0.4 cross price elasticity of demand means that there is direct effect of change of price of wool socks on the demand of shaved ice but they are not very closely related to each other.
Explanation:
Cross Price elasticity of demand is the concept in Economics which focuses on the effect of change of price of one good leading to the change of the demand of the other good, but in this matter, the other things have to kept the same which is also known as ceteris paribus.
For example when the price of coffee increases, the demand of tea will increase because the people will start preferring to have tea because of the increase in the price of coffee.
If the price of good X increases by 2%, and that causes the quantity demanded of good Y to increase by 10%, then the cross-price elasticity of demand for good Y, with respect to the price of good X, is ________ ,and the two goods are _______.
Answer:
The cross elasticity of good X 5%, divide 10% of change in demand from the 2% of price increase in good Y.
The two goods are SUBSTITUTE Goods.
Explanation:
In substitute goods, when the price of one good increases, people start using less of that good and move onto use cheaper other goods that can be used instead of that good.
Suppose a typical automobile tire cost $50 in the base year and had a useful life of 40,000miles. Ten years later, the typical automobile tire cost $75 and had a useful life of 75,000 miles. If no adjustment is made for mileage, the CPI would *
Answer:
Overestimate inflation between the two years.
Explanation:
If there is an increase in the cost of automobile tire and no adjustment is made in the mileage, and then CPI would be overestimated between the two years. This is because as there is no improvement in mileage and hence it is estimated that there is no increase in variable costs in the process of improving the quality.
Therefore, the correct answer is overestimate inflation between the two years.
Retirement savings
A couple thinking about retirement decides to put aside $3,000 each year in a savings plan that earns 8% interest. In 5 years, they will receive a gift of $10,000 that also can be invested.
a. How much money will they have accumulated 30 years from now?
b. If the goal is to retire with $800,000 savings, how much extra do they need to save every year?
Answer:
a. $408,334.39
b. $3,457.40
Explanation:
r = rate per period = 8% = 0.08
P = Initial Value of Gift = $10,000
t = time = 30 - 5 = 25, As received after 5 years.
[tex]A = P (1 + r)^{t}[/tex]
[tex]A = $10,000 (1 + 0.08)^{25}[/tex]
[tex]A = $10,000 x 1.08^{25}[/tex]
A = $10,000 x 6.8485
A = $68,484.75
[tex]FV of annuity = P [\frac{(1 + r)^{n} - 1}{r} ][/tex]
P = Periodic Payment = $3,000
a.
n = number of periods = 30
[tex]FV of annuity = 3,000 [\frac{(1 + 0.08)^{30} - 1}{0.08} ][/tex]
[tex]FV of annuity = 3,000 [\frac{(1.08)^{30} - 1}{0.08} ][/tex]
[tex]FV of annuity = 3,000 [\frac{10.0627 - 1} {0.08} ][/tex]
[tex]FV of annuity = 3,000 [\frac{9.0627} {0.08} ][/tex]
FV of annuity = $3,000 x 113.2832
FV of annuity = $339,849.63
Accumulated value of money can be calculated as follows;
$68,484.75 + $339,849.63
$408,334.39
b.
If they wish to retire with $800,000 savings, they need to save additional amount of money every year to provide additional amount of money, as follows;
$800,000 - $68,484.75
$731,515.24
The extra annual savings can be calculated as follows;
[tex]731,515.24 = P [\frac{(1 + 0.08)^{30} - 1 }{0.08} ][/tex]
$731,515.24 = P x 113.28
Divide the above equation by 113.28 we get;
[tex]P = \frac{731,515.24}{113.28}[/tex]
P = $6,457.40
They are already paying $3,000, So the extra saving they need make every year is calculated as follows;
$6,457.40 - $3,000
$3,457.40
Barbara Muller Services (BMS) pays its employees monthly. The payroll information listed below is for January 2018, the first month of BMS's fiscal year. Assume none of the employees' earnings reached $7,000 during the month. Salaries $ 80,000 Federal income taxes to be withheld 16,000 Federal unemployment tax rate 0.80 % State unemployment tax rate (after FUTA deduction) 5.40 % Social security tax rate 6.2 % Medicare tax rate 1.45 % The journal entry to record payroll for the January 2018 pay period will include a debit to payroll tax expense of:
Answer:
$13,296
Explanation:
Federal unemployment tax rate = 0.8% of 96,000 = 768
State unemployement tax rate = 5.4% of 96,000 = 5,184
Social security tax rate+medicare tax rate = 6.2%+1.45% = 7.65%
7.65% of 96,000 = 7,344
So total tax expense = 768+5,184+7,344 = $13,296
So answer is $13,296
A manufacturing firm has discontinued the production of a certain unprofitable product line. Considerable excess production capacity was created as a result. Management is considering devoting this excess capacity to one or more of three products: X1, X2, and X3. Machine hours required per unit are: PRODUCT MACHINE TYPE X1 X2 X3Milling machine 8 2 3Lathe 4 3 0Grinder 2 0 1The available time in machine hours per week isMACHINE HOURS PER WEEKMilling machines 800Lathes 480Grinders 320The salespeople estimate they can sell all the units of X1 and X2 that can be made, But the sales potential of X3 is 80 units per week maximum.Unit profits for the three products are $20 (for X1), $6 (for X2), and $8 (for X3).Required:(a) Write the mathematical formulation to maximize the profit per week (Decision variables: Production amount of X1, X2, and X3).(b) Solve the mathematical formulation using Excel Solver. Show your work.(c) What is the optimal solution?
Answer:
Please kindly check explaination for the details.
Explanation:
a.
Decision variables:
Let
X1 = no of units of product X1
X2 = no of units of product X2
X3 = no of units of product X3
Objective function is to maximize profits
Max Z = 20X1 + 6X2 + 8X3
Constraints:
8X1 + 2X2 + 3X3 <= 800
4X1 + 3X2 <= 480
2X1 + X3 <= 320
X1, X2, X3>=0
b.
please see attachment for the excel solutions.
c.
X1 = 0
X2 = 160
X3 = 160
Z = 2240
Suppose the current level of output is 5000 and the elasticity of output with respect to capital is 0.4. A 10% increase in capital would increase the current level of output to ___________.
A) 5020
B) 5050
C) 5200
D) 5500
Final answer:
A 10% increase in capital, based on an elasticity of 0.4, results in a 4% increase in output. The new output level is calculated to be 5200 after factoring in the increase from the initial 5000 output.
Explanation:
The question asks for the calculation of a new level of output based on the elasticity of output with respect to capital. The output elasticity coefficient is given as 0.4, and we are told that there is a 10% increase in the capital. Using these figures, we can calculate the percentage increase in output and then apply it to the initial output level.
To calculate the increase, we use the formula for elasticity: percentage change in output = elasticity × percentage change in capital. Hence, the percentage increase in output is 0.4 (elasticity) × 10% (increase in capital) = 4%. To find the new level of output, we add the 4% increase to the original output:
5000 + (4% of 5000) = 5000 + 200 = 5200.
Therefore, a 10% increase in capital would increase the current level of output to 5200.
A company has got $500 in cash and cash equivalents, $300 in inventory and $200 in account receivables. The firm has long term assets of $500. The firm has accounts payables of $200. All other current liabilities total $400. The firm had sales of $10000, EBIT of $5000, interest expenses of $2000 and net income of $800.
Compute the following ratios:
Current ratio, Debt Ratio, TIE, profit margin, total asset turnover.
Answer:
The computation is shown below:
Explanation:
The computation is shown below:
Current ratio = current assets ÷ current liabilities
where,
Current assets = cash + inventory + account receivables
= $500 + $300 + $200
= $1000
Current liabilities is
= $200 + $400
= $600
So, the current ratio is
= $1,000 ÷ 600
= 1.67 times
Debt Ratio is
= Total Liabilities ÷ Total Assets
= $600 ÷ $1,500
= 40%
TIE is Time Interest Earned ratio
= EBIT ÷ Interest Expense
= $5,000 ÷ $2,000
= 2.5
Profit margin is
= Net Income ÷ Total Sales
= $800 ÷$10,000
= 8%
And,
Total asset turnover is
= Sales ÷ Total Assets
= $10,000 ÷ $1,500
= 6.67
The examined financial ratios given the company's specifics are as follows: Current Ratio is 1.67, Debt Ratio is 0.4, TIE is 2.5, Profit Margin is 8%, and Total Asset Turnover is 6.67.
Explanation:Given data allows us to calculate several important financial ratios.
Current Ratio is calculated as Current Assets / Current Liabilities. Here, current assets ($500 cash + $300 inventory + $200 account receivables = $1000) and current liabilities ($200 account payables + $400 other current liabilities = $600). So, Current Ratio = 1000 / 600 = 1.67.Debt Ratio is calculated as Total Debt/Total Assets. Here, Total Assets = Current Assets + Long term assets, which equals to $1000 + $500 = $1500. Total Debt is the same as total liabilities = $600. So, Debt Ratio = 600 / 1500 = 0.4.TIE (Times Interest Earned) ratio is calculated as EBIT / Interest Expenses, which is 5000/2000= 2.5.Profit Margin is calculated as Net Income / Sales, equaling 800 / 10000 = 0.08 or 8%.Total Asset Turnover is calculated as Sales / Total Assets, which comes out as 10000 / 1500 = 6.67.Learn more about Financial Ratios here:https://brainly.com/question/31531442
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Which of the following are reported at fair value except trading securities: a) held-to-maturity securities b) available-for-sale securities c) all of these options are reported at fair value.
Answer:
B. Available for sale securities
Explanation:
Available for sale securities refer to debt or equity instrument. They are purchased with a pre defined aim of selling them before their maturity, for profit earning. Such profit is usually a 'quick capital gain'. Apart from profit, they also assist for liquidity, repaying needs of companies.
These equities are reported at 'fair value'. This implies that unrealised gains & losses are not included in earnings. They are rather recorded in a specific segregated item head 'accumulated other comprehensive income' of shareholder's equity.
Granite Company purchased a machine costing $132,000, terms 1/10, n/30. The machine was shipped FOB shipping point and freight charges were $3,200. The machine requires special mounting and wiring connections costing $11,200. When installing the machine, $2,700 in damages occurred. Compute the cost recorded for this machine assuming Granite paid within the discount period.
Granite Company purchased a machine costing $132,000, terms 1/10, n/30. The machine was shipped FOB shipping point and freight charges were $3,200. The machine requires special mounting and wiring connections costing $11,200. When installing the machine, $2,700 in damages occurred.The Total cost recorded to get the ready to use: $ 147,780
Explanation:
From the above question we get the following information
Equipment cost: 132,000 x (1 - 1%) = 130,680
shipping cost: 3,200
special wiring connections 11,200
installation cost 2,700
Total cost to get the machinery ready to use: $ 147,780
It is important to note that the cost incurred to get the equipment ready for usage and production must be included while calculating the equipment cost.
) Healthy Living, a diet magazine, collected $240,000 in subscription revenue on May 31. Each subscriber will receive an issue of the magazine in each of the next 12 months, beginning with the June issue. The company uses the accrual method of accounting. What is the amount of Subscription Revenue that has been earned by the end of December
Answer:
$140,000
Explanation:
$240,000*7/12= $140,000
The journal entry to record accrual of subscription will be as follows;
Unearned Subscription Income Dr.$140,000
Subscription Income Cr.&140,000
The entry made at time of receipt of subscription was;
Bank Dr.$240,000
Unearned Subscription income Cr.$240,000
During the most recent month, the following activity was recorded: a. Eleven thousand two hundred pounds of material were purchased at a cost of $2.90 per pound. b. The company produced only 1,120 units, using 10,080 pounds of material. (The rest of the material purchased remained in raw materials inventory.) c. Five hundred and forty eight hours of direct labor time were recorded at a total labor cost of $6,576.
Complete question:
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below:
Standard Quantity or Hours Standard Price or Rate Standard Cost
Direct materials 4.6 pounds $ 2.50 per pound $ 11.50
Direct labor 0.2 hours $ 12.00 per hour $ 2.40
During the most recent month, the following activity was recorded:
a. Eleven thousand two hundred pounds of material were purchased at a cost of $2.90 per pound.
b. The company produced only 1,120 units, using 10,080 pounds of material. (The rest of the material purchased remained in raw materials inventory.)
c. Five hundred and forty eight hours of direct labor time were recorded at a total labor cost of $6,576.
Solution:
Direct Material price Variance
= (Actual Price - Standard price) x Actual Quantity
= ($2.90 - $2.50) x 10,080 = $4032 (F)
Standard Quantity = 1,120 x 4.6 = 5,152 pounds
Direct Material Quantity Variance
= (Actual Quantity - Standard Quantity) x Standard Price
= (10,080 - 5,152 ) x $2.50 = $12,320 (U)
E21A1. (Lessee Entries; Finance Lease with No Residual Value) (LO 1, 4) DU Journeys enters into an agreement with Traveler Inc. to lease a car on December 31, 2016. The following information relates to this agreement. 1.The term of the noncancelable lease is 3 years with no renewal or bargain purchase option. The remaining economic life of the car is 3 years, and it is expected to have no residual value at the end of the lease term. 2.The fair value of the car was $15,000 at commencement of the lease. 3.Annual payments are required to be made on December 31 at the end of each year of the lease, beginning December 31, 2017. The first payment is to be of an amount of $5,552.82, with each payment increasing by a constant rate of 5% from the previous payment (i.e., the second payment will be $5,830.46 and the third and final payment will be $6,121.98). 4.DU Journeys' incremental borrowing rate is 8%. The rate implicit in the lease is unknown. 5.DU Journeys uses straightline depreciation for all similar cars. Instructions (a) Prepare DU Journeys' journal entries for 2016, 2017, and 2018. (b) Assume, instead of a constant rate of increase, the annual lease payments will increase according to the Consumer Price Index (CPI). At its current level, the CPI stipulates that the first rental payment should be $5,820. What would be the impact on the journal entries made by DU Journeys at commencement of the lease, as well as for subsequent years?
Answer:
(a) Prepare DU Journeys' journal entries for 2016, 2017, and 2018.
Date Account Title and Explanation Debit($) Credit($)
31/12/2016 Right of Use asset 15,000
Lease Liability 15,000
(to record lease of asset)
31/12/2017 Interest Expense 1,200
Lease Liability 4,352.82
Cash 5,552.82
(to record interest expense and lease payment)
31/12/2017 Amortization Expense 5,000
Right of use Asset 5,000
(to record amortization expense for right of use asset)
31/12/2018 Interest Expense 851.77
Lease Liability 4,978.69
Cash 5,830.46
(to record interest expense and lease payment)
31/12/2018 Amortization Expense 5,000
Right of use Asset 5,000
(to record amortization expense for right of use asset)
Date: 31/12/2016
Annual Payment: -
Interest Expense: -
Reduction of Lease Liability: -
Lease Liability: $15,000
Depreciation Expense: -
Date: 31/12/2017
Annual Payment: $5,552.82
Interest Expense: $1,200
Reduction of Lease Liability: 4352.82
Lease Liability: 10647.18
Depreciation Expense: $5,000
Date: 31/12/2018
Annual Payment: $5,830.46
Interest Expense: 851.7744
Reduction of Lease Liability: 4978.6856
Lease Liability: -44331.5056
Depreciation Expense: $5,000
Date: 31/12/2019
Annual Payment: $6,121.98
Interest Expense: -3546.520448
Reduction of Lease Liability: - 44331.5056
Lease Liability: 0
Depreciation Expense: $5,000
(b) Consumer Price index means: book the same amount year to year for payment. The increase in CPI may be booked as an expense when incurred.
The journal entries for DU Journeys' lease agreement pertain to recognizing the leased asset and liability, accounting for lease payments, interest expense, and depreciation. If payments were tied to CPI, they would be variable and changes would be accounted for in profit or loss in the period of the change.
Explanation:Based on the details of the problem, it seems we have a matter of accounting for a finance lease agreement with DU Journeys as the lessee. This question falls under the scope of financial accounting, more specially lease accounting. The calculations and entries would change if lease payments were tied to CPI, which would then mean that lease payments are variable and not fixed as in the given scenario.
For the year 2016, the first entry would be to record the right to use the leased car. On December 31, 2016, DU Journeys would debit 'Leased Vehicles' for $15,000 representing the fair value of the vehicle or leased asset, and Credit 'Obligation under Finance Lease' for $15,000. This establishes the initial recognition of the leased asset and the liability. For subsequent years 2017 and 2018, DU Journeys will need to make entries for lease payments, interest expense, and depreciation. However, without a clear understanding of the context and connections to the numbers and tables presented, more specific entries couldn't be made.
If instead, the annual lease payments were tied to CPI, it would be considered a variable lease payment. If lease payments are variable (i.e., tied to an index or rate such as CPI), then changes in lease payments due to changes in the index or rates are accounted for in profit or loss in the period of the change. Thus, the payments would not be included in the initial measurement of the lease liability and right-of-use asset, affecting the numbers DU Journeys would record.
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An audience is first asked to write the last 2 digits of their social security number, and, second, to submit mock bids on items such as wine and chocolate. The half of the audience with higher two-digit numbers would submit bids that were between 60 percent and 120 percent higher than those of the other half. This is an example of:
Answer: Anchoring bias
Explanation: Anchoring bias is described as the tendency to focus on one value or idea known as the “anchor” and not adjust away from it sufficiently (the simple act of thinking of the first number strongly influences the second, even though there is no logical connection between them); It is also defined as the tendency of people to place subsequently refined answers to a given question close to the initially estimated answer, giving unduly weight to the initial answer, such as adjusting the initial estimate of 10% to 20% when 90% would have been more appropriate.
Some examples of anchors might include: real estate listing prices, initial cost estimates for development projects, salary of your last job etc.
The City of Tutland issued $10 million, 6 percent, 10-year bonds at 101 to finance refurbishment of its water utility fund equipment. The bond is suance is reported in the water utility enterprise fund statement of cash flows as
a. A cash flow from operating activities.
b. A cash flow from noncapital financing activities.
c. A cash flow from capital and related financing activities.
d. A cash flow from investing activities.
Answer:
b. A cash Flow from non capital financing activity
Explanation:
It is a cash flow from non capital financing activity since no shares have been issued thus option c. is not applicable
The City of Tutland has obtained financing, so it is not cash generated from operating activities.
This transaction is also not an investing activity since this is as source if fund and no long term assets are procured in this transaction
Answer: c. A cash flow from capital and related financing activities
Explanation:
It is Cash flow from Capital and financing related activities because first of all, the funds are to be used to refurbish of the Town's water utility fund equipment which is a Capital Expense.
Also it relates to the raising of funds on the capital market which goes into the Finance portion of the Cash Flow statement.
With these considerations in mind, the activity will be recorded as a cash flow from capital and related financing activities.
If you need any clarification do react or comment.
Preparing an Accounts Payable Schedule Pilsner Inc. purchases raw materials on account for use in production. The direct materials purchases budget shows the following expected purchases on account: April $374,400 May 411,200 June 416,000 Pilsner typically pays 25% on account in the month of billing and 75% the next month.Required: 1. How much cash is required for payments on account in May?
2. How much cash is expected for payments on account in June?
Answer:
1. $383 300 is due for the month of May.
2. $412 400 is due for the month of June
Explanation:
1. May = ($374000 * 75% from April purchases) + ($411 200 * 25% from May purchases)
= $280 500 + $102 800
= $383 300 is due for the month of May
2. June = ($411 200 * 75% from May purchases) + ($416 000 * 25% from June purchases)
= $308 400 + $104 000
= $412 400 is due for the month of June
Answer:
1. Cash required for payment in May - $383,600
2. Cash expected for payment in June - $412,400
Explanation:
Payments are made in two parts for the purchase of direct materials. From which 25% is being paid in the same month as bill and remainder (75%) in the next month. Therefore, the cash required for May would be calculated as follows:
$411,200 x 25% = $102,800 (Payment made same month)
$374,400 x 75% = $280,800 (Payment for the previous month, April)
Cash Required for payment in May is $383,600 ($102,800 + $280,800)
Cash expected for payments for June would be as follows:
$416,000 x 25% = $104,000 (Payment made same month)
$411,200 x 75% = $308,400 (Payment for the previous month, May)
Cash Expected for payment in June is $412,400 ($104,000 + $308,400)
A customer buying a personal computer defines the types of disk drives, modem, memory configurations, and types of hardware when buying the product. Thus, the personal computer is an example of a _____ product.
Answer: option oriented
Explanation: By specifying the types of disk drives, modem, memory configurations, and types of hardware when buying a personal computer, the customer is engaged in an option oriented buying. The personal computer therefore is an example of an option-oriented product. An option-oriented product is defined as one in which configurations of standard parts can be selected by customers from a set of varying options. Such products are usually produced in flow-shop settings.
Answer:
The correct answer is letter "B": option-oriented.
Explanation:
Option-oriented products are those characterized for featuring certain characteristics that are not provided in regular mass-produced items. This is done to meet the needs of more demanding customers who look for goods that fit their personal use. These items are mostly manufactured by demand instead of mass-production.
Match the following terms to their definition: 1. expected value 2. liquidity 3. fixed assets 4. point of sales terminals 5. self-liquidating assets 6. trade credit 7. level production Rank the options below. Assets that are assumed to be long-term in nature. Assets that are assumed to be long-term in nature. Open choices for matching Assets that are converted into
Answer:
1.A representative quantity from a probability distribution arrived at by multiplying each outcome times the associated probability and summing up the products.
2.The relative convertibility of short-term assets to cash.
3.Assets that are assumed to be long term in nature.
4. Computer terminals in retail stores that may be used for inventory control or other purposes.
5. Assets that are converted to cash within the normal operating cycle of the firm.
6.Financing provided by sellers or suppliers in the normal course of business.
7.Equal monthly production used to smooth out production schedules and employ manpower and equipment more efficiently.
Explanation:
Chu Company provided the following information related to its inventory sales and purchases for December Year 1 and the first quarter of Year 2:
Dec. Year 1 Jan. Year 2 Feb. Year 2 Mar. Year 2
(Actual) (Budgeted) (Budgeted) (Budgeted)
Cost of goods sold $ 50,000 $ 80,000 $ 100,000 $ 70,000
Desired ending inventory levels are 35% of the following month's projected cost of goods sold. Budgeted purchases of inventory in February Year 2 would be:
Answer:
$89,500
Explanation:
The computation Budgeted purchases of inventory is shown below:-
February,opening inventory = $100,000 × 35%
= $35,000
Ending inventory = $70,000 × 35%
= $24,500
Cost of goods sold = Opening inventory + Purchase - Ending inventory
= $100,000 = $35,000 + Purchase - $24,500
Purchase = $89,500
Therefore for computing the purchase inventory we simply applied the above formula.
The average number of different products offered in each product line (also called assortment) ...is known as the ___________________. Examples: Procter & Gamble markets three brands of deodorants: Old Spice, Secret, and Sure
Answer:
The correct word for the blank space is: Depth of Product Mix.
Explanation:
A product mix represents the combination of product lines a company manufactures. The product mix has four (4) characteristics: width, length, depth, and consistency. The depth of the product mix refers to the diversity of each good in a product mix has. That diversity implies talking about the sizes, flavors, odors, presentations, or any other particular feature that the same product has.
Final answer:
The average number of different products in each product line, known as assortment, is a key concept in business, affecting the availability of variety for consumers in a monopolistically competitive market.
Explanation:
The average number of different products offered in each product line, also known as assortment, is an important concept in the field of business, particularly in marketing and consumer behavior.
In the context of monopolistic competition, product assortment becomes a significant factor as it relates to the degree of variety available to consumers. When a company, like Procter & Gamble, offers multiple brands of a product such as deodorants (\
Define project cost terms and tell how each is used in estimating project cost. Compare and contrast analogous, parametric, and bottom-up methods of estimating costs. Describe issues in project cost estimating and how to deal with each.
Answer:
The project cost is a cost required to procure all the needed products, services and resources to deliver the project successfully.
Explanation:
Analogous estimation: involves comparing a past similar project to your current project and the use of analogy to estimate cost.
Parametric Estimation: This estimation uses the historical data based on the real data and saves lots of time to calculate the cost estimation.
Bottom-up approach: also called definitive technique breaks up all activities of the project to the micro level in order to conduct comprehensive cost estimation.
The issues in project cost estimation include cost overruns, inefficiencies and project surprise. To effectively mitigated them, Bottom-up approach should be applied. It is an expensive but very reliable method.
Suppose the CPI was 140 last year and is 168 this year. a. What is this year’s rate of inflation? Instructions: Enter your response as a percentage rounded to one decimal place. Use a minus sign if necessary. b. In contrast, suppose that the CPI was 140 last year and is 134 this year. What is this year’s rate of inflation? c. What term do economists use to describe this second outcome?
Answer:
a) Inflation = = 20%
b) Inflation = -4.3
c) Deflation
Explanation:
The rate of change in the consumer price index is used to measure the movement in price level . An increase in the price level is termed inflation and a decrease is termed deflation.
a)
Inflation =( Current CPA/previous CPI) -1 × 100
= (168/140) - 1 × 100
= 20%
b)
Inflation = (134-140)/140 × 1 = -4.3%
c) The second outcome is called deflation
The answer provides calculations for the rates of inflation in two scenarios and explains the term economists use for the second outcome.
a. What is this year’s rate of inflation?
Calculation: Rate of Inflation = ((CPI This Year - CPI Last Year) / CPI Last Year) x 100Rate of Inflation = ((168 - 140) / 140) x 100 = 20%b. What is this year’s rate of inflation?
Calculation: Rate of Inflation = ((CPI This Year - CPI Last Year) / CPI Last Year) x 100Rate of Inflation = ((134 - 140) / 140) x 100 = -4.3%c. What term do economists use to describe this second outcome?
Deflationg "Your Company sells goods to customers for $1,200 cash. You also collect sales taxes of $96. The journal entry to record this transaction is: Group of answer choices
DR Sales Tax Payable $96; CR Cash $96.
DR Cash of 1,296 ; CR Revenue $1200 ; CR Sales Tax Payable $96
DR Cash $1,296; CR Revenue $1,296.
DR Cash of $1,296 ; CR Revenue $1,200 ; CR Sales Tax Expense $96."
Answer: DR Cash of 1,296 ; CR Revenue $1200 ; CR Sales Tax Payable $96
Explanation:
When accounting for taxes paid on revenue, you must account for them separately.
You add the tax to the sales and DEBIT it to Cash then you take just the sales figure without the tax and CREDIT Revenue. The tax is sent to the Sales Tax Payable Account as a CREDIT.
An investor took out a loan of 150,000 at 8% compounded quarterly, to be repaid over 10 years with quarterly payments of 5,483.36 at the end of each quarter. After 12 payments, the interest rate dropped to 6% compounded quarterly. The new quarterly payment dropped to 5,134.62. After 20 payments in total, the interest rate on the loan increased to 7% compounded quarterly. The investor decided to make an additional payment of
X at the time of his 20
th payment. After the additional payment was made, the new quarterly payment was calculated to be 4,265.73 payable for 5 more years. Determine X.
Final answer:
To determine the value of X, we need to calculate the remaining balance on the loan after 20 payments and then use that balance to calculate the new quarterly payment. After performing the calculations, X is determined to be $53,724.33.
Explanation:
To determine the value of X, we need to calculate the remaining balance on the loan after 20 payments and then use that balance to calculate the new quarterly payment. Here are the steps:
Calculate the remaining balance after 20 payments:Calculate the present value of the remaining payments using the formula: PV = PMT * ((1 - (1 + r)^(-n)) / r), where PMT is the quarterly payment, r is the interest rate per quarter, and n is the number of remaining payments.Subtract the present value from the initial loan amount to get the remaining balance.Now we know that the remaining balance after 20 payments is $57,990.06.Calculate the new quarterly payment using the same formula:Plug in the remaining balance as the present value, the new interest rate (7% compounded quarterly) as r, and the remaining term (5 years) as n.Now we can solve for the new quarterly payment, which is $4,265.73.Next, subtract the new quarterly payment from the remaining balance to get the amount of the additional payment made at the time of the 20th payment.Therefore, X = $57,990.06 - $4,265.73 = $53,724.33.Check my work Check My Work button is now enabled 1 Item 3 Item 3 2.5 points Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows: Standard Quantity Standard Price or Rate Standard Cost Direct materials 2.60 ounces $ 20.00 per ounce $ 52.00 Direct labor 0.60 hours $ 16.00 per hour 9.60 Variable manufacturing overhead 0.60 hours $ 4.50 per hour 2.70 $ 64.30 During November, the following activity was recorded relative to production of Fludex: a. Materials purchased, 13,000 ounces at a cost of $244,400. b. There was no beginning inventory of materials; however, at the end of the month, 3,300 ounces of material remained in ending inventory. c. The company employs 20 lab technicians to work on the production of Fludex. During November, they worked an average of 150 hours at an average rate of $14.00 per hour. d. Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours. Variable manufacturing overhead costs during November totaled $6,500. e. During November, 3,600 good units of Fludex were produced .
Complete table :
Standard Standard Standard
Quantity Price(or rate) Cost
Direct Materials 2.60 ounces $20.00 per ounce $ 52.00
Direct labor 0.60 hours $16.00 per hours 9.60
Variable manuf 0.60 hours $4.50 per hour 2.70
-acturing Overhead
Total standard cost per unit $64.30
Required:
1) For direct materials:
a) compute the price and quantity variances
b) The materials were purchased from a new supplier who is anxious to enter into a long - term purchase contract, would you recommend that the company sign the contract?
2) For direct labor:
a) Compute the rate and efficiency variances
b) In the past 23 technicians employed in the production of Fludex consists of 4 senior technicians and 19 assistants. During November, the company experimented with fewer senior technicians and more assistants to reduce labor costs, would you recommend that the new labor mix be continued?
3) compute the variable overhead rate and efficiency variances
Answer:
Check below for answer
Explanation:
1a) Standard quantity of material for actual production(SQ) = 3600*2.60 = 9360 ounce
Actual quantity of material purchased = 13000 ounce
Actual quantity of material used(AQ) = 13000 - 3300 = 9700 ounce
Standard price of material(SP) = $20 per ounce
Actual price of material(AP) = $244,400 / 13000 = $18.80
Material price variance = (SP - AP) * AQ purchased = ($20 - $18.80) * 13000 = $15,600 F
Material quantity variance = (AQ - SQ) * SP = (9700 - 9360) * $20 = $6800 U
2a) Standard hours of direct labor = 3600*0.6 = 2160 hours
Standard rate of direct labor(SR) = $16 per hour
Actual hours of direct labor(AH) = 20*150 = 3000 hours
Actual rate of direct labor(AR) = $14 per hour
Direct labor rate variance = (SR - AR) * AH = ($16 - $14) * 3000 = $7,000 F
Direct labor efficiency variance = (AH - SH) * SR = (3000 - 2160) * $16 = $13,440U
2b) If more assistants rather senior technicians are employed, favorable direct labor rate variance will improve but efficiency variance will be unfavorable. Since unfavorable efficiency variance is higher than favorable rate variance, the new labor mix should not be continued.
3) Standard hours of direct labor = 2160 hours
Standard rate of variable overhead= $4.50 per hour
Actual hours of direct labor = 3000
Actual rate of variable overhead = $6500 / 3000 = $2.17 per hour
Variable overhead rate variance = (SR - AR) * AH = ($4.50 - $2.17) * 3000 = 6990 F
Variable overhead efficiency variance = (SH - AH) * SR = (2160 - 3000) * $4.50 = $186.67 U
Mike started a calendar-year business on September 1st of this year by paying 12 months of rent on his shop at $1,450 per month. What is the maximum amount of rent that Mike can deduct this year under each type of accounting method?
Answer:
$4,000 under accural method and $12,000 under cash method.
Explanation:
Monthly rent = $1,000
A) In accural method, Mike can only deduct up to 4 months rent. Revenue is to be recognised on accural basis, not on receipt. ==> 4 x $1,000 ==> $4,000
B) In cash method, Mike can deduct 12 months rent when he applies 12 month concept. ==> 12 x $1,000 ==> $12,000
Answer:
$5,800 under accural method and $17,400 under cash method.
Explanation:
Monthly rent = $1,450
A) In accural method, Mike can only deduct up to 4 months rent. Revenue is to be recognised on accural basis, not on receipt. ==> 4 x $1,450 = $5,800
B) In cash method, Mike can deduct 12 months rent when he applies 12 month concept. ==> 12 x $1,450 ==> $17,800.
Under U.S. GAAP, if the carrying value of a fixed asset was $50,000, the undiscounted expected future cash flows was $55,000, the discounted expected future cash flows was $51,000, and the selling price was $53,000, what is the amount of impairment loss?
Answer:
$0
Explanation:
According to US GAAP the reduction in the value of the asset due to a decrease in the fair value. It means when fair value of the asset is reduced than the book value of the asset.
Amortized Cost / Book value = $50,000
Market Value = $53,000
Discounted Value = $51,000
There is no Impairment loss on this asset as the fair market value is more than the book value of the asset.
Answer:
Nil, asset is not impaired.
Explanation:
An asset is said to be impaired if and only if the carrying amount of the asset is more than the recoverable amount.
The recoverable amount is the higher of the value in use (which is the discounted expected future cash flows) and the fair value less cost to sell.
Recoverable amount = $53,000 (being the higher of the selling price and the discounted expected future cash flow)
Since this is higher than the carrying value of the asset, it is not impaired.
A firm experiences constant returns to scale when _______. A. the LRAC curve is upward sloping B. average total cost does not change when output changes C. the plant the firm uses and the quantity of labor the firm hires remain constant D. the LRAC curve is downward sloping
Answer:
B. average total cost does not change when output changes
Explanation:
A firm can experience increasing or decreasing return to scale and constant return to scale, it depends on various factors from the average total cost to output changes. If a firm experiences constant return to scale it means that the average total cost does not change when output changes. If the average total cost increases that mean increasing return to scale and if it decreases than decreasing return to scale
Adams Corporation began fiscal Year 2 with the following balances in its inventory accounts. Raw Materials $ 54,600 Work in Process 83,400 Finished Goods 27,400 During the accounting period, Adams purchased $239,200 of raw materials and issued $248,600 of materials to the production department. Direct labor costs for the period amounted to $323,000, and manufacturing overhead of $46,300 was applied to Work in Process Inventory. Assume that there was no over- or underapplied overhead. Goods costing $611,700 to produce were completed and transferred to Finished Goods Inventory. Goods costing $601,100 were sold for $800,600 during the period. Selling and administrative expenses amounted to $70,200. Required Determine the ending balance of each of the three inventory accounts that would appear on the year-end balance sheet. Prepare a schedule of cost of goods manufactured and sold and an income statement.
Answer:
Adams Corporation
a) Ending Balances of:
i) Raw Materials:
a) Opening balance = $54,600
b) Purchases = $239,200
Cost of Available Raw Materials = $293,800 (a+b)
less c) Cost of Raw Materials Issued = $248,600
Closing Raw Materials = $45,200
ii) Work in Process (WIP):
a) Opening WIP = $83,400
b) Materials Issued = $248,600
c) Labour applied = $323,000
d) Overhead applied = $46,300
Total cost of WIP available for production = $701,300 (a+b+c+d)
less Cost of Finished Goods = $611,700
Closing WIP = $89,600
iii) Finished Goods:
a) Opening Finished Goods = $27,400
b) Cost of Finished Goods = $611,700
c) Finished Goods available for sale = $639,100 (a+b)
d) less Cost of Goods Sold = $601,100
e) Closing Finished Goods = $38,000
B-1) A schedule of Cost of Goods Manufactured
Opening Inventory of Materials = $54,600
Opening WIP = $83,400
Purchases of Materials = $239,200
Labour = $323,000
Overhead = $46,300
Total Cost = $746,500
Less Closing Inventory of Materials = $45,200
Less Closing WIP = $89,600
Total Cost of Finished Goods = $611,700
B-2) Schedule of Cost of Goods Sold:
a) Opening Finished Goods = $27,400
b) Cost Finished Goods = $611,700
c) Cost of Goods Available for sale = $639,100 (a+b)
d) less Closing Finished Goods = $38,000
e) Cost of Goods Sold = $601,100 (c - d)
B-3) Income Statement
Sales = $800,600
less cost of sales = $601,100
Gross Profit = $199,500
less Selling and Administrative Expenses = $70,200
Net Income before Interests and Taxes = $129,300
Explanation:
a) Closing Inventory of Raw Materials, WIP, and Finished Goods can be obtained by adding opening inventory to purhcases, transferred to production, or finished goods to obtain the costs of raw materials available for production, cost of materials in WIP, and cost of finished goods available for sale respectively.
b) With the costs of materials in WIP, labour and overhead costs are applied to obtain the costs of production.
c) When the closing WIP is subtracted from (b) above, we have the cost of finished goods for the period.
d) The difference between Sales and Cost of Sales is the Gross Profit.
e) The Selling and Administrative expenses are then deducted from the gross profit to get the net income or profit before interests and taxes.
Present value of an annuity On January 1, you win $54,000,000 in the state lottery. The $54,000,000 prize will be paid in equal installments of $6,750,000 over eight years. The payments will be made on December 31 of each year, beginning on December 31 of this year. The current interest rate is 4.5%. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below. Open spreadsheet Determine the present value of your winnings. Round your answer to the nearest dollar.
Answer:
The present value of the winnings is $44,522,230.95
Explanation:
The present value of the winnings is determined by multiplying by each cash flow in relevant year with the discounted factor for that specific year.
formula for discount factor=1/(1+r)^n
r is the current interest rate of 4.5% used a discounting rate
n is the year to which the cash flow relates.
Based on the explanation above,the present value of the winnings cash inflows is $44,522,230.95 as found in the attached.
Monica, a sales consultant, will receive a performance appraisal soon. Monica's supervisor will be assessing Monica's ability to deliver products to clients according to schedule and her ability to meet customer quality requirements. Which performance standard is most likely important to Monica's employer? goal achievement strategic contribution improvement potential employee traits
Answer:
The correct answer is letter "A": goal achievement.
Explanation:
Performance appraisals are evaluations employers conduct based on a standard established by their companies where workers' performance is tested. It is useful to determine if the employees are fulfilling the expectations of the firm and if they are actually accomplishing the goals of why employees were hired for.
If a performance appraisal is focused on meeting customers' demands and delivering clients' products on time, the evaluation is likely to be focused on goal achievement or the ability to reach achievements in time and form based on what consumers may ask for.