Answer:
a. Weighted-average unit cost = $9.092
b. We have:
Ending inventory at May 31 using the FIFO method = $290
Ending inventory at May 31 using the LIFO method = $232
Ending inventory at May 31 using the average-cost method = $264
Explanation:
a. Calculate the weighted-average unit cost. (Round answer to 3 decimal places, e.g. 5.125.)
Weighted-average unit cost = Total Cost of units of inventory available for sale / Total units of units of inventory available for sale = $891 / 98 = $9.092
b. Calculate the ending inventory at May 31 using the FIFO, LIFO and average-cost methods. (Round answers to 0 decimal places, e.g. 125.)
Ending inventory in units = Total units of units of inventory available for sale – Units sold = 98 - 69 = 29
Therefore, we have:
Ending inventory at May 31 using the FIFO method = Ending inventory in units * Unit cost of purchases on May 24 = 29 * $10 = $290
Ending inventory at May 31 using the LIFO method = Ending inventory in units * Unit cost of inventory on May 1 = 29 * $8 = $232
Ending inventory at May 31 using the average-cost method = Ending inventory in units * Weighted-average unit cost = 29 * $9.092 = $264
(f) Find the present value of an investment that will pay $3,000 at the end of Years 10, 11, and 12. Use a discount rate of 8%.
Answer:
PV= $3,867.67
Explanation:
Giving the following information:
Find the present value of an investment that will pay $3,000 at the end of Years 10, 11, and 12. Use a discount rate of 8%.
First, we will determine the future value of the payments:
FV= {A*[(1+i)^n-1]}/i
A= annual payment
FV= {3,000*[(1.08^3) - 1]} / 0.08
FV= $9,732.2
Now, the present value:
PV= FV / (1 + i)^n
PV= 9,732.2 / (1.08^12)
PV= $3,867.67
QS 4-20B Recording estimates of future returns LO P6 ProBuilder reports merchandise sales of $92,000 and cost of merchandise sales of $32,200 in its first year of operations ending June 30. It makes fiscal-year-end adjusting entries for estimated future returns and allowances equal to 2% of sales, or $1,840, and 2% of cost of sales, or $644. a. & b. Prepare the June 30 fiscal-year-end adjusting journal entry for future returns and allowances related to sales and cost of sales.
Answer:
a. June 30
Dr Sales returns and allowances $1,840
Cr Sales refund payable $1,840
b. June 30
Dr Inventory returns estimated $640
Cr Cost of goods sold $640
Explanation:
a. & b. Preparation of the June 30 fiscal-year-end adjusting journal entry for future returns and allowances related to sales and cost of sales.
a. June 30
Dr Sales returns and allowances $1,840
Cr Sales refund payable $1,840
($92,000 × 2%)
(To record future returns and allowances related to sales)
b. June 30
Dr Inventory returns estimated $640
Cr Cost of goods sold $640
($32,000 × 2%)
(To record cost of sales)
a.To record expected sales to be refunded ($92,000 × 2%)
To record expected sales to be refunded= $1,840
b. To record expected cost of returns= ($32,000 × 2%)
To record expected cost of returns = $640
RSTN Co. produces its product through two sequential processing departments. Direct materials and conversion are added to the product evenly throughout the process. The company uses monthly reporting periods for its process costing system. During October, the company finished and transferred 150,000 units of its product to Department 2. Of these units, 30,000 were in process at the beginning of the month and 120,000 were started and completed during the month. The beginning work in process inventory was 30% complete. At the end of the month, the work in process inventory consisted of 20,000 units that were 80% complete.
Required:
Compute the number of equivalent units of production for October. Use the FIFO method.
Answer:
RSTN Co.
The number of equivalent units of production for October are:
Materials Conversion
Equivalent units of production 140,000 157,000
Explanation:
a) Data and Calculations
Units Materials Conversion
Beginning work in process 30,000 100% 30%
Units started and completed 120,000 100% 100%
Ending work in process 20,000 100% 80%
Equivalent units using FIFO method:
Units Materials Conversion
Beginning work in process 30,000 0 (0%) 21,000 (70%)
Units started and completed 120,000 120,000 (100%) 120,000 (100%)
Ending work in process 20,000 20,000 (100%) 16,000 (80%)
Equivalent units of production 140,000 157,000
Which of the following is an an example of a sunk cost?
a. Jossie purchases a textbook online but returns it because it is the wrong edition
b. Maria goes to a lunch vending machine to get a quick snack. In her haste, she mistakenly pushes the wrong buttons and gets a wheatgrass sandwich instead of hot pocket she was craving.
c. Kennys new smartphone stops working, but it is still under warranty, so he is able to have it repaired at no cost.
d. Antonio goes to the movies. After the opening credits, he realizes he is in the wrong theater. He informs the manager and is able to get a refund.
Answer:
Option b is correct.
Explanation:
Option b is correct.
The sunk cost is the cost that has been incurred and which can not be recovered. Thus, anycost that can not be recovered is called the sunk cost. Therefore, the option 'b' that states pushing wrong button and getting a wheatgrass sandwich is the sunk cost because it can not be returned.
A justification for job training programs is that they improve worker productivity. Suppose that you are asked to evaluate whether more job training makes workers more productive. However, rather than having data on individual workers, you have access to data on manufacturing firms in Ohio. In particular, for each firm, you have information on hours of job training per worker (training) and number of non-defective items produced per worker (output).
Required:
a. Carefully state the ceteris paribus thought experiment underlying this policy question.
b. Does it seem likely that a firm’s decision to train its workers will be independent ofworker characteristics? What are some of those measurable and unmeasurable workercharacteristics?
c. Name a factor other than worker characteristics that can affect worker productivity.
d. If you find a positive correlation between output and training, would you haveconvincingly established that job training makes workers more productive? Explain.
Solution :
a). There is a way to state the question :
If there are two firms, firm A and firm B. Both the forms are same in all the respects but differ in only one thing, that firm A provides job training 1 hour per worker more than the number of hours of training of firm B, by how much the output of firm A would differ than the output from firm B?
b). The manufacturing firms that are located in Ohio will provide the job training based on the characteristics of workers. Some of the determining factors includes years of schooling, experience in a particular job, etc. The firms can even consider the worker's age, race or gender. The training will be provided to the less efficient workers based on their ability.
c). The amount of the capital as well as the technology that is available to the workers would affect the output of the firm. Thus the firms having the same kind of employees would have different outputs when the firms used different technology or different amount of capital.
d). No, unless the training is randomly assigned. The factors are listed above which can contribute to the finding of a positive correlation between the output and the training even when the job training does not improve the productivity of the worker.
Global institutions are needed to _____. Multiple choice question. shift economic power away from national governments prevent firms from offshoring their production activities stabilize and monitor the global marketplace promote the raising of barriers to cross-trade and investment
Answer:
stabilize and monitor the global marketplace
Explanation:
In simple words, global institutions are the organisations that work for the regulation and monitoring of certain activities all around the world. International monetary fund and International labor authority are two of the prime examples of such institutions.
In respect of market place, the primary goal of such institutions is to stabilize the market place so that it can run more efficiently.
The specific actions to be taken in implementing a strategy.
The correct answer to this open question is the following.
Although there are no options attached we can say the following.
In general terms, the specific actions to be taken in implementing a strategy are the following.
First of all, the manager has to clearly define the strategic plan and its content.
Then, define the general goal, and specific goals. It is highly recommended to use the SMART formula. Goals have to be specific, measurable, attainable, realistic, and time-bound.
Then, define the Key Performing Indicators or KPI's. These will serve to define the results the company expects to accomplish with the plan.
Create a series of programs and specific actions to reach the goals.
Then, to implement the tactics or specific programs.
Monitoring the programs and then evaluate the results to provide feedback.
Agreement and disagreement among economists
Suppose that Yakov, an economist from a business school in Georgia, and Ana, an economist from a public television program, are arguing over budget deficits. The following dialogue shows an excerpt from their debate:
Ana: Most people recognize that the budget deficit has been rising considerably over the last century. We need to find the best course of action to remedy this situation.
Yakov: I believe that a cut in income tax rates would boost economic growth and raise tax revenue enough to reduce budget deficits.
Ana: I actually feel that raising the top income tax rate would reduce the budget deficit more effectively.
The disagreement between these economists is most likely due to ___.
Despite their differences, with which proposition are two economists chosen at random most likely to agree?
A. Rent cellings reduce the quantity and quality of available housing.
B. Immigrants receive more in government benefits than they contribute in taxes.
C. Having a single income tax rate would improve economic performance.
Answer:
differing opinions on the point we are on the Laffer Curve
A
Explanation:
The Laffer Curve is a supply side economic theory developed by Arthur Laffer in 1974.
The curve depicts the relationship between tax rates and tax revenue
According to this theory, higher income tax rate reduces the incentive of labour to work and invest due to the fact that labour would have to pay higher tax. This means that at some point, increase in the tax rate would decrease government revenue rather than increase it.
The theory submits that there is an optimal tax rate at which tax income is maximised. Once this point is surpassed, increase in tax rate would reduce government revenue
Price ceiling is when the government or an agency of the government sets the maximum price for a product. It is binding when it is set below equilibrium price.
Effects of a binding price ceiling
1. It leads to shortages
2. it leads to the development of black markets
3. it prevents producers from raising price beyond a certain price
4. It lowers the price consumers pay for a product. This increases consumer surplus
A rent ceiling would lead to shortage of houses and a reduction of the quality of available housing.
g An increase in the interest rate: has no effect on investment. may be caused by a drop in investment demand. increases planned investment because people who make money from interest have more money to invest. reduces planned investment because the interest rate is the cost of borrowing to finance investment projects.
Answer:
reduces planned investment because the interest rate is the cost of borrowing to finance investment projects.
Explanation:
There is an inverse relationship between interest rate and planned investment.
The higher interest rate is, the lower planned investment. This is because interest rate is the cost of borrowing. An higher interest rate means the cost of borrowing would increase.
On the other hand, a lower interest rate increases planned investment. This is because a lower interest rate means that the cost of borrowing would reduce.
In the 1990s there was tremendous interest by government officials in breaking up Microsoft into two companies. One of the companies would have produced operating systems for computers, like Microsoft Windows. The other company would have produced software for this operating system, like Microsoft Excel. Which concept from class could Microsoft use to argue that this breakup would increase total costs
Answer: Economies of scope
Explanation:
Economies of scope refers to the
proportionate saving that's gained when a company produces two or more goods, such that the cost of producing the goods is less than the cost incurred when each good is separately produced.
In such case, the average total cost of production will reduce as a result of the rise in the number of different goods that are produced.
Therefore, the concept that Microsoft use to argue that this breakup would increase total costs is Economies of scope
In the 2008 global financial crisis, many investors considered the US economy a safe place to move their assets What is the predicted impact of this inflow of financial capital to the US, which is a large, open economy, on the US interest rate and the US exchange rate, holding other factors constant Illustrate your answer graphically and explain in words.
Answer:
Good for US interest rate and the US exchange rate.
Explanation:
The predicted impact of this inflow of financial capital to the United states of America is good for the economy as well as for US interest rate and the US exchange rate when the movement of assets occur to the United states of America. The economy of the United states of America gets to be better due to this action of investors. This 2008 global financial crisis greatly damaged the economy of United states of America so this action bring some betterment in the economy.
Suppose that a Country Club is considering what price to charge for adults. They know that if they charge a price of $100 then 70 adults will join and if they charge a price of $120 then 50 adults will join. What is the absolute value of the price elasticity of demand for adults at this Country Club
Answer:
1.43
Explanation:
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
Price =120 /100 - 1 = 0.2
Quantity = 50/ 70 - 1 = 0.2857
0.2857 / 0.2 = 1.43
If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes.
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
Demand is unit elastic if a small change in price has an equal and proportionate effect on quantity demanded.
Infinitely elastic demand is perfectly elastic demand. Demand falls to zero when price increases
Perfectly inelastic demand is demand where there is no change in the quantity demanded regardless of changes in price
p = 0,2
=0.2857
Marquis is interested in the relationship between drinking coffee and esophageal cancer. He decides to look at surveys for the Lehman College Class of 2019 as a source of data. He tabulates the total cases of esophageal cancer that were reported as well as those members of the class who did not report esophageal cancer. He then calls all of those people and asks them if they can remember drinking coffee in 2010 and, if yes, about how much coffee did they drink daily, among other questions related to potential exposures, i.e. exercise, BMI, stress, etc. Which form of bias is likely to impact the measure of association reported in Marquis’s study?
a. sampling bias
b. recall bias
c. interviewer bias
Answer:
Option B
Explanation:
In simple words, Recall bias can be understood as the systematic mistake that happens when individuals do not properly recall or omit information from past events or situations. The reliability and quantity of recollections can be impacted by future activities and situations.
In the given case, the interview asking the sample something that is not easy to remember. Drinking coffee and how much did they drink is not a valid question as this is too fragile to remember.
Which form of business entity is NOT a legal entity separate and apart from its owner?
A. S corporation.
в.Sole proprietorship
C. Corporation
D. Partnership
Answer:
B Sole proprietorship
Explanation:
A sole proprietorship there is no separation between the owner and the business structure thus the business does not have its own legal entity.
The financial statement that provides a snapshot view of the financial condition of a business at a point in time is the:
Answer:
balance sheet
Explanation:
Balance sheet can be regarded as financial statement which gives reports of the liabilities, equity of shareholders as well as assets of the company at a specific point in time, It provides a basis that can be used in computing rates of return as well as evaluating its capital structure.
It should be noted that balance sheet is
financial statement that provides a snapshot view of the financial condition of a business at a point in time
Joseline waited until December 12, 2019, to file her 2018 Form 1040 return. She did not request an extension. Her balance due for 2018 is $461. What is her failure to file penalty
Answer: $207.45
Explanation:
The latest date that Josephine should have filed her taxes by was April 15th 2019.
She instead waited till December 12, 2019.
9 partial and full months have passed since that time so her penalty will be for 9 months.
Penalty is 5% of the balance due:
= 461 * 5% * 9
= $207.45
On November 1, Alan Company signed a 120-day, 12% note payable, with a face value of $10,800. What is the maturity value of the note on March 1? (Use 360 days a year.)
a) $11,016
b) $10,800
c) $11,088
d) $11,232
e) $10,944
Answer: $11232
Explanation:
The maturity value of the note on March 1 will be calculated as thus:
Face value = $10800
Interest on note = $10800 × 12% × 120/360 = $432
Maturity value will now be:
= Face value + Interest on note
= $10800 + $432
= $11232
If the price level is 100 for 1996 and the price level is 103.3 in 1998, a nominal GDP in 1998 of $8,800 billion would mean that real GDP in 1998 (in 1996 prices) would be closest to:_______
a. $9.090.4 billion.
b. $8,518.9 billion.
c. $8,800 billion.
d. $8696.7 billion
Answer: b. $8,518.9 billion.
Explanation:
Nominal GDP is calculated with current prices which means that the effects of inflation are present.
Real GDP removes this effect by basing the GDP calculation on the prices of a previous period:
Real GDP = Nominal GDP * 100/ Price level
= 8,800 * 100/ 103.3
= $8,518.877
= $8,518.9 billion
Identify the two events from the following that cause a Petty Cash account to be credited in a journal entry. (Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) check all that apply Fund amount is being reduced.unanswered Fund amount is being increased.unanswered Fund is being eliminated.unanswered Fund is being established.
Answer:
Fund amount is being reduced.
Fund is being eliminated.
Explanation:
For example, when you are recording the expenses paid using the petty cash fund, you debit the expenses and credit the petty cash fund account. This also applies when the petty cash fund is too large and the company wants to reduce it; cash will be debited and the petty cash fund account will be credited.
n January 1, 2018, the Shagri Company began construction on a new manufacturing facility for its own use. The building was completed in 2019. The only interest-bearing debt the company had outstanding during 2018 was long-term bonds with a book value of $11,600,000 and an effective interest rate of 11%. Construction expenditures incurred during 2018 were as follows: January 1 $ 660,000 March 1 696,000 July 31 576,000 September 30 760,000 December 31 460,000 Required: Calculate the amount of interest capitalized for 2018.
Answer:
$183,700
Explanation:
Calculation to determine the amount of interest capitalized for 2018.
First step is to calculate the Accumlated expenditure
Date Expenditure * Weight = Average
January 1 660000 * 12/12 =660,000
March 1 696000 * 10/12 = 580,000
July 31 576000 * 5/12 = 240,000
September 30 760000 * 3/12 =190,000
December 31 460000 * 0/12 = 0
Accumulated expenditure=660,000+580,000+240,000+190,000
Accumulated expenditure=$1,670,000
Now let determine the amount of interest capitalized for 2018
Interest capitalized for 2018=$1,670,000 * 11%
Interest capitalized for 2018=$183,700
Therefore the amount of interest capitalized for 2018 is $183,700
Larned Corporation recorded the following transactions for the just completed month.
$76,000 in raw materials were purchased on account.
$74,000 in raw materials were used in production. Of this amount, $65,000 was for direct materials and the remainder was for indirect materials.
Total labor wages of $123,000 were paid in cash. Of this amount, $101,500 was for direct labor and the remainder was for indirect labor.
Depreciation of $195,000 was incurred on factory equipment.
Required:
Record the above transactions in journal entries.
Answer and Explanation:
The journal entries are shown below:
Raw materials inventory $76,000
To Accounts payable $76,000
(being the raw material purchased on account)
Work in process inventory $65,000
Manufacturing overhead $9,000
To Raw materials inventory $74,000
(Being the work in process and overhead is recorded)
Work in process inventory $101,500
Manufacturing overhead $21,500
To Cash $123,000
(being cash paid is recorded)
Manufacturing overhead $195,000
To Accumulated depreciation-Equipment $195,000
(being the manufacturing overhead is recorded)
Match each of the following definitions of costs to the cost classifications.
1. This cost is the combined amount of all the other costs.
2. This cost remains constant over a limited range of volume; when it reaches the end of its limited range, it changes by a lump sum and remains at that level until it exceeds another limited range.
3. This cost has a component that remains the same over all volume levels and another component that increases in direct proportion to increases in volume.
4. This cost increases when volume increases, but the increase is not constant for each unit produced.
5. This cost remains constant over all volume levels within the productive capacity for the planning period.
6. This cost increases in direct proportion to increases in volume; its amount is constant for each unit produced.
Answer:
1. This cost is the combined amount of all the other costs. ⇒ TOTAL COST.
2. This cost remains constant over a limited range of volume; when it reaches the end of its limited range, it changes by a lump sum and remains at that level until it exceeds another limited range. ⇒ STEP-WISE COST.
3. This cost has a component that remains the same over all volume levels and another component that increases in direct proportion to increases in volume. ⇒ MIXED COST
4. This cost increases when volume increases, but the increase is not constant for each unit produced. ⇒ CURVELINEAR COST.
5. This cost remains constant over all volume levels within the productive capacity for the planning period.⇒ FIXED COST.
6. This cost increases in direct proportion to increases in volume; its amount is constant for each unit produced. ⇒ VARIABLE COST.
On December 15, 2016, the board of directors of Cross Corporation declared a cash dividend, payable on January 8, 2017, of $0.94 per share on the 2,000,000 common shares outstanding. On December 15, 2016, Cross Corporation should:__________.a. not prepare a journal entry because the event had no effect on the corporation's financial position until 2017.b. decrease cash $1.88 million and decrease retained earnings $1.88 million.c. decrease retained earnings $1.88 million and increase expenses $1.88 million.d. decrease retained earnings $1.88 million and increase liabilities by $1.88 million.
Answer:
d. decrease retained earnings $1.88 million and increase liabilities by $1.88 million
Explanation:
The Cavendish Company is considering a project with an initial investment of $8 million that has an accounting rate of return of 25%. The project will generate an annual net cash flow of $1.75 million and annual net operating income of $2 million. What is the project's payback period?
Answer:
4 years and 2 months
Explanation:
The project's payback period is the length of time that the future cash flows take to equal the initial investment of the project.
Initial Investment = $8 million
Annual cash flows = $1.75 million
It will take 4 years and 2 months ($1 million /$8 million x 12) for annual cashflows to equal the Initial Investment of $8 million.
An overall management objective is to:
a. minimize the number of sales transactions
b. minimize the total amount of accounts receivable
c. minimize the time from the beginning of the selling process to the end of cash collections
d. maximize the amount of float
Answer:
c. minimize the time from the beginning of the selling process to the end of cash collections
Explanation:
Management does not aim to minimize sales transactions or total amount of accounts receivable. Neither does it aim, to hold excess cash through cash float. Management aims to minimize the time from the beginning of the selling process to the end of cash collections so as to be liquid and avoid bad debts.
Assume each firm within an industry has similar operations and financial structures as the industry as a whole. Which one of these statements related to beta is correct given this assumption?
a. Industry betas are less reliable than firm betas.
b. Firms should use their own betas rather than the industry beta.
c. Betas should be computed on an annual basis.
d. The error in beta estimation for a single security exceeds the error for a portfolio of securities.
e. All firms in the industry will have the same beta.
Answer: D. The error in beta estimation for a single security exceeds the error for a portfolio of securities.
Explanation:
If each firm within an industry has identical operations and thesame financial structures as the industry as a whole, then the error in beta estimation for a single security exceeds the error for a portfolio of securities.
It should be noted that all the firms in the industry will not have the same beta. Also, betas should not be computed on an annual basis. Therefore, the correct option is D.
Classify the transaction as either an operating activity, an investing activity, a financing activity, or a noncash activity:
1. Common stock is sold for cash
2. Bonds payable are issued for cash at a discount
3. Interest on a short-term note receivable is collected
4. Merchandise is sold to customers for cash
5. Cash paid to purchase inventory
Answer:
1. financing activity
2. financing activity
3. investing activity
4. operating activity
5. operating activity
Explanation:
Operating Activities includes Firms activities in sale and purchase of Inventory.
Investing Activities shows cash resulting from acquiring and sale of assets as well as receipt of interest on the investments.
Financing Activities shows cash resulting from raising capital or debt and the repayment of debt.
The ________ function is responsible for making sure customers are aware of the company's products. Group of answer choices
Answer:
sales and marketing.
Explanation:
The sales and marketing function is essential to ensure that the customer knows and has access to the company's products through an effective communication, distribution and customer service system.
There needs to be planning and research to identify who your potential consumer is, what are their needs and preferences, where they usually buy the product, how often, what their income, which media they access most, etc., so that there is the correct allocation of resources for advertising, product distribution and other variables, so that the product is available to the customer in the right place, in the right quantity, at the right time and quality.
Which of the following entries could be considered as an adjusting entry? Group of answer choices Debit to Cash and Credit to Revenues Debit to Cash and Credit to Liabilities Credit to Cash and Debit to Expenses Debit to Expenses and Credit to Liabilities
Answer:
The entry that could be considered as an adjusting entry is:
Debit to Expenses and Credit to Liabilities
Explanation:
For example, to accrue salaries expenses in an accounting period when the cash payments have not been made, the Salaries Expenses account is debited with the amount of the unpaid salaries while the corresponding credit entry goes to the Salaries Payable account. Depreciation expense is also debited while the corresponding credit entry is made in the accumulated depreciation account.
A mutual fund sold $58 million of assets during the year and purchased $64 million in assets. If the average daily assets of the fund were $216 million, what was the fund turnover
Answer: 26.85%
Explanation:
Based on the information given in the question, the fund turnover will be calculated thus:
Funds sold = $58 Million
Average Daily Assets = $216 Million
Fund Turnover = Fund Sold / Average Daily Assets
Fund Turnover = $58 Million / $216 million
= 26.85%
