Answer:
Vaccinations : external benefit - the invention of a vaccine benefits a lot of people. It helps to cure for diseases and reduces the death rate in the society.
The private market is likely to produce less than the socially optimal quantity. This is because the cost associated with producing vaccinations are high and the private market would be unwilling to produce it as the aim of the private market would be to maximise profit.
cigarettes : external cost
Smoking cigarettes produces smoke which is harmful to other people apart from the smoker. Those around the person smoking can inhale the smoke and this can adversely affect their health. This is known as second hand smoking.
The private market is likely to provide more than social optimal Quanitity. This is because there's little or no cost associated with smoking.
antibiotics :
External benefit - antibiotics creates external benefit. It helps to cure for diseases and reduces the death rate in the society. It also reduces the rate at which others can be infected.
The private market is likely to produce less than the socially optimal quantity. This is because the cost associated with producing antibiotics are high and the private market would be unwilling to produce it as the aim of the private market would be to maximise profit.
Explanation:
Postive externality is when the benefits of economic activities to third parties exceeds the costs.
Activities that generate positive externality are usually under produced in the economy. The government can encourage production of goods and services that generate positive externality by giving subsidies. This would reduce cost of production.
When the cost of economic activities to third parties is greater than the benefits. Activities that generate negative externality are over produced in the economy. The government can discourage activities that generates negative externality by taxation. Imposing tax increases cost and discourages such activities.
I hope my answer helps you
Final answer:
Vaccinations create a positive externality leading to under-provision in the absence of government intervention, while cigarettes and antibiotics create negative externalities, often resulting in over-provision. Subsidies for vaccines and regulations or taxes for cigarettes and antibiotics can help correct these market failures and reach social optimization.
Explanation:
When discussing goods like vaccinations, cigarettes, and antibiotics, it is important to consider the externalities they may entail. Vaccinations tend to involve a positive externality, as they not only protect the individual but also reduce the potential of transmission to others, leading to a healthier society overall. In the absence of government intervention, the private market is likely to provide less than the socially optimal quantity of vaccinations because individuals do not account for the benefits their vaccination provides to others.
Cigarettes, on the other hand, have a negative externality through secondhand smoke and health-related costs that affect society. Consequently, the private market may provide more than the socially optimal quantity of cigarettes because the market price does not include these external costs borne by others. Similarly, antibiotics have a complex externality issue. The overuse leads to antibiotic resistance, which is a negative externality resulting in future treatments being less effective for others. Hence, without government regulation, the market might also over-supply antibiotics.
Government interventions such as subsidies for vaccinations can help reach a socially optimal level, reflecting the marginal social benefit. This does not only apply to flu shots but to vaccinations in general. Conversely, imposing taxes or restrictions on cigarettes and antibiotic prescriptions can help to address the negative externalities and bring the market closer to the socially optimal quantity of these goods.
Polar Industries makes refrigerators. Polars management wants to market refrigerators to students in dorm rooms and small apartments by making a compact refrigerator. The competition, led by Walmart, prices small refrigerators at $76 each. The production manager at Polar Industries estimates that the small refrigerator could be produced for the following manufacturing costs.
Direct materials $24
Direct labor 10
Manufacturing overhead 8
Total $42
Polar's management wants to make an operating margin of 10 percent (operating margin equals revenues minus manufacturing costs).
Suppose Polar uses cost-plus pricing, setting the price to manufacturing costs plus 10 percent of manufacturing costs, What price should it charge for the refrigerator?
Answer:
Selling price = $46.2
Explanation:
Cost plus pricing determines the price of the product by adding a given percentage of the cost to the manufacturing cost to arrive at the price.
Selling Price = Manufacturing Cost + (mark-up(%)× manufacturing cost)
Selling price :
= 42 + (10%× 42)
= $46.2
Selling price = $46.2
To achieve an operating margin of 10%, Polar Industries should price each compact refrigerator at $46.2 by using the cost-plus pricing strategy.
Explanation:Polar Industries is using a cost-plus pricing strategy, in which a set margin is added to the manufacturing costs to determine the sale price of a product. In this case, Polar's manufacturing costs for the small refrigerators total to $42 and they aim for an operating margin of 10 percent.
Therefore, the operating margin, which is the profit, would be 10% of $42, which is $4.2. Adding the manufacturing costs and the desired profit together, $42 + $4.2, gives us $46.2. Therefore, Polar should set its price at $46.2 per compact refrigerator to achieve their intended operating margin.
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EcoSacks manufactures cloth shopping bags. The controller is preparing a budget for the coming year and asks for your assistance. The following costs and other data apply to bag production:
Direct materials per bag 1.0 yard cotton at $4 per yard 0.2 yards canvas finish at $12 per yard Direct labor per bag 0.5 hour at $18 per hour Overhead per bag Total overhead per unit $3.40
You learn that equipment costs and building occupancy are fixed and are based on a normal production of 600,000 units per year. Other overhead costs are variable. Plant capacity is sufficient to produce 750,000 units per year.
Labor costs per hour are not expected to change during the year. However, the cotton supplier has informed EcoSacks that it will impose a 20 percent price increase at the start of the coming budget period. No other costs are expected to change.
During the coming budget period, EcoSacks expects to sell 540,000 bags. Finished goods inventory is targeted to increase from the current balance of 120,000 units to 210,000 units to prepare for an expected sales increase the year after next as a result of legislation in several states regarding plastic bags. Production will occur evenly throughout the year. Inventory levels for cotton and canvas are expected to remain unchanged throughout the year. There is no work-in-process inventory.
Required
Prepare a production budget and estimate the materials, labor, and overhead costs for the coming year.
Answer:
A.
Full Year production plan = 630,000
And Monthly production = 630,000 / 12 = 52,500 units
B.
Total Material costs = $4,536,000
C.
Total Labor Costs = $5,670,000
D.
Overheads = $2,142,000
Explanation:
Ecosacks
Production plan
Opening Stock = 120,000
Planned sales volume = 540,000
Therefore production required to cover sales = sales plan minus Opening stock = 420,000 units
Expected closing stock = 210,000
We will have to produce additional 210,000 units to achieve this closing stock
= 420,000 + 210,000 = 630,000 units.
Production is expected to stay even all year through;
This implies monthly production = 630,000 / 12 = 52,500 units
B.
Material costs.
Cotton: 1 yard makes 1 bag and it is priced at 20% higher from last year ($4 x 120%) per yard
Cotton costs = 630,000units x 1yd x ($4 x 120%) = $3,024,000
Canvas Finish: 0.2 yard required for 1 bag and it is priced at $12 per yard
Canvas finish cost = 630,000 x 0.2 x 12 = $1,512,000
Total Material costs = $4,536,000
C.
Labor costs = 0.5hr per bag and it costs $18 per hour
Labour costs = 0.5 x 18 x 630,000
= $5,670,000
D.
Overhead costs = $3.40 x 630,000 = $2,142,000
In order to prepare the production budget and estimate the cost for the coming year, the total units required would be 630,000 bags due to sales and inventory requirement.
The cost per bag is estimated to be $19.20 considering an increase in cotton price and unchanged labour and overhead costs. Thus, the total cost for the coming year is estimated to be $12,096,000.
Explanation:To prepare a production budget we need to consider the sales, the target finish goods inventory, and the beginning finished goods inventory.
As Ecosacks plans to sell 540,000 units and wants to maintain an ending inventory of 210,000 units, while the beginning inventory is 120,000 units, the total units required would be 630,000 bags (540,000 units to be sold + 210,000 units ending inventory - 120,000 units beginning inventory).
The production will occur evenly throughout the year.
Let's turn to estimating the costs for the coming year. We start by calculating the cost per bag.
The cotton cost per bag will increase by 20% (from $4 to $4.8) and the canvas cost remains the same.
The total material cost per bag comes out to be $6.8 (1.0 yard cotton at $4.8 per yard +0.2 yards canvas finish at $12 per yard).
The labor cost per bag is $9 ($18 per hour * 0.5-hour per bag). Overhead cost per bag is given as $3.4.
Hence, the total cost per bag is $19.20 ($6.8 material + $9 labor + $3.4 overhead).
Finally, the total cost for the coming year can be estimated by multiplying the cost per bag with the total units required i.e. $19.20 * 630,000 units = $12,096,000.
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Talks-A-Lot, Inc. sells cell phones to customers and expects that 10% of phones sold will be returned for repair under its warranty program. The average repair cost is $75 per phone. For 2021, Talks-A-Lot has sold 750 cell phones and has repaired 30 of them as of December 31, 2021. What amount of warranty liability should be reported at December 31, 2021?
Answer:
amount of warranty liability that should be reported at December 31, 2021 is $3,375
Explanation:
When the Sale was made, the Warrant Liability is recorded as follows:
Warranty Cost $5,625 (Debit)
Warranty Provision $5,625 (Credit)
Warranty Cost = 750 cell phones × $75 × 10% = $5,625
When Warranty Claims were received during the year the records are as follows :
Warranty Provision $2,250 (Debit)
Cash $2,250 (Debit)
Warranty Cost = 30 × $75 = $2,250
At December 31, 2021 the amount of warranty liability should be
Warranty Provision = $5,625 - $2,250 = $3,375
Management can make any form of distribution to the firm’s shareholders using the company’s free cash flow (FCF). The underlying objective is to maximize shareholder wealth by increasing the firm’s value. Any use of FCF that negatively affects the firm’s value is not considered a good use of the FCF.
Which of the following uses is considered to be a good use of free cash flow?
1.Invest in nonoperating assets
2.Invest in operating assets
3.Theoretically, there are some traditional ways of using FCF. If a company uses all of its FCF to pay off all of its debt, it would reap the maximum benefit from the tax-deductible component of interest payments toward the debt.
4.This statement is false because if the firm uses its FCF to pay off all of its debt, it would have and no deductible.
Answer:
A good use of free cash flow is to Invest in nonoperating assets
Explanation:
Free cash flow (FCF) is a measure of how much cash a business generates after accounting for capital expenditures such as buildings or equipment. This cash can be used for expansion, dividends, reducing debt, or other purposes.
If the underlying objective is to maximize shareholder wealth by increasing the firm’s value. Any use of FCF that negatively affects the firm’s value is not considered a good use of the FCF.
A good use of FCF would be to invest in nonoperating assets such as marketable securities, investments in other companies, etc.)
Final answer:
Investing in operating assets is generally a good use of free cash flow, as it can enhance a firm's productive capacity and growth. Paying off all debt may not be optimal due to the loss of tax advantages from interest payments. Firms must choose their sources of financial capital wisely, balancing growth with control and profitability.
Explanation:
When considering the best use of free cash flow (FCF), firms must evaluate options that maximize shareholder wealth by increasing the firm's value. Among the listed options, investing in operating assets is typically a good use of FCF as it can directly contribute to the firm's productive capacity and growth potential. Reinvesting profits into the business can help produce additional products, generating more sales and increased cash flow in subsequent periods. However, paying off all debt with FCF might not always be the best use of funds since deductibility of interest payments provides a tax advantage; completely eliminating debt removes this benefit. Making strategic decisions on using FCF, such as whether to borrow, issue bonds, or sell stock, also affects a firm's operations and control. Option 2 is correct among the given options .
Suppose that you took out a student loan at a rate of 4.45%. Note that this rate is constant for the life of the loan. Next, suppose that at your first job after graduation, there are two possibilities: (i) the inflation rate is 2%, and your wages rise by 4% or (ii) the inflation rate is 3%, and your wages rise by 5%. (No, you certainly do not get a choice of inflation rates, but pretend that you can for the sake of exploring this important concept.) Briefly explain whether you would prefer the first or the second situation.
Answer:
(ii) the inflation rate is 3%, and your wages rise by 5%
Explanation:
As the inflation decreasethe value of money over-time
The student loan constant nominal-rate will make for a lower real-nterest on the loan. As more inflation bettter is to owe as the real burden of the liability is being halved by inflation. In the opposite side it is better not to loan at fixed rate under inflationaries economies as the capital will be destroyed.
Also, it is important the the second approach is preferable as we are given wages rise of 5% every year making them, increase higher than inflationhenceforth our real salaries increase in respect to debt in the long turn.
An advertising agency that assists clients by both developing and placing advertisements may receive payment according to an incentive plan based on performance. These plans typically pay for agency costs and a 5 to 10 percent profit, plus bonuses if specific goals are met. This type of agency is referred to as a(n) __________.
Answer:
The correct answer is letter "A": full-service agencies.
Explanation:
Full-service agencies are those in charge of handling all the advertisement campaign of a company from the planning until it is implemented. In most cases, firms hire these agencies to focus on their production process instead of the branding and promotional efforts for the goods manufactured. In some cases, the payment of these agencies can be set as a percentage of certain goals dealt with the institution.
While the risks of construction lending may be less in a number of respects than those associated with land acquisition, banks still require a premium in their lending rate as compensation for the risks involved. For construction loans, banks typically require a premium above LIBOR that ranges from
Answer: C. 150-250 basis points
Explanation:
Banks now charge between 150 to 250 basis points above the London Interbank Official Rate (LIBOR). This means that they charge a premium of between 1.5% to 2.5% over LIBOR for construction projects.
Like earlier mentioned, risks of construction lending may be less in a number of respects than those associated with land acquisition but however there are still risks. Risks such as low Tenancy when built, the potential Environmental problems and location.
This is why it is necessary to charge such a premium which is actually a very competitive rate amongst Banks.
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Caleb purchased his first home for $420,000. He made a 10% down payment and financed the remaining purchase price. The terms of the loan were as follows: 30 year loan Payments made monthly Interest charged at 9% convertible monthly In which month is the first payment for which the principal component is greater than half of the payment?
Answer:
In 269th Payment the principal component is greater than half of the payment
Explanation:
Amortization schedule is attached please find it.
The loan payment includes the interest and principal portion. After deducting the interest on the due balance the residual amount is paid towards the principal.
Loan is paid per month, the amount of each payment can be calculated as follow:
Loan Payment per month = r ( PV ) / 1 - ( 1 + r )^-n
r = rate per period = 9% per year = 0.75% per month
n = number months = 30 years x 12 months per year = 360 Months
PV = present value of all payments = $420,000
P = payment per month = ?
P = 0.75% ( $420,000 x 90% ) / 1 - ( 1 + 0.75% )^-360
P = $3,041.47 per month
Andy derives utility from two goods, potato chips (p) and cola (c). Andy receives zero utility unless he consumes some of at least one good. The marginal utility that he receives from the two goods is given as follows:
Answer:
6
Explanation:
Marginal Utility is defined as the satisfaction that an individual gains after consuming additional units of a certain goods or services. Andy has two goods available to consume cola and potato chips. Andy will consume 6 units of potato chips to maximize his marginal utility. The cola is also consumed by Andy to satisfy his marginal utility.
The question pertains to utility in economics, particularly focusing on diminishing marginal utility and consumer choice theory. It explores how a rational consumer equates marginal utility with opportunity cost to maximize satisfaction under budget constraints.
The student's question involves the concept of utility, which relates to the satisfaction or pleasure a person derives from consuming goods and services. Specifically, the question addresses the principle of diminishing marginal utility, which is a core idea within microeconomics that concerns how additional units of a good or service provide less satisfaction compared to earlier units consumed. This topic is a part of consumer choice theory, which analyzes how consumers make decisions to allocate their limited resources across different goods and services to maximize their utility.
A rational consumer will continue to purchase more of a good only if the marginal utility of that good exceeds the opportunity cost, which is the utility of the next-best alternative foregone. The student's inquiry leads to understanding how utility and the law of diminishing marginal utility play a crucial role in consumer decision-making and resource allocation within the constraints of a budget.
The Wilmoths plan to purchase a house but want to determine the after-tax cost of financing its purchase. Given their projected taxable income, the Wilmoths are in the 24% Federal income tax bracket and the 8% state income tax bracket (i.e., an aggregate marginal tax bracket of 32%). The total cash outlay during the first year of ownership will be $23,400 ($1,200 principal payments, $22,200 qualified residence interest payments).As a result, the annual after-tax cost of financing the purchase of the home will be $_____________.
Answer:
The annual after-tax cost of financing the purchase of the home will be $ 16,296.
Explanation:
To calcuate the annual after-tax cost of financing the purchase of the home we have to use the following formula:
annual after-tax cost of financing the purchase= Installment -tax saving
Acording to the data Tax Saving = 32 % x of Interest amount , hence, tax saving= 32% x $22,200
=$7,104
So, annual after-tax cost of financing the purchase= $23,400- $7,104
= $ 16,296
Fuchsia, Inc. provides automobile repair services in the local community. The company provides the following information for the month of March: Building Rent Expense $5,200 Depreciation Expenselong dashEquipment 1,600 Supplies Expense 8,000 Utilities Expense 2,350 Fuchsia provided services to 1,600 clients in the month of March and generated $23,500 as revenue. How much is the cost per service?
Answer:
Cost per service = $10.72
Explanation:
Total cost = Building Rent Expense + Depreciation Expense on Equipment + Supplies Expense + Utilities Expense = $5,200 + $1,600 + $8,000 + $2,350 = $17,150
Number of services provided = 1,600
Cost per service = Total cost ÷ Number services provided = $17,150 ÷ 1,600 = $10.72
Flash EminusCard Manufacturing manufactures software parts for the computer software systems that produce eminuscards. The Flash II part is currently manufactured in the Computer Department. The Data Department also produces the part and the plant has excess capacity to produce the Flash II part. The current market price of the Flash II part is $ 500. The managerial accountant reported the following manufacturing costs and variable expense data: Flash EminusCard Manufacturing Manufacturing Costs and Variable Expense Report Flash Component Direct materials $ 860 Direct labor $ 80 Variable manufacturing overhead $ 150 Fixed manufacturing overhead (current production level) $ 155 Variable selling expenses (only incurred on sales to outside consumers) $ 132 If the highest acceptable transfer price is $ 500 in the market, what is the lowest acceptable inminushouse price the Data Department should receive to produce the part inminushouse at the Computer Department?
Answer:
$1,090
Explanation:
The lowest acceptable price for Data Department is the minimum transfer transfer price.
The minimum transfer price is defined as a price that is acceptable to the transferring division and out of a range of acceptable prices, it is that would be the best for the company.
Mini Transfer price = Variable unit costs - internal savings + opportunity cost
Note : the plant has excess capacity to produce the Flash II part, therefore there is no opportunity cost
Mini Transfer price = $ 860+ $ 80 + $ 150
= $1,090
Therefore the lowest acceptable house price the Data Department should receive to produce the part in house at the Computer Department is $1,090
Final answer:
The lowest acceptable inminushouse price the Data Department should receive to produce the Flash II part inminushouse at the Computer Department is $1222, which covers the variable costs of production.
Explanation:
To determine the lowest acceptable inminushouse price the Data Department should receive to produce the Flash II part inminushouse at the Computer Department, we need to consider the variable costs involved in the production. The variable manufacturing costs for the Flash II part include direct materials, direct labor, variable manufacturing overhead, and variable selling expenses. Adding these costs together, we get $860 (direct materials) + $80 (direct labor) + $150 (variable manufacturing overhead) + $132 (variable selling expenses) = $1222.
Therefore, the lowest acceptable inminushouse price the Data Department should receive is $1222, which covers the variable costs of production. This ensures that the Data Department covers its expenses when producing the Flash II part inminushouse at the Computer Department.
Ly Company disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following: Asset Original Cost Residual Value Estimated Life Accumulated Depreciation (straight-line) Machine A $ 36,000 $ 3,900 5 years $ 25,680 (4 years) Machine B 68,200 4,500 14 years 50,050 (11 years) The machines were disposed of in the following ways: Machine A: Sold on January 1 for $10,800 cash. Machine B: On January 1, this machine was sold to a salvage company at zero proceeds (and zero cost of removal).
Prepare the journal entries related to the disposal of Machine A and B at the beginning of the current year.
Answer:
The journal entries related to the disposal of Machine A and B at the beginning of the current year.
Machine A:
Debit Accumulated depreciation $25,680
Debit Cash (sales proceed) $10,800
Credit Asset (Machine cost) $36,000
Credit Gain on disposal $480
(To record disposal of Machine A)
Machine B:
Debit Accumulated depreciation $50,050
Debit Cash (sales proceed) $0
Debit Loss on disposal $18,150
Credit Asset (Machine cost) $68,200
(To record disposal of Machine B)
Explanation:
Machine A: Using straight-line depreciation method = (Cost - Residual Value) / Useful life: ($36,000 - $3,900) / 5 years = $6,420/year
$6,420/year x 4 years = $25,680
The net book value of the asset is $36,000 - $25,680 = $10,320. Gain on disposal is $10,800 - $10,320 = $480
Machine B: Depreciation: ($68,200 - $4,500) / 14 years = $4,550/year
$4,550/year x 11 years = $50,050
The net book value of the asset is $68,200 - $50,050 = $18,150. Loss on disposal is $0 - $18,150 = -$18,150
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 6.80 pounds $ 3.00 per pound $ 20.40 Direct labor 0.40 hours $ 13.00 per hour $ 5.20 During the most recent month, the following activity was recorded: Thirteen thousand two hundred pounds of material were purchased at a cost of $2.90 per pound. The company produced only 1,320 units, using 11,880 pounds of material.
Required:
1. Compute the materials price and quantity variances for the month.
2. Compute the labor rate and efficiency variances for the month.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Direct material:
Standard Quantity= 6.8 pounds per unit
Standard cost= $3 per pound
Direct labor:
Standard hours= 0.40
Standard cost= $13 per hour
Direct material purchased= 13,200 punds
Direct material used= 11,880 pounds
Direct material cost= $2.90 per pound.
Production= 1,320 units
With the information provided, we can only calculate the direct material price and quantity variance. We don't have the actual direct labor hours and costs.
To calculate the direct material variances, we need to use the following formulas:
Direct material price variance= (standard price - actual price)*actual quantity
Direct material price variance= (3 - 2.9)*13,200= $1,320 favorable
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Direct material quantity variance= (6.8*1,320 - 11,880)*3
Direct material quantity variance= (8,976 - 11,880)*3= $8,712 unfavorable
RBS Company’s top selling item is a Pen Set. RBS Company expects to sell 100 Pen Sets per month for the next 12 months. RBS Company purchases the Pen Sets from a supplier for $25 dollars each, and incurs a cost of $50 dollars for each order that they place. RBS Company estimates that their inventory carrying cost is 20% annually. what is RBS Company’s EOQ for pen set?
Answer:
EOQ = 155 units
Explanation:
Economic order quantity is the quantity at which business incur minimum cost. This is the level of order where the holding cost equals to the ordering cost of the business.
As per given data
Annual Demand = 100 per week x 12 weeks in a year = 1,200 bolts
Ordering cost = $50
Carrying cost = $25 x 20% = $5
EOQ = [tex]\sqrt{\frac{2 X S X D}{H} }[/tex]
EOQ = [tex]\sqrt{\frac{2 X 50 X 1,200}{5} }[/tex]
EOQ = 154.92 units = 155 units
If RBS Company’s top selling item is a Pen Set. RBS Company expects to sell 100 Pen Sets per month for the next 12 months. what will be RBS Company’s EOQ for pen set is 155
Using this formula
EOQ=√[2(Ordering costs)(Demand )] ÷Holding costs
Where:
Ordering costs=50
Demand=(100×12)=1200
Holding costs=0.20×25=5
Let plug in the formula
EOQ=√[2 x 50x 1200] ÷0.20x25
EOQ= √120,000/5
EOQ= √24,000
EOQ= 154.91
EOQ= 155 (Approximately)
Inconclusion if RBS Company’s top selling item is a Pen Set. RBS Company expects to sell 100 Pen Sets per month for the next 12 months. what will be RBS Company’s EOQ for pen set is 155.
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There are five different ways that we can measure legal (monetary) damages: 1) compensatory, 2) consequential, 3) nominal, 4) punitive, and 5) liquidated. Each of these attempts to estimate some aspect of injury caused by the breach of contract. While compensatory and consequential damages complement each other and are sometimes collectively called actual damages. Actual damages mutually exclude the award of nominal or liquidated damages. Nominal damages like liquidated damages preclude any other type of damage award. Finally, punitive damages will not be awarded for breach of contract because it would be contrary to public policy. How would awarding punitive damages for breach of contract harm society?
Answer:
Punitive damages are those harms that surpass basic pay and are granted with an expectation to rebuff the respondent. The essential target of reformatory harm isn't to remunerate the oppressed party however to rebuff the gathering that hosts irritated or wronged the bothered get-together.
Granting punitive damages for penetrate of agreement can conceivably hurt the general public. This is on the grounds that numerous penetrates of agreement can be because of conduct of the culpable party which is neither intentional nor careless. Reformatory harms should just be restricted and material to tort cases and should just be utilized to rebuff those bad behaviors that are conscious and foolish. Anyway utilizing correctional activities to rebuff somebody who has penetrated an agreement because of specific occasions or circumstances that were not in his control will be crooked and uncalled for.
Punitive damages are semi criminal in nature and ordering and clubbing all break of agreement (despite the fact that not purposeful or not having components of dishonesty, malevolence or wanton) as semi criminal in nature will be in opposition to open arrangement and will hurt the general public.
Pro-Am Audio is a company that is contracted to DJ private events. Due to a recent increase in bookings, Pro-Am is considering the purchase of another mobile DJ unit. Pro-Am uses the payback method to evaluate its investments. The mobile DJ unit will cost $12,000, has a useful life of 10 years, and will generate $2,000 in net cash inflows per year. The residual value of the unit is $1,000. What is the payback period for the mobile DJ unit?
Answer:
6 years
Explanation:
Payback period calculates the amount of time it takes to recover the amount invested in a project to be recovered from the cumulative cash flow.
Payback period = amount invested / cash flows
$12,000 / $2,000 = 6 years
I hope my answer helps you
The payback period for the new mobile DJ unit costing $12,000 with an annual net cash inflow of $2,000 is 6 years.
The question is about calculating the payback period for a new mobile DJ unit for a company called Pro-Am Audio. This is a financial concept often used in capital budgeting to determine the time required to recover the initial investment in a project. To calculate the payback period, we divide the initial cost of the investment by the annual net cash inflow generated by that investment.
The mobile DJ unit has a cost of $12,000 and generates $2,000 in net cash inflows per year. Since the residual value is $1,000 and is not factored into the payback period calculation for this method, we use only the annual net cash inflows for our calculation. The payback period can be computed as follows:
Payback Period = [tex]\frac{ Initial Investment}{ Annual Net Cash Inflow}[/tex]
Payback Period = $[tex]\frac{12,000}{2000}[/tex] per year
Payback Period = 6 years
Therefore, the payback period for the mobile DJ unit is 6 years.
What is the four-firm concentration ratio in an industry with the following market shares? Firm A 11.2 Firm C 5.1 Firm E 3.6 Firm G 1.6 Firm B 7.7 Firm D 4.6 Firm F 2.2 Other Firms 64.0 Instructions: Enter your response as a percent rounded to one decimal place. Concentration ratio: 1.6 percent
Answer: 28.6%
Explanation:
The four firm concentration ratio is a matrix that shows how much control the 4 largest firms in a market have.
It is calculated by summing the market share of the four largest firms in the industry.
So calculating for it would be
Four firm concentration ratio = 11.2%(firm A) + 7.7% (firm B) + 5.1% (firm C) + 4.6% (firm D)
= 28.6%
The four-firm concentration ratio for the above industry is 28.6%
The economy of Elmendyn contains 900 $1 bills. If people hold all money as currency, the quantity of money is $ . If people hold all money as demand deposits and banks maintain 100 percent reserves, the quantity of money is $ . If people hold equal amounts of currency and demand deposits and banks maintain 100 percent reserves, the quantity of money is $ . If people hold all money as demand deposits and banks maintain a reserve ratio of 12.5 percent, the quantity of money is $ . If people hold equal amounts of currency and demand deposits and banks maintain a reserve ratio of 12.5 percent, the quantity of money is $ .
Answer:
a) 900 dollar as all is M0
b) 900 as the deposit have no multiplier effect
c) 900 as there is no multiplier effect
d) 7,200 taking into consideration the multipler effect from the bank deposit.
e) 4,050 considering the deposit multiplier effect
Explanation:
a; b ; c ) as there is no multiplier effect the quantity of money matches the nominal currency.
d)
M0 (currency and coins) 0
M1 900 / 0.125 = 7,200
e)
currency : 900 / 2 = 450 M0
deposit :
450 / 0.125 = 3,600 M1
Total 4,050
Final answer:
The quantity of money in Elmendyn varies with banking practices: $900 as currency or with 100% reserves, $7200 with demand deposits at 12.5% reserves, and $4050 with equal parts currency and demand deposits at 12.5% reserves.
Explanation:
The economic activities in Elmendyn involving $1 bills, request an understanding of how the money supply can change based on different banking scenarios. Here's how the quantity of money is calculated:
If all money is held as currency, the quantity of money is simply the total number of bills, which is $900.If all money is held as demand deposits and banks maintain 100 percent reserves, the quantity of money remains $900, as no new money is created.If people hold equal amounts of currency and demand deposits and banks also maintain 100 percent reserves, the quantity of money is still $900, as there's no lending to increase the supply.If all money is held as demand deposits and banks maintain a reserve ratio of 12.5 percent, the money multiplier is 1 / 0.125 = 8. Therefore, the quantity of money increases to $900 * 8 = $7200.If people hold equal amounts of currency and demand deposits and banks maintain a reserve ratio of 12.5 percent, half of the $900 is in currency, and the other half can be multiplied. Thus, the total quantity of money is $450 in currency + $450 * 8 from demand deposits = $4050.The money multiplier effect comes into play when banks hold less than 100 percent in reserves and loan out the rest, leading to an increase in the quantity of money in the multi bank system.
June Corp. sells one product and uses a perpetual inventory system. The beginning inventory consisted of 80 units that cost $20 per unit. During the current month, the company purchased 480 units at $20 each. Sales during the month totaled 360 units for $43 each. What is the cost of goods sold using the LIFO method
Answer:
$7200
Explanation:
LIFO means last in, first out. It means the last purchased inventory are the first to be sold.
The cost of goods sold = 360 x $20 = $7200
I hope my answer helps you
Answer:
$7,200
Explanation:
The LIFO method of inventory valuation is one in which the last set of inventory items purchased are the first to be sold. This system may not be prudent where the items of inventory are perishable.
Given that sales during the month totaled 360 units, these must have been part of the items purchased during the month at $20 each. Hence, cost of goods sold
= 360 * $20
= $7,200
Linda underpaid her taxes for the current year by $4,000 due to negligence. a. Calculate Linda's accuracy-related penalty for negligence. $ b. Assume that the underpayment of taxes by Linda was determined to be fraudulent, and calculate the total amount of Linda's fraud penalty.
Answer:
a. Linda's accuracy-related penalty for negligence is $ 800.
b. The total amount of Linda's fraud penalty is $3000.
Explanation:
a. Penalty for the negligence of Linda
= $4,000*20%
= $800
Therefore, Linda's accuracy-related penalty for negligence is $ 800.
b. Penalty for fraud of Linda
= $4000*75%
= $3000
Therefore, The total amount of Linda's fraud penalty is $3000.
Adley Abdulwahab (Wahab) opened an account on behalf of W Financial Group, LLC, with Wells Fargo Bank. Wahab was one of three authorized signers on the account. Five months later, Wahab withdrew $1,701,250 from W Financial’s account to buy a cashier’s check payable to Lubna Lateef. Wahab visited a different Wells Fargo branch and deposited the check into the account of CA Houston Investment Center, LLC. Wahab was the only authorized signer on this account. Lateef never received or indorsed the check. W Financial filed a suit to recover the amount. Applying the rules for payment on a forged indorsement, who is liable?
Answer:
The bank must re-credit the customers account when a check is paid with forged signature.
Explanation:
The answer to the given question is that :
The bank must re-credit the customers account when a check is paid with forged signature. It is a general rule as a forged signature does not has a legal effect on a check. This is the only reason the bank requires signature cards from each customer to verify the signature of a customer on the check. Bank verifies signature when the threshold exceeds a certain limit.
The liability in this case depends on whether Wells Fargo Bank is considered a holder in due course or not. If Wells Fargo is a holder in due course, they would not be liable for the amount. However, if Wells Fargo is not a holder in due course, they would be liable for the amount.
Explanation:According to the rules for payment on a forged indorsement, the liability in this case would depend on whether Wells Fargo Bank is considered a holder in due course or not. If Wells Fargo is a holder in due course, they would not be liable for the amount and W Financial would not be able to recover it. However, if Wells Fargo is not a holder in due course, they would be liable for the amount and W Financial would be able to recover it.
In order for Wells Fargo to be considered a holder in due course, they must meet certain requirements, such as taking the check for value, in good faith, and without notice of any claims or defenses against it. If the requirements are not met, then Wells Fargo would not be a holder in due course and would be liable for the amount.
In this case, it is not clear whether Wells Fargo is a holder in due course or not, as more information would be needed to determine if they met the requirements. However, if they are not a holder in due course, they would be liable for the amount and W Financial would be able to recover it.
In 2014, Steinrotter Construction Corp. began construction work under a 3-year contract. The contract price was $1,800,000. Steinrotter uses the percentage-of-completion method for financial accounting purposes. The income to be recognized each year is based on the proportion of cost incurred to total estimated costs for completing the contract. The financial statement presentations relating to this contract at December 31, 2014, are shown below.Balance Sheet Accounts receivable $32,400 Construction in process 117,000 Less: Billings 110,700 Costs and recognized profit in excess of billings 6,300 Income Statement Income (before tax) on the contract recognized in 2014 $35,100 How much cash was collected in 2014 on this contract?
Answer:
$78,300
Explanation:
The computation of the cash collected is shown below:
Cash collection = Billings cost - account receivable
= $110,700 - $32,400
= $78,300
Since we have to compute the cash collected so we deduct the account receivable from the billings so that the accurate amount could arrive
Therefore, all the other information which is mentioned is not relevant. Hence, ignored it
The planning budget for October was based on serving 23 customers, but a total of 19 customers were actually served during October. The activity variance for total expenses for October would have been closest to: $6,400 F $6,400 U $7,900 U $7,900 F
Answer:
$6400 F
Explanation:
Note that, The Fixed expense remains constant irrespective of the no. customers served.
Therefore it is irrelevant and won't be used in the calculation of activity variance.
Again an activity variance occurs to the difference between actual level of used flexible budget and assumed in planning budget.
Therefore, calculating activity variance in the given case, it will be following:
Actual expense - Estimated Expense
= (Employee, salary and wages + Travel expenses) per customer X [Planned no. of customers served - Actual no. of customers served]
=$(1100+500) X [23-19]
=$6400 F.
Sunland Company issues $1.90 million, 10-year, 8% bonds at 98, with interest payable each January 1. Your answer is correct. Prepare the journal entry to record the sale of these bonds on January 1, 2019. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 SHOW LIST OF ACCOUNTS SHOW SOLUTION LINK TO TEXT Your answer is partially correct. Try again. Assuming instead that the above bonds sold for 102, prepare the journal entry to record the sale of these bonds on January 1, 2019. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 Click if you would like to Show Work for this question: Open Show Work SHOW LIST OF ACCOUNTS LINK TO TEXT
Answer:
1. Jan 1
Dr Cash $1,862,000
Dr Discount on bonds $38,000
Cr Bonds payable $1,900,000
2.
Dr cash $1,938,000
Cr bonds payable $1,900,000
Cr Premium bonds $38,000
Explanation:
Sunland Company
1. Jan 1
Dr cash
Dr Cash $1,862,000
Dr Discount on bonds $38,000
Cr Bonds payable $1,900,000
Cash ($1,900,000 x 0.98) = $1,862,000
2.Assuming instead that the above bonds sold for 102
Dr cash $1,938,000
Cr bonds payable $1,900,000
Cr Premium bonds $38,000
Cash ($1,900,000 x 1.02) = $1,938,000
Final answer:
With an increase in market interest rates to 9%, you would expect to pay less than the bond's $10,000 face value. To calculate the price, discount the bond's remaining cash flows at the new rate, yielding a value of approximately $9,724.77 that you might be willing to pay for it.
Explanation:
The scenario presents a situation where a local water company issued a $10,000 ten-year bond at an interest rate of 6%. When contemplating the purchase of this bond one year before its maturity, the current market interest rate has risen to 9%. This rise in interest rates implies that the market value of the bond will decrease below its face value because investors can obtain a higher return elsewhere. Therefore, you would expect to pay less than the $10,000 face value for the bond.
To calculate the price you would be willing to pay for this bond, you would discount the remaining cash flows (one year of interest plus the principal at maturity) back at the current market rate of 9%. The bond would pay $600 in interest (6% of $10,000), and the repayment of the $10,000 principal at the end of the year. The calculation is as follows:
Present value of interest payment: $600 / (1 + 0.09) = $550.46Present value of principal repayment: $10,000 / (1 + 0.09) = $9,174.31Adding these together gives you a value you might be willing to pay for the bond:
$550.46 + $9,174.31 = $9,724.77
On January 1, 2021, Dreamworld Co. began construction of a new warehouse. The building was finished and ready for use on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 $ 316,000 September 1, 2021 $ 462,000 December 31, 2021 $ 462,000 March 31, 2022 $ 462,000 September 30, 2022 $ 316,000 Dreamworld had $5,400,000 in 14% bonds outstanding through both years. What was the final cost of Dreamworld's warehouse?
The final cost of Dreamworld's warehouse is $1554000
Explanation:
Expenditure Time period Average expenditure
January 1,2021 300000 12/12 300000
September 1,2021 450000 4/12 150000
December 31,2021 450000 0/12 0
Total 1200000 450000
Interest capitalized for 2021 54000 = 450000 into 12%
Total expenditure till Jan 1, 2022 1254000 = 1200000 + 54000
Expenditure Time period Average expenditure
Total expenditure
till Jan 1,2022 1254000 9/9 1254000
March 31,2022 450000 6/9 300000
September 30,2022 300000 0/9 0
Total 1554000
Therefore, the Option B $1,554,000 is correct final cost of Dreamworld's warehouse.
Final answer:
The final cost for Dreamworld's warehouse is calculated by summing up all construction related expenditures, which total to $2,018,000.
Explanation:
The final cost of Dreamworld's warehouse is the sum of all expenditures made over the construction period. This includes payments made on five different dates:
January 1, 2021, for $316,000September 1, 2021, for $462,000December 31, 2021, for $462,000March 31, 2022, for $462,000September 30, 2022, for $316,000To calculate the final cost of Dreamworld's warehouse, we need to add up these amounts:
$316,000 + $462,000 + $462,000 + $462,000 + $316,000 = $2,018,000.
Hence, the total expenditure for the warehouse construction is $2,018,000.
Carlos Naturals manufactures bulk quantities of cleaning fluids. The company currently sells 700 containers a month at a sales price of $ 28 per unit. The addition of a new disinfectant will result in a sales price of $ 30 per unit for the improved product. It would cost a total of $ 4 comma 400 per month to make the alteration. Operating income would
Answer:
Operating income would be $ 16,600
Explanation:
Consider the new circumstance addition of a new disinfectant.
Incremental Costs and Revenues - addition of a new disinfectant
Sales (700× $ 30) 21,000
Alteration Cost 4,400 (4,400)
Net Income 16,600
Therefore Operating income would be 16,600
Based on the information given Operating income would decrease by $3,000
Operating income:
Sales $21,000
(700× $ 30)
Sales Addition ($19,600)
(700× $28)
Alteration Cost ($4,400)
Operating Income -$3,000
Inconclusion the Operating income would decrease by $3,000.
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Round Hammer is comparing two different capital structures: An all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 180,000 shares of stock outstanding. Under Plan II, there would be 130,000 shares of stock outstanding and $2.6 million in debt outstanding. The interest rate on the debt is 8 percent, and there are no taxes. a. If EBIT is $575,000, what is the EPS for each plan
Answer:
EPS of Plan I = $3.19
EPS of Plan II = $2.82
Explanation:
Under Plan I:
Plan I's Earning per share (EPS) = EBIT ÷ Number of shares = $575,000 ÷ 180,000 = $3.19
Under Plan II:
Interest = $2,600,000 × 8% = $208,000
Earning after Interest = EBIT - Interest = $575,000 - $208,000 = $367,000
Plan II's EPS = $367,000 ÷ 130,000 = $2.82
Buffalo Company purchased a heavy-duty truck on July 1, 2014, for $30,360. It was estimated that it would have a useful life of 10 years and then would have a trade-in value of $6,480. The company uses the straight-line method. It was traded on August 1, 2018, for a similar truck costing $42,189; $16,699 was allowed as trade-in value (also fair value) on the old truck and $25,490 was paid in cash. A comparison of expected cash flows for the trucks indicates the exchange lacks commercial substance. What is the entry to record the trade-in
Answer:
The answer is given below;
Explanation:
Cost of Truck July 1,2014 $30,360
Accumulated Depreciation(30,360-6,480)/10=2,388*4=($9,552)
Written Down Value as at August 1 ,2018 $20,808
Truck New Dr.$42,189
Loss on Old Truck ($20,808-16,699) Dr.$4,109
Accumulated Depreciation Dr.$9,552
Cash Cr.$25,490
Old Truck-Cost Cr.$30,360
There was a loss of $4,109 on old truck as it was traded below its written down value.
Rory Company has a machine with a book value of $75,000 and a remaining five-year useful life. A new machine is available at a cost of $112,500, and Rory can also receive $60,000 for trading in its old machine. The new machine will reduce variable manufacturing costs by $12,000 per year over its five-year useful life. Calculate the incremental income.
Answer: $7,500
Explanation:
In calculating the Incremental income we will add the amount of variable Manufacturing costs Rory Company will save as well as the income they will get from selling the old machine and then subtract the cost price of the new machine.
Starting off we will calculate the amount of savings they will make by using the new machine,
= $12,000 x 5 years
= $60,000
Calculating the Incremental income therefore we have,
= 60,000 + 60,000(from selling old machine) - 112,500 (cost of new machine)
= $7,500
The incremental income of buying the new machine is $7,500.
If you need any clarification do comment.
The incremental income is $7,500.
Explanation:
The incremental income can be calculated by comparing the costs and savings associated with the old machine and the new machine.
First, calculate the net cost of the new machine:
Cost of new machine: $112,500Trade-in value of old machine: $60,000Net cost of new machine: $112,500 - $60,000 = $52,500
Next, calculate the total variable manufacturing cost savings over the five-year useful life:
Variable manufacturing cost savings per year: $12,000Useful life of new machine: 5 yearsTotal variable manufacturing cost savings: $12,000 x 5 = $60,000
Finally, calculate the incremental income:
Incremental income = Total variable manufacturing cost savings - Net cost of new machineIncremental income = $60,000 - $52,500 = $7,500
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