Preferred dividends = preferred shares x Par value of 1 preferred stock x Preferred dividend rate
Preferred dividend = 6000 shares x 11% x $2 = $1320
Total dividend paid in year 1= $640
Preferred stockholders will receive a cash dividend of $640 in the first year. Because preferred stocks are not cumulative, there will be no preferred stock divided in arrears in year 1.
Arrear of dividends = $1320 - $640 = $680
Total dividend in year 2 = $2190
Dividend paid on common stock in year 2 = dividend paid in year 2 - Annual preferred dividends
=> 2190 - 1320 = $870
Answer:
The price of a U.S. postage stamp has increased approximately <u>63%</u> in terms of Indian rupees and <u>10%</u> in terms of Chinese yuan.
Explanation:
the exchange rate between the US dollar and the Indian rupee:
April 2011 = 45.54 Indian rupees per dollar x $0.41 = 18.67 Indian rupees
April 2016 = 66.16 Indian rupees per dollar x $0.46 = 30.43 Indian rupees
change in Indian rupees = (30.43 - 18.67) / 18.67 = 63%
the exchange rate between the US dollar and the Chinese yuan:
April 2011 = 6.61 Chinese yuan per dollar x $0.41 = 2.71 Chinese yuan
April 2016 = 6.48 Chinese yuan per dollar x $0.46 = 2.98 Chinese yuan
change in Chinese yuan = (2.98 - 2.71) / 2.71 = 10%
Answer:
cutting prices reduces gross margin that may be difficult to recover
Explanation:
This is the case because cutting prices reduces gross margin that may be difficult to recover. A company's gross margin is the sales revenue they retain after paying off all of the direct costs associated with producing the various goods it sells. This happens because customers get accustomed to the low prices and tend to hesitate and not buy the company's products when they are priced higher, thus making it very difficult to recover their previous gross margin.
Answer:
Overhead Rate based on:
Direct labor hours: $12.5 per labor hour
Direct labor expense: 50% of labor cost e.g. $0.5 for every dollar of labor cost
Machine hours: $7.5 per machine hour
Explanation:
Overhead rate is calculated by dividing the total estimated manufacturing overhead to the relevant activity base selected e.g. machine hours, labor hours, labor cost etc.
Overhead rates are calculated for different bases are as follows:
Direct labor hours: $750,000 / 60,000 = $12.5 per hour
Direct labor Expense: $750,000 / 1,500,00 = 50% ($0.5 for every dollar cost of direct labor)
Machine hours: $750,000 / 100,000 = $7.5 per machine hour.
Answer:
The correct option is A,both the selling and buying units have complete information about costs.
Explanation:
A negotiated transfer price is a price agreed between the selling and buying divisions having considered factors such the external purchase price,the opportunity costs of selling internally and externally ,whether or not there is surplus capacity and may more.
Negotiated transfer price is fairer to both divisions as opposed to a transfer price imposed by management which could result in low morale in the buying or selling division depending on whether the price was set too high or too low.
