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liraira [26]
3 years ago
15

Tubby Toys estimates that its new line of rubber ducks will generate sales of $7.20 million, operating costs of $4.20 million, a

nd a depreciation expense of $1.20 million. If the tax rate is 30%, what is the firm’s operating cash flow?
a. Calculate the operating cash flow for the year by using all three methods:
(a) adjusted accounting profits;
(b) cash inflow/cash outflow analysis; and
(c) the depreciation tax shield approach. (Enter your answers in millions rounded to 2 decimal places.) Method Cash Flow Adjusted accounting profits $ million Cash inflow/cash outflow analysis million Depreciation tax shield approach million
Business
1 answer:
mixer [17]3 years ago
8 0

Answer:

$2.46 million.

Explanation:

Profit before tax:

= Sales - Variable costs - Depreciation

= $7.20 - $4.20 - $1.20

= $1.80 million

Net income = Profit before tax - Tax

                   = $1.80 million - (30% × $1.80)

                   = $1.80 million - $0.54 million

                   = $1.26 million

(1) Adjusted accounting profits method:

= Net income + Depreciation

= $1.26 + $1.2

= $2.46 million

(2) Cash inflow/Cash outflow method:

= Sales - Cash expenses - Tax

= 7.2 - 4.2 - 0.54

= $2.46 million

(3) Depreciation tax shield method:

= [(Sales - Costs) × (1-Tax rate)] + (Depreciation × Tax rate)

= [(7.2 - 4.2) × (1 - 30%)] + (1.20 × 30%)

= $2.46 million

Therefore, operating cash flow from all the three method is $2.46 million.

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The following information is available for the current year ending December 31:
Oduvanchick [21]

Answer:

Over/under allocation= $30,000 overapplied

Explanation:

Giving the following information:

Manufacturing overhead applied $150,000

The actual amount of manufacturing overhead costs 120,000

To calculate the ending balance, we need to determine whether the overhead was under or over applied:

Over/under allocation= real MOH - allocated MOH

Over/under allocation= 120,000 - 150,000= 30,000 overapplied

7 0
3 years ago
an Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions f
irinina [24]

Answer:

Part 1 - ROI

In terms of Margin :

Division Osaka  = 20 %

Division Yokohama  = 14 %

In terms of Turnover :

Division Osaka  = 400 %

Division Yokohama = 200 %

Part 2 - Residual Income

Division Osaka = $182,000

Division Yokohama  = $210,000

Explanation:

<em>Return on investment (ROI) = Divisional Profit Contribution / Assets Employed in the division x 100</em>

In terms of Margin :

Division Osaka = $ 455,000 / $ 2,275,000 x 100 = 20 %

Division Yokohama = $ 1,470,000/ $ 10,500,000 x 100 = 14 %

In terms of Turnover :

Division Osaka = $ 9,100,000 / $ 2,275,000 x 100 = 400 %

Division Yokohama = $ 21,000,000/ $ 10,500,000 x 100 = 200 %

<em>Residual income = Controllable Profit - Cost of Capital Charge on Controllable Investment</em>

Therefore,

Division Osaka = $ 455,000 - $ 2,275,000 x 12 % = $182,000

Division Yokohama = $ 1,470,000  - $ 10,500,000 x 12 % = $210,000

8 0
3 years ago
Grain's alternative corporation has a predicted operating income of 80,000. The managerial accountant reported that total variab
dexar [7]

Answer:

Number of units needed to reach the operating income of 80,000: 5,200 units

Explanation:

Please find the below for detailed calculations and explanations:

To achieve $80,000 of operating income, denote the number of units needs to be sold is x.

For each unit sold, the incremental in profit will be 20.

Thus, to achieve the profit of 80,000, the amount of x units sold will generate the profit before fixed cost that covers 24,000 fixed cost and 80,000 targeted profit. So, we have:

80,000 + 24,000 = 20x <=> x = 5,200 units.

* For quick calculation purpose, we may apply the formular: Units need to be sold to achieve targeted income = (Fixed cost + targeted income)/ Contribution margin per unit in monetary form.

8 0
3 years ago
What microeconomic factors point to the fact that your business should be successful? Be sure to provide evidence for your claim
SashulF [63]

The microeconomic factors that are important to consider in business is competition, the supply and demand, elasticity of the goods and similar variables. Depending on the business, each has factor has a unique impact which  can either help or ruin the business.Thank you for your question. Please don't hesitate to ask in Brainly your queries.
5 0
3 years ago
Read 2 more answers
Indicate whether the following statements are true or false.
dezoksy [38]

Answer:

1. False,

2. False,

3. False,

4. True

Explanation:

1. Managerial accounting reports focuses on entire net profit and not specifically the manufacturing and non manufacturing cost, and are not specifically used in the budget process.

2. No financial accounting reports all the finance related issues in details but is not divided into sub units.

3. No managerial reports are not audited, they are for internal controls and are to follow GAAP but not mandatory requirement for audit.

4. Managers are responsible for the management of business, for this the main three steps are: Planning Directing and controlling.

7 0
3 years ago
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