Answer:
quality may sufferexcess output mayExplanation:
Note that quality does not necessarily come quickly, and so even though eliminating the queue of work dramatically quickens the time it takes apart to flow through the system, it may result in excess output and poor quality.
Take for a stadium that has no entrance way (or doors) that is hosting an event, evidently it is less likely there will be a queue, as everyone would be rushing in quickly, but with possible consequences of overpopulation etc.
A customer wishes to purchase $100,000 face amount of municipal bonds that the broker-dealer does not have in inventory. Under MSRB rules, the firm should:
Answer:
contact enough dealers so that a reasonable market quote is obtained . when a municipal dealer acts in an agency capacity, the price charged must be representative of the market for that type of security. There is no requirement to obtain a pre-set number of quotes (as a contrast, FINRA requires that a minimum of 3 quotes be obtained for non-NASDAQ OTC issues, meaning OTCBB or Pink Sheet issues), nor is there a requirement to direct the customer to a dealer that physically has those bonds. The dealer would not sell short the bonds to the customer, since short covering is very difficult in the thinly traded municipal market.
Which of the following statements regarding fiscal policy are true according to the macroeconomic consensus in the United States?
a. Congress, not the Federal Reserve, should be in charge of monetary policy.
b. Expansionary monetary policies should be used to keep unemployment below its natural rate.
c. Monetary policy should focus on price stability.
Answer: Monetary policy should focus on price stability.
Explanation:
The statements regarding fiscal policy that is true according to the macroeconomic consensus in the United States is that monetary policy should focus on price stability.
The statements that Congress, not the Federal Reserve, should be in charge of monetary policy and that Expansionary monetary policies should be used to keep unemployment below its natural rate are both wrong.
Garcia Co. sells snowboards. Each snowboard requires direct materials of $105, direct labor of $35, and variable overhead of $50. The company expects fixed overhead costs of $645,000 and fixed selling and administrative costs of $111,000 for the next year. It expects to produce and sell 10,500 snowboards in the next year.
Required:
What will be the selling price per unit if Garcia uses a markup of 15% of total cost?
Answer:
Selling price = $301.3
Explanation:
The selling price would be determined by adding the total unit cost to the mark- up.
Mark up is the proportion of cost that is to be earned as profit.
Selling price = Total unit cost + Profit
Profit = 25% × unit cost
Selling price = Unit cost + Mark-up
Selling price = Unit cost + (15%× unit cost)
Total unit cost =Variable cost + unit fixed cost
Total fixed cost = 645,000 + 111,000 = 756,000
Unit fixed cost = $756,000 /10,500 =×72
Total unit cost = 105 + 35 + 50 + 72 = 262
Selling price = 262 + ( 15% + 262) = 301.3
Selling price = $301.3
Discounted payback period. Given the following two projects and their cash flows, LOADING..., calculate the discounted payback period with a discount rate of %, %, and %. What do you notice about the payback period as the discount rate rises? Explain this relationship. With a discount rate of %, the cash outflow for project A is:
Answer:
the numbers are missing, so I looked for a similar question:
Cash Flow A B
Cost $10,000 $105,000
Cash flow year 1 $3,571 $21,000
Cash flow year 2 $3,571 $10,500
Cash flow year 3 $3,571 $42,000
Cash flow year 4 $3,571 $31,500
Cash flow year 5 $3,571 $5,250
Cash flow year 6 $3,571 $0
With a discount rate of 5%, 10% & 15%
Discounted cash flows for project A:
5% 10% 15%
Cost $10,000
Cash flow year 1 $3,571 $3,401 $3,246 $3,105
Cash flow year 2 $3,571 $3,239 $2,951 $2,700
Cash flow year 3 $3,571 $3,085 $2,683 $2,348
Cash flow year 4 $3,571 $2,938 $2,439 $2,042
Cash flow year 5 $3,571 $2,798 $2,217 $1,775
Cash flow year 6 $3,571 $2,665 $2,016 $1,544
discounted payback period:
5% = 3.09 years
10% = 3.46 years
15% = 3.9 years
The higher the discount rate, the longer the discounted payback period.
Discounted cash flows for project B:
5% 10% 15%
Cost $105,000
Cash flow year 1 $21,000 $20,000 $19,091 $18,261
Cash flow year 2 $10,500 $9,524 $8,678 $7,940
Cash flow year 3 $42,000 $36,281 $31,555 $27,616
Cash flow year 4 $31,500 $25,915 $21,515 $18,010
Cash flow year 5 $5,250 $4,114 $3,260 $2,610
discounted payback period:
5% = more than 5 years, the project's NPV is negative -$9,166.37
10% = more than 5 years, the project's NPV is negative -$20,901.42
15% = more than 5 years, the project's NPV is negative -$30,563.54
A large furniture and appliance rental business is considering sponsorship options. It has brought together vice-presidents from the various functional areas of the company to determine which sponsorships will most effectively reach the rental company's prospective customers. The rental company has established a:
a. cross-functional team
b. horizontally-organized team
c. vertically-organized team
d. problem-resolution team
e. project committee
Answer:
a. cross-functional team
Explanation:
In this case, the most appropriate is the use of a cross-functional team.
This team is formed by several professionals with knowledge, techniques, skills and resources to help the company achieve its goals and objectives.
The benefits of forming a cross-functional team is to aggregate the potential of each member in a common objective, which ensures greater flexibility of ideas, greater innovation, greater exchange of experiences, which guarantees greater team engagement, greater possibility of designing solutions and greater efficiency in organizational processes.
Jiminy’s Cricket Farm issued a bond with 30 years to maturity and a semiannual coupon rate of 4 percent 2 years ago. The bond currently sells for 107 percent of its face value. The company’s tax rate is 21 percent. The book value of the debt issue is $60 million. In addition, the company has a second debt issue on the market, a zero coupon bond with 10 years left to maturity; the book value of this issue is $35 million, and the bonds sell for 76 percent of par.
Required:
a. What is the company’s total book value of debt?
b. What is the company’s total market value of debt?
c. What is your best estimate of the aftertax cost of debt?
Answer:
a. What is the company’s total book value of debt?
total book value of debt = $60,000,000 + $35,000,000 = $95,000,000
b. What is the company’s total market value of debt?
total market value of debt = ($60,000,000 x 1.07) + ($35,000,000 x 0.76) = $64,200,000 + $26,600,000 = $90,800,000
c. What is your best estimate of the after tax cost of debt?
weight of debt (using market value):
$64,200,000 / $90,800,000 = 70.7%
$26,600,000 / $90,800,000 = 29.3%
YTM bond I = {1,200,000 + [(60,000,000 - 64,200,000)/56]} / [(60,000,000 + 64,200,000)/2] = 1,125,000 / 62,100,000 = 1.8115 x 2 = 3.62%
YTM bond II = (35 / 26.6)¹/¹⁰ - 1 = 2.78%
after tax cost of debt = (0.707 x 3.62% x 0.79) + (0.293 x 2.78% x 0.79) = 2.02% + 0.64% = 2.66%
Consider the following information on large-company stocks for a period of years. Series Arithmetic Mean Large-company stocks 12.1 % Inflation 3.4A. What was the arithmetic average annual return on large-company stocks in nominal terms?
B. What was the arithmetic average annual return on large-company stocks in real terms?
Answer:
a. 12.1 %
b. 8.41%
Explanation:
a. The arithmetic average annual return on large-company stocks in nominal terms is already stated in the table as 12.1%.
This is because it was not yet adjusted for inflation making it nominal.
b. The arithmetic average annual return on large-company stocks in real terms can be expressed by;
Real Return = [(1 + Nominal rate) / (1 + Inflation rate)] - 1
= (( 1 + 12.1%) / ( 1 + 3.4%)) - 1
= (1.121/1.034) - 1
= 1.0841 - 1
= 8.41%
The Bob Buckham Senior Center, a not-for-profit entity, serves a hot meal to senior citizens every Friday evening. All the food is donated by a local supermarket. All the food preparation and serving is done by local volunteers. If the Center had to pay for the food, it would need to spend $10,000 a year. If it had to pay for the food preparation and service, it would need to spend $12,000 a year. How should it report these contributions in its financial statements?
Food | Food preparation and service
a. Disclose in the notes | Disclose in the notes
b. Disclose in the notes | Report $12,000 revenue and expense
c. Report $10,000 revenue and expense | Disclose in the notes
d. Report $10,000 revenue and expense | Report $12,000 revenue and expense
Answer:
c. Report $10,000 revenue and expense | Disclose in the notes
Explanation:
Not-for-profit entities must report the fair value of all the goods they receive as donations. in this case, they would have to report the $10,000 worth of food received from a local supermarket. But they are not required to report the value of volunteer work, they only have to disclose it on the footnotes of their financial statements.
Expected return and standard deviation. Use the following information to answer the questions: LOADING.... a. What is the expected return of each asset? b. What is the variance of each asset? c. What is the standard deviation of each asset? Hint: Make sure to round all intermediate calculations to at least seven (7) decimal places. The input instructions, phrases in parenthesis after each answer box, only apply for the answers you will type. a. What is the expected return of asset A?
Answer and Explanation:
a. The computation of expected return of each assets is shown below:-
Expected Return on Asset A in state is
= 0.39 × 0.02 + 0.45 × 0.02 + 0.16 × 0.02
= 0.02
Expected Return on Asset B in state is
= 0.39 × 0.25 + 0.45 × 0.06 + 0.16 × -0.04
= 0.1181
Expected Return on Asset C in state is
= 0.39 × 0.35 + 0.45 × 0.19 + 0.16 × -0.22
= 0.1868
b. The computation of variance of each asset is shown below:-
Variance of Assets A is
= 0.39 × (0.02 - 0.020)^2 + 0.45 × (0.02 - 0.020)^2 + 0.16 × (0.02 - 0.020)^2
= 0
Variance of Assets B is
= 0.39 × (0.25 - 0.1181)^2 + 0.45 × (0.06 - 0.1181)^2 + 0.16 × (-0.04 - 0.1181)^2
= 0.0123
Variance of Assets C is
= 0.39 × (0.35 - 0.1868)^2 + 0.45 × (0.19 - 0.1868)^2 + 0.16 × (-0.22 - 0.1868)^2
= 0.0369
c. The computation of standard deviation of each asset is shown below:-
Standard Deviation of A is
= (0.39 × (0.02 - 0.020)^2 + 0.45 × (0.02 - 0.020)^2 + 0.16 × (0.02 - 0.020)^2)^0.5
= 0
Standard Deviation of B is
= (0.39 × (0.25 - 0.1181)^2 + 0.45 × (0.06 - 0.1181)^2 + 0.16 × (-0.04 - 0.1181)^2)^0.5
= 0.1109
Standard Deviation of C is
= (0.39 × (0.35 - 0.1868)^2 + 0.45 × (0.19 - 0.1868)^2 + 0.16 × (-0.22 - 0.1868)^2)^0.5
= 0.1920
Buckson Framing's cost formula for its supplies cost is $1,350 per month plus $18 per frame. For the month of June, the company planned for activity of 716 frames, but the actual level of activity was 713 frames. The actual supplies cost for the month was $14,820. The supplies cost in the flexible budget for June would be closest to:
Answer:
c. $ 14,238
Explanation:
Computation of costs in the flexible budget
Planned activity 716 units
Budgeted cost per unit $ 18 per frame
Total planned variable cost - 716 units * $ 18 $ 12,888
Fixed monthly cost $ 1,350
Total supplies cost in flexible budget for June $ 14,238
The other information regarding the actual costs and actual production are not required for determining the budgted cost for supplies.
During August, Boxer Company sells $348,000 in merchandise that has a one year warranty. Experience shows that warranty expenses average about 5% of the selling price. The warranty liability account has a credit balance of $11,000 before adjustment. Customers returned merchandise for warranty repairs during the month that used $7,600 in parts for repairs. The entry to record the estimated warranty expense for the month is:
Answer:
Dr Estimated Warranty Liability $8,600
Cr Spare Parts Inventory $8,600
Explanation:
The estimated warranty claim is worth $7,600 which means that the warranty claim must be debited by this amount as it was previously forecasted to be at $11,000 and in this month, the claim was worth $7,600. So decrease in warranty liability is necessary. Furthermore, the Spare Parts Inventory would be credited as the Spare parts would be used to fix the inventory which must be of $7,600 in value.
The double entry to record Warranty Repairs would be as under:
Dr Estimated Warranty Liability $8,600
Cr Spare Parts Inventory $8,600
Ballpark has shares of par common stock outstanding. Ballpark announces a stock split of for1. What is the effect of the split?
Answer:
The answer is 'it increases the number of shares outstanding'
Explanation:
Stock split increases the number of shares outstanding. It causes dilution of earnings per share.
For example, ABC Inc. has 50,000 shares outstanding and it announces a stock split of 3-for- 1.
This means that any shareholder that has 1 will exchange that 1 share for 3 shares. So at the end of the stock split the total number of shares outstanding will be 150,000 shares (50,000 x 3)
A cloth manufacturing firm is deciding whether or not to invest in new machinery. The machinery costs $45,000 and is expected to increase cash flows in the first year by $25,000 and in the second year by $30,000. The firm’s current fixed costs are $9,000 and current marginal cost are $15. The firm currently charges $18 per unit.
Required:
If the interest rate is 5% then. what is the present value of the cash flows?
Answer:
$51,020.40
Explanation:
We use the formula PV = FV * (1 + r)^n for finding the present value
There are two cash flows, one that occur in year 1 at $25,000 and second that occur in year 2 at $30,000.
Find the PV of this cash flow at r = 5% and n = 1 and 2 =
25000(1+5%)^-1 + 30000(1 + 5%)^-2
25,000(1+0.05)^-1 + 30,000(1 + 0.05)^-2
25,000(1.05^)-1 + 30,000(1.05)^-2
25,000(0.952381) + 30,000(0.907029)
23,809.525 + 27,210.87
=$51,020.40
Thus, the present value of the cash flows is $51,020.40
You must decide between $25,000 in cash today or $30,000 in cash to be received two years from now. If you can earn 8 percent interest on your investments, which is the better deal?
Answer:
The deal to receive $30000 is better.
Explanation:
To find the better deal we need to calculate the present value of $30000 and then compare it with the amount $25000. If the amount is greater than the $25000, then the amount should be received after the 2 years.
The given time period (n )= 2
Interest rate (r ) = 8%
The amount received after 2 years = $30000
[tex]\text{Present value of money} = \frac{Future \ value}{(1 + r)^n } \\= \frac{30000}{(1+0.08)^2} \\= $25720.16[/tex]
Since the amount is more than $25000 so the deal to receive the money after 2 years will be better.
Yellowstone Corporation has just announced the repurchase of $125,000 of its stock. The company has 39,000 shares outstanding and earnings per share of $3.29. The company stock is currently selling for $76.09 per share. What is the price–earnings ratio after the repurchase?
Answer:
The price–earnings ratio after the repurchase is 22.18
Explanation:
First calculate Numbers of new shares
New Shares = Old Shares - ( Repurchased Shares / Price per share )
New Shares = 39,000 - ( $125,000 / $76.09 )
New Shares = 39,000 - 1,642.79
New Shares = 37,357.21 shares
New compute the old earning
Old Earning = EPS x Numbers of old shares = $3.29 x 39,000 = $128,310
New compute revised Earning per share
Revised EPS = Earning / New shares = $128,310 / 37,357.21 shares = $3.43
Now we need to calculate the Price earning ratio
P/E Ratio = Price per share / Revised earning per share = $76.09 / $3.43 = 22.18 times
If the current interest rate is 5% and your semi-annual coupon paying bond has a duration of 5.33 years, how much will the price of the bond change if the interest rate increases by 1 basis point?
Answer:
Percentage change in price = -5.33 * 0.00005
Explanation:
Percentage change in price = - modified duration * (Change in yield in BP/100)
Percentage change in price = -5.33 * ((0.01/2)/100)
Percentage change in price = -5.33 * (0.005/100)
Percentage change in price = -5.33 * 0.00005
Which of the following do you NOT include when calculating the closing balance of PP&E?
a) Cash capital expenditures
b) PP&E acquired through acquisitions
c) PP&E acquired under capital or financing leases
d) Changes in working capital
Answer:
d) Changes in working capital
Explanation:
the formula used for calculating net PP&E is:
Net PP&E = gross PP&E + capital expenditures - accumulated depreciation
PP&E represents fixed assets (plant, property, and equipment).
On the other hand, working capital involves current assets and liabilities such as cash, accounts receivables, accounts payable, inventories, taxes payable, etc.
Drake Manufacturing makes a variety of products, including lawn mowers. 's Lawn Mower Division can use a component, K32, manufactured by 's Electrical Division. The market price for K32 is per unit. The variable cost per unit for K32 in the Electrical Division is $11, while the absorption cost per unit is $12. The divisions at use a negotiated price strategy to set transfer prices between divisions. The Electrical Division has excess capacity. What is the lowest acceptable transfer price to the Electrical Division? What is the highest acceptable transfer price that the Lawn Mower Division would pay?
1. ______the lowest acceptable transfer price to the Electrical Division.
a. $14, the difference between the variable cost and market price.
b. $11, the variable cost.
c. $12, the absorption cost.
d. $25, the market price.
2. ______is the highest acceptable transfer price that the Lawn Mower Division would pay.
a. $14, the difference between the variable cost and market price.b. $11, the variable cost. c. $12, the absorption cost.d. $25, the market price.
Answer:
b. $11, the variable cost.d. $25, the market price.Explanation:
1. The Electrical Division has excess capacity so supplying the Lawn Mower Division can be done and they will still be able to sell to outside customers. They should therefore only charge the variable cost to make component K32 which is $11 as they are in the same company.
2. The highest acceptable transfer price that the Lawn Mower division would pay is the market price of $25. At a price higher than this, it would make no sense to source the component from the Electrical division because the Lawn Mower division could simply source it from the market and save on costs.
A seller has accepted another offer, but your client doesn't want to give up. Even now, she can submit an offer to the seller, called a:
Answer: b. backup offer
Explanation:
A backup offer is one that is made when an offer has already been made by another. With a backup offer, the person offering it is acknowledging that someone else has made another offer that was accepted but they still offer this in case the accepted offer falls through for whatever reason.
If the seller accepts this offer, they will have a contract with the person offering that legally obliges them to sell the good in question to the person offering if the current offer is not honored.
The cost-recovery method of recognizing profit for accounting purposes is permitted if a. collections in the year of sale do not exceed 30% of the total sales price. b. an unrealized profit account is credited. c. there is no reasonable basis for estimating collectibility. d. the method is consistently used for all sales of similar merchandise.
Answer:
Correct Answer:
c. there is no reasonable basis for estimating collectibility.
Explanation:
The cost recovery method of revenue recognition is a concept in accounting that refers to a method in which a business does not recognize income related to a sale until the cash collected exceeds the cost of the good or service sold. When a situation present itself where there is no reasonable basis for estimating collectibility, it justifies the use of the cost recovery method of revenue and profit recognition.
L Corporation produces and sells 15,100 units of Product X each month. The selling price of Product X is $21 per unit, and variable expenses are $15 per unit. A study has been made concerning whether Product X should be discontinued. The study shows that $72,000 of the $101,000 in monthly fixed expenses charged to Product X would not be avoidable even if the product was discontinued. If Product X is discontinued, the annual financial advantage (disadvantage) for the company of eliminating this product should be: Multiple Choice $10,400 ($61,600) ($39,400) $39,400
Answer:
If Product X is discontinued, the company’s overall net operating income would: increase by $61,600
Explanation:
Not drop Drop Difference
Sales 317,100 317,100
(15100*21)
Less: Variable expenses 226,500 226,500
(15,100 * 15)
Contribution margin 90,600 90,600
Less: fixed expenses 101,000 72,000 29,000
Net operating income -$10,400 $61600
Conclusion: If Product X is discontinued, the company’s overall net operating income would: increase by $61,600
Which group would advertisers want to target and with what type of advertisement immediately before a holiday, as opposed to during a non-holiday time
Answer:
in graph it shows that the highest effect is w low content/low motivation/low knowledge
-only tend to be persuaded for a short time and would need the advertisement right before target date
b) group would be persuaded by high content argument but will remain persuaded so do not need to be advertised immediately before the holiday
Explanation:
The federal government has the legal authority to prevent a company from adding products through acquisitions if the acquisition threatens to lessen competition.
A. True
B. False
Answer:
True
Explanation:
One way of determining if acquisitions would lessen competition is through the calculation of the HHI. if the HHI of the industry is more than 1500 before the acquisition and the HHI changes by more than 50 after the acquisition, the government would challenge the merger
People had been expecting the price level to be 140 but it turns out to be 138. Johnson Family Restaurants increases the number of workers it employs. What could explain this
Answer:
neither sticky wage theory nor sticky price theory
Explanation:
People had been expecting the price level to be 140 but it turns out to be 138. Johnson Family Restaurants increases the number of workers it employs. Sticky wage theory nor sticky price theory could explain this.
What makes wages and prices sticky?Sticky wages are a result of a number of factors, including the minimum wage, employee contracts, labor unions, the efficiency wage theory, and the expense of hiring and terminating employees. It is challenging to exit a recession when wages and prices are stuck, creating a vicious cycle.
A theoretical market condition known as "stickiness" occurs when a certain nominal price resists change. Stickiness, also known as price stickiness, is a term that is frequently used to describe market prices even though it frequently refers to wages.
Many economists think that prices are "sticky" and that they change gradually. According to them, this stickiness indicates that changes in the money supply have an effect on the real economy, causing changes in investment, employment, output, and consumption. Policymakers can take advantage of this effect.
Learn more about stickiness here:
https://brainly.com/question/15451888
#SPJ6
Hughey Co. as lessee records a capital lease of machinery on January 1, 2011. The seven annual lease payments of $350,000 are made at the end of each year. The present value of the lease payments at 10% is $1,704,000. Hughey uses the effective-interest method of amortization and sum-of-the-years'-digits depreciation (no residual value). Round to the nearest dollar.
a) Prepare an amortization table for 2 011 and 2012.
b) Prepare all of Hughey's journal entries for 2011.
Answer:
Both requirements are solved below
Explanation:
An amortization table can be made as follows
DATA
Lease term = 7years
annual lease payments = $350,0000
Present value of the leases payment = $1,704,000
Implicit interest rate = 10%
Requirement A Amortization table for 2011 and 2012
Date Annual payment Effective decreased Balance
interest liability $1,704,000
12/31/11 $350,000 $170,400 $179,600 $1524,400
12/31/12 $350,000 $152,440 $197,560 $1,326,840
Requirement B journal entries for 2011
January 1
Entry
DEBIT CREDIT
Leased machinery $1,704,000
Lease liability $1,704,000
December 31
Entry
DEBIT CREDIT
Interest expense $170,400
Lease liability $179,600
Cash $350,000
December 31
Entry
DEBIT CREDIT
Depreciation expense(w) $426,000
Accumulated depreciation $426,000
Working
Sum of the years = (7+6+5+4+3+2+1) = 28
Cost = $1,704,000
Residual value = $0
Estimated life = 7years
Depreciation expense = $1,704,000 x 7/28
Depreciation expense = $426,000
Which of the following statements are TRUE regarding the sale of a long position in a restricted long margin account?
I. 50% of the proceeds of the sale are credited to SMA
II. 100% of the proceeds of the sale are credited to SMA
III. There is a 0% retention requirement of the sale for a restricted account
IV. There is a 50% retention requirement of the sale for a restricted account
a. I and III
b. I and IV
c. II and III
d. II and IV
Answer:
b
Explanation:
50% of the proceeds of the sale are credited to SMA
and
There is a 50% retention requirement of the sale for a restricted account
In answering the question "Which customers are most likely to click on my online ads and purchase my goods?" you are most likely to use which of the following analytic applications?A) customer profitabilityB) propensity to buyC) customer attritionD) channel optimization
Answer:
B) Propensity to buy.
Explanation:
In answering the question "Which customers are most likely to click on my online ads and purchase my goods?" you are most likely to use the propensity to buy.
Propensity to buy in marketing is a predictive model, which is used to measure or determine the chances of a customer being willing to buy a particular product.
In this scenario, to determine the likelihood of a customer clicking on an online advert and purchasing a seller's goods, after visiting a website or receiving promotional information about, it is ideal to use the propensity to buy analytic approach.
Excellent Manufacturers Inc. has a current production level of 20,000 units per month. Unit costs at this level are: Direct materials $0.26 Direct labor 0.40 Variable overhead 0.16 Fixed overhead 0.21 Marketing − fixed 0.25 Marketing/distribution − variable 0.42 Current monthly sales are 18,000 units. Jax Company has contacted Excellent about purchasing 1,550 units at $2.00 each. Current sales would NOT be affected by the one−time−only special order, and variable marketing/distribution costs would NOT be incurred on the special order. What is Ratzlaff Company's change in operating profits if the special order is accepted?
Answer:
The increase in operating profit is $1,829.00.
Explanation:
The rise or fall in the operating income:
= Purchase unit × ( offer price- direct material- direct labor- variable overhead)
The rise or fall in the operating income: = 1550× (2 - 0.26 - 0.4 - 0.16)
The rise or fall in the operating income: = $1829
Therefore the profit will increase by $1829
Here all the fixed cost is not considered because it is a sunk cost and variable and administrative expenses are also not considered because these costs are not going to be incurred for offer.
You want to make a one-time deposit today that will increase in value to $100 at the end of this year. Which rate of interest will allow you to deposit the least amount today to reach this goal
Answer:
The rate of interest is 11.111%
The Deposit should be $90 today.
The future value at the end of this year will be $100.
Explanation:
Future value of $100
Present value of $100 at 11.111% = $100/11.111 = $90
The future value of a deposit today is the value after a period of one year or so periods. The rate of interest produces the discount factor that can calculate the present value of $100. To make a one-time deposit of $90 today will increase in value to $100 using an interest rate of 11.111%.
The following is a list of costs that were incurred in the production and sale of large commercial airplanes:
a. Salary of chief compliance officer of company
b. Power used by painting equipment
c. Instrument panel installed in the airplane cockpit
d. Annual bonus paid to the chief operating officer of the company
e. Turbo-charged airplane engine
f. Interior trim material used throughout the airplane cabin
g. Cost of normal scrap from production of airplane body
h. Hourly wages of employees that assemble the airplane
i. Salary of the marketing department personnel
j. Cost of paving the headquarters employee parking lot
k. Cost of electrical wiring throughout the airplane
l. Cost of electronic guidance system installed in the airplane cockpit
m. Salary of plant manager
n. Cost of miniature replicas of the airplane used to promote and market the airplane
o. Human resources department costs for the year
p. Metal used for producing the airplane body
q. Annual fee to a celebrity to promote the aircraft
r. Hydraulic pumps used in the airplane’s flight control system
s. Yearly cost of the maintenance contract for robotic equipment
t. Prebuilt leather seats installed in the first-class cabin
u. Depreciation on factory equipment
v. Special advertising campaign in Aviation Worldmagazine
w. Oil to lubricate factory equipment
x. Masks for use by painters in painting the airplane body
y. Decals for cockpit door, the cost of which is immaterial to the cost of the final product
z. Salary of chief financial officer
Required:
a. Classify each cost as either a product cost or a period cost.
b. Indicate whether each product cost is a direct materials cost, a direct labor cost, or a factory overhead cost.
c. Indicate whether each period cost is a selling expense or an administrative expense.
Answer:
Correct Answer:
PRODUCT COST:
The following falls under direct material cost:
b. Power used by painting equipment
c. Instrument panel installed in the airplane cockpit
e. Turbo-charged airplane engine
f. Interior trim material used throughout the airplane cabin
l. Cost of electronic guidance system installed in the airplane cockpit.
p. Metal used for producing the airplane body
r. Hydraulic pumps used in the airplane’s flight control system
The following falls under direct labour cost:
j. Cost of paving the headquarters employee parking lot
t. Pre-built leather seats installed in the first-class cabin
y. Decals for cockpit door, the cost of which is immaterial to the cost of the final product
The following falls under factory overhead cost:
u. Depreciation on factory equipment.
PERIOD COST:
The following falls under selling expenses:
g. Cost of normal scrap from production of airplane body
h. Hourly wages of employees that assemble the airplane
i. Salary of the marketing department personnel
m. Salary of plant manager
n. Cost of miniature replicas of the airplane used to promote and market the airplane
o. Human resources department costs for the year
q. Annual fee to a celebrity to promote the aircraft
w. Oil to lubricate factory equipment
x. Masks for use by painters in painting the airplane body
z. Salary of chief financial officer
The following falls under an administrative expenses:
a. Salary of chief compliance officer of company
d. Annual bonus paid to the chief operating officer of the company
s. Yearly cost of the maintenance contract for robotic equipment
v. Special advertising campaign in Aviation Worldmagazine.
Explanation:
