Answer: analyze, informational reports;
the use of contractions
Explanation:
Focused reports help managers (analyze) the challenge before recommending solutions. Reports that present data without conducting analysis are (informational reports)
b. The option that contributes to an informal writing style is ( the use of contractions). Other informal writing styles are:
• First-person pronouns
• Active-voice verbs
• Conversational language
Sarah Sandoval is a coffee farmer trying to decide how many tons of coffee to produce. She can sell each ton of coffee for $2000. The cost of producing the first ton of coffee is $500, for the second ton, it's $1000. For each additional ton of coffee produced, the marginal cost increases by $500. How many tons of coffee should Sarah produce, and what is the total cost of her coffee production
Answer:
She will produce four tons at a total cost of $5,000
Explanation:
For each additional ton of coffee produced the marginal cost is increase by $500. This means that when Sarah reaches the fourth ton of coffee the cost of producing the ton of coffee would be $2,000.
At this point she is neither making any profit nor any loss. So, this would be her maximum limit of producing the ton of coffee.
The total cost of producing the four tons of coffee would be $5,000 ($500 for first + $1,000 for second + $1,500 for third + $2,000 for fourth).
Robin, a middle management employee at a large, publicly traded company, becomes aware of accounting irregularities in financial reports (which are used internally and which also form the basis for the required filings with the Securities and Exchange Commission, as well as local and state regulators) submitted by his boss, Brooke, which suggest that Brooke has diverted $10,000.00 to the company's sustainability initiative rather than distributing the funds to the purchasing department budget as intended. The sustainability initiative has facilitated major improvements in local water quality standards and, as a result, the overall health of the community has markedly increased, at a sizeable savings of medical costs (approximately $50,000.00 in medical savings.)
Required:
What should Robin do?
Answer:
From a strict ethical point of view, Robin has the responsibility to report Brooke for the misappropriation of funds to the Sustainability Initiative as irregularities in financial reports can land the company into serious trouble with regulators.
Continuing further, Robin can report this issue to the company's compliance department or Human resource officer or whoever else is delegated with dealing with such scenarios.
Before Robin does this however, he should properly think about it using some ethical theories such as Utilitarianism. Under this theory, the end results are all that matters. Is Brookes helping by diverting funds, evidence suggests that Brooke is because the initiative has improved the lives of the community.
However, the money that was to go to the Purchasing department would have led to more inventory being purchased and the company therefore making more sales. Brooke's actions could therefore be hurting the company.
Robin should weigh this as well the potential problems the company could get into by submitting irregular statements against the positive effects of Brooke's actions. If Robin decides that the good of the company comes before the good of the community, he should report to the relevant officer. If not, Robin can keep quiet and hope that the regulators show leniency when the irregularities are discovered based on the positive effects it brought.
Assume that direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like modifications made to product S47 that would increase the variable costs by $2.00 per unit and that would require an investment of $15,000.00 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. The annual financial advantage (disadvantage) for the company as a result of accepting this special order should be:
Answer:
$5,370
Explanation:
Missing word: "A customer has requested that Lewelling Corporation fill a special order for 2,100 units of product S47 for $26 a unit. While the product would be modified slightly for the special order, product S47's normal unit product cost is $19.20:
Direct materials $5.70, Direct labor 3.00, Variable manufacturing overhead 2.80, Fixed manufacturing overhead 7.70, Unit product cost $19.20"
Incremental analysis
Incremental revenue (2100*26) $54,600
Incremental cost
Direct material (2100*$5.7) $11,970
Direct labor (2,100*$3) $6,300
Variable manuf. overhead (2,100*$80) $5,880
Additional cost (2100*$2.00) $4,200
Special molds $15,000
Total incremental cost $49,230
Incremental profit (loss) $5,370
The annual financial advantage (disadvantage) for the company as a result of accepting this special order should be $5,370.
ABC Corporation has total assets of 120 million, total liabilities of 80 million, Goodwill of 12 million, and 4 millions of shares outstanding. If you believe the reasonable price to tangible book value should be 1.6 for this company, what is the implied share price of ABC
Answer: $16
Explanation:
Implied share price = Book value per share * Price to tangible book value
Book value per share = (Assets - Liabilities) / Number of shares outstanding
= (120 - 80) / 4
= $10
Implied share price = 10 * 1.6
= $16
Identify whether each of the following examples belongs in M1 or M2. If an example belongs in both, be sure to check both boxes.
Example M1 M2
Susan has $8,000 in a two-year certificate of deposit (CD).
Larry has a roll of quarters that he just withdrew from the bank to do laundry.
Raphael has $25,000 in a money market account.
Answer and Explanation:
The identification is as follows:
As we know that
M! money supply involved all the currecies that have physical existance i.e. notes, coins, demand deposits etc
While on the other hand, M2 involves M1 + near money i.e. mutual funds, checking deposits, money market etc
Since Susan has 2 year CD so it would be classified as a M2 money supply
Since larry withdraw from the bank so it would be included in M1 and M2
And, since raphael has $25,000 in money market so would be classified as a M2 money supply
Efficient private provision of pure public goods is difficult because too much will be demanded as each consumer is forced to buy his or her own units of the public good too little will be demanded because private provision leads to higher marginal costs than public provision. too much will be produced as fi rms compete with each other for the public’s dollars. too little will be demanded as, individually, consumers choose not to pay the full cost of units of the good.
Answer:
too little will be demanded as, individually, consumers choose not to pay the full cost of units of the good.
Explanation:
Factors of production can be defined as the fundamental building blocks used by individuals or business firms for the manufacturing of finished goods and services in order to meet the unending needs and requirements of their customers.
The four factors of production are;
I. Land: this refers to the natural resources and raw materials extracted from the ground or grown in the soil e.g oil, gold, rubber, cocoa, etc.
II. Labor (working): this is the human capital or workers who are saddled with the responsibility of overseeing and managing all the aspects of production.
III. Capital resources: it includes the physical assets used for production of goods and services such as equipment, money, plant, etc.
IV. Entrepreneurship: it is intellectual capacity required to drive a business and the skills to develop an idea into a money making venture (business).
These four (4) factors of production when combined effectively and efficiently are used for the manufacturing or production of goods and services that meets the unending requirements or needs of the consumers.
Circular flow model is an economic model that is used by economists to show or demonstrate how money, goods and services move from one economic agent to another such as producer, workers, wholesaler, retailer and consumers (households).
An efficient private provision of pure public goods is difficult because too little will be demanded as, individually, consumers choose not to pay the full cost of units of the good.
At the present time, Perpetualcold Refrigeration Company (PRC) has 15-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,329.55 per bond, carry a coupon rate of 12%, and distribute annual coupon payments. The company incurs a federal-plus-state tax rate of 35%. If PRC wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt (rounded to two decimal places)
Answer:
Perpetualcold Refrigeration Company (PRC)
The reasonable estimate for PRC's after-tax cost of debt is:
= 0.08.
Explanation:
a) Data and Calculations:
Face value of 15-year noncallable bonds outstanding = $1,000 per bond
Current market price per bond = $1,329.55
Coupon rate of bonds = 12% per annum
Federal-plus-state tax rate = 35%
Cost of new debt = $120 per annum ($1,000 * 12%)
After-tax cost of debt = $120 (100% - 35%)
= $120 * 65%
= $78
= $78/$1,000 = 0.078
= 0.08
b) The cost of PRC's new debt is the calculated rate that the company will pay on its new debt. The major differentiating factor between the cost of debt and the after-tax cost of debt is the deduction of interest expense. In PRC's capital structure decisions, determining the cost of debt, especially the after-tax cost of debt, and comparing it with the cost of equity involve some rigorous financial computations.
Warrants exercisable at $15 each to obtain 81000 shares of common stock were outstanding during a period when the average market price of the common stock was $20. Application of the treasury stock method for the assumed exercise of these warrants in computing diluted earnings per share will increase the weighted average number of outstanding shares by:_________
a. 20250.
b. 81000.
c. 27000.
d. 60750.
Answer:
a. 20250
Explanation:
Calculation to determine diluted earnings per share will increase the weighted average number of outstanding shares
Diluted earnings per share=[$81,000- (81,000 × $15) ÷ $20 ]
Diluted earnings per share=[$81,000-($1,215,000÷$20)]
Diluted earnings per share=$81,000-$60,750
Diluted earnings per share=$20,250.
Therefore in computing diluted earnings per share will increase the weighted average number of outstanding shares by:$20,250
you observe thundering herd common stoc k selling for $40.00 per share. the next dividen is ecoected to be $2.00, and is expected to grow at a 4% annual rate forever. If your requir4ed rate of return is 12%, you should purchase the stock? A. Yes, because the presemt value of the expected future cash flows is greater than $40 g
Answer:
no, because the present value of the expected future cash flows is less than $40
Explanation:
The computation of the share price present value is given below:
= Next dividend ÷ (Required rate of return - growth rate)
= $2 ÷ (12% - 4%)
= $25
As we can see that the share price present value would be $25 but the stock selling price is $40 so the present value would be lower than $40 that means the stock should not be purchased
What would you prefer, a savings account that pays 10% interest compounded semiannually or one that pays 10% interest compounded daily? Explain.
Answer:
10% interest compounded daily will be preferable
Explanation:
In the first case, compounding occurs twice (semiannually)
In the second case, compounded occurs 365 days.
Note that compounding is earning interest on principal plus the already accumulated interest amount.
In the first case the Annual Percentage Rate (APR) would be:
= (1 + 10%/2)^2 - 1
= 0.1025
= 10.25%
In the second case the Annual Percentage Rate APR would be:
= (1 + 10%/365)^365 - 1
= 1.00027397^365 - 1
= 1.105154 - 1
= 0.105154
= 10.51%
So, 10% interest compounded daily will be preferable as it yield more.
Turnbull Co. is considering a project that requires an initial investment of $1,708,000. The firm will raise the $1,708,000 in capital by issuing $750,000 of debt at a before-tax cost of 11.1%, $78,000 of preferred stock at a cost of 12.2%, and $880,000 of equity at a cost of 14.7%. The firm faces a tax rate of 40%. What will be the WACC for this project
Answer:
11.06%
Explanation:
Calculation to determine What will be the WACC for this project
First step is to calculate the Weight of Debt
Weight of Debt = $750,000 / $1,708,000
Weight of Debt = 0.4391
Second step is to calculate the Weight of Preferred Stock
Weight of Preferred Stock = $78,000 / $1,708,000
Weight of Preferred Stock = 0.0457
Third step is to calculate the Weight of Equity
Weight of Equity = $880,000 / $1,708,000
Weight of Equity = 0.5152
Fourth step is to calculate After Tax Cost of Debt
After Tax Cost of Debt = 11.1% * (1 – 0.40)
After Tax Cost of Debt = 6.66%
Now let calculate WACC using this formula
WACC = (Weight of Debt * After Tax Cost of Debt) + (Weight of Preferred Stock * Cost of Preferred Stock) + (Weight of Equity * Cost of Equity)
Let plug in the formula
WACC = (0.4391 * 0.0666) + (0.0457 * 0.1220) + (0.5152 * 0.1470)
WACC = 0.02924406+0.0055754+0.0757344
WACC =0.1106*100
WACC =11.06%
When the existing spot rate exceeds the exercise price, a call option is ____, and a put option is ____. Group of answer choices out of the money; in the money out of the money; out of the money in the money; in the money in the money; out of the money
Answer:
in the money; out of the money.
Explanation:
Secondary market can be defined as a market where various investors sell and buy securities from other investors.
Some examples of secondary market around the world are New York Stock Exchange (NYSE), NASDAQ, London Stock Exchange (LSE) and National Stock Exchange (NSE).
On the other hand, the primary market refers to the market where these securities that are being sold are issued or created.
In trading and investment, a stock option can be defined as a contract that states that the buyer as the right to buy (call) or sell (put) an asset at a particular price at any time but necessarily obligational. Thus, it is strictly at the discretion of the buyer (investor).
Generally, in a long (buy) position, a buyer hopes that the price of stocks will rise because he or she will typically profit from a rise in price.
However, a short (buy) position, a buyer hopes that the price of stocks will fall because he or she will typically profit from a fall in price.
A spot rate is the cash or exchange rate placed on a contract in the stock exchange market.
When the existing spot rate exceeds the exercise price, a call option is in the money, and a put option is out of the money.
Answer:
a a b c
Explanation:
) when originally issued, an investment in bonds of Flushing Dough, Inc., promised to provide an annual coupon of 7.50%. The bonds have 4 years until maturity, a market price of $735, and are expected to pay all coupon on time. At maturity, however, the bonds are only forecasted to pay 84% of their par value. What is the likely yield to maturity on the bonds
Answer:
The likely yield to maturity on the bonds is 10.23%.
Explanation:
The likely yield to maturity on the bonds can be calculated using the following RATE function in Excel:
YTM = RATE(nper,pmt,-pv,fv) .............(1)
Where;
YTM = likely yield to maturity on the bonds = ?
nper = number of periods = number of years until maturity = 4
pmt = annual coupon payment = annual coupon rate * Face value = 7.50% * $1,000 = $75 = 75
pv = present value = market price = $735 = 735
fv = face value or par value of the bond = 1000
Substituting the values into equation (1), we have:
YTM = RATE(40,75,-735,1000) ............ (2)
Inputting =RATE(40,75,-735,1000) into a cell in an excel (Note: as done in the attached excel file), the YTM is obtained as 10.23%.
Therefore, the likely yield to maturity on the bonds is 10.23%.
Fickle Company purchased a machine at a total cost of $220,000 (no residual value) at the beginning of 2018. The machine was being depreciated over a 10-year life using the sum-of-the-years'-digits method. At the beginning of 2021, it was decided to change to straight-line. An accompanying disclosure note would include each of the following except: Multiple Choice The cumulative effect of the change. Justification that the change is preferable. The effect of a change on per share amounts affected for all periods reported. The effect of a change on any financial statement line items affected for all periods reported.
Answer:
Fickle Company
An accompanying disclosure note would include each of the following except:
The effect of a change on per share amounts affected for all periods reported.
Explanation:
a) Data and Analysis:
Total cost of machine = $220,000
Useful life of machine = 10 years
Method of depreciation = the sum-of-the-years'-digits method
b) The sum-of-the-years'-digits method of depreciation adds up the years (e.g. 10, 9, 8, 7, 6, 5, 4, 3, 2, 1) to obtain 55 as the sum-of-the-years'-digits denominator. Each year's depreciation is then based on the number of years remaining. For example, the depreciation expense for year 1 will be $40,000 (10/55 * $220,000).
In disclosing this change in accounting method, that is, from the sum-of-the-years'-digits method to the straight-line method of depreciation, Fickle does not need to disclose the effect of the change on per share basis.
When Crossett Corporation was organized in January, Year 1, it immediately issued 4,000 shares of $50 par, 6 percent, cumulative preferred stock and 50,000 shares of $20 par common stock. Its earnings history is as follows: Year 1, net loss of $35,000; Year 2, net income of $125,000; Year 3, net income of $215,000. The corporation did not pay a dividend in Year 1.
Required:
a. How much is the dividend arrearage as of January 1, Year 1?
b. Assume that the board of directors declares a $25,000 cash dividend at the end of year 1 (remember that the year 1 and year 2 preferred dividends are due). How will the dividend be divided between the preferred and common stockholders?
Answer:
a. $0
The company was organized in January, Year 1. They do not have to pay dividends because the company just started operations. The cumulative dividends are only to be paid at the end of the period so there is no dividend arrear here.
b. Preferred shareholders are meant to get:
= 4,000 shares * 50 * 6%
= $12,000 per year
As they are owed $12,000 from the first year and are now owed for the second, the dividends they will get is:
= 12,000 + 12,000
Preferred Dividends = $24,000
Ordinary shareholders get what is left:
= 25,000 - 24,000
= $1,000
In order to motivate our sales force to increase sales, we decided to increase our commissions and salaries and increase marketing. At the same time, our supplier increased its prices, and we felt we could pass that cost increase on to our customers in the form of price increase. However, with the additional pressure to make sales, coupled with the increased sales price, we had to loosen credit terms on sales. We also had to lease a little more distribution space and acquire another truck to handle the volume increase. Our shipping expense relates to gasoline on deliveries. Luckily, gas prices went down from what we originally expected this year.
In the table below, classify EACH ACCOUNT on the budget according to whether the variances in the performance report are consistent or inconsistent with the client’s story, or unexplained by the client’s story. Place an "X" in the appropriate column. If the Revenue/Spending Variance and Activity Variance differ with respect to one account (i.e., one is consistent and one is inconsistent) then indicate which belongs in which column.
Consistent
Inconsistent
Unexplained
Sales revenue
Cost of Goods Sold
Commission
Shipping Expense
Bad debt expense
Salaries
Lease of distribution center
Depreciation of fleet and equip
Advertising
Office rent, phone, internet
Answer:
Sales Revenue - Inconsistent
Cost of Goods Sold - Inconsistent
Commission - Consistent
Shipping expense - Inconsistent
Bad debt expense - Unexplained
Salaries - Consistent
Lease of distribution center - Consistent
Depreciation of fleet and equipment - Inconsistent
Advertising - Consistent
Office rent, Phone, Internet - Inconsistent
Explanation:
The increase in selling price will result in change in the revenue figure. The cost of distribution is increased due to handling the addition volume. This will result in an increase in shipping expense and cost of goods sold. Salaries and commission of the staff will remain consistent as there will be no change due to increase of selling price.
Refries Refrigerator Company manufactures ice-makers for installation in refrigerators. The costs per unit for 20,000 units of ice-makers, are as follows:
Direct materials. ....... $7
Direct labor.......... $12
Variable overhead ......$5
Fixed overhead............$10
Total costs ...................$34
Cool Compartments Inc. has offered to sell 20,000 ice-makers to Refrigerator Company for $28 per unit. If Refrigerator accepts Cool Compartments' offer, the facilities used to manufacture ice-makers could be used to produce water filtration units. Revenues from the sale of water filtration units are estimated at $80,000, with variable costs amounting to 60% of sales. In addition, $6 per unit of the fixed overhead associated with the manufacture of ice-makers could be eliminated. For Refrigerator Company to determine the most appropriate action to take in this situation, the total relevant costs of make vs. buy, respectively, are:____.
a. $600,000 vs. $560,000.
b. $648,000 vs. $528,000.
c. $600,000 vs. $528,000.
d. $680,000 vs. $440,000.
Answer:
c. $600,000 vs. $528,000.
Explanation:
The computation of the relevant cost of make & buy is given below:
Total relevant cost of making the product is
= (cost per unit - unavoidable fixed cost per unit ) × 20,000 units
= ($34 - $4 ) × 20,000 units
= $600,000.
And, Total relevant cost of buying is
= (cost of buy per unit × 20,000 units ) - Contribution sale of water filtration = ( $28 × 20,000 units ) - ($80,000 - 60% of $80,000)
= $528,000
hence, the option c is correct
Latasha's Performance Pizza is a small restaurant in San Francisco that sells gluten-free pizzas. Latasha's very tiny kitchen has barely enough room for the two ovens in which her workers bake the pizzas. Latasha signed a lease obligating her to pay the rent for the two ovens for the next year. Because of this, and because Latasha's kitchen cannot fit more than two ovens, Latasha cannot change the number of ovens she uses in her production of pizzas in the short run.
However, Latasha's decision regarding how many workers to use can vary from week to week because her workers tend to be students. Each Monday, Latasha lets them know how many workers she needs for each day Of the week, In the short run, these workers are __________inputs, and the ovens are ___________ Inputs.
Answer: variable; fixed
Explanation:
In the short run, these workers are variable inputs, and the ovens are fixed Inputs.
In the short run, variable inputs in production can be changed to adapt to the changing economic conditions while fixed inputs cannot. In the long run however, all inputs are variable and so can be changed.
As this is the short run and the workers can be changed, they are the variable inputs.
The ovens however, cannot be changed so the ovens are the fixed inputs.
Azule Co. manufactures in two sequential processes, cutting and binding. The two departments report the information below for a recent month. Cutting Binding Beginning work in process Transferred in from cutting dept. $ 1,200 Direct materials $ 1,095 2,862 Conversion 3,650 3,800 Costs added during March Direct materials $ 13,740 $ 9,332 Conversion 18,300 19,475 Transferred in from cutting dept. 17,395 Transferred to finished goods 31,000 Determine the ending balances in the Work in Process Inventory accounts of each department.
Answer and Explanation:
The computation of the ending balance in the work in process inventory for each department is shown below:
For Cutting department
= Direct material + conversion + cost added for direct material + cost added for conversion - transferred in from cutting department
= $1,095 + $3,650 + $13,740 + $18,300 - $17,395
= $19,390
And, for binding department
= Transferred in from cutting department Direct material + conversion + cost added for direct material + cost added for conversion - transferred to finished goods
= $1,200 + $2,862 + $3,800 + $9,332 + $19,475 - $31,000
= $5,669
what is money placed in a checking account called
Answer:
bank account
Explanation:
In order to safeguard the public health, environment, public beaches, water quality, and economy of south San Diego County, California, and Tijuana, Mexico, federal agencies in the United States and Mexico developed four alternatives for treating wastewater prior to discharge into the ocean. The project will minimize untreated wastewater flows that have caused chronic and substantial pollution in the Tijuana River Valley, the Tijuana River National Estuarine Research Reserve, coastal areas used for agriculture and public recreation, and areas designated as critical habitat for federal- and state-listed endangered species. For the costs and benefits estimated, which alternative should be selected on the basis of a B/C analysis at 6% per year and a 40-year project period?
Pond System Expand Plan Advanced Prima Partial Secondary
Capital cost, $5.8 76 2 48
M&O cost, $/year 5.5 5.3 2.1 4.4
Benefits, $/year 11.1 12.0 2.7 8.3
Answer:
Following are the solution to these question:
Explanation:
Follows are the AW calculation to the total cost and add according to the rank of the increasing costs.
[tex]= 58 (0.06646) + 5.5\\= \$ 9.35[/tex]
[tex]AWexpand = 76(\frac{A}{P}, 6\%, 40) + 5.3[/tex]
[tex]= 2 (0.06646) + 2.1\\\\= \$ 2.23\\\\[/tex]
[tex]AWprimary = 2(\frac{A}{P}, 6\%, 40) + 2.1\\\\[/tex]
[tex]= 2 (0.06646) + 2.1\\\\= \$ 2.23\\\\[/tex]
[tex]AW partial = 48(\frac{A}{P}, 6\%, 40) + 4.4\\\\[/tex]
[tex]= 48 (0.06646) + 4.4\\\\= \$ 7.59[/tex]
Calculating the benefits of the directly estimate on the DN of the first alternative and rank as follows: DN, Primary, Partial, Pond, Expand
[tex]Primary \ DN: \frac{\Delta B}{с} = \frac{2.7}{2.23}= 1.21 \ eliminate\ DN\\\\Partial \ Primary: \frac{\Delta B}{с} =\frac{(8.3-2.7)}{(7.59-2.23)}= 1.04 \ eliminate \ Primary\\\\Pond \ Partial: \frac{\Delta B}{с} = \frac{(11.1 - 8.3)}{(9.35-7.59)}= 1.59 \ eliminate \ Partial\\\\Expand \ Pond: \frac{\Delta B}{с} = \frac{(12.0 - 11.1)}{(10.35 - 9.35)}= 0.90\ eliminate\ Expand\\\\[/tex]
select the Pond system
Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division A Division B Division C Sales $ 5,100,000 $ 9,100,000 $ 8,200,000 Average operating assets $ 1,020,000 $ 2,275,000 $ 1,640,000 Net operating income $ 214,200 $ 746,200 $ 118,900 Minimum required rate of return 17.00 % 32.80 % 14.00 % Required: 1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. 2. Compute the residual income (loss) for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 19% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity
Answer:
1. Return on Investment = Net operating income (NOI)/Average operating assets (AOA) * 100
Division A = 21%
Division B = 32.8%
Division C = 7.25%
2. Residual income (loss) = Operating Income - (Operating Assets x Target Rate of Return)
Division A = $40,800
Division B = $0
Division C = ($110,700)
3-a. If performance is being measured by ROI, Divisions A and C will accept the opportunity, while Division B will reject it because the actual rate of return of 19% is less than the minimum required rate of return of 32.8%.
3-b. Divisions A and C will accept the opportunity, while Division B will reject it.
Explanation:
a) Data and Calculations:
Selected sales and operating data for three divisions of different structural engineering firms are given as follows:
Division A Division B Division C
Sales $ 5,100,000 $ 9,100,000 $ 8,200,000
Average operating assets $ 1,020,000 $ 2,275,000 $ 1,640,000
Net operating income $ 214,200 $ 746,200 $ 118,900
Minimum required rate of return 17.00 % 32.80 % 14.00 %
1. Return on Investment = Net operating income (NOI)/Average operating assets (AOA) * 100
= 21% 32.8% 7.25%
Division A = 21% ($214,200/$1,020,000 * 100)
Division B = 32.8% ($746,200/$2,275,000 * 100)
Division C = 7.25% ( $118,900/$1,640,000 * 100)
2. Residual income (loss) = Operating Income - (Operating Assets x Target Rate of Return)
Division A = $40,800 ($214,200 - ($1,020,000 * 17%) )
Division B = $0 ($746,200 - ($2,275,000 * 32.8%))
Division C =($110,700) ( $118,900 - ($1,640,000 * 14%))
Investment opportunity that would yield a 19% rate of return:
Division A Division B Division C
Sales $ 5,100,000 $ 9,100,000 $ 8,200,000
Average operating assets $ 1,020,000 $ 2,275,000 $ 1,640,000
Net operating income (19%) $ 193,800 $ 432,250 $ 311,600
Minimum required rate of return 17.00 % 32.80 % 14.00 %
3-a. If performance is being measured by ROI, Divisions A and C will accept the opportunity, while Division B will reject it because the actual rate of return of 19% is less than the minimum required rate of return of 32.8%.
3-b. Divisions A and C will accept the opportunity, while Division B will reject it.
Residual income (loss) = Operating Income - (Operating Assets x Target Rate of Return)
Division A = $20,400 ($193,800 - ($1,020,000 * 17%))
Division B = ($313,950) ($432,250 - ($2,275,000 * 32.8%))
Division C = $82,600 ($311,600 - ($1,640,000 * 14%))
A firm is a pure monopoly when: Group of answer choices there are only a few other very large firms selling similar products. it can sell all it can produce at any price it chooses. it is the only seller of a product that has very few close substitutes and entry into the market in the long run is unrestricted. it is the only seller of a unique product and barriers to entry prevent other sellers from entering the market in the long run.
Answer: it is the only seller of a unique product and barriers to entry prevent other sellers from entering the market in the long run.
Explanation:
A pure monopoly is referred to as a single supplier of a particular product in an industry. In such market, there no no substitute exists and such firms usually have a large market share.
They are price makers, profit maximizer, discriminate on prices and have a high barriers to entry. Due to their economies of scale, they prevent other sellers from entering the market in the long run.
Delaware Chemical Company uses oil to produce two types of plastic products, P1 and P2. Delaware budgeted 30,500 barrels of oil for purchase in June for $75 per barrel. Direct labor budgeted in the chemical process was $274,500 for June. Factory overhead was budgeted at $411,800 during June. The inventories on June 1 were estimated to be:
Oil $19,200
P1 12,900
P2 11,000
Work in process 15,900
The desired inventories on June 30 were:
Oil $21,100
P1 11,800
P2 10,400
Work in process 16,500
Required:
Use the preceding information to prepare a cost of goods sold budget for June.
Answer:
See below
Explanation:
Preparation of cost of goods sold budget for June
Finished goods inventory June 1
Working in process Inventory June 1
Direct materials
Direct materials inventory, June 1
Direct material purchases
Cost of direct materials available for sale
Suppose a Geographic Information Systems (GIS) research firm is approached by the state legislature and asked to provide data about vehicle movement within the state for all cars that can be tracked with direct GPS or through the owner's smartphone. Based on the movement of the cars (and phones) over a certain time, the police can decide when a car was speeding. They intend on using this data to send speeding tickets to those who moved too far, too fast. Also, if an underage driver spends too long parked by an adult only establishment, police will be notified to investigate. If you are the research firm, would you supply the data?
Answer:
No. I would not supply the data.
Explanation:
Was the GIS research firm commissioned by the state legislature? The state lacks the authority to demand the GIS information. Moreover, the data subjects did not give their consent for the information to be used for this purpose. It will be a violation of data privacy rules to provide the data when the consents of the data subjects were not obtained.
Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows:
Direct materials: 5 pounds at $9 per pound $45
Direct labor: 3 hours at $14 per hour 42
Variable overhead: 3 hours at $8 per hour 24
Total standard cost per unit $111
The planning budget for March was based on producing and selling 28,000 units. However, during March the company actually produced and sold 34,000 units and incurred the following costs:
a. Purchased 180,000 pounds of raw materials at a cost of $8.50 per pound. All of this material was used in production.
b. Direct laborers worked 69,000 hours at a rate of $15 per hour.
c. Total variable manufacturing overhead for the month was $565,200.
Required:
a. What raw materials cost would be included in the company's planning budget for March?
b. What raw materials cost would be included in the company's flexible budget for March?
c. What is the materials price variance for March?
Answer:
Preble Companya. The raw materials cost for the planning budget for March is:
= $1,260,000
b. The raw materials cost included in the company's flexible budget for March
= $1,530,000
c. The materials price variance for March is:
= $90,000
Explanation:
a) Data and Calculations:
Standard Cost Card Per Unit:
Direct materials: 5 pounds at $9 per pound $45
Direct labor: 3 hours at $14 per hour 42
Variable overhead: 3 hours at $8 per hour 24
Total standard cost per unit $111
Planning budget production and sales for March = 28,000 units
Actual production and sales for March = 34,000 units
Purchase of 180,000 pounds of raw materials / 5 = 36,000 units
Purchase cost = $8.50 per pound
Price variance = $0.50 per pound favorable ($9.00 - $8.50)
Total purchase cost = $1,530,000
Direct labor worked = 69,000
Standard labor hours = 34,000 * 3 = 102,000 hours
Direct labor volume variance = 33,000 hours (102,000 - 69,000)
Standard variable manufacturing overhead = $816,000 (34,000 * $24)
a. The raw materials cost for the planning budget for March is:
= $1,260,000 ($9 * 5 * 28,000)
b. The raw materials cost included in the company's flexible budget for March
= $1,530,000 ($9 * 5 * 34,000)
c. The materials price variance for March is:
= $90,000 ($9 - $8.50)180,000
Jefferson Inc. (JI) is a relatively new company that wants to improve its employee rewards, compensation, and benefits. The company understands that there are effective reward systems that will motivate employees. However, JI management is not sure which would be the best for the company. Compensation, another important area, must also be improved so that it will satisfy all employees effectively. In addition, the company wants to create benefits to keep the employees not just satisfied, but also motivated. Yet another pressing issue is deciding on the training methods that are to be used to successfully teach the new employees.
JI believes that it will be on the right path if all of these changes can be successfully accomplished. The company plans to incorporate performance appraisals so it can be sure that the rewards, compensation, and benefits are effectively distributed. Refer to Jefferson, Inc. JI management must consider implementing the many different types of benefits. These include all of the following except :__________
a. insurance packages.
b. pension and retirement programs.
c. worker's compensation insurance.
d. Social Security.
e. profit sharing.
Answer:
E. Profit sharing
Explanation:
Employee benefits are the additional gains that employees enjoy in an organization in addition to their salaries.
There are different types of benefits that employers offer their employees.
Some of these are:
1. Medical benefits
2. Retirement benefits
3. Disability benefits
4. Insurance
5. Social security
E. T. C
Profit sharing is not an employee benefit so it is the odd 1 out of these options.
Scheduling personnel is an example of an operations management:
A. mission implementation
B. operational decision
C. organizational strategy
D. functional strategy
E. tactical decision
Answer:
B. operational decision
Explanation:
Scheduling personnel is an example of an operations management: operational decision
Scheduling personnel represents an example of an operations management of an operational decision.
The following information should be considered:
The staff-level decisions should be made from the lower level to the hierarchy level.Many decisions should be taken at many hierarchy levels.In this, the authority is present for taking the decisions.The lower level should take the decisions with respect to the employees.Therefore the other options are incorrect.
Hence we can conclude that scheduling personnel represents an example of an operations management of an operational decision.
Learn more about the management here: brainly.com/question/14874943
Smelling of Tulips, Inc., a perfume company, estimated its short-run costs using a U-shaped average variable cost function of the form and obtained the following results. Total fixed cost (TFC) at S.T. Inc. is $1290. Adjusted R Square 0.809 Coefficients Standard Error t Stat P-value Intercept 47.66 3.29 14.49 0.0001 Q -4.67 0.72 -6.48 0.0000 Q^2 0.26 0.03 7.79 0.0000 a. What level of output (Q) is associated with the minimum AVC
Answer:
The level of output (Q) is associated with the minimum AVC is 8.98.
Explanation:
The following sorted data are given in the question:
Adjusted R Square 0.809
Coefficients Standard Error t Stat P-value
Intercept 47.66 3.29 14.49 0.0001
Q -4.67 0.72 -6.48 0.0000
Q^2 0.26 0.03 7.79 0.0000
From the regression results above, the regression equation for AVC can be obtained as follows:
AVC = Coefficient of intercept + Coefficient of Q * Q + Coefficient of Q^2 * Q^2 …………. (1)
Substituting the relevant values into equation (1), we have:
AVC = 47.66 – 4.67Q + 0.26Q^2
Differentiate AVC with respect to Q, equating it to 0, and solve for Q, we have:
dAVC/dQ = -4.67 + (2 * 0.26)Q = 0
4.67 = 0.52Q
Q = 4.67 / 0.52
Q = 8.98
Therefore, the level of output (Q) is associated with the minimum AVC is 8.98.
Sports Company makes snowboards, downhill skis, cross-country skis, skateboards, surfboards, and in-line skates. The company has found it beneficial to split operations into two divisions based on the climate required for the sport: Snow Sports and Non-Snow Sports. The following divisional information is available for the past year:
Sales Operating Income Total Assests Current Liabilities
Snow Sports $57,00,000 1010,500 4,300,000 450,000
Non- Snow Sport 8500000 1332500 6500,000 750,000
Required:
a. Calculate each division's ROI.
b. Top management has extra funds to invest. Which division will most likely receive those funds? Why?
c. Can you explain why one division's ROI is higher? How could management gain more insight?
Answer:
Sports Company
a. Division's ROI:
SnowSports = 23.5%
Non-SnowSport = 20.5%
b. Naturally, management will invest in Division SnowSports. The company earns more returns on its investment in the division.
c. One division's ROI on investment because it earned more returns from the division when compared with its investment. This shows that SnowSports is more efficient than the other division in the use of resources.
Management can gain more insight by computing the Assets Turnover ratio and the operating leverage.
Explanation:
a) Data and Calculations:
Sales Operating Total Assets Current Liabilities
Income
Snow Sports $5,700,000 1,010,500 4,300,000 450,000
Non- SnowSport 8,500,000 1,332,500 6,500,000 750,000
ROI (Return on Investments) = Operating income/Total assets * 100
Snow Sports = $1,010,500/$4,300,000 * 100 = 23.5%
Non-SnowSport = $1,332,500/$6,500,000 * 100 = 20.5%