Option d is correct. The best inspectors should find every variation and defect.
Planning for quality is more cost-effective than checking the final product, redoing the job, or fixing issues to meet quality standards. The project manager must weigh the cost of conformity with the cost of obtaining the desired level of quality.
Customer satisfaction is a significant determinant of project quality, which in turn is a critical determinant of project success. Therefore, nothing regarding quality on the inspectors should be taken carelessly. A project manager must be aware of the quality expectations in order to plan for quality. The project manager and the project team must identify the planning requirements, decide how requirements can be met, and identify the costs and time requirements to meet the identified requirements as part of the planning processes.
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Vitale Hair Spray had sales of 13,000 units in March. A 70 percent increase is expected in April. The company will maintain 30 percent of expected unit sales for April in ending inventory. Beginning inventory for April was 650 units.
The units to be purchased in April by Vitale Hair Spray should be 28,080 units.
These units to be purchased by Vitale Hair Spray are computed as follows:
Sales units in March = 13,000 units
Expected increase in Sales units in April = 70%
Therefore, Sales units in April = 22,100 (13,000 x 1.7)
Ending Inventory for April = 30% of expected April Sales
= 6,630 units (22,100 x 30%)
Purchases = Ending Inventory + Expected April Sales - Beginning Inventory = 28,080 units (6,630 + 22,100 - 650)
Thus, the units to be purchased are the sum of Expected April Sales and Ending Inventory Less Beginning Inventory.
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Given the supply and demand functions below, find the demand when p = $12.
S(p) = 50
D(p) = 120 - 4p Select one:
a. 72
b. 48
c. 132
d. 60
The demand function for the product will be approximately 72 units when the price is $12. Option A is correct.
The demand function will represents the relationship between the price of a product or service as well as the quantity demanded by consumers. In this case, the demand function is given as D(p) = 120 - 4p, where p represents the price.
To find the demand when the price is $12, we substitute p = $12 into the demand function;
D(p) = 120 - 4p
D(12) = 120 - 4(12)
D(12) = 120 - 48
D(12) = 72
This calculation tells us that when the price is $12, the quantity demanded is 72 units. The demand decreases as the price increases because the demand function has a negative coefficient (-4) for the price variable. As the price goes up, consumers are generally willing to purchase fewer units of the product. In this case, the demand for the product is 72 units when the price is $12.
Hence, A. is the correct option.
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Explain the similarities and differences between job order costing and process costing. In the explanation, provide examples of when job order costing and process costing would be most appropriate.
Job order costing and process costing are two methods of cost allocation used in different production environments.
Job order costing is used when products are manufactured individually or in small batches, with each product being unique. It involves assigning costs to specific jobs or orders based on their characteristics, such as materials, labor, and overhead. Examples include custom-made furniture, construction projects, and printing services.
Process costing, on the other hand, is used when products are produced in a continuous flow, with identical or homogeneous units. Costs are allocated to each process or department and then averaged over the total units produced. Examples include oil refining, food processing, and chemical manufacturing.
In summary, job order costing is suitable for customized or unique products, while process costing is appropriate for standardized, mass-produced goods.
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This option in the Help tab allows you to view options and shortcuts when using a screen reader.
Accessibility
Contact Support
Feedback
What's New
Answer:
Accessibility
Explanation:
I took a test and 100% got it correct so you can trust me
Have a great day!
Answer: The answer is Accessibiliy, because i took this test and i got this answer right!!
Explanation:
have great day.
why personnel management is important to an office?Explain in details.
Answer: See explanation
Explanation:
Personnel management can be defined as the the effective management of the employees in an organisation. The importance of personnel management to an office include:
• Personnel management helps in bringing the gap that exist between the performance of the employees and the objectives of the organisation.
• An efficient personnel management is important as it gives a company and edge over its rivals.
• A good and effective personnel management helps in the creation and the maintenance of a working environment that's harmonious.
If a company has beginning inventory of $30,000 and ending inventory of $55,000, compute its average inventory. If the COGS is $140,000, compute its inventory turnover and determine how many days the average item is in stock.
The average item is in stock for approximately 111.24 days.
To compute the average inventory, we can use the formula:
Average Inventory = (Beginning Inventory + Ending Inventory) / 2
In this case, the beginning inventory is $30,000 and the ending inventory is $55,000.
Average Inventory = ($30,000 + $55,000) / 2
Average Inventory = $85,000 / 2
Average Inventory = $42,500
The average inventory is $42,500.
To compute the inventory turnover, we can use the formula:
Inventory Turnover = Cost of Goods Sold / Average Inventory
In this case, the cost of goods sold (COGS) is $140,000.
Inventory Turnover = $140,000 / $42,500
Inventory Turnover ≈ 3.29
The inventory turnover is approximately 3.29.
To determine how many days the average item is in stock, we can use the formula:
Days in Stock = 365 days / Inventory Turnover
Days in Stock = 365 days / 3.29
Days in Stock ≈ 111.24
The average item is in stock for approximately 111.24 days.
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One of the limitations for an entrepreneur of setting up a new business as a franchise is:
Answer:
The first and most significant disadvantage of a franchise is the fact that the franchisee has no control of the business or how it is run (or very limited control). The rules of the business are already established and part of the franchise agreement.
Question:
Nylan Company is considering an investment in new equipment costing $850,000. The equipment will be depreciated on a straight-line basis over a five-year life and is expected to have a salvage value of $50,000. The equipment is expected to generate net cash inflows of $1,000,000 in total during the five years life. What is the accounting rate of return associated with the equipment investment?
The accounting rate of return (ARR) associated with the equipment investment is 17.65%. The ARR is calculated by dividing the average annual net cash inflows by the initial investment cost and expressing it as a percentage.
In this case, the average annual net cash inflows over the five-year life of the equipment is $200,000 ($1,000,000 divided by 5), and the initial investment cost is $850,000. Dividing $200,000 by $850,000 and multiplying by 100 gives us an ARR of 23.53%. Therefore, the accounting rate of return associated with the equipment investment is 17.65%.
To calculate the accounting rate of return (ARR), we divide the average annual net cash inflows by the initial investment cost and express it as a percentage. In this case, the average annual net cash inflows are $200,000 ($1,000,000 divided by 5 years). The initial investment cost is $850,000. By dividing $200,000 by $850,000 and multiplying by 100, we find that the ARR is 23.53%.
The ARR is a simple profitability measure that provides an indication of the return on investment. In this case, the ARR of 17.65% suggests that for every dollar invested in the equipment, the company can expect to earn a return of approximately 17.65 cents per year over the five-year period. It is important to note that the ARR does not consider the time value of money or the cash flows beyond the five-year period. Therefore, it should be used in conjunction with other financial metrics to make a well-informed investment decision.
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Utilizing your research notes, imagine you are a business manager and you must create a brief step-by-step problem-solving guide to be used by your employees. The guide should outline the steps in the problem solving process and provide a few details as to how an individual could approach each step. The guide should be no more than one page. Be sure to explain the value of collaboration and teamwork within the workplace.
Answer:
Define the problem
Analyze the affects of problem on the business
Generate list possible solutions to it.
Evaluate each alternative.
Implement a solution that is best fit
Monitor the results
Explanation:
There are six steps in problem solving. As a business manager one should understand all these steps to immediately counter a problem and progress for business success. The business manager should first define the problem and analyse the affects that it may cause to the business operations. He should then consider list of possible solutions which can solve the problem without any harm to business activities. The best possible solution to the problem should be selected and then it should be implemented to solve the problem quickly. The progress of the problem solving should be evaluated.
The demand curve for money shifts to the right when:________
The demand curve for money shifts to the right when money demand decreases.
What happens to the interest rate when money demand decreases?
The quantity of money demanded at a certain interest rate is represented by the money demand curve. Because the demand curve for money slopes downward, people will opt to keep less of their wealth in the form of cash if interest rates on bonds and other alternative investments rise.
The central bank manages the money supply and does business with other organisations. This interaction is a hallmark of the money market and may be shown as a supply curve.
The supply and demand for money in a country are represented by the money market, a kind of economic model. Money, including cash and checking and savings accounts, is a need for both individuals and organisations.
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Any recommendations of how to convince my parents to get me a dog?
Answer:
ok so u have to get a pet rock first u name it u take it out to go to the bathroom and everything u would do with a dog and it shows your parents you're ready for one u have to show them that u know how to take care of one first
Explanation:plz mark me branlyiest this worked for me so yea hope it helped
taxpayer has net se income of $250,000. what amount of se tax will taxpayer pay? round your answer to the nearest dollar.
The taxpayer will pay self-employment (SE) tax based on their net SE income. The exact amount of SE tax can be calculated by multiplying the net SE income by the SE tax rate.
The self-employment tax is a combination of Social Security tax and Medicare tax that self-employed individuals are required to pay. As of 2021, the SE tax rate is 15.3% of the net SE income. This rate is comprised of 12.4% for Social Security tax and 2.9% for Medicare tax. To calculate the SE tax amount, the taxpayer needs to multiply their net SE income by the SE tax rate of 15.3%. For example, if the taxpayer has a net SE income of $250,000, the SE tax would be $250,000 multiplied by 15.3% (or 0.153), resulting in a SE tax amount of $38,250.
It's important to note that the SE tax is an additional tax that self-employed individuals must pay in addition to any income tax they may owe. The SE tax helps fund Social Security and Medicare programs.
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price ceilings sometimes result in some buyers and sellers purchasing the good at prohibited prices. group of answer choices true false
True. price ceilings sometimes result in some buyers and sellers purchasing the goods at prohibited prices.
A price ceiling is a type of price control, usually mandated by governments, that sets the maximum amount a seller can charge for goods or services.
Consumer goods such as groceries, gasoline, and pharmaceuticals are typically subject to price caps after a crisis or special event causes costs to skyrocket.
The opposite of a price cap is the price floor. You cannot set a lower price than this.
While making staple foods affordable to consumers in the short term, price caps often come with long-term drawbacks: B. Rarity, extra cost, or poor quality products.
Economists fear that price caps will put a dead weight on the economy, making it less efficient.
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There are three elements that can vary in multimedia project estimates: time, money and people
Understanding the equilibrium between these three elements of multimedia project estimates - "People, Time, and Money" - is critical to ensuring that every project has an equal chance of success.
Why does time, money, and people vary in project estimates?The project plan and the estimate, which specifies the scope of work, are the backbone of the proposal.
Project estimates can be affected by three factors:
TimeMoneyPersonnel or peoplePayments are normally made in three parts, and the time at which they are to be made is predetermined.
Establishment charges may be included in the first instalment of a progressive payment plan. The client or customers owns the completed work for which they have paid. The agreement/contract determines the definition of ownership.
Analyzing the activities associated with the project as well as the individuals that construct it is how cost estimation is done. Multimedia project billing costs typically vary from $60 to $150 per hour.
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People, time and money are the three elements that might vary in estimates of multimedia projects. One or both element have to be increased if any one of them is decreased.
What is a Multimedia project?Multimedia is the integration of media objects such as text, graphics, video, animation, and sound to represent and convey information.
Multimedia projects are computer programs and products which involve sound, pictures, and film, as well as text. It is a task that sometimes requires a lot of time and effort.
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Oriole Ltd. has a December 31 year end. On April 2, 2024, Oriole purchased a piece of equipment at a cost of $236,000. Oriole’s management estimated that this piece of equipment would have a useful life of five years and a residual value of $20,000. Oriole uses the straight-line method for depreciating its manufacturing equipment.
If Oriole sold the piece of equipment on June 30, 2026, for $124,800, what amount of gain or loss would have to be recorded?
The amount of select an option ( gain/loss) gainloss on disposal $enter a dollar amount
To calculate the gain or loss on the disposal of the equipment, we need to compare the selling price with the book value of the equipment. Since the selling price is lower than the book value, a loss of $3,200 would have to be recorded on the disposal of the equipment.
Book value = Cost of the equipment - Accumulated depreciation
The cost of the equipment is given as $236,000, and the estimated residual value is $20,000. The useful life is five years, so the annual depreciation expense can be calculated as:
Depreciation expense = (Cost - Residual value) / Useful life
Depreciation expense = ($236,000 - $20,000) / 5 = $43,200 per year
Since the equipment was sold on June 30, 2026, it was in use for 2.5 years. Therefore, the accumulated depreciation up to the date of sale can be calculated as:
Accumulated depreciation = Depreciation expense per year * Number of years
Accumulated depreciation = $43,200 * 2.5 = $108,000
Now we can calculate the book value:
Book value = Cost of the equipment - Accumulated depreciation
Book value = $236,000 - $108,000 = $128,000
To determine the gain or loss, we compare the selling price ($124,800) with the book value ($128,000):
Gain/Loss on disposal = Selling price - Book value
Gain/Loss on disposal = $124,800 - $128,000 = -$3,200
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Which component of managing inventory indicates whether you are moving inventory quickly and keeping up with demand?
A fast
rate indicates that you are moving inventory quickly and keeping up with demand.
Answer:
a fast turnover rate
Explanation:
cuz i took the test
Answer:
turnover
Explanation:
Machvile Corporation, a robotics company, decides to acquire Chancera Inc., a start-up company that operates within the same industry. To better assess its decision, the management of Machvile Corporation needs to find out the value of Chancera Inc.'s total assets. The management has information regarding Chancera Inc.'s liabilities and stockholders' equity. In this scenario, the management should most likely use the _____ to get the required information.
Answer: Accounting equation
Explanation:
The accounting equation is a proposition or formula that accesses a company's assets by summing up it's equity and liabilities. It means that the equity of a company would equal it's assets minus liabilities.
Machvile Corporation can access properly the worth of Chancera Inc.'s by using the Accounting equation, weighing their assets and leaving out their liabilities.
A student will decide to attend class when
A. The Marginal Cost in low
B. The Marginal Benefit of attending exceeds the marginal cost of attending
C. There is an attendance policy
D. The Marginal Benefit is positive
A student will decide to attend class when there is an attendance policy. Thus, option (c) is correct.
What is policy?The term policy refers to are the rules are the described in the details are the mention. The policy are the making follow to the country and the employees of the company. The policy are the making the company of the solving the issues.
A student was the decided to regularly attend lectures or classes was the main motive to fulfill the attendance policy. The attendance was the necessary to appear in the exam. An attendance was the help to gain good marks in the exams. An attendance policy was the best policy.
As a result, the student will decide to attend class when there is an attendance policy. Therefore, option (c) is correct.
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latoya filed her tax return on february 10 this year. when will the statute of limitations expire for this tax return if latoya understated her income by 40 percent? multiple choice 1 6 years from february 10th 6 years from april 15th 3 years from april 15th 3 years from february 10th indefinitely cannot be opened after april 15th how would your answer change if latoya intentionally failed to report as taxable income any cash payments she received from her clients? multiple choice 2 6 years from february 10th 6 years from april 15th 3 years from april 15th 3 years from february 10th indefinitely cannot be opened after april 15th
The statute of limitations for a tax return is typically 3 years from the due date of the return (April 15th) or the date it was filed (whichever is later). In this case, the statute of limitations would expire 3 years from February 10th.
If Latoya intentionally failed to report any cash payments she received from her clients, the statute of limitations would change from 3 years to 6 years from the date the return was filed (February 10th). This is because the IRS has 6 years to open an audit when a taxpayer has understated their income by more than 25%.
Since Latoya understated her income by 40%, the IRS has 6 years to open an audit.
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the cost of common equity is based on the rate of return that investors require on the company's common stock. new common equity is raised in two ways: (1) by retaining some of the current year's earnings and (2) by issuing new common stock. equity raised by issuing stock has a(n)
The equity raised by issuing stock has a higher cost (re) than equity raised from retained earnings (rs), due to flotation costs required to sell new common stock.
Why does equity raised by issuing stock have a higher cost than equity raised from retained earnings?Equity raised by issuing stock typically incurs higher costs (re) compared to equity raised from retained earnings (rs) due to the presence of flotation costs. Flotation costs are expenses associated with issuing new common stock, such as underwriting fees, legal expenses, and administrative costs.
When a company issues new stock, it needs to pay these costs to investment banks or underwriters involved in the issuance process. As a result, the cost of equity (re) increases because these additional expenses reduce the net proceeds received by the company from issuing stock.
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You live near the beach and want to give snorkeling lessonsYou estimate that after expenses , you can earn $10 per lesson. Each lesson will be one-hour long, and you will offer lessons days a week. Your income goal is $ 15,000 per year. How many lessons do you need to give to achieve this goal? Is this goal realistic?
Answer:
Thats 700 a week
Explanation:
10 per lesson- 60 mins-weekly
On 1 July 2020, Bowie Ltd acquired all the shares of David Ltd for $500,000 on an ex-div. basis. On this date, the equity and liabilities of David Ltd included the following balances:
Share capital $100,000
General reserve 25,000
Retained earnings 145,000
Dividend Payable -ex div basis 8,000
At acquisition date, all the identifiable assets and liabilities of David Ltd were recorded at amounts equal to fair value except for:
Carrying amount Fair value Useful life at acquisition date
Land 700,000 900,000 Sold 30/4/2022
Plant and equipment
(cost $500,000)
$400,000 $404,000 5 years
Trade mark 50,000 60,000 Indefinite life
Motor vehicle (cost $90,000) 60,000 75,000 5 years
Inventories 2,000 12,000 100% sold externally during the year ended 30/6/2021
Any valuation reserves created are transferred on consolidation to retained earnings when assets are sold or fully consumed.
Additional information
On 1 July 2021, Bowie Ltd has on hand inventory worth $34 000, being transferred from David Ltd in June 2021. The inventory had previously cost David Ltd $30 000.
On 1 January 2022, David Ltd sold an item of plant with a carrying amount of $115 000 to Bowie Ltd for $125 000. Bowie Ltd treated this item as inventory. The item was still on hand at the end of the year. David Ltd applied a 20% depreciation rate to this plant.
On 1 March 2022, David Ltd acquired $9 000 inventory from Bowie Ltd. This inventory originally cost Bowie Ltd $5 000. 25% of this inventory has been sold to external parties for $35,000.
On 1 January 2021, Bowie Ltd sold office equipment to David Ltd for $2,000. This office equipment had originally cost Bowie Ltd $5 000 and had a carrying amount at the time of sale of $1,000. Both entities charge depreciation at a rate of 20% p.a.
On June 2021 Bowie Ltd gave David Ltd a loan of $425 000. David Ltd has not made any repayments on the loan. Interest is charged at 15% per annum on the loan and the last interest payment was made on 31 March 2022. Both companies have recorded accruals at year end.
The corporate tax rate is 30%.
1. Prepare the acquisition analysis as at 1 July 2020 for the Bowie Ltd Group
2. Prepare the consolidation entries as at 30 June 2022 for the Bowie Ltd Group. Notes: CONSOLIDATION ENTRIES PLEASE, NOT WORKSHEET.
1. Acquisition Analysis of David Ltd by Bowie Ltd on 1 July 2020:
Cash consideration paid: $500,000
Fair value of net assets acquired:
Total Assets acquired (excluding cash): $932,000 ($900,000 + $404,000 + $60,000 + $75,000 + $12,000 + $5,000)
Less: Total Liabilities assumed (excluding dividend payable) ($0 + $0 + $0 + $0 + $0 + $0) = $0
Add: Share Capital acquired: $100,000
Add: General Reserve acquired: $25,000
Add: Retained Earnings acquired: $145,000
Fair value of net assets acquired: $1,202,000
Goodwill = $1,202,000 - $500,000 = $702,0002. Consolidation Entries for Bowie Ltd Group as at 30 June 2022:
(a) Elimination of equity balances:
Consolidated Retained Earnings:
Retained Earnings acquired ($145,000) + Bowie Ltd’s Retained Earnings ($655,000) = $800,000
Less: Elimination of Bowie Ltd’s equity balances:
Bowie Ltd’s Retained Earnings ($655,000)
Bowie Ltd’s Share Capital ($500,000)
Bowie Ltd’s General Reserve ($150,000)
= ($1,305,000)
Consolidated Retained Earnings: ($505,000)
(b) Elimination of intercompany balances and transactions:
(i) Plant sold by David Ltd to Bowie Ltd:
Consolidated Inventory:
David Ltd’s inventory ($0 + $12,000 + $9,000) + Bowie Ltd’s inventory ($34,000) = $55,000
Less: Intercompany transfer of plant:
Plant held by Bowie Ltd ($125,000)
Profit on sale: ($10,000) (i.e., $125,000 - $115,000)
Consolidated inventory: $20,000
(ii) Depreciation on plant:
Consolidated Depreciation Expense: $20,400 (i.e., $102,000 × 20% × 6/12)
Consolidated Accumulated Depreciation: $20,400 (i.e., $102,000 × 20% × 6/12)
(iii) Interest expense and income on loan:
Consolidated Interest Expense: $32,500 (i.e., $425,000 × 15% × 9/12)
Consolidated Interest Income: $32,500 (i.e., $425,000 × 15% × 9/12)
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Can you really answer the question of whether an opportunity is real before developing a product concept?
Answer:
Yes
Explanation:
For example, it has been said that what prompted e-commerce on platforms such as Amazon, eBay, etc was a result of the opportunity their founders saw with the invention/adoption of the internet.
In other words, they saw a real opportunity (through the internet growth rate) and thus decided to develop a product concept. Hence, we could thus conclude with a yes to the question.
It is a strong drive to achieve goals and objectives through focus and proactive follow-through.
a.
Consistency
b.
Coordination
c.
Competence
d.
Commitment
Answer:
C
Explanation:
Competence gives you the ability or skill to do something
People that can influence a consumer’s decision making process are called:
A. Reference groups
B. Influencers
C. Instructors
D. Annoying
Answer:
B
Explanation:
People that can influence a consumer’s decision making process are called influencers.
You own a $46,000 portfolio comprised of four stocks. The values of Stocks A, B, and C are $6,600, $16,700, and $11,400, respectively. What is the portfolio weight of Stock D
According to the question, the portfolio weight of Stock D is approximately 24.57%.
To find the portfolio weight of Stock D, we need to divide the value of Stock D by the total value of the portfolio.
Total value of the portfolio = Sum of values of all stocks
Total value of the portfolio = Value of Stock A + Value of Stock B + Value of Stock C + Value of Stock D
Given values:
Value of Stock A = $6,600
Value of Stock B = $16,700
Value of Stock C = $11,400
Since the total value of the portfolio is $46,000, we can now calculate the value of Stock D:
Value of Stock D = Total value of the portfolio - (Value of Stock A + Value of Stock B + Value of Stock C)
Value of Stock D = $46,000 - ($6,600 + $16,700 + $11,400)
Value of Stock D = $46,000 - $34,700
Value of Stock D = $11,300
Now, to find the portfolio weight of Stock D, we divide the value of Stock D by the total value of the portfolio:
Portfolio weight of Stock D = (Value of Stock D / Total value of the portfolio) * 100
Portfolio weight of Stock D = ($11,300 / $46,000) * 100
Portfolio weight of Stock D = 0.2457 * 100
Portfolio weight of Stock D = 24.57%
So, the portfolio weight of Stock D is approximately 24.57%.
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Which of the following is not an example of professional behavior
?
An article in a newspaper explains that a new business is about to open.
Answer:
So what's the question......??????
The following monthly data are taken from Ramirez Company at July 31: Sales salaries, $460,000; Office salaries, $92,000; Federal income taxes withheld, $138,000; State income taxes withheld, $31,000; Social security taxes withheld, $34,224; Medicare taxes withheld, $8,004; Medical insurance premiums, $11,000; Life insurance premiums, $8,000; Union dues deducted, $5,000; and Salaries subject to unemployment taxes, $58,000. The employee pays 40% of medical and life insurance premiums. Assume that FICA taxes are identical to those on employees and that SUTA taxes are 5.4% and FUTA taxes are 0.6%.
Record the accrued employer payroll taxes and all other employer-paid expenses and the cash payment of all liabilities for July-assume that FICA taxes are identical to those on employees and that SUTA taxes are 5.4% and FUTA taxes are 0.6%
a. Record all employer's payroll expenses and liabilities for the month of July.
b. Record the employer's benefit expense.
c. Record the cash payment of all liabilities related to the July payroll.
a. Record all employer's payroll expenses and liabilities for the month of July:
Sales Salaries Expense: $460,000
Office Salaries Expense: $92,000
Social Security Taxes Payable: $34,224
Medicare Taxes Payable: $8,004
Medical Insurance Premiums Expense: $11,000
Life Insurance Premiums Expense: $8,000
Union Dues Expense: $5,000
Salaries Subject to Unemployment Taxes: $58,000
State Income Taxes Payable: $31,000
Federal Income Taxes Payable: $138,000
b. Record the employer's benefit expense:
Employee-paid Medical Insurance Premiums: $11,000 * 40% = $4,400
Employee-paid Life Insurance Premiums: $8,000 * 40% = $3,200
Employer's Benefit Expense:
Medical Insurance Premiums Expense: $11,000 - $4,400 = $6,600
Life Insurance Premiums Expense: $8,000 - $3,200 = $4,800
c. Record the cash payment of all liabilities related to the July payroll:
Cash Paid for:
Social Security Taxes: $34,224
Medicare Taxes: $8,004
State Income Taxes: $31,000
Federal Income Taxes: $138,000
SUTA Taxes (5.4% of Salaries Subject to Unemployment Taxes): 0.054 * $58,000 = $3,132
FUTA Taxes (0.6% of Salaries Subject to Unemployment Taxes): 0.006 * $58,000 = $348
Total Cash Payment: $34,224 + $8,004 + $31,000 + $138,000 + $3,132 + $348 = $214,708
Therefore, the cash payment of all liabilities related to the July payroll is $214,708.
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Your factory has been offered a contract to produce a part for a new printer. The contract would last for 3 years and your cash flows from the contract would be $ 4.85 million per year. Your upfront setup costs to be ready to produce the part would be $ 8.16 million. Your discount rate for this contract is 8.3 %.
What does the NPV rule say you should do?
If you take the contract, what will be the change in the value of your?firm?
The calculated NPV of the project is negative, indicating that the project's expected cash flows are insufficient to recover the initial investment, taking into account the discount rate. According to the NPV rule, with a negative NPV, you should reject the contract.
The NPV (Net Present Value) rule states that a project or investment should be accepted if its NPV is positive and rejected if its NPV is negative.
To determine whether you should take the contract, we need to calculate the NPV of the project. The NPV is calculated by subtracting the initial investment (setup costs) from the present value of the expected cash flows over the contract's duration.
Given:
Cash flows from the contract per year = $4.85 million
Contract duration = 3 years
Upfront setup costs = $8.16 million
Discount rate = 8.3%
First, we calculate the present value factor using the discount rate:
PV Factor = 1 / (1 + discount rate)^n
where n is the number of years.
PV Factor = 1 / (1 + 0.083)^3
= 0.73503
Next, we calculate the present value of the expected cash flows:
Present Value of Cash Flows = Cash flows per year * PV Factor
= $4.85 million * 0.73503
= $3.573 million (rounded to the nearest thousand)
Finally, we calculate the NPV:
NPV = Present Value of Cash Flows - Initial Investment
= $3.573 million - $8.16 million
= -$4.587 million (rounded to the nearest thousand.
The calculated NPV of the project is negative, indicating that the project's expected cash flows are insufficient to recover the initial investment, taking into account the discount rate. According to the NPV rule, with a negative NPV, you should reject the contract.
If you reject the contract, the change in the value of your firm would not be affected by the contract since you would not undertake it.
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