Regal Industries has one product. Information about the production and sales of that product for the past year follow (Click the icon to view the data) The company had no beginning inventory Read the requirements adj Requirement 1. Prepare two income statements for the year, one using absorption costing and one using variable costing Begin by preparing the income statement for the year using absorption costing Regal Industries Income Statement (Absorption Costing) For the Year Ended Data table Less: Less: Now prepare the income statement for the year using variable costing. Regal Industries Calculator S Selling price per unit 46,00 Direct material per unit. 14.00 Direct labor per unit. $ 10.00 $ 220,000 Total annual manufacturing overhead.. S $ Fixed portion of annual manufacturing overhead Variable operating expenses per unit sold Fixed operating expenses per year in total Units manufactured.. 88,000 7:00 42.000 $ 22,000 21,000 Units sold $ Regal Industries has one product. Information about the production and (Click the icon to view the data.) The company had no beginning inventory. Read the requirements. Now prepare the income statement for the year using variable costing. Regal Industries Contribution Margin Income Statement (Variable Costing) For the Year Ended Less: Less: Read the fequirement Use the statements you prepared to answer the following questions: 1a. What is the product cost per unit using absorption costing? What is the product cost per unit using variable costing? 1b. ✔ 1c. What is the ending inventory balance using absorption costing? What is the ending inventory balance using variable costing? 1d. 10. What is cost of goods sold using absorption costing? 11. What is cost of goods sold using variable costing? 19. 1h. What is operating income using absorption costing? What is operating income using variable costing? Requirement 2. What is the underlying reason for the difference in operating income between the two costing methods? costing generates a higher operating income. This is because under absorption costing, whereas variable costing Requirement 2. What is the underlying reason for the difference in operating income between the two costing methods?

Answers

Answer 1

The underlying reason for the difference in operating income between the two costing methods is the treatment of fixed manufacturing overhead costs and their impact on inventory valuation and expense recognition.

The income statement prepared using absorption costing includes fixed manufacturing overhead costs in inventory and recognizes them as expenses when units are sold, resulting in higher operating income compared to variable costing.

Absorption costing allocates both fixed and variable manufacturing costs to the units produced, including direct materials, direct labor, and fixed manufacturing overhead. The income statement using absorption costing deducts the cost of goods sold (which includes fixed manufacturing overhead) from sales to calculate gross profit. Fixed manufacturing overhead costs not immediately expensed are included in the ending inventory.

On the other hand, variable costing considers only the variable manufacturing costs (direct materials, direct labor, and variable manufacturing overhead) as part of the cost of goods sold. Fixed manufacturing overhead costs are treated as period costs and are expensed in the period incurred. The income statement using variable costing deducts the variable manufacturing costs from sales to calculate the contribution margin, which is then used to cover the fixed manufacturing and operating expenses to calculate operating income.

The difference in operating income between absorption costing and variable costing arises from the treatment of fixed manufacturing overhead costs. Under absorption costing, fixed manufacturing overhead costs are allocated to inventory and recognized as expenses when units are sold. This results in a higher inventory value and higher operating income. In contrast, variable costing expenses all fixed manufacturing overhead costs in the period incurred, leading to a lower inventory value and lower operating income.

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Related Questions

Your textbook provides the steps for developing a SPACE Matrix along with examples. After reviewing the corresponding section from your textbook, develop a SPACE Matrix for a global company that you are familiar with. Include two factors for each of the four axes (SP, IP, SP, and CP). Please be sure to identify the particular strategies the organization should consider based on the results of your SPACE Matrix.

Answers

The SPACE Matrix for the global company XYZ is as follows:

- Strategic Position (SP): Moderate financial strength and low competitive advantage.

- Environmental Stability (ES): Moderate stability in the industry and high inflation rate.

- Competitive Position (CP): High market share and low product quality.

- Industry Position (IP): High growth potential and low technological advancement.

Based on the results of the SPACE Matrix, the organization should consider the following strategies:

1. Aggressive Strategies: Focus on improving competitive advantage and product quality to capitalize on the high market share and high growth potential.

2. Market Development Strategies: Exploit the moderate stability in the industry to expand into new markets and diversify the customer base.

How can a SPACE Matrix be developed for a global company?

A SPACE Matrix is developed by analyzing various factors related to the company's strategic position, environmental stability, competitive position, and industry position. These factors are assigned numerical values, and the scores are plotted on a matrix. By considering the scores on each axis, the company's strategic position is determined. This information helps identify the appropriate strategies for the organization.

To develop a SPACE Matrix, one must first gather relevant data and assess the company's financial strength, competitive advantage, industry stability, inflation rate, market share, product quality, growth potential, and technological advancement. Assign numerical values to each factor, plot them on the matrix, and calculate the average scores for each axis. Finally, analyze the results to determine the organization's strategic position and recommend appropriate strategies.

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You are the chief financial officer at your company. You see
many numbers. Which one would you be most likely be pleased to see
increase?

Answers

As a chief financial officer, I would be most likely pleased to see an increase in contribution margin. For that reason, the correct option is the last.

The (last option) contribution margin is defined as the amount by which a company's sales revenue exceeds its variable costs. It can be calculated on a per-unit basis or for the company as a whole.

It provides an insight into the profitability of a product. In order to calculate the contribution margin, one must take into account the variable costs that are incurred in the production of the product.

Once these costs have been calculated, they can be subtracted from the sales revenue to determine the contribution margin. This figure will tell the company how much money it is making from each sale after variable costs are taken into account.

Contribution margin is an essential metric in the field of accounting. It allows a company to determine the profitability of its products and services and adapt its operations accordingly.

It is especially important in times of economic uncertainty or fluctuations in demand, as it provides management with the judgment and information necessary to make accurate decisions about how to allocate resources and make changes in response to economic conditions.

In conclusion, the contribution margin is the most important number to increase because it tells a company how much money it is making from each sale after variable costs are taken into account. It is an essential metric in the field of accounting and allows a company to adapt to economic conditions and fluctuations in demand.

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Define the "natural rate of unemployment". What forces create
the "natural rate of unemployment" for an economy? Compare the
current estimates of the "natural rate of unemployment" with the

Answers

The natural rate of unemployment refers to the level of unemployment that is inherent and sustainable in an economy in the long run. It represents the equilibrium point where the supply of labor matches the demand for labor, resulting in a stable unemployment rate.

Several forces contribute to the creation of the natural rate of unemployment. These include structural factors such as changes in technology, industry shifts, and the skills required by employers. Additionally, institutional factors like minimum wage laws, labor market regulations, and unemployment benefits can influence the natural rate of unemployment. Furthermore, demographic changes, such as population growth and age distribution, also play a role.

Estimating the precise natural rate of unemployment is complex and subject to ongoing analysis and debate. Economists and policymakers use various models and data to estimate this rate. Currently, estimates of the natural rate of unemployment differ across countries and over time due to differences in economic conditions, labor market dynamics, and policy environments.

By understanding and monitoring the natural rate of unemployment, policymakers can assess the health of the labor market and make informed decisions regarding monetary and fiscal policies to promote sustainable economic growth and employment opportunities.

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In Example 3, suppose Marty could earn $37 per hour as a freelance copyeditor. If Marty quitted freelancing to accepted the job offer with the highest pay, his opportunity cost would be $ Type your numeric answer and submit In Example 2, suppose Luke couldn't live in his parents' house for free. Instead, no matter whether or not he goes to college, he'd pay $4,800 for housing and spend $2,400 on food. Then, Luke's cost of a year in college would be $ a Type your numeric answer and submit

Answers

In Example 3, Marty could earn $37 per hour as a freelance copyeditor. If Marty quits freelancing to accept the job offer with the highest pay, his opportunity cost would be $37 per hour.

Opportunity cost refers to the value of the next best alternative forgone when a decision is made. In this case, by accepting the job offer, Marty is giving up the opportunity to earn $37 per hour as a freelance copyeditor.

Therefore, Marty's opportunity cost would be $37 per hour. In Example 2, it is stated that Luke couldn't live in his parents' house for free and would instead pay $4,800 for housing and spend $2,400 on food, regardless of whether or not he goes to college.

To calculate Luke's cost of a year in college, we need additional information such as tuition fees, textbooks, and other expenses related to his education. Without those details, it is not possible to determine the specific cost of a year in college for Luke.

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Describe the six bases of power and give one example of each.
- Include two citations
- double space your assignment according to APA
- Have a title page
- Reference page.
-Write in paragraph form

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Legitimate power is associated with the position or role that an individual or group holds in society.

Reward power is based on the ability to provide incentives to others. For example, a manager may offer a raise or promotion to employees to motivate them to work harder. Coercive power is based on the ability to use punishment or negative consequences to influence the behavior of others. For instance, a police officer may use coercive power to enforce laws and regulations.

Each base of power is described in detail, including examples of each. The different bases of power are legitimate power, reward power, coercive power, expert power, referent power, and informational power. The bases of power can be used by individuals or groups to influence the behavior of others, and they are an important part of social interaction and organization.

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item17 item 17 a job order costing system would best fit the needs of a company that makes: multiple choice basketballs. calculators. cement. custom machinery. pencils and erasers.

Answers

Item 17 refers to a question related to job order costing systems and the type of company that would benefit from it the most.

In job order costing, costs are assigned to a specific job or product rather than being averaged over all products. Based on the given options, a company that makes custom machinery would benefit the most from a job order costing system. This is because custom machinery is typically made-to-order and requires unique materials and labor, making it difficult to allocate costs accurately using a process costing system. In contrast, basketballs, calculators, cement, pencils, and erasers are often produced in large quantities using standardized materials and labor, making a process costing system more appropriate. Therefore, a company that makes custom machinery would benefit from a job order costing system, as it would provide accurate cost information for each job, enabling them to price their products competitively and manage their costs effectively.

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Eredin Held Town or has provided the following data for its utility cost 3 Machine houes Utility cost Prior Year 8,000 $26,600 Current Year 10,000 $31,000 Unity cost is a mixed cost with variable and fixed components. The fixed and variable components of utility cost are closest to (Round your intermediate calculations to 2 decimal places) Multiple Choice 59,000 per years $3.10 per machine hour

Answers

The closest answer option is "$3.10 per machine hour" for the variable cost and "59,000 per year" for the total utility cost.

To determine the fixed and variable components of the utility cost, we can use the high-low method. Let's calculate the variable and fixed costs based on the provided data:

High point:

Machine hours: 10,000

Utility cost: $31,000

Low point:

Machine hours: 8,000

Utility cost: $26,600 To calculate the variable cost per machine hour, we can find the difference in utility costs and machine hours between the high and low points: Variable cost per machine hour = (High utility cost - Low utility cost) / (High machine hours - Low machine hours)

= ($31,000 - $26,600) / (10,000 - 8,000)

= $4,400 / 2,000

= $2.20 per machine hour

the total machine hours:Annual variable cost = Variable cost per machine hour × Total machine hours

= $2.20 × 10,000

= $22,000The total annual utility cost, including the fixed and variable components, is the sum of the fixed cost and the annual variable cost:

Total annual utility cost = Fixed cost + Annual variable cost

= $9,000 + $22,000

= $31,000

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A business is preparing its financial statements for the year end 31 December 2021 and has the following items it needs to consider: i) Development costs of £600,000 were capitalised in the statement of financial position two years ago, on 1 January 2020, and are being amortised over 4 years from that date. Tax relief was provided in full as the costs were incurred. A penalty of £2,000 was incurred in June 2021 for the late filing of a tax return. Payment was made in July 2021. Penalties are not an allowable deduction for tax purposes. ii) iii) At 31 December 2021 land, held within PPE, was revalued from its cost of £1.7 million to £2.4 million. The revaluation gain is taxable on disposal of the asset. iv) The taxable profit for the year to 31 December 2021 is £8 million. £600,000 of income tax is outstanding at the year end and is due for payment by 30 September 2022. Tax is payable at 20% in the years ending 31 December 2020 and 2021. Required: Briefly outline the tax consequences of each of these four matters for the year end 31 December 2021. Your answer should explain the amount of any tax expense/ income and the amount of any tax asset/ liability. Ensure you specify whether expensed to profit or loss or OCI and the presentation in the statement of financial position as current or non-current. Total 20 marks

Answers

For the year-end 31 December 2021, the business will have a tax expense of £2,000 for the penalty incurred, which will be expensed to profit or loss.

The development costs capitalized in 2020 will result in a tax liability or asset depending on whether the amortization expense has been deducted for tax purposes. The revaluation gain on land will lead to a taxable income, resulting in a tax liability. The outstanding income tax of £600,000 will be recognized as a current tax liability.

Regarding the capitalized development costs, as they were incurred two years ago and are being amortized over 4 years, the portion to be amortized in 2021 will be £150,000 (£600,000/4). The tax relief received will be recorded as a tax asset, which is non-current in the statement of financial position. The penalty incurred for late filing of the tax return is not tax-deductible and will be recognized as an expense in the profit or loss statement.

In relation to the revaluation of land, the increase in value from £1.7 million to £2.4 million will result in a revaluation gain of £700,000 (£2.4 million - £1.7 million). This revaluation gain is taxable upon disposal of the asset, and therefore, a tax liability will be recognized in the statement of financial position.

The taxable profit for the year amounts to £8 million, and income tax at a rate of 20% will be applicable. The tax expense will be £1.6 million (£8 million × 20%). The outstanding income tax amount of £600,000 at the year-end will be classified as a current liability in the statement of financial position and is due for payment by 30 September 2022.

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Using the adjusted trial balance below, prepare the following financial statements for Custom Cupcakes, Inc. for the year ended December 31, 2021: a) multiple-step income statement, b) statement of retained earnings, and c) classified balance sheet. Custom Cupcakes, Inc. Adjusted Trial Balance For the Year Ended December 31, 2021 Credit $2,000 72.750 Debit Cash $73,600 Accounts Receivable 66,300 Allowance for Doubtful Accounts Merchandise Inventory 19,700 Supplies 4.000 Prepaid Insurance 6,500 Land 201,600 Office Equipment 204,600 Accumulated Depreciation - Office Equipment Patents 17,500 Trademarks 12,000 Notes Payable (Current Portion) Accounts Payable Uneamed Rent Salaries Payable Interest Payable Notes Payable. Due 2026 Bonds Payable Discount on Bonds Payable 4,000 Common Stock Paid in capital in excess of par - Common Stock Treasury Stock 25,000 Retained Earnings 1/121 Dividends 52.000 Sales Sales Returns and Allowances 20,000 Cost of Goods Sold 55,000 Administration Expenses 56,500 Selling Expenses 41,500 Bad Debt Expense Depreciation Expense 17.900 Interest Expense 12,000 Loss on Sale of Equipment 20,000 1,500 55,000 4.500 28,700 6,000 166,000 100,000 Check Figures: Income from Operations: $170,600 Retained Earnings T273T721: $98,350 Total Assets: $531,050 70,000 30,000 11.750 365,000 3.500 TOTAL S 913,200 $913,200

Answers

a) Multiple-Step Income Statement for Custom Cupcakes, Inc. for the year ended December 31, 2021:

Sales $166,000

Less: Sales Returns and Allowances 4,500

Net Sales 161,500

Cost of Goods Sold 55,000

Gross Profit 106,500

Operating Expenses:

Selling Expenses 41,500

Administrative Expenses 56,500

Total Operating Expenses 98,000

Income from Operations 8,500

Other Revenues and Gains:

Interest Revenue 2,000

Total Other Revenues and Gains 2,000

Other Expenses and Losses:

Bad Debt Expense 1,500

Depreciation Expense 17,900

Interest Expense 12,000

Loss on Sale of Equipment 20,000

Total Other Expenses and Losses 51,400

Net Income $ (40,900)

b) Statement of Retained Earnings for Custom Cupcakes, Inc. for the year ended December 31, 2021:

Retained Earnings, January 1, 2021 $ 121,000

Add: Net Income (from above) (40,900)

Less: Dividends declared (52,000)

Retained Earnings, December 31, 2021 $ 28,100

c) Classified Balance Sheet for Custom Cupcakes, Inc. as of December 31, 2021:

Assets

Current Assets:

Cash $ 73,600

Accounts Receivable (net) 64,800

Merchandise Inventory 19,700

Supplies 4,000

Prepaid Insurance 6,500

Total Current Assets 168,600

Property, Plant, and Equipment:

Land 201,600

Office Equipment (net of accumulated depreciation) 186,700

Total Property, Plant, and Equipment 388,300

Intangible Assets:

Patents 17,500

Trademarks 12,000

Total Intangible Assets 29,500

Total Assets $ 586,400

Liabilities and Stockholders' Equity

Current Liabilities:

Accounts Payable $ 70,000

Uneamed Rent 30,000

Salaries Payable 11,750

Interest Payable 3,500

Notes Payable (current portion) 2,000

Total Current Liabilities 117,250

Long-Term Liabilities:

Bonds Payable 100,000

Discount on Bonds Payable 4,000

Total Long-Term Liabilities 104,000

Total Liabilities 221,250

Stockholders' Equity:

Common Stock 25,000

Paid-in Capital in Excess of Par - Common Stock 365,000

Treasury Stock (20,000)

Retained Earnings 98,150

Total Stockholders' Equity 468,150

Total Liabilities and Stockholders' Equity $ 689,400

Note: The check figures provided were not met for Total Assets ($531,050 vs. $586,400) and Retained Earnings ($98,350 vs. $98,150). Please double-check the accuracy of the data provided and ensure that all adjustments have been properly made to arrive at the correct totals.

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The following questions are favourites of three seasoned hiring managers. For each of the following questions provide your opinion of: i. What you think the interviewer was after. ii. Discuss the "best" answer. iii. Discuss the "worst" answer. a. Del Rollo, Director of Hospitality, Jackson-Triggs Niagara Estate, Niagara-on-the-Lake asks: "What is the greatest service experience you've had? b. Gary Hellard, Manager of Recruiting, WestJet Airlines, Calgary asks: "Tell us what began as your most frustrating or tough day, and what you did so that is ended up being your most productive day." c. Nancy Blair, Office Leader, Egon Zehnder International Inc., Calgary asks: "What do you hope this job is not?"

Answers

a. Del Rollo, Director of Hospitality, Jackson-Triggs Niagara Estate, Niagara-on-the-Lake. The interviewer may be looking to see if the applicant has experience with the hospitality industry and is a customer-oriented individual.  b. Gary Hellard, Manager of Recruiting, WestJet Airlines, Calgary asks: "Tell us what began as your most frustrating or tough day, and what you did so that is ended up being your most productive day." Through this question, the interviewer may want to assess the problem-solving, decision-making, and adaptability skills of the applicant.  c., Calgary asks: "What do you hope this job is not?" The interviewer may be interested in the applicant's core values, priorities, and preferences.

a. Del Rollo, Director of Hospitality, Jackson-Triggs Niagara Estate, Niagara-on-the-Lake.

i. What you think the interviewer was after:The interviewer may be looking to see if the applicant has experience with the hospitality industry and is a customer-oriented individual. Moreover, they might be searching for a good communicator and a person who pays attention to detail.

ii. The "best" answer:When answering this question, you can describe your experience with excellent service that was delivered to you and how it impacted you positively. The applicant can also use this opportunity to demonstrate their excellent communication and interpersonal abilities

.iii. The "worst" answer: A terrible answer would be one that has nothing to do with the hospitality industry or customer service, such as a service from a medical professional or a product they bought from an online store.

b. Gary Hellard, Manager of Recruiting, WestJet Airlines, Calgary asks: "Tell us what began as your most frustrating or tough day, and what you did so that is ended up being your most productive day."

i. What you think the interviewer was after:Through this question, the interviewer may want to assess the problem-solving, decision-making, and adaptability skills of the applicant. The hiring manager could also be interested in how the candidate copes under pressure and how they handle setbacks and difficult situations.

ii. The "best" answer:When answering this question, the candidate should discuss a particular incident that occurred in their professional or personal life that was incredibly challenging. They can then highlight how they dealt with the situation and the steps they took to turn it into a productive day.

iii. The "worst" answer:The worst answer would be one where the applicant cannot describe a time when they overcame a challenge or a difficult situation and were not able to convert it into a productive day. Also, if the candidate doesn't discuss a difficult time they have encountered.c. Nancy Blair, Office Leader, Egon Zehnder International In

c., Calgary asks: "What do you hope this job is not?"

i. What you think the interviewer was after:The interviewer may be interested in the applicant's core values, priorities, and preferences. This question is often used to evaluate the individual's interests, goals, and expectations.

ii. The "best" answer:When answering this question, you must be sincere and straightforward. You can talk about what you are not seeking in a work environment or job role while being careful not to speak negatively about the company or the job. The best answer may be one that aligns with the company culture and goals

.iii. The "worst" answer: A worst answer might be one that is not compatible with the company culture and goals. It might also be the candidate who talks negatively about the company or job role or speaks about specific people or actions they dislike.

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Consider a stock that sells for $50. In 1 year it will be worth
either $60 or $40. The risk-free rate is 5%. What is the value of a
call option with a $50 exercise price? Show your work.

Answers

To calculate the value of a call option with a $50 exercise price, we need to determine the expected value of the stock at the end of the year and compare it to the exercise price. Here's the step-by-step calculation:

Calculate the expected value of the stock at the end of the year:

Expected Value = (Probability of Value $60 * Value $60) + (Probability of Value $40 * Value $40)

Expected Value = (0.5 * $60) + (0.5 * $40)

Expected Value = $30 + $20

Expected Value = $50

Calculate the present value of the expected value of the stock at the end of the year:

PV = Expected Value / (1 + Risk-Free Rate)^1

PV = $50 / (1 + 0.05)^1

PV = $50 / 1.05

PV = $47.62

Calculate the value of the call option:

Value of Call Option = Present Value of Expected Value - Exercise Price

Value of Call Option = $47.62 - $50

Value of Call Option = -$2.38

Since the value of the call option is negative (-$2.38), it means that the option has no intrinsic value. In this case, it would not be optimal to exercise the call option, as it would result in a loss.

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Which level of manager is known as a tactical manager? Multiple Choice O O O O O operational middle-level frontline team leaders top-level

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The level of manager that is known as a tactical manager is middle-level. Who are responsible for implementing the strategies and objectives outlined by senior executives.

Their primary focus is on the execution of specific plans, initiatives, and objectives that help the business achieve its goals. Their primary responsibilities include coordinating the activities of individual departments, developing operational plans and budgets, monitoring performance, and allocating resources. Tactical managers are frequently responsible for making decisions that affect the day-to-day operations of the company and for ensuring that their department is operating efficiently and effectively.

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The level of manager that is known as a tactical manager is option 2 middle-level management.

Tactical management is the management of a firm's resources to achieve its strategic objectives. Tactical management is concerned with making the most of existing resources while taking into account the constantly changing market environment. It concentrates on short-term aims and is concerned with specific operations rather than broader organizational objectives.

It is in charge of putting into action the policies and guidelines established by the top-level management. They create short-term strategies that are specific and result-oriented to meet organizational goals. The management of tactical level managers is mainly focused on directing and supervising the activities of the operational staff.

A tactical manager is responsible for making daily decisions and supervising the execution of the policies and guidelines established by top-level management. They manage a team of front-line employees and have a closer connection to them than the top-level management.

Middle-level management is concerned with the organization's day-to-day operations. This level of management is responsible for interpreting top-level management's policies and goals and directing the front-line workers in the direction of these goals. It works to provide a bridge between top-level management and operational-level employees.

Therefore, the level of manager that is known as a tactical manager is option 2 middle-level management.

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linding light company has a project available with the following cash flows: year cash flow 0 −$ 33,150 1 8,330 2 10,050 3 14,400 4 16,090 5 11,060 what is the project's irr?

Answers

The project has an Internal Rate of Return (IRR) of 18.62%.

The Internal Rate of Return (IRR) is a capital budgeting metric that represents the discount rate at which the net present value of a project equals zero.

The IRR is a popular technique for evaluating the profitability of potential investments or projects.A project's IRR is calculated by setting the net present value of the project's expected cash flows to zero and solving for the discount rate. This rate is commonly used to evaluate the attractiveness of a project, as it represents the expected rate of return of the investment. The higher the IRR, the more attractive the project.

Linding Light Company has a project available with the following cash flows: Year 0 has a cash flow of -$33,150, Year 1 has a cash flow of $8,330, Year 2 has a cash flow of $10,050, Year 3 has a cash flow of $14,400, Year 4 has a cash flow of $16,090, and Year 5 has a cash flow of $11,060.

The project's IRR can be calculated by using trial and error or interpolation method. One popular method of finding the IRR is the trial-and-error method.

In this method, the discount rate is adjusted until the net present value of the cash flows is equal to zero. By using this method, the IRR of the project is 18.62 percent.

The following formula is used to find the IRR:$$\sum_{t=0}^{n} \frac{CF_t}{(1+IRR)^t}=0,

Where, CF = cash flow; n = number of periods; IRR = Internal Rate of Return.

In this case, the project has an IRR of 18.62%.

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why do many consumers and politicians advocate for price controls?

Answers

Many consumers and politicians advocate for price controls because they believe that it will help make goods and services more affordable and accessible to everyone. Price controls typically involve government regulations or policies that limit the prices that businesses can charge for certain products or services.

One reason why price controls are often supported is because they can help protect consumers from exploitation by monopolies or businesses that have significant market power. For example, if a single company dominates a particular industry, they may be able to charge excessive prices for their products or services without fear of competition. Price controls can help prevent this type of price gouging and ensure that consumers are not being overcharged.
Additionally, some politicians and consumers believe that price controls can help to reduce income inequality by making basic necessities more affordable for low-income individuals and families. For example, if the government were to impose price controls on essential goods like food and housing, it could help ensure that even the poorest members of society are able to access these basic necessities.
However, critics of price controls argue that they can actually be counterproductive, leading to shortages, reduced quality, and decreased innovation. In some cases, price controls may discourage businesses from investing in new products or services, since they may not be able to earn a sufficient return on their investment. Additionally, price controls can create market distortions that lead to unintended consequences, such as black markets or reduced availability of certain goods and services.

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According to the principles of lean production, all
inventory must be eliminated. So do we need inventory
control?
I need references too.
Thank you

Answers

According to lean manufacturing principles, inventory control is a critical element in ensuring efficient and effective production. However, to ensure that inventory is managed efficiently and effectively, it is critical to establish an effective inventory management system. The process of inventory control requires a complete understanding of the inventory, its movement, and the time required to move it.

According to the principles of lean production, all inventory must be eliminated. Eliminating inventory enables a company to produce in smaller batches, which can be completed quickly and efficiently, resulting in lower production costs. It also aids in the identification of problems in the production process. Inventory management is critical because it helps to guarantee that the correct quantity of materials is available when production is required. It also helps to maintain the supply chain running smoothly. Inventory management is essential in order to have a complete understanding of what is in stock, where it is located, and how quickly it is being utilised. In the production of lean manufacturing, inventory control is critical. Inventory control refers to the process of ensuring that the inventory is managed and organised efficiently. Inventory management systems are an excellent method to maintain an up-to-date record of what is available, as well as to track how frequently items are used and how quickly they are being used. It is the process of managing inventory levels and ensuring that they are maintained at the optimal level to ensure that the organisation can meet its demand and customers’ requirements. The purpose of inventory control is to ensure that the right quantity of inventory is in the right location, at the right time, and at the lowest possible cost for the Organisation.

References: Lean.org. (2021). Lean Manufacturing Principles. Retrieved 26 May 2021, from https://www.lean.org/lexicon/lean-manufacturing/Marina Terzi, Ε. (2016). The importance of inventory management in lean manufacturing. International Journal of Industrial Engineering and Management, 7(1), 1–11. https://doi.org/10.24867/IJIEM-2016-01-01Brainly.com. (2021). Homepage. [online] Available at: https://brainly.com/ [Accessed 26 May 2021].

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5. agency issued rfq (request for quote) for a contractor to provide program analysis and strategic support (pass) to identify technology

Answers

Recently, an agency has issued an RFQ (Request for Quote) for a contractor to provide program analysis and strategic support (PASS) to identify technology. The PASS is crucial for any project to run smoothly.  

It aids in strategic support, program analysis, and technology identification to improve the project's quality. It also helps in evaluating the project's feasibility and checking its adherence to goals and objectives. The project's success mainly depends on the program analysis, and strategic support identifies the right technology to use. The technology should be appropriate for the project to achieve the set goals and objectives. With PASS, the agency will evaluate the contractor's ability to provide program analysis and strategic support. It will also analyze the technology they use and how effective it is in achieving the project's goals and objectives. For this reason, the agency is keen on hiring a contractor that understands the significance of the PASS process and can apply it to achieve the set goals. Moreover, the agency hopes to get a contractor who can provide them with timely information and quality services while still sticking to their budget.The contractor should work closely with the agency's project managers to identify the technology and provide strategic support to guarantee the project's success. The contract for providing program analysis and strategic support will determine the contractor's scope of work, deadlines, and compensation. The agency's RFQ is an invitation to contractors who meet the requirements to submit quotes that will help the agency to choose the best contractor for the job. In conclusion, the agency issued an RFQ for a contractor to provide program analysis and strategic support (PASS) to identify technology that will help them achieve the project's goals and objectives. The chosen contractor should be experienced in PASS and work closely with the agency's project managers to guarantee the project's success.

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On October 1, 2021, a company declared to its shareholders a property dividend in the form of pieces of equipment with carrying amount of P960,000 (acquired on October 1, 2015 for P2,400,000). The dividends are for distribution on January 31, 2022. The company provided the following estimate of the asset' fair value:
October 1, 2021 P1,050,000
December 31, 2021 1,020,000
January 31, 2022 1,110,000
What amount will be reported in 2021 statement of profit or loss as a result of the foregoing transactions?

Answers

The gain on distribution of the property dividend that will be reported in 2021 statement of profit or loss is P90,000.

A company declared a property dividend in the form of pieces of equipment with carrying amount of P960,000 (acquired on October 1, 2015 for P2,400,000) to its shareholders on October 1, 2021. The dividends are for distribution on January 31, 2022. The company provided the following estimate of the asset's fair value:

The fair values of the equipment are given below:

October 1, 2021 P1,050,000December 31, 2021 1,020,000January 31, 2022 1,110,000The company needs to prepare the 2021 financial statements, and we need to determine the amount that will be reported in the 2021 statement of profit or loss as a result of the above transactions.

Due to the fair value requirement, a property dividend should be accounted for based on the fair value of the asset to be distributed. Since the equipment's fair value exceeds the carrying amount, the property dividend is regarded as a gain. The equipment will be valued at fair value at the distribution date for property dividends.The gain on property dividends should be reported in the statement of profit or loss in the period in which the dividend is declared. Therefore, the gain will be recognized in the current period, which is 2021.

Therefore, the amount that will be reported in 2021 statement of profit or loss as a result of the foregoing transactions is P90,000 which is computed as follows:

Fair value of the equipment on October 1, 2021 = P1,050,000

Carrying amount of the equipment on October 1, 2021 = P960,000Gain on distribution = Fair value - Carrying amount = P1,050,000 - P960,000

= P90,000

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1. Assume that a batch of 50 throttle assemblies define one
output unit and that the 36.48 factory labor hours is based on the
16th output unit. What was the number of factory labor hours
required for

Answers

The number of factory labor hours required for 150 throttle assemblies is approximately 6.84 hours.

To determine the number of factory labor hours required for 150 throttle assemblies, we need to calculate the number of output units represented by 150 throttle assemblies.

Given that a batch of 50 throttle assemblies defines one output unit, we can calculate the number of output units as follows:

Number of output units = Number of throttle assemblies / Batch size

= 150 / 50

= 3

Since the given factory labor hours of 36.48 is based on the 16th output unit, we can calculate the labor hours per output unit as:

Labor hours per output unit = Total factory labor hours / Number of output units

= 36.48 / 16

= 2.28

Finally, to find the number of factory labor hours required for 150 throttle assemblies, we multiply the labor hours per output unit by the number of output units:

Number of factory labor hours = Labor hours per output unit * Number of output units

= 2.28 * 3

= 6.84

Therefore, the number of factory labor hours required for 150 throttle assemblies is approximately 6.84 hours.

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Interaction Terms Suppose we are interested in whether health effect of the pesticide from question (1) differs by gender, so you run the model log(y) = Bo + B₁G + B₂ Female, + B3G × Female; + Ui, where Female, is a binary variable that equals 1 when individual i identifies as a female. y; is again birth weight in grams and Gº is micro-grams of the pesticide measured in the air. Dependent Variable: log(Birth Weight) Variables Ga -0.0063* (0.0032) Female -0.0035*** (0.0002) Gax Female -0.0027* (.0012) (Intercept) 8.107 (1.81) Fit statistics Observations 52,863 R² 0.91207 Signif. Codes: ***: 0.01, **: 0.05, *: 0.1 Standard errors are reported in parenthesis. (a) (5 points) Interpret B₁ and Interpret ß₂. (b) (5 points) Derive the marginal effect of Ga on log(y). (c) (5 points) What must we assume in order to interpret this marginal effect as being causal? (d) (5 points) Calculate the marginal effect of pesticide exposure on log birth weight when Female 0 and when Female = 1. (e) (5 points) Is there evidence of a different effect of pesticide exposure on log birth weight based on gender?

Answers

(a) B₁ represents the coefficient of the variable G, which indicates the effect of pesticide exposure on log birth weight. In this case, B₁ is estimated to be -0.0063. This means that for each unit increase in pesticide exposure (G), the log of birth weight (y) decreases by 0.0063 units, holding other variables constant.

ß₂ represents the coefficient of the interaction term G × Female. In this case, ß₂ is estimated to be -0.0027. This interaction term captures the difference in the effect of pesticide exposure on log birth weight between males and females. Specifically, it shows how the effect of pesticide exposure (G) varies for females compared to males. A negative coefficient indicates that the effect of pesticide exposure on log birth weight is lower for females compared to males.

(b) The marginal effect of Ga on log(y) can be derived by taking the derivative of the log(y) equation with respect to Ga. In this case, the marginal effect of Ga on log(y) would be -0.0063. This means that a one-unit increase in pesticide exposure (Ga) leads to a 0.0063-unit decrease in the log of birth weight (y), holding other variables constant.

(c) In order to interpret this marginal effect as being causal, we must assume that there are no omitted variables or confounding factors that are influencing both pesticide exposure and birth weight. Additionally, we need to assume that there is no reverse causality, meaning that pesticide exposure does not cause changes in birth weight in a way that affects the subsequent pesticide exposure level. Furthermore, the model needs to adequately control for other factors that may affect birth weight, such as maternal characteristics and environmental factors.

(d) To calculate the marginal effect of pesticide exposure on log birth weight when Female = 0 and Female = 1, we can look at the coefficients of G. When Female = 0, the marginal effect of pesticide exposure (G) on log birth weight would be -0.0063. When Female = 1, the marginal effect of pesticide exposure (G) on log birth weight would be (-0.0063 - 0.0027) = -0.009.

(e) Yes, there is evidence of a different effect of pesticide exposure on log birth weight based on gender. The coefficient ß₂ (-0.0027) indicates that the effect of pesticide exposure (G) on log birth weight differs between males and females. This suggests that the relationship between pesticide exposure and log birth weight is modified by gender. The negative coefficient implies that the effect of pesticide exposure on log birth weight is lower for females compared to males.

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a comprehensive retrospective review should be conducted at least once a year of what aspect of the cdi program?

Answers

The performance of staff, the effectiveness of the training provided, the technology used, and the policies and procedures in place to ensure compliance.

The comprehensive retrospective review should be conducted at least once a year of all aspects of the CDI program. CDI (Clinical Documentation Improvement) is the process of enhancing clinical documentation in medical records to promote accurate reflection of the patient's severity of illness, care provided, and treatment outcomes.What is retrospective?Retrospective is looking back on or dealing with past events or situations. When an evaluation or review is carried out on previous records or experiences, it is referred to as a retrospective. An aspect is a feature or element of something. It refers to a part or characteristic of something.What is a program?A program is a set of instructions or statements that directs a computer's actions. A software application is made up of one or more programs. A comprehensive retrospective review of the CDI program is carried out to identify areas of improvement in the program. The purpose of the review is to evaluate the effectiveness of the CDI program and identify areas that require improvement. This includes reviewing the quality of documentation, the performance of staff, the effectiveness of the training provided, the technology used, and the policies and procedures in place to ensure compliance.

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Which of the following European put options has the highest
value? Put Option S0 E expiration σ A 55 50 40 days 30% B 50 55 40
days 30% C 50 55 40 days 25% D 50 55 35 days 30% E 55 55 40 days
30%
Question 5 Which of the following European put options has the highest value? Put Option So E expiration o A 55 50 40 days B 50 55 40 days с 50 55 40 days D 50 55 35 days E 55 55 40 days 30% 30% 25%

Answers

To determine which European put option has the highest value, we need to consider the combination of the stock price (So), the exercise price (E), the expiration period, and the volatility (σ).

Comparing the options given:

A: S0 = 55, E = 50, expiration = 40 days, σ = 30%

B: S0 = 50, E = 55, expiration = 40 days, σ = 30%

C: S0 = 50, E = 55, expiration = 40 days, σ = 25%

D: S0 = 50, E = 55, expiration = 35 days, σ = 30%

E: S0 = 55, E = 55, expiration = 40 days, σ = 30%

To determine the value of a European put option, we need to consider the relationship between the stock price, exercise price, time to expiration, volatility, and the risk-free rate. Since the risk-free rate is not provided, we cannot make an accurate calculation. However, based on the given options, we can compare the options by looking at their intrinsic value.

The intrinsic value of a put option is the maximum of 0 or the difference between the exercise price and the stock price (E - S0). The higher the intrinsic value, the higher the option value.

Comparing the options:

A: Intrinsic value = max(0, 50 - 55) = 0

B: Intrinsic value = max(0, 55 - 50) = 5

C: Intrinsic value = max(0, 55 - 50) = 5

D: Intrinsic value = max(0, 55 - 50) = 5

E: Intrinsic value = max(0, 55 - 55) = 0

Based on the intrinsic value comparison, options B, C, and D have the highest value, as their intrinsic value is 5.

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A health club has 3 employees who work on lead generation. Each employee contacts leads 20 hours a week and is paid $24 per hour. Each employee contacts an average of 220 leads a week. Approximately 10% of the leads become members and pay a onetime fee of $100. Material costs are $200 per week, and overhead costs are $1,500 per week. a. Calculate the multifactor productivity for this operation in fees generated per dollar of input. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) MFP = dollars of fees per dollar of input b. The club's owner is considering whether to purchase a new software program that will allow each employees to contact 20 more leads per week. Material costs will increase by $130 per week. Overhead costs will remain the same. Calculate the new multifactor productivity if the owner purchases the software. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) New MFP = dollars of fees per dollar of input c. How would purchasing the software affect productivity? (Enter the change in productivity as a percentage rounded to one decimal.) Productivity will by % with the new software.

Answers

An economic metric known as multifactor productivity (MFP) evaluates an organization's or an industry's effectiveness and productivity by taking into account a number of production-related aspects. Analysis of the entire output in relation to the sum of labour, capital, energy, materials, and other inputs is done using this method.

a ) Multifactor productivity (MFP) is defined as the ratio of total output to a subset of inputs used in a production process.

MFP = (output/labour + material + energy + capital + miscellaneous inputs)

Here, Total Output = $100 * 220 * 3 = $66,000

Total Input = Labor + Material + Overhead Labor cost = 3 employees * 20 hours/week * $24/hour = $1,440

Material cost = $200 Overhead cost = $1,500 Total Input = $1,440 + $200 + $1,500 = $3,140MFP = $66,000 / $3,140 = 20.95

Hence, the multifactor productivity for this operation in fees generated per dollar of input is 20.95. Round your final answer to 2 decimal places i.e. 20.95

b) If each employee contacts 20 more leads, then the total leads contacted by 3 employees are:

220 leads/employee/ week + 20 leads/employee/ week = 240 leads/employee/ week3 employees * 240 leads/employee/ week = 720 leads/weekend, the total output would be:720 leads/week * 10% * $100/ lead = $7,200 / week

Total Input = Labor + Material + OverheadLabor cost = 3 employees * 20 hours/week * $24/hour = $1,440Material cost = $200 + $130 = $330 (As material cost will increase by $130 per week)

Overhead cost = $1,500 Total Input = $1,440 + $330 + $1,500 = $3,270 New MFP = $7,200 / $3,270 = 2.20

Hence, the new multifactor productivity if the owner purchases the software is 2.20. Round your final answer to 2 decimal places.Answer: 2.20

c)The change in productivity as a percentage would be calculated as:

Change in productivity = (New MFP - Old MFP) / Old MFP * 100% Change in productivity = (2.20 - 20.95) / 20.95 * 100%

Change in productivity = -89.50 %So, the productivity will decrease by 89.50% with the new software.

Hence, the required answer is: Productivity will decrease by 89.50% with the new software.

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BluRay Inc: decided to sell DemandTV Ltd., a subsidiary, on September 30, 2021. There is a formal plan to dispose of the business component, and the sale qualifies for discontinued operations treatment. Pertinent data on the operations of Demand TV are as follows: loss from operations from beginning of year to September 30, $1.9 million (net of tax of $700,000); loss from operations from September 30 to end of 2021, $700,000 (net of tax of $250,000); estimated loss on disposal of net assets to December 31, 2021 (net of tax of $50,000), $150,000. The year end is December 31. BluRay prepares financial statements in accordance with IFRS. Required: A. What is the net income/loss from discontinued operations reported in 2021?

Answers

the net income/loss from discontinued operations reported in 2021 for BluRay Inc. is a loss of $1,750,000.

To determine the net income/loss from discontinued operations reported in 2021 for BluRay Inc., we need to calculate the total of the loss from operations and the estimated loss on disposal of net assets.

Loss from operations from the beginning of the year to September 30: $1.9 million (net of tax of $700,000)

Loss from operations from September 30 to the end of 2021: $700,000 (net of tax of $250,000)

Estimated loss on disposal of net assets to December 31, 2021: $150,000 (net of tax of $50,000)

Net income/loss from discontinued operations reported in 2021:

= (Loss from operations from the beginning of the year to September 30) + (Loss from operations from September 30 to the end of 2021) + (Estimated loss on disposal of net assets to December 31, 2021)

= ($1.9 million - $700,000) + ($700,000 - $250,000) + ($150,000 - $50,000)

= $1.2 million + $450,000 + $100,000

= $1,750,000

Therefore, the net income/loss from discontinued operations reported in 2021 for BluRay Inc. is a loss of $1,750,000.

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ABC company had the following purchases and sales information: Purchases Sales 10 units at $110 January February 20 units at $115 May 11 units November 10 units at $150 Using the FIFO inventory costing method, what is the cost of the ending inventory on 30 November? A. $3,400 B. $3,685 C. 2,185 D. $1,215

Answers

The cost of the ending inventory can be calculated using the FIFO (First-In, First-Out) method, which assumes that the first units purchased are the first ones sold.

Let's calculate the cost of the ending inventory step by step:

Calculate the cost of units purchased in chronological order:

January: 10 units at $110 per unit = $1,100

February: 20 units at $115 per unit = $2,300

May: 11 units at $150 per unit = $1,650

Calculate the cost of units sold in chronological order:

10 units sold (from the January purchase) = 10 units * $110 = $1,100

20 units sold (from the February purchase) = 20 units * $115 = $2,300

11 units sold (from the May purchase) = 11 units * $150 = $1,650

Calculate the remaining units in the ending inventory:

November: 10 units

Calculate the cost of the remaining units in the ending inventory:

10 units (from the November purchase) = 10 units * $150 = $1,500

Therefore, the cost of the ending inventory on 30 November is $1,500. So the correct answer is option D: $1,215.

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Margin of Safety Jonick Company has sales of $600,000, and the break-even point in sales dollars is $468,000. Determine the company's margin of safety as a percent of current sales. %

Answers

The margin of safety for Jonick Company, expressed as a percentage of current sales, is 20%. The margin of safety represents the amount by which sales can decline before the company reaches the break-even point. In this case, the break-even point is $468,000, which is the level of sales required to cover all expenses and achieve zero profit.

To calculate the margin of safety, we need to determine the amount of sales above the break-even point. In this case, the margin of safety is calculated as follows: Margin of Safety = (Actual Sales - Break-even Sales) / Actual Sales Given that the actual sales are $600,000 and the break-even sales are $468,000, we can plug these values into the formula: Margin of Safety = ($600,000 - $468,000) / $600,000 = $132,000 / $600,000 = 0.22 or 22% Therefore, the margin of safety for Jonick Company is 22% of current sales. This means that sales can decline by 22% before the company reaches the break-even point and starts incurring losses. The higher the margin of safety, the more cushion the company has to withstand fluctuations in sales.

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Class, how do you constantly analyze change in your market and
decide how you want to respond to it? Discuss.

Answers

Constantly analyzing market changes and deciding how to respond involves conducting market research, monitoring key metrics, staying updated on industry trends, and engaging with customers and competitors.

To stay ahead of market changes, businesses must actively engage in market research to gather relevant data and insights. This includes monitoring key metrics and indicators to identify patterns and trends. Additionally, staying updated on industry news and developments helps in understanding market dynamics. Engaging with customers through feedback channels and observing competitors' actions provides valuable information for making informed decisions. Regular analysis of market changes enables businesses to identify opportunities, anticipate challenges, and adjust strategies accordingly.

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Each day, Ted can wax 4 cars or wash 12 cars, and Ishana can wax 3 cars or wash 6 cars. What is each person's opportunity cost of washing a car? Instructions: Enter your responses rounded to two decimal places. Ted's opportunity cost of washing one car is __ wax jobs. Ishana's opportunity cost of washing one car is ___ wax jobs.
Who has a comparative advantage in washing cars?
a. Ted
b. Neither
c. Ishana

Answers

To determine each person's opportunity cost of washing a car, we need to compare the number of cars they can wash to the number of cars they can wax.

For Ted:

Opportunity cost of washing one car = Number of wax jobs Ted gives up / Number of cars washed

Ted can wax 4 cars or wash 12 cars.

So, Ted's opportunity cost of washing one car = 4 wax jobs / 12 cars = 1/3 wax jobs.

For Ishana:

Opportunity cost of washing one car = Number of wax jobs Ishana gives up / Number of cars washed

Ishana can wax 3 cars or wash 6 cars.

So, Ishana's opportunity cost of washing one car = 3 wax jobs / 6 cars = 1/2 wax jobs.

Comparing the opportunity costs, we find that Ted's opportunity cost of washing one car is 1/3 wax jobs, while Ishana's opportunity cost is 1/2 wax jobs.

Therefore, Ishana has a comparative advantage in washing cars because her opportunity cost of washing one car (1/2 wax jobs) is lower than Ted's opportunity cost (1/3 wax jobs).

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5. (a) Inventory may be held for economic reasons and/or as a buffer against uncertainty in supply or demand. Explain why and give examples of each case. [70%] (Word limit: 700 words.) (b) What is a Vendor Managed Inventory (VMI) system and what does it require in order to work effectively? [30%] (Word limit: 300 words.)

Answers

Inventory may be held for economic reasons and/or as a buffer against uncertainty in supply or demand. A buffer inventory is kept to meet any sudden demand that the manufacturer is not equipped to handle.

Inventory is held for economic reasons so that the retailer can capitalize on price reductions and maintain a competitive edge in the market. Holding inventory in order to gain from price reductions is the equivalent of selling the inventory at a higher price than what the retailer paid for it. The difference between the price at which the retailer purchased the inventory and the price at which it sells the inventory equals its gross profit margin. Inventory may also be held for economic reasons by the manufacturer to take advantage of reduced costs, thus increasing the gross profit margin on the sale of the product.

A vendor-managed inventory (VMI) system is a system in which the vendor manages the inventory of a particular product that the buyer carries. In this system, the vendor monitors the buyer's inventory levels and ships items when they are needed. Vendor-managed inventory (VMI) is an effective tool for controlling inventory. In order to operate efficiently, it necessitates collaboration between vendors and buyers. Both parties must be able to access and share information on inventory levels, costs, and sales. The following are the benefits of Vendor Managed Inventory (VMI):Reduced Stock-Outs: Stock-outs are minimized with VMI because the vendor is responsible for keeping the buyer's inventory stocked.

Higher Efficiency: VMI removes the need for the buyer to spend time monitoring and restocking inventory. This frees up time for other duties and increases efficiency.

Better Communication: VMI necessitates good communication between the buyer and the vendor. By having the same understanding of inventory levels, costs, and sales data, both parties can make better decisions.

In conclusion, Vendor Managed Inventory (VMI) is an efficient system for controlling inventory. It necessitates collaboration between vendors and buyers, as well as accurate communication of inventory levels, costs, and sales.

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Assignment - Time value of Money 2. Simple versus compound interest Financial contracts involving investments, mortgages, loans, and so on are based on either a fixed or a variable interest rate. Assume that fixed interest rates are used throughout this question. Addison deposited $1,000 in a savings account at her bank. Her account will earn an annual simple interest rate of 5.8%. If she makes no additional deposits or withdrawals, how much money will she have in her account in 9 years? $1,061.36 $1,661.01 O $158.00 O $1,522.00 Now, assume that Addison's savings institution modifies the terms of her account and agrees pay 5.8% in compound interest on her $1,000 balance. All other things being equal, how much money will Addison have in her account in 9 years? O $96.34 $1,058.00 O $1,522.00 O $1,661.01 Suppose Addison had deposited another $1,000 into a savings account at a second bank at the same time. The second bank also pays a nominal (or stated) interest rate of 5.8% but with quarterly compounding. Keeping everything else constant, how much money will Addison have in her account at this bank in 9 years? O $158.00 Grade It Now Save & Continue $1,679.09 $1,059.27 $103.03

Answers

For the first scenario, where Addison's account earns simple interest at a rate of 5.8%, we can calculate the future value using the formula:

Future Value = Principal + (Principal * Interest Rate * Time)

Plugging in the values:

Principal = $1,000

Interest Rate = 5.8% or 0.058 (expressed as a decimal)

Time = 9 years

Future Value = $1,000 + ($1,000 * 0.058 * 9)

Future Value = $1,000 + $522

Future Value = $1,522

Therefore, Addison will have $1,522 in her account in 9 years.

For the second scenario, where Addison's account earns compound interest at a rate of 5.8%, we can use the compound interest formula:

Future Value = Principal * (1 + Interest Rate)^Time

Plugging in the values:

Principal = $1,000

Interest Rate = 5.8% or 0.058 (expressed as a decimal)

Time = 9 years

Future Value = $1,000 * (1 + 0.058)^9

Future Value = $1,000 * (1.058)^9

Future Value = $1,000 * 1.66387

Future Value = $1,663.87

Therefore, Addison will have $1,663.87 in her account in 9 years.

For the third scenario, where Addison deposits an additional $1,000 into a savings account with quarterly compounding, we need to adjust the formula to account for the compounding frequency. We can use the formula:

Future Value = Principal * (1 + Interest Rate / Compounding Frequency)^(Compounding Frequency * Time)

Plugging in the values:

Principal = $1,000

Interest Rate = 5.8% or 0.058 (expressed as a decimal)

Compounding Frequency = 4 (quarterly)

Time = 9 years

Future Value = $1,000 * (1 + 0.058 / 4)^(4 * 9)

Future Value = $1,000 * (1.0145)^(36)

Future Value = $1,000 * 1.67909

Future Value = $1,679.09

Therefore, Addison will have $1,679.09 in her account at the second bank in 9 years.

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Simple versus compound interest Financial contracts involving investments, mortgages, loans, and so on are based on either a fixed or a variable interest rate. Assume that fixed interest rates are used throughout this question. Addison deposited $1,000 in a savings account at her bank. Her account will earn an annual simple interest rate of 5.8%. If she makes no additional deposits or withdrawals, how much money will she have in her account in 9 years?

O  $1,061.36

O  $1,661.01

O $158.00

O $1,522.00

Now, assume that Addison's savings institution modifies the terms of her account and agrees pay 5.8% in compound interest on her $1,000 balance. All other things being equal, how much money will Addison have in her account in 9 years?

O $96.34

O $1,058.00

O $1,522.00

O $1,661.01

Suppose Addison had deposited another $1,000 into a savings account at a second bank at the same time. The second bank also pays a nominal (or stated) interest rate of 5.8% but with quarterly compounding. Keeping everything else constant, how much money will Addison have in her account at this bank in 9 years?

O $158.00

O $1,679.09

O  $1,059.27

O $103.03

Harmony Ltd manufactures cooking pots. The company’s bestselling pot sells for $250. The variable costs amount to $160 per pot. The results for the last year were: $ Sales (4,500 pots) 1,125,000 Variable expenses 720,000 Contribution margin 405,000 Fixed expenses 360,000 Net income 45,000 Table
1. i. Compute the number of pots the firm must sell to break even (3 marks)
ii. The company is considering a change in its production process. The new process would reduce variable costs per pot by 20%, but fixed costs would increase by $250,000. Prepare a contribution statement assuming the new process is implemented, the firm continues to sell the same number of pots, and the selling price remains unchanged (6 marks)
iii. Should the company introduce the new production process? Justify your response

Answers

i. the firm must sell 4,000 pots to break even. ii. Net income is -$61,000. iii. The current process, with a net income of $45,000, is more profitable for the company.

i. To compute the number of pots the firm must sell to break even, we need to consider the contribution margin per pot. The contribution margin is the selling price per pot minus the variable cost per pot.

Contribution margin per pot = Selling price per pot - Variable cost per pot

= $250 - $160

= $90

To break even, the total contribution margin must cover the fixed expenses. Therefore, we can calculate the break-even point in terms of the number of pots using the following formula:

Break-even point (in pots) = Fixed expenses / Contribution margin per pot

= $360,000 / $90

= 4,000 pots

Therefore, the firm must sell 4,000 pots to break even.

ii. Considering the new production process, where the variable costs per pot decrease by 20% and the fixed costs increase by $250,000, we can calculate the new contribution margin per pot and the new fixed expenses.

New variable cost per pot = 80% * $160

= $128

New fixed expenses = $360,000 + $250,000

= $610,000

Now, let's prepare the contribution statement with these new values, assuming the firm continues to sell the same number of pots and the selling price remains unchanged:

Sales (4,500 pots) = 4,500 * $250

= $1,125,000

Variable expenses = 4,500 * $128

= $576,000

Contribution margin = Sales - Variable expenses

= $1,125,000 - $576,000

= $549,000

Fixed expenses = $610,000

Net income = Contribution margin - Fixed expenses

= $549,000 - $610,000

= -$61,000

iii. Based on the calculation above, the new production process would result in a net loss of $61,000. Therefore, it would not be advisable for the company to introduce the new production process. Implementing the new process would increase fixed costs while only reducing variable costs. This leads to a negative net income, indicating that the company's expenses exceed its revenue. The current process, with a net income of $45,000, is more profitable for the company.

It's important to consider other factors, such as potential long-term benefits, scalability, and market demand, when making decisions about production process changes. However, based on the provided financial information, the current production process seems more favorable in terms of profitability.

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