Answer:
engage in management openness by encouraging members to voice their opinion.
Explanation:
An important characteristic of management is approachability and openness of the manager to ideas of employees. This gives the manager an idea of the actual state of the workplace facilitating effective resolution of issues as they arise.
When employees know they can freely express themselves without being reprimanded, they better express themselves about challenges encountered.
Also opportunities and methods of doing things better is communicated to the manager
A decade ago the government of Weinsland decided to liberalize the country's economy. As a result, today the country is experiencing rapid economic advancement and societal changes favorable to international business. Which change is most likely to occur next in Weinsland?
A. As the country gets richer, there will be a shift in the society from "traditional" to "secular rational" values.
B. As the country gets richer, there will be a shift in the society from "well-being" to "survival" values.
C. The country, to further facilitate globalization, will commit to authoritarian ideologies.
D. The people in the country will give more importance to collectivism than to individualism.
E. The country will exhibit more need for social and material support structures built on collectives.
Answer:
As the country gets richer, there will be a shift in the society from "traditional" to "secular rational" values
Explanation:
In this scenario Weinsland decided to liberalize the country's economy. This will reduce government regulation on the economy and increase participation of private entities.
Liberalisation encourages economic growth.
Traditional conservative values are passed from generation to generation, and change only a little over time.
Secular rational values on the other hand embrace an ever changing economic environment where innovation constantly changes acceptable ways of doing things
Levine, Inc., has an ROA of 8.6 percent and a payout ratio of 33 percent.
What is its internal growth rate?
Answer:
Explanation:
Workings
Internal growth rate is the highest possible growth attained by a business without obtaining outside funding but with its retained earning.
Given information
ROA = 8.6%
Percentage Payout ratio = 33%
Internal growth rate = (ROA * Retention ratio) / 1 - (ROA * Retention ratio)
Retention ratio is the percentage earning that is no paid out in dividends
To calculate the retention ratio , we use the formula
Retention ratio = (1-percentage pay out ratio)
= 1 - 0.33 = 0.67
Substituting retention ratio for 0.67 in the inter growth rate formula
Therefore
Internal growth rate = (0.086*0.67)/1-(0.086*0.67)
0.05762/(1-0.05762) = 0.05762/0.94238
=0.0611
= 6.11%
Neil Andrews is the marketing manager for the National Basketball Association. Neil analyzes and tracks his marketing campaigns to determine the best success rate per project for increasing ticket sales. Neil uses an internal KPI to track his marketing campaign success. Which of the following would be an internal KPI Neil would use to track his marketing campaigns?
A. Marketing campaign market share eBook
B. Marketing campaign percentage of fans purchasing Sports Ilustrated magazine
C. Marketing campaign advertiser revenue sales
D. Marketing campaign ROI
Answer:
Option D
Explanation:
Neil Andrews, communications coordinator for that National Basketball Association. Neil evaluates and monitors its marketing strategies to assess the optimal rate of performance for a campaign to boost ticket prices. The ROI marketing campaign will be an internal KPI Neil used to track its marketing techniques.
Apps that are permitted to be installed on the company network, such as IM software and company computer equipment used mostly for personal purposes on online communities, are two fields that should be handled by organizational security administrators.
Thus, from the above we can conclude that the correct option is D.
A company uses direct labor costs as it allocation base. Management estimates the company will incur $150,000 of direct labor cost during the year and total overhead costs of $200,000. What is their predetermined overhead rate? 1.33% 133% 50% 75%
Answer:
133.33%
Explanation:
The computation of the predetermined overhead rate is shown below:
Predetermined overhead rate = Total overhead cost ÷ direct labor cost
where,
Total overhead cost is $200,000
And, the direct labor cost is $150,000
Now placing these values to the above formula
So, the predetermined overhead rate is
= $200,000 ÷ $150,000
= 1.33%
We simply applied the above formula
According to the Coase theorem, private parties can negotiate to an efficient solution in the presence of externalities if the is (are) relatively low.Suppose Jeremy, Francis, and Andrew are part of Mu Epsilon Nu, a college fraternity known for its very loud, rambunctious weekend parties. The parties annoy many of the residents in nearby apartment complexes due to the loud music and blaring neon lights. This is a(n)example:________
a.external cost
b. positive externality
c. neither
Plum Corporation (a C corporation and a computer manufacturer) donated 100 laptop computers to a local university (a qualified educational organization) this year. The computers were constructed by Plum earlier this year, and the university will use the computers for research and research training. Plum's basis in the computers is $35,000, and their fair market value is $120,000. What is Plum's deduction for the contribution of the computers (ignoring the taxable income limitation)?
Answer:
Plum’s deduction for the contribution of the computers is $70,000
Explanation:
According to the given data the contribution of the computers qualifies for the increased contribution amount available with respect to certain inventory.
Therefore, The contribution amount is equal to the lesser of :
1) $35,000 basis + 50 % * ( $120,000 FMV - $35,000 basis ) = $ 77,500 ( basis + 50 % of the appreciation on the property )
2) $35,000 * 2 = $ 70,000 ( twice the property's basis )
Therefore, Plum’s deduction for the contribution of the computers is $70,000.
Answer:
$70,000
Explanation:
Solution
Recall that:
Plum's basis in the computers is= $35,000
The fair market value is = $120,000.
Now,
We find the deduction for plum's corporation towards the contribution of computers.
Thus,
The donation of the computers allows for the increased amount contribution at hand with respect to certain inventory. The contribution amount is equal to the lesser of the following:
So,
35000 basis + 50 % * ( 120000 FMV - 35000 basis ) = $ 77500 ( basis + 50 % of the appreciation on the property )
Then
35000 * 2 = $ 70000 ( twice the property's basis )
Hence, Plum’s deduction for the contribution of the computers is 70000.
On January 3, Halsall Corporation purchased 1,800 shares of the company's $1 par value common stock as treasury stock, paying cash of $ 8 per share. On January 30, Halsall sold 1,200 shares of the treasury stock for cash of $9 per share. Journalize these transactions.
Answer:
The journal entries alongwith its explanation are as under:
Explanation:
Journal entry at Jan 3, to record purchase of treasury stock would include the recording of treasury stock at the price paid to the shareholders for purchase of the stock, the journal entry is as under:
Dr Treasury Stock (1800 share*$8 per share) $14,400
Cr Cash $14,400
Journal entry at Jan 30, of selling treasury stock would include the elimination of the treasury stock at the amount purchased and the remainder will will be the Paid-In Capital, the journal entry is as under:
Dr Cash (1200*9) $10,800
Cr Treasury stock (1200*8) $9,600
Cr Paid in capital from sale of treasury stock $1,200
Other things equal, the multiplier will be greater
Answer:
The larger
Explanation:
marginal propensity to consume. New loans decrease the money supply in an economy.
An adjusted trial balance is given below.
Debit Credit
Cash $12,000
Accounts Receivable 3,000
Prepaid Rent 700
Merchandise Inventory 25, 000
Accounts Payable $4,100
Salaries Payable 1,500
Notes Payable 800
Common Stock 8,000
Retained Earnings 3,500
Dividends 1,000
Sales Revenue 89,500
Cost of Goods Sold 21,000
Salaries Expense 20,000
Rent Expense 14,000
Selling Expense 8,300
Delivery Expense 1,900
Supplies Expenseâââââ 500âââââââââââââââ
Totalâ $107,400â$ 107,400
What will be the final balance in theâ corporation's Retained Earnings account after recording the closingâentries?
Answer:
$16,400
Explanation:
The formula for Retained Earnings = Total assets - Total Liabilities except Retained Earnings
Under the Balance sheet in accordance with this question, the asset recognizable are Cash Account Receivables Prepaid Rent and Merchandise inventory. The liability recognizable are Account payable, Salary Payable, Notes Payable and Common stocks
Therefore Retained earnings = (12000+3000+700+25000)-(14000+1500+800+8000)
Retained earnings = 40700 - 24300
Retained earnings = $16,400
The Converting Department of Osaka Napkin Company uses the average cost method and had 2,000 units in work in process that were 60% complete at the beginning of the period. During the period, 25,200 units were completed and transferred to the Packing Department. There were 1,100 units in process that were 30% complete at the end of the period.
a. Determine the number of whole units to be accounted for and to be assigned costs for the period.
b. Determine the number of equivalent units of production for the period.
Answer:
Equivalent Units
Material cost = 26,560
Conversion Cost= 25,540
Explanation:
We would assume the company uses weighted average method of valuation.
Under the weighted average method of valuation, to account for completed units, it is assumed that the entire degree of work required is done in the period under consideration. So there is no separation of the completed units into opening inventory and fully worked.
Equivalent units = Degree of completion (%) × Number of units
Material cost
Item Unit Equivalent unit
Completed 25,200 100% ×25200 = 25,200
Closing WIP 1,360 100%× 1,360 1360
Total equivalent units 26,560
Conversion Cost
Item Unit Equivalent unit
Completed 25,200 100% ×25200 = 25,200
Closing WIP 1,360 25%× 1,360 340
Total equivalent units
The Converting Department of Osaka Napkin Company uses the average cost method and had 2,000 units in work in process that were 60% complete at the beginning of the period.
A. To determine the number of whole units to be accounted for and to be assigned costs for the period, let's calculate the total equivalent units of production.
Whole units at the beginning of the period = 2,000 unit
Units started and completed during the period = 25,200 units
Whole units in process at the end of the period = 1,100 units
Total whole units to be accounted for:
= Whole units at the beginning + Units started and completed during the period + Whole units in process at the end
= 2,000 units + 25,200 units + 1,100 units
= 28,300 units
B. To determine the number of equivalent units of production for the period, we need to consider the percentage of completion for the units in process at the beginning and the units in process at the end.
Equivalent units of production for units in process at the beginning:
= Whole units at the beginning × Percentage of completion at the beginning
= 2,000 units × 60%
= 1,200 equivalent units
Equivalent units of production for units in process at the end:
= Whole units in process at the end × Percentage of completion at the end
= 1,100 units × 30%
= 330 equivalent units
Total equivalent units of production for the period:
= Equivalent units of production for units in process at the beginning + Equivalent units of production for units in process at the end + Units started and completed during the period
= 1,200 equivalent units + 330 equivalent units + 25,200 units
= 26,730 equivalent units
Therefore, the number of equivalent units of production for the period is 26,730 units.
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Spotter Corporation reported the following for June in its periodic inventory records. Date Description Units Unit Cost Total Cost June 1 Beginning 20 $ 10.00 $ 200.00 11 Purchase 30 11.00 330.00 24 Purchase 30 13.00 390.00 30 Ending 34 Required: Calculate the cost of ending inventory and the cost of goods sold under the (a) FIFO, (b) LIFO, and (c) weighted average cost methods. (Do not round your intermediate calculations. Round "Weighted Average Cost" to 2 decimal places.)
Answer:
(a) FIFO
cost of ending inventory = $442.00
cost of goods sold = $486.00
(b) LIFO
cost of ending inventory = $354.00
cost of goods sold = $566.00
(c) weighted average cost
cost of ending inventory = $391.00
cost of goods sold = $529.00
Explanation:
(a) FIFO
cost of ending inventory
cost of ending inventory = Number of Units left × Earliest Price
= 34 × $13.00
= $442.00
cost of goods sold (46 units sold during the year)
cost of goods sold : 20 units × $10 = $200
26 units × $11 = $286
Total = $486
(b) LIFO
cost of ending inventory
cost of ending inventory : 20 units × $10 = $200
14 units × $11 = $154
Total = $354
cost of goods sold (46 units sold during the year)
cost of goods sold : 30 units × $13 = $390
16 units × $11 = $176
Total = $566
(c) weighted average cost
cost of ending inventory
cost of ending inventory = Number of Units left × Average price
New Average Price = ((20 units × $10) + (30 units × $11)) / 50 units
= $10.60
New Average Price = ((50 units × $10.60) + (30 units × $13)) / 80 units
= $11.50
cost of ending inventory = 34 units × $11.50
= $391.00
cost of goods sold (46 units sold during the year)
cost of goods sold = Number of Units Sold × Average price
= 46 units × $11.50
= $529.00
c
Chang Industries has 1,200 defective units of product that have already cost $13.20 each to produce. A salvage company will purchase the defective units as they are for $4.20 each. Chang's production manager reports that the defects can be corrected for $6.80 per unit, enabling them to be sold at their regular market price of $19.40. The incremental income or loss on reworking the units is: Multiple Choice $18,240 income. $10,080 loss. $8,160 loss. $15,120 income. $10,080 income.
Answer:
$10,080 income
Explanation:
The computation of incremental income or loss on reworking the units is shown below:-
Incremental income on reworking unit = Sales after reworking - Sales to salvage company - Incremental cost
= (1,200 × $19.40) - (1,200 × $4.20) - (1,200 × $6.80)
= $23,280 - $5,040 - $8,160
= $10,080 income
Therefore for computing the Incremental income on reworking unit we simply applied the above formula.
The manager of the customer service division of a major consumer electronics company is interested in determining whether the customers who have purchased a Blu-ray player made by the company over the past 12 months are satisfied with their products. Which of the following will be a good frame for drawing a sample? a. telephone directory b. a list of potential customers purchased from a database marketing company c. voting registry d. the list of customers who returned the registration card
Answer:
D. The list of customers who returned the registration card
Explanation:
The list of customers who returned the registration card will be a good frame for drawing the sample because it will enable the company to easily and effectively known how good or bad the Blu-ray player was when used by the customers and the satisfaction the customers had from using the company products which is why checking through the record or list of customers who returned the registration card can be good frame from drawing the sample without error occuring because it will give the company the correct and accurate result of all what they need to know about how good or bad their Blue ray player was and the satisfaction their customers derived from using it.
Answer:
D. The list of customers who returned the registration card
Explanation:
The list of customers who returned the registration card will be a good frame for drawing the sample because it will enable the company to easily and effectively known how good or bad the Blu-ray player was when used by the customers and the satisfaction the customers had from using the company products which is why checking through the record or list of customers who returned the registration card can be good frame from drawing the sample without error occuring because it will give the company the correct and accurate result of all what they need to know about how good or bad their Blue ray player was and the satisfaction their customers derived from using it.
Which of the following is false?
a) Mail surveys are cheap but have low response rates.
b) Coverage error is when respondents give untruthful answers.
c) Focus groups are nonrandom but can probe issues more deeply.
d) Surveys posted on popular websites suffer from selection bias.
Answer:
b) Coverage error is when respondents give untruthful answers
Explanation:
Coverage error occurs when the target population isn't the population actually sampled.
Coverage error could be undercoverage or over coverage.
undercoverage is when the sampling population doesn't include all of the target population.
Over coverage is when some of the target population is over represented in the sample population.
I hope my answer helps you
Answer:
b) Coverage error is when respondents give untruthful answers.
Explanation:
Coverage error is a form of bias in experiments, where the selected sample does not match with the population for whom the experiment is actually meant for. This problem could arise as a result of undercoverage or overcoverage of samples.
Undercoverage is a situation wherein the members of the earmarked population are not included in the sample. Overcoverage occurs when samples that are not from the intended population, are included in error or even included more than once.
"The Price King Auto Mall pays their sales staff by commission. They are paid a percent of the profit the dealership makes on each sold car. If the profit is $900 or less, the commission rate is 18%. If the profit is great than $900 and less than or equal to $1,500, the commission rate is 20% of the profit. If the profit is higher than $1,500, the rate is 25% of the profit. Jared sold a car that made a profit of $2500. What is the amount of commission he will receive
Answer:
$625
Explanation:
He made a profit of $2500 which is greater than $1500, so he would earn a 25% commmision
25% of $2500 = $625
I hope my answer helps you
Joe has just moved to a small town with only one golf course, the Northlands Golf Club. His inverse demand function is pequals=140140minus−22q, where q is the number of rounds of golf that he plays per year. The manager of the Northlands Club negotiates separately with each person who joins the club and can therefore charge individual prices. This manager has a good idea of what Joe's demand curve is and offers Joe a special deal, where Joe pays an annual membership fee and can play as many rounds as he wants at $2020, which is the marginal cost his round imposes on the Club. What membership fee would maximize profit for the Club? The manager could have charged Joe a single price per round. How much extra profit does the Club earn by using two-part pricing? The profit-maximizing membership fee (F) is $nothing. (Enter your response as a whole number.)
Answer: $1800
Explanation:
Here is the correct question:
Joe has just moved to a small town with only one golf course, the Northlands Golf Club. His inverse demand function is p=140-2q, where q is the number of rounds of golf that he plays per year. The manager of the Northlands Club negotiates separately with each person who joins the club and can therefore charge individual prices. This manager has a good idea of what Joe's demand curve is and offers Joe a special deal, where Joe pays an annual membership fee and can play as many rounds as he wants at $20, which is the marginal cost his round imposes on the Club. What membership fee would maximize profit for the Club? The manager could have charged Joe a single price per round. How much extra profit does the Club earn by using two-part pricing? The profit-maximizing membership fee (F) is $nothing. (Enter your response as a whole number.)
Answer:
p = 140 - 2q
The profit-maximizing membership fee will be equal to total surplus
Therefore, the number of rounds that Joe played will be,
P = MC
20 = 140 - 2q
2q = 140 - 20
2q = 120
q = 120/2
q = 60
Total surplus = 1/2 × (vertical intercept of the demand curve - marginal cost) × the quantiy of rounds.
Total surplus = 1/2 × (140 - 20) × 60
= 1/2 × 120 × 60
= 3600
Therefore, the maximum membership fee will be = $3600.
If the firm charge Joe a single price , then the rounds provided will be such that MR = MC
Total revenue = price × quantity
TR = (140 - 2q) × q
TR = 140q - 2q²
MR = dTR/dQ = 140 - 4q
We then equate MR = MC
140 - 4q = 20
4q = 140 - 20
4q = 120
q = 120/4
q = 30
P = 140 - 2q
P = 140 - (2 × 30)
P = 140 - 60
P = 80
Therefore, the profit if a single price is charge will be:
= TR - TC = pq - MC×q = (P-MC)×Q
= (80-20) × 30
= $1800
Therefore, the increase in the profit by two-par pricing will be:
=Membership fee - Profit of single price charge
= $3600 - $1800
= $1800
Some major technology companies have faced scrutiny in the past when it comes to labor and human rights on the overseas suppliers' side. What are the challenges of monitoring overseas suppliers (especially tier 3, tier 4, etc.) that are guilty of not following labor and human rights guidelines
Answer: The answer is provided below
Explanation:
With overseas factories that continue to move to new locations with a lower labour costs, the monitoring and controlling working conditions becomes a challenge. Research has shown that companies do little to monitor human rights violations in the low-cost supply chain locations.
A scandal involving Apple was reported in 2014 at a manufacturing building in China. The building which was owned by Catcher Technology Co., manufactures metal iPad covers for iPhones. Some findings included hiring discrimination, locked safety exits, excessive work hours, and also unpaid overtime each month totalling about $290,000 in owed wages. The factory was reported to have been dumping its industrial fluids and waste into nearby rivers, and also not providing proper toxic equipment for the employees.
Human rights of these people saw n those area are being abused by having them exposed to pollution, which can lead to lung diseases.
Companies like Apple have said that they are continuing to monitor situations like this, and are fixing them, but we still hear cases of more wrongdoings, therefore you have to wonder how vital these issues truly are to the firms involved.
A firm is deciding between two different sewing machines. Technology A has fixed costs of $500 and marginal costs of $50 whereas Technology B has fixed costs of $250 and marginal costs of $100. If the price is $60 per unit, what is the break even amount of units for technology A?A. 50 B. 100 C. 150D. None-They would have to shut down
Answer:
A. 50 units
Explanation:
Break even point (units) = Fixed cost / (Selling price - Variable cost)
= $ 500 / ($ 60 - $ 50)
= $ 500/$10
= 50 units
The break-even point is derived by dividing the fixed costs of production by the price per unit - the variable costs of production. Break-even point is the level of production at which the costs of production equal the Income for the particular product
The statement of owner's equity shows a. only net income, beginning capital, and withdrawals b. only net income, beginning and ending capital c. only total assets, beginning and ending capital d. beginning and ending capital and all the changes in the owner's capital as a result of net income (loss), and withdrawals
Answer:
d. beginning and ending capital and all the changes in the owner's capital as a result of net income (loss), and withdrawals
Explanation:
The statement of owner's equity is a financial report that is prepared to indicate the changes in the owner's capital as a result of withdrawals, contributions, and net income or net loss. The structure of this report is beginning capital plus contributions plus net income less withdrawals which is equal to the ending capital. According to this, the answer is that the statement of owner's equity shows beginning and ending capital and all the changes in the owner's capital as a result of net income (loss), and withdrawals.
Farron Corporation, which has only one product, has provided the following data concerning its most recent month of operations:
Selling price $92
Units in beginning inventory 0
Units produced 8,700
Units sold 8,300
Units ending inventory 400
Variable costs per unit:
Direct materials $13
Direct labor $55
Variable manufacturing overhead $1
Variable selling and administrative $5
Fixed costs:
Fixed manufacturing overhead $130,500
Fixed selling and administrative $8,300
What is the unit product cost for the month under absorption costing?
a) $74 per unit
b) $89 per unit
c) $69 per unit
d) $84 per unit
Answer:
Unit product cost= $84
Explanation:
Giving the following information:
Units produced 8,700
Direct materials $13
Direct labor $55
Variable manufacturing overhead $1
Fixed manufacturing overhead $130,500
The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.
Unitary fixed overhead= 130,500/8,700= $15
Unit product cost= 13 + 55 + 1 + 15= $84
Required information The Foundational 15 [LO5-1, LO5-3, LO5-4, LO5-5, LO5-6, LO5-7, LO5-8] [The following information applies to the questions displayed below.] Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales $ 20,000 Variable expenses 12,000 Contribution margin 8,000 Fixed expenses 6,000 Net operating income $ 2,000 Foundational 5-11 11. What is the margin of safety in dollars
Answer:
$5,000
Explanation:
Sales $20,000
Variable expenses $12,000
Contribution margin $8,000
Fixed expenses $6,000
Net operating income $2,000
margin of safety in $ = current sales level - break even point
margin of safety in % = (current sales level - break even point) / current sales level
first we need to calculate the contribution margin per unit = $20 - $12 = $8 per unit
break even point = fixed costs / contribution margin = $6,000 / $8 = 750 units
sales level at break even point = 750 x $20 = $15,000
margin of safety in $ = $20,000 - $15,000 = $5,000
margin of safety = ($20,000 - $15,000) / $20,000 = $5,000 / $20,000 = 25%
Levi Corporation (a U.S. company) has several transactions with foreign entities. Each transaction is denominated in the local currency unit of the country in which the foreign entity is located. On December 2, 20X1, Levi sold confectionary items to a foreign company at a price of 50,000 yen when the direct exchange rate was 1 yen = $1.15. The account has not been settled as of the year ended December 31, 20X1, when the exchange rate had changed to 1 yen = $1.12. The foreign exchange gain or loss on Levi's records at year-end for this transaction will be
Answer: $1500 loss
Explanation:
From the question, On December 2, 20X1, Levi sold confectionary items to a foreign company by selling at a price of 50,000 yen when direct exchange rate was 1 yen = $1.15.
Sale value in dollar = 50,000 × 1.15
= $57500
The account has not been settled as of the year ended December 31, 20X1, when exchange rate had changed to 1 yen = $1.12.
Sale value in dollar = 50,000 × 1.12
= $56000
Foreign exchange loss:
= $57500 - $56000
= $1500 loss
Victor Rumsfeld Inc.'s dividend policy is under review by its board. Its projected capital budget is $2,000,000, its target capital structure is 60% debt and 40% equity, and its forecasted net income is $300,000. If the company follows a residual dividend policy, what total dividends, if any, will it pay out? Select the correct answer.
Answer:
The multiple choices are
a. $240,000
b. $228,000
c. $216,600
d.$205,770
e. $0
The correct option is E,$0
Explanation:
The funding required from equity is 40% of the projected capital budget of $2000,000 which is expected to be from the profit attributable to stockholders since new issue of shares is not contemplated.
In other words, dividends payable to shareholders is the net income less their counter funding of the project which is computed below:
residual dividends=net income-(equity%*capital outlay)
residual dividends=$300,000-(40%*$2000,000)
=$300,000-$800,000=$0
In essence the $300,000 is not even enough as funds expected from equity less alone paying excess as dividend
Trucks R' Us has a market capitalization of $142 million, $78 billion in BB rated debt, and $10 billion in cash. If Trucks R' Us' equity beta is 1.68, then their underlying asset beta is closest to:
Answer:
Their underlying asset beta is closest to is 1.08
Explanation:
According to the given data we have the following:
Debt is given as $78 billion
Equity is given as $142 billion
equity beta given as 1.68
Therefore, in order to calculate the underlying asset beta we would have to use the formula of the the equity beta for a levered firm as follows:
betaE =beta A [1 + (Debt / Equity)]
1.68 = \beta A [1 + ($78 B/ $142 B)]
1.68 = \beta A [1 + 0.5493]
betaA = 1.68 / 1.5493
betaA = 1.08
Their underlying asset beta is closest to is 1.08
Lane Company manufactures a single product that requires a great deal of hand labor. Overhead cost is applied on the basis of standard direct labor-hours. Variable manufacturing overhead should be $5.80 per standard direct labor-hour and fixed manufacturing overhead should be $3,087,000 per year.
The company’s product requires 4 pounds of material that has a standard cost of $12.50 per pound and 1.5 hours of direct labor time that has a standard rate of $13.90 per hour.The company planned to operate at a denominator activity level of 315,000 direct labor-hours and to produce 210,000 units of product during the most recent year. Actual activity and costs for the year were as follows:
Number of units produced 252,000
Actual direct labor-hours worked 409,500
Actual variable manufacturing overhead cost incurred $ 1,351,350
Actual fixed manufacturing overhead cost incurred $ 3,276,000
Required:
1. Compute the predetermined overhead rate for the year. Break the rate down into variable and fixed elements.(Round your answers to 2 decimal places.)
Predetermined Overhead Rate = $15.60 per DLH
Variable Rate = $5.80 per DLH
FIxed Rate = $9.80 per DLH
3a. Compute the standard direct labor-hours allowed for the year’s production.
3b. Complete the following Manufacturing Overhead T-account for the year:
4. Determine the reason for the underapplied or overapplied overhead from (3) above by computing the variable overhead rate and efficiency variances and the fixed overhead budget and volume variances.(Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)
Answer:
1. Compute the predetermined overhead rate for the year. Break the rate down into variable and fixed elements.
total standard overhead rate = $15.60standard variable overhead rate = $5.80standard fixed overhead rate = $9.803a. Compute the standard direct labor-hours allowed for the year’s production.
1.5 direct labor hours x 252,000 units = 378,000 hours
3b. Complete the following Manufacturing Overhead T-account for the year:
Manufacturing overhead
Debit Credit
Actual variable cost $1,351,350 Applied variable cost $2,192,400
Actual fixed costs $3,276,000 Applied fixed costs $3,704,400
$1,269,450
Adjustment for over applied
overhead expense $1,269,450
0 0
4. Determine the reason for the underapplied or overapplied overhead from (3)
two different factors affected the overhead costs:
Actual labor hours were higher than budgeted, since 378,000 should have been used to produce the 252,000 units, but 409,500 were used instead. That results in an unfavorable variance of 31,500 labor hours (8.3% variance). Even though labor hour variance was unfavorable, the actual overhead costs incurred were much lower than expected. The favorable variance regarding overhead costs was much larger than the unfavorable variance in labor hours. The actual total overhead per labor hour = $11.30 vs. $15.60 (standard), which represents a 27.6% favorable variance.Explanation:
variable overhead $5.80 per direct labor hour
fixed overhead $3,087,000
each unit requires:
4 pounds of materials at standard cost of $12.50 per pound
1.5 direct labor hours at standard rate of $13.90 per hour
fixed overhead per direct labor hour = $9.80
total budgeted production 210,000 units
total budgeted direct labor hours 315,000
actual units produced 252,000
actual direct labor hours 409,500
actual variable manufacturing $1,351,350
actual fixed manufacturing $3,276,000
applied variable cost = $5.80 x 378,000 labor hours = $2,192,400
applied fixed costs = $9.80 x 378,000 labor hours = $3,704,400
Assume you are the president of Nuclear Company. At the end of the first year of operations (December 31), the following financial data for the company are available: Accounts Payable$33,000 Accounts Receivable 59,950 Cash 13,500 Common Stock 63,030 Dividends 230 Equipment 32,000 Notes Payable 1,500 Operating Expenses 61,700 Other Expenses 9,000 Sales Revenue 87,300 Supplies 8,450 Prepare a statement of retained earnings for the year ended December 31.
Answer:
Ending retained earnings is $ 16,370.00
Explanation:
Before preparing the statement of retained earnings for the year ended December 31, the net income for the current year needs to be ascertained.
net income=sales revenue-operating expenses-other expenses
net income=$87,300-$61,700-$9000=$ 16,600.00
Statement of Retained earnings for the year ended 31 December:
Beginning retained earnings $0
net income $16,600
dividends ($230)
ending retained earnings $ 16,370.00
Asset management ratios are used to measure how effectively a firm manages its assets, by relating the amount a firm has invested in a particular type of asset (or group of assets) to the amount of revenues the asset is generating. Examples of asset management ratios include the average collection period (also called the days sales outstanding ratio), the inventory turnover ratio, the fixed asset turnover ratio, and the total asset turnover ratio.
Consider the following case:
Walker Telecommunications has a quick ratio of 2.00x, $35,550 in cash, $19,750 in accounts receivable, some inventory, total current assets of $79,000, and total current liabilities of $27,650. The company reported annual sales of $200,000 in the most recent annual report.
Over the past year, how often did Walker Telecommunications sell and replace its inventory?
a. 8.01 x
b. 5.24 x
c. 2.85 x
d. 4.75x
Answer:
Option A 8.01x is the closest answer
Explanation:
Quick ratio =current assets-inventory/current liabilities
let x represent the value of inventory
quick ratio is 2.00
current assets is $79,000
current liabilities is $27,650
2.00=$79,000-x/$27650
2.00*$27,650=$79,000-x
$55,300=$79,000-x
x=$79,000-$55,300
x= $23,700.00
Inventory turnover =sales/inventory
sales is $200,000
Inventory value is $23,700
inventory turnover ratio=$200,000/$23,700=8.44
The closest option is A,
Rough Stuff makes 2 products: khaki shorts and khaki pants for men. Each product passes through the cutting machine area, which is the chief constraint during production. Khaki shorts take 15 minutes on the cutting machine and have a contribution margin per pair of shorts of $16. Khaki pants take 24 minutes on the cutting machine and have a contribution margin per pair of pants of $32. If it is assumed that Rough Stuff has 4,800 hours available on the cutting machine to service a minimum demand for each product of 3,000 units, how much will profits increase if 100 more hours of machine time can be obtained?
Answer:
$8,000
Explanation:
khaki shorts khaki pants
machine minutes per unit 15 24
contribution margin per unit $16 $32
CM per machine minute $1.067 $1.33
minimum demand 3,000 3,000
machine minutes required 45,000 72,000
total machine minutes available 288,000
total machine minutes remaining 171,000
production 0 7,125
total production 3,000 10,125
total contribution margin $48,000 $324,000
if 100 more machines hours are added, then production time increases by 6,000 minutes which can be used to produce 250 more khaki pants. Contribution margin will increase by 250 x $32 = $8,000
I calculated contribution margin per minute, but you could also calculate contribution margin per hour to determine which product is more profitable. Contribution margin per hour for shorts = $64, and for pants = $80. The answer will not change.
Miller Company's most recent contribution format income statement is shown below:sales (20,000 units)............300,000 15.00Variable expenses.............180,000 9.00CM ..............................120,000 6.00Fixed expense................. 70,000Net operating income......... 50,000Required:Prepare a new contribution format income statement under each of the following conditions (consider each case independently):1. The number of units sold increases by 15%.2. The selling price decreases by $1.50 per unit, and the number of units sold increases by 25%.3. The selling price increases by $1.50 per unit, fixed expenses increase by $20,000, and the number of units sold decreases by 5%.4. The selling price increases by 12%, variable expenses increase by 60 cents per unit, and the number of units sold decreases by 10%.
Answer:
Miller Company
New contribution format income statement under each of the following conditions (consider each case independently):
1. The number of units sold increases by 15%.
Sales (23,000 units) $345,000 ( unit price $15.00)
Variable expenses $207,000 ( unit cost $9.00)
Contribution Margin $138,000 ( unit $6.00)
Fixed expense $70,000
Net operating income $68,000
2. The selling price decreases by $1.50 per unit, and the number of units sold increases by 25%.
Sales (25,000 units) $337,500 ( unit price $13.50)
Variable expenses $225,000 ( unit cost $9.00)
Contribution Margin $112,500 ( unit $4.50)
Fixed expense $70,000
Net operating income $42,500
3. The selling price increases by $1.50 per unit, fixed expenses increase by $20,000, and the number of units sold decreases by 5%.
Sales (19,000 units) $313,500 ( unit price $16.50)
Variable expenses $171,000 ( unit cost $9.00)
Contribution Margin $142,500 ( unit $7.50)
Fixed expense $90,000 ($70,000 + 20,000)
Net operating income $52,500
4. The selling price increases by 12%, variable expenses increase by 60 cents per unit, and the number of units sold decreases by 10%.
Sales (18,000 units) $302,400 ( unit price $16.80)
Variable expenses $172,800 ( unit cost $9.60)
Contribution Margin $129,600 ( unit $7.20)
Fixed expense $70,000
Net operating income $59,600
Explanation:
a) Contribution Format Income Statement as per question:
Sales (20,000 units) $300,000 ( unit price 15.00)
Variable expenses $180,000 ( unit cost 9.00)
Contribution Margin $120,000 ( unit 6.00)
Fixed expense $70,000
Net operating income $50,000
b) The contribution format income statement can be prepared under different scenarios to account for different events as in the above. They are estimates of future occurrences under scenario planning and analysis which can help management to make informed decisions, knowing the outcome of each situation.
Complex companies adopt decentralization in order to realize all of the following benefits, except:________.
1. delegation of control to lower levels of management, thus facilitating their training and development
improved awareness of, and response to, local conditions
2. reduced record-keeping
3. shorter elapsed time from problem identification to decision-making and implementation
4. no exceptions above
Answer:
2. reduced record-keeping
Explanation:
The decentralization is the chain of the processes in which the proper process of all department is followed
Just like from top-level to middle level and then lower level
And, the inverse is lower level to middle level to top level.
The authority and responsibility are delegated to each level of management so that the day to day operations could be performed in a smooth, effective and efficient manner
For the complex companies who adopt decentralization, they have all the benefits like delegation, problem identification but do not reduce record keeping as it is not an easy task for every company
Hence, option 2 is correct