Answer: Yes, The FTC will approve the merger.
Explanation:
The Herfindahl-Hirschman Index (HHI) is the common measure of market concentration used to determine market competitiveness. The HHI is calculated by the squaring of the market share of every firm competing in the market and then adding the resulting numbers
HHI (before the merger)
= 23² + 12² + 8² + 7² + 5² + 45 × 1²
= 529 + 144 + 64 + 49 + 25 + 45
= 856
HHI (after the merger) = (23 + 12)²
8² + 7² + 5² + 45 × 1² = 1408
Here, the market is less concentrated and the HHI is still below 1500 after the merger. Therefore, FTC will approve this merger. The answer is Yes.
As the marginal propensity to consume (MPC) increases, the multiplier increases. decreases. remains the same. As the marginal propensity to save (MPS) increases, the multiplier decreases. remains the same. increases. If the marginal propensity to consume is 0.40 , what is the multiplier, assuming there are no taxes or imports
Answer: 1. Increases
2. Decreases
3. 1.67
Explanation:
The formula for the Investment Multiplier is,
= 1/ ( 1 - MPC)
From this formula, inferences can therefore be made.
1. As the marginal propensity to consume (MPC) increases, the Multiplier INCREASES.
As the MPC increases, it will reduce the denominator therefore increasing the Multiplier.
2. As the marginal propensity to save (MPS) increases, the multiplier DECREASES.
The Marginal Propensity to Save is ( 1 - MPC) because what isn't consumed is saved.
The MPS is therefore the denominator of the Multiplier equation.
That means then that as it rises, the Multiplier Decreases.
3. The Formula for the Investment Multiplier is, = 1 / ( 1 - MPC)
= 1 / ( 1 - 0.40)
= 1.67
Swan Company produces its product at a total cost of $43 per unit. Of this amount, $8 per unit is selling and administrative costs. The total variable cost is $30 per unit, and the desired profit is $20 per unit. The markup percentage on product cost is a.47% b.70% c.110% d.80%
Answer:
46.50%.
Explanation:
Percentage Markup = ( Desired profit x 100 ) / Total cost.
($20 × 100 ) / $43 = 46.50%.
I hope my answer helps you
Firm 1 produces output X with a cost function C_1(X)=\frac{X^2}{200}. Firm 2 produces output Y with a cost function C_2(X,Y)=\frac{Y^2}{100}-2X. Both firms face competitive markets. The competitive price of X is 6 and the competitive price of Y is \$ 5. There is no entry or exit into this market. What is the socially optimal production of X?
Answer:
800
Explanation:
The objective here is to determine the socially optimal production of X.
For this to occur ; it is crucial that both firm must merge together.
Therefore; the Profit will be = Total revenue - Total Cost
From the question; the total revenue = 6X + 5Y ; &
The total cost is : [tex]\dfrac{X^2}{200} + \dfrac{Y^2}{100} - 2X[/tex]
Now: The profit = [tex]6X+5Y - \dfrac{X^2}{200}- \dfrac{Y^2}{100}-2X[/tex]
= [tex]8X+5Y - \dfrac{X^2}{200}- \dfrac{Y^2}{100}[/tex]
If the socially optimal production of X is the differential of the equation [tex]8X+5Y - \dfrac{X^2}{200}- \dfrac{Y^2}{100}[/tex]
(X) = [tex]8-\frac{2X}{200} =0[/tex]
= [tex]8-\frac{X}{100} =0[/tex]
= [tex]\dfrac{X}{100}=8[/tex]
= 800
Thus the social optimal production of X = 800
Gross Corporation adopted the dollar-value LIFO method of inventory valuation on December 31, 2019. Its inventory at that date was $1,100,000 and the relevant price index was 100. Information regarding inventory for subsequent years is as follows: Inventory at Current Date Current Prices Price Index December 31, 2020 $1,284,000 1.07 December 31, 2021 1,450,000 1.25 December 31, 2022 1,625,000 1.30 What is the cost of the ending inventory at December 31, 2020 under dollar-value LIFO?
Answer:
$1,281,200
Explanation:
Gross Corporation
Ending inventory
2019 1100000
2020 1284000/1.07 = 1200000
Ending Inventory(1100000+100000*1.07) = 1207000
2021 1450000/1.25 = 1160000
Ending inventory(1100000+60000*1.07) = 1164200
2022 1625000/1.30 = 1250000
Ending inventory(1164200+90000*1.30) = $1281200
Therefore the cost of the ending inventory at December 31, 2020 under dollar-value LIFO will be $1,281,200
Wayne Industries is building a new prototype riding lawnmower especially for women. The marketing strategy for the product has been developed and presented. The lawnmower is now being tested rigorously. This step will ensure that the product meets all the CPSC product specifications and leaves little chance for any product liability issues. Which step int he new product development process is this?
A) After this stage, no changes can be made in any aspect of the product design, features, or composition.
B) At this stage, the functional features and the intended psychological characteristics are combined.
C) The new product at this stage can be distributed through a full-scale roll-out immediately.
D) The new lawnmower is at the introductory stage of the lifecycle.
E) The new-product idea is at the last stage of the development process.
Answer:
The answer is option E) The new-product idea is at the last stage of the development process.
Explanation:
The are several stages in the development of a new product idea. Beginning with initial idea generation all the way to the final evaluation stage.
The new prototype riding lawnmower especially for women designed by Wayne Industries is at the last stage of the development process.
The last stage of the development process also known as the Evaluation phase is characterized by:
Presenting the marketing strategy developed for the product.ensuring that the product meets all the CPSC product specifications and leaves little chance for any product liability issues.Galla Inc. needs to determine a price for a new product. Galla desires a 25% markup on the total cost of the product. Galla expects to sell 6420 units. Additional information is as follows: Variable product cost per unit $ 23 Variable administrative cost per unit 25 Total fixed overhead 46,500 Total fixed administrative 30,540 Using the total cost method what price should Galla charge?
Answer:
The price Galla should charge is $75
Explanation:
Solution
Now
The total cost = variable product cost + variable administrative cost + fixed overhead + fixed administrative
= ($23 * 6,420) + ($25 * 6,420) + $46,500 + $30,540
= $147,660 + $160,500 + $46,500 + $30,540
= $385,200
Thus,
The total cost per unit = Total cost / units
= $385,200 / 6,420 units
= $60
Hence
The selling price should charge = Cost per unit * 1.25
= $60 * 1.25
= $75
The following information was drawn from the balance sheets of the Kansas and Montana companies: Kansas Montana Current assets $ 59,000 $ 78,000 Current liabilities 40,000 43,000 Required a. Compute the current ratio for each company. b. Which company has the greater likelihood of being able to pay its bills? c. Assume that both companies have the same amount of total assets. Speculate as to which company would produce the higher return-on-assets ratio.
Answer:
a) Current ratio for Kansas company is 1.475
Current ratio for Montana company is 1.814
b) Since the current ratio for the Montana company is more than that of the Kansas company which shows better liquidity, the Montana company has the greater likelihood of being able to pay its bills.
c) Kansas company would produce the higher return-on-assets ratio.
Explanation:
Current Assets Current liabilities
Kansas Company $ 59,000 $ 40,000
Montana Company $ 78,000 $ 43,000
a) To calculate the current ratio of A company
Current ratio = [tex]\frac{Current Assets}{Current Liabilities}[/tex]
Therefore current ratio for Kansas company = $ 59,000 ÷ $ 40,000 = 1.475
Current ratio for Montana company = $ 78,000 ÷ $ 43,000 = 1.814
Consider the following estimates from the early 2010s of shares of income to each group. Country Poorest 40% Next 30% Richest 30% Bolivia 10 25 65 Chile 10 20 70 Uruguay 20 30 50 1.) Using the 4-point curved line drawing tool, plot the Lorenz curve for Bolivia. Properly label your curve. 2.) Using the 4-point curved line drawing tool, plot the Lorenz curve for Uruguay. Properly label your curve. Carefully follow the instructions above, and only draw the required objects. Which country has the most nearly equal income distribution? ▼ Chile Uruguay Bolivia .
Answer:
Check the explanation
Explanation:
Kindly check the attached images below to see the step by step explanation to the question above.
On December 12, 2021, an investment in equity securities costing $77,000 was sold for $94,000. The total of the sale proceeds was credited to the investment in equity securities account. Required: 1. Prepare the journal entry to correct the error, assuming it is discovered before the books are adjusted or closed in 2021. (Ignore income taxes.) 2. Prepare the journal entry to correct the error assuming it is not discovered until early 2022. (Ignore income taxes.)
Answer:
1.
Dr. Investment Account $17,000
Cr. Gain on Sale $17,000
2.
Dr. retained Earning $17,000
Cr. Gain on Sale $17,000
Explanation:
1.
If an assets is sold more than the book value, then there is a gain on the sales of asset.
Gain on Sale = Sales Proceeds - Book value of Investment = $94,000 - $77,000 = $17,000
As sales proceeds of $94,000 are credited in the Investment account, which needs to be credited by $77,000 only. The excessive amount of $17,000 should be recorded in the Gain on sale account.
2.
Error is not discovered until 2022 and earning for 2021 was transferred to retained earning. So, adjustment should me made in the retained earnings to eliminate the effect.
The FI Corporation’s dividends per share are expected to grow indefinitely by 5% per year. a. If this year’s year-end dividend is $8 and the required rate of return is 10% per year, what must the current stock price be according to the DDM? b. If the expected earnings per share are $12, what is the value of the ROE on the firm’s investment opportunities? c. How much is the market paying per share for growth opportunities?
Answer and Explanation:
The computation is shown below:
a. The current stock price is
As we know that
Current stock price = (Dividend) ÷ (Required rate of return - growth rate)
= ($8) ÷ ( 10% - 5%)
= $160
b. Now the value of the ROE on the firm’s investment opportunities is
Given that
Dividend = $8
And,
The payout ratio = Dividend ÷ Earning per share
= $8 ÷ $12
= 0.666666666666667
And, retention ratio (b) is
= 1- 0.666666666666667
= 0.333333333333333
In addition to it
indefinite growth rate (g) = 5%
So, the ROE is
= Growth rate ÷ retention ratio
= 0.15 ÷ 0.3333
= 15%
c. And, the market paying per share is
PVGO = Price - Earning per share ÷ required rate of return
where,
PVGO = Present Value of Growth Opportunity
So, the market paying per share is
= $160 - $12 ÷ 10%
= $160 - $120
= $40
A manufacturing company prepays its insurance coverage for a three-year period. The premium for the three years is $2,700 and is paid at the beginning of the first year. Eighty percent of the premium applies to manufacturing operations and 20% applies to selling and administrative activities. What amounts should be considered product and period costs respectively for the first full year of coverage?
Answer:
$720 and $180
Explanation:
According to the scenario, computation of the given data are as follows:
Premium for 3 years = $2,700
So, premium for 1 year = $2,700 ÷ 3 = $900 per year
Manufacturing operation percentage = 80%
Selling and administrative operation percentage = 20%
So, Premium for manufacturing operation = $900 × 80% = $720
And Premium for selling and admin operation = $900 × 20% = $180
In some industries, competitive dynamics eventually drive long-run projections of the future returns earned by the firm to an equilibrium level equal to the long-run expected cost of equity capital in the firm. At that point, a firm can be expected to earn ____________ residual income in the future. increasing. zero. decreasing. There is not enough information to answer this question.
Answer:Zero
Explanation:
Residual income is stated as the excess income part estimation that is left after calculation of all debts and expenses with firm or industry following minimum return of equity is paid.
According to the question,long run projections tend to produce zero residual income as it reaches to that particular point of equilibrium level towards the long period in amount of equity capital. Rather continuing growth rate should be chosen as it tends to produce increase or decrease in residual income.
Other options are incorrect because increasing residual income and decrease residual income cannot be expected from firm. There is appropriate amount of information present in question. Thus, the correct answer is zero.
Lee is considering buying one of two newlyminusissued bonds. Bond A is a twentyminusyear, 7.5% coupon bond that is nonminuscallable. Bond B is a twentyminusyear, 8.25% bond that is callable after two years. Both bonds are comparable in all other aspects. Lee plans on holding his bond to maturity. What should Lee do if he feels that interest rates are going to decline by 2% in the near future and then remain relatively stable thereafter?
Answer:
Bond A will be purchased
Explanation:
He will purchase Bond A, since the 20-year interest payments are fixed guaranteed and can not be named called. When he buys bond B, after 2 years the corporation will actually call the bond, as it would be easier to call the bond and issue a new bond at a lesser interest rate.
When a bond is named it means the issuer takes the bond back and charges the holder the bond's face value (what the initial purchaser paid for it)
On January 1, 2021, Swifty Corporation had 106000 shares of its $5 par value common stock outstanding. On June 1, the corporation acquired 10300 shares of stock to be held in the treasury. On December 1, when the market price of the stock was $13, the corporation declared a 15% stock dividend to be issued to stockholders of record on December 16, 2021. What was the impact of the 15% stock dividend on the balance of the retained earnings account?
Answer:
Decrease by $186,615
Explanation:
The impact of the 15% stock dividend on the balance of the retained earnings account is shown below:-
Shares = 106000 - 10300
= 95,700
Dividend of 15% = 95,700 × 15%
= $14,355
Value of shares = Dividend × Market price of the stock
= $14,355 × $13
= $186,615
So, the retained earning will decrease by $186,615
On January 1, Gemstone Company obtained a $165,000, 10-year, 7% installment note from Guarantee Bank. Thenote requires annual payments of $23,492, with the first payment occurring on the last day of the fiscal year. The firstpayment consists of interest of $11,550 and principal repayment of $11,942. The journal entry to record the issuance of the installment note for cash on January 1 would include a:_____
Answer:
Credit to notes payable for $165000
Explanation:
Journal entries for issuance of Note Payable :
Cash Account ..... Debit $165000
7% Note payable Accounts .... Credit $165000
Note:
Note payable is a liability so it is credited as on date of issuance.
Number of Days Past Due Toot Auto Supply distributes new and used automobile parts to local dealers throughout the Midwest. Toot’s credit terms are n/30. As of the end of business on October 31, the following accounts receivable were past due: Account Due Date Amount Avalanche Auto August 15 $12,000 Bales Auto October 4 2,400 Derby Auto Repair June 26 3,900 Lucky's Auto Repair September 10 6,600 Pit Stop Auto September 24 1,100 Reliable Auto Repair July 2 9,750 Trident Auto August 25 1,800 Valley Repair & Tow May 23 4,000 Determine the number of days each account is past due as of October 31. Account Due Date Number of Days Past Due Avalanche Auto August 15 Bales Auto October 4 Derby Auto Repair June 26 Lucky's Auto Repair September 10 Pit Stop Auto September 24 Reliable Auto Repair July 2 Trident Auto August 25 Valley Repair & Tow May 23
Answer:
Check the explanation
Explanation:
Account Due Date Number of Days Past Due
Avalanche Auto August 15 (23+30+31)=84 days
Bales Auto October 4 20 days
Derby Auto Repair September 24 (7+31+31+30+31)=130 days
Lucky's Auto Repair September 24 (28+31)=59 days
Pit Stop Auto September 19 (11+31)=42 days
Reliable Auto Repair July 15 (16+31+30+31)=108 days
Trident Auto August 25 (7+30+31)=68 days
Valley Repair & Tow May 28 (14+30+31+31+30+31)=167 days
Consider two ways of commuting in a crowded city: taking public transportation, such as subway and buses, or driving your own car.
A person who chooses to take public transportation in a crowded city imposes a _________ externality on drivers. A policy implication of this result is a _________ those who take public transportation.
Persons who choose to drive their own cars to get around in a crowded city impose a _______ externality on other drivers. A policy implication of this result is a ________ those who drive their own cars.
Answer:
Positive; Subsidy for
Negative; Tax on
Explanation:
An externality is the economic term that describes a cost or benefit incurred or received by a third party, over which said party has no control over its development.
When externalities result in a benefit for a certain group they are said to be positive and when it is detrimental it is said to be negative.
Taking public transportation in a crowded city is benefitial to drivers making this a positive externality. In order to encourage people to take public transportation, a subsidy for those who take transportation may be adopted.
On the other hand, people who choose to drive their own car impose a negative externality and may encourage a tax on those who drive their own car.
Scenario 28-1 Suppose that the Bureau of Labor Statistics reports that the entire adult population of Mankiwland can be categorized as follows: 25 million people employed, 3 million people unemployed, 1 million discouraged workers, and 1 million people who are either students, homemakers, retirees, or other people not seeking employment. Refer to Scenario 28-1. What is the unemployment rate?
Answer:
10.7%
Explanation:
Solution:
Recall that:
The Reports from Bureau of labor statistics is shown as follows:
Employed people = 25 million
Unemployed people = 3 million
Discouraged workers = 1 million
Workers or Homemakers or retirees, or students = 1 million
The next step from this scenario is to find out the unemployment rate
Now,
The rate of unemployed = (unemployed x 100 ) / labor force
= 300/28
=10.7%
Contribution Margin Variance, Contribution Margin Volume Variance, Market Share Variance, Market Size Variance Sulert, Inc., produces and sells gel-filled ice packs. Sulert’s performance report for April follows: Actual Budgeted Units sold 290,000 300,000 Sales $1,450,000 $1,515,000 Variable costs 652,500 636,300 Contribution margin $ 797,500 $ 878,700 Market size (in units) 1,250,000 1,200,000 Required: 1. Calculate the contribution margin variance and the contribution margin volume variance. In your computations, round the contribution margin per unit to three decimal places. Contribution margin variance $ Unfavorable Contribution margin volume variance $ Unfavorable 2. Calculate the market share variance and the market size variance. In your computations, round the unit contribution margin to three decimal places and round the market share percentage to one decimal place (for example, .8439 would be rounded to 84.4%). Round your final answers to the nearest dollar. (CMA adapted) Market share variance $ Unfavorable Market size variance $ Favorable
Answer:
1. Market share variance= $65,903(Unfavorable)
2. Market size variance= $36,613(favourable)
Check attachment for the table
Which marketing function that involves communicating information about products
and services to potential customers?
a) Strategic planning
b) Promotion
c) Distribution
O d) Product development
Using the following accounts and an overhead rate of 140% of direct labor cost, compute the amount of applied overhead. Work in Process Inventory Beginning WIP 35,100 Direct materials 57,200 Direct labor ? Factory Overhead ? To Finished Goods 213,300 Ending WIP 25,100 Finished Goods Inventory Beginning FG 5,100 Cost of Goods Mfg'd 213,300
Answer:
$85,225
Explanation:
The computation of the applied overhead is shown below:
Let us assume that the Direct labor be X
And, the factory overhead be 1.4X
As we know that
Cost of goods manufactured = Beginning work in process + direct material + direct labor + factory overhead - ending work in process
$213,300 = $35,100 + $57,200 + X + 1.4X - $25,100
$213,300 = $67,200 + 2.4X
$146,100 = 2.4X
X = $60,875
And, the factory overhead is
= $60,875 × 1.4
= $85,225
hence, the applied overhead is $85,225
At the market price of $8, the quantity demanded is nothing units, and quantity supplied is nothing units. At this price, ▼ a surplus a shortage an equilibrium exists. At a market price of $4, ▼ an equilibrium a surplus a shortage now exists. The market equilibrium exists at a price of $ nothing. In equilibrium, the quantity demanded by consumers is ▼ greater than equal to less than to the quantity supplied by producers.
Answer:
The answer is explained in the explanation section below
Explanation:
Solution
(1)At the market price of $8, the Demanded Quantity is 20 units per week , and the Quantity Supplied is 60 units.
(2) At this price Surplus exists.
Economic Surplus is a is a situation in which the quantity supplied is higher than the quantity demanded. This situation is also referred to as excess supply.
(3) At price $4 there is an exist shortage
At price $4 The quantity Supplied is 20 units and the Quantity Demanded is 60 units respectively. hence, at price $4 Demand is higher/greater than Supply.
(4) At a price of $6 per unit, the market equilibrium exists
Market equilibrium is a situation when the Quantity Demanded of a commodity by the consumer is the same to the respective Quantity Supplied of that commodity by the producers.
(5) )Quantity Demanded by the consumers is equal to the quantity supplied by the producers. In the equilibrium
At price $4 per unit , the quantity supplied by the producers is equal to 40 units and the quantity demanded by the consumers is equal to 40 units Thus the supplied quantity is equal to the demanded quantity this point.
Salyers Family Inn is a bed and breakfast establishment in a converted 100 year-old mansion. The Inn's guests appreciate its gourmet breakfasts and individually decorated rooms. The Inn's overhead budget for the most recent month appears below: Activity Level 57 guests Variable overhead costs Supplies $148.20 Laundry 216.60 Fixed Overhead costs Utilities 170.00 Salaries and wages 4,310.00 Depreciation 2,340.00 Total Overhead Cost $7,184.80 The Inn's variable overhead costs are driven by the number of guests. What would be the total budgeted overhead cost for a month if the activity level is 53 guests. Group of answer choices $6,680.60 $26,154.40 $7,159.20 $7,184.80
Answer:
The budgeted overhead= $7,159.2
Explanation:
The budgeted Overhead cost can be determined as follow
The budgeted overhead= Fixed cost + variable cost
Fixed overhead cost = 170.00 + 4,310.00 + 2,340.00 = 6820
Variable cost per activity = ( 148.20 + 216.60)/57 = 6.4 per guest.
The budgeted cost equation = 6820 + 6.4 x
Where X represent the number of guest
The budgeted overhead = 6820 + (6.4 × 53)= $7,159.2
The budgeted overhead= $7,159.2
The requirement that certain professionals possess a license in order to work in a particular market has the effect of reducing the supply of those services, which in turn causes _________.
O price and the profits of firms in the market to increase.
O price to decrease and the profits of firms in the market to increase.
O price to increase and the profits of firms in the market to decrease.
O price and the profits of firms in the market to decrease.
Answer:
C
Explanation:
The correct option is C :price to increase and the profits of firms in the market to decrease
This can be explained by the fact that, since it always been mandatory to possess a license in order to work in a particular market. This certainly reduces the competition in the market and thus, the prices would increase; therefore, as the firms have to pay for licence thus would reduce the profits of firm.
Mercredi, Inc., is considering investing in automated equipment with a ten-year useful life. Managers at Highpoint have estimated the cash flows associated with the tangible costs and benefits of automation, but have been unable to estimate the cash flows associated with the intangible benefits. Using the company's 14% required rate of return, the net present value of the cash flows associated with just the tangible costs and benefits is a negative $182,560. How large would the annual net cash inflows from the intangible benefits have to be to make this a financially acceptable investment? (Ignore income taxes.)
Answer:
$35,000
Explanation:
The computation of the annual net cash inflows from the intangible benefits is shown below:
= Tangibles cost and benefits ÷ PVIFA factor at 14% for 10 years
= $182,560 ÷ 5.2161
= $35,000
Refer to the PVIFA table
We simply divided the tangible cost from the PVIFA factor so that the correct amount could come
Now consider the case in which the manufacturer offers a marginal unit quantity discount for the plywood. The first 20,000 square feet of any order are sold at $1 per square foot, the next 20,000 square feet are sold at $0.98 per square foot, and any quantity larger than 40,000 square feet is sold for $0.96 per square foot. What is the optimal lot size for Prefab given this pricing structure? How much cycle inven
Answer:
Explanation:
We can use the following method to solve the given problem
We are given following
Annual demand,
D = 20000*12
D = 240,000 sqft
Fixed order cost, is given as
S = $ 400
Considering the unit cost, is given as
C = $ 1
Holding cost, H = 1*20% = $ 0.2
EOQ = sqrt(2DS/H)
= √(2*240000*400/0.2)
= 30,984 sq ft
This is higher than 20,000 and less than 40,000 sq ft. For this reason, the applicable price for this quantity is $ 0.98
For C = $ 0.98, holding cost, H = 0.98*20% = $ 0.196
Revised EOQ = sqrt(2*240000*400/0.196) = 31,298 sq ft
Total annual cost of EOQ policy = D*C + H*Q/2 + S*D/Q
= 240000*0.98 + 0.196*31298/2 + 400*240000/31298
= $ 241,334.5
Now consider the next level of price, C = $ 0.96
Holding cost, H = 0.96*20% = $ 0.192
EOQ = sqrt(2*240000*400/0.192)
= 31633 sqft
This amount is will not be feasible for this price, because it requires a minimum order of 40000 sqft.
Therefore, Q = 40,000
Total annual cost = 240000*0.96 + 0.192*40000/2 + 400*240000/40000
Total annual cost = $ 236,640
Total annual cost is lowest for order quantity of 40,000 sq ft.
1) Optimal lot size = 40,000 sq ft.
2) the annual cost of this policy
= $ 236,640
3) the cycle inventory of plywood at Prefab = Q/2 = 40000/2
At prefeb= 20,000 sq ft
4) let's assume the manufacturer sells all plywood at $ 0.96, then
Holding cost, H = 0.96*20%
H= $ 0.192
EOQ = sqrt(2*240000*400/0.192)
EOQ = 31633 sqft
Total annual cost = 240000*0.96 + 0.192*31633/2 + 400*240000/31633
Total annual cost = $ 236,471.6
Difference in total annual cost = 236640 - 236471.6 = $ 168.4
Rebel Sound Inc. produced 30,000 audio devices last month. Rebel started the month with $10,000 worth of inventory in Finished Goods. The company incurred $15,000 of various utility and rent charges on their factory, paid $50,000 for raw materials to use in production, and paid employees $60,000 in wages.
During the month, inventory costing $120,000 was completed and transferred to the Finished Goods Inventory. At the end of the month, Rebel had $5,000 of Inventory in Finished Goods, $6,000 in Materials Inventory, and $24,000 still in Work in Process.
Required:
1. What was Rebel Sound Inc Cost of Goods Manufactured for the month?
Answer:
Cost of goods manufactured is $ 101,000 for the month
Explanation:
Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you.
Cost of Goods Manufactured:
$
Work in process inventory, beginning $ -
Direct materials:
Direct Material Used $ 60,000
Direct labor $ 15,000
Factory overhead Applied $ 50,000
Total manufacturing costs $125,000
Total work in process during period $125,000
Work in process inventory, ending $ -24,000
Cost of goods manufactured $ 101,000
Consider a continuous operation in which raw tomatoes arrive to a processing unit in bulk. The tomatoes arrive at an average steady rate of 75 tons per hour from 8 a.m. to 1 p.m. every day. The processing begins as soon as the tomatoes start arriving, at 8 a.m. However, the processing unit can only process at a steady rate of 25 tons/hr. If need be, the processing unit can process for 24 hours a day. If tomatoes arrive when the processing unit is busy, a queue of inventory will form.
a. How many hours a day does the processing unit operate?
b. What is the maximum inventory of raw tomatoes?
c. What is the capacity utilization of the processing unit?
(Hint: This is equivalent to the fraction of a day the plant operates)
d. How long on average does a tomato stay in the queue?
(Hint: First calculate average inventory and average throughput for the entire time
the processing unit is operating. Then use little’s law to calculate CT.)
Answer:
15250 T62.5%5 hExplanation:
a) The amount of tomatoes that arrive in the 5 hours between 8 a.m. and 1 p.m each day is ...
(75 T/h)(5 h) = 375 T
Processing at the rate of 25 T/h takes ...
(375 T)/(25 T/h) = 15 h
The processing unit must operate 15 hours per day to process the arriving tomatoes.
__
b) The arriving tomatoes are processed at the rate of 25 T/h, so the net addition to inventory from 8 a.m. to 1 p.m. is 75 -25 = 50 T/h. Over those 5 hours, an inventory accumulates in the amount of ...
(50 T/h)(5 h) = 250 T
The maximum inventory of raw tomatoes is 250 tons.
__
c) The processing unit operates 15 hours of each 24-hour day, so is operating at 15/24 = 5/8 = 62.5% of capacity.
The capacity utilization of the processing unit is 62.5%.
__
d) Inventory both increases and decreases linearly, so the average inventory is half the peak inventory. Average inventory is 250/2 = 125 tons. This is processed at the rate of 25 T/h, so the amount of time the average tomato spends in inventory is ...
(125 T)/(25 T/h) = 5 h
The average tomato stays in the queue 5 hours.
Bannister Co. is thinking about having one of its products manufactured by a subcontractor. Currently, the cost of manufacturing 1,000 units follows: Direct material $ 45,000 Direct labor 30,000 Factory overhead (30% is variable) 98,000 If Bannister can buy 1,000 units from an outside supplier for $100,000, it should: Multiple Choice Make the product because current factory overhead is less than $100,000. Make the product because the cost of direct material plus direct labor of manufacturing is less than $100,000. Buy the product because the total incremental costs of manufacturing are greater than $100,000. Buy the product because total fixed and variable manufacturing costs are greater than $100,000. Make the product because factory overhead is a sunk cost.
Answer:
Buy the product because the total incremental costs of manufacturing are greater than $100,000.
Explanation:
Relevant cost of making the product = 45000 +30,000 + (30%× 98,000)
=$ 104,400
Cost of buying the product = $100,000
Difference in cost = 104,400- $100,000 = $4,400.
Note the balance of 70% of the fixed manufacturing overhead id is a sunk cost which would be incurred which ever decision is taken.
The incremental cost of making is greater the cost of buying by $4,400. To buy from the outside supplier would mean Bannister Co saving $4,400
On January 2, 2018, Baltimore Company purchased 20,000 shares of the stock of Towson Company at $13 per share. Baltimore obtained significant influence as the purchase represents a 35% ownership stake in Towson Company. On August 1, 2018, Towson Company paid cash dividends of $25,000. Baltimore Company intended this investment to a long-term investment. On December 31, 2018, Towson Company reported $65,000 of net income for FY 2018. Additionally, the current market price for Towson Company's stock increased to $23 per share at the end of the year. Use this information to determine, how much Baltimore Company should report for its investment in Towson Company on December 31, 2018. (Round to the nearest dollar.)
Answer:
$344,000
Explanation:
The computation of value of investment is shown below:-
Initial Cost of investments $260,000
(20,000 shares × $13)
Add: Share of profit $22,750
($65,000 × 35%)
Add: Increase in equity
reserves $70,000
(($23 - $13) × 20,000 × 35%)
Less: Dividends received $8,750
($25,000 × 35%)
Value of investment $344,000
Therefore the value of investment is $344,000
