Answer:
they need to limit the material and labor costs to $22.75
Explanation:
given data
combined promotion = $3 million
contribution margin ratio = 35%
Selling price = $35 per unit
to find out
what would they need to limit the material and labor costs to
solution
we get here Contribution margin per unit that is express as
Contribution margin per unit = $35 × 35%
Contribution margin per unit = $12.25 per unit
and Variable cost will be
Variable cost = $35 - $12.25
Variable cost = $22.75 per unit
and we know Variable cost is also express as
Variable cost = Direct materials costs + Direct labor costs + Direct factory overheads ..............1
here direct factory overheads is 0 and Direct materials costs + Direct labor costs is $22.75
so put in equation 1
Variable cost = $22.75 + 0 = $22.75
so we can say that they need to limit the material and labor costs to $22.75
An important application of regression analysis in accounting is in the estimation of cost. By collecting data on volume and cost and using the least squares method to develop an estimated regression equation relating volume and cost, an accountant can estimate the cost associated with a particular manufacturing volume. Consider the following sample of production volumes and total cost data for a manufacturing operation. Production Volume (units) Total Cost ($) 400 4000 450 5000 550 5400 600 5900 700 6400 750 7000 What is the variable cost per unit produced?
Answer:
The answer is $7.6
Explanation:
We have to build up the regression equation to predict the total cost at a given production level to find out the estimated amount of variable cost per unit.
Denote the equation as: y = ax + b; where: a is the variable cost per unit; x is the units produced; b is fixed cost; y is total production cost at x units produced.
Apply the formula in Least Squares Regression, we have:
a = (n*Σ(x*y) - Σx * Σy) / [n*Σ(X^2) - (ΣX)^2], in which n = 6 observations: x0 denote production volume and y denote total cost at an x0 production volume. Thus, we have the below calcualtion:
Σ(x*y) = 400 * 4000 + 450 * 5000 +... + 750 *7000 = 20,090,000;
Σx = 400 + 450 + ...+ 750 = 3,450; (Σx)^2 = 11,902,500
Σy = 4,000 + 5,000 +...+7,000 = 33,700
Σx^2 = 400^2 + 450^2 + ... + 750^2 = 2,077,500
=> a = (6*20,090,000 - 3,450*33,700) / ( 6*2,077,500 - 11,902,500) = 7.6
So, variable cost per unit produced is $7.6.
There isn’t a definitive relationship – more inventory could mean a lower or a higher in-stock probability What is the relationship between the average inventory and the in-stock probability?
a. The more inventory the lower the in-stock probability
b. There isn’t a definitive relationship – more inventory could mean a lower or a higher in-stock probability
c. The more inventory the higher the in-stock probability
Answer:
The correct answer is letter "C": The more inventory the higher the in-stock probability.
Explanation:
If a company inventory increases it implies it has bought more than what it has sold. When inventory increases the company can meet more demand, increasing the likelihood of satisfying all customers. Though, if the demand does not increase, the excess in supply could be reflected as negative in the balance sheet.
MacKenzie Company sold $640 of merchandise to a customer who used a Regional Bank credit card. Regional Bank deducts a 2.0% service charge for sales on its credit cards and credits MacKenzie's account immediately when sales are made.The journal entry to record this sale transaction would be:A)Debit Cash of $640 and credit Sales $640.B)Debit Cash of $640 and credit Accounts Receivable $640.C)Debit Accounts Receivable $640 and credit Sales $640.D)Debit Cash $627.20; debit Credit Card Expense $12.80 and credit Sales $640.E)Debit Cash $627.20 and credit Sales $627.20.
Answer:
.D)Debit Cash $627.20; debit Credit Card Expense $12.80 and credit Sales $640
Explanation:
Sales = $640
To recognize this,
Debit Cash $640
Credit Sales $640
Being entries to recognize sale and cash received.
On this sale, the bank deducts 2% of the sales value
Amount deducted = 2% × $640
= $12.80
To recognize this,
Debit Credit Card Expense $12.80
Credit Cash $12.80
Being entries to recognize credit card expense incurred on sale.
As such, the net effect of the two entries
Debit Cash $627.20
Debit Credit Card Expense $12.80
Credit Sales $640
The right option is D)Debit Cash $627.20; debit Credit Card Expense $12.80 and credit Sales $640.
Custom Cabinetry has one job in process (Job 120) as of June 30; at that time, its job cost sheet reports direct materials of $8,700, direct labor of $3,800, and applied overhead of $3,230. Custom Cabinetry applies overhead at the rate of 85% of direct labor cost. During July, Job 120 is sold (on account) for $23,500, Job 121 is started and completed, and Job 122 is started and still in process at the end of the month. Custom Cabinetry incurs the following costs during July. July Product Costs Job 120 Job 121 Job 122 Total Direct materials $ 2,100 $ 6,400 $ 3,400 $ 11,900 Direct labor 2,300 4,200 2,300 8,800 Overhead applied ? ? ? ?
1. Prepare journal entries for the following in July.
2. Direct materials used in production.
3. Direct labor used in production.
4. Overhead applied. The sale of Job 120.
e. Cost of goods sold for Job 120. 2.
Compute the July 31 balances of the Work in Process Inventory and the Finished Goods Inventory general ledger accounts. (Assume there are no jobs in Finished Goods Inventory as of June 30.)
Answer and Explanation:
Cost Schedule:
Product Costs Job 120 Job 121 Job 122 Total
Beginning WIP 15700 15700
Direct Materials 2100 6400 3400 11900
Direct Labor 2300 4200 2300 8800
Overhead 85% 1955 3570 1955 7480
of Direct Labor
Total 22055 14170 7655 43880
Jounral Entries
Work in Process Inventory 11900
Raw Materials Inventory 11900
To record materials in inventory
Work in Process Inventory 8800
Wages Payable 8800
To record Labor cost
Work in Process Inventory 7480
Applied Factory Overhead 7480
To record applied FOH
Accounts Receivable 23,500
Sales Revenue 23,500
To record Job sold on account
Cost of Goods Sold (Job 120) 22055
Finished goods 22055
To record cost of goods sold
Ending Work in Process account = 7655
Ending Finished Good account = 14170
If some sellers exit a competitive market, how will this affect its equillibrium? Using the 3-point drawing tool, show the impact if some sellers enter a competitive market. Label your new curve appropriately. Using the point drawing tool, show the new equilibrium price and quantity. Label this point 'A'. Carefully follow the instructions above and only draw the required objects. According to your graph, when some sellers enter a competitive market, the equilibrium price_________ and the equilibrium quantity________.
Final answer:
When sellers enter a competitive market, the supply increases, causing the equilibrium price to decrease and the equilibrium quantity to increase. The new equilibrium point is indicated on the graph as point 'A'.
Explanation:
When sellers exit a competitive market, the supply curve shifts to the left, indicating a decrease in supply. This leads to a higher equilibrium price and a lower equilibrium quantity, as the point of intersection between supply and demand curves moves upwards along the demand curve. Conversely, when new sellers enter the market, the supply curve shifts to the right, indicating an increase in supply. This results in a lower equilibrium price and a higher equilibrium quantity, and the new intersection point on the graph is labeled as 'A'.
Following this analysis, when some sellers enter a competitive market, the equilibrium price decreases, and the equilibrium quantity increases. This is because the additional sellers cause more of the good to be available at each price, which, in turn, puts downward pressure on the price to the new equilibrium point.
Remember: The point where the supply curve (S) and the demand curve (D) cross is called the equilibrium, and the equilibrium price is the only price where the amount consumers are willing to buy is equal to the amount sellers are willing to sell, known as the equilibrium quantity.
If a contractor is producing missiles for the Navy, and the contractor fails to deliver them on time, the Navy has the right to: [Contrast the difference between termination for convenience, termination for default, and termination for cause.]
A. Terminate the contract for default
B. Terminate the contract for convenience
C. Terminate the contract for cause
D. All of the answers are correct
Answer:
The correct answer is letter "A": Terminate the contract for default.
Explanation:
A termination for default takes place when one party on a contract is not able to fulfill the agreement conditions. The party who failed to fulfill the contract obligations can be sued and could be found liable for all the damages caused as a result of the breach of the agreement.
On March 1, Terrell & Associates provides legal services to Whole Grain Bakery regarding some recent food poisoning complaints. Legal services total $10,700. In payment for the services, Whole Grain Bakery signs a 10% note requiring the payment of the face amount and interest to Terrell & Associates on September 1.
Required:For Terrell & Associates, record the acceptance of the note receivable on March 1 and the cash collection on September 1. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
Final answer:
Terrell & Associates records the acceptance of a note receivable on March 1 by debiting Notes Receivable and crediting Legal Services Revenue. Upon collection on September 1, they debit Cash and credit Notes Receivable along with Interest Revenue for the principal amount and accrued interest.
Explanation:
On March 1st, Terrell & Associates accepts a note receivable in exchange for legal services provided to Whole Grain Bakery. The journal entry to record the acceptance of the note receivable would be a debit to Notes Receivable for the amount of the legal services provided, $10,700, and a credit to Legal Services Revenue for the same amount:
Debit Notes Receivable: $10,700Credit Legal Services Revenue: $10,700On September 1st, when the note is due, Whole Grain Bakery pays the face value plus interest. Over six months, the 10% annual interest rate accrues $535 on the principal ($10,700 * 10% * 6/12). The journal entry to record the cash collection would include a debit to Cash for the total amount received ($11,235), a credit to Notes Receivable for the principal amount ($10,700), and a credit to Interest Revenue for the interest earned ($535):
Debit Cash: $11,235Credit Notes Receivable: $10,700Credit Interest Revenue: $535Interview Example:
• Client is a leading food company that wants to develop a fresh prepared meal business
• Trend among consumers is toward fresher food with no artificial preservatives or coloring
• Consumers are currently purchasing $5 0 billion of frozen meals—trendis toward more upscale products
• A fresh meal plate combining a protein, vegetable and starch is delicately arranged in a sealed plastic dome package
• Nitrogen gas flushing is used to extend shelf life
• Product is currently in limited consumer test at $5 50 to $850 per meal
• Shelf life of product is 14 days— product will spoil in 21 dayspotentially causing food poisoning
• Client wants to know if they can make money in this business
• Client wants to know if the market is big—
how will they keep competition out?
The client's goal to enter the fresh prepared meal market must address profitability, market saturation, consumer safety, and shelf life. Packaging and processing play a pivotal role in extending shelf life while maintaining food quality. The competitive landscape and consumer expectations present significant challenges to new market entrants.
The client, a leading food company, seeks advice on entering the fresh prepared meal market, given the consumer trend towards fresher food without artificial preservatives or coloring. They are testing nitrogen gas-flushed, sealed meals with a shelf life of 14 days and a $5.50 to $8.50 price range.
The business analysis must consider the profitability and competitiveness of this endeavor in an industry leaning towards upscale products. It is critical to ensure safety and shelf life via proper packaging and storage, balancing between preserving food quality and maintaining its marketability. Overcoming extensive market saturation is a considerable challenge that requires prioritizing customer satisfaction and product safety to ensure a viable business venture in the food industry.
The prepared food must remain safe, with concerns generally stemming from microbial contamination and the necessity for vigilant processing and packaging, such as using barrier films or active components to extend the product's shelf life. Consumer expectations dictate ready food availability, with increasing concerns over the health and sustainability implications of current food supply practices.
The success of a new product involves long-term development and overcoming regulatory and market hurdles, especially in the saturated food industry landscape characterized by established chains and vending machines.
The payback method, unlike the net present value method, does not ignore cash flows after the point of cost recovery.
a. True
b. False
Answer:
Explanation:
The payback period measures the length of time it takes a project cash inflow s to recoup its cash outflows.
Though it does not incorporate time value of money but it is a sure measure of a project's liquidity- it gives an idea of how soon it will take a project to recover its initial cost. In addition, it is very easy to calculate.
However, it suffers a number of setbacks. For example, it treats cash flows occurring at different periods in the project life as been the same- it ignores the time value of money concept.
Furthermore, it also excludes cash inflows coming up after the payback date in its computation. The date at which the accumulated cash inflows equals the initial cost is also known as point of cost recovery
The payback period is a method of investment appraisal which focuses on liquidity and not profitability. Yes, it is concerned about a project breaking even but investors are concerned about profitable.
In contrast, the net present value corrects some of the major pitfalls of the payback period method. For example, It uses the concept of time value of money as it involves calculating the present values of cash flows.
Also, all cash flows are included in the calculation of net present value.
Note that the question negates some of these points.
For example if a project costs $60,000 with a seires of annual cash inflows as follows Year 1- $20,000, year 2- $20,000, year 3 -$20,000 and year 4- $10.
The payback period is 3 year in this example of mine. The $10 of year 4 is excluded in the computation of the payback perod and does give an idea of whether the project is profibale
The payback method is defined as the time required to recoup the funds invested to reach the break-even point. The payback period is the initial investment done per year cash flow.
The given statement is False.
The payback method or period is the time taken to project the inflow of cash to recoup the outflow of cash.
The payback method can be calculated by the formula:
[tex]\text{Payback} &= \dfrac{\text{Initial Investment}} {\text{Cash flow per year}}[/tex]
In the payback period, after the payback point has been reached, the cash flows are ignored.
A payback period is an approach to capital budgeting, such that it understands the cash flow as an investment. The payback ignores the overall profitability of the investment, unlike the net present value.
Therefore, the given statement is False.
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Megan Johnson owns a kitchen and bathroom cabinet company. Her market research is telling her that she is taking business away from the large home improvement stores in her trade area. One thing that Megan is worried about is that the large stores might fight back by lowering their prices, which hurts everyone except the consumer. The day-to-day challenge of firm growth that this example is referring to is _______
Answer: Price war
Explanation:
Price war is a market strategy in which a firm lowers it's price in comparison to the prices of other seller's in the market in order to gain absolute control of the Consumers patronage.
Price war it's more prevalent in a market where the sellers sell differentiated products either through branding or qualities.
The firm also employed advertising to drag home the superiority of their products and cheap prices.
A recent study on crime rates examines whether crime depends on sunshine. A researcher hypothesizes that sunshine makes people happy and thus reduces crime. She collects data from cities across the USA and their sunshine exposure, runs a regression, and finds the following:Dependent Variable: Number of Crimes per 100,000 people (higher scores mean more crime)DemocratsRepublicansIndependentSupport10300Oppose50100Don’t Care5020 R2 = .45Interpret the estimated slope, estimated intercept, and R2 from this regression. State whether the slope is statistically significant, how you reach
Answer and Explanation:
R-square measures whether the variation exists or how much dependence the independent variables on the dependent variables.
R2 = .45 which is quite low. This shows that there is not much variation. In order to increase the R2 the researcher can add more independent variables.
The below part is taken from the internet as the question was incomplete:
Sunny days = 0.5
Intercept = 2.1
The slope shows a positive relationship (direct relationship) with the dependent variable which is crime dependency.
Sunny days is the independent variable.
Intercept is also positive whereas there is significance in the p value which helps in concluding that we will reject the null hypothesis.
Shawna finally made it big in Nashville. She never expected the lack of privacy, criticism and demands that would follow. She finds herself unable to cope. According to Albrecht's nine variables, which one is now outside her comfort zone?
Answer and Explanation:
The factors that are influenced in Shawna's usual range of familiarity as indicated by Albrecht's factors are the lucidity of expected set of responsibilities and assessment criteria, work status and human contact. She's getting analysis that perhaps she was not set up for, which makes the assessment criteria of her business to be flimsy and difficult for her to satisfy inevitably. The status of her activity is too influenced by the analysis and the requests, and the human contact quality that she's having a direct result of her activity is a long way from the ideal in light of her absence of security.
This is a shallow perception as indicated by the verifiable depiction of the issues that Shawna is having, however it's the most precise sentiment as per the factors.
Market research indicates that a new product has the potential to make the company an additional $1.6 million, with a standard deviation of $2.5 million. If these estimates were based on a sample of 12 customers from a normally distributed data set, what would be the 95% confidence interval?a. (0.00, 3.69) b. (-0.13, 3.33) c. (-0.49, 3.69) d.(-0.09, 4.10)
Answer:
The 95% confidence interval would be given by (0.011;3.2188)
But on this case the most accurate option seems to be : a. (0.00, 3.69)
Explanation:
Previous concepts
A confidence interval is "a range of values that’s likely to include a population value with a certain degree of confidence. It is often expressed a % whereby a population means lies between an upper and lower interval".
The margin of error is the range of values below and above the sample statistic in a confidence interval.
Normal distribution, is a "probability distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean".
Solution to the problem
The confidence interval for the mean is given by the following formula:
[tex]\bar X \pm t_{\alpha/2}\frac{s}{\sqrt{n}}[/tex] (1)
In order to calculate the critical value [tex]t_{\alpha/2}[/tex] we need to find first the degrees of freedom, given by:
[tex]df=n-1=12-1=11[/tex]
Since the Confidence is 0.95 or 95%, the value of [tex]\alpha=0.05[/tex] and [tex]\alpha/2 =0.025[/tex], and we can use excel, a calculator or a table to find the critical value. The excel command would be: "=-T.INV(0.025,11)".And we see that [tex]t_{\alpha/2}=2.201[/tex]
Now we have everything in order to replace into formula (1):
[tex]1.6-2.201\frac{2.5}{\sqrt{12}}=0.011[/tex]
[tex]1.6+2.201\frac{2.5}{\sqrt{12}}=3.188[/tex]
So on this case the 95% confidence interval would be given by (0.011;3.2188)
But on this case the most accurate option seems to be : a. (0.00, 3.69)
Sunland Company had two issues of securities outstanding: common stock and an 9% convertible bond issue in the face amount of $15350000. Interest payment dates of the bond issue are June 30th and December 31st. The conversion clause in the bond indenture entitles the bondholders to receive forty shares of $20 par value common stock in exchange for each $1000 bond. On June 30, 2018, the holders of $2302500 face value bonds exercised the conversion privilege. The market price of the bonds on that date was $1200 per bond and the market price of the common stock was $35. The total unamortized bond discount at the date of conversion was $980000. In applying the book value method, what amount should Sunland credit to the account "paid-in capital in excess of par," as a result of this conversion?
Answer:
$313,500
Explanation:
Applying the book value method,
Common stock:
= ($2,302,500 face value bonds ÷ $1000) × 40 shares × $20 par value
= 2,302.5 × 40 shares × $20 par value
= $1,842,000
Unamortized discount:
= ($2,302,500 face value bonds ÷ $15,350,000) × $980,000
= 0.15 × $980,000
= $147,000
Amount should Sunland credit to the account "paid-in capital in excess of par," as a result of this conversion:
= $2,302,500 face value bonds - Common stock - Unamortized discount
= $2,302,500 - $1,842,000 - $147,000
= $313,500
Kaplan, Inc. produces flash drives for computers, which it sells for $27 each. The variable cost to make each flash drive is $13. During April, 700 drives were sold. Fixed costs for April were $2 per unit for a total of $1,400 for the month. How much is the monthly break-even level of sales in dollars for Kaplan? Select one:
a. $100
b. $2,700
c. $14,000
d. $8,400
Answer:
Break even sales will be $2700
So option (b) will be correct option
Explanation:
We have given fixed cost = $1400
Sells per unit = $27 each
And variable cost per unit = $13 each
So contribution margin ratio [tex]=\frac{sales\ per\ unit-variable\ cost\ perunit}{sales\ per\ unit}=\frac{27-13}{27}=0.5185[/tex]
We know that break even sales is given by
Break even sales [tex]=\frac{fixed\ cost}{contribution\ margin\ ratio}=\frac{1400}{0.5185}=$2700[/tex]
So option (b) will be correct answer
Gavin tells Rod that he will pay him $400 to paint his house. Rod starts to paint, intending to accept. Halfway through his paint job, Gavin tells Rod that he wants to revoke the offer. Under this scenario:Select one:a. Gavin is not allowed to revoke because the contract is unilateralb. Gavin is allowed to revoke, but is liable to Rod for the reasonable value of painting half the house c. Gavin may not revoke because the contract is bilaterald. d. Gavin is allowed to revoke if he finds Rod's efforts half-hearted
Answer:
d. Gavin is allowed to revoke if he finds Rod's efforts half-hearted
Explanation:
Either he accepts, or he does not accept the offer. Even if he started to paint without accepting the offer, and Gavin does not like his work, the offer can be revoked.
So the correct answer is:
d. Gavin is allowed to revoke if he finds Rod's efforts half-hearted
George Johnson recently inherited a large sum of money; he wants to use a portion of this money to set up a trust fund for his two children. The trust fund has two investment options: (1) a bond fund and (2) a stock fund. The projected returns over the life of the investments are 6% for the bond fund and 10% for the stock fund. Whatever portion of the inheritance George finally decides to commit to the trust fund, he wants to invest at least 30% of that amount in the bond fund. In addition, he wants to select a mix that will enable him to obtain a total return of at least 7.5%. Formulate a linear programming model that can be used to determine the percentage that should be allocated to each of the possible investment alternatives. If required, round your answers to three decimal places. Value of optimal solution is %
Answer:
Return on investment
X * 0.06 + (1-X)*0.1 = 0.075
where:
1>X >0.30
X is the percentage invest on bond fund
It needs to invest 62.5% in the bond fund
and 37.5% in the stock und to achieve 7.5% return
Explanation:
We have a certain amount divided into two option.
being X the bond fund the rmainder (1 - X) will be invested in the stock fund
We want at least an X of 30%
and achieve 7.5% return
0.06X + 0.1 - 0.1X = 0.075
0.1-0.075 = 0.04X
X = 0.025/0.04 = .625 = 62.5%
A local finance company quotes an interest rate of 17.1 percent on one-year loans. So, if you borrow $20,000, the interest for the year will be $3,420. Because you must repay a total of $23,420 in one year, the finance company requires you to pay $23,420/12, or $1,951.67, per month over the next 12 months. Is the interest rate on this loan 17.1 percent?
a. What rate would legally have to be quoted? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
b. What is the effective annual rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
The APR or legal interest rate quoted must be computed based on the present value of monthly payments, and it may differ from the advertised rate. The EAR, reflecting the actual cost of borrowing, accounts for the compounding of interest at this monthly rate over a year.
The question is asking whether the interest rate on a loan truly reflects the advertised rate when repayments are structured differently.
In this scenario, the finance company offers a one-year loan at 17.1% but requires monthly repayments that don't align directly with simple interest computations.
This involves calculating the actual annual percentage rate (APR) and the effective annual rate (EAR).
To calculate the APR, which is the legal rate that must be quoted, considering the monthly payments, we would have to solve for the interest rate that equates the present value of the loan (the amount borrowed) to the present value of the monthly payments.
However, since the actual numbers aren't provided, a generic formula would be:
Use the equation PV of loan = PV of annuity (monthly payments)
Apply the formula for the present value of an annuity:
Calculate the interest rate (i) that satisfies this equation.
To find the EAR, which measures the actual interest rate after considering compounding, we would:
Take the monthly rate calculated from the APR.
Convert it to an annual rate considering monthly compounding using the formula (1 + i)12 - 1, where i is the monthly rate.
The APR generally differs from the advertised rate when repayments are not in sync with the interest accrual period, leading to an EAR that reflects the true cost of borrowing.
Fill in the blanks to complete the passage about the law of one price. Drag word(s) below to fill in the blank(s) in the passage. must According to the law of one price, identical goods sold sell for the same price, except for costs associated with Those costs reflect and the cost of shipping. According to the law of one price, if the price of a good in one location does not match the price of the same good in a different location, sellers will increase until prices in both locations are equal supply in the location where the good is in different locations less expensive at different times trade barriers production movement between locations currency exchange more expensive
Answer:
Consider the following explanation.
Explanation:
According to the law of one price, identical goods
sold IN DIFFERENT LOCATIONS must sell for the same
price, except for costs associated with MOVEMENT BETWEEN LOCATIONS.
Those costs reflect TRADE BARRIERS and the cost of shipping.
According to the law of one price, if the price of a good
in one location does not match the price of the same good in
a different location, sellers will increase supply
in the location where the good is MORE EXPENSIVE
until prices in both locations are equal.
Griffen Corporation uses a standard costing system. Information for the month of May is as follows: Actual manufacturing overhead costs ($26,000 is fixed) $80,000 Direct labor: Actual hours worked 12,000 hrs. Standard hours allowed for actual production 10,000 hrs. Average actual labor cost per hour $18.00 The overhead rate is based on a normal volume of 12,000 direct labor hours. Standard cost data at 12,000 direct labor hours were as follows: Variable overhead $48,000 Fixed overhead 24,000 Total overhead $72,000 What is the fixed overhead spending variance for Griffen?
Answer:
Fixed overhead spending variance $
Budgeted fixed overhead cost (12,000 hrs x $2) 24,000
Less: Actual fixed overhead cost 26,000
Fixed overhead spending variance 2,000(A)
Explanation:
In this case, we need to calculate the standard fixed overhead application rate, which is the ratio of Budgeted fixed overhead cost to budgeted direct labour hours (normal capacity). Fixed overhead spending variance is the difference between budgeted fixed overhead cost and actual fixed overhead cost. Budgeted fixed overhead cost is budgeted hours multiplied by standard fixed overhead application rate.
The fixed overhead spending variance for Griffen Corporation is $56,000.
To calculate the fixed overhead spending variance for Griffen Corporation, we need to compare the actual fixed overhead costs incurred with the budgeted (standard) fixed overhead costs.
Fixed Overhead Spending Variance = Actual Fixed Overhead Costs - Budgeted (Standard) Fixed Overhead Costs
Actual Fixed Overhead Costs = $80,000 (given)
Budgeted (Standard) Fixed Overhead Costs = $24,000 (given in the standard cost data)
Now, let's calculate the fixed overhead spending variance:
Fixed Overhead Spending Variance = Actual Fixed Overhead Costs - Budgeted (Standard) Fixed Overhead Costs
Fixed Overhead Spending Variance = $80,000 - $24,000
Fixed Overhead Spending Variance = $56,000
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In January 2001, the euro/dollar exchange rate was 1.10, and in January 2002, the euro/dollar exchange rate was 1.120. What happend to the exchange rate during this period?
A. Euro depreciated against the dollar
B. Euro appreciated against the dollar
C. Dollar appreciated against the euro
D. Both B and C
Answer:
B. Euro appreciated against the dollar
Explanation:
Depreciated means a decrease in value. Therefore, option A is incorrect. Since the exchange rate of Euro increases, the dollar cannot be appreciated at the same time. So, C cannot be the answer. If "C" is incorrect, both "B" and "C"; it means "D" is incorrect.
Hence, option "B" is correct because the foreign exchange rate of Euro increases relative to the exchange rate of the dollar in 2002. If there is an increase of a currency relative to others, the increased currency is said to be appreciated.
Let's consider the effects of inflation in an economy composed of only two people: Bob, a bean farmer, and Rita, a rice farmer. Bob and Rita both always consume equal amounts of rice and beans. In 2013, the price of beans was $1, and the price of rice was $3. Suppose that in 2014 the price of beans was $2 and the price of rice was $6. What was inflation? Was Bob better off, worse off, or unaffected by the changes in prices? What about Rita?
b. Now suppose that in 2014 the price of beans was $2 and the price of rice was $4. What was inflation? Was Bob better off, worse off, or unaffected by the changes in prices? What about Rita?
c. Finally, suppose that in 2014 the price of beans was $2 and the price of rice was $1.50. What was inflation? Was Bob better off, worse off, or unaffected by the changes in prices? What about Rita?
d. What matters more to Bob and Rita�the overall inflation rate or the relative price of rice and beans?
Inflation involves the rise in prices for goods or services over time. The relative effects of inflation on Bob and Rita depend on how their production and consumption are affected. More important to their individual economic conditions are the relative prices of beans and rice.
Explanation:The inflation rate is calculated by comparing the price increase of goods or services over a specified time period. To determine how inflation affects Bob and Rita, we should examine the price changes of beans and rice.
Inflation is 100% as price of both beans and rice has doubled. Bob and Rita are worse off as they have to spend more for the same amount of goods.For beans, inflation is 100%, while for rice it's 33%. Since Bob and Rita consume equal amounts of both, the overall effect of inflation depends on how the price changes affect their budgets. If they can't limit their consumption or find alternatives, they're worse off.With the price of beans doubling (100% inflation) and the price of rice decreasing (50% deflation), the impact on Bob and Rita depends on how much of each good they consume and their production. If they maintain equal consumption, Bob is better off since the price for his product has increased. Rita is possibly worse off, unless the reduced cost of beans allows her to increase her rice production without increasing costs.Relative prices tend to matter more than the overall inflation rate for Bob and Rita, as changes in the relative prices of rice and beans directly affect their economic situations. Inflation or deflation alone gives us an average, but individual experiences can vary greatly from the average.
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Final answer:
Inflation affects purchasing power, making goods and services cost more nominally. Bob and Rita, characters in a hypothetical two-person economy, are impacted differently depending on how the prices of beans and rice change relative to their incomes. The relative prices of goods consumed and income adjustments determine their economic well-being more than the overall inflation rate.
Explanation:
Understanding Inflation and Its Impact on Bob and Rita
When assessing the effects of inflation, it is crucial to consider both the nominal price and the real price. Inflation represents the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling. Consider the hypothetical economy with Bob, a bean farmer, and Rita, a rice farmer.
Scenario Analysis
In 2014, with bean prices at $2 and rice prices at $6, the inflation rate would be 100% for both beans and rice (since their prices doubled from 2013). Bob and Rita would both be worse off if their incomes did not double to compensate for these price increases.With bean prices at $2 and rice prices at $4 in 2014, the inflation rate for beans would still be 100%, but rice would see a lower inflation rate of about 33%. Bob would again be worse off unless his income increased by more than the inflation rate. Rita would be worse off if her income did not increase by at least 66% to match the weighted average inflation of beans and rice.If, in 2014, bean prices were $2 and rice prices were $1.50, inflation for beans would be 100%, but rice would experience deflation of -50%. Bob would be worse off due to the higher prices for his goods unless his income increased accordingly. Rita, on the other hand, might be better off if her income remained stable or increased, as the cost of her primary good, rice, has decreased.For both Bob and Rita, the relative prices of rice and beans and their changes are critical since they consume these goods in equal amounts. Therefore, the specialization and the relative prices matter more than the overall inflation rate to their individual economic statuses.In conclusion, inflation affects individuals based on their consumption patterns and income changes. The overall inflation rate is important, but for Bob and Rita, the relative price changes of beans and rice are more significant.
On January 1, 2016, Wasson Company purchased a delivery vehicle costing $50,710. The vehicle has an estimated 8-year life and a $4,700 residual value. Wasson uses the units-of-production depreciation method and Wasson estimates that the vehicle will be driven 107,000 miles. What is the vehicle's book value as of December 31, 2017 assuming Wasson uses the units-of-production depreciation method and the vehicle was driven 10,700 miles during 2016 and 18,700 miles during 2017? (Do not round your intermediate calculations.)
A. $34,508.
B. $38,068.
C. $33,368.
D. $39,208.
Answer:
Book value= $33,008
Explanation:
Giving the following information:
On January 1, 2016:
Purchase cost= $50,710.
Residual value= $4,700
Wasson uses the units-of-production depreciation method.
The vehicle will be driven 107,000 miles.
2016= 10,700 miles
2017= 18,700
First, we need to calculate the depreciation of 2016 and 2017, using the following formula:
Annual depreciation= [(original cost - salvage value)/useful life of miles]*miles
2016= [(50,710 - 4,700)/107,000]*10,700= $4,601
207= 0.43*18,700= $8,401
Book value= depreciable value - accumulated depreciation
Book value= 46,010 - (4,601 + 8,401)= $33,008
What internet business model would be appropriate for a company to follow in creating a website & why? The company is a hair salon. In what ways can the business beneft from a website? What functions should it perform for the company (e.g., marketing sales, customer support etc), In what other ways might the company use the internet for its own business? Prepare functional specification for the company's use of the Web and the internet. Include links to and from other sites in your design.
Answer:
The E-commerce business model
Explanation:
The E-commerce internet business model is the appropriate business model to follow for a company that is into hair salon.
Why?
Considering the type and nature of the business, the hair salon will probably be in the sales of fashion hair and making of hair. To achieve maximum sales and to be able to reach maximum potential client, an e-commerce website should be developed for the hair salon.
Function
This will allow the salon be able to make sales online, improve and have the ability to adopt different marketing strategy for the benefit of reaching a wider audience. Since the website is a technology that is internet based, customer feed back and customer support can be easily integrated and achieved on the website.
Other way the company can use the website and the internet is the ability to allow client book available time to walk into the salon to make their hair without waiting for so long. Additionally, the internet can be used for research purposes to acquire knowledge for the development of the company.
Legal responsibility for someone else’s use of your possessions or someone else’s activity for which you are responsible is called __________.
a. negligence.
b. strict liability.
c. vicarious liability.
d. property risk.
e. pure risk
Answer:
The correct answer is letter "C": vicarious liability.
Explanation:
Vicarious liability may apply when a party is found responsible because of the acts of a third party and the first party is not able to take care of the responsibility. The party found responsible and the party responsible for the actions share responsibility in the acts.
Firms from which country lead the way in "direct foreign investment" in the United States?A. JapanB. IndiaC. ChinaD. United Kingdom
Answer:
D. United Kingdom.
Explanation:
Direct Foreign Investment are long-term investments (usually not related with stock exchange market). The UK accounted for the 15.2% of total foreign direct investments in USA in 2017. This was the higher share per country that year followed by Japan 11.8%, Germany 10.1% and Ireland 8.1%
Suppose the firm currently employs 500 workers at 40 hours per worker per week and that the following relationship holds. 9,000-15 ME 800 МЕ, MPР, H M MPI 6,000 400 Prove that the firm is not at an equilibrium mix of workers and hours by showing there is a window of opportunity for it to reduce its total cost
Carolyn purchased a new office desk on July 23, 2018, at a cost of $2,474. She did not claim the bonus depreciation deduction. Using the half-year convention, Carolyn may claim 2018 depreciation in the amount of:__________a. $237 b. $339 c. $475 d. $791
Answer:
Depreciation under half-year convention is= 309.25
Explanation:
(Important Note: The information provided in the question are incomplete. In order to calculate depreciation expense using the half year convention we must have useful life of the new office desk and residual value, if any! Therefore we base the solution of this question by using some assumptions.)
Assuming that the useful life of the new office desk is 4 years and has no salvage value, the depreciation would be as follows:
Depreciation expense = $2474÷ 4
Depreciation expense = $618.5
But this is yearly expense and under the half-year convention it's assumed that the new office desk is being used for one-half or it's first year therefore the half year depreciation expense will be calculated and the remaining half of depreciation will be expensed out in the final year of depreciation.
So depreciation under half-year convention is= 618.5× 6÷ 12
depreciation under half-year convention is= 309.25
The potential benefits lost by taking a specific action when two or more alternative choices are available is known as a(n):________a. Alternative cost.b. Sunk cost.c. Out-of-pocket cost.d. Differential cost.e. Opportunity cost.
Answer:
The potential benefits lost by taking a specific action when two or more alternative choices are available is known as opportunity cost.
The correct answer is E
Explanation:
Opportunity cost is the potential lost as a result of selecting an alternative where alternative courses of action are involved. It is a relevant cost for decision-making.
Answer:
e. Opportunity cost
Explanation:
This is the perfect definition of opportunity cost.
Businesses mostly find themselves stuck in choosing between two different alternatives, especially when each alternative has a cost consequence. For example, as an employee I am faced with two alternatives, first, I can go on a one week holiday with my friends and chill (which would cost me $1500) but if I do so I would be loosing $200 (as my salary) daily for one week, the total of which would be $1400. If I choose to go with my friends on the holiday anyhow, the total cost of my holiday would not just be $1500 but the opportunity cost of $1400 would also be a part of my holiday cost because it's relevant and is being influenced by my decision.
So I would basically be loosing the potential benefits (salary in this case) if I choose to go on the holiday with my friends.
Alternative cost is the cost comparison of two alternatives aimed at choosing the most economically feasible option.
Sunk cost is cost that is already incurred and/or is committed to be incurred at a later date which can't be influenced by our decision.
Differential cost is the difference between the cost of two options.
Your firm purchased a warehouse for $335,000 six years ago. Four years ago, repairs were made to the building which cost $60,000. The annual taxes on the property are $20,000. The warehouse has a current book value of $268,000 and a market value of $295,000. The warehouse is totally paid for and solely owned by your firm. If the company decides to assign this warehouse to a new project, what value, if any, should be included in the initial cash flow of the project for this building?
Answer:$295,000
Explanation:
6 years ago, the purchase price of the warehouse was $335,000 and the current warehouse market worth is $295,000 and the book value is $268,000. If the company decides to assign this warehouse to a new project, it should include its current market worth as the initial cash flow for the building because if the company does not use the warehouse for project purposes, the company receives a cash flow of $295,000, market worth as cash flow.
The firm must place a market worth of $295,000 as the initial cash flow for the project.