Most insurance companies will waive surrender charges in the event EXCEPT:

Holliday Company's inventory records show the following data:

Cerrena [4.2K]

Answer:

The correct answer is A.

Explanation:

Giving the following information:

Inventory:

January 1: 5,000 units $9.00

Purchases:

June 18: 4,500 units $8.00

November 8: 3,000 units $7.00

A physical inventory on December 31 shows 2,000 units on hand. Holliday sells the units for $12 each. The company has an effective tax rate of 20%. Holliday uses the periodic inventory method.

Units sold= 10,500

FIFO:

COGS= 5,000*9 + 4,500*8 + 1,000*7= 88,000

Sales= 12*10,500= 126,000

COGS= (88,000)

Gross profit= 38,000

Tax= 38,000*0.2= (7,600)

Net operating income= 30,400

LIFO:

COGS= 3,000*7 + 4,500*8 + 3,000*9= 84,000

Sales= 12*10,500= 126,000

COGS= (84,000)

Gross profit= 42,000

Tax= 42,000*0.2= (8,400)

Net operating income= 33,600

Tax difference= LIFO - FIFO= 8400 - 7600= $800

6 0

3 years ago

What should the manager know about foodservice equipment safety?

Jet001 [13]

Your answer is B, <span>If approved by the NSF, it will have a mark to indicate that endorsement.</span>

4 0

4 years ago

Which of these statements are true about the MIC card? Select all that apply Taco Bell Service Course A. It demonstrates how to

Mandarinka [93]

Answer:

C. It sets the priorities for your shift

Explanation:

MIC card give ability to communicate the results of team and helps in making arrangements for the shifts. It also helps in scheduling goals.

3 0

3 years ago

In each of the following situations, state whether the bonds will sell at a premium or discount. Required a. Valley issued $300,

IrinaK [193]

Answer:

a. Premium

b. Discount

c. Discount

Explanation:

a. Valley issued $300,000 of bonds with a stated interest rate of 7 percent. At the time of issue, the market rate of interest for similar investments was 6 percent.

Premium (discount) = Bond's stated interest rate - Market rate of interest for similar investments = 7% - 6% = 1% premium

Therefore, Valley's bond will sell at a premium.

b. Spring issued $220,000 of bonds with a stated interest rate of 5 percent. At the time of issue, the market rate of interest for similar investments was 6 percent.

Premium (discount) = Bond's stated interest rate - Market rate of interest for similar investments = 5% - 6% = -1% discount

Therefore, Spring's bond will sell at a discount.

c. River Inc. issued $150,000 of callable bonds with a stated interest rate of 5 percent. The bonds were callable at 102. At the date of issue, the market rate of interest was 6 percent for similar investments.

Premium (discount) = Bond's stated interest rate - Market rate of interest for similar investments = 5% - 6% = -1% discount

Therefore, River Inc.'s bond will sell at a discount.

3 0

3 years ago

9) A firm is selling two products, chairs and bar stools, each at $50 per unit. Chairs have a variable cost of $25, and bar stoo

Ksivusya [100]

Answer:

Ans.

a) BEP (units) =727; BEP($)= $36,350

b) BEP (units) =690; BEP($)=$34,500

Explanation:

Hi, in order to find the break even point in units, we have to use the following equation in both cases.

$BEP(Units)=\frac{Fixed Costs}{(AveragePrice-Average VariableCost)}$

Since the sales mix is different in both scenarios, let´s find the average variable cost for a) (notice that there is no need to find the average price because both, the stool and the chair have the same price)

$AverageVariableCost=25*\frac{1}{2} +20*\frac{1}{2} =22.5$

Now, the fraction aside each of the price is 1/2 in both cases, because the sale mix 1:1 means that the company makes 1 stool for every chair it makes, in fraction that is, for every 2 items that the company makes, 1 is a stool (1/2) and 1 is a chair (1/2).

So, our BEP in units is:

$BEP(Units)=\frac{20,000}{(50-22.5)} =727$

$BEP(Dollars)=727*50=36,350$

That means that the company has to make 727 units, which 363 are chairs and 364 are stools (you could say 364 chairs and 363 stools too, because we are heavily rouding numbers). This is represented in $36,350 in sales.

Now, for b), our average cost is:

$AverageVariableCost=25*\frac{1}{5} +20*\frac{4}{5} =21$

As you can see, the fraction changed, that is because of the new sales mix of 1:4, that is: the company makes 4 stool for every chair it makes, in fraction that is, for every 5 items that the company makes, 4 are a stools (4/5) and 1 is a chair (1/5).

Now, let´s find our new BEP in units and dollars.

$BEP(Units)=\frac{20,000}{(50-21)} =690$

$BEP(Dollars)=690*50=34,500$

That means that the company has to make 690 products, which 138 are chairs and 552 are stools. This is represented in $34,500 in sales.

Best of luck.

5 0

3 years ago