Answer:
a. $341,000.
Explanation:
As we know that the inventory should be valued at cost or market value whichever is lower and the same is shown below:
Product Cost Market Lower value of cost or market
A $110,000 $120,000 $110,000
B $80,000 $76,000 $76,000
C $155,000 $162,000 $155,000
Value of the inventory $341,000
The manager of a national retailing outlet recently hired an economist to estimate the firm's production function. Based on the economist's report, the manager now knows that the firm's production function is given by and that capital is fixed at 1 unit.a. Calculate the average product of labor when 9 units of labor are utilized. b. Calculate the marginal product of labor when 9 units of labor are utilized. c. Suppose the firm can hire labor at a wage of $10 per hour and output can be sold at a price of $100 per unit. Determine the profit-maximizing levels of labor and output. d. What is the maximum price of capital at which the firm will still make nonnegative profits
Answer:
nothing has it for everyone else to
Explanation:
nothing is that ok so go back to the
Star Corp. reported pretax net income from continuing operations of $1,000,000. Tax depreciation exceeded book depreciation by $100,000. Star Corp. had $50,000 of accrued vacation pay that was not deductible. Star Corp. also claimed $150,000 dividends received deduction (DRD). Assume no valuation allowance.
Required:
a. Compute Star Corp.'s current income tax expense or benefit.
b. Compute Star Corp.'s deferred income tax expense or benefit.
c. Provide two reconciliation of Star Corp.'s total income tax provision with its hypothetical income tax expense of 21% in both dollars and rates.
Answer:
Star Corp
A.
Pretax net income from continuing operations = $1,000,000
Add Accrued Vacation $50,000
Deduct additional Tax Depreciation $100,000
Deduct Dividend received deductions $150,000
Net Taxable Income = $800,000
Income Tax expenses = 21% x $800,000 = $168,000
Income tax Expense provision based on book Net income = 21% x $1,000,000 = $210,000
Income tax benefit = $168,000 minus $210,000 = $42,000 (benefit)
B.
Deferred income tax expense =
Income tax Provision = $210,000
Less income tax expense = $168,000
Differed income tax (benefit) = $42,000
C.
Reconciliation
Book Net income = $1,000,000
Tax rate = 21%
Tax expense provision = $210,000...(a)
Pretax net income from continuing operations = $1,000,000
Add Accrued Vacation $50,000
Deduct additional Tax Depreciation $100,000
Deduct Dividend received deductions $150,000
Taxable Net income (adjusted) = $800,000
Tax rate = 21%
Tax expense provision = $168,000......(b)
Difference (a) minus (b) = $42,000 . This is a benefit to the firm (star corp) because its actual tax liability is less than what it provided for because of net deductibles not accounted for in its income statement.
Trainers need to genuinely care about their clients. Ana adds that she learns a lot about people and earns their trust, then helps them set practical goals that will help them methodically improve their fitness. Which problem-solving style is the best fit?
a. Sensation-Feeling
b. Intuitive-Feeling
c. Intuitive-Thinking
d. Sensation-Thinking
Answer:
a. Sensation-Feeling
Explanation:
Trainers need to genuinely care about their clients. Ana adds that she learns a lot about people and earns their trust, then helps them set practical goals that will help them methodically improve their fitness. Which problem-solving style is the best fit?
Anna made use of sensation-feeling style because she understood the needs of her clients and this can only be achieved by putting herself in the client shoes in order to experience their feeling and then coming up with a practical solution with solve any arising issue.
JRN Enterprises just announced that it plans to cut its dividend payout in the next year (Div1) from $3.00 to $1.50 per share and use the extra funds to expand its operations. Prior to this announcement, JRN's dividends were expected to grow indefinitely at 4% per year and JRN's stock was trading at $25.50 per share. With the new expansion, JRN's dividends are expected to grow at 8% per year indefinitely. Assuming that JRN's risk is unchanged by the expansion, the value of a share of JRN after the announcement is closest to:
Answer:
21.42
Explanation:
rE= Div1 / P0+ g
= 3.00/ 25.50 + .04
= 0.15% or 15%
Solve for new stock price:
P0= Div1 / (rE- g)
= 1.50/ (0.15- .08)
=1.50/0.07
= 21.42
Therefore assuming that JRN's risk is unchanged by the expansion, the value of a share of JRN after the announcement is closest to: 21.42
Fully vested incentive stock options exercisable at $46 per share to obtain 20,000 shares of common stock were outstanding during a period when the average market price of the common stock was $50 and the ending market price was $50. What will be the net increase in the weighted-average number of shares outstanding due to the assumed exercise of these options when calculating diluted earnings per share?
Answer:
1,600
Explanation:
Cost of incentive stock options 20,000*46=$920,000
Shares at exercise price $920,000/50=18,400
Shares option difference 20,000-18,400=1,600
Sandhill Co. sells office equipment on July 31, 2022, for $23,500 cash. The office equipment originally cost $75,080 and as of January 1, 2022, had accumulated depreciation of $41,850. Depreciation for the first 7 months of 2022 is $3,850.Prepare the journal entries to (a) update depreciation to July 31, 2022, and (b) record the sale of the equipment. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Answer and Explanation:
The Journal entry is shown below:-
a. Depreciation Expense A/c Dr $3,850
To Accumulated Depreciation $3,850
(Being depreciation expense is recorded)
b. Cash Dr $23,500
Accumulated Depreciation Dr, $$45,700
Loss on Disposal Dr, $5,880
To Office equipment $75,080
(Being sale of machinery is recorded and debited the rest amount to the loss on Disposal of office equipment)
Working Note
The accumulated depreciation is computed below:
= $41,850 + $3,850 = $45,700
1. Characteristics of competitive markets The model of competitive markets relies on these three core assumptions: 1. There must be many buyers and sellers—a few players can't dominate the market. 2. Firms must produce an identical product—buyers must regard all sellers' products as equivalent. 3. Firms and resources must be fully mobile, allowing free entry into and exit from the industry.
Answer: Please refer to Explanation
Explanation:
Hello. Question was a bit incomplete so I attached the completing details.
a) Several stores in the mall sell hooded sweatshirts. Each store's sweatshirts reflect the style of that particular store. Additionally, some stores use higher-quality cotton than others, which is reflected in the apparel�s prices.
- No, not an identical product
This is not a Competitive Market because the products are not identical. They are differentiated by better quality and design and this is reflected in the price.
b) In a small town, there are two providers of broadband Internet access: a cable company and the phone company. The Internet access offered by both providers is of the same speed.
- No, not many sellers.
There are only 2 sellers in this market. This market is too SATURATED ( few companies) for it to be a Competitive Market as a Competitive Market requires that there be many buyers and sellers.
c) Dozens of companies produce plain white socks. Consumers regard plain white socks as identical and don't care who manufactures their socks.
- Yes, meets all the assumptions.
This market meets all the assumptions to be considered a Competitive Market. There are many buyers and sellers of the white socks. The firms in the market produce identical socks so much so that people don't know the difference. Markets like these usually have low barriers to entry hence the high amount of companies there.
d) Scholastik Inc. owns the U.S. copyright to a popular book series. It is the only company with the legal right to publish books in the series in the United States.
- No, no free entry.
As stated, Scholastik Inc. is the ONLY company with legal rights to publish books in that series in the US. This means that there are very high barriers to entry as Scholastik is protected by the law. No other company is allowed to do what they do so it is not a Competitive Market.
Competitive markets in the perfect competition model are defined by having a large number of buyers and sellers, producing identical (homogeneous) products, and allowing for free entry and exit from the market. These characteristics ensure that no single entity can influence market prices, promoting efficiency and equity in the market.
The perfect competition model is a fundamental concept in economics, describing a market structure where specific criteria are met to ensure a competitive environment. In this context, competitive markets are characterized by three core assumptions, which play a crucial role in shaping market dynamics and competition levels.
Many Buyers and Sellers: This condition implies that the market consists of a large number of buyers and sellers, where no single entity (buyer or seller) has the market power to influence the price levels. This ensures that each party acts as a price taker.Identical Products: All firms in the market must produce homogeneous goods or services, making products offered by different firms perfectly substitutable in the eyes of consumers. This characteristic eliminates brand loyalty or preferences based solely on product differentiation.Free Entry and Exit: The market must allow for easy entry and exit of firms. This assumes no significant barriers to entry or exit, such as high startup costs or stringent regulations, allowing firms to participate freely based on market conditions.These characteristics ensure that the market operates efficiently, with prices reflecting the true supply and demand. Perfect competition models serve as a benchmark for comparing other market structures, such as monopolistic competition and oligopoly, where these assumptions do not fully apply.
lantwide rate unit cost, using direct labor hours? Relative to the plantwide rate, the cost increased for Form A and decreased for Form B. 3. What if the machine hours in Molding were 1,200 for Form A and 3,800 for Form B and the direct labor hours used in Polishing were 5,000 and 15,000, respectively? Calculate the overhead cost per unit for each product using departmental rates. Round your answers to the nearest cent.
Answer:
Form A $4.6 overhead per unit
Form B $ 7.2 overhead per unit
Explanation:
Missing Information attached
For molding the overhead will not change as the total horus are the same:
1,200 + 3,800 = 5,000 machine hours
$ 375,000 / 5,000 = $ 75
Then, we multiply:
1,200 x $ 75 = $ 90,000
3,800 x $ 75 = $ 285,000
Then, for Polishing:
5,000 + 15,000 = 20,000
$ 100,000 / 20,000 = $5
5,000 x $5 = $ 25,000
15,000 x $5 = $ 75,000
Form A 90,000 + 25,000 = 115,000
overhead per unit: 115,000 / 25,000 = 4.6
Form B 285,000 + 75,000 = 360,000
overhead per unit 360,000 / 50,000 = 7.2
Junkyard Arts, Inc., had earnings of $290,400 for the year. The company had 52,000 shares of common stock outstanding during the year and issued 2,500 shares of $100 par value preferred stock. The preferred stock has a dividend of $8 per share. There were no transactions in either common or preferred stock during the year. Determine the basic earnings per share for Junkyard Arts for the year
Answer:
The basic EPS for Junkyard Arts, Inc. is $5.2 per share.
Explanation:
The basic earnings per share is the amount of net income that is earned per share of common equity or the amount of net income attributable to each share of common stock. The basic earnings per share (EPS) is calculated using the following formula,
Basic EPS = (Net Income - Preferred stock dividend) / Weighted average number of common shares outstanding
The preferred stock dividend for the period was = 8 * 2500 = 20000
Basic EPS = (290400 - 20000) / 52000
Basic EPS = $5.2
The owner of Genuine Subs, Inc., hopes to expand the present operation by adding one new outlet. She has studied three locations. Each would have the same labor and materials costs (food, serving containers, napkins, etc.) of $2.70 per sandwich. Sandwiches sell for $3.50 each in all locations. Rent and equipment costs would be $5,800 per month for location A, $5,900 per month for location B, and $6,150 per month for location C.
a. Determine the volume necessary at each location to realize a monthly profit of $12,000.
b-1. If expected sales at A, B, and C are 23,000 per month, 26,000 per month, and 25,000 per month, respectively, calculate the profit of the each locations?
b-2. Which location would yield the greatest profits?
Answer:
Genuine Subs, Inc. Profit-Volume Analysis:
Contribution Margin for all three locations = $3.50 - $2.70 = $0.80
Fixed Costs:
A - $5,800
B - $5,900
c - $6,150
Expected profit = $12,000
a) Volume necessary to realize a monthly profit of $12,000 at each location:
Breakeven Volume + Target Profit = (Fixed Cost + Profit) / contribution margin
A = (5,800 + 12,000) / 0.80 = 22,250 units
B = (5,900 + 12,000) / 0.80 = 22,375 units
C = (6,150 + 12,000) / 0.80 = 22,688 units
b-1) Profit Calculation with given expected sales =
Sales volume by sales price minus Variable cost plus Fixed cost or Sales Volume by contribution minus fixed cost
A = 23,000 x $0.80 - $5,800 = $12,600
B = 26,000 x $0.80 - $5,900 = $14,900
C = 25,000 x $0.80 - $6,150 = $13,850
b-2) Location B would yield the greatest profits of $14,900.
Explanation:
a) The break even point plus target profit is the volume of sales needed to cover fixed costs and make a target profit.
To calculate break even point plus target profit, the fixed cost is divided by the contribution per unit. Contribution per unit or the Contribution margin is the difference between sales price and variable cost.
b) Profit is the difference between sales value and cost of sales. Cost of sales is made up of variable cost and fixed cost.
c) The location that yields the greatest profits is determined by calculating the profits which would be made at each location and comparing them.
Suppose Eileen is an avid reader and buys only comic books. Eileen deposits $3,000 in a bank account that pays an annual nominal interest rate of 5%. Assume this interest rate is fixed—that is, it won't change over time. At the time of her deposit, a comic book is priced at $10.00.
Required:
a. Initially, the purchasing power of Eleen's $3,000 deposit is __________ comic books.
Answer:
300 comic books
Explanation:
Purchasing power of money at any point in time is the quantity of goods and services that can be acquired using the stock of money at the prevailing price level.
As at the time the $3000 money was deposited, the price per book stood at $10.
Purchasing power of $3000
= $3000/$10
= 300 comic books
The following labor standards have been established for a particular product: Standard labor-hours per unit of output 10.1 hours Standard labor rate $ 13.90 per hour The following data pertain to operations concerning the product for the last month: Actual hours worked 7,900 hours Actual total labor cost $ 106,650 Actual output 1,100 units What is the labor efficiency variance for the month
Answer:
44,619 favorable
Explanation:
WORK:
Direct labor efficiency variance
= (Standard hours - Actual hours)*Standard rate
= (11,110-7900)*13.90
=3,210*13.90
= 44,619 favorable
Therefore the labor efficiency variance for the month is 44,619 favorable
Standard hours = Standard labor-hours per unit of output*Actual output
= 10.1*1,100
= 11,110
Rodriguez, Inc., is preparing its direct labor budget for 2017 from the following production budget based on a calendar year. Quarter Units Quarter Units 1 20,440 3 35,420 2 25,370 4 30,200 Each unit requires 1.80 hours of direct labor. Prepare a direct labor budget for 2017. Wage rates are expected to be $18 for the first 2 quarters and $20 for quarters 3 and 4. (Round Direct labor time per unit answers to 2 decimal places, e.g. 52.50.) RODRIQUEZ, INC. Direct Labor Budget Quarter 1 2 3 4 Year $ $ $ $ $ $ $ $ $
Answer and Explanation:
Rodriguez, Inc
Direct Labour Budget
Unit to produce × labour hours for each units = Total hours
Unit 1 $20,440 × 1.80 hours =$36,792
Unit 2 $25,370× 1.80 hours =$45,666
Unit 3 $35,420 ×1.80 hours =$63,756
Unit 4 $30,200×1.80 hours =$54,360
Total hours × Wages rate
Unit 1$36,792 ×$18=$662,256
Unit 2 $45,666×$18=$821,988
Units 3 $63,756 ×$20=$1,275,120
Unit 4 $54,360×$20=$1,087,200
A customer has requested that Lewelling Corporation fill a special order for 1,900 units of product S47 for $41 a unit. While the product would be modified slightly for the special order, product S47's normal unit product cost is $16.00: Direct materials $ 4.30 Direct labor 4.00 Variable manufacturing overhead 1.40 Fixed manufacturing overhead 6.30 Unit product cost $ 16.00 Assume that direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like modifications made to product S47 that would increase the variable costs by $2.20 per unit and that would require an investment of $11,000.00 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. The annual financial advantage (disadvantage) for the company as a result of accepting this special order should be:
Answer:
Profit from sale of special order = $77,900 - $33,610 = $44,290
Explanation:
Being a special order and an added opportunity to its regular sales of S47, we will be looking at the Marginal Costs of accepting to produce the order:
Direct Material = $4.30
Direct Labour = $4.00
Variable Overhead = $3.60
Fixed Manufacturing Overhead = $6.30
Total Costs = $18.20
But, Fixed Costs is already covered/absorbed by our existing business; as such we need not include it in the costing of the special order
And there is an Additional investment in moulds = $11,000
Total cost of special order = ($18.20 - $6.30) x 1,900 units + $11,000
= $33,610
Sales of special order = 1,900 units x $41 =$77,900
Profit from sale of special order = $77,900 - $33,610 = $44,290
Arigold Inc. has been manufacturing its own finials for its curtain rods. The company is currently operating at 100% of capacity, and variable manufacturing overhead is charged to production at the rate of 62% of direct labor cost. The direct materials and direct labor cost per unit to make a pair of finials are $3.98 and $4.78, respectively. Normal production is 30,400 curtain rods per year. A supplier offers to make a pair of finials at a price of $13.16 per unit. If Marigold accepts the supplier’s offer, all variable manufacturing costs will be eliminated, but the $43,100 of fixed manufacturing overhead currently being charged to the finials will have to be absorbed by other products.Required:a. Prepare an incremental analysis to decide if Arigold Inc should buy the finials.b. Should Arigold Inc. buy the finials?
Answer:
Arigold Inc's Finials' Incremental Analysis:
a-i) To buy Finials, the price is $13.16 per unit.
a-ii) To make Finials, the relevant cost per unit is calculated as follows:
Materials = $3.98 per unit
Labor = $4.78 per unit
Variable Overhead = 62% of Labour cost, = 0.62 x $4.78 = $2,96
Therefore, total cost per unit is $(3.98 +4.78 + 2.96) = $11.72
b) Comparing the purchase cost of $13.16 and the make cost of $11.72 per unit, Arigold Inc should not buy the Finials.
Even when the fixed manufacturing overhead is charged to the Finials, the total unit cost (absorbed) will be $13,14, which is still less than the make cost of $13.16 per unit.
Explanation:
Incremental Analysis is a business technique that assists in making decisions among choices as it shows the true differences between alternatives. It is also known as the relevant cost approach, differential, and marginal analysis.
In the case of Arigold Inc, we disregarded the sunk or fixed manufacturing overhead of $43,100. This is cost is not relevant in this type of decision because it would still be incurred no matter the decision taken.
A labor-intensive process has a fixed cost of $320,000 and a variable cost of $143 per unit. A capital-intensive (automated) process for the same product has a fixed cost of $1,330,000 and a variable cost of $92.50 per unit. Contributed by Paul R. McCright, University of South Florida. How many units must be produced and sold at $208 each for the automated process to be preferred to the labor-intensive process
Answer:
More than 20,000 units must be produced and sold at $208 each for the automated process to be preferred to the labor-intensive process.
Explanation:
Call X is the number of units must be produced and sold at $208.
For capital-intensive (automated) process, Profit (P) = Sales - fixed cost - variable cost = $208X - $1,330,000 - $92.50x = $115.5x - $1,330,000
For labor-intensive process, Profit (P) = Sales - fixed cost - variable cost = $208X - $320,000 - $143X = $65X - $320,000
The automated process to be preferred to the labor-intensive process when Profit from capital-intensive (automated) process > Profit from labor-intensive process
$115.5x - $1,330,000 > $65X - $320,000
$50.5X > $1,010,000
X > 20,000 (units)
More than 20,000 units must be produced and sold at $208 each for the automated process to be preferred to the labor-intensive process.
Mr. Jones always buys gasoline at the corner station with his credit card. Now a new station (that does not accept credit cards) is built on the other corner and offers the same quality of gasoline for $.05 less per gallon. Is Jones irrational if he continues to buy gasoline at the old station
Answer: B. Not necessarily; he may think the ease and convenience of using the credit card is worth the extra cost.
Explanation:
Rationally speaking, human beings as market participants have to obey the law of Demand which states that As the price of a good rises, the demand should fall and vice versa.
Now, the price of the new station is less than that of the old station so rationally speaking, he should switch to the New station.
However, they do not take credit cards at the new station and Mr Jones likes to pay with his credit card. This means that the law of Demand is not necessarily violated here if Mr. Jones believes that the convenience of using his card is an extra cost that can be added to the New station. Should this be the case then the new station might still be more expensive to Mr. Jones so the Law of Demand is not broken if he keeps using the old place.
Baker Corporation owned a building located in Kansas. Baker used the building for its business operations. Last year a tornado hit the property and completely destroyed it. This year, Baker received an insurance settlement. Baker had originally purchased the building for $350,000 and had claimed a total of $100,000 of depreciation deductions against the property. What is Baker’s realized and recognized gain or (loss) on this transaction and what is its basis in the new building in the following alternative scenarios?a. Baker received $450,000 in insurance proceeds and spent $450,000 rebuilding the building during the current year.b. Baker received $450,000 in insurance proceeds and spent $500,000 rebuilding the building during the current year.c. Baker received $450,000 in insurance proceeds and spent $400,000 rebuilding the building during the current year.d. Baker received $450,000 in insurance proceeds and spent $450,000 rebuilding the building during the next three years.
Answer:
a. Recognized Gain $0 and Basis in new building $250,000
b. Recognized Gain $0 and Basis in new building $300,000
c. Recognized Gain $50,000 and Basis in new building $250,000
d. Recognized Gain $200,000 and Basis in new building $450,000
Explanation:
a. Baker has reinvested the insurance proceeds and therefore will not recognize any of its $200,000 realized gain. Moreover, Baker’s basis in the new building is $250,000. As shown below:
S. No. Particular Amount($) Clarification
1 Insurance Proceeds 450,000 Given in Question
2 Adjusted Value 250,000 350,000 - 100,000
3 Realized Gain 200,000 (1) – (2)
4 Proceeds Reinvested 450,000 Given in Question
5 Amount not Reinvested 0 (1) – (4)
6 Gain recognized 0 Lower of (3) or (5)
7 Deferred Gain 200,000 (3) – (6)
8 Value of Replacement Property 450,000 Given in Question
9 Basis of Replacement Property 250,000 (8) – (7)
b. Baker has reinvested the insurance proceeds and therefore will not recognize any of its $200,000 realized gain. Moreover, Baker’s basis in the new building is $300,000. As shown below:
S. No. Particular Amount($) Clarification
1 Insurance Proceeds 450,000 Given in Question
2 Adjusted Value 250,000 350,000 - 100,000
3 Realized Gain 200,000 (1) – (2)
4 Proceeds Reinvested 500,000 Given in Question
5 Amount not Reinvested 0 (1) – (4)
6 Gain recognized 0 Lower of (3) or (5)
7 Deferred Gain 200,000 (3) – (6)
8 Value of Replacement Property 500,000 450,000 + 50,000
9 Basis of Replacement Property 300,000 (8) – (7)
c. Baker has reinvested $400,000 of the insurance proceeds and therefore will recognize gain of $50,000 out of the $200,000 realized gain. Moreover, Baker’s basis in the new building is $250,000. As shown below:
S. No. Particular Amount($) Clarification
1 Insurance Proceeds 450,000 Given in Question
2 Adjusted Value 250,000 350,000 - 100,000
3 Realized Gain 200,000 (1) – (2)
4 Proceeds Reinvested 400,000 Given in Question
5 Amount not Reinvested 50,000 (1) – (4)
6 Gain recognized 50,000 Lower of (3) or (5)
7 Deferred Gain 150,000 (3) – (6)
8 Value of Replacement Property 400,000 450,000 - 50,000
9 Basis of Replacement Property 250,000 (8) – (7)
d. Baker has taken three years in order to replace the property destroyed and therefore, will recognize all of its $200,000 realized gain. Baker's basis in the new building is $450,000. As shown below:
S. No. Particular Amount($) Clarification
1 Insurance Proceeds 450,000 Given in Question
2 Adjusted Value 250,000 350,000 - 100,000
3 Realized Gain 200,000 (1) – (2)
4 Proceeds Reinvested 0 Given in Question
5 Amount not Reinvested 450000 (1) – (4)
6 Gain recognized 200,000 Lower of (3) or (5)
7 Deferred Gain 0 (3) – (6)
8 Value of Replacement Property 450,000 Given in Question
9 Basis of Replacement Property 450,000 (8) – (7)
Final answer:
The student has asked about the realized and recognized gains or losses on a destroyed property and the basis in the rebuilt property for Baker Corporation. Baker's realized gain in all scenarios is $200,000, which can be deferred if the insurance proceeds are reinvested in rebuilding the property. The tax basis of the rebuilt property varies depending on the additional amount spent over the insurance proceeds.
Explanation:
The student is asking about the realized and recognized gain or loss on an involuntary conversion of property due to a disaster, and the basis for the new property. This falls under the tax treatment of property and gains which is a Business topic, specifically within Taxation.
Firstly, realized gain or loss is the difference between the amount of insurance proceeds received and the adjusted basis of the destroyed property. The adjusted basis is the original cost of the property minus any depreciation claimed. In this scenario, the adjusted basis of Baker's building is $250,000 ($350,000 original purchase price - $100,000 total depreciation).
Recognized gain or loss is the amount of the realized gain or loss that is actually reportable for tax purposes. If all the insurance proceeds are reinvested in similar property within a specified time period, the realized gain is not recognized, thus deferring the tax on the gain (called a like-kind exchange).
Scenario a: Baker has a realized gain of $200,000 ($450,000 insurance proceeds - $250,000 adjusted basis). However, since Baker spent the entire insurance proceeds on rebuilding within the same year, the gain is not recognized. Baker's basis in the new building is the old building's adjusted basis plus any additional costs, which in this case is just the adjusted basis of $250,000.
Scenario b: Similar to Scenario a, Baker has a realized gain of $200,000 with no taxable recognition since the proceeds were reinvested, but Baker's basis in the new building would be higher at $300,000 ($250,000 adjusted basis + $50,000 extra spent).
Scenario c: Baker still has a realized gain of $200,000. Baker will recognize the gain to the extent the insurance proceeds exceed the cost of the new property. The recognized gain is $50,000 ($450,000 insurance proceeds - $400,000 spent on new building). The basis of the new building would be the cost of the new building, which is $400,000.
Scenario d: As with Scenario a, Baker has a realized gain of $200,000, which is not recognized provided that the entire amount is expended on rebuilding within a certain period, typically two years after the year of the loss for non-personal-use property. Baker's basis in the new property remains the same as in scenario a, $250,000.
The difference between the short-run and the long-run is _____.
a. three months, or one business quarter.
b. the time it takes for firms to change all inputs in the production process.
c. the time it takes for firms to change only their variable inputs.
d. More information is required to answer this question.
Answer: the time it takes for firms to change all production inputs.(B)
Explanation:
In macroeconomics, the short run is defined as the time horizon when the wages and prices of other inputs to production are inflexible, while the long run is the period of time when input prices have time to adjust.
In the long-run, all factors of production and costs are variable such that firms are able to adjust every costs, whereas, in the short run, the firms only influence prices through the adjustments made to production levels.
Abramov Inc. uses a job-order costing system in which any underapplied or overapplied overhead is closed to cost of goods sold at the end of the month. In May the company completed job N29W that consisted of 22,200 units of one of the company's standard products. No other jobs were in process during the month. The job cost sheet for job N29W shows that the job's total cost was $737,040. During the month, the actual manufacturing overhead cost incurred was $227,180 and the manufacturing overhead cost applied was $212,380. Also during the month, 7,400 completed units from job N29W were sold. No other products were sold during the month. The unadjusted cost of goods sold (in other words, the cost of goods sold BEFORE adjustment for any underapplied or overapplied overhead) for May is closest to:______
a. $737,040
b. $714,540
c. $245,680
d. $250,600
Answer:
Option c is correct
$245,680
Explanation:
The total manufacturing cost = $737,040.
Units produced = 22,200
Cost per unit before adjustment for absorbed overhead=
=$737,040./22,200 units
=$33.2 per unit
Cost of goods sold before adjustment for overheads
= (cost per unit × units sold)
= $33.2 × 7,400
= $245,680
Answer:
The correct option is C
Explanation:
As per given information, the total production cost for N29W job in May has been documented as $737,040.
For the same month and same job, the total units produced were 22200
Cost of producing one unit = Total cost/ total units
=$737,040./22,200 units
=$33.2 per unit
This is the cost of one unit without any adjustment
Now the total number of goods sold without any adjustment are 7400. Cost actually incurred in these would be
= $33.2 × 7,400
= $245,680
Hence the option C is the correct one
"Personal selling:" A. involves direct spoken communication between sellers and potential customers. B. costs less than advertising for reaching a large, widespread market. C. tries to communicate with many customers at the same time. D. refers to "promoting" at trade shows, demonstrations, and contests. E. All of these alternatives for "personal selling" are correct.
Answer:
A. involves direct spoken communication between sellers and potential customers.
Explanation:
The personal selling is the marketing strategy to sell the products of the company by face to face mode to the customers. In this, the sales person should have convenience skills, knowledge of product, attitude, appearance. Moreover they also provide to trial the product so that they can build the trust of the customer
Hence, the correct option is A.
The Acme Widget Company has found that if widgets are priced at s 389, then 1000 will be sold. They have also found that for every increase of $ 10, there will be 600 fewer widgets sold. The marginal cost of widgets is $ 97.25. The fixed costs for the Acme Widget Company are $ 8000. lf x represents the price of a widget find the following in terms of x The number of widgets that will be sold: The revenue generated by the sale of widgets: The cost of producing just enough widgets to meet demand: The proft from selling widgets: Find the price that will maximize profits from the sale of widgets:
Answer:
See the explanation below.
Explanation:
a. The number of widgets that will be sold
Let y represent the number of widgets that will be sold, and and we already have x as price of widget, we therefore have:
y - 1,000 = (-600/10) * (x - 389)
y - 1,000 = -60 * (x - 389)
y = 1,000 - [60 * (x - 389) ]
y = 1,000 - 60x + 23,340
y = 24,340 - 60x
b. The revenue generated by the sale of widgets
Let R represent Revenue, therefore we have:
R = xy
R = x(24,340 - 60x)
R = 24,340x - 60x²
c. The cost of producing just enough widgets to meet demand
Let C represent total cost, we therefore have:
C = 8,000 + 97.25y
C = 8,000 + 97.25(24,340 - 60x)
C = 8,000 + 2,367,065 - 5,835x
C = 2,375,065 - 5,835x
d. The proft from selling widgets
Let P represent profit, we therefore have:
P = R - C
P = 24,340x - 60x² - (2,375,065 - 5,835x)
P = 24,340x - 60x² - 2,375,065 + 5,835x
P = - 60x² + 30,175x - 2,375,065
e. Find the price that will maximize profits from the sale of widgets
Profit is optimum when dP/dx = 0
Therefore, we have
0 = - 120x + 30,175
120x = 30,175
x = 30,175/120 = $251.46
Answer: D.
to promote competition between widget makers
Explanation:
Draw, label and explain the Circular Flow Model (CFM). Include the following: firms, households, product market, and factor (or resource) market. Who owns the productive resources? What are those resources?
What payment does each type of resource earn?
Explain the two markets in the CFM and explain the roles that firms and household each play in the CFM.
Answer:
Productive Resources Owners : Households
Resources : Land, Labour, Capital, Entrepreneur [paid rent, wages, interest, profit]
Explanation:
Simple (Two Sector) Circular Flow of Income : shows how receipts & payments for factor services, goods & services revolve within two sectors of economy.
Here, the two sectors are :
Households : Owners of factors of production & consumers of final goods & services Firms : Buyers of factors of production & providers (sellers) of final goods & servicesHouseholds provide firms with factors of production : Land, Labour, Capital, Entrepreneur. In return, firms pay them with respective factor payments : Rent, Wages, Interest, Profit. They produce final goods & services by utilising the productive factors.
Firms sell these final goods & services to households. In return, households pay them prices for the for their purchased goods & services, through the factor incomes they had earned from firms.
1. The CFM is a model that illustrates the interactions between individuals, organizations, and the government in the economy.
2. The productive resources are owned by households, who offer them to enterprises in exchange for money.
3. Businesses employ the inputs provided by families to manufacture goods and services that they then sell to households for remuneration.
4. The product market and the factor market are the two marketplaces that make up the CFM.
An economic model called the Circular Flow Model (CFM) shows the relationships between individuals, organizations, and the government. The model depicts the movement of products, services, and cash among various groupings. Land, labor, and other productive resources like capital and labor are owned by households. In exchange for payment, they provide these resources to companies.
Different payments are earned for various resource types:
Rental income is generated from land.
Pay comes from labor.
Interest is paid on money.
Learn more about on Circular Flow Model (CFM), here:
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The breakeven point is: The point at which revenues meet the budget target. The sales volume at which revenues equal fixed cost and profit is zero. The sales volume at which revenues equal variable cost and profit is zero. The sales volume at which the total contribution margin exceeds total variable costs. The sales volume at which revenues equal total cost plus an operating profit of zero.
Answer:
The sales volume at which revenues equal total cost plus an operating profit of zero
Explanation:
Break even point cover first the variable costs and then the fixed overhead. Thus it is the point at which revenues equal total cost plus an operating profit of zero.
Karen has an $80,825 basis in her 50 percent partnership interest in the KD Partnership before receiving a current distribution of $7,575 cash and land with a fair market value of $40,850 and a basis to the partnership of $21,150.
a. What is the amount and character of Karen's recognized gain or loss?
b. What is Karen's basis in the land?
c. What is Karen's remaining basis in her partnership interest?
Answer: a) $0
b) $21,150
c)$52,100
Explanation:
a) Karen would recognize no gain or losses in this scenario.
b) Karen would carryover the basis on the land which is $21,150
c) To calculate her remaining basis, we subtract the cash payment as well as the basis for the land she was distributed.
Calculating would be,
= 80,825 - 7,575 - 21,150
= $52,100
$52,100 is Karen's remaining basis in her partnership interest.
Dawson Toys, Ltd., produces a toy called the Maze. The company has recently established a standard cost system to help control costs and has established the following standards for the Maze toy:
Direct materials: 8 microns per toy at $0.33 per micron
Direct labor: 1.4 hours per toy at $6.90 per hour
During July, the company produced 5,000 Maze toys. Production data for the month on the toy follow:
Direct materials: 74,000 microns were purchased at a cost of $0.31 per micron. 24,000 of these microns were still in inventory at the end of the month.
Direct labor: 7,400 direct labor-hours were worked at a cost of $54,760.
1. Compute the following variance for july
a The materials price and quantity variances
b. The labor rate and efficiency variances
Answer:
Materials price variance = 1000 Favorable
Material Quantity Variance= 3300 unfavorable
2-a) Direct Labor Rate variance =3700 Unfavorable
Direct labor time variance=2760 Unfav
Explanation:
Given
Standard Quantity: Direct materials: 8 microns per toy
Standard Price $0.33 per micron
Standard hours :Direct labor: 1.4 hours per toy
Standard rate $6.90 per hour
Actual Production 5,000 Maze toys.
Working
Actual Quantity Purchased: Direct materials: 74,000 microns
Actual Price $0.31 per micron.
Actual Quantity used =74,000 microns- 24,000 = 50,000 microns
Standard Quantity Allowed = 8 * 5000= 40,000 microns
Actual hours: Direct labor: 7,400 direct labor-hours
Standard Hours allowed= 5000 units * 1.4= 7000 labor hours
Actual rate = $54,760/7400=$ 7.4 per hour
Calculations
1-a) Materials price variance = (Actual Price - Standard Price )* Actual Quantity
Materials price variance = (0.31- 0.33)50,000= 1000 Favorable
Material Quantity Variance= (Standard Price) *( Actual Quantity- Standard Quantity)
Material Quantity Variance=(0.33) - (50,000- 40,000) = 0.33*10,000= 3300 unfavorable
2-a) Direct Labor Rate variance= (actual hours)* actual rate- standard rate
= 7,400 (7.4-6.9)= 7400*0.5= 3700 Unfavorable
Direct labor time variance=standard rate* (actual hours )- (standard hours )
= 6.9 ( 7400- 7000) = 6.9 * 400= 2760 Unfav
On January 1, 2021, the Allegheny Corporation purchased equipment for $343,000. The estimated service life of the equipment is 10 years and the estimated residual value is $24,000. The equipment is expected to produce 296,000 units during its life.
Required:
Calculate depreciation for 2021 and 2022 using each of the following methods.
1. Sum-of-the-years’-digits (Do not round intermediate calculations. Round final answers to the nearest whole dollar amount.)
2. One hundred fifty percent declining balance. (Round final answers to the nearest whole dollar amount.)
3. Assume instead the equipment was purchased on October 1, 2021. Calculate depreciation for 2021 and 2022 using each of the two methods. Partial-year depreciation is calculated based on the number of months the asset is in service. (Do not round intermediate answers and round your answers to the nearest whole dollar amount.)
Final answer:
Depreciation for 2021 and 2022 is calculated using the sum-of-the-years’-digits and 150% declining balance methods, based on a full year and partial year, depending on the purchase date. The calculations vary by method and year, with the sum-of-the-years’-digits having decreasing depreciation and the 150% declining balance method having a constant rate.
Explanation:
The question involves calculating the depreciation for equipment using different methods. Our goal is to calculate the depreciation expense for the years 2021 and 2022.
Sum-of-the-Years’-Digits Method
For the sum-of-the-years’-digits (SYD) method, we first calculate the total number of years in the service life of the equipment (10 years) and find the sum of those years, which is the sum of the series from 1 to 10. That sum is 55. The depreciable base is the cost minus the residual value, which is $343,000 - $24,000 = $319,000. For 2021, the depreciation expense is the fraction 10/55 of the depreciable base because 10 is the highest year number in our series and 2021 is the first year.
Depreciation for 2021 = (10/55) × $319,000 = $58,000 (rounded to the nearest whole dollar)
For 2022, we use the next year's fraction, which is 9/55:
Depreciation for 2022 = (9/55) × $319,000 = $52,091 (rounded to the nearest whole dollar)
One Hundred Fifty Percent Declining Balance Method
This method involves multiplying the book value at the start of the year by a constant factor, which in this case is 150% divided by the service life (10 years).
Depreciation rate = 150% / 10 = 15%
Depreciation for 2021 = 15% × $343,000 = $51,450 (rounded to the nearest whole dollar)
For 2022, we subtract the first year's depreciation from the initial cost before applying the same rate:
Book value at the beginning of 2022 = $343,000 - $51,450 = $291,550
Depreciation for 2022 = 15% × $291,550 = $43,733 (rounded to the nearest whole dollar)
Partial-Year Depreciation Calculation (October 1, 2021 Purchase)
When the equipment is purchased partway through the year, depreciation is calculated for the number of months the asset is in service. For both methods, only 3 months of depreciation are recognized in 2021.
For SYD:
Depreciation for 2021 (3 months) = ($58,000 / 12) × 3 = $14,500 (rounded to the nearest whole dollar)
Depreciation for 2022 remains the same as if the asset were in service for the full year ($52,091).
For 150% Declining Balance:
Depreciation for 2021 (3 months) = ($51,450 / 12) × 3 = $12,862 (rounded to the nearest whole dollar)
Depreciation for 2022 will be calculated using the book value at the beginning of 2022 minus the partial depreciation from 2021. For the full calculation, we would follow the steps provided above, ensuring to account for the partial year.
Victim V works at a job where he might be exposed accidentally to a chemical that increases the probability from .01 to .02 of dying from lung cancer in 20 years. V would pay $15,000 to avoid exposure to this risk, or he would accept $15,000 to expose himself to this risk. No matter how hard he tries, V cannot imagine any sum of money that he would accept in ex- change for certain death by lung cancer. V’s employer accidentally exposes him to the chemical. The risk materializes after 20 years, and V dies abruptly from lung cancer. How much are Hand rule damages for V’s heirs? After exposure and before dying, V spent $1000 to move to another neighborhood with better air quality. Should $1000 be added to Hand rule damages, or is it already implicitly included?
Answer:
HAND RULE DAMAGES ARE : THEY EQUAL THE REASONABLE BURDEN OF PRECAUION DIVIDED BY THE RESULTING REDUCTION IN THE PROBABILIY OF HARM. AS V IS INDIFFERENT BETWEEN $15000 INCREASE AND AN INCREASE OF .01 IN THE PROBABILITY OF CANCER DEATH.
THUS HAND RULE DAMAGES ARE $15000 / 0.1 = $1.5 MILLION.
SINCE IT IS AN OBJECTIVE COST AND SINCE V WAS INDIFFERENT AS NO COST WAS ACCEPTABLE FOR HIS LIFE , SO IT IS IMPLICITLY INCLUDED
Explanation:
HAND RULE DAMAGES ARE : THEY EQUAL THE REASONABLE BURDEN OF PRECAUION DIVIDED BY THE RESULTING REDUCTION IN THE PROBABILIY OF HARM. AS V IS INDIFFERENT BETWEEN $15000 INCREASE AND AN INCREASE OF .01 IN THE PROBABILITY OF CANCER DEATH.
THUS HAND RULE DAMAGES ARE $15000 / 0.1 = $1.5 MILLION.
SINCE IT IS AN OBJECTIVE COST AND SINCE V WAS INDIFFERENT AS NO COST WAS ACCEPTABLE FOR HIS LIFE , SO IT IS IMPLICITLY INCLUDED.
Final answer:
Hand rule damages for Victim V's heirs would be $16,000, combining the $15,000 that V valued the increased risk of dying from cancer and the additional $1,000 spent on moving to an area with better air quality in an attempt to mitigate the risk.
Explanation:
The question involves calculating Hand rule damages, which are based on the economic principle of the Hand formula (B < PL) used to determine negligence and potential liability costs.
Here, we're given that Victim V would have paid $15,000 to avoid the increased risk of dying from lung cancer due to chemical exposure, representing the economic valuation of the risk. Therefore, if the accident increased the probability of death from 0.01 to 0.02 over twenty years, the increase in risk is valued at $15,000, which is the amount Victim V would have accepted to take on the risk.
As for the $1,000 spent on moving to a better air quality area, this is separate from the calculation of the Hand rule damages. The expense is a mitigation cost incurred post exposure to try and reduce the harm from the chemical exposure. Consequently, it should be added to the Hand rule damages as it represents an additional loss directly related to the exposure.
The total Hand rule damages for V's heirs would therefore be the $15,000 valuation of the risk of death plus the $1,000 mitigation cost, totaling $16,000.
Alloy Supply Co. has a new project that will require the company to borrow $3,000,000. Acme has made an agreement with three lenders for the needed financing. First National Bank will give $1,500,000 and wants 6% interest on the loan. Banner Bank will give $1,000,000 and wants 9% interest on the loan. Western National Bank will give $500,000 and wants 7% interest on the loan. What is the weighted average cost of capital to acquire the $3,000,000?
Answer:
The weighted average cost of capital to raise $3000000 is 7.17%
Explanation:
The weighted average cost of capital to acquire $3000000 is the weighted average of the cost of each financing option that the company will use to raise this amount. The weights of each option is the finance provided by the option divided by the total finance required. thus the weighted average cost of capital is,
Assigning the weights to each loan,
First National Bank = 1500000 / 3000000 = 1/2Banner Bank = 1000000 / 3000000 = 1/3Western National Bank = 500000 / 3000000 = 1/6Weighted average cost of capital = 1/2 * 0.06 + 1/3 * 0.09 + 1/6 * 0.07
Weighted average cost of capital = 0.07166 or 7.166% rounded off to 7.17%
When the Fed carries out contractionary monetary policy through selling bonds __________. Select the correct answer below: it reduces the supply of loanable funds which raises the interest rate it reduces the supply of loanable funds which lowers the interest rate it increases the supply of loanable funds which lowers the interest rate it increases the supply of loanable funds which increases the interest rate
Answer: it reduces the supply of loanable funds which raises the interest rate
Explanation: Contractionary monetary policy is a monetary policy that reduces the supply of money and increases interest rates and is carried out by the Fed through selling of bonds. This reduces the supply of loanable funds and increases the interest rate. It is driven by increases in the various base interest rates with a goal to reduce inflation by limiting the amount of active money in circulation.