Answer:
a. $197,600
b. $163,400
c. $108,600
Explanation:
a. Manufacturing margin = Sales - Variable cost of goods sold
= $380,000 - $182,000
= $197,600
b. Contribution margin = Manufacturing margin - Variable selling and administrative expenses
= $197,600 - $34,200
= $163,400
c. Income from operations = Contribution margin - Fixed manufacturing costs - Fixed selling and administrative expenses
= $163,400 - $57,000 - $2,800
= $108,600
<u>Answer:</u> Option 1
<u>Explanation:</u>
If the convertible bonds are issued at discount then it will increase the numerator. Convertible bonds yields a fixed interest income. When the convertible bonds are issued at a discount then they can be converted into shares and discount is considered in the purchasing price of the stock.
In amortized bond the each payment goes towards the interest as well as the principle amount. Amortization reduces the credit risk as the principle is repaid on maturity or on default of the firm.
Answer:
Leverage factor will be 1.344
Explanation:
We have given operating income = $29000
And variable expenses is 65 5 of the sales
And fixed expenses = $10000
So contribution margin = $29000+$10000 = $39000
We have to find the leverage factor
Leverage factor is given by
Leverage factor 
So leverage factor will be 1.344
Answer:
$112,000
Explanation:
The Equity method shall be used in this question for determining book value of investment made by the Johnston company in Truly Inc because the investment gives the Johnston company the significant influence over the Truly Inc.
Under equity method, the book value of investment made by the Johnston company as at end of year 1 shall be determined as follow:
Amount invested initially $100,000
Add: Net income for the year $20,000
(50,000*40%)
Less: dividends received ($8,000)
(20,000*40%)
Book value of investment at end of year 1 $112,000
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