Answer:
Valley Pump Corporation
Balance Sheet
For the year ended December 31, 2018
Assets
Current assets: $281,000
Cash $35,000Accounts receivable (net) $71,000Inventories $101,000Available for sale securities $32,000Prepaid expenses $42,000Investments: $62,000
Investment in marketable securities $32,000Held for sale assets (land) $30,000Non-current assets: $432,000
Land $110,000 Buildings (net) $240,000 Equipment (net) $60,000 Copyright (net of amortization) $22,000TOTAL ASSETS $775,000
Liabilities
Current liabilities: $305,000
Accounts payable $75,000 Interest payable $20,000Deferred revenues $30,000 Notes payable $180,000Long term liabilities: $120,000
Notes payable $120,000Stockholders' equity: $350,000
Common stock $300,000 Retained earnings $50,000TOTAL LIABILITIES + STOCKHOLDERS' EQUITY $775,000
Calculate the forecasted cost at completion if the total budgeted cost is $15,000, the cumulative actual cost is $10,000, and the cumulative earned value is $12,000.
Answer:
$13,000
Explanation:
The total budgeted cost is $15,000
The cumulative actual cost is $10,000
The cumulative earned value is $12,000
Therefore, the forecasted cost at completion can be calculated as follows
= Cumulative actual cost + ( Budgeted cost-Cumulative earned value)
= $10,000 + ($15,000-$12,000)
= $10,000 + $3,000
= $13,000
Hence the forecasted cost at completion is $13,000
3. Explain how perception errors such as the Primacy effect has negative impact on job performance of an individual
Explanation:
The primacy effect entails an individual's perceived memory priority, and so may negatively impact an individual's job performance as he may bigin to recall details of only earlier job task over later ones, or may recall earlier company policies on a list over those mentioned last.
This tendency if found in an individual may reduce his job performance as most employers require their employees to pay close attention to details.
A monopolist has four distinct groups of customers. Group A has an elasticity of demand of 0.2, B has an elasticity of demand of 0.8, C has an elasticity of demand of 1.0, and D has an elasticity of demand of 2.0. The group paying the highest price for the product will be
Answer: Group A
Explanation:
Price Elasticity of demand refers to the sensitivity of quantity demanded given a change in price. In other words, how much will quantity demanded change if price changes. Higher elastcities mean that when prices change, their quantity demanded changes more. For instance, an elasticity of demand of 2 means that when prices rise by 2%, demand will decrease by 4%.
The group that will be paying the most therefore will have to be the group that is least sensitive to paying that high price. That would be Group A. As they are not very sensitive to price changes with an elasticity of 0.2, the Monopoly can increase their price to a higher point than others knowing that they won't demand less goods.
July 15 Declared a cash dividend payable to common stockholders of $163,000.
Aug. 15 Date of record is August 15 for the cash dividend declared on July 15.
Aug. 31 Paid the dividend declared on July 15.
Required:
Prepare journal entries to record the above transactions for Corporation.
Answer:
look up the anwser lol ....
Marshland Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: Cash dividends declared for the year $ 40,000 Cash dividends payable at the beginning of the year 17,000 Cash dividends payable at the end of the year 13,000 The amount of cash paid for dividends was: A. $36,000. B. $53,000. C. $40,000. D. $44,000. E. $57,000.
Answer: $44,000
Explanation:
The following information can be gotten from the question:
Cash dividends declared for the year = $40,000
Cash dividends payable at the beginning of the year = $17,000
Cash dividends payable at the end of the year = $13,000
Therefore, the amount of cash paid for dividends was:
= $40,000 + $17,000 - $13,000
= $57,000 - $13,000
= $44,000
Betty Harrington owns a floor covering firm. Her market research is telling her that she is taking business away from the large home improvement stores in her trade area. One thing that Betty is worried about is that the large stores might fight back by lowering their prices, which hurts everyone except the consumer. The day-to-day challenge of firm growth that this example is referring to is:
Answer:
price stability
Explanation:
In this scenario, the day-to-day challenge of firm growth that this example is referring to is price stability. Since the prices of the competing store are being changed (on purpose) Betty Harrington's firm will have a hard time adjusting in order to continue competing with the larger competing store, especially if the larger store lowers the price too much that Betty's store cannot actually lower theirs to that price. Thus ultimately forcing her out of the market.
If a country produces only two products, then by looking at the country's production possibilities curve (PPC), one can see that the opportunity cost of producing one of the products is the same as (equal to) the marginal cost of producing that product.
A. True
B. False
Answer:
A. True
Explanation:
Marginal cost is the cost of the good or service is the opportunity cost of producing one or one of the units of it. It's the cost of producing one r ore unit of good. Marginal cost includes the cost included the producing of every unit. Opportunity cost is the alternative cost incurred by not using the opportunity cost of the other product.An elderly investor has a short-term investment time horizon, is very concerned about loss of liquidity and is very risk averse. Your main concern when making a recommendation to this client is:
Answer:
Preservation of Capital
Explanation:
In a scenario such as the one described in the question, the main recommendation to the client should be Preservation of Capital. Meaning that the primary goal that the client should look towards is preventing any loss in a portfolio, this is usually done by investing in the safest short-term instruments, such as Treasury bills and certificates of deposit, and staying away from assets that have more risk and have the possibility of becoming a loss.
Johnson Trucking Company wants to determine a fuel surcharge to add to its customers' bills based on the number of miles driven to each area It wants to separate the fixed and variable portion of the truck's operating costs so it has a better idea of how distance affects these costs. Johnson Trucking Company has the following data available
Month Miles driven Total operating costs
January 16,200 22650
February 17000 23250
March 18400 25450
Apri 16500 22875
May 17400 23550
June 15300 21850
The variable cost per mile using the high-low method is:___________.
A. $1.16
B. $138
C. $1 66
D. $1.43
Answer:
Variable cost per unit= $1.16 per mile
Explanation:
Giving the following information:
January 16,200 $22,650
February 17000 $23,250
March 18400 $25,450
Apri 16500 $22,875
May 17400 $23,550
June 15300 $21,850
To calculate the variable cost per mile under the high-low method, 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= (25,450 - 21,850) / (18,400 - 15,300)
Variable cost per unit= $1.16 per mile
On April 29, Welllington Co. paid $1,760 to repair the transmission on one of its delivery vans. In addition, Welllington paid $52 to install a GPS system in its van.
Journalize the entries for the transmission and GPS system expenditures. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTSGarcia Associates Co.General Ledger
ASSETS
110 Cash
111 Petty Cash
112 Accounts Receivable
114 Interest Receivable
115 Notes Receivable
116 Merchandise Inventory
117 Supplies
119 Prepaid Insurance
120 Land
123 Delivery Van
124 Accumulated Depreciation-Delivery Van
125 Equipment
126 Accumulated Depreciation-Equipment
130 Mineral Rights
131 Accumulated Depletion
132 Goodwill
133 Patents
LIABILITIES
210 Accounts Payable
211 Salaries Payable
213 Sales Tax Payable
214 Interest Payable
215 Notes Payable
EQUITY
310 Owner, Capital
311 Owner, Drawing
312 Income Summary
REVENUE
410 Sales
610 Interest Revenue
620 Gain on Sale of Delivery Van
621 Gain on Sale of Equipment
EXPENSES
510 Cost of Merchandise Sold
520 Salaries Expense
521 Advertising Expense
522 Depreciation Expense-Delivery Van
523 Delivery Expense
524 Repairs and Maintenance Expense
529 Selling Expenses
531 Rent Expense
532 Depreciation Expense-Equipment
533 Depletion Expense
534 Amortization Expense-Patents
535 Insurance Expense
536 Supplies Expense
539 Miscellaneous Expense
710 Interest Expense
720 Loss on Sale of Delivery Van
721 Loss on Sale of Equipment
Answer:
April 29,
DR Accumulated Depreciation - Delivery Van $1,760
CR Cash $1,760
(To record repair of van)
April 29,
DR Delivery Van $52
CR Cash $52
(To record installation of GPS system in Van)
Explanation:
The transmission being faulty in the Van is part of the depreciation of the van and so when it is fixed, it reduces the depreciation of the van. The amount needs to be debited to the Accumulated Depreciation Account to signal that it is a reduction.
Installing a new GPS in a Van is an additional benefit to the van that will last for a period of more than a year hence it should be capitalised and added to the cost of the Delivery Van.
Suppose that you take $50 in currency out of your pocket and deposit it in your checking account. If the required reserve ratio is 8%, what is the largest amount (in dollars) by which the money supply can increase as a result of your action?
Answer:
The largest amount (in dollars) by which the money supply can increase as a result of the action is $625.
Explanation:
This is an example of money multiplier.
Money multiplier refers to the maximum amount of money that commercial bank can create or generate with each dollar of reserves.
Reserves or required reserves refer to the amount of money or portion of deposit that the central bank such as the Federal Reserve requires banks to hold and not lend.
In order to determine the largest amount (in dollars) by which the money supply can increase as a result of $50 deposit, money multiplier is used to multiply the $50 deposit.
The formula for the money multiplier is given as follows:
Money multiplier = 1/r
Where;
r = required reserve ratio = 8%, or 0.08.
Therefore, we have:
Money multiplier = 1 / 0.08 = 12.50
Largest amount of increase = Amount of deposit * Money multiplier = $50 * 12.50 = $625.
Therefore, the largest amount (in dollars) by which the money supply can increase as a result of the action is $625.
A proposed project has fixed costs of $47,000 per year. The operating cash flow at 11,000 units is $69,000. a. Ignoring the effect of taxes, what is the degree of operating leverage
Answer: 1.68
Explanation:
From the question, we are informed that a proposed project has fixed costs of $47,000 per year and that the operating cash flow at 11,000 units is $69,000.
Ignoring the effect of taxes, the degree of operating leverage will be:
= 1 + ($47,000/$69,000)
= 1 + 0.68
= 1.68
On November 1, Bahama Cruise Lines borrows $3.5 million and issues a six-month, 9% note payable. Interest is payable at maturity. Record the issuance of the note and the appropriate adjustment for interest expense at December 31, the end of the reporting period.
Answer:
Bahama Cruise Lines
Journal Entries:
November 1:
Debit Cash Account $3,500,000
Credit 9% Notes Payable $3,500,000
To record the issue of a six-month note payable.
December 31:
Debit Interest Expense $52,500
Credit Interest Payable $52,500
To record the interest expense for the period.
Explanation:
a) With Bahama Cruise Lines borrowing $3.5 million on November 1 and issuing a six month, 9% note payable, the accounting entries are a debit to the Cash account for the cash received and a credit to the Note Payable account to establish the liability in the accounts.
b) Bahama Cruise Lines will accrue interest on the Note Payable for 2 months for the ending in order to comply with the accrual concept and the matching principle of generally accepted accounting principle. The accrual basis for accounting for transactions requires that expenses are recognized when incurred and not when cash is paid. The amount of the interest for the year is calculated as $52,500 ($3.5 million * 9%)/12 * 2. This also accords with the matching principle which requires that expenses are matched to the revenues of the same period.
Cammie received 100 NQOs (each option provides a right to purchase 10 shares of MNL stock for $10 per share) at the time she started working for MNL Corporation (5/1/Y1) four years ago when MNL’s stock price was $8 per share. Now that MNL’s stock price is $40 per share (8/15/Y5), she intends to exercise all of her options. After acquiring the 1,000 MNL shares with her options, she held the shares for over one year (10/1/Y6) and sold them at $60 per share.
b. What are MNL Corporation’s tax savings on the grant date (5/1/Y1), exercise date (8/15/Y5), and sale date (10/1/Y6)?
Answer:
b. What are MNL Corporation’s tax savings on the grant date (5/1/Y1), exercise date (8/15/Y5), and sale date (10/1/Y6)?
MNL Corporation will have no tax effects on the grant date and (5/1/Y1) and the date that Cammie sold the stocks (10/1/Y6).
The only tax effect results from the exercise date (8/15/Y5). Tax savings = (total amount of stocks exercised x market price at the time) x marginal tax rate = (1,000 stocks x $40) x tax rate = $40,000 x tax rate
Since no marginal tax rate is given in the question, we can calculate it for different options:
if tax rate = 21%, then tax savings = $40,000 x 21% = $8,400if tax rate = 35%, then tax savings = $40,000 x 35% = $14,000If the marginal propensity to consume (mpc) is 0.9, the spending multiplier is _____, the tax multiplier is ______, and the balanced budget multiplier is _______, respectively.
Answer:
If the marginal propensity to consume (mpc) is 0.9, the spending multiplier is 10, the tax multiplier is -9, and the balanced budget multiplier is 1, respectively.
Explanation:
These can be calculated as follows:
a) Calculation of spending multiplier
To calculate this, we use the formula for calculating the spending multiplier as follows:
Spending multiplier = 1 / (1 - mpc)
Since mpc = 0.9, we have:
Spending multiplier = 1 / (1 - mpc) = 1 / (1 - 0.9) = 1 / 0.1 = 10
b) Calculation of tax multiplier
To calculate this, we use the formula for calculating the tax multiplier as follows:
Tax multiplier = -mpc / mps
Note that the tax multiplier as given above is negative because increase in tax by the government makes the multiplier to work in reverse since the money is leaving the circular flow.
Since what is not consumed is saved, we have:
mps = 1 - mpc = 1 - 0.9 = 0.1
Therefore,
Tax multiplier = -0.9 / 0.1 = -9
c) Calculation of balanced budget multiplier
To calculate this, we use the formula for calculating the balanced budget multiplier as follows:
Balanced budget multiplier = Spending multiplier + Tax multiplier = 10 + (-9) = 10 - 9 = 1
Note that balanced budget multiplier is always equal to 1 as obtained above.
Conclusion
Therefore, if the marginal propensity to consume (mpc) is 0.9, the spending multiplier is 10, the tax multiplier is -9, and the balanced budget multiplier is 1, respectively.
Suppose you run a lawn mowing business. You charge $15 per lawn, you can mow five lawns in an eight hour day, and you work five days a week. You currently have more people asking you to mow their lawns than you can satisfy so you are considering hiring someone to help. Your other option is to rent a riding lawn mower that will enable you to mow seven lawns each day. Your friend Jim, a good worker, will work for $8 per hour and will be able to mow five lawns in an eight hour day also. If you rent a riding mower, it will cost you $100 per week plus $25 for gas and oil.
Required:
What is your best option? Explain why you believe this is your best choice.
Answer:
Option 2
Explanation:
Option 1 If we hire someone to help
Revenue = $15/lawn x 5 lawns per day
Revenue = $75 x 7 days = $525
Total cost = Rate per hour x No. of lawns per day x No, of hours worked
Total cost = $8 x 5 x $8
Total cost = $320 x 7days = 2,240
Profit/Loss = $525- $2,240
Profit/loss = $1,715 loss
Option 2 If we rent a riding mower
Revenue = 7 lawns per day x $15/lawn x 7 days
Revenue = $735
Cost = $100 + $25 for gas and oi
Cost = $125
Profit/loss = $610
The best option would be Option 2 because Firstly it is very much low in cost and provides us a great revenue secondly, it also increases our work efficiency.
Assume your required internal rate of return on similar investments is 11 percent. What is the net present value of this investment opportunity? What is the going-in internal rate of return on this investment? Should you make the investment?
Answer:
Hello some parts of your question is missing attached below are the missing parts
You are considering the purchase of a small income-producing property for $150000 that is expected to produce the following net cash flows
End of year cash flow
1 $50000
2 $50000
3 $50000
4 $50000
Answer : a) $5122.28 (b) 12.59% (c) You should make the investment
Explanation:
Internal rate of return = 11 %
initial cash flows = $150000
period = 4 years
Find the NPV (net present value )( using present value tables)
= preset value of cash flows - initial cash flows
= ∑ present cash flows for 4 years - $150000
= $155122.28 - $150000 = $5122.28
The going-in internal rate of return on investment
N (number of years ) = 4
pv ( present value ) = $150000
PMT = -$50000
Fv ( future value ) = 0
IRR = 12.59% ( making use of the cash flow list in our financial calculator )
The Grange is a firm in a monopolistically competitive market that sells farm implements. The firm collected the data below to determine the profit-maximizing price and quantity at which to sell. Using the data, what is the profit-maximizing price and quantity at which the Grange company should sell its product?
Quantity Price Total Revenue Marginal Revenue Total Cost Marginal Cost
2 $21 $42 $21 $0 $30
4 $18 $72 $15 $64 $2
6 $16 $96 $2 $72 $4
8 $14 $112 $8 $88 $8
10 $12 $120 $4 $108 $10
2 $10 $120 $0 $32 $12
4 $8 $112 $4 $160 $14
Answer:
The profit-maximizing price is $14, and the profit-maximizing quantity is 8.
Explanation:
This is because for a monopolistically competitive firm, the profit-maximizing quantity occurs where marginal revenue equals marginal cost. What the firm does is looking for the point in the demand curve that is exactly above the marginal cost-marignal revenue intersection, and charges the corresponding price and quantity.
We can see that for the quantity of 8, and the price of $14, both marginal revenue and marginal cost are $8, meaning that these are the quantity and price that are profit-maximizing.
James is an agreeable and emotionally stable person. A _______ , he inspires his employees to believe in the changes he wants to make to the organization.
a) transformational leader
b) transactional leader
Answer:
transformational leader
John, Paul, Mark, and Luke have been operating an LLC, and according to the operating agreement, the term of the LLC is set to expire in the near future. What options do the four partners have
Answer with its Explanation:
The partners of Limited Liability partnership are obliged to pass a resolution about the continuing of business or abandoning business. The resolution requires majority vote, which is three fourth majority.
If they want to revisit the terms and conditions for each partners of the business then they will have to form a new agreement on new terms and conditions for business purposes. The new terms might include the new deadline for expiration date of partnership or extension of partnership date.
Maize Company incurs a cost of $34 per unit, of which $21 is variable, to make a product that normally sells for $59. A foreign wholesaler offers to buy 6,600 units at $30 each. Maize will incur additional costs of $1 per unit to imprint a logo and to pay for shipping. Compute the increase or decrease in net income Maize will realize by accepting the special order, assuming Maize has sufficient excess operating capacity. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Reject Accept Net Income Increase (Decrease) Revenues $ $ $ Costs Net income $ $ $ g
Answer:
$52,800
Explanation:
The computation of the increase or decrease in net income is shown below:
Particulars Reject Accept net income or decrease
Revenue
(6,000 × $30) $198,000 $198,000
Less:
Cost
($6,600 × ($21 + $1) $145,200 -$145,200
Net $52,800 $52,800
Since the amount comes in positive so the spcial order should be accepted
For a stock to be in equilibrium, that is, for there to be no long-term pressure for its price to depart from its current level, then a.the expected future return must be less than the most recent past realized return. b.the past realized return must be equal to the expected return during the same period. c.the expected future returns must be equal to the required return. d.the required return must equal the realized return in all periods. e.the expected return must be equal to both the required future return and the past realized return.
Answer:
c.the expected future returns must be equal to the required return.
Explanation:
When the stock is at equilibrium than the intrinsic value of the stock is equivalent to the market price of the stock that depicts that the expected returns which held in the future should be equivalent to the required return
Therefore the option c is correct
And, the other options that are mentioned in the question are incorrect
For a stock to be in equilibrium, the expected future returns must be equal to the required return.
The correct answer to this question is answer option c. At the equilibrium position there is a balance between the expected returns and the required returns.
At this point the intrinsic value is the same thing as the market value. Telling us that the rate the investor is expecting is the same as the actual required rate of return.
Read more on https://brainly.com/question/17136657
Talk to a 55-year-old (or older) business professional nearing retirement. This person can be a family member, friend, or mentor. List and describe the savings, investments, and risk management strategies for this phase of life. Describe how financial planning has changed from the earlier phase of life.
Answer:
The financial planning will differ for the person according to their age. A person who is 50 years older would have money only from his savings. The 55 year old person is retired and would only have money available for living from the saving he had made while he was working. He will not have any other source of income.
Explanation:
The risk management officer should consider the investments by considering his available savings. He should also consider the money required for living as there is no other source of income. The risk appetite for such an old aged individual will be low. He must be risk averse in the situation of retirement. The financial planning strategies changes for the person over the different phases of life. When a person is young and starts the job at age of 25 he might take excessive risks for getting extra returns. He is young and energetic, has ability to work part time along with his routine job to earn extra money.
Alpaca Corporation had revenues of $260,000 in its first year of operations. The company has not collected on $19,300 of its sales and still owes $26,300 on $90,000 of merchandise it purchased. The company had no inventory on hand at the end of the year. The company paid $13,000 in salaries. Owners invested $10,000 in the business and $10,000 was borrowed on a five-year note. The company paid $4,900 in interest that was the amount owed for the year, and paid $6,000 for a two-year insurance policy on the first day of business. Alpaca has an effective income tax rate of 40%. Compute net income for the first year for Alpaca Corporation.
Answer:
$89,460
Explanation:
The computation of the net income is shown below:
Sales $260,000
Less: Cost of goods sold -$90,000
Gross margin $170,000
Less:
Salaries -$13,000
Insurance payment -$3,000 ($6,000 ÷ 2 years)
Interest -$4,900
profit before tax $149,100
Less: tax expense -$59,640
Net income $89,460
We simply deducted all expenses from the revenues so that the net income could arrive and the same is to be considered
Assume a competitive firm faces a market price of $60, a cost curve of C = 0.004q^3 + 30q + 1000, and a marginal cost of curve of: MC = 0.009q^2 + 25.
a. The firm's profit maximizing output level (to the nearest tenth) is ___units, and the profit (to the nearest penny) at this output level is $____.
b. This will cause the market supply to (shift right/shift left). This will continue until the price is equal to the minimum average cost of $____.
Answer:
a) q = $62.36
b) As the profit level is NEGATIVE ( π = - 99.21 ), this will cause the market supply to shift left. This will continue until the price is equal to the minimum average cost of $60.
Explanation:
Given that; the market price P = $60
The cost curve is C = 0.004q³ + 30q + 1000
The marginal cost of curve of MC = 0.009q² + 25
We know that the condition for the profit maximizing level of output is MC=P
∴ 0.009q² + 25 = 60
0.009q² = 35
q² = 35 / 0.009
q² = 3888.88888
q = √3888.88888
q = $62.36
Now we calculate profit at the equilibrium output
π = TR -TC
π = ( P × Q ) - TC
we know TC = 0.004q³ + 30q + 1000
now we substitute
so π = ( 60 × 62.36 ) - { 0.004(62.36)³ + 30(62.36) + 1000
= 3741.6 - ( 970.01 + 1870.8 + 1000
= 3741.6 - 3840.81
π = - 99.21
As the profit level is NEGATIVE, the supply curve shifts left
Average cost is the cost per unit of output.
Average Cost = TC / q
Average Cost = (0.004q³ + 30q + 1000) / q
Average Cost = 0.004q² + 30 + 1000/q
Now equate the derivative of AC with zero
i.e ΔAC/Δq = 0
Δ/Δd{ 0.004q² + 30 + 1000/q } = 0
0.008q - 1000/q² = 0
0.008q = 1000/q²
0.008q³ = 1000
q³ = 125000
q = ∛125000
q = 50
Average cost at this point will be
AC = 0.004q² + 30 + 1000/q
= 0.004 (50)² + 30 + 1000/50
= 10 + 30 + 20
= $60
As the profit level is NEGATIVE ( π = - 99.21 ), this will cause the market supply to shift left. This will continue until the price is equal to the minimum average cost of $60.
Activity-Based Costing: Factory Overhead Costs
The total factory overhead for Bardot Marine Company is budgeted for the year at $1,039,600, divided into four activity pools: fabrication,, $448,000; assembly, $180,000; setup, $222,600; and inspection, $189,000. Bardot Marine manufactures two types of boats: speedboats and bass boats. The activity-base usage quantities for each product by each activity are as follows:
Fabrication Assembly Setup Inspection
Speedboat 7,000 dlh 22,500 dlh 50 setups 88 inspections
Bass boat 21,000 7,500 370 612
28,000 dlh 30,000 dlh 420 setups 700 inspections
Each product is budgeted for 5,000 units of production for the year.
a. Determine the activity rates for each activity.
Fabrication $ per direct labor hour
Assembly $ per direct labor hour
Setup $ per setup
Inspection $ per inspection
b. Determine the activity-based factory overhead per unit for each product. Round to the nearest whole dollar.
Speedboat $ per unit
Bass boat $ per unit
Answer:
Instructions are below.
Explanation:
Giving the following information:
Estimated factory overhead:
fabrication, $448,000
assembly, $180,000
setup, $222,600
inspection, $189,000
Fabrication Assembly Setup Inspection
Speedboat 7,000 dlh 22,500 dlh 50 setups 88 inspections
Bass boat 21,000 7,500 370 612
28,000 dlh 30,000 dlh 420 setups 700 inspections
Each product is budgeted for 5,000 units of production for the year.
First, we need to calculate the predetermined overhead rate for each activity using the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
fabrication= 448,000/28,000= $16 per direct labor hour
assembly= 180,000/30,000= $6 per direct labor hour
setup= 222,600/420= $530 per setup
inspection= 189,000/700= $270 per inspection
Now, we can allocate overhead to each product line:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Speed boat:
Allocated MOH= 7,000*16 + 22,500*6 + 50*530 + 88*270= $297,260
Bass boat:
Allocated MOH= 21,000*16 + 7,500*6 + 370*530 + 612*270= $742,340
Finally, the unitary overhead cost:
Speed boat= 297,260/5,000= $59.45
Bass boat= 742,340/5,000= $148.47
Galaxy Corp. is considering opening a new division to make iToys that it expects to sell at a price of $15,250 each in the first year of the project. The company expects the cost of producing each iToy to be $6,700 in the first year; however, it expects the selling price and cost per iToy to increase by 3.00% each year.
Based on the preceding information and rounding dollar amounts to the nearest whole dollars, the company expects the selling price in the fourth year of the project to be_______ , and it expects the cost per unit in the fourth year of the project to be _______.
Answer:
Selling price= $17,164
Unitary variable cost= $7,541
Explanation:
Giving the following information:
Selling price in the first year= $15,250
Unitary variable cost on the first year= $6,700
Increase rate= 3%
To calculate the selling price and variable cost per unit in the fourth year, we need to use the following formula:
FV= PV*(1+i)^n
PV= current value
i= increase rate
n= number of years
Selling price= 15,250*(1.03^4)= $17,164
Unitary variable cost= 6,700*(1.03^4)= $7,541
Chester has negotiated a new labor contract for the next round that will affect the cost for their product Camp. Labor costs will go from $3.79 to $4.39 per unit. Assume all period and other variable costs remain the same. If Chester were to absorb the new labor costs without passing them on in the form of higher prices, how many units of product Camp would need to be sold next round to break even on the product?
Complete Question:
Chester has been selling widgets for $10, total variable costs are $4.40 and fixed costs are $100,000.
Chester has negotiated a new labor contract for the next round that will affect the cost for their product Cid. Labor costs will go from $2.79 to $3.39 per unit. Assume all period and other variable costs remain the same.
If Chester were to absorb the new labor costs without passing them on in the form of higher prices, how many units of product Cid would need to be sold next round to break even on the product?
Answer:
Chester
Break-even point = Fixed costs/Contribution margin per unit
= $100,000 / $5
= 20,000 units
Explanation:
a) Data and Calculations:
Selling price = $10
Old variable cost = $4.40
Additional variable cost = $0.60
New variable costs = $5 ($4.40 + $0.60)
Contribution per unit = Selling price minus variable cost per unit
= $5 ($10 - $5)
Fixed costs = $100,000
b) Chester's Break-even point (in units) is the number of units of a product Camp that Chester requires to sell in order to recover her fixed costs. The information provided by break-even analysis guides Chester in making decisions for the production of Camps and its marketing. Without identifying the units of Camp to be produced and sold in order to remain in business, all things being equal, Chester might short-produce or short-sell Camps and run the business unprofitably.
Consider the corporate valuation model, if the WACC increases what happens to the present value of the firm. Group of answer choices It is indeterminant the present value will stay the the present value will decrease The corporate valuation model doesn't depend the WACC The present value will increase
Answer:
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Decreasing the discount rate is Group of answer choices a contractionary policy because it reduces banks' profit margins by lowering the return on lending. g
Complete Question:
Decreasing the discount rate is:
Group of answer choices:
a) an expansionary policy stance because consumers and businesses can now borrow funds directly from the Fed at a lower cost, thereby encouraging private spending.
b) a contractionary policy stance because the cost of borrowing funds falls, thereby encouraging consumption
and investment spending.
c) a contractionary policy because it reduces banks' profit margins by lowering the return on lending.
d) an expansionary policy stance because it will be less costly for banks to borrow funds and this puts
downward pressure on interest rates in the economy.
Answer:
d) an expansionary policy stance because it will be less costly for banks to borrow funds and this puts
downward pressure on interest rates in the economy.
Explanation:
Decreasing the discount rate is an expansionary policy stance because it will be less costly for banks to borrow funds and this puts downward pressure on interest rates in the economy.
An expansionary monetary policy can be defined as a strategic policy or actions of Central Bank such as "The Fed" that expand or increases the money supply so as to stimulate the economy. The expansionary monetary policies could also be adopted to lower short-term interest rates. Consequently, the effect of the expansionary policy would be to shift the aggregate demand curve to the right, therefore causing economic growth within the country.
Additionally, the interest rate charged on money supply or currencies to banks by the central bank is known as the discount rate.
In conclusion, when banks are charged lowered discount rates, it will cost them less to borrow money from the central bank and as a result there would be an increase in money supply; thus, availing them the opportunity to give out more loans to their customers.