Answer:
the taxable income is $12,000
Explanation:
The computation of the taxable income is given below:
Income $37,000
Less: Exclusions ($500)
Less: Adjustments/deductions ($2500)
Less: Itemised deductions ($21,000)
Less: QBI deduction ($1,000)
Taxable Income $12,000
Hence, the taxable income is $12,000
The same should be considered and relevant
While the evidence suggests that over long periods of time that stocks will outperform bonds, individuals with a long-term investment horizon may still choose to invest in bonds. Is this rational behavior? Why or why not?
Answer:
Stocks and Bonds
Yes. It is a rational behavior for individuals with a long-term investment horizon to choose to invest in bonds rather than investing in stocks despite the overwhelming "evidence that suggests that over long periods of time stocks still outperform bonds."
Rational behavior involves making rational choices that provide optimal levels of benefit or utility for the individual. People who make rational choices would rather choose bonds with lower risks and returns than stocks with higher risks and returns.
Explanation:
Every rational investor would prefer to reduce her risk exposure instead of increasing it. Every investor is also aware that investments with higher risks attract higher returns. However, determining the certainty of the returns is difficult.
Open communication occurs best when:
a. people feel their opinions are valued.
b. people feel they will be rewarded, or at least not punished, for their opinions.
c. both a and b
d. neither a nor b
3. Explain the success of the training program using Conditioning Theory and Social Cognitive Theory. For each theory: A. How do you explain why the training program was not effective? B. How could the program be improved by using some of the concepts from each theory.
Answer:
you just explain how smart it is.
it can add more tecnoligy
Explanation:
The "Truth in Savings Law" requires banks to advertise their rates on investments such as CDs and savings accounts as annual percentage yields (APY).
a) true
b) false
Beckenworth had cost of goods sold of $10,521 million, ending inventory of $3,189 million, and average inventory of $2,075 million. Its days' sales in inventory equals: __________
Answer:
am i supposed to know
Explanation:
A product sells for $30 per unit and has variable costs of $18 per unit. The fixed costs are $720,000. If the variable costs per unit were to decrease to $15 per unit, fixed costs increase to $900,000, and the selling price does not change, break-even point in units would:
Answer:
remain the same
Explanation:
Breakeven quantity are the number of units produced and sold at which net income is zero
Breakeven quantity = fixed cost / price – variable cost per unit
Initial Breakeven quantity = $720,000 / ($30 - $18) = 60,000
New Breakeven quantity = $900,000 / ($30 - $15) = 60,000
Breakeven point remained the same
State and explain ways to set-up business in domestic market?
Answer:
Explanation:Buy products in bulk to sell.
Sell homemade products you make yourself.
Start a dropshipping store.
Start a print-on-demand store.
Sell your service or expertise.
Productize your service or expertise.
Grow an audience you can monetize.
Buy an existing ecommerce business.
A store has two different coupons that customers can use. One coupon gives the customer $15 off their purchase, and the other coupon gives the customer 30% off of their purchase. Suppose they let a customer use both coupons and choose which coupon gets applied first. For this context, ignore sales tax.
Let f be the function that inputs a cost (in dollars) and outputs the cost after applying the "$15 off" coupon, and let g be the function that inputs a cost (in dollars) and outputs the cost after applying the "35% off" coupon.
a. Suppose acustomerwants to purchase asi 40 item and apply the si 5 of coupon first, and then the 35% or coupon How much will the item cost after applying the coupons?
b. Suppose a customer wants to purchase a S 140 item and apply the SI 5 off coupon first, and then the 35% or coupon Ure ction notation to represent how much the item will cost (dollars) after applying the coupons.
c. Suppose a customer wants to purchase a $140 item and apply the 35% om coupon first and then the sis of coupon How much will the item cost after applying the coupons?
d. Suppose a customer wants to purchase a S 140 item and apply the "35% or coupon first and then the "S 15 off coupon. Usefu ction notation to represent how much the item will cost (dollars) after applying the coupons.
Answer:
16.25;
g(f(x)) ;
76 ;
f(g(x))
Explanation:
For 15 off
f(x) = x - 15
For 35% off
g(x) = (1 - 0.35)x = 0.65x
g(x) = 0.65x
A.)
For the $15 off coupon :
f(x) = x - 15
f(x) 40 - 15 = 25
For the 35% coupon :
g(x) = (1-0.35)x
g(x) = 0.65(25)
g(x) = 16.25
B.)
Applying $15 off first, then 35%
Here, g is a function of f(x)
g(f(x))
Here g(x) takes in the result of f(x) ;
For the $140 off coupon :
f(x) = x - 15
f(140) = 140 - 15 = 125
For the 35% coupon :
g(125) = (1-0.35)x
g(124) = 0.65(125) = $81.25
C.)
x = 140
g(x) = 0.65x
g(140) = 0.65(140)
g(140) = 91
f(x) = x - 15
f(91) = 91 - 15
f(91) = 76
D.)
Here, F is a function of g(x)
f(g(x))
f(x) = (0.65*140) - 15
Fran’s Fries has budgeted sales for May, June and July at $500,000, $680,000 and $720,000, respectively. Sales are 80% cash and 20% on account. Assume sales on account are collected in the month following the sale. Compute cash receipts for June and July. Show your work here.
Answer:
Results are below
Explanation:
Giving the following information:
Sales are 80% cash and 20% on account.
Sales:
May= $500,000
June= $680,000
July= $720,000
Cash collection June:
Cash collection from May= (500,000*0.2)= 100,000
Cash collection June= (680,000*0.8)= 544,000
Cash collection June= $644,000
Cash collection July:
Cash collection from June= (680,000*0.2)= 136,000
Cash collection July= (720,000*0.8)= 576,000
Cash collection July= $712,000
Types of Financial Assets Match the description of the security to the type of financial asset. A security that provides a payoff that depends on the values of other assets. Multiple Choice equity security debt security derivative security None of these
Answer: Derivative security
Explanation:
Derivative security is referred to as the security that provides a payoff which depends on the values of other assets.
A derivative security is referred to as the financial instrument whereby the value depends on the value of another asset. There are different types of derivatives such as options, swaps, futures, and forwards. Example of derivative security is convertible bond.
Suppose that an investor buys a 100-share call option for $250. It has an exercise price of $60. The underlying price per share of the stock at expiration is $66. What then is the amount of profit or loss, ignoring brokerage fees
Answer:
$350
Explanation:
Call option is profitable when Stock price expires above the Strike price of the option.
Strike price of call = $60
Stock price at expiration = $66
Total profit = Size*(Stock price-Strike price) - Premium paid
Total profit = 100*($66-$60) - $250
Total profit = 100*$6 - $250
Total profit = $600 - $250
Total profit = $350
Thus, the amount of profit (ignoring brokerage fees) is $350.
If nominal GDP is $1,200 billion and, on average, each dollar is spent five times in the economy over a year, then the quantity of money demanded for transactions purposes will be?
Choices
1,200
6,000
600
240
960
Out of the choices provided above, it can be concluded to state that the quantity of money demanded for transactions will be $6,000 if the conditions given above with respect to the nominal GDP are satisfied in an economic situation. Therefore, the option B holds true.
What is the significance of nominal GDP?The nominal GDP of an economy can be referred to or considered as the unit of measurement that is used to represent the final value of finished goods and services, where no adjustments for the prevailing inflation rates are taken into consideration.
The quantity of money demanded can be computed using the given nominal GDP's information as under,
Quantity of Money Demanded = Nominal GDP x Dollar Spending
Quantity of Money Demanded = 1200 × 5
Quantity of Money Demanded = $6,000
Therefore, the option B holds true and states regarding the significance of nominal GDP.
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Magna Lighting Inc. produces and sells lighting fixtures. An entry light has a total cost of $125 per unit, of which $80 is product cost and $45 is selling and administrative expenses. In addition, the total cost of $125 is made up of $90 variable cost and $35 fixed cost. The desired profit is $55 per unit. Determine the markup percentage on product cost.
Answer:
The correct solution is "125%".
Explanation:
Given:
Desired profit,
= $55
Selling and administrative expenses,
= $45
Product cost,
= $80
Now,
The markup percentage will be:
= [tex]\frac{Desired \ profit+Selling \ and \ administrative \ expenses}{Product \ cost}\times 100[/tex]
By putting the values, we get
= [tex]\frac{55+45}{80}\times 100[/tex]
= [tex]\frac{100}{80}\times 100[/tex]
= [tex]125[/tex] (%)
125% is the markup percentage on product cost.
MarkupIt is important to remember that markup is a term used to refer to the difference between the selling price of a product and cost.
SolutionUsing the formula
Desired profit + Selling and administrative expenses/product cost X 100
Desired profit = $55Selling and administrative expenses = $45product cost = $8055+45/80 = 1.25
1.25* 100= 125
= 125%
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Unobserved effects versus idiosyncratic errors
Suppose you have two years' worth of panel data on wages and work experience of adults; however, the data set has no further information on the characteristics of the individuals in the data set. Specifically, you have cross-sectional wage and work experience data on individuals in 2006, and cross-sectional data on those same individuals in 2012. You plan to use the following fixed effects model to analyze the effects of work experience on wages:
log (wage it ) = βo + 80 yr10, + B1 experit + ai + uit
where
wage it = yearly wage of individual i at time t, in dollars
yrl0, =1 in the year 2010 (t = 2), and =0 otherwise (t = 1)
exper = years of work experience of individual i, at time t
ai = unobserved (time-invariant) effect
uit = idiosyncratic error
Two other factors that can influence wage, which you have not controlled for in your model, are height and industry of employment.
Use the following table to indicate which term in the fixed effects model captures the effect of height, which term captures the effect of industry of employment, and which term captures the effect of work experience.
ai uit β1
Work experience
Height
Industry of employment
Answer:
The terms that capture the effect of industry of employment and work experience are:
Industry of employment = uit
Work experience = β1
Height = ai
Explanation:
a) Data:
ai uit β1
Work experience
Height
Industry of employment
b) Explanation
The "idiosyncratic error" (uit) describes the unobserved factors that impact the dependent variable. For example, industry of employment, and this factor vary from one-time period to the next.
The unobserved (time-invariant) effect (ai) refers to the height of the industry of employment, which does not vary over time.
Finally, work experience is depicted by β1, which is a factor that changes with time.
what is the difference between time work and piece work rates
Answer:
the process by which green plants turn carbon dioxide and water into food using energy from sunlight
Consider the following argument from analogy. According our rules for appraising analogical reasoning, if a subsequent consideration strengthens the argument, answer a. Answer b if a consideration weakens the argument. Answer c if a consideration does not affect the argument.
Bill has taken three history courses and found them very stimulating and valuable. So he signs up for another one, confidently expecting that it too will be worthwhile.
25. Suppose that his previous history courses were in ancient history, modern European history, and American history.
26. Suppose that his previous history courses had all been taught by the same professor that is scheduled to teach the present one.
27. Suppose that his previous history courses all had been taught by Professor Smith, and the present one is taught by professor Jones.
28. Suppose that Bill had found his three previous history courses to be the most exciting intellectual experiences of his life.
29. Suppose that his previous history courses had all met at 9:00am, and the present one is scheduled to meet at 9:00am also.
30. Suppose that, in addition to the three history courses previously taken, Bill also had taken and enjoyed courses in anthropology, economics, political science, and sociology.
Answer:
Bill has taken three history courses and found them very stimulating and valuable. So he signs up for another one, confidently expecting that it too will be worthwhile.
25. Suppose that his previous history courses were in ancient history, modern European history, and American history.
Answer A
26. Suppose that his previous history courses had all been taught by the same professor that is scheduled to teach the present one.
Answer A
27. Suppose that his previous history courses all had been taught by Professor Smith, and the present one is taught by professor Jones.
Answer B
28. Suppose that Bill had found his three previous history courses to be the most exciting intellectual experiences of his life.
Answer A
29. Suppose that his previous history courses had all met at 9:00am, and the present one is scheduled to meet at 9:00am also.
Answer C
30. Suppose that, in addition to the three history courses previously taken, Bill also had taken and enjoyed courses in anthropology, economics, political science, and sociology.
Answer B
Explanation:
Voice Com, Inc., produces and sells cellular phones. The costs of producing and selling 8,000 units of cellular phones are as follows: Variable costs: Fixed costs: Direct materials $ 81 per unit Factory overhead $325,600 Direct labor 37 Selling and admin. exp. 114,400 Factory overhead 24 Selling and admin. exp. 20 Total $162 per unit Voice Com desires a profit equal to a 14% rate of return on invested assets of $942,400. Assume that Voice Com, Inc., uses the total cost concept of applying the cost-plus approach to product pricing. a. Determine the total costs and the total cost amount per unit for the production and sale of 8,000 units of cellular phones. Round the cost per unit to two decimal places. Total cost $ fill in the blank 1 Cost amount per unit $ fill in the blank 2 b. Determine the total cost markup percentage (rounded to two decimal places) for cellular phones. fill in the blank 3 % c. Determine the selling price of cellular phones. Round to the nearest cent. $ fill in the blank 4 per phone
Answer:
Voice Com, Inc.
1a. Total costs = $1,621,600
1b. Total cost per unit = $202.70
2a. Mark-up amount = $131,936
2b. Mark-up percentage = 8.14%
2c. Selling price = $219.19
Explanation:
a) Data and Calculations:
Variable costs per unit:
Direct materials $ 81
Direct labor 37
Factory overhead 24
Selling and admin. exp. 20
Total per unit $162
Fixed costs:
Factory overhead $325,600
Production and sales units = 8,000
Rate of return on invested assets = 14%
Desired profit = $131,936 ($942,400 * 14%)
Sales revenue = Total costs + Desired profit
= $1,753,536
1a. Total costs = $1,621,600 ($162 * 8,000 + $325,600)
1b. Total cost per unit = $202.70 ($1,621,600/8,000)
2a. Mark-up amount = $131,936
2b. Mark-up percentage = 8.14% ($131,936/$1,621,600 * 100)
2c. Selling price = $219.19 ($1,753,536/8,000)
The following data relate to Lebeaux Corporation for the year just ended: Sales revenue $ 750,000 Cost of goods sold: Variable portion 370,000 Fixed portion 110,000 Variable selling and administrative costs 50,000 Fixed selling and administrative cost 75,000 Which of the following statements is correct?
A) Lebeaux's variable-costing income statement would show a gross margin of $270,000.
B) Lebeaux's variable costing income statement would show a contribution margin of $330,000.
C) Lebeaux's absorption-costing income statement would show a contribution margin of $330,000.
D) Lebeaux's absorption costing income statement would show a gross margin of $330,000.
E) Lebeaux's absorption-costing income statement would show a gross margin of $145,000.
Answer:
B) Lebeaux's variable costing income statement would show a contribution margin of $330,000.
Explanation:
See below the Statements that are produced under Absorption and Variable Costing methods.
Absorption Costing
Sales revenue $750,000
Less Cost of goods sold :
Variable portion $370,000
Fixed portion $110,000 ($480,000)
Gross Profit $270,000
Variable Costing
Sales revenue $750,000
Less Variable Costs :
Variable portion - Cost of Sales $370,000
Variable selling and administrative costs $50,000 ($420,000)
Contribution $330,000
therefore,
The only correct statement is : Lebeaux's variable costing income statement would show a contribution margin of $330,000
Palisade Creek Co. is a merchandising business that uses the perpetual inventory system. The account balances for Palisade Creek as of May 1, 2018, are as follows. Assume all accounts have normal balances.
110 Cash $83,600 312 Dividends $135,000
112 Accounts Receivable 233,900 313 Income Summary —
115 Inventory 624,400 410 Sales 5,069,000
116 Estimated Returns Inventory 28,000 510 Cost of Goods Sold 2,823,000
117 Prepaid Insurance 16,800 520 Sales Salaries Expense 664,800
118 Store Supplies 11,400 521 Advertising Expense 281,000
123 Store Equipment 569,500 522 Depreciation Expense —
124 Accumulated Depreciation— Store Equipment 56,700 523 Store Supplies Expense —
210 Accounts Payable 96,600 529 Miscellaneous Selling Expense12,600
211 Salaries Payable — 530 Office Salaries Expense 382,100
212 Customers Refunds Payable 50,000 531 Rent Expense 83,700
310 Common Stock 100,000 532 Insurance Expense —
311 Retained Earnings 585,300 539 Miscellaneous Administrative Expense 7,800
Part 1: Journalize the transactions below for May, the last month of the fiscal year. For a compound transaction, if an amount box does not require an entry, leave it blank.
Part 2: Using the attached spreadsheet, post the journal entries from Part 1 to the general ledger. Extend the month-end balances to the appropriate balance columns after all posting is completed. In this problem, you are not required to update or post to the accounts receivable and accounts payable subsidiary ledgers.
May 1: Paid rent for May, $5,000.
Comprehensive Problem 2
Part 3:
NOTE: You must complete parts 1 and 2 before completing part 3.
Prepare an unadjusted trial balance. If an amount box does not require an entry, leave it blank.
Answer:
1- Rent expense (Dr.) $5,000
Cash (Cr.) $5,000
2- Advertising Expense (Dr.) $11,000
Cash (Cr.) $11,000
3 - Accounts Receivable (Dr.) $43,200
Sales Revenue (Cr.) $43,200
4 - Office Supplies (Dr.) $9,280
Accounts Payable (Cr.) $9,280
5 - Salaries Expense (Dr.) $56,000
Salaries Payable (Cr.) $56,000
Explanation:
The journal entries for the month of May are recorded. These transactions are posted into general ledger accounts which forms the trial balance. The trial balance summarizes the account balances and debit, credit totals are found.
Trial Balance :
Debits;
Rent Expense $5,000
Advertising Expense $11,000
Office Supplies $9,280
Accounts Receivable $43,200
Salaries Expense $56,000
Credits;
Cash $16,000
Salaries Payable $56,000
Sales Revenue $43,200
Accounts Payable $9,280
Define organizational structures? And explain types of organizational structures?
Answer:
Four main types of structures of the organization are:
Functional Divisional Matrix FlatExplanation:
Functional StructureThis structure consists of employees performing similar tasks or specialties. For example, in the finance department, accountants are grouped and the same applies to marketing departments, operations, and human resources. This structure enables swift decision-making because the group members have similar skills, can communicate easily, and can also improve their ability by learning from each other.
Divisional StructureThis structure groups employees according to the products or projects that meet customer requirements of a certain type. For instance, a catering services restaurant could organize the employees by departments, e.g. weddings or wholesale retail departments, according to which they serve. Employees are split so that their performance is maximized.
Flat StructureThe traditional top-down management system is impeded by a flat organizational structure. There is no concept of the boss, every employee is the boss, which removes bureaucracy and improves direct contact. For example, an employee with an innovative idea or suggestion need not contact every level of senior management to give the person responsible for the idea. The staff can directly communicate on an individual basis.
Matrix StructureA matrix structure has a complex story true as it combines elements from both the functional and the divisional models. It first divides employees according to their specialization, then further separates them into departments according to projects and products. To make this structure a lot of planning and efforts are required but one e achieved increases the productivity of the team, promotes innovation and creativity, and good decision making.
6. Guillermo and Nora adopted a little boy in 2020 and incurred a total of $18,000 qualified adoption expenses. Their modified AGI is $220,000. What is the amount of adoption credit they can take
Answer:
Guillermo and Nora
The amount of adoption credit that they can take is limited to:
= $14,300 in 2020.
Explanation:
a) Data and Calculations:
Modified AGI of Guillermo and Nora = $220,000
Total amount of qualified adoption expenses incurred in 2020 = $18,000
Limit of adoption credit available to the couple in 2020 = $14,300
Lost adoption expenses = $3,700 ($18,000 - $14,300)
b) The couple will not be able to take adoption credit amounting to $3,700 because the amount they spent on adoption expenses exceeded the adoption credit limit for 2020.
Tumbling Haven, a gymnastic equipment manufacturer, provided the following information to its accountant. The company had net fixed assets of $25 million, and other non-current assets of $2 million. The firm has current liabilities of $2 million, long-term debt of $10 million, common stock of $3 million, and retained earnings of $25 million. What amount of current assets did this firm have
Answer:
See below
Explanation:
Given the information above,
Total asset = Current asset + Net fixed assets + Other non current assets
= Current asset + $25m + $2m
= Current asset + $27m
= Long term debt + equity
= 10m + $3m + $25m
= $38m
Current liabilities = $2m
Since current liabilities = Total asset - (long-term debt + equity)
$2m = (current asset + $27m) - $38m
$2m = current asset + $27m - $38m
Current asset = $2m - $27m + $38m
Current asset = $13m
The ____ is equal to the sum of the squares of the market shares of all the firms in an industry. a. market concentration ratio b. Herfindahl-Hirschman index c. correlation coefficient d. standard deviation of concentration e. none of the above
Answer:
b. Herfindahl-Hirschman index
Explanation:
Option b. Herfindahl-Hirschman index
The HHI is calculated by taking the square of the market share and then adding all the squared values. Thus, the resulting answer will be the HHI magnitude.
BR Company has a contribution margin of 18%. Sales are $423,000, net operating income is $76,140, and average operating assets are $131,000. What is the company's return on investment (ROI)
Answer:
58.12%
Explanation:
Return on investment = Net operating income / Average operating assets
Return on investment = $76,140 / $131,000
Return on investment = 0.5812214
Return on investment = 58.12%
So, the company's return on investment (ROI) is 58.12%.
When a parent owns less than 100% of a subsidiary, the noncontrolling interest shareholders are allocated their ownership percentage of income or net assets in all of the following consolidating entries except for: Group of answer choices The basic investment account consolidation entry The excess value (differential) reclassification entry The accumulated depreciation consolidation entry The amortized excess value reclassification entry
Answer:
The accumulated depreciation consolidation entry
Explanation:
In the case when the parent company owns less than 100% of the subsidiary company so the non-controlled interest should be allocated in all the consolidation entries but for the accumulate depreciation it cant be allocated as it does not have any effect on the net income due to which there is no need to distribute the share to the non-controlling interest shareholders
Which of the following conditions is characteristic of a monopolistically competitive firm in both the short-run and the long run?
a. P> MC
b. MC = ATC
c. P < MR
d. All of the above are correct.
Answer:
b or d
Explanation:
probably b but I am not sure tho sorry
The characteristic of a monopolistically competitive firm in both the short-run and the long run is P>MC.
The following information should be considered:
Monopolistically competitive firm has downward sloping demand curve and marginal revenue curve for monopolistically competitive firm should be below the demand curve. The firm maximizes it's profit where MR equivalent MC And charge price on the demand curve above in the case when MR equals MC. Therefore price >MR =MC.Learn more: brainly.com/question/17429689
Suppose the stock of Host Hotels & Resorts is currently trading for per share. a. If Host issued a stock dividend, what would its new share price be? b. If Host does a 3:2 stock split, what would its new share price be?
Answer:
A. $16.67 per share
B. $13.33 per share
C. $60.00 per share
Explanation:
a. Calculation to determine what will its new share price be If Host issued a 20% stock dividend
Using this formula
New share price (stock dividend) = Old price / (1 + Stock dividend rate)
Let plug in the formula
New share price (stock dividend) =$20/(1+0.20)
New share price (stock dividend) =$20/1.20
New share price(stock dividend) =$16.67 per share
Therefore If Host issued a stock dividend, its new share price will be $16.67 per share
b. Calculation to determine what will its new share price be If Host does a 3:2 stock split
Using this formula
New share price=Old price/Stock split
Let plug in the formula
New share price=$20/(3/2)
New share price=$20/1.5
New share price= $13.33 per share
Therefore If Host does a 3:2 stock split its new share price will be $13.33 per share
c. Calculation to determine what will its new share price be If Host does a 1:3 reverse split
Using this formula
New share price=Old price/Reverse split
Let plug in the formula
New share price=$20/(1/3)
New share price=$20/0.33333
New share price= $60.00 per share
Therefore If Host does a 1:3 reverse split its new share price will be $60.00 per share
If capital rents for $25 per unit per hour, labor can be hired for $9 per unit per hour, the level of total factor productivity is normalized to 1, and the firm is minimizing costs.(a) Determine whether the production function exhibits diminishing marginal returns to each input.
Answer:
Following are the solution to the given question:
Explanation:
The decrease of a marginal input return implies that its input is increasing by one unit, thereby decreasing its marginal input product.
Function of production
[tex]F(K, L) = AK^{\frac{3}{4}} L^{\frac{3}{4}}[/tex]
Its capital products subject (MPK) is derived by differentiating the factor of production from K.
[tex]MPK = \frac{3}{4}\times AK^{\frac{3}{4}} - 1L^{\frac{3}{4}}\\\\MPK = \frac{3}{4}AK^{-\frac{1}{4}}L^{\frac{3}{4}}\\\\MPK = \frac{3}{4}\times A\times (\frac{L^{\frac{3}{4}}}{K^{\frac{1}{4}}})[/tex]
Note: When a value is changed from numerator to denominator, then the power symbol shifts between positive to negative.
Since k is in the denominator, K decreases [tex]\frac{3}{4}\times A\times (\frac{L^{\frac{3}{4}}}{K^{\frac{1}{4}}})[/tex], and therefore MPK is reduced.
There's hence a decreased effective return on capital again for production function.
Its marginal labor product (MPL) is determined by distinguishing the manufacturing function from L.
[tex]MPL = (\frac{3}{4})\times AK^{\frac{3}{4}}L^{\frac{3}{4}}-1\\\\MPL = (\frac{3}{4})AK^{\frac{3}{4}}L^{-\frac{1}{4}}\\\\MPL = (\frac{3}{4})\times A\times (\frac{K^{\frac{3}{4}}}{L^{\frac{3}{4}}})[/tex]
The denominator of L reduces L [tex](\frac{3}{4})\times A\times (\frac{K^{\frac{3}{4}}}{L^{\frac{3}{4}}})[/tex] and therefore reduces MPL.
So there is a decreasing marginal return to labor in the production function.
Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout South East Asia. Three cubic centimeters (cc) of solvent H300 are required to manufacture each unit of Supermix, one of the company’s products. The company is planning its raw materials needs for the third quarter, the quarter in which peak sales of Supermix occur. To keep production and sales moving smoothly, the company has the following inventory requirements: The finished goods inventory on hand at the end of each month must equal 2,000 units of Supermix plus 25% of the next month’s sales. The finished goods inventory on June 30 is budgeted to be 14,250 units. The raw materials inventory on hand at the end of each month must equal one-half of the following month’s production needs for raw materials. The raw materials inventory on June 30 is budgeted to be 75,375 cc of solvent H300. The company maintains no work in process inventories. A monthly sales budget for Supermix for the third and fourth quarters of the year follows. Budgeted Unit Sales July 49,000 August 54,000 September 64,000 October 44,000 November 34,000 December 24,000 Required: 1. Prepare a production budget for Supermix for the months July, August, September, and October. 3. Prepare a direct materials budget showing the quantity of solvent H300 to be purchased for July, August, and September, and for the quarter in total.
Slapshot Company makes ice hockey sticks. Last week, direct materials (wood, paint, Kevlar, and resin) costing $26,000 were put into production. Direct labor of $20,000 (10 workers x 100 hours x $20 per hour) was incurred. Manufacturing overhead equaled $52,000. By the end of the week, the company had manufactured 2,000 hockey stick. Explain how?
Answer:
Slapshot Company
The total production is $98,000 with a unit cost of $49 per hockey stick.
The selling price per unit should be above $49 when marked-up.
Explanation:
a) Data and Calculations:
Direct materials (wood, paint, Kevlar, and resin) $26,000
Direct labor (10 workers x 100 hours x $20 per hour) 20,000
Manufacturing overhead equaled 52,000
Total production costs = $98,000
Production of hockey stick = 2,000 units
Unit cost of hockey stick = $49 ($98,000/2,000)
