The normal application of a p-chart is in process sampling by attributes.
Option b
Explanation:
p-chart can be defined as a form of control chart that is used to observe the proportion of nonconforming units (that is the ratio of number of nonconforming units to n, the sample size).
The p-chart depicts the changes or alterations in the process over the specific time. The control limits for this chart type are as follows,
Binomial distribution is the base for p-chart and it requires the assumptions given below:
The possibility of nonconformity is the same for each unit; Each unit is independent of its own predecessors or successors; The procedure for inspection is same for each and every sample.Inventory at the beginning of the year cost $13,500. During the year, the company purchased (on account) inventory costing $84,500. Inventory that had cost $80,500 was sold on account for $95,400. At the end of the year, inventory was counted and its cost was determined to be $17,500.
Calculate the costs of goods sold.
Answer:
The costs of goods sold is $80,500
Explanation:
Cost of goods sold is defined as the cost which a company incurs to acquire or manufacture a product and selling it to the customer. The selling price doesnot have any effect on the cost of goods sold. The formula for COGS is,
Cost of goods sold = Beginning inventory + Purchases - Ending inventory
Here,
Beginning Inventory = $13,500
Purchases = $84,500
Ending inventory = $17,500
COGS = 13,500 + 84,500 - 17,500 = $80,500
Answer:
$80,500
Explanation:
Cost of goods sold is defined as the cost of acquiring the goods sold during a period, and not the price for which goods are sold to the customer. In this problem, it is stated that inventory worth $80,500 was sold. Therefore, the cost of goods sold is $80,500.
Cost of goods sold can also be calculated as the initial inventory added to purchases minus ending inventory:
[tex]COGS =13,500+84,500-17,500\\COGS=\$80,500[/tex]
5. Problems and Applications Q5 A senator wants to raise tax revenue and make workers better off. A staff member proposes raising the payroll tax paid by firms and using part of the extra revenue to reduce the payroll tax paid by workers. True or False: This arrangement would most likely make workers worse off because the tax wedge would be larger. True False
Answer:
True
Explanation:
This will not accomplish the senator's goal because payroll taxes work in the same way as taxes on goods. Labor is the good here and wage is the price that is being paid for it. Tax is a wedge between what firms pay and what workers receive. When a payroll tax is enacted the wage received by workers falls and that paid by firms rises. The payment of taxes will be made by the firm according to the legislation and the wages for the workers will decrease according to the elasticity of demand and supply of labor market and ultimately the tax paid by the firms and the workers will not change.
Answer: True
Explanation: The tax wedge here is the difference between the wages employees take home and how much employers actually pay to employ them. It is also the difference in the market forces of demand and supply due to imposing tax on goods and services.
Firstly, the burden of tax will not rest with firms but will be transferred to consumers through goods and services which will affect demand. Also increasing the payroll tax paid by employers will make employees worse off as the burden of payroll tax still rest on the employees, it will only decrease take home wages.
Moira Company has just finished its first year of operations and must decide which method to use for adjusting inventory accounts. Because the company used a budgeted indirect-cost rate for its manufacturing operations, the amount that was allocated ($435,000) to cost of goods sold was different from the actual amount incurred ($425,000). Ending balances in the affected accounts were:
Answer:
The Cost of good sold will decrease by 10,000
The other accounts balance will be the same.
Missing Information:
Ending balances in the relevant accounts were:
Work-in-Process 40,000
Finished Goods 80,000
Cost of Goods Sold 680,000
Explanation:
The company applied overhead for the amount of 435,000
This was charged into finished good which latter become cost of goods sold.
Then, as the actual overhead was 425,000 we have to adjust for the over-applied overehad. We applied more than it cost so we have to reduce it.
435,000 - 425,000 = 10,000
We will decrease our COGS against the factory overhead account.
COGS 10,000 debit
factory overhead 10,000 credit
Final answer:
Moira Company needs to adjust its inventory accounts by recognizing an over-applied manufacturing overhead of $10,000, due to a discrepancy between the budgeted indirect-cost rate and the actual cost incurred, to ensure accurate financial statements.
Explanation:
Moira Company should adjust its inventory accounts after discovering a discrepancy between the budgeted indirect-cost rate and the actual amount incurred. The company used a budgeted indirect-cost rate for manufacturing operations, which led to an allocation of $435,000 to the cost of goods sold. However, the actual amount incurred was $425,000. To reconcile this discrepancy, the company should adjust its inventory account by recognizing the over-allocated amount of $10,000 as an over-applied manufacturing overhead and adjust the cost of goods sold accordingly. This adjustment will ensure that the financial statements reflect the actual costs and improve the accuracy of the profit calculation.
Compute the present value of the pension obligation to these three employees as of December 31, 2021. Assume an 11% interest rate. 2. The company wants to have enough cash invested at December 31, 2024, to provide for all three employees. To accumulate enough cash, they will make three equal annual contributions to a fund that will earn 11% interest compounded annually
Answer:
1.
Tinkers:
PVA = $20,000 × 7.19087* = $143,817
*Present value of an ordinary annuity of $1: n = 15, i = 11% (from PVA of $1)
PV = $143,817 × 0.81162* = $116,725
*Present value of $1: n = 2, i = 11% (from PV of $1)
Evers:
PVA = $25,000 × 7.19087* = $179,772
*Present value of an ordinary annuity of $1: n = 15, i = 11% (from PVA of $1)
PV = $179,772 × 0.73119* = $131,447
*Present value of $1: n = 3, i = 11% (from PV of $1)
Chance:
PVA = $30,000 × 7.19087* = $215,726
*Present value of an ordinary annuity of $1: n = 15, i = 11% (from PVA of $1)
PV = $215,726 × 0.65873* = $142,105
*Present value of $1: n = 4, i = 11% (from PV of $1)
Answer:
The question is not completed but the complete question is in the explanation section below and the solution is attached in the pictures.
Explanation:
Three employees of the Horizon Distributing Company will receive annual pension payments from the company when they retire. The employees will receive their annual payments for as long as they live. Life expectancy for each employee is 14 years beyond retirement. Their names, the amount of their annual pension payments, and the date they will receive their first payment are shown below: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
Employee Annual Payment Date of
First
Payment
Tinkers $ 27,000 12/31/24
Evers $ 32,000 12/31/25
Chance $ 37,000 12/31/26
A trader buys two March futures contracts on frozen orange juice. Each contract is for the delivery of 15,000 pounds. The current futures price is 136 cents per pound, the initial margin is $1,960 per contract, and the maintenance margin is $1,400 per contract. What price change would lead to a margin call
Answer:
3.73 cents
Explanation:
Margin call occurs when the account loses more than $ 560 ($ 1960 - $ 1400).
The change in price that will lead to a margin call = Y cent × 15000 pounds = $ 560
Y cents = $ 560 / 15000 = 3.73 cents
the future price must drop more than 3.73 cents from 136 cents to below 132.3 cents
The real risk-free rate is 2.25%. Inflation is expected to be 2.5% this year and 4.25% during the next 2 years. Assume that the maturity risk premium is zero. What is the yield on 2-year Treasury securities
Answer:
yield on 2 year treasury = 5.63 %
Explanation:
given data
real risk-free rate = 2.25 %
Inflation rate year 1 = 2.5 %
Inflation rate year 2 = 4.25 %
solution
we get here average inflation rate is
average inflation rate = [tex]\frac{2.5+4.25}{2}[/tex] ...........1
average inflation rate = 3.38 %
so here yield on 2 year treasury
yield on 2 year treasury = real risk-free rate + average inflation rate + MRP ...............2
yield on 2 year treasury = 2.25 % + 3.38 % + 0%
yield on 2 year treasury = 5.63 %
g Suppose on January 1 Austin's Tavern prepaid rent of $ 13 comma 200 for the full year. At May 31, how much rent expense should be recorded for the period January 1 through May 31? At May 31, Austin's Tavern should record $ 3,300 of rent expense.
Answer:
At May 31, Austin's Tavern should recorded of $5,500 for the period January 1 through May 31 by the entry:
Debit Rent Expense $5,500
Credits Prepaid rent $5,500
Explanation:
On January 1, Austin's Tavern prepaid rent of $ 13 comma 200 for the full year. The company records the insurance as the prepaid Insurance:
Debit Prepaid rent $13,200
Credit Cash $13,200
On May 31, the last day of the following 5 months, the company records an adjusting entry that Credits Prepaid rent for $5,500 ($13,200 divided by 12 months times the 5 months that will be prepaid as of May 31) and Debits Rent Expense for $5,500
Debit Rent Expense $5,500
Credits Prepaid rent $5,500
Long-term debt outstanding: $300,000 Current yield to maturity (rdebt): 8% Number of shares of common stock: 10,000 Price per share: $50 Book value per share: $25 Expected rate of return on stock (requity): 15%
Calculate the company's cost of capital. Ignore taxes.
Answer:
Cost of capital=11.18%
Explanation:
First We will calculate the Equity of firm:
Equity= Number of share* Book value per share
Equity= 10,000* $25
Equity= $250,000
Long-term debt=$300,000
Expected rate of return=15%=0.15
Current yield to maturity (rdebt)=8%=0.08.
Value of firm=Equity+Long-term debt
Value of firm= $250,000+$300,000
Value of firm= $550,000
Formula:
[tex]Cost\ of \ Capital=\frac{Equity}{Value\ of\ firm}* Rate\ of\ return+\frac{Debit}{Value\ of\ firm}* yield\ to\ maturity[/tex]
[tex]Cost\ of\ Capital=\frac{\$250,000}{\$550,000}*0.15+\frac{\$300,000}{\$550,000}*0.08\\ Cost\ of\ Capital=0.1118[/tex]
Cost of capital=11.18%
Based on your reading in the webtext, select one of the following thesis statements. Your response should be two to three paragraphs in length. Next, revise the statement you have chosen to reflect the complexity of the historical events surrounding this issue. Provide specific examples of how ANCSA and the Native corporation system have had a positive or negative impact—or perhaps both—on Alaska Natives. Further illustrate the complexity of this issue by showing how the passage of ANCSA was contingent on at least three historical events or forces.
1. The Alaska Native Regional Corporations (ANCSA) and the Native corporation system have been good for Alaska Natives.
Explanation:
1. The Alaska Native Regional Corporations (ANCSA) and the Native corporation system have been good for Alaska Natives.
First, rework your argument to demonstrate the significance of the historical events underlying this issue. Provide particular examples of the influence of ANCSA and the indigenous community structure on Alaska Natives, or probably both.
To further explain the significance of this problem, demonstrate how at least three historical events rely on ANCSA's passage
The ANCSA and the Native corporation system have brought about significant economic and social opportunities for Alaska Natives, exemplified by the creation of profitable businesses and the preservation of cultural heritage;
To illustrate the positive impacts, one can point to the economic development spurred by ANCSA.
The act granted Alaska Natives title to 44 million acres of land and paid out $962.5 million in compensation, which led to the formation of regional and village corporations. These corporations have since grown into powerful economic entities, with some engaging in oil and gas, mining, and other ventures that have generated wealth and employment for Native shareholders. Additionally, ANCSA has allowed for the protection of Native cultural practices and languages through the establishment of cultural centers and educational programs.Conversely, the passage of ANCSA has also had negative consequences.
The transfer of land titles to corporations meant that Natives no longer held land in common, as they had traditionally done. This has led to disputes over land use and the erosion of communal ties. Furthermore, the distribution of wealth and opportunities has not been even across all Native corporations, leading to inequalities and debates over the best use of ANCSA funds. The passage of ANCSA was contingent on a confluence of historical events and forces. Firstly, the discovery of oil at Prudhoe Bay in 1968 heightened the urgency for a settlement of Native land claims to allow for the development of the oil fields.Music World produces student-grade violins for beginning violin students. The company produced 2,100 violins in its first month of operations. At month-end, 550 finished violins remained unsold. There was no inventory in work in process. Violins were sold for $122.50 each. Total costs from the month are as follows:
Direct materials used $87,200
Direct labour 60,000
Variable manufacturing overhead 25,000
Fixed manufacturing overhead 44,100
Variable selling and administrative expense 8,000
Fixed selling and administrative expens 13,900
The company prepares traditional (absorption costing) income statements for its bankers. Hannah would also like to prepare contribution margin income statements for her own management use. Compute the following amounts that would be shown on these income statements:
Requirements
1. Gross profit
2. Contribution margin
3. Total expenses are shown below the gross profit line.
4. Total expenses are shown below the contribution margin line.
5. The dollar value of ending inventory under absorption costing.
6. The dollar value of ending inventory under variable costing.
Which income statement has a higher operating income? By how much? Explain.
Answer:
Explanation:
1.
Gross profit is Net Sales - Cost of goods sold(COGS). So in order to calculate COGS:
Direct materials used $87,200
Direct labour 60,000
Variable manufacturing overhead 25,000
Fixed manufacturing overhead 44,100
Total cost $216,300
Violins produced 2,100
Cost per violin $103
Sales [(2100-550)*122.50] 189,875
Cost of goods sold [(2100-550)*103] 159,650
Gross profit 30,225
2. Contribution margin = Sales - Variable expenses
So to calculate variable expenses, cost per violins multiplied by violins sold and then variable selling and administrative expense of 8,000 is added.
Direct materials used $87,200
Direct labour 60,000
Variable manufacturing overhead 25,000
Total cost $172,200
Violins produced 2,100
Cost per violin $82
Variable expenses = (2100-550)*82 +8000 = $135,100
Contribution margin = 189,875 - 135,100 = $54,775
3.
Variable selling and administrative expense 8,000
Fixed selling and administrative expense 13,900
Total expenses shown below the gross profit line 21,900
4.
Fixed manufacturing overhead 44,100
Fixed selling and administrative expense 13,900
Total expenses shown below the contribution margin line 58,000
5. Ending inventory = unsold inventory*Cost per violins = 550*103 = $56,650
6. Ending inventory = unsold inventory*Cost per violins = 550*82 = $45,100
_________ integration is where a firm uses a mix of in-house and outsourced activities for the various stages of the vertical activity chain. a. Partial c. Backward e. Full b. Tapered d. Forward
Answer:
Tapered integration
Explanation:
Tapered integration is a term in organization theory that is a mix of market exchange and vertical integration. Advantages of vertical integration include risk protection, motivation tool for market and internal division, enlargement of input channels with little capital outlays,
the use of information on internal cost to discuss contracts with market.
Its disadvantages are monitoring issues, inefficiency and minimal production.
Required: a. Adams Company's production cycle starts in Department A. The following information is available for July: Work i process, July 1 (60% complete) Started in July Work in process, July 31 (30% complete) Units 73,000 350,000 42,000 Materials are added at the beginning of the process in Department A. Using the weighted-average method, what are the equivalent units of production for materials and conversion costs for the month of July, respectively?
O 423.000: 393.600
O 381,000, 350,000
O 350000, 362.600
O 423.000, 381000
O None of the above
Answer:
Explanation:
For materials:
Units transferred out 381,000*
Add:
Materials 42,000*100% = 42,000
Equivalent units 423,000
*Units transferred out = Units stated+Beg inv-End inv = 350,000+73,000-42,000 = 381,000
For conversion costs:
Units transferred out 381,000*
Add:
Conversion cost 42,000*30% = 12,600
Equivalent units 393,600
Correct answer is 423,000; 393,600
Using the weighted-average method, the equivalent units of production for materials and conversion costs for the month of July are 148,800 units each.
Explanation:The equivalent units of production for materials and conversion costs can be calculated using the weighted-average method. To do this, we need to consider the units that were started and completed during the period, as well as the units that are still in process at the end of the period.
In this case, we can calculate the equivalent units of production for materials by adding the units from the beginning work in process inventory (60% complete) to the units started during July and multiplying it by the percentage of completion for the units in ending work in process inventory (30% complete). Similarly, we can calculate the equivalent units of production for conversion costs using the same method.
Using these calculations:
Equivalent units for materials = (Units in beginning work in process) + (Units started during July) × (Percentage of completion for units in ending work in process)
Equivalent units for conversion costs = (Units in beginning work in process) + (Units started during July) × (Percentage of completion for units in ending work in process)
Using the given information:
Units in beginning work in process: 73,000 units (60% complete)
Units started during July: 350,000 units
Units in ending work in process: 42,000 units (30% complete)
Equivalent units for materials = (73,000 × 0.6) + 350,000 × 0.3 = 43,800 + 105,000 = 148,800
Equivalent units for conversion costs = (73,000 × 0.6) + 350,000 × 0.3 = 43,800 + 105,000 = 148,800
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Lohn Corporation is expected to pay the following dividends over the next four years: $12, $10, $9, and $4. Afterward, the company pledges to maintain a constant 6 percent growth rate in dividends forever. If the required return on the stock is 15 percent, what is the current share price
Answer:
Price of the stock today = $53.14
Explanation:
given data
dividends year D1 = $12
dividends year D2 = $10
dividends year D3 = $9
dividends year D4 = $4
constant growth rate = 6 percent
required return stock Kk = 15 percent
solution
we get here Price of the stock today that is
Price of the stock = [tex]\frac{D1}{(1+ke)^1}+\frac{D2}{(1+ke)^2}+\frac{D3}{(1+ke)^3}+\frac{D4}{(1+ke)^4}+\frac{P4}{(1+ke)^4}[/tex] .................1
here P4 = [tex]\frac{D5}{ke-g}[/tex] .............2
and where D5 = D4(1+g) .............3
so here put value in equation 1
Price of the stock today = [tex]\frac{12}{(1+0.15)^1}+\frac{10}{(1+0.15)^2}+\frac{9}{(1+0.15)^3}+\frac{4}{(1+0.15)^4}+\frac{4(1.06)}{(0.15-0.06)(1+0.15)^4}[/tex]
Price of the stock today = 53.1368
Price of the stock today = $53.14
John Kotter built on Lewin's three-step model to create a more detailed approach for implementing change.
Which of the following steps in the Kotter's eight-step plan for implementing change represents the "unfreezing" stage in the Lewin's three-step model?
A) Plan for, create, and reward short-term "wins" that move the organization toward the new vision.
B) Consolidate improvements, reassess changes, and make necessary adjustments in the new programs.
C) Create a new vision to direct the change and strategies for achieving the vision.
D) Empower others to act on the vision by removing barriers to change and encouraging risk taking and creative problem solving.
E) Reinforce the changes by demonstrating the relationship between new behaviors and organizational success.
Answer:
C.
Explanation:
The change model was developed by Kurt Lewin. The model is divide into three steps: unfreezing, changing and refreezing.
According to this three-step model of Kurt, the step that represents the 'unfreezing' stage is option C.
The unfreezing stage of the change model helps people to gain an overview of daily life. It helps to unlearn the bad habits and adopt new and innovative ways to reach the goal or objectives.
So, according to the definition of the 'unfreezing' stage of the change model, the correct answer is option C as in this step, Kotter is creating a new vision or ways to reach the goal or vision.
In John Kotter's change model, the 'unfreezing' stage in Lewin's model corresponds to the first few steps, encapsulated best by the step that involves creating a new vision to direct change and strategies for achieving that vision.
Explanation:In John Kotter's eight-step plan for implementing change, the equivalent to the 'unfreezing' stage in Kurt Lewin's three-step model would most fittingly be 'Create a new vision to direct the change and strategies for achieving the vision'. This is because the unfreezing stage in Lewin's model entails getting ready to change, which involves making individuals or organizations aware of the necessity and impending nature of change, a criterion that aligns with creating a new vision for change.
However, it's important to note that Kotter's model is a more granular expansion on Lewin's model, and so doesn't map directly onto the three stages of Lewin's model. The unfreezing stage corresponds to the first few steps of Kotter's model, which collectively articulate the need for change and pave the way for it.
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Bill is Use First for __________. He finds that he tends to skim through resources for assignments and approaches writing with a preference for demonstrating what he knows, rather than putting it into words.
Answer:
Hi, you haven't provided the options to the question, so I will just give the answer in my own words and you can check with the options.
The answer is: TECHNICAL REASONING.
Explanation:
Technical reasoning is a learning pattern that in which one tends to enjoy problem solving, building, or doing things hands on to experience what is going on, more like a visual learner.
Technical reasoning refers to the pattern which describes the way we seek relevant real world experiences and practical answers. This pattern is a pattern of fewest words. It emphasizes the ability to solve problems using independent private thinking and hands-on interaction.
Since Bill tends to skim through resources for assignment and approaches writing with a preference for demonstrating what he knows, rather than putting it into words, therefore, it means he uses TECHNICAL REASONING.
How much would you pay today for an asset that pays $1,000 per month, for 12 months, starting today if the interest rate is 4% APR (compounded monthly)
Answer:
Explanation:
Present value of Annuity will be used for this as the future payments are given after equal intervals.
PV of an Annuity = C x [ (1 – (1+i)^-n) / i ]
Where,
C is the cash flow per period
i is the rate of interest
n is the frequency of payments
add given Values in the formula:
$1,000 x [ (1 – (1+4%)^-12) / 0.04 ]= $9387.5 is the Answer
Which of the following funds has enormous growth potential, but also poses significant risks? (Select the best answer below.) A. Global fund B. International fund C. Emerging-market fund D. Country-specific fund
Answer:
C. Emerging market fund
Explanation:
Emerging market fund -
It refers to the amount of funds invested with its major assets in the economies of the emerging countries , is referred to as the emerging market fund .
These funds are in the range of the mutual funds to the exchange - traded funds .
These funds are in higher risk , as are invested in a developing country rather than the developed country .
Hence , from the given information of the question ,
The correct answer is emerging market funds .
It is now January 1, 2015; and you will need $1,000 on January 1, 2019, in 4 years. Your bank compounds interest at an 8% annual rate. How much must you deposit today to have a balance of $1,000 on January 1, 2019? The formula method for this questions is
Answer:
You need to deposit $735.03 today
Explanation:
Future Value (FV): $1,000
Rate: 8% pa
Tenor: 4 years
Present value is the amount of deposit today?
FV = PV * (1+ rate) ^ tenor
⇔ 1000 = PV *(1+8%)^4
⇒ PV = 1000/(1+8%)^4 = $735.03
Answer:
Pv = $1000 (1.08)^-4
Explanation:
Compounding is the computation of the future value of $1 invested today while discounting is the determination of the present worth of $1 in the future. Both are related by the equation
Fv = Pv ( 1 + r )^n
where Fv = Future amount
Pv = Present value
r = rate of return
n = time in years
Hence the formula required
$1000 = Pv (1 + 0.08)^4
Pv = $1000 (1.08)^-4
A municipal bond has a YTM of 4.11 percent while the YTM of a comparable taxable bond is 6.16 percent. What is the tax rate that will make an investor indifferent between the municipal bond and the taxable bond
Answer:
tax-rate 32.73%
Explanation:
The municipal bonds are tax-free thus, the private corporate bond is a pre-tax yield. We should solve for thetax rate which makes the 6.16% private bond yield 4.11% after tax:
0.0611 x ( 1 - t ) = 0.0411
t = 1 - 0.0411/0.0611 = 0,32733224
Being taxed at 32.73% will make the investor indifferent between these two options.
Assume that Amazon has a stock-option plan for top management. Each stock option represents the right to purchase a share of Amazon $1 par value common stock in the future at a price equal to the fair value of the stock at the date of the grant. Amazon has 4,700 stock options outstanding, which were granted at the beginning of 2020. The following data relate to the option grant.
Exercise price for options $40
Market price at grant date (January 1, 2020) $40
Fair value of options at grant date (January 1, 2020) $7
Service period 5 years
Required:
1. Prepare the journal entries for the first year of the stock-option plan.
Explanation:
The Journal entry is given below:-
1 January 2020 No Entry
31 December 2020 Compensation Expense Dr, 6,580
To, Paid-In-Capital 6,580
(Being the compensation expense stock-option plan is recorded)
Working Note:-
Compensation Expense
= $7 × 4,700 ÷ 5
= $7 × 940
= $6,580
Identify how planned investment will change in each scenario. Please choose from the given below options.
1. Airwings, a commercial airline manufacturer, becomes optimistic about economic conditions after seeing reports of strong growth in consumer spending. Due to Airwings, planned investment _________.
2. The Federal Reserve announces an end to accommodative monetary policy, and is now implementing policy tools that will increase the real interest rate. Due to the Fed, planned investment __________.
3. In an effort to reduce constant budget deficits, Congress announces plans to increase the corporate income tax rate. Due to the Congress, planned investment __________.
Options:
O Increase
O Decrease
O will stay the same
Answer:
1. Airwings, a commercial airline manufacturer, becomes optimistic about economic conditions after seeing reports of strong growth in consumer spending. Due to Airwings, planned investment will increase.
2. The Federal Reserve announces an end to accommodative monetary policy, and is now implementing policy tools that will increase the real interest rate. Due to the Fed, planned investment will decrease.
3. In an effort to reduce constant budget deficits, Congress announces plans to increase the corporate income tax rate. Due to the Congress, planned investment will decrease.
Explanation:
1) Due to Airwings, planned investment will increase.
Since the business has a promising future, it will start capacity expansion to cater to consumer demand.
2) Due to the Fed, planned investment will decrease.
A higher real interest rate suggests that borrowing cost is higher for the firms and so that they will lessen the investment in response to that.
3) Due to the Congress, planned investment will decrease.
A lower tax implies that higher profits and firms can pass these benefits to consumers with lower prices, to employees with higher wages and the government with a tax on profit. However, if the rate of the tax itself has been increased then in that case corporate will see higher tax as a dampener in sentiments and they might curtail investment plans.
The planned investment of Airwings, the Federal Reserve, and Congress are likely to increase, decrease, and decrease respectively due to their respective economic and policy contexts.
Explanation:In each scenario, planned investment could change depending on the economic and policy situations. For option 1, Airwings is optimistic about future economic conditions due to strong growth in consumer spending. Because this optimism will likely lead to increased production and expansion, their planned investment will likely increase.
In the second scenario, the Federal Reserve is ending its accommodative monetary policy and increasing the real interest rate. Higher interest rates make borrowing for investment more expensive, so planned investment is likely to decrease.
Finally, in the third case, Congress is planning to increase the corporate income tax rate. This increase will decrease net corporate profits available for reinvestment, leading to a likely decrease in planned investment.
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After graduation you face a choice. One option is to work for a highly regarded consulting firm and earn a starting salary (benefits included) of $55,000. The other option is to use $12,000 you have in savings to start your own consulting firm. Assume you are earning an annual return of 5 percent on your savings. You choose to start your own consulting firm. At the end of the first year, you add up all of your expenses and revenues. Your expenses include $18,000 in rent, $1,000 in office supplies, $50,000 for office staff, $20,000 for your own salary, and $4,000 in telephone expenses. Revenues totaled $147,600. Based on the information provided, what were your total explicit costs? Your implicit costs? What was your accounting and economic profit this first year?
Answer:
(a) $93,000
(b) $55,600
(c) $54,600
(d) -$1,000
Explanation:
An explicit cost refers to the costs that are incurred to run a business such as rent, wages and materials.
Explicit costs:
= Rent + supplies + Office staff + salary + Telephone expenses
= $18,000 + $1,000 + $50,000 + $20,000 + $4,000
= $93,000
Implicit cost is also known as opportunity costs.
Implicit cost:
= (Amount of saving × Rate) + Salary from consulting firm
= ($12,000 × 0.05) + $55,000
= $600 + $55,000
= $55,600
Accounting profit = Revenues - Explicit cost
= $147,600 - $93,000
= $54,600
Economic profit = Accounting profit - Implicit costs
= $54,600 - $55,600
= -$1,000
Answer:
Explicit Costs = $ 73000 ; Implicit Costs = $ 67600
Accounting Profit = $ 74600 ; Economic Profit = $ 13000 loss
Explanation:
Explicit Costs are real cash outflow expenses, paid for hiring productive factor inputs from outside. Implicit Costs are imputed costs of entrepreneur provided unpaid productive factor inputs and opportunity cost of money & time invested in business.
Accounting Profit is excess of Total Revenue over all Explicit Costs. Economic Profit is excess of Total Revenue over Total Explicit & Implicit costs.
Explicit Cost = Rent + Office Supply + Office Staff Expense + Telephone Expense + Self Salary = 18000 + 1000 + 50000 + 4000 + 20000 = 93000 Implicit Cost = Salary sacrifised while choosing to start business + Cash Capital amount & its interest sacrifised = 55000 + [12000 + 5% of 12000] = 55000 + 12600 = 67600Accounting Profit = TR - Explicit Costs = 147600 - 93000 = 54600Economic Profit = TR - Explicit Costs - Implicit Costs = 147600 -93000 - 67600 = (-)13000 i.e LossNabb & Fry Co. reports net income of $25,000. Interest allowances are Nabb $5,000 and Fry $4,000, salary allowances are Nabb $14,000 and Fry $10,000, the remainder is shared equally. Show the distribution of income. (If an amount reduces the account balance then enter with a negative sign preceding the number e.g. -15,000 or parenthesis e.g. (15,000).)
Final answer:
The net income of $25,000 is not sufficient to cover the combined allowances for Nabb and Fry, totaling $33,000. Therefore, each partner receives their respective allowances with Nabb receiving $19,000 and Fry receiving $14,000, with no remainder to distribute.
Explanation:
The problem involves distributing net income in a partnership according to agreed allowances and sharing the remainder equally.
Calculate total allowances for both partners: Nabb (Interest $5,000 + Salary $14,000 = $19,000); Fry (Interest $4,000 + Salary $10,000 = $14,000).Sum total allowances: $19,000 + $14,000 = $33,000.Subtract total allowances from net income: $25,000 - $33,000 results in a negative amount which indicates there's no remainder to distribute, and the net income is not sufficient to cover total allowances.Therefore, the distribution of income is as follows:
Nabb: $19,000 (Nabb's total allowances as the net income doesn't cover more than allowances)Fry: $14,000 (Fry's total allowances as the net income doesn't cover more than allowances)Since the net income is not enough to cover all allowances, there are no additional amounts to distribute equally between Nabb and Fry.
Define the term constructive receipt. Explain its importance.
(A) Under the concept of constructive receipt, income is taxed when it is received by the taxpayer. The taxpayer can transfer the income to another person to avoid paying taxes.
(B) Under the concept of constructive receipt, income is taxed when it becomes available to the taxpayer. The taxpayer cannot defer the tax by refusing to accept payment.
(C) Under the concept of constructive receipt, income is taxed once earned but not received by the cash-basis taxpayer. The taxpayer cannot defer the tax by refusing to accept payment.
(D) Under the concept of constructive receipt, income is taxed once earned and received by the cash-basis taxpayer. The taxpayer can defer the tax by refusing to accept payment.
Answer:
PART A
A constructive receipt is a term often used in both accounting and taxation to describe the taxation of an income even when the income had not been received by the person being taxed.
IMPORTANCE OF CONSTRUCTIVE RECEIPTS
It guarantees the early payment of taxes without undue delays from the tax payer.
It ensures effective taxation by effective tracking of the tax payers.
PARTB
(B) Under the concept of constructive receipt, income is taxed when it becomes available to the tax payer. The taxpayer cannot defer the tax by refusing to accept payment.
Explanation:
Constructive reciept is of great importance and relevance in the field of cost accounting and taxation,it guarantees early payment of taxes and effective tracking of tax payers by the regulatory or taxation bodies.
Under the concept of constructive reciept, income is taxed when it becomes available to the tax payer and it can not be deferred by refusing to accept payment.
Constructive receipt is a tax law concept where income is taxed when it becomes available to the taxpayer, regardless of when it is actually received. This prevents manipulation of tax payment timing by delaying income acceptance.
Explanation:The term Constructive Receipt is defined under the tax law context. According to this concept, income is considered to be received, and subsequently liable for tax, when it becomes readily available to the taxpayer, irrespective of when it is actually received. In other words, option (B) is the accurate definition of constructive receipt. The taxpayer cannot defer tax by refusing to accept the payment or by directing it to be paid to another party.
The importance of constructive receipt lies in its role in determining the taxation period for any given income. It prevents the taxpayer from manipulating the timing of their tax payment by refusing or delaying the acceptance of their income. Constructive receipt is a critical aspect of income recognition and timing of tax liability for cash-based accounting systems.
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If a firm decides to stop its sales agents from pricing too aggressively to make sales by requiring the agent to obtain permission to reduce price below a specific threshold, and the manager only has one source of information, the sales agent, the solution would
a..Not work
b. Work in all circumstances
c. None of the above
Answer:
The correct answer is letter "A": Not work.
Explanation:
The case proposes having sales agents request managers for discount thresholds every time a salesperson is trying to give customers promotions since there is only one source of information. It will be a better idea to have a set threshold for every product offered in the store so sales agents would know the limits of prices they can offer as discounts.
Thus, the idea of requesting managers for discounts in every sale is unlikely to work.
Management by walking around (MBWA) refers to an old strategy that results in ineffective upward communication. a practice in which executives get out of their offices and learn from others in the organization through casual face-to-face dialogue. the process used by new executives to get familiar with their new office design and layout. a communication process that should be used only when executives need to explain corporate decisions to the lower-level employees.
Answer: a practice in which executives get out of their offices and learn from others in the organization through casual face-to-face dialogue.
Explanation: Management by walking around (MBWA) refers to a practice in which executives get out of their offices and learn from others in the organization through casual face-to-face dialogue.
In this management style, executives pay casual, unplanned visits to staff in their work areas to understand their work environment, experience first hand their status reports instead of waiting for them to be delivered to their office. Management by walking around fosters a better work environment through better communication, a hands-on experience of the conditions of the workplace by managers as well as quick and effective problem solving.
Tune Store reports inventory using the lower of cost and net realizable value (NRV). Information related to its year-end inventory appears below. Inventory Quantity Unit Cost Unit NRV Model A 100 $ 100 $ 120 Model B 50 50 40 Model C 20 200 210 The year-end adjustment to mark inventory down to net realizable value will involve a debit to _____.
Tune Store would need to adjust their books for Model B's inventory, writing down the inventory by $500 due to valuation at NRV being less than cost. This is processed by debiting (increasing) an expense account such as Cost of Goods Sold and crediting (decreasing) the Inventory account.
Explanation:The question regards the year-end adjustment to mark inventory down to the net realizable value (NRV) within the context of the Tune Store. Tune Store uses lower cost and NRV to report its inventory. Therefore, if the cost of an item exceeds the NRV, the business would need to write down the inventory and adjust its books.
In this case, the adjustment applies to Model B. The unit cost is $50, but the NRV is only $40. This implies a $10 write-down per Model B unit. So, for 50 units, the total write-down would be $500. The effects of the adjustment would involve debiting (increasing) an expense account such as Cost of Goods Sold and crediting (decreasing) the Inventory account.
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Product focused processes: allow more customization, but are not very efficient. are desirable because resource needs increase slowly with the complexity of a process. are processes that are specialized for relatively few products or customer groups. apply only to service firms, not to manufacturers. are profitable because customers demand flexibility, not specialization.
Answer:
The correct answer is letter "C": are processes that are specialized for relatively few products or customer groups.
Explanation:
Product-focused processes are those that follow a market segmentation. Companies decide to what sector of the market they will drive their efforts towards and specializes in the manufacturing of a determined good.
Production tends to involve high volumes and low variety process but provides manufacturers relatively high facility utilization. Examples of product-focused processes are the production of light bulbs or bolts.
Product focused processes are operations tailored for relatively few products or clients, providing efficiency and specialization, but limited flexibility. These processes are applicable to both manufacturing and service companies. The profitability of these processes depends on the nature of the market demand.
Explanation:Product focused processes are specialized operations meant for producing relatively few products, or catering to a specific customer group. This method tends to be more efficient than process focused because individual processes are completed by specialized workers using dedicated machinery. However, such type of operations may not provide the same level of customization flexibility because changing the process for a new product or different version can be time-consuming and costly. These processes apply to both manufacturing and service firms.
The profitability of product focused processes depends on the demand of the market. If the market demands a specialized product not offered by many providers, a firm following a product focus strategy can command a higher price for its unique offering. On the other hand, if the market requires flexibility, a process-focused firm, which is generally capable of producing a wider array of products, might be more profitable.
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The writer of a put option _______________. agrees to sell shares at a set price if the option holder desires agrees to buy shares at a set price if the option holder desires has the right to buy shares at a set price has the right to sell shares at a set price
Answer:
agrees to buy shares at a set price if the option holder desires.
Explanation:
In the stock market a put option is the right of a buyer to buy an options contract on an underlying asset at a set price before or on a particular date.
A person will buy a put option if they forecast that the price of an underlying asset will go down. A put owner will only make profit when he sells below the purchase price.
The call option is when a person agree to sell options at a set price where the holder is willing to buy.
Caro estimates that the variable costs in the Maintenance Department total $11,000, and in the Cafeteria variable costs total $17,000. Avoidable fixed costs in the Maintenance Department are $5,000. Required: If Caro outsources the Maintenance Department, what is the maximum it can pay an outside vendor without increasing total costs
Answer:
If Caro outsources only the Maintenance department, she should pay not more than $11,000, the avoidable Fixed Costs is incidental to her operations and not that of the outsource partner thus the $5,000 shouldn't be included as a payment due the Outsource Partner.
Caro decision case
Maintenance department total costs:
Variable - $11,000
Avoidable fixed costs - $5,000
Total costs (if not outsourced) = $16,000
Explanation:
Final answer:
The maximum amount Caro can pay to outsource the Maintenance Department without increasing total costs is the sum of avoidable fixed costs and variable costs, which is $16,000.
Explanation:
The question asks for the maximum amount Caro can pay an outside vendor to outsource the Maintenance Department without increasing total costs. Caro's current costs for the Maintenance Department consist of variable costs totaling $11,000 and avoidable fixed costs of $5,000. To determine the maximum amount for outsourcing, we add these costs, giving us a total of $16,000. This is the maximum that Caro can pay to an external vendor without incurring additional costs beyond what is currently being spent internally.