Answer:
(A) Unit variable costs fluctuate and unit fixed costs remain constant.
Explanation:
The fixed costs are the costs which have to be incurred always, irrespective of what the output produced is by the firm. For instance, a firm always has to charge depreciation on its fixed assets, pay salary to the premises staff and pay fixed salary to the managers for managing etc, irrespective of whatever output it produces.
Variable costs are the costs which vary with the level of output produced activity. For example, if more output is produced more will be the raw material payments, more will be the manufacturing related other expenses and more will be the wages paid to the labour etc and vice-versa.
Hence, thereby the per unit variable costs fluctuate and unit fixed costs remain constant.
Variable costs change with the level of production, whereas fixed costs stay constant regardless of production levels. The correct answer to the question is 'A': Unit variable costs fluctuate and unit fixed costs remain constant.
Explanation:The difference between variable costs and fixed costs can be understood in terms of their behavior with respect to changes in the level of production or business activity. A variable cost changes in proportion to the level of production. On the other hand, fixed costs remain constant regardless of the level of production. Whether production increases or decreases, fixed costs do not change within a specific period. As such, answer 'A' is accurate: Unit variable costs fluctuate and unit fixed costs remain constant.
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A survey found that 69 percent of MBA students view maximizing shareholder value as the pri- mary responsibility of a company. Do you agree? What do you think this finding suggests about the ethical and socially responsible stance of cor- porate managers over the next couple of decades? .
Answer:
I agree
Explanation:
Social and ethical responsibilities: There are various parameters grounded on which the company or the firm should enact fro the benefit of the society. A firm need to consider the parameters while taking the decisions of the business as this will benefit the environment as well as the business economy.
The focus on the shareholders has rise as the companies are being concerned. At present there are a lot of completion and limit or restriction to managerial or technical edge, one could achieve over the competitors.
If the shareholders are with the company or firm, then the company or the firm is bound to grow, otherwise the company has many chances to fail.
Keeping the shareholders with the company, very much grounded on that how the company deals or handles them as there is more than a shareholder look from the company or the firm beyond the financial interest.
Final answer:
The survey result reflects a traditional focus on maximizing shareholder value among MBA students, aligning with Milton Friedman's views. However, evolving perspectives on corporate social responsibility suggest that future corporate managers may adopt more ethically and socially responsible approaches, balancing the interests of various stakeholders.
Explanation:
The finding that 69 percent of MBA students view maximizing shareholder value as the primary responsibility of a company suggests a traditional adherence to Milton Friedman's principle that the social responsibility of business is to increase its profits. However, this approach has been challenged by the evolving concept of corporate social responsibility (CSR), where the interests of all stakeholders, including employees, customers, and the community at large, are considered alongside those of shareholders.
The shift from shareholder primacy towards more inclusive stakeholder theory reflects a broader understanding of a company's role in society, suggesting that future corporate managers may adopt more ethically and socially responsible stances by balancing the interests of various stakeholders.
Modern debates in business ethics underscore the need for companies to operate not merely for profit maximization but also in a manner that is sustainable and responsible towards society. The Business Round table's endorsement of a modern standard for corporate responsibility, which emphasizes delivering value to all stakeholders, marks a significant shift from the longstanding principle of shareholder primacy.
This evolution suggests that corporate managers over the next couple of decades will likely place greater emphasis on ethical considerations and social responsibilities, going beyond the traditional focus on maximizing shareholder value.
Hedge funds are low risk because they are market-neutral. low risk if they buy Treasury bonds. low risk because they hedge their investments. high risk because they are market-neutral. high risk, even though they may be market-neutral.
Answer:
Hedge funds are: high risk, even though they may be market-neutral.
Ace Industries has a current assets equal to $3 illion . the company's current ratio is 1.5. and its quick ratio is 1.0.
What is the firm's level of current liabilities?
What is the firm's level of inventories?
Answer:
$2,000,000
$1,000,000
Explanation:
We know that
Current ratio = Total Current assets ÷ total current liabilities
1.5 = $3,000,000 ÷ total current liabilities
So, the total current liabilities would be
= $2,000,000
And
Quick ratio = Quick assets ÷ total current liabilities
1.0 = Quick assets ÷ $2,000,000
Quick assets = $2,000,000
So, the inventory would be
= Total current assets - quick assets
= $3,000,000 - $2,000,000
= $1,000,0000
Who among the following persons said, "The social responsibility of business is to increase profits"? a. Kindle Jarry b. Please Mr. Postmanc. Ronald Postmad. Milton Friedman
Answer:
D: Milton Friedman
Explanation:
''The social responsibility of business is to increase profits'' pronounced by Milton Friedman. Friedman declares that a businessman when he announces that business is not involved only with profit but also with developing social boundaries means that he is supporting free enterprise. This social responsibility is defined as Corporate Social Responsibility, which is the faith that “corporations owe a greater duty to their communities and stakeholders” by owning a “social duty.”
Given the following information, determine the cost of goods manufactured and the cost of goods sold for the year ended December 31, 20X9.
Direct labor incurred $126,000
Manufacturing overhead incurred 359,000
Direct materials used 271,000
Finished goods inventory, 1/1/20X9 395,000
Finished goods inventory, 12/31/20X9 442,000
Work in process inventory, 1/1/20X9 193,000
Work in process inventory, 12/31/20X9 218,000
Answer:
$731,000 and $684,000
Explanation:
The computations are shown below:
For cost of goods manufactured
= Direct materials used + Direct labor cost + Manufacturing overhead incurred + opening work-in-process inventory - closing work-in-process inventory
= $271,000 + $126,000 + $359,000 + $193,000 - $218,000
= $731,000
For cost of goods sold
= Opening finished goods Inventory + Cost of goods manufactured - Ending finished goods Inventory
= $395,000 + $731,000 - $442,000
= $684,000
Which of the following equations best represents the reporting shown in a statement of partnership equity? a.Beginning Balance of Partner Capital – Capital Additions – Net Income – Partner Withdrawals = Ending Balance of Partner Capital b.Ending Balance of Partner Capital + Capital Additions – Partner Withdrawals = Partnership Net Income c.Beginning Balance of Partner Capital + Capital Additions + Net Income – Partner Withdrawals = Ending Balance of Partner Capital d.Partner Withdrawals – Net Income – Partner Deficiency = Ending Balance of Partner Capital
Answer:
The correct answer is c. Beginning Balance of Partner Capital + Capital Additions + Net Income – Partner Withdrawals = Ending Balance of Partner Capital.
Explanation:
When a partnership is formed, all the partners invest capital as per their agreed share and that capital forms the Beginning balance of Partner Capital, after the partnership formation there is further capital investment by partners which should be added in the beginning balance. When the partnership business makes the profits, those profits or net income will be added to the capital account. When a partner withdraws some money, this is like he is extracting money from his investment in the business and share capital should reduce so the withdrawals should be subtracted. After all these actions we can have Ending Balance of Partner Capital.
The equation that best represents the reporting shown in a statement of partnership equity is c. Beginning Balance of Partner Capital + Capital Additions + Net Income - Partner Withdrawals = Ending Balance of Partner Capital.
Explanation:The equation that best represents the reporting shown in a statement of partnership equity is c. Beginning Balance of Partner Capital + Capital Additions + Net Income - Partner Withdrawals = Ending Balance of Partner Capital.
In a statement of partnership equity, the beginning balance of partner capital is the initial capital contributed by each partner. Capital additions represent any additional investments made by the partners. Net income is the total profit earned by the partnership. Partner withdrawals are the amounts taken out by the partners for personal use. The ending balance of partner capital is the remaining capital after accounting for additions, income, and withdrawals.
Just before Johnson Laboratories opened for business, Howard Johnson, the owner, had the following assets and liabilities. Cash $ 39,600 Laboratory Equipment 74,700 Laboratory Supplies 5,900 Loan Payable 14,200 Accounts Payable 9,650 Determine the totals that would appear in the firm’s fundamental accounting equation.
Answer:
Assets $ 120,200
Liabilities $ 23,850
Owners Equity $ 96,350
Explanation:
Assets comprise of the following components:
Cash $ 39,600
Laboratory Supplies $ 5,900
Laboratory Equipment $ 74,700
Total Assets $ 120,200
Liabilities comprise the following components:
Accounts Payable $ 9,650
Loan Payable $ 14,200
Total Liabilities $ 23,850
Since Johnson Laboratories is just starting its business, there would be no income statement items. It is safe to assume that the balance of assets and liabilities is the Owners' Equity.
There are 39 employees in a particular division of a company. Their salaries have a mean of $70,000, a median of $55,000, and a standard deviation of $20,000. The largest number on the list is $100,000. By accident, this number is changed to $1,000,000. What is the value of the mean after the change
Answer:
The new mean is 93,076
Explanation:
To solve this question we first need to find the total salary of all the employees combined. For that we will multiply the mean by the number of employees. The mean is 70,000 and number of employees are 39 so the total salary is
(70,000*39)=2,730,000. Now in order to find the new mean we first have to deduct 100,000 from this number and add 1,000,000 to it. (2,730,000-100,000+1,000,000)=3,630,000
In order to find the new mean we will divide 3,630,000 by 39
3,630,000/39= 93,076
Answer:
The value of the mean after the change is $93,076.92
Explanation:
given:
- 39 employees
- mean of $70,000
- median of $55,000
- standard deviation of $20,000
- largest number is $100,000 changed to $1,000,000
want: the value of the mean after the change
39 employees ($70,000) - $100,000 + $1,000,000
------------------------------------------------------------------------- = 93076.9231
39
Explain why taking a monotonic transformation of a utility function does not change the marginal rate of substitution (MRS).
The Marginal Rate of Substitution (MRS) is not affected by monotonic transformations of the utility function as MRS is determined by relative preferences, not absolute utility levels. Monotonic transformations preserve this preference order, leaving MRS unchanged. This preference-based nature of MRS is evident in consumer's utility-maximizing choices and the impact of price changes.
Explanation:In your question, you're asking why taking a monotonic transformation of a utility function does not change the marginal rate of substitution (MRS). The MRS is a concept in microeconomics that represents the rate at which a consumer can give up one good in exchange for another good while maintaining the same level of utility. MRS depends only on the relative preferences between two goods, not the actual level of utility. Hence, a monotonic transformation, which preserves the preference order, does not change the MRS.
For example, consider a budget constraint where the total price of the two goods remains the same. Let's say at an optimal choice, the ratio of marginal utility to price for two goods matches. If we apply a monotonic transformation to the utility function, the new utility levels will preserve the original preference order. Meaning, our optimal choice won't change since it's determined by where the MRS equals to the price ratio, not the absolute utility levels.
The utility-maximizing choice along a budget constraint will be the point of tangency where the budget constraint touches an indifference curve at a single point.
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Famaâs Llamas has a weighted average cost of capital of 7.9 percent. The companyâs cost of equity is 11 percent, and its pretax cost of debt is 5.8 percent. The tax rate is 25 percent. What is the companyâs target debt-equity ratio? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.)
Answer:
companyâs target debt-equity ratio = 0.87323
Explanation:
Given data:
Weighted Average Cost of Capital = 7.90%
cost of equity is 11 percent
pretax cost of debt is 5.8 percent
tax rate is 25 percent.
After-tax cost of debt = 5.8% (1 - 25%) = 4.35%
Weighted Average Cost of Capital = Debt weight * After tax cost of debt + equity weight * cost of equity
let debt weight is x
equity weight = 1-x
plugging all value
7.9 = 4.35*x*+11(1-x)
solving for x
x = 0.46616
so, equity weight = 1- 0.46616 = 0.533835 {equity weight = 1-x}
debt to equity ratio = [tex]\frac{0.466165}{0.533835} = 0.87323[/tex]
A particular stock has a dividend yield of 1.3 percent. Last year, the stock price fell from $64 to $59. What was the total percentage rate of return for the year?
Answer:
The total percentage rate of return for the year is -6.51%
Explanation:
Capital Gain Yield = ($59 – $64 )/ $64
= - $5 / $64
= -7.81%
Since the dividend yield is 1.3%:
Total return = -7.81% + 1.3%
= -6.51%
Therefore, The total percentage rate of return for the year is -6.51%
Suppose trade between the United States and Canada results in a $100 billion increase in production of agricultural goods. This gain from trade will:
a. go to the U.S. because it is the larger country.
b. go to Canada because it is the smaller country.
c. be split equally between the U.S. and Canada.
d. be split between the two countries, but the division may not be equal.
Answer:
D
Explanation:
The gain from the trade will be split between the two countries but the division may not be equal because the division of gain depend on several factors such demand and supply for goods as well as the price which we don't have the information about.
A manager that manages ""by the book"" exhibits which form of leadership style? Democratic. Autocratic. Bureaucratic. Free-rein.
Answer:
(c). Bureaucratic
Explanation:
Bureaucracy refers to following and abiding by rules and procedures strictly.
In such a form, the approach is highly resolute and lacks flexibility.
"By the book" conveys stringent rules and procedures, which means operations must be carried without deviating from the prescribed rules and norms.
Such form of leadership style is not flexible and often sticks to conventional methods without appreciating creative or handy suggestions.
Employees are expected only to perform what is asked of them, nothing less nothing more.
Usually such style of leadership is witnessed in those departments and areas wherein employees or workers handle those equipment, the negligent handling of which could result into fatal injuries or accidents.
Wylie has been offered the choice of receiving $5,000 today or an agreed-upon amount in 1 year. While negotiating the future amount, Wylie notes that he would be willing to take no less than $5,700 if he has to wait a year. What is his TVOM in percent? Wylie has been offered the choice of receiving ,
Answer:
The answer is 14%
Explanation:
Formula for Future value (FV) FV = PV (1+ni)
Whereas FV= Future value, PV = present value, n= number of years, i= TVOM in percentage
Rearranging the formula for i
i = (FV/PV)-1
So, i = (5,700/5,000)-1
i = 1.14-1
i = 0.14
i = 14%
(0.14x100=14%)
Consider two countries' situations: Country A can produce either six automobile ror twelve movies with the same amount of resources. Country B, using the same resources, can produce either five automobiles or eight movies. Using Ricardo' Theory of Comparative Advantage, determine which country would produce automobiles, which would produce movies, and the range of relative prices within which these product would trade?
Answer:
The theory of comparative advantage says that nations should yield and trade only those merchandises in which they have a reasonable advantage i.e. which they are specialize in.
To compute the comparative advantage of two nations A and B, let us first compute the opportunity cost of making movies and vehicles in each.
Country A:
Opportunity cost of making 1 automobile = 2 movies
Opportunity cost of making 1 movie = 1/2 automobile
Country B:
Opportunity cost of making 1 automobile = 8/5 movies
Opportunity cost of making 1 movie= 5/8 automobile
Since the prospect cost of making an automobile is lesser in Country B and the prospect cost of making movies is lesser in country A, thus Country A would make movies and country B would make automobiles.
The project manager’s role with regard to interface management does not include interfacing:
Answer:
The correct answer to the following question will be "Between senior management and various external stakeholders"
Explanation:
The project manager is the person responsible for initiating, preparing, constructing, implementing, overseeing, ending and managing the project with success, ensuring that the threat is handled and that uncertainty is reduced.The project manager is accountable for the development project's progress. They supervise all aspects, including planning, execution, monitoring, monitoring, and closure. It guarantees that goals and objectives are achieved within the timeline.Therefore, it would be the right answer.
The Phoenix Corporation's fiscal year ends on December 31. Phoenix determines inventory quantity by a physical count of inventory on hand at the close of business on December 31. The company's controller has asked for your help in deciding if the following items should be included in the year-end inventory count. Required: Determine if each of the items below should be included or excluded from the company's year-end inventory.
1. Merchandise held on consignment for Trout Creek Clothing
2· 3 Goods purchased from a vendor shipped f.o.b. shipping point on December Goods shipped f.o.b. destination on December 28 that arrived at the customer's location on January 4 26 that arrived on January
3. Goods shipped f.o.b. shipping point on December 28 that arrived at the customer's location on January 5.
4. 5.Phoenix had merchandise on consignment at Lisa's Markets, Inc. 6.
7. Freight charges on goods purchased in 3.
Goods purchased from a vendor shipped f.o.b. destination on December 27 that arrived on January 3
Answer:
1. Yes
2. No
3. No
4. Yes
7. No
Explanation:
Phoenix Corporation is having its physical inventory count of December 31st so only that merchandise will be included in count which is present at the stockroom physically. The merchandise which is in transit or is not yet received at the stockroom will not be included. In point 1, merchandise is held on consignment for Trout Creek Clothing which means there is physical existence of the merchandise at the stockroom. In point 2, goods purchased shipped destination on December 28 but arrived at the customer's location on January 4, this will not be included in the count. In point 3, goods shipped on December 28, arrived at the customer's location on January 5, this will also not be included. In point 4, phoenix had merchandise on consignment; this will be included as inventory will be physically present at the stockroom. In point 7, goods purchased on December 27 that arrived on January 3, this is not included as physically goods arrived after December
31st.
To accurately include items in Phoenix Corporation's year-end inventory, it is crucial to understand principles such as consignment and shipping terms. Goods on consignment at other businesses and goods shipped FOB destination arriving after year-end are excluded, while goods on consignment at Phoenix and those purchased FOB shipping point by year-end are included.
Deciding whether specific items should be included in Phoenix Corporation's year-end inventory requires understanding of inventory accounting principles, particularly consignment and shipping terms such as FOB (Free On Board) shipping point and FOB destination.
Merchandise on consignment at Trout Creek Clothing should be excluded from Phoenix's inventory since these goods are not owned by Phoenix.
Goods purchased FOB shipping point on December 26 that arrived on January 3 should be included in the inventory count as ownership transfers to Phoenix at the shipping point.
Goods shipped FOB destination on December 27 that arrived on January 3 should be excluded as ownership transfers upon delivery, which is after the year-end.
Merchandise on consignment at Lisa's Markets, Inc. should be included in Phoenix's inventory, since they still own these goods.
Freight charges on goods purchased that are included in the year-end inventory should also be considered as part of inventory cost, enhancing the accuracy of inventory valuation.
It is essential for companies like Phoenix Corporation to accurately determine what items are included in their year-end inventory for proper financial reporting and compliance with accounting standards.
Auditors realize that at times corrective action is not taken even when agreed to by the appropriate parties. This should lead an internal auditor to :A: Decide the extent of necessary followup work.B: Allow management to decide when to follow-up, since it is management's ultimate responsibility.C: Decide to conduct follow-up work only if management requests the auditor's assistance.D: Write a follow-up audit report with all findings and their significance to the operations.
Answer: The correct answer is
A: Decide the extent of necessary followup work.
Explanation: It is the responsibility of the Chief Audit Executive to decide the follow up process to be done.
The nature, timing and extent of follow up is communicated by the Chief Audit Executive and he also has the responsibility to find out from management why actions have not been taken.
When internal auditors notice corrective actions are not being taken despite agreements, they should actively determine the scale of necessary follow-up work. This ensures that operations adhere to required standards and fosters accountability within the organization.
Explanation:When internal auditors realize that at times, corrective action is not taken despite being agreed upon by the relevant stakeholders, the appropriate course of action is to determine the extent of the necessary follow-up work. This is because internal auditors are responsible for ensuring that the organization's operations adhere to the set standards and procedures. The objective of follow-up work is to verify that management has carried out the agreed-upon change. If internal auditors permit management to decide when to follow up, there is a risk that the necessary rectifications will be delayed or ignored. Furthermore, waiting for management's request to conduct follow-up work can also lead to similar issues. Therefore, internal auditors should proactively decide the extent of follow-up work required to confirm that corrective action is taken. This helps maintain checks and balances to assure integrity and accountability in the organization.
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Which of the following internal control activities is not usually performed in the vouchers payable department? a. Approving vouchers for payment by having an authorized employee sign the vouchers. b. Matching the vendor’s invoice with the related receiving report. c. Indicating the asset and expense accounts to be debited. d. Accounting for unused prenumbered purchase orders and receiving reports.
Answer:
d. Accounting for unused pre-numbered purchase orders and receiving reports.
Explanation:
accounts payable department verifies whether all vendor invoices, cash disbursement and adjustments are recorded in the accounts payable records.
Allison's wants to raise $12.4 million to expand its business. To accomplish this, it plans to sell 25-year, $1,000 face value, zero-coupon bonds. The bonds will be priced to yield 6.5 percent, with semiannual compounding. What is the minimum number of bonds Allison's must sell to raise the $12.4 million it needs?
Answer:
= 55,780.5 units
Explanation:
A bond is a financial instrument used by a company or government to borrow money.
Zero-coupon bond: Most bonds pay a fixed percentage of their face value - coupon- as interest payment at requalr intervals.
A zero- coupon bond pays no coupon. However, the return on it is the difference between its face value and price.
The Price of a bond is determined using the discounted flow method. Here the present value is calculated using its the face value and the yield. The face value is the amount promised by borrower to pay back. And the yield is the return on the bond expressed in %.
This can be captioned as follows:
P × (1+r)^n = FV,
P- price, FV- Face value, r = yield
P-?, FV- 1000, r = 6.5%/2 = 3.25% (semi-annual interest rate)
P × (1.0325)^(25× 2) = 1000
P × 4.9488 = 1000
P= 1000/4.4988
P= $222.28
P= $222.3
If the bond sells for $222.3, then to raise $12.4 million, Allison will have to sell:
= 12,400,000/222.3
= 55,780.5 units
are unsecured obligations that are not tied to specific assets for collateral. a. Bearer bonds b. No-load stocks c. Penny stocks d. Junk bonds
Answer:
The correct answer is letter "D": Junk bonds.
Explanation:
A junk bond is a debt security that is poorly rated because it has a high default risk. Junk bonds are also called high-yield or speculative bonds. These are considered riskier investments than higher-rated bonds and thus offer a higher interest rate per year.
Junk bonds can be issued by corporations or governments and have a principal amount, maturity date, and coupon but they are not linked to specific assets as collateral.
Maas, Inc., sells washers and dryers that include a maximum one-year warranty covering parts. Past experience shows that warranty expense averages about 2 percent of the selling price of each washer and dryer. Net sales totaled $400,000 during the year ending December 31. Prepare the December 31 adjusting entry for Maas by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.
Answer:
See explanation section
Explanation:
Journal entry to be recorded -
Debit Warranty expense $8,000
Credit Estimated warranty liability $8,000
Calculation:
Net sales = $400,000
warranty expenses = 2% of the net selling price.
Therefore, estimated warranty expense = $400,000 × 2% = $8,000
Since, the company does not pay the expenses, a liability arises. Since we are estimating the value from past experience, the liability will be estimated.
Adjusting entry: Debit Warranty Expense $8,000, Credit Accrued Warranty Liability $8,000 for Maas, Inc.'s December 31 financials.
Here's the adjusting entry for Maas, Inc. on December 31:
| Account | Debit | Credit |
| Warranty Expense | $8,000 | |
| | | |
| Accrued Warranty Liability| | $8,000 |
Explanation:
- Warranty Expense is debited to recognize the expense for the warranties issued during the year, calculated as 2% of net sales ($400,000 * 0.02 = $8,000).
- Accrued Warranty Liability is credited to recognize the obligation Maas, Inc. has to fulfill warranty claims in the future.
Consider the production department of a manufacturer of laptop computers. Classify the cost of the processor chips.
-Direct
-Variable
-Product
Answer:
All the answers are correct.
Explanation:
The cost of the processor chips is a direct cost because it is the vital thing of any laptops. Without a processor, the laptop is nothing but a heartless product.
The cost is variable because the price of a processor varies as there are various processors in the computer market.
The cost is a product cost because it is directly related to manufacturing a laptop.
Which of the following is not a reason why managers use financial statement analysis? Enables managers to understand how stockholders and creditors will interpret their financial results. Estimates stock price appreciation. Provides valuable feedback on company's performance
Answer:
The correct answer is letter "B": Estimates stock price appreciation.
Explanation:
Financial Statement Analysis is the process of reviewing a company's statements to gain an understanding of its financial health. The goal of financial statement analysis is to equip business with the knowledge it needs to make effective decisions. It evaluates the past and projects a company's future performance.
Several forces influence a company's stock price but financial statement analysis is not a source that accomplishes that purpose.
Financial statement analysis enables managers to understand how stockholders and creditors interpret their financial results and provides valuable feedback on the company's performance. However, it does not estimate stock price appreciation.
Explanation:Managers use financial statement analysis for various reasons, including understanding how stockholders and creditors will interpret their financial results, estimating stock price appreciation, and providing valuable feedback on the company's performance.
However, the question asks for a reason that is not applicable, and in this case, it would be 'Estimates stock price appreciation' because financial statement analysis primarily focuses on understanding financial results and evaluating the company's performance.
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The West European buyers who purchase and resell Entrée Specialités’ food products in their home countries are in the _____ business.
a. importing
b. exporting
c. licensing
d. domestic investment
Answer:
The correct answer is letter "A": importing.
Explanation:
Importing activities involve businesses or individuals purchasing goods from manufacturers abroad with the purpose of reselling those goods or for personal use. Importing goods imply paying tariffs on those products as a way to protect national businesses.
The West European buyers who purchase and resell Entrée Specialités’ food products in their home countries are in the importing business. An import business involves buying goods from another country and bringing them into your own country for resale or distribution.
Explanation:The West European buyers who purchase and resell Entrée Specialités’ food products in their home countries are in the importing business.
An import business involves buying goods from another country and bringing them into your own country for resale or distribution. In this case, the West European buyers are importing Entrée Specialités’ food products from another country (presumably the United States) and reselling them in their home countries.
Examples of import businesses include retailers who import clothing or electronics from overseas manufacturers and sell them to customers in their home countries.
Moody Corporation uses a job-order costing system with a plant wide overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates:
Machine-hours required to support estimated production…………100,000
Fixed manufacturing overhead cost……………………………….$650,000
Variable manufacturing overhead cost per machine-hour…………$3.0
Required:
1. Compute the predetermined overhead rate
During the year, Job 400 was started and completed. The following information was available with respect to the job:
Direct materials requisitioned…………………..$450
Direct labor cost………………………………...$210
Machine-hours used……………………………….40
2. Compute the total manufacturing cost assigned to Job 400.
3. During the year, the company worked a total of 146,000 machine-hours on all jobs and incurred actual manufactured overhead costs of $1,350,000. What is the amount of underapplied or overapplied for the year? If this amount were closed out entirely to cost of Goods Sold would the journal entry increase or decrease net operating income?
Answer:
1. 9.50 per machine hour
2. $1,040
3. $37,000 ; Increase
Explanation:
1. Fixed predetermine overhead rate:
= Fixed manufacturing overhead cost ÷ Machine-hours required
= 650,000 ÷ 100,000
= 6.5 per machine hour
Variable predetermine overhead rate = 3 per machine hour
Total predetermine overhead rate:
= Fixed predetermine overhead rate + Variable predetermine overhead rate
= (6.5 + 3)
= 9.50 per machine hour
2. Total manufacturing cost:
= Direct material + Direct labor + Manufacturing overhead
= $450 + $210 + (40 × 9.5)
= $450 + $210 + $380
= $1,040
3. Applied overhead:
= Total machine hours × Total predetermine overhead rate
= 146,000 × $9.50
= $1,387,000
Actual overhead = $1,350,000
Over applied overhead:
= Applied overhead - Actual overhead
= $1,387,000 - $1,350,000
= $37,000
If this amount were closed out entirely to cost of goods sold then net operating income will be increase.
Final answer:
The predetermined overhead rate is derived from dividing total estimated overhead costs by estimated machine-hours. For Job 400, the total manufacturing cost includes direct materials, direct labor, and applied overhead based on actual machine-hours used. Overapplied or underapplied overhead is calculated by comparing actual and applied overhead costs, and closing out the difference to Cost of Goods Sold will affect net operating income.
Explanation:
Computing Predetermined Overhead Rate
To compute the predetermined overhead rate, we'll divide the total estimated overhead costs by the estimated machine-hours. The formula is: Predetermined Overhead Rate = (Estimated Fixed Overhead + (Variable Overhead Rate × Estimated Machine-Hours)) / Estimated Machine-Hours.
Total Manufacturing Cost for Job 400
The total manufacturing cost assigned to Job 400 is the sum of direct materials, direct labor, and applied overhead. Applied overhead is computed by multiplying the predetermined overhead rate by the actual machine-hours used by Job 400.
Calculation of Overapplied or Underapplied Overhead
To find whether the overhead is overapplied or underapplied, the actual overhead costs are compared with the applied overhead costs. If actual costs are higher, overhead is underapplied. Conversely, if applied costs are higher, overhead is overapplied. The difference will be closed out to Cost of Goods Sold, which will either increase or decrease net operating income depending on whether the overhead was underapplied or overapplied.
Your brother has offered to give you either $10,000 today or $20,000 in 9 years. If the interest rate is 7% per year which option is preferable?
Answer:
receive $20000 in 9 years is preferable because its present value is greater than $10000 i.e $10878.67
Explanation:
given data
offered = $10,000 or $20,000
time = 9 year
interest rate = 7%
solution
here when you receive = $20000 received in 9 years
so present value = [tex]\frac{receive\ amount}{(1+rate)^{time}}[/tex] .................1
present value = [tex]\frac{20000}{(1+0.07)^9}[/tex]
present value = $10878.67
so here receive $20000 in 9 years is preferable because its present value is greater than $10000
Final answer:
To determine if $10,000 now is better than $20,000 in 9 years at a 7% interest rate, calculate the present value of $20,000 using the formula PV = FV / (1 + r)^n. If the present value is more than $10,000, choose the future payment; if less, take the money now.
Explanation:
The question involves comparing two financial options by calculating the present value of future money using the concept of interest rates. To determine whether the option of receiving $10,000 today is preferable to receiving $20,000 in 9 years at an interest rate of 7%, one would compute the present value of $20,000 discounted back 9 years. Using the formula PV = FV / (1 + r)^n, where PV is the present value, FV is the future value, r is the interest rate, and n is the number of years, one can find the present value of the $20,000.
To solve this problem, we take:
FV = $20,000r = 7% or 0.07n = 9 yearsThus, the present value (PV) = $20,000 / (1 + 0.07)^9.
After calculating the PV, if it is more than $10,000, then receiving $20,000 in 9 years is the better option considering the 7% interest rate. If it is less, then taking $10,000 today is better.
Early in 2020, Concord Equipment Company sold 500 Rollomatics at $6,500 each. During 2020, Concord spent $20,000 servicing the 2-year assurance warranties that accompany the Rollomatic. All applicable transactions are on a cash basis.
A) Prepare 2020 entries for Concord.
Assume that Concord estimates the total cost of servicing the warranties in the second year will be $40,000
B) Prepare 2020 entries for Concord assuming that the warranties are not an integral part of the sale (a service-type warranty).
Assume that of the sales total, $61,000 relates to sales of warranty contracts. Warranty costs incurred in 2020 were $20,000. Estimate revenues to be recognized on a straight-line basis.
Answer:
Explanation:
A)
Dr Cash 3250000
Cr Revenue 325000 [500*6500]
Dr Warranty expense 20000
Cr Liabilities on warranties 20000
B)
Dr Cash 3250000
Cr Revenue 3189000
Cr Unearned warranty revenue 61000
Dr Warranty expense 20000
Cr Cash 20000
Dr Unearned warranty revenue 30500
Cr Warranty revenue 30500[20000/40000*61000]
A customer buys 100 shares of XYZ at $60 in a margin account regular way settlement. Two days after the trade, XYZ has dropped to $55. The customer will receive a margin call for:
Answer:
50% of Original Purchase price = 0.50 x $6000= $3000
Explanation:
The customer buys 100 shares at $60 = $60 x 100 = $6000
Since, it a margin account, the margin requirement for the call for this initial purchase will be 50% of the original purchase price
= 50% of $6000 = $3000
Although XYZ shares dropped two days later from $60 to $55 dollars. The initial margin requirement will not be affected by the drop or reduction in share price and hence, it will not affect the value of the margin call.
However, if the drop continues, then the alternative is to generate a call for "maintenance margin'' not the initial margin.
Final answer:
A margin call occurs when the equity in a margin account falls below the brokerage's required maintenance margin due to a decline in the value of the securities held. The exact margin call amount cannot be determined without knowing the specific margin requirements of the brokerage firm.
Explanation:
The question deals with a scenario involving a margin account and a regular way settlement in the context of stock trading. In this case, a customer bought 100 shares of XYZ company at $60 per share. However, two days after the trade, the value of XYZ stock dropped to $55 per share. In a margin account, the investor is borrowing money to buy securities and is required to maintain a minimum amount of equity (the investor's own money) in the margin account, known as the maintenance margin.
If the value of the securities drops significantly, the equity may fall below the maintenance margin, and the investor would receive a margin call requiring them to deposit additional funds to bring the account back to the required level. Unfortunately, without the specific margin requirements given by the brokerage, we cannot calculate the exact margin call amount. Different brokerages have different maintenance margin requirements, typically between 25% and 40% of the total value of the securities.
Pacific Petroleum holds huge reserves of oil assets. Assume that at the end of 2018, Pacific Petroleum's cost of oil reserves totaled $ 50,000,000, representing 5,000,000 barrels of oil.
Requirement:
1. Which method does Pacific Petroleum use to compute depletion?
Answer:
Units of production method
Explanation:
The formula to compute the depreciation expenses under the units-of-production method:
Depreciation per miles or hours = (Original cost - residual value) ÷ (estimated production)
For first-year or for another year, the depreciation expense would be
= Production units in a year × depreciation per miles or per hour
So, for computing the depletion, the unit of production method is used