Answer:
1. See part 1 below for the calculations.
2. We have:
Division A's Residual Income (loss) = $180,000
Division B's Residual Income (loss) = ($140,000)
Division C's Residual Income (loss) = $0
3.a. Only Division B will probably accept the investment opportunity.
3.b. Divisions A and B will probably accept the investment opportunity.
Explanation:
Note: This question is not complete as the part 3-b of the requirement is omitted. The question is therefore completed before answering the question by providing the part 3-b as follows:
b. If performance is being measured by residual income, which division or divisions will probably accept the opportunity?
The explanation of the answer is now provided as follows:
The following are given:
Division A Division B Division C
Sales $12,000,000 $14,000,000 $25,000,000
Average operating assets $3,000,000 $7,000,000 $5,000,000
Net operating income $600,000 $560,000 $800,000
Min. req'd rate of return 14% 10% 16%
1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover.
The relevant formulae are as follows:
Margin = Net Operating Income / Sales
Turnover = Sales / Average Operating Assets
Return on Investment = Margin * Turnover
Therefore, we have:
Division A:
Margin = $600,000 / $12,000,000 = 0.05, or 5%
Turnover = $12,000,000 / $3,000,000 = 4 times
Return on Investment = 5% * 4 = 0.20, or 20%
Division B:
Margin = $560,000 / $14,000,000 = 0.04, or 4%
Turnover = $14,000,000 / $7,000,000 = 2 times
Return on Investment = 4% * 2 = 0.08, or 8%
Division C:
Margin = $800,000 / $25,000,000 = 0.032, or 3.20%
Turnover = $25,000,000 / $ 5,000,000 = 5 times
Return on Investment = 3.2% * 5 = 0.16, or 16%
2. Compute the residual income (loss) for each division.
The following is the formula to use:
Residual Income (loss) = Net Operating Income - (Minimum Required Return * Average Operating Assets)
Therefore, we have:
Division A's Residual Income (loss) = $600,000 - (14% * $3,000,000) = $180,000
Division B's Residual Income (loss) = $560,000 - (10% * $7,000,000) = ($140,000)
Division C's Residual Income (loss) = $800,000 - (16% * $5,000,000) = $0
3-a. Assume that each division is presented with an investment opportunity that would yield a 15% rate of return. If performance is being measured by ROI, which division or divisions will probably accept the opportunity?
If a division's Return on Investment (ROI) is less than 15%, the decision criterion is to accept the investment opportunity. Otherwise, it will be rejected. Therefore, only Division B is will probably accept the investment opportunity, based on the results of Part 1 above. Division A and C will reject it.
3-b. Assume that each division is presented with an investment opportunity that would yield a 15% rate of return. If performance is being measured by residual income, which division or divisions will probably accept the opportunity?
The decision criterion is for a division to accept the investment opportunity if its minimum required rate of return is lower than 15%. Otherwise, it will be rejected.
Based on the information in the question, Divisions A and B will probably accept the investment opportunity. Division C will reject it.
Sunland Company is about to issue $262,700 of 6-year bonds paying an 9% interest rate, with interest payable semiannually. The discount rate for such securities is 8%.
Required:
In this case, how much can Sunland expect to receive from the sale of these bonds?
Answer:
Amount from sale of bonds $275,028
Explanation:
The computation is shown below;
Particulars Amount PV factor Present value of cash flows
Interest $11,821.50 9.38507 $1,10,946
($262,700 × 0.09 × 6 ÷ 12)
Principal $262,700 0.6246 $164,082
Amount from sale of bonds $275,028
The nominal interest rate is 6%. Expected inflation is 2%. Actual inflation is 1%. Calculate the ex-ante and ex-post real interest rates. Who benefits from lower actual inflation
Answer:
1. Ex-ante real interest rate is:
= 4%
2. Ex-post real interest rate is:
= 5%
3. The LENDER benefits from lower actual inflation. By this, the Ex-ante real interest rate is lower than the Ex-post real interest rate at which the borrower will repay the loan.
Explanation:
a) Data and Calculations:
Nominal interest = 6%
Expected inflation = 2%
Actual inflation = 1%
Ex-ante real interest rate = 4% (6% - 2%)
Ex-post real interest rate = 5% (6% - 1%)
b) The implication is that inflation is lower than expected, and this benefits the lender at the expense of the borrower. The opposite is applicable when the inflation is higher than expected, and the result benefits the borrower at the expense of the lender.
Gizmo Inc. purchased a one-year insurance policy on October 1 for $5,280. The adjusting entry on December 31 would be: (If an amount box does not require an entry, leave it blank.)
Answer and Explanation:
The adjusting entry is shown below:
Insurance Expense ($5,280 × 3 months ÷ 12 months) $1,320
To Prepaid Insurance $1,320
(being the insurance expense is recorded)
Here the insurance expense is debited as it increased the expense and credited the prepaid insurance as it decreased the assets
Olsen Company uses a standard cost system for its production process. Olsen Company applies overhead based on direct labor hours. The following information is available for July: Standard: Direct labor hours per unit 2.20 Variable overhead per hour $2.50 Fixed overhead per hour (based on 11,990 DLHs) $3.00 Actual: Units produced 4,400 Direct labor hours 8,800 Variable overhead $29,950 Fixed overhead $42,300 Refer to Olsen Company Using the three-variance approach, what is the efficiency variance
Answer:
1800
Explanation:
I’ll give 20 points to the best answer !!!
Answer:
The answer is "Slide Master View"
Explanation:
Slide Master Look is indeed the name of this feature. This can help you keep track of all the presentations you've created and change those ones that require work or even more information. The additional feature is the ability to change the presentation's actual picture, as it may be extended to all slides. Slide master view also allows you to change the text format & placeholders.
A Type I subsequent event refers to _______. an event that occurred after the date of the financial statements an event that is typified by debit entries to contra-revenue accounts a contingent event, that may or may not occur an event that most likely occurred before the date of the financial statements
Answer:
that most likely occurred before the date of the financial statements
Explanation:
Financial accounting is an accounting technique used for analyzing, summarizing and reporting of financial transactions like sales costs, purchase costs, payables and receivables of an organization using standard financial guidelines such as Generally Accepted Accounting Principles (GAAP) and financial accounting standards board (FASB).
Basically, financial statements are formally written records of the business and financial activities of a business entity or organization. The four (4) main types of financial statements are; cash-flow statement, balance sheet, statement of changes in equity and income statement.
Furthermore, there are two (2) main methods used in financial accounting for analyzing financial statements and these are;
I. Vertical analysis.
II. Horizontal analysis.
A Type I subsequent event refers to an event that most likely occurred before the date of the financial statements. Thus, it must have been reported or posted before the date of publishing a financial statement.
On the other hand, any event that is most likely to occur after the date a financial statement is issued, is referred to as a Type II subsequent.
During January, Dream House Builders, Inc. incurred $550 of actual indirect materials costs, as supported by materials requisitions.
Required:
Draw the journal entry.
Answer and Explanation:
The journal entry is given below:
Factory overhead Dr $550
To Raw material inventory $550
(being the actual indirect material cost is recorded)
Here the factory overhead is debited as it increased the expense while the raw material inventory is credited as it decreased the assets
On May 11, 2012, your calendar year firm pays $6,000 for a used computer server, its only asset purchase for the year, and estimates that the server will have a salvage value of $500. If no Section 179 deduction is taken, what is your firm’s maximum 2012 deduction for depreciation?
Answer:
Calendar-Year Firm
The firm’s maximum 2012 deduction for depreciation is:
= $917.
Explanation:
a) Data and Calculations:
Purchase of a used computer server on May 11, 2012 = $6,000
Since the server is a used one, we assume a four-year useful life
Salvage value = $500
Assumed useful life = 4 years
Depreciable amount = $5,500 ($6,000 - $500)
Since the firm does not take the Section 179 Deduction, which would have allowed it to expense the whole depreciable amount this 2012, the depreciation expense for the first year is calculated as follows:
Annual depreciation expense, using the straight-line method = $1,375
For 2012, the firm's maximum deduction for depreciation will be:
= $917 ($1,375 * 8/12) (covering the months from May 11 to December 31)
When the economy is in short-run equilibrium, Group of answer choices there are increases in inventory. people want to buy more than will be produced. there are decreases in inventory. total expenditures equal total production.
Answer:
total expenditures equal total production.
Explanation:
In the case when the economy is in the short-run equilibrium that means the total expenditures should be equivalent to the total production. In other words, we can say that the expenditure that can be incurred should be equal to the production
Hence, the last option is correct
In (Noon) Company, direct materials are added at the beginning of the production process. Conversion costs are incurred evenly throughout the production process. Before inspection, some units are spoiled due to undetectable materials defects. Inspection occurs when units are 60% converted. Spoiled units generally constitute 6% of the good units. Data for December 2019 are as follows: WIP, beginning inventory 12/1/2019 Direct materials 22,500 units (100% complete) Conversion costs (55% complete) Started during December 76,700 units Completed and transferred out 12/31/2019 72,500 units WIP, ending inventory 12/31/2019 18,400 units Direct materials (100% complete) Conversion costs (65% complete) What is the number of normal spoilage units?
Answer:
Following are the responses to the given question:
Explanation:
Statement In December the computation of typical spoiling units shall be shown:
Particulars Units
WIP Inventory Start on 12 January 2019 22,500
Departments began in December 76,700
Total stock available for both the month 99,200
Less: transferred units on 31 December 2019 72,500
Inventory of Less: WIP on 31 December 2019 18,400
Inventory of Balance (Normal Spoilage units) 8,300
Novak Financial Services performs bookkeeping and tax-reporting services to startup companies in the Oconomowoc area. On January 1, 2020, Novak entered into a 3-year service contract with Walleye Tech. Walleye promises to pay $10,900 at the beginning of each year, which at contract inception is the standalone selling price for these services. At the end of the second year, the contract is modified and the fee for the third year of services is reduced to $8,700. In addition, Walleye agrees to pay an additional $21,800 at the beginning of the third year to cover the contract for 3 additional years (i.e., 4 years remain after the modification). The extended contract services are similar to those provided in the first 2 years of the contract.
Required:
a. Prepare the journal entries for Tyler in 2019 and 2020 related to this service contract.
b. Prepare the journal entries for Tyler in 2020 related to the modified service contract, assuming a prospective approach.
c. Repeat the requirements for part (b), assuming Tyler and Walleye agree on a revised set of services (fewer bookkeeping services but more tax services) in the extended contract period and the modification results in a separate performance obligation
Answer: See explanation
Explanation:
a. 1 jan 2020
Debit Cash $10,900
Credit Unearned revenue $10,900
31st dec 2020
Debit Unearned revenue $10,900
Credit Service revenue $10,900
1 jan 2020
Debit Cash $10,900
Credit Unearned revenue $10,900
31st dec 2020
Debit Unearned revenue $10,900
Credit Service revenue $10,900
b. 1 Jan 2021
Debit Cash $30500
Credit Unearned revenue $30500
31st dec 2020
Debit Unearned revenue $7,625
Credit Service revenue $7,625 ($30500/4)
c. 1 Jan 2020
Debit Cash $30500
Credit Unearned revenue $30500
31st Dec 2020
Debit Unearned revenue $8,700
Credit Service revenue $8,700
Which of the following statements about striving to reduce labor costs per pair produced at each of the company's plants is true?
a. A company cannot achieve labor costs per pair produced that are close to the lowest in the industry (in those geographic regions where it has plants) unless its annual total compensation of plant workers is below the average annual total compensation paid by all companies with plants in these same regions.
b. All companies, regardless of the strategy being employed, should pursue actions to manage employee compensation and labor productivity in a manner that results in labor costs per pair produced that are equal to (or very close to) the industry-low in each region where the company has plants.
c. It is very difficult for a company producing branded footwear with a high S/Q rating to achieve labor costs per pair produced that are below the industry average in each geographic region where the company has plants.
d. A company pursuing a low-cost provider strategy is better able to pursue actions aimed at achieving low labor costs per pair produced in each of its plants (as compared to the labor costs of companies with plants in the same regions) than is a company pursuing a differentiation strategy.
e. It is more cost effective for a company to compensate plant workers at levels that are close to the highest in the industry in each geographic region where it has plants than it is for a company to pursue actions to keep labor costs per pair produced below the industry average in each geographic region where it has plants.
Answer:
b. All companies, regardless of the strategy being employed, should pursue actions to manage employee compensation and labor productivity in a manner that results in labor costs per pair produced that are equal to (or very close to) the industry-low in each region where the company has plants.
Explanation:
The less labor cost of production per pair could be attained in following two ways
1. The productivity level is icnreased
2. The compensation should be managed and it provides the combination of both fixed and variable. Also it pays the high compensation but at the more productivity rate due to which the labor cost per pair would fall
So as per the given situation, the option b is correct
Scenario 34-1. Take the following information as given for a small, imaginary economy: When income is $10,000, consumption spending is $6,500. When income is $11,000, consumption spending is $7,250. Refer to Scenario 34-1. The marginal propensity to consume (MPC) for this economy is
Answer:
0.75
Explanation:
Marginal Propensity to Consume (MPC) is the change in consumption due to change in income
Change in consumption = $7,250 - $6,500 = $750
Change in income = $11,000 - $10,000 = $1,000
MPC = Change in consumption / Change in income
MPC = 750 / 100
MPC = 0.75
Stock A has an expected return of 8%, stock B has an expected return of 2%, and the return on Treasury-Bills is 4%. You buy $200 of A, short $100 of B and invest the short proceeds in Treasury Bills. What is the expected return of your portfolio?
A. 8%
B. 9%
C. 10%
D. 11%
Answer:
The expected return of the portfolio is:
= C. 10%
Explanation:
a) Data and Calculations:
Expected return of Stock A = 8%
Expected return of Stock B = 2%
Return of Treasury = 4%
Cost of Stock A = $200
Sale of Stock B = $100
Investment in Treasury Bills = $100
Stock A Stock B Treasury Bills Portfolio
Expected return 8% 2%
Weight of stock 0.667 0.333
Return 0.0534 0.0067 0.04 0.1001
Portfolio return = 10%
An individual has $30,000 invested in a stock with a beta of 0.7 and another $70,000 invested in a stock with a beta of 1.2. If these are the only two investments in her portfolio, what is her portfolio's beta? Round your answer to two decimal places.
Answer:
1.05
Explanation:
Beta measures systematic risk. Systemic risk are risk that are inherent in the economy. They cannot be diversified away.
The higher beta is, the higher the systemic risk and the higher the compensation demanded for by investors
The portfolio's beta can be determined by adding together the weighted beta of each stock in the portfolio
weighted beta of a stock = percentage of the stock in the portfolio x beta of the stock
total value of the portfolio = $30,000 + $70,000 = $100,000
percentage of stock A in the portfolio = $30,000 / $100,000 = 0.30
percentage of stock B in the portfolio = $70,000 / $100,000 = 0.70
weighted beta of stock A = 0.30 x 0.7 = 0.21
weighted beta of stock B = 0.70 x 1.2 = 0.84
Portfolio beta = 0.21 + 0.84 = 1.05
Saunders and Flimsy Partnership paid dividends of $0.27 and $0.15 per share last year. If yesterday's closing price was $12.27, what is the current yield on the stock
Answer:
the current yield on the stock is 3.42%
Explanation:
the computation of the current yield on the stock is shown below:
Current yield = Annual dividends paid ÷ Current market closing price
= ($0.27 + $0.15) ÷ $12.27
= $0.42 ÷ $12.27
= 3.42%
hence, the current yield on the stock is 3.42%
we simply applied the above formula to determine the current yield on the stock
The operating income calculated using variable costing and absorption costing amounts to $9,100 and $11,200. There were no beginning inventories. Determine the total fixed manufacturing overhead that will be expensed under absorption costing for the year.
Answer:
$2,100
Explanation:
The difference between variable costing income and absorption costing income arises due to fixed cost deferred in inventory. This is the total fixed manufacturing overhead that will be expensed under absorption costing.
Calculation :
Fixed Cost in Inventory = $11,200 - $9,100
= $2,100
Mary makes 10 pies and 20 cakes a day and her opportunity cost of producing a cake is 2 pies. Tim makes 20 pies and 10 cakes a day and his opportunity cost of producing a cake is 4 pies. If Mary and Tim specialize in the good in which they have a comparative advantage, _________
A. Mary produces only cakes while Tim produces only pies
B. Mary produces only pies
C. Tim produces both pies and cakes
D. Tim produces only cakes while Mary produces only pies
Answer:
A. Mary produces only cakes while Tim produces only pies
Explanation:
I will start by describing the concept called comparative advantage. Comparative advantage can be described as a businesses ability to produce at a reduced or lower opportunity cost than others. Given this definition, we can see that Mary's opportunity cost of producing cakes is lower than Tims opportunity cost. So Mary has an advantage over Tim in the production of cakes. So the answer to this question is A. Mary should specialize in the making of cakes while Tim should specalize in pie making
There are several attempts to explain Marvels Success via competetive strategy but they fall flat: competitve strategy, with this specific case neither predicts nor explains the outcome why?
Answer:
It has been a well known fact that competitive strategy creates a unique value for a target set of movie customers. However, it is not able to predict nor explain the outcome due to the fact that Marvel only focused on trying to compete to be the best in comic and superhero films which thus resulted in basically a case whereby there was a competition in which one participant wins totally and another loses without gaining any objectives and thus they were not able to win.
Explanation:
This question is taken from a book titled "The Marvel Way: Restoring a Blue Ocean". It was written by W. Chan Kim, Renee Mauborgne, Michael Olenick. The central theme of the book was about one of the greatest turnarounds in modern business history by the then Marvel CEO with the name Peter Cuneo who was responsible for turning the business around and succeeded in launching a blue ocean.
From the question, neither predicts nor explains the outcome because;
It has been a well known fact that competitive strategy creates a unique value for a target set of movie customers. However, it is not able to predict nor explain the outcome due to the fact that Marvel only focused on trying to compete to be the best in comic and superhero films which thus resulted in basically a case whereby there was a competition in which one participant wins totally and another loses without gaining any objectives and thus they were not able to win.
In a continuous review inventory system, the lead time for door knobs is weeks. The standard deviation of demand during the lead time is units. The desired cycle-service level is percent. The supplier of door knobs streamlined its operations and now quotes a 1 week lead time. Refer to the standard normal tableLOADING... for z-values. How much can the safety stock be reduced without reducing the percent cycle-service level? The safety stock can be reduced by nothing door knobs. (Enter your response rounded to the nearest whole number.)
Answer:
The answer is "116 doorknobs".
Explanation:
The standard deviation of the demand before the (four weeks) protection intervals = [tex]\sigma-d \times (\sqrt{L}) = 100 \ units\\[/tex]
The desired cycle service level is [tex]99\%[/tex].Therefore, [tex]z = 2.33[/tex]
The safety stocks for the four-weeks protecting interval are:
Safety stock [tex]= z\times [ \sigma-d \times (\sqrt{L})][/tex]
[tex]= 2.33 \times 100 \\\\= 233\ door\ knobs[/tex]
The safety stocks require for the one-week protection interval are: [tex]\sigma-dLT = \sigma-dt \times (\sqrt{L}) = \sigma-dt \times (\sqrt{4}) = 100\ door\ knobs\\\\\sigma-d = \frac{100}{(\sqrt{4})} = \frac{100}{2} = 50 \ door\ knobs\\\\[/tex]
Safety stock [tex]= z\times \sigma-dt = 2.33 \times 50 = 116.5 \ or\ 117 \ door\ knobs\\\\[/tex]
Safety stock reduction[tex]= 233 -117 = 116 \ door\ knobs[/tex]
Quickbrush Paint Company is developing a linear program to determine the optimal quantities of ingredient A and ingredient B to blend together to make oil-base and water-base paint. The oil-base paint contains 90 percent A and 10 percent B, whereas the water-base paint contains 30 percent A and 70 percent B. Quickbrush currently has 10,000 gallons of ingredient A and 5,000 gallons of ingredient B in inventory and cannot obtain more at this time. Assuming that x represents the number of gallons of oil-base paint, and y represents the gallons of water-base paint, which constraint is correctly represents the constraint on ingredient A?
A. .9x + .3y ≤ 10,000
B. .9A + .1B ≤ 10,000
C. .9x + .1y ≤ 10,000
D. .3x + .7y ≤ 10,000
Answer:
A. 0.9x + 0.3y ≤ 10,000
Explanation:
Given
[tex]x \to[/tex] oil based plant
[tex]y \to[/tex] water based plant
The data can be represented in tabular form as:
[tex]\begin{array}{ccc}{} & {A} & {B} & {x} & {90\%} & {10\%} & {y} & {30\%} & {70\%} & {} & {10000} & {5000}\ \end{array}[/tex]
Considering only A, we have the following constraints:
[tex]A \to 90\% * x + 30\% * y[/tex]
[tex]A \to 0.9x + 0.3y[/tex]
Since the company currently has 10000 of A.
The above constraint implies that, the mixture cannot exceed 10000.
So, we have:
[tex]A \to 0.9x + 0.3y \le 10000[/tex]
Hence, (A) is correct
The manager of Quick Car Inspection reviewed the monthly operating costs for the past year. The costs ranged from $4,400 for 1,400 inspections to $4,200 for 1,000 inspections. Please use the high-low method to calculate the variable cost per inspection.
Answer:
Variable cost per unit= $0.5 per inspection
Explanation:
Giving the following information:
The costs ranged from $4,400 for 1,400 inspections to $4,200 for 1,000 inspections.
To calculate the variable cost under the high-low method, we need to use the following formula:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (4,400 - 4,200) / (1,400 - 1,000)
Variable cost per unit= $0.5 per inspection
________ is the process of coordinating all messages, media and activities used by an organization to communicate with the market across different communication methods
Answer:
integrated Marketing communication
Explanation:
This method is used by firms and companies to brand their communications and also in their coordination. It makes sure that all the various forms of communications are well linked together. This would create a unified communication channel for the consumer during their interactions with the enterprise. the aspects it integrates includes, advertising, public relations, social media and promotion of sales.
Which one of the following was not a contributing cause of the decline in investment and thus the recessionary expenditure gap occurring during the US recession of 2001?
A. Pessimism relating to the stock market crash
B. The collapse of numerous Internet-related start-up firms
C. Low-interest rates
D. Overcapacity in major industries
Answer:
Hence the correct option is Option C. Low interest rates.
Explanation:
Low interest rates:-
Because the real GDP is lower than the potential GDP at the full employment level (Overcapacity). Internet based start ups and stock market are collapsing (The dot com bubble).
when goods are sold to a customer by entity and customer promise to pay amount at certain future time period that is know as
Answer:
Promissory agreement.
Explanation:
A promissory agreement can be defined as an evidence of a debt and as such involves the use of a legal financial tool such as a promissory note as a written promise to declare that a party (borrower) would pay another (lender) at a specific period of time.
Thus, when goods are sold to a customer by a business entity and the customer promises to pay an amount of money at a certain future time period it is known as a promissory agreement.
A promissory note can be defined as a signed document that contains a written promise by a customer to pay a specific amount of money to an individual or business firm, on demand or at a certain future time period, for the goods or services purchased.
The amount of a cash dividend liability is recorded on the date of record because it is on that date that the persons or entities who will receive the dividend are identified.
A. True
B. False
Answer:
A. True
Explanation:
A financial statement is a written report that quantitatively describes a firm's financial health. Under the financial statements is a cash-flow statement, which is used to record the cash inflow and cash equivalents leaving a business firm.
Cash flow statement, also known as the statement of cash flows, contains financial information about operating, financial and investing activities.
Basically, financial statements are formally written records of the business and financial activities of a business entity or organization.
There are four (4) main types of financial statements and these are;
1. Cash flow statement: it contains financial information about operating, financial and investing activities.
2. Statement of changes in equity: it contains financial information about profits or loss, dividends, etc.
3. Income statement: it contains financial information about the income and expenses of an organization.
An income statement comprises of the financial information about the income and expenses of an organization over a specific period of time.
4. Balance sheet: it contains financial information about assets, liability, and equity.
Furthermore, the amount of a cash dividend liability is expected to be recorded on the particular date of record because it is this date that identify the persons or entities who receives the dividend.
Suppose the United States and Japan have the following production possibility tables:
Japan United States
Bolts of Cloth Tons of Wheat Bolts of Cloth Tons of Wheat
1,000 0 500 0
800 100 400 200
600 200 300 400
400 300 200 600
200 400 100 800
0 500 0 1,000
a. Draw each country’s production possibility curve.
b. In whatgooddoesthe United States have a comparative advantage?
c. Is there a possible trade that benefits both countries?
d. Draw their combinedproduction possibility curve. L04
Answer:
a) attached below
b) Wheat production
c) Yes there is a possible trade that benefits both countries
d) attached below
Explanation:
Opportunity cost can be expressed as
= Value/cost of alternative / value/cost of chosen alternative
a) Draw each country's production possibility curve
attached below
b) United state have a comparative advantage in Wheat production because of lower opportunity cost
c) The possible trade that would benefit both countries is when both countries trade on goods that they have lower comparative opportunity cost
i.e. Japan producing just Bolt cloths while United states produce Wheat alone
d) combined production possibility curve
attached below
Which of the following statements is false? Question 21 options: Not all economists are agreed as to whether government should bail out companies in financial trouble. Not all economists prefer a rule-based monetary policy to discretionary monetary policy. Rule-based monetary policy advocates often assert that discretionary monetary policy can be motivated by politics. The tax multiplier is always larger than the government spending mult
Answer:
The tax multiplier is always larger than the government spending multiplier
Explanation:
As we know that
Tax multiplier = mpc ÷ (1 - mpc)
Here mpc means marginal propensity to consume
And,
Government spending multiplier= 1 ÷ (1 - mpc)
So based on this the government spending multiplier should always be more than the tax multiplier
Therefore the last option should be considered
Statement Of Owner's Equity Jay Pembroke started a business in April. Prepare a Statement of Owner's Equity using the following balances for April transactions. Cash $12,834 Accounts Receivable 1,809 Office Supplies 4,667 Prepaid Insurance 1,327 Accounts Payable 327 Jay Pembroke, Capital 18,155 Jay Pembroke, Drawing 145 Service Fees 3,113 Rent Expense 813 You will need to calculate the net income for April.
Answer and Explanation:
the computation of the net income for the april month is as follows;
= Service fees - rent expense
= $3,113 - $813
= $2,300
Now the preparation of the owner equity is as follows;
Jay Pembroke, Capital $18,155
Net income $2,300
Less; Jay Pembroke, Drawing $145
Jay Pembroke, Capital ending capital $20,310
We assume that the capital is given for the beginning of the month
Wolfe Company had the following beginning inventory and purchases during 2018 Date Transaction Number of units Unit Cost 1/1 Beginning inventory 2,000 $22.00 4/12 Purchase No. 1 2,300 $26.00 7/11 Purchase No. 2 800 $28.00 10/5 Purchase No. 3 1,250 $30.00 Wolfe sold 4,100 units Determine the amount of ending inventory and cost of goods sold using the following methods: Method Ending inventory Cost of Goods Sold LIFO FIFO Weighted average
Answer:
Wolfe Company
The amount of:
LIFO FIFO Weighted Average
Ending inventory $50,500 $65,100 $58,005
Cost of goods sold $113,200 $98,600 $105,698
Explanation:
a) Data and Calculations:
Date Transaction Number of units Unit Cost Cost Value
1/1 Beginning inventory 2,000 $22.00 $44,000
4/12 Purchase No. 1 2,300 $26.00 59,800
7/11 Purchase No. 2 800 $28.00 22,400
10/5 Purchase No. 3 1,250 $30.00 37,500
Total inventory available 6,350 $163,700
Wolfe sold 4,100
Ending Inventory 2,250
LIFO
Ending Inventory = $50,500 (250 * $26 + 2,000 * $22)
Cost of goods sold:
4/12 Purchase No. 1 2,050 $26.00 53,300
7/11 Purchase No. 2 800 $28.00 22,400
10/5 Purchase No. 3 1,250 $30.00 37,500
Total cost of goods sold = 4,100 $113,200
FIFO:
Ending Inventory = Cost of goods available for sale - Cost of goods sold
= $65,100 ($163,700 - $98,600)
Cost of goods sold:
1/1 Beginning inventory 2,000 $22.00 $44,000
4/12 Purchase No. 1 2,100 $26.00 54,600
Total cost of goods sold = $98,600
Weighted average:
Weighted average cost = $25.78 ($163,700/6,350)
Ending inventory = $58,005 (2,250 * $25.78)
Cost of goods sold = $105,698 (4,100 * $25.78)
