Geographic markets for products are limited to a greater or lesser extent by the cost of transporting the product and legal barriers, such as those imposed by entry regulation that may prohibit trade among jurisdictions. Transportation costs of shipment between two areas may create a differential in prices in the two areas.
Explanation
The health costs in these organisations are also too high which can only be borne by the elite class, thereby giving them a position of monopoly power in the healthcare market.One must define first the market for the product of interest and second, the geographic market in which trade in the product occurs.
For both product and geographic market definitions, two types of substitutability are relevant:
Demand substitutability
Supply substitutability
Demand substitutability depends upon the extent to which consumers of the good or service are able to switch to substitutes for that good or service in response to a price increase.
In contrast, supply substitutability depends upon the extent to which existing providers could expand output, and/or firms not currently producing the good or service could enter the market for that good or service. In specific applications, the product market is defined first.
Then, given a definition of product, the geographic area over which commerce in the product takes place is examined.
When the cost of transportation is high relative to cost of production, geographic markets tend to be small; the converse holds true when relative transportation cost is low.
Choosing which percent rule to apply depends on the comparative risks of under- or overstating the size of the market.
Barriers for new competitors are:
Price: A successful company with a large market share may be able to charge prices substantially higher than what customers would be willing to pay if they had more options. If a competitor tries to enter the market, the established company can often afford to lower its own prices below what the competitor can match.
Contractual: Some barriers to entry may be illegal and may violate antitrust regulation. A new competitor entering the same market could find it difficult or impossible to get its products into any stores and negotiation with existing distributors for prices.
Location: Companies with the ability to operate in any part of the world can create a barrier to competition by locating manufacturing facilities in places with much lower labor costs or regulatory requirements.
Regulatory: Regulations are intended to serve the public good by promoting better safety and environmental standards or promoting competition.
The geographic market of large healthcare organizations refers to their operational regions, while the product market includes the range of healthcare services they offer. Barriers to entry for new competitors include high start-up costs, regulatory requirements, and established reputations.
Explanation:The geographic market of large healthcare organizations like the Mayo Clinic, Cleveland Clinic, Kaiser Permanente, and Johns Hopkins can be defined as the region or area in which these organizations operate and provide healthcare services. These organizations usually have a national or even international presence, serving patients from different parts of the country or even around the world.
The product market of these healthcare organizations refers to the range of healthcare services and products they offer. This can include medical treatments, surgeries, diagnostic services, preventive care, specialized clinics, and research initiatives.
Barriers that keep new competitors from entering these markets include:
High start-up costs and capital requirements: Establishing large healthcare organizations requires significant financial investments in infrastructure, technology, equipment, and skilled personnel.Regulatory requirements and compliance: Healthcare organizations need to comply with various regulations and licensing requirements imposed by government agencies at local, state, and national levels.Established reputation and brand recognition: Large healthcare organizations like Mayo Clinic, Cleveland Clinic, Kaiser Permanente, and Johns Hopkins have built strong reputations and brand recognition over the years, making it difficult for new competitors to gain trust and attract patients.Learn more about Barriers to Entry here:https://brainly.com/question/35090304
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On August 1, Ernie wrote to Elsie offering to sell Elsie his car for $7,600, and he promised to hold the offer open for ten days. On August 4 Ernie changed his mind; he sent Elsie a letter revoking the offer. On August 5 Elsie e-mailed Ernie, accepting the offer. Ernie’s letter of revocation arrived on August 6. Is there a contract? Explain.
Answer:
Yes, the contract is still valid.
Explanation:
Let us first clarify some terms first.
A contract is referred to as a legally binding agreement that is recognized, known and governs the rights and duties of the parties involved in an agreement. A contract is legally enforceable because it meets the features and approval of the law. An agreement basically involves the exchange of goods, transactions, services, money, or promises. In the case of breach of contract, the law awards the injured party access to legal remedies which include damages and cancellation.
Letter of revocation is an act by which a person having authority, calls back or in other words annuls a power, gift, or benefit, which had been bestowed upon another.
Yes, the contract still holds. This is due to the reason that the letter had a date mentioned on it which is August 4, a day before the contract was accepted even though the revocation letter arrived late.
Therefore, as regards to the date on the letter, the contract is still valid.
Final answer:
A binding contract appears to have been formed between Ernie and Elsie for the sale of Ernie's car because Elsie accepted the offer via email before receiving Ernie's revocation letter. According to the mailbox rule, the acceptance is effective when dispatched, making Elsie's acceptance on August 5 effective and the contract valid.
Explanation:
The situation described involves contractual obligations and whether an agreement has been formed between Ernie and Elsie. Under contract law, an offer can typically be revoked before it has been accepted. In this case, Ernie made an offer to sell his car to Elsie for $7,600 and agreed to keep the offer open for ten days. However, Ernie changed his mind and attempted to revoke the offer on August 4, sending Elsie a letter of revocation. Elsie sent an email accepting the offer on August 5, before receiving the letter of revocation which arrived on August 6.
As per the mailbox rule, which is widely accepted in contract law, an acceptance is effective when dispatched, as long as the communication is by an expressly or impliedly authorized means of communication. Since Elsie's acceptance via email was sent before Ernie's revocation was received, the acceptance would generally be considered effective on August 5, resulting in a binding contract. Ernie's revocation would only be effective upon receipt, which happened after the acceptance was already sent. Therefore, based on the given information, it appears that a contract was formed when Elsie emailed her acceptance on August 5.
Check My Work As a counselor at this summer camp, you are coming into contact with a lot of coworkers, campers, and parents from different states and countries, various religious backgrounds, and various economic situations. Use the drop down menus to create a two-word phrase that describes this aspect of your work experience.
Answer: Cultural diversity
Explanation:
Cultural diversity this is when a population a group of people with differences are well represented within society or community. These differences include race, age, ethnicity, ability, language, nationality, socioeconomic status, gender, religion, or sexual orientation. The group has a wide range of difference which makes them culturally diverse because a variety of groups are represented. Just like in scenerio in the question the group is well diversed because a wide variety of people or group are represented.
Johns Company manufactures products R, S, and T from a joint process. The following information is available: Product R S T Total Units produced 12,000 ? ? 24,000 Sales value at split-off ? ? $ 50,000 $ 200,000 Joint costs $ 48,000 ? ? $ 120,000 Sales value if processed further $ 110,000 $ 90,000 $ 60,000 $ 260,000 Additional costs if processed further $ 18,000 $ 14,000 $ 10,000 $ 42,000 Assuming that joint product costs are allocated using the relative-sales-value at split-off approach, what was the sales value at split-off for products R and S? Product R Product S A) $ 55,000 $ 75,000 B) $ 63,000 $ 81,000 C) $ 80,000 $ 70,000 D) $ 91,000 $ 83,000 E) $ 101,000 $ 92,000
Answer:
C) $ 80,000 $ 70,000
Explanation:
R = ($48,000/$120,000) x $200,000
=0.4×$200,000
= $80,000
S = $200,000-$50,000-$80,000
= $70,000
Therefore the sales value at split-off for products R is $80,000 and S $70,000
Kephlee is an amusement park operator and provided the following select financial data:
($ in millions) December 31, 2020
Revenue $121.5
Cash proceeds from the sale of a merry go round $15.4
Cash flows from operations $121.4
December 31, 2019 December 31, 2020
Accounts receivable 95.4 123.5
Deferred revenue 34.6 45.6
Based on the information provided, what were cash sales during 2020?
A. $136.9
B. $119.8
C. $104.4
D. $93.4
E. $82.4
To calculate cash sales during 2020, subtract the change in accounts receivable from the revenue.
Explanation:To calculate cash sales during 2020, we need to consider the change in the Accounts Receivable balance. Cash sales are the portion of revenue that is collected in cash rather than through accounts receivable. We can calculate cash sales by subtracting the change in accounts receivable from the revenue.
Change in Accounts Receivable = Ending Accounts Receivable - Beginning Accounts Receivable
Change in Accounts Receivable = $123.5 million - $95.4 million = $28.1 million
Cash Sales = Revenue - Change in Accounts Receivable
Cash Sales = $121.5 million - $28.1 million = $93.4 million
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Black Diamond Company produces snow skis. Each ski requires 2 pounds of carbon fiber. The company’s management predicts that 6,400 skis and 7,400 pounds of carbon fiber will be in inventory on June 30 of the current year and that 164,000 skis will be sold during the next (third) quarter. A set of two skis sells for $440. Management wants to end the third quarter with 4,900 skis and 5,400 pounds of carbon fiber in inventory. Carbon fiber can be purchased for $13 per pound. Each ski requires 0.5 hours of direct labor at $18 per hour. Variable overhead is applied at the rate of $8 per direct labor hour. The company budgets fixed overhead of $1,796,000 for the quarter. Required:
1. Prepare the third-quarter production budget for skis.
2. Prepare the third-quarter direct materials (carbon fiber) budget; include the dollar cost of purchases.
3. Prepare the direct labor budget for the third quarter.
4. Prepare the factory overhead budget for the third quarter.
Answer:
1. Production budget for third quarter for skis - 162,500 skis
2. Direct materials budget for Carbon Fiber for quarter 3 - 323,000 pounds
Cost of carbon Fiber purchases - $ 4,199,000
3. Direct Labor budget for quarter 3 - $ 1,462,500
4. Factory overhead budget for quarter 3 - $ 2,446,000
Explanation:
Computation of Production budget for quarter 3 for skis
Closing inventory- skis end of quarter 3 4,900 skis
Add: Sales for quarter 3 - skis 164,000 skis
Less: Opening inventory - skis ( 6,400) skis
Production for skis in units 162,500 skis
Computation of direct material budget for quarter 3
Closing inventory Carbon fiber 5,400 pounds
Add: Consumption of Carbon fiber in production
162,500 skis * 2 pounds 325,000 pounds
Less: Closing inventory Carbon fiber ( 7,400) pounds
Direct Materials carbon Fiber Budgeted Purchases 323,000 pounds
Cost of Carbon Fiber Purchases ($ 13*323,000 pounds) $ 4,199,000
Computation of direct labor budget for quarter 3
Production of skis for quarter 3 162,500 skis
Direct Labor hours per unit 0.5 hours
Cost per Direct Labor Hours $ 18 per hour
Total Direct Labor Budget (162,500 skis* 0.5 hours * $ 18 ) $ 1,462,500
Computation of Factory overhead budget for quarter 3
Production of skis for quarter 3 162,500 skis
Variable costs $ 8 per labor hours ( 81,250 hours * $ 8) $ 650,000
Fixed overhead per quarter $ 1,796,000
Total overhead for quarter 3 $ 2,446,000
Answer:
June 30:
estimated inventory of skis = 6,400
estimated inventory of carbon fiber = 7,400
164,000 skis will be sold during next quarter
each pair of skis sells for $440
Inventory for September 30:
estimated inventory of skis = 4,900
estimated inventory of carbon fiber = 5,400
cost of carbon fiber = $13 per pound x 2 = $26 per ski
direct labor = $9 per ski
variable overhead per ski = $4
fixed overhead = $1,796,000
1 ) Production budget:
expected sales 164,000 units
- beginning inventory 6,400 units
+ ending inventory 4,900 units
budgeted production 162,500 units
2) Materials budget
budgeted production 162,500 units
materials required per unit 2 pounds
total materials need for Px 325,000 lbs.
+ lbs. ending inventory 5,400 lbs.
total materials needed 330,400 lbs.
- beginning inventory 7,400 lbs.
purchase requirement 323,000 lbs.
cost per pound $13
total materials budget $4,199,000
3) Direct labor budget
budgeted production 162,500 units
direct labor per unit 0.5 hours
total direct labor hours 81,250 hours
cost per direct labor hour $18
total direct labor budget $1,462,500
4) Factory overhead budget
total direct labor hours 81,250 hours
cost per direct labor hour $8
total factory overhead $650,000
fixed overhead $1,796,000
total factory overhead budget $2,446,000
Assume the market for cell phones is an oligopoly. Further assume that cell phone consumption and production generate no negative externalities. Imagine that all the companies in the oligopoly agree to collude and charge a single price for their cell phones.
Which of the following is true?
A. This agreement is in the best interest of society because the price of cell phones will be higher than if there had been no collusive agreement.
B. This agreement is in the best interest of society because the quantity of cell phones sold will be significantly less than the quantity that would be sold if the cell phone market were perfectly competitive
C. This agreement is not in the best interest of society, because there will be less competition and the price of cell phones will be significantly above marginal cost.
D. This agreement is not in the best interest of society, because there will be less competition and the price of cell phones will be significantly below marginal cost.
Answer:
D. This agreement is not in the best interest of society, because there will be less competition and the price of cell phones will be significantly below marginal cost.
Explanation:
If the market for cell phones is an oligopoly market(Oligopoly market is a market situation where few firms are dominating the market), and the consumption and production of cell phone generate no negative externalizes and the major companies desired to collude and charge a single price for their product then this agreement is not in the best interest of society, because there will be less competition and the price of cell phones will be significantly below marginal cost.
Evan Engineering Group receives royalties on a technical manual written by two of its engineers and sold to a publishing company. Royalties are 10% of net sales, receivable on October 1 for sales in January through June and on April 1 for sales in July through December of the prior year. Sales of the manual began in July 2015, and Evan accrued royalty revenue on $30,010 of sales at December 31, 2015. Evan received royalties of $2,613 on April 1, 2016. On October 1, 2016 Evan received royalties of $4,631. The 2nd half of 2016 sales were estimated to be $43,220 What is Evan's 2016 royalty revenue
Answer:
$8,565
Explanation:
Sales revenue of the year 2015 = $30,010
Accrued royalty revenue on December 31, 2015 = 30,010 x 10%
= $3,001
Evan received royalties of $2,613 on April 1, 2016.
Hence, royalty receivable for the year ended December 31, 2015 = 3,001- 2,613
= $388
On October 1, 2016, Evan received royalties of $4,631.
Thus, royalty received for the first half of the year 2016 = 4,631 - 388
= $4,243
The 2nd half of 2016 sales were estimated to be $43,220
Hence, royalty for the second half of the year 2016 = 43,220 x 10%
= $4,322
Evan's 2016 royalty revenue = Royalty revenue for the first half + Royalty revenue for the second half
= 4,243 + 4,322
= $8,565
Riverbed Company designated Jill Holland as petty cash custodian and established a petty cash fund of $236. The fund is reimbursed when the cash in the fund is at $31, which it is. Petty cash receipts indicate funds were disbursed for office supplies $94 and miscellaneous expense $89. Prepare journal entries for the establishment of the fund and the reimbursement
To establish the petty cash fund, debit petty cash and credit cash. When the fund is reimbursed, debit the expenses (office supplies and miscellaneous expenses), the cash over and short (if any), and credit cash.
Explanation:The journal entries to establish the fund and the reimbursement would be as follows:
Firstly, when the Riverbed Company established the petty cash fund, the journal entries would be: Petty Cash $236, with the corresponding entry being Cash $236. This debits the petty cash and credits the cash, indicating the funding of the petty cash fund.When it's time to reimburse the fund, we add up the receipts to determine the total expenditure, which is $94 (office supplies) + $89 (miscellaneous expense) = $183. The entries would be: Office Supplies $94, Miscellaneous Expense $89, and Cash Over and Short $2 (because $236 - $31 - $183 = $22 which is the amount unaccounted for, this is considered a cash over and short), with the corresponding entry being Cash $205 (the amount to bring the petty cash back to the established limit of $236).Learn more about journal entries here:https://brainly.com/question/33762471
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Your investment portfolio consists of $15 comma 000 invested in only one stocklong dashAmazon. Suppose the risk-free rate is 5 %, Amazon stock has an expected return of 12 % and a volatility of 40 %, and the market portfolio has an expected return of 10 % and a volatility of 18 %. Under the CAPM assumptions, a. What alternative investment has the lowest possible volatility while having the same expected return as Amazon? What is the volatility of this investment? b. What investment has the highest possible expected return while having the same volatility as Amazon? What is the expected return of this investment? Hint: Make sure to round all intermediate calculations to at least five decimal places.
Answer:
a)
The CAPM hypothesis states that the effective market is utilized place in the market and has the maximum eminent expected return of any assortment for a given randomness and the smallest variability for a assumed expected return. By allotment utilized place in the market assortment, you can achieve a standard return,
Thus,
Expected Rate of Return = [Risk free Rate + Beta × (Market Risk - Risk free Rate)]
Beta = [Expected Rate of Return – Risk Free Rate] / [Market Risk - Risk free Rate]
Beta = [12% - 5%] / [10% -5%]
Beta = 7/5
Beta =1.4
The final possible instability while taking the same estimated rate of return as Amazon is $21,000 ($15,000 × 1.4) which indicate that it borrows $6,000 ($21,000 - $15,000). Now the -$6,000 is specified as strength benefit. So the volatility of the asset is,
Volatility = [Volatility of Asset x Beta]
Volatility = [18% × 1.4]
Volatility = 0.252 or 25.20%
Therefore the volatility is less than the volatility of Amazon.
b)
The market share has a instability of "n". The corresponding instability of Amazon will be 2.22 (40%/18%). So the assortment with the most notable predictable give back that has a faint variability from Amazon is $33,333.33 ($15,000x 2.22) which will be the market assortment and it also uses $18,333.33 ($33,333.33 - $15,000). Here the -$18,333.33 is specified as strength asset. So the return is,
Expected Return = [Risk free Rate + Beta × (Market Risk – Risk free Rate)]
Expected Return = [5%+ 122 × (10% - 5%)]
Expected Return = [5%+ 122 × 5%]
Expected Return = [0.05+0.111111]
Expected Return = 0.161111 or1 6.11%
Therefore the volatility is higher than the expected return of Amazon.
Which of the following best demonstrates a key metric in the innovation category of a balanced scorecard? Multiple Choice Satisfying faculty and staff Approaching donors to cover current operational expenses Increasing the number of students Collaborating with a community-based college Developing new course offerings
Answer:
D. Developing new course offerings.
Explanation:
The balanced scorecard of innovation can be measured based on four key metrics which border on input, processes, outputs, and outcome. Organizations want to improve the way they are seen by their customers. Different organizations have to develop scorecards that suit them.
For an educational institution, developing new course offerings is an innovative idea which can improve the value the school in question has to offer.
The balanced scorecard has four categories: financial, customer, internal process, innovation. Within the innovation category, the key metric that would best demonstrate innovation is 'Developing new course offerings', as it shows ability to learn, improve and innovate.
Explanation:The balanced scorecard is a system of performance indicators that provides a rounded view of an organization's performance. It comprises of four categories: financial, customer, internal process, and learning and growth which is sometimes referred to as innovation.
From the multiple choices given, the best demonstration of a key metric in the innovation category of a balanced scorecard would be: 'Developing new course offerings'. The innovation category typically captures the ability of the organization to learn, improve and change - innovate - to meet its mission, goals, and demands in its environment. Therefore, developing new course offerings align with the innovation category as it embodies creating something new and different, and implies a commitment to continued learning and growth.
Metrics in this category usually measure things like new programs or services launched, improvement in processes, or staff learning new skills.
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The country of Meditor, a small country with a closed economy, uses the merit as its currency. Recent national income statistics showed that it had GDP of $600 million merits, taxes of $150 million merits, a budget surplus of $40 billion merits, and investment of $100 billion merits. What were its consumption and government expenditures on goods and services?
Answer:
d. $390 million merits and $110 million merits
Explanation:
The computation of the consumption and the government expenditure is shown below:
As we know that
Budget Surplus = Taxes - government expenditure
$40 = $150 - government expenditure
So, the government expenditure is $110 million
In addition,
Gross domestic product = Consumption + investment + government expenditure + net exports
$600 = Consumption + $100 + $110 + $0
So, the consumption is
= $600 - $100 - $110
= $390 million
We simply applied the above formulas in order to find out the consumption and government expenditure
The consumption in Meditor was $390 million merits, and government expenditures on goods and services were $110 million merits, calculated using national income accounting for a closed economy with given GDP, taxes, investment, and budget surplus figures.
Explanation:The question is related to the topic of national income accounting, which is a concept within the field of economics. Specifically, it involves calculating the consumption and government expenditures on goods and services for the country of Meditor. To find the answers, we need to understand the following equation that defines Gross Domestic Product (GDP) for a closed economy:
GDP = Consumption (C) + Investment (I) + Government Spending (G) + (Exports (X) - Imports (M))
As Meditor is a closed economy, it does not have exports or imports. Thus, the equation simplifies to:
GDP = C + I + G
We are given that GDP = $600 million merits, Investment (I) = $100 million merits, and we have a budget surplus, which is defined as:
Budget Surplus = Taxes (T) - Government Spending (G)
With Taxes (T) = $150 million merits and the Budget Surplus = $40 million merits, we can find Government Spending (G) as follows:
G = T - Budget Surplus
G = $150 million merits - $40 million merits
G = $110 million merits
Now, to calculate the consumption (C), we use the GDP equation:
C = GDP - I - G
C = $600 million merits - $100 million merits - $110 million merits
C = $390 million merits
So, the consumption in Meditor was $390 million merits, and government expenditures on goods and services were $110 million merits.
Suppose that there are customers distributed evenly across a line which runs from 0 to 1. There are two competing vendors that choose where on the line to locate. Customers buy from whichever vendor is closest to their location. If the first vendor is located at 1/3, what is the best response for the second vendor?
a. 2/3
b. 1/2
c. Slightly to the left of 1/3
d. Slightly to the right of 1/3
Answer:
a. 2/3
Explanation:
The best response for second vendor is to locate at (1/3) position only because this way, it will be maximizing it's payoff .
Because first vendor serves all customers to left of (1/3) , It's market share is (1/3).
Now if second vendor locates at (1/3) , then it will get the entire market share to right hand side of (1/3) , which is (2/3) share.
Therefore, The best response for the second vendor is 2/3
Cars from an online service were examined to see how fuel efficiency (highway mpg) relates to cost (in dollars). According to the regression equation, a used car that costs $13,000 is predicted to get about 30.24 miles per gallon. According to the data, the car got 35 miles per gallon. What is the value of the residual for this car?
Answer:
The correct answer is 4.76.
Explanation:
According to the scenario, the computation of the given data are as follows:
Actual value = 35 Miles
Predicted value = 30.24 Miles
So, we can calculate the residual value of the car by using following formula:
Residual Value = Actual Value - predicted value from independent variables
By putting the value in the formula, we get
Residual value = 35 - 30.24
= 4.76
During the month of March, Olinger Company’s employees earned wages of $65,400. Withholdings related to these wages were $5,003 for Social Security (FICA), $7,664 for federal income tax, $3,168 for state income tax, and $409 for union dues. The company incurred no cost related to these earnings for federal unemployment tax but incurred $715 for state unemployment tax.-Prepare the necessary March 31 journal entry to record salaries and wages expense and salaries and wages payable. Assume that wages earned during March will be paid during April. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)Date Account Titles and Explanation Debit CreditMar. 31 -Prepare the entry to record the company’s payroll tax expense.Date Account Titles and Explanation Debit CreditMar. 31
Answer and Explanation:
The journal entries are shown below:
1. Salaries and Wages Expense $65,400
To Wages Payable $49,156
To Federal Withholding Payable $7,664
To FICA Payable $5,003
To State Withholding Payable $3,168
To Union Dues Payable $409
(Being the salaries and wages expense and salaries and wages payable is recorded)
2.
Payroll Tax Expense $5,718
To FICA Payable $5,003
To State Unemployment Payable $715
(Being the payroll expense is recorded)
Nate is a recent graduate who states that he has interned at a major accounting firm so that his value as a candidate for employment increases. A start-up recruits Nate based on his stated credentials without verifying them. Two days into the job, Nate's team lead realizes that Nate does not know much of what he claimed to know during the interview. This scenario best exemplifies
a. adverse selection
b. corporate governance
c. moral hazard
d. shared value creation
The scenario with Nate and the start-up company is an example of adverse selection, where the employer faces imperfect information regarding the candidate's abilities and hires based on misrepresented qualifications.
Explanation:The scenario described in the question best exemplifies adverse selection, which is a situation where one party in a transaction has more or better information compared to another party. In this case, the employer (the start-up) has imperfect information about the qualifications and abilities of Nate. Nate misrepresented his skills and experience to obtain the job, and after hiring him based on those false credentials, his inability to perform as expected becomes clear. Adverse selection occurs in various markets, including labor and financial capital markets, where information asymmetry can lead to sub-optimal outcomes, such as hiring a poor-quality employee or acquiring a "lemon." To mitigate this, employers may use various mechanisms like requiring degrees from certain institutions, reviewing past work history, seeking references, and looking for other indicators of ability and character to screen potential employees more effectively.
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Bond Premium, Entries for Bonds Payable Transactions Campbell Inc. produces and sells outdoor equipment. On July 1, Year 1, Campbell issued $32,000,000 of 10-year, 13% bonds at a market (effective) interest rate of 11%, receiving cash of $35,824,150. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: If an amount box does not require an entry, leave it blank. 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1. 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar.) b. The interest payment on June 30, Year 2, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar.) 3. Determine the total interest expense for Year 1. Round to the nearest dollar. $ 4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is greater than the market rate of interest? 5. Compute the price of $35,824,150 received for the bonds by using Exhibit 5 and Exhibit 7. (Round to the nearest dollar.) Your total may vary slightly from the price given due to rounding differences. Present value of the face amount $ Present value of the semi-annual interest payments $ Price received for the bonds $ Check My Work
Answer:
Using effective -rate:
Cash 35,824,122 debit
Bonds Payable 32,000,000 credit
premium on bonds payable 3,824,122 credit
--to record issuance--
Interest expense 1,970,326.73 debit
premium on BP 109,673.27 debit
cash 2,080,000 credit
--to record first interest payment--
Interest expense 1,976,358.76 debit
premium on BP 103,641.24 debit
interest payable 2,080,000 credit
--to record accrued interest to Dec 31th--
interest expense on first year:
1,970,326.73 + 1,976,358.76 = 3.946.685,49
Using Straight line:
interest expense 1.888.793,9 debit
premium on BP 191.206,1 debit
cash 2,080,000 credit
--to record first interest payment--
interest expense 1.888.793,9 debit
premium on BP 191.206,1 debit
interest payable 2,080,000 credit
--to record accrued interest for the second payment--
total interest expense:
1.888.793,9 + 1.888.793,9 = 3.777.587,8
4) Yes as investor will be willing to purchase at a higher price until get the market yield
5)
PV coupon payment $ 24,856,795.5687
PV maturity $ 10,967,326.8265
Total $ 35,824,122.3952
Explanation:
Present value of the bond is the discounted value of the coupon payment and maturity.
[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
C 2,080,000.000
time 20
rate 0.055
[tex]2080000 \times \frac{1-(1+0.055)^{-20} }{0.055} = PV\\[/tex]
PV $24,856,795.5687
[tex]\frac{Maturity}{(1 + rate)^{time} } = PV[/tex]
Maturity 32,000,000.00
time 20.00
rate 0.055
[tex]\frac{32000000}{(1 + 0.055)^{20} } = PV[/tex]
PV 10,967,326.83
PV c $24,856,795.5687
PV m $10,967,326.8265
Total $35,824,122.3952
Then we solve for the effective rate doing carrying value times market:
$35,824,122.3952 x 0.055 = 1,970,326.73
And the cash outlay:
32,000,000 x 0.065 = 2,080,000 debit
The difference is the amortization on premium
The striaght-line will distribute the premium over time equally:
3,824,122 / 20 = 191.206,1
this will be subtracted from the cash outlay to determinatethe interest expense.
Kartman Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 8.1 pounds $ 8.60 per pound $ 69.66 Direct labor 0.4 hours $ 40.00 per hour $ 16.00 Variable overhead 0.4 hours $ 5.60 per hour $ 2.24 In June the company's budgeted production was 5,000 units but the actual production was 5,100 units. The company used 23,750 pounds of the direct material and 2,450 direct labor-hours to produce this output. During the month, the company purchased 27,000 pounds of the direct material at a cost of $186,180. The actual direct labor cost was $58,621 and the actual variable overhead cost was $13,231. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The variable overhead rate variance for June is:
Answer:
Manufacturing overhead rate variance= $490 favorable
Explanation:
Giving the following information:
Variable overhead:
Standard Quantity= 0.4 hours
Standard rate= $5.6 per hour
Budgeted production= 5,000 units
Actual production= 5,100 units
The company used 2,450 direct labor-hours.
The actual variable overhead cost was $13,231.
To calculate the variable overhead rate variance, we need to use the following formula:
Manufacturing overhead rate variance= (standard rate - actual rate)* actual quantity
Actual rate= 13,231/2,450= $5.4
Manufacturing overhead rate variance= (5.6 - 5.4)*2,450
Manufacturing overhead rate variance= $490 favorable
Donald and Hanes shared net income and losses in the ratio of 3:2, respectively. The partners agreed to admit May to the partnership with a 35% interest in partnership capital and net income. May invested $100,000 cash, and no goodwill was recognized. What is the new total balance of the partnership accounts?
Answer: Donald - $176,000, May $100,000 and Hanes $84,000.
For a total of $360,000
Explanation:
The question was incomplete so I took the liberty of attaching the original question.
From the question, we see that the total amount becomes,
= 200,000 + 100,000 + 100,000
= $400,000
However, May was supposed to invest enough to give him 35% which would have been,
= 35% * 400,000
= $140,000
This means that May put in $40,000 less (140,000 - 100,000)
This $40,000 must therefore be withdrawn by the 2 other partners to balance it off.
They shall be withdrawn in the original proportion.
Donald
= 3/5 * 40,000
= $24,000
Hanes
= 2/5 * 40,000
= $16,000
Reducing their balanced we have,
Donald.
= 200,000 - 24,000
= $176,000
Hanes
= 100,000 - 16,000
= $84,000
Therefore the new total balance of the partnership accounts are Donald - $176,000, May $100,000 and Hanes $84,000.
For a total of $360,000
How does a toehold help overcome the free rider problem? (Select the best choice below.) A. Free riders usually acquire a toehold in order to give an incentive for an acquirer to take over the remainder of the company and provide value-added improvements. B. Since the free riders gain the full amount of the value improvement on the shares acquired as a toehold, the free riders are likely to sell their shares to the acquirer, allowing the takeover to go forward. C. Since the acquirer gains the full amount of the value improvement on the shares acquired as a toehold, a toehold provides an incentive to undertake the acquisition, even if the acquirer must pay a price equal to the with-improvement value for the rest of the shares. D. Once the acquirer has a toehold, free riders no longer can make as much money as they would
Answer: Since the acquirer gains the full amount of the value improvement on the shares acquired as a toehold, a toehold provides an incentive to undertake the acquisition, even if the acquirer must pay a price equal to the with-improvement value for the rest of the shares (C)
Explanation:
When an offer for a firm is made by a bidder, the target shareholders will benefit by keeping their shares and allowing other shareholders to sell their shares at a low price.
However, because every shareholders have the incentive of keeping their shares, none of the shareholders will sell. This situation is referred to as the free rider problem. In order o overcome the free rider problem, the bidders can attempt a buyout, acquire a toehold in the target, or in cases wheeby the acquirer is a corporation, they offer a freezeout merger.
Final answer:
Toehold ownership provides an incentive for acquisition and helps overcome the free rider problem by allowing an acquirer to gain control of a company.
Explanation:
Toehold ownership can help overcome the free rider problem by providing an incentive for an acquirer to take over the remainder of the company. A toehold allows the acquirer to gain a foothold in the company by purchasing a small percentage of shares, which can then lead to full acquisition and value-added improvements.
Suppose that solar-powered car technology advances to the point that solar-powered cars become affordable for the average consumer. Which type of externality is likely to result from a consumer's decision to purchase a solar-powered vehicle instead of a gas-powered vehicle, and how does it arise? This decision generates a negative externality because companies that do not produce solar-powered cars will be put out of business. positive externality because the replacement of gas-powered vehicles with solar-powered vehicles will result in less environmental pollution. positive externality because individuals can use the money they save on gasoline to help the local community. negative externality because including new technology in the cars will drive up the market price. Suppose the government is interested in moving the market closer to the socially optimal quantity. Which policy would likely result in the desired outcome? a subsidy to consumers who choose to purchase solar-powered vehicles granting one firm monopoly rights to produce solar-powered vehicles a new tax levied on the makers of solar-powered cars a price floor above the observed average price for a solar-powered car
Answer:
This decision generates a positive externality because the replacement of gas-powered vehicles with solar-powered vehicles will result in less environmental pollution.
A subsidy to consumers who choose to purchase solar-powered vehicles.
Explanation:
Positive externality is when the benefits of economic activities to third parties exceeds the costs. If consumers switch to solar powered cars, the reduced population is a benefit to third parties. Thus, the switch causes postive externality.
One way the government can encourage the purchase of solar powered cars is to grant subsidies to consumers. Subsidies reduces the cost of purchase of the solar powered cars and encourages consumers to purchase the cars
I hope my answer helps you
1. The correct option is b. The type of externality is likely to result is This decision generates a positive externality because the replacement of gas-powered vehicles with solar-powered vehicles will result in less environmental pollution.
2. The correct option is a. The policy would likely result in the desired outcome is a subsidy to consumers who choose to purchase solar-powered vehicles.
1. Suppose that solar-powered car technology advances to the point that solar-powered cars become affordable for the average consumer.
b. This decision generates a positive externality because the replacement of gas-powered vehicles with solar-powered vehicles will result in less environmental pollution.
Positive Externality:
When consumers choose solar-powered cars over gas-powered ones, they reduce the demand for fossil fuels and decrease emissions, which benefits the environment. This is a positive externality because the benefits extend beyond the individual consumer to society as a whole, including improved air quality and reduced greenhouse gas emissions.2. Suppose the government is interested in moving the market closer to the socially optimal quantity.
a. A subsidy to consumers who choose to purchase solar-powered vehicles
Subsidy to Consumers: Providing a subsidy to consumers for purchasing solar-powered vehicles can help to increase their adoption. By lowering the effective price of solar-powered cars, the government encourages more consumers to choose them over gas-powered vehicles. This helps move the market closer to the socially optimal quantity by aligning individual incentives with the positive externalities created by reduced pollution and environmental benefits.Other Options:
Granting Monopoly Rights (b): This could reduce competition and potentially increase prices, which is not beneficial for achieving the socially optimal quantity.New Tax (c): A tax on solar-powered car makers might discourage production and hinder the adoption of solar-powered vehicles.Price Floor (d): Setting a price floor above the average price could result in a surplus of cars and potentially drive up costs, which does not promote the desired outcome of increasing adoption.The complete question is-
1. Suppose that solar-powered car technology advances to the point that solar-powered cars become affordable for the average consumer.
Which type of externality is likely to result from a consumer's decision to purchase a solar-powered vehicle instead of a gas-powered vehicle, and how does it arise?
a. This decision generates a negative externality because companies that do not produce solar-powered cars will be put out of business.
b. This decision generates a positive externality because the replacement of gas-powered vehicles with solar-powered vehicles will result in less environmental pollution.
c. This decision generates a positive externality because individuals can use the money they save on gasoline to help the local community.
d. This decision generates a negative externality because including new technology in the cars will drive up the market price.
2. Suppose the government is interested in moving the market closer to the socially optimal quantity.
Which policy would likely result in the desired outcome?
a. a subsidy to consumers who choose to purchase solar-powered vehicles
b. granting one firm monopoly rights to produce solar-powered vehicles
c. a new tax levied on the makers of solar-powered cars
d. a price floor above the observed average price for a solar-powered car
At the year-end, Encore Company has a product for inventory that was purchased at a cost of $23. The product's expected selling price is $36 and the cost of completing the sale is $15. Using the lower of cost or net realizable value rule, what amount should be reported on the balance sheet for inventory
Answer:
$21
Explanation:
As we know that
The inventory should be recorded in the books of accounts by applying the lower value of cost or net realizable value
In the given case
The cost is $23
And, the net realizable value is
= Expected selling price - selling cost
= $36 - $15
= $21
So by comparing the cost and net realizable value, the net realizable value contains the lower value i.e $21 and the same is recorded on the balance sheet for inventory
1. What are KPI’s in the hospitality industry? a.Key Personal Indicators b.Key Performance Indicators c.Key Pathways Into Success d.Data that is seldom looked at by senior leadership 2. Which of the following is a labor KPI as discussed in the lecture notes. a.Covers per hour b.# of Employees c.Number of employees needed to run a shift d.# of Managers
Answer:
1) Key Performance Indicators (KPIs)
2) Covers per hour
Explanation:
Critical success factors (CSFs) are fundamental requirements for competitive success. They represent what a business must excel at to make it very competitive and successful.
For example, customer satisfaction, quality product, employee satisfaction, productivity
Key Performance Indicators (KPI) are metrics which are used to measure whether or a business is achieving its CSFs
For example, a measure (KPI) of employee productivity would be amount of covers achieved per hour of labour
Turrubiates Corporation makes a product that uses a material with the following standards: Standard quantity 7.9 liters per unit Standard price $ 2.40 per liter Standard cost $ 18.96 per unit The company budgeted for production of 3,700 units in April, but actual production was 3,800 units. The company used 30,700 liters of direct material to produce this output. The company purchased 20,000 liters of the direct material at $2.5 per liter. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for April is:
The materials quantity variance for April is an unfavorable variance of -$1,632, calculated by taking the actual quantity of materials used minus the standard quantity for actual production and multiplying by the standard price per unit.
The materials quantity variance is the difference between the standard quantity of materials that should have been used for the actual production and the actual quantity of materials used, multiplied by the standard price per unit. First, we need to calculate the standard quantity of materials for the actual production. Since the standard quantity is 7.9 liters per unit and the actual production was 3,800 units, the standard quantity is 7.9 liters/unit imes 3,800 units = 30,020 liters.
Now, we can calculate the variance. The actual quantity used was 30,700 liters. Therefore, the materials quantity variance is (30,020 liters - 30,700 liters) imes $2.40/liter = (-680 liters) imes $2.40/liter = -$1,632. Hence, the company used 680 liters more than the standard quantity, leading to a $1,632 unfavorable variance because more materials were consumed than expected at the standard cost.
Jeremy Corporation estimated manufacturing overhead costs for the year to be $ 550 comma 000. Jeremy also estimated 8 comma 000 machine hours and 3 comma 000 direct labor hours for the year. It bases the predetermined overhead allocation rate on machine hours. On January 31, Job 25 was completed. It required 5 machine hours and 1 direct labor hours. What is the amount of manufacturing overhead allocated to the completed job?
Answer:
$343.75
Explanation:
The computation of amount of manufacturing overhead is shown below:-
For computing the amount of manufacturing overhead first we need to find out the predetermined overhead rate which is shown below:-
Predetermined overhead rate = Estimated manufacturing overhead costs ÷ Estimated machine hours
= $550,000 ÷ 8,000
= $68.75 per machine hour
Overhead allocated = Predetermined overhead rate × Machine hours
= $68.75 × 5
= $343.75
Scott has just been given a project that has a specific completion date. After a discussion with top management he finds that while the date is important the cost is more important and a slip in delivery would be acceptable if required to meet the cost targets. The completion date is best classified asd-structure-flash-cards/
Answer:
Accept
Explanation:
When the importance of the cost of a project outweighs that of the completion time, such completion date is known as Accepted.
In project management, Scott's completion date would be classified as a constraint. Time, cost, and scope are common project constraints, and in this case, cost takes priority over time, making it the primary constraint.
Explanation:In the context of project management, which is the scenario for Scott, the completion date he has been given is best classified as a constraint. A project constraint is essentially a factor that can limit the options of the project team and impact the final outcome of the project. Time, cost, and scope are the three most common project constraints, often depicted as a triangle where one side cannot be changed without impacting the others. In Scott's case, the date of completion is flexible to meet cost targets, meaning the cost is the more significant or primary constraint, as stated by the top management.
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19. Beth saves $2,500 a year from age 25 until age 34 (inclusive) and invests the money in an account earning 5% annually. Beth stops investing at age 34, but does not withdraw the accumulation until age 65. In contrast, Bill saves $2,500 a year from age 35 until age 65 inclusively and invests in a similar account to Beth, earning 5% annually. Bill will have accumulated significantly more than Beth at age 65. True False
Final answer:
The statement given in the question is False. While it is true that saving money early in life and utilizing the power of compound interest can lead to significant accumulation over time, the difference in starting age between Beth and Bill outweighs the difference in the length of time they save.
Explanation:
The statement given in the question is False. While it is true that saving money early in life and utilizing the power of compound interest can lead to significant accumulation over time, the difference in starting age between Beth and Bill outweighs the difference in the length of time they save.
If Beth saves $2,500 a year from age 25 to age 34 at an annual interest rate of 5%, her savings will accumulate to:
$2,500 × (1 + 0.05)⁹ = $2,500 × 1.638 = $4,095
On the other hand, if Bill saves $2,500 a year from age 35 to age 65 at the same interest rate, his savings will accumulate to:
$2,500 × (1 + 0.05)³⁰ = $2,500 × 4.3219 = $10,805
Therefore, Bill will have accumulated significantly more than Beth at age 65. So, the statement is False.
An additional source of revenue for a corporation beyond product or service sales is:
a) Licensing
b) Stocks
C) Real estate
d) All of the above
Answer:
Your answer is all of the above.
Explanation:
Each one of these options is generally profitable for most corporations. Sometimes there are recessions (like right now on our 5th week of the coronavirus outbreak) where Real Estate and Stocks can lose value but for the most part these are ways a business makes money.
Corporations can generate revenue beyond product or service sales through licensing, stocks, and real estate investments.
An additional source of revenue for a corporation beyond product or service sales is:
LicensingStocksReal estateCorporations can generate revenue through licensing agreements, issuing stocks, and investing in real estate properties. These additional sources of income can diversify a corporation's revenue streams and enhance financial stability.
You are a newspaper publisher. You are in the middle of a one-year rental contract for your factory that requires you to pay $500,000 per month, and you have contractual labor obligations of $1,000,000 per month that you can’t get out of. You also have a marginal printing cost of $0.35 per paper as well as a marginal delivery cost of $0.10 per paper. Instructions: Round your answers to 2 decimal places. a. If sales fall by 20 percent from 1,000,000 papers per month to 800,000 papers per month, what happens to the AFC per paper? It from $ per paper to $ per paper. b. What happens to the MC per paper? . c. What happens to the minimum amount that you must charge to break even on these costs? It from $ per paper to $ per paper.
Answer:
1) fixed cot increase to $1,875 from $1.5
2) the marginal contribution per paper do not change as the change in volume do not make a change in the variable cost nor sales price.
3)
minimum to break-even at 1,000,000 units = $1.95
at 800,000 units: $2.4375
Explanation:
rent expense 500,000
labor 1,000,000
total fixed 1,500,000
variable cost:
0.35 printing and 0.10 delivery = 0.45
Fixed cost:
1,500,000 / 1,000,000 = 1.5
new fixed cost:
1,500,000 / 800,000 = 1,875
to break even:
[tex]\frac{Fixed\:Cost}{Contribution \:Margin} = Break\: Even\: Point_{units}[/tex]
1,500,000 / (selling price - 0.45 variale cost) = 1,000,000
selling price: (1,500,000 + 0.45 x 1,000,000) / 1,000,000
selling price: 1.95
1,500,000 / (selling price - 0.45 variale cost) = 800,000
selling price: (1,500,000 + 0.45 x 800,000) / 800,000
selling price: 2,4375
During a recent lengthy strike at Morell Manufacturing Company, management replaced striking assembly line workers with office workers. The assembly line workers had been paid $18 per hour while the office workers are only paid $10 per hour. What is the most likely effect on the labor variances in the first month of this strike? Labor Rate Variance Labor Efficiency Variance A) Unfavorable No effect B) No effect Unfavorable C) Unfavorable Favorable D) Favorable Unfavorable
Answer: D) Favorable Unfavorable
Explanation:
To begin, it is worthy of note that in Variance, if something is said to be Favourable, it means a negative Variance because less resources than planned were spent. When it is Unfavourable, it means a positive balance variance.
Now, The formula for Labour Rate Variance is as follows,
LABOUR RATE VARIANCE=(ACTUAL RATE-STANDARD RATE)*ACTUAL HOURS WORKED
Seeing as the old workers were being paid $18, and the new office ones were paid $10, we can see that to be the actual rate was less than the standard rate. This would mean that there was a FAVOURABLE balance.
Labour Efficiency is calculated in a similar way,
LABOUR EFFICIENCY VARIANCE=(ACTUAL HOURS WORKED-STANDARD HOURS)*STANDARD RATE.
Now, these are Office workers not assemblyline workers. They do not have the experience to work in such a way that they produce as fast or as efficiently as their striking Assemblyline colleagues.
This would then mean that their actual hours will be MORE than the standard rate which can only lead to an UNFAVOURABLE BALANCE.
The most likely effect on the labor variances in the first month of the strike at Morell Manufacturing Company is unfavorable labor rate variance and favorable labor efficiency variance.
Explanation:The most likely effect on the labor variances in the first month of this strike is Option C) Unfavorable Favorable. The labor rate variance would be unfavorable because the new office workers are paid a lower wage of $10 per hour compared to the previous wage of $18 for the assembly line workers. However, the labor efficiency variance would be favorable because the management has replaced the striking workers with office workers who may be more productive and efficient, resulting in lower labor costs.
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On January 1, Year 1, Weller Company issued bonds with a $260,000 face value, a stated rate of interest of 10.00%, and a 10-year term to maturity. Weller uses the effective interest method to amortize bond discounts and premiums. The market rate of interest on the date of issuance was 8.00%. Interest is paid annually on December 31. Assuming Weller issued the bonds for $280,640, what is the carrying value of the bonds on the December 31, Year 3?
Answer:
The carrying value of the loan in year 3 is $269,119.18
Explanation:
The carrying of the bond in year 3 comprises the loan opening book value in year 3 plus interest calculated on the opening balance using the yield to maturity less the coupon payment calculated as a percentage of face value as computed in the attached excel file.
You would notice that the carrying values in years 1, 2 and 3 are $277,091.20,$273,258.50 and $269,119.18
Kindly find attached.