Answer:
Option A
Explanation:
First let's make see the what is the difference (they are not the same thing.) And then lets analize which statement is the most accurate.
A change in supply and a change in quantity supplied are different things. The change in supply is caused by changes in costs and incentives that change how much a producer can and will produce at a given price.
The change in quantiy supplied is caused simply by a change in the retail price of the product.
The change in quantity supplied is shown as a movement along the curve. While the change in supply is shown graphically as a movement of the supply curve.
As we can see, that means that A is the correct answer.
Which of the following statements is true of a distribution channel?
a. It is almost synonymous with demand chains.
b. It traditionally encompasses outbound logistics.
c. It handles the entire process of value creation.
d. It inhibits any contribution to the world's GDP.
Answer:
The answer is: A) It is almost synonymous with demand chains.
Explanation:
A company´s distribution channel is the chain of businesses through which a good passes until it reaches its final customer.
An extremely simple example would be: Factory - Wholesale distributor - Local retail store - Customer
A demand chain is just the distribution channel but seen through the eye of the customer. It answers the following question: The good that I just bought passed through which businesses in order for me to get it?
The demand chain for the previous example would be: Customer - Local retail store - Wholesale distributor - Factory
Card Corp. purchased bonds at a discount of $49,000. The bonds were classified as available for sale. Subsequently, Card sold these bonds at a premium of $12,000. During the period that Card held this investment, amortization of the discount amounted to $19,000. What amount should Card report as gain on the sale of bonds?
Answer:
The amount that the card should report as gain on sale of bonds $42000.
Explanation:
carrying cost = 49000 - 19000= 30000
amount should card report as gain on sale of bond = cost of bond + premium price - (cost - carrying value cost )
amount card report as gain = 49000 + 12000 - ( 49000 - 30000)
= 42000
Therefore, the amount that the card should report as gain on sale of bonds $42000.
On January 1, the Molding Department had 4,000 dolls in process. These dolls were 100% complete with respect to direct materials and 70% complete with respect to conversion cost. During January, Molding completed 79,000 dolls. On January 31, Molding had 7,000 dolls in work in process. These dolls were 100% complete with respect to direct materials and 25% complete with respect to conversion cost. What are the Molding Department's equivalent units related to materials for January? A) 79,000 B) 86,000 C) 89,000 D) 93,000
Final answer:
To calculate the equivalent units of materials, add the units completed during the month to the units in process at the end of the month, assuming all are 100% complete with respect to materials, which yields 86,000 equivalent units. The correct option is b.
Explanation:
The question is asking for the equivalent units of materials for the Molding Department in January. To find this, we must account for the units in process at the beginning of the month, the units completed during the month, and the units still in process at the end of the month.
At the beginning of January, there were 4,000 dolls in process which were 100% complete with respect to materials. During January, 79,000 dolls were completed. On January 31, there were 7,000 dolls in work in process, and these were also 100% complete with respect to materials. To calculate the equivalent units for materials, we simply add the dolls completed with those in process since they are all fully complete in terms of materials, regardless of the conversion costs.
The equivalent units of materials for January is:
79,000 (completed) + 7,000 (ending work in process) = 86,000
Final answer:
The Molding Department's equivalent units related to materials for January is 86,000, which includes 79,000 dolls completed and 7,000 dolls in work in process by the end of January, all at 100% complete with respect to direct materials.
Explanation:
To determine the Molding Department's equivalent units related to materials for January, we need to consider both the dolls that were completed during January and the dolls that were started but not completed by the end of January.
First, we account for the 79,000 dolls that the department completed during the month. Since these are 100% complete with respect to direct materials, they are counted fully towards the equivalent units for materials.
Next, we consider the 7,000 dolls that were in work in process at the end of January. These dolls were also 100% complete with respect to direct materials. Therefore, they too are counted fully towards the equivalent units for materials.
Adding these figures together, the Molding Department's equivalent units related to materials for January is:
Completed dolls: 79,000 equivalent units
Work in process dolls: 7,000 equivalent units
Total equivalent units for materials: 79,000 + 7,000 = 86,000 equivalent units
The correct answer is B) 86,000.
Arturo Manufacturing, Inc. provided the following information for the year: Beginning Balancelong dashWork-in-Process Inventory $ 152 comma 000 Ending Balancelong dashWork-in-Process Inventory 63 comma 000 Beginning Balancelong dashDirect Materials 269 comma 000 Ending Balancelong dashDirect Materials 52 comma 200 Purchaseslong dashDirect Materials 131 comma 000 Direct Labor 73 comma 120 Indirect Materials 52 comma 700 Indirect Labor 133 comma 500 Depreciation on Factory Plant and Equipment 73 comma 780 Plant Utilities and Insurance 71 comma 600 How much is the cost of goods manufactured?
Answer:
Cost of good manufactured= $841700
Explanation:
To calculate the cost of manufactured goods we need to use the following formula:
Cost of good manufactured= Beginning work in progress+ direct materials of the period + direct labor + manufactured overhead - ending work in progress
Beginning work in progress= $152000
Direct materials = beginning inventory + purchase - ending inventory= 269000 +131000 - 52000= 348000
Direct labor= 73120
Manufactured overhead=ndirect Materials + Indirect Labor + Depreciation on Factory Plant and Equipment + Plant Utilities and Insurance= 52700 + 133500 + 73780 + 71600= $331580
Ending work in progress= 63000
Cost of good manufactured= 152000 + 348000 + 73120 + 331580 - 63000= $841700
To calculate the cost of goods manufactured, you need to consider various components like materials, labor, and overhead costs. By utilizing the given information, the total cost of goods manufactured can be calculated. In this case, the cost of goods manufactured amounts to $550,700.
The cost of goods manufactured is calculated by adding the beginning Work-in-Process Inventory to the total manufacturing costs incurred during the period and then subtracting the ending Work-in-Process Inventory. In this case, the calculation would be: Beginning Work-in-Process Inventory + Direct Materials + Direct Labor + Indirect Materials + Indirect Labor + Depreciation + Plant Utilities and Insurance - Ending Work-in-Process Inventory.
Using the values provided in the question, the cost of goods manufactured would be: $152,000 + $131,000 + $73,120 + $52,700 + $133,500 + $73,780 + $71,600 - $63,000 = $550,700.
Hank Itzek manufactures and sells homemade wine, and he wants to develop a standard cost per gallon. The following are required for production of a 210-gallon batch. 3,300 ounces of grape concentrate at $0.03 per ounce 357 pounds of granulated sugar at $0.36 per pound 294 lemons at $0.63 each 840 yeast tablets at $0.28 each 1,050 nutrient tablets at $0.11 each 3,100 ounces of water at $0.001 per ounce Hank estimates that 1% of the grape concentrate is wasted, 15% of the sugar is lost, and 30% of the lemons cannot be used. Compute the standard cost of the ingredients for one gallon of wine. (Round intermediate calculations and final answer to 2 decimal places, e.g. 1.25.) Standard Cost Per Gallon $
Answer: $4.140 per gallon
Explanation:
Costs including wastage for 210 gallons:
3,300 ounces of grape concentrate at $0.03 per ounce:
= [tex]3,300\times\frac{0.03}{0.99}[/tex]
= 100
357 pounds of granulated sugar at $0.36 per pound :
= [tex]357\times\frac{0.36}{0.85}[/tex]
= 151.2
294 lemons at $0.63 each = [tex]294\times\frac{0.63}{0.70}[/tex]
= 264.6
840 yeast tablets at $0.28 each = 840 × 0.28
= 235.2
1,050 nutrient tablets at $0.11 each = 1,050 × 0.11
= 115.5
3,100 ounces of water at $0.001 per ounce = 3,100 × 0.001
= 3.1
Hanks estimates that,
1% of the grape concentrate is wasted
15% of the sugar is lost
30% of the lemons cannot be used
Hence,
Cost for 210 gallons = 100 + 151.2 + 264.6 + 235.2 + 115.5 + 3.1
= $869.6
Hence, cost per gallon = [tex]\frac{Cost\ for\ 210\ gallons}{210\ gallons}[/tex]
= [tex]\frac{869.6}{210}[/tex]
= $4.140 per gallon
The standard cost of the ingredients for one gallon of wine, considering all the wastes and losses is calculated as $3.29.
Explanation:To find the standard cost of the ingredients for one gallon of wine, we first compute the cost for each ingredient.
The cost for grape concentrate is 0.03*3300 = $99. However, since 1% is wasted, the usable cost becomes $99*0.99 = $98.01.
The cost for granulated sugar is 0.36*357 = $128.52. As 15% is lost, the usable cost would be $128.52 *0.85 = $109.24.
The cost for lemons is 0.63*294=$185.22. With 30% not usable, the cost becomes $185.22*0.70 = $129.65.
The cost for yeast tablets is 0.28*840 = $235.20 and for nutrient tablets, it's 0.11*1050 = $115.50. For water, the cost is 0.001*3100 = $3.10.
To find the total cost of ingredients for the 210-gallon batch, we add up all the calculated costs, which equals to $690.70. Dividing this by 210, we get $3.29 as the standard cost per gallon.
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Next, imagine that you are a manager of a start-up company with limited cash and resources. In your initial post, describe the types of motivators that you might employ as you develop your culture and attract good talent to your company. Explain why you have selected these motivators.
Answer: I want employees who are like-minded with the values and best practices in my company .
Explanation: Having a candidate attraction strategy that speaks to your company culture will increase the likeliness of attracting and engaging talent who will thrive and stay with you longer.Hiring talent that doesn’t align with your company culture creates personal conflict within the employee that will no doubt impact their work and those they work with It’s your responsibility as an employer to set your employees up for success, and making sure their values and work ethic is in line with your culture before extending an offer is the very first thing you can do for them and the rest of your workforce.Company culture expresses what the organization’s expectations, values and beliefs are and how the organization interacts with both its own employees and the people in the communities in which they do business .
Presented below is a list of costs and expenses usually incurred by Barnum Corporation, a manufacturer of furniture, in its factory. Classify the below items into the following categories: (a) direct materials, (b) direct labor, and (c) manufacturing overhead. Item Category 1. Salaries for assembly line inspectors. select a category 2. Insurance on factory machines. select a category 3. Property taxes on the factory building. select a category 4. Factory repairs. select a category 5. Upholstery used in manufacturing furniture. select a category 6. Wages paid to assembly line workers. select a category 7. Factory machinery depreciation. select a category 8. Glue, nails, paint, and other small parts used in production. select a category 9. Factory supervisors’ salaries. select a category 10. Wood used in manufacturing furniture.
Answer:
1. Salaries for assembly line inspectors - Direct labor or Manufacturing overhead
2. Insurance on factory machines - Manufacturing overhead
3. Property taxes on the factory building - Manufacturing overhead
4. Factory repairs - Manufacturing overhead
5. Upholstery used in manufacturing furniture - Direct materials
6. Wages paid to assembly line workers - Direct labor
7. Factory machinery depreciation - Manufacturing overhead
8. Glue, nails, paint, and other small parts used in production - Manufacturing overhead
9. Factory supervisors’ salaries - Manufacturing overhead
10. Wood used in manufacturing furniture - Direct materials
At the beginning of the year, Cullumber Company had total assets of $864,000 and total liabilities of $523,000. (Treat each item independently.) (a) If total assets increased $156,000 during the year and total liabilities decreased $86,000, what is the amount of stockholders’ equity at the end of the year? Stockholders’ equity $enter a dollar amount (b) During the year, total liabilities increased $91,000 and stockholders’ equity decreased $77,000. What is the amount of total assets at the end of the year? Total assets $enter a dollar amount (c) If total assets decreased $90,000 and stockholders’ equity increased $103,000 during the year, what is the amount of total liabilities at the end of the year? Total liabilities $enter a dollar amount
Answer:
a. $583,000
b. $878,000
c. $330,000
Explanation:
In this question, we have to use the accounting equation which is presented below:
Total assets = Total liabilities + stockholder's equity
$864,000 = $523,000 + stockholder's equity
So, the stockholder's equity = $864,000 - $523,000 = $341,000
a. New assets = Old assets + addition
= $864,000 + $156,000
= $1,020,000
New liabilities = Old liabilities - reduction
= $523,000 - $86,000
= $437,000
So, the stockholder's equity = $1,020,000 - $437,000 = $583,000
b. New liabilities = Old liabilities + addition
= $523,000 + $91,000
= $614,000
New equity = Old equity - reduction
= $341,000 - $77,000
= $264,000
So, the total assets = New liabilities + New equity
= $614,000 + $264,000
= $878,000
c. New assets = Old assets - reduction
= $864,000 - $90,000
= $774,000
New equity = Old equity + addition
= $341,000 + $103,000
= $444,000
So, the total liabilities = $774,000 - $444,000 = $330,000
Using the accounting equation (Assets = Liabilities + Stockholders' Equity) we find that at the end of the year the stockholders’ equity is $583,000 (a), total assets amount to $878,000 (b) and total liabilities sum up to be $330,000 (c).
Explanation:The subject of this question is business, specifically the calculation of asset, liability, and stockholder's equity values. Stockholder's equity represents the value of a business after all debts have been settled. It's calculated using the equation: Assets = Liabilities + Stockholder's equity.
For section (a), the initial stockholders' equity is $864,000 (assets) - $523,000 (liabilities) = $341,000. If assets increased by $156,000 to $1,020,000, and liabilities decreased by $86,000 to $437,000, then at the end of the year, stockholders' equity will be $1,020,000 - $437,000 = $583,000.
For section (b), if liabilities increased by $91,000 to $614,000, and the stockholders equity decreased by $77,000 to $264,000, then the total assets at the end of the year would be $614,000 (liabilities) + $264,000 (Stockholders’ equity) = $878,000.
In section (c), if the assets decreased $90,000 to $774,000, and the stockholders' equity increased by $103,000 to $444,000, then the total liabilities will be total assets - stockholders' equity = $774,000 - $444,000 = $330,000.
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K. Johnson, Inc.'s managers want to evaluate the firm's prior-year performance in terms of its contribution to shareholder value. This past year, the firm earned an operating income return on investment of 12 percent, compared to an industry norm of 11 percent. It has been estimated that the firm's investors have an opportunity cost on their funds of 14 percent, which is the same as the firm's overall cost of capital. The firm's total assets for the year were $ 100 million. Compute the amount of economic value created or destroyed by the firm. How does your finding support or fail to support what you would conclude using ratio analysis to evaluate the firm's performance? Assume that the firm has no debt.
Answer:
The company destroyed 2,000,000 capital
As the returns are less than the cost of create the assets.
It is destroys wealth to the stockholders
Explanation:
operating return on investment 12%
industry 11%
opportunity cost 14% overall cost of capital
Assets: 100 millions
Economic Value Added:
income - Assets x WACC
as there is no debt , the WACC will be the cost of capital
Return: 100,000,000 x 12% = 12,000,000
Assetx x cost of capital
100,000,000 x 14% = 14,000,000
EVA = 12,000,000 - 14,000,000 = -2,000,000
The company destroyed 2,000,000 capital
As the returns are less than the cost of create the assets.
The contribution margin ratio of Candle Corporation's only product is 65%. The company's monthly fixed expense is $455,300 and the company's monthly target profit is $41,300. Required: Determine the dollar sales to attain the company's target profit. (Round your answer to the nearest whole dollar amount.)
Answer:
Break-even point in dollars= $764,000
Explanation:
Giving the following information:
The contribution margin ratio of Candle Corporation's only product is 65%.
The company's monthly fixed expense is $455,300.
The target profit is $41,300.
Break-even point in dollars= (fixed costs + profit)/contribution margin ratio
Break-even point in dollars= (455300+41300)/0.65
Break-even point in dollars= $764,000
The revenues and expenses of Sunset Travel Service for the year ended April 30, 2014,
are listed below.
Fees earned $1,673,000
Office expense 488,000
Miscellaneous expense 34,000
Wages expense 660,000
Prepare an income statement for the current year ended April 30, 2014.
Answer:
Net profit= $491,000
Explanation:
An income statement is one of the three important financial statements used for reporting a company's financial performance over a specific accounting period. The income statement focuses on the four key items - revenue, expenses, gains, and losses. It does not cover receipts (money received by the business) or the cash payments/disbursements (money paid by the business).
It follows the general structures:
Revenues (+)
Operating Revenue
Non-Operating Revenue
Total
Expenses (-)
Primary Activity Expenses
Secondary Activity Expenses
Total
Gains (+)
Losses (-)
Net income/loss
In this exercise:
Total revenues=$1,673,000
Expenses:
Office expense 488,000
Miscellaneous expense 34,000
IWages expense 660,000
Total Expenses=$1,182,000
Net profit= $491,000
On January 1, 2014, Dodd, Inc., declared a 15% stock dividend on its common stock when the fair value of the common stock was $30 per share. Stockholders' equity before the stock dividend was declared consisted of:
Common stock, $10 par value, authorized 200,000 shares;
issued and outstanding 120,000 shares
$1,200,000
Additional paid-in capital on common stock
150,000
Retained earnings
700,000
Total stockholders' equity
$2,050,000
What was the effect on Dodd's retained earnings as a result of the above transaction?
Answer: $540,000
Explanation:
Given that,
Fair value of the common stock = $30 per share
Common stock, $10 par value, authorized 200,000 shares;
issued and outstanding 120,000 shares = $1,200,000
Additional paid-in capital on common stock = $150,000
Retained earnings = $700,000
Total stockholders' equity = $2,050,000
Declared a dividend of 15%:
= 120,000 × $30 × 15%
= $540,000
Since, dividends are paid out Retained earnings. Therefore, retained earnings will decrease by an amount of $540,000.
A 15% stock dividend on Diamond Inc.'s outstanding shares of 120,000 is equal to 18,000 shares. At a fair value of $30 per share, the total stock dividend is $540,000 which would decrease the retained earnings by the same amount. The retained earning would then be at $160,000.
Explanation:A 15% stock dividend on common stock means that 15% of the existing number of shares will be distributed as dividends to the shareholders. The company had 120,000 shares outstanding, so a 15% stock dividend is equal to 18,000 shares (120,000 * 0.15).
The fair value of the common stock was $30 per share, so the total value of the stock dividends distributed is $540,000 (18,000 shares * $30). This would result in a decrease in the cash value present in retained earnings by the same amount of $540,000.
Therefore, the new retained earnings balance after the distribution of the stock dividend would be $160,000 ($700,000 - $540,000).
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The Betterbilt Construction Company designs and builds residential mobile homes. The company is ready to construct, in sequence, 16 new homes of 2,400 square feet each. The successful bid for the construction materials in the first home is $64,800, or $27 per square foot. The purchasing manager believes that several actions can be taken to reduce material costs by 8% each time the number of homes constructed doubles. Based on this information, a. What is the estimated cumulative average material cost per square foot for the first five homes? b. What is the estimated material cost per square foot for the last (16th) home?
Answer:
(a) The estimated cumulative average material cost per square foot for the first five homes is $24.47.
(b) The estimated material cost per square foot for the last (16th) home is $19.34.
Explanation:
(a) If the cost its reduced by 8% every time the number of homes is doubled, we can express the cost of the first five houses as
C1 = C
C2 = C*(1-0.08)=0.92*C
C3 = C2 = 0.92*C
C4 = C2*(1-0.08)=0.92*0.92*C = 0.8464*C
C5 = C4 = 0.8464*C
Then, the average cost of the first five houses is
[tex]\bar{C}=(1/5)*(C1+C2+C3+C4+C5)\\\\\bar{C}=(1/5)*(C+0.92C+0.92C+0.8464C+0.8464C)\\\\\bar{C}=(1/5)*4.5328*C = 0.90656*C=0.90656*27=24.47[/tex]
The estimated cumulative average material cost per square foot for the first five homes is $24.47.
For the 16th home, the number we can estimate that the number of homes double 4 times: at house number 2,4, 8 and 16.
Other way to calculate that is [tex]n=log_2(16)=4[/tex]
We can write the cost of the 16th house as
[tex]C_{16}=0.92*C_8=0.92^{2} *C_4=0.92^{3} *C_2=0.92^{4} *C\\\\C_{16}=0.92^{4} *C=0.716*C=0.716*27=19.34[/tex]
The estimated material cost per square foot for the last (16th) home is $19.34.
The estimated cumulative average material cost per square foot for the first five homes is $22.61. The estimated material cost per square foot for the 16th home is $16.42.
Explanation:To find the estimated cumulative average material cost per square foot for the first five homes, we need to apply the 8% reduction in material costs each time the number of homes doubles. Let's calculate:
The material cost for the first home is $27 per square foot, so the estimated material cost for the second home would be $27 - 8% of $27 ($2.16) = $24.84 per square foot.The estimated material cost for the third home would be $24.84 - 8% of $24.84 ($1.99) = $22.85 per square foot.The estimated material cost for the fourth home would be $22.85 - 8% of $22.85 ($1.83) = $21.03 per square foot.The estimated material cost for the fifth home would be $21.03 - 8% of $21.03 ($1.68) = $19.35 per square foot.Therefore, the estimated cumulative average material cost per square foot for the first five homes is $(27+24.84+22.85+21.03+19.35)/5 = $22.61 per square foot.
To find the estimated material cost per square foot for the last (16th) home, we need to apply the 8% reduction eight times since the number of homes doubles four times.
The estimated material cost for the 16th home would be $27 - (8% of $27) * 8 = $16.42 per square foot.
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In the RST partnership, Ron's capital is $80,000, Stella's is $75,000, and Tiffany's is $50,000. They share income in a 3:2:1 ratio, respectively. Tiffany is retiring from the partnership. Each of the following questions is independent of the others.
38. Refer to the above information. Tiffany is paid $60,000, and no goodwill is recorded. In the journal entry to record Tiffany's withdrawal:
A. Tiffany, Capital will be credited for $60,000.
B. Ron, Capital will be debited for $5,000.
C. Stella, Capital will be debited for $4,000.
D. Cash will be debited for $60,000.
Answer:
C. Stella, Capital will be debited for $4,000.
Explanation:
As for the provided information, we have,
Out of all the partner's Tiffany is retiring.
Tiffany's capital balance = $50,000
On his retirement he is paid $60,000
Since no goodwill is recorded, the excess amount paid over capital = $60,000 - $50,000 = $10,000, will be debited in remaining partner's ratio.
Ron's share in these $10,000 = $10,000 [tex]\times[/tex] 3/(3+2) = $6,000
Stella's share = $10,000 [tex]\times[/tex] 2/(2+3) = $4,000
Thus, Correct answer is debiting Ron's capital by $6,000 and Stella's capital by $4,000
Vista Camera Services started the year with total assets of $ 100 comma 000 and total liabilities of $ 55 comma 000. The revenues and the expenses for the year amounted to $ 120 comma 000 and $ 80 comma 000, respectively. During the year, the company did not issue any common stock, but it distributed dividends of $ 50 comma 000. What is the amount of stockholders' equity at the end of the year?
Answer:
The amount of stockholders' equity at the end of the year is $35,000
Explanation:
For computing the ending balance of the stockholder equity, first we have to compute the beginning balance of equity which is shown below:
Total assets = Total liabilities + stockholder equity
$100,000 = $55,000 + stockholder equity
So, stockholder equity = $100,000 - $55,000
= $45,000
Now the ending balance of stockholder equity would equal to
= Opening balance of stockholder equity + revenues - expenses - dividend paid
= $45,000 + $120,000 - $80,000 - $50,000
= $35,000
Charles lackey operates a bakery in Idaho, Falls Because of its excellent product location, demand has increased by 35% in the last year. On far too many occasions, customers have not been able to purchase the bread of their choice. Because of the size of the store, no new ovens can be added. At a staff meeting, one employee suggested ways to load the ovens differently so that more loaves of bread can be backed at one time. this new process will require that the ovens be loaded by hand, requiring additional manpower. This is the only production change that will be made in order to meet the increased demand. The bakery currently makes 1,800 loaves per month. Employees are paid $8.00 per hour. In addition to the labor cost, Charles has a constant utility cost per month of $800 and a per loaf ingredient cost of $0.40.
current multifactor productivity for 640 work hours per month=
Answer: 0.27 loaves per dollar
Explanation:
Given that,
Bakery currently makes(Output) = 1,800 loaves per month
Paid Employees = $8.00 per hour
Constant utility cost = $800 per month
Ingredient cost = $0.40 × 1,800
= $720
Wages = 640 work hours × $8.00 per hour
= $5,120 per month
Total cost (Input) = Ingredient cost + Wages + Constant utility cost
= $720 + $5,120 + $800
= $6,640
Where,
O/P - Output
I/P - Input cost
current multi factor productivity = [tex]\frac{O/p}{I/P\ cost}[/tex]
= [tex]\frac{1,800}{6,640}[/tex]
= 0.27 loaves per dollar
Present value (with changing interest rates). Marty has been offered an injury settlement of $12 comma 000 payable in 3 years. He wants to know what the present value of the injury settlement is if his opportunity cost is 5%. (The opportunity cost is the interest rate in this problem.) What if the opportunity cost is 6.5%? What if it is 11.5%?
Answer:
If opportunity cost is 5%, PV=10,366.05
If opportunity cost is 6.5%, PV=9,934.19
If opportunity cost is 11.5%, PV=8,656.79
Explanation:
PV=Σ[tex](\frac{CF_{t} }{(1+i)^{t} })[/tex]
If opportunity cost is 5%: PV = [tex]\frac{12,000 }{(1+0.05)^{3} }[/tex] =10,366.05
If opportunity cost is 6.5%: PV = [tex]\frac{12,000 }{(1+0.065)^{3} }[/tex] =9,934.19
If opportunity cost is 11.5%: PV = [tex]\frac{12,000 }{(1+0.115)^{3} }[/tex] =8,656.79
A reserve price is a minimum price set by the auctioneer. If no bidder is willing to pay the reserve price, the item is unsold at a profit of $0 for the auctioneer. If only one bidder values the item at or above the reserve price. An auctioneer faces two bidders, each with a value of either $30 or $80, with both values equally probable. What reserve price should the auctioneer set, and what is the expected revenue from auctioning the item with and without a reserve price?
The auctioneer should set the reserve price at $30. The expected revenue from auctioning the item without a reserve price is $55.
Explanation:To determine the reserve price, we need to consider the values of the two bidders and their probabilities. In this case, both bidders have equal probabilities of valuing the item at $30 or $80. The auctioneer should set the reserve price at $30, the minimum value that one bidder may have. This way, if one bidder values the item at $30 or higher, the auctioneer can sell it, earning a profit of $30. If neither bidder values the item at $30 or higher, the item remains unsold, resulting in a profit of $0 for the auctioneer.
The expected revenue from auctioning the item without a reserve price can be calculated by multiplying the probability of each bidder value by the price the auctioneer receives for that bidder's value.
If one bidder values the item at $30, the probability is 1/2 and the auctioneer receives $30, resulting in an expected revenue of $30 * 1/2 = $15.If one bidder values the item at $80, the probability is 1/2 and the auctioneer receives $80, resulting in an expected revenue of $80 * 1/2 = $40.Therefore, the total expected revenue from auctioning the item without a reserve price is $15 + $40 = $55.
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Sunland Company uses a periodic inventory system. Details for the inventory account for the month of January 2017 are as follows:
Units Per unit price Total
Balance, 1/1/2017 290 $5.00 $1450
Purchase, 1/15/2017 140 ..5.10 714
Purchase, 1/28/2017 140 ..5.30 742
An end of the month (1/31/2017) inventory showed that 230 units were on hand. How many units did the company sell during January 2017?
Sunland Company sold 340 units in January 2017. The calculation is based on the initial inventory, the purchased units, and the remaining units in inventory at the end of the month.
Explanation:To calculate the number of units sold by Sunland Company in January 2017, we first need to find the total number of units at the beginning of the month and the purchases made during the month. Initially, the balance shows 290 units. Then on 1/15/2017, there was a purchase of 140 units, and on 1/28/2017, another 140 units were purchased.
Thus, the total units available in January 2017 were: (290 initial units) + (140 units purchased on 15th) + (140 units purchased on 28th) = 570 units.
At the end of the month, the inventory showed that 230 units were left, which means the company sold the rest. Therefore, the number of units sold is total units available - units left in inventory = 570 units - 230 units = 340 units. That means Sunland Company sold 340 units in January 2017.
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A product manager is eager to develop a new product idea. To gain approval to do so, the product manager orders the research team to survey a small group of customers that have been briefed on the product concept already and who reacted favorably to it. This type of research effort is known as _____(A) sugging.(B) advocacy research.(C) product research.(D) consumer research.(E) focus group research.
Final answer:
The product manager's research approach, where a small group of customers who have previously shown approval are surveyed, is known as advocacy research. The correct option is (B).
Explanation:
The product manager is employing a type of research known as advocacy research. This occurs when a research team surveys a group of customers who are already familiar with a product concept and have previously reacted favorably to it.
This is done to ensure that the data collected will support the development and approval of the new product idea. While this approach can provide insights, it risks bias as it does not represent a broad and unbiased sampling of potential customers.
Correct product development requires the design team to choose one concept, using a structured decision process, where each concept is evaluated against certain constraints and criteria. The best concept that meets these requirements is then selected for implementation.
Additionally, buy-in from all stakeholders, especially in conducting consumer research, is crucial for the smooth running of the project and for obtaining genuine feedback that can inform future project design.
Losses and business failures a. illustrate why government subsidies are necessary if resources are going to be allocated efficiently. b. will help redirect resources away from unproductive projects. c. reflect that buyers value the product highly relative to costs. d. indicate that sellers are producing the commodity at the lowest possible cost.
Answer:
b. will help redirect resources away from unproductive projects
Explanation:
When a project return are lower, it is destroying capital as the return are lower than the cost to generate the capital.
Therefore, when the business stop generating income or it does losses or lower returns than the cost of capital either case, it will stop funding.
The investor will stop funding that unproductive projects and move to better projects and business which yields a gain.
Why is the shape of the production possibilities frontier (PPF) often curved instead of straight? Because the production possibilities frontier is based on the productive capabilites, and of a nation overall, rather than the productive capacity of an individual. Typically, some resources are better suited for producing one good than another, which means that there are diminishing returns when moving such resources away from producing what they are best suited for. The productive efficiency of an economy decreases as it moves from left to right along the PPF. To take a potential sunk cost into account, the PPF is curved to distribute the burden of the sunk cost based on allocative effieciency.
Answer:
The correct answer is the second statement.
Explanation:
A production possibility frontier shows the maximum possible combinations of two goods that can be produced using the given resources. This frontier is concave to the origin. The curve shape of this frontier is because of increasing marginal opportunity cost.
We have limited resources that serve alternative uses. To increase the production of one commodity we need to decrease the production of the other. but the resources are not perfectly substitutable between these two goods. So when we increase the production of one good the marginal opportunity cost of the giving up the alternative goes on increasing.
Determine whether each of the following topics would more likely be studied in microeconomics or macroeconomics. Microeconomics Macroeconomics A firm's decision about the size of its new factory The effects of the Internet on the pricing of used cars The effect of a large government’s budget deficit on the economy's price level A consumer's optimal choice when buying a flat-screen TV
Explanation:
In this question we need to categorize the given statements in either micro or macro economics.
Micro economics deals with the economics at individual, group or company level. Macro economics deals with the economics at national or international level.
So the statements are categorized as follows:
1) A firm's decision about the size of its new Factory. Micro Economics.
2) The effects of the internet on the pricing of used cars. Macro Economics
3) The effect of a large government's budget deficit on the economy's price. Macro Economics.
4) A consumer's optimal choice when buying a flat screen TV. Micro Economics.
Final answer:
The firm's factory decision and a consumer's choice of TV fall under microeconomics, while the impact of the budget deficit on price levels is a macroeconomic issue. The effects of the Internet on pricing can relate to microeconomics.
Explanation:
Microeconomics vs. Macroeconomics
To determine whether the topics provided would be studied in microeconomics or macroeconomics, we look at the scale and scope of the issues. A firm's decision about the size of its new factory and a consumer's optimal choice when buying a flat-screen TV are individual decisions, thus they fall under microeconomics, which studies individual decision-making units such as consumers and firms.
On the other hand, the effects of the Internet on the pricing of used cars can be seen from both perspectives; however, it typically relates to market dynamics and therefore can be associated with microeconomics. The effect of a government's budget deficit on the economy's price level is a broad issue that impacts the economy as a whole, therefore it is studied within macroeconomics.
In the RST partnership, Ron's capital is $80,000, Stella's is $75,000, and Tiffany's is $50,000. They share income in a 3:2:1 ratio, respectively. Tiffany is retiring from the partnership. Each of the following questions is independent of the others.
Refer to the above information. Tiffany is paid $60,000, and no goodwill is recorded. What is the Ron's capital balance after Tiffany withdraws from the partnership?
A. $74,000
B. $71,000
C. $75,000
D. $86,000
Answer:
A. $74,000
Explanation:
Since in this question, Tiffany is retired so we have to find the new ratio which is shown below:
As Tiffany take the shares of both the partners in 3: 2
So, the new ratio would be
Ron share = (3 ÷ 5) × (1 ÷ 6) = 3 ÷ 30
Stella share = (2 ÷ 5) × (1 ÷ 6) = 2 ÷ 30
So the ratio would be 3: 2
The 1 ÷ 6 is the Tiffany ratio
Now the balance after Tiffany withdraws from the partnership equals to
= Paid amount by Tiffany - Tiffany capital
= $60,000 - $50,000
= $10,000
Ron's given amount = ($10,000 × 3 ÷ 5) = $6,000
So, Ron's capital balance equals to
= Ron's capital - Ron's given amount
= $80,000 - $6,000
= $74,000
how do debits to a bank accounts help us understand why subtracting a negative number result in addition?
Answer:
See explanation below
Explanation:
Subtracting a negative number result in addition, also as debiting a negative amount instead of crediting a positive number have the same outcome:
Debits to a bank account help us understand why subtracting a negative number results in addition.
Explanation:In accounting, a debit is an entry that represents an increase in assets or a decrease in liabilities. When we subtract a negative number, it is equivalent to adding a positive number. This is because subtracting a negative is the same as adding a positive. Let's take an example:
A bank account has a balance of $100.A debit of -$50 is made to the bank account.To find the new balance, we can subtract the negative number: $100 - (-$50).The subtraction can be rewritten as addition: $100 + $50.The new balance of the bank account is $150.Therefore, debits to a bank account help us understand why subtracting a negative number results in addition.
Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 2010, Deutscher-Menzies sold Arkie under the Shower, a painting by renowned Australian painter Brett Whiteley, at auction for a price of $1,100,000. Unfortunately for the previous owner, he had purchased it three years earlier at a price of $1,680,000. What was his annual rate of return on this painting?
Answer:
the annual rate of return on the painting was -13.17%
Explanation:
we will construct the equation for future value at the annual rate of return at which a principal of 1,680,000 return 1,100,000 in three years:
[tex]Principal \: (1+ r)^{time} = Amount[/tex]
Principal 1,680,000
time 3 years
Amount 1,100,000
rate r
[tex]1,680,000 \: (1+ r)^{3} = 1,100,000[/tex]
[tex]r = \sqrt[3]{ 1,100,000 \div 1,680,000} -1[/tex]
r = -0.131650681 = -13.17%
As expected, because the amount after three years is lower than the principa the rate of return is negative
Final answer:
The annual rate of return on the painting 'Arkie under the Shower,' after being purchased for $1,680,000 and sold for $1,100,000 over three years, is approximately -12.99%.
Explanation:
The question asks for the calculation of the annual rate of return on an investment in art. The previous owner purchased 'Arkie under the Shower' for $1,680,000 and sold it for $1,100,000 three years later. To calculate the annual rate of return, we use the formula for compound interest [tex](A = P(1 + r)^n)[/tex], where A is the final amount, P is the principal amount, r is the rate of return per period, and n is the number of periods. Inverting this formula to solve for r gives us [tex]r = ((A/P)^(^1^/^n^)) - 1[/tex]. Plugging in the numbers: [tex]r = (($1,100,000 / $1,680,000)^(^1^/^3^)) - 1[/tex], which gives an annual rate of return of approximately -12.99%.
Which of the following statements about property dividends is not true?
a. A property dividend is usually in the form of securities of other companies.
b. A property dividend is also called a dividend in kind.
c. The accounting for a property dividend should be based on the carrying value (book
value) of the nonmonetary assets transferred.
d. All of these statements are true.
Answer:
c. The accounting for a property dividend should be based on the carrying value (book
value) of the non-monetary assets transferred.
Explanation:
As per the Generally Accepted Accounting Principles which states the basic laws for accounting any transaction, states that,
The property dividends that is dividend distributed not in cash but dividend in the form of property like land and building, securities, other assets, etc: shall be recorded at net fair value.
These dividend are not recorded at carrying book values of the property given.
Transportation rates:
(A) are established primarily by government regulation.
(B) are established primarily through negotiation.
(C) are lower for LTL than TL shipments.
(D) typically decrease as delivery speed increases.
(E) typically do not change when smaller shipments are consolidated.
Answer:
(B) are established primarily through negotiation.
Explanation:
Transportation rates can be referred to as the cost paid by users for transportation services. They are the negotiated economic cost of moving a traveler or a unit of freight between a specific origin and location. Rates are often visible to the consumers since transport service providers must provide this information to secure transactions.
In transportation, the scale of operations change by:
Adding more vehicles to the fleet Adding more cars to a train Increasing the size of vehicles Operating in a larger networkTransportation rates are primarily established through negotiation, reflecting the shift towards market-driven mechanisms following significant deregulation in the transport sector in both the United States and Canada.
Explanation:The question relates to the establishment of transportation rates. Historically, transportation in various forms (aviation, trucking, railroads) underwent significant deregulation starting in the late 20th century in both the United States and Canada. In the United States, under President Jimmy Carter, a series of laws were enacted that removed most regulatory barriers, allowing companies to compete more freely by setting their own rates. Similarly, Canada has seen widespread transportation deregulation since the 1980s, highlighted by the Canada Transportation Act of 1996 which removed many previous restrictions and subsidies, favoring a more competitive rate structure.
Therefore, the correct answer is:
(B) are established primarily through negotiation.This reflects the shift from government-regulated to market-driven mechanisms in determining transportation rates. The deregulation has led to more competitive pricing structures, where rates are often negotiated based on market demand, the type of goods being transported, and the specifics of the service provided (e.g., delivery speed and shipment size). This negotiation process allows for flexibility and can accommodate the diverse needs of shippers and carriers.
An elderly physician has built up his own practice into a quite valuable business. Now that he is thinking of retiring, he wants to take on a partner to learn the business and eventually buy the practice in three years. Her compensation will be a salary plus 25% of the profits if they are below the historical average and 50% for any increase above the historical average. The eventual purchase price for the practice will be 5 times the average profits over the three years. Discuss the efficiency aspects of such a contract. Are the incentives of the buyer and seller aligned?
Answer:
No
Explanation:
Tehe Overlapping tenure for the retiring and new physicians tends to increase the transfer of practice specific knowledge. The profit sharing with the new physician increases her incentives to maximize profits but since the sale price is a multiple of the profits during this 3 year, the new physician has an incentive to shirk to keep the profits low. it would be better to use a multiple of profits from the period before she began this probation.
Final answer:
The contract aligns the incentives of both the retiring physician and the incoming partner by using a tiered profit-sharing scheme and a purchase price based on average profits. This promotes efficiency and growth of the practice but could also lead to potential drawbacks like short-term focus and compromise in care quality.
Explanation:
The contract under consideration provides a form of profit-sharing compensation, where the new partner will earn a salary plus a percentage of profits. If profits are below the historical average, the partner receives 25% of the profits, and for any increase above the historical average, the partner's share jumps to 50%. The eventual purchase price of the practice is set at five times the average profits over a three-year span, incentivizing both parties to maximize profits during this period. From an efficiency standpoint, this contract aligns the incentives of the buyer and seller. The tiered profit-sharing agreement encourages the new partner to increase profits beyond the historical average, therefore boosting their personal earnings and raising the practice's sale price. The retiring physician, in turn, is incentivized to ensure a smooth transition and operational success, as this will maximize the practice's value at the time of the sale. This alignment of incentives can create an environment for growth and could potentially increase the quality and reputation of the practice. However, there are potential drawbacks. If not carefully managed, the focus on increasing profits may lead to short-term decision-making that sacrifices long-term sustainability or ethical considerations. Additionally, the pressure to increase profits might lead to cost-cutting measures that could compromise patient care or employee satisfaction.
The following information is available for Windsor, Inc. for the year ended December 31, 2017. Beginning cash balance $ 45,720 Accounts payable decrease 3,759 Depreciation expense 164,592 Accounts receivable increase 8,331 Inventory increase 11,176 Net income 288,646 Cash received for sale of land at book value 35,560 Cash dividends paid 12,192 Income taxes payable increase 4,775 Cash used to purchase building 293,624 Cash used to purchase treasury stock 26,416 Cash received from issuing bonds 203,200 Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Answer:
Cash generated for the year: 348,793
ending cash: 394,513
Explanation:
Operating Activities:
Net Income 288,646
depreciation 164,592
adjusted 453,238
change in Working capital:
AP decrease 3,759
Tax Payable 4,775
AR increase (8,331)
Inventory increase (11,176)
total change (10,973)
cash generated from operating activities 442.265
Investing Activities
proceed from land 35,560
purchase of building (293,624)
cash used from investing activities 258,064
Financing Activities
issuance of shares 203,200
TS purchase (26,416)
dividends paid (12,192)
cash generated from financing activities 164,592
Cash generated for the year: 348,793
beginning cash 45,720
ending cash 394,513