Answer:
The correct answer is A
Required reserve is $1,300
Excess reserve is $700
Explanation:
Excess reserve is the capital reserve that is held by the financial institutions or the banks in excess or more of what is needed by the creditors, internal controls or the regulators.
So, it is the reserves banks need to keep above the legal requirements.
The required reserve is computed as:
Required reserve = Reserve ratio × Deposits
= 13% × 10,000
= $1,300
Excess reserve is computed as:
Excess reserve = Reserves - Required reserve
= $2,000 - $1,300
= $ 700
Excess reserves are funds that banks hold over and above the legal requirement set by the Federal Reserve. Based on the 13% reserve ratio and the bank's balance sheet, the required reserves are $1,300 and the excess reserves are $700.
Explanation:In response to your question, the excess reserves are reserves that banks hold in addition to the legal requirement. This means they surpass what's mandated by the Federal Reserve, and is not used for loans or investments. So, option A is correct in stating that excess reserves are the reserves banks keep above the legal requirement.
Looking at the bank's balance sheet with reserves of $2,000 and deposits of $10,000, you can calculate the required and excess reserves. Given that the required reserve ratio is 13%, the required reserves would be 13% of $10,000 which equals $1,300. Since the actual reserves are $2,000, the excess reserves would be $2,000 - $1,300 which equals $700.
So, the bank keeps required reserves of $1300 and excess reserves of $700.
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In order to establish criminal liability of the directors of a corporation:
a. a prosecutor need only establish that the corporation committed a crime.
b. a prosecutor must establish that the directors had criminal intent.
c. the corporation is liable for criminal acts but the directors are not liable.
d. none of the above
Answer:
a prosecutor must establish that the directors had criminal intent
An actuary at a mid-sized insurance company is examining the sales performance of the company's sales force. She has data on the average size of the policy ($ thousands) written in two consecutive years by 40 salespeople. She fits a linear model and finds the slope to be 1.10and the Upper R squared is 79.0%.She concludes that the predictions for next year's policy size will be quite accurate. Examine the data and comment on her conclusions.
Answer:
It is not quite accurate
Explanation:
The first factor is the Upper R squared, which is 79.0%.
this value should be more than 90% in order to get quite accurate, 80% is normal, and below 80% accuracy decreases notably.
It indicates that probably the linear model is not the best for this data, and it is neccesary to probe other non linear models.
b. Merchandise purchases were $53,000 and $86,000 for March and April, respectively. Typically, 20% of total purchases are paid for in the month of purchase with a 5% cash discount. The balance of purchases is paid for (without discount) in the following month.
Answer:
$58,740
Explanation:
The computation of the cash paid is shown below:
For March month
= March purchase × remaining percentage
= $53,000 × 80%
= $42,400
For April month
= April purchase × given percentage × after applying cash discount
= $86,000 × 20% × 95%
= $16,340
So, the total amount of cash paid would be
= $42,400 + $16,340
= $58,740
Simply we multiply the monthly percentage with their percentage criteria
Suppose you deposit $1400 cash into your checking account. By how much will checking deposits in the banking system increase as a result when the required reserve ratio is 0.110? The change in checking deposits is equal to: $nothing (enter your result rounded to the nearest dollar).
The rounded nearest dollar is [tex]\$12727.27[/tex]
Solution:
Deposit multiplier is a feature that explains how much money banks create when they loan money to borrowers.
The sum for the banks to lend is the amount of money kept by the banks above the appropriate balance.
It is the key element of a fractional banking reserve system.
Banks in the United States must meet Federal Reserve minimum requirements, but they can set higher deposits multiplier.
Change in deposit = [tex]\$1400[/tex]
RRR = 0.110
Change in the Money supply = (Change in the Monetary base) [tex]\times[/tex] (Money multiplier)
Money multiplier= [tex]1 \div \text{ reserve ratio }=\frac{1}{0.110}=9.091[/tex]
Change in money supply= [tex]1400\times9.091= \$12727.273[/tex] that is approximately 12727.27 dollars.
Final answer:
The checking deposits in the banking system will increase by $12,726
Explanation:
To determine the increase in checking deposits when the required reserve ratio is 0.110, we need to apply the money multiplier formula.
The money multiplier is calculated as 1 / required reserve ratio.
In this case, the money multiplier would be 1 / 0.110 = 9.09.
So, when you deposit $1400 cash into your checking account, the checking deposits in the banking system will increase by -
= $1400 x 9.09
= $12,726.
If neither restaurant cleans, each will earn $13,000; alternatively, if they both hire workers to clean, each will earn only $10,000. However, if one cleans and the other doesn't, more customers will choose the cleaner restaurant; the cleaner restaurant will make $18,000, and the other restaurant will make only $6,000.
Answer:
Please see attachment
Explanation:
Please see attachment . Please note that the question is not complete . I have found the a full question online to assist you .
The length of time it takes to produce a unit of output from the time raw materials are received until the good is delivered to finished goods inventory is called
a. velocity.
b. cycle time.
c. manufacturing cycle efficiency.
d. theoretical cycle time.
e. theoretical MCE.
Answer: Cycle time
Explanation: In simple words, cycle time refers to the total time period taken by an organisation to move a unit from its beginning process to the end process.
The beginning process starts from the purchase of raw materials for the production and it ends with the transfer of finished output to the customer.
Investors evaluate cycle time to evaluate the operational efficiency of a manufacturing firm and how safe it is to invest in the money in such firm. Also a firm having low cycle time will have more security over its liquidity.
Grieg Landscaping began construction of a new plant on December 1, 2017. On this date, the company purchased a parcel of land for $139,000 in cash. In addition, it paid $2,000 in surveying costs and $4,000 for a title insurance policy. An old dwelling on the premises was demolished at a cost of $3,000, with $1,000 being received from the sale of materials. Architectural plans were also formalized on December 1, 2017, when the architect was paid $30,000. The necessary building permits costing $3,000 were obtained from the city and paid for on December 1 as well. The excavation work began during the first week in December with payments made to the contractor in 2018 as follows: - March 1 - $240,000 - May 1 - $330,000 - July 1 - $60,000 The building was completed on July 1, 2018. To finance construction of this plant, Grieg borrowed $600,000 from the bank on December 1, 2017. Grieg had no other borrowings. The $600,000 was a 10-year loan bearing interest at 8%. Required: 1. Compute the balance in each of the following accounts at December 31, 2017, and December 31, 2018. (a) Land. (b) Buildings. (c) Interest Expense.
Answer:
Please see attachment
Explanation:
Please see attachment
In this scenario, the Land Balance for 2017 and 2018 is $143,000. The Buildings balance increases from $33,000 in 2017 to $663,000 in 2018, and the Interest Expense for 2018 is $48,000.
Explanation:At December 31, 2017, the balance in the Land account would be a sum of the purchase price of the land and directly attributable expenses like surveying costs minus the amount received from the sale of materials, which comes to $143,000 (i.e., $139,000 + $2,000 + $3,000 - $1,000).
The Buildings balance would be the costs related to the building's construction which includes the $30,000 architect fee and the $3,000 permit fee, thus totaling $33,000.
The Interest Expense account would not reflect any costs as the interest expenses for 2017 have not been included in the information provided.
At December 31, 2018, the balance in the Land account will remain the same as none of the given transactions affect this account. The Buildings account will increase by the addition of the excavation work payments (i.e., $240,000 + $330,000 + $60,000) leading to a total of $663,000. The Interest Expense would be 8% of $600,000 (the borrowed amount) as interest for the year giving us $48,000.
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Research on the interactionist perspective suggests:
Select one:
a. there is a consistent positive relationship between person/organization fit and job performance.
b. if there is a misfit between an individual and the organization, there are no extenuating circumstances that eliminate its impact.
c. organization culture is equally important to all individuals.
d. people who fit into their organization tend to be more satisfied with their jobs.
Answer:
Letter D is correct. People who fit into their organization tend to be more satisfied with their jobs.
Explanation:
Alternative D is correct because interactionist theory refers to the organic and environmental factors that directly influence each individual's perspective and development. It is believed that human beings take an active role in their own lives and use their life experiences, values and meanings to enhance their development.
Therefore when a collaborator feels part of an organization, his individual values and perspectives are appropriate to it, which according to interactionist theory, helps in its development and consequently personal satisfaction.
You can continue to use your less efficient machine at a cost of $8,000 annually for the next 5 years. Alternatively, you can purchase a more efficient machine for $12,000 plus $5,000 annual maintenance. At a cost of capital of 15%, you should
a. purchase & save $600 in equivalent annual costs
b. purchase save $388 in equivalent annual costs
c. keep old machine and save $388 in equivalent annual costs
d. keep old save $580 in equivalent annual costs
Answer:
The correct answer is
D) keep old machine and save $580 in equivalent
good luck ❤
The correct choice is 3. Given the cost and maintenance calculations for both machines, continuing to use the old machine saves $388 in equivalent annual costs. Therefore, the best decision is to keep the old machine.
The correct choice is 3. To decide whether to continue using the less efficient machine or to purchase a more efficient one, we need to compare their costs in present value terms over the next 5 years.
Current Machine:
Annual Cost: $8,000Duration: 5 yearsCost of Capital: 15%Using the formula for the present value of an annuity (PVA), we calculate:PVA = C * [1 - (1 + r)^-n] / r, where C = $8,000, r = 0.15, and n = 5.PVA = 8000 * [1 - (1 + 0.15)^-5] / 0.15 = $26,100.67New Machine:
Initial Cost: $12,000Annual Maintenance: $5,000Duration: 5 yearsCost of Capital: 15%First, calculate the PVA of the maintenance costs:PVA = 5000 * [1 - (1 + 0.15)^-5] / 0.15 = $16,312.92Total Cost = Initial + PVA of Maintenance = $12,000 + $16,312.92 = $28,312.92Equivalent Annual Cost (EAC):
EAC converts total present value cost into an annual figure.For Current Machine: EAC = (r * PV) / [1 - (1 + r)^-n]EAC_current = (0.15 * 26100.67) / [1 - (1 + 0.15)^-5] = $8,004.50For New Machine: EAC = (r * PV) / [1 - (1 + r)^-n]EAC_new = (0.15 * 28312.92) / [1 - (1 + 0.15)^-5] = $8,393.00The EAC for the current machine is $388 less than that for the new machine, so you should keep the old machine and save $388 in equivalent annual costs. Hence, option (c) is correct.
If the price level recently increased by 20% in England while falling by 5% in the United States, what must be the new exchange rate if PPP holds?
Assume that the current exchange rate is 0.54 pound per dollar.
Answer:
The correct answer is 0.675 pounds per US dollars.
Explanation:
The price level in England increased by 20% and fell by 5% in the US.
This implies that the US dollars appreciated by
= 5% + 20%
= 5%
This means that 25% more pounds will be required to purchase the same basket of goods in the US.
So, the exchange rate is
= [tex]1.25 \times \frac{0.54}{1}[/tex]
= 0.675 pounds per US dollars
A Puppy Pet Services $1,000 bond has a 7.5 percent coupon rate, matures in 2016, and is currently quoted at $820. The current yield is:A. 6.15 percent. B. 7.50 percent. C. 9.15 percent. D. 10.27 percent. E. 11.43 percent.
Answer:
Option (C) is correct.
Explanation:
Face Value = $1,000
Current Price = $820
Annual Coupon Rate = 7.50%
Annual Coupon = Annual Coupon Rate × Face Value
= 7.50% × $1,000
= $75
Current Yield = Annual Coupon ÷ Current Price
= $75 / $820
= 0.0915 or 9.15%
Final answer:
The current yield of the bond is C. 9.15 percent.
Explanation:
The current yield can be calculated by dividing the annual coupon payment by the bond's current market price.
In this case, the bond has a $1,000 face value and a 7.5 percent coupon rate, which means the annual coupon payment is -
= ($1,000 * 0.075)
= $75
The bond is currently quoted at $820, so the current yield is -
= ($75/$820) * 100
= 9.15
When General Motors first began selling its Chevy Novas in Mexico, it could not understand the low sales volume at first. Then, GM discovered that the word, "no va" in Spanish means "something that does not go." Would you buy a car that does not go? This is a prime example of which way to avoid misunderstandings? A. Biases in paying attention B. Cultural similarities C. Choosing the simple, basic word(s) D. Separating facts from inferences
Answer:
The correct answer is letter "B": Cultural similarities.
Explanation:
Cultural similarities refer to customs and special terms that for one region or country are widely accepted but not for others. Those actions or phrases could be exactly the same but carry a different or even negative meaning in different places. This is not limited to actions and terms used in day-to-day activities but also under formal circumstances.
Jeremy, a manager, calls for a meeting with his subordinate, Nadia, to discuss a new project. When she gives her opinion, Jeremy summarizes it to ensure that he has understood Nadia's point the way she meant it. In which of the following practices leading to effective communication is Jeremy involved?a. filteringb. reflectionc. encryptingd. groupthink
Jeremy is involved in reflection .
Option B
Explanation:
It represents the paraphrasing process which reflects both the speaker's thoughts and words. The goal of reflection is:
Let the presenter ' hear ' his own words and reflect on what they suggest and sound. To convince the presenter that you see the universe as they see it and do the best to understand its messages.
In order to encourage them to speak.
Reflecting doesn't really involve asking the questions; introduce a new topic, or contributing a conversation in a different direction. Speakers are encouraged to learn because they can not only feel heard, but can also concentrate their thoughts. In effect, it allows them to think and encourage them to speak more.
Barbara is a producer in a monopoly industry. Her demand curve, total revenue curve, marginal revenue curve, and total cost curve are given as follows: Q = 160minus4P TR = 40Qminus0.25Q2 MR = 40minus0.5Q TC = 4Q MC = 4 Refer to Scenario 1. The price of her product will be
A. $32.
B. $4.
C. $42.
D. $22.
E. $72.
Answer:
D
Explanation:
Profit is Maximize when MR = MC
since MR=40 - 0.5Q
and MC= 4
Therefore:
40-0.5Q = 4
-0.5Q = 4 - 40
-0.5Q= -36
divide through by -0.5
Q = 72
since Q = 72
from Q = 160 - 4p
72 = 160 - 4P
-4p = 72 - 160
-4P = -88
divide through by -4
P = 22
A stock’s price fluctuations are approximately normally distributed with a mean of $29.51 and a standard deviation of $3.87. You decide to sell whenever the price reaches its highest 20% of values. What is the highest value you would still hold the stock?
Answer:
The highest value you would still hold the stock is $32.76
Explanation:
Hi, since the highest 20% of the values means the highest limit of 80% of the data, we have to use MS Excel or a normal distribution table to find the value of Z, and then use the following formula.
[tex]Value=Mean+Z(S.D)[/tex]
S.D = Standard deviation
Z = Normal Distribution parameter (in our case, 0.84)
Everything should look like this.
[tex]Value=29.51+0.84(3.87)=32.76[/tex]
Therefore, the highest value in which you would still hold the stock would be $32.76
Best of luck.
Consider the following simplified balance sheet of a commercial bank: ASSETS LIABILITIES Vault cash $200 $3500 Deposits Deposits at the Federal Reserve $300 Loans $3000 The required reserve ratio is 10 percent. Find Actual Reserves $ , Required Reserves $ , and Excess Reserves $ . By how much can this bank increase its loans? $ What is the money (deposit) multiplier equal to? By how much can the entire banking system expand their loans? $ How much new wealth is directly created from this expansion of deposits? $
Answer:
Check the following calculations
Explanation:
(a)
Actual Reserves = Vault cash + Deposits at the Federal Reserve
Actual Reserves = $200 + $300
Actual Reserves = $500
The actual reserves are $500.
Calculate Required Reserves -
Required Reserves = Deposits * Required reserve ratio
Required Reserves = $3500 * 0.10 = $350
The required reserves are $350.
Calculate Excess Reserves -
Excess reserves = Actual reserves - Required Reserves
Excess reserves = $500 - $350 = $150
The Excess reserves are $150.
(b)
A bank can increase the amount of its loan by the amount of excess reserves it held.
This bank has excess reserves of $150.
So, this bank can increase its loans by $150.
(c)
Calculate Money multiplier -
Money multiplier = 1/Required reserve ratio = 1/0.10 = 10
The money multiplier is equal to 10.
(d)
Calculate total expansion of loan by entire banking system -
Total expansion = Increase in loan by individual bank * Money multiplier
Total expansion = $150 * 10 = $1,500
The entire banking system can expand their loans by $1,500.
(e)
The new wealth directly created from this expansion of deposits is equal to the quantum of expansion in deposits.
The deposits has expanded by $1,500.
So, new wealth directly created from this expansion of deposits is $1,500.
The actual reserves are $500, required reserves are $350, and excess reserves are $150. This bank can increase its loans by $150. The money (deposit) multiplier equals to 10, and the entire banking system can expand their loans by $1500.
Explanation:Firstly, to find the actual reserves, we add the vault cash to the deposits at the Federal Reserve, which gives: $200 + $300 = $500. The required reserves are calculated as a percentage (in this case, 10%) of the total deposits, which gives us: 10% of $3500 = $350. The excess reserves are then calculated by subtracting the required reserves from the actual reserves, giving: $500 - $350 = $150.
Given the excess reserves, the bank can increase its loans by $150 as this is the extra money it has available to lend.
The money (deposit) multiplier is calculated as the reciprocal of the reserve ratio. In this case, the money multiplier is 1 / 0.10 = 10.
The entire banking system can expand their loans by excess reserves multiplied by the money multiplier, which would be: $150*10 = $1500.
The new wealth directly created from this expansion of deposits is the total change in loans, which is $1500 because loans are an asset to the bank but equate to deposits, or wealth, for individuals and businesses.
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The net income reported on the income statement for the current year was $240,000. Depreciation was $52,000. Accounts receivable and inventories decreased by $5,000 and $15,000, respectively. Prepaid expenses and accounts payable increased, respectively, by $500 and $14,000. How much cash was provided by operating activities?a. $277,500.b. $287,500.c.$295,500.d.$228,500.
Final answer:
The cash provided by operating activities is calculated by adjusting the net income for changes in working capital and adding back depreciation. The correct calculation provides a result of $325,500, which differs from the options provided in the question.
Explanation:
To calculate the cash provided by operating activities, you need to adjust the net income by changes in working capital and add back non-cash expenses such as depreciation. Here's the calculation:
Start with Net Income: $240,000.Add back Depreciation: $240,000 + $52,000 = $292,000.Adjust for decrease in Accounts Receivable: $292,000 + $5,000 = $297,000.Adjust for decrease in Inventories: $297,000 + $15,000 = $312,000.Adjust for increase in Prepaid Expenses (which uses cash): $312,000 - $500 = $311,500.Adjust for increase in Accounts Payable (which provides cash): $311,500 + $14,000 = $325,500.Therefore, the cash provided by operating activities is $325,500, which is not listed in the options provided.
Acme Explosives recently gave very specific specifications to its suppliers of raw materials in an attempt to improve the quality of those raw materials and to minimize and anticipate the problems they are likely to face in the conversion process. This is an example of:
A. concurrent control.
B. feedforward control.
C. feedback control.
D. bureaucratic control.
E. MBO control.
Answer: Option A
Explanation: In simple words, concurrent controls refers to the regulation of activities by an organisation to make sure that those activities are performed as per the standards set. Usually the activities regulated under this type of control are related to the transformation process.
Such control is made to improve an existing performance and not in relation to some new set of activities that are to be performed. Hence from the above we can conclude that the given case is an example of concurrent control.
Bobby, a single man, owned a building with a fair market value of $2,000,000. Bobby's adjusted basis in the building was $1,000,000. This year, Bobby agreed to sell the building to his adult sone, Robby for $1,300,000. What is the amount of Bobby's taxable gift?
Answer:
Bobby's taxable gift will amounts to $686,000
Explanation:
The bobby taxable gift amount is computed as:
Discount = Fair market value - Selling Price
where
Fair market value is $2,000,000
Selling Price is $1,300,000
Putting the values above:
= $2,000,000 - $1,300,000
= $700,000
This amount will be treated as a gift which will be eligible for the annual exclusion and therefore, creating the taxable gift amounts to $686,000 for the year.
Answer:
686,000
Explanation:
Mandatory outlays are different than discretionary outlays because:a. mandatory outlays usually change during the budget process, whereas discretionary outlays do not.
b. mandatory outlays have been decreasing as a percentage of the federal budget, whereas discretionary outlays have been increasing as a percentage of the federal budget.
c. discretionary outlays can be changed during the annual budget process, whereas mandatory outlays cannot.
d.discretionary outlays include entitlement programs (such as Social Security and Medicare), whereas mandatory outlays include important government programs (such as defense).
e.discretionary outlays comprise the vast majority of the total budget, whereas mandatory outlays make up only a minor fraction.
Answer:
The correct answer is C) Discretionary outlays can be changed during the annual budget process, whereas mandatory outlays cannot.
Explanation:
Mandatory outlays such as Social Security and Medicare represent around 60% of the US Federal Budget. They are mandatory because each year, the total cost of these outlays must be funded by obligation, and the funding cannot me modified during the annual appropriation process in Congress.
Discretionary outlays, on the other hand, are subject to modification in Congress each year, either by the House or by the Senate, and they represent an important point of contention between the executive and the legislative.
A high-precision programmable router for shaping fur- niture components is purchased by Henredon for $190,000. It is expected to last 12 years and have a salvage value of $5,000. Calculate the depreciation deduction and book value for each year. a. Use straight-line depreciation. b. Use declining balance depreciation using a rate that ensures the book value equals the salvage .
Answer:
a) Annual depreciation = $15,416.67
b) Depreciation rate = 0.2615
Explanation:
Data provided in the question:
Cost of router = $190,000
Useful life = 12 years
Salvage value = $5,000
Now,
a) Using straight-line depreciation
Annual depreciation = [tex]\frac{\textup{Cost - Salvage value}}{\textup{Useful life}}[/tex]
= [tex]\frac{\$190,000-\$5,000}{\textup{12}}[/tex]
= $15,416.67
Hence,
Year Depreciation Book value
1 $15,416.67 $190,000 - $15,416.67 = $174,583.33
2 $15,416.67 $174,583.33 - $15,416.67 = $159166.66
3 $15,416.67 $159166.66 - $15,416.67 = $143749.99
4 $15,416.67 $143749.99 - $15,416.67 = $128333.32
5 $15,416.67 $128333.32 - $15,416.67 = $112916.65
6 $15,416.67 $112916.65 - $15,416.67 = $97499.98
7 $15,416.67 $97499.98 - $15,416.67 = $82083.31
8 $15,416.67 $82083.31 - $15,416.67 = $66666.64
9 $15,416.67 $66666.64 - $15,416.67 = $51249.97
10 $15,416.67 $51249.97 - $15,416.67 = $35833.3
11 $15,416.67 $35833.3 - $15,416.67 = $20416.63
12 $15,416.67 $20416.63 - $15,416.67 = $4999.96
b) using declining balance depreciation
Depreciation rate = [tex]1 - (\frac{salvage}{Cost})^{\frac{1}{n}}[/tex]
here, n = useful life
thus,
Depreciation rate = [tex]1 - (\frac{5,000}{190,000})^{\frac{1}{12}}[/tex]
= 0.2615
Therefore,
Year Depreciation Book value
1 0.2615 × $190,000 $190,000 - $49685 = $140315
2 0.2615 × $140315 $140315 - $36692.3725 = $103622.62
3 0.2615 × $103622.6 $103622.62 - $27097.30 = $76525.32
4 0.2615 × $76525.32 $76525.32 - $20011.37 = $56513.95
5 0.2615 × $56513.95 $56513.95 - $14778.39 = $41735.56
6 0.2615 × $41735.56 $41735.56 - $10913.84 = $30821.72
7 0.2615 × $30821.72 $30821.72 - $8059.87 = $22761.85
8 0.2615 × $22761.85 $22761.85 - $5952.22 = $16809.63
9 0.2615 × $16809.63 $16809.63 - $4396.22 = $12413.41
10 0.2615 × $12413.41 $12413.41 - $3246.10 = $9167.31
11 0.2615 × $9167.31 $9167.31 - $2397.25 = $6770.06
12 0.2615 × $6770.06 $6770.06 - $1770.37 = $4999.69
Your investment over one year yielded a capital gains yield of 5% and no dividend yield. If the
sale price was $114 per share, what was the cost of the investment?
A) $119.43
B) $103.14
C) $108.57
D) $114.00
Answer:
C) $108.57
Explanation:
Given data:
Capital gains yield (CGY) = 5%
Dividend yield = 0%
Sale price (S) = $114 per share
Capital gains yield is defined as a function of initial investment (I) and sale price (S) as follows:
[tex]CGY= \frac{S-I}{I}\\ 0.05 = \frac{114-I}{I} \\I=\frac{114}{1.05} \\I= \$ 108.57[/tex]
The initial cost of the investment was $108.57.
Suppose that Westside Auto of Problem 4, with D = 12,000 units per year, Ch = (2.50)(0.20) = $0.50, and C0 = $25, decided to operate with a backorder inventory policy. Backorder costs are estimated to be $5 per unit per year. Identify the following:a. Minimum-cost order quantityb. Maximum number of backordersc. Maximum inventory leveld. Cycle timee. Total annual cost
Answer:
Please see attachment
Explanation:
Please see attachment
Final answer:
This answer explains the calculation for minimum-cost order quantity, maximum backorders, maximum inventory level, cycle time, and total annual cost when operating with a backorder policy in business.
Explanation:
a. Minimum-cost order quantity: To find the Economic Order Quantity (EOQ), use the formula EOQ = sqrt((2DS)/(H)). Plugging in D = 12,000 units, Ch = $0.50, and C0 = $25 gives EOQ = sqrt((2×12000×25)/0.50) = 600 units.
b. Maximum number of backorders: The maximum number of backorders is the EOQ itself, so in this case, it is 600 units.
c. Maximum inventory level: The maximum inventory level is EOQ plus the maximum number of backorders, which equals 1200 units.
d. Cycle time: Cycle time can be calculated as EOQ/D, so in this scenario, the cycle time is 600/12,000 = 0.05 years.
e. Total annual cost: Total Cost (TC) = (D/Q)*S + (Q/2)×H + (D/Q)×C0, where S is the cost per order, Q is EOQ, H is holding cost per unit. Substituting the values, TC = (12000/600)×25 + (600/2)×0.50 + (12000/600)×5 = $750 + $150 + $25 = $925.
MetaProMetaPro Systems is a start-up company that makes connectors for high-speed Internet connections. The company has budgeted variable costs of $ 140$140 for each connector and fixed costs of $ 5 comma 500$5,500 per month. MetaProMetaPro's static budget predicted production and sales of 100100 connectors in August, but the company actually produced and sold only 7878 connectors at a total cost of $ 18 comma 000$18,000. MetaProMetaPro's flexible budget variance for total costs is
Answer:
Total variation= $1,580 unfavorable
Explanation:
Giving the following information:
The company has budgeted variable costs of $140 for each connector and fixed costs of $5,500 per month.
MetaPro's static budget predicted production and sales of 100 connectors in August, but the company produced and sold only 78 connectors at a total cost of $18,000.
Standard total cost= 140*78 + 5,500= $16,420
Actual cost= 18,000
Total variation= 18,000 - 16,420= 1,580 unfavorable
Chambers, Inc. uses flexible budgets. At normal capacity of 16,000 units, budgeted manufacturing overhead is: $64,000 variable and $180,000 fixed. If Chambers had actual overhead costs of $250,000 for 18,000 units produced, what is the difference between actual and budgeted costs?
Chambers, Inc. uses flexible budgets. At normal ca
$2,000 unfavorable.
$2,000 favorable.
$8,000 favorable.
$6,000 unfavorable.
Answer:
The correct answer is B.
Explanation:
Giving the following information:
At the normal capacity of 16,000 units, budgeted manufacturing overhead is $64,000 variable and $180,000 fixed. If Chambers had actual overhead costs of $250,000 for 18,000 units produced.
Variable overhead rate= 64,000/16,000= $4
Overhead variance= real - allocated
Overhead variance= 250,000 - (4*18,000 + 180,000)= 250,000 - 252,000= 2,000 favorable
The difference between actual and budgeted costs for Chambers, Inc. is $2,000 favorable, which means the actual overhead costs were less than what was budgeted for 18,000 units produced. Hence, correct option B.
The question asks us to calculate the difference between actual and budgeted manufacturing overhead costs for Chambers, Inc., which uses a flexible budget. To find the budgeted costs for 18,000 units, we first calculate the variable cost per unit by dividing the total variable costs at normal capacity by the number of units at normal capacity. Then we can adjust the budgeted variable costs for 18,000 units and add the fixed costs, since fixed costs remain constant regardless of the number of units produced.
Step-by-step calculation:
Calculate the variable cost per unit: $64,000 / 16,000 units = $4 per unit.
Adjust the budgeted variable costs for 18,000 units: $4 per unit × 18,000 units = $72,000.
Keep the fixed costs the same: $180,000.
Calculate total budgeted costs for 18,000 units: $72,000 (variable) + $180,000 (fixed) = $252,000.
Subtract the actual costs from budgeted costs: $252,000 (budgeted) - $250,000 (actual) = $2,000.
Since the actual costs are less than the budgeted costs, the difference of $2,000 is favorable.
Sheridan Company’s standard labor cost per unit of output is $33.00 (3.00 hours x $11.00 per hour). During August, the company incurs 2,970 hours of direct labor at an hourly cost of $12.10 per hour in making 1,100 units of finished product. Compute the total, price, and quantity labor variances.
Answer:
Total variation= $363 favorable
Explanation:
Giving the following information:
Sheridan Company’s standard labor cost per unit of output is $33.00 (3.00 hours x $11.00 per hour). During August, the company incurs 2,970 hours of direct labor at an hourly cost of $12.10 per hour in making 1,100 units of finished product.
Direct labor efficiency variance= (SQ - AQ)*standard rate
Direct labor efficiency variance= (3,300 - 2,970)*11= 3,630 favorable
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Direct labor rate variance= (11 - 12.1)*2,970= 3,267 unfavorable
Total variation= 363 favorable
Guido Properties owes First State Bank $60 million under a 7% note with two years remaining to maturity. Due to financial difficulties of Guido, the previous year’s interest ($4.2 million) was not received. The bank agrees to settle the note receivable and accrued interest receivable in exchange for land having a fair value of $44 million and a book value of $ 32 million.
Required:
Prepare all the journal entries required for the settlement on Guido’s books.
Answer:
Explanation:
The journal entries are shown below:
Notes payable A/c Dr $60,000,000
Interest payable A/c Dr $4,200,000
To Land A/c $32,000,000
To Gain on transfer of land $12,000,000
To gain on settlement of debt $20,200,000
(Being all transactions are recorded and the remaining balance is credited to the gain on settlement of debt)
The Gain on transfer of land is computed below:
= $44 million - $32 million
= $12 million
Final answer:
To settle the note payable and accrued interest on Guido's books, journal entries should be made to transfer the note payable, recognize the unpaid interest as a loss, and record the settlement of the note and loss on the land.
Explanation:
To record the settlement on Guido's books, the following journal entries should be made:
Debit: Notes Payable $60,000,000 Credit: Land $44,000,000, Cash $16,000,000Debit: Cash $4,200,000 Credit: Interest Receivable $4,200,000Debit: Land $12,000,000 Credit: Loss on Settlement of Debt $4,000,000, Cash $8,000,000The first journal entry records the transfer of the note payable to the bank and the receipt of land and cash. The second entry recognizes the previously unpaid interest as a loss. The third entry records the settlement of the note payable and the recognition of a loss on the difference between the fair value and book value of the land.
WKL Entertainment Inc. is a service-based firm with very few competitors. The company is looking to sell its services in different nations with substantial differences in consumer preferences and where cost pressures are not too intense. Which of the following strategies should WKL Entertainment Inc. managers pursue?
a. International b. Transnational c. Global standardization d. Localization e. Multinational
Answer:
The correct answer is letter "D": Localization.
Explanation:
A localization strategy is carried out when a company has international expansion plans since operating in different countries implies dealing with different consumers' preferences, needs, and cultures. In other words, the company will have to adapt its operations according to the new region where it will be located.
As a long-term investment at the beginning of the 2018 fiscal year, Florists International purchased 30% of Nursery Supplies Inc.'s 8 million shares for $56 million. The fair value and book value of the shares were the same at that time. During the year, Nursery Supplies earned net income of $40 million and distributed cash dividends of $1.25 per share. At the end of the year, the fair value of the shares is $52 million.
Required:
Prepare the appropriate journal entries from the purchase through the end of the year.
Answer:
Please see attachment
Explanation:
Please see attachment
You are a Director in the Andrews Corporation. Your boss called you to inform you that there is a proposed layoff in your department that would affect three of six of your employees if it takes place. Given the sensitivity of the issue, your boss asks you to keep this information absolutely confidential. Later that day, one of your employees (Shelia) who would be affected stops you in the hallway and says she’s heard rumors about a layoff, remarking, "I’m not going to be fired am I?" The layoff in fact does occur and you now have to deliver the bad news to your employees. It’s likely to send shockwaves through the organization and there will no doubt be considerable bad press associated with the layoff. With which of the following issues should you be most concerned when talking with Shelia?a-Ensuring that Shelia understands the process for how she was selected as one of the employees to be terminated.b-Making certain that she has a chance to air any negative feelings so she doesn't feel a need to go the local newspaper.c-Making sure that Shelia understands the economic need for laying-off staff.d-Clearly communicating that it's not personal and that she has been a valuable employee.
Answer: (B)
As a Director, you are a key stakeholder in Andrews Corporation. No matter how bad you feel for the laid off workers, you have the responsibility of ensuring that they don't spoil the name of the company outside, out of grief.
For this reason, you should let Shelia (and other laid off staff) to pour out their grief (to you alone or to you and other directors or managers/staff) so they don't feel a need to go to the local newspaper and spread bad press about the company.
If you lay off workers and also shun them from complaining within the company premises or to company staff, there is a high probability that they will air their negative feelings elsewhere and that will be bad press for the company.
Explanation:
All the other options (A), (C), and (D) are the statements that will be used to soothe Shelia (and other laid off staff) AFTER they have poured out their grief.
- Let them understand the process for how they were selected to be terminated
- Ensure that they understand the economic need for laying off staff. Probably the company is going through hard times financially and after trying measures to increase profits (such as increase in price of goods or services they offer), they are still having a loss, so the last resort is to fire some staff
- Clearly communicate that the retrenchment is not personal (is not happening to them because you or the boss personally dislike them). Let them feel that they have been valuable employees.