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Aneli [31]
2 years ago
14

A company just starting business made the following four inventory purchases in June:June 1 150 units $ 390 June 10 200 units 58

5 June 15 200 units 630 June 28 150 units 510 $2,115 A physical count of merchandise inventory on June 30 reveals that there are 250 units on hand. The inventory method which results in the highest gross profit for June is Select one: a.the weighted average unit cost method. b.the FIFO method. c.the LIFO method. d.not determinable.
Business
1 answer:
Andreas93 [3]2 years ago
4 0
Poooooooooooooooooop
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1. What is the revised net operating income if unit sales increase by 16%? 2. What is the revised net operating income if the se
weeeeeb [17]

Answer:

1) NOI = $90,240

2) NOI = 29,250

3) NOI = 133,260

4) NOI = 110,190

Explanation:

<em>The question is incomplete.</em>

<em />

<em>Sales (38,000 units)      $342,000     ($9.00 per unit)</em>

<em>Variable expenses        $228,000     ($6.00 per unit)</em>

<em>Contribution margin        $114,000     ($3.00 per unit)</em>

<em>Fixed expenses                $42,000 </em>

<em>Net operating income      $72,000</em>

1. What is the revised net operating income if unit sales increase by 16%

If unit sales increase, we can calculate this with a 16% increase in the contribution margin.

NOI=CM*(1+0.16)-FE=114,000*1.16-42,000=132,240-42,000\\\\NOI=90,240

2. What is the revised net operating income if the selling price decreases by $1.50 per unit and the number of units sold increases by 25%?

A reduction of $1.50 in price means a reduction of the same amount in the contribution margin per unit (CMu), as the variable expenses stay the same .

Also, the contribution margin increases by 25%, for the increase in units sold (q).

NOI=CM_u*q-FE=(3.00-1.50)*(38,000*1.25)-42,000\\\\NOI=1.5*47,500-42,000=71,250-42,000\\\\NOI=29,250

3. What is the revised net operating income if the selling price increases by $1.50 per unit, fixed expenses increase by $6,000, and the number of units sold decreases by 6%?

The selliing price will be added to the contribution margin per unit.

The units sold are increased 6%.

NOI=CMu*q-FE=(3.00+1.50)*38,000*1.06-(42,000+6,000)\\\\NOI=4.5*40,280-48,000=181,260-48,000\\\\NOI=133,260

4. What is the revised net operating income if the selling price per unit increases by 20%, variable expenses increase by 30 cents per unit, and the number of units sold decreases by 11%?

The contribution margin per unit, with a increase in price and an increase in variable cost, becomes:

CM_u=P-VE_u=9.00*(1.20)-(6.00+0.30)=10.80-6.30=4.50

The units sold is now:

q'=(1-0.11)q=0.89q=0.89*38,000=33,820

Then, the net operating income becomes:

NOI=CM_u*q-FE=4.5*33,820-42,000=152,190-42,000\\\\NOI=110,190

5 0
3 years ago
What is meant by trading on the equity? (b) how would you determine the profitability of trading on the equity? chegg.
aleksklad [387]

Answer:

Trading on equity defines the increase in profit earned by the equity shareholders due to presense to financial charges.

When a company is higher the rate of interest on borrowed funds.so company should option for trading on equity.

Explanation:

<em>h</em><em>o</em><em>p</em><em>e</em><em> </em><em>i</em><em>t</em><em> </em><em>h</em><em>e</em><em>l</em><em>p</em><em>s</em><em> </em><em>u</em><em /><em />

4 0
2 years ago
Talbot Riding Stables provides stables, care for animals, and grounds for riding and showing horses. The account balances at the
Goshia [24]

Answer:

See answers below in the explanation

Explanation:

Journal Entries :

Journals

<u>Date Account and Explanation Debit Credit </u>

a Accounts receivable             210300  

Service Revenue                                   210300

(Record earned revenue)  

   

Cash                                    62300  

Service Revenue*                                   62300

(Record earned revenue)  

   

   

b  cash                                     199100  

accounts receivable**                            199100

(Record collection Account)  

*$41000+$20500=$62300

**$4400+$210300-$$15600=$199100

   

   

c Supplies                                     62900  

Accounts Payable                                   62900

(record purchase of supplies on credit)  

   

d Supplies                                      7400  

 Cash                                                   7400

(record purchase of supplies  

   

e Wages Payable                     14200  

Cash                                                   14200

Record Payment of previous wages  

   

Wages Expenses                    112000  

Cash                                                    112000

(Record Payment to Employees)  

   

f Income Tax payable            15100  

cash                                                     15100

(Record Payment of Income taxes  

   

g Accounts Payable                      73000  

cash                                                      73000

(record payment of account)  

   

h Interest Expense                      2700  

Interest Payable                                             2700  

Cash***                                                      5400

(Record Payment of Interest)  

   

i No journal entry required  

   

j Property Taxes Expense     17000  

cash                                                       17000

(Record payment of property taxes)  

   

k Dividends                             7200  

Cash                                                       7200

(Record Payment of dividends)  

   

*** $60000*9%=$5400    

   

6 0
3 years ago
Over the next three years, Distant Groves will pay annual dividends of $.65, $.70, and $.75 a share, respectively. After that, d
olganol [36]

Answer:

The share is worth $5.68 today.

Explanation:

The current price of the stock can be calculated using the DDM or dividend discount model. The DDM values the stock based on the present value of the expected future dividends from the stock.

The following is the formula for the price of the stock today,

P0 = D1 / (1+r)  +  D2 / (1+r)^2  + ... +  Dn / (1+r)^n  +  Terminal value / (1+r)^n

The terminal value is the cumulative value of all the future dividends calculated when the dividend growth becomes zero or constant. In case the dividend growth becomes constant, like in this case, the terminal value is calculated as follows,

Terminal value = Dn * (1+g) / r - g

Where,

  • g is the Constant growth rate in dividends

So, the price of this stock today is,

P0 = 0.65 / (1+0.145)  +  0.70 / (1+0.145)^2  +  0.75 / (1+0.145)^3  +  

((0.75 * (1+0.02) / (0.145 - 0.02)) / (1+0.145)^3

P0 = $5.678 rounded off to $5.68

6 0
3 years ago
Prepare the company’s direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted eac
bekas [8.4K]

Answer:

Answer for the question:

Prepare the company’s direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced. (Round "Direct labor time per unit (hours)" and "Direct labor cost per hour" answers to 2 decimal places.)

is explained in the attachment.

Explanation:

Download pdf
7 0
3 years ago
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