Answer:
1. Payment for equipment purchase = investing activities (I)
2. Repayments of bank loan = financing activities (F)
3. Dividends paid = financing activities (F)
4. Proceeds from issuance of stock = financing activities (F)
5. Interest paid = operating activities (O)
6. Receipts from customers = operating activities (O)
Explanation:
Operating Activities are activities that generate cash in the ordinary course of business.
Investing Activities are activities that generate cash due to movement in capital expenditure balances
Financing Activities are activities that generate cash due to sourcing of funds or changes in ownership.
Mr. Hobbes Bed & Breakfast is considering the replacement of some old equipment. The new equipment will cost $86,000 including delivery and installation. The old equipment to be replaced has a book value of $60,200 and can be sold pre-tax for $61,200. If the firm’s effective tax rate is 25%, compute the net investment.
Answer:
$25,550
Explanation:
For computing the net investment first we have to find out the loss or gain on sale of old equipment which is shown below:
Sale value = $61,200
Less: Book value of old equipment = $60,200
Gain = $1000
Now
Tax on gain is
= $1,000 × 25%
= $250
So, the net gain is
= $1,000 - $250
= $750
Now the net investment is
= Cost of new equipment - sale value pre tax + net gain
= $86,000 - $61,200 + $750
= $25,550
Answer:
Net Investment = $25,550
Explanation:
Given:
Sale value (old equipment) = $61,200
Book value of old equipment = $60,200
New equipment cost = $86,000
Effective tax rate = 25%
Computation
Gain on sale = $61,200 - $60,200
Gain on sale = $1,000
Amount of tax on gain = $1000 × 25%
Amount of tax on gain = $250
Net Gain = Gain on sale - Amount of tax on gain
Net Gain = $750
Net Investment = Cost of new equipment - (Sale value - Net Gain)
Net Investment = $86,200 - (61,200 - 750)
Net Investment = $25,550
A company has invested $60,000 in machinery with a 5-year useful life. The machinery will have no salvage value, as the cost to remove it will equal its scrap value. The annual benefits from the machinery are $15,000. The firm has a tax rate of 45% and will use the sum-of-years.. digits depreciation, compute the after-tax rate of return. The company uses a MARR of 7%.
Answer:
19.7%
Explanation:
initial cost $60,000
depreciation expense:
5 + 4 + 3 + 2 + 1 = 15
Year 1: 5/15 = 33% = $19,800
Year 2: 4/15 = 27% = $16,200
Year 3: 3/15 = 20% = $12,000
Year 4: 2/15 = 13% = $7,800
Year 5: 1/15 = 7% = $4,200
yearly benefits:
Year 1 = ($15,000 - $19,800) x 45% tax credit = $2,160 deferred tax benefit
Year 2 = ($15,000 - $16,200) x 45% tax credit = $540 deferred tax benefit
Year 3 = $15,000 - $12,000 = $3,000 ⇒ $1,350 in taxes are offset by the previous deferred tax benefits x 45% tax = $2,160 - $1,350 = $810 remaining tax benefits
Year 4 = $15,000 - $7,800 = $7,200 - $3,240 in taxes + $810 in deferred tax benefits = $4,770
Year 5 = ($15,000 - $4,200) x (1 - 45%) = $5,940
this investment yields 3 positive benefits during years 3-5, if we discount them to find the present value = $3,000/1.07 + $4,770/1.07² + $5,940/1.07³ = $2,803.74 + $4,166.30 + $4,848.81 = $11,818.85
after-tax rate of return = $11,818.85 / $60,000 = 19.7%
Felix and Freddie are married with annual taxable income of $230,000. They pay income tax according to the following schedule: Over-----But Not Over-----Tax Rate $0............$43,850..............15% $43,850.....$105,950.............??? $105,950....$361,450............31% If the total personal income tax they pay is $58,074, which of the following comes closest to the tax rate for income between $43,850 and 105,950 (the middle tax rate)?
a. 21%
b. 24%
c. 25%
d. 225
e. 23%
Answer:
a. 21%
Explanation:
Felix and Freddie
Tax paid for first will be :
$43,850 ×15%
=$6,577.5
Taxable income $124,050
($230,000-$105,950)
Taxable payable $38,455.5
($124,050*31%)
Remaining tax payable $13,041
($58,074-$6,577.5-$38,455.5)
÷
Remaining taxable income $62,100
($105,950-$43,850)
Tax rate between $43,850 and 105,950 will be:
$13,041÷$62,100
=0.21×100
=21%
Software Distributors reports net income of $48,000. Included in that number is depreciation expense of $6,500 and a loss on the sale of land of $4,300. A comparison of this year's and last year's balance sheets reveals a decrease in accounts receivable of $18,000, a decrease in inventory of $11,500, and an increase in accounts payable of $38,000.
Required:Prepare the operating activities section of the statement of cash flows using the indirect method.
Answer:
Net cash from operating activities is $126,300.
Explanation:
Statement of cash flows
(Operating activities section only)
Details $
Net income 48,000
Adjustment to reconcile net income:
Depreciation expense 6,500
Loss on the sale of land 4,300
(Increase) decrease in current assets:
Decrease in accounts receivable 18,000
Decrease in inventory 11,500
Increase (decrease) in current liabilities:
Increase in accounts payable 38,000
Net cash from operating activities 126,300
Economist A says all of the following: The economy needs expansionary fiscal policy to remove it from a recessionary gap. Government should either raise its _____________ or cut ___________________. I believe the government spending multiplier is ____________ than the tax multiplier, so I favor _____________________.
Answer:
The correct answer is:
Government should either raise its expenditures or cut taxes. I believe the government spending multiplier is greater than the tax multiplier, so I favor this policy.
Explanation:
To begin with, an "expansionary fiscal policy" represents the tool that a government has in order to give response to a recessionary context in where the economy is falling down by decreasing its production. That is why, that in this type of policy the actions that are to be taken comprehends the reduction of taxes that the public sector collects from the private sector and also to increase the public expenditures that the government has with the purpose to estimulate the demand and offer of goods.
Brief Exercise 233 Kinney Company purchased a truck for $66,000. The company expected the truck to last four years or 100,000 miles, with an estimated residual value of $8,000 at the end of that time. During the second year the truck was driven 27,000 miles. Compute the depreciation for the second year under each of the methods below and place your answers in the blanks provided.Units-of-activity $_________
Double-declining-balance $_________
Answer:
$15,660
$16,500
Explanation:
Depreciation expense using the double declining method = Depreciation factor x cost of the asset
Depreciation factor = 2 x (1 / useful life)
2 x (1 / 4 ) = 0.5
The depreciation expense in the first year = 0.5 x $66,000 = $33,000
Book value = $66,000 - $33,000 = $33,000
The depreciation expense in the second year = 0.5 x $33,000 = $16,500
The Units of production method = (miles driven in the second year / estimated total miles that can be driven) x (Cost of asset - Salvage value)
(27,000 / 100,000) × ($66,000 - $8,000)
= 0.27 x $58,000 = $15,660
I hope my answer helps you
Felinas Inc. produces floor mats for cars and trucks. The owner, Kenneth Felinas, asked you to assist him in estimating his maintenance costs. Together, Mr. Felinas and you determined that the single best cost driver for maintenance costs was machine hours. Below are data from the previous fiscal year for maintenance expense and machine hours:
Month Maintenance Expense Machine Hours
1 $ 3,480 2,380
2 3,670 2,480
3 3,850 2,580
4 3,980 2,610
5 3,980 2,460
6 4,400 2,620
7 3,970 2,600
8 3,780 2,570
9 3,500 2,390
10 3,120 2,260
11 2,960 1,650
12 3,240 2,250
Using the high-low method, total monthly fixed cost is calculated to be:__________
a. $296.
b. $224.
c. $460.
d. $162.
e. $552.
Answer:
Fixed costs= 510
Explanation:
Giving the following information:
Month Maintenance Expense Machine Hours
1 $ 3,480 2,380
2 3,670 2,480
3 3,850 2,580
4 3,980 2,610
5 3,980 2,460
6 4,400 2,620
7 3,970 2,600
8 3,780 2,570
9 3,500 2,390
10 3,120 2,260
11 2,960 1,650
12 3,240 2,250
To calculate the fixed costs, we need to use the following formulas:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (4,400 - 2,960) / (2,620 - 1,650)
Variable cost per unit= $1.484536
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 4,400 - (1.484536*2,620)
Fixed costs= $510
Fixed costs= LAC - (Variable cost per unit* LAU)
Fixed costs= 2,960 - (1.484536*1,650)
Fixed costs= 510
A series of five constant-dollar (or real-dollar) uniform payment of $897.63 is made begining at the end of first year. Assume that the general inflation rate is 18.3% and the market interest rate is 18.3% during this inflationary period.
The equivalent present worth of the series is:_________.
Answer:
The equivalent present worth of the series is $4,182.21
Explanation:
Fix periodic payments for a specific period of time are annuity payment and the payments made at the start of each period is known as advance annuity.
As per given data
Inflation per year = 18.3% / 5 = 3.66%
numbers of period = 5 years
Payment per period = $897.63
Use following formula to calculate the present value of annuity payments
PV of annuity = P x ( 1 - ( 1 + r )^-n / r
Where
P = Payment per period = $897.63
r = rate in of interest = 3.66%
n = numbers of periods = 5 years
Placing values in the formula
Equivalent present worth of the series = $897.63 + $897.63 x ( 1 - ( 1 + 3.66% )^-(5-1) / 3.66% )
Equivalent present worth of the series = $4,182.21
Harry agreed to pay $100 to rent a rooftop spot in Seattle to watch the New Year's Eve festivities. The festivities were canceled at the last minute due to many of the guests' concern over news of a potential terrorist attack in a different section of the city. Harry is likely:
Answer:
Not obligated to pay under the frustration of purpose doctrine
Explanation:
In this specific scenario, Harry is likely Not obligated to pay under the frustration of purpose doctrine. This doctrine states that an individual does not need to abide by his/her contractual duties if a later unforeseen event impedes the buyer's initial purpose for entering into the contract, if and only if the seller knew of the buyer's purpose at the time of entering the contract. Therefore since Harry entered into the agreement for the sole reason of watching the New Year's Eve festivities and it was cancelled due to an unforeseen event (terrorist threat) he does not have to pay.
If an individual's utility function for coffee (x) and cream (y) is given by , the demand function for coffee is given by:__________.
Incomplete question. Options provided in
Answer:
c.
Explanation:
Note that after performing necessary calculation we arrived at the conclusion where X = I/(PX + 0.2PY) where PX= demand and PY= expenditures.
You are an owner of a bakery, and you meet with other neighborhood bakery owners. In an attempt to increase sales, you collectively decide to lower prices by 10%. Which of the following are consequences of this price change?
A. The supply of fresh baked goods will decrease.
B. The quantity supplied of fresh baked goods will decrease.
C. Demand for processed baked goods will decrease.
D. The supply of fresh baked goods will increase.
E. The demand for fresh baked goods will not change.
F. The demand for fresh baked goods will increase.
Answer:
The quantity supplied of fresh baked goods will decrease ( B )
Demand for processed baked goods will decrease. ( C )
The demand for fresh baked goods will not change ( E )
Explanation:
When the neighbourhood bakery owners agree to lower prices of goods by 10% it will not have any effect on the demand for fresh baked goods hence the demand for fresh baked goods will not change because the demand for fresh baked goods have an in-elastic curve
Also since there is s drop in price the quantity supplied by the suppliers will decrease. while The demand for processed baked goods will decrease because of the substitute it has in fresh baked goods that just got its price slashed by 10%
FOR BUS LAW I
Certain that Al Gore would emerge victorious from the post-election chaos, Melvin's Decorations ordered 50,000 "President Al Gore" medallions from Medallions, Inc. on December 1, 2000 for $5 per medallion. Delivery was to be on January 10, 2001. By that date, the value of the medallions had fallen to $1 per medallion. Melvin's Decorations refused to accept the medallions because it was clear that George Bush would keep the presidency, and Medallions, Inc. sued for Melvin’s breach. What can Medallions recover? (Assume that there was nothing wrong with the medallions and that Melvin's did breach the contract).
A.
Medallions' lost profit on the deal.
B.
The difference between the contract price and the market price.
C.
Either A or B.
D.
Neither A nor B.
Answer:
A. Medallions' lost profit on the deal.
Explanation:
Since Melvin's Decorations breached the contract they had with Medallions, the non breaching party is entitled to sue for compensatory monetary damages. Courts will generally assign compensatory damages that cover the losses incurred due to the contract breach, i.e. the amount of money that medallion would have made as a profit if Melvin's decoration had purchased and paid for the medallions.
g edna had an accident while competing in a rodeo. She sustained facial injuries that required cosmetic surgery. While having the surgery done to restore her appearance, she had additional surgery done to reshape her chin, which was not injured in the accident. The surgery to restore her appearance cost $ 9,000 and the surgery to reshape her chin cost $ 6,000. How much of Edna's surgical fees will qualify as a deductible medical expense (before application of the 10% -of-AGI floor)?
Answer:
$9000 is a deductible medical expense.
Explanation:
Cosmetics surgery is necessary and deductible if the reason it was done was to enhance her appearance arising from a form or kind of abnormality, personal injury or a disease that disfigures.The $9000 cost that was paid because of the surgery due to the accident is deductible because the surgery was necessary while the $6000 paid for the unnecessary cosmetic surgery to reshapen the chin is not a deductible medical expense.
A company is considering two projects. Project A Project B Initial investment $300,000 $300,000 Cash inflow Year 1 $60,000 $90,000 Cash inflow Year 2 $60,000 $80,000 Cash inflow Year 3 $60,000 $80,000 Cash inflow Year 4 $60,000 $50,000 Cash inflow Year 5 $60,000 $70,000 What is the payback period for Project B
Answer:
Payback Period = 3 years
Explanation:
Years Cash flow(Out flow) Net cash flow Cumulative cash flow
0 -300,000 - -300,000
1 90,000 90,000 -210,000
2 80,000 80,000 -130,000
3 80,000 80,000 -50,000
4 50,000 50,000 0
5 70,000 70,000 70,000
Payback Period = 3 years
It means it will take 3 years of period to payback the project B Initial investment of $300,000
Juan acquires a new 5-year class asset on March 14, 2018, for $200,000. This is the only asset Juan acquired during the year. He does not elect immediate expensing under § 179. He does not claim any available additional first-year depreciation. On July 15, 2019, Juan sells the asset.
a. Determine Juan’s cost recovery for 2017.
b. Determine Juan’s cost recovery for 2018.
Answer:
A. $40,000
B$32,000
Explanation:
Cost Recovery can be defined as the way in which a business or an organisation is said to record the revenue in which they earns from
the transaction carried out at the time that their client has paid the invoice given to him or her in the cost of the transaction.
Asset acquired =$200,000
Tax rate =20%
Hence:
$200,000×0.2
= $40,000
B.
Asset acquired = $200,000
Tax rate =32%
Hence:
$200,000×0.32
= $32,000
On June 30, 2011, Cole Inc., exchanged 3,000 shares of Stone Corp. $30 par value common stock for a patent owned by Gore Co. The Stone stock was acquired in 2009 at a cost of $80,000. At the exchange date, Stone common stock had a fair value of $45 per share, and the patent had a net carrying value of $160,000 on Gore's books. Cole should record the patent at:
Answer:
$135000
Explanation:
Cole should record the patent at $135000. The intangible asset is recorded at the price at which it was purchased. Net carrying value of $160000 in the books of seller is not useful.
At the time of purchase of intangible asset, the fair value of stone stock exchanged was $45.
So the patent cost is =
3000 shares × $45 per share = $135000.
Cole should record the patent at this value.
Swifty Company sells 10% bonds having a maturity value of $2,000,000 for $1,855,816. The bonds are dated January 1, 2017, and mature January 1, 2022. Interest is payable annually on January 1.
Instructions:
Set up a schedule of interest expense and discount amortization under the straight-line method.
Set up a schedule of interest expense and discount amortization under the effective-interest method. (Hint: The effective-interest rate must be computed.)
Answer:
Find attached amortization schedule for the interest expense and discount amortization under both methods.
Explanation:
Under straight line the discount amortization per year is total discount on bonds payable divided by 5 years.
Under effective method, I first of all computed the yield to maturity on the bind using rate formula in excel, the discount amortization each is the interest expense minus the coupon payment.
Elegant Limited sells restored classic cars. Most of its customers are private buyers who buy cars for
themselves. However, some of them are investors who buy multiple cars and hold them for resale. All
sales of Elegant Limited are for cash.
Depict the association and cardinality for the sales of cars at Elegant Limited based on REA mode
Answer:
Elegant Limited
a) Association for the sales of cars based on the REA model:
The association indicates the relationships that exist between economic agents in the sales of cars. The relationships are between the seller (Elegant Limited) and the buyers or customers (private buyers and investors). The association based on the REA model is that each economic agent exchanges some economic resources during an economic event. Elegant Limited will give cars to customers in exchange for cash or initially and in some cases, a promise to pay cash later. This is an economic event. When the customer pays, another economic event takes place, and resources are also exchanged.
b) Cardinality of the sales of cars: The cardinality defines the elements involved in the sales of cars based on the REA model. The elements are the economic resources (cars and cash), the economic events or business transactions that take place (sales of cars and payment of cash), and the economic agents (Elegant Limited and customers) who make the events and the exchange of resources to happen.
Explanation:
The REA model is a framework for defining business processes. It was originally proposed in 1982 by William E. McCarthy as a generalized accounting model, and contained the concepts of resources, events, and agents. It proposed to replace accounting objects like assets and liabilities with real-life objects, including:
1) goods, services or money, or resources
2) business transactions or agreements that affect resources, events
3) people or other human agencies (other companies, etc.), agents.
In each of the following cases, what is the effect on the short-run aggregate supply (SRAS) curve? An increase in firm costs A. does not shift the SRAS curve. B. shifts the SRAS curve upward. C. shifts the SRAS curve downward. An increase in the money supply A. does not shift the SRAS curve. B. shifts the SRAS curve downward. C. shifts the SRAS curve upward. An increase in consumption A. shifts the SRAS curve upward. B. does not shift the SRAS curve. C. shifts the SRAS curve downward.
Answer: 1. B. shifts the SRAS curve upward.
2. A. does not shift the SRAS curve.
3. B. does not shift the SRAS curve.
Explanation:
1. When Firm costs rise, the input cost for Producers rises and they respond by reducing production so as to reduce the cost of production. This reduction causes a reduction in Supply that forces the short-run aggregate supply (SRAS) curve to shift left (upward).
2. This change in the Money Supply means that there will be more money for households to spend. This increases demand but does not have any direct influence on the short-run aggregate supply (SRAS) curve.
3. An Increase in consumption means that there is greater demand for goods and services in an Economy. Indirectly this will cause producers to ramp up production to meet these needs but directly, there is no influence on the short-run aggregate supply (SRAS) curve.
A 5-year corporate bond yields 10.70%. A 5-year municipal bond of equal risk yields 6.50%. Assume that the state tax rate is zero. At what federal tax rate are you indifferent between the two bonds? (Round your final answer to two decimal places.)
Answer:
The multiple choices are as follows:
a.
25.40%
b.
29.03%
c.
39.25%
d.
33.98%
e.
27.38%
The correct option is C,39.25% federal tax rate
Explanation:
In determining the federal tax that one would be indifferent in choosing between the two bonds, we equate the yield of the two bonds as follows with tax element being deducted from corporate bond yield:
6.50%=10.70%*(1-t)
The t is the tax rate which is the unknown
divide both sides by 10.70%
6.50%/10.70%=1-t
0.607476636 =1-t
t=1-0.607476636
t=0.392523364 =39.25%
Presented below is information related to Oriole Corp. for the year 2020.
Net sales $1,534,000 Write-off of inventory due to obsolescence $94,400
Cost of goods sold 920,400 Depreciation expense omitted by accident in 2019 64,900
Selling expenses 76,700 Casualty loss 59,000
Administrative expenses 56,640 Cash dividends declared 53,100
Dividend revenue 23,600 Retained earnings at December 31, 2019 1,156,400
Interest revenue 8,260 Effective tax rate of 20% on all items
Prepare a multiple-step income statement for 2020. Assume that 62,370 shares of common stock are outstanding.
Answer:
Oriole Corp.
Income Statement
For the Year Ended December 31, 2020
Total sales $1,534,000
Cost of goods sold ($920,400)
Loss from inventory write off ($94,400)
Gross margin $519,200
Operating expenses:
Administrative expenses $56,640
Selling expenses $76,700
Total operating expenses ($133,340)
Income from operations $385,860
Other revenues and gains
Dividend revenue $23,600
Interest revenue $8,260
Total other revenues and gains $31,860
Other expenses and losses
Depreciation expense 2019 $64,900
Casualty loss $59,000
Total other expenses and losses ($123,900)
Net income before taxes $293,820
Income taxes 20%* ($58,764)
Net income $235,056
*Generally dividend revenue is not taxed or only 30% of it sis taxed. Since we were told to apply 20% income tax to all items, I didn't calculate it separately. But if you calculate it separately, then income taxes would be $1,156 lower (total $57,608) and net profit would be higher (total $236,212).
Degregorio Corporation makes a product that uses a material with the following direct material standards:
Standard quantity 3.7 kilos per unit
Standard price $5 per kilo
The company produced 6,300 units in November using 23,780 kilos of the material. During the month, the company purchased 25,950 kilos of the direct material at a total cost of $124,560. The direct materials purchases variance is computed when the materials are purchased.
The materials quantity variance for November is:
A. $2,350 F
B. $2,256 F
C. $2,350 U
D. $2,256 U
Answer:
Materials quantity variance = $2,350 F
Explanation:
Given:
Standard quantity = 3.7 kilos per unit
Standard price = $5 per kilo
Unit produced = 6,300
Total material = 23,780
Computation:
Materials quantity variance = (Actual quantity × Standard price) - (Standard quantity × Standard price)
Materials quantity variance = (23,780 × $) - (6,300 × 3.7 × $5)
Materials quantity variance = $118,900 - $116,550
Materials quantity variance = $2,350 F
A toy manufacturer has just learned that the small, button nose on the stuffed teddy bear it produces might detach and become a choking hazard young children. If this company is using a defensive strategy, it might:___________.
a) recall the stuffed bears, offer a refund to all customers, and redesign the bear to have a felt nose.
b) issue a statement apologizing for the choking hazard and recall the stuffed bears.
c) daim that if parents put the bear in the washing machine, the button stitching will come loose, causing it to detach. As a result, parents should not put the bear in the washing machine.
d) create a set of industry-wide guidelines to help prevent choking hazards on toys for children. It pay to be socially responsible
Answer:
The correct answer option is B
Explanation:
The company would issue a statement apologizing for the choking hazard and recall the stuffed bears.
A defense strategy is one in which the toy manufacturing company accepts responsibility for a problem, even though they would do the least required to meet societal expectations.
The toy manufacturer might issue a statement apologizing for the choking hazard and recall the stuffed bears. In this case the company has accepted responsibility and done the least required to meet societal expectations.
Use exponential smoothing with trend adjustment to forecast deliveries for period 10. Let alpha = 0.4, beta = 0.2, and let the initial trend value be 4 and the initial forecast be 200.
Period- Actual Demand
1- 200
2- 212
3- 214
4- 222
5- 236
6- 221
7- 240
8- 244
9- 250
10- 266
Answer:
254.02
Explanation:
Relevant data provided
Forecast delivers for period 10
Alpha = 0.4
Beta = 0.2
Trend value = 4
Initial forecast = 200
For period 10 please look into the spreadsheet which has been attached which contains formulas and values.
Forecast including trends
The smoothed forecast is calculated below:
[tex]F_{t}=\alpha A_{t-1}+(1-\alpha )(F_{t-1}+T_{t-1})[/tex]
Smoothed trend formula is shown below:
[tex]T_{t}=\beta (F_{t}-F_{t-1})+(1-\beta )T_{t-1}[/tex]
Forecast including trend formula is calculated with the help of below formula:-
[tex]FIT_{t}= F_{t}+T_{t}[/tex]
5. Which of the following is an example of global economies of scale? a. Johnson & Johnson makes fourteen different varieties of Band-Aid for various product segments in different countries. b. Intel has a big plant in Kiryat Gat (Israel) making i7 chips, which supplies the whole world, reducing the per-unit cost of each chip. c. Mutual funds invest their stocks in several different country funds, to offset the risk of one currency failing suddenly. d. Wal-Mart sells certain products very economically in some countries (like mobile AC units in Mexico), in order to attract customers, while other products may be at par with, or even more expensive than US prices..
Answer:
b. Intel has a big plant in Kiryat Gat (Israel) making i7 chips, which supplies the whole world, reducing the per-unit cost of each chip
Explanation:
Economies of scale is cost reduction as a result of the large scale do production. As production increases, cost falls.
Because of the large scale of production of itel, cost of shopping is falling. This is an example of economies of scale.
I hope my answer helps you
Sparky Corporation uses the FIFO method of process costing. The following information is available for February in its Molding Department: Units: Beginning Inventory: 34,000 units, 100% complete as to materials and 55% complete as to conversion. Units started and completed: 119,000. Units completed and transferred out: 153,000. Ending Inventory: 34,500 units, 100% complete as to materials and 35% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: $52,000. Costs in beginning Work in Process - Conversion: $57,850. Costs incurred in February - Direct Materials: $349,625. Costs incurred in February - Conversion: $608,150. Calculate the cost per equivalent unit of materials.
Answer:
The cost per equivalent unit of materials is $2.28
Explanation:
The Concept of Equivalent units measures the number of units complete to the extent of the input elements added during production.
The FIFO method in Process costing Accounts for Costs only incurred during the Manufacturing Period. Also, The Opening Work In Process is Assumed to be completed first.
The First Step is to Calculate the Total Equivalent Units of Production for Raw Materials :
To finish Opening Work In Process (34,000 × 0%) = 0
Started and Completed ((153,000 - 34,000) × 100% ) = 119,000
Closing Work In Process (34,500 × 100%) = 34,500
Total Equivalent Units of Production = 153,500
The Next and Final Step is to calculate the cost per equivalent unit of materials.
Cost per equivalent unit = Total Cost During the Current Period / Total Equivalent Units of Production
= $349,625 / 153,500
= $2.2776872
= $2.28 (2 decimal places)
Conclusion :
The cost per equivalent unit of materials is $2.28
Which of the following is a disadvantage of growth by means of external growth strategies? Group of answer choices Diversification of business risk Economies of scale Getting access to proprietary products or services Reducing competition Loss of organizational flexibility
Answer:
- Loss of organizational flexibility
- Diversification of business
Explanation:
Remember, External growth strategies unlike the Internal growth strategies involves using external assistance to grow the organization, such as merging or acquiring other companies, franchising or forming joint ventures.
In such a case, organisational flexibility could be lost since the organization becomes more complex as a result of bringing in more people into the organization. Also, another disadvantage is that with a restructured management team, the business may experience unexpected diversification into other products as in the case of joint ventures.
What are the challenges planner and mangers do not face in decision making?
Answer:
Management has its share of perks and rewards. Managers are usually in a better position to influence and lead change. In most organizations, being a manager means a better compensation package and not having to sit in a cubicle. Most importantly, there’s nothing like the satisfaction of helping an individual or team reach their goals and perform at their best. Read more
Explanation:
Ben has two options this weekend. He could work at his job and earn $8 per hour for three hours, or he could go to an exhibit at the art museum for that three hours. A ticket for the event costs $30. What is the opportunity cost of the event?
Answer:
Opportunity cost= -$54
Explanation:
Giving the following information:
He could work at his job and earn $8 per hour for three hours, or he could go to an exhibit at the art museum for those three hours. A ticket for the event costs $30.
The opportunity cost is the "cost" of not taking other alternatives.
Opportunity cost= total revenue - economic profit
Opportunity cost= -30 - 24= -$54
he credit union will have $1.6 million available for investment during the coming year. State laws and credit union policies impose the following restrictions on the composition of the loans and investments. Risk-free securities may not exceed 30% of the total funds available for investment. Signature loans may not exceed 10% of the funds invested in all loans (automobile, furniture, other secured, and signature loans). Furniture loans plus other secured loans may not exceed the automobile loans. Other secured loans plus signature loans may not exceed the funds invested in risk-free securities. How should the $1.6 million be allocated to each of the loan/investment alternatives to maximize total annual return
Here is the full question.
The employee credit union at State University is planning the allocation of funds for the coming year. The credit union makes four types of loans to its members. In addition, the credit union invests in risk-free securities to stabilize income. The various revenue producing investments together with annual rates of return are as follows:
Type of Loan/Investment Annual Rate of Return (%)
Automobile loans 8
Furniture loans 10
Other secured loans 11
Signature loans 12
Risk-free securities 9
The credit union will have $1.6 million available for investment during the coming year. State laws and credit union policies impose the following restrictions on the composition of the loans and investments.
Risk-free securities may not exceed 30% of the total funds available for investment.
Signature loans may not exceed 10% of the funds invested in all loans (automobile, furniture, other secured, and signature loans).
Furniture loans plus other secured loans may not exceed the automobile loans.
Other secured loans plus signature loans may not exceed the funds invested in risk-free securities.
How should the $1.6 million be allocated to each of the loan/investment alternatives to maximize total annual return? Round your answers to the nearest dollar.
Automobile Loans $
Furniture Loans $
Other Secured Loans $
Signature Loans $
Risk Free Loans $
What is the projected total annual return? Round your answer to the nearest dollar.
$
Answer:
Explanation:
Let the amount invested in:
Automobile loans be Xa,
Furniture Loans be Xf,
Other Secured Loans be Xo,
Signature loans be Xs, &;
Risk-free loans be Xr
In reference on the Annual returns rate given;
Total annual returns = 8%×Xa + 10%×Xf + 11%×Xo + 12%×Xs + 9%×Xr
The various constraints given can be written as follows:
Xa + Xf + Xo + Xs + Xr = 1,600,000-----Constraint for amount available for investment
Xr = 30%*1,600,000 ----- Constraint for maximum risk free investment
Xs = 10%*(Xa + Xf + Xo + Xs) ----- Constraint for maximum amount in signature loans
Xf + Xo = Xa ------- Constraint for Furniture and other secured loans
Xo + Xs = Xr ------ Constraint for other secured loans and signature loans
Using the Excel Formula for solving this;
we have the following result.
Automobile Loans $ 504,000
Furniture Loans $ 136,000
Other Secured Loans $ 368,000
Signature Loans $ 112,000
Risk-Free Loans $ 480,000
The projected total annual return = $ 151,040
The computation of the excel formula on how we arrived at those valid figures above is shown in the attached files below.
Thanks!