Will, Max and Isaac are brothers and owners of Wood Toys of Yesterday, a company specializing in handmade wood toys typical of the late 1800's. The business had been a part-time enterprise when a national magazine did an October cover story on the company and sales rose by 200% over their normal holiday increase. Make suggestions to them for the company to survive this rapid increase in growth especially considering the nature of their business and the timing of the increase.
What will be an ideal response?
Will and Matt should consider the following items.
1. Can the company find enough inventory to fill the orders especially considering it is October?
2. Does the company have enough cash to avoid a growth trap? Since the cost of inventory and accounts receivable may increase, can the company pay vendors before they receive payment from buyers? Do the brothers need to talk to a lender for financing until the company is paid?
3. Can the company add employees trained in wood carving to cover the orders? Can the current employees (if they have any) handle an increased workload?
4.Will the management style(s) of the brothers be able to stand the change for them to still be speaking at the next family meal and for their employees be happy?
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Dan Jones and Pat Smith are two employees of Lone Star Company. In January 2019, Dan's gross pay was $11,500, and Pat's gross pay was $15,400. All earnings are subject to FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%. Which of the following would be included in the entry to record the payroll tax expense to be paid out by Lone Star Company for January?
A) a debit to Salaries Payable to employees for $390.05 B) a debit to FICA-OASDI Taxes Payable for $390.05 C) a credit to FICA-Medicare Taxes Payable for $390.05 D) a credit to Salaries Expense for $390.05
The state of Illinois has passed a law requiring that every automobile be inspected at least once a year for pollution control. Anfang Enterprises is considering entering into this type of business. After extensive studies, Joseph Anfang has developed the following set of projected annual data on which to make his decision: Direct service labor $363,000.00 Variable service overhead costs
270,000.00 Fixed service overhead costs 280,000.00 Marketing expenses 120,000.00 General and administrative expenses 170,000.00 Minimum profit 90,000.00 Cost of assets employed 500,000.00 Anfang believes that his company will inspect 100,000 automobiles per year. The company earns an average of 18.75 percent return on its assets. The price to be charged for inspecting each automobile using the gross margin pricing method would be calculated as follows: a. ($1,203,000.00 ÷ 100,000) + [($1,203,000.00 ÷ 100,000) ? ($90,000 ÷ $1,203,000.00)] b. ($1,203,000.00 ÷ 100,000) + [($500,000 ÷ 100,000) ? 0.1875] c. ($913,000.00 ÷ 100,000) + {($913,000.00 ÷ 100,000) ? [($90,000 + $290,000) ÷ $913,000.00]} d. None of these
Communication is the process of transmitting ______.
a. data and concepts b. information and meaning c. words and images d. facts and opinions
Wintergreen Products allocates overhead based on direct labor hours. During 2011 overhead was overapplied by $4,000. Assuming that the year-end adjustment to clear out the overapplied overhead has not yet been done, which of the following statements is most likely true if there are no ending inventories?
A) Direct material costs are understated B) Direct labor costs are understated C) Cost of goods sold is overstated D) Net income is overstated