Your friend, Suzie Whitson, has designed a new type of outdoor toy that helps children learn basic concepts such as colors, numbers, and shapes. Suzie’s product will target two groups: day care centers in warm climates and home school programs. Her company is Jiffy Jet and costs for last month follow: Factory rent $ 3,130 Company advertising 1,060 Wages paid to assembly workers 30,500 Depreciation for salespersons’ vehicles 2,200 Screws 535 Utilities for factory 845 Assembly supervisor’s salary 3,580 Sandpaper 185 President’s salary 5,180 Plastic tubing 4,050 Paint 285 Sales commissions 1,350 Factory insurance 1,170 Depreciation on cutting machines 2,000 Wages paid to painters 7,550 Assume that Suzie Whitson has decided to begin production of her outdoor children’s toy. Required: 1 and 2. Identify each of the preceding costs as either a product or a period cost. If the cost is a product cost, decide whether it is for direct materials (DM), direct labor (DL), or manufacturing overhead (MOH) and also identify each of the preceding costs as variable or fixed cost

Answers

Answer 1
Answer:

Factory rent -$ 3,130- Product - MOH - Fixed

Company advertising- 1,060- Period - Variable

Wages paid to assembly workers -30,500- Product - DL - Variable

Depreciation for salespersons’ vehicles- 2,200- Period - Fixed

Screws- 535- Product - DM - Variable

Utilities for factory -845-Product - MOH - Variable

Assembly supervisor’s salary -3,580- Product - MOH - Fixed

Sandpaper- 185- Product - MOH - Variable

President’s salary -5,180- Period - Fixed

Plastic tubing- 4,050- Product - MOH - variable

Paint -285- Product - DM - Variable

Sales commissions- 1,350- Period - Variable

Factory insurance- 1,170- Product - MOH - fixed

Depreciation on cutting machines- 2,000- Product - MOH - Fixed

Wages paid to painters -7,550-  Product - DL - Variable

  •  Direct materials are those materials and supplies that are consumed during the manufacture of a product, and which are directly identified with that product.

  • Direct labor is production or services labor that is assigned to a specific product, cost center, or work order.  

  • Manufacturing overhead refers to indirect factory-related costs that are incurred when a product is manufactured.

  • Period costs are not directly tied to the production process. Overhead or sales, general, and administrative costs are considered period costs. SG&A includes costs of the corporate office, selling, marketing, and the overall administration of company business.

  • Product costs are the direct costs involved in producing a product. A manufacturer would have production costs that include- Direct labor, Raw materials, Manufacturing supplies, Overhead that's directly tied to the production facility such as electricity.

  • Variable cost is a corporate expense that changes in proportion to production output.

  • Fixed cost is a cost that does not change with an increase or decrease in the number of goods or services produced or sold.

 

 

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Answer 2
Answer:

Answer:

Factory rent $ 3,130: Product - MOH - Fixed

Company advertising 1,060: Period - Variable

Wages paid to assembly workers 30,500: Product - DL - Variable

Depreciation for salespersons’ vehicles 2,200: Period - Fixed

Screws 535: Product - DM - Variable

Utilities for factory 845: Product - MOH - Variable

Assembly supervisor’s salary 3,580: Product - MOH - Fixed

Sandpaper 185: Product - MOH - Variable

President’s salary 5,180: Period - Fixed

Plastic tubing 4,050: Product - MOH - variable

Paint 285: Product - DM - Variable

Sales commissions 1,350: Period - Variable

Factory insurance 1,170: Product - MOH - fixed

Depreciation on cutting machines 2,000: Product - MOH - Fixed

Wages paid to painters 7,550:  Product - DL - Variable

Explanation:

- Direct materials are those materials and supplies that are consumed during the manufacture of a product, and which are directly identified with that product.

- Direct labor is production or services labor that is assigned to a specific product, cost center, or work order.  

- Manufacturing overhead refers to indirect factory-related costs that are incurred when a product is manufactured.

- Period costs are not directly tied to the production process. Overhead or sales, general, and administrative (SG&A) costs are considered period costs. SG&A includes costs of the corporate office, selling, marketing, and the overall administration of company business.

- Product costs are the direct costs involved in producing a product. A manufacturer, for example, would have production costs that include: Direct labor, Raw materials, Manufacturing supplies, Overhead that's directly tied to the production facility such as electricity.

- Variable cost is a corporate expense that changes in proportion to production output.

- Fixed cost is a cost that does not change with an increase or decrease in the amount of goods or services produced or sold.

In this exercise:

Factory rent $ 3,130: Product - MOH - Fixed

Company advertising 1,060: Period - Variable

Wages paid to assembly workers 30,500: Product - DL - Variable

Depreciation for salespersons’ vehicles 2,200: Period - Fixed

Screws 535: Product - DM - Variable

Utilities for factory 845: Product - MOH - Variable

Assembly supervisor’s salary 3,580: Product - MOH - Fixed

Sandpaper 185: Product - MOH - Variable

President’s salary 5,180: Period - Fixed

Plastic tubing 4,050: Product - MOH - variable

Paint 285: Product - DM - Variable

Sales commissions 1,350: Period - Variable

Factory insurance 1,170: Product - MOH - fixed

Depreciation on cutting machines 2,000: Product - MOH - Fixed

Wages paid to painters 7,550:  Product - DL - Variable


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Which of the following will improve your bargaining position with customers a. ​The product your team produces has become more costly to produce b. ​There are fewer close substitutes for the product your team supports c. ​New firms have entered the market with competing products for the ones your team produces d. ​Your competitors have developed new products that contain more of the features that your team produces

Answers

"There are fewer close substitutes for the product your team supports"  will improve your bargaining position with customers.

Option: B

Explanation:

Bargaining is the procedure which is preferred by citizens not only with street shops but it is famous internationally too, where defense, economic trade deal, etc are signed between two different nations to corporate and shake hand of unity. Bargaining is more effective when one allow seller to know that the party itself have more substitutes if the product is not provided by the seller in appropriate rate.

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Mary, a merchant, was in the business of selling flowers to local florists. Melissa was the owner of Little Flower, Inc. and she regularly purchased her flowers from Mary. One day, Melissa called Mary and ordered 20 dozen roses, 15 dozen carnations, 10 dozen daisies, baby breaths, 6 dozen tulips, and some plants. Everything totaled $1,200, and was to be delivered in 14 days. After the two ended their call, Mary sent Melissa an e-mail detailing the order and her acceptance. Melissa never responded to the e-mail. Eleven days later, Mary delivered the merchandise to Melissa, but she refused shipment. Mary sued Melissa for breach of contract. What is the likely result? Mary wins because the contract involved specially manufactured goods. Mary loses because Melissa did not sign anything. Mary loses because the contract was not in writing. Mary wins because Melissa failed to object to the merchant's confirmation memorandum.

Answers

Answer:Mary wins because Melissa failed to object to the merchant's confirmation memorandum.

Explanation:

A contract is first establish based on offer and acceptance between two parties. The telephone conversation of Mellisa to Mary constitute a valid offer and the email communication of Mary constitute a valid acceptance.

Furthermore the time interval between the email communication and delivery of the goods are enough period for Mellisa to counter the acceptance memorandum of Mary which she failed to carry out. This is the reason Mary wins.

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Answers

Answer:

Explanation:

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The Internet is a very effective tool for the nation. It has the potential to increase productivity through various but mutually reinforcing ways, including:

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Answers

Answer:

Fixed Cost = $24,000 Variable cost = $5

Explanation:

You have to use the High-Low method

$$Shipping expense = units sold * variable cost + fixed cost

From the table you got, you pick the higher and the lowest unit sold

and calculate the diference between them:

\left[\begin{array}{ccc}&$Units&$Shipping Expense\n$High&44,400&246,000\n$Low&30,000&174,000\n$Diference&14,400&72,000\n\end{array}\right]

Now 14,400 Units generates a cost of 72,000 Dividing we get the variable component

72,000/14,400 = 5

Then we calculate for the fixed cost:

$$246,000 = 44,400 * 5 + Fixed Cost

Fixed Cost = 24,000

Task 1: Careers and Educational Requirements Perform online research and choose a career in the financial services industry. Determine the education you will need to prepare for this career. Task 2: Certification Requirements
For your chosen career, identify the certification or licensing required. Develop a strategy to prepare for certification.

Task 3: Information Technology and Interpersonal Skills
For your chosen career, describe the skills you will need to learn and develop.

Answers

For Task 1, I have chosen the career of a financial analyst in the financial services industry. To prepare for this career, a Bachelor's degree in Finance, Accounting, Economics, or a related field is required.

For Task 2, becoming a Certified Financial Analyst (CFA) is highly valued in this career. The CFA program consists of three levels of exams that cover topics such as economics, financial reporting and analysis, ethics, and investment tools.

For Task 3, both information technology and interpersonal skills are important in this career. Financial analysts must have strong analytical skills and be proficient in using financial modeling software and spreadsheet applications.

Task 1-  Many employers also prefer candidates with a Master's degree in one of these fields. Additionally, courses in statistics, mathematics, and computer science can be beneficial in this career.  Task 2- To prepare for this certification, one should enroll in a CFA program review course, study the material thoroughly, and take practice exams to prepare for the rigorous testing process.

Task 3- They also need to have excellent communication and interpersonal skills to be able to work effectively with clients and team members. Additionally, they must be able to present complex financial information in a clear and understandable manner. Developing and honing these skills can be achieved through a combination of on-the-job experience, training, and continuing education courses.

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Blitz Industries has a debt-equity ratio of .6. Its WACC is 9.1 percent, and its cost of debt is 6.4 percent. The corporate tax rate is 22 percent. a. What is the company's cost of equity capital?
b. What is the company's unlevered cost of equity capital?
c-1. What would the cost of equity be if the debt-equity ratio were 2?
c-2. What would the cost of equity be if the debt-equity ratio were 1.0?
c-3. What would the cost of equity be if the debt-equity ratio were zero?

Answers

Answer: a. WACC = Ke(E/V} + kd(D/V)(1-T)

                            9.1 = ke(100/160) + 6.4(60/160)(1-0.22)

                            9.1 = ke(0.625) + 2.4(0.78)

                            9.1 = 0.625ke + 1.872

                  9.1-1.872 = 0.625ke

                        7.228 = 0.625ke

                              ke = 7.228/0.625

                               ke = 11.56%

                b. WACC = Ke(E/V)

                          9.1   = ke(100/160)    

                          9.1   = 0.625ke

                           ke = 9.1/0.625

                           ke = 14.56%

                 c-1.    WACC = Ke(E/V} + kd(D/V)(1-T)

                                 9.1  = ke(1/3) + 6.4(2/3)(1-0.22)

                                 9.1  = 0.3333ke + 3.328

                     9.1 - 3.328 = 0.3333ke

                            5.772   = 0.3333ke

                                 ke = 5.772/0.3333

                                 ke = 17.32%

   

                    c-2.     9.1 = ke(1/2) + 6.4(1/2)(1-0.22)  

                                9.1 = 0.5ke   + 2.496

                   9.1 - 2.496 = 0.5ke

                           6.604 = 0.5ke

                                ke = 6.604/0.5

                                ke = 13.21%

             

                   c-3.  9.1 = ke (0/0) + kd (0/)

                            ke = 0%

Explanation:

a. in the a part of the question, the debt-equity ratio was 0.6 ie 60/100. Thus, the value of the firm equals 160. The figures given in the question were substituted in the formula. Cost of equity was not provided, therefore, it becomes the subject of the formula. The variables are defined as follows:

ke = Cost of equity = ?

kd = Cost of debt  = 6.4%

 E = Value of equity = 100

 D = Value of debt = 60

 V = Value of the firm ie E + D = 100 + 60 = 160

 T = Tax rate = 22% = 0.22

b. In this part of the question, only equity would be considered since we are calculating unlevered cost of equity. The part of the formula that deals with debt will be ignored.

c-1.  In this case, the debt-equity ratio is 2. Therefore, debt equals 2 while equity is 1. The value of the firm becomes 3. There is need to substitute these values in the original formula while other variables remain constant.

c-2. In this scenario, the debt-equity ratio is 1. Thus, equity is 1 and debt is also 1. The value of the company changes to 2. These new values would be substituted in the formula in order to obtain the new cost of equity.

c-3. since the debt-equity ratio is 0, therefore, the cost of equity equals 0.

Final answer:

a. The company's cost of equity capital is 8.6014%. b. The company's unlevered cost of equity capital is 5.8729%. c-1. If the debt-equity ratio were 2, the cost of equity would be 8.6788%. c-2. If the debt-equity ratio were 1.0, the cost of equity would be 8.8894%. c-3. If the debt-equity ratio were zero, the cost of equity would be 5.8729%.

Explanation:

a. The formula to calculate the cost of equity capital is: Cost of Equity = WACC - (Debt/Equity) * (WACC - Cost of Debt) * (1 - Tax Rate). So, by plugging in the given values, we get Cost of Equity = 9.1% - 0.6 * (9.1% - 6.4%) * (1 - 0.22) = 9.1% - 0.6 * 2.7% * 0.78 = 9.1% - 0.4986% = 8.6014%.

b. The unlevered cost of equity capital can be calculated using the formula: Unlevered Cost of Equity = Cost of Equity / (1 + (Debt/Equity) * (1 - Tax Rate)). So, by plugging in the given values, we get Unlevered Cost of Equity = 8.6014% / (1 + 0.6 * 0.78) = 8.6014% / 1.468 = 5.8729%.

c-1. If the debt-equity ratio were 2, the new cost of equity can be calculated using the same formula as in part a. By plugging in the new debt-equity ratio, we get Cost of Equity = 9.1% - 2 * (9.1% - 6.4%) * (1 - 0.22) = 9.1% - 2 * 2.7% * 0.78 = 9.1% - 0.4212% = 8.6788%.

c-2. If the debt-equity ratio were 1.0, the new cost of equity can be calculated using the same formula as in part a. By plugging in the new debt-equity ratio, we get Cost of Equity = 9.1% - 1.0 * (9.1% - 6.4%) * (1 - 0.22) = 9.1% - 1.0 * 2.7% * 0.78 = 9.1% - 0.2106% = 8.8894%.

c-3. If the debt-equity ratio were zero (meaning no debt), the new cost of equity would be the same as the unlevered cost of equity calculated in part b, which is 5.8729%.

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