Answer:
the combined total net income = $ 1,576,000
Incremental Income = $4,000
Explanation:
Calculation of the combined total net income if the company accepts the offer to sell additional units at the reduced price of $12 per unit.
Sales (400,000 units) $ 6,000,000
Additional Sales (40,000 units × $12) $480,000
Combined Sales $6,480,000
Costs and expenses :
Direct materials (800,000 + (800,000 / 400,000 × 40,000)) ( $880,000)
Direct labor (1,600,000 + (1,600,000 / 400,000 × 40,000)) ( $1,760,000)
Overhead 400,000 × 1.16 ($464,000)
Selling expenses ($600,000 )
Administrative expenses ($1,028,000 + $172,000) ($1,200,000)
Net income $ 1,576,000
Incremental Income / (loss)
Net Income After Accepting Offer $ 1,576,000
Less Income Before Accepting Offer $ 1,572,000
Incremental Income / (loss) $4,000
For a stock to be in equilibrium, that is, for there to be no long-term pressure for its price to depart from its current level, then a.the expected future return must be less than the most recent past realized return. b.the past realized return must be equal to the expected return during the same period. c.the expected future returns must be equal to the required return. d.the required return must equal the realized return in all periods. e.the expected return must be equal to both the required future return and the past realized return.
Answer:
c.the expected future returns must be equal to the required return.
Explanation:
When the stock is at equilibrium than the intrinsic value of the stock is equivalent to the market price of the stock that depicts that the expected returns which held in the future should be equivalent to the required return
Therefore the option c is correct
And, the other options that are mentioned in the question are incorrect
For a stock to be in equilibrium, the expected future returns must be equal to the required return.
The correct answer to this question is answer option c. At the equilibrium position there is a balance between the expected returns and the required returns.
At this point the intrinsic value is the same thing as the market value. Telling us that the rate the investor is expecting is the same as the actual required rate of return.
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Cobe Company has already manufactured 23,000 units of Product A at a cost of $25 per unit. The 23,000 units can be sold at this stage for $420.000. Alternatively, the units can be further processed at a $280.000 total additional cost and be converted into 6.000 units of Product B and 11,900 units of Product C. Per unit selling price for Product B is $106 and for Product C is $52.
Required:
Prepare an analysis that shows whether the 23,000 units of Product A should be processed further or not.
Answer:
It is more profitable to continue processing the units.
Explanation:
Giving the following information:
Product A:
Units= 23,000
Selling price= $420,000
Continue processing:
Product B= 6,000 units sold for $106 each
Product C= 11,900 units sold for $52 each
Total cost= $280,000
We need to calculate the effect on the income of both options and choose the most profitable one. We will not take into account the first costs of Product A because they are irrelevant.
Option 1:
Effect on income= $420,000
Option 2:
Effect on income= (6,000*106) + (11,900*52) - 280,000
Effect on income= $974,800
It is more profitable to continue processing the units.
The difference between Karson's behavior at the end of the 12 weeks versus the promise to cure Karson of ADHD can be described as the measure of the:________.
A. expectation interest.
B. reliance interest.
C. restitution interest.
D. All of these are correct.
Answer:
A. Expectation interest.
Explanation:
Expectation interest is explained as the party of interest being in a good position in the point or financial angles during a business dealing. Here he/she is said to have a good stance of a deal or a contract been contacted for. Sometimes, it is seen to be triggered by net profits and losses less any costs or losses, which are sometimes tool in weighing the reasonable measure of damages. Therefore, when no contracts are be agreed on, determination must be made as to whether or not one party benefited from contact with the other party.
SilverFinn makes high-end jewelry for women. This jewelry is manufactured and patented in Italy. Manufacturers in Argentina create counterfeit SilverFinn jewelry and sell it in local markets at nearly similar prices to the original SilverFinn jewelry sold in other countries. This lack of intellectual property protection is like to result in
Answer: a. reduction in export opportunities from Argentina to other countries.
Explanation:
SilverFinn jewellery probably has intellectual property protection in other countries so when Argentinian producers make those counterfeits, they will be unable to sell it outside Argentina where it would not be allowed to be sold. This will reduce the export opportunities from Argentina to other countries.
It may also reduce the export opportunities of other goods from Argentina because other countries might be slow to trust that what Argentina is sending are indeed genuine goods because they have been known to counterfeit SilverFinn jewelry.
Cammie received 100 NQOs (each option provides a right to purchase 10 shares of MNL stock for $10 per share) at the time she started working for MNL Corporation (5/1/Y1) four years ago when MNL’s stock price was $8 per share. Now that MNL’s stock price is $40 per share (8/15/Y5), she intends to exercise all of her options. After acquiring the 1,000 MNL shares with her options, she held the shares for over one year (10/1/Y6) and sold them at $60 per share.
b. What are MNL Corporation’s tax savings on the grant date (5/1/Y1), exercise date (8/15/Y5), and sale date (10/1/Y6)?
Answer:
b. What are MNL Corporation’s tax savings on the grant date (5/1/Y1), exercise date (8/15/Y5), and sale date (10/1/Y6)?
MNL Corporation will have no tax effects on the grant date and (5/1/Y1) and the date that Cammie sold the stocks (10/1/Y6).
The only tax effect results from the exercise date (8/15/Y5). Tax savings = (total amount of stocks exercised x market price at the time) x marginal tax rate = (1,000 stocks x $40) x tax rate = $40,000 x tax rate
Since no marginal tax rate is given in the question, we can calculate it for different options:
if tax rate = 21%, then tax savings = $40,000 x 21% = $8,400if tax rate = 35%, then tax savings = $40,000 x 35% = $14,000Assume your required internal rate of return on similar investments is 11 percent. What is the net present value of this investment opportunity? What is the going-in internal rate of return on this investment? Should you make the investment?
Answer:
Hello some parts of your question is missing attached below are the missing parts
You are considering the purchase of a small income-producing property for $150000 that is expected to produce the following net cash flows
End of year cash flow
1 $50000
2 $50000
3 $50000
4 $50000
Answer : a) $5122.28 (b) 12.59% (c) You should make the investment
Explanation:
Internal rate of return = 11 %
initial cash flows = $150000
period = 4 years
Find the NPV (net present value )( using present value tables)
= preset value of cash flows - initial cash flows
= ∑ present cash flows for 4 years - $150000
= $155122.28 - $150000 = $5122.28
The going-in internal rate of return on investment
N (number of years ) = 4
pv ( present value ) = $150000
PMT = -$50000
Fv ( future value ) = 0
IRR = 12.59% ( making use of the cash flow list in our financial calculator )
Sketches Inc. purchased a machine on January 1, 2016. The cost of the machine was $29,000. Its estimated residual value was $9,000 at the end of an estimated 5-year life. The company expects to produce a total of 20,000 units. The company produced 1,100 units in 2016 and 1,550 units in 2017. Required: a. Calculate depreciation expense for 2016 and 2017 using the straight-line method.
Answer:
Annual depreciation= $4,000
Explanation:
Giving the following information:
The cost of the machine was $29,000. Its estimated residual value was $9,000 at the end of estimated 5-year life.
To calculate the depreciation expense, we need to use the following formula:
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (29,000 - 9,000)/5
Annual depreciation= $4,000
Decreasing the discount rate is Group of answer choices a contractionary policy because it reduces banks' profit margins by lowering the return on lending. g
Complete Question:
Decreasing the discount rate is:
Group of answer choices:
a) an expansionary policy stance because consumers and businesses can now borrow funds directly from the Fed at a lower cost, thereby encouraging private spending.
b) a contractionary policy stance because the cost of borrowing funds falls, thereby encouraging consumption
and investment spending.
c) a contractionary policy because it reduces banks' profit margins by lowering the return on lending.
d) an expansionary policy stance because it will be less costly for banks to borrow funds and this puts
downward pressure on interest rates in the economy.
Answer:
d) an expansionary policy stance because it will be less costly for banks to borrow funds and this puts
downward pressure on interest rates in the economy.
Explanation:
Decreasing the discount rate is an expansionary policy stance because it will be less costly for banks to borrow funds and this puts downward pressure on interest rates in the economy.
An expansionary monetary policy can be defined as a strategic policy or actions of Central Bank such as "The Fed" that expand or increases the money supply so as to stimulate the economy. The expansionary monetary policies could also be adopted to lower short-term interest rates. Consequently, the effect of the expansionary policy would be to shift the aggregate demand curve to the right, therefore causing economic growth within the country.
Additionally, the interest rate charged on money supply or currencies to banks by the central bank is known as the discount rate.
In conclusion, when banks are charged lowered discount rates, it will cost them less to borrow money from the central bank and as a result there would be an increase in money supply; thus, availing them the opportunity to give out more loans to their customers.
Dave Krug finances a new automobile by paying $6,500 cash and agreeing to make 20 monthly payments of $580 each, the first payment to be made one month after the purchase. The loan bears interest at an annual rate of 12%. What is the cost of the automobile? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round PVA factor to 4 decimal places.)
Answer:
$16,966.68
Explanation:
the cost of the car = down payment + present value of the monthly installment payments
down payment = $6,500PV of monthly installment payments = $580 x 18.046 (PV annuity factor, 1%, 20 periods) = $10,466.68the cost of the car = $6,500 + $10,466.68 = $16,966.68
An elderly investor has a short-term investment time horizon, is very concerned about loss of liquidity and is very risk averse. Your main concern when making a recommendation to this client is:
Answer:
Preservation of Capital
Explanation:
In a scenario such as the one described in the question, the main recommendation to the client should be Preservation of Capital. Meaning that the primary goal that the client should look towards is preventing any loss in a portfolio, this is usually done by investing in the safest short-term instruments, such as Treasury bills and certificates of deposit, and staying away from assets that have more risk and have the possibility of becoming a loss.
Marshland Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: Cash dividends declared for the year $ 40,000 Cash dividends payable at the beginning of the year 17,000 Cash dividends payable at the end of the year 13,000 The amount of cash paid for dividends was: A. $36,000. B. $53,000. C. $40,000. D. $44,000. E. $57,000.
Answer: $44,000
Explanation:
The following information can be gotten from the question:
Cash dividends declared for the year = $40,000
Cash dividends payable at the beginning of the year = $17,000
Cash dividends payable at the end of the year = $13,000
Therefore, the amount of cash paid for dividends was:
= $40,000 + $17,000 - $13,000
= $57,000 - $13,000
= $44,000
"Mussatto Corporation produces snowboards. The following per unit cost information is available: direct materials $10, direct labor $4, variable manufacturing overhead $3, fixed manufacturing overhead $10, variable selling and administrative expenses $1, and fixed selling and administrative expenses $8. Using a 25% markup percentage on total per unit cost, compute the target selling price. (Round answer to 2 decimal places, e.g. 10.50.)"
Answer:
The target selling price =$45
Explanation:
The target selling price is the sum of the total unit cost plus 25% of the the unit cost
The target selling price = Total per unit cost + (25% × total unit cost)
The total unit cost is the sum of all the costs involved making the product available to the consumer.
The sum of direct material cost , labour cost variable manufacturing, fixed manufacturing overhead, variable selling and administrative expenses and fixed selling and administrative expenses.
Total unit cost = 10 + 4 + 3 + 10 + 1 + 8 = 36
The target selling price = 36 + (25% × 36) = $45
The target selling price =$45
Fritz, Inc.'s unit selling price is $75, the unit variable costs are $45, fixed costs are $150,000, and current sales are 10,000 units. How much will operating income change if sales increase b
The question is incomplete. Here is the complete question.
Fritz, Inc.'s unit selling price is $75, the unit variable costs are $45, fixed costs are $150,000, and current sales are 10,000 units. How much will operating income change if sales increase by 5,000 units
Answer:
$150,000 increase
Explanation:
Fritz has a unit selling price of $75
The unit variable cost is $45
The fixed costs are $150,000
The current sales are 10,000 units
The first step is to calculate the contribution margin
Contribution margin= sales price - variable cost
= $75-$45
= $30 per unit
Therefore, the change in the operating income when sales increase by 5,000 units can be calculated as follows
= 5,000 units × $30
= $150,000 increase
Hence the operating income will increase by $150,000 when there is an increase in the sales by 5,000 units
On May 1, Soriano Co. reported the following account balances along with their estimated fair values:
Carrying Amount Fair Value
Receivables $ 143,600 $ 143,600
Inventory 76,400 76,400
Copyrights 136,000 577,000
Patented technology 913,000 753,000
Total assets $ 1,269,000 $ 1,550,000
Current liabilities $ 197,000 $ 197,000
Long-term liabilities 676,000 658,300
Common stock 100,000
Retained earnings 296,000
Total liabilities and equities $ 1,269,000
On that day, Zambrano paid cash to acquire all of the assets and liabilities of Soriano, which will cease to exist as a separate entity. To facilitate the merger, Zambrano also paid $141,000 to an investment banking firm.
The following information was also available:
• Zambrano further agreed to pay an extra $85,000 to the former owners of Soriano only if they meet certain revenue goals during the next two years. Zambrano estimated the present value of its probability adjusted expected payment for this contingency at $42,500.
• Soriano has a research and development project in process with an appraised value of $244,000. However, the project has not yet reached technological feasibility and the project’s assets have no alternative future use.
Prepare Zambrano’s journal entries to record the Soriano acquisition assuming its initial cash payment to the former owners was (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
Receivables (Dr.) $143,600
Inventory (Dr.) $76,400
Copyrights (Dr.) $577,000
Patented Technology (Dr.) $913,000
Goodwill (Dr.) $32,800
Current Liability (Cr.) $197,000
Long term liability (Cr.) $658,300
Cash (Cr.) $845,000
Contingent Consideration (Cr.) $42,500
Professional Fee Expense (Dr.) $141,000
Cash (Cr.) $141,000
Paid of Investment banking firm
Explanation:
Total of Assets 1,710,000
Total of Liabilities 855,300
Net Assets 854,700
Total Fair value of identifiable Assets 854,700
Fair value of contingent Liability 42,500
Consideration Paid as Cash 845,000
Good will $32,800
Calculate the forecasted cost at completion if the total budgeted cost is $15,000, the cumulative actual cost is $10,000, and the cumulative earned value is $12,000.
Answer:
$13,000
Explanation:
The total budgeted cost is $15,000
The cumulative actual cost is $10,000
The cumulative earned value is $12,000
Therefore, the forecasted cost at completion can be calculated as follows
= Cumulative actual cost + ( Budgeted cost-Cumulative earned value)
= $10,000 + ($15,000-$12,000)
= $10,000 + $3,000
= $13,000
Hence the forecasted cost at completion is $13,000
Activity-Based Costing: Factory Overhead Costs
The total factory overhead for Bardot Marine Company is budgeted for the year at $1,039,600, divided into four activity pools: fabrication,, $448,000; assembly, $180,000; setup, $222,600; and inspection, $189,000. Bardot Marine manufactures two types of boats: speedboats and bass boats. The activity-base usage quantities for each product by each activity are as follows:
Fabrication Assembly Setup Inspection
Speedboat 7,000 dlh 22,500 dlh 50 setups 88 inspections
Bass boat 21,000 7,500 370 612
28,000 dlh 30,000 dlh 420 setups 700 inspections
Each product is budgeted for 5,000 units of production for the year.
a. Determine the activity rates for each activity.
Fabrication $ per direct labor hour
Assembly $ per direct labor hour
Setup $ per setup
Inspection $ per inspection
b. Determine the activity-based factory overhead per unit for each product. Round to the nearest whole dollar.
Speedboat $ per unit
Bass boat $ per unit
Answer:
Instructions are below.
Explanation:
Giving the following information:
Estimated factory overhead:
fabrication, $448,000
assembly, $180,000
setup, $222,600
inspection, $189,000
Fabrication Assembly Setup Inspection
Speedboat 7,000 dlh 22,500 dlh 50 setups 88 inspections
Bass boat 21,000 7,500 370 612
28,000 dlh 30,000 dlh 420 setups 700 inspections
Each product is budgeted for 5,000 units of production for the year.
First, we need to calculate the predetermined overhead rate for each activity using the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
fabrication= 448,000/28,000= $16 per direct labor hour
assembly= 180,000/30,000= $6 per direct labor hour
setup= 222,600/420= $530 per setup
inspection= 189,000/700= $270 per inspection
Now, we can allocate overhead to each product line:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Speed boat:
Allocated MOH= 7,000*16 + 22,500*6 + 50*530 + 88*270= $297,260
Bass boat:
Allocated MOH= 21,000*16 + 7,500*6 + 370*530 + 612*270= $742,340
Finally, the unitary overhead cost:
Speed boat= 297,260/5,000= $59.45
Bass boat= 742,340/5,000= $148.47
Johnson Trucking Company wants to determine a fuel surcharge to add to its customers' bills based on the number of miles driven to each area It wants to separate the fixed and variable portion of the truck's operating costs so it has a better idea of how distance affects these costs. Johnson Trucking Company has the following data available
Month Miles driven Total operating costs
January 16,200 22650
February 17000 23250
March 18400 25450
Apri 16500 22875
May 17400 23550
June 15300 21850
The variable cost per mile using the high-low method is:___________.
A. $1.16
B. $138
C. $1 66
D. $1.43
Answer:
Variable cost per unit= $1.16 per mile
Explanation:
Giving the following information:
January 16,200 $22,650
February 17000 $23,250
March 18400 $25,450
Apri 16500 $22,875
May 17400 $23,550
June 15300 $21,850
To calculate the variable cost per mile under the high-low method, we need to use the following formula:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (25,450 - 21,850) / (18,400 - 15,300)
Variable cost per unit= $1.16 per mile
a friend wants to borrow money from you. He states that he will pay you $3000 every 6 months for 12 years with the first payment exactly 3 years and six months from today. The interest rate is an APR of 5.3 percent with semiannual compounding. What is the value of the payments today?
Answer:
$45,111.41
Explanation:
For calculation of value of the payments today first we need to find out the value at 3 years which is shown below:-
Value at 3 years = PMT × (1 - (1 ÷ (1 + r^n))) ÷ r
= $3,000 × (1 - (1 ÷ (1.0265 ^24))) ÷ 0.0265
= $52,776.45
Now, The value of the payment today = Value at 3 year ÷ (1 + r^n)
= $52,776.45 ÷ (1.0265^6)
= $45,111.41
Therefore we have applied the above formula.
Barbara Hastings has no children of her own, but she does have a beloved niece named Ellen Laughridge. Attentive to the future financial needs of Ellen, Barbara secures a $500,000 life insurance contract from Chameleon Insurance Company, listing Ellen as the sole beneficiary. Barbara has every intention to inform Ellen of her new life insurance policy, but "life gets in the way," and she neglects to do so. Hastings dies on January 15, 2005. As part of her estate distribution, Ellen receives a chest-of-drawers from her dear aunt. On August 29, 2007, while rearranging her clothing in the chest-of-drawers, Ellen comes upon a secret compartment. In the secret compartment is an original copy of the life insurance contract. Ellen is overjoyed to see her name listed as beneficiary, and she contacts Chameleon Insurance Company immediately. Upon review of the policy, Chameleon denies coverage. Chameleon’s claims representative points to Section 15(b) of the policy, which specifically requires notification of the insured’s death no later than one year after death. It has been over two years and seven months since Barbara Hastings died. 1. Will Ellen recover the $500,000 in insurance proceeds? 2. Is it ethical for an insurance company to deny a claim on the basis of a "technicality?"
Answer:
1. Ellen would only be able to recover the $500,000 insurance proceed if she should be able to find a technicality in the insurance company's rules and regulation. This is because, strictly following the rules, there is nothing she can do regarding to the claim.
2. It is not ethical for the insurance company to deny the claim of Ellen on the basis of technicality but when viewed from another perspective, they are strictly following the rules of the insurance organization and applying it to the later. It is now left for the claimant to find another technicality on why he or she must be paid the insurance claim.
Explanation:
eal per capita GDP in Singapore in 1961 was about $450, but it doubled to about $900.00 by 1978. a. What was the average annual economic growth rate in Singapore over the 17.00 years from 1961 to 1978
Answer:
The answer is 4.16%
Explanation:
Per capita GDP is the average income earned per person in a given country during a given period of time usually a year.
Per capita GDP in Singapore in 1961 equals $450
Per capita GDP in Singapore in 1978 equals $900
Difference between 1978 and 1961 is 17 years.
The formula for economic growth rate is;
[(End value/beginning value)^1)/17] - 1
[($900/$450)^1/17] - 1
1.041613 - 1
0.0416
Expressed as a percentage:
4.16%
Calculate the earnings of workers A, B and C under the Straight Piece
Rate System and Merrick’s Differential Piece Rate System from the
following particulars.
Normal rate per hour: Rs. 5.40
Standard time per unit: 1 minute
Output per day is as follows.
Worker A – 390 units
Worker B – 450 units
Worker C – 600 units.
Working hours per day are 8
Answer:
Earnings of Workers:
Rates Systems
Worker Straight Piece Merrick's Differential Piece
A $35.10 $28.08
B $40.50 $32.40
C $54.00 $64.80
Explanation:
a) Data:
Normal rate per hour: Rs. 5.40
Standard time per unit: 1 minute
Output per day is as follows.
Worker A – 390 units
Worker B – 450 units
Worker C – 600 units
Working hours per day are 8
b) Calculations:
i) Standard units per day = 8 x 60 minutes = 480 units
ii) Earnings per day is as follows.
Worker A – 390 units :
Straight piece Wages = 390 / 60 x $5.40 = $35.10
Merrick's Earnings = 390/60 x $5.40 x 0.8 = $28.08
Worker B – 450 units :
Straight piece Wages = 450 / 60 x $5.40 = $40.50
Merrick's Earnings = 450/60 x $5.40 x 0.8 = $32.40
Worker C – 600 units:
Straight piece Earnings = 600 / 60 x $5.40 = $54
Merrick's Earnings = 600/60 x $5.40 x 1.2 = $64.80
c) The factor for multiplying the rate is obtained by dividing the units produced by the number of minutes in an hour, in order to convert output to a rate based on the hour.
d) The standard output per day helps Merrick in calculating the weights to be assigned to each worker and differentiate the slow worker from the superior worker (hence, the name: Merrick's Differential Piece Rate). The slow workers (those who produce below the standard output) are paid a rate lower than the standard rate by adding a weight of 0.8 as a punishment while the superior worker is assigned a weight of 1.20 as a reward for good performance. Meanwhile, a standard performer who produced 480 units will be paid the normal rate or weighed as 1.0.
Wagner Enterprises and Stone Services both disposed of an old asset. When completing the journal entry, Wagner Enterprises included a debit to Cash, but Stone Services did not. Why would the companies have this difference in the journal entry
Answer:
Wagner Enterprises and Stone Services
Disposal of old asset:
It could be that Stone Services exchanged its old asset with a new one with a company. In that situation, the debit goes to New Equipment, while the credit is to the old Equipment. Another reason could be that Stone Services sold the old asset on account. In this situation, the debit goes to the Accounts Receivable account, while the old asset is credited accordingly.
Explanation:
When a company disposes of an old asset, it credits the asset account and transfers the amount to the Sale of Asset account. The same is done for the accumulated depreciation, in reverse. When cash is realized from the disposal, the Sale of Asset account is credited, while Cash account is debited. Then, the difference in the Sale of Asset account will be a gain or a loss, depending on the net book value and the cash realized from the sale.
Sunland Company had net credit sales of $13017000 and cost of goods sold of $10351500 for the year. The average inventory for the year amounted to $1545000. The inventory turnover for the year is
Answer:
Inventory turnover= 6.7
Explanation:
Giving the following information:
cost of goods sold= $10,351,500
The average inventory for the year amounted to $1,545,000.
To calculate the inventory turnover, we need to use the following formula:
Inventory turnover= Cost of goods sold/ average inventory
Inventory turnover= 10,351,500 / 1,545,000
Inventory turnover= 6.7
Chester has negotiated a new labor contract for the next round that will affect the cost for their product Camp. Labor costs will go from $3.79 to $4.39 per unit. Assume all period and other variable costs remain the same. If Chester were to absorb the new labor costs without passing them on in the form of higher prices, how many units of product Camp would need to be sold next round to break even on the product?
Complete Question:
Chester has been selling widgets for $10, total variable costs are $4.40 and fixed costs are $100,000.
Chester has negotiated a new labor contract for the next round that will affect the cost for their product Cid. Labor costs will go from $2.79 to $3.39 per unit. Assume all period and other variable costs remain the same.
If Chester were to absorb the new labor costs without passing them on in the form of higher prices, how many units of product Cid would need to be sold next round to break even on the product?
Answer:
Chester
Break-even point = Fixed costs/Contribution margin per unit
= $100,000 / $5
= 20,000 units
Explanation:
a) Data and Calculations:
Selling price = $10
Old variable cost = $4.40
Additional variable cost = $0.60
New variable costs = $5 ($4.40 + $0.60)
Contribution per unit = Selling price minus variable cost per unit
= $5 ($10 - $5)
Fixed costs = $100,000
b) Chester's Break-even point (in units) is the number of units of a product Camp that Chester requires to sell in order to recover her fixed costs. The information provided by break-even analysis guides Chester in making decisions for the production of Camps and its marketing. Without identifying the units of Camp to be produced and sold in order to remain in business, all things being equal, Chester might short-produce or short-sell Camps and run the business unprofitably.
Builtrite has two bond issues outstanding(sold two separate groups of bonds over the years). One issue has a 7 year maturity and the other issue had a 12 year maturity.Both bonds are paying 4.25% annual interest. Investors only require a 3.75% return, which of the following statements is true?
a) The 7 year bond issue is riskier than the 12 year bond issue
b) Both bond issues have the same amount of risk
c) The 7 year bond price will be selling closer to par value
d) The 12 year bond price will be selling closer to par value
Answer:
C
Explanation:
Here, we want to select which of the given options in the question is true/correct.
From the question we can observe that the two bonds have required return less than coupon rate. Hence we can conclude that, both are premium bonds. The 7-years bond however. will have closer price to par value.
Bond prices will gradually decrease as we have a decrease in years to maturity. This means that the closer the year to maturity, the lesser the value of the bond price
Consider the market for minivans (Some would describe a minivan as a family car). Looking at the two statements, which one is true and which one is false? Then again, are they both true or both false? Statement 1: People decide to have fewer children. The demand curve for minivans will shift to the right. Statement 2: The stock market crashes lowering people’s wealth (Hint: Minivan would be considered a normal good). The demand curve for minivans will shift to the right.
Answer:
both statements are false
Explanation:
if People decide to have fewer children, there would be less demand for minivans as a result the demand curve would shift to the left.
also, if The stock market crashes lowering people’s wealth and minivans are normal goods, the demand for minivans would fall and the demand curve would shift to the left.
A leftward shift signifies a fall in demand while a rightward shift signals a rise in demand
Normal goods are goods that are goods whose demand increases when income increases and falls when income falls
Find end inventory and cost of goods
Date Transactions Units Unit Cost Total Cost
June 1 Beginning inventory 16 $ 340 $ 5,440
June 7 Sale 11
June 12 Purchase 10 330 3,300
June 15 Sale 12
June 24 Purchase 10 320 3,200
June 27 Sale 8
June 29 Purchase 10 310 3,100
$ 15,040
Answer:
End inventory = $4,730
Cost of goods sold = $10,310
Explanation:
Note: This question is not complete. The complete question is therefore provided in the attached Microsoft word document before answering the question as follows:
a. Calculation of ending inventory
Number of units of Beginning inventory remaining unsold = 16 - 11 - 3 - 1 = 1 unit
Value of number of units Beginning inventory remaining unsold = 1 * $340 = $340
Number of units June 12 Purchase remaining unsold = 10 - 9 = 1 unit
Value of number of units June 12 Purchase remaining unsold = 1 * $330 = $330
Number of units of June 24 Purchase remaining unsold = 10 - 7 = 3 units
Value of number of June 24 Purchase remaining unsold = 3 * $320 = $960
Value of number of June 29 Purchase remaining unsold = 10 * $310 = $3,100
Therefore, End inventory is the addition of all the values of units remaining unsold as follows:
End inventory = $340 + $330 + $960 + $3,100 = $4,730
b. Calculation of cost of goods sold
June 7 cost of goods sold = 11 * $340 = $3,740
June 15 cost of goods sold = (3 * $340) + (9 * $330) = $3,990
June 27 cost of goods sold = (1 * $340) + (7 * $320) = $2,580
Cost of goods sold can therefore be calculated as follows:
Cost of goods sold = June 7 cost of goods sold + June 15 cost of goods sold + June 27 cost of goods sold = $3,740 + $3,990 + $2,580 = $10,310
If a country produces only two products, then by looking at the country's production possibilities curve (PPC), one can see that the opportunity cost of producing one of the products is the same as (equal to) the marginal cost of producing that product.
A. True
B. False
Answer:
A. True
Explanation:
Marginal cost is the cost of the good or service is the opportunity cost of producing one or one of the units of it. It's the cost of producing one r ore unit of good. Marginal cost includes the cost included the producing of every unit. Opportunity cost is the alternative cost incurred by not using the opportunity cost of the other product."If the regulations for environmental protection were strictly adhered to and industries, cities, and individuals considered the environment crucial for survival and a thriving market, what would be the benefits from this change
Explanation:
The benefits arising from complying with an environmental protection regulation would be diverse for society, for companies and for the environment as a whole.
It is ideal to recognize the scarcity of natural resources, and knowing how to preserve them as citizens is everyone's duty. Environmental awareness and compliance with regulations would lead to significant changes in quality of life, air, water, decrease the greenhouse effect, decrease respiratory diseases, etc.
For the industry, complying with environmental regulation makes it better positioned in the market, attracts more investors, motivates employees more, reduces unnecessary risks and costs in addition to enhancing the continuous improvement of processes as a whole.
The Grondas, who owned a party store along with land, fixtures, equipment, and a liquor license, entered into a contract to sell their liquor license and fixtures to Harbor Park Market in an agreement that was expressly conditioned on approval by the Grondas' attorney. The Grondas submitted the contract to their attorney but before the attorney had approved it, they received a second, better offer and submitted that contract to the attorney as well. The attorney reviewed both agreements and approved the second one. Harbor Park Market sued the Grondas for breach of contract. Will their suit succeed?
Answer:
No the suit will not succeed as their is no agreement
Explanation:
The contract was conditional contract. As the condition explicitly said that, the right to agree on terms and conditions is explicitly attorney's right. When the attorney has not agreed on the terms and conditions of Harbor Park, the company hasn't formed any contract. Furthermore, there is no limitation on Grondas to consider other available options and attorney is also not obliged to agree to Harbor's offer.
Thus the suit that says Grondas has breached the contract is meaningless and will not succeed in the court.