nearest whole dollar amounts. Any repayments/shortage should be indicated with a minus sign. )

Question 2

Julia Tang has been a financial planner for ten years. She specializes in insurance planning. Sam Jones, Julia’s client, has learned some knowledge about insurance from his friends, and he considers that he understands this industry reasonably well. During their meeting, Sam made the following statements. Help Julia to correct her client’s misunderstanding.

King City Specialty Bikes (KCSB) produces high-end bicycles. Costs to manufacture and market the bicycles at last year's volume level of 2,050 bicycles per month are shown in the following table:

KCSB expects to produce and sell 2,250 bicycles per month in the coming year. The bicycles sell for $610 each.

KCSB receives a proposal from an outside contractor who, for $160 per bicycle, will assemble 900 bicycles per month and ship them directly to KCSB's customers as orders are received from KCSB's sales force. KCSB would provide the materials for each bicycle, but the outside contractor would assemble, box, and ship the bicycles. The variable manufacturing costs would be reduced by 45% for the 900 bicycles assembled by the outside contractor, and variable nonmanufacturing costs for the 900 bicycles would be cut by 60%.

KCSB's marketing manager thinks that it could sell 75 specialty racing bicycles per month for $6,000 each, and its production manager thinks that it could use the idle resources to produce each of these bicycles for variable manufacturing costs of $4,900 per bicycle and variable nonmanufacturing costs of $450 per bicycle.

If KCSB accepts the proposal, it would be able to save $26,650 of fixed manufacturing costs; fixed nonmanufacturing costs would be unchanged.

REQUIRED [Note: Round unit cost computations to the nearest cent]

What is the difference in KCSB's monthly costs between accepting the proposal and rejecting the proposal?   (Note: If the costs of accepting the proposal are less than the costs of rejecting it, enter the difference as a positive number; if the accept costs are more than the reject costs, enter the difference as a negative number.)

Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 48,000 Rets per year. Costs associated with this level of production and sales are given below:

The Rets normally sell for $48 each. Fixed manufacturing overhead is $336,000 per year within the range of 38,000 through 48,000 Rets per year.

Required:

1. Assume that due to a recession, Polaski Company expects to sell only 38,000 Rets through regular channels next year. A large retail chain has offered to purchase 10,000 Rets if Polaski is willing to accept a 16% discount off the regular price. There would be no sales commissions on this order; thus, variable selling expenses would be slashed by 75%. However, Polaski Company would have to purchase a special machine to engrave the retail chain’s name on the 10,000 units. This machine would cost $20,000. Polaski Company has no assurance that the retail chain will purchase additional units in the future. What is the financial advantage (disadvantage) of accepting the special order? (Round your intermediate calculations to 2 decimal places.)

2. Refer to the original data. Assume again that Polaski Company expects to sell only 38,000 Rets through regular channels next year. The U.S. Army would like to make a one-time-only purchase of 10,000 Rets. The Army would pay a fixed fee of $1.80 per Ret, and it would reimburse Polaski Company for all costs of production (variable and fixed) associated with the units. Because the army would pick up the Rets with its own trucks, there would be no variable selling expenses associated with this order. What is the financial advantage (disadvantage) of accepting the U.S. Army's special order?

3. Assume the same situation as described in (2) above, except that the company expects to sell 48,000 Rets through regular channels next year. Thus, accepting the U.S. Army’s order would require giving up regular sales of 10,000 Rets. Given this new information, what is the financial advantage (disadvantage) of accepting the U.S. Army's special order?

The current price of a stock is $65.88. If dividends are expected to be $1 per share for the next five years, and the required return is 10%, then what should the price of the stock be in 5 years when you plan to sell it? If the dividend and required returns remained the same; and the stock price is expected to increase by $1 five years from now, does the current stock price also increase by $1? Why or why not?

I only need d) to be solved, thanks

(a) Derive the answer to price of the stock in 5 years (i.e. Find: Ps.) The question does not specify expected dividends or the required rate of return for beyond five years. Assume that following the fifth year (i.e. in the 6th year) that dividends grow at a constant rate forever and that the required rate of return remains at 10%

b) Find the growth rate of dividends that is consistent with your answer in part (a) to Ps. (Hint: use the Gordon growth model.) Now suppose instead that Ps-101.

c) What is the price of the stock today? Finally, suppose that dividends stay at S1 forever.

d）Unlike question b) above, consider a “two-stage Gordon growth model” where the growth rate of dividends is greater than required rate of return over the first five years. As before, suppose D1 =1 and ke =.1. However, now dividends grow from year 1 until year 5 at 20%, and after year 5 they stop growing. What is the price of the stock today?

Required information

[The following information applies to the questions displayed below.]

The following events occur for The Underwood Corporation during 2021 and 2022, its first two years of operations.

Required:

1. Record transactions for each date. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

2. Post transactions to the following accounts: Cash, Accounts Receivable, and Allowance for Uncollectible Accounts.

3. Calculate net accounts receivable at the end of 2021 and 2022.

Suppose that, prior to the passage of the Truth in Lending Simplification Act and Regulation Z, the demand for consumer loans was given by Q^d_pre-TILSA = 12 -100P (in billions of dollars) and the supply of consumer loans by credit unions and other lending institutions was Q^S_pre-TILSA = 5 + 150P (in billions of dollars). The TILSA now requires lenders to provide consumers with complete information about the rights and responsibilities of entering into a lending relationship with the institution, and as a result, the demand for loans increased to Q^d_post-TILSA = 18 -100P (in billions of dollars). However, the TILSA also imposed “compliance costs” on lending institutions, and this reduced the supply of consumer loans to Q^S_post-TILSA = 3 + 150P (in billions of dollars).

Based on this information, compare the equilibrium price and quantity of consumer loans before and after the Truth in Lending Simplification Act.(Note: Q is measured in billions of dollars and P is the interest rate).

Instruction: Enter your responses for the equilibrium price in percentage terms, and round all responses to one decimal place.

Equilibrium price (interest rate) before TILSA: ____ percent

Equilibrium quantity (in billions of dollars) before TILSA: $ ___ billion

Equilibrium price (interest rate) after TILSA: _____percent

Equilibrium quantity (in billions of dollars) after TILSA: $ _____billion

Required information

[The following information applies to the questions displayed below.]

Pearl E. White Orthodontist specializes in correcting misaligned teeth. During 2021, Pearl provides services on account of $581,000. Of this amount, $71,000 remains receivable at the end of the year. An aging schedule as of December 31, 2021, is provided below.
  

Required:

1. Calculate the allowance for uncollectible accounts.

2. Record the December 31, 2021, adjusting entry, assuming the balance of Allowance for Uncollectible Accounts before adjustment is $4,100 (credit). (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

3. On July 19, 2022, a customer’s account balance of $7,100 is written off as uncollectible. Record the write-off. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

4. On September 30, 2022, the customer whose account was written off in part 3 unexpectedly pays the full amount. Record the cash collection. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

TDABC is an activity-based costing that is also based on the function of time. In TDABC, we allocate the activity capacity based on how much time used for each activity.

There are two types of TDABC:

a. bottom-up TDABC (in which employees estimate the time associated with performing the activity once) --> leads to underestimation of time used

b. top-down TDABC (in which employees estimate the total time associated with the total practical capacity of the activity) --> leads to overestimation of time used

The question is why the underestimation/overestimation in TDABC occurs?

Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows:

During November, the following activity was recorded related to the production of Fludex:

1. Materials purchased, 10,500 ounces at a cost of $216,825.

2. There was no beginning inventory of materials; however, at the end of the month, 2,600 ounces of material remained in ending inventory.

3. The company employs 20 lab technicians to work on the production of Fludex. During November, they each worked an average of 180 hours at an average pay rate of $14.00 per hour.

4. Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours. Variable manufacturing overhead costs during November totaled $7,000.

5. During November, the company produced 3,700 units of Fludex.

Required:

1. For direct materials:

a. Compute the price and quantity variances.

b. The materials were purchased from a new supplier who is anxious to enter into a long-term purchase contract. Would you recommend that the company sign the contract?

2. For direct labor:

a. Compute the rate and efficiency variances.

b. In the past, the 20 technicians employed in the production of Fludex consisted of 8 senior technicians and 12 assistants. During November, the company experimented with fewer senior technicians and more assistants in order to reduce labor costs. Would you recommend that the new labor mix be continued?

3. Compute the variable overhead rate and efficiency variances.

4. You have a fourth project that will cost 1700 to invest in one year from now, will generate a cash inflow of 150 starting in year three and continuing forever. If the discount rate is 8%, what is the NPV and should you accept the project based on the NPV?

5. Finally, you have a fifth project that will cost 1500 to invest in today, will generate a cash inflow of 165 in year one, which will grow at a constant rate of 2% for 29 additional years (for a total of 30 cash inflows), and will have a shutdown cost of 1000 at the end of year 30. If the project’s discount rate is 10%, what is the NPV and should you accept the project based on the NPV?

please show the formula for question 5