"if a natural monopoly regulatory commission sets a price where marginal cost is equal to demand"

The information below pertains to Barkley Company for 2015.

alexira [117]

Answer:

a. $1.38

b. anti-dilutive.

Explanation:

Basic Earnings Per Share = Earnings Attributable to Holders of Common Stock / Weighted Average Number of Common Stock Holders

Earnings Attributable to Holders of Common Stock Calculation :

Net income for the year $1,160,000

Less Bond Interest after tax ($2,010,000 × 7% × 80%) ($112,560)

Less Preference Stock dividend ($4,080,000 × 6%) ($244,800)

Earnings Attributable to Holders of Common Stock $802,640

Weighted Average Number of Common Stock Holders Calculation :

Common Stock (5,800,000 / $10) 580,000

Weighted Average Number of Common Stock Holders 580,000

Basic Earnings Per Share = $802,640 / 580,000

= $1.38

Diluted Earnings Per Share = Adjusted Earnings Attributable to Holders of Common Stock / Adjusted Weighted Average Number of Common Stock Holders

Adjusted Earnings Attributable to Holders of Common Stock Calculation :

Earnings Attributable to Holders of Common Stock $802,640

Add Back Bond Interest after tax ($2,010,000 × 7% × 80%) $112,560

Add Back Preference Stock dividend ($4,080,000 × 6%) $244,800

Adjusted Earnings Attributable to Holders of Common Stock $1,160,000

Adjusted Weighted Average Number of Common Stock Holders Calculation

Weighted Average Number of Common Stock Holders 580,000

Add Convertible Bonds ($2,010,000 / $1,000 × 30) 60,000

Add Convertible Preference Shares ($4,080,000/$100 ×3) 122,400

Less Common Stock Options (82,100)

Adjusted Weighted Average Number of Common Stock Holders 680,300

Diluted Earnings Per Share = $1,160,000 / 680,300

= $ 1.70

Conclusion : Convertible Bonds, Convertible Preference Shares and Common Stock Options are anti-dilutive.

6 0

3 years ago

Currently, you make one of the components needed for final assembly of your product and you are considering buying the part from

VashaNatasha [74]

Answer:

1. Break even quantity is 18,125 units

2. Cost to make 28,000 units = $ 775,000

3. Total costs to buy 28,000 units = $ 696,000

4. Savings by using low cost option ( buy from outside) $ 79,000

Explanation:

Computation of Break even point

Variable cost to make equipment in house $ 25 per unit

Cost to purchase the unit from outside $ 17 per unit

Differential Cost per unit $ 8 per unit

Fixed costs to be paid to outside supplier $ 220,000

Fixed costs to be incurred in house $ 75,000

Incremental fixed costs $ 145,000

Break even point - Differential in fixed costs / Differential cost per unit

$ 145,000/ $ 8 = 18,125 units

Computation of costs to make 28,000 units

Variable costs per unit - $ 25 per unit

Units to be produced - 28,000 units

Total Variable costs $ 25 * 28,000 units $ 700,000

Fixed costs $ 75,000

Total costs to make 28,000 units $ 775,000

Computation of costs to buy 28,000 units

Variable costs per unit - $ 17 per unit

Units to be produced - 28,000 units

Total Variable costs $ 17 * 28,000 units $ 476,000

Fixed costs $ 220,000

Total costs to make 28,000 units $ 696,000

Computation of savings

Buying 28,000 units $ 775,000

Making 28,000 units $ 696,000

Savings from buying from outside $ 79,000

6 0

3 years ago

How to calculate cost of sales and gross profit

marin [14]

<h2>Answer:</h2><h2>Answer:Gross profit is the profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services. Gross profit will appear on a company's income statement and can be calculated by subtracting the cost of goods sold (COGS) from revenue (sales)</h2>

4 0

2 years ago

Which agricultural worker cuts down trees with chain-saws?

maksim [4K]

The agricultural worker that cuts down trees with chain-saws is a lumberjack.

3 0

3 years ago

Read 2 more answers

In February, Pedro, the manager of a pool supply and cleaning company, is looking at the upcoming need for more workers to handl

Mademuasel [1]

Planning is the management process that Pedro is using.

Answer: Option A.

Explanation:

Management process is the process that has certain steps and procedures in it that a business organisation needs to follow to achieve the goals of the organisation and for the betterment of the business organisation for which the employers are working.

The various steps and procedures of the management process are planning, organizing, managing, leading, controlling and so on. Planning is the management process in which all the resources needed to achieve the organisational goals are planned and there is proper thinking before acting to achieve the goals.

5 0

3 years ago