Questions
Question 4. Suppose that your firm has higher fixed cost-to-variable cost ratio than comparable firms. Explain...

Question 4.

Suppose that your firm has higher fixed cost-to-variable cost ratio than comparable firms. Explain how EBITDA multiple valuation would be influenced by the difference in this ratio.

In: Accounting

Category Dollars Percent Sales 100% Food Cost $2,375 37% Labor Cost 29% Overhead 24% Profit 10%...

Category Dollars Percent
Sales 100%
Food Cost $2,375 37%
Labor Cost 29%
Overhead 24%
Profit 10%
Category Dollars Percent
Sales 100%
Food Cost 31%
Labor Cost $17,322 34%
Overhead 32%
Profit 3%
Category Dollars Percent
Sales 100%
Food Cost 40%
Labor Cost 29%
Overhead $234 19%
Profit 12%
Category Dollars Percent
Sales $7,700 100%
Food Cost 43%
Labor Cost 32%
Overhead 21%
Profit 4%

Using the figures provided below calculate the missing dollaramounts for each of the Simplified Profit and Loss Statements.

In: Accounting

Financial Break Even Unit Price Unit Variable Cost Fixed Cost Operating Cash Flow Investment Lifeo f...

Financial Break Even Unit Price Unit Variable Cost Fixed Cost Operating Cash Flow Investment Lifeo f Project Discount Rate
h 39 30 32,000 g 320,000 5 11%
j 50 27 55,000 i 440,500 6 15%
l 60 40 100,000 k 520,154 7 3%

In each of the following case, find the unknown variables: be sure to show all work

In: Finance

Variable Fixed Product cost Non manuf. cost Materiales Director X Mano de Obra Directa x Alquiler...

Variable

Fixed

Product cost

Non manuf. cost

Materiales Director

X

Mano de Obra Directa

x

Alquiler Edificio

X

Salarios de Supervisores

X

Comisiones de Venta

X

Utilidades ‘ Fabricas

X

Oficina de Ventas de Alquiler

X

Depresiacion ‘ Fabrica

X

Depresaiacion Equipo de Ventas

X

Publicidad

X

Costo de Facturacion

X

Costo de Envio

X

Trabajador de Linea Salarial

X

In: Accounting

Support-department cost allocations: single-department cost pools; direct, step-down, and reciprocal methods. 1 a. Allocate the total...

Support-department cost allocations: single-department cost pools; direct, step-down, and reciprocal methods.
1 a. Allocate the total Support Department costs to the production departments under the Direct Allocation Method:
Clothing Shoes
Departmental Costs $10,500 $7,500
From:
Information Technology
(5040/9000)*2600 $1,456
(3960/9000)*2600 $1,144
Human Resources
(220/308)*1400 $1,000
(22/308)*1400 $400
Total Departmental Costs $12,956 $9,044
Total Costs to account for: $     22,000
b. Allocate the Support Department Costs to the Production Department under the Step-down (Sequential) Allocation Method IT first sequentially:
To:
IT HR Clothing Shoes
Departmental Costs $2,600 $1,400 $10,500 $7,500
From:
Information Technology -$2,600
(3000/12000)*2600 $650
(5040/12000)*2600 $1,092
(3960/12000)*2600 $858
Human Resources -$2,050
(220/308)*2050 $1,464
(88/308)*2050 $586
Total Departmental Costs $0 $0 $13,056 $8,944
Total Costs to account for: $     22,000
c. Allocate the Support Department Costs to the Production Department under the Step-down (Sequential) Allocation Method HR first sequentially:
To:
HR IT Clothing Shoes
Departmental Costs $1,400 $2,600 $10,500 $7,500
From:
Human Resources -$1,400
(92/400) _ $1,400 $322
(220/400) _ $1,400 $770
(88/400) _ $1,400 $308
Information Technology -$2,922
(5,040/9,000) _ $2,922 $1,636
(3,960/9,000) _ $2,922 $1,286
Total Departmental Costs $0 $0 $12,906 $9,094
Total Costs to account for: $     22,000
d. Allocate the Support Department Costs to the Production Department under the Reciprocal Allocation Method:
i. Assign reciprocal equations to the support departments
IT=(2600+92 employees/400 employees*HR)
IT   = $2,600+0.23HR
HR = ($1,400+.025 IT)
HR=($1,400+3,000 hours/1,200 hours IT)
ii. Solve the equation to complete the reciprocal costs of the support departments
IT=$2,600+.023($1,400+0.25 IT)
IT= $2,600+$322+0.0575IT
0.9425 IT = $2,922
      IT = $       3,100
HR= $1,400+0.25 IT
HR= $1,400+0.25(3,100)
HR= $1,400+775
HR = $2,175
iii. Allocate Reciprocal costs to departments (all numbers rounded to nearest dollar)
IT HR Clothing Shoes
Departmental Costs $2,600 $1,400 $10,500 $7,500
Information Technology -$3,100
(3000/12000)*$3,100 $775
(5040/12000)*$3,100 $1,302
(3960/12000)*$3,100 $1,023
Human Resources -$2,175
(92/400)*$2,175 $500
(220/400)*$2,175 $1,196
(88/400)*$2,175 $479
Total Departmental Costs $0 $0 $12,998 $9,002
$     22,000
Reciprocal Method of Allocating Support Department Costs for Sportz, Inc. Using Repeated Iterations.
Support Departments Operating Departments
IT HR Clothing Shoes
Budgeted manufacturing overhead costs before any interdepartmental cost allocations
1st Allocation of IT Dept.
(0.25, 0.42, 0.33)b
1st Allocation of HR Dept.
2nd Allocation of IT Dept.
2nd Allocation of HR Dept.
3rd Allocation of IT Dept.
3rd Allocation of HR Dept.
4th Allocation of IT Dept.
Total budgeted manufacturing
overhead of operating departments

I understand the first half just not the both half.

Sportz, Inc., manufactures athletic shoes and athletic clothing for both amateur and professional athletes. The company has two product lines (clothing and shoes), which are produced in separate manufacturing facilities; however, both manufacturing facilities share the same support services for information technology and human resources. The following shows total costs for each manufacturing facility and for each support department.

Variable Costs Fixed Costs Total Costs by Department
Information Technology 600 2,000 2,600
Human Resources 400 1,000 1,400
Clothing 2,500 8,000 10,500
Shoes 3,000 4,500 7,500
Total Costs 6,500 15,500 22,000

The total costs of the support departments (IT and HR) are allocated to the production departments (clothing and shoes) using a single rate based on the following:

Information technology: Number of IT labor-hours worked by department
Human resources: Number of employees supported by department

Data on the bases, by department, are given as follows:

Department

IT Hours Used

Number of Employees

Clothing

5,040

220

Shoes

3,960

88

Information technology

-

92

Human resources

3,000

-

What are the total costs of the production departments (clothing and shoes) after the support department costs of information technology and human resources have been allocated using (a) the direct method, (b) the step-down method (allocate information technology first), (c) the step-down method (allocate human resources first), and (d) the reciprocal method?

Assume that all of the work of the IT department could be outsourced to an independent company for $97.50 per hour. If Sportz no longer operated its own IT department, 30% of the fixed costs of the IT department could be eliminated. Should Sportz outsource its IT services?

In: Accounting

Units Per unit cost Total cost 5,000 units 5000 17.00 85000 7,500 units 7500 13.00 97500...

Units Per unit cost Total cost
5,000 units 5000 17.00 85000
7,500 units 7500 13.00 97500
Difference 2500 12500
Unit variable cost 5 =12500/2500
Fixed cost 60000 =85000-(5000*5)
Y = $60,000 + $5X

what is that X suppose to mean ?is the answer 60,005?

In: Accounting

Turbine United Hydro Services Kiser Hydro, LLC Initial Cost $200,000 $1,500,000 Maintenance Cost $200 per year,...

Turbine United Hydro Services Kiser Hydro, LLC
Initial Cost $200,000 $1,500,000
Maintenance Cost $200 per year, increasing by 4% per year $1,000 per year for the first ten years, then $2,000 per year thereafter
Overhaul Cost $50,000 at year ten $750,000 at year thirty
Income $20,000 per year $25,000 per year
Salvage Value $15,000 $50,000
Life 20 Years Infinite

. Memphis Light, Gas and Water Division is exploring the possibility of installing hydrokinetic turbines in the Mississippi River to generate power for the Memphis and Shelby County area. Consulting engineers have identified two potential types of hydrokinetic turbines to meet the needs of MLG&W. The costs and expected income for the two types of turbines are shown in the table below. Using a perpetual annual worth analysis and a MARR of 6% per year, determine which type of hydrokinetic turbine, if any, should be selected. Complete all calculations to the nearest dollar.

In: Economics

Data Manufactured in-house Fixed cost $50,000 Unit variable cost $125 Payoff Table Demand Purchased from supplier...

Data
Manufactured in-house
Fixed cost $50,000
Unit variable cost $125 Payoff Table
Demand
Purchased from supplier             800       1,000       1,200       1,400
Unit cost $175 Manufacture $150,000 $175,000 $200,000 $225,000
Outsource $140,000 $175,000 $210,000 $245,000
Production volume 1500
Model ANSWER Manufacture/Outsource Value
Average Payoff
Total manufacturing cost $237,500 Aggressive
Total purchased cost $262,500 Conservative
Cost difference (Manufacture - Purchase) -$25,000
Best Decision Manufacture

Problem 16A Payoff Tables

Based on the cost model and payoff table provided, determine the average payoff strategy, aggressive, and conservative recommendation. Remember that this payoff table is based on cost so you will want to recommend decisions under each strategy which minimize cost.

Enter your answer in the table by stating whether manufacturing or outsources would be the best choice for each strategy and the value associated with that option.

In: Accounting

Total Product Total Fixed Cost Total Variable Cost 0 $150 $0 1 150 50 2 150...

Total Product Total Fixed Cost Total Variable Cost
0 $150 $0
1 150 50
2 150 75
3 150 105
4 150 145
5 150 200
6 150 270
7 150 360
8 150 475
9 150 620
10 150 800

The first table shows cost data for a single firm. Now suppose that there are 600 identical firms in this industry, each with the same cost data. Suppose, too, that the demand curve for this industry is as shown in the second table.

Price Quantity Demanded
$20 6,800
30 5,975
45 5,500
60 5,125
75 4,500
95 4,200
120 3,600
150 2,400

Based on all these data, the equilibrium price of the product in the market will be

Multiple Choice

  • $95.

  • $75.

  • $120.

  • $60.

In: Economics

School Type Cost 30 Year ROI Annual ROI School Type Cost 30 Year ROI Annual ROI...

School Type Cost 30 Year ROI Annual ROI School Type Cost 30 Year ROI Annual ROI
Private $222,700.00 $1,786,000.00 7.70% Private $221,700.00 $2,412,000.00 8.70%
Private $176,400.00 $1,758,000.00 8.40% Private $213,000.00 $2,064,000.00 8.30%
Private $212,200.00 $1,714,000.00 7.80% Private $230,100.00 $1,949,000.00 7.90%
Public $125,100.00 $1,535,000.00 9.10% Private $222,600.00 $1,947,000.00 8.00%
Private $212,700.00 $1,529,000.00 7.40% Private $225,800.00 $1,938,000.00 8.00%
Public $92,910.00 $1,501,000.00 10.10% Public $87,660.00 $1,937,000.00 11.20%
Private $214,900.00 $1,485,000.00 7.30% Private $224,900.00 $1,915,000.00 7.90%
Private $217,800.00 $1,483,000.00 7.20% Private $221,600.00 $1,878,000.00 7.90%
Private $225,600.00 $1,444,000.00 7.00% Public $125,100.00 $1,854,000.00 9.80%
Private $217,300.00 $1,442,000.00 7.10% Private $215,700.00 $1,794,000.00 7.90%
Private $226,500.00 $1,441,000.00 7.00% Public $92,530.00 $1,761,000.00 10.60%
Private $215,500.00 $1,438,000.00 7.20% Private $217,800.00 $1,752,000.00 7.70%
Private $223,500.00 $1,428,000.00 7.00% Public $89,700.00 $1,727,000.00 10.70%
Private $226,600.00 $1,414,000.00 7.00% Private $229,600.00 $1,716,000.00 7.50%
Private $189,300.00 $1,397,000.00 7.50% Public $101,500.00 $1,703,000.00 10.20%
Public $89,700.00 $1,382,000.00 9.90% Public $115,500.00 $1,694,000.00 9.70%
Public $87,030.00 $1,376,000.00 10.00% Public $104,500.00 $1,690,000.00 10.10%
Private $218,200.00 $1,343,000.00 6.90% Public $69,980.00 $1,685,000.00 11.50%
Private $229,900.00 $1,339,000.00 6.70% Private $219,400.00 $1,676,000.00 7.60%
Private $148,800.00 $1,321,000.00 8.10% Public $64,930.00 $1,668,000.00 11.70%

　

  1. In a highlighted box, explain how each hypothesis test contributes to the central question of which major would give the better ROI. Why do we need hypothesis testing? Isn't it enough to look at the sample of 20 schools and look at those numbers? What exactly does hypothesis testing do that looking at the numbers in the sample and saying "one is higher than the other" cannot do? This answer is critical to your final project. It demonstrates that you understand why you just can't look at the mean, median, and mode of the spreadsheet and "call it a day
  2. . For Business versus Engineering majors conduct a full, two-sample, full hypothesis test at the 5% significance level (assume the variances are not equal):The average ’30-Year ROI’ for Business majors is less than for Engineering Majors.
    • The mean ‘Cost’ for a college is $160,000.
  3. For each of the 2 majors, conduct a full hypothesis test at the 10% significance level:

In: Statistics and Probability