Answer:
Scenario A: The output will increase by less than 10% which means that there will be decreasing return to scale.
Scenario B: The output will increase by more than 10% as the new and novel products are processed. There will be increasing return to scale.
Scenario C: There will be increasing return to scale as there is new opportunity for the fishing in the extended area.
Explanation:
The decreasing return to scale means there is lesser return for the employed resources. When the capital is not efficiently used or labor is not skilled enough to make best quality products there will be decreasing return to scale.
Refer to Exhibit 4.3, which shows the supply curves of baby formula. The development of a more efficient production technology for producing baby formula is likely to cause _____ a. a leftward shift of the supply curve from S2 to S1. b. a movement from point b to point a on the supply curve S1. c. a rightward shift of the supply curve from S1 to S2. d. a movement from point a to point b on the supply curve S1. e. a movement from point c to point d on the supply curve S2.
Answer:
c
Explanation:
The supply curve is upward sloping. This is because their is a positive relationship between price and quantity supplied.
As a result of the new technology which makes production more efficient, there would be an increase in supply. When supply increases, the supply curves shifts to the right.
Only a change in price leads to a movement along the supply curve for a product.
according to the law of supply, the higher the price, the higher the quantity supplied and the lower the price, the lower the quantity supplied.
Consider the following two, completely separate, economies. The expected return and volatility of all stocks in both economies is the same. In the first economy, all stocks move together - in good times all prices go up together and in bad times they all fall together. In the second economy, stock returns are independent - one stock increasing in price has no effect on the prices of other stocks. Assuming you are risk-averse and you could choose one of the two economies in which to invest, which one would you choose
Answer:
As a risk averse investor I would choose the second option.
Explanation:
As a risk averse investor I would choose the second option. The second option described case whereby In an
economy whereby stocks returns are independent. And with this, risk can be diversified away as far as a large portfolio is concerned.
OK, WHO EVER IS IMPOSTER YOU BETTER TELL US NOW >:[
A) It's TOTALLY ME!!!
B) It's not me.
C) It's SOOOO not me :/
D) It's not me because *gives a whole big paragraph*
E) *silence*
F) I don't know :|
A contract is made between two parties. The terms of the contract are complete and unambiguous. A dispute arises between the Parties. Party A wants to pull out of the contract without penalty. Party B argues that Party A’s proposed action is prohibited by the express terms of the contract. Party A argues that the Parties verbally agreed to ignore that provision of the contract that would impose a penalty on Party A. Which Party will prevail and why?
Answer: Party B
Explanation:
Even though verbal agreements are enforceable by law, written agreements take precedent because they are more explicit than verbal agreements.
The written agreement will therefore be followed in this case and according to this agreement, A will be punished for the proposed action.
If A had tangible proof that a subsequent agreement was reached that would void them of said punishment, they should present it. If they do not, B would prevail.
Bell Inc. took a physical inventory at the end of the year and determined that $840,000 of goods were on hand. In Addition, the following items were not included in the physical count. Bell, Inc. determined that $96,000 of goods Be Purchased where in transit that were shipped f.o.b. destination (goods were actually received by the company three days after the inventory count).The company sold $40,000 worth of inventory f.o.b. shipping point. What amount should Be Reported as inventory at the end of the year
Answer:
Explanation:
r
Gap, Inc. owns Banana Republic, Old Navy, and Gap brands, all of which are brands of clothing targeting different segments of the clothing and accessories markets. Banana Republic is positioned as upscale, Old Navy is positioned as value, and Gap is positioned as targeting younger consumers. Gap, Inc.'s brands are intended to help the company pursue a(n) ______ strategy.
Answer:
multi-segment
Explanation:
The multi-segmentation strategy used by GAP Inc. consists of segmenting the market in the use of different product lines for different target audiences in order to increase their market share by reaching different audiences for the different product brands of the company.
This is an effective strategy for large companies that want to increase their positioning, perception of value by their consumers, satisfaction and reliability, and this is achieved when the company has an effective marketing and communication strategy, which helps in the perception of the characteristics of the brand. that are aligned to meet the needs of a specific audience.
Hampton Company reports the following information for its recent calendar year. Income Statement Data Selected Year-End Balance Sheet Data Sales $ 160,000 Accounts receivable increase $ 10,000 Expenses: Inventory decrease 16,000 Cost of goods sold 100,000 Salaries payable increase 1,000 Salaries expense 24,000 Depreciation expense 12,000 Net income $ 24,000 Required: Prepare the operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)
Answer:
$43,000
Explanation:
Preparation of the operating activities section of the statement of cash flows using the indirect method.
Cash flows from operating activities
Net income$24,000
Less Accounts receivable increase (10,000)
Inventory Decrease 16,000
Salaries payable increase 1,000
Depreciation expense 12,000
Net cash provided by operating activities
$43,000
Therefore the operating activities section of the statement of cash flows using the indirect method will be $43,000
Consider the following probability distribution for stocks A and B: State Probability Return on Stock A Return on Stock B 1 0.10 10 % 8 % 2 0.20 13 % 7 % 3 0.20 12 % 6 % 4 0.30 14 % 9 % 5 0.20 15 % 8 % If you invest 40% of your money in A and 60% in B, what would be your portfolio's expected rate of return and standard deviation
Answer:
The expected rates of return of stocks A and B:
E(RA) = 0.1*((13%) + 0.2*(12%) + 0.3*(14%) + 0.2*(15%)
E(RA) = 13.2%
E(RB) = 0.1*(8%) + 0.2*(7%) + 0.2*(6%) + 0.3*(9%) + 0.2*(8%)
E(RB) = 7.7%
The standard deviation of stocks A and B are:
Var(RA) = [0.1*(10%-13.2%)2^ + 0.2*(13%-13.2%)^2 + 0.2*(12%-13.2%)^2 + 0.3*(14%-13.2%)^2 + 0.2*(15%-13.2%)^2]^1/2
Var(RA) = 1.5%
Var(RB) = [0.1*(8%-7.7%)^2 + 0.2*(7%-7.7%)^2 + 0.2*(6%-7.7%)^2 + 0.3(9%-7.7%)^2 + 0.2*(8%-7.7%)^2]^1/2
Var(RB) = 1.1%
Pulau Penang Island Resort. Theresa Nunn is planning a 30-day vacation on Pulau Penang, Malaysia, one year from now. The presentcharge for a luxury suite plus meals in Malaysian ringgit (RM) is RM1,045/day. The Malaysian ringgitpresently trades at RM3.1350/$. She figures out the dollar cost today for a 30-day stay would be$10,000. The hotel informed her that any increase in its room charges will be limited to any increase inthe Malaysian cost of living. Malaysian inflation is expected to be 2.75% per annum, while U.S. inflationis expected to be only 1.25%.
a. How many dollars might Theresa expect to need one year hence to pay for her 30-day vacation?
b. By what percent will the dollar cost have gone up? Why?
Answer:
A) $10124.83
B) 1.0125%
Explanation:
1) We are told that the present charge for a luxury suite is RM 1,045/day.
This means that the charge after one year will also include inflation charge.
Thus;
Charge after 1 year = 1045 × (1 + 2.75%)
= 1045 × 1.0275 = RM 1,073.7375 per day
For 30 days, charge is;
1073.7375 × 30 = RM 32212.125
Spot exchange rate in 1 year = spot rate × (1 + RM inflation rate)/(1 + US inflation rate)
Spot exchange rate in 1 year = 3.135 × (1 + 2.75%)/(1 + 1.25%) = 3.135 × 1.0275/1.0125 = 3.1815
Cost needed one year to pay for 30 day vacation = 32212.125/3.1815 = $10124.83
B) percent by which the dollar cost will have gone up = (10124.83/10000) × 100% = 1.0125%
The manager of the main laboratory facility at CapitalHealth Center is interested in being able to predict the overhead costs each month for the lab. The manager believes that total overhead varies with the number of lab tests performed but that some costs remain the same each month regardless of the number of lab tests performed. The lab manager collected the following data for the first seven months of the year. (Click the icon to view the data.) Use the high-low method to determine the laboratory's cost equation for total laboratory overhead. Use your results to predict total laboratory overhead if 3,000 lab tests are performed next month.
Number of Lab Tests Performed Total Laboratory Overhead Costs Month January February March ....... 2,800 2,600 3,100 April 3,550 $21,500 $22,700 $27,900 $31,400 $28,500 $19,500 $14,500 May ....... 3,700 1,200 June July 1,400
Answer:
Total cost= $26,668
Explanation:
Giving the following information:
Highest cost= $31,400
Lowest cost= $14,500
Highest activity= 3,700
Lowest activity= 1,200
To calculate the variable and fixed costs, 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= (31,400 - 14,500) / (3,700 - 1,200)
Variable cost per unit= $6.76
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 31,400 - (6.76*3,700)
Fixed costs= $6,388
Fixed costs= LAC - (Variable cost per unit* LAU)
Fixed costs= 14,500 - (6.76*1,200)
Fixed costs= $6,388
Now, for 3,000 tests:
Total cost= 6,388 + 6.76*3,000
Total cost= $26,668
When a buyer's product is not working properly and they have a warranty, what is the first step the buyer should take to resolve the problem?
A:contact the local or state Consumer Affairs Office
B:contact the product manufacturer
C:sue the retailer who sold the product and/or the manufacturer
D:contact the retailer who sold the product
A buyer's product is not working properly and they have a warranty, contacting the retailer who sold the product is the first step the buyer should take to resolve the problem. Thus option D is correct.
What is a product?A product is something that is being sold. A business or an object both qualify as products. Every product has a cost associated with it, and each one has a price. The marketplace, the grade, the promotion, and the group that is being targeted all affect the price that could be charged.
In general, if a customer relied mostly on the store's education, experience, or advice when selecting the goods, they may demand a refund as well as replacement when it is unable to perform its intended function. This was to ensure that the people will not be cheated by the product that is present.
Therefore, option D is the correct option.
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Assume that a $1,000,000 par value, semiannual coupon U.S. Treasury note with four years to maturity has a coupon rate of 4%. The yield to maturity (YTM) of the bond is 7.70%. Using this information and ignoring the other costs involved, calculate the value of the Treasury note
Answer:
$8,744,669.10
Explanation:
Using the MS Excel Present value function
Value of the note = PV(Rate, Nper, PMT, -FV, Type)
Value of the note = PV(7.7%/2, 4*2, -1000000*4%/2, -1000000)
Value of the note = 8744669.0978
Value of the note = $8,744,669.10
So, the value of the Treasury note is $8,744,669.10
he Coase theorem will apply only if the amount of compensation that must be made to the damaged party is small. an individual who is not affected by the externality can negotiate a settlement between the parties imposing the externality and the parties that are harmed by the externality. the courts can be used to determine the amount of compensation that must be made to the damaged party. the number of people involved is small.
Answer:
the number of people involved is small.
Explanation:
Coase theorem was developed in 1960 by a British economist and author named Ronald Coase.
Coase theorem states that when the actions of a party (X) negatively affects or harm another party (Y), then party Y should be able to create an incentive for party X to stop or limit the action creating such harm.
Generally, when transaction cost are low, the two parties are able to bargain and reach a mutual agreement in the presence of an externality such as a pollution.
The Coase theorem will apply only if the number of people involved is small, the cost of negotiation is low and there are well defined property rights.
Chelsea’s goal is to someday have her own restaurant. Taking cooking classes in high school would help prepare Chelsea for her future career.
A.
True
B.
False
Answer:
True
Although operations of restaurant has nothing to do with cooking as Chelsea can hire a chef for her restaurant. But still it would be helpful for her in a sense that she can calculate the right amount of ingredients needed and their respective costs required. Also she can herself be a chef at her restaurant that would save the salary expense of a chef.
Explanation:
Answer:
True
Explanation:
If it is a small restaurant she maybe the cook and the skill of knowing how to cook would be needed
Madison Corporation purchased 40% of Jay Corporation for $300,000 on January 1. On June 20 of the same year, Jay Corporation declared total cash dividends of $75,000. At year-end, Jay Corporation reported net income of $375,000. The balance in Madison's Equity Method Investments—Jay Corporation account as of December 31 should be:
Answer:
$420,000
Explanation:
Given the above information,
Dividend
= $75,000 × 40%
= $30,000
Share in income
= $375,000 × 40%
= $150,000
Balance in investment account
= Beginning balance + Share in income - Dividend
= $300,000 + $150,000 - $30,000
= $420,000
Therefore, the balance in Madison's equity method investments - Jay Corporation accounts as of December 31 should be $420,000
Suppose that Brazil imports semiconductors from the United States. The free market price is $30.00 per semiconductor. If the tariff on imports in Brazil is initially 40%, Brazilians pay_______ per semiconductor.
One of the accomplishments of the Uruguay Round that took place between 1986 and 1993 was significant across-the-board tariff cuts for industrial countries, as well as many developing countries. Suppose that as a result of the Uruguay Round, Brazil reduces its import tariffs to 20%. Assuming the price of semiconductors is still $30.00 per semiconductor, consumers now pay the price of_______ per semiconductor.
Based on the calculations and the scenarios presented, the Uruguay Round most likely_______ in Brazil and________ in the United States.
Answer:
a. $42
b. $36
c. benefits consumers in Brazil. They pay less by $6.
d. does not affect consumers and producers in the United States.
Explanation:
a) Data and Calculations:
Free market price of semiconductor = $30
Brazil tariff on imports = 40%
This means Brazilians pay $42 ($30 * 1.4) per semiconductor
New Brazil tariff on imports = 20%
This implies that Brazilians will now pay $36 ($30 * 1.2) per semiconductor
b) Import tariffs by Brazil are taxes imposed on imports into Brazil by the Brazilian government to discourage imports, generate revenue, and control the type of goods and services imported into Brazil. The Uruguay Round was an international trade conference that birthed the WTO. The purpose of the conference and the creation of WTO was to enable countries negotiate better trade deals and ensure the creation of free trade among the comity of nations.
Marley Woods Resort would like to buy some land and build a luxury living center. The anticipated total cost is $20.5 million. The CEO of the firm is quite conservative and will only do this when the company has sufficient funds to pay cash for the entire construction project. Management has decided to save $1.2 million a quarter for this purpose. The firm earns 6.25 percent, compounded quarterly, on the funds it saves. How long does the company have to wait before expanding its operations
Answer:
3.82 years
Explanation:
FV of annuity = P[(1+r)^n - 1 / r]
Where FV = $20,500,000; P = $1,200,000; r = 6.25%/4 = 1.5625% quarterly
20,500,000 = 1,200,000 * [1+0.015625)^n - 1/0.015625]
20,500,000 / 1,200,000 = [1+0.015625)^n - 1/0.015625]
17.0833 = [(1+0.015625)^n - 1 / 0.015625]
17.0833 * 0.015625 = (1+0.015625)^n - 1
0.266927 = (1+0.015625)^n - 1
1.266927 = (1 + 0.015625)^n
Taking log of both sides of equation
LN(1.266927) = n*LN(1.015625)
n = LN(1.266927)/LN(1.015625)
n = 0.236594/0.015504
n = 15.26 quarters
No of years = 15.26/4
No of years = 3.82 years
Company XYZ forecasts expanding markets, see many opportunities for growth, and adopts a growth strategy. It has invested heavily into a highly efficient production process. Administratively, it has tight control over costs and lots of rules and regulations to promote efficiency. According to the adaptation model of strategy, company XYZ:_________
a. is a strategie failure
b. as prospector
c. as defender
d. as an analyzer
Answer:
c
Explanation:
The adaption model was developed by Miles and Snow (1978)
Businesses are classified as :
ReactorsDefenders AnalysersprospectorsCompany XYZ can be classified as a defender. this is because they have taken steps to increase control internally. It also has a lot of rules which might stifle adaption
Florissa's Flowers jointly produces three varieties of flowers in the same garden: tulips, lilies, and daisies. The flowers are all watered via the same irrigation system and all receive the same amount of water; daisies require three times as much as lilies, and the water required for tulips is about halfway between the amounts needed for daisies and lilies. Although the lilies and tulips receive more water than they need due to the joint irrigation process, they are not hurt by the overwatering. The joint production cost of the three varieties of flowers is about $30 per harvest. Every harvest yields 10 tulips, 20 lilies, and 20 daisies
Allocate the joint costs of production to each product using the physical units method.
Joint Product Flowers per Harvest Proportion Joint Costs Allocation
Tulip % $ $
Lily %
Daisy %
Totals $
Which products receive the largest portion of the joint costs?
Answer:
Lily and Daisy
Explanation:
Joint product Flowers per harvest Proportion Joint cost allocation
Tulip 10 20% (10/50) $6 ($30*20%)
Lily 20 40% (20/50) $12 ($30*40%)
Daisy 20 40% (20/50) $12 ($30*40%)
Totals 50 100% $30
As per above results, both Lily and Daisy received the largest proportion of joint cost.
DriveTrain, Inc. instituted a new process in October 2020. During October, 13,800 units were started in Department A. Of the units started, 8,950 were transferred to Department B, and 4,850 remained in Work-in-Process at October 31, 2020. The Work-in-Process at October 31, 2020, was 100% complete as to material costs and 50% complete as to conversion costs. Material costs of $37,260 and conversion costs of $45,500 were charged to Department A in October. What were the total costs transferred to Department B assuming Department A uses weighted-average process costing
Answer:
$59,965
Explanation:
Equivalent Units
Materials = 8,950 x 100 % + 4,850 x 100 % = 13,800 units
Conversion Costs = 8,950 x 100 % + 4,850 x 50 % = 11,375 units
Total Costs
Materials = $37,260
Conversion Costs = $45,500
Cost per Equivalent unit
Materials = $37,260 / 13,800 units = $2.70
Conversion Costs = $45,500/ 11,375 units = $4.00
Total Unit Cost = $2.70 + $4.00 = $6.70
Total costs transferred to Department B
Total costs = 8,950 x $6.70 = $59,965
Therefore, the total costs transferred to Department B is $59,965
Roberto Baldwin As the owner and manager of Fantastic Toys, Roberto Baldwin is fascinated by all the changes occurring and transforming the workplace. Roberto is concerned about the important OB trends that he can understand and take advantage of in developing and positioning his company in the marketplace. If Roberto wants to study deep-level diversity in his organization, he should:_________
A) increases its connectivity with people and organizations in other parts of the world.
B) serves diverse customers within the firm's home country.
C) has a diverse workforce within the firm's home country.
D) has a substantially strong domestic market.
Answer:
A) increases its connectivity with people and organizations in other parts of the world.
Explanation:
deep-level diversity which can be regarded as task-related diversity is
less observable as well as deeper-leveled attributes which could be
attitudes, functional expertise and personality. In the case above, If Roberto wants to study deep-level diversity in his organization, he should increases its connectivity with people and organizations in other parts of the world.
You have a $1,000 portfolio which is invested in stocks A and B plus a risk-free asset. $400 is invested in stock A. Stock A has a beta of 1.30 and stock B has a beta of 0.70. How many dollars need to be invested in stock B if you want a portfolio beta of 0.90
Answer: $543
Explanation:
The portfolio beta is a weighted average of the individual stock betas.
Portfolio beta = (Weight of stock A * Stock A beta) + (Weight of stock B * Stock B beta)
0.9 = (400/1,000 * 1.3) + (w * 0.70)
0.9 = 0.52 + 0.7w
0.7w = 0.9 - 0.52
0.7w = 0.38
w = 0.38/0.7
w = 0.543
The portfolio value is $1,000 so the dollars would be:
= 0.543 * 1,000
= $543
The amount of dollars that is needed to be invested in stock B if you want a portfolio beta of 0.90 is $543.
Let x represent the amount of dollars
Hence:
Beta Portfolio= .90 = ($400÷$1,000 ×1.3) + ($x ÷$1,000×.7) + [(($1,000-$400)–x) ÷$1,000 ×0]
Beta Portfolio= .90 = ($400÷$1,000 ×1.3) + ($x ÷$1,000×.7) + (($600–x) ÷$1,000 ×0)
.90 = .52 + .7x + 0
.7x=.90-.52
Divide both side by .7x
.7x = .38
x=.38/.7
x = $542.86
x= $543 (Approximately)
Inconclusion the amount of dollars that is needed to be invested in stock B if you want a portfolio beta of 0.90 is $543.
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Closing Entries After the accounts have been adjusted at April 30, the end of the fiscal year, the following balances were taken from the ledger of Twin Trees Landscaping Co.: Oscar Killingsworth, Capital $503,900 Oscar Killingsworth, Drawing 8,200 Fees Earned 279,100 Wages Expense 221,600 Rent Expense 43,800 Supplies Expense 9,000 Miscellaneous Expense 10,200 Journalize the two entries required to close the accounts. If an amount box does not require an entry, leave it blank.
Answer:
Dr Income summary 284,600
Cr Wages Expense 221,600
Cr Rent Expense 43,800
Cr Supplies Expense 9,000
Cr Miscellaneous Expense 10,200
Dr Fees earned 279,100
Cr Income summary 279,100
Dr Oscar Killingsworth, Capital 5,500
Cr Income summary 5,500
Terrace Corporation makes an industrial cleaner in two sequential departments, Compounding and Drying. All material is added at the beginning of the process in the Compounding Department. Conversion costs are added evenly throughout each process. Terrace uses the weighted average method of process costing. In the Compounding Department, beginning work in process was 3,600 pounds (60% processed), 61,200 pounds were started, 57,600 pounds were transferred out, and ending work in process was 60% processed.
Calculate equivalent units for the Compounding Department for August 2016.
Terrace Corporation
Flow of Units and Equivalent Units Calculation, August 2016
Equivalent Units
% WorkConversion % Work done Direct Materials Done Costs
Complete/Transferred
Ending Inventory
Total
Answer:
Terrace Corporation
Equivalent Unit
% D.Material % Conversion
Completed transferred 57,600 100% 57,600 100% 57,600
to drying
Ending Inventory of WIP 7,200 100% 7,200 60% 4,320
Total 64,800 64,800 61,920
Note:
Ending Inventory of Wip = Opening WIP Inventory + Added(Started) - Transferred out = 3,600 + 61,200 - 57,600 = 7,200 pounds
Primara Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below:
Total budgeted fixed overhead cost for the year $250,000
Actual fixed overhead cost for the year $254,000
Budgeted direct labor-hours (denominator level of activity) 25,000
Actual direct labor-hours 27,000
Standard direct labor-hours allowed for the actual output 26,000
Required:
a. Compute the fixed portion of the predetermined overhead rate for the year.
b. Compute the fixed overhead budget variance and volume variance.
Answer:
1. Predetermined overhead rate = Total fixed overhead cost year / Budgeted standard direct labor hours
Predetermined overhead rate = $250,000 / 25,000
Predetermined overhead rate = $10.00 per direct labor hour
2. Fixed overhead budget variance = Actual fixed overhead - Budgeted fixed overhead
Fixed overhead budget variance = $254,000 - $250,000
Fixed overhead budget variance = $4,000 (Unfavorable)
Fixed overhead volume variance = Budgeted fixed overhead - [Fixed overhead applied to work in process]
Fixed overhead volume variance = $250,000 - (26,000*$10)
Fixed overhead volume variance = $250,000 - $260,000
Fixed overhead volume variance = $10,000 (Favorable)
EasyFind manufactures and sells golf balls. The company is conducting a price test to find a better price point. Presently their golf balls sell for $19 per dozen. Their current volume is 4,910 dozen per month. They are considering reducing their sales price by 28% per dozen. If EasyFind's variable costs are $10 per dozen, what is their total contribution each month at current prices
Answer:
$44,190
Explanation:
Selling price = $19
Variable cost = $10
Volume = 4,910 dozen per month
Contribution per unit = Selling price - Variable cost
Contribution per unit = $19 - $10
Contribution per unit = $9 per dozen
Total contribution = Volume*Per dozen contribution
Total contribution = 4,910 * $9
Total contribution = $44,190
Howard Co.'s 2016 income from continuing operations before income taxes was $280,000. Howard Co. reported before-tax income on discontinued operations of $50,000. All tax items are subject to a 40% tax rate. In its income statement for 2016, Howard Co. would show which of the following line-item amounts for net income and income tax expense:
a. $213,600 and $117,600 respectively.
b. $356,000 and $318,800 respectively.
c. $117,600 and $213,600 respectively.
d. $232,000 and $269,200 respectively.
Answer:
$198,000 and $112,000 respectively
Explanation:
Income tax expense = Income from continuing operations before income taxes * Tax rate
Income tax expense = $280,000 * 40%
Income tax expense = $112,000
Net income = Income from continuing operations before income taxes - Income tax expense + (Before-tax income on discontinued operations * (1 - 40%)
Net income = ($280,000 - $112,000) + ($50,000 * 0.6)
Net income = $168,000 + $30,000
Net income = $198,000
Novak Corporation purchased 380 shares of Sherman Inc. common stock for $12,900 (Novak does not have significant influence). During the year, Sherman paid a cash dividend of $3.25 per share. At year-end, Sherman stock was selling for $37.50 per share. Prepare Novak's journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.)
Answer:
A. Dr Equity Investments (Trading)$12,900
Cr Cash $12,900
B. Dr Cash $1,235
Cr Dividend Revenue $1,235
C. Dr Fair Value Adjustment (Trading) $1,350
Cr Unrealized Holding Gain or Loss-Income $1,350
Explanation:
A. Preparation of Novak's journal entries to record the purchase of the investment
Dr Equity Investments (Trading)$12,900
Cr Cash $12,900
B. Preparation of Novak's journal entries to record the dividends received
Dr Cash $1,235
($3.25 per share*380)
Cr Dividend Revenue $1,235
C. Preparation of Novak's journal entries to record the fair value adjustment
Dr Fair Value Adjustment (Trading) $1,350
Cr Unrealized Holding Gain or Loss-Income $1,350
[($37.50 per share*380)-$12,900]
Refer to the table above. Which of the following scenarios is consistent with this statement? "The rate of inflation was 23.75 percent for 2011." A. The price of a hot dog was $2.44 rather than $3.30 in 2010, with other prices in the table remaining fixed. B. The price of a hot dog was $4.22 rather than $3.63 in 2011, with other prices in the table remaining fixed. C. The price of a hamburger was $3.80 rather than $5.50 in 2010, with other prices in the table remaining fixed. D. The price of a hamburger was $6.60 rather than $5.61 in 2011, with other prices in the table remaining fixed
Answer:
C. The price of a hamburger was $3.80 rather than $5.50 in 2010, with other prices in the table remaining fixed.
Explanation:
The given table shows the inflation rates and price movement over the years. The hamburger had inflation effect and its price increased by almost $1. The price change will create burden on the consumer and they will have to pay for inflation differential.
Supler Corporation produces a part used in the manufacture of one of its products. The unit product cost is $22, computed as follows: Direct materials $ 9 Direct labor 7 Variable manufacturing overhead 1 Fixed manufacturing overhead 5 Unit product cost $ 22 An outside supplier has offered to provide the annual requirement of 7200 of the parts for only $19 each. The company estimates that 80% of the fixed manufacturing overhead cost above could be eliminated if the parts are purchased from the outside supplier. Assume that direct labor is an avoidable cost in this decision. Based on these data, the financial advantage (disadvantage) of purchasing the parts from the outside supplier would be:
Answer:
$ 2 per unit on average
Explanation:
Calculation for what the financial advantage (disadvantage) of purchasing the parts from the outside supplier would be:
First step is to calculate the Relevant cost of making
Relevant cost of making = 9 + 7 + 1 + ( 5 * 80 % ) Relevant cost of making= $ 21
Now let calculate the Financial advantage of buying
Financial advantage of buying = ( 21 - 19 )
Financial advantage of buying= $ 2 per unit on average
Therefore the financial advantage (disadvantage) of purchasing the parts from the outside supplier would be:$ 2 per unit on average