BUSINESS COLLEGE

On January 1, 2020, the Carla Vista Company budget committee has reached agreement on the following data for the 6 months ending June 30, 2020. Sales units: First quarter 5,500; second quarter 6,600; third quarter 7,300.
Ending raw materials inventory: 40% of the next quarter’s production requirements.
Ending finished goods inventory: 25% of the next quarter’s expected sales units.
Third-quarter production: 7,740 units.

The ending raw materials and finished goods inventories at December 31, 2019, follow the same percentage relationships to production and sales that occur in 2020. 5 pounds of raw materials are required to make each unit of finished goods. Raw materials purchased are expected to cost $5 per pound.
Prepare a production budget by quarters for the 6-month period ended June 30, 2020

Answers

Answer 1

Answer:

Answer and Explanation:

The preparation of production budget is shown below:-

Carla Vista Company

Production budget

For 6 months Ending June 31

Quarter 1 Quarter 2 Six months

Expected unit sales 5,500 6,600

Add: Desired ending finished

goods unit 1,650 1,825

(6,600 × 25%) (7,300 × 25%)

Total required units 7,150 8,425

Less: beginning finished

goods unit 1,375 1,650

(5,500 × 25%) (6,600 × 25%)

Required production

units 275 6,775 7,050

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Review the liabilities section of the balance sheet for Rings and Things. What problem can you identify with the payroll information, particularly as it relates to how much the one employee gets paid? What solution would you offer Janet and Omar?
Gilligan Co.'s bonds currently sell for $1,150. They have a 6.75% annual coupon rate and a 15-year maturity, and are callable in 6 years at $1,067.50. Assume that no costs other than the call premium would be incurred to call and refund the bonds, and also assume that the yield curve is horizontal, with rates expected to remain at current levels on into the future. Under these conditions, what rate of return should an investor expect to earn if he or she purchases these bonds, the YTC or the YTM?(A) 3.92%(B) 4.12%(C) 4.34%(D) 4.57%(E) 4.81%
Every organization needs some degree of flexibility and standardization. True False Being overly committed to following rules can harm an organization and keep it from growing. True False Every organization needs either a degree of ________ to adapt to new situations or some degree of ________ to make routine tasks and decisions as efficient and effective as possible. standardization; flexibility culture; vision flexibility; standardization structure; design
Your company has money to invest in an employee benefit plan and you have been chosen to be the plan's trustee. As an employee you want to maximize the interest earned on this investment and have found an account that pays 10% compounded continuously. Your company is providing you with $ 1,500 per month to put into your account for 10 years. What will be the balance in this account at the end of the 10-year period

What is the discount yield, bond equivalent yield, and effective annual return on a $2 million commercial paper issue that currently sells at 98.25 percent of its face value and is 128 days from maturity? (Use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161))

Answers

Answer:

1. Discount yield = 4.92%

2. Dividend yield = 5.07%

3. Effective annual return = 5.02%

Explanation:

The computation of discount yield, bond equivalent yield, and effective annual return is shown below:-

Discount yield

Commercial paper $2,000,000

Current selling price $1,965,000

($2,000,000 × 98.25%)

Days to maturity 128

Discount yield ( total days in a year)360

Dividend yield 4.92%

($2,000,000 - $1,965,000) ÷ $2,000,000 × (360 ÷ 128)

= $35,000 ÷ $2,000,000 × (2.8125)

= 0.0175 × 2.8125

= 0.04921

= 4.92%

Bond equivalent yield

Commercial paper $2,000,000

Current selling price $1,965,000

($2,000,000 × 98.25%)

Days to maturity 128

Discount yield ( total days in a year)360

Bond equivalent yield 5.07%

= ($2,000,000 - $1,965,000) ÷ $1,965,000 × (365 ÷ 128)

= $35,000 ÷ $1,965,000 × 2.8515625

= 0.017811705 × 2.8515625

= 0.05079119

= 5.07%

3. Effective annual return

Bond equivalent yield 5.07%

Effective annual return 5.02%

= (1 + 5.07% ÷ 365)^365 -1

= 5.02%

On September 12, Vander Company sold merchandise in the amount of $5,800 to Jepson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Vander uses the periodic inventory system and the gross method of accounting for sales. On September 14, Jepson returns some of the non-defective merchandise, which is restored to inventory. The selling price of the returned merchandise is $500 and the cost of the merchandise returned is $350. The entry or entries that Vander must make on September 14 is (are):

Answers

Answer:

DR Sales returns and Allowances ............................. $500

CR Accounts Receivable........................................................$500

Explanation:

Jepson returned $500 worth of goods so this would need to be accounted for by reducing the Accounts receivable amount by $500.

The returns will be accounted for in the Sales returns and allowances account which will be debited to reflect this.

in the event of bankruptcy under the federal bankruptcy laws, debtholders have a prior claim to a firm's income and assets before both common and preferred stockholders. moreover, in a bankruptcy all debtholders are treated equally as a single class of claimants.

Answers

The assertion is untrue. Debt holders have priority over common and preferred shareholders when it comes to a company's earnings and assets.

The creation of a plan under bankruptcy law enables a debtor who is unable to pay his creditors to settle his debts by allocating his assets to them. Additionally, this controlled split enables some degree of equality in the treatment of the interests of all creditors. In some bankruptcy cases, a debtor is permitted to continue operating their business and use the money they make to pay down their obligations. The discharge of certain debtors from their accrued financial responsibilities, following the distribution of their assets and even if their debts have not been fully paid, is another goal of bankruptcy law.

In order to implement the Bankruptcy Code, bankruptcy courts must adhere to Federal Rules of Bankruptcy Procedure.

Know more about bankruptcy law here:

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TC, Inc. has $15 million of outstanding bonds with a coupon rate of 10 percent. The yield to maturity on these bonds is 12.5 percent. If the firm's tax rate is 30 percent, what is relevant cost of debt financing to TC, Inc.?A) 13.75 percentB) 8.75 percentC) 7.00 percentD) 3.75 percent

Answers

Answer:

relevant cost of debt financing to TC, Inc.= 8.75%

Explanation:

The yield to maturity is a proxy for a company's cost of capital as it reflects the return that a company provides to its debtholders. Given a yield to maturity equal to 12.5% and a tax rateof 30%, the after tax cost of debt is calculated as :

After tax cost of debt = $kd*(1-t) = 0.125*(1-0.3)=0.0875$

The relevant interest rate is thus equal to 8.75% due to the fact that interest is tax deductible.

Jarett Motors is trying to decide whether it should keep its existing car washing machine or purchase a new one that has technological advantages (which translate into cost savings) over the existing machine. Information on each machine follows: Old machine New machine Original cost $9,000 $20,000 Accumulated depreciation 5,000 0 Annual cash operating costs 9,000 4,000 Current salvage value of old machine 2,000 Salvage value in 10 years 500 1,000 Remaining life 10 yrs 10 yrs Refer to Jarett Motors. The $4,000 of annual operating costs that are common to both the old and the new machine are an example of a(n):________ a. opportunity cost b. irrelevant cost c. future avoidable cost d. sunk cost

Answers

Answer:

The correct option is b. irrelevant cost.

Explanation:

An irrelevant cost can be described as an expense that will not be affected by the decisions of thee management. Therefore, irrelevant costs are those that will not change if you choose one option over another in the future.

Therefore, the $4,000 of annual operating costs that are common to both the old and the new machine are an example of irrelevant cost. This is because the 4,000 of annual operating costs will not be affected or will still be incurred whether Jarett Motors managment decide to keep its existing car washing machine or purchase a new one.

Therefore, the correct option is b. irrelevant cost.

Suppose that you are obtaining a personal loan from your uncle in the amount of $30,000 (now) to be repaid in three years to cover some of your college expenses. If your uncle usually earns 9% interest (annually) on his money, which is invested in various sources, what minimum lump-sum payment three years from now would make your uncle satisfied with his investment?

Answers

Answer:

$38,851 approx

Explanation:

As per the information provided in the question, the minimum annual rate of return would be at-least equal to the usual rate of return the investor (here uncle) earns. Here it is 9% per annum.

Anything earned below this rate of return will not satisfy the investor since this represents the minimum required rate of return.

A= $P(1 + r)^(n)$

Where A= Amount

P= Principal

r= Annual Rate Of Interest

n= period of loan

Therefore, A= $30,000(1 + .09)^(3)$

A= $38,850.87 or $38,851 approx.

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