Answer: A Limited Liability Company (LLC)
Explanation:
A Limited Liability Company (LLC) is known to be a company whose members are not limited in number and not responsible for its debt, liabilities and losses individually. This company is characterized by tax advantage because the company cannot be taxed as a company but its members. Thus, double taxation is been avoided because the members pay individual’s income tax after the business profits have been shared between them.
An LLC would be the best business entity choice for the paper shredding company, providing limited liability and tax benefits while allowing customized partner pay structures.
Explanation:An LLC (Limited Liability Company) would be the most suitable business entity for the friends' paper shredding company. An LLC offers limited personal liability for the partners while avoiding double taxation.
With an LLC, the partners can structure their pay based on their contribution to the company's success, which doesn't have to align with their percentage ownership.
Bayside began 2014 with an inventory T-account debit balance of $155,000. Inventory purchases during the year amounted to $75,000. There were no inventory-related write-downs or losses. What is its December 31, 2014, inventory account balance?
Final answer:
Bayside's December 31, 2014, inventory account balance is $230,000, calculated by adding the year's purchases of $75,000 to the beginning inventory of $155,000.
Explanation:
The question asks for the December 31, 2014, inventory account balance of Bayside, given an opening inventory of <$strong>155,000 and inventory purchases amounting to <$strong>75,000 during the year, with no inventory-related write-downs or losses. To calculate the ending inventory balance, we need to add the purchases during the year to the beginning inventory balance since no other adjustments like sales or write-downs are mentioned.
Beginning Inventory: $155,000 + Purchases during the year: $75,000 = Ending Inventory: $230,000Therefore, Bayside's inventory account balance on December 31, 2014, is $230,000.
Financial Decisions. Which of the following are investment decisions, and which are financing decisions? (LO1-1) a. Should we stock up with inventory ahead of the holiday season? b. Do we need a bank loan to help buy the inventory? c. Should we develop a new software package to manage our inventory? d. With a new automated inventory management system, it may be possible to sell off our Birdlip warehouse. e. With the savings we make from our new inventory system, it may be possible to increase our dividend. f. Alternatively, we can use the savings to repay some of our long-term debt.
Answer: Investing= a, c, d
financing = b, e, f
Explanation: Decisions related to use of available funds in the investment of different assets involves investment decisions. Decisions relating to borrowing and allocation of funds for making investment decisions are called financing decisions.
From above, we can conclude that,
1. Stocking up of inventory involves investment decisions.
2. Considering of bank loan involves financing decision.
3. Managing inventory involves investing decisions.
4. Selling of warehouse is an investment decision as warehouse is a fixed asset.
5. Increment in dividend is a financing decision.
6. Repaying long term debt involves financing decisions.
After the December 31, 2019 adjusting journal entries have been posted, Sinclair Enterprises has the following account balances (all accounts have normal balances) are: Account Title Account Balance Accounts Receivable $159,000 Allowance for Bad Debts $4,600 Bad Debts Expense $8,200 What is the net realizable value as of December 31, 2019?
Answer:
NET Account Receivable 154,400
Explanation:
Account Receivable 159,000
Allowance for Bad debts (4,600)
NET Account Receivable 154,400
The allowance is the contra-assets account which adjust account receivable.
the bad debt expense is an expense, it doesn't go in the balance sheet.
Answer:
$154,400
Explanation:
net realizable value = accounts receivable - allowance for bad debts
net realizable value = $159,000 - $4,600 = $154,400
The allowance for bad debts account is a contra asset account that reduces accounts receivables account since it adjusts debts that are not expected to be paid.
A product has a demand of 4000 units per year. Ordering cost is $20, and holding cost is $4 per unit per year. The cost-minimizing solution for this product is to order:? A. 200 units per order. B. all 4000 units at one time. C. every 20 days. D. 10 times per year. E. none of the above
Answer:
A. 200 units per order
Explanation:
To solve this you have to use the economic order quantity formula:
[tex]Q_{opt} = \sqrt{\frac{2DS}{H}}[/tex]
Where:
Demand = 4,000
S= supply cost = ordering cost = 20
H= holding cost = 4
[tex]Q_{opt} = \sqrt{\frac{2*4000*20}{4}}[/tex]
Economic Order Quantity = 200
How to Remember:
Demand per year and order cost goes in the dividend.
Holding cost goes in the divisor.
In preparing a company's statement of cash flows for the most recent year, Ransom Corp. reported the following information: Repayment of outstanding bonds $107,000 Purchase of treasury stock $62,000 Issuance of common stock $46,000 Payment of cash dividends $15,000 Net cash flows from financing activities for the year were_________.
Answer: In preparing a company's statement of cash flows for the most recent year, Ransom Corp. reported the following information: Repayment of outstanding bonds $107,000 Purchase of treasury stock $62,000 Issuance of common stock $46,000 Payment of cash dividends $15,000 Net cash flows from financing activities for the year were $138,000.
Explanation:
Repayment of outstanding bonds ($107,000)
Purchase of treasury stock (62,000)
Issuance of common stock 46,000
Payment of cash dividend (15,000)
Net cash used by financing activities = $107,000 plus $62000 minus $46,000 plus $15,000 equals $138,000.
What is a reverse mortgage in simple terms
Answer:
Explanation:
The reverse mortgage is the mortgage which is give to the people who age is 62 years or below . The main aim of providing reverse mortgage loan is to take the loan in exchange of collateral security. The collateral security here means the home which is belongs to the borrower. The loan amount is depend upon the value of the home. The time period to repay the amount is of 6 months . If an borrower is unable to pay the amount, than bank or financial institution has the right to recover the loan amount by selling the house property of the borrower, and also it does not entertain with the monthly payments.
A reverse mortgage is a product offered by a bank to provide liquidity for people who are typically in retirement. The basic idea of a reverse mortgage is for the homeowner to use their equity as a source for retirement income. When the owner of the property dies, the bank must be paid back on that loan.
Wendy Epstein, a sales representative, earns an annual salary of $29,500 and receives a commission on that portion of her annual sales that exceeds $150,000. The commission is 8.5% on all sales up to $50,000 above the quota. Beyond that amount, she receives a commission of 10%. Her total sales for the past year were $295,000. Compute the following amounts:a. The regular annual salary $b. The commission $c. The total annual earnings $b. Calculate commission amounts on sales multiplied by commission percentages.c. Regular annual salary + commission = Total Annual earnings.
Answer:
a. Regular annual salary = $29,500
b. Sales commission = $13,750
c. Total annual earnings = $43,250
Explanation:
a. Regular annual salary is constant and fixed = $29,500
b. Sales commission for sales above $150,000 to $200,000 = 8.5%
On sales above $200,000 Sales commission = 10%
Actual Sales for the year = $295,000
Sales Commission
= $200,000 - $150,000 = $50,000 [tex]\times[/tex] 8.5% = $4,250
+ $295,000 - $200,000 = $95,000 [tex]\times[/tex] 10% = $9,500
Total commission = $4,250 + $9,500 = $13,750
c. Total annual earnings = Annual salary + Total commission
= $29,500 + $13,750 = $43,250
Final Answer
a. Regular annual salary = $29,500
b. Sales commission = $13,750
c. Total annual earnings = $43,250
_____________________ that are issued by government agencies are a form of validation that a worker has completed a certain type of education or passed a certain test.
Answer:
Occupational licences are issued by government agencies
Explanation:
Occupational licensing, a type of government regulation, which requires a valid license to practice a particular profession. It is a proof that an individual has successfully completed a course or passed a test and is eligible to pursue an occupation.
Such a license is issued by a government agency. It is a necessity for practicing certain professions that have a large effect on the citizens. Examples of such professions are doctors, engineers, lawyers etc.
At the beginning of 2018, Uptown Travel, Inc. has the following account balances: Accounts receivable $ 46,000 (Debit) Allowance for Bad Debts $ 8,000 (Credit) During the year, credit sales were $ 820,000. Cash collected on credit sales was $ 750,000, and $ 17,000 was written off. Uptown uses the aging-of-receivables method to record bad debts expense. The amount estimated as uncollectible was $ 29,000. The amount of Bad Debts Expense for 2018 is ________.
Answer:
The amount of bad debt expenses for the year 2018 is $38,000
Explanation:
In the given question we have been told that the allowance for bad debts is $8,000 which the uptown travel, Inc has made and also another information that has been given in the question is that the uptown travel Inc uses the aging of account receivable method , this a method where we are calculating the amount of uncollectible bad debt expenses.
In this question it is been given that there is $17,000 of amount that is written off and there is $29,000 of amount which is uncollectible , so we will add these amount , which will give us the total amount which is uncollectible,
= $29,000 + $ 17,000
= $46,000
But in the question it has been given to us that the uptown travel Inc ahs made a allowance for the bad debts, so we will subtract this amount from the total amount which is uncollectible to get the amount of bad debt expenses.
Bad debt expenses = $46,000 - $8,000
= $38,000
Concord Corporation reported net income of $177,200 for 2017. Concord Corporation also reported depreciation expense of $35,230 and a loss of $4,920 on the disposal of plant assets. The comparative balance sheets show an increase in accounts receivable of $14,160 for the year, a $17,220 increase in accounts payable, and a $4,190 increase in prepaid expenses. Prepare the operating activities section of the statement of cash flows for 2017. Use the indirect method
Answer
Net income 177,200
+35230 depreciation
+4,920 loss on disposal
217,350 adjusted net income (a)
↑↓
↑AR -14,160
↑Prepaid -4,190
↑AP 17,220
Change in working Capital -1,130(b)
Cash Flow generated from operating activities 216,220
Explanation:
(a) we must remove the non-monetary account from the income statement
This means add the non-monetary expenses and losses
Subtract the non monetary revenue and gains
(b)
The increase in assets account have a negative meaning, because it is assumed the company used cash to adquire it.
Whiel increase in liabilities are positive, because the company receive aah or delay the payment of cash.
To prepare the operating activities section of the statement of cash flows using the indirect method, start with the net income and make adjustments for non-cash expenses, gains and losses, and changes in working capital. In this case, the net cash provided by operating activities for 2017 is $216,220.
Explanation:To prepare the operating activities section of the statement of cash flows using the indirect method, we start with the net income and adjust it with non-cash expenses, gains and losses, and the changes in working capital. Here's a step-by-step guide:
Start with Net Income: $177,200Add Depreciation Expense: Depreciation expense is a non-cash expense, so we add it back to the net income. This gives us $177,200 + $35,230 = $212,430Add Loss on Disposal of Plant Assets: The loss on disposal of plant assets is a non-cash loss, so we add it back. This gives us $212,430 + $4,920 = $217,350Adjust for Changes in Working Capital: Subtract the increase in accounts receivable (a use of cash), add the increase in accounts payable (a source of cash), and subtract the increase in prepaid expenses (a use of cash). This gives us $217,350 - $14,160 + $17,220 - $4,190 = $216,220So, the net cash provided by operating activities for 2017 is $216,220.
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Evergreen Corporation manufactures circuit boards and is in the process of preparing next year's budget. The pro forma income statement for the current year is presented below. Sales $ 3,500,000 Cost of sales: Direct Material $ 500,000 Direct labor 250,000 Variable Overhead 275,000 Fixed Overhead 600,000 1,625,000 Gross Profit $ 1,875,000 Selling and General & Admin. Exp. Variable 750,000 Fixed 250,000 1,000,000 Operating Income $ 875,000 For the coming year, the management of Evergreen Corporation anticipates a 5 percent decrease in sales, a 10 percent increase in all variable costs, and a $45,000 increase in fixed costs. The operating profit for next year would be:
Answer:
Operating Profit for next year will be $432,500
Explanation:
Particulars Current Year Next Year
Sales $3,500,000 $3,500,000 X 95%
= $3,325,000
Less: Costs
Material $500,000 $500,000 X 110%
= $550,000
Labor $250,000 $250,000 X 110%
= $275,000
Overhead $275,000 $275,000 X 110%
= $302,500
Fixed OH $600,000 $600,000 + $45,000
= $645,000
Gross Profit $1,875,000 $1,552,500
Less:
Selling & Administrative $750,000 $750,000 X 110%
= $825,000
Fixed Selling $250,000 $250,000 + $45,000
= $295,000
Operating Income $875,000 $432,500
Operating Profit for next year will be $432,500
To calculate Evergreen Corporation's operating profit for the next year, anticipate a 5% decrease in sales, a 10% increase in variable costs, and a $45,000 increase in fixed costs. The projections result in an estimated operating profit of $477,500 for the coming year. The option (A) is correct.
To calculate the operating profit for the next year, the following steps should be taken:
Calculate the expected decrease in sales: $3,500,000 x (1 - 0.05) = $3,325,000.Calculate the new variable costs by increasing each by 10%:Direct Material: $500,000 x 1.10 = $550,000Direct Labor: $250,000 x 1.10 = $275,000Variable Overhead: $275,000 x 1.10 = $302,500Variable Selling and G&A: $750,000 x 1.10 = $825,000Sum the new variable costs: $550,000 + $275,000 + $302,500 + $825,000 = $1,952,500.Add the increase in fixed costs to the existing fixed costs: $600,000 + $250,000 + $45,000 = $895,000.Subtract the total new variable and fixed costs from the new sales to find the operating profit: $3,325,000 - $1,952,500 - $895,000 = $477,500.Therefore, the operating profit for the next year is projected to be $477,500.
This question is not complete, Here I am attaching the complete question:
Evergreen Corporation manufactures circuit boards and is in the process of preparing next year's budget. The pro forma income statement for the current year is presented below. Sales $ 3,500,000 Cost of sales: Direct Material $ 500,000 Direct labor 250,000 Variable Overhead 275,000 Fixed Overhead 600,000 1,625,000 Gross Profit $ 1,875,000 Selling and General & Admin. Exp. Variable 750,000 Fixed 250,000 1,000,000 Operating Income $ 875,000 For the coming year, the management of Evergreen Corporation anticipates a 5 percent decrease in sales, a 10 percent increase in all variable costs, and a $45,000 increase in fixed costs. The operating profit for next year would be:
(A) $477,500
(B) $677,500
(C) $477,000
(D) $977,500
Handley Manufacturing Company has prepared the following flexible budget for August and is in the process of interpreting the variances. F denotes a favorable variance and U denotes an unfavorable variance. Flexible Variances Budget Price Efficiency Material A $ 50 comma 000 $ 1 comma 100F $ 3 comma 600U Material B 69 comma 000 400U 1 comma 100F Direct manufacturing labor 87 comma 000 500U 2 comma 900F The most likely explanation of the above variances for Material A is that ________.
Answer
The most likely explanation is that company purchase a lower quality materials. The cost per unit of materials was lower, but more materials were needed.
Explanation:
Material A
favorable price variance
and unfavorable efficiency variance
The most likely explanation is that company purchase a lower quality materials. The cost per unit of materials was lower, but more materials were needed.
Which of the following statements is CORRECT with respect to variable cost per unit? It will decrease as production decreases It will remain the same as production levels change It will increase as production decreases It will decrease as production increases
Answer:
It will decrease as production decreases
Explanation:
When the cost are variable, they are bound to the production.
If production increase, total variable cost increase.
if production decerase, total variable cost decrease.
if production keeps at the same value, total variable cost ermains at the same value.
We can represent the entry of new firms into a monopolistically competitive market by shifting the existing firms’: a) demand curves downward. b) demand curves upward.c) marginal revenue curves upward. d) cost curves upward. e) cost curves downward.
Answer:
We can represent the entry of new firms into a monopolistically competitive market by shifting the existing firms' cost curves upward. - d)
The entry of new firms into a monopolistically competitive market by shifting the existing firms’ d) cost curves upward.
What is monopolistically competitive market?Monopolistic competition is a type of market structure where many companies are present in an industry, and they produce similar but differentiated products.
None of the companies enjoy a monopoly, and each company operates independently without regard to the actions of other companies.
What are the characteristics of a monopolistically competitive market?Four characteristics of a monopolistically competitive industry are:
Many sellers. There are many sellers in this industry.Easy entrance. Firms in monopolistic competition are small.Differentiated products. Firms in this industry sell differentiated products.Local Advertising.To learn more about monopolistically competitive market, refer
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The Morris Corporation has $350,000 of debt outstanding, and it pays an interest rate of 12% annually. Morris's annual sales are $1.75 million, its average tax rate is 40%, and its net profit margin on sales is 3%. If the company does not maintain a TIE ratio of at least 3 to 1, then its bank will refuse to renew the loan, and bankruptcy will result. What is Morris's TIE ratio? Do not round intermediate calculations. Round your answer to two decimal places.
The Times Interest Earned (TIE) ratio for Morris Corporation is 2.08, which is less than the 3 to 1 ratio expected by its bank. This ratio is calculated by dividing Earnings Before Interest and Taxes (EBIT) by the company’s total interest expense.
Explanation:The TIE (Times Interest Earned) ratio is a measure of a company's ability to meet its debt obligations. In this case, we are asked to calculate this for the Morris Corporation. To begin with, we need to find the Earnings Before Interest and Taxes (EBIT), which is calculated as Sales - Taxes - (Sales - EBIT). Given that the net profit margin (after tax profit) is 3%, we can determine that the pre-tax profit is 5% (3%/(1-40%)). This infers with an annual sale of $1.75 million, the EBIT is $87,500 ($1,750,000 x 5%).
The interest expense is $42,000 ($350,000 x 12%). Therefore, the TIE ratio is 2.08 ($87,500 / $42,000 = 2.08). This implies that Morris Corporation is not maintaining the TIE ratio of 3 to 1 its bank wants, and therefore may face the risk of bankruptcy.
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It is important for a salesperson to understand what service dimensions concern a buyer. A salesperson's question, "Do we send a team to your site for start-up?" addresses the service dimension of _____.
Your question asks what specific service dimension is important for a salesperson to understand and what dimension is the sentence addressing.
Answer: InstallationThe reason why "installation" would be the correct answer is because buyers want to make sure that they're getting whatever they're getting set up by the right people.
A sales person should know the installation service dimension in order to make sales, due to the fact that most buyers want someone that can come and install whatever they bought.
The sentence "Do we send a team to your site for start-up?" addresses installation because the salesperson is telling the buyer if they need to send their team to the buyer in order to install the start up that the buyer has.
I hope this helps!Best regards,MasterInvestorA salesperson's question about sending a team for start-up addresses the delivery service dimension. This relates to how a company's service or product is provided to the customer and is essential for customer satisfaction.
Explanation:When a salesperson asks, "Do we send a team to your site for start-up?", they are addressing the service dimension known as delivery. This involves how the company provides its service or product to the customer. It is a vital component of customer satisfaction, as it includes aspects such as speed, accuracy, and location of the delivery or service provided. Understanding this dimension helps the salesperson tailor their approach and ensure they are meeting the buyer's needs and expectations optimally.
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If labor and capital are perfect substitutes: A. isoquants are linear and downward sloping. B. cost-minimizing firms will generally use only labor or only capital in production, depending on the relative prices of labor and capital. C. the elasticity of substitution between the inputs is infinite. D. All of the above are correct. E. None of the above is correct.
Answer: (D.) All of the above are correct.
Explanation: If the factors of production are perfect substitutes then the following will hold true :
A. Isoquants are linear and downward sloping.
B. Cost-minimizing firms will generally use only labor or only capital in production, depending on the relative prices of labor and capital.
C. The elasticity of substitution between the inputs is infinite.
At the Fish Dish Restaurant, the forecast for Thursday afternoon’s lunch period was 200 meals served. The manager used the restaurant’s staffing guide to schedule employees to work and ended the lunch shift with total labor costs of $425. If the actual lunch revenue amounted to $1,250 and the budgeted lunch labor cost percentage for the month was 32 percent, how close to budget were the labor costs for Thursday’s lunch period?
Final answer:
The labor costs for Thursday's lunch period at the Fish Dish Restaurant were $25 over budget.
Explanation:
To determine how close the labor costs for Thursday's lunch period were to budget, we need to compare the actual labor costs to the budgeted labor costs. The budgeted lunch labor cost percentage for the month was 32%, which means the budgeted labor cost for Thursday's lunch would be 32% of the lunch revenue. The budgeted labor cost can be calculated by multiplying the lunch revenue by the budgeted labor cost percentage: $1,250 x 0.32 = $400.
Since the actual labor costs for Thursday's lunch period were $425, we can determine how close they were to budget by finding the difference between the actual labor costs and the budgeted labor cost: $425 - $400 = $25.The labor costs for Thursday's lunch period were $25 more than the budgeted labor cost. Therefore, they were $25 over budget.How is the measure of occupational prestige determined? a. Employers are asked how prestigious they believe their businesses are. b. Jobs are ranked according to how much they are paid. c. Employees are asked to evaluate the prestige of their jobs. d. A nationwide sample of people is asked to evaluate a series of different jobs.
Answer:
The measure of occupational prestige is determined through the process in which a nationwide sample of people is asked to evaluate a series of different jobs.
Explanation:
Occupational prestige is also known as job prestige. It is a way used by sociologists to define the social position or standing of people based on their occupation. Rather than using the personal attributes of individuals, it ranks people according to their profession or occupation. The ranks lie from 0 to 100, with 0 being lowest score and 100 the highest. These ranks are alloted to different professions by conducting nationwide surveys.
Final answer:
The measure of occupational prestige is determined by averaging the ratings from a nationwide sample of people asked to evaluate different jobs, reflecting society's esteem for these positions.
Explanation:
The measure of occupational prestige is determined by a nationwide sample of people who are asked to evaluate a series of different jobs. Since the late 1940s, these national surveys have gathered Americans' perceptions on the prestige of dozens of occupations, averaging these ratings to yield prestige scores for those occupations. Jobs like physicians, college professors, and elementary school teachers tend to score high in these evaluations, reflecting the high esteem society holds for these positions. Conversely, jobs such as garbage collectors and janitors typically score lower, indicating less societal esteem. This method underscores the idea that occupational prestige is a key indicator of social class in high-income nations, alongside income, wealth, and education.
The most recent financial statements for Assouad, Inc., are shown here: Income Statement Balance Sheet Sales $ 11,100 Current assets $ 5,400 Current liabilities $ 3,300 Costs 7,900 Fixed assets 10,200 Long-term debt 4,820 Taxable income $ 3,200 Equity 7,480 Taxes (24%) 768 Total $ 15,600 Total $ 15,600 Net income $ 2,432 Assets, costs, and current liabilities are proportional to sales. Long-term debt and equity are not. The company maintains a constant 40 percent dividend payout ratio. As with every other firm in its industry, next year’s sales are projected to increase by exactly 17 percent. What is the external financing needed?
Final answer:
To calculate external financing needed for Assouad, Inc., we project next year's sales at a 17% increase and adjust balance sheet items proportionally. After projecting the balance sheet, we find a negative external financing needed of -$1,102.2, indicating that the firm does not need external financing and instead has surplus funds.
Explanation:
To calculate the external financing needed for Assouad, Inc., we first forecast next year's sales and the associated changes in the balance sheet items that are proportional to sales.
With a 17% increase in sales, next year's sales will be $11,100 x 1.17 = $12,987. The current assets, costs, and current liabilities will also increase by 17%. Fixed assets, long-term debt, and equity will not change because they are not proportional to sales according to the information provided.
Next, we determine the new levels of current assets and liabilities. Current assets will be $5,400 x 1.17 = $6,318 and current liabilities will be $3,300 x 1.17 = $3,861. The increase in retained earnings is found by taking the net income after dividends, which is (1 - dividend payout ratio) x net income = (1 - 0.40) x $2,432 = $1,459.2.
Now, we can outline the projected balance sheet for the next year:
Current assets: $6,318Fixed assets: $10,200 (unchanged)Total assets: Current assets + Fixed assets = $6,318 + $10,200 = $16,518Current liabilities: $3,861Long-term debt: $4,820 (unchanged)Equity: Existing equity + increase in retained earnings = $7,480 + $1,459.2 = $8,939.2Total liabilities and equity: Current liabilities + Long-term debt + Equity = $3,861 + $4,820 + $8,939.2 = $17,620.2The external financing needed (EFN) is the difference between the total projected assets and the total projected liabilities and equity. EFN = Total assets - Total liabilities and equity = $16,518 - $17,620.2 = -$1,102.2. A negative EFN suggests that the firm does not need external financing and has an excess of funds.
In a given year, a consulting firm has the following costs: $600,000 in wages and salaries paid to employees; $73,000 in rental payments for office space; and $82,000 for office supplies, advertising, and utilities. In addition, Caroline, the owner of the firm, works for the firm full time (and is not paid a salary, since she receives the firm's profits). If she did not work for the consulting firm, Caroline could earn $130,000 per year working as a consultant for another firm. For each possible amount of total revenue, fill in the accounting profit and economic profit of the advertising firm.
Total Revenue ($) Accounting Profit ($) Economic Profit ($)
750,000
800,000
850,000
900,000
Answer:
750,000 -5,000 - 125,000
800,000 45,000 - 75,000
850,000 95,000 - 25,000
900,000 145,000 15,000
Explanation:
600,000 wages
73,000 rent
82,000 supplies
operating cost 755,000
opportunity cost 130,000
accounting profit revenue - operating costeconomic profit = accounting profit - opportunity costThe consulting firm's accounting profit and economic profit are calculated by deducting explicit costs and both explicit and implicit costs respectively from the total revenue. The calculations have been done for different values of total revenue to provide the respective profits.
Explanation:The total cost incurred by the firm equals the sum of wages and salaries, rental payments, office expenses and the opportunity cost of the owner (Caroline's potential income). Here, the total cost incurred is $600,000 (wages and salaries) + $73,000 (rental payments) + $82,000 (office expenses) + $130,000 (opportunity cost) = $885,000.
Accounting profit is the total revenue minus the explicit costs (wages, salaries, rent, and office expenses), and economic profit is the total revenue minus both explicit and implicit costs (the opportunity cost).
Therefore, for each given level of total revenue:
When Total Revenue = $750,000: Accounting Profit = $750,000 - $755,000 = -$5,000; Economic Profit = $750,000 - $885,000 = -$135,000 When Total Revenue = $800,000: Accounting Profit = $800,000 - $755,000 = $45,000; Economic Profit = $800,000 - $885,000 = -$85,000 When Total Revenue = $850,000: Accounting Profit = $850,000 - $755,000 = $95,000; Economic Profit = $850,000 - $885,000 = -$35,000 When Total Revenue = $900,000: Accounting Profit = $900,000 - $755,000 = $145,000; Economic Profit = $900,000 - $885,000 = $15,000Learn more about Economic and Accounting Profit here:
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A basic tenet of variable costing is that fixed manufacturing overhead costs be currently expensed. What is the rationale behind this? A. Fixed manufacturing overhead costs occur regardless of level of production. B. Fixed manufacturing costs change as production changes. C. Allocation of fixed manufacturing costs are arbitrary at best. D. Fixed manufacturing overhead costs are generally immaterial in amount.
Answer:
C. Allocation of fixed manufacturing costs are arbitrary at best.
Explanation:
A.- Yes, fixed cost occurs regardless of the level of production, but that is true for every costing method, and some of them do calculate a unit rate for fixed overhead. the statment is partially true
B.- If fixed cost changes with the level of production then, are variable cost, not fixed. Statement is FALSE
C. The allocation of fixed manufacturing costs is arbitrary at best. This is the reasoning for variable costing to consider fixed cost expenses, the method of allocating cost, using a rate always generates a difference in applied and overapplied MO It generates distortions and is not objective, it is based on personal option. The use of direct labor hours, cost or machine hours is evidence of that. TRUE
D.- There is such a cost, like depreciation, but others do incur in cash disbursements, like rent, indirect materials, supervisors, maintenance cost and others.is Statment is FALSE
Fixed manufacturing overhead costs are expensed in variable costing as they occur regardless of production levels, aiding in cost analysis and decision-making.
One of the reasons behind expensing fixed manufacturing overhead costs in variable costing is that fixed manufacturing overhead costs occur regardless of the level of production. This means that even if production levels change, fixed overhead costs remain constant.
Expensing fixed manufacturing overhead costs aligns with the principle of variable costing, where only variable costs are included in the cost of goods sold. This method helps in providing a clear understanding of the costs directly tied to production.
By immediately expensing fixed manufacturing overhead costs, companies can better analyze the cost of producing each unit and make informed decisions on pricing and production levels.
On January 1, Puckett Company paid $1.6 million for 50,000 shares of Harrison's voting common stock, which represents a 40 percent investment. No allocation to goodwill or other specific account was made. Significant influence over Harrison is achieved by this acquisition and so Puckett applies the equity method. Harrison distributed a dividend of $2 per share during the year and reported net income of $560,000. What is the balance in the Investment in Harrison account found in Puckett's financial records as of December 31?
Answer: the correct answer is $1,724,000
Explanation: $560,000 x 0.40= 224,000 (net income times percentage of Harrison's voting common stock)
$2/ share x 50,000= (100,000) (the company paid 2$ dollars per share and there are 50000 shares)
1.6 million + 224,000 - 100,000= $1,724,000
Ace Industries has current assets equal to $9 million. The company's current ratio is 2.0, and its quick ratio is 1.5. Do not round intermediate calculations. Round your answers to the nearest dollar. What is the firm's level of current liabilities? $ What is the firm's level of inventories?
Answer: current liability = 4.5 million
inventory = 2.25 million
Explanation: Current ratio can be defined as a liquidity ratio that is used to analyze whether the company has enough resources to fulfill its short term obligations. It is computed as follows :-
[tex]current\:ratio\:=\frac{current\:assets}{current\:liability}[/tex]
[tex]current\:ratio\:=\:\frac{9million}{current\:liabilities}[/tex]
therefore,
current liabilities= [tex]\frac{9\million}{2}[/tex]
= 4.5 million
.
Quick ration is more stringent liquidity ratio. It is computed as follows :-
[tex]quick\:ratio\:= \frac{current\:assets\:-\:inventories}{current\;liabilities}[/tex]
[tex]1.5\:=\frac{9}{4.5}[/tex]
solving this equation we get
inventory = 2.25 million
Answer:
The correct answer is current liabilities is equal to $4.5 million and firm's level of inventory is $2.25 million.
Explanation:
Both current ratio and quick ratio are know as liquidity ratio which tells about the ability of a firm to meet its short term obligations.
The only difference between these two ratio is of taking inventory and prepaid expenses in to account, as while calculating the quick ratio we don't take inventory and prepaid expenses in to account.
Formula for current ratio = [tex]\frac{CURRENT ASSET}{CURRENT LIABILITIES}[/tex]
Where the current ratio is 2.0 and current assets is equal to $9 million,
[tex]\frac{\$9\ million}{CURRENT\ LIABILITIES}= 2.0[/tex]
CURRENT LIABILITIES = $4.5 MILLION
Formula for quick ratio = [tex]\frac{QUICK ASSETS}{CURRENT LIABILITIES}[/tex]
Here current liabilities = $4.5 million,
Quick asset = current assets - inventory
[tex]\frac{\$9\ MILLION - INVENTORY}{\$4.5\ MILLLION}= 1.5[/tex]
INVENTORY = $9 MILLION - $6.75 MILLION
INVENTORY = $2.25 MILLION
Which of the following typically happens as prices for a good or service rises?a. suppliers leave the marketb. consumers seek more of the good or service to consumec. demand becomes increasingly elasticd. more suppliers enter the market
Answer:
The correct answer is option D.
Explanation:
As the price of product increases the consumers will demand less because they now have to pay more than earlier.
The supply however is directly related to price level and will increase with the increase in price. The producers will produce more in order to enjoy higher revenue and profit.
This would encourage the other potential firms to enter the market, to earn higher profits.So more suppliers will enter the market.
However, this would lead to increase in supply of output. The excess supply will cause the price to fall eliminating higher profits.
When prices for a good or service rise, typically, more suppliers enter the market to take advantage of higher potential profits. This increase in suppliers is a response to the opportunities created by higher prices, leading to an increase in the quantity supplied.
The question which typically happens as prices for a good or service rise can be answered by understanding basic economic principles. When prices rise due to increased demand or reduced supply, it creates an opportunity for higher profits, which in turn attracts more suppliers into the market. This is because suppliers are always looking for markets where they can sell their products at higher prices to maximize their earnings. Moreover, the increased competition among suppliers aiming to take advantage of the higher prices may lead to an increase in the quantity supplied of the good or service. Hence, the correct answer is: more suppliers enter the market.
The carrying value of a $500,000, 4 year note with an 8 percent face rate (paid semiannually) that was issued to yield 9 percent is $491,031.19. What is the interest expense for the next interest period? A) $20,000.00 B) $19,641.25 C) $22,096.40 D) $44,192.81
Answer:
The answer is $22096,40
Explanation:
The annual interest expense is calculated: Nominal Value * yield rate*carrying value/nominal value. Because this note is paid semiannually, the formula is Nominal value * yield rate/2, where nominal value is equal to the face value ($500,000), and the yield rate = 9%. Because the carrying value is less than the nominal value, the cost for the company is less than the nominal expense.
So, the interest expense is $500,000 * 0.09/2 * 491,031.19/500,000 = 22,096,40
You've told Dan, a new contact, that you're looking for a qualified sales representative. Now you want to find out if there's any way you can help his business. What's an effective way to approach the question?
A. Hint that you might be willing to help him in return for referrals. B. Tell him you've heard his field has some major problems and offer to help. C. Give him your business card and tell him to call if he ever needs anything. D. Ask him if he has any challenging problems in his business. 19 . please answer only of right
Answer:
Ask him if he has any challenging problems in his business.-D.
Jason is developing a research design for a study of wine drinkers. The target population is widely dispersed. Jason needs to collect data on past consumption behavior and intentions for future behavior. Which type of data collection method is most appropriate for Jason's project? A. CommunicationB. ObservationC. MonitoringD. ExperimentalE. Causal
Answer:
The type of data collection which is most appropriated here is A) communication.
Explanation:
For Jason to collect the data for his study on wine drinkers , he needs to communicate the people who have tasted the wine, he needs to listen to those peoples stories , their evaluation about the wine , do they like it or not . Jason needs to meet those people to understand their communication characteristics, it will be really important on the Jason's part to get an insight in to what these people think about wine and enact their realities.
Final answer:
For Jason's study of wine drinkers' behavior with a dispersed target population, survey research is the most suitable data collection method because it allows for the efficient collection of self-reported data from a large number of respondents.
Explanation:
Jason is conducting a research study on wine drinkers' past consumption behavior and intentions for future behavior within a widely dispersed target population. Considering the need to collect self-reported data over a broad geographical area, the most appropriate data collection method for Jason's project is survey research. Surveys are generally efficient for collecting data from large samples, which makes them suitable for studies where participants are dispersed. As a result, survey research allows for generalization to the larger population, but one must be cautious of potential biases related to self-reported data. In this case, Jason will likely design a questionnaire that wine drinkers across various locations can complete, perhaps through online platforms, mail, or telephone interviews. This approach will enable him to gather the necessary information on consumption habits and future intentions without the need to observe behavior directly or conduct controlled experiments, which may not be feasible given the geographic dispersion of the population.
A man uses a loan program for small businesses to obtain a loan to help expand his vending machine business. The man borrows $26 comma 000 for 4 years with a simple interest rate of 1.4%. Determine the amount of money the man must repay after 4 years.
To find the total repayment amount after 4 years for a $26,000 loan at a 1.4% simple interest rate, calculate the interest ($1,456) and add it to the principal, resulting in a total of $27,456.
The subject of this question is Mathematics, specifically focusing on the calculation of simple interest and the total repayment amount of a loan. To determine the amount of money the man must repay after 4 years on a loan of $26,000 with a simple interest rate of 1.4%, we use the formula for simple interest: Interest = Principal imes Rate imes Time.
The principal (P) is $26,000, the rate (r) is 1.4% or 0.014 (as a decimal), and the time (T) is 4 years. Plugging these values into the formula:
Interest = $26,000 times 0.014 times 4 = $1,456
The total amount of interest that the man would need to pay over 4 years is $1,456. To find the total repayment amount, we add the interest to the original principal:
Total Repayment Amount = Principal + Interest
Total Repayment Amount = $26,000 + $1,456 = $27,456
Therefore, the man must repay $27,456 after 4 years.
A farmer is considering the purchase of additional land to expand operations. The marginal tax rate is 20% And He requires at least a 10% pre-tax, risk free return on capital and a 3% risk premium on projects on comparable risk. What is the after-tax, risk adjusted discount rate? r=[rbt +PREM](1-m)
Answer:
r = 10.4%
Explanation:
[tex]r = (r_{bt} + prem) (1-m) \\where: \\r = after \: tax, risk-free \: adjusted \: discount \: rate\\r_{bt} = rate \: before \: tax, risk \: free\\PREM = risk \: premium\\m = tax \: rate\\[/tex]
r = (.1+0.03) * (1-.20)
r= 0.104 = 10.4%