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3 years ago

Sales $200,000 Net income 100,000 Depreciation 20,000 Interest 10,000 Taxes 5,000 What is the company’s operating profit margin?

Business

1 answer:

WITCHER [35]3 years ago

3 0

Answer:

57.5%

Explanation:

Data Provided:

Total Sales = $ 200,000

The net income = $ 100,000

Depreciation = $ 20,000

Interest = $ 10,000

Taxes = $ 5,000

Now,

the operating profit is the from the income before the taxes and interest. Thus,

the interest and taxes will be included in the net income for the operating profit

therefore,

The operating profit = income + Interest + Taxes

The operating profit = $ 100,000 + $ 10,000 + $ 5,000 = $ 115,000

Now,

the operating profit margin = ( Operating profit / Sales ) × 100

= ( $ 115,000 / $200,000 ) × 100 = 57.5%

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On January 1, 2005 Franz Company purchased a truck that cost $22,000. The truck had an expected useful life of 5 years and a $4,

allochka39001 [22]

Answer: The amount of depreciation expense recognized in 2006, using the double declining balance method is $5,280.

And the journal entries required are:

Debit Depreciation expense $5,280

Credit Accumulated depreciation $5,280

Explanation: The double-declining method is otherwise known as reducing balance method. It is usually derived by using the formula below:

Double-declining depreciation = 2 X SLDP X BV

Where SLDP = straight-line depreciation percentage

BV = Book value of the asset (Cost minus depreciation)

So using the straight-line depreciation method, we need to remove the salvage value from the cost and then divided by 5 years. That is, ($22,000 - $4,000) / 5 years = $3,060 yearly depreciation expense.

However, under the double-declining method, we need to divide the 100% by the useful life of the asset first to get the SLDP then multiply by 2, that is, 100%/5 years = 20% x 2 = 40%.

So 40% x $22,000 in year 1 (December 31, 2005) is $8,800

In year 2 (December 31, 2006), 40% x $13,200 ($22,000 - $8,800) = $5,280 and so on. The depreciation expense would stop immediately it falls below the salvage value of $4,000.

So the book value of the asset at the end of year 2 is $7,920 ($13,200 - $4,000 accumulated depreciation).

5 0

3 years ago

Read 2 more answers

In an attempt to have funds for a down payment, Jan Carlson plans to save $3,700 a year for the next five years. With an interes

Sveta_85 [38]

Answer:

$20,857.24

Explanation:

This is an ordinary annuity question which can be solved using a financial calculator. The inputs are as follows;

Total duration of investment; N = 5

Interest rate per year; I/Y = 6%

Recurring annual payment; PMT = 3,700

One time cashflow; PV = 0

then compute the future value of the annuity; CPT FV = 20,857.244

Therefore, Jan will have $20,857.24 as down payment in 5 years.

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3 years ago

Heavy Products, Inc. developed standard costs for direct material and direct labor. In 2017, AII estimated the following stand

Nitella [24]

Answer:

Direct labor efficiency variance= 0

Explanation:

Giving the following information:

Direct labor 0.2 hours $ 35 per hour. During June, Heavy Products produced and sold 16,000 containers using 3,200 direct manufacturing labor-hours at an average wage of $ 51.00 per hour.

Direct labor efficiency variance= (Standard Quantity - Aactual Q)*standard rate

Direct labor efficiency variance= (0.2*16,000 - 3,200)*35= 0

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3 years ago

Suppose the Federal Reserve announces that it will be making a change to a key interest rate to increase the money supply. This

lubasha [3.4K]

Answer:

Correct option is B

The Federal Reserve is worried about unemployment

Explanation:

We know from phillips curve, there is a backwards connection between swelling rate and joblessness rate. Hence joblessness rate can be diminished by expanding expansion which should be possible by expanding cash supply.

Or then again an expansion in cash supply will diminish loan fee prompting increment in venture and subsequently increasingly capital development, because of which more work is required and therefore joblessness diminishes.

4 0

3 years ago

The cost for a carton of milk is $3, and it is sold for $5. When the milk expires, it is thrown out. You also know that the mean

svetlana [45]

Answer:

a) $3

b) $2

c) 1449

Explanation:

Given:

The cost for a carton of milk = $3

Selling price for a carton of milk = $5

Salvage value = $0 [since When the milk expires, it is thrown out ]3

Mean of historical monthly demand = 1,500

Standard deviation = 200

Now,

a) cost of overstocking = Cost for a carton of milk - Salvage value

= $3 - $0

= $3

cost of under-stocking = Selling price - cost for a carton of milk

= $5 - $3

= $2

b) critical ratio = $\frac{\textup{cost of under-stocking }}{\textup{cost of overstocking + cost of under-stocking }}$

critical ratio = $\frac{\textup{2}}{\textup{3 + 2}}$

critical ratio = 0.4

c) optimal quantity of milk cartons = Mean + ( z × standard deviation )

here, z is the z-score for the critical ration of 0.4

we know

z-score(0.4) = -0.253

thus,

optimal quantity of milk cartons = 1,500 + ( -0.253 × 200 )

= 1500 - 50.6

= 1449.4 ≈ 1449 units

4 0

3 years ago