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iren2701 [21]
3 years ago
6

On January 1, 2018, M Company granted 90,000 stock options to certain executives. The options are exercisable no sooner than Dec

ember 31, 2020, and expire on January 1, 2024. Each option can be exercised to acquire one share of $1 par common stock for $12. An option-pricing model estimates the fair value of the options to be $5 on the date of grant. What amount should M recognize as compensation expense for 2018?
Business
1 answer:
Doss [256]3 years ago
4 0

Answer: $120,000

Explanation:

Given that,

Company granted = 90,000 stock options

common stock = $12

one share = $1 par common stock = $12

Fair value of the option = $5

Total Value of the option = $90,000 × $5 = $450,000

$450,000 × 90% = $405,000

450,000\times\frac{2}{3}   (2 out of 3 years)

        = $270,000

\frac{450,000}{3}

= $150,000

Therefore,

compensation expense for 2018 =  $270,000 - $150,000

                                                       = $120,000

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Different customer statement types are available to suit different client situations. Heather wants to help her client send out
motikmotik

Answer: b. Open Item

Explanation:

The statement that Heather wants to help a client send out is to include unpaid invoices, unapplied payments, and Credit Memos which are essentially signs that the creditor has not been paid.

An open item statement would therefore work best because it is to include open accounts that are yet to be paid so will include all those entries described above.

8 0
2 years ago
Apple is constantly striving to introduce new products into the marketplace. At the initial stage, Apple design teams are separa
Leviafan [203]

Answer:

Idea generation.

Explanation:

The new product development process is a process of taking a product to the market. It is a part of product design. The process continues till the life cycle of product is over.

There are several stages of the new product development.

The stage in which the Apple company is, in the given scenario, is idea generation.

Idea generation is the first stage of the new product development. In this stage, the company seeks for ideas for creating or developing new products.

Therefore, idea generation is the correct answer.

5 0
3 years ago
Cost Flow Relationships
Lady_Fox [76]

Answer:

(A) Cost of goods sold=$7,175,000

(B) Direct material cost= $3,655,000

(C) Direct labor cost= $2,825,000

Explanation:

(A) The cost of goods sold can be calculated as follows

Cost of goods sold= Sales-gross profit

Sales= $12,375,000

Gross profit= $5,200,000

Cost of goods sold= $12,375,000-$5,200,000

= $7,175,000

(B) The direct materials cost can be calculated as follows

Direct cost of materials= materials purchased-indirect materials-materials inventory

Materials purchased= 4,125,000

Indirect materials= 180,000

Materials inventory= 290,000

Direct materials cost= 4,125,000-180,000-290,000

= $3,655,000

(C) The direct labor costs can be calculated as follows

Direct labor costs= Total manufacturing cost for the specified period-direct materials-factory overhead

Total manufacturing costs= 7,880,000

Direct materials= 3,655,000

Factory overhead= indirect labor+indirect materials+other factory overhead

= 410,000+180,000+810,000

= 1,400,000

Direct labor costs= 7,880,000-3,655,000-1,400,000

= $2,825,000

3 0
2 years ago
Winslow Inc. manufactures and sells three types of shoes. The income statements prepared under the absorption costing method for
stellarik [79]

Answer:

Winslow Inc.

a. No. I do not agree with management's decision and conclusions.  Eliminating the running shoes line increased the company-wide loss to $112,600 from a profit of $7,900.

b. Variable Costing Income Statements:

1                                   Cross Training  Golf Shoes  Running Shoes  Total

2 Revenues                      $850,000     $700,000    $635,000  $2,185,000

3 Variable costs:

Cost of goods sold             284,500       248,400      298,500       831,400

Selling and administrative  293,100        175,500       216,000      684,600                      

Total                                    577,600       423,900       514,500    1,516,000

4 Gross profit                   $272,400     $276,100     $120,500   $669,000

5 Fixed costs:

Cost of goods sold             128,500         90,300       120,500      339,300

Selling & administrative      95,900          82,400       143,500       321,800

Total                                   224,400        172,700      264,000        661,100

6 Income (Loss) from       $48,000      $103,400    $(143,500)       $7,900

c. Eliminating the line only eliminated the variable costs of goods sold and selling and administrative expenses.  The fixed costs were not changed with the elimination.  Therefore, eliminating the running shoes line increased the company-wide loss to $112,600 from a profit of $7,900.

Explanation:

a) Data and Calculations:

Winslow Inc.

Product Income Statements—Absorption Costing

For the Year Ended December 31, 20Y1

1                                   Cross Training  Golf Shoes  Running Shoes  Total

2 Revenues                      $850,000     $700,000      $635,000

3 Cost of goods sold           413,000       338,700         419,000

4 Gross profit                    $437,000     $361,300       $216,000

5 Selling & administrative

 expenses                         389,000       257,900         359,500

6 Income (Loss) from        $48,000      $103,400      $(143,500)

1                                   Cross Training  Golf Shoes  Running Shoes  Total

2 Revenues                      $850,000     $700,000    $635,000  $2,185,000

3 Variable costs:

Cost of goods sold             284,500       248,400      298,500       831,400

Selling and administrative  293,100        175,500       216,000      684,600                      

Total                                    577,600       423,900       514,500    1,516,000

4 Gross profit                   $272,400     $276,100     $120,500   $669,000

5 Fixed costs:

Cost of goods sold             128,500         90,300       120,500      339,300

Selling & administrative      95,900          82,400       143,500       321,800

Total                                   224,400        172,700      264,000        661,100

6 Income (Loss) from       $48,000      $103,400    $(143,500)       $7,900

Eliminating the running shoe line:

1                                   Cross Training  Golf Shoes          Total

2 Revenues                      $850,000     $700,000      $1,550,000

3 Cost of goods sold:

Variable costs                     284,500       248,400          532,900

Fixed costs                          128,500         90,300           339,300

Total                                     413,000       338,700           872,200

4 Gross profit                   $437,000      $361,300        $677,800

5 Selling & administrative  expenses:

Variable costs                    293,100         175,500         468,600

Fixed costs                          95,900          82,400          321,800

Total                                  389,000        257,900         790,400

6 Income (Loss) from       $48,000      $103,400       ($112,600)

3 0
2 years ago
The manufacturing overhead budget at Cutchin Corporation is based on budgeted direct labor-hours. The direct labor budget indica
Setler [38]

Answer:

$59,080

Explanation:

The calculation of September cash disbursements is shown below:-

September cash disbursement = Company's budgeted fixed manufacturing overhead - Depreciation + Variable manufacturing overhead

= $43,120 - $3,640 + $7.00 × 2,800

= $43,120 - $3,640 + $19,600

= $62,720 - $3,640

= $59,080

Therefore for computing the September cash disbursement we simply applied the above formula.

4 0
2 years ago
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