Answer:
1. Bank Reconciliation - Book Balance
Book Balance $14,211
Add: Error in Check No. 919 $9
Less: Bank Service Charge $15
Adjusted Book Balance $14,205
2. Bank Reconciliation - Bank
Bank Balance $13,671
Add: Deposit of June 30 $2,639
Less: Outstanding Checks $2,105
Adjusted Bank Balance $14,205
3. Journal Entries required.
DR Miscellaneous Expenses $15
CR Cash $15
(To record bank service charge)
DR Cash $9
CR Utilities Expense $9
(To correct error in check)
Net present value ____________________. Group of answer choices compares project cost to the present value of the project benefits is equal to zero when the discount rate used is less than the IRR is equal to the initial investment in a project is simplified by the fact that future cash flows are easy to estimate requires the firm set an arbitrary cutoff point for determining whether an investment is a good one or not
Answer:
compares project cost to the present value of the project benefits
Explanation:
Net present value is the present value of after tax cash flows from an investment less the amount invested.
A good investment is an investment that has a positive NPV. When comparing two or more projects, the project with the higher NPV should be chosen.
g "6. Financially, why would a company: (a) increase its dividend; (b) buy back some of its common stock shares; (c) pay down some of its debt; (d) increase its use of internal financing; (e) take the public firm private?"
Answer:
(a) increase its dividend;
dividends are increased for two reasons:
the company has excess cash and it doesn't have any possible investments on handthe board and upper management want to increase the stock price and higher dividends always result in higher stock prices, even if it is only in the short run.(b) buy back some of its common stock shares;
the company has excess cash and the board and upper management believe that the stock price is too low.(c) pay down some of its debt;
the company has excess cash and it considers that the cost of its debt is too high and it can get cheaper financing from other sources if needed.(d) increase its use of internal financing;
the board and upper management considers that the company needs to invest in new or existing projects and they consider that the financing costs are too high. Also, on the long run if things work well, the stock price should increase.(e) take the public firm private
the company has excess cash and the board and upper management believe that the stock price is too low. It is similar to (b) only on an extreme situation.Samsco has current after-tax operating income of $65 million and a cost of capital of 9.5%. Assume that the firm is in stable growth, growing 3% a year forever and that the reinvestment rate is 35%. What is the return on invested capital
Answer:
10%
Explanation:
Return on Invested Capital = After-tax operating income / Invested capital
After-tax operating income = 65,000,000
Invested capital = ?
Invested capital = After-tax operating income * (1 - Reinvestment rate ) / (Cost of capital - Expected growth rate)
After-tax operating income = 65,000,000
Reinvestment rate = 35%
Cost of capital = 9.5%
Expected growth rate= 3.0%
Invested capital = 65,000,000 * (1 - 35%) / (9.5% - 3%)
Invested capital = 65,000,000 * 65% / 6.5%
Invested capital = $650,000,000
Hence, Return on Invested Capital = $65,000,000 / $650,000,000
Return on Invested Capital = 0.10
Return on Invested Capital = 10%
Flippatech is a home furnishings manufacturer. It wants to form a merger with SleepzCorp, another home furnishings manufacturer. This would be a __________ merger.
Answer:
Horizontal merger
Explanation:
A horizontal merger is a merger or centralization of business that takes place between companies operating in the same industry. Rivalry generally higher between companies that operate in the same area, implying that synergies and potential market share are far stronger for companies that merge
Therefore for the given case since one same industry wants to merge with the same kind of industry that shows the horizontal merger
Westover Winds just paid a dividend of $2.10 per share. The company will increase its dividend by 8 percent next year and will then reduce its dividend growth rate by 2 percentage points per year until it reaches the industry average of 2 percent dividend growth, after which the company will keep a constant growth rate forever. What is the price of this stock today given a required return of 11 percent?
Answer:
Price today = $26.54
Explanation:
The price of the stock can be calculated using the Dividend Discount Model (DDM). The DDM values the stock based on the present value of the expected future dividends from the stock.
The formula to calculate the price of the stock is attached.
Price today = 2.1 * (1+0.08) / (1+0.11) + 2.1 * (1+0.08) * (1+0.06) / (1+0.11)^2 +
2.1 * (1+0.08) * (1+0.06) * (1+0.04) / (1+0.11)^3 +
[(2.1 * (1+0.08) * (1+0.06) * (1+0.04) * (1+0.02)) / (0.11 - 0.02)] / (1+0.11)^3
Price today = $26.54
A customer has heard about the explosive growth in China and wants to make investments in Chinese companies. Which risk is NOT associated with this potential investment
Answer:
None
Explanation:
Remember, every investment of such type fall under this risks. As customer seeking to invest in a foreign market (China), there's always a risk, such as marketability risks, political risk etc.
Therefore, since there were no options listed we can assure this opinion.
A company issued 8%, 15-year bonds with a par value of $550,000 that pay interest semiannually. The market rate on the date of issuance was 8%. The journal entry to record each semiannual interest payment is:
Answer:
Debit Credit
Bond Interest Expense $22,000
Cash $22,000
Being semi-annual interest payment on bonds
Explanation:
The semi-interest payment on the bonds equals
Coupon rate × par Value × 1/2
Semi-annual interest payment = 8%× 550,000 × 1/2=22,000
Semi- annual payment = $22,000
The accounting entry to record the interest payment each time payment is made would be:
Debit Credit
Bond Interest Expense $22,000
Cash $22,000
Being semi-annual interest payment on bonds
Note that interest payment is an expense, hence to increase an expense the expense account is debit. On the other hand. the interest payment is a cash outflow, which reduces the cash asset, hence the cash account is credited.
Elin owes Floyd $10,000. Floyd assigns the claim to Gary. Gary does not notify Elin of the assignment. A week later, Floyd assigns the same claim to Holly. Holly immediately notifies Elin of the assignment. Holly has Group of answer choices priority to payment in all states. priority to payment in states that follow the English rule. no priority to payment. priority to payment in most states.
Answer: priority to payment in states that follow the English rule
Explanation:
From the question, we are told that Elin owes Floyd $10,000 but Floyd assigns the claim to Gary and that Gary does not notify Elin of the assignment.
A week later, Floyd assigns the same claim to Holly. Holly immediately notifies Elin of the assignment. Holly has priority to payment in states that follow the English rule.
Holly has priority claim because Holly has already notified Elin of the task before and therefore has priority to payment in states that follow the English rule.
Option B is correct
Identifying time lags Advocates of active policy face several obstacles when implementing discretionary fiscal or monetary policy, such as identifying the economy's potential output level, the natural rate of unemployment, and the effects of a passive approach. Policymakers must also cope with a multitude of time lags that complicate the implementation of active policy. Identify the type of time lag illustrated in the following scenario:
Policymakers believe that the economy is experiencing a recession, and they have agreed on the need for expansionary monetary policy. However, some economists suggest dropping the federal funds rate by 0.25%, while others think it needs to be decreased by 0.75%.
a. Effectiveness lag
b. Recognition lag
c. Implementation lag
d. Decision-making lag
Answer: d. Decision-making lag
Explanation:
When policy makers have identified that there is a problem that needs fixing but cannot seem to agree on the way forward, this is known as a Decision - Making Lag or simply the Decision Lag. It is one of the 3 specific inside Policy Lags and can be devastating due to the uncertainty of time it might take.
For instance, the economists suggesting dropping the federal funds rate by 0.25% might have the backing of one half of the Fed and the other Economists, the other half. Arguments could therefore go on for weeks before a decision is made.
Consolidated net income may include the parent's separate operating income plus the parent's share of the subsidiary's reported net income plus/ minus: ________
a. the unrealized profit on upstream intercompany sales of inventory made during the current year.
b. the profit realized this year from upstream intercompany sales of inventory made last year.
c. unrealized profit on downstream intercompany sales of inventory made during the current year.
d. the parent's share of profit realized this year from upstream intercompany sales of inventory made last year.
Answer:
b. the profit realized this year from upstream intercompany sales of inventory made last year
Explanation:
Consolidated net income can be defined as the amount of the net income of the parent company and it has well exclude any of the income from the subsidiaries that was recognized in its individual financial statements in addition with the net income of its subsidiaries that was determined after excluding unrealized gain in inventories as well as the income from the intra-group transactions which is why CONSOLIDATED NET INCOME is often reported on the consolidated income statement for periods after the acquisition has occured.
Therefore CONSOLIDATED NET INCOME may tend to include the parent's separate operating income in addition with the parent's share of the subsidiary's reported net income plus/ minus the profit that was realized this year from the upstream intercompany sales of the inventory that was made last year
A 10% coupon bond, $1,000 par value, annual payments, 10 years to maturity is callable in 3 years at a call price of $1,100. If the bond is selling today for $975, the yield to call is _________.
Answer:
13.98%.
FV = 1100, n = 3, PMT = 100, PV = -975, i = 13.98%.
"Bellue Inc. manufactures a single product. Variable costing net operating income was $93,400 last year and its inventory decreased by 2,300 units. Fixed manufacturing overhead cost was $1 per unit for both units in beginning and in ending inventory. What was the absorption costing net operating income last year?"
Answer:
The answer is $91,000
Explanation:
Solution
Given that:
Net Operating Income as per Variable Costing = $93,400
Less: Fixed manufacturing overhead released from Inventory (2300*$1)= $2300
Net Operating Income as per Absorption costing = $91,000
Hence Net operating income in absorption costing is $ 91,000
The difference in Net operating Income which is under the variable costing technique & Absorption costing method is due to treatment of Fixed manufacturing overhead.
Difference can be reconcile using following below:
Criteria Operating Income higher in
Ending Inventory is higher than beginning Inventory Absorption costing
Ending Inventory is lesser than beginning Inventory Variable costing
So,
The inventory reduced by 2,300 units; implies that Ending inventory is lesser than Beginning Inventory, the Net operating income higher in Variable costing.
In November, one of the processing departments at Goodsell Corporation had beginning work in process inventory of $36,000 and ending work in process inventory of $35,000. During the month, $427,000 of costs were added to production and the cost of units transferred out from the department was $428,000. The company uses the FIFO method in its process costing system. In the department's cost reconciliation report for November, the total cost to be accounted for would be:__________.a) $890,000b) $71,000c) $463,000d) $926,000
Answer:
c) $463,000
Explanation:
Goodsell Corporation
FIFO Method
Current Costs
Costs Added $ 427,000
Add Beginning Work in Process Inventory $36,000
Total Current Cost $ 463,000
Cost Transferred Out $ 428,000
Add Ending Work in Process Inventory $35,000
Total Current Cost $ 463,000
FIFO assigns the current period costs to the inventories. Current period costs are obtained by adding the costs transferred out and ending inventories costs or beginning costs and costs added.
When the Fed acts as a "lender of last resort," like it did in the financial crisis of 2007-2008, it is performing its role of
Answer:
The answer is Banker's bank
Explanation:
The Fed is performing its role as a banker's bank. The Fed is the U.S or the central bank in most countries are referred to banker's bank. It acts a commercial bank for all banks in the country.
Commercial banks in all countries have an account with the central bank. Commercial banks also have access to very short-term loans when it is in the distress. Banker's bank(The Fed) has the sole authority for the money supply in the economy.
EFT a.means effective funds transfer b.makes it easier to document purchase and sale transactions c.can process certain cash transactions at less cost than using the mail would incur d.means efficient funds transfer
Answer:
b. makes it easier to document purchase and sale transactions
Explanation:
EFT means Electronic Funds Transfer and it is when money is moved using computer systems between accounts that can be from one or more banks. EFT includes transactions like direct payments, deposits, transfers on ATMs, bill payments using online banking, among others. According to this, the answer is that EFT makes it easier to document purchase and sale transactions because these transactions are made electronically and you always have evidence of the actions made like deposits and transfers and it makes it possible to monitor the purchases and sales made.
The other options are not right because EFT means Electronic Funds Transfer and it doesn't involve cash transactions.
When Joe was working in finance, he bought all of his suits at Macy’s, a department store. Once Macy’s finds out about Joe’s plans to return to business school, what customer-centric approach would Professor Fader recommend that Macy’s takes with Joe?
Answer:
Show Joe that he's still important to them by extending a store discount to him that will apply during his time as a student.
Explanation:
Customer-centric approach is a business strategy in which the focus in on customer demand. The customer is given special attention by the organization to help them retain a long term relationship with the business. In such approach customer is put at core of business. This helps organization to better understand customer needs and fulfill them so the customer remains loyal to them. Macy is also focusing on Joe and has expressed that he is an important person. She is supporting her views by offering Joe extension in discounts that were applicable to him as a student.
The cash flow statement should be evaluated by examining the cash flow pattern suggested by the:__________
a) subtotals of each of the three main sections.
b) operating activities section since this section details the day to day operations of the business.
c) change in cash regardless of which section had the biggest impact on the change.
d) financing section since this section details how much debt the company has incurred
Answer:
a) subtotals of each of the three main sections.
Explanation:
A cash flow statement is a representation of the cash inflows and outflows from various activities in a business. The three main sources of cash flow are operating activities, investing activities, and financing activities.
Operating activities include daily production activities that a business usually engages in like manufacturing or selling.
Financing activities are those that affect the capital base of the organisation.
Investing activities are those that involve purchase or sale of assets, and investment in securities.
To get a better knowledge of the cash flow of the organisation we will need to evaluate subtotals of each of these three sections
A stock has an expected return of 12.6 percent, the risk-free rate is 7 percent, and the market risk premium is 10 percent. What must the beta of this stock be
Answer:
0.56
Explanation:
In this question we used the Capital Asset Pricing Model formula i.e shown below:
As we know that
Expected rate of return = Risk free rate of return + Beta × market risk premium
12.6% = 7% + Beta × 10%
12.6% - 7% = Beta × 10%
5.6% = Beta × 10%
So, the beta is
= 5.6% ÷ 10%
= 0.56
Hence, the beta of the stock is 0.56
On Oct. 14, Sheffield Company discounted at Sunshine Bank a $9,000 (maturity value), 113-day note dated July 13. Sunshine’s discount rate was 11%.
Required:
What proceeds did Sheffield Company receive?
Answer: $8,945
Explanation:
Number of days that have passed since Note was issued is;
18 days in July
31 days in August
30 Days in September, and
14 days in October
= 18 + 31 + 30 + 14
= 93 days
93 days have already elapsed out of the 113 so days left is;
= 113 - 93
= 20 days
Assuming a 360 day Calender, Sheffield Company will receive;
= Maturity level - Discount Amount
= 9,000 - (9,000 * 11% * 20/360)
= 9,000 - 55
= $8,945
Sheffield would will get $8,945 of proceeds to represent that 20 days are still left of the note till it matures and so need to be discounted from the maturity value.
What are the three major components of DSSs, and what do they do? How do DSSs help in tax planning? How do DSSs help in website planning and adjustment? Please state your answers in 2-3 page paper in APA format. Include citations and sources in APA style.
Answer is given below
Explanation:
Most of the DSS consists of three main components: the Data Management Module, the Model Management Module and the Dialogue Module. These modules help (1) file the request in a user-friendly way, (2) find large amounts of data to focus on relevant facts, (3) process the data through the desired model, and (4) the results. Output in one or several formats is easy to understand. These steps follow the decisive sequence described by Herbert Simon. There are actually some applications that people don't think of as DSS. Turbotax, taxcats and other tax-making applications have been developed over the years to do more than just fill out help forms. With the ultimate goal of paying taxpayers, they come up with sophisticated principles to help taxpayers create the best strategy for choosing options. For example, applications compare filing status and deduction options: which policy is less common taxes, filing as two individuals or filing jointly as spouses? Should deductions be reduced, or standard exemptions taken? Small education loan, or large education exemption? Based on the combination of taxable income and deductions taken, the apps warn customers of the possibility of being audited by the Internal Revenue Service and give them the opportunity to modify the deduction. Apps remind users of optional reductions, tell them what the exception does and make it easier for filers to make decisions. When customers complete their tax preparation for the previous year, they can plan their tax for the coming year based on their total income, type of wages (wages, occupation, capital gains, etc.). And how much the pension funds, which serve as a tax to reduce tax arrears for the coming year, can contribute to earnings and other benefits as most companies use the web as a marketing, sales and customer support tool, the decisions to make websites are very important. Some companies offer DSS designed specifically to analyze the behavior of shoppers on their sites, such as pages viewed, pages viewed, options clicked and page buyers sorted. For example, Datanatics, Inc. The G2 provides an analysis system that analyzes how visitors navigate through a site. Managers can be impressed that 30 percent of shoppers who follow a specific order of web pages are buying an item. However, the software may reveal that another unexpected upside order ends when 90 percent of shoppers buy another item. This can lead to the decision to increase those pages or buy a few pages between the home page and the last page before finishing.You expect to receive year-end bonuses of $8,000 at the end of this year, $16,000 at the end of year 4, $20,000 at the end of year 8, and $25,000 at the end of year 10. If your opportunity cost is 6%, what is the present value today of your expected future bonuses?
Answer:
Total PV= $46,728.79
Explanation:
Giving the following information:
Cash flow:
Cf1= $8,000
Cf4= $16,000
Cf8= $20,000
Cf10= $25,000
Discount rate= 6%
To calculate the present value, we need to use the following formula on each cash flow:
PV= FV/(1+i)^n
Cf1= 8,000/(1.06^1)= 7,547.17
Cf4= 16,000/(1.06^4)= 12,673.50
Cf8= 20,000/(1.06^8)= 12,548.25
Cf10= 25,000/(1.06^10)= 13,959.87
Total PV= $46,728.79
Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $30,000 and has cash on hand of $20,000 contributed by Lanni's owners. Lanni takes out a bank loan. It receives $50,000 in cash and signs a note promising to pay back the loan over 3 years.
Required:
a. Prepare the balance sheet just after it gets the bank loan.
b. What is the ratio of real assets to total assets?
c. Prepare the balance sheet after Lanni spends the $70,000 to develop its software product.
Answer:
a. Liabilities Assets
Bank loan $50,000 Cash $70,000
Shareholders' equity $50,000 Computers $30,000
Total= $100,000 $100,000
b. Real assets= $30,000, Total assets= $100,000
Ratio of real assets to total assets = $30,000 / $100,000
Ratio of real assets to total assets = 0.3
Ratio of real assets to total assets =30%
c. After Lanni spends the $70,000 to develop its software product.
Liabilities Assets
Bank loan $50,000 Software product $70,000
Shareholders' equity $50,000 Computers $30,000
Total= $100,000 $100,000
Sprint allocates general plant management costs on the basis of the number of production employees and plant security costs on the basis of space occupied by the production departments. In November, the following overhead costs were recorded:
Melting Department direct overhead $110,000
Molding Department direct overhead 400,000
General plant management 100,000
Plant security 50,000
Other pertinent data follow:
Melting Molding
Number of employees 35 40
Space occupied (square feet) 10,000 20,000
Machine hours 10,000 2,000
Direct labor hours 4,000 20,000
Required:
a. Prepare a schedule allocating general plant management costs and plant security costs to the Melting and Molding Departments.
b. Determine the total departmental overhead costs for the Melting and Molding Departments.
Answer:
a.
General Plant Management Costs
Cost is $100,000
These costs are allocated on the basis of number of production employees.
Melting Department employs 35 workers and Molding employs 40 for a total of 75.
Melting Department = [tex]\frac{35}{75} * 100,000[/tex]
Melting Department = $46,666,67
Molding Department = [tex]\frac{40}{75} * 100,000[/tex]
Molding Department = $53,333.33
Plant Security Costs
Cost is $50,000
These costs are allocated on the basis of space occupied by the production departments.
Melting Department occupies 10,000ft² and Molding occupies 20,000 ft² for a total of 30,000 ft²
Melting Department = [tex]\frac{10,000}{30,000} * 50,000[/tex]
Melting Department = $16,666,67
Molding Department = [tex]\frac{20,000}{30,000} * 50,000[/tex]
Molding Department = $33,333.33
2. Melting Department
= 110.000 + 46,666.67 + 16,666.67
= $173,333.34
Molding Department
= 400,000 + 53,333.33 + 33,333.33
= $486,666.66
Timberline Associates uses the weighted-average method in its process costing system. The following data are for the first processing department for a recent month:
Work in process, beginning:
Units in process 2,400
Percent complete with respect to materials 75%
Percent complete with respect to conversion 50%
Costs in the beginning inventory:
Materials cost $8,400
Conversion cost $7,200
Units started into production during the month 20,800
Units completed and transferred out 22,200
Costs added to production during the month:
Materials cost $97,400
Conversion cost $129,600
Work in process, ending:
Units in process 1,000
Percent complete with respect to materials 80%
Percent complete with respect to conversion 60%
Required:
A. Determine the equivalent units of production.
B. Determine the costs per equivalent unit.
C. Determine the cost of ending work in process inventory.
D. Determine the cost of the units transferred to the next department.
Cold Chiller Corporation (CCC) has annual sales of $10 million, cost of goods sold of 60 percent, average age of inventory of 80 days, average collection period of 35 days, average payment period of 30 days, and purchases that are 60 percent of cost of goods sold. How much does CCC have invested in its cash conversion cycle assuming a 365-day year?
Answer:
Cold Chiller Corporation (CCC)
Investment in cash conversion cycle:
= $10 million x 60% = $6million
which is invested for 145 (80 + 35 + 30) days before being realized as cash.
Explanation:
The cash conversion cycle (CCC) is a metric that expresses the time (measured in days) it takes for a company to convert its investments in inventory and other resources into cash flows from sales. It gives us an indication as to how long it takes a company to collect cash from sales of inventory. Often a company will finance its inventory instead of paying for it with cash up front.
The formula for the Cash Conversion Cycle is:
CCC = Days of Sales Outstanding PLUS Days of Inventory Outstanding MINUS Days of Payables Outstanding.
CCC = DSO + DIO – DPO.
Days of Sales outstanding:
DSO = [(Beginning Accounts Receivable + Ending Account Receivable) / 2] / (Revenue / 365)
Days of Inventory Outstanding:
DIO = [(Beginning Inventory + Ending Inventory / 2)] / (COGS / 365)
Operating Cycle = DSO + DIO.
Days of Payables Outstanding:
DPO = [(Beginning Accounts Payable +Ending Accounts Payable) / 2] / (COGS / 365)
Tyrell recently noticed that he was receiving several catalogs and direct mail advertisements than he had in the past even though he had not requested any of them. Which of the following best explains why this is happening?
A. Tyrell was a victim of online theft.
B. Tyrell gave his personal information to a business, which then traded it to other companies and these companies then began sending him catalogs.
C. All businesses routinely have all customers' personal information.
D. Tyrell's accountant gave his information to the direct mail marketers.
Answer:
B.
Explanation:
In this particular scenario, the most likely occurrence is that Tyrell gave his personal information to a business, which then traded it to other companies and these companies then began sending him catalogs. Most companies online tend to gather as much private information from their customers and eventually sell that information to larger corporations that use it in order to increase their sales. This is done in many forms such as finding out what a client population likes and dislikes, how much money they spend, day to day activities, etc. All this information allows corporations to target specific individuals, and advertise directly to them in order to make sales.
An employee receives an hourly rate of $25, with time and a half for all hours worked in excess of 40 during a week. Payroll data for the current week are as follows: hours worked, 43; federal income tax withheld, $328; cumulative earnings for year prior to current week, $97,324; social security tax rate, 6.0% on maximum of $104,563; and Medicare tax rate, 1.5% on all earnings. What is the gross pay for the employee?
Answer:
Gross pay = $1,112.5
Explanation:
Basic Pay = Hours worked x hourly rate
Basic Pay = 40 x 25
Basic Pay = $1000
Overtime Pay = Overtime hours x (hourly rate x half of hourly rate)
Overtime Pay = 3 x ( 25 x 1.5)
Overtime Pay = $112.5
Gross Pay = Basic pay + Overtime Pay
Gross pay = $1,000 + 112.5
Gross pay = $1,112.5
When the market rate of interest was 12%, Halprin Corporation issued $257,000, 11%, 10-year bonds that pay interest annually. Use the present value tables below. The selling price of this bond issue was?
Answer:
$242,478
Explanation:
The computation of the selling price of this bond issue is shown below:-
Issue price of bonds = Present value of interest + Present value of maturity payment
= ($257,000 × 11% × 5.65022) + ($257,000 × 0.32197)
= $159,731.72 + $82,746.29
= $242,478.01
or
= $242,478
Therefore for computing the issue price of bonds we simply applied the above formula.
a company has net working capital of 661. long term debt is $4024, total assets are $6,129, and fixed assets are $3,894. what is the amount of total liabilities
Answer:
$5,598
Explanation:
The computation is shown below:
As we know that
Total assets = fixed assets + current assets
$6,129 = $3,894 + current assets
The current asset is $2,235
Now
net working capital = Current asset - current liabilities
$661 = $2,235 - current liabilities
So, the current liabilities is $1,574
Now the total liabilities is
= Current liabilities + long term liabilities
= $1,574 + $4,024
= $5,598
Hence, the total liabilities is $5,598
A company can produce a product the first time at a cost of $2,500. If its 85 percent learning curve allows the company to reduce its costs on each product, what is the total cost of producing 400 units of the new product? _________________
Answer:
319,000
Explanation:
Based on information identified from the complete source question, a table showing the 85% learning curve indicating that the first unit costs $1, and it shows that the cumulative cost to produce 400 units is $127.60.
So, in this situation where the first unit cost $2,500, logically we would expect the total cost for four hundred units to be $2,500 * 127.60 = $319,000