What are the choices made by households and firms that determine what, how, and for whom goods and services are produced? Where in the circular flow model, do these choices appear?
Answer:
What are the choices made by households and firms that determine what, how, and for whom goods and services are produced? Where in the circular flow model, do these choices appear?
Explanation:
The circular flow model depicts how families and enterprises, as well as the marketplaces for resources and products and services, interact with one other and with other groups of economic decision-makers.
What is circular flow of income?A model of the economy known as the circular flow of income or flow in which the primary exchanges are shown as flows of money, goods, and services, etc. between economic agents. In a closed circuit, the flows of money and items traded have values that are same but flow in the opposite direction. The circular flow analysis is the cornerstone of macroeconomics and national accounts.
Richard Cantillon's work already had the circular flow concept. In his so-called Tableau économique, François Quesnay elaborated and illustrated this idea.
The National Income and Product Accounts, for instance, use the concept of the circular flow of income to help better comprehend the economy as a whole (NIPAs).
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An increase in the expected price level shifts a. the short-run aggregate supply curve to the left but does not affect the long-run aggregate supply curve. b. the long-run aggregate supply curve to the left but does not affect the short-run aggregate supply curve. c. neither the long-run aggregate supply curve nor the short-run aggregate supply curve to the left. d. both the short-run and long-run aggregate supply curves to the left.
When there is an increase in the expected price level, it will shift a. the short-run aggregate supply curve to the left but does not affect the long-run aggregate supply curve.
What happens when there is an increase in expected price level?The increase in expected price level will lead to the short run aggregate supply curve shifting to the left.
This is because suppliers will reduce supply so that they can make more profit when the prices rise in the immediate future. The long run aggregate supply curve will not be affected because supply would normalize eventually.
In conclusion, option A is correct.
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According to your research, the growth rate in dividends for DR Dime for the previous 10 years has been negative 14 percent. If investors feel this growth rate will continue, what is the required return for DR Dime stock?
The required return for DR Dime stock will be -9.07% If the investors felt the growth rate will continue.
What is the formula for required return?The formula for required return is Ke = (D0(1+q)/P0 + q)
Given data
D0 = 0.89
G = -14%
P0 = 15.52
Required return = (0.89*(1-0.14)/15.52) +-0.14
Required return = 0.0493170103 - 0.14
Required return = -0.0906829897
Required return = -9.07%
In conclusion, the required return for DR Dime stock is -9.07%.
Missing options "You've collected the following information from your favorite financial website. 52-Week PriceStock (Div)DivYld %PERatioClosePriceNetChgHiLo77.40 10.43 Palm Coal .362.6 6 13.90 -.24 55.81 33.42 Lake Lead Grp 1.543.8 10 40.43 -.01 130.93 69.50 SIR 2.002.2 10 88.97 3.07 50.33 14.04 DR Dime .895.7 6 15.52 -.26 35.00 20.74 Ca"
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What does 'Big Data' mean? And how it can be used to support businesses?
Answer:
Big Data, business organizations can use analytics, and figure out the most valuable customers. It can also help businesses create new experiences, services, and products
Explanation:
Hope this helps
The linear production possibility frontier in the US indicates that the US can produce 10 tons of wheat in day or 2 cars. Japan can produce 8 tons of wheat or 1 car in a day. The opportunity cost of producing a car in the Japan is
Based on the amount of wheat given up by Japan to make a car, the opportunity cost of producing a car would be 8 tons of wheat.
What is the opportunity cost of making a car in Japan?The opportunity cost in this instance will be the amount of wheat given up by Japan to produce a car.
It is therefore:
= 8 tons of wheat
In conclusion, the opportunity cost is 8 tons of wheat.
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Axe company sponsors a 401(k) profit sharing plan with no employer match, but the company did make noncontributory employer contributions because the plan was top-heavy. Jack quit today after six years working for Axe and has come to you to determine how much of his retirement balance he can take with him. The plan uses the least generous graduated vesting schedule available. What is Jack's vested account balance if he has been a participant for 57 months? EMPLOYER EMPLOYEE CONTRIBUTIONS $9,000 $12,000 EARNINGS $4,000 $5,000 a. $17,000. b. $27,400. c. $24,800. d. $30,000.
Answer:
d. $30,000.
Explanation:
Jack is entitled to 100% of his own contributions = $9,000 + $4,000 = $13,000
The following is the least generous vesting schedule
Least-generous graded vesting schedule
Years of service % vested
1 0%
2 20%
3 40%
4 60%
5 80%
6 100%
Since jack worked for 57 months, he is entitled to 100% of the employer's contributions = $12,000 + $5,000 = $17,000
Total account balance = $13,000 + $17,000 = $30,000
Hakara Company has been using direct labor costs as the basis for assigning overhead to its many products. Under this allocation system, product A has been assigned overhead of $21.86 per unit, while product B has been assigned $13.35 per unit. Management feels that an ABC system will provide a more accurate allocation of the overhead costs and has collected the following cost pool and cost driver information:
Cost Pools Activity Costs Cost Drivers Activity Driver Consumption
Machine setup $360,000 Setup hours 4,000
Materials handling 85,000 Pounds of materials 17,000
Electric power 50,000 Kilowatt-hours 25,000
The following cost information pertains to the production of A and B, just two of Hakara's many products:
A B
Number of units produced 4,000 10,000
Direct materials cost $39,000 $38,000
Direct labor cost $22,000 $27,000
Number of setup hours 100 200
Pounds of materials used 2,000 2,000
Kilowatt-hours 2,000 4,000
Required:
Use activity-based costing to determine a unit cost for each product.
Answer:
Unitary cost A= $21
Unitary cost B= $10.1
Explanation:
First, we need to calculate the predetermined overhead rate for each activity:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Machine setup= 360,000/4,000= $90 per setup hour
Materials handling= 85,000/17,000= $5 per pound
Electric power= 50,000/25,000= $2 per killowat
Now, we can allocate overhead to each product:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Product A:
Machine setup= 90*100= $9,000
Materials handling= 5*2,000= $10,000
Electric power= 2*2,000= $4,000
Total= $23,000
Product B:
Machine setup= 90*200= $18,000
Materials handling= 5*2,000= $10,000
Electric power= 2*4,000= $8,000
Total= $36,000
Finally, the total cost and unitary cost:
Product A:
Total cost= 39,000 + 22,000 + 23,000= $84,000
Unitary cost= 84,000/4,000= $21
Product B:
Total cost= 38,000 + 27,000 + 36,000= $101,000
Unitary cost= 101,000/10,000= $10.1
Carlise Corp., which manufactures ceiling fans, currently has two product lines, the Indoor and the Outdoor. Carlise has total overhead of $124,916. Carlise has identified the following information about its overhead activity cost pools and the two product lines:
Activity Cost Pools Cost Driver Cost Assigned to Pool Quantity/Amount Consumed by Indoor Line Quantity/Amount Consumed by Outdoor Line
Materials handling Number of moves $18,236 570 moves 370 moves
Quality control Number of inspections $77,420 5,600 inspections 4,200 inspections
Machine maintenance Number of machine hours $29,260 27,000 machine hours 11,000 machine hours
Required:
Suppose Carlise used a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line.
Answer:
For indoor = $88,756
For outdoor = $72,666
Explanation:
The computation of the amount of overhead assigned to each product line is given below:-
Traditional Costing
Machine Hours Overhead Assigned
Indoor Model 27,000 88,756
($124,916 ÷ 38,000) × 27,000
Outdoor Model 11,000 72,666
($124,916 ÷ 38,000) × 11,000
Total 38,000 $161,442
The general ledger of Pipers Plumbing at January 1, 2021, includes the following account balances:
Accounts Debits Credits
Cash $4,000
Accounts Receivable 9,000
Supplies 3,000
Equipment 26,000
Accumulated Depreciation $6,000
Accounts Payable 4,000
Utilities Payable 5,000
Deferred Revenue 0
Common Stock 18,000
Retained Earnings 9,000
Totals $42,000 $42,000
The following is a summary of the transactions for the year:
1. January 24 Provide plumbing services for cash, $15,000, and on account, $60,000.
2. March 13 Collect on accounts receivable, $48,000.
3. May 6 Issue shares of common stock in exchange for $10,000 cash.
4. June 30 Pay salaries for the current year, $32,000.
5. September 15 Pay utilities of $5,000 from 2020 (prior year).
6. November 24 Receive cash in advance from customers, $8,000.
7. December 30 Pay $2,000 cash dividends to stockholders.
The following information is available for the adjusting entries.
Depreciation for the year on the machinery is $6,000. Plumbing supplies remaining on hand at the end of the year equal $1,000. Of the $8,000 paid in advance by customers, $6,000 of the work has been completed by the end of the year. Accrued utilities at year-end amounted to $7,000.
Required:
Complete the full accounting cycle.
Answer:
1. January 24 Provide plumbing services for cash, $15,000, and on account, $60,000.
Dr Cash 15,000
Dr Accounts receivable 60,000
Cr Service revenue 75,000
2. March 13 Collect on accounts receivable, $48,000.
Dr Cash 48,000
Cr Accounts receivable 48,000
3. May 6 Issue shares of common stock in exchange for $10,000 cash.
Dr Cash 10,000
Cr Common stock 10,000
4. June 30 Pay salaries for the current year, $32,000.
Dr Wages expense 32,000
Cr Cash 32,000
5. September 15 Pay utilities of $5,000 from 2020 (prior year).
Dr Utilities payable 5,000
Cr Cash 5,000
6. November 24 Receive cash in advance from customers, $8,000.
Dr Cash 8,000
Cr Unearned revenue 8,000
7. December 30 Pay $2,000 cash dividends to stockholders.
Dr Dividends 2,000
Cr Cash 2,000
Adjusting entries:
Depreciation for the year on the machinery is $6,000.
Dr Depreciation expense 6,000
Cr Accumulated depreciation 6,000
Plumbing supplies remaining on hand at the end of the year equal $1,000.
Dr Supplies expense 2,000
Cr Supplies 2,000
Of the $8,000 paid in advance by customers, $6,000 of the work has been completed by the end of the year.
Dr Unearned revenue 6,000
Cr Service revenue 6,000
Accrued utilities at year-end amounted to $7,000.
Dr Utilities expense 7,000
Cr Utilities payable 7,000
Pipers Plumbing
Trial balance
For the year ended December 31, 2021
debit credit
Cash $46,000
Accounts Receivable $21,000
Supplies $1,000
Equipment $26,000
Accumulated Depreciation $12,000
Accounts Payable $4,000
Utilities payable $7,000
Deferred Revenue $2,000
Common Stock $28,000
Retained Earnings $9,000
Service revenue $81,000
Wages expense $32,000
Depreciation expense $6,000
Supplies expense $2,000
Utilities expense $7,000
Dividends $2,000
Totals $143,000 $143,000
Pipers Plumbing
Income statement
For the year ended December 31, 2021
Service revenue $81,000
Wages expense $32,000Depreciation expense $6,000Supplies expense $2,000Utilities expense $7,000 ($47,000)Net income $34,000
Pipers Plumbing
Retained Earnings Statement
For the year ended December 31, 2021
Beginning balance January 1, 2021 $9,000
Net income $34,000
Subtotal $43,000
Dividends ($2,000)
Ending balance December 31, 2021 $41,000
Pipers Plumbing
Balance Sheet
For the year ended December 31, 2021
Assets:
Cash $46,000
Accounts Receivable $21,000
Supplies $1,000
Equipment, net $14,000
Total assets $82,000
Liabilities:
Accounts Payable $4,000
Utilities payable $7,000
Deferred Revenue $2,000
Total liabilities $13,000
Stockholders' Equity
Common Stock $28,000
Retained Earnings $41,000
Total stockholders' equity $69,000
Total liabilities + equity $82,000
You were hired as a consultant to Kangaroo Corporation, whose target capital structure
is 30% debt, 5% preferred, and 65% common equity. The before-tax cost of debt is
9.55%, the yield on preferred is 8.75%, and the cost of retained earnings is 14.00%.
The tax rate is 35%.
1. What is the company's WACC?
Answer: 11.4%
Explanation:
The weighted average cost of capital (WACC) is used by companies to calculate their cost of capitsk. It should be noted that a weight is assigned to every category of capital that's utilized.
Sources of capital, such as bonds, common and preferred stock, etc are included when the WACC is being calculated.
The WACC for the company is 11.4%. Check the attachment for more details.
Activity-based Costing—Comprehensive Problem [lo 2] The Riverdale Printing Company prints limited edition art books with production runs of 15,000 to 100,000. It has recently adopted an activity-based costing system to assign manufacturing overhead to products. The following data relate to one product, Art of Design, and the ABC cost pools:
Art of Design:
Annual production 40,000 units
Direct materials $37
Direct labor per unit $8
Manufacturing overhead
cost pools Cost Pool Cost Driver $ 840,000
Materials ordering $840,00 Number of purchase orders
Materials inspection 525,000 Number of receiving reports
Equipment setup 2,500,000 Number of setups
Quality control 1,000,000 Number of inspections
Other 25,000,000 Direct labor cost
Total manufacturing overhead
Annual activity information related to cost drivers:
Cost Pool All Books Art of Design
Materials ordering 120,000 orders 1,200
Materials inspection 2,100receiving reports 315
Equipment setup 125 setups 1
Quality control 5,000 inspections 500
Other $12,500,000 direct labour $320,000
a. Calculate the overhead rate per unit of activity for each of the five cost pools.
b. Calculate the total overhead assigned to the production of the Art of Design. Round to two decimal places.
c. Calculate the overhead cost per unit for the Art of Design.
d. Calculate the total unit cost for the Art of Design.
e. Suppose that Riverdale Printing allocates overhead by a traditional production volume-based method using direct labor dollars as the allocation base and one cost pool. Determine the over- head rate per direct labor dollar and the per unit overhead assigned to the Art of Design. Discuss the difference in cost allocations between the traditional method and the activity-based costing approach.
Answer:
Instructions are below.
Explanation:
a)
First, we need to calculate the activity rate for each activity:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Materials ordering= 840,000/121,200= $6.93 per order
Materials inspection= 525,000/2,415= $217.39 per report
Equipment setup= 2,500,000/126= $19,841.27 per setup
Quality control= 1,000,000/5,500= $181.82 per inspection
Other= 25,000,000/12,820,000= $1.95 per direct labor dollar
b)
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Materials ordering= 6.93*1,200= 8,316
Materials inspection= 217.39*315= 68,477.85
Equipment setup= 19,841.27*1= 19,841.27
Quality control= 181.82*500= 90,910
Other= 1.95*320,000= 624,000
Total allocated costs= $811,545.12
c)
Unitary overhead= 811,545.12/40,000= $20.30
d)
To calculate the unitary production cost, we need to use the following formula:
Total unitary cost= direct material + direct labor + allocated overhead
Total unitary cost= 37 + 8 + 20.3
Total unitary cost= $65.3
e) Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 29,865,000/12,820,000
Predetermined manufacturing overhead rate= $2.33 per direct labor costs
Allocated MOH= 2.33*320,000= $745,600
Unitary overhead= 745,600/40,000= $18.64
The difference between a plantwide predetermined overhead rate and an activity-based, is that the second one is more accurate. The allocation process is specific and more efficient.
For an accountant, which of the following tasks is the most likely to be done
on spreadsheet software?
A. Performing mathematical formulas
B. Generating account numbers
C. Printing source documents
D. Purchasing bookkeeping systems
SUBMIT
Answer:
Performing mathematical formulas
Explanation:
APEX
Over the last 20 years several family breweries have sprung up, offering new beer products with unique characteristics. This has led to the availability of types of beers such as spontaneously fermented beers and speciality top fermented beers such as ales, white beers and Trappist beers. Trappist beers are top fermented beers and get their names from the places where they are produced namely in abbeys called Trappist monasteries. The beers are produced by monks of the Trappist order and marketed as authentic Trappist products. Tourists make an effort to visit these breweries to buy Trappist beers and to experience the unique culture of speciality beer. The Trappist beer companies need to consider what the future might offer, how this will affect the business and what resources and actions are necessary to prepare for it. This refers to the following management skill
Answer:
manager
Explanation:
necessary to prepare for it. This refers to the following management skill
Why is the equality of marginal revenue and marginal cost essential for profit maximization in all market structures
Answer:
Explanation:
Thirty-five samples of size 7 each were taken from a fertilizer-bag-filling machine at Panos Kouvelis Lifelong Lawn Ltd. The results were: Overall mean = 54.75 lb.; Average range R = 1.64 lb.
For the given sample size, the control limits for 3-sigma x chart are: _________
Based on the overall mean, the average range, and the control limit factor, the upper control limit is 55.437.
What is the upper control limit?This can be found by the formula:
= Overall mean + (Mean factor for sample size 7 x Average range)
Solving gives:
= 54.75 + (0.419 x 1.64)
= 55.437
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In organizing groups to work on homework together every student is asked to fill out a form listing all other students who they would be willing to work with. If there are 251 students in the class and each student lists exactly 168 other students who they might be willing to work with. For any two students in the class, if student A puts student B on their list, then students B will also have student A on their list.
Required:
Using the Pidgeon Hole show that there must be some group of four students who are work with one another.
The principle shows that there would be some group of 4 students that are willing to work with one another.
The goal here is to help the students to form homework groups using the Pigeon hole system.
The pigeon hole principleWe have to take a random student A.We have a student B that is in the list of A.The number of students in A list is 168, this is 167 when we subtract B.
168 students have A in their list. This is 167 when we subtract A.
Total students = 250-1 ( We have to subtract A and B) = 249
249 - 167 = 82 students have B in their list and not A.
167 - 82 = 85, these are the students that have both A and B in their list.
We have a student C who have both A and B in the lis.
Thre are 84 students other than c who have A and B in the list. This is a set called s.
168 students have c in their list. There have to be at least 2 students from s in this number.
This would leave 166 students other than s.
At least 1 student wants c, a and b in the list.
We conclude that there is one group of 4 who are to work with one another.
What is the pidgeon hole analysis?In mathematics, this principle states that if objects are in a container, then at least one container is going to have more than one item.
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A__________can help you decide if you should buy or lease a new car.
a.
Diagram
c.
Flowchart
b.
Table
d.
Timeline
Please select the best answer from the choices provided
A
B
C
D
Answer:
Probably A
Explanation:
Diagrams can show the depreciating value and stuff, B could also be the answer but not as good of one as A.
A flowchart can help you decide if you should buy or lease a new car. Option (c) is correct.
What do you mean by Diagram?A diagram is a straightforward drawing that primarily comprises of lines and is used, for instance, to describe how a machine operates.
A flowchart is a diagram that shows a process' individual steps in their proper order. It is a general tool that may be customized for a wide range of uses and used to define a variety of processes, including a project plan, an administrative or service process, or a manufacturing process. There are four types of flowchart that is Document flowchart, Data flowchart, System flowchart, Program flowchart.
Therefore, Option (c) is correct. A flowchart can help you decide if you should buy or lease a new car.
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Which of the following statements about investment interest expense is true? Multiple Choice The interest is allowed as an unlimited above-the-line deduction. The interest is allowed as an unlimited itemized deduction. Nondeductible interest carries forward into future years. The interest is deductible to the extent of the individual's AGI.
The statement about investment interest expense which is true is:
Nondeductible interest carries forward into future yearsWhat is Investment Interest Expense?This refers to the amount of interest paid which is then used to buy investments.
With this in mind and from the given answer choices, we can see that the true statement about the investment interest expense is option C which states that Nondeductible interest carries forward into future years.
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During the current year, George, a salaried taxpayer, paid the following taxes which were not incurred in connection with a trade or business: Federal income tax (withheld by employer) $1,500 State income tax (withheld by employer) $1,100 FICA tax (withheld by employer) $700 Real property taxes $300 Federal auto gasoline taxes $200 Federal excise tax on telephone bills $50 What amount can George claim for the current year as an itemized deduction for the taxes paid, assuming he deducts state and local income taxes
The amount that George can claim as itemized deductions for the taxes paid is $1,400.
What itemized deductions can George claim?George deducts state and local taxes which means that the only deductions that he can claim from here are the state income tax and the real property taxes.
These add up to:
= State income taxes + Real property taxes
= 1,100 + 300
= $1,400
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What effect do consumer expectations have on the demand for a good?
A. They increase demand for products that have complementary
goods.
B. They reduce demand for products with a consistent equilibrium
price.
C. They increase demand for products in markets with a small
number of consumers.
D. They reduce demand for products expected to become cheaper in
the future.
Answer:
Option D is correct
Explanation:
If a buyer expects that the price of a good will decrease in the future, they stop or decrease the purchasing of that good today. A a result, the demand for that good today decreases. On the other hand, if a buyer expects that the price of the good will increase in the future, the demand for the good increases.
Option D. is correct.
Answer:
D. They reduce demand for products expected to become cheaper in
the future.
Explanation:
Orange Inc., an orange juice producer with a current debt-to-equity ratio of 2, is considering expanding its operations to produce toothpaste. Unsurprisingly, the toothpaste industry faces a different set of risks than the orange juice industry. However, the executives at Orange Inc. observe that Paste Inc., a toothpaste company, has a cost of equity of 12%, a cost of debt of 6%, and a debt-to-value ratio of 40%. Orange Inc. plans to finance its expansion into toothpaste production with 50% debt and 50% equity. The cost of debt for Orange Inc. is also 6%, and the corporate tax rate is 25%.
Required:
Solve for the discount rate that Orange Inc. should use when evaluating whether to go forward with the expansion.
Answer:
8.25%
Explanation:
Orange, Inc. should calculate the MARR (minimum acceptable rate of return) for this project using the following:
Re = 12% (similar to Paste, Inc., so it can be considered the industry's average)
Rd = 6% x (1 - 25%) = 4.5%
MARR = (1/2 x 12%) + (1/2 x 4.5%) = 6% + 2.25% = 8.25%
This calculation is similar to calculating a company's WACC since you must determine the weighted cost of financing the project.
Which type of firm would you rather work for? One who lays people off, or one that cuts everyone’s hours? Why? Think about the tradeoffs involved. Please use marginal analysis (ref. chapter 1) in your reasoning, and back up any claims you make with some documentation.
If a law was passed that required all firms to cut hours instead of lay people off, so that everybody was guaranteed a job and only hours worked fluctuated (instead of experiencing joblessness), what do you think the economic consequences would be? Specifically:;
Answer:
the one that cuts every ones hours
Explanation:
because the one that lays people off u won't have a job not paying bill the one that cuts hours because u work less but still get paid
Nair Corp. enters into a contract with a customer to build an apartment building for $1,000,000. The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of $150,000 to be paid if the building is ready for rental beginning August 1, 2021. The bonus is reduced by $50,000 each week that completion is delayed. Nair commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes:
Completed by Probability
August 1, 2015 70%
August 8, 2015 20
August 15, 2015 5
After August 15, 2015 5
Required:
Determine the transaction price for this contract.
The determination of the transaction price for this contract for Nair Corp. is as follows:
Completed by Probability:
Date Probability Bonus/Penalty Outcome
August 1, 2015 70% $150,000 $105,000 ($150,000 x 70%)
August 8, 2015 20% $50,000 -10,000
August 15, 2015 5% $50,000 -2,500
After August 15, 2015 5% $50,000 -2,500
Total expected value of performance bonus = $135,000
Contract value = $1,000,000
Total transaction price = $1,135,000 ($1,000,000 + $135,000).
What is a transaction price?A transaction price is the amount of consideration expected to be paid or received for the exchange of goods or services.
A transaction price can vary based on timing or performance factors.
Data and Calculations:Contract value = $1,000,000
Performance bonus = $150,000
Penalty per week in performance bonus = $50,000
The total transaction price is $1,135,000.
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Big Red Company, a manufacturer of computer hardware components, uses direct labor cost to allocate its production overhead. In its hard-drive division, it allocates $12.50 per direct labor hour as the standard rate. The overhead includes supervision and machine setup cost. SCSI and SATA drives take the same time to produce, but the setup time for SATA is three times as long as the setup time for SCSI. Which statement is true about overhead allocation for the two drives?
А SATA carries more than its full share of factory overhead.
B Overhead allocation is fair for both drives.
C. SATA carries less than its full share of factory overhead.
D Overhead allocation cannot be directly related to products.
Answer:
Option C is correct.
Explanation:
Big Red Company allocates $12.50 per direct labor hour as the standard rate and uses direct labor cost to allocate its production overhead.
However, he setup time for SATA is three times as long as the setup time for SCSI although SCSI and SATA drives take the same time to produce.
This shows that SATA carries less than its full share of factory overhead.
Kenneth Arrow argues that Group of answer choices settled economic life requires purely selfish behavior. with ethical codes, there's no need for taxes, laws, or regulations as a way of controlling corporate behavior. ethical codes can contribute to economic efficiency. to be viable, ethical codes need not be widely accepted or part of corporate culture.
Kenneth Arrow simply argues that C. ethical codes can contribute to economic efficiency.
What is ethics?It should be noted that ethics simply means knowing right from wrong. This is important in societies.
In this case, Kenneth Arrow simply argues that ethical codes can contribute to economic efficiency.
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Kator Co. is a manufacturer of industrial components. One of its products that is used as a subcomponent in auto manufacturing is KB-96. This product has the following financial structure per unit: Selling price $150 Direct materials $ 20 Direct labor 15 Variable manufacturing overhead 12 Fixed manufacturing overhead 30 Shipping and handling 3 Fixed selling and administrative 10 Total costs $ 90 Question During the next year, KB-96 sales are expected to be 10,000 units. All of the costs will remain the same except that fixed manufacturing overhead will increase by 20% and direct materials will increase by 10%. The selling price per unit for next year will be $160. Based on this data, the contribution margin from KB-96 for next year will be A. $1,080,000 B. $750,000 C. $1,110,000 D. $620,000
Answer:
A. $1,080,000
Explanation:
Calculation for the contribution margin from KB-96 for next year
First step is to calculate for the increase in direct materials
Increase in direct materials = (1.1 × $20)
Increase in direct materials =$22 per unit
Second is to calculate the variable costs
Total unit variable costs = ($22 + $15 + $12 + $3
Total unit variable costs = $52
Last step is the Computation of contribution margin using this formula
Contribution margin =Sales - Variable costs
Let plug in the formula
Contribution margin =10,000 units ($160 unit Selling price -$52)]
Contribution margin =10,000 units *$108
Contribution margin=$1,080,000
Therefore the contribution margin from KB-96 for next year will be $1,080,000
Gilberto's Performance Pizza is a small restaurant in Chicago that sells gluten-free pizzas. Gilberto's very tiny kitchen has barely enough room for the two ovens in which his workers bake the pizzas. Gilberto signed a lease obligating him to pay the rent for the two ovens for the next year. Because of this, and because Gilberto's kitchen cannot fit more than two ovens, Gilberto cannot change the number of ovens he uses in his production of pizzas in the short run.
However, Gilberto's decision regarding how many workers to use can vary from week to week because his workers tend to be students. Each Monday, Gilberto lets them know how many workers he needs for each day of the week. In the short run, these workers are ________ inputs, and the ovens ________ inputs.
Answer:
However, Gilberto's decision regarding how many workers to use can vary from week to week because his workers tend to be students. Each Monday, Gilberto lets them know how many workers he needs for each day of the week. In the short run, these workers are VARIABLE inputs, and the ovens FIXED inputs.
Explanation:
In the long run, all inputs are variable. E.g. in 5 years Gilberto might build his own pizza place and he will be able to make the kitchen as large as he wants.
But in the short run, some inputs are variable because they can be changed immediately, e.g. the number of workers changes on a weekly basis. While other inputs are fixed, and cannot be changed, e.g. Gilberto has a two yer lease contract for the ovens, so he will continue to use these ovens until the lease expires (in 2 years).
The long run and short doesn't depend on time, but on the ability of being able to change the inputs consumed by a business. The long run might represent 10 years for a company that signed a 10 year lease contract.
A company has following happened in last year
a. Purchased buildings costing $414 and equipment costing $218 for cash.
b. Borrowed $129 from a bank, signing a short-term note.
c. Provided $51,771 in service to customers during the year, with $27,058 on account and the rest received in cash.
d. Paid $136,274 cash on accounts payable.
e. Purchased $30,983 of inventory on account.
f. Paid payroll, $4,540 during the year.
g. Received $21,343 on account paid by customers.
h. Purchased and used fuel of $1,850 in delivery vehicles during the year (paid for in cash).
i. Declared $598 in dividends at the end of the year to be paid the following year.
j. Incurred $116 in utility usage during the year; paid $97 in cash and owed the rest on account.
Required:
General journal entries.
a. Purchased buildings costing $414 and equipment costing $218 for cash.
b. Borrowed $129 from a bank, signing a short-term note.
c. Provided $51,771 in service to customers during the year, with $27,058 on account and the rest received in cash.
d. Paid $136,274 cash on accounts payable.
e. Purchased $30,983 of inventory on account.
f. Paid payroll, $4,540 during the year.
g. Received $21,343 on account paid by customers.
h. Purchased and used fuel of $1,850 in delivery vehicles during the year (paid for in cash).
i. Declared $598 in dividends at the end of the year to be paid the following year.
j. Incurred $116 in utility usage during the year; paid $97 in cash and owed the rest on account.
Required:
General journal entries.
a. Purchased buildings costing $414 and equipment costing $218 for cash.
b. Borrowed $129 from a bank, signing a short-term note.
c. Provided $51,771 in service to customers during the year, with $27,058 on account and the rest received in cash.
d. Paid $136,274 cash on accounts payable.
e. Purchased $30,983 of inventory on account.
f. Paid payroll, $4,540 during the year.
g. Received $21,343 on account paid by customers.
h. Purchased and used fuel of $1,850 in delivery vehicles during the year (paid for in cash).
i. Declared $598 in dividends at the end of the year to be paid the following year.
j. Incurred $116 in utility usage during the year; paid $97 in cash and owed the rest on account.
Required:
General journal entries.
a. Purchased buildings costing $414 and equipment costing $218 for cash.
b. Borrowed $129 from a bank, signing a short-term note.
c. Provided $51,771 in service to customers during the year, with $27,058 on account and the rest received in cash.
d. Paid $136,274 cash on accounts payable.
e. Purchased $30,983 of inventory on account.
f. Paid payroll, $4,540 during the year.
g. Received $21,343 on account paid by customers.
h. Purchased and used fuel of $1,850 in delivery vehicles during the year (paid for in cash).
i. Declared $598 in dividends at the end of the year to be paid the following year.
j. Incurred $116 in utility usage during the year; paid $97 in cash and owed the rest on account.
Required:
General journal entries.
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Suppose an oil company is thinking of buying some land for $950,000. There is a 60% chance of economic growth and a 40% chance of recession. The probability of discovering oil is 46% when there is economic growth and 34% when there is a recession. If there is economic growth and the oil company discovers oil, the value of the land will triple. If they do not discover oil, the value of the land will decrease by 10%. If there is a recession and the company discovers oil, the value of the land will increase by 50%. If they do not discover oil, the land will decrease in value by 75%. What is the expected value of the investment
Answer:
$619,210
Explanation:
As we know that:
Expected Value = ∑P1V1 + ∑P2V2 + ∑P3V3 + ............... + ∑PnVn
Individual Expected Value for (n=1) = ∑P1V1
Here
Case Scenario 1:
P1 is the joint probability under Economic Growth & oil discovery positions
= 60% * 46% = 27.6%
V1 is the Value of investment under case scenario 1 which is three times: Value = 300% * $950,000 = 2,850,000
Expected Value of land = 27.6% * 2,850,000 = $786,600
Case Scenario 2:
P2 is the joint probability under Economic Growth & No oil discovery positions = 60% * 52% = 31.2%
V2 is the Value of investment in this case would be:
Value = (1 - 10%) * 950,000 = 855000
Expected Value of land = 31.2% * 855,000 = $266,760
Case Scenario 3:
P3 is the joint probability under Recession and Oil Discovery ) = 46%*34%
= 0.1564
V3 is the Value of investment here:
Value = 950,000 * 150% = 1,425,000
Expected Value of land = 31.2% * 1,425,000 = $444,600
Case Scenario 4:
P4 is the joint probability under Recession and no oil Discovery = 40%*75%
= 30%
V4 is the Value of investment here:
Value = (1 - 75%) * $950,000 = $237,500
Expected Value of land = 30% * $237,500 = $71,250
Now,
Expected Value = ∑P1V1 + ∑P2V2 + ∑P3V3 + ∑P4V4
By putting the above values, we have:
Expected Value of Land = $786,600 + $266,760 + $444,600 + $71,250
Expected Value of Land = $1,569,210
The above expected value is of land. Now we want the expected value of the investment. For this reason we will deduct the cost of the land from the expected value of the land.
Now we have:
Expected value of Investment = $1,569,210 - $950,000 = $619,210
The expected value of Investment is a positive value, which means that the investment will generate average value of $619,210 for the oil company. Thus the company must invest in it.
A U.S. government agency located in Kuwait bought 29 standby power generators (including installation) from a trading company in Kuwait. The contract was effectively written in USD for $1,588,000 (worth 447,180.80 KWD) since the exchange rate of .2816 was fixed in the contract. The performance period was 90 days; however, the buyer expected complications such as material availability and security access passes from the host nation to delay contract performance. See attached excerpt from the contract. Assume payment terms were Net 30. Assume the Kuwaiti Dinar is a floating currency. The buyer was aware that the KWD had strengthened against the USD since 2003. Although Financial Management personnel informed the buyer that a hedging strategy would not be used, the buyer could see the 90-day currency exchange forward contracts indicating the exchange rate moving to USD/KWD = .265. From the buyer’s perspective, which currency should the contract have been written in had the exchange rate not been fixed in the contract? ______ What would be the financial advantage (expressed in USD) of doing so? _______
Answer: KWD; $99474 avoided
Explanation:
From the question, we're informed that the buyer was aware that the KWD had strengthened against the USD since 2003 coupled with the fact that KWD is a floating currency, it'll have been better if the contract was written in KWD as this will mean lesser money is paid.
Since 1 USD = 0.2816 KWD, and has been predicted to reduce to 1 USD = 0.265, the company would save:
= $1,588,000 × (0.2816-0.265)/0.265
= ($1,588,000 × 0.0166)/0.265
= $26360.8/0.265
= $ 99474