Answer:
Variable cost per unit= $2.27 per machine hour
Explanation:
Giving the following information:
January 3,041 $4,032
February 3,456 $4,608
March 4,147 $6,912
April 5,184 $9,101
May 3,686 $5,760
June 5,322 $9,216
To calculate the unitary variable cost, we need to use the following formula:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (9,216 - 4,032) / (5,322 - 3,041)
Variable cost per unit= $2.27 per machine hour
can someone tell me how this "attain" amount is calculated PS3 price is 299$ PS3 sold are 11.25 Million per unit total cost is 260.89 $ profit is 38.11 $ Attain = 428.74 do u know how this 'attain' amount is calculated
Answer:
IDK which I need also
Explanation:
....................................................
Answer:
I'm in middle school, sorry mate.
Explanation:
Michael is unaware that it is very important for those from Japan to establish close personal relationships before talking about business. His violation of such ____, which concerns routine social conventions, is probably the main reason that he fails to have Norio sign the contract.
Answer:
Mores
Explanation:
Mores are the behaviors and customs that people have in a particular place and usually, they expect that you adhere to them when you are there and you would probably be judge based on that. According to this, the answer is that Michael's violations of such mores, which concerns routine social conventions, is probably the main reason that he fails to have Norio sign the contract because he didn't follow the custom people have in Japan to establish close personal relationships before talking about business and that affected his image because Michael's behavior was not acceptable for them.
At an output level of 6,000 units, you have calculated that the degree of operating leverage is 2.3. The operating cash flow is $12,000 in this case. a. Ignoring the effect of taxes, what are fixed costs
Answer: $15,600
Explanation:
The following information can be gotten from the question:
Output level = 6,000 units
Degree of operating leverage = 2.3
Operating cash flow = $12,000
Contribution margin = Degree of operating leverage × Operating cash flow
= 2.3 × $12,000
= $27,600
Fixed cost = contribution margin - Operating cash flow
= $27,600 - $12,000
= $15,600
The owner of a building supply company has requested a cash budget for June. After examining the records of the company, you find the following:
A. Cash balance on June 1 is $736.
B. Actual sales for April and May are as follows:
April May
Cash sales $10,000 $18,000
Credit sales 28,900 35,000
Total sales $38,900 $53,000
C. Credit sales are collected over a three-month period: 40% in the month of sale, 30% in the second month, and 20% in the third month. The sales collected in the third month are subject to a 2% late fee, which is paid by those customers in addition to what they owe. The remaining sales are uncollectible.
D. Inventory purchases average 64% of a month's total sales. Of those purchases, 20% are paid for in the month of purchase. The remaining 80% are paid for in the following month.
E. Salaries and wages total $11,750 per month, including a $4,500 salary paid to the owner.
F. Rent is $4,100 per month.
G. Taxes to be paid in June are $6,780.
The owner also tells you that he expects cash sales of $18,600 and credit sales of $54,000 for June. No minimum cash balance is required. The owner of the company doesn't have access to short-term loans.
Prepare a cash budget for June. Include supporting schedules for cash collections and cash payments. Round calculations and final answers to the nearest dollar.
Answer and Explanation:
The Preparation of the cash budget for June is prepared below:-
Cash Budget
For the month of June
Particulars Amount
Begining cash $736
Add:
Collections:
Cash sales $18,600
Credit sales
Current month $21,600 ($54,000 × 30%)
May credit $10,500 ($35,000 × 30%)
Credit sales of April $5,896 (explained in note 1)
Total cash available $57,332
Less: Disbursement
Purchase of inventory
Current month $9,293 (explained in note 2)
($46,464 × 20%)
Prior month $27,136 (explained in note 2)
($33,920 × 80%)
Salary $11,750 (explained in note 3)
Rent $4,100
Taxes $6,780
Need's total -$1,727
Excess for cash available
over needs
Note:-
1. Amount which is received in June is
= $28,900 × 20%
= $5,780
Late fees = $5,780 × 2%
= $116
June receipts is
= $5,780 + $116
= $5,896
2. Purchase of inventory is
= $53,000 × 64%
= $33,920
Total sales = Cash + Credit sales
= $72,600
Puchase of inventory = $72,600 × 64%
= $46,464
3. Entirely amount is taken of salaries and wages if it paid or not.
A jeans maker is designing a new line of jeans called Slims. The jeans will sell for $355 per pair and cost $262.70 per pair in variable costs to make. (Round your answers to 2 decimal places.)
Required:
a. Compute the contribution margin per pair.
b. Compute the contribution margin ratio.
Answer:
a.$92.30
b.27.55%
Explanation:
a. Computation for the contribution margin per pair
Sales 355.00 per pair
Less:Variable cost $262.70 per pair
Contribution margin $92.30 per pair
Therefore the Contribution margin per pair will be $92.30
b. Computation for the contribution margin ratio.
Using this formula
Contribution margin ratio=Contribution margin per unit/Selling price per unit
Where,
Contribution margin per unit =$92.30
Selling price per unit =$335.00
Let plug in the formula
Contribution margin ratio=$92.30/$335.00
Contribution margin ratio =27.55%
Therefore the Contribution margin ratio will be 27.55%
Corporation is expected to pay the following dividends over the next four years: $13, $9, $8, and $3.50. Afterward, the company pledges to maintain a constant 5 percent growth rate in dividends forever. If the required return on the stock is 12 percent, what is the current share price?
Answer:
Price of share $ 59.747
Explanation:
The Dividend Valuation Model(DVM) is a technique used to value the worth of an asset. According to this model, the value of an asset is the sum of the present values of the future cash flows would that arise from the asset discounted at the required rate of return.
This model would be applied as follows:
PV of dividend from Year 1 to Year 4
(13× 1.12^-1) + (9× 1.12^-2 ) + ( 8 ×1.12^-3 ) + (3.50 ×1.12^-3 )= 26.38
PV of dividend from year 5 and beyond
This will be done in two steps
PV in year 4 terms
PV = D× (1+g)/ke- g
D- 3.50, g- 5%, ke- 12%
PV = 3.50× 1.05/ (0.12- 0.05)
PV = 52.5
PV in year 0 terms
52.5 × 1.12^(-4)= 33.36469912
Total PV = 26.38 + 33.36 = 59.747
Price of share $ 59.747
On January 2, 2016, Alpha Corporation issued 5,000 shares of $2 par value common stock. The issue price was $7.50 per share. what is the general ledger journal entry for january 2nd
Answer:
Dr Cash 37,500
Cr Common Stock 10,000
Cr Common Stock 27,500
Explanation:
Preparation of the general ledger journal entry for january 2nd for Alpha Corporation
Since on January 2, 2016 we were told that Alpha Corporation was said to issued 5,000 shares of $2 par value of common stock in which the issue price was $7.50 per share this means we have to Debit Cash with $37,500, Credit Common stock with $10,000 and Credit Common stock with $27,500
1/2/16
Dr Cash 37,500
(5,000 shares × 7.50 per share)
Cr Common Stock 10,000
(5,000 shares ×$2)
Cr Common Stock 27,500
($37,500-$10,000)
Identify the advantages and disadvantages of each entry mode.
1. Tight control
2. Cost avoidance
3. Lower costs lost
4. Most costly method
5. Little future
6. Revenue
7. Lost economies
8. Access to local
9. Expertise
10. Profit from
11. Processes
12. Low capital
13. Requirement
14. Battles for control
a. Entry Mode
b. Exporting
c. Turnkey Project
d. Licensing
e. Joint Venture
f. Wholly-Owned
g. Subsidiary
Answer:
Exporting
Advantage
Cost avoidance
Disadvantage
Lower Costs Loss.
With Exporting, one can get into a country with lower costs because they will not have to set up. However they stand to have the disadvantage of losing lower costs.
Turnkey Project
Advantage
Profit from Processes
Disadvantage
Little Future Revenue
Turnkey projects involve building a facility for another company and then fully equipping it. When it is ready you hand it over. You stand to make profits from the process of building but because the facility is given to the purchaser, there is little chance for future revenue.
Licensing
Advantage
Low capital Requirement
Disadvantage
Lost Economies
With Licensing, one does not have to spend a lot to get into a country as other companies just use your license. You however stand the risk of losing your control in the country.
Joint Venture
Advantage
Access to Local Expertise
Disadvantage
Battles for Control
With Joint Venture, an International firm will have access to the expertise of its partners who are locals and know how things are done. However, because the locals know how things are done and are in their country, there might be battles between the partners about who should dominate.
Wholly-Owned Subsidiary
Advantage
Tight Control
Disadvantage
Most Costly Method
With a wholly-owned Subsidiary, an international company will have complete control over the affairs of the business and not have to battle for it with anyone. The drawback however is the cost it will take to set up. Large amounts will always have to be spent on starting a fresh company in a different country.
Loster Company reported a net loss of $17,017 for the year ended December 31. During the year, accounts receivable decreased by $7,476, inventory increased by $5,997, accounts payable increased by $15,357, and depreciation expense of $5,495 was recorded. What was the net cash used for or provided by operating activities during the year
Answer:
The answer is $5,314
Explanation:
Net loss ($17,017)
Add back:
Depreciation expense. $5,495
($11,522)
Changes in working capital:
Decrease accounts receivable $7,476
Increase Inventory. ($5,997)
Increase accounts payable. $15,357
Net cash provided by operating activities. $5,314
In Year 1 Cypress, who is married but filing separately, incurred a net capital loss in the amount of $25,000. Cypress also had the following net capital gains in Year 1:
ABC stock Short-term $7,000
DEF stock Short-term 2,000
GHI stock Short-term 5,000
JKL stock Long-term 4,000
MNO stock Long-term 3,000
Total $21,000
What amount, if any, of the Year 1 capital loss will Cypress carry over to Year 2 if the Year 1 deduction is maximized?
a. $4,000
b. $1000
c. $2.500
Answer:
c. $2.500
Explanation:
The maximum capital loss deduction per year for a married person filing separately or a single filer is $1,500 per year (if filing jointly the maximum deduction is $3,000).
net capital loss/gain = -$25,000 + $7,000 + $2,000 + $5,000 + $4,000 + $3,000 = -$4,000
-$4,000 loss + $1,500 capital gains deduction = -$2,500 carryover loss
Net credit sales = $400,000 Net income = $100,000 Average total assets = $80,000 Average accounts receivable = $20,000 What is the average collection period in days (rounded to the nearest whole day)?
Answer:
73 days
Explanation:
average collection period = number of days in a period / receivables turnover
receivables turnover = revenue / average receivables = $100,000 / $20,000 = 5
average collection period = 365 / 5 = 73 days
I hope my answer helps you
A jeans maker is designing a new line of jeans called Slims. The jeans will sell for $205 per pair and cost $164 per pair in variable costs to make.(1) Compute the contribution margin per pair.(2) Compute the contribution margin ratio.
Answer:
Results are below.
Explanation:
Giving the following information:
The jeans will sell for $205 per pair and cost $164 per pair in variable costs to make.
The contribution margin per unit is calculated using the selling price per unit and the unitary variable cost:
Unitary contribution margin= 205 - 164= $41
Now, to calculate the contribution margin ratio, we need to use the following formula:
contribution margin ratio= contribution margin/selling price
contribution margin ratio= 41/205
contribution margin ratio= 0.2
Brief Exercise 5-3 Flint Company buys merchandise on account from Windsor, Inc.. The selling price of the goods is $1,050, and the cost of the goods is $660. Both companies use perpetual inventory systems. Journalize the transaction on the books of both companies. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Answer:
Flint Company
DR Merchandise $1,050
CR Accounts Payable $1,050
(To record purchase of merchandise)
Windsor Inc.
DR Accounts Receivable $1,050
CR Sales $1,050
(To record sale of merchandise)
DR Cost of Goods Sold $660
CR Merchandise Inventory $660
(To record change in stock from sale of merchandise)
When longer-term employees' salaries are lower than those of workers entering the firm today, ______ has occurred.
Answer: Salary compression
Explanation:
Salary compression is a situation that occurs when there is a negligible differences in pay between the workers in an organization despite the experience and skills level.
It usually occurs when the pay of the current employees that are working with a company does not keep up with the rise in market pay rate thereby giving rise to a situation whereby new employees are employed at a identical pay or better pay to those that have been at the organization.
21. Find the present values of these ordinary annuities. Discounting occurs once a year. a. $400 per year for 10 years at 10%. b. $200 per year for 5 years at 5% c. $400 per year for 5 years at 0% d. Rework parts a-c assuming they are annuities due.
Answer:
a.
PV = $2457.826842 rounded off to $2457.83
b.
PV = $865.8953341 rounded off to $865.90
c.
PV = $400
d.
PV = $2703.609527 rounded off to $2703.61
PV = $909.1901008 rounded off to $909.19
PV = $400
Explanation:
An annuity is a series of cash flows that are constant, that occur after equal interval of time and that are for a defined period of time.
An ordinary annuity is the one whose cash flows occur at the end of the period. While an annuity due is the one whose cash flows occur at the start of the period. The formula for the present value of both the ordinary and the due annuity are attached.
a.
PV = 400 * [(1 - (1+0.1)^-10) / 0.1]
PV = $2457.826842 rounded off to $2457.83
b.
PV = 200 * [(1 - (1+0.05)^-5) / 0.05]
PV = $865.8953341 rounded off to $865.90
c.
PV = 400 * [(1 - (1+0.0)^-5) / 0.0]
PV = $400
d.
PV = 400 * [(1 - (1+0.1)^-10) / 0.1] * (1+0.1)
PV = $2703.609527 rounded off to $2703.61
PV = 200 * [(1 - (1+0.05)^-5) / 0.05] * (1+0.05)
PV = $909.1901008 rounded off to $909.19
PV = 400 * [(1 - (1+0.1)^-10) / 0.1]
PV = $400
Classifying Costs as Materials, Labor, or Factory Overhead Indicate whether the following costs of Procter & Gamble, a maker of consumer products, would be classified as direct materials cost, direct labor cost, or factory overhead cost: Cost Classification a. Plant manager salary for the Iowa City, Iowa, plant b. Maintenance supplies c. Salary of process engineers d. Wages paid to Packaging Department employees in the Bear River City, Utah, paper products plant e. Scents and fragrances used in making soaps and detergents f. Wages of production line employees at the Pineville, Louisiana, soap and detergent plant g. Depreciation on assembly line in the Mehoopany, Pennsylvania, paper products plant h. Packaging materials i. Resins for body wash products j. Depreciation on the Auburn, Maine, manufacturing plant
Answer:
a. factory overhead cost
b. factory overhead cost
c. factory overhead cost
d. direct labor cost
e. direct materials cost
f. direct labor cost
g. factory overhead cost
h. direct materials cost
i. direct materials cost
j. factory overhead cost
Explanation:
Direct Material Costs and Direct Labor Costs are easily traceable to the cost object whilst its difficult to trace Factory Overhead Costs to the cost object.
Companies increasingly strive to achieve the ______ performance when formulating their corporate strategy.
Answer:
triple bottom line
Explanation:
Companies increasingly strive to achieve the triple bottom line performance when formulating their corporate strategy. The triple bottom line (TBL) is a framework used in business that focuses on equally on social/environmental concerns as well as profits, thus creating three equal points of interest (bottom lines) which are profit, people, and the environment. This leads to a successful and balanced company.
Bonds owned by investors whose names and addresses are recorded by the issuing company, and for which interest payments are made with checks or cash transfers to the bondholders, are called:
Answer: Registered Bonds
Explanation:
A registered bond is one that has the owner's name and contact information recorded by the issuer so as to ensure that interest payments depending on the bond terms are rightly given out and also to track claims to coupons.The two ways bonds can be registered and transferred
1. Physically by printing owners details at the back of the certificate and BY signing or endorsing a certificate during transfer of bonds,
2. Electronically bY recording on a system database for ownership claim and for transfer of bonds.
The opposite of a Registered bond is a Bearer bond, Here, the owner"s details and information are not recorded.
What are the kinds of purchases for which you’ll "spare no expense"? What kinds of purchases do you want to buy spending as little as possible? What are the major differences between these two categories that drive your attitude regarding price?
Answer:
"Spare no Expense" Purchases
When purchasing long-term items (assets) which cannot be consumed within a short-term period, one tends to "spare no expense." These purchases are dictated by their quality and not price. For example, in constructing a building an individual or an entity does not consider the price as a deciding factor. Instead, the entity goes for the best quality at whatever price. In such a situation, it can be described as "sparing no expense" because it can spend as possible as is needed to ensure that the quality of the construction was of the highest standard. A wealthy man does not spare any expense to receive medical treatment. Vacationists spare no expense to go on vacation
These purchases or items come with high prices and they last longer than a year.
On the other hand, one does not want to spend much resources on goods that are not durable. So, the person involved tend to spend as little as possible. No one wants to buy expensive food items. But, the same person can pay for an exorbitant car. No one wants to expend much resources on inner wears, but the same person can spend thousand for the outer wears, to put up appearances.
Ostentatious goods that convey image attract higher prices much more than private goods that others co not care whether you use them or not. This accords with our human natural way of believing in appearances.
The major factors that differentiate between these two categories that drive our attitude regarding price include:
a) Scarcity, b) Longevity, c) Quality, d) Price, e) Durability, f) Ostentation
Explanation:
The expression "spare no expense" means to spend as much financial resources as needed in order to make something happen or bring about an outcome.
n preparing a company's statement of cash flows for the most recent year using the indirect method, the following information is available: Net income for the year was $52,000 Accounts payable decreased by 18,000 Accounts receivable increased by 25,000 Inventories increased by 5,000 Depreciation expense was 30,000 Net cash provided by operating activities was:
Answer:
$34,000
Explanation:
Calculation for the Net cash provided by operating activities
Net income 52,000
Adjustments :
Add Depreciation expense 30,000
Less Decrease in Accounts payable (18,000)
Less Increase in accounts receivables (25,000)
Less Increase in inventories (5,000)
Net cash provided by operating activities $34,000
Therefore Net cash provided by operating activities was: $34,000
Two partners, Small and Big, form a partnership in which Small invested $40,000 and Big invested $60,000 for a total capital of $100,000. But Small devotes more time to the business and earns more from the firm. They have agreed to share the profits as follows:
1. The first $20,000 is allocated on the partner's capital balances.
2. The next $30,000 is allocated based on service: Small gets $20,000, and Big gets $10,000.
3. Any remaining profits are allocated equally.
4. The partnership's net income is $100,000.
Requried:
a. What is Small's portion of the net income?
b. What is Big's portion of the net income? Make the entry for this allocation.
c. What would be the right parts to the journal entry for this question?
Answer:
a. What is Small's portion of the net income?
$53,000b. What is Big's portion of the net income? Make the entry for this allocation.
Big's portion = $47,000Dr Income Summary 47,000 Cr Big, capital 47,000c. What would be the right parts to the journal entry for this question?
Debit Income summary and credit capital accountsExplanation:
partnership's net income $100,000
first $20,000
Small $8,000Big $12,000next $30,000
Small $20,000Big $10,000Remaining $50,000
Small $25,000Big $25,000total Small = $53,000
total Big = $47,000
Teddy's Pillows had beginning net fixed assets of $471 and ending net fixed assets of $550. Assets valued at $319 were sold during the year. Depreciation was $42. What is the amount of net capital spending?
Answer:
Net Capital Spending = $121
Explanation:
The Net Capital Spending is the amount of money a company spends in the acquisition of fixed assets during the year. Mathematically, it is represented as:
Net Capital Spending = Ending net fixed asset - Beginning net fixed asset + depreciation
Net Capital Spending = 550 - 471 + 42 = $121
∴ Net Capital Spending = $121
Samantha owns 1,000 shares in Evita, Inc., an S corporation, that uses the calendar year. Her stock basis at the beginning of the tax year was $60,000. Evita's ordinary income for the year was $22,000 through the date of sale, and Samantha receives a distribution of $35,000 on May 3rd. Her stock basis at the end of the year is:
Answer:
$47,000
Explanation:
Stock basis at the time of sales = Stock basis at the beginning + Ordinary income for the part year - Distribution received
it is provided that opening Stock = $60,000
Ordinary income for the part-year = $22,000
Distribution amount received = $35000
Her stock basis at the end of the year is = $60,000 + $22,000 - $35,000
= $82,000 - $35,000
= $47,000
The jewelry department has an initial markup of 55.6%, with total retail reductions of 15%. There are no alteration costs or cash discounts. What is the maintained markup percentage and the gross margin percentage
Answer:
Maintained markup percentage = 48.9%
Gross margin percentage = 48.9%
Explanation:
Given:
Initial markup = 55.6%
Total retail reductions = 15%
To find the maintained markup percentage use the formula below:
%MMU = Initial MU% - Retail reductions% (100% - Initial MU%)
Substitute figures:
%MMU = 55.6% - 15% (100% - 55.6%)
= 55.6% - 15% (44.4%)
= 55.6% - 6.66%
= 48.9%
Therefore, the maintained markup percentage = 48.9%
To find the gross margin percentage, use the formula below:
GM% = (Net sales - Total cost of goods) /Net sales
We can also use this formula below to find the maintained markup percentage:
MMU% = (Net sales - Gross cost of goods) /Net sales
But we are told that there are no alteration costs or cash discounts here. Therefore the gross cost is the same as the total cost of goods.
This means that the mantained markup percentage and the gross margin percentage are equal.
GM% = 48.9%
Assume that the demand curve for MP3 players shifts to the right and the supply curve for MP3 players shift to the left, but the supply curve shifts more than the demand curve. As a result:________
a. both the equilibrium price and quantity of MP3 players will decrease.
b. the equilibrium price of MP3 players will decrease; the equilibrium quantity will increase.
c. the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will decrease.
d. the equilibrium price of MP3 players will increase; the equilibrium quantity will decrease.
Answer:
The correct answer is the option D: the equilibrium price of MP3 players will increase; the equilibrium quantity will decrease.
Explanation:
First of all, the supply and demand curves are the graphical representation of the price and the quantity demanded and supplied respectively in each case. Moreover, in the graphic when both curves are in equilibrim that means that there is a single point in where the price and the quantity are established together for the market. Furthermore, when there is a shift of any curve that point will be changed so when there is a shift in the demand curve to the right the price will increase and the quantity will increase but if there is a shift in the supply change to the left and that shift is greater then the price will increase but the quantity will decrease.
Mobile visual search (MVS) apps generate graphic images that are superimposed on pictures of real things (e.g., people, rooms, buildings, roads, and so on). For instance, a mobile phone user might point her phone camera at an office building and activate an app that generates the logos of all foodservice outlets (e.g., Starbucks, Subway, McDonalds) inside the building. True or False
Answer: False
Explanation:
Mobile Visual Apps were made.more along the lines of linking different content from a single picture. For instance, a single picture of a logo could link the user to the social media pages, products and other content belonging to the owner of the logo.
The product described in the text above is ' Augmented Reality '.
Another bank is also offering favorable terms, so Rahul decides to take a loan of $12,000 from this bank. He signs the loan contract at 5% compounded daily for 12 months. Based on a 365-day year, what is the total amount that Rahul owes the bank at the end of the loan's term
Answer:
$12,615.21
Explanation:
we need to determine the future value of the loan:
future value = present value x (1 + interest rate)ⁿ
present value = $12,000n = 365 days (compounded daily)interest rate = 5% / 365 days = 0.05/365 = 0.000136986future value = $12,000 x (1 + 0.000136986)³⁶⁵ = $12,000 x 1.051267496 = $12,615.21
On May 10, Monty Corp. issues 1,900 shares of $4 par value common stock for cash at $13 per share. Journalize the issuance of the stock. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Answer:
May 10, 2020, 1,900 shares issued at $13
Dr Cash 24,700
Cr Common stock 7,600
Cr Additional paid in capital 17,100
The common stock account increases using the pay value as reference. For example, if the common stock account = $200,000 and the par value of the stocks = $4, then we know that the company has 50,000 common stocks outstanding.
If investors pay any amount over the stocks' par value, that amount must be reported as additional paid in capital, in this case for common stock.
Consider the following scenario: The price of a gallon of gas at a SwellGas station in the center of a densely populated suburban area is $3.00 per gallon, but the price of a gallon of gas at the SwellGas station at a rest area right off the highway is $3.50 per gallon. Is this an example of price discrimination?
Answer: Yes, this is an example of Price discrimination.
Explanation:
The word price discrimination refers to the different prices of the same products at different locations.
This is good for the people purchasing it because the people of different areas have different demand and different usage.
Hence, the gas stations have different prices for different locations. The area that have lower demand has higher price and the areas that have more demand has lower price.
A bank has $10,000 in excess reserves and the required reserve ratio is 20 percent. This means the bank could have __________ in checkable deposit liabilities and __________ in total reserves.
Answer: $100,000; $30,000
Explanation:
The reserve rate is the amount of money that is made compulsory by the central bank of a country to the commercial banks to keep with them. It is a way of controlling the money in circulation.
A bank has $10,000 in excess reserves and the required reserve ratio is 20 percent. This means the bank could have $100,000 in checkable deposit liabilities and $30,000 in total reserves.
Since deposit is $100,000 and reserved rate is 20%, this will give an amount of: 20% × $100,000 = $20,000. Adding the $10,000 excess reserve will make $30,000 to which is the total reserve