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photoshop1234 [79]
2 years ago
7

Blossom Machine Works produces soft serve ice cream freezers. The freezers sell for $17,000, and variable costs total $12,800 pe

r unit. Blossom incurs $13,490,000 in fixed costs during the year. The company’s tax rate is 30%. How many freezers must Blossom sell to generate net income of $7,528,000?
Business
1 answer:
sdas [7]2 years ago
8 0

Answer:

5005 freezers

Explanation:

Sales 17,000

Variable Cost per unit 12,800

Contribution per unit 4,200

Fixed Cost 1,3490,000

Desired Profit 7,528,000

Sale for Desired profit = ( Desired profit + Fixed Cost ) / contribution per unit = ( 7528000 + 13490000 ) / 42001 = 5005 units

It is assumed that the price is exclusive of tax. So tax is not being dealt in this solution.

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Mr. A, a cash-basis taxpayer, sold his business in the current year for $120,000. The contract allocated $40,000 to inventory an
Leona [35]

Answer:

$2,000 ordinary gain and $15,000 long term capital gains

Explanation:

Under the installment method, the taxpayer will recognize gains based on the installments that they actually receive, not the whole contract. This method is generally used for real estate transactions that involve installments payments during several years.

In this case, Mr A received $60,000:

$40,000 for inventory, so gain = $40,000 - $38,000 = $2,000 ordinary gain

$20,000 for real property (25% of transaction price) = $20,000 x [($40,000 - $20,000) x 25%] = $20,000 - $5,000 = $15,000 long term capital gains

4 0
2 years ago
1. In your opinion, what do you think are the common thing that is found in all the elasticity
kari74 [83]

Answer:

Elasticity is an economic concept used to measure the change in the aggregate quantity demanded of a good or service in relation to price movements of that good or service. A product is considered to be elastic if the quantity demand of the product changes more than proportionally when its price increases or decreases

6 0
2 years ago
After Mario completes his monthly report, his boss reviews it to see if the standards were met. If there are errors, Mario is to
iren [92.7K]

Answer: Active management by exception

Explanation:

Active management-by-exception is an active transactional leadership behavior whereby the leader looks out for what has been done wrong by his or her subordinates.

Such leaders monitors the work performance and look out for the mistakes and then corrects the situation by taking a particular action.

Since Mario'd boss reviews his monthly reports to see if the standards were met and that if there are errors, Mario is told he has to work an extra hour each day for the next two weeks. It is an example of Active management by exception

5 0
2 years ago
A company has the opportunity to take over a redevelopment project in an industrial area of a city. No immediate investment is r
Ganezh [65]

Answer:

1-a. The are multiple IRRs stated as follows:

The first IRR value = 4.09%

Second IRR value = 31.82%

1-b. Rate of return = 7.58%

2. This is NOT a good investment because the NPV is negative.

Explanation:

Note: The estimated Net Cash Flow for the 4th year in the data is erroneously stated in the question as a positive value instead as a negative value since it is a cost.

The estimated net cash flows correctly before answering the question as follows:

Year End             Net Cash Flow

1                             $500,000

2                            $300,000

3                            $100,000

4                          –$2,400,000

5                            $150,000

6                            $200,000

7                            $250,000

8                            $300,000

9                            $350,000

10                           $400,000

The explanation of the answers is now given as follows:

1-a. Tabulate the PW versus the interest rate and determine whether multiple IRRs exist.

Note: See Part 1-a of the attached excel file for the tabulation of the PW versus the interest rate.

From Part 1-a of the attached excel file, it can be observed that multiple IRRs exist. This is because there two IRRs stated as follows:

The first IRR value = 4.09%

Second IRR value = 31.82%

1-b. If so, use the ERR method when e 8% per year to determine a rate of return.

Note: See Part 1-a of the attached excel file for the calculation of total future value of income when e = 8% per year.

In the attached excel file, note that year 4 has a cost not income. Therefore,

From attached excel, we have:

Total Future Value of Income = $3,661,508.81

In the attached excel file, note that year 4 has a cost (not income) of $2,400,000. Therefore, it future value is not calculated. However, the present of the cost can be calculated as follows:

Present value of cost in year 4 = $2,400,000 / (100% + e)^4 = $2,400,000 / (100% + 8%)^4 = $1,764,071.65

The rate of return can now be calculated as follows:

Rate of return = ((Total Future Value of Income / Present value of cost in year 4)^(1/Number of period)) - 1 = (($3,661,508.81 / $1,764,071.65)^(1/10)) - 1 = 0.0758, or 7.58%

2. Use the PW method and a MARR of 18% to determine whether this is a good investment.

Note: See Part 2 of the attached excel file for the calculation of net present value (NPV).

From part 2 of the attached excel file, we have:

Net present value = –$21,043.15

Since the net present value is negative, this implies that this is NOT a good investment.

Download xlsx
5 0
2 years ago
Mannarelli Corporation uses the FIFO method in its process costing system. Operating data for the Casting Department for the mon
Serjik [45]

Answer:

$ 5.34

Explanation:

Calculation for cost per equivalent unit for conversion costs for September

First step is to find the Equivalent units of production

To complete beginning work-in-process:

Conversion 12,000

[15,000 units × (100%-20% )]

Units started and completed 65,000

(89,000-24,000)

Ending work-in-process

Conversion 21,600

(24,000 units × 90%)

Equivalent units of production 98,600

Second step is to calculate the Cost per equivalent unit using this formula

Cost per equivalent unit =Cost added during the period ÷Equivalent units of production

Let plug in the formula

Cost per equivalent unit = $526,524÷98,600

Cost per equivalent unit = $5.34

Therefore The cost per equivalent unit for conversion costs for September is closest to $ 5.34

7 0
3 years ago
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