Kramer Enterprises reports year ed information as follows.. Sales (160,000 units) = 960,000 COGS= 640,000 Gross margin= 320,000 Operating expenses= 260,000 Operating income= 60,000

Kramer is developing the 2016 budget. in 2016 the company would like to increase selling prices by 12.5%, and as a result expects a decrease in sales volume by 9%. All other operating expesnes are expected to remain constant. Assume that costs of goods sold is a variable cost and that operating expenses are a fixed cost..

1. What is the budgeted sales for 2016?

a. 1,080,000...

b. 1,000,000...

c. 982,800...

d. 873,600...

2. What is the budgeted COGS for 2016?

a. 720,000...

b. 582,400...

c. 691,200...

d. 640,000...

3. Should Kramer increase the selling price?

a. Yes, because operating income increases for 2016...

b. Yes, because sales revenue increases for 2016

c. No, because sales volume decreases for 2016...

d. No, because gross margin decreases for 2016...

If a firm plans to issue new stock, flotation costs (investment bankers' fees) should not be ignored. there are two approaches to use to account for flotation costs. the first approach is to add the sum of flotation costs for the debt, preferred, and common stock and add them to the initial investment cost. because the investment cost is increased, the project's expected return is reduced so it may not meet the firm's hurdle rate for acceptance of the project. the second approach involves adjusting the cost of common equity as follows: . the difference between the flotation-adjusted cost of equity and the cost of equity calculated without the flotation adjustment represents the flotation cost adjustment. quantitative problem: barton industries expects next year's annual dividend, d1, to be $1.90 and it expects dividends to grow at a constant rate g = 4.3%. the firm's current common stock price, p0, is $22.00. if it needs to issue new common stock, the firm will encounter a 6% flotation cost, f. assume that the cost of equity calculated without the flotation adjustment is 12% and the cost of old common equity is 11.5%. what is the flotation cost adjustment that must be added to its cost of retaine

Acompany that makes shopping carts for supermarkets and other stores recently purchased some new equipment that reduces the labor content of the jobs needed to produce the shopping carts. prior to buying the new equipment, the company used 6 workers, who produced an average of 79 carts per hour. workers receive $16 per hour, and machine coast was $49 per hour. with the new equipment, it was possible to transfer one of the workers to another department, and equipment cost increased by $11 per hour while output increased by four carts per hour. a) compute the multifactor productivity (mfp) (labor plus equipment) under the prior to buying the new equipment. the mfp (carts/$) = (round to 4 decimal places). b) compute the productivity changes between the prior to and after buying the new equipment. the productivity growth = % (round to 2 decimal places)

Perez, inc., applies the equity method for its 25 percent investment in senior, inc. during 2018, perez sold goods with a 40 percent gross profit to senior, which sold all of these goods in 2018. how should perez report the effect of the intra-entity sale on its 2018 income statement?