Answer:
The answer is option A
Explanation:
Amount($) Activity cost pools Allocated amount($)
Wages and salaries 340,000 30% 102,000
Depreciation 160,000 15 % 24,000
Occupancy 220,000 15 % 33,000
Total 720,000 159,000
Cost driver (hours) 30,000 machine hours
Rate per machine hr 159,000 ÷ 30,000
=$ 5.30
Which conditions would allow Country X to have an absolute advantage over Country Y in the
production of automobiles?
O Country X's workers eam higher wages
O Country X can manufacture cars more cheaply.
O Country Y has a protective tariff on car imports.
O Country Y subsidizes its automobile industry.
Next
Answer:
O Country Y has a protective tariff on car imports.
Explanation:
A protective tariff is "a tariff imposed to protect domestic firms from import competition "
Answer:
Country X can manufacture cars more cheaply.
Explanation:
took test
The following data have been recorded for recently completed Job 323 on its job cost sheet. Direct materials cost was $2,063. A total of 33 direct labor-hours and 234 machine-hours were worked on the job. The direct labor wage rate is $18 per labor-hour. The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $24 per machine-hour. The total cost for the job on its job cost sheet would be:
Answer:
$8,723
Explanation:
Calculation for total cost for the job on its job cost sheet
Direct materials 2,063
Direct labor (33 hours × $18 per hour) 594
Manufacturing overhead (234 hours × $24 per hour) 5,616
Total manufacturing cost for job 8,273
Copper Corporation, a calendar year C corporation, owns stock in Bronze Corporation and has net operating income of $900,000 for the current year. Bronze Corporation pays Copper a dividend of $150,000. What amount of dividends received deduction may Copper claim if it owns 85% of Bronze stock (and the two corporations are members of the same affiliated group)? (Assume Copper's dividends received deduction is not limited by its taxable income.)
Answer:
$150,000
Explanation:
Copper Corporation
The amount of dividends received deduction will tend to depends upon the ownership percentage by the corporate shareholder.
Therefore in a situation where Copper Corporation is said to owns only 85% of what Bronze Corporation had, Copper Corporation definitely qualify for a percentage of 100 deduction or a total amount of $150,000.if we have to based on the above information given because Bronze Corporation pays Copper Corporation a dividend of $150,000.
Consider the following payoff matrix facing Harry and Sally when each chooses to go to the coffee shop listed. Both Harry and Sally would like to meet each other but are shy about asking the other out on a date. Harry Starbucks Dunkin Donuts Sally Starbucks H:1,S:1 H:0,S:0 Dunkin Donuts H:0,S:0 H:1,S:1 What is Harry's best strategy?
Answer:
Harry has no best strategy
Explanation:
Game theory looks at the interactions between participants in a competitive game and calculates the best choice for the player.
Dominant strategy is the best option for a player regardless of what the other player is playing.
Nash equilibrium is the best outcome for a player where no player has an incentive to change their decisions.
If Harry and Sally goes to Dunkin Donuts, they both have a payoff of 1. If they go to different restaurants they have a payoff of zero. If they both go to Starbucks, they have a payoff of 1. Harry doesn't have a clear best strategy. So , he doesn't have a best strategy.
I hope my answer helps you
A manufacturer produces 1,000 basketballs each day, which it sells to customers for $30 each. All costs associated with production and sales total $10,000; however, if the manufacturer were to produce one additional basketball per day, total costs would increase to $10,100. From these amounts, we can tell that:________
a. the firm has negative profit.
b. marginal cost equals $100.
c. marginal cost equals $150.
d. marginal cost equals marginal revenue.
Answer:
b. marginal cost equals $100.
Explanation:
Marginal Cost is the cost of one extra unit produced.
Marginal Cost = $10,100 - $10,000 = $100
Marginal revenue is revenue earned per extra j
Unit sold. Marginal revenue equals price. $30
Marginal cost is greater than marginal revenue
Profit = Total revenue - Total cost = (1,000 × $30) - $10,000 = $20,000
Profit is positive
I hope my answer helps you
Granny Carney Associates surveys American eating habits. The company's accounts include Land, Buildings, Office Equipment, and Communication Equipment, with a separate Accumulated Depreciation account for each depreciable asset. During 2018, Granny Carney Associates completed the following transactions: (Click the icon to view the transactions.) Record the transactions in the journal of Granny Carney Associates. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Jan. 1: Purchased office equipment, $119,000. Paid $84,000 cash and financed the remainder with a note payable. (Record a single compound journal entry.) Date Accounts and Explanation Debit Credit Jan. 1
Jan. 1 Purchased office equipment, $119,000. Paid $84,000 cash and financed the remainder with a note payable. Apr. 1 Acquired land and communication equipment in a lump-sum purchase. Total cost was $320,000 paid in cash. An independent appraisal valued the land at $252,000 and the communication equipment at $84,000. Sep. 1 Sold a building that cost $570,000 (accumulated depreciation of $265,000 through December 31 of the preceding year). Granny Carney Associates received $430,000 cash from the sale of the building. Depreciation is computed on a straight-line basis. The building has a 40-year useful life and a residual value of $45,000. Dec. 31.
Recorded depreciation as follows:
Communication equipment is depreciated by the straight-line method over a five-year life with zero residual value. Office equipment is depreciated using the double-declining-balance method over five years with a $4,000 residual value.
Answer:
Jan 1
Dr Office equipment 119,000
Cr Cash 84,000
Cr Note payable 35,000
April 1
Dr Land 240,000
Dr Communication equipment 80,000
Cr Cash 320,000
Sept 1
Dr Cash 430,000
Dr Accumulated depreciation -Building 265,000
Cr Building 570,000
Cr Gain on sales of building 125,000
Dec 31
Depreciation expenses 12,000
Dr Accumulated Depreciation 12,000
Explanation:
Granny Carney Associates Journal entries
Jan 1
Dr Office equipment 119,000
Cr Cash 84,000
Cr Note payable 35,000
(119,000-84,000)
April 1
Dr Land 240,000
(320,000×252,000/252,000+84,000)
Dr Communication equipment 80,000
(320,000×84,000/252,000+84,000)
Cr Cash 320,000
(80,000+240,000)
Sept 1
Dr Cash 430,000
Dr Accumulated depreciation -Building 265,000
Cr Building 570,000
Cr Gain on sales of building 125,000
Dec 31
Depreciation expenses 12,000
(80,000-0)/5×9months/12months
Dr Accumulated Depreciation 12,000
Leona Figueroa is a new employee in the payroll department of Octolium Computers. After working at the company for one week, she asks you why it is so important to submit new hire documentation. What guidance will you offer her
Answer:
The hiring documents of an employee are very important because they allow to legalize and consider as approved the function or work that a worker is going to perform.
Explanation:
The new employee recruitment documentation allows us to check if it is really possible to carry out the hiring for that the documents must be complete as for example there must be a support of the identity document of the employee, a support of the social security as well as the number of affiliation, and a home support. After verification and compliance with these requirements, we proceed to contract.
Digital Corp is considering investing in project A. Their accountants gave them the following information: Initial investment: $1,200,000 Salvage Value: $340,000 Contribution Margin: $320,000 Present Value of Cash Flows: 4,580,000 Annual Cash Inflow: $850,000 Cost of Capital: 9% Length of project: 5 years What is the payback period
Answer:
The payback period for the investment is 1.41 years
Explanation:
The payback period is the length of time it takes an investment to repay back the investment capital outlay committed to it at the inception of the project.
The payback period is computed as the initial investment divided by annual cash inflow
Initial investment is $1,200,000
Annual cash inflow is $850,000
Payback period=$1,200,000/$850,000= 1.41 years
We can express the 0.41 in months=0.41*12=4.92 approximately 5 months
You are going to sell your house. You are determining what the price should be. To help you, you have collected information of houses that have sold in your neighborhood during the past eighteen months. You checked houses within a four mile radius and here is the information you collected. You are going to base your determination of the price of your house based on the following information. Evaluate and discuss whether the data collected was appropriate and representative of the information that is needed to analyze the problem presented in the problem setting.
House House Age Square Feet Selling Price
1 33 1812 $190,000
2 32 1915 $205,200
3 32 1840 $194,000
4 32 1832 $192,000
5 33 1851 $202,000
6 34 2032 $208,600
7 31 1755 $188,200
8 30 1805 $205,000
9 28 1900 $215,000
10 29 1485 $192,000
11 31 1525 $195,000
12 32 1515 $192,200
13 33 1685 $201,300
14 34 1600 $205,400
15 35 1650 $218,000
ANSWER: The data collected is NOT an appropriate representation that can be used to determine how much you should sell your house.
EXPLANATION: A house is evaluated by the contents which were used to build it. For instance a house built with a bricks can not be of the same value with a wood or block house, even though they have the same pattern.
Because the data does not show the values of the contents of the house, which are: walls, pattern, designs, how many stirs, roof, and interior quality, it cannot be used to determine the price you should sell your house.
Also, looking at the data gotten, you can understand that this houses has been sold according to the contents that made up the building, because some old builder were sold more costlier than some new buildings, and some building with a much bigger square feet were sold in a lower price when compared to some buildings with a smaller square feet
Wings Co. budgeted $572,000 manufacturing direct wages, 2,500 direct labor hours, and had the following manufacturing overhead: Overhead Cost Pool Budgeted Overhead Cost Budgeted Level for Cost Driver Overhead Cost Driver Materials handling $ 196,000 4,900 pounds Weight of materials Machine setup 19,600 560 setups Number of setups Machine repair 1,600 32,000 machine hours Machine hours Inspections 16,500 330 inspections Number of inspections Requirements for Job #971 which manufactured 4 units of product: Direct labor 20 hours Direct materials 220 pounds Machine setup 30 setups Machine hours 16,700 machine hours Inspections 15 inspections The total overhead of Job #971 under the ABC costing is:
Answer:
Total allocated overhead= $11,435
Explanation:
Giving the following information:
Materials handling $196,000 4,900 pounds
Machine setup $19,600 560 setups
Machine repair $1,600 32,000 machine hours
Inspections $16,500 330 inspections
Job 971
Direct labor 20 hours
Direct materials 220 pounds
Machine setup 30 setups
Machine hours 16,700 machine hours
Inspections 15 inspections
First, we need to calculate the estimated overhead rate for each activity:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Materials handling= 196,000/4,900= $40 per pound
Machine setup= 19,600/560= $35 per setup
Machine repair= 1,600/32,000= $0.05 per machine hour
Inspections= 16,500/330= $50 per inspection
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Materials handling= 40*220= 8,800
Machine setup= 35*30= 1,050
Machine repair= 0.05*16,700=835
Inspections= 50*15= 750
Total allocated overhead= $11,435
A manager buys three shares of stock today, and then sells one of those shares each year for the next 3 years. His actions and the price history of the stock are summarized below. The stock pays no dividends.
Time Price Action
0 $190 Buy 3 shares
1 200 Sell 1 share
2 200 Sell 1 share
3 200 Sell 1 share
A. Calculate the time-weighted geometric average return on this "portfolio."
B. Calculate the time-weighted arithmetic average return on this portfolio.
C. Calculate the dollar-weighted average return on this portfolio.
Answer:
a. The Geometric average return is 1.72%
b. The Arithmetic average return is 1.75%
c. The Dollar weighted average return is 2.61%
Explanation:
a) In order to calculate the time-weighted geometric average return we would have to calculate first the Holding period return as follows:
Holding period return = (200 - 190) / 190 = 5.263%
Hence, Geometric average return = (1 + .05263)^(1/3) - 1 = 1.72%
b) To calculate time-weighted arithmetic average return we have to make the following calculation:
Arithmetic average return = 5.263% / 3 = 1.75%
c) To calculate time-weighted arithmetic average return we would have to make the following calculation:
Dollar weighted average return=-190*3 + 200/(1+r) + 200/(1+r)^2 + 200 / (1+r)^3 = 0
= 2.61%
A country produces melons and wheat. 1.) Using the 3-point curved line drawing tool, draw a representative PPC for this country. Label it 'PPC'. 2.) Using the point drawing tool, show a production point that is efficient. Label it 'A'. 3.) Using the point drawing tool, show a production point that is attainable but not efficient. Label it 'BE'. Carefully follow the instructions above, and only draw the required objects.
Answer:
1.) Using the 3-point curved line drawing tool, draw a representative PPC for this country. Label it 'PPC'.
I have attached a picture below. It shows a simple possibilities frontier for a country that can produce up to 16 units of melons and wheat.
2.) Using the point drawing tool, show a production point that is efficient. Label it 'A'
Producition points that are efficient are any points on the curve. Producing 16 melons and 0 wheat is efficient because all economic resources are being used to produce the maximum amount of a good that is possible. Producing 8 melons, and 8 units of wheat is also efficient for the same reason.
3.) Using the point drawing tool, show a production point that is attainable but not efficient.
Any point inside the curve would be inefficient because resouces would be used to produce less than the maximum amount possible. For example, if 15 units of wheat are produced, but less than one unit of melon is produced, then, there is inefficiency, because 1 unit of melon should be produced in that case.
The following partially completed process cost summary describes the July production activities of Ashad Company. Its production output is sent to its warehouse for shipping. All direct materials are added to products when processing begins. Beginning work in process inventory is 20% complete with respect to conversion.Equivalent Units of ProductionDirect MaterialsConversion Units transferred out43,000 43,000 Units of ending work in process 4,700 2,820 Equivalent units of production47,700 45,820 Costs per EUPDirect MaterialsConversion Costs of beginning work in process$ 28,450 $3,270 Costs incurred this period 667,970 271,650 Total costs$696,420 $274,920 Units in beginning work in process (all completed during July) 4,200 Units started this period 43,500 Units completed and transferred out 43,000 Units in ending work in process 4,700Prepare its process cost summary using the weighted-average method. (Round "Cost per EUP" to 2 decimal places.)
Answer:
Materials costs =$ 14.6 Per EUP
Conversion Costs= $6 Per EUP
Explanation:
Ashad Company
Process Cost Summary
Weighted Average Method
Equivalent Units of Production
Direct Materials Conversion
Units transferred out 43,000 43,000
Units of ending work in process 4,700 2,820
Equivalent units of production 47,700 45,820
Costs per EUP
Direct Materials Conversion
Costs of beginning work in process$ 28,450 $3,270
Costs incurred this period 667,970 271,650
Total costs $696,420 $274,920
Equivalent units of production 47,700 45,820
Cost Per Equivalent Unit $696,420/ 47,700 $274,920/ 45,820
$ 14.6 Per EUP $6 Per EUP
Suppose subway ridership in New York City declined by 10 percent after a fare increase of 25 cents to $2.75. Using the midpoint method, an estimate of the price elasticity of demand for subway rides is . True or False: According to your estimate, the Transit Authority's revenue rises when the fare increases. True False
Answer: Elasticity is 1.05
False
Explanation:
The Price Elasticity of Demand which measures how demand for goods change in relation to a change in price is calculated by the following formula,
Elasticity of demand = % change in Quantity ÷ % change in Prices
The Midpoint method is a method of estimating price percentage change by dividing the change in price by the AVERAGE of the new price and the old price.
The average of the changes are,
= (2.75 + (2.75 - 0.25))/2
= (2.75 + 2.5)/2
= 2.625
The Midpoint method gives a chance in price of,
= (2.75 - 2.65 )/ 2.625
= 9.5%
The Elasticity is therefore,
= Elasticity of demand = % change in Quantity ÷ % change in Prices
= 10% / 9.5%
= 1.05
According to this, the Transit Authority's revenue will not rise when Fair increases because the Elasticity is quite close to 1. An elasticity of 1 means that when fares increase, people using trains decrease by almost the same amount so revenue remains the same.
Geoffrey, Suzanne, Jay, and Emma are college roommates. They're trying to decide where the four of them should go for spring break: Las Vegas or Vail. If they order the tickets by 10:00 PM on February 1, the cost will be just $500 per person. If they miss that deadline, the cost rises to $1,200 per person.
The following table shows the benefit (in dollar terms) that each roommate would get from the two trips.
Roommate Benefit from Las Vegas Benefit from Vail
Geoffrey $600 $1,300
Suzanne $850 $850
Jay $900 $700
Emma $1,100 $650
The roommates tend to put off making decisions. So, when February 1 rolls around and they still haven't made a decision, they schedule a vote for 9:00 PM that night. In case of a tie, they will flip a coin between the two vacation destinations.
The roommates will get the most total benefit if they choose to go to .
Given the individual benefits each roommate receives from the two trips, which trip will each roommate vote for? Fill in the table with each roommate's preferred location, assuming that a given roommate will abstain if he or she has no preference.
Roommate Vote
Emma
Jay
Suzanne
Geoffrey
Under majority rule, the roommates will vote to go to . Therefore, majority rule leads to an economically outcome.
Suppose Emma misses the vote, leaving Geoffrey, Suzanne, and Jay to figure out where they're going to go.
Geoffrey and Jay argue for their preferred destinations, but Suzanne offers to vote with Geoffrey if Geoffrey will vote on her side in an upcoming class election. This is an example of:________.
Answer: Please refer to explanation
Explanation:
1. The roommates will get the most total benefit if they choose to go to ________.
To answer this, you add the total benefit they could all get from going to either Las Vegas or Vail.
Las Vegas
= 600 + 850+ 900 + 1,100
= $3,450
Vail
= 1,300 + 850+ 700 + 650
= $3,500
The room mates in total will get a higher benefit if they choose to go to Vail.
2. Which location will each pick based on their benefits.
Emma gets a higher benefit if they go to Las Vegas so they will pick that.
Jay gets a higher benefit if they go to Las Vegas as well so they will pick that.
Suzanne will abstain as both places give them the same benefit.
Geoffrey gets a higher benefit if they go to Vail so they will pick that.
3. Under majority rule, the roommates will vote to go to ________ .
They will vote to go to Las Vegas because Emma and Jay will vote for it, Suzanne will abstain and Geoffrey will vote for Vail meaning 2 votes out of 3 for Las Vegas.
4. Therefore, majority rule leads to an economically _______ outcome.
Inefficient outcome because in total they will get a smaller benefit going to Las Vegas as opposed to Vail.5. This is an example of:________.
Logrolling
Logrolling is a practice by which people promise to mutually support each other at different times. Simply speaking, one will support the other in exchange for the other supporting the one at some later period in time. This is the deal that Suzanne offer Geoffrey.
Victory Company uses weighted-average process costing to account for its production costs.
Conversion costs are added evenly throughout the process.
Direct materials are added at the beginning of the process.
During November, the company transferred 800,000 units of product to finished goods.
At the end of November, the work in process inventory consists of 187,000 units that are 60% complete with respect to conversion.
Beginning inventory had $192,465 of direct materials and $159,635 of conversion cost.
The direct material cost added in November is $1,288,035 and the conversion cost added is $3,033,065.
Beginning work in process consisted of 74,000 units that were 100% complete with respect to direct materials and 80% complete with respect to conversion.
Of the units completed, 74,000 were from beginning work in process and 726,000 units were started and completed during the period.
Required:1. Determine the equivalent units of production with respect to direct labor and direct materials.2. Compute both the direct labor cost and the direct materials cost per equivalent unit. (Round "Cost per EUP" to 2 decimal places.)3. Compute both direct labor cost and direct materials cost assigned to units completed and transferred out and ending goods in process inventory. (Round "Cost per EUP" to 2 decimal places.)
Answer:
1. Direct Materials = 987,000 units , Direct Labor = 912,200 units
2.Direct Materials = $1.50 , Direct Labor = $3.50
3.
Units Completed and Transferred Costs
Direct Materials = $ 1,200,000
Direct Labor = $ 2,800,000
Ending goods in process inventory cost
Direct Materials = $ 280,500
Direct Labor = $ 392,700
Explanation:
First step is to determine the equivalent units of production with respect to direct labor and direct materials
Direct Materials
Note : Materials are added at beginning of the process hence, they are 100 % complete for both units categories
Units Completed and Transferred (800,000 × 100%) = 800,000
Units of Ending Work In Process (187,000 × 100%) = 187,000
Equivalent units of production = 987,000
Direct Labor
Note : Conversion costs are added evenly throughout the process, hence we need to establish units to the extent of work done.
Units Completed and Transferred (800,000 × 100%) = 800,000
Units of Ending Work In Process (187,000 × 60%) = 112,200
Equivalent units of production = 912,200
The next step is to Calculate the Total Cost of Production with respect to direct labor and direct materials incurred during the period.
Direct Materials
Cost in Opening Work In Process = $192,465
Cost added during the period = $1,288,035
Total Costs = $1,480,500
Conversion
Cost in Opening Work In Process = $159,635
Cost added during the period = $3,033,065
Total Costs = $3,192,700
Then use the above data to calculate the cost per equivalent unit for direct labor and direct materials.
Cost per equivalent unit. = Total Cost / Total Equivalent units
Direct Materials = $1,480,500 / 987,000 = $1.50
Direct Labor = $3,192,700 / 912,200 = $3.50
CONCLUSION :
Units Completed and Transferred Costs
Direct Materials = (800,000 × $1.50) = $ 1,200,000
Direct Labor = (800,000 × $3.50) = $ 2,800,000
Ending goods in process inventory cost
Direct Materials = (187,000 × $1.50) = $ 280,500
Direct Labor = (112,200 × $3.50) = $ 392,700
The gross earnings of the factory workers for Oriole Company during the month of January are $72,000. Of the total accumulated cost of factory labor, 84% is related to direct labor and 16% is attributable to indirect labor.(a)Record the factory labor costs for the month of January.(b)Assign factory labor to production.
Answer:
a.
Wages Expense $72,000 (debit)
Wages Payable $72,000 (credit)
b.
Work In Process : Direct Labor $60,480 (debit)
Work In Process : Direct Labor $11,520 (debit)
Wages Payable $72,000 (credit)
Explanation:
The factory labor cost is a manufacturing cost and is included in product valuation.
(a)Record the factory labor costs
Here we have to recognize the expense incurred during the period and the liability since settlement of amount owing to workers has not yet been made
Wages Expense $72,000 (debit)
Wages Payable $72,000 (credit)
(b)Assign factory labor to production
Here we accumulate the cost to the Work In Process of manufacture taking not of cost classification.
Work In Process : Direct Labor $60,480 (debit)
Work In Process : Direct Labor $11,520 (debit)
Wages Payable $72,000 (credit)
g Depreciation refers to which one of the following? The amount of money that is lost over a period when services are underutilized. An estimate of how much of a tangible asset has been used during an accounting period: considered an expense that requires the use of cash deducted from the operations revenue. The amount of money still owed on a tangible asset, minus the amount of expenses spent to facilitate the utilization of the asset (utilities, personnel, enabling assets, etc.). An estimate of how much of a tangible asset has been used during an accounting period: considered an expense that does not require any cash outflow under the accrual basis accounting.
Answer:
The answer is D
Explanation:
Depreciation is best described as An estimate of how much of a tangible asset has been used during an accounting period: considered an expense that does not require any cash outflow under the accrual basis accounting.
Depreciation reduces the value of an asset and it reduces it over the life span of an asset. Depreciation is a non cash reduction. Depreciation tells us how much the value of an asset has reduced.
The formula is (cost of the asset - any residual value) ÷ the number of useful life span
A part of a business's message that distinguishes it from all its competitors
is referred to as what?
Answer: Brand.
Explanation:
A brand usually a logo, name, word or sentence or the comnbination is a company's valuable assets that distinguishes its their product from its competitors. Overtime, A Brand which proves credibility will promote the company's worth and value and endear potential buyers to the benefit its owners and shareholders. A brand becomes a trademark when legal protection is conferred on it.
Answer:
unique selling proposition
Explanation:
Toward the end of the selection process, Eleanor is one of two final candidates. She meets with the company's executive vice-president in her third interview, and they spend most of the time discussing Eleanor's experiences working in different corporate cultures. This interview is likely a structured interview.A. TrueB. False
Answer:
The correct answer is the option A: True.
Explanation:
To begin with, the term of "structured interview" refers to the type of interview that is previously planned in order to already had the questions by the time the person comes to the interview, and therefore that it does not implicates to be doing questions at random. Moreover, it is used in order to gain time and to obtain the major amount of information about the person that the interviewer wants. That is why, that in this case is likely an structured interview due to the fact that the employeer already knew what he wanted to know about the person and therefore he is focus on having that information, in this case, previous experience work.
Sean is a baseball player who earns $890,000 per year playing for team X. If he weren't playing baseball for team X, he would be playing baseball for team Y and earning $660,000 per year. If he weren't playing baseball at all, he would be working as an accountant earning $90,000 per year. What is his economic rent as a baseball player?
Answer: The answer is given below
Explanation:
Economic rent is a payment to a factor of production that is in excess of the costs which are needed to bring the factor into production. It is the payment in excess of the opportunity cost.
Economic rent = Present opportunity - opportunity cost.
Sean is a baseball player who earns $890,000 per year playing for team X. If he weren't playing baseball for team X, he would be playing baseball for team Y and earning $660,000 per year. His economic rent in this case will be:
Economic rent = Present opportunity - opportunity cost.
= $890,000 - $660,000
= $230,000
If he weren't playing baseball at all, he would be working as an accountant earning $90,000 per year. His economic rent in this case will be:
Economic rent = Present opportunity - opportunity cost.
= $890,000 - $90,000
= $800,000
Bartel Corporation produces bar stools for restaurants.
1. For each of the following, indicate whether the cost would typically be considered direct or indirect cost for the cost object given.
A. Lubricants used on the bar stool manufacturing equipment.
B. The factory supervisor's salary for the bar stool factory.
C. The production labor wages for the bar stool assemblers.
D. Nails and screws used in the production of the bar stools.
E. Manufacturing costs for wood and steel used in the bar stools.
2. For each of the following, indicate whether the cost would typically be considered product or period cost for the cost object given.
A. Electricity costs to run the factory.
B. Accountant salaries.
C. Selling costs for the period.
D. Delivery costs to take the bicycles to stores.
E. Tires for the bicycles.
Answer: The answers are provided below
Explanation:
1. Direct cost are the major part of cost and can be traced to a cost object while indirect cost are typically small cost and difficult to trace to a specific cost object.
A. Lubricants used on the bar stool manufacturing equipment - indirect cost
B. The factory supervisor's salary for the bar stool factory - indirect cost
C. The production labor wages for the bar stool assemblers - direct cost
D. Nails and screws used in the production of the bar stools - direct cost
E. Manufacturing costs for wood and steel used in the bar stools - direct cost.
2. A manufacturer's product costs are direct labor, direct materials, and the manufacturing overhead that are used in making its products while the period costs are written as expenses in an accounting period. Period costs are associated with passage of time and examples include the general and administrative expenses, like rent, office supplies, office depreciation, and utilities
A. Electricity costs to run the factory - product cost
B. Accountant salaries - period cost
C. Selling costs for the period - period cost
D. Delivery costs to take the bicycles to stores - period cost
E. Tires for the bicycle - product cost
Compton Associates is an architectural firm that has been in practice only a few years. Because it is a relatively new firm, the market for the firm's services is very competitive. To compete successfully, Compton must deliver quality services at a low cost. Compton presents the following data for 2016 and 2017.Compton Associates is an architectural firm that has been inArchitect labor-hour costs are variable costs. Architect support costs for each year depend on the Architect support capacity that Compton chooses to maintain each year (that is, the number of jobs it can do each year). Architect support costs do not vary with the actual number of jobs done that year.Required1. Is Compton Associate's strategy one of product differentiation or cost leadership? Explain briefly.2. Describe key measures you would include in Compton's balanced scorecard and your reasons for doing so.
Answer:
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Explanation:
In January 2017, Crane Company, a newly formed company, issued 9500 shares of its $8 par common stock for $13 per share. On July 1, 2017, Crane Company reacquired 950 shares of its outstanding stock for $10 per share. The acquisition of these treasury sharesa. increased total stockholders' equity.b. decreased the number of issued shares.c. decreased total stockholders' equity.d. did not change total stockholders' equity.
Answer:
The correct option is C, decreased total stockholders' equity
Explanation:
By reacquiring 950 shares out of the issued shares of 9,500 shares ,the company takes possession of the 950 shares and give cash to stockholders in return for the shares repossessed.
As a result the total stockholders' equity would reduce, this is usually accounted for by deducting the cost of such repurchase from total stockholders' equity in the equity section of the balance sheet
Playful Pens, Inc., makes a single model of a pen. The cartridge for the pen (which contains the ink) is manufactured on one machine. The cartridge holder (which you hold when you use the pen)is manufactured on another machine. Monthly capacities and production levels are as follows:
Machine 1 (Cartridge) Machine 2 (Holders)
Monthly capacity 1,000,000 800,000
Monthly production 800,000 800,000
The company could sell 1,000,000 pens per month. The units (cartridge inside of holder) sell for $10.40 each and have a variable cost of $4.10 each. Fixed costs are $4,200,000 per month.
Required:
a. Is there a bottleneck at Playful Pens on Machine 1 or Machine 2?
A. Machine 1
B. Machine 2
b. Playful Pens's production supervisors state they could increase machine 2's capacity by 200,000 per month by producing holders on the weekend. Producing on the weekend would not affect the sales price. Variable cost per unit would increase by $1.10 for those produced on the weekend because of the premium paid to labor. Fixed costs would also increase by $820,000 per month.
b-1. Calculate the differential operating profit (loss). (Losses and amounts to be deducted should be indicated with a minus sign.)
Differential Revenues
Differntial costs:
Variable
Fixed
b-2. Should Playful Pens produce holders on the weekend?
Yes
No
c. Independent of the situation in requirement (b), Playful Pens could expand the capability of machine 2 by adding additional workers to perform ongoing maintenance. This would increase its capacity by 100,000 holders per month. This would not affect sales price or fixed costs, but would increase variable cost to $4.62 per unit for all units produced.
c-1. Calculate the differential operating profit (loss). (Losses and amounts to be deducted should be indicated with a minus sign.)
Differential revenues
Differential costs:
Variable cost increase on current production:
Variable cost on new production:
c-2. Should Playful Pens expand Machine 2's capability by adding these additional workers?
Yes
No
Answer:
a) B. Machine 2
b) $220,000
b-2) Yes , positive differential profit.
c-1) $162,000
c-2) Yes , positive differential profit.
Explanation:
B) Differential revenues = $10.40 x 200,000 = $2,080,000
Differential costs:
Variable cost on new production = $5.20 x 200,000 = $1,040,000
Fixed costs = $820,000
differential profit = $2,080,000 - $1,040,000 - $820,000 = $220,000
c) Differential revenues = $10.40 x 100,000 = $1,040,000
Differential costs:
Variable cost increase on current production = ($4.62 - $4.10) x 800,000 = $416,000
Variable cost on new production = $4.62 x 100,000 = $462,000
differential profit = $1,040,000 - $878,000 = $162,000
On February 18, 2021, Union Corporation purchased 600 IBM bonds as a long-term investment at their face value for a total of $600,000. Union will hold the bonds indefinitely, and may sell them if their price increases sufficiently. On December 31, 2021, and December 31, 2022, the market value of the bonds was $580,000 and $610,000, respectively.Required:2. & 3. Prepare the adjusting entry for December 31, 2021 and 2022. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
Dr unrealized holding gains and losses—OCI $20,000
Cr investment in bonds fair value adjustment $20,000
Dr investment in bonds fair value adjustment $30,000
Cr unrealized holding gains and losses—OCI $30,000
Explanation:
On 31st December 2021 the adjustment required is the difference between the cost of bond investment of $600,000 and the market value of the bonds which was $580,000, in a nutshell a unrealized loss of $20,000 is recorded.
The excess of fair value of market value of $610,000 over the previous year market value would be debited to fair value adjustment while it is also credited to unrealized holding gains and losses-OCI
Assume the company is considering investing in a new machine that will increase its fixed costs by $36,000 per year and decrease its variable costs by $10 per unit. Prepare a forecasted contribution margin income statement for 2018 assuming the company purchases this machine
Answer:
Find below complete question:
Hudson Co. reports the contribution margin income statement for 2017. Assume sales remain constant at 10.000 units.
HUDSON CO.
Contribution Margin Income Statement
For Year Ended December 31, 2017
Sales (10,000 units at $244 each) $2,440,000
Variable costs (10,000 units at $195 each) $1,950,000
Contribution margin $490,000
Fixed costs $327,600
Pretax Income $162,400
Assume the company is considering investing in a new machine that will increase its fixed costs by $36,000 per year and decrease its variable costs by $10 per unit.
Prepare a forecasted contribution margin income statement for 2018 assuming the company purchases this machine
The new pretax income is $226,400 compared to 2018 $162,400,which implies that investing in the new machine is viable
Explanation:
The forecast contribution margin income statement for 2018 is prepared below with fixed costs of $36,000 added to the previous cost of $327,600 while variable cost per unit drops by $10 to $185 per unit
Hudson Co,forecast contribution margin income statement for 2018
Sales (10,000*$244) $2,440,000
variable cost(10,000*$185) ($1,850,000)
Contribution margin $590,000
fixed costs( $327,600+$36,000) ($ 363,600)
Pretax income $ 226,400
The Ramapo Company produces two products, Blinks and Dinks. They are manufactured in two departments, Fabrication and Assembly. Data for the products and departments are listed below. Product Number of units Labor hrs per unit Machine hours per unit Blinks 1,000 4 5 Dinks 2,000 2 8 All of the machine hours take place in the Fabrication department, which has an estimated overhead of $84,000. All of the labor hours take place in the Assembly department, which has an estimated total overhead of $72,000. The Ramapo Company uses a single overhead rate to apply all overhead costs based on labor hours. What is the Single Plantwide Factory Overhead Rate for Blinks? Group of answer choices $19.50 $37.45 $78.00 $56.00
Answer:
Single Overhead Absorption rate = $19.5 per hour
Explanation:
Overhead absorption rate = Estimate overhead /Estimated labor hours
Estimated overhead = $84,000 + $72,000= 156 000
Estimated labour hours= ( 1000×4) + (2000× 2)=8,000 hours
Overhead absorption rate = 156,000/8,000 hours =$19.5 per hour
Single Overhead Absorption rate = $19.5 per hour
Morgana Company identifies three activities in its manufacturing process: machine setups, machining, and inspections. Estimated annual overhead cost for each activity is $150,000, $375,000, and $87,500, respectively. The cost driver for each activity and the expected annual usage are number of setups 2,500, machine hours 25,000, and number of inspections 1,750.
Compute the overhead rate for each activity.
Machine setups $ per setup
Machining $ per machine hour
Inspections $ per inspection
Answer:
Machine setup= $60 per setup
Machining= $15 per machine hour
Inspections= $50 per inspection
Explanation:
Giving the following information:
Estimated overhead costs:
Machine setup= 150,000
Machining= 375,000
Inspections= 87,500
The cost driver for each activity and the expected annual usage are number of setups 2,500, machine hours 25,000, and number of inspections 1,750.
To calculate the estimated manufacturing overhead rate we need to use the following formula:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Machine setup= 150,000/2,500= $60 per setup
Machining= 375,000/25,000= $15 per machine hour
Inspections= 87,500/1,750= $50 per inspection
Karla Tanner opens a web consulting business called Linkworks and recorded the following transactions in its first month of operations.
Apr. 1 Tanner invests $80,000 cash along with office equipment valued at $26,000 in the company in exchange for common stock.
Apr. 2 The company prepaid $9,000 cash for twelve months' rent for office space. The company's policy is record prepaid expenses in balance sheet accounts.
Apr. 3 The company made credit purchases for $8,000 in office equipment and $3,600 in office supplies. Payment is due within 10 days.
Apr. 6 The company completed services for a client and immediately received $4,000 cash.
Apr. 9 The company completed a $6,000 project for a client, who must pay within 30 days.
Apr. 13 The company paid $11,600 cash to settle the account payable created on April 3.
Apr. 19 The company paid $2,400 cash for the premium on a 12-month insurance policy. The company's policy is record prepaid expenses in balance sheet accounts.
Apr. 22 The company received $4,400 cash as partial payment for the work completed on April 9.
Apr. 25 The company completed work for another client for $2,890 on credit.
Apr. 28 The company paid $5,500 cash in dividends.
Apr. 29 The company purchased $600 of additional office supplies on credit.
Apr. 30 The company paid $435 cash for this month's utility bill.
Descriptions of items that require adjusting entries on April 30, 2015, follow.
a) On April 2, the company prepaid $9,000 cash for twelve months' rent for office space.
b) The balance in Prepaid insurance represents the premium paid for a 12-month insurance policy; the policy's coverage began on April 1.
c) Office supplies on hand as of April 30 total $1,200.
d) Straight-line depreciation of office equipment, based on a 5-year life and a $4,000 salvage value, is $500 per month.
e) The company has completed work for a client, but has not yet billed the $1,800 fee.
f) Wages due to employees, but not yet paid, as of April 30 total $2,600.
Use the 3-step adjusting entry process to prepare the adjusting entry necessary to correctly report the revenue earned or the expense incurred:
Step 1: Determine what the current account balance equals (See General Ledger tab)
Step 2: Determine what the current account balance should equal.
Step 3: Prepare an adjusting entry to get from Step 1 to Step 2.
Generally Accepted Accounting Principles (GAAP):
The GAAP is a blend of recommendations from government bodies and widely accepted accounting principles for reporting information. It promotes openness in the exchange of economic data and makes clear and consistent financial reporting possible across organizations.
Answer:
a) On April 2, the company prepaid $9,000 cash for twelve months' rent for office space.
Step 1:
Prepaid rent $9,000
Step 2:
Prepaid rent $9,000 - $750 = $8,250
Step 3:
Dr Rent expense 750
Cr Prepaid rent 750
b) The balance in Prepaid insurance represents the premium paid for a 12-month insurance policy; the policy's coverage began on April 1.
Step 1:
Prepaid insurance $2,400
Step 2:
Prepaid rent $2,400 - $200 = $2,200
Step 3:
Dr Insurance expense 200
Cr Prepaid expenses 200
c) Office supplies on hand as of April 30 total $1,200.
Step 1:
Office supplies $3,600 + $600 = $4,200
Step 2:
Office supplies $4,200 - $3,000 = $1,200
Step 3:
Dr Office supplies expense 3,000
Cr Office supplies 3,000
d) Straight-line depreciation of office equipment, based on a 5-year life and a $4,000 salvage value, is $500 per month.
Step 1:
Office equipment $26,000 + $8,000 = $34,000
Step 2:
Office supplies $34,000 - $500 = $33,500
Step 3:
Dr Depreciation expense 500
Cr Accumulated depreciation - equipment 500
e) The company has completed work for a client, but has not yet billed the $1,800 fee.
Step 1:
Service revenue $4,000 + $6,000 + $2,890 = $12,890
Step 2:
Service revenue $12,890 + $1,800 = $14,690
Step 3:
Dr Accrued receivable 1,800
Cr Service revenue 1,800
f) Wages due to employees, but not yet paid, as of April 30 total $2,600.
Step 1:
Wages expense $0
Step 2:
Wages expense $0 + $2,600 = $2,600
Step 3:
Dr Wages expense 2,600
Cr Wages payable 2,600