Answer:
No, I don't beliave
Explanation:
The classic economic model is based on the price competition system. This is a beneficial system for consumers who will pay a lower price as a result of competition. This works well in some sectors, but not all, such as schools.
In my view, the school cannot be used as a commodity. Schools have different structures for the same purpose, so some differ in their educational approach. If a competitive system is in place, it will pressure schools to streamline education to lower costs and maximize school profit - just as companies do. It turns out that a school does not have the same purpose as companies. The company aims for profit while the school aims to educate.
Final answer:
School choice programs promote competition among schools, encouraging improvement in services to attract students, aligning with economic principles applicable to both private and public organizations.
Explanation:
School voucher programs were designed to create competition among schools, public and private, with the belief that schools would improve their services to attract students. This concept is rooted in economic principles applicable to both private and public organizations.
The idea behind vouchers is that increased competition among schools leads to improved educational outcomes. This competition encourages schools to strive for excellence in order to attract students, similar to how businesses operate in a competitive market.
Although the impact of school choice programs on academic achievement and public school funding is still being studied, the competitive nature of these programs mirrors the economic principles of competition and improvement seen in private and public organizations.
Nakatomi Corporation produces 10,000 units of Product A at a cost of $20 per unit. A detailed breakup of the cost is below. Choose the correct answer from the options provided. Per Unit Variable costs $ 12 Allocated manufacturing overhead costs 3 Allocated general administrative costs 5 $ 20 Outside supplier's offer $ 17 What are the total relevant cost of producing the units internally? $150,000 $120,000 $200,000 $170,000
Answer:
Correct option is B) $120,000
Explanation:
Relevant cost are the cost which will not be incurred in case the product is not manufactured, that includes the direct manufacturing or variable cost only. The other allocated costs will still be incurred even in case no manufacturing is done of Product A but might not be allocated to Product A.
Here, direct variable cost = $12
Total relevant cost per unit = $12
Total Relevant cost = $12 X 10,000 units = $120,000
Correct option is B) $120,000
The total relevant cost of producing 10,000 units of Product A internally by Nakatomi Corporation is $150,000.
Explanation:The total relevant cost of producing Product A internally by Nakatomi Corporation is the sum of the variable costs and the allocated manufacturing overhead costs, ignoring the allocated general administrative costs as they are not relevant in this scenario. The variable costs per unit are $12 and the manufacturing overhead costs are $3 per unit. Thus, the total relevant costs per unit is $12 + $3 = $15. Since Nakatomi Corporation is producing 10,000 units, the total relevant cost of producing the units internally is $15 * 10,000 = $150,000.
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The Oakland Mills Company has disclosed the following financial information in its annual reports for the period ending March 31, 2013: sales of $1,681,000, costs of goods sold of $812,300, depreciation expenses of $175,000, and interest expenses of $89,575. Assume that the firm has a tax rate of 35 percent. What is the company's net income? Set up an income statement to answer the question.
Answer:
NET INCOME $392,681.25
Explanation:
To find net income we need to first calculate the pre-tax income and then calculate the tax and subtract
[tex]pretax \: income = revenue \: - expenses[/tex]
sales 1,681,000
(COGS) (812,300)
GROSS PROFIT 868,700
(Depreciation expense) (175,000)
(Interest expense) (89,575)
pre-tax income 604,125
[tex]pretax \: income \times rate = income \: tax \: expense[/tex]
tax income
604,125* 0.35= (211,443.75)
net income = 392,681.25
Suppose a farmer in Georgia begins to grow peaches. He uses $1,000,000 in savings to purchase land, he rents equipment for $90,000 a year, and he pays workers $150,000 in wages. In return, he produces 200,000 baskets of peaches per year, which sell for $3.00 each. Suppose the interest rate on savings is 5 percent and that the farmer could otherwise have earned $35,000 as a shoe salesman. What is the farmer's economic profit? The peach farmer earns economic profit of
Answer: The farmer's economic profit is $2,75,000.
Explanation:
Cost Incurred for Growing peaches (Explicit Cost) :
Rents equipment = $90,000 a year
Paid Wages = $1,50,000
Total Explicit cost = $2,40,000
Total Revenue(TR) Earned:
TR = Number of baskets of peaches produced per year × selling price of each peaches
= 2,00,000 × $3.00
= $6,00,000
Opportunity Cost (Implicit Cost):
Interest rate on savings ( 5 %) = 5% of $1,000,000
= $50,000
Farmer earn as a shoe salesman = $35,000
Total implicit cost = $85,000
Economic Profit:
Economic Profit = Total Revenue - Implicit cost - Explicit cost
= $6,00,000 - $85000 - $2,40,000
= $2,75,000
Martha Beyerlein Company incurred $150,000 of research and development costs in its laboratory to develop a patent granted on January 2nd, 2017. On July 31st, 2017, Beyerlein paid $35,000 for legal fees in a successful defense of the patent. The total amount debited to Patents through July 31st, 2017, should be
Answer:
The total amount that will be debited to the patents account on July 31, 2017 will be $35,000.
Explanation:
The amount of $150,000 will not be included in the patents account because this patent was developed by the Martha beyerlein company not purchased from any other firm , so the cost incurred here will be debited to the research and development account. And only the $35,000 that was paid for legal fees will be debited to the patents account.
Paolucci Corporation's relevant range of activity is 6,900 units to 14,500 units. When it produces and sells 10,700 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 6.85 Direct labor $ 3.75 Variable manufacturing overhead $ 1.75 Fixed manufacturing overhead $ 3.30 Fixed selling expense $ 1.05 Fixed administrative expense $ 0.75 Sales commissions $ 1.00 Variable administrative expense $ 0.65 If 9,700 units are sold, the variable cost per unit sold is closest to:
Answer:
Total Variable Cost per Unit $14
Explanation:
We re asked for the variable cost per unit which are constant at unit level.
The fixed cost are not relevant.
So we just need to add the current variable cost.
Direct materials $ 6.85
Direct labor $ 3.75
Variable manufacturing overhead $ 1.75
Sales commissions $ 1.00
Variable administrative expense $ 0.65
Total Variable $14
The variable cost per unit for the Paolucci Corporation remains the same within the relevant range of activity. The costs per unit of direct materials, labor, variable manufacturing overhead, and variable administrative expense add up to $12.95, which applies to both 10,700 and 9,700 units sold.
Explanation:To calculate the variable cost per unit sold, we need to consider the costs that vary with production. The average costs given for 10,700 units include direct materials, direct labor, variable manufacturing overhead, and variable administrative expense. These four costs are summed up to find the total variable cost per unit. To find the variable cost per unit for 9,700 units sold, we will use the same costs per unit since variable costs per unit remain constant within the relevant range of activity.
Total Variable Cost per Unit = Direct materials + Direct labor + Variable manufacturing overhead + Variable administrative expense
Total Variable Cost per Unit for 10,700 units = $6.85 + $3.75 + $1.75 + $0.65 = $12.95 per unit
Since we are within the relevant range (6,900 to 14,500 units), the variable cost per unit will not change based on the activity level. Thus, the variable cost per unit sold for 9,700 units will also be $12.95 per unit.
Suppose you take out a home mortgage for $180.000 at a monthly interest rate of 0.4%. If you make payments of $1000/month, after how many months will the loan balance be zero? Estimate the answer by graphing the sequence of loan balances and then obtain an exact answer.
Answer:
time = 318.77
It will be after 318 months
Explanation:
We are asked to find the time of an annuity of 1,000 monthly payment
which present value is 180,000
[tex]C * \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
C = 1000
rate = 0.004
time ??
PV = 180,000
[tex]1,000 \times \frac{1-(1+0.004)^{-time} }{0.004} = 180,000\\[/tex]
We clear out the dividend:
[tex]1-(1+0.004)^{-time} = \frac{180,000\times 0.004}{1,000}\\[/tex]
Then we clear the power up, notice it is negative, so we have to multiply by (-1)
[tex](-1) \times (-(1+0.004)^{-time}) = (-1) \times (0.72 - 1)}\\[/tex]
[tex]1.004^{-time} = 0.28[/tex]
We now use logarithmics to solve for time
[tex]log_{1.004}0.28 = \frac{log0.28}{log1.004} = -318.87 =-time[/tex]
time = 319
Nazaro's Boot Company makes specialty boots for the rodeo circuit. On December 31, 2016, the company had (a) 300 pairs of boots in finished goods inventory and (b) 1,200 heels at a cost of $8 each in raw materials inventory. During 2017, the company purchased 35,000 additional heels at $8 each and manufactured 16,600 pairs of boots. Determine the unit and dollar amounts of raw materials inventory in heels at December 31. 2017.
Answer:
Ending inventory 3,000 units
Ending Inventory $24,000
Explanation:
I'm going to assume 2 heels are use to get a pair of boots complete
16,600 boots x 2 = 33,200 heels used in production
Then:
[tex]$$Beginning Inventory + Purchase - used = Ending Inventory [/tex]
beginning 1,200 at 8
purchase 35,000 at 8
used in production (33,200)
Ending Inventory 3,000 at 8 = 24,000
Thirty percent of households say they would feel secure if they had $50,000 in savings. You randomly select 8 households and ask them if they would feel secure if they had $50,000 in savings. Find the probability that the number that say they would feel secure is (a) exactly five, (b) more than five, and (c) at most five
Answer: a) 0.04667544
b) 0.01129221
c) 0.98870779
Explanation:
Binomial probability formula :-
[tex]P(x)=^nC_xp^x(1-p)^x[/tex], where P(x) is the probability of getting success in x trials, n is the total number of trials and p is the probability of getting success in each trial.
Given : The probability of households say they would feel secure if they had $50,000 in savings = 0.30
Total number of households selected = 8
a) The probability that the number that say they would feel secure is exactly five will be :-
[tex]P(5)=^8C_{5}(0.30)^5(0.70)^3\\\\=56(0.3)^5(0.7)^3=0.04667544[/tex]
b) The probability that the number that say they would feel secure is more than five :-
[tex]P(x>5)=P(6)+P(7)+P(8)\\\\=^8C_{6}(0.30)^6(0.70)^2+^8C_{7}(0.30)^7(0.70)^1+^8C_{0}(0.30)^8(0.70)^0\\\\=28(0.30)^6(0.70)^2+8(0.30)^7(0.70)^1+(0.30)^8\\\\=0.01129221[/tex]
c) The probability that the number that say they would feel secure is at most five :-
[tex]P(x\leq5)=1-P(x>5)\\\\=1-0.01129221=0.98870779[/tex]
The solution relies on understanding and applying the binomial probability formula, which involves identifying number of trials (n), success probability (p), and number of successes (x). Probabilities can be calculated for specific counts, and for ranges of counts, e.g. 'at most' or 'more than'.
Explanation:This question is about calculating probabilities using the binomial distribution. The binomial probability formula is There are 8 households, hence n=8 and the given probability of success (a household feeling secure with $50,000 in savings) is 0.3, hence p=0.3.
(a) To find the probability that exactly five households would feel secure, use the binomial formula with x=5, p=0.3, and n=8.
(b) The probability that more than five households would feel secure is found by 1 minus the probability of at most five households feeling secure.
(c) To find the probability that at most five households would feel secure, calculate the sum of probabilities that 0,1,2,3,4 or 5 households would feel secure.
Remember, all these probabilities can be calculated using the binomial distribution equation.
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In the long run, both monopolistic competition and competitive markets result in: a) a wide variety of brand-name choices for consumers. b) an inefficient allocation of resources. c) zero economic profit for firms. d) excess capacity. e)insufficient capacity.
Answer:
c) zero economic profit for firms.
Explanation:
In both cases, while there is room for economic gain, market structures - perfect competition and monopolistic competition - will attract entrants to compete. In the long run, the market goes into balance when economic profit is zero.
Recalling that the concept of economic profit is different from accounting profit.
Varghese is a high level administrator at an organization. Consistently, he calls employees into his office to point out their mistakes and to inform them of flaws within their performance; however, he never praises his employees nor informs them of positive feedback. Varghese most likely has which of the Dark Triad?
Answer: Varghese most likely has Machiavellianism.
Explanation:
All three dark triad traits are conceptually distinct although empirical evidence shows them to be overlapping. They are associated with a callous-manipulative interpersonal style.
Narcissism is characterized by grandiosity, pride, egotism, and a lack of empathy.
Machiavellianism is characterized by manipulation and exploitation of others, an absence of morality, and a higher level of self interest.
Psychopathy is characterized by continuous antisocial behavior, impulsivity, selfishness, callousness, and remorselessness.
Varghese most actually and generally likely has Machiavellianism.
What does Machiavellianism denotes in the passage?Every one of the three dark triad traits are adroitly particular albeit experimental proof shows them to cover.
They are related with a hard manipulative relational style. Narcissism is portrayed by self importance, pride, pretention, and an absence of compassion. Machiavellianism is portrayed by control and double-dealing of others, a shortfall of profound quality, and a more elevated level of personal circumstance.
People who are estimated to have an elevated degree of Machiavellianism will generally have low suitability and uprightness. Machiavellianism is likewise corresponded with psychopathy. The first distributed variant of the Mach-IV is the most generally involved measure in experimental examination.
Since Machiavellianism is related with flippant inclinations and criticism, connecting a genuine Machiavellian character with "great." Instead, it is ideal to consider when high-Mach traits are valuable and appropriate can be hard.
Therefore in the passage Varghese actually have Machiavellianism.
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Matt's retail store offers all its products at $2 lesser than its competitors throughout the year. The store never runs any promotional campaigns or offers any additional special discounts. Matt's retail store is following a(n) ________.
Answer:
The everyday low pricing policy is the policy that Matt's retail store is following.
Explanation:
Everyday low pricing policy is the kind of a pricing strategy in which any company or firm keeps the prices of its products at low over a long period of time rather than putting any kind of sale or promotional activities. So here the consumers don't have to wait for the sale to start, the prices are already at everyday low. An important assumption to understand here is that in this kind of pricing strategy cost of production is assumed not be changed, that is why a company is able to implement this policy over a long period of time.
So therefore as here Matt's retail store is giving $2 lesser price for its product than its competitors , it means that Matt's retail store has applied everyday low pricing strategy.
Matt's retail store is employing an everyday low pricing strategy, consistent with a horizontal supply curve and the Law of Demand.
This pricing strategy reflects an understanding of the Law of Demand, where lowering prices leads to an increase in the quantity demanded, assuming that demand is elastic. In competitive retail markets, setting a unique, consistent price without fluctuating with sales or promotions allows buyers to purchase as much as they desire at that price, aligning with the concept of a horizontal supply curve.
As Jake began his market research, he discovered that there wasn't another retail boating supply business for more than 100 miles. In fact, there was no large lake or river, either. Jake concluded that
A. he would have to offer lower prices. B. his marketing should stress quality and service. C. the competition gave up too soon. D. there was no market for his product.19.
Answer:
As Jake began his market research, he discovered that there wasn't another retail boating supply business for more than 100 miles. In fact, there was no large lake or river, either. Jake concluded that there was no market for his product.- D.
The following information applies to Jasmine, who is single, for 2017:Salary $56,000Interest income from First Bank of Lexington 1,500Dividends from Watters Company stock 3,000Contribution to a traditional IRA 4,000Loan repayment from her friend 1,000Capital loss from sale of personal vehicle (2,300)Number of potential dependents ?Age 44Jasmine maintains a household for her sister, who has $9,000 from Social Security. In addition, Jasmine's aunt lives with her and has income of $3,000.The personal exemption amount for 2017 is $4,050.Calculate Jasmine's Taxable Income for 2017.
Answer:
Jasmine's taxable income for the year 2017 is $ 42,050
Explanation:
we are going to do a step wise calculation for taking out the taxable income of Jasmine,
the first step is to take out the gross income of Jasmine,
GROSS INCOME =
Salary + interest income from first bank of Lexington + Dividend income
= $56,000 + $1500 + $ 3000
= $60,500
Next step is to take out adjusted gross income by subtracting contribution to IRA from gross income,
ADJUSTED INCOME =
gross income - contribution to IRA
= $60,500 - $4000
= $56,500
Next step would be to subtract standard deduction ($6350 as of 2017) and personal exemption ( $8100 - $4050 x 2, multiplied by 2 because Jasmine's aunt live with her) from adjusted gross income,
TAXABLE INCOME =
=$56,500 - $ 6350 - $8100
= $ 42,050
Code of Ethics. You have been asked to lead a group of students, alumnae, and faculty in an effort to develop a code of ethics for a student professional organization in your career field. You are reviewing in your mind key points to cover with the group as you embark on this effort.
Which of the following statements best defines the term "code of ethics" and explains its intent?
a. A code of ethics is a set of specific laws that apply to a member of an organization or group.
b. A code of ethics is a statement of specific rules that members of an organization must follow.
c. A code of ethics forms the basis for deciding what behavior is legal and what behavior is ethical.
d. A code of ethics states the principles and core values that are essential to a set of people and that govern their behavior
Answer:
d. A code of ethics states the principles and core values that are essential to a set of people and that govern their behavior.
Explanation:
A code of ethics is the document that includes the values and principles that are important for a company, its employees and any situation that may take place in their environment. It does not include rules or behavior statements, it just give the principles that will lead the decisions and actions that the workers or the company do.
The code of ethics is the document that precede the code of conduct. In the code of conduct you can find the specific rules and procedures that apply to a company, a member or a group.
Adam Kane wants to sell office supplies to as many customers as possible, in as many markets as possible. His plan is
A. a proven way to maximize his profit margin. B. a poor market strategy. C. the best way to succeed. D. a time-consuming way to find 4.
Answer:
A. a proven way to maximize his profit margin.
Explanation:
A is the only answer that makes sense in this scenario. If there is a proven way to maximize profit margin, it would mostly have a profit, yet the price would be low enough for their to be a large customer base. As many people like to join the 'bandwagon', a large customer base with high rating would potentially draw more customers, regardless if they need it or not.
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Transfer prices are _____. A. costs of the segment producing the product or service B. revenues of the segment acquiring the product or service C. revenues of the segment producing the product or service D. none of these answers is correct
Answer: the correct answer is D. none of these answers is correct.
Explanation: A transfer price exists for accounting purposes when diverse divisions on a multy entity company are in charge of their own revenues.
The Muffin House produces and sells a variety of muffins. The selling price per dozen is $15, variable costs are $9 per dozen, and total fixed costs are $4,200. How many dozen muffins must The Muffin House sell to breakeven?
Your question asks how many muffins the Muffin House needs to sell in order to breakeven
Answer: 700 MuffinsIn order to find the answer to your question, we first need to gather important information from the question.
Important Information:
Selling price/ per muffin = $15Variable costs (cost to make)/ per muffin = $9Total fixed cost = $4,200With the information above, we can find the answer to the question.
The Muffin House spends $9 to make a muffin, but sells it for $15. So the Margin is $6 (profit).
We would only make profit from the Margin price, so we need to get the Margin price to $4,200.This means we would need to divide 4200 by 6 to get our answer. Since they want to breakeven with the fixed cost, they need to sell as much muffins for the Margin to add up to $4,200 at the end to breakeven.
[tex]4200 \div 6=700[/tex]
When you're done solving, you should get 700.
This means that The Muffin House must sell 700 muffins in order to break even.
I hope this helps!Best regards,MasterInvestorCaspion Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 10.5 kilograms of the raw material Jurislon. Budgeted production of Miniwarps for the next five months is as follows: August 23,400 units September 22,100 units October 23,500 units November 24,700 units December 24,400 units The company wants to maintain monthly ending inventories of Jurislon equal to 20% of the following month's production needs. On July 31, this requirement was not met since only 11,600 kilograms of Jurislon were on hand. The cost of Jurislon is $26 per kilogram. The company wants to prepare a Direct Materials Purchase Budget for the next five months. The total cost of Jurislon to be purchased in August is:
Answer:
The total cost of Jurislon to be purchased in August is: $7,293,260
Explanation:
We will calculate the kilograms needed to fulfil the sales and the desired ending inventory.
Then we will subtract the beginning balance, to know how many kilograms do we need to purchase for the requirement.
Last we multiply by the unit cost to get the cost in dollars
August 23,400 units x 10.5 = 245,700
ending 20% september
20% x 22,100 x 10.5 = 46,410
Total requirement 292,110
beginning (11,600)
total purchase in kilograms 280,510
280,510 x $26 = $7,293,260 total cost for August
With only a part-time job and the need for a professional wardrobe, Rachel quickly maxed out her credit card the summer after graduation. With her first full-time paycheck in August, she vowed to pay $270 each month toward paying down her $8 comma 368 outstanding balance and not to use the card. The card has an annual interest rate of 18 percent. How long will it take Rachel to pay for her wardrobe? Should she shop for a new card? Why or why not?
Final answer:
To determine the time to pay off an $8,368 credit card balance at 18% interest with $270 monthly payments, a financial calculator or specific formula is needed due to compounding interest. Additionally, considering a new card with a lower interest rate could save money.
Explanation:
Rachel needs to figure out how long it will take to pay off her outstanding credit card balance of $8,368 with an annual interest rate of 18%. The problem can be solved by calculating the amortization of the credit card debt, considering she's making a fixed payment of $270 every month. However, to do this, we need a more complex mathematical formula or a financial calculator since credit card interest is compounded monthly, and the balance changes every month after each payment and the application of interest.
Given the high interest rate of 18%, it would also be wise for Rachel to consider shopping for a new credit card with a lower interest rate. This could potentially save her a lot of money by reducing the amount of interest she pays over time. Financial institutions often offer balance transfer options with lower interest rates, sometimes even with introductory rates of 0% for a certain period, which could be greatly beneficial.
Final answer:
Rachel should consider transferring her balance to a new card with a lower interest rate to pay off her debt faster. With her current card's 18% interest and a $270 monthly payment, much of her payments will initially cover interest rather than the principal. The exact time to pay off the debt depends on the calculation using the amortization formula.
Explanation:
Calculating Credit Card Debt Payoff Time-
Rachel has an outstanding credit card balance of $8,368, with an annual interest rate of 18%. She plans to pay $270 each month to pay down her debt. To calculate the time it will take to pay off the debt, we need to use the amortization formula, which takes into account the principal amount, the monthly payment amount, and the monthly interest rate.
The monthly interest rate is 18% per year, which is 1.5% per month (18% divided by 12 months). Applying this to her balance monthly means her payments need to cover the interest before paying off the principal. This situation is not ideal, as most of her initial payments will go towards interest rather than decreasing the principal balance significantly.
To answer the second part of the question: Yes, she should shop for a new card. If Rachel were to transfer her balance to a card with a lower interest rate, she would pay less in interest, and more of her payment would go towards the principal. This could help her pay off the debt faster. A typical credit card interest rate ranges from 12% to 18% per year. Shopping for a credit card with an interest rate at the lower end of this spectrum or finding a card with a 0% introductory rate for balance transfers would be beneficial.
Given that Americans pay tens of billions of dollars every year in credit card interest, reducing the interest rate can provide significant savings and should be a priority for anyone carrying a balance. However, without the exact amortization formula and a calculator or spreadsheet to do the computations, we cannot provide a precise number of months it will take for Rachel to pay off her professional wardrobe.
You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose machine. The machine's total price including installation and delivery is $70,000. The machine falls into the four-year class using straight line depreciation method, and it will be sold after four years for $0. The use of this new machine will bring revenue of $25,000 annually for 4 years, and will have annual maintenance expense of $5,000. The firm's marginal tax rate is 40 percent and the required rate of return is 10%. (Please show your work)
a. What is the initial investment ? (keep your number as a whole number: example of answer format: $1,000)
b. What is the Cash Flow at year 1 ? ( keep your number as a whole number: example of answer format: $1,000 )
c. What is the Cash Flow at year 4 ? ( keep your number as a whole number: example of answer format: $1,000 )
d. What is NPV ? ( keep your number to two decimals: example of answer format: $1,000.00 or if it's negative, then -$1,000.00)
Answer:
Explanation: download the manual if you may get and get solutions
The market price of a security is $26. Its expected rate of return is 13%. The risk-free rate is 5% and the market risk premium is 7.0%. What will be the market price of the security if its correlation coefficient with the market portfolio doubles (and all other variables remain unchanged)? Assume that the stock is expected to pay a constant dividend in perpetuity. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Final answer:
The new market price of the security after the correlation coefficient with the market portfolio doubles cannot be accurately determined based on the information provided. One would need to know the security's beta or dividend growth rate, which is not mentioned in the question.
Explanation:
The market price of a security is influenced by its expected rate of return and its correlation with the market portfolio. If the correlation coefficient of the security with the market portfolio doubles, it implies a higher risk associated with the security. Using the Capital Asset Pricing Model (CAPM), we can understand that as risk (beta) increases, so does the required rate of return. However, without a formula directly correlating market price and beta in the given scenario, we cannot precisely calculate the new market price without additional information on the security's beta or its cash flows such as dividends.
It is also important to note that when the security promises a constant dividend in perpetuity, the price can be figured out using the Gordon Growth Model (assuming constant growth rate for dividends), but this requires the growth rate, which hasn't been provided in the question. Therefore, based on the given information, we cannot accurately determine what the new market price of the security would be if its correlation coefficient with the market were to double.
The actual and planned data for Underwater University for the Fall term were as follows: Actual Planned Enrollment 4,500 4,125 Tuition per credit hour $120 $135 Credit hours 60,450 43,200 Registration, records, and marketing cost per enrolled student $275 $275 Instructional costs per credit hour $64 $60 Depreciation on classrooms and equipment $825,600 $825,600 Registration, records, and marketing costs vary by the number of enrolled students, while instructional costs vary by the number of credit hours. Depreciation is a fixed cost. a. Prepare a variable costing income statement showing the contribution margin and income from operations for the Fall term.
Answer:
Variable Costing Income Statement
Sales Revenue = 60,450 X $120 = $7,254,000
Less: Variable Cost
Reg, records, marketing = $275 X 4,500 = $1,237,500
Instructional cost = $64 X 60,450 = $3,868,800
Contribution Margin = $2,147,700
Less:
Fixed Cost
Depreciation $825,600
Net Operating Income = $$1,322,100
To prepare a variable costing income statement, calculate tuition revenue, variable costs, contribution margin, and subtract fixed costs to find income from operations. For Underwater University, the income from operations for the Fall term would be $1,322,100.
Variable Costing Income Statement
To prepare a variable costing income statement for Underwater University, we need to calculate the total tuition revenue, total variable costs (registration, records, marketing, and instructional costs), and subtract fixed costs to determine the income from operations for the Fall term.
Total Variable Costs = Variable Costs Per Enrolled Student + Instructional Costs = $1,237,500 + $3,868,800 = $5,106,300
Contribution Margin = Tuition Revenue - Total Variable Costs = $7,254,000 - $5,106,300 = $2,147,700
Fixed Costs: Depreciation on Classrooms and Equipment = $825,600
Income from Operations = Contribution Margin - Fixed Costs = $2,147,700 - $825,600 = $1,322,100
This is the income from operations Underwater University would have for the Fall term based on the given actual data and the costing method applied.
Mary's Baskets Company expects to manufacture and sell 30,000 baskets in 2019 for $5 each. There are 4,000 baskets in beginning finished goods inventory with target ending inventory of 4,000 baskets. The company keeps no work-in-process inventory. What amount of sales revenue will be reported on the 2019 budgeted income statement?
Answer:
budgeted sales revenue will be 150,000
Explanation:
It expects to sell 30,000 at $5 each
so sales revenue would be
[tex]30,000 \times 5 = 150,000[/tex]
The beginning and ending inventory has no relevance. The question is already telling us how many unis the company expecs to sell and their unit price.
We just have to multiply
Ricky's Repair Shop has a monthly target profit of $ 28,000. Variable costs are 80 % of sales, and monthly fixed costs are $ 12,000. Requirements 1. Compute the monthly margin of safety in dollars if the shop achieves its income goal. 2. Express Ricky's margin of safety as a percentage of target sales.
Answer: Margin of Safety(MOS) in dollars= $1,40,000
Margin of Safety(MOS) as a percentage of target sales = 70%
Explanation:
Given:
Target profit = $28000
Variable costs = 80 % of sales
Contribution = 20 % of sales
Fixed Costs = $12000
Required sales in units = [tex]\frac{Fixed Costs +Target profit }{Contribution margin per unit}[/tex]
Using the given in above formula;
Required sales in dollars = [tex]\frac{12000+0}{20}[/tex]
=$60000
Target sales = [tex]\frac{(Fixed Costs + Target profit)}{Contribution}[/tex]
Target sales = $200000
Margin of Safety(MOS) in dollars = Target Sales - Break-even point sales
Margin of Safety(MOS) in dollars = $200000 - $60000 = $140000
Margin of Safety(MOS) as a percentage of target sales = [tex](\frac{140000}{200000})\times 100[/tex]
=70%
Final answer:
To answer the student's question, we first calculate the sales needed to meet the profit target. However, due to the lack of actual sales data, we are unable to compute the margin of safety in dollars or as a percentage of target sales.
Explanation:
The student is asking how to compute the margin of safety in dollars and express it as a percentage of target sales for Ricky's Repair Shop. First, we need to determine the sales required to achieve the target profit. Since variable costs are 80% of sales, the contribution margin is 100% - 80% = 20% of sales. To reach the $28,000 profit target, we need to cover the $12,000 fixed costs and the $28,000 profit, which is a total of $40,000. We divide this by the contribution margin percentage to get the required sales: $40,000 / 20% = $200,000.
Now, we calculate the margin of safety by subtracting the target sales from the actual sales. Since we don't have the actual sales amount in the question, we can't complete this step. If we were given actual sales, we would use: Margin of Safety in dollars = Actual Sales - Target Sales.
Finally, the margin of safety as a percentage of target sales is calculated by: Margin of Safety percentage = (Margin of Safety in dollars / Actual Sales) × 100. Again, since we don't have the actual sales figure, we can't compute this percentage. Without additional data, the student's question cannot be fully answered.
Banyan Co.’s common stock currently sells for $53.25 per share. The growth rate is a constant 8%, and the company has an expected dividend yield of 2%. The expected long-run dividend payout ratio is 20%, and the expected return on equity (ROE) is 10.0%. New stock can be sold to the public at the current price, but a flotation cost of 15% would be incurred. What would be the cost of new equity? Do not round intermediate calculations. Round your answer to two decimal places.
Answer:Cost of New Equity ([tex]K_{e}[/tex]) = 20.75%
Explanation:
Banyan Company’s common stock currently sells([tex]P_{0}[/tex]) = $53.25
Growth rate is constant (g) = 8%
Expected dividend yield = 2%
Expected long-run dividend payout ratio = 20%
Expected return on equity (ROE) = 10%
Flotation cost(F) = 15%
We know that ;
Growth rate = (1-Dividend payout ratio) (ROE)
8% = (1-0.20)[tex]\times[/tex](0.10)
Cost of new equity (ke) = [tex][\frac{D_{1} }{P_{0}\times (1 - F) }] + g[/tex]
where;
F = Flotation cost
([tex]D_{1}[/tex]) = Expected Dividend
([tex]P_{0}[/tex]) = Current Stock price
g = Dividend growth rate
Calculating expected dividend:
Dividend yield = [tex][\frac{D_{1} }{P_{0}}[/tex]
15% = [tex][\frac{D_{1} }{53.25}[/tex]
[tex]D_{1}[/tex] = 15%[tex]\times[/tex] 53.25
Expected Dividend ([tex]D_{1}[/tex]) = $7.9875
Cost of New Equity ([tex]K_{e}[/tex]) = [tex][\frac{7.9875}{53.25\times (1 - 0.15) }] + 0.08[/tex]
= [tex][\frac{7.9875}{62.64}] + 0.08[/tex]
= 0.207 (or) 20.75%
Cost of New Equity ([tex]K_{e}[/tex]) = 20.75%
Actually Investors required rate of return i.e. ROE = 10% on the stock, but because of flotation costs the company must earn more than 10%.
The value of a business owner's time is an example ofa. an opportunity cost. b. a fixed cost. c. an explicit cost. d. total revenue.
Answer: Opportunity cost
Explanation:
A. Opportunity cost can be defined as the next best alternative foregone , it is the cost of profit the business looses while choosing one alternative over other.
B. Fixed cost are those cost that do not change with the level of output produced in the firm.
C. In simple words the direct costs a business pay to the outsiders for running its operations is called explicit cost.
D. Total revenue is the amount of income a company has before deducting its expenses occurred to earn that income.
So from the above explanations we can conclude that value of a business owner's time is an example of opportunity cost.
Final answer:
The value of a business owner's time is an example of an opportunity cost, representing the potential benefits forgone by not choosing the next best alternative, such as income from another job or personal leisure time.
Explanation:
The value of a business owner's time is an example of an opportunity cost. Opportunity cost is a key concept in economics that involves the notion of implicit costs, which are not directly billed or paid out but represent the potential benefits that are forgone by choosing one alternative over another. In the context of a business owner, this could include the income they could have earned in another occupation, or the value of their leisure time that is lost when they dedicate time to their own business. Implicit costs like these are subtle and include the depreciation of goods, materials, and the owner's time which could have been used for other activities or opportunities.
The only difference between variable and absorption costing is the expensing of ________.A) direct manufacturing costs B) variable marketing costs C) fixed manufacturing costs D) variable administrative costs
Answer:
The correct answer is C. fixed manufacturing costs
Explanation:
We can see that in Absorption costing, all the costs are included and that includes fixed costs. on the other hand, in the variable costing, it is only included the variable costs that are directly incurred in production.
Night Flights is preparing a contribution margin report segmented by route. The following information is available: Miami/LA Atlanta/ New York New York/ Chicago Average ticket price per passenger $1,250 $900 $750 Total passengers served 5,400 8,800 12,200 Total miles flown 190,000 176,000 97,600 The variable costs per unit are as follows: Fuel $25 per mile Wages $45 per mile Food/beverage service $7 per passenger Selling $70 per passenger What is the contribution margin ratio for the New York/Chicago route (to the closest tenth of a percent)?
The contribution margin ratio for the New York/Chicago route is approximately -138.8%.
Explanation:The contribution margin ratio for the New York/Chicago route can be calculated using the following steps:
Calculate the total revenue generated from the route by multiplying the average ticket price per passenger by the total number of passengers served.Calculate the total variable costs for the route by multiplying the variable costs per unit (fuel, wages, food/beverage service, and selling) by the total miles flown.Subtract the total variable costs from the total revenue to get the contribution margin for the route.Finally, divide the contribution margin by the total revenue and multiply by 100 to get the contribution margin ratio.Applying these steps to the New York/Chicago route:
Total revenue = $750 (average ticket price per passenger) x 12,200 (total passengers served) = $9,150,000Total variable costs = ($25 (fuel per mile) + $45 (wages per mile) + $7 (food/beverage service per passenger) + $70 (selling per passenger)) x 97,600 (total miles flown) = $21,840,000Contribution margin = Total revenue - Total variable costs = $9,150,000 - $21,840,000 = -$12,690,000Contribution margin ratio = (Contribution margin / Total revenue) x 100 = (-$12,690,000 / $9,150,000) x 100 = -138.76%Listed here are the total costs associated with the 2017 production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for $528 each. Costs 1. Plastic for casing—$21,000 2. Wages of assembly workers—$81,000 3. Property taxes on factory—$8,000 4. Accounting staff salaries—$37,000 5. Drum stands (1,000 stands purchased)—$38,000 6. Rent cost of equipment for sales staff—$24,000 7. Upper management salaries—$215,000 8. Annual flat fee for factory maintenance service—$16,000 9. Sales commissions—$13 per unit 10. Machinery depreciation, straight-line—$40,000 Required: 1. Classify each cost and its amount as (a) either variable or fixed and (b) either product or period. (The first cost is completed as an example.)
Answer:
1. Classifying each cost as Variable or Fixed
When total cost changes with change in output then it is variable in nature and when it remains constant then it is fixed cost.
Plastic for casing = (a) Variable cost (b) Product as will depend on number of casing. = $21,000 / 1000 units = $21 per casing if casing is per unit done individually.Wages of assembly workers = (a) Variable Costs (b) Period it will depend on number of hours worked, in piece rate system it will depend on number of units, but generally it is based on number of hours so it is period.Property taxes on factory = (a) Fixed Costs (b) Period as this does not depend on number of units produced it is fixed in nature, with time duration.Accounting staff salaries = (a) Fixed Costs (b) Period as this is not related to number of units produced and will be fixed for a month.Drum Stands = (a) Variable cost (b)Product as will be required for each drum individually manufactured.Rent cost of equipment for sales staff = (a) Fixed Cost (b) Period as rented is fixed for a specified period generally paid monthly and is not based on number of units produced.Upper management salaries = (a) Fixed Cost (b) Period as this is fixed annually and not based on number of units produced.Annual flat fee for factory maintenance service = (a) Fixed Cost (b) Period as this is fixed annually and has no relation with number of units produced.Sales commissions = (a) Variable Costs (b) Product as this is based on number of units sold and defined per unit.Machinery depreciation, straight-line = (a) Fixed Cost (b) Period as this is not based on number of units produced and is fixed annually.Stemway Company requires a new manufacturing facility. It found three locations; all of which would provide the needed capacity, the only difference is the price. Location A may be purchased for $500,000. Location B may be acquired with a down payment of $100,000 and annual payments at the end of each of the next twenty years of $50,000. Location C requires $40,000 payments at the beginning of each of the next twenty-five years. Assuming Stemway borrowing costs are 8% per annum, which option is the least costly to the company?
Answer:
Location C costs least to the company as it only costs $461,160
Explanation:
We will evaluate all the three proposals
Location A Cost = $500,000
Location B
Down payment = $100,000
Annual year end payment = $50,000 for upcoming 20 years
Present value @ 8% = ([tex]{\sum \frac{1}{(1+0.08){^1}}+ \frac{1}{(1+0.08){^2}}+ ........ \frac{1}{(1+0.08){^2^0}}}) \times $50,000[/tex] = 9.818 X $50,000 = $490,900
Net Present Value = $100,000 + $490,900 = $590,900
Location C
Payment of $40,000 at the beginning of each year, which means first payment will not be discounted and remaining 24 payments will be discounted.
Thus Present Value = $40,000 +( [tex]{\sum \frac{1}{(1+0.08){^1}}+ \frac{1}{(1+0.08){^2}}+ ........ \frac{1}{(1+0.08){^2^4}}}) \times $40,000[/tex] = $40,000 + 10.529 X $40,000 = $40,000 + $421,160 = $461,160
Thus Location C costs least to the company as it only costs $461,160