Income statements for two different companies in the same industry are as follows:

Trimax Inc Quintex Inc

Sales $500,000 $500,000

Less: Variable costs 250,000 100,000

Contribution margin 250,000 400,000

Less: Fixed Costs 200,000 350,000

Operating income 50,000 50,000

Required:

1. Compute the degree of operating leverage for each company.

2. Compute the break-even point for each company. Explain why the break-even point for Quintex Inc. is higher.

3. Suppose that both companies experience a 50 percent increase in revenue. Compute the percentage change in profits for each company. Explain why the percentage increase in Quintex's profits is so much greater than that of Trimax.

Simun Company makes and sells a product that regularly sell for $38.95 each.

The following information is available for the current year:

A new customer approached the company with a one-time all-or-nothing order for 700 units. The special-order units are identical to the regular ones, with one exception: the customer would like their business logo engraved on each unit. It will cost $3 to engrave the logo.

Q) The minimum total sales revenue from the special order that would be acceptable to the company is:

Investments are reported at fair value when a company has a significant influence over another company in which it invests. True False

Consolidated financial statements combine the separate financial statements of the purchasing company and the acquired company into a single set of financial statements. True False

When the investor has insignificant influence, the receipt of cash dividends is recorded as dividend revenue. True False

When significant influence exists, the investment should be accounted for by the equity method. True False

Bond investments are long-term assets that earn interest revenue, while bonds payable are long-term liabilities that incur interest expense. True False

As a sale market manager for a company, contemplate whether prices should reflect the value the customers are willing to pay or whether they should be based upon the cost of the product or service to your company. How would you support this with an example of your product or service to substantiate your position?

When using binomial approach and Black-Scholes formula for pricing options, do you expect the results to be the same? (3)Why or why not? (2)  Price a put and a call with data offered below using both methods and show the prices. Do your results support initial expectations? (5)

Present stock price $30, exercise price $40, interest rate 5%, option expires one year from now, volatility 27%, stock will either move up by 40% or down by 27%.

A machine purchased 3 years ago for $140,000 is now too slow to satisfy the demand of the customers. It can be upgraded now for $81,000 or sold to a smaller company internationally for $41,000. The upgraded machine will have an annual operating cost of $82,000 per year and a $33,000 salvage value in 3 years. If upgraded, the presently owned machine will be retained for only 3 more years, then replaced with a machine to be used in the manufacture of several other product lines. The replacement machine, which will serve the company now and for a maximum of 8 years, costs $224,000. Its salvage value will be $49,000 for years 1 through 5; $20,000 after 6 years; and $10,000 thereafter. It will have an estimated operating cost of $45,000 per year. Perform an economic analysis at 8% per year using a specified 3-year planning horizon.

a) Determine if the current machine should be replaced now or 3 years from now

b) Once decided, determine the equivalent AW for the next three years.

a) The current machine should be replaced ___.

b) The equivalent AW for the next three years is $ ___ .

Suppose that in a random selection of 100 colored​ candies, 25​% of them are blue. The candy company claims that the percentage of blue candies is equal to 27​%. Use a 0.05 significance level to test that claim. Identify the test statistic for this hypothesis test. Identify the​ P-value for this hypothesis test. Identify the conclusion for this hypothesis test.

Lee Ltd delivers the goods to customers and gives the customers the right to return the product with no reason within 14 days after delivery. 1st May 20X9, goods were sold and delivered to a customer. The price charged was equal to the cost of $200 plus a 20% profit margin. According to the historical data, a significant amount of goods were returned within 14 days after delivery. Please ignore the GST. Required: (Please label your responses as 1), 2).) 1) Entries on 1st May 20X9 (2/4) 2) Entries on 14th May 20X9 if goods were not returned within 14 days after delivery (2/4)

The following information was disclosed during the audit of Elbert Inc.

Question: Prepare the journal entry to record income taxes for 2018.