Fnsacc303 The Statistics Data Answers Assessment Answers
Bob bought a car priced at $12,995. He paid $3,500 cash and borrowed the balance. This loan was to run for six years with simple interest at 12 % pa. What is the total cost of the car including interest?
- (a) A book shop buys statistics texts from the publisher for $137 and adds 33 1/3 % to the publisher’s price as a mark-up. To this new total a further 20% retail tax is added. What is the final retail price of the book to customers?
(b) If the retail tax is reduced to $14 by what amount will the retail price fall?
- (a) A retired teacher invests $22,000 at 16% per annum (simple interest rate). How much will he need to deposit in another account paying 12.5% per annum (simple interest rate), to receive total interest per annum of $5,300? (b) How much should be invested now, at 8% per annum, compounded quarterly, to return an amount of $10,000 in four years time?
- A computer sales representative earns a salary of $30,000 per annum. She is offered the choice of changing to working for commission at the following rates;
- A flat payment of $10,000, plus
- 75% of the first $100,000sales per annum, plus
- 5% of the next $200,000 sales per annum, plus
- 0% of any sales over $300,000 per annum
What amount of sales would the representative have to make to earn the same amount of commission as her present day salary?
A company depreciates the following assets using the reducing balance method. Determine the written down value to the nearest dollar for;
- A local craftsperson makes wooden toys which he sells at a market each month. His fixed costs are $800 plus a variable cost of $1.80 per toy. He sells the toys for $6.50 each. Calculate the following.
- Tim is attempting to calculate the break-even point of the business. He has calculated the estimated income and expenses as follows.
Average Sales value of a Photo Album $35.50 Average purchase value of each Album $18.50 His estimates annual expenses have been calculated as follows.
Rent $20,000
Telephone $4,000
Staff wages $50,000
Superannuation$4,750
Printing $4,800.
You are required to calculate the Break-even point and provide a proof statement for the business for a 12 month period. You also need to show your calculations for Contribution margin, Total annual fixed costs, Break even pint and then finish with the Proof statement.
- You are employed as an assistant accountant for a hotel group and that you have been asked by a company executive for the following report. Reports may take the form of an office memo with attachments. Reports are to be in a structured format that is easily followed and enables ready analysis by the company executives. Phillipe Du Pont is the Food And Beverage manager at the hotel.
Phillipe has been advised by the Managing Director that his profit margins on wine sold in the formal dining room need to be increased. Phillipe believes one way of increasing margins is to take advantage of discounts offered by wholesale wine merchants to reduce the cost price of wine sold, thereby increasing wine profit margins.The hotel’s current wine merchant (Bartons) has offered the following discounts:
In order to make a decision regarding which wine merchant to use, Phillipe has asked for an analysis showing the discounted price of wine using multiple discounting:
Answer:
Total price of car = $ 12,995
Initial down-payment = $ 3,500
Total amount borrowed = 12995 – 3500 = $9.495
Total amount paid = Principal + Simple Interest
Simple Interest = P*R*T
Where P = Sum borrowed or $ 9,495
R = Rate of interest or 12%
T = Time period or 6 years
Hence, simple interest on the borrowed amount = 9495*0.12*6 = $ 6.836.4
Therefore total cost of the car including interest = 12995 + 6836.4 = $ 19,831.40
Question 2
(a) Cost price = $ 137
Mark up = 33.33% or (100/3)%
Hence, marked up price = 137 *(1+(100/300)) = $182.67
On the above price, a retail tax of 20% is applied
Final retail price of the book = 182.67*(1+(20/100)) = $ 219.2
(b) Now the value of the retail tax is $ 14
Price before retail tax = $182.67
Hence, final retail price of the book = 182.67 + 14 = $ 196.67
Question 3
(a) The formula for simple interest is as follows.
Simple interest = P*R*T
Total simple interest desired = $ 5,300
Time period T = 1 year for both principal amounts
Let the principal amount in second account be P
Then, 5300 = 22000*0.16*1 + P*0.125*1
Solving the above, we get P = $ 14,240
(b) Let the requisite amount invested be denotes as P
Interest rate (R) = 8% p.a. or 2% per quarter
Final amount (A) = $ 10,000
Time period (T) = 4 years or 16 quarters
The relevant formula to be used is as follows.
A = P (1+R)T
Substituting the requisite input values, we get
10000 = P(1.02)16
Solving the above, we get P= $7,284.46
Question 4
Current Salary = $ 30,000 p.a.
Under the choice offered $ 10,000 is the fixed salary and therefore if the same amount of salary would have to be earned in this proposed plan, then commission to the tune of $ 20,000 ought to be derived.
Commission amount of first $ 100,000 of sales = (3.75/100)*100000 = $ 3,750
Commission amount on the next $ 200,000 of sales = (6.5/100)*200000 = $ 13,000
Total commission income derived from $ 300,000 sales per annum = 3750 + 13000 = $ 16,750
Incremental commission required to match the current salary = 20000-16750 = $ 3,250
A commission of 9% would be paid on sales above $ 300,000 per annum. Let the requisite sales amount above $ 300,000 be $ X
Then (9/100)*X = 3250
Solving the above, X = $36,111
Hence, it can be concluded that in order to have the same salary under the proposed plan, annual sales of $ 336,111 need to be generated.
Question 5
(a) Initial cost= $35,000
Since 21% is depreciated each year, hence 79% of value remains.
Value of the car at the end of year 4 = 35000*0.794 = $13,633
(b) Initial cost = $ 110,000
Since 12% is depreciated each year, hence 88% of value remains.
Value of the furniture at the end of year 7 = 110000*0.887 = $44,954
(c) Total depreciation over the useful life of 100,000 hours = Initial cost – Scarp value = 137000-30000 = $107,000
Depreciation per hour = 107,000/100000 = $1.07
Total depreciation for 19000 hours = 1.07*19000 = $20,330
Question 6
(a) Unit selling price = $ 6.50
Unit variable cost = $ 1.80
Unit contribution margin = Unit selling price – Unit variable cost = 6.5 – 1.8 = $ 4.7
Units required for break-even = Fixed cost/Unit contribution margin = 800/4.7 = 170.2 or 171 toys
(b) Break even number of toys is 171
Cost of making break even number of toys = Fixed cost + variable = 800 + 171*1.8 = $ 1,107.8
(c) Cost required to make 180 toys = 800 + 180*1.8 = $1,124
(d) Sales proceeds obtained by selling 180 toys = 180*6.5 = $ 1,170
(e) Profits earned by selling 180 toys = Sales proceeds – Cost = 1170 -1124 = $ 46
Question 7
Contribution margin
Sales price per photo album = $ 35.50
Purchase price per photo album = $ 18.50
Unit contribution margin = 35.50 -18.50 = $ 17
Annual fixed cost
The annual fixed cost would comprise of the following elements.
Rent = $20,000, Telephone = $ 4,000, Staff wages = $ 50,000, Superannuation = $ 4,750, Printing = $ 4,800
Hence, total fixed cost = 20000 + 4000 + 50000 + 4750 + 4800 = $83,550
Breakeven Point
Breakeven Volume = Fixed cost/Contribution margin = 83550/17 = 4915 photo albums
Proof of statement
Sales revenue from 4915 photo album sale = 4915*35.5 =$ 174,482
Variable cost for 4915 photo album = 4915*18.5 = $ 90,928
Annual fixed cost = $ 83550
Annual fixed cost + variable cost approximate equals the sales revenue which provides the proof for break even being sale of 4915 units annually.
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