Answer and Explanation:
A consumer surplus is the gain a consumer makes by paying less than he is willing to pay for a product. Example if a consumer is willing to pay $300 for a mobile phone but pay $200 for the phone, the consumer surplus is $100
Given that the demand function is P=60-Q
And price is 30
Therefore consumer surplus is, substitute 30 in p
30=60-Q
30-60=-Q
-30=-Q
Q=-30/-1
Q=30
Therefore consumer surplus = 30
Your classmates from the University of Chicago are planning to go to Miami for spring break, and you are undecided about whether you should go with them. The round-trip airfare is $600, but you have a frequent-flyer coupon worth $500 that you could use to pay part of the airfare. All other costs for the vacation are exactly $900. The most you would be willing to pay for the trip is $1,400. Your only alternative use for your frequent-flyer coupon is for your trip to Atlanta two weeks after the break to attend your sister's graduation, which your parents are forcing you to attend. The Chicago-Atlanta round-trip airfare is $450. If the Chicago-Atlanta round-trip air fare were $350, should you use the coupon to go to Miami?
Answer:
You should use the discount coupon to pay for the Chicago-Miami trip. Not considering the personal motivations for the trip, the coupon is worth $500. The cost of flying is $600, so you will only pay $100 yourself. You will be spending $900 + $1000 = $1,000 in total.
The opportunity cost of using the coupon is $350 (the cost of the round trip to Atlanta). Even if you add the $350 to the $1,000 expense, the total is $1,350, less than your $1,400 maximum budget.
Flo enters into a contract with Global Shipping Ltd. to insure and ship a painting from France to the United States for a certain price. Global makes a mistake in adding the costs, which results in a contract price that is $1,000 less than the true cost. Most likely, a court would a. enforce the contract as is. b. allow the parties to rescind the contract. c. award damages to Global for the mistake. d. award damages to Flo for the mistake.
Answer:
b. Allow the parties to rescind the contract
Explanation:
Flo enters into a contract with Global Shipping Ltd. to insure and ship a painting from France to the United States at a certain amount mentioned in the contract. However, Global Shipping Ltd. makes a mistake in calculating the costs. As a result, a contract price is equal to the amount that is $1,000 less than the true cost. Most likely, a court would allow the parties to rescind the contract.
Option b. is correct.
Here are comparative statement data for Duke Company and Lord Company, two competitors. All balance sheet data are as of December 31, 2020, and December 31, 2019.
2020 2019 2020 2019
(Duke Company) (Duke Company) (Lord Company) (Lord
Company)
Net sales $1,896,000 $561,000
Cost of goods sold 1,020,048 297,330
Operating expenses 257,856 79,662
Interest expense 7,584 3,927
Income tax expense 54,984 6,171
Current assets 322,500 $310,000 83,500 $78,000
Plant assets (net) 520,800 500,300 139,800 123,000
Current liabilities 64,200 75,600 34,400 29,600
Long-term liabilities 108,400 90,400 28,400 26,000
Common stock, $10 par 498,000 498,000 122,500 122,500
Retained earnings 172,700 146,300 38,000 22,900
Prepare a vertical analysis of the 2017 income statement data for duke company and Lord company.
Answer:
Please attached detailed solution.
Explanation:
• Prepare a vertical analysis of the 2017 income statement data for Luke and Lord company.
Please see as attached detailed solution to the above question.
Prepare adjusting entries for the following transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
1. Unrecorded interest accrued on savings bonds is $410.
2. Property taxes incurred but not paid or recorded amount to $800.
3. Unearned service revenue of $4,000 was collected in advance. By year end $700 was still unearned.
4. Prepaid insurance had a $750 debit balance prior to adjustment. By year end, 60 percent was still unexpired.
5. Salaries incurred by year end but not yet paid or recorded amounted to $650.
Answer:
1. Dr Interest Receivable 410
Cr Interest Revenue 410
2. Dr Property Tax Expense 800
Cr Property Taxes Payable 800
3. Dr Unearned Service Revenue 3,300
Cr Service Revenue 3,300
4. Dr Insurance Expense 300
Cr Prepaid Insurance 300
5. Dr Salaries and Wages Expense 650
Cr Salaries and Wages Payable 650
Explanation:
Preparation of Journal entries
1. Dr Interest Receivable 410
Cr Interest Revenue 410
2. Dr Property Tax Expense 800
Cr Property Taxes Payable 800
3. Dr Unearned Service Revenue 3,300
Cr Service Revenue 3,300
($4,000 – $700)
4. Dr Insurance Expense 300
Cr Prepaid Insurance 300
[$750 x (100%-60%)]
5. Dr Salaries and Wages Expense 650
Cr Salaries and Wages Payable 650
Residential Investment Payments of Factor Income to the rest of the world National Income Inventory Adjustment 0.00 Personal Consumption Expenditure Depreciation Exports Nonresidential Investment Receipts of Factor Income from the Rest of the World Government Transfer Payment 200.00 Statistical Discrepancy 0.00 Imports Using the above information calculate the values of GDP, GNP, NNP and Government Consumption and Gross Investment (G).
Please find full question attached
Answer and Explanation:
Gross domestic product is calculated:
Gross Domestic Product(GDP) = Gross National Product (GNP) - Receipts of factor income from rest of the world + Payments of factor income to the rest of the world
So to find GDP, we calculate GNP
GNP = NNP+Depreciation
To calculate GNP, we calculate NNP:
Net national product (NNP) =national income, so we have,
NNP = $2,445 billion
GNP = NNP + Depreciation = $2,445+$75
GNP = $2,520 billion
So we substitute in GDP formula to calculate GDP
GDP = 2,520 - 70 + 50 = $2500 billion
GDP = $2,500 billion
Government consumption and gross investment= Government transfer payments + Non-residential investments
Government consumption and gross investment is given by G
G = 200+250 = $450 billion
G = $450 billion
The ratio of total cash, marketable securities, accounts receivable, and short-term notes to current liabilities is:
Answer:
Acid-test ratio
Explanation:
Acid-test ratio I finance can also be regarded as quick ratio, it gives the measurement of how an organization can utilize her quick asset as well as cash to settle her liabilities at at that current period.
It can be calculated theoretically using this expresion;
Quick ratio= (Current Asset- Inventory)/Current Liabilities
It should be noted that acid-test ratio gives The ratio of total cash, marketable securities, accounts receivable, and short-term notes to current liabilities. It enables to know shot term liquidity of a particular company.
Suppose that Sophia expects to serve 15 percent more meals in the next quarter. Unit variable costs are expected to remain unchanged. However, Sophia knows that if the restaurant serves over 5,500 meals in a quarter, she must hire an additional manager (part-time) at a cost of $6,450 for the quarter. Other fixed costs are expected to increase by 10 percent. Calculate the unit cost and the total cost if 5,750 meals are served next quarter
Answer:
$87,975
15.30
Explanation:
The computation of unit cost and total cost is shown below:-
Managers' salary ($22,000 + $6,450) $28,450
Rent $18,000
Depreciation on equipment $2,000
Other fixed cost (3,000 × 1.1) 3,300
Total Fixed cost $51,750
Total Cost = $36,225 + $51,750
= $87,975
Unit Cost = 87,975 ÷ 5,750
= 15.30
Use the following information for ECE incorporated: Shareholder Equity $100 million Assets $200 million Sales $300 million Net Income $15 million Interest Expense $2 million If ECE's stock is currently trading at $24.00 and ECE has 25 million shares outstanding, then ECE's market-to-book ratio is closest to:
Answer:
6.0
Explanation:
Market to book ratio is calculated as ; Market capitalization / Net book value.
Where,
Market capitalization = Price per share × Total shares outstanding
= $24 × 25,000,000 shares
= $600,000,000
Then,
Net book value = Total assets - Total liabilities
= $200,000,000 - $100,000,000
= $100,000,000
Therefore,
Market to book ratio = $600,000,000 / $100,000,000
= 6.0
On April 30, one year before maturity, Middleton Company retired $200,000 of its 9% bonds payable at the current market price of 101 (101% of the bond face amount, or $200,000 1.01 3 5 $202,000). The bond book value on April 30 is $196,600, reflecting an unamortized discount of $3,400. Bond interest is currently fully paid and recorded up to the date of retirement. What is the gain or loss on retirement of these bonds
Answer:
Loss on retirement of these bonds = $5,400
Explanation:
Particulars Amount
Amount paid $202,000
Book value of bonds $196,600
Loss on retirement of bonds $5,400
However, this is not a real economic gain
Bob purchased a truck for $53,000 with a residual value of $26,000 and a life expectancy of 5 years; using straight-line depreciation, the amount of the depreciation adjustment for the first year would be:
Answer:
the depreciation adjustment for the first year is $5,400
Explanation:
The computation of the amount of depreciation adjustment for the first year is shown below:
= (Purchase cost - residual value) ÷ (expected life)
= ($53,000 - $26,000) ÷ ( 5 years)
= ($27,000) ÷ ( 5 years)
= $5,400
Hence, the depreciation adjustment for the first year is $5,400
We simply applied the above formula so that the correct value could come
And, the same is to be considered
Two methods can be used for producing solar panels for electric power generation. Method 1 will have an initial cost of $550,000, an AOC of $160,000 per year, and $125,000 salvage value after its 3-year life. Method 2 will cost $830,000 with an AOC of $120,000, and a $240,000 salvage value after its 5-year life. Assume your boss asked you to determine which method is better, but she wants the analysis done over a 3-year planning period. You estimate the salvage value of method 2 will be 35% higher after 3 years than it is after 5 years. If the MARR is 10% per year, which method should the company select?
Answer:
method 1 should be selected.
Explanation:
for method 1:
p = 550000
a = 160000
s = 125000
I = 10%
n = 3 years
aw = -550000(a/p, 0.10,3)-160000+125000(a/f,0.10,3)
= -550000(0.4021)-160000+125000(0.3021)
= -221155-160000+37762.5
= -343.392.5 dollars
for method 2:
salvage value = 240000x1.35
= 324000
p= 830000
a = 120000
s = 324000
I = 0.10 or 10%
n = 3
aw = -830000(a/p,0.10,3)-120000+324000(a/f,10%,3)
= -830000(0.4021)-120000+324000(0.3021)
= -333743-120000+97880.4
= -355862.6 dollars
after comparing both values, method 1 is better
What is a "closing balance?
a.) The amountof money you have at the end of the statement period
b.)The amount of money you have when you close your account
c.)The amount of money you owe at the end of the statement period
d.)The amount of money waiting to be transferred out of your account
Faster pls
Answer:
The answer is A
Explanation:
A closing balance is the amount of money a business has at the end of a specific time period.
7. The theory of efficiency wages Why might some firms voluntarily pay workers a wage above the market equilibrium, even in the presence of surplus labor? Check all that apply. Paying higher wages encourages workers to be more productive. Higher wages cause workers to shirk more of their responsibilities. Paying higher wages can reduce a firm's training costs. Higher wages attract a more competent pool of workers.
Answer:
Paying higher wages encourages workers to be more productive.
Explanation:
Firms pay workers a wage above the market equilibrium even in the presence of surplus labor to encourage the workers to work hard. Increasing a workers wage is known to be an effective method to motivating which later brings about efficiency in output from the workers. It is also use to appreciate the efforts of employees by showing them that company cares for their basic requirement.
Answer:
paying higher wages encourages workers to be more productive
Paying higher wages can reduce a firm's training costs.
Higher wages attract a more competent pool of workers.
Explanation:
Paying higher wages enhances workers to adopt healthier lifestyles, enhancing their productivity.
When a firm pays high wages, it attracts a better pool of workers to apply for its jobs and thereby increases the quality of its workforce
Workers who are shirking their responsibilities are fired
Teakap, Inc., has current assets of $1,456,312 and total assets of $4,812,369 for the year ending September 30, 2016. It also has current liabilities of $1,041,012, common equity of $1,500,000, and retained earnings of $1,468,347. What is the value of long term debt?
Answer:
$803,010
Explanation:
Calculation for the value of long term debt
First step is to find the Stockholders' equity
Stockholders' equity = $1,500,000 + $1,468,347 Stockholders' equity= $2,968,347
Last step is to find the Long-term debt
Using this formula
Value of Long-term debt= Total assets – Current liabilities – Stockholders' equity
Let plug in the formula.
Value of Long-term debt= $4,812,369 – $1,041,012 – $2,968,347
Value of Long-term debt = $803,010
Therefore the Value of Long-term debt
will be $803,010
Mountaintop golf course is planning for the coming season. Investors would like to earn a 12% return on the company's $47,000,000 of assets. The company primarily incurs fixed costs to groom the greens and fairways. Fixed costs are projected to be $20,000,000 for the golfing season. About 440,000 golfers are expected each year. Variable costs are about $17 per golfer. Mountaintop golf course is a price-taker and won't be able to charge more than its competitors who charge $84 per round of golf. What profit will it earn as a percent of assets
Answer:
47.4%
Explanation:
A. Expected golfers
440,000
B Revenue (440,000 × $84)
$36,960,000
C. Variable cost (440,000 × $17)
$7,480,000
D = B - C Contribution margin
$29,480,000
E Fixed cost
$20,000,000
F = D - E Profit
$9,480,000
G Assets
H = F/G × 100 Return on assets
47.4%
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Answer:
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Answer:
BANNNA BANNNA BANNNA BANNNA BANNNA BANNNA
Explanation:
Juniper Corp. makes three models of insulated thermos. Juniper has $306,000 in total revenue and total variable costs of $192,780. Its sales mix is given below: Percentage of total sales Thermos A 30 % Thermos B 48 Thermos C 22 Required: 1. Calculate the (overall) weighted-average contribution margin ratio. 2. Determine the total sales revenue Juniper needs to break even if fixed costs are $73,075. 3. Determine the total sales revenue needed to generate a profit of $78,070. 4. Determine the sales revenue from each product needed to generate a profit of $78,070.
Answer:
Follows are the solution to this question:
Explanation:
In Option 1:
[tex]\to CM \ ratio = \frac{(Sales - variable\ cost)}{variable\ cost}[/tex]
[tex]= \frac{(306,000 - 192,780)}{306,000}\\\\= \frac{113,220}{306,000}\\\\= 0.37 \%[/tex]
In Option 2: .
[tex]\to BEP = \frac{Total \ fixed \ cost}{CM \ ratio}[/tex]
[tex]= \frac{73,075}{0.37}\\\\=\$ \ 197500[/tex]
In Option 3:
[tex]\to Required \ sales = \frac{(73,075+ 78,070)}{0.37}[/tex]
[tex]=\frac{151145}{0.37}\\\\=408500[/tex]
In Option 4:
[tex]\to Sales A = 408500 \times \frac{30}{100} = 1361666.67\\\\\to Sales B = 408500\times \frac{48}{100} = 851041.667\\\\\to Sales C = 408500\times \frac{22}{100} = 1856818.18\\\\[/tex]
e market for iPhones, the following two changes take place: (1) the cost of making iPhones rises, and (2) customers begin to prefer Android-platform smartphones over iPhones. What happens to equilibrium price and equilibrium quantity
Answer: The equilibrium price is indeterminate, but the equilibrium quantity falls.
Explanation:
As a result of the cost of iPhones rising, the production and supply for iPhones will decrease in the market to save costs. This will cause the supply curve to shift to the left.
With customers preferring android to iPhones, the demand for iPhones will decrease which will shift the demand curve left as well.
Looking at the graph attached, notice how when both supply and demand shift left at the same time, equilibrium quantity will reduce and equilibrium price however will remain indeterminate and dependent on the magnitude of the shift.
The Ferre Publishing Company has three service departments and two operating departments. Selected data from a recent period on the five departments follow:_____.
Service Departments Operating Departments
Administration Janitorial Maintenance Binding Printing Total
Costs $168,000 $126,000 $57,600 $330,000 $516,000 $1,197,600
Number of employees 60 35 140 315 210 760
Square feet of space occupied 15,000 10,000 20,000 40,000 100,000 185,000
Hours of press time 30,000 60,000 90,000
Required:
Assuming that the company uses the direct method rather than the step-down method to allocate service department costs, how much cost would be assigned to each operating department? (Please enter allocations from a department as negative and allocations to a department as positive. The line should add across to zero. Do not round intermediate calculations. Round your answers to the nearest dollar amount.)
Answer:
The Ferre Publishing company
Service Costs Assigned to each Operating Department:
Service Departments Operating Departments
Admin. Janitorial Mainten. Binding Printing Total
Costs $168,000 $126,000 $57,600 $330,000 $516,000 $1,197,600
Admin (168,000) 100,800 67,200 0
Janitorial (126,000) 36,000 90,000 0
Maintenance (57,600) 19,200 38,400 0
Total cost $486,000 $711,600 $1,197,600
Explanation:
a) Data and Calculations:
Service Departments Operating Departments
Administration Janitorial Maintenance Binding Printing Total
Costs $168,000 $126,000 $57,600 $330,000 $516,000 $1,197,600
Number of
employees 60 35 140 315 210 760
Square feet of
space occupied 15,000 10,000 20,000 40,000 100,000 185,000
Hours of
press time 30,000 60,000 90,000
Allocation bases:
Administration cost = Number of employees 525
Janitorial cost = Square feet 140,000
Maintenance cost = Hours of press time 90,000
Allocation Rates and to Operating Departments:
Administration $168,000/525 = $320 per employee
Binding = 315 * $320 = $100,800
Printing = 210 * $320 = $67,200
Janitorial costs = $126,000/140,000 = $0.90 per square feet
Binding = 40,000 * $0.90 = $36,000
Printing = 100,000 * $0.90 = $90,000
Maintenance costs = $57,600/90,000 = $0.64 per press hour
Binding = 30,000 * $0.64 = $19,200
Printing = 60,000 * $0.64 = $38,400
Bronny gonna get the lebelt
Catharine, Inc. is considering issuing additional long-term debt to finance an expansion. The company currently has $20 million in 5% debt outstanding. Its earnings after-tax (EAT) are $3.0 million, and its marginal and average tax rate is 40 percent. The company is required by the debt holders to maintain its times interest earned ratio at 3.0 or greater. How much additional 10 percent debt can Catharine, Inc issue now and maintain its times interest earned ratio at 3.0
Answer:
$10 million
Explanation:
Calculation for How much additional 10 percent debt can Catharine, Inc issue
First step is to find the EBT
EBT = $3.0 / (1 - 0.40)
EBT= $5.0
Second step is to find the EBIT
EBIT = $5.0 + $1.0
EBIT= $6.0
Third step is to find the Interest permitted using this formula
Interest permitted = EBIT / Times interest earned
Let plug in the formula
Interest permitted = $6.0 / 3.0
Interest permitted = $2.0
Fourth step is to find the Additional interest amount
Additional interest = $2.0 - $1.0
Additional interest = $1.0
Last step is to compute the Additional debt amount
Additional debt = $1.0 / 0.1
Additional debt= $10 million
Therefore the Additional debt will be $10 million
Budgets are prepared in which of the following orders? Group of answer choices sales budget, production budget, direct materials purchases budget sales budget, cash budget, production budget production budget, cost of goods sold budget, direct labor budget production budget, sales budget, direct labor budget
Answer:
Sales Budget,
Production Budget,
Direct Materials Purchases Budget
Explanation:
The budgets are prepared so that the company could get to know how much revenue earned and the expenses to be incurred during a particular period of time. It gives an idea of how much would be earned and how much would be incurred
Here, in the following orders, the budgets could be prepared
Sales Budget,
Production Budget,
Direct Materials Purchases Budget
If merchandise is sold on account to a customer for $10,000, terms FOB shipping point, 1/10, n/30, what is the amount to be recorded as an accounts receivable on the date of the sale?
a. $10,000
b. $10,050
c. $9,950
d. none of the above
Answer: a. $10,000
Explanation:
The amount to be recorded as an Accounts Receivable on the date of the sale is the actual amount that the merchandise was sold for which is $10,000.
The discount of 1% if paid within 10 days will only apply if the customer pays within that time and if this is done, the discount will be deducted from the amount paid to the company and debited to the Sales discount account.
United Parcel Service, Inc. (Ticker: UPS (Links to an external site.)) estimates its cost for a distribution center at $18.63 million. Management has decided to invest $1.1 million a quarter to fund the project. Assuming that the firm can earn a return of 6.25 percent, compounded quarterly, on its savings, how long does the firm have to wait before expanding its operations
Answer:
It will take 182.44 quarters to reach $18,630,000.
Explanation:
Giving the following information:
Future Value= $18,630,000
Initial Investment= $1,100,000
Interest rate= 0.0625/4= 0.01563
To calculate the time required to reach the objective, we need to use the following formula:
n= ln(FV/PV) / ln(1+i)
n= ln(18,630,000 / 1,100,000) / ln (1.01563)
n= 182,44
It will take 182.44 quarters to reach $18,630,000.
in creating the master budget, the second budget a company prepares is the production budget. a. True b. False
Answer:
In creating the master budget, the second budget a company prepares is the production budget.
a. True
Explanation:
When a company prepares the master budget, it first prepares the sales budget, followed by the production budget. The production budget calculates the costs of materials, labor, and overhead based on the number of units to be manufactured within the budget period. The units of products are derived from the sales forecast and the planned amount of ending finished goods inventory.
Bluebird Mfg. has received a special one-time order for 15,000 bird feeders at $3 per unit. Bluebird currently produces and sells 75,000 units at $7.00 each. This level represents 80% of its capacity. Production costs for these units are $3.50 per unit, which includes $2.25 variable cost and $1.25 fixed cost. If Bluebird accepts this additional business, the effect on net income will be:
Answer:
Effect on income= $11,250
Explanation:
Giving the following information:
Production costs:
Variable= $2.25
Special offer:
Selling price= $3
Units= 15,000
Because it is a special offer, and there is unused capacity, we will not take into account the fixed costs.
Effect on income= Number of units*unitary contribution margin
Unitary contribution margin= 3 - 2.25= $0.75
Effect on income= 15,000*0.75= $11,250
All the long-term debt of a government, including the long-term debt that will be financed by Enterprise Fund revenues, is reported in the fund-level financial statements.
a. True
b. False
Answer: False
Explanation:
False.
Long term debt is a debt owed by an economic entity which could either be the inividual, a business or the government and such debts are expected to mature in a period of at least one year.
It should be noted that the long term debt isn't reported in fund level financial statement but rather it's reported in government wide statements.
Bond Ratings. Companies pay rating agencies such as Moody’s and S&P to rate their bonds, and the costs can be substantial. However, companies are not required to have their bonds rated in the first place; doing so is strictly voluntary. Why so you think they do so?
Answer:
Bond Ratings
Companies employ rating agencies such as Moody's and S&P to rate their bonds despite the substantial costs and their voluntariness because ratings by these agencies add a badge of honor to the bonds. It gives investors some level of assurance that the bonds will be honored at maturity and that the pricing is right, given the company's credit risk.
Explanation:
Credit risk rating agencies assess the credit risk of a company or financial product as formal and credit-worthy benchmarks for investment decisions. While companies pay huge costs to have these ratings conducted by the big three, including Moody's, S&P, and Fitch, the main value goes to the potential investors who require the information to decide whether to invest in the rated companies.
A lawn company intends to use the sales of lawn fertilizer to predict the sales of lawn mower. The store manager estimates a probable six-week lag between fertilizer sales and mower sales. The pertinent data are
Answer:
Period ; Fertilizer ; Sales
1 ; 1.6 ; 10
2; 1.3 ; 8
3; 1.8 ; 11
4; 2.0 ; 12
5; 2.2 ; 12
6; 1.6 ; 9
7; 1.5 ; 8
8; 1.3 ; 7
9; 1.7 ; 10
10; 1.2 ; 6
Explanation:
Correlation is 0.960
R-Squared is 0.921
This is positive correlation which means both variables will move in same direction.
Slope is 6.153
Intercept is -0.649
Regression line will be formed with x intercept as fertilizers and y intercept as Lawn Mowers sold.
Between January 2010 and January 2016, U.S. employment increased by 12.1 million workers, but the number of unemployed workers declined by only 7.3 million. True or False: The labor force has remained unchanged.
Answer:
False, the labor forced increased
Explanation:
labor force = total number of people actively working (employed) or searching for jobs (unemployed)
lets say L = the total labor force in 2010
by 2016, L had increased by 12.1 million and decreased by 7.3 million
net change of L = 12.1 - 7.3 = 4.8 more million people were part of the labor force in 2016 than in 2010.