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LuckyWell [14K]
3 years ago
8

Problem 4-8 Sales and Growth [LO2] The most recent financial statements for Alexander Co. are shown here: Income Statement Balan

ce Sheet Sales $ 42,950 Current assets $ 17,580 Long-term debt $ 37,070 Costs 35,550 Fixed assets 68,350 Equity 48,860 Taxable income $ 7,400 Total $ 85,930 Total $ 85,930 Taxes (21%) 1,554 Net income $ 5,846 Assets and costs are proportional to sales. The company maintains a constant 35 percent dividend payout ratio and a constant debt-equity ratio. What is the maximum dollar increase in sales that can be sustained assuming no new equity is issued
Business
1 answer:
Flura [38]3 years ago
3 0

Answer:

$3,621.96

Explanation:

ROE = Net income/Equity * 100

ROE = 5846/48860*100

ROE = 11.9648%

Dividend payout ratio = 35%

Retention Ratio = 1 - 35% = 65%

Sustainable growth rate = (ROE*b)/(1-ROE*b)

Sustainable growth rate = (11.9648%*0.65)/(1- (11.9648%*0.65%))

Sustainable growth rate = 8.43%

Therefore, Maximum Dollar Increase in sales = Sales * Sustainable growth rate = 42,950 * 8.43% = $3,621.96

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GuDViN [60]

Answer:

Option D is correct

Equivalent units

Material cost  = 122, 500

Conversion cost =  112,000

Explanation:

Equivalent units = Units × degree of completion(%)

Material cost

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transferred out    100,000       100,000× 100%   = 100,000

Closing inventory   30,000      30,000     75%    =   <u> 22,500 </u>

Equivalent unit                                                            <u>122,500</u>

<u />

<u>Conversion cost</u>

Item                               Unit                             Equivalent units

transferred out    100,000       100,000× 100%   = 100,000

Closing inventory   30,000      30,000  ×  40%    =   <u> 12,000</u>

Equivalent unit                                                            <u>112,000</u>

<u />

Equivalent units

Material cost  = 122, 500

Conversion cost =  112,000

5 0
3 years ago
1. All of the following would be classified as manufacturing overhead except the: A) wages of supervisor of the machining shop.
jek_recluse [69]

Answer:

D) All of the above would be classified as manufacturing overhead.

Explanation:

Manufacturing overhead is the overhead incurred directly in relation to the manufacturing process.

It can be fixed as well as variable, there is no standard conclusion for the above on the basis of nature of overhead.

Machining shop is a part of manufacturing process, and all expense related to that will be classified as manufacturing overhead, whether the expense is in cash like supervisor salary, property taxes of building of machining shop, or non cash expense like depreciation.

Therefore, all the expenses will be included in manufacturing overhead.

8 0
3 years ago
Suppose executives at an art museum know that 100 adults are willing to pay $12 for admission to the museum on a weekday. Suppos
tresset_1 [31]

Answer:

$800

Explanation:

Price discrimination is a technique used by business owners and business in general that consists on chargin a certain group the maximum they are willing to pay for the product of service, in this case it would be $12 for adults and $8 for students, to know how much they will make we just multiply the cost of the tickets by the tickets bought, and the fmor that withdraw the cost of operation.

Tickets*Tickets cost=Earnings\\($12*100)+($8*200)=\\(1200)+(1600)=$2800

Now we know the museum made $2800 in tickets, we take out the $2000 of the operational cost, and we are left with $800 wich would be the net profit for the museum.

3 0
3 years ago
One way of shooting a bow is the instinctive aiming method. what is true about this method? you look at the target with the righ
Sergio [31]
Answer: this method takes longer to perfect than the bowsight method.
In instinctive aiming method. You aim at the target with your both eyes open so looking<span> at the target with the right eye closed or with the left eye closed is not true. </span> It is also not true that this method is less versatile than the bowsight method. <span>It is true that this method takes longer to perfect than the bowsight method.</span>
5 0
3 years ago
The job outlook for physical therapists
dusya [7]

The job outlook for physical therapists B. depends on the economy. Jobs in general depend on the economy and the needs of those within it. If there is a high need for physical therapists, then the will improve or remain stable over time. If the economy starts to decline, there may be a lesser need or opportunity for physical therapists (and other professions) to find work.

8 0
3 years ago
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