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What % of the portfolio should be invested in treasury bills?

You are considering investing $1,000 in a complete portfolio. The complete portfolio is composed of treasury bills that pay 5% and a risky portfolio, P, constructed with 2 risky securities X and Y. The weight of X and Y in portfolio, P, are 60% and 40% respectively. X has an expected rate of return of 14% and Y has an expecte

Manufacturing Methods

Candice Company has decided to introduce a new product. The new product can be manufactured by either a capital intensive method or labor intensive method. The manufacturing method will not affect the quality of the product. The estimated manufacturing costs by the two methods are as follows. Capital Intensive Labor In

Advantages, disadvantages of Cost Centre managers or Profit Centre managers

Your Company operates in 25 countries around the world and have diverse products, service and business portfolio. Your are looking at ways to maximise profits for your company as a whole and as such, you are investigating different ways to measure the performance of individual managers who each have responsibility for one part

Calculating EPS under different options

Santos, Inc. currently has no debt and 30,000 shares outstanding. Current share price is $12. Management projects that EBIT is $36,000 if the economic condition is normal (the probability is 0.5), $45,000 if the economy is strong (probability 20%), and $27,000 if a recession occurs (probability 30%). Santos is considering

Events Occurred for Favata Company

The following events occurred for Favata Company: a. Received $20,000 cash by organizers and issued stock to them. b. Borrowed $6,000 cash from a bank. c. Purchased land for $12,000; paid $1,000 in cash and signed a note for the balance. d. Loaned $300 to an employee who signed a note. e. Purchased $8,000 of equipment, payi

Quantitative Reasoning

1. a.Sales in 2000 were 125 million; sales in 2005 were 275. What is the "percent of sales" in 2005 as compared to 2000? b.What is the percent increase of sales from 2000 to 2005. c.What would 2005 sales have to be to make the percent change 150%? 2. a.Using the CPI factors find the "real" sales (in mil

Manufacturing overhead cost

Level of Activity January-Low April High Number of units produced $12,000.00 $15,000.00 Cost of goods manufactured $250,000.00 $300,000.00 Work in process inventory, beginning $5,000.00 $16,000.00 Work in process inventory, ending $6,000.00 $9,000.00 Direct materials cost per unit $4.00 $4.0

The Huffman Corp: Change in Income

Please help with the following accounting problem. The Huffman Corporation manufactures a single product with the following full unit costs at a volume of 2,000 units: Direct materials $ 400 Direct labor $ 160 Manufacturing overhead (30% variable) $ 300 Selling expenses (50% variable) $ 150 Administrative expenses (10

Shateria of Zurich: Compute Net Operating Income & Others

Shateria of Zurich, Switzerland, has just introduced a new fashion watch for which the company is trying to find an optimal selling price. Marketing studies suggest that the company can increase sales by 5,000 units for each SFr2 per unit reduction in the selling price. (SFr2 denotes 2 Swiss francs.) The company's present sellin

Email message corrections

Hi, Can someone review the below e-mail and make any suggestions/comments on how to improve the flow of the e-mail? Thanks. Hi Darren, I've been working on the Related Party Reconciliation and I am still continuing to understand and learn about the activity that is posted to this account for the off balance sheet pools.

Practice Problem - Hum Division of the Ho Company

The Hum Division of the Ho Company reported the following data for last year: Sales $800,000 Operating expenses $650,000 Interest expense $50,000 Tax expense $30,000 Stockholders' equity $200,000 Average operating assets $600,000 Minimum required rate of return 12% 9(b). The residual income for the Hum

Acton Company has two products: A and B. Compute overhead rate & cost per unit

Acton Company has two products: A and B. The annual production and sales of Product A is 800 units and of Product B is 500 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. The company is considering switching to an activity-based costing system for th

Make incremental analysis for special order

I am severely confused by the problem, if you can just help me pinpoint what to do. P7-1A Pro Sports Inc. manufactures basketballs for the National Basketball Association (NBA). For the first 6 months of 2008, the company reported the following operating results while operating at 90% of plant capacity and producing 112,500

Conventional Product costs and ABC accounting

Computing unit product costs for two products using a conventional costing system and also computing using an activity based costing system. --------------------------- A company makes two products and uses a conventional costing system in which a single plantwise predetermined overhead rate is computed based on direct la

Customer-Profitability Analysis for Five Designated Customers

5 66 1. Caltex computer, operating income: $14,000 FiberCom, Inc. manufactures fiber optic cables for the computer and telecommunications industries. At the request of the company vice president of marketing, the cost management staff has recently completed a customer-profitability study. The following activity-based costing


1. Efficient portfolios are portfolios that: (A) Offer the highest rate of return for the same amount of risk. (B) Offer the lowest rate of return for the same amount of risk. (C) Offer the lowest amount of risk for the same amount of return. (D) Both A and C 2. If IS and DS are combined in a portfolio with 50% invested i

Returns and returns

1. A security has an expected return of 10% and a standard deviation of .03. If the security is normally distributed, about 68% of the time the security return will be: (A) Between 4% and 10%. (B) Between 7% and 10%. (C) Between 7% and 13%. (D) Between 10% and 13% 2. Kids Toy Co. has had total returns over the past five y

State of the Economy [2]

Idaho Slopes (IS) and Dakota Steppes (DS) are both seasonal businesses. IS is a downhill skiing facility, while DS is a tour company that specializes in walking tours and camping. The returns on each company over the next year are expected to be: Economy; Idaho Slopes; Dakota Steppes Strong Downturn; -10%; 2% Mild

Computing taxable income for current year

The following differences between financial and taxable income were reported by Dider Corporation for the current year. (a) Excess of tax depreciation over book depreciation $60,000 (b) Interest revenue on municipal bonds 9,000 (c) Excess of estimated warranty expense over actual exp

Fixed and Variable costs

A firm has fixed costs of $60 and varable costs as indicated in the table below. Complete the table. (a) Graph total fixed cost, total varable cost, and total cost. Explain how the law of diminishing returns influences the shapes of the variable-cost and total-cost curves. (b) Graph AFC, AVC ATC and MC. Explain the derivat

Accounting Software Memo

Please, I need help writing a memo for the assignment below. Your department's accounting software is extremely outdated, and you have included the purchase of new software in this year's fiscal budget. You have decided it is time to start looking into purchasing your company's accounting software and have chosen someone in y

Hachey Company: Uncollectibles and Bad Debts Expense

Hachey Company has accounts receivable of $95,100 at March 31, 2007. An analysis of the accounts shows these amounts. Prepare entries for recognizing accounts receivable. Balance, March 31 Month of Sale 2007 2006 March $65,000 $75,000 February 12,600 8,000 December and Janu