Vice President for Sales and Marketing Sam Totter is trying to plan for the coming year in terms of production needs to meet the sales demand. He is also trying to determine ways in which the company’s profits might be increased in the coming year.
Instructions (Do all six parts):
Waterways markets a simple water control and timer that it mass-produces. During last year, the company sold 701,000 units at an average selling price of 4.20 per unit. The variable expenses were $1,857,650 and the fixed expenses were $646,450.
What is the product’s contribution margin ratio? (Round to nearest whole percentage.)
What is the company’s break-even point in units and in dollars for this product?
What is the margin of safety, both in dollars and as a ratio? (Round to nearest whole percentage.)
If management wanted to increase its net operating income from this product by 10%, how many additional units would have to be sold to reach this income level?
If sales increase by 51,000 units and the cost behaviors do not change, how much will net operating income increase on this product?
Waterways’ management believes that increased advertising would increase unit sales by 10%. If management wants to increase its operating income by $50,000, how much could the company spend on additional advertising to reach its goal?
In: Accounting
Analysis of Receivables Method
At the end of the current year, Accounts Receivable has a balance of $465,000; Allowance for Doubtful Accounts has a debit balance of $4,000; and sales for the year total $2,090,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $20,800.
a. Determine the amount of the adjusting entry
for uncollectible accounts.
$
b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense.
| Accounts Receivable | $ |
| Allowance for Doubtful Accounts | $ |
| Bad Debt Expense | $ |
c. Determine the net realizable value of
accounts receivable.
$
In: Accounting
A private college advertised that last year their freshman students, on average, had a score of 1100 on the college entrance exam. Assuming that average refers to the mean, which of the following claims must be true based on this information? Note: More than one statement could be true. If none of the statements is true, mark the appropriate box.
Last year some of their freshman students had a score of more than 1000.
Last year, the number of their freshman students who had a score of more than 1100 or was equal to the number of their freshman students who had a score of less than 1100.
Last year all of their freshman students had a score of at least 1100.
Next year at least one of their freshman students will have a score of at least 1100.
Last year some of their freshman students had a score of exactly 1100.
None of the above statements.
In: Statistics and Probability
Assume you are looking to buy a house $200,000 with a 20 year mortgage at 12%, estimate the monthly mortgage payment, first months interest, total amount to be repaid and the total interest.
Explain why some financial institutions prefer to sell the mortgages they originate. Research and provide an example either current or historical.
Why do you think it is difficult for investors to assess the financial condition of a financial institution that has purchased a large amount of mortgage-backed securities? Provide an example.
In: Finance
Given the year end prices of the following stocks, estimate the expected return of a portfolio of 30% AAA and 70% BBB. Enter your answer as a percent without the % sign. Round your final answer to two decimals.
| Year | AAA | BBB |
|---|---|---|
| 2006 | 100 | 55 |
| 2007 | 105 | 65 |
| 2008 | 120 | 60 |
| 2009 | 110 | 70 |
| 2010 | 130 | 65 |
| 2011 | 160 | 80 |
In: Finance
Please explain me the step on financial calculator. The answer is D
In: Finance
After the accounts have been adjusted at April 30, the end of the fiscal year, the following balances were taken from the ledger of Nuclear Landscaping Co.: Felix Godwin, Capital $454,290 Felix Godwin, Drawing 25,000 Fees Earned 520,245 Wages Expense 398,500 Rent Expense 95,600 Supplies Expense 35,865 Miscellaneous Expense 11,955 Journalize the two entries required to close the accounts. For a compound transaction, if an amount box does not require an entry, leave it blank. Apr. 30 Felix Godwin, Capital 454,290 454,290 Felix Godwin, Drawing 25,000 Wages Expense 398,500 Fees Earned 520,245 520,245 Supplies Expense 35,865 Miscellaneous Expense 11,955 Apr. 30 Rent Payable 95,600 Felix Godwin, Capital 407,615
In: Accounting
The price of a car you are interested in buying is $93.65k. You negotiate a 6-year loan, with no money down and no monthly payments during the first year. After the first year, you will pay $1.26k per month for the following 5 years, with a balloon payment at the end to cover the remaining principal on the loan. The annual percentage rate (APR) on the loan with monthly compounding is 5%. What will be the amount of the balloon payment 6 years from now?
Note: The term “k” is used to represent thousands (× $1,000).
Required: Suppose the loan has initially been paid in full (without a balance due at maturity), the amount would have totaled $37k. Calculate the absolute percentage difference between the fully amortized loan and the balloon payment.
In: Finance
Derek will deposit $5,825.00 per year for 10.00 years into an account that earns 9.00%, The first deposit is made next year. He has $11,818.00 in his account today. How much will be in the account 47.00 years from today?
Answer format: Currency: Round to: 2 decimal places.
In: Finance
Derek will deposit $8,984.00 per year for 10.00 years into an account that earns 8.00%, The first deposit is made next year. How much will be in the account 43.00 years from today?
Answer format: Currency: Round to: 2 decimal places.
In: Finance