Acct. Optimistic Likely Activity Variance

Helena corporation declared a 2-for-1 stock split on 8,000 shares of $6 par value common stock. if the market price of the stock

Kryger [21]

In a 2 for 1 stock split, par value and market value will be 1/2 of what they were prior to the split and number of shares will be two times what it was.

So,

par value will be 6 x 0.5 = $ 3.00

market value will be 25 x 0.5 = $ 12.50

number of shares 8,000 x 2 will be 16,000 shares

3 0

3 years ago

High Flying takes tourists on helicopter tours of Hawaii. Each tourist buys a $190 ticket; the variable costs average $57 per pe

Dennis_Churaev [7]

Answer:

a. 450 tours per month

b. $850 per month

c. CM Ratio = 0.7

d.

1. Increase

2. Decrease

3. No Effect

Explanation:

The questions are:

a. Compute the average number of tours the company must conduct per month to break even

b. Compute the average sales revenue needed per month to produce a target average profit of $53,200

c. Calculate the contribution margin ratio. (Round your answer to 2 decimal places.)

d. Determine whether the actions that follow will increase, decrease, or not affect the company's break-even point.

1. A decrease in tour prices.

2. The termination of a salaried clerk (no replacement is planned).

3. A decrease in the number of tours sold.

Solution:

a.

Selling Price = 190

VC = 57

Unit Contribution Margin = $133

Fixed Cost = 718,200 yearly, so monthly is:

718,200/12 = 59,850

Break even occurs when by selling tours they will cover monthly fixed cost of 59,850 [each tour will get 133], thus:

59,850/133 = 450 tours per month

b.

718,200 FC yearly, means, monthly:

718,200/12 = $59,850

Profit needed 53,200, so we would need to cover:

53200+59850 = $113,050

Each tour gives Unit CM to be $133, so we would need revenue of:

Rev = 113,050/133 = $850

c.

Contribution margin ratio is the quotient of difference in sales and var expenses to sales.

So,

CM Ratio = (Sales - Var Exp) / Sales

CM Ratio = (190 - 57) / 190 = 0.7

d.

1.

If the tour prices, decrease, there will be less revenue coming in so the break even point would go higher.

So, break even point will increase

2.

If a salaried clerk is terminated, it will decrease the salary costs of the company. This is decrease the fixed costs of the company (annual wages and salaries), thus it will be easier to cover the new, lower, fixed costs. Thus, the break even point will decrease

3.

A decrease in number of tours sold would proportionally change the variables and other costs and revenues associated. If you look at the calculation above, you will see that "number of tours" won't affect the Break Even Point. Thus, this action will create "no effect".

7 0

3 years ago

The existence of a ________ means that the interest rate on a two-year bond will exceed the average interest rate on two success

krok68 [10]

The answer is risk-premium

7 0

2 years ago

lander has a netflix account and loves to watch independent and international films. after each film that he streams, netflix cr

marysya [2.9K]

Netflix is using the digital marketing technique of using measurable, data-driven information to add customer value.

This digital marketing technique of creating a list of potential films based on Lander's film screening history helps Netflix generate value for the customer, generating benefits such as:

reduction in the time the client looks for a film.

meeting customer needs.

increased satisfaction.

greater customer loyalty.

creation of relationship and interaction between company and customer.

Therefore, artificial intelligence uses data to create value for the consumer, making the experience more targeted and aligned with consumer tastes and preferences, which makes the company better positioned and competitive in the market.

Learn more here:

brainly.com/question/8367090

5 0

2 years ago

Read 2 more answers

Jeremy operates a business as a sole proprietorship. The proprietorship uses the cash method of accounting. He decides to incorp

ollegr [7]

Answer:

$13,000

Explanation:

Given that:

Jeremy operates a business as a sole proprietorship which uses a cash method of accounting. Now he is planning transfer them into a new corporation in exchange for its stock.

The assets are :

$10,000 of accounts receivable with a zero basis

have a basis of $20,000 and an FMV of $40,000

Liabilities

payable of $12,000

The note payable on medical equipment is $7,000.

Therefore , Jeremy's basis for his stock is : $20,000 -$7,000 = $13,000

since that will reduce the basis by amount of the note payable.

The liabilities payable will be deducted and taken care of by the corporation.

8 0

2 years ago