Answer:
e. $42,857.14
Explanation:
The computation of the break-even level of earnings before interest and taxes between these two options is shown below:
(EBIT) ÷ (Number of shares) = (EBIT - Interest) ÷ Number of shares
(EBIT) ÷ (75,000 shares) = (EBIT - $20,000) ÷$40,000
40,000 × EBIT = 75,000 × EBIT - $1,500,000,000
35,000 × EBIT = $1,500,000,000
After solving this,
The EBIT would be $42,857.14
The interest expense
= $320,000 × 6.25%
= $20,000
For each of the following costs incurred at Northwest Hospital, indicate whether it would most likely be a direct cost or an indirect cost of the specified cost object by listing the number and a "D" for direct or an "I" for indirect. For example: 1D, 2D, etc.
a. The wages of pediatric nurses / The pediatric department
b. Prescription drugs / A particular patient
c. Heating the hospital / The pediatric patient
d. The salary of the head of pediatrics / The pediatric patient
e. The salary of the head of pediatrics / The particular pediatric patient
f. Hospital chaplain's salary / A particular patient
g. Lab tests by outside contractor / A particular patient
h. Lab tests by outside contractor / A particular department
Answer:
Northwest Hospital
aD
bD
cI
dI
eI
fI
gD
hD
Explanation:
Direct costs are costs that are directly traceable to the production of goods and services and can be identified with a unit of production. While direct costs are usually variable, some direct costs can be fixed.
Indirect costs are costs that support the operation of the company. They cannot be traced to any unit of production. Similarly, some indirect costs are variable while others are fixed.
b. What is the contribution margin ratio for the Stack -O-Choc candy bar?
C. What is the breakdown point in units? In sales dollars?
D. If an increase in chocalate prices causes the variable cost per unit to increase to $0.55, what will happen to the breakeven point?
Answer:
(i) $0.26
(ii) 43.33%
(iii) 657,692.31 units
(iv) 3,420,000
Explanation:
Given that,
Selling price = $0.60
Variable cost per unit = $0.34
Total fixed costs = $171,000
(i) contribution margin per unit = Selling price - Variable cost per unit
= $0.60 - $0.34
= $0.26
(ii) contribution margin ratio:
= (contribution margin ÷ Selling price) × 100
= ($0.26 ÷ $0.6) × 100
= 43.33%
(iii) Break-even point in units:
= Total Fixed cost ÷ contribution margin
= (171,000 ÷ 0.26)
= 657,692.31 units
(iv) If an increase in chocolate prices causes the variable cost per unit to increase to $0.55.
contribution margin per unit = Selling price - Variable cost per unit
= $0.60 - $0.55
= $0.05
New Break-even point in units:
= Total Fixed cost ÷ contribution margin
= (171,000 ÷ 0.05)
= 3,420,000 units
Therefore, there is an increase in the break-even units or more units have to be sold to cover the variable and fixed cost.
a. The contribution margin per unit for Stack-O-Choc candy bars is $0.26.
b. The contribution margin ratio is approximately 43.33%.
c. The breakdown point is approximately 657,692 units or $394,615.38 in sales dollars.
d. If the variable cost per unit increases to $0.55, the new breakeven point will be 3,420,000 units, indicating a higher breakeven level.
a. The contribution margin per unit for the Stack-O-Choc candy bar can be calculated as follows:
Contribution Margin per Unit = Selling Price per Unit - Variable Cost per Unit Contribution Margin per Unit = $0.60 - $0.34 = $0.26
b. The contribution margin ratio (CM ratio) is the contribution margin per unit divided by the selling price per unit, expressed as a percentage:
CM Ratio = (Contribution Margin per Unit / Selling Price per Unit) x 100%
CM Ratio = ($0.26 / $0.60) x 100% ≈ 43.33%
c. The breakdown point in units can be calculated using the following formula:
Breakdown Point in Units = Total Fixed Costs / Contribution Margin per Unit Breakdown Point in Units = $171,000 / $0.26 ≈ 657,692 units
To find the breakdown point in sales dollars, you can multiply the breakdown point in units by the selling price per unit:
Breakdown Point in Sales Dollars = Breakdown Point in Units x Selling Price per Unit
Breakdown Point in Sales Dollars = 657,692 units x $0.60 ≈ $394,615.38
d. If the variable cost per unit increases to $0.55 due to higher chocolate prices, you can calculate the new breakeven point using the updated variable cost:
New Breakdown Point in Units = Total Fixed Costs / Updated Contribution Margin per Unit
New Breakdown Point in Units = $171,000 / ($0.60 - $0.55) = $171,000 / $0.05 = 3,420,000 units
So, if the variable cost per unit increases to $0.55, the new breakeven point in units will be 3,420,000 units. This increase in variable cost will result in a higher breakeven point.
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The answers for the subdivisions are given below and are explained. Explanation:
1)
it consists of a table refer the attachment
it has the list of asserts, liabilities and common stock
2)
(i) 32000
(ii) 11000
(iii) 38000
3)
The table in attached, it explains the prepaid expenses , common stock , dividends , insurance expenses , Insurance expenses, Accounts payable, service revenue.
4)
Refer the tables are attached it explains the Accounts receivable, common stock, rent payable. insurance expense , interest revenue and dividends.
5)
1.Equity at the beginning of the year = 27000 - 15000 = 8000
2. Equity at the end of the year 60,000 - 27,000 = 33000
3. Increase in equity = 33000 - 8000 = 25000
Net Income = 25000 + 37300 - 6300 = 56000
4. Common stock = 25000 + 6000 - 1100 = 29900
5. Dividends = 19600 + 19100 - 25000 = 13700
6. Net Income = 25000 + 42900 - 3400 = 64500
Preferred stock, 11 percent, par value $13 per share, 5,000 shares authorized
During the year, the following transactions took place in the order presented:
a. Sold and issued 21,900 shares of common stock at $26 cash per share.
b. Sold and issued 2,800 shares of preferred stock at $30 cash per share.
c. At the end of the year, the accounts showed net income of $41,600. No dividends were declared.
Required:
Prepare the stockholders’ equity section of the balance sheet at the end of the year.
Answer and Explanation:
The preparation of the stockholder equity section is presented below:
Tandy Company
Balance Sheet (Partial)
Stockholders Equity :
Contributed Capital :
Common stock (21,900 shares × $6) $131,400
Preferred stock (5,000 shares × $13) $65,000
Additional Paid in Capital - Common stock (21,900 shares × $20) $438,000
Additional Paid in Capital - Preferred stock (5,000 shares × $17) $85,000
Total Contributed Capital $719,400
Add: Retained Earnings $41,600
Total Stockholders Equity $761,000
Answer:
$33,600
Explanation:
The computation is shown below:
But first we have to determined the following things
Depreciation rate
= 1 ÷ useful life
= 1 ÷ 10
= 0.1
It is double-declining so the rate is also double i.e. 0.20
Now in the first year, the depreciation expense is
= $40,000 × 0.20
= $8,000
Now in the second year, the depreciation is
= ($40,000 - $8,000) × 0.20
= $25,600
So, the accumulated depreciation at the end of 2019 is
= $8,000 + $25,600
= $33,600
Here the residual value is not relevant. hence, ignored it
Answer:
Closing balance of debt at the end of the month = $24,000
Interest payment = $102.08
Explanation:
The computation of closing balance of debt at the end of the month and the interest payment is shown below:-
Closing balance of debt at the end of the month = Opening balance of company A - Scheduled Repayment per month
= $25,000 - $1,000
= $24,000
Interest payment = Average Debt × Annual interest rate × 12 months
= (($25,000 + $24,000) ÷ 2) × 0.05 ÷ 12 months
= $102.08
Therefore we have applied the above formulas.
To calculate the interest payment, find the average debt balance by adding the opening and closing balance and dividing by 2. Then, multiply the average debt balance by the monthly interest rate to get the interest payment.
To calculate the interest payment using the average debt balance, we need to calculate the average debt balance for the month. To do this, we add the opening balance and closing balance of debt and divide them by 2. In this case, the opening balance is $25,000 and the closing balance is the repayment of $1,000. So the average debt balance is $(25,000 + 1,000) / 2 = $13,000.
Next, we calculate the interest payment by multiplying the average debt balance by the annual interest rate and dividing it by 12 (since it's a monthly payment). The annual interest rate is 5%, so the monthly interest rate is 5% / 12 = 0.41667%. Therefore, the interest payment is $13,000 × 0.41667% = $54.17 (rounded to the nearest cent).