Horngren’s Cost Accounting A Managerial Emphasis, Canadian 9th edition soluti...
Household management presentation
1. The Benefits of Household Management
We begin with all portfolios in balance
with their target allocation
Taxable Accounts Tax Deferred Accounts Household Total
Domestic stocks $57,213 53.0% $114,427 53.0% $171,640 53.0%
Internat'l stocks $7,556 7.0% $15,113 7.0% $22,670 7.0%
US Trsy bonds $39,943 37.0% $79,883 37.0% $119,825 37.0%
Cash $3,238 3.0% $6,477 3.0% $9,715 3.0%
Total $107,950 100.0% $215,900 100.0% $323,850 100.0%
Model Portfolio Targets
Domestic 53.0%
Internatinal 7.0%
US Treasury 37.0%
Cash 3.0%
2. The Benefits of Household Management
Assume that our domestic allocation grows by 15% while the
others remain flat.
Taxable Accounts Tax Deferred Accounts Household Total
Domestic stocks $60,950 56.5% $121,900 56.5% $182,850 56.5%
Internat'l stocks $7,000 6.5% $14,000 6.5% $21,000 6.5%
US Trsy bonds $37,000 34.3% $74,000 34.3% $111,000 34.3%
Cash $3,000 2.7% $6,000 2.7% $9,000 2.7%
Total $107,950 100.0% $215,900 100.0% $323,850 100.0%
Model Portfolio Targets
Domestic 53.0% The portfolios are now out of
Internatinal 7.0%
US Treasury 37.0% balance beyond our tolerance and
Cash 3.0% must be re-balanced
3. The Benefits of Household Management
We use the lowest cost method to
re-balance your portfolio
Taxable Accounts Tax Deferred Accounts Household Total
Domestic stocks $60,950 56.5% $110,690 51.3% $171,640 53.0%
Internat'l stocks $7,000 6.5% $15,670 6.5% $22,670 7.0%
US Trsy bonds $37,000 34.3% $82,824 34.3% $119,824 37.0%
Cash $3,000 2.7% $6,716 2.7% $9,716 3.0%
Total $107,950 100.0% $215,900 100.0% $323,850 100.0%
Model Portfolio Targets
Domestic 53.0% One sale, Two Buys
Internatinal 7.0%
US Treasury 37.0% NO Taxes and Commissions of $27
Cash 3.0%
4. The Benefits of Household Management
Most managers re-balance
accounts individually
Taxable Accounts Tax Deferred Accounts Household Total
Domestic stocks $57,213 53.0% $114,427 53.0% $171,640 53.0%
Internat'l stocks $7,557 7.0% $15,113 7.0% $22,670 7.0%
US Trsy bonds $39,941 37.0% $79,833 37.0% $119,824 37.0%
Cash $3,239 3.0% $6,477 3.0% $9,716 2.7%
Total $107,950 100.0% $215,900 100.0% $323,850 100.0%
Model Portfolio Targets
Domestic 53.0% Two Sales, Four Buys
Internatinal 7.0%
US Treasury 37.0% $920 in Taxes and Commissions
Cash 3.0%
