Answer:
The remaining useful life of the plant asset is 4 years.
Explanation:
Under the straight line method of depreciation, the depreciation expense charged every year on the asset remains constant. The formula for depreciation expense per year under straight line method is,
Depreciation expense = (Cost - salvage value) / estimated useful life
Using the available figures, we calculate the estimated useful life of the plant asset o be,
5000 = (50000 - 10000) / estimated useful life
Estimated useful life = 40000 / 5000
Estimated useful life is = 8 years
The accumulated depreciation tells the total depreciation that has been charged on the asset.
The numbers of years for which depreciation has already been charged are = 20000 / 5000 = 4 years
The remaining useful life of the plant asset = 8 - 4 = 4 years
Bia garden store makes two types of gazebo. Making a wooden gazebo requires 4 hours of labor while making a metal gazebo requires 10 hours of labor. During the most recent accounting period the company made 2,000 wooden gazebos and 500 metal gazebos. Indirect manufacturing costs amounted to $52,000 and are allocated based on labor hours. Based on this information: OA. $4 of overhead cost should be allocated to each gazebo regardless of the type. OB. $20.80 of overhead cost should be allocated to each gazebo regardless of the type. O C.$16 of overhead cost should be assigned to each wooden gazebo and $40 of overhead cost should be assigned to each metal gazebo. None of the answers are correct.
Answer:
C.$16 of overhead cost should be assigned to each wooden gazebo and
$40 of overhead cost should be assigned to each metal gazebo
Explanation:
2,000 wooden x 4 hours = 8,000 labor hours
500 metal x 10 = 5,000 labor hours
total hours 13,000
single manufacturing overhead: 52,000 / 13,000 = $4 per labor hours
wooden gazebos: 4hours x $4 = $ 16
metal gazebos: 10 hours x $4 = $40
Rick Alexander is a master builder who spent three decades running a successful home-restoration business in Connecticut. When his elderly parents fell ill in 2008, he gave up his business and moved to Florida to look after them. He thought it would be easy to find work-after all, he had a certified trade and more than 30 years' experience. He looked first for jobs as a supervisor at construction sites, but didn't find anything Lowering his sights, he next looked for work at wholesalers and lumberyards, and then he applied for any job at hardware stores. Still he experienced a constant stream of rejections. He tried to start his own business, but couldn't generate enough sales to make it profitable. Tired and frustrated, Rick Alexander gave up looking for work For each of the following situations, is Rick Alexander counted as employed, unemployed, or not in the labor force by the Bureau of Labor Statistics? a. Alexander is self-employed in his old job as a carpenter According to the Bureau of Labor Statistics. he is counted as Kiatosend b. Alexander moves to Florida and begins looking for work According to the Bureau of Labor Statistics, he is counted asick to seleciv According to the Bureau of Labor Statistics, he is counted as CTOsee According to the Bureau of Labor Statistics, he is counted as ec o According to the Bureau of Labor Statistics, he is counted as c. Alexander feels discouraged looking for work and stops anplying for jobs d Alexander starts looking for work again e. Alexander starts work at a new job (e employed unemployed not in the labor force
Answer:
a. Employed
(As he have a job)
b. Unemployed
(As he doesn't have a job but is looking for one)
c. not in labor force
(He neither have a job nor is looking for a job, so he is not a part of labor force)
d. Unemployed
(As he is looking fir a job)
e. Employed
(As he is working)
"When ClubCorp had an attrition problem, they hired a market research company to get to the bottom of things. What two things did they discover were most important to members if they were to remain members?"
Things did they discover were most important to members if they were to remain members are Cost of Membership and Benefits Of being Member.
What is Membership ?The condition or standing of membership; the group of people who make up a sizable organization. Mathematics: the relationship between a set's or class's element and the set or class as a whole.
A membership model is a sort of business strategy in which customers pay a regular charge to use the value a company produces. It offers the layout for various membership tiers, revenue streams, marketing initiatives, events and conferences, and financial arrangements.
The advantages, services, and access that members get as part of their membership are known as member benefits. To put it another way, these are the benefits that members receive in return for joining the organization and, if necessary, paying membership dues.
Here are some common characteristics. Effective communication is a successful membership organization's key component. Focus on the information that members want and need frequently, and then give it to them – a process made easier by modern technology.
Learn more about Membership here
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# SPJ 2
Family Furniture Corporation incurred the following costs. Identify the costs as variable, fixed, or mixed. 1. Wood used in the production of furniture. 2. Fuel used in delivery trucks. 3. Straight-line depreciation on factory building. 4. Screws used in the production of furniture. 5. Sales staff salaries. 6. Sales commissions. 7. Property taxes. 8. Insurance on buildings. 9. Hourly wages of furniture craftsmen. 10. Salaries of factory supervisors. 11. Utilities expense. 12. Telephone bill.
Answer: Please refer to Explanation
Explanation:
1. Wood used in the production of furniture. VARIABLE COST
2. Fuel used in delivery trucks. VARIABLE COST
3. Straight-line depreciation on factory building. FIXED COST
4. Screws used in the production of furniture. VARIABLE COST
5. Sales staff salaries. FIXED COST
6. Sales commissions. VARIABLE COST
7. Property taxes. FIXED COST
8. Insurance on buildings. FIXED COST
9. Hourly wages of furniture craftsmen. VARIABLE COST
10. Salaries of factory supervisors. FIXED COST
11. Utilities expense. MIXED COST
12. Telephone bill. MIXED COST
Earned $16,200 of cash revenue. Borrowed $12,000 cash from the bank. Adjusted the accounting records to recognize accrued interest expense on the bank note. The note, issued on September 1, 2018, had a one-year term and an 8 percent annual interest rate.
Required
A.What is the amount of interest expense to record for 2018?
B.What amount of cash was paid for interest in 2018?
C.Use a horizontal statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. Indicate whether the event increases (I), decreases (D), or does not affect (NA) each element of the financial statements. In the Cash Flows column, designate the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). The first transaction has been recorded as an example.
Answer:
A. The amount of interest expense to record for 2018 is $320, calculated as follows: $12,000 x 8% x 4/12 = $320.
B. No amount of cash was paid for interest in 2018; i.e. = $0.00
C. Effect of each transaction on balance sheet, income statement, and statement of cash flows:
1. Cash Revenue of $16,200
Balance Sheet - Cash and Retained Earnings are increased by $16,200.
Income Statement - Revenue is increased by $16,200.
Statement of Cash Flows: Cash inflows are increased by $16,200. It is an operating activity (OA)
2. Bank Note Payable of $12,000 with accrued interest of $320 for 2018:
Balance Sheet - Cash and Notes Payable are increased with $12,000; Interest on Notes Payable is increased by $320 and Retained Earnings decreased by $320.
Income Statement: Net Income is decreased by $320.
Statement of Cash Flows: Cash inflows are increased by $12,000. It is a financing activity (FA).
Explanation:
1. Cash revenue increases net income and Cash Account balance, and reflects positively on the cash flows for operating activities.
2. Notes Payable increases Cash Account balance (an asset) and Notes Payable (a liability). It also increases the cash inflow for financing activities.
3. Accrued Interest on Notes Payable increases liability and decreases the net income, which reflects negatively on the Retained Earnings (Equity). It does not affect the statement of cash flows as no disposal had been made yet.
The demand for cars in Home is q = 30 – P and the supply of cars in Home is q = P. The demand for cars in Foreign is q = 20 – P and the supply of cars in Foreign is q = P.a) Calculate the equilibrium price and quantity in each country under isolation.b) Who is the importer of cars and who is the exporter?c) Write the import demand for Home and the export supply for Foreign.
Answer:
Equilibrium price and Quantity are the price at which Demand and Supply equal each
1. Local
If quantity demanded = 30 - p
And quantity supplied = p
And we know equilibrium is achieved when both are equal.
Therefore 30 - p = p is equilibrium
2p = 30
P = 15
Equilibrium Quantity demanded & supplied = 30 - 15 = 15.
2. Foreign
If quantity demanded = 20 - p
And quantity supplied = p
And we know equilibrium is achieved when both are equal.
Therefore 20 - p = p is equilibrium
2p = 20
P = 10
Equilibrium Quantity demanded & supplied = 20 - 10 = 10
3. The importer of cars is the demand for foreign = 20 - P
4. The exporter of cars is the supply of foreign cars = P.
Dakota Inc. and Jersey & Company are two large companies that manufacture and sell equipment used in the construction, mining, agricultural, and forestry industries. The companies reported the following data (in millions) for two recent years:
Dakota Jersey
Year 2 Year 1 Year 2 Year 1
Net income $2,182 $3,715 $1,925 $3,187
Average number of common shares outstanding 594 599 334 363
Required:
a. Determine the earnings per share in Year 2 and Year 1 for each company. Round your answers to two decimal places.
Answer and Explanation:
The computation of the earning per share is shown below:
As we know that
Earning per share = Net income ÷ Average number of common shares outstanding
For year 1
Dakota
= $3,715 ÷ 599 shares
= $5.30 per share
Jersey
= $3,187 ÷ 363 shares
= $8.78 per share
For year 2
Dakota
= $2,182 ÷ 594 shares
= $3.67 per share
Jersey
= $1,925 ÷ 334 shares
= $5.76 per share
Classifying events as asset source, use, or exchange Vera Company experienced the following events during its first year of operations.
1. Acquired $16,000 cash from the issue of common stock.
2. Paid $3,500 cash for salary expenses.
3. Borrowed $10,000 cash from New South Bank.
4. Paid $6,000 cash to purchase land.
5. Provided boarding services for $10,500 cash.
6. Acquired an additional $1,000 cash from the issue of common stock.
7. Paid $2,400 cash for utilities expense.
8. Paid a $1,500 cash dividend to the stockholders.
9. Provided additional services for $6,000 cash.
10. Purchased additional land for $2,500 cash.
11. The market value of the land was determined to be $24,000 at the end of the accounting period.
Required
Classify each event as an asset source, use, or exchange transaction.
Answer:
Vera Company
1. Acquired $16,000 cash from the issue of common stock. [ Exchange; Cash balance increases while Owners Equity also increases. The net effect is zero ]
2. Paid $3,500 cash for salary expenses [ Asset Use; because we deplete Cash as an asset to pay for an expense item]
3. Borrowed $10,000 cash from New South Bank. [ Exchange. We got cash (an asset) but created a liability through bank loan, net effect is zero]
4. Paid $6,000 cash to purchase land. [ Exchange; depleted Cash (an Asset) to obtain another Asset (Land) net effect is zero]
5. Provided boarding services for $10,500 cash. [ Asset Source; income is driving up our cash balance (an Asset)]
6. Acquired an additional $1,000 cash from the issue of common stock. [ Exchange; Cash balance increases while Owners Equity also increases. The net effect is zero ]
7. Paid $2,400 cash for utilities expense. [ Asset Use; because we deplete Cash as an asset to pay for an expense item]
8. Paid a $1,500 cash dividend to the stockholders. [ Asset Use; because we deplete Cash as an asset to pay for dividend to shareholders]
9. Provided additional services for $6,000 cash. [ Asset Source; income is driving up our cash balance (an Asset)]
10. Purchased additional land for $2,500 cash. [ Exchange; depleted Cash (an Asset) to obtain another Asset (Land) net effect is zero]
11. The market value of the land was determined to be $24,000 at the end of the accounting period. :[ Asset Source; improvement in fair valuation of Asset]
On January 1, Year 2 Grande Company had a $15,000 balance in the Accounts Receivable account and a zero balance in the Allowance for Doubtful Accounts account. During Year 2, Grande provided $66,000 of service on account. The company collected $62,500 cash from accounts receivable. Uncollectible accounts are estimated to be 2% of sales on account. What is the amount of cash flow from operating activities that would appear on the Year 2 statement of cash flows? Multiple Choice $62,500 $61,250 $66,000 $51,300
Answer:
$62,500
Explanation:
As we know that cash flow statement records the cash inflow and cash outflow and ignored all other transactions which are not made in cash
Since in the question it is given that $62,500 is cash collected from account receivable and the same is to be shown in the operating activities in a positive sign that indicates an inflow of cash
Suppose that JPMorgan Chase sells call options on $1.35 million worth of a stock portfolio with beta = 1.70. The option delta is 0.70. It wishes to hedge its resultant exposure to a market advance by buying a market-index portfolio. Suppose it use market index puts to hedge its exposure. The index at current prices represents $1,000 worth of stock. a. How many dollars’ worth of the market-index portfolio should it purchase to hedge its position?
Answer:
Particulars Amount Explanation
Call options 1350000
Beta of stock 1.7
Delta 0.7
Market change 1% Implied stock change is 1.7
Stock changes by 1.7 1.19 Implied exposure on call
options on stock ( ie 1.7*0.7)
Amount of exposure 1606500 Derived by multiplying
1.19*1,350,000
Hence market index portfolio worth $1,606,500 should be bought , however the market index portfolio trade in multiples of 1000 hence $1,607,000 worth should be obtained to hedge the exposure
Explanation:
Calculate the value of a bond that matures in 12 years and has a $ 1 comma 000 par value. The annual coupon interest rate is 13 percent and the market's required yield to maturity on a comparable-risk bond is 11 percent.
Answer:
Price of bond=$ 1,129.847
Explanation:
The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV).
Value of Bond = PV of interest + PV of RV
Step 1
PV of interest payments
annul interest payment
= 13% × 1000 = 130
PV = A × ( (1- (1+r)^(-n))/r
Annual yield - r= 11% per annum
Total period to maturity- n = 12 years
PV of interest
=130× (1- 1.11^(-12) )/0.11
= 844.00
Step 2
PV of Redemption Value
= 1,000 × (1.11)^(-12)
= 285.84
Step 3
Total PV = 844.00 + 285.84 = 1129.847123
Price of bond=$ 1,129.8471
The January 28, 2017 (fiscal year 2016) financial statements of Caleres, Inc. reported the following information (in thousands): 2016 2015 Cost of sales $1,517,397 $1,529,527 Inventories, net 585,764 546,745 LIFO reserve 4,345 4,094 The 2016 average days inventory outstanding is:
Answer:
136.20 days
Explanation:
Given that,
Opening inventory = 546,745
Closing inventory = 585,764
Cost of goods sold in 2016 = $1,517,397
Average inventory:
= (Opening inventory + Closing inventory) ÷ 2
= (546,745 + 585,764) ÷ 2
= 1,132,509 ÷ 2
= 566,254.5
Therefore, the average days inventory outstanding is calculated by the following formula:
= Average inventory ÷ (COGS/365 days)
= 566,254.5 ÷ ($1,517,397/365)
= 566,254.5 ÷ 4,157.3
= 136.20 days
Dexter Metals, paid its first annual dividend yesterday in the amount of $0.18 a share. The company plans to double each annual dividend payment for the next 3 years. After that time, it plans to pay $1.25 a share for 2 years than then pay a constant dividend of $1.60 per share indefinitely. What is one share of this stock worth today if the market rate of return on similar securities is 10.24 percent
Answer:
The price per share of this stock is $13.20
Explanation:
Using the dividend discount model, we can calculate the price per share today of this stock. The DDM values a stock based on the present value of the expected future dividends of the stock discounted using the required rate of return on the stock. The price o=per share today for this stock is,
P0 = 0.18 * (1+1) / (1+0.1024) + 0.18 * (1+1)^2 / (1+0.1024)^2 +
0.18 * (1+1)^3 / (1+0.1024)^3 + 1.25 / (1+0.1024)^4 + 1.25 / (1+0.1024)^5 +
(1.60 / 0.1024) / (1+0.1024)^5
P0 = $13.20
Perry Corporation produces and sells a single product. Data for that product are:
Sales price per unit $250
Variable cost per unit $180
Fixed expenses for the month $600,000
Currently selling 12,000 units
Upper management is considering using a biodegradable packaging which costs $5 more per unit but it produces less waste in the long run. Management plans to increase advertising by $10,000 per month to advertise this new feature to their packaging. They believe that environmentally friendly people will switch to their product resulting in an increase in sales of 2,000 units per month.
How many units would the company have to sell to maintain current operating income if these changes are implemented? Round up to the nearest whole unit.
Answer:
13,077 units
Explanation:
Hint : Work from bottom to top
Current Operating Income = Sales - Expenses
= (12,000×$250) - ($180×12,000+$600,000)
= $3,000,000 - $2,760,000
= $240,000
Income Statement - New
Sales ( $250× 13077) $3,269,250
Less Variable Costs :
Current ( $180 × 13077) ($2,353,860)
Biodegradable packaging($5 × 13077) ($65,385)
Contribution $850,000
Less Fixed Costs :
Current ($600,000)
Advertising ($10,000)
Target Operating Income $240,000
Contribution per unit = 250-180-5
= $65
Number of Units = $850,000/ $65
= 13077
Final answer:
To maintain current operating income with the changes in packaging and advertising, Perry Corporation would need to sell approximately 11,385 units, when the anticipated increase in sales is included.
Explanation:
To calculate the number of units Perry Corporation needs to sell to maintain current operating income after the changes, we need to consider the increase in the variable cost per unit due to the new packaging and the increased advertising expenses. The current contribution margin per unit is the sales price per unit minus the variable cost per unit, which is $250 - $180 = $70. With the new packaging, the variable cost will be $180 + $5 = $185 per unit, reducing the contribution margin to $250 - $185 = $65 per unit.
The total fixed costs will be the original amount plus the additional advertising cost, $600,000 + $10,000 = $610,000. We can use the following formula to determine the new break-even point in units:
Break-even point in units = Total Fixed Costs / Contribution Margin per Unit
Plugging in the values:
Break-even point in units = $610,000 / $65 ≈ 9385 units (rounded up)
Since the company expects to increase sales by 2,000 units due to the environmentally friendly packaging, we need to add these to the break-even number:
New required sales to maintain income = 9385 + 2000 = 11,385 units (rounded up)
When valuing raw materials inventory at lower-of-cost-or-market, what is the meaning of the term "market"? Discounted present value. Net realizable value. Net realizable value less a normal profit margin. Replacement cost, Net realizable value, or Net realizable value less a normal profit margin.
Answer:
Replacement Cost
Explanation:
Replacement cost can be described as to the amount of money a business must currently spend to replace an essential asset like a real estate property, an investment security, a lien, or another item, with one of the same or higher value.
In other words, replacement cost definition is the current market price a company would have to pay to replace an existing asset.
Lambert Company acquired machinery costing $110,000 on January 2, 2016. At that time, Lambert estimated that the useful life of the equipment was 6 years and that the residual value would be $15,000 at the end of its useful life. Compute depreciation expense for this asset for 2016, 2017, and 2018 using the a. Straight-line method b. Double-declining balance method C. Assume that on January 2, 2018, Lambert revised its estimate of the useful life to 7 years and changed its estimate of the residual value to $ 10,000. What effect would this have on depreciation expense in 2018 for each of the above depreciation methods?
Answer:
Depreciation expense for 2016 2017 2018
Method: Straight-line $15,833 $15,833 $15,833
Double-declining $36,663 $24,443 $16,296
The revision of the estimates at the beginning of 2018 would lead to lower yearly depreciation expense.
Explanation:
(a) Under straight-line method, depreciation expense is (cost - residual value) / No of years = ($110,000 - $15,000) / 6 years = $15,833 yearly depreciation expense. This depreciation expense of $15,833 applies to Years 2016, 2017 and 2018. Accumulated depreciation for those years is $15,833 x 3 years $47,499.
(b) The double-declining method is otherwise known as the reducing balance method and is given by the formula below:
Double declining method = 2 X SLDP X BV
SLDP = straight-line depreciation percentage
BV = Book value
SLDP is 100%/6 years = 16.67%, then 16.67% multiplied by 2 to give 33.33%
At Year 2016, 33.33% X $110,000 = $36,663
At Year 2017, 33.33% X $73,337 ($110,000 - $36,663) = $24,443
At Year 2018, 33.33% X $48,894 ($73,337 - $24,443) = $16,296
Accumulated depreciation expense for Years 2016 to 2018, under this method, is $77,402 (addition of all the yearly depreciation).
(c) If after 2 years, the revised estimated useful life becomes 7 years and the residual value is $10,000, depreciation would be calculated as follows:
Under the straight-line method, NBV (net book value) at the end of 2017 is: $110,000 - $15,833 x 2 years = $78,334
Depreciation expense is: ($78,334 - $10,000) / 7 years = $9,762 (decrease in 2018 yearly depreciation charge)
Under the double-declining method, SLDP is 100%/7 years = 14.29%, then multiplied by 2 to give 28.57%.
At Year 2018, 28.57% X $48,894 ($73,337 - $24,443) = $13,969 (decrease in 2018 yearly depreciation charge)
Final answer:
Depreciation expense for Lambert's machinery is calculated using straight-line and double-declining balance methods. In 2018, a revision of estimates affects the straight-line method, resulting in a new rate, while the double-declining method remains based on the original estimation unless materially impacted.
Explanation:
Lambert Company must calculate the depreciation expense for machinery acquired in 2016 using various methods, and understand the impact of revised estimates in 2018.
a. Straight-Line Depreciation Method:
Original cost: $110,000
Residual value: $15,000
Useful life: 6 years
Depreciation expense [(Original cost - Residual value) / Useful life]:
[(110,000 - 15,000) / 6] = $95,000 / 6 = $15,833.33 per year for 2016 and 2017.
b. Double-Declining Balance Method:
2016: 2 x (1/6) x $110,000 = $36,666.672017: 2 x (1/6) x ($110,000 - $36,666.67) = $24,444.44In 2018, with the revised estimate of 7 years total useful life and a residual value of $10,000, the straight-line depreciation would be recalculated over the remaining 5 years as follows:
(Original cost - Accumulated depreciation - New residual value) / New remaining useful life: ($110,000 - $31,666.67 - $10,000) / 5 = $68,333.33 / 5 = $13,666.67 for 2018.
c. The double-declining balance method would not change for 2018 as it is typically recalculated each year based on the book value at the start of the year and the original useful life of the asset, unless there is a significant adjustment due to impairment or change in estimated useful life.
Gundy Corporation produces area rugs. The following per unit cost information is available: direct materials $19, direct labor $7, variable manufacturing overhead $2, fixed manufacturing overhead $4, variable selling and administrative expenses $5, and fixed selling and administrative expenses $7. Using a 30% markup on total per unit cost, compute the target selling price.
Answer:
$57.20
Explanation:
Total unit cost = $19 + $7 + $2 + $4 + $5 + $7 = $44
Target selling price = Total unit cost × (1 + Markup)
Since markup percentage is 30%, or 0.3, we therefore have:
Target selling price = $44 × (1 + 0.3) = $57.20
Therefore, the target selling price is $57.20.
The target selling price for Gundy Corporation's area rugs, using a 30% markup on the total per unit cost of $44, is calculated to be $57.20.
To compute the target selling price for Gundy Corporation's area rugs, we first need to calculate the total per unit cost by adding all the given costs (direct materials, direct labor, variable manufacturing overhead, fixed manufacturing overhead, variable selling and administrative expenses, and fixed selling and administrative expenses). Then we apply a 30% markup on the total per unit cost to find the target selling price.
Direct materials: $19Direct labor: $7Variable manufacturing overhead: $2Fixed manufacturing overhead: $4Variable selling and administrative expenses: $5Fixed selling and administrative expenses: $7The total per unit cost is calculated as $19 + $7 + $2 + $4 + $5 + $7 = $44. The target selling price with a 30% markup is then calculated as $44 * 1.30 = $57.20.
Thus, the target selling price per unit for Gundy Corporation's area rugs is $57.20.
Keck Co. had 300 units of product A on hand at January 1, 2017, costing $21 each. Purchases of product A during January were as follows:Date Units Unit CostJan. 10 400 $2218 500 2328 200 24A physical count on January 31, 2017 shows 400 units of product A on hand. The cost of the inventory at January 31, 2017 under the LIFO method isa. $9,400.b. $8,900.c. $8,500.d. $8,200.
Answer:
c. $8,500
Explanation:
The computation of the ending inventory using the LIFO method is shown below:
Since it is given that 400 units of product A are on hand which reflects the ending inventory units
So
= 300 units × $21 + 100 units × $22
= $6,300 + $2,200
= $8,500
The 100 units depicts the remaining units i.e
= 400 units - 300 units
= 100 units
First we take the Jan 1 units than the remaining units would take from Jan 10
M. Cotteleer Electronics supplies microcomputer circuitry to a company that incorporates microprocessors into refrigerators and other home appliances. One of the components has an annual demand of 265 units, and this is constant throughout the year. Carrying cost is estimated to be $1.25 per unit per year, and the ordering cost is $19 per order.
a) To minimize cost, how many units should be ordered each time an order is placed?
b) How many orders per year are needed with the optimal policy?
c) What is the average inventory if costs are minimized?
d) Suppose that the ordering cost is not $19, and Cotteleer has been ordering 125 units each time an order is placed. For this order policy (of Q = 125) to be optimal, determine what the ordering cost would have to be.
Answer and Explanation:
The computation is shown below:
a. The computation of the economic order quantity is shown below:
[tex]= \sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}}[/tex]
[tex]= \sqrt{\frac{2\times \text{265}\times \text{\$19}}{\text{\$1.25}}}[/tex]
= 90 units
b. The number of orders would be equal to
= Annual demand ÷ economic order quantity
= 265 ÷ 90 units
= 3 orders per year
c. The average inventory is
= Economic order quantity ÷ 2
= 90 units ÷ 2
= 45 units
d. Now in this we have to find out the ordering cost which is shown below by applying the economic order quantity formula
[tex]Economic\ order\ quantity = \sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}}[/tex][tex]125\ units = \sqrt{\frac{2\times \text{265}\times \text{ordering\ cost}}{\text{\$1.25}}}[/tex]
After squaring both the sides, the ordering cost is $36.85
Wember Catering uses two measures of activity, jobs and meals, in the cost formulas in its budgets and performance reports. The cost formula for catering supplies is $350 per month plus $89 per job plus $9 per meal. A typical job involves serving a number of meals to guests at a corporate function or at a host's home. The company expected its activity in September to be 21 jobs and 144 meals, but the actual activity was 17 jobs and 141 meals. The actual cost for catering supplies in September was $3,035. The catering supplies in the planning budget for September would be closest to:
Answer:
$3,515
Explanation:
The computation of the catering supplies is shown below:
= Catering supplies per month + per job cost × expected number of jobs + per meal cost × expected number of meals
= $350 + $89 × 21 jobs + $9 × 144 meals
= $350 + $1,869 + $1,296
= $3,515
Since the question is asking for planning budget so we considered the expected units in terms of jobs and meals
Suppose the marginal propensity to consume is 0.75 and the government spending multiplier is 4. If the government decreases its purchases by $100 million, the aggregate demand curve will shift to the by $ million. If the government increases income taxes by $100 million, the aggregate demand curve will shift to the by $ million.
Final answer:
The aggregate demand curve will shift to the left by $400 million if government purchases decrease by $100 million, and it will shift to the right by $300 million if income taxes increase by $100 million.
Explanation:
The government spending multiplier is a number that indicates how much change in aggregate demand would result from a given change in government spending. If the government decreases its purchases by $100 million, the aggregate demand curve will shift to the left by $400 million. This is because the initial decrease in government spending will lead to a decrease in income, which in turn decreases consumption. The opposite is true for an increase in income taxes by $100 million. The aggregate demand curve will shift to the left by $300 million.
A fire destroyed a warehouse of the Goren Group, Inc., on May 4, 2021. Accounting records on that date indicated the following: Merchandise inventory, January 1, 2021 $ 1,970,000 Purchases to date 5,870,000 Freight-in 470,000 Sales to date 8,900,000 The gross profit ratio has averaged 20% of sales for the past four years. Required: Use the gross profit method to estimate the cost of the inventory destroyed in the fire.
Answer:
$1,190,000
Explanation:
The computation of cost of the inventory is given below:-
For computing the cost of inventory first we need to find out the cost of goods sold which is shown below:-
Cost of goods sold = Sales - Estimated gross profit
= $8,900,000 - ($8,900,000 × 20%)
= $7,120,000
Now, the Cost of the inventory = Beginning inventory + Purchase + Freight - Cost of goods sold
= $1,970,000 + $5,870,000 + $470,000 - $7,120,000
= $8,310,000 - $7,120,000
= $1,190,000
So, for computing the cost of the inventory we have applied the above formula.
You own a farm, you hire labor and capital to produce apples. The marginal product of the last unit of labor input is 15 and the marginal product of the last unit of capital input is 45. The market wage for labor is $8. If you are using the optimal combination of inputs, then the price of capital is _______.
a. $45
b. $3
c. $24
d. $360
Answer:
c. $24
Explanation:
At the optimal combination, the ratio between the marginal product for the last units of capital and labor must equal the ratio between the price of capital and the price of labor.
If Labor costs $8 and has a marginal product of 15, since capital has a marginal product of 45, the price of capital is:
[tex]\frac{45}{15}=\frac{C}{\$8}\\ C=\$24[/tex]
Price of capital is $24.
Answer:
C-$24
Explanation:
At optimal combination of inputs that is at the equilibrium level the ratio of marginal productivity of labor to the marginal productivity of capital is equal to the ratio of price of labor(wage) to the price of capital(rent). That is ,
MPL/MPK = W/R
WHERE , MPL = MARGINAL PRODUCTIVITY OF LABOR
MPK = MARGINAL PRODUCTIVITY OF CAPITAL
W = WAGE
R = RENT
SO , AS GIVEN , 15/45 = 8/R
SO , R = 8*3 = $24.
SO ANSWER IS OPTION C.$24
Rent for the month $ 1,650
Monthly take-home salary $ 3,185
Spending for food $ 845
Cash in checking account $ 650
Savings account balance $ 2,090
Balance of educational loan $ 3,360
Current value of automobile $ 9,300
Telephone bill paid for month $ 165
Credit card balance $ 335
Loan payment $ 280
Auto insurance $ 430
Household possessions $ 5,400
Video equipment $ 2,850
for electricity $ 190
Lunches/parking at work $ 280
Donations $ 360
Calculate the total assets and total liabilities
Answer:
Personal assets are basically the valuable things that a person possesses. They include both physical assets (e.g. car) or financial assets (e.g. checking account).
TOTAL ASSETS
Checking account $650
Savings account $2,090
Automobile $9,300
Household possessions $5,400
Video equipment $2,850
Total $20,290
Personal liabilities are all the loans (e.g. student loans), debts, unpaid service, or unpaid taxes that a person might have.
TOTAL LIABILITIES
Educational loan $3,360
Credit card $335
Total $3,695
This person's net worth = assets - liabilities = $20,290 - $3,695 = $16,595
Mike Samson is a college football coach making a base salary of $650,400 a year ($54,200 per month). Employers are required to withhold a 6.2% Social Security tax up to a maximum base amount and a 1.45% Medicare tax with no maximum. Assuming the FICA base amount is $128,400. 1. Compute how much will be withheld during the year for Coach Samson’s Social Security and Medicare.
Answer:
The amount that will be withheld during the year for Coach Samson’s is $7,960.80 for Social Security and $9,430.80 Medicare.
Explanation:
In order to calculate how much will be withheld during the year for Coach Samson’s Social Security and Medicare, we would have to make the following calculations:
Accoring to the given data we have that the FICA base amount is $128,400
Therefore, Ammount to be withheld for Social Security= $128,400× 6.2%
Ammount to be withheld for Social Security=$7,960.80
Ammount to be withheld for Medicare= $650,400× 1.45%
Ammount to be withheld for Medicare= $9,430.80
The amount that will be withheld during the year for Coach Samson’s is $7,960.80 for Social Security and $9,430.80 Medicare.
A client in the 33 percent marginal tax bracket is comparing a municipal bond that offers a 5 percent yield to maturity and a similar-risk corporate bond that offers a 6.25 percent yield. Which bond will give the client more profit after taxes
Answer:
The municipal bond
Explanation:
5%/1-.33 = 7.46
1.7.46>6.25, so the client should take the municipal bond
A company produces two products, A and B. It has limited capacity but unlimited demand so it can sell as many of either product as it produces. Product A requires 2 machine hours per unit to produce, and Product B requires 1 machine hour to produce. Product A sells for $6 per unit and has variable costs of $2 per unit; Product B sells for $5 per unit and has variable costs of $2 per unit. What is the most profitable sales mix for the company?
Answer:
The company should use all of its limited machine hour to produce only product B. This will make it maximize profit
Explanation:
Whenever a company is faced with a limiting factor i.e a resource in short supply, the company should allocate the resource to the product with he highest contribution per unit of the scare resource
Product Cont/unit machine hr /unit cont/hr Ranking
A 6-2 = $4 per unit 2 hours $2 per hour 2nd
B 5-2 = $3 per unit 1 hour $3 per hour 1st
The company should use all of its limited machine hour to produce only product B. This will make it maximize profit
When firms use multiple sources of capital, they need to calculate the appropriate discount rate for valuing their firm's investment cash flows as: Group of answer choices a simple average of the capital components costs a sum of the capital components costs they apply to each asset as they are purchased with their respective forms of debt or equity a weighted average of the capital components costs
Answer:
A Weighted average of the capital components costs.
Explanation:
The weighted average cost of capital (WACC) is, in simple language, the amount a corporation is required to reimburse on aggregate for all its security investors to fund its capital. The WACC is normally applied to by the cost of debt for the company. Crucially, it is determined by the outside market rather than by administrators.
Companies borrow capital from a variety of sources:: preferred stock, common stock, regular debt, contingent debt, transferable debt, options, shares, pension obligations, employee stock options, government grants, etc. Various securities, representing various sources of capital, are supposed to yield various returns.
Ultimately, the study of international business is no different from the study of domestic business. Thus, there is no point in having a separate course on international business." Evaluate this statement. Is it true? Why? Why not?
Answer:
Explanation:
Where the culture and the mode of living are completely different, international business is going beyond boundaries.
People of single culture and region are been dealt with in the domestic business, and it is easy to know what the customer needs. Many cultures are been dealt with when it comes to international business, and there is a need for product customization as per the location. This would require a team that manages these issues in each region.
Hence, when compared to domestic business, the business will be in a large mode. Thus, there is a separate course for international business which helps us to reach the heights we require to see the whole world.
Based on the explanation above, the statement given in the question is false.
The assertion that the study of international business is no different from the study of domestic business is incorrect. International business involves dealing with different cultural expectations, diverse legal systems, diverse market conditions, multiple economic systems, and logistical challenges that are unique to operating across borders. Therefore, there is a clear need for separate courses on international business.
Explanation:The premise that the study of international business is no different from the study of domestic business implies both disciplines require similar skills and knowledge. However, this is not entirely accurate. While there may be similarities, there are also many distinct elements that differentiate the two.
First, international business often involves dealing with different cultures, legal systems, and market conditions. Understanding these factors is crucial when trying to achieve success in international markets. For instance, successful marketing strategies in one country may not work in another due to cultural differences.
Second, in domestic business, one deals with a single economic, social and political environment. However, in international business, one has to deal with varying economic systems, regulatory structures, and political climates. There's also the issues of dealing with different currencies and complex tax regulations in international business.
Lastly, there are logistical challenges and strategic considerations unique to international businesses such as handling international logistics, managing subsidiaries in different countries, and dealing with geopolitical risks. Given the complexities and differences highlighted, it is clear that there is a need for separate, dedicated courses on international business.
Learn more about International Business here:https://brainly.com/question/34490928
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A profit-maximizing firm in a competitive market is able to sell its product for $7. At its current level of output, the firm's average total cost is $10. The firm’s marginal cost curve crosses its marginal revenue curve at an output level of 9 units. The firm experiences a
a. profit of more than $27.
b. profit of exactly $27.
c. loss of more than $27.
d. loss of exactly $27.
Answer:
d. loss of exactly $27.
Explanation:
Under a competitive firm, a profit-maximizing firm level of output can be find out by equating the marginal revenue with its marginal cost i.e
Marginal revenue = Marginal cost
As we know that
Average total cost = Total cost ÷ Quantity
$10 = Total cost ÷ 9
So, the total cost is
= $10 × 9
= $90
And,
Total revenue = Price × quantity
= $7 × 9
= $63.
So,
Profit = Total revenue - total cost
= $63 - $90
= -$27
This amount comes in a negative which reflects that there is a loss of $27