Answer: D. Kate's policy will pay $1,500, and John's policy will pay $250.
Explanation:
The deductible is the amount that a policy holder has to pay before the insurance company pays the remaining amount.
From the question, we are informed that John has an auto which is covered for collision losses subject to a $250 deductible while Kate's auto also has collision coverage but her deductible is $500.
If a $2,000 collision loss occurs when John borrows Kate's car because his car is in the shop for repairs, since John has a deductible of $500, Kates policy will pay ($2000 - $500) = $1500 and John's policy will pay $250.
In January, Stitch, Inc. adopted the dollar-value LIFO method of inventory valuation. At adoption, inventory was valued at $50,000. During the year, inventory increased $30,000 using base-year prices, and prices increased 10%. The designated market value of Stitch's inventory exceeded its cost at year end. What amount of inventory should Stitch report in its year-end balance sheet
Answer:
$83,000
Explanation:
Calculation of the amount of inventory that Stitch should report in its year-end balance sheet
First step is to calculate for the 10% price increase
Increase price = ( $30,000 x 10% ) =$3,000
Second step is to add up the price increase to the amount of increase in inventory
$30,000 + $3,000 =$33,000
Hence, $33,000 will now be the increased in price inventory
Last step is to calculate for the amount of inventory that Stitch should report in its year-end balance sheet
Using this formula
Inventory to be reported = Valued of the Adoption inventory + Increase price Inventory
Where,
Adoption inventory value= $50,000
Increase price Inventory=$33,000
Let plug in the formula
Inventory to be reported = $50,000 + $33,000
Inventory to be reported =$83,000
Therefore the amount of inventory that Stitch should report in its year-end balance sheet will be $83,000
calculate revenue and capital expenditure
a) purchase of machinery 6500
Answer with its Explanation:
I was unable to find the question, but I think that I can help you understand the difference between the revenue expenditure and the capital expenditure.
Capital Expenditure:
Capital expenditure is the purchase of an asset whose value will last more than a year or expenditure incurred to increase the life of the asset above the initial life or expenditure to increase the productivity of the asset above productivity of the asset when it was purchased.
Examples include the purchase of van. It has life of more than a year hence it must be capitalized. Likewise if we install security system in it then this expenditure will qualify for capital expenditure as it adds additional feature to the asset.
a. The purchase of Machinery of $6,500 is capital expenditure as it has life more than a year.
Revenue Expenditure
The revenue expenditure is the purchase of product or services whose benefits will last within a year or are expenditure on the fixed asset to keep it running. Examples are, ballpoints which is a product that has life< one year. So it must be expensed out at the spot. Likewise the entertainment expenditures of $50 which includes the purchase of pizza and other items for guests, also has less than one year life. Hence these entertainment expenditures must also be expensed out.
Depreciation is a special case here, it is the decrease in the value of Non Current Asset. Hence the decrease in the value of the Non Current Asset must be reduced to its fair value. Depreciation is an utilization of the Non Current Asset's value in the form of benefits drawn from it and it can be measured as decrease in the asset's value. However, sometimes it is difficult to find the fair value of the asset in the market. To resolve this issue, we use depreciation formula to estimate the decrease in the value of the asset.
The cost method that will yield an ending inventory that is closer to current prices is the a.FIFO inventory cost method. b.LIFO inventory cost method. c.specific identification inventory cost method. d.weighted average inventory cost method.
Answer: a.FIFO inventory cost method
Explanation: The First-In-First-Out inventory costing method involves applying the price associated with the oldest inventory purchase to goods sold. When the FIFO inventory method is used, when the number of goods purchased for the oldest inventory is exhausted, the cost of goods sold is then associated with the next oldest inventory. With these cost inventory method, the ending inventory always moves closer to the current prices of goods since the older inventory cost is applied first.
The risk-free rate of return is 5%, the required rate of return on the market is 10%, and High-Flyer stock has a beta coefficient of 1.5. If the dividend per share expected during the coming year, D1, is $2.50 and g = 4%, at what price should a share sell? (Do not round intermediate calculations. Round your answer to 2 decimal places.
Answer:
$ 29.41
Explanation:
The first is to calculate the investor's required rate of return on the stock as shown below:
Ke=Risk-free rate+Beta*(return on the market-Risk-free rate)
Risk-free rate is 5%
Beta is 1.5
return on the market is 10%
Ke=5%+1.5*(10%-5%)=12.50%
The stock price formula is given below
stock price=D1/Ke-g
D1 is the expected dividend of $2.50
Ke is 12.50%
g =4%
Stock price=2.50/(12.50%-4%)=$ 29.41
Answer:
Explanation:
k=Rf+B(E[r]-Rf): k=5%+1.5(10$-5%)=12.5%
V=2.4/(12.5%-4%)= 30
Johnny LaRue sells men's jackets to men's clothing stores, including Melonville Man. Melonville Man orders a selection of men's jackets from LaRue's catalog, asking that LaRue select an assortment of goods for the buyer. LaRue takes advantage of this opportunity to get rid of the odd-sized jackets and those in pastel colors that are no longer popular. LaRue:
Answer:
violated the good faith requirement under sales contracts
Explanation:
In this scenario, it seems that LaRue violated the good faith requirement under sales contracts. In the context of business contracts, good faith refers to dealing honestly and fairly with one another in order for both parties to receive the benefits of the negotiated contract/agreement. In this scenario, LaRue did not do this. Instead, he used the opportunity to take advantage of Melonville Man by adding all the jackets that were unsellable into their purchased package.
Under a flexible exchange rate system a decline in the value of a currency relative to other currencies is a called a(n) _______ and under a fixed exchange rate system a decrease in the official value of a currency is called a(n) ________.
Answer:
Depreciation:devaluation.
Explanation:
Under a flexible exchange rate system a decline in the value of a currency relative to other currencies is a called a depreciation. This could be as a result of factors such as government monetary policies, varying interest rates, aversion of risks by investors, inflation etc.
On the other hand, under a fixed exchange rate system a decrease in the official value of a currency is called a devaluation. This is mainly due to the government monetary policy, so as to shore up the export of a country and to improve foreign trade.
The records of Skilling Inc. include the following information on one of its departments, which is considered an investment center. Sales totaled $9,800,000 and investment center income totaled $766,500 for the most recent year. Investment center average invested assets were $3,650,000 during that year. Top management has set a target income of 11.5% of investment center assets. What is the department's residual income
Answer:
Residual income= 346,750
Explanation:
Residual income is the excess of the controllable profit over the opportunity cost of capital invested.
It is used to evaluate the financial performance of a division or department
It is computed as follows:
Residual income = Controllable profit - (cost of capital× operating assets)
Net income - 766,500
investment asset-3,650,000
Cost of capital - 11.5%
Residual income = 766,500 - (11.5%×3,650,000) = 346750
Residual income= 346,750
Charlie, the CEO of Collier Chemical, likes to boast that his company offers the highest salaries in the industry, has excellent working conditions, and has clear and consistent company policies. Yet he admits his workforce is not highly motivated. Herzberg's research suggests that Collier Chemical is having difficulty motivating its employees because it is focusing on:
Answer: hygiene factors
Explanation:
From the analysis in the question, we can infer that the organization is focusing on the hygiene factors. According to Herzberg, even though the hygiene factors are vital, they don't motivate workers but they may lead to dissatisfaction at workplace when they're not in place.
Examples of hygiene factors are the organizational policies, relationships with co-workers, compensation, physical work environment, and job security.
A company bought new heating system for $42,000 and was given a trade-in of $2,000 on an old heating system, so the company paid $40,000 cash with the trade-in. The old system had an original cost of $37,000 and accumulated depreciation of $34,000. If the transaction has commercial substance, the company should record the new heating system at:
When Alice is assigned to host a work party for 100 employees with a modest $200 budget, she needs to be innovative and imaginative. In order for Alice to host a successful work party, she will need to utilize _____ intelligence.
Answer:
Creative intelligence
Explanation:
From the information given:
For Alice to be successful in hosting the work party. She needs her innovation and imagination to be grounded with Creative Intelligence. Creative intelligence is an iterative process that contains three major steps. These are ; frame, create and deliver
Frame deals with understanding the concept i.e having an imagination of what your are about to carry out.
Create: This is where the ideas,views and perspectives comes into play with different innovations such as scalability of products , automation etcetera.
Deliver; The implementation and monitoring stage where all the aim, goals and objectives are being attained.
Most creativity is social, just like connecting the dots. As such creative intelligence lies by connecting with people.
If Alice can utilize the above steps of Creative Intelligence; she will host a successful work party for 100 employees with a modest $200 budget.
Taylor s has a beta of .78 and a debt-to-equity ratio of .2. The market rate of return is 10.6 percent, the tax rate is 34 percent, and the risk-free rate is 1.4 percent. The pretax cost of debt is 6.1 percent. What is the firm's WACC
Answer: 7.82%
Explanation:
Given the following :
Beta (B) = 0.78
Debt to equity ratio = 0.2
Market rate of return (Rm) = 10.6% = 0.106
Tax rate (T) = 34% = 0.34
Risk free rate (Rf) = 1.4% = 0.014
Pretax cost of debt (Kd) = 6.1% = 0.061
WACC =
Cost of equity (Ke) = Rf + (Rm - Rf) * B
Ke = 0.014 + (0.106 - 0.014) * 0.78
Ke = 0.014 + (0.092)*0.78
Ke = 0.014 + 0.07176
Ke = 0.08576
Equity (E) = 1
Debt (D) = 0.2
Total volume of company's finance (V) = 1+0.2 = 1.2
WACC = (E/V)*Ke + (D/V)*(1 - T)*Kd
WACC = [(1/1.2)*0.08576] + [(0.2/1.2)*(1 -0.34)*0.061
WACC = [0.0714666 + 0.00671]
WACC = 0.0781766 = 0.0782 = 7.82%
Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period:
Office Expenses Total Allocation Basis
Salaries $ 42,000 Number of employees
Depreciation 22,000 Cost of goods sold
Advertising 45,000 Net sales
Item Drilling Grinding Total
Number of employees 1,200 1,800 3,000
Net sales $ 340,000 $ 510,000 $ 850,000
Cost of goods sold $ 95,000 $ 155,000 $ 250,000
The amount of the total office expenses that should be allocated to Drilling for the current period is:
A. $71,600.
B. $43,160.
C. $109,000.
D. $600,000.
$53,000.
Answer:
Total Office expense allocated to Drilling for this current period is $43,160
Explanation:
Office expense allocation to Drilling
Salaries = $42,000 x 1200 employees/3000 total employee = $16,800
Depreciation = $22,000 x $95,000/ $250,000 total COGS= $8,360
Advertising = $45,000 x $340,000/ $850000 total Sales = $18,000
Total Office expense allocated to Drilling= $43,160
According to Michael Porter, businesses can compete successfully by doing which of the following? A. being the cheapest producer B. making unique products valued by consumers C. applying their expertise in a narrow market segment to meet that segment’s particular product or service needs D. any of these
Answer:
D. any of these
Explanation:
Competitive strategy means intentionally selecting a distinct set of tasks to produce a compelling value proposition. Michael Porter focused on the topic of international competition. He consulted international governments on their economic strategies and led the U.S. Presidential Commission. Porter's strategies explain how a business upholds competitive advantages across the whole concerned market context.
Carrie recently received the Employee of the Year award at the call center where she works as a customer service representative. She was chosen for the award because she is known to be highly courteous toward even the most difficult of callers and is efficient at handling their queries. A month after receiving the award, Carrie submits her resignation. According to her exit interview, she felt burnt out. Which of the following best explains this situation?
A) Carrie was overwhelmed by the award.
B) Carrie lacked the skills and motivation to perform her job in an effective manner.
C) Carrie felt the strain of having to constantly fake positive emotions towards her customers.
D) Carrie was demotivated by the lack of recognition and respect from her peers.
E) Carrie was unable to empathize with her callers and the problems that they faced.
Answer: C. Carrie felt the strain of having to constantly fake positive emotions towards her customers
Explanation: Burn outs describes conditions where an individual becomes tired due to overwork. Carrie feeling the strain of having to constantly fake positive emotions towards her customers (due to her highly courteous nature) turned in her resignation as this can be very draining and can be seen as overwork.
________, which indicates free enterprise in the hands of the self-employed, was a contributory factor to the economic growth of newly industrialized countries (NICs). Multiple Choice Entrepreneurship Expropriation Privatization Socialization Nationalization
Answer: entrepreneurship
Explanation:
Entrepreneurship is the act of running a business despite the risk involved with the aim of making profit. The role of entrepreneurship in every economy cannot be understated.
It is a contributory factor to the economic growth of newly industrialized countries as it provides job opportunities, brings about economic growth and increase in welfare to the people.
At the intersection of the short-run aggregate supply curve, the aggregate demand curve, and the long-run aggregate supply curve, the economy is in: Multiple Choice a long-run equilibrium but not a short-run equilibrium. both a short-run and long-run equilibrium. a short-run equilibrium but not a long-run equilibrium. neither a short-run nor long-run equilibrium.
Answer:
a short-run equilibrium but not a long-run equilibrium.
Explanation:
The long run aggregate supply and aggregate demand when intersect they determine the economy level of equilibrium. This will determine real level of GDP and prices in the long run. The short run supply curve is upward sloping. It determines the quantity of the output that will be produced at each level of price in the short run.
Distinguish among operating, investing, and financing activities for the statement of cash flows indirect method) Aurum Investments specializes in low-risk government bonds. Identify each of Aurum's transactions as operating (O), investing (I), financing (F), noncash investing and financing (NIF), or a transaction that is not reported on the statement of cash flows (N). Indicate whether each item increases (+) or decreases (minus) cash. The indirect method is used for operating cash flows.
A. Acquisition of equipment by issuance of note payable
B. Purchase of long-term investment with cash
C. Issuance of long-term note payable to borrow cash
D. Increase in prepaid expenses
E. Decrease in accrued liabilities
F. Loss of sale of equipment
G. Decrease in accounts receivable
H. Depreciation of equipment
I. Increase in accounts payable Amortization of intangible assets
K. Purchase of treasury stock
L. Payment of long-term debt
M. Increase in salary payable
N. Cash sale of land
O. Sale of long-term investment
P. Acquisition of building by cash payment
Q. Net income
R. Issuance of common stock for cash
S. Payment of cash dividend
Answer:
A. noncash investing and financing (NIF)
B. investing (I), decreases (minus)
C. financing (F), increases (+)
D. operating (O), decreases (minus)
E. operating (O), increases (+)
F. operating (O), increases (+)
G. operating (O), increases (+)
H. operating (O), increases (+)
I. operating (O), increases (+)
J. operating (O), increases (+)
K. financing (F), decreases (minus)
L. financing (F), decreases (minus)
M. operating (O), increases (+)
N. investing (I), increases (+)
O. investing (I), increases (+)
P. investing (I), decreases (minus)
Q. operating (O), increases (+)
R. financing (F), increases (+)
S. financing (F), decreases (minus)
Explanation:
Operating Activities includes the Net Income and adjustments to the net income for (1) non-cash items previously included or deducted and (2) changes in working capital.
Investing Activities includes sale and investments in Property , Plant and Equipment items.
Financing Activities includes sale of ownership interest and aquisition of financing sources.
To answer this question, the cash flow from operating activities, cash flow from investing activities, and cash flow from financing activities are first as explained.
Cash flow from operating activities represents the revenue generated by a company's ongoing, routine business activity, such as manufacturing and selling things or providing a service to clients.
On a company's cash flow statement, cash flow from operating activities is the first section shown they comprise of net Income, as well as revisions to net Income for previously included or subtracted non-cash items and changes in working capital.
Cash flow from investing activities refer to the cash generated or expended on non-current assets that are expected to yield a profit in the future.
Capital expenditures, lending money, and the sale of investment securities are examples of cash flow from investing activities.
Cash flow from financing activities portion of a company's cash flow statement illustrates the net cash flows used to finance the business.
Examples of cash flow from financing activities include sales of shares, issue of debentures, and among others.
As a result of the above explanation, we have:
A. Acquisition of equipment by issuance of note payable = NIF
B. Purchase of long-term investment with cash = I-
C. Issuance of long-term note payable to borrow cash = F+
D. Increase in prepaid expenses = O-
E. Decrease in accrued liabilities = O-
F. Loss of sale of equipment = O+
G. Decrease in accounts receivable = O+
H. Depreciation of equipment = O+
I. Increase in accounts payable = O+
J. Amortization of intangible assets = O+
K. Purchase of treasury stock = F-
L. Payment of long-term debt = F-
M. Increase in salary payable = O+
N. Cash sale of land = I+
O. Sale of long-term investment = I+
P. Acquisition of building by cash payment = I-
Q. Net income = O+
R. Issuance of common stock for cash = F+
S. Payment of cash dividend = F-
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Hancock Company has 900,000 shares authorized and 350,000 shares issued and outstanding of its $2 par value common stock. The stock is currently selling for $20 per share. If Hancock Company declared and distributed a 30% stock dividend, what journal entry would the company make
Answer:
Dr Retained Earnings 210,000
Cr Common Stock 210,000
Explanation:
Based on the information given we were told that the company has 350,000 shares issued with an outstanding of its $2 par value of common stock which means that if Company declared and as well distributed a 30% stock dividend, the transaction will be recorded as
Dr Retained Earnings 210,000
Cr Common Stock 210,000
(350,000 Shares *$2 par value common stock)
=$700,000*30%
=$210,000
Philip's Inc. reports stockholders' equity on its financial statements. The two items reported in the stockholders' equity section of Philip's balance sheet are ________ Capital and Retained Earnings.
Answer:
Paid-in capital.
Explanation:
Philip's Inc. reports stockholders' equity on its financial statements. The two items reported in the stockholders' equity section of Philip's balance sheet are paid-in Capital and Retained Earnings.
In Financial accounting, Paid-in capital is one of the most essential components of the equity of a business and can be defined as the payments received in full (cash or assets) from shareholders (creditors or investors) in exchange for a company's stock. It comprises of common stock and preferred stock.
Once a surplus is accumulated, more people can engage in trade. Initially, the surplus goods of preindustrial economies are distributed through a system of __________, which is the direct exchange of goods or services considered of equal values by the traders.
Answer: battering
Explanation:
Initially, the surplus goods of preindustrial economies are distributed through a system of battering which is the direct exchange of goods or services considered of equal values by the traders.
In trade by barter, no cash is involved but rather goods with thesame values that are equivalent are exchanged.
Pearl Windows manufactures and sells custom storm windows for three-season porches. Pearl also provides installation service for the windows. The installation process does not involve changes in the windows, so this service can be performed by other vendors. Pearl enters into the following contract on July 1, 2017, with a local homeowner. The customer purchases windows for a price of $2,440 and chooses Pearl to do the installation. Pearl charges the same price for the windows irrespective of whether it does the installation or not. The installation service is estimated to have a standalone selling price of $630. The customer pays Pearl $2,040 (which equals the standalone selling price of the windows, which have a cost of $1,130) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on September 1, 2017, Pearl completes installation on October 15, 2017, and the customer pays the balance due.
Given uncertainty of finding skilled labor, Pearl is unable to develop a reliable estimate for the standalone selling price of the installation.
Prepare the journal entries for Pearl in 2017.
Answer:
July 1, 2017
No journal entry required because no money or goods have been exchanged.
September 1, 2017
Dr Cash 2,040
Dr Accounts receivable 400
Cr Sales revenue 1,621.37
Cr Unearned revenue 418.63
sales revenue = [$2,040 / ($2,040 + $630)] x $2,440 = $1,621.37
unearned revenue = $2,040 - $1,621.37 = $418.63
September 1, 2017
Dr Cost of goods sold 1,130
Cr Inventory 1,130
October 15, 2017
Dr Cash 400
Dr Unearned revenue 418.63
Cr Accounts receivable 400
Cr Sales revenue 418.63
During the month of April, it is permissible for an institution's basketball coach to lecture at a non institutional, privately owned basketball camp that is operated under restrictions applicable to institutional camps. True or False
Answer:
False
Explanation:
Since in the question, it is given that in the month of April there is the permission of basketball coach for lecturing at non-institutional camp i.e private owned but it is operated under the restrictions i.e to be applied for only institutional camps
Since it is applicable for only institutional camps but he coached to non-institutional, privately owned
so the given statement is false
Thompson Company had $1,000 in office supplies at the beginning of the fiscal year. At the end of the fiscal year, Thompson Company did an inventory of the office supplies and determined that $300 of supplies remained in the supply room unused. What is the amount of Supplies Expense at the end of the fiscal year?
Answer: Amount of supplies expense = $700
Explanation:
Given the following :
Amount of supplies at the beginning of the year = $1000
Amount of supplies which remained unused = $300
Amount of supplies expense at the end of the fiscal year = Amount of used supplies
Amount of used supplies = (amount of supplies at beginning - amount of unused supplies)
Amount of used supplies = ($1000 - $300)
Amount of used supplies = $700
Therefore, amount of supplies expense = $700
A poultry farmer is debating whether to acquire Rhode Island Reds or Buff Orpingtons to lay the eggs he wants to sell. The fixed costs for the Buffs would be $7500 and the variable costs per egg would be a dime per egg. The Reds would have a fixed cost of $6000 and a variable cost of fifteen cents. At what level of egg production would the poultry farmer be indifferent between Rhode Island Reds and Buff Orpingtons
Answer:
30,000
Explanation:
$7500 + 0.1x = $6000 + 0.15x
collect like terms and solve for x
$7500 - $6000 = 0.05x
x = 30,000
Grayson was employed as a field technician servicing building HVAC systems, but because of a downturn in the economy, he was laid off from his job. After unsuccessfully trying to secure another field tech position, Grayson finally took a job as a stock employee at Home Depot. Which of the following best describes Grayson's situation?
A. Grayson is underemployed.
B. Grayson is seasonally unemployed.
C. Grayson has downsized.
D. Grayson has secured job enrichment.
Answer:
A. Grayson is underemployed.
Explanation:
Underemployed defines that when a person is skilled but not able to utilize their ability and skills for some reason or not get enough money for it.
Therefore according to the given scenario, Grayson was skilled in the filed of technician but unfortunately because of economy Garyson was laid off by the company. After trying a lot to get the job in his field he was unsuccessful then he pick a job of stock employment which indicates that field is not of his use as it is of another field or Grayson is underemployed.
So, from the above description the right answer is A
Suppose Asarta Inc. is polluting yucko and they have been tasked with cleaning up some of their waste. The company decides to clean up Q tons of yucko—are they cleaning up enough?
Answer: The answer is No, because the MB > MC
Explanation:
They are not cleaning up enough because the MB>MC. Therefore, all other options which cut across - Yes, because the MC > MB,
No, because the MB > MC,
Yes, because the MB > MC and
No, because the MC > MB are wrong.
The demand for an electronic component is normally distributed with an average daily demand of 500 units and a standard deviation of 50. The lead time for the component is 9 days. If a service level of 95% is desired then the company's reorder point for this component would be approximately Group of answer choices
Answer:
4,747
Explanation:
The computation of the reorder point is shown below:-
Reorder Point = Average Daily demand × Lead time + ( Service level × (Average lead time × standard deviation of demand^2 )^ 0.5
For service probability level of 95% is 1.64
= 500 × 9 + 1.64 × (9 × 50^2)^0.5
= 4,500 + 1.64 × 150
= 4,500 + 247
= 4,747
Therefore for computing the reorder point we simply applied the above formula.
Juanita makes $30 an hour at work . She has to take time off work to purchase her suit, so each hour away from work costs her $30 in lost income. Assume that returning to work takes Juanita the same amount of time as getting to a store and that it takes her 30 minutes to shop. Ignore the cost of gasoline and depreciation of her car when traveling.
Complete the following table by computing the opportunity cost of Juanita's time and the total cost of shopping at each location.
Store Opportunity Cost of Time (Dollars) Price of a Suit (Dollars per suit) Total Cost (Dollars)
Local Department Store ___________________ 114 _________
Across Town ___________________ 86 _________
Neighboring City ____________________ 60 _________
Assume that Juanita takes opportunity costs and the price of the suit into consideration when she shops. Juanita will minimize the cost of the suit of she buys it from the _____
Answer:
Juanita should purchase the suit at the store across town because the total economic cost will be lowest.
Explanation:
three options:
local store 15 minutes away and a price of $114across town 30 minutes away and a price of $86neighboring city 1 hour away and a price of $60Juanita makes $30 per hour at her work, and her purchase decision includes the opportunity cost of lost wages:
total economic cost:
local store = $114 + [1/4 hours x 2 (round trip) x $30] + (1/2 hours x $30 spent shopping) = $144across town = $86 + [1/2 hours x 2 (round trip) x $30] + (1/2 hours x $30 spent shopping) = $131neighboring city = $60 + [1 hour x 2 (round trip) x $30] + (1/2 hours x $30 spent shopping) = $135Juanita should purchase the skirt at the store across town because the total economic cost will be lowest ($131)
Opportunity costs are the benefits lost or extra costs incurred for choosing one activity or investment over another alternative. Economic costs include both accounting costs and opportunity costs.
Based on the information given, the opportunity cost of time in the local department store will be $144.
Solving the opportunity cost.The opportunity cost of time across town will be:
= 1.5 × 30 = $45.
The total cost will be:
= $45 + $86 = $131
The opportunity cost of time in the neighboring city will be:
= 2.5 × 30 = $75
The total cost will be:
= $75 + $60 = $135
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Q 5.36: Badger Enterprises purchased aluminum from JG Metals. When Badger Enterprises recorded this transaction, they made entries into three accounts: Purchases, Freight Costs, and Purchase Discounts. Based on this, what type of inventory system does Badger Enterprises use
Answer: periodic inventory system
Explanation:
The type of inventory system used by Badger Enterprises is the periodic inventory system. The periodic inventory system is an inventory whereby updates are usually done on periodic basis.
In the periodic inventory system, physical count of inventory is done at specific intervals. This is the method used by the company in the question.
A coupon bond that pays semiannual interest is reported in the Wall Street Journal as having an ask price of 116% of its $1,000 par value. If the last interest payment was made 3 months ago and the coupon rate is 5.90%, the invoice price of the bond will be _________.
Answer:
1,172.50
Explanation:
Calculation for the invoice price
Since Semiannual is 6 month and the last interest payment was made 3 months ago that means we would have 3 months left.
Using this formula
Invoice price = Flat rate + Accrued interest
let plug in the formula
Invoice price = 1.16(1,000) + 25.00(3/6)
Invoice price=1,160+12.5
Invoice price=1,172.50
Therefore the invoice price will be 1,172.50