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Mashcka [7]
3 years ago
12

Mona contracts to repair a computer for New Data, Inc. (NDI) for $450 and have it done by next Monday. Mona knows that without t

he computer by Monday, NDI will lose a sale in which it will make $5,000 profit. Mona does not perform as promised, NDI loses the sale, and has to get someone else to repair the computer at a cost of $1,000. NDI files a suit against Mona. As consequential damages, NDI can recover:
Business
1 answer:
damaskus [11]3 years ago
8 0

Answer:

$5,000

Explanation:

Consequential damages are damages that result from the one party in a contract not performing their part or breaching the contract.

In this case, New Data can sue Mona for consequential damages resulting from Mona not performing her contractual obligations. The damages that New Data can recover = $5,000 which is the profit from the lost sale. The $1,000 spent fixing the computer cannot be recovered.

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Dream, Inc., has debt outstanding with a face value of $6 million. The value of the firm if it were entirely financed by equity
Deffense [45]

Answer:

$650,000

Explanation:

For computing the decrease in the  expected bankruptcy costs, first we have to determine the total firm value in each case which is shown below:

Total firm value = Equity + Debt × corporate tax rate

                          = $17,850,000 + $6,000,000 × 0.35

                          = $17,850,000 + $2,100,000

                          = $19,950,000

Now the total firm value based on market share

= Equity + Debt

= 350,000 shares × $38 + $6,000,000

= $13,300,000 + $6,000,000

= $19,300,000

The difference would be

= $19,950,000 million - $19,300,000

= $650,000

5 0
3 years ago
Sheffield Corp. produces three versions of baseball bats: wood, aluminum, and hard rubber. A condensed segmented income statemen
nekit [7.7K]

Answer:

The correct answer is D.

Explanation:

Giving the following information:

Sales=$775000

Variable expenses= 523000

Contribution margin= 252000

Fixed expenses= 132000

Net income= $120000

Hard Rubber:

Sales=$65000

Variable expenses=58000

Contribution margin= 7000

Fixed expenses= 22000

Net income= -15000

New net income= 120,000 + 15,000 - 22,000= 113,000

6 0
3 years ago
Wolsey Industries Inc. expects to maintain the same inventories at the end of 2016 as at the beginning of the year. The total of
iogann1982 [59]

Answer:

Wolsey Industries Inc.

A. Estimated Income Statement for year ended December 31, 2016

Sales Revenue                                           $4,320,000

Cost of goods sold                                      3,062,000

Gross profit                                                $1,258,000

Expenses:

7. Sales salaries and  commissions 326,000

8 Advertising                                      40,000

9 Travel                                               12,000

10 Miscellaneous selling                    34,600

11 Administrative expenses:

12 Office and officers’ salaries       132,000

13 Supplies                                       118,000

14 Miscellaneous administrative      40,400  $703,000

Net income                                                    $555,000

B. Expected Contribution Margin ratio = 25%

C. Break-even sales in units and dollars:

Sales in units:  13,125

Sales in dollars:  $2,100,000

D.  The break-even sales is 13,125 units and $2,100,000

E. The expected margin of safety:

Sales dollars:   $2,220,000

Percentage of Sales: 48.6% ($2,100,000/$4,320,000)

F. Operating leverage: = Contribution/Net operating income

= $1,080,000/$555,000 = 1.95

Explanation:

a) Data and Calculations:

1                                                 Estimated           Estimated

                                                 Fixed Cost     Variable Cost (per unit sold)

2 Production costs:

3 Direct materials                             —                  $46.00

4 Direct labor                                    —                    40.00

5 Factory overhead                $200,000.00          20.00

6 Selling expenses:

7 Sales salaries and

commissions                               110,000.00            8.00

8 Advertising                               40,000.00             —

9 Travel                                        12,000.00             —

10 Miscellaneous selling

expense                                         7,600.00             1.00

11 Administrative expenses:

12 Office and officers’ salaries 132,000.00               —

13 Supplies                                  10,000.00             4.00

14 Miscellaneous administrative

expense                                      13,400.00              1.00

15 Total                                 $525,000.00       $120.00

Selling price per unit = $160

Sales volume = 27,000 units

Sales revenue = $4,320,000 ($160 * 27,000)

Variable production cost = $106 per unit

Total variable production costs = $2,862,000 ($106 * 27,000)

Fixed production cost =                     200,000

Total production cost =                $3,062,000

                                                   Total          Per Unit

Sales revenue =                    $4,320,000    $160

Variable production costs = $2,862,000      106

Variable expenses                     378,000         14

Total variable costs              $3,240,000    $120

Contribution =                       $1,080,000      $40

Contribution margin ratio = 25% ($40/$160 * 100)

Total fixed costs:

Production costs = $200,000

Selling and admin = 325,000

Total fixed costs = $525,000

Break-even point = Fixed costs/Contribution margin per unit

= $525,000/$40 = 13,125

Break-even point in dollars = $525,000/25% = $2,100,000

7. Sales salaries and  commissions 326,000  (110,000.00 + (27,000 * 8.00))

8 Advertising                                      40,000

9 Travel                                               12,000

10 Miscellaneous selling

expense                                             34,600 (7,600.00 + (27,000 * 1.00))

11 Administrative expenses:

12 Office and officers’ salaries       132,000

13 Supplies                                       118,000 (10,000.00 + (27,000 * 4.00))

14 Miscellaneous administrative

expense                                          40,400 (13,400.00 + (27,000 * 1.00))

5 0
3 years ago
Interest is the rate earned from a <br> stock share <br> savings account <br> deposit <br> loan
Law Incorporation [45]

Answer:

savings account

deposit

Explanation:

Interest is the money earned when deposits or savings stay in a financial institution for some time. Financial institutions such as commercial banks pay interests to encourage the public to save and keep deposits in their bank accounts. Interest earned is determined by the amount of deposit or saving, the interest rate offered, and the duration of time the money stayed in the bank.

A high-interest rate is attractive to the public as it earns more interest. Financial institutions compete for deposits and saving by offering better interest rates.

4 0
3 years ago
An investor owns 60 shares of common stock of a company issuing new shares in a rights offering. The stock trades at $12 per sha
Mkey [24]

Answer:

7 shares and $70

Explanation:

The computation is shown below:

The additional shares is

= 60 shares ÷ 9

= 7 shares

And, the amount  of money that have to be paid is

= Additional shares × purchase price

= 7 × $10

= $70

Therefore the same would be considered relevant

4 0
3 years ago
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