Digital Solutions Inc. uses flexible budgets that are based on the following data:
Sales commissions 6% of sales
Advertising expense 14% of sales
Miscellaneous administrative expense $8,500 per month plus 5% of sales
Office salaries expense $54,000 per month
Customer support expenses $18,000 per month plus 32% of sales
Research and development expense $75,000 per month
Prepare a flexible selling and administrative expenses budget for October for sales volumes of $500,000, $750,000, and $1,000,000.

Answer:

Digital Solutions Inc.

Selling and Administrative Expenses Budget for October:

Sales volumes                   $500,000    $750,000     $1,000,000

Selling expenses:

Sales commissions 6%         $30,000       $45,000         $60,000

Advertising expense 14%       70,000        105,000          140,000

Customer support expenses:

Fixed                                        18,000          18,000             18,000

Variable 32% of sales          160,000       240,000          320,000

Total selling expenses      $278,000    $408,000        $538,000  

Administrative expenses:

Miscellaneous administrative expense:

Fixed                                         8,500           8,500              8,500

Variable 5% of sales             25,000         37,500            50,000

Office salaries expense       54,000         54,000            54,000

Research and

 development expense      75,000          75,000            75,000

Total administrative exp. $162,500      $175,000        $187,500

Total                                $440,500      $583,000       $725,500

Explanation:

a) Data and Calculations:

Sales commissions 6% of sales

Advertising expense 14% of sales

Miscellaneous administrative expense $8,500 per month plus 5% of sales

Office salaries expense $54,000 per month

Customer support expenses $18,000 per month plus 32% of sales

Research and development expense $75,000 per month

Sales volumes of $500,000, $750,000, and $1,000,000

Sales volumes                   $500,000    $750,000     $1,000,000

Selling and administrative expenses:

Sales commissions 6%       $30,000       $45,000         $60,000

Advertising expense 14%     70,000        105,000          140,000

Miscellaneous administrative expense:

Fixed                                       8,500           8,500              8,500

Variable 5% of sales           25,000         37,500            50,000

Office salaries expense     54,000         54,000            54,000

Customer support expenses:

Fixed                                    18,000          18,000             18,000

Variable 32% of sales      160,000       240,000          320,000

Research and

 development expense   75,000          75,000            75,000

Total                             $440,500      $583,000       $725,500

Gelb Company currently manufactures 47,000 units per year of a key component for its manufacturing process. Variable costs are $6.25 per unit, fixed costs related to making this component are $85,000 per year, and allocated fixed costs are $84,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.70 per unit. Calculate the total incremental cost of making 47,000 units and buying 47,000 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier

The net income reported on the income statement of Whispering Winds Corp. for the current year was $1251000. Depreciation recorded on plant assets was $236000. Accounts receivable and inventories increased by $66000 and $44000, respectively. Prepaid expenses and accounts payable decreased by $6000 and $61000, respectively. How much cash was provided by operating activities during the year

Walmart and Target are the only stores in a remote town that currently stock and sell the PlayStation 5 video game console. Managers at both stores are simultaneously deciding whether to charge a price of $1,000 or $1,500 for each console. If both stores charge $1,000, they earn a profit of $100,000 each. If both stores charge $1,500, they earn a profit of $200,000 each. If one store charges $1,000 and the other store charges $1,500, the store that charges $1,000 earns a profit of $250,000 and the firm that charges $1,500 earns a profit of $50,000. If Walmart and Target ________, they can both charge $1,500 and earn the highest combined profit available.

Exercise 17-09 a-b (Video) (Part Level Submission) Oriole, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 50 range instruments and 200 pressure gauges were produced, and overhead costs of $88,010 were estimated. An analysis of estimated overhead costs reveals the following activities. Activities Cost Drivers Total Cost 1. Materials handling Number of requisitions $37,080 2. Machine setups Number of setups 28,710 3. Quality inspections Number of inspections 22,220 $88,010 The cost driver volume for each product was as follows. Cost Drivers Instruments Gauges Total Number of requisitions 390 640 1,030 Number of setups 200 295 495 Number of inspections 240 265 505 Collapse question part (a) Determine the overhead rate for each activity

Penetration pricing doesn't work if ________.

Adamson Corporation is considering four average-risk projects with the following costs and rates of return:

Project Cost Expected Rate of Return
1 $2,000 16.00%
2 3,000 15.00
3 5,000 13.75
4 2,000 12.50

The company estimates that it can issue debt at a rate of rd = 10%, and its tax rate is 30%. It can issue preferred stock that pays a constant dividend of $5 per year at $48 per share. Also, its common stock currently sells for $33 per share; the next expected dividend, D1, is $4.00; and the dividend is expected to grow at a constant rate of 5% per year. The target capital structure consists of 75% common stock, 15% debt, and 10% preferred stock.

Required:
a. What is the cost of each of the capital components?
b. What is Adamson's WACC?

Teal Mountain Inc. issues $5.0 million, 10-year, 8% bonds at 101, with interest payable on January 1. The straight-line method is used to amortize bond premium. (a)Prepare the journal entry to record interest expense and bond premium amortization on December 31, 2022, assuming no previous accrual of interest. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Task 1 . The income (in thousand $) of 5 small companies labeled AA , BB , CC , DD , EE has been calculated and the results are as follo,;vs:

2.49j 2.39j 2.39, 1.79, 3.8 .
1. Put the obtained data as points on the following coordinate system.


Income value


3

2

1


AA BB CC DD EE Company

2. Calculate the mean value from the sample for these data:


On the chart draw a line y = x (a horizontal line at the level of the mean of the sample) and for every measurement mark the difference between the value of the measurement and the sample mean.
3. Calculate the samples variance, standard deviation and the estimator of variance:

Icr2 =_.!_ f=_(xi -

I• I

__ n i=l

x_) _= iT





4. Write proper values into the following tagged fields and interpret the results obtained:

CJ CJ
x - 20- x - a x+ a x+ 20-

Date of simulation : 2021 03 02 20:30:20.050 Seed: 20302 8071 .




8

XYZ Office Supplies is about to introduce a new customer service program that will affect all its 355 sales and service employees. Job duties will be changed, and the employee rewards system will be altered to fit this new customer focus. Moreover, the company wants to improve the efficiency of work processes, thereby removing some of the comfortable (and often leisurely) routines that employees have followed over the years. Top management is concerned about the different types of forces resisting change that the company will potentially experience during this change process. The employees at XYZ discreetly weaken the new customer service program to prove that the decision is wrong and that the new program is not effective. Which of the following reasons to resist change is depicted in this scenario?
a. induce organizational learning.
b. negotiate with the employees.
c. use the stress management technique.
d. create an urgency for change.

George is responsible for examining the heating and air conditioning system of an upcoming hotel. So, George is a mechanical____

The Northern Ring Company manufactures 2,000 telephones per year. The full manufacturing costs per telephone are as follows: Direct materials $ 2 Direct labor 8 Variable manufacturing overhead 6 Average fixed manufacturing overhead 6 Total $22 The Texas Ring Company has offered to sell Northern Ring Company 2,000 telephones for $15 per unit. If Northern Ring Company accepts the offer, $10,000 of fixed overhead will be eliminated. Northern Ring should: Select one: A. Buy the telephones; the savings is $12,000 B. Make the telephones; the savings is $2,000 C. Buy the telephones; the savings is $24,000 D. Make the telephones; the savings is $12,000

A company acquired a copyright that now has a remaining legal life of 30 years. In the hands of the previous owner, the copyright had a 38-year useful life assigned to it. An analysis of market trends and consumer habits indicated that the copyrighted material will generate positive cash flows for approximately 25 years. What is the remaining useful life, if any, over which the company can amortize the copyright for accounting purposes

The objectives of labor unions frequently shift with social and economic trends. In the 1970s, the primary objective was additional pay and benefits for members. In the 1980s, job security and union recognition were uppermost. In the 1990s and into the 2000s, unions again focused on job security due to the growth of global competition and outsourcing. Organized labor has also strongly opposed the increase in offshore outsourcing, claiming this practice will cost U.S. jobs. Labor unions generally insist that a contract contain a union security clause stipulating that employees who reap union benefits either officially join or at least pay dues to the union. Edward was recently transferred to a location in a new state. He was surprised that he was not required to be in the union in the new state, but he was in the old state. He later learned that the new state passed a provision giving him the choice.

a. Open shop agreement
b. Union shop agreement
c. Agency shop agreement & Right-to-work law

. Bartholomew Corp's master budget calls for the production of 6,000 units of products monthly. The master budget includes indirect labor of $396,000 annually; Bartholomew considers indirect labor to be a variable cost. During the month of September, 5,600 units of product were produced, and indirect labor costs of $30,970 were incurred. A performance report utilizing flexible budgeting would report a flexible budget variance for indirect labor of:

Cedric Company recently traded in an older model computer for a new model. The old model's book value was $140,000 (original cost of $370,000 less $230,000 in accumulated depreciation) and its fair value was $210,000. Cedric paid $65,000 to complete the exchange, which has commercial substance.
Calculate the following values:
1. Amount to debit for new equipment
2. Amount to debit accumulated depreciation
3. Amount to credit to cash
4. Amount to credit for old equipment
5. Gain or loss on sale

n 1982 the inflation rate hit 16%. Suppose that the average cost of a textbook in 1982 was $25. What was the expected cost in the year 2017 if we project this rate of inflation on the cost? (Assume continuous compounding. Round your answer to the nearest cent.) If the average cost of a textbook in 2012 was $150, what is the actual inflation rate (rounded to the nearest tenth percent)?

g Comfi Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic analysis of its operations. Both planes seat 10 passengers each, and they fly commuters from Comfi’s base airport to the major city in the state, Metropolis. Each month, 40 round-trip flights are made. Shown below is a recent month’s activity in the form of a cost-volume-profit income statement. Fare revenues (400 passenger flights) $48,000 Variable costs Fuel $16,960 Snacks and drinks 720 Landing fees 2,100 Supplies and forms 1,100 20,880 Contribution margin 27,120 Fixed costs Depreciation 3,100 Salaries 11,600 Advertising 600 Airport hanger fees 1,650 16,950 Net income $10,170 Calculate the break-even point in dollars. Break-even point $Type your answer here eTextbook and MediaAssistance Used Calculate the break-even point in number of passenger flights. Break-even point Type your answer here flights eTextbook and MediaAssistance Used Without calculations, determine the contribution margin at the break-even point. Break-even point $Type your answer here eTextbook and MediaAssistance Used If ticket prices were decreased by 10%, passenger flights would increase by 25%. However, total variable costs would increase by the same percentage as passenger flights. (1) How much would net income be impacted by this change? Net income to $ (2) Should the ticket price decrease be adopted?

The cash account for American Medical Co. at April 30 indicated a balance of $334,985. The bank statement indicated a balance of $388,600 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items: A.Checks outstanding totaled $61,280. B.A deposit of $42,500, representing receipts of April 30, had been made too late to appear on the bank statement.

A major equipment purchase is being considered Metro Atlanta. The initial cost is determined to be $1,000,000. It is estimated that this new equipment will save $100,000 the first year and increase gradually by $50,000 for the next 6 years. MARR= 10%.
A) The payback period for this equipment purchase is______
B) The B/C ratio for this investment is ________
C) The NFW of this investment is ________

Elaine needs $1,500 to buy textbooks and other school supplies. Kramer agrees to loan Elaine $1,500, accepting as collateral Elaine’s car. They put their agreement in writing and sign it. Elaine keeps possession of the car. What are the requirements for Kramer to have an enforceable security interest in the car? What must Kramer do to let other creditors know of his security interest in the car?

Danner Company expects to have a cash balance of $52,965 on January 1, 2017. Relevant monthly budget data for the first 2 months of 2017 are as follows. Collections from customers: January $100,045, February $176,550. Payments for direct materials: January $58,850, February $88,275. Direct labor: January $35,310, February $52,965. Wages are paid in the month they are incurred. Manufacturing overhead: January $24,717, February $29,425. These costs include depreciation of $1,765 per month. All other overhead costs are paid as incurred. Selling and administrative expenses: January $17,655, February $23,540. These costs are exclusive of depreciation. They are paid as incurred. Sales of marketable securities in January are expected to realize $14,124 in cash. Danner Company has a line of credit at a local bank that enables it to borrow up to $29,425. The company wants to maintain a minimum monthly cash balance of $23,540.
Prepare a cash budget for January and February.

Exercise 23-2 Make or buy LO P1 Gelb Company currently manufactures 43,000 units per year of a key component for its manufacturing process. Variable costs are $5.15 per unit, fixed costs related to making this component are $73,000 per year, and allocated fixed costs are $78,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.70 per unit. Calculate the total incremental cost of making 43,000 units and buying 43,000 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier

Communication starts with
​

The stockholders’ equity section of Velcro World is presented here.
VELCRO WORLD
Balance Sheet (partial)
($ and shares in thousands)
Stockholders' equity:
Preferred stock, $1 par value $ 5,800
Common stock, $1 par value 28,000
Additional paid-in capital 1,028,600
Total paid-in capital 1,062,400
Retained earnings 286,000
Treasury stock, 12,000
Common shares (360,000)
Total stockholders' equity $ 988,400
Based on the stockholders' equity section of Velcro World, answer the following questions. Remember that all amounts are presented in thousands.
1. How many shares of preferred stock have been issued? (Enter you answer in total number of shares, not in thousands.)
2. How many shares of common stock have been issued? (Enter you answer in total number of shares, not in thousands.)
3. If the common shares were issued at $30 per share, at what average price per share were the preferred shares issued?
4. If retained earnings at the beginning of the period was $250 million and $30 million was paid in dividends during the year, what was the net income for the year? (Enter your answer in million (i.e., 5,000,000 should be entered as 5).)
5. What was the average cost per share of the treasury stock acquired?

The following income statements are provided for Li Company's last two years of operation: Year 1 Year 2 Number of units produced and sold 4,500 4,100 Sales revenue $ 69,750 $ 63,550 Cost of goods sold 41,700 38,000 Gross margin 28,050 25,550 General, selling, and administrative expenses 17,500 16,300 Net income $ 10,550 $ 9,250 Assuming that cost behavior did not change over the two-year period, what is Li Company's contribution margin in Year 2?

Sparkle Metallurgy, Inc. has two service departments (Human Resources and Building Maintenance) and two production departments (Machining and Assembly). The company allocates Building Maintenance cost on the basis of square footage and Human Resources cost on the basis of employees. It believes that Building Maintenance provides more service than Human Resources. The square footage and employees in each department follow. Square Footage Employees Human Resources 4,000 10 Building Maintenance 10,000 15 Machining 15,000 40 Assembly 21,000 60 Assuming use of the step-down method, which of the following choices correctly denotes the number of square feet and employees over which the Building Maintenance cost and Human Resources cost would be allocated (i.e., spread)?
a. 19,000.
b. 44,000.
c. 50,000.
d. 63,000.

The Laramie Factory produces expensive boots. It has two departments, tanning and finishing departments, that process all the items. During January, the beginning work in process in the tanning department was 40% complete as to conversion and 100% complete as to direct materials. The beginning inventory included $6,000 for materials and $18,000 for conversion costs. Ending work-in-process inventory in the tanning department was 40% complete. Direct materials are added at the beginning of the process. Beginning work in process in the finishing department was 60% complete as to conversion. Beginning inventories included $7,000 for transferred-in costs and $11,000 for conversion costs. Ending inventory was 30% complete. Additional information about the two departments follows: Tanning Finishing Beginning work-in-process units 5,000 4,000 Units started this period 14,000 Units transferred out this period 16,000 18,000 Ending work-in-process units 2,000 Material costs added $18,000 Conversion costs $32,000 $18,630 Transferred-out cost $50,400 Required: Complete the production cost worksheet below using FIFO costing for the finishing department.

Is gender pay gap logical ? If so, kindly explain.
Thanks.

LJM Corporation includes two divisions, Shay Division and Patty Division. The Shay Division makes specialized filters, including one that could be used by the Patty Division. Costs for the filter are variable costs, $16; fixed costs, $20. Shay Division has capacity to make 20,000 of the filters, and it is operating at capacity. It sells the filters to other companies for $52 each. The Patty Division needs 8,000 filters per year, and it has been purchasing them from another company for $45 each. Required: 1) If a transfer were to occur between Shay Division and Patty Division, what is the maximum that Patty Division should be willing to pay for the filters? 2) If a transfer were to occur between Shay Division and Patty Division, what is the minimum price that Shay Division should be willing to accept?

Modified Accelerated Cost Recovery System (MACRS) (LO 7.4) Mike purchases a new heavy-duty truck (5-year class recovery property) for his delivery service on April 30, 2017. No other assets were purchased during the year. The truck is not considered a passenger automobile for purposes of the listed property and luxury automobile limitations. The truck has a depreciable basis of $39,000 and an estimated useful life of 5 years. Assume half-year convention for tax. .
a. Calculate the amount of depreciation for 2017 using financial accounting straight-line depreciation (not the straight-line MACRS election) over the truck's estimated useful life.
b. Calculate the amount of depreciation for 2017 using the straight-line depreciation election, using MACRS tables over the minimum number of years with no bonus depreciation or election to expense
c.Calculate the amount of depreciation for 2017, including bonus depreciation but no election to expense, that Mike could deduct using the MACRS tables
d. Assume no income limit on the expense election. Calculate the amount of depreciation for 2017 including bonus depreciation and the election to expense that Mike can deduct.