Explanation:
Since the CFO wants the company to be competitive in the Industry he has to upgrade the machines and equipment in time when a new technology hits the market. which makes the company to increase the depreciation expense and write of the asset as early as possible.
The members of the farm is sharing the profits and assumes no other way of remuneration or incentive, Hence there will not be any opposition in charging higher depreciation.
So it is suitable for the company to claim depreciation on Straight Line method or Double Decline method which will amortize the capital expense early.
A Company manufactures coffee tables. The Company has a policy of adding a 20% markup to full costs and currently has excess capacity. The following information pertains to the company's normal operations per month: Output units 30,000 tables Machine-hours 6000 hours Direct manufacturing labor-hours 10,000 hours Direct materials per unit $50 Direct manufacturing labor per hour $12.00 Variable manufacturing overhead costs $322,500 Fixed manufacturing overhead costs $1,200,000 Product and process design costs $600,000 Marketing and distribution costs $1,290,000 For long-run pricing of the coffee tables, what price will most likely be used by the Company
Answer:
$201.30
Explanation:
Direct materials = $50
Total Direct manufacturing labor = $12.00 * 10,000 = $120,000
Variable manufacturing overhead costs = $322,500
Fixed manufacturing overhead costs = $1,200,000
Product and process design costs = $600,000
Marketing and distribution costs = $1,290,000
Total cost apart from direct material = $120,000 + $322,500 + $1,200,000 + $600,000 + $1,290,000 = $3,532,500
Cost per unit apart from direct material = $3,532,500 / 30,000 = $117.75
Total cost per unit = $117.75 + $50 = $167.75
Mark up per unit = $167.75 * 20% = $33.55
Price per unit = $167.75 + $33.55 = $201.30
Answer: $201.30
Explanation:
To solve this all the expenses incurred per unit need to be included in the unit.
Direct Materials $50
Direct Manufacturing Labour Hours per unit
= (10,000/30,000 units) * 12 (direct Manufacturing Labour per hour)
= $4
Variable Manufacturing Overhead Cost
= 322,500/30,000
= $10.75
Fixed manufacturing overhead costs
= 1,200,000/30,000
= $40
Product and process design costs
= 600,000/30,000
= $20
Marketing and distribution costs
= 1,290,000/30,000
= $43
Adding everything up,
= 50 + 4 + 10.75 + 40 + 20 + 43
= $167.75
Company adds 20% to costs so,
= 167.75 * ( 1 + 20%)
= $201.30
Company will most likely sell at $201.30
The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $74,000. The machine would replace an old piece of equipment that costs $19,000 per year to operate. The new machine would cost $9,000 per year to operate. The old machine currently in use could be sold now for a salvage value of $31,000. The new machine would have a useful life of 10 years with no salvage value. Required: 1. What is the annual depreciation expense associated with the new bottling machine
Answer:
$7,400 per year
Explanation:
Data provided for computing the annual depreciation expense is here below:-
Automated bottling machine = $74,000
Useful life = 10 years
The calculation of annual depreciation expense is given below:-
Annual depreciation expense = Automated bottling machine ÷ Useful life
= $74,000 ÷ 10
= $7,400 per year
Therefore for computing the annual depreciation expense we simply divide the automated bottling machine by useful life.
g On July 1, 2019, Sheffield Corp. issued 9% bonds in the face amount of $12400000, which mature on July 1, 2025. The bonds were issued for $11859948 to yield 10%, resulting in a bond discount of $540052. Sheffield uses the effective-interest method of amortizing bond discount. Interest is payable annually on June 30. At June 30, 2021, Sheffield's unamortized bond discount should be
Answer:
$393,063
Explanation:
The bond is issued on discount when the issuance price is less than the face value of the bond. The discount is expensed over the bond period until maturity. It is added to the interest expense value to expense it.
Unamortized Discount is the discount balance which has not been expensed or discount balance for outstanding period of the bond to maturity.
Discount Balance = $540,052
Date Interest Paid Interest Expense Amortization Book Value
7/1/19 11,859,948
6/30/20 1,116,000 1,185,995 69,995 11,929,943
6/30/21 1,116,000 1,192,994 76,994 12,006,937
Unamortized Discount = Total Discount - Discount amortized
Unamortized Discount = $540,052 - ($69,995 + $76,994)
Unamortized Discount = $393,063
January 1, 2021, Woody Forrest Corporation granted executive stock options to purchase 41,000 of its common shares at $9 each. The market price of common stock was $24 per share on December 31, 2021, and averaged $12 per share during the year then ended. There was no change in the 164,000 shares of outstanding common stock during the year. Net income for the year was $39,000. The number of shares to be used in computing diluted earnings per share for the quarter is:
Answer:
174,250 shares
Explanation:
The computation of the number of shares to be used in computing diluted earnings per share is shown below:
Proceeds from exercise of options (a) $369,000 (41,000 shares × $9)
Used to repurchased for common stock (b) 30,750 shares (41,000 shares × $9 ÷ $12)
Number of shares for exercised (c) 41,000 shares
Less: repurchased shares (d) -30,750 shares
Diluted common shares {e = c - d} 10,250 shares
Add: Common shares (f) 164,000 shares
Total number of shares for diluted earning per share 174,250 shares
We ignored the market price of common stock as it is not relevant.
Bob, Kara, and Mark are partners in the BKM Partnership. Bob is a 40% partner and has a June 30 tax yearminus−end. Kara owns a 40% interest in the partnership and has a September 30 tax yearminus−end, and Mark owns the remaining 20% interest and has an October 31 tax yearminus−end. The partnership does not have a natural business year. What is the required tax yearminus−end for the partnership (if no Sec. 444 election is made)? A. September 30 B. October 31 C. December 31 D. June 30
Answer:
D. June 30
Explanation:
Since no Sec. 444 election is made, the required tax yearmius-end for the partnership will be the tax yearminus−end of a partner with at least 40% interest.
Since Bob is a 40% partner and has a June 30 tax yearminus−end, therefore, the required tax yearminus−end for the partnership is June 30.
To encourage employee ownership of the company's common shares, KL Corp. permits any of its employees to buy shares directly from the company through payroll deduction. There are no brokerage fees and shares can be purchased at a 12% discount. During May, employees purchased 10,000 shares at a time when the market price of the shares on the New York Stock Exchange was $12 per share. KL will record compensation expense associated with the May purchases of:
Answer:
Dr Cash 105,600
Dr Compensation Expense 14,400
Cr Common Stock 10,000
Cr Paid-In Capital – Excess of Par 110,000
Explanation:
KL Corp Journal entry
Dr Cash 105,600
Dr Compensation Expense 14,400 (10,000*12*12%)
Cr Common Stock 10,000 (10,000*1)
Cr Paid-In Capital – Excess of Par 110,000
(10,000*(12-1))
The capital accounts of Heidi and Moss have balances of $90,000 and $65,000, respectively, on January 1, the beginning of the current fiscal year. On April 10, Heidi invested an additional $8,000. During the year, Heidi and Moss withdrew $40,000 and $32,000, respectively. Revenues were $540,000 and expenses were $420,000 for the year. The articles of partnership make no reference to the division of net income. Required: 1. Prepare a statement of partners' equity for the partnership of Heidi and Moss. If an amount box does not require an entry, leave it blank. Enter all amounts as positive numbers. Heidi and Moss Statement of Partners' Equity For the Year Ended December 31 Heidi Moss Total Capital, January 1 $ 90,000 $ 65,000 $ 155,000 Net income for the year 60,000 60,000 120,000 $ $ $ $ $ $ Withdrawals during the year Capital, December 31 $ 118,000 $ 93,000 $ 211,000 2. Journalize the entries to: Close the revenue and expenses account. Close the drawing accounts. If an amount box does not require an entry, leave it blank. a. Revenues 540,000 Heidi, Capital 540,000 Moss, Capital 420,000 Heidi, Capital 40,000 Moss, Capital Moss, Drawing b. Heidi, Capital 40,000 Moss, Capital 32,000 Heidi, Drawing 40,000 Moss, Drawing 32,000
Answer:
The statement and journal are attached
Explanation:
Management in Life Annabelle and Bettina share a dorm room. They like each other, but they disagree about how often to clean. Eventually, Annabelle says to Bettina, "I'm afraid that if we clean the room only once a month, we're going to get bugs. Bettina replies, "Maybe, but this physics course is killing me, so I don't have time to clean more often than that." Annabelle and Bettina are engaged in conflict, based on Which of the following outcomes are likely in this situation?
A) Annabelle and Bettina will learn from each other.
B) The roommates will come up with a creative solution.
C) The roommates will stop speaking to each other.
D) Annabelle and Bettina will be angry at each other.
Answer:
A). Annabelle and Bettina will learn from each other .
B). The roommates will come up with a creative solution."
Explanation:
Anabelle and Bettina are involved in a 'cognitive' conflict as it occurs when they both experience a mental as well as emotional discomfort when they are confronted with the information that challenges their existing ideas or beliefs. The most likely outcomes of this situation would be that they 'both would learn from each other' by accepting each other's point of view and adapting with the new information that would help them 'reach a creative solution' to resolve their conflict over the cleaning of their room. Therefore, options A and B are the correct answers.
You can repair your furnace for $500 and it will last 5 more years, but your heating bills will cost you about $1500 per year. Alternatively, a new furnace can be installed for $3000 that will reduce your annual heating bill to $1200. Suppose you sell the house in 5 years and receive an additional $1000 in the sales price of your home (salvage value) because of having a fairly new furnace. Should you replace it? Use a 5-year analysis period and a MARR of 5%
Answer:
By present value old furnace should not be replaced, since the new furnace costs more.
Explanation:
Solution
For the old furnace
Present value = - 500 - 1500 = (1 +i)^n-1/i (1+i)n
= - 500-1500 * 1.05^⁵/0.05 * 1.05^⁵
= -$6994.215
Now,
For the new furnace
The present value = - 3000 - 1200 * 1.05^⁵ - 1/0.05 * 1.05^⁵ + 1000/ (1.05)⁵
= -$7411.845
Therefore, As the new furnace costs more by present value old furnace should not be replaced
• Why has the stock market declined so much?
We need a passage or something. not just the question
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.Assume that Parker Company will receive SF200,000 in 360 days. Assume the following interest rates: the 360-day borrowing rate in U.S. is 7% while the 360-day borrowing rate in Switzerland is 5%. The 360-day deposit rate in U.S. is 5% while the 360-day deposit rate in Switzerland is 4%. Assume the forward rate of the Swiss franc is $0.50 and the spot rate of the Swiss franc is $0.48. If Parker Company uses a money market hedge, it will receive ____ in 360 days.
Answer:
Company will receive = $96,000
Explanation:
As per the data given in the question,
Corresponding SF liability equals to pay SF200,000 including interest
= 200,000÷1.05 = SF190476.19
Now Convert the SF into $US at the current spot rate = $0.48×190476.19
= $91428.57
Now deposit the $ US at 5% and withdraw after 360 days =
= $91428.57 + $91428.57×5%
= $95999.99
This way the liability of SF 190476.19 + 190476.19×5% interest will be paid off when Parker company receives $200,000, Parker company will receive = $96,000 in 360 days.
On March 15, American Eagle declares a quarterly cash dividend of $0.045 per share payable on April 13 to all stockholders of record on March 30.
Required:
Record American Eagle's declaration and payment of cash dividends for its 226 million shares. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions (i.e. $5.5 should be entered as 5,500,000).)
Answer and Explanation:
The journal entries are shown below:
On March 15
Dividend Dr $10,170,000 (226 million shares × $0.045 per share)
To Dividend payable $10,170,000
(Being the dividend is declared)
For recording this we debited the dividend as it increased the balance of dividend and credited the dividend payable as it increased the liabilities
On March 30
No journal entry is required for recording of dividend
On April 13
Dividend payable $10,170,000
To cash $10,170,000
For recording this we debited the dividend payable as it decreased the liabilities and credited the cash as it reduced the assets
(Being the dividend payable is recorded)
Crowl Corporation is investigating automating a process by purchasing a machine for $793,800 that would have a 9-year useful life and no salvage value. By automating the process, the company would save $133,000 per year in cash operating costs. The new machine would replace some old equipment that would be sold for scrap now, yielding $21,200. The annual depreciation on the new machine would be $88,200. The simple rate of return on the investment is closest to
a. 5.80%
b. 11.12%
c. 16.72%
d. 5.12%
Answer:
Simple rate of return is 5.8%
Therefore option (a) is correct option.
Explanation:
It is given that purchase cost = $793800
Company saving per year = $133000
Yielding = $21200
Annual depreciation = $88200
Annual profit = $133000 - $88200 = $44800
Net investment is equal to = $793800 - $21200 = $772600
Simple rate of return [tex]=\frac{44800}{772600}=0.0579[/tex]
= 5.8%
Therefore simple rate of return is 5.8 %
So option (a) is correct.
Pronghorn Appliances provides a 3-year warranty with one of its products which was first sold in 2017. Pronghorn sold $1,840,000 of products subject to the warranty. Pronghorn expects $202,000 of warranty costs over the next 3 years. In 2017, Pronghorn spent $106,000 servicing warranty claims. Prepare Pronghorn’s journal entries to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs; Pronghorn now expects future warranty costs of $115,000
Answer:
See the explanation below.
Explanation:
Balance in the warranty liability account after claim = $202,000 - $106,000 = $96,000
Amount needed to reduce expected warranty to $115,000 = $155,00 - $96,000 = $19,000
The journal entries will be as follows:
Details Dr ($) Cr ($) .
Cash 1,840,000
Sales revenue 1,840,000
To record the sales of products .
Warranty expenses 202,000
Estimated warranty liability 202,000
To record the expected warranty expenses .
Warranty liability account 106,000
Inventory 106,000
To record the warranty claim .
Warranty expenses 19,000
Estimated warranty liability 19,000
To record the reduction of expected warranty expenses to $115,000.
Assume the following: WIP, beginning 2 comma 500 units (100% complete as to direct materials, 50% complete as to conversion costs) Started 10 comma 500 units during the period Total spoilage is 700 with normal spoilage is calculated to be 550 units Completed and transferred out during the period 6 comma 000 units WIP, ending 6 comma 300 units (100% complete as to direct materials, 60% complete as to conversion costs) Spoiled units 700 and inspection happens when the process is 20% complete All materials are added at the start of the process Under the weighted average method, would would be the equivalent units of work done for the period? A. 9 comma 920 B. 10 comma 190 C. 6 comma 000 D. 6 comma 300
Answer:
B. 10 comma 190
Or none of the given
Explanation:
Particulars Units % of Completion Equivalent Units
Materials Conversion Materials Conversion
Transferred 6000 100 100 6000 6000
+Ending WIP 6300 100 60 6300 3780
+Normal Spoilage 550 100 60 550 330
+Abnormal
Spoilage 150 100 60 150 90
Total 13000 10200
As we see the total weighted Equivalent units for materials are 13000
and for conversion are 10200 . So the correct choice would be 10190 that is choice B which the nearest answer of the choices given to the answer calculated .
Under weighted method the Transferred out units are added to the ending work in process and the normal and abnormal spoilage is also added to find the equivalent units of production.
The other answer would be none of the given choices if exact figures are to be matched.
You should meet with your academic adviser at least once a __________.
Group of answer choices
Answer:
Once a Semester
Explanation:
Advisors can help you decide if you want to minor in something, and what the requirements are. They can ensure you're odds of graduating in four years is on track, or give you special permissions to take certain classes.
Samco signed a 5-year note payable on January 1, 2018, of $ 475 comma 000. The note requires annual principal payments each December 31 of $ 95 comma 000 plus interest at 9%. The entry to record the annual payment on December 31, 2021, includes A. a debit to Interest Expense for $ 17 comma 100. B. a debit to Interest Expense for $ 42 comma 750. C. a credit to Cash of $ 137 comma 750. D. a credit to Notes Payable for $ 95 comma 000.
Answer:
Option A, a debit to Interest Expense for $ 17 comma 100 is correct
Explanation:
The principal amount on 1st January 2021 needs to be established since that would be the amount left after 2018,2019,2020 principals have been repaid
Principal at 1st January 2021=$475,000-($95,000*3)=$190000
Interest on principal in 2021=$190000 *9%=$17100
Total repayment in 2021=principal plus interest=$95,000+$17,100=$ 112,100.00
The $95,000 would be a debit to notes payable not credit hence option is wrong.
Only option A,a debit of $17,100 to interest expense is correct
Suppose the economy is in long-run equilibrium. In a short span of time, there is a sharp rise in the stock market, an increase in government purchases, an increase in the money supply and a decline in the value of the dollar. In the short run a. the price level and real GDP will both rise. b. the price level and real GDP will both fall. c. neither the price leave nor real GDP will change. d. All of the above are possible.
Answer:
All of the above are possible.
Explanation:
Discussions here center on equilibrium of an economy in a long run, and here after the government activities, their is a decline in dollar value; therefore in the short run, the price level and real GDP will both rise in as much as the price level and real GDP will also both fall. It is also gathered that neither the price leave nor real GDP will change.
The transition from the short run to the long run may be done by considering some short run equilibrium that is also a long run equilibrium as to supply and demand, then comparing that state against a new short run and long run equilibrium state from a change that disturbs equilibrium, say in the sales tax rate, tracing out the short run adjustment first, then the long run adjustment.
Levine Company uses the perpetual inventory system. Apr. 8 Sold merchandise for $9,300 (that had cost $6,873) and accepted the customer's Suntrust Bank Card. Suntrust charges a 4% fee. 12 Sold merchandise for $5,000 (that had cost $3,240) and accepted the customer's Continental Card. Continental charges a 2.5% fee. Prepare journal entries to record the above credit card transactions of Levine Company
Answer:
Dr Apr 08 Cash $8,928
Dr Credit Card Expense $372
Cr Sales $9300
Apr 08 Cost of goods sold $6,873
Merchandise inventory $6,873
Dr Apr 12 Accounts receivable- Continental $4,875
Dr Credit card expense $125
Cr Sales $5,000
Dr Apr 12 Cost of Goods Sold $3,240
Cr Merchandise Inventory $3,240
Explanation:
Levine CompanyJournal entries
Date General Journal Debit Credit
Dr Apr 08 Cash $8,928
Dr Credit Card Expense $372
(4%×9300)
Cr Sales $9300
Apr 08 Cost of goods sold $6,873
Merchandise inventory $6,873
Dr Apr 12 Accounts receivable- Continental $4,875
Dr Credit card expense $125
(2.5%×5000)
Cr Sales $5,000
Dr Apr 12 Cost of Goods Sold $3,240
Cr Merchandise Inventory $3,240
Dinklage Corp. has 9 million shares of common stock outstanding. The current share price is $69, and the book value per share is $8. The company also has two bond issues outstanding. The first bond issue has a face value of $70 million, a coupon rate of 6 percent, and sells for 94 percent of par. The second issue has a face value of $55 million, a coupon rate of 5 percent, and sells for 106 percent of par. The first issue matures in 24 years, the second in 9 years.Suppose the most recent dividend was $4.25 and the dividend growth rate is 4.4 percent. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 25 percent. What is the company’s WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer:
10.83%
Explanation:
The simplest way to determine the if we use the Gordon growth model for determining the company's stock price:
stock price = [dividend x (1 + growth rate)] / (WACC - growth rate)
dividend = $4.25g = 4.4%stock price = $69WACC - g = [dividend x (1 + g] / price
WACC = {[dividend x (1 + g] / price} + g
WACC = {[$4.25 x (1 + 4.4%] / $69} + 4.4% = 0.1083 or 10.83%
We learned in class that Starbucks uses its baristas as front line “brand ambassadors”. This is an example of ________________?
A.
top management not doing their jobs
B.
Inverted Organization Structure
C.
Management by Objectives MBO
D.
Giving uneducated employees too much responsibility
Answer:
Inverted Organization Structure
Explanation:
An Inverted Organization Structure is a structure where the employees are given more autonomy. Employees are given more prominent and important roles in the business.
I hope my answer helps you
Option B is correct because it is an example of inverted organization structure.
An Inverted Organization Structure is a organizational structure where employees are given more autonomy in their operation, that is, they are given more prominent and important roles in the company.
This type of structure is beneficial because the top hierarchy have lesser work and employee get more experience because of decision-makings.
In conclusion, the Option B is correct because it is an example of inverted organization structure
Read more about inverted organization structure
brainly.com/question/23840012
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.
71. When making decisions that are ethical under either profit maximization or corporate citizenship theories, a business should include all of the following steps except a. recognize that there is an ethical issue in the decision. b. apply ethical theories to reasonable alternatives. c. publicize the options you rejected with your reasons. d. reflect on the outcome of the decision once it is made
Answer:
The Correct Option of the given scenario is "C - Publicize the options you rejected with your reasons".
Explanation:
While creating business selection it is ought to seek for the philosophies and integrities. However, don't create it public the explanations of captivating some choices as they are having dissimilarities in philosophies which might drawback your businesses.
Answer: c. publicize the options you rejected with your reasons.
Explanation:
Under the Profit Maximisation theory where ethical behaviour does not necessarily benefit the company and the corporate citizenship theory that describes just how a company contributes to society, all the above are methods applied execpt the publication of the options rejected with reasons.
This is because certain things need to remain confidential for the protection of individuals and reputations as well as to avoid scrutiny because a Company's methodology might not be the methodology that a number of people would subscribe to.
If the marginal propensity to consume decreases, then the marginal propensity to save will decrease by the same percentage. the spending multiplier will decrease. the money multiplier will decrease. the rate of savings will decrease. the spending multiplier will increase.
Answer:
1.If the marginal propensity to consume decreases, then
a)the marginal propensity to save will decrease by the same percentage.
b)the spending multiplier will decrease.
c)the money multiplier will decrease.
d)the rate of savings will decrease.
e)the spending multiplier will increase.
2.Which of the following might cause stagflation in an open-market economy operating at equilibrium in the intermediate range of the aggregate supply curve?
a)Over the course of time, companies begin to provide educational opportunities for their employees.
b)The price of oil decreases as new reserves are found in the Alaskan wilderness.
c)The government sets a price ceiling for gasoline below market equilibrium.
d)An earthquake causes a serious rupture in the Alaskan oil pipeline that will take 6 months to repair.
e)Consumers fear a recession so they cut back on spending causing massive layoffs in major cities across the United States.
3.According to Classical economists,
a)the economy is stable in the long run causing unemployment to increase during time of recession.
b)the economy is stable in the long run and macroeconomic equilibrium can occur at less than full employment.
c)the economy is stable in the long run and self correcting to full employment.
d)the economy is unstable in the long run causing unemployment to increase during time of recession.
e)the economy is unstable in the long run and self correcting to full employment.
4.Which of the following will cause a decrease in SRAS?
a)An increase in labor productivity
b)An decrease in employee wages
c)An increase in government regulations on businesses
d)An increase in consumer spending
e)A decrease in investment spending
5.When inflation has reached a peak, economists would say that the economy has reached the
a)trough of the business cycle.
b)expansion of the business cycle.
c)peak of the business cycle.
d)contraction of the business cycle.
e)bottom of the business cycle.
6.In the circular flow diagram, tourists spend money in
a)the product market that provides goods and services to firms.
b)the product market that provides profit for firms.
c)the product market that provides revenue for firms.
d)the factor market that provides profit for firms.
e)financial markets that provides profit for firms.
7.Which of the following statements about the official rate of unemployment in the United States is most accurate?
a)The official unemployment rate includes only structurally and frictionally unemployed persons.
b)The official unemployment rate is greater than the natural rate of unemployment.
c)The official unemployment rate does not include discouraged workers.
d)The official unemployment rate includes all unemployed persons except teenagers who would be counted as seasonally unemployed.
e)The official unemployment rate includes all people in the labor force who do not have jobs.
8.If the Federal Reserve purchases securities, then
a)consumer spending will increase and AD will shift right.
b)consumer spending will decrease and AD will shift left.
c)government spending will increase and AD will shift right.
d)investment spending will increase and AD will shift right.
e)investment spending will decrease and AD will shift left.
9.If, while maintaining a balanced budget, Congress decreases spending and taxes by $100 each, then
a)aggregate demand will shift right.
b)aggregate demand will shift left.
c)aggregate demand will remain the same.
d)aggregate supply will shift right.
e)aggregate supply will shift left
10)If Congress wanted to lower inflation and unemployment at the same time, it would most likely
a)increase the international value of the dollar.
b)increase spending on public works projects across the United States.
c)decrease personal income taxes.
d)pay subsidies to businesses that increase economic investment and provide increased training and education to their workers.
e)decrease welfare payments to the working poor.
Explanation:
elb Company currently manufactures 50,000 units per year of a key component for its manufacturing process. Variable costs are $2.95 per unit, fixed costs related to making this component are $67,000 per year, and allocated fixed costs are $61,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.90 per unit. Calculate the total incremental cost of making 50,000 units and buying 50,000 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier
Answer: Please refer to Explanation
Explanation:
Incremental Cost of Making Product
Variable costs are $2.95 per unit and 50,000 units are to be made. Total Variable Cost is therefore,
= 2.95 * 50,000
= $147,500
Fixed costs associated with the production are$ 67,000 so added tl the variable costs is,
= 147,500 + 67,000
= $214,500
$214,500 is the cost making the product.
Cost of Buying Product
Component can be bought for $3.90 per unit. 50,000 units to be bought gives,
= 50,000 * 3.9
= $195,000
Cost of buying is $195,000
Decision
Company should buy the component as it spends less in buying it than I making it.
Note - Allocated fixed costs were not included in calculation because they will be there regardless of the decision. Hence the term, incremental costs.
Answer:
elb Company
a) Incremental Cost of making 50,000 units:
Variable costs = $2.95 x 50,000 = $147,500
Avoidable fixed costs = $67,000
Total = $214,500
b) Incremental Cost of buying 50,000
Buy-in costs =- $3.90 x 50,000 = $195,000
c) The company should buy this component from the outside supplier.
Explanation:
In make or buy decisions, only variable and avoidable costs are taken into consideration. Unavoidable fixed costs are sunk costs which must be incurred irrespective of the choice made.
Therefore, the unavoidable allocated fixed costs of $61,500 should not be taken into consideration. Afterall, no matter the decision, it would still be incurred and allocated.
Crane Corporation had the following 2020 income statement. Sales revenue $197,000 Cost of goods sold 124,000 Gross profit 73,000 Operating expenses (includes depreciation of $19,000) 48,000 Net income $25,000 The following accounts increased during 2020: Accounts Receivable $10,000, Inventory $10,000, and Accounts Payable $11,000. Prepare the cash flows from operating activities section of Crane’s 2020 statement of cash flows using the direct method.
Answer:
$35,000
Explanation:
Crane Corporation
CASH FLOW STATEMENT
FOR THE YEAR ENDING 2020
Cash Flows from Operating Activities:
Net Income $25,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation on Fixed Assets $19,000
(Increase) Decrease in Current Assets:
Accounts Receivable ($10,000)
Inventory ($10,000)
Increase (Decrease) in Current Liabilities:
Accounts Payable $11,000
Net Cash Provided by operating activities $35,000
Cash Flow from Investing Activities: -
Cash Flow from Financing Activities: -
Net Increase (Decrease) in Cash $35,000
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
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%
Your aunt is about to retire, and she wants to sell some of her stock and buy an annuity that will provide her with income of $53,000 per year for 30 years, beginning a year from today. The going rate on such annuities is 7.25%. How much would it cost her to buy such an annuity today
Answer:
Present Value= $641,494.12
Explanation:
Giving the following information:
Cash flow= $53,000 per year
Number of years= 30 years
Interest rate= 7.25%
First, we need to calculate the final value of the annuity:
FV= {A*[(1+i)^n-1]}/i
A= annual flow
FV= {53,000*[(1.0725^30)-1]} / 0.0725
FV= $5,237,351.32
Now, we can determine the present value:
PV= FV/(1+i)^n
PV= 5,237,351.32/ (1.0725^30)
PV= $641,494.12
