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Alchen [17]
3 years ago
12

Lean Accounting Modern Lighting Inc. manufactures lighting fixtures, using lean manufacturing methods. Style Omega has a materia

ls cost per unit of $16. The budgeted conversion cost for the year is $308,000 for 2,200 production hours. A unit of Style Omega requires 18 minutes of cell production time. The following transactions took place during June: Materials were acquired to assemble 620 Style Omega units for June. Conversion costs were applied to 620 Style Omega units of production. 600 units of Style Omega were completed in June. 580 units of Style Omega were sold in June for $100 per unit. a. Determine the budgeted cell conversion cost per hour. $fill in the blank 123395f17062029_1 per hour b. Determine the budgeted cell conv
Business
1 answer:
Dimas [21]3 years ago
8 0

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Miller's Dry Goods is an all-equity firm with 50,000 shares of stock outstanding at a market price of $40 a share. The company's
Artemon [7]

Answer:

Number of Shares Sold= 125

so correct option is C. 125 shares

Explanation:

given data

stock outstanding = 50,000 shares

market price = $40

interest and taxes = $142,000

debt = $500,000

interest = 6 percent

own = 500 shares

to find out

How many shares of Miller's stock must you sell

solution

we get here shares repurchased that is express as

shares repurchased = \frac{500000}{40}

shares repurchased  = $12500

and

no of Shares Outstanding with Debt will be

no of Shares Outstanding with Debt = $50000 - $12500

no of Shares Outstanding with Debt  = $37500

and

Value of Stock will be

Value of Stock = $37500 × $40

Value of Stock = $1500000

and

now Total Value will be

total value  = $500000 + $1500000

total value = $2000000

so Weight of Debt is here

Weight of Debt =  \frac{500000}{2000000}

Weight of Debt = 0.25

so Weight of Stock  is

Weight of Stock = \frac{1500000}{2000000}

Weight of Stock = 0.75

so

Initial Investment is  = 500 × 40

Initial Investment = $20000

and

Value on New Stock Position will be

Value on New Stock Position = 0.75 × $20000

Value on New Stock Position = $15000

so

New Shares is  =  \frac{15000}{40}

New Shares is  = 375

and

Number of Shares Sold will be

Number of Shares Sold = 500 - 375

Number of Shares Sold= 125

so correct option is C. 125 shares

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