Answer:
$205,000
Explanation:
Sales = $210,000
Opening accounts receivables = $20,000
Ending accounts receivables = $25,000
Using the formula
Opening accounts receivables + Sales - Cash collected = closing accounts receivables
$20,000 + $210,000 - Cash collected = $25,000
Cash collected = $20,000 + $210,000 - $25,000
= $205,000
The cash collected from sales reduces the balance in the accounts receivables.
Answer: See explanation and attachment
Explanation:
a. What is the contribution margin for a room night under the normal pricing if only the hotel depreciation and hotel staff (excluding housekeeping) are assumed fixed for all occupancy levels?
Price = $180
Less: Variable Costs:
House keeping staff = $23
Utilities = $7
Amenities = $3
Total variable costs = $33
Contribution margin = $147
B. Determine the contribution margin for a room night under the proposed weekend pricing.
Price = $120
Less: Variable Costs:
House keeping staff = $23
Utilities = $7
Amenities = $3
Total variable costs = $33
Contribution margin = $87
C. Prepare a differential analysis showing the differential income for an average weekend between the existing (Alternative 1) and discount (Alternative 2) price plan.
Check attachment for solution
D. Should management accept the proposed weekend pricing plan? Explain.
No. From the calculation in C, there is reduction in income.
Answer: Market based transfer pricing
Explanation:
A transfer price is the price which is charged by one division of an organization for the product or service which is supplied to another division of the same organization.
The three main criteria which must be satisfied by transfer pricing system in the decentralized company are:
(1) provision of information that allows central management to assess the divisions based on their contribution to total profit of the company
(2) stimulate every manager’s efficiency without the loss of the division’s autonomy.
(3) motivation of the divisional managers in order to accomplish their own profit goal in a way that contributes to the success of the company.
This is market based transfer pricing because the $220 transfer price that is selected is based on quoted external price.
Answer:
The annual annuity payment during this time at the rate of 6.50 % is $1291.67
Explanation:
Compute the annual annuity payments (PMT)
Present Value of annuity (PV) = $10538.38
Number of years (n) = 12
Rate (i) = 6.50%
![Present Value (PV) = PMT [1- (1+r)^{n} ]/r]](https://tex.z-dn.net/?f=Present%20Value%20%28PV%29%20%3D%20PMT%20%5B1-%20%281%2Br%29%5E%7Bn%7D%20%5D%2Fr%5D)
![10538.38 = PMT [1- (1+0.0650)^{-12} ]/0.0650](https://tex.z-dn.net/?f=10538.38%20%3D%20PMT%20%5B1-%20%281%2B0.0650%29%5E%7B-12%7D%20%5D%2F0.0650)
![Annual Annuity Payments = 0.0650*10538.38/[1- (1+0.0650)^{-12} ]](https://tex.z-dn.net/?f=Annual%20Annuity%20Payments%20%3D%200.0650%2A10538.38%2F%5B1-%20%281%2B0.0650%29%5E%7B-12%7D%20%5D)
Annual Annuity Payments = $1291.67
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