Answer:
E. Performance Test
Explanation:
Based on the scenario being described in the question it can be said that this is an example of a performance test. These are simply tests in which an individual is observed performing the tasks/actions that are required of them. Their performance is evaluated based on a predefined guideline in order to rate their efficiency. Which is what the interviewer is doing to the candidates in order to find the best individual to hire as a teacher.
Using the table below, select "X" in the column that corresponds to the type of activity level referred to in each scenario.
Unit Batch Product Customer Organizational
A. Setting up a machine for a production run of 500 units.
B. Conducting a seminar for local doctors on the benefits of a new drug.
C. Embossing a company logo on every product made.
D. Seating a party of 11 at a restaurant.
E. Providing technical support for two years following a sale.
F. Managing a corporation's accounting department.
G. Attaching a price tag to each product.
H. Issuing an invoice.
I. Developing a corporate advertising campaign.
J. Recalling a defective product.
Answer: Please refer to Explanation
Explanation:
The question seeks to find out the activity level of the above mentioned activities.
There are various activities in an organization and as such they need to be categorized. The various categories include Unit, Batch, Product, Customer, and Organizational.
Unit Activities refer to activities done on a unit level. A singular product level. They include things like putting a logo on a bottle or deriving a single person at a restaurant.
Batch Activities refer to activities done when Units are grouped together and form a batch. Activities done to that batch fall under here.
Product Level Activities refer to those done on a product wide scale. That means that when the entire product is affected, it falls under here. Examples include Product Advertising or Recall.
Customer Level Activities refer to those that an organization engages in for those entities that patronize them. Such activities are very important because the customer is the most important aspect of the business.
Then there are the Organizational level Activities. As the name implies, these are activities at an Organization wide level.
Classifying the above therefore,
A. Setting up a machine for a production run of 500 units. BATCH LEVEL ACTIVITY.
This deals with a group of units, 500 to be precise and so is a batch level activity.
B. Conducting a seminar for local doctors on the benefits of a new drug. PRODUCT LEVEL.
This seminar will speak on the product being the drug as a whole therefore it is product level.
C. Embossing a company logo on every product made. UNIT LEVEL.
This involves an individual unit at a time and so is at Unit Level.
D. Seating a party of 11 at a restaurant. BATCH LEVEL.
The 11 people to be served are individual units that have now been grouped together into one batch so is a Batch Level Activity.
E. Providing technical support for two years following a sale. CUSTOMER LEVEL ACTIVITY.
This is about providing help to the company's customers so it falls under Customer Level Activities.
F. Managing a corporation's accounting department. ORGANIZATIONAL LEVEL ACTIVITY.
This involves the Corporation's entire accounting department and so is Organizational level.
G. Attaching a price tag to each product. UNIT LEVEL.
Attaching prices will be done to each individual unit and so it a Unit level activity.
H. Issuing an invoice. CUSTOMER LEVEL ACTIVITY.
Issuing an invoice is done when a sale is complete. Sales are done to customers so this is a customer Level Activity.
I. Developing a corporate advertising campaign. ORGANIZATIONAL LEVEL ACTIVITY.
This is has to do with advertising the company as a whole and so is an Organizational level Activity.
J. Recalling a defective product. PRODUCT LEVEL ACTIVITY.
By recalling an entire product, this Activity falls under the Product Level because it deals with the product as a whole. For example, Toyota recalling all cars of a certain model for safety reasons.
1. How has an understanding of consumer behavior helped Coppertone grow in the United States and around the globe? 2. Describe the five-stage purchase decision process for a Coppertone customer. 3. What are the possible situational, psychological, and sociocultural influences on the Coppertone consumer purchase decision process? Situational Psychological Sociocultural 4. What specific marketing activities does Coppertone utilize to help Coppertone grow in the marketplace? 5. What challenges does Coppertone face in the future? What actions would you recommend related to each challenge?
Answer: The answers are provided below
Explanation:
1. The understanding of consumer behavior which has helped Coppertone grow in the United States and around the world are:
• Its understanding of consumer behavior was along with changing behaviour of consumers.
• Its understanding was along with consumer's changing needs.
• Providing innovative solutions that are in accordance with consumer preferences.
Note that at the beginning, Coppertone started as a tanning product, but later developed nee products when the consumers preferences changed from tanning to skin protection.
2. . The Five stage purchase decision process for a Coppertone customer are:
a. Problem recognition - This is the stage of understanding the problem.
b. Search for information. It is the stage of seeking solution to the problem
c. Comparision of alternatives - This is the stage where the comparative analysis is done. This stage is influenced by the product, price, availability etc.
d. Decision of purchasing - This is the stage of decision making that is based on the comparisons made.
e. Post-purchase feedback - This is the stage whereby the consumer will evaluate the product performance. This stage is vital to retaining existing consumers.
3. The factors that can influence the Coppertone consumer purchase decision process are:
• Psychological: It is the intention of consumers to protect their skin from the sun while going out thereby maintaining their good look.
• Sociological : It is in human behaviour to replicate the things that are being done by other people in the society.
• Situational Factor: This is a case whereby consumers are left with no other alternatives than purchasing a particular product brand to meet their need.
4. The marketing activities Coppertone utilized to help it grow in the marketplace are:
• Advertisment: Coppertone advertisment strategy really worked through its use of the advertisement campaign for “the Coppertone Girl” and also their famous tagline “Tan, Don’t Burn.” This helped spar the product’s popularity.
• Use of social media: They also engage with their customers on social media nd other websites.
5. The challenges that would be faced by Coppertone in the future are:
• There will be an unbalanced demand and supply since the requirement of the product is seasonal.
• Selective usage of the product by the customer can hampers the sale.
• There may be the need for more innovative products in order to meet customer needs.
The recommendation related to each challenges are:
• Awareness should be created among the customers about their self health and looks, in order for them to shift away from seasonal usage.
• New products should be launched aggressively. This is because customers are trendy nowadays and also appealing marketing techniques should be used.
1. When The understanding of consumer behavior that has helped Coppertone grow in the United States and around the world are:
Although, Its understanding of consumer behavior was along with changing the behavior of consumers.
Then Its understanding was along with consumers' changing needs.
Consumer behaviorAlso when Providing innovative solutions that are under consumer preferences.
Note that at the beginning, Coppertone started as a tanning product, but later developed nee products when the consumer's preferences changed from tanning to skin protection.
2. When The Five stage purchase decision process for a Coppertone customer are:
a. Problem recognition - This is the stage of understanding the problem.
b. Search for information- It is the stage of seeking a solution to the problem
c. Comparison of alternatives - This is the stage where the comparative analysis is done. This stage is influenced by the product, price, availability, etc.
d. Decision of purchasing - This is the stage of decision-making that is based on the comparisons made.
e. Post-purchase feedback - This is the stage whereby the consumer will evaluate the product performance. This stage is vital to retaining existing consumers.
3. When The factors that can influence the Coppertone consumer purchase decision process are:
Psychological: Consumers intend to protect their skin from the sun while going out thereby maintaining their good look.
Sociological: It is in human behavior to replicate the things that are being done by other people in society.
Situational Factor: This is a case whereby consumers are left with no other alternatives than purchasing a particular product brand to meet their needs.
4. When The marketing activities Coppertone utilized to help it grow in the marketplace are:
The Advertisement: when the Coppertone advertisement strategy worked through its use of the advertisement campaign for “the Coppertone Girl” and also their famous tagline “Tan, Don’t Burn.” This helped spar the product’s popularity.
Use of social media: They also engage with their customers on social media and other websites.
5. The challenges that would be faced by Coppertone in the future are:
There will be an unbalanced demand and supply since the requirement of the product is seasonal.
Then Selective usage of the product by the customer can hamper the sale.
There may be a need for more innovative products to meet customer needs.
The recommendation related to each challenge are:
Awareness should be created among the customers about their self-health and looks, for them to shift away from seasonal usage.
New products should be launched aggressively. This is because customers are trendy nowadays and also appealing marketing techniques should be used.
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Baker Industries’ net income is $26,000, its interest expense is $6,000, and its tax rate is 45%. Its notes payable equals $23,000, long-term debt equals $70,000, and common equity equals $260,000. The firm finances with only debt and common equity, so it has no preferred stock. What are the firm’s ROE and ROIC? Round your answers to two decimal places. Do not round intermediate calculations.
Answer:
ROI=10%
ROIC=0.83
Explanation:
Net Income = $26,000
Interest expense = $6,000
Tax rate = 45%
Payable = $23,000
Long-term debt = $70,000
Common equity = $260,000
1. ROE = Net Income / Common equity
= 26,000 / 260,000
=0.1
=10%
2. ROIC = EBIT * (1-Tax rate) / Invested capital
EBIT = Net Income before tax + Interest
Net Income before tax = (Net income * 100) / (100-Tax rate)
Net Income before tax = 26000 * 100 / 100-45
=2600000 / 55
Net Income before tax = 47272.72
EBIT = 47272.72 + 6,000
=53272.72
Invested Capital = Note payable + Long term debt.+ Common Equity
=23000 +70000 +260000
=$353,000
Therefore ROIC = EBIT * (1-Tax rate) / Invested capital
ROIC= 53272.72 * (1-0.45) / 353,000
=53272.72*0.55 / 353,000
=292299.996/353,000
=0.8280
=0.83
ROIC= 0.83
Listed below are several transactions. For each transaction, indicate whether the ca financing, or noncash activity. Also, indicate whether the transaction is a cash inflow
Also, indicate whether the transaction is a cash inflow or cash outflow, or has no effect on cash. 1. Payment of employee salaries. 2. Sale of land for cash. Investing 3. Purchase of rent in advance. 4. Collection of an account receivable. 5. Issuance of common stock. 6. Purchase of inventory 7. Collection of notes receivable. 8. Payment of income taxes. 9. Sale of equipment for a note receivable. 10. Issuance of bonds. 11. Loan to another firm. 12. Payment of a long-term note payable. 13. Purchase of treasury stock. 14. Payment of an account payable. 15. Sale of equipment for cash.
Answer:
1. Operating and Cash outflow: Payment of employee salaries.
2. Investing and Cash inflow: Sale of land for cash. Investing
3. Operating and Cash outflow: Purchase of rent in advance.
4. Operating and Cash inflow: Collection of an account receivable.
5. Financing and Cash inflow: Issuance of common stock.
6. Operating and Cash outflow: Purchase of inventory
7. Investing and Cash inflow: Collection of notes receivable.
8. Operating and Cash outflow: Payment of income taxes.
9. Noncash activity, so no effect: Sale of equipment for a note receivable.
10. Financing and Cash inflow: Issuance of bonds.
11. Investing and Cash outflow: Loan to another firm.
12. Financing and Cash outflow: Payment of a long-term note payable.
13. Financing and Cash outflow: Purchase of treasury stock.
14. Operating and Cash outflow: Payment of an account payable.
15. Investing and Cash inflow: Sale of equipment for cash.
Explanation:
A statement of cash flow is a financial statement that gives the aggregate cash inflow and cash outflow in an organization during an accounting period. The three categories of statement of cash flows are investing activities, financing activities, and operating activities.
1. Investing activities are essentially the cash activities with respect to non-current assets such as sale of equipment for cash.
2. Financing activities refers to cash activities with respect to owners’ equity and non-current liabilities such as purchase of treasury stock.
3. Operating activities are mainly the cash activities with respect to net income such as payment of employee salaries.
how all calculations: Palmer Inc. currently produces 110,000 units at a cost of $440,000. Next year Palmer Inc. expects to produce 115,000 units. Palmer’s relevant range is 100,000 to 120,000 units. If the cost is variable and 115,000 units are produced, the total cost _____. Group of answer choices will decrease will increase to $460,000 will stay the same will be indeterminate
Answer:
Will increase to $460,000
Explanation:
Palmer Inc. currently produces 110,000 units at the rate of $440,000
Next year they are expected to produce 115,000 units
Since the cost is variable, the total cost can be calculated as
(440,000/110,000) × 115,000
= 4×115,000
= $460,000
Hence the total cost is $460,000
Toxemia Salsa Company manufactures five flavors of salsa. Last year, Toxemia generated net operating income of $40,000. The following information was taken from last year's income statement segmented by flavor (brackets indicate a negative amount):
Wimpy Mild Medium Hot Atomic
Contribution margin $(2000) $45,000 $35,000 $50,000 $162,000
Segment margin $(16,000) $(5000) $7000 $10,000 $94,000
Segment margin less
allocated common fixed
expenses $(26,000) $(15,000) $(3000) $0 $84,000
Toxemia expects similar operating results for the upcoming year. If Toxemia wants to maximize its profitability in the upcoming year, which flavor or flavors should Toxemia discontinue? A no flavors should be discontinued B wimpy C wimpy and mild D wimpy, mild, and medium
Answer:
C wimpy and mild
Explanation:
The Allocated fixed Common overhead is irrelevant for this Decision because the expense is a head office expense which is managed by a Head office department.
Of our interest is the Incremental Revenues and Expenses that result from existence of a Segment (Segment Margin).
The segment margin consists of controllable Fixed and Variable costs attributable to a particular segment.
Discontinue flavor giving a negative Segment Margin that is : Wimpy and Mild
What is SHREK testing?
Answer:
the ogre
Explanation:
Speed, size, and strength are thought to be important factors in football performance. The article "Physical and Performance Characteristics of NCAA Division I Football Players" (Research Quarterly for Exercise and Sport [1990]: 395–401) reported on physical characteristics of Division I starting football players in the 1988 football season. Information for teams ranked in the top 20 was easily obtained, and it was reported that the mean weight of starters on top-20 teams was 105 kg. A random sample of 33 starting players (various positions were represented) from Division I teams that were not ranked in the top 20 resulted in a sample mean weight of 103.3 kg and a sample standard deviation of 16.3 kg. Is there sufficient evidence to conclude that the mean weight for non-top-20 starters is less than 105, the known value for top-20 teams?
Answer:
no
Explanation:
H0: mean of sample=105
Ha: mean of sampe≠ 105
t-statistic= (population mean-sample mean)/(standard deviation/√sample size)
t-statistic= (105-103.3)/(16.3/√33)
t-statistic= 0.5991
degress of freedom= 32
for alpha 0.05, p-value from t-distributino table is 1.697
since t-statistic is less than the p-value, null hypothesis is accepted.
There is no sufficient evidence to conclude that the mean weight for non-top-20 starters is less than 105 the known value for top-20 teams
Hoosier Corporation declared a 2-for-1 stock split to all shareholders of record on March 25 of this year. Hoosier reported current E&P of $600,000 and accumulated E&P of $3,000,000. The total fair market value of the stock distributed was $1,500,000. Barbara Bloomington owned 1,000 shares of Hoosier stock with a tax basis of $100 per share.a) What amount of taxable dividend income, if any, does Barbara recognize this year? Assume the fair market value of the stock was $150 per share on March 25 of this year.b) What is Barbara's income tax basis in the new and existing stock she owns in Hoosier Corporation, assuming the distribution is tax-free?c) How does the stock dividend affect Hoosier's accumulated E&P at the beginning of next year?
Answer:
(a) The stock dividend is not taxable because it affects all shareholders pro rata
(b) Babara will transfer half of the old stock base to the new stock and make her new and old stock tax base $50
(c) Hoosier does not change his E&P for the stock dividend since the shareholders are not taxable.
Explanation:
Linguini Inc. adopted dollar-value LIFO (DVL) as of January 1, 2018, when it had an inventory of $841,000. Its inventory as of December 31, 2018, was $874,000 at year-end costs and the cost index was 1.15. What was DVL inventory on December 31, 2018
Answer:
760,000
Explanation:
First find ending inventory at base pricing:
$874,000/1.15 = 760,000
Calculate real dollar increase/decrease in quantity
760,000-841,000 = -81,000
Since it is a decrease in quantity, you use prior period cost index. Prior period is the base year so you just use 1.0 which means that -81,000 stays the same
so now it is 841,000-81,000=760,000
The dollar-value LIFO (DVL) inventory on December 31, 2018 will be 760,000.
What is dollar-value LIFO (DVL) inventory?The latest in, first out cost layering principle is a version on which the dollar-value LIFO method is based. In essence, the technology aggregates cost data for huge quantities of inventory, eliminating the need to create unique cost layers for each inventory item. Instead, pools of inventory goods are organized into layers.
Find ending stock at base prices first:
$874,000/1.15 = 760,000
Determine the actual dollar gain or decrease in the amount.
760,000-841,000 = -81,000
Using the preceding period cost index is appropriate because the quantity has decreased. Since the prior period is the base year, you only need to utilize 1.0, so that -81,000 remains the same.
Consequently, it is now 841,000-81,000=760,000.
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On July 1, Perry Company signed a note with principal of $80,000 and a stated interest rate of 4%. The principal and interest are due on April 1 of the following year. Perry will accrue interest on December 31st.
$80,000 * 4% * 6/12 = $1,600 Interest is always stated as an annual rate regardless of loan term. The 4% interest is annual and must be multiplied by 6/12 to account for the six months july-december when recording the accrued interest on 12/31.
Required:
What is an example of accrued receivable?
Answer:
$1,600
An example of accrued receivable is recording interest revenue before it is been received.
Explanation:
Principal =$80,000
Interest rate =4%.
July to December =6 months
Hence:
$80,000 * 4% * 6/12
=$80,000×0.04×0.5
= $1,600
Perry accrued interest on December 31st is $1,600
An example of accrued receivable is recording interest revenue before it is been received.
A travel agent wants to determine how much the average client is willing to pay for a weekend at an all-expense paid resort. The agent surveys 30 clients and finds that the average willingness to pay is $2,500 with a standard deviation of $840. However, the travel agent is not satisfied and wants to be 95% confident that the sample mean falls within $150 of the true average. What is the minimum number of clients the travel agent should survey
Answer:
[tex]n=(\frac{1.960(840)}{150})^2 =120.47 \approx 121[/tex]
So the answer for this case would be n=12 rounded up to the next integer
Explanation:
[tex]\bar X=2500[/tex] represent the sample mean
[tex]\mu[/tex] population mean (variable of interest)
s=840 represent the sample standard deviation
n represent the sample size
The margin of error is given by this formula:
[tex] ME=z_{\alpha/2}\frac{\sigma}{\sqrt{n}}[/tex] (a)
And on this case we have that ME =150 and we are interested in order to find the value of n, if we solve n from equation (a) we got:
[tex]n=(\frac{z_{\alpha/2} \sigma}{ME})^2[/tex] (b)
The critical value for 95% of confidence interval, the significance level if 5% and the critical value would be [tex]z_{\alpha/2}=1.960[/tex], replacing into formula (b) we got:
[tex]n=(\frac{1.960(840)}{150})^2 =120.47 \approx 121[/tex]
So the answer for this case would be n=12 rounded up to the next integer
An inexperienced accountant for Ayayai Corp. showed the following in the income statement: income before income taxes $250,000 and unrealized gain on available-for-sale securities (before taxes) $85,000. The unrealized gain on available-for-sale securities and income before income taxes are both subject to a 25% tax rate. Prepare a correct statement of comprehensive income.
Answer:
Ayayai Corp.
Statement of Comprehensive Income
For the Year Ended xxx, 202x
Net income $187,500
Other comprehensive income:
Unrealized gain on AFS securities $85,000
Comprehensive income $272,500
Explanation:
In order to prepare a statement of comprehensive income we first need to determine net income after taxes = $250,000 x (1 - 25%) = $187,500
Unrealized gains or losses are not taxed until they are actually realized (either make profit or lose money).
Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $254,800, and the sales mix is 40% bats and 60% gloves. The unit selling price and the unit variable cost for each product are as follows: Products Unit Selling Price Unit Variable Cost Bats $40 $30 Gloves 100 60 a. Compute the break-even sales (units) for the overall enterprise product, E. units b. How many units of each product, baseball bats and baseball gloves, would be sold at the break-even point
Answer:
a)Break-even sales in units= 9,100 units
b)The number of units of each products:
Bat= 3,640 units
Gloves= 5,460 units
Explanation:
The break-even sales in unit = total general fixed cost/Average contribution per unit
Average contribution per unit = (40%× (40-30) )+ (60%×(100-60) )=28
Break-even Sales = $254,800/$28=9100 units
Break-even sales in units= 9,100 units
The number of units of each products:
Bat = 40%×9100 =3,640 units
Gloves = 60%× 9,100 =5,460 units
Bat= 3,640 units
Gloves= 5,460 units
=
ABC Company keeps their accounting records on the cash basis. During the year, ABC received $260,000 from clients, and ABC paid $85,000 to cover operating expenses. Account balances as of the dates given are as follow:
January 1 December 31
Accounts Receivable $24,000 $52,000
Accrued Liabilities $56,000 $40,000
Unearned Service Revenue $35,000 $65,000
Prepaid Expenses $26,000 $28,000
In addition, depreciation expense for the current year is $16,000.
Accrual basis net income is:
a. $181,000
b. $145,000
c. $201,000
d. $165,000
Answer:
a. $181,000
Explanation:
The Income Statement consists of Revenue and Expenses recorded on Accrual Basis. The Accrual Basis of Accounting states that Revenue and Expenses must be recorded as and when they Occur or Incur not when cash is paid or received.
Calculation of Net Income will thus be as follows :
Revenue Received $260,000
Unearned Revenue($65,000-$35,000) $30,000
Total Revenue $290,000
Less Expenses :
Expenses ($85,000+$26,000-$28,000) $83,000
Depreciation $16,000
Net Income $181,000
A basic finding of labor economics is that workers who have more experience in the labor force are paid more than workers who have less experience (holding constant the amount of formal education). True or False: This might be the case because more experience decreases the value of the marginal product of labor. True False Some studies have also found that experience at the same job (called job tenure) has an extra positive influence on wages. Job tenure is valuable because people gain that is useful to the firm.
Answer:
A. TRUE
B1. TRUE
B2. Job Specific Knowledge
Explanation:
1. TRUE because more experience will definitely means more on-the-job training because the employee has gain different experience from either same field or different field which will inturn help to increase the worker's value of the marginal product of labor which is why workers who have more experience in the labor force are tend to be paid more than workers who have less experience or no experience.
B1. TRUE because experience gain at the same job will definitely lead to an extra positive influence on wages.
B2. Job tenure is valuable because people will tend to be able to gain JOB SPECIFIC KNOWLEDGE that is useful to the firm.
JOB SPECIFIC KNOWLEDGE: can be defined as the way in which workers or an employee shows his or her abilities, skills and strengths in order to excel in that specific job which is why employers of labour will often include the skill that is required for the employee to be able to perform the job in their job posting.
Answer:
Explanation:
The correct answer to the first question is false, not true. Trust me
Oriole Inc manufactures model airplanes and repair kits. The planes account for 75% of the sales mix, and the kits the remainder. The variable cost ratio for the planes is 80% and 65% for the kits. Fixed costs are $114000. Compute the breakeven point in sales dollars.
Answer:
Break-even point (dollars)= $480,000
Explanation:
Giving the following information:
Fixed costs are $114000.
Sales mix:
Planes= 0.75
Kits= 0.25
Contribution margin ratio:
Planes= 0.20
Kits= 0.35
To calculate the break-even point in dollars, we need to use the following formula:
Break-even point (dollars)= Total fixed costs / Weighted average contribution margin ratio
Weighted average contribution margin ratio= sales mix*contribution margin ratio
Weighted average contribution margin ratio= 0.75*0.2 + 0.25*0.35
Weighted average contribution margin ratio= 0.2375
Break-even point (dollars)= 114,000/0.2375
Break-even point (dollars)= $480,000
Howard Company has two support departments (S1 and S2) and two producing departments (P1 and P2). Department S1 costs are allocated on the basis of number of employees, and Department S2 costs are allocated on the basis of space occupied expressed in square feet.
Data on direct department costs, number of employees, and space occupied are as follows:
S1
S2
P1
P2
Direct dept. costs
$7,500
$11,000
$27,500
$30,000
Number of employees
10
5
20
25
Space occupied (sq. ft.)
1,000
500
1,500
2,500
If Howard used the reciprocal method, the algebraic equation expressing the total costs allocated from S1 is
Select one:
a. S1 = $7,500 + 0.10S2.
b. S1 = $7,500 + 0.20S2.
c. S1 = $10,000 + 0.20S2.
d. S1 = $10,000 + 0.10S2.
Answer: S1 = $ 7500 + 0.20 S2
Explanation:
From the question, Howard Company has two support departments which are (S1 and S2) and two producing departments which are (P1 and P2). The department S1 costs are allocated on the basis of number of employees, and the department S2 costs are allocated on basis of space occupied expressed in square feet.
The algebraic equation expressing the total costs allocated from S1 is calculated as follow:
S1 Direct Cost = $ 7500
The cost of S2 will be allocated to S1 based on the space occupied and the total space that is occupied is:
= 1000 + 1500 + 2500
= 5000 sq ft
Space occupied by S1 = 1000
S2’s cost allocated to S1 will be:
= (1000 / 5000) of S2 cost
= 0.20 S2
Therefore the correct option is:
S1 = $ 7500 + 0.20 S2
Richard Palm is the accounting clerk of Olive Limited. He uses the source documents such as purchase orders, sales invoices and suppliers’ invoices to prepare journal vouchers for general ledger entries. Each day he posts the journal vouchers to the general ledger and the related subsidiary ledgers. At the end of each month, he reconciles the subsidiary accounts to their control accounts in the general ledger to ensure they balance. Discuss the internal control weaknesses and risks associated with the above process. (10 marks 300 words)
Answer:
Olive Limited
1) Internal Control Weaknesses: Richard Palm is just an accounting clerk and obviously there is a lack of qualification for him to single-handedly complete his work without supervision. He handles the whole processes of identifying source documents, the accounts involved, and their correctness, preparing the journal, posting to the ledgers, and leger accounts reconciliation. This shows that there is no segregation of duties. There is no personnel that authorizes or reviews Richard's accounting processes. He engages in self-review (reconciliation) of his work.
2) The risks associated with Richard's process are:
a) Richard lacks the required professional experience and qualification to handle most of his work alone. Thus, the risk of misstatement of financial statement elements is high.
b) Since Richard works without appropriate supervision, there is an increased risk of fraudulent behaviors. Richard could post fictitious invoices to the accounting records.
c) Without separation of duties, a single individual handles a transaction from the beginning to the end. This does not augur well for internal controls, which can be easily compromised.
d) Designated managers should be required to authorize certain types of transactions to add an extra layer of responsibility to accounting records. This also proves that transactions have been seen, analyzed, and approved by appropriate authorities. The requirement that large payments and expenses be approved by specific managers stop unscrupulous employees from making large fraudulent transactions with company funds, for example.
e) Richard also self-reviews his work. Thus, it may be difficult for him to identify errors of misstatement. An invoice could be posted more than once in the accounting records without being identified.
Explanation:
Internal controls are business processes that provide reasonable assurance so that several key business objectives are met, processes are operating efficiently, the financial reporting is reliable, and that the business is in compliance with applicable regulations and internal procedures.
Weaknesses occur when there is an absence of internal controls or the controls are not being operated as specified or the control objectives are not being achieved. When any of these are prevalent, risks arise. The risks may lead to intentional and unintentional financial statement misstatements or fraudulent practices.
The Crime Prevention Service for Business at Rutgers University School of Criminal Justice defines shrinkage as the difference between the inventory a business should have and what the:
Answer: ...business actually does have.
Explanation:
According to a study done in 2010, Retail Stores around $38 billion in Shrinkage making it quite a huge problem. Shrinkage according to the Crime Prevention Service for Business at Rutgers University School of Criminal Justice is the difference between the inventory a business should have and what it actually does have meaning that Shrinkage refers to the unexplained losses in inventory during the year.
Shrinkage can happen due to a couple of reasons such as employee theft, book keeping errors and shoplifting.
Martha was considering starting a new business. During her preliminary investigations, she incurred the following expenditures:
Salaries $22,000
Travel 18,000
Professional fees 13,000
Interest on a short-term note 4,000
Martha begins the business on July 1 of the current year. If Marth elects \SS 195 trearment, determine her startup expenditure deduction for the current year.
Answer:
$3,700
Explanation:
The computation of startup expenditure deduction for the current year is shown below:-
According to the section 195, the tax payer is eligible for an immediate deduction of startup expenditure or 5,000 decreased amount that exceeds $50,000
The amount left over of start up expense is eligible for amortization over 180 months starting from the month when the tax payer business started
Immediate deduction = $5,000 - Start up cost in excess of $50,000
= $5,000 - $3,000
= $2,000
The $3,000 come from
= $53,000 - $50,000
= $3,000
now,
Amortized deduction = ((Total start up cost - Immediate deduction) ÷ 180 months) × Total number of months from beginning July to ending December
= (($53,000 - $2,000) ÷ 180) × 6 months
= 283.33 × 6
= $1,700 approx
and
Start up cost = Salary expenses + Travel expenses + Professional fees
= $22,000 + $18,000 + $13,000
= $53,000
finally
Total deduction in the current year = Immediate deduction + Amortized deductions
= $2,000 + $1,700
= $3,700
gThe fact that flotation costs can be significant is justification for: maintaining a low dividend policy and rarely issuing extra dividends. a firm to issue larger dividends than their closest competitors. maintaining a high dividend policy. maintaining a constant dividend policy even when profits decline significantly. a firm to maintain a constant dividend policy even if they frequently have to issue new shares of stock to do so.
Answer:
Maintaining a low dividend policy and rarely issuing extra dividends.
Explanation:
This cost is said to be accumulated or generated by a company when dealing new security systems or organisation into the company. This happens in a registered or legal form of absorption of the said body. And this is been applied or shown in percentages during summation or analysis.
Many factors affect flotation which ranges from the type of issued securities, their size, and risks associated with the transaction. It is generally lower than those for issuing common shares. It is shown as the issuance of common shares typically ranges from 2% to 8%.
Income Statement The revenues and expenses of Paradise Travel Service for the year ended May 31, 2018, follow: Fees earned $900,000 Office expense 300,000 Miscellaneous expense 15,000 Wages expense 450,000 Prepare an income statement for the year ended May 31, 2018. Paradise Travel Service Income Statement For the Year Ended May 31, 2018
Answer:
Net income is $135,00 from the income statement.
Explanation:
In the Income Statement for a particular year, all expenses all expenses for the year are deducted from the income to arrive at net income for that year. Based this, we have:
Paradise Travel Service Income Statement For the Year Ended May 31, 2018
Details ($)
Fees earned 900,000
Office expense (300,000)
Miscellaneous expense (15,000)
Wages expense (450,000)
Net income 135,000
Therefore, net income is $135,00 from the income statement.
Avril Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The variable overhead rate is $4.60 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $54,080 per month, which includes depreciation of $3,840. All other fixed manufacturing overhead costs represent current cash flows. The direct labor budget indicates that 3,200 direct labor-hours will be required in October. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for October should be:
Answer:
Estimated manufacturing overhead rate= $21.5 per direct labor hour
Explanation:
Giving the following information:
The variable overhead rate is $4.60 per direct labor-hour.
Budgeted fixed manufacturing overhead is $54,080 per month
The direct labor budget indicates that 3,200 direct labor-hours will be required in October.
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
Estimated manufacturing overhead rate= (54,080/3,200) + 4.6
Estimated manufacturing overhead rate= $21.5 per direct labor hour
In a situation of neither input nor output fixed, the proper economic criterion is to _________________. A. Maximize the output B. Minimize the inputs C. Minimize (inputs - outputs) D. Maximize (outputs - inputs)
Answer:
D. Maximize (outputs - inputs)
Explanation:
The input is the raw material, labor, the efforts that is used in making the product while the output is the product or the result arising from the input
The profit arises when output and the input varies from each other
i.e
Profit = Output - input
In the case where there is neither an input nor output fixed, so we have to maximize the profit i.e (output - input) but the condition is that they are different from each other
Hence, the correct option is D.
Bill Casler bought a $2000, 9-month certificate of deposit (CD) that would earn 8% annual simple interest. Three months before the CD was due to mature, Bill needed his CD money, so a friend agreed to lend him money and receive the value of the CD when it matured.
Required:
a. What is the value of the CD when it matures?
b. If their agreement allowed the friend to earn a 10% annual simple interest return on his loan to Bill, how much did Bill receive from his friend
Answer:
a. What is the value of the CD when it matures?
$2,120b. If their agreement allowed the friend to earn a 10% annual simple interest return on his loan to Bill, how much did Bill receive from his friend?
$2,068.29Explanation:
interests earned by the CD = $2,000 x 8% x 9/12 = $120
the value of the CD at maturity = $2,000 (principal) + $120 (interests) = $2,120
if the friend wanted to earn 10% on the loan, that is equivalent to 10% x 3/12 = 2.5% for the 3 months
the amount of money received by Bill from his friend = CD's maturity value / (1 + expected interest) = $2,120 / (1 + 2.5%) = $2,120 / 1.025 = $2,068.29
ive years ago, NorthWest Water (NWW) issued $50,000,000 face value of 30-year bonds carrying a 14% (annual payment) coupon. NWW is now considering refunding these bonds. It has been amortizing $3 million of flotation costs on these bonds over their 30-year life. The company could sell a new issue of 25-year bonds at an annual interest rate of 11.67% in today's market. A call premium of 14% would be required to retire the old bonds, and flotation costs on the new issue would amount to $3 million. NWW's marginal tax rate is 40%. The new bonds would be issued when the old bonds are called. Refer to the data for NorthWest Water (NWW). What is the required after-tax refunding investment outlay, i.e., the cash outlay at the time of the refunding?
Answer:
the required after-tax refunding investment Outlay is $6,200,000
Explanation:
Given that:
NorthWest Water (NWW) issued $50,000,000 face value
Time of issuance = 5 years ago
Bond = 30
Annual coupon payment = 14%
Amortizing amount of floating costs on these bonds over the 30 - year life is $3 million
Also;The company could sell a new issue of 25-year bonds at an annual interest rate of 11.67% in today's market.
Call premium = 14%
NWW's marginal tax rate is 40%
The objective from the given data set is to find the required after-tax refunding investment outlay, i.e., the cash outlay at the time of the refunding.
Initial Outlay = After tax call premium + Floatation cost - Unexpensed float cost
Initial Outlay = [tex](0.14 *50,000,000) + (1 - 0.40)+ $3,000,000 - ($3,000,000)*(\dfrac{25}{30})*0.40[/tex]
Initial Outlay [tex]=4,200,000+ 3,000,000-1,000,000[/tex]
Initial Outlay = $6,200,000
Therefore ; the required after-tax refunding investment Outlay is $6,200,000
Bilbo Baggins wants to save money to meet three objectives. First, he would like to be able to retire 30 years from now with retirement income of $28,000 per month for 25 years, with the first payment received 30 years and 1 month from now. Second, he would like to purchase a cabin in Rivendell in 10 years at an estimated cost of $380,000. Third, after he passes on at the end of the 25 years of withdrawals, he would like to leave an inheritance of $1,700,000 to his nephew Frodo. He can afford to save $3,300 per month for the next 10 years. If he can earn an EAR of 10 percent before he retires and an EAR of 7 percent after he retires, how much will he have to save each month in years 11 through 30?
Answer:
He would have to save each month in years 11 through 30 the amount of $2,279.60
Explanation:
Because the cash flows occur monthly, we must get the effective monthly rate. One way to do this is to find the APR based on monthly compounding, and then divide by 12. So, the pre-retirement APR is:
EAR = .11 = [1 + (APR/12)] 12- 1;
APR = 12[(1.11) 1/12- 1] = .1048 or 10.48%
And the post-retirement APR is:
EAR = .08 = [1 + (APR/12)] 12 -1
APR = 12[(1.08) 1/12 -1] = .0772 or 7.72%
First, we will calculate how much he needs at retirement. The amount needed at retirement is the PV of the monthly spending plus the PV of the inheritance. The PV of these two cash flows is:
PVA = $24500{1 -[1/(1 + .0772/12) 12(25) ]}/(.0772/12) = $3,252,096.21
PV = $1525,000/[1 + (.0772/12)] 300 = $222,723.58
So, at retirement, he needs:
$3,252,096.21+ $222,723.58= $3474819.79
He will be saving $2,600 per month for the next 10 years until he purchases the cabin. The value of his savings after 10 years will be:
FVA = $2,600[{[1 + (.1048/12)] 12(10) -1}/(.1048/12)] = $547,487.10
After he purchases the cabin, the amount he will have left is:
$547,487.10 -345,000 = $202487.10
He still has 20 years until retirement. When he is ready to retire, this amount will have grown to:
FV = $202487.10[1 + (.1048/12)] 12(20) = $1632023.27
So, when he is ready to retire, based on his current savings, he will be short:
$3474819.79-1632023.27 = $1842796.52
This amount is the FV of the monthly savings he must make between years 10 and 30. So, finding the annuity payment using the FVA equation, we find his monthly savings will need to be:
FVA = $1842796.52 = C [{[ 1 + (.1048/12)] 12(20) -1}/(.1048/12)]
C = $2,279.60
He would have to save each month in years 11 through 30 the amount of $2,279.60
True or False : A population refers to the entirety of a group.
Answer:
It is True.
Explanation:
A population may refer to an entire group of people, objects, events, hospital visits, or measurements.
Which of the following statements concerning the selection of risk management techniques and insurance market conditions is (are) true? I.It's easier to purchase affordable insurance during a "soft" market than during a "hard" market.II.Retention is used more during a "soft" market than during a "hard" market.I onlyII onlyboth I and IIneither I nor II
Answer:
I.It's easier to purchase affordable insurance during a "soft" market than during a "hard" market
I only
Explanation:
When a purchaser of insurance wants to make a purchase he analyses the market to get a favourable condition that reduces risk and loss.
The market condition can be a soft market or hard market.
Soft market is one in which potential sellers are more than potential buyers. So supply exceeds demand. Buyers are able to buy affordable insurance.
Hard market on the other hand is when there is an upswing in market cycle. Premiums increase and capacity for insurance decreases.
It is more difficult to get affordable insurance in this market