Answer:
2. holding cost is $2
3. EOQ = 500 units
4. Average inventory = 250units
5. total annual hoding cost = $500
6. number of orders is 4
7. total annual inventory = $1000
8. reorder point = 48
9. $2125
Explanation:
2. holding cost = 20% * $10
the holding cost is 20 percent of the purchase price for each unit
= 0.2*10
= $2.00
3. the EOQ
= 2*2000*$125/$2
= 250000
[tex]EOQ=\sqrt{250000}[/tex]
= 500 units
4.average inventory = EOQ/2
= 500/2 = 250 units
5. total annual hoding cost = average inventory * holding cost
= 250*2
= $500
6. number of orders= 2000 units/EOQ
= 2000/500
= 4 0rders
7. total annual inventory cost = ordering cost annual + holding cost annual
ordering annual cost = 2000/500*125
= 500
total annual inventory cost = 500 + 500 = $1000
8. reorder point
wwe first calculate the daily demand; = 2000/250 = 8
ROP = 8*6 = 48
9. annual ordring = 2000/2000 * 125
= $125
annual holding = 2000/2 * holding cost of $2
= $2000
total annual inventory = 125 + 2000
= $2125
Shellhammer Company's inventory records show the following data for the month of September: Units Unit Cost Inventory, September 1 100 $3.34 Purchases: September 8 450 3.50 September 18 350 3.70 A physical inventory on September 30 shows 200 units on hand. If the company uses FIFO inventory costing and a periodic inventory system, the the value of ending inventory at the end of September is
Answer:
Ending inventory $740
Cost of goods sold $2,464
Explanation:
Calculation to determine the value of ending inventory and cost of goods sold if the company uses FIFO inventory costing and a periodicinventory system.
Calculation for the value of ending inventory
Ending inventory of 200 units= 200 x $3.70
Ending inventory of 200 units = $740
Calculation for Cost of goods sold:
Units available for sale= (100 + 450 + 350) = 900
Units sold= 900 – 200 = 700
100 × $3.34 = $ 334
450 × $3.50 =$1,575
150 × $3.70 =$555
Cost of goods sold $2,464
($ 334+$1,575+$555)
Therefore the value of ending inventory is $740 and cost of goods sold if the company uses FIFO inventory costing and a periodicinventory system will be $2,464
Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $45,000 and a remaining useful life of 5 years, at which time its salvage value will be zero. It has a current market value of $55,000. Variable manufacturing costs are $33,400 per year for this machine. Information on two alternative replacement machines follows.
Alternative A Alternative B
Cost $ 119,000 $ 112,000
Variable manufacturing costs per year 23,000 10,200
Calculate the total change in net income if Alternative A, B is adopted. Should Xinhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xinhong purchase?
Answer and Explanation:
The computation is shown below;
For Alternative A
Cost to buy new machine -$119,000.00
Cash received $55,000.00
Reduction in variable manufacturing cost ($33400 - $23000) ×5 $52,000.00
Total change in net income -$12,000.00
For Alternative B
Cost to buy new machine -$112,000.00
Cash received $55,000.00
Reduction in variable manufacturing cost ($33400 - $10200) × 5 $116,000.00
Total change in net income $59,000.00
So here Xinhong should purchase a machine that belong from Alternative B.
Do government statisticians calculate GDP by simply adding up the total sales of all business firms in one year? Explain.
Answer:
No
Explanation:
No, because the gross domestic product is determined by encompassing the final product. If the total sales are used to determine the GDP then the false value of GDP will come up because the problem of double counting will arise. Many firms sell their goods to other firms which is intermediate goods for the other firms.
S Corporation makes 41,000 motors to be used in the production of its sewing machines. The average cost per motor at this level of activity is: Direct materials $ 10.00 Direct labor $ 9.00 Variable manufacturing overhead $ 3.70 Fixed manufacturing overhead $ 4.65 An outside supplier recently began producing a comparable motor that could be used in the sewing machine. The price offered to S Corporation for this motor is $25.45. If S Corporation decides not to make the motors, there would be no other use for the production facilities and none of the fixed manufacturing overhead cost could be avoided. Direct labor is a variable cost in this company. The annual financial advantage (disadvantage) for the company as a result of making the motors rather than buying them from the outside supplier would be:
Answer:
$112,750
Explanation:
Particulars Cost of making Cost of buying
Direct material 41,000*10=410,000 0
Direct labor 41,000*9=369,000 0
Variable manuf. overhead 41,000*3.70=151,700 0
Fixed manuf. overhead 41,000*4.65=190,650 41,000*4.65=190,650
Outside supplier's price 0 41,000*25.45=1,043,450
Total cost $1,121,350 $1,234,100
Financial advantage of making the motors = $1,234,100 - $1,121,350
Financial advantage of making the motors = $112,750
Identify each of the following features as applying more to job order operations, process operations or both job order and process operations.1. Cost object is a process. 2. Measures unit costs only at period-end. 3. Uses indirect costs. 4. Transfers costs between Work in Process Inventory accounts. 5. Uses only one Work in Process account. 6. Uses materials, labor, and overhead costs.
Answer:
Identification of Features Applying More to Job Order Operations, Process Operations, or Both:
Features
1. Cost object is a process. Process Operations
2. Measures unit costs only at period-end. Process Operations
3. Uses indirect costs. Both
4. Transfers costs between Work in
Process Inventory accounts. Process Operations
5. Uses only one Work in Process account. Job Operations
6. Uses materials, labor, and overhead costs. Both
Explanation:
The main difference between the two operations is the manner costs are accumulated. Job operations accumulate costs for different jobs that are not similar. Process operations accumulate costs to show the process a product passes through. The product of a process operation is not unique like the product of a job operation.
A(n)______ variance occurs when management pays an amount different from the standard price to acquire the item.
Answer:
The answer is "Spending".
Explanation:
A(n) variance in spending happens whenever management spends a quantity other than the standard cost of the products to be acquired.
The difference in expenditure is the gap between the real level as well as the expected amount (or budget) of spending. Overhead costs often include fixed costs, e.g. operating expenses.
You have contracted to buy a house for $300,000, paying $50,000 as a down payment and taking a fully amortizing mortgage for the balance at a 5.5% annual interest rate for 30 years. What will your monthly payment (covering principal and interest) be if you make monthly installments over the next 30 years (round to the nearest dollar)
Answer:
The monthly payment (covering principal and interest) to be over the next 30 years is:
= $1,419.
Explanation:
a) Data and Calculations:
Home Price $300,000
Down Payment 16.666667 % ($50,000/$300,000 * 100)
Loan Term 30 years
Interest Rate 5.5%
Results:
Monthly Pay: $1,419.47
House Price $300,000.00
Down Payment $50,000.00
Loan Amount $250,000.00
Total of 360 Mortgage Payments $511,010.10
Total Interest $261,010.10
Adel wants to get $100 immediately to pay for concert tickets. He currently has no cash or income, but he has a nice gold watch that is worth $500. He is looking for a place to loan him the $100 by using his watch as collateral. Even though it can be risky, what type of business could best meet Adel’s needs? A. rent-to-own service B. pawnshop C. check cashing business D. payday loan business
Correct Answer: pawnshop
The type of business could best meet Adel’s needs "Pawnshop" where short-term loans individuals can use valuable items like his gold watch as collateral. The correct option is B.
He repays the loan along with interest within a specified period, he can retrieve his watch. Pawnshops are designed to offer immediate cash based on the value of the pledged item.
This solution suits Adel's situation as he can secure the funds he needs for the concert tickets using his watch as collateral even though it involves some risk due to the possibility of losing the watch if he doesn't repay the loan.
Therefore, the correct option is B.
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True or false: Demand is created through meeting customer buying criteria, awareness (promotion) and accessibility (sales distribution), and credit terms.
Answer:
false
Explanation:
Your parent offer you the opportunity to invest $ 50,000 in new coffee shop on the existing building on their property. It is located in the city centre. This building has 200m2 of space. Assumed that the project lasts 9 years, opportunity cost of capital is 10%, corporate income tax is ignored.
a. You should make some assumptions and forecast intial investment (cost of reparing old building and purchase of fix assets); operation cash flow (\, price per cup of coffee, number of cups of coffee per year; cost, depreciation, profit and cash flow from operation); and cash flow from changes in working capital.
b. What is NPV of this project? Do you invest this project? Why?
Answer:
no I don't invest this project
ABC systems ________. Multiple Choice will allocate costs based on the overall level of activity highlight the different levels of activities usually will undercost complicated or complex products will limit cost drivers to units of output
Answer: highlight the different level of activities
Explanation:
Activity Based Costing system assigns costs to the activity that are used in production and it highlight the different level of activities.
Activity based costing system is quite different from the traditional costing systems based on the way the indirect cost is being treated.
In recent decades there have been fewer trade blocs established to promote regional economic integration. True False
Answer: False
Explanation:
Trade bloc refers to an intergovernmental agreement, whereby the barriers to trade are eliminated among the countries that are involved.
The statement that "in recent decades there have been fewer trade blocs established to promote regional economic integration" is false.
There has been an increase in trade blocs in recent decades such as Brazil, Russia, India, China, and South Africa(BRICS), North American Free Trade Agreement(NAFTA), Association of Southeast Asian Nations( ASEAN).
They all promote economic development.
Black Company's unadjusted and adjusted trial balances on December 31 of the current year are as follows
Answer:
wdym
Explanation:
Zero-coupon risk-free bonds are available with the following maturities and yield rates (effective, annual):
Maturity(in years) Yield %
1 6
2 6.5
3 7
You need to buy corn for producing ethanol. You want to purchase 10,000 bushels one year from now, 15,000 bushels two years from now, and 20,000 bushels three years from now. The current forward prices, per bushel, are $3.89, $4.11, and $4.16 for one, two, and three years respectively. You want to enter into a commodity swap to lock in these prices. Which of the following sequences of payments at times one, two, and three will NOT be acceptable to you and to the corn supplier?
a. $38,900; $61,650; $83,200
b. $39,083; $61,650; $82,039
c. $40,777; $61,166; $81,554
d. $41,892; $62,340; $78,997
e. $60,184; $60,184; $60,184 73.2
Answer:
e. $60,184; $60,184; $60,184
Explanation:
Corn supplier will have yields of 6 in year 1 and 6.5 in year 2, if it will purchase bushels now he will have to pay $39,083 now or $38,900 2 years later. The corn supplier will not accept the price below this and we will not pay price above this. The Medicare price should be determined and set.
Consider public policy aimed at smoking.
a. Studies indicate that the price elasticity of demand for cigarettes is about 0.4. If a pack of cigarettes currently costs $2 and the government wants to reduce smoking by 20 percent, by how much should it increase the price?
b. If the government permanently increases the price of cigarettes, will the policy have a larger effect on smoking one year from now or five years from now?
c. Studies also find that teenagers have a higher price elasticity of demand than do adults. Why might this be true?
Answer:
1. government shoud increase price by 50%. so it would be $3
2. larger effect 5 years from now
3. this is true due to their limited finance compared to adults
Explanation:
1. prices elasticity = % change in quantity demanded ÷ % change in price
price elasticity = 0.4
% change in dmd = 20%
% change in price = ?
[tex]0.4=\frac{0.20}{?}[/tex]
we cross multiply
? = 0.20/0.4
= 0.5
= 50%
so if the government wants to reduce smoking by 20%, it has to increase the price of cigarettes by half of its price= $2 + $1 = $3
2. goods usually have more elastic demand as time goes on. So if cigarette price is permanently raised, it would have a bigger effect five years from now. This is based on the fact that the people may not feel short run effect of the increase as they would in the long run. But gradually given this increase, people may start to gradually reduce their smoking.
3. The effect of the change in price would be more felt on the teenagers. this is due to the fact that they have limited financial strength compared to adults. Also they are new to smoking compared to the adults and are more likely to be less involved in the habit.
In marketing, we use which terms? (needs, wants, or demands). Why?
Answer:
needs are things that satisfy the basic requirement. Wants are requests directed to specific types of items.
Compute the payback period for a project that requires an initial outlay of $297,771 that is expected to generate $40,000 per year for 9 years.
Answer:
7.44
Explanation:
The computation of the payback period is given below:
Time Amount Cumulative
0 (297,771) (297,771)
1 40,000 (257,771)
2 40,000 (217,771)
3 40,000 (177,771)
4 40,000 (137,771)
5 40,000 (97,771)
6 40,000 (57,771)
7 40,000 (17,771)
8 40,000 22,229
9 40,000 62,229
Now the payback period is
=7 + (17,771 ÷ 40,000)
= 7.44
In a perpetual inventory system a.a count must be made in order to know the inventory amount. b.the inventory records cannot be computerized. c.the amount of inventory for sale and the amount sold are not listed in the inventory account. d.each purchase and sale of inventory is recorded in the inventory account.
Answer:
d. each purchase and sale of inventory is recorded in the inventory account.
Explanation:
The perpetual inventory system keeps record of inventory and cost of sales after each and every transaction. Its records are always updated after every purchase or sale transaction thus, In a perpetual inventory system : each purchase and sale of inventory is recorded in the inventory account.
If $4000 is invested at 2% interest, find the value of the investment at the end of 6 years.
An investment of $4000 is deposited into an account in which interest is compounded continuously. Complete the table by filling in the amounts to which the investment grows at the indicated interest rates.
t = 5 years
Rate per year Amount
1%
2%
3%
4%
5%
6%
Answer:
a. Value of investment at the end of 6 years = $4,504
b. Table Completion:
Rate per year Future Value Factor Amount
1% 1.051 $4,204
2% 1.104 $4,416
3% 1.159 $4,636
4% 1.217 $4,868
5% 1.276 $5,104
6% 1.338 $5,352
Explanation:
Data and Calculations:
Investment = $4,000
Interest rate = 2%
Period of investment = 6 years
Future value factor at 2% for 6 years = 1.126
Value of investment at the end of 6 years = $4,504 ($4,000 * 1.126)
b) Investment = $4,000
Interest rates = from 1% to 6%
Period of investment, t = 5 years
Future value factors are as follows:
Rate per year Future Value Factor Amount
1% 1.051 $4,204 ($4,000 * 1.051)
2% 1.104 $4,416 ($4,000 * 1.104)
3% 1.159 $4,636 ($4,000 * 1.159)
4% 1.217 $4,868 ($4,000 * 1.217)
5% 1.276 $5,104 ($4,000 * 1.276)
6% 1.338 $5,352 ($4,000 * 1.338)
When a shift in ________ occurs, rational expectations hold that its impact on output and employment will only be minimal.
Answer:
Aggregate demand occurs.
Explanation:
The aggregate demand curve of the AD curve will move to the right and components of the demand like consummation, government, and investment spending on the exports and imports will rise. Macroeconomics states that the curve is vertical over time and people should rationally accept this pattern.Last month a manufacturing company had the following operating results: What was the cost of goods manufactured for the month
Answer:
Cost of goods manufactured 429000
Explanation:
The computation of the cost of goods manufactured is shown below:
Particulars Amount (in $)
Sales 505000
Less: Gross Margin 63000
Cost of goods sold 442000
Add: Ending Finished Goods Inventory 71000
Less: Opening Finished Goods Inventory 84000
Cost of goods manufactured 429000
Assume that consumers' incomes and the number of sellers in the market for good A (a normal good) both decrease. Based upon this information we can conclude, with certainty, that equilibrium:
Answer:
Quantity will Increase
Explanation:
As we know that when market is in equilibrium so the demand curve should be intersected the supply curve. At the time when there is an increase in suppliers so supply curve shift rightward due to which the consumer income would increase and this result in more demand. So the demand could be shift in rightward
So here the price should be the same but the quantity is increased
Kremena's bank account earns 4.5% simple interest. How much must she deposit in the account today if she wants it to be worth $1,250 in 3 years
Answer:
$1,101.32
Explanation:
Simple interest accounts balances are calculated using the following formula
A = P ( 1 + rt)
where:
A = final account balance
P = starting balance
r = interest rate (annually) percentage divided by 100
t = years
Therefore, we can plug in the values provided in this formula and solve for P which would be the amount that Kremena needs to deposit.
1,250 = P ( 1 + (0.045 * 3))
1,250 = P * 1.135 ... divide both sides by 1.135
1,101.32 = P
Finally, we can see that Kremena would need to deposit a total of $1,101.32 to have the amount that she wants after 3 years.
Gerry works 40 hours a week managing Gerry’s Market, without drawing a salary. He could earn $600 a week doing the same work for Jean. Gerry’s Market owes its bank $100,000, and Gerry has invested $100,000 of his own money. If Gerry’s accounting profits are $1,000 per week while the interest on his bank debt is $200 per week, his economic profits are:
Answer:
The correct response is "$395 per week".
Explanation:
Given:
Salary forgone,
= $600
Dividend forgone,
= $5
Accounting profit,
= $1,000
Now,
The implicit cost will be:
= [tex]Salary \ forgone+Dividend \ forgone[/tex]
By substituting the values, we get
= [tex]600+5[/tex]
= [tex]605[/tex] ($) per week
hence,
The economic profit will be:
= [tex]Accounting \ profit-Implicit \ cost[/tex]
= [tex]1000-605[/tex]
= [tex]395[/tex] ($) per week
When a market is monopolistically competitive, the typical firm in the market is likely to experience a a. positive or negative profit in the short run and a zero profit in the long run. b. positive profit in the short run and in the long run. c. zero profit in the short run and in the long run. d. zero profit in the short run and a positive or negative profit in the long run
Answer:
a
Explanation:
If elasticity of demand is 0.6, elasticity of supply is 0.6, and a 20% excise tax is levied on the good:________a. The fraction of the tax borne by consumers will be 0.5. b. The fraction of the tax borne by suppliers will be 0.6 c. The fraction of the tax borne by consumers will be 0.6. d. The fraction of the tax borne by suppliers will be 0.3.
Answer:
The correct option a. The fraction of the tax borne by consumers will be 0.5.
Explanation:
The tax burden is determined by the supply and demand price elasticity. Consumers bear the burden of the tax more than the suppliers when supply is more elastic than demand. When demand is more elastic than supply, the tax burden falls more on suppliers than consumers. When demand elasticity and supply elasticity are identical, the tax burden is shared equally by consumers and suppliers.
From the question, we have:
Elasticity of demand = Elasticity of supply = 0.6
Since demand elasticity and supply elasticity are identical, the burden of 20% excise tax is shared equally by consumers and suppliers. That 50% by 50%, or 0.5 by 0.5.
Therefore, the correct option a. The fraction of the tax borne by consumers will be 0.5.
Perit Industries has $135,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are: Project A Project B Cost of equipment required $ 135,000 $ 0 Working capital investment required $ 0 $ 135,000 Annual cash inflows $ 25,000 $ 63,000 Salvage value of equipment in six years $ 9,800 $ 0 Life of the project 6 years 6 years The working capital needed for project B will be released at the end of six years for investment elsewhere. Perit Industries’ discount rate is 17%. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables.
Answer:
1. Net present value of Project A = -41,449.96
2. Net present value of Project B = $143,746.85
3. I would recommend that company accept Project B.
Explanation:
Note: This question is not complete as the requirement are omitted. The requirements are therefore provided to complete the question before answering it as follows:
Perit Industries has $135,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are:
Project A Project B
Cost of equipment required $ 135,000 $ 0
Working capital investment required $ 0 $ 135,000
Annual cash inflows $ 25,000 $ 63,000
Salvage value of equipment in six years $ 9,800 $ 0
Life of the project 6 years 6 years
The working capital needed for project B will be released at the end of six years for investment elsewhere. Perit Industries’ discount rate is 17%.
Required:
1. Compute the net present value of Project A. (Enter negative values with a minus sign. Round your final answer to the nearest whole dollar amount.)
2. Compute the net present value of Project B. (Enter negative values with a minus sign. Round your final answer to the nearest whole dollar amount.)
3. Which investment alternative (if either) would you recommend that the company accept?
The explanation of the answers is now provided as follows:
1. Compute the net present value of Project A. (Enter negative values with a minus sign. Round your final answer to the nearest whole dollar amount.)
Cost of equipment required = $135,000
Using the formula for calculating the present value of an ordinary annuity, the present value (PV) of the annual cash inflows can be calculated as follows:
PV of annual cash inflow = Annual cash inflow * (1 - (1 / (1 + discount rate))^Project life) / discount rate) = $25,000 * ((1 - (1 / (1 + 0.17))^6) / 0.17) = $89,729.62
The present value (PV) of the salvage value can be calculated as follows:
PV of salvage value = Salvage value / (1 + + discount rate)^Project life = $9,800 / (1 + 0.17)^6 = $3,820.42
Net present value of Project A = PV of annual cash inflow + PV of salvage value - Cost of equipment required = $89,729.62 + $3,820.42 - $135,000 = -41,449.96
2. Compute the net present value of Project B. (Enter negative values with a minus sign. Round your final answer to the nearest whole dollar amount.)
Working capital investment required = $135,000
Using the formula for calculating the present value of an ordinary annuity, the present value (PV) of the annual cash inflows can be calculated as follows:
PV of annual cash inflow = Annual cash inflow * (1 - (1 / (1 + discount rate))^Project life) / discount rate) = $63,000 * ((1 - (1 / (1 + 0.17))^6) / 0.17) = $226,118.64
The present value (PV) of the Working capital investment required can be calculated as follows:
PV of Working capital investment required = Working capital investment required / (1 + + discount rate)^Project life = $135,000 / (1 + 0.17)^6 = $52,628.21
Net present value of Project B = PV of annual cash inflow + PV of Working capital investment required - Working capital investment required = = $226,118.64 + $52,628.21 - $135,000 = $143,746.85
3. Which investment alternative (if either) would you recommend that the company accept?
From parts 1 and 2 above, we have:
Net present value of Project A = -41,449.96
Net present value of Project B = $143,746.85
Since the Net present value of Project A is negative, it should be rejected.
Since the Net present value of Project B is positive, it should be accepted.
Therefore, I would recommend that company accept Project B.
Lighting design personnel must: A. Understand environmental, cost, and associated benefits of energy-efficient lighting B. Recognize when specialized knowledge is necessary C. Estimate energy cost savings D. All of the above
Answer: All of the above
Explanation:
The Lighting Design Personnel is in charge of the designing, the installation, and the operation of lighting and every other special electrical effects.
Such person must understand environmental, cost, and associated benefits of energy-efficient lighting. Also, he or she must be bake to recognize when specialized knowledge is necessary and also estimate energy cost savings
Therefore, the correct option is all of the above.
Over the last year, Calzone Corporation paid a quarterly dividend of $0.10 in each of the four quarters. The current stock price of Calzone Corporation is $39.78. What is the dividend yield for Calzone stock
Answer: 1.0%
Explanation:
Dividend yield = Annual dividend / Current stock price
Annual dividend = (0.10 * 4 quarters)
= $0.40
Dividend yield = 0.40 / 39.78
= 1.0%
McBride's Dairy has 200 gallons of heavy cream and 600 gallons of skimmed milk and has incurred $1,000 of joint costs at the split-off point. It can sell each product at the split-off point or process it further in relatively similar processes, so management has decided that the most appropriate method for allocating joint costs is the market value at split-off point. One gallon of cream sells for $15, while one gallon of milk sells for $4. How much of the joint cost is allocated to cream
Answer:
$560
Explanation:
Calculation to determine How much of the joint cost is allocated to cream
Units Selling price Sales value Percentage of sales value Allocated cost
Cream (200*15=3,000) (3,000/5,400 = 56%)
(1,000 x 56% = $560)
Skimmed milk (600*4=2,400) (2,400/5,400 = 44%) (1,000 x 44% = $440)
Total $5,400 100% $1,000
($3,000+$2,400=$5,400)
(56%+44%=100%)
($560+$440=$1,00)
Therefore the joint cost allocated to CREAM is $560
