Answer:
The company should relace the old machine because it saved 22,000 cost
The book value of the old machine, 245,000 are sunk cost, are not relevant to determinate if the machien should be keeped or not.
Explanation:
(A)
cost savings
current cost-61,000 for eight year
new cost -19,000 for eight year
cost saving 42,000 per year
42,000 x 8 = 336,000
545,000 cost of new machine
- 231,000 proceeds from old machine
= 314,000 cost of acquire the machine
336,000 cost savings - cost 314,000 = 22,000 net saving
Which of the following activities are credits? The impact on accounts receivable from a $10 million collection from a customer. The impact on treasury stock from a company repurchasing $32 million in shares. The impact on inventory from a company recognizing $15 million in cost of goods sold expense. The impact on debt from a $15 million principal paydown.
Final answer:
Credits are recorded for the collection from a customer (decreasing Accounts Receivable) and the principal paydown on debt (decreasing liability). Both activities decrease respective accounts, which are naturally debit accounts, so a credit is used to record the decrease.
Explanation:
Among the given activities, the following represent credits: collection from a customer impacting accounts receivable and principal paydown impacting debt. Additionally, the repurchase of shares affects treasury stock but represents a debit rather than a credit. Recognizing cost of goods sold expense affects inventory and also results in a debit instead of a credit.
Explanation:
Collection from a Customer: When a company collects $10 million from a customer, this decreases Accounts Receivable (an asset) and increases Cash (another asset). The decrease in Accounts Receivable is credited because it reduces the asset account.
Principal Paydown: On payment of a $15 million loan principal, the liability account (Debt) decreases. Since liabilities have a credit balance, to reduce them, we debit the account and credit the Cash account to represent the outflow of cash.
Before Maria starts her first year of college, Fred promises to give her $5,000 when she graduates. She goes to college, borrowing and spending far more than $5,000. At the beginning of the spring semester of her senior year, she reminds Fred of the promise. Fred sends her a note that says, “I revoke the promise.” Is Fred's promise binding? Explain.
Final answer:
Fred's promise to Maria is likely binding, as Maria's attendance in college constitutes substantial performance. In contract law, once substantial performance is underway, a promisor typically cannot revoke the promise. Therefore, Fred is expected to honor his initial promise to Maria.
Explanation:
The question of whether Fred's promise is binding revolves around the concept of a unilateral contract. In a unilateral contract, one party makes a promise in exchange for a specific action by another party. Fred promised Maria $5,000 upon her graduation, but he attempted to revoke the promise before she fulfilled the condition. Traditionally, once the action that fulfills the conditions of the promise is underway—a concept referred to as substantial performance—the promisor cannot revoke the promise. Maria going through college can be seen as substantial performance, and thus Fred may be expected to honor his promise regardless of his intent to revoke it. This is consistent with principles from contract law, which might be exemplified by texts such as "LibreTexts™", where the importance of fulfilling contract terms and recognizing substantial performance is affirmed.
A company has a selling price of $2,000 each for its printers. Each printer has a 2 year warranty that covers replacement of defective parts. It is estimated that 3% of all printers sold will be returned under the warranty at an average cost of $154 each. During November, the company sold 34,000 printers, and 440 printers were serviced under the warranty at a total cost of $59,000. The balance in the Estimated Warranty Liability account at November 1 was $31,000. What is the company's warranty expense for the month of November?
Answer:The company's warranty expense for the month of November is $157,080.
Explanation:
When the estimated amount is recognized-
Warranties expense A/c (Dr.) = $157,080
Estimated Warranty Liability (Cr.) = $157,080
When the repairs are actually paid, Estimated Warranty Liability will be Debited and Cash will be credited.so, The company's warranty expense for the month of November is $157,080.
i.e. (34,000 × 3% × $154 = $157,080)
The statement of cash flows explains changes in a firm’s: A) Cash on hand and cash in the bank B) Cash and cash equivalents C) Cash, cash equivalents, and accounts receivable D) Working capital
Answer:
C Cash and cash equivalents
Explanation:
For Cash equivalent, you must understand that is less than 90 days short term-investment which must be readily for convertible to a known amount of cash and practically no risk, again, within 90 days
Source: IFRS IAS 7 Statement of Cash Flows—identification of cash equivalents
The statement of cash flows details changes in a firm's Cash and cash equivalents (B). It lists cash inflows and outflows related to the company's operations and investment activities, but does not directly report on accounts receivable or working capital.
Explanation:The statement of cash flows explains changes in a firm’s B) Cash and cash equivalents. The statement of cash flows is a financial statement that provides aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given period. Changes in accounts receivable are reflected on the balance sheet and can influence the cash flow statement indirectly, but they are not included in the definition of cash and cash equivalents. The statement does not provide information directly on the firm's working capital, which includes current assets and current liabilities, other than cash and cash equivalents.
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Peroni Company paid wages of $170,900 this year. Of this amount, $114,000 was taxable for net FUTA and SUTA purposes. The state's contribution tax rate is 3.1% for Peroni Company. Due to cash flow problems, the company did not make any SUTA payments until after the Form 940 filing date. Compute the following; round your answers to the nearest cent.
a. Amount of credit the company would receive against the FUTA tax for its SUTA contributions
$
b. Amount that Peroni Company would pay to the federal government for its FUTA tax
$
c. Amount that the company lost because of its late payments
$
a. (Taxable wages x SUTA rate x 90%) + [Taxable wages x (5.4% -SUTA rate)] = Total FUTA tax credit
b. (Taxable wages x FUTA rate) – Total FUTA tax credit (part a above) = Net FUTA tax
c. Net FUTA tax – FUTA tax without penalty = penalty
hey there!:
1)
a) Amount of credit the company would receive against the FUTA tax for its SUTA contributions = 2896.21
(56900*3.1%*90%)+(56900*(5.4%-3.1%)) = 2896.21
b) Amount that Peroni Company would pay to the federal government for its FUTA tax = 517.79
(56900*6%)-2896.21 = 517.79
c) Amount that the company lost because of its late payments = 176.39
=517.79-(3414-1763.9-1308.7) = 176.39
Hope that helps!
To find the total FUTA tax, calculate the credit received for SUTA contributions first, then use that to calculate the net FUTA tax. Then, the penalty can be calculated as the difference between the net FUTA tax and the FUTA tax without penalty.
Explanation:To calculate a), the amount of credit the company would receive against the FUTA tax for its SUTA contributions, we use the formula: (Taxable wages x SUTA rate x 90%) + [Taxable wages x (5.4% -SUTA rate)]. Plugging in the provided numbers gives: ($114,000 x 3.1% x 90%) + [$114,000 x (5.4% - 3.1%)]. For b), the amount that Peroni Company would pay to the federal government for its FUTA tax, we use the formula: (Taxable wages x FUTA rate) - Total FUTA tax credit. Calculate the FUTA rate (generally it is 6.0%), then substitute the FUTA tax credit obtained in a). For c), the amount the company lost due to its late payments, we use the formula: Net FUTA tax – FUTA tax without penalty, which gives the penalty.
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Which of the following entries would record the application of overhead cost correctly? A. Manufacturing Overhead XXX Accounts Payable XXX B. Work in Process XXX Accounts Payable XXX C. Work in Process XXX Manufacturing Overhead XXX D. Manufacturing Overhead XXX Work in Process XXX
The right entry to record the application of overhead cost is 'C. Work in Process XXX Manufacturing Overhead XXX'. Overhead costs are encompassed in the cost of goods in progress, which is reflected in the 'Work in Process' account. The applied overhead cost lessens the balance in the 'Manufacturing Overhead' account and augments the 'Work in Process' account.
Explanation:The correct entry to record the application of overhead cost in accounting would be: C. Work in Process XXX Manufacturing Overhead XXX. This is because overhead costs are absorbed into the cost of goods that are in production, which is monitored under the Work in Process account. The Manufacturing Overhead is an account where indirect costs associated with manufacturing are accumulated. If we apply an overhead cost, it decreases the balance in the Manufacturing Overhead and increases the amount in Work in Process account, reflecting that overhead costs are being utilized in the production process.
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The correct entry to record the application of overhead cost is D. Manufacturing Overhead XXX to Work in Process XXX, representing the allocation of indirect costs to goods in production within a manufacturing accounting system.
When overhead costs are allocated to production, the Manufacturing Overhead account (which accumulates indirect manufacturing costs) is debited to reflect the actual costs incurred. These costs are then credited to the Work in Process account, increasing the cost of goods being manufactured. This entry does not involve Accounts Payable because the allocation is an internal process rather than an external transaction.
Dim Corporation purchased 1,000 bonds of Witt Corporation in 2015 for $790 per bond and classified the investment as securities available for sale. The value of these holdings was $272 per bond on December 31, 2016, and $404 on December 31, 2017. During 2018, Dim sold all of its Witt bonds at $490 per share. In its 2018 income statement, Dim would report:
Answer:
In the income statemnt for 2018
Gain on Sale of Bonds 86,000
Explanation:
This securities available for sale will be measurement at fair value, through profit and loss
2018 Beginning Valuation
1,000 bonds x 404 = 404,000
Value at sale
1,0000 x 490 = 490,000
Gain on Sale of Bonds 86,000
Daniel Corporation had net income for 2018 of $ 74 comma 000. Daniel had 12 comma 000 shares of common stock outstanding at the beginning of the year and 17 comma 000 shares of common stock outstanding at the end of the year. There were 12 comma 000 shares of preferred stock outstanding all year. During 2018, Daniel declared and paid preferred dividends of $ 25 comma 000. On December 31, 2018, the market price of Daniel's common stock is $ 46.00 per share and the market price of its preferred stock is $ 68.00 per share. What is Daniel's price/earnings ratio at December 31, 2018? (Round any intermediate calculations and your fin
Final answer:
Daniel Corporation's price/earnings ratio at the end of 2018 is calculated by dividing the market price of its common stock ($46.00) by its earnings per share ($3.38), which after subtracting preferred dividends and adjusting for the weighted average number of shares, results in a ratio of approximately 13.61.
Explanation:
To calculate Daniel Corporation's price/earnings ratio at the end of 2018, we begin with its net income for the year, which is $74,000. Preferred dividends are then subtracted from this amount since they are not available to common shareholders. Daniel Corporation paid $25,000 in preferred dividends, leaving $74,000 - $25,000 = $49,000 for the common shareholders.
We then use the weighted average number of common shares outstanding to determine the earnings per share (EPS). Since the company had 12,000 shares at the beginning of the year and 17,000 at the end, we calculate the weighted average as follows: (12,000 shares for 1/2 year) + (17,000 shares for 1/2 year) = 6,000 + 8,500 = 14,500 weighted average shares.
Next, we divide the adjusted net income by the weighted average shares to get the EPS: $49,000 / 14,500 shares = approximately $3.38 EPS. The market price of common stock is given as $46.00 per share. Therefore, the price/earnings ratio is $46.00 / $3.38 = approximately 13.61.
Final answer:
Daniel Corporation's price/earnings ratio at December 31, 2018, can be found by dividing the market price per share ($46.00) by the earnings per share ($3.38), resulting in a P/E ratio of approximately 13.61.
Explanation:
The price/earnings ratio, or P/E ratio, is calculated by dividing the market price per share by the earnings per share (EPS). In Daniel Corporation’s case, the EPS is the net income minus preferred dividends, divided by the weighted average of outstanding shares during the year. To compute the weighted average, you would consider that 12,000 shares were outstanding for the whole year and an additional 5,000 shares ((17,000 - 12,000) for a part of the year).
To calculate the P/E ratio, first, we find the EPS for common stockholders. This is calculated by subtracting the $25,000 in preferred dividends from the $74,000 net income to get $49,000. Next, we need to determine the weighted average shares. If we assume that the additional 5,000 shares were outstanding for half the year, the calculation would be (12,000 shares × 12 months + 5,000 shares × 6 months) / 12 months, which equals 14,500 shares. Therefore, the EPS is $49,000 / 14,500 shares = $3.38 per share.
Finally, the P/E ratio is the closing market price divided by the EPS: $46.00 per share / $3.38 per share = approximately 13.61. Therefore, Daniel’s price/earnings ratio at December 31, 2018, would be 13.61, assuming a rounding to two decimal places.
The outstanding bonds of The Purple Fiddle are priced at $898 and mature in nine years. These bonds have a 6 percent coupon and pay interest annually. The firm's tax rate is 35 percent. What is the firm's after tax cost of debt?
Answer : 4.34 %
Explanation: The effective interest rate a company pays on its debt obligation is called cost of debt. The cost of debt is denoted by [k]x_{d}[/tex] . As there is a tax shield available on debt interest it is generally calculated by subtracting the marginal tax rate from before tax cost of debt .
.
[tex]k_{d}=\frac{c}{p}\times\left ( 1-t \right ) [/tex]
where,
c= coupon payment = 1000 * 6% = 60
p = current market price = $898
t= marginal tax rate
therefore :-
= [tex]\frac{60}{898}\times \left ( 1-0.35 \right )[/tex]
= 4.34 %
The following information is from the records of Mountainview Camera Shop: Accounts receivable, December 31, 2018 $80,000 (debit) Net credit sales for 2018 160,000 Accounts written off as uncollectible during 2018 16,000 Cash sales during 2018 42,000 The company uses the direct writeminusoff method for bad debts. What is the amount of bad debts expense?
Answer:
The amount of bad debts expense is $16,000
Explanation:
Bad debt : The Bad debt is that amount in which the chances of payment receive is very less. Thus, the bad debt amount is deducted in the balance sheet under debtors account and also it is shown in Profit and loss Account in debit side.
Under direct write minus off method for bad debts, the bad debt amount is recognized irrespective of whatever information is given.
Since in the question, the non-collectible amount is given which is $16,000.
So, the amount of bad debts expense is $16,000
Companies that manufacture identical items through a series of uniform production steps use ________ to determine the cost per unit produced. a) a job order costing system b) a process costing system c) both of these systems d) neither of these systems
Companies that manufacture identical items through a series of uniform production steps use to determine the cost per unit produced a process costing system.- b)
Companies that manufacture identical items through a series of uniform production steps use to determine the cost per unitproduced a process costing system.
At a volume of 11,000 units, Pwerson Company incurred $33,000 in factory overhead costs, including $11,000 in fixed costs. If volume increases to 13,000 units and both 11,000 units and 13,000 units are within the relevant range, then the company would expect to incur total factory overhead costs of:
Answer:
$37,000.00
Explanation:
Total fixed overhead costs = $11,000.00
Variable overhead cost at 11,000 units of production
=Total overheads - Fixed overheads
=$33,000 -$11,000 = $22,000
Variable cost per unit = [tex]\frac{22000}{11000}[/tex] = $2 per unit
When production increased to 13,000 units then overheads costs will be
Fixed Costs = $11,000 Remains constant up to certain activity level, here 13,000 units is acceptable level
Variable costs = 13,000 units X $2 per unit = $26,000
Total Overhead costs = Fixed + Variable
= $11,000 + $26,000 = $37,000
Total = $37,000
The ledger of Tamarisk, Inc. at the end of the current year shows Accounts Receivable $109,000; Sales Revenue $830,000; and Sales Returns and Allowances $23,700. Prepare journal entries for each separate scenario below. (a) If Tamarisk, Inc. uses the direct write-off method to account for uncollectible accounts, journalize the entry at December 31, assuming Tamarisk, Inc. determines that L. Dole’s $1,500 balance is uncollectible. (b) If Allowance for Doubtful Accounts has a credit balance of $2,500 in the trial balance, journalize the adjusting entry at December 31, assuming uncollectible accounts are estimated to be 11% of accounts receivable. (c) If Allowance for Doubtful Accounts has a debit balance of $205 in the trial balance, journalize the adjusting entry at December 31, assuming uncollectible accounts are estimated to be 9% of accounts receivable.
Answer:
(A)
bad debt expense 1,500 debit
account receivable 1,500 credit
(B)
bad debt expense 9,490
allowance for doubtful accounts 9,490
(C)
bad debt expense 10,015
allowance for doubtful accounts 10,015
Explanation:
(A)
Direct write-off doesn't use allowance,
bad debt is done directly to account receivable.
(B)
allowance = 11% of AR = 11% of 109,000 = 11,990
balance (2,500 credit)
11,990 - 2,500 = 9,490
(C)
allowance = 9% of AR = 9% of 109,000 = 9810
balance 205 debit
9,810 + 205 = 10,015
Comments: the allowance is expected to be 9% or 11% of AR
so the goal for B and C is to reach a final balance of 9% or 11% of AR
so we have to subtract the balance from the expected allowance to knwo the adjustment.
The journal entries for Tamarisk, Inc. are different depending on the scenario. For direct write-offs, uncollectible amounts are directly subtracted from the Account Receivable. For Allowance methods, the amount of bad debt is estimated based on a percentage of total receivables.
Explanation:For scenario a, Tamarisk, Inc. determines that L. Dole's $1,500 balance is uncollectible under the direct write-off method. The journal entry would be as follows:
Debit: Bad Debt Expense $1,500Credit: Accounts Receivable – L. Dole $1,500In scenario b, if
Allowance for Doubtful Accounts
has a credit balance of $2,500, and uncollectible accounts are estimated to be 11% of accounts receivable, the journal entry is:
Debit: Bad Debt Expense $9,490Credit: Allowance for Doubtful Accounts $9,490In scenario c, if Allowance for Doubtful Accounts has a debit balance of $205, and uncollectible accounts are estimated to be 9% of accounts receivable, the entry would be:
Debit: Bad Debt Expense $9,810Credit: Allowance for Doubtful Accounts $9,810In both scenarios b and c, the estimation of uncollectible accounts is calculated as a percentage of the total existing Account Receivables, 11% and 9% respectively.
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Which of the following statements are true regarding profit-maximizing firms?A.They will attempt to maximize the difference between total revenues and total costs.B.They will use more of a resource as long as the marginal resource cost (MRC) is greater than the marginal revenue product (MRP).C.They will only produce where MRP is positive and MRC is negative.D.none of the above.
Answer:
For a profit maximizing firm , the statement that will be true is A) they will attempt to maximize the difference between total revenues and total costs.
Explanation:
The basic formula that is used to calculate profit is -
Profit = Total revenue - Total cost
Profit maximization is a concept according to which a firm who is looking for maximizing its profits, should choose that optima level of output where its marginal cost ( cost that is incurred because of producing one additional unit of good ) and marginal revenue ( change in revenue because of change in sales ) are same.
When the marginal revenue is greater than the marginal cost , it means that the revenues generated by producing additional quantity of goods is greater than the cost incurred on producing them, so hence we can say that for maximizing profit , a firm would want that the gap between revenue and cost is higher.
A firm has a machine it can sell for $40,000. The book value of the machine is currently $20,000. If the firm sells the machine, what are the net proceed from the sale? Assume that the tax rate is 40%. Round to the nearest penny. Do not include a dollar sign in your answer.
The cost paid for the bond or debt purchase is called book value while, when the whole volume of the assets is sold during the base period is called sales value.
The answer is 12,000 dollars.
This can be calculated by:
The organization will have to pay expenses for the difference between the sales and the book value.
Given,
The amount at which the company can sell = $40,000The book value of the machine = $ 20,000The Tax rate = 40%= 40000 - 20000 × 40%
= 20000 × 40%
= 8000 tax income.
Total proceed 20,000 (gross profit) - 8,000 (tax income)
= 12,000 net proceed
Therefore 12,000 is the net proceed from the sale.
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Suppose demand for a product is highly elastic. What will likely happen to a company's total revenue if it raises the price of that product?a. total revenue will riseb. total revenue will fallc. total revenue will remain the samed. total revenue will fluctuate
Answer:
The correct answer is b. Total revenue will fall.
Explanation:
The equation for the price elasticity of demand (PED) is ε = [tex]\frac{dQ/Q}{dP/P}[/tex]
where Q represents the quantity, P represents the price and d represents variation.
If the demand for a product is highly elastic, mathematically it means that the PED in absolute value is greater than 1.
|ε| > [tex]\frac{dQ/Q}{dP/P}[/tex] ⇒ |ε| > 1
Economically that means that the quantity demanded of that product will decrease more than proportionally to the increase in price of that same product. In other words, the company will experience that a increase in price of its product raises the revenue for each unit sold, but given that the PED is highly elastice an increase in price reduces the number of units actually sold to the extent the company's total revenue actually falls.
Estimated manufacturing overhead for the year $ 32,550 Estimated direct labor hours for the year 2,100 Two jobs were worked on during the year: Job A-101 and Job A-102. The number of direct labor-hours spent on Job A-101 and Job A-102 were 1,230 and 1,050, respectively. The actual manufacturing overhead was $39,000. What is the amount of the under- or overapplied manufacturing overhead? Overhead is applied on the basis of direct labor hours. $2,610 overapplied. $3,660 underapplied. $870 underapplied. $6,450 overapplied.
Answer:
Underapplied for 3,660
Explanation:
MO 32,550
DLH 2,100
rate: MO/DLH = 32,550/2,100 = 15.5 MO per DLH
Applied MO:
job 101 : 1,230 hours x 15.5 = 19,065job 102: 1,050 hours x 15.5 = 16,275Total MO 19,065 + 16,275 = 35,340
Actual Overhead 39,000
Underapplied for 3,660
national Mining Corp. purchased a mine, which holds an estimated 031,000 tons of iron ore, on January 1, 2018, for $ 526,000. The mine is expected to have zero residual value. The business extracted and sold 12,500 tons of ore in 2018 and 11,800 tons of ore in 2019. What is the depletion expense for 2018? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
The depletion expense for National Mining Corp. for the year 2018, given the mine purchase cost and the amount of iron extracted and sold in that time, is calculated to be approximately $212,125.
Explanation:To find out the depletion expense for 2018, we first need to determine the depletion rate. The depletion rate is the cost of the mine divided by the estimated total extractable amount of iron ore. In this case, it will be $526,000 divided by 31,000 tons, which equals $16.97 per ton (rounded to two decimal places).
Then, we multiply the depletion rate by the amount of iron ore that was extracted and sold in 2018. So, the depletion expense would be $16.97 per ton times 12,500 tons, equaling $212,125 (rounding to the nearest dollar).
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The manager at Vertical Wire Productions reported total sales revenue of $800,000. The variable expenses were $600,000, and there were $125,000 of total fixed expenses. Use the contribution margin shortcut formula to predict the breakeven point in dollars.
Answer:
[tex]BEP_{dollars} = 500,000 [/tex]
Explanation:
The first step will be get the contribtuion margin:
[tex]Sales\: Revenue - Variable \:Cost = Contribution \:Margin[/tex]
800,000 - 6000,000 = 200,000
This is the amount after variables cost used to pay the fixed cost and make a gain.
Second, we calcualte the contribution margin ratio
[tex]\frac{Contribution \:Margin}{Sales\: Revenue} = Contribution\: Margin\: Ratio[/tex]
200,000/800,000 = 0.25
Per dollar of sales 25 cents are available to pay the fixed cost.
Now, we calculate the break even point in dollars
[tex]\frac{Fixed\:Cost}{Contribution\: Margin \:Ratio} = Break\: Even\: Point_{dollars}[/tex]
[tex]\frac{125,000}{.025} = 500,000[/tex]
A basket of goods for a given consumer includes two goods, X and Z. Consumer income is equal to $1,500 and the prices of these two goods are as follows: Px = $50 Pz = $50 This consumer is consuming 10 units of good X. Suppose that over the course of a year, the price of good X changes by -20% and the price of good Z changes by 25%.
How much income would be required for the consumer to afford the same quantity of goods X and Z with the new prices?
What is the rate of inflation?
Given this change in prices, is it possible for our consumer to buy the original bundle of goods?
Answer:
Costumer will need $1650 to afford the same quantity of goods
Rate of inflation=2.5%
Is not possible for our consumer to buy the original bundle of goods
Explanation:
Income = $1,500
First year Px = $50
Pz = $50
10 units of good X is 50x10=500,
Consumer could buy $1000 in product Z (Income-cost of product Z=1500-500)
qz=Product Z is $50 each so customer could buy 20 units(1000/50).
Prices of Second year
Px' = $50*(1-0.20)=40
Pz' = $50*(1+0.25)=62.5
Cost=Px'*qx+Pz'*qz=40*10+62.5*20=400+1250=1650
Costumer will need $1650 to afford the same quantity of goods
Rate of inflation=
RI=(sum price of x and z in second year-sum price of x and z in first year)/100
RI=(40+62.5)-(50+50)/100=102.5-100/100= 2.5/100=0.025=
RI=2.5%
Is not possible for our consumer to buy the original bundle of goods with the same budget
Final answer:
After the price changes, the consumer requires $1,025 to purchase the same quantity of goods X and Z, which is less than the original income of $1,500. Therefore, it is possible for the consumer to afford the original bundle of goods.
Explanation:
The question involves a consumer whose income and the prices of two goods, X and Z, change over a given period. Initially, both goods are priced at $50 each, and the consumer can buy 10 units of good X with a total income of $1,500. Over the course of a year, the price of good X drops by 20%, making its new price $40 ($50 - 20% of $50), and the price of good Z increases by 25%, making its new price $62.50 ($50 + 25% of $50). To calculate the income required for the consumer to afford the same quantity of goods X and Z with the new prices, we multiply the new prices by 10 units (since the original quantity purchased is 10 units for X and assuming the same for Z for simplicity): 10 units * $40 for X = $400 and 10 units * $62.50 for Z = $625, totalling $1,025. Therefore, the consumer now requires an income of $1,025 to afford the same quantity of goods at the new prices. The rate of inflation is a measure of the overall increase in prices over a given period. While this example does not provide sufficient data to calculate a broad rate of inflation, the significant price change in goods X and Z demonstrates individual price inflation and deflation respectively. Given the new prices, it is indeed possible for our consumer to buy the original bundle of goods due to the decreased price of X, despite the increased price of Z, especially since the total new required income ($1,025) is less than the original income ($1,500).
What is the primary difference between income and wealth? A. Income is earned by households; wealth is gained by inheritance. B. Income is a flow variable; wealth is a stock variable. C. Income reveals net worth; wealth is a stock variable. D. Income is the value of what a household owns minus its debt; wealth is a measure of net worth.
Answer: the correct ianswer is B. Income is a flow variable; wealth is a stock variable.
Explanation:
A stock is measured at one specific time, and represents a quantity existing at that point in time (say, December 31, 2004), which may have accumulated in the past. A flow variable is measured over an interval of time. Therefore, a flow would be measured per unit of time (say a year).
Scott's Lawn Care has hired Henry Associates to find out whether home improvement warehouse stores communicate the benefits of various brands of lawn care products differently than smaller stores. Henry Associates needs to know what is communicated to consumers in the actual settings of the stores and wants to ensure that the message isn't filtered. Only behavioral data is required. Which type of data collection method is most appropriate in this situation? A. CommunicationB. ObservationC. SurveysD. ExperimentalE. Causal
Answer:
The correct answer is option B. observation.
Explanation:
Observation is a method of data collection which involves the use of all the senses to study people in their natural setting. The process involve gathering knowledge about a phenomena by making observations. The aim here is to focus on human behavior, human interaction with phenomenon and the use of phenomenon..
In the above example, actual setting and behavioral data is required. So, the most appropriate method for data collection here will be observation.
Many organizations, such as Google, Zappos, Salesforce, and Yahoo!, are designing the work environment to encourage casual conversations among employees who don't generally work together. They also are "installing playful prompts, like trivia games, to get workers talking in traditional conversational dead zones, such as elevators." It is thought that ________ demonstrate a form of social support for employees, leading them to put more effort into creative behaviors.
Answer:
The correct answer would be, Low stress work environments.
Explanation:
Many big organizations like Google, Yahoo, Salesforce, etc are now a days designing the work environments for employees like something that encourages the casual conversations between employees who don't get in touch with each other generally, for example, employees from different departments. They are also installing playful prompts like trivia games to get workers talking with each other on dead zones. Such type of arrangements will make a low stress environment for employees to work in, and due to low stress work environments, employees would work more efficiently and be progressive for the organization. Employees will have a sense of bond and support from other employees. So it is thought that low stress work environments demonstrate a form of social support for employees, leading them to put more effort into creative behaviors.
It is thought that casual conversations and playful prompts to demonstrate a form of social support for employees, leading them to put more effort into creative behaviors.
Explanation:The blank in the sentence can be filled with 'casual conversations and playful prompts'. Many organizations are nurturing an environment that promotes interactions between employees who wouldn't usually work together. This strategy involves playful interventions like trivia games in typical non-conversational areas. These interventions act as a catalyst for dialogue, which is seen as a form of social support. This support is thought to encourage employees to exert more effort into exhibiting creative behaviors within the workforce.
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Variable Costing Marsich Company has the following information for February: Sales $490,000 Variable cost of goods sold 220,500 Fixed manufacturing costs 83,300 Variable selling and administrative expenses 53,900 Fixed selling and administrative expenses 34,300 Determine the following for Marsich Company for the month of February: a. Manufacturing margin $ b. Contribution margin $ c. Operating income
Answer:
a. Manufacturing margin = $269,500
b. Contribution margin = $436,100
c. Operating income = $318,500
Explanation:
The formula of Manufacturing margin , Contribution margin & operating income is shown below. Along with it, the computation is also made.
Manufacturing margin = Sales - Variable cost of goods sold
= $490,000 - $220,500
= $269,500
Contribution margin = Sales - Variable selling and administrative expenses
= $490,000 - $53,900
= $436,100
Operating income = Contribution margin - (Fixed manufacturing costs + Fixed selling and administrative expenses )
= 436,100 - $(83,300 + 34,300)
= $318,500
Thus, a. Manufacturing margin = $269,500
b. Contribution margin = $436,100
c. Operating income = $318,500
The larger the standard deviation of returns of an investment, _____. a. lesser is the chance that the realized return will differ significantly from the expected return b. greater is the chance that the realized return will be negative c. greater is the chance that the realized return will differ significantly from the expected return d. lesser is the chance that the realized return will be negative e. greater is the chance that the investment will outperform the market
Answer:
c. greater is the chance that the realized return will differ significantly from the expected return
Explanation:
The standard deviation is used as a measure of risk, it measures the dispersion of data relative to its mean. The expected return is measured by the mean, therefore if the standard deviation is large it will be more difficult to be accurate calculating the expected return as the values can differ significantly.
Barlow Company manufactures three products: A, B, and C. The selling price, variable costs, and contribution margin for one unit of each product follow: Product A B C Selling price $ 300 $ 400 $ 300 Variable expenses: Direct materials 36 90 45 Other variable expenses 144 110 150 Total variable expenses 180 200 195 Contribution margin $ 120 $ 200 $ 105 Contribution margin ratio 40 % 50 % 35 % The same raw material is used in all three products. Barlow Company has only 4,500 pounds of raw material on hand and will not be able to obtain any more of it for several weeks due to a strike in its supplier’s plant. Management is trying to decide which product(s) to concentrate on next week in filling its backlog of orders. The material costs $9 per pound. Required: 1. Compute the amount of contribution margin that will be obtained per pound of material used in each product.
Answer:
Contribution margin per pound
Product A = $30
Product B = $20
Product C = $21
Explanation:
Products A B C
Direct Material $36 $90 $45
Provided cost of raw material per pound is $9
Pounds of raw
material used in a unit $36/9 = 4 $90/9 = 10 $45/9 = 5
Contribution per unit $120 $200 $105
Contribution margin per pound = Contribution per unit/ Pounds per unit
= $120/4 = $30 $200/10 = $20 $105/5 = $21
Highest contribution margin per pound is of Product A = $30
Contribution margin per pound
Product A = $30
Product B = $20
Product C = $21
By dividing the contribution margin of each product by the weight of the raw material used (determined by dividing the direct material cost by the cost per pound of $9), we find that Product A generates $30 per pound, Product B generates $20 per pound, and Product C generates $21 per pound. Hence, Product A should be prioritized for highest profitability.
Explanation:The amount of contribution margin per pound can be calculated by dividing the contribution margin of each product by the amount of raw material used in each. As for Barlow's products, we first need to determine the weight of the raw material used in each product. Since the material costs $9 per pound, we can find the weight by dividing the direct materials cost by $9.
For example, the weight of the raw material in Product A is $36 / $9 = 4 pounds. Hence, the contribution margin per pound for Product A is $120 / 4 = $30 per pound. Similar calculations can be repeated for Products B and C.
Product B: Raw material = $90 / $9 = 10 pounds, Contribution margin per pound = $200 / 10 = $20 per pound.
Product C: Raw material = $45 / $9 = 5 pounds, Contribution margin per pound = $105 / 5 = $21 per pound.
Based on these figures, it would be most profitable for Barlow to concentrate on manufacturing Product A, as it generates the highest contribution margin per pound of raw material.
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Better Buy, Inc. has 7 units in inventory on December 31. The units were purchased in November for $160 each. The price lists from the suppliers indicate that the same items would now cost the company a total of $1,155. What would be the amount reported as Ending Merchandise Inventory on the balance sheet?
Answer:
$1,120
Explanation:
Ending Merchandise Inventory is value of closing inventory in hand, to be valued at lower of cost or net realizable value or replacement value
Here, cost of closing inventory = 7 units X $160 each = $1,120
Since current realizable/ replacement value = $1,155
Cost is less than realizable value, therefore cost will be considered.
Thus ending merchandise inventory will be valued at total of $1,120.
Consider the markets for mobile and landline telephone service. Suppose that when the average income of residents of Plainville is $55,000 per year, the quantity demanded of landline telephone service is 12,500 and the quantity demanded of mobile service is 28,000. Suppose that when the price of mobile service rises from $100 to $120 per month, the quantity demanded of landline service increases to 11,000. Suppose also that when the average income decreases to $50,000, the quantity demanded of mobile service decreases to 26,000. What is the income elasticity of demand for mobile service? Show calculation and interpret the result.
Answer: Income elasticity of demand for mobile services = 1.885
Explanation:
Given :
Income 1 = $55000
Income 2 = $60000
Demand 1 = 28000
Demand 2 = 33000
Formula for income elasticity as per mid point method is as follow:
[tex]\left ( \Delta \left ( Quantity demanded/2 \right )\div \Delta \left ( Income/2\right ) \right )\\[/tex]
i.e. [tex]\left ( (33000-28000)/(33000 + 28000)/2 \right )\div\left ( (60000-55000)/(60000+55000)/2\right ) \right )[/tex]
= 1.885
Since income elasticity of demand is positive and greater than 1 therefore mobile service is considered as a superior goods.
The income elasticity of demand of mobile service in this case is -0.7857, indicating it is an inferior but necessary good.
Explanation:The income elasticity of demand for mobile service can be calculated with the formula that divides the percentage change in quantity demanded by the percentage change in income. In this case, the change in quantity demanded is from 28,000 to 26,000, which is a decrease of 2,000. As a percentage, this is a decrease of about 7.14% (2000/28,000). The change in income is from $55,000 to $50,000, a decrease of $5,000. As a percentage, this is a decrease of about 9.09% (5000/55,000). The income elasticity of demand is then 7.14 / -9.09 = -0.7857.
A negative income elasticity of demand indicates that mobile service is an inferior good within this income range meaning as income decreases, the demand for the good increases. However, the negative value is less than 1 which means it's a necessary good, even though it's considered inferior. The quantity demanded decreases with decreased income but not to a very large extent.
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Mart's Boutique has sales of $820,000 and costs of $540,000. Interest expense is $36,000 and depreciation is $59,000. The tax rate is 21 percent. What is the net income? $146,150 221,200 105,000 139,050
Answer:
$146,150.00
Explanation:
Net income is net of taxes.
Here,
Sales = $820,000.00
Less: Costs = -$540,000.00
Gross profit = $280,000.00
Less: Finance Costs
Interest = -$36,000.00
Depreciation = -$59,000.00
Net profit before Tax = $185,000.00
Less: Tax @ 21% of $185,000.00 = - $38,850.00
Net Income (after tax) = $146,150
Net income is always computed after tax.
$146,150.00
Final answer:
To find Mart's Boutique net income, subtract the costs and depreciation from sales, then subtract interest expense and taxes. The boutique's net income is $146,150.
Explanation:
To calculate the net income for Mart's Boutique, we begin with sales and subtract the costs:
Sales: $820,000Costs: $540,000Depreciation: $59,000Interest Expense: $36,000The operating profit is calculated as Sales minus Costs and Depreciation. Then we subtract the Interest Expense to get the pre-tax income:
Operating Profit = Sales - Costs - DepreciationOperating Profit = $820,000 - $540,000 - $59,000Operating Profit = $221,000Pre-tax Income = Operating Profit - Interest ExpensePre-tax Income = $221,000 - $36,000Pre-tax Income = $185,000Finally, we calculate the net income by subtracting the tax, which is 21% of the pre-tax income:
Tax = Pre-tax Income × Tax RateTax = $185,000 × 0.21Tax = $38,850Net Income = Pre-tax Income - TaxNet Income = $185,000 - $38,850Net Income = $146,150Mart's Boutique has a net income of $146,150.A bond with a coupon rate of 7% makes semiannual coupon payments on January 15 and July 15 of each year. The Wall Street Journal reports the ask price for the bond on January 30 at 100.125. What is the invoice price of the bond? The coupon period has 182 days.
To calculate the invoice price of a bond, you need to consider the ask price and the accrued interest. The accrued interest is calculated based on the coupon rate and the number of days since the last coupon payment. In this case, the invoice price is approximately $177.045.
Explanation:The invoice price of the bond can be calculated by using the formula:
where:
Ask Price is the quoted price of the bond, which is 100.125 in this case.Accrued Interest is the interest that has accumulated since the last coupon payment date, which is January 15 in this case.Since the coupon period has 182 days and the interest payments are made semiannually, the number of days since the last coupon payment can be calculated as 15 days + 182 days = 197 days.
Given that the coupon rate is 7%, the coupon payment can be calculated as 7% of the par value of the bond (which is typically $1,000). Therefore, the coupon payment is $70.
Substituting the values into the formula:
Solving for the accrued interest gives approximately $76.92.
Finally, substituting the values into the invoice price formula:
Calculating the sum gives the invoice price of approximately $177.045.
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The invoice price of the bond is calculated by adding the clean price ($1001.25) and the accrued interest ($2.88), resulting in approximately $1004.13.
To calculate the invoice price of the bond, we need to consider both the clean price and the accrued interest. The clean price, given as 100.125, is the price without accrued interest. Bonds with a coupon rate of 7% that pay semiannually will pay 3.5% every six months.
Step-by-Step Explanation:
Calculate the semiannual coupon payment: Face Value of Bond = $1000 (assuming standard face value)Semiannual Coupon Payment = 7%/2 * $1000 = $35Calculate the accrued interest up to January 30: Accrued Interest = (Number of Days Since Last Coupon Payment / Total Days in Period) * Semiannual Coupon PaymentNumber of Days Since Last Coupon Payment = 15 (from January 15 to January 30)Total Days in Period = 182Accrued Interest = (15 / 182) * $35 ≈ $2.88Add the accrued interest to the clean price to get the invoice price: Clean Price = 100.125% of Face Value = 1.00125 * $1000 = $1001.25Invoice Price = Clean Price + Accrued Interest = $1001.25 + $2.88 ≈ $1004.13Therefore, the invoice price of the bond on January 30 is approximately $1004.13.