Answer:
Explanation:
In common sized income statement , each line item is expressed as a percentage of sales turnover and compared to the percentage industry standard for analysis purpose.
Lyon % Industry %
Revenue 7,500,000 100 100
Cost of goods (4,125,000) 55 61
Gross profit 3,375,000 45 39
Selling expenses (2,250,000) 30 23
Admin Expenses (525,000) 7 10
Total Operating Exp (2,775,000) 37 33
Operating income 600,000 8 6
Other revenue 30,000 0.4 3
Other expenses (7500) 0.1 1
Income before tax 622,500 8.3 8
Income Tax 187,500 2.5 2.5
Net Income 435,000 5.8 5.5
Your company has money to invest in an employee benefit plan and you have been chosen to be the plan's trustee. As an employee you want to maximize the interest earned on this investment and have found an account that pays 10% compounded continuously. Your company is providing you with $ 1,500 per month to put into your account for 10 years. What will be the balance in this account at the end of the 10-year period
Answer:
The balance in this account at the end of the 10-year period is 310000
Explanation:
Solution
Given that:
Now, Recall that,
Time period is = 10 yrs = 12*10 = 120 months
Interest = 10%
= 10%/12 = 0.8333% per month continuously compounded .
Thus,
The rate effective per month = e^r - 1 = e^0.0083333 - 1 = 0.00836815
so,
The month per = 1500
The value of future deposit = 1500 * (F/A,0.836815%,120)
= 1500 * [((1 + 0.00836815)^120 - 1)/ 0.00836815]
= 1500 * [((1.00836815)^120 - 1)/ 0.00836815]
= 1500 * 205.3359
= 308003.89
which is also = 310000 (nearest value)
hums 202 Which of the following describes a consumer installment loan? A. A loan you get based on the tax refund that you expect to receive. B. A loan that is repaid in equal monthly payments for a specific period of time, usually several years. C. A loan where you have to promise to give the bank your assets if you do not repay the loan. D. A loan for consumer goods where you own the item(s) at the end of the payment period.
Final answer:
A consumer installment loan is repaid in equal monthly payments over a set time frame and can be used for personal expenses. It differs from secured loans like mortgages or auto loans and can be unsecured with no collateral necessary.
Explanation:
A consumer installment loan is best described as a loan where the borrower repays the principal and interest in equal monthly payments over a set period of time. This type of loan can be used to finance various personal expenses such as purchasing a vehicle, appliances, or an education. Unlike some loans that may require collateral (secured loans) like mortgages or auto loans, consumer installment loans can also be unsecured, meaning no collateral is required. When choosing a loan, it's vital to understand the terms, including the payback period, the interest rate, and whether the loan is secured or unsecured.
All of the following are true regarding variance investigation except: a.every variance is investigated. b.managers must consider whether a variance will recur. c.it is difficult to assess the costs and benefits of variance analysis on a case-by-case basis. d.variances are not investigated unless they are large enough to be of concern. e.the investigation should be undertaken only if the anticipated benefits are greater than the expected costs.
Answer:
The option that is not true about variance investigation is A) every variance is investigated.
Explanation:
Every business projection and forecast is made based on speculation. These estimates in theory vary with what is obtainable in practice. Therefore, variance is inevitable.
It is not every variance that is investigated. Variances are not investigated unless they are large enough to be of concern and the investigation should be undertaken only if the anticipated benefits are greater than the expected costs.
Variance investigation models are concerned with decisions to investigate the cause of particular variances and in particular, to distinguish significant deviations from random fluctuations.
Genent Industries, Inc. (GII), developed standard costs for direct material and direct labor.
In 2015, GII estimated the following standard costs for one of their major products, the 30-gallon heavy-duty plastic container.
Budgeted quantity Budgeted price
Direct materials 0.30 pounds $20 per pound
Direct labor 0.20 hours $12 per hour
During July, GII produced and sold 3, 000 containers using 1.000 pounds of direct materials at an average cost per pound of $19 and 625 direct manufacturing labor hours at an average wage of $11.75 per hour.
1. The direct material price variance during July is .
a. $1,100 unfavorable
b. $1,100 favorable
c. $1,000 unfavorable
d. $2,000 unfavorable
2. The direct material efficiency variance during July is .
a. $ 1,000 unfavorable
b. $1,100 favorable
c. $2,000 unfavorable
d. $1,000 favorable
3. The direct manufacturing labor price variance during July is _.
a. $375.00 unfavorable
b. $156.25 favorable
c. $243.75 favorable
d. $ 1, 000 unfavorable
4. The direct manufacturing labor efficiency variance during July is .
a. $300.00 unfavorable
b. $156.25 favorable
c. $143.75 favorable
d. $131.75 unfavorable
Answer and Explanation:
1. The computation of the material price variance is shown below:
= Actual Quantity × (Standard Price - Actual Price)
= 1,000 × ($20 - $19)
= $1,000 favorable
2. The computation of the direct material efficiency variance is shown below:
= Standard Price × (Standard Quantity - Actual Quantity)
= $20 × (3,000 pounds × 0.30 pounds - 1,000)
= $20 × (900 - 1,000)
= $2,000 unfavorable
3.The computation of the labor price variance is shown below:
= Actual Hours × (Actual rate - standard rate)
= 625 × ($11.75 per hour - $12 per hour)
= 625 × $0.25 per hour
= $156.25 favorable
4. The computation of the labor efficiency variance is shown below:
= Standard Rate × (Actual hours - Standard hours)
= $12 per hour × (625 hours - 3,000 containers × 0.20 hours)
= $12 per hour × 25 hours
= $300 unfavorable
If the standard cost is more than actual one so it would be favorable variance e and if the actual cost is more than the standard one so it would be unfavorable variance
Final answer:
The direct material price variance is $1,000 favorable, the direct material efficiency variance is $2,000 unfavorable, the direct labor price variance is $156.25 favorable, and the direct labor efficiency variance is $300 unfavorable.
Explanation:
To calculate the variances, we'll have to apply standard costing methods.
Direct Material Price Variance
The formula for this is (Actual Price - Standard Price) x Actual Quantity. Given the actual price is $19 and the standard price is $20, for 1,000 pounds, the direct material price variance is ($19 - $20) x 1,000 = -$1,000. This result is favorable since the actual price is less than the standard price.
Direct Material Efficiency Variance
This is calculated by (Actual Quantity - Standard Quantity) x Standard Price. The standard quantity for 3,000 containers is 3,000 x 0.30 pounds = 900 pounds. So, the variance is (1,000 - 900) x $20 = $2,000 which is unfavorable because more materials were used than the standard.
Direct Manufacturing Labor Price Variance
The formula is (Actual Hourly Rate - Standard Hourly Rate) x Actual Hours Worked. Substituting the values, we get ($11.75 - $12) x 625 = -$156.25, which is a favorable variance since the actual wage rate is less.
Direct Manufacturing Labor Efficiency Variance
The formula is (Actual Hours - Standard Hours) x Standard Rate. Standard hours for 3,000 containers are 3,000 x 0.20 hours = 600 hours. The variance is (625 - 600) x $12 = $300, which is unfavorable as more hours were worked than the standard.
Jan is an average salesperson. She tends to make her sales quota four out of every five months. Last month she closed the largest sale that her company has ever made in its history. Even though there is no indication that she is now an exceptional salesperson, her supervisor ranked her as one. This is an example of how a ____ error can influence a performance appraisal.
Answer:
RECENCY
Explanation:
In simple words, Recency failure or error refers to the inaccuracy or mistake in performance assessment or work interview, induced by the dependence of the assessor or even the moderator on the actions of the worker or the candidate's most current instances. Recency discrimination arises when supervisors assess an individual on the basis of their latest results-ignoring the complete picture.
In order to sell a product at a profit the product must be priced higher than the total of what it costs you to build the unit, plus period expenses, and plus overhead. At the end of last year the broad cost leader Baldwin had an Elite product Buzz. Use the Inquirer's Production Analysis to find Buzz's production cost, (labor+materials). Exclude possible inventory carrying costs. Assume period expenses and overhead total 1/2 of their production cost. What is the minimum price the product could have been sold for to cover the unit cost, period expenses, and overhead? Select: 1 $32.17 $10.72 $35.00 $21.45
The minimum price to sell a product at a profit should cover the unit production cost (labor + materials) and half of the production cost, assumed to be period expenses and overhead. Without specific figures, a precise answer can't be given, but the described method helps in calculating the minimal selling price.
Explanation:The information provided in the question doesn't contain enough specific details to calculate the minimum price the product Buzz could have been sold for to cover the unit cost, period expenses, and overhead. However, the calculation procedure would involve adding the unit production cost (labor + materials) and half of the production cost as it's assumed to be period expenses and overhead. The resultant figure would give the minimum price at which the product would need to be sold to just cover these costs.
For example, if the unit cost to produce Buzz is $10 and the period expenses and overhead total up to 1/2 of the production cost. Then, the minimum sale price would be unit cost ($10) + 0.5 unit cost ($5) = $15. This is just an example using hypothetical figures as we don't have the actual data.
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Pacific Cruise Lines is a defendant in litigation involving a swimming accident on one of its three cruise ships. Required: 1. The likelihood of a payment occurring is probable, and the estimated amount is $1.22 million. 2. The likelihood of a payment occurring is probable, and the amount is estimated to be in the range of $1.02 to $1.22 million. 3. The likelihood of a payment occurring is reasonably possible, and the estimated amount is $1.22 million. 4. The likelihood of a payment occurring is remote, while the estimated potential amount is $1.22 million. Record the necessary entry for the scenarios given above. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions. For example, $5.5 million should be entered as 5,500,000.)
Answer:
1.31-Dec
Dr Loss 1.22 million
Cr Contingent Liability 1.22 million
2.31-Dec
Dr Loss 1.02 million
Cr Contingent Liability 1.02 million
3. Disclosure Required
4. No Disclosure
Explanation:
Pacific Cruise Lines Journal entry
1.31-Dec
Dr Loss 1.22 million
Cr Contingent Liability 1.22 million
2.31-Dec
Dr Loss 1.02 million
Cr Contingent Liability 1.02 million
3. Disclosure Required
4. No Disclosure
The risk-free rate of return is 2% and the expected return on the market portfolio is 8%. Oklahoma Oilco has a beta of 2.0 and a standard deviation of returns of 26%. Oilco's marginal tax rate is 35%. Analysts expect Oilco's net income to grow by 12% per year for the next 5 years. Using the capital asset pricing model, what is Oklahoma Oilco's cost of common stock
Answer:
The multiple choices are as follows:
18.6%
14.0%
22.8%
25.0%
The second option is the correct answer,14%
Explanation:
The capital asset pricing asset model formula for computing a firm's cost of equity according to Miller and Modgiliani is given below:
Ke=Rf+Beta*(Mr-Rf)
Rf is the risk free of 2% which is the return expected from zero risk investment such as government treasury bills.
Beta is how risky an investment in a company is compared to similar businesses operating in similar business sector of the company given as 2.0
Mr is the expected return on market portfolio which 8%
Ke=2%+2*(8%-2%)
Ke=2%+2*(6%)
Ke=2%+12%=14%
Coastal Shores Inc. (CSI) was destroyed by Hurricane Fred on August 5, 2021. At January 1, CSI reported an inventory of $171,000. Sales from January 1, 2021, to August 5, 2021, totaled $481,000 and purchases totaled $196,000 during that time. CSI consistently marks up its products 65% over cost to arrive at a selling price. The estimated inventory loss due to Hurricane Fred would be: Multiple Choice $141,575. $75,485. $79,485.
Answer:
$75,485
Explanation:
The computation of the estimated inventory loss is shown below:
Goods lost = Cost of Goods available for sale - Cost of Goods Sold
where,
Cost of Goods available for sale = Inventory + Purchases
= $171,000 + 196,000
= $367,000
And,
Cost of Goods Sold is
= $481,000 ÷ 165%
= $291,515
So, the estimated inventory loss is
= $367,000 - $291,515
= $75,485
Sandhill Company is preparing its manufacturing overhead budget for 2020. Relevant data consist of the following. Units to be produced (by quarters): 10,700, 13,000, 14,900, 16,600. Direct labor: Time is 1.7 hours per unit. Variable overhead costs per direct labor hour: indirect materials $0.80; indirect labor $1.20; and maintenance $0.60. Fixed overhead costs per quarter: supervisory salaries $36,850; depreciation $17,010; and maintenance $13,350. Prepare the manufacturing overhead budget for the year, showing quarterly data. (Round overhead rate to 2 decimal places, e.g. 1.25. List variable expenses before fixed expense.) SANDHILL COMPANY Manufacturing Overhead Budget Quarter 1 2 3 4 Year $ $ $ $ $ $ $ $ $ $ Direct labor hours Manufacturing overhead rate per direct labor hour $
Answer :
Total manufacturing overhead = $512,824
Direct labor hours = 93,840
Manufacturing overhead rate per direct labor hour = $5.46
Explanation :
As per the data given in the question,
Sandhill company
Manufacturing Overhead Budget
Particulars Quarter
1 2 3 4 Year
Units produced 10,700 13,000 14,900 16,600 55,200
Variable cost:
Indirect material at $0.80 $14,552 $17,680 $20,264 $22,576 $75,072
indirect labor at $1.20 $21,828 $26,520 $30,396 $33,864 $112,608
Maintenance cost at $0.60 $10,914 $13,260 $15,198 $16,932 $56,304
Total variable cost $47294 $57,460 $65,858 $73,372 $243,984
Fixed cost:
Supervisors salary $36,850 $36,850 $36,850 $36,850 $147,400
Depreciation $17,010 $17,010 $17,010 $17,010 $68,040
Maintenance $13,350 $13,350 $13,350 $13,350 $53,400
Total fixed cost $67,210 $67,210 $67,210 $67,210 $268,840
Total manu. overhead $114,504 $124,670 $133,068 $140,582 $512,824
Direct labor hours 18,190 22,100 25,330 28,220 93,840
Manufacturing overhead rate per direct labor hour $5.46
A government leader determines that the 5% unemployment rate is too high. She asks her staff to research policy options to reduce the rate and a few weeks later is given four options. Each option would reduce the rate by a different amount and at a different cost. The leader studies the options and chooses the one she feels is best for the country. In order, what types of analysis were used in this three-stage chain of events?
Answer:
4 alnylisssss
Explanation:
On January 1, 2018, Nana Company paid $100,000 for 8,000 shares of Papa Company common stock. The ownership in Papa Company is 10%. Nana Company does not have significant influence over Papa Company. Papa reported net income of $52,000 for the year ended December 31, 2018. The fair value of the Papa stock on that date was $45 per share. What amount will be reported in the balance sheet of Nana Company for the investment in Papa at December 31, 2018
Answer:
$360,000
Explanation:
As per the data given in the question,
Nana company paid = $10,000
Number of share = 8,000
Ownership in Papa company = 10%
Net Income = $52,000
Value = $45 per share
The amount will be reported in balance sheet of Nana company for the investment in Papa company = Value × Number of shares
= $45 × 8000 share
= $360,000
A dynamic capability is the Group of answer choices functional and operating resources management process. ongoing capability to understand and establish a rival commitment to resource alignment. most compelling product or service a firm. improvement evaluation process for eliminating waste in the firm. ongoing capacity to modify existing resources and capabilities to create new ones.
Answer:
ongoing capacity to modify existing resources and capabilities to create new ones.
Explanation:
A dynamic capabilities can be simply defined as the ability of an organisation or firm to blend, build and reshape both the internal and external aspect of an organisation so as to get/produce an outcome that is needed by the organisation/firm. it is a series of processes in organisations that brings about a required needed outcome. DC gives organisation an advantages or an edge over others as companies or organisations has restructured/reconfigure their organisation for better performance.
On July 1, 20Y1, Danzer Industries Inc. issued $50,000,000 of 10-year, 8% bonds at a market (effective) interest rate of 10%, receiving cash of $43,768,920. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.
Required:
1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1.*
2. Journalize the entries to record the following:*
a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond discount, using the straight-line method. (Round to the nearest dollar.)
b. The interest payment on June 30, 20Y2, and the amortization of the bond discount, using the straight-line method. (Round to the nearest dollar.)
3. Determine the total interest expense for 20Y1.
4. Will the bond proceeds always be less than the face amount of the bonds when the contract rate is less than the market rate of interest?
5. Compute the price of $43,768,920 received for the bonds by using the present value tables. (Round to the nearest dollar.)
*Refer to the Chart of Accounts for exact wording of account titles.
The journal entries have been provided for the issuance of bonds, and the semiannual interest payments. The total expense for 20Y1 is $2,188,448. Indeed, the bond proceeds will always be less than the face amount when the contract rate is less than the market rate.
Explanation:Firstly, the journal entry to record the cash proceeds from the issuance of the bonds on July 1, 20Y1 would be:https://brainly.com/question/33477032
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The questions involve the issuance of bonds and calculation of interest and amortization. It first requires recording the transaction and then calculating and recording the interest payments and bond discount amortizations. It finally requires calculating the interest expense and confirms that bond proceeds will be less if contract rate is less than market rate.
Explanation:The subject of this question is the understanding of bond issuance and bond interest payments, which falls under Business, specifically Financial Accounting. Here are the answers to these segments of your question:
On July 1, 20Y1, the journal entry will be:
Debit: Cash $43,768,920
Credit: Bonds payable $50,000,000
Credit: Discount on Bonds payable $6,231,080.
a. The first semiannual interest payment is calculated by multiplying the face value of the bonds ($50,000,000) by the contract interest rate (8%) and dividing by 2 (as interest is paid semiannually). This gives us $2,000,000.
The amortization of the bond discount using the straight-line method is calculated by dividing the total discount ($6,231,080) by the no. of periods (20), which gives us $311,554 (rounded to the nearest dollar).
The journal entry on December 31, 20Y1 would be:
Debit: Interest expense $2,311,554
Credit: Cash $2,000,000
Credit: Discount on bonds payable $311,554.
b. The journal entry on June 30, 20Y2 would be identical to the one on Dec 31, 20Y1.
Total interest expense for 20Y1 is $2,311,554.
Yes, the bonds proceeds will always be less than the face value if the contract rate is less than the market rate.
The price received ($43,768,920) is already the present value of the bonds calculated using market interest rate.
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Iverson Company purchased a delivery truck for $45,000 on January 1, 2018. The truck was assigned an estimated useful life of 100,000 miles and has a residual value of $10,000. The truck was driven 18,000 miles in 2018 and 22,000 miles in 2019. Compute depreciation expense using the units-of-activity method for the years 2018 and 2019. Depreciation expense for 2018$ Depreciation expense for 2019
Answer:
Depreciation expense for 2018 is $6,300.
Depreciation expense for 2019 is $7,700.
Explanation:
The unit-of-production method also known as units-of-activity method is used when the asset value closely relates to the units of output it is able to produce. It is expressed with the formula below:
(Original Cost - Salvage value) / Estimated production capacity x Units/year
At Year 2018, depreciation expense (DE) is: ($45,000 - $10,000) / 100,000 miles x 18,000 miles = $6,300/year
At Year 2019, depreciation expense (DE) is: ($45,000 - $10,000) / 100,000 miles x 22,000 miles = $7,700/year
Accumulated depreciation for 2 years is $6,300 + $7,700 = $14,000.
Note that this depreciation method results in higher depreciation charge when the asset is heavily used, at this time, it was in Year 2019.
The NBV under this method is: $45,000 - $14,000 = $31,000.
Teller Co. is planning to sell 900 boxes of ceramic tile, with production estimated at 870 boxes during May. Each box of tile requires 44 pounds of clay mix and a quarter hour of direct labor. Clay mix costs $0.40 per pound and employees of the company are paid $12.00 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Teller has 3,900 pounds of clay mix in beginning inventory and wants to have 4,500 pounds in ending inventory. What is the total amount to be budgeted in pounds for direct materials to be purchased for the month?
A) 38,280
B) 37,680
C) 38,880
D) 40,200
Answer:
Total= 38,880 pounds
Explanation:
Giving the following information:
Production= 870 units
Required quantity= 44 pounds of clay
Beginning inventory= 3,900 pounds
Desired ending inventory= 4,500 pounds.
To calculate the direct material quantity required, we need to use the following structure:
Budgeted direct material (in pounds):
Production= 870*44= 38,280
Desired ending inventory= 4,500
Beginning inventory= (3,900)
Total= 38,880 pounds
Final answer:
The total amount to be budgeted for direct materials to be purchased for the month by Teller Co. is 38,880 pounds of clay mix, determined by calculating production needs, adjusting for desired ending inventory, and considering the current inventory levels. Option C is correct.
Explanation:
To calculate the total amount to be budgeted for the direct materials to be purchased for the month by Teller Co., we first need to determine the total amount of clay mix needed for production. The company is planning to sell 900 boxes of ceramic tile and estimates production at 870 boxes in May. Each box requires 44 pounds of clay mix.
The total clay mix required for production is 870 boxes × 44 pounds/box, which equals 38,280 pounds. Teller Co. wants to have an ending inventory of 4,500 pounds of clay mix and has an existing beginning inventory of 3,900 pounds. To calculate the total clay mix to be purchased, we add the desired ending inventory to the amount required for production and subtract the beginning inventory: 38,280 pounds (for production) + 4,500 pounds (desired ending inventory) - 3,900 pounds (beginning inventory) equals 38,880 pounds to be purchased.
Exercise 09-8 Departmental income statement and contribution to overhead LO P3 Jansen Company reports the following for its ski department for the year 2019. All of its costs are direct, except as noted. Sales $ 605,000 Cost of goods sold 425,000 Salaries 112,000 ($15,000 is indirect) Utilities 14,000 ($3,000 is indirect) Depreciation 42,000 ($10,000 is indirect) Office expenses 20,000 (all indirect) 1. Prepare a departmental income statement for 2019. 2. & 3. Prepare a departmental contribution to overhead report for 2019. Based on these two performance reports, should Jansen eliminate the ski department?
Answer and Explanation:
The Preparation of departmental contribution to overhead report is shown below:-
Departmental income statement for 2019
Sales $605,000
Less: Cost of goods sold ($425,000)
Less: Salaries ($112,000)
Less: Utilities ($14,000 )
Less: Depreciation ($42,000 )
Less: Office Expense ($20,000)
Net income (loss) ($8,000)
The Preparation of departmental contribution to overhead report is shown below:-
Sales $605,000
Less: Direct Expenses:
Cost of goods sold ($425,000)
Salaries ($97,000)
($112,000 - $15000)
Utilities ($11,000)
($14,000 - $3000)
Depreciation ($32,000)
($42,000 - $10,000)
Contribution to overhead $40,000
The Ski department of Jansen Company is profitable with a net income of $40,000 and contributes $48,000 to overhead costs. Therefore, it may not be beneficial for Jansen to consider eliminating it.
To prepare the departmental income statement for 2019, and the departmental contribution to overhead report for 2019 for Jansen's Ski department, we first need to separate the direct and indirect costs.
Here's the departmental income statement for 2019:
Sales: $605,000Cost of Goods Sold: $425,000Gross Profit: $180,000 (Sales - COGS)Direct Salaries: $97,000 ($112,000 - $15,000)Direct Utilities: $11,000 ($14,000 - $3,000)Direct Depreciation: $32,000 ($42,000 - $10,000)Net Income: $40,000 (Gross Profit - Direct Costs)And here's the departmental contribution to overhead report for 2019:
Indirect Salaries: $15,000Indirect Utilities: $3,000Indirect Depreciation: $10,000Office Expenses: $20,000Total Contribution to Overhead: $48,000Given the net income of $40,000 and the contribution to overhead of $48,000, it may not be beneficial for Jansen to consider eliminating the ski department.
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Your local grocery store offers a coupon that reduces the price of milk during the coming week. The regular retail price of milk in the store is $3.00 per gallon, and the coupon price is $2.00 per gallon for the next week. If the store maximizes profits and the price elasticity of demand for milk is -2 for coupon users, what is the price elasticity of demand for non-users?
Final answer:
Without additional data on the change in quantity demanded by non-coupon users, the price elasticity of demand for milk among non-users cannot be determined. Price elasticity for coupon users is -2, indicating high responsiveness to price changes.
Explanation:
The student's question pertains to the concept of price elasticity of demand, which measures how much the quantity demanded of a good responds to a change in the price of that good. The provided coupon causes a decrease in the price of milk from $3.00 to $2.00 per gallon for coupon users, and given the price elasticity of demand is -2 for them, it implies that the quantity demanded by these users is highly responsive to price changes.
Understanding that, for the non-coupon users, the price elasticity of demand would depend on how their quantity demanded changes with price. However, the exact value cannot be determined from the given information without additional data regarding the change in quantity demanded by non-users when the price remains at $3.00. Typically, demand elasticity varies according to factors such as the availability of substitutes, the proportion of income spent on the good, and the period considered. Detailed data is necessary to accurately calculate the price elasticity for non-users.
"In a long-run equilibrium, price is equal to average total cost." This statement applies to A. perfectly competitive markets, but not to monopolistically competitive markets or monopolies. B. perfect competitive and monopolistically competitive markets, but not to monopolies. C. perfect competitive markets, monopolistically competitive markets, and monopolies. D. None of the above is correct.
Answer:
C) perfect competitive markets, monopolistically competitive markets, and monopolies.
Explanation:
In economics, the short run is defined as a period of time where at least one (or more) of the factors of production is fixed, e.g. production facilities, equipment, etc.
The long run refers to a period of time where no factor of production is fixed, meaning that all costs are variable.
Short run and long run are not definite time periods, they can last a few months to several years.
These concepts apply to all markets, and in all types of markets (perfect competition, monopolistically competitive and monopolies) the long run average total cost will equal the price. At that point the firms will all be maximizing their accounting profits (because output will be located where marginal cost = average total cost = total variable cost) but making $0 economic profits.
The statement applies to both perfectly competitive and monopolistically competitive markets, but not to monopolies. This is because perfectly competitive and monopolistically competitive markets adjust to a point where price equals average total cost in the long run, while monopolies, having control over price, do not necessarily reach this point.
Explanation:The statement "In a long-run equilibrium, price is equal to average total cost" applies to both perfectly competitive and monopolistically competitive markets but not to monopolies. So the correct answer is B. Perfect competitive and monopolistically competitive markets, but not to monopolies.
In perfectly competitive markets, firms are price takers and do not have control over the price. They can only adjust output level to maximise profit. In the long run, new firms will enter or existing firms will exit until price equals the minimum point of the average total cost.
Similarly, in monopolistically competitive markets, firms will also reach a point where price equals average total cost in the long run. However, monopolies do not necessarily reach this point because they have control over price, hence they can make profits even in the long run.
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Standard variable overhead rate $2 per machine hour Standard fixed overhead rate $1 per machine hour Actual variable overhead costs $390,000 Actual fixed overhead costs $175,000 Budgeted fixed overhead costs $190,000 Standard machine hours per unit produced 10 Good units produced 18,000 Actual machine hours 200,000 Using the above information provided for Underfoot Products, compute the fixed overhead budget variance.
Answer:
Fixed overhead budget variance = $15,000 favorable
Explanation:
The fixed overhead budget variance is the difference between the budgeted fixed overhead expenditure and the actual fixed overhead for a given period of time.
Where the actual amount of expenditure exceeds the budgeted it is unfavorable variance, a favorable variance implies the opposite.
$
Budgeted fixed overhead 190,000
Actual fixed overhead 175,000
Budget Variance 15,000 favorable
Fixed overhead budget variance = $15,000 favorable
Fallsview Glatt Kosher Caterers ran a business that provided travel packages, including food, entertainment, and lectures on religious subjects, to customers during the Passover holiday at a New York resort. Willie Rosenfeld verbally agreed to pay Fallsview $24,050 for the Passover package for himself and his family. Rosenfeld did not appear at the resort and never paid the money owed. Fallsview sued Rosenfeld for breach of contract. Rosenfeld claimed that the contract was unenforceable because it was not in writing and violated the UCC’s Statute of Frauds. Is the contract valid? Explain.
Answer: The Contract is valid.
Explanation:
Under the UCC’s Statute of Frauds, transactions above $500 for goods cannot be made orally alone and have to be written in writing as well. This is the law that Rosenfield relied on.
However, Fallsview can argue that the Passover Retreat is not a Good, but rather a Service in which case it does not fall under the Statute.
The main bone of contention thereby becomes, if indeed it is a service or a good.
If it is a Hybrid of both, then the Court needs to decide if the services outweigh the goods involved.
From the text we see that the following were included in the package, food, entertainment, and lectures on religious subjects.
Food is the only good there and is outweighed by Entertainment and lectures on religious subjects.
As such, the contract is valid as it is for more service than good.
The contract between Rosenfeld and Fallsview may be valid despite not being in writing. This depends on whether the service package provided by Fallsview is interpreted as a 'sale of goods' under the UCC's Statute of Frauds, which typically requires a written contract. Proof of the agreement by other means could also make the contract enforceable.
Explanation:The contract's validity in this case depends on whether it falls under the Statute of Frauds, which is a part of the Uniform Commercial Code (UCC). The Statute of Frauds requires that certain contracts must be in writing to be enforceable, most commonly those concerning real estate transactions, contracts that cannot be performed within one year, and contracts for the sale of goods over $500. However, there are exceptions such as if the parties have begun performance of the contract, or if there is a specially manufactured good.
In this case, Fallsview Glatt Kosher Caterers were providing a service package, and it can be argued that this does not strictly fall under the sale of goods. Therefore, it might not necessarily need to be in writing according to the UCC. Furthermore, if there is any proof of the verbal agreement such as witnesses, emails, or quotes, this could also make the contract enforceable. So, whether the contract is valid or not ultimately depends on the specific details of the case and how the courts interpret the UCC's Statute of Frauds in relation to this situation.
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You own a stock portfolio invested 30 percent in Stock Q, 30 percent in Stock R, 30 percent in Stock S, and 10 percent in Stock T. The betas for these four stocks are .82, 1.20, 1.21, and 1.38, respectively. What is the portfolio beta?
Answer:
1.11
Explanation:
The computation of portfolio beta is shown below:-
Portfolio Beta = (Percentage of stock Q × beta of Q) + (Percentage of stock R × Beta of R) + (Percentage of stock S × Beta of S) + (Percentage of stock T × Beta of T)
= (30% × 0.82) + (30% × 1.20) + (30% × 1.21) + (10% × 1.38)
= (0.30 × 0.82) + (0.30 × 1.20) + (0.30 × 1.21) + (0.10 × 1.38)
= 0.246 + 0.36 + 0.363 + 0.138
= 1.11
So, for computing the portfolio beta we simply applied the above formula.
A covered call position is A. the simultaneous purchase of the call and the underlying asset. B. the purchase of a share of stock with a simultaneous sale of a put on that stock. C. the short sale of a share of stock with a simultaneous sale of a call on that stock. D. the purchase of a share of stock with a simultaneous sale of a call on that stock. E. the simultaneous purchase of a call and sale of a put on the same stock.
Answer:
D. the purchase of a share of stock with a simultaneous sale of a call on that stock.
Explanation:
A covered call position is the purchase of a share of stock with a simultaneous sale of a call on that stock. A covered call position is created in the financial market when investors buy stock and sell call options on a share for share basis. It is the same as a short put, stock plus a short call.
Under covered call, investors having a long-position in an asset has the inherent obligation of writing call options on that same asset because they feel that underlying stock price won't rise anytime soon but wish to increase income getting call option premiums.
What are two types of goods/services that lend themselves well to price competition
Final answer:
Goods or services well suited for price competition include generic groceries and basic apparel due to minimal product differentiation. Price competition leads firms to focus on offering the lowest possible prices to attract customers, especially in industries like airlines and electronics.
Explanation:
Two types of goods or services that lend themselves well to price competition are generic groceries and basic apparel. These industries have minimal product differentiation, leading to competition primarily on price. Within the grocery industry, items like sugar, flour, and bottled water are often seen as commodities where consumers are likely to choose the lowest-priced option. Similarly, for basic apparel, such as white t-shirts or socks, there is little differentiation, which creates a focus on price competitiveness.
Price competition is a market condition where multiple businesses offer similar products to the same customers, leading to a focus on lowering prices to attract consumers. This dynamic is evident in industries where product differentiation is minimal, and goods are viewed as interchangeable from various suppliers. Examples include airlines and electronics, where companies vigorously compete on price, sales, and discounts to draw customers.
Finally, it's worth noting that strong competition can also exist when the public sector competes with the private sector for the provision of goods and services, as in the case of public and private schools or hospitals. However, the intensity of competition might differ due to various factors, such as regulation and funding.
Huskie Manufacturing has two major product lines, Black and Red. Income statements for the two product lines follow: Black Red Revenues $500,000 $400,000 Variable costs 300,000 150,000 Product line fixed costs 130,000 100,000 Allocated corporate fixed costs 120,000 90,000 Operating income (loss) $(50,000) $60,000 If the Black product line were dropped, all of its product line fixed costs could be avoided. Should the Black product line be dropped, and why
Answer:
Black product line should not be dropped.
If the product line is dropped, this would reduce the Huskie's entire profit by $70,000.
Explanation:
To determine the the impact of dropping the Black product line, we will consider the relevant cash flows associated with decision. These include;
$
Lost contribution from dropping the product
(500,000 -300,000) (200,000)
Savings in line fixed cost 130,000
Net contribution lost (70,000)
Going by the above analysis, it is obvious that Product line contributes $70,000 toward the recovering of the allocated corporate fixed cost of 210,000 i.e. (120,000 +90,000).
Therefore, if the product kine is dropped, this would reduce the Huskie's entire profit by $70,000.
Black product line should not be dropped.
AFN equation Broussard Skateboard's sales are expected to increase by 15% from $7.6 million in 2016 to $8.74 million in 2017. Its assets totaled $2 million at the end of 2016. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2016, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 4%, and the forecasted payout ratio is 55%. Use the AFN equation to forecast Broussard's additional funds needed for the coming year. Round your answer to the nearest dollar. Do not round intermediate calculations. $
Answer:
$7,680
Explanation:
Assets totaled ($2 million ×15%) $300,000
Less spontaneous liabilities affected by sales
($450,000 accounts payable+$450,000 accruals) ( $900,000×15%) ($135,000)
Less Sales increased
($8,740,000×0.04×0.45) $157,320
Addition funds needed $7,680
Or
AFN =
($2,000,000×15%-$900,000×15%×$8,740,000×0.04×0.45)
=$7,680
Therefore the forecast Broussard's additional funds needed for the coming year will be $7,680
You are a financial analyst for Ford Motor Company and have been asked to determine the impact of alternative depreciation methods. For your analysis, you have been asked to compare methods based on a machine that cost $106,000. The estimated useful life is 13 years and the estimated residual value is $2,000. The machine has an estimated useful life in productive output of 200,000 units. Actual output was 20,000 in Year 1 and 16,000 in Year 2. Required: 1. For years 1 and 2 only, prepare separate depreciation schedules assuming: (Do not round intermediate calculations and round your final answers to the nearest dollar amount.) a. Straight-line method.
Answer: Please refer to Explanation
Explanation:
a) Straight-line method.
For a straight line method, the depreciation is constant for all years and so is calculated as
Depreciation per year = (106,000 - 2,000) / 13 = 8,000 per year
That means both years 1 and 2 both have $8,000 as their Depreciation amounts.
The depreciation schedule has been attached to this answer.
b) Units of Production Method
Here we use the estimated useful life in productive output to find out how to depreciate machine.
The formula is,
Depreciation per unit = (106,000 - 2,000) / 200,000 = 0.52
That 0.52 is then used to depreciate per year in the following manner,
Year 1 = 20,000 x 0.52
= $10,400
Year 2 = 16,000 x 0.52
= $8,320
I have attached the schedule as well.
c) Double Declining Balance Method
This is an accelerated depreciation method that gets it's name because it goes at twice the rate of the Straight line method.
It is calculated by the following formula,
Depreciation rate = (1/13) x 2
= 15.38%
This 15.38% is then deducted from the balance per year.
Year 1 = 106,000 * 15.38%
= $16,307.69
Year 2 = (106,000 - 16,307.69) * 15.38%
= $13,798.82
Champs Sports Bar in State College, PA has decided to perform a total cost analysis on vodka suppliers. Consumption is currently 6,000 bottles per year. Demand is predicted to stay at that level for the next few years. The current supplier, Byron's, charges $9.50 per bottle and packs 288 bottles in a crate. The cost to ship the crate is $15. Another potential source of vodka is Pancho. Pancho charges $9.00 per bottle and ships 100 bottles in a crate at $20 per crate. Assume that a partial crate may be purchased. What is the total annual cost to supply vodka from the current supplier
Answer:
Annual total cost = $55,200
Explanation:
As per the data given in the question, computation are as follows:
Consumption = 6,000 bottles
Cost per bottle = $9
Cost = $9 × 6,000 bottles
= $54,000
Number of crates = 6,000 ÷ 100
= 60 crates
Cost per crate = $20
Total crate cost = $20 × 60 crates
=$1,200
Hence, Annual total cost = $54,000 + $1,200
= $55,200
Allen Boating Company manufactures special metallic materials and decorative fittings for luxury yachts that require highly skilled labor. Allen uses standard costs to prepare its flexible budget. For the first quarter of the year, direct materials and direct labor standards for one of their popular products were as follows: Direct materials: 1 pound per unit; $ 11 per pound Direct labor: 4 hours per unit; $ 17 per hour Allen produced 2 comma 000 units during the quarter. At the end of the quarter, an examination of the direct materials records showed that the company used 7 comma 500 pounds of direct materials and actual total materials costs were $ 99 comma 900. What is the direct materials efficiency variance?
Answer:
Direct material quantity (efficiency) variance= $60,500 unfavorable
Explanation:
Giving the following information:
Standards:
Direct materials: 1 pound per unit; $ 11 per pound
Allen produced 2,000 units during the quarter.
Direct material used= 7,500 pounds
To calculate the direct material efficiency variance, we need to use the following formula:
Direct material quantity (efficiency) variance= (standard quantity - actual quantity)*standard price
standard quantity= 2,000*1= 2,000 pounds
Direct material quantity (efficiency) variance= (2,000 - 7,500)*11
Direct material quantity (efficiency) variance= $60,500 unfavorable
It is unfavorable because the company used more materials that estimated to produce 2,000 units.
Show all your work. Indicate clearly the methods you use, because you will be scored on the correctness of your methods as well as on the accuracy and completeness of your results and explanations. At a financial institution, a fraud detection system identifies suspicious transactions and sends them to a specialist for review. The specialist reviews the transaction, the customer profile, and past history. If there is sufficient evidence of fraud, the transaction is blocked. Based on past history, the specialist blocks 40 percent of the suspicious transactions. Assume a suspicious transaction is independent of other suspicious transactions. (a) Suppose the specialist will review 136 suspicious transactions in one day. What is the expected number of blocked transactions by the specialist
Answer:
54.4
Explanation:
According to the scenario, computation of the given data are as follows:-
We can calculate the Expected Number of Blocked Transactions by using following formula:-
Probability of the specialist blocked the suspicious transactions(P) = 40%
= 40/100 =0.40
Number of the suspicious transactions reviewed(N) = 136
Expected Number of Blocked Transactions by the Specialist = P × N
= 0.40 × 136
= 54.4
Suppose the specialist will review 136 suspicious transactions in one day.
The expected number of blocked transactions by the specialist will be 54.4.
The expected number of blocked transactions is calculated using following
below:
Probability of the specialist blocked the suspicious transactions (P) is 40% = 40/100 =0.4The number of suspicious transactions reviewed(N) = 136Therefore the expected Number of Blocked Transactions by the Specialist
= P × N
= 0.40 × 136
= 54.4.
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