Indicate whether it would appear on the statement of cash flows as a(n)? operating activity, investing activity, or financing ac
1 answer:
You might be interested in
Answer:
<h2> Whispering Winds Corp.</h2>Statement of Cash Flows (Indirect Method) 2017
Cash flow from operating activities:
net income $161,100
Adjustments to reconcile net income:
+ depreciation expense $40,160
+ loss on sale of equipment $2,020
Change in current assets:
- increase in accounts receivable ($40,050)
- increase in inventory ($44,310)
+ increase in prepaid expenses $1,980
Change in current liabilities:
+ increase in accounts payable $2,580
- decrease in accrued exp. payable ($10,070)
Net cash provided by operating activities $113,410
Cash flow from investing activities:
purchase of new equipment ($164,450)
sale of old equipment $33,650
Net cash provided by investing activities ($130,800)
Cash flow from financing activities:
Proceeds from issue of new stocks $171,150
- redemption of bonds ($49,180)
- dividends paid ($85,680)
Net cash provided by financing activities $36,290
<u>Net increase in cash $18,900</u>
Answer:
(A) Mexican supplier cost = $445,800 or $89.16 average cost.
In-house cost = $714,000 or $142.8
(B) Mexican supplier total weighted score = 0.265 or 22.43%
In-house supplier weighted score= 0.238 or 23.8%
(C) Yes, explaination below
Explanation:
Mexican Supplier cost breakdown:
Quota price $83 X 5000 = $415, 000
Transport cost
1. to transport 5000 doors would require making a total of 20 trips from Mexico to USA (5000/250 doors)
2. at a cost of $825 per trip, total cost to transport doors is = $16,500.
Sending Engineers costs and Negotiation cost =
$5000 + $1000
(Transport+Sending Engineers cost) =
$22,500
Inventory carrying cost= 20% of cost of storing the goods. (total of all other cost) 20% x 22500 = $8300
Total cost = $445,800 or $89.16 average cost.
Total weighted score average:
Using the formula;
Weight= score x rating
Score = Weight/rating (making score subject of the formula)
Mexican Weighted
score1= 16%/3 = 0.0533, + 0.12 score2, + 0.035 + score3, + 0.056 + score4. = 0.265.
American weighted score
Using same formula;
0.04 score1, + 0.15 score2, + 0.014 score3, + 0.034 score 4 = 0.238.
The company should outsource the product. Why? because it will reduce total cost of doors, making them cheaper for if they do so, resulting in higher profit.
