Answered: Jones Heating Co. 100 Conter St.…

Jones Heating Co. 100 Conter St. Yourtown, PA 18000 Date Salesperson Customer: No. 4285 QUANTITY ITEM PRICE AMOUNT Customers Copy Thank You

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A cooperative that makes value-added products like jams and jellies has voted to purchase a new machine to fill their jars. The machine costs $21,000 and has a investment life of 8 years. The IRS will allow them to depreciate it over 15 years. The marginal tax rate will be 18% over the next 9 years and the inflation rate will be 1.5%. The cooperative requires a 12% pre-tax rate of return and the risk premium is 3%. What is the present value of the tax savings from depreciation? Please select the correct one : $1,314 $1,216 $1,239 $1,261 None of the answers are correct
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Xavi sells seashore paintings. His annual Fixed Costs are $1,000 and the Variable Costs are $8 per painting. Xavi is considering advertising his artwork in a local gallery, the cost of which is $80 per month. What would be the new annual breakeven revenue (in dollars) if he continues to sell his pieces for $15?
Rust Industrial Systems Company is trying to decide between two different conveyor belt systems. System A costs $320,000, has a four-year life, and requires $117,000 in pretax annual operating costs. System B costs $400,000, has a six-year life, and requires $111,000 in pretax annual operating costs. Suppose the company always needs a conveyor belt system; when one wears out, it must be replaced. Assume the tax rate is 21 percent and the discount rate is 10 percent. Calculate the EAC for both conveyor belt systems. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Ron Valdez worked for two different employers. Until May, he worked for Rowland Construction Company in Ames, Iowa, and earned $22,940. The state unemployment rate for Rowland is 4.6%. He then changed jobs and worked for Ford Improvement Company in Topeka, Kansas, and earned $30,360 for the rest of the year. The state unemployment rate for Ford is 5.1%. Determine the unemployment taxes (FUTA and SUTA) that would be paid by each company. Round your answers to the nearest cent. Use Figure 5.1 to determine SUTA caps in Iowa and Kansas. a. Rowland Construction Company $fill in the blank 1 b. Ford Improvement Company $fill in the blank 2
You run a nail salon. Fixed monthly cost is $5,419.00 for rent and utilities, $5,913.00 is spent in salaries and $1,724.00 in insurance. Also every customer requires approximately $5.00 in supplies. You charge $107.00 on average for each service. You are considering moving the salon to an upscale neighborhood where the rent and utilities will increase to $11,155.00, salaries to $6,372.00 and insurance to $2,220.00 per month. Cost of supplies will increase to $6.00 per service. However you can now charge $171.00 per service. At what point will you be indifferent between your current location and the new location? Submit Answer format: Number: Round to: 2 decimal places. A Restaurant is open only for 25 days in a month. Expenses for the restaurant include raw material for each sandwich at $5.00 per slice, $1,103.00 as monthly rental and $219.00 monthly as insurance. They consider the cost of lost sales as $6.00 per item. They are able to sell any leftover sandwiches for $3. They prepares…
William Diesel owns the Fredonia Barber Shop. He employs 5 barbers and pays each a base salary of $1,510 per month. One of the barbers serves as the manager and receives an extra $580 per month. In addition to the base salary, each barber also receives a commission of $8.40 per haircut. Other costs are as follows. Advertising Rent Barber supplies Utilities Magazines William currently charges $18.00 per haircut. (a) Determine the unit variable costs per haircut and the total monthly fixed costs. (Round variable costs to 2 decimal places, e.g. 2.25.) Your answer is correct.. Total unit variable cost per haircut Total fixed costs (b) $300 per month $1,020 per month $0.45 per haircut $150 per month plus $0.15 per haircut $30 per month eTextbook and Media (d) V Your answer is correct. Break-even point Break-even point sales $ Compute the break-even point in sales units and in sales dollars. eTextbook and Media Your answer is incorrect. $ Net income $ $ 1070 19260 9 9630 haircuts Determine…
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The Elberta Fruit Farm of Ontario is considering buying a cherry-picking machine to replace the part-time workers it usually hires to harvest its annual cherry crop. The machine shakes the cherry tree, causing the cherries to fall onto plastic tarps that funnel the cherries into bins. The company gathered the following information: The farm pays part-time workers $200,000 per year to pick the cherries. The cherry picker would cost $540,000, have a 8-year useful life with no salvage value, and be depreciated using the straight-line method. The cherry picker’s annual out-of-pocket costs would be cost of an operator and an assistant, $85,000; insurance, $4,000; fuel, $12,000; and a maintenance contract, $15,000. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: 1. Calculate the annual savings in cash operating costs provided by the cherry picker. 2a. Compute the cherry picker’s simple rate of return. 2b. Would…
A real estate agent is considering changing her land line phone plan. There are three plans to choose from, all of which involve a monthly service charge of $20. Plan A has a cost of $.37 a minute for daytime calls and $.16 a minute for evening calls. Plan B has a charge of $.46 a minute for daytime calls and $.14 a minute for evening calls. Plan C has a flat rate of $75 with 300 minutes of calls allowed per month and a charge of $.34 per minute beyond that, day or evening. a. Determine the total charge under each plan for this case: 130 minutes of day calls and 50 minutes of evening calls in a month. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Cost for Plan A Cost for Plan B Cost for Plan C $ $ $ b. If the agent will only use the service for daytime calls, over what range of call minutes will each plan be optimal? (Round each answer to the nearest whole number. Include the indifference point itself in each answer.) Plan A is optimal from zero to…
In this problem, we consider replacing an existing electrical water heater with an array of solar panels. The net installed investment cost of the panels is $1,470 ($2,100 less a 30% tax credit from the government). Based on an energy audit, the existing water heater uses 220 kilowatt hours (kWh) of electricity per month, so at $0.12 per kWh, the cost of operating the water heater is $26.4 per month. Assuming the solar panels can save the entire cost of heating water with electricity, answer the following questions. a. What is the simple payback period for the solar panels? b. What is the IRR of this investment if the solar panels have a life of 9 years?
Dr. MaGoo performs laser surgery to correct eye vision. He charges $800 for eye surgery (for a pair of eyes): Variable cost per eye surgery (per pair of eyes) are: Medical Supplies $35.00 Nurses time 65.00 Utilities for the machine 10.50 Variable marketing and administrative costs 24.50 The income tax rate is 30% Fixed overhead cost is $100,000 per year. Fixed selling and administrative costs are $25,000 per year. Dr. MaGoo performed 400 corrective eye surgeries last year. a. What is the contribution margin per eye surgery? b. Suppose that Dr. MaGoo wants to make a profit (after tax) of $100,000, how many eye surgeries must be sold? (Round to nearest dollar for tax calculation) c. Suppose that Dr. MaGoo has another option available, which uses a scalpel (cut and sew option) rather than the laser (laser option). This option reduces the fixed costs by $49,950 per year and increases variable cost by $150 per surgery. Assume 333 is the number…