Answer:
The Budgeted direct labor costs for June would be $1,262,560
Explanation:
For computing the direct labor cost, first we have to calculate how many units of production is used. The equation is shown below :
Total Production Units = Ending finished goods inventories + sales units - opening finished goods inventories
= 170 + 49,000 - 610
= 48,560 units
Now, multiply these units with direct labor hour rate which equals to
= Units produced × direct labor hour rate
= 48,560 × $26.00
= $1,262,560
Thus, Budgeted direct labor costs for June would be $1,262,560
______________ are people who invest very small amounts of personal resources early in a new business's life in the hopes of eventually selling a percentage of the company for a profit.A.Angel investorsB.CrowdfundersC.Advisory boardsD.MicrolendersE.Venture capitalists
Answer: the correct answer is A. Angel investors.
Explanation:
Angel investors are people who invest very small amounts of personal resources early in a new business's life in the hopes of eventually selling a percentage of the company for a profit.
Robert only consumes X and Y, and his indifference curves have the usual convex shape. Consider the consumption bundles (3, 9), (6, 6), and (9, 3) (Hint: The consumption bundles completely exhaust Robert's income). If Robert is indifferent between (3, 9) and (9, 3), then:
Answer: Then consumption bundle (3,9) and (9,3) will lie on the same indifference curve.
Since his consumption bundles completely exhaust his income , therefore the indifference curve will be tangential to the budget constraint.
Explanation:
Given : Robert only consumes X and Y, and his indifference curves have the usual convex shape.
Consumption Bundles (3, 9), (6, 6), and (9, 3).
If Robert is indifferent between (3, 9) and (9, 3), then: consumption bundle (3,9) and (9,3) will lie on the same indifference curve.
Also, since his consumption bundles completely exhaust his income , therefore the indifference curve will be tangential to the budget constraint.
During a year, Teri’s monthly sales compensation ranged between $22,000 and $30,000 per month and units sold ranged between 1,400 and 2,200 units for those same months. Required: Use the high–low method to determine Teri’s monthly salary and commission rate per unit sold and then calculate the total number of units sold in a year when Teri’s total compensation amounted to $291,000. (Round your "Commission rate" to 2 decimal places.)
Answer:
8,000 = fixed cost
10 unit cost
Explanation:
High low method calcualtes the difference to get the variable cost:
2,200 units generated 30,000 (fixed + variable)
minus
1,400 units generated 22,000 (fixed + variable)
800 8,000 variable
800 units generated $8,000 of cost
$8,000 / 800 untis = 10 unit cost
Now we solve for fixed cost
total cost = fixed cost + variable cost
total cost = fixed cost + quantity x variable unit cost
30,000 = fixed + 2,200 x 10
30,000 = fixed + 22,000
30,000 - 22,000 = fixed
8,000 = fixed cost
1. What are the benefits of creating a comprehensive crisis response plan before a crisis happens? Please research and share at least 1 example of an organization that created and then used such a plan. What happened?
Answer: the benefits are many but mainly if a company has a comprehensive crisis response plan then it is prepared to deal with unforseeable problems that will always appear in a company life.
One great example of a comprehensive crisis response plan was Ford's Bailout. Although Ford did not receive TARP funds, it did receive government loans. These were critical because banks were not lending during the financial crisis. It requested a $9 billion line-of-credit from the government.
Explanation:
Crisis management is the application of strategies designed to help an organization deal with a sudden and significant negative event. A crisis can occur as a result of an unpredictable event or as an unforeseeable consequence of some event that had been considered a potential risk.
Most companies are schooled in establishing a crisis management plan in order to react quickly and eliminate the problem. Here is the process: Identify and define the crisis. Establish an overall corporate response.
In its income statement for the year ended December 31, 2019, Sheridan Company reported the following condensed data. Operating expenses $ 759,720 Interest revenue $ 29,970 Cost of goods sold 1,334,200 Loss on disposal of plant assets 15,910 Interest expense 71,270 Net sales 2,416,300 Other comprehensive income 6,920. Prepare a multiple-step income statement. (List other revenues before other expenses.)
Final answer:
To prepare a multiple-step income statement for Sheridan Company, list the revenue and expense items separately. Calculate the total revenue, total expenses, and net income by summing the respective items. The net income for Sheridan Company is $272,090.
Explanation:
A multiple-step income statement categorizes revenues and expenses into different sections to provide a clearer picture of a company's financial performance. To prepare a multiple-step income statement for Sheridan Company, we can list the various revenue and expense items in the following manner:
Revenue
Net Sales: $2,416,300
Interest Revenue: $29,970
Other Revenues: $6,920
Cost of Goods Sold
$1,334,200
Operating Expenses
$759,720
Other Expenses
Loss on Disposal of Plant Assets: $15,910
Interest Expense: $71,270
Total Revenue
(Net Sales + Interest Revenue + Other Revenues) = $2,416,300 + $29,970 + $6,920 = $2,453,190
Total Expenses
(Cost of Goods Sold + Operating Expenses + Other Expenses) = $1,334,200 + $759,720 + $15,910 + $71,270 = $2,181,100
Net Income
(Total Revenue - Total Expenses) = $2,453,190 - $2,181,100 = $272,090
Therefore, the multiple-step income statement for Sheridan Company for the year ended December 31, 2019, shows a net income of $272,090.
Babble, Inc., buys 405 blank cassette tapes per month for use in producing foreign language courseware. The ordering cost is $11.75. Holding cost is $0.11 per cassette per year. a. How many tapes should Babble order at a time? Babble should order nothing tapes at a time. (Enter your response rounded to the nearest whole number.) b. What is the time between orders? The time between orders is nothing months. (Enter your response rounded to one decimal place.)
Answer:
(A) EOQ = 1019
(B) Time between Order = 2.5 months
Explanation:
Economic Order Quantity
This formula give us the quantity order with the fewer cost.
[tex]eoq = \sqrt{ \frac{2ds}{h} } [/tex]
Where
d = annual demand = 405 X 12 = 4860
s= supply cost or ordering cost = 11.75
h= holding cost= 0.11
[tex] \sqrt{ \frac{2 \times 4860 \times 11.75}{0.11} } = 1018.9566[/tex]
EOQ = 1019
Next, we need to know when to order:
[tex]eoq \div \frac{demand}{12 \: months} = time \: per \: order[/tex]
[tex]1019 \div \frac{4860}{12} = 2.516[/tex]
the ratio give us an idea of the consumption rate per month. we then divide the EOQ by this to know how many time between order we can have.
The number of tapes Babble should order, and the time period between orders can be calculated using the Economic Order Quantity (EOQ) model and the Time Between Orders (TBO) formula. By substituting the given values into these formulas, the desired values can be obtained.
Explanation:To solve this problem, we need to use the Economic Order Quantity (EOQ) model in inventory management. The EOQ is the number of units that a company should add to inventory with each order to minimize the total costs of inventory—such as holding costs, order costs, and shortage costs.
The formula for EOQ is: EOQ = √ [(2 * D * S) / H]. Where D is the demand rate, S is the order cost, and H is the holding cost.
Substituting the given values into the formula, we get: EOQ = √ [(2 * 405 * 11.75) / 0.11]. Solving this equation we get the number of tapes Babble should order at a time.
For the time between orders we need to calculate: TBO = D / EOQ. This will give us the time period between orders in months. It's important to note that TBO is typically in the same time interval as demand rate. Here, D is in months, so TBO will also be in months.
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The weighted-average process-costing method calculates the equivalent units by ________.A) considering only the work done during the current period B) the units started during the current period minus the units in ending inventory C) the units started during the current period plus the units in ending inventory D) the equivalent units completed during the current period plus the equivalent units in ending inventory
Answer:
The correct answer is option D) "the equivalent units completed during the current period plus the equivalent units in ending inventory".
Explanation:
The weighted-average process-costing method establishes an average cost per unit using the equivalent units completed during the current period plus the equivalent units in ending inventory. This method is similar to the first-in first-out (FIFO), with the difference that this method keeps the unfinished goods inventory separate to make the calculation.
Under purchasing power parity, the future spot exchange rate is a function of the initial spot rate in equilibrium and a. the inflation differential. b. the forward discount or premium. c. the income differential. d. none of the above
Answer:
The correct answer is a) the inflation differential.
Explanation:
Inflation differential is the difference we can find between two countries in exchange rates. The inflation differential can produce losses for the company if, in the country you want to buy, there is a big difference in your exchange rate, since this raises the prices of the product. As a result, the company has a loss; it can also happen if It is a case of exports.
If the inflation differential is maintained for an extended period, it can cause loss of competitiveness, since the profit margin of the products would be affected.
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A Hummer is rated at 13 miles per gallon of gas and gas currently costs approximately $2.85 per gallon. If you drive from Orlando, Florida to San Francisco, CA (2,890 miles), how much money will you spend on gas? Assume it is a one-way trip.
Answer:
If a Hummer is rated at 13 miles per gallon of gas, which costs approximately $2.85 per gallon, and I'm driving 2,890 miles from Orlando, FL, to San Francisco, CA, I will spend $633.55 in gas.
Explanation:
13 miles per gallon --- $2.85
2890 miles in total from Orlando, Florida, to San Francisco, California.
2890/13: total gallons of gas consumed --- 222,3 gallons of gas
222,3 x 2.85: total of money spent in gas --- $633.55
Suppose market demand is QD=50-2P and market supply is QS=40+2P. The market equilibrium price is $___________ nothing and the equilibrium quantity is _______units. (Enter your responses rounded to two decimal places.) Suppose the government institutes a price floor of $5.00. The price floor will results in a ▼ surplus shortage of nothing units. (Enter your response as a whole number.)
Answer:
The market equilibrium price is $ 2.50 and the equilibrium quantity is 45 units.
IF price floor is set at $5 then it will be a surplus of quantity.
Explanation:
[tex]\left \{ {{QD=50-2P} \atop {QS=40+2P}} \right.[/tex]
50 - 2P = 40+2P
50-40 = 2P + 2P
10 = 4P
10/4 = P
2.5= P
50-2*2.5 = 50- 5 = Q45
If P = 5
40 + 2P = 40 + 2*5 = 50 supply quantity
50 - 2*5 = 50 - 10 = 40 demand quantity
supply will be greater than demand, it will be a surplus
Final answer:
The market equilibrium price is $2.5, and the equilibrium quantity is 45 units. If a price floor of $5 is introduced, it results in a surplus of 10 units, indicating that the supply exceeds the demand.
Explanation:
To find the market equilibrium price and quantity, we set the market demand and market supply equal to each other, i.e., QD = QS. Given that the market demand is QD = 50 - 2P and the market supply is QS = 40 + 2P, we can find the equilibrium by solving:
50 - 2P = 40 + 2P
Subtracting 40 from both sides and adding 2P to both sides yields:
10 = 4P
Thus, P = 2.5. Therefore, the equilibrium price is $2.5.
To find the equilibrium quantity, we substitute P = 2.5 into either the demand or supply equation. Using the demand equation: QD = 50 - 2(2.5) = 45. So, the equilibrium quantity is 45 units.
If the government sets a price floor of $5, which is above the equilibrium price of $2.5, we need to evaluate the new market conditions. At a price of $5, the demand would be QD = 50 - 2(5) = 40 units, and the supply would be QS = 40 + 2(5) = 50 units. Thus, there would be a surplus of 10 units as the quantity supplied exceeds the quantity demanded by 10 units when the price is set at $5.
Firm I is convinced that a certain class of technologies holds real economic potential. However, it does not know, for sure, which particular version of this technology is going to dominate the market. There are eight competing versions of this technology currently, but ultimately, only one will dominate the market. Should Firm I invest in all eight of these technologies itself? Should it invest in just one of these technologies? Should it partner with other firms that are investing in these different technologies?
Answer:
Partner with technology investing firms
Explanation:
Disruptive technologies are capable of completely changing the configuration of a market, so that in the face of a perception of technological change, companies must take technological adherence measures, otherwise their own existence may be at risk. Given the uncertainty about which technology will be right, an appropriate strategy would be to partner technology transfer with firms that are investing in these technologies.
The best strategy for Firm I to take is to partner with technology investing firms
What is Partnership?This refers to the coming together of different companies to use their strengths to complement each other and dominate a market.
Hence, we can note that because Firm I is uncertain about the class of technologies that hold real economic potential, it would be wise to partner with technology investing firms and therefore, limit the risk.
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Beck Company has inventory of $725,000 in its stores as of December 31. It also has two shipments in transit that left the suppliers' warehouses by December 28. Both shipments are expected to arrive on January 5. The first shipment of $210,000 was sold f.o.b. destination and the second shipment of $102,000 was sold f.o.b. shipping point. Beck Company also has consigned goods of $72,000 awaiting sale with Meyer Company. What amount of inventory should Beck Company report on its balance sheet as of December 31?
Answer:
Total Inventory $899,000
Explanation:
Inventory at hand $725,000
Inventory in transit $102,000
Inventory in consignation $72,000
Total Inventory $899,000
Notice:
The first cargo is under term FOB destination, which means the goods are still property of the seller, so are not part of Beck company's yet.
While the second cargo is fob shipping point, Beck assume possesion of the gods as soon as they enter the dock.
The demand curve for lawn fertilizer has a _______________ slope because of ________________________. A) negative; the law of supply. B) positive; incentives to earn profit by suppliers. C) negative; the law of demand. D) positive; expectations concerning future prices. E) constant; the impact of changing consumer tastes.
Answer: (C) negative; the law of demand
Explanation: The law of demand states that at a higher price consumers will demand a lower quantity of a good. i.e. The demand is derived from the law of diminishing marginal utility, which states that the marginal utility of a good or service declines as its available supply increases.
Hence the demand curve is downward sloping.
________ is a form of short-term financing. Businesses buy merchandise from their suppliers, but are not required to pay for their purchases until some future date.3
Answer:
TRADE CREDITExplanation:
Trade Credit is the credit extend by the account payable, according terms with the suppliers, which can be free of interest for a certain ammount of time (n/30) and from there they start to generate interest.
Remember:
Short-term financing are financing tools used for period of less than a year
Other short-term financing are:
Short-erm LoansFactoringBusness line of creditInvoice discountingThe right answer to fill in the missing parts of the problem is Trade credit.
Further explanationCredit is the granting of the use of money or goods to another person at a certain time with a guarantee or not with collateral, by providing services of interest, or without interest.
In general, types of loans can be classified based on their use, purpose, period, and business sector.
Type of credit Based on its use
1. Investment Credit
It is a credit given by a bank for business expansion or development purposes.
2. Working Capital Loans
It is a credit given by a bank to increase the production operation capability of a company.
Types of Credit-Based on Purpose
1. Earning Credit
Used to increase business or production or investment
2. Consumer credit
It is a credit given by banks to the public for personal or institutional consumption.
3. Trade Credit
Credit given by banks to buy commodities or goods to be traded or resold. Debt payments are expected from the sale of the merchandise.
Type of Credit-Based on Term
1. Short-term Credit
Loans with maturities of less than one year or a repayment maturity of at most one year.
2. Medium-term Credit
Medium-term loans are loans issued by banks with repayment periods ranging from one year to three years.
3. Long-term Credit
Long-term credit is a loan that has a repayment period of more than 3 years or 5 years.
Business Sector Based Credit
1. Agricultural Credit
Loans disbursed to finance the agricultural sector or smallholder plantations.
2. Farm Credit
Credit issued to finance the livestock business sector with short-term or long-term credit
3. Industrial Credit
Loans disbursed by banks to finance small, medium or large industrial sectors.
4. etc.
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It is January 2nd. Senior management of Digby meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing 50,000 shares of stock plus a new bond issue. The CFO happily notes this will raise their Leverage (Assets/Equity) to a new target of 2.43. Assume the stock can be issued at yesterday's stock price $23.03. Which of the following statements are true? (Select 2 answers) Digby bond issue will be $47,165 Total Assets will rise to $150,947,421 Digby working capital will be unchanged at $21,092,896 Long term debt will increase from $35,183,502 to $36,334,880 Total investment for Digby will be $2,796,837 Digby will issue stock totaling $1,151,378
Answer:
1. Digby working capital will be unchanged at $21,092,896
2. Digby will issue stock totaling $1,151,378 (50,000*$23.03)
Explanation:
Digby working capital will be unchanged at $21,092,896 this because the fund to be raise is for financing a fixed asset- a plant and equipment.
Working Capital=Current Assets-Current Liabilities
Examples of current assets are Cash & Bank balances, stocks, receivables, etc.
Examples of current liabilities are payables, accrued expenses, etc.
Digby will issue stock totaling $1,151,378 i.e. (50,000*$23.03)
Matthew's Fish Fry has a monthly target operating income of $8,300. Variable expenses are 80% of sales and monthly fixed expenses are $800. What is the monthly margin of safety as a percentage of target sales in dollars?
Answer:
Margin of Safety as percent of sales 91.21%
Explanation:
[tex]Sales \: Revenue - Variable \: Cost = Contribution \: Margin[/tex]
If variable = 80% of sales then
sales - 80% sales = .20 sales = Contribution margin ratio
Next will be calcualte the BEP
[tex]\frac{Fixed\:Cost}{Contribution \:Margin \:Ratio} = Break\: Even\: Point_{dollars}[/tex]
800/0.2 = 4,000
Sales to achieve target income of 8,300
[tex]\frac{Fixed\:Cost + taget \: profit}{Contribution \:Margin \:Ratio} = Sales\: to\: Profit{dollars}[/tex]
(800+8,300)/.2 = 45,500
Margin of safety:
[tex]\frac{current \:sales - BEP_{USD}}{current \:sales} \times 100 = margin \: of \: safety[/tex]
[tex]\frac{45,500 - 4,000}{45,500} \times 100 = 91.21%[/tex]
Jason's gross pay for the week is $ 1,000. His yearly pay is under the limit for OASDI. Assume that the rate for state and federal unemployment compensation taxes is 6% and that Jason's year-to-date pay has not yet exceeded the $ 7,000 cap. His yearly pay is under the limit for OASDI. What is the total amount of payroll taxes that his employer must record as payroll tax expenses? (Do not round your intermediate calculations. Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%.)
Answer:
Total payroll taxes 213
Explanation:
the employeer will have to record the taxes on the wages plus the taxes on his behalf
1,000 x 6.2 = 62
1,000 x 1.45 = 14.5
Total 76.5 for the employee
Then the employer must pay the same amount of taxes.
employer taxes 76.5
Total for OASDI and Medicare: 153
Then FUTA&SUTA 6% of 1000 60
Total payroll taxes 213
company must decide whether to buy Machine A or Machine B. After 5 years Machine A will be replaced with another A. The initial cost for Machine A is $12,500, annual maintenance is $1,000, and the salvage value at 5 years is $10,000. Machine B has an initial cost of $20,000, 0 maintenance costs, and a salvage value of $10,000 at 10 years. Which machine should be purchased? Use a MARR of 10%. on financial calculator
Answer: The present value of the Machine B ($16140) is less than that of Machine A ($16338) , so we should purchase Machine B.
Explanation:
Present value of the cost incurred on Machine A :
Given:
Initial capital cost = $12500
Capital cost at 6th year ($12500 - salvage of previous machine $10000) = $2500
Present value of capital cost at (10%,5) = $1553
Maintenance cost = $1000
Present value of Maintenance cost at (10%,10) = $6145
Less: Salvage at the end of Year 10 = $10000
Present value of Salvage cost at (10%,10) = $3860
Total present value of cost in Machine A = $16338
Similarly,
Present value of the cost incurred on Machine B :
Given:
Initial capital cost = $20000
Maintenance cost = $0
Present value of Maintenance cost at (10%,10) = $0
Less: Salvage at the end of Year 10 = $10000
Present value of Salvage cost at (10%,10) = $3860
Total present value of cost in Machine B = $16140
As the present value of the Machine B ($16140) is less than that of Machine A ($16338) , so we should purchase Machine B.
What is the difference between Special warranty deed vs general warranty deed
General warranty deed and Special warranty deed are warranty deeds used for real estate sales where belongings, either residential or commercial, is transferred between organization unacquainted with each other. Possession of a property is transferred from the seller to the buyer with definite assurance against future problems or claims, which will defend the buyer against fraud.
However, the assurance in a General warranty deed will cover the belongings entire previous account, the Special warranty deed will only covers the time period for which the seller owned it. While the seller in a General warranty deed has to protect the title against all other assertion and compensate the buyer for any tentative debts or amends, the seller in Special warranty deed is only responsible for debts and problems accumulated or caused during his possession of the belongings.
A General Warranty Deed offers full protection covering the property's entire history, while a Special Warranty Deed only covers the period of the seller's ownership, offering limited protection.
Explanation:The key difference between a Special Warranty Deed and a General Warranty Deed lies in the level of protection offered to the buyer. A General Warranty Deed offers the highest level of protection as it covers the property's entire history. The seller guarantees that he or she holds a clear title and has the right to sell the property, and there are no encumbrances or liens against it. A Special Warranty Deed, on the other hand, provides limited protection because it only covers the period during which the seller owned the property. Any issues or disputes arising from before the seller's ownership are not covered.
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Explain the vertical integration options and directions for the following providers: (a) a major academic medical center such as the University of Iowa, (b) a five-person general surgery group, and (c) a manufacturer of durable medical equipment.
Answer:
(a) Backward vertical integration (b) Forward vertical integration (c) Backward vertical integration
Explanation:
(a) An academic medical center is an example of backward vertical integration. The specialist and faculties from the university will provide treatment to the patients. Such medical centers have tertiary service with several intermediaries.
(b) Here, there is no intermediary between patients and general surgery group. The general surgery group treat patients directly. So here there is a forward vertical integration system.
(c) A manufacturer of durable medical equipment will supply to retailers who in turn supply these to hospitals where the patients will receive service from these equipment. So, it is an example of backward vertical integration.
Which of the following is not a necessary condition for price discrimination to hold? The seller must be a price searcher. The seller must be able to distinguish between customers willing to pay different prices. It must cost the seller more to service some customers than others. Reselling the product must be extremely costly or must not be possible
Answer: Option A
Explanation: Price discrimination is a feature of monopoly firms. Monopoly firms are those firms which provides such goods or services in the market for which no close substitutes are available. As there are no other competitors monopoly firms are free from the burden of adjusting its prices according to others.
Thus to make price discrimination in market the firm has to be a price maker and not price searcher.
Now suppose that households in this economy allocate each additional dollar of income in the following way. Households continue to save $0.20 of each additional dollar income; however, they now pay $0.05 in taxes on each additional dollar of income, and they now spend $0.15 of each additional dollar on imported goods. The remaining fraction of each additional dollar goes toward consumption of domestically produced output. In this case, the fraction of an additional dollar of income that is not spent on domestic output is equal to . Taking the impact of taxes and imports into consideration, the multiplier for this economy is .
Answer:
Multiplier= 1.666667
Explanation:
This is an open economy:
So the households can either save the income, or adquire imported goods.
also their income is reduced by taxes, so we must discount the three factors to get the multiplier.
marginal propensity to withdraw (mpw)
saving + tax rate + import
0.2 s + 0.05 t + 0.15 import = .4
Multiplier
1 / (1-mpw) = 1/0.6 = 1.66667
Jim is an appliance salesperson. To make a sale, he asserts that a certain model of a Kitchen Helper refrigerator is the “best one ever made.” This is a. fraud if the statement is the truth. b. fraud if Jim believes that this statement is not true. c. fraud if Jim is stating his opinion, not the facts. d. not fraud.
Answer: the correct answer is c. fraud if Jim is stating his opinion, not the facts.
Explanation: There are laws in place to protect you from being misled about the products and or other representation creates a misleading impression in your mind.
Jim is an appliance salesperson. To make a sale, he asserts that a certain model of a Kitchen Helper refrigerator is the “best one ever made.” This is a (C) fraud if Jim is stating his opinion, not the facts.
Fraud typically involves making false statements or misrepresentations to manipulate someone for personal gain. In this case, Jim is asserting that a certain model of a refrigerator is the "best one ever made." If he is stating this as his opinion without any facts to support it, and he isn't sure about it being true, then it could be considered a fraud. If Jim genuinely believes the statement is true then it may not be fraud even if others may disagree with his opinion. However, if he knowingly makes the claim without any reason or evidence, it could be considered fraudulent behavior.
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An attendant at a car wash is paid according to the number of cars that pass through. Suppose the probabilities are 1/12, 1/12, 1/4, 1/4, 1/6, and 1/6, respectively, that the attendant receives $7, $9, $11, $13, $15, or $17 between 4:00 P.M . and 5:00 P.M . on any sunny Friday. Find the attendant’s expected earn- ings for this particular period.
Answer: The attendant’s expected earn- ings for the period between 4:00 P.M and 5:00 P.M is $12,67.
Explanation: The discrete random variable X represent attendant’s earnings.
The expected value of the discrete random variable X is
= E (x) = ∑× f(x)= 7 × 1/12 + 9 × 1/12 + 11 × 1/4 + 13 × 1/4 + 15 × 1/6 + 17 × 1/6 = 12,67.The expected earnings for the attendant at a car wash between 4:00 P.M. and 5:00 P.M. on a sunny Friday is calculated using probabilities of different earnings outcomes, resulting in $12.67.
The expected value is calculated by multiplying each outcome by its probability and then summing all those products. The earnings and the corresponding probabilities are $7 (1/12), $9 (1/12), $11 (1/4), $13 (1/4), $15 (1/6), and $17 (1/6). Using these values, we can compute the expected earnings as follows:
(1/12) times $7(1/12) times $9(1/4) times $11(1/4) times $13(1/6) times $15(1/6) times $17
Expected Earnings = (1/12) times 7 + (1/12) times 9 + (1/4) times 11 + (1/4)times 13 + (1/6)times 15 + (1/6)times 17
Expected Earnings = 0.5833 + 0.75 + 2.75 + 3.25 + 2.5 + 2.8333
Expected Earnings = $12.6666 (rounded to $12.67)
Therefore, the expected earnings for the attendant between 4:00 P.M. and 5:00 P.M. on a sunny Friday is $12.67.
Joiner Corporation recently purchased 25,000 gallons of direct material at $5.60 per gallon. Usage by the end of the period amounted to 23,000 gallons. If the standard cost is $6.00 per gallon and the company believes in computing variances at the earliest point possible, the direct-material price variance would be calculated as: A) $800F. B) $9,200F. C) $9,200U. D) $10,000F. E)$10,000U.
Answer:
B) 9,200 Favourable
Explanation:
Direct Materials price variance:
Actual Quantity * (Standart Cost - Actual Price ) = Direct Materials price variance
23,000 * (6 - 5.6) = 23,000 * 0.4 = $9,200 Favourable
The Standar cost as any other costing system is done to valuate the finished goods, the gallons used in production are 23,000 so cost and cost varaince are done using this as actual quantity.
The other 2,000 are still on raw materials inventory for the company. They are not part of Work in progress so they are excluded from the calculation.
The company believes in computing variances at the earliest point possible, the direct-material price variance would be calculated as $9,200 favorable. Thus option B is correct
What is direct material?The price of direct materials is directly related to the unit of manufacturing and is immediately identifiable. For instance, the price of windows is really a direct labor expense in the production making lamps. The primary component needed for the production of commodities or commodities was substance.
The formula that will be used is for Direct Materials price variance
Direct Materials price variance = Actual Quantity * (Standart Cost - Actual Price)
= 23,000 * (6 - 5.6)
= 23,000 * 0.4
= $9,200 which is Favourable
Therefore, option B is the correct option.
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Tata Motors assembles cars from their own parts and subassemblies and also controls the mining and fabrication of the materials used to create those parts. When Anand ordered their luxury sedan with the platinum dashboard he knew he wouldn't be taking delivery of his dream car the next week. Rather, he would be waiting a while thanks to: a.a mismatch between supply chain lead time and customer demand. b.a mismatch between overall demand levels and productive capacity. c.a mismatch between demand and the most efficient production volume. d.a mismatch between demand and the most efficient shipment volume.
Answer:
The correct answer would be option A, A mismatch between supply chain lead time and customer demand.
Explanation:
Anand ordered his dream car which is luxury sedan with platinum dashboard. He knows that the delivery of his car will take time to reach him. This is because of the fact that there is a mismatch between supply chain lead time and the customer demand. A lead time is simply the delay or latency between the starting of a process till its execution. The delayed time between the initiation and the execution of a process is called as the lead time. Now Anand has ordered his dream sedan with some customization, which is the demand of the customer. Now the delay in the delivery of the his dream car will be due to the mismatch between his demand and the latency in the initiation and execution/delivery of the car to Anand.
Suppose that you are a member of the Board of Governors of the Federal Reserve System. The economy is experiencing a sharp rise in the inflation rate. What change in the Federal funds rate would you recommend? How would your recommended change get accomplished? What impact would the actions have on the lending ability of the banking system, the real interest rate, investment spending, aggregate demand, and inflation?
As a member of the Federal Reserve Board, in an inflationary situation I would suggest a change in the federal funds rate that would be accomplished by raising the base interest rate of the US economy. This would make bonds more attractive and people would stop consuming to invest in public debt securities. In addition, raising interest rates would discourage credit, causing banks to lend less. Since inflation is a monetary phenomenon caused by the excess of currency in circulation, these measures would have a downward effect on inflation, as they reduce the amount of money in circulation in the economy.
In response to inflation, the Federal Reserve may increase the Federal funds rate which is accomplished through open market operations. This limits the banking system's lending ability, can increase the real interest rate, decrease investment spending and aggregate demand, and eventually control inflation.
Explanation:When the economy is experiencing a sharp rise in inflation, the Federal Reserve (Fed), which you are a hypothetical member of, may recommend an increase in the Federal funds rate. Take for instance Episodes 5 and 6, when the Federal Reserve perceived a risk of inflation, the federal funds rate was raised from 3% to 5.8% from 1993 to 1995.
The change in the Federal funds rate is accomplished through open market operations, specifically by selling government securities, which decreases the amount of money in circulation, thereby raising interest rates. The aim is to slow down economic growth and cool off inflation.
The impact of this action on the banking system would be a reduced ability to lend, as higher interest rates make borrowing costs more expensive for banks. This, in turn, could raise the real interest rate, as the increase in the nominal interest rate (the Federal funds rate) would outstrip the rate of inflation, earning savers a higher real return on their investments. Consequently, higher real interest rates may cause a decrease in investment spending, as the costs of borrowing to fund investment become more expensive. This might result in a decrease in aggregate demand, as lower investment spending and potentially lower consumer spending slow economic growth. Eventually, the aim is to mitigate inflation.
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Super Clinics offers one service that has the following annual cost and utilization estimates: Variable cost per visit $10; Annual direct fixed costs $50,000; Allocation of overhead costs $20,000; Expected utilization 1,000 visits. What price per visit must be set if the clinic wants to make an annual profit of $10,000 on the service?
Answer:
Price to be charged per visit = $90 per visit
Explanation:
We need to calculate the price per visit.
Desired profit = $10,000
Total costs for 1,000 visits = Variable Costs + Fixed Costs + Allocated Costs
Variable cost = $10 X 1,000 visits = $10,000
Fixed costs = $50,000
Allocated Overhead costs = $20,000
Total costs = $10,000 + $50,000 + $20,000 = $80,000
Total amount to be recovered = Total costs + desired profit
= $80,000 + $10,000 = $90,000
Total no of visits = 1,000
Price to be charged per visit = $90,000/1,000 = $90 per visit
Super Clinics must set a price of $90 per visit to reach a desired profit of $10,000, given their costs and estimated number of visits.
To calculate the price per visit that Super Clinics must set to achieve an annual profit of $10,000, we need to consider the total costs and the desired profit. The total costs include both variable costs and fixed costs. Variable costs per visit are given as $10, and with expected utilization of 1,000 visits, the total variable costs would be $10,000. We also have annual direct fixed costs of $50,000 and an allocation of overhead costs of $20,000. Adding these figures together results in total annual costs of $80,000 ($10,000 variable + $50,000 fixed + $20,000 overhead).
To achieve a profit of $10,000, the clinic must earn total revenue that is $10,000 more than the total costs. Therefore, the target total revenue is $90,000 ($80,000 total costs + $10,000 profit). To find the price per visit, we divide the target total revenue by the expected number of visits. This gives us $90,000 / 1,000 visits = $90 per visit.
You are scheduled to receive $17,000 in two years. When you receive it, you will invest it for six more years at 9.75 percent per year. How much will you have in eight years?
Answer: $29,708.18 in eight years.
Explanation:
Amount received in two years = $17,000
Interest rate received per year = 9.75%
Amount received in eight years,
here we are using formula for calculating amount received after eight years are as follows:
A = [tex]P(1+ \frac{r}{100}) ^{n}[/tex]
= [tex]17000(1+ \frac{9.75}{100}) ^{6}[/tex]
= [tex]17000(1+ 0.0975) ^{6}[/tex]
= 17000 (1.7475402)
= 29708.18 ⇒ this much a person can earn in eight years.
Final answer:
Compound interest calculation method explanation for investing $17,000 for eight years at 9.75% annually.
Explanation:
Compound interest is calculated using the formula A = P(1 + r/n)^(nt) where A is the future value of the investment, P is the principal amount, r is the annual interest rate, n is the number of times that interest is compounded per year, and t is the number of years the money is invested for.
In this scenario, with an initial investment of $17,000 compounded annually at 9.75% for six years, the future value after eight years can be calculated using the compound interest formula to determine the total amount accrued.
Substitute the given values into the formula, with P = $17,000, r = 9.75%, n = 1 (compounded annually), and t = 8 years to find out how much the investment will grow to after the specified period.
Hemisphere Corp. is considering a Build-Operator-Transfer (BOT) contract to construct and operate a large dam with a hydroelectric power generation facility in a developing nation in the southern hemisphere. The initial cost of the dam is expected to be $30 million, and it is expected to cost $100,000 per year to operate and maintain. Benefits from flood control, agricultural development, tourism, etc., are expected to be $2.8 million per year. At an interest rate of 8% per year, should the dam be constructed on the basis of its conventional B/C ratio? The dam is assumed to be a permanent asset for the country.
Answer:
The dam should be constructed. The investment discounted payback is 25 years.
Explanation:
We have to make a cash flow for this case with the given data. See the document attached.
We consider an Initial cost of 30 millions in period 0, then we have every periods benefit of 2.800.000 and 100000 direct cost.
With those, is obtained net cash flow for each year (period), if we consider the given rate of interest, can be calculated the discounted cash flow
To know when this project covers all the investment, we have to consider the cumulative discounted cash flow. We have to see in the cash flow chart when the cumulative discounted cash flow break the 0 (became higher than 0).
In this case , that will be at period 25. So we have to wait 25 years to recover the initial cost. Considering that the dam usually has a lifetime higher than that time, the project at this scenario, should be done.
The conventional B/C ratio for the given dam is more than 1 if the company's rate of return is 8% per year. The conventional B/C ratio is 1.12. Hence, the dam should be constructed.
Further explanation:
Conventional Benefit-Cost Ratio: The Benefit-Cost ratio refers to the ratio, which represents the relationship between the benefits arising out of the project and the cost incurred on the project. This ratio is used for making a financial analysis of various projects. It is helpful in the evaluation of both public and private projects. The project can be chosen when its benefits are exceeding its cost. Conventional B/C ratio is computed by dividing the net benefits arriving out of the project with the net cost of the project. The net value of benefits is computed by subtracting the value of losses from the benefits. The net cost includes the initial and operating cost after subtracting the salvage value.
Compute the conventional B/C ratio:
[tex]\text{Conventional B/C ratio}=\dfrac{\text{Present value of benefits}}{\text{Initial cost + Present value of operating and maintenance cost}}\\=\dfrac{\$35,000,000}{\$30,000,000+\$1,250,000}\\=\dfrac{\$35,000,000}{\$31,250,000}\\=1.12[/tex]
Therefore, the conventional B/C ratio for the given dam is more than 1 if the company's rate of return is 8% per year. The conventional B/C ratio is 1.12. Hence, the dam should be constructed.
Working note 1:
Compute the present value of benefits:
[tex]\text{Present value of benefits}=\dfrac{\text{Annual benefits}}{\text{Interest rate}}\\=\dfrac{\$2,800,000}{0.08}\\=\$35,000,000[/tex]
Hence, the present value of the benefits from dam is $35,000,000.
Working note 2:
Compute the present value of operating and maintenance cost:
[tex]\text{Present value of operating and maintenance cost}=\dfrac{\text{Annual operating cost}}{\text{Interest rate}}\\=\dfrac{\$1,000,000}{0.08}\\=\$1,250,000[/tex]
Hence, the present value of the annual operating cost of dam is $1,250,000.
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Answer details
Grade: Senior School
Subject: Financial Accounting
Chapter: Time value of money
Keywords: Hemisphere Corp., Build-operator-transfer (BOT), contract to construct, hydroelectricity power generation station, developing nation, $30 million, expected to cost, benefits from flood control, agricultural development, tourism, dam be constructed, conventional B/C ratio, dam is assumed to be constructed, permanent asset, for the country, southern hemisphere, large dam, time value of money, present value of money, contract to construct, developing nation, cost ratio, expected to be $2.8 million, operate and maintain.