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3 years ago

(Algo) Analyzing Special-Order Decision [LO 7-2, 7-3]

Business

1 answer:

Andreas93 [3]3 years ago

6 0

Answer:

Because there is unused capacity, and the effect on income is positive, the offer should be accepted.

Explanation:

Giving the following information:

Lost Mine has offered to buy 2,900 of the US umbrellas for $27 each.

Production costs:

Direct materials $ 12.00

Direct labor 6.00

Variable manufacturing overhead 8.00

Because it is a special offer and there is unused capacity, we will not take into account the fixed costs.

Unitary production cost= $26

Net effect on income= 2,900*(27 - 26)

Net effect on income= $2,900 increase

Because there is unused capacity, and the effect on income is positive, the offer should be accepted.

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Credit Losses Based on Accounts Receivable At December 31, Schuler Company had a balance of $364,900 in its Accounts Receivable

timama [110]

Answer:

a. First calculate the adjusting entry to record allowance.

Uncollectible for the year is;

= (303,000 * 1%) + (42,000 * 5%) + (17,000 * 15%) + (8,000 * 40%)

= $10,880

Adjusting entry = Uncollectable amount - Credit balance on allowance

= 10,880 - 4,200

= $6,680

DR Bad Debt Expense $6,680

CR Allowance for Doubtful accounts $6,680

Current Assets:

Accounts Receivable $370,000

Less: Allowance for doubtful accounts ($10,880)

$359,120

Current Liabilities

Customers Overpayments $5,100

The current liability above arises from the credit balance of $5,100 in the Accounts receivable account. Accounts Receivable should have a debit balance so if a credit balance occurs it is an overpayment by a customer.

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3 years ago

Nikkei Bike Parts testified before Congress defending the company against an accusation that it was dumping parts on the U.S. ma

liubo4ka [24]

Answer: The correct answer is "Nikkei includes 10% overhead costs and an 8% profit margin in the price of all the parts they export to the U.S.".

Explanation: In her testimony, the president claimed Nikkei includes 10% overhead costs and an 8% profit margin in the price of all the parts they export to the U.S. Using traditional guidelines, Congress determined that Nikkei was not dumping.

It is known as dumping when companies sell products at a lower price abroad than they sell in their country.

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3 years ago

Riverbed Co. has a held-to-maturity investment in the bonds of Schuyler Corp. with a carrying value of $72,100. Riverbed determi

Novay_Z [31]

Answer:

Please find attached solution.

Explanation:

7 0

4 years ago

A corporate bond with a 6.5 percent coupon has 15 years left to maturity. It has had a credit rating of BBB and a yield to matur

Scrat [10]

Answer:

Price change in dollars = $104.22

% decrease in price of dollars = 11.13%

Explanation:

We assume the corporate bond have a face value of $1,000

Face Value = $1000

Coupon = 6.5%*1000/2 =32.50

Number of Periods = 15*2 =30

Semi annual rate of BBB bond = 7.2%/2 =3.6%

Price of BBB Bond = PV of Coupons + PV of Par Value =

Price of BBB Bond = 32.50*(((1-(1+3.6%)^-30)/3.6%)+1000/(1+3.6%)^30

Price of BBB Bond = $936.43

Semiannual Discount Rate for BB bond = 8.5%/2 = 4.25%

Price of BB Bond = PV of Coupons + PV of Par Value

Price of BB Bond = 32.50*(((1-(1+4.25%)^-30)/4.25%)+1000/(1+4.25%)^30

Price of BB Bond= $832.21

Price change in dollars = $936.43 - $832.21

Price change in dollars = $104.22

% decrease in price of dollars = $104.22 / $936.43

% decrease in price of dollars = 0.111295025

% decrease in price of dollars = 11.13%

6 0

4 years ago

If AD increases, which of the following will result? a. an increase in output and an increase in the price level.b. an increase

Bess [88]

Answer:

a. an increase in output and an increase in the price level.

Explanation:

If Aggregate Demand increases, this will result in an increase in output and an increase in the price because short run aggregate demand measures total output for a single nominal price level

In the long-run, increases in aggregate demand cause the price of a good or service to increase. When the demand increases the aggregate demand curve shifts to the right.

Also, increased demand for a product in the long run will lead to increased output being supplied.

The aggregate supply determines the extent to which the aggregate demand increases the output and prices of a good or service.

3 0

4 years ago