Answer:
11.64%
Explanation:
The next dividend payment for Savitz Inc. is $3.21 per share
The growth rate is 4%
= 4/100
= 0.04
The current stock price is $42 per share
Therefore, the required rate of return can be calculated as follows
R= Next dividend payment/Current stock price + growth rate
= $3.21/$42 + 0.04
= 0.0764+0.04
= 0.1164×100
= 11.64%
Hence the required rate of return is 11.64%
Your father has $500,000 invested at 8%, and he now wants to retire. He wants to withdraw $50,000 at the end of each year, beginning at the end of this year. How many years will it take to exhaust his funds, i.e., run the account down to zero
Answer:
The number of years is about 21 years
Explanation:
A scheme that allows the withdraw fixed amount of money for a number of years is referred to as annuity
The number of years required to exhaust the fund can be determined using the present of annuity formula
PV = A × (1 - ((1+r)^(-n))/n)
where- PV- Present value, A- annual cash flow, n- number of years , r- interest rate
500,000= 50000 × (1- (1.08)^(-n)/0.08
500,000/50,000= (1- (1.08)^(-n)/0.08
10 =(1- (1.08)^(-n)/0.08
n = 21
The number of years is about 21 years
Rick, who is single, has been offered a position as a city landscape consultant. The position pays $141,800 in cash wages. Assume Rick has no dependents. Rick deduct the standard deduction instead of itemized deductions and he is not eligible for the qualified business income deduction. (Use the tax rate schedules.)
Required:
a. What is the amount of Rick’s after-tax compensation (ignore payroll taxes) and his income tax liability?
b. Suppose Rick receives a competing job offer of $102,500 in cash compensation and nontaxable (excluded) benefits worth $4,900.
Answer:
I used the 2020 standard deduction and income tax brackets to calculate the answer.
a. What is the amount of Rick’s after-tax compensation (ignore payroll taxes) and his income tax liability?
Rick's gross income $141,800
- standard deduction $12,400
taxable income $129,400
income taxes = (10% x $9,875) + (12% x $30,250) + (22% x $45,400) + (24% x $43,875) = $25,135.50
after tax income = $141,800 - $25,135.50 = $116,664.50
b. Suppose Rick receives a competing job offer of $102,500 in cash compensation and nontaxable (excluded) benefits worth $4,900.
Rick's gross income $102,500
- standard deduction $12,400
taxable income $90,100
income taxes = (10% x $9,875) + (12% x $30,250) + (22% x $45,400) + (24% x $4,575) = $15,703.50
after tax income = $102,500 - $15,703.50 + $4,900 = $91,696.50
If economies of scale are so pronounced in an industry that only one firm can survive in the industry, this firm is called a(n) __________ monopoly.
Answer:
The answer is a natural monopoly
Explanation:
A natural monopoly is one of the forms monopoly that exists due to the high capital needed or powerful economies of scale of conducting a business in a specific industry. A natural monopoly will naturally have very high fixed costs, meaning that it is almost impossible to have more than one firm producing the good.
A firm that is blessed with a natural monopoly might be the only provider of a product or service in an industry or geographic location. Example of natural monopoly is the electricity grid.
On November 1, 2018, Master's Co. borrows $500,000 from its bank for five years at an annual interest rate of 10%. According to the terms of the loan, the principal amount will not be due for five years. Interest accrues monthly on the first day of each month, beginning November 1, 2018. With respect to this borrowing, Master's December 31, 2018, balance sheet included only a long-term note payable of $500,000. As a result:_______
a. Liabilities are understated by $12,500 accrued interest payable
b. Liabilities are understated by $4,167 accrued interest payable
c. The December 31, 2018, financial statements are accurately presented
d. Liabilities are understated by $8,333 accrued interest payable
Answer:
b. Liabilities are understated by $4,167 accrued interest payable
Explanation:
Milltown Company specializes in selling used cars. During the month, the dealership sold 31 cars at an average price of $15,900 each. The budget for the month was to sell 29 cars at an average price of $16,900. Compute the dealership's sales price variance for the month.
Answer:
The dealership's sales price variance for the month is $31,000 U
Explanation:
In order to calculate the dealership's sales price variance for the month we would have to calculate the following formula:
Sales price variance = Actual quantity sold x (Actual price - Budgeted price)
According to the given data que have the following:
Actual quantity sold=31 cars
Actual price=$15,900
Budgeted price=$16,900
Therefore, Sales price variance = 31 * ($15,900 - $16,900)
Sales price variance = $31,000 U
The dealership's sales price variance for the month is $31,000 U
. Journalize the purchase transactions. Explanations are not required. 2. In the final analysis, how much did the inventory cost Green?
Complete Question:
Feb.2: Green buys $21,500 worth of inventory on account with credit terms of 1/15, n/60 FOB shipping point.
Feb.4: Green pays a $140 freight charge.
Feb.7: Green returns $5,600 of the merchandise due to damage during shipment.
Feb. 14: Green paid the amount due, less return and discount.
Journalize the purchase transactions. Explanations are not required. 2. In the final analysis, how much did the inventory cost Green?
Answer:
General Journal:
a) Feb. 2:
Debit Inventory Account $21,500
Credit Accounts Payable $21,500
To record the purchase of inventory on account, terms 1/15, n/60 FOB shipping point.
b) Feb.4:
Debit Freight-In Expense $140
Credit Cash Account $140
To record the payment of freight-in.
c) Feb.7:
Debit Accounts Payable $5,600
Credit Inventory $5,600
To record the return of damaged goods.
c) Feb. 14:
Debit Accounts Payable $15,900
Credit Cash Discount $159
Credit Cash Account $15,741
To record payment on account.
Explanation:
Journal entries are very useful in the initial recording of transactions into the accounting books. They show the accounts that will be debited and the other one that will be credited in the general ledger to comply with the double entry system of bookkeeping.
Certain car companies offer performance cars at affordable prices, but in doing so they contribute to climate and environmental issues. These car companies overlook the .................. philosophy.
Can you complete the gap?
Answer:
Kaizen Philosophy
Explanation:
Kaizen philosophy refers to good change. It is a Japanese term in which the companies are required to improve their processes continuously. The companies which offer low cost car vehicles are overlooking Kaizen principle because they are contributing to environment pollution. Kaizen principle focuses on new improvements and abolishes old concepts.
Worst Buy Company has had a lot of complaints from customers of late, and its stock price is now only $4 per share. It is going to employ a one-for-six reverse stock split to increase the stock value. Assume Dean Smith owns 156 shares.
a. How many shares will he own after the reverse stock split? (Do not round intermediate calculations and round your answer to the nearest whole number.) Number of shares b. What is the anticipated price of the stock after the reverse stock split? (Do not round intermediate calculations and round your answer to 2 decimal places.) Anticipated stock price $c. Because investors often have a negative reaction to a revere stock split, assume the stock only goes up to 80 percent of the value computed in part b. What will the stock’s price be? (Do not round intermediate calculations and round your answer to 2 decimal places.) Stock price $d. How has the total value of Dean Smith’s holdings changed from before the reverse stock split to after the reverse stock split (based on the stock value computed in part c)? To get the total value before and after the split, multiply the shares held times the stock price.(Input the amount as a positive value. Do not round intermediate calculations and round your answer to 2 decimal places.) Dean Smith’s holdings $
Answer:
A. Post-split shares 26 shares
B.Post-split stock price$24
C.Adjusted stock price$19.2
D.Pre split value $624.00
Post-split value $499.2
Change in value=-$124.8
Explanation:
Worst Buy Company
a. Calculation for Post-split shares
Post split share= Pre-split shares × Split ratio=156 × 1/6=26 shares
b. Calculation for Post-split stock price
Post split stock price= Pre-split price × (1 / Split ratio)
=$4 × 6/1=$24.00
c. Calculation for Adjusted stock price
Adjusted stock price = Adjustment ratio × Post-split price=.80 × $24.00=$19.2
d. Calculation for Pre-split value
Pre split value = Pre-split shares × Pre-split price=
156 × $4=$624.00
Post-split value = Post-split shares × Post-split price=26 × $19.2=$499.2
Change in value = Post-split value – Pre-split value=$624.00 – $499.2
Change in value=-$124.8
The value of Dean Smith's holdings decreased by $124.8
According to Nikki, the design and development manager at Holden Outerwear, it is difficult for the company to push its vendors toward new developments because the vendors:
Answer: b. do not want to develop products that may not get used.
Explanation:
According to the case study, Manager Nikki Brush tells of how they introduce new ways of doing things by being able to encourage and push their vendors in a way that they are not used to. She does admit though that it is getting harder to do so because the vendors are seeing their costs rise and don't want to make goods that people might not want to use because they are new and untested.
The Case in question is attached.
Suppose GDP in this country is $900 million. Enter the amount for consumption. National Income Account Value (Millions of dollars) Government Purchases ( G ) 250 Taxes minus Transfer Payments ( T ) 325 Consumption ( C ) Investment ( I )
Answer:
Consumption ( C ) = $325 million
Explanation:
Given:
GDP = $900 million:
Government Purchases ( G ) = $250 million
Taxes minus Transfer Payments ( T ) = $325 million
Investment ( I ) = $275 million
Find:
Consumption ( C )
Computation:
GDP = C + I + G
$900 million = Consumption ( C ) + $250 million + $325 million
Consumption ( C ) = $900 million - [$250 million + $325 million]
Consumption ( C ) = $325 million
A company borrowed cash from the bank by signing a 5-year, 8% installment note. The present value for an annuity (series of payments) at 8% for 5 years is 3.9927. The present value of 1 (single sum) at 8% for 5 years is .6806. Each annual payment equals $75,000. The present value of the note is:
Answer: $299,452.50
Explanation:
The company will pay back $75,000 every year for 5 years. This is an Annuity as the payments are constant.
The Present Value = Annuity * ( Present Value Interest Factor of an Annuity for the year and interest)
Present Value = 75,000 * 3.9927 ( Present value Interest Factor of an Annuity at 8% for 5 years)
= $299,452.50
AMC Corporation currently has an enterprise value (EV) of $400 million and $100 million in excess cash. The firm has 10 million shares outstanding and no debt. Suppose AMC uses its excess cash to repurchase shares. After the share repurchase, news will come out that will change AMC's enterprise value to either $600 million or $200 million. [Note: Enterprise Value (EV) = Equity + Debt – Cash] a) What is AMC's share price prior to the share repurchase? b) What is AMC's share price after the repurchase if its enterprise value goes up?
Answer:
a. AMC's share price prior to the share repurchase is $ 50 per share
b. AMC's share price after the repurchase if its enterprise value goes up is $75.00 per share
Explanation:
a. In order to calculate AMC's share price prior to the share repurchase we would have to make the following calculation:
AMC's share price prior to the share repurchase=Market Capitalization/Number of shares outstanding
According to the given data Number of shares outstanding=10 million shares
Market Capitalization=Enterprise Value + Cash in Hand
Market Capitalization=$400 million + $100 million
Market Capitalization=$500 million
Therefore, AMC's share price prior to the share repurchase=$500 Million / 10 million shares
AMC's share price prior to the share repurchase= $ 50 per share
b. To calculate AMC's share price after the repurchase if its enterprise value goes up we would have to make the following calculation:
AMC's share price after the repurchase if its enterprise value goes up=Market Capitalization/Number of shares outstanding after repurchase
According to the given data After the share repurchase, news will come out that will change AMC's enterprise value to $600 million, hence, Market Capitalization=$600 million
Number of shares outstanding after repurchase=Number of shares outstanding-Number of shares repurchased
Number of shares repurchased= Cash used for repurchase / Market Price per share
Number of shares repurchased=$ 100 million / $ 50 per share
Number of shares repurchased= 2 million shares
Hence, Number of shares outstanding after repurchase=10 million - 2 million
Number of shares outstanding after repurchase=8 million
Therefore, AMC's share price after the repurchase if its enterprise value goes up=$600 million/ 8 million
AMC's share price after the repurchase if its enterprise value goes up=$75.00 per share
An investor buys a 10-year, 7% coupon bond for $1,050, holds it for 1 year, and then sells it for $1,040. What was the investor's rate of return?
Answer:
The answer is 5.71%
Explanation:
Solution
Given that
Coupon rate = 7%
Bond = $1050
Sale of the bond = $1040
n = 10 years, n = 1 year
Now we find the investor's rate of return
Thus
Coupon payment = 7%* 1000
=70
1050 = 70/(1+r) + $1,040/(1+r)
r= 5.71%
Therefore the rate of return of the investor is 5.71%
or
Rate of return = (P1-P0+ Interest ) /P0
= (1040 -1050 + 70 )/1050
= .0571 or 5.71%
You will pay $7,000 now to purchase a perpetuity which will pay you and your heirs $340 at the end of each year, forever. What is the rate of return on this perpetuity?
Answer:
4.86%
Explanation:
Interest rate of a perpetuity = amount / present value
$340 / $7,000 = 0.048571 = 4.86%
I hope my answer helps you
Answer:
4.86%
Explanation:
Interest rate of a perpetuity = amount / present value
$340 / $7,000 = 0.048571 = 4.86%
Under which model of oligopoly are firms more likely to engage in a price war, driving down prices to marginal cost and resulting in no profit?
Answer:
The price leardership model of oligopoly
The specific identification method (select all that apply): matches each unit of inventory with its actual cost is not an acceptable method of accounting would be beneficial to a company that makes inexpensive products with high sales volume would be beneficial to a company that makes fine jewelry
Answer:
The specific identification methoda) matches each unit of inventory with its actual cost
d) would be beneficial to a company that makes fine jewelry
Explanation:
The specific identification inventory valuation method is one of the inventory valuation method allowed by U.S. GAAP. The other allowed methods are weighted average; and first in, first out (FIFO). The specific identification method identifies every item kept in inventory and its price and tracks it from purchase to resale. Some types of businesses that use the specific identification method are jewelry companies and stores, car dealerships, art galleries, and furniture stores, who can easily identify each item and track the cost and price respectively.
The specific identification method of costing inventories is used when finding out the cost of the ending inventory.
Correct option is A and D.
The specific identification method is "matches each unit of inventory with its actual cost and would be beneficial to a company that makes fine jewelry."
One of the inventory methods permitted by US GAAP is the particular identification inventory valuation method. Weighted average and first in, first out are two alternative strategies that can be used. Every item in inventory, as well as its price, is identified and tracked using this system, from purchase through resale.
Jewelry companies and stores, auto dealerships, art galleries, and furniture stores are just a few examples of enterprises that use the particular identification method to quickly identify each item and track the cost and pricing.
To know more about specific identification method, refer to the link:
https://brainly.com/question/25056275
Vogel Inc. manufactures memory chips for electronic toys within a relevant range of 25,000 to 100,000 memory chips per year. Within this range, the following partially completed manufacturing cost schedule has been prepared: Memory Chips Produced 40,000 60,000 90,000 Total Variable Costs $1,400,000 D J Total Fixed Costs 800,000 E K Total Costs $2,200,000 F L Variable Costs per Unit A G M Fixed Cost Per Unit B H N Total Cost per Unit C I O Find the missing amounts for A-O A. ______________ B. ______________ C. ______________ D. ______________ E. ______________ F. ______________ G. ______________ H. ______________ I. _______________ J. ________________ K. _______________ L. _________________ M. _________________ N. _____________________ O. __________________
Answer and Explanation:
The computation of the missing amount is as follows
Components produced 40,000 60,000 90,000
Total cost
Total variable cost $1,400,000 $2,100,000 $3,150,000
(60,000 × $35) (90,000 × $35)
Total fixed cost $800,000 $800,000 $800,000
Total cost $2,200,000 $2,900,000 $3,950,000
Cost per unit
Variable cost per unit $35 $35 $35
($1,400,000 ÷ 40,000)
Fixed cost per unit $20 $13.33 $8.89
($800,000 ÷ 40,000) ($800,000 ÷ 60,000) ($800,000 ÷ 90,000)
Total cost per unit $55 $46.33 $43.89
The total cost per unit come from
= Variable cost per unit + fixed cost per unit
Barredo Corporation's relevant range of activity is 3,000 units to 7,000 units. When it produces and sells 5,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 6.60 Direct labor $ 3.65 Variable manufacturing overhead $ 1.65 Fixed manufacturing overhead $ 2.80 Fixed selling expense $ 0.70 Fixed administrative expense $ 0.40 Sales commissions $ 0.50 Variable administrative expense $ 0.45 If 4,000 units are sold, the variable cost per unit sold is closest to:
Answer:
The variable cost per unit sold is closest to $11.90.
Explanation:
Only variable manufacturing costs are included in product costing under the variable costing method.
Both the fixed manufacturing costs and non-manufacturing costs are treated as period costs, expensed in the profit and loss.
Calculation of Variable Unit Cost
Direct materials $ 6.60
Direct labor $ 3.65
Variable manufacturing overhead $ 1.65
Total Variable Unit Cost $11.90
Conclusion :
The variable cost per unit sold is closest to $11.90.
On January 1, 2013, an investor purchases 25,000 common shares of an investee at $9 (cash) per share. The shares represent 20% ownership in the investee. The investee shares are not considered "marketable" because they do not trade on an active exchange. On January 1, 2013, the book value of the investee's assets and liabilities equals $600,000 and $150,000, respectively. On that date, the appraised fair values of the investee's identifiable net assets approximated the recorded book values. During the year ended December 31, 2013, the investee company reported net income equal to $22,500 and dividends equal to $12,000.
Noncontrolling investment accounting (price equals book value)
Assume the investor does not exert significant influence over the investee. Determine the balance in the "Investment in Investee" account at December 31, 2013.
Explanation:
Bring ur as over here and ill use my dic
Wexpro, Inc., produces several products from processing 1 ton of clypton, a rare mineral. Material and processing costs total $54,000 per ton, one-fourth of which is allocated to product X15. Six thousand three hundred units of product X15 are produced from each ton of clypton. The units can either be sold at the split-off point for $17 each, or processed further at a total cost of $8,700 and then sold for $20 each.
Required
1. What is the financial advantage (disadvantage) of further processing product X15?
2. Should product X15 be processed further or sold at the split-off point?
1.
2. Product X15 should be
Answer:
1. What is the financial advantage (disadvantage) of further processing product X15?
financial advantage of further processing X15 = $10,2062. Should product X15 be processed further or sold at the split-off point?
X15 should be processed furtherExplanation:
processing costs for every batch of X15 (6,300 units) = $54,000 x 1/4 = $13,500
production cost per unit $13,500 / 6,300 = $2.14286 = $2.14 per X15
contribution margin per unit without further processing = $17 - $2.14 = $14.86
costs of further processing $8,700, per unit = $8,700 / 6,300 = $1.38
total costs per unit $2.14 + $1.38 = $3.52
contribution margin with further processing = $20 - $3.52 = $16.48
total financial advantage of further processing X15 = ($16.48 - $14.86) x 6,300 = $10,206
addresses unknown parameters in the real world that parallel descriptive measures of very large population? A. The sample mean / B. Statistic Inference C. The central Limit Theorem
Answer:
The answer is "Option B".
Explanation:
Inferential statistics was its process through which data collection is used to conclude the property or even an implicit wave function. Its analysis infers these same features of inhabitants. Its purpose is to use statistical strategies to determine important assumptions regarding sample size, and other choices were wrong which can be defined as follows:
In option A, it defines the average of the given values, that's why it is wrong.In option C, It is used to0 describes a number of samples that's why it is wrong.Refer to Exhibit 26- 1. If average-cost pricing is imposed on the natural monopoly firm, what price is charged?
a. P1
b. P2
c. P3
d. any of the three prices
Answer: b. P2
Explanation:
Average Cost Pricing regulations being imposed on natural monopolies means that the regulators want them to charge customers a price that is close to or is the same as the Average cost it costs to produce goods and services.
The price that the Monopoly will charge is therefore the intersection between the Average Total Cost Curve and the Demand curve.
From the graph that price is P2 so that is the price that will be charged.
Exercise 9-17 Flexible Budget Performance Report [LO9-1, LO9-2, LO9-3, LO9-4]
AirQual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and actual results for the month of February:
Fixed Component
per Month Variable
Component per Job Actual Total
for February
Revenue $ 275 $ 38,500
Technician wages $ 8,100 $ 7,950
Mobile lab operating expenses $4,800 $ 33 $ 9,590
Office expenses $ 2,400 $ 2 $ 2,550
Advertising expenses $1,590 $ 1,660
Insurance $ 2,850 $ 2,850
Miscellaneous expenses $ 960 $ 2 $ 565
The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,800 plus $33 per job, and the actual mobile lab operating expenses for February were $9,590. The company expected to work 150 jobs in February, but actually worked 160 jobs.
Required:
Prepare a flexible budget performance report showing AirQual Test Corporation’s revenue and spending variances and activity variances for February. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
Answer:
AirQual Test Corporation
Flexible Budget Performance Report for February:
Fixed Variable Flexible Actual
Component Budget Total
Revenue $ 275 $38,500 $ 38,500 0 None
Technician wages $ 8,100 $8,100 $ 7,950 150 F
Mobile lab operating
expenses $4,800 $ 33 $10,080 $ 9,590 490 F
Office expenses $ 2,400 $ 2 $2,720 $ 2,550 170 F
Advertising expenses $1,590 $1,590 $ 1,660 70 U
Insurance $ 2,850 $2,850 $ 2,850 0 None
Miscellaneous expenses $ 960 $ 2 $1,280 $ 565 715 F
Explanation:
Fixed Component Variable Budget Actual
Revenue $ 275 $41,250 $ 38,500
Technician wages $ 8,100 $8,100 $ 7,950
Mobile lab operating
expenses $4,800 $ 33 $9,750 $ 9,590
Office expenses $ 2,400 $ 2 $2,700 $ 2,550
Advertising expenses $1,590 $1,590 $ 1,660
Insurance $ 2,850 $2,850 $ 2,850
Miscellaneous expenses $ 960 $ 2 $1,260 $ 565
b) Variable elements for the flexible budget:
1) Mobile lab operating expenses = $4,800 + ($33 x 160) = $10,080
2) Office Expenses = $2,400 + ($2 x 160) = $2,720
3) Miscellaneous expenses = $960 + ($2 x 160) = $1,280
c) A flexible budget is a budget that is flexed with regard to the volume of activity, with respect to the variable elements. This budget type changes in value as a result of the changes in the volume of activity. It is different from a static budget, which does not change in value following the level of activity and does not account for changing incomes and expenses.
An investment had a nominal return of 11.1 percent last year. If the real return on the investment was only 7.3 percent, what was the inflation rate for the year
Answer:
inflation rate= 3.8%
Explanation:
Giving the following information:
Nominal return= 11.1 percent
Real return= 7.3 percent
The real return on investments is the difference between the nominal return and the inflation rate.
Real return= nominal return - inflation rate
inflation rate= nominal return - real return
inflation rate= 11.1 - 7.3
inflation rate= 3.8%
Suppose you are evaluating two mutually exclusive projects, A and B. Project A costs $350 and has cash flows of $250 and $250 in the next 2 years, respectively. B costs $300 and generates cash flows of $300 and $100. What is the crossover rate for these projects
Answer:
The answer is 30%
Explanation:
Solution
Given that:
Project A
Project A costs = $350
Cash flows =$250 and $250 (next 2 years)
Project B
Project B costs =$300
Cash flow = $300 and $100
Now what is the crossover rate for these projects.
Thus
Year Project A Project B A-B B-A
0 -350 -300 -50 50
1 250 300 -50 50
2 250 100 150 -150
IRR 27% 26% 30% 30%
So,
CF = CF1/(1+r)^1 + CF2/(1+r)^2
$-50 = $-50/(1+r)^1 + $150/(1+r)^2
r = 30%
CF = CF1/(1+r)^1 + CF2/(1+r)^2
$50 = $50/(1+r)^1 + $-150/(1+r)^2
r = 30%
Hence, the cross over rate for these project is 30%
Note:
IRR =Internal rate of return
CF =Cash flow
r = rate
A corporation issued 5,600 shares of $10 par value common stock in exchange for some land with a market value of $82,000. The entry to record this exchange is:
Answer:
The entry for the exchange is therefore;
Dr Land $82,000
Cr common stock $56,000
Cr Paid in capital in excess of par value common stock $26,000
Explanation:
The land was gotten at a price of $82,000(its fair value)
Common stock issue = 5,600 shares x $10 par value common stock
= $56,000
Paid in capital in excess of par value common stock = $82,000 - $56,000
=$26,000
The entry for the exchange is therefore;
Dr Land $82,000
Cr common stock $56,000
Cr Paid in capital in excess of par value common stock $26,000
The production budget for manner company shows units to be produced as follows: july, 630: august 690, and september 550. Each unit produced requires three hours of direct labor. The direct labor rate is currently $16 per hour but is predicted to be $16.75 per hour in september.
Prepare a direct labor budget for the months July, August, and September.
Answer:
Results are below.
Explanation:
Giving the following information:
Production:
July, 630
August 690
September 550
Each unit produced requires three hours of direct labor.
The direct labor rate is currently $16 per hour but is predicted to be $16.75 per hour in September.
Direct labor budget July:
Direct labor hours required= 630*3= 1,890
Direct labor cost= 1,890*16= $30,240
Direct labor budget August:
Direct labor hours required= 690*3= 2,070
Direct labor cost= 2,070*16= $33,120
Direct labor budget September:
Direct labor hours required= 550*3= 1,650
Direct labor cost= 1,650*16.75= $27,637.5
The potential sources of noise and bias in accounting data are: Group of answer choices Rigidity in accounting rules Random forecast errors Systematic reporting choices made by corporate manager to achieve specific objectives All of the above None of the above
Answer: All of the above
Explanation:
Accounting data can have bias or data that should not necessarily be included due to a couple of factors.
Accounting rules are too rigid because when they are applied, the Accountants will ibe unable to remove the noise and entries made by Management without removing a substantial part of Accounting records. There is need for more flexible rules so that Accountants can restrict how easily Management can introduce bias.
Accounting works a lot of forecasted information and it is impossible to make completely accurate forecasts as events can simply happen out of nowhere and disrupt operations. Also there is Human error in the forecasts so this can lead to noise and bias.
Finally, Accounting bias and noise can be linked to pressure from Corporate management to report data in a certain way for a myriad of reasons such as to improve management benefits if they are performance related, to avoid taxes, and to avoid Government regulations amongst others.
Often in business the greater the risk, the __________.
Answer:
greater the potential reward
Explanation:
"A firm's peak borrowing needs will probably be overstated if it bases its monthly cash budget on the assumption that both cash receipts and cash payments occur uniformly over the month but in reality receipts are concentrated at the beginning of each month." True or False
Answer: True
Explanation:
If the firm borrows on the assumption that it will be receiving cash throughout the month this means that they are borrowing because they would like to offset costs as they come in then pay as they receive money.
If they however receive all the money that they were to receive for the month in the beginning of the month, there would be no need to borrow as much to offset costs because the money received will act as a reserve which will offset the payments that will be uniform throughout the month.