[The following information applies to the questions displayed below.] Assume the perpetual inventory system is used. 1) Green Company purchased merchandise inventory that cost $64,000 under terms of 2/10, n/30 and FOB shipping point. 2) Green Company paid freight cost of $2,400 to have the merchandise delivered. 3) Payment was made to the supplier on the inventory within 10 days. 4) All of the merchandise was sold to customers for $94,000 cash and delivered under terms FOB destination with freight cost amounting to $1,600. What is the amount of gross margin that results from these transactions?
A. $28,880
B. $27,280
C. $31,280
D. $29,680
Answer: A
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Under the indirect method, an increase in Accounts Receivable must be added to net income when computing cash from operating activities
a. True b. False Indicate whether the statement is true or false
Frequent changes to an MRP system cause the ______.
a. generation of firm planned orders b. production of exception reports c. shutdown of the MRP system d. nervousness in the MRP system
The internal rate of return for the project is ________. (See Table 11.5)
Table 11.5 Nuff Folding Box Company, Inc. is considering purchasing a new gluing machine. The gluing machine costs $50,000 and requires installation costs of $2,500. This outlay would be partially offset by the sale of an existing gluer. The existing gluer originally cost $10,000 and is four years old. It is being depreciated under MACRS using a five-year recovery schedule and can currently be sold for $15,000. The existing gluer has a remaining useful life of five years. If held until year 5, the existing machine's market value would be zero. Over its five-year life, the new machine should reduce operating costs (excluding depreciation) by $17,000 per year. Training costs of employees who will operate the new machine will be a one-time cost of $5,000 which should be included in the initial outlay. The new machine will be depreciated under MACRS using a five-year recovery period. The firm has a 12 percent cost of capital and a 40 percent tax on ordinary income and capital gains. A) between 7 and 8 percent B) between 9 and 10 percent C) greater than 12 percent D) between 10 and 11 percent
Greater firm profitability results from engaged employees because they
A. feel less threatened. B. are more productive and customer-focused. C. focus on important features of the business. D. require less supervision.