BUSINESS COLLEGE

Production in 2012 for California Manufacturing, a producer of high security bank vaults, was at its highest point in the month of June when 46 units were produced at a total cost of $500,000. The lowest point in production was in January when only 21 units were produced at a cost of $346,000. The company is preparing a budget for 2012 and needs to project expected fixed cost for the budget year. Using the high/low method, the projected amount of fixed cost per month is

Answers

Answer 1
Answer:

Answer:

Fixed Cost 216,640

Explanation:

\left[\begin{array}{ccc}High&46&500,000\nLow&21&346,000\nDiference&25&154,000\n\end{array}\right]

The first step is calculate the difference between activity levels

This tell us 25 units generated cost for 154,000

154,000 / 25 = Variable Cost = 6,250

Now we use either the low or high values to solve for fixedcost:

total = variable + fixed

fixed = total - variable

HIGH

Total Cost 500,000

Variable          283,360 (6,250 x 46)

Fixed Cost   216,640

LOW

Total Cost 346,000

Variable          129,360 (6,250 x 21)

Fixed Cost 216,640

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On February 3, Gallatin Repair Service extended an offer of $122,000 for land that had been priced for sale at $140,000. On February 28, Gallatin Repair Service accepted the seller's counter offer or $133,000. On October 23, the land was assessed at a value of $200,000 for property tax purposes. On January 15 of the next year, Gallatin Repair Service was offered $213,000 for the land by a national retail chain. At what value should the land be recorded in Gallatin Repair Services records

Answers

Answer:

$133,000

Explanation:

According to the historical cost principle, the assets should be recorded at the purchase price or the acquisition cost. In this, no other cost should be recorded like assessed value, land improvements, etc

Since in the given question the Gallatin accepted the seller counter offer i.e. $133,000 so the same is to be presented in the financial statements

hence, the land should be recorded at $133,000

Marcos receives an annuity payment of $2,500, payable every two years, for the next ten years. The next payment is due two years from today. What is the present value of this annuity at a discount rate of 5 percent?

Answers

Answer:

$9,416.75

Explanation:

Present value is the sum of discounted cash flows.

Present value can be calculated using a financial calculator

Cash flow in year 1 = 0

Cash flow in year 2 = $2500

Cash flow in year 3 = 0

Cash flow in year 4 = $2500

Cash flow in year 5 = 0

Cash flow in year 6 = $2500

Cash flow in year 7 = 0

Cash flow in year 8 = $2500

Cash flow in year 9 = 0

Cash flow in year 10 = $2500

Present value = $9416.75

To find the PV using a financial calacutor:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

Final answer:

The present value of the annuity payments that Marcos receives is approximately $11,614.58, using the given 5% discount rate and considering the biennial payment structure.

Explanation:

To calculate the present value of an annuity where payments are made every two years, we can use the present value of an ordinary annuity formula. Since payments are made every two years, we adjust our calculations to reflect this. Given the discount rate of 5% and the next payment due to be in two years, we will use this rate for our calculations.

Here's how to find the present value of the annuity that Marcos receives. We would use the following formula for the present value (PV) of an ordinary annuity:

PV = Pmt * [(1 - (1 + r)^-n) / r]

Where Pmt is the annuity payment, r is the discount rate per compounding period, and n is the total number of compounding periods.

Marcos's annuity:

  • Payment (Pmt) = $2,500
  • Discount rate (r) = 0.05/2 = 0.025 (since payment is every two years)
  • Number of payments (n) = 10/2 = 5

Using these details, we calculate:

PV = $2,500 * [(1 - (1 + 0.025)^-5) / 0.025]

PV = $2,500 * 4.64583... (factor obtained from the formula)

PV ≈ $11,614.58

So the present value of the annuity that Marcos receives is approximately $11,614.58.

Learn more about Present Value of Annuity here:

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Kiera’s dog walking business is booming, and she is interested in expanding. In order to expand, her company needs more customers, and the demand for dog walking in her neighboring communities must increase in order for her to generate a profit. Her best friend, a local celebrity, suggests that she should consider marketing her services. Because Kiera understands that there are specific challenges associated with developing advertising objectives for services, she is very careful about how to advertise her dog walking services. In the end, she decides to develop a logo for her company so customers can associate it with the services she provides. ​ How did Kiera make her intangible services more marketable?​

Answers

Answer:

The correct answer to the following question will be "S​he enhanced her brand image".

Explanation:

  • Keira dramatically improved her brand reputation by getting ready a logo to promote her unquantifiable facility of various dog walking the dog. Designed to enhance the brand identity requires connecting with the clients regarding your brand as well as trying to make your provider or good extra attractive to the users. That is among the most powerful advertising moves.
  • Keira aims to grow its market here by generating more competition for its intangible growing organization. For all of this she chooses to help improve her brand value so that she can get so many requirements for her provider as well as make higher revenue.

So that the above is the right answer.

A construction company entered into a fixed-price contract to build an office building for $20 million. Construction costs incurred during the first year were $6 million and estimated costs to complete at the end of the year were $9 million. The company recognizes revenue over time according to percentage of completion. How much revenue and gross profit or loss will appear in the company’s income statement in the first year of the contract? (Enter your answer in whole dollars.)

Answers

Answer:

$2 million or $2,000,000

Explanation:

The computation of the revenue and gross profit or loss will appear in the company’s income statement in the first year is shown below:

= revenue recognized - cost incurred

The Total cost is

= $6 + $9

= $15

And, the revenue recognized is

= $6 ÷ $15 × $20

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So, the gross profit is

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I want to have a college fund for my daughter. She is 5, so I have 13 years to achieve my goal of $50,000. The bank says I can earn 2%. I have $5000 already set aside. How much do I need to contribute every year?

Answers

Answer:

$2960 yearly savings

Explanation:

From the values given and from mathematical manipulation, he or she needs a contribution of at least $2900 every year in order to achieve his goal of $50,000.

                     EXPLANATION

  • If the child is 5yr old now, in 13years time, she will be 18yr old.
  • $2950 target yearly

  • for the next 13years, it would have amount to $38350

  • remember the bank will give an annual interest rate of 2%
  • so for 13years, that's 26% = 0.26

  • In the 13th year, he would have saved $38350, add the 26% interest for the duration of 13years = 26% x $38350 + $38350 = $48321

  • His savings will fall between $2950 - $2960 yearly.

Final answer:

You will need to contribute approximately $2,615.97 each year to your college fund to achieve your goal of $50,000 in 13 years, starting with $5,000 and earning 2% interest compounded annually.

Explanation:

To calculate how much you need to contribute every year to have $50,000 in a college fund for your daughter in 13 years with an existing $5,000 at a 2% annual interest rate, we need to use the future value of an annuity formula:

The future value of an annuity formula is FV = P × {[(1 + r)^n - 1] / r}, where:

  • FV is the future value of the annuity (the amount we want to have in the future, which is $50,000).
  • P is the annual payment (the amount you will contribute every year).
  • r is the annual interest rate (which is 2%, or 0.02).
  • n is the number of years the money is deposited (13 years).

Since you already have $5,000, we first need to find out how much this amount will grow to in 13 years at an annual interest rate of 2%. That's calculated using the compound interest formula:$5,000(1 + 0.02)^{13} = $6,727.09

Now, subtract this future value of your initial savings from the goal:$50,000 - $6,727.09 = $43,272.91

This is the amount that needs to be reached with the annual contributions. Plugging this back into the future value of an annuity formula, we solve for P:$43,272.91 = P × {[(1 + 0.02)^{13} - 1] / 0.02}We can now solve for P, which is the annual contribution required:P = $43,272.91 / {[(1 + 0.02)^{13} - 1] / 0.02} = $2,615.97

Therefore, you'd need to contribute approximately $2,615.97 each year to reach your $50,000 college fund goal in 13 years, assuming a 2% annual rate.

With regard to a futures contract, the long position is held by a. the trader who plans to hold the contract open for the lengthiest time period. b. the trader who commits to delivering the commodity on the delivery date. c. the trader who bought the contract at the largest discount. d. the trader who has to travel the farthest distance to deliver the commodity. e. the trader who commits to purchasing the commodity on the delivery date.

Answers

Answer:

The answer is e. the trader who commits to purchasing the commodity on the delivery date.

Explanation:

The long position in a forward position agrees to buy the stock when the contract expires. The long futures position is an unlimited profit, unlimited risk position that can be entered by the futures speculator to profit from a rise in the price of the underlying
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