Answer:
Change; overestimates
Explanation:
The substitution bias in the consumer price index refers to the idea that consumers change the quantity of products they buy in response to higher price, and the official CPI does not reflect this and overestimates the cost of the market basket.
The consumer price index (CPI) is a measure used to analyze and examine the weighted average or aggregate of prices of a basket of goods and services paid for by consumers such as medical, food, and transportation.
In Economics, the substitution bias is a limitation of the consumer price index (CPI) because it doesn't take into consideration the substitution effect of consumer's choice during inflation.
Generally, consumers usually choose to substitute a particular product with another having a cheaper price, when its price rise than the normal price they buy at. The consumer price index will still overestimate the cost of the market basket even when the consumer has substituted the particular product; consumer switching from an expensive product to a relatively alternative.
Luker Corporation uses a process costing system. The company had $177,500 of beginning Finished Goods Inventory on October 1. It transferred in $854,000 of units completed during the period. The ending Finished Goods Inventory balance on October 31 was $175,200. The entry to account for the cost of goods sold in October is:]
Answer:
Dr Cost of goods sold 856,300
Cr Finished goods inventory 856,300
Explanation:
we must first determine the value of the total goods manufactured:
beginning inventory of finished goods + finished goods = $177,500 + $854,000 = $1,031,500
the cost of goods sold = total goods manufactured - ending finished goods = $1,031,500 - $175,200 = $856,300
Dr Cost of goods sold 856,300
Cr Finished goods inventory 856,300
In a perpetual average cost system:_________
a) A new weighted-average unit cost is calculated each time additional units are purchased.
b) The cost allocated to ending inventory is generally the same as it would be in a periodic inventory system.
c) The moving-average unit cost is determined following each sale.
d) The average is determined by dividing the total number of units sold by the cost of units purchased during the period.
Answer:
a) A new weighted-average unit cost is calculated each time additional units are purchased
Explanation:
Perpetual Inventory system is the method of recalculating the value of goods held after each transaction.
In Weighted Average Cost Method, the average cost of goods held is recalculated each time a new delivery of goods is received. Issues are then priced at this weighted average cost.
Apple Inc. is the number one online music retailer through its iTunes music store. Apple sells iTunes gift cards in $15, $25, and $50 increments. Assume Apple sells $19.2 million in iTunes gift cards in November, and customers redeem $12.2 million of the gift cards in December.
Required:
1. Record the receipt of cash for gift cards.
2. Record the revenue earned from redemption of gift cards.
3. What is the ending balance in Deferred revenue?
Answer and Explanation:
The Journal entries are shown below:-
1. Cash Dr, $19,200,000
To Deferred revenue $19,800,000
(Being receipt of cash for gift cards is recorded)
2. Deferred revenue Dr, $12,200,000
To Sales revenue $12,800,000
(Being revenue recognized from the redemption of gift cards is recorded)
3. The computation of ending balance in Deferred revenue is shown below:-
Ending balance in Deferred revenue = Sold apples - Redeem amount of the gifts
= $19,200,000 - $12,200,000
= $7,000,000
The University of Kay and Kaytech University are bitter cross-town rivals. They compete in everything from sports to academics. Due to decreasing enrollment, the schools make an agreement to give all incoming students free tuition for one semester before raising the existing rates the following semester. This action is most likely to be considered a:___________.
A. horizontal agreement in violation of the Sherman Act.
B. vertical agreement in violation of the Sherman Act.
C. tying agreement in violation of the Clayton Act.
D. reciprocal dealing agreement violating the Clayton Act.
E. licensing agreement violating the Clayton Act.
Answer:
A. horizontal agreement in violation of the Sherman Act.
Explanation:
According to the Sherman Antitrust Act of 1890 it restricted the activities related to interstate commerce and the competition arise in the market place
The horizontal agreement is an agreement which is done between the business who are competing with each other in order to modify the competition for all the available competitors in the market
Therefore according to the given situation, the correct option is A.
A free rider is a(n) Group of answer choices interest group that files an amicus curiae brief. person who enjoys the benefits of a collective good, action, or service without any effort on their part. a person who receives the services distributed by a monopoly. member of a public interest group.
Answer: Person who enjoys the benefits of a collective good, action, or service without any effort on their part.
Explanation:
In Economics, Free riders are people who benefit from resources and/or goods that are communal in nature and yet either do not pay or pay an insubordinate amount for enjoying same. Essentially they enjoy the benefits of a collective good without any effort on their part.
As a result, the good might become overused and degraded as it is not being maintained enough.
Knowledge can be a real competitive advantage for an organization. The most common form of collective intelligence found inside the organization is knowledge management (KM), which involves capturing, classifying, evaluating, retrieving, and sharing information assets in a way that provides context for effective decisions and actions.
a) True
b) False
Answer:
True
knowledge is power
" Like any effective salesperson, Frazer walks into a customer's office, shakes hands, looks the customer in the eye, and smiles. After exchanging pleasantries, Frazer will try to create interest his company's product, and establish: Group of answer choices"
Answer:
Hello the answer choices are missing but here is general answer to your question
answer : Frazer will try to create interest in his company's product and establish trust
Explanation:
Frazer been a salesperson is charged with making and closing good deals with potential and returning customers which will in return generate revenue for his company. Frazer will try to create an interest in his company's product and he can do this by asking the customer some questions and using the answers pertaining the product he is about to present to the customer to create a proper presentation. that way he can be able to present the product properly thereby getting the customer's interest and establishing trust
Community activist: If Morganville wants to keep its central shopping district healthy, it should prevent the opening of a huge SaveAll discount department store on the outskirts of Morganville. Records from other small towns show that whenever SaveAll has opened a store outside the central shopping district of a small town, within five years the town has experienced the bankruptcies of more than a quarter of the stores in the shopping district.
The answer to which of the following would be most useful for evaluating the community activist’s reasoning?
(A) Have community activists in other towns successfully campaigned against the opening of a SaveAll store on the outskirts of their towns?
(B) Do a large percentage of the residents of Morganville currently do almost all of their shopping at stores in Morganville?
(C) In towns with healthy central shopping districts, what proportion of the stores in those districts suffer bankruptcy during a typical five-year period?
(D) What proportion of the employees at the SaveAll store on the outskirts of Morganville will be drawn form Morganville?
(E) Do newly opened SaveAll stores ever lose money during their first five years of operation?
Answer: The best answer is C
Explanation:
C. In towns with healthy central shopping districts, what proportion of the stores in those districts suffer bankruptcy during a typical five-year period?
Supposing that roughly a quarter of stores in a HEALTHY central shopping district is being found out to have suffered bankruptcy during a typical five-year period. This would be an evidence to say that losing a quarter of the stores to bankruptcy is NOT a sign that a shopping district is "unhealthy". In that regards, the records from the other towns would simply show that, DESPITE having a SaveAll, the shopping districts maintained healthy bankruptcy rates.
So, the fact that a quarter of stores in Morganville's central shopping district will likely experience bankruptcy is no cause for alarm. This is what we would expect in ANY healthy central shopping district. Therefore, based on the evidence, there is no reason to expect that opening a Save All will negatively affect the health of the central shopping district.
Coffee Roasters, Inc., sells whole bean and ground coffee to Delicioso Deli under an existing contract. When the cost of coffee beans increases, Delicioso agrees to a price increase, but later wants to cancel the contract. Delicioso may
Complete/Correct Question:
Coffee Roasters, Inc., sells whole bean and ground coffee to Delicioso Deli under an existing contract. When the cost of coffee beans increases, Delicioso agrees to a price increase, but later wants to cancel the contract. Delicioso may
a. not cancel the contract.
b. cancel the contract only on reasonable notice.
c. cancel the contract immediately.
d. cancel the contract only after accepting a final shipment.
Answer:
a. not cancel the contract
Explanation:
Since there is a new contract which negates the old one and which carries the new price increase, Delicioso may not cancel the contract.
Cancelling the contract by Deliciso will lead to loss for Delicioso as it will have to pay damages amongst other things for breaching the contract with Coffee Roasters Inc.
With this in mind, Delicioso has to go through with the contract before renegotiating another contract.
Cheers.
Don and Susanne have both been accused of insider trading. Don knows that if he confesses while Susanne keeps silent, he will receive a 1-month jail sentence. He also knows that if Susanne confesses and he keeps silent, he will receive a 12-month jail sentence. If neither of them confesses, there will be insufficient evidence to convict either of insider trading, but there is enough evidence to convict each of them individually of obstructing justice, which carries a 2-month sentence. If both of them confess, they will both serve a 3-month jail sentence. This situation is:
Answer:
The situation described in the question is referred to as the Prisoner's Dilemma.
Explanation:
The prisoner's dilemma is an example of a situation in Game Theory.
Game Theory is a subject which can be found under behavioural economics with strong roots in psychology. It is related to the science of decision making in by people and how those decisions affect others. In the simplest of cases, just as is given in the question, the dynamics is between two individuals.
According to the theory, sometimes an equilibrium is reached. This point refers to point in a game or a scenario where the decision by the two individuals is firmed up and as a result, the consequences of such determined.
If the decision by each player is such that it can no longer be changed by any of the players in order to improve their benefits accruable, such decisions are referred to as the Nash Equilibrium.
Cheers!
All of the following are benefits of debt financing except: Group of answer choices Interest on debt financing is tax deductible Debt is typically cheaper than equity Debt does not have predefined payment terms Debt can motivate managers to reduce wasteful spending
Answer:
Debt does not have predefined payment terms
Explanation:
On January 1, Song Corp. receives a $100,000, two-year, note receivable from a customer in exchange for payment of goods. The note has a 12% effective interest rate. On January 1, when Song receives the note from the customer, Song will record (Select all that apply.) Note: you must use present value computations to answer this questions.
Textbook Answer
Note Receivable (debit) 100,000
Discount on Note Receivable (credit) 20,281
Sales Revenue (credit) 79,719
I know that Sales Revenue is the difference between the Note Receivable and the Discount on Note Receivable.
HOW DO YOU FIND THE DISCOUNT ON NOTE RECEIVABLE FOR THIS QUESTION USING THE TVM BUTTONS ON A FINANCIAL CALCULATOR? Please provide the exact input and then the reason why.
N = _______
I/Y = _________
PV = _________
PMT = _________
FV = _________
Answer:
Song Corp
1. Correct Journal Entries for the transaction:
Debit Note Receivable $100,000
Credit Interest on Note Receivable $20,281
Credit Sales Revenue $79,719
To record the sale of goods with a 12% note receivable.
2. Explanation of how the discount (Interest) on the Note Receivable was found:
The first button to select on the Calculator is the "Starting Principal," because this is the variable of interest.
The inputs on the TVM buttons were the $100,000 on the FV, $0 on the PMT, 2 on the N, and 12 on the I/Y buttons. These inputs then calculated the value of PV as $79,719 and Interest as $20,281 approximately when I pressed the "Calculate" button.
N = Number of Periods = 2 years
I/Y = Interest Rate = Effective Interest Rate of 12%
PV = Calculated Value (Present Value of the sales transaction = $79,719)
PMT = Periodic Monthly Payments made to settle the debt = $0.
FV = Future value of the note = $100,000
Total Interest = $20,281
Explanation:
The present value of the sales transaction, which Song Corp. contracted with a customer is $79,719. This is the amount that would have the future value of $100,000.00 for the note receivable from the customer, with an effective interest rate of 12% per annum after 2 years.
The difference between the future value of $100,000 and the present value of $79,719 represents the interest cost, which the customer bears for the note receivable.
However, it is important to stress that this difference is not described as a "Discount on Note Receivable" as depicted in this question, but as an "Interest on Note Receivable." A discount on note receivable would have had a debit balance.
GeoMines Corp. has the following costs related to a mine it acquired this year. Cost of land and natural resource rights $100,000 Development cost before production begins 20,000 Future cost to restore land after mining 15,000 Equipment used for mining 80,000 Exploration and drilling costs 30,000 What amount should be included as an asset for natural resources
Answer:
$165,000
Explanation:
The cost of an asset is derived by considering every cost related to the purchase of an item and putting the asset to use, These costs include the original purchase price , site preparation ,transportation ,installation and testing , warranties and the future cost of restoring dismantling and restoring the land at the completion of its useful life time.
Looking at the given scenario , the related cost of the natural resources as an asset are the cost of the land and the natural resources , development cost ,future cost of land restoration and the cost of exploration and drilling.
The depreciation value of the equipment used for mining will be charged as an expense for the operation year.
Cost of natural resources = 100,000+20,000+15,000+30,000=165,000
Which type of insurance includes the assumption of a contractual obligation to reimburse the insured against all or a portion of his fees, costs, and expenses related to or arising out of services performed by or under the supervision of an attorney who is an active member of the bar of any jurisdiction or jurisdictions of the United States?
Answer:
Legal Insurance
Explanation:
Legal insurance is a type of insurance that provides legal advice and also the costs related to a dispute regardless of whether the policy holder is a plaintiff or the defendant in the case.
In legal insurance , the insurance provider assumes the contractual obligation to reimburse the insured against all or portion of the legal fees arising out of services performed by or under the supervision of an attorney who is an active member of the bar of any jurisdiction of the United States.
Which of the following real estate investments were involves purchasing real estate and charging a monthly fee for use of your space
Answer:
when you flip you buy at a low price, fix it up then sell at a higher price for profit. usually in less than 6 months.
By what method did the Securities and Exchange Commission try to reform the stock market in the 1930s? Nationalizing the New York Stock Exchange Distributing stocks to all unemployed Americans Monitoring all stock transactions Establishing mandatory sentences for traders convicted of fraud.
Answer:
Monitoring all stock transactions
Explanation:
The Securities and Exchange Commission (SEC) is a U.S. regulatory institution responsible for safeguarding resources and the investors, regulating the stock market, and developing and implementing federal securities legislation. The commission was the result of inquiring the cause of the Great Depression and prevent such events in the future. The Securities Act was designed to help deter fraud in securities and provided that investors must provide accurate financial information.
Gilroy Crackers enjoys a competitive advantage as a cost leader because high demand for its products has allowed it to operate at the minimum efficient scale. Which of the following scenarios would be most concerning to the managers of Gilroy Crackers? A major winter storm shuts down Gilroy's production for several days. Gilroy's most reliable production worker takes a job in another industry. Gilroy's leading competitor develops a new low-sodium product. A wheat shortage raises input costs across the industry.
Answer:
Explanation:
Gilroy has been enjoying a cost leadership advantage as a result of a high demand for its product in the market , which has made him to operate at a minimum efficient scale. This means that any action that disrupts the production activities of Gilroy crackers will be of great concern to the managers as demand for crackers might not be met and the cost competitive advantage lost.
One action here that could cause this is if a major storm shut down Gilroy's production for several days. Production will be affected and customers high demand might not be met as a result.
Which identification number is the most important component of your personal identity?
A.
debit card PIN
B.
credit card PIN
C. employee ID of the company
D.
social security number
E.
bank account number
Answer:
D.
social security number
Explanation:
This is because that number allows the government to keep track of your lifetime earnings and years you have worked
Mike is driving over to his girlfriend's apartment and decides to buy some gum. He could stop in a gas station, go to any grocery store, go to any discount store, or even buy some out of a vending machine. The reason Mike has so many options to buy gum is because chewing gum companies strive for _____ channel coverage.
Answer:
Intensive.
Explanation:
In this scenario, Mike is driving over to his girlfriend's apartment and decides to buy some gum. He could stop in a gas station, go to any grocery store, go to any discount store, or even buy some out of a vending machine. The reason Mike has so many options to buy gum is because chewing gum companies strive for intensive channel coverage.
An intensive channel coverage is a sales method which is typically focused on providing varieties of sales outlets or channels for customers to buy their desired products.
Companies operating under the intensive channel coverage, are usually aimed at saturating the market with their products, by using all available sales outlets.
Hence, Mike had so many outlets where he could buy gum from because chewing gum companies strive for intensive channel coverage in order to reach out to potential customers. Other examples of companies that use the intensive coverage channel are cigarette, beer etc.
Suppose that the marginal utility of good Y = 2X2 and the marginal utility of good X = 4XY. What is the slope of the indifference curve when Y = 7 and X = 2? Assume that good X is on the horizontal axis and good Y is on the vertical axis.
Answer:
The slope of indifference curve is 7.
Explanation:
The marginal utility of good Y = 2X^2
The marginal utility of good X = 4XY
Given Y = 7
X = 2
The slope of the indifference curve is otherwise termed as the marginal rate of substitution. So, we can find the slope by dividing the marginal utility of Y by the marginal utility of X.
Slope = MUx / MUy
= 4XY / 2X^2
= 4Y / 2X
Now insert the value of X and Y.
= (4×7) / (2×2)
= 28/4
= 7
Hence the slope of the indifference curve is 7.
Judith George makes an offer to sell a plot of land using a normal letter and states no authorized means by which the offeree, Helga Holmes must respond if she accepts. If Helga accepts the offer using a normal letter, which of the following is true?
A. The acceptance is effective upon dispatch.
B. The acceptance is effective when it is received.
C. The offer is invalid because it fails to stipulate the means of acceptance.
D. The acceptance would be effective upon dispatch even if the means of acceptance is unreasonable.
Answer: A. The acceptance is effective upon dispatch.
Explanation:
According to mail box rule, an offeree mails out both an acceptance and a rejection to the offeror by giving to statements: (i) an acceptance is effective upon dispatch (means offeree decides to accept) or (ii) a rejection is effective upon receipt.(means offeree decides to reject)
Here, Judith George → offeror
Helga Holmes → offeree
If Helga accepts the offer using a normal letter, the correct statement would be :
A. The acceptance is effective upon dispatch.
A firm has a debt-to-equity ratio of 1.0. If it had no debt, its cost of equity would be 12 percent. Its cost of debt is 9 percent. What is its cost of equity if there are no taxes?
Answer:
15%
Explanation:
The computation of the cost of equity in case of no taxes is shown below:
Cost of equity without tax = Cost of equity + (cost of equity - cost of debt) × debt equity ratio
where,
Cost of equity = 12%
Cost fo debt = 9%
And, the debt equity ratio = 1
Now placing these values to the above formula,
So, the cost of equity without considering the tax is
= 0.12 + (0.12 - 0.09) × 1
= 0.12 + 0.03 × 1
= 0.12 + 0.03
= 0.15
= 15%
Suppose that an issuing bank pays on documents that are conforming to the requirements of the letter of credit, but the seller has shipped worthless goods to the buyer. Which of the following statements, if any, are true?
a) As long as the documents strickly comply with the letter of credit requirements, the bank will not have to reimburse the buyer
b) If there is fraud in the transaction, the bank will have to reinburse the buyer and seek its remedies against the seller
c) The strick compliance insulates the bank from liability, since it assures the bank that the underlying contract between the buyer and seller is entirely independent from the letter of credit contract
d) A and B
Answer:
a) As long as the documents strictly comply with the letter of credit requirements, the bank will not have to reimburse the buyer
Explanation:
A letter of credit refers to the letter in which the bank is made a guarantee to pay the amount to a particular person by compiling the specific conditions during the exporting of goods
Since in the question, it is given that the seller has shipped the goods that are worthless i.e of no use for the buyer so in this case, the bank would not reimburse the buyer.
Therefore the correct option is A.
Mitchell Corporation manufactures a single product. The selling price is $85 per unit, and variable costs amount to $68 per unit. The fixed costs are $16,500 per month. What will be the monthly margin of safety (in dollars) if 1,800 units are sold each month
Answer: $ 70,500
Explanation:
Given, Number of units = 1800
Per unit selling price = $85
Total Sales price = (Number of units ) x (Per unit selling price)
= 1800 x $ 85
= $153,000
Variable cost per unit = $68
Total variable cost = 1800 x $68 = $122,400
Contribution Margin = (Sales price ) - (Variable cost)
= $ (153000-122400)
= $30,600
Fixed cost = $16,500 per month
Profit = (Contribution Margin) - (Fixed cost)
= $(30,600-16,500)
= $14,100
PV ratio = (Contribution Margin) ÷ (Total sales) x 100%
= $ (30,600÷153,000)x 100%
=20%
Margin of Safety = (profit) ÷ (PV ratio)
= ($14,100) ÷ (20%)
= ($14,100) ÷ (0.20)
= $ 70,500
Hence, the monthly margin of safety = $ 70,500
Mauve Inc. purchased a global data collection and management system that provides detailed information about each of its customers. Using this information, Mauve is able to identify the individual needs of all its customers and provide tailored products and services. This scenario illustrates the concept of:
Answer:
Mass customization
Explanation:
Mass customization can be defined as the way in which a company or an individual produce large or mass amount of product that meet their customers wants and needs and this is happen when the company or the organisation identify the individual needs of all their customers and provide tailored products and services thereby offering the customers a range of features they can either add or subtract.
Therefore In MASS CUSTOMIZATION it is important for the company or organisation to focus on developing variety of unique mass products that will satisfy their customers needs and by doing this it will lead to higher or greater retention of their customers reason been that the products have options which are tailored to personal tastes of the customers .
what is one of the effects that the internet has had on bussiness?
With the impending retirements of very talented senior staff, Katherine was concerned that PTO Inc., her employer, was not planning for the future. Spurred on by her concern, Katherine convinced management to budget and build a knowledge management system to create, acquire, store, and transfer knowledge in order to modify PTO's behavior to reflect new knowledge and insights. Two years later, Katherine was proud to reflect on her success in helping the company become a(n) ________ organization.
Answer:
Learning.
Explanation:
Since the very talented senior staff would be retiring soon, Katherine was concerned that PTO Inc., her employer, was not planning for the future. Spurred on by her concern, Katherine convinced management to budget and build a knowledge management system to create, acquire, store, and transfer knowledge in order to modify PTO's behavior to reflect new knowledge and insights.
Two years later, Katherine was proud to reflect on her success in helping the company become a learning organization.
A learning organization is an organization that acquires knowledge very quickly or rapidly, so it can be innovative and have a competitive advantage over other organizations in the same industry. It is characterized by the rapid acquisition, sharing, and use of information by its employees.
The legal document identifying the rights and obligations of both the bondholders and the issuer is called the bond ______. This document describes the number of bonds authorized, their par value, and the contract interest rate. agreement document indenture article
Answer: indenture
Explanation:
The bond indenture is a legal contract that or covers a purchase obligation or a debt.
Therefore, the legal document identifying the rights and obligations of both the bondholders and the issuer is called the bond indenture. This document describes the number of bonds authorized, their par value, and the contract interest rate.
Bob is a self-trained painter who works near Maggie Valley, North Carolina, in the Smoky Mountains. When customers come to his studio he studies their interest and tries to gauge how much they would pay for a piece, attempting to get as much money as possible from each customer. This is an example of which type of price discrimination
Answer: first degree price discrimination
Explanation:
From the question, we are informed that Bob is a self-trained painter who works near Maggie Valley, North Carolina, in the Smoky Mountains and that when customers come to his studio he studies their interest and tries to gauge how much they would pay for a piece, attempting to get as much money as possible from each customer.
This is na example of first degree price discrimination as the price being charged to the customers is actually based on what they can afford to pay.
If a 10% decrease in the price of one product that you buy causes an 8% increase in quantity demanded of that product, will another 10% decrease in the price cause another 8% increase (no more and no less) in quantity demanded?
Answer:
No
Explanation:
to determine if another 10% decrease in the price cause another 8% increase (no more and no less) in quantity demanded, we have to determine the price elasticity of demand.
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.
Price elasticity of demand = percentage change in quantity demanded / percentage change in price
8% / 10% = 0.8
demand in inelastic so a 10% reduction in price would lead to a less than 8% change in quantity demanded
Demand is inelastic if a small change in price has little or no effect on quantity demanded. The absolute value of elasticity would be less than one