In each of the following cases, in the short run, determine whether the events cause a shift of a curve or a movement along a curve. Determine which curve is involved and the direction of the change.a) As a result of new discoveries of iron ore used to make steel, producers now pay less for steel, a major commodity and used in production.b) An increase in the money supply by the Federal Reserve increases the quantity of money that people wish to lend, lowering interest rates.c) Greater union activity leads to higher nominal wages.d) A fall in the aggregate price level increases the purchasing power of households' and firms' money holdings. As a result, they borrow less and lend more.
Answers
Answer: Please refer to Explanation
Explanation:
a) Due to the laws of supply and demand, new discoveries of Iron ore that have been discovered had the impact of reducing the price of Iron Ore. Iron Ore is a major component of Steel so it means Steel becomes cheaper to make. As a result of this, more steel will be produced. This would shift the short run AGGREGATE SUPPLY curve to the RIGHT.
b) The actions of the FED will result in the Short run AGGREGATE DEMAND CURVE shifting to the right. This is because interest rates are lower so people and businesses will borrow more for consumption and investment. Hence increasing Aggregate Demand.
c) Higher nominal wages will have to effect of increasing the labour cost for suppliers and producers. This would mean that input costs for Production will increase. This will have the impact of SHIFTING the short run AGGREGATE SUPPLY curve to the LEFT because the suppliers will supply less as it would be more expensive to produce more.
d) The AGGREGATE DEMAND CURVE is plotted against price. If prices drop, there will be a DOWNWARD movement ALONG the shortrun Aggregate Supply Curve as will buy more and invest more. I included a graph to demonstrate this.
Related Questions
Hi-Tech, Inc., reports net income of $66.0 million. Included in that number are depreciation expense of $5.6 million and a loss on the sale of equipment of $1.6 million. Records reveal increases in accounts receivable, accounts payable, and inventory of $2.6 million, $3.6 million, and $4.6 million, respectively. What are Hi-Tech's net cash flows from operating activities? (List cash outflows and any decrease in cash as negative amounts. Round your answers to 1 decimal place. Enter your answers in millions (i.e., $10,100,000 should be entered as 10.1).)
Answers
Answer:
Net cash flows from operating activities$69.6
Explanation:
Hi-Tech, Inc
Cash Flows from Operating Activities
Net income $66
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation expense 5.6
Loss (on sale of equipment)1.6
Increase in accounts receivable(2.6)
Increase in inventory(4.6)
Increase in accounts payable 3.6
Net cash flows from operating activities$69.6
Therefore Hi-Tech's net cash flows from operating activities will be $69.6
Answer:
Hi-Tech's net cash flows from operating activities is $69.6 million
Explanation:
Prepare the Cash Flow from Operating Activities Section Using the Indirect method as follows :
Cash Flow from Operating Activities
Net income $66.0 million
Adjustment of Non-cash items :
depreciation $5.6 million
loss on the sale of equipment $1.6 million
Adjustment of Working Capital Items :
Increase in accounts receivable ( $2.6 million)
Increase in accounts payable $3.6 million
Increase in accounts inventory ( $4.6 million)
Net Cash Flow from Operating Activities $69.6 million
Consider Adjusting Journal Entries - Unearned Revenue
Skypress Company collected $5,600 in May of 2013 for 4 months of service which would take place from October of 2013 through January of 2014. The revenue reported from this transaction during 2013 would be:
$0
$4,200
$5,600
$1,400
Answers
Answer:
$4,200
Explanation:
Skypress Company
$5,600 × 3/4
=$5,600×0.75
= $4,200
Therefore the revenue reported from this transaction during 2013 would be $4,200
Lisa Company uses the periodic inventory system and had 100 units in beginning inventory at a total cost of $10,000. The company purchased 200 units at a total cost of $26,000. At the end of the year, Lisa had 80 units in ending inventory.
Required:
a) Compute the cost of the ending inventory and the cost of goods sold under FIFO, LIFO, and average-cost. (Round average-cost per unit and final answers to 0 decimal places, e.g. 1,250.)
Answers
Answer:
FIFO $10,400
LIFO $8,000
AVERAGE COST $9,600
Explanation:
Lisa Company
(1) FIFO
Purchases during the period:
100 units at $100 = $10,000
200 units at $130 = $26,000
Units sold during the period = 220
Cost of units sold
=100*$100+120*130=$25,600
Value of ending inventory
=10,000+26,000-25,600
=$10,400
(2) LIFO
Purchases during the period:
100 units at $100 = $10,000
200 units at $130 = $26,000
Units sold during the period = 220
Cost of units sold
=20*$100+200*130=$28,000
Value of ending inventory
=10,000+26,000-28,000
=$8,000
(3) average-cost
Purchases during the period:
100 units at $100 = $10,000
200 units at $130 = $26,000
average cost per unit
=(10,000+26,000)/300
=$120 per unit
Units sold during the period = 220
Cost of units sold
=220 * $120
=$26,400
Value of ending inventory
=36,000-26,400
=$9,600
A convertible bond is selling for $800. It has 10 years to maturity, a $1000 face value, and a 10% coupon paid semi-annually. Similar nonconvertible bonds are priced to yield 14%. The conversion price is $50 per share. The stock currently sells for $31.375 per share. Determine the bond's option premium.
Answers
Answer:
The bond's option premium is $11.88
Explanation:
Acording to the data we have the following:
The Maturity Value of Bond=$1000
The Coupon Rate = 10%
Hence, there is an interest of $100 Per year but it is semi anually , Therefore there is an interest of $50 received per year .
Also, the YTM = 14% , which means 7% for 6 months
Therefore, to calculate the bond's option premium, we have to use first the formula to calculate the fair value of bond.
The Fair Value of Bond = PVAF( 7% , 20 )*50 + PV( 7% , 20 )*1000
= 50*10.594 + 1000*0.2584
= $529.70 + $258.419
=$788.119
Hence, The bond's option premium = $800 - $788.119 = $11.88
A concentration ratio indicates the:
a. number of firms in an industry.
b. number of large firms in an industry compared to the number of large firms in another related industry.
c. percentage of total sales accounted for by the (for example) four largest firms.
d. percentage of sellers in an industry relative to the number of buyers.
e. percentage of sellers in an industry protected by barriers to entry relative to the number of sellers that wish to enter.
Answers
Answer:
The correct answer is letter "A": number of firms in an industry.
Explanation:
A concentration ratio measures the number of competitors within the same industry. The lowest concentration ratio of a firm, it represents there are more market rivals. The highest the concentration ratio, the lower the number of competitors of the firm. The ratio is expressed in percentage terms. A firm having a 100% concentration ratio is a monopoly.
In 2018, preferred shareholders elected to convert 4.58 million shares of preferred stock ($39 million book value) into common stock. Rather than issue new shares, the company granted 4.58 million shares held in treasury stock to the preferred shareholders, with a total cost of $33 million.
a. Prepare a journal entry to illustrate how this transaction would have been recorded.
Answers
Answer:
The answer is given below;
Explanation:
Preferred Stock Dr.$39,000,000
Common Stock Cr.$33,000,000
Paid in capital in excess of par-Common stock (39,000,000-33,000,000) Cr.$6,000,000
As the book value of preferred stock is greater than the price paid at the time of conversion into common stock,therefore excess amount is paid in capital in excess of par for common stocks.As the preferred stock is reduced by their book value,therefore it is debited and common stock is credited with its cost.
Final answer:
Preferred shareholders converted their stock into common stock, using treasury shares for the transaction. The necessary journal entry debits Preferred Stock for $39 million, credits Common Stock for $33 million, and credits Additional Paid-in Capital for $6 million.
Explanation:
In 2018, the company's preferred shareholders elected to convert preferred stock into common stock. Given that the book value of the preferred stock being converted was $39 million and that treasury shares totaling $33 million were used for the conversion, the journal entry would be as follows:
Debit Preferred Stock for $39 million
Credit Common Stock for $33 million
Credit Additional Paid-in Capital (or Common Stock Premium) for $6 million
This entry removes the preferred stock at its book value and recognizes the issuance of common stock at its carry amount, with any excess recorded in additional paid-in capital.
What are equivalent units of production (EUP) for conversion costs? Hint: There are several questions about the process cost summary. Prepare the process cost summary in its entirety before attempting to answer the questions. Beginning work in process inventory (50 units): Units are 100% complete for materials and 60% complete for conversion Direct materials Conversion costs Total cost in beginning inventory $ 50 150 $ 200 Costs added this period: Direct materials (for 250 units started) Conversion costs Total costs added this period $850 1,920 $2,770
Answers
Answer:
Equivalent units of production for conversion cost is 180
Explanation:
An equivalent unit of production is an expression of the amount of work done by a manufacturer on units of output that are partially completed at the end of an accounting period. Equivalent units of production are the units in production multiplied by the percentage of those units that are complete (100 percent) or those that are in process.
Beginning work in progress (units) = 50
Units added this period = 250
Here we assume that all units are completed and transferred as there is no information on ending work in progress.
Direct material cost in the beginning inventory = $50
Direct material cost added this period = $850
Total direct material cost = 50 + 850 = $900
Conversion cost is given by direct labour plus overhead.
Conversion cost in the beginning inventory = $150 + $1920 = $2070
Conversion cost added this period = $200 + $2770
Total conversion cost = $5040
Equivalent units for direct materials = 300 (100% of 300)
Equivalent units for conversion cost = 60% of 300 = 180
Cost per equivalent unit :
Direct materials = 900/300 = $3
Conversion cost = 5040/180 = $28
(b) The following expenditures relating to plant assets were made by Prather Company during the first 2 months of 2020. Opposite each of the following transactions indicate the account title to which each expenditure should be debited. No. Expenditures Plant Assets 1. Paid $5,000 of accrued taxes at time plant site was acquired. select an account title 2. Paid $200 insurance to cover possible accident loss on new factory machinery while the machinery was in transit. select an account title 3. Paid $850 sales taxes on new delivery truck. select an account title 4. Paid $17,500 for parking lots and driveways on new plant site. select an account title 5. Paid $250 to have company name and advertising slogan painted on new delivery truck. select an account title 6. Paid $8,000 for installation of new factory machinery. select an account title 7. Paid $900 for one-year accident insurance policy on new delivery truck. select an account title 8. Paid $75 motor vehicle license fee on the new truck.
Answers
Answer:
Please see explanation below
Explanation:
1. Paid $5,000 of accrued taxes at time plant site was acquired. - Debit accrued taxes account $5000, credit cash expenses account $5000.
2. Paid $200 insurance to cover possible accident loss on new factory machinery while the machinery was in transit. - Debit freight and insurance in transit $200, credit cash expenses $200.
3. Paid $850 sales taxes on new delivery truck. - Debit sales tax $850, credit expenses $850.
4. Paid $17,500 for parking lots and driveways on new plant site. - Debit land improvements $17,500, credit cash expenses $17,500.
5. Paid $250 to have company name and advertising slogan painted on new delivery truck. - Debit advertisement $250, credit cash expenses $250.
6. Paid $8,000 for installation of new factory machinery. - debit installation costs (under plants and machinery $8000.
7. Paid $900 for one-year accident insurance policy on new delivery truck. - Debit insurance $900, credit cash expenses $900.
8. Paid $75 motor vehicle license fee on the new truck. - Debit licensing fees $75, credit cash expenses $75.
Answer:
Refer to the attached file for the detailed breakdown:
Consider the labour statistics for the country of Menap, which consists of five districts and a capital region with varying degrees of poverty. Round your answers to two decimal places. District Unemployed (in millions) Employed (in millions) 1 20 39 2 29 52 3 16 36 4 30 56 5 18 41 Capital 23 54 What is the labour force in Menap?
Answers
Answer:
The correct answer is 414 million.
Explanation:
According to the scenario, the computation of the given data are as follows:
We can calculate the labor force by using following formula:
Labor force = Total unemployed + Total employed
By putting the value in the formula, we get
= (20 + 29 + 16 + 30 + 18 + 23) + ( 39 + 52 + 36 + 56 + 41 + 54)
= 136 million + 278 million
= 414 million
The labor force in Menap is 414 million.
The calculation is as follows:We know that
Labor force = Total unemployed + Total employed
So,
= (20 + 29 + 16 + 30 + 18 + 23) + ( 39 + 52 + 36 + 56 + 41 + 54)
= 136 million + 278 million
= 414 million
Find out more information about the labor here: https://brainly.com/question/10513697
There is no important area of human activity than management since its task is that of getting things done through people". Discuss.
Answers
Yes, there is no important area of human activity compare to management because it helps in getting things done through people.
Management can be regarded as the process of making use of available resources as well as controlling a group of people so that the goals of the organization can be achieved.
The general function of management entails ;
planningorganizingleading controlling.We can conclude that there is no important area of human activity compare to management because it encompass the process of getting things done.
Learn more about human activity and management at,:
https://brainly.com/question/12851463
The concept of management is crucial as it involves organizing and guiding teams toward achieving objectives, a concept evident from historical bureaucracy to modern business structures. The evolution of management theory, from Taylor's economic efficiency drives to McGregor's leadership styles and Clifton's strengths-focused management, illustrates the ongoing development of techniques to maximize both organizational and employee potential.
Explanation:The significance of management in various areas of human activity is immense, as it involves the coordination and structuring of tasks and people to achieve desired goals. This can be understood through the history of bureaucracy which emerged as a means to manage large groups and achieve efficiency within political units, surpassing the limitations of managing through personal relationships alone.
Frederick Taylor's The Principles of Scientific Management expounded on the importance of increasing economic efficiency and productivity through the redesign of the workplace and utilization of time-motion studies. This form of management focused on maximizing employer profits and optimizing employee outcomes through specific training and development.
Further, management theories evolved with Douglas McGregor's Theory X and Theory Y, outlining differing perceptions of employee motivation and managerial styles. In contrast, Donald Clifton's strengths-based management emphasizes focusing on an individual's strengths to boost organizational performance, although this approach requires balancing against potential neglect of weaknesses.
Efficient management is also witnessed in modern businesses, such as restaurants, which compartmentalize tasks to various specialized roles, including culinary staff, servers, and business managers, to ensure smooth operations and financial oversight.
Each visor requires a total of $4.50 in direct materials that includes an adjustable closure that the company purchases from a supplier at a cost of $1.50 each. Shadee wants to have 32 closures on hand on May 1, 22 closures on May 31, and 28 closures on June 30 and variable manufacturing overhead is $2.00 per unit produced. Suppose that each visor takes 0.80 direct labor hours to produce and Shadee pays its workers $10 per hour.
Bugeted Production in Units: May 585, June 410
Required:
1. Determine Shadee’s budgeted manufacturing cost per visor. (Note: Assume that fixed overhead per unit is $1.90.) (Round your answer to 2 decimal places.)
2. Compute the Shadee’s budgeted cost of goods sold for May and June.
Answers
The budgeted manufacturing cost per visor is $16.40, calculated by summing direct materials, direct labor, variable overhead, and fixed overhead. The budgeted cost of goods sold for May is $9,594.00, and for June, it is $6,724.00.
Budgeted Manufacturing Cost Per Visor
To calculate the budgeted manufacturing cost per visor, we need to add together the direct materials, direct labor, and both variable and fixed manufacturing overhead costs per unit. Direct materials cost $4.50 per visor, including the cost of closures. Direct labor is calculated by multiplying the labor hours per visor by the hourly wage, which in this case is 0.80 hours multiplied by $10, equaling $8.00. The variable manufacturing overhead is given as $2.00 per unit. The fixed overhead per unit is indicated as $1.90.
To determine the total cost per visor, we sum these amounts:
Direct Materials: $4.50Direct Labor: $8.00 (0.80 hours x $10/hour)Variable Manufacturing Overhead: $2.00Fixed Manufacturing Overhead: $1.90Total cost per visor = $4.50(materials) + $8.00(labor) + $2.00(variable overhead) + $1.90(fixed overhead) = $16.40.
Budgeted Cost of Goods Sold (COGS) for May and June
To compute the budgeted cost of goods sold (COGS) for May and June, we multiply the total cost per visor by the number of units produced in each month:
For May (585 units): COGS = 585 units x $16.40/unit = $9,594.00For June (410 units): COGS = 410 units x $16.40/unit = $6,724.00
Branson works for a firm that is expanding into a completely new line of business. He has been asked to determine an appropriate WACC for an averageminusrisk project in the expansion division. Branson finds two publicly traded standminusalone firms that produce the same products as his new division. The average of the two firm's betas is 1.40. Further, he determines that the expected return on the market portfolio is 11.00% and the riskminusfree rate of return is 3.00%. Branson's firm finances 70% of its projects with equity and 30% with debt, and has a beforeminustax cost of debt of 8% and a corporate tax rate of 20%. What is the WACC for the new line of business?
Answers
Answer:
11.86%
Explanation:
First we need to calculate the return on equity(Re).
re = rf + B(rm-rf)
re = 0.03 + (1.4)*(0.11-0.03) => 0.142 or 14.2%.
Now the formula for WACC is,
WACC = (re * %of Equity) + ((rd * %of Debt)(1-tax rate))
Hence this is calculated as,
WACC = (0.70*0.142)+((0.30*0.08(1-0.20))
WACC = 11.86% or 0.1186.
Hope this helps. Goodluck.
Answer:
the WACC for the new line of business is 14.80%
Explanation:
Weighted Average Cost of Capital is the minimum return that a project must offer before it can be accepted.
Capital Source Weight Cost Total
Equity 70% 18.40% 12,88%
Debt 30% 6.40% 1,92%
Total 100% 14.80%
Calculation of Cost of Equity
The details available allow us to use the Capital Asset Pricing Model to find the Cost of Equity.
Cost of Equity = Risk Free Rate + Beta × Risk Premium
=3.00%+ 1.40×11.00%
= 18.40%
Calculation of Cost of Debt
We use the after tax Cost of Debt as follows :
Cost of Debt = Market Interest Rate × (1-tax rate)
= 8% × (1-0.20)
= 6.40%
A seller knows that there are two bidders for the object he is selling. He believes that with probability 1/2, one has a buyer value of $5 and the other has a buyer value of $7 and, with probability 1/2, one has a buyer value of $3 and the other has a buyer value of $10. He knows that bidders will want to buy the object so long as they can get it for their buyer value or less. He sells it in an English auction with a reserve price which he must set before the auction starts. To maximize his expected profits, he should set the reserve price at:_______
Answers
Answer:
Reserve price = $6.25
Approximately $7
Explanation:
Reserve price is the lowest set price that is acceptable by a seller at an auction.
With probability 1/2:
Buyer values = $5 and $7
Buyer values= $3 and $10
Since the seller knows there are two bidders for the object he is selling and he wants to maximize his expected profits. He also sells it in an English auction which he must set the reserve price before the commencement of the auction. His reserve price should be:
[tex] (\frac{5*1}{4}+\frac{7*1}{4}) + (\frac{3*1}{4}+\frac{10*1}{4}) [/tex]
= (1.25 + 1.75) + (0.75 + 2.5)
= 3 + 3.25
$6.25
The maximize his expected profit the buyer should set his reserve price at approximately $7
Answer:
$6
Explanation:
bidder 1:
50% chance paying $5
50% chance paying $7
expected value = ($5 x 50%) + ($7 x 50%) = $6
bidder 2:
50% chance paying $3
50% chance paying $10
expected value = ($3 x 50%) + ($10 x 50%) = $6.50
According to Myerson's optimal reserve price theory, the reserve price does not depend on the number of bidders, instead it depends on the distribution of the buyers' valuation. In this case, both buyers' valuations are very similar, $6 and $6.50, so one of them should be the reserve price. Since this is an open bid and the reserve price will probably serve as reference point, the reserve price should be $6 so that both bidders can participate and hopefully the price will exceed $7 (the highest second bid).
You will be paying $10,000 a year in tuition expenses at the end of the next 2 years. Bonds currently yield 8%. a. What is the present value and duration of your obligation? b. What maturity zero-coupon bond would immunize your obligation? c. Suppose you buy a zero-coupon bond with value and duration equal to your obligation. Now suppose that rates immediately increase to 9%.
Answers
For complete answer find complete 5 attachments
The present value of the obligation is $17,832.28 and the duration is 2 years. A zero-coupon bond with a maturity of 2 years would immunize the obligation. If rates rise to 9%, the value of the bond will fall.
Explanation:The subject of your question relates to Present Value and Bond Duration in financial mathematics. In a. you're asked to calculate the present value of your tuition obligation of $10,000 a year for next 2 years at an 8% bond yield rate. The concept behind this is that the money available now (present) is worth more than the same amount in the future due to its potential earning capacity (yield rate). Hence, Present Value = $10,000/(1+0.08) + $10,000/(1+0.08)² = $9,259.26 + $8,573.02 = $17,832.28.
As for the duration of your obligation, it's the weighted average maturity of the cash flows, which should be 2 years.
In b. a zero-coupon bond that would immunize your obligation would be one with a maturity and face value that matches your obligation and the yield rate. Hence, a 2-year zero-coupon bond.
In c., if rates rise to 9%, the value of the zero-coupon bond will fall as bond prices and interest rates have an inverse relationship. The bond would need to be revalued using the new rate.
Learn more about Finance here:https://brainly.com/question/36998854
#SPJ3
In producing a product, a firm has both fixed costs and variable costs. Fixed costs are costs that must be paid regardless of how many units are produced and sold. Variable costs, on the other hand, fluctuate directly with sales volume. The more you produce, the higher your variable costs. Let's try this out. Using your client’s crystal soap business, indicate which costs are fixed and which are variable by dragging them onto the correct side of the ledger.
Answers
The cost are as follows:
rent, raw materials, production, utilities, shipping, insurance,
Answer:
Fixed cost> rent, insurance, utilities
Variable cost> raw materials, production cost, shipping cost
Explanation:
Remember, it was mentioned that Fixed costs are costs that must be paid regardless of how many units are produced and sold; which implies that they do not change so frequently.
Thus, we would expect rent paid by Crystal soap to be fixed overtime, her insurance payments as well as utilities she pays for like power etc would also fall under fixed cost.
Variable costs, on the other hand, fluctuate directly with sales volume. Therefore, Crystal soap business would incur varying cost amount for raw materials, production cost, and their shipping cost.
Suzy contributed assets valued at $360,000 (basis of $200,000) in exchange for her 40% interest in Suz-Anna GP (a general partnership in which both partners are active owners). Anna contributed land and a building valued at $640,000 (basis of $380,000) in exchange for the remaining 60% interest. Anna's property was encumbered by qualified nonrecourse financing of $100,000, which was assumed by the partnership. The partnership reports the following income and expenses for the current tax year. Sales $560,000 Utilities, salaries, depreciation, and other operating expenses 360,000 Short-term capital gain 10,000 Tax-exempt interest income 4,000 Charitable contributions (cash) 8,000 Distribution to Suzy 10,000 Distribution to Anna 20,000 During the current tax year, Suz-Anna refinanced the land and building (i.e., the original $100,000 debt was repaid and replaced with new debt). At the end of the year, Suz-Anna held recourse debt of $100,000 for partnership accounts payable (recourse to the partnership but not personally guaranteed by either of the partners) and qualified nonrecourse financing of $200,000. a. What is Suzy's basis in Suz-Anna after formation of the partnership
Answers
Answer:
Explanation:
a.
What is Suzy’s basis after formation of the partnership? Anna’s basis?
Suzy’s beginning basis in her partnership interest is $240,000, calculated as follows:
Basis in contributed business-related assets $200,000
Share of partnership nonrecourse debt 40,000
Total beginning basis $240,000
Anna’s beginning basis in her partnership interest is $340,000, calculated as follows:
Basis in contributed business-related assets $380,000
Relief of debt assumed by the partnership (100,000)
Share of partnership nonrecourse debt 60,000
Total beginning basis $340,000
b.
What income and separately stated items does the partnership report on Suzy’s Schedule K-1?What items does Suzy report on her tax return?
The partnership reports ordinary income of $200,000.
Separately stated items include the short-term capital gain($10,000),
tax-exempt interest income ($4,000), and
charitable contributions ($8,000).
Suzy’s Schedule K-1 shows the following items: Ordinary income $80,000
Short-term capital gain 4,000
Tax-exempt interest income 1,600
Charitable contributions 3,200Distribution received by Suzy 10,000
On her tax return,
Suzy reports the $80,000 of ordinary income on Schedule E. She reports the short-term capital gain ($4,000) with her capital transactions on Form 8949 and Schedule D. She reports the charitable contributions ($3,200) on Schedule A with her personal charitable contributions. The tax-exempt interest income and the distribution she receives are not taxable
c) Suzy's new basis should be the old basis , plus income, debt, STCG and interest, less distributions and charitable donations.
which implies
$240000 + $80000+ $40000 + $4000 + $1600 - $10000-$3200
= $352,400
In order to encourage employee ownership of the company’s $1 par common shares, Washington Distribution permits any of its employees to buy shares directly from the company through payroll deduction. There are no brokerage fees and shares can be purchased at a 14% discount. During March, employees purchased 95,000 shares at a time when the market price of the shares on the New York Stock Exchange was $40 per share.
Required:
Prepare the appropriate journal entry to record the March purchases of shares under the employee share purchase plan.
Answers
Answer:
Dr Cash $3,268,000.00
Dr Compensation expense $532,000.00
Cr Common stock equity($1*95,000) $95,000
Cr paid-in capital in excess of par($40-$1)*95,000 $3,705,000
Explanation:
The cash received from employees as a result of the options is computed thus:
cash proceeds from options=$40*(1-14%)*95,000
=$40*(1-0.14)*95,000
=$40*0.86*95,000
=$3,268,000.00
The 14% discount on share price is to be treated as compensation expense as shown thus:
discount (compensation expense)=14%*$40*95,000
=$532,000.00
The appropriate entries would to debit cash with $3,268,000.00 as the increase in cash flows and debit of $532,000 to compensation expense.
The credit would be shown in common stock equity and paid-in capital in excess of par
An airline company must plan its fleet capacity and its long-term schedule of aircraft usage. For one flight segment, the average number of customers per day is 70, which represents a 65 percent utilization rate of the equipment assigned to the flight segment. If demand is expected to increase to 84 customers for this flight segment in three years, what capacity requirement should be planned? Assume that management deems that a capacity cushion of 25 percent is appropriate.
Answers
Final answer:
To accommodate an expected increase to 84 customers with a 25% capacity cushion, the airline should plan for a future capacity requirement of 112 seats.
Explanation:
The student is asking about fleet capacity planning for an airline, based on both current demand and expected future demand, while accounting for a desired capacity cushion. If the airline's flight segment currently operates at a 65% utilization rate with an average of 70 customers per day, the current capacity (100% utilization) can be calculated by dividing 70 by 0.65, which results in approximately 108 seats (rounded to whole numbers for practical purposes). With an expected increase to 84 customers, the future utilization rate without a capacity cushion would be 84 divided by 108, or approximately 77.8%. To maintain a 25% capacity cushion, the airline should plan for a capacity where 84 customers represent 75% (100% - 25%) utilization. Thus, the future capacity requirement would be 84 divided by 0.75, resulting in 112 seats required to accommodate the increased demand with the capacity cushion.
Net Work Corporation, whose annual accounting period ends on December 31, issued the following bonds: Date of bonds: January 1, 2018 Maturity amount and date: $420,000 due in 10 years (December 31, 2027) Interest: 10.0 percent per year payable each December 31 Date issued: January 1, 2018
Required: For each of the three independent cases that follow provide the following amounts to be reported on the January 1, 2018, financial statements immediately after the bonds were issued: (Deductions should be indicated by a minus sign.) Case A (issued at 100) Case B (at 96 Casec (at 104) January 1, 2018-Financial Statements: a. Bonds payable b. Unamortized premium (discount) c. Carrying value
Answers
Answer:
The following amounts to be reported on the January 1, 2018 is shown below:-
Explanation:
January 1, 2018 Case A Case B Case C
Financial Statements (issued at 100) (at 96) (at 104)
a. Bonds payable $420,000 $420,000 $420,000
b. Unamortized
Premium (discount) 0 $16,800 $16,800
c. Carrying value $420,000 $403,200 $403,200
Working Note
For Case B Unamortized Premium (discount)
= ($420,000 - ($420,000 ÷ 100 ×96)) = $16,800
For Case C Unamortized Premium (discount)
($420,000 - ($420,000 ÷ 100 ×104)) = $16,800
Under different issuance scenarios, the bonds payable entry remains constant at $420,000 but the amount of unamortized discount or premium, and the resulting carrying value, may differ based on whether the bonds were issued at 100%, 96%, or 104% of their face value.
Explanation:The amount to be recorded in the financial statements for each of the three cases would be calculated as follows:
Case A (issued at 100): The bonds were issued at their face value. Therefore, the bonds payable would be $420,000. There would be no unamortized premium or discount, which means the carrying value would also be $420,000.Case B (issued at 96): The bonds were issued at a discount, so you multiply the face value by 0.96 to get $403,200, which is the carrying value. The unamortized discount would be the face value minus the carrying value, or $16,800. The bonds payable remains $420,000.Case C (issued at 104): Here, the bonds were issued at a premium. Multiply the face value by 1.04 to get the carrying value of $436,800. The unamortized premium is the carrying value minus the face value, or $16,800. The bonds payable still remains $420,000.Learn more about Bonds Issued at Discount and Premium here:https://brainly.com/question/28391873
#SPJ11
For each good listed below, discuss whether the good is likely to entail either an external cost or an external benefit. In addition, discuss whether the private market is likely to provide more or less than the socially optimal quantity of the good.a. Vaccinations b. cigarettesc. abtibiotics
Answers
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.
PB10-2 Recording and Reporting Current Liabilities with Evaluation of Effects on the Debt-to-Assets Ratio [LO 10-2, LO 10-5] Tiger Company completed the following transactions. The annual accounting period ends December 31. Jan. 3 Purchased merchandise on account at a cost of $24,000. (Assume a perpetual inventory system.) Jan. 27 Paid for the January 3 purchase. Apr. 1 Received $80,000 from Atlantic Bank after signing a 12-month, 5 percent promissory note. June 13 Purchased merchandise on account at a cost of $8,000. July 25 Paid for the June 13 purchase. July 31 Rented out a small office in a building owned by Tiger Company and collected eight months’ rent in advance amounting to $8,000. Dec. 31 Determined wages of $12,000 were earned but not yet paid on December 31 (Ignore payroll taxes). Dec. 31 Adjusted the accounts at year-end, relating to interest. Dec. 31 Adjusted the accounts at year-end, relating to rent. Required: 1. & 2. Prepare journal entries for each of the transactions through August 1 and any adjusting entries required on December 31. 3. Show how all of the liabilities arising from these items are reported on the balance sheet at December 31.
Answers
Complete Question:
PB10-2 Recording and Reporting Current Liabilities with Evaluation of Effects on the Debt-to-Assets Ratio [LO 10-2, LO 10-5]
Tiger Company completed the following transactions. The annual accounting period ends December 31.
Jan. 3 Purchased merchandise on account at a cost of $24,000. (Assume a perpetual inventory system.) Jan.
27 Paid for the January 3 purchase.
Apr. 1 Received $80,000 from Atlantic Bank after signing a 12-month, 5 percent promissory note.
June 13 Purchased merchandise on account at a cost of $8,000.
July 25 Paid for the June 13 purchase.
July 31 Rented out a small office in a building owned by Tiger Company and collected eight months’ rent in advance amounting to $8,000.
Dec. 31 Determined wages of $12,000 were earned but not yet paid on December 31 (Ignore payroll taxes).
Dec. 31 Adjusted the accounts at year-end, relating to interest.
Dec. 31 Adjusted the accounts at year-end, relating to rent.
Required:
1. & 2. Prepare journal entries for each of the transactions through August 1 and any adjusting entries required on December 31.
3. Show how all of the liabilities arising from these items are reported on the balance sheet at December 31.
Answer:
Prepared journal Entries for Questions 1, 2 and 3 are attached as images in this order
1 Journal Entry Worksheet 1 (image 1)
2 Journal Entry Worksheet 1 (image 2)
3 Journal Entry Balance sheet 1 (image 3)
A monopolist is able to maximize its profits by a. producing output where MR = MC and charging the price corresponding to that output level on the demand curve. b. setting output at MR = MC and setting price at the demand curve's highest point. c. producing maximum output where price is equal to its marginal cost. d. setting the price at the level that will maximize its per-unit profit.
Answers
Answer:
A) producing output where MR = MC and charging the price corresponding to that output level on the demand curve.
Explanation:
In order for a monopolist to maximize their accounting profit, they should produce and sell an output level where marginal revenue (MR) = marginal cost (MC). When MR = MC, output should be at the equilibrium point.
This profit maximizing rule applies to all businesses, including perfect competition markets and monopolistic competition.
For a monopolist to maximize its profits, it b. sets output at MR = MC and sets prices at the demand curve's highest point.
The monopolist's MR or Marginal Revenue and the MC (marginal cost) must be equal to maximize profits. However, if he sets the selling price at the highest point, he achieves maximum profits.
Characteristics of a MonopolistDominates and controls the market. There is a lack of competition.There is a lack of substitute goods or services.The monopolist can set high prices.It decides the quantity to produce.Thus, the monopolist can maximize its profits by choosing Option B.
Learn more about profit maximization for a monopolist here: https://brainly.com/question/7586794 and https://brainly.com/question/18721409
Oriole Company took a physical inventory on December 31 and determined that goods costing $250,000 were on hand. Not included in the physical count were $20,000 of goods purchased from Pelzer Corporation, FOB shipping point, and $17,000 of goods sold to Alvarez Company for $25,000 FOB destination. Both the Pelzer purchase and the Alvarez sale were in transit at year-end. What amount should Oriole report as its December 31 inventory?
Answers
Answer:
The answer is given below;
Explanation:
Inventory- Unadjusted $250,000
Goods purchased-FOB shipping point $25,000
Goods sold to alvarez-FOB Destination $17,000
Total inventory to be reported at December 31 $292,000
Please note that in FOB shipping point,the sale and purchase is recorded when goods are dispatched from seller's warehouse.In our case, we have recorded purchase.
In case of FOB destination,sale and purchase are not recorded untill the goods are received by the buyer.In our case we have not recorded sale as the inventory is in transit rather we record it is as inventory stock as it was previously omitted from it.
It is not uncommon for magazine publishers to run multiple print jobs of the same magazine, in which each job contains changes in advertising copy to suit the target market requirements of various advertisers. In trade terms, what is the publisher creating?
Answers
Answer:
The correct answer is letter "D": split runs.
Explanation:
Split runs are magazines, newspapers, or any form of print communication media that includes two different versions of the same edition each one with different advertisements to find out which of the two has greater results. It is a marketing approach that looks for discarding promotional strategies that bring no revenue to the advertisers.
Final answer:
Magazine publishers create 'regional' or 'demographic editions' of magazines with varied advertising copy to meet the specific needs of different advertisers and markets, maintaining print media relevance in a digital age.
Explanation:
When magazine publishers run multiple print jobs of the same magazine with changes in advertising copy to suit the target market requirements of various advertisers, they are creating regional editions or demographic editions. This practice allows advertisers to tailor their messages to specific audiences, maximizing the impact and relevance of their advertising campaigns. In the context of a shifting media landscape where traditional print sources face challenges from new media, such as digital platforms, the ability to create targeted advertising through these editions helps to maintain the viability of print media in the competitive advertising market.
On June 3, Ivanhoe Company sold to Chester Company merchandise having a sale price of $4,200 with terms of 2/10, n/60, f.o.b. shipping point. An invoice totaling $94, terms n/30, was received by Chester on June 8 from John Booth Transport Service for the freight cost. On June 12, the company received a check for the balance due from Chester Company. Collapse question part (a) Prepare journal entries on the Ivanhoe Company books to record all the events noted above under each of the following bases. (1) Sales and receivables are entered at gross selling price. (2) Sales and receivables are entered at net of cash discounts
Answers
Answer:
On June 3: Debit Account receivable with $4,200; and Credit Sales revenues also wit $4,200.
On June 12: Debit Cash with $4,116, Debit Sales discount with $84; and Credit Account receivable with $4,200.
Explanation:
Ivanhoe Company
Date Details Dr ($) Cr ($)
June 3 Account receivable 4,200
Sales revenues 4,200
To record sales on terms to Chester Company
June 12 Cash 4,116
Sales discount 84
Account receivable 4,200
To record cash paid and sales discount to Chester
Note:
Chester Company paid within the discount period of 10 days. Therefore, he is entitled to discount of 2% and the cash paid and discount are calculated as follows:
Discount = $4,200 * 2% = 84%
Cash paid = $4,000 - $84 = $4,116
Exercise 15-14 Presented below are two independent situations. 1. Flinthills Car Rental leased a car to Jayhawk Company for one year. Terms of the operating lease agreement call for monthly payments of $300. 2. On January 1, 2017, Throm Inc. entered into an agreement to lease 20 computers from Drummond Electronics. The terms of the lease agreement require three annual rental payments of $26,000 (including 11% interest) beginning December 31, 2017. The present value of the three rental payments is $63,536. Throm considers this a capital lease. Prepare the appropriate journal entry to be made by Jayhawk Company for the first lease payment.
Answers
Answer:
Part 1
Dr Lease rentals $300........ Expense
Cr Cash Account $300
Part 2
Dr Leased Equipment $63,536
Cr Finance Lease Liability $63,536
Explanation:
Part 1. Under the operating leases the lessee pays the monthly rentals which must be accounted for as an expense and the double entry is as under:
Dr Lease rentals $300........ Expense
Cr Cash Account $300
Part 2. Under the finance lease agreement, the lessee pays the value of the asset and the interest as well. So after the date of agreement when the asset is handed over the journal entry would be recording of the equipment received, which would written at its fair value or present value of the payments made. The journal entry would be:
Dr Leased Equipment $63,536
Cr Finance Lease Liability $63,536
The journal entry to be made by Jayhawk Company for the first lease payment under an operating lease agreement would be a debit to Lease Expense and a credit to Cash (or Accounts Payable), reducing the company's cash or payable balance by $300.
Explanation:The subject of the question pertains to accounting for lease payments, specifically in the context of operating leases and capital leases. In the given situation, Jayhawk Company has entered into an operating lease agreement with Flinthills Car Rental for a car. Each month, Jayhawk Company has to pay a lease amount of $300 under this agreement.
The journal entry to be made by Jayhawk Company for the first lease payment would be a debit to Lease Expense and a credit to Cash (or Accounts Payable, depending on when the payment is actually made). This can be represented as follows:
Lease Expense..........300
.......Cash..........300
This entry reflects the payment of the lease amount, thus increasing the company's expenses but decreasing its cash or payable balance. This also follows the matching principle in accounting, which stipulates that an expense should be recognized in the period it is incurred.
Learn more about Lease Accounting here:https://brainly.com/question/32631785
#SPJ3
On January 2, 2018, Baltimore Company purchased 14,000 shares of the stock of Towson Company at $13 per share. Baltimore obtained significant influence as the purchase represents a 40% ownership stake in Towson Company. On August 1, 2018, Towson Company paid cash dividends of $21,000. Baltimore Company intended this investment to a long-term investment. On December 31, 2018, Towson Company reported $75,000 of net income for FY 2018. Additionally, the current market price for Towson Company's stock increased to $21 per share at the end of the year. Use this information to determine, how much Baltimore Company should report for its investment in Towson Company on December 31, 2018. (Round to the nearest dollar.)
Answers
Answer:
$315,600
Explanation:
Ownership = 40%
Investment = $182,000
Share of dividends = 40%*21,000 =8400
Share of income = 40%*75000 = 30000
Increase in share price = $21-$13= $8
investment
Dr Cr
Investment $182,000
Dividend received $8400
Income received $30,000
Increase in share price $112,000
324,000 315,600
Baltimore Company should report $294,000 as its investment in Towson Company on December 31, 2018.
Explanation:To determine how much Baltimore Company should report for its investment in Towson Company on December 31, 2018, we need to consider the initial purchase price, dividends received, and the change in market price of the stock. Baltimore Company purchased 14,000 shares of Towson Company at $13 per share, representing a 40% ownership stake. This initial purchase cost would be 14,000 x $13 = $182,000.
Since Baltimore Company has significant influence over Towson Company, they should use the equity method of accounting. Under this method, Baltimore Company accounts for its investment by adjusting the initial cost with its share of net income/loss and dividends received. In this case, since Baltimore owns 40% of the shares, it should report 40% of Towson Company's net income as its share. Therefore, Baltimore Company should report $75,000 x 40% = $30,000 as its share of Towson Company's net income.
Moreover, Baltimore Company received cash dividends of $21,000 from Towson Company. To calculate the investment amount on December 31, 2018, we need to add the dividends received to the initial purchase cost: $182,000 + $21,000 = $203,000. Additionally, since Towson Company's stock price increased to $21 per share, the market value of Baltimore Company's investment would be 14,000 x $21 = $294,000.
Therefore, Baltimore Company should report $294,000 as the investment in Towson Company on December 31, 2018.
Learn more about Investment valuation here:https://brainly.com/question/34795317
#SPJ3
"Which of the following are advantages to being a shareholder: 1.The expected returns for equities are higher than debt securities. 2.Equities have prices listed on major exchanges and are marketable. 3.Equities typically earn their expected return. 4. Equities that do not pay a dividend are tax efficient."
Answers
Answer:
The answer is 1, 2 and 4
Explanation:
Because equity holders usually have long-term interest in the company and they are concerned about increasing the value of the company and that they are at the greatest risk when the company goes bankruptcy, the expected returns for equities for shareholders are higher than debt securities for bondholders or banks.
Equity securities, both current and non-current, are listed at the lower value of cost or market on stock exchange.
Some companies dont pay dividends and some do buy but the equity that do not pay a dividend are tax efficient.
Benjamin Graham, the father of value investing, once said, "In the short run, the market is a voting machine, but in the long run, the market is a weighing machine." In this quote, Benjamin Graham was referring to the key difference between the "price" and the "value" of a security. In November 2006, Citigroup's stock (NYSE: C) was trading at $49.59. Following the credit crisis of 2007-2008 and by the end of October 2009, Citigroup's stock price had plummeted to $4.27. Several banks went under, and others saw their stock prices lose more than 60% of their value. Based on your understanding of stock prices and intrinsic values, which of the following statements is true? a. A stock's market price is based only on true investor returns. b. A stock's intrinsic value is based on true risk in the company. You can estimate the value of a company's stock using models such as the corporate valuation model and the dividend discount model. Which of the following companies would you choose to evaluate if you were using the discounted dividend model to estimate the value of the company's stock? a. A company that has been distributing a portion of their earnings every quarter for the past six years b. A company that is in a high-growth stage and plans to retain all its earnings for the next few years to support its growth
Answers
Answer: 1. b. A stock's intrinsic value is based on true risk in the company.
2. a. A company that has been distributing a portion of their earnings every quarter for the past six years
Explanation:
1. A Stock's intrinsic value is what it is truly a measure of it's true risk. It is not like the market price that follows trading patterns but rather is based on factors inside the company. It is often arrived at through complex calculations that take into account the business aspects of the company and as such is much more thorough. This is why it is the true risk of a stock.
2. The Dividend discount model of stock valuation relies heavily on dividends bein gdistributed to calculate stock price. The formula requires that the dividend of the next period be divided by the rate of return minus the growth rate. A company that is paying no dividends therefore cannot use this model to calculate stock value which is why the first option is correct.
If you need any clarification do react or comment.
Galaxy Co. distributes wireless routers to Internet service providers. Galaxy procures each router for $75 from its supplier and sells each router for $125. Monthly demand for the router is a normal random variable with a mean of 100 units and a standard deviation of 20 units. At the beginning of each month, Galaxy orders enough routers from its supplier to bring the inventory level up to 100 routers. If the monthly demand is less than 100, Galaxy pays $15 per router that remains in inventory at the end of the month. If the monthly demand exceeds 100, Galaxy sells only the 100 routers in stock. Galaxy assigns a shortage cost of $30 for each unit of demand that is unsatisfied to represent a loss-of-goodwill among its customers. Management would like to use a simulation model to analyze this situation.
a. What is the average monthly profit resulting from its policy of stocking 100 routers at the beginning of each month?
b. What percentage of total demand is satisfied?
Answers
Answer:
Simulation results:
- the average monthly profit resulting from its policy of stocking 100 routers at the beginning of each month is $4237.
- percentage of total demand is satisfied: 92%.
Explanation:
We have to consider three factors to calculate the profit:
Sales. Every unit sold adds (125-75)=$50 to the profit. We have to consider the condition that the maximum amount of units that can be sold is 100 units.The remains cost. If the monthly demand is under 100 units, the profit is reduced by $15 per each remaining unit.The shortage cost. For each unit demanded that exceeds the 100 units, the profit is reduced by $30.The equation can be expressed as:
[tex]Profit=50*Max(Q;100)-15*Max(100-Q;0)-30*Max(Q-100;0)[/tex]
A simulation with 10,000 trials is done, and the average monthly profit calculated for this policy is $4237.
The demand was calculated with the Excel function INT(NORMINV(RAND(),100,20)), to mimic a normal distribution with mean 100 and standard deviation 20.
b) The satisified demand is calculated for each trial as the minimum value between Q (quantity demanded) and 100, as if Q is bigger than 100, only 100 units of the demand are satisfied.
The percentage of total demand satisfied is:
[tex]\%Satisfied=\dfrac{Q_{satisf}}{Q}=\dfrac{918759}{997005}=0.9215=92\%[/tex]
Galaxy Co. distributes wireless routers to Internet service providers and stocks 100 routers at the beginning of each month. The average monthly profit and the percentage of total demand satisfied can be calculated based on the different scenarios. The profit and satisfaction percentage depend on the monthly demand, which is a normally distributed random variable with a mean of 100 units and a standard deviation of 20 units.
Explanation:Galaxy Co. distributes wireless routers to Internet service providers. Each router is procured for $75 and sold for $125. The monthly demand for the router is normally distributed, with a mean of 100 units and a standard deviation of 20 units. The company stocks 100 routers at the beginning of each month and incurs a cost of $15 for each router that remains in inventory at the end of the month if the demand is less than 100. If the demand exceeds 100, only the 100 routers in stock are sold. The shortage cost of $30 is assigned for each unit of unsatisfied demand.
a. The average monthly profit resulting from this policy can be calculated by considering the different scenarios:
If the monthly demand is 100 units or less, the profit is ($125 - $75) x 100 - $15 x (100 - demand);If the monthly demand is more than 100 units, the profit is ($125 - $75) x 100 - $15 x 0 - $30 x (demand - 100);If the demand is normally distributed, the average monthly profit can be calculated by considering the probabilities of different demand levels and corresponding profits. Using the mean and standard deviation of the demand, the average monthly profit can be determined.b. The percentage of total demand that is satisfied can be calculated by considering the different scenarios:
If the monthly demand is 100 units or less, the percentage of total demand satisfied is 100%;If the monthly demand is more than 100 units, the percentage of total demand satisfied is 100 / demand x 100; If the demand is normally distributed, the average percentage of total demand satisfied can be determined by considering the probabilities of different demand levels and corresponding percentages of total demand satisfied. Using the mean and standard deviation of the demand, the average percentage of total demand satisfied can be calculated.