Answer:
4. informed
Explanation:
An Informed trader only makes his buying or selling decision based on publicly available information.
Magic Realm, Inc., has developed a new fantasy board game. The company sold 35,600 games last year at a selling price of $62 per game. Fixed expenses associated with the game total $623,000 per year, and variable expenses are $42 per game. Production of the game is entrusted to a printing contractor. Variable expenses consist mostly of payments to this contractor. Required: 1-a. Prepare a contribution format income statement for the game last year. 1-b. Compute the degree of operating leverage. 2. Management is confident that the company can sell 43,788 games next year (an increase of 8,188 games, or 23%, over last year). Given this assumption: a. What is the expected percentage increase in net operating income for next year
Answer:
1a.
Magic Realm, Inc.,
Contribution format income statement
Per Unit Amount
Sales 62 2,207,200
Variable expenses 42 (1,495,200)
Contribution margin 20 712,000
Fixed expenses (623,000)
Net operating profit 89,000
1b.
Degree of operating leverage: 4
2. The expected percentage increase in net operating income for next year: 184%
Explanation:
1a. Please refer to the answer part
1b. Degree of operating leverage = Contribution margin / net operating profit = 712,000/89,000 = 8.
2.
Expected percentage increase in net operating income for next year = Expected percentage increase in sales next year x operating leverage = 23% x 8 = 184%
Final answer:
Degree of Operating Leverage: 1.72
Expected Percentage Increase in Net Operating Income for Next Year: 47.60%
Explanation:
Magic Realm, Inc. Contribution Format Income Statement:Total Sales: $2,205,200Total Variable Expenses: $1,495,200Total Contribution Margin: $710,000Total Fixed Expenses: $623,000Operating Income: $87,000Degree of Operating Leverage: 1.72Expected Percentage Increase in Net Operating Income for Next Year: 47.60%Assume each month has 30 days and AmDent has a 60-day accounts receivable period. During the second calendar quarter of the year (April, May, and June), AmDent will collect payment for the sales it made during which of the months listed below? A. October, November, and December B. November, December, and January C. December, January, and February D. January, February, and March E. February, March, and April
Answer:
The correct answer is E
E. February, March and April
Explanation:
Payment for February will be received in April
Payment for March will be received in May
Payment for April will be received in June
the second quarter is April. May and June
Which of the following is not a capital expenditure? Multiple Choice Advertising expenditures to introduce a new product line Sales tax paid in conjunction with the purchase of new machinery Installation of elevators to replace escalators An amount paid to acquire a patent with a remaining life of only three years
In the given options, advertising expenditures to introduce a new product line is not considered a capital expenditure because it doesn't involve purchasing or upgrading productive assets. Instead, it's an operational expense.
Explanation:A capital expenditure is an amount spent to acquire or upgrade productive assets, like buildings, machinery, and technology, to increase the capacity or efficiency of a company for more than one accounting period. Advertising expenditures to introduce a new product line is not a capital expenditure, but an operational expense. Other options in the multiple choice such as Sales tax paid in conjunction with the purchase of new machinery, installation of elevators to replace escalators, and an amount paid to acquire a patent (even with a remaining life of 3 years), are all examples of capital expenditures because they are investments improving the company’s performance in the long run.
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Among the options, 'Advertising expenditures to introduce a new product line' is not a capital expenditure. While this is spending by the firm, it does not contribute to future profits in the way that capital expenditures (like machinery purchases or patent acquisitions) do.
Explanation:The question here is to identify which among the given options is not a capital expenditure. Capital expenditures are funds used by a company to acquire, upgrade, and maintain physical assets such as property, buildings, an industrial plant, technology, or equipment. This caters to investments that affect the company’s future operating capacity and income. In the provided options, the 'Advertising expenditures to introduce a new product line' is not a capital expenditure. Advertising is considered as a revenue expenditure that is used for promoting a firm's goods and services, and its effect is short-term.
However, other options like paying sales tax for new machinery, installing elevators to replace escalators, and paying to acquire a patent (even if its life is only three years remaining), are examples of capital expenditures, as they contribute to future profits and are thus capitalized and depreciated over time.
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The current Stock price is P0 = $30.00; next year's expected dividend is $2.70 (D1 = $2.70); and the dividend is expected to grow at a constant rate of 8%. What is the firm’s expected cost of retained equity (rs)? (Careful!)
Answer:
Cost of Equity = 17%
Explanation:
Current Stock Price = Expected Dividend/(Cost of Equity - growth rate)
30 = 2.70/(Cost of Equity - 8%)
Cost of Equity = 17%
Norr and Caylor established a partnership on January 1, 2010. Norr invested cash of $100,000 and Caylor invested $30,000 in cash and equipment with a book value of $40,000 and fair value of $50,000. For both partners, the beginning capital balance was to equal the initial investment. Norr and Caylor agreed to the following procedure for sharing profits and losses:
- 12% interest on the yearly beginning capital balance;
- $10 per hour of work that can be billed to the partnership's clients; and
- the remainder divided in a 3:2 ratio.
The Articles of Partnership specified that each partner should withdraw no more than $1,000 per month.
For 2010, the partnership's income was $70,000. Norr had 1,000 billable hours, and Caylor worked 1,400 billable hours. In 2011, the partnership's income was $24,000, and Norr and Caylor worked 800 and 1,200 billable hours, respectively. Each partner withdrew $1,000 per month throughout 2010 and 2011.
Required:
(A) Determine the amount of net income allocated to each partner for 2010.
(B) Determine the balance in both capital accounts at the end of 2010
Norr's net income allocation for 2010 is $36,640, and Caylor's is $33,360. Their capital account balances at the end of 2010 are $124,640 and $101,360.
(A) Determination of net income allocated to each partner for 2010:
Calculate the interest on the beginning capital balance for each partner.
Norr's beginning capital balance = $100,000
Interest on Norr's beginning capital balance = 12% * $100,000 = $12,000
Caylor's beginning capital balance = $30,000 + $50,000 (fair value of equipment) = $80,000
Interest on Caylor's beginning capital balance = 12% * $80,000 = $9,600
Calculate the compensation for billable hours for each partner.
Norr's compensation = 1,000 billable hours * $10 per hour = $10,000
Caylor's compensation = 1,400 billable hours * $10 per hour = $14,000
Calculate the remaining profit to be divided in the 3:2 ratio.
Total profit for 2010 = $70,000
Total allocated amount = $12,000 (interest for Norr) + $9,600 (interest for Caylor) + $10,000 (compensation for Norr) + $14,000 (compensation for Caylor) = $45,600
Remaining profit = $70,000 (total profit) - $45,600 (total allocated amount) = $24,400
Ratio of profit allocation = 3:2
Norr's share = $24,400 * (3/5) = $14,640
Caylor's share = $24,400 * (2/5) = $9,760
Calculate the total allocation for each partner.
Norr's total allocation = $12,000 (interest) + $10,000 (compensation) + $14,640 (remaining profit) = $36,640
Caylor's total allocation = $9,600 (interest) + $14,000 (compensation) + $9,760 (remaining profit) = $33,360
Therefore, the net income allocated to Norr for 2010 is $36,640, and the net income allocated to Caylor for 2010 is $33,360.
(B) Determination of the balance in both capital accounts at the end of 2010:
Norr's capital account balance at the end of 2010:
Beginning balance = $100,000
Add: Net income allocated = $36,640
Subtract: Withdrawals = $12,000
Ending balance = $124,640
Caylor's capital account balance at the end of 2010:
Beginning balance = $80,000
Add: Net income allocated = $33,360
Subtract: Withdrawals = $12,000
Ending balance = $101,360
Therefore, the balance in Norr's capital account at the end of 2010 is $124,640, and the balance in Caylor's capital account at the end of 2010 is $101,360.
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Sand Explorers issues bonds due in 12 years with a stated interest rate of 8% and a face value of $270,000. Interest payments are made semi-annually. The market rate for this type of bond is 7%. Using present value tables, calculate the issue price of the bonds. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
Answer:
$291,686
Explanation:
Market Value of the bond is the present value of all cash flows of the bond. These cash flows include the coupon payment and the maturity payment of the bond. Price of the bond is calculated by following formula:
According to given data
Coupon payment = C = $270,000 x 8% = $21600 annually = $10800 semiannually
Number of periods = n = 2 x 24 years = 24 periods
Discount rate = 7% annual = 3.5%
There are two cash flows associated with this bond, first is 24 coupon annuity payments which can be discounted by using annuity factor at 3.5 %. Second is the is maturity payment which is discounted using simple discount factor at 3.5%.
Issue Price of Bond = ( Coupon Payment x annuity factor ) + ( Maturity Payment x Simple discount factor )
Issue Price of Bond = ( $10,800 x 16.058 ) + ( $270,000 x 0.438 )
Issue Price of Bond = $173,426.4 + $118,260
Issue Price of Bond = $291,686.4
Discount Table is attached in MS Excel File format Please find it.
The chart gives prices and output information for the country of Utopia. Use this information to calculate real and nominal GDP for both years. Use 2017 as the base year. 2016 2017 Price Quantity Price Quantity Ice cream $7.00 600 $3.00 400 Blue jeans $70.00 20 $20.00 90 Laptops $300.00 5 $300.00 5
Answer: Nominal GDP 2016 = $7,100
REAL GDP 2016 = $3,700
Nominal GDP 2017 = $4,500
Real GDP 2017 = $4,500
Explanation:
To calculate the Nominal and Real GDPs we use the following formulas,
Nominal GDP = Sum of (Current Year Price x Current Year Quantity)
Real GDP = Sum of (Base Year Price x Current Year Quantity)
We make the assumption that 2017 is the base year so calculating would be,
Nominal GDP, 2016 = [(7 x 600) + (70 x 20) + (300 x 5)]
= $(4200 + 1400 + 1500)
= $7,100
Remember for this we will use 2017 as the base year so we will use 2017 prices
Real GDP, 2016 = [(3 x 600) + (20 x 20) + (300 x 5)]
= $(1800 + 400 + 1500)
= $3,700
Nominal GDP, 2017 = [(3 x 400) + (20 x 90) + (300 x 5)]
= $(1200 + 1800 + 1500)
= $4,500
Now seeing as 2017 is the base year, it's nominal and real GDPs will be the same.
Real GDP, 2017 = $[(3 x 400) + (20 x 90) + (300 x 5)]
= $(1200 + 1800 + 1500)
= $4,500
I included the details part of question so it is clearer.
If you have need any clarification do react or comment.
If the domestic demand curve is Equal 20p Superscript negative 0.5, the domestic supply curve is Equal 5p Superscript 0.5, and the world price is $7.00, use calculus to determine the changes in consumer surplus, producer surplus, and welfare from eliminating free trade. The change in consumer surplus (Upper DeltaCS) from eliminating free trade is $ nothing. (Enter your resp
Answer:
$52
$ 1.33
consumer price will increase consumer surplus will decreaseimport will decrease reduced exportportends gloom for the general outlook for the economyExplanation:
Given domestic demand curve, S(p) = 20p⁻⁰°⁵
the domestic supply curve S(p)= 5p⁰°⁵
world price is $7.00
using calculus to determine the changes in consumer surplus
by consumer surplus means in this case supply exceeds demand
we establish the equilibrium point where the supply and demand functions meet or are equal
solving 20p⁻⁰°⁵ = 5p⁰°⁵
20/5 = p⁰°⁵/p⁻⁰°⁵
4 = p⁰°⁵⁺⁰°⁵
4= p = q which is the quantity produced
consumer surplus = maximum price willing to pay - Actual price
= ∫⁴₀ dp dp - p* q
= ∫⁴₀20p⁻⁰°⁵ dp- 7* 4
= 20∫⁴₀p⁻⁰°⁵ dp -28
= 20/0.5 p⁰°⁵- 28
= 40 *4⁰°⁵ - 28 = $52
producer surplus = it is a measure of producer welfare. It is measured as the difference between what producers are willing and able to supply a good for and the price they actually receive
thus producer surplus = p* q - ∫⁴₀ d(s) dp
= 7 * 4 - ∫⁴₀ 5p⁰°⁵ dp
= 28 - 5 ∫⁴₀ p⁰°⁵ dp
= 28 -5 *2/3 p¹°⁵
= 28 -5 *2/3 4¹°⁵
=$ 1.33
welfare from eliminating free trade
consumer price will increase consumer surplus will decreaseimport will decrease reduced exportsportends gloom for the general outlook for the economyInvesting $2,000,000 in TQM's Channel Support Systems initiative will at a minimum increase demand for your products 3.0% in this and in all future rounds. (Refer to the TQM Initiative worksheet in the CompXM Decisions menu.) Looking at the Round 0 Inquirer for Andrews, last year's sales were $163,508,343. Assuming similar sales next year, the 3.0% increase in demand will provide $4,905,250 of additional revenue. With the overall contribution margin of 34.1%, after direct costs this revenue will add $1,672,690 to the bottom line. For simplicity, assume that the demand increase and margins will remain at last year's levels. How long will it take to achieve payback on the initial $2,000,000 TQM investment, rounded to the nearest month
Answer:
Payback is 14 months
Explanation:
The payback period is the length taken by an investment opportunity to repay itself.In other words,it refers to how long it takes for funds invested in a project to be recouped back.
The formula for payback period=cost of investment/annual profit increase from investment
The TQM investment would cost $2,000,000
The investment would improve bottomline(profit level) by $1,672,690 annually
payback period=$2,000,000/$1,672,690=1.20
It would more appropriate to express the payback in months since it is just a little beyond one year
Payback in months=1.20*12 months=14.4 months
Approximately 14 months
The following condensed balance sheet is for the partnership of Miller, Tyson, and Watson, who share profits and losses in the ratio of 6:2:2, respectively: Cash $ 62,000 Liabilities $ 61,000 Other assets 162,000 Miller, capital 72,000 Tyson, capital 72,000 Watson, capital 19,000 Total assets $ 224,000 Total liabilities and capital $ 224,000 For how much money must the other assets be sold so that each partner receives some amount of cash in a liquidation?
Answer:
$67,000
Explanation:
Miller$72,000/60%=$ 120,000 loss to eliminate capital
Tyson$72,000/20%=$ 360,000 loss to eliminate capital
Watson$19,000/20%=$ 95,000 loss to eliminate capital
Watson is the partner most vulnerable to a loss of $95,000 which will inturn eliminate Watson's capital balance
Hence:
$162,000-$95,000
=$67,000
Therefore if the loss on disposal is less than $95,000, all partners will retain positive capital balances and receive some cash in liquidation reason been that other assets which is $162,000, must be sold for any amount over $67,000 for all partners to get cash.
is expected to pay a dividend of $3.33 next year. The company's dividend growth rate is expected to be 3.1 percent indefinitely and investors require a return of 12.5 percent on the company's stock. What is the stock price
Answer:
Stock price = $35.425
Explanation:
According to the dividend growth model, the price of a stock is the present value of expected dividend discounted at the required rate of return.
This is done as follows:
Price of a stock = D×(1+r)/(r-g)
g- 3.1%, r -12.5
D×(1+r) = 3.33,Note that the dividend payable in year one = 3.33. We don't need to grow the dividend again. D stands for dividend in year O.
Price of stock
= 3.33/(0.125-0.031)
= $35.425
Stock price = $35.425
Answer:
Stock price $35.43
Explanation:
The dividend discount model calculated the price of a company's stock on assumption that its current price is equal to the sum of all of its future dividend payments when discounted back to their present value.
P = D1/ r - g
D1 $3.33 g 3.1% r 12.5% P ?
P = 3.33/ 0.125-0.031
= $35.43
e Arlington Motor Pool Internal Service Fund had the following transactions and events during January 2018. Using the "Additional Information" provided below. Prepare journal entries to record the following transactions: January 2018 transactions: 1. Paid salaries for the month in cash (1/12 of $80,000) 2. Paid $600 cash for fuel and maintenance expenses 3. Recorded depreciation expense for the month 4. Recorded insurance expense for the month 5. Accrued benefits expense for the month 6. Billed for motor vehicle services as follows: General Fund, 80 trips; Golf Course Enterprise Fund, 10 trips
Answer:
Journal Entries
1) Debit Salaries Expense $6,667 Credit Bank $6,667
2) Debit Fuel and Maintenance expense $600, Credit Bank $600
3) Debit Depreciation Expense $amount Credit Accumulated depreciation $amount
4) Debit Insurance Expense $amount Credit Bank $amount
5) Debit Benefit Expense $amount Credit Accrued Benefit Expense $amount
6) Debit Accounts Receivable ( total of all trips) $amount Credit Service Revenue $amount
Explanation:
The Question is incomplete but i will do the typical journal entries to the transactions without figures.
1) The salaries are for one month and in brackets there is a $80,000*1/12 calculation meaning the $80,000 is for the year, now if it was already recorded then we debit salaries payable $6,667 credit bank $6,667
4) Insurance expense is debited if it is paid as it is incurred but if it has an Prepaid insurance account then we credit the Prepaid insurance account instead of Bank.
1. Assume that Walmart can borrow at yield of 5% in USD (5-year, zero coupon debt, issued in the US), before issuance costs. Alternatively, they could issue the same debt denominated in EUR in the eurobond market at a yield of 5.25%. Unfortunately, issuance costs are 3% for EUR debt but only 2% for USD debt. Assume also that annualized risk-free, zero coupon rates for 5 years are 4% USD, 4.5% EUR. Assume covered interest parity holds. a. What are the all-in costs of the two debt issues, assuming Walmart hedges their exchange rate exposure in the forward market? (Note that the AIC of the EUR debt does not depend directly on the spot or forward exchange rates, but only on the ratio.) b. Ignoring issuance costs, at what EUR yield would the cost of EUR debt equal that of USD debt (i.e., 5%), again assuming Walmart hedges the exchange rate risk? c. What are the multiplicative credit spreads in the USD and EUR markets at these yields?
Answer:
it wold be cheap because walmart is cheap and by the way does walmart have toilet paper yet i havent gone so i dont know
Explanation:
Tulip Midwifery's cost formula for its wages and salaries is $2,640 per month plus $606 per birth. For the month of January, the company planned for activity of 181 births, but the actual level of activity was 192 births. The actual wages and salaries for the month was $119,625. The wages and salaries in the flexible budget for January would be closest to:
Answer:
$112,326
Explanation:
The computation of wages and salaries is shown below:-
For computing the total wages and salaries first we need to find out the variable cost which is here below:-
Variable cost = Activity Births × Per birth
= 181 × $606
= $109,686
Total wages and salaries = Fixed cost + Variable cost
= $2,640 + $109,686
= $112,326
So, for computing the total wages and salaries we simply applied the above formula.
Suppose the restaurant industry is perfectly competitive. All producers have identical cost curves and the industry is currently in long-run equilibrium, with each producer producing at its minimum long-run average total cost of $8.
a. If there is a sudden increase in demand for restaurant meals, what will happen to the price of a restaurant meal? How will individual firms respond to the change in price? Will there be entry or exit from the industry? Explain.
b. In the market as a whole, will the change in the equilibrium quantity be greater in the short-run or the long-run? Explain.
c. Will the change in output on the part of individual firms be greater in the short-run or the long- run? Explain and reconcile your answer to part (b).
Answer:
Explanation:
A. Supply stays the same, demand decreases since restaurants are normal goods. As a result, the equilibrium price and the equilibrium quantity will go down.
B. In the short run, the existing firms reduce their output causing Q* to fall. In the long run, as firms exit, Q* falls even further.
C. An individual firm may produce in the short run, but exit from the industry in the long run. As a result, the firm will decrease its quantity produced up to 0. Therefore, in the long run the output of an individual firm may change drastically comparing with the short run.
On December 31, 2021, Coolwear Inc. had balances in Accounts Receivable and Allowance for Uncollectible Accounts of $42,000 and $1,150, respectively. During 2022, Coolwear wrote off $900 in accounts receivable and determined that there should be an allowance for uncollectible accounts of $5,400 at December 31, 2022. Bad debt expense for 2022 would be:
Answer:
$5,150
Explanation:
Allowance for doubtful debts-opening A $1,150
Allowance for doubtful debts-closing B $5,400
C=B-A $4,250
Bad Debts Written Off D $900
Bad Debt Expense for the year 2022 E=C+D $5,150
Answer:
$5,150
Explanation:
Bad debts expense are expenses which are uncollectible and this often occur in a case where a company or organisation delivered their goods or services on credit in which the customer fails to pay the amount owed due to the customer inability to fulfill his /her financial obligations which is why BAD DEBT EXPENSES is often recorded and accounted for whenever a company or organisation prepares their financial statements or book of account.
Coolwear Inc.
Balances in Accounts Receivable and
Coolwear wrote off in accounts receivable $900
Allowance for Uncollectible Accounts of $1,150
Allowance for uncollectible accounts of $5,400
$900-$1,150+$5,400 =$5,150
Therefore Bad debt expense for 2022 would be $5,150
On April 1, 2018, Ellucian Corporation invested in the bonds issued by the City of Westminster on January 1, 2018. These 10minusyear, $ 400 comma 000 bonds pay interest of 2% with semiannual payments every June 30 and December 31. Ellucian paid par value plus accrued interest. What is the total amount paid by Ellucian for the City of Westminster bonds?
Answer:
$402,000
Explanation:
The computation of the total amount paid is shown below:
Total amount paid = Face value + accrued interest
where,
Face value of the bond is $400,000
And, the accrued interest is
= $400,000 × 2% × 3 months ÷ 12 months
= $2,000
The 3 months is calculated from April 1 to June 30
So, the total amount paid i s
= $400,000 + $2,000
= $402,000
We added the face value and the accrued interest to determine the total amount paid
Carolina Biological Supply Company sells science instructional materials. It wants to grow beyond the current customer base and identify potential markets besides the public education systems. What is the order it should follow to take in the market targeting process? Multiple Choice Question
The market targeting process for expanding a company's customer base involves market segmentation, evaluation, choosing a targeting strategy, and developing a positioning strategy. Product differentiation, customer service enhancement, and leveraging B2B platforms are ways to increase demand. Globalization and technology advancements have expanded market definitions and competition.
Explanation:The market targeting process for a company like the Carolina Biological Supply Company, which wants to expand its customer base beyond public education systems, involves several steps. The process typically begins with market segmentation, where the company identifies distinct groups within a larger market that could potentially be customers. After segmentation, the company then moves on to market evaluation, assessing the attractiveness of each segment based on factors such as size, growth potential, and competitive landscape. Subsequently, the company would decide on a targeting strategy, choosing which segments are the most viable to pursue. Finally, it would develop a positioning strategy for its offerings that resonates with the selected target markets, using differentiation strategies such as product features, customer service, and marketing communications.
To increase demand for their products, monopolistically competitive firms like Carolina Biological Supply Company can focus on product differentiation, improving customer service, engaging in product innovation, and leveraging business-to-business (B2B) platforms to reach a wider audience both on national and international levels. Improving the quality and features of their products can make them stand out in the marketplace, thus attracting more demand.
Globalization and technology are two significant shifts that have redefined markets. With the advent of the internet and B2B websites, suppliers and buyers can connect globally, increasing competition. For a company like Carolina Biological Supply Company, utilizing these platforms can help identify new market opportunities and enable the company to compete on a larger scale.
Wanting to finalize a sale before year-end, on December 29, WR Outfitters sold to Bob a warehouse and the land for $125,000. The appraised fair market value of the warehouse was $75,000, and the appraised value of the land was $100,000. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) a. What is Bob’s basis in the warehouse and in the land?
Answer:
$53,571 $ $71, 429
Explanation:
The basis for land and warehouse represents the value to be recorded in the books of Bob. When assets are acquired, they are recorded at their cost price, referred to as the basis.
Bob acquired the land and the warehouse by paying a total of $125,000. The combined basis for the two will be $125,000. To determine the basis for each, we will use their fair value to apportion the basis proportionately.
The total fair value for the land and warehouse is $175,000( 75,000 + 125,000)
The basis for the warehouse will be
=75,000/175,000 x 125,000
=0.428571 x 125,000
=$53,571
The basis for land
=100,000/175,000 x 125,000
=0.571428 x 125,000
=$71, 429
Bob's basis in the warehouse is approximately $53,750 and his basis in the land is approximately $71,250. This was calculated based on their respective proportions of the combined fair market values at the time of purchase.
Explanation:The basis of an asset is its original cost plus any additional costs related to its acquisition. In this case, Bob bought the warehouse and the land for a combined price of $125,000, which was less than their fair market values. Bob's basis in the warehouse and land will be allocated proportionately based on their fair market values at the time of purchase.
To calculate this, first, we add the appraised values of the warehouse and land ($75,000 + $100,000 = $175,000). Then, we calculate the proportionate value of each piece of property by dividing its appraised value by the combined appraised value. For the warehouse, it'd be $75,000/$175,000, which is approximately 0.43. For the land, it's $100,000/$175,000, which is approximately 0.57.
Applying these proportionate values to the purchase price and rounding off to the nearest dollar, we find that: Bob's basis in the warehouse is 0.43 x $125,000 = $53,750 and Bob's basis in the land is 0.57 x $125,000 = $71,250.
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A company would like to produce 1000 products per week for 30 weeks. The Direct Material Cost for the raw materials used in the product is $1.50 per product. After producing 100 products, the company must stop production to replace a filter on the machine (the filter is replaced after producing every 100 products). The filter costs $50.00. What is the Total Cost Per Product
The total cost per product is $2.0 per product.
Calculation of the total cost per product:Since the cost for raw material is $1.50
The filter cost is $50
So, the filter cost for one product should be = $50/100 = $0.5
Now the total cost per product is
= $1.50 + $0.50
= $2.0
hence, The total cost per product is $2.0 per product.
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The total cost per product, considering both the direct material cost and the filter replacement cost, is calculated to be $2.00.
To find the Total Cost Per Product, we need to consider both the Direct Material Cost and the cost of replacing the filter.
Step-by-Step Calculation:
Calculate the total number of products to be produced:
1000 products/week * 30 weeks = 30000 products
Determine the total cost for Direct Materials:
$1.50/product * 30000 products = $45000
Calculate the number of filter replacements needed:
30000 products / 100 products per filter = 300 filter replacements
Determine the total cost for filters:
$50/filter * 300 filters = $15000
Calculate the total production cost:
$45000 (materials) + $15000 (filters) = $60000
Calculate the total cost per product:
$60000 total production cost / 30000 products = $2.00 per product
Hence, the total cost per product is $2.00.
Suppose a competitive firm has cost, C = (0.002q3) + (22q) + 750, marginal cost, MC = 0.006q2 + 22, and revenue, R = 80q. If the firm produces 150 units of output, A. R < C. B. MR < MC. C. marginal profit > 0. D. MR > MC. At this output level (150 units),
A. profit is negative.
B. marginal profit is negative.
C. profit is positive.
D. None of the above.
Answer:
Options B and C are correct.
Marginal profit is negative. Profit is positive.Explanation:
At q = 150
R = 80q = 80(150) = 12,000
C = 0.002(150)3 + 22(150) + 750 = 6750 + 3300 + 750 = 10,800
R > C so first is incorrect.
MR = 80
MC = 0.006(150 x 150) + 22 = 135 + 22 = 157
MC > MR so B is correct.
Profit = TR - TC = 80(150) - 0.002(150)3 - 22(150) - 750 = 12000 - 10800 = 1200
Profit is positive.
Marginal profit = MR - MC = 80 - 157 = - 77
MR is Negative
In the case when the firm should be produce 150 units of output so here Options B and C are correct.
Calculation of the impact on the profit:Since At q = 150
R = 80q = 80(150) = 12,000
So,
C = 0.002(150)3 + 22(150) + 750
= 6750 + 3300 + 750
= 10,800
Here Revenue > Cost so first is incorrect.
Now
MR = 80
MC = 0.006(150 x 150) + 22 = 135 + 22 = 157
MC > MR so B is correct.
Now
Profit = TR - TC
= 80(150) - 0.002(150)3 - 22(150) - 750
= 12000 - 10800
= 1200
Profit is positive.
And,
Marginal profit
= MR - MC
= 80 - 157
= - 77
So, MR is Negative.
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Assume the following for a piece of equipment assuming straight-line depreciation: Purchase price $20,000; installation costs of $2,500; 4-Yr useful life with an estimated salvage value of $4,500; tax rate 40%; What would be the cash flow from salvage if the asset sold after 2 years for (a) $15,500 and (b) $7,000?
Answer:
a. $14,700
b. $9,600
Explanation:
Total cost of the equipment = Purchase price + installation costs = $20,000 + $2,500 = $22,500
Salvage value = $4,500
Amount to be depreciated = $22,500 - $4,500 = $18,000
Depreciation rate = 1 ÷ 4 = 0.25, or 25%
Annual depreciation = $18,000 × 25% = $4,500
Equipment book value after 2 years = $22,500 - ($4,500 × 2) = $13,500
(a) What would be the cash flow from salvage if the asset sold after 2 years for $15,500
Gross profit on equipment disposal = Sales amount - Equipment book value = $15,500 - $13,500 = $2,000
Tax = $2,000 × 40% = $800
Net profit on equipment disposal = $2,000 - $800 = $1,200
Cash flow = Equipment book value + Net profit on equipment disposal = $13,500 + $1,200 = $14,700
(b) What would be the cash flow from salvage if the asset sold after 2 years for $7,000
Loss on equipment disposal = Sales amount - Equipment book value = $7,000 - $13,500 = $6,500
Tax shield difference = $6,500 × 40% = $2,600
Cash flow = $7,000 + $2,600 = $9,600
Veltri Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.77 direct labor-hours. The direct labor rate is $11.20 per direct labor-hour. The production budget calls for producing 7,100 units in October and 6,900 units in November. The company guarantees its direct labor workers a 40-hour paid work week. With the number of workers currently employed that means that the company is committed to paying its direct labor work force for at least 5,480 hours in total each month even if there is not enough work to keep them busy. What would be the total combined direct labor cost for the two months
Answer:
Total direct labor cost= $122,752
Explanation:
Giving the following information:
Each unit of output requires 0.77 direct labor-hours.
The direct labor rate is $11.20 per direct labor-hour.
Production budget:
October= 7,100 units
November= 6,900 units
Minimum hours= 5,480 hours
First, we need to determine the number of hours required for each month.
October= 7,100*0.77= 5,467 hours
November= 6,900*0.77= 5,313 hours
Direct labor budget:
October= 5,480*11.2= 61,376
November= 61,736
Total cost= $122,752
A company manufactures various-sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $75 per unit (100 bottles), including fixed costs of $28 per unit. A proposal is offered to purchase small bottles from an outside source for $40 per unit, plus $4 per unit for freight. a. Prepare a differential analysis dated July 31 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles, assuming fixed costs are unaffected by the decision. If an amount is zero, enter "0". Use a minus sign to indicate a loss.
Answer and Explanation:
The preparation of differential analysis is shown below:-
Differential Analysis
Make Bottles (Alt 1) or Buy Bottles (Alt 2)
31-July
Particulars Make Bottles Buy Bottles Differential effect on income
(Alt 1) (Alt 2) (Alt 2)
Sales price $0.00 $0.00 $0.00
Unit Costs:
Purchase price $0.00 $40.00 $40.00
Freight $0.00 $4.00 $4.00
Variable costs $47.00 $0.00 -$47.00
($75 per unit -$28 per unit)
Fixed factory overhead $28.00 $28.00 $0.00
Income (Loss) -$75.00 -$72.00 $3.00
Blossom Company deducts insurance expense of $171000 for tax purposes in 2021, but the expense is not yet recognized for accounting purposes. In 2022, 2023, and 2024, no insurance expense will be deducted for tax purposes, but $57000 of insurance expense will be reported for accounting purposes in each of these years. Blossom Company has a tax rate of 20% and income taxes payable of $154000 at the end of 2021. There were no deferred taxes at the beginning of 2021. What is the amount of the deferred tax liability at the end of 2021?
Answer:
The deferred tax liability = $65,000 - $30,800 = $34,200
Explanation:
Blossom company
Accounting principles of Accruals demands that expenses and income should be recognized in the year they occur.
If Blossom company expect these expenses to occur between 2022 and 2024, it means at 2021 it's not to be recognized. Thus, it's wrong to have deducted it from the income of that year.
In 2021 the company would have posted an income tac liability of 20% x $154,000 = $30,800
However from a tax stand point the $171,000 isn't acceptable. This it will be disallowed
The adjusted income will therefore become $154,000 + $171,000 = $325,000
And the correct tax liability = 20% x $325,000 = $65,000.
The deferred tax liability = $65,000 - $30,800 = $34,200
Which of the following statements is true?
a) The market demand for labor is the horizontal "addition" of the firms' demand curves for labor.
b) The elasticity of demand for labor is the percentage change in quantity demanded of labor divided by the percentage change in the wage rate.
c) The factor demand curve will shift to the right if the price rises for the good the factor goes to produce.
d) The factor supply curve in an industry will shift to the left as wage rates in that industry rise.
Answer:
The correct answer is d) The factor supply curve in an industry will shift to the left as wage rates in that industry rise.
Explanation:
The demand for factors is based in the demand for the goods and services that are produced using these factors and if the demand for the source good decreases, the demand for the production factor will also decrease.
In this case, when the market wages increase, the ability of suppliers to use labor goes down and as a result the demand curve will shift left.
Robert has a passion for making ice cream. Assume that ice cream parlors have a market structure of monopolistic competition. Between the local Amy's, Cold Stone Creamery, Marble Slab, Ben & Jerry's, and Baskin Robbins, he has an uphill battle to break into the local ice cream market.
How might Robert differentiate his ice cream shop, JubJub's, so that he can garner some market power?
In order to differentiate his ice cream Scoop, Robert has to do the following:
He has to put his ice-cream a t a price that would be appealing to the crowd.He has to open his business close to a place that has available market.He has to create a product that is different from what his competitors are doing.A monopolistically competitive market can be described as a market that is characterized with many people selling homogenous but yet differentiated goods.
In other to have differentiated goods, a business would try to offer better services than competitors, be innovative, have a strategic location, have quality products.
If Robert does this, he would be able to garner some market power.
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The following selected accounts appear in the adjusted trial balance for Deane Company. Indicate the financial statement on which each account would be reported. Account a. Accumulated Depreciation. select the financial statement b. Depreciation Expense. select the financial statement c. Retained Earnings (beginning). select the financial statement d. Dividends. select the financial statement e. Service Revenue. select the financial statement f. Supplies. select the financial statement g. Accounts Payable. select the financial statement
Answer: Please refer to Explanation
Explanation:
The following are the financial statements that the above Accounts appear in,
a. Accumulated Depreciation. BALANCE SHEET.
It shows the Net Book Value of a Fixed Asset.
b. Depreciation Expense. INCOME STATEMENT.
Showing the depreciation expense for the year to enable it to be deducted from income.
c. Retained Earnings (beginning). STATEMENT OF RETAINED EARNINGS.
To record the amount of earnings that the company retained.
d. Dividends. STATEMENT OF RETAINED EARNINGS.
Dividends are paid from Retained Earnings so have to be accounted for in this account.
e. Service Revenue. INCOME STATEMENT.
To add this revenue to the company's income.
f. Supplies. BALANCE SHEET.
Listed after Inventory to account for the cost of holding the supplies for a period.
g. Accounts Payable. BALANCE SHEET.
Recorded as a Current Liability to show that the company owes the amount but only in the short term.
If you need any more clarification, do react or comment. Cheers.
Different accounts are reported on different parts of a financial statement. Accumulated Depreciation and Supplies are reported on the Balance Sheet, Depreciation Expense and Service Revenue on the Income Statement, while Retained Earnings (beginning) and Dividends are reported on the Statement of Retained Earnings. Accounts Payable is also reported on the Balance Sheet.
Explanation:All these accounts would be reported in different component of the financial statement. They are stated thus:
Accumulated Depreciation: This would appear on the Balance Sheet as a contra asset account.Depreciation Expense: This is reported on the Income Statement, under Operating Expenses.Retained Earnings (beginning): This appears on the Statement of Retained Earnings.Dividends: These are reported in the Statement of Retained Earnings. It reduces the retained earnings for the period.Service Revenue: This appears on the Income Statement, under revenues.Supplies: This is reported on the Balance Sheet, under current assets.Accounts Payable: This is also reported on the Balance sheet, under current liabilities.Learn more about Financial Statement here:https://brainly.com/question/32573447
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ccording to your authors, entrepreneurial innovation is similar to "arbitrage" because both activities ultimately involve Select one: a. obtaining inputs at relatively high prices and selling the output at lower prices. b. obtaining inputs at relatively low prices and selling the output at higher prices. c. the absence of uncertainty. d. greed.
Answer:
B. obtaining inputs at lower prices and selling the output at higher prices.
Explanation:
Arbitrage refers to the activity of trying to earn a gain, by exploiting the inefficiencies between two markets. The rule of arbitrage is to buy at a low price from one market and sell at a higher price in another market.
When interest rate parity theory exists and fair pricing prevails, arbitrage opportunities are wiped out.
Entrepreneurial innovation refers to innovation with respect to products and their attributes. It may also refer to entrepreneur attaining new skill sets and creativity which help in better operations.
Such innovation is also characterized by buying inputs at a lower price and selling the output at a higher price thereby maximizing profits. Buying inputs at a low price indicates innovation in the form of optimal utilization of resources.
Thus, both arbitrage and entrepreneurial innovation are driven by the common factor of buying low and selling high, to maximize gains.
A firm produces 300 units of output at a total cost of $1,000. If fixed costs are $100, Select one: a. average total cost is $5. b. average fixed cost is $10. c. average total cost is $4. d. average variable cost is $3
Answer:
d. average variable cost is $3
Explanation:
Average Total Costs = Average Fixed Costs + Average Variable Costs
Average Total Costs= Total Fixed Variable Costs/ No of units
= 100/300 + 900/300= 1000/300= $ 3.33 ( not given)
a. average total cost is $5 ≠ $ 3.33
b. average fixed cost is $10≠$ 0.33
c. average total cost is $4 ≠$ 3.33
d. average variable cost is $3 =$ 3
Average Variable Costs= Total Variable Costs/ Total Units= 900/300= $ 3
Average Fixed Costs= Total Fixed Costs/ Total Units= 100/300= $ 0.33 not also given
Answer: The average variable cost is $3.(D)
Explanation:
A fixed cost is a cost that does not change or varies with production process. Fixed costs are always constant in production. Variable costs are costs that changes with the production process. Variable costs varies and are not constant.
From the information given in the question, the firm produces 300 units of output, has a total cost of $1000 and a fixed cost of $100. A total cost is made up of the fixed and variable cost.
Total cost= Fixed cost+Variable cost
Since total cost is $1000 and fixed cost is $100, variable cost will be $1000 - $100 = $900
Since the firm produces 300 units and variable cost is $900, average variable cost will be: $900/300 =$3
The average variable cost is $3