Answer:
A plastic container company, raises the price of its signature Lunchbox container from $3.00 to $4.00 . As a result, the quantity sold drops from 20,000 to 15,000.
PED = (15,000 - 20,000)/[(20,000 + 15,000)/2] / (4 - 3)/[(4 + 3)/2]
PED = -0.2857 / 0.2857 = -1 or |1| in absolute terms
PED is unitary elastic, since a 1% increase in price will result in a 1% decrease in quantity demanded.
Capital Metro decides to increase bus fare rates from $2.00 to $2.21 . Consequently, the number of passengers who decide to take the bus in Austin drops from an average of 70,000 riders a day to an average of 61,000 riders a day.
PED midpoint method = (61,000 - 70,000)/[(61,000 + 70,000)/2] / (2.21 - 2)/[(2.21 + 2)/2]
PED midpoint method = -0.1374 / 0.0998 = -1.38 or |1.38| in absolute terms
PED is elastic, since a 1% increase in price will result in a larger decrease in quantity demanded.
Explanation:
PED midpoint method = (Q2 - Q1)/[(Q2 + Q1)/2] / (P2 - P1)/[(P2 + P1)/2]
Hudson Corporation will pay a dividend of $3.26 per share next year. The company pledges to increase its dividend by 6.5 percent per year indefinitely. If you require a return of 15 percent on your investment, how much will you pay for the company’s stock today?
The value of the company' stock today given the dividend, growth rate and required return is $38.35.
What is the value of the company's stock today?The value of the company's stock today can be determined using the gordon constant growth dividend model.
Gordon constant growth dividend model = dividend to be paid next year / (required return - growth rate)
$3.26 / (0.15 - 0.065) = $38.35
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Kenny, Inc., is looking at setting up a new manufacturing plant in South Park. The company bought some land six years ago for $8.4 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent facilities elsewhere. The land would net $11.2 million if it were sold today. The company now wants to build its new manufacturing plant on this land; the plant will cost $22.4 million to build, and the site requires $990,000 worth of grading before it is suitable for construction. What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project?
Answer:
$34,590,000
Explanation:
Kenny incorporation is looking at setting up a new manufacturing plant in South park
The company purchased some lands six years ago $8.4 million
The land will net $11.2 million if sold today
The plant will cost $22.4 million to build
The site requires $990,000 worth of grading before construction
Therefore the proper cash flow can be calculated as follows
= opportunity costs + costs + upgradation
= $11,200,000 + $22,400,000 + $990,000
= $34,590,000
Hence the proper cash flow is $34,590,000
A company in the growth phase of its product life cycle will normally have which of the following patterns of cash flows? Select one: a. Negative or positive cash flows from operations, negative cash flows from investing and negative cash flows from financing b. Positive cash flows from operations, positive cash flows from investing and positive cash flows from financing c. Negative cash flows from operations, negative cash flows from investing and positive cash flows from financing d. Negative or positive cash flows from operations, negative cash flows from investing and positive cash flows from financing
Answer:
The correct answer to the question is OPTION D (Negative or positive cash flows from operations, negative cash flows from investing, and positive cash flow from financing).
Explanation:
The product life cycle of a company generally talks about the marketing aspect of a product and strategies to ensure the product from manufacturing excel in the market. There are for phase: Introduction, growth, maturity, and decline.
After the product is unveiled to the public, the growth phase is the next as it shows how the product gain in the market. In this phase, the company has been able to win a lot of trust from consumers, this is evident with an increase in sales of the product and overall profit registered by the company.
The cash flow from a product is either positive or negative depending on the stage the product is in the growth phase. However, positive cash flow will occur as soon as sales start to peak and overall acceptance of the product.
Running operations could either have a positive or negative cash flows depends on the differences in revenue, expenses, and how the company finance operations.
Negative cash flows from investing occur during the growth phase because the company continues to invest, buy assets, pay loans, and do other activities.
Positive cash flows from financing during the growth phase of the new product means the company is gaining more asset and gaining more money than they are spending.
The public often gets the impression that misconduct is more widespread than it is in reality. true or false?
Answer:
To be honest there is not enough research to tell whether or not, but in my opinion, it is false.
Legislative framework that supports government in employing majority of citizens in South Africa ?
The legislative framework that supports the government in employing the majority of citizens in South Africa is known as the National Council of Provinces.
What is the National Council of Provinces?The National Council of Provinces is the upper house of the Parliament in South Africa under the post-apartheid era and is under their constitution. They came into full effect in 1997.
The National Council of Provinces is given large slots for employment. They make sure citizens are employed. They also enact laws to protect the rights of their citizens under labor law.
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Dustin, who is 48 years old, works for Pinnacle Inc., with a salary of $300,000, a car allowance, and a very nice expense account. Pinnacle is a Fortune 1,000 company that sponsors a defined benefit plan that pays 2 percent times years of participation times the average of the three final years of compensation. In addition, Pinnacle sponsors a 401(k) / profit sharing plan and contributes 18% of employees salary to the profit sharing plan. There is no additional match. If the ADP of the NHCEs is 3%, what is the maximum that Dustin can defer this year (2020)? a. $17,100. b. $14,250. c. $19,500. d. $5,700.
Answer:
c. $19,500.
Explanation:
Given that Pinnacle offer 401(k) proft sharing plan to Dustin, and Dustin is a 48 years old man. It should be noted that one of the benefits of this plan is that it allows the person involved to defer a portion of his paycheck to retirement account each month automatically.
However, it comes with certain limitations on how much can be saved. The limitation is dependent on age and compensation level. In which for the year 2020, the individual 401(k) contribution limit is pegged at $19,500, or $26,000 if such individual's age is 50years and above.
Hence, given that Dustin is 48 years old, the maximum that Dustin can defer this year (2020) is $19500. This is in contrast to the last year 2019, the individual 401(k) contribution limits were $19,000, or $25,000 if such individual is 50years and above.
Describe the importance of the global market and the roles of comparative advantage and absolute advantage in global trade.
Answer:
wish i could help,,,,,,,,,,,,,
Explanation:
E6-11 Suppose this information is available for PepsiCo, Inc. for 2015, 2016, and 2017. (in millions) 2015 2016 2017 Beginning inventory $ 1,926 $ 2,290 $ 2,522 Ending inventory 2,290 2,522 2,618 Cost of goods sold 18,038 20,351 20,099 Sales revenue 39,474 43,251 43,232 Instructions (a) Calculate the inventory turnover for 2015, 2016, and 2017. (Round to one decimal place.) (b) Calculate the days in inventory for 2015, 2016, and 2017. (c) Calculate the gross profi t rate for 2015, 2016, and 2017. (d) Comment on any trends observed in your answers to parts (a), (b), and (c)
Answer:
PepsiCo, Inc.
a) Computation of the Inventory Turnover:
= Cost of goods sold/Average Inventory
(in millions) 2015 2016 2017
= Cost of goods sold 18,038 20,351 20,099
/ Average Inventory $2,108 $2,406 $2,570
= 8.6 times 8.5 times 7.8 times
b) computation of the days in inventory:
= Days in the period/Inventory Turnover Ratio
(in millions) 2015 2016 2017
= Days in the period 365 365 365
/ Inventory Turnover Ratio 8.6 times 8.5 times 7.8 times
= 42 days 43 days 47 days
c) Computation of the Gross profit rate:
= Gross profit/Sales * 100
(in millions) 2015 2016 2017
Gross profit $21,436 $22,900 $23,142
/ Sales Revenue 39,474 43,251 43,232
= 54.3% 52.9% 53.5%
d) PepsiCo's inventory turnover reduced marginally from 2015 to 2017. The days in inventory fluctuated unsteadily just like the gross profit rate in the three years under review.
Explanation:
a) Data and Calculations:
(in millions) 2015 2016 2017
Beginning inventory $ 1,926 $ 2,290 $ 2,522
Ending inventory 2,290 2,522 2,618
Total Inventory 4,216 4,812 5,140
Average Inventory $2,108 $2,406 $2,570
Sales revenue 39,474 43,251 43,232
Cost of goods sold 18,038 20,351 20,099
Gross profit $21,436 $22,900 $23,142
PepsiCo's inventory turnover is a ratio that shows the frequency at which the company sells and replenishes its goods during an accounting period. It is calculated as the cost of goods sold divided by the average inventory.
PepsiCo's days in inventory indicates the number of days the company takes to sell its inventory. It is calculated as the number of days in the period, e.g. 365 days, divided by the inventory turnover ratio.
The Gross profit rate shows the relationship between the gross profit and the sales revenue. It is the percentage of sales revenue that covers the business expenses and from which net income is derived.
If the marginal utility from consuming the ninth unit of a product is 3 and the total utility from all nine units is 115, then the total utility from consuming eight units must be Multiple Choice 112. 118. 38.
The total utility from consuming eight units given the marginal utility and total utility of the ninth unit must be 112.
What is marginal and total utility?Marginal utility is the additional utility derived from consuming one more unit of a good. Total utility is the total satisfaction that is derived from the consumption of a good or service.
Total utility of consuming the 8th unit = total utility of consuming the ninth unit - marginal utility of the ninth unit
115 - 3 = 112
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What is the difference between an implied warranty and an extended
warranty?
A. An implied warranty is free, and an extended warranty costs the
consumer money.
B. An implied warranty is upheld by law, while an extended warranty
is a written guarantee.
C. An implied warranty is for consumers, and an extended warranty is for businesses.
D. An implied warranty has no time limit, while an extended warranty
has an expiration
Answer:
d implied is free extended cost
Answer:
The answer is B. An implied warranty is upheld by law, while an extended warranty
is a written guarantee.
Explanation:
Implied warranties are covered by federal law, while extended warranties are not.
Great Lakes Clinic has been asked to provide exclusive healthcare services for next year's World Exposition. Although flattered by the request, the clinic's managers want to conduct a financial analysis of the project. There will be an up-front cost of $160,000 to get the clinic in operation. Then, a net cash inflow of $1 million is expected from operations in each of the two years of the exposition. However, the clinic has to pay the organizers of the exposition a fee for the marketing value of the opportunity. This fee, which must be paid at the end of the second year, is $2 million. a. What are the cash flows associated with the project
The cash flow that is associated with this project are:
-$160000$1000000-$1000000What is a cash flow?This term is used to refer to the net cash that is moved in or out of a business at a particular time.
Cash flow for year 0
The initial cash flow = -$160000
cash flow = -$160000
Cash flow for year 1
This is the net cash flow = $1000000
Cash flow in the second year
Net cash flow minus organiners fee
= 1000000- 2000000
= -$1000000
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Who can access presentations shared online using PowerPoint’s broadcast service?
A) anyone with the URL
B) anyone with a password
C) only an invited audience
D) only those with a secure ID
The people who can access a presentation online via the broadcast service are A) anyone with the URL.
Who has access via PowerPoint’s broadcast service?This is a feature on PowerPoint that allows people to view a presentation on their own computers while the presenter presents from theirs.
The people who can access this presentation are those with the URL to the broadcast service thereby allowing them to log onto the service.
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What is the best reason for homebuyers to create a budget before taking out a mortgage?
Answer: The best reason for home buyers to create a budget before taking out a mortgage is to plan how to pay off the money they have borrowed. A mortgage is a type of loan, usually emitted by Banks, in which a person receives cash up front in order to buy a house.
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Margin of Safety Comer Company produces and sells strings of colorful indoor/outdoor lights for holiday display to retailers for $15.98 per string. The variable costs per string are as follows: Direct materials $1.87 Direct labor 1.70 Variable factory overhead 0.57 Variable selling expense 0.42 Fixed manufacturing cost totals $745,726 per year. Administrative cost (all fixed) totals $527,604. Comer expects to sell 239,900 strings of light next year.
1. Calculate the break-even point in units.
2. Calculate the margin of safety in units.
3. Calculate the margin of safety in dollars.
1. The calculation of the break-even point in units for Comer Company is as follows:
= Fixed costs/Contribution margin per unit
= 111,500 units ($1,273,330/$11.42)
2. The calculation of the margin of safety in units for Comer Company is as follows:
= current sales minus the breakeven point sales units
= 128,400 units (239,900 - 111,500)
3. The calculation of the margin of safety in dollars for Comer Company is as follows:
= total budgeted sales revenue and break-even sales in dollars
= $2,051,832 (128,400 x $15.98)
What is the break-even point?The break-even point is the point at which the total revenue equals total costs (including variable and fixed costs).
At the break-even point, both in units and in dollars, the organization records no profit or loss.
The margin of safety shows the total number of sales (in units or dollars) above the breakeven point.
Data and Calculations:Selling price per string = $15.98
Variable costs:
Direct materials $1.87
Direct labor 1.70
Variable factory overhead 0.57
Variable selling expense 0.42
Total variable cost per unit = $4.56 ($1.87 + $1.70 + $0.57 + $0.42)
Contribution margin per unit = $11.42
Contribution margin ratio = 71.46% ($11.42/$15.98 x 100)
Fixed manufacturing cost totals $745,726 per year
Administrative cost (all fixed) totals $527,604
Total fixed costs = $1,273,330 ($745,726 + $527,604)
Expected sales units next year = 239,900 strings
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How does diversity help companies have a competive advantage?
Answer:
In a diverse workplace, competitive advantage is realized not by merely acknowledging diversity but also by creating an environment of inclusion, where employees work toward a common objective while feeling supported—resulting in greater productivity and employee commitment.
Explanation:
hope it helps......
Consider two neighboring island countries called Felicidad and Arcadia. They each have 4 million labor hours available per week that they can use to produce rye, jeans, or a combination of both. The following table shows the amount of rye or jeans that can be produced using 1 hour of labor.
Country Rye Jeans
(Bushels per hour of labor) (Pairs per hour of labor)
Felicidad 4 16
Arcadia 5 10
Initially, suppose Arcadia uses 1 million hours of labor per week to produce rye and 3 million hours per week to produce jeans while Felicidad uses 3 million hours of labor per week to produce rye and 1 million hours per week to produce jeans. Consequently, Felicidad produces 12 million bushels of rye and 16 million pairs of jeans, and Arcadia produces 5 million bushels of rye and 30 million pairs of jeans. Assume there are no other countries willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of rye and jeans it produces.
Felicidad's opportunity cost of producing 1 bushel of rye is ________ of jeans, and Arcadia's opportunity cost of producing 1 bushel of rye is ________ of jeans. Therefore, ________ has a comparative advantage in the production of rye, and ________ has a comparative advantage in the production of jeans.
Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. In this case, the country that produces rye will produce ________ million bushels per MONTH, and the country that produces jeans will produce ________ million pairs per MONTH.
Answer:
Felicidad: each bushel of rye cost 4 pairs of jeans
Arcadia: each bushel of rye cost 2 pair of jeans
As in comparison it takes less pair of the jean to produce a bushel of rye Arcadia has a comparative advantage in the production of rye
while Felicidad has it in the production of jeans.
Specialized economy:
Felicidad 16,000,000 pairs of jean
Arcadia 20,000,000 bushels of rye
Explanation:
The opportunity cost is the number of goods not produced as a result of the production choice.
For the bushel of rye, it will be the pairs of jeans.
For Felicidad Island will be:
16 jeans / 4 bushel of rye = 4 jeans
each bushel of rye cost 4 pairs of jeans
For Arcadia Island will be:
10 pair of jeans / 5 bushels of rye = 2 jeans
each bushel of rye cost 2 pair of jeans
If they specialize
Felicidad 4 millions labor hours x 4 pairs per hour = 16,000,000 jeans
Arcadia 4 millions labor hours x 5 bushel per hour = 20,000,000 bushel
Khanam Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $97 Units in beginning inventory 500 Units produced 8,400 Units sold 8,500 Units in ending inventory 400 Variable costs per unit: Direct materials $20 Direct labor $37 Variable manufacturing overhead $1 Variable selling and administrative $11 Fixed costs: Fixed manufacturing overhead $67,200 Fixed selling and administrative $161,500 The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month. What is the net operating income for the month under variable costing
Answer: $9,300
Explanation:
Variable Costing net operating Income = Contribution Margin - Fixed costs
Contribution Margin = (Selling price - Direct materials - Direct labor - Variable manufacturing overhead - Variable selling and administrative) * Units sold
= (97 - 20 - 37 - 1 - 11) * 8,500
= $238,000
Variable Costing net operating income = 238,000 - 67,200 - 161,500
= $9,300
Mark's department has hired a marketing manager to help increase the sale of the company’s products. However, he believes that the marketing manager adds no value to the company and simply plays back what the company wants to hear. Mark must write a letter to the marketing manager offering constructive criticism. Which of the following should Mark include in the letter to avoid litigation charges? Group of answer choices False information about the consultant Statements that hurt the sentiments of the consultant Personal opinions about the consultant's character Specific facts about the consultant that can be verified
Answer:
Mark should include in the letter to avoid litigation charges:
Specific facts about the consultant that can be verified.
Explanation:
False information, sentiment-hurting statements, or personal opinions about the consultant's character should never be found in formal letters that are meant to offer constructive criticisms. This means that only specific facts that are verifiable should be included. Formal letters are not avenues for character defamation. They are called "formal" because they must stick to specific and relevant official purposes.
Which of the following statements is CORRECT? Group of answer choices Relative to proprietorships, corporations generally face fewer regulations, and they also find it easier to raise capital. Stockholders should generally be happier than bondholders to have managers invest in risky projects with high potential returns as opposed to safe projects with lower expected returns. One disadvantage of operating as a corporation rather than as a partnership is that corporate shareholders are exposed to more personal liability than are partners. There is no good reason to expect a firm's stockholders and bondholders to react differently to the types of assets in which it invests.'
Answer:
Stockholders should generally be happier than bondholders to have managers invest in risky projects with high potential returns as opposed to safe projects with lower expected returns.
Explanation:
NOTE THIS TERMS
✓Stockholders is also regarded as shareholders, it could be individual or institution having one or more share of stock in a coporation (public or private) and it must be a legal deal.
✓bondholders are investor participating in bond securities.
From the question the correct statement is "Stockholders should generally be happier than bondholders to have managers invest in risky projects with high potential returns as opposed to safe projects with lower expected returns"
This is true because any profit made from the share of stock, the Stockholders have their own dividend there, but bondholders irrespective of profit made, their own interests is fixed. Hence,more profits are attributed Stockholders.
A company uses the weighted average method in its processing costing system and a normal costing system in the application of manufacturing overhead to production. MOH costs are applied to production at a rate of $3 per direct labor hour. All direct materials are added at the beginning of the production process. The following data relate to the operations of the company’s first processing department for August 2018:
Beginning WIP 800 units, 60% complete with respect to conversion costs Units started during the month 16,000
Ending WIP 300 units, 40% complete with respect to conversion costs
On July 31st, $1,300 of direct materials and $2,400 of conversion costs were assigned to units in ending inventory. During August, $47,000 of direct materials were requisitioned for production and $215,000 of direct labor costs were incurred. Direct laborers are paid a rate of $10 per direct labor hour.The costs assigned to units in Ending Inventory on August 31st were:
a. $2,899.20
b. $2,737.20
c. $5,961.00
d. $3,873.60
Answer:
a. $2,899.20
Explanation:
Beginning WIP 800 units, 60% complete with respect to conversion costs Units started during the month 16,000
Ending WIP 300 units, 40% complete with respect to conversion costs
Beginning WIP 800 units:
direct materials = $1,300
conversion costs = $2,400
units started = 16,000
units finished = 16,000 + 800 - 300 = 16,500
costs added during the month:
direct materials = $47,000
direct labor = $215,000
OH = 21,500 x $3 = $64,500
total conversion costs = $279,500
ending WIP 300
100% complete for materials
40% complete for conversion costs = 120 EU
total EU:
materials = 16,800
conversion costs = 16,500 + 120 = 16,620
costs per EU:
materials = ($1,300 + $47,000) / 16,800 = $2.88
conversion = ($2,400 + $279,500) / 16,620 = $16.96
ending WIP costs:
300 x $2.88 = $864
120 x $16.96 = $2,035.20
total = $2,899.20
buying a $50 Bouquet of roses for Valentine’s Day is an example of a(n) ____ purchase. (fill in blank)
————-
a-esteem
b-physiological
c-security
d-self actualization
If a secondary marketing team wants to reduce their production and the
volume of loans in their pipeline, what action might it take?
If a secondary marketing team wants to reduce their production and the
volume of loans in their pipeline they can take the action of putting up sales in a secondary mortgage.
What is a Secondary Mortgage?A secondary mortgage is a system or marketplace where home loans and servicing rights are bought and sold between the lenders and the people investing. In this system, the lenders come in contact with the investors and agreements would be reached.
So if a secondary marketing team wants to reduce their production and the volumes of loans they have, they would have to act as a middlemen between the lenders and investors. That way they reduce the production cost.
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Suppose there is a fall in the price of a good from $ to half the price, the quantity demanded increases from x to 3x units, and the price elasticity of demand is . Now suppose there is an increase in the price of a good from $ to double its price and the price elasticity is . The elasticity is enter your response here , and remains the same regardless of an increase or decrease in price. (Round your response to two decimal places.) This is known as ▼ income elasticity arc elasticity cross-price elasticity .
The type of elasticity of demand that's illustrated based on the price given is arc elasticity.
What is elasticity of demand?The elasticity of demand simply means the degree of responsiveness based on the change in the price of a product.
In this case, type of elasticity of demand that's illustrated based on the price given is arc elasticity. This measures the quantity demanded to a price.
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In response to accounting scandals and the collapse of Enron at the turn of the century, the U.S. Congress passed the Sarbanes-Oxley Act to establish a system of federal oversight of corporate accounting practices. The purpose of the law is to hold CEOs accountable in matters of financial reporting, and to ensure the truthfulness of statements offered to investors. Despite the law's good intentions, businesses must now spend millions of dollars each year just to comply with the regulations. However, the steep challenges of compliance have created a boom in new accounting firms that specialize in helping companies meet the law's requirements.
Congress passed Sarbanes-Oxley into law as a response to:________
a. Executive CEO pay
b. Financial scandals and corporate fraud
c. Consumer protection violations
d. Globalization
Answer:
Financial scandals and corporate fraud
Explanation:
The Sarbanes-Oxley Act was passed in 2002. The purpose of the act was to protect investors from fraudulent financial reporting by corporations.
A company must decide between scrapping or reworking units that do not pass inspection. The company has 44,000 defective units that have already cost $264,000 to manufacture. The units can be sold as scrap for $156,000 or reworked for $198,000 and then sold for $374,000. If the company decides to rework the units, incremental income equals:
If the company decides to rework the units, its incremental income equals $20,000.
What is incremental income?Incremental income represents the additional income gained after taking a decision, e.g. rework.
For instance, when this company reworks the units, it reduces its loss from $108,000 if the units were sold as scrap to $88,000.
Thus, the incremental income is the difference between $108,000 and $88,000 loss.
Data and Calculations:Defective units = 44,000
Cost of defective units = $264,000
Scrap value of defective units = $156,000
Cost of rework = $198,000
Sales value after rework = $374,000
Incremental income after rework =
Loss when sold as scrap = $108,000 ($264,000 - $156,000)
Loss when sold after rework = $88,000 ($374,000 - $264,000 - $198,000)
Incremental income after rework = $20,000 ($108,000 - $88,000)
Thus, if the company decides to rework the units, its incremental income equals $20,000.
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Ultimately, the responsibility of the project manager is to: _____________
a. make sure the customer is satisfied.
b. finish the project as quickly as possible.
c. finish the project as cost effectively as possible.
d. make independent decisions.
The responsibility of the project manager is simply to A. make sure the customer is satisfied.
Who is a project manager?It should be noted that a project manager simply means an individual who oversees a project and ensure that the goals of the project are achieved.
In this case, this implies that the responsibility of the project manager is to make sure the customer is satisfied.
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Note 1: On April 1 of the current year, Warren Corporation received a $34,000, 10 percent note from a customer in settlement of a $34,000 open account receivable. According to the terms, the principal of the note and interest are payable at the end of 12 months. The annual accounting period for Warren ends on December 31.
Note 2: On August 1 of the current year, to meet a cash shortage, Warren Corporation obtained a $34,000, 12 percent loan from a local bank. The principal of the note and interest expense are payable at the end of six months.
Required:
For the relevant transaction dates of each note, indicate the amounts and the direction of effects on the elements of the balance sheet and income statement.
EcoFabrics has budgeted overhead costs of $1,001,700. It has allocated overhead on a plantwide basis to its two products (wool and cotton) using direct labor hours which are estimated to be 477,000 for the current year. The company has decided to experiment with activity-based costing and has created two activity cost pools and related activity cost drivers. These two cost pools are cutting (cost driver is machine hours) and design (cost driver is number of setups). Overhead allocated to the cutting cost pool is $381,600 and $620,100 is allocated to the design cost pool. Additional information related to these pools is as follows.
Wool Cotten Total
Machine hours 114,000 114,000 228,000
No of Setups 1,140 570 1710
Required:
a. Calculate the overhead rate using activity based costing.
b. Determine the amount of overhead allocated to the wool product line and the cotton product line using activity-based costing.
c. What amount of overhead would be allocated to the wool and cotton product lines using the traditional approach, assuming direct labor hours were incurred evenly between the wool and cotton?
Answer and Explanation:
a. The computation of overhead rate using activity-based costing is shown below:-
Cutting = Cost ÷ Machine Hours
Cutting = $381,600 ÷ 228,000
= $1.67 Per Machine Hours
Design = Cost ÷ No. of Setup
Design = $620,100 ÷ 1,710
= $362.63 per set up
The computation of the amount of Overhead Allocated is shown below:-
Wool:
114,000 × $1.67
= $190,380
= 1,140 × $362.63
= $413,398
Total = $603,778
Cotton:
114,000 × $1.67
= $190,380
= 570 × $362.63
= $206,669
Total = $397,049
The computation of amount allocated using traditional approach is shown below:- = $1,001,700 ÷ 2
= $500,850
Overhead Allocated to Wool = $500,850
Cotton = $500,850
Max bought 700 shares of an oil company's stock for $15.60 per share. How much did Max spend?
Answer:
$10,920
Explanation:
15.6 * 700 = 10,920
Spinoza, a professional hockey player, sustained serious injuries when a flying puck penetrated the face protector on his helmet. Spinoza decides to bring a products liability suit against his team and the helmet manufacturer alleging that the face mask component of the helmet was defectively designed. In such a case, which proof element (i.e., evidence) would be helpful to Spinoza:
a. an alternative face mask design (deemed safer in independent laboratory tests) has been available in the marketplace for several years.
c. the management of Spinozaâs team is aware of the safer design but allows players to choose their own preferred (less safe in many cases) helmet.
d. use of the alternative design could have reduced or avoided Spinozaâs injury.
e. all of the above.
Answer:
Option e (all of the above) is the correct choice.
Explanation:
Besides Ice Hockey Players helmets, this year's inclusion methodology is investigated:
The neighborhood of coverage, extensiveness and shape of protective material, stabilization framework percentage of elongation, and thermal expansion. ASTM F1045 "Standard successful project regarding Ice Hockey Helmets" seems to be the requirement used for an athlete helmet evaluation. The minimum sections including its head that even the helmet should protect and defend are required by this requirement. The norm stipulates who and how wide gaps throughout the helmet should be, in comparison to something like the coverage criteria. By measuring the chinstrap for resilience and flexural strength and therefore by investigating the effectiveness absorption characteristics including its helmet liner, the strength including its helmet is assessed.Via measuring the chinstrap for resilience and elasticity and therefore by investigating the effectiveness absorbing properties of the helmet liner, the consistency including its helmet is assessed. All tests are carried out using helmets that have been applied to head shapes that mimic separate physical head sizes. The helmet is mounted on a head shape for the retaining scheme and perhaps a pressure is applied that used a method to mimic the configuration of the chin bone. The endurance as well as elongation characteristics of the harness including its helmet are measured.The innovative face mask style that Spinoza's may have used seems to have been commercially available for far too many decades. Spinoza's team leadership is conscious including its safer style, but it encourages participants to select their favorite helmet. Unless the alternative architecture could also have been minimized or eliminated through the use of Spinoza.Some other alternative options offered are not comparable to something like the situation described. So, the best option is the one above.