The Carolina Products Company has completed the flexible budget analysis for the 2nd quarter, which is as given below. Actual Results Flexible Budget Variance Flexible Budget Sales Volume Variance Static Budget Units/Volume 12 comma 840 0 12 comma 840 840 F 12 comma 000 Sales Revenue $ 62 comma 800 $ 1 comma 230 U $ 64 comma 030 $ 4 comma 030 F $ 60 comma 000 Variable Expenses 27 comma 570 590 U 26 comma 980 $ 1 comma 700 U 25 comma 280 Contribution Margin $ 35 comma 230 $ 1 comma 820 U $ 37 comma 050 $ 2 comma 330 F $ 34 comma 720 Fixed Expenses 34 comma 230 180 U 34 comma 050 $ 0 34 comma 050 Operating Income/(loss) $ 1 comma 000 $ 2 comma 000 U $ 3 comma 000 $ 2 comma 330 F $ 670 Which of the following would be a correct interpretation of the sales volume variance for sales revenues?

A.

increase in fixed costs

B.

increase in sales volume

C.

increase in variable cost per unit

D.

increase in sales price per unit

Bridgeport company began operations at the beginning of 2018. the following information pertains to this company. 1. pretax financial income for 2018 is $115,000. 2. the tax rate enacted for 2018 and future years is 40%. 3. differences between the 2018 income statement and tax return are listed below: (a) warranty expense accrued for financial reporting purposes amounts to $7,500. warranty deductions per the tax return amount to $2,200. (b) gross profit on construction contracts using the percentage-of-completion method per books amounts to $94,700. gross profit on construction contracts for tax purposes amounts to $67,100. (c) depreciation of property, plant, and equipment for financial reporting purposes amounts to $61,800. depreciation of these assets amounts to $75,700 for the tax return. (d) a $3,600 fine paid for violation of pollution laws was deducted in computing pretax financial income. (e) interest revenue recognized on an investment in tax-exempt municipal bonds amounts to $1,500. 4. taxable income is expected for the next few years. (assume (a) is short-term in nature; assume (b) and (c) are long-term in nature.) (a) prepare the reconciliation schedule for 2017 and future years. (b) prepare the journal entry to record income tax expense for 2017. (c) prepare the income tax expense section of the income statement beginning with “income before income taxes.” (d) determine how the deferred taxes will appear on the balance sheet at the end of 2017.

Afirm wants to strengthen its financial position. which of the following actions would increase its current ratio? a. reduce the company's days' sales outstanding to the industry average and use the resulting cash savings to purchase plant and equipment.b. use cash to repurchase some of the company's own stock.c. borrow using short-term debt and use the proceeds to repay debt that has a maturity of more than one year.d. issue new stock, then use some of the proceeds to purchase additional inventory and hold the remainder as cash.e. use cash to increase inventory holdings.

Western electric has 32,000 shares of common stock outstanding at a price per share of $79 and a rate of return of 13.00 percent. the firm has 7,300 shares of 7.80 percent preferred stock outstanding at a price of $95.00 per share. the preferred stock has a par value of $100. the outstanding debt has a total face value of $404,000 and currently sells for 111 percent of face. the yield to maturity on the debt is 8.08 percent. what is the firm's weighted average cost of capital if the tax rate is 39 percent?