The normal selling price of Daniel Company's product is $35 per unit. The costs of production are: direct materials, $6; direct labor, $5; variable overhead, $5; and fixed overhead, $6 (based on normal capacity). The company has received a special order for 12,800 units at a unit sales price of $19. There is ample unused capacity to fill the order and $2 per unit will be incurred for additional
packaging. If the order is accepted, operating income will
A) increase by $12,800.
B) decrease by $38,400.
C) increase by $38,400.
D) decrease by $12,800.
A
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Clampett, Inc., converted to an S corporation on January 1, 2019. At that time, Clampett, Inc., had cash ($40,000), inventory (FMV $60,000, basis $30,000), accounts receivable (FMV $40,000, basis $40,000), and equipment (FMV $60,000, basis $80,000). In 2020, Clampett, Inc., sells its entire inventory for $60,000 (basis $30,000). Assume the corporate tax rate is 21 percent and that Clampett Inc.'s taxable income would have been a $50,000 loss in 2020 if it had been a C corporation. In 2021, Clampett, Inc.'s taxable income would have been $100,000 if it had been a C corporation. How much built-in gains tax does Clampett, Inc., pay in 2020? In 2021?
A. $0 in 2020; $0 in 2021. B. $0 in 2020; $10,500 in 2021. C. $10,500 in 2020; $0 in 2021. D. $2,100 in 2020; $0 in 2021. E. None of the choices are correct.
SCENARIO-BASED QUESTIONS Adapting A Message To Different Audiences You have borrowed your boss's car to meet an important client for a working lunch. You are running late for the meeting, so you take an alternative route. You are going a little over the
speed limit, and it is drizzling. As you try to stop at an intersection, you realize that the brakes of the car are not functioning. You slide about 8 feet into the intersection. Before you can do anything, you are hit on the passenger's side. It looks like you may miss lunch altogether. In small groups, consider the previous details and consider how you would relay the information to one of the following audiences assigned to you. Although you may emphasize or de-emphasize certain information or change the order of things, you should not substantially change the basic facts. Also, indicate the channel or medium you may want to select, depending on the audience. Your boss Your co-worker who has been in three accidents during the past year A co-worker who thinks you are a trouble maker A police officer who asks you to recount the events An insurance agent who will be adjusting your rates A lawyer representing you in court and needs to know all the facts A significant other who is behind you and supports you no matter what In a role play situation, retell the story to your assigned audience.
The following information is available for Birch Company at December 31: Money market fund balance$2,790Certificate of deposit maturing June 30 of next year$10,000Postdated checks from customers$1,475Cash in bank account$21,430NSF checks from customers returned by bank$650Cash in petty cash fund$200Inventory of postage stamps$24U.S. Treasury bill purchased on December 15 and maturing on February 28 of following year$5,000Based on this information, Birch Company should report Cash and Cash Equivalents on December 31 of:
A. $41,345 B. $39,420 C. $38,770 D. $31,345 E. $29,420
Edmonco Company produced and sold 45,000 units of a single product last year, with the following results: Sales Revenue$1,350,000 Manufacturing costs: Variable 585,000 Fixed 270,000 Selling costs: Variable 40,500 Fixed 54,000 Administrative costs: Variable 184,500 Fixed 108,000 Edmonco's operating leverage factor was:
A. 4. B. 5. C. 6. D. 7. E. 8.