First you need to find out the amount of insurance coverage needed:
80% of the home value.
(312,500 X .80)
Find that row in the table. Then look in the first column for the amount.
Answer:
$5,220,128.80
Explanation:
For computing the depreciation expense for 2018 under the units of production method, first we have to determine the per unit which is shown below
= (Original cost - residual value) ÷ (estimated production hours)
= ($40,500,000 - $44,000) ÷ (31,000 hours)
= ($40,456,000) ÷ (31,000 hours)
= $1,305
0.322
Now for the year 2018, it would be
= Production hours in 2018 × depreciation per unit
= 4,000 hours × $1,305
0.322
= $5,220,128.80
Answer:
Since the answer requires construction of a proforma income statement, please refer to the explanation section for the answer
Explanation:
The proforma invoice has been provided below. Sales have been increased by 18%. The question states that costs vary with sales therefore, the costs are kept at the same percentage of sales in the proforma. Costs as a percentage of sales in the question come out to 82%. Taxable income is Sales less Costs. Taxes are 22% of taxable income. Dividend payout ration is calculated by dividends paid divided by total income available to shareholders. Total income available to shareholders includes Net Income PLUS non cash charges (depreciation) MINUS Non Cash Sales. With the information given in the question, it is assumed that non cash charges and non cash sales are zero so the only income available to shareholders is the net income. Dividend payout in the question comes out to 35%.
Sales 57,820.00
Costs 47,554.00
Taxable Income 10,266.00
Taxes 2,258.52
Net Income 8,007.48
Dividend = Dividend payout ratio x Net Income: 0.35 x 8,007.48
So, Dividends = 2,832.00
Addition in Retained earnings = Net Income - Dividend = 8,007.48 - 2,832
So, Addition in Retained earnings = 5,175.48
Flesch Corporation produces and sells two products, in case if there is any shift in the sales from product Y45E to C90B, then the breakeven will also decrease, since the contribution margin for Product C90B is less than the Product Y45E.
Contribution Margin: Total Contribution ÷ Total Sales
Product C90B:
=(26100-9135) ÷ 26100
= 35%
Product Y45E:
= (33540-15093) ÷ 33540
= 45%
Since the contribution margin of Product C90B < Product Y45E, the breakeven will decrease.
