Carmaker Kia has used its 10-year/100.000 mile warranty program to improve consumer perceptions of the reliability of its vehicles, they are clearly using positioning marketing strategy, they are trying to position their vehicles giving a benefit others wouldn´t give, such as a long warranty, and at the same time offer a competitive price so clients would need to think and balance, price, benefits and quality.
Answer:
d. $520,000
Explanation:
Provided information,
Activities Cost Cost drivers
Tooling $500,000 25 setups
Processing $2,000,000 20,000 direct labors
Resources $800,000 40,000 square feet
Rate per activity
Tooling = 
Processing = 
Resources = 
Information for Product D
3 setups = 3 
$20,000 = $60,000
3,000 direct labor hours = 3,000 $100 = $300,000
8,000 square feet = 8,000 $20 = $160,000
Total overhead cost assigned = $60,000 + $300,000 + $160,000 = $520,000
Answer:
$6.3 per share
Explanation:
There are two method of Valuation of the firm
- Weighted average cost of the capital (WACC)
- Free cash flow to equity (FCFE)
We have to calculate the value of the firm using FCFE. Free cash flow to equity (FCFE) is the amount of cash flow generated by the business and potentially available for distribution among the stockholders.
Value of firm = Free cash flow / required rate of return = $120,000 / 12% = $1,000,000
Market value of Equity = Total value of firm - Market value of Debt - Market value of Preferred share
Market value of Equity = $1,000,000 - $300,000 - $70,000 = $630,000
Value of Patrick's stock = Market Value of equity / shares of stock outstanding = $630,000 / 100,000 = $6.3 per share
Answer:
a) $250,000
b) Zero
c) $6,100
d) $47,500
Explanation:
a) Bloomington owes $250,000 at year-end 2016 for inventory purchase.\
This relates to account payable and the amount to be reported as liability as at year-end 2016 is $250,000.
b)Bloomington agreed to purchase a $31,000 drill press in January 2017.
No liability will be recognized at year-end because the entity has no present obligation as there is no legal or constructive responsibility to pay $31,000. What occurred is just an agreement that can be altered.
c) During November and December of 2016, Bloomington sold products to a customer and warranted them against product failure for 90 days. Estimated costs of honoring this 90-day warranty during 2017 are $6,100.
The entity will recognized $6,100 as warranty payable as the entity has a present obligation as at year-end 2016 to compensate the customer.
d)Bloomington provides a profit-sharing bonus for its executive equal to 5% of reported pretax annual income. The estimated pretax income for 2016 is $950,000. Bonuses are not paid until January of the following year
The entity will report 5% of $950,000 ($47,500) as liability at year-end 2016 as the the entity has a present obligation to settle its executive.
