Answer:
Real COGS 143,150 178,250
Explanation:
[tex]\left[\begin{array}{ccc}-&2018&2019\\Beg.Inv&21,000&29,350\\Purchase&151,500&187,500\\Available&172,500&216,850\\End.Inv&32,500&35,500\\COGS&140,000&184,500\\Adj.End.Inv&-3,150&6,250\\Real COGS&143,150&178,250\\Real End-Inv&29,350&41,750\\\end{array}\right][/tex]
When overstated, it means an inventory with a book value of 100 is really 95
When understated, it means an inventory with a book value of 100 is really 105
This makes the COGS lower than it should in the first case
and higher than it should in the second
Notice:
Because of 2018 adjustment, beginning and availalbe good must be recalculate for 2019
Suppose that you are a member of the Board of Governors of the Federal Reserve System. The economy is experiencing a sharp rise in the inflation rate. What change in the Federal funds rate would you recommend? How would your recommended change get accomplished? What impact would the actions have on the lending ability of the banking system, the real interest rate, investment spending, aggregate demand, and inflation?
As a member of the Federal Reserve Board, in an inflationary situation I would suggest a change in the federal funds rate that would be accomplished by raising the base interest rate of the US economy. This would make bonds more attractive and people would stop consuming to invest in public debt securities. In addition, raising interest rates would discourage credit, causing banks to lend less. Since inflation is a monetary phenomenon caused by the excess of currency in circulation, these measures would have a downward effect on inflation, as they reduce the amount of money in circulation in the economy.
In response to inflation, the Federal Reserve may increase the Federal funds rate which is accomplished through open market operations. This limits the banking system's lending ability, can increase the real interest rate, decrease investment spending and aggregate demand, and eventually control inflation.
Explanation:When the economy is experiencing a sharp rise in inflation, the Federal Reserve (Fed), which you are a hypothetical member of, may recommend an increase in the Federal funds rate. Take for instance Episodes 5 and 6, when the Federal Reserve perceived a risk of inflation, the federal funds rate was raised from 3% to 5.8% from 1993 to 1995.
The change in the Federal funds rate is accomplished through open market operations, specifically by selling government securities, which decreases the amount of money in circulation, thereby raising interest rates. The aim is to slow down economic growth and cool off inflation.
The impact of this action on the banking system would be a reduced ability to lend, as higher interest rates make borrowing costs more expensive for banks. This, in turn, could raise the real interest rate, as the increase in the nominal interest rate (the Federal funds rate) would outstrip the rate of inflation, earning savers a higher real return on their investments. Consequently, higher real interest rates may cause a decrease in investment spending, as the costs of borrowing to fund investment become more expensive. This might result in a decrease in aggregate demand, as lower investment spending and potentially lower consumer spending slow economic growth. Eventually, the aim is to mitigate inflation.
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An attendant at a car wash is paid according to the number of cars that pass through. Suppose the probabilities are 1/12, 1/12, 1/4, 1/4, 1/6, and 1/6, respectively, that the attendant receives $7, $9, $11, $13, $15, or $17 between 4:00 P.M . and 5:00 P.M . on any sunny Friday. Find the attendant’s expected earn- ings for this particular period.
Answer: The attendant’s expected earn- ings for the period between 4:00 P.M and 5:00 P.M is $12,67.
Explanation: The discrete random variable X represent attendant’s earnings.
The expected value of the discrete random variable X is
= E (x) = ∑× f(x)= 7 × 1/12 + 9 × 1/12 + 11 × 1/4 + 13 × 1/4 + 15 × 1/6 + 17 × 1/6 = 12,67.The expected earnings for the attendant at a car wash between 4:00 P.M. and 5:00 P.M. on a sunny Friday is calculated using probabilities of different earnings outcomes, resulting in $12.67.
The expected value is calculated by multiplying each outcome by its probability and then summing all those products. The earnings and the corresponding probabilities are $7 (1/12), $9 (1/12), $11 (1/4), $13 (1/4), $15 (1/6), and $17 (1/6). Using these values, we can compute the expected earnings as follows:
(1/12) times $7(1/12) times $9(1/4) times $11(1/4) times $13(1/6) times $15(1/6) times $17
Expected Earnings = (1/12) times 7 + (1/12) times 9 + (1/4) times 11 + (1/4)times 13 + (1/6)times 15 + (1/6)times 17
Expected Earnings = 0.5833 + 0.75 + 2.75 + 3.25 + 2.5 + 2.8333
Expected Earnings = $12.6666 (rounded to $12.67)
Therefore, the expected earnings for the attendant between 4:00 P.M. and 5:00 P.M. on a sunny Friday is $12.67.
Cass Corporation reported pretax book income of $10,600,000. During the current year, the reserve for bad debts increased by $172,500. In addition, tax depreciation exceeded book depreciation by $227,500. Cass Corporation sold a fixed asset and reported book gain of $87,000 and tax gain of $114,500. Finally, the company received $270,000 of tax-exempt life insurance proceeds from the death of one of its officers. Compute the company’s current income tax expense or benefit.
Answer:
Tax Income Expense 10,600,000
Tax income payable 10,302,500
deffered tax liability 297,500
Explanation:
pretax book income 10,600,000
reverse bad debt 172,500
additional dep -227,500
book asset sale gain -87,000
taxable asset sale gain 114,500
tax expemt insurance proceed -270,000
Taxable income 10,302,500
You are scheduled to receive $17,000 in two years. When you receive it, you will invest it for six more years at 9.75 percent per year. How much will you have in eight years?
Answer: $29,708.18 in eight years.
Explanation:
Amount received in two years = $17,000
Interest rate received per year = 9.75%
Amount received in eight years,
here we are using formula for calculating amount received after eight years are as follows:
A = [tex]P(1+ \frac{r}{100}) ^{n}[/tex]
= [tex]17000(1+ \frac{9.75}{100}) ^{6}[/tex]
= [tex]17000(1+ 0.0975) ^{6}[/tex]
= 17000 (1.7475402)
= 29708.18 ⇒ this much a person can earn in eight years.
Final answer:
Compound interest calculation method explanation for investing $17,000 for eight years at 9.75% annually.
Explanation:
Compound interest is calculated using the formula A = P(1 + r/n)^(nt) where A is the future value of the investment, P is the principal amount, r is the annual interest rate, n is the number of times that interest is compounded per year, and t is the number of years the money is invested for.
In this scenario, with an initial investment of $17,000 compounded annually at 9.75% for six years, the future value after eight years can be calculated using the compound interest formula to determine the total amount accrued.
Substitute the given values into the formula, with P = $17,000, r = 9.75%, n = 1 (compounded annually), and t = 8 years to find out how much the investment will grow to after the specified period.
Suppose market demand is QD=50-2P and market supply is QS=40+2P. The market equilibrium price is $___________ nothing and the equilibrium quantity is _______units. (Enter your responses rounded to two decimal places.) Suppose the government institutes a price floor of $5.00. The price floor will results in a ▼ surplus shortage of nothing units. (Enter your response as a whole number.)
Answer:
The market equilibrium price is $ 2.50 and the equilibrium quantity is 45 units.
IF price floor is set at $5 then it will be a surplus of quantity.
Explanation:
[tex]\left \{ {{QD=50-2P} \atop {QS=40+2P}} \right.[/tex]
50 - 2P = 40+2P
50-40 = 2P + 2P
10 = 4P
10/4 = P
2.5= P
50-2*2.5 = 50- 5 = Q45
If P = 5
40 + 2P = 40 + 2*5 = 50 supply quantity
50 - 2*5 = 50 - 10 = 40 demand quantity
supply will be greater than demand, it will be a surplus
Final answer:
The market equilibrium price is $2.5, and the equilibrium quantity is 45 units. If a price floor of $5 is introduced, it results in a surplus of 10 units, indicating that the supply exceeds the demand.
Explanation:
To find the market equilibrium price and quantity, we set the market demand and market supply equal to each other, i.e., QD = QS. Given that the market demand is QD = 50 - 2P and the market supply is QS = 40 + 2P, we can find the equilibrium by solving:
50 - 2P = 40 + 2P
Subtracting 40 from both sides and adding 2P to both sides yields:
10 = 4P
Thus, P = 2.5. Therefore, the equilibrium price is $2.5.
To find the equilibrium quantity, we substitute P = 2.5 into either the demand or supply equation. Using the demand equation: QD = 50 - 2(2.5) = 45. So, the equilibrium quantity is 45 units.
If the government sets a price floor of $5, which is above the equilibrium price of $2.5, we need to evaluate the new market conditions. At a price of $5, the demand would be QD = 50 - 2(5) = 40 units, and the supply would be QS = 40 + 2(5) = 50 units. Thus, there would be a surplus of 10 units as the quantity supplied exceeds the quantity demanded by 10 units when the price is set at $5.
Congress would like to increase tax revenues by 10 percent. Assume that the average taxpayer in the United States earns $65,000 and pays an average tax rate of 15 percent. a. If the income effect is in effect for all taxpayers, what average tax rate will result in a 10 percent increase in tax revenues? (Round your answer to 2 decimal places.)
Final answer:
The new average tax rate needed to achieve a 10 percent increase in tax revenues would be 16.5%, calculated by increasing the current tax revenue per taxpayer by 10 percent and then finding the percentage this represents of the taxpayer's income.
Explanation:
The student is asking to calculate the new average tax rate needed for Congress to increase tax revenue by 10 percent under the assumption that the current average taxpayer earns $65,000 and pays a 15 percent tax rate. To find the new average tax rate, we first calculate the current tax revenue per taxpayer, which is 15 percent of $65,000. Then we increase this amount by 10 percent to find the new tax revenue target. Finally, we divide the new tax revenue target by the taxpayer's income to find the new average tax rate.
Current tax revenue per taxpayer = 0.15 imes $65,000 = $9,750
New tax revenue target = $9,750 imes 1.10 = $10,725
New average tax rate = $10,725 / $65,000
New average tax rate = 0.165 (or 16.5% when expressed as a percentage)
Tata Motors assembles cars from their own parts and subassemblies and also controls the mining and fabrication of the materials used to create those parts. When Anand ordered their luxury sedan with the platinum dashboard he knew he wouldn't be taking delivery of his dream car the next week. Rather, he would be waiting a while thanks to: a.a mismatch between supply chain lead time and customer demand. b.a mismatch between overall demand levels and productive capacity. c.a mismatch between demand and the most efficient production volume. d.a mismatch between demand and the most efficient shipment volume.
Answer:
The correct answer would be option A, A mismatch between supply chain lead time and customer demand.
Explanation:
Anand ordered his dream car which is luxury sedan with platinum dashboard. He knows that the delivery of his car will take time to reach him. This is because of the fact that there is a mismatch between supply chain lead time and the customer demand. A lead time is simply the delay or latency between the starting of a process till its execution. The delayed time between the initiation and the execution of a process is called as the lead time. Now Anand has ordered his dream sedan with some customization, which is the demand of the customer. Now the delay in the delivery of the his dream car will be due to the mismatch between his demand and the latency in the initiation and execution/delivery of the car to Anand.
When a competitive firm maximizes profit, it will hire workers up to the point where thea. marginal product of labor is equal to the product price. b. value of the marginal product of labor is equal to the product price. c. value of the marginal product of labor is equal to the wage. d. marginal product of labor is equal to the wage.
Answer: The correct answer is "C. value of the marginal product of labor is equal to the wage."
Explanation:
Assuming that a company operates in a market of perfect competition and that maximizes profits, this company will hire workers to the point where the value of the marginal product of labor is equal to the wage, because it is the point at which the costs of having an additional worker do not exceed the benefits of his incorporation.
A competitive firm maximizes profit by hiring workers until the value of the marginal product of labor equals the wage. The marginal revenue product must match the market wage for profit maximization, which represents the additional revenue from an additional worker.
Explanation:When a competitive firm maximizes profit, it will hire workers up to the point where the value of the marginal product of labor is equal to the wage. This is known as equating the marginal revenue product (MRP) to the market wage. The MRP is the additional revenue the firm earns from hiring one more worker and is calculated by multiplying the marginal product of labor by the price of the firm's output.
For example, if the going market wage is $12, the profit-maximizing firm will continue to hire workers until the MRP, which is the value of the marginal product, is also $12. If hiring an additional worker generates less than $12 in extra revenue, the cost of hiring (wage) exceeds the benefit (revenue), and thus hiring more workers would not maximize profits.
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Central University uses $123,000 of a particular toner cartridge for laser printers in the student computer labs each year. The purchasing director of the university estimates the ordering cost at $45 and thinks that the university can hold this type of inventory at an annual storage cost of 22% of the purchase price. How many months' supply should the purchasing director order at one time to minimize the total annual cost of purchasing and carrying?
Answer:
Explanation:
We have to calculate the Economic Order Quantity (EOQ). In this case, the "units" are dollars, and the "price" of each is 1.
One month's usage is 123000/12 = $10,250.
EOQ = 7094.
Month’s usage = 7094/10250 = 0.69
Data
Demand rate, D 123000
Setup cost, S 45
Holding cost, H 22.00%
Unit Price, P 1
Results
Optimal Order Quantity, Q* 7093.530984
Maximum Inventory 7093.530984
Average Inventory 3546.765492
Number of Setups 17.3397424
Holding cost $780.29
Setup cost $780.29
Unit costs $123,000.00
For its top managers, Goldberg Industries formats its income statement as follows: GoldBerg Industries Contribution Margin Income Statement Three Months Ended October 31, 2019 Net Sales Revenue $ 490,200 Variable Costs 294,120 Contribution Margin 196,080 Fixed Costs 173,000 Operating Income $ 23,080 What would be the outcome if this contribution margin income statement were prepared at the $377,000 sales level? (*The proportion of each sales dollar that goes toward variable costs is consistent within the relevant range.)
Answer:
The outcome will be a net loss for 22,200
Explanation:
[tex]\left[\begin{array}{ccc}Sales&490,200&377,000\\variable \: cost&-294,120&-226,200\\contibution&196,080&150,800\\fixed \:cost&-173,000&-173,000\\net \: income&23,080&-22,200\\\end{array}\right][/tex]
284120/490200 = 0.6 variable cost weight
377,000 x 0.6 = 226,200 variable cost
It is January 2nd. Senior management of Digby meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing 50,000 shares of stock plus a new bond issue. The CFO happily notes this will raise their Leverage (Assets/Equity) to a new target of 2.43. Assume the stock can be issued at yesterday's stock price $23.03. Which of the following statements are true? (Select 2 answers) Digby bond issue will be $47,165 Total Assets will rise to $150,947,421 Digby working capital will be unchanged at $21,092,896 Long term debt will increase from $35,183,502 to $36,334,880 Total investment for Digby will be $2,796,837 Digby will issue stock totaling $1,151,378
Answer:
1. Digby working capital will be unchanged at $21,092,896
2. Digby will issue stock totaling $1,151,378 (50,000*$23.03)
Explanation:
Digby working capital will be unchanged at $21,092,896 this because the fund to be raise is for financing a fixed asset- a plant and equipment.
Working Capital=Current Assets-Current Liabilities
Examples of current assets are Cash & Bank balances, stocks, receivables, etc.
Examples of current liabilities are payables, accrued expenses, etc.
Digby will issue stock totaling $1,151,378 i.e. (50,000*$23.03)
PHN Foods granted 18 million of its no par common shares to executives, subject to forfeiture if employment is terminated within three years. The common shares have a market price of $5 per share on January 1, 2017, the grant date. Required: 1. What journal entry will PHN Foods prepare to record executive compensation regarding these restricted shares at December 31, 2017 and December 31, 2018? 2. When calculating diluted EPS at December 31, 2018, what will be the net increase in the denominator of the EPS fraction if the market price of the common shares averages $5 per share during 2018?
Answer:
The $12 million is the net increase in the denominator of the EPS fraction if the market price of the common shares averages $5 per share during 2018.
Explanation:
1. The journal entry is shown below:
For December 31, 2017:
Compensation Expenses A/c Dr ($18 million × $5 per share) ÷ 3 = $30 million
To Restricted Shares $30 million
(Being compensation expenses recorded for 2017 year)
For December 31, 2018:
Compensation Expenses A/c Dr ($18 million × $5 per share) ÷ 3 = $30 million
To Restricted Shares $30 million
(Being compensation expenses recorded for 2018 year)
2. The net increase in the denominator of the EPS fraction for 2018 year is shown below:
= 2018 shares - Restricted shares
= $30 million - $18 million
= $12 million
Hence, the $12 million is the net increase in the denominator of the EPS fraction if the market price of the common shares averages $5 per share during 2018
Hemisphere Corp. is considering a Build-Operator-Transfer (BOT) contract to construct and operate a large dam with a hydroelectric power generation facility in a developing nation in the southern hemisphere. The initial cost of the dam is expected to be $30 million, and it is expected to cost $100,000 per year to operate and maintain. Benefits from flood control, agricultural development, tourism, etc., are expected to be $2.8 million per year. At an interest rate of 8% per year, should the dam be constructed on the basis of its conventional B/C ratio? The dam is assumed to be a permanent asset for the country.
Answer:
The dam should be constructed. The investment discounted payback is 25 years.
Explanation:
We have to make a cash flow for this case with the given data. See the document attached.
We consider an Initial cost of 30 millions in period 0, then we have every periods benefit of 2.800.000 and 100000 direct cost.
With those, is obtained net cash flow for each year (period), if we consider the given rate of interest, can be calculated the discounted cash flow
To know when this project covers all the investment, we have to consider the cumulative discounted cash flow. We have to see in the cash flow chart when the cumulative discounted cash flow break the 0 (became higher than 0).
In this case , that will be at period 25. So we have to wait 25 years to recover the initial cost. Considering that the dam usually has a lifetime higher than that time, the project at this scenario, should be done.
The conventional B/C ratio for the given dam is more than 1 if the company's rate of return is 8% per year. The conventional B/C ratio is 1.12. Hence, the dam should be constructed.
Further explanation:
Conventional Benefit-Cost Ratio: The Benefit-Cost ratio refers to the ratio, which represents the relationship between the benefits arising out of the project and the cost incurred on the project. This ratio is used for making a financial analysis of various projects. It is helpful in the evaluation of both public and private projects. The project can be chosen when its benefits are exceeding its cost. Conventional B/C ratio is computed by dividing the net benefits arriving out of the project with the net cost of the project. The net value of benefits is computed by subtracting the value of losses from the benefits. The net cost includes the initial and operating cost after subtracting the salvage value.
Compute the conventional B/C ratio:
[tex]\text{Conventional B/C ratio}=\dfrac{\text{Present value of benefits}}{\text{Initial cost + Present value of operating and maintenance cost}}\\=\dfrac{\$35,000,000}{\$30,000,000+\$1,250,000}\\=\dfrac{\$35,000,000}{\$31,250,000}\\=1.12[/tex]
Therefore, the conventional B/C ratio for the given dam is more than 1 if the company's rate of return is 8% per year. The conventional B/C ratio is 1.12. Hence, the dam should be constructed.
Working note 1:
Compute the present value of benefits:
[tex]\text{Present value of benefits}=\dfrac{\text{Annual benefits}}{\text{Interest rate}}\\=\dfrac{\$2,800,000}{0.08}\\=\$35,000,000[/tex]
Hence, the present value of the benefits from dam is $35,000,000.
Working note 2:
Compute the present value of operating and maintenance cost:
[tex]\text{Present value of operating and maintenance cost}=\dfrac{\text{Annual operating cost}}{\text{Interest rate}}\\=\dfrac{\$1,000,000}{0.08}\\=\$1,250,000[/tex]
Hence, the present value of the annual operating cost of dam is $1,250,000.
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Answer details
Grade: Senior School
Subject: Financial Accounting
Chapter: Time value of money
Keywords: Hemisphere Corp., Build-operator-transfer (BOT), contract to construct, hydroelectricity power generation station, developing nation, $30 million, expected to cost, benefits from flood control, agricultural development, tourism, dam be constructed, conventional B/C ratio, dam is assumed to be constructed, permanent asset, for the country, southern hemisphere, large dam, time value of money, present value of money, contract to construct, developing nation, cost ratio, expected to be $2.8 million, operate and maintain.
1. What are the benefits of creating a comprehensive crisis response plan before a crisis happens? Please research and share at least 1 example of an organization that created and then used such a plan. What happened?
Answer: the benefits are many but mainly if a company has a comprehensive crisis response plan then it is prepared to deal with unforseeable problems that will always appear in a company life.
One great example of a comprehensive crisis response plan was Ford's Bailout. Although Ford did not receive TARP funds, it did receive government loans. These were critical because banks were not lending during the financial crisis. It requested a $9 billion line-of-credit from the government.
Explanation:
Crisis management is the application of strategies designed to help an organization deal with a sudden and significant negative event. A crisis can occur as a result of an unpredictable event or as an unforeseeable consequence of some event that had been considered a potential risk.
Most companies are schooled in establishing a crisis management plan in order to react quickly and eliminate the problem. Here is the process: Identify and define the crisis. Establish an overall corporate response.
What is the difference between Special warranty deed vs general warranty deed
General warranty deed and Special warranty deed are warranty deeds used for real estate sales where belongings, either residential or commercial, is transferred between organization unacquainted with each other. Possession of a property is transferred from the seller to the buyer with definite assurance against future problems or claims, which will defend the buyer against fraud.
However, the assurance in a General warranty deed will cover the belongings entire previous account, the Special warranty deed will only covers the time period for which the seller owned it. While the seller in a General warranty deed has to protect the title against all other assertion and compensate the buyer for any tentative debts or amends, the seller in Special warranty deed is only responsible for debts and problems accumulated or caused during his possession of the belongings.
A General Warranty Deed offers full protection covering the property's entire history, while a Special Warranty Deed only covers the period of the seller's ownership, offering limited protection.
Explanation:The key difference between a Special Warranty Deed and a General Warranty Deed lies in the level of protection offered to the buyer. A General Warranty Deed offers the highest level of protection as it covers the property's entire history. The seller guarantees that he or she holds a clear title and has the right to sell the property, and there are no encumbrances or liens against it. A Special Warranty Deed, on the other hand, provides limited protection because it only covers the period during which the seller owned the property. Any issues or disputes arising from before the seller's ownership are not covered.
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In its income statement for the year ended December 31, 2019, Sheridan Company reported the following condensed data. Operating expenses $ 759,720 Interest revenue $ 29,970 Cost of goods sold 1,334,200 Loss on disposal of plant assets 15,910 Interest expense 71,270 Net sales 2,416,300 Other comprehensive income 6,920. Prepare a multiple-step income statement. (List other revenues before other expenses.)
Final answer:
To prepare a multiple-step income statement for Sheridan Company, list the revenue and expense items separately. Calculate the total revenue, total expenses, and net income by summing the respective items. The net income for Sheridan Company is $272,090.
Explanation:
A multiple-step income statement categorizes revenues and expenses into different sections to provide a clearer picture of a company's financial performance. To prepare a multiple-step income statement for Sheridan Company, we can list the various revenue and expense items in the following manner:
Revenue
Net Sales: $2,416,300
Interest Revenue: $29,970
Other Revenues: $6,920
Cost of Goods Sold
$1,334,200
Operating Expenses
$759,720
Other Expenses
Loss on Disposal of Plant Assets: $15,910
Interest Expense: $71,270
Total Revenue
(Net Sales + Interest Revenue + Other Revenues) = $2,416,300 + $29,970 + $6,920 = $2,453,190
Total Expenses
(Cost of Goods Sold + Operating Expenses + Other Expenses) = $1,334,200 + $759,720 + $15,910 + $71,270 = $2,181,100
Net Income
(Total Revenue - Total Expenses) = $2,453,190 - $2,181,100 = $272,090
Therefore, the multiple-step income statement for Sheridan Company for the year ended December 31, 2019, shows a net income of $272,090.
________ is a form of short-term financing. Businesses buy merchandise from their suppliers, but are not required to pay for their purchases until some future date.3
Answer:
TRADE CREDITExplanation:
Trade Credit is the credit extend by the account payable, according terms with the suppliers, which can be free of interest for a certain ammount of time (n/30) and from there they start to generate interest.
Remember:
Short-term financing are financing tools used for period of less than a year
Other short-term financing are:
Short-erm LoansFactoringBusness line of creditInvoice discountingThe right answer to fill in the missing parts of the problem is Trade credit.
Further explanationCredit is the granting of the use of money or goods to another person at a certain time with a guarantee or not with collateral, by providing services of interest, or without interest.
In general, types of loans can be classified based on their use, purpose, period, and business sector.
Type of credit Based on its use
1. Investment Credit
It is a credit given by a bank for business expansion or development purposes.
2. Working Capital Loans
It is a credit given by a bank to increase the production operation capability of a company.
Types of Credit-Based on Purpose
1. Earning Credit
Used to increase business or production or investment
2. Consumer credit
It is a credit given by banks to the public for personal or institutional consumption.
3. Trade Credit
Credit given by banks to buy commodities or goods to be traded or resold. Debt payments are expected from the sale of the merchandise.
Type of Credit-Based on Term
1. Short-term Credit
Loans with maturities of less than one year or a repayment maturity of at most one year.
2. Medium-term Credit
Medium-term loans are loans issued by banks with repayment periods ranging from one year to three years.
3. Long-term Credit
Long-term credit is a loan that has a repayment period of more than 3 years or 5 years.
Business Sector Based Credit
1. Agricultural Credit
Loans disbursed to finance the agricultural sector or smallholder plantations.
2. Farm Credit
Credit issued to finance the livestock business sector with short-term or long-term credit
3. Industrial Credit
Loans disbursed by banks to finance small, medium or large industrial sectors.
4. etc.
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Class: College
Subject: Bussines
Keyword: Type of credit.
Robert only consumes X and Y, and his indifference curves have the usual convex shape. Consider the consumption bundles (3, 9), (6, 6), and (9, 3) (Hint: The consumption bundles completely exhaust Robert's income). If Robert is indifferent between (3, 9) and (9, 3), then:
Answer: Then consumption bundle (3,9) and (9,3) will lie on the same indifference curve.
Since his consumption bundles completely exhaust his income , therefore the indifference curve will be tangential to the budget constraint.
Explanation:
Given : Robert only consumes X and Y, and his indifference curves have the usual convex shape.
Consumption Bundles (3, 9), (6, 6), and (9, 3).
If Robert is indifferent between (3, 9) and (9, 3), then: consumption bundle (3,9) and (9,3) will lie on the same indifference curve.
Also, since his consumption bundles completely exhaust his income , therefore the indifference curve will be tangential to the budget constraint.
The ending inventory of finished goods has a total cost of $9,500 and consists of 600 units. If the overhead applied to these goods is $3,600, and the overhead rate is 80% of direct labor, how much direct materials cost was incurred in producing these units?
Answer:
Direct Materials = 1,400
Explanation:
Using the total cost formula we will solve for materials
total cost = materials + labor + MOH
the total cost is a given.
MHO is a given also.
The labor can be expressed as a percent or MOH using the rate
If MHO = 80% LABOR THEN
MHO/80% = LABOR
3600/0.80 = 4500
now posting the know values un the formula:
9,500 = DM + 4,500 + 3,600
DM = 9,500 - 4,500 - 3,600
DM = 1,400
During a year, Teri’s monthly sales compensation ranged between $22,000 and $30,000 per month and units sold ranged between 1,400 and 2,200 units for those same months. Required: Use the high–low method to determine Teri’s monthly salary and commission rate per unit sold and then calculate the total number of units sold in a year when Teri’s total compensation amounted to $291,000. (Round your "Commission rate" to 2 decimal places.)
Answer:
8,000 = fixed cost
10 unit cost
Explanation:
High low method calcualtes the difference to get the variable cost:
2,200 units generated 30,000 (fixed + variable)
minus
1,400 units generated 22,000 (fixed + variable)
800 8,000 variable
800 units generated $8,000 of cost
$8,000 / 800 untis = 10 unit cost
Now we solve for fixed cost
total cost = fixed cost + variable cost
total cost = fixed cost + quantity x variable unit cost
30,000 = fixed + 2,200 x 10
30,000 = fixed + 22,000
30,000 - 22,000 = fixed
8,000 = fixed cost
Joiner Corporation recently purchased 25,000 gallons of direct material at $5.60 per gallon. Usage by the end of the period amounted to 23,000 gallons. If the standard cost is $6.00 per gallon and the company believes in computing variances at the earliest point possible, the direct-material price variance would be calculated as: A) $800F. B) $9,200F. C) $9,200U. D) $10,000F. E)$10,000U.
Answer:
B) 9,200 Favourable
Explanation:
Direct Materials price variance:
Actual Quantity * (Standart Cost - Actual Price ) = Direct Materials price variance
23,000 * (6 - 5.6) = 23,000 * 0.4 = $9,200 Favourable
The Standar cost as any other costing system is done to valuate the finished goods, the gallons used in production are 23,000 so cost and cost varaince are done using this as actual quantity.
The other 2,000 are still on raw materials inventory for the company. They are not part of Work in progress so they are excluded from the calculation.
The company believes in computing variances at the earliest point possible, the direct-material price variance would be calculated as $9,200 favorable. Thus option B is correct
What is direct material?The price of direct materials is directly related to the unit of manufacturing and is immediately identifiable. For instance, the price of windows is really a direct labor expense in the production making lamps. The primary component needed for the production of commodities or commodities was substance.
The formula that will be used is for Direct Materials price variance
Direct Materials price variance = Actual Quantity * (Standart Cost - Actual Price)
= 23,000 * (6 - 5.6)
= 23,000 * 0.4
= $9,200 which is Favourable
Therefore, option B is the correct option.
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Matthew's Fish Fry has a monthly target operating income of $8,300. Variable expenses are 80% of sales and monthly fixed expenses are $800. What is the monthly margin of safety as a percentage of target sales in dollars?
Answer:
Margin of Safety as percent of sales 91.21%
Explanation:
[tex]Sales \: Revenue - Variable \: Cost = Contribution \: Margin[/tex]
If variable = 80% of sales then
sales - 80% sales = .20 sales = Contribution margin ratio
Next will be calcualte the BEP
[tex]\frac{Fixed\:Cost}{Contribution \:Margin \:Ratio} = Break\: Even\: Point_{dollars}[/tex]
800/0.2 = 4,000
Sales to achieve target income of 8,300
[tex]\frac{Fixed\:Cost + taget \: profit}{Contribution \:Margin \:Ratio} = Sales\: to\: Profit{dollars}[/tex]
(800+8,300)/.2 = 45,500
Margin of safety:
[tex]\frac{current \:sales - BEP_{USD}}{current \:sales} \times 100 = margin \: of \: safety[/tex]
[tex]\frac{45,500 - 4,000}{45,500} \times 100 = 91.21%[/tex]
Super Clinics offers one service that has the following annual cost and utilization estimates: Variable cost per visit $10; Annual direct fixed costs $50,000; Allocation of overhead costs $20,000; Expected utilization 1,000 visits. What price per visit must be set if the clinic wants to make an annual profit of $10,000 on the service?
Answer:
Price to be charged per visit = $90 per visit
Explanation:
We need to calculate the price per visit.
Desired profit = $10,000
Total costs for 1,000 visits = Variable Costs + Fixed Costs + Allocated Costs
Variable cost = $10 X 1,000 visits = $10,000
Fixed costs = $50,000
Allocated Overhead costs = $20,000
Total costs = $10,000 + $50,000 + $20,000 = $80,000
Total amount to be recovered = Total costs + desired profit
= $80,000 + $10,000 = $90,000
Total no of visits = 1,000
Price to be charged per visit = $90,000/1,000 = $90 per visit
Super Clinics must set a price of $90 per visit to reach a desired profit of $10,000, given their costs and estimated number of visits.
To calculate the price per visit that Super Clinics must set to achieve an annual profit of $10,000, we need to consider the total costs and the desired profit. The total costs include both variable costs and fixed costs. Variable costs per visit are given as $10, and with expected utilization of 1,000 visits, the total variable costs would be $10,000. We also have annual direct fixed costs of $50,000 and an allocation of overhead costs of $20,000. Adding these figures together results in total annual costs of $80,000 ($10,000 variable + $50,000 fixed + $20,000 overhead).
To achieve a profit of $10,000, the clinic must earn total revenue that is $10,000 more than the total costs. Therefore, the target total revenue is $90,000 ($80,000 total costs + $10,000 profit). To find the price per visit, we divide the target total revenue by the expected number of visits. This gives us $90,000 / 1,000 visits = $90 per visit.
A Hummer is rated at 13 miles per gallon of gas and gas currently costs approximately $2.85 per gallon. If you drive from Orlando, Florida to San Francisco, CA (2,890 miles), how much money will you spend on gas? Assume it is a one-way trip.
Answer:
If a Hummer is rated at 13 miles per gallon of gas, which costs approximately $2.85 per gallon, and I'm driving 2,890 miles from Orlando, FL, to San Francisco, CA, I will spend $633.55 in gas.
Explanation:
13 miles per gallon --- $2.85
2890 miles in total from Orlando, Florida, to San Francisco, California.
2890/13: total gallons of gas consumed --- 222,3 gallons of gas
222,3 x 2.85: total of money spent in gas --- $633.55
Renault has created a way to generate high profits on low-priced automobiles by using simple designs that incorporate components from older car designs and a no-discount retail policy. They are using a(n) ______________ strategy.
Answer:
The correct answer is overall cost leadership.
Explanation:
Companies usually use the strategy of overall cost leadership to be more competitive and get some advantage by creating a low-cost-position among its competitors. In other words, the strategy tends to give the company the ability to keep lower prices than its competitors by increasing productivity and efficiency, eliminating waste, or controlling costs.
The Assembly Department started the month with 24,900 units in its beginning work in process inventory. An additional 309,900 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 29,900 units in the ending work in process inventory of the Assembly Department. How many units were transferred to the next processing department during the month
Answer:
304900 units should be transferred to the next processing department during the month.
Explanation:
Work in process : As a name suggest, the Work in process (WIP) is a process in which the work is in under processing or we can say it is not 100 % completed. It can be incomplete in any cycle .
It includes various cost like - direct material , direct labor, overhead, etc.
To find out how much units is to be transferred, the following equation is used which is shown below.
= Opening Work in process inventory + Purchase of inventory - closing work in progress inventory
= 24,900 units + 309,900 units - 29,900 units
= 304900 units
Thus, 304900 units should be transferred to the next processing department during the month.
Final answer:
The number of units transferred to the next processing department is calculated by adding the beginning work in process inventory and the units transferred in, then subtracting the ending work in process inventory. In this scenario, 304,900 units were transferred to the next department.
Explanation:
The student's question is about calculating the number of units transferred to the next processing department in the context of production and inventory management. To find the number of units transferred, we need to consider the total number of units available for processing and subtract the ending work in process inventory.
Here is the calculation:
Beginning work in process inventory: 24,900 unitsUnits transferred in: 309,900 unitsEnding work in process inventory: 29,900 unitsUnits transferred to the next process = (Beginning inventory + Transferred in) - Ending inventoryUnits transferred to the next process = (24,900 + 309,900) - 29,900Units transferred to the next process = 304,900 unitsTherefore, 304,900 units were transferred to the next processing department during the month.
______________ are people who invest very small amounts of personal resources early in a new business's life in the hopes of eventually selling a percentage of the company for a profit.A.Angel investorsB.CrowdfundersC.Advisory boardsD.MicrolendersE.Venture capitalists
Answer: the correct answer is A. Angel investors.
Explanation:
Angel investors are people who invest very small amounts of personal resources early in a new business's life in the hopes of eventually selling a percentage of the company for a profit.
Beck Company has inventory of $725,000 in its stores as of December 31. It also has two shipments in transit that left the suppliers' warehouses by December 28. Both shipments are expected to arrive on January 5. The first shipment of $210,000 was sold f.o.b. destination and the second shipment of $102,000 was sold f.o.b. shipping point. Beck Company also has consigned goods of $72,000 awaiting sale with Meyer Company. What amount of inventory should Beck Company report on its balance sheet as of December 31?
Answer:
Total Inventory $899,000
Explanation:
Inventory at hand $725,000
Inventory in transit $102,000
Inventory in consignation $72,000
Total Inventory $899,000
Notice:
The first cargo is under term FOB destination, which means the goods are still property of the seller, so are not part of Beck company's yet.
While the second cargo is fob shipping point, Beck assume possesion of the gods as soon as they enter the dock.
Suppose two firms, A and B, are simultaneously considering entry into a new market. If neither enters,both earn zero. If both enter, they both lose 100. If one firm enters, it gains 50 while the other earns zero. Set up the payoff matrix for this game and determine if any Nash equilibria exist. Can you predict the outcome? What if firm A gets to decide first?
Answer: The answer is as follows:
Explanation:
The payoff matrix for this game is shown in the image.
The nash equilibrium in this game exist when both the firms do not enter into a new market. The nash equilibrium outcome is (0,0), at this choice both the firms didn't loose anything.
If firm A gets to decide first then it would choose not to enter into the new market, this will gives (0,50) & (0,0) outcome and if it chooses to enter then this will gives (-100,-100) & (50,0).
The payoff matrix for the game is as follows:
Firm B Does Not Enter Firm B Enters
Firm A Does Not Enter (0, 0) (-100, -100)
Firm A Enters (-100, -100) (50, 0)
Explanation:Nash equilibrium occurs when no player can improve their payoff by unilaterally changing their strategy. In this game, there is a unique Nash equilibrium where both firms choose not to enter the market, resulting in a payoff of (0, 0). If Firm A gets to decide first, it will choose not to enter, as entering would result in a worse outcome regardless of Firm B's decision. Therefore, the outcome would still be both firms not entering, with a payoff of (0, 0).
Jason's gross pay for the week is $ 1,000. His yearly pay is under the limit for OASDI. Assume that the rate for state and federal unemployment compensation taxes is 6% and that Jason's year-to-date pay has not yet exceeded the $ 7,000 cap. His yearly pay is under the limit for OASDI. What is the total amount of payroll taxes that his employer must record as payroll tax expenses? (Do not round your intermediate calculations. Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%.)
Answer:
Total payroll taxes 213
Explanation:
the employeer will have to record the taxes on the wages plus the taxes on his behalf
1,000 x 6.2 = 62
1,000 x 1.45 = 14.5
Total 76.5 for the employee
Then the employer must pay the same amount of taxes.
employer taxes 76.5
Total for OASDI and Medicare: 153
Then FUTA&SUTA 6% of 1000 60
Total payroll taxes 213