BUS 650 Week 1 Assignment – Financial Management Challenges (A+ Guaranteed)

Assignments
1. Due by Day 7. Financial Management Challenges. The following video discusses the four types of markets: perfect competition, monopolistic competition, oligopoly, and monopoly.

Video 2.1: Market Structures

Given the market structures as described in the video, find at least two articles from the ProQuest database that highlight and discuss two of the biggest challenges facing financial managers today in these varied market structures. Summarize your findings from the articles in a three to five page paper excluding title page and references page(s). Include how market liquidity, competitiveness, and efficiency impact financial managers.

The paper should be formatted according to APA style as outlined in the Ashford Writing Center. Be sure to properly cite your resources using APA style.

Here’s the SOLUTION

Posted in Homework Help | Comments Off

As one of the audit associates working on the account of Joemeriz Inc (A+ Guaranteed)

As one of the audit associates working on the account of Joemeriz Inc., you are required to examine the company’s computations of earnings per share (EPS). Below is the computations the company provided on how its controller calculated EPS.

Net Income $3,374,900
EPS =         $3,374,900
1,242,000*
= $2.72 per share
* Common shares  issued and outstanding, 1/1        1,284,000
Common shares  issued and outstanding, 12/31    1,200,000
Average common shares  issued and outstanding    1,242,000
(Beginning + Ending/2)
You also have the following information:
1.    The company has no preferred shares.
2.    The company has no options or warrants on the common shares.
3.    The company has no convertible debt securities.
The common shares activities for the year include:
Date                     Description                                             Number
January 1             Outstanding balance                              1,284,000
October  1            Treasury stock acquired by Joemeriz    1,039,500
December  1        Shares reissued                                      1,165,000
December 31       Outstanding balance                              1,200,000

Required
a. State whether or not you agree with the controller’s computation of EPS. Be sure to support why you agree or disagree with the computation If you don’t agree, correctly compute Joemeriz’ EPS.

b. Assume the same facts as the ones above except that the company now issues options to purchase 140,000 common stock at $10 per share. The options were issued and outstanding since January 1 but none has been exercised or canceled. The average market price of common stock for the year was $25 while the December 31 market price was $35. Compute Joemeriz’ EPS if the options are taken into consideration.

Hint: a is EPS while b is dilutive EPS.

Here’s the SOLUTION

 

Posted in Homework Help | Comments Off

MRI Company has one employee (A+)

MRI Company has one employee. FICA Social Security taxes are 6.20% of the first $106,800 paid to its employee, and FICA Medicare taxes are 1.45% of gross pay. For MRI, its FUTA taxes are 0.80% and SUTA taxes are 2.90% of the first $7,000 paid to its employee.

Gross Pay through August Gross Pay for September

a. $5,900 $ 1,600

b. 17,700 2,700

c. 103,000 11,800

Required:

a) Compute MRI’s amounts for each of the above four taxes as applied to the employee’s gross earnings for September under situation (a).

b) Compute MRI’s amounts for each of the above four taxes as applied to the employee’s gross earnings for September under situation (b).

c) Compute MRI’s amounts for each of the above four taxes as applied to the employee’s gross earnings for September under situation (c).

Click here for the SOLUTION

Posted in Homework Help | Comments Off

Santana Rey receives the March bank statement for Business Solutions on April 11, 2012 (A+)

Santana Rey receives the March bank statement for Business Solutions on April 11, 2012. The March 31 bank statement shows an ending cash balance of $67,466. A comparison of the bank statement with the general ledger Cash account, No. 101, reveals the following.

a. S. Rey notices that the bank erroneously cleared a $430 check against her account in March that she did not issue. The check documentation included with the bank statement shows that this check was actually issued by a company named Business Systems.

b. On March 25, the bank issued a $50 debit memorandum for the safety deposit box that Business Solutions agreed to rent from the bank beginning March 25.

c. On March 26, the bank issued a $105 debit memorandum for printed checks that Business Solutions ordered from the bank.

d. On March 31, the bank issued a credit memorandum for $38 interest earned on Business Solutions\’ checking account for the month of March.

e. S. Rey notices that the check she issued for $130 on March 31, 2012, has not yet cleared the bank.

f. S. Rey verifies that all deposits made in March do appear on the March bank statement.

g. The general ledger Cash account, No. 101, shows an ending cash balance per books of $67,883 as of March 31

Required:

1. Prepare a bank reconciliation for Business Solutions for the month ended March 31, 2012.

2. Prepare any necessary adjusting entries. Use Miscellaneous Expenses, for any bank charges. Use Interest Revenue, for any interest earned on the checking account for the month of March.

Click here for the SOLUTION

Posted in Homework Help | Comments Off

Cruz Company deposits all cash receipts on the day when they are received and it makes all cash payments by check (A+)

Cruz Company deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on June 30, 2011, its Cash account shows an $11,352 debit balance. Cruz’s June 30 bank statement shows $10,332 on deposit in the bank.

a. Outstanding checks as of June 30 total $1,713.

b. The June 30 bank statement included a $23 debit memorandum for bank services; Cruz has not yet recorded the cost of these services.

c. In reviewing the bank statement, a $90 check written by Cruz Company was mistakenly recorded in Cruz Company’s books at $99.

d. June 30 cash receipts of $2,724 were placed in the bank’s night depository after banking hours and were not recorded on the June 30 bank statement.

e. The bank statement included a $5 credit for interest earned on the cash in the bank.

Required:

1 Prepare a bank reconciliation for Cruz Company using the above information.

Click here for the SOLUTION

Posted in Homework Help | Comments Off

6. Pizza Pizzazz is a local restaurant (A+)

Pizza Pizzazz is a local restaurant. Price and cost information follows:

Price per pizza $13.91

Variable cost per pizza

Ingredients 2.34

Direct labor 1.19

Overhead (box, etc.) 0.16

Fixed cost per month $3,577.00

Required:

1 Determine Pizza Pizzazz’s break-even point in units and sales dollars.

2 Determine the restaurant’s margin of safety if it currently sells 440 pizzas per month.

3 Determine the number of pizzas that Pizzazz must sell to generate $2,800 in profit.

Click here for the SOLUTION

Posted in Homework Help | Comments Off

3. Blue Star makes three models of camera lens (A+)

Blue Star makes three models of camera lens. Its sales mix and contribution margin per unit follow:

Percentage of

Total sales CM per unit

Lens A 29% $38

Lens B 41 30

Lens C 30 43

Required

1 Determine the weighted average contribution margin

2 Determine the number of units of each product that Blue Star must sell to break even if fixed costs are $190,000.

3 Determine how many units of each product must be sold to generate a profit of $63,000.

Click here for the SOLUTION

Posted in Homework Help | Comments Off

5. Pizza Pizazz is a local restaurant (A+)

Pizza Pizazz is a local restaurant. Price and cost information follows:

Price per pizza $14.41

Variable cost per pizza:

Ingredients 2.21

Direct labor 1.04

Overhead (box, etc.) .21

Fixed cost per month $4,599.00

Required

1 Calculate Pizza Pizzazz’s new break-even point under each of the following independent scenarios

a. Sales price increases by $1.20 per pizza.

b. Fixed costs increase by $525.00 per month.

c. Variable costs decrease by $.30 per pizza.

d. Sales price decreases by $.30 per pizza.

2 Assume that Pizza Pizzazz sold 450 pizzas last month. Calculate the company’s degree of operating leverage.

3 Using the degree of operating leverage calculate the impact on profit caused by a 7.00 percent increase in sales revenue.

Click here for the SOLUTION

Posted in Homework Help | Comments Off

Nova Company’s total overhead costs at various levels of activity are presented below (A+)

Nova Company’s total overhead costs at various levels of activity are presented below:

Month Machine Hours Total Overhead Cost

April 80,000 $197,900

May 70,000 $189,200

June 90,000 $222,000

July 100,000 $253,100

Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 70,000 machine-hour level of activity is:

Utilities (variable) $48,300

Supervisory salaries (fixed) 20,400

Maintenance (mixed) 120,500

Total overhead cost $189,200

Nova Company’s management wants to break down the maintenance cost into its variable and fixed cost elements.

Required:

1) Estimate how much of the $253,100 of overhead cost in July was maintenance cost.

2) Using the high-low method, estimate a cost formula for maintenance.

Click here for the SOLUTION

Posted in Homework Help | Comments Off

Amfac Company manufactures a single product (A+)

Amfac Company manufactures a single product. The company keeps careful records of manufacturing activities from which the following information has been extracted:

Level of Activity

March−Low June−High

Number of units produced 10,800 14,400

Cost of goods manufactured $411,400 $558,700

Work in process inventory, beginning $14,200 $22,200

Work in process inventory, ending $25,200 $15,500

Direct materials cost per unit $20 $20

Direct labor cost per unit $8 $8

Manufacturing overhead cost, total ? ?

The company\’s manufacturing overhead cost consists of both variable and fixed cost elements. To have data available for planning, management wants to determine how much of the overhead cost is variable with units produced and how much of it is fixed per month.

Required:

1) For both March and June, estimate the amount of manufacturing overhead cost added to production. The company had no underapplied or overapplied overhead in either month.

2) Using the high-low method, estimate a cost formula for manufacturing overhead where X represents the number of units produced.

3) If 11,300 units are produced during a month, what would be the cost of goods manufactured?

Click here for the SOLUTION

Posted in Homework Help | Comments Off