Answer:
I. National Income Accounting:
National income accounts are an accounting framework is useful in measuring economic activity.
A. Three approaches—all produce the same measurement of the production of the economy.
1. product approach: how much output is produced
2. income approach: how much income is created by production
3. Expenditure approach: how much purchasers spend
B. Why all three approaches are the same: Assumes no unsold goods (at this point) then the market values of goods and services produced must equal the amount buyers spend to purchase them (product approach=expenditure approach). What the seller receives (income) must equal what is spent (expenditure).
II. Gross Domestic Product (GDP)
A. GDP vs. GNP
GNP= output produced by domestically owned factors or production. (By our people)
GDP= includes production produced by foreign owed factors of production within the countries border and excludes domestically owned production in foreign countries. (On our soil)
1. GDP = GNP – net factor payment from abroad (NFP)
2. How big is the difference?
B. Product approach: The market value of all final goods and services produced within a nation during a fixed period of time.
1. Market value: allows comparison between different goods. Has some problems – ignores some goods. underground economy, and government services.
2. Final goods and service: Treatment of inventories; Capital goods; Avoids double counting; Value added.
3. New production: Ignores goods produced in previous periods
C. Expenditure approach: Total spending on final goods and services produced within a nation during a specified period of time.
1. Income expenditure identity and four categories of spending: Consumption (C), Investment (I), government purchases of goods and services (G) and net exports (NX)
Y = C + I + C + NX
2. Consumption(C): Spending by domestic households on final goods and services
a. Consumer durable goods: Long lasting goods
b. Nondurable goods used up quickly
c. Services
3. Investment (I): Spending on new capital goods by business
a. Business fixed investment
b. Residential fixed investment
c. Inventory investment: Changes in the amount of unsold goods, goods in progress and new materials
4. Government purchases of goods and services (G):
a. State and local vs. Federal spending
b. Transfers and interest payments on debt are not counted. They are counted in total government expenditure which is not the same as government purchases of goods and services.
5. Net exports (NX): exports minus imports
a. Need to subtract imports since they are counted in C. I and G can add goods produced within the country purchased by foreign interests (exports).
D. Income approach adds up income received by producers, including profits and taxes paid to the government
1. Income generated by production
a. National income =
compensation of employees
+ proprietors income
+ rental income of persons
+ corporate profits
+ net interest
+ taxes on production
+ business transfers
+ surplus of gov enterprises
b. National income + statistical discrepancy = Net National Product (NNP)
Note: This changed a couple years ago. If you have an old addition, you may see the indirect business tax. It is no long used in this equation!
c. NNP + depreciation = GNP
d. GNP – NFP = GDP
2. Income of private sector and government
a. Private disposable income = income of private sector = private sector income earned at home (Y or GDP) and abroad (NFP) + payments from the government sector (transfers TR and interest on debt INT) – taxes paid to government (T) = Y + NFP + TR + INT – T
b. Government net income = T- TR – INT
III. Saving and Wealth
A. Wealth Difference between assets and liabilities
B. Measures of aggregate savings
1. Saving = current income – current spending; saving rate = saving/current income
2. Private saving (Spvt) Spvt = Y + NFP – T + TR + INT – C
3. Government Saving (Sgovt) Sgovt = T – TR- INT – G
a. Government saving = Government budget surplus (deficit = -Sgovt)
4. National Saving= private saving + government saving
S = Spvt + Sgovt = Y + NFP - C – G = GNP - C – G
C. The uses of private saving
1. S = I + (NX + NFP) = I + CA
CA = NX + NFP = current account balance
2. The use of savings identity
Spvt = I – Sgovt + CA
If the budget deficit increases one or a combination of the following happen
1) private saving must rise
2) investment must fall
3) the current account balance must fall
IV. Prices Indexes, Inflation and Interest Rates
A. Nominal vs. Real variables
Nominal Variables – Measures the economic variable in terms of the current market value.
Real Variable—Measure the variable valued at the prices in a base year.
B. Real vs. Nominal: Calculation the differences
Examples Small country only produces base balls and baseball bats
Explanation:
A company's marginal revenue function is MR=150−8x1/3, where x is the number of units. Find the revenue function. (Evaluate C so that revenue is zero when nothing is produced.)
Answer:
R(x) = 150x - 6[tex]x^{4/3}[/tex]
Explanation:
Marginal Revenue function = 150 - 12[tex]x^{1/3}[/tex]
Revenue function = [tex]\int\limits^a_b {150 - 8x^1/3} \, dx[/tex]
R(x) = 150x - 8*(x^1/3+1) / (1/3 + 1) + c
R(x) = 150x - 8*3/4x^4/3 + c
R(x) = 150x - 6x^4/3 + c
Given R(o) = 0
R(o) = 0 = O + C --- C = O
R(x) = 150x - 6[tex]x^{4/3}[/tex]
Kostelnik Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $237,000, variable manufacturing overhead of $3.90 per machine-hour, and 30,000 machine-hours. The company has provided the following data concerning Job A496 which was recently completed: Number of units in the job 20 Total machine-hours 80 Direct materials $ 500 Direct labor cost $ 2,160 The amount of overhead applied to Job A496 is closest to: (Round your intermediate calculations to 2 decimal places.)
Answer:
Allocated MOH= $944
Explanation:
Giving the following information:
Estimated overhead= $237,000
Variable manufacturing overhead= $3.90 per machine-hour
Estimated machine-hours= 30,000 machine-hours.
Job A496:
Total machine-hours 80
First, we need to calculate the predetermined overhead rate, using the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= (237,000/30,000) + 3.9
Predetermined manufacturing overhead rate= $11.8 per machine-hour
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 11.8*80
Allocated MOH= $944
Stock Price after Recapitalization Lee Manufacturing's value of operations is equal to $900 million after a recapitalization (The firm had no debt before the recap.) Lee raised $300 million in new debt and used this to buy back stock. Lee had no short-term investments before or after the recap. After the recap, wd = 1/3. The firm had 26 million shares before the recap. What is P (the stock price after the recap)? Do not round intermediate calculationos. Round your answer to the nearest cent. $
Answer:
$34.62
Explanation:
Lee's manufacturing value of operation is $900 million after recapitalization
The firm has no amount of debt Before this
They also had no short term investments before the recap
After the recap wd= 1/3
Lee's had 26 million before the recap
The first step is to calculate the value of equity after recap
= (1-1/3) × 900 million
= 0.6667 × 900 million
= 600 million
Therefore the stock price after the recap can be calculated as follows
= 600 million + (300 million - 0)/26 million
= 600 million + 300 million /26 million
= 900 million/26 million
= $34.62
Hence the stock price after the recap is $34.62
Below is the complete list of accounts of Cobras Incorporated and the related balance at the end of March. All accounts have their normal debit or credit balance. Supplies, $1,100; Buildings, $53,000; Salaries Payable, $300; Common Stock, $33,000; Accounts Payable, $2,100; Utilities Expense, $3,500; Prepaid Insurance, $1,100; Service Revenue, $19,300; Accounts Receivable, $4,000; Cash, $3,300; Salaries Expense, $6,200; Retained Earnings, $17,500. Required: Prepare a trial balance with the list of accounts in the following order: assets, liabilities, stockholders' equity, revenues, and expenses.
Answer:
Cobras Incorporated
Trial Balance
For the Month Ended March 31
Account Debit Credit
Cash $3,300
Account Receivable $4,000
Supplies $1,100
Prepaid Insurance $1,100
Buildings $53,000
Account Payable $2,100
Salaries Payable $300
Common stock $33,000
Retained earnings $17,500
Service Earnings $19,300
Salaries Expenses $6,200
Utilities Expenses $3,500
Total $72,200 $72,200
A 4.8% coupon bond with 9 years remaining until maturity is currently trading at $1087.43. Assume semi-annual coupon payments. The bond's YTM is __________%. Round your *final* answer to 2 decimal places (example: 12.34). Hint: be sure your inputs reflect the semiannual payment frequency.
Answer:
3.66%
Explanation:
The yield to maturity can be computed using Excel rate function below:
=rate(nper,pmt,-pv,fv)
nper is the number of semiannual coupons in 9 years i.e 9*2=18
pmt is the amount of semiannual coupon =$1000*4.8%*6/12=24
pv is the current price which is $1087.43
face value is $1000
=rate(18,24,-1087.43,1000)
rate=1.83% (semiannual yield)
annual yield=1.83%*2
annual yield=3.66%
What was your profit or loss over the day (in $)?
Answer:
profit or loss over the day (in $) is the subtraction of sell price(in $) from the purchase price(in $) at the end of the day.
Explanation:
To find the percentage of profit or loss we first find the profit or loss by the subtraction of sell price from the purchase price and than divide the result by the purchase price and multiply with 100.
Formoula for finding the percentage profit or loss= (sell price- purchase price)*100/(purchase price)
Imprudential, Inc., has an unfunded pension liability of $800 million that must be paid in 21 years. To assess the value of the firm's stock, financial analysts want to discount this liability back to the present. If the relevant discount rate is 5.5 percent, what is the present value of this liability
Answer:
PV= $259.89 million
Explanation:
Giving the following information:
Future Value= $800 million
Number of periods= 21 years
Relevant discount rate= 5.5 percent
To calculate the present value, we need to use the following formula:
PV= FV/(1+i)^n
PV= 800/1.055^21
PV= $259.89 million
Purple Dog Pet Supply Inc. (PDPS) released its annual results and financial statements. Eleanor is reading the summary in the business pages of today’s paper. In its annual report this year PDPS reported a net income of $180,000. Last year, the company reported a retained earnings balance of $510,000, whereas this year it increased to $600,000. How much was paid out in dividends this year?
Answer:
$90,000
Explanation:
Purple dog pet supply released its annual results and financial statement
It reported a net income of $180,000 this year
Last year the company reported a retained earnings of $510,000
This year it increased to $600,000
Therefore the amount that was paid out in dividend this year can be calculated as follows
= $180,000 + $510,000-($600,000)
= $690,000-$600,000
= $90,000
Hence the amount that was paid out in dividend this year is $90,000
At what input output level will average variable cost begin to rise?
Answer:
When the additional cost (input) of producing one more unit (output) is greater than the additional revenue earned on it results in increase in the average variable cost.
Explanation:
Average Variable cost is calculated by dividing the total variable cost by output. The graph of which, when prepared, is shaped in U curve. This is because when we produce one unit (output) then the additional cost (input) incurred is lower than the additional revenue earned.
However, as we proceed further in producing more units at one point in time we reach from fall in average variable cost to constant level and then the average variable cost starts to rise. This rise in average variable cost is known as the law of diminishing marginal returns. Which states that at one certain point Average Variable cost will start to rise. The production in one more unit will result in the additional cost to be more than the additional revenue generated from it.
Value of Equity after Recapitalization Nichols Corporation's value of operations is equal to $500 million after a recapitalization (the firm had no debt before the recap). It raised $300 million in new debt and used this to buy back stock. Nichols had no short-term investments before or after the recap. After the recap, wd = 60%. What is S (the value of equity after the recap)? Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Round your answer to the nearest whole number. $ million
Answer:
$300 million
Explanation:
Computation of S the value of equity after the recap
First step is to find the Value of debt using this formula
Value of debt = (New Debt / WD) - Value of Debt
Let plug in the formula
Value of debt = [$300 million / 0.60] - $300 million
Value of debt =500 million -$300 million
Value of debt =$200 million
Second step is to calculate for the Value of equity using this formula
Value of equity = Total market value - Value of debt
Let plug in the formula
Value of equity= $500 million - $200 million
Value of equity = $300 million
Therefore S the value of equity after the recap will be $300 million.
house alarm system when he moved to his new home in Seattle. For security purposes, he has all of his mail, including his alarm system bill, mailed to his local UPS store. Although the alarm system is activated and the company is aware of its physical address, Richardson receives repeated offers mailed to his physical address, imploring him to protect his house with the system he currently uses. What do you think the problem might be with that company's database
Answer:
it appears there's no database differentiation
Explanation:
Remember, we are told Richardson had already set up his house alarm system when he moved to his new home in Seattle, meaning he had subscribed to the service.
However, because the company's database does not differentiate customers who had activated their alarm system and set their billing to be sent to their local UPS store, it has caused Richardson security concern to still see repeated offers mailed to his physical address.
Jim Company bought a machine for $36,000 with an estimated life of 5 years. The residual value of the machine is $6,000. This machine is expected to produce 120,000 units. In year 1, it produced 19,000 units, and in year 2, 38,000 units. Assuming the units-of-production method, calculate the first 2 years’ depreciation.
Answer:
Year 1 $4,750
Year 2 $9,500
Explanation:
Calculation for the first 2 years' depreciation
Since we were told that in year 1 it produced 19,000 units which means that the depreciation will be calculated as :
Year 1 Depreciation =19,000 units÷4 years
Year 1 Depreciation=$4,750
Calculation for Year 2 Depreciation
Since we were told that in year 2, 38,000 units was produce which means that the Depreciation will be calculated as :
Year 2 Depreciation =19,000 units÷2 years
Year 2 Depreciation =$9,500
Therefore Year 1 depreciation will be $4,750 while Year 2 depreciation will be $9,500.
Savings bonds differ from most other bonds in that
Answer: They provide a higher rate of return.
They are held for a shorter time. The buyer does not receive periodic interest payments in exchange for a lower purchase price.
A company is considering two designs for a machine in its manufacturing line. The first, called machine A, will cost $160000 in fixed costs and will cost $80 per unit in variable costs, for each unit it produces. The second, called B, will cost $270000 in fixed costs and will cost $2 per unit in variable costs, for each unit it produces. At what volume of production will the two machines cost the same
Answer:
The indifference point is 1,410 units
Explanation:
Giving the following information:
Machine A:
Fixed costs= $160,000
Unitary variable cost= $80
Machine B:
Fixed costs= $270,000
Unitary variable cost= $2
First, we need to structure the total cost formula for each machine:
Machine A= 160,000 + 80x
Machine B= 270,000 + 2x
x= number of units
Now, we equal both formulas and isolate x:
160,000 + 80x = 270,000 + 2x
78x = 110,000
x= 110,000/78
x= 1,410 units
The indifference point is 1,410 units
Gerken Company concluded at the beginning of 2021 that the company's ownership interest in DillCo had increased to the point that it became appropriate to begin using the equity method to account for the investment. The balance in the investment account is $69,000 at the time of the change, and accountants working with company records determined that the balance would have been $81,000 if the account had been adjusted for investee net income and dividends as prescribed by the equity method. After implementing the change to the equity method, if financial statements were prepared:
Answer:
NET INCOME will remain the same or remain unchanged while the RETAINED EARNINGS will be greater by the amount of $12,000
Explanation:
Based on the information given we were told that the balance in the investment account was the amount of $69,000 in which we were still told that at the time when the change occured the accountants who was working with the company records shows that the balance would have been the amount of $81,000 which means that after the change is been implemented to the equity method, if financial statements were prepare the NET INCOME will remain the same or remain unchanged while the RETAINED EARNINGS will be greater by the amount of $12,000 ($81,000-$69,000).
Which cost is not relevant in making financial decisions?
A) Sunk costs.
B) Opportunity costs.
C) Incremental costs.
D) Out-of-pocket costs.
The elements of professionalism contains_ attributes.
Answer:
Competency.
Explanation:
On december 31 2019 the ledger of lopez company contained the following account balances:Cash $31,500 Maria Lopez, Drawing $12,000Accounts Receivable 2,150 Fees Income 46,250Supplies 1,350 Depreciation Expense 2,000Equipment 24,500 Salaries Expense 15,500Accumulated Depreciation 1,750 Supplies Expense 2,250Accounts Payable 2,250 Telephone Expense 1,850Maria Lopez, Capital 46,750 Utilities Expenses 3,900
Answer:
A. Dec 31, 2019
Dr Fees Income 46,250
Dr Income Summary 46,250
B. Dec 31, 2019
Dr Income Summary 25,500
Cr Depreciation Expense 2,000
Cr Salaries Expense 15,500
Cr Supplies Expense 2,250
Cr Telephone Expense 1,850
Cr Utilities Expense 3,900
C. Dec 31, 2019
Dr Income Summary 21,250
Cr Maria Lopez, Capital 21,250
D. Dec 31, 2019
Maria Lopez, Capital 12,000
Maria Lopez, Drawing 12,000
Explanation:
A. Preparation of the closing entry for revenue.
Dec 31, 2019
Dr Fees Income 46,250
Dr Income Summary 46,250
(To close revenue accounts)
B. Preparation of the closing entry for expenses.
Dec 31, 2019
Dr Income Summary 25,500
(2,000+15,500+2,250+1,850+3,900)
Cr Depreciation Expense 2,000
Cr Salaries Expense 15,500
Cr Supplies Expense 2,250
Cr Telephone Expense 1,850
Cr Utilities Expense 3,900
(To close expense accounts)
C. Preparation of the closing entry for balance of income summary
Dec 31, 2019
Dr Income Summary 21,250
(46,750-25,500)
Cr Maria Lopez, Capital 21,250
(To close balance of income summary)
D.Preparation of the closing entry for the drawing account
Dec 31, 2019
Maria Lopez, Capital 12,000
Maria Lopez, Drawing 12,000
(To close drawing account)
Costello Corporation reported pretax book income of $500,900. During the current year, the reserve for bad debts increased by $6,800. In addition, tax depreciation exceeded book depreciation by $40,900. Finally, Costello received $3,450 of tax-exempt life insurance proceeds from the death of one of its officers. Costello's deferred income tax expense or benefit would be:
Answer:
Deferred income tax expense = $7,161
Explanation:
Given:
Bed debts increase = $6,800
Depericiation increase = $40,900
Tax-exempt life insurance = $3,450
Computation:
Assume tax rate = 21%
Taxable difference = 40,900 - 6,800
Taxable difference = 34,100
Deferred income tax expense = 34,100 × 21%
Deferred income tax expense = $7,161
Tumbling Haven, a gymnastic equipment manufacturer, provided the following information to its accountant. The company had net fixed assets of $356,190, and other assets of $4,176. The firm has current liabilities of $94,792, long-term debt of $76,445, common stock of $200,000, and retained earnings of $134,461. What amount of current assets did this firm have?
Answer: 145332
Explanation:
Current assets are the assets that a company has wgich are expected to either be sold or used during the next year and they iinclude cash, stock inventory, accounts receivable, marketable securities, cash equivalents, pre-paid liabilities, etc
It should be noted that:
Total asset = Current asset + $356190 + $4176
= Current asset + $360366
Long term debt + equity = 76445 + 200000 + 134461
= $410906
Current liabilities = $94,792
Since current liabilities= Total asset - (long term debt + equity)
$94,792 = (Current asset + $360366) - $410,906
Current asset = $94792 + $410906 - $360366
= $505698 - $360366
= $145,332
Use the supply and demand schedules below to answer the following questions: Price Quantity Demanded Quantity Supplied $10 100 20 15 80 40 20 60 60 25 40 80 30 20 100 Instructions: Enter your answers as a whole number. a. What is the equilibrium price and quantity? Market equilibrium price: $ Market equilibrium quantity: units b. What is the market price if there is a shortage of 40 units? $
Answer:
$20
60
$15
Explanation:
equilibrium is the point where quantity supplied equals quantity demanded.
Equilibrium price is the price at which quantity supplied equals quantity demanded. = $20
equilibrium quantity is the quantity at which quantity supplied equals quantity demanded. = $60
There is a shortage at the point where quantity demanded exceeds quantity supplied. shortage occurs below equilibrium. At $15, quantity demanded exceeds quantity supplied by 40 units
the different ways the media informs the public on the daily work of the Zondo Commission?
The correct answer to this open question is the following.
Although the are no options attached, we can say the following.
The different ways the media informs the public on the daily work of the Zondo Commission have been through their different slots such as their broadcasting systems, TV channels, Radio news, and social media sites.
The Zondo Commission in South Africa was formed to investigate corruption acts, fraud, and state capture. Formally known as the Judicial Commission of Inquiry into Allegations of State Capture, it was created in August 2018 as an initiative from the South Africa President Cyril Ramaphosa. The investigation is in progress and mass media is following the case very closely, daily informing the people of South Africa to generate Public Opinion.
Suppose the following information is available for Callaway Golf Company for the years 2022 and 2021. (Dollars are in thousands, except share information.) 2022 2021 Net sales $ 1,124,000 $ 1,130,500 Net income (loss) 85,062 69,184 Total assets 855,338 838,078 Share information Shares outstanding at year-end 70,000,000 71,770,000 Preferred dividends 0 0 There were 78,630,000 shares outstanding at the end of 2020. (a) What was the company’s earnings per share for each year?
Answer:
2021
Earnings per share = ( Net Income - Preferred dividends) / Weighted average number of shares
Weighted average number of shares = (Beginning share + Ending shares ) / 2
= (78,630,000 + 71,772,000) / 2
= $75,201,000
Earnings per share = 69,184,000 / 75,201,000
= $0.92
2022
Weighted average number of shares = (Beginning share + Ending shares ) / 2
= (71,772,000 + 70,000,000) / 2
= $70,886,000
Earnings per share = 85,062,000 / 70,886,000
= $1.20
(a) The company’s earnings per share for each year is $0.92 and $1.20.
Calculation of earning per share for each year:For 2021
Earnings per share = ( Net Income - Preferred dividends) ÷ Weighted average number of shares
here
Weighted average number of shares = (Beginning share + Ending shares ) ÷ 2
= (78,630,000 + 71,772,000) ÷ 2
= $75,201,000
Earnings per share = 69,184,000 ÷ 75,201,000
= $0.92
For 2022
The weighted average number of shares = (Beginning share + Ending shares ) ÷ 2
= (71,772,000 + 70,000,000) ÷ 2
= $70,886,000
Earnings per share = 85,062,000 ÷ 70,886,000
= $1.20
Learn more about shares here: https://brainly.com/question/17471451
Which of the following statements is true of offshoring?a. It is invariably the same thing as outsourcing.b. It typically involves arranging for other organizations to perform value chain functions that were previously performedinternally.c. It requires outsourcing.d. It means moving processes previously performed domestically to a foreign location.
Answer: d. It means moving processes previously performed domestically to a foreign location.
Explanation: Large organizations may often base or allot different business process or operations in different locations. Hence, offshoring may be explained as a business practice whereby certain business processes are moved from its previous domestic base to a foreign location. The concept of offshoring is usually a well thought of process whereby organizations relocate to regions that affords more in terms of cost effectiveness in production where they could more easily secure raw materials, available market to sell, skilled and unskilled labors, machineries and other factors capable of fostering productivity.
why more and more services are being developed by businesses today?
Answer:
because they need money
Explanation:
they need money because of the plague
A. Monique balls is paid an hourly rate of $17.63 for a regular time work. What will her time and a half hourly rate for overtime work?
B. What will be her double-time hourly pay rate for overtime?
Nevan’s gross pay was $45,150 last year. The federal income tax withholding from his pay was 16% of his gross pay. Nevan determined the federal income tax he owes is $6,150. Which of the following is true?
Answer:
Nevan will receive a refund of $1,074.
Explanation:
The true statement from the following options is that the refund of amounting to $1,074 being receive to Nevan.
Option D is correct.
What is an income tax?An income tax is the liability paid by the taxpayer in respect of its taxable income. The taxable income is determined as the difference between gross income and the applicable exemptions.
From the provided case, the amount of tax withheld from the income of Nevan is $7,224 ($45,150 X 16%) and the amount of Income tax paid by him is $6,150, so the amount of difference, that is, $1,074 is considered to be refund. This is because the tax liability is lesser than the tax amount being withheld.
Question's missing part:
The options are given as follows:
A) Nevan owes an additional $1,074 in federal tax.
B) Nevan owes an additional $984 in federal tax.
C) Nevan will receive a refund of $1,074.
D) Nevan will receive a refund of $984.
Therefore, the refund of $1,074 is being earned by Nevan in the provided situation.
Learn more about the income taxes in the related link:
https://brainly.com/question/17075354
#SPJ6
Multiphonics produce no new sonic alternatives for the oboe.
a. True
b. False
Answer: False
Explanation:
Most of the oboe’s history is typically represented in the drawings and the paintings of ancient civilizations. The oboe can be said to come from the family will of the shawm instrument.
It should be noted that there are different fingering positions that help in the production of multiphonics on oboe.
Therefore, the statement that "Multiphonics produce no new sonic alternatives for the oboe" is false.
O'Neill, Incorporated's income statement for the most recent month is given below. If sales in Store B increase by $30,000 as a result of a $7,000 expenditure in fixed expenses: Select one: a. the contribution margin should increase by $18,000 b. the segment margin should increase by $12,000 c. the contribution margin should increase by $11,000 d. the segment margin should increase by $5,000
Answer: $5,000
Explanation:
The Contribution Margin (CM) given it $80,000 for Store B.
The Contribution margin ratio is;
= CM / Sales
= 80,000 / 200,000
= 40%
Given an increase of $30,000 in sales, increase in CM is;
= 30,000 * 40%
= $12,000
Traceable fixed costs for that increase was $7,000 so the segment margin will be;
= CM - Traceable fixed cost
= 12,000 - 7,000
= $5,000
The following cost data pertain to the operations of Rademaker Department Stores, Inc., for the month of March: Corporate headquarters building lease $ 94,000 Cosmetics Department sales commissions-Northridge Store $ 6,600 Corporate legal office salaries $ 58,600 Store manager's salary-Northridge Store $ 11,600 Heating-Northridge Store $ 12,600 Cosmetics Department cost of sales-Northridge Store $ 32,600 Central warehouse lease cost $ 7,600 Store security-Northridge Store $ 14,600 Cosmetics Department manager's salary-Northridge Store $ 5,600 The Northridge Store is just one of many stores owned and operated by the company. The Cosmetics Department is one of many departments at the Northridge Store. The central warehouse serves all of the company's stores. What is the total amount of the costs listed above that are direct costs of the Cosmetics Department
Answer:
Rademaker Department Stores, Inc.
Direct costs of the Cosmetics Department:
= $44,800
Explanation:
a) Data and Calculations:
Cosmetics Department
Cosmetics Department Sales commissions - Northridge Store $ 6,600
Cosmetics Department cost of sales-Northridge Store $ 32,600
Cosmetics Department manager's salary-Northridge Store $ 5,600
Total direct costs for Cosmetics Department $44,800
b) The direct costs for the Cosmetics Department are those costs that are directly attributable to the department. They are not the shared costs arising from either the Northridge Store or from the Corporate headquarters.