Minden Company introduced a new product last year for which it is trying to find an optimal selling price. Marketing studies suggest that the company can increase sales by 5,000 units for each $2 reduction in the selling price. The company’s present selling price is $70 per unit, and variable expenses are $40 per unit. Fixed expenses are $540,000 per year. The present annual sales volume (at the $70 selling price) is 15,000 units.
Required:
1. What is the present yearly net operating income or loss?
2. What is the present break-even point in unit sales and in dollar sales?
3. Assuming that the marketing studies are correct, what is the maximum annual profit that the company can earn? At how many units and at what selling price per unit would the company generate this profit?
4. What would be the break-even point in unit sales and in dollar sales using the selling price you determined in (3) above (e.g., the selling price at the level of maximum profits)?
In: Accounting
The LaGrange Corporation had the following budgeted sales for the first half of the current year:
| Cash Sales | Credit Sales | |||
| January | $ | 40,000 | $ | 140,000 |
| February | $ | 45,000 | $ | 160,000 |
| March | $ | 39,000 | $ | 120,000 |
| April | $ | 34,000 | $ | 119,000 |
| May | $ | 44,000 | $ | 190,000 |
| June | $ | 70,000 | $ | 130,000 |
The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled:
Collections on sales:
55% in month of sale
40% in month following sale
5% in second month following sale
The accounts receivable balance on January 1 of the current year was $82,000, of which $63,000 represents uncollected December sales and $19,000 represents uncollected November sales.
The total cash collected during January by LaGrange Corporation would be:
$190,000
$192,000
$140,000
$216,000
The LaGrange Corporation had the following budgeted sales for the first half of the current year:
| Cash Sales | Credit Sales | |||
| January | $ | 40,000 | $ | 140,000 |
| February | $ | 45,000 | $ | 160,000 |
| March | $ | 39,000 | $ | 120,000 |
| April | $ | 34,000 | $ | 119,000 |
| May | $ | 44,000 | $ | 190,000 |
| June | $ | 70,000 | $ | 130,000 |
The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled:
Collections on sales:
55% in month of sale
40% in month following sale
5% in second month following sale
The accounts receivable balance on January 1 of the current year was $82,000, of which $63,000 represents uncollected December sales and $19,000 represents uncollected November sales.
The total cash collected during January by LaGrange Corporation would be:
$190,000
$192,000
$140,000
$216,000
In: Accounting
Prepare a Statement of Cost of Goods Manufactured for Frank's Furniture for the year ending December 2019.
Advertising Expense - $ 22250
Depreciation expense – Office Equip - 10,440
Depreciation expense – Selling Equip - 12,125
Depreciation expense – Factory Equip. - 37,400
Direct Labor - 564,500
Factory supervision - 123,400
Factory supplies used (indirect materials) - 8,060
Factory utilities - 39,500
Inventories:
Raw Materials, Dec 31, 2018 - 42,375
Raw Materials, Dec 31, 2019 - 72,430
Goods-in-Process, Dec 31, 2018 - 14,500
Goods-in-Process, Dec 31, 2019 - 16,100
Finished Goods, Dec 31, 2018 - 179,200
Finished Goods, Dec 31, 2019 - 143,750
Income taxes expense - 138,700
Indirect labor - 61,000
Misc. Production costs - 10,440
Office salaries expense - 72,875
Raw materials purchased - 896,375
Rent expense – office space - 25,625
Rent expense – selling space - 29,000
Rent expense – factory building - 95,500
Maintenance expense - factory - 32,375
Sales - 5,002,000
Sales Discounts - 59,375
Sales salaries expense - 297,300
| FRANK'S FURNITURE | ||
| Manufacturing Statement | ||
| For the year ended December 31, 2019 | ||
| Direct Materials | ||
| Raw materials inventory, December 31, 2018 | ||
| Raw materials purchased | ||
| Raw materials available for use | ||
| Less raw materials inventory, December 31, 2019 | ||
| Direct materials used | ||
| Direct Labor | ||
| Factory Overhead | ||
| Depreciation expense - Factory Equipment | ||
| Factory Supervision | ||
| Factory Supplies used | ||
| Factory Utilities | ||
| Indirect Labor | ||
| Miscellaneous production costs | ||
| Rent expense - Factory building | ||
| Misc. Factory maintenance | ||
| Total factory overhead costs | ||
| Total manufacturing costs | ||
| Goods-in-Process Inventory, December 31, 2018 | ||
| Total cost of goods in process | ||
| Less Goods-in-Process Inventory, December 31, 2019 | ||
| Cost of Goods Manufactured | ||
Thank you!
In: Accounting
FreddieMac reports that the average rate on a 30-year fixed rate mortgage is 3.92% as of January 2012. This is down from 4.76% in January 2011 and 5.03% in January 2010. If you have a $216,000, 5%, 30-year mortgage, how much interest will you save if you refinance your loan at 3.5% for 20 years?
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Joe Levi bought a home in Arlington, Texas, for $130,000. He put down 25% and obtained a mortgage for 30 years at 8%. What is the difference in interest cost if he had obtained a mortgage rate of 6%? (Do not round intermediate calculations. Round your answer to the nearest cent.)
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In: Finance
Matt has a substantial portfolio of securities. As of December 2, of the current year, Matt has a net capital gain position of $22,000. Discuss Matt's optimal tax-planning strategy for capital gains and losses.
In: Accounting
A list of accounts and their balances of O’Neill’s Psychological
Services, at its year end July 31, 2021, is presented
below:
| Supplies | $790 | |
| Unearned Revenue | 1,070 | |
| Supplies Expense | 5,930 | |
| Cash | 6,435 | |
| Accounts Receivable | 7,335 | |
| Accounts Payable | 9,100 | |
| Rent Expense | 10,840 | |
| Notes Payable | 22,750 | |
| Salaries Expense | 45,000 | |
| T. O’Neill, Drawings | 57,300 | |
| Equipment | 58,550 | |
| T. O’Neill, Capital | 65,300 | |
| Service Revenue | 93,960 |
Prepare balance sheet.
In: Accounting
A list of accounts and their balances of O’Neill’s Psychological
Services, at its year end July 31, 2021, is presented
below:
| Supplies | $790 | |
| Unearned Revenue | 1,070 | |
| Supplies Expense | 5,930 | |
| Cash | 6,435 | |
| Accounts Receivable | 7,335 | |
| Accounts Payable | 9,100 | |
| Rent Expense | 10,840 | |
| Notes Payable | 22,750 | |
| Salaries Expense | 45,000 | |
| T. O’Neill, Drawings | 57,300 | |
| Equipment | 58,550 | |
| T. O’Neill, Capital | 65,300 | |
| Service Revenue | 93,960 |
Prepare statement of owner’s equity. (List items that increase owner's equity first.)
In: Accounting
Edit question Marc and Michelle are married and earned salaries this year of $67,600 and $13,350, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $950 from corporate bonds. Marc contributed $2,950 to an individual retirement account, and Marc paid alimony to a prior spouse in the amount of $1,950. Marc and Michelle have a 10-year-old son, Matthew, who lived with them throughout the entire year. Thus, Marc and Michelle are allowed to claim a $2,000 child tax credit for Matthew. Marc and Michelle paid $6,900 of expenditures that qualify as itemized deductions and they had a total of $5,950 in federal income taxes withheld from their paychecks during the course of the year. (Use the tax rate schedules.) a. What is Marc and Michelle’s gross income? b. What is Marc and Michelle’s adjusted gross income? c. What is the total amount of Marc and Michelle’s deductions from AGI? d. What is Marc and Michelle’s taxable income? e. What is Marc and Michelle’s taxes payable or refund due for the year? Use 2018 tax schedules
In: Accounting
The following data is for the coming year. FinCorp's Net Income is reported as $195million. Depreciation Expense is $20million, accounts receivable decreased by $20 million, accounts payable decreased by $10 million, and inventories increased by $10 million. The firm's interest expense is $22million. Assume the tax rate is 35% and the net debt of the firm increases by $3million. What is the market value of equity if the FCFE is projected to grow at 3% indefinitely and the cost of equity is 11%?
In: Finance
You are presented with a real estate investment with cash flow in year 1 of $100,000, increasing by $5,000 per year through year 5. And, you estimate you can sell the deal at the end of the 5th year for $1,250,000. If your discount rate is 12%, should you buy the deal at the $1,100,000 asking price?
A) Yes, because the IRR is a positive 9.34%
B) No, because the NPV is a negative $33,455
C) Yes, because the NPV is a positive $1,746
D) No, because the NPV is less than the asking price
In: Finance