Answer:
Dotterel Corporation
The markup percentage for the sale of the company's product is:
= 45.71%.
Explanation:
a) Data and Calculations:
Production and sales units = 35,000
Desired rate of return = 11.2%
Invested assets = $350,000
Desired profit = $39,200 ($350,000 * 11.2%)
Fixed factory overhead cost = $105,000
Fixed selling and administrative costs = $35,000
Total fixed costs = $140,000 ($105,000 + $35,000)
Variable direct materials cost per unit $4.34
Variable direct labor cost per unit 5.18
Variable factory overhead cost per unit 0.98
Variable selling and administrative cost per unit 0.70
Total variable costs per unit $11.20
Total variable costs = $392,000 ($11.20 * 35,000)
Contribution margin:
Fixed costs = $140,000
Desired profits 39,200
Total = $179,200
Markup = 45.71% ($179,200/$392,000 * 100)
Sales revenue = $571,000
Selling price per unit = $16.31
Demonstrate the principles of health care finance for revenue management through the intended application of cost reporting and variances.
Solution :
Integration of all the processes:
Some integrated software system should be adopted where all the details about each patient along with the every billing and the payment details would help in keeping the track of the revenue.
Claims and billing management :
All the claims happened through some of the individuals or the company policies or the billing processes that take place to be accounted for the EHR system that can reduce the delays and also improve the effectiveness of the revenue management.
Documentation:
All the transactions should be documented, so there there are less chances for any error to occur.
Alfredo was one of many employees who received a generous Christmas bonus, which carried __________ value to him.
Answer:
Surface.
Explanation:
An employee can be defined as an individual who is employed by an employer of labor to perform specific tasks, duties or functions in an organization.
Basically, an employee is saddled with the responsibility of providing specific services to the organization or company where he is currently employed while being paid a certain amount of money hourly, daily, weekly, or monthly depending on the contractual agreement between the two parties (employer and employee).
Hence, while an employer may be the owner of a business firm or company, an employee is a subordinate employed to provide unwavering services to the employer while also, being professional and diligent at all times.
In this scenario, Alfredo was one of many employees who received a generous Christmas bonus, which carried surface value to him because it's an amount of money that was received by all.
What are the four types of organization structures
Answer:
1. Functional
2. Divisional
3. Matrix
4. Flat
Explanation:
Have a nice day :)
Answer:
Four main organizational structure types are:
I. Functional
II. Divisional
III. Matrix
IV. Flat
Explanation:
I. Functional Structure:
Employees performing similar or similar tasks are grouped together in this structure. For example, the financial department consists of accountants, and the same is true in the departments of marketing, operations, and human resources. This structure makes quick decision-making possible because the members of the group have the same skills and interests to communicate easily and can improve their capacities by learning from each other.
II. Divisional Structure
This structure groups employee's by-products or projects that satisfy the requirements of a certain customer type. For example, a catering service restaurant could structure the staff in different departments, such as a wedding service or a department of wholesale retail services. Workers are divided in order to achieve maximum efficiency.
III Matrix Structure:
A matrix structure has a complex story structure since it combines both functional and divisional elements. It first divides employees by specialization, then divides them into departments by project and product. A lot of planning and effort is needed to make this structure but one e has increased the team's productivity, encourages innovation and creativity, and good decision-making.
IV Flat Structure:
The traditional top-down management system is prevented by a flat organizational structure. No concept of boss is in place, every employee is their own boss, eliminating bureaucracy and enhancing direct communication. An employee with an innovative idea or proposal, for example, does not contact every level of senior management in order for the manager to get the idea. The staff can communicate with each other directly at a peer level.
what role does planning play in public sector
Hello there! The answer is below.
Explanation:
Planning plays a very big role in the public sector. Planning lets you measure how big your response has to be to something, especially in business. It lets use utilize your resources and make as much as you need. When you plan in the public sector of marketing, you can also plan what to sell and align your priorities.
Answer:
Since the public sector is usually in charge of creating and directing defense, it also usually retains power over how troops are paid, training mechanisms, and rules of combat. Foreign policy is another area in which it is important to present a unified front through the public sector, in order to prevent conflicting treaties and agreements.
Explanation:
Before starting up a team to handle a big contract with a new client, the team leader identified the most important skills and expertise that the team would need, and then staffed the team with this expertise. This meant putting employees from production, marketing, finance, and sales on the team. You want to find a way to reduce the waste your company generates so you create this type of team. This type of team is particularly difficult to implement because it requires specific self-management and team skills that many employees lack.
Answer: a. Cross functional team
b. Problem solving team
c. Self directed team
Explanation:
a. Cross-functional team refers to the group of people that has different functional expertise whom work tomorrow together towards a common goal. It basically includes all the employees in an organization.
b. Problem Solving Teams are the team that's formed in an organization in order to solve a particular problem. Since the company wants to find a way to reduce the waste that's generated, this team was formed
c. Self-directed work team is a team that's made up of people who combine their skills, experiences and talents together and work without being supervised in order to achieve a common goal. This type of team is particularly difficult to implement because it requires specific self-management and team skills that many employees lack.
April 30 May 31
Inventories
Raw materials $37,000 $42,000
Work in process 9,800 18,600
Finished goods 58,000 34,900
Activities and information for May
Raw materials purchases (paid with cash) 189,000
Factory payroll (paid with cash) 150,000
Factory overhead
Indirect materials 7,000
Indirect labor 34,500
Other overhead costs 101,000
Sales (received in cash) 1,200,000
Pre-determined overhead rate based on direct labor cost 55%
Compute the following amounts for the month of May using T-accounts
1. Cost of direct materials used.
2. Cost of direct labor used.
3. Cost of goods manufactured.
4. Cost of goods sold.
5. Gross profit.
6. Overapplied or underapplied overhead.
Answer:
1. Cost of direct materials used
= $177,000
2. Cost of direct labor used
= $150,000
3. Cost of goods manufactured
= $400,700
4. Cost of goods sold
= $423,800
5. Gross profit
= $776,200
6. Overapplied or underapplied overhead
= $60,000 Underapplied
Explanation:
a) Data and Calculations:
Inventories
Raw materials $37,000 $42,000
Work in process 9,800 18,600
Finished goods 58,000 34,900
Activities and information for May
Raw materials purchases (paid with cash) 189,000
Factory payroll (paid with cash) 150,000
Factory overhead
Indirect materials 7,000
Indirect labor 34,500
Other overhead costs 101,000
Sales (received in cash) 1,200,000
Predetermined overhead rate based on direct labor cost = 55%
T-accounts:
Raw materials
Account Titles Debit Credit
Beginning balance $37,000
Cash 189,000
Factory overhead $7,000
Work in process 177,000
Ending balance $42,000
Totals $226,000 $226,000
Work in process
Account Titles Debit Credit
Beginning balance $9,800
Direct materials 177,000
Direct labor 150,000
Applied overhead 82,500
Finished goods $400,700
Ending balance $18,600
Totals $419,300 $419,300
Finished goods
Account Titles Debit Credit
Beginning balance $58,000
Work in process 400,700
Cost of goods sold $423,800
Ending balance $34,900
Totals $458,700 $458,700
Factory overhead
Account Titles Debit Credit
Indirect materials $7,000
Indirect labor 34,500
Other costs 101,000
Work in process $82,500 (55% of direct labor)
Under-applied overhead 60,000
Total $142,500 $142,500
Sales (received in cash) 1,200,000
Cost of goods sold 423,800
Gross profit = 776,200
Job 148 requires $12,000 of direct materials, $6,700 of direct labor, 550 direct labor hours, and 270 machine hours. It also requires 9 hours of inspection at $40 per hour. Manufacturing overhead is computed at $28 per direct labor hour used and $42 per machine hour used. The total amount of overhead allocated is: a. $34,100. b. $26,740. c. $45,440. d. $15,400.
Answer:
b. $26,740
Explanation:
The computation of the total amount of overhead allocated is shown below:
overhead allocated is
= (actual direct labor hour × overhead rate per direct labor hour) + (Actual machine hour × overhead rate per machine hour)
= (550 × 28) + (270 × 42]
= $15,400 + $11,340
= $26,740
hence, the total amount of overhead allocated is $26,740
On the income statement of a merchandising company, interest income and interest expense are reported: Select one: A. As part of cost of goods sold B. By offsetting interest income and interest expense and showing the excess as an operating revenue or expense C. By showing interest income as additional sales revenue and interest expense as an operating expense D. As separate items of other income and expense below the net operating income or loss
Answer:
On the income statement of a merchandising company, interest income and interest expense are reported:
D. As separate items of other income and expense below the net operating income or loss.
Explanation:
Interest income and expense are financing activities items. They do not form part of the operating income or loss. This is why they are shown separately after the determination of the net operating income or loss but before the deduction of income taxes. The reason for this separation is that for a merchandising company, its operating income or loss does not include earned interest income or interest expense but costs related to the merchandise sold, including selling and administrative expenses.
An example of a positive statement would be
Answer:
D
Explanation:
it would be the last option
Which economic concept helps explain the changing demand for jewelry?
A. fungibility
b. non-excludability
c. substitution
d. elasticity
Answer:
A.fungibility is a economic concept which helps explain the changing demand for jewelry.
As
Fungibility is the ability of a good or asset to be interchanged with other individual goods or assets .
Operating Cash Flows (Direct Method)
Refer to the information in Exercise EB-31. Calculate the net cash flow from operating activities using the direct method. Show a related cash flow for each revenue and expense.
Answer:
The method to calculate Cash Flow from Direct Method is explained as follows:
Explanation:
The method to calculate Cash Flow from Direct Method is explained as follows:
Cash Flows
Direct Method
+ Cash received from Customer
- Cash paid to suppliers
- Cash payments for operating expenses
- Cash payments for interest
- Cash payments for taxes
= Net Cash flow from Operating Activities.
Tech Solutions is a consulting firm that uses a job-order costing system. Its direct materials consist of hardware and software that it purchases and installs on behalf of its clients. The firm’s direct labor includes salaries of consultants that work at the client’s job site, and its overhead consists of costs such as depreciation, utilities, and insurance related to the office headquarters as well as the office supplies that are consumed serving clients. Tech Solutions computes its predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 55,000 direct labor-hours would be required for the period’s estimated level of client service. The company also estimated $302,500 of fixed overhead cost for the coming period and variable overhead of $0.50 per direct labor-hour. The firm’s actual overhead cost for the year was $321,300 and its actual total direct labor was 58,850 hours. Required: 1. Compute the predetermined overhead rate. 2. During the year, Tech Solutions started and completed the Xavier Company engagement. The following information was available with respect to this job: Direct materials $ 50,850 Direct labor cost $ 27,300 Direct labor hours worked 220 Compute the total job cost for the Xavier Company engagement.
Answer:
Tech Solutions
1. The predetermined overhead rate is:
= $6
2. The total job cost for the Xavier Company engagement is:
= $79,470
Explanation:
a) Data and Calculations:
Estimated direct labor-hours for the year = 55,000
Estimated fixed overhead cost = $302,500
Estimated variable overhead cost ($0.50 per DLH) = $27,500
Total overhead costs = $330,000 ($27,500 + $302,500)
Actual overhead cost for the year = $321,300
Actual total direct labor-hours = 58,850
Predetermined overhead rate = $6 ($330,000/55,000)
Xavier Company's Job:
Direct materials $ 50,850
Direct labor cost $ 27,300
Direct labor hours worked 220
Applied overhead = $1,320 ($6 * 220)
Total job cost = $79,470
= Variable overhead rate + fixed overhead rate
= $0.50 + ($302,500 ÷ 55,000 direct labor hours)
= $0.50 + $5.50
= $6.00
2. The total cost should be
= Direct material cost + direct labor cost + overhead cost
= $50,850 + $27,300 + ($6 × 220)
= $50,850 + $27,300 + $1,320
= $79,470
Therefore we can conclude that
The predetermined overhead rate is $6.00.The total job cost is $79,470.Learn more about the total cost here: brainly.com/question/13910351
Travis Company purchased merchandise on account from a supplier for $11,100, terms 2/10, net 30 on December 26. Travis Company paid for the merchandise on December 31, within the discount period.
Required:
Under a perpetual inventory system, record the journal entries required for the above transactions. Refer to the Chart of Accounts for exact wording of account titles.
Record the journal entries on each transaction. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 1
JOURNAL
DATE DESCRIPTION POST. REF. DEBIT CREDIT
1
2
3
4
Answer and Explanation:
The journal entries are shown below:
On Dec 26
Inventory $11,100
To Accounts payable $11,100
(Being the purchase merchandise on account is recorded)
On Dec 31
Account payable $11,100
To Discount on account payable (2% of $11,100) $222
To Cash $10,878
(being the cash paid is recorded)
These two entries should be recorded
The Zeron Corporation wants to purchase a new machine for its factory operations at a cost of $950,000. The investment is expected to generate $350,000 in annual cash flows for a period of four years. The cost of capital is 14%. The old machine can be sold for $50,000. The machine is expected to have zero value at the end of the four-year period. Income taxes are not considered. What is the net present value of the investment
Answer:
$119,799.31
Explanation:
The net present value of purchasing the new machine is the present value of its future cash flows discounted at the 14% cost of capital minus the initial investment outlay.
The initial investment outlay is the cost of the new machine minus the salvage value of the old machine, since the proceeds received from disposing of the old machine can be used in funding the new machine partly.
Initial investment outlay=$950,000-$50,000
Initial investment outlay=$900,000
NPV=$350,000/(1+14%)^1+$350,000/(1+14%)^2+$350,000/(1+14%)^3+$350,000/(1+14%)^4-$900,000
NPV=$119,799.31
please help me this question answer:
In 2016, David Hay started his own business, Hays Gardening and Landscapes. David was previously an employer of another business/
a) What was the opportunity costs for David when he started his business?
A. Cost of marketing to attract customers.
B. Loss of earnings from employment
C. Payment of taxes on profits
D. Risk of business failure
ANSWER:
b) Explain why this answer is correct?
Answer: B. Loss of earnings from employment
Explanation:
Opportunity cost refers to the loss of other alternatives when another alternative is being chosen. It is the potential benefit that an individual, firm or government misses out on when a different alternative is being selected.
Based on the question given, the opportunity costs for David when he started his business will be the earnings that he got from his previous employment such as the wages or the salaries, bonuses etc. Since he has began his own business, he can't enjoy those benefits anymore.
PillPack is an example of a startup organization that grew out of the identification of a problem that needed a solution.
a. True
b. False
Answer:
True
Explanation:
On May 1, 2020, Ayayai Company issued 2,400 $1,000 bonds at 102. Each bond was issued with one detachable stock warrant. Shortly after issuance, the bonds were selling at 99, but the fair value of the warrants cannot be determined.
Instuctions
a. Prepare the entry to record the issuance of the bonds and warrants
b. Assune the same facts as part (a), except that the warrants had a fair value of $30. Prepare the entry to record the issuance of the bonds and warrants.
Answer:
A. Dr Cash $2,448,000
Dr Discount on bond payable $24,000
Cr Bond payable $2,400,000
Cr Paid in capital stock warrants $72,000
B. May 1
Dr Cash $2,448,000
Dr Discount on bonds payable $24,713
Cr Bonds payable $2,400,000
Cr Paid in capital stock warrants $72,713
Explanation:
a. Preparation of the entry to record the issuance of the bonds and warrants
May 1
Dr Cash $2,448,000
Dr Discount on bond payable $24,000
Cr Bond payable $2,400,000
Cr Paid in capital stock warrants $72,000
(To record the issuance of the bonds and warrants )
Workings:
Cash = (2,400 * 1,000) * 102%
Cash = 2,400,000 * 1.02
Cash = $2,448,000
Discount on bond payable = (2,400 * 1,000) * (1 - 99%)
Discount on bond payable = 2,400,000 * 0.01
Discount on bond payable = $24,000
Bond payable = 2,400 * 1,000
Bond payable = $2,400,000
Paid in capital stock warrants = 2,448,000 + 24,000 - 2,400,000
Paid in capital stock warrants = $72,000
b.Preparation of the entry to record the issuance of the bonds and warrants Assume the same facts as part (a), except that the warrants had a fair value of $30.
May 1
Dr Cash $2,448,000
Dr Discount on bonds payable $24,713
Cr Bonds payable $2,400,000
Cr Paid in capital stock warrants $72,713
(To record the issuance of the bonds and warrants )
Workings:
Fair value of bonds = (2,400 * 1,000) * 98%
Fair value of bonds = 2,400,000 * 0.98
Fair value of bonds = $2,352,000
Fair value of warrants = 2,400 * 30
Fair value of warrants = $72,000
Fair value = $2,352,000 + 72,000
Fair value = $2,424,000
Allocated to bonds=$2,352,000/$2,424,000*$2,448,000
Allocated to bonds=$2,375,287
Allocated to warrants=$72,000/$2,424,000*$2,448,000
Allocated to warrants=$72,713
Cash = 2,400 * 1,000 * 102%
Cash = 2,400,000 * 1.02
Cash = $2,448,000
Discount on bonds payable = 2,400,000 - $2,375,287
Discount on bonds payable = $24,713
Risk assessment is a process A. That assesses the quality of internal control throughout the year. B. That establishes policies and procedures to accomplish internal control objectives. C. Designed to identify potential events that may affect the entity. D. Of identifying and capturing information in a timely fashion.
Answer:
C. Designed to identify potential events that may affect the entity.
Explanation:
Risk assessment means the total method in which the hazard or the factors related to the risk that result in damage or harm something. It could be analyzed and evaluated with the analysis of the risk and the evaluation of the risk.
It is to be designed in order to identify the events that could impact the entity
Therefore the option c is correct
I need help with 1.5 ,1.6 and 1.7 please
Answer:
1.5.1 Business venture/Venture capital
1.5.2 a) Risk: High risk for the investor(s), if research is not properly done
b) period of investment: Inexperienced
business owners that make wrong
business decisions may experience
big losses/closing down of an existing
business.
1.6.1 unit trusts
1.6.2 - share price may fluctuate
- unit trusts are not allowed to borrow,
therefore reducing potential returns.
- not good for people who want to invest for
a short period
- not good for people who want to avoid
risks at all costs
1.5.1 Stocks, also known as shares or equities, is the best type of investment opportunity i would choose in future.
It is most well-known and simple type of investment. When you buy stock, you’re buying an ownership stake in a publicly traded company.
Benefit of investment in stocks:
A. Dividend it the profit that i will get on shares
B. When I will buy a stock, there will be a hope that the price will go up so I can then sell it for a profit.
1.5.2 (a) The risk is that the price of the stock could go down, in which case I’d lose money.
1.5.2 (b) Shares in a company can be kept as long as I wish.
1.6.1 The investment chosen by Pearl is the investment in shares (joint stock exchange)
1.6.2 Disadvantages are dividend uncertainty, high risk, fluctuation in market price, limited control, residual claim etc.
*I hope it is helpful
Which of the following institutional investors most likely must spend a target percentage of the portfolio annually?
A. Endowments.
B. Life insurance firms.
C. Property and casualty insurance firms.
Answer: Endowments
Explanation:
The institutional investors that most likely must spend a target percentage of the portfolio annually is the endowments.
Endowment fund refers to the long term fund that is used for perpetual operations and usually set up by colleges or in hospitals
The fund then covers the expenses relating to provision of services for the students. A portion of the endowment is allowed to be use for every fiscal year.
Mary wants to get a more complete picture of her productivity, so she has collected the following information. In addition, she would like to get her answer in $/$, so she has included the piece price. All values are given per hour except for the piece price which is ________$/unit.
Output: 15
Piece price: $83/unit
Labor cost: $45
Capital cost: $100
Overhead: $46
Answer:
6.5183 or 6.52
Explanation:
The calculation is given below:
We know that
Productivity = Total output ÷ Total input
Given that
Total wage paid = 45
Total cost of material = 100
Overhead cost = 46
Now
Total output produced = 1245 (15 units × $83 per unit)
So,
Productivity = 1245 ÷ (45 + 100 + 46 )
= 6.5183 or 6.52
During the current year, assets increased from $11,000 to $19,000, and liabilities decreased from $9,000 to $7,500. If no additional capital contributions were made during the year, dividends totaled $4,000, and expenses totaled $21,000, determine total revenues for the year
Answer:
$34,500
Explanation:
Calculation to determine total revenues for the year
Using this formula
Total revenues=Increase in Assets+Decreased in liabilities+Dividends+Expenses
Let plug in the formula
Total revenues=($11,000-$19,000)+($9,000-$7,500)+$4,000+$21,000
Total revenues=$8,000+$1,500+$4,000+$21,000
Total revenues=$34,500
Therefore total revenues for the year is $34,500
Stocks are a risky investment. Treasury Bills are a highly liquid and risk free investment whose interest income is not subject to state income taxes. Stocks have significantly outperformed Treasury Bills over the long term. In light of these higher returns, which best explains why an individual would invest in Treasury Bills vs. stocks
Answer: c. Preference for a very low risk investment would result in an individual choosing Treasury Bills over stocks despite lower expected returns.
Explanation:
Treasury bills offer little to no risk and would be perfect for people who do not want risky investments and are willing to receive a lower return in exchange for that lack of risk.
There are many reasons people would do this such as age where for instance, older people who are retired would prefer a steady source of income that they know is risk free as opposed to risky assets like stocks that could fail at any time.
I think home ownership is important to most Americans today because they want to have the pride of owning their own home and they want to change it up to make it their own
Answer:
owww
Explanation:
If the inflation rate is equal to the nominal interest rate, the real interest rate is?
negative.
zero.
either positive or zero.
positive.
Answer: zero
Explanation:
It should be noted that real interest rate is the equal to the nominal interest rate after the inflation rate has been deducted.
Real Interest rate = Nominal rate - Inflation rate
For example let's say the nominal Interest rate and the inflation rate are both 5%, then the real interest rate will be:
Real Interest rate = Nominal rate - Inflation rate
Real interest rate = 5% - 5% = 0
A bank reconciliation reconciles the bank statement with the company's Multiple choice question. net cash flow in the statement of cash flows. net income in the income statement. cash account in the balance sheet. cash from operating activities.
Answer: cash account in the balance sheet.
Explanation:
A bank reconciliation reconciles the bank statement with the company's cash account in the balance sheet. Option C is the correct answer.
A bank reconciliation is a process that compares the company's cash records, specifically the cash account in the balance sheet, with the bank statement. It is performed to ensure that the company's recorded cash transactions match the bank's recorded transactions. Option C is the correct answer.
During a bank reconciliation, various items are compared, such as deposits in transit, outstanding checks, bank fees, and interest earned. The purpose is to identify any discrepancies or differences between the company's records and the bank's records. By reconciling the cash account in the balance sheet, the company can identify any errors or missing transactions, and make adjustments accordingly.
Learn more about Balance Sheet here:
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The complete question is, " A bank reconciliation reconciles the bank statement with the company's
a. net cash flow in the statement of cash flows.
b. net income in the income statement.
c. cash account in the balance sheet.
d. cash from operating activities."
Suppose the economy is currently in short run macroeconomic equilibrium, with actual GDP bigger than potential GDP.
(a) Depict this situation using AD-AS, being sure to label all curves and axes. What is the gap called?
(b) In the long run, what will happen to prices and output? Depict graphically and explain.
Answer:
attached below
Explanation:
Given that the economy has its actual GDP > potential GDP
A) using AD-AS to depict the situation
attached below is the graph
The gap( Lf - L1 ) is called inflationary gap
x-axis = real GDP , Y-axis = price level,
AD = aggregate demand curve , S = short run aggregate supply curve
L = long run aggregate supply curve,
B) In the long run the graph will adjust to the full employment level
attached below is the graph
An economy is experiencing a high rate of inflation. The government wants to reduce consumption by $24 billion to reduce inflationary pressure. The MPC is 0.75. By how much should the government raise taxes to achieve its objective?
Answer:
It should raise up to 56 percent of taxes
Explanation:
g A price ceiling that is set below the equilibrium price _____ . Group of answer choices causes suppliers to lose money creates a shortgage creates a supplus is non-binding
Answer:
creates a shortage
Explanation:
Price ceiling is when the government or an agency of the government sets the maximum price for a product. It is binding when it is set below equilibrium price.
Because price is set below equilibrium price, demand would outstrip supply and this would lead to a shortage
Effects of a price ceiling
1. It leads to shortages
2. it leads to the development of black markets
3. it prevents producers from raising price beyond a certain price
4. It lowers the price consumers pay for a product. This increases consumer surplus
Stout Corporation had net income of $200,000 and paid dividends to common stockholders of $40,000 in 2012. The weighted average number of shares outstanding in 2012 was 50,000 shares. Stout Corporation's common stock is selling for $75 per share on the New York Stock Exchange. Stout Corporation's price-earnings ratio is Group of answer choices
Answer:
18.75
Explanation:
The computation of the price-earning ratio is given below:
We know that
Price-Earning Ratio = Price Per Share ÷ Earning Per Share
Earning Per Share = Net Earnings ÷ Outstanding Shares
So,
Price-Earning Ratio = Price Per Share ÷ (Net Earnings ÷ Outstanding Shares)
= $75 ÷ ($200,000 ÷ 50,000)
= 75 ÷ 4
= 18.75