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12345 [234]
3 years ago
6

Balt Company maintains a standard cost system; as such, all inventories, including materials, are carried on the books at standa

rd cost. Last period, Balt used 6,000 pounds of Material H to produce 800 units of Product C8. The company has established a standard of 7 pounds of Material H per unit of C8, at a price of $7.50 per pound of material. During the period, Balt purchased 3,000 pounds of Material H. The company spent $20,000 during the period to purchase material H. Required: 1. Calculate the direct materials purchase-price variance for the period, rounded to the nearest dollar. 2. Calculate the direct materials usage variance for the period, rounded to the nearest whole dollar.
Business
1 answer:
g100num [7]3 years ago
5 0

Answer:

1. Purchase price variance = $2,490 Favorable

2. Direct Material Usage Variance = $3,000 Unfavorable

Explanation:

Provided information, we have

Standard Material per unit = 7 pounds

Actual Units produced = 800 units

Standard units = 800 \times 7 = 5,600 pounds

Actual units = 6,000 pounds

Standard Price per pound = $7.50

Actual price = \frac{20,000}{3,000} = $6.67

1. Purchase price variance = (Standard Price - Actual Price) \times Actual Quantity Purchased

= ($7.50 - $6.67) \times 3,000 = $2,490 Favorable

As the price at which units are purchased is less than standard, the variance is favorable.

2. Direct Material Usage Variance = ( Standard Quantity - Actual Quantity) \times Standard Rate

= (5,600 - 6,000) \times $7.50

= - $3,000 Unfavorable

As we can see, the actual quantity used is higher than the standard quantity, therefore the variance is unfavorable.

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In responsibility accounting, unit managers are evaluated only on things that they can:________
hammer [34]

Answer: have control over

Explanation:

Responsibility accounting is a system of accounting whereby responsibility centers are identified and the performance reports of such responsibility centers are prepared and analysed.

Responsibility accounting has to.do with the internal accounting for the responsibility center that the company has and their budgeting.

In responsibility accounting, unit managers are evaluated only on things that they can control or have control over.

7 0
3 years ago
Read 2 more answers
The Nantell Corporation just purchased an expensive piece of equipment. Assume that the firm planned to depreciate the equipment
gtnhenbr [62]

Answer:

D

Explanation:

Nantell's operating income (EBIT) will increase., because now the company will record lower depreciation expense in the income statement due to increase in the life from 5 to 7 taken for the depreciation purposes. So decline in depreciation will result in higher EBIT.

a. is wrong as lower depreciation means higher net income.

b. is wrong as tax liability will not get impacted as tax will follows old method of depreciation.

c. is incorrect as depreciation is non cash expense thus does not impact cash position and tax has already be on the earlier method.

e. is incorrect as increase in EBIT will result in higher taxable income.

hence option D is the only correct option

4 0
3 years ago
Cheyenne Corp. had the following transactions that took place during the year:I.Recorded credit sales of $2250II.Collected $1350
Degger [83]

Answer:

The correct option is d) <u>Decrease</u>.

Explanation:

Free cash flow (FCF) can be described as the cash that is generated by a company after cash outflows required to support operations and maintain the capital assets of the company have been accounted for.

Therefore, FCF can be calculated by adjusting for non-cash expenses, changes in working capital, and capital expenditures to reconcile net income.

The total effect of these transactions on free cash flow can be determined by first calculating the account receivable for the year as follows:

Calculation of account receivable for the year:

<u>Particular                                                     Amount ($)</u>

Credit sales                                                    2,250

Cash collected from the customer              (1,350)

Sales returns                                                <u>   (450)  </u>

Account receivable                                     <u>    450  </u>

A partial free cash flow statement can therefore be prepared as follows:

Cheyenne Corp.

Free cash flow statement (Partial)

<u>Particular                                                                   Amount ($)  </u>

Net income                                                                         xx

(Increase) decrease in non-cash current assets:

Increase in account receivable                                    <u>   (450)  </u>

Free cash flow                                                              <u>   (450)   </u>

<u />

Since the free cash flow is negative or minus $450, it therefore implies that the total effect of these transactions on free cash flow is a <u>decrease</u>.

Therefore, the correct option is d) <u>Decrease</u>.

7 0
3 years ago
The following information was obtained from Galena Company’s comparative balance sheets. Assume that Galena Company’s 2016 incom
marusya05 [52]

The following information was obtained from Galena Company’s comparative balance sheets. Assume that Galena Company’s 2016 income statement showed depreciation expense of $8,000, a gain on sale of investments of $9,000, and net income of $45,000. Calculate the net cash flow from operating activities using the indirect method.

Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $19,000 $9,000

Accounts receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $44,000 $35,000

Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $55,000 $49,000

Prepaid rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6,000 $8,000

Long-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $21,000 $34,000

Plant assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $150,000 $106,000

Accumulated depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $40,000 $32,000

Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $24,000 $20,000

Income tax payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,000 $6,000

Common stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $121,000 $92,000

Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $106,000 $91,000The following information was obtained from Galena Company’s comparative balance sheets. Assume that Galena Company’s 2016 income statement showed depreciation expense of $8,000, a gain on sale of investments of $9,000, and net income of $45,000. Calculate the net cash flow from operating activities using the indirect method.

Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $19,000 $9,000

Accounts receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $44,000 $35,000

Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $55,000 $49,000

Prepaid rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6,000 $8,000

Long-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $21,000 $34,000

Plant assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $150,000 $106,000

Accumulated depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $40,000 $32,000

Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $24,000 $20,000

Income tax payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,000 $6,000

Common stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $121,000 $92,000

Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $106,000 $91,000The following information was obtained from Galena Company’s comparative balance sheets. Assume that Galena Company’s 2016 income statement showed depreciation expense of $8,000, a gain on sale of investments of $9,000, and net income of $45,000. Calculate the net cash flow from operating activities using the indirect method.

Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $19,000 $9,000

Accounts receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $44,000 $35,000

Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $55,000 $49,000

Prepaid rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6,000 $8,000

Long-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $21,000 $34,000

Plant assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $150,000 $106,000

Accumulated depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $40,000 $32,000

Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $24,000 $20,000

Income tax payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,000 $6,000

Common stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $121,000 $92,000

Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $106,000 $91,000

<em><u>p</u></em><em><u>lease</u></em><em><u> mark</u></em><em><u> me</u></em><em><u> as</u></em><em><u> brainliest</u></em><em><u>.</u></em><em><u>.</u></em><em><u>.</u></em><em><u>.</u></em><em><u>.</u></em><em><u>.</u></em><em><u>.</u></em><em><u>.</u></em><em><u>,</u></em><em><u>.</u></em><em><u>.</u></em><em><u>.</u></em><em><u>.</u></em><em><u>.</u></em>

4 0
3 years ago
Companies HD and LD have identical tax rates, total assets, total investor-supplied capital, and returns on investors' capital (
Paul [167]

Answer:

B

Explanation:

Only B appears plausible.

Higher debt means higher interest costs, which would lead to lower net income.

ROA = Net Income / Assets and ROE = Net Income / Equity

Now, assets are same, equity is different. Equity for HD will be lower while that for LD would be higher. Hence, predicting ROE is difficult as we don't know equity but ROA is a bit easier.

4 0
3 years ago
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