A bakery makes a limited number of croissants each day for sale in its coffee shop. The croissants cost $1.00 each to produce and sell for $2.00 each. Leftover croissants are sold in the bakery the following day for $0.60 each, and all of those are sold

The excess cost is:
The shortage cost is:
The optimal service level is

Answer:

Business diversion

Explanation:

The above scenario is an example of business diversion type of scheme  whereby Johanna diverted her employer new client in order to generate her personal income, and it happens without the knowledge of her boss

Answer:

Form A $4.6 overhead per unit

Form B $ 7.2 overhead per unit

Explanation:

Missing Information attached

For molding the overhead will not change as the total horus are the same:

1,200 + 3,800 = 5,000 machine hours

$ 375,000   / 5,000 = $ 75

Then, we multiply:

1,200 x $ 75 =   $  90,000

3,800 x $ 75 = $ 285,000

Then, for Polishing:

5,000 + 15,000 = 20,000

$ 100,000 / 20,000 = $5

5,000 x $5 =  $ 25,000

15,000 x $5 = $ 75,000

Form A 90,000 + 25,000 = 115,000

overhead per unit: 115,000 / 25,000 = 4.6

Form B 285,000 + 75,000 = 360,000

overhead per unit 360,000 / 50,000 =  7.2

Answer:

The answer is D. All of the above

Explanation:

The Capital structure of most companies comprise equity, debt and/or preference shares. All these that made up capital structure has cost or let's say return. We have cost of capital, cost of debt, cost of preference shares.

Therefore, weighted average cost of capital is average of the cost of each financing​ component(cost of capital, cost of debt and cost of preference shares), weighted by the proportion of each component

All the options relates to the weighted average cost of capital(WACC).

The weighted average cost of capital (WACC) encompasses the cost of capital for the entire firm, including the cost of debt, equity, and preferred stock, weighted by their proportions in the total capital.

The weighted average cost of capital (WACC) is D. All of the above. It is the cost of capital for the firm as a whole, made up of three financing components: the cost of debt, the cost of preferred stock, and the cost of equity. Additionally, it is the average of the cost of each financing component, weighted by the proportion of each component in the overall capital structure. WACC is a crucial metric for firms as it represents the minimum return that a company must earn on its existing asset base to satisfy its creditors, owners, and other providers of capital, or they will invest elsewhere.

Remaining part of question:

In terms of Dmitri's total utility, it is worse for him to ________________ .

Taking into account the loss in utility that working hard brings to Dmitri, Sondra and Dmitri together _____________ better off if Dmitri works hard instead of shirking

Answer:

1. Put in more effort

2. Would be

Explanation:

1. Dmitri puts his personal cost at $20 if he shirks, an amount that is implies $80-$20=$60

he would be having over half of their total revenue.

2.

Yes, if they both work hard, Dmitri will earn $80 on the beach and Frances will earn $160 at her stand, so they will each take home half of their total revenue: $80/2+$160/2=$120 . However, if Dmitri fails to work hard all of them would receive lesser returns.

Dmitri faces a dilemma to either work hard or shirk while selling water at the beach. Considering his personal cost, working hard results in a net gain of $100 compared to $60 if he shirks. The situation highlights principles of business economics and labor incentives.

Answer:

Materials price variance = 1000 Favorable

Material Quantity Variance= 3300 unfavorable

2-a) Direct Labor Rate variance =3700 Unfavorable

Direct labor time variance=2760 Unfav

Explanation:

Given

Standard Quantity: Direct materials: 8 microns per toy

Standard Price  $0.33 per micron

Standard hours :Direct labor: 1.4 hours per toy

Standard rate   $6.90 per hour

Actual Production 5,000 Maze toys.

Working

Actual Quantity Purchased: Direct materials: 74,000 microns

Actual Price $0.31 per micron.

Actual Quantity  used =74,000 microns- 24,000 = 50,000 microns

Standard Quantity Allowed = 8 * 5000= 40,000 microns

Actual hours: Direct labor: 7,400 direct labor-hours

Standard Hours allowed= 5000 units * 1.4= 7000 labor hours

Actual rate = $54,760/7400=$ 7.4 per hour

Calculations

1-a) Materials price variance = (Actual Price - Standard Price )* Actual Quantity

Materials price variance = (0.31- 0.33)50,000= 1000 Favorable

Material Quantity Variance= (Standard Price) *( Actual Quantity- Standard Quantity)

Material Quantity Variance=(0.33) - (50,000- 40,000) = 0.33*10,000= 3300 unfavorable

2-a) Direct Labor Rate variance= (actual hours)* actual rate- standard rate

= 7,400 (7.4-6.9)= 7400*0.5= 3700 Unfavorable

Direct labor time variance=standard rate* (actual hours )- (standard hours )

= 6.9 ( 7400- 7000) = 6.9 * 400=  2760 Unfav

Answer:

5.76%

Explanation:

The solution is as follows,

=> (1 + 0.10) = (1 + r) * (1 + 0.04)

=> r = (1.1 / 1.04) - 1

=> r = 5.76%

Hope this clear things up.

Thankyou.

Answer:

The real rate of return on this bond is 5.77%

Explanation:

1. Let's review the information given to us to answer the question correctly:

Nominal rate = 10% = 0.1

Inflation rate = 4% = 0.04

2.  What is the real rate of return on this bond?

Let's recall the formula of the Real Rate of Return:

Real Rate of Return = (1 + Nominal rate/1 + Inflation rate) - 1

Replacing with the values we know, we have:

Real Rate of Return = (1 + 0.1/1 + 0.04) - 1

Real Rate of Return = 1.0577 - 1

Real Rate of Return = 0.0577 or 5.77%

Answer:

a) 2179 parkas

b) 0.7389

c) 174 customers

d) 10,772

Explanation:

Given:

Bower's selling price =$22

Salvage value: $0

Cost price = $12

Mean distribution= 2300 parkas

S.d = 1100 parkas

a) Number of parkas Teddy Bower should buy from Teddysports to maximize profit:

Let's first calculate overage(Co) and underage (Cu) cost.

•Cu = Selling price - Cost price

= $22 - $12

= $10

Underage cost = $10

•Co = Cost price - Salvage value

= $12 - $0

= $12

Overage cost = $12

Let's now find the critical ratio with the formula:

[tex] \frac{C_u}{C_u+C_o}[/tex]

[tex]= \frac{10}{12+10} [/tex]

= 0.4545

From the Excel function NORMSINV, the corresponding z value is =

NORMSINV(0.4545)

z value = -0.11

For the number of parkas Teddy Brown should order, we have:

Quantity = Mean +(z*s.d)

= 2300+ (-0.11 * 1100)

= 2179 parkas

b) for z value corresponding to expected sales of 3000 parkas, we have:

z value = (expected demand -mean)/s.d

[tex] \frac{3000-2300}{1100}[/tex]

= 0.64

From the Excel function NOEMSDIST, the corresponding probability =

NORMSDIST(0.64)

= 0.7389 = 73.89%

In stock probability = 0.7389

c) For L(0.64) using the standard normal loss function table, L(z) =

L (0.64) = 0.158

For expected lost sales, we have:

S.d * L(z)

= 1100* 0.158

= 173.8

= 174.

On average, there is expected to be a turn away of 174 customers due to shortage.

d)

Lets first calculate expected sales and left over inventory.

•Expected sales = Mean -expected lost sales

= 2,300 - 174

= 2,126

•Left over inventory expected=

Expected demand - Expected lost sales

= 3000 - 2126

= 874

For expected profit, we have:

[tex] (C_u* Expected lost sales)-(C_o* Expected leftover inventory)[/tex]

=($10*2126)-($12*874)

= $10,772

Profit expected = $10,772

Labor costs for the week are determined by multiplying the number of admissions by the standard times and the employee hourly wage. The standard hours are calculated by summing the time for all admissions, and the time variance shows how actual performance compares to standards.

The question pertains to the evaluation of labor costs and variance for an admissions department in a hospital. To calculate the labor cost for the week, the total number of admissions is multiplied by the respective standard times and then by the hourly wage of the employees. The standard hours are found by adding the total time taken for both unscheduled and scheduled admissions. The time variance is calculated by subtracting the actual labor hours used from the standard hours for the actual volume of work. The variance indicates whether the department performed better (a negative variance) or worse (a positive variance) than the standard.

Answer:

HAND RULE DAMAGES ARE : THEY EQUAL THE REASONABLE BURDEN OF PRECAUION DIVIDED BY THE RESULTING REDUCTION IN THE PROBABILIY OF HARM. AS V IS INDIFFERENT BETWEEN $15000 INCREASE AND AN INCREASE OF .01 IN THE PROBABILITY OF CANCER DEATH.

THUS HAND RULE DAMAGES ARE $15000 / 0.1 = $1.5 MILLION.

SINCE IT IS AN OBJECTIVE COST AND SINCE V WAS INDIFFERENT AS NO COST WAS ACCEPTABLE FOR HIS LIFE , SO IT IS IMPLICITLY INCLUDED

Explanation:

HAND RULE DAMAGES ARE : THEY EQUAL THE REASONABLE BURDEN OF PRECAUION DIVIDED BY THE RESULTING REDUCTION IN THE PROBABILIY OF HARM. AS V IS INDIFFERENT BETWEEN $15000 INCREASE AND AN INCREASE OF .01 IN THE PROBABILITY OF CANCER DEATH.

THUS HAND RULE DAMAGES ARE $15000 / 0.1 = $1.5 MILLION.

SINCE IT IS AN OBJECTIVE COST AND SINCE V WAS INDIFFERENT AS NO COST WAS ACCEPTABLE FOR HIS LIFE , SO IT IS IMPLICITLY INCLUDED.

Final answer:

Hand rule damages for Victim V's heirs would be $16,000, combining the $15,000 that V valued the increased risk of dying from cancer and the additional $1,000 spent on moving to an area with better air quality in an attempt to mitigate the risk.

Explanation:

The question involves calculating Hand rule damages, which are based on the economic principle of the Hand formula (B < PL) used to determine negligence and potential liability costs.

Here, we're given that Victim V would have paid $15,000 to avoid the increased risk of dying from lung cancer due to chemical exposure, representing the economic valuation of the risk. Therefore, if the accident increased the probability of death from 0.01 to 0.02 over twenty years, the increase in risk is valued at $15,000, which is the amount Victim V would have accepted to take on the risk.

As for the $1,000 spent on moving to a better air quality area, this is separate from the calculation of the Hand rule damages. The expense is a mitigation cost incurred post exposure to try and reduce the harm from the chemical exposure. Consequently, it should be added to the Hand rule damages as it represents an additional loss directly related to the exposure.

The total Hand rule damages for V's heirs would therefore be the $15,000 valuation of the risk of death plus the $1,000 mitigation cost, totaling $16,000.

Answer:

$72,400

Explanation:

The preparation of the Cash Flows from Operating Activities - Indirect Method is presented below:

Cash flow from Operating activities - Indirect method

Net income $61,000

Adjustment made:

Add : Depreciation expense $17,000

Less: Increase in accounts receivable -$6,100

Add: Decrease in inventory $3,800

Less: Decrease in accounts payable -$3,300

Total of Adjustments $11,400

Net Cash flow provided Operating activities $72,400

The items in minus sign reflects the cash outflow and the items in plus sign shows the cash inflow

Answer:

E. is any paid form of nonpersonal presentation of ideas, goods, or services by an identified sponsor.

Explanation:

Answer:

a. Recognized Gain $0 and Basis in new building $250,000

b. Recognized Gain $0 and Basis in new building $300,000

c. Recognized Gain $50,000 and Basis in new building $250,000

d. Recognized Gain $200,000 and Basis in new building $450,000

Explanation:

a. Baker has reinvested the insurance proceeds and therefore will not recognize any of its $200,000 realized gain. Moreover, Baker’s basis in the new building is $250,000. As shown below:

S. No.     Particular                                   Amount($)       Clarification

  1           Insurance Proceeds                    450,000     Given in Question

  2          Adjusted Value                            250,000    350,000 - 100,000

  3          Realized Gain                               200,000    (1) – (2)

  4          Proceeds Reinvested                  450,000     Given in Question

  5          Amount not Reinvested                     0           (1) – (4)

  6          Gain recognized                                 0           Lower of (3) or (5)

  7           Deferred Gain                              200,000     (3) – (6)

  8           Value of Replacement Property 450,000     Given in Question

  9           Basis of Replacement Property  250,000     (8) – (7)

b. Baker has reinvested the insurance proceeds and therefore will not recognize any of its $200,000 realized gain. Moreover, Baker’s basis in the new building is $300,000. As shown below:

S. No.     Particular                                   Amount($)       Clarification

  1           Insurance Proceeds                    450,000     Given in Question

  2          Adjusted Value                            250,000    350,000 - 100,000

  3          Realized Gain                               200,000    (1) – (2)

  4          Proceeds Reinvested                  500,000     Given in Question

  5          Amount not Reinvested                     0           (1) – (4)

  6          Gain recognized                                 0           Lower of (3) or (5)

  7           Deferred Gain                              200,000     (3) – (6)

  8           Value of Replacement Property 500,000     450,000 + 50,000

  9           Basis of Replacement Property  300,000     (8) – (7)

c. Baker has reinvested $400,000 of the insurance proceeds and therefore will recognize gain of $50,000 out of the $200,000 realized gain. Moreover, Baker’s basis in the new building is $250,000. As shown below:

S. No.     Particular                                   Amount($)       Clarification

  1           Insurance Proceeds                    450,000     Given in Question

  2          Adjusted Value                            250,000    350,000 - 100,000

  3          Realized Gain                               200,000    (1) – (2)

  4          Proceeds Reinvested                  400,000     Given in Question

  5          Amount not Reinvested               50,000       (1) – (4)

  6          Gain recognized                            50,000      Lower of (3) or (5)

  7           Deferred Gain                              150,000     (3) – (6)

  8           Value of Replacement Property 400,000     450,000 - 50,000

  9           Basis of Replacement Property  250,000     (8) – (7)

d. Baker has taken three years in order to replace the property destroyed and therefore, will recognize all of its $200,000 realized gain. Baker's basis in the new building is $450,000. As shown below:

S. No.     Particular                                   Amount($)       Clarification

  1           Insurance Proceeds                    450,000     Given in Question

  2          Adjusted Value                            250,000    350,000 - 100,000

  3          Realized Gain                               200,000    (1) – (2)

  4          Proceeds Reinvested                        0            Given in Question

  5          Amount not Reinvested               450000      (1) – (4)

  6          Gain recognized                           200,000     Lower of (3) or (5)

  7           Deferred Gain                                     0           (3) – (6)

  8           Value of Replacement Property  450,000    Given in Question

  9           Basis of Replacement Property   450,000    (8) – (7)

Final answer:

The student has asked about the realized and recognized gains or losses on a destroyed property and the basis in the rebuilt property for Baker Corporation. Baker's realized gain in all scenarios is $200,000, which can be deferred if the insurance proceeds are reinvested in rebuilding the property. The tax basis of the rebuilt property varies depending on the additional amount spent over the insurance proceeds.

Explanation:

The student is asking about the realized and recognized gain or loss on an involuntary conversion of property due to a disaster, and the basis for the new property. This falls under the tax treatment of property and gains which is a Business topic, specifically within Taxation.

Firstly, realized gain or loss is the difference between the amount of insurance proceeds received and the adjusted basis of the destroyed property. The adjusted basis is the original cost of the property minus any depreciation claimed. In this scenario, the adjusted basis of Baker's building is $250,000 ($350,000 original purchase price - $100,000 total depreciation).

Recognized gain or loss is the amount of the realized gain or loss that is actually reportable for tax purposes. If all the insurance proceeds are reinvested in similar property within a specified time period, the realized gain is not recognized, thus deferring the tax on the gain (called a like-kind exchange).

Scenario a: Baker has a realized gain of $200,000 ($450,000 insurance proceeds - $250,000 adjusted basis). However, since Baker spent the entire insurance proceeds on rebuilding within the same year, the gain is not recognized. Baker's basis in the new building is the old building's adjusted basis plus any additional costs, which in this case is just the adjusted basis of $250,000.

Scenario b: Similar to Scenario a, Baker has a realized gain of $200,000 with no taxable recognition since the proceeds were reinvested, but Baker's basis in the new building would be higher at $300,000 ($250,000 adjusted basis + $50,000 extra spent).

Scenario c: Baker still has a realized gain of $200,000. Baker will recognize the gain to the extent the insurance proceeds exceed the cost of the new property. The recognized gain is $50,000 ($450,000 insurance proceeds - $400,000 spent on new building). The basis of the new building would be the cost of the new building, which is $400,000.

Scenario d: As with Scenario a, Baker has a realized gain of $200,000, which is not recognized provided that the entire amount is expended on rebuilding within a certain period, typically two years after the year of the loss for non-personal-use property. Baker's basis in the new property remains the same as in scenario a, $250,000.

We find that the call premium is approximately $82.23. Therefore, the correct answer is option E: $82.23.

To determine the call premium at the end of five years that would yield the purchaser the same nominal rate of 6% compounded quarterly if the bond is called, we need to compare the yields under the two scenarios: one where the bond is held to maturity, and the other where it is called after five years.

First, let's calculate the present value of the bond if it is held to maturity:

The bond pays quarterly coupons of 8%, so the quarterly coupon payment is [tex]0.08 \times \frac{1000}{4} = $20.[/tex]

The bond matures in ten years, and the yield is 6% compounded quarterly, so the quarterly yield rate is:

0.06/4 = 0.015.

Using the present value formula for a bond, we get:

[tex]PV_{\text{hold to maturity}} = \frac{C}{{(1 + r)^n}} + \frac{C}{{(1 + r)^{n-1}}} + \ldots + \frac{C}{{(1 + r)^1}}} + \frac{M}{{(1 + r)^n}}[/tex]

Where:

C is the quarterly coupon payment,

r is the quarterly yield rate, and

n is the total number of quarters.

[tex]P V_{\text {hold to maturity }}=\frac{20}{(1+0.015)^1}+\frac{20}{(1+0.015)^2}+\ldots+\frac{20}{(1+0.015)^{40}}+\frac{1000}{(1+0.015)^{40}}[/tex]

Now, let's calculate the present value if the bond is called at the end of five years. The call premium is the additional amount paid at the call date.

The call premium is the difference between the present value of the remaining payments if the bond is held to maturity and the present value of the remaining payments if the bond is called at the end of five years.

[tex]\begin{aligned}& P V_{\text {call premium }}=P V_{\text {hold to maturity }}- \\& \left(\frac{20}{(1+0.015)^{21}}+\frac{20}{(1+0.015)^{22}}+\ldots+\frac{20}{(1+0.015)^{40}}+\frac{1000}{(1+0.015)^{40}}\right)\end{aligned}[/tex]

Now, calculate both values and find the call premium:

[tex]P V_{\text {hold to maturity }} \approx \frac{20}{1.015}+\frac{20}{(1.015)^2}+\ldots+\frac{20}{(1.015)^{40}}+\frac{1000}{(1.015)^{40}}[/tex]

[tex]\begin{aligned}& P V_{\text {call premium }}=P V_{\text {hold to maturity }}- \\& \left(\frac{20}{(1.015)^{21}}+\frac{20}{(1.015)^{22}}+\ldots+\frac{20}{(1.015)^{40}}+\frac{1000}{(1.015)^{40}}\right)\end{aligned}[/tex]

After calculating these values, the correct result is approximately: 82.23

Complete Question:

A $1,000 par value 8% bond with quarterly coupons is callable five years after issue. The bond matures for 1000 at the end of ten years and is sold to yield a nominal rate of 6 percent compounded quarterly, calculated under the assumption that the bond will not be called, and is redeemed at maturity. Please determine the call premium at the end of five years, that would yield the purchaser the same nominal rate of 6% compounded quarterly if the bond is, in fact, called at the end of five years.

A. 67.82

B. 85.84

C. 60.54

D. The answer is not listed here

E. 82.23

Answer:

Price of call option =  $5.1772

Explanation:

given data

trading x = $50 per share

Current price So = $95

time = 3 month t = [tex]\frac{1}{4}[/tex] year

exercise price of $50, P = $4

risk-free interest rate r = 10%

solution

we use here formula from put-call parity for price of a 3-month call option on C.A.L.L. stock that is

Price of call option = P + So - \frac{x}{(1+r)^t}    .....................1

put here value and we will get

Price of call option =  $4 + $50 - \frac{50}{(1+0.10)^{1/4}}  

Price of call option =  $5.1772

Answer:

1. The preparation of balance sheet is shown below:-

2. $8,400

Explanation:

1 Balance sheet

December 31, 2019

Assets                                                  Amount

Current assets  

Accounts receivables                          $191,800

Allowance for uncollectible accounts   ($12,800)

Net accounts receivables                    $179,000

Working note:-

Net accounts receivables = $179,000

Gross accounts receivables = $191,800

Allowance for uncollectible accounts, December 31, 2019 = Gross accounts receivables - Net accounts receivables

= $191,800 - $179,000

= $12,800

2. Bad debt expense = Allowance for uncollectible accounts, December 31, 2019 - (Allowance for uncollectible accounts, January 1, 2019 - Uncollectible accounts written off during 2019)

= $12,800 - ($17,800 - $13,400)

= $12,800 - $4,400

= $8,400

Answer: Please refer to Explanation

Explanation:

Hello. Question was a bit incomplete so I attached the completing details.

a) Several stores in the mall sell hooded sweatshirts. Each store's sweatshirts reflect the style of that particular store. Additionally, some stores use higher-quality cotton than others, which is reflected in the apparel�s prices.

- No, not an identical product

This is not a Competitive Market because the products are not identical. They are differentiated by better quality and design and this is reflected in the price.

b) In a small town, there are two providers of broadband Internet access: a cable company and the phone company. The Internet access offered by both providers is of the same speed.

- No, not many sellers.

There are only 2 sellers in this market. This market is too SATURATED ( few companies) for it to be a Competitive Market as a Competitive Market requires that there be many buyers and sellers.

c) Dozens of companies produce plain white socks. Consumers regard plain white socks as identical and don't care who manufactures their socks.

- Yes, meets all the assumptions.

This market meets all the assumptions to be considered a Competitive Market. There are many buyers and sellers of the white socks. The firms in the market produce identical socks so much so that people don't know the difference. Markets like these usually have low barriers to entry hence the high amount of companies there.

d) Scholastik Inc. owns the U.S. copyright to a popular book series. It is the only company with the legal right to publish books in the series in the United States.

- No, no free entry.

As stated, Scholastik Inc. is the ONLY company with legal rights to publish books in that series in the US. This means that there are very high barriers to entry as Scholastik is protected by the law. No other company is allowed to do what they do so it is not a Competitive Market.

Competitive markets in the perfect competition model are defined by having a large number of buyers and sellers, producing identical (homogeneous) products, and allowing for free entry and exit from the market. These characteristics ensure that no single entity can influence market prices, promoting efficiency and equity in the market.

The perfect competition model is a fundamental concept in economics, describing a market structure where specific criteria are met to ensure a competitive environment. In this context, competitive markets are characterized by three core assumptions, which play a crucial role in shaping market dynamics and competition levels.

These characteristics ensure that the market operates efficiently, with prices reflecting the true supply and demand. Perfect competition models serve as a benchmark for comparing other market structures, such as monopolistic competition and oligopoly, where these assumptions do not fully apply.

Answer: B. Jean

Explanation:

Having Absolute Advantage in the production of a good means that you can produce more of that good given the same resources or at least the same Quantity as others given lower resources.

From the scenario above therefore, Jean has the Absolute Advantage in producing Cakes as Jean can bake 12 cakes in an hour while Vincent can only bake 10.

Answer:

7.6%

Explanation:

The formula for calculating the Required return is:

Required return = Dividend yield + Capital Gain Yield

Hence,

13% = Dividend Yield + 5.40%

Dividend Yield = 7.60%.

Hope this helps.

Goodluck.

Answer:

$250,000

Explanation:

The computation of the interest expense is shown below:

Given that

Net Income = $3,500,000

Tax rate = 30%

EBIT = $5,250,000

As we know that

EBT = EBIT - Interest Expense

So,

Interest expense = EBIT - EBT

where,

EBT = Net Income ÷ (1 -Taxes)

= $3,500,000 ÷ ( 1 - 30%)

= $5,000,000

And, the EBIT is $5,250,000

So, the interest expense is

= $5,250,000 - $5,000,000

= $250,000

We simply applied the above formula

Answer: Most likely Company A

Explanation:

Generally an increase in Capital Expenditure means that a company is investing more which would mean that revenue will increase in future which will give it a higher valuation.  

However, sometimes this spending might just be on Maintenance of Capital assets. When this happens the company is given a lower valuation.

Plainly speaking therefore, if Company A has a higher growth rate in Capital Expenditure because they are investing which is likely to be the case, then they would be more valuable than Company B.

Answer:

Order quantity = 478units

Reorder point = 420 per week

Explanation:

Given

Item cost =$8

Standard deviation of weekly demand = 20 per week

Order cost(C) = $207

Lead time = 3 weeks

Annual holding cost (H) = 24% of item cost

Service probability = 99%

Annual demand(D) = 27,400

Average demand = 548 per week

Order quantity = sqrt[(2 × D × C) ÷ H]

Order quantity = sqrt[(2 × 27400 × 207) ÷ (0.24 × 207)]

sqrt[ 11343600 ÷ 49.68]

= 477.84

Order quantity = 478 units

Reorder Point = Lead time × daily usage

21 × 20 = 420

Answer:

Total job costs added in October                                $ 19,000  

Explanation:

Computations

Job costs added to Work in Process inventory for October

Direct materials                                                              $ 4,000

Direct labor                                                                     $ 7,500

Overhead at 100 % of Direct Labor costs                    $  7,500

Total job costs added in October                                $ 19,000  

Final answer:

In October, job A3B had $4,000 in direct materials, $7,500 in direct labor, and $7,500 in overhead costs added to the Work in Process Inventory, totaling $19,000.

Explanation:

The job costs added to Work in Process Inventory during October for job A3B would include the additional direct materials and direct labor costs incurred in October, as well as the overhead applied based on the direct labor cost.

Since the company applies overhead at a rate of 100% of the direct labor cost, and the direct labor cost in October is $7,500, the overhead for October would also be $7,500.

Therefore, the total job costs added in October would be the sum of the additional direct materials of $4,000, the additional direct labor of $7,500, and the overhead of $7,500, resulting in a total of $19,000 added to the Work in Process Inventory.

Answer:

Reserve ratio = 31.11%

Currency drain ratio = 13.33%.

Explanation:

Reserve ratio = Reserves/Deposits = $280/$900 =  0.3111, or 31.11%

Currency drain ratio = Currency/Deposits = $120/$900 = 0.1333, or 13.33%

Therefore, reserve ratio is 31.11%, and currency drain ratio is 13.33%.

Answer: a) $0

b) $21,150

c)$52,100

Explanation:

a) Karen would recognize no gain or losses in this scenario.

b) Karen would carryover the basis on the land which is $21,150

c) To calculate her remaining basis, we subtract the cash payment as well as the basis for the land she was distributed.

Calculating would be,

= 80,825 - 7,575 - 21,150

= $52,100

$52,100 is Karen's remaining basis in her partnership interest.

Answer:

300 comic books

Explanation:

Purchasing power of money at any point in time is the quantity of goods and services that can be acquired using the stock of money at the prevailing price level.

As at the time the $3000 money was deposited, the price per book stood at $10.

Purchasing power of $3000

= $3000/$10

= 300 comic books

Answer:

$0.0824

Explanation:

Calculating the gain on the collar, we have:

Gain= (delta of stock)- (delta of call) + (delta of put)

Where,

Delta of call = N(d1) short call=0.7411

Delta of put = (N(d1) long put - 1) =

0.8235 - 1 = -0.1765

Therefore gain will be:

Gain = $1 - 0.7411 - 0.1765

= 0.0824

The gain on the collar by an increase of $1 in stock price is 0.0824

Final answer:

The question involves applying the dollar-value LIFO inventory method to adjust the year-end inventory for inflation, ensuring accurate valuation. It requires calculating the adjusted value of inventory considering changes in price levels to determine real changes in inventory quantity. Additionally, accounting profit is mentioned as a basic calculation of revenue minus expenses.

Explanation:

The question asks about the dollar-value LIFO (Last-In, First-Out) method, a technique used in accounting to value inventory and measure changes in the cost of products due to inflation. Under this method, a company measures and reports changes in the value of its inventory considering the price level changes. The inventory value at the beginning is given as $390,700 with a price level index of 100. By the end of the year, the inventory value is reported as $369,600 with a price level index of 112. To adjust the ending inventory to compare it fairly with the beginning inventory, we must account for the inflation using the given price indices. This involves converting the ending inventory value to the base year's price level.

To do this, we calculate the inflation-adjusted inventory value by dividing the December 31, 2020, inventory value by the price level index for that date (112) and then multiplying by the base price level index (100). This calculation adjusts the inventory value to reflect what it would have been in the base year, allowing a fair comparison to determine whether there has been a real increase or decrease in inventory quantity. Using this method ensures that the inventory valuation is not inflated merely due to increased prices, thereby providing a more accurate measure of inventory levels for financial reporting and analysis.

Accounting profit is another important concept in business, often calculated as sales revenue minus expenses. For instance, if a firm had sales revenue of $1 million and spent $600,000 on labor, $150,000 on capital, and $200,000 on materials, the firm's accounting profit would be $50,000, which is the remaining amount after subtracting total expenses from sales revenue.

Answer:

1. Because of the effects of diversification, the portfolio's risk is likely to be more than the average of all stocks' standard deviations  FALSE, IT IS EXACTLY THE OPPOSITE, SINCE THE PORTFOLIO'S RISK IS LIKELY TO BE SMALLER DUE TO DIVERSIFICATION.

2. The unsystematic risk component of the total portfolio risk can be reduced by adding negatively correlated stocks to the portfolio  TRUE, NEGATIVELY CORRELATED STOCKS ARE USED TO DECREASE A PORTFOLIO'S RISK

3. A portfolio's risk is likely to be smaller than the average of all stocks' standard deviations, because diversification lowers the portfolio's risk. TRUE, THIS STATEMENT IS JUST THE OPPOSITE OF STATEMENT 1 WHICH WAS FALSE.

Diversification helps to reduce the risk of a portfolio by spreading it across different assets.

1. False. Due to the effects of diversification, the portfolio's risk is likely to be less than the average of all stocks' standard deviations. Diversification helps to spread the risk across different assets, reducing the overall risk of the portfolio.

2. True. By adding negatively correlated stocks to the portfolio, the unsystematic risk component of the total portfolio risk can be reduced. This is because negatively correlated stocks tend to move in opposite directions, offsetting each other's risks.

3. True. A portfolio's risk is likely to be smaller than the average of all stocks' standard deviations because diversification lowers the portfolio's risk. Diversification helps to reduce the impact of individual stock price movements on the overall portfolio.

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Answer:

4.832

Explanation:

See attached file

Answer:

The correct answer is Decrease ROI by 9.33%.

Explanation:

According to the scenario, the computation of the given data are as follows:

First we calculate return on investment before purchase:

Return on investment = (Controllable Margin ÷ Operating assets  ) × 100

= ($138,000 ÷ $300,000) × 100

= 46%

Controllable margin (New) = $138,000 + $5,000 = $143,000

Operating assets = $300,000 + $90,000 = $390,000

Return on investment (New) = ($143,000 ÷ $390,000) × 100

= 36.67%

So, change in ROI = 36.67 % - 46%

= - 9.33% ( Negative shows decrease )

Hence, Decrease ROI by 9.33%.