Answer:
C. at the intersection of at least two constraints.
Explanation:
Every linear equation has an objective function, further it has the constraints.
In a linear equation when we find the value of constraints where, the value of at least two constraints shall meet, in order to find the solution.
This provides a solution set as when they intersect there are chances of solution, and accordingly even the objective function is easily achieved.
Accordingly the best set which fulfills the objective function where the constraints are also matching the criteria, there lies a solution set.
A fixed cost is a cost which
a. remains constant per unit with changes in the level of activity.
b. varies in total with changes in the level of activity.
c. remains constant in total with changes in the level of activity.
d. varies inversely in total with changes in the level of activity.
Answer:
The answer is c. remains constant in total with changes in the level of activity.
Explanation:
In a cost structure of a firm, for decision-making purpose, it is usually divided into fixed cost and variable cost.
Variable cost is the type of costs which will increase following an additional production of an extra unit of product/service, that is, level of activity has been risen up given the production is taken place. A good example of these cost are material cost, labeling cost.
Fixed cost, as it name may tell, is costs that are unchanged regardless of a firm's activities level. That is, regardless of how many product/service is produced, these costs remain the same. A good example of these cost are depreciation cost, rental cost.
A ____________ salesperson calls on people who make decisions about products but don't actually buy them, and while they call on individuals, the relationship is business-to-business.a. Tradeb.Missionaryc.Functionald.Prospector
Answer:
B)Missionary salesperson
Explanation:
A missionary salesperson usually contacts individuals that will influence the purchase decision of other individuals but not themselves.
It's easier to explain using an example; a salesperson contacts your high school teacher about a new textbook and then that teacher tells his students to buy the new textbooks. The missionary salesperson never contacted the actual customers of his textbooks, he contacted the individual that can influence their purchase decision. The same applies to pharmaceutical representatives that contact doctors so that they prescribe the drugs their company produces. The doctor is not the customer, but he will influence the purchase decision made by others.
The correct answer is b. A missionary salesperson calls on people who make decisions about products but don't actually buy them, and while they call on individuals, the relationship is business-to-business. They focus on promoting products and gaining support from decision-makers.
These salespeople focus on promoting the company's products and gaining the support of decision-makers who influence the buying process within organizations but do not make the final purchase themselves.
For example, a missionary salesperson might visit a hospital to inform doctors about new medical equipment. Although the doctors don’t make the purchases, their recommendations can influence the hospital's purchasing decisions.
A. Bank A offers a CD rate of 7% for 5 years.
B. Bank B offers a CD rate of 5% for 5 years.
C. Bank C offers a CD rate of 6% for 5 years with a $10 gas card as a perk.
Under which bank would you earn more interest on your money?
Answer:
A) Bank A offers a CD rate of 7% for 5 years.
Explanation:
Bank A offers the highest interest rate, 7% for five years.
Bank B offers the lowest interest rate, so that option should be eliminated.
Bank C offers a 6% interest rate for 5 years plus a $10 gas card. The gas card is just a perk with a very low value. For example, if you deposit $200 in bank A you will earn $10.20 more than if you deposited the money in bank C, and $200 is a very small amount of money for a business.
In the context of the contingency decision-making framework, _____ refers to the agreement among managers about the nature of an issue or opportunity and about which goals and outcomes to pursue.
Answer:
The correct answer is problem consensus.
Explanation:
The problem of consensus is a fundamental problem of distributed systems that consists in agreeing to multiple processes on something. It is the problem of finding out how a set of isolated computing processes that can only communicate with messages agree on something. Consensus is easy in the absence of failures but it becomes difficult in intricate scenarios of failure with the presence of imperfect channels, falls of participants, violation of synchronizations or even when some of them can conspire so that consensus does not occur (behavior malicious).
Barnes Company reports the following operating results for the month of August: sales $305,000 (units 5,000); variable costs $213,000; and fixed costs $71,700. Management is considering the following independent courses of action to increase net income. Compute the net income to be earned under each alternative1. Increase selling price by 10% with no change in total variable costs or sales volume. Net income ş______2. Reduce variable costs to 60% of sales. Net income.______3. Reduce fixed costs by $22,000. Net income s__________Which course of action will produce the highest net income?
Answer:
1. $30,500;
2. $30,000;
3. $22,000;
=> Option 1 produce the highest net income.
Explanation:
We have sell price per unit = 305K /5K = $61
1. Increase selling price by 10% with no change in total variable costs or sales volume:
Sell price = 61 x 1.1 = $67.1
Sales revenue = 67.1 x 5,000 = $335,500
Increase in sales revenue = 335.5K - 305K = $30,500
As costs remains the same, Net income will increase as much as the increase as sales revenue which is $30,500.
2. Reduce variable costs to 60% of sales:
New variable cost = $305,000 x 60% = $183,000
Saving in variable cost = 213K - 183K = $30,000
As fixed cost and sales revenue remain the same, net income will increase as much as the saving in variable cost which is $30,000
3. Reduce fixed costs by $22,000:
As variable cost and sales revenue remain the same, net income will increase as much as the saving in fixed cost which is $22,000
To determine which course of action gives the highest net income for Barnes Company, we calculate the net income for each scenario. The highest net income, $50,800, is achieved with a 10% increase in selling price, compared to reductions in variable or fixed costs.
Explanation:The student's question involves computing the net income for Barnes Company under three different scenarios to determine which course of action would result in the highest net income. The scenarios include a 10% increase in selling price, a reduction in variable costs to 60% of sales, and a decrease in fixed costs by $22,000.
Based on the given data, the current net income can be calculated before considering the changes:
Current Net Income = Sales - Variable Costs - Fixed CostsCurrent Net Income = $305,000 - $213,000 - $71,700Current Net Income = $20,300For each scenario, the new net income must be calculated:
For the 10% increase in selling price, assuming no change in volume or variable costs, the new sales would be $305,000 * 110% = $335,500. Thus, the new Net Income = $335,500 - $213,000 - $71,700 = $50,800.If variable costs are reduced to 60% of sales, Net Income = Sales - (Sales * 60%) - Fixed Costs = $305,000 - ($305,000 * 60%) - $71,700 = $49,300.If fixed costs are reduced by $22,000, the new Net Income = $305,000 - $213,000 - ($71,700 - $22,000) = $42,300.Comparing the results, the highest net income of $50,800 is achieved when the selling price is increased by 10%.
An economics student makes the following statement: "It's easy to understand why the aggregate demand curve is downward sloping: When the price level increases, consumers substitute into less expensive products, thereby decreasing total spending in the economy." This statement is false because the aggregate demand curve is
Answer:
The aggregate demand curve is downward sloping because when the general level of price rise; the real wealth of consumers will decline (with a certain amount of money you end up buying less goods), the interest rates will increase (as inflation increases, interest rates also increase), and the price of exported goods increases (as the general price of goods increase, the production of goods will also become more expensive).
The Net Promoter Score measures: Group of answer choices the degree to which a viewer promotes the product. revisits to the product website. satisfaction. loyalty. the number of likes on a product page.
Answer:
The Net Promoter Score measures: (A) the degree to which a viewer promotes the product, (C) satisfaction and its (D) loyalty.
Explanation:
Net Promoter Score or NPS is a variety of index that is given to the customers of a product or service by the brands to know how they feel about the product and the brand. Primarily, the NPS is concentrated on understanding how much the customer is willing to promote or recommend the company's product or service to others. Additional fields that the NPS targets are customer satisfaction and how much the customers are loyal to the brand.
Hence, alternatives A, C, and D are correct for the Net Promoter Score.
A frim must choose its ______ carefully; if its picks too narrow a set it may fail to reach the volume of sales it needs but if it selects too broad a set, it may spread its marketing efforts too thin
Answer:
target markets
Explanation:
Based on the information provided within the question it can be said that the firm must choose it's target markets carefully. In the context of marketing, target markets are the population of consumers that the marketing is aimed towards convincing them to buy the company's product. Choosing the right market would lead to an explosion in sales, but the opposite would completely kill a products sales.
Pacific Rim Co. sells outdoor furniture, garden and patio accessories, baskets, floral arrangements, and pottery to retail garden nurseries. Its salespeople are known as_________.a.distributor salespeople.b.runners.c.retail salespeople.d.manufacturers' agents.e.trade salespeople.
Answer:
Letter e is correct. Trade salespeople
Explanation:
Trade salespeople have the main features to help the retailer to perform all sales steps, from product exposure, advertising, pricing and sale process to the end consumer.
Its goal is to devise effective sales process strategies that direct the retailer to prospect customers and increase profitability.
Which of the following are true?
a. Ideally, we should use book values in the WACC.
b. Book values are often similar to market values for equity.
c. Ideally, we should use market values in the WACC.
d. The market value of debt and equity are not reliable in case of privately owned company.
In terms of the WACC, market values rather than book values should ideally be used, except for privately owned companies where market values can be unreliable. Early-stage corporate finance involves choosing funding methods based on a company's size and maturity. Bonds and bank loans are similar forms of debt but differ in terms of tradeability and terms.
Explanation:Understanding WACC and Early-Stage Corporate FinanceThe ideal use in calculating the Weighted Average Cost of Capital (WACC) is market values rather than book values. This is because market values generally provide a more accurate assessment of the actual cost of capital. Book values do not usually represent the true economic value as they are based on historical costs minus depreciation. Therefore, the correct statements in the question are:
Addressing the self-check questions on early-stage corporate finance:
From a firm's point of view, a bond is similar to a bank loan in that both represent debt and require regular interest payments. However, bonds often have longer terms and can be traded on the secondary market, unlike traditional bank loans.
Regarding the calculation of home equity:
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Boomer Biscuit Inc. needs to automate its production line. The project costs $275,000 and is expected to provide after-tax cash flows of $73,306 for eight years. Management estimates its cost of capital as 12 percent. What is the project’s MIRR? (Do not round intermediate computations. Round final answer to the nearest whole percent.)
A. 14%
B. 16%
C. 18%
D. 12%
Answer:
MIRR = 16%
so correct option is B. 16%
Explanation:
given data
project costs = $275,000
after tax cash flows = $73,306
time = 8 year
cost of capital = 12 percent
to find out
What is the project’s MIRR
solution
we first find here Future value of annuity that is express as
Future value of annuity = [tex]A * \frac{(1+r)^t - 1}{r}[/tex] ............1
here A is annuity and r is rate and t is time period
put here value
Future value of annuity = [tex]73306 * \frac{(1+0.12)^8 - 1}{0.12}[/tex]
Future value of annuity = 901641.30
so MIRR will be here
MIRR = [tex](\frac{FV}{PV})^{\frac{1}{t}} - 1[/tex] ................2
here FV is future value and PV is present value and t is time period
put here value
MIRR = [tex](\frac{901641.30}{275000})^{\frac{1}{8}} - 1[/tex]
MIRR = 16%
so correct option is B. 16%
A publisher of photography books finds that it is cost-effective to print 10,000 or more at a time. But abookstore orders only a few copies of each book since its customers want to select from a wide variety.This example shows:a. why discrepancies of quality occurb. why both discrepancies of quantity and assortment occurc. neither discrepancies of assortment or quantityd. why discrepancies of assortment occure. multichannel distribution
Answer:
B) why both discrepancies of quantity and assortment occur
Explanation:
The assortment and quantity of products that the publisher's customers want sometimes may be very different than the assortment and quantity that the companies would be willing to produce in order to lower its costs and increase its profits.
For example, the publisher would save money if it could print 10,000 books, but its clients only buy a few books at a time.
Luca's Foods has outstanding 650 shares of 1% preferred stock, $100 par value; and 1 comma 800 shares of common stock, $ 25 par value. Luca's declares dividends of $ 15 comma 300. What is the correct entry?
Answer:
The correct entry is:
Dr Retained Earnings 15,300
Cr Preferred stock - Dividend payable 650
Cr Common stock - Dividend payable 14,650
(to record the declaration of $15,300 dividend payment to 650 preferred stocks and 1,800 common stocks)
Explanation:
Please find the detailed calculations which are shown as below:
Dividend paid to preferred stocks = Number of preferred stocks outstanding x interest rate in preferred stock x par value of preferred stock = 650 x 1% x 100 = $650 .
Dividend paid to common stocks = Total Dividend paid declaration - Dividend paid to preferred stocks = 15,300 - 650 = $14,650 .
A company's Cash account shows an ending balance of $4,600. Reconciling items included a bookkeeper error of $130 (a $500 check recorded as $630), two outstanding checks totaling $830, a service charge of $25, a deposit in transit of $250, and interest revenue of $30. What is the adjusted book balance?
A. $5,180
B, $4,020
C. $4,465
D. $4,735
Answer:
The answer is D. $4,735
Explanation:
Please find the below for detailed calculation and explanations:
The adjusted book balance = Ending balance of cash account + Bookkeeper error - Service charge + Revenue = 4,600 + 130 - 25 + 30 = $4,735
The reason why outstanding checks and deposit in transit are ignored is they were already recorded in accounting book at the time the transactions took place, thus, the book balance has not been wrongly recorded.
Judy's Boutique just paid an annual dividend of $1.48 on its common stock and increases its dividend by 2.2 percent annually. What is the rate of return on this stock if the current stock price is $29.60 a share?
Answer:
7.31%
Explanation:
Data provided in the question:
Annual dividend paid, D0 = $1.48
Dividend growth rate, g = 2.2% = 0.022
Current stock price per share = $29.60
Now,
Current price of share = D1 ÷ (r - g) .........(1)
Here,
r is the required rate of return
D1 = dividend at year 1 = D0 × (1 + g)
= $1.48 × (1 + 0.022)
= $1.51256
Therefore, from (1) we get
$29.60 = $1.51256 ÷ (r - 0.022)
or
(r - 0.022) = 0.0511
or
r = 0.0511 + 0.022
or
r = 0.0731
or
r = 0.0731 × 100% = 7.31%
To calculate the rate of return on Judy's Boutique's stock, the dividend yield is first determined by dividing the $1.48 annual dividend by the $29.60 stock price, resulting in approximately 5%. Adding the annual dividend growth rate of 2.2%, the estimated total rate of return is 7.2%.
Explanation:To calculate the rate of return on Judy's Boutique's stock, we must consider both the dividend yield and the dividend growth rate. The dividend yield is calculated by dividing the annual dividend by the current stock price. In this case, it would be $1.48 divided by $29.60, which equals approximately 0.05 or 5%.
Since the dividends are increasing annually by 2.2%, this growth rate must be added to the initial yield to estimate the total rate of return. Thus, the total rate of return is the sum of the initial dividend yield plus the dividend growth rate, which in this case would be 5% + 2.2% = 7.2%.
However, if we only want to calculate the rate of return for the next year without considering continuous growth, we would only consider the initial dividend yield as the rate of return for one year. For multi-year investments, the dividend growth rate should be compounded annually, which requires more complex calculations. Still, for a basic one-year outlook, the rate of return is approximately 5%.
Assume a company buys a machine worth $1 million and pays for it by borrowing the funds from a bank. The firm's assets will rise by $1 million and its liabilities will also rise by $1 million. Owners' equity will not change.a. true.b. false.
Answer:
True
Explanation:
When machine is purchased, then the assets increase by the carrying or purchase value of the machine purchased. Here, it is of $1 million.
Further, when it is purchased as against any credit, it creates a liability with the same amount.
Since here also the liability amount = $1 million, it will be recorded with the same.
As there is no involvement of Equity or Retained earnings this do not lay any impact on carrying value of owners equity.
Thus, it is True.
In 2016, Chartres Inc., issued for $105 per share, 60,000 shares of $100 par value convertible preferred stock. One share of preferred stock can be converted into three shares of Chartre's $25 par value common stock at the option of the preferred stockholder. In April 2017, all of the preferred stock was converted into common stock. The market value of the common stock at the date of the conversion was $30 per share. What total amount should be credited to additional paid-in capital from common stock as a result of the conversion of the preferred stock into common stock?
Answer:
Total amount should be credited to additional paid-in capital from common stocks as a result of the conversion of the preferred stock into common stock: $1,800,000 .
Explanation:
Please find the detailed calculations and explanations as below:
Total Cash amount received from preferred share issuance: 105 x 60,000 = $6,300,000;
The $6,300,000 will be credited into two owner's equity account:
- Common equity = Par value of common stock at the issuance of preferred stock date x Number of preferred stocks issued x Number of common stocks that one preferred stock has the right to converted into = 25 x 60,000 x 3 = $4,500,000.
- Paid-up capital account = Amount of cash receipt ( recorded as Debit) - Amount of common equity ( recorded as Credit) = 6,300,000 - 4,500,000 = $1,800,000 .
Final answer:
The total amount credited to additional paid-in capital from the conversion of preferred stock to common stock is $900,000.
Explanation:
Total additional paid-in capital: $900,000
To calculate the additional paid-in capital from the conversion of preferred stock into common stock, multiply the number of preferred shares issued by the difference between the par value and the market value of the common stock after conversion:
Preferred shares issued: 60,000
Difference in par value and market value per share: $30 - $25 = $5
Additional Paid-in Capital: 60,000 shares x $5 = $300,000
Since each preferred share can be converted into 3 common shares, the total additional paid-in capital from the conversion: $300,000 x 3 = $900,000
In the securitization process, mortgages are pooled together and cash flows are packaged into securities to be sold in the secondary market. Agencies and private companies that pool mortgages and sell mortgage-backed securities (MBS) are often referred to as:
A. thrifts
B. credit unions
C. conduits
D. automated underwriters
Answer: Option (C)
Explanation:
Mortgage-backed security is referred to as an investment which is quite similar to the bond that is formed from the accumulation of home loan which are bought from several commercial banks. The investors indulged in the Mortgage Based Security tend to earn a periodic payment which are similar to the bond coupon. These securities are often referred to as the conduits.
Assume Amanda always maximizes her total utlity given her budget constraint. Every morning for breakfast she has two eggs and three sausages. If the marginal utility of the last egg is 10 utils and the price of eggs is $1 each, what can we say about the marginal utility of the last sausage if the price of each sausage is $2? a. It must be equel to 1 utils. B. It must be equal to 5 utills.C. It must be equal to 20 utls.D. It must be equal to 10 utls
Answer:
option C. It must be equal to 20 utls
Explanation:
Given:
The marginal utility of the last egg = 10 utils
Price of eggs = $1 each
Price of each sausage = $2
Now,
Total Utility is maximized when the combination of goods is
[tex]\frac{\textup{Marginal Utility of egg}}{\textup{Price of egg }}[/tex]= [tex]\frac{\textup{Marginal Utility of Sausage}}{\textup{Price of Sausage }}[/tex]
or
10 ÷ 1 = Marginal Utility of Sausage ÷ 2
or
Marginal Utility of Sausage = 10 × 2 = 20 utls
Hence,
the correct answer is option C. It must be equal to 20 utls
Final answer:
Amanda maximizes her utility by ensuring that the marginal utility per dollar spent on each item she consumes is the same. So, if the marginal utility of the last egg is 10 utils with a $1 price, the marginal utility of the last sausage must be 20 utils, given that each sausage costs $2. Option C
Explanation:
When an individual is said to maximize total utility given their budget constraint, this implies that they should allocate their budget in a way that the marginal utility per dollar spent is equal across all goods they consume. The marginal utility per dollar is calculated by dividing the marginal utility of the last unit consumed by the price of the good.
Given that the marginal utility of the last egg consumed is 10 utils and the price of eggs is $1 each, the marginal utility per dollar spent on eggs is 10 utils per dollar. Amanda consumes sausages that cost $2 each. To maximize utility, the marginal utility per dollar spent on sausages should be equal to that of eggs. Therefore, the marginal utility of the last sausage must be 20 utils (since 20 utils divided by the $2 price of sausages equals 10 utils per dollar, the same as eggs).
Barbara solicits input from her subordinates before making decisions that will affect them. She often praises them for good work and gently offers suggestions to improve their performance. Barbara uses the ________ style of leadership.
A) autocratic
B) participative
C) democratic
D) supportive
Answer:
Letter B is correct. Participative.
Explanation:
The participative leadership style is characterized by a leader whose focus is on including employees in most of the organizational decision making process. It is a type of leadership that prioritizes teams and their decisions are relevant to the point of establishing a majority vote in the company to assist in organizational issues and actions.
There are many added benefits in organizations that adopt a participatory leadership style, some of which are:
Greater acceptance of consensus-based practices and policies. Employees feel valued and motivated to achieve organizational goals because they feel they are part of the company's achievements. Encourages employee creativity and collaboration in problem solving. Decreases turnover and turnover costs as employees choose to stay with the company to see their plans assist in organizational success.What strategy involves adapting products and their marketing strategies to national markets to suite local preferences?
Answer: Multinationals strategy
Explanation: In simple words, multinational strategy refers to the advertising strategy under which a company promote its products and services all around the world.
However the promotion techniques and tools that the company uses differentiates from country to country. As every country have different social, political and environmental factors, advertisement and promotion are done in a way that the local audience can relate to it.
For example - Pepsi and coke operate their business in more than 150 countries and have different promotional slogans for each of them.
Abbe Corporation uses activity-based costing. The company makes two products: Product A and Product B. The annual production and sales of Product A is 800 units and of Product B is 600 units.
There are three activity cost pools, with total cost and activity as follows:
Activity Cost Pool
Activity 1- $17,460
Activity 2- $19,987
Activity 3- $29,884
Total Activity
Product A 600 1,700 40
Product B 600 600 120
Total 1,200 2,300 520
What are the activity rates for activites 1, 2 and 3?
What is the cost per unit for Product A and B?
Answer:
Activity Rates are:
1 = $14.55 per activity
2 = $8.69 per activity
3 = $57.47 per activity
Cost per product
A = $32.2525
B= $34.7333
Explanation:
As for the provided information,
There are three activities.
Activity 1 = $17,460 and total = 1,200
Rate of activity = $17,460/1,200 = $14.55 per activity
Activity 2 = $19,987 and total activity = 2,300
Rate of activity = $19,987/2,300 = $8.69 per activity
Activity 3 = $29,884 and total activity = 520
Rate of activity = $29,884/520 = $57.47 per activity.
Costs of each product
Product A = ($14.55 [tex]\times[/tex] 600) + ($8.69 [tex]\times[/tex] 1,700) + ($57.47 [tex]\times[/tex] 40)
= $8,730 + $14,773 + $2,298
= $25,801
Cost per unit = $25,802/800 = $32.2525
Product B = ($14.55 [tex]\times[/tex] 600) + ($8.69 [tex]\times[/tex] 600) + ($57.47 [tex]\times[/tex] 120)
= $8,730 + $5,214 + $6,896
= $20,840
Cost per unit = $20,840/600 = $34.73
Most companies today want their salespeople to _______, which means demonstrating and delivering superior customer value and capturing a return on that value that is fair for both the customer and the company.
A. practice value selling
B. use a transaction-oriented sales approach
C. close sales
D. cut prices to make the sale
E. capture short-term business
Answer: practice value selling
Explanation: companies wants their sales representatives to practice value selling, which involves them highlighting the benefits of buying the product and the value it would add to its buyer.
This ensures that both the buyer and the sales company both benefits from the product sales.
As long as the associate editors at Zeal Publishing accurately proofread at least 100 pages of manuscript each day, they are free to come up with their own schedules and work styles to achieve their daily goal. Zeal Publishing appears to follow a _____ system.A) self-control
B) concertive control
C) behavior control
D) normative control
Answer:
Letter A is correct. Self-control.
Explanation:
An executive self-control system is one that is used by the individual himself to regulate his behaviors so that certain goals and results are achieved. Through mind processes, we are able to develop focus and planning skills.
that assist in performing various tasks effectively. The added benefits of self-control are related to the ability to set priorities, achieve personal motivation and skills that will help identify the best choices for our needs.
When Toyota introduced its Scion line of cars, the lowest-price model was listed for $15,000 while the highest-priced model was listed for $21,000, with two other list prices in between. Each price point represented distinct differences in the features and quality of the cars. Toyota used a ________ pricing approach.
A. market penetration
B. zoneC.price lining
D. loss leader
E. noncumulative quantity discount
Answer: C- Price Lining
Explanation: Price Lining is a strategy by sellers of a particular product by classifying their products into different classes, qualities and prices.
Price lining helps consumers of these product to choose the product that is close to their taste and price power.
It gives sellers a good market share as different categories of consumers will be taken care of with this strategy and thereby increasing their sales and market acceptability.
The Morton Company uses the periodic inventory system. During the month of September, the beginning inventory consisted of 4,800 units that cost $12 each. Two purchases were also made by the company that month. The first was for 2,000 units at $13 each, and the second for 8,000 units at $13.50 each. Additionally, Morton sold 8,600 units during the month. If the average cost method is used (rounding unit costs to the nearest cent), the amount of cost of goods sold will be________
Answer:
The cost of good sold for 8,6000 units will be $111,335.60.
Explanation:
Please find the below for detailed explanations and calculations:
As Morton uses average cost method, the unit cost will be the same for each unit and equal to (total inventory purchase cost + cost for beginning inventory)/ ( beginning inventory + inventory purchased)
As a result, we have Unit cost = (2,000 x 13 + 8,000 x 13.50 +4,800 x 12) / (2,000+8,000+4,800) = $12.946 per unit
Thus, Cost of good sold of 8,600 units is 12,946 x 8,600 = $111,335.60.
Using the average cost method, the cost of goods sold for the Morton Company during the month of September is $111,370. This is calculated by first determining the total cost of all inventory, finding the average cost per unit, and then multiplying it by the number of units sold.
To calculate the cost of goods sold using the average cost method with a periodic inventory system, we must first total the cost of all purchases and the beginning inventory, then divide that amount by the total number of units available for sale to find the average cost per unit. Finally, we multiply the average cost per unit by the number of units sold.
For the Morton Company:
Beginning inventory: 4,800 units at $12 each = $57,600
First purchase: 2,000 units at $13 each = $26,000
Second purchase: 8,000 units at $13.50 each = $108,000
Total cost of available inventory: $57,600 + $26,000 + $108,000 = $191,600
Total units available for sale: 4,800 + 2,000 + 8,000 = 14,800 units
Average cost per unit: $191,600 / 14,800 units = $12.95 per unit (rounded to the nearest cent)
Cost of goods sold: 8,600 units sold x $12.95 average cost per unit = $111,370
Therefore, using the average cost method, the cost of goods sold for the Morton Company for the month of September would be $111,370.
Suppose two cities are considering tearing down their stadiums to build new ones. In one city, the old stadium cost $5 million to build, while in the other city, the old stadium cost $50 million to build. If all else is equal, what can we say about how the costs of the old stadiums should affect the cities’ decisions?Choose one:A. They should be more willing to tear down the $5 million stadium, because it cost less to build.B. They should be more willing to tear down the $50 million stadium, because it cost more to build.C. The cost to build the old stadium shouldn’t be considered.
Answer:
The correct answer is option C.
Explanation:
Two cities are planning to demolish their old stadiums and build new ones.
Keeping everything else equal, the old stadium cost $5 million to build in one city and $50 million to build in the other.
These construction costs are sunk costs that have been incurred and cannot be recovered. Since these costs cannot be any longer recovered they should not be considered in deciding future investments.
The cost of the old stadiums should not affect the cities' decisions to tear them down for new constructions, focusing instead on potential future benefits and costs. This is due to the economic principle of the sunk cost fallacy, emphasizing forward-looking considerations.
Explanation:When considering whether two cities should tear down their stadiums to build new ones, the cost of building the old stadiums is a common consideration. However, the correct approach, from an economic perspective, is that the cost to build the old stadiums should not be considered. This concept is known as the sunk cost fallacy, which suggests that money already spent should not affect decision-making about future expenditures. Therefore, the decision to tear down and rebuild a stadium should be based on the potential benefits and costs moving forward, not on the historical costs of the old stadiums.
Both proponents and critics of building new sports stadiums argue about the impact on local economies. Proponents claim that new stadiums boost the economy by creating jobs and attracting spending. Conversely, critics argue that such projects are essentially corporate welfare, where public funds support private ventures with questionable return on investment for the community. Ultimately, the decision should focus on future economic and community benefits, rather than past expenses.
After Sunshine Systems merged with RTD Enterprises, company executives noticed that due to increased employee collaboration between the two units, costs were down and revenues increased within both areas. This is an example of what business phenomenon?
Answer:
Decrease in costs and increase in revenues due to increased collaboration between the two units is an example of "synergy".
Explanation:
Synergy occurs after a merger or acquisition. When two organizations merge and become one larger organization, then employees work together to achieve efficiency which results in a decrease in costs or increase in revenues.
In such a case, the resulting organization makes more profit than the two organizations would have been able to make, on their own, before they merged.
This is known as "synergy".
The financial statements of the Phelps Manufacturing Company reports net sales of $600,000 and accounts receivable of $80,000 and $40,000 at the beginning of the year and end of year, respectively. What is the accounts receivable turnover for Phelps?
a. 10.0 times
b. 15.0 times
c. 7.5 times
d. 5.0 times
Answer:
Average receivables = 10 times
so correct option is a. 10.0 times
Explanation:
given data
net sales = $600,000
at the beginning accounts receivable = $80,000
end of year accounts receivable = $40,000
to find out
What is the accounts receivable turnover
solution
we get here Accounts receivables turnover that is express as
Accounts receivables turnover = Net sales ÷ Average receivables ..............1
we know here
put here value we get
Average receivables = (Beginning receivables + Ending receivables) ÷ 2
Average receivables = [tex]\frac{80000+40000}{2}[/tex]
Average receivables = 60000
so from equation 1
Average receivables = [tex]\frac{600,000}{60000}[/tex]
Average receivables = 10 times
so correct option is a. 10.0 times
The Fed funds rate is the rate that
A. banks charge for loans to corporate customers.
B. banks charge to lend foreign exchange to customers.
C. the Federal Reserve charges on emergency loans to commercial banks.
D. banks charge each other on loans of excess reserves.
E. banks charge securities dealers to finance their inventory.
Answer:
Option (D) is correct.
Explanation:
The federal funds rate refers to a interest rate that is charged from one financial institution by the other financial institution for lending funds which are kept with the federal reserve in the form of excess reserves. It plays a very important in making an impact on the financial and economic conditions of a nation. Fed rate is normally associated with the most creditworthy financial institutions.