Answer:
$42,000
Explanation:
Straight line depreciation charges a fixed amount of depreciation for the period the asset is used in the business.
Depreciation Expense = Cost - Salvage Value ÷ Estimated Useful Life
January 1, 2020
Carrying Amount
Cost - Accumulated depreciation = $450,000
Recoverable Amount :
Higher of Fair Value and Future Cash Flows
Recoverable Amount = $420,000
Impairment loss incurs when Carrying Amount > Recoverable Amount
therefore,
Impairment loss = $30,000
December 31 , 2020
Depreciation expense = New Depreciable Amount ÷ Remaining useful life
= $420,000 ÷ 10
= $42,000
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
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
what more, could starbucks have done, to maximize it's chances of success with laboulange
Answer:
It probably felt like the end of the line last year when Starbucks announced plans to close all 22 La Boulange pastry shops. This was the very same croissant-creating brand that Starbucks CEO Howard Schultz once publicly praised as a key to boosting the quality of Starbucks baked goods.
But for La Boulange founder Pascal Rigo, the store closure wasn’t the end. It was a new beginning. At 56, Rigo is in the midst of making one of fast-casual’s most widely watched reinventions. In Humpty Dumpty-like fashion, he is gluing the broken pieces together again and has opened five stores in the San Francisco Bay Area—with two more on the way—under the name, La Boulangerie de San Francisco.
His grand plans: to reassemble La Boulangerie as a fast-casual powerhouse by opening up some 20 to 40 locations. He also plans to enlarge its 40,000-foot baked goods facility in San Francisco that attracts business from such high-profile retail clients as Costco and, reportedly, Trader Joe’s. While it may not be quite the magnitude of what Chipotle CEO Steve Ells accomplished after buying back Chipotle from McDonald’s, the guy who founded La Boulange has a nice chunk of it back from Starbucks.How is Starbucks diversifying itself by purchasing La Boulange? y increasing its product offerings to include bakery items. How does Starbucks' current market power increase its chances for success in expanding its product offerings to include bakery items?
have a good day/night
may i please have a branlliest
sorry if it wrong
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.
EZ-Tax is a tax accounting practice with partners and staff members. Each billable hour of partner time has a $800 budgeted price and $375 budgeted variable cost. Each billable hour of staff time has a budgeted price of $210 and a budgeted variable cost of $120. For the most recent year, the partnership budget called for 5,000 billable partner-hours and 20,000 staff-hours. Actual results were as follows:
Partner revenue $4264,000 5200 hours
Staff revenue $4510,000 22,000 hours
Required
Compute the sales price and activity variances for these data. Also compute the mix and quantity variances.
Answer:
EZ-Tax
Partner Staff Total
a. Sales price variance $104,000 ($110,000) ($6,000) U
b. Activity variance $160,000 $420,000 $580,000 F
c. Mix variance $85,000 $180,000 $265,000 F
d. Quantity variance $189,000 $70,000 $259,000 F
Explanation:
a) Data and Calculations:
Partner Staff
Budgeted billable rate per hour $800 $210
Budgeted variable cost per hour 375 120
Budgeted billable hours 5,000 20,000
Budgeted revenue $4,000,000 $4,200,000
Budgeted variable cost 1,875,000 2,400,000
Actual revenue $4,264,000 $4,510,000
Actual billable hours 5,200 22,000
Actual billable rate per hour $820 $205
Budgeted billable rate per hour $800 $210
Variance in price $20 ($5)
Sales price variance $104,000 ($110,000) ($6,000)
Sales price variance = (Standard price - Actual price) * Actual billable hours
= ($800 - $820) * 5,200 + ($210 - $205) * 22,000
= $20 * 5,200 + ($5) * 22,000
= $104,000 - 110,000
= $6,000 U
Activity variance = (Actual billable hours - Standard billable hours) * Standard rate
= (5,200 - 5,000) * $800 + (22,000 - 20,000) * $210
= (200 * $800) + (2,000 * 210)
= $160,000 + 420,000
= $580,000 F
Partner Staff Total
Budgeted revenue $4,000,000 $4,200,000 $8,200,000
Budgeted variable cost 1,875,000 2,400,000 4,275,000
Budgeted contribution $2,125,000 $1,800,000 $3,925,000
Actual revenue $4,264,000 $4,510,000 $8,774,000
Actual variable cost 1,950,000 2,640,000 4,590,000
Actual contribution $2,314,000 $1,870,000 $4,184,000
Quantity variance $189,000 $70,000 $259,000
Quantity variance = Budgeted contribution - Actual contribution
= $3,925,000 - $4,184,000
= $259,000 F
Mix Variance:
Standard contribution margin $425 $90
Volume variance 200 2,000
Mix variance = $85,000 $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.
Oriole Company has issued three different bonds during 2022. Interest is payable annually on each of these bonds. 1. On January 1, 2022, 1,000, 8%, 5-year, $1,000 bonds dated January 1, 2022, were issued at face value. 2. On July 1, $854,000, 9%, 5-year bonds dated July 1, 2022, were issued at 101. 3. On September 1, $281,000, 7%, 5-year bonds dated September 1, 2022, were issued at 99. Prepare the journal entry to record each bond transaction at the date of issuance.
Answer:
Transaction 1
Debit : Cash ($1,000 x 1,000) $1,000,000
Credit : Bond Payable $1,000,000
Transaction 2
Debit : Cash ($854,000 x 101.30%) $865,102
Credit : Bond Payable $865,102
Transaction 3
Debit : Cash ($281,000 x 99%) $278,190
Credit : Bond Payable $278,190
Explanation:
On each issuance date recognize a cash inflow and a liability - Bond Payable to the extent of the amount paid on issue.
When the quantity of coal supplied is measured in kilograms instead of pounds, the demand for coal becomes
Answer:
the quantity of coal becomes more elastic
hope this helps you ☺️☺️
Third World Gamer Inc. manufactures components for computer games within a relevant range of 500,000 to 1,000,000 disks per year. Within this range, the following partially completed manufacturing cost schedule has been prepared:
Components produced 500,000 750,000 1,000,000
Total costs:
Total variable costs $600,000 (d) (j)
Total fixed costs 600,000 (e) (k)
Total costs $1,200,000 (f) (l)
Cost per unit:
Variable cost per unit (a) (g) (m)
Fixed cost per unit (b) (h) (n)
Total cost per unit (c) (i) (o)
Complete the cost schedule above. Round costs per unit to the nearest cent.
Answer:
Third World Gamer Inc.
Cost Schedule
Components produced 500,000 750,000 1,000,000
Total costs:
Total variable costs $600,000 900,000 1,200,000
Total fixed costs 600,000 600,000 600,000
Total costs $1,200,000 $1,500,000 $1,800,000
Cost per unit:
Variable cost per unit $1.20 $1.20 $1.20
Fixed cost per unit $1.20 $0.80 $0.60
Total cost per unit $2.40 $2.00 $1.80
Explanation:
a) Data and Calculations:
Components produced 500,000 750,000 1,000,000
Total costs:
Total variable costs $600,000 (d) (j)
Total fixed costs 600,000 (e) (k)
Total costs $1,200,000 (f) (l)
Cost per unit:
Variable cost per unit (a) (g) (m)
Fixed cost per unit (b) (h) (n)
Total cost per unit (c) (i) (o)
Variable cost per unit = $1.20 ($600,000/500,000)
what is money placed in a checking account called
Answer:
bank account
Explanation:
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.
In 1993, Sheffield Company completed the construction of a building at a cost of $2,340,000 and first occupied it in January 1994. It was estimated that the building will have a useful life of 40 years and a salvage value of $69,600 at the end of that time.
Early in 2004, an addition to the building was constructed at a cost of $585,000. At that time, it was estimated that the remaining life of the building would be, as originally estimated, an additional 30 years, and that the addition would have a life of 30 years and a salvage value of $23,400.
In 2022, it is determined that the probable life of the building and addition will extend to the end of 2053, or 20 years beyond the original estimate.
Compute the annual depreciation to be charged, beginning with 2022. (Round answer to 0 decimal places)
Annual depreciation expense—building ___________
Answer:
Annual depreciation expense is $23,547
Explanation:
In the year 2022 the cost of the building will be written down value.
Using straight line depreciation method : (Cost - Salvage value ) / Useful life
Depreciation in 1994 = ( 2,340,000 - 69,600 ) / 40 years = 56,760
There is addition construction in year 2004 the carrying value of the building will be :
2,340,000 - ( 56,760 * 20 ) = 1,204,800
Depreciation in 2004 : ( 1,204,800 + 585,000 ) - 23,400 / 30 years = 58,880
Carrying value on 2022 :
1,789,800 - ( 58,880 * 18 years) = 729,960
Depreciation expense in 2022:
729,960 / 31years = $23,547
A warranty guarantees that the product sold will be acceptable for the purpose for which the buyer intends to use it.
t or f
Answer:
True
Explanation:
A warantee is a written assurance that some product or service will be provided or will meet certain specifications.
Hope this helps! <3
if a bond with a $1,000 par value, 20 years to maturity, and a coupon interest rate of 10% was selling for $1100, then the yield to maturity on that bond is: A. is less than 10% B. is greater than 10% C. is 10% D. cannot be determined g
Answer:
a
Explanation:
the yield to maturity of a bond is the total return on a bond if the bond is held to maturity. it is the equivalent of the internal rate of return.
If the yield to maturity is greater than the bonds coupon rate the bond is selling at a discount
If the yield to maturity is less than the bonds coupon rate the bond is selling at a premium
If a bond’s coupon rate is equal to its yield to maturity, then the bond is selling at par.
the bond is selling at a premium as 1100 is greater than 1000. Thus, the ytm is less than 10%
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
During the year, Walt who is self-employed travels from Seattle to Tokyo, Japan, on business. His time was spent as follows: two days travel (one day each way), two days business, and two days personal. His expenses for the trip were as follows (meals and lodging reflect only the business portion): Airfare $3,000 Lodging 2,000 Meals 1,000 Presuming no reimbursement, Walt's deductible expenses are: a.$3,500. b.$6,000. c.$4,500. d.$5,500.
Answer:
d.$5,500.
Explanation:
The computation of the deductible expense is shown below:
= Airfare + lodging + 50% of meals
= $3,000 + $2,000 + 50% of $1,000
= $3,000 + $2,000 + $500
= $5,500
hence, the deductible expense is $5,500
Here we take 100% of airfare & lodging but we took 50% for the meals
hence, the option d is correct
Suppose that an initial $20 billion increase in investment spending expands GDP by $20 billion in the first round of the multiplier process. Also assume that GDP and consumption both rise by $18 billion in the second round of the process. Instructions: Round your answers to 1 decimal place. a. What is the MPC in this economy
Answer: 0.9
Explanation:
The marginal propensity to consume (MPC) is calculated by using the formula:
= Change in consumption / Change in income
where,
Change in consumption = $18 billion
Change in income = $20 billion
MPC = Change in consumption / Change in income
= $18 billion / $20 billion
= 0.9
Therefore, MPC is 0.9.
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
) 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%.
Yozamba Technology has two divisions, Consumer and Commercial, and two corporate service departments, Tech Support and Purchasing. The corporate expenses for the year ended December 31, 20Y7, are as follows:
Tech Support Department $516,000
Purchasing Department 89,600
Other corporate administrative expenses 560,000
Total corporate expense $1,165,600
The other corporate administrative expenses include officers' salaries and other expenses required by the corporation. The Tech Support Department charges the divisions for services rendered, based on the number of computers in the department, and the Purchasing Department charges divisions for services, based on the number of purchase orders for each department. The usage of service by the two divisions is as follows:
Tech Support Purchasing
Consumer Division 375 computers 1,960 purchase prder
Commercial Division 225 3640
Total 600 computers 5,600 purchase order
The service department charges of the Tech Support Department and the Purchasing Department are considered controllable by the divisions. Corporate administrative expenses are not considered controllable by the divisions. The revenues, cost of goods sold, and operating expenses for the two divisions are as follows:
Consumer Commercial
Revenues $7,430,000 $6,184,000
Cost of goods sold 4,123,000 3,125,000
Operating expenses 1,465,000 1,546,000
Required:
Prepare the divisional income statements for the two divisions.
Answer:
Yozamba Technology
Divisional Income Statements:
Consumer Commercial Total
Revenues $7,430,000 $6,184,000 $13,614,000
Cost of goods sold 4,123,000 3,125,000 7,248,000
Gross profit $3,307,000 $3,059,000 $6,366,000
Operating expenses 1,465,000 1,546,000 3,011,000
Corporate expenses:
Tech Support 322,500 193,500 516,000
Purchasing 31,360 58,240 89,600
Other corporate administrative expenses 560,000
Total expenses $1,818,860 $1,797,740 $4,176,600
Net income (loss) $1,488,140 $1,261,260 $2,189,400
Explanation:
a) Data and Calculations:
Corporate expenses for the year ended December 31, 20Y7:
Tech Support Department $516,000 Number of computers
Purchasing Department 89,600 Number of POs
Other corporate administrative expenses 560,000
Total corporate expense $1,165,600
Usage of Service:
Tech Support Purchasing
Consumer Division 375 computers 1,960 purchase order
Commercial Division 225 3,640
Total 600 computers 5,600 purchase order
Overhead Rates:
Tech Support = $860 per computer ($516,000/600)
Purchase = $16 per purchase order ($89,600/5,600)
Allocation of Corporate Expenses:
Tech Support Purchasing Total
Consumer Division $322,500 $31,360 353,860
(375 * $860) (1,960 * $16)
Commercial Division 193,500 58,240 251,740
(225 * $860) (3,640 * $16)
Total $516,000 $89,600 $605,600
The net income reported on the income statement for the current year was $225,000. Depreciation recorded on plant assets was $38,000. Accounts receivable and inventories increased by $2,000 and $8,000, respectively. Prepaid expenses and accounts payable decreased by $1,000 and $11,000 respectively. How much cash was provided by operating activities
Answer:
The amount of cash provided by operating activities is $243,000.
Explanation:
The amount of cash provided by operating activities can be calculated as follows:
Cash provided by operating activities = Net income + Depreciation - Increase in accounts receivable - Increase in inventory + Decrease in prepaid expenses - Decrease in accounts payable
Cash provided by operating activities = $225,000 + $38,000 - $2,000 - $8,000 + $1,000 - $11,000
Cash provided by operating activities = $243,000
Therefore, the amount of cash provided by operating activities is $243,000.
Platinum Services provides outsourced employee benefits administration services to several private and public sector companies. It is now planning to attract new business by introducing a premium service for high revenue companies (with year-end revenues of $2 billion or more) and wants to undertake a survey of companies sampled from the New York Stock Exchange, which lists public sector companies, in order to estimate the popularity of such a proposal.
Required:
What best describes the sampling frame?
Answer:
High revenue public companies on New York Stock Exchange
Explanation:
Sampling Frame is a list of all the units of population, which can be included in sample.
In this case - survey of sampled high revenue companies from New York Stock Exchange, for analysing popularity of 'employee benefit services'. Sampling Frame would be list of all high revenue public companies on New York Stock Exchange, out of which sample companies (for survey) will be selected.
Olsen Outfitters Inc. believes that its optimal capital structure consists of 65% common equity and 35% debt, and its tax rate is 40%. Olsen must raise additional capital to fund its upcoming expansion. The firm will have $2 million of retained earnings with a cost of rs = 12%. New common stock in an amount up to $7 million would have a cost of re = 16%. Furthermore, Olsen can raise up to $2 million of debt at an interest rate of rd = 10%, and an additional $5 million of debt at rd = 12%. The CFO estimates that a proposed expansion would require an investment of $5.7 million.
Required:
What is the WACC for the last dollar raised to complete the expansion? Round your answer to two decimal places.
Answer: 12.5%
Explanation:
Amount that will be raised with Equity = 65% * 5,700,000 = $3,705,000
This is more than the retained earnings so new equity will have to be issued at cost of 16%
Amount raised by debt = 35% * 5,700,000 = $1,995,000
Less than $2 million so cost of debt is 10%
WACC = cost of equity * weight of equity + weight of debt * cost of debt * ( 1 - tax rate)
= (16% * 65% ) + (35% * 10% * (1 - 40% tax))
= 12.5%
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
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).
Match the terms with their corresponding descriptions.
a. Firms' costs associated with changing their prices
b. When workers respond, not to the purchasing power of their wage, but to the face value of their wage or salary
c. An event that changes the existing productivity and therefore changes the extent to which economic growth occurs
d. Given flexible prices and the existing factors of production, a measure of how much the economy grows
e. Variations in the growth rate from the long-run rate of economic growth real shock business fluctuations
1. Menu Cost
2. Transaction
3. Real
4. Natural Rate of Unemployment
5. Nominal Wage
6. Business Fluctuations
7. Slow Growth Rate
8. Purchasing power Discrepancies
Answer:
a. Menu cost.
b. Nominal wage of confusion.
c. Real shock.
d. Solow Growth Rate
e. Business Fluctuations.
Explanation:
a. Menu cost: Firms' costs associated with changing their prices.
b. Nominal wage of confusion: When workers respond, not to the purchasing power of their wage, but to the face value of their wage or salary.
c. Real shock: An event that changes the existing productivity and therefore changes the extent to which economic growth occurs.
d. Solow Growth Rate: Given flexible prices and the existing factors of production, a measure of how much the economy grows.
The Solow Growth Model, developed by Robert Solow, a Nobel Prize winning economist. It was the first neoclassical growth model which was was built upon the Keynesian Harrod-Domar model. The modern theory of economic growth is given by the Solow Model.
The equation below gives us the change in capital stock per worker with population growth at rate n;
Δk = sf(k) – (δ + n)k.
Where k: capital stock per worker in period t
s: savings rate
δ: rate of depreciation of capital
n: labor or number of workers
sf(k): savings per capita multiplied by a fraction of income saved.
e. Business Fluctuations: Variations in the growth rate from the long-run rate of economic growth real shock business fluctuations.
Ace Racket Company manufactures two types of tennis rackets, the Junior and Pro Striker models. The production budget for July for the two rackets is as follows:
Junior Pro Striker
Production budget 7,400 units 18,600 units
Both rackets are produced in two departments, Forming and Assembly. The direct labor hours required for each racket are estimated as follows:
Forming Department Assembly Department
Junior 0.2 hour per unit 0.4 hour per unit
Pro Striker 0.35 hour per unit 0.7 hour per unit
The direct labor rate for each department is as follows:
Forming Department $14 per hour
Assembly Department $12 per hour
Required:
Prepare the direct labor cost budget for July.
Answer and Explanation:
The preparation of the direct labor cost budget for July month is as follows:
Particulars Forming Dept Assembly Dept
Production 7,400 units 18,600 units
Hours required junior 1,480 2,960
(7,400 units × 0.2) (7,400 units × 0.4)
Hours required pro 6,510 13,020
(18,600 units × 0.35) (18,600 units × 0.7)
Total hours 7,990 15,980
Total hours rate $14 $12
Total direct labor cost $111,860 $191,760
In the context of customer benefit packages,__________are those that are not essential to the primary service, but enhance it.
a.
central services
b.
peripheral services
c.
tertiary services
d.
core services
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.