Answer:
$80
Explanation:
CPM is the short form for 'cost per a thousand impressions.' Cost per thousand is a marketing expression used to refer to the cost of reaching 1000 readers, viewers, listeners, or webpage visitors. CPM is, therefore, the cost of advertising to an audience of 1000 people.
The Golf Digest has a circulation of 500,000. The cost of advertising is $40,000, which means the cost of reaching 500,000 people $40,000.
To get CPM, we first divide 500,000 by 1,000
=500,000 / 1,000
=500
CPM will be
= $40,000/500
=$80
As a certified public accountant, you have been contacted by Joe Davidson, CEO of Sports Pro Athletics, Inc., a manufacturer of a variety of athletic equipment. He has asked you how to account for the following changes 1. Sports pro appropriately changed its depreciation method for its machinery from the doucle declining balance method to units of production method effective January 1, 2020. 2. Effective January 1, 2020 Sports Pro appropriately changed tha salvage values used in computing depreciation on its office equipment. 3. On December 31, 2020 sports pro changed the specific subsidiaries constuting the group of companies for which consolidate financial statements are presented. Required: Prepare a memo to Joe Davidson explaining how each of the above changes should be presented in the December 31, 2020 financial statements.
Solution and Explanation:
CHANGE1
Reduce the accumulated depreciation from double declining method for the actual carrying value of asset in December 31 ,2019 and apply the new depreciation method from the January 1,2020 and present in financial statement with the new method .
CHANGE 2
Represent the new value on financial statement, if their is reduction in value it must be presented in profit and loss statement. And gain must be presented in other comprehensive income and then to equipment.
CHANGE 3
Take of the investment from the subsidiary withdrawn from financial statement and add the proceeding from the investment into cash balance.
Cheyenne Corp. uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $170000 and credit sales are $1710000. Management estimates that 5% of accounts receivable will be uncollectible. What adjusting entry will Cheyenne Corp. make if the Allowance for Doubtful Accounts has a credit balance of $3400 before adjustment?
Answer:
Debit Bad debt expense $5,100
Credit Allowance for doubtful debit $5,100
Explanation:
When a company makes sales on account, debit accounts receivable and credit sales. Based on assessment, some or all of the receivables may be uncollectible.
To account for this, debit bad debit expense and credit allowance for doubtful debt. Should the debt become uncollectible (i.e go bad), debit allowance for doubtful debt and credit accounts receivable.
Where a debit that had previously been determined to have gone bad gets settled, debit cash and credit bad debts expense.
If the company estimates that 5% of accounts receivable will be uncollectible, then amount estimated
= 5% × $170,000
= $8,500
Given that the Allowance for Doubtful Accounts has a credit balance of $3400, additional amount required
= $8,500 - $3,400
= $5,100
Joyce Thomas wants to buy a house in six years. She hopes to have $25,000 at that time. If the bank CD she wants to invest in will pay 7.5 percent annually, how much will she have to invest today
Answer:
$16,199.
Explanation:
She will need to invest an amount that is equivalent to the present value of $25,000, at 7.5 % for six years. $25,000 represents the future value.
The applicable formula is
PV = FV
(1+r)n
Where
FV, future value is $25,000
r is interest rate 7.5% 0r 0.075
n is period six years
PV = $25,000
(1 + 0.075)6
pv = $25,000/ 1.54330
PV= $16,199.
Vernon Publications established the following standard price and costs for a hardcover picture book that the company produces. Standard price and variable costs Sales price $ 36.70 Materials cost 8.40 Labor cost 3.60 Overhead cost 6.00 Selling, general, and administrative costs 6.40 Planned fixed costs Manufacturing overhead $ 132,000 Selling, general, and administrative 53,000 Assume that Vernon actually produced and sold 36,000 books. The actual sales price and costs incurred follow: Actual price and variable costs Sales price $ 35.70 Materials cost 8.60 Labor cost 3.50 Overhead cost 6.05 Selling, general, and administrative costs 6.20 Actual fixed costs Manufacturing overhead $ 117,000 Selling, general, and administrative 59,000 Required a. & b. Determine the flexible budget variances and also indicate the effect of each variance by selecting favorable (F) or unfavorable (U).
Answer:
Check the explanation
Explanation:
Walton Publications
Flexible Budget variance
Flexible Budget Actual results Variances
Units 30000 30000
Sales $11,04,000 $10,74,000 $30,000 U
Variable manufacturing costs:
Materials $2,49,000 $2,55,000 $6,000 U
Labor $1,14,000 $1,11,000 $3,000 F
Overhead $1,83,000 $1,84,500 $1,500 U
Selling, general and
administrative costs $2,16,000 $2,10,000 $6,000 F
Contribution Margin $3,42,000 $3,13,500 $28,500 U
Fixed costs:
Manufacturing Overhead $1,33,000 $1,18,000 $15,000 F
Selling, general and
administrative costs $52,000 $58,000 $6,000 U
Net Income $1,57,000 $1,37,500 $19,500 U
Kindly check the attached image for the spreadsheet format
A piece of property bought by XYZ Corporation a few years ago was sold for $5 M. The cost basis for this property was $2.75 M. The company had a taxable income of $12.15 million in the year the property was sold. The capital gain tax on this property is $337,500.
O True
O False
Answer:
True
Explanation:
Data given in the question
Sale value of the property = $5,000,000
Cost basis of property = $2,750,000
And, the taxable income is $12,150,000
So, based on the above information, the capital gain on the property is
= (Sale value of the property - Cost basis of property) × capital gain tax rate
= ($5,000,000 - $2,750,000) × 15%
= $337,500
We assume the capital gain tax rate is 15%
Hence, the given statement is true
Lambert Company purchased $140,000 of goods in September and expects to purchase $130,000 of goods in October. Lambert typically pays for 20% of purchases in the month of purchase and 80% in the following month. Every month, Lambert must make the following payments: Rent $5,000 Wages 14,000 Utilities 3,000 Telephone 400 Loan on equipment 1,200 In mid-October, Lambert expects to buy a new computer for $4,500 using the company credit card. Typically, the credit card bill is paid in full in the following month. September credit card purchases totaled $6,000. What is Lambert's expected cash disbursement in October for purchases of goods?
Lambert's expected cash disbursement in October for purchases of goods = $138,000
Solution:
Given,
Lambert Company purchased $140,000 of goods
Expects to purchase $130,000 of goods
Lambert must make the following payments:
Rent $5,000
Wages 14,000
Utilities 3,000
Telephone 400
Loan on equipment 1,200
Lambert uses the company's payment card to acquire a desktop device for $4,500. Usually, the credit card balance must be charged in full in the next month. September payment card transactions contributed to $6,000.
Now , To find Lambert's expected cash disbursement in October for purchases of goods :
$5,000 + $14,000+ $3000+ $400+ $1200 = $23600
= $23600 + 80% of the Sept order of $140,000 ($112,000) + 20% of the Oct order of $130,000($26,000)
= $161,600 + the $6000 credit card = $167,600
Purchase of goods is $112,000 & $26,000 = $138,000
Which one of the following is NOT a reason why logistics management is important?A. Customers are less demanding of quick delivery and mass customization.B. It is an integral part of the company strategy.C. Logistics adds additional values to the products.D. Logistics costs account for a high percent of sales.
Answer:
The correct answer is letter "A": Customers are less demanding of quick delivery and mass customization.
Explanation:
Logistics management refers to the administration of each of the processes involved in the supply chain of a company. Logistic management aims to monitor the efficient inflow and outflow of inventory of the manufacturing plant, being in charge of providing a system that allows having raw materials on time, enough workforce for production and a delivery system that sends the end-goods on time to distributors and retailers. Effective logistic management techniques help businesses to generate more revenue.
Therefore, it is less likely to implement logistics management if consumers would take any product that is offered to them with minimum to no customization.
Which of these statements is true?
a. Mass customization strategies can be applied to all products.
b. The key to mass customization is postponement.
c. Postponement depends upon the use of standardization and modularization.
d. Custom products give you the benefits of economies of scale.
The true statement among the options provided is that postponement in mass customization relies on the use of standardization and modularization. This allows for the efficient assembly of customized products. Mass customization may not apply to all products and does not inherently provide economies of scale for custom products.
Among the given statements, the true statement is: c. Postponement depends upon the use of standardization and modularization. This statement is accurate because postponement in mass customization involves delaying the final assembly or configuration of a product until the last possible moment. This strategy allows businesses to offer a variety of product configurations and caters to individual customer preferences. By using standardized and modular components, a company can assemble a customized product quickly in response to a specific customer order, thus combining the efficiency of mass production with the personalization associated with custom products.
It is important to clarify that mass customization strategies may not be applicable to all products (a), as some products or services cannot be easily customized at large scale due to technological or practical constraints. The statement that custom products give you the benefits of economies of scale (d) is generally false, as custom products typically do not benefit from the same economies of scale as standardized mass-produced items. As for the statement (b), while postponement is a key aspect of mass customization, it is not the sole factor that defines this approach.
On August 1, Steffen Computers, Inc. purchased thirty computer chips on account from a company located in Taiwan for 520,000 Taiwan dollars. On that date the Taiwan dollar is worth $0.034 On September 1, when the Taiwan dollar was worth $0.036, payment was made. The journal entry on September 1 by Steffen Computers Inc. would include a: (Round your final answer to the nearest dollar) (A) credit to Cash$17, 680. (B) debit to Accounts Payable $18, 720. (C) debit to Foreign-Currency Transaction Loss-$1040. (D) credit to Foreign-Currency Transaction Gain-$1040.
Answer:
(C) debit to Foreign-Currency Transaction Loss-$1040
Explanation:
Foreign currency related Financial assets and financial liabilities are usually revalued with any difference as a result of the exchange rates posted as a gain or loss in the income statement.
On transaction date, cost of assets
= 520000 * $0.034
On payment date, the amount paid
= 520000 * $0.036
The amount paid is higher than the liability recorded before hence the difference is recognized as a loss on foreign exchange.
= 520000 * $0.036 - 520000 * $0.034
= $1040
At the end of the current year, Accounts Receivable has a balance of $590,000; Allowance for Doubtful Accounts has a debit balance of $5,500; and sales for the year total $2,660,000. Bad debt expense is estimated at 1/4 of 1% of sales. a. Determine the amount of the adjusting entry for uncollectible accounts. $ b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable $ Allowance for Doubtful Accounts $ Bad Debt Expense $ c. Determine the net realizable value of accounts receivable.
Answer and Explanation:
a. The computation of uncollectible accounts and Journal entry is shown below:-
Bad Debt expenses Dr, $6,650
($2,660,000 × 1 ÷ 4× 1%)
To Allowance for doubtful accounts $6,650
(Being uncollectible accounts is recorded)
b. The computation of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense is shown below:-
Accounts receivable = $590,000
Allowance for Doubtful Accounts = (Sales of the year × 1 ÷ 4 × 1%) - Credit balance
= ($2,660,000 × 1 ÷ 4 × 1%) - $5,500
= $6,650 - $5,500
= $1,150
Bad debt expenses = Sales of the year × 1 ÷ 4 × 1%
= $2,660,000 × 1 ÷ 4 × 1%
= $6,650
c. The computation of net realizable value of accounts receivable is shown below:-
Net realizable value = Accounts receivable - Allowance for Doubtful Accounts
= $590,000 - $1,150
= $588,850
Power Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive has 100,000 shares of common stock outstanding as of the beginning of 2018. Power Drive has the following transactions affecting stockholders' equity in 2018. March 1 Issues 59,000 additional shares of $1 par value common stock for $56 per share. May 10 Purchases 5,400 shares of treasury stock for $59 per share. June 1 Declares a cash dividend of $1.70 per share to all stockholders of record on June 15. (Hint: Dividends are not paid on treasury stock.) July 1 Pays the cash dividend declared on June 1. October 21 Reissues 2,700 shares of treasury stock purchased on May 10 for $64 per share. Required: Record each of these transactions. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)
Solution:
Power Drive Corporation has the following beginning balances in its stockholders’ equity accounts on January 1, 2012:
Common Stock, $100,000;
Additional Paid-in Capital - common stock $4,830,000;
Retained Earnings, $2,520,000.
March 1 Issues 55,500 additional shares of $1 par value common stock for $67 per share.
Dr Cash 3,718,500
Cr Common stock 55,500
Cr Paid-in Capital 3,663,000
At this point there are 175,500 common shares outstanding
May 10 Repurchases 11,000 shares of treasury stock for $89 per share.
Dr Treasury stock 979,000
Cr Cash 979,000
At this point there are 164,500 common shares outstanding
June 1 Declares a cash dividend of $1.50 per share to all stockholders of record on June 15.
Dr Cash dividend 246,750 (164,500 x $1.50)
Cr Dividend payable 246,750
July 1 Pays the cash dividend declared on June 1.
Dr Dividend payable 246,750
Cr CAsh 246,750
October 21 Reissues 3,000 shares of treasury stock purchased on May 10 for $95 per share.
Dr Cash 285,000
Cr Treasury stock 267,000 (3,000 x cost of $89)
Cr Additional paid-in capital - treasury stock 18,000
At this point there are 167,500 common shares outstanding Stockholders' equity
Common stock - 175,500 shares of $1 par issued, 167,500 outstanding $175,500
Additional paid-in capital - common stock $8,493,000
Additional paid-in capital - treasury stock $18,000
retained earnings $2,803,250
less Treasury stock (8,000 shares) $712,000
Stockholders' equity $10,777,750
Answer:
The first stage in the accounting cycle is to make a journal entry. A sort of securities, common stock is a form of company or firm equity ownership.
Explanation:
The journal entries of Power Drive Corporation have been recorded from March 1 to October 21. The snipshot of the journal entries of the Power Drive corporation is attached below:
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Hercules Films is deciding on the price of the video release of its film Son of Frankenstein. Its marketing people estimate that at a price of p dollars, it can sell a total of q = 210,000 − 15,000p copies. (a) What is the revenue function? R(p)= (b) What price will bring in the greatest revenue? p = dollars Second derivative test: Your answer above is a critical point for the revenue function. To show it is a maximum, calculate the second derivative of the revenue function. R"(p)= Evaluate R"(p) at your critical point. The result is , which means that the revenue is at the critical point, and the critical point is a maximum.
Answer:
Revenue = - 15,000p² + 210,000p
Vertex at price = 7
Revenue = 735,000
Explanation:
Revenue = price x quantity
R(p) = (210,000 - 15,000p) = 210,000p - 15,000p²
We calcualte the vertex:
-b/2a = -(-210,000) / (15,000 x 2 ) = 210,000 / 30,000 = 7
-15,000 x 49 + 210,000 x 7 = 735000
R(p) = - 15,000p² + 210,000p
We derivate using the following identity:
[tex]ax^{b} = bax^{b-1}[/tex]
R(p)' = - 30,000p + 210,000
R(p)'' = -30,000
As the second derivate is constant negative there is only one critical point and, is a maximum.
The revenue function is R(p) = p(210,000 - 15,000p). To find the price that will bring in the greatest revenue, differentiate R(p) and find the critical point. Use the second derivative test to determine if the critical point is a maximum.
Explanation:The revenue function is calculated by multiplying the price (p) by the quantity (q). In this case, the quantity is given by q = 210,000 - 15,000p. Therefore, the revenue function is R(p) = p(210,000 - 15,000p).
To find the price that will bring in the greatest revenue, we need to find the maximum point of the revenue function. This can be done by finding the critical point, which occurs when the derivative of the revenue function is equal to zero. So, we differentiate R(p) with respect to p and set it equal to zero to find the critical point.
To determine if the critical point is a maximum or minimum, we can use the second derivative test. By taking the second derivative of the revenue function and evaluating it at the critical point, we can determine whether it is a maximum or not.
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Below is the information pertaining to five jobs in process on October 22. Determine the sequencing of these five jobs at this machine using the critical ratio rule. Assume a seven-day workweek. Job Remaining Arrival Date Due Date Processing Time A 2 days Oct. 12 Oct. 29 B 6 days Oct. 15 Oct. 28 C 5 days Oct. 18 Oct. 30 D 10 days Oct. 1 Oct. 31 E 8 days Oct. 10 Oct. 27
Complete question:
Below is the information pertaining to five jobs currently waiting to be processed on the same machine. Determine the sequencing of these five jobs at this machine using the SPT heuristic:
Job Process Time Arrival Date Due Date
A 2 days Oct. 12 Oct. 29
B 6 days Oct. 15 Oct. 28
C 5 days Oct. 18 Oct. 30
D 9 days Oct. 1 Oct. 31
E 7 days Oct. 10 Oct. 27
A. A-C-B-E-D
B. A-E-B-C-D
C. A-B-C-E-D
D. D-A-C-B-E
Answer:
A-C-B-E-D is the answer
Explanation:
Single-user scheduling or single-resource scheduling is the method of assigning a work group to a particular system or resource. The functions are structured in such a manner that one or more success metrics may be tailored.
The problem of arranging n workers on a single batch system to mitigate some of the daily expense functions is being studied. Jobs among each batch are handled sequentially such that the production period of the batch is equivalent to the total of the turnaround times of the workers present within.
Jobs should be sequenced according to the critical ratio rule, whereby the job with the smallest ratio of remaining time until the due date to remaining processing time is prioritized. The sequence would be job E, D, B, C, A.
Explanation:The task involves determining the sequencing of jobs using the critical ratio rule. The critical ratio is calculated by dividing the time remaining until the due date by the remaining processing time. The job with the smallest critical ratio should be processed first. Let's calculate the critical ratios for your listed jobs:
Job A: (29-22)/2 = 3.5Job B: (28-22)/6 = 1Job C: (30-22)/5 = 1.6Job D: (31-22)/10 = 0.9Job E: (27-22)/8 = 0.625Thus, the sequence of jobs according to the critical ratio rule should be job E, D, B, C, A.
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If the price level recently increased by 20% in England while falling by 5% in the United States, how much must the exchange rate change if PPP holds? Assume that the current exchange rate is 0.55 pounds per dollar.
Answer:
£.0.6875 per USD
Explanation:
PPP stands for purchasing power parities. It is actually the rate of currency conversion.
As per the given information, the price level recently increased by 20% in England while falling by 5% in the United States, so the net increase in the U.S. dollar would be (20+5)=25%.
This can be taken as that now 20% more pounds shall be needed to purchases the same U.S. goods.
Hence the new exchange rate would be:
= 1.25 x £0.55/$1 = £.0.6875 per USD
Final answer:
The purchasing power parity, or PPP, suggests the exchange rate should correct to accommodate the changes in purchasing power due to inflation or deflation. With a 20% rise in England's price level and a 5% decrease in the US, the exchange rate starting at 0.55 pounds per dollar must adjust to approximately 0.6947 pounds per dollar for PPP to hold.
Explanation:
The concept known as purchasing power parity (PPP) suggests that in the long term, the exchange rate between two currencies should move towards the rate that equalizes the prices of an identical basket of goods and services in any two countries. Given that the price level recently increased by 20% in England and decreased by 5% in the United States, the PPP would dictate that the exchange rate must adjust to reflect these changes in purchasing power.
To calculate the required change in the exchange rate if PPP holds, one can use the formula:
New Exchange Rate = Old Exchange Rate × (1 + Percentage Change in Domestic Price) / (1 + Percentage Change in Foreign Price)
Using the given exchange rate of 0.55 pounds per dollar, and the changes in price levels (England 20%, US -5%), the new exchange rate would be:
New Exchange Rate = 0.55 × (1 + 0.20) / (1 - 0.05)
New Exchange Rate = 0.55 × 1.20 / 0.95
New Exchange Rate ≈ 0.6947 pounds per dollar.
This indicates that the pound should appreciate relative to the dollar for PPP to hold after accounting for the changes in price levels.
Dextra Computing sells merchandise for $5,000 cash on September 30 (cost of merchandise is $3,000). The sales tax law requires Dextra to collect 3% sales tax on every dollar of merchandise sold. Record the entry for the $5,000 sale and its applicable sales tax. Also record the entry that shows the payment of the 3% tax on this sale to the state government on October 15.
Answer:
The journal entry is as follows:
Explanation:
September 30:
Recording the sale:
The cash that would be received = $5,000 + $5,000*3% = $5,150
Debit: Cash account $5,150
Credit: Sales account $5,000
Credit: 3% sales tax $150 (since it is payable)
September 30
Adjusting the inventory
Debit: Cost of goods sold $3,000
Credit: Inventory account $3,000
October 15:
Paying sales tax to government
Debit sales tax $150
Credit Cash account $150
Final answer:
To record the $5,000 sale and its applicable sales tax, you would make the following entries: Debit Cash $5,000, Credit Sales Revenue $5,000, Credit Sales Tax Payable $150. To record the payment of the 3% tax on the sale to the state government, you would make the following entries: Debit Sales Tax Payable $150, Credit Cash $150.
Explanation:
To record the $5,000 sale and its applicable sales tax, you would make the following entry in your books:
Debit Cash $5,000
Credit Sales Revenue $5,000
Credit Sales Tax Payable $150
To record the payment of the 3% tax on the sale to the state government, you would make the following entry:
Debit Sales Tax Payable $150
Credit Cash $150
The Pinkerton Publishing Company is considering two mutually exclusive expansion plans. Plan A calls for the expenditure of $56 million on a large-scale, integrated plant that will provide an expected cash flow stream of $9 million per year for 20 years. Plan B calls for the expenditure of $12 million to build a somewhat less efficient, more labor-intensive plant that has an expected cash flow stream of $3.8 million per year for 20 years. The firm's cost of capital is 11%.
Calculate each project's NPV. Round your answers to the nearest dollar.
Calculate each project's IRR. Round your answers to two decimal places.
Set up a Project
Δ
by showing the cash flows that will exist if the firm goes with the large plant rather than the smaller plant.
Year 0
Years 1-20
What is the NPV for this Project
Δ
? Round your answer to the nearest dollar.
What is the IRR for this Project
Δ
? Round your answer to two decimal places.
Answer:
NPV of Plan A: $15,669,953.
NPV of Plan B: $18.260,647.
For the Plan A, the IRR is r=0.15.
For the Plan B, the IRR is r=0.32.
Explanation:
We have two expansion plans:
Plan A:
- Expenditure: -$56 million
- Cash flow: $9 million/year
- Duration: 20 years
Plan B:
- Expenditure: -$12 million
- Cash flow: $3.8 million/year
- Duration: 20 years
The NPV of plan A can be expressed as:
[tex]NPV_A=-I_0+\sum_{k=1}^{20} (CF_k)(1+i)^{-k}\\\\NPV_A=-I_0+(CF)[\frac{1-(1+i)^{-20}}{i}] \\\\NPV_A=-56+9*[\frac{1-(1.11)^{-20}}{0.11}]=-56+9*\frac{0.876}{0.11}=-56+9*7.963328117 \\\\NPV_A=-56+71.66995306= 15.669953[/tex]
NPV of Plan A: $15,669,953.
The NPV of plan B can be expressed as:
[tex]NPV_B=-I_0+\sum_{k=1}^{20} (CF_k)(1+i)^{-k}\\\\NPV_B=-I_0+(CF)[\frac{1-(1+i)^{-20}}{i}] \\\\NPV_B=-12+3.8*[\frac{1-(1.11)^{-20}}{0.11}]=-12+3.8*\frac{0.876}{0.11}=-12+3.8*7.963328117\\\\NPV_B=-12+30.26064685=18.260647[/tex]
NPV of Plan B: $18.260,647.
To calculate the IRR, we have to clear the discount rate for NPV=0. We can not solve this analitically, but we can do it by iteration (guessing) or by graphing different NPV, with the discount rate as the independent variable.
For the Plan A, the IRR is r=0.15.
For the Plan B, the IRR is r=0.32.
Strategically, having more than 1,000 suppliers results in a complex task of managing those suppliers, ensuring the quality of the products, and maintaining the IKEA brand. While we will address global supply chains later on, from a global strategy standpoint how would you manage IKEA’s global suppliers?
Answer:
There are pros and cons of having 1,000 different suppliers for IKEA. In one way you can are not limited to choice, price or quality and have enough suppliers to shift production requirements to meet demand surges.
However, manage 1,000 different suppliers can also lead to quality issues that are difficult to sustain. IKEA can do a number of things including:
Explanation:
With so many products, IKEA can categorize each supplier e.g. fabric suppliers, wood suppliers, kitchen etc. In this way, it will be easier for different departments to be set up that actively manage these category of suppliers.Since IKEA is a global brand, they can further categorise each supplier based on location. For example, they can have suppliers for the Asia-Pacific Market, other suppliers for the Middle East and another group for Europe and North America.IKEA can also outsource is supply. Going by an 80:20 strategy where 80% of them are direct suppliers while 20% of them are outsourced, third part suppliers who only step in when required.Managing IKEA’s global suppliers can be strategically achieved with two key concepts - economies of scale and value chain specialization. By consolidating suppliers and encouraging them to specialize in specific product components, IKEA could streamline its global supply chain significantly. Implementing stringent quality control measures will ensure product quality and consistency with the IKEA brand.
Explanation:Managing IKEA’s global suppliers strategically from a global perspective would involve the practice of economies of scale and value chain specialization. Economies of scale indicate the financial advantages of producing in large quantities, allowing one or two large producers to supply a significant portion of the market. In IKEA's case, this could involve consolidating suppliers where possible to reduce the complexity of supplier management.
Further, IKEA can leverage the concept of value chain specialization. The idea behind this is the division of production stages across different firms, in various locations, to increase efficiency. It involves suppliers focusing on producing specialized parts instead of whole finished products. IKEA could apply this strategy by ensuring that each of their 1,000 suppliers specialize in producing a particular component or range of products; this way, IKEA avoids overlap and enhances performance.
To ensure the quality of products and the IKEA brand's maintenance, they could implement and enforce strict quality control measures across its suppliers, including regular audits and inspections. Moreover, IKEA can provide workshops and training for their suppliers to ensure that products are manufactured to meet the IKEA brand quality and style.
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Ortega Company manufactures computer hard drives. The market for hard drives is very competitive. The current market price for a computer hard drive is $76. Ortega would like a profit of $13 per drive. What target cost Ortega should set to accomplish this objective?
Answer:
The correct answer is $63.
Explanation:
According to the scenario, the computation of the given data are as follows:
So, we can calculate the target cost to accomplish the objective by using following formula:
Target cost = Market price - Profit
Where, Market price = $76
Profit = $13
By putting the value in the formula, we get
Target cost = $76 - $13
= $63
The management of Madeira Computing is considering the introduction of a wearable electronic device with the functionality of a laptop computer and phone. The fixed cost to launch this new product is $900,000. The variable cost, which includes material, labor, and shipping costs, is uncertain. The Normal Probability Distribution with an average of $200 and a standard deviation of $12 is assumed to be a good description of the variable cost. The demand for the product is expected to be between 20,000 units and 30,000 units (Integer Uniform Distribution). The product will sell for $250 per unit.
Required:
A) Develop a what-if spreadsheet model computing profit for this product in the base case, worst-case, and best-case scenarios.
Best-case profit: $ ________
Worst-case profit: $ _______
Base case profit: $ ________
Shares of common stock of the Samson Co. offer an expected total return of 12.8 percent. The dividend is increasing at a constant 5.1 percent per year. The dividend yield must be:
7.70 percent.
5.10 percent.
12.80 percent.
2.51 percent.
17.90 percent.
Answer:
A. 7.70 percent.
Explanation:
Generally, dividend yield is the annual dividend per share divided by the stock price per share. However, in finance, dividend yield is the difference between the expected total return and dividend growth rate per year.
Therefore, Dividend yield = Expected total return - Dividend growth rate (Increasing)
Dividend yield = 12.8% - 5.1%
Hence, Dividend yield = 7.70%
Therefore, option A is the answer.
Jumbuck Exploration has a current stock price of $2.00 and is expected to sell for $2.10 in one year's time, immediately after it pays a dividend of $0.26. Which of the following is closest to Jumbuck Exploration's equity cost of capital?
Question 9 options:
A) 9%
B) 12%
C) 18%
D) 22%
Final answer:
To calculate Jumbuck Exploration's equity cost of capital, we need to find the required return on the stock. Given the expected price and dividend, we can calculate the dividend yield and capital gain yield to determine the expected return. The closest option to Jumbuck Exploration's equity cost of capital is 18%.
Explanation:
To calculate Jumbuck Exploration's equity cost of capital, we need to find the required return on the stock. The equity cost of capital is the return that investors expect to earn on their investment in the company's stock. This return is typically determined based on the risk and expected return of similar investments in the market.
Given that Jumbuck Exploration is expected to sell for $2.10 in one year's time and pays a dividend of $0.26, we can calculate the expected return as follows:
First, we calculate the dividend yield by dividing the dividend by the current stock price: $0.26 / $2.00 = 0.13 or 13%.Next, we calculate the capital gain yield by dividing the expected price increase by the current stock price: ($2.10 - $2.00) / $2.00 = 0.05 or 5%.Finally, we sum the dividend yield and capital gain yield to get the expected return: 13% + 5% = 18%.Therefore, the closest option to Jumbuck Exploration's equity cost of capital is option C) 18%.
Hearthstone, Inc., a home healthcare firm, has been using a single predetermined overhead allocation rate with direct labor hours as the allocation base to allocate overhead costs. The direct labor rate is $200 per hour. Clients are billed at 190% of direct labor cost. Sofi Acosta, the president of Hearthstone, decided to develop an ABC system to more accurately allocate the indirect costs. She identified two activities related to the total indirect costslong dashtravel and information technology (IT) support. The other relevant details are given below: Activity Allocation base Estimated costs Estimated quantity of allocation base Travel Miles driven $85,000 3,000 miles IT Support Direct labor hours 60,000 1,300 DLH Total $145,000The predetermined overhead allocation rate for travel will be? A. $49.17 per mile B. $26.86 per mile C. $78.33 per mile D. $43.71 per mile
Answer:
Correct answer is B.
$26.86 per mile
Explanation:
Total estimated cost for travel = 94000
Total miles driven = 3500
Overhead allocation rate = total estimated cost/total miles
= 94000/3500
=26.85714 or 26.86
To calculate the predetermined overhead allocation rate for travel at Hearthstone, Inc., you divide the estimated costs of $185,000 by the estimated quantity of the allocation base, which is 3,000 miles, resulting in $43.71 per mile.
The student is asking how to calculate the predetermined overhead allocation rate for the travel activity at Hearthstone, Inc., a home healthcare firm. To determine this rate, we will divide the estimated costs by the estimated quantity of the allocation base. In this case, the estimated costs for travel are $108,000 and the estimated miles driven are 3,000 miles.
Using these figures, the calculation for the overhead allocation rate per mile for travel would be:
$185,000 (Estimated costs for travel) / 3,000 miles (Estimated quantity of allocation base) = $43.71 per mile
Therefore, the correct answer is:
D. $43.71 per mile
On January 1, 2013, Pastel Colors Corporation purchased drilling equipment for $11,500. The equipment has an estimated useful life of four years and a salvage value of $200.
Assuming that Pastel Colors uses the straight-line method of depreciation, if it trades the equipment for new equipment with a list price of $15,500 on December 31, 2014, and pays $4,050 in the exchange, assuming the exchange lacks commercial substance, the new equipment should be recorded at:
a) $15,500. b) $11,450. c) $9,850. d) $9,900.
Answer:
$9,900
Explanation:
For computing the new equipment in case of lacking commercial substance
Cost of the equipment as on Jan 1, 2013 $11,500
Less: Salvage Value $200
Depreciable Value $11,300
Useful Life 4 years
Depreciation per year is
= $11300 ÷ 4
= $2,825
Now the written down value as on Dec 31,2014 is
= $11,500 - $2,825 - $2,825
= $5,850
And, List price of new equipment is $15,500
So, the new equipment should be recorded at
= $4,050 + $5,850
= $9,900
Ward and June are in the 32% tax bracket. A bond of Dell Computer Corporation with a face value of $10,000 is included in their assets. The bond pays $1,000 interest annually. Ward and June gift the bond to their son, Wally (age 19), on January 1, 2019. Wally is in the 12% tax bracket. The 2019 net tax savings for the family unit of Ward, June, and Wally related to the transfer of the bond is:
Answer:
at least $200
Explanation:
Currently Ward and June are paying $1,000 x 32% = $320 in taxes for interest yielded Dell's bond.
Assuming Wally (their son) is actually making more than $12,200 per year (standard deduction), then he would pay only $1,000 x 12% = $120 in taxes for the same bond.
Since the gift's value ($10,000) is below the gift tax threshold ($15,000) they will not pay any additional taxes.
So their net savings are at least $320 - $120 = $200, and could be higher, up to $320 depending on Wally's gross income.
By gifting the bond to Wally, the family reduces its overall tax liability by this amount, which represents a significant tax advantage. This strategy allows for income shifting from the higher tax bracket of Ward and June to the lower tax bracket of Wally, resulting in overall tax savings for the family.
The 2019 net tax savings for the family unit of Ward, June, and Wally related to the transfer of the bond can be calculated by considering the tax implications for each family member.
Ward and June (Gift Givers):
Ward and June are in the 32% tax bracket, which means they would have to pay 32% tax on the $1,000 interest income generated by the bond if they kept it.If they gift the bond to Wally, they no longer have to report the interest income on their tax return. This results in tax savings of $1,000 * 32% = $320 for each of them.So, the total tax savings for Ward and June is $320 + $320 = $640.Wally (Recipient):
Wally is in the 12% tax bracket. If he receives the bond as a gift, he will be responsible for reporting and paying taxes on the $1,000 interest income at a 12% rate.His tax liability on this income is $1,000 * 12% = $120.Now, let's calculate the net tax savings for the family unit:
Tax savings for Ward and June: $640Tax liability for Wally: -$120To find the net tax savings, we subtract Wally's tax liability from Ward and June's tax savings:
$640 - $120 = $520Therefore, the 2019 net tax savings for the family unit of Ward, June, and Wally related to the transfer of the bond is $520.
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Suppose the civilian noninstitutionalized working-age population is 35.9 million in in a hypothetical economy. Of these, 4.9 million are working part-time and 14.53 million are working full-time. Assume the Bureau of Labor Statistics (BLS) definitions are used for calculating unemployment data. Among those not working, the most recent job-search activity for 2.90 million happened less than two weeks ago, while 1.72 million most recently looked for work between two and four weeks ago. An additional 0.86 million most recently looked for work five weeks ago, and the remaining 10.99 million who do not have jobs have not looked for work in the past six weeks. Round your answers to two decimal places.
1. What is the size of the total labor force?
Answer:
24.05 million
Explanation:
The computation of the size of the total labor force is shown below:
Size of the labor force = Number of employed people + number of unemployed people
where,
Number of employed people = Number of people working full time + number of people working part time
= 14.53 million + 4.9 million
= 19.43 million
Number of unemployed people = Less than two weeks + two and four weeks ago
= 2.90 million + 1.72 million
= 4.62 million
So, the size of the labor force is
= 19.43 million + 4.62 million
= 24.05 million
Growing perpetuity: You are evaluating a growing perpetuity investment from a large financial services firm. The investment promises an initial payment of $20,000 at the end of this year and subsequent payments that will grow at a rate of 3.4 percent annually. If you use a 9 percent discount rate for investments like this, what is the present value of this growing perpetuity
Answer:
The correct answer is $357,142.86.
Explanation:
According to the scenario, the given data are as follows:
Initial payment = $20,000
Growth rate = 3.4%
Discount rate = 9%
So, we can calculate the present value, by using following formula:
Present Value = Initial payment ÷ ( Discount rate - Growth rate)
By putting the value, we get
= $20,000 ÷ (0.09-0.034)
= 357,142.86
Hence, The present value of this Growing perpetuity is $357,142.86
Final answer:
The present value of a growing perpetuity investment with an initial payment of $20,000, growing at a rate of 3.4% annually, and discounted at a rate of 9% is $357,142.86.
Explanation:
To calculate the present value of a growing perpetuity, you can use the formula PV = P / (r - g), where PV is the present value, P is the initial payment, r is the discount rate, and g is the growth rate of the perpetuity. In this case, the initial payment (P) is $20,000, the discount rate (r) is 9 percent (or 0.09), and the growth rate (g) is 3.4 percent (or 0.034).
Plugging the numbers into the formula gives us: PV = $20,000 / (0.09 - 0.034) = $20,000 / 0.056 = $357,142.86
Therefore, the present value of this growing perpetuity investment, using a 9 percent discount rate, is $357,142.86.
Suppose Musashi and Rina are playing a game in which both must simultaneously choose the action Left or Right. The payoff matrix that follows shows the payoff each person will earn as a function of both of their choices. For example, the lower-right cell shows that if Musashi chooses Right and Rina chooses Right, Musashi will receive a payoff of 4 and Rina will receive a payoff of 4.
Rina Rina
Left Right
Musashi Left 4, 3 6,1
Musashi Right 7,6 4,4
The only dominant strategy in this game is for _____ to choose _____.
The outcome reflecting the unique Nash equilibrium in this game is as follows: Musashi chooses _____and Rina chooses _____.
Rina has a dominant strategy to choose Left. There is a single Nash equilibrium where Musashi chooses Right and Rina chooses Left.
The question provided describes a simultaneous-move game with a payoff matrix, which is a concept from game theory in economics and mathematics. To find the dominant strategy and the Nash equilibrium, we compare the payoffs to each player for their possible moves.
Examining the payoff matrix:
If Musashi chooses Left, Rina has a higher payoff choosing Left (3 vs. 1).If Musashi chooses Right, Rina still has a higher payoff choosing Left (6 vs. 4).This shows that Rina has a dominant strategy: always choose Left, as it gives her a higher payoff regardless of Musashi's choice. Now, let's examine Musashi's best responses:
If Rina chooses Left, Musashi's best response is Right (7 vs. 4).If Rina chooses Right, Musashi's best response is also Right (4 vs. 6).Musashi does not have a dominant strategy since his best response depends on Rina's choice. However, given that Rina's dominant strategy is to choose Left, Musashi's best response to that is to choose Right.
The Nash equilibrium is the outcome where each player's strategy is the best they can do, given the other player's strategy. Since Rina will choose Left, and Musashi's best response to Left is Right, the Nash equilibrium for this game is:
Musashi chooses RightRina chooses LeftThis Nash equilibrium is not unique if we were only considering best responses; however, because Rina has a dominant strategy, this guides Musashi's choice, resulting in a single Nash equilibrium.
rogen Grocer's 2016 balance sheet shows average stockholders’ equity of $12,000 million, net operating profit after tax of $1,140million, net income of $380 million, and common shares issued of $1,916 million. The company has no preferred shares issued. Krogen Grocer’s return on common stockholders’ equity for the year is: Select one: A. 6.33% B. 15.97% C. 9.50%
Answer: 3.17%
Explanation:
Given the Net Income and the Average stockholders' equity as well as an assumption that no preferred stock was issued, we can use the following formula to calculate for Return on Common Stockholders' Equity,
Return on Common Stockholders' Equity = Net income/Average stockholders’ equity
= 380 / 12,000
= 0.031667
= 3.17 %
Krogen Grocer’s return on common stockholders’ equity for the year is 3.17%.
I don't see it in the options so the options might be incomplete but this is the correct answer.
Abigail and Darcy are married. In 2017 they sold there home, which they had purchased in 2012, and lived in it since 2013. They sold the house for $865,000. They purchased the house for $270,000 and made improvements costing $45,000. Abigail and Darcy immediately purchased another home for $800,000. What is their recognized gain in 2017 from the sale of the home assuming this is the only home they ever sold?
Answer:
$485,000
Explanation:
Initial cost of home= $270,000+$45,000= $315,000.
Recognized gain= $800,000 - $315,000 = $485,000.
Remember, it was mentioned that Abigail and Darcy immediately purchased another home for $800,000. Very likely this money was derived from the first and only home they ever sold.
Therefore, their recognized gain after substracting the cost is $485,000.
When working on opportunities, sales representatives at Universal Containers need to understand how their peers have successfully managed other opportunities with comparable products, competing against the same competitors.
A. Big deal alerts
B. Chatter groups
C. Similar opportunities
D. Opportunity update reminders
Answer: (B) Chatter group and (C) Similar opportunities
Explanation:
The chatter group and the various types of similar opportunities are features which is used by the system administrators for the purpose of facilitating the given working opportunities.
The chatter group is one of the type of collaboration tool in which the various types users can easily interact and also communicating socially.
According to the given question, the universal containers effectively understand that the peers are managing various types of opportunities by using the comparable products and the services with the competitors in the market.
Therefore, Option (B) and (C) are correct answer.