Answer:
Portman Company
1. The total variable costs and the total fixed costs for the current year are:
Total variable costs $88,000,000
Total fixed costs $40,000,000
2. Determination of (a) the unit variable cost and (b) the unit contribution margin for the current year.
a) Unit variable cost $88
b) Unit contribution margin $100
3. The break-even sales (units) for the current year are:
= 400,000 units.
4. The break-even sales (units) under the proposed program for the following year are:
= 450,000 units.
5. The amount of sales (units) that would be necessary under the proposed program to realize the $60,000,000 of operating income that was earned in the current year is:
= 1,050,000,000 units.
6. The maximum operating income possible with the expanded plant is:
= $61,000,000.
7. If the proposal is accepted and sales remain at the current level, the operating income or loss be for the following year will be:
= $55,000,000.
8. Based on the data given (1 - 6), would you recommend accepting the proposal?
In favor of the proposal because of the possibility of increasing income from operations.
Explanation:
a) Data and Calculations:
Sales units = 1,000,000
Selling price = $188
Total
Sales $188,000,000
Cost of goods sold (100,000,000)
Variable cost of goods sold = $70,000,000
Fixed cost of goods sold = $30,000,000
Gross profit $88,000,000
Expenses:
Selling expenses $16,000,000
Variable selling expenses $12,000,000
Fixed selling expense = $4,000,000
Administrative expenses 12,000,000
Variable administrative expenses = $6,000,000
Fixed administrative expenses = $6,000,000
Total expenses (28,000,000)
Operating income $60,000,000
The division of costs between variable and fixed is as follows:
Variable Fixed
Cost of goods sold 70% 30%
Selling expenses 75% 25%
Administrative expenses 50% 50%
Total Unit Cost
Variable cost of goods sold = $70,000,000 $70
Variable selling expenses 12,000,000 12
Variable administrative expenses 6,000,000 6
Total variable costs = $88,000,000 $88
Contribution margin = $100 ($188 - $88)
Fixed cost of goods sold = $30,000,000
Fixed selling expense = 4,000,000
Fixed administrative expenses = 6,000,000
Total fixed costs = $40,000,000
Break-even sales units = $40,000,000/$100 = 400,000 units
Proposal:
Sales revenue increase = $11,280,000
Fixed costs by $5,000,000 to $45,000,000 ($40 million + $5 million)
Sales units increase = 60,000 ($11,280,000/$188)
Break-even sales units = 450,000 ($45,000,000/$100)
Units to realize target profit of $60,000,000:
= ($45,000,000 + $60,000,000)/$100
= $105,000,000/$100
= 1,050,000,000 units
Profit with the expanded plan
= Total contribution - Fixed Costs
= $100 * 1,060,000 - $45,000,000
= $106,000,000 - $45,000,000
= $61,000,000
With sales at current level of 1,000,000 units
Sales revenue = $188,000,000
Variable costs 88,000,000
Contribution $100,000,000
Fixed costs 45,000,000
Operating income $55,000,000
The Assembly Department produced 1,000 units of product during March. Each unit required 1.25 standard direct labor hours. There were 1,300 actual hours used in the Assembly Department during March at an actual rate of $12 per hour. The standard direct labor rate is $12.5 per hour.
Required:
Assuming direct labor for a month is paid on the fifth day of the following month, journalize the direct labor in the Assembly Department on March 31.
Answer:
Debit Work in process for $15,625
Debit Direct labor time variance for $625
Credit Direct labor rate variance for $650
Credit Wage payable for $15,600
Explanation:
Before preparing the journal, the following calculations are done first:
Wage payable = Actual hours * Actual rate per hour = 1,300 * $12 = $15,600
Direct labor time variance = (Actual hours - Standard hours) * Standard direct labor rate = (1,300 - (1,000 * 1.25)) * $12.50 = $625 Unfavorable
Note: Direct labor time variance is Unfavorable because Actual hours is greater than Standard hours.
Direct labor rate variance = (Actual rate - Standard rate) * Actual hours = ($12 - $12.50) * 1,300 = -$650 Favorable
Note: Direct labor rate variance if Favorable because Actual rate is lower than the Standard rate.
Work in process = Wage payable + Absolute value of direct labor rate variance - Direct labor time variance = $15,600 + $650 - $625 = $15,625
The journal entries will now look as follows:
Date Particulars Debit ($) Credit ($)
Mar. 31 Work in process 15,625
Direct labor time variance 625
Direct labor rate variance 650
Wage payable 15,600
(To record the direct labor in the Assembly Department.)
If contribution margin is $220000, sales is $400000, and net income is $180000, then variable and fixed expenses are:________
Answer:
Total variable cost= $180,000
Fixed costs= $40,000
Explanation:
Giving the following information:
Contribution margin= $220,000
Sales= $400,000
Net income= $180,000
The contribution margin formula is as follow:
Total Contribution margin= sales - total variable cost
Therefore, we need to isolate the total variable cost and replace the variable with the data:
Total variable cost= sales - total contribution margin
Total variable cost= 400,000 - 220,000
Total variable cost= $180,000
Finally, the fixed costs:
Fixed costs= total contribution margin - net income
Fixed costs= 220,000 - 180,000
Fixed costs= $40,000
Selected current year company information follows:
Net income $15,953
Net Sales 712,855
Total liabilities, beginning-year 83,932
Total liabilities, end-of-year 103,201
Total stockholders' equity, beginning-year 198,935
Total stockholders' equity, end-of-year 121,851
Total asset turnover is:________.
a. 2.24 times
b. 2.81 times
c. 3.64 times
d. 4.67 times
e. 6.28 times
Answer:
b. 2.81 times
Explanation:
Calculation to determine Total stockholders' equity, end-of-year 121,851
Total asset turnover is:
First step is to calculate the Total assets
Beginning Ending
Total liabilities $83,932 $103,201
Total equity 198,935 121,851
Total assets $282,867 $225,052
Now let determine the Total asset turnover
Total asset turnover = $712,855/[($282,867 + $225,052)/2]
Total asset turnover= 2.81 Times
Therefore Total stockholders' equity, end-of-year 121,851
Total asset turnover is:2.81 Times
phân tích phạm trù hàng hoá sức loa động theo quan điểm cua chủ nghĩa mác.Thực trạng thị trường sức lao động ở nước ta hiện nay. Là sinh viên trường đại học anh chị nhận thấy mình có trách nhiệm gì trong việc nâng cao chất lượng nguồn nhân lực đáp ứng yêu cầu của sự nghiệp công nghiệp hoá đất nước
Emmitt uses his leadership and position to produce effects on others and influence his followers. What term is used to describe this ability of leadership?
a. Coercion
b. Force
c. Power
d. Authority
Answer:
c. Power
Explanation:
Leadership can be defined as a process which typically involves motivating, encouraging and inspiring employees working under an individual to be innovative and create positive changes that will foster growth and enhance the success of a business firm or company in the future.
A leader can be defined as an individual who is saddled with the responsibility of controlling, managing and maintaining a group of people under him or her. Some types of power expressed by leaders are referent power, legitimate power, coercive power, etc.
Generally, leaders use their powers to get other people to follow them. Some forms of power result from a formalized position in the organization while others are derived from personal characteristics or knowledge.
In this scenario, Emmitt uses his leadership and formal position to produce effects on others and influence his followers. Thus, the terminology which is used to describe Emmit's ability of leadership is power.
In conclusion, power is based on three (3) main factors, which are leader, follower and situation.
Daphne Inc., a steel manufacturing company, is planning to buy a new plant at $1,090,000. The life of the plant is estimated to be 5 years and has cash flows of $109,000, $218,000, $327,000, $436,000, and $545,000. Calculate the payback period for the new plant.
a. 5 years
b. 2 years
c. 4 years
d. 3 years
Answer:
The payback period is exactly 4 years.
Explanation:
Giving the following information:
Initial investment= $1,090,000
Cf1= 109,000
Cf2= 218,000
Cf3= 327,000
Cf4= 436,000
Cf5= 545,000
The payback period is the time required to cover the initial investment:
Year 1= 109,000 - 1,090,000= -981,000
Year 2= 218,000 - 981,000= -763,000
Year 3= 327,000 - 763,000= 436,000
Year 4= 436,000 - 436,000= 0
The payback period is exactly 4 years.
At the end of the first year of operations, 21,500 units remained in the finished goods inventory. The unit manufacturing costs during the year were as follows:
Direct materials $30
Direct labor 18
Fixed factory overhead 22
Variable factory overhead 14
Required:
Determine the cost of the finished goods inventory reported on the balance sheet under (a) the absorption costing concept and (b) the variable costing concept.
Answer and Explanation:
The computation of the cost of the finished goods inventory reported is as follows:
Absorption costing is
= ($30 + $18 + $22 + $14) × 21,500 units
= $1,806,000
And,
Variable costing is
= ($30 + $18 + 14) × 21,500
= $1,333,000
In this way the cost of the finished goods inventory should be determined
The following production data were taken from the records of the Finishing Department for June: Inventory in process, June 1 (35% completed) 5,000 units Completed units during June 64,500 units Ending inventory (63% complete) 4,400 units What is the number of material equivalent units of production in the June 30, Finishing Department inventory, assuming that the first-in, first-out method is used to cost inventories and materials were added at the beginning of the process?
a. 4,400 units
b. 59,500 units
c. 68,900 units
d. 63,900 units
Answer:
d. 63,900 units
Explanation:
Particulars Unit
Beginning inventory -
Units started and completed 59,500 [64,500 - 5,000]
Closing WIP for materials 4,400
Equivalent units for materials 63,900
So, the number of material equivalent units of production in the June 30, Finishing Department inventory is 63,900 units
Front Company had net income of $73,500 based on variable costing. Beginning and ending inventories were 900 units and 1,400 units, respectively. Assume the fixed overhead per unit was $7.95 for both the beginning and ending inventory. What is net income under absorption costing
Answer:
$77,475
Explanation:
Calculation to determine net income under absorption costing
Using this formula
Net income=Net income+(Ending inventories×fixed overhead per unit)- (Beginning Inventories × Fixed overhead per unit)
Let plug in the formula
Net income=$73,500 + (1,400 units x $7.95) - (900 x $7.95)
Net income=$73,500+$11,130-$7,155
Net income=$77,475
Therefore net income under absorption costing is $77,475
Berkeley Corporation has a policy of furnishing new automobiles to the athletic department of the local university. The automobiles are used for short periods of time by the extremely popular head basketball coach. When the automobiles are returned to Berkeley Corporation, they are sole to regular customers. The owner of Berkeley Corporation maintains that any such cars held for more than one year should qualify as Sec. 1231 property. Do you agree?
Answer:
Berkeley Corporation
No. I do not agree with the owner of Berkeley Corporation.
Vehicles or automobiles are section 1245 property and not section 1231.
Explanation:
The IRS regards Section 1231 properties to include buildings, machinery, land, timber, and other natural resources, unharvested crops, cattle, livestock, and leaseholds that are held in a business or trade for at least one year. They are used in trade and not for sale. On the other hand, Section 1245 properties include all depreciable or amortizable tangible personal property, such as furniture, automobiles, and equipment, or other intangible personal property, such as a patent or license.
Based on the information given, it's not section 1231. Therefore, I do not agree with the owner of Berkeley Corporation.
Section 1231 simply means a term that is used to describe a property relating to the United States Internal Revenue Code. Vehicles or automobiles are section 1245 property and not section 1231.
The Internal Revenue Service regards Section 1231 properties like buildings, machinery, land, timber, and other natural resources, unharvested crops, cattle, livestock, etc. Section 1245 represents properties that are depreciable like furniture, automobiles, equipment, etc.
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High-Low Method
The manufacturing costs of Ackerman Industries for the first three months of the year follow:
Total Costs Units Produced
January $1,900,000 20,000 units
February 2,250,000 27,000
March 2,400,000 30,000
Using the high-low method, determine (a) the variable cost per unit and (b) the total fixed cost.
a. Variable cost per unit $
b. Total fixed cost $
Answer:
Variable cost per unit= $50
Fixed costs= $900,000
Explanation:
Giving the following information:
Total Costs Units Produced
January $1,900,000 20,000 units
February 2,250,000 27,000
March 2,400,000 30,000
To calculate the unitary variable cost and the fixed cost under the high-low method, we need to use the following formulas:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (2,400,000 - 1,900,000) / (30,000 - 20,000)
Variable cost per unit= $50
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 2,400,000 - (50*30,000)
Fixed costs= $900,000
Fixed costs= LAC - (Variable cost per unit* LAU)
Fixed costs= 1,900,000 - (50*20,000)
Fixed costs= $900,000
Using the reciprocal services method, which of the following equations represents the algebraic expressions for the two equations needed to capture the total costs of a Janitorial Department (J) that includes not only $500,000 of direct costs but also 20% of the Maintenance Department (M) cost and a Maintenance Department that includes not only $250,000 of direct costs but also 40% of the Janitorial Department? (Hint: This equation is derived from the two separate equations representing each department's costs.)
a. J = ($500,000 × 0.20) + [($250,000 × 0.20) + J]
b. J = $500,000 – (0.20 × $250,000) – (0.20 × J)
c. J = $500,000 + [(0.20 ÷ $250,000) + (0.40 ÷ J)]
d. J = $500,000 + {0.20 × [$250,000 + (0.40 × J)]}
Answer:
The equation that represents the algebraic expressions for the two equations needed to capture the total costs of the Janitorial Department is:
d. J = $500,000 + {0.20 × [$250,000 + (0.40 × J)]}
Explanation:
a) Data and Calculations:
Direct costs Percent of Service Dept.
Janitorial Department (J) $500,000 20% of M
Maintenance Department (M) $250,000 40% of J
b) The reciprocal services method reapportions the costs of the service departments to other service departments using a system of simultaneous equations. With its complications, the reciprocal method is the most accurate and equitable method for apportioning service departments' costs to production departments.
A granary allocates the cost of unprocessed wheat to the production of feed, flour, and starch. For the current period, unprocessed wheat was purchased for $120,000, and the following quantities of product and sales revenues were produced.
Product Pounds Price per Pound
Feed 100,000 $ 0.70
Flour 50,000 2.20
Starch 20,000 1.00
How much of the $120,000 cost should be allocated to flour if the value basis is used?
a) $24,500.
b) $84,000.
c) $66,000.
d) $70,000.
e) $200,000.
Answer:
c) $66,000.
Explanation:
The computation is shown below:
The value allocated is as follows:
Feed (100,000 × 0.7)=70,000
Flour (50,000 × 2.2)=110,000
Starch (20,000 × 1)=20,000
Total 200,000
Now allocation to the flour is
= (110,000 ÷ 200,000 × 120,000)
= $66,000
hence, the option c is correct
Bow-Wow Company manufactures a product with a unit variable cost of $50 and a unit sales price of $88. Fixed manufacturing costs were $240,000 when 10,000 units were produced and sold. The company has a one-time opportunity to sell an additional 1,000 units at $70 each in a foreign market which would not affect its present sales. If the company has sufficient (excess) capacity to produce the additional units, acceptance of the special order would affect net income as follows:
a. Income would decrease by $4,000.
b. Income would increase by $4,000.
c. Income would increase by $70,000.
d. Income would increase by $20,000.
Which of the following describe management's use of a master budget: Multiple select question. Helps in determining bonuses to managers who meet budgets Helps analyze differences between actual and budgeted results Helps to place blame on managers who do not meet budgets Helps reveal undesirable outcomes Helps in planning and control activities
Answer:
Helps analyze differences between actual and budgeted results
Helps reveal undesirable outcomes
Helps in planning and control activities
Explanation:
A master budget comprised of future income statement or planned operating budget and the future balance sheet or financial budget that represent the goals and objectives of the organization and the ways to achieve them. It identified the actual & budgeted results difference, It disclosed the non-desirable results and also it helps in activities that deals in planning & controlling
Therefore the above statements should be correct
When interest is compounded continuously, the amount of money increases at a rate proportional to the amount S present at time t, that is, dS/dt=rS, where r is the annual rate of interest.
a) Find the amount of money accrued at the end of 5 years when $6000 is deposited in a savings account drawing 534% annual interest compounded continuously. (Round your answer to the nearest cent.)
b) In how many years will the initial sum deposited have doubled? (Round your answer to the nearest year.)
c) Use a calculator to compare the amount obtained in part a) with the amount S=6000(1+14(0.0575))5(4) that is accrued when interest is compounded quarterly. (Round your answer to the nearest cent.)
Answer:
See explanation
Explanation:
Given that;
A = P(1 + r/n)^nt
Where;
P= $6000
r = 5 3/4%
t = 5 years
n= 1
A = 6000(1 + 0.0575)^5
A= $ 7935
b) What time will A become $12,000
12000 = 6000(1 + 0.0575)^t
12000/6000 = (1 + 0.0575)^t
2 = (1 + 0.0575)^t
Take logarithm of both sides
log2 = t log(1 + 0.0575)
t= log2/log(1 + 0.0575)
t= 0.3010/0.0243
t = 12 years
c) when compounded quarterly;
S= 6000(1 + 1/4(0.0575))^(5)(4)
S= $7982
The amount when interest is compounded quarterly is higher than when it is compounded annually because the interest increases as the number of compounding periods increases.
A bank loan has been given to a customer at a bank with a FIXED nominal interest rate of 13%. The real
interest rate for the bank's profit margin is 10%.
The next year, unanticipated INFLATION has increased another 7%.
The new real interest rate is
and the
was hurt.
O 3%; lender
O 15%; lender
O 8%; borrower
O 3%; borrower
O 5%; lender
O 8%; lender
Answer:
The new real interest rate is 15%
and the lender was hurt.
O 15%; lender
Explanation:
a) Data and Calculations:
Fixed nominal interest rate = 13%
Real interest rate for the bank's profit margin = 10%
Inflation rate = 3% (13% - 10%)
Unanticipated inflation rate = 7%
Nominal interest rate = 17% (10% + 7%)
But the bank could not increase its fixed nominal interest rate to match the nominal interest rate.
The ROI on sustainability efforts can be difficult to quantify because a. the payback period is on the same time frame. b. the payback period is on a different time frame. c. benefits from such projects are tangible. d. an excess of necessary data for accurate calculation is readily available.
Answer:
B)the payback period is on a different time frame.
Explanation:
Return on sustainability investment can be regarded as performance measure that is been utilized in evaluation of the gains which is produced due to result of corporate sustainability initiatives as regards amount of money that is invested in those initiatives.
Sustainable return on investment can be regarded as methodology used in identification as well as quantifying of environmental and societal, impacts of investment as regards a projects and initiatives.
It should be noted that The ROI on sustainability efforts can be difficult to quantify because the payback period is on a different time frame.
The agreement of the trial balance totals is an indication that all transactions have been properly recorded in the books of accounts. Do you agree with this statement?
Answer:
No
Explanation:
The trial balance shows the totals of all transactions that have been recorded. It has no way of knowing if there are additional transactions that have not been recorded.
In addition to cost, what factors should be considered in selecting a building contractor? What can go wrong if the lowest bid is selected and nothing else is considered?
Answer:
The proper answer about what the question asked is explained below.
Explanation:
To begin with, when it comes to the construction area there are a lot of factors to consider at the time of selecting a building constructor. It is not just about the cost, but most importantly of all about the level of quality and recognition the constructor has in its business area. As well as the knowledge that will come all in the same package because the person that is in charge of constructing a building must be a professional in that. So eventhough the cost is important for the business the quality of the service hired is further more important. That is because in the case the lowest bid is selected and it turns out that it is not a very good one then future trouble can come with that decision, like piping problems or gas problems or structures problems, etc. And that will not only led to more future expenses but also to possible damage to some lives.
Using the Chipotle example we have discussed in class imagine that all employees are paid $15/hour, the grill costs $300, and each cash register costs $200. All other utensils and items come at zero cost. Applying the principles of business process improvement that we have discussed in class, what is the lowest cost Chipotle can achieve with the highest flow rate
Answer:
The correct answer will be "$620".
Explanation:
It is important to note that certain principles are involved in the process of streamlining business processes, including:
Interpersonal skills of the organizational leaders.Client focus entirely, defined objectives, accuracy, and so on., are encouraged.The lowest cost will be:
= [tex](15\times 8)+300+200[/tex]
= [tex]120+300+200[/tex]
= [tex]620[/tex] ($)
Chipotle can achieve the lowest cost of $ 620 with the highest flow rate. Thus, the correct answer would be "$ 620".
What are the principles of business process improvement?Collect User Information (UX), Customer Information (CX), and Organizational Change Management.Do not think that a change in technology will change your processes.Improve and renovate.End-to-end continuous improvement.The lowest cost can be achieved:
[tex]= (15\times8)+ \$200 + \$300\\\\= \$620[/tex]
Thus, the correct answer is $620, which is the lowest cost chipotle can achieve with the highest flow rate.
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A campus deli serves 200 customers over its busy lunch period from 11:00 a.m. to 1:00 p.m. A quick count of the number of customers waiting in line and being served by the sandwich makers shows that an average of 10 customers are in process at any point in time. The average amount of time that a customer spends in process is _______ minutes (round to the nearest integer).
Answer: 2 hours
Explanation:
TB MC Qu. 08-104 Marlow Company purchased a point of... Marlow Company purchased a point of sale system on January 1 for $3,400. This system has a useful life of 10 years and a salvage value of $400. What would be the depreciation expense for the first year of its useful life using the double-declining-balance method
Answer:
$680
Explanation:
Calculation to determine What would be the depreciation expense for the first year of its useful life using the double-declining-balance method
Depreciation expense=3400*(100%/10 * 2)
Depreciation expense=3400*.2
Depreciation expense= 680
Therefore What would be the depreciation expense for the first year of its useful life using the double-declining-balance method is $680
tổ chức kiểm toán nội bộ cho hoạt động quản lý hàng tồn kho
Answer:
Hmmmmmmmm its động
Explanation:
Yw
Answer:
I don’t know
Explanation:
Miller and Sons' static budget for 10,500 units of production includes $41,000 for direct materials, $50,300 for direct labor, variable utilities of $7,600, and supervisor salaries of $14,600. A flexible budget for 12,100 units of production would show Round your final answer to the nearest dollar. Do not round interim calculations. a.the same cost structure in total b.direct materials of $47,248, direct labor of $57,965, utilities of $8,758, and supervisor salaries of $14,600 c.direct materials of $47,248, direct labor of $57,965, utilities of $8,758, and supervisor salaries of $17,520 d.total variable costs of $113,500
Answer:
b.direct materials of $47,248
Direct labor=$57,965
Variable Utilities=8,758
Supervisor salaries $14,600
Explanation:
Computation of flexible budget
FLEXIBLE BUDGET
Direct materials
$41,000/10,500*12,100
Direct materials= $47,248
Direct labor=50,300/10500*12100
Direct labor=$57,965
Variable Utilities
=7600/10500*12100
Variable Utilities=8,758
Supervisor salaries $14,600 Fixed cost
Universal Air is a no-growth firm and has two million shares outstanding. It expects to earn a constant $20 million per year on its assets. If it has no debt, all earnings are paid out as dividends, and the cost of capital is 10 percent, calculate the current price per share of the stock.
Answer:
$100/share
Explanation:
Calculation to determine the current price per share of the stock.
First step
EPS = DPS = $20,000,000/($20,000,000*10%)
EPS = DPS = $20,000,000/$2,000,000
EPS = DPS = $10 per share
Now let determine the current price per share of the stock
P0 = 10/0.10
P0= $100/share
Therefore current price per share of the stock is $100/share
HELPPP PLEASE !
1. Write one paragraph about a person who decides that taking an hourly job with
tips is a better choice than accepting a salaried job with benefits.
We want to help the user to understand why it gives more preference to the hourly job as compared to the salaries job with benefits
The reasons why the hourly job is better than accepting the salaried job with benefits are as follows:
Hourly job considered to be the goods job for earning the money in haste or at the time when the insurance & vacation should not be considered as the deciding factor. The question that arises is that you are searching for a job or interested to run a family business that has various benefits.Salary jobs provides the compensation along with the other benefits the company provides like insurance, vacation time, incentives, life insurance. In the case of hourly job, the number of hours they actually work and how much energy they would put into their work. They could choose their time also eligible for overtimeIn the case of salaried job, the same amount of money should be provided but along with it the stress should be there like working on weekends, working 10-12 hours a day, etcTherefore in these ways hourly job is better than accepting a salaried job with benefits
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If a $500 billion increase in investment spending increases income by $500 billion in the first round of the multiplier process and by $450 in the second round, income will eventually increase by:_________
A. $2,500 billion
B. $3000 billion
C. $4,000 billion
D. $5,000 billion
Answer:
D. $5,000 billion
Explanation:
quizlet
In Investment Multiplier concept If a $500 billion increase in investment spending increases income by $500 billion in the first round of the multiplier process and by $450 in the second round, income will eventually increase by $5,000 billion. Option D is Correct.
What is Investment Multiplier?The idea that every increase in public or private investment spending has a greater than proportionately favorable influence on aggregate income and the overall economy is known as the "investment multiplier." It is based on John Maynard Keynes' economic theories.
The investment multiplier is the ratio of change in Y to changes in I where Y = investment and I = investment. It can be derived from the equilibrium equation (Y = C + I + G) and the consumption equation (C = a + bY).
Thus with rise in multiplier by $450 and then income will elevated to $5000 Billion.
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Required information Skip to question [The following information applies to the questions displayed below.] The Tennis Times (TTT) is a publisher of magazines. Its accounting policy for subscriptions follows: Revenues Revenues from our magazine subscription services are deferred initially and later recognized as revenue as subscription services are provided. Assume TTT (a) collected $420 million in 2018 for magazines that will be distributed later in 2018 and 2019, (b) provided $204 million of services on these subscriptions in 2018, and (c) provided $216 million of services on these subscriptions in 2019. Required: Using the information given, indicate the accounts, amounts, and accounting equation effects of transactions (a), (b), and (c). (Enter any decreases to assets, liabilities, or stockholders equity with a minus sign. Enter your answers in whole dollars.)
Answer:
The solution to the given question is defined in the attached file please find it.
Explanation:
Suppose that the equilibrium price and quantity for 1 bedroom apartments in Orange County is $2,000 and 250,000 respectively. What is the most likely outcome from the Orange County Board of Supervisors' implementation of a price ceiling at $2,500 for a 1 bedroom apartment
Answer: c. No effect
Explanation:
This is a non-binding price ceiling. A none-binding price ceiling is a price ceiling that is higher than the equilibrium price for a commodity in the market. As a result, there will be no effect on the market.
The reason being that a price ceiling is a price that companies and people are not meant to exceed. If this price is already higher than the equilibrium price, there would be no need to exceed or go below it it so there would be no effect.
