Answer:
25 containers
Explanation:
The computation of the number of kanban containers required is shown below:
= (Lead time demand + Safety stock) ÷ Container size
where,
Lead time demand is
= 2,000 units × 4 days
= 8,000 units
Container size = 400 units
Safety Stock is
= 1 day × 2,000 units
= 2,000 units
So, the number of kanban containers required is
= (8,000 units + 2,000 units) ÷ (400 units)
= 25 containers
We simply applied the above formula
A lunch packager and distributor receives a shipment of freshly cut on-the-go shaped fruit. To get the fruit ready for distribution to grocery stores, the fruit is packaged in convenient vacuum-sealed, lunch-box-size containers decorated with cartoon icons of the particular fruit all over. How has the company added value to the product?
Answer:
The vacuum-sealed packaging is the added value and the decorations with cartoon icons of the particular fruit all over.
Explanation:
The vacuum-sealed packaging is the added value.
This vacuum-sealed packaging makes sure the fruits stay fresh by providing an air-tight environment.
It also preserves the moisture in the fruit for an extended period of time and allowing one to enjoy the fruit as it will still taste fresh.
Also, vacuum-sealed packaging allows the fruit to stay longer and it wont go bad.
In addition to this vacuum-sealed packaging, the cartoon icons of the particular fruit all over lunch-box size container which is vacuum-sealed is also an addded value. This will invite customers to the product.
You’re trying to save to buy a new $175,000 Ferrari. You have $35,000 today that can be invested at your bank. The bank pays 2.9 percent annual interest on its accounts. How long will it be before you have enough to buy the car? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
Approximately 56 years and 3 months.
Explanation:
The formula to calculate this is the same formula we use for calculating the Future Value.
Future Value = Present Value ( 1 + i ) ^ n
175000 = 35000 ( 1 + 0.029 ) ^ n
Calculating for 'n',
We get the ' n ' as 56.29 years.
Hope this Helps.
Goodluck buddy.
Answer:
56.3 years
Explanation:
Price of the Car, $175,000 is the future target value which I am trying to have by investing $35,000 at a rate of 2.9% per year.
We can calculate the numbers of years by using the Future value formula
FV = PV = ( 1 + r )^n
FV = Future Value = $175,000
PV = Present Value = $35,000
r = rate of interest = 2.9%
n = numbers of year / periods = ?
By Placing the values in the formula
$175,000 = $35,000 x ( 1 + 2.9% )^n
$175,000 / $35,000 = ( 1 + 0.029 )^n
5 = 1.029^n
Log 5 = n Log 1.029
n = Log 5 / log 1 .029 = 56.30 years
When comparing levered vs. unlevered capital structures, leverage works to increase EPS for high levels of operating income because interest payments on the debt (a) vary with EBIT levels. (b) stay fixed, leaving less income to be distributed over fewer shares. (c) stay fixed, leaving less income to be distributed over more shares. (d) stay fixed, leaving more income to be distributed over fewer shares. (e) decrease, leaving more income to be distributed over fewer shares
Answer:
The answer is D.
Explanation:
Unlevered capital structure is the one where there is no debt in the company, the company is completely financed by using equity. While levered capital structure involves the combination of both debt and equity in the company.
For a company, debt is an effective tool to raise funds for expansion without diluting or reducing ownership control by adding more shareholders.
Interest payment on debt is usually fixed.
Going for leverage does not increase the number of shares and Earnings Per Share(EPS) will be higher because earnings or income will be distributed to fewer shareholders unlike unlevered capital structure that tends to add to the number of shares thereby lowering EPS because earnings will be distributed to larger shareholders.
Chauncey Corporation began business on June 30, 2016. At that time, it issued 20,000 shares of $50 par value, six percent, cumulative preferred stock and 90,000 shares of $10 par value common stock. Through the end of 2018, there had been no change in the number of preferred and common shares outstanding. Required a. Assume that Chauncey declared dividends of $69,000 in 2016, $0 in 2017, and $354,000 in 2018. Calculate the total dividends and the dividends per share paid to each class of stock in 2016, 2017, and 2018. Round to two decimal places. Year Preferred Stock Common Stock Preferred per share Common per share 2016 Answer Answer Answer Answer 2017 Answer Answer Answer Answer 2018 Answer Answer Answer Answer b. Assume that Chauncey declared dividends of $0 in 2016, $120,000 in 2017, and $186,000 in 2018. Calculate the total dividends and the dividends per share paid to each class of stock in 2016, 2017, and 2018. Round to two decimal places.
Answer:
See the explanation below
Explanation:
a. Assume that Chauncey declared dividends of $69,000 in 2016, $0 in 2017, and $354,000 in 2018. Calculate the total dividends and the dividends per share paid to each class of stock in 2016, 2017, and 2018. Round to two decimal places.
a1. Dividend payment of $69,000 in 2016
Total cumulative preferred dividend = 20,000 * $50 * 6% = $60,000
Cumulative preferred dividend per share = $50 * 6% = $3.00 per share
Total common stock dividend = $69,000 - $60,000 = $9,000
Common stock dividend per share = $9,000/90,000 = $0.10 per share
a2. Dividend payment of $0 in 2017
Since $0 dividend is declared, it means no dividend is paid to each class of stock in 2017.
However, cumulative preferred dividend to be carried forward to when next the dividend is paid are as follows:
Total cumulative preferred dividend = 20,000 * $50 * 6% = $60,000
Cumulative preferred dividend per share = $50 * 6% = $3.00 per share
a3. Dividend payment of $354,000 in 2018
Note that the last year cumulative preferred stock dividend will be paid together with their this year's dividend before the common stock dividends are paid as follows:
Total cumulative preferred dividend for two years (2017 and 2018) = (20,000 * $50 * 6%) × 2 = $120,000
Cumulative preferred dividend per share for 2018 alone = $50 * 6% = $3.00 per share
Cumulative preferred dividend per share for 2017 and 2018 = ($50 * 6%) × 2 = $6.00 per share
Total common stock dividend = $354,000 - $120,000 = $234,000
Common stock dividend per share = $234,000/90,000 = $2.60 per share
b. Assume that Chauncey declared dividends of $0 in 2016, $120,000 in 2017, and $186,000 in 2018. Calculate the total dividends and the dividends per share paid to each class of stock in 2016, 2017, and 2018. Round to two decimal places.
b1. Dividend payment of $0 in 2016
Since $0 dividend is declared, it means no dividend is paid to each class of stock in 2016.
However, cumulative preferred dividend to be carried forward to when next the dividend is paid are as follows:
Total cumulative preferred dividend = 20,000 * $50 * 6% = $60,000
Cumulative preferred dividend per share = $50 * 6% = $3.00 per share
b2. Dividend payment of $120 in 2017
Note that the last year cumulative preferred stock dividend will be paid together with their this year's dividend before the common stock dividends are paid as follows:
Total cumulative preferred dividend for two years (2017 and 2018) = (20,000 * $50 * 6%) × 2 = $120,000
Cumulative preferred dividend per share for 2018 alone = $50 * 6% = $3.00 per share
Cumulative preferred dividend per share for 2017 and 2018 = ($50 * 6%) × 2 = $6.00 per share
Since proffered stock has exhausted the dividend paid, no or $0 dividend will be paid to the common stock holder.
b3. Dividend payment of $186,000 in 2018
Total cumulative preferred dividend = 20,000 * $50 * 6% = $60,000
Cumulative preferred dividend per share = $50 * 6% = $3.00 per share
Total common stock dividend = $186,000 - $60,000 = $96,000
Common stock dividend per share = $96,000/90,000 = $1.07 per share.
Riche Township recorded more estimated revenues than appropriations for the coming fiscal year. In integrating its adopted budget with its financial accounting records, the town would: Group of answer choices Debit budgetary control. Debit encumbrance control. Credit budgetary control. Credit encumbrance control.
Answer:
Credit budgetary control
Explanation:
Budgetary control here has to do with a process where managers are able to set financial and performance targets with budgets, compare the generated results, and adjust performance as it is required.
Corbel Corporation has two divisions: Division A and Division B. Last month, the company reported a contribution margin of $47,700 for Division A. Division B had a contribution margin ratio of 35% and its sales were $231,000. Net operating income for the company was $27,200 and traceable fixed expenses were $59,700. Corbel Corporation's common fixed expenses were:
Answer:
$41,650
Explanation:
Contribution margin is the net of sales and variable costs.
Contribution Margin:
Division A = $47,700
Division B = $231,000 x 35% = $80,850
Company calculates the Net Income after deducting The traceable and common fixed costs from the total contribution margin.
Total contribution margin = $47,700 + $80,850 = $128,550
Net Income = Total contribution margin - Traceable Fixed Expense - Common Fixed expenses
$27,200 = $128,550 - $59,700 - Common Fixed expenses
$27,200 = $68,850 - Common Fixed expenses
Common Fixed expenses = $68,850 - $27,200 = $41,650
The Southern Division manager of Texcaliber Inc. is growing concerned that the division will not be able to meet its current period income objectives. The division uses absorption costing for internal profit reporting and had an appropriate level of inventory at the beginning of the period. The division manager knows that he can boost profits by increasing production at the end of the period. The increased production will allocate fixed costs over a greater number of units, reducing cost of goods sold and increasing earnings. Unfortunately, it is unlikely that additional production will be sold, resulting in a large ending inventory balance. The division manager has come to Aston Melon, the divisional controller, to determine exactly how much additional production is needed to increase net income enough to meet the division's profit objectives. Aston analyzes the data and determines that the division will need to increase inventory by 30% in order to absorb enough fixed costs to meet the division's income objective. Aston reports this information to the division manager. Is Aston acting ethically?
Answer:
Aston has given the information required to meet division profit objective. Increasing the profit objective is common goal of every manager. Here manager wanted to meet profit objective by minimising fixed cost which is not wrong motive. Whether the excess production can be sold in the market. If there is a chance to sell, more production can be made.
Absorption costing means that all of manufacturing costs are absorbed by units produced. It calculates every cost on no. of units produced but it does not mean to increase production only in order to match income objective or to reach this goal instead of fact that inventory remains at end, and sale of that increased production does not take place and income objective met because of the lower cost per unit.
Aston's decision to increase production for absorbing more fixed costs to boost reported profits may not be considered ethically sound in business sense as it might create a misleading image of the division's performance and it doesn’t reflect operational efficiency improvements.
Explanation:In the context of business ethics, it can be argued that Aston isn't acting ethically. While increased production to absorb more fixed costs can increase reported profits under absorption costing, it is essentially an accounting maneuver, not necessarily reflecting an improvement in operational efficiency or profitability. It's also important to note that the increased inventory could lead to potential storage costs and the risk of obsolescence if not sold within an appropriate timeframe, therefore creating a potentially misleading image of the division's economic performance.
Ethics in Accounting
For Aston as a controller, his responsibility should extend beyond just meeting current period income objectives. He should also consider the long-term financial picture and be transparent about the financial health and performance of the division. Carrying out a strategy that potentially misrepresents the division's true operational performance could arguably be seen as unethical.
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Last month, Ginger's hotel ran an occupancy rate of 85%. Her competitive set had 150,000 room nights included within it that were available for sale during that month. During that month, the competitive set sold a total of 115,000 rooms. What was the approximate occupancy rate INDEX last month for Ginger's hotel?
The approximate occupancy rate INDEX last month for Ginger's hotel is 112
Explanation:
Ginger’s occupancy = 85%
Its competitive set has 150,000 rooms. But only 115,000 sold
So occupancy rate of the competitive set = 115000 by 150000 = 0.7667 = 76.67%
The occupancy should always be rounded to the lower whole number (so as to not change the occupancy rooms)
Hence competitive set occupancy = 76%
So, occupancy rate INDEX = ginger’s occupancy by competitive set occupancy
= 85 by 76
= 1.1184
=112% (rounded to nearest whole number)
Hence, Answer is: 112
CC’s is analyzing a proposed project with anticipated sales of 3,620 units, give or take 5 percent at a sales price of $24, plus or minus 2 percent.. The variable cost per unit is $14.60, plus or minus 4 percent, and the fixed costs are $12,900, plus or minus 1 percent. The depreciation expense is $8,100. If the company conducts a sensitivity analysis using a variable cost of $16, the total variable cost estimate will be:
Answer:
The total variable cost will be $ 16 * 3620= $ 57920
Explanation:
CC
Analyzing Proposed Project
Given 1 2 3
Variable Increase ---- 10% 9.125% 9.125%
Fixed Decreased 6.97%
Sales price per unit $24 $24 $24 $24
Variable price per unit $ 14.6 $16.06 $ 16 $ 16
Fixed Costs $ 12900 12900 $ 12900 $ 12000
Sales Volume 3620 3620 3620 3620
We have taken the sale prices constant and changed the variable costs and fixed costs.
CC
Sensitivity Analysis Report
Given 1 2 3
Sales 86880 86880 86880 86880
Variable Costs 52852 58137.2 57920 57920
Contribution Margin 34028 28742.8 28960 28960
Fixed Costs 12900 12900 12900 12000
Operating Profit 21128 15482.8 16060 16960
Dollar Change in
Variable Expenses 5645.2 5068 5068
The total variable cost will be $ 16 * 3620= $ 57920
A firm that produces wood shutters and bookcases has received two orders for shutters: one for 100 shutters and one for 150 shutters. The 100-unit order is due for delivery at the start of week 4 of the current schedule, and the 150-unit order is due for delivery at the start of week 8. Each shutter consists of two frames and four slatted wood sections. The wood sections are made by the firm, and fabrication takes one week. The frames are ordered, and lead time is two weeks. Assembly of the shutters requires one week.
Determine the size and timing of planned-order releases necessary to meet delivery requirements using Lot-forLot ordering policy.
Answer:
Since 100 shutters are scheduled to be finished in 3 weeks, you must order the 200 frames immediately so they arrive at the end of 2nd week or beginning of the 3rd week. This way, you can assemble the parts during the 3rd week and have them finished by the beginning of the 4th week when they must be delivered.
The other order, 150 shutters must be finished in 7 weeks, so you can order the 300 frames at the end of the fourth week. This way the frames will be received by the end of the 6th week and the parts assembled during the 7th week.
Lot-for-lot order quantities are carried out for every job order that required them.
Using the lot-for-lot (L4L) ordering policy, the planned-order releases for the 100-unit and 150-unit orders of wood shutters are calculated based on the fabrication and assembly lead times.
Explanation:In this case, the lot-for-lot (L4L) ordering policy means that the firm will order exactly the quantity needed to fulfill each order. As per the given information, the 100-unit order is due in week 4, and the 150-unit order is due in week 8. We need to calculate the timing and size of planned-order releases.
Since each shutter consists of two frames and four slatted wood sections, the firm needs to produce 2 frames and 4 wood sections for each shutter. Fabrication of the wood sections takes one week and frame lead time is two weeks. Assembly of the shutters takes one week.
Using the L4L ordering policy, the planned-order releases will be:
For the 100-unit order due in week 4: Frame order release in week 2, Wood sections fabrication order release in week 3, Assembly order release in week 4.For the 150-unit order due in week 8: Frame order release in week 6, Wood sections fabrication order release in week 7, Assembly order release in week 8.Learn more about Lot-for-lot ordering policy here:https://brainly.com/question/30541105
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Darnell has plans to go to a play and already has a $50 nonrefundable, nonexchangeable, and nontransferable ticket. Now Vicky, whom Darnell has wanted to date for a long time, asks him to a concert. Darnell would prefer to go to the concert with Vicky and forgo the play, but he doesn't want to waste the $50 he spent on the play ticket.
From the perspective of an economist, if Darnell decides to go to the party with Vicky, what has he just done?
a. Incorrectly allowed a sunk cost to influence his decision
b. Made a choice that was not optimal
c. Correctly ignored a sunk cost
Answer:
c. Correctly ignored a sunk cost
Explanation:
The $50 he spent on the ticket is a sunk cost. Independently of his decision (go to the play or go with Vicky), the cost is already done.
He decide to go to the concert beacuse he prefers it than go to the play. He maximizes his utility, as he would not recover the $50 in any way. In the utility calculation, the sunk cost has no influence.
He has correctly ignored a sunk cost, not letting it to influence in his decision.
g In 2009, an agricultural company introduced a new cropping process which reduced the cost of growing some of its crops. If sales in 2008 and 2009 were steady at $30 million, but the gross margin increased from 2.8% to 3.9% between those years, by what amount was the cost of sales reduced
Answer:
$ 330000
Explanation:
Gross margin represent the amount of money remaining after the removal or subtraction of cost of product or services sold from its net sales \
Gross margin = ( total revenue - costs of good sold ) × 100
the sales in 2008 and 2009 were steady at $ 30 million dollar
the gross margin increased from 2.8% to 3.9 %
the amount the cost of sales reduced = ( $ 30 million × 0.039) - ( $ 30 million × 0.028) = $ 330000
A project's opportunity cost of capital is:
Multiple Choice:
O the return that shareholders could expect to earn by investing in the financial markets.
O the return earned by investing in the project.
O equal to the average return on all company projects.
O designed to be less than the project's IRR.
Answer:
the return that shareholders could expect to earn by investing in the financial markets
Explanation:
Projects are financed from a joined pool of funds. The Cost of Capital is the minimum return that a project must offer before it can be accepted and this is determined by the return that shareholders could expect to earn by investing in the financial markets.
Neptune Company produces toys and other items for use in beach and resort areas. A small, inflatable toy has come onto the market that the company is anxious to produce and sell. The new toy will sell for $3 per unit. Enough capacity exists in the company’s plant to produce 16,000 units of the toy each month. Variable costs to manufacture and sell one unit would be $1.25, and fixed costs associated with the toy would total $35,000 per month.
The company’s Marketing Department predicts that demand for the new toy will exceed the 16,000 units that the company is able to produce. Additional manufacturing space can be rented from another company at a fixed cost of $2,000 per month. Variable costs in the rented facility would total $1.50 per unit, due to somewhat less efficient operations than in the main plant.
Required:
1. Compute the monthly break-even point for the new toy in unit sales and in dollar sales.
2. How many units must be sold each month to make a monthly profit of $12,000?
If the sales manager receives a bonus of 10 cents for each unit sold in excess of the break-even point, how many units must be sold each month to earn a return of 25% on the monthly investment in fixed expenses?
Answer:
1) 22,000 units; $66,000.
2) 30,000 units
3) 28,607 units
Explanation:
1)
16,000 units × $1.75 per unit = $28,000 ($3-$1.25)
Remaining unrecovered fixed cost = $7,000 ($35,000 - $28,000)
Total fixed costs to be covered by remaining sales = $9000 ($7000+$2000 addition cost).
--> ($3-$1.5=$1.5 Contribution Margin per unit)
6,000 units ($9000 divided $1.5 )
Total units = 16000+6000=22,000 units
22,000 units x $3=$66,000.
2) Target profit = $12000
CM ratio = $3-1.5=$1.5
$12000/$1.5=8,000 units.
30,000 units (22,000 units + 8,000 units )
3)
Bonus 0.10 per unit cause CM drop from $1.5 to $1.4 per unit
$9,250 -->($35,000+$2,000)]*25%
$9250/$1.4 = 6,607 units
22,000 units + 6,607 units = 28,607 units.
The correct options to the question will be (1) 22,000 units; $66,000; (2) 30,000 units; and (3) 28,607 units
The monthly break-even point for the new toy in unit sales and in dollar sales will be:
= 16,000 units × ($3 - $1.25)
= 16000 units × $1.75.
= $28000
Then, the remaining unrecovered fixed cost will be:
= $35,000 - $28,000 = $7000
Then, the total fixed costs that will be gotten from the remaining sales will be:
= $7000 + $2000 = $9000
The contribution margin per unit will be: = $3 - $1.5 = $1.5
The units will be: 9000/$1.5 = 6000
Total units will then be: = 16000+6000=22,000 units
Therefore, the dollar sales will be:
22,000 units x $3 = $66,000.
2) Target profit = $12000
Contribution Margin ratio = $3-1.5 = $1.5
Therefore, the units that must be sold each month to make a monthly profit of $12,000 will be:
= $12000/$1.5 = 8,000 units.
Number of units will be:
= 22,000 units + 8,000 units
= 30000 units
3)This will be calculated as:
= ($35,000+$2,000)] × 25%
= $37000 × 25%
= $9250.
This will then be:
= ($9250)$1.4) + 22000
= 6607 + 22000
= 28607 units
The number of units will be 28607 units
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A produce distributor uses 790 packing crates a month, which it purchases at a cost of $10 each. The manager has assigned an annual carrying cost of 39 percent of the purchase price per crate. Ordering costs are $31. Currently the manager orders once a month. How much could the firm save annually in ordering and carrying costs by using the EOQ?
Answer:
$398.48
Explanation:
For calculating the saving amount, first need to calculate the economic order quantity, total cost etc
The economic order quantity is
[tex]= \sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}}[/tex]
where,
Annual demand is
= 790 packaging crates × 12 months
= 9,480 crates
And, the carrying cost is
= $10 × 39%
= $3.90
[tex]= \sqrt{\frac{2\times \text{9,480}\times \text{\$31}}{\text{\$3.90}}}[/tex]
= 388 units
Now the total cost is
= Annual ordering cost + Annual carrying cost
= Annual demand ÷ Economic order quantity × ordering cost per order + Economic order quantity ÷ 2 × carrying cost per unit
= 9,480 ÷ 388 × $31 + 388 ÷ 2 × $3.90
= $757.42 + $756.60
= $1,514.02
Now the total cost in case of 790 packing crates is
= Annual ordering cost + Annual carrying cost
= Annual demand ÷ Economic order quantity × ordering cost per order + Economic order quantity ÷ 2 × carrying cost per unit
= 9,480 ÷ 790 × $31 + 790 ÷ 2 × $3.90
= $372 + $1,540.50
= $1,912.50
Therefore, the annual saving cost is
= $1,912.50 - $1,514.02
= $398.48
Fosnight Enterprises prepared the following sales budget: The expected gross profit rate is 30% and the inventory at the end of February was $10,000. Desired inventory levels at the end of the month are 20% of the next month's cost of goods sold. What is the desired beginning inventory on June 1?
Final answer:
Since the sales figures for June and July aren't provided, we can't calculate the desired beginning inventory for June 1. Instead, we review the calculation of accounting profit, which is $50,000 in the example provided.
Explanation:
The desired beginning inventory on June 1 is the amount of inventory that Fosnight Enterprises wants to have at the start of the month to meet the planned sales for June, while maintaining a certain percentage of the next month's cost of goods sold as ending inventory for June. Since we do not have the actual sales figures for June and July, we cannot calculate this figure. However, we can discuss a related accounting concept using the provided self-check question.
The self-check question asks for the calculation of a firm's accounting profit, which is defined as total revenues minus explicit costs. In the given example, the firm had sales revenue of $1 million, and it spent $600,000 on labor, $150,000 on capital, and $200,000 on materials. The accounting profit would therefore be $1,000,000 (total revenues) - ($600,000 (labor) + $150,000 (capital) + $200,000 (materials)) = $50,000.
Douglass Interiors is considering two mutually exclusive projects and have determined that the crossover rate for these projects is 11.7 percent. Project A has an internal rate of return (IRR) of 15.3 percent and Project B has an IRR of 16.5 percent. Given this information, which one of the following statements is correct?I. Project A should be accepted as its IRR is closer to the crossover point than is Project B's IRR.II. Project B should be accepted as it has the higher IRR.III. Both projects should be accepted as both of the project's IRRs exceed the crossover rate.IV. Neither project should be accepted since both of the project's IRRs exceed the crossover rate.V. You cannot determine which project should be accepted given the information provided.
Answer:
V) You cannot determine which project should be accepted given the information provided.
Explanation:
The best way to determine which project to accept or reject is the net present value (NPV) and we do not have enough information to calculate it. Both projects have positive internal rates of return (IRR), but does any of them have a positive NPV? We cannot tell, so it is not possible to choose one or the other.
Final answer:
The correct statement is that Project B should be accepted because it has a higher internal rate of return (IRR) than Project A, which is indicative of greater economic desirability. The correct statement is II.
Explanation:
The crossover rate for Douglass Interiors projects is 11.7 percent, which is the discount rate at which both projects would have the same net present value (NPV). Since Project A has an internal rate of return (IRR) of 15.3 percent and Project B has an IRR of 16.5 percent, both projects have IRRs that exceed the crossover rate. This indicates that, depending on the discount rate, each project could be more attractive at different times. However, the decision to choose between two mutually exclusive projects shouldn't rely solely on the IRR if their IRRs are above the crossover rate. Instead, additional investment appraisal methods such as NPV should be considered to determine which project would add the most value over time.
Based on the IRR method, Project B should be accepted as it has the higher IRR compared to Project A. Statement II is correct because the IRR is a measure of the project's rate of return, and since Project B has a higher IRR, it is considered more economically desirable assuming that the IRR correctly ranks the projects and there are no other conflicting criteria for decision making.
Peter Billington Stereo, Inc. Supplies car radios to auto manufacturers and is going to open a new plant. The company is undecided between Detroit and Dallas as the site. The fixed costs in Dallas are lower due to cheaper land costs, but the variable costs in Dallas are higher because shipping distances would increase.
Dallas Detroit
Fixed costs $560,000 $840,000
Variable costs $28/radio $24/radio
A. Based on the analysis of the volume after rounding the numbers to the nearest number, Dallas is best below and Detroit is best above _____ radios.
B. Dalla's fixed costs have increased by 10%. Based on the analysis of the volume, after rounding the numbers to the nearest whole number, Dallas is best below and Detroit is best above _____ radios.
Questions option:
1. 14,000
2. 153,993
3. 70,000
4. 67,200
5. 56,000
Answer:
Peter Billington Stereo, Inc.
A. Based on the analysis of the volume after rounding the numbers to the nearest number, Dallas is best below and Detroit is best above 70,000 radios.
B. With Dallas's fixed costs increased by 10%, Dallas is best below and Detroit is best above 56,000 radios.
Explanation:
Identify total costs at various volumes as follows:
Total costs, TC = Variable Cost, VC + Fixed Cost, FC
At 14,000 units:
a) Dallas' TC = VC = $28 x 14,000 + $560,000 = $952,000
b) Dallas' TC with 10% increase in FC = $28 x 14,000 + $616,000 = $1,008,000
c) Detroit's TC = $24 x 14,000 + $840,000 = $1,176,000
At 56,000 units:
a) Dallas' TC = $28 x 56,000 + $560,000 = $2,128,000
b) Dallas' TC with 10% increase in FC = $28 x 56,000 + $616,000 = $2,184,000
c) Detroit's TC = $24 x 56,000 + $840,000 = $2,184,000
At 67,200 units:
a) Dallas' TC = $28 x 67,200 + $560,000 = $2,441,600
b) Dallas' TC with 10% increase in FC = $28 x 67,200 + $616,000 = $2,497,600
c) Detroit's TC = $24 x 67,200 + $840,000 = $2,452,800
At 70,000 units:
a) Dallas' TC = $28 x 70,000 + $560,000 = $2,520,000
b) Dallas' TC with 10% increase in FC = $28 x 70,000 + $616,000 = $2,576,000
c) Detroit's TC = $24 x 70,000 + $840,000 = $2,520,000
At 153,993 units:
a)Dallas' TC = $28 x 153,993 + $560,000 = $4,871,804
b) Dallas' TC with 10% increase in FC = $28 x 153,933 + $616,000 = $4,927,804
c) Detroit's TC = $24 x 53,993 + $840,000 = $4,535,832
All problems related to decision making under uncertainty have three common elements: Group of answer choices
A) The mean, median, and mode.
B) The set of decisions, the cost of each decision, and the profit that can be made from each decision.
C) The set of possible outcomes, the set of decision variables, and the constraints.
D) The set of decisions, the set of possible outcomes, and a value model that prescribes results.
E) The statement of the problem, a graphical representation of the problem, and a recommendation.
Answer:
D) The set of decisions, the set of possible outcomes, and a value model that prescribes results.
Explanation:
Problem solving involves use of various methods to find solutions to problems faced by individuals and organisations.
It involves generation of ideas or decisions that can resolve the problem.
These ideas are now analysed to see how viable they are, can they be implemented, and what is the possible outcome.
The valid ideas are now used to create a value model that can effectively bring results.
copyright: Multiple Choice Gives its owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 70 years. Is an exclusive right granted to its owner to manufacture and sell a device or to use a process for 17 years. Is an exclusive right granted to its owner to manufacture and sell a device or to use a process for 50 years. Is the amount by which the value of a company exceeds the fair market value of a company's net assets if purchased separately. Gives its owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 17 years.
Answer:
Gives its owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 70 years.
Explanation:
The copyright is an exclusive right given to a creator to publish and reap the economic benefits from his work, for 70 years.
Copyright to create works such as literary books, music albums, films, animated media, and so on.
During this 70 years, anyone who would like to reproduce the creative work, has to pay copyright to the creator. After the period of 70 years, the copyright expires, and the work enters the public domain, which means that it is not necessary to pay copyright anymore to reproduce the works.
Suppose a firm's production function is given by Q = F(L,K) = 5LK, where L is the amount of labor and K is the amount of capital. The wage rate is $100 per unit of labor and the rental rate of capital is $25 per unit of capital. What is the lowest possible cost of producing 980 units of output?
Answer:
$ 9800.
Explanation:
First, we must know that the cost minimization of capital and labour is; MRTS = MPL/ MPK.
Where the marginal product of labour = dQ/dL which is equal to; 5K.
The marginal product of capital = dQ/dK = 5L.
Hence, the marginal rate of technical substitution = 5K/5L = 100/25.
K = 4L.
Next, we will substitute the value of K into Q= 5LK.
That is; Q = 5L × 4L. Where Q = 980 units.
Then, 980 = 20L.
L = 49.
If L = 49, then K = 4 × 49 = 196.
So, we will now use what we have gotten above to determine the lowest possible cost;
lowest possible cost= (100 × 49) + (25 × 196).
lowest possible cost = 4900 + 4900.
lowest possible cost= $ 9800
Suppose that the demand curve for wheat is Upper Q equals 120 minus 10 p and the supply curve is Upper Q equals 10 p. The government imposes a price ceiling of p overbar equals $ 4 per unit. a. How do the equilibrium price and quantity change? (round quantities to the nearest integer and round prices to the nearest penny) The equilibrium quantity without the price ceiling is nothing and the price without the price ceiling is $ nothing. The equilibrium quantity with the price ceiling is nothing.
Answer:
$6; 60 units
40 units
Explanation:
Given that,
Demand curve: Q = 120 - 10P
Supply curve: Q = 10P
Government imposes a price ceiling = $4 per unit
Without price ceiling,
At equilibrium,
Supply = Demand
10P = 120 - 10P
20P = 120
P = $6 (equilibrium price)
Equilibrium quantity = 120 - (10 × 6)
= 120 - 60
= 60 units
With price ceiling of $4 per unit,
Equilibrium quantity:
= 10P
= 10 × 4
= 40 units
Consider two countries’ situations: Country A can produce either six automobiles or twelve movies with the same amount of resources. Country B, using the same resources, can produce either five automobiles or eight movies.
a- Which theory of international trade would maximize the total production?
b- Determine which country would produce automobiles and which country would produce movies.
c- Draw the production possibilities frontier for this case.
Answer:
Please refer explanation and attached diagram
Explanation:
A. Theory of international trade: Comparative advantage
This is referred to as an individual, company, region or country's ability to produce goods and services at a lower opportunity cost than that of its trade partners. The country with the least opportunity cost has comparative advantage in that product. This is different to absolute advantage which only takes into account the ability of a country to produce a greater number of output using the same resources.
B. In order to identify which country will produce what product, the opportunity cost for each product must be found. In other words, the benefit lost from the second best alternative.
In Country A, to produce 6 automobiles, 12 movies must be sacrificed. Hence, to produce 1 automobile, 2 movies are sacrificed (12/6). On the other hand, to produce 1 movie, 0.5 of an automobile is sacrificed (6/12).
When looking at Country B, it can produce either 5 automobiles or 8 movies. Hence, when producing a single automobile, the opportunity cost it incurs is being unable to produce 1.6 movies (8/5). Similarly, to produce 1 movie, it sacrifices 0.6 of automobiles (5/8).
Hence comparatively, Country A having the lower opportunity cost in movie production, will produce movies, whilst Country B having the lower opportunity cost in producing automobiles will produce automobiles.
C. The production possibility frontier has been attached.
In order to draw the lines, at least two points are required, but the question only provides one point for each Country. However, using the opportunity cost, the other points can be derived. For example, in country A, if 2 movies are sacrificed to produce 1 automobile, then when automobile production increases from 6 to 7, movie production falls from 12 to 10.
In country B, if 0.6 automobiles are sacrificed to produce 1 movie, then when movie production rises from 8 to 9, automobile production falls from 5 to 4.4. This method can be used to find other points and draw the PPF as has been done :)
Final answer:
Comparative Advantage theory would maximize total production by having each country specialize in the goods they produce efficiently.
Explanation:
Comparative Advantage theory would maximize total production. According to this concept, each country should specialize in producing the good where it has the lowest opportunity cost, leading to increased overall production.
Country A should specialize in producing movies, while Country B should focus on producing automobiles based on their comparative advantage.To draw the production possibilities frontier (PPF), Country A's PPF would show a steeper slope for automobiles, and Country B's PPF would have a steeper slope for movies.Textra Plastics produces parts for a variety of small machine manufacturers. Most products go through two operations, molding and trimming, before they are ready for packaging. Expected costs and activities for the molding department and for the trimming department for 2017 follow. Molding Trimming Direct labor hours 45,000 DLH 48,000 DLH Machine hours 37,500 MH 3,500 MH Overhead costs $ 740,000 $ 610,000 Data for two special order parts to be manufactured by the company in 2017 follow. Part A27C Part X82B Number of units 9,800 units 51,500 units Machine hours Molding 6,200 MH 1,240 MH Trimming 2,400 MH 600 MH Direct labor hours Molding 4,000 DLH 2,150 DLH Trimming 1,100 DLH 5,500 DLH Required 1. Compute the plantwide overhead rate using direct labor hours as the base. 2. Determine the overhead cost assigned to each product line using the plantwide rate computed in requirement 1.
Answer:
1. $14,52 per direct labor hour
2. Overheads Assigned
Part A27C = $89,367
Part X82B =$95,832
Explanation:
The plantwide overhead rate is the absorption rate calculated on the entity`s to total overheads and total activity.
plantwide overhead rate = Budgeted Overheads / Budgeted Activity
= ($ 740,000 + $ 610,000) / (45,000+48,000)
= $14,52 per direct labor hour
Part A27C
Molding department (4,000× $14,52) = $58,080
Trimming department(2,150× $14,52) = $31,287
Total = $89,367
Part X82B
Molding department (1,100× $14,52) = $ 15,972
Trimming department (5,500× $14,52) = $79,860
Total = $95832
On January 1, 2019, Shay Company issues $400,000 of 10%, 12-year bonds. The bonds sell for $391,000. Six years later, on January 1, 2025, Shay retires these bonds by buying them on the open market for $419,000. All interest is accounted for and paid through December 31, 2024, the day before the purchase. The straight-line method is used to amortize any bond discount. 1. What is the amount of the discount on the bonds at issuance
Answer:
$9,000
Explanation:
The computation of the amount of the discount on the bonds at issuance is shown below:
= Par value of the bond - issued price of the bond
= $400,000 - $391,000
= $9,000
By deducting the issued price of the bond from the par value of the bond we can get the discount amount on issuance of the bond and the same is applied above
Final answer:
The discount on the bonds at issuance is the difference between their face value and the sale price, which is $9,000. The present value of future bond payments can be calculated using a discount rate, and the bond's price will usually decrease if market interest rates rise above the bond's interest rate.
Explanation:
The amount of the discount on the bonds at issuance is the difference between the face value of the bonds and the amount they sold for. In this case, Shay Company issued $400,000 of bonds but sold them for $391,000. Therefore, the discount on the bonds at issuance is $400,000 - $391,000 = $9,000.
Calculating the Bond's Present Value
To calculate the present value of a bond, you can look at the stream of payments being received from the bond in the future and determine what they are worth in present discounted value terms. For instance, a two-year bond issued for $3,000 with an 8% interest rate will pay $240 in interest each year. Using a discount rate of 8%, you can find the present value of those future payments using the present value formula.
Bond Price with Market Interest Rate Changes
If the market interest rate increases, the bond's price will typically decrease because the bond's fixed interest payments are less attractive compared to the new higher interest rate. If we have a $1,000 bond with one year remaining that pays $80 (8% of $1,000) in interest, and the market interest rate is 12%, you wouldn't pay more than the present value of the future payments discounted at the new market rate. To be indifferent between the bond and an alternative investment, you'd pay no more than $964, because that amount invested at 12% would grow to $1,080 in one year.
Glinda opens a magic shop and, on Jan. 14, 2011 contracted with Fiyero to supply her with potions that can change someone's skin color. The contract stated that Fiyero, the sole supplier of the potions will sell them to Glinda exclusively so that she can advertise that only her shop sells the potions. Three years into the contract, Jan. 17, 2014, Glinda discovered that an online retailer is selling identical Fiyero potions for a lower price. Determine the likely outcome when Glinda sues Fiyero for breach of contract. In their jurisdiction, the applicable statute of limitations for breach of contract is two years. Glinda filed suit on Feb. 22, 2014.
Final answer:
The likely outcome of Glinda's lawsuit against Fiyero for breach of contract will depend on the specifics of the breach, the terms of their agreement, and the statute of limitations. The outcome will be influenced by whether the breach occurred within the two-year statutory period before filing the suit and whether the jurisdiction applies a discovery rule.
Explanation:
When Glinda sues Fiyero for breach of contract, the likely outcome is influenced by the specifics of the breach and the terms of the contract, as well as the statute of limitations governing such cases. Glinda's contract with Fiyero had an exclusivity clause, meaning Fiyero was obliged not to sell the potions to anyone else. Discovering that an online retailer was selling the same potions could indeed constitute a breach of contract, if Fiyero supplied them in violation of their agreement. However, one crucial aspect here is the statute of limitations, which in this case is two years for breach of contract claims.
Since Glinda discovered the breach on Jan. 17, 2014, and filed suit on Feb. 22, 2014, the lawsuit is within the statutory period if we consider the date of discovery as the starting point. But if the actual breach (when the potions were first sold to the retailer) occurred more than two years before she filed suit, the statute of limitations could bar her claim, assuming the jurisdiction follows a discovery rule that allows the period to begin when the breach was discovered. Courts will consider the timing of the discovery and the filing in relation to the statute of limitations.
Suzanne, Kyle, and Monique have been arguing for days over how they are going to divide up the responsibilities for their group project. They finally arrive at a consensus after their instructor tells them they need to make a decision. What phase of group-decision making are they in?
Answer:
Emergence.
Explanation:
In this context, it can be said that Suzanne, Kyle and Monique are in the emergence phase of group decision making.
This phase occurs right after the conflict phase, in the emergence phase the ideas will be finally defined and there will be a consensus among the team.
At this stage it is common for the individual interests and needs of the team members to be set aside in favor of the team's interests.
Therefore, project members also tend to adopt a more softening stance and opinions with the intention of not appearing dominant in relation to the project.
After recording depreciation for the current year, Media Mania Incorporated decided to discontinue using its printing equipment. The equipment had cost $752,000, accumulated depreciation was $554,000, and its fair value (based on estimated future cash flows from selling the equipment) was $52,000.
Determine whether the equipment is impaired.
Prepare the journal entries to record the impairment in asset if any.
Record the entry to remove accumulated depreciation.
Record the impairment loss.
Answer:
1. the printing equipment is Impaired
2. Journal
Impairement Loss $146,000 (debit)
Accumulated Impairement Loss $146,000 (credit)
3. Journal
Accumulated Depreciation $554,000 (debit)
Accumulated Impairement Loss $146,000 (debit)
Printing Equipment (credit) $700,000
Explanation:
Impairement Loss (IAS 36) happens when the Carrying Amount of an Asset Exceeds its Recoverable Amount.
Carrying Amount Calculation
Carrying Amount = Cost - Accumulated Depreciation
= $752,000 - $554,000
= $198,000
Recoverable Amount Determination
Recoverable amount of an asset is the Higher of :
Value in Use orFair Value Less Cost to SellOnly the fair value is provided, hence Recoverable amount is $52,000
Analysis for Impairment loss
Carrying Amount $198,000 > Recoverable amount $52,000
Therefore the printing equipment is Impaired
Impairement Loss $146,000 (debit)
Accumulated Impairement Loss $146,000 (credit)
Paola Farms, Inc. produces a crop of chickens at a total cost of $66,000. The production generates 60,000 chickens which can be sold for $1 each to a slaughtering company, or the chickens can be slaughtered in house and then sold for $2.75 each. It costs $65,000 more to turn the annual chicken crop into chicken meat. If Paola Farms slaughters the chickens, determine how much incremental profit or loss it would report.
Answer: $40,000 incremental profit
Explanation:
Total Revenue if they sell the chickens as is to a slaughter house is,
= 60,000 * 1
= $60,000
If they decide to slaughter the chickens themselves then we have the following revenue
= 2.75 (selling price) * 60,000 chickens - 65,000 ( cost to turn into meat)
= $100,000
That's the profit if they process further. To get the Incremental Profit we subtract the profit if they just sell to the Slaughter house.
= 100,000 - 60,000
= $40,000
The Incremental profit if Paola Slaughters chickens is, $40,000
Final answer:
Paola Farms would report an incremental profit of $34,000 by slaughtering the chickens in-house, which is calculated by subtracting the combined costs of initial production and additional slaughtering from the revenue obtained after slaughtering.
Explanation:
To calculate the incremental profit or loss that Paola Farms would report if they decide to slaughter their chickens in-house, we first need to measure the additional revenue against the additional costs incurred from slaughtering.
If Paola Farms sells the chickens without slaughtering, they will make $60,000 in revenue (60,000 chickens at $1 each). If they decide to slaughter the chickens in-house, they can sell them for $2.75 each, resulting in total revenue of $165,000 (60,000 chickens at $2.75 each).
The extra cost to slaughter the chickens is $65,000. Therefore, we need to subtract the initial production cost of $66,000 and the additional slaughtering cost from the total revenue after the slaughter process:
Incremental Profit = Revenue from slaughtering - (Initial production cost + Additional slaughtering cost)
Incremental Profit = $165,000 - ($66,000 + $65,000) = $34,000
Hence, by slaughtering the chickens in-house, Paola Farms would report an incremental profit of $34,000.
Prepare a schedule in good form showing the required additions to the sinking fund, the expected semiannual earnings, and the end-of-period balance in the sinking fund for each of the 10 semiannual periods. (Note: The future amount of an ordinary annuity of $1 for 10 periods at 3 percent per period is 11.46387931.) (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)
Question:
The question is incomplete. Below is the complete question and the answer.
On July 1, 2016, the first day of its 2017 fiscal year, the City of Nevin issued at par $2,000,000 of 6 percent term bonds to construct a new city office building. The bonds mature in five years on July 1, 2021. Interest is payable semiannually on January 1 and July 1. A sinking fund is to be established with equal semiannual additions made on June 30 and December 31, with the first addition to be made on December 31, 2016. Cash for the sinking fund additions and the semiannual interest payments will be transferred from the General Fund shortly before the due dates. City officials assume a yield on sinking fund investments of 6 percent per annum, compounded semiannually. Investment earnings are added to the investment principal.
Prepare a schedule in good form showing the required additions to the sinking fund, the expected semiannual earnings, and the end-of-period balance in the sinking fund for each of the 10 semiannual periods. (Note: The future amount of an ordinary annuity of $1 for 10 periods at 3 percent per period is 11.4638793.)
Explanation:
Fiscal Period Required Expected Ending
Year Additions Earnings Balance
2016 1 $174,461.01 0 $174,461.01
2 $174,461.01 $5,233.83 $354,155.86
2017 3 $174,461.01 $10,624.68 $539,241.55
4 $174,461.01 $16,177.25 $729,879.81
2018 5 $174,461.01 $21,896.39 $926,237.21
6 $174,461.01 $27,787.12 $1,128,485.34
2019 7 $174,461.01 $33,854.56 $1,336,800.92
8 $174,461.01 $40,104.03 $1,551,365.96
2020 9 $174,461.01 $46,540.98 $1,772,367.95
10 $174,461.01 $53,171.04 $2,000,000
The calculation for the above journal is given as;
Required Addition =
Bond value/future amount of ordinary annuity at 3% per period
Required Addition = 2,000,000/11.4638793
= $174,461.01 ( for 10 period)
Expected Earnings = Ending bal. x 3%
= $174,461.01 *3%
= $5,233.83 (for 2017).
Note: For the remaining period, the expected earning is calculated the same way as above.
Ending Balance = Previous ending bal. + Required additions + expected earnings
= $174,461.01 + $174,461.01 + $5,233.83
= $354,155.86 ( for year 2017)
Do same for the remaining years.