A firm reduced the size of its workforce by 24%. If it now employs 570 workers many people did it employ before restructuring? how Select one: O a. 459 O b. 706 Oc 750 O d. None of the above
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- A company has just been taken over by new management that believes it can raise earnings beforetaxes (EBT) from $600 to $1,000, merely by cutting overtime pay and reducing cost of goods sold. Priorto the change, the following data applied:Total assets 8,000Debt ratio 45%Tax rate 35%BEP ratio 13.31%EBT 600Sales 15,000These data have been constant for several years, and all income is paid out as dividends. Sales, the taxrate, and the balance sheet will remain constant. What is the company’s cost of debt? (Hint: Work onlywith old data.)16. At the end of the year, a company finds that it has under-applied factory overhead by $1,000. What would be the most common accounting treatment in this case? Increase Assets by $1,000 on the Balance Sheet Increase Profit by $1,000 in the Income Statement Increase Liabilities by $1,000 on the Balance Sheet Decrease Cost of Goods Sold by $1,000 in the Income Statement Increase Cost of Goods Sold by $1,000 in the Income Statement.Rangoon Corp's sales last year were $400,000, and its year-end total assets were $300,000. The average firm in the industry has a total assets turnover ratio (TATO) of 2.5. The new CFO believes the firm has excess assets that can be sold so as to bring the TATO down to the industry average without affecting sales. By how much must the assets be reduced to bring the TATO to the industry average?
- New Orders Ltd (NOL) is a retailer of electronics appliances operating in Hong Kong. During its financialyear ended 28 February 2021 (with issue date on 5 March 2021), the following transactions have takenplace:(i) Restructuring plansNOL had announced two major restructuring plans with implementation details.The first plan is to reduce its capacity by the closure of two of its retail outlets. This will lead to theredundancy of 20 employees who have all been informed. The costs of this plan are $300,000 inredundancy costs, $200,000 in retraining costs and $50,000 in lease termination costs.The second plan is to reorganize the finance and information technology department over a one-yearperiod but this will not implement until two years later. The plan results in 20% of finance staff losingtheir jobs during the restructuring. The costs of this plan are $225,000 in redundancy costs,$300,000 in retraining costs and $200,000 in lease termination costs. None of the parties affectedby the…Assume that a general economic downturn occurred during year 2, with product demand falling from 6,000 to 5,000 units. Determine the percentage decrease in company net income if Consolidated had adopted Plan B.In the following scenario you are the CEO of a corporation (please answer A, B & C) Your company consists of 500 employees and recorded a net profit in 2021 of $9M. You notice your call center (75 employees) seems to be taking up a substantial amount of expense, as it accounted for $3M. You have the option to outsource the call center, costing the 75 employee's their jobs, but saving you $2.5M a year in expense. What do you do; keep the 75 employees at the current salary or outsource the department to save $2.5M annually? Why did you pick what you did? Same question as above, except your 2021 net profit was $1M. Do you outsource to shed $2.5M in expense? Why or why not? Were your answers to A & B the same or different? Did your answers contradict which group you picked in your initial post?
- Assume that a general economic downturn occurred during year 2, with product demand falling from 6,000 to 5,000 units. Determine the percentage decrease in company net income if Consolidated had adopted Plan A.ABC Company was organized on March 1 of the current year. After five months of start-up losses,management had expected to earn a profit during August. Management was disappointed, however, whenthe income statement for August also showed a loss. August’s income statement follows:ABC CompanyIncome StatementFor the Month Ended August 31Sales 450,000Less operating expenses:Indirect labor cost 12,000Utilities 15,000Direct labor cost 60,000Depreciation, factory equipment 21,000Raw materials purchased 165,000Depreciation, sales equipment 18,000Insurance 4,000Rent on facilities 70,000Selling and administrative expenses 32,000Advertising 75,000 472,000Net operating loss (22,000)After seeing the Tk. 22,000 loss for August, ABC’s president stated, “I was sure we’d be profitable withinsix months, but our six months are up and this loss for August is even worse than July’s. I think it’s time tostart looking for someone to buy out the company’s assets—if we don’t, within a few months there won’tbe…Last year Urbana Corp. had $197,500 of assets, $307,500 of sales, $19,575 of net income, and a debt-to-total-assets ratio of 37.5%. The new CFO believes a new computer program will enable it to reduce costs and thus raise net income to $33,000. Assets, sales, and the debt ratio would not be affected. By how much would the cost reduction improve the ROE?
- The results of the operating activities of Kobe Company for the current year are as follows: Based on these results, Kobe is considering discontinuing department C and establishing a new department D. The estimated revenues and expenses of the new department are as follows: Dept. DNet sales $480,000Cost of goods sold 270,000Direct operating expenses 185,000In addition, the proposed change will cause total indirect operating expenses to increase by $22,000.RequiredDetermine whether Kobe should discontinue department C and establishdepartment D.The Board of Directors decides that old inventory costing €18,000 is to be written off as the inventory is no longer sellable (it has gone out of fashion). Identical inventory in the past was sold to customers for €31,000. What is the impact on the net assets of the company in monetary terms?The management of Your Corporation is considering dropping a product. Data from the company's accounting system appear below: Sales $40,000 VC $15,000 Fixed manufacturing costs $19,000 Fixed selling and administrative costs $11,000 Investigation has revealed that $11,700 of the fixed manufacturing expenses and $6,300 of the fixed selling and administrative expenses will go away if the product is discontinued. What would be the effect on the company's overall net operating income if this product is dropped? Group of answer choices decrease by $7,000 increase by $7,000 increase by $13,000 decreased by $25,000 decreased by $13,000