Answer:
Answer b
Explanation:
One of the main principles of employer's liabilities for any damages to third party by employee is often referred to as Respondent Superior rule. Under this rule employer is liable for any damages employee did while performing his/her job according to the instructions given by the employer. Since Russ was involved in an accident while still not at work or not performing his duties, bank shouldn't be liable for injuries to third parties.
Final answer:
Based on the 'going and coming rule', the bank is likely not liable for accidents occurring during an employee's commute, hence the bank would not be liable for third-party injuries in Russ Belmont's freeway accident.
Explanation:
In the scenario provided, the answer to whether the bank would be liable for any injuries to third parties if Russ Belmont is in an accident on his way to work depends on multiple factors. Generally, an employer might not be held liable for accidents that occur during an employee's commute to and from work.
This is based on the going and coming rule which typically exempts employer liability for torts committed by employees while on their way to or from the workplace, as this is considered outside of their employment duties. However, there can be exceptions to this rule, such as when the employee is running an errand for the employer or if the travel is a significant part of the employee's service to the employer. Without additional information indicating such exceptions, the most likely legal interpretation is that in this case, the bank would not be liable for any injuries to third parties (Option B).
Parkway Void Co. issued 17-year bonds two years ago at a coupon rate of 10.1 percent. The bonds make semiannual payments. If these bonds currently sell for 97 percent of par value, what is the YTM?
The Yield to Maturity (YTM) of a bond is calculated using its current market price, face value, payment frequency, years until maturity, and coupon rate. Given the data on the Parkway Void Co.'s bonds, we can use these variables to determine the YTM using a financial calculator or online tool.
Explanation:This question is asking for the yield to maturity (YTM) of bonds issued by Parkway Void Co. The YTM is the total expected return if the bond is held until maturity. The factors involved in determining YTM include: the bond's current market price, its face value, the payment frequency, the number of years until maturity, and the coupon rate. To answer accurately, we also need to know the par value.
Now, given that the bonds were issued two years ago and have a life of 17 years means they have 15 years left till maturity. The bonds were sold at 97 percent of the par value, meaning the price is 0.97 times the par value. Each bond pays semi-annually, which we calculate using the coupon rate of 10.1 percent of the par value. We use these data in the YTM formula which uses an iterative process of guessing and checking until we find a yield that makes the present value of the bond's cash flows equal to its price.
Keep in mind that YTM is expressed as an annual rate, despite coupon payments being made semi-annually, so the effective yield is slightly higher than the quoted YTM. Calculating YTM can be complicated, and you might find it easier to use a financial calculator or an online YTM calculator
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Under what circumstances might a long-term strategic alliance with a key supplier enable a company to capture most of the benefits associated with vertical integration, without bearing the associated risks and costs?
Answer:
It would be better to enter a new business area by acquisition when a company is considering implementing horizontal integration or when they are pursuing vertical integration and the company is lacking the distinctive competencies to establish a quick presence and reputation. Acquisition allows a company to purchase quicker than it takes to establish its own company that is similar. Also, acquisitions are less risky because there is less commercial uncertainty and the company is able re-search the turn get are interested and get have unpublished reputation, lastly, they are attractive because there are high barriers to entry
Explanation:
Suppose an unexpected freeze in Florida destroys 20% of the Florida orange crop. Using supply and demand theory answer each of the following. Be sure to explicitly state your assumptions in your response.a. What are the likely effects of the crop damage on Florida orange prices and output levels?b. How will the freeze affect the equilibrium price of California oranges?
Suppose an unexpected freeze in Florida destroys 20% of the Florida orange crop.-This results in the shift of the supply curve to the left resulting in an increase in the prices.
Explanation:
Suppose an unexpected freeze in Florida destroys 20% of the Florida orange crop.
a) What are the likely effects of the crop damage on Florida orange prices and output levels?
As a consequence of the unexpected freeze in Florida , the orange crops will get damaged. This will result in a decline in the supply of oranges in the market. Which will lead to a shift in the supply curve of orange to the left, resulting in an increase in the price of oranges, and a decline in its output level or the quantity sold/supplied in the market
b) How will the freeze affect the equilibrium price of California oranges
Due to the unexpected freeze the supply curve of the California oranges will shift to the left,which will result in an increase in the price of the California oranges(In this case the quantity demanded is more than the quantity supplied/sold)
A sudden 20% decrease in the supply of Florida oranges due to freeze damage will drive up prices and lower output levels. Additionally, increased demand could also raise the prices of California oranges.
Explanation:The supply and demand theory is crucial in this scenario. The freeze damage can be viewed as a sudden decrease in the supply of Florida oranges. Given the demand for oranges remains the same, a reduction in supply will lead to higher prices for Florida oranges, assuming the price elasticity of demand for the product is less than one (inelastic demand). Also, the output level, in terms of quantity of oranges, will certainly drop due to the 20% loss in crop.
Regarding California oranges, assuming they are substitutable goods for Florida oranges, the decreased supply and heightened price of Florida oranges could shift demand to California oranges. This added demand could push up the equilibrium price for California oranges.
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A company is preparing its cash budget for the coming month. All sales are on account. Given the following: Beginning Balances Budget Amounts Cash $ 50,000 Accounts Receivable 180,000 Sales $ 800,000 Cash disbursements 780,000 Depreciation 25,000 Ending accounts receivable balance 210,000 What is the expected cash balance of the company at the end of the coming month
Answer:
$40,000
Explanation:
The calculation of cash balance is shown below:-
For computing the ending cash balance first we will compute the total cash inflow which is here below:-
Total cash inflow = Opening cash receivable + Sales - Ending cash receivable
= $180,000 + $800,000 - $210,000
= $980,000 - $210,000
= $770,000
Ending cash balance = Opening cash balance + Total cash inflow - Cash disbursement
= $50,000 + $770,000 - $780,000
= $40,000
The Wayne City Council approved and adopted its budget for 2016. The budget contained the following amounts: Estimated revenues $700,000 Appropriations 660,000 Authorized operating transfer to the Library debt service fund 30,000 When recording the adopted budget in the general fund, budgetary fund balance should be:
Answer: The budgetary fund balance is $10,000
Explanation: When calculating budgetary fund balance, the best method is given as:
The available fund balance (from previous audit) + current year revenues = Total available funds - expenditures = current year ending fund balance
What we can see from the above expression is that we add the fund from the previous year balance to the current year revenues. This will give us amount of total funds available. Now we will minus the current year expenditures from the total funds available to give us the budgetary fund balance of the current year.
From the question above, we have the following:
Estimated revenues = $700,000
Appropriations (expenditures) = $660,000
Debt service = $30,000
Total expenditures = $660,000 + $30,000 = $690,000
Therefore budgetary fund balance will be:
Estimated revenues - total expenditures
= $700,000 - $690,000
= $10,000
Therefore, the budgetary fund balance is $10,000.
On January 22, Zentric Corporation issued for cash 160,000 shares of no-par common stock at $8. On February 14, Zentric issued at par value 45,000 shares of preferred 2% stock, $50 par for cash. On August 30, Zentric issued for cash 10,000 shares of preferred 2% stock, $50 par at $56. Journalize the entries to record the January 22, February 14, and August 30 transactions. If an amount box does not require an entry, leave it blank.
Answer:
Jan 22
Dr Cash 1,280,000
Cr Common stock 1,280,000
Feb 15
Dr Cash 2,250,000
Cr Preferred stock 2,250,000
Aug 30
Dr Cash 560,000
Cr Preferred stock 500,000
Cr Paid in capital in excess of par value-Preferred stock 60,000
Explanation:
Journal entry
Jan 22
Dr Cash 1,280,000
(160,000 shares of no-par common stock × $8.)
Cr Common stock 1,280,000
Feb 15
Dr Cash 2,250,000
(45,000 shares ×$50 par for cash)
Cr Preferred stock 2,250,000
Aug 30
Dr Cash (10000*56) 560000
Cr Preferred stock (10000*50) 500000
Cr Paid in capital in excess of par value-Preferred stock 60000
A company began the year with Property and Equipment costing $680,000 and accumulated depreciation of $120,000. The only change affecting the long-lived assets account during the year is the $55,000 of depreciation expense that must be recorded for the year. What is the amount of Property and Equipment, net, to be reported on the balance sheet at the end of the year
Answer:
$505,000
Explanation:
Data provided as per the question
Cost = $680,000
Accumulated depreciation =$120,000
Depreciation = $55,000
The computation of amount to be reported at end of year is given below:-
Amounted to be reported at end of year = (Cost - Accumulated depreciation)-Depreciation
= ($680,000 - $120,000) - $55,000
= $560,000 - $55,000
= $505,000
Cambridge Company has three divisions that all report to the vice president of manufacturing. Each division has two departments. On Cambridge's organization chart, there will be three lines leading to the vice president of manufacturing, one for each division.
a. True
b. False
Answer: a. True
Explanation: Three lines would lead to the vice president of manufacturing of Cambridge Company with each line representing each division that reports to the vice president. An organization chart is a graphic display of reporting relationships in an organization, sometimes displaying position titles and position holders connected by lines.
Answer:
True.
Explanation:
An organization chart shows the reporting in order or hierarchy. This is true because the vice president will only be reported by the three division representatives and below those representatives we can find further two lines of departments which will report to the divisional heads.
Thank You.
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A company's production department was experiencing a high defect rate on the assembly line, which was slowing down production and causing a higher waste of valuable direct materials. The production manager decided to recruit some highly skilled production workers from another company to bring down the defect rate. This would produce a(n) ________. A. unfavorable direct materials cost variance B. favorable direct labor cost variance C. unfavorable direct materials efficiency variance D. favorable direct labor efficiency variance
Option D
This would produce a(n) Favorable direct labor efficiency variance
Explanation:The direct labor efficiency variance relates to the variance that occurs due to the variation within the standard and actual time utilized to compose finished products.
If operators produce a specified amount of units in a measure of time that is shorter than the measure of time provided by standards for that quantity of units, the variance is identified as favorable direct labor efficiency variance. There is favorable direct labor efficiency variance when the exact hours applied is less than the expected or usual hours.
On January 1, 2016, Pride Corporation purchased 90 percent of the outstanding voting shares of Star, Inc., for $540,000 cash. The acquisition-date fair value of the noncontrolling interest was $60,000. At January 1, 2016, Star’s net assets had a total carrying amount of $420,000. Equipment (eight-year remaining life) was undervalued on Star’s financial records by $80,000. Any remaining excess fair value over book value was attributed to a customer list developed by Star (four-year remaining life), but not recorded on its books. Star recorded net income of $70,000 in 2016 and $80,000 in 2017. Each year since the acquisition, Star has declared a $20,000 dividend. At January 1, 2018, Pride’s retained earnings show a $250,000 balance. Selected account balances for the two companies from their separate operations were as follows: Pride Star 2018 Revenues $498,000 $285,000 2018 Expenses 350,000 195,000 LO 4-4 What is consolidated net income for 2018? $194,000 $197,500 $203,000 $238,000
The consolidated net income for the year 2018 of pride corporation is $203000
Explanation:
Consideration transferred by Pride $540,000
Non controlling interest fair value 60,000 =
Star acquisition-date fair value $600,000 -Star book value 420,000
= Excess fair over book value $180,000
Amort.
To equipment (8 year remaining life) $ 80,000/8= $10,000
To customer list (4 year remaining life) 100,000/4 =$25,000
= $35,000
Combined revenues=$498000+$285000= $783,000
Combined expenses =$350000+$195000=$545,000
Excess fair value amortization =$35,000 -$545000=$ 580,000
Consolidated net income =Combined revenues-Excess fair value amortization
Consolidated net income=$783,000 -$ 580,000 =$203,000
Hence the consolidate net income for the year 2018 is $203000
To calculate consolidated net income for 2018 between Pride Corporation and Star Inc., consider Pride Corporation's net income and 90% of Star Inc.'s net income due to Pride's ownership. The consolidated net income is $229,000.
Explanation:To start with, we calculate consolidated net income for 2018. Pride Corporation's net income for 2018 is calculated by subtracting its expenses from its revenues: $498,000 - $350,000 = $148,000.
Star Inc.'s net income is calculated in a similar way: $285,000 - $195,000 = $90,000. For the consolidation, we only need to include 90% of Star's net income (based on Pride's ownership): $90,000 * 0.90 = $81,000.
Thus, the consolidated net income for 2018 is: $148,000 (Pride's net income) + $81,000 (90% of Star's net income) = $229,000
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Diaz Company owns a milling machine that cost $126,000 and has accumulated depreciation of $92,200. Prepare the entry to record the disposal of the milling machine on January 3 in each of the following independent situations. The machine needed extensive repairs, and it was not worth repairing. Diaz disposed of the machine, receiving nothing in return. Diaz sold the machine for $17,000 cash. Diaz sold the machine for $33,800 cash. Diaz sold the machine for $40,300 cash.
Answer:
Journal Entry
Explanation:
1 Accumulated Depreciation Dr, $92,200
Loss on Disposal Dr, $34,400
To Machine Equipment $126,600
(Being disposal is recorded)
2. Cash Dr, $17,000
Accumulated Depreciation Dr, $92,200
Loss on sale/disposal Dr, $17,400
To Machine Equipment $126,600
(Being sale is recorded)
3. Cash Dr, $34,400
Accumulated Depreciation Dr, $92,200
Machine Equipment $126,600
(Being sale is recorded)
4. Cash Dr, $40,300
Accumulated Depreciation Dr, $92,200
To Gain on sale/disposal $5,900
To Machine Equipment $126,600
(Being sale is recorded)
Rhone-Rohrer Chemicals, a French leader in specialty chemicals used an ethnocentric policy to approach international markets. It followed the same domestic marketing and management practices in foreign markets. Rhone-Rohrer Chemicals' international expansion failed miserably because Rhone-Rohrer Chemicals suffered from:
Answer:
Cultural Myopia
Explanation:
Myopia in general refers to short sightedness.
A Cultural myopia refers to the belief that one's own culture is better suited and apt in all situations and circumstances and applies to all people.
In business context, this conveys the inability of a firm to adopt or modify it's product strategies as per the market conditions of a foreign nation, thereby providing standardized or same products and services as it provides in it's own domestic market.
For instance, Heinz provides different variants of it's ketchups across the globe, incorporating changes and modifications in ingredients as would better suit a market and better cater to it's needs. The company for instance provides ketchup without onion and garlic as ingredients to suit Indian market requirements.
In the given case, the chemical company applied the same French ethnocentric policies in international markets and followed the same domestic marketing policies internationally. Thus, it's expansion move failed miserably since it failed to adapt to the requirements of global markets and could not cater to them effectively.
Final answer:
Rhone-Rohrer Chemicals failed in international markets due to an ethnocentric policy, which resulted in a lack of local responsiveness and the use of ineffective strategies.
Explanation:
Rhone-Rohrer Chemicals, a French leader in specialty chemicals, decided to use an ethnocentric policy for their international expansion. This means that they applied the same domestic marketing and management practices in foreign markets without considering local cultural differences, consumer preferences, or business practices. Rhone-Rohrer Chemicals' international expansion failed because they suffered from a lack of local responsiveness. An ethnocentric approach often results in ineffective marketing strategies and poor management decisions in the international context.
O'Connor Company ordered a machine on January 1 at a purchase price of $120,000. On the date of delivery January 2, the company paid $30,000 on the machine and signed a long term note payable for the balance On January 3, it paid $1,200 for freight on the machine On January 5, O'Connor paid cash fo installation costs relating to the machine amounting to S7,200. On December 31 (the end of the accounting period), O'Connor recorded depreciation on the machine using the straight-line method with an estimated useful life of 10 years and an estimated residual value of $12,800 Required 1. Indicate the ellects (accounts, amounts, and for increase or decrease) of each transaction (on January 1, 2, 3, and 5) on the accounting equation.
Answer:
Explanation:
Date Assets = Liabilities + Stockholders' equity
Jan 1
Jan 2 Cash $ -30,000 Long term note payable 90,000
Machine $ 120,000
Jan 3 Machine $ 1,200
Cash -1,200
Jan 5 Machine $ 7,200
Cash -7,200
Dec. 31 Accumulated $11560
depreciation
O'Connor Company's machine purchase and subsequent costs impact the accounting equation by changing asset, liability and expense accounts. The purchase, freight, and installation costs reduce cash while increasing machinery, a long term asset. The long-term note payable increases liabilities, and annual depreciation is recorded which decreases the value of the machinery asset and is recognized as an expense.
Explanation:The events described in the question above affect O'Connor Company's accounting equation in the following ways:
On January 1, the order for a machine does not impact the accounting equation because no transaction has occurred yet.On January 2, the payment of $30,000 reduces Cash (an asset) and increases Machinery (a long term asset). The long-term note payable will increase Liabilities by the balance of $90,000. This reflects the purchase price of $120,000.On January 3, the $1,200 freight cost is also capitalized into the Machinery (asset) account and reduces Cash.On January 5, the installation cost of $7,200 is capitalized. This would reduce Cash and increase the Machinery (asset) account.On December 31, O'Connor will record depreciation. Using the straight-line method, the annual depreciation would be ($120,000 Purchase Price - $12,800 Residual Value) ÷ 10 Years = $10,720. This reduces the value of the Machinery (asset) and recognized as Expense in the Income Statement.Learn more about Accounting Equations here:https://brainly.com/question/14689492
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A company pays $19,000 per period to rent a small building that has 10,400 square feet of space. This cost is allocated to the company's three departments on the basis of the amount of the space occupied by each. Department One occupies 2,080 square feet of floor space, Department Two occupies 3,120 square feet of floor space, and Department Three occupies 5,200 square feet of floor space. If the rent is allocated based on the total square footage of the space, Department One should be charged rent expense for the period of:
Answer:
Rent charged on department one = $3,800
Explanation:
As per the data given in the question,
Department Square Feet
1 2,080
2 3,120
3 5,200
Total space 10,400
If rent is allocated on the basis of total square footage of space then
Rent of small building = $19,000 per period
Rent charged on Department one = (2,080 feet ÷ 10,400 feet) × $19,000
= $3,800
Pina Company had the following stockholdersâ equity as of January 1, 2020.
Common stock, $5 par value, 20,800 shares issued $104,000
Paid-in capital in excess of parâcommon stock 306,000
Retained earnings 320,000
Total stockholdersâ equity $730,000
During 2020, the following transactions occurred.
Feb. 1 Pina repurchased 2,040 shares of treasury stock at a price of $18 per share.
Mar. 1 750 shares of treasury stock repurchased above were reissued at $16 per share.
Mar. 18 500 shares of treasury stock repurchased above were reissued at $13 per share.
Apr. 22 550 shares of treasury stock repurchased above were reissued at $19 per share.
Required:
a. Prepare the journal entries to record the treasury stock transactions in 2020, assuming Skysong uses the cost method.
Answer:
Journal Entry
1 Feb Debit Treasury Stock $36,720 Credit Bank $36,720
1 Mar Debit Bank $28,000 Debit Capital paid in excess-common stock $3,500 Credit Treasury stock $31,500
18 Mar Debit Bank $240,500 Debit Capital paid in excess-common stock $92,500 Credit Treasury stock $333,000
22 April Debit Bank $428,450 Credit Additional capital paid in excess - treasury stock $22,550 Credit Treasury stock $405,900
Explanation:
When using the cost method treasury stock is recorded at the cost of repurchase meaning it does not take into account the Par value and all the excess capital paid.
1 Feb Treasury stock = 2,040*$18 = $36,720
If Treasury stock is reissued for less than its cost then Bank increases with what is received treasury stock decreases by its original cost and the difference is set off against capital paid in excess-Treasury stock and if there is no previous capital paid in excess for treasury stock it is set off against capital paid in excess- common stock then retained earnings if capital paid in excess- common stock is also not available
Answer:
1 Feb DEBIT CREDIT
Treasury stock $36720
cash $36720
1 Mar
Cash $28000
Paid in Capital Access $3500
Treasury Stock $31500
1 Mar
Cash $ 240 500
Paid in Capital Access $92 500
Treasury stock $333000
1 Apr
Cash $ 428450
Paid in Capital Access $22 550
Treasury Stock $405900
Explanation:
If the shares from treasury stock are reissued at a price that is higher than their cost, the difference is credited to additional paid-in capital If the shares from treasury stock are reissued at a price that is lower than their cost, the difference is debited to additional paid-in capital. lso at the issue of treasury we record that price and not the par value
Suppose now that market demand for skiing increases to Qᴅ = 9000 − 60p because of environmental regulations neither Pepall Ridge nor Snow Richards can increase their capacities and serve more skiers beyond their current level of 1,800.
What is the Nash equilibrium price outcome for this case? The constant marginal cost is 10.
Answer:
they both produce the same thing
Explanation:
check the picture attached below for the full explanation.
The Nash equilibrium price when the market demand for skiing is Qᴅ = 9000 - 60p and both Pepall Ridge and Snow Richards have a capacity of 1,800 skiers, with a constant marginal cost of $10, is $90.
Explanation:The question is from the field of economics, specifically the study of market demand, supply, and pricing strategies. We're given a market demand equation Qᴅ = 9000 - 60p and a fixed capacity of 1,800 for each of the two suppliers, Pepall Ridge and Snow Richards. The marginal cost is $10 constant.
To find the Nash equilibrium price, we set the market quantity demanded equal to the total quantity supplied. The total supply in the market is 1,800 skiers from each resort, or 3600 skiers. So, we set 9000 - 60p = 3600, resulting in a value of p = 90.
Thus, the Nash equilibrium price under these conditions is $90, with each resort accommodating 1,800 skiers.
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Yuri Co. operates a chain of gift shops. The company maintains a defined contribution pension plan for its employees. The plan requires quarterly installments to be paid to the funding agent, Whims Funds, by the fifteenth of the month following the end of each quarter. Assume that the pension cost is $162,600 for the quarter ended December 31.
Required:
a. Journalize the entry to record the accrued pension liability on December 31.
Answer:
On December 31
Pension expense $162,600
To Unfunded pension liability $162,600
Explanation:
The journal entry is shown below:
On December 31
Pension expense $162,600
To Unfunded pension liability $162,600
(Being the accrued pension liability is recorded)
For recording this journal entry we debited the pension expense as it increased the expense and credited the unfunded pension liability as it also increased the liabilities
Peg and Al Fundy have a limited food budget, so Peg is trying to feed the family as cheaply as possible. However, she still wants to make sure her family members meet their daily nutritional requirements. Peg can buy two foods. Food 1 sells for $7 per pound and, each pound contains 3 units of vitamin A and 1 units of vitamin C. Food 2 sells for $1 per pound, and each pound contains 1 unit of each vitamin. Each day, the family needs at least 12 units of vitamin A and 6units of vitamin C.
(a) Verify that Peg should purchase 12 units of food 2 each day and thus oversatisfy the vitamin C requirement by 6 units.
(b )Al has put his foot down and demanded that Peg fulfill the family’s daily nutritional requirement exactly by obtaining precisely 12 units of vitamin A and 6 units of vitamin C. The optimal solution to new problem will involve ingesting less vitamin C, but it will be more expensive. Why?
Answer:
A) we requiere to fulfill the Vitamint contrains or surpass them A => 12 C=>6
B) we request that instead of fullfilling the vitaming requirement to be 12/6 or more
to be exactly for this amount.
Explanation:
We set up the situation in excel Solver with the following constraing:
1 2 3 4
A 3 3 1 7
B 3 1 1 1
C 12 6 24
C2 = A1*A2 + B1*B2
C3 = A1*A3 + B1*B3
C4 = A1*A4 + B1*B4
common constraing:
C4 min
A1 = integer
B1 = integer
A) constraing
C2 => 12
C3 =>6
B) contraing to achieve the exact value for each vitamin:
C2 = 12
C3 = 6
Purchasing 12 units of Food 2 everyday meets the nutritional requirements but oversatisfies vitamin C requirement. Achieving the precise nutritional balance using Food 1 and 2 is costlier due to the higher cost of Food 1.
Explanation:(a) Let's verify your first inquiry. If Peg buys 12 units of Food 2 each day, it will cost her $12. This will provide 12 units of vitamin A (1 unit per pound) and 12 units of vitamin C (1 unit per pound), perfectly covering the vitamin A requirement and exceeding the vitamin C requirement by 6 units.
(b) Let's consider the second scenario: precisely hitting the nutritional targets. To do this, Peg could buy 1 unit of Food 1 (which gives 3 units of vitamin A and 1 of vitamin C), and then 9 units of Food 2. This gives exactly 12 units of vitamin A and 6 of vitamin C. However, this strategy costs $16 ($7 for Food 1 and $9 for Food 2), making it more expensive. This is because Food 1 is considerably more costly per unit of food than Food 2, but both the requirements of vitamin A and vitamin C must be met exactly.
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Monte Vista uses the perpetual inventory system. At the beginning of the quarter, Monte Vista has $46,000 in inventory. During the quarter the company purchases $10,300 of new inventory from a vendor, returned $800 of inventory to the vendor, and took advantage of discounts from the vendor of $360. At the end of the quarter the balance in inventory is $34,500. What is the cost of goods sold?
Explanation:
Net purchases= Gross purchases- Returned inventory- Discount on purchases
= $10,300- $800- $360= $9,140
Ending inventory= Beginning inventory+ Net purchases- Cost of goods sold
Cost of goods sold= Beginning inventory+ Net purchases- Ending inventory
= $46,000+ $9,140- $34,500= $20,640
M7_IND4. Andre Greipel is the owner of a small company that produces heart rate monitors. The annual demand is for 2,250 heart rate monitors, and Andre produces these devices in batches. On average, Andre can produce 140 monitors per day during the production process. Demand for monitors has been about 35 monitors per day. The cost to set up the production process is $350, and it costs Andre $0.80 to carry 1 monitor in inventory for one year. How many monitors should Andre produce in each batch
Answer :
a) Economic Production Quantity = 1,612 monitors
b) Number of setups = 1.4
c) Total cost = $972.12 per year
Explanation :
As per the data given in the question,
a) Economic Production Quantity = sqrt((2 × annual demand × set up cost) ÷ carrying cost × (1 - daily demand ÷ daily production))
=sqrt((2 × 2,250 × $350) ÷ $0.80 × (1 - 35 ÷ 140))
= 1,620.19
= 1,621 monitors
b) Number of setups = Annual demand ÷ Economic production quantity
= 2,250 ÷ 1,621
= 1.3880
= 1.4
c) Formula of Total cost = Carrying cost + Annual setup cost
Carrying cost=(Economic production quantity ÷ 2) × Carrying cost × (1 - daily demand ÷ daily production)
= (1,612 ÷ 2)× $0.80 × (1 -35 ÷ 140)
= $486.30
Annual setup cost = (Annual demand ÷ Economic production quantity) × setup cost
= (2,250 ÷ 1,621) × $350
= $485.812
So, Total cost = $486.30 + $485.812
= $972.12 each year
We simply applied the above formulas
On February 1, 2020, Waterway Industries purchased a parcel of land as a factory site for $310000. An old building on the property was demolished, and construction began on a new building which was completed on November 1, 2020. Costs incurred during this period are listed below:
Demolition of old building $ 20700
Architect's fees 34700
Legal fees for title investigation and purchase contract 4500
Construction costs 1378000
(Salvaged materials resulting from demolition were sold for $8600.)
Required:
a) Waterway should record the cost of the land and new building, respectively, as _____________.
Answer:
Waterway should record the cost of the land as $322,100 and new building as $1,412,700
Explanation:
In order to calculate the cost of the land we would have to make the following calculation:
cost of the land= purchased of land+Demolition of old building+Legal fees-Salvaged materials sold
cost of the land=$310,000+$ 20,700+4,500-$8,600
cost of the land=$322,100
In order to calculate the cost of the new building we would have to make the following calculation:
cost of the new building=Architect's fees+Construction costs
cost of the new building=$34,700+$1,378,000
cost of the new building=$1,412,700
For each of the following characteristics, say whether it describes a perfectly competitive firm, a monopolistically competitive firm, both, or neither.
a. sells a product differentiated from that of its competitors
b. has marginal revenue less than price
c. earns economic profit in the long run
d. produces at the minimum of average total cost in the long run
e. equates marginal revenue and marginal cost
f. charges a price above marginal cost
Answer: Please refer to Explanation
Explanation:
In a Perfectly Competitive market, multiple firms are selling the same product and at the same price whereas in a Monopolistic market, firms sell at goods that are differentiated and a s such are sold at different prices.
a. sells a product differentiated from that of its competitors. MONOPOLISTIC COMPETITIVE FIRM.
- This is the definition of the type of products sold in this market so this is a Monopolistic Competitive Firm.
b. has marginal revenue less than price. MONOPOLISTIC COMPETITIVE FIRM.
- As a result of goods being differentiated, firms in a Monopolistic market have to reduce prices to sell more. This leads to a Marginal Revenue curve that is less than the price.
c. earns economic profit in the long run. NEITHER.
- Due to low barriers to entry in both markets, companies cannot make an Economic profit in the long run as competition will increase with companies moving freely in and out of the market.
d. produces at the minimum of average total cost in the long run. PERFECTLY COMPETITIVE FIRM.
- In the long run, Perfectly Competitive firms produce at such a rate that their Average Total cost is at the lowest level as opposed to Monopolistic firms.
e. equates marginal revenue and marginal cost. BOTH.
- For both types of firms to be maximising output, they need to produce at the point where Marginal Revenue is equal to Marginal Cost because this level signifies a point where resources are neither being underutilized or overutilized.
f. charges a price above marginal cost. MONOPOLISTIC COMPETITIVE FIRM.
- As earlier mentioned, the Monopolistic firm produces at a point where Marginal Revenue is equal to marginal cost but at the same time marginal revenue is also beneath price. This means that if marginal cost is equal to marginal revenue then it must be less than Price as well.
Multiple businesses offer the same product at a lower price in a Perfectly Competitive market, but in a Monopoly competition, firms sell commodities that are distinct and hence sold at various prices.
1.MONOPOLISTIC COMPETITIVE FIRM.Sells the product that is distinct from its rivals'.
This is a Monopolistic Competitive Firm since this is the description of the sort of items supplied in this market.
2.MONOPOLISTIC COMPETITIVE FIRM.Has a lower marginal revenue than the cost. Because items are different, companies in a Monopolistic market must lower prices in order to sell more. As a result, the Marginal Revenue curves is lower than the price.
3.NEITHER.
In the big scheme of things, it generates a profit. Firms will not be able to earn an economic earnings in the future due to low barriers to entry in both sectors, since competition will intensify as companies move freely into or out of the marketplace.
4.PERFECTLY COMPETITIVE FIRM.In the long term, produces at the lowest possible average total cost. In the long term, Perfectly Competitive enterprises, as contrasted to Monopolistic firms, produce even at a rate that whose Average Overall Cost is the lowest.
5.BOTH.
the difference between marginal revenue and marginal cost. All types of organizations must produce at the position where Marginal Revenue equals Marginal Cost in order to maximize production since this level denotes a point when resources are neither underused nor overutilized.
6.MONOPOLISTIC COMPETITIVE FIRM.charges a price that is higher than the cost of production. As previously stated, a monopolistic corporation produces at a position where marginal revenue equals marginal cost, but marginal revenue is indeed below price. This implies that if marginal cost equals marginal revenue, it also has to be smaller than Price.
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How is foreign exchange management (FEM)the core issue in international finance and how does it affect balance of payment
Answer:
Foreign Exchange Management (FEM) is the core issue in international finance in that it helps facilitate external trade and maintenance of foreign exchange.
FEM is a tool used by Central bank to adjust currency flows to offset the international exchange of funds thereby effecting balance of payment equilibrium.
Explanation:
Foreign exchange management is a protective measure against the adverse impact of unanticipated changes in exchange rates. It is at the core of International Finance.
The central bank liaises with the International Monetary Fund, World Bank and other financial bodies to hedge against these unanticipated changes as a way of stabilizing exchange rates.
The balance of payments does not impact the exchange rate in a fixed-rate system because central banks adjust currency flows to offset the international exchange of funds.
The interest rate charged to AAA corporate borrowers is 7.8% for 5 year bonds. The interest rate charged to BBB corporate borrowers is 8.8% for five year bonds. The onferences between these two rates of interest can best be explained by the following factors.
a. Inflation and Maturity Risk
b. Maturity Risk and Default Risk
c. Default Risk and Liquidity Risk
d. Liquidity Risk and Inflation me. Inflation and Default Risk
Answer:
Answer is option c.
Default Risk and Liquidity Risk
Explanation:
Default risk - because AAA and BBB differ in credit quality Liquidity risk - because BBB could potentially have lower liquidity than AAA bond (more stable and could be more traded)An automated machine fills bottles with a mean of 16 oz. and standard deviation of 0.1 oz. Assuming that Cpk index is 1 for this process, what are the lower and upper specification limits? Multiple Choice 1. lower spec = 14.3 ounces and upper spec = 17.7 ounces 2. There is insufficient information to determine the process specification. 3. lower spec = 15.7 ounces and upper spec = 16.3 ounces 4. lower spec = 12.0 ounces and upper spec = 21.4 ounces 5. lower spec = 0.1 ounces and upper spec = 1 ounce
Answer:
The correct answer is option 2.
There is insufficient information to determine the process specification.
Explanation:
There is insufficient information to determine the process specification
CpK = Min(CpU, CpL)
CpU = (Upper Specification Limit - Mean)/3*Standard Deviation
CpL = (Mean - Lower Specification Limit)/3*Standard Deviation
Hence, as both upper Specification Limit and lower specification limit is not mentioned, it cannot be measured.
The lower specification limit is approximately 15.7 ounces and the upper specification limit is approximately 16.3 ounces.
Explanation:The Cpk index is a measure of how well a process is able to consistently meet the upper and lower specification limits. It is calculated using the formula Cpk = min((USL - mean)/3σ, (mean - LSL)/3σ), where USL is the upper specification limit, LSL is the lower specification limit, mean is the mean value of the process, and σ is the standard deviation. Since the Cpk index is given as 1, we can use the formula to solve for the upper and lower specification limits.
Substituting the given mean and standard deviation into the formula, we get 1 = min((USL - 16)/(3*0.1), (16 - LSL)/(3*0.1)). Solving for USL and LSL, we find that the lower specification limit is approximately 15.7 ounces and the upper specification limit is approximately 16.3 ounces.
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Alpha Company sells prefabricated pools that cost $80,000 to customers for $154,000. The sales price includes an installation fee, which is valued at $20,000. The fair value of the pool is $140,000. The installation is considered a separate performance obligation and is expected to take 2 months to complete. The transaction price allocated to the pool and the installation is:
Answer:
The correct answer is $134,750 and $19,250.
Explanation:
According to the scenario, computation of the given data are as follows:
We can calculate the price allocated to the poll by using following formula:
Price allocated to the pool = Selling price × fair value ÷ ( Fair value + Installation fees)
= $154,000 × $140,000 ÷ ( $140,000 + $20,000)
= $154,000 × 0.875
= $134,750
Now, We can calculate the price allocated to the installation by using following formula:
Price allocated to the installation = Selling price × Installation fees ÷ ( Fair value + Installation fees)
= $154,000 × $20,000 ÷ ( $140,000 + $20,000)
= $154,000 × 0.125
= $19,250
Refrez Inc., a U.S.-based cereal manufacturer, begins selling its products in China. While people in the United States eat cereal with cold milk, the people of China eat cereal with hot milk. Refrez Inc. believed that everyone used cold milk with cereal and did not modify its product according to people's preferences. As a result, it witnessed a decline in sales in China. In this scenario, what was the obstacle to defining the research problem?
The obstacle to defining the research problem was that the company failed in collecting quantitative data /Selection of inappropriate respondent resulted in wrong output.
Explanation:
A research design is a blue print that a company prepares for conducting marketing research .
A firm collects quantitative data by conducting surveys and asking the customers or consumers to fill the forms (questionnaires).These surveys and questionnaires helps the company in making product related decision in various markets.(i.e how to customize the product as per the taste and the preferences of the consumers)
The obstacle to defining the research problem was that the company failed in collecting quantitative data /Selection of inappropriate respondent resulted in wrong output.Hence the company Refrez Inc failed to acknowledge the fact that people in the United States eat cereal with cold milk, whereas the people of China eat cereal with hot milk.
As a result, Refrez Inc witnessed a decline in sales of its product in Chinese market .
Final answer:
Refrez Inc. failed to recognize cultural preferences for hot milk with cereal in China, a key obstacle to defining their research problem. Application of the Hotelling model could have helped align the product with consumer preferences and avoid declining sales. Cultural, social, and political considerations are essential for successful entry into new markets.
Explanation:
The obstacle to defining the research problem for Refrez Inc. when selling cereal in China was a lack of understanding of cultural preferences and consumption behaviors. The company failed to realize that unlike in the United States, Chinese consumers prefer eating cereal with hot milk. This oversight suggests that Refrez Inc. did not effectively consider the different cultural practices and tastes that can significantly influence the market acceptability of their product.
Incorporating the Hotelling model, Refrez Inc. could have recognized that consumer preferences are not homogenous across geographic locations. The company should have positioned its product on the 'line segment' of the model to align with local consumer preferences in China. Through more thorough market research and adaptation to the local preferences, Refrez Inc. might have avoided the decline in sales by offering a product that aligns with the cultural norm of consuming cereal with hot milk.
Cultural differences, such as those described in the milk consumption habits in China, serve as critical insights for companies to consider when entering new markets. By not taking these factors into account, Refrez Inc. also ignored the social and political context surrounding food consumption, which could contribute to product acceptance and success.
The operating revenues of the three largest business segments for Time Warner, Inc., for a recent year follow. Each segment includes a number of businesses, examples of which are indicated in parentheses. Time Warner, Inc. Segment Revenues (in millions) Turner (cable networks and digital media) $49,500 Home Box Office (pay television) 54,100 Warner Bros. (films, television, and videos) 85,300 Assume that the variable costs as a percent of sales for each segment are as follows: Turner 38% Home Box Office 35% Warner Bros. 23% a. Determine the contribution margin and contribution margin ratio for each segment from the information given. When required, round to the nearest whole millionth (for example, round 5,688.7 to 5,689). Round contribution margin ratio to whole percents for each segment from the information given. Turner Home Box Office Warner Bros. Revenues $ $ $ Variable costs Contribution margin $ $ $ Contribution margin ratio (as a percent) % % %
Answer:
Contribution margin for Turner is $30,690
Contribution margin for Home Box Office is $35,165
Contribution margin for Warner Bros is $65,681
CM ratio:
Turner 62%
Home Box Office 65%
Warner Bros 77%
Explanation:
The computations of contribution margin and contribution margin ratio are as follows:
Time Warner Inc.
Turner Home Box Office Warner Bros total
$(miilion) $(miilion $(miilion) $(miilion)
Segment revenue 49,500 54,100 85,300 188,900
Variable costs (18,810) (18,935) (19,619) (57,364)
Contribution margin 30,690 35,165 65,681 131,536
CM ratio 62% 65% 77%
Variable costs as % of sales 0.38 0.35 0.23
CM ratio=contribution margin ratio=contribution margin/sales revenue
Find attached as well.
Engineers for The All-Terrain Bike Company have determined that a 15% increase in all inputs will cause a 15% increase in output. Assuming that input prices remain constant, you correctly deduce that such a change will cause ________ as output increases.
Answer:
the average cost to reduce
Explanation:
In this situation, when The All-terrain Bike Company increases input (capital and labor) and this causes a proportional increase in output, this scenario The All-terrain Bike Company experiences is called a constant returns to scale which gives rise to decreased average costs.
This happens because buying larger quantity of inputs gives rise to a reduced cost of purchase because these things are being bought in bulk.
Answer:
Average costs to remain constant
Explanation:
In economics, a look at the constant-cost industry reveals that total output can expanded without an increase in the individual firm's average total cost. This is because when input prices remain constant , the long-run supply curve in a constant-cost industry is perfectly elastic.
Also, since 15% increase in all inputs cause a 15% increase in output; such change shows that if input prices remain constant, average costs will remain constant too.
Given the following, determine if a buy price of $4.00 per unit for 3,000 units should be accepted or if the company should continue to make the units. Total variable costs of making the units (materials, labor, and overhead) equal $11,100, and total fixed costs are $3,500. Of the fixed costs, $1,500 is avoidable if the units are purchased. Based on price, the company should (make/buy) Blank 1 Blank 1 buy, Correct Unavailable the units at a net benefit of $
The company should buy the units at $4.00 each, as the total cost to buy ($12,000) is lower than the total cost to make ($13,100), resulting in a net benefit of $1,100.
To determine if the company should buy or make the units, we need to compare the total cost of making the units with the offer to purchase them at $4.00 per unit. The total cost to make the units consists of variable costs and fixed costs minus any avoidable fixed costs (if not making the units).
The total variable cost of making 3,000 units is $11,100. The fixed costs are $3,500, of which $1,500 is avoidable if the units are bought instead of made. So the relevant fixed cost (the non-avoidable part) is $3,500 - $1,500 = $2,000.
If the company continues to make the units, the total relevant cost will be the sum of variable and non-avoidable fixed costs: $11,100 + $2,000 = $13,100.
To buy the units at $4.00 each for 3,000 units would cost $4.00 x 3,000 = $12,000.
Since $12,000 (buy) is less than $13,100 (make), the company should buy the units, which gives a net benefit of $13,100 - $12,000 = $1,100.