Answer:
$59,400 favorable
Explanation:
The computation of the direct material quantity variance is shown below;
As we know that
Direct material quantity variance is
= Standard Price × (Standard Quantity - Actual Quantity)
= $9 × (16,400 pounds - 9,800 pounds)
= $9 × 6,600 pounds
= $59,400 favorable
The favorable variance indicates that the standard quantity is more than the actual quantity and the same is to be considered
Which of the following is a feature of an effective business email?
The message has a number of abbreviations in order to save the
writer time.
B. The subject line clearly states what the email is about.
C. The message has a joke in the last paragraph.
D. The subject line is in all capital letters.
The feature of an effective business email is that the subject line clearly states what the email is about. Thus, option (B) is correct.
What is Email?The term email stands for electronic mail, which is sent by using the digital mode of transactions. It is a computer based program associated with the exchange of the messages.
People may exchange e-mail messages relatively fast thanks to a global e-mail network. E-mail is the electronic version of a letter, but with time and flexibility advantages.
While sending mail to any person, the subject should be clearly stated as many of the people have not so much time to read the mail and can just read the subject and understand the mail.
Therefore, it can be concluded that The subject line of an excellent business email clearly communicates what the communication is about. Hence, option (B) is correct.
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Rational choices: A. are based on a comparison of total benefits and total costs. B. can only be made by those who are economists. C. are made based on expectations of the additional benefits and additional costs involved. D. measure benefits based on the past. E. are always motivated by concern for others.
Answer:
A) are based on a comparison of total benefits and total costs
At the end of 2018, we have a credit balance of $10,000 in allowance for doubtful accounts before the adjusting entry for bad debts expense. After analyzing the accounts in the accounts receivable using the aging of receivables method, the company's management estimates that uncollectible accounts will be $30,000. What will be the amount of bad debts expense reported on the income statement
Answer:
$20,000
Explanation:
From the question above
At the end of 2018, there was a credit balance of $10,000 in allowance for the doubtful accounts.
After proper screening of the account receivable through the use of a method known as 'aging of receivables method' the management of the company estimated that the uncollectible accounts will be $30,000
Therefore, the amount of bad debts expense recorded on the income statement can be calculated as follows
= $30,000-$10,000
= $20,000
Hence the amount of bad debts expense that was recorded on the income statement is $20,000
The following adjusting journal entry does not include an explanation. Select the best explanation for the entry. Supplies Expense 730 Supplies 730 ppppppp?Record purchase of supplies. Adjust supplies inventory to actual. Record sale of supplies. Reduce supplies expense.
Answer:
Adjust supplies inventory to actual.
Explanation:
The adjusting entry to record the adjust supplies inventory to actual is shown below:
Supplies expense $730
To Supplies $730
(Being the supplies inventory is adjusted)
For recording this we debited the supplies expense as it increased the expenses and credited the supplies as it decreased the assets
Therefore the second option is correct
Rachelle transfers property with a tax basis of $800 and a fair market value of $960 to a corporation in exchange for stock with a fair market value of $765 and $42 in cash in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $153 on the property transferred. What is the corporation's tax basis in the property received in the exchange
Answer:
$842
Explanation:
The computation of corporation's tax basis in the property received in the exchange is shown below:-
corporation's tax basis = Fair market value + Transaction
= $800 + $42
= $842
Therefore, The corporation's tax basis should be equivalent to the shareholder's tax basis as the property is transferred for $800 (a substituted basis) and add gain recognized of $42. And If the corporation sells the property for $960, the recognized gain would be $52.
Alpha and Beta are partners who share income in the ratio of 1:2 and have capital balances of $42,600 and $88,200, respectively, at the time they decide to terminate the partnership. After all noncash assets are sold and all liabilities are paid, there is a cash balance of $77,700. What amount of loss on realization should be allocated to Alpha
Answer:
The amount of loss to Alpha is $17700.
Explanation:
Given income sharing ratio = 1:2
The capital balance of Alpha = $42600
The capital balance of Beta = $88200
Total capital balance (Alpha + Beta) [tex]= $42600 + $88200 = $130800[/tex]
The cash balance available = $77700
Loss = 130800 – 77700 = $ 53100
The share of loss allocated to Alpha:
[tex]= 53100 \times \frac{1}{3} \\= $17700[/tex]
Therefore, the amount of loss to Alpha is $17700.
An uninterruptible power system used in a small production facility at Acme Manufacturing has a basis of $56,000 and is expected to have $5750 salvage value after 125,000 hours of use. Calculate the depreciation rate per hour of use and the book value after 77,000 hours of operation.
Answer:
The depreciation rate per hour is 0.402
The Book value is $25,046
Explanation:
In order to calculate the depreciation rate per hour of use we would have to calculate the following:
depreciation rate per hour=(basis- salvage value)/hours of use
depreciation rate per hour=($56,000-$5750)/125,000
depreciation rate per hour=0.402
To calculate the book value we would have to make the following calculation:
Book value=basis-(depreciation rate per hour*77,000 hours of operation)
Book value=$56,000-(0.402*77,000)
Book value=$25,046
A stock with a beta of 2.0 has an expected rate of return of 21%. If the market return this year turns out to be 8 percentage points below expectations, what is your best guess as to the rate of return on the stock
Answer:
The answer is 5%
Explanation:
Solution
Given that:
A stock with a beta =2.0
The expected rate of return =21%
Market return turnout = 8%
Now,
Rf = risk free return
Rp = risk premium =Rm -Rf
β = 2.0
Thus
The expected return R = Rf +β *Rp
= Rf +β * (Rm -Rf)
R = Rf +2.0 (Rm -Rf)
=Rf + 2 times risk premium
So,
The market turns by 8%
R = Rf +2.0 (Rm -8%-Rf)
=Rf + 2 Rm-16%-2Rf
Then
The expected return is reduced by 16%
Hence,
21% -16% =5%
Therefore the expected rate of return on the stock is 5%
Like many college students, Angie applied for and got a credit card that has an annual percentage rate (APR) of 18%. The first thing she did was buy a new HD Television for $300. At the end of the month, her credit card statement said she only needed to make a minimum monthly payment of $10. Assume Angie makes her payment when she sees her statement at the end of each month. If Angie doesn't charge anything else and only makes the minimum monthly payments, approximately how many months would it take her to completely pay off the HD Television
Answer:
during the first month, Angie will pay $4.50 in interests and $5.50 in principal
I prepared an amortization table using an excel spreadsheet to determine the number of years it takes to pay off the debt balance.
At the end of the 40th month, her balance will only be $1.53. So the 41st month should be the last month that she pays and her payment should only be $1.55 to payoff her debt completely.
Find the expected return for Jackson Corporation. Round to the nearset hundredth percent. Answer in the percent format. Do not include % sign in your answer (i.e. If your answer is 4.33%, type 4.33 without a % sign at the end.)
Question:
Jackson Corporation has expected return of 12% during recession, 20% during normal, and 40% during boom state of economy. Probability of recession, normal and boom states of economy is 0.25, 0.50, and 0.25 respectively. Find the expected return for Jackson Corporation. Round to the nearset hundredth percent. Answer in the percent format. Do not include % sign in your answer (i.e. If your answer is 4.33%, type 4.33 without a % sign at the end.)
Answer:
23.00
Explanation:
Given:
For Jackson Corporation:
Expected return during recession = 12%
Expected return during normal = 20%
Expected return during boom = 40%
For Economy:
Probability of recession = 0.25
Probability of normal = 0.50
Probability of boom = 0.25
Required:
Find the expected return for Jackson Corporation.
To find expected return, use the expression below:
Expected return = (Probability of Recession * Returns at Recession) + (Probability of Normal * Returns at Normal) + (Probability of Boom * Returns at Boom)
Using the expression above, expected return for Jackson corporation will be calculated as:
Expected return = (25×12%)+(0.50×20%)+(0.25×40%)
= 3 + 10 + 10
= 23%
Expected return for Jackson corporation is 23.00
You purchase one MMM July 129 call contract (equaling 100 shares) for a premium of $21. You hold the option until the expiration date, when MMM stock sells for $141 per share. You will realize a ______ on the investment.
Answer:
There is loss of $900 on investment.
Explanation:
The purchase of 1 MMM July 129 call contract at premium = $21
Since it is given that it is held unit the expiration date.
The selling price of MMM stock = $141 per share.
Total number of shares = 100
Total amount paid for share (purchase price) = 129 + 21 = $150
Loss or profit = Market price on expiration date- purchase price
=141-150
= - 9
Total loss = 9 × 100
=900 loss
A company purchased factory equipment on April 1, 2022 for $128,000. It is esti salvage value at the end of its 10-year useful life. Using the straight-line method depreciation expense at December 31, 2022 is:___________.
a. $9.600.
b. $11,200.
c. $8,400.
d. $12.800.
Answer:
Depreciation expense= $9,600
Explanation:
Giving the following information:
A company purchased factory equipment on April 1, 2022 for $128,000. 10-year useful life.
We weren't provided with the salvage value.
First, we need to calculate the annual depreciation:
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= 128,000/10= 12,800
Now, for 9 months:
Depreciation expense= (12,800/12)*9= $9,600
Kenzi kayaking a manufacturer of kayaks began operations this year. During this first year the company produced 1075 kayaks and sold 825 at a price of $1075 each. At this first year-end, the company reported the following income statement information using absorption costing.
Sales (825x $1,075) Cost of goods sold (825x $475) Gross margin Selling and administrative expenses Net income
$886,875 391,875 495,000 210,000 $285,000
Additional Information:
a. Product cost per kayak totals $500, which consists of $400 in variable cost production cost and $100 in fixed production cost- the latter amount is based on 107500 of fixed production cost allocated to the 1075 kayaks produced.
b. The $210,000 in selling and administrative expense consists of $75,000 that is variable and $135,000 that is fixed.
Required:
Prepare an income statement for the current year under variable costing.
Answer:
Income Statement for the Current Year under Variable Costing
Sales (825 × $1,075) $886,875
Less Cost of Sales
Opening Stock $0
Add Cost of Goods Manufactured ( 1075 × $400) $430,000
Less Closing Inventory (250 × $400) ($100,000) ($330,000)
Contribution $556,875
Less Expenses :
Fixed Manufacturing Overheads ($107,500)
Selling and administrative expense : Variable ($75,000)
Selling and administrative expense : Fixed ($135,000)
Net Income / (Loss) $239,375
Explanation:
Under variable costing, only variable costs of production are included in cost of goods sold. Both the Non - Production and Fixed Production Costs are treated as Period Cost Expensed during the year.
Nelly is creating an executive committee in a large corporation in order to decide how to open a new subsidiary. The committee has representation from the sales, information technology, general management, and warehouse departments. She feels unsure whether to include someone from the accounting department because she thinks that accountants focus only on taxes and do not have much management expertise. What would you suggest
Answer: Accountants do much more than taxes and often participate in executive committeesbecause of their financial perspective. This committee should include someone from the accounting or finance department.
Explanation:
The options to the question are:
a. Accountants usually do not work on strategy or planning, so the executive committee doesnot need a representative from the accounting department.
b. Accountants will not help the executive committee. The committee does not need arepresentative from the accounting department.
c. Accountants do much more than taxes and often participate in executive committees because of their financial perspective. This committee should include someone from the accounting or finance department.
From the question, we are informed that Nelly is creating an executive committee in a large corporation in order to decide how to open a new subsidiary and that she is unsure whether to include someone from the accounting department because she thinks that accountants focus only on taxes and do not have much management expertise.
I would suggest that she needs to include an accountant. Accountants do much more than just taxes. She needs someone from the finance or accounting department that will help in the communication, and processing of every financial details regarding the company or whatever they intend doing. For every executive committee, the role of accountants cannot be understated as they participate in executive committees due to their financial perspective on certain issues.
The aim of every organization is cost minimization and profit maximization and an accountant can help in achieving these aims.
Your aunt is about to retire, and she wants to sell some of her stock and buy an annuity that will provide her with income of $50,000 per year for 30 years, beginning a year from today. The going rate on such annuities is 7.25%. How much would it cost her to buy such an annuity today
Answer:
$605,183.13
Explanation:
For computing the cost her to buy an annuity today we need to find out the present value by applying the PV formula i.e shown in the attachment
Provided that,
Future value = $0
Rate of interest = 7.25%
NPER = 30 years
PMT = $50,000
The formula is shown below:
= -PV(Rate;NPER;PMT;FV;type)
So, after applying the above formula, the present value is $605,183.13
Problem 5-40 Loan Payments (LG5-9) You wish to buy a $10,800 dining room set. The furniture store offers you a 3-year loan with an APR of 10.8 percent. What are the monthly payments
Answer:
Required monthly payments = $352.556
Explanation:
Loan Amortization: A loan repayment method structured such that a series of equal periodic installments will be paid for certain number of periods to offset both the loan principal amount and the accrued interest.
The monthly installment is computed as follows:
Monthly installment= Loan amount/annuity factor
Loan amount; 10,800
Annuity factor = (1 - (1+r)^(-n))/r
r -monthly rate of interest, n- number of months
r- 10.8%/12 = 0.9 % = 0.009, n = 3 × 12 = 36
Annuity factor = ( 1- (1+0.009)^(-36))/0.009 =30.6334
Monthly installment = Loan amount /annuity factor
= 10,800/30.6334= 352.556
Required monthly payments = $352.556
The Kirkland Department of Delta Company began the month of December with beginning work in process of "4,000" units that are "100%" complete as to materials and "30%" complete as to conversion costs. Units transferred out are "10,000" units. Ending work in process contains "5,000" units that are "100%" complete as to materials and "60%" complete as to conversion costs.
InstructionsCompute the equivalent units of production for materials and conversion costs for the month of December.
Answer:
Instructions are below.
Explanation:
Giving the following information:
December with beginning work in process of 4,000 units that are 100% complete as to materials and 30% complete as to conversion costs. Units transferred out are "10,000" units.
Ending work in process contains 5,000 units that are 100% complete as to materials and "60%" complete as to conversion costs.
To calculate the equivalent units, we need to use the following structure:
Beginning work in process = beginning inventory* %incompleted
Units started and completed = units completed - beginning WIP
Ending work in process completed= Ending WIP* %completed
=Number of equivalent units
Direct material:
Beginning work in process = 0
Units started and completed = 10,000
Ending work in process completed= 5,000
= 15,000 units
Conversion costs:
Beginning work in process = 4,000*0.7= 2,800
Units started and completed = 10,000 - 2,800= 7,800
Ending work in process completed= 5,000*0.6= 3,000
= 13,600 units
The equivalent units of production for materials and conversion costs is 15,000 units and 13,600 units
Calculation of equivalent units:For Direct material:
Beginning work in process = 0
Units started and completed = 10,000
Ending work in process completed= 5,000
Equivalent units = 15,000 units
For Conversion costs:
Beginning work in process = 4,000*0.7= 2,800
Units started and completed = 10,000 - 2,800= 7,800
Ending work in process completed= 5,000*0.6= 3,000
Equivalent units = 13,600 units
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Consider two ways of commuting in a crowded city: taking public transportation, such as subway and buses, or driving your own car.
A person who chooses to take public transportation in a crowded city imposes a NEGATIVE OR POSITIVE externality on drivers. A policy implication of this result is a SUBSIDY FOR OR TAX ON those who take public transportation.
Persons who choose to drive their own cars to get around in a crowded city impose a NEGATIVE OR POSITIVE externality on other drivers. A policy implication of this result is a TAX ON OR SUBSIDY FOR those who drive their own cars.
Answer: positive; subsidy for; negative; tax on.
Explanation:
A positive externality occurs when the activities of an economic agent is of benefit to another third party that is not part of the activity or transaction while negative externality is the cost an individual bears due to the market activities of another individual or firm. It should be noted that the third parties didn't plan to incur the costs or benefits mentioned above.
Therefore, an individual who chooses to take public transportation in a crowded city imposes a positive externality on drivers. We are told that the city is overcrowded, therefore using public transportation means there will be lesser vehicles on the road and this will be beneficial to the drivers and there may be subsidy for those who take public transportation.
The people who choose to drive their own cars to get around in a crowded city impose a negative externality because there will be traffic congestion and health hazards and a tax can be imposed on them.
Eberley Corporation's cost formula for its manufacturing overhead is $25,700 per month plus $10 per machine-hour. For the month of July, the company planned for activity of 5,900 machine-hours, but the actual level of activity was 5,920 machine-hours. The actual manufacturing overhead for the month was $86,800. The manufacturing overhead in the planning budget for July would be closest to:
Answer:
$84,700
Explanation:
The computation of manufacturing overhead in the planning budget for July is shown below:-
Manufacturing overhead in the planning budget = Manufacturing overhead per month + Budgeted hours × Budgeted rate
= $25,700 + 5,900 × $10
= $25,700 + $59,000
= $84,700
Therefore for computing the manufacturing overhead in the planning budget for July we simply applied the above formula.
7. Identifying costs of inflation Bob manages a grocery store in a country experiencing a high rate of inflation. He is paid in cash twice per month. On payday, he immediately goes out and buys all the goods he will need over the next two weeks in order to prevent the money in his wallet from losing value. What he can't spend, he converts into a more stable foreign currency for a steep fee. This is an example of the of inflation.
Answer:
Shoe-leather Costs.
Explanation:
In this scenario, Bob manages a grocery store in a country experiencing a high rate of inflation. He is paid in cash twice per month. On payday, he immediately goes out and buys all the goods he will need over the next two weeks in order to prevent the money in his wallet from losing value.
What he can't spend, he converts into a more stable foreign currency for a steep fee. This is an example of the Shoes-leather costs of inflation.
A Shoe-leather costs refers to the costs of time, energy and effort people expend to mitigate the effect of high inflation on the depreciative purchasing power of money by frequently visiting depository financial institutions in order to minimize inflation tax they pay on holding cash.
Metaphorically, it ultimately implies that in order to protect the value of money or assets, some people wear out the sole of their shoes by going to financial institutions more frequently to make deposits.
Hence, Bob is practicing a shoe-leather cost of inflation so as to reduce the nominal interest rates.
A pollution haven is A. unattractive for multinational investment because of the ambient pollution. B. a location with weak environmental rules that attracts manufacturing companies due to decreased costs. C. a place that has very low worker wages. D. a place where people actually like pollution and view it as a positive externality.
Answer:
B. a location with weak environmental rules that attracts manufacturing companies due to decreased costs.
Explanation:
A pollution haven is when companies establish factories or offices abroad in countries in which they have lower costs and have access to all the resources they need. Also, these locations tend to be in developing nations in which the environmental standards tend to be lower than the ones in developed nations. According to this, the answer is that a pollution haven is a location with weak environmental rules that attracts manufacturing companies due to decreased costs.
The other options are not right because a pollution haven is attractive for multinational investment because of the lower cost and it is not related to ambient pollution. Also, a pollution haven has low wages but it is not the only thing that defines it and it is not a place where people like pollution.
Presented below is information related to Taylor Co. for the month of January 2014. Ending inventory per Insurance expense $ 12,680 perpetual records $ 23,490 Rent expense 20,260 Ending inventory actually Salaries and wages expense 57,100 on hand 22,930 Sales discounts 10,950 Cost of goods sold 227,250 Sales returns and allowances 15,390 Freight-out 7,640 Sales revenue 411,410(a) Prepare the necessary adjusting entry for inventory.(b) Prepare the necessary closing entries
Answer: The answer is given below
Explanation:
a. The necessary adjusting entry for inventory has been prepared and attached.It should be noted that the inventory was calculated as:
= $23,490 - $22,930
= $560
(b) The necessary closing entries has also been prepared and attached. During the calculation, it should be noted that the cost of goods sold was given as:
= 227250 + 560
= 227810
Check the attachment for the table.
A company had beginning inventory... A company had beginning inventory of 10 units at a cost of $20 each on March 1. On March 2, it purchased 10 units at $22 each. On March 6 it purchased 6 units at $25 each. On March 8, it sold 22 units for $54 each. Using the FIFO perpetual inventory method, what was the cost of the 22 units sold
Answer:
COGS= $470
Explanation:
Giving the following information:
Beginning inventory= 10 units for $20 each
On March 2, it purchased 10 units at $22 each.
On March 6 it purchased 6 units at $25 each.
On March 8, it sold 22 units for $54 each.
We need to determine the cost of goods sold for the 22 units under the FIFO (first-in, first-out) method. Using this method, we need to use the cost of the firsts units incorporated into inventory.
COGS= 10*20 + 10*22 + 2*25= $470
What guidelines will you develop for supervisors to successfully respond to employee questions about unionization? What can your supervisors say or do that is legally permissible in this situation?
The correct answer to this open question is the following.
The guidelines you will develop for supervisors to successfully respond to employee questions about unionization would be the following.
The first thing the supervisor can do is establish an open door policy to always listen to employees' concerns. This is of the utmost importance because one of the factors that impact employee's morale is the lack of communication and the sentiment of not being important for the organization.
An open line of communication from the very top of the hierarchy to the very bottom of the company is of so much help for the workers feel comfortable to express their opinions, and do not try to look for unions to be heard.
What the supervisors can say that is legally permissible in this situation is to inform workers that they have the right to express themselves and be heard, as well as freely join the union they feel most comfortable with, always inviting the worker to first directly address their issues within the company.
In addition to the positive welfare effects that free trade has on an economy, there are a variety of other benefits of international trade. Consider the following scenario: Without free trade, Sapphira has market power as a local producer. Once free trade is implemented in the local economy, Sapphira is no longer able to raise its prices above competitive levels. The previous scenario represents which of the following benefits of free trade?A. An enhanced flow of ideas B. Increased competition C. Lower costs through economies of scale D. Increased variety of goods
Answer:
B. Increased competition
Explanation:
Free trade is an economic policy where there are no restrictions to imports or export of goods and services.
Before the free trade, Sapphira had market power. She could set the price of her products. She would probably set her prices high enough to maximise profits.
Due to free trade which introduces more products to the market, sapphira is no longer able to set her prices as high as she used to. If her price is too high, consumers would not purchase her products.
This is an example of increased competition.
I hope my answer helps you
To advertise or not to advertise Suppose that Creamland and Dairy King are the only two firms that sell ice cream. The following payoff matrix shows the profit (in millions of dollars) each company will earn depending on whether or not it advertises:
Dairy King
Advertise Doesn't Advertise
Creamland Advertise 10,10 18, 2
Doesn't Advertise 2,18 11,11
For example, the upper right cell shows that if Creamland advertises and Dairy King doesn't advertise, Creamland will make a profit of $18 million, and Dairy King will make a profit of $2 million. Assume this is a simultaneous game and that Creamland and Dairy King are both profit-maximizing firms.
a. If Creamland decides to advertise, it will earn a profit of $ _______ million if Dairy King advertises and a profit of $_______ million if Dairy King not advertise.
b. If Creamland decides not to advertise, it will earn a profit of________ million if Dairy King advertises and a profit of______ $ million if Dairy King does not advertise.
Suppose that both firms start off not advertising. If the firms act independently, what strategies will they end up choosing?
a. Creamland will choose not to advertise and Dairy King will choose to advertise.
b. Both firms will choose not to advertise.
c. Both firms will choose to advertise.
d. Creamland will choose to advertise and Dairy King will choose not to advertise.
Answer:
a. 10, 18
b. 2, 11
c. Both firms will choose to advertise.
Explanation:
Interpreting the payoff matrix for all possible cases:
Both Advertise:
Dairy King profit = 10
Creamland profit = 10
Neither Advertise:
Dairy King profit = 11
Creamland profit = 11
Only Dairy King advertises:
Dairy King profit = 18
Creamland profit = 2
Only Creamland advertises:
Dairy King profit = 2
Creamland profit = 18.
Filling in the blanks:
a. If Creamland decides to advertise, it will earn a profit of $10 million if Dairy King advertises and a profit of $18 million if Dairy King not advertise.
b. If Creamland decides not to advertise, it will earn a profit of $2 million if Dairy King advertises and a profit of $11 million if Dairy King does not advertise.
For both firms, if they choose not to advertise and the other firm advertises, they will have a much lower profit than their competitors. Therefore, the dominant strategy for either firm is to advertise since it will at least keep them even with their competitor (if both advertise).
The answer is c. Both firms will choose to advertise.
George’s Car Repair Shop buys parts from a local parts distributor. The distributor delivers the parts promptly under terms stated on the invoice: 3/15 net 30. George has always paid the bill within 30 days and has never really worried about these invoice terms. Which of the following statements is true of this scenario?
a. George should not react to these payment terms because they area tactic used by many distributors to get customers to pay early, with little or no benefitto George.
b. These terms mean that the payment is due in 30 days, but that as long as he is not more than 15 days late, he can avoid the 3% late penalty. Thus, George could actually delay payment until the 45th day without incurring a penalty.
c. He is smart to wait until the 30th day before making payment because this gives him the use of cash for the maximum possible amount of time.
d. If possible, it is smart to pay the bill within 15 days after receipt because then he will receive a 3% discount. If he does a lot of business with this firm, this will result in a sizeable savings for George by year’s end.
Answer:
d. If possible, it is smart to pay the bill within 15 days after receipt because then he will receive a 3% discount. If he does a lot of business with this firm, this will result in a sizeable savings for George by year’s end.
Explanation:
In the given instance the supplier of parts to George uses invoice 3%/15 net 30. This means if payment for parts is made within 15 days George will get a discount of 3%, if not the total amount of the parts is to be repayed within 30 days.
The best option for George will be to reduce his repayment period from 30 days to 15 days or less.
This way he will get 3% discount on sales and if he does a lot of business with the spare parts dealer, he will save a large sum of money
Tom Company incurs overhead costs each year in its three main departments, setup ($70,000), machining ($34,000), and packing ($56,000). Information about the company's two products is as follows:
Product A1 Product B1 Total
Number of setups 7 33 40
Machining hours 2,800 2,200 5,000
Orders packed 280 220 500
Number of products manufactured 560 440 1,000
If machining hours are used as a base under traditional costing, how much overhead is assigned to Product A1?
Answer:
Allocated MOH= $89,600
Explanation:
Giving the following information:
Tom Company incurs overhead costs each year in its three main departments, setup ($70,000), machining ($34,000), and packing ($56,000).
Product A1 Product B1 Total
Number of setups 7 33 40
Machining hours 2,800 2,200 5,000
Orders packed 280 220 500
Number of products manufactured 560 440 1,000
Under the traditional costing system, the company applies overhead based on a single plantwide predetermined overhead rate.
First, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 160,000/ 5,000
Predetermined manufacturing overhead rate= $32 per machine hour
Now, we can apply overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 32*2,800= $89,600
QUESTION 12 For a strategic alliance, firms should seek partners that are: a. known for being opportunistic. b. radically different when it comes to strategic goals. c. willing to share costs and risks of new-product development. d. different in terms of vision and agendas. e. similar when it comes to capabilities.
Answer:
c. willing to share costs and risks of new-product development.
Explanation:
A strategic alliance is when two companies come together to carry out a project that benefits both companies while both companies still retain their independence.
If strategic alliance is carried out with a company that is opportunistic, the company might take advantage of the other company or take certain actions that would not benefit the other company.
strategic alliance has to be mutually beneficial to both companies, so, strategic goals and visions have to align.
Capabilities don't have to be the same for a strategic alliance.
I hope my answer helps you
Big Bad Wolf Masonry Co. agreed to build a brick home for Johnny Little Pig, the Third by November 1. Big Bad Wolf and Johnny Pig could not predict Pig's losses of Big Bad Wolf failed to complete the house on time. They estimated that Johnny Pig would lose $150 in storage and rental fees per day if the building was not completed on time. The contract contained a liquidated damage clause. The clause required Big Bad Wolf to pay liquidated damages of $150 per day if the work was completed late. Big Bad Wolf finished the home twelve days late. Johnny Pig actually lost $1,000 because of the breach. Is the liquidated damage amount stated in the contract between Big Bad Wolf Masonry and Johnny Pig a valid or invalid liquidated damage clause and why
Answer:
In this case, the liquidated damages are too high and can be considered a penalty instead. Unreasonable penalties, like this one, can be considered unenforceable since they are treated as coercive measures to force the contractor to finish early. Big Bad Wolf would probably have to pay only the actual loss suffered by Johnny Pig ($1,000), instead of the amount stated as liquidated damages ($1,800).