In: Finance
In an effort to improve its competitive position, Dallas Co. recently introduced a new inventory control system. Its management accountant assembled the following data regarding the recent change:
| Item | Before new system | After new system |
| Production cycle time | 50 days | 40 days |
| Inventory level | $200,000 | $120,000 |
| Total sales | $1,800,000 | $2,000,000 |
| Estimated cost data, % of sales | ||
| Direct materials | 35% | 30% |
| Direct labor | 20% | 15% |
| Variable overhead | 15% | 10% |
| Fixed overhead | 10% | 5% |
The company's inventory financing cost is estimated as 10% per year.
Required:
1. Estimate the net financial benefit (expressed in terms of
operating income) that the company realized from the switch to a
new inventory control system.
2. List four (4) non-financial benefits the company might expect as
a result to its move to new inventory control system.
3. What are the primary expected costs of implementing a new
inventory control system?
In: Accounting
In: Finance
In: Finance
Enlightened Ltd is investigating the introduction of a new advanced solar light. Forecast revenue from the new light is $1,250,000 per year and variable costs $450,000 per year. The revenue and variable costs are expected to stay constant for the four years. The new light will require a new production line that will have an initial cost of $2,000,000. For tax purposes you can depreciate the full cost down to zero over the four year life of the project. At the end of four years you expect to be able to sell the production machinery for $350,000. Selling the new fixtures will require additional working capital of $25,000 starting immediately. You expect to recover the working capital investment at the end of the four year project. You have already spent $50,000 in research and development costs to invent the new light.Assume the tax rate is 30% and the required return is 10% APR (compounded annually).
What are the Project Cash Flows for the project?
DO NOT USE EXCEL FOR CALCULATIONS
In: Finance
D&R Corp. has annual revenues of $250,000, an average contribution margin ratio of 35%, and fixed expenses of $118,200.
a. Management is considering adding a new product to the company's product line. The new item will have $8.8 of variable costs per unit. Calculate the selling price that will be required if this product is not to affect the average contribution margin ratio. (Round your answer to 2 decimal places.)
b. If the new product adds an additional $31,000 to D&R's fixed expenses, how many units of the new product must be sold at the price calculated in part a to break-even on the new product? (Do not round intermediate calculations.)
c. If 24,800 units of the new product could be sold at a price of $14.6 per unit, and the company's other business did not change, calculate D&R's total operating income and average contribution margin ratio. (Round your intermediate calculations to 2 decimal places. Round "Average contribution margin ratio" to 2 decimal places.)
In: Economics
The following table gives the total area in square miles (land and water) of seven states. Complete parts (a) through (c).
State Area
1 52,300
2 615,400
3 115,000
4 53,600
5 159,500
6 104,800
7 6,100
a. Find the mean area and median area for these states.
The mean is __ square miles.
(Round to the nearest integer as needed.)
The median is ___ square miles.
b. Which state is an outlier on the high end? If you eliminate this state, what are the new mean and median areas for this data set?
State___ is an outlier on the high end.
The new mean is_____square miles.
(Round to the nearest integer as needed.)
The new median is____square miles.
(Round to the nearest integer as needed.)
c. Which state is an outlier on the low end? If you eliminate this state, what are the new mean and median areas for this data set?
State____is an outlier on the low end.
The new mean is_____square miles.
(Round to the nearest integer as needed.)
The new median is_____square miles.
(Round to the nearest integer as needed.)
In: Statistics and Probability
| The owners’ equity accounts for Hexagon International are shown here: |
| Common stock ($.50 par value) | $ | 42,500 |
| Capital surplus | 345,000 | |
| Retained earnings | 758,120 | |
| Total owners’ equity | $ | 1,145,620 |
| a-1. |
If the company's stock currently sells for $20 per share and a 15 percent stock dividend is declared, how many new shares will be distributed? (Do not round intermediate calculations.) |
| New shares issued |
| a-2. |
Show the new equity account balances after the stock dividend is paid. (Do not round intermediate calculations.) |
| Common stock | $ |
| Capital surplus | |
| Retained earnings | |
| Total owners’ equity | $ |
| b-1. |
If the company declared a 25 percent stock dividend, how many new shares will be distributed? (Do not round intermediate calculations.) |
| New shares issued |
| b-2. |
Show the new equity account balances after the stock dividend is paid. (Do not round intermediate calculations.) |
| Common stock | $ |
| Capital surplus | |
| Retained earnings | |
| Total owners’ equity | $ |
In: Finance
A restaurant chain that has 3 locations in Portland is trying to determine which of their 3 locations they should keep open on New Year’s Eve. They survey a random sample of customers at each location and ask each whether or not they plan on going out to eat on New Year’s Eve. The results are below. Run a test for independence to decide if the proportion of customers that will go out to eat on New Year’s Eve is dependent on location. Use α=0.05.
|
NW Location |
NE Location |
SE Location |
|
|
Will Go Out |
45 |
33 |
36 |
|
Won’t Go Out |
23 |
29 |
25 |
Hypotheses:
H,0): The choice to go out on New Year's Eve is _____ restaurant location.
(H,1): The choice to go out on New Year's Eve is _____ restaurant location.
Enter the test statistic - round to 4 decimal places. ______
Enter the P-Value - round to 4 decimal places. ______
Can it be concluded that the choice to go out on New Year's Eve is dependent on restaurant location?
In: Math
What effect will a four-for-one stock split have on the following items found on a firm's financial statements?
Earnings per share $5.00. Round your answer to the nearest cent.
| Initial amount | New amount | Effect |
| $5.00 | $ | -Select-increasedecreaseno change |
Total equity $9,000,000. Round your answer to the nearest dollar.
| Initial amount | New amount | Effect |
| $9,000,000 | $ | -Select-increasedecreaseno change |
Long-term debt $4,300,000. Round your answer to the nearest dollar.
| Initial amount | New amount | Effect |
| $4,300,000 | $ | -Select-increasedecreaseno change |
Additional paid-in capital $1,564,000. Round your answer to the nearest dollar.
| Initial amount | New amount | Effect |
| $1,564,000 | $ | -Select-increasedecreaseno change |
Number of shares outstanding 900,000. Round your answer to the nearest whole number.
| Initial amount | New amount | Effect |
| 900,000 | -Select-increasedecreaseno change |
Earnings $4,500,000. Round your answer to the nearest dollar.
| Initial amount | New amount | Effect |
| $4,500,000 | $ | -Select-increasedecreaseno change |
In: Finance