1940s theater near 1880s park and hotel construction cost percentage questions

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Contribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of Safety, and Operating Leverage Belmain Co. expects to...

Contribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of Safety, and Operating Leverage

Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows:

		Estimated Fixed Cost	Estimated Variable Cost (per unit sold)
Production costs:
	Direct materials		$24
	Direct labor		16
	Factory overhead	$443,500	12
Selling expenses:
	Sales salaries and commissions	92,200	5
	Advertising	31,200
	Travel	6,900
	Miscellaneous selling expense	7,600	4
Administrative expenses:
	Office and officers' salaries	90,100
	Supplies	11,100	2
	Miscellaneous administrative expense	10,400	3
	Total	$693,000	$66

It is expected that 7,000 units will be sold at a price of $264 a unit. Maximum sales within the relevant range are 9,000 units.

Required:

1. Prepare an estimated income statement for 20Y7.

Belmain Co.
Estimated Income Statement
For the Year Ended December 31, 20Y7
			$
Cost of goods sold:
		$


Total cost of goods sold
Gross profit			$
Expenses:
Selling expenses:
	$



Total selling expenses		$
Administrative expenses:
	$


Total administrative expenses
Total expenses
Income from operations			$

2. What is the expected contribution margin ratio? Round to the nearest whole percent.
%

3. Determine the break-even sales in units and dollars.

Units	units
Dollars	units

4. Construct a cost-volume-profit chart on your own paper. What is the break-even sales?
$

5. What is the expected margin of safety in dollars and as a percentage of sales?

Dollars:	$
Percentage: (Round to the nearest whole percent.)		%

6. Determine the operating leverage. Round to one decimal place.

In: Accounting

make sure to do all parts I'll rate Contribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of...

make sure to do all parts I'll rate

Contribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of Safety, and Operating Leverage

Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows:

		Estimated Fixed Cost	Estimated Variable Cost (per unit sold)
Production costs:
	Direct materials		$26
	Direct labor		17
	Factory overhead	$431,300	13
Selling expenses:
	Sales salaries and commissions	89,600	6
	Advertising	30,300
	Travel	6,700
	Miscellaneous selling expense	7,400	5
Administrative expenses:
	Office and officers' salaries	87,600
	Supplies	10,800	2
	Miscellaneous administrative expense	10,220	3
	Total	$673,920	$72

It is expected that 7,020 units will be sold at a price of $288 a unit. Maximum sales within the relevant range are 9,000 units.

Required:

1. Prepare an estimated income statement for 20Y7.

Belmain Co.
Estimated Income Statement
For the Year Ended December 31, 20Y7
			$
Cost of goods sold:
		$


Cost of goods sold
Gross profit			$
Expenses:
Selling expenses:
	$



Total selling expenses		$
Administrative expenses:
	$


Total administrative expenses
Total expenses
Income from operations			$

2. What is the expected contribution margin ratio? Round to the nearest whole percent.
%

3. Determine the break-even sales in units and dollars.

Units	units
Dollars	units

4. Construct a cost-volume-profit chart on your own paper. What is the break-even sales?
$

5. What is the expected margin of safety in dollars and as a percentage of sales?

Dollars:	$
Percentage: (Round to the nearest whole percent.)		%

6. Determine the operating leverage. Round to one decimal place.

In: Accounting

Contribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of Safety, and Operating Leverage Belmain Co. expects to...

Contribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of Safety, and Operating Leverage

Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows:

		Estimated Fixed Cost	Estimated Variable Cost (per unit sold)
Production costs:
	Direct materials		$19
	Direct labor		13
	Factory overhead	$82,900	10
Selling expenses:
	Sales salaries and commissions	17,200	4
	Advertising	5,800
	Travel	1,300
	Miscellaneous selling expense	1,400	4
Administrative expenses:
	Office and officers' salaries	16,800
	Supplies	2,100	2
	Miscellaneous administrative expense	2,100	2
	Total	$129,600	$54

It is expected that 6,400 units will be sold at a price of $108 a unit. Maximum sales within the relevant range are 8,000 units.

Required:

1. Prepare an estimated income statement for 20Y7.

Belmain Co.
Estimated Income Statement
For the Year Ended December 31, 20Y7
			$
Cost of goods sold:
		$


Total cost of goods sold
Gross profit			$
Expenses:
Selling expenses:
	$



Total selling expenses		$
Administrative expenses:
	$


Total administrative expenses
Total expenses
Income from operations			$

2. What is the expected contribution margin ratio? Round to the nearest whole percent.
%

3. Determine the break-even sales in units and dollars.

Units	units
Dollars	units

4. Construct a cost-volume-profit chart on your own paper. What is the break-even sales?
$

5. What is the expected margin of safety in dollars and as a percentage of sales?

Dollars:	$
Percentage: (Round to the nearest whole percent.)		%

6. Determine the operating leverage. Round to one decimal place.

In: Accounting

Joan Frazier was just hired as an employee by SJR Restaurants, Inc., a Delaware Corporation domiciled...

Joan Frazier was just hired as an employee by SJR Restaurants, Inc., a Delaware Corporation domiciled in Colorado. Ms. Frazier maintains a residence in Orange County, California, so her children may attend the schools of her choice and so that her husband may be employed there as a leading plastic surgeon.

SJR has just opened three (3) restaurants in Utah, Nevada, and Idaho. SJR requires Ms. Frazier set up the general ledger accounting system at each restaurant. SJR estimates it will take Ms. Frazier 14 months of continuous, full time work (40 hours per week, 4 weeks per month) to set up the systems. SJR requires Ms. Frazier to rotate her time. That is, to spend time at each restaurant at least once a calendar quarter. Each restaurant has an office for the accounting function, although the offices are so small that Ms. Frazier does a majority of her work from hotel rooms near the restaurants.

Ms. Frazier reports back electronically to SJR. Ms. Frazier is never required to go to Colorado. SJR does not reimburse Ms. Frazier for her lodging, travel, or meal expenses.

May Ms. Frazier deduct lodging, travel, and meal expenses?

Note 1: Ignore limitations and phase outs and cut backs and whether the putative deductions might be above the line or below the line. Ignore Alternative Minimum Tax.

Note 2: This is your chance to show the research skills you've learned. You must cite the relevant code section(s), and at least three Supreme Court cases.

The appropriate format for tax briefings is as follows. Also include your name and the date for this class.

Subject

Facts

Taxpayer yada yada yada. Note: This should not be more than one paragraph.

Issue

May taxpayer deduct yada yada yada? Note: This is usually one sentence.

Conclusion

In this situation, yada yada yada. Note: This is usually three sentences or less.

Analysis

Code section xx(a) contains.......It states...... Reg. sec. clarifies...... Rev. Ruling...... Court case XXXX vs. XXX holds that......

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In: Accounting

In order to test a hypothesis and prediction, controlled experiments are used. Controlled experiments involve several...

In order to test a hypothesis and prediction, controlled experiments are used. Controlled experiments involve several necessary components. An independent variable is usually manipulated by a researcher but does not change as a result of the experiment. The changes in the dependent variable may be caused by the experiment (and depend upon the independent variable). Graphs that depict the experimental data list the independent variable on the x-axis while the y-axis shows the dependent variable.

A commonly used mnemonic (memory device) to aid in distinguishing the characteristics of the types of variables is DRY MIX.

D = dependent variable (depends on the other) R = responding variable (one that changes) Y = y-axis on a graph M = manipulated variable (one that is changed by the researcher) I = independent variable

X = x-axis on a graph

The following sentence is a template to write an if/then statement to be used as a prediction:

If the independent variable is changed [increased, decreased, etc.], then the dependent variable will change in this way [increase, decrease, etc.]. Example: If the amount of available light increases, then plant growth will increase.

Discussion Questions:

Use the tools and examples just discussed to answer the questions about the experiment scenario described next. Jonah and Tessa noticed that some Leopard frogs by a local river had extra limbs. They decided to check various areas along the river to make more observations. They recorded their observations in their field notebooks. Jonah and Tessa performed a simple laboratory experiment with Leopard frog eggs and river water taken at various spots along the river. They noticed that adult frogs developing from eggs in water collected near an industrial park showed more deformities, but the deformities seemed to be different than those seen on frogs in the natural setting by the river.

1. Write a prediction that would be appropriate for the experiment scenario.

2. What would be the independent variable in the experiment?  

3. What would be the dependent variable in the experiment?  

4. What steps should Jonah and Tessa take to ensure that the experiment would be controlled?  

5. Why would they perform these experiments in the laboratory and not in the river?  

6. What conclusion should the researchers derive from their data?  

7. What might be some alternative hypotheses for this situation?  

8. What could be a next step for their investigation?  

9. What other information may help them design future experiments?  

In: Statistics and Probability

4. Firms that carry preferred stock in their capital mix want to not only distribute dividends...

4. Firms that carry preferred stock in their capital mix want to not only distribute dividends to the company’s common stockholders but also maintain credibility in the capital markets so that they can raise additional funds in the future and avoid potential corporate raids from preferred stockholders.

Consider the case of Purple Lemon Shipbuilders Inc.

The CFO of Purple Lemon Shipbuilders Inc. has decided that the company needs to raise additional capital. It can sell preferred stock paying an annual $5 dividend per share for $100 per share; however, it will incur a flotation cost of 2.5% per share.

After it pays the underwriter, Purple Lemon Shipbuilders Inc. will receive from each share of preferred stock that it issues. Options – 87.75, 97.50, 2.50, 2.13

Based on this information, Purple Lemon Shipbuilders Inc.’s cost of preferred stock is Options – 5.64, 4.10, 4.87, 5.13

When raising funds by issuing new preferred stock, the company will incur an underwriting, or flotation, cost that. Increase / Decreases the cost of preferred stock. Because the flotation cost is usually expressed as a percentage of price of each share, the difference between the cost of preferred stock with and without flotation cost is. Insignificant / Significant enough to not ignore.

The cost of debt that is relevant when companies are evaluating new investment projects is the marginal cost of the new debt to be raised to finance the new project.

Consider the case of Happy Lion Manufacturing Inc. (Happy Lion):

Happy Lion Manufacturing Inc. is considering issuing a new 20-year debt issue that would pay an annual coupon payment of $70. Each bond in the issue would carry a $1,000 par value and would be expected to be sold for a price equal to its par value.

Happy Lion’s CFO has pointed out that the firm would incur a flotation cost of 1% when initially issuing the bond issue. Remember, the flotation costs will be Subtracted from / added to the proceeds the firm will receive after issuing its new bonds. The firm’s marginal federal-plus-state tax rate is 45%.

To see the effect of flotation costs on Happy Lion’s after-tax cost of debt (generic), calculate the after-tax cost of the firm’s debt issue with and without its flotation costs, and select the correct after-tax costs (in percentage form):

After-tax cost of debt without flotation cost:

Options 3.2725, 3.8500, 4.2350, 4.0425

After-tax cost of debt with flotation cost:

Options 3.6575, 3.9023, 4.620, 4.4275

This is the cost of Embedded / new debt, and it is different from the average cost of capital raised in the past.

In: Finance

Schedule of Activity Costs Quality Control Activities Activity Cost Product testing $55,000 Assessing vendor quality 26,000...

Schedule of Activity Costs

Quality Control Activities	Activity Cost
Product testing	$55,000
Assessing vendor quality	26,000
Recalls	18,000
Rework	29,000
Scrap disposal	8,000
Product design	30,000
Training machine operators	46,000
Warranty work	12,000
Process audits	22,000

From the provided schedule of activity costs, compute the percentage of non-value-added activities. Round to one decimal place.

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In: Accounting

Arlington Clothing, Inc., shows the following information for its two divisions for year 1. Lake Region...

Arlington Clothing, Inc., shows the following information for its two divisions for year 1.

	Lake Region		Coastal Region
Sales revenue	$	4,020,000	$	12,930,000
Cost of sales		2,621,300		6,465,000
Allocated corporate overhead		241,200		775,800
Other general and administration		539,900		3,741,000

Required:

b-1. What are the gross margin and operating margin percentages for both divisions?

	Lake Region		Coastal Region
Gross margin percentage		%		%
Operating margin		%		%

In: Accounting

The desired percentage of SiO2 in a certain type of aluminous cement is 5.5. To test...

The desired percentage of SiO₂ in a certain type of aluminous cement is 5.5. To test whether the true average percentage is 5.5 for a particular production facility, 16 independently obtained samples are analyzed. Suppose that the percentage of SiO₂ in a sample is normally distributed with σ = 0.30 and that x = 5.23. (Use α = 0.05.)

(a) Does this indicate conclusively that the true average percentage differs from 5.5?
State the appropriate null and alternative hypotheses.

H₀: μ = 5.5
H_a: μ > 5.5H₀: μ = 5.5
H_a: μ ≥ 5.5 H₀: μ = 5.5
H_a: μ < 5.5H₀: μ = 5.5
H_a: μ ≠ 5.5

Calculate the test statistic and determine the P-value. (Round your test statistic to two decimal places and your P-value to four decimal places.)

z	=
P-value	=

State the conclusion in the problem context.

Do not reject the null hypothesis. There is sufficient evidence to conclude that the true average percentage differs from the desired percentage.Reject the null hypothesis. There is sufficient evidence to conclude that the true average percentage differs from the desired percentage. Reject the null hypothesis. There is not sufficient evidence to conclude that the true average percentage differs from the desired percentage.Do not reject the null hypothesis. There is not sufficient evidence to conclude that the true average percentage differs from the desired percentage.

(b) If the true average percentage is

μ = 5.6

and a level α = 0.01 test based on n = 16 is used, what is the probability of detecting this departure from H₀? (Round your answer to four decimal places.)

(c) What value of n is required to satisfy α = 0.01 and β(5.6) = 0.01? (Round your answer up to the next whole number.)
n = samples

In: Statistics and Probability

Breakport University wishes to determine the percentage of students who will be taking courses during the...

Breakport University wishes to determine the percentage of students who will be taking courses during the summer. How many students must they ask to estimate the percentage with 99% confidence of being within 5 percentage points of the true value?

In: Statistics and Probability