Answer:
Cost of goods sold = $573,000
Gross Profit = $177,000
Explanation:
Data provided in the question:
Purchases = $600,000
Purchase Returns and Allowances = $25,000
Purchases Discounts = $11,000
Freight-in = $19,000
Beginning inventory = $45,000
Ending inventory = $55,000
Net sales = $750,000
Now,
Total Goods Available for Sale =
Beginning Inventory + Purchases + Freight-In - Purchase Returns and Allowances - Purchases Discounts
= $45,000 + $600,000 + $19,000 - $25,000 - $11,000
= $628,000
Thus,
Cost of goods sold = Total Goods Available for Sale - ending inventory
= $628,000 - $55,000
= $573,000
Gross Profit = Net sales - Cost of goods sold
= $750,000 - $573,000
= $177,000
To determine the cost of goods sold and gross profit for Mitchell Company, we calculated the COGS as $673,000 by adjusting the beginning inventory by purchases, returns, allowances, discounts, freight-in, and ending inventory. The gross profit was then found by subtracting COGS from net sales, resulting in $77,000.
To determine the cost of goods sold (COGS) and gross profit for Mitchell Company, we start by calculating the COGS using the following formula:
Begin with the beginning inventory: $45,000.
Add purchases: $600,000.
Subtract purchase returns and allowances: $25,000.
Subtract purchase discounts: $11,000.
Add freight-in: $19,000.
Subtract the ending inventory: $55,000.
COGS = Beginning Inventory + Purchases - Purchase Returns and Allowances - Purchase Discounts + Freight-in - Ending Inventory
COGS = $45,000 + $600,000 - $25,000 - $11,000 + $19,000 - $55,000
COGS = $673,000
Next, we calculate gross profit by subtracting COGS from net sales:
Gross Profit = Net Sales - COGS
Gross Profit = $750,000 - $673,000
Gross Profit = $77,000
The cost of goods sold to be reported is $673,000, and the gross profit is $77,000.
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
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.
Which of the following statements regarding leader-member exchange relationships is incorrect?
A) If a leader is unethical, employees may not want to have a relationship so as not to suffer from guilt by association.
B) All employees would like to have a positive relationship with their leader.
C) When high LMX employees succeed, leaders credit the efforts they put forward and their high level abilities.
D) A problem with a low-quality exchange relationship is that employees may not have access to a positive work environment.
Answer:
B) All employees would like to have a positive relationship with their leader.
Explanation:
The leader-member exchange relationship theory is based on the idea that leaders will develop an exchange relationship with their staff. How good or bad these exchange relationships are between the leader and his/her staff should influence how they perform and what decisions they make.
As in all relationships, not everything is positive and sometimes people (the leader or the staff) are not interested or willing to have a positive relationship with each other. For example, at school you will not necessarily be friends with everyone, nor would you want to be friends with everyone.
Final answer:
Option B) is incorrect. Not all employees desire a positive relationship with their leader.
Explanation:
The statement that is incorrect regarding leader-member exchange relationships is option B) All employees would like to have a positive relationship with their leader. Leader-member exchange (LMX) relationships vary among individuals and are based on mutual trust, respect, and communication between leaders and employees. While many employees strive for a positive relationship with their leader, it is not true that all employees would like this relationship.
Some employees may prefer a more transactional relationship based on completing tasks and meeting goals, rather than a close personal relationship with their leader. Therefore, option B) is incorrect as it overgeneralizes the desire of all employees to have a positive relationship with their leader.
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.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.
Sid, a director of Tech Software Company, learns that a Tech engineer has developed a new, exciting video game. Sid buys Tech stock and tells his friend Uri, who also buys Tech stock. When the new game is released three weeks later, Sid and Uri sell their stock for a big profit.
Sid would not be liable if he had waited to buy Tech stock until______
Answer:
Sid would not be liable if he had waited to buy Tech stock until "three weeks when the game was released".
Explanation:
Sid, by finding out about the development of a new and exciting video game, and then acting on that information by purchasing Tech stock, and also informing his friend Uri to do the same, has committed illegal insider trading.
He used non-public information (that had not yet been made available to the public) to make extra profit for himself and his friend, Uri.
If Sid had waited until the information became public three weeks later, before purchasing Tech stock, then he would not be liable for illegal insider trading.
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.
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
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).
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.
Levin and Co. is a group of oil refineries that has been in the news recently. The company had to stop production for over two weeks because their key supplier refused to sell them crude oil at the old prices. Even after rounds of negotiations, the supplier refused to give in to the demands of Levin and Co., and finally, the company had to acquire the raw material from the same supplier because alternative suppliers, though abundant, could not provide the quantities the company demanded at such short notice. This shows the role of ________ in increasing the power one enjoys.A. dependence.B. substitutability.C. alternatives.D. abundance.E. exchange
Answer:
A) dependence
Explanation:
Power and dependency are fundamental issues in supply chain management. When a firm has more potential suppliers, the bargaining power of the firm increases (due to greater competition). But if a firm has a small number of potential suppliers, then the bargaining power of the firm decreases.
In this case, Levin and Co. had no bargaining power over its supplier because it was totally dependent on it, it didn't have any alternative suppliers.
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.
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.
The present value (PV) of an investment is ________.
A. the amount that an investment would yield if the benefit were realized today
B. the amount by which the cash flow of an investment exceeds or falls short of the cash flow generated by the same amount of money invested at market rate
C. the difference between the cost of the investment and the benefit of the investment in dollars today
D. the amount you need to invest at the current interest rate to reminuscreate the cash flow from the investment
Answer:
A
Explanation:
Present Value relates to the amount that an investment would yield if the benefit were realized today. it is said to be the value of the future economic benefits an entity can generate
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.
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.
In the California general election, it is not unusual for a company to run an advertisement for/against a proposition stating that the proposition is good/bad for the economy and a waste of tax dollars/source of tax revenue. This would probably be considered a(n) ____________ ad
Select one:
a. Pioneeringb.
Coercing
c. Advocacy
d. Comparative
e. Trigger
Answer:
This would be considered as an Advocacy ad.
Explanation:
Company is running an advertisement to give an understanding to the general public about the proposition. The company is advocating the public in this scenario and also the proposition.
In a market economy, a high price will usually cause
A)producers to offer less and consumers to buy less.
B)producers to offer less and consumers to buy more.
C)producers to supply more and consumers to buy less.
D)producers to supply more and consumers to buy more.
Answer:
C) producers to supply more and consumers to buy less.
Explanation:
The typical supply curve is upward-sloping (higher price leads to higer quantity supplied) and the typical demand curve is downward sloping (higher price lower quantity demanded).
Price is a measure of how much one good can be exchanged for other things. Production incurred cost (tend to rise as more resources become harder to obtain) so to supply more suppliers will demand higher price. Purchasing higher price good means consumers have less money (less of other goods can be bought) consumer will buy less good at higher price.
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%
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).
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.
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.
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.
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.
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.
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".
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 .
"If I didn't have class tonight, I would save the $4 campus parking fee and spend four hours at work where I earn $10 per hour." The opportunity cost of attending class this evening is:
A. $0
B. $4
C. $40
D. $44
Answer:
Opportunity cost will be $44
So option (d) will be the correct option
Explanation:
We have given that if he is not going to class then he save $4 of campus parking fee
And he work for 4 hours at rate of $10 per hour
So his total earning will be = 4×$10 = $40
Now we have to find the opportunity cost
Opportunity cost will be given by
Opportunity cost = Earning +saving = $40+$4 = $44
So option (d) will be the correct answer
Final answer:
The opportunity cost of attending class in this scenario is $44, encompassing both the $4 parking fee and the $40 in wages not earned due to attending class instead of working. The correct option is d.
Explanation:
The student poses a situation where if they did not attend class, they would save a $4 parking fee and could work for four hours at their job, earning $10 per hour. To calculate the opportunity cost of attending class, we need to combine the parking fee and the wages they forego by attending class rather than working. The total opportunity cost is the sum of the $4 parking fee and the lost wages of $40 (4 hours at $10 per hour), which equals $44.
Thus, the correct answer to the question 'The opportunity cost of attending class this evening is:' would be D. $44.
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%.