Answer: B) The price of a beignet is $2.00 in 2011.
C) Rina's wage is $14.00 per hour in 2011
Explanation:
A Nominal Value is an expression of a Variable in terms of it's monetary value in a various years.
When something is expressed by it's monetary value in a certain year therefore, this is the nominal value of the variable.
The price of a beignet in 2011 is therefore an example of a Nominal Value as it is the monetary value in 2011.
In the same vein, Rina's wage per hour in 2011 expressed in monetary terms of $14.00 is also a nominal value.
Equity securities in which the investor owns less than 20% ownership in the voting stock of the investee generally can be classified as ________ equity investments. A. no significant influence B. held-to-maturity C. significant influence D. controlling interest
Answer:
A. no significant influence
Explanation:
Equity securities are investment in stock that is held by an individual. It determines control over the company's operational activity.
When a person has less than 20% ownership of equity securities it is considered no significant influence and the holdings are classified as investment.
Significant influence is when an individual owns more than 20% of equity securities. They have voting rights and some control of operational decisions of the company.
Controlling influence bis when ownership is above 50%. The owner holds majority shares of the company
A company had average total assets of $932,000. Its gross sales were $1,097,000 and its net sales were $965,000. The company's total asset turnover equals:
Answer:
Total asset turnover is 1.035.
Explanation:
The total assets that the company had = $932000
Gross sales = $1097000
Net sales = $965000
The total asset turnover can be determined by dividing the net sales with average total assets. Here, the average total assets are $932000 and net sales is $965,000.
Total asset turnover = net sales / average total assets
= 965000 / 932000
=1.035
Band Box Entertainment (BBE) operates a large store in Atlanta, Georgia.
The store has both a movie (DVD) section and a music (CD) section.
BBE reports revenues for the movie section separately from the music section.
Required:
Classify the following Costs that are found in the Merchandising sector.
Cost Direct/ Indirect Variable / Fixed
A. Annual retainer paid to a video distributor
B. Cost of store manager's salary
C. Costs of DVDs purchased for sale to customers
D. Subscription to DVD Trends magazine
E. Leasing of computer software used for financial budgeting at the BBE store
F. Cost of popcorn provided free to all customers of the BBE store
G. Cost of cleaning the store every night after closing
H. Freight costs of DVDs purchased by BBE
Answer:
Direct Costs are those costs that are directly linked to the production of a good or service.
Indirect Costs are not directly related but help facilitate the production of a good.
Fixed Costs are constant throughout the production life of a good.
Variable Costs change per quantity of goods Produced.
A. Annual retainer paid to a video distributor.
DIRECT and FIXED cost.
Video distributors are directly related to the amount of DVDs that will be sold. The amount is also a constant one so it is Fixed.
B. Cost of store manager's salary.
INDIRECT and FIXED Cost.
The manager is not directly related to the buying or selling of DVDs and CDs but is a constant cost that does not change by production.
C. Costs of DVDs purchased for sale to customers.
VARIABLE and DIRECT cost.
The cost of DVDs sold will have a direct impact on the sale of said DVDs because it can determine their price. It also changes as DVD numbers change.
D. Subscription to DVD Trends magazine.
DIRECT and FIXED cost.
Subscriptions enable the store know what to get meaning it is directly related to the DVDs. It will also be a fixed amount that does not change as more DVDs are bought.
E. Leasing of computer software used for financial budgeting at the BBE store.
INDIRECT and FIXED costs.
The computer software is not directly related to the sale or procurement of the DVDs. It is also a fixed amount as it is a lease that will not change regardless of how many DVDs are bought or sold.
F. Cost of popcorn provided free to all customers of the BBE store.
INDIRECT and VARIABLE.
These costs are not directly related to the DVDs being sold. Also they change per customer that comes in so they are Variable as well.
G. Cost of cleaning the store every night after closing.
INDIRECT and FIXED.
Costs again are not directly related to the DVDs and CDs. They are however fixed as they do not change per units sold.
H. Freight costs of DVDs purchased by BBE.
DIRECT and VARIABLE.
Freight Costs to ship DVDs is a cost that can be directly associated with selling the DVDs because they determine how the DVDs will be delivered. They are variable because they depend on the number of DVDs sold.
Martin Distributors has the following transactions related to notes receivable during the last two months of the year.
Dec. 1 Loaned $16,000 cash to E. Kinder on a 1-year, 6% note.
16 Sold goods to J. Jones, receiving a $4,800, 60-day, 7% note.
31 Accrued interest revenue on all notes receivable.
Instructions:
Journalize the transactions for Trent Distributors.
Answer:
Dec. 1
Note Receivable : E. Kinder $16,000 (debit)
Cash $16,000 (credit)
Dec. 16
Note Receivable : J. Jones $4,800 (debit)
Sales $4,800 (credit)
Dec. 31
Note Receivable : E. Kinder $80 (debit)
Note Receivable : J. Jones $168 (debit)
Interest Income $248 (credit)
Explanation:
Interest accruing on E. Kinder`s Note Receivable = $16,000 × 6 % × 1/12 = $80.
Interest accruing on J. Jones`s Note Receivable = $4,800 × 7 % × 30/60= $168.
Use the following information for Meeker Corp. to determine the amount of equity to report. Cash $ 72,000 Buildings 126,500 Land 208,600 Liabilities 131,500 A. $22,600. B. $275,600. C. $407,100. D. $538,600. E. $285,600.
Answer:
$276,500
Explanation:
The computation of the total equity is shown below;
As we know that
Accounting equation is
Total assets = Total liabilities + total stockholder equity
where,
Total assets is
= Cash + land + buildings
= $72,000 + $208,600 + $126,500
= $407,100
And, the total liabilities is $131,500
So, the total stockholder equity is
= $407,100 - $131,500
= $276,500
We simply applied the above formula
Choose the most accurate statement: If these projects are mutually exclusive, which project should be chosen by the CEO of the firm if the CEO’s primary objective is to maximize shareholder value? Assume the opportunity cost of capital is 10% for both projects
Answer:
Project A is the better option than Project B.
Explanation:
The NPV of the project will decide which is the option with greater value to shareholders. As we can see that the NPV of Project A at 10% cost of capital is greater than the NPV of Project B at the same 10% cost of capital. So the best option here is Project A as is more in value than project B. Hence the CEO must select Project A.
Winkin contributes property with a value of $45,000 and Blinkin contributes property with a value of $90,000 to form Boat Corp in exchange for 25 and 50 shares of Boat, respectively. Which shareholder qualifies for Section 351 deferral of any gain or loss
Answer:
Winkin, with 25 shares of Boat Corporation, qualifies for Section 351 deferral of any gain or loss.
Explanation:
IRC Section 351 has this major requirement; it only applies to the exchange of property for voting stock in the corporation. If any shareholder involved in the transaction receives equity for something other than voting stock, e.g. services; the transaction may not qualify for tax deferral.
In its 2014 annual report, Campbell Soup Company reports beginning-of-the-year total assets of $8,113 million, end-of-the-year total assets of $8,323 million, total sales of $8,268 million, and net income of $807 million.
a. Compute Campbell?s asset turnover.
b. Compute Campbell?s profit margin on the sale.
c. Compute Campbell?s return on an asset using (1) asset turnover and profit margin and (2) net income.
Return on assets
(1) Assets turnover and profit margin _____%
(2) Net income _____%
Answer:
a. The asset turnover is $1.0061
b. The profit margin on the sale is 9.7605%
c. The return on an asset is 9.82%
Explanation:
a. In order to calculate the company asset turnover we would have to make the following calculation:
asset turnover=Turnover/Average operating assets
According to the given data:
Turnover=$8,268 million
Average operating assets=beginning-of-the-year total assets+nd-of-the-year total assets
Average operating assets=$8,113 million+$8,323 million
Average operating assets=$8,218 million
Therefore, asset turnover=$8,268 million/$8,218 million
asset turnover=$1.0061
b. In order to calculate the company profit margin on the sale we would have to make the following calculation:
profit margin on the sale=Net income*100/sales
Net income=$807 million
Therefore, profit margin on the sale=$807 million*100/$8,268 million
profit margin on the sale=9.7605%
c. In order to calculate the company return on an asset we would have to make the following calculation:
return on an asset=Assets turnover*Profit margin
return on an asset=$1.0061*9.7605%
return on an asset=9.82%
A retired married customer, age 73, has a portfolio that is invested in Blue Chip stocks and Treasury bonds that provides current income. The customer is concerned that he is paying a very high Federal and State combined income tax rate. An appropriate recommendation for this customer would be to diversify part of his portfolio into an investment in:
Answer:
The answer is Municipal bonds
Explanation:
Municipal bonds are securities(debt securities) issued by states, cities, counties etc. It is generally issued to fund capital project like construction of roads, schools etc.
Municipal bonds are generally valued for being exempt from federal, state or local taxes taxes. Hence, the reason why the customer should invest in this type of bond since the customer is being concerned about high tax that he has been paying.
Oral Roberts Dental Supplies has annual sales of $5,625,000. 80% are on credit. The firm has $475,000 in accounts receivable. Compute the value of the average collection period.
Answer:
The answer is 38 days
Explanation:
The average collection period is the number of days it takes a company to convert its credit sales to cash
Average collection period = (account receivables/average credit sales) x 360 days
Credit sales = 80% of $5,625,000
=0.8 x $5,625,000
=$4,500,000.
Average collection period is therefore,
($475,000/$4,500,000) x 360 days
=0.10555556 x 360days
=38 days
Quince Holman Corporation reports: Cash provided by operating activities $250,000 Cash used by investing activities 110,000 Cash provided by financing activities 140,000 Beginning cash balance 70,000 What is Holman's ending cash balance
Answer:
Holman's ending cash balance is $350,000.
Explanation:
The Ending Cash Balance can be obtained by Preparing a Cash Flow Statement as follows :
Quince Holman Corporation
Cash Flow Statement
Net Cash from Operating Activities $250,000
Net Cash from Investing Activities ($110,000)
Net Cash from Financing Activities $140,000
Movement during the Year $280,000
Cash and Cash Equivalents at the Beginning of the year $70,000
Cash and Cash Equivalents at the End of the year $350,000
Conclusion :
Holman's ending cash balance is $350,000.
Innovations are allowing consumers to utilize gesture, touch, and voice to control computers and other devices. This is an example of a(n) __________ force that could impact many industries.
Answer:
This question is incomplete, the options are missing. The options are the following:
a) Economic
b) Technological
c) Competitive
d) Regulatory
e) Social
And the correct answer is the option B: Technological.
Explanation:
To begin with, those kind of innovations like gesture, touch and voice commands that are focused in controlling the computers in a major amount of ways so therefore the use of the device will be easier for the users, are only trying to tend to the new ways of technology that will eventually in the future dominate in the industries and will cause an increase in the production of those companies that use that kind of technology because it only makes it easier to do the tasks and therefore that the technology force mentioned will only impact in a great way in many industries.
After the JPR Corporation paid its employees on May 15, 2019, and recorded the corporation’s share of payroll taxes for the payroll paid that date, the firm’s general ledger showed a balance of $1,730 in the Social Security Tax Payable account, a balance of $356 in the Medicare Tax Payable account, and a balance of $1,972 in the Employee Income Tax Payable account. On May 16, 2019, the business issued a check to deposit the taxes owed in the local bank. Record this transaction in a general journal form.
Answer:
Given that the firm's general ledger showed the following:
Balance in the Social Security Tax Payable account = $1,730
Balance in the Medicare Tax Payable account = $356
Balance in the Employee Income Tax Payable account = $1,972.
Record this transaction in a general journal form:
Date: May 16, 2019
Account title: Social Security Tax Payale. Dr. $1,730
Medicare Tax Payable. Dr. $356
Employee Income Tax Payable, Dr. $1,972
Bank/Cash(Total), Cr. $4,058
Bank A quotes a bid rate of $0.300 and an ask rate of $0.305 for the Malaysian ringgit (MYR). Bank B quotes a bid rate of $0.306 and an ask rate of $0.310 for the ringgit. What will be the profit for an investor that has $500,000 available to conduct locational arbitrage
Answer: $1639.3
Explanation:
From the question, we are informed that Bank A quotes a bid rate of $0.300 and an ask rate of $0.305 for the Malaysian ringgit (MYR) and that bank B quotes a bid rate of $0.306 and an ask rate of $0.310 for the ringgit.
The profit for an investor that has $500,000 available to conduct locational arbitrage goes thus:
Purchasing Malaysian ringgit (MYR) from bank A at the ask rate will be:
= $500,000/$0.305
= 1,639,344.3
Selling the Malaysian ringgit (MYR) at bank B based on the ask rate will be:
= 1,639,344.3 × 0.306
= $501,639.3
The profit for an investor that has $500,000 available to conduct locational arbitrage will be:
= $501,639.3 - $500,000
= $1639.3
Leaper Corporation uses an activity-based costing system with the following three activity cost pools:
Total Activity Activity Cost Pool machine- Fabrication 35,000 hours Order processing 300 orders Other Not applicable The Other activity cost pool is used to accumulate costs of idle capacity and organization-sustaining costs. The company has provided the following data concerning its costs: Wages and salaries Depreciation $420,000 170,000 190,000 Occupancy $780,000 Total The distribution of resource consumption across activity cost pools is given below:
Activity Cost Pools Order Processing Fabrication other Total Wages and salaries Depreciation 30% 25% 45% 100% 20% 50% 30% 100% 40% 35% 100% 25% Occupancy
The activity rate for the Order Processing activity cost pool is closest to:
The activity rate for the Order Processing activity cost pool is closest to:
a) $633 per order
b) $1,745 per order
c) $855 per order
d) $572 per order
Answer:
Order processing= $846.67 per order
Explanation:
Giving the following information:
Activity costs:
Wages and salaries= 420,000
Depreciation= $170,000
Occupancy= $190,000
Activity Cost Pools:
Order Processing:
Wages and salaries= 0.3
Depreciation= 0.25
Occupancy= 0.45
Order processing 300 orders
First, we need to calculate the total overhead cost for order processing:
Wages and salaries= 0.3*420,000= 126,000
Depreciation= 0.25*170,000= 42,500
Occupancy= 0.45*190,000= 85,500
Total= $254,000
Now, using the following formula, we can determine the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Order processing= 254,000/300= $846.67 per order
With a looming recession in front of him, department store owner Cooper Collins decided to make a gutsy move with his high-end Eastpointe stores. Rather than focus on the upscale, luxury market that the store attracted earlier in the decade, he focused on bringing in clothing with more mass appeal. The stores succeeded in turning around downward trending sales. In conjunction with your understanding of the product life cycle, which of the following statements summarizes the marketing strategy?A) Eastpointe recognized that it was not competing well with its traditional higher income market. It decided to change its product offering and price to appeal to a broader market and increase sales and profits.B) Eastpointe stores recognized several markets that it could reach with its upscale clothing lines.C) Eastpointe positioned itself against, rather than with, the competition. It decided to adhere to its price leadership position.D) Eastpointe knew that in order to re-invent itself, it was going to have to practice the same marketing strategy followed by Walmart and other discount stores. It would make all marketing decisions based on cost. The price on an item need only exceed what it cost to make and ship it. Falling prices became the norm.
Answer: A) Eastpointe recognized that it was not competing well with its traditional higher income market. It decided to change its product offering and price to appeal to a broader market and increase sales and profits
Explanation:
Based on the scenarios discussed in the question above can see that Eastpointe realized that it was not competing well with the traditional higher income market.
When goods reach maturity, the sales and the profits will begin to rise at first and then drop off. Based on this realization, Eastpointe decided to change its product offering and price as it is believed that doing this will help appeal to a broader market and also lead to the increase in sales and profits
___ are the criteria the firm uses to screen credit applicants in order to determine which of its customers should be offered credit and how much.
Answer:
Credit standards
Explanation:
The credit standard refers to the guidelines that are issued by the organization which analyzed whether the borrower is eligible for the loan or not. It could be checked by his or her credit score that reflects the full picture of borrower credit history i.e borrower is paying the amount of loan within in the given time or not or he is a defaulter that helps in deciding whether to offer credit or not and by how much
A fleet of refrigerated delivery trucks is acquired on January 5, 2017, at a cost of $900,000 with an estimated useful life of 10 years and an estimated salvage value of $81,000. Compute the depreciation expense for the first three years using the double-declining-balance method. (Round your answers to the nearest dollar.)
Answer:
depreciation expense 2017 = $180,000
depreciation expense 2018 = $144,000
depreciation expense 2019 = $115,200
Explanation:
purchase cost $900,000
estimated useful life 10 years
depreciation expense using double declining method = 2 x regular straight method depreciation rate x purchase cost
depreciation expense 2017 = 2 x 1/10 x $900,000 = $180,000
depreciation expense 2018 = 2 x 1/10 x $720,000 = $144,000
depreciation expense 2019 = 2 x 1/10 x $576,000 = $115,200
Nabors Company reported the following current assets and liabilities for December 31 for two recent years: Dec. 31, Current Year Dec. 31, Previous Year Cash $1,430 $1,710 Temporary investments 3,120 3,840 Accounts receivable 7,150 2,610 Inventory 2,340 2,300 Accounts payable 6,500 5,100 Required: a. Compute the quick ratio on December 31 of both years. If required, round your answers to one decimal place. Quick Ratio December 31, current year December 31, previous year b. Is the quick ratio improving or declining?
Answer:
a. Quick ratio for current year =2.16
Quick ratio for current year =2.05
b. Improving
Explanation:
A.
To find quick ratios we need to divide current assets by current liabilities
Quick Ratio = [tex]\frac{currentasssets}{currentliabilities}[/tex]
Current assets Dec 31 current year Dec 31 previous year
Cash $1,430 $1,710
Temporary investment $3,120 $3,840
Accounts receivable $7,150 $2,610
Inventory $2,340 $2,300
Total current assets $14,040 $10,460
Current liability
Account payable $6,500 $5,100
Quick Ratio [tex]\frac{14040}{6500 }[/tex] [tex]\frac{10460}{5100}[/tex]
Quick Ratio 2.16 2.05
B.
As you can see above that in the previous year Nabors company had a quick ratio of 2.05 but it has slightly increased by 0.11 in the current year.
Answer:
Quick Ratio for the current year = 3.78
Quick Ratio for the previous year = 1.6
Explanation:
Nabors Company
Dec. 31, Current Year Dec. 31, Previous Year
Cash $1,430 $1,710
Temporary investments 3,120 3,840
Accounts receivable 7,150 2,610
Inventory 2,340 2,300
Accounts payable 6,500 5,100
Quick Ratio = Cash + Cash Equivalents + Accounts Receivables/ Accounts Payables
Quick Ratio for the current year = $ 1430+ 3120 + 7150/ 6500
= 24570/6500= 3.78
Quick Ratio for the previous year = $ 1710+ 3840 + 2610/ 5100
= 8160/5100= 1.6
A quick ratio less than 1.0 means that the current liabilities exceed the quick assets. a rule of thumb the quick ratio must have a value greater than 1.0 to conclude that the company is unlikely to face near term liquidity problems. . A value less than 1.0 raises the liquidity concerns unless the a company can generate enough cash from inventory sales or if much of its liabilities are not due until late in the next period.
Similarly a value greater than 1.0 can hide a liquidity problem if payable are due shortly and receivables are not collected late until next period.
It is improving.
Aragon and Associates has found from past experience that 25% of its services are for cash. The remaining 75% are on credit. An aging schedule for accounts receivable reveals the following pattern:
Ten percent of fees on credit are collected in the month that service is rendered.
Sixty percent of fees on credit are collected in the month following service.
Twenty-six percent of fees on credit are collected in the second month following service.
Four percent of fees on credit are never collected.
Fees (on credit) that have not been paid until the second month following performance of the legal service are considered overdue and are subject to a 3% late charge.
Aragon has developed the following forecast of fees:
May $180,000
June 200,000
July 190,000
August 194,000
September 240,000
Required:
Prepare a schedule of cash receipts for August and September. If an amount box does not require an entry, leave it blank or enter "0". Round answers to the nearest dollar.
Answer:
schedule of cash receipts
May June July August September
$ $ $ $ $
Credit Fees (75%) 135,000 150,000 142,500 145,500 180,000
Cash Sales (25%) 45,000 40,000 47,500 48,500 60,000
Credit Receipt (10%) 13,500 15,000 14,250 14,550 18,000
Credit Receipt (60%) 0 81,000 90,000 85,500 87,300
Credit Receipt (26%) 0 0 35,100 39,000 37,050
Total Receipts 58,500 136,000 186,850 187,550 202,350
Explanation:
The schedule of cash receipts must include the cash sales and other amounts received for credit sales in the respective months and amounts as outlined by the question.
_____ illuminates exactly what activities are associated with serving a particular customer and how these activities are linked to revenues and the consumption of resources.
Answer:
Activity based costing
Explanation:
Activity based costing is defined as a method of costing that identifies the activities involved in production in an organisation, and assign cost of the activity to the product.
It provides an objective way of assigning cost. Activities that contribute more to the production of a product will have a higher cost assigned to that product.
Manufacturing companies more accurately assign overhead cost to products.
For example machine hours can be used as a cost driver in the production process. The higher the machine hours of a process the higher the cost of that process assigned to the product.
Prepare a bank reconciliation for Show Me, Inc., as of June 30 from the following information:
(a) The June 30 balance shown on the bank statement is $5,796.
(b) Outstanding checks at June 30 totaled $330.
(c) A deposit of $424 made on June 30 was not included in the balance shown on the bank statement.
(d) The bank statement contained an adjustment of $410 for a note receivable collected by the bank on behalf of Show Me, Inc. ($382 principal and $28 interest).
(e) A bank charge of $34 was made to the account during June. Although the company was expecting a charge, the amount was not known until the bank statement arrived.
(f) The bank erroneously charged a $340 check of Shirt, Inc., against the Show Me, Inc., bank account.
(g) The June 30 balance in the general ledger Cash account, before reconciliation, is $6,026.
(h) The bank statement included a notice that a customer's check for $172 that had been deposited on June 14 had been returned NSF.
Required:
(1) Prepare the bank reconciliation for Show Me, Inc., as of June 30.
(2) Prepare the appropriate adjusting entry(ies) or show the reconciling items in a horizontal model, for Show Me, Inc., related to the bank reconciliation.
Answer:
bank account reconciliation:
bank account balance $5,796
- outstanding checks $330
+ deposits in transit $424
+ error from Shirt, Inc., check $340
reconciled balance $6,230
cash account reconciliation:
cash account balance $6,026
+ note collected $410
- bank fee $34
- NSF check $172
reconciled balance $6,230
assets = liabilities + equity
cash acc. rec. notes rec. int. rec.
204 172 -382 -28 = 0 + -34
income statement
revenues - expenses = net income
0 - 34 = -34
All the adjustments are considered cash flows from operations.
Consider the following cash flows: Year Cash Flow 2 $ 22,200 3 40,200 5 58,200 Assume an interest rate of 9 percent per year. a. If today is Year 0, what is the future value of the cash flows five years from now?
Answer:
Total FV= $134,711.26
Explanation:
Giving the following information:
Cash Flow:
Cf2= $22,200
Cf3= $40,200
Cf5= $58,200
Interest rate= 9 percent per year.
To calculate the future value, we need to use the following formula on each cash flow:
FV= PV*(1+i)^n
Cf2= 22,200*(1.09^3)= 28,749.64
Cf3= 40,200*(1.09^2)= 47,761.62
Cf5= 58,200
Total FV= $134,711.26
A financial concept known as "face value" refers to a security's nominal or monetary value as indicated by its issuer. The Total Face Value is $134,711.26.
The given data is:
Cash Flow:
Cf2= $22,200
Cf3= $40,200
Cf5= $58,200
Interest rate= 9 percent per year.
The face value will be calculated as:
FV= PV*(1+i)^n
Cf2= 22,200*(1.09^3)= 28,749.64
Cf3= 40,200*(1.09^2)= 47,761.62
Cf5= 58,200
Total FV= $134,711.26.
The initial cost of the stock, as stated on the certificate, serves as the face value for stocks. In the case of bonds, it refers to the sum that is normally paid in $1,000 increments to the holder at maturity. Bond face values are frequently referred to as "par value" or just "par."
The term "face value" refers to the nominal or monetary worth of a security; the issuing party declares the face value. A stock's face value is its initial purchase price, as stated on its certificate; a bond's face value is the amount that must be paid to the bond's issuer.
Learn more about face value here:
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Suppose there are five sellers and five buyers in a rental market, each willing to buy or sell one rental unit, with values of {1000,900,800,700,600}. Assuming no transactions costs and a competitive market, what is the equilibrium price in this market
Answer: $800
Explanation;
The Equilibrium price is the price where the quantity sold by buyers equals the quantity sold by sellers.
Going by the following schedule that price would be $800 because at that point Sellers are willing to sell 3 units and Buyers are willing to buy 3 units.
Price Quantity Demanded Quantity Sold
1,000 1 5
900 2 4
800 3 3
700 4 2
600 5 1
The cost of an asset is $ 1 comma 050 comma 000, and its residual value is $ 130 comma 000. Estimated useful life of the asset is ten years. Calculate depreciation for the second year using the doubleminusdecliningminusbalance method of depreciation. (Do not round any intermediate calculations, and round your final answer to the nearest dollar.)
Answer:
$168,000
Explanation:
Depreciation expense using the double declining method = Depreciation factor x cost of the asset
Depreciation factor = 2 x (1/useful life)
Depreciation factor = 2 x (1/10) = 0.2
depreciation expense in year 1 = 0.2 x $1,050,000 =$210,000
book value at the beginning of year 2 = $1,050,000 - $210,000 = $840,000
depreciation expense in year 2 = 0.2 x $840,000 = $168,000
Using a payoff matrix to determine the equilibrium outcome Suppose there are only two firms that sell Blu-ray players: Movietonia and Videotech. The following payoff matrix shows the profit (in millions of dollars) each company will earn, depending on whether it sets a high or low price for its players.
Videotech Pricing
High Low
Movietonia Pricing High 11, 11 2, 15
Low 15, 2 8, 8
For example, the lower-left cell shows that if Movietonia prices low and Videotech prices high, Movietonia will earn a profit of $15 million and Videotech will earn a profit of $3 million. Assume this is a simultaneous game and that Movietonia and Videotech are both profit-maximizing firms.
1. If the firms do not collude, what strategies will they end up choosing?
2. The game between Movietonia and Videotech is an example of the prisoners' dilemma.
a. true
b. false
Answer:
pricing low
yes
Explanation:
Game theory looks at the interactions between participants in a competitive game and calculates the best choice for the player.
Dominant strategy is the best option for a player regardless of what the other player is playing.
Nash equilibrium is the best outcome for players where no player has an incentive to change their decisions.
if either firm charges high, they either earn 11 million or 2 million.
if either firm charges low, it would earn either 15 million or 8 million.
because the payoffs of charging low is higher than the payoffs of charging high, the best strategy is for the firms to charge low if there is no cooperation.
the game is a prisoners dilemma because the choice the firms make isn't the choice that will yield the highest payoffs. the choice that would yield the highest payoffs is to both charge high prices.
If government regulations force employers to provide dental insurance, then there is a movement up the:________.
1. AS curve as price level increased.
2. AS shifts right and price level would decrease.
3. AS shifts right and price level would increase.
4. AS shifts left and price level would decrease.
5. AS shifts left and price level would increase.
Answer:
The correct answer is the option 3: AS shifts right and price level would increase.
Explanation:
To begin with, the Aggregate Supply Curve is the total amount of goods and services that the suppliers are willing and able to offer at a certain price level given and at a certain period of time. If the costs of the sellers increases then that would mean that they would try to obtain more profits so that would implicate in an increase in the amount of quantity offered by them. So that means that the aggregate supply curve would shift to the right and the price level would increase as the sellers would try to earn more profits so that they could cover all the new costs given by the government.
Durban Metal Products, Ltd., of the Republic of South Africa makes specialty metal parts used in applications ranging from the cutting edges of bulldozer blades to replacement parts for Land Rovers. The company uses an activity-based costing system for internal decision-making purposes. The company has four activity cost pools as listed below:________.
Activity Cost Pool Activity Measure Activity Rate
Order size Number of direct labor-hours $ 16.85 per direct labor-hour
Customer orders Number of customer orders $ 320.00 per customer order
Product testing Number of testing hours $ 89.00 per testing hour
Selling Number of sales calls $ 1,090.00 per sales call
The managing director of the company would like information concerning the cost of a recently completed order for heavy-duty trailer axles. The order required 200 direct labor-hours, 4 hours of product testing, and 2 sales calls.Required:Prepare a report summarizing the overhead costs assigned to the order for heavy-duty trailer axles. What is the total overhead cost assigned to the order?
Answer:
Overhead Report for heavy-duty trailer axles.
Order size ($ 16.85 × 200) $3,370.00
Customer orders ($ 320.00 × 1) $320.00
Product testing ($ 89.00 × 4) $356.00
Selling ( $ 1,090.00 × 2) $2,180.00
Total $6,226.00
Conclusion :
The total overhead cost assigned to the order is $6,226.00
Explanation:
ABC system allocates overheads to jobs using cost drivers.
First an Activity Center where costs accumulate is identified these can be several in our scenario we have four Activity Centers.
Then the Cost driver rate is calculated for each Activity Center. Our question has provided these.
The final step is to allocate the overheads to a particular job using the cost driver rate.
Annual percentage rates (APRs) are computed using Group of answer choices None of the options are correct. best estimates of expected real costs. simple interest. either simple interest or compound interest. compound interest.
Answer: either simple interest or compound interest.
Explanation:
The annual percentage rate is the yearly interest rate that is charged to the borrowers and also paid to the investors. Annual percentage rate are computed using either simple interest or compound interest.
It should be noted that the annual percentage rate is expressed as a percentage and it represents actual annual cost of funds for a loan or an income that is earned on an investment.
Astro Co. sold 20,000 units of its only product and incurred a $50,000 loss (ignoring taxes) for the current year as shown here. During a planning session for year 2016’s activities, the production manager notes that variable costs can be reduced 50% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $200,000. The maximum output capacity of the company is 40,000 units per year.
ASTRO COMPANY
Contribution Margin Income Statement
For Year Ended December 31, 2015
Sales $ 1,000,000
Variable costs 800,000
Contribution margin 200,000
Fixed costs 250,000
Net loss $ (50,000 )
1. Compute the break-even point in dollar sales for year 2015.
2. Compute the predicted break-even point in dollar sales for year 2016 assuming the machine is installed and there is no change in the unit selling price.
3. Prepare a forecasted contribution margin income statement for 2016 that shows the expected results with the machine installed. Assume that the unit selling price and the number of units sold will not change, and no income taxes will be due.
4. Compute the sales level required in both dollars and units to earn $200,000 of target pre-tax income income in 2016 with the machine installed and no change in unit sales price.
Answer:
Required 1.
Break even point (dollar sales) = $750,000
Required 2.
Break even point (dollar sales) = $1,250,000
Required 3.
ASTRO COMPANY
Forecasted Contribution Margin Income Statement
For Year Ended December 31, 2016
Sales $ 1,000,000
Variable costs ($ 400,000 )
Contribution margin $ 600,000
Fixed costs ($ 450,000 )
Net loss $ 150,000
Required 4.
Sales to meet target profit (dollar sales) = $1,833,333
Sales to meet target profit (unit sales) = 73,334
Explanation:
Break even point is the level of activity where a Company neither makes a profit nor a loss.
Break even point (dollar sales) = Fixed Cost / Contribution Margin Ratio
Where,
Contribution Margin Ratio = Contribution / Sales
= $ 200,000 / $ 1,000,000
= 0.20
Therefore,
Break even point (dollar sales) = $250,000 / 0.20
= $1,250,000
Assuming the machine is installed
Contribution Margin Ratio = ($ 1,000,000 - $400,000) / $ 1,000,000
= $600,000 / $1,000,000
= 0.60
Therefore,
Break even point (dollar sales) = ($250,000 + $200,000) / 0.60
= $750,000
Sales to meet target profit of $200,000
Sales to meet target profit (dollar sales) = Fixed Cost + Target Profit / Contribution Margin Ratio
= ($450,000 + $200,000) / 0.60
= $1,833,333
Sales to meet target profit (unit sales) = $1,833,333 / $25
= 73,334