Shanice works in finance for a small manufacturing company and is working on next year’s budget. She has been doing research to compare the cost of outsourcing some upcoming jobs versus the cost of purchasing the equipment to keep the jobs in-house. In what step in financial planning is Shanice involved?
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Shanice works in finance for a small manufacturing company and is working on next year’s budget. She has been doing research to compare the cost of outsourcing some upcoming jobs versus the cost of purchasing the equipment to keep the jobs in-house. In what step in financial planning is Shanice involved?
Multiple Choice
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developing financial statements for outside investors
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forecasting short-term financial needs -
establishing financial controls and tax policy
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forecasting long-term financial needs
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- Shanice works in finance for a small manufacturing company and is working on next year’s budget. She has been doing research to compare the cost of outsourcing some upcoming jobs versus the cost of purchasing the equipment to keep the jobs in-house. In what step in financial planning is Shanice involved? Multiple Choice O. developing financial statements for outside investors O. forecasting short-term financial needs O. establishing financial controls and tax policy O. forecasting long-term financial needsShanice works in finance for a small manufacturing company and is working on next year’s budget. She has been doing research to compare the cost of outsourcing some upcoming jobs versus the cost of purchasing the equipment to keep the jobs in-house. In what step in financial planning is Shanice involved?Margaret is the manager of a medium-size company. A few years ago, Margaret persuaded the owner to base a part of her compensation on the net income of the company. Each December she estimates year-end financial figures in anticipation of the bonus she will receive. If the bonus is not as high as she would like, she offers several recommendations to the accountant for year-end adjustments. One of her favorite recommendations is for the controller to reduce the estimate of doubtful accounts. What type of internal control(s) might be useful for this company in overseeing the manager's recommendation for accounting changes?
- Suppose that Demont has been given a summer job as an intern at Isaac Aircams, a company that manufactures sophisticated spy cameras for remote-controlled military reconnaissance aircraft. The company, which is privately owned, has approached a bank for a loan to help it finance its growth. The bank requires financial statements before approving such a loan. Classify each cost listed below as either product costs or period costs for the purpose of preparing the financial statements for the bank. Costs Product Cost/Period Cost 1. Depreciated on salesperson's cars 2. Rent on equipment used in the factory 3. Lubricants used for machine maintenance 4. Salaries of personnel who work in the finished goods warehouse 5. Soap and paper towels used by factory workers at the end of a shiftChris is a financial manager for a small business. Right now, he's working on next year's budget. Money is tight, and each department has requested more money than Chris is able to budget for it. His best friend works in marketing and is pressuring Chris for an extra $5,000.00 for her advertising budget. Chris doesn't want to disappoint her but granting her the favor would mean taking money away from other departments. The decision is up to him, and his boss will trust his judgment. What should Chris do? Is it all right to let a personal relationship influence his budgeting decisions?Assume that you are nearing graduation and that you have applied for a job at a local bank. As part of the bank’s evaluation (interview) process, you have been asked to take an exam that covers several financial analysis techniques. The hiring decision depends on how you would answer the following questions: Part I: TVM Analysis. The first section of the test addresses time value money analysis.John andMaryareayoungcouple, who want to put their finance in order. Boththehusbandandthe wifeare27yearsagoandinstableemployment. They want to manage their savings and earnings to achieve a better return and reduce the risks. You want to help them with their financial planning by answering a series of questions as follows: ThegreatAlbertEinsteinoncesaid“Compoundinterestistheeighthwonderofthe world. He who understands it earns it...he who doesn't...pays it.” Whatisthefuture value of an initial $500 after 30 years if it is invested in an account paying 15 percent annual interest? What is the…
- Margaret is the manager of a medium-sized company. A few years ago, Margaret persuaded the owner to base a part of her compensation on the net income of the company. Each December she estimates year-end financial figures in anticipation of the bonus she will receive. If the bonus is not as high as she would like, she offers several recommendations to the accountant for year-end adjustments. One of her favorite recommendations is for the controller to reduce the estimate of doubtful accounts. What effect does lowering the estimate for doubtful accounts have on the income statement and balance sheet? What type of internal control(s) might be useful for this company in overseeing the manager's recommendation for accounting changes?Margaret is the manager of a medium-size company. A few years ago, Margaret persuaded the owner to base a part of her compensation on the net income of the company. Each December she estimates year-end financial figures in anticipation of the bonus she will receive. If the bonus is not as high as she would like, she offers several recommendations to the accountant for year-end adjustments. One of her favorite recommendations is for the controller to reduce the estimate of doubtful accounts. What effect does lowering the estimate for doubtful accounts have on the income statement and balance sheet?Suppose that Demont has been given a summer job as an intern at Isaac Aircams, a company that manufactures sophisticated spy cameras for remote-controlled military reconnaissance aircraft. The company, which is privately owned, has approached a bank for a loan to help it finance its growth. The bank requires financial statements before approving such a loan. Classify each cost listed below as either product costs or period costs for the purpose of preparing the financial statements for the bank. Cost Product Cost/Period Cost 1. Factory supervisors' salaries 2. Heat, water, and power consumed in the factory 3. Materials used for boxing products for shipment overseas. Units are normally boxed. 4. Advertising costs 5. Workers' compensation insurance for factory employee
- You should use a financial calculator and Excel to solve the problems. Discuss the differences between efficiency and effectiveness. Why is it important for small business owners to understand the difference between profit and profitability? What financial ratio is used to determine profitability? Sam quit a $30,000-a-year job with a local heating and air conditioning firm to go into business for himself. After his first year in business, his accountant showed him an income statement that indicated Sam’s firm had a profit of $40,000. During this year Sam had drawn a salary of $20,000. What was Sam’s accounting profit, his entrepreneurial profit, and his opportunity cost? Explain the difference between accounting and entrepreneurial profit. Discuss the differences between operating and financial leverage. You are going to open a business making custom cabinets. You can sell each cabinet for $80. It takes a cabinet-maker approximately 45 minutes to make one cabinet. Each…Suppose that you have been given a summer job as an intern at Issac Aircams, a company that man- ufactures sophisticated spy cameras for remote-controlled military reconnaissance aircraft. The company, which is privately owned, has approached a bank for a loan to help it finance its growth. The bank requires financial statements before approving such a loan. You have been asked to help prepare the financial statements and were given the following list of costs: Depreciation on salespersons’ cars. Rent on equipment used in the factory. Lubricants used for machine maintenance. Salaries of personnel who work in the finished goods warehouse. Soap and paper towels used by factory workers at the end of a shift. Factory supervisors’ salaries. Heat, water, and power consumed in the factory. Materials used for boxing products for shipment overseas. (Units are not normally boxed.) Advertising costs. Workers’ compensation insurance for factory employees. Depreciation on…Ms. Faye Santos is an accounting major at a Midwestern state university located approximately 60 miles from a major city. Ms. Faye Santos is an accounting major at a Midwestern state university located approximately 60 miles from a major city. Many of the students attending the university are from the metropolitan areas and visit their homes regularly on the weekends. Faye, an entrepreneur at heart, realizes that few good commuting alternatives are available for students doing weekend travel. She believes that a weekend commuting service could be organized and run profitably from several suburban and downtown shopping mall locations. Faye has gathered the following investment information. Five used vans would cost a total of $75,000 to purchase and would have a three-year useful life with negligible salvage value. Faye plans to use straight-line depreciation. Ten drivers would have to be employed at a total payroll expense of $48,000. 3. Other annual out-of-pocket expenses…