The statement of financial position of a company at
year ended 31st December 2000 reflects the following status:
Amount (Rs.)
Plant under installation 2000,000
Other assets 8000,000
10,000,000
Loans
Bank Loan 18% 2,000,000
Bank Loan 20% 2,500,000
Bank Loan 22% 1,500,000
6,000,000
Shareholder’s Equity 4,000,000
10,000,000
Bank loan of 20% was taken on April 1, 2000. Other
loans were brought forward from 1999.
Expenditures incurred on plant under installation:
April 01, 2000 1,000,000
June 01, 2000 700,000
September 01, 2000 300,000
2,000,000
Required: Calculate borrowing cost and total capitalized cost of asset at 2000.
In: Finance
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 $94 per unit, and variable expenses are $64 per unit. Fixed expenses are $835,500 per year. The present annual sales volume (at the $94 selling price) is 26,000 units. Required: 1. What is the present yearly 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-a. 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)? 4-b. Not available in Connect.
In: Accounting
EcoSacks manufactures cloth shopping bags. The controller is preparing a budget for the coming year and asks for your assistance. The following costs and other data apply to bag production.
| Direct materials per bag | ||
| 1.0 yard cotton at $4 per yard | ||
| 0.2 yards canvas finish at $12 per yard | ||
| Direct labor per bag | ||
| 0.5 hour at $18 per hour | ||
| Overhead per bag | ||
| Indirect labor | $ | 0.60 |
| Indirect materials | 0.20 | |
| Power | 0.40 | |
| Equipment costs | 1.30 | |
| Building occupancy | 0.90 | |
| Total overhead per unit | $ | 3.40 |
You learn that equipment costs and building occupancy are fixed and are based on a normal production of 600,000 units per year. Other overhead costs are variable. Plant capacity is sufficient to produce 750,000 units per year.
Labor costs per hour are not expected to change during the year. However, the cotton supplier has informed EcoSacks that it will impose a 20 percent price increase at the start of the coming budget period. No other costs are expected to change.
During the coming budget period, EcoSacks expects to sell 540,000 bags. Finished goods inventory is targeted to increase from the current balance of 120,000 units to 210,000 units to prepare for an expected sales increase the year after next as a result of legislation in several states regarding plastic bags. Production will occur evenly throughout the year. Inventory levels for cotton and canvas are expected to remain unchanged throughout the year. There is no work-in-process inventory.
Required:
a. Prepare a production budget for the coming year.
b. Estimate the materials, labor, and overhead costs for the coming year.
In: Accounting
A corporation decides to issue 15-year bonds in the amount of $10,000,000. Interest payments will be made at the rate of 10% compounded semi-annually. The bonds were priced to yield 8% compounded semi-annually to maturity. What is the price of the bonds?
a. $8,462,755 b. $10,000,000 c. $3,083.187 d. $11,729,203
In: Accounting
|
A 21-year-old woman presented to the emergency department of an urban hospital with a history of systemic lupus. Her complaint was dehydration, dizziness, and feeling faint. The woman also had a recent history of being dehydrated, complicated by renal involvement from lupus and having to receive bolus fluids. She was on multiple medications, including steroids and methotrexate. An intravenous (IV) line was started, and blood was drawn for labs. The emergency department physician returned to report that the lab values were within normal limits, yet the young woman felt no better. She stated that she still felt dehydrated, her blood pressure felt low, and she normally received more IV fluids and a steroid injection when she felt this way. The physician indicated that he felt no need for this treatment, but when the patient insisted on more fluids, he agreed to continue them for a while and to give her an injection of steroids. The patient asked, “Do you want to give me anti-nausea medication first?” The physician stated that there was no indication. The patient told him that she was always nauseated following steroids and had sometimes vomited if no antiemetic were administered first. The physician argued but finally grew tired and walked away. The steroid injection was given, and nausea ensued. When the patient got home a few hours later, the patient called her rheumatologist and urologist (neither had been available when the illness occurred because of the late hour). They repeated her labs the next day, only to find that she was severely dehydrated, and many values, including renal panel, were outside normal limits. |
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Case Questions
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In: Nursing
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 $97 per unit, and variable expenses are $67 per unit. Fixed expenses are $831,300 per year. The present annual sales volume (at the $97 selling price) is 25,100 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
Refer again to the original data of Relax Company for the year ended on December 31, 2019:
Total $
|
Sales |
2,400,000 |
|
Less variable costs |
1,800,000 |
|
Contribution margin |
600,000 |
|
Less Fixed Costs |
250,000 |
|
Net Operating income |
350,000 |
During 2019, company’s selling price per unit and variable cost per unit has been $60 and $40 respectively.
Calculate:
a. A. Assume that in upcoming year of 2020, company management wants to earn a minimum profit of $150,000, how many units will have to be sold by the company to get this target profit?
b. B. Compute the company’s degree of operating leverage at the current sales level. What the answer means?
c. C.The management is considering using the high quality material for the product. This will increase the variable cost per unit by $5 but the use of high quality materials could increase the sales by 25% of the current sales volume. Prepare a proposed contribution format income statement for the year 2019 and would you suggest that changes be made?
In: Accounting
You have a market portfolio and the risk premium for holding it is 5% per year. rf = 5%. There are two new stock issues: A or B. A stock has a standard deviation of 40%, a beta of 0.5, and an expected return of 8.0%. B stock has a standard deviation of 30%, a beta of 1.0, and an expected return of 9.0%. If you can add at most one stock to your portfolio, which one do you choose?
In: Finance
Al Wathba Printing Services is a family business established in Oman in the year 2011 with an objective to provide world-class printing solutions of the corporate customers in Oman. The firm is experiencing a steady growth in the business over the past 9 years and is highly appreciated by all its customers. From the last five years, the firm is receiving majority of its orders from four major customers and is executing the orders ensuring quality and consistency. As the firm is established as a family business, they appointed one person as a financial accountant who records all the expenses and calculates the profit by deducting total expenses from total income. The owners of the firm are satisfied with this method as they were into profits since inception. However, the owners noticed that the quantum of profits started declining from the past two years and they believe that it is due to the increase in the expenses. In light of the current scenario, the firm appointed you as a cost accountant and you were asked to identify the reasons for the declining in the profits. The financial accountant provided the following data for the month of April 2020. Particulars Total Total income from the four Jobs 2250 Less : Direct Material Cost @ RO 20 per Kg (1320) Direct Labour Cost @ RO 15 per hour (450) Overheads (330) Total Expenses 2100 Profit 150 After further investigation into the expenses incurred,
you identified the following points:
(a) The price of the job charged to Job 1, Job 2, Job 3 and Job 4 is RO 425, RO 600, RO 525 and 700 respectively.
(b) The raw material cost charged to Job 1, Job 2, Job 3 and Job 4 is RO 260, RO 310, RO 350 and RO 400 respectively.
(c) The labour hours used for completion of the Job 1, Job 2, Job 3 and Job 4 were 9 Hrs, 11Hrs, 12Hrs and 13Hrs respectively. 8
(d) The overheads need to be charged to the jobs based on consumption of raw material. As a cost accountant, you suggested the firm to adopt job costing technique in its firm to ascertain the profits and to determine the price of the jobs. The owners of the business have asked you to submit a report on the same for their consideration.
You are required to
a) Analyse the profitability of each job in the month of April 2020 by preparing T accounts.
b) Advise the firm, how much price should be charged to each job in the next month assuming the material costs are expected to increase by 10% and assuming the firm needs a mark-up of 20%. (Round off the Job price to the nearest hundreds)
c) Prepare a report to assist the owners of the business to take a decision.
In: Accounting
Identify and briefly describe the unethical study in research, Note the year the study occurred, and consider where in the development or conduct of the study that researchers or associated parties might have had the opportunity to intervene on behalf of the study's subjects.
Locate example of ethical misconduct in research using traditional or web resources.
In: Nursing