The question relates to Business, encompassing accounting and financial reporting under ASC 840, with a focus on leases, asset depreciation, and financial decision-making.
Explanation:The subject of this question is Business, specifically focused on accounting and financial reporting as per ASC 840. The question involves scenarios that include leasing agreements, purchase of assets, interest expenses, principal payments, and depreciation expenses related to business operations and financial decisions. These scenarios require an understanding of concepts such as present value calculations, depreciation methods, and lease accounting.
An example given within the context of the question is that of Treehouse, which purchased office furniture for $20,000 with a useful life of 10 years and a salvage value of $2,500. To calculate the annual depreciation expense using the straight-line method, we would subtract the salvage value from the cost of the furniture and divide by its useful life, resulting in ($20,000 \'96 $2,500) / 10 = $1,750 per year.
In finance and accounting, accurate recording and reporting are crucial for decision-making. Depreciation affects net income and therefore can impact financial decisions, such as whether Ms. Stein should purchase a tractor, based on projected returns and an interest rate of 7%.
Assume that a $1,000,000 par value, semiannual coupon U.S. Treasury note with two years to maturity has a coupon rate of 6%. The yield to maturity (YTM) of the bond is 9.90%. Using this information and ignoring the other costs involved, calculate the value of the Treasury note:
The current value of the U.S. Treasury note is calculated by discounting its semiannual interest payments and face value by its yield to maturity. The value of treasury note is $30,000 every six months.
Explanation:The value of a $1,000,000 par value, semiannual coupon U.S. Treasury note with two years to maturity and a coupon rate of 6% can be calculated by discounting its future cash flows by its yield to maturity (YTM) of 9.90%. The Treasury note will pay semiannual interest payments based on the coupon rate, which in this case is $1,000,000 * 6% / 2 = $30,000 every six months.
To find the present value (PV) of these payments, we need to discount each payment by the YTM using the formula for PV of an annuity. Additionally, the $1,000,000 face value due at maturity must be discounted back to the present value as well. By doing this, we will find the current market value of the Treasury note.
To clarify the effect of interest rates on the bond's price: When interest rates rise, bonds issued at lower interest rates will sell for less than face value, while bonds issued at higher rates will sell more than face value.
This is because investors demand a higher yield for taking on the risk of a bond with lower relative interest payments. Conversely, when interest rates fall, bonds with higher coupon rates become more attractive because they offer higher interest payments than newly issued bonds.
Hudson Co. reports the contribution margin income statement for 2015. Assume sales and variable costs per unit remain constant.
HUDSON CO.
Contribution Margin Income Statement
For Year Ended December 31, 2015
Sales (9,300 units at $225 each) $ 2,092,500
Variable costs (9,300 units at $180 each) 1,674,000
Contribution margin $ 418,500
Fixed costs 321,300
Pretax income $ 97,200
The marketing manager believes that increasing advertising costs by $78,000 in 2016 will increase the company’s sales volume to 10,700 units. Prepare a forecasted contribution margin income statement for 2016 assuming the company incurs the additional advertising costs.
Forecasted contribution margin income statement for 2016
Sales ?
Variable Cost ?
Contribution Margin ?
Fixed Cost ?
Pretax Income ?
Answer:
Explanation:
The preparation of the forecasted contribution margin income statement for 2016 is presented below:
HUDSON CO.
Contribution Margin Income Statement
For the Year 2016
Sales (10,700 units × $225) $2,407,500
Less: Variable cost (10,700 units × $180) - $1,926,000
Contribution margin $481,500
Less: Fixed cost ($321,300 + $78,000) - $399,300
Pre tax income $82,200
Since the pre tax income is reduced so it is advised not to increase the advertising cost
The Reading Co. has adopted a policy of increasing the annual dividend on its common stock at a constant rate of 3 percent annually. The last dividend it paid (T = 0) was $.90 a share. What will be the company's dividend six years from now?
Answer:
$1.07
Explanation:
In this question ,we use the formula which is shown below:
A = P × (1 + r ÷ 100)^n
where,
P = Present value $0.90
A = Future value
rate =3%
number of years = 6
Now put these values to the above formula
So, the value would be equal to
= $0.90 × (1 + 3%)^6
= $0.90 × 1.03^6
= $0.90 + 1.194052
= $1.07
We considered all the items so that the correct dividend can come
The Mammon Savings and Loan Company claims that the average amount of money on deposit in a savings account in their bank is $7,500. Suppose a random sample of 49 accounts shows the average amount on deposit to be $6,850 with sample standard deviation $1,200. Construct a hypothesis test to determine whether the average amount on deposit per account is different from $7,500. Use a 1% level of significance.
Answer:
We reject H0 to conclude that average money deposit in savings bank account in the bank is different from $7500.
Explanation:
Please see attachment
A yearminusend review of Accounts Receivable and estimated uncollectible percentages revealed the following:
Days Outstanding Accounts Receivable Est. Percent Uncollectible
1 -30days $ 60, 000 3%
31-60 days $ 40,000 5%
61-90 days $ 25, 000 12%
Over 90 days $ 7, 000 50%
Before the yearminusend adjustment, the credit balance in Allowance for Uncollectible Accounts was $ 1, 000. Under the agingminusofminusreceivables method, the UncollectibleminusAccount Expense at yearminusend is _______?
Answer:
The Uncollectible Account Expense at year end is $9,300
Explanation:
At the end of the year:
Estimated Uncollectible = $60,000 x 3% + $40,000 x 5% + $25,000 x 12% + $7,000 x 50% = $10,300
The company uses aging of receivables method. Before adjustment, the credit balance in Allowance for Uncollectible Accounts was $ 1,000. Therefore: Uncollectible Account Expense = $10,300 - $1,000 = $9,300
The entry:
Debit Uncollectible Account Expense $9,300
Credit Allowance for Uncollectible Accounts $9,300
What is fiscal policy?
A. Fiscal policy can be described as changes in interest rates and taxes to achieve macroeconomic policy objectives.
B. Fiscal policy can be described as changes in interest rates to achieve macroeconomic policy objectives.
C. Fiscal policy can be described as changes in government spending and interest rates to achieve macroeconomic policy objectives.
D. Fiscal policy can be described as changes in government spending and taxes to achieve macroeconomic policy objectives.
Who is responsible for fiscal policy?
A. The federal government controls fiscal policy.
B. The federal government and the Federal Reserve jointly control fiscal policy.
C. Fiscal policy is controlled by market forces.
D. The Federal Reserve controls fiscal policy.
Answer:
What is fiscal policy? The correct answer is D) Fiscal policy can be described as changes in government spending and taxes to achieve macroeconomic policy objectives.
Who is responsible for fiscal policy? The correct answer is A) The federal government controls fiscal policy.
Explanation:
What is fiscal policy? In order to achieve macroeconomic goals and influence the economy, fiscal policy adjusts goverments spendings and tax rates.
Who is responsible for fiscal policy? The responsibility for fiscal policy holds the federal government, the legislative branch (Congress) such as the executive branch (president & Secretary of treasure).
Answer:
D
Explanation:
NU YU announced today that it will begin paying annual dividends. The first dividend will be paid next year in the amount of $.35 a share. The following dividends will be $.40, $.55, and $.85 a share annually for the following three years, respectively. After that, dividends are projected to increase by 2.7 percent per year. How much are you willing to pay today to buy one share of this stock if your desired rate of return is 8 percent?]
Answer:
$13.84
Explanation:
Find the present value (PV) of each year's dividend;
PV( of D1) = 0.35 / (1.08) = 0.3241
PV( of D2) = 0.40 / (1.08²) = 0.3429
PV( of D3) = 0.55 / (1.08³) = 0.4366
PV( of D4) = 0.85 /(1.08^4) = 0.6248
Find PV of terminal cashflow;
D5 = D4(1+g) = 0.85(1.027) = 0.8730
PV( of D5 onwards)= [tex]\frac{\frac{0.8730}{0.08- 0.027} }{1.08^{4} }\\ \\ =\frac{16.4717}{1.3605}[/tex]
PV( of D5 onwards) = 12.1071
Sum up the PVs to find the price per share;
= 0.3241 + 0.3429 + 0.4366 + 0.6248 + 12.1071
= 13.836
Therefore, you should pay $13.84
One of the least desirable and routine tasks members of your team must do is taking minutes (notes) at team meetings. Proof that this task is disagreeable can be seen in the repeated arguments among team members before every meeting about who should take the minutes. Which of the following would be the most effective way for the team to address this stuation? Sellect 1- Save Answer ts ■ Ask your manager to decide in order to minimize any personal bias among team members. [] Randomly assign a person to bé the official note taker at the beginig of each meeting
Answer:
This question is incomplete, here is the complete question:
One of the least desirable and routine tasks members of your team must do is taking minutes (notes) at team meetings. Proof that this task is disagreeable can be seen in the repeated arguments among team members before every meeting about who should take the minutes. Which of the following would be the most effective way for the team to address this situation? Select: 1
a) Assign note-taking to whichever person enters last at each meeting.
b) Ask your manager to decide in order to minimize any personal bias among team members.
c) Randomly assign a person to be the official note-taker at the beginning of each meeting.
d) Create a rotating assignment so each team member shares note-taking
The answer is d)
Explanation:
Since bias and routine can be a big culprit for team effectiveness, it is up to the manager to control the level of uniformity and objectivity. Teams are all about equality and there is no reason why a particular team member should engage with a monotonous task more frequently than others.
Therefore, a rotating assignment is the way to get every team member engaged with the troublesome task.
Although team member bias would be avoided in the b) case, manager bias would still be present and unavoidable. The a) case is highly unprofessional and is an over-the-top gamification element in team management.
While c) may be a reasonable answer, random assignment can "favor" one person over the other at certain times, as the random algorithm doesn't always have to abide with the uniform distribution.
Having all of that in mind, d) is the best answer possible.
At the beginning of his current tax year, David invests $12,000 in original issue U.S. Treasury bonds with a $10,000 face value that mature in exactly 10 years. David receives $700 in interest ($350 every six months) from the Treasury bonds during the current year, and the yield to maturity on the bonds is 5 percent. (Round your intermediate calculations to the nearest whole dollar amount.) How much interest income will he report this year if he elects to amortize the bond premium?
Answer:
$599.
Explanation:
Please see attachment .
The interest income will he report this year if he elects to amortize the bond premium $599
Briefing:-If David decides to amortize the $2,000 bond premium, he will do so semiannually using the constant yield approach, which is analogous to the effective interest method used to amortize bond premium under GAAP. In the end, he will declare $599 in bond interest income.
What is a discount or premium on bonds?A premium bond has a coupon rate that is greater than the going rate for the maturity and credit grade of the bond. In contrast, a discount bond has a coupon rate that is lower than the current rate of interest for bonds of that maturity and credit rating.
What do you earn from interest?income from specific bank accounts or from lending money to others is known as interest income. Income from interest that must be taxed is known as taxable interest income. All interest income, unless specifically excluded, is taxed.
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Given the following information, calculate the effective gross income multiplier: sale price: $950,000; potential gross income: $250,000; vacancy and collection losses: 15%; and miscellaneous income: $50,000.
A. 0.36
B. 0.30
C. 2.8
D. 3.6
Answer:
D. 3.6
Explanation:
The effective gross income multiplier (EGIM) is the ratio between the sale price (SP) and the effective growth income (EGI)
[tex]EGIM = \frac{SP}{EGI}[/tex]
Sales Price (SP) = $950,000
Potential gross income (PI) = $250,000
Vacancy and collection losses (VC)= 15% = 0.15 * $250,000 = $37,500
Miscellaneous income (M) = $50,000.
The effective growth income is given by:
[tex]EGI = PI +M - VC = \$250,000 +\$50,000 - \$37,500\\EGI = \$262,500[/tex]
Thus, the effective gross income multiplier is:
[tex]EGIM = \frac{\$950,000}{\$262,500} \\EGIM = 3.6[/tex]
In February 2017 the risk-free rate was 4.97 percent, the market risk premium was 7 percent, and the beta for Twitter stock was 1.40. What is the expected return that was consistent with the systematic risk associated with the returns on Twitter stock?
Answer:
14.77%
Explanation:
In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below
Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)
= 4.97% + 1.40 × 7%
= 4.97% + 9.8%
= 14.77%
The (Market rate of return - Risk-free rate of return) is also called market risk premium and the same is shown in the answer
Based on the concept of the risk-free rate and the available information, the expected return on Twittér stock is $14.77
How to determine the expected returnTo calculate the expected return consistent with the systematic risk associated with the returns on Twittér stock, use the Capital Asset Pricing Model (CAPM).
The CAPM formula is as follows:
Expected Return = Risk-Free Rate + (Beta * Market Risk Premium)
Given the following information:
Risk-Free Rate = 4.97%
Market Risk Premium = 7%
Beta (β) for Twittér stock = 1.40
calculate the expected return:
Expected Return = 4.97% + (1.40 * 7%)
Expected Return = 4.97% + 9.8%
Expected Return = 14.77%
Therefore, in this case, it is concluded that the expected return that is consistent with the systematic risk associated with the returns on Twittér stock is 14.77%.
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Suppose you invested $100 in the Ishares High Yield Fund (HYG) a month ago. It paid a
dividend of $2 today and then you sold it for $95. What was your dividend yield and capital
gains yield on the investment?
A) 2%, -5%
B) 2%, 5%
C) -2%, 5%
D) 5%, 2%
Answer:
A) 2%, -5%
Explanation:
The computations are shown below:
Dividend yield = (Annual yield) ÷ (market price) × 100
where,
Market price = $95 per share
Annual dividend = $2 per share
So, the dividend yield = ($2 per share ÷ $95 per share) × 100
= 2%
Capital gain yield = (Market price - purchase price) ÷ (purchase price) × 100
= ($95 - $100) ÷ ($100) × 100
= -5%
We assume the purchase price is 100
Two insulation thickness alternatives have been proposed for a process steam line subject to severe weather conditions. One alternative must be selected. Estimated savings in heat loss and installation cost are given below. Which thickness would you recommend for a MARRequals12% per year and negligible market (salvage) values? The study period is 4 years. Use the imputed market value technique to estimate the market value of the 5 cm alternative after four years.
Answer:
= - $3068 per year
Explanation:
The AW of 5 cm insulation is
AW 5 cm (15%) = -40000(A/P, 15%, 6) +7500
=-40000(0.2642) +7500
= - $3068 per year
For a MARR of 12% per year and negligible market values, the recommended insulation thickness for the process steam line that is subject to severe weather conditions would be based on the insulation that leads to the highest net savings over the four-year period considering the cost of installation and the reduction in heat loss. However, without the specific heat loss and installation cost data provided for the alternatives, a definitive recommendation cannot be given. The imputed market value technique cannot be applied without these values.
To make an informed recommendation between two insulation thickness alternatives for a steam process line, an evaluation using the net present value (NPV) or equivalent annual cost (EAC) methods would typically be conducted. These methods consider both the upfront installation costs and the ongoing savings from reduced heat loss due to the insulation. The imputed market value technique might estimate the remaining value of the insulation after the study period, but without the initial cost and savings data, such calculations cannot be completed. Energy cost, installation cost, and heat conduction rate variations based on insulation thickness are key inputs for this decision-making process.
Miller owns a personal residence with a fair market value of $202,700 and an outstanding first mortgage of $162,160, which was used entirely to acquire the residence. This year, Miller gets a home equity loan of $10,135 to purchase new jet skis. How much of this mortgage debt is treated as qualified residence indebtedness?
Qualified Residence Indebtedness includes only those loans used for buying, building, or improving a home, and not those used for other purchases. In this case, only the original mortgage amount of $162,160 qualifies, while the home equity loan of $10,135 does not.
Explanation:The IRS defines Qualified Residence Indebtedness as a mortgage that you took out to buy, build, or substantially improve your primary or secondary home, and it must also be secured by that home. In Miller's case, the mortgage outstanding of $162,160 qualifies as this was used to acquire the residence. Although the home equity loan of $10,135 was secured by the same home, because it was used for purchasing jet skis and not for home improvement, it is not counted as Qualified Residence Indebtedness. Therefore, only the $162,160 from the first mortgage is treated as Qualified Residence Indebtedness.
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Hemmer Company reported net income for 2018 in the amount of $45,000. The company's financial statements also included the following: Decrease in accounts receivable $ 6,400 Increase in inventory 1,100 Depreciation expense 3,200 What is net cash provided by operating activities?.
Answer:
$53,500
Explanation:
The preparation of the Cash Flows from Operating Activities—Indirect Method is shown below:
Cash flow from Operating activities - Indirect method
Net income $45,000
Adjustment made:
Add : Depreciation expense $3,200
Add: Decrease in accounts receivable $6,400
Less: Increase in inventory -$1,100
Total of Adjustments $8,500
Net Cash flow from Operating activities $53,500
Within the marketing concept, a service orientation is an integrated organizational effort that revolves around.
Multiple Choice
O finding out what consumers want and providing it for them.
O making goods and services that will earn the most profit.
O training employees to sell services in unique ways.
O making sure customers are satisfied.
In marketing, service orientation is about focusing entirely on delivering customer satisfaction, which directly aligns with finding out what consumers want and providing it for them.
Explanation:In the context of marketing, service orientation means focusing on creating customer satisfaction. This notion aligns with the first option from the multiple choice question: finding out what consumers want and providing it for them. This lens of operation seeks to enhance the customer experience by discerning their needs and fulfilling them to retain loyalty. Profit, unique sales techniques, or how goods/services are made do not take priority in service orientation, but are, instead, products of successfully creating a satisfied and loyal customer base.
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A service orientation is an integrated effort within a marketing concept that revolves around ensuring customer satisfaction, meeting and exceeding customers' needs and expectations.
Explanation:In the context of the marketing concept, a service orientation is an intrinsic effort by an organization to focus primarily on customer satisfaction. This implies that the correct option is 'making sure customers are satisfied'. A service orientation strives to understand and meet customer needs, placing them at the core of all business decisions. It is not strictly about devising ingenuous ways to sell services or merely creating profitable products but rather delivering services that meet and exceed customer expectations to foster satisfaction and loyalty.
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Dirty Don's Bicycle Shop is current financed with 100% equity. The firm currently has 100,000 shares of common stock outstanding, selling for $50 per share. Don is considering a capital restructuring project, where the firm would be financed with 45% debt and 55% equity. How many bonds would Don have to sell at par value? (Remember that par value of a bond is $1,000).
Answer:
Number of bonds to raise = 2250
Explanation:
given data
current financed = 100% equity
common stock outstanding = 100,000 shares
selling = $50 per share
debt = 45%
equity =55%
par value of a bond = $1,000
to find out
How many bonds would Don have to sell at par value
solution
we get here first the value of equity that is express as
value of equity = Number of shares × Price per share .................1
put here value
value of equity = 100,000 × $50
value of equity = $5,000,000
and
financed with bonds = 45 % of value of equity
financed with bonds = 45 % × $5,000,000
financed with bonds = $2,250,000
so
Number of bonds to raise is express as
Number of bonds to raise = [tex]\frac{2,250,000}{1000}[/tex]
Number of bonds to raise = 2250
If the minimum wage is set above the market equilibrium wage, a. All of the above are correct. b. highly-skilled workers will have a harder time finding jobs. c. unemployment will rise. d. the quantity of labor supplied will be below the quantity of labor demanded.
Answer: The correct answer is "c. unemployment will rise.".
Explanation: If the minimum wage is set above the market equilibrium wage, unemployment will rise.
When the minimum wage is set above the market equilibrium salary, the amount of work offered is greater than the amount demanded. The result is unemployment.
Answer:
(C). Unemployment will rise
Explanation:
Minimum wage is the lowest amount that can be paid to an employee for performing a job and paying below this amount is illegal.
Market equilibrium wage is the amount companies are willing to pay workers taking on new jobs, when the market is in equilibrium (when demand equals supply).
Setting the minimum wage above the market equilibrium wage will mean that more people will be available to take jobs, while companies will reduce the amount of people they hire if they are to keep their wage costs constant.
As such, "unemployment will increase", and demand for labor reduces and goes below the quantity of labor supplied.
Ivanhoe company purchased machinery with a list price of $88000. They were given a 7% discount by the manufacturer. They paid $400 for shipping and sales tax of $4700. Ivanhoe estimates that the machinery will have a useful life of 10 years and a residual value of $25000. If Ivanhoe uses straight-line depreciation, annual depreciation will be
A) $6194
B) $5684
C) $8694
D) $6152
Answer:
A) $6194
Explanation:
Price before discount = $88,000
discount rate = 7%
Amount of discount = 7% *$88,000 = $6,160
Price after discount = Price before discount - Amount of discount
= $88,000 - $6,160
Price after discount = $81,840 (this is the price included in depreciation)
Items included in total cost of machinery;
Price of machinery after discount = $81,840
Shipping cost = $400
Sales tax = $4,700
Therefore, total cost is therefore = $81,840 + $400 + $4,700 = $86,940
Depreciation per year = (Total cost of the machinery - salvage value) / useful life
= (86,940 - 25,000)/ 10
= 61,940/10
= 6,194
Therefore annual depreciation = $6,194
Which one of the following is a general characteristic of a securities broker?
A.Trades from his or her own inventory
B. Trades only foreign securities
C. Trades listed securities in an auction market
D. Trades electronically from any geographic location
E. Is the principal trader of debt securities
Answer:C. Trade listed security in an auction market
Explanation:
A broker is an agent in the securites market that deals in the purchase and sales of securities for a return referred to as brokerage.
The securites market is an auction market for securities.
He may or may not trade from his own inventory, his trading his not restricted to foreign securities,he may trade physically or electronically and he his a principal trader of not only debt securities but including equity securities.
XYZ Company is in the process of issuing bonds. The bonds have a stated interest rate of 4%, which is 2% below the current market rate. What effect will the two interest rates have on the bond issue price?
A. The issue price will be above the bond's face value.
B. The issue price will equal the bond's face value.
C. The issue price will be below the bond's face value.
Answer:
C. The issue price will be below the bond's face value
Explanation:
Issuing new bonds with a stated interest rate of 2% below the market rate means that the issuing company will pay investors(bondholders) a coupon amount that is less than what the market is currently offering. Due to this reason, investors will not be willing to pay a higher price to receive lower coupon payments for the life of the bond. Therefore, the issuing price will be below the bond's face value.
A condominium developer buys three times as much land as is needed to build a planned 50-unit development so that, if things go well, two additional 50-unit developments can be built without having to acquire additional land. The developer is prepared to exercise the option to:A) quit.B) expand.C) abandon.D) wait.E) rebuild.
Answer:E
Explanation:
A company purchased $10,100 of merchandise on June 15 with terms of 2/10, n/45, and FOB shipping point. The freight charge, $550, was added to the invoice amount. On June 20, it returned $880 of that merchandise. On June 24, it paid the balance owed for the merchandise taking any discount it is entitled to. The cash paid on June 24 equals:
Answer:
$9,586
Explanation:
The computation of the cash paid is shown below:
= Merchandise amount - returned goods - discount + freight charges
= $10,100 - $880 - $184.40 + $550
= $9,586
The discount = (Merchandise amount - returned goods) × discount rate
= ($10,100 - $880) × 2%
= $184.40
Simply we deduct the returned goods and discount and added the freight charges to the merchandise amount so that the correct amount can come.
Fill in the blanks. It is ____ for individual firms in competitive markets to invest in advertising because they sell ______. Advertising in this market increases _____ without directly influencing sales. However, ______ will still advertise to increase demand for the common product.
In competitive markets, firms are less likely to invest in advertising due to the homogeneity of products, but they may still do so in monopolistic competition to differentiate their offerings. Successful advertising can make the perceived demand curve for a firm's product more inelastic or shift it to the right.
Explanation:It is less common for individual firms in competitive markets to invest in advertising because they sell homogeneous products. Advertising in this market increases market awareness without directly influencing sales. However, firms will still advertise to increase demand for the common product.
Advertising in competitive markets is a way for firms to differentiate themselves from their competitors. In a monopolistic competition, advertising can make a firm's perceived demand curve become more inelastic (steeper) or increase overall demand for the firm's product (shifting the demand curve to the right). A successful advertising strategy may lead to increased profits by allowing the firm to charge higher prices or sell larger quantities.
McDonald’s, Burger King, and Wendy’s all produce hamburgers, among other things. However, if you prefer burgers from McDonald’s, you might consider other burgers an imperfect substitute. With this in mind, which of the following statements would be correct about McDonald’s prices in the short run?
a. McDonald’s will maximize profits by producing where marginal revenue equals marginal cost.
b. McDonald’s will charge a price higher than marginal revenue and marginal cost.
c. McDonald’s will charge a price equal to marginal cost.
d. McDonald’s will set its prices like a perfect competitor.
e. McDonald’s consumers will pay a higher price as long as it is worth the value they place on their preference for McDonald’s burgers.
f. McDonald’s will set its prices like a monopolist.
Answer:
Correct statements about McDonald's price in given scenario are given below.
Explanation:
1. McDonald's will maximize profits by producing where marginal revenue equals marginal cost.
2. McDonald's will charge a price higher than marginal revenue and marginal cost.
3. McDonald's consumer will pay a higher price as long as it is worth value they place on their preference for McDonald's burgers.
4. McDonald's will set it's price like a monopolist.
McDonald's compete in market with two other competitor. Consumer prefer McDonald's burgers and consider other two firms burgers as a imperfect substitute.
In this scenario McDonald's will act like a monopoly in burger market.
Answer:
Correct statements about McDonald's price in given scenario are given below.
Explanation:
1. McDonald's will maximize profits by producing where marginal revenue equals marginal cost.
2. McDonald's will charge a price higher than marginal revenue and marginal cost.
3. McDonald's consumer will pay a higher price as long as it is worth value they place on their preference for McDonald's burgers.
4. McDonald's will set it's price like a monopolist.
McDonald's compete in market with two other competitor. Consumer prefer McDonald's burgers and consider other two firms burgers as a imperfect substitute.
In this scenario McDonald's will act like a monopoly in burger market.
Today, Jennifer earns $55000 at her first job. Her mom used to make $15,000 at her first job in 1975. Jennifer is of the opinion that she makes more than her mom would have made if she started working today. Her mom thinks Jennifer would have earned less than she if Jennifer had started working in 1975. If the CPI today is 237 and the CPI in 1975 was 82, then
Answer:
Jennifer makes more.
Explanation:
($15,000/82) x 237= $43,354
($55,000/237) x 82 = $19,030
Jennifer makes more.
Compute the total manufacturing cost for a manufacturer with the following information for the month.
Raw materials purchased $ 32,400
Direct materials used 53,750
Direct labor used 12,000
Factory supervisor salary 8,000
Salesperson commissions 6,200
Depreciation expense—Factory building 3,500
Depreciation expense—Delivery equipment 2,200
Indirect materials 1,250
Final answer:
The total manufacturing cost is the sum of direct materials used, direct labor, and manufacturing overhead expenses. In this case, it would be $53,750 for direct materials, $12,000 for direct labor, and $12,750 for manufacturing overhead (supervisor salary, factory building depreciation, and indirect materials), amounting to $78,500 in total.
Explanation:
The total manufacturing cost for a manufacturer includes all costs directly associated with the production process. To calculate this, we sum the direct materials used, direct labor, and manufacturing overhead expenses. The direct materials are the raw materials that are transformed into the finished product, and direct labor is the cost of the workforce that is directly involved in the manufacturing process. Manufacturing overhead consists of indirect costs related to production, such as the factory supervisor's salary and the depreciation on the factory building.
To compute the total manufacturing cost, we add:
Direct materials used: $53,750
Direct labor used: $12,000
Factory supervisor salary (part of manufacturing overhead): $8,000
Depreciation expense—Factory building (part of manufacturing overhead): $3,500
Indirect materials (part of manufacturing overhead): $1,250
However, salesperson commissions and depreciation on delivery equipment are not part of manufacturing costs, as they are generally considered selling and administrative expenses. Therefore, they are not included in the total manufacturing cost calculation.
Adding the values provided:
$53,750 (Direct materials used) + $12,000 (Direct labor used) + $8,000 (Factory supervisor's salary) + $3,500 (Depreciation on factory building) + $1,250 (Indirect materials) = $78,500 total manufacturing cost.
On September 1, Horn Co. accepted a 60-day, 5% note in the amount of $3,000 from a customer. On the due date of the note, the customer dishonors the note and fails to pay. The journal entry that Horn would make on the due date would include debit to:
Answer:
Notes Receivables $3,025.
Explanation:
As the company issued a note on credit, an notes Receivables account created. Therefore, it is the duty to pay the due during the maturity date. If he fails to pay, the notes receivables account will become debit again.
Therefore, notes receivable is debit.
Calculation:
Interest on Notes receivables on due date -
$3,000 x 5% x (60/360) = $150 x (1/6) = $25
Total amounts to be paid -
$3,000 + 25 = $3,025.
Answer:
Accounts Receivable for $3,025
Explanation:
Carbondale Oil announces that a well that it has sunk in a new oil province has shown the
existence of substantial oil reserves. The exploitation of these reserves is expected to increase
Carbondaleʹs free cash flow by $100 million per year for eight years. If investors had not been
expecting this news, what is the most likely effect on Carbondaleʹs stock price upon the
announcement, given that Carbondale has 80 million shares outstanding, no debt, and an equity
cost of capital of 11%?
A) no effect
B) rise by $5.15
C) rise by $6.43
D) rise by $7.72
Answer:
C) rise by $6.43
Explanation:
This due to the fact that investors had not expected the news and it is favorable to them.
The short-term scheduling activity called "loading": Select one:
a. assigns workers to jobs.
b. assigns jobs to work centers
c. assigns workers to machines.
d. assigns dates to specific jobs or operations steps.
e. specifies the order in which jobs should be done at each center.
Answer:
b. assigns jobs to work centers
Explanation:
Initially an aggregate plan is prepared and then there is a master plan, accordingly with that master plan divided into smaller sections some short term schedules are prepared.
Under the short term scheduling the term loading is done which refers to assignment of jobs to work centers.
This provides for the segregation of duties and work in between different work centers as in which work center will perform which job.
The company jointly performs all activities in order to meet the aggregate plan, by performing duties of each work center properly the goal can be achieved.