Nail_It company is a manufacture of a custom engraved hammer. For the year 2021, the weekly budget was as follows.

• Sales revenue $64,000: 2,000 hammers × price $32

• Variable costs: o Direct materials $10,000: 2,000 hammers × 1 lbs per hammer × price $5/lb o Direct labor $50,000: 2,000 hammers × 5 hour per hammer ×rate $5/hour o no variable overhead

• Fixed costs: $3,000 • Profit: $1,000

The actual performance of the week was as follows.

• Sales revenue $70,400: 2,200 hammers × price $32

• Variable costs: o Direct materials $13,200: 2,200 hammers × 1 lbs per hammer × price $6/lb o Direct labor $46,200: 2,200 hammers × 3 hour per hammer ×rate $7/hour o no variable overhead

• Fixed costs: $8,000 • Profit: $8,000

Required:

1) Compute the following variances

a) Sales Volume Variance b) Sales Price Variance c) Input Quantity Variance for Materials d) Input Price Variance for Materials e) Input Quantity Variance for Labor f) Input Price Variance for Labor

2) Nail_It company hired an experienced engineer and asked her to re-organize the production process. How could hiring an experienced engineer and their new production process explain the variances? Please comment on individual components of variances, their relations to other variances, and overall impact on profitability.

The stock of Delta, Inc. is selling now for $40. A year from today it will sell for either $30 or $120. The risk-free interest rate is 4%, and a call option on Delta, Inc. with an exercise price of $50 is available.

a. What is the fair (i.e. arbitrage-free) value of the call?

b. The call is selling at $10. Show that you can create an arbitrage position to take advantage of the difference between the price of the call and its arbitrage-free value.

One year consumers spent an average of $23 on a meal at a resturant. Assume that the amount spent on a resturant meal is normally distributed and that the standard deviation is $3.

Complete parts​ (a) through​ (c) below.

a. What is the probability that a randomly selected person spent more than $25? round to four decimal places

b. What is the probability that a randomly selected person spent between ​$9 and ​$21? round to four decimal places

c. Between what two values will the middle 95​% of the amounts of cash spent​ fall? round to the nearest cent

71) Prior to closing the accounts at the end of the most recent fiscal year, the Town of Sonora reports the following amounts (in thousands):

Required:

Applying the criteria specified in GASB 34, determine which of the above funds should be classified as major funds for reporting purposes.

Closing the Balances in The Variance Accounts at the End of the Year

Yohan Company has the following balances in its direct materials and direct labor variance accounts at year-end:

Unadjusted Cost of Goods Sold equals $1,570,000, unadjusted Work in Process equals $316,000, and unadjusted Finished Goods equals $190,000.

Required:

1. Assume that the ending balances in the variance accounts are immaterial and prepare the journal entries to close them to Cost of Goods Sold. Note: Close the variances with a debit balance first. If an amount box does not require an entry, leave it blank or enter "0".

What is the adjusted balance in Cost of Goods Sold after closing out the variances?

$

2. What if any ending balance in a variance account that exceeds $11,000 is considered material? (a) Close the immaterial variance accounts to Cost of Goods Sold. (b) Prorate the largest of the labor variances among Cost of Goods Sold, Work in Process, and Finished Goods on the basis of prime costs in these accounts. (c) Prorate the largest of the material variances among Cost of Goods Sold, Work in Process, and Finished Goods on the basis of prime costs in these accounts. The prime cost in Cost of Goods Sold is $1,050,000, the prime cost in Work in Process is $160,800, and the prime cost in Finished Goods is $131,000. If an amount box does not require an entry, leave it blank or enter "0".

Note: Round all interim calculations to three decimal places, and round your final answers to the nearest dollar. Adjust credit entry for rounding to ensure debits equal credits in journal entry.

What are the adjusted balances in Work in Process, Finished Goods, and Cost of Goods Sold after closing out all variances?

A machine costs $35,000 to buy and $5,000 per year to operate and maintain. It will have a salvage value of $8,000 in 9 years. It will generate $10,000 per year in net revenue for the first four years, and then the revenue will fall by $1,000 each year after. If the company purchasing the machine uses a MARR of 7% to make project , find the NPW, NFW, and AW. Is this project worth undertaking if no loss is expected?

Work in Microsoft Excel (show Code)

1. The consolidated balance sheets for Lloyd Lumber Company at the beginning and end of the year follow. The company bought $50 million worth of fixed assets. The charge for depreciation during the year was $10 million. Net income was $33 million, and the company paid out $5 million in dividends.

                        Lloyd Lumber Company: Balance Sheets at Beginning and End of the year ($ million)      

                                                                                   Jan. 1         Dec. 31             

Cash                                                   $    7            $    5          

Marketable securities                                 0                11          

Net receivables                                       30                22          

Inventories                                              53                75          

Total current assets                             $ 90            $ 23

Gross fixed assets                                   75              125          

Less: Accumulated depreciation          ( 225)           (235)

Net fixed assets                                   $ 50            $ 90

Total assets                                         $140             $213

Accounts payable                                  $18            $ 15          

Notes payable                                           3                15          

Other current liabilities                             15                  7          

Long-term debt                                          8                24          

Common stock                                        29                57          

Retained earnings                                    67                95          

Total liabilities and equity                     $140             $213

                        Note: Total sources must equal total uses.

1. Prepare a statement of cash flows.
2. Briefly summarize your findings.

1) On July 1 of the current year, Ambrose was admitted to the partnership of Ambrose and Nectar. His contribution to capital consisted of 500 shares of stock in Paniculata Corporation, which he bought in 2014 for $10,000 and which had a fair market value of $50,000 on July 1 of the current year. Ambrose's interest in the partnership's capital and profits is 25 percent. On July 1 of the current year, the fair market value of the partnership's net assets (after Ambrose was admitted) was $200,000. What is Ambrose's taxable gain in the current year on the exchange of stock for his partnership interest?

a.$40,000 ordinary income

b.$40,000 Section 1231 gain

c.$40,000 long-term capital gain

d.$0 gain or loss

e.None of these choices are correct.

2) Which of the following statements is true of corporations?

a.If a corporation has a long-term capital loss that is carried back, it is treated as a short-term capital loss.

b.Capital losses of a corporation may be deducted from ordinary income, subject to an annual limitation.

c.A corporation may deduct organizational expenditures as they are incurred.

d.Income of all corporations is taxed in the same way that income of partnerships is taxed.

e.A corporation's charitable contribution deduction is limited to 25 percent of the corporation's taxable income.

3.-Barry owns a 50 percent interest in B&B Interests, a partnership. His brother, Benny, owns a 35 percent interest in that same partnership, and the remaining 15 percent is owned by an unrelated individual. During the current year, Barry sells a rental property with a basis of $60,000 to B&B Interests for $100,000. The partnership intends to hold the rental as inventory for resale. What is the amount and nature of Barry's gain or loss on this transaction?

a.$0 gain or loss

b.$40,000 long-term capital loss

c.$40,000 ordinary income

d.$40,000 long-term capital gain

e.None of these choices are correct.

An injection molding machine can be purchased and installed for $90,000. It is in the seven-year GDS property class and is expected to be kept in service for eight years. It is believed that $10,000 can be obtained when the machine is disposed of at the end of year eight. The net annual value added (i.e., revenues less expenses) that can be attributed to this machine is constant over eight years and amounts to $15,000. An effective income tax rate of 40% is used by the company, and the after-tax MARR equals 15% per year.

What is the MV of the investment at end of year 4?

What is the PW of the investment? Hint, it is negative