Magnolia Manufacturing makes wing components for large aircraft. Kevin Choi is the production manager, responsible formanufacturing, and Michelle Michaels is the marketing manager. Both managers are paid a flat salary and are eligible for a bonus. Thebonus is equal to 1 percent of their base salary for every 10 percent profit that exceeds a target. The maximum bonus is 5 percent ofsalary. Kevin's base salary is $270,000 and Michelle's is $330,000.The target profit for this year is $9 million. Kevin has read about a new manufacturing technique that would increase annual profit by20 percent. He is unsure whether to employ the new technique this year, walt, or not employ it at all. Using the new technique will notaffect the target.Required:a. Suppose that profit without using the technique this year will be $9 million. By how much will Kevin's and Michelle's bonus change ifKevin decides to employ the new technique?b. Suppose that profit without using the technique this year will be $11.5 million. By how much will Kevin's and Michelle's bonus changeif Kevin decides to employ the new technique?Complete this question by entering your answers in the tabs below.Required A Required BSuppose that profit without using the technique this year will be $11.5 million. By how much will Kevin's and Michelle's bonuschange if Kevin decides to employ the new technique? (Round your intermediate percentage answers to nearest wholepercent. Enter your answers in dollars, not in millions.)Bonus ChangeKevin'sMichelle's< Required ARequired B > Magnolia Manufacturing makes wing components for large aircraft. Kevin Choi is the production manager, responsible formanufacturing, and Michelle Michaels is the marketing manager. Both managers are paid a flat salary and are eligible for a bonus. Thebonus is equal to 1 percent of their base salary for every 10 percent profit that exceeds a target. The maximum bonus is 5 percent ofsalary. Kevin's base salary is $270,000 and Michelle's is $330,000.The target profit for this year is $9 million. Kevin has read about a new manufacturing technique that would increase annual profit by20 percent. He is unsure whether to employ the new technique this year, wait, or not employ it at all. Using the new technique will notaffect the target.Required:a. Suppose that profit without using the technique this year will be $9 million. By how much will Kevin's and Michelle's bonus change ifKevin decides to employ the new technique?b. Suppose that profit without using the technique this year will be $11.5 million. By how much will Kevin's and Michelle's bonus changeIf Kevin decides to employ the new technique?Complete this question by entering your answers in the tabs below.Required A Required BSuppose that profit without using the technique this year will be $9 million. By how much will Kevin's and Michelle's bonuschange if Kevin decides to employ the new technique? (Enter your answers in dollars, not in millions.)Bonus ChangeKevin'sMichelle's< Required ARequired B >

Information Provided: Kevin Base salary = $270,000 Michelle Base salary = $330,000 Maximum bonus =…

Answered: Required: a. Suppose that profit…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Magnolia Manufacturing makes wing components for large aircraft. Kevin Choi is the production manager, responsible for manufacturing, and Michelle Michaels is the marketing manager. Both managers are paid a flat salary and are eligible for a bonus. The bonus is equal to 1 percent of their base salary for every 10 percent profit that exceeds a target. The maximum bonus is 5 percent of salary. Kevin’s base salary is $180,000 and Michelle’s is $240,000. The target profit for this year is $6 million. Kevin has read about a new manufacturing technique that would increase annual profit by 20 percent. He is unsure whether to employ the new technique this year, wait, or not employ it at all. Using the new technique will not affect the target. Required: a. Suppose that profit without using the technique this year will be $6 million. By how much will Kevin’s and Michelle’s bonus change if Kevin decides to employ the new technique? b. Suppose that profit without using the technique this year…
Magnolia Manufacturing makes wing components for large aircraft. Kevin Choi is the production manager, responsible for manufacturing, and Michelle Michaels is the marketing manager. Both managers are paid a flat salary and are eligible for a bonus. The bonus is equal to 1 percent of their base salary for every 10 percent profit that exceeds a target. The maximum bonus is 6 percent of salary. Kevin's base salary is $330,000 and Michelle's is $390,000. The target profit for this year is $5 million. Kevin has read about a new manufacturing technique that would increase annual profit by 20 percent. He is unsure whether to employ the new technique this year, wait, or not employ it at all. Using the new technique will not affect the target. Required: a. Suppose that profit without using the technique this year will be $5 million. By how much will Kevin's and Michelle's bonus change if Kevin decides to employ the new technique? b. Suppose that profit without using the technique this year will…
Pinnacle Consulting employs two CPAs, each having a different area of specialization. Judy specializes in tax consulting and Steve specializes in management consulting. Pinnacle expects to incur total overhead costs of $419,400 during the year and applies overhead based on annual salary costs. Judy is a senior partner, her annual salary is $225,000, and she is expected to bill 2,200 hours during the year. Steve is a senior associate, his annual salary is $124,500, and he is expected to bill 1,500 hours during the year. Required: Calculate the predetermined overhead rate. Assuming that the hourly billing rate should be set to cover the total cost of services plus a 25% markup, compute the hourly billing rates for Judy and Steve.
Ace Architects employs two architects, each having a different area of specialization. Caitlin specializes in industrial commercial construction and Zachary specializes in residential construction. Ace expects to incur total overhead costs of $737,100 during the year and applies overhead based on annual salary costs. Caitlin is a senior partner, her annual salary is $168,750, and she is expected to bill 3,000 hours during the year. Zachary is a senior associate, his annual salary is $94,500, and he is expected to bill 2,800 hours during the year. a. Calculate the predetermined overhead rate. Predetermined Overhead Rate b. Assuming that the hourly billing rate should be set to cover the total cost of services plus a 20% markup, compute the hourly billing rates for Caitlin and Zachary. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Caltin Zachary % Billing rate per hour per hour
Lisa Claussen, CPA, pays her new staff accountant, Gina, a salary equivalent to $27 per hour while Lisa receives a salary equivalent to $39 per hour. The firm's predetermined indirect cost allocation rate for the year is $16 per hour. Claussen bills for the firm's services at 25% over cost. Assume Lisa works 1 hours and Gina works 16 hours preparing a tax return for Mikayla Jones. 1. What is the total cost of preparing Jones's tax return? 2. How much will Lisa bill Jones for the tax work? 1. What is the total cost of preparing Jones's tax return? Enter the direct and indirect costs for preparing Jones's tax return. Direct Cost: Lisa's time Direct Cost: Gina's time Total Direct Cost: Indirect Cost: Total cost of preparing tax return hrs. hrs. hrs.
Jace and Associates provides professional consulting services to a variety of clientele in an effort to help them improve the operating effectiveness and profitability of their businesses. At the start of the year, budgeted MOH costs were $250,000; budgeted direct labor hours, its allocation base, were 100,000. The company is considering doing work for a new client that is estimated to take around 45 hours. How much should Jace bid on this job if the company incurs a direct labor rate of $30/hour and charges a 60% mark-up above job costs? (Round answer to 2 decimal places, e.g. 5,275.25.) Bid price $
Brenda Sheldon, CPA, pays her new staff accountant, Abby , a salary equivalent to $21 per hour while Brenda receives a salary equivalent to $37 per hour. The firm's predetermined indirect cost allocation rate for the year is $11 per hour. Sheldon bills for the firm's services at 34% over cost. Assume Brenda works 6 hours and Abby works 8 hours preparing a tax return for Mikayla Touchstone. 1. What is the total cost of preparing Touchstone's tax return? 2. How much will Brenda bill Touchstone for the tax work?
At ABC Co., 10% of each salesperson's yearly bonus is based on whether or not the entire company reaches its annual sales goals. ABC's compensation structure is based on the fundamental idea that ______. A) compensation policies must be legal B) incentives will be more effective if it encourages people to act in ways that benefit both society and the person C) people will work to accomplish a goal if they have a real stake in the reaching the goal D) incentive structures should be as simple as possible E) People are more likely to adhere to a policy if they have had some input into the development of the policy
One of the employees of Gokul Dairy, Vishnu Jagannath works for 38 hours in a week, and is paid on an 80 percent gain-sharing plan, where bonus earnings begin at standard. The base wage for the job Vishnu performs is $8.00 per hour, and the standard is 62 units per hour. i) Calculate the weekly (40 hours) pay for Vishnu if he works at standard, and calculate the labour cost per unit for the company. ii) Calculate the weekly pay for Vishnu when he produces 2750 units in the 40 hours.
Tokwa Inc. is a dealer of Kia trucks and automobiles. Tokwa distributes annual bonuses to its Vice President for Sales and three division managers, namely: Truck Division, SUV Division, and AUV and Sean Division. The company reported P12,000,000 profit for 2020 before bonuses and income tax. The income tax rate is 30%. How much should the vice president and each division manager receive, respectfully, if the vice president gets 3% and each division manager gets 1% of profit after bonuses but before income taxes? A. P339,623 and P113,208 B. P382,979 and P127,659 C. P169,811 and P169,911 D. P191,489 and P191,489
WV Construction has two divisions: Remodeling and New Home Construction. Each division has an on-site supervisor who is paid a salary of $58,000 annually and one salaried estimator who is paid $52,000 annually. The corporate office has two office administrative assistants who are paid salaries of $38,000 and $31,000 annually. The president's salary is $127,000. How much of these salaries are common fixed expenses? $196,000 $306,000 $110,000 $127,000
Seal Financial Advisors provides accounting and finance assistance to customers in the retail business. Seal has four professionals on staff and an office with six clerical staff. Total compensation, including benefits, for the professional staff runs about $573,000 per year, and normal billable hours are 8,300 hours per year. The professional staff keep detailed time sheets organized by client number. The total office and administrative costs for the year are $755,000. Seal allocates office and administrative costs to clients monthly, using a predetermined overhead allocation rate based on billable hours. What is the predetermined overhead allocation rate that Seal will use for office and administrative costs? (Round your answer to the nearest cent.) A. $69.04 per hour B. $21.93 per hour C. $160.00 per hour D. $90.96 per hour

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