Answer:
cost leadership
Explanation:
Here are the options to this question :
Group of answer choices
reengineering
cost leadership
production innovations
efficient labor
A cost leader sells at a lower price when compared to its competitors
Indiana Co. began a construction project in 2018 with a contract price of $161 million to be received when the project is completed in 2020. During 2018, Indiana incurred $33 million of costs and estimates an additional $89 million of costs to complete the project. Indiana recognizes revenue over time and for this project recognizes revenue over time according to the percentage of the project that has been completed. Suppose that, in 2019, Indiana incurred additional costs of $66 million and estimated an additional $53 million in costs to complete the project. Indiana:________
a. Recognized $3.75 million loss on the project in 2022.
b. Recognized $5.25 million gross profit on the project in 2022.
c. Recognized $7.5 million gross profit on the project in 2022.
d. Recognized $1.5 million loss on the project in 2022.
Answer:
Recognized $3.75 million loss on the project in 2017.
Explanation:
Calculation for what Indiana Co. Recognized
First step is to calculate the Percentage of contract is completed in 2019
Percentage of contract is completed in 2019=($33 million+$66 million )/($33 million+$66 million + $53 million)
Percentage of contract is completed in 2019=$96 million/$149 million
Percentage of contract is completed in 2019=0.64429*100
Percentage of contract is completed in 2019=64.43%
Second step is to calculate The estimated gross profit
Estimated gross profit=$161 million-$149 million
Estimated gross profit=$12 million
Fourth step is to calculate gross profit to date
Gross profit to date=64.43%*161=103.7
gross profit to date=33 million / (33 + 89 million) * 161 million
gross profit to date=33 million/122 million* 161 million
gross profit to date=43.54
= $44.01 million in revenue in 2021 (4)
Now let calculate the amount recognized
You purchased a 5-year, 6% annual-coupon bond with $1,000 par value. The yield to maturity at the time of purchase was 4%. You sold the bond after one year, right after receiving the first coupon payment. The bond's yield to maturity was 3.4% when you sold it. What is your holding period return on the bond
Answer:
6.12%
Explanation:
the market value of the bond when you purchased it was:
PV of face value = $1,000 / 1.04⁵ = $821.93
PV of coupon payments = $60 x 4.4518 (PV annuity factor, 4%, 5 periods) = $267.11
initial investment = $1,089.04
after 1 year, you receive $60 +
PV of face value = $1,000 / 1.034⁴ = $874.82
PV of coupon payments = $60 x 3.6818 (PV annuity factor, 3.4%, 4 periods) = $220.91
market price = $1,095.73
total holding return = ($1,095.73 + $60 - $1,089.04) / $1,089.04 = 6.12%
Transactions that affect earnings do not necessarily affect cash. Identify the effect, if any, that each of the following transactions would have upon cash and net income. The first transaction has been completed as an example. (If an amount reduces the account balance then enter with negative sign preceding the number e.g. -15,000 or parentheses e.g. (15,000).)
Required:
a. Purchased $133 of supplies for cash.
b. Recorded an adjusting entry to record use of $31 of the above supplies.
c. Made sales of $1,297, all on account.
d. Received $865 from customers in payment of their accounts.
e. Purchased equipment for cash, $2,528.
f. Recorded depreciation of building for period used, $610.
Solution :
Required :
Items Cash Net Income
a). Supplies of $133 purchased for cash - $ 133 --
b). Recorded the adjustment entry so as to
record use the $31 for the above supplies -- $ 31
c). Made sales of the $ 1297 on account -- $ 1,297
d). $865 received from customers as payment
of accounts $ 865 --
e). $ 2,528 purchased the equipment for cash - $ 2, 528 --
f). Recorded the depreciation of the building
for the period use of $ 610 -- $ 610
Oriole Company, organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020.
1/2/20 Purchased patent (7-year life) $311,500
4/1/20 Purchase goodwill (indefinite life) 355,000
7/1/20 Purchased franchise with 10-year life; expiration date 7/1/30 435,000
8/1/20 Payment of copyright (5-year life) 162,000
9/1/20 Research and development costs 225,000
$1,488,500
Required:
1. Prepare the necessary entry to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles.
2. Make the entry as of December 31, 2020, recording any necessary amortization.
3. Reflect all balances accurately as of December 31, 2020.
Answer:
Oriole Company
a. Journal Entries:
1. December 31, 2020:
Accounts Titles Debit Credit
Patent $311,500
Goodwill 355,000
Franchise 435,000
Copyright 162,000
R & D expense 225,000
Intangibles $1,488,500
To transfer out to individual intangible accounts.
2. Amortization Expense:
Accounts Titles Debit Credit
Debit Amortization Expenses:
Patent $44,500
Franchise $21,750
Copyright $13,500
Accumulated amortization $79,950
To record amortization expense for the year.
3. December 31, 2020 balances:
December 31, 2020 Balances:
Book Value Amortization Expense Net Book Balance
Patent $311,500 $44,500 $267,000
Goodwill 355,000 $0 $355,000
Franchise 435,000 $21,750 $413,250
Copyright 162,000 $13,500 $148,500
R & D expense 225,000 $225,000 $0
Explanation:
a) Data and Calculations:
1/2/20 Purchased patent (7-year life) $311,500
4/1/20 Purchase goodwill (indefinite life) 355,000
7/1/20 Purchased franchise with 10-year life; expiration date 7/1/30 435,000
8/1/20 Payment of copyright (5-year life) 162,000
9/1/20 Research and development costs 225,000
$1,488,500
Amortization Expenses:
Patent = $44,500 ($311,500/7)
Goodwill = $0
Franchise = $21,750 ($435,000/10 * 6/12)
Copyright = $13,500 ($162,000/5 * 5/12)
Total = $79,950
December 31, 2020 Balances:
Book Value Amortization Expense Net Book Balance
Patent $311,500 $44,500 $267,000
Goodwill 355,000 $0 $355,000
Franchise 435,000 $21,750 $413,250
Copyright 162,000 $13,500 $148,500
R & D expense 225,000 $225,000 $0
The following transactions for the month of March have been journalized and posted to the proper accounts. Mar. 1 The business received a $9,000 cash contribution from the owner. Mar. 2 Paid the first month's rent of $600. Mar. 3 Purchased equipment by paying $4,000 cash and executing a note payable for $5,000. Mar. 4 Purchased office supplies for $600 cash. Mar. 5 Billed a client for $10,000 of design services completed. Mar. 6 Received $8,000 on account for the services previously recorded. What is the balance in Accounts Receivable
Answer:
$2,000
Explanation:
Calculation for What is the balance in Accounts Receivable
Credit sales $10,000
Less : Collection ($8,000)
Account receivable $2,000
Therefore the balance in Accounts Receivable will be $2,000
Assume General Electric Company reports the following footnote in its 10-K report. December 31 (In millions) 2016 2015 Raw materials and work in process $ 5,527 $ 5,042 Finished goods 5,152 4,806 Unbilled shipments 333 402 11,012 10,250 Less revaluation to LIFO (697) (661) $10,315 $ 9,589 The company reports its inventories using the LIFO inventory costing method. Assume GE has a 35% income tax rate. As of the 2016 year-end, how much has GE saved in taxes by choosing LIFO over FIFO method for costing inventory
Answer:
$ 244 million
Explanation:
Calculation for how much has GE saved in taxes by choosing LIFO over FIFO method for costing inventory
Tax rate Amount (In millions)
LIFO $ 10,315.00 35% =$ 3,610.25
FIFO $ 11,012.00 35% =$ 3,854.20
Savings in taxes $ (697.00) $ (243.95)
Hence,
Savings in taxes=$ 3,610.25 million-$ 3,854.20 million
Savings in taxes=($243.95 million)
Savings in taxes=($ 244 million) Approximately
Therefore the amount that GE saved in taxes by choosing LIFO over FIFO method for costing inventory will be $ 244 million
You discover that your supervisor/team leader stole a password and she has been secretly logging into the computer of another team leader to get information about their team’s funding sources. She is aware that you caught her and tells you that this information has helped your team stay competitive and get ahead. She prefers that you keep her secret. How would you handle this situation?
Answer:
I would probably tell him/her that I wouldn't really keep it a secret if she keeps doing the same things over and OVER again the first time I would keep it a secret though if she does it again I'll have to tell someone right away.
Explanation:
Summary of opportunity cost
On January 1, 2021, Essence Communications issued $800,000 of its 10-year, 8% bonds for $700,302. The bonds were priced to yield 10%. Interest is payable semiannually on June 30 and December 31. Essence Communications records interest at the effective rate and elected the option to report these bonds at their fair value. On December 31, 2021, the market interest rate for bonds of similar risk and maturity was 9%. The bonds are not traded on an active exchange. The decrease in the market interest rate was due to a 1% decrease in general (risk-free) interest rates.
Required:
a. Using the information provided, estimate the fair value of the bonds at December 31, 2021.
b. Prepare the journal entry to record interest on June 30, 2021 (the first interest payment).
c. Prepare the journal entry to record interest on December 31, 2021 (the second interest payment).
d. Prepare the journal entry to adjust the bonds to their fair value for presentation in the December 31, 2021, balance sheet.
Answer:
A)
before decrease in rates: 706,483
after rate decrease: 751,360
B)
interest expense 35,015.12
discount on BP 3,015.12
cash 32,000
--bonds first interest payment--
C)
interest expense 35,165.87
discount on BP 3,165.87
cash 32,000
--second interest payment--
D)
unrealized loss 44,877
discount on bonds payable 44,877
--to adjust bonds valuation--
Explanation:
First, we solve for the present value of the bond to get the proceeds from the issuance.
[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
C 32,000
time 20
rate 0.05
[tex]32000 \times \frac{1-(1+0.05)^{-20} }{0.05} = PV\\[/tex]
PV $398,790.7310
[tex]\frac{Maturity}{(1 + rate)^{time} } = PV[/tex]
Maturity 800,000.00
time 20.00
rate 0.05
[tex]\frac{800000}{(1 + 0.05)^{20} } = PV[/tex]
PV 301,511.59
PV c $398,790.7310
PV m $301,511.5863
Total $700,302.3173
Now, we do the table for the first year:
# / Principal/ paid / interest / Amort/End. P
1 700,302 32000 35015.12 3015.12 703,317
2 703,317 32000 35165.87 3165.87 706,483
Now, we have to redo the calculations for the bonds market value considering a decrease in the market rate to 9%
[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
C 32,000
time 18
rate 0.045
[tex]32000 \times \frac{1-(1+0.045)^{-18} }{0.045} = PV\\[/tex]
PV $389,119.7377
[tex]\frac{Maturity}{(1 + rate)^{time} } = PV[/tex]
Maturity 800,000.00
time 18.00
rate 0.045
[tex]\frac{800000}{(1 + 0.045)^{18} } = PV[/tex]
PV 362,240.30
PV c $389,119.7377
PV m $362,240.2951
Total $751,360.0328
We adjust for: 751,360 - 706,483 = 44,877
This will be an unrealized loss as the liability increases but, will be realized on the redemption of the bonds or at the end of the bonds' life.
Use the following Year 3 data: Other Selling and Administrative Expenses $ 1,052,000 Other Expenses 249,300 Sales Revenue 4,887,000 Advertising and Promotion Expenses 553,350 Salaries and Wages Expense 2,527,800 Income Tax Expense 167,350 Interest Expense 114,750 Required: Prepare the annual income statement for Kvass, Inc.
Answer:
$222,450
Explanation:
Computation of annual income statement for Kvass Inc. is shown below
Sales revenue
$4,887,000
Less:
Selling and admn expenses
($1,052,000)
Other expenses
($249,300)
Advertising and promotion expenses
($553,350)
Salaries and wages expenses
($2,527,800)
Income tax expenses
($167,350)
Interest expense
($114,750)
Net income
$222,450
The Pioneer Company has provided the following account balances: Cash $39,800; Short-term investments $5,800; Accounts receivable $7,800; Supplies $57,000; Long-term notes receivable $3,800; Equipment $105,000; Factory Building $198,000; Intangible assets $7,800; Accounts payable $28,200; Accrued liabilities payable $3,100; Short-term notes payable $17,600; Long-term notes payable $101,000; Common stock $198,000; Retained earnings $77,100. What are Pioneer's total current assets
Answer:
Pioneer's total current assets are $110,400.
Explanation:
Pioneer's total current assets can be calculated using the following formula:
Current assets = Cash + Short-term investments + Accounts receivable + Supplies ............... (1)
Where;
Cash = $39,800
Short-term investments = $5,800
Accounts receivable = $7,800
Supplies = $57,000
Substituting the values into equation (1), we have:
Current assets = $39,800 + $5,800 + $7,800 + $57,000 = $110,400
Adidea Corp. regularly buys merchandise from vendors. It just purchased 1,000 units on credit from one of its vendors. How will the company record this transaction?
The company will record the purchase as a debit to the inventory account and a credit to the ________ account.
Answer:
Vendor's account/ accounts payable
Explanation:
Merchandise is an asset to the company. An increase in assets is debited to that particular merchandise or inventory account.
Since the merchandise was bought on credit, liabilities will increase. An increase in liabilities is credited to the specific vendor's account who supplied the goods on credit.
Longmire & Sons made sales on credit to Alderman Sports totaling $500,000 on April 18. The cost of the goods sold is $400,000. Longmire estimates 3% of its sales to Alderman may be returned. On May 22, $9,000 worth of goods (with a cost of $7,200) are returned by Alderman. Assume Longmire uses a perpetual inventory system.
Required:
Prepare the related journal entries for Longmire & Sons.
Answer:
April 18
Dr Account receivable 500,000
Cr Cash 500,000
April 18
Dr Cost of goods sold 400,000
Cr Merchandize inventory 400,000
May 22
Dr Sales return and allowance 9,000
Cr Account receivable 9,000
May 22
Dr Merchandize inventory 7,200
Cr Cost of goods sold 7,200
Explanation:
Preparation of the related journal entries for Longmire & Sons.
Based on the information given the related journal entries for Longmire & Sons will be :
April 18
Dr Account receivable 500,000
Cr Cash 500,000
(Being to record credit sales)
April 18
Dr Cost of goods sold 400,000
Cr Merchandize inventory 400,000
(Being to Record cost of goods sold)
May 22
Dr Sales return and allowance 9,000
Cr Account receivable 9,000
(Being to record goods return)
May 22
Dr Merchandize inventory 7,200
Cr Cost of goods sold 7,200
(Being to Record cost of goods return)
Beta Alpha Psi, the accounting honorary fraternity, held a homecoming party. The fraternity expected attendance of 80 persons and prepared the following budget: Room rental .. $ 170 Food ....... 660 Entertainment .. 570 Decorations ... 210 Total ...... $1,610 After Beta Alpha Psi paid all the bills for the party, the total cost came to $1,885 or $275 over budget. Details are $170 for room rental; $875 for food; $570 for entertainment; and $270 for decorations. Ninety-six persons attended the party. 1. Prepare a performance report for the party that shows how actual costs differed from the budget. That is, include in your report the budgeted amounts, actual amounts, and variances. 2. Suppose the fraternity uses a management-by-exception rule. Which costs deserve further examination
Answer:
Beta Alpha Psi
1. Performance Report for the party:
Budget Actual Variance
Expected attendance (persons) 80 96 16
Room rental .. $ 170 $170 $0
Food ....... 660 875 $215 U
Entertainment .. 570 570 $0
Decorations ... 210 270 $60 U
Total ...... $1,610 $1,885 $275 U
2. The costs that deserve further examination are Food and Decorations. The party overspent on these items.
Explanation:
Since 96 persons attended the party, the food cost should have been = $792 ($660/80 * 96), which is the flexible budget cost. The cost of decorations should have remained $210 unless there were improper estimates of the items required for the decorations and the size of the party venue.
Tirri Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 7.50 Direct labor $ 3.85 Variable manufacturing overhead $ 1.55 Fixed manufacturing overhead $ 24,400 Sales commissions $ 1.05 Variable administrative expense $ 0.60 Fixed selling and administrative expense $ 8,800 If the selling price is $28.10 per unit, the contribution margin per unit sold is closest to:
Answer:
$13.55
Explanation:
The contribution margin per unit is computed as;
= Selling price - (Direct materials + Direct labor + Variable manufacturing overhead + Sales commission + Variable administrative expense)
= $28.10 - ($7.50 + $3.85 + $1.55 + $1.05 + $0.60)
= $28.10 - $14.55
= $13.55
Therefore , the contribution margin per unit is $13.55
The Package Store hires workers to wrap packages. The store sells this service for $5. The marginal revenue product of this store's fifth worker is $50. The marginal product of the fifth worker is A) 0.01 package. B) 1 package. C) 10 packages. D) indeterminate from this information
Answer: 10 packages
Explanation:
Marginal revenue (MR) is defined as an increase in the revenue that a company makes which is gotten from an additional sale that is made from a unit of output.
The marginal product of the fifth worker will be calculated as:
= Marginal Revenue Product / Price
= 50/5
= 10
You are writing a report on the effectiveness of upper-management meetings in your company. Your first step is to determine whether to conduct an interview, carry out an observation, or administer a survey. You decide to observe one or two meetings to obtain primary data. You arrive late for the first meeting and walk into the room unannounced. What observation rule should you have followed
Answer:
Arrive early and obtain permission to observe
Explanation:
As a profession it is important to plan in advance also it is needed to demonstrate yourself in terms of an attitude and behavior this includes the organizing of the task and aimed to delivered the work by maintaining the high quality in order to meet out the objectives. In order to work effectively it is very significant to be on time.
In the given case, you have to arrive early so that you can give the brief introduction of yourself that obtain the permission for observing and shows the professionalism
The following cost data relate to the manufacturing activities of Black Diamond Ski Company during 2013:
Manufacturing Overhead Costs:
Property taxes, factory $ 3,000
Utilities, factory $ 5,000
Indirect labor $10,000
Depreciation, factory $24,000
Insurance, factory $ 6,000
Total Actual Manufacturing OH Costs $48,000 Other Costs Incurred: Purchases of raw materials $32,000 Direct labor costs $40,000 The Black Diamond Ski Company used 10,200 machine hours during the period. Inventories: Raw Materials, 1/1/13 $ 8,000 Raw Materials, 12/31/13 $ 7,000 Work in Process, 1/1/13 $ 6,000 Work in Process, 12/31/13 $ 7,500 The company uses normal costing to record product costs. The company budgeted for $52,500 in total overhead costs for the year. The cost driver associated with the overhead is machine hours and the company expected to use 10,500 machine hours.
REQUIRED:
1) Compute the amount of over-applied or under-applied overhead cost for the year.
2) Determine the cost of goods manufactured for the year.
Answer:
See Below
Explanation:
1.
= Actual manufacturing overhead cost - Budgeted total overhead
Actual manufacturing overhead cost = $48,000
Budgeted total overhead = $52,500
= $48,000 - $52,500
= $4,500
The above is under applied overhead since Budgeted overhead is more than the actual overhead expended.
2. Cost of goods manufactured
Inventories ; raw materials at the beginning
$8,000
Add purchases of raw materials
$32,000
Less direct materials ending
$7,000
Direct materials used
$33,000
Direct labor cost
$40,000
Manufacturing overhead cost
$77,000
Indirect labor
$10,000
Property tax
$3,000
Utilities factory
$3,000
Equipment with a book value of $83,500 and an original cost of $162,000 was sold at a loss of $32,000. Paid $106,000 cash for a new truck. Sold land costing $320,000 for $400,000 cash, yielding a gain of $80,000. Long-term investments in stock were sold for $91,400 cash, yielding a gain of $16,250. Use the above information to determine cash flows from investing activities. (Amounts to be deducted should be indicated with a minus sign.)
Answer:
Net cash flow from investing activities $417,400
Explanation:
The computation of cash flow from investing activity is given below:
Cash flow from investing activities
Add: Equipment sold ($83,500 - $32,000) $51,500
(Book value - loss )
Less : Acquisition of new truck -$106,000
Add : Land sold $400,000
Add : Long term investment sold $91,400
Net cash flow from investing activities $417,400
Common-size and trend percents for Rustynail Company's sales, cost of goods sold, and expenses follow. Common-Size Percents Trend Percents Current Yr 1 Yr Ago 2 Yrs Ago Current Yr 1 Yr Ago 2 Yrs Ago Sales 100.0 % 100.0 % 100.0 % 104.5 % 103.3 % 100.0 % Cost of goods sold 63.7 61.5 57.4 116.0 110.7 100.0 Total expenses 14.3 13.8 14.1 106.1 101.1 100.0 Determine the net income for the following years. Did the net income increase, decrease, or remain unchanged in this three-year period?
Answer:
Rustynail Company
1. The net income for the following years:
Common-Size Percents and Trend Percents
Current 1 Yr 2 Yrs Current 1 Yr 2 Yrs
Yr Ago Ago Yr Ago Ago
Sales 100.0 % 100.0 % 100.0 % 104.5 % 103.3 % 100.0 %
Cost of goods sold 63.7 61.5 57.4 116.0 110.7 100.0
Total expenses 14.3 13.8 14.1 106.1 101.1 100.0
Net Income 22.0 24.7 28.5 77.2 86.7 100.0
2. The net income decrease in this three-year period.
Explanation:
a) Data and Calculations:
Common-Size Percents and Trend Percents
Current 1 Yr 2 Yrs Current 1 Yr 2 Yrs
Yr Ago Ago Yr Ago Ago
Sales 100.0 % 100.0 % 100.0 % 104.5 % 103.3 % 100.0 %
Cost of goods sold 63.7 61.5 57.4 116.0 110.7 100.0
Total expenses 14.3 13.8 14.1 106.1 101.1 100.0
Net Income 22.0 24.7 28.5 77.2 86.7 100.0
b) The net incomes for the common-size percents are obtained by deducting the cost of goods sold and the total expenses from sales. The net incomes for the trend percents are obtained by stating the base year as 100% and then calculating the other years. This takes the form of taking the net income for the analysis year/base year's and then multiplying by 100.
Elliot, Inc., uses the high-low method to analyze cost behavior. The company observed that at 20,000 machine hours of activity, total maintenance costs averaged $10.50 per hour. When activity jumped to 24,000 machine hours, which was still within the relevant range, the average total cost per machine hour was $9.75. On the basis of this information, the company's fixed maintenance costs were:
Answer:
$90,000
Explanation:
At the activity level of 20,000 machine hours:
total maintenance costs=20,000* $10.50=$210,000
At the activity level of 24,000 machine hours:
total maintenance costs=24,000*$9.75=$234,000
variable maintenance cost per hour=(total maintenance costs at higher activity level-total maintenance costs at lower activity level)/(higher activity level-lower activity level)
variable maintenance cost per hour=($234,000-$210,000)/(24000-20000)
variable maintenance cost per unit=$6
Using the higher activity level data:
total cost=fixed cost+(variable maintenance cost per unit*number of hours)
$234,000=fixed cost+($6*24000)
234,000=fixed cost+$144,000
fixed cost=$234,000-$144,000
fixed cost=$90,000
Assume that you live in California and are on vacation, traveling by car from California to Texas. You are injured in a motel room when the bed on which you are sleeping collapses, causing you to fall to the floor. You suffer substantial back and leg injuries, requiring many medical treatments and causing you to miss work for 15 weeks. Your medical bills total $50,000 and your lost wages total $15,000. You intend to sue the owner of the Texas motel.
Required:
a. Can you bring your case in federal court? Why or why not?
b. Can you commence the case in California? What additional information might you need to answer this question?
c. At the end of the trial, the jury awards you $100,000 ($50,000 for medical, $15,000 for lost wages and $35,000 for punitive damages). After the trial, the attorney for the hotel approaches and offers to settle the case for $50,000. Should you consider accepting the settlement? Why or why not?
Answer:
a. No. A state court will do a better job in this case because it exercises unlimited jurisdiction. Moreover, you can only bring your case to a federal court if the amount of your claim is up to $75,000 or the issue is exclusive to the federal court. This is not the case here.
b. Yes and No. We need some additional information about the accident location to help answer this question definitively.
c. No. You should not consider accepting the offered settlement. The jury award is meant to pay for your medical bills and also to help you recover financially as though the accident did not happen in the first place. Accepting any lesser amount after the judgment is rendered is in bad taste. The other party should have negotiated to settle out of court before the final judgment was rendered. But it did not. So, go with the jury award.
Explanation:
a) Data and Calculations:
Missed work for 15 weeks
Total medical bills incurred = $50,000
Total lost wages incurred = $15,000
Jury award = $100,000 ($50,000 for medical, $15,000 for lost wages and $35,000 for punitive damages)
Settlement offer = $50,000
Direct Materials Used in Production
Slapshot Company makes ice hockey sticks. On June 1, Slapshot had $48,000 of materials in inventory. During the month of June, the company purchased $132,000 of materials. On June 30, materials inventory equaled $45,000.
Required:
Calculate the direct materials used in production for the month of June.
Answer:
$135,000
Explanation:
The direct materials used in production for the month of June is computed as;
= Materials inventory at June 1 + Materials purchased during the month of June - Materials inventory at June 30
= $48,000 + $132,000 - $45,000
= $135,000
Therefore, the direct materials used in production for the month of June is $135,000
Describe what will happen to total revenue in the following situations: 1. Price decreases and demand is elastic 2. Price decreases and demand is inelastic 3. Price increases and demand is elastic 4. Price increases and demand is inelastic 5. Price increases and demand is unitary elastic 6. Price decreases and demand is perfectly inelastic 7. Price increases and demand is perfectly elastic
Answer:
Total revenue increases
If prices are reduced, demand would increase more than the fall in price and total revenue would increase.
2. Total revenue falls. If price is reduced, there would be little or no change in quantity demanded and as a result total revenue would fall.
3. Total revenue falls. If prices are increased, demand would fall more than the rise in price and total revenue would fall.
4, Total revenue increases. If demand is inelastic and prices are increased, the rise in price would be greater than the fall in demand. As a result, total revenue increases
5. no change in total revenue . a increase in price leads to an equal change in quantity demanded and there would be no change in total revenue
6. fall. If prices decreases, there would be no change in quantity demanded and total revenue would fall
7. total revenue falls to zero. If prices are increased, demand would fall to zero and total revenue would fall
Explanation:
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.
Price elasticity of demand = percentage change in quantity demanded / percentage change in price
If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes. If prices are reduced, demand would increase more than the fall in price and total revenue would increase. If prices are increased, demand would fall more than the rise in price and total revenue would fall.
Demand is inelastic if a small change in price has little or no effect on quantity demanded. The absolute value of elasticity would be less than one. If price is increased, there would be little or no change in quantity demanded and total revenue would increase. If price is reduced, total revenue would fall.
Demand is unit elastic if a small change in price has an equal and proportionate effect on quantity demanded. If price increases, there would be an equal change in quantity demanded, total revenue would remain the same
Answer:
a. The overall income will drop.
b. The overall income will drop.
c. The overall income will drop.
d. The overall income will rise.
e. The overall income will not change.
f. The overall income will not change.
g. The overall income will not change.
Explanation:
a. If there is an elastic demand for the product and the price goes down, the overall revenue will go down. This is due to the fact that when there is a decrease in price, there is a rise in the amount that is desired. This is due to the fact that customers are sensitive to changes in price and will begin purchasing a greater quantity of the item or service after the price has dropped. Yet, because of the drop in price, there will be a reduction in the overall income that is generated from the sale of the product or service. This is due to the fact that the increase in quantity will not be sufficient to compensate for the reduction in cost that will result from the sale.
b. If there is no change in the level of demand, but the price is decreased, total revenue will likewise go down. This is due to the fact that if there is a fall in price, there will be an increase in the amount that is desired. Unfortunately, the increase in quantity will not be sufficient to compensate for the reduction in price, which will result in a lower overall income. This is due to the fact that the increase in supply will not be sufficient to compensate for the reduction in cost.
c. If there is no significant change in demand, then higher prices will not significantly affect overall income. This is due to the fact that as the price goes up, the amount of the good that is desired will go down. This is due to the fact that customers are sensitive to changes in price and will begin purchasing less of the item or service as the price rises. Even if the rise in price is more than the reduction in quantity desired, the overall income will still fall because of the lower amount of the good or service that is being purchased.
d. If there is no change in the level of demand, a rise in price will lead to an increase in total income. This is due to the fact that if the price goes higher, the quantity needed will go down, but not by an amount that is sufficient to compensate for the price going up. As a consequence, there will be an increase in total income as a direct consequence of the price rise.
e. if the demand is unitary elastic and the price goes up, the overall revenue won't change but it will stay the same. This is due to the fact that whenever there is a rise in price, there is a corresponding fall in the number of goods that are desired. As a consequence, there will be no change in overall income as a result of the rise in price since it will be balanced out by the drop in quantity.
f. If there is no change in the level of demand, regardless of whether the price goes up or down, overall revenue will stay the same. This is due to the fact that even if prices go down, consumers will still want the same amount of the good or service. Thus, there will be no change in overall income as a consequence of the fall in price since this will be balanced out by the demand for the same amount.
g. If there is no change in demand despite a rise in price, businesses will get the same amount of revenue overall. This is due to the fact that once the price is raised, customers will no longer purchase any of the product or service. Because of this, there will be no change in overall income as a consequence of the rise in price since there will be no change in the amount that is required.
5. Microeconomics and macroeconomics Determine whether each of the following topics would more likely be studied in microeconomics or macroeconomics. Microeconomics Macroeconomics The effect of government regulation on a monopolist's production decisions The effects of the Internet on the pricing of used cars The effect of federal government spending on the national unemployment rate
Answer:
Microeconomics
Microeconomics
Macroeconomics
Explanation:
Macroeconomics is a branch of economics that studies the economy as a whole. Macroeconomics studies economic aggregates such as inflation, unemployment, GDP and growth rate.
Microeconomics is a branch of economics that studies the decisions individuals and firms make in response to changes in economic factors. These factors include price, resources etc. it studies how firms and individuals allocate and make decisions about resources
Microeconomics: The effect of government regulation on a monopolist's production decisions.
Microeconomics: The effects of the Internet on the pricing of used cars.
Macroeconomics: The effect of federal government spending on the national unemployment rate.
The effect of government regulation on a monopolist's production decisions: This topic would likely be studied in microeconomics. Microeconomics analyzes the behavior of individual firms, and the impact of government regulation on a monopolist's production decisions falls within this domain. The study would explore how government policies and regulations influence the production output, pricing strategies, and market behavior of a monopolist.
The effects of the Internet on the pricing of used cars: This topic would also be studied in microeconomics. The Internet's impact on the pricing of used cars relates to how individual buyers and sellers interact in a specific market. Microeconomics would investigate how the availability of online platforms, increased access to information, and changes in buyer-seller dynamics affect the pricing decisions of used cars.
The effect of federal government spending on the national unemployment rate: This topic would be studied in macroeconomics. Macroeconomics focuses on the overall economy and aggregates like national income, employment, and inflation. The effect of federal government spending on the national unemployment rate is a macroeconomic question that looks at how government expenditures, such as infrastructure projects or stimulus packages, can influence the overall level of unemployment in the country.
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d. E contributes $82,000 in cash to the business to receive a 22 percent interest in the partnership. No goodwill or other asset revaluation is to be recorded. Profits and losses have previously been split according to the following percentages: A, 10 percent; B, 30 percent; C, 20 percent; and D, 40 percent. After E makes this investment, what are the individual capital balances
Answer:
After E makes this investment, the individual capital balances are:
A = $29,073
B = $87,218
C = $58,145
D = $116,291
E = $82,000
Total = $327,727
Explanation:
a) Data and Calculations:
E's capital contribution = $82,000 for 22%
Total capital after E's admission = $372,727 ($82,000/22%)
Old profits and losses sharing ratio:
A, 10 percent; B, 30 percent; C, 20 percent; and D, 40
New profits and losses sharing ratio and new capital balances
A = 10% of 78% = 7.8% 7.8% of $372,727 = $29,073
B = 30% of 78% = 23.4% 23.4% of $372,727 = $87,218
C = 20% of 78% = 15.6% 15.6% of $372,727 = $58,145
D = 40% of 78% = 31.2% 31.2% of $372,727 = $116,291
E = 22% 22% of $372,727 = $82,000
Total = 100% $327,727
b) The capital of the partnership will total $327,727 while individual partnerships will have their capital accounts adjusted in line with the new profit sharing ratio and capital.
The courts ruled that the pay disparity between the sexes at Jaxon Corp. was illegal and ordered the company to remedy it. Jaxon Corp. cannot lower the wages of the higher-paid group in order to comply with the law.
True Or False
Answer:
True
Explanation:
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The statement "The courts ruled that the pay disparity between the sexes at Jaxon Corp. was illegal and ordered the company to remedy it. Jaxon Corp. cannot lower the wages of the higher-paid group in order to comply with the law" is true.
What is disparity?The disparity can be defined as a lack of equality or likeness, particularly in an unfair way: the widening discrepancy between the affluent and poor.
Inequalities in other parts of society, such as the legal system, education, academe, commercial institutions, and politics, are referred to as social disparities. Most of the time, the social discrepancies listed above are the result of other disparities, such as economic disparity, gender disparity, or racial disparity.
The courts determined that Jaxon Corp.'s wage inequality between the sexes was unconstitutional and ordered the corporation to correct it. To comply with the legislation, Jaxon Corp. cannot reduce the compensation of the higher-paid group. Therefore, the above statement is true.
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Someone offers to buy your old Ford F-150 truck for 4 equal annual payments, beginning 2 years from today. If you think that the present value of your Ford Truck is only $9,000 and you assume the interest rate is 10%, which one of the below would be the minimum annual payment that youâ d be willing to accept? $2,839.24 $3,435.48 $3,123.16 $2,250
Answer:
$3,123.16
Explanation:
The computation of the minimum annual payment is as follows:
Given that
RATE = 10%
NPER = 10%
PV = $9,000 × (1 + 0.1) = $9,900
FV = $0
The formula is shown below:
= PMT(RATE,NPER,-PV,FV,TYPE)
After applying the above formula, the monthly payment is $3,123.16
You have graduated from college but unfortunately have $39,000 in outstanding loans. The loans require payments of $3,435 per year, which covers interest and principal repayment (that is, the loan has the same basic features as a mortgage). If the interest rate is 4 percent, how long will it take you to repay the debt
Answer:
15.44 years
Explanation:
Using both excel rate function and financial calculator, the time taken to repay the debt can be computed thus:
Excel rate function:
=nper(rate,pmt,-pv,fv)
rate= interest rate=4%
pmt=yearly payment=c
pv=loan oustanding=-39000
fv=the balance after all payments should be zero=0
=nper(4%,3435,-39000,0)= 15.44 years
Financial calculate
PMT= 3435
RATE=4
PV=-39000
FV=0
CPT N=15.44 years
This means a payment of $3,435 per year for 15 years and $ 1,511.40 ($3,435*0.44) in the sixteenth year
Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent month for the two games appears below:
Claimjumper Makeover Total
Sales $ 30,000 $70,000 $100,000
Variable expenses 20,000 50,000 70,000
Contribution margin $ 10,000 $ 20,000 30,000
Fixed expenses 24,000
Net operating income $ 6,000
Required:
1. What is the overall contribution margin (CM) ratio for the company?
2. What is the company's overall break-even point in dollar sales?
3. Prepare a contribution format income statement at the company's break-even point that shows the appropriate levels of sales for the two products.
Answer:
See below
Explanation:
1. Overall contribution margin ratio for the company
= (Total contribution margin ÷ Total sales) × 100
= ($30,000 ÷ $100,000) × 100
= 0.3 × 100
= 30%
2. Company's overall break even point in dollar sales
= Fixed cost/Contribution margin ratio
= $24,000 / 0.3
= $80,000
3. Contribution format at break even point.
•Claim jumpover
Sales
$30,000
Less
Variable cost
($20,000)
Contribution margin
$10,000
•Makeover
Sales
$100,000
Less
variable cost
($50,000)
Contribution margin
$50,000