Answer:
14-Jan
Dr Trade Receivable $1,125
Cr Sales
14-jan
Dr Cost of sales 625
Cr Inventory 625
9-Apr
Dr Inventory 375
Cr Trade Payable 375
2-Sep
Dr Trade Receivable $2,500
Cr Sales $2,500
2 sep
Dr Cost of sales $1,375
Cr Inventory $1,375
Dec 31 No journal entry
Explanation:
Preparation to Records the month-end journal entries noted below, assuming the company uses a periodic inventory system
14-Jan
Dr Trade Receivable $1,125
Cr Sales (45*25)
14-jan
Dr Cost of sales[25*25] 625
Cr Inventory 625
9-Apr
Dr Inventory (25*$15) 375
Cr Trade Payable 375
2-Sep
Dr Trade Receivable $2,500
Cr Sales (50*50) $2,500
2 Sep
Dr Cost of sales $1,375
Cr Inventory $1,375
($2,500-$1,125)
Dec 31 No journal entry
Beyond grades, what else would make a student stand out to an admissions counselor?
Answer:
Extracurricular Activity
Colleges prefer students who are active in academics as well as off it. This shows diversity in the student and is a trait that the counselors would be looking for.
Extracurricular activities like after-school jobs, sports and even volunteering at NGOs weigh heavily in the assessment of a student's ability to fit in a college and if you had great grade whilst doing these activities, you will have a better chance at being admitted.
Suppose that a hot dog vendor uses a cart (K) and his time (L) to make and sell hot dogs. The vendor's production function is , where Q is the number of hot dogs per day. Suppose that the rental on hot dog carts is $50 per day and that the vendor wants to produce 500 hot dogs per day. The demand for labor is ____.
Answer:
L = 2084.75 W^-0.3
Explanation:
The computation of the demand of the labor is shown below:
At the optimum input
As we know that
MRTS = MPL ÷ MPK = w ÷ r
0.7(K ÷ L)^0.3 ÷ 0.3(L ÷ K)^0.7 = w ÷ 50
7K ÷ 3L = w ÷ 50
K = (3 ÷ 350)wL
Now apply the production function
Q = K^0.3L^0.7
500 = ((3 ÷ 350)wL)^0.3 L^0.7
500 = (3 ÷ 350)^0.3 × w^0.3 × L
L = 2084.75 × w^-0.3.
Which of the following statement about communication is true? a. In a business scenario, communication occurs only during the leading function of management. b. Communication is a one-way process in most cases. c. It is necessary to have an agreement for an effective communication. d. There must be mutual understanding for the communication to be successful.
Answer:
c. It is necessary to have an agreement for an effective communication
Explanation:
The communication is basically a two way communciation where the sender send the message and the receiver received the message by decoding the message sended by the sender
When the communciation starts so there is an agreement i.e. necessary between the parties to have an effective communication
hence, the correct option is c.
One of the typical characteristics of management fraud is: Multiple Choice Illegal acts committed by management to evade laws and regulations. Falsification of documents in order to misappropriate funds from an employer. Victimization of investors through the use of materially misleading financial statements. Conversion of stolen inventory to cash deposited in a falsified bank account.
Answer:
Victimization of investors through the use of materially misleading financial statements
Explanation:
Management fraud is when the management of a company defrauds either their investors and creditors by using misleading financial statement
Equipment was sold for $50,000. The equipment was originally purchased for $85,000. At the time of the sale, the equipment had accumulated depreciation of $30,000. Calculate the gain or loss to be recorded on the sale of equipment. Multiple Choice Gain of $5,000. Loss of $35,000. Gain of $20,000. Loss of $5,000.
Answer:
Loss of $5,000
Explanation:
loss to be recorded on the sale of equipment is $5,000
Mogul Company ships merchandise to Ski Outfit in a consignment arrangement. The arrangement specifies that Ski Outfit will attempt to sell the merchandise, and in return, Mogul will pay to Ski Outfit a 15% sales commission on any merchandise sold. During the year, Mogul ships inventory with a cost of $130,000 to Ski Outfit. By the end of the year, $100,000 of the merchandise has been sold to customers for a total of $137,000. What amount of inventory will Mogul report at year end
Answer:
The amount of inventory Mogul will report at year end is $30,000.
Explanation:
The amount of inventory Mogul will report at year end can be calculated as follows:
Costs of goods available for sale = Costs of inventory shipped by Mogul = $130,000
Cost of goods sold = $100,000
Inventory at year end = Costs of goods available for sale - Cost of goods sold = $130,000 - $100,000 = $30,000
Therefore, the amount of inventory Mogul will report at year end is $30,000.
Suppose that Verania and Josimar are roommates that need to complete some household chores. Vacuuming and washing dishes need to be done. They know from the last time they did these chores that it takes Verania 2 hours to vacuum and 1 hour to wash dishes. It takes Josimar 3 hours to vacuum and 2 hours to wash dishes. Josimar says it does not matter which task each of them performs because Verania is faster at both tasks.
Josimar’s reasoning
a. is wrong. Because Verania has a comparative advantage in washing dishes, she should wash dishes, and Josimar should vacuum.
b. is correct. Because Verania is faster at both tasks, there is no benefit in each volunteer specializing in one task or the other.
c. is wrong. Because Verania has an absolute advantage in both tasks, she should perform both tasks herself.
d. is wrong. Because Josimar has a comparative advantage in washing dishes, he should wash dishes, and Verania should vacuum.
Answer: a. is wrong. Because Verania has a comparative advantage in washing dishes, she should wash dishes, and Josimar should vacuum.
Explanation:
Having absolute advantage in both things does not mean that Verania has a Comparative advantage in both as well.
They should find out which activity they both have a comparative advantage in and focus on that. The activity that costs the least opportunity cost is the one they have a comparative advantage in.
Verania
Opportunity cost of vacuuming = 2 / 1 = 2 hours of washing dishes
Opportunity cost of washing = 1/2 = 0.5 hours of vacuuming
Josimar
Opportunity cost of vacuuming = 3/2 = 1.5 hours of washing dishes
Opportunity cost of washing = 2/3 = 0.66 hours of vacuuming
Verania has a comparative advantage in washing dishes while Josimar has a comparative advantage in vacuuming.
Accompanying a bank statement for Santee Company is a credit memo for $15,120 representing the principal ($14,000) and interest ($1,120) on a note that had been collected by the bank. The company had been notified by the bank at the time of the collection but had made no entries.
On March 1, journalize the entry that should be made by the company to bring the accounting records up to date. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTSSantee CompanyGeneral Ledger
ASSETS
110 Cash
111 Petty Cash
120 Accounts Receivable
131 Notes Receivable
141 Merchandise Inventory
145 Office Supplies
146 Store Supplies
151 Prepaid Insurance
181 Land
191 Office Equipment
192 Accumulated Depreciation-Office Equipment
193 Store Equipment
194 Accumulated Depreciation-Store Equipment
LIABILITIES
210 Accounts Payable
221 Notes Payable
222 Interest Payable
231 Salaries Payable
241 Sales Tax Payable
EQUITY
310 Owner, Capital
311 Owner, Drawing
312 Income Summary
REVENUE
410 Sales
610 Interest Revenue
EXPENSES
510 Cost of Merchandise Sold
515 Credit Card Expense
516 Cash Short and Over
520 Salaries Expense
531 Advertising Expense
532 Delivery Expense
533 Insurance Expense
534 Office Supplies Expense
535 Rent Expense
536 Repairs Expense
537 Selling Expenses
538 Store Supplies Expense
561 Depreciation Expense-Office Equipment
562 Depreciation Expense-Store Equipment
590 Miscellaneous Expense
710
Interest Expense
On March 1, journalize the entry that should be made by the company to bring the accounting records up to date. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 1
JOURNAL
DATE DESCRIPTION POST. REF. DEBIT CREDIT
1
2
3
Answer:
Dr Cash $15,120
Cr Notes Receivable $14,000
Cr Interest Revenue $1,120
Explanation:
Preparation of the journal entry
Based on the information given On March 1, the journal entry that should be made by the company to bring the accounting records up to date will be :
March 1
Dr Cash $15,120
Cr Notes Receivable $14,000
Cr Interest Revenue $1,120
Theory Enterprises uses a standard cost system and prepared the following budget for May when 24,000 machine hours of activity were anticipated: variable overhead, $48,000; fixed overhead: $240,000. Actual data for May were: Standard machine hours allowed for output attained: 25,000 Actual machine hours worked: 24,000 Variable overhead incurred: $50,000 Fixed overhead incurred: $250,000 The variable-overhead spending and efficiency variances for Theory are: Variable-Overhead Spending Variance Variable-Overhead Efficiency Variance A. $ 0 $ 0 B. $ 0 $ 2,000 unfavorable C. $ 2,000 unfavorable $ 0 D. $ 2,000 favorable $ 2,000 unfavorable E. $ 2,000 unfavorable $ 2,000 favorable
Answer:
See below
Explanation:
a. Variable overhead spending variance
= AH × ( AR - SR)
Where
AH = Actual Hours worked = 24,000
AR = Actual variable overhead rate = $50,000
SR = Standard variable overhead rate = $48,000
Therefore,
Variable overhead spending variance
= 24,000 × ($50,000 - $48,000)
= $48,000
The Tennis Times (TTT) is a publisher of magazines. Its accounting policy for subscriptions follows:RevenuesRevenues from our magazine subscription services are deferred initially and later recognized as revenue as subscription services are provided.Assume TTT (a) collected $490 million in 2018 for magazines that will be distributed later in 2018 and 2019, (b) provided $239 million of services on these subscriptions in 2018, and (c) provided $251 million of services on these subscriptions in 2019.
Answer:
Question requires the journal entries to record a, b and c.
a.
Date Account Title Debit Credit
2018 Cash $490,000,000
Unearned revenue $490,000,000
b.
Date Account Title Debit Credit
2018 Unearned revenue $239,000,000
Service revenue $239,000,000
c.
Date Account Title Debit Credit
2019 Unearned revenue $251,000,000
Service revenue $251,000,000
On January 1, 2021, Carla Vista Corporation signed a 5-year noncancelable lease for equipment. The terms of the lease called for Carla Vista to make annual payments of $195000 at the beginning of each year for 5 years beginning on January 1, 2021 with the title passing to Carla Vista at the end of this period. The equipment has an estimated useful life of 7 years and no salvage value. Carla Vista uses the straight-line method of depreciation for all of its fixed assets. Carla Vista accordingly accounts for this lease transaction as a finance lease. The lease payments were determined to have a present value of $813124 at an effective interest rate of 10%.
In 2022, Carla Vista should record interest expense of:________
a. $67994.
b. $48494.
c. $61812.
d. $42312.
Answer:
In 2022, Carla Vista should record interest expense of:________
c. $61,812.
Explanation:
a) Data and Calculations:
The Present Value (PV) of a 5-year noncancelable lease of equipment = $813,124
Annual lease payments = $195,000
Effective interest rate = 10%
Estimated lease term = 5 years
Estimated useful life of equipment = 7 years
Salvage value of equipment = $0
Method of Depreciation = Straight-line method
Lease period percentage = 71% (5/7)
Interest expense:
December 31, 2021 = $81,312 ($813,124 * 10%)
December 31, 2022 - $61,812 ($813,124 - $195,000 * 10%)
At the end of 2009, the following information is available for Clobes Company, Snyder Company, and Welz Company (you must show your calculations to receive full credit): Required: Which company has the highest level of financial risk? Using an appropriate ratio, support your answer. Which company is the most profitable from the owners' perspective? Using an appropriate ratio, support your answer. (3) Which company is getting the greatest return on assets? Show calculations.
Answer:
Answer is explained in the explanation section below.
Explanation:
Note: This question is incomplete and lacks necessary data to solve for this question. However I have found similar question on the internet and I will be using that data. Besides, I have attached the data used in the attachment below.
Solution:
1. The debt-to-equity ratio is the best way to assess financial risk. A higher debt-to-equity ratio indicates a higher level of financial risk. This ratio represents the willingness of the equity of the owners to fulfil their obligations.
Formula used:
Debt-to-equity ratio = Total liabilities divided by owner's equity
For Clobes:
Total liabilities = 100,000
Owners' equity = 200,000
Debt-to-equity ratio = 100000/200000 = 0.5
For Snyder:
Total liabilities = 300,000
Owners' equity = 200,000
Debt-to-equity ratio = 300000/200000 = 1.5
For Welz:
Total liabilities = 300,000
Owners' equity = 100,000
Debt-to-equity ratio = 300000/100000 = 3
Welz faces the greatest financial risk because it has the highest debt-to-equity ratio. It has a debt-to-equity ratio of three. Even though it depends on the industry, a company's debt-to-equity ratio should be between 1 and 1.5 if it is considered optimal. In this case, Welz's financial risk is considerably higher.
2. calculate Return on Equity(ROE)
Formula used:
ROE = Net income / Owner's equity
For Clobes:
Net income = 25,000
Owners' equity = 200,000
ROE = 25,000 / 200000 = 0.125
For Snyder:
Net income = 30,000
Owners' equity = 200,000
ROE = 30000 / 200000 = 0.15
For Welz:
Net income = 20,000
Owners' equity = 200,000
ROE = 20000 / 100000 = 0.2
Welz has the highest return of equity (ROE) of 0.2.
As a result, Welz is the most profitable company.
3. Return on assets:
Formula used
Return on Assets = Net income / Total assets
For Clobes:
Net income = 25,000
Total assets = 300,000
Return on Assets = 25,000 / 300000 = 0.08
For Snyder:
Net income = 30,000
Total assets = 500000
Return on Assets = 30000 / 500000 = 0.06
For Welz:
Net income = 20,000
Total assets = 400,000
Return on Assets = 20000 / 400000 = 0.05
Hence,
Clobes has the highest return on assets, which is 0.08.
If a local-level fair housing group wins a fair housing lawsuit against a landlord, who gets the money from the resulting judgment? When landlords are fined, the money goes to the Texas state treasury. All judgment awards, minus attorney fees, go to the individuals who actually suffered the discrimination. The money goes to the fair housing group that brought the lawsuit. The money goes into a fund established to help victims of discrimination statewide.
Answer: The money goes to the fair housing group that brought the lawsuit.
Explanation:
The fair housing group that brought the suit is the one that incurred the costs of litigation. They will therefore be rightly expected, to be the ones to enjoy the benefits of litigation as the money won in the suit would go to them.
They would in most cases however, spend some of this money on victims of discrimination at their own discretion. The region affected by the lawsuit would still gain fairer laws even if they did not gain money like the group did.
Your cousin has asked you to bankroll his proposed business painting houses in the summer. He plans to operate the business for 5 years to pay his way through college. He needs $15000 to purchase an old pickup truck, some ladders, a paint sprayer and some other equipment. He is promising to pay you $4500 at the end of each summer for 5 years. Calculate the annual rate of return.
Answer:
the annual rate of return is 15.24%
Explanation:
The computation of the annual rate of return is shown below:
Given that
NPER = 5
PV = -$15,000
PMT = $4,500
FV = $0
The formula is shown below:
= RATE(NPER,PMT,-PV,FV,TYPE)
AFter applying the above formula, the annual rate of return is 15.24%
TryFit Co. uses process costing to account for the production of energy food bars. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Beginning inventory consisted of $13,000 in materials and $10,000 in conversion costs. April costs were $42,000 for materials and $46,000 for conversion costs. During April 14,000 units were completed. Ending work in process inventory was 10,000 units (100% complete for materials, 50% for conversion). The value of ending inventory using the weighted average method would be closest to: (Round your intermediate calculations to four decimal places.) Multiple Choice $30,487.40 $37,654.00 $79,520.80 $46,454.00
Answer:
$37,654.00
Explanation:
beginning WIP = $13,000 + $10,000 = $23,000
costs added during the month = $42,000 + $46,000 = $88,000
total materials costs = $55,000
materials cost per EUP = $55,000 / 24,000 units = $2.29
total conversion costs = $56,000
conversion cost per EUP = $56,000 / 19,000 = $2.95
ending inventory = (10,000 x $2.29) + (10,000 x $2.95 x 50%) = $37,650
Eastern Motors Auto Dealership wanted to estimate the average CLV over a 5 year time horizon of a customer who purchases a new vehicle. The average vehicle sells for $23,700 and has a margin of 11%. Based on historical averages, 78% of people buying a new vehicle at Eastern will return for service 10 times over the next 5 years. Though it varies considerably, Eastern generates approximately $103 in margin on each service visit after accounting for parts and direct labor costs.
Required:
What is the total estimated CLV over a 5 year time horizon for someone who purchases a new vehicle at Eastern Motors?
Answer:
The total estimated CLV over a 5 year time horizon for someone who purchases a new vehicle at Eastern Motors is $3,410.40.
Explanation:
Margin on selling vehicle = Average vehicle selling price * Margin = $23,700 * 11% = $2,607
Margin generated by 78% of people who return for service over 5 years = Number of times * Margin generated on each service = 10 * $103 = $1,030
Total estimated customer lifetime value (CLV) = Margin on selling vehicle + (Margin generated by 78% of people who return for service over 5 years * 78%) + (Margin generated by 226% of people who do not return for service over 5 years * 22%) = $2,607 + ($1,030 * 78%) + ($0 * 22%) = $3,410.40
Therefore, the total estimated CLV over a 5 year time horizon for someone who purchases a new vehicle at Eastern Motors is $3,410.40.
Desert Company exchanged 3,000 shares of its stock, for equipment from Jungle Company. Desert's stock has a par value of $50 per share and at the time of the exchange was not actively traded on a market but 12 months ago was sold at a value of $49 per share. The quoted fair value of the equipment is $170,993. What is the amount Desert should record as the historical cost of the equipment?
Answer:
Desert Company
The amount that Desert should record as the historical cost of the equipment is:
= $170,993.
Explanation:
a) Data and Calculations:
Value of stock exchanged = $150,000 (3,000 * $50)
Fair value of equipment = $170,993
Gain from exchange of Equipment for shares = $20,993
b) The quoted fair value of Jungle's equipment should be used to record the historical cost in the financial statement of Desert Company. This value represents the only verifiable value. This value should then be compared to the value of the Desert shares exchanged with Jungle to determine if there is a loss or a gain from the exchange.
The management of Bonita Inc. was discussing whether certain equipment should be written off as a charge to current operations because of obsolescence. This equipment has a cost of $981,000 with depreciation to date of $436,000 as of December 31, 2020. On December 31, 2020, management projected its future net cash flows from this equipment to be $327,000 and its fair value to be $250,700. The company intends to use this equipment in the future.
Required:
Prepare the journal entry (if any) to record the impairment at December 31, 2020.
Answer and Explanation:
The journal entry is shown below:
Loss on equipment (impairment) $294,300
To Accumulated depreciation $294,300
(Being loss on equipment is recorded)
Here loss on equipment is debited as it increased the loss while on the other hand the accumulated depreciation is credited as it decreased the assets
Working notes
= $981,000 - $436,000 - $250,700
= $294,300
Suppose that the government charges a firm a franchise tax each year (instead of only once). Describe the effect of this tax on the marginal cost, average variable cost, short-run average cost, and long-run average cost curves. (Assume that the firm's before-tax average cost curve, , is U-shaped.)The annual franchise tax ___________ not affectthe firm's marginal cost curve,_____________ not affect increases the firm's average variable cost curve,_____________does not affectincreasesdecreasesthe short-run average cost curve, and___________ not affect decreases the long-run average cost curve.
Answer: does not affect; does not affect; increases; increases
Explanation:
''The annual franchise tax does not affect the firm's marginal cost curve, does not affect the firm's average variable cost curve, increases the short-run average cost curve, and increases the long-run average cost curve.''
Franchise taxes do not affect output so will not be apportioned to output. This means that neither the marginal cost nor the variable cost will change because the tax does not change with output.
The fixed costs will however increase because the tax is a fixed cost. As fixed cost is a part of total cost, the average cost curve will increase to show this change. The tax is paid each year instead of once so in the long run the firm would still be paying the tax so the long run average cost curve is affected as well.
What are the disadvantages of using social media to evaluate candidates for a job opening? Check all that apply
(A)Some candidates may have little or no social media presence.
(B)It is harder to uncover positive qualities than negative qualities.
(C)It is often difficult to locate candidates’ social media accounts.
(D)Social media profiles may not paint a complete picture of people.
(E)Social media profiles cannot accurately predict future job performance.
(F)Websites only show what a candidate is like personally, not professionally.
Answer:
a. Some candidates may have little or no social media presence.
d. Social media profiles may not paint a complete picture of people.
e. Social media profiles cannot accurately predict future job performance.
Explanation:
i just got it right :)
Answer:
a d e
Explanation:
Olivia wants to buy some vacant land for investment purposes. She currently cannot afford the full purchase price. Instead, Olivia pays the landowner $8,000 to obtain an option to buy the land for $175,000 anytime in the next four years. Fourteen months after purchasing the option, Olivia sells the option for $10,000. What is the amount and character of Olivia's gain or loss
Answer:
$2,000 gain
Explanation:
Calculation to determine the amount and character of Olivia's gain or loss
Based on the information given we were told that she pays the landowner the amount of $8,000 in order for her to obtain an option to buy a land in which after purchasing the option she sells the option for the amount of $10,000 making her to gain the amount of $2,000.
Olivia's gain =$10,000-$8,000
Olivia's gain =$2,000
Therefore The amount and character of Olivia's gain will be $2,000
Answer: $2000
Explanation:
The amount and character of Olivia's gain or loss will be gotten by calculating the amount that Olivia paid the landowner $8,000 to obtain an option to buy the land and the amount she eventually sold the option. This will be:
= $10000 - $8000
= $2000
Therefore, she had a capital gain of $2000
name two considerations by the Minister of finance when setting up a budget
Answer:
1. Revenue
2. Expenditure
Explanation:
Given that a country's budget is a robust plan usually prepared by the government of the country under the watchful eye of the Minister of Finance which thereby is used in presenting the country's expected or predicted revenues and proposed expenditure for the subsequent financial year.
Hence, two considerations by the Minister of finance when setting up a budget are REVENUE and EXPENDITURE.
By studying, Will can produce a higher grade, , on an upcoming economics exam. His production function depends on the number of hours he studies marginal analysis problems, A, and the number of hours he studies supply and demand problems, R. Specifically,
Gw = 2.5A^0.36R^(0.64)
His roommate David's grade-production function is
2.5A^0.25R^(0.75)
Note that d/dR and d/dR. Will's marginal productivity of studying supply and demand problems is:_____.
a. 1.60A^0.36R^-0.36.
b. 0.64(GW/R).
c. 2.5A^0.36R%0.64/R.
d. both a and b.
e. all of the above.
Answer:
c. 2.5A^0.36R%0.64/R.
Explanation:
Marginal productivity is the increase in amount of one unit of output with the one unit increase of input. Will can produce higher grade when he studies more hours. His grade will increase by one level when he studies more. His grade production function is the level of increase in his output.
Flagstaff Company has budgeted production units of 7,900 for July and 8,100 for August. The direct materials requirement per unit is 2 ounces (oz.). The company requires to have safety stock of direct materials on hand at the end of each month to complete 20% of the units of budgeted production in the following month. There was 3,160 ounces of direct material in inventory at the start of July. The total ounces of direct materials to be purchased in July is:
a. 15,720 oz.
b. 15,880 oz.
c. 16,200 oz.
d. 15,800 oz.
e. 19,040 oz.
Answer:
Purchases= 15,880 ounces
Explanation:
Giving the following information:
Production:
July= 7,900
August= 8,100
The direct materials required per unit are 2 ounces (oz.).
Desired ending inventory= 20% of the units of budgeted production in the following month.
Beginning inventory= 3,160 ounces
To calculate the direct material purchase, we need to use the following formula:
Purchases= production + desired ending inventory - beginning inventory
Purchases= 7,900*2 + (8,100*2)*0.2 - 3,160
Purchases= 15,880 ounces
Harry and Garry are twin brothers, and they each own appliance stores. Harry lives in Charleston, South Carolina and Garry lives in Gainesville, Florida. Even though they live far apart, they talk often, and trade hints and grievances about the appliance retail business. Lately, they have been discussing the fact that in a tough economy consumers often hold off on the upgrade of an appliance as long as possible, deciding that they will wait to "trade up" when economy turns around or the appliance breaks, whichever comes first. The brothers are discussing the wisdom of instituting short-term rebates in order to make their appliances more attractive to consumers, and to increase their rather dismal recent sales figures. Unbeknownst to each other, both Harry and Garry decide to institute a retail-level rebate on a specific high-end stove. The prices of the stove are $800 and $1,000 in Harry’s and Garry’s store, respectively. Both Harry and Garry’s rebate offers will be advertised in the Sunday paper, and will last one week. Neither Harry nor Garry has done the research necessary to discover the Just Noticeable Difference (which, for the target market and that product category in that economic climate, is 15%). Harry offers consumers a $100 rebate on the $800 stove. Garry offers consumers a $180 rebate on the $1,000 stove. Harry sells 20 stoves during the rebate period, which is about the same number that he sold the week just prior to the rebate offer. Garry sells 30 stoves during the rebate period, which is an increase of about 10 more than he sold the week just prior to the rebate offer.
Required:
a. Did the fact that he didn’t know the accurate Just Noticeable Difference cost Harry any Money
b. Did the fact that he didn’t know the accurate Just Noticeable Difference cost Garry any Money
Answer:
a. Noticeable difference is 15%
Explanation:
Just noticeable difference is 15% which is calculated as :
Original price of the stove $1,000 *15% = $150
The rebate amount should be $150 or more in order to be effective.
The demand equation for the stove is
P = a - bQ
For Harry
P = $700 and Q = 20
b = change in price / Change in quantity
a = P + bQ
a = 900 + 100 * 20
a = 2,900
This is the point where demand will be zero.
For Garry
P = $820 and Q = 30
b = change in price / Change in quantity
a = P + bQ
a = 820 + 82 * 10
a = 1,640
This is the point where demand will be zero.
Assume that a $1,000,000 par value, semiannual coupon U.S. Treasury note with five years to maturity (YTM) has a coupon rate of 3%. The yield to maturity of the bond is 8.80%. Using this information and ignoring the other costs involved, calculate the value of the Treasury note:
Answer:
$775,751
Explanation:
the effective semiannual rate = 1.088 = (1 + r)²
r = 4.3072%
we must first determine the present value of the face value = $1,000,000 / (1 + 4.3072%)¹⁰ = $655,927.02
now the present value of the coupon payments = $15,000 x [1 - 1/(1 + i)ⁿ ] / i = $15,000 x [1 - 1/(1 + 0.043072)¹⁰ ] / 0.043072 = $119,823.98
market price = $775,751
Demand for fasteners at W.W. Grainger is 20,000 boxes per month. Holding cost at Grainger is 20 percent per year. Each order incurs a fixed cost of $400. The supplier offers an all unit discount pricing scheme with a price of $5 per box for orders under 30,000 and a price of $4.90 for all orders of 30,000 or more. How many boxes should Grainger order per replenishment
Solution :
Given :
The annual demand, D = [tex]$200000 \times 12$[/tex]
= 240,000
The ordering cost, S = $ 400
Holding cost, H = 20 percent per year
The EOQ for each year,
[tex]$EOQ=\sqrt{\frac{2DS}{H}}$[/tex]
Under 30000, the cost = 5, Holding cost = 5 x 0.2 = 0
[tex]$EOQ=\sqrt{\frac{2\times 240000 \times 400}{1}}$[/tex]
= 13856.41
= 13856 (approx.)
It is feasible as it is not with in range of 30000 or more.
So calculating total cost at order quantity, Q = 13856 and 30000
Therefore total cost = purchase cost + annual ordering cost + annual holding cost.
[tex]$=(CD)+\frac{Q}{2}H+\frac{D}{Q}S$[/tex]
Q = 13856
Total cost = [tex]$(5\times 240000)+(\frac{240000}{13856})\times 400+(\frac{12856}{2})\times 1$[/tex]
= 1213856
Q = 30000
Total cost = [tex]$(4.9\times 240000)+(\frac{240000}{30000})\times 400+(\frac{30000}{2})\times 0.98= 1193900$[/tex]
Total cost is less than Q = 30000
Order quantity = 30000 boxes
Blondie Bean is a Brazilian company that grows, roasts and exports coffee beans. Blondie Bean is a very successful international coffee brand due to the abundant availability of coffee beans in Brazil, as well as the suitable climatic conditions and soil for the cultivation of coffee plants in the nation. According to the diamond model, Blondie Bean benefits from:
Answer:
Factor conditions
Explanation:
According to Porter's diamond model, the Brazilian company Blondie Bean benefits from the factor conditions, which is the advantage of the company having the production factors that are ideal for the production and commercialization of a product, as mentioned in the question , that the company has international success due to the abundant availability of coffee beans, ideal climatic and soil conditions for growing coffee in the country.
These characteristics of the company give it a competitive and strategic advantage in the international market, due to the quality that its product presents due to ideal factor conditions that give higher quality to the final product.
Pearl Corporation reported net income of $49,100 in 2020. Depreciation expense was $17,200. The following working capital accounts changed.
Accounts receivable $11,200 increase
Available-for-sale debt securities 16,900 increase
Inventory 7,300 increase
Nontrade note payable 14,400 decrease
Accounts payable 13,300 increase
Required:
Compute net cash provided by operating activities. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Answer:
Net operating cash flow $68,300
Explanation:
Operating cash flow is the amount of cash generated by a company from its main and normal business activity. This cash flow is useful to gauge the financial viability of a firm's business activity; the larger the better.
It is essentially computed as the net movement of cash inflow and outflow in respect of a business activities.
It is computed as follows:
$
Net income 49,000
Add deprecation 17,200
Less increase in receivable (11.200)
add increase in payables 13,300
Net operating cash flow 68,300
Note that only items that relate to trading which is the core business area of the Pearl Corporation are considered. Depreciation is added because it is a non-cash item initially deducted from net income.
An increase in receivable means a reduction in cash while an increase in payables implies cash savings
Net operating cash flow $68,300
Equity securities acquired by a corporation which are accounted for by recognizing unrealized holding gains or losses in the income statement are:______
a. equity method investments where a company has holdings of less than 20%.
b. trading securities where a company has holdings of less than 20%.
c. equity method securities where a company has holdings of between 20% and 50%.
d. consolidated investments where a company has holdings of more than 50%.
Answer:
a.equity method investments where a company has holding of less than 20 %